Proact IT : Q4 presentation for anlysts

www.proact.eu

Summary Q4 2020

11 February, 2021

Jonas Hasselberg

CEO and [e-mail]

Linda Höljö

[e-mail]

Agenda

• • Proact introduction

• • Quarter in brief

• • Key developments

• • Financial results

• • Summary

Jonas Hasselberg CEO and President

Linda Höljö CFO

Businesses across all industries are in "state of transformation".

Data is the key to this transformation.

Long-term CIO Agenda

• - Generate business value and enable innovation

• - Increase flexibility, speed and availability

• - Ensure cost-efficiency

• - Integrate and build a multicloud environment

• - Drive technical harmonisation & modernisation

• - Ensure data security and compliance

Corona impact on CIO Agenda

• - Need for accelerated digitalisation

• - New security threats

• - New strains on IT due to remote working

• - Enabling modern workspace

Key markets deep dive

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0

Meeting our customers needs

Data management specialist helping our customers store, connect, protect, secure and enable them to drive value through data.

Customer example 2020

Fortnox

• • Business value through a new flexible and scalable solution using multicloud infrastructure and cloud services - with seamless integration

• • Ability to add more customers to their own platform with enhanced security and features

• • New abilities to drive own SaaS platform innovation

Customer example 2020

NHS Blood & Transplant

• • Critical data center infrastructure to improve donor operations in UK

• • Private Cloud architecture based on hyper-converged solutions enabling agility and scalability

• • Design, delivery and support services aligned with customer's business challenges

Quarter in brief - strong results and growth in Cloud contracts

• + Adj EBITA up 36% to 66 (49) MSEK

• + Improved EBITA margin to 6.8% (4.9%)

• + Cloud contract value of 142 (97) MSEK

• + 9% up in Cloud revenue

• + 3% growth of Services

• + Proposed dividend of 4.50 SEK / share

Key developments in Q4

October

• • Acquisition of Cetus Solutions Ltd in UK

• • New partner level with Nvidia in data management and AI

November

• • Partner recognition from Dell (Service Delivery Excellence)

December

• • Partner award from NetApp (Flash partner of the year)

• • Partner award from NetApp (Solution partner of the year)

• • Launched new version of PHC, our own hybrid cloud service

• • Customer pilot of new SD-WAN network service

• • Re-branding and operational integration of PeopleWare

Financial development

Income Statement - Highlights Q4 2020

TOTAL REVENUE	SYSTEM SALES	SERVICES SALES
GROWTH -1%	MSEK 982	GROWTH -3%	MSEK 617	GROWTH 3%	MSEK 365

Adj. EBITA
GROWTH 36%	MSEK 66.4	% 6.8%

Adj. PROFIT BEFORE TAX
GROWTH 58%	MSEK 53.6	% 5.5%

Revenue development

• • Revenue decline of -1%

  • • -1% organically

  • • Full year growth of 7% (1% organically)

• • Services growth 3%

  • • 4% organically

  • • Services share of 40% for full year (37% in Q4)

• • Systems decline of -3%

  • • -3% organically

• • Cloud revenue growth of 9%

  • • 7% organically

• • New cloud contracts of 142 MSEK (97)

  • • Full year 331 MSEK (341)

Profitability development

• • Adjusted EBITA of 66.4 MSEK (48.8)

  • • Margin of 6.8% (4.9%)

  • • Growth of 36%

• • Gross margin declining somewhat

  • • Services gross margins slightly lower

• • SG&A costs reducing by 18% for comparable units

  • • Cost savings program

  • • Limited travel and sales related costs due to covid-19

  • • Lower restructuring costs

• • EPS improving

  • • Primarily due to improved EBITA

BU Nordics

• • Revenue decline of -1%

  • • Systems -1%

  • • Services 2%

• • EBITA margin decreasing to 6.5% (7.2%)

  • • EBITA of SEK 32.7 (36.5) million

  • • Reduced SG&A costs of 13%

BU UK

• • Revenue growth 12%, 4% organically

  • • Systems 30%, 11% organically

  • • Services -2%, -2% organically

  • • Cetus included in numbers from November 1st

• • EBITA margin increasing to 7.0% (4.2%)

  • • EBITA of SEK 11.2 (6.1) million

  • • Reduced SG&A costs of 10% organically

BU West

• • Revenue decline of 8%

  • • Organic decline of -8%

  • • Systems -27%

  • • Services 10%

  • • Covid-19 impacting organic growth

• • EBITA margin increasing to 3.1% (2.3%)

  • • EBITA of SEK 8.6 (7.0) million

  • • Reduced SG&A costs of 14% for comparable units

  • • Previously implemented improvement measures giving effects, partly offset by higher integration costs for PeopleWare

BU East

• • Revenue decline of -23%

  • • Systems -32%

  • • Services -3%

  • • Covid 19 impacting growth

• • EBITA margin increasing to 12.2% (5.4%)

  • • EBITA of SEK 5.6 (3.2) million

  • • Reduced SG&A costs of 12%

Cash flow in Q4

• • Positive cash flow from current operations of 266 MSEK

• • Positive change in working capital

• • Fixed assets; Proact Finance -14 MSEK

• • Acquisition of Cetus (net of acquired cash); -45 MSEK

• • Repayment of Leasing Liabilities; -33 MSEK

• • Dividend 2.50 SEK/share

• • Strong cash position of 468 MSEK

Liquid Funds September 30, 2020 396

Cash-flow from current operations 266

Current operations 91

Change in working capital 175

Cash-flow from investment activities -87

Fixed assets -42

Acquisition of subsidiary -45

Cash-flow from financial activities -88

Repayments on Leasing Liabilities -33

Changes in bank loans and overdraft facilities -11

Payment deferred purchase sum PW -23

Dividend -23

Other changes 2

Change in liquid funds 90

Currency translation difference in liquid funds Liquid Funds December 31, 2020

-18 468

Cash flow January-December 2020

• • Positive cash flow from current operations

• • Positive change in working capital; 106 MSEK

• • Fixed assets; Proact Finance -50 MSEK

• • Repayment of Leasing Liabilities;

  -133 MSEK

• • Strong cash position of 468 MSEK

Liquid Funds December 31, 2019 373

Cash-flow from current operations 468

Current operations 362

Change in working capital 106

Cash-flow from investment activities

-149

Fixed assets -105

Acquisition of subsidiary -48

Other 4

Cash-flow from financial activities

Repayments on Leasing Liabilities

Changes in bank loans and overdraft facilities

Payment deferred purchase sum PW

Change in liquid funds

Dividend

Other

Currency translation difference in liquid funds

-193 -133-11-23-23-3126 -31

Liquid Funds December 31, 2020

468

Balance sheet

• • Equity ratio of 21%

• • Cash position of 468 MSEK

• • Net cash of 22 MSEK, improved since end of Dec 2019

• • Unutilized overdrafts of 198 MSEK for daily operations

• • Unutilized three-year revolving credit facility of 138 MSEK

(MSEK)

2020 Dec 31

2019 Dec 31

Total Assets whereof Goodwill whereof Intangible fixed assets whereof Accounts receivables

112 93

541 613

Equity

605 526

Equity ratio

21% 18%

Cash and bank deposits Bank loan, overdraft facilities Net cash (+) / Net debt (-) excl. leasing liabilities

Leasing liabilities

468 373

-212 -231

257 142

Net cash (+) / Net debt (-) incl. leasing liabilities

Bank overdraft facilities, unutilized

Bank overdraft facilities, total

SALES GROWTH
TARGET >10%	OUTCOME 7%

EBITA MARGIN
TARGET 8%	OUTCOME* 6.0%

NET DEBT/EBITDA
TARGET <2	OUTCOME -0,06

ROCE
TARGET >25%	OUTCOME 17.1%

DIVIDEND
TARGET 25-35%	OUTCOME** 31%

*Adjusted for items affecting comparability ** Proposed to shareholders for decision at EGM on May 6th

Summary

• • Record EBITA results

• • Strong Cloud total contracts value

• • Successful acquisition of Cetus Solutions Ltd.

• • Short-term impact of pandemic remains uncertain

Thank you

www.proact.eu