Corporate Governance

Presidents Statement

I am pleased with the company’s profit development in the fourth quarter, as our profitability has con-tinued to improve. Profit before tax increased to SEK 30 million, representing an increase of 30% compared with the same quarter last year. The company has managed to improve its profit before tax for five consecutive quarters, compared with the corresponding quarters in the previous years. That said, however, I am less pleased with our system sales. Sales at Business Unit UK are down by SEK 55 million, primarily due to a decline in system solution sales. Measures have been undertaken in the UK to return to growth and improve profitability. The weak development in the UK means that the company’s total revenues fell by 4% during the quarter. That said, however, all Business Units apart from the UK are showing growth for both the fourth quarter and 2014 as a whole. 

It is pleasing to see that there is ever-increasing demand on the market for the new types of operating service and cloud service offered by the company. New contracts worth SEK 41 million relating to cloud services have been concluded, and total cloud revenues have increased by 31%; clear proof of this. In addition, total service revenues have also undergone positive development during the quarter. This is of course extremely encouraging, as part of the company’s strategy involves focusing on precisely the above areas so as to increase the proportion of contracted revenues and improve the company’s profitability. A number of examples of transactions completed during the quarter are mentioned in the section entitled “Events during the quarter”.

The company’s stable profit development, good cash flow and reduction in net debt over the past year are creating opportunities to continue developing the company positively in years to come. Our expansion strategy aims to grow on existing markets and grow geographically. For the latter reason, we began an enterprise in Germany in late 2014, followed by an enterprise in the USA in early 2015. Our primary motivation for establishing an enterprise in the USA is to meet the requests of existing European customers wishing to have Proact as a partner on new markets. We have already succeeded in concluding a couple of contracts in the USA, worth a total of SEK 25 million. In the long term, I also perceive good opportunities to canvass potential new customers on this market from a stable foundation. 

Although the financial market has developed weakly in 2014, it is clear that areas such as private cloud services and the “Integrated systems” concept are enjoying a good rate of growth. The “Inte-grated systems” area now accounts for 15% of the total storage market in Europe. Our strategic choice, to focus on the above areas as well as helping our customers to reduce risk and costs and supplying flexible IT services, means that the company continues to retain its strong market position on the European market. All in all, this means that our objective – to grow at twice the pace of the market and achieve a 5% margin for profit before tax – is still within our grasp.

Martin Ödmand

CEO and President

 

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