Proact: Fiscal 4Q19 Financial Results

Proact IT Group AB reports preliminary figures for 4FQ19.

Like the previous quarter, they are characterized by challenges in business unit West, including Belgium, the Netherlands and Germany. The improvement plan implemented in Germany in 2019, related to sales challenges, are proceeding as expected and earnings improved compared to the previous quarter.

As in the previous quarter, the challenges remain in the Netherlands where lower margins and higher sales costs had an impact on earnings. In business unit UK, margins were lower and in business units Nordics, earnings performance was good compared to the previous quarter.

Compared with 3FQ19, the group’s revenues increased to 991 million SEK and adjusted EBITA to 49 million SEK, where seasonal variations and contributions from the acquisition of PeopleWare had positive effects. The quarter’s earnings have been adjusted for acquisition costs of 6 million SEK, largely related to the acquisition of PeopleWare, and for one-off costs of 5 million SEK for the structural changes in the business that were initiated earlier in the year.

Preliminary figures for 4FQ19 compared to 3FQ19:
• Revenue increased by 41% to 991 (701) million SEK. Organically, revenues increased by 32% to 928 million SEK.
• Adjusted EBITA amounted to 48,9 (36,9) million SEK, corresponding to an adjusted EBITA margin of 4,9% (5,3%).
• Items affecting comparability of -11,2 million SEK relate to costs for acquisitions and structural changes.
• New agreements regarding cloud services have been signed to a total value of 97 (87) million SEK.

Preliminary figures for 4FQ19 compared to 4FQ18:
• Revenue increased by 2% to 991 (967) million SEK. Organically, revenue decreased by 3% to 928 (954) million SEK.
• Adjusted EBITA amounted to 48,9 (57,7) million SEK, corresponding to an adjusted EBITA margin of 4,9% (6,0%).
• Items affecting comparability of -11,2 million SEK relate to costs for acquisitions and structural changes.
• New agreements regarding cloud services have been signed to a total value of 97 (176) MSEK.

“During the quarter we saw an improvement in results in Germany and a positive development in PeopleWare, the recently acquired company in the Netherlands. Cloud service revenues increased by 16% in the quarter compared to the previous year and we signed new contracts with a contract value of 97 million SEK. We are not satisfied with the quarter’s results, but our overall goals remain, where our cloud services and accelerated growth through acquisitions are in focus. At the same time, we must also succeed in maintaining revenue and margins in the system business with associated support and consulting services,” says Jonas Hasselberg, CEO and president.

Founded in 1994, Proact completed over 5,000 successful projects around the world, have more than 3,500 customers and currently manage in excess of 100PB of information in the cloud. It employs over 1,000 people in 14 countries across Europe and North America.