Proact IT Group — Interim / Quarterly Report 2011

Feb 15, 2012

Year-end report 2011

Continued strong growth

2011 in brief

• Net turnover increased by 61 % to SEK 2 232 (1 387) million.
• EBITDA increased by 28 % to SEK 121.5 (94.9) million.
• Profit before tax fell by 40 % to SEK 41.9 (70.1) million. Profit was affected by acquisition expenses amounting to SEK 12.7 million, planned depreciation amounting to SEK 18.9 million and interest expenses of SEK 12.0 million linked with acquired companies.
• Profit after tax fell by 44 % to SEK 29.4 (52.5) million
• Profit per share fell by 50 % to SEK 2.69 (5.43).
• Return on equity amounted to 14.7 (28.6) %.
• The Board of Directors proposes that the Annual General Meeting should elect to pay a dividend of SEK 1.00 (1.50) per share.

The fourth quarter in brief

• Net turnover increased by 47 % to SEK 699 (476) million
• EBITDA amounted to SEK 37.1 (37.6) million.
• Profit before tax fell by 58 % to SEK 12.8 (30.6) million. Profit was affected by planned depreciation amounting to SEK 4.4 million and interest expenses of SEK 4.0 million linked with acquired companies.
• Profit after tax fell by 64 % to SEK 8.2 (22.7) million.
• Profit per share fell by 62 % to SEK 0.89 (2.35).

About Proact

Proact specialises in storing, securing and archiving large volumes of mission-critical information. As an independent integrator, Proact provides consultancy services, operating services, support and systems in its primary field of storage and archiving.

The Proact Group has more than 640 employees and conducts business in Belgium, Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Norway, Slovakia, Spain, Sweden and the Czech Republic. Proact was founded in 1994. Proact IT Group AB (publ), its Parent Company, has been listed on the Nasdaq OMX Stockholm since 1999 under the symbol PACT.

For further information about Proact's activities please visit us at www.proact.eu.

Report by Olof Sand, Managing Director of Proact

Proact has identified a niche in the field of IT infrastructure, storage and archiving. Focusing on this niche, the company's ambition is to create a company operating on the most important markets in Europe. According to analysis company Gartner, the amount of information stored is expected to increase by more than 40 % in 2012, which means the underlying market growth will be around 5 %. Proact is already the biggest specialist in its niche in Europe. In the short term, the emphasis is on enhancing efficiency within the acquired businesses, and then Proact will be establishing its business on additional markets in Europe. The target is to achieve a margin before tax of 5 %, the level historically reported by Proact. In the long term, the target is to achieve a 7 % margin before tax.

Over the whole 12 months of 2011, revenues amounted to SEK 2 232 million, representing an increase of 61 % compared with 2010. Over the same period, EBITDA amounted to SEK 121.6 million, compared with SEK 94.9 million in 2010. Profit before tax amounted to SEK 41.9 million, which is equivalent to a net margin of 1.9 %. Profit was affected by acquisition expenses amounting to SEK 12.7 million, planned depreciation amounting to SEK 18.9 million and interest expenses of SEK 12.0 million linked with acquired companies.

During the first and second quarters of 2011, Proact acquired three companies. This led to establishment of the company on a further five markets. The acquisitions made in 2011 have, on average, lower profitability than Proact in general but have the same focus and position as Proact on their respective markets. Since these acquisitions took place, there has been emphasis on integrating these companies so as to bring them up as quickly as possible to the same level of efficiency as seen within Proact in general. Work on integrating the Netherlands, Belgium and Spain has gone better than expected. In our opinion, we need more time to integrate the acquired businesses in the Czech Republic and the United Kingdom, as well as our range of cloud services. Proact's steering and followup model has been implemented on all markets.

In our opinion, during the second six months of 2012 Proact will achieve the same level of efficiency and profitability margin as prior to the acquisitions and achieve a turnover rate of around SEK 3 billion within a year.

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 Group employed 640 people at the end of the year, 292 more than for the same period last year. Acquired units represent 261 of the increase.

MARKET REVIEW

According to analysis company Gartner, the amount of information stored by companies and authorities is expected to increase by more than 40 % in 2012. The limited resources of many IT organisations, combined with massive increase in information volumes, is creating pressure on CIOs and IT departments to come up with intelligent ways of reducing costs, reducing risks and adapting IT solutions so as to face up as effectively as possible to the challenges posed by new business conditions.

A survey carried out among CIOs by IDC in late 2011 showed that the above situation is affecting the prioritisation of IT investments for 2012. Almost half of the respondents to the survey reported that fields such as virtualisation and consolidation are being given top priority with regard to IT investments for 2012. Investments in cloud services came in second place.

As a storage integrator focusing on cloud services, Proact is in a good position to meet the demand on the market.

FINANCIAL OVERVIEW

Over the twelve months of 2011, revenues amounted to SEK 1 533 (1 387) million, representing an increase of 61 %; or 66 % adjusted for currency effects. Organic growth amounted to 8 %, or 13 % 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.

Proact Finance is undergoing positive development, and future contracted cash flows amount to SEK 92 (54) million, representing an increase of 70 % compared with the corresponding period in the previous year.

Revenues per Business Unit	Jan-Dec 2011	Jan-Dec 2010
North	992	935
West	817	338
Benelux and Spain	307	95
East	130	60
Proact Finance	32	12
Groupwide/elim.	-46	-53
Sales	2 232	1 387

Over the fourth quarter, revenues amounted to SEK 699 (476) million, representing an increase of 47 %; or 48 % adjusted for currency effects. Organic growth amounted to - 6 %, or -5 % adjusted for currency effects. This is due mainly to the fact that a number of major deals in Finland have been moved to 2012.

Revenues per Business Unit	Oct-Dec 2011	Oct-Dec 2010
North	299	323
West	260	113
Benelux and Spain	90	32
East	45	17
Proact Finance	11	6
Groupwide/elim.	-6	-15
Sales	699	476

Of the total turnover for the year, system sales amounted to SEK 1 455 (923) million, representing an increase of 58 %.

Turnover for services operations amounted to SEK 772 (460) million, representing an increase of 68 % compared with the previous year.

Turnover	Jan-Dec	Jan-Dec
per operating segment	2011	2010
System sales	1 455	923
Services operations	772	460
Other revenue	5	4
Sales	2 232	1 387

System sales over the fourth quarter amounted to SEK 469 (353) million, an increase of 33 %.

Turnover for services operations amounted to SEK 228 (121) million, representing an increase of 88 % compared with the previous year.

Turnover	Oct-Dec	Oct-Dec
per operating segment	2011	2010
System sales	469	353
Services operations	228	121
Other revenue	2	2
Sales	699	476

Major events in the fourth quarter

A number of major deals have been agreed with companies such as AP Pension, Region Nord and the Agency for Governmental IT Services in Denmark, OTT, Elisa Links, AEL and Nokia in Finland, Estonian Consumer Union in Estonia, SAN and UnB in Latvia, the Lithuanian Tax Agency in Lithuania, Acens in Spain, KPMG and Espria in the Netherlands, HEMIT, Voss Energy, Talisman Energy, Basis Consulting and Statoil in Norway, Goodmans in the United Kingdom, and Spotify, the Swedish Board of Agriculture, Alingsås Energi, Benders, KPMG and AMS in Sweden.

Important events in the fourth quarter

High-uptime storage from Proact to Lyse

Lyse is a national player in the field of energy and telecommunications, employing 900 people and with revenues exceeding NOK 5 billion. When the company's IT infrastructure was to undergo a major upgrade, there was a need to find new storage and archiving solutions as well. Proact won the contract, and the company supplied a new storage and archiving infrastructure to the Lyse group. These systems are based on Hitachi and are one of the first installations in Norway to seamlessly switch between redundant systems. This contract was worth around NOK 5 million.

Proact updated DNA's Data Centres

Proact won a contract in the fourth quarter to install new virtual disk systems. This is one of DNA's biggest investments for 2011 and will enhance its efficiency and performance in terms of storage and business-critical services. The solution is based on NetApp technology.

Proact and EMC reinforced their cooperation

Archiving and storage specialists Proact were named as an EMC Signature Solution Centre partner, which is the highest level in EMC's Velocity partner programme. Proact will become a direct purchaser of EMC products, which means a closer relationship with EMC and shorter lead times for clients. Proact and EMC have also extended their cooperation to include VNX, EMC's Unified Storage solutions. Proact is now also the only Services Support Partner in Sweden to be able to offer local support on products such as VNX, Networker and Data Domain.

Proact and VMware take their cooperation to the next level

Proact has been upgraded to VMware's highest partnership level, Premier Partner, and is only one of two companies in Sweden to achieve this accolade. This partnership level is proof that Proact is able to supply the most extensive solutions in the field of virtualised IT infrastructure. This partnership was also commended during VMworld, where Proact Finland was named EMEA Partner of the Year in End User Computing.

Sörmland County Council saving time and money with more efficient backup

With the help of archive and storage specialists Proact, Sörmland County Council has managed to implement 80 % savings thanks to new technologies such as "snapshot backup" and "deduplication". Sörmland County Council turned to Proact when effective ways were needed for handling the time-consuming backup process and improving disaster protection and uptime. The solution: backup using snapshot technology, a method which could be integrated and operate alongside the council's existing IT environment. Snapshot technology involves taking snapshots – instantaneous images – of files and systems which are then saved as virtual copies.

Proact in Norway awarded Symantec Data Protection Master Specialisation

Proact in Norway reported at the start of the fourth quarter that it had been awarded Symantec's Master Specialisation in the field of Data Protection. Symantec Master Specialisation honours qualified partners and encourages them to supply in-depth expertise and advanced consultancy services in a single solution field. Proact in Norway has previously been awarded Symantec Specialisations in Data Protection, Archiving & eDiscovery, High Availability and Storage Management.

Comprehensive income

Profit before tax amounted to SEK 41.9 (70.1) million for the 2011 accounting year. This profit includes non-recurring acquisition costs of SEK 12.7 million and depreciation of acquired intangible assets of SEK 15.7 million.

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

West is affected by the fact that the integration of B2Net is taking longer than anticipated. Measures implemented in Denmark in the summer have started to take effect over the second six months of the year.

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-Dec 2011	Jan-Dec 2010
North	47.0	50.0
Benelux and Spain	11.6	3.1
West	6.4	19.6
East	-2.8	3.6
Proact Finance	-1.6	-1.3
Groupwide/elim.	-18.7	-4.9
Profit before tax	41.9	70.1

During the fourth quarter, profit before tax amounted to SEK 12.8 (30.6) million. Comprehensive income includes depreciation of acquired intangible assets of SEK 4.4 million. Comprehensive income is adversely affected over the fourth quarter as well by the fact that the integration of acquired units in the United Kingdom and the Czech Republic has taken longer than anticipated.

Profit before tax per Business Unit	Oct-Dec 2011	Oct-Dec 2010
North	13.5	14.6
West	2.2	12.8
Benelux and Spain	5.0	1.8
East	1.4	1.4
Proact Finance	0.1	-0.1
Groupwide/elim.	-9.4	0.1
Profit before tax	12.8	30.6

Balance sheet and cash flow

Cash and equivalents amounted to SEK 70 million on 31 December 2011. Of total bank overdraft facilities of SEK 140 million, SEK 3 million has been utilised. Net liabilities amounted to SEK 138 million. Bank loans amount to SEK 184 million, of which SEK 159 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	31 Dec 2011	30 Sep 2011	31 Dec 2010	30 Sep 2010
Cash and cash equivalents	70	60	73	48
Interest-bearing loans	-184	-190	-4	-4
Bank overdraft facilities	-3	-14	-	-
Contract borrowing	-21	-20	-	-
Net cash/net liability	-138	-164	69	44
Unutilised bank overdraft facilities Total bank overdraft	137	126	45	40
facilities	140	140	45	40

Cash flow amounted to SEK -2.1 million over the year, of which SEK 164.2 million was from operating activities.

The acquisition of companies has had an adverse impact on cash flow of SEK 199.4 million, while at the same time various forms of finance have contributed SEK 120.0 million. Investments in tangible fixed assets amount to SEK 73.1 (39.8) million, attributable mainly to Proact Finance and operations. The cash flow includes paid dividends of SEK 14.6 million.

Cash flow amounted to SEK 13.2 million over the fourth quarter, of which SEK 47.2 million was from operating activities.

The Group's equity ratio at the end of the period was 14 (21) %. 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 4 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 31 December 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 31 December.

Employees

The average number of employees over the year amounted to 568 (325), and 627 (339) over the fourth quarter.

On 31 December, the company employed 640 (348) people.

The Parent Company in brief

The Parent Company's revenues for the year amounted to SEK 57 (38) million and to SEK 14 (11) million for the fourth quarter.

The profit before tax for the year amounted to SEK 28.4 (25.5) million, and to SEK 31.0 (14.3) million for the fourth quarter. This result is largely due to dividends from subsidiaries.

The Parent Company's liabilities in a joint group currency account amounted to SEK 115.7 (43.7) million as at 31 December.

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.

Events after the balance sheet date

No significant events have taken place after the balance sheet date.

Proposal for allocation of profit

The Board will propose a dividend of SEK 1.00 (1.50) per share to the Annual General Meeting for the 2011 business year.

Risks and uncertainty factors within the enterprise

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. The company is working actively on a hedging strategy in order to minimise these risks.

For a more detailed description of significant risks and uncertainty factors, please see Proact's annual report for 2010, page 15.

OTHER INFORMATION

This year-end report has not been audited.

Forthcoming reports

Interim report, Q1 2012 plus
Annual General Meeting
Half-yearly report 2012
Interim report, Q3 2012
Year-end report 2012

Annual General Meeting

The Annual General Meeting will take place at 6 pm on 7 May 2012 at Scandic Victoria Tower, Kista.

The work of the Nominations Committee prior to the Annual General Meeting has not yet been completed.

For further information, please see the company's website at www.proact.eu.

For further information, please contact:

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

The information in this 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 15 February 2012.

Kista, 15 February 2012

Proact IT Group AB (publ)

Olof Sand Managing Director

About Proact

Proact specialises in storing, securing and archiving large volumes of mission-critical information. As an independent integrator, Proact provides consultancy services, operating services, support and systems in its primary field of storage and archiving.

The Proact Group has more than 640 employees and conducts business in Belgium, Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Norway, Slovakia, Spain, Sweden and the Czech Republic. Proact was founded in 1994. Proact IT Group AB (publ), its Parent Company, has been listed on the Nasdaq OMX Stockholm since 1999 under the symbol PACT.

For further information about Proact's activities please visit us at www.proact.se.

FINANCIAL REPORTS (SEK millions)

Consolidated statement of comprehensive income	Note	3 mths Oct-Dec 2011	3 mths Oct-Dec 2010	12 mths Jan-Dec 2011	12 mths Jan-Dec 2010
System income		469.2	353.3	1 454.7	923.4
Service income		227.5	120.8	772.4	460.2
Other revenue		1.8	1.9	4.7	3.5
Net sales Cost of goods and services sold	3	698.5 -543.4	476.0 -363.8	2 231.8 -1 717.1	1 387.1 -1 041.4
Gross profit		155.1	112.2	514.7	345.7
Sales and marketing expenses		-96.8	-53.0	-296.3	-171.9
Administration expenses		-40.3	-28.6	-163.8	-101.7
Operating profit/loss, EBIT	4	18.0	30.6	54.6	72.1
Net financial items		-5.2	0.0	-12.7	-2.0
Profit before tax		12.8	30.6	41.9	70.1
Income tax	5	-4.6	-7.9	-12.5	-17.6
Profit for the period	6	8.2	22.7	29.4	52.5
Other comprehensive income
Hedging of net investment in foreign operations		-0.1	-	-0.4	-
Tax effect of hedging of net investment in foreign operations		0.0	-	0.1	-
Translation differences		-4.2	-1.3	-0.8	-12.8
Total comprehensive income for the period		3.9	21.4	28.3	39.7
Profit for the period attributable to:
Parent Company's shareholders		8.2	21.6	24.8	50.4
Holdings without a controlling influence		0.0	1.1	4.6	2.1
Total comprehensive income for the period attributable to:
Parent Company's shareholders		4.0	20.3	23.7	37.9
Holdings without a controlling influence		-0.1	1.1	4.6	1.8

Data per share1)	3 mths Oct-Dec 2011	3 mths Oct-Dec 2010	12 mths Jan-Dec 2011	12 mths Jan-Dec 2010
Profit per share for the period pertaining to the Parent Company's shareholders, SEK	0.89	2.35	2.69	5.43
Equity per share, SEK	22.1	19.93	22.27	19.93
Cash flow from current operations per share, SEK	5.08	4.80	17.81	6.85
Number of shares at the end of the period excluding bought back shares, units	9 281 090	9.179.586	9 217 455	9.179.586
Weighted average number of shares excluding bought-back shares, units	9 281 090	9.179.586	9 217 455	9.279.372

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

Key ratios and figures	3 mths Oct-Dec 2011	3 mths Oct-Dec 2010	12 mths Jan-Dec 2011	12 mths Jan-Dec 2010
Revenues, SEK millions	699	476	2 232	1 387
EBITDA, SEK millions	37.5	37.6	121.5	94.9
EBITDA margin, %	5.4	7.9	5.4	6.8
EBITA, SEK millions	24.1	31.9	74.6	76.9
EBITA margin, %	3.4	6.7	3.3	5.5
EBIT, SEK millions	18.0	30.7	54.6	72.1
EBIT margin, %	2.6	6.4	2.4	5.2
Profit before tax, SEK millions	12.8	30.6	41.9	70.1
Net margin, %	1.8	6.4	1.9	5.1
Profit after tax, SEK millions	8.2	22.7	29.4	52.5
Profit margin, %	1.2	4.8	1.3	3.8
Equity ratio, %	14.3	21.4	14.3	21.4
Capital turnover rate, times	0.5	0.7	1.9	1.7
Return on equity, %	3.9	12.9	14.7	28.6
Return on capital employed, %	4.5	17.3	18.4	38.8
Investments in property, plant and equipment, SEK millions	13.5	16.5	73.1	39.8
Profit before tax per employee, SEK thousands	20	90	74	216
Average number of employees on annual basis	627	339	568	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	2011	2011	2011	2010
		31 Dec	30 Sep	30 Jun	31 Mar	31 Dec
ASSETS
Fixed assets
Goodwill		256.7	253.9	252.1	143.0	75.1
Other intangible non-current assets	4	161.2	166.9	185.8	102.7	16.2
Tangible fixed assets	4	119.3	129.1	127.0	87.8	45.8
Other long-term receivables		39.3	24.8	18.9	15.4	10.7
Deferred tax receivables	5	28.7	28.0	30.9	30.0	28.0
Current assets
Inventories		36.9	38.5	41.2	18.0	9.8
Trade and other receivables		793.4	682.2	723.6	556.3	612.4
Cash and cash equivalents		70.4	60.4	57.3	46.1	73.0
Total assets		1 505.9	1 383.8	1 436.8	999.3	871.0
EQUITY AND LIABILITIES
Equity pertaining to the Parent Company's shareholders		205.2	201.2	179.9	183.1	183.0
Equity pertaining to holdings without a controlling influence		9.6	9.3	9.0	4.0	3.5
Equity, total		214.8	210.5	188.9	187.1	186.5
Long-term liabilities
Provision		1.2	1.1	0.8	0.7	0.7
Long term, interest-bearing liabilities		171.2	192.3	202.2	84.6	3.9
Long term, non-interest bearing liabilities		31.9	42.1	41.8	46.9	1.6
Deferred tax liabilities	5	43.2	45.5	51.5	26.7	4.9
Current liabilities
Short term, interest bearing liabilities		38.3	31.6	29.1	3.4	-
Short term, non-interest bearing liabilities		1 005.3	860.7	922.5	649.9	673.4
Total equity and liabilities		1 505.9	1 383.8	1 436.8	999.3	871.0

Consolidated cash flow statement (summary)	3 mths Oct-Dec 2011	3 mths Oct-Dec 2010	12 mths Jan-Dec 2011	12 mths Jan-Dec 2010
Profit for the period	8.2	22.7	29.4	52.5
Adjustment for items not included in cash flow:
Depreciations and write-downs, fixed assets	19.5	6.9	67.0	22.8
Other adjustments	7.9	8.0	1.5	22.8
Cash flow before changes in working capital	35.6	37.6	97.9	98.1
Change in working capital	11.6	6.5	66.3	-34.5
Cash flow from current operations	47.2	44.1	164.2	63.6
Acquisition of businesses	-1.0	-0.9	-199.4	-0.9
Capital expenditure on tangible fixed assets	-13.5	-16.5	-73.1	-39.8
Other cash flow from investment activities	0.8	0.0	0.8	-0.3
Cash flow from investment activities	-13.7	-17.4	-271.7	-41.0
Dividends	-	-	-13.8	-12.6
Dividends to holdings without a controlling influence	-	-	-0.8	-2.1
Buy-back of own shares	-	-	-	-19.2
Change in bank overdraft facilities	-10.9	-	-20.1	-
Contract borrowing	-3.1	-	16.4	-
Loans taken/repaid	-6.3	-0.5	123.7	-2.1
Cash flow from financing activities	-20.3	-0.5	105.4	-36.0
Change in cash and equivalents	13.2	26.2	-2.1	-13.4
Cash and equivalents at beginning of the period	60.4	47.8	73.0	97.4
Exchange rate differences in cash and cash equivalents	-3.2	-1.0	-0.5	-11.0
Cash and equivalents at end of the period	70.4	73.0	70.4	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			-0.8	-0.3	24.8	23.7	4.6	28.3
Holdings without a controlling influence on acquisition							2.2	2.2
Financial liability to holdings without a controlling influence					-0.7	-0.7		-0.7
Profit attributable to holdings without a controlling influence					1.3	1.3	-1.3	-
Translation of profit attributable to holdings without a controlling influence					-1.3	-1.3	1.3	-
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
December 31, 2011	10.6	297.9	-6.5	-0.3	-96.5	205.3	9.5	214.8

Holdings without a controlling influence: Proact Latvia Ltd, Latvia 15 %, Proact Lietuva UAB, Lithuania 26.14 %, Proact Netherlands B.V. 18 %, 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			-12.5	-	50.4	37.9	1.8	39.7
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
December 31, 2010	10.6	297.9	-5.7	-	-119.9	183.0	3.5	186.5

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 Oct-Dec 2011	3 mths Oct-Dec 2010	12 mths Jan-Dec 2011	12 mths Jan-Dec 2010
Net sales	13.5	10.9	57.3	38.2
Cost of goods and services sold	-	-	-	-
Gross profit	13.5	10.9	57.3	38.2
Administration expenses	-14.1	-7.8	-58.5	-35.3
Operating profit	-0.6	3.1	-1.2	2.9
Net financial items	31.6	11.2	29.6	22.6
Profit before tax	31.0	14.3	28.4	25.5
Income tax	1.1	-0.8	2.5	-0.4
Profit for the period	32.1	13.5	30.9	25.1

Balance sheet for Parent Company	2011	2011	2010
	31 Dec	30 Sep	31 Dec
ASSETS
Fixed assets
Shares in Group companies	296.2	302.6	151.6
Current receivables from Group companies Deferred tax receivables	152.9 10.5	147.0 9.5	- 8.0
Current receivables	4.6	4.6	4.8
Current assets
Trade and other receivables	50.3	38.0	30.5
Total assets	514.5	501.7	194.9
EQUITY AND LIABILITIES
Restricted equity	38.9	38.9	38.9
Non-restricted equity	102.6	70.6	72.4
Equity, total	141.5	109.5	111.3
Long-term liabilities
Current liabilities to Group companies	18.5	7.9	7.9
Long-term, interest-bearing liabilities	136.1	164.0	-
Long-term, non-interest bearing liabilities	23.7	31.9	-
Current liabilities
Group currency account	115.7	111.1	43.7
Current interest bearing liabilities	23.2	-	-
Current non-interest-bearing liabilities	55.8	77.3	32.0
Total equity and liabilities	514.5	501.7	194.9

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 2011 accounting year, 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 year-end 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 write-downs (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 write-downs have been attributed. As a consequence of the review, a greater proportion of the total depreciations and write-downs 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 area		3 mths	12 mths	12 mths
	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
	2011	2010	2011	2010
Retail and wholesale trade and services	210	120	604	289
Public sector	154	110	446	320
Manufacturing industry	90	61	281	166
Telecoms	68	99	274	284
Banking, finance	71	18	246	72
Oil, energy	64	34	227	178
Media	18	32	64	55
Other	24	2	90	23
Total	699	476	2 232	1 387

Note 4. Depreciation and write-down of fixed assets	3 mths Oct-Dec 2011	3 mths Oct-Dec 2010	12 mths Jan-Dec 2011	12 mths Jan-Dec 2010
Depreciation of tangible fixed assets	-13.4	-5.7	-47.0	-18.0
Depreciation of intangible fixed assets	-6.1	-1.2	-20.0	-4.8
Total	-19.5	-6.9	-67.0	-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 financial year amounts to SEK -12.5 (-17.6) million. Taxes paid over the period amount to SEK 10.8 (6.7) million.

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:	Netherlands, Belgium and Spain
West:	Denmark, southern Sweden and the United Kingdom
East:	Estonia, Latvia, Lithuania, Czech Republic and Slovakia
Proact Finance:	Proact's finance company under its own auspices is reported separately as this company supports all geographical regions.

Jan-Dec 2011	North	West	Benelux /Spain	East	Proact Finance	Group wide & elim.	Group
Total income Profit before tax	992 47.0	817 6.4	307 11.6	130 -2.8	32 -1.6	-46 -18.7	2 232 41.9
Tax Profit for the period							-12.5 29.4

Jan-Dec 2010	North	West	Benelux /Spain	East	Proact Finance	Group wide & elim.	Group
Total income Profit before tax	935 50.0	338 19.6	95 3.1	60 3.6	12 -1.3	-53 -4.9	1 387 70.1
Tax Profit for the period							-17.6 52.5

Note 7. Ten biggest shareholders

Stake in % according to Euroclear Sweden AB	31 Dec 2011	31 Dec 2010
Skandia Liv	12.4	10.4
IGC Industrial Growth Co. AB	9.3	10.1
Swedbank Robur Småbolagsfonder	8.6	8.7
Skagen Fonder	7.2	7.9
Öresund Investment AB	5.3	5.3
Thyra Hedge	5.2	5.3
SEB Fonder	4.6	4.6
Handelsbanken Fonder	3.3	2.0
Tangent	2.6	2.2
Olof Sand	1.7	1.0
Other	39.8	42.5
Total	100.0	100.0

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 1 April 2011. At the time of acquisition, B2net had around 165 employees in five locations in the United Kingdom, with revenues of around SEK 500 million.

The preliminary acquisition calculation carried out includes intangible assets, customer relations and trademarks, which will be depreciated over a five to 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.

The actual values of identified assets and liabilities at the time of acquisition are shown in the table below:

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. At the time of acquisition, Databasement employed around 50 people and had revenues of around SEK 180 million. The purchase price of a total of SEK 113.2 million includes an estimated additional purchase price of SEK 23.7 million.

The preliminary acquisition calculation carried out includes intangible assets, customer relations and trademarks, which will be depreciated over a five to 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.

The actual values of identified assets and liabilities at the time of acquisition are shown in the table below:

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. At the time of acquisition, the company had 35 employees over four offices in Prague, Ostrava, Brno and Bratislava. The company's revenues 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.

The preliminary acquisition calculation carried out includes intangible assets, customer relations and trademarks, which will be depreciated over a five to 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.

The actual values of identified assets and liabilities at the time of acquisition are shown in the table below:

	Fair value	Fair value	Fair value
SEK millions	on acquisition B2net Ltd.	on acquisition Databasement B.V.	on acquisition Storyflex Inc.
Assets
Customer relations	72.9	62.9	14.4
Trademarks	8.1	4.4	0.4
Fixed assets	22.3	47.8	0.2
Current receivables	199.8	92.5	27.9
Cash and cash equivalents	1.2	1.1	1.8
	304.3	208.7	44.7
Liabilities
Current liabilities	236.1	112.7	31.4
Long-term liabilities	2.3	15.2	-
Deferred tax liability	20.5	17.1	3.0
	258.9	145.0	34.4
Acquired identified net assets	45.4	63.7	10.3
Goodwill	117.9	49.5	9.5
Holdings without a controlling influence	-	-	-7.9
Total purchase price	163.3	113.2	11.9
Analysis of purchase price
Cash payment	146.3	59.7	11.9
Liability	17.0	29.8	-
Additional purchase price	-	23.7	-
Total purchase price	163.3	113.2	11.9

Note 9. Five-year summary

	Jan-Dec 2011	Jan-Dec 2010	Jan-Dec 2009	Jan-Dec 2008	Jan-Dec 2007
Revenues, SEK millions	2 232	1 387	1 253	1 044	865
EBITDA, SEK millions	121.5	94.9	76.7	59.6	51.8
EBITDA margin, %	5.4	6.8	6.1	5.7	6.0
EBITA, SEK millions	74.6	76.9	65.3	51.5	44.7
EBITA margin, %	3.3	5.5	5.2	4.9	5.2
EBIT, SEK millions	54.6	72.1	60.0	46.8	40.3
EBIT margin, %	2.4	5.2	4.8	4.5	4.7
Profit before tax, SEK millions	41.9	70.1	60.1	50.1	40.7
Net margin, %	1.9	5.1	4.8	4.8	4.7
Profit after tax, SEK millions	29.4	52.5	52.4	38.7	31.9
Profit margin, %	1.3	3.8	4.2	3.7	3.7
Equity ratio, %	14.3	21.4	24.1	24.8	30.6
Capital turnover rate, times	1.9	1.7	1.8	1.8	1.7
Return on equity, %	14.7	28.6	30.7	24.4	20.2
Return on capital employed, %	18.4	38.8	35.4	32.4	26.6
Investments in property, plant and equipment, SEK millions	73.1	39.8	22.5	11.5	9.2
Profit before tax per employee, SEK thousands	74	216	191	168	155
Average number of employees on annual basis	568	325	315	299	262
Earnings per share for the period, SEK *)	2.69	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 Profit before depreciation (tangible and intangible assets), net financial items and tax EBITDA margin EBITDA expressed as a percentage of revenues EBITA 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 Operating income 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 employed Profit after net financial items plus financial expenses, expressed as a percentage of the average capital employed Profit 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 Kistagången 2 Fax: +46 8 410 668 80 Headquarters: Stockholm

SE-164 28 KISTA E-mail: itgroup@proact.se www.proact.se