Proact IT Group — Interim / Quarterly Report 2011

Oct 24, 2011

INTERIM REPORT January-September 2011

Continuing growth for Proact

Nine months in brief

• Net turnover increased by 68 % to SEK 1 533 (911) million.
• EBITDA increased by 46 % to SEK 83.9 (57.3) million.
• Profit before tax fell by 27 % to SEK 29.2 (39.6) million. Excluding acquired units, profit increased by 40 % to SEK 55.5 million. Profit was affected by acquisition expenses amounting to SEK 12.7 million.
• Profit after tax fell by 29 % to SEK 21.3 (29.8) million.
• Profit per share fell by 42 % to SEK 1.80 (3.10).
• Return on equity over the last 12 months amounted to 23.4 (31.3) %.

The third quarter in brief

• Net turnover increased by 125 % to SEK 526 (235) million
• EBITDA increased by 75 % to SEK 35.4 (20.2) million.
• Profit before tax increased by 12 % to SEK 15.8 (14.1) million. Excluding acquired units, profit increased by 89 % to SEK 26.7 million. Profit was affected by acquisition expenses amounting to SEK 2.0 million.
• Profit after tax increased by 11 % to SEK 12.5 (11.3) million
• Profit per share fell by 1 % to SEK 1.16 (1.17).

About Proact

The Proact Group has more than 625 employees and conducts business in Belgium, Czech Republic, Denmark, Estonia, Finland, Great Britain, Latvia, Lithuania, The Netherlands, Norway, Slovakia, Spain and Sweden. Proact was founded in 1994 and its parent company, Proact IT Group AB (publ) has been listed on Nasdaq OMX Stockholm since 1999 under the symbol PACT.

Additional information about Proact is available at www.proact.eu

Proact is a specialist in storage, archiving and securing large volumes of mission-critical information. As an independent integrator, Proact provides systems, support and consulting services within its focus area of data storage and archiving.

Report by Olof Sand, Managing Director of Proact

Proact has identified a niche in the field of IT infrastructure handling, storage and archiving. Focusing on this niche, the company's ambition is to create a company operating on the most important markets in Europe. The acquisitions taking place throughout 2011 have led to an increase in Proact's net sales of 68 % compared with the corresponding period in 2010. The company is now established on 13 markets in Europe and is the biggest European storage and archiving specialist.

Efforts to integrate the acquired units are now starting to take effect, as can be seen from the growth generated by Proact in the third quarter. Profits are better than in the corresponding quarter for the previous year, but some integration work still remains to be done. Proact grew by 125 % over the third quarter, of which organic growth accounted for 43 %. Profit before tax amounted to SEK 15.8 (14.1) million.

In the short term, the target is to reach a margin of 5 %, the level historically reported by Proact. In the long term, the target is to achieve a 7 % margin before tax.

The acquisitions made by Proact in 2011 have, on average, lower profitability than Proact in general and have the same focus and position as Proact on their respective markets. Major value for shareholders will be created once the acquired companies have been integrated and achieved the same profitability as is found throughout Proact in general. In the second and third quarters, the emphasis was on improving the efficiency of acquired companies. Proact's steering and follow-up model has been implemented on all markets. Intensive efforts to create a collective corporate culture and to find synergies in respect of purchasing and offerings to clients have also got under way.

The contracted income is an important element in Proact's stability and accounts for around one-third of total income. This includes financing, support and cloud services, most of them with an agreed maturity of three years. One important element of efforts to improve profitability is to increase the amount of contracted income within the units acquired and throughout the Group as a whole.

The acquisition of Databasement in early 2011, a company operating in the Netherlands, Belgium and Spain, meant that Proact gained rapid access to a well-developed portfolio of cloud services. This portfolio has met with a positive reception on all Proact markets throughout the year.

The Group employed 629 people at the end of the quarter, 291 more than for the same period last year. Acquired units represent 261 of these people.

MARKET REVIEW

According to the latest quarterly update from analysis company Gartner, the following areas will drive the income of storage suppliers between 2011 and 2015: modernisation of infrastructure for storage and disk-based backups, virtualisation of servers and desktops, and cloud-based services in the field of storage and archiving. According to Gartner, the growth of information stored digitally and subsequent demands for streamlining have and will continue to be the dominating factor in the immediate future; and hence the company recommends investment in flexible architectures in order to meet both current and future needs.

This is consistent with the development Proact is witnessing on the market in the form of both ongoing client projects and responses to client surveys carried out. During Proact's major client meetings which takes place during the autumn, the Proact Summit is attended by more than 2 000 delegates in the countries in which the company is active, a survey showed that Storage, Disaster/Recovery and Provisioning (= distribution of resources) are by far the three biggest challenges faced at present, and these also have top priority among clients. More than 50 % of respondents also said that they are planning to use the cloud for information storage and archiving in 2012.

As Proact is a storage integrator focusing on cloud services, this involves some interesting opportunities for growth.

FINANCIAL OVERVIEW

Over the nine months of 2011, revenues amounted to SEK 1 533 (911) million, representing an increase of 68 %; or 75 % adjusted for currency effects. Organic growth amounted to 16 %, or 22 % adjusted for currency effects.

This growth in revenues is due mainly to clients in the fields of trade & services, the public sector, the manufacturing industry and banking & finance. The acquisition in the United Kingdom has made a position contribution in the fields of trade & services and banking & finance.

Revenues per Business Unit	Jan-Sep 2011	Jan-Sep 2010
North West	693 557	613 224
Benelux and Spain	217	63
East	85	43
Proact Finance	21	6
Groupwide/elim.	-40	-38
Sales	1 533	911

Over the third quarter of 2011, revenues amounted to SEK 526 (235) million, representing an increase of 125 %; or 128 % adjusted for currency effects. Organic growth amounted to 43 %, or 46 % adjusted for currency effects.

Revenues per Business Unit	Jul-Sep 2011	Jul-Sep 2010
North	208	155
West	233	62
Benelux and Spain	68	20
East	32	13
Proact Finance	8	3
Groupwide/elim.	-22	-18
Sales	527	235

Of the total turnover over the first nine months of the year, system sales amounted to SEK 985 (570) million, representing an increase of 73 %.

Turnover for services operations amounted to SEK 545 (339) million, representing an increase of 61 % compared with the previous year.

Turnover per operating segment	Jan-Sep 2011	Jan-Sep 2010
System sales	985	570
Services operations	545	339
Other revenue	3	2
Sales	1 533	911

System sales over the third quarter amounted to SEK 331 (127) million, an increase of 161 %.

Turnover for services operations amounted to SEK 195 (107) million, representing an increase of 82 % compared with the previous year.

Turnover	Jul-Sep	Jul-Sep
per operating segment	2011	2010
System sales	331	127
Services operations	195	107
Other revenue	1	1
Sales	527	235

Future contracted cash flows within Proact Finance amount to SEK 82 (40) million.

Major deals in the third quarter:

A number of major deals have been agreed with companies such as Agis and Alm. Brand in Denmark, Atos and Nokia Siemens Network in Finland, the Ministry of Agriculture in Estonia, OMX NASDAQ in Latvia, the Rural Development and Agriculture Information Centre in Lithuania, Globus in the Czech Republic, Springer Media and Amgen in the Netherlands, EDB Ergo Group and KPMG in Norway, Manasco in Belgium, Acens in Spain, DLA Piper and Coto Beauty in the United Kingdom, and SAAB AB, the Swedish Prison and Probation Service, the Public Employment Service and Telia in Sweden.

Important events in the third quarter

• Storage system for the city of Oulu Proact supplied a new storage system to the city of Oulu in Finland, with almost 100 TB of storage space. This solution significantly increased the city's storage capacity, leading among other things to a halving of the time required to calculate the payroll figures for its 9 600 employees. This system also offers options for simple expansion in the future.
• Swedish IT managers invest heavily in disaster protection Enhanced disaster protection tops the list of priority investments for IT managers, according to the Proact Storage Barometer, a survey involving IT managers from 100 listed companies and authorities. 50 % of IT managers surveyed stated that enhanced disaster protection is their top priority for investment over the coming year.
• Companies bewildered in the face of increasing information volumes Despite the fact that IT managers at Swedish companies and authorities agree that information volumes will go on increasing,

the solutions for dealing with this growth are becoming more and more unmanageable. According to the Proact Storage Barometer, four out of ten IT managers encourage users to delete information manually from company servers in order to free up space. The Storage Barometer shows that the number of companies handling the growing need for storing using such shortterm, time-consuming methods is on the increase.

Delivery of Cisco UCS solution to ISP Adix in the Netherlands

Adix, one of the leading suppliers of outsourcing in the Netherlands, has opted to purchase a cluster solution from Proact based on products from Cisco UCS and NetApp. Selecting this solution has resulted in greater efficiency for Adix, along with more scalability and maximum data management risk spread. This solution also means a reduction in manual handling, and in its turn Adix is now able to guarantee its customers outstanding uptime.

• Upgrading of PHPOY's Virtual Solutions Local Finnish telecoms operator PHPOY has purchased an update to its storage system from Proact. This system is based on VMware and will be used for running PHPOY's own network of infrastructure servers, as well as for its customers. The new technical solution will save money and facilitate maintenance for PHYPO. It will also give them data centre solutions, virtual servers and a backup service within the scope of the solution.
• Data centre solutions for Malmö University Malmö University is renewing its IT infrastructure with a new storage platform. The deal is initially worth SEK 2 million and will help to create a secure, modern IT environment offering major savings for the university in terms of both time and cost. As far as Proact is concerned, the deal with Malmö University represents a breakthrough as the university will be Proact's biggest client in the public sector in Southern Sweden.
• Skistar to purchase a new platform for storage

Skistar is installing a new storage platform with integrated backup and disaster protection. The two earlier data centres in Sälen and Åre have been merged to form a centralised data centre in Åre which is

more cost-effective and energy-efficient. This solution will provide a scalable, flexible environment which can grow as Skistar grows.

Groupwide storage in the Netherlands Major Dutch hospital Saint Franciscus Gasthuis has invested in two fully redundant storage systems. Besides offering high performance, this system also provides maximum uptime for information through instantaneous technology and immediate data mirroring. Proact will be responsible for round-the-clock support for both hardware and software.

Comprehensive income

Profit before tax amounted to SEK 29.2 (39.6) million for the first nine months of 2011. This profit includes non-recurring acquisition costs of SEK 12.7 million and depreciation of acquired intangible assets of SEK 11.5 million.

Benelux and Spain are demonstrating a positive result; a strong feature in a period which has been characterised largely by integration work.

West is affected by the fact that the budget year for investments in the public sector in the UK extends from May to April. Measures implemented in Denmark have started to take effect over the third quarter.

The integration of Czech company Storyflex has had an adverse effect on profits for East over the period.

Profit before tax per Business Unit	Jan-Sep 2011	Jan-Sep 2010
North	33.4	35.4
Benelux and Spain	6.7	1.3
West	4.2	6.9
East	-4.3	2.2
Proact Finance	-1.7	-0.9
Groupwide/elim.	-9.1	-5.3
Profit before tax	29.2	39.6

During the third quarter, profit before tax amounted to SEK 15.8 (14.1) million. This profit includes non-recurring acquisition costs of SEK 2.0 million and depreciation of acquired intangible assets of SEK 4.6 million.

Profit before tax	Jul-Sep	Jul-Sep
per Business Unit	2011	2010
North	12.8	9.9
Benelux and Spain	1.9	0.8
West	1.0	4.7
East	-0.1	0.5

Proact Finance	-0.6	-0.3
Groupwide/elim.	0.8	-1.5
Profit before tax	15.8	14.1

Balance sheet and cash flow

Cash and equivalents amounted to SEK 60 million on 30 September 2011. Of total bank overdraft facilities of SEK 140 million, SEK 14 million has been utilised. Net liabilities amounted to SEK 164 million. Bank loans amount to SEK 190 million, of which SEK 164 million relates to the acquisition of B2net in the United Kingdom. This loan is associated with the usual lending terms and will be repaid in five to seven years. Contract borrowing is being used to finance Proact's finance company.

Financial position	30 Sep 2011	30 Jun 2011	31 Dec 2010	30 Sep 2010
Cash and cash equivalents	60	57	73	48
Interest-bearing loans	-190	-190	-4	-4
Bank overdraft facili ties	-14	-30	-	-
Contract borrowing	-20	-12	-	-
Net cash/net liability	-164	-175	69	44
Unutilised bank over draft facilities Total bank overdraft	126	109	45	40
facilities	140	139	45	40

Cash flow amounted to SEK -15.3 million over the first nine months of the year, of which SEK 117.0 million was from operating activities.

The acquisition of companies has had an adverse impact on cash flow of SEK 198.4 million, while at the same time various forms of finance have contributed SEK 140.3 million. Investments in tangible fixed assets amount to SEK 59.6 (23.4) million, attributable mainly to Proact Finance and operations. The cash flow includes paid dividends of SEK 14.4 million.

Cash flow amounted to SEK 2.0 million over the third quarter, of which SEK 69.6 million was from operating activities.

The Group's equity ratio at the end of the period was 15 (29) %. This reduction is due largely to acquisitions which have taken place, increasing the balance sheet total while at the same time affecting profit due to acquisition costs.

Buy-back of own shares

At the Annual General Meeting held on 04 May 2011, the Board of Directors was authorised to acquire up to 10 % of the company's shares by the next Annual General Meeting. Up to and including 30 September 2011, no shares have been bought back under this authorisation.

Within the previous authorisation from the Annual General Meeting which took place on 18 May 2010, 154 300 shares, or 1.7 % of the total number of shares, have been acquired at an average price of SEK 91. Following the use of its own shares as partpayment in connection with the acquisitions of

Databasement in the Netherlands and B2net in the United Kingdom, the company holds 52 796 of its own shares as at 30 September.

Employees

The average number of annual employees over the first nine months amounted to 548 (321), and 619 (325) over the third quarter.

On 30 September, the company employed 629 (338) people.

The parent company in brief

The Parent Company's revenues for the first nine months of the year amounted to SEK 43.9 (27.3) million and to SEK 15.3 (9.8) million for the third quarter.

The profit before tax for the nine-month period amounted to SEK -2.6 (11.2) million, and to SEK 1.9 (7.8) million for the third quarter. The parent company's liabilities in a joint group currency account amounted to SEK 111.1 (52.3) million as at 30 September.

At the end of the period, the number of persons employed by the parent company totalled 9 (8). The Parent Company's operations have remained unchanged over the period. There have been no significant transactions with related parties.

OTHER INFORMATION

Acquisitions which have taken place have increased Proact's indebtedness and reduced its equity ratio. This has resulted in an increase in interest rate risk, currency exchange risk and liquidity risk.

No closely related transactions, other risks or uncertainty factors have altered over the period, by comparison with those commented upon in the last Annual Report issued.

This interim report has not been audited.

Forthcoming reports

15 Feb 2012	Year-end report 2010
7 May 2012	Interim report, Q1 2012 plus
	Annual General Meeting
13 July 2012	Half-yearly report 2012
23 Oct 2012	Interim report, Q3 2012
14 Feb 2013	Year-end report 2012

For further information, please contact:

Olof Sand, CEO Telephone: +46 (0) 8 410 666 82, e-mail: olof.sand@proact.se Mikael Suvero, IR Telephone: +46 (0) 8 410 666 55, e-mail: mikael.suvero@proact.se Jonas Persson, CFO Telephone: +46 (0) 8 410 666 90, e-mail: jonas.persson@proact.se

The information in this half-yearly report is such information as Proact IT Group (Publ) shall publish in accordance with lagen om värdepappersmarknad, the Securities Market Act, and/or lagen om handel med finansiella instrument, the Act on Trading in Financial Instruments. This information was submitted for publication at 15:00 (CET) on 20 October 2011.

Kista, 20 October 2011

Proact IT Group AB (publ)

Olof Sand CEO

FINANCIAL REPORTS (SEK m)

Consolidated statement of comprehensive income		3 mths Jul-Sep 2011	3 mths Jul-Sep 2010	9 mths Jan-Sep 2011	9 mths Jan-Sep 2010	12 mths Oct-Sep 2010/2011	12 mths Jan-Dec 2010
System income Service income Other revenue Net sales Cost of goods and services sold Gross profit	3	331.2 194.8 0.5 526.5 -399.5 127.0	126.8 107.1 0.6 234.5 -163.9 70.6	985.5 544.9 2.9 1 533.3 -1 173.7 359.6	570.1 339.4 1.6 911.1 -677.6 233.5	1 338.8 665.7 4.8 2 009.3 -1 537.5 471.8	923.4 460.2 3.5 1 387.1 -1 041.4 345.7
Sales and marketing expenses Administration expenses		-69.1 -39.4	-34.2 -21.9	-199.5 -123.5	-118.9 -73.1	-252.5 -152.1	-171.9 -101.7
Operating profit/loss, EBIT	4	18.5	14.5	36.6	41.5	67.2	72.1
Net financial items		-2.7	-0.4	-7.4	-1.9	-7.5	-2.0
Profit before tax		15.8	14.1	29.2	39.6	59.7	70.1
Income tax	5	-3.3	-2.8	-7.9	-9.8	-15.7	-17.6
Profit for the period	6	12.5	11.3	21.3	29.8	44.0	52.5
Other total comprehensive income Hedging of net investment in foreign opera tions		-0.4	-	-0.4	-	-0.4	-
Tax effect of hedging of net investment in foreign operations		0.1	-	0.1	-	0.1	-
Translation differences Total comprehensive income for the period		-2.3 9.9	-4.6 6.7	3.4 24.4	-11.5 18.3	2.1 45.8	-12.8 39.7
Comprehensive income for the period at tributable to: Parent company's shareholders Holdings without a controlling influence		10.8 1.7	10.8 0.5	16.6 4.7	28.8 1.0	38.2 5.8	50.4 2.1
Total comprehensive income for the period attributable to: Parent company's shareholders		8.3	6.3	19.7	17.6	40.0	37.9
Holdings without a controlling influence		1.6	0.4	4.7	0.7	5.8	1.8
Data per share		3 mths Jul-Sep 2011	3 mths Jul-Sep 2010	9 mths Jan-Sep 2011	9 mths Jan-Sep 2010	12 mths Oct-Sep 2010/2011	12 mths Jan-Dec 2010
Profit per share for the period pertaining to the Parent Com pany's shareholders, SEK		1.16	1.17	1.80	3.10	4.15	5.43
Equity per share, SEK		21.67	17.72	21.67	17.72	21.67	19.93
Cash flow from current opera tions per share, SEK		6.70	0.69	13.22	2.10	18.02	6.85
Number of shares at the end of the period excluding bought back shares, units		9 281 090	9 179 586	9 281 090	9 179 568	9 281 090	9.179 586
Weighted average number of shares excluding bought-back shares, units		9 229 557	9 234 119	9 196 243	9 312 634	9 192 079	9.279 372

Proact has not issued any share options or conversion rights which could give rise to dilution.

Key ratios and figures	3 mths Jul-Sep 2011	3 mths Jul-Sep 2010	9 mths Jan-Sep 2011	9 mths Jan-Sep 2010	12 mths Oct-Sep 2010/2011	12 mths Jan-Dec 2010
Revenues, SEK m	526	235	1 533	911	2 009	1 387
EBITDA, SEK m	35.4	20.2	83.9	57.3	121.5	94.9
EBITDA margin, %	6.7	8.6	5.5	6.3	6.0	6.8
EBITA, SEK m	23.4	15.6	50.5	45.0	82.4	76.9
EBITA margin, %	4.4	6.7	3.3	4.9	4.1	5.5
EBIT, SEK m	18.5	14.5	36.6	41.5	67.2	72.1
EBIT margin, %	3.5	6.2	2.4	4.6	3.3	5.2
Profit before tax, SEK millions	15.8	14.1	29.2	39.6	59.7	70.1
Net margin, %	3.0	6.0	1.9	4.3	3.0	5.1
Profit after tax, SEK m	12.5	11.3	21.3	29.8	44.0	52.5
Profit margin, %	2.4	4.8	1.4	3.3	2.2	3.8
Equity ratio, %	15.2	28.8	15.2	28.8	15.2	21.4
Capital turnover rate, times	0.4	0.4	1.4	1.4	2.1	1.7
Return on equity, %	6.2	6.7	10.7	17.2	23.4	28.6
Return on capital employed, %	4.4	8.5	12.0	23.6	22.7	38.8
Investments in property, plant and equipment, SEK millions	17.9	8.9	59.6	23.4	76.0	39.8
Profit before tax per employee, SEK thousands	25	43	53	123	120	216
Average number of employees on annual basis	619	325	548	321	496	325

For a five-year review, see Note 9. Definitions of key ratios and figures are set out in the Annual Report for 2010 and Note 10.

Consolidated Balance Sheet	Note	2011 30 Sep	2011 30 Jun	2011 31 Mar	2010 31 Dec	2010 30 Sep
ASSETS
Fixed assets Goodwill		253.9	252.1	143.0	75.1	73.8
Other intangible non-current assets	4	166.9	185.8	102.7	16.2	17.4
Tangible fixed assets	4	129.1	127.0	87.8	45.8	37.0
Other long-term receivables		24.8	18.9	15.4	10.7	7.4
Deferred tax receivables	5	28.0	30.9	30.0	28.0	32.5
Current assets
Inventories		38.5	41.2	18.0	9.8	16.0
Trade and other receivables		682.2	723.6	556.3	612.4	341.6
Cash and cash equivalents		60.4	57.3	46.1	73.0	47.8
Total assets		1 383.8	1 436.8	999.3	871.0	573.5
EQUITY AND LIABILITIES
Equity pertaining to the Parent Company's sharehold ers		201.2	179.9	183.1	183.0	162.6
Equity pertaining to holdings without a controlling influence		9.3	9.0	4.0	3.5	2.5
Equity, total		210.5	188.9	187.1	186.5	165.1
Long-term liabilities
Provision		1.1	0.8	0.7	0.7	-
Long term, interest-bearing liabilities		192.3	202.2	84.6	3.9	4.4
Long term, non-interest bearing liabilities		42.1	41.8	46.9	1.6	1.8
Deferred tax liabilities	5	45.5	51.5	26.7	4.9	5.2
Current liabilities
Short term, interest bearing liabilities		31.6	29.1	3.4	-	-
Short term, non-interest bearing liabilities		860.7	922.5	649.9	673.4	397.0
Total equity and liabilities		1 383.8	1 436.8	999.3	871.0	573.5

Consolidated cash flow statement (summary)	3 mths Jul-Sep 2011	3 mths Jul-Sep 2010	9 mths Jan-Sep 2011	9 mths Jan-Sep 2010	12 mths Oct-Sep 2010/2011	12 mths Jan-Dec 2010
Profit for the period	12.5	11.3	21.3	29.8	44.0	52.5
Adjustment for items not included in cash flow: Depreciations and write-downs, fixed assets	16.9	5.6	47.4	15.6	54.6	22.8
Other adjustments	6.8	6.2	-6.4	15.1	1.3	22.8
Cash flow before changes in working capital	36.2	23.1	62.3	60.5	99.9	98.1
Change in working capital	33.4	-16.7	54.7	-41.0	61.2	-34.5
Cash flow from current operations	69.6	6.4	117.0	19.5	161.1	63.6
Acquisition of businesses	-35.8	-	-198.4	-0.4	-198.9	-0.9
Capital expenditure on tangible fixed assets	-17.9	-8.9	-59.6	-23.4	-76.0	-39.8
Other cash flow from investment activities	0.0	0.0	0.0	0.1	-0.4	-0.3
Cash flow from investment activities	-53.7	-8.9	-258.0	-23.7	-275.3	-41.0
Dividends	-	-	-13.8	-12.6	-13.8	-12.6
Dividends to holdings without a controlling influence	-0.2	-	-0.8	-2.1	-0.8	-2.1
Buy-back of own shares	-	-14.0	-	-19.2	-	-19.2
Change in bank overdraft facilities	-16.1	-	-9.2	-	-9.2	-
Contract borrowing	7.2	-	19.5	-	19.5	-
Loans taken/repaid	-4.8	-0.5	130.0	-1.5	129.4	-2.1
Cash flow from financing activities	-13.9	-14.5	125.7	-35.4	125.1	-36.0
Change in cash and equivalents	2.0	-17.0	-15.3	-39.6	10.9	-13.4
Cash and equivalents at beginning of the period	57.3	69.0	73.0	97.4	47.8	97.4
Exchange rate differences in cash and cash equiva lents	1.1	-4.2	2.7	-10.0	1.7	-11.0
Cash and equivalents at end of the period	60.4	47.8	60.4	47.8	60.4	73.0

Consolidated Statement of Changes in Equity

	Attributable to the parent company's shareholders				Attributable to holdings without a controlling influence	Total share holders' equity
	Share capital	Other capital contribu tions	Translation of foreign subsidiaries	Hedging reserve	Loss brought forward incl. year's total result	Total
1 January 2011	10.6	297.9	-5.7	-	-119.9	183.0	3.5	186.5
Total comprehensive income for the period			3.4	-0.3	16.6	19.7	4.7	24.4
Holdings without a controlling influence on acquisition							1.9	1.9
Financial liability to holdings without a controlling influence					-0.8	-0.8		-0.8
Profit attributable to holdings without a controlling influence					1.1	1.1	-1.1	-
Translation of profit attributa ble to holdings without a controlling influence					-1.1	-1.1	1.1	-
Utilisation of shares from own keeping					13.1	13.1		13.1
Dividends					-13.8	-13.8		-13.8
Dividends to holdings without a controlling influence							-0.8	-0.8
30 September 2011	10.6	297.9	-2.3	-0.3	-104.8	201.2	9.3	210.5

Holdings without a controlling influence: Proact Latvia Ltd, Latvia 15 %, Proact Lietuva UAB, Lithuania 26.14 %, Proact Netherlands B.V. 49 %, Proact Estonia AS 30 % and Proact IT UK Ltd 25 %.

	Attributable to the parent company's shareholders					Attributable to holdings without a controlling influence	Total share holders' equity
	Share capital	Other capital contribu tions	Translation of foreign subsidiaries	Hedging reserve	Loss brought forward incl. year's total result	Total
1 January 2010	10.6	297.9	6.8	-	-138.5	176.8	3.8	180.6
Total comprehensive income for the period			-11.2	-	28.8	17.6	0.7	18.3
Reduction of share capital	-0.4				0.4	-		-
Bonus issue	0.4				-0.4	-		-
Dividends					-12.6	-12.6		-12.6
Dividends to holdings without a controlling influence							-2.1	-2.1
Buy-back of own shares *					-19.2	-19.2		-19.2
30 September 2010	10.6	297.9	-4.4	-	-141.5	162.6	2.5	165.1

Holdings without a controlling influence: Proact Latvia Ltd, Latvia 15 %, Proact Lietuva UAB, Lithuania 26.14 %, and Proact Netherlands B.V. 49 %, and Proact Estonia AS 30%. * including buy-back costs of SEK 29 thousand

Income statement for Parent Company	3 mths Jul-Sep 2011	3 mths Jul-Sep 2010	9 mths Jan-Sep 2011	9 mths Jan sep2010	12 mths Oct-Sep 2010/2011	12 mths Jan-Dec 2010
Net sales	15.3	9.8	43.9	27.3	54.8	38.2
Cost of goods and services sold	-	-	-	-	-	-
Gross profit	15.3	9.8	43.9	27.3	54.8	38.2
Administration expenses	-12.2	-8.2	-44.5	-27.5	-52.3	-35.3
Operating profit	3.1	1.6	-0.6	-0.2	2.5	2.9
Net financial items	-1.2	6.2	-2.0	11.4	9.2	22.6
Profit before tax	1.9	7.8	-2.6	11.2	11.7	25.5
Income tax	-0.2	-0.3	1.4	0.4	0.6	-0.4
Profit for the period	1.7	7.5	-1.2	11.6	12.3	25.1

Balance sheet for Parent Com pany	2011 30 Sep	2011 30 Jun	2011 31 Mar	2010 31 Dec	2010 30 Sep
ASSETS
Fixed assets
Shares in Group companies	302.6	301.0	292.4	151.6	150.7
Current receivables from Group companies	147.0	123.7	-	-	-
Deferred tax receivables	9.5	9.7	9.4	8.0	8.8
Current receivables	4.6	4.6	4.8	4.8	4.9
Current assets
Trade and other receivables	38.0	46.4	43.0	30.5	22.0
Total assets	501.7	485.4	349.6	194.9	186.4
EQUITY AND LIABILITIES
Restricted equity	38.9	38.9	38.9	38.9	38.9
Non-restricted equity	70.6	55.7	68.6	72.4	58.9
Equity, total	109.5	94.6	107.5	111.3	97.8
Long-term liabilities
Bank overdraft facilities	-	-	28.1	-	-
Current liabilities to Group companies	7.9	7.9	7.9	7.9	7.9
Long term, interest-bearing liabilities	164.0	162.4	-	-	-
Long term, non-interest bearing liabilities	31.9	31.6	37.4	-	-
Current liabilities
Group currency account	111.1	80.0	71.2	43.7	52.3
Current non-interest-bearing liabilities	77.3	108.9	97.5	32.0	28.4
Total equity and liabilities	501.7	485.4	349.6	194.9	186.4

EXPLANATORY INFORMATION

Note 1. General information

Proact IT Group AB (publ) (co. reg. no. 556494-3446) has its registered office in the municipality of Stockholm. Since July 1999, the Company has been listed on Nasdaq OMX Stockholm and the Small Cap list under the PACT symbol.

Note 2. Accounting policies

The consolidated accounts for the interim report, like the annual report for 2010, have been compiled in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU, and the Swedish Annual Accounts Act. The Parent Company's accounts have been compiled in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 (Accounting for Legal Entities).

The present interim report has been prepared in accordance with IAS 34, Interim reporting, and the Swedish Company Accounts Act. The term "IFRS" in this document includes the application of IAS and IFRS, as well as the interpretations of these standards as published by the IASB's Standards Interpretation Committee (SIC) and Internal Reporting Interpretations Committee (IFRIC).

When the extent of depreciations and writedowns (see Note 4) has increased as a consequence of a large number of acquisitions, a review has taken place in respect of the function to which depreciations and writedowns have been attributed. As a consequence of the review, a greater proportion of the total depreciations and writedowns have been attributed to the function "cost of goods and services sold" and a lower proportion to the function "administration expenses". The comparative data has been recalculated. Furthermore, the company has altered its segment division at the start of the year (see note 6). The Group otherwise applies the same accounting principles as those described in the annual report for 2010.

Note 3. Turnover by business ar ea	3 mths Jul-Sep 2011	3 mths Jul-Sep 2010	9 mths Jan-Sep 2011	9 mths Jan-Sep 2010	12 mths Oct-Sep 2010/2011	12 mths Jan-Dec 2010
Retail and wholesale trade and services	134	66	395	168	393	166
Public sector	100	42	292	211	365	284
Telecoms	54	49	206	185	341	320
Oil, energy	72	34	163	144	308	289
Manufacturing industry	62	21	191	105	264	178
Banking, finance	61	14	175	55	193	73
Media	21	5	46	23	78	55
Other	22	4	65	20	67	22
Total	526	235	1 533	911	2 009	1 387

Note 4. Depreciation and write down of fixed assets	3 mths Jul-Sep 2011	3 mths Jul-Sep 2010	9 mths Jan-Sep 2011	9 mths Jan-Sep 2010	12 mths Oct-Sep 2010/2011	12 mths Jan-Dec 2010
Depreciation of intangible fixed assets	-4.9	-1.1	-13.9	-3.5	-15.2	-4.8
Depreciation of tangible fixed assets	-11.8	-4.6	-33.5	-12.3	-39.2	-18.0
Total	-16.7	-5.7	-47.4	-15.8	-54.4	-22.8

Note 5. Income tax

The Group's tax expense includes total current tax and deferred tax calculated on the basis of applicable tax rates in the respective countries. The revised tax cost over the first nine months amounts to

SEK 7.9 (9.8) million. Taxes paid over the period amount to SEK 9.7 (5.3) million. The Group's total deductions for losses amount to SEK 91 million. It has been assessed that SEK 91 million of this can be made use of against future taxable profits and the tax effect has been recorded as a deferred tax claim.

Note 6. Operating segments

As of the first quarter of 2011, the Managing Director has decided that the company will be managed and reported by Business Unit (BU) instead of by country as was the case previously. This new division means a change in unit division, and so comparison information has been recalculated. The new business units are as follows:

North:	Finland, Norway and northern Sweden
Benelux and Spain:	The Netherlands, Belgium and Spain
West:	Denmark, southern Sverige and the United Kingdom
East:	Estonia, Latvia, Lithuania, Czech Republic and Slovakia
Proact Finance:	Proact's finance company under its own auspices is reported sepa rately as this company supports all geographical regions.

Jan-Sep 2011	North	West	Benelux /Spain	East	Proact Finance	Group wide & elim.	Group
Profit before tax	693.6 33.4	556.6 4.2	216.7 6.7	85.0 -4.3	21.4 -1.7	-40.0 -9.1	1 533.3 29.2
Tax Profit for the period							-7.9 21.3

Jan-Sep 2010	North	West	Benelux /Spain	East	Proact Finance	Group wide & elim.	Group
Profit before tax	612.4 35.4	224.3 6.9	63.0 1.3	43.1 2.2	6.0 -0.9	-37.7 -5.3	911.1 39.6
Tax Profit for the period							-9.8 29.8

Note 7. Ten biggest shareholders

Stake in % according to Euroclear Sweden AB	30 Sep 2011	31 Dec 2010
Skandia Liv	11.5	10.4
IGC Industrial Growth Co. AB	10.1	10.1
Swedbank Robur Småbolagsfonder	8.7	8.7
Skagen Fonder	7.4	7.9
Thyra Hedge	5.9	5.3
Öresund Investment AB	5.3	5.3
SEB Fonder	4.6	4.6
Key	3.5	2.4
Grenspecialisten Förvaltning AB	1.5	1.4
Marit Fagervold	1.5	1.9
Other	40.0	42.0
Total	100.0	100.0

Following buy-backs, the company owns 52 796 of its own shares, equivalent to 0.6 % of the total number of outstanding shares

Note 8. Acquisitions

B2net Ltd.

Proact, together with an external party, has formed a company (Proact IT UK Ltd.) in which Proact has a 75 % holding. On 8 April, this company acquired 100 % of B2net Ltd. for a purchase price of GBP 16 million. The price amounts to 7 times the B2net EBITA and 0.3 times its revenues.

Proact has the opportunity to acquire the remaining 25 % over the next five years for a maximum of GBP 4 million. The company has been consolidated and incorporated into Proact as of the second quarter of 2011. B2net has around 165 employees in five locations in the United Kingdom, with revenues of around SEK 500 million.

The preliminary acquisition calculation in respect of B2net which Proact carried out includes intangible assets, customer relations, which will be depreciated over a ten-year period.

Goodwill is attributable to assessed and evaluated future sales and marketing opportunities, cost savings and other synergy effects. No part of the goodwill is expected to be tax-deductible.

Further information and a preliminary acquisition calculation are shown in the half-yearly report for January–July 2011, which can be found at the Proact website: www.proact.se

Storyflex

On 20 October 2010, Proact entered into an agreement to purchase 60 % – with an option of acquiring the remaining 40 % – of Storyflex Inc., a company operating in the Czech Republic and Slovakia. This option has been included in the balance sheet as a long-term financial liability.

Operations will be run under the name Proact Czech Republic Ltd. The company has 35 employees over four offices in Prague, Ostrava, Brno and Bratislava. The company's turnover over the last business year (April 2009–March 2010) amounted to more than SEK 100 million. The purchase price of approximately SEK 11.9 million was paid in cash on 31 January 2011.

The legal process was completed during the first quarter of 2011, at which time the acquired business was consolidated into Proact. Further information and a preliminary acquisition calculation are shown in the annual report for 2010, which can be found at the Proact website: www.proact.se

Databasement

On 10 January 2011, an agreement was entered into concerning the purchase of Dutch company Databasement B.V., operating in the Netherlands, Belgium and Spain. As a result of this agreement, Proact owns 100 % of the business relating to Managed Services, cloud services. Proact owns 82 %

of other business in the Netherlands and Belgium and 85 % of the business in Spain. Local management and employees are holders without a controlling influence.

Moreover, this acquisition means that Proact owns 40 % of a software product known as InControl, which was developed by the company itself. Databasement has a total of 52 employees and net sales of around SEK 180 million. The purchase price, amounting to a total of SEK 121.1 million, will be paid in cash at a total of SEK 90 million over three equal payments over the next twelve months and an estimated additional purchase price of SEK 31.1 million (current value) in three years' time.

This additional purchase price is based on estimated growth in net sales and comprehensive income over the next three years. The companies acquired were consolidated into Proact as of the first quarter of 2011. Further information and a preliminary acquisition calculation are shown in the annual report for 2010, which can be found at the Proact website: www.proact.se

Note 9. Five-year summary	Oct-Sep 2010/2011	Jan-Dec 2010	Jan-Dec 2009	Jan-Dec 2008	Jan-Dec 2007
Revenues, SEK m	2 009	1 387	1 253	1 044	865
EBITDA, SEK m	121.5	94.9	76.7	59.6	51.8
EBITDA margin, %	6.0	6.8	6.1	5.7	6.0
EBITA, SEK m	82.4	76.9	65.3	51.5	44.7
EBITA margin, %	4.1	5.5	5.2	4.9	5.2
EBIT, SEK m	67.2	72.1	60.0	46.8	40.3
EBIT margin, %	3.3	5.2	4.8	4.5	4.7
Profit before tax, SEK millions	59.7	70.1	60.1	50.1	40.7
Net margin, %	3.0	5.1	4.8	4.8	4.7
Profit after tax, SEK m	44.0	52.5	52.4	38.7	31.9
Profit margin, %	2.2	3.8	4.2	3.7	3.7
Equity ratio, %	15.2	21.4	24.1	24.8	30.6
Capital turnover rate, times	2.1	1.7	1.8	1.8	1.7
Return on equity, %	23.4	28.6	30.7	24.4	20.2
Return on capital employed, %	22.7	38.8	35.4	32.4	26.6
Investments in property, plant and equipment, SEK millions	76.0	39.8	22.5	11.5	9.2
Profit before tax per employee, SEK thousands	120	216	191	168	155
Average number of employees on annual basis	496	325	315	299	262
Earnings per share for the period, SEK *)	4.15	5.43	5.22	3.68	2.80

*) Proact has not issued any share options or conversion rights which could give rise to dilution. The number of shares is calculated excluding bought-back shares.

Note 10. Definitions

EBITDA EBITDA margin EBITA	Profit before depreciation (tangible and intangible assets), net financial items and tax EBITDA expressed as a percentage of revenues Profit after depreciation of tangible fixed assets but before depreciation of intangible assets, net financial items and tax
EBITA margin	EBITA expressed as a percentage of revenues
EBIT	Operating profit before net financial items and tax
EBIT margin	EBIT expressed as a percentage of revenues
Net margin %	Profit before tax expressed as a percentage of revenues
Profit margin	Profit after tax expressed as a percentage of revenues
Equity ratio	Equity including minority interests as a percentage of balance sheet total
Capital turnover rate	Revenues expressed as a percentage of the average balance sheet total
Return on equity	Profit for the period after tax, expressed as a percentage of average equity
Capital employed	Balance sheet total minus non-interest bearing liabilities inclusive of deferred tax liabilities
Return on capital em ployed	Profit after net financial items plus financial expenses, expressed as a percentage of the average capital employed
Profit/loss per employee	Profit/loss before tax divided by the average number of annual employees

Proact IT Group AB [publ] Box 1205 Tel.: +46 8 410 666 00 Co. reg. no.: 556494-3446 Isafjordsgatan 35 Fax: +46 8 410 668 80 Headquarters: Stockholm SE-164 28 KISTA E-mail: itgroup@proact.se www.proact.se