Proact It Group Stock

Hi, everyone, and welcome to our Q2 report presentation. My name is Christopher Ramset, and I am Investor Relations and Communications Manager here at Proact. With me today are Magnus Lonn, President and CEO; and Asa Regen Jansson, CFO, who will walk you through an introduction to Proact followed by a quarterly update, financials and lastly, our closing remarks. [Operator Instructions]

With that, I hand over to you, Magnus.

Thanks, Christopher, and welcome, everyone, and it's glad to see that we have a bunch of dedicated investors and shareholders on the meeting here. So as Christopher said, I will walk through a short introduction of product and what we are doing and how we are earning our money. And then, of course, we will, after that, into our quarterly numbers. and then also will guide us through, and then we will end up with questions and so forth.

So Proact, we are tech company that has been around for 30-plus years and is founded in Sweden. Throughout the year, we have really specialized what we are doing. We are super good and great in something that everyone is needed these days. We are working with protecting data and helping our customers to store data. That is our core business and focus what we started the company go with 30-plus years and what we are still doing. And over the years, we, of course, have expanded this wheel, but we remain really solid in that.

And if you think about this, this is exactly what is happening now with a global AI scale out and things like that. This is the core of what we're doing and the sort of essence of product Today, we are operating in 12 different European countries. You can see them on the collar for map here. And our sort of offering. I will go into that a little bit more, is part of that we are doing in system sales, and then we have a lot of recurring revenue coming from our services.

You also see in the graph here that we are one of a growth journey, both from a top line, but also our results -- and this is something that we have been doing good for the last year and something we will focus even more going forward. And as you see in the picture, down to the left there, for us, it doesn't really matter where the data is. We are true experts in handling if data is in our data centers. if it's at a customer data center or if it's at one of the hyperscalers. So we are really into data. That is what Proact really, really good at.

So if you take the next slide, Christophe. So when it comes to our revenue and how we earn our result is that roughly half of our business comes from system sales, as we call it. That means in practice that we are working super close with our customer in guiding, advising them on how they should build and create critical infrastructure, in practice that could be storage from example, Net up Odell. It can be an NVIDIA GPU that should be part of an AI solution it could be a backup solution and this is something that we are really, really working tight with our customers and are advising them.

And the solutions that we have provided, it's more related to enterprise and large companies, and it's part of the critical infrastructure that is needed. On everything we sell. We also have the expertise that we can provide our own support, meaning that if something breaks, then we have our own staff that is helping the customer to get it up and running again. This is our -- what we call our support service. The good thing with the support service is that it's off a long contract. It's often 3 to 5-year it's upfront payment, and we are there and have a close relationship with the customer throughout this. And this is also some of the key things for us a product that we are building long customer relationship.

There is one thing also I forgot to mention around our system business and that is that given that we are working with larger customers and we do revenue recognition when we have delivered the stuff our system business can vary from quarter-to-quarter. So when EvaluateProAct and our system business, I think it's super important to see it over a longer term because sometimes a system deal can be recognized in the quarter or a few days after. So it can be a little bit variance.

Also, as I said in the beginning, everything we sell, we can also provide that as a service to our customer. And this is what we call our managed cloud service. This is a key area for us because this is recurring revenue. We are focusing a lot around this one because -- and I will come back to that when it comes to memory prices and things like that in the market. We see this as an area where we see continued good growth and good momentum in.

And I always say this we would be not doing anything unless we had really great consultants that are out helping our customers with really high competence level. So for us, the combination of all of these 4 revenue streams are often in close connection to each other, and they are strengthening each other and that also is a good way for us to be very close to our customer and help them.

So if you take the next slide, Chistopher. So if you look into the customer base that we have here at Proact and if you take one step back, is that the solution and the problem that we are helping our customer to solve is generic because as the world have developed today, I can't come up with any company out there that doesn't have an IT system or a core critical infrastructure as a key part of their business model. Therefore, our solution and the sort of the spread of our customer is generic. From a risk perspective, I think this is a really strong position for Proact because we are not dependent on any specific sector.

We you're operating in many sectors, and that also creates a sort of robustness when it comes to our performance. The key thing for us, and that I also said that it often starts with our support and building long customer relationship is that we have customers that are very satisfied in what we are doing, and they are really valuing our competence. And I think that is a key thing for building a company and being really good at it and foremost, also be able to sell and get value out of what we are doing, and that is that you should be focusing on solving the complex and hard problems that our customer is focusing upon. And that is what we are doing on a day-to-day basis.

So the next slide Christopher. So if you zoom out a little bit and you look into the trends, I think you all on this call are well aware about the global AI scale-out that is happening. Data center and creating the ability for companies to grow and handle their critical infrastructure. It's a trend that has been ongoing for a while, and I think that is something that will continue many years to come. And this is Proact's core business.

So we are really well positioning here. Another thing that has actually been accelerating, and this is also coming a lot from the U.S. and also how the macro politic environment has developed over the years is also the demand for severenity and also making sure that our customer owns the data and that they are certain about where the data is stored and that they can sort of making sure that it doesn't spread or someone else can turn off their business because that, as I said before, critical data is a key thing for our customer and becoming more and more relevant to build a robust environment.

So this is a trend that we are working with, and we see more and more. And then in general, that amount is increasing. We, as individual and companies are generating more and more data. And if you have data, that's the sort of the foundation to be and creating value out of AI because if you don't have good data and if you don't have control of your data, then it's a really hard thing for an AI to create value out of it.

And then the fifth trend that is unfortunately becoming more and more relevant is the security and cybercrime resilience. Given that we are becoming more and more digitalized, a lot of unfriendly entities and also criminals are doing a lot to get hold of company's data to destroy and do ransomware attacks and things like that. And therefore, helping our customers protect and far most building an environment where they can restore the data I would say that has become more and more relevant. So all of these sort of 5 trends is something that we will be seeing coming more and more and that we will talk about.

And Proact as a company, this is what we can and what we are doing and what we are helping with our customer. So this is a sort of a short overview of us as a company. to get a little bit more sense of what we're doing. So with that said, I think we should move into our quarterly result and what we have achieved and released earlier today.

So as you saw, Q2 for us was a really great quarter. We delivered a growth of almost over 10%, and we also increased our profit with almost up to 40%, resulting in EBITDA of SEK 105 million. Also I will guide us through the details in a short while, but I just want to zoom in on some highlights before that. you that has been following us for a while know that we -- if you look into the graph here, we have had some long-term down fall in our business units outside the Nordic region.

I am very satisfied with that me and my management team and the work that we have done throughout the spring with a cost efficiency program now actually are paying off. So we see the second quarter in a row where both Central and West are moving in the right directions. U.K. has done a fantastic job and also moving in the right direction. And the Nordic region continues to deliver on a very, very high level. And that is really satisfying to see that we are all business units are back where it should be.

And as you can see in the graph, we have definitely more work to do, and that is something that we are really large shape focused upon and will continue. But we are -- in this quarter, I can definitely say that we are on the right track. Also, in the quarter, we signed up a strategic partnership with True -- this is part of our strategy that's becoming more and more trustworthy and also provide other solutions when it comes to cybersecurity to our customers. A key thing, and we probably will dig into that a little bit later also in the closing and the question is the memory prices. As you all know, due to the global AI scale out, there has been a shortage of memory components. The impact of that is that through the last year, accelerating the second half of the year, the memory prices has increased and becoming more and more expensive.

During the quarter, we have seen that this continues. And what has maybe a little bit more accelerated than I thought was that now delivery time of this component is becoming more and more longer. And that is due to the fact that there is such a high demand in the market. So even if all the factories are producing memory ships as fast as they can, the demand is much higher and then that then that creates this impact of longer delivery times.

During Q1, when we presented that, my best projection was that the memory prices should be at least a good part in 2027. Today, I would say that I'm more convinced that the memory prices will be -- continue be on a high level at least for the full of 2027. And that is that the sort of the demand is still there and increasing. And we have also seen that a lot of customers really realize this and also then continue and buy because we, as I said before, this is critical infrastructure. And it's not easy to sort of not doing these investments because then you can put your company at risk.

Another key thing is that we have been working a lot with our strategy. We have come far on that. We have we'll announce also after the summer that we will have a whole Capital Markets Day I will get back with the dates. But now I think we are in a position where we also have done our homework and that we have a clear view of what we are going to focus upon going forward.

So I think all in all, with that said, I think we deliver on a good quarter according to our expectation and also plans. So if you take the next step -- next slide here, Christopher, This is also just further on to see also how our 4 business units are delivering -- as I mentioned in the beginning, the Nordic region are doing really great work. I'm really pleased to see that the team are really continuing and deliver on a high level.

As I mentioned, U.K., looking back and with the work that Jamie and the team have done, it's really going in the right direction. Worth mentioning is that U.K. on a system side had a weaker quarter, but still, the team managed to sort of continue boost the margin in the right direction. And maybe what I'm most satisfied with is that both our business, both West and Central are back to positive numbers. And if you compare the same quarter last year, I think the work that we have done there is really going in the right direction. But as I said, we are by far ready. And as you can see, we are not at all on the levels where we expect to be. But still the trend is there, and that also gives us a sign that we have been doing the right actions.

Now it's more about doing more of that and then continue to be persistent to made it even better going forward. So I think with that sort of opening in a sort of high-level summary, I am very glad to hand it over to you, Asa.

Thank you, Magnus, and good afternoon, everyone. So let's look a bit closer at the numbers for the quarter, starting with total revenue. Total revenue amounted to SEK 1.286 billion, which is an increase of 9.8% versus last year. driven by continuous strong underlying demand and with contribution from our acquisitions. The organic growth amounted to 8.1%. Where the contribution from the Danish business Consular that was acquired in December last year and the effect from the divestment of the business consultancy business in the Netherlands, had a net impact of 2.1%, slightly offset by a smaller adverse currency effect of 0.4%.

And if we change slide and look into the distribution across the business segments. Systems sales grew by 16.1% year-on-year and 12.2% on a like-for-like basis to SEK 744 million. The development was driven by demand and higher prices, although somewhat halted by the extended delivery times that Magnus talked about. System revenues grew by 9.6% to SEK 174 million on the back of the growth in system sales. Managed Cloud Services declined by 0.8% on reported as well as like-for-like basis. where the growth in NPA and Central was offset by a decline in U.K. and West business units, driven by churn from last year then primarily.

Consulting Services declined by 2.4%, following the divestment of the business consultancy business in April and increased by 3% on an organic basis. Total service revenues amounted to SEK 541 million, which is an increase of 2.1% and 3% on an organic basis and made up for and made up 42% of the total revenue in the quarter. New cloud contracts of SEK 217 million were signed in the quarter, an increase of plus 50% compared to the second quarter last year and are expected to start generating revenue later in the fall or later in '26.

So moving on to the top line development in the business units. Revenue increased in all business units, except for U.K., driven by the system by system sales, together with growth in Nobaand Central Services. The weaker revenue development in the U.K. is largely explained by lower systems revenue or systems volumes following price increases but also an effect from last year's customer churn in Managed Services, as mentioned earlier. Recurring revenue then. I think if we shift slide, thank you, Christopher. Recurring revenue amounted to SEK 444 million in the second quarter which is an increase of 3%, driven by customer support.

Annualized recurring revenue increased to SEK 1.774 billion in the quarter, which is equal to 37% of the total revenue. So I think it's time to move over to the results in the quarter. Adjusted EBITDA amounted to SEK 105 million, which is an increase of 38% year-on-year and equal to an EBITDA margin of 8.2%. The solid earnings development is, as Magnus described earlier, a combination of increased sales and the effects from cost reductions and improved efficiencies which is reflected both in gross profit and in general and administration costs.

Business unit, Western Central have improved profitability significantly compared to last year, now hold the cost structure better adapted to the business, which is a result of last year's efforts and efficiency program. So looking at -- moving on to the capital allocation, how we have utilized the funds that we generate. Started at a net cash position last year and by the end of Q2 2025 of SEK 100 million. Cash flow from operations last 12 months have contributed with close to SEK 450 million, which has been put in use through M&A. The Danish business mentioned in last fall or last December.

A dividend payout in Q2 '26 and shares have been bought back to a value of close to SEK 140 million during the last 12 months. Amortization of leasing amounts to SEK 121 million over the last 12 months. And this takes us to a net debt position of minus SEK 12 million by the year end of Q2, which then includes leasing debts. Total cash amounted to SEK 475 million by the end of Q2 to be compared with SEK 571 million by the end of Q2 25 million.

And Proact has loan facilities totaling approximately SEK 800 million and consisting then of EUR 20 million term loan, which is currently fully utilized and [ SEK ] 600 million revolving credit facility which is currently not in use. So I think that was it from me for this presentation. And now back to Magnus for some closing remarks.

Thank you -- so to wrapping up that this before we start up with some questions. So is that -- I mean, we had a good quarter. and we go both organic and also top line and bottom line. So that's really satisfying. And also that we have done what we said and that the thing that we have done has also resulted in the expected result. And I'm really also pleased with the work that has been done both in West and Central business units. We have a lot more work to do there, but we are on the right path here.

And at the same time that we continue to sort of invest in U.K. and the Nordic area, where we have a really good and strong position. So I think we're also doing the right things here. As I also mentioned there the memory and also the delivery times the best prediction is that this will remain for a longer term. at least during the whole next year. Delivery times will be longer and longer. And as you recall in the beginning, we have a lot of system sales, and that means that this can vary a little bit throughout the quarter.

As I said, during Q1, we expect that end of the year might be a little bit weaker. I still think that Q4 might be a little bit impacted, but it's really hard to sort of predict around this because it depends very much on the delivery times and things like that. And this is something that we will get back to during the coming quarter. But overall, -- and that is super important is that the underlying sort of demand and the business is actually going in the right direction. -- of course, due to that we are spread around different geographical the different countries might have different, let's say, positions and the challenges in the market. But overall, the thing that Proact is working with that securing data, making sure that customer can scale out, that's a very good spot to be in.

And I'm also very glad that we are not AI company delivering software because -- the thing that we are doing will not be replaced with an AI algorithm because we are enabling this -- and this is something that also every company is looking to. So with that, I think I'm really keen on providing you with more updates and far most also to talk more around this with all of you on Capital Market Day later on this year where we can do a more deep dive into our focus and priorities for the coming years.

So with that said, I would like to thank all of our great employees, customers and also shareholder for a fantastic good work during first half of 2026, and we are -- all of us at Proact are looking forward to the second half of the year here. So with that said, I think let's open up for some questions, comments.

Daniel, please Donofromb.

Yes. Perfect. Magnus. I start off with question on system sales and Q3 comments here. Can you quantify approximately how the longer lead times affected system sales in Q2 and potentially how much of sales were pushed into Q3? And should we therefore expect a higher or a lower organic growth rate in system sales in Q3...

It's a really good question, Daniel, and I will give you a generic example. So 1 year ago, the delivery times was counted in weeks. As of today, the delivery times of standard components, especially related to memory components. -- are in the length of months. So -- and of course, that creates this where I also try to guide it a little bit difficult to sort of project what will happen in the coming quarters here. But with that said, -- we also know that we have a good backlog with us into Q3.

And as I said, the demand from our customers is still there, meaning that we will continue to sell -- but then the big question is that when the system sales will be delivered. So exactly how this will play out, we need to come back to. But I hope and I also feel certain around that with the sort of the underlying fundamental here is there. And also with this said, as always, when you have a situation like this in the market, we and also our customer looking into other ways to sort of handling this.

Some of it is that we are looking into more services and utilizing our existing infrastructure and things like that. And -- but yes, so it's a good question, and it's -- I think -- this is something -- and this I also want to be super clear upon. This is a global issue. This is not related to Sweden and our or anything. This is a global issue. Every company on earth are having the same sort of challenges when it comes to memory components and stuff like that as it looks right now.

Okay. That's clear. And you mentioned the backlog here, but you don't report order intake or order book. But if we compare the backlog today than the 1 that you had a year ago when you closed Q2 -- can you say something about how much larger or higher it is today?

I think part of it is true on here. We actually try to guide around our managed cloud service, where we present our TCV, total contract value. And there we -- as Asa mentioned earlier, during this quarter, we had a really good strong sales when it comes to our services, and they grew with 50% compared to last year. When it comes to our system sales, we do not guide that externally. And one of the reasons for it is also due to this delivery times. So I think -- because that is also important to understand even if we have a committed delivery date sometimes from our vendors, that might change. And then we also, as a company, need to adapt and handle that. So right now, it's a moving target, I would say.

Okay. Fair enough. On the 12% organic growth in system sales in Q2, what's kind of the price and volume components in there -- are they both like positive here? Or is prices up more than that, the volume is negative? Or how is the mix?

It's skewed towards prices. Prices are the main driver would say. But as also, as mentioned by Magnus, the underlying demand is there, but the main driver currently and also with the extended lead times of the delivery at this price.

And also, I think to put a more flavor on that is that -- this is a challenge for every company out there because think about this, if you are a CIO running a company and then suddenly, the price for your infrastructure and plan upgrades are becoming super much more expensive. That is a challenge. So we are working a lot with our customer to see how it can help and navigate and find other ways around this. But as I said also earlier, you can't avoid doing investment because as soon as you do that, then you expose your company for risk running critical infrastructure on old hardware is not a good and sound way of running a business.

And we are working with sometimes country super secure systems and it could be health care and it could be bank and so forth. And you don't want to take risks when it comes to that.

I can understand. A couple of more questions. One on the cloud order intake you mentioned -- when I look at first half of it versus last year first half, it's up 40%. So it seems to be strong. Is this a positive trend shift you see in the market? Or is it more a result of comps and a few large orders impacting this?

An for us creating and generating more recurring revenue is a priority. And that comes from our support business and it comes from our managed cloud service business. And this is something that we will continue to focus upon. My strong belief is that if you focus upon something, then over time, you also become better on it, and that goes with us as well. Then of course, when it comes to sales, there will be variation between quarters and things like that. But overall, I think focus and also that we have a good and strong offering for it.

And also think about this that given that it's sometimes hard to -- and also prices has gone up a lot when it comes to memory components and also gives and stuff like that, then buying it as a service could be an attractive alternative also for some of our customers. So we are really trying to meet our customers where they are so that we can work in finding the most an optimal solution for them.

Okay. Okay. That's interesting. And related to that, service sales they grew 3% organically here in Q2. Is that sustainable going forward? Or are there any backlash risks here related to a potential lower growth rate in system ahead? Or how should we think about the services revenues as a whole.

I mean I think we have a good momentum and -- now your question is more about guiding in the future, Daniel, and we try to be as good as possible at it, but I'm also quite keen or not guiding too much. But I think in general, offering that we're doing and the momentum we have is on a good path forward. The thing that we need all to be having in back of our head is the delivery time and how that will impact. And as I guided before, I think Q4 might be a little bit weaker, but that we need to come back with in coming quarters, I would say, because then we know more, and we also know how the market have developed.

What is important for me is also that we continue with work that we have started so that we continue to improve and create momentum in Central West. There, we have a plan and we are following that. So I would say that is the -- some of the key focus, I guess, for us.

That's fair. The final question on the organization here. Number of employees are down roughly 200 people year-over-year versus Q2 last year and the quarter, and we all knew the programs you have gone through. Is this the trough level, you think, given the -- that you are back to growth again now? Or should we expect this figure to come down somewhat more in '26?

I think we were now, Dana, we are more into growing our business -- and with that said, I mean we are always looking into how we can do things better and smarter and things like that. But we do not have any plan to communicate to do any more formal cost efficiency programs. So I think from a sort of number of people, we are on a good level. But I would rather see it that with fantastic, great team we have. We, as a company, can do much more. So I would answer your question in that way.

Perfect. That's good enough. Thank you.

So with that, call, Lorin please.

Hello, can you hear me? .

Yes.

Yes. Just a question on the U.K. I noticed that system sales there were a bit weaker and also the cloud services. Can you talk a little bit about the development there? And if you see any trend shifts and what you're doing to turn the trend.

That's a really good question on the call. Let's start with the system business. And as I also tried to explain in the beginning and that is important when you're following Proact is that we our system business is really dependent on when we deliver it. And that means that if you compare quarter by quarter, it could be varying depending on when they actually delivering happening.

Part of the solution in U.K. is that this quarter, we were not super strong on system sales. But if you also look into -- or maybe I was mentioned it also when it comes to services, U.K. team did a really great quarter selling new services. So we have a lot of high TCV. The thing to monitor there is that -- it will take us 4 up to maybe 2 to 3 months to get new service up and running at the customer, and it contains of hardware and you need to do an onboarding and things like that.

So when it comes to recurring revenue, as also mentioned, the impact of that we will see later this year. At the same time, if we are losing a customer, we often have a long contract, and it also takes a lot of time to offboard the customer, meaning that -- the thing that we see in U.K. now, that actually contract ended maybe a year ago. So it's like -- it's a long drag when you look into it. But most and earliest good indicator, you can see and look into the TCV numbers because that indicates our future sales.

That's clear. And then just a question on Q4 as well. I think you mentioned that might be or it looks like it can be a bit impacted. But is that mainly driven by that do you have a hard time getting supply? Or is it that you don't really see that long in the future in terms of demand?

Yes. I think the key thing for Q4 is most likely delivery times because as I also mentioned earlier now, if the delivery times are counted in months, that means that in everything we sell in Q4 might slip to the next year just pure mathematic and the delivery times. So that's 1 thing. And then that we also had a very strong Q1 with some prebuying. That, I think I'm a little bit more less concerned with now because I think more and more customers realize that the high memory prices is not a short time off. It will remain.

So I think -- what I talked about in Q1, that it will be a prebuy build impact. We still have it, but I think it has been normalized a little bit. But I would say that the delivery times is probably the 1 that we should look after -- Yes.

I have 1 final 1 as well on the revenue what you say the customer base. I see that you're growing -- or basically all of the growth is coming from the public sector this quarter, I think, while the private sector is a bit slower, at least it looks like it I'm just wondering a little bit behind the reasons by it? And if you see private sector growth coming back or improving here in the coming quarters?

There is no real trend that we are seeing. Public sector is a focus area for us. And for example, in U.K. and also in Netherlands and also in Nordic, so it's basically in all our business units. We have a strong foothold there. And given some of the economics in each country, also the public sector are investing a lot. So -- but specific for this quarter, I don't see any trends or I think it's more just a timing impact, I would say.

Okay. Great. Good luck, and have a good summer.

Thanks a lot, one. So with that, do we have any more questions from the audience?

Then I would like to once again wish you all -- our employees and customers and also shareholders for thanks a lot from us at Proact -- we are really looking forward to give you more updates coming quarters and also talk more around our plans and things going forward in our upcoming Capital Market Day later in the year.

So once again, thanks a lot, and have a great summer, everyone, coming up. Bye.

So good morning, everyone, and welcome to our Q1 2026 report presentation. My name is Christopher, and I'm Investor Relations and Communications Manager here at Proact.

With me today, I have Magnus Lonn, President and CEO; and Asa Regen Jansson, CFO, who will walk you through an introduction to Proact followed by a quarterly update, financials and lastly, our closing remarks. After that, we will open up for Q&A. You can either raise your hand or submit a question in the chat, and I will read them out at the end of the presentation.

So with that, I'll hand over to you, Magnus.

Super, and thank you, Christopher. So let me introduce you to Proact, to give you a short overview of what we are and so forth before we dig into the Q1 results yet. So we are a Swedish tech company, currently present in 12 different European countries, as you can see here on the map. And we are a specialist in data storage and handling modern infrastructure in all this flavor. And we have been doing this in 30-plus years and which means that we are really super experienced and have really high skills around this topic.

And if you think about that, modern infrastructure, data storage, that is what is key for basically every company out there. If you want to do anything with AI, you need to have a lot of data and every company out there is basically protecting their data that is generated. And we, as private individuals and also companies are generating more and more data. So even if we were founded 30 years ago, I would say that we are by far more relevant today than 30 years ago, especially with what's happening in our surroundings and environment.

We have a yearly turnover of SEK 5 billion, and I have been listed on the stock exchange since '99. Half of our revenue comes from what we call system sales and half of it is roughly annual recurring revenue, so our recurring revenue. And I will walk you through our different revenue stream in a short while.

As you can see also in the graph here, we are on a growth journey since '21 and up to today, we have grown roughly 30%. And also, you can see we have by far improved our results under the way as well. So when you look at Proact, and when you evaluate this is a key message that you need to understand. We have 4 distinct revenue streams, and all of them are sort of hooking into each other and also strengthen each other.

I start from the left here with our system sales. That is when we provide hardware and technology to our customers. It can be a GPU, it can be data storage, and it can be also software related to that. This is where Proact was founded 30 years ago, which we started off. And then over the years, we have sort of keep to that and then have evolved that over time.

We are working with large and enterprise customers, meaning that the size of the deals that we are doing in the system business can be quite big. That means that if you evaluate on a quarterly basis, our top line can also differs a little bit between when system sales come in, if it's on the right side of the quarter or not. So I think when you look into us, it's important to evaluate over a longer time.

Then when we sell system, we always -- and this is the key thing we provide. That's our competence. And then we provide our support services. This is a super good example of us building long-term customer relationship. Our support is a key thing for us. And this is a good example of recurring revenue. Contract length is often very long. It's 3 to 5 years. and payment is done upfront.

Then everything we sell as a system, we can also provide that as a service to our customer. And that is what we call managed cloud services. And then when we sell it as a service, that means that we have our own staff, European local staff that are taking care of our customers' most critical data.

And I would say nothing of this could happen unless we have super skilled consultants and experts that are advising and helping our customer design solution or work in their environment, building modern cloud solutions like Docker, Kubernetes and public cloud transformations.

And you also -- I mean, some of the trends that, of course, are on top of everyone's mind is cybersecurity, how can you protect your data? Proact is by far really out there working with our customers building solid solutions. And then, of course, AI, everything starts with data. If you don't have access to data, it's hard to get some value out of it.

Also, something that I think is really remarkable of Proact is actually our customer base. If you can see here on the picture, our solution and what we are working with is basically across all sectors and regions. It doesn't really matter if our customers are in the public sector, it's manufacturing or energy. Basically, as the world have developed today, everything is digital and our solution and our competence is needed across our sectors. This also creates a good risk profile because we are not dependent on any specific sector. We have a sort of broad spectrum when it comes to our customer base.

And in the middle and the center of this one is, of course, the key thing. We are building long-term customer relationship, and that is the key, I would say, for Proact, taking care of our customer and helping guide them through the complex situations that is out there. So that's a short, short, and quick introduction to Proact, what we do and what we are working on, on a daily basis.

And with that, let's move over to the quarterly update here and the highlights of the quarter. As you've probably already seen, we delivered a strong quarter, especially when it comes to our EBITDA. We grew that with over 45% and there's actually 2 big reasons for this one. For you that has followed us for a while, we have, during last year, really done a lot of hard work internally to sort of break the negative trend that we have had outside the business units from the Nordic, where we have sort of seen falling performance over a long time.

So we did a cost program last year, and -- with that in place, we have actually seen the sort of early result of that here in Q1. We are a little bit ahead of our cost program compared to what we planned. And that, in combination with the sort of exploding memory prices that also have occurred here during quarter 1 created this sort of strong result that we delivered in Q1.

And I will get back a little bit more around the details and dynamics around the price increases in a short while. But these 2 factors are by the far most contributing to the strong results that we delivered here in Q1.

Also during the quarter, we were selected by Broadcom to be one of the few European partner that have the right to sell the solution. And I think this is a sort of really great testimony to our competence. And this is, for sure, something that we will continue and work and see how we can even more better help our customers going forward.

Also, after the quarter, we did 2 things. Yesterday, we released a press release that we are divesting part of our staffing operations in Netherlands. This is part of our plan to do the turnaround in the business units and improve the profitability and also create focus to maintain in our core services and also core offerings. So that's part of our plan. So I'm really glad that we got this in place. And now we will work with a local partner to see how we can provide this even further. And also, I already mentioned around the strong quarter and so forth.

This is area where I think it's worth spending a few minutes to understand the dynamics, what's happening in the market. If you can see here in the graph, this is the sort of index price for DRAM and NAND, which is the sort of standard components used in everything when it comes to tech and memory.

Memories are located both in servers like NVIDIA and GPUs. It's reflected in data storage. It's reflected in computers, memories everywhere. And with AI and the huge sort of demand, this has created a perfect storm that for let's say, the capacity of the available memories has been limited. And when this has then been limited, it has had an impact on the price. So prices have increased dramatically. And this is what we actually saw during Q1 here, which is the box. And we have a close collaboration with our vendors. So we knew that price increases will come. So we have actively worked with our customer.

So during Q1, we have also seen a lot of customers that have sort of bought earlier than maybe planned, and this is to avoid future price increases. So we have used and worked with our customer to help them avoid future cost increases. And this is what has been one of the main driver here during Q1.

We expect that the price increases of memory will last at least throughout the year. It takes a long time to establish new production capabilities and the demand is still very high. And looking into the crystal ball, I think first half of the year, we will see a good momentum. And then, most likely during second half of the year, it will be a little bit slower pace, because if customer buys early and then we also see long delivery times that should during second half of the year, probably dampen the delivery times.

This is snapshot as of today. And as you all know, the market is changing constantly, but this is the sort of best guess that we have right now. So this is the sort of the story and what's happening in the market when it comes to the memory prices.

But to sum it up, I'm really glad that during Q1 here, all our business units is back to positive numbers and growth. And that, I think, is a really great testimony to the team and all the hard work that has been done.

So with that said, I think it's a good segue over to you, Asa, to guide us through the financials.

Thank you, Magnus, and good morning, everyone. Let's have a closer look at the financials, starting with total revenue. Total revenue amounted to SEK 1.243 billion, which is an increase of 2.3% versus last year. Organic growth amounted to 2.9%, where the contribution from the acquisitions, BlakYaks and Consular of 2.9% was more than offset by an adverse impact from stronger Swedish krona of minus 3.4%.

System sales grew by 3.5% year-on-year and 5.6% on a like-for-like basis to SEK 712 million. The development was a combination of volume, partly from a pull-forward effect as described by Magnus, and the higher prices successfully introduced over the quarter. Support revenues largely followed the system sales and grew by a little bit above 4%.

Managed Cloud Services declined by 2.6% and 2.3% on a like-for-like basis, where growth in NOBA was offset by decline in the other business units, driven by a lower customer intake in relation to churn during last year.

Consulting Services increased by 7.7% and declined by 6.1% on an organic basis, where the growth was driven by BlakYaks, compensating for a weaker underlying performance in U.K. Total service revenues amounting to SEK 531 million were stable and made up 43% of total revenue in the quarter.

Moving over to top line development in the business units. Revenue increased in all business units except for Central, driven by system sales and growth in NOBA Services as well as contribution from BlakYaks in the U.K. The weaker revenue development in Central is largely explained by more cautious investment decisions following implemented and announced price increases.

All in all, the decline in Central was compensated for by growth in the other business units, which, as mentioned, was largely driven by the system sales. Recurring revenue amounted to SEK 429 million, a slight decline in reported numbers year-on-year, but an increase of 1.3% on a like-for-like basis.

Annualized recurring revenue has grown over the years with a dip in '25 due to the lower intake of new customers and challenges with churn in some of the business areas. There are, however, positive signs of recovery and returning customers. New cloud contracts of SEK 151 million were signed in the quarter, an increase of 24% compared to first quarter last year and are expected to start generating revenue later in '26.

Moving on to the results in the quarter. Adjusted EBITDA amounted to SEK 115 million, which is an increase of close to 46% year-on-year and equal to an EBITDA margin of 9.3%. The strong earnings is, as Magnus described earlier, a combination of higher gross profits and the effects from cost reductions and improved efficiency reflected in both gross margins and administration costs primarily.

All business units are back on black figures on EBITDA level, and we expect to see further effects from last year's efficiency program in business unit West and Central going forward. Having a look at the capital allocation over the last 12 months.

Starting at a net cash position of SEK 101 million by the end of Q1 '25. Cash flow from operations have contributed with close to SEK 0.5 billion, SEK 472 million to be precise, which has been put in use through M&A of SEK 84 million, dividend payout in Q2 '24 -- sorry, '25 of SEK 64 million and shares have been bought back to a value of SEK 157 million.

Amortization of leasing amounts to SEK 122 million over the last 12 months, ending Q2 '26 at a net cash position of SEK 21 million, including leasing debt. Total cash amounted to SEK 499 million by the end of Q1 to be compared with SEK 568 million by the end of Q1 '25.

A new loan facility agreement has been signed during the quarter, replacing the facilities that were due to expire during Q2 -- Q3 this year. The facility consists of a fixed term loan facility of EUR 20 million, which is currently utilized and a revolving credit facility of SEK 600 million, including an overdraft facility of SEK 150 million, none of which has been utilized as of now.

The underlying cash generation has allowed Proact to increase dividends over the years and initiating share buyback programs. The dividend payout has increased by 17% per year in average for the years '21 to '24 and the proposed dividend for '25 of SEK 2.6 per share, equal an increase of 8.3% year-on-year.

In addition to dividends, as mentioned, Proact has with the mandate given at the AGM, been running share buyback programs since Q4 '23 to further manage the capital structure and generate shareholder value. Since last AGM in May '25, Proact has repurchased 1,549,511 shares and currently holds 1,845,745 shares in owned custody, corresponding to 6.8% of total shares. total number of shares.

Going forward, the ambition is to continue optimizing capital allocation, balancing direct return to shareholders and investment in growth. And that was it for me. Thank you.

And now back to you, Magnus, for some closing remarks.

Thank you, Asa. So just to sum up here. So we started off the year with a strong quarter. It was mainly driven by the work that we have done internally around our cost program and also, as I said in the beginning, the memory price increases here.

Looking in the crystal ball, I think we will continue to see this positive momentum also in Q2, but with most likely that we will see a more dampening effect later in the year.

But I'm also glad that we, during the quarter, are back to profitable numbers in all business units. We are continue taking the steps to improve them. And if you that have followed us for a while, you also see in the graph here that NOBA and U.K. are on a really good path.

And with the steps that we are taking now, we also see really good movement in Central and West. So we will continue to focus on that and update you all. And with that, I think we conclude a good Q1 and looking forward to talk to you more soon again.

And with that, Christopher, I think we should open up for questions.

Yes. So if you have any questions, just raise your hand, and I will hand you the word or submit them in the chat, and I will read them out loud. Let's see handing the word to Daniel Thorsson.

Yes. A couple of questions. First one, you had 4% organic growth in system sales in Q1 despite both volume and price increases, as I said here in the report. So that looks quite low to me if both these drivers were boosting sales. But I guess that this was explained by longer lead times and more deliveries in Q2, perhaps. Should we therefore expect a higher organic growth number in Q2 than we saw in Q1 for system sales. Is that correct understanding?

Yes, that's correct, Daniel, but we shouldn't over boost the sort of volume to be expected. But you're absolutely right that during Q1, we definitely saw longer delivery times. And my prediction is that this due to the shortage of memory in the market will continue throughout the year. So that could be a little bit problematic for customers that even if they want to buy, there is actually nothing to be delivered. But you're absolutely right in your assumptions.

Okay. I see. When I looked at inventory then in the balance sheet, it's up -- you usually have quite low inventory, but it's almost doubling since the Q4 report from SEK 24 million to SEK 53 million. I guess this is due to good orders at the end of Q1 and also longer delivery times. Can you say something about the gross margin mix in the pipeline? Is this inventory that you have been able to buy at lower prices during Q1 and now being able to sell and deliver in Q2 at a higher price so that we will see a good gross margin in Q2 as well?

I would say that it's actually a mix where we have increased inventory levels. And I wouldn't say that, that necessarily means that this will drive gross margin during the coming quarter. It's still -- even though it's a high increase, it's still a fairly small number that we keep in inventory.

Yes. Okay. So it's probably more a result of longer lead times, the orders you got in end of March weren't delivered and they go out in April instead of something like that.

Yes. That's a relevant interpretation, yes.

Okay. Fair enough. And then on the cost reductions, number of employees here in Q1 were down 29 people, I think, roughly. What's the outlook for the rest of the year? Is this a level where you feel comfortable? Or should we see any further reductions of smaller size or...?

I mean, as we released yesterday, we also did a divestment in the Netherlands, and we are still working on some of the part of the cost program. So that's on one side.

At the other side, we're also investing in our business where we see that we have potential to grow and so forth. So it will be a balance. But yes, so that's my best guiding. We will -- yes, probably end up Q2 a little bit lower, but due to what I just said.

I see. Okay. And yesterday's divestment in the Netherlands, how many people were affected by that, roughly?

Roughly, it was around 20 people impacted. And then in that, we also had some subconsultants that have been working for us. So it will have a limited impact on our overall numbers, but this is a super important step for us in building our business going forward.

Yes. Okay. I see. And then a final one on the segment here. Did you see prebuying and stronger gross margins in segments West and Central as well, helping Q1 EBITDA to be positive? Or would you have reached a positive EBITDA driven by cost reductions purely?

I mean, we saw growth in actually every business unit, except in Central, where we also made some decisive decision when it comes to some of our customer and also sales in Q1. But with that said, I think we continue to focus on the things that we can impact and also sales, for sure, is a key thing for us. So that's what we are working with.

Perfect. So then over to some questions we have received in the chat, starting with George. Regarding memory component price, could you try to quantify the tailwind/benefit you experienced in terms of and the product price increase both in terms of system revenues and pull forward demand and impact on margins, isolating the margin impact on gross margin versus the scale effect from increased revenue?

The easiest answer is we will not, in detail, do -- I mean, the numbers that we have released in our quarterly report, I think, is the amount of detail that we can go into here. But I think if I try to answer it in another way is that I think in Q1, we have for sure get some tailwind related to the cost increases. So that, I think, is important for everyone to understand. Will the cost increases be sustainable and live forever? I don't think so. I think it will remain on a high level for at least '26. But -- and if and when the production capacity, I think we will see a more normalization when it comes to memory prices.

And then there was a question around the revenue impact from divestments and perhaps also -- as I also mentioned there, the sort of overall impact of whole Proact, it's quite small when it comes to revenue impact. But it is an extremely important piece that we got in place yesterday in our plan to build a more profitable business unit to invest. So for us and the work and what the team have done, this is a super important piece in that, building a more profitable Proact.

Then there is a question around M&A. This is, for sure, something that we are really, really looking into. I have said this before, and I will continue to echo that. I strongly believe in doing M&As where in areas where you have a strong business. If you look into our numbers, that means that in the Nordic and U.K. market, I see definitely potential for growth. If you have a good operational business, that means that you have a good home.

Also, one thing that we have changed since last year when I entered this is that when it comes to buying companies and also the integration work coming after that, we are now more focusing on having a light integration and focus more on sales. I am really glad that we, during the quarter, also celebrated 1 year with BlakYaks. And I think how we have done it and what the team in U.K. and BlakYaks have done throughout the year is a really, really great example of how you can better create value when it comes to acquisitions, things like that.

And also, as you that have followed up, you noticed that we bought Consular in December and also the team have done a fantastic job here during Q1, and I'm really looking forward to follow them going forward. So yes, we are definitely looking into M&A. But for us, it's more important that we find the right target that fits into our portfolio.

Next question. Could you help me understand how rising memory prices benefit you and how it affects your gross margin? You've stated before that you don't take price risk and only order when your customers do. Are you able to charge more when prices are volatile?

It's a good question, Oscar. I mean, it's actually both. Foremost, what has happened during the quarter is that prices have increased 300% to 400% in some cases. And prices continue to change on a daily basis. So of course, it's a volume effect that the prices is going up. Then we, as a partner, we have different partner programs and things like that. Some of them are based upon volume. So just pure mechanical that, of course, creates also a better contribution. But we are also really trying hard working with our customers to help them avoid customer -- sorry, price increases. So -- but with what's happening in the market now, this has had a positive effect.

So what was the SEK contribution from Consular in the quarter? Looking at the reported organic growth versus nonorganic growth, it doesn't seem to add up to a level of annual sales of DKK 8 million.

What we can say is that Consular, that mainly then is a systems business. They were affected by longer delivery times. So it is a good remark. Q1 was a bit slower maybe than expected, but that is mainly then due to deliveries slipping into -- or slipping away from Q1.

So last question. Can you comment on support services attachment rate/retention rates, given that your ordinary sell some form of support for systems, shouldn't we expect to see support services as much higher percentage of revenues overall?

Yes. I mean that's a really good question as well, Anil. By far, I would like to increase our support even more, and that's something that we are working with. I think you should see this as it's a mix around that the hard -- the physical hardware, the price for that is super expensive. And then our support services that we add on top of that is then spread out over the full contract time and so forth.

So just by the difference in number, that creates the maybe some skewed relationship when it comes to 14% versus 5% to 55% when you look into the revenue. So that's one of the explanations here. But as I said also in my presentation, our support, that is a key thing for us, and also something that I know our customer really, really value because if you think about this, the environments that we provide to our customers, that's part of their critical infrastructure.

So a bank, a hospital and you can take any industry hardware needs to function and otherwise, it creates really hard impact to both the society and also the customers to our customers. So that's a key thing.

Good. Do we have any final questions? Then I would like to thank everyone for listening in. It's -- I'm really glad to also report a strong quarter, and it's a good start of the year. And I know my team and everyone at Proact are working 100% commitment in helping our customers and things like that. So -- as you see here, that also creates result, and I'm really looking forward to talk to you soon again, and give you even more updates in the coming quarters and so forth. So once again, thanks a lot for today and see and talk to you soon again.

Good morning, everyone, and warm welcome to our Q4 Results. I'm Magnus Lonn, and I'm CEO of Proact, and I'm here today with Asa Regen, an old colleague that is coming back, which is really good to have you back, Asa. Welcome.

So I will do a short presentation of Proact for you that hasn't maybe follow us, so you get a good overview of what we're doing. This Q4 also ends my first year as the CEO of Proact. So therefore, I will give you all some sort of initial reflection of the year that has been executing. And then we will, of course, look into our quarterly highlights and also will guide us through the financial results, and then we will end up with a summary at the end and questions.

So for you that haven't really follow us, Proact is a Swedish tech company that are really, really experts in helping our customers securing and managing their data. And this is something that we have been doing for plus 30 years, and I would say are best-in-class when it comes to that. And as society have developed, you can imagine that handling and making sure that data is secured in a store way is essential for basically every company. And this is what we are really, really good at.

If you can see in the graph here, we are represented in Northern Europe. And over the years to the right, you've seen in the slides, we have also been on a growth journey. And we are having a turnover around SEK 5 billion and have been stock listed since '99. All in all, we have 1,100 employees that are working across Europe to take care of our customers.

So if we move into our revenue streams and what we are sort of how we are generating our results here is that we have 4 distinct revenue streams, and I will walk them through, so you get an understanding and more insight to what we do. First of all, we have system, and this is our sort of core business. In basic, we are helping our customers provide them with designing and also acquiring and installing infrastructure, which is crucial. It could either be data storage, it could be service, it can be GPU around AI infrastructure. So this is a large part of our competence and what we're doing on a daily basis.

Our system business is quite positive one because we do the deals and then we get the money upfront. So we, as a company, doesn't possess any risk and things like that. If you are following us, you also may have noticed that this -- our income from our system business can vary between the quarters because we are working on large and medium-sized customer and the size of a system deal can be quite large. So then it can depend if it comes on the right side on the quarter or if it's the next. So if you're evaluating us, then you should look into our systems business over a longer time period.

I usually say that the system business is actually a recurring revenue because we have very high customer satisfaction. So even if the customer buy hardware from us, often they do that in the coming year, and we have very long customer relationships.

When it comes to our support, that means that everything that we are selling, most often, we also provide our own support, meaning that we have technicians that are helping our customer to fix if there is any problem or so forth. The support is a good example of our recurring revenue. Often, we contract the customer on a 3- to 5-year basis, meaning that we create really long customer connections.

And then as a complement, we also have our managed cloud service. And that is that we are actually selling and providing our customer with services. So instead of them buying a system from us, we can provide them that as a service. This is an area that has been growing for us in the last couple of years and that we are sort of focusing in because this is also an example of good recurring revenues that we have as a company.

And then, of course, nothing can be done if you don't have really, really skilled experts and so forth. And we also have consultants that are out working and advising our customers. So all of these 4 revenue stream is what compose Proact and that we are working on a daily basis. And they also are quite interconnect. So it's very often that you start with a customer on system and then we add on additional services and so forth.

Of course, as you all know, there are some key drivers in the market. First of all, it's all about the digitalization. Data amount is growing. On top of that, you have cybersecurity. I can't come up with a company that don't have this high up on the agenda and also on the Board level when it comes to their own business. And of course, in the latest AI and then creating leverage of that, that is a key driver and something that we are working daily with our customer.

Moving over to our Q4 highlights, and Asa will help me walk through the financial details here. But as you all know, I've been communicating throughout the year, we have made a cost efficiency program across the year to improve that. During Q4 here, we actually conclude that. And I expect that we will see the outcome of that second half of this year with a yearly cost saving of around SEK 80 million. Also in December, I'm really, really glad that we welcome in Consular, a Danish tech company that we acquired. And this will, of course, strengthen our really good position that we have in the Nordics. So I'm really glad to welcome them on board.

Also, during the quarter, I have appointed a lot of new senior leadership within the company. First of all, I'm glad to welcome Asa back as a CFO. And in my old role as Business Unit Director from Nordic and Baltics, I'm glad to welcome Niklas Jakobsson, who was previously CEO of Dell, Sweden. So he will be a great addition to the team and also to the management team. And also in Central, I have appointed Jacob Kronborg as an interim bud for our Central business units since Maria left the organization. And also during the quarter, we were appointed the global innovation partner from NetApp, and this was a good example of the competence that we have been doing together with NetApp around security. Worth mentioning is that after a quarter, we also were awarded from Broadcom that we are one of the few selected VMware cloud service provider. And I think that is also a great testament to our competence that we have within the company.

Our Board have also proposed an increased dividend to the upcoming Annual General Meeting, and that's SEK 2.6 per share. But as I said in the beginning, this is -- okay, I don't see the slide. Sorry.

As I saw in the beginning, this is also a conclusion of my first year as CEO. So if I make some reflections, I think Proact as company, I would say it's a fantastic company that is based upon solid competence and solid foundation and solid finance, and that's always a good start. We have an extreme deep expertise in the area that we are doing. And if you think about that when it comes to data protection, security and AI, as I said in the beginning, every company is in need of that.

I think if you look into our portfolio, we have a really good mix of both recurring revenue, but also our system business. So I think from a sort of revenue perspective, we have a really good balance there. And foremost, we have been doing this and develop our skills. I would say that we have -- we are really trustworthy when we speak about us as a company. And also everything that's happened now in the macroeconomics, I would say that being an European service provider is a very good asset.

But then also if I look through us as a company, I also see some clear execution gap when it comes to our history and the performance here. First of all, I think very few really have a good understanding of what we're doing. And maybe we have not been super good in that telling the story and explain what we are doing and the value that we add to our customer. So that's something I see that we can improve going forward.

Then when it comes to profitability, I also see that we have not been good in creating profitability outside our Nordic business. And if you can see the graph here, the red bar here is the profitability from our Nordic business. And as you can see, this has been actually growing. And prior I joined as CEO of Proact, I was responsible for that business unit. But our business outside Nordic over the past year has been going in the other direction.

We have been doing some M&As. And if you look into the outcome, I think historically, we have been underperforming also that if you take aside the acquisition that has been done outside the Nordic region. And I also think that we have been overexposed to low margin and nonrepeatable deals also when I look into the company as a whole, except maybe for our business unit outside the Nordic.

So for me, this has been sort of a year of really getting a better understanding of our old business and also setting the direction. And I see some clear actions that we can take to really address this.

So if you take the next slide. So during the year, I have implemented a new post-M&A model, meaning that we are not spending internal time integrating and the acquired company. Instead, we are investing all our effort and time in making sure that we focus on sales and what additional value that we can bring to our customer. And I think a clear good example of that approach has been BlakYaks that we acquired earlier this year. That has been a really good addition to our U.K. business.

We have implemented overall group cost program in order to really improve also and maybe enhance our execution capabilities. So that is my expectation that we will see the impact of that in the coming second half of this year. I also made a lot of changes to the leadership and also simplify how we work internally. I truly believe that we, as a company with the competence that we have, we should focus even more on high-margin services. And we have, during the year, launched our AI offering and also Kubernetes offering. And Kubernetes for those of you that are not that familiar, that is the sort of operating system for all AI workloads out there. So I think what we are seeing is a totally increased demand for that service.

And of course, continue to improve our focus in West and Central. And even if it's a little bit early, I'm sort of still positive around that. And of course, this work will continue. We're really looking forward to update you all around the progress later this year.

With that said, should we move over to the finance?

Yes. Thank you, Magnus, and hello, everyone. Let's have a closer look at the financials, starting with total revenue.

Total revenue in the quarter amounted to SEK 1.208 billion, which is a decline of 4.8% versus previous year on reported as well as like-for-like basis. System sales, which are volatile by nature, were down 6.8% to SEK 665.8 million. Sales declined across all markets, except in West. And the development in Nordic and Baltics was also affected by a strong competitive quarter. Service revenue amounted to SEK 541.3 million, a decline of 1.9%, where growth in support and cloud services in Nordics and Baltics, together with a positive contribution from BlakYaks in U.K. were offset by weaker service sales in West and Central.

For the full year, total revenue amounted to SEK 4.679 billion, a decline of 3.8% versus previous year on reported as well as like-for-like basis. Systems revenues were down 5.1% and 3.8% on an organic basis to SEK 2.550 billion. The decline was driven by West and Central, whereas Nordics and Baltics grew by 2.9% and U.K. was close to flat on a reported basis. Service revenue were down 2.2% and 3.7% on a like-for-like basis to SEK 2.124 billion. The increase in Nordics as well as in U.K. with positive contribution from BlakYaks was offset by a decline in West and Central. All in all, the service business accounted for 45.4% of total revenue for the period compared to 44.6% in 2024.

Intake of new contracts for cloud services amounted to SEK 138 million in the quarter compared to SEK 224 million in Q4 '24. The lower intake in Q4 can partly be explained by timing and a strong Q3. For the full year, new contracts amounting to a value of SEK 650 million were signed, a slight increase of 1.1% compared to 2024.

Total revenue from Cloud Services amounted to SEK 272 million, a decline of 4.3% and 3.4% on an organic basis, driven by lower sales and customer churn in West and Central, offsetting growth in Nordic and Baltics. Recurring revenue from support and cloud services declined by 2.3% in the quarter, which also is reflected in the annual recurring revenue measures, which is calculated as revenue in the quarter times 4.

Moving on to the results. 2025 and Q4 ended on a positive note with an adjusted EBITA, excluding one-off costs related to the cost efficiency program and costs related to the acquisition of Consular of SEK 84.9 million, which is an increase of 5.9% compared to Q4 last year. The lower revenue is compensated by lower sales and administration costs related to sales commission and positive effects from the cost efficiency program.

Full year adjusted EBITA amounted to SEK 316 million, corresponding to a decrease of 9.9% compared to previous year. Profitable growth in business unit Nordic and Baltics and business units U.K. mitigate to some extent the weaker performance in West and Central. The cost efficiency program performed during the year, which Magnus talked about, is expected to deliver savings of around SEK 80 million on a yearly basis with full effect from the second half of this year.

Moving on to cash. In 2025, the cash was put into use completing 2 acquisitions, BlakYaks in U.K. and Consular in Denmark and continuing the share buyback program in line with the mandate from the Annual General Meeting. Net cash flow in Q4 amounted to SEK 24 million, of which SEK 229 million from operating activities. Investment activities consumed SEK 96 million, of which SEK 93 million related to the acquisition of Consular. Cash flow from financing activities amounted to SEK 108.7 million, largely related to amortization of lease liabilities and share buyback.

A quick look or a brief comment to the performance in the different business units, starting with NOBA or Nordic and Baltics. The total revenue amounted to SEK 711 million in the quarter, a decline of 0.9% versus Q4 '24, that, as mentioned, was a very strong quarter. Adjusted EBITA in Q4 was also a bit behind last year, primarily from lower margins in system sales. Full year revenue grew by 4.4% to SEK 2,642 million, driven by systems as well as service revenue. And the adjusted EBITA increased by 4.7% to SEK 272 million, corresponding to an adjusted EBITA margin of 9.6%.

Traveling a bit west to the U.K. Total revenue amounted to SEK 187 million in Q4, which is an increase of 6.9%, largely driven by an increase in service revenue in BlakYaks. The increase on an organic basis was 0.9%. Adjusted EBITA amounted to SEK 14 million compared to SEK 3 million last year. The increase is partly from BlakYaks' contribution, but also from improved efficiencies in underlying businesses.

Full year revenue grew by 7.3% to SEK 761 million, driven by services and BlakYaks contribution. Adjusted EBITA amounted to SEK 43.4 million and the EBITA margin increased to 5.7%.

West, a challenging year for business unit. West ended, however, on an upward trend. Total revenue amounted to SEK 186 million, a decline of 6.1% and 1.9% on a like-for-like basis, driven by lower system sales. Adjusted EBITA amounted to SEK 4.3 million, which is a small increase from SEK 3.9 million last year. Full year revenue amounted to SEK 718 million, a decrease of 15.4% and 12.6% on an organic basis. Adjusted EBITA for the full year amounted to negative SEK 2.1 million, which is a result of lower revenue and the cost base not fully adapted.

And lastly then, Central. Total revenue amounted to SEK 153 million, a decrease of 27% and 23.5% organically. Lower system sales are the main driver behind the decline, but revenue from services decreased as well. Cost savings mitigated part of the shortfall in revenue and adjusted EBITA for the quarter amounted to SEK 1.5 million. The full year revenue amounted to SEK 672 million, a decline of 24.4% compared to last year and 21.9% on an organic basis. Adjusted EBITA amounted to negative SEK 5.5 million as a consequence of the decline in revenue and not fully adjusted cost structure.

And I think that was it. So back to you, Magnus, for some closing remarks.

Super, and thanks, Asa. So just to sum up then over the year. So first of all, as you can see, it's super glad that we have 2 business units that are actually growing and that we are well on the way to sort of address the challenges that we have with the other 2. So we are on good progress. Throughout the year, we have been really valued that we are a true European independent partner, and that is something that our customers are really coming to us and really appreciate when we work to them. So I think we have a super good position.

As everything that is happening now with cloud, data and AI, I think we have, throughout the year, really demonstrate that to our customers. We have, during the year, made 2 great acquisitions, both BlakYaks and now the Danish, Consular, and we have also improved and strengthened our leadership. So I think we have a really solid base.

As we also mentioned, we have throughout the year also been doing a cost efficiency program that I now expect that we will see the impact of during the second half of this year with savings of around SEK 80 million. And we have also seen that the work that we are carrying out slowly is getting the result. And I myself are very confident, especially since my history in the Nordic and Baltic region that we, as a company, we can do it and we will do it. And so I think we are on a good trajectory.

So looking forward, I think for us, 2026 is what we are doing. So we will continue to focus on profitable growth and improve what we're doing in West and Central. And as I also said in the beginning, we are doing a total review of our product portfolio and customer offering, and I'm really aiming to update you all around the progress and the key conclusion of that in the coming quarters and later on this year.

So with that said, I think we should open up for questions. I actually spotted a question already in the chat here that I can address because I think many of you already probably have it. How do we treat the increased price of memory that is happening in the tech industry? So the thing is that we, as a company, we don't take any risk at all around this because all the price increases, we don't buy before we have sold something, meaning that we inform our customer around the new price and then we negotiate as good as we can. So we, as a company, don't take any risk around that.

The impact of it is that I think short term, we will probably most likely see an uplift in our coming sales because many customers would like to buy before the price increases fully hit the market. But of course, you can think about the long-term impact because at the end of the day, somewhere our customer needs to find the money and pay for it. But I think in the area that we are working with, with critical infrastructure, it's very hard for customers not to prioritize that. So I think short term, we'll probably see a boost of it. And long term, it will maybe be a little bit more savings.

So with that said, maybe we can open up for questions. And Daniel, I saw you raised your hand.

Yes. Thank you very much, Magnus. I had the first question on memory prices there, but you answered it already. So let's go on. I have a question on cloud orders here in Q4. They were down year-over-year. Is that a trend shift in the market or just quarterly lumpiness given the strong Q3? And can you give some kind of outlook for '26?

I don't think it's a general trend that it will go down year-on-year. I think the answer to it is, first of all, we have had execution issues during the year in our business units, Central and West, and that is one of the impact. Apart from that, I think the general trend is that companies are really sort of scrutinizing where they are locating their data.

A general trend that we have seen throughout the year is that many companies are revisiting their cloud-first strategy, meaning that they are not sure anymore that they should place all the critical data in either Azure or Google or Amazon. So maybe that's a general trend.

Okay. I see. That's helpful. And then a question on customer demand. Do you see any differences between public customer spending today versus enterprises? Are enterprises perhaps a bit more cautious today and they invest more in experiencing AI, for example, and postponing data storage? Or do you see any differences?

I mean it's a good question. I think all in all, if you look back, especially maybe in the Northern Europe, we have invested and basically all the public customers have invested a lot in securing their critical infrastructure, and that is most related to the macroeconomics with war in Ukraine, NATO and things like that. I predict that we will continue to see more investment also in the public domain because many of our authorities are trying to be more efficient, and they are doing more and more with AI. And if you should do anything around AI, you really need to have data and good data. So I see that.

When it comes to enterprise customer, I see that they continue to invest. Many of the enterprise customers also have the money to invest, so they might try to compensate price increases and things like that. When it comes to smaller customers, even if we do not have that many of them, they are a little bit more price conscious. So they are not having the possibility to invest in advance to compensate for future cost increases. So that's maybe the general trend I see.

Okay. I see. That's good. And then another one on cost level. You mentioned the SEK 80 million cost savings into 2026. Should that be compared to roughly where we closed 2024, i.e., before you started with all the actions during 2025?

I'm looking at Asa because she has a good answer.

Well, I hope so. It's, of course, a little bit of a mixture. Comparing to 2024, we also have some inflation in the cost base in 2025 that is not per se then affected. But in large, I would say that it is the cost base running 12% from half year '25, maybe that it should be compared to. And then -- well, of course, we do foresee to invest also in growth. But in the underlying cost base, I would say that the more relevant comparable will probably be running 12% for half year '25, if that makes sense.

Yes, absolutely. That's helpful. And then like all in all, given SEK 80 million cost savings from that level, you have also acquired BlakYaks and Consular. And if we just take the company stand-alone today, do you expect '26 OpEx in total to be higher or lower than 2025? Because the SEK 80 million will be on the underlying business and then you have added 2 acquisitions. So I was just interesting about the net effect there, if it's helpful.

We do expect it to increase somewhat, but then on the back of investments and not the least in Consular and BlakYaks full year.

I also want to stress what Asa said here because we also are doing investments in our business to grow. And that, of course, could impact our cost levels. But yes, so that's just to set some more flavor on that answer.

Yes. Okay. That's helpful. And then a final one on the cash flow here from leasing. You showed it in the slide as well. But in Q4, the level was twice as high as previous quarters. Were there any one-offs in there? Or should we expect like the SEK 64 million the quarter ahead? It looks high.

Yes. And I think, here we actually have a little bit of an accounting or not an accounting, but the classification, I would say. It's not errors or something we have to look into because as you see, it's twice as high and that is not a one-off, but it refers to -- we have part of the amortization there for the earn-out, which we -- yes, we are overlooking how to handle. So nothing specific when it comes to the leasing.

Okay. So the first 3 quarters of the year is a better proxy for...

They are representative. Yes.

And I'm looking into the chat here. We also got some questions. I think we answered around the storage prices and you explained around the lease there, Asa. Do you intend to make an acquisition in Central and West units to expand your product portfolio and customer offering?

So I have been repeatedly saying this throughout the year, and I'm really standing firm on this, that we will only do acquisitions when we feel that we have a good execution in place. And we are well underway in both Germany and Holland on that. I see that we have a strong leadership team, both in Holland and also in now with the new leadership team in Germany. But we need to improve a little bit more. But once we have done that, I will, for sure, look into further acquisition in that area, but we are not there yet. So short term, we are really looking forward to do additional acquisition when we find a suitable target in the Nordic and the U.K. area.

And then there was a question around cost savings. I think that has been answered. Capital allocation, M&A versus buybacks on current valuations. I think we, as a company, are in a really good shape. So we can actually handle all 3. We can buy and we can invest in our company. We are providing dividend, and we are doing buybacks when it comes to our own shares. So that's a luxury for us as a company being in that position.

Then there is a question. Is AI driving up demand for hardware that net affects you negatively when hardware becomes a large part of system deals? How do you see AI affecting you over the coming 10 years?

Yes. What will happen in 10 years is a million-dollar question. The only thing, and I've been working in the tech industry for 25 years is that it will continue to develop. I am also certain that with a sort of solid foundation that Proact has, and that is based upon knowledge, we will play a critical part in this development in the coming 10 years as well.

When it comes to AI, we are experts in handling and building the infrastructure needed for AI. And that is an area where I still think that we should be in and should invest even more in. And looking ahead, I think we, as a company, we will probably most likely release new services related to AI. We will add additional value add to our customer related to AI and things like that. But we will remain in our sort of position where we are expert in the sort of handling and taking care of the critical infrastructure for our customers.

Then there was a question around COGS. I think -- so open up for some other questions to the group. So there were some questions also in the chat. Can you please clarify the timing of the cost-cutting benefits? You suggested from mid-2026, does that mean that you get just SEK 40 million benefit in 2026? Or do you mean that you get the full benefit?

I mean that we get the full benefits out of the SEK 80 million half of this year. We are already now well underway executing. But in order to see the full impact of it, we need to have an additional time to sort of finalize our execution around it.

Good. So with that, I will thank you all for great questions and that you are following us. And as I said, me, Asa and the whole team at Proact are really looking forward to continue and update you in the coming quarters and foremost also on the work that we are doing in revisiting our business to get back to even more profitable growth going forward. So all, thanks for today, and talk to you soon again.

Good morning, everyone, and welcome. I'm Magnus Lonn, CEO of Proact, and I'm here to guide you through our Q3 report that we released early this morning. And together, I have Noora, our CFO, that will guide us through the financial details. And I think we will do like this that I will start with a short introduction on Proact, which we are as a company for you that might not have follow us earlier, and we will have a slight overview of the market that we are operating in. And then we dig into the quarterly highlights and what we have done since we had last conversations. Noora will guide us through our financial details, and then we wrap up with a summary and questions for those to conclude the meeting today.

So moving over to Proact. We are a tech company founded in Sweden 30 years ago, and we are very super focused on helping our customers to secure their critical data and help them with their infrastructure when it comes to their IT environment. This is a very sort of specialized area, and we are very proud of that we have been working with this for over 30 years and become the experts that we are today. And if you think about this, there is not a single company that are operating today that doesn't have a need of a solid foundation when it comes to critical infrastructure and tech IT infrastructure. And this is exactly what we are working with.

As you can see on the picture here, we are located in 12 different countries, mainly in Northern Europe. And we are having around 4,000 customers that we are sort of helping on a daily basis with the competence and skill that we have.

We have a turnover of around SEK 5 billion, and we have been stock listed since '99. I'm very glad to be leading around 1,200 employees and experts that are really passionate about the things that we are really good at.

And as I said in the beginning here, our specialty is data, and we are helping our customers protect the data, give advice around the data and also how customer can sort of get value out of the data. And it doesn't really matter where the data is located. Our expertise is to sort of guide them and see how we can help them.

And as you can see on the graph here to the right, we are on a fantastic growth journey as a company. Over the last years, we have grown with almost 30% and also our EBITA is increasing. Half of -- roughly half of what we're doing comes from recurring revenue, and this is an area that we focus more and more.

From an operational standpoint, we are divided into 4 different business units, and these are also the ones that we are displaying and showing in our report, you can see the performance. The red one here is Nordic and Baltics that consists of roughly half of the company's revenue and it's by far our biggest business units. Then we have Central, which consists of Germany and Czech. And then we have West who is Netherlands and Belgium. And then we have U.K. as a stand-alone business unit.

This is also where we have located our 4 different service hubs. Everything we do, our customer can also buy that as a service from us. And this service are generated and constructed in our 4 different hubs that are located, one in each business units.

And we have also worked a lot last year to sort of standardize our offerings. That means that we can deliver services across Europe, and that is one of our strengths to also create efficiency. So this is sort of how we are sort of build and how we are operate on a daily basis.

So we have 4 clear revenue streams that make up the result that we are doing. And they are all sort of interlinked and connect, and I will walk you through from left to right here. So first of all, systems. This is where we clearly help our customers giving advice and also helping them with how to design their data solutions. And that means that we are taking responsible and we're also delivering hardware and software to our customers to enable them to create a modern infrastructure. We are working with large enterprise customer in this segment. And we're working also with the sort of the top leading vendors when it comes here. So we are working with NetApp, Dell and NVIDIA and Commvault among other partners here.

This system business, and I want to highlight that because this is super important for you that follow Proact is that we are doing quite large business around this and the system business can be sort of quite volatile depending on which side of the quarter it comes. And that means when you compare Proact quarter-to-quarter, it can varies a lot when it comes to both revenue depending on when the system deal has been done.

On every sort of system, we also provide and offer our customer our own support because we are really the experts in this, meaning that if the customer has bought something for us, then we are there to help them and provide them with guidance if they need any assistance. This is a very stickiness in our business. The support contract are long, and they are often 3 to 5 years. It's recurring revenue. We get paid upfront and then we sort of spread out the revenue over the years. So this is a very good way for us to build long-term relationship and connecting our systems business with our sort of own expertise and competence.

And many of the customers that we have, have been with us for a very long time, almost like 30 years since we founded some of them. So this is also a sort of testament to our knowledge and that we are really working with closely with our customers.

Then everything that we sell, we also can provide as a service, meaning that our customer, they didn't need to have the competence their own. They don't need to have the staff. Instead, we are taking care of that. And this is what we call our managed cloud services. An example for that is that we can help our customers with the storage, the compute, network, disaster recovery backup. So everything that sort of aligns and consists of a modern infrastructure, we can help our customers around that.

And of course, nothing of this could have been possible if we don't have super skilled consultancies that can help and advise our customer. So all these 4 business revenue streams really ties together in our business.

And of course, there are some clear trends. Cybersecurity solution, I think in my dialogues with customers, there is not a single customer that have this on their mind.

Cloud. If you go back some years, cloud was sort of the AI as of today. And nowadays, this has been more and more commoditized. And we at Proact are really good at this, and we can advise the customer where to put their data.

And then we have also AI infrastructure. AI is now on top of everyone's mind. And at the end of the day, it all starts with the data. And this is where Proact is super skilled in. So we are seeing more and more demand and also requests from our customers.

And Microsoft is also one of the biggest vendor that we are working with. We have a lot of skilled people that are knowing Microsoft and how to help our customers to get value out of Microsoft's products. So this is sort of the core foundation and drivers for us.

Moving over and if I talk a little bit on the market and where we, Proact, are sort of operating. And as you all know, in the digitalization that has happened over the last year, data amount and the amount of data that we as individual and companies are generating is increasing basically exponentially. So if you see it on the graph here, that's sort of an estimate of the data amount generated. And with the introduction now of AI, that data amount will continue to increase even further because data -- AI needs a lot of data in order to do smart things, and you need to have a large amount of data amounts if you want to train an AI model, so the sort of the data that we as individual and companies are generating will continue to grow.

And that, of course, also increased demand of storage. You need to sort of store the data somewhere and you need to sort of foremost also protect the data because in the sort of the digitalization of what is happening now is that data has also become the most valuable precious thing that companies persist. And hence, the cybersecurity issue has also caused a lot of worries. And as you can see here, the sort of the growth in the cybersecurity market, it's very strong connected with the amount of data that is generating. So data has become the most [ phishable ] things.

And if you think about this, Proact has been working with this for 30 years and the best protection that you can have as a customer is to sort of take a backup of your data because then if something happened, then you can always restore your data. And that is what we are really good at in advising our customer to build a solid and robust and resilient environment, so that if something happened or I would rather say when something happened because this is a very challenging situation, all of our customers, then you can sort of recover and do that in a good way.

And of course, -- so this is the sort of environment that we in Proact are working with and that we are helping our customers. And I would say that the growth of the data, cybersecurity and AI is the sort of continued lead indication and Proact is in sort of the middle and it's -- so I feel very confident and very proud that the market and what we are working with makes Proact in a very good position.

And also I just want to highlight this because, I mean, sometimes it could be a little bit abstract what we are doing. But basically, this picture can resonate into every company that is available today. Every company needs some sort of data storage, and that is the blue part here. Proact are experts in this. We can help our customer even if it's on-prem or if the customer has in a private cloud or a public cloud. It doesn't really matter. We can be there to help them.

And as you see in the yellow part here, as it is right now, AI is something that every company would like to try and experiment. And in order to do that, you need to have the blue part here in place because otherwise, you can't make any sense of it.

And if you are into development, you need to work in a modern way and a cloud technology and containers is a very efficient way to develop software. This is what Proact has been working with for a long time. We have a dedicated people like the company, BlakYaks and Conoa, that's part of the Proact family that are experts in this.

And then at the end of the day, as I said in the beginning, cybersecurity, data protection and recovery, that is the key thing that every company and every Board member have on top of the agenda.

And as you see to the right here, this is to illustrate that we can deliver this as a service. We can deliver this as a technology only, and we can provide our support to the sort of business model that our customers have. We are very flexible and we can adapt to that. So I think that is also a strength of Proact when we looked into it. And this connects to our 4 different revenue streams I showed earlier.

But now moving into the quarterly highlights. So this morning, we released our Q3 report, and we ended up in revenue with almost SEK 1.1 billion, it's almost in line with the year before, slightly below. If you recall the first quarter we have, I think Q3 for us made a really good execution. We have a performance issue in Central and West foremost. But although that we were able to sort of land on this revenue.

When it comes to the result, we landed on SEK 76 million, and that results in an EBITA margin of around 7%. And this is also in line with last year. But I'm also very glad to announce that we are slightly increasing our recurring revenue so -- and that is an important measure for us because that's sort of -- it's a focus area that we are working with a lot.

Another key highlight for us during the quarter is that we sold our MCS service, and we measure that in the sort of the total contract value, which was one of the highest that we have had. We ended up in a TCV of almost SEK 250 million. If you compare that to last year, we were around SEK 100 million. So I think that was a very good execution of our sales team and the focus that we have put into this.

Another really proud thing is that we, as a company, were rewarded Global Partner Innovation Award by NetApp, is a global company. So we were selected as the Partner of the Year when it comes to the work we have done on innovation around how to improve cybersecurity and resilience with help of NetApp's technology. And as I said in the beginning, that is a key thing that every customer are working and thinking about. And I would say that being world-class in this is a truly testament to the sort of competence that we persist and that we have and the position that we in Proact have. So that's very proud of, and I'm glad to share that with every member of the Proact family.

And even more happy is that we announced that we are extending the Proact family. We signed an agreement to acquire Consular, which is a Danish company that are super strong when it comes to data infrastructure and cloud solution in the Nordic market. And this is a really good addition to our Nordic business units. So I'm really glad that we were able to get to this position.

And to conclude here, and that's also in my -- in the report, you see that a lot of focus during the quarter has also been to execute the sort of cost efficiency that we talked about in the previous quarter. We have come far, and we are not at all satisfied with the sort of performance in some of our business units, mainly Central and West, but we are on to it. And as I said earlier, it will take an additional quarters until we see the sort of impact, but one step at a time, and I think we are sort of slowly in the right direction.

So with that, I think we summarize the Q3 highlights. But Noora, sort of over to you and guide us through the financial details.

Thank you, Magnus, and hi, everyone. Turning to Slide 9. As mentioned, total revenue amounted to SEK 1.08 billion, a decrease of 4.3% compared to the same quarter last year. The decline reflects a weaker system sales, albeit strong comparatives in Nordic and Baltics last year and challenging market conditions in West and Central, partly offset by higher revenue in the U.K. Organically, total revenue declined by 4.5%.

System sales amounted to SEK 555 million, corresponding to a decrease of 9.8% with lower volumes across all regions. Organically, system sales declined by 7.9%. Nordic and Baltics were affected by large prior year deals, while softer markets impacted West and Central.

Service revenue increased by 2.6% to SEK 528 million, supported by strong consulting and cloud services in Nordic and Baltics and higher revenue in U.K., partly offset by the weaker sales in Western Central. Organically, service revenue declined marginally by 0.1%.

On the next slide. As Magnus mentioned, new cloud contracts were signed at a total value of SEK 248 million with an average contract length of 3 to 5 years. And as mentioned before also, we will start delivering these. It normally takes somewhere between 3 and 6 months to onboard a customer. So these contracts will start generating revenue quite soon.

Revenue from cloud services decreased by 1% to SEK 269 million, mainly explained by higher customer turnover in West and Central. Nordic and Baltics and the U.K. showed positive development, but we're unable to fully compensate for the decline.

Recurring revenue, defined as revenue from cloud and support services amounted to SEK 431 million, mainly driven by increase in support services.

Annualized recurring revenue amounted to SEK 1.72 billion. This corresponds to an increase of 1.1% compared with the previous year, also driven by strong growth in support services.

Adjusted EBITA amounted to SEK 76 million, a decrease of 3.9%, mainly explained by lower revenues. The adjusted EBITA margin remained flat at 7%.

Earnings were negatively affected by lower sales volumes in Nordic and Baltics and continued market challenges in West and Central.

As Magnus also mentioned, we've taken strong measures to reverse the negative trend, both through initiatives to increase revenue and through the group-wide cost efficiencies to strengthen profitability, as earlier mentioned, particular focus on West and Central, where the challenges are the greatest. These measures will give effect over time.

Further to cash flow and net cash position on this slide. During the third quarter, cash flow amounted to minus SEK 122 million, of which minus SEK 28 million was from operating activities.

Cash flow from investing activities amounted to SEK 0 million as a result of a positive effect from adjustments to acquisitions and naturally negative from investments in tangible and intangible assets.

Cash flow from financing activities totaled minus SEK 93 million, mainly related to amortization of lease liabilities of minus SEK 29 million and repurchase of own shares of minus SEK 52 million.

The net cash reduction for the first 9 months of the year was mainly driven by M&A, share repurchases and lease amortization. Operating cash flow was negatively impacted by working capital movements related to timing effects in this quarter and tougher payment terms.

Now some details from our business units, starting with Nordic and Baltics on this slide. Revenue in Nordic and Baltics decreased by 4.4% to SEK 541 million, mainly driven by lower system sales compared to a strong quarter last year. Organically, revenue decreased by 3.2%. This was partially compensated by solid growth in the Services business, both support and cloud services.

Adjusted EBITA decreased by 13% to SEK 56 million as a result of the decline in system sales. The adjusted EBITA margin decreased to 10.3%, still being well above the group target of 8%.

Further to business unit U.K. on this slide. Revenue in the U.K. increased by 19% to SEK 203 million, driven by strong performance in both systems and services. Organic revenue growth was 8.4%. BlakYaks contributed positively to revenue with SEK 28 million.

Adjusted EBITA increased to SEK 15.9 million, corresponding to a margin of 7.8%. BlakYaks contributed SEK 12 million to adjusted EBITA with an exceptionally strong margin of 43%.

On the next slide, business unit West. Revenue in West decreased by 18.6% to SEK 176 million, reflecting lower activity in the system sales. Also, the earlier churn in service businesses as well as resource challenges within consulting services affect revenue negatively.

Adjusted EBITA amounted to SEK 0.6 million, corresponding to a margin of 0.3%. As mentioned, targeted measures are underway to reverse the trend, and we are seeing early signs of gradual recovery.

Lastly, business unit Central on this slide. Revenue in Central decreased by 9.5% to SEK 190 million due to a decline in both the system and services business, where new contracts did not fully offset previous customer churn in cloud services. On the positive side, support revenue increased with 2%.

Adjusted EBITA amounted to negative SEK 2.4 million, corresponding to a margin of negative 1.2%. The decline is linked to lower sales and a cost base not yet fully adapted to the current business climate. Also here, targeted measures are underway, and we are seeing early indications of improvement.

On the next slide, our financial targets. As mentioned, we had an organic decline this quarter, albeit compared to a strong quarter last year. Measured as last 12 months, sales growth is now at minus 2.6%. Hence, we still have a way to go to reaching our target of 5% of organic growth and additional 5% growth through acquisitions.

Adjusted EBITA margin last 12 months was 6.6%. As already mentioned, we have taken action to move back towards the long-term target of 8%.

We are in a net debt position at the end of this quarter being still well below the set leverage level of 2x EBITA.

ROCE is at 14.1% for last 12 months, where the decline is mainly attributed to the lower results.

This concludes the financial overview of the third quarter. And back to you, Magnus, for some final comments.

Thank you, Noora. So I mean, to conclude here and do the summary, I mean, during the quarter, we have been focusing on the cost efficiency program. We are now also taking the next step because as you see here, we still are not at all satisfied when it comes to the performance in some of our business units. So that will be a key focus area for us ongoing.

We are strengthening our profitability in some of the areas. I'm also glad to see that the U.K. are going in the right step. And I mean, you all know, I mean, it's a little bit uncertain when it comes to sort of geopolitics and things like that, that can change. But I will say that in short, it's -- my gut feeling is that when it comes to Europe, we have a good position since a lot of our customers is really looking into how and what they will do in the future and making sure that they connect the data.

It's also good to see that we are continue doing well in the Nordic and Baltics and that I'm also once again really glad to sort of welcome Consular into the Proact family. And I just want to highlight that the work that we initiated, it will take some additional time to get it. And I would say that to summary, the quarter is that we have done what we said earlier and execute upon that, and that is what we will continue to focus upon in the coming quarter.

So I'm really looking forward to give you more updates. And now I think it's time to open up for some questions.

Daniel, please.

Yes, there we go. A couple of questions. You highlighted the cloud order intake here, SEK 248 million, more than doubling year-over-year. Any larger deals standing out there? Or is it only a better broad market picture and demand for cloud services? And also geographically, what was driving that?

Yes. I mean we had, as you said, a really good quarter when it comes to our MCS sales. We had some larger deal actually, and that is also really glad in both Germany and Netherlands. And that is, of course, a good strong because as you have heard me talked about earlier, focus on sales is key. So that is what has happened during the quarter here.

Were there any deals that you would consider to be of kind of one-off character so that we do not -- so that we shouldn't extrapolate this level into the coming quarters? Or do you see an underlying better demand situation for these services?

I think the market challenges when it comes to financial in both Germany and the Netherlands remains a little bit challenging. So I would expect to be a little bit more careful around that. But the key focus for us now is to continue to work and also maybe narrow down our services and also get another grip on the cost situation. So that is what you should expect going forward.

Yes. Yes, that's clear. And when we look at cloud revenues, they were down some 1%, 2% here organically in Q3 due to the recent quarter's cloud order intake. But with this quarter's good order intake, I guess that the outlook for 2026 looks quite good for cloud revenue growth to turn positive. Is that a fair assumption?

Yes, it is, but you should also take and consider that onboarding some of our larger customers may take a while. And so you should also expect that it will take some time into that translate into the annual recurring revenue.

Okay. That's clear. That's fair. And then a question on the Nordics. How do you see that market as a whole developing in terms of demand and growth ahead? Is it a competitive market? Is it getting slightly better or slightly weaker?

I think the market is really competitive. I think in the Nordic market, we have a really good position, but we're also quite narrow in what we are doing. But I'm really glad that we, during the quarter here, signed an agreement with Consular because that will give us a much better position in Denmark, and then we will also sort of continue and expand. But we are, for sure, seeing the underlying market need is for sure there. But you read in the newspapers. So there is also a cost focus, especially in Sweden and some of our other Nordic countries. And that, of course, is a sort of a block from investments at some of our customers.

Yes. Yes, I understand. In the U.K. here, it looks like BlakYaks is growing nicely in 2025, contributing with more revenues than when you announced the acquisition earlier this year. Is that the main driver in the U.K. division? Or do you see a broad-based solid U.K. market as well?

That's a super good question, Daniel. BlakYaks, as you've seen, I'm really impressed about the performance. And also, as I said earlier, they are really experts in their specific need. And that also clearly demonstrates that our customer is really looking for the help, and they also appreciate the value that they get out of BlakYaks. That is the position that we should be in.

Also, this quarter is that we have seen the underlying business in U.K., we have seen that performance improvement, and that is related to the better sales and cost control. So in combination with BlakYaks and the underlying business, that is really positive sign. Now we just need to repeat that quarter after quarter, and then I will be happy.

Wonderful. And then a final question here on M&A opportunities. You mentioned Consular that's a NetApp partner in the Nordics. Are there lots of more M&A opportunities within the NetApp partner landscape in the Nordics or U.K. in particular? How fragmented is this space really?

I would say it varies a lot when it comes to the geographical market. U.K., as an example, is a really competitive market. There are some large players there that are quite dominant. But as and when it comes to M&A, we are extremely picky -- for us, it's super important that our M&A fits into our portfolio and so forth. So -- and as you know, we have a clear M&A agenda as well, and we want to grow in our -- as part of our strategy. I have been very clear that we should grow in the business units where we have a good home, meaning good performance because then it's much easier to handle and take care of an M&A. For now, that means U.K. and the Nordics. And I'm also glad that we, during this quarter, executed on the Consular.

And then I see we got some questions maybe in the chat here. What is the cause of the decline in Central and invest new competitors?

And that's a good question, Lena. And it's -- take with Central as I start with. Germany, as you all know, are struggling when it comes to finance. That creates a really tough business climate to operate in. Often, when there is tough climate, there is a race to 0 when it comes to margin. Proact is not sort of a low-margin company, meaning that we highly pressure the value that we provide our customers. So in Germany, we have had a lot of customer churn, and that explains the sort of revenue drop. Also, historically, we have maybe had too much focus internally on our integration issues when we come to our acquisitions. This we sort of have sorted out and we also changed the way of how we're dealing with acquisitions that we are now instead of creating a better sales focus. And also in Germany, we have not been good enough to adapting our cost structure compared to the sort of the churn and things like that. And that is something that we have been working with during the quarter. And as we said now, we are looking into it even further.

In Netherlands, we have had -- there is a little bit more consultative. And when it comes to challenging market, then often the consultancy business is the one that are hits the most. And once again, we have not really been good and fast enough to sort of compensate our cost structure. So that is the reason why we are not in the performance as we should be in both Central and West. But I and the full management is fully aware of it and I'm very also proud of the sort of members in our staff that are really committed in working resolving this.

Then I also got the question around the AI boom, why aren't you growing?

That is also a very good question. I think there is a lot of talk around the AI and there is very much boom around it. If you really then scratch the surface and dig into the numbers, a lot of the investment is made by Microsoft, Amazon and Google themselves. They are building an enormous infrastructure when it comes to AI and things like that. When it comes and translate to private customers and public customers, they are in the sort of the growth journey. And I would say that investment will come over time. But I do not expect that we, as a company, will see the same growth impact that you can see on some of the sort of when you read the report. So we really need to sort of scratch the surface a little bit to be a little bit more nuanced when it comes to the growth here. The only thing I can say around AI boom is that all the customers, they are seeing an increased need of data storage, and that is by far our core business.

Then I got the question here, how do you foresee a positive increased business in relation to coming NIS2 regulation?

And that is a super good question. We are working on a daily basis with a lot of customers because many of them are related and working a lot around this. We can help customers when it comes to services, and we can also help them build a resilient infrastructure. So that is what we will see.

And then I got a question from Ola Brageborn here. Net finance items amounted to minus SEK 19 million compared to SEK 3.3 million last year. What is the reason for that?

Maybe Noora, that's a question for you, you want to highlight.

Yes. That is mainly driven by FX effects in the quarter, unfortunately. Swedish krona is not working to our advance.

Yes. Sorry, please, Paul.

Yes. I was wondering, so in the U.K., besides the BlakYaks acquisition that has been impacting revenue positively. What is driving such a good demand for systems and services in the country compared to other markets?

I mean we have been -- first of all, we have been in place in U.K. for a very long time. We are sort of well recognized for the competence that we possessed. We have long-term customer relationship, and we have during the quarter here -- or sorry, the quarter of the last year, we have had a lot of focus on our sales capability and be even better in telling our story here. So I would say that is the sort of main drivers here.

Good. Then I would like to thank you all for attending this morning meeting here. And as I said, we are continuing on our journey, and I'm really looking forward to talk to you more in coming quarters. So all the best. Have a great continued Friday and talk to you soon.