CEO's statement

Record quarter with strong growth

Kista, 14 July, 2022

Jonas Hasselberg

CEO

CEO's Statement

The second quarter of 2022 became the best in Proact’s history, revenue-wise as well as profit-wise. Revenues for the quarter amounted to SEK 1 154 million (878), corresponding to 31 per cent growth. Organically revenues increased by 21 per cent, with organic growth of 33 per cent for systems and 6 per cent for services. Our recurring revenues, revenues from cloud services and support services, continue to develop strongly. In total they increased by 23 per cent, including the contribution from ahd, and organically they increased by 6 per cent.

During the second quarter, the demand for our services has been continuously high, and we closed contracts for cloud services of SEK 141 million (72), BU Nordics & Baltics showed the highest growth, but both BU West and BU UK also increased their contract volumes significantly compared to the same period last year. During covid-19 many customers were hesitant to enter into long contracts, whereas we now see an increased interest in buying IT solutions as a service.

We have also closed systems deals at a high level during the quarter, with high revenue growth in both BU Nordics & Baltics and in BU Central. The underlying demand is good, even though the growth partly is due to some larger deals in BU Nordics & Baltics and a weak comparison quarter last year. We still see delivery delays at several of our suppliers, and our order backlog continues to be significantly higher than normal, even though there has been a certain reduction since the first quarter of the year.

Adjusted EBITA during the quarter increased to SEK 82 million (46), corresponding to a margin of 7 per cent. The increase is primarily a result of the increased revenues. Gross margins reduced somewhat within services in BU Nordics & Baltics and in BU Central. In BU Nordics & Baltics, we have initiated a larger action program to ensure a better margin development.

Proact is still not impacted financially to any large degree by the war in Ukraine. However, the uncertainty remains regarding future economic growth and inflation, as well as further effects on supply chains. We are monitoring the development and implementing measures, such as price increases for customer and efficiency improvements, to reduce the potential negative impact on the company.

During the quarter we announced yet another very exciting acquisition, which was concluded on July 1st. I’m happy to be able to welcome sepago’s 85 co-workers to Proact. The acquisition strengthens our presence in Germany and contributes with high in-demand competence within the strategically important area of digital transformation through public cloud services.

We have also launched two new services during the quarter. PMCP (Proact Managed Container Platform) enables our customers to buy a container-based development platform as a service, thereby quickly and simply deploying modern application development in the cloud. The second service that we have launched is SD-Connect, through which we offer our customers an AI-based software defined networking solution.

In summary we leave a very good quarter behind us, with strong growth and profitability, as well as both an exciting acquisition and the launch of new innovative services.