Financial reports

Proact strives to give the shareholders, investors and financial analysts transparent, relevant and accurate information to increase knowledge of the Group’s operations and share


Interim report January - March 2008

Strong start to 2008 The first quarter in brief - Net turnover increased by 15 % to SEK 238 (207) million. - Profit before tax amounted to SEK 8.0 (5.6) million. - Net profit after…

Solna 14 July, 2023

Generally good demand in several markets

Comments from the CEO of Proact

During the second quarter of 2023 we have generally seen good demand in several markets, although a few countries have seen a somewhat slower sales pace connected to the macroeconomic uncertainties. Revenues in the quarter increased overall by 4% to SEK 1,202 million (1,154) and decreased organically by 2%.

After several quarters of high organic growth in the systems business, the second quarter ended with a decrease of 6% and an organic decrease of 9% compared to a record quarter last year. All Business Units except UK showed an organic decline, to a large extent because of a strong comparison quarter, and primarily in Germany also weaker demand connected to the uncertain macroeconomic situation.

The service business continues to develop well and grew by 20% to SEK 537 million (447) where the organic growth was 9%. It is primarily our recurring revenues, revenues from cloud and support services, that continue growing at a high pace with good demand in the market. In total they increased by 19% to an annualized rate of SEK 1,679 million (1,413) and organically they increased by 10% with organic growth in all Business Units. The recurring revenues also increase quarter by quarter with growth of 5% from the first quarter of 2023. We signed contracts for new cloud services of SEK 116 million (141) where Business Unit West and Business Unit NOBA decreased compared to last year, as they have closed a lower number of large deals this quarter. Just as in the first quarter this year, our assessment is that it is related to the timing of closing of deals rather than an increased cautiousness in the market, since we generally see good customer demand for our cloud solutions. The consulting business shows limited organic growth, and in some areas, we see lower demand and utilization, but for specialist competence within our strategic areas the challenge is still to recruit enough experienced colleagues.

As communicated in our latest interim report, we have implemented a cost saving program during this quarter. Cost reductions occur in most of our countries and affect all types of cost, with focus on administrative costs and costs for our service delivery.

Compared to our cost base in the first quarter we estimate that the program reduces our costs in the current year by between SEK 45 and 50 million, primarily during the third and the fourth quarter, and that we enter 2024 with a reduction of the cost base of around SEK 60 million annually. This saving gives us room to invest in future growth in the markets and segments where we continue to see good demand and compensates for the inflationary cost increases we have seen. The program has in total resulted in restructuring costs of SEK 20 million, which has been reported as items affecting comparability in the quarter.

The gross margin after depreciation increased somewhat in the quarter from 22.3% to 22.6%, where the systems margins were unchanged, while the service margin increased slightly both due to the ongoing savings program and due to the earlier implemented efficiencies especially in NOBA.

Adjusted EBITA declined marginally during the quarter to SEK 81,4 million (82,1) corresponding to a margin of 6.8% (7.1). Somewhat higher revenues and gross profits did not fully compensate for the increased sales and administration expenses compared to last year.

We continue working closely with our important partners and have received further awards during the quarter, such as for instance by NetApp in the UK for our initiative in the public sector and for our new British customers. We also continue to deliver customer value and were nominated as one of top five suppliers in Radar’s annual report on supplier quality within Infrastructure and managed services and within Consulting services in Sweden.

In conclusion, Proact and our employees delivered a good quarter considering the market conditions and we are strategically well positioned for continued growth in revenues and profits going forward.

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