Proact IT Group — Interim / Quarterly Report 2022

Oct 25, 2022

• Revenues increased by 35.6 per cent to SEK 1,098.6 million (810.4). • Adjusted EBITA increased by 30.9 per cent and amounted to SEK 78.3 million (59.8), corresponding to an adjusted EBITA margin of 7.1

• New contracts relating to cloud services worth SEK 158.1 million (74.8) were contracted, an increase by 111.5 per cent.

• Recurring revenues (revenues from cloud and support services) amounted to SEK 369.7 million (294.2), corresponding to an

• On the 1st of July the acquisition of sepago GmbH was completed with a purchase price of EUR 12 million, on a cash- and debt free basis, and with an additional earn-out of up to EUR 4 million.

• Profit before tax amounted to SEK 56.1 million (46.9). • Profit after tax amounted to SEK 43.9 million (37.4). • Profit per share amounted to SEK 1.60 (1.36).

annualized rate of SEK 1,478.6 million (1,176.9).

July – September 2022 January – September 2022

• Revenues increased by 28.4 per cent to SEK 3,316.8 million (2,582.6).

Interim Report January – September

Q32022

• Adjusted EBITA increased by 72.8 per cent and amounted to SEK 212.8 million (147.5), corresponding to an adjusted EBITA margin of 6.4 per cent (5.7).
• Profit before tax amounted to SEK 158.2 million (114.5).
• Profit after tax amounted to SEK 127.0 million (86.2).
• Profit per share amounted to SEK 4.62 (3.14).
• New contracts relating to cloud services worth SEK 421.0 million (224.6) were contracted, an increase by 87.5 per cent.
• Recurring revenues (revenues from cloud and support services) amounted to SEK 1,069.3 million (871.2).

Financial summary

per cent (7.4).

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	2022	2021	months	2021
Total Revenues	1,098.6	810.4	3,316.8	2,582.6	4,259.2	3,525.0
Growth, %	35.6	-1.2	28.4	-2.6	19.5	-3.0
of which currency rate effects, %	4.2	0.5	3.8	-1.8	2.9	-1.2
of which effect from acquisitions and divestments, %	10.1	7.5	9.1	5.3	9.5	6.3
Organic growth, %¹	21.2	-9.2	15.6	-6.0	7.2	-8.1
Adjusted EBITA²	78.3	59.8	212.8	147.5	269.8	204.4
Adjusted EBITA margin, %	7.1	7.4	6.4	5.7	6.3	5.8
Operating profit (EBIT)	60.1	52.9	171.9	124.6	213.6	166.2
Operating margin (EBIT), %	5.5	6.5	5.2	4.8	5.0	4.7
Profit before tax	56.1	49.6	158.2	114.5	195.6	151.9
Net Margin, %	5.1	6.1	4.8	4.4	4.6	4.3
Profit after tax	43.9	37.4	127.0	86.2	158.0	117.2
Profit Margin, %	4.0	4.6	3.8	3.3	3.7	3.3
Earnings per share (outstanding shares), SEK³	1.60	1.36	4.62	3.14	5.75	4.27
Return on capital employed, %⁴	-	-	-	-	15.9	13.4
Cash flow from operations	-78.4	-142.7	89.8	48.2	345.1	303.6

Continued strong growth and good profitability

1) Organic growth refers to growth excluding currency rate effects and acquired and divested companies.

2) EBITA before items affecting comparability.

3) Proact has long-term performance-based share programs that could result in dilution of maximum 1.34 percent. The comparative figures have been adjusted for the 1:3 share split that was implemented in May 2021. The company has bought back own shares which affects the key ratios above.

4) Calculated only for full year and rolling 12 months

About Proact

Proact is Europe's leading specialist in data and information management with a focus on cloud services and data centre solutions. We help our customers to store, connect, protect, secure and drive value through their data whilst increasing agility, productivity and efficiency.

We have completed thousands of successful projects around the world, have more than 4 000 customers and currently manage hundreds of petabytes of information in the cloud. We employ over 1 000 people in 13 countries in Europe and in North America.

Founded in 1994, our parent company, Proact IT Group AB (publ) was listed on Nasdaq Stockholm in 1999 (under the symbol PACT).

Comments from the CEO of Proact

The third quarter of 2022 was yet another strong quarter for Proact, with both high revenue growth and good profitability. Revenues for the quarter amounted to SEK 1,099 million (810), which corresponds to a growth of 36 per cent. Organically the revenue growth was 21 per cent, with an organic growth of 34 per cent for systems and 6 per cent for services. Our recurring services, i.e., revenues from cloud services and support services, continues to develop strongly. In total they grew by 26 per cent, including the contribution from the ahd acquisition, to an annualized rate of SEK 1,479 million (1,177), and organically they grew by 6 per cent.

The demand for our services has continued to be good during the quarter and we closed contracts for cloud services of SEK 158 million (75), which is significantly more than last year and follows the trend we have seen during all of 2022. All of our Business Units see a clear growth from last year, except West which declines slightly. Revenues from cloud services grew by 34 per cent, of which 4 per cent organically, from SEK 178 million to SEK 239 million.

We have also signed deals for systems orders at a high pace during the quarter, with strong revenue growth in BU Nordics & Baltics as well as in BU UK and BU Central. The underlying demand is good at the same time as we have seen a contribution from shorter delivery times for some of our solutions. Our order backlog continues to be significantly higher than normal, although there has been a decline during the two past quarters.

Adjusted EBITA during the quarter increased to SEK 78 million (60) corresponding to a margin of 7.1 per cent (7.4). The increase in EBITA is primarily a result of the increased revenues. Gross margins declined compared to last year, primarily within the systems business, which was at a relatively high level during the third quarter of 2021, and this in turn also led to a lower EBITA margin.

Proact does still not see any significant impact on its business due to the war in Ukraine and the macroeconomic challenges. Increased costs for supplied goods and energy have so far had a limited effect on the profitability. However, the uncertainty remains regarding future economic growth and inflation, as well as further impact on supply chains. We monitor the development and continue to implement actions, such as price increases towards customers and efficiencies, to minimize the potential negative impact on the company.

During the quarter we concluded, as previously announced, the acquisition of sepago in Germany. The acquisition strengthens our presence in Germany and contributes with high-in-demand competence within the strategically important area of digital transformation through public cloud services. The integration has started, and we have already received the first joint deals.

Our employees are the most important asset we have, and I'm happy that our work to attract and retain competence has been noticed through us being named one of Sweden's top ten best companies for young talents by the Swedish organization "Karriärföretagen i Sverige. We were also recently ranked one of the best IT companies within managed cloud services in the Netherlands, just as in Sweden before he summer, which shows that our customers also appreciate the work we do.

To conclude, we leave yet another good quarter behind us, with strong growth and good profitability.

Kista, 25 October, 2022

Jonas Hasselberg CEO

The Group's development July-September

Revenues and result

For the third quarter, total revenues amounted to SEK 1,098.6 million (810.4), an increase by 35.6 per cent. Currency rate effects affected by 4.2 per cent, and acquisitions and divestments affected by 10.1 per cent. Organically, revenues increased by 21.2 per cent.

System revenues increased by 41.8 per cent to SEK 629.2 million (443.6) and organically by 33.9 per cent, compared to the same period previous year, due to good underlying demand in most of the Business Units, and delivery of systems from backlog.

Service revenues increased by 28.0 per cent to SEK 469.1 million (366.5) and organically by 5.8 per cent, with good demand in all service areas. Service revenues accounted for 42.6 per cent (45.2) of the company´s total revenues for the quarter.

New contracts relating to cloud services worth SEK 158.1 million (74.8) were contracted during the quarter. The contracts normally have a term of three to five years. Total revenues from cloud services increased by 33.9 per cent and amounted to SEK 238.7 million (178.4). Organically they increased by 4.2 per cent. Recurring revenues, revenues from cloud and support services, amounted to SEK 369.7 million (294.2), corresponding to an annualized rate of SEK 1,478.6 million (1,176.9). This corresponds to an increase of 25.6 per cent, of which the organic increase was 6.0 per cent

Recurring Revenues rolling 12 months

The gross margin decreased in the quarter, compared to the same period previous year, primarily due to lower system margins compared to relatively high margins in the third quarter of 2021.

Sales and administration expenses increased organically by 6.3 per cent. Continued cost control resulted in a limited growth in sales and administration costs, despite the increase in revenues and increased travel and other sales related expenses.

Adjusted EBITA increased by 30.9 per cent compared to the same period previous year and amounted to SEK 78.3 million (59.8) as a result of the increased revenues. Adjusted EBITA margin was 7.1 per cent (7.4), with a decline due to decreased gross margins. Profit before tax amounted to SEK 56.1 million (49.6).

Proact reports items affecting comparability separately to show the development in the underlying business. Items affecting comparability refer to items that are non-recurring and deviate from the normal business. During the third quarter of 2022, these items amounted to SEK 4.9 million (0.0) referring to transaction costs for acquisitions, mainly related to sepago

.

Recurring Revenues Profit per share, and return on equity 12 months, %

The Group's development January-September

Revenues and result

For the first nine months, total revenues amounted to SEK 3,316.8 million (2,582.6), an increase by 28.4 per cent. Currency rate effects affected by 3.8 per cent, and acquisitions and divestments affected positively by 9.1 per cent. Organically, revenues increased by 15.6 per cent.

System revenues increased by 31.1 per cent to SEK 1,948.8 million (1,486.5) and organically the increase was 23.0 per cent. Service revenues increased by 25.0 per cent to SEK 1,367.0 million (1,094.0) and organically the increase was 5.6 per cent. Service revenues accounted for 41.2 per cent (42.4) of the company´s total revenues for the first nine months.

New contracts relating to cloud services worth SEK 421.0 million (224.6) were contracted during the first nine months. The contracts normally have a term of three to five years. Total revenues from cloud services increased by 33.6 per cent and amounted to SEK 693.5 million (519.2). Organically they increased by 5.5 per cent.

The gross margin decreased during the first nine months compared to the same period previous year, primarily due to lower margins within the systems business. The decline is primarily related to some specific larger deals with lower margins.

Sales and administration expenses increased organically by 3.2 per cent. Continued cost control resulted in a limited increase in sales and administration costs, despite increased revenue growth and increased travel and other sales related expenses.

Adjusted EBITA increased by 44.2 per cent compared to previous year and amounted to SEK 212.8 million (147.5). Adjusted EBITA margin was 6.4 per cent (5.7). Profit before tax amounted to SEK 158.2 million (114.5).

Revenue by industry

Amounts in	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Rolling 12	Jan-Dec
SEK million	2022	2021	2022	2021	months	2021
Telecom	77.9	66.4	344.3	299.9	411.5	367.0
Bank, Finance	75.3	60.4	218.2	236.8	312.5	331.1
Energy	61.2	51.4	181.3	158.0	231.7	208.3
Manufacturing	141.8	109.2	466.3	323.1	584.9	441.7
Media	27.5	20.0	82.0	63.9	104.4	86.3
Trading & Services	226.3	160.4	640.5	451.1	817.8	628.4
Public sector	288.4	199.0	850.1	643.9	1,080.3	874.0
Other	200.2	143.6	534.1	405.8	716.3	588.0
Total revenue	1,098.6	810.4	3,316.8	2,582.6	4,259.2	3,525.0

During the first nine months of 2022, items affecting comparability amounted to SEK 5.7 million (1.2) and refers to transaction costs for acquisitions.

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	2022	2021	months	2021
Total Revenues	1,098.6	810.4	3,316.8	2,582.6	4,259.2	3,525.0
Cost of goods and services sold,
excl. amortizations and depreciations	-813.4	-549.4	-2,480.5	-1,895.2	-3,175.2	-2,589.9
Gross profit excl. Amortizations and depreciations	285.2	261.1	836.3	687.3	1,084.0	935.1
Gross margin excl. amortizations and depreciations, %	26.0	32.2	25.2	26.6	25.5	26.5
Operational expenses, excl. amortizations and
depreciations	-167.1	-134.5	-504.7	-428.6	-655.6	-579.5
Adjusted EBITDA¹	118.0	126.6	331.6	258.7	428.4	355.5
Adjusted EBITDA margin, %	10.7	15.6	10.0	10.0	10.1	10.1
Depreciations and write-downs of tangible assets	-39.8	-37.5	-118.7	-111.3	-158.6	-151.2
Adjusted EBITA¹	78.3	59.8	212.8	147.5	269.8	204.4
Adjusted EBITA margin, %	7.1	7.4	6.4	5.7	6.3	5.8
Amortizations and write-downs of intangible assets	-13.3	-7.0	-35.2	-21.7	-44.7	-31.2
Items affecting comparability	-4.9	-	-5.7	-1.2	-11.5	-6.9
Operating profit/loss (EBIT)	60.1	52.9	171.9	124.6	213.6	166.2
Operating margin (EBIT), %	5.5	6.5	5.2	4.8	5.0	4.7

1) EBITDA and EBITA before items affecting comparability

Cash flow

July - September

Cash flow for the quarter was SEK -246.0 million (-181.4), of which SEK -78.4 million (-142.7) from operating activities. Cash flow from changes in working capital amounted to SEK -186.5 million (-239.3), primarily through lower accounts payables of SEK -171.2 million, and the purchase price paid for sepago impacted cash flow from investing activities by SEK -115.3 million.

January – September

Cash flow for the first nine months was SEK -197.1 million (-162.8), of which SEK 89.8 million (48.2) from operating activities. Cash flow from changes in working capital amounted to SEK –219.3 million (-193.4), mainly related to an increase in operating receivables by SEK 126.3 million and by a decrease in accounts payables of SEK 96.6 million. Cash flow from investing activities was SEK -155.3 million (-111.9), which primarily consisted of the purchase price paid for sepago during the third quarter of 2022 . For 2021 the cash flow from investing activities primarily consisted of the purchase price paid for Conoa during the second quarter of 2021. During the period, repayments of leasing liabilities were made by SEK 92.1 million.

Investments

During the first nine months of 2022, SEK 53.2 million (31.0) has been invested in fixed assets, of which SEK 9.7 million (10.0) in Proact Finance for customer deliveries.

Financial position

Cash and cash equivalents amounted to SEK 284.9 million as of September 30, 2022, compared to SEK 320.6 million previous year. Of the total bank overdraft facility of SEK 158.9 million, none was utilized. Bank loans amounted to SEK 506.3 million and relate to a three-year revolving credit facility that Proact concluded during the third quarter of 2021. The facility amounts to a total of SEK 600 million and has a possibility of up to two years' extension. During the period the option to extend the facility by one year has been utilized.

Investments in IT equipment for the cloud operations are financed through leasing agreements. The Group's equity ratio at the end of the period was 22.8 per cent (24.3).

Net debt

	Sep 30 Jun 30		Sep 30 Jun 30
Amounts in SEK million	2022	2022	2021	2021
Cash and cash equivalents	284.9	528.0	320.6	499.8
Bank overdraft facilities	-	-	-	-
Liabilities to credit institutions, excl.
liabilities related to financial leasing -507.4		-502.3	-257.0	-256.6
Net cash (+)/Net debt (-)
excl. financial leasing	-222.4	25.7	63.5	243.1
Financial leasing liabilities	-261.4	-223.9	-223.2	-216.9
Net cash (+)/Net debt (-)
incl. financial leasing	-483.9	-198.2	-159.7	26.2
Unutilized bank overdraft facility	158.9	158.6	158.0	157.9
Total bank overdraft facility	158.9	158.6	158.0	157.9

Income tax

The Group's tax expense includes the sum of current tax and deferred tax calculated on the basis of current tax rates in each country. The reported tax expense for the first nine months amounted to SEK 31.2 million (28.3), corresponding to an efficient tax rate of 19.7 per cent (24.7).

Buy-back of own shares

The Annual General Meeting on May 5, 2022, authorized the Board to acquire up to 10.0 percent of the company's shares until the next Annual General Meeting. As of September 30, 2022, no shares have been acquired within this authorization.

As of September 30, 2022, the company holds 546,807 shares in own repository, which corresponds to 2.0 per cent of the total number of shares.

Employees

The company had 1,255 employees (1,062) as of September 30, 2022, of which the acquisition of ahd has contributed with 112 employees and sepago has contributed with 82 employees.

Parent Company in brief

The Parent Company's total revenues for the first nine months amounted to SEK 100.4 million (76.9). Profit before tax amounted to SEK 56.5 million (15.4).

The Parent Company's liabilities in a joint group currency account amounted to SEK 254.9 million (185.4) as of 30 September 2022.

At the end of the period, the number of people employed by the parent company totalled 19 (18).

The Parent Company's operations have remained unchanged during the period. There have been no significant transactions with related parties.

Business Units

Nordic & Baltics Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Sweden and the US

Revenues and result

July – September

In Nordics & Baltics, revenues increased by 29.4 per cent during the quarter and organically by 30.8 per cent. System revenues increased by 42.3 per cent and organically by 46.8 per cent. System revenues were strong in most countries, partly as a result of deliveries of backlog. Service revenues increased by 6.8 per cent and organically by 2.8 per cent, with good growth in support services, partly linked to the strong system sales, as well as continued good growth within consulting services.

Adjusted EBITA amounted to SEK 40.8 million (35.6) and the EBITA margin was 7.5 per cent (8.5) for the quarter. EBITA was positively affected primarily by the increase in revenues while the EBITA margin decreased mainly due to lower gross margins within the system business.

January – September

In Nordics & Baltics, revenues increased by 25.7 per cent during the first nine months and organically the increase was 22.9 per cent. System revenues increased by 32.3 per cent and organically the increase was 31.3 per cent. System revenues developed positively in most of countries due to strong demand. Service revenues increased by 12.0 per cent and organically they increased by 5.4 per cent.

Adjusted EBITA amounted to SEK 108.7 million (86.6) and the EBITA margin was 6.4 per cent (6.4) for the first nine months. In Nordics & Baltics EBITA was positively affected primarily by the growth in revenues.

	Jul-Sep	Jul-Sep	Change,	Jan-Sep	Jan-Sep	Change,	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	%	2022	2021	%	months	2021
Sytem revenues	380.8	267.7	42.3	1,217.6	920.0	32.3	1,580.2	1,282.6
Service revenues	163.5	153.0	6.8	488.3	435.9	12.0	651.3	599.0
of which support revenue	78.4	66.4	18.1	220.9	200.5	10.2	289.1	268.7
of which revenue from cloud services	50.6	54.4	-7.0	144.5	136.4	6.0	193.7	185.6
of which consulting revenue	34.5	32.2	7.0	122.8	99.1	24.0	168.5	144.7
Other	0.3	0.2	17.4	1.1	1.7	-35.6	1.6	2.2
Total Revenues	544.6	421.0	29.4	1,706.9	1,357.6	25.7	2,233.1	1,883.8
Adjusted EBITA	40.8	35.6	14.5	108.7	86.6	25.5	137.4	115.3
Margin, %	7.5	8.5		6.4	6.4		6.2	6.1

July – September

In UK, revenues increased by 30.0 per cent during the quarter and organically by 25.3 per cent. The difference between the organic and non-organic growth is due to currency rate effects. System revenues increased by 74.8 per cent and organically by 67.7 per cent. The increase in revenues is mainly due to a higher sales pace than previous year. Service revenues decreased by 1.7 per cent and decreased organically by 4.8 per cent Revenues from cloud services grew due to contract starts at new customers, while the support revenues declined due to weaker systems sales earlier in the year. The demand for consulting services is good, but revenues were impacted by the holiday period, while the third quarter of last year contained some larger customer deliveries.

Adjusted EBITA amounted to SEK 10.2 million (9.0) and the EBITA margin was 5.6 per cent (6.4) for the quarter. EBITA increased as a result of the increased revenues, while the margin decreased due to lower gross margins.

January – September

In UK, revenues increased by 6.4 per cent during the first nine months, with revenues organically increasing by 0.6 per cent. System revenues increased by 8.3 per cent, and organically by 2.5 per cent, with a weaker development earlier during the year offset by a stronger third quarter. Service revenues increased by 4.3 per cent, while decreasing organically by 1.4 per cent, with cloud services showing good growth, offset primarily by reduced support revenues linked to previously weak system sales.

Adjusted EBITA amounted to SEK 29.1 million (31.7) and the EBITA margin was 5.5 per cent (6.4) for the first nine months. EBITA and EBITA margin were negatively affected by somewhat reduced gross margins both within the system and service businesses.

Amounts in SEK million	Jul-Sep 2022	Jul-Sep 2021	Change, %	Jan-Sep 2022	Jan-Sep 2021	Change, %	Rolling 12 months	Jan-Dec 2021
Sytem revenues	102.4	58.6	74.8	281.4	259.7	8.3	330.7	309.1
Service revenues	81.1	82.6	-1.7	249.5	239.4	4.3	331.3	321.1
of which support revenue	24.3	28.2	-13.6	76.9	81.6	-5.8	103.5	108.2
of which revenue from cloud services	47.7	43.6	9.4	144.5	130.9	10.4	191.1	177.5
of which consulting revenue	9.1	10.8	-15.8	28.2	26.9	4.8	36.7	35.4
Other	-	-	-	-	-	-	-	-
Total Revenues	183.5	141.1	30.0	530.9	499.1	6.4	662.0	630.2
Adjusted EBITA	10.2	9.0	12.8	29.1	31.7	-8.2	32.1	34.7
Margin, %	5.6	6.4		5.5	6.4		4.9	5.5

Revenues Adjusted EBITA

July – September

In West, revenues increased by 0.4 per cent during the quarter but decreased organically by 3.7 per cent. The difference between the organic and non-organic growth is due to currency rate effects. System revenues decreased by 29.2 per cent and organically by 32.2 per cent. Service revenues increased by 13.5 per cent and organically by 8.9 per cent. In West, our market is rapidly transforming from system sales to service sales, which explains the decline in system sales and the good growth especially in cloud and consulting services.

Adjusted EBITA amounted to SEK 9.8 million (9.9) and the EBITA margin was 5.6 per cent (5.6) for the quarter. Both the gross margins and sales and administration cost was relatively unchanged compared to same period previous year.

January – September

In West, revenues increased by 11.8 per cent during the first nine months and organically the increase was 7.8 per cent. System revenues increased by 3.7 per cent and organically were unchanged. Service revenues increased by 14.9 per cent and organically the increase was 10.8 per cent with a high underlying demand mainly for cloud and consulting services.

Adjusted EBITA amounted to SEK 31.4 million (10.5) and the EBITA margin was 5.6 per cent (2.1) for the first nine months.

The improvement in profitability is a result of both higher revenues and the efficiency program that was implemented at the beginning of 2021.

	Jul-Sep	Jul-Sep	Change,	Jan-Sep	Jan-Sep	Change,	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	%	2022	2021	%	months	2021
Sytem revenues	38.2	53.9	-29.2	142.2	137.2	3.7	184.9	179.8
Service revenues	137.9	121.5	13.5	415.1	361.2	14.9	544.4	490.5
of which support revenue	14.0	12.8	9.8	40.7	37.6	8.3	54.0	50.9
of which revenue from cloud services	93.5	82.9	12.8	271.3	235.8	15.0	351.8	316.4
of which consulting revenue	30.3	25.8	17.4	103.1	87.8	17.5	138.6	123.3
Other	0.0	-0.0	-233.3	0.0	0.2	-87.3	-0.2	-
Total Revenues	176.1	175.4	0.4	557.4	498.6	11.8	729.4	670.6
Adjusted EBITA	9.8	9.9	-0.6	31.4	10.5	198.8	43.7	22.8
Margin, %	5.6	5.6		5.6	2.1		6.0	3.4

July – September

In Central, revenues increased by 136.2 per cent during the quarter and organically by 12.3 per cent. The acquisition of ahd contributed positively primarily to revenues in cloud services but also to system revenues and consulting revenues. During the quarter, sepago, which has been consolidated since July 1st was acquired, and contributed positively primarily to consulting revenues. System revenues increased by 94.4 per cent and organically by 17.0 per cent, where several larger deals were delivered during the quarter. Service revenues increased by 206.7 per cent and organically they increased by 6.8 per cent due to good underlying demand.

Adjusted EBITA amounted to SEK 10.2 million (6.7) and the EBITA margin was 4.9 per cent (7.6) for the quarter. In Central, EBITA was positively affected by the contribution of ahd and sepago, while the EBITA margin decreased due to certain system deals with lower margins and integration costs for both of the acquisitions which affected mainly administration costs.

January – September

In Central, revenues increased by 114.0 per cent during the first nine months and organically they increased by 19.6 per cent, as a result of good underlying demand. System revenues increased by 87.4 per cent and organically the revenues increased by 30.8 per cent as a result of good underlying demand. Service revenues increased by 160.3 per cent and organically by 3.3 per cent.

Adjusted EBITA amounted to SEK 29.9 million (19.7) and the EBITA margin was 5.3 per cent (7.4) for the first nine months. In Central, EBITA was positively affected primarily by the acquisitions of ahd and sepago. The EBITA margin decreased as a result of reduced gross margins.

	Jul-Sep	Jul-Sep	Change,	Jan-Sep	Jan-Sep	Change,	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	%	2022	2021	%	months	2021
Sytem revenues	104.3	53.6	94.4	302.9	161.6	87.4	361.8	220.6
Service revenues	104.6	34.1	206.7	262.6	100.9	160.3	326.7	165.0
of which support revenue	12.7	9.9	28.7	35.4	28.5	24.1	45.5	38.7
of which revenue from cloud services	63.8	18.4	247.6	176.9	53.8	229.0	219.4	96.3
of which consulting revenue	28.0	5.8	380.4	50.4	18.6	170.4	61.8	30.1
Other	0.1	0.7	-87.1	0.2	1.8	-89.9	1.0	2.6
Total Revenues	209.0	88.5	136.2	565.7	264.3	114.0	689.6	388.2
Adjusted EBITA	10.2	6.7	52.3	29.9	19.7	52.0	41.2	30.9
Margin, %	4.9	7.6		5.3	7.4		6.0	8.0

Revenues Adjusted EBITA

July – September

Proact Finance revenues decreased for the quarter compared to the same period previous year due to a decrease in financed volume, as a result of the decision in 2021 to offer external financing solutions to a greater extent and amounted to SEK 8.5 million (12.9). Net financial items amounted to SEK 0.6 million (0.8). Profit before tax amounted to SEK 3.4 million (2.7).

January – September

Proact Finance revenues decreased for the first nine months compared to the same period previous year due to a decrease in financed volume and amounted to SEK 29.2 million (38.2). Net financial items amounted to SEK 2.1 million (2.6). Profit before tax amounted to SEK 5.7 million (9.5). Future contracted cash flows from Proact Finance amounted to SEK 103.9. million (134.9), a decrease of 21.2 per cent.

	Jul-Sep	Jul-Sep	Change,	Jan-Sep	Jan-Sep	Change,	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	%	2022	2021	%	months	2021
Revenues	8.5	12.9	-34.4	29.2	38.2	-23.5	42.4	51.4
EBIT	2.8	1.9	50.1	3.6	6.9	-48.4	3.1	6.5
Net financial items	0.6	0.8	-28.7	2.1	2.6	-18.7	3.0	3.5
Profit before tax	3.4	2.7	26.4	5.7	9.5	-40.3	6.1	9.9

Operating segments

Nordics & Baltics: Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Sweden and USA | UK: United Kingdom | West: Belgium and the Netherlands | Central: Czech Republic and Germany | Proact Finance: Proact's own in-house finance company is reported separately as this company supports all geographical regions.

Jan-Sep 2022					Proact
Amounts in SEK million	Nordics	UK	West	Central	Finance	Groupwide Eliminations		Group
Total revenue	1,706.9	530.9	557.4	565.7	29.2	123.6	-196.9	3,316.8
EBITDA before items affecting comparability Depreciations and write-downs on tangible	135.2	64.8	56.5	50.5	3.6	21.0	-	331.6
fixed assets	-26.6	-34.7	-25.0	-20.5	-	-12.0	-	-118.7
EBITA before items affecting comparability	108.7	30.1	31.5	29.9	3.6	9.0	-	212.8
Items affecting comparability	-	-	-	-5.7	-	-	-	-5.7
EBITA Amortizations and write-downs on intangible	108.7	30.1	31.5	24.2	3.6	9.0	-	207.1
fixed assets	-4.3	-3.8	-6.0	-15.9	-	-5.2	-	-35.2
EBIT	104.4	26.3	25.6	8.3	3.6	3.8	-	171.9
Net Financial Items	-4.5	-2.1	-1.9	-4.6	2.1	-2.8	-	-13.7
Profit before tax	99.9	24.2	23.7	3.7	5.7	1.0	-	158.2
Tax								-31.2

Comprehensive income for the period 127.0

Jan-Sep 2021					Proact
Amounts in SEK million	Nordics	UK	West	Central	Finance	Groupwide Eliminations		Group
Total revenue	1,357.6	499.1	498.6	264.3	38.2	98.4	-173.6	2,582.6
EBITDA before items affecting comparability Depreciations and write-downs on tangible	116.4	68.5	35.3	28.1	6.9	3.5	-	258.7
fixed assets	-29.8	-36.8	-24.8	-8.4	-	-11.4	-	-111.3
EBITA before items affecting comparability	86.6	31.7	10.5	19.7	6.9	-7.9	-	147.5
Items affecting comparability	-1.2	-	-	-	-	-	-	-1.2
EBITA	85.5	31.7	10.5	19.7	6.9	-7.9	-	146.3
Amortizations and write-downs on intangible
fixed assets	-2.9	-5.7	-5.9	-1.3	-	-5.9	-	-21.7
EBIT	82.6	26.0	4.6	18.4	6.9	-13.9	-	124.6
Net Financial Items	-2.4	-2.5	-2.1	-0.7	2.6	-5.1	-	-10.1
Profit before tax	80.2	23.5	2.5	17.7	9.5	-18.9	-	114.5
Tax								-28.3

Comprehensive income for the period 86.2

Market review

Proact actively monitors the market development and regularly interviews customers to make sure the company positions itself correctly, develops new business opportunities and reinforces its competitiveness. With the knowledge gained from these observations, Proact has identified several megatrends and customer priorities that the company is working strategically to leverage, including helping customers to enable digital transformation and innovation, to leverage on the advantages of hybrid cloud and to ensure strong cyber-security

Digital transformation and innovation

Although digitalisation has been a mega-trend over a long period of time, it was accelerated during the covid-19 pandemic. Businesses have seen new needs for digitalisation, data accessibility and security as our way of working has changed. More types of businesses and sectors are exploring innovative ways to analyse and process everlarger data volumes — often with the assistance of IT-driven artificial intelligence (AI), automation and data analytics. At the same time, IT departments are battling with redundancy, complexity and resource constraints while also attempting to meet increasingly stringent user demands within tight budgets. A clear trend to cope with these opportunities and challenges is a balance between traditional IT infrastructure and a future-oriented cloud strategy. This balance allows customers to gain the best of both worlds as they ensure security, enable resources, reduce cost and open up new possibilities to move data quickly and enable faster innovation.

Hybrid cloud

To better facilitate their own delivery of IT, companies and the public sector are increasingly choosing hybrid cloud solutions combining different types of cloud services and on-premises infrastructure. This allows a faster, more secure and efficient response to business needs as well as prepares organisations for new territory such as edge computing.

IT security

Information security is highly prioritised at all companies and organisations, where threats from cyberattacks and other vulnerabilities are growing. In connection with Russia's invasion of Ukraine, the security situation for IT and information security has come even more into focus. This, in combination with the regulatory and commercial requirements for secure data management, means that investments in security solutions and skills will increase. Many companies and organisations do not have their own resources to handle current security threats, so they risk missing out on business opportunities, losing sales, harming the company's reputation, or potentially having to deal with dissatisfied customers. This shortage of resources in the market increases the willingness to adopt security services.

Other information

Transactions with related parties

No transactions between Proact and related parties, which have significantly affected the Group's position and profits, have taken place during the quarter

Risks and uncertainty factors within the enterprise

In the short term, Proact is not significantly affected by Russia's invasion of Ukraine. In the longer term, the impact on the global economy, in the form of inflation, exchange rate fluctuations, lower economic growth and disturbances in supply chains, could affect Proact. Delivery disruptions linked to the global semiconductor shortage also continue to negatively affect the ability for Proact to deliver customer orders received. Otherwise, no risks or uncertainties have changed in comparison to those described in the most recently published annual report. For a more detailed description of significant risks and uncertainty factors, please see Proact's annual report for 2021.

Alternative Performance Measures

The company presents financial key figures in the interim report that are not defined according to IFRS. The company believes that these key figures provide valuable supplementary information to investors and the company's management. For definitions of the financial ratios, see the Annual Report 2021.

Nomination Committee

According to a decision from the previous Annual General Meeting of Proact IT Group AB, after the end of the quarter, a nomination committee was appointed with the task to work out proposals to be submitted to the company's annual general meeting 2023.

The Nomination Committee consists of the following members:

• Malin Ruijsenaars, Chair (Aktiebolaget Grenspecialisten)
• Stephanie Göthman (Livförsäkringsbolaget Skandia)
• Johannes Wingborg (Länsförsäkringar Fondförvaltning AB)
• Wilhelm Gruvberg (Alcur Fonder AB)

Financial calendar

9 Feb 2023	Year-End Report 2022
4 May 2023	Interim Report Q1 2023
4 May 2023	Annual General Meeting 2023
14 July 2023	Interim Report Q2 2023
27 Oct 2023	Interim Report Q3 2023
8 Feb 2024	Interim Report Q4 2023

Kista 25 October 2022 Proact IT Group AB (publ)

Jonas Hasselberg CEO

This interim report has not been audited.

Note

The information in this interim report is such information as Proact IT Group (publ) is obliged to publish pursuant to the EU Market Abuse Regulation, the Securities Market Act, and/or the Act on Trading in Financial Instruments. This information was submitted for publication at 8:00 (CET) on 25 October 2022.

Financial reports

Consolidated statement of comprehensive income

Amounts in SEK million	Jul-Sep 2022	Jul-Sep 2021	Jan-Sep 2022	Jan-Sep 2021	Rolling 12 months	Jan-Dec 2021
System income	629.2	443.6	1,948.8	1,486.5	2,464.7	2,002.4
Service income	469.1	366.5	1,367.0	1,094.0	1,792.3	1,519.4
of which support revenue	130.9	115.9	375.8	348.1	495.7	468.1
of which revenue from cloud services	238.7	178.4	693.5	519.2	900.3	726.0
of which consulting revenue	99.4	72.3	297.7	226.7	396.3	325.3
Other operating revenue	0.3	0.3	1.0	2.1	2.1	3.2
Total income	1,098.6	810.4	3,316.8	2,582.6	4,259.2	3,525.0
Cost of goods and services sold	-850.9	-608.6	-2,588.8	-1,984.8	-3,317.6	-2,713.5
Gross profit	247.7	201.8	728.0	597.8	941.6	811.4
Sales and marketing expenses	-106.3	-88.0	-325.4	-285.5	-423.6	-383.8
Administration expenses	-76.4	-60.9	-225.0	-186.6	-292.9	-254.5
Items affecting comparability	-4.9	-	-5.7	-1.2	-11.5	-6.9
Operating profit/loss (EBIT)	60.1	52.9	171.9	124.6	213.6	166.2
Net financial items	-4.0	-3.2	-13.7	-10.1	-17.9	-14.3
Profit before tax	56.1	49.6	158.2	114.5	195.6	151.9
Income tax
Comprehensive income for the period	-12.1 43.9	-12.3 37.4	-31.2 127.0	-28.3 86.2	-37.7 158.0	-34.7 117.2
Other comprehensive income Items which may be reveresed later in the income statement
Change of hedging reserve (net investment in foreign operations)	7.6	1.8	23.2	8.3	26.5	11.5
Tax effect of change of reserve (net investment in foreign operations)	-1.6	-0.4	-4.8	-1.7	-5.5	-2.4
Translation differences from remaining operations	7.0	2.6	20.9	15.6	28.3	23.0
Total items which may be reversed later in the income statement	13.0	4.0	39.4	22.2	49.3	32.1
Total comprehensive income for the period	56.9	41.4	166.3	108.4	207.2	149.3
Comprehensive income attributable to:
Shareholders of the Parent company	43.8	37.4	126.9	86.3	157.8	117.1
Holdings without a controlling influence	0.1	-0.0	0.1	-0.1	0.2	0.0
Total comprehensive income for the period attributable to:
Shareholders of the Parent company	56.7	41.4	166.0	108.3	206.8	149.1
Holdings without a controlling influence	0.2	-0.0	0.3	0.0	0.5	0.2
Data per share¹	Jul-Sep 2022	Jul-Sep 2021	Jan-Sep 2022	Jan-Sep 2021	Rolling 12 months	Jan-Dec 2021
Earnings per share for the period attributable to the shareholders of
the parent company, SEK	1.60	1.36	4.62	3.14	5.75	4.27
Equity per share attributable to the shareholders of the parent
company, SEK	30.51	24.42	30.51	24.42	30.51	25.88
Cash flow from operations per share, SEK	-2.86	-5.20	3.27	1.76	12.57	11.06
Number of outstanding shares at end of period	27,454,851	27,454,851	27,454,851	27,454,851	27,454,851	27,454,851
Weigthed average number of outstanding shares	27,454,851	27,454,851	27,454,851	27,454,851	27,454,851	27,454,851

1) Proact has a long-term performance-based share program that could give rise to dilution of maximum 1.34 percent. The comparative figures have been adjusted for the 1:3 share split that was implemented in May 2021.

Consolidated Balance Sheet in brief

	Sep 30	Sep 30	31 Dec
Amounts in SEK million	2022	2021	2021
ASSETS
Fixed assets
Goodwill	991.0	649.8	820.7
Other intangible fixed assets	252.6	126.0	224.9
Tangible fixed assets	339.1	292.2	322.9
Other long-term receivables	448.6	409.9	412.3
Deferred tax receivables	22.6	18.0	16.9
Current assets
Inventories	53.2	17.6	15.6
Trade and other receivables	1,290.2	934.1	1,117.8
Cash and cash equivalents	284.9	320.6	463.9
Total assets	3,682.3	2,768.3	3,395.0
EQUITY AND LIABILITIES
Equity attributable to the shareholers of the parent company	837.6	670.4	710.6
Equity attributable to holdings without a controlling influence	3.5	3.1	3.3
Total equity	841.1	673.5	713.9
Long-term liabilties
Long-term liabilties, interest-bearing	689.1	407.7	620.8
Long-term liabilties, non-interest-bearing	573.5	471.4	496.3
Deferred tax liabilities	74.0	39.2	69.2
Short-term liabilities
Short-term liabilities, interest-bearing	151.1	131.4	133.3
Short-term liabilities, non-interest-bearing	1,353.6	1,045.2	1,361.5
Total equity and liabilities	3,682.3	2,768.3	3,395.0

Consolidated statement of changes in Equity

	Sep 30	Sep 30	31 Dec
Amounts in SEK million	2022	2021	2021
At beginning of period	713.9	605.0	605.0
Total comprehensive income for the period	166.3	108.4	149.3
Dividend	-41.2	-41.2	-41.2
Dividend to holdings without a controlling influence	-	-	-
Financial liability to holdings without a controlling influence	-	-	-
Share savings and share option programs	2.1	1.3	0.8
At end of period	841.1	673.5	713.9

Holdings without a controlling influence: Proact Lietuva UAB 26.14 percent and Proact Czech Republic, s.r.o. 14.7 per cent.

Consolidated Cash Flow Statement in brief

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	2022	2021	months	2021
Cash flow from operating activities before changes in
working capital	108.1	96.6	309.0	241.6	421.0	353.6
Cash flow from changes in working capital	-186.5	-239.3	-219.3	-193.4	-75.9	-50.0
Cash flow from operating activities	-78.4	-142.7	89.8	48.2	345.1	303.6
Cash flow from investing activities	-132.3	-10.6	-155.3	-111.9	-468.6	-404.6
Cash flow from financing activities	-35.3	-28.1	-131.5	-99.1	62.7	74.7
Total cash flow for the period	-246.0	-181.4	-197.1	-162.8	-60.6	-26.3
Cash and cash equivalents at beginning of the period	528.0	499.8	463.9	468.3	320.6	468.3
Currency translation difference in cash and cash
equivalents	2.9	2.2	18.1	15.0	25.0	21.9
Cash and cash equivalents at end of the period	284.9	320.6	284.9	320.6	284.9	463.9

Key ratios

	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Rolling 12	Jan-Dec
Amounts in SEK million	2022	2021	2022	2021	months	2021
Total revenue	1,098.6	810.4	3,316.8	2,582.6	4,259.2	3,525.0
of which attributable to acquisition and divestments	82.0	61.6	234.0	139.3	337.1	254.5
of which currency effects	34.2	3.9	97.9	-48.1	102.1	-43.9
Total revenue, organic	950.6	744.9	2,931.1	2,491.4	3,766.2	3,314.3
Organic growth total revenue, %	21.2	-9.2	15.6	-6.0	7.2	-8.1
System revenue	629.2	443.6	1,948.8	1,486.5	2,464.7	2,002.4
of which attributable to acquisition and divestments	40.1	44.2	101.5	90.5	157.9	154.6
of which currency effects	18.7	3.2	53.3	-22.4	57.2	-18.5
Total system revenue, organic	570.3	396.2	1,794.0	1,418.4	2,249.6	1,866.2
Organic growth system revenue, %	33.9	-16.1	23.0	-10.0	8.6	-14.0
Services revenue	469.1	366.5	1,367.0	1,094.0	1,792.3	1,519.4
of which attributable to acquisition and divestments	77.8	18.5	194.8	47.4	240.1	98.4
of which currency effects	15.4	0.7	44.5	-25.7	44.8	-25.3
Total service revenue, organic	375.9	347.3	1,127.6	1,072.3	1,507.4	1,446.3
Organic growth service revenue, %	5.9	0.1	5.6	-0.3	5.2	0.8
EBITDA	113.1	97.3	325.9	257.6	416.9	348.6
EBITDA margin, %	10.3	12.0	9.8	10.0	9.8	9.9
Depreciation and write-down on tangible assets	-39.8	-37.5	-118.7	-111.3	-158.6	-151.2
EBITA	73.4	59.8	207.1	146.3	258.3	197.5
EBITA margin, %	6.7	7.4	6.2	5.7	6.1	5.6
Amortization and write-down on intangible assets	-13.3	-7.0	-35.2	-21.7	-44.7	-31.2
EBIT	60.1	52.9	171.9	124.6	213.6	166.2
EBIT marginal, %	5.5	6.5	5.2	4.8	5.0	4.7
Profit before tax	56.1	49.6	158.2	114.5	195.6	151.9
Net margin, %	5.1	6.1	4.8	4.4	4.6	4.3
Profit after tax	43.9	37.4	127.0	86.2	158.0	117.2
Profit margin, %	4.0	4.6	3.8	3.3	3.7	3.3
Equity	841.1	673.5	841.1	673.5	841.1	713.9
Total assets	3,682.3	2,768.3	3,682.3	2,768.3	3,682.3	3,395.0
Equity ratio, %	22.8	24.3	22.8	24.3	22.8	21.0
Capital turnover rate, times¹	-	-	-	-	1.3	1.1
Return on equity, %¹	-	-	-	-	20.9	17.8
Financial costs included in net financial items	5.7	4.5	17.6	14.0	33.8	19.8
Capital employed	1,681.3	1,212.5	1,681.3	1,212.5	1,681.3	1,467.9
Return on capital employed, %¹	-	-	-	-	15.9	13.4
Investments in fixed assets	254.6	46.7	312.7	225.4	638.0	550.7
Profit before tax per employee, SEK thousands	47.6	48.7	137.8	113.5	173.6	147.9
Average number of employees	1,178	1,019	1,148	1,008	1,127	1,027

1) Calculated only for full year and rolling 12 months.

For a five-year summary, see Note 2. For definitions of key ratios, see Annual Report 2021. The key ratios that Proact reports and monitors the business by are common key ratios used by the industry and by companies listed on Nasdaq Stockholm.

Parent Company's Income Statement, in brief

	Jan-Sep		Jan-Dec
Amounts in SEK million	2022	2021	2021
Net sales	100.4	76.9	105.2
Cost of goods and services sold	-	-	-
Gross profit	100.4	76.9	105.2
Administration expenses	-102.4	-91.0	-120.0
Operating profit	-2.0	-14.1	-14.8
Net financial items	58.5	29.5	44.2
Profit efter financial items	56.5	15.4	29.4
Provisions	-	-	10.0
Profit before tax	56.5	15.4	39.4
Income tax	-4.4	1.4	-0.9
Comprehensive income for the period	52.1	16.8	38.5

Parent Company's Balance Sheet, in brief

	Sep 30	Sep 30	31 Dec
Amounts in SEK million	2022	2021	2021
ASSETS
Fixed assets	1,204.5	832.9	1058,7
Current assets	111,3	108.8	119,5
Total assets	1,315.7	941.7	1,178.3
EQUITY AND LIABILITIES
Restricted Equity	81.5	80.1	80.5
Non-restricted Equity	325.3	292.5	313.2
Equity	406.8	372.6	393.7
Long-term liabilities	518.7	267.7	495.1
Short-term liabilities	390.2	301.5	289.4
Total equity and liabilities	1,315.7	941.7	1,178.3

Explanatory information

Note 1. Accounting principles

The consolidated accounts for the interim report have been compiled in accordance with IAS 34 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 Group applies the same accounting principles as those described in the annual report for 2021,

Financial instruments

Proact's financial instruments consist of derivatives, accounts receivable, cash and cash equivalents, accounts payable, accrued trade creditors and interest-bearing liabilities. Derivative instruments are recognized in the balance sheet as per the contract date and are valued at fair value, both initially and in subsequent revaluations. All derivatives are reported continuously at fair value with the value changes reported in the statement of comprehensive income within

cost sold for those derivatives that are linked to accounts payable and financial items for the derivatives that are linked to financial leasing contracts. Derivatives are valued at fair value within level 2, i.e. fair value determined on the basis of valuation techniques with observable market data, either directly (as price) or indirectly (hence 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 amortized cost, which includes accounts payable, accrued supplier costs and liabilities to credit institutions. Liabilities to credit institutions run at variable interest rates and reported interest rates are on a par with current interest on liabilities to credit institutions and other financial assets and liabilities with short maturities. Based on this, the book values of all financial assets and liabilities are judged to be a reasonable estimate of fair value

Note 2. Five-year summary

	Oct-Sep	Jan-Dec	Jan-Dec	Jan-Dec	Jan-Dec
Amounts in SEK million	21/22	2021	2020	2019	2018
Total revenue	4,259.2	3,525.0	3,633.1	3,407.9	3,317.7
EBITDA	416.9	348.6	369.6	271.7	231.1
EBITDA margin, %	9.8	9.9	10.2	8.0	7.0
EBITA	258.3	197.5	216.7	134.2	200.5
EBITA margin, %	6.1	5.6	6.0	3.9	6.0
EBIT	213.6	166.2	182.1	105.4	164.5
EBIT margin, %	5.0	4.7	5.0	3.1	5.0
Profit before tax	195.6	151.9	167.7	101.7	167.8
Net margin, %	4.6	4.3	4.6	3.0	5.1
Profit after tax	158.0	117.2	132.3	80.2	127.3
Profit margin, %	3.7	3.3	3.6	2.4	3.8
Equity ratio, %	22.8	21.0	20.7	18.3	21.2
Capital turnover rate, times	1.3	1.1	1.3	1.3	1.6
Return on equity, %	20.9	17.8	23.4	16.1	29.8
Return on capital employed, %	15.9	13.4	17.1	13.2	29.5
Dividend to shareholders of the Parent company¹	41.2	41.2	22.9	38.0	34.3
Investments in fixed assets	638.0	550.7	269.1	440.7	83.8
Financial costs included in net financial items	33.8	19.8	20.7	11.3	3.9
Profit before tax per employee, SEK thousands	173.6	147.9	172.3	122.0	210.5
Average number of employees	1,126.7	1,027.3	973.4	833.5	797.2
Earnings per share for the period, SEK²	5.75	4.27	4.80	2.92	4.62

1) Relates to the year in which the dividend was executed. For the fiscal year 2021 a dividend of SEK 1.50, total SEK 41.2 million, was made.

2)Calculated on the basis of the weighted average number of outstanding shares. The comparative figures have been adjusted for the 1:3 share split that was implemented in May 2021. Proact has long-term performance-based share programs that could give rise to dilution of maximum 1.34 per cent.

Note 3. Acquired company's net assets at the time of acquisition

	Jul
sepago GmbH	2022
Amounts in SEK million	Amount
Intangible fixed assets	0.0
Tangible fixed assets	18.0
Financial fixed assets	0.2
Trade and other receivables	39.4
Cash and cash equivalents	5.0
Long-term liabilties	-
Accounts payable and other short-term liabilities	-56.0
Net identifiable assets	6.7
Goodwill	118.2
Fair value adjustment acquired intangbile assets	49.8
Deferred tax related to acquired assets	-14.7
Purchase price	160.0
Deduct:
Acquired cash	-5.0
Deferred payment of part of consideration Own shares used in acquisition	-39.7-
Net outflow of cash	115.3

	Oct
Ahd GmbH & Co. KB	2021
Amounts in SEK million	Amount
Intangible fixed assets	10.9
Tangible fixed assets	33.5
Financial fixed assets	-
Trade and other receivables	40.0
Cash and cash equivalents	14.0
Long-term liabilties	-
Accounts payable and other short-term liabilities	-66.3
Net identifiable assets	32.0
Goodwill	174.4
Fair value adjustment acquired intangbile assets	93.6
Deferred tax related to acquired assets	-27.7
Purchase price	272.3
Deduct:
Acquired cash	-14.0
Deferred payment of part of consideration Own shares used in acquisition	--
Net outflow of cash	258.4

The acquisition relates to the purchase of 100 per cent of the shares and votes in sepago GmbH. The acquisition was completed on July 1, 2022.

Total acquisition costs charged to earnings in 2022 amounts to SEK 4.0 million.

Of the total purchase price of SEK 160.0 million, SEK 120,3 million was paid in cash at the time of acquisition and the remaining deferred payment will be paid out over a period of 2,5 years provided that sepago reaches the expected EBITA and established operational targets.

In the acquisition, the purchase price exceeded the recognised assets of the acquired business, which resulted in a purchase price allocation giving rise to intangible assets.

Goodwill in this acquisition is motivated by the fact that the acquisition is an important part of Proact's growth strategy with the ambition to broaden the offering and expand its presence in the company's key markets. The acquisition of sepago strengthens Proact's position on the German market and expertise in delivering public cloud transformation and IT consultancy capabilities to large and medium-sized enterprise segment on the German market, which are in line with the company's long-term strategy to grow within hybrid cloud services.

sepago, founded in 2002, is a privately-owned company with 82 employees based in Germany with its head office in Cologne. The company has a customer base and an offer that complements Proact's well.

The acquisition was completed on July 1, 2022, and for the year 2022 sepago has contributed with SEK 27,0 million in revenues and SEK -3,5 million in operating profit. If Proact had owned sepago for the full year, sepago would have contributed with approximately SEK 90.5 million to the Group's revenues and with approximately SEK -5,6 million in operating profit.

The acquisition relates to 100 percent of the shares and votes in ahd GmbH & Co KB. The acquisition was completed on October 26, 2021. Total acquisition costs charged to earnings in 2021 amounted to SEK 5.7 million.

The purchase price of SEK 272.3 million was paid in cash. In the acquisition, the purchase price was higher than the recognised assets of the acquired business, which resulted in the acquisition analysis giving rise to intangible assets.

During third quarter 2022, the balance sheet items for the purchase price allocation were determined definitively, see table.

The main difference between preliminary and definitive values for the purchase price allocation is an increase in goodwill of SEK 13.0 million with a corresponding decrease in other receivables. The change had no impact on the result.