Proact IT Group — Interim / Quarterly Report 2013

Jul 12, 2013

HALF-YEARLY REPORT January - June 2013

Non-recurring costs reduce profit

The first six months in brief

• Income fell by 9% to SEK 1,123 (1,234) million, with 4% adjustment for currency effects and divestment of business.
• EBITDA fell by 22% to SEK 53.6 (68.4) million.
• Profit before tax fell by 73% to SEK 7.5 (27.9) million.
• Profit after tax fell by 70% to SEK 6.0 (20.2) million
• Profit per share fell by 87% to SEK 0.23 (1.73).
• Return on equity over the last 12 months amounted to 12.2 (20.5)%.
• Non-recurring items attributable to reduction of the overall cost structure within the company have adversely affected operating profit in the sum of SEK 18.8 million. Intangible assets relating to the business the Czech Republic have also been written down by SEK 5.2 million. The divestment of business has had a positive impact of SEK 9.2 million on operating profit.

The second quarter in brief

• Income fell by 7% to SEK 551 (590) million, with 1% adjustment for currency effects and divestment of business.
• EBITDA fell by 51% to SEK 16.5 (33.4) million.
• Profit before tax amounted to SEK -8.9 (11.9) million.
• Profit after tax amounted to SEK -8.1 (9.2) million.
• Earnings per share fell to SEK -0.97 (0.81).
• Non-recurring items attributable to reduction of the overall cost structure within the company have adversely affected operating profit in the sum of SEK 15.8 million. Intangible assets relating to the business the Czech Republic have also been written down by SEK 5.2 million.

About Proact

Proact is Europe's leading independent integrator in the fields of data storage and cloud solutions. Proact supplies business benefits by helping companies and authorities the world over to reduce risk and costs, and above all, to supply flexible, accessible and secure IT services.

Proact solutions cover all elements of data storage, including virtualisation, network functions and security, and the company has more than 3 500 successful projects behind it, along with vast information volumes which are managed at the Proact data centre.

The Proact Group has more than 640 employees and conducts business in Belgium, Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Norway, Slovakia, Spain, the United Kingdom, 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

Report by Martin Ödman, Managing Director of Proact

Proact has a unique position in the market, and I am very optimistic about the future. The company's clear objective is to improve its profitability. Our strategy for achieving this will involve developing system business with associated services, continuing to increase the amount of contracted revenues such as support and cloud services, and increasing synergies between the businesses in the various countries.

During the second quarter, the company's total net sales remained more or less unchanged compared with the same quarter last year, taking into account currency effects and the divestment of subsidiary Exquip in the United Kingdom. Profit before tax, excluding non-recurring items, amounted to SEK 12.1 million over the quarter, representing an increase of 2% compared with the same period last year. Net sales and the profit before tax for the quarter are not acceptable.

As communicated previously, non-recurring items amounting to SEK 15.8 million and attributable to the cost savings programme implemented over the quarter have had a negative impact on profit for the quarter. Following up on actions implemented indicates that total cost savings of SEK 40 million will be achieved on an annual basis, with full effect as of the third quarter. Measures undertaken have also resulted in writedowns of intangible assets in the Czech Republic, amounting to SEK 5.2 million.

It is pleasing to see that our contracted income, such as support and cloud services, is continuing to develop well. New contracts relating to cloud services, valued at SEK 40 million, have been entered into during the period. System and consultancy income has developed in a less satisfactory manner over the quarter, due mainly to a market which is playing a waiting game.

Our objective during the second six months of the year will be to achieve a profit before tax of 5% of net sales by means of the measures implemented during the first six months of the year, along with our targeted efforts to improve profits.

MARKET REVIEW

Customers' decisions to invest, mainly involving major investments in new system solutions, have taken longer than anticipated over the last few quarters. This is thought to be due mainly to the prevailing uncertainty concerning economic development in Western Europe, which means that companies and the public sector are optimising investments already made. This is allowing them to continue to use existing systems for longer.

Stored information volumes are continuing to increase at the same pace as before, at a rate of about 50% per year, according to IDC. But as information volumes go on growing, so IT budgets are subject to a certain degree of constraint, thereby posing challenges for IT organisations. To be able to deal with this situation, companies and authorities are evaluating new technologies which will allow them to automate more effectively the handling of stored information volumes by migrating and archiving information on more cost-effective media, for example. Streamlining and optimising the utilisation of existing systems can help to free up resources for new IT projects while at the same time keeping IT costs within given frameworks.

The need for ongoing streamlining, as well as a growing demand for solutions in new fields of technology, is indicating potential for growth in Proact's specialist fields. Proact has established methods, processes and services to offer so as to meet demand on the market and provide the most effective support to its customers.

FINANCIAL OVERVIEW

Over the first six months of 2013, the company's net sales amounted to SEK 1,123 (1,234) million, representing a reduction of 9%, with 4% adjustment for currency effects and divestment of business.

System income is down 13% compared with the same period last year, mainly due to the fact that existing systems are being utilised for longer.

Future contracted cash flows from Proact Finance amount to SEK 93 (93) million. Contracts

equivalent to SEK 15 million were sold to an external party during the fourth quarter of 2012.

Over the second quarter, revenues amounted to SEK 551 (590) million, representing a decrease of 7%; or a decrease of 1% adjusted for currency effects and divestment of business.

Revenues per Business Unit	Jan-Jun 2013	Jan-Jun 2012	Apr-Jun 2013	Apr-Jun 2012
Nordics	619	704	323	361
UK	263	308	114	118
Benelux and Spain	175	173	89	84
East	62	66	27	34
Proact Finance	32	29	18	16
Groupwide	-28	-46	-20	-23
Revenues	1,123	1,234	551	590

In Nordics, all countries have faced challenges relating to the sale of new systems as a number of major strategic customers have delayed new investments. This has also had an adverse impact on income from consultancy.

Total service income in the UK, particularly contracted income, has developed well. System sales have been adversely affected for the same reason as outlined for Nordics.

Revenues for East, Benelux and Spain and for Proact Finance remain largely unchanged compared with the same period last year.

Revenues per	Jan-Jun	Jan-Jun	Apr-Jun	Apr-Jun
operating segment	2013	2012	2013	2012
System sales	743	851	364	391
Service operations	378	380	185	197
Other revenue	2	3	2	2
Revenues	1,123	1,234	551	590

Major deals in the second quarter:

A number of major deals have been concluded during the past quarter with companies such as AML and Latexco in Belgium, KPMG, Statistics Denmark and Brüel & Kjær Sound and Vibrations in Denmark, Andritz Group and Ramboll in Finland, Latvenergo and Latvian Mobile Telephone in Latvia, Vilnius University in Lithuania, SBM Offshore, Solcom and DTG in the Netherlands, Conoco Phillips, Statoil, HEMIT and Tullow in Norway, DWF and GB Group in the United Kingdom, Kungälv Energi, Stena Recycling, Volvo Aero, AFA and the Government Offices of Sweden in Sweden, and Garris, Chemosvit and Continental Group in the Czech Republic.

Important events in the second quarter

Proact supplies storage and backup infrastructure to SIBA

SIBA is a leading consumer electronics retailer in the Nordics. The company sells products within sound and vision, data and telephony and also domestic and personal care products. SIBA needed to consolidate its storage infrastructure, which was time-consuming and resource-intensive. Thanks to in-depth technical expertise and local support, Proact has been commissioned to supply the company with a new storage and backup infrastructure. This new infrastructure will give SIBA a consistent environment, which will help to reduce administration expenses, etc. SIBA will also have new functionality which will allow information to be stored in a secure, cost-effective way. This agreement also includes implementation of the new infrastructure and Proact Premium Support.

Tura Scandinavia selects Proact for futureproofing of its IT environment

Tura Scandinavia is a Nordic distributor of accessories in the fields of audio and images, photography and video, gaming, mobile and GPS. The company's operations have grown, and so a need for a new IT infrastructure has arisen so that the needs and requirements of the business can be addressed more effectively. The company was in need of an improved overview and control, as well as enhanced performance. Proact has been commissioned to supply a new, cost-effective IT environment. The new IT environment will give Tura Scandinavia greater efficiency, redundancy and reliability in case information should ever need to be restored. The new IT environment has allowed the company to streamline and futureproof the IT services it supplies to its users. This agreement also includes implementation of the new IT environment and Proact Premium Support.

A. Schulman chooses Proact virtualisation solution and cloud service

A. Schulman is a leading international supplier of high-quality plastics and resins which are used in a range of markets all over the world. The company needed to consolidate the servers used within the group so as to improve opportunities for integration between countries and reduce costs. Proact has been commissioned to implement a new infrastructure which will permit virtualisation of the server environment. The number of physical services is expected to be reduced by 80%. The virtualised server environment will allow business requirements to be met more cost-effectively. A. Schulman has also opted to invest in a cloud service in respect of backups, which means that Proact will be responsible for ensuring that business-critical information is backed up and can be restored if necessary.

Proact wins EMC Isilon partner of the year award

Proact has received the Best Isilon Partner of the Year award at EMC World in Las Vegas for the second year in a row. Proact has successfully implemented a number of projects based on EMC Isilon over the course of the year. Growth within this field technology amounted to 136% for the year, compared with the previous year. EMC Isilon is a scalable storage platform which permits efficient handling of large volumes of digital information and business-critical applications. Kanal 75 and Spotify are just two of the customers that have chosen this technology.

SBM Offshore chooses new storage and backup infrastructure from Proact

SBM Offshore designs, supplies, installs and manages day-to-day operation of floating production solutions for loading and unloading ships. The company needed to be able to meet more effectively the requirements of its users in respect of the accessibility and performance of business-critical applications and databases. Thanks to innovative design, in-depth technical knowledge and local support, Proact has been commissioned to supply the company with a new storage and backup infrastructure. With this new infrastructure, SBM Offshore will be able to supply IT services securely and costeffectively while also addressing the needs and requirements of its users. This agreement also includes implementation and Proact Premium Support.

Comprehensive income

The operating profit before depreciation, EBITDA, amounted to SEK 53.6 (68.4) million during the first six months of 2013, representing a decrease of 22% compared with the same period last year. Profit before tax amounted to SEK 7.5 (27.9) million, a decrease of 73%, for the first six months of the year.

Operating profit has been affected positively by SEK 9.2 million on account of the sale of the business in the United Kingdom. Non-recurring items attributable to reduction of the overall cost structure within the company have adversely affected operating profit in the sum of SEK 18.8 million. Intangible assets relating to the business the Czech Republic have also been written down by SEK 5.2 million.

Profit in the Nordics has been adversely affected by the lower system volumes and associated consultancy services.

Profit in the UK has been affected positively due to increased service income, primarily in respect of cloud services. However, the overall profit has been adversely affected due to lower system volumes.

For East, the Baltic countries are demonstrating a profit which is better than last year's, although the Czech Republic is generating a profit which is poorer than last year.

The Benelux countries and Spain, along with Proact Finance, are generating better profits than last year and are developing according to plan.

Profit before tax per BU	Jan Jun 2013	Jan-Jun 2012	Apr Jun 2013	Apr-Jun 2012
Nordics	16.1	26.3	12.5	10.4
UK	5.6	8.8	1.5	2.4
Benelux and Spain	2.1	-1.5	1.5	0.1
East	1.8	0.8	0.8	0.0
Proact Finance	0.4	-0.6	0.4	-0.7
Groupwide	-3.7	-5.9	-4.6	-0.3
Profit before tax and non-recurring items	22.3	27.9	12.1	11.9
Non-recurring items /divestment of business	-14.8	-	-21.0	-
Profit before tax	7.5	27.9	-8.9	11.9

Balance sheet and cash flow

Cash and equivalents amounted to SEK 44.3 million on 30 June 2013. Of total bank overdraft facilities of SEK 139.1 million, SEK 38.5 million has been utilised. Bank loans amount to SEK 140.8 million, SEK 35.6 million of which will fall due for repayment within 12 months. Contract borrowing is being used to finance Proact's finance company.

Financial position	30 Jun 2013	31 Mar 2013	30 Jun 2012	31 Mar 2012
Cash and cash equivalents	44	30	22	29
Bank overdraft facilities	-38	-38	-29	-8
Liabilities to credit institutions	-144	-140	-176	-177
Contract borrowing	-20	-21	-24	-25
Net cash/net liability	-158	-169	-207	-181
Unutilised bank
overdraft facilities	101	79	111	131
Total bank overdraft
facilities	139	117	140	139

Cash flow amounted to SEK 12 million over the second quarter, of which SEK 45 million was from operating activities.

Cash flow amounted to SEK -57 million over the first six months, of which SEK -38 million was from operating activities. Reduced factoring, particularly in respect of the public sector, has had an adverse impact of SEK 30 million on cash flow for the first six months of the year. Dividends amounted to SEK 11 million.

Investments in fixed assets amount to SEK 24 (32) million, attributable mainly to Proact Finance and operations.

The repayment of loans and increased use of overdraft facilities have had a total positive impact of SEK 19 million on cash flow.

The Group's equity ratio at the end of the period was 17 (15)%. The equity ratio was 18% as at 31 March 2013.

Buy-back of own shares

At the Annual General Meeting held on 07 May 2013, 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 June 2012, no shares have been bought back under this authorisation. The company holds 23 618 shares in its own custody as at 30 June 2013.

Employees

The average number of annual employees over the first six months amounted to 664 (645), and 648 (644) over the second quarter.

On 30 June, the company employed 648 (661) people.

The Parent Company in brief

The Parent Company's revenues for the first six months of the year amounted to SEK 26.8 (31.8) million and to SEK 14.0 (15.5) million for the second quarter. The profit before tax for the period amounted to SEK 3.3 (20.7) million, and to SEK 3.2 (23.1) million for the second quarter.

The parent company's liabilities in a joint group currency account amounted to SEK 235.9 (185.1) million as at 30 June.

At the end of the period, the number of persons employed by the Parent Company totalled 12 (12).

The Parent Company's operations have remained unchanged over the period.

Risks and uncertainty factors within the enterprise

No closely related transactions, risks or uncertainty factors have altered, by comparison with those commented upon in the last Annual Report issued. For a more detailed description of significant risks and uncertainty factors, please see Proact's annual report for 2012, page 16.

Other information

This half-yearly report has not been audited.

Annual General Meeting on 07 May 2013

The following Board members were re-elected: Anders Hultmark, Christer Holmén, Eva Elmstedt and Roger Bergqvist. Mikael Gottschlich was replaced by Christer Hellström. Anders Hultmark was appointed Chairman of the Board.

A decision was made to pay a dividend of SEK 1.10 (1.00) per share.

The Board members and Managing Director were granted discharge from liability for the 2012 business year

For further information on the general meeting and the minutes from this meeting, please see the company's website at www.proact.se

Forthcoming reports

22 Oct 2013	Interim report, Q3 2013
13 Feb 2014	Year-end report 2013

For further information, please contact:

Martin Ödman, MD		Telephone: +46 31 760 68 11 E-mail: martin.odman@proact.eu
Peter Javestad, IR	Telephone: +46 8 410 667 22	E-mail: peter.javestad@proact.eu
Jonas Persson, CFO	Telephone: +46 8 410 666 90	E-mail: jonas.persson@proact.eu

The Board of Directors and the Managing Director guarantee that this half-yearly report provides a true and fair view of the activities, position and profits of Proact and the Group. No new risks or uncertainty factors have arisen over the first six months of the year, by comparison with those commented upon in the last Annual Report issued.

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 12:00 (CET) on 12 July 2013.

Kista, 12 July 2013

Proact IT Group AB (publ)

Martin Ödman Anders Hultmark Christer Hellström Managing Director Chairman

Christer Holmén Eva Elmstedt Roger Bergqvist

About Proact

Proact is Europe's leading independent integrator in the fields of data storage and cloud solutions. Proact supplies business benefits by helping companies and authorities the world over to reduce risk and costs, and above all, to supply flexible, accessible and secure IT services.

Proact solutions cover all elements of data storage, including virtualisation, network functions and security, and the company has more than 3 500 successful projects behind it, along with vast information volumes which are managed at the Proact data centre.

The Proact Group has more than 640 employees and conducts business in Belgium, Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Norway, Slovakia, Spain, the United Kingdom, 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 Apr-Jun 2013	3 mths Apr-Jun 2012	6 mths Jan-Jun 2013	6 mths Jan-Jun 2012	12 mths Jul-Jun 2012/2013	12 mths Jan-Dec 2012
System income Service income		364.3 185.4	390.7 196.9	742.7 377.7	851.3 379.7	1,538.2 781.1	1,646.8 783.1
Other revenue		0.8	2.1	2.6	2.9	2.9	3.2
Total income	3	550.5	589.7	1,123.0	1,233.9	2,322.2	2,433.1
Cost of goods and services sold Gross profit		-415.1 135.4	-446.7 143.0	-853.2 269.8	-945.2 288.7	-1,759.0 563.2	-1,851.0 582.1
Sales and marketing expenses		-83.3	-91.3	-163.8	-180.6	-333.8	-350.6
Administration expenses		-37.5	-36.6	-78.9	-76.0	-163.7	-160.8
Non-recurring items/writedown Disposals of businesses		-21.0 -	- -	-24.0 9.2	- -	-24.0 9.2	- -
Operating profit/loss, EBIT	4	-6.4	15.1	12.3	32.1	50.9	70.7
Net financial items		-2.5	-3.2	-4.8	-4.2	-10.3	-9.7
Profit before tax		-8.9	11.9	7.5	27.9	40.6	61.0
Income tax	5	0.8	-2.7	-1.5	-7.7	-13.0	-19.2
Comprehensive income for the period	6	-8.1	9.2	6.0	20.2	27.6	41.8
Other comprehensive income
Hedging of net investment in foreign operations		-0.4	-0.3	0.2	-0.3	0.7	0.2
Tax effect of hedging of net investment in foreign operations		0.0	0.1	-0.1	0.1	-0.3	-0.1
Translation differences		8.0	-1.3	-0.8	-2.8	-4.4	-6.4
Total comprehensive income for the period		-0.5	7.7	5.3	17.2	23.6	35.5
Profit for the period attributable to:
Parent Company's shareholders Holdings without a controlling influence		-9.1 1.0	7.5 1.7	2.1 3.9	16.0 4.2	23.0 4.6	36.9 4.9
Total comprehensive income for the period attributable to:
Parent Company's shareholders Holdings without a controlling influence		0.8 -1.3	6.0 1.7	4.0 1.3	13.0 4.2	21.8 1.8	30.8 4.7

Data per share

	3 mths Apr-Jun 2013	3 mths Apr-Jun 2012	6 mths Jan-Jun 2013	6 mths Jan-Jun 2012	12 mths Jul-Jun 2012/2013	12 mths Jan-Dec 2012
Profit per share for the period pertaining to the Parent Com pany's shareholders, SEK	-0.97	0.81	0.23	1.73	2.46	3.96
Equity per share, SEK	22.62	21.53	22.62	21.53	22.62	23.42
Cash flow from current opera tions per share, SEK	4.81	2.45	-4.08	3.58	12.04	19.71
Number of shares at the end of the period excluding bought back shares, units	9,310,268	9,310,268	9,310,268	9,310,268	9,310,268	9,310,268
Weighted average number of shares excluding bought-back shares, units	9,310,268	9,310,268	9,310,268	9,305,405	9,310,268	9,307,837

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

Key ratios and figures

	3 mths	3 mths	6 mths	6 mths	12 mths	12 mths
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jul-Jun	Jan-Dec
	2013	2012	2013	2012	2012/2013	2012
Total income, SEK millions	551	590	1,123	1,234	2,322	2,433
EBITDA, SEK millions	16.5	33.4	53.6	68.4	129.7	144.5
EBITDA margin,%	3.0	5.7	4.8	5.5	5.6	5.9
EBITA, SEK millions	4.9	20.7	29.5	43.1	79.4	93.1
EBITA margin,%	0.9	3.5	2.6	3.5	3.4	3.8
EBIT, SEK millions	-6.4	15.1	12.3	32.1	50.8	70.7
EBIT margin,%	-1.2	2.6	1.1	2.6	2.2	2.9
Profit before tax, SEK millions	-8.9	11.9	7.5	27.9	40.5	61.0
Net margin,%	-1.6	2.0	0.7	2.3	1.7	2.5
Profit after tax, SEK millions	-8.1	9.2	6.0	20.2	27.6	41.8
Profit margin,%	-1.5	1.6	0.5	1.6	1.2	1.7
Equity ratio,%	17.1	15.1	17.1	15.1	17.1	15.3
Capital turnover rate, times	0.4	0.4	0.8	0.9	1.7	1.6
Return on equity,%	-3.4	4.2	2.7	9.5	12.2	18.9
Return on capital employed,%	-1.3	3.6	3.2	7.7	12.4	17.4
Investments in fixed assets, SEK M	12.5	17.3	24.3	31.6	54.7	62.0
Profit before tax per employee, SEK thousands	-14	19	11	44	61	92
Average number of employees on annual basis	648	644	664	641	665	660

For a five-year review, see Note 8. Definitions of key ratios and figures are set out in the Annual Report for 2012 and Note 9.

Consolidated Balance Sheet

	Note	2013 30 Jun	2013 31 Mar	2012 31 Dec	2012 30 Jun
ASSETS
Fixed assets
Goodwill		254.9	246.2	256.9	259.5
Other intangible non-current assets	4	129.5	133.8	140.6	151.4
Tangible fixed assets	4	82.4	87.0	99.3	120.4
Other long-term receivables		55.6	49.8	46.0	41.8
Deferred tax receivables	5	23.5	18.9	17.7	31.3
Current assets
Inventories		16.4	22.2	29.9	24.5
Trade and other receivables		694.1	691.4	799.5	745.2
Cash and cash equivalents		44.3	30.2	102.9	22.2
Total assets		1,300.7	1,279.5	1,492.8	1,396.3
EQUITY AND LIABILITIES
Equity pertaining to the Parent Company's sharehold		210.7	223.1	218.1	200.6
ers
Equity pertaining to holdings without a controlling		12.3	11.3	10.4	10.1
influence Equity, total		223.0	234.4	228.5	210.7
Long-term liabilities
Provision		-	-	-	1.2
Long-term, interest-bearing liabilities		117.0	115.5	120.3	160.0
Long-term, non-interest bearing liabilities		12.7	25.1	25.7	31.4
Deferred tax liabilities	5	31.3	33.0	37.6	41.0
Current liabilities
Short term, interest bearing liabilities		85.6	84.0	67.7	69.2
Short term, non-interest bearing liabilities		831.1	787.5	1,013.0	882.8
Total equity and liabilities		1,300.7	1,279.5	1,492.8	1,396.3

Consolidated cash flow statement

(summary)
-----------	--

	3 mths	3 mths	6 mths	6 mths	12 mths	12 mths
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jul-Jun	Jan-Dec
	2013	2012	2013	2012	2012/2013	2012
Comprehensive income for the period	-8.1	9.2	6.0	20.2	27.6	41.8
Adjustment for items not included in cash flow:
Depreciations and write-downs, fixed assets	22.9	18.3	41.3	36.3	78.8	73.8
Other adjustments	10.4	-7.3	12.9	-8.1	25.0	4.0
Cash flow before changes in working capital	25.2	20.2	60.2	48.4	131.4	119.6
Change in working capital	19.6	2.6	-98.2	-15.0	-19.3	63.9
Cash flow from current operations	44.8	22.8	-38.0	33.4	112.1	183.5
Acquisition of businesses	-2.8	-17.3	-5.6	-60.6	-8.6	-63.6
Disposals of businesses	-	-	9.0	-	9.0	-
Investments in fixed assets	-12.5	-17.3	-24.3	-31.6	-54.7	-62.0
Other cash flow from investment activities	0.7	0.4	0.7	4.9	1.6	5.8
Cash flow from investment activities	-14.6	-34.2	-20.2	-87.3	-52.7	-119.8
Dividends	-10.2	-9.3	-10.2	-9.3	-10.2	-9.3
Dividends to holdings without a controlling influence	-0.6	-0.3	-0.6	-0.3	-0.7	-0.4
Acquisitions from holdings without a controlling influ ence	0	-	-3.5	-	-3.5	-
Change in bank overdraft facilities	0	21.4	31.2	26.4	9.0	4.2
Contract borrowing	-1.6	-0.7	-6.1	2.9	-5.5	3.5
Loans taken/repaid	-5.8	-7.0	-11.9	-13.7	-25.3	-27.1
Other cash flow from financing activities	0	-	2.7	-	2.7	-
Cash flow from financing activities	-18.2	4.1	1.6	6.0	-33.5	-29.1
Change in cash and equivalents	12.0	-7.3	-56.6	-47.9	25.9	34.6
Cash and equivalents at beginning of the period	30.2	29.1	102.9	70.4	22.2	70.4
Exchange rate differences in cash and cash equiva lents	2.1	0.4	-2.0	-0.3	-3.8	-2.1
Cash and equivalents at end of the period	44.3	22.2	44.3	22.2	44.3	102.9

Consolidated Statement of Changes in Equity

Attributable to the parent company's shareholders

	Share capital	Other capital contribu tions	Translation of foreign subsidiaries	Hedging reserve	Loss brought forward incl. year's total result	Total	Attributable to holdings without a controlling influence	Total share holders' equity
1 January 2013	10.6	297.9	-12.6	-0.2	-77.6	218.1	10.4	228.5
Total comprehensive income for the period			-0.9	0.1	2.1	1.3	4.0	5.3
Financial liability to holdings without a controlling influence					2.8	2.8		2.8
Profit attributable to holdings without a controlling influence					1.4	1.4	-1.4	-
Translation of profit attributa ble to holdings without a controlling influence					-1.4	-1.4	1.4	-
Disposals of businesses			2.1			2.1	-1.6	0.5
Dividends					-10.2	-10.2		-10.2
Dividends to holdings without a controlling influence							-0.6	-0.6
Acquisitions from holdings without a controlling influence					-3.4	-3.4	0.1	-3.3
30 Jun 2013	10.6	297.9	-11.4	-0.1	-86.3	210.7	12.3	223.0

Holdings without a controlling influence: Proact Latvia Ltd 15%, Proact Lietuva UAB 26.14%, Proact Netherlands B.V. 9.35%, Proact Estonia AS 30% and Proact IT (UK) Ltd 22.5%.

Attributable to the parent company's shareholders

	Share capital	Other capital contribu tions	Translation of foreign subsidiaries	Hedging reserve	Loss brought forward incl. year's total result	Total	Attributable to holdings without a controlling influence	Total share holders' equity
1 January 2012	10.6	297.9	-6.5	-0.3	-96.5	205.3	9.5	214.8
Total comprehensive income for the period			-2.8	-0.2	16.0	13.0	4.2	17.2
Financial liability to holdings without a controlling influence					0.0	0.0		0.0
Profit attributable to holdings without a controlling influence					0.4	0.4	-0.4	-
Translation of profit attributa ble to holdings without a controlling influence					-0.4	-0.4	0.4	-
Dividends					-9.3	-9.3		-9.3
Dividends to holdings without a controlling influence							-0.3	-0.3
Acquisitions from holdings without a controlling influence					-12.8	-12.8	-3.3	-16.1
Utilisation of shares from own custody					4.4	4.4		4.4
30 Jun 2012	10.6	297.9	-9.3	-0.5	-98.2	200.6	10.1	210.7

Holdings without a controlling influence: Proact Latvia Ltd 15%, Proact Lietuva UAB 26.14%, Proact Netherlands B.V. 9.35%, Proact Estonia AS 30% and Proact IT UK Ltd 25%.

Income statement for Parent Company

	3 mths Apr-Jun 2013	3 mths Apr-Jun 2012	6 mths Jan-Jun 2013	6 mths Jan-Jun 2012	12 mths Jul-Jun 2012/2013	12 mths Jan-Dec 2012
Net sales	14.0	15.5	26.8	31.8	53.6	58.6
Cost of goods and services sold	-	-	-	-	-	-
Gross profit	14.0	15.5	26.8	31.8	53.6	58.6
Administration expenses	-12.6	-8.6	-24.6	-26.4	-54.0	-55.8
Operating profit	1.4	6.9	2.2	5.4	-0.4	2.8
Net financial items	1.8	16.2	1.1	15.3	48.8	63.0
Profit before tax	3.2	23.1	3.3	20.7	48.4	65.8
Income tax	-0.4	-1.2	-0.4	-0.6	-8.4	-8.6
Comprehensive income for the period	2.8	21.9	2.9	20.1	40.0	57.2

Balance sheet for Parent Company

	2013 30 Jun	2013 31 Mar	2012 31 Dec	2012 30 Jun
ASSETS Fixed assets Current assets Total assets	504.6 141.8 646.4	507.9 112.6 620.5	511.2 99.0 610.2	501.4 86.0 587.4
EQUITY AND LIABILITIES Equity Long-term liabilities Current liabilities Total liabilities Total equity and liabilities	186.5 145.4 314.5 459.9 646.4	193.7 156.7 270.1 426.8 620.5	193.7 170.4 246.1 416.5 610.2	156.7 170.3 260.4 430.7 587.4

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 half-yearly report, like the annual report for 2012, 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 half-yearly 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).

The Group applies the same accounting principles as those described in the annual report for 2012.

Financial instruments

Proact's financial instruments consist of derivatives, accounts receivable, cash and cash equivalents, accounts payable, accrued trade creditors and interest-bearing liabilities. Derivatives are valued at fair value at level 2 as defined by IFRS 7, i.e. fair value determined using valuation techniques with observable market data, either directly (as prices) or indirectly (derived to price). All other financial assets have been classified as loans and receivables, which includes accounts receivable and cash and cash equivalents. All other financial liabilities have been classified as other financial liabilities valued at accrued cost, which includes accounts payable, accrued trade creditors and liabilities to credit institutions. Liabilities to credit institutions have variable interest rates, and the reported interest rate is on a par with the current interest rate on liabilities to credit institutions, and other financial assets and liabilities have short terms. On the basis of this, the book values of all financial assets and liabilities are deemed to approximately match their fair values.

Note 3. Turnover by business area

	3 mths	3 mths	6 mths	6 mths	12 mths	12 mths
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jul-Jun	Jan-Dec
	2013	2012	2013	2012	2012/2013	2012
Public sector	121	160	261	330	526	595
Retail and wholesale trade and services	132	153	233	288	588	643
Telecoms	84	57	155	141	277	263
Manufacturing industry	67	84	147	145	305	303
Banking, finance	44	58	102	120	214	232
Oil, energy	55	39	92	92	219	219
Media	5	16	35	39	63	67
Other	43	23	98	79	130	111
Total	551	590	1,123	1,234	2,322	2,433

Note 4. Depreciation and write-down of fixed assets

	3 mths	3 mths	6 mths	6 mths	12 mths	12 mths
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jul-Jun	Jan-Dec
	2013	2012	2013	2012	2012/2013	2012
Depreciation of tangible fixed assets	-11.6	-12.7	-24.1	-25.3	-50.2	-51.4
Depreciation of intangible fixed assets	-6.1	-5.6	-12.0	-11.0	-23.4	-22.4
Writedown of intangible fixed assets	-5.2	-	-5.2	-	-5.2	-
Total	-22.9	-18.3	-41.3	-36.3	-78.8	-73.8

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 six months amounts to SEK 1.5 (7.7) million. Taxes paid over the period amount to SEK 7.8 (11.0) million. The Group's total deductions for losses amount to SEK 73.0 million. Of this, it has been assessed that an amount of SEK 70.1 million 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

The company has decided to divide the business units differently as of the first quarter of 2013, and so comparative information has been recalculated. The new business units are as follows:

Nordics:	Sweden, Norway, Finland and Denmark.
UK:	Great Britain
East:	Estonia, Latvia, Lithuania, Czech Republic and Slovakia
Benelux and Spain:	Netherlands, Belgium and Spain
Proact Finance:	Proact's finance company under its own auspices is reported sepa rately as this company supports all geographical regions.

Jan-Jun 2013 Nordics UK Benelux /Spain East Proact Finance Groupwide & elim. Group Total income 619 263 175 62 32 -28 1,123 Profit before tax and nonrecurring items 16.1 5.6 2.1 1.8 0.4 -3.7 22.3 Non-recurring items/divestment of business -11.0 7.9 -2.3 -7.2 0.0 -2.2 -14.8 Profit before tax 5.1 13.5 -0.2 -5.4 0.4 -5.9 7.5 Tax -1.5 Comprehensive income for the period 6.0

Jan-Jun 2012	Nordics	UK	Benelux /Spain	East	Proact Finance	Group wide & elim.	Group
Total income Profit before tax	704 26.3	308 8.8	173 -1.5	66 0.8	29 -0.6	-46 -5.9	1,234 27.9
Tax Comprehensive income for the period							-7.7 20.2

Note 7. Ten biggest shareholders

Stake in% according to Euroclear Sweden AB	30 Jun 2013	31 Mar 2013
LivförsäkringsAB Skandia	15.2	15.2
IGC Industrial Growth Company AB	6.1	6.6
Swedbank Robur Småbolagsfond Sverige	5.4	6.5
Lannebo Micro Cap.	5.3	5.3
Skagen Vekst Verdipapirfondet	4.9	4.9
Lannebo Microcap II	4.0	4.0
Fjärde AP-Fonden	3.8	3.8
AFA Sjukförsäkrings AB	3.3	3.3
Handelsbanken Fonder AB Re JPMEL	3.3	3.4
Svolder Aktiebolag	3.2	1.1
Other	45.5	45.9
Total	100.0	100.0

Following a previous buyback of own shares, the company owns 23 618 shares. This is equivalent to 0.3% of the total number of outstanding shares.

Note 8. Five-year summary

	Jul-Jun 2012/2013	Jan-Dec 2012	Jan-Dec 2011	Jan-Dec 2010	Jan-Dec 2009
Total income, SEK millions EBITDA, SEK millions	2,322 129.7	2,433 144.5	2,232 121.5	1,387 94.9	1,253 76.7
EBITDA margin,%	5.6	5.9	5.4	6.8	6.1
EBITA, SEK millions	79.4	93.1	74.6	76.9	65.3
EBITA margin,%	3.4	3.8	3.3	5.5	5.2
EBIT, SEK millions	50.8	70.7	54.6	72.1	60.0
EBIT margin,%	2.2	2.9	2.4	5.2	4.8
Profit before tax, SEK millions	40.5	61.0	41.9	70.1	60.1
Net margin,%	1.7	2.5	1.9	5.1	4.8
Profit after tax, SEK millions	27.6	41.8	29.5	52.5	52.4
Profit margin,%	1.2	1.7	1.3	3.8	4.2
Equity ratio,%	17.1	15.3	14.3	21.4	24.1
Capital turnover rate, times	1.7	1.6	1.9	1.7	1.8
Return on equity,%	12.2	18.9	14.7	28.6	30.7
Return on capital employed,%	12.4	17.4	18.4	38.8	35.4
Investments in fixed assets, SEK M	54.7	62.0	73.1	39.8	22.5
Profit before tax per employee, SEK thousands	61	92	74	216	191
Average number of employees on annual basis	665	660	568	325	315
Earnings per share for the period, SEK *)	2.46	3.96	2.69	5.43	5.22

*) 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 9. 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	EBIT expressed as a percentage of revenues
Net margin%	Profit or loss 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, times	Revenues expressed as a percentage of the average balance sheet total
Return on equity	Profit after tax, expressed as a percentage of average equity
Capital employed	Ratio of the balance sheet total minus non interest-bearing liabilities inclusive of deferred tax liabilities
Return on capital employed	Return after tax plus financial costs, 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

Kistagången 2 Fax: +46 8 410 668 80 SE-164 28 KISTA E-mail: itgroup@proact.se www.proact.se

Co. reg. no.: 556494- 3446 Headquarters: Stockholm