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Proact - Feedback from ABGSC's Investor Days

04 december 2024

<a id="bm-comp-5376b9eb-e87c-4142-ab06-43a59219134b" name="bm-comp-5376b9eb-e87c-4142-ab06-43a59219134b" class="BMCustomAnchor"></a><table><tr><td bm-component-id="5376b9eb-e87c-4142-ab06-43a59219134b" style="vertical-align: top; width:100.000000%;"><ul><li>CEO highlighted an accelerating market for mission-critical IT infrastructure</li><li>Main drivers are cybersecurity, cloud, AI and Microsoft-related consulting</li><li>M&amp;A on the agenda and there is plenty of financial headroom</li></ul></td></tr></table><a id="bm-comp-c154c5e4-da37-48a9-8c5d-c01f74ec386a" name="bm-comp-c154c5e4-da37-48a9-8c5d-c01f74ec386a" class="BMCustomAnchor"></a><table><tr><td bm-component-id="c154c5e4-da37-48a9-8c5d-c01f74ec386a" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Positive message on demand and market growth</h3><p>Today we hosted Proact's CEO Jonas Hasselberg at ABGSC's Investor Days. Mr Hasselberg highlighted Proact's relevance to large and medium-sized enterprises, with its highly skilled workforce and partnerships with leading IT infrastructure vendors as key competitive advantages driving growth. In terms of end markets, the message from September (<a href="https://abg-portal.bluematrix.com/links2/html/5a603eef-4af8-47a4-8630-046c9c475b7e?firmId=45691" target="_blank">link</a>) remained that Germany was slightly weaker than the rest, followed by the UK, with the Nordics likely to be the strongest at the moment. The main drivers are demand for cybersecurity solutions, cloud, AI and Microsoft-related consulting. Summing up the market situation, Mr Hasselberg commented that the market is currently accelerating, coming out of somewhat more volatile years during the pandemic and the inflationary environment. Proact is targeting 10% annual growth, of which 5% should be organic, which we believe is a level that should be sustainable in the short term (9% in Q3 and 4% YTD).</p><h3 class="bm-h3">M&amp;A capacity is in place and opportunities should arise</h3><p>Proact also has a strategy of making acquisitions and has historically made 1-2 acquisitions per year. However, the most recent acquisition was in June 2022, which has resulted in Proact building up a net cash position of SEK 175m, providing ample financial headroom for acquisitions, combined with annual dividends and an ongoing buyback programme. Mr Hasselberg says that the overall M&amp;A market was somewhat on hold until H1'24, but has started to wake up after the summer. Proact is looking for consulting targets with a cloud service offering and within existing geographies, which we believe makes both strategic sense (in terms of driving margins towards the 8% margin target) and should limit risks.</p></td></tr></table><a id="bm-comp-89739c09-8afa-410f-8409-a23ee71e0911" name="bm-comp-89739c09-8afa-410f-8409-a23ee71e0911" class="BMCustomAnchor"></a><table><tr><td bm-component-id="89739c09-8afa-410f-8409-a23ee71e0911" style="vertical-align: top; width:100.000000%;"><table id="bm-img-5b362bfc-9f3f-4952-b1c3-f9fa795dd029" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Quarterly organic growth and R12m adj. EBITA margin</td></tr><tr><td><img bm-img-encrypt="5b362bfc-9f3f-4952-b1c3-f9fa795dd029" bm-img-original-height="488" bm-img-original-width="793" bm-img-svg="image:image_upload/83795_f81dbded-d7d3-49df-8a92-553f1a5c31e5.svg" bm-img-width-hint="72.63%" id="bm-id-5b362bfc-9f3f-4952-b1c3-f9fa795dd029" src="https://abgsc.bluematrix.com/images/image_upload/83795_f81dbded-d7d3-49df-8a92-553f1a5c31e5_528.png" svg="/nas/web/clients/abgsc/images/image_upload/83795_f81dbded-d7d3-49df-8a92-553f1a5c31e5.svg" width="528" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td></tr></table><a id="bm-comp-bebe1b1d-e96a-4480-92da-5230efb6ef12" name="bm-comp-bebe1b1d-e96a-4480-92da-5230efb6ef12" class="BMCustomAnchor"></a><table><tr><td bm-component-id="bebe1b1d-e96a-4480-92da-5230efb6ef12" style="vertical-align: top; width:100.000000%;"><table id="bm-img-2141b482-0f84-417a-9109-055c6095dce7" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">R12m sales development, system and services</td></tr><tr><td><img bm-img-encrypt="2141b482-0f84-417a-9109-055c6095dce7" bm-img-original-height="495" bm-img-original-width="793" bm-img-svg="image:image_upload/83795_a93c1b46-1204-420d-9b7e-135cbc5fd5d7.svg" bm-img-width-hint="72.63%" id="bm-id-2141b482-0f84-417a-9109-055c6095dce7" src="https://abgsc.bluematrix.com/images/image_upload/83795_a93c1b46-1204-420d-9b7e-135cbc5fd5d7_528.png" svg="/nas/web/clients/abgsc/images/image_upload/83795_a93c1b46-1204-420d-9b7e-135cbc5fd5d7.svg" width="528" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td></tr></table><a id="bm-comp-b1b99c5c-df64-407f-8856-47e223164249" name="bm-comp-b1b99c5c-df64-407f-8856-47e223164249" class="BMCustomAnchor"></a><table><tr><td bm-component-id="b1b99c5c-df64-407f-8856-47e223164249" style="vertical-align: top; width:100.000000%;"><table id="bm-img-c646474b-755a-4b70-b9b5-946cf6c785b3" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Sales and adj. EBITA margin</td></tr><tr><td><img bm-img-encrypt="c646474b-755a-4b70-b9b5-946cf6c785b3" bm-img-original-height="482" bm-img-original-width="793" bm-img-svg="image:image_upload/83795_140572d3-9c13-4d0c-bfe1-1fa5d6e9e0ae.svg" bm-img-width-hint="72.63%" id="bm-id-c646474b-755a-4b70-b9b5-946cf6c785b3" src="https://abgsc.bluematrix.com/images/image_upload/83795_140572d3-9c13-4d0c-bfe1-1fa5d6e9e0ae_528.png" svg="/nas/web/clients/abgsc/images/image_upload/83795_140572d3-9c13-4d0c-bfe1-1fa5d6e9e0ae.svg" width="528" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td></tr></table>

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