Earnings call transcript: Proact IT Group Q2 2025 sees revenue decline

Proact IT Group reported a decline in revenue and earnings for the second quarter of 2025, as highlighted in their recent earnings call. The company experienced a 7.9% decrease in revenue, amounting to SEK 1,170 million. According to InvestingPro data, the stock is currently trading near its 52-week low, with a market capitalization of $277.37 million. Despite this, Proact continues to focus on strategic growth initiatives and operational efficiency.

Key Takeaways

• Revenue declined by 7.9% to SEK 1,170 million.
• EBITDA margin was reported at 6.5%.
• System sales and services revenue both saw decreases.
• New AI and hybrid cloud services were launched.
• The company remains focused on cost reduction and efficiency.

Company Performance

Proact IT Group faced challenges in the second quarter, with a notable decline in both system sales and services revenue. This performance is set against a backdrop of strong market demand for data infrastructure and increasing interest in AI and data management. Despite the revenue dip, the company continues to hold a strong position in the Nordic and Baltic regions, expanding its cloud and managed services.

Financial Highlights

• Revenue: SEK 1,170 million (7.9% decrease year-over-year)
• EBITDA: SEK 76 million (6.5% margin)
• System sales: SEK 641 million (10.7% decrease)
• Services revenue: SEK 530 million (4.3% decrease)

Outlook & Guidance

Proact aims for a 5% organic growth target and a long-term EBITDA margin of 8%. The company plans to invest in strategic growth initiatives and explore potential mergers and acquisitions in the Nordic, Baltic, and UK markets. InvestingPro data shows the company operates with moderate debt levels and analysts predict profitability this year, supporting its expansion strategy. Continued focus on the Central and West business units is expected to drive future performance improvements.

Executive Commentary

CEO Magnus Lund emphasized the importance of data, stating, "Data is the sort of key for every company." He also highlighted the company’s capabilities in AI integration, noting, "We are extremely good in sort of how to structure and build the environment so that you can actually add on an AI capability." Lund reiterated the focus on profitability as a prerequisite for growth, saying, "We prioritize profit because if you have profits, then you also can invest to accelerate top line growth."

Risks and Challenges

• Continued revenue decline could affect profitability.
• Market competition in cloud and data services remains intense.
• Economic uncertainties in key markets may impact growth.
• Execution of cost reduction measures is critical for margin improvement.
• Potential challenges in integrating new acquisitions.

Proact IT Group remains committed to its strategic goals, focusing on innovation and operational efficiency to navigate a challenging market environment. With a solid Altman Z-Score of 4.62 and historically low price volatility, the company maintains a stable financial foundation for future growth.

Full transcript - Proact IT Group AB (PACT) Q2 2025:

Magnus Lund, CEO and President, ProAct: Okay. Hey, and welcome everyone to ProAct q two report. I am Magnus Lund. I’m a CEO and president, of ProAct. And for you who doesn’t know me, I have been in the company for five years four years.

And before I became president, I was nominated for some Mars this year. Before that, I was running as a deputy group CEO, and I’ve been running our Nordic and Baltic business. So I am here today to give you an introduction of our Q2 result together with Nora, our CFO. And we will do as usual that I will give you a short introductions for you that are new to our company, what we’re doing and how we are generating our money. And for you that knows our company well, I hope that this will also be a good reminder of how we act as a company.

And then Laura will guide us through the financial details for the quarter. And then at the end, we will sum up with the questions and comments if you have. And then for the purpose of order, then just raise your hand, and then we will let you in with the questions. So good. So I’m glad to kick off here.

So we at TruAct, we are extremely good in taking care of our customers’ data and work with data in all the forms that are available when it comes to IT and technology. This is our core focus, and we have been doing this for over thirty years. And if you think about this, today, data is the sort of key for every company. So it doesn’t really matter what industry that you are in or what company that you’re running. At the end of the day, you need to have an IT infrastructure, and you generate a lot of data, both as individual, but also as a company.

And this is what we have been working with for thirty years, and we are really expert in this field. And, of course, we have sort of expanded around that, but our core business is related to data. We are today having a turnover of roughly SEK 5,000,000,000. And as you can see to the right here, we have been on a growth journey, both from a sort of profit perspective, but also on a revenue the last couple of years. And this is a good trajectory that we are on.

We are 1,200 experts and dedicated employees that are working with this. And as you can see on the colorful map here, our geographical present is within the Northern Europe, which in the red, I would say, in the Nordic and Baltics, have sort of our main footprint where we started thirty years ago, and then we have expanded out of that. We are having a revenue split of around half of our revenue coming from our services and half of that is coming from our system sales. So that is sort of a key thing. You can flip to the next slide, Christoph.

From an operational perspective, we have divided our company into four clear profit and loss units. And we have the first one, Nordic and Baltics. This is around half our companies. So this is by the far biggest business unit that we have. And then follow that, we have UK.

And then we have two others, Vest, which consists of Netherlands and Belgium. And then we also have Central, which consists of Germany and Czech. In our business units, we are also having our factories where we are creating and generating the services that we provide our customer. And I will talk more about what type of services further on. So we have four different delivery hubs, which are collaborating.

We have our own SOC that is up and running twenty four seven. And this is how we sort of have operated and divided our company. So if you take the next slide here, okay, Sofie. So ProAct, as a company, we have four distinct and clear revenue stream. And I will walk them through and give you a little bit more highlight around them so you get a better understanding of what we are doing.

Starting from left with our system sales. This is sort of the core of ProAct, the the foundation that were founded thirty years ago and that we are still doing and is very, very good at. This means that we are providing our customers with system advice recommendation of how they should build their modern data infrastructure. In reality, this means that we are working with the sort of best brands in the world, and we are targeting large and enterprise customer in this segment. And then we are helping them sizing and delivering the system to them that they need in order to run their company.

So what we are doing at ProAct is actually we’re working with the things that you don’t see, but you will, for sure, notice if, the IT system is not up and running. And this is what TruAct is doing on a core basis. Our system business, here, we are doing quite large deals. And I used to say that our system business is actually a recurring business. And with that, I mean that it is very seldom that a customer leave us.

We have very high customer satisfactions, And the system that we are providing our customer are part of the core IT infrastructure. And if you think about that, it’s very seldom you sort of do a heart transplantation and exchange your sort of system, which we are providing them. But it’s more likely that the customer also expands their their current system environment. And after some years, they also do a tech refresh. So from that perspective, I see our system business is is very sort of reoccurring.

I also want to reiterate that given the system business, the deals that we’re doing, they can be quite large. That means that sometimes it could be hard to evaluate us from quarter to quarter since it depends on if we get the system deal at the end of the quarter or in the beginning of the quarter. So when you’re looking at us and evaluating us as a company, I would recommend that you look into our system business longer term. Very tightly connected with our system sales is our support service. And that means that on the system that we are selling to our customer, we are providing also our technical staff that will help our customer to replace and repair if something gets broken.

This is a super good, example of good recurring revenue. The contract is often very long. It’s three to five years normally. And that means that over the time, we have a really tight and close collaboration with our customer. So our system and our support business is really tied together.

At the same time, as I mentioned earlier, we have four different hubs where we are delivering services. And the services that we are delivering, it’s actually sort of the same as we are selling to the system. That means that we can provide our customer with sort of modern, highly infrastructure as a service. Meaning that our customer, they don’t need to have their own staff. They don’t need to have their own competence.

We can provide them the same thing as a service. And also, what’s happening also around the world with all the uncertainty and things like that, we see a lot of customer that appreciating working with a European service provider, because there are a little bit too much uncertainty happening now when it comes to to cloud and American companies. So I would say that our managed cloud service is a very good add on in our portfolio. And secondly, and I will not for sure say that it’s the least, but it’s really our consultancy service. Here, we have super skilled talents and and consultants that are working very closely with our customer, providing, knowledge and technology of how to design a modern infrastructure.

All of these four different revenue streams are really tied together, and they’re also collaborating, meaning that it’s very often that we have a customer that maybe they start with a system deal, and then they expand to a managed cloud service or a consultancy consultancy service. We can move to the next slide, Jakub. As I mentioned also in the beginning, I would say that ProArc is probably in a better position today compared to when thirty years ago when when we the company was founded. In what is really, really key here is the data. And if you think about that, we, as individual, are generating more and more data.

Our society is sort of built upon IT and infrastructure, and every company also are using the data to do business. We want to do more analysis. We want to do more sort of refining of our customer data to understand more. And this is exactly what ProAct is working with, providing the sort of the the the storage and the IT infrastructure that enables our customer to do their business. And then secondly, this is also something I want to highlight and something that we discussed a lot with our customer is security.

As you all now know, cybersecurity is a real threat that that are happening more and more and more. This is becoming more and more complicated. The best way to to protect yourself around, cybersecurity is to protect your data. And the most sort of basic fundamental that you can do, which more and more customer actually are realizing, is that you’re taking a backup of your data and store that in a safe place. And if you take a backup of your data, then you also need storage.

And this is exactly what what TruArt is is working upon. And then we are helping a lot of our customer also to make sure to to size their their IT infrastructure and also design it so that when it happens, then you also can have a quick, restoration of the the data. And that, I will say, is very key. And the third trend that is also driving our growth is AI. And if you think about this, is that in order to get value out of AI, you need to train your model.

And the the in order to do that, you need a lot of data. And this is the key where ProAct have been working with for thirty years. So we are extremely good in sort of how to structure and build the environment so that you can actually add on an AI capability and work on the data that you have. And this is an increasing demand that we are seeing from our customer. So I would say that the underlying trend in in the business where we are positioning is very, very strong.

So the market is for sure there. And on top of that, I also would like to just emphasize this that in today’s uncertainty, especially when when Trump and The US and the sort of uncertainty, we have also a lot of dialogues with our customer around the cloud strategy and what is the best and things like that. So many companies are also rethinking about how is our long term strategy. Is it cloud that is our first? Is it really smart thing to to put all our critical business data in, like, American cloud provider, or should we rethink this?

And this is the sort of day to day dialogues that we have with our customers. And here, think we, as ProAct, have a good add on as being a trusted local European partner. Next slide, please. This is my favorite slide, and and I will not go into the detail of it. But but every company, as I said in the beginning, they are in a need for sort of data and more than IT infrastructure.

And if you look into the blue colors here, it doesn’t really matter if you store your data on prem as an infrastructure because then we can help you. Or if you sort of have a private cloud that is sort of a and purpose built cloud that you only can access, We can also help you around that. Or if you’re working with some other public cloud providers like Azure or Google or things, like that, we at ProWalk are super good on storage and data, and it doesn’t really matter for us where the data is allocated. We can help our customer around it. And then as I mentioned earlier, on top of that, if you want to work with AI, the first thing you need to do is secure your data.

And hence, AI infrastructure, that is a sort of a very good add on on what we are doing at ProAct. And if you want to use modern software development with cloud native and containers, that is exactly where we have a lot of competence. For example, as in our, consultancy company, Kunoa and Blackhawk that we acquired during last quarter. And then on top of that, as I said, everything is actually related to data protection, backup and recovery, security operations and everything. And then it all starts with data.

And then we, as a company, we have the possibility to provide this both as a service or if you want to buy it as a system. And we could do have done nothing around this if we wouldn’t have extremely skilled staff that are really knowledgeable around this. And this is what we are doing, and this is how ProAct earns money. So this, I think, it’s a short recap and quick, repetition of how we at ProAct are earning our money and what our core business and infrastructure is. So with that, I would take the next slide, Christoph, and then talk and walk more into the q two highlights here.

So all in all, as you can see, we released our report for, you know, forty minutes ago. We made a revenue of SEK 1,200,000,000.0 and EBITDA result of SEK 76,000,000, and that resonates in an EBITDA margin of 6.5. And Nora will walk through some of the details, but I just want to highlight part of it here. As I mentioned, in q one, we have actually done exactly what I said. We have had churn, and we have some performance issues mainly related to central invest.

Hence, we have, during the quarter, initiated a group wide action program that we are being executed as we speak. This program is really focusing on addressing some of the underlying things. So we are looking to skills review, where we focus our sales effort, and foremost, we are actually looking into building a more efficient organization. So this is exactly what I indicated in q one and what we now are doing in q two. I also really would like to stress that in the Nordic region, for example, and in combination with UK, we see a strong result.

We continue to grow in that area. And as you can see, and as I mentioned in the beginning, Nordic and The Baltics, that is more than half of our company. So even if you now have some performance issue that we are being addressed, We have more than half of our company that is growing. During the quarter, I’m also super glad that we launched a new service related to AI. So we added AI capability to our product hybrid cloud.

That means that our customer can directly access advanced AI workloads in our hybrid cloud environment. This means that our customer, they don’t need to invest millions in in setting up their own AI infrastructure. Instead, they can buy this directly from us as a service. This is also super, dedicated to customer working in regulated environment, meaning that we are providing this in a sovereign cloud, meaning that our customer know where the data is. It’s not outside EU.

And I this is also an increasing demand that we see from our customer that we can help and provide them. Also, mentioning during quarter was that we was named enterprise partner of the year by NetApp. This is offshore through testimony to our skills and experts that we have in the company. And the other two bullets here, I really would like to stress them because they even if they’re maybe are more into sort of administrative that we are sort of getting a decision from our annual meeting to initiate the share back program, and we also canceled some shares. This is a true tool that are really explaining the sort of the strength positioning that have.

We are doing a buyback program. We are working and having dividend as a company. And as we did in Qwet, we’re also investing and buying an acquisition of company like Blackjacks, for example. So all in all, with this, we sort of have a super strong position that we sort of, are are leveraging and are working. So all in all, I would say that we are focusing on what is working very well and working with enhancing that.

In parallel, that we have initiated sort of strong actions to work with the areas that we see that we can improve. So I think, all in all, q two, given where we are, I think it’s a solid result. So with this, I think, Nora, I hand it over to you to walk you through to some of the financial details from our business units, and then we wrap up with some question and summary at the end.

Nora, CFO, ProAct: Thank you, Magnus. Okay. Turning to the next slide. Revenue in the second quarter reached, as Magnus said, 1,170,000,000.00 Swedish krona, a decrease of 7.9%, driven by good performance in, The Nordic and Baltics and UK, offset by lower performance in business units West and Central. The decline in Central was driven by significantly lower system sales compared to an exceptionally strong comparison period.

Organically, revenue declined with 7.2%. System sales amounted to 641,000,000 Swedish krona, corresponding to a decrease of 10.7% for

Daniel, Analyst: the

Nora, CFO, ProAct: same with the same dynamic dynamics as total revenue. Services revenue amounted to 530,000,000 Swedish krona, a decrease of 4.3%. Overall, the service business developed weak this quarter. On the next slide, annualized reoccurring revenue amounted to 1,700,000,000.0 Swedish krona in the second quarter, a decrease of 2.8% compared to q two twenty twenty four. New cloud service agreements amounted to 141,000,000 Swedish krona in the second quarter compared to 133,000,000 Swedish krona last year.

Despite new contract signings, total cloud service revenue decreased by 5% to 272,000,000 Swedish krona, primarily due to contract terminations and customer churn in West and central regions. Nordic and politics and The UK showed positive development, but were unable to fully compensate for the decline. Next page, please. Adjusted EBITDA amounted to 76,000,000 Swedish krona, mainly due to lower revenue in the services business and reduced gross margin. Business unit nor Nordic and Baltic stands out this quarter with an EBITDA increase of 9,400,000.0 Swedish krona.

Central saw a decline of 21,000,000 Swedish krona following an exceptionally strong comparison period. West also decreased by 9,800,000, while UK remained largely flat. We have taken strong measures to reverse the negative trend, as Magnus was mentioning, both through initiatives to increase revenue and revenue and through group wide actions to strengthen profitability, Particular focus on West and Central where the challenges are the greatest. Further, the cash flow and net cash position. Our net cash position at the end the second quarter amounted to 100,000,000 Swedish krona compared to 330,000,000 Swedish krona at year end.

Total cash flow for the first six months was minus 222,000,000 with an operating cash flow of 182,000,000 Swedish krona. The year on year decline in operating cash flow was mainly due to lower operating profit. Cash flow from investing activities amounted to minus 241,000,000 Swedish krona, largely driven by the acquisition of Black Yachts in March along with continued investments in both tangible and intangible assets. Cash flow from financing activities totaled minus 163,000,000 Swedish krona, including a dividend payment of 64,000,000 Swedish krona, lease amortizations of 72,000,000 Swedish krona, and as Magnus also mentioned, repurchase of own shares amounting to 32,000,000 Swedish krona. Despite these cash outflows, we remain financially strong and continue to invest in strategic growth initiatives while maintaining capital discipline.

Now some details details for our business units, starting with Nordic And Baltics. Revenue in the Nordic And Baltics grew by 3.6% to 672,000,000 Swedish krona in the quarter, mainly driven by strong performance in cloud and support services. This was partly offset by a decline in consulting services. Systems revenue increased by 2.9% to 453,000,000 Swedish krona supported by several large deals. Service revenue grew by 5% to 219,000,000 Swedish krona with cloud services as the main driver.

Adjusted EBITDA increased by 16.3 to 67,000,000 Swedish krona corresponding to a margin of 10%, clearly above the group’s financial target of 8%. The improvement was mainly due to the growth in services business and continued good cost control. Note that adjusted EBITDA, excludes nonrecurring costs of 4,400,000.0 Swedish krona related to the ongoing action program. All in all, Nordic and Baltics continues to deliver solid and consistent performance. Further to business unit UK on the next slide.

In The UK, revenue increased by 18.7% to 212,000,000 Swedish krona supported by strong development in both system and service sales, including positive contributions from backyards. System revenue grew by 20.8% to 101,000,000 Swedish krona, while service revenue was up 16.8% to 110,000,000 Swedish krona. Consulting services increased by over 150%, mainly driven by Black Yachts. Cloud services also showed solid growth of 5.7%. Adjusted EBITDA came in at 12,000,000 Swedish krona, corresponding

Magnus Lund, CEO and President, ProAct: to

Nora, CFO, ProAct: a margin of 5.8%. Black Yachts contributed 10,000,000 Swedish kroner to EBITDA with an exceptionally strong margin of over 40%. Note that adjusted EBITDA excludes non reoccurring costs of 800,000.0 Swedish kroner. This unit west on this next slide. Revenue in West decreased by 14.4% to 176,000,000 Swedish krona, reflecting lower activity in both the system and services business.

System revenue declined slightly by 2.3%, while services revenue fell by almost 18%. The decline in consulting services was notable, down 37% due to resourcing challenges. Adjusted EBITA was negative at 2,800,000.0 Swedish krona, corresponding to a negative margin of 1.6%. Although cost savings were implemented, they did not fully offset the drop in revenue. We have initiated targeted actions to reverse the negative trend to cost of 4,000,000 Swedish krona, which are excluded from adjusted EBITDA.

Lastly, business unit central on this next slide. Revenue in central declined by 45.2% to 146,000,000 Swedish krona compared to a very strong performance in the same quarter last year driven by a few large system deals. Hence, revenues fell by 65.7, and service revenue declined by 18.1%. Adjusted EBITDA amounted to 3,400,000.0 Swedish krona with a negative margin of 2.4%. The decline is mainly due to the significant drop in revenue and cost base not fully aligned with current market conditions.

Several improvement measures are in progress aiming to stabilize performance going forward. Adjusted EBITDA excludes non recurring costs of 11,500,000.0 Swedish krona related to the action program. 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 the last twelve months, growth is now at minus 1.6%.

Hence, we still have a way to go reaching our target of 5% organic growth and an additional 5% growth via acquisitions. Adjusted EBITA margin last twelve months was 6.6%. As already mentioned, we have taken action to move back towards the long term target of 8%. As I also previously mentioned, we are in a net cash position, meaning that our leverage is well below the set level of two times EBITDA. Return on capital employed is at 13.2% for last twelve months, where the decline is mainly attributed to the lower result.

This concludes the financial overview of the second quarter. Back to you, Magnus, for some final comments.

Magnus Lund, CEO and President, ProAct: Well, super. And thanks, Nora, for guiding us through the financial details. So I just want to reiterate here that, I mean, we have a clear strategy here, and as I said in one, we we are really focusing on what is working, and then we’re actively quickly where we need to improve. And this is what exactly we have done during the quarter. I I see that we, a company, have a super strong position in the market, and I would say that it’s actually strengthening given the sort of demands and the trends that are now.

And and here, I think we have a very good position, position, especially when we are a local European trusted partner. As you can see here also, our sort of guiding star here are in The Nordics, where we continue to sort of grow and show the way. I think this is a combination of that we have a strong cost customer base and a really strong focus on profitability and trying to do as efficient as possible. During the quarter, we have actually implemented actions that also will, over time, improve our other business units. And as you saw here in The UK, we are seeing a really strong performance and especially glad that that Black Yachts has gotten such a good start within our group.

Then we continue to focus on business values and execution. And then over time, you will see that the long term, growth and, that I think, we, as a company, have a really strong position. And together with a committed team, so I’m really, really looking forward to talk more around that in coming quarters and reports. But I think for now, let’s open up with some questions. Daniel, it’s glad that you are first out here leading the way.

Yes.

Daniel, Analyst: Thank you very much, Magnus and Nora. I have a question on the cost reductions here in Central And West. Can you say how many people it will roughly expose?

Magnus Lund, CEO and President, ProAct: We we are doing quite substantially, what sort of, adjustments to the organization. And over time, we will see the impact of that. However, at the same time that we’re doing adjustment, we also maybe need to reset and hire people. So all in all, I would say that we are or have not communicated exact numbers except from the, as you can see in the financial reporting, the sort of impact that we are taking for doing the adjustments.

Daniel, Analyst: Okay. And then regarding any top line effects here, because it looks like you are, by intention, churning out some parts of your revenues and business, and we saw negative 7% organic growth here in Q2. Is it fair to see a further deceleration of that growth rate in the coming quarters given the reduction in number of employees? Or can you maintain roughly the current sales level, you think?

Magnus Lund, CEO and President, ProAct: I think if you’re looking into specific, maybe central and west, I think you should expect that we will have an improvement, but it will be weak. And the impact and effect of of what we are now executing, that will take some further quarters to see full effect of that. In the other business units, Nordic and Baltics and UK, we are sort of investing and accelerating. So we sort of compensate on that. Okay.

Daniel, Analyst: I see. That’s clear. And then a question on the German business here. Is is that up for sale from your end, or can you really recover that business into a stronger margin by shrinking the business from here?

Magnus Lund, CEO and President, ProAct: I mean, for the time being, we have fully focused, and and we know exactly what we are about to do and execute it. So selling is not, on top of our agenda for the time being.

Daniel, Analyst: Mhmm. Okay. So

Magnus Lund, CEO and President, ProAct: I think what we see short term is that the actions that we’re doing, that is what we will continue and focusing upon.

Daniel, Analyst: See. Okay. That’s clear. And then on Black Yachts, you mentioned some numbers here in q two look very strong, both on sales and margins, obviously. Do you see any early signs of cross selling between the groups?

Or is that too Absolutely.

Magnus Lund, CEO and President, ProAct: And that’s a good point that you raised, Daniel. And exactly and and during the quarter here, I think we have seen several cases coming in, going on both direction. And this is exactly what we sort of have planned and what we want to enhance and focus. So instead of putting a lot of focus on creating integration activities, instead, we have spent that time and focus on sales integration, meaning that we should sort of open up our books and and sort of provide and and give our customers more access to new technology and new offerings from our side. And maybe that is a contrast compared to the way that we have done it in Germany where we maybe focus more on integration and things like that.

So roughly, we are are turning that around, and Maria and the team in Germany are working really hard on that. And I think over time, we will see improvements also in Germany.

Daniel, Analyst: Okay. That’s clear. And then another question on M and A here. In The Nordics, specifically, now you’re growing in a quite challenging challenging market, at least from my view here with both hardware resellers and IT services companies declining currently, in general, I would say. Does that increase your appetite to capture any opportunities in the market from not stressed sellers, but maybe a bit more willing sellers in a tough market?

Magnus Lund, CEO and President, ProAct: Yeah. I mean, absolutely. And I think I said that also in q one. We when it comes to m and a, we are, for sure, looking into that actively, but we are sort of quite picky on, which target that we are seeing. And foremost, Nordic and Baltics and The UK since we sort of feel that we have this sort of momentum in the business that is very high likelihood that that will be the next place of our m and a.

Then in Central and West, I I long term, I I see that we will also get back to an acquisition base there, but we have some more work to do and also to prove that, you know, our profit, will be going in the right direction first. You need to have a sort of a proper home, before you look into to acquisitions. Otherwise, you create more problem for yourself. Yeah.

Daniel, Analyst: That makes sense. And in terms of targets, are you still looking for service related businesses more than hardware resellers?

Magnus Lund, CEO and President, ProAct: For me, I think it’s it’s important that we look into companies that can complement and strengthen our existing business. Per se, that doesn’t mean that it only needs to be service companies. If we find a good target that we see fits us and strengthen us, then then for sure that that will be on top of our agenda.

Daniel, Analyst: Yeah. I see. And then the final question here on the financial targets. As you showed in the presentation, you are a bit below both top line growth, margins and return on capital at the moment, and you are addressing this with actions. But how do you prioritize coming back to the targets?

I mean, for me, it looks like you are prioritizing return on capital and margins before growth given the cost reductions you do. But how do you think about them? And when is it reasonable to get back, you know, meeting these targets, all three? How many years out is reasonable to expect?

Magnus Lund, CEO and President, ProAct: I mean, first, let’s talk about the priorities. Here and now, I prioritize profit because if you have profits, then you also can invest to accelerate top line growth. And we have some homework to do, especially in business central invest. But at the same time, as you have seen in the Nordic and Baltics, we are way beyond our targets when it comes to margin there. So I think it’s the answer to your question is maybe that we will do a little bit different depending on what business unit that we are talking about.

And secondly, I also want to stress that as it is of today, Nordic and Baltics, that is more than half of the company. So it’s a sort of even if we have four business units, they are not sort of equally strong when it comes to impact and so forth.

Daniel, Analyst: Yes. That’s clear. And then the last part, when in time or how many years do you think it could take to meet all the three targets roughly?

Magnus Lund, CEO and President, ProAct: I would say that let us come back to that during the fall. I think here now, the focus for us is to sort of execute and do what we said that we are going to do. And then going forward, I will be more than happy to discuss this with you in coming quarters here.

Daniel, Analyst: Thank you very much. That’s all for me.

Magnus Lund, CEO and President, ProAct: Good. Do we have any other questions on the call here? Good. If then, I will wish you all a super pleasant, and have a really, really nice summer. Me and Ora and the full team are really looking forward to talk to you more again in our upcoming q three.

Probably, we’ll be here quicker than we think given the summer and everything. So once again, thank you for listening in, and looking forward to talk more shortly. Bye bye.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.