Strong growth within both systems and services, with good development for new managed cloud services contracts
Kista, 26 April, 2022
Revenues for the quarter amounted to SEK 1,065 million (894), which corresponds to an increase of 19 per cent. Organically, the revenue increase was 4.9 per cent, with both systems and services growing 5 per cent organically.
Our recurring revenues, defined as revenues from managed cloud services and support services, developed strongly. Growth in the quarter was 21 per cent, were the acquisition of ahd contributed strongly. Recurring revenues also grew organically with good demand both for our support and our managed cloud services. We signed contracts for managed cloud services of SEK 122 million (78), corresponding to a growth of 56 per cent. We see a strong interest for many of our offerings in most of our countries, with the largest growth in won contracts in BU West for the first quarter. The consulting business also developed well in the quarter with strong demand for our competences.
During the first quarter we delivered a significant part of the system orders received at the end of 2021, but several of the orders we have taken during the first quarter will be delivered during the second quarter. We continue to see good underlying demand for our solutions, with a high volume of won deals. The delivery situation is unchanged without clear signs of improvement, and we thus have a larger order backlog into the second quarter than in previous years.
Adjusted EBITA during the quarter increased to SEK 52.5 million (41.6), corresponding to a margin of 4.9 per cent (4.7). The increase is a combination of higher revenues and continued good cost control. Gross margins in the quarter declined somewhat both for systems and for services. For the systems business the decline is primarily attributable to some larger customer deals with lower margins. In the services business, the margin has decline in BU Nordics & Baltics and in BU Central, primarily due to higher costs related to increased focus on quality, customer satisfaction and product development, which we expect to result in higher growth and profitability going forward. In BU West we see a continued good margin development after the action program that was implemented during 2021.
It makes me proud to see the initiatives and so many of our employees have engaged in to support Ukraine. Proact is currently not impacted by the war in Ukraine to any significant degree, as we don’t have any business or suppliers neither in Russia nor in Ukraine. However, uncertainties regarding the future global economy increases, as it relates to cost increases, inflation, and further impacts on supply chains. In addition we see an increased risk for cyber attacks, which further increases the focus on our security solutions.
During the quarter we have also closed a number of exciting new customer engagements. The international law firm Hoyng Rokh Moengier has chosen Proact as their supplier of workplace and infrastructure solutions. We have also renewed the frame agreement with Kammarkollegiet, which enables us to continue building IT infrastructure for the Swedish public sector. We have also continued to develop our services offering and during the quarter we launched a new monitoring services, based on Artificial Intelligence for IT Operations, where we offer comprehensive integrated monitoring and alerting services.
In conclusion, we can leave a quarter with good growth and improved profitability behind us.