Proact: Fiscal 2Q18 Financial Results

(in SEK million)	2Q17	2Q18	*Growth*	6 mo. 2017	6 mo. 2018	Growth
Revenue	826	868	5%	1,698	1,626	*-4%*
Profit after tax	30.1	35.2	17%	54.0	60.5	12%

Proact IT Group AB announced its financial results for 1FQ18 ended June 2018.

The second quarter in brief
• Revenue increased by 5% to SEK 868 (826) million. Growth in local currencies was 1%. Change in accounting principles has affected revenue for the quarter negatively by SEK 8 million.
• EBITDA increased by 8% and amounted to SEK 62.3 (57.4) million.
• Profit before tax increased by 19% to SEK 46.8 (39.5) million.
• Profit after tax increased by 17% to SEK 35.2 (30.1) million.
• Profit per share amounted to 3.84 (3.21) SEK.

The first six months in brief
• Revenue decreased by 4% to SEK 1,626 (1,698) million. Growth in local currencies was -7%. Change in accounting principles has affected revenue for the quarter negatively by SEK 103 million.
• EBITDA increased by 3 % and amounted to SEK 112.4 (109.7) million.
• Profit before tax increased by 11% to SEK 80.1 (72.2) million. Adjusted for items affecting comparability (SEK 2.6 million), relating to costs for change of CEO, the increase was 15%.
• Profit after tax increased by 12% to SEK 60.5 (54.0) million.
• Profit per share amounted to 6.60 (5.73) SEK.
• Return on equity over the last 12 months amounted to 31.0% (33.1%).

Continued positive development of revenues and profits
The firm reports a continued positive trend regarding revenue and profits. The positive development means that it report the highest revenue and the best profits, for a second quarter, in the history of the company.

During the quarter, it also continued to improve net margin. The net margin for the quarter was 5.4% and for the first half year 5%.

The positive development has been achieved despite the adverse effects of changed accounting principles, which the company described and reported in the interim report for the first quarter of the year. In the second quarter, the changed accounting principals have affected the company’s revenues negatively by SEK 8 million, while the cost of goods sold has been positively affected. As previously described, the changed accounting principles have no impact on the company’s business and cash flows.

For the second quarter, profits before taxes amounted to SEK 46.8 million, which is an increase of 19% compared to the corresponding period last year. The company’s gross margin has also increased by 1%age point.

Service revenues have continued to develop positively during the period and amounted to SEK 291 million, which is an increase of 4%. Service revenues relating to cloud services amounted to SEK 109 million, which is an increase of 5%. The financial development is in line with established strategy, which among other things involves ensuring good cost control, regular improvement and streamlining in respect of service operations, ensuring that necessary measures are taken in countries failing to meet set financial targets and increasing the emphasis on sales and marketing within the company. The positive financial development shows that its expertise and our market-leading offering, within data centres with associated consulting and support services and cloud services, are still appreciated by both existing and new customers. During the quarter it successfully completed a number of customer projects in the above areas.