Annual report
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Annual and Sustainability Report
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Proact Annual and Sustainability Report 2024 1 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements About us and the year in brief Proact in brief 3 Y ear in review 5 CEO’ s statement 6 Our business Targets 10 Strategy 12 Business Units 14 T rends 15 Offering 17 Customers 19 Sustainability Our contribution 23 Minimise environmental footprint 24 Resilient and sustainable IT services 25 Employees 26 Governance 28 EU taxonomy 30 Auditor ’s statement 34 Directors’ report Directors’ report 36 Risks and risk management 40 Corporate governance report 42 Board of Directors 45 Group Management 46 Financial statements Content 48 Group financial statements 49 Parent company financial statements 53 Notes 57 Certification 79 Audit report 80 Additional information Five-year summary 84 Definition of key ratios 85 Four reasons to own Proact shares 86 The share 87 Shareholder information 88 Contents Pages 36-79 constitute the company’s annual financial statements and consolidated financial statements. The statutory sustainability report is found on pages 10-13 and 23-33. This English version of the Annual Report is an unofficial translation. In case of any discrepancies in relation to the Swedish version of the Annual Report, the Swedish version shall prevail.
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2 Proact Annual Report 2024 Proact in brief 3 Y ear in review 5 CEO’ s statement 6 Proact Annual and Sustainability Report 2024 2 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements About us and the year in brief
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Our business Additional informationSustainability Directors’ report Financial statements Proact Annual and Sustainability Report 2024 3 About us and the year in brief 3 As a leading IT expert and long-term provider, we have ensured the security of our customers’ business-critical information since our founding in 1994. We now have around 1,200 specialists operating in 12 countries, mainly in Europe, with a track record of over 4,000 successful projects. Our size allows us to leverage economies of scale while remaining locally rooted and maintaining a strong understanding of our customers’ needs. Net sales total SEK 4,864 million, supported by a strong financial position. We have been listed on Nasdaq Stockholm under the symbol PACT since 1999. We provide unique specialist expertise in services and IT infrastructure, whether for customers’ own data centre solutions, private, public or hybrid cloud solutions. We provide business-critical solutions that give our cus - tomers confidence in the availability and reliability of their IT systems, as well as the protection and security of their information. Offices Revenue by sector Offentlig sektor 34% (36) Handel & tjänster 18% (23) Tillverkande industri 11% (11) Energi 7% (6) Telekom 8% (5) Bank, Finans 7% (4) Media 2% (3) Övrigt 13% (12) Public Sector 34% (36) Retail and Services 18% (23) Manufacturing Industry 11% (11) Energy 7% (6) Telecoms 8% (5) Banking, Finance 7% (4) Media 2% (3) Other 13% (12) Offentlig sektor 34% (36) Handel & tjänster 18% (23) Tillverkande industri 11% (11) Energi 7% (6) Telekom 8% (5) Bank, Finans 7% (4) Media 2% (3) Övrigt 13% (12) Public Sector 34% (36) Retail and Services 18% (23) Manufacturing Industry 11% (11) Energy 7% (6) Telecoms 8% (5) Banking, Finance 7% (4) Media 2% (3) Other 13% (12) Revenue by Business Unit Nordic & Baltics 52% (54) UK 15% (14) West 17% (17) Central 18% (17) Revenue by product area System 55% (56) Supporttjänster 13% (12) Managed Cloud Services (MCS) 23% (23) Konsulttjänster 9% (9) System 55% (56) Support service 13% (12) Managed Cloud Services (MCS) 23% (23) Consulting Services 9% (9) Proact in brief Who we are What we do
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Our business Additional informationSustainability Directors’ report Financial statements Proact Annual and Sustainability Report 2024 4 About us and the year in brief 4 We are driven by a passion to contribute to projects that foster a better and more sustainable society, using hybrid cloud solutions, digitalisation, automation, and cybersecurity. Our specialists work closely with customers and suppliers to create solutions that truly make a difference. In 2024, we updated our purpose, mission and values, while clarifying our employee promise, to better reflect who we are today and where we are headed. The model on the right demonstrates how the different elements work together and aims to clarify what stake- holders can expect from us. We call it The Power Of Together. Purpose > We unlock the power of data and technology to drive positive change. Mission > With highly skilled people and close collaboration, our mission-critical solutions enable businesses and society to thrive. Every day. > Win as one > Excel every day > Engage with passion Explore The Power Of Together > Collaborate with great people > Grow at work > Enjoy a caring culture > Contribute meaningfully Purpose & mission Values Employee promise EVP pillars We are big enough to act, yet small enough to care. Magnus Lönn CEO & President
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Our business Additional informationSustainability Directors’ report Financial statements Proact Annual and Sustainability Report 2024 5 About us and the year in brief 5 Strong development of the services business In 2024, Proact continued to show stable growth, despite mar - ket challenges. The company’s total revenue rose by 0.3 per cent to SEK 4,864.2 million (4,847.3), driven by robust growth in the services business, reflecting the growing demand for digitalisation and IT services. At the same time, systems reve - nue was somewhat adversely affected by longer sales cycles. Growth in recurring revenue and cloud service sales Recurring revenue from contracted cloud and support ser - vices rose by 1.9 per cent, equating to an annual rate of SEK 1,781 million (1,748). In the last quarter of the year, new cloud service agreements worth SEK 224 million (197) were signed, setting a new quarterly record. Moreover, a large number of current cloud service agreements were renewed, which not only enhances the long-term stability of our business model but also attests to the high level of customer satisfaction. Improved profitability Adjusted EBITA increased by 16.1 per cent to SEK 350.6 mil- lion (302.1), reflecting more efficient operations and stronger cost control. The adjusted EBITA margin reached 7.2 per cent (6.2), indicating sustained strong profitability in a market marked by uncertainty. Strengthened position in hybrid cloud solutions Our focus on hybrid cloud solutions has attract new customers during the year. Among these is the London-based law firm Teacher Stern, to which we sold a tailored hybrid cloud solu- tion with accompanying security services. We also secured Dole Nordic as a new customer in Sweden, where we provided a hybrid cloud solution along with our platform for modern application development. These new deals confirm our suc - cessful hybrid cloud offering and our ability to meet customers’ needs for both security and innovative IT solutions. Key ratios 2024 2023 Total revenue, SEK million 4,864.2 4,847.3 EBITA, SEK million 350.6 285.5 EBITA margin, % 7.2 5.9 Earnings before tax, SEK million 278.0 218.3 Net margin, % 5.7 4.5 Earnings per share (outstanding shares), SEK ¹) 8.15 6.29 Dividend per share, SEK ² ) 2.40 2.00 1) P roact has a long-term performance share scheme that may give rise to maximum dilution of 2.36 per cent. The company has bought back shares that are in its own custody, which affects the key ratios and figures. 2) T he Board of Directors will propose distribution of a dividend of SEK 2.40 per share to the 2025 Annual General Meeting for the 2024 financial year. Our ability to adapt to customer needs, especially in hybrid cloud solutions, has bolstered our position and led to improved profitability and greater customer satisfaction. Magnus Lönn CEO & President Completed integration of German ahd Towards the end of the year, we achieved a significant mile- stone in our efforts to develop and streamline operations by completing the integration of the German company ahd, which we acquired at the end of 2021. The integration has resulted in an enhanced service portfolio and streamlined delivery processes that are now consistent across the business. We expect these improvements to contribute to higher quality and efficiency, further strengthening our competitiveness and ability to deliver value to our customers. Increased customer satisfaction In the autumn, Proact conducted its annual customer survey. Our Net Promoter Score (NPS) increased to 62, compared to 59 last year. An NPS above 50 is considered very strong. Proact’s score also exceeds the industry average, which stands at about 40. This clearly demonstrates that our long-term focus on enhancing the customer experience and delivering high quality is yielding tangible and valued results. System revenues, SEK m. EBITA-margin, % % Intäkter, MSEK EBITA-marginal, % MSEK 0 1 000 2 000 3 000 4 000 5 000 20242023202220212020 0 1 2 3 4 5 6 7 8 %SEK million 0 1,000 2,000 3,000 4,000 5,000 20242023202220212020 0 1 2 3 4 5 6 7 8 SEK million SEK million SEK / SHARE Revenue and EBITA margins Year in review Revenue during the year Earnings before tax Proposed dividend
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Our business Additional informationSustainability Directors’ report Financial statements Proact Annual and Sustainability Report 2024 6 About us and the year in brief 6 Market development and growth in service business During the year our total revenue increased slightly to SEK 4,864 million (4,847). Demand for digitisation and cloud-based solutions continued to drive our services business, while systems sales declined slightly. We issued a profit warning in December following a tempo - rary drop in revenue towards the end of the year. Thankfully, the quarter ended with a stronger contribution from the sys t ems business and costs lower than expected, resulting in a smaller profit decline than anticipated. Our contracted cloud and support services developed positively during the year, with recurring revenues increasing by 1.9 per cent to an annual rate of SEK 1,781 million (1,748). The fourth quarter was particularly strong, with a new quar - terly record of SEK 224 million (197) in new contracts for cloud services. This confirms our position as a trusted partner for companies seeking stable, secure and scalable IT solutions. Among the most significant deals of the year was our collab - oration with London-based law firm Teacher Stern, where we delivered a customised hybrid cloud solution with integrated security services. The solution enables a combination of on-premises data storage and cloud services, ensuring both regulatory compliance and high performance for business- critical systems. Improved profitability and operational efficiency We have significantly strengthened our profitability through targeted efficiency measures. Adjusted EBITA increased by 16.1 per cent to SEK 351 million (302), while the EBITA margin improved to 7.2 per cent (6.2). We have implemented extensive initiatives to streamline our cost structure, including improved resource allocation and in - creased automation in our supply flows. At the same time, we have invested in skills development and technology innovation to meet customer needs more cost-effectively and with greater scalability. These actions have not only strengthened our profitability, but also created a more flexible and competitive organisation, ready for future growth. Increased customer satisfaction and a stronger brand We have continued to invest in the customer experience by improving our support, delivery and proactive maintenance processes. Our focus on quality and service has produced clear results - our latest customer survey showed that our Net Promoter Score (NPS) rose to 62, up from 59 last year. 2024 was a year of profit growth and strategic progress for Proact. Despite an uncertain market, characterised by longer sales cycles and increased investment caution, we have further strengthened our position as a leader in IT services and hybrid cloud solutions. By accelerating our services business, refining our customer offering and improving operational efficiency, we have laid a solid foundation for further value creation. By accelerating our services business, refining our customer offerings and driving operational efficiency, we have laid a solid foundation for continued value creation. CEO’s statement
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Our business Additional informationSustainability Directors’ report Financial statements Proact Annual and Sustainability Report 2024 7 About us and the year in brief 7 Turnover/EBITA Omsättning, MSEK EBITA, MSEK 2024202020242020 Turnover, SEK m. EBITA, SEK m. 2024202020242020 Recurring revenue SEK million 0 500 000 1,000,000 1,500,000 2,000,000 20242023202220212020 MSEK 0 5 00 000 1 000 000 1 500 000 2 000 000 20242023202220212020 An NPS of over 50 is considered very strong, and our score is well above the industry average of around 40. We have actively listened to customer feedback and implemented changes that make a real difference. For example, we have reduced support response times, made our delivery processes more transparent and strengthened our cloud and IT security consulting services. The increase in customer loyalty shows that we are successfully building long-term relationships based on trust and quality. Focus on security and sustainability We see growing demand for advanced cybersecurity solutions, driven by an increasingly complex threat landscape. This year, we further strengthened our cybersecurity services portfolio with solutions that effectively protect against new and evolving security threats. We work proactively to help our customers identify, manage and mitigate security risks, from increased regulatory requirements to threats to critical infrastructure and business-critical systems. In parallel with our focus on cyber security, we continue to develop more energy-efficient and sustainable IT solutions. By increasing the use of data centres powered by renewable energy and optimising the use of resources in our services, we are helping to reduce our carbon footprint, both for ourselves and for our customers. Future outlook In March, I took over as CEO after Jonas Hasselberg, who has successfully led and developed Proact for more than six years to the strong position we have today. We have worked closely together for the past three years, and I have been Deputy CEO for the past year. This has given me a deep understanding of the company and its potential. I approach my new role with great respect and enthusiasm and look forward to continuing to create significant value for our customers together with our 1,200 employees. The rapid pace of digitisation, the growing demand for cloud services and AI infrastructure, and the increased focus on IT security create very good market conditions for us. With a strong financial position, a broad and competitive service portfolio and a clear focus on innovation, we have a solid foundation for continued growth. We see opportunities to expand both organically and through strategic acquisitions that strengthen our offering and geographic presence. At the same time, we will continue to invest in our people, whose skills and commitment are critical to our success. Lastly, I would like to express my sincere thanks to Jonas Hasselberg and all our employees, customers and partners. Together we are creating a more digital, sustainable and secure future. Solna, March 2024 Magnus Lönn CEO & President Share of revenue 2020-2024 Systemintäkter, MSEK Tjänsteintäkter, MSEK EBITA-marginal, % %MSEK 0 1 000 2 000 3 000 4 000 5 000 20242023202220212020 0 1 2 3 4 5 6 7 8 System revenues, SEK m. Service revenues, SEK m. EBITA-margin, % %SEK million 0 1,000 2,000 3,000 4,000 5,000 20242023202220212020 0 1 2 3 4 5 6 7 8 CEO’s statement Share of renewable electricity consumption in data centres Net Promoter Score among customers
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Can you tell us about an unforgettable moment in the company’s history? For me, the most memorable moments aren’t the big milestones, like the 1999 IPO or when we reached our first billion in net sales. What I truly remember are the small wins – troubleshooting a tough support issue and gaining a satisfied customer or closing a deal after a long discussion. That’s what drives motivation and makes me want to reach for it time and time again. One hardware issue in southern Sweden led to an overnight stay in the data centre and a nerve-wracking morning waiting - would everything be fine when the engineers arrived? Luckily it did! In what ways has the company evolved over the years? The way we deliver solutions has evolved. Countless products and technologies have also emerged and disappeared; some have taken off, while others have been fleeting trends. One of our key strengths as an independent integrator is that we can choose to pass on what we don’t believe in. It’s fascinating to witness the arrival of technolo- gies that create a seismic impact – flash storage and virtualisation being prime examples. What elements of our corporate culture have endured over the years? What I’ve always appreciated about Proact is its remarkable ability to focus on what truly matters: our customers. Everyone lends a hand, both within and beyond their own departments. Our successes are the result of a collective effort, a genuine commitment to support and help one another – one of the things I value most about working here. #WinAsOne Proact Annual and Sustainability Report 2024 8 8 Celebrating a milestone! Retrospective from one of the founders Åke Beckman, Sr. Presales Architect, Sweden Our business Additional informationSustainability Directors’ report Financial statements About us and the year in brief
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9 9 Targets 10 Strategy 12 Business Units 14 T rends 15 Of fering 17 Customers 19 Proact Annual and Sustainability Report 2024 9 About us and the year in brief Additional informationSustainability Directors’ report Financial statementsOur business Our business
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Proact Annual and Sustainability Report 2024 10 About us and the year in brief Additional informationSustainability Directors’ report Financial statementsOur business Our long-term financial targets aim to deliver sustainable and profitable growth through a balanced approach to sales growth, profitability and capital structure. By ensuring stable margins, a healthy level of debt and a responsible dividend policy, we lay the foundation for long-term value creation for our shareholders. Debt levels Net debt should be no more than twice EBITDA. Capital employed Return on capital employed should amount to at least 20 per cent. Sales growth The average total sales growth should amount to at least 10 per cent per year. Dividends In the long term, the company intends to issue a dividend of 25-35 per cent of profit after tax. Margin The EBITA margin should amount to no less than 8 per cent. >10% % 0 1 2 3 4 5 6 7 8 20242023202220212020 Mål ggr -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Max 2 % 0 10 20 30 40 50 20242023202220212020 Mål % 0 5 10 15 20 25 30 20242023202220212020 Mål % -5 0 5 10 15 20 25 30 35 20242023202220212020 Mål % 0 1 2 3 4 5 6 7 8 20242023202220212020 Target Times -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Target max 2 % 0 10 20 30 40 50 20242023202220212020 Target % 0 5 10 15 20 25 30 20242023202220212020 Target % -5 0 5 10 15 20 25 30 35 20242023202220212020 Target % 0 1 2 3 4 5 6 7 8 20242023202220212020 Mål ggr -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Max 2 % 0 10 20 30 40 50 20242023202220212020 Mål % 0 5 10 15 20 25 30 20242023202220212020 Mål % -5 0 5 10 15 20 25 30 35 20242023202220212020 Mål % 0 1 2 3 4 5 6 7 8 20242023202220212020 Target Times -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Target max 2 % 0 10 20 30 40 50 20242023202220212020 Target % 0 5 10 15 20 25 30 20242023202220212020 Target % -5 0 5 10 15 20 25 30 35 20242023202220212020 Target % 0 1 2 3 4 5 6 7 8 20242023202220212020 Mål ggr -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Max 2 % 0 10 20 30 40 50 20242023202220212020 Mål % 0 5 10 15 20 25 30 20242023202220212020 Mål % -5 0 5 10 15 20 25 30 35 20242023202220212020 Mål % 0 1 2 3 4 5 6 7 8 20242023202220212020 Target Times -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 20242023202220212020 Target max 2 % 0 10 20 30 40 50 20242023202220212020 Target % 0 5 10 15 20 25 30 20242023202220212020 Target % -5 0 5 10 15 20 25 30 35 20242023202220212020 Target % 0 1 2 3 4 5 6 7 8 20242023202220212020 Mål ggr -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Max 2 % 0 10 20 30 40 50 20242023202220212020 Mål % 0 5 10 15 20 25 30 20242023202220212020 Mål % -5 0 5 10 15 20 25 30 35 20242023202220212020 Mål % 0 1 2 3 4 5 6 7 8 20242023202220212020 Target Times -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Target max 2 % 0 10 20 30 40 50 20242023202220212020 Target % 0 5 10 15 20 25 30 20242023202220212020 Target % -5 0 5 10 15 20 25 30 35 20242023202220212020 Target % 0 1 2 3 4 5 6 7 8 20242023202220212020 Mål ggr -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Max 2 % 0 10 20 30 40 50 20242023202220212020 Mål % 0 5 10 15 20 25 30 20242023202220212020 Mål % -5 0 5 10 15 20 25 30 35 20242023202220212020 Mål % 0 1 2 3 4 5 6 7 8 20242023202220212020 Target Times -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 20242023202220212020 Target max 2 % 0 10 20 30 40 50 20242023202220212020 Target % 0 5 10 15 20 25 30 20242023202220212020 Target % -5 0 5 10 15 20 25 30 35 20242023202220212020 Target >8% <2 times >20% 25-35% Sales growth for 2024 amounted 0.3 per cent (1.9). For the full year 2024, the company generated an EBITA margin of 7.2 percent (5.9) of revenue. A dividend of SEK 2.40 (2.00) per share is proposed for 2024, which is equivalent to 29 per cent (31) of profit after tax. For 2024, the return on capital employed was 19.7 per cent (16.3). At the end of 2024, the company had a gearing ratio of 0.16 times (-0.17). Outcome 2020-2024 Outcome 2020-2024Outcome 2020-2024 Outcome 2020-2024 Outcome 2020-2024 Long-term financial targets Targets
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Proact Annual and Sustainability Report 2024 11 About us and the year in brief Additional informationSustainability Directors’ report Financial statementsOur business The sustainability work focuses on reducing Proact’s climate footprint, enabling our customers to become more sustainable thanks to the products and services offered, and providing an attractive and gender-equal workplace. Here are the key targets that apply to the entire Group. SecurityScorecard Proact will achieve level A in SecurityScorecard by 2025. eNPS 1) Proact’s target is to achieve an eNPS, Employer Net Promoter Score of 45 by 2030. Net zero emissions Proact aims to achieve net zero greenhouse gas emis- sions throughout its value chain by 2050. Women The proportion of women in the Group should be at least 30 per cent by 2030. PUE Average PUE, Power Usage Effectiveness, at the data centres used by Proact will not exceed 1.2 by 2030. 0 1.2 A 45 30% Proact’s total greenhouse gas emissions amounted to 6,977 tonnes (5,911) in 2024. See page 24 for more information. In 2024, the average PUE was 1.31 (1.30). See page 25 for more information. The proportion of women was 19 per cent (19) in 2024. See page 27 for more information. Proact’s eNPS was 30 (31) in this year’s survey. See page 27 for more information. At the end of the year, Proact’s perfor- mance at group level was B (B). See page 25 for more information. n.d. – no data available Outcome 2020-2024 Outcome 2020-2024Outcome 2020-2024 Outcome 2020-2024 Outcome 2020-2024 PUE 0,0 0,5 1,0 1,5 2024202320222021 % 0 10 20 30 40 50 2024202320222021 Mål eNPS -50 -30 -10 10 30 50 2024202320222021 Mål 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2024202320222021 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2024202320222021 Mål % 0 10 20 30 40 50 2024202320222021 Mål 0,0 0,5 1,0 1,5 2024202320222021 Ton CO -e i.u eNPS -50 -30 -10 10 30 50 2024202320222021 2 PUE Target Target Target Target Ton CO -e n.d 2 PUE 0,0 0,5 1,0 1,5 2024202320222021 % 0 10 20 30 40 50 2024202320222021 Mål eNPS -50 -30 -10 10 30 50 2024202320222021 Mål 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2024202320222021 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2024202320222021 Mål % 0 10 20 30 40 50 2024202320222021 Mål 0,0 0,5 1,0 1,5 2024202320222021 Ton CO -e i.u eNPS -50 -30 -10 10 30 50 2024202320222021 2 PUE Target Target Target Target Ton CO -e n.d 2 PUE 0,0 0,5 1,0 1,5 2024202320222021 % 0 10 20 30 40 50 2024202320222021 Mål eNPS -50 -30 -10 10 30 50 2024202320222021 Mål 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2024202320222021 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2024202320222021 Mål % 0 10 20 30 40 50 2024202320222021 Mål 0,0 0,5 1,0 1,5 2024202320222021 Ton CO -e i.u eNPS -50 -30 -10 10 30 50 2024202320222021 2 PUE Target Target Target Target Ton CO -e n.d 2 PUE 0,0 0,5 1,0 1,5 2024202320222021 % 0 10 20 30 40 50 2024202320222021 Mål eNPS -50 -30 -10 10 30 50 2024202320222021 Mål 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2024202320222021 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2024202320222021 Mål % 0 10 20 30 40 50 2024202320222021 Mål 0,0 0,5 1,0 1,5 2024202320222021 Ton CO -e i.u eNPS -50 -30 -10 10 30 50 2024202320222021 2 PUE Target Target Target Target Ton CO -e n.d 2 1) I t was decided during the year to replace the eNPS target with the Engagement Index in 2025. Long-term sustainability targets A B C D E F 2021 2022 2023 2024 n.d. n.d. B B Target
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Proact Annual and Sustainability Report 2024 12 About us and the year in brief Additional informationSustainability Directors’ report Financial statementsOur business The overall strategy remains stable with a continued focus on strengthening Proact’s market position in hybrid cloud services. Helping customers to store, protect and drive business value from data is at the heart of this strategy. We have made significant strides in our five focus areas since last year. Strategy 1. Broaden our market position 2. Accelerate our hybrid cloud offering and maintain our strong position in respect of data centres 3. High quality and standardised service delivery with satisfied customers 4. Focus on employees 5. Accelerate growth through acquisitions Our five strategic focus areas
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Proact Annual and Sustainability Report 2024 13 About us and the year in brief Additional informationSustainability Directors’ report Financial statementsOur business Strategic focus areas Priorities Follow-up, 2024 1. Broaden our market position Our offering, geographical spread, expertise and strong partner relations provide us with good opportunities to further strengthen our market position as a sustainable and secure provider of hybrid cloud services. In strategic partnerships, we assist our customers in their efforts to digitalise, create efficiency and flexibility, and secure their data. • Develop value-creating hybrid solutions that leverage Proact’s broad expertise and sustainable offering. • Further reinforce our position as an advisory partner for customers’ digitalisation journey. • Reinforce our position on cybersecurity. We have achieved strong returns from previous acquisitions and have further strengthened our position as a hybrid cloud service provider across all markets. We have invested in our position as an advisory partner in hybrid cloud expertise to support our customers’ digitalisation journey. During the year, we strengthened our brand as a specialist in hybrid cloud services by refining the company’s purpose and mission. During the year, we further improved our customer interactions, leading to an increase in an already strong NPS from 2023. 2. A ccelerate our hybrid cloud offering and maintain our strong position in respect of data centres We will continue developing our portfolio in both data centres and hybrid cloud services through inter - a ction with our partners and customers. We perceive major opportunities in value-added services on top of the public cloud with our specialist expertise and consultancy in areas such as hybrid cloud services through close collaboration with our partners and customers, Kubernetes architecture, data management and AI solutions. • Package our own consultancy services around the public cloud. • Continue to standardise our offering in respect of our own cloud services. • Grow our sales of hybrid cloud services. • Broaden and deepen partnerships with leading suppliers • Further reinforce our data centre offering with sustainable solutions to meet future needs, including AI and application development. We have further strengthened our position as an advisor on transformative digitalisation journeys towards private and public clouds. We have strengthened our hybrid cloud offering and further developed services in cybersecurity and AI. The public cloud offering has been enhanced with a cross-border delivery model for public cloud and consultancy services. During the year, we have successfully delivered several digitalisation projects for customers’ business- critical infrastructure in both healthcare and industry. 3. High quality and standardised service delivery with satisfied customers We aim to maximise cost efficiency in our delivery hubs through standardised processes and data-driven decision-making. Automation and coordination of programmes also ensure fast and accurate delivery. Our commitment to continuous improvement keeps us at the forefront, creating a dynamic organisation that is adapted to the demands of the market. • Further improvement of quality, efficiency and the customer experi - ence through data-driven improvements • Reduced time-to-market and faster handover in service delivery. • Continuous development and automation of the delivery model across our four delivery hubs. We have continued to develop more efficient processes and procedures for delivery at our hubs during the year. We have streamlined our service delivery and related administration by means of standardisation and automation, with clear monitoring of results. During the year, we have upgraded our IT support customer portal and launched automated invoicing. We have taken further steps towards sustainable, secure service delivery. At the same time, we have completed integration of the ahd acquisition in Germany, including the service portfolio and operational functions. 4. Focus on employees Our employees and our culture are at the very heart of our corporate strategy. Our core values permeate our corporate culture. We believe in the future through our employees, driven by talent, commitment and continuous improvement. Proact endeavours to be an attractive employer for both current and future employees. • To be an attractive employer with clearly defined values and added value for our employees. • Maintain a unified culture in order to clearly articulate and personalise the Proact brand. • Provide our employees with opportunities to influence through their work, grow their expertise, and fulfil their potential. • Further development of leaders is crucial for engagement and sustain - able results in a diverse and inclusive environment. We have refined and launched Proact’s new employee promise, which is being rolled out throughout the organisation. We have continued to invest in recruitment to further improve the candidate experience and strengthen our attractiveness as an employer. We have continued our global leadership development in 2024 with emphasis on strategy and employee engagement. We are actively working on continuous improvement so that we remain an attractive employer. We also reached a significant milestone in the company’s history, inviting all employees to celebrate Proact’s 30th anniversary in Stockholm. 5. Accelerate growth through acquisition The emphasis remains on accelerating our strategic agenda with company acquisitions in order to further strengthen hybrid cloud competences and increase market share. • Focus on growth and broadening the service portfolio with consultative competences in line with the company’s hybrid cloud strategy. • Increase our market share in focused regions. • Integrate and develop acquired companies. During the year, we have maintained our focus on integrating and leveraging synergies from past acquisitions. The acquired companies’ offerings have been integrated into Proact’s overall customer offering and brand We have continued to actively identify potential acquisition candidates with full dedication. We prioritise acquisition candidates whose culture, values, and leadership align with Proact’s and who also have a balanced valuation. No acquisitions have taken place in 2024.
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Proact Annual and Sustainability Report 2024 14 About us and the year in brief Additional informationSustainability Directors’ report Financial statementsOur business FACTS Revenue: SEK 2,529 million Adjusted EBITA: SEK 259.5 million EBITA margin: 10.3% Earnings before tax: SEK 270.8 million Countries: Denmark, Estonia, Finland, Latvia, Lithuania (divested on 28 August 2023), Norway, Sweden and the US FACTS Revenue: SEK 708 million Adjusted EBITA: SEK 26.1 million EBITA margin: 3.7% Earnings before tax: SEK 18.2 million Countries: United Kingdom FACTS Revenue: SEK 848 million Adjusted EBITA: SEK 36.4 million EBITA margin: 4.3% Earnings before tax: SEK 18.4 million Countries: Belgium and the Netherlands Nordic & Baltics UK West Improved profitability through increased gross margin In Nordic & Baltics, profitability developed favourably, driven by the increased demand for support and cloud solutions. Rev - enue dropped by 3.4 per cent, including an organic decline of 2.8 per cent. Systems revenue decreased by 8.1 per cent, with an organic decrease of 7.7 per cent. At the same time, service revenue grew by 7.8 per cent, with organic growth of 8.9 per cent, mainly driven by continued positive developments in support- and cloud services. Adjusted EBITA amounted to SEK 259.5 million (206.9) and the EBITA margin strengthened to 10.3 per cent (7.9). The improvement can be attributed to an increased gross margin, which led to a positive development of both EBITA and EBITA margin for Nordic & Baltics. Strong demand drives system revenue During the year, revenue growth in Business Unit West was 3.1 per cent, representing organic growth of 3.5 per cent, with currency effects explaining the difference. Systems revenue grew by 12.2 per cent, of which organic growth was 12.7 per cent, reflecting continued strong demand. Service revenue remained unchanged, but organic growth was 0.4 per cent. Adjusted EBITA amounted to SEK 36.4 million (23.2) and the EBITA margin was 4.3 per cent (2.8). The positive devel- opment can be attributed to higher revenue and an improved gross margin. Growth despite reduced demand for support services Business Unit UK showed positive development during the year, with a revenue increase of 7.0 per cent and organic growth of 4.5 per cent. The difference can mainly be attributed to currency effects. Systems revenue showed strong growth, up 17.2 per cent, including organic growth of 14.6 per cent over the previous year. At the same time, service revenue declined by 0.7 per cent, with an organic decline of 2.9 per cent. Al- though growth in cloud and consultancy services was robust, it could not fully offset the lower demand for support services. Adjusted EBITA amounted to SEK 26.1 million (21.3), and the EBITA margin improved to 3.7 per cent (3.2). Profitability was strengthened by slightly higher gross margins compared to the previous year, which contributed to a positive develop- ment in EBITA. FACTS Revenue: SEK 888 million Adjusted EBITA: SEK 31.2 million EBITA margin: 3.5% Earnings before tax: SEK -22.9 million Countries: Czech Republic and Germany Central Integration costs affect profitability In Business Unit Central, revenue increased by 6.6 per cent during the year, including organic growth of 7.4 per cent, with currency effects explaining the difference. Systems revenue in - creased by 19.6 per cent, with organic growth of 20.8 per cent, driven by strong demand. Service revenue decreased by 4.7 per cent, with an organic decline of 4.2 per cent, mainly due to lower sales of consultancy services. Adjusted EBITA amounted to SEK 31.2 million (34.0) and the EBITA margin was 3.5 per cent (4.1). EBITA and EBITA margin were positively impacted by higher sales in the systems busi - ness, offset in part by integration costs related to previously acquired businesses. Profit before tax is negatively affected by impairment of subsidiaries of SEK 21.5 million (0). Revenue and EBITA margin, Nordic & Baltics Revenue and EBITA margin, UK Revenue and EBITA margin, CentralRevenue and EBITA margin, West 15% of Proact’s revenue 17% of Proact’s revenue 18% of Proact’s revenue 52% of Proact’s revenue System revenues, SEK m. EBITA-margin, % System revenues, SEK m. EBITA-margin, % System revenues, SEK m. EBITA-margin, % System revenues, SEK m. EBITA-margin, % % Intäkter, MSEK EBITA-marginal, % MSEK 0 750 1 500 2 250 3 000 20242023202220212020 0 3 6 9 12 % Intäkter, MSEK EBITA-marginal, % MSEK 0 250 500 750 1 000 20242023202220212020 0 3 6 9 % Intäkter, MSEK EBITA-marginal, % MSEK 0 250 500 750 1 000 20242023202220212020 0 2 4 6 % Intäkter, MSEK EBITA-marginal, % MSEK 0 200 400 600 800 20242023202220212020 0 2 4 6 8 %SEK million 0 750 1,500 2,250 3,000 20242023202220212020 0 3 6 9 12 %SEK million 0 250 500 750 1,000 20242023202220212020 0 3 6 9 %SEK million 0 250 500 750 1,000 20242023202220212020 0 2 4 6 %SEK million 0 200 400 600 800 20242023202220212020 0 2 4 6 8 Our Business Units
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Proact Annual and Sustainability Report 2024 15 Additional informationSustainability Directors’ report Financial statements About us and the year in brief Our business Customer challenges and opportunities Digitalisation continues to be a dominant trend in all industries. In addition to digitali - sation, organisations are investing in solutions that use artificial intelligence (AI) and m achine learning (ML) to strengthen their competitiveness. Generative AI, which is still in development, is expected to transform workflows and empower organisations to make well-informed decisions. Data volumes requiring management are expected to expand considerably as new technologies gain wider acceptance. At the same time, the Internet of Things serves as a catalyst for digitalisation in sectors such as manufacturing, healthcare, transport and development of smart cities. These developments are paving the way for new IT- and data-driven business models, enabling organisations to identify and leverage new growth opportunities. New opportunities are accompanied by new challenges. IT departments are facing growing infrastructure complexity and must operate within constrained resources and tighter IT budgets. Keeping pace with rapid technological advances also brings in - creased risks, particularly in terms of cybersecurity and data protection. Organisations t herefore need strategic and agile solutions to balance innovation and risk manage - ment in an increasingly digitalised and competitive environment. Customer challenges and opportunities Rapid digitalisation and the growing acceptance of cloud services are accelerating the emergence of hybrid clouds as a key market solution. The need for sustainable, flexible, resilient, scalable and cost-effective IT systems is reinforcing this trend. As companies become more mature in harnessing hybrid cloud benefits, they combine private and public clouds with their own data centres to create an optimal solution. Given the shifting demands for data management, workflows, and applications, businesses must thoroughly assess their needs for scalability, flexibility, availability, security, and legal compliance. By making informed decisions, they can ensure that their hybrid cloud strategy fosters both business innovation and long-term targets. Customer challenges and opportunities The number of cyberthreats and data breaches has increased significantly, driven by geopolitical developments and rapid advances in AI. Meanwhile, the demand for un i nterrupted access to data and information platforms, at any time and from any location, continues to grow, increasing the risk of breaches. Hackers are using AI and machine learning to carry out increasingly advanced and sophisticated attacks. Cybercrime has now developed into a multi-billion dollar industry. Many companies lack both the resources and the expertise required in cyber - s ecurity and the constantly evolving regulations for information management. In the current landscape, we are unable to provide IT services and solutions without first ensuring that all security considerations are properly managed. Opportunities for Proact Proact offers expertise, experience and services to support companies in their digitalisation journey — from concept development and IT solution implementation to enabling customers to achieve measurable results from digitalisation. Proact helps businesses transform data into a competitive edge by facilitating data analytics, AI, and machine learning. As organisations struggle to find specialist expertise for complex digitalisation projects, Proact’s consultancy services are increasingly vital. With its local presence, technical expertise and comprehensive portfolio of products and services, Proact is well positioned to meet market needs. Moreover, the rapid pace of development is driving higher regulatory standards, especially in finance, healthcare and law. With its experience here, Proact can ensure that customers successfully navigate both digital transformation and regulatory compliance. Opportunities for Proact Customers face significant challenges in leveraging software as a service and cloud infrastructure to their full potential. The potential of different cloud solutions, combined with the need for modernised IT infrastructure, is driving growing complexity for busi - nesses. With Proact’s extensive portfolio and expertise, we are well equipped to help c ustomers navigate the challenges of hybrid cloud architectures. Limited access to in-house resources and specialist expertise in many companies highlights the growing demand for Proact’s services. Moreover, we have a key oppor - tunity to help our customers achieve their sustainability targets by providing efficient, s ecure, and sustainable IT solutions. Opportunities for Proact As an IT security partner, Proact offers its customers unique access to both local and international specialist expertise. Our collective expertise, integrated with advanced security solutions and services, is crucial in proactively preventing intrusions, quickly identifying threats, and efficiently handling security incidents. This is accomplished through round-the-clock monitoring via our Security Operations Centre (SOC). Our backup and disaster recovery solutions provide important peace of mind by en - suring rapid recovery of data and applications, allowing customers to rapidly return to n ormal operations, with minimal impact on both employees and customers. Our secure solutions serve as the basis for long-term, sustainable and digital business operations. The IT market has proven to be more resistant to economic downturns than other sectors. Economic uncertainty, rising interest rates, and geopolitical instability have weighed on the global economy, curbing spending appetite. Although companies have faced budget cuts and austerity, IT is viewed as essential for ensuring continuity and competitiveness. The three key customer trends are presented below: Enabling flexible and sustainable IT through hybrid clouds CybersecurityDigitalisation, AI and machine learning
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Proact Annual and Sustainability Report 2024 16 Additional informationSustainability Directors’ report Financial statements About us and the year in brief Our business Local and regional resellers and integrators who, like Proact, sell infrastructure products from global manufacturers. They provide varying degrees of added value in terms of technical expertise, consultancy services and support services. Global product manufacturers who work with resellers and integrators such as Proact, and who also sell their products and services directly to customers. They usually offer limited or no local technical exper- tise or local consultancy and support services. Local and regional providers of operating services and cloud services. These competitors are either resellers of standardised cloud services or offer their own operating services and cloud services with an ambition to develop a portfolio of services (or hybrid cloud services) and expertise that matches the Proact offering. Proact’s geographical presence, together with our strong portfolio of market-leading products and own consultancy, support and cloud services, gives us a clear competitive advantage. We have strengthened our competitiveness in recent years through recruitment and service development, as reflected in customer satisfaction (NPS), increased additional sales and new business in our growth areas. Competitive landscape Proact’s competitors can be categorised into three main segments
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Proact Annual and Sustainability Report 2024 17 Additional informationSustainability Directors’ report Financial statements About us and the year in brief Our business Proact has long-term close relationships with a small number of carefully selected strategic suppliers. Proact has a well-defined innovation process which allows it to evaluate new services and products from existing partners in a structured manner while also seeking and taking on services and products from new partners. This process ensures that Proact is always at the cutting edge of technical development and thereby able to use the very latest technology when designing new services and new IT infrastruc - ture for its customers. Examples of top providers include Azure, Cisco, Commvault, Dell, Equinix, Isovalent, Juniper, NetApp, Nvidia, Palo Alto Networks, Red Hat, Securonix, Veeam and VMware. In most cases, Proact works in partnership with two or more different suppliers within each technical field. This makes it possible for Proact to maintain extremely high levels of spec - i alist expertise and awareness with regard to each product, while also reducing the risk of business disruptions should the relationship with any supplier be altered for any reason. Private clouds Proact provides technology and expertise to create private clouds that can be combined with Proact’s IT as a Service. Everything is managed by Proact at the customer’s own data centre in order to meet maximum security requirements. Local clouds Proact offers local provision of cloud services from its data centres. These cloud services are managed in accordance with local laws and regu - lations in order to meet the needs for local delivery with complete control over all data. Public clouds The final building block involves guiding customers towards effective utilisation of public cloud services from global cloud providers as an integral part of the customer’s hybrid cloud architecture. The Proact offering reflects our clear strategic positioning as a specialist in the field of sustainable and hybrid cloud services. Our close relationships with a few carefully selected partners strengthen our offer. New demands are placed on IT architecture in a market with an increasingly rapid pace of change and new, more digital players. The challenge lies in balancing the demands for rapid change and growing regulatory requirements with an effective supply of IT. Proact helps customers streamline their supply of IT to meet the demands of their operations and the market. Unique hybrid cloud mix To take full advantage of the different options for the supply of IT, the key for Proact’s customers is to find their own unique hybrid cloud mix by combining their own data centres with ser- vices from local cloud providers, as well as global public clouds. Proact is in a unique position to deliver all elements of a hybrid cloud architecture. We can effectively address the specific needs and challenges of our customers with the right combination of cloud services and our own IT infrastructure. Proact’s hybrid cloud services offer infrastructure and platforms for traditional applications, while also supporting modern applications for digital transformation and AI imple - mentations. Products and services Proact’s offering covers everything from advisory, trans- formative consulting, cybersecurity, storage and backup, to disaster recovery, support, operations, monitoring, networking, and packaged cloud services and container platforms. Consultancy and advisory services Cybersecurity Storage Proact Hybrid Cloud Backup and disaster recovery Support and service management Networks Kubernetes container platform Services and products Offering Partners strengthen our offering
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Proact Annual and Sustainability Report 2024 18 Additional informationSustainability Directors’ report Financial statements About us and the year in brief Our business Our customers can be found in a variety of industries. The common denominator is that their operations are based on business-critical data and advanced IT solutions. The special - ists at Proact have extensive experience in understanding the challenges and operations of their customers. As a strategic partner, we guide them through their digital transformation and help them define their IT needs. With a clear IT strategy, Proact designs a suitable solution for each customer. We are there for our customers throughout the journey, from analysis and design to implementation, optimisation, support, security and operations, regardless of the delivery model. Customer infrastructure We deploy the solution in the customer’s own data centre when there is a preference for full control over the location of the information. As a service We design and deliver managed cloud services regardless of where they are located – in the customer’s data centre, in Proact’s data centre, or in a private, public, or hybrid cloud – providing maximum flexibility. Support, monitoring, management and security We provide a range of support, monitoring, management, and security services, easing the workload for our customers’ IT teams and ensuring top-quality, expert assistance around the clock. Read more about our offering on page 17. We help you define your IT needs Business and IT alignmentYour business Public cloud IaaS | SaaS | PaaS Customer data centre Private Hosted cloud Co-location | Dedicated Security Support Monitor Manage Secure We help you focus on your core business Transform Migrate Connect Design We help you implement the best solution for you Hybrid cloud StrategyImplementationOperations Hybrid cloud services How we transform IT and guide our customers on their journey to the cloud
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Proact Annual and Sustainability Report 2024 19 Additional informationSustainability Directors’ report Financial statements About us and the year in brief Our business Proact’s customers are information-intensive companies and authorities with large volumes of business-critical digital information and advanced IT needs. A well-functioning supply of IT is crucial for our customers’ operations. Customers Proact’s customers are information-intensive companies and authorities with large volumes of business-critical digital information. A well-functioning supply of IT is crucial for our customers’ operations. The need for an effective IT environment spans all indus - t ries, and as a result, our customers are found in many different sectors. Proact works closely with customers locally, while also har- n essing the advantages of being an international company. As an independent specialist, Proact’s objective is always to understand customers’ needs and requirements from both a business and a technical perspective. Proact’s customers are mainly large and medium-sized enter - prises and authorities, and Proact currently enjoys balanced revenue distribution between different industries. The three biggest industries are Public Sector, Retail & Services and Manufacturing Industry. Proact often has long-term customer relationships and in 2024, recurring customers accounted for approximately 97 per cent (97) of the Group’s revenue. The ten largest customers in 2024 accounted for 22 per cent (20) of revenue and no single customer accounted for more than 4 per cent (3). The largest customers are active in a number of the countries in which Proact operates. Customer surveys One of the strongest driving forces for Proact is to establish good, long-term relationships with our customers. Proact continuously measures customer satisfaction and monitors and improves services in order to provide the best possible customer experience. 2024 Net Promoter Score (NPS) NPS measures customers’ responses when asked how likely they are to recommend Proact to others. The purpose of this metric is to gauge customer experience and indicate growth opportunities. The value of the metric can range from -100 to +100. The average NPS for Proact’s industry is 39-43. This year, Proact received an NPS of 62 (59). Participants who rate companies in the survey are divided into groups based on the score they give a company. Par- ticipants who give scores of 9-10 are deemed to be active promoters of the company. “Passives” give scores of 7-8, and participants who give scores of 6 or less are considered de - tractors. Using this classification, 69 per cent (65.5) of Proact’s customers in the survey are promoters, 24 per cent (28) are passives and 7 per cent (6.5) are detractors. Revenue by sector Offentlig Sektor 34% (36) Handel & Tjänster 18% (23) Tillverkande Industri 11% (11) Energi 7% (6) Telekom 8% (5) Bank, Finans 7% (4) Media 2% (3) Övrigt 13% (12) Public Sector 34% (36) Retail and Services 18% (23) Manufacturing Industry 11% (11) Energy 7% (6) Telecoms 8% (5) Banking, Finance 7% (4) Media 2% (3) Other 13% (12) Offentlig Sektor 34% (36) Handel & Tjänster 18% (23) Tillverkande Industri 11% (11) Energi 7% (6) Telekom 8% (5) Bank, Finans 7% (4) Media 2% (3) Övrigt 13% (12) Public Sector 34% (36) Retail and Services 18% (23) Manufacturing Industry 11% (11) Energy 7% (6) Telecoms 8% (5) Banking, Finance 7% (4) Media 2% (3) Other 13% (12) Promoter 69% Passive 24% Detractor 7% Profit Customers
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Proact Annual and Sustainability Report 2024 20 Additional informationSustainability Directors’ report Financial statements About us and the year in brief Our business AZ Delta Improving patient care through storage and backup AZ Delta, a prominent healthcare provider in Belgium, has partnered with Proact to upgrade its outdated storage and backup infrastructure. The upgrade has greatly enhanced the speed, reliability, and scalability of data access, facilitating more streamlined workflows for healthcare personnel. The new solution can handle vast volumes of medical images and patient data, improving advanced AI-driven diagnostics. Moreover, the upgraded backup system protects critical data from ransomware attacks, which enhances recovery speed and ensures compliance with data protection standards. The new infrastructure clearly enhances patient care by enabling faster access to medical images and patient data, which leads to quicker diagnoses and treatment decisions. Improved system reliability ensures the availability of critical medical applications, which minimises downtime and secures continuity of care. “ A s part of our balanced strategy between cloud and on-prem, we have now migrated to a new flash storage and backup solution. The result is a fivefold improvement in access to medical images, which facilitates examinations for our radi- ology, nuclear medicine and other departments. In addition, our new backup solution now fulfils NIS2 requirements.” Peter De Jaeger, CIO Maxar International Sweden Space company with high hardware demands Maxar has made it their mission to map the entire world in 3D and develop new tools to visualise and study it. A flexible IT infrastructure capable of performing heavy calculations and managing vast amounts of data is required to get the job done. Their 3D maps are used across various industries and sectors, for planning and navigation. Defence forces continue to be the largest customer segment. For example, Maxar has gained attention for images used as evidence of Russian war crimes in Ukraine. Maxar reached out to Proact when they were searching for a new partner for server and storage solutions. At that point they had outgrown their current setup and Proact worked with Maxar to develop a new concept based on Dell servers and storage systems. In addition to improved performance, the solution provides efficient data reduction, allowing Maxar to free up substantial storage space for new applications. “ W e have a good dialogue with Proact. They respond quickly and are very easy to deal with.” Tomi Ojala Carlbergh, manager of development support and 3D production Caritas in the Magdeburg Diocese Modernising network infrastructure with SD-WAN Caritas in the Magdeburg Diocese, along with its subsidiaries, is responsible for facilities and services in the areas of care for the elderly, care for the disabled and child and youth care. Twenty years ago, Caritas established its own data cen - tre for its IT systems and started offering services to other healthcare organisations via a private cloud solution. Their geographically scattered operations required stable network connections, which until recently were maintained via a virtual private network (VPN). However, dissatisfaction with the previ - ous network provider prompted the company to initiate a new tender, and they chose Proact as their partner. With Proact’s help, Caritas’ IT department has now modern - ised its network infrastructure and introduced a software- defined WAN (SD-WAN). The result is a more reliable and scalable network for the organisation’s various healthcare facilities and a future-proof IT infrastructure. “ F or me, it was important that not only the quality was right, but also the service. Our previous experience with Proact was great, and the introduction of SD-WAN con- firmed our positive view of them as an expert partner.” Bernward Gruber, Head of IT Department Birmingham Women’s & Children’s NHS Hospital Cost-effective hosting solution for EPR systems All hospitals in the British healthcare market are currently adopting an electronic patient record system. Birmingham Women’s & Children’s NHS Hospital opted for a solution from EPIC, a high-end software provider. Proact was consulted early in the process to offer options for hosting the system to manage the highly sensitive patient information. NHS England’s ’Cloud First’ directive ruled out the local hosting option, leaving only a third-party solution or EPIC hosting. Proact’s solution delivered 30 per cent savings over EPIC-hosted solutions. Proact set itself apart from competitors by working closely with Dell to offer a joint solution based on a reference architecture approved by EPIC with a Managed Cloud Services solution. EPIC recommended Proact because they offer the most comprehensive, secure, and robust solution, which ensured optimal software performance and delivery. “ T he EPR is a clinical and operational business process programme based on a first-class digital solution. It has been a two-year journey of great complexity, making the choice of the right supplier crucial. ” Professor Daniel Ray Customer case
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About us and the year in brief What are your hopes for the future of Proact? I hope we will continue to foster a culture of collaboration where every employee, customer and partner feels valued and part of our shared success. I want Proact to maintain its ambition to deliver first-class IT services and to be a trusted advisor, thereby strengthening our custom- ers’ businesses. In addition, I hope we will continue to collaborate on projects, exchange ideas and deliver value between our business units across Europe. How do you see your role evolving as the company continues its journey? As a consultant, I envisage that my role will develop within the new IT-Business Consulting unit. I want to contribute my expertise to enable clients to shape a holistic organisational and technical approach to IT. I believe that I can make a significant contribution to projects by bridging the gap between technological change and organisational needs. Do you think our values can help us shape our future as a company? Our values are crucial to navigating today’s ambiguous and volatile technological landscape. Proact’s strategic approach drives innovation and success by combining new and old technologies. Our strong focus on integrating private, on-premises and public cloud solutions puts us at the forefront of digital transformation. Effective communication and participation ensure that all voices are heard, fostering engagement and passion. By acting as trusted, customer-centred advisors, we build strong, trust-based relationships that contribute to our customers’ growth and success. #EngageWithPassion About us and the year in brief Additional informationSustainability Directors’ report Financial statementsOur business Proact Annual and Sustainability Report 2024 21 Celebrating a milestone! A look ahead into the crystal ball Tilmann Sies, IT-Business Consultant, Germany
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Proact Annual and Sustainability Report 2024 22 Our contribution 23 Minimise environmental footprint 24 Resilient and sustainable IT services 25 Employees 26 Governance 28 EU taxonomy 30 Auditor ’s statement 34 22 Sustainability Values Proact Annual and Sustainability Report 2024 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability
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Proact Annual and Sustainability Report 2024 23 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Proact has a great opportunity to contribute to sustainable development by minimising our own environmental footprint, offering resilient and sustainable IT services and being an employer of choice. Proact maintains a holistic approach to sustainability. Our ambition is to create long-term value for our company and our employees, our customers and shareholders, and society in general. With a business strategy that focuses on economic as well as ethical, social and envi - ronmental factors, we can help to bring about sustainable development while ensuring the long-term success of our company. Sustainability strategy Our sustainability strategy includes relevant targets and activities in areas that are important to our stakeholders, areas that affect us most, and areas where our activities have the greatest impact. Proact’s long- term sustainability ambition is “The Power Of Together – for a better future. Supporting a green and sustainable world through IT.” To achieve this ambition, we are working in three focus areas: • Minimise environmental footprint • Resilient and sustainable IT services • Employer of choice Each focus area includes one or more strategic sustainability topics. These focus areas facilitate structured sustainability work and simplify communication and reporting. The Sustainable Development Goals Proact confirms the importance of the UN’s Sustainable Development Goals (SDGs) as a collective global objective: to protect our planet and create prosperity for all. As a company, we can contribute by adapting the way in which we work to meet the needs of the generations of tomorrow. In our sustainability strategy, we have integrated the goals where we believe that our operations primarily contribute: goals 5 Gender equality, 7 Affordable and clean energy, 8 Decent work and economic growth, 9 Industry, innovation and infrastructure, 12 Respon - sible consumption and production, and 13 Climate action. Pages 10-13 and 23-33 include the sustainability report for the Group in accordance with Chapter 6 of the Swedish Company Accounts Act. Our contribution to a sustainable future FOCUS AREA STRATEGIC SUSTAINABILITY TOPICS SUPPORTING THE SDGs LONG-TERM TARGETS Minimise environmental f ootprint • Climate change 2050 Net zero GHG emissions Resilient and sustainable IT services • Cyberthreat mitigation • D ata management and protection • Hybrid cloud services • Digital employee experience 2025 Obtain and maintain ‘A’ rating in Security Scorecard 2 030 1.2 PUE in data centres Employer of choice • Leadership • D iversity and inclusion • Learning and development 2030 eNPS 45 2 030 30% women Internal and external regulations and policies UN & OECD principles | P roact Code of Conduct | P roact Company Handbook Core values Win as one | Excel every day | Engage with passion The Power Of Together - for a better future Supporting a green and sustainable world through IT
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Proact Annual and Sustainability Report 2024 24 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Proact is a technology and IT services company that does not manufacture products, does not have extensive logistics and does not own data centres. This means that our activities have a limited direct impact on the environment, and limited direct greenhouse gas emissions. By placing demands on our suppliers and partners, we are working to reduce the negative impact of our operations. Environmental impact Energy use, especially related to data centres, is generally a major source of greenhouse gas emissions in the IT sector. This is not the case for Proact, however, as in principle all of the data centres Proact uses are powered by renewable energy. Proact’s main carbon footprint is in scope 3, indirect emissions, where the two categories of upstream leased assets (mainly cars) and business travel account for almost 90 per cent of emissions. In the next few years, the emphasis will be on reducing the carbon footprint in these categories. In parallel, Proact will be developing its calculation method with more granular data. With more insight into where the greatest emissions occur, both organisationally and within each category, a roadmap to achieve the net zero goal will be developed. Proact’s ambition is to only use data centres powered by renewable energy. In 2024, 99 per cent (98) of electricity consumption was renewable. We are also working in accord - ance with a devised schedule to reduce the number of data centres used within the Group. In 2024, no data centre has been closed or added. Further consolidation and closure of data centres are planned for 2025. Focusing on renewable energy and using fewer data centres will help to reduce the overall carbon footprint of data centre operations. Proact’s target of 100 per cent renewable energy at data centres remains in place going forward, as it is essen - tial to achieving our net zero target and a key to supporting our customers’ carbon targets. Another key factor involves working with suppliers who are committed to reducing their emissions. Find out more on page 25 about how we can help our customers reduce their carbon footprint. Circular economy Taking care not to waste finite resources is a prerequisite for sustainable development. Methods and processes devised are used to ensure that material is composted, that end-of-life electronics are reused or recycled to the greatest extent pos - sible and that paper and packaging are recycled correctly at Proact companies. We aim always to use resources efficiently and securely in order to prevent or reduce any harmful impact on the environment as a consequence of what we do. Climate change is one of the greatest challenges of our time. To achieve the ambitions of the Paris Agreement, it is essential that everyone plays their part in reducing greenhouse gas emissions. Proact’s long-term target is to reach net zero emissions by 2050. Scope 3 greenhouse gas emissions, tonnes CO 2e 2024 2023 Breakdown by category 1: Purchased goods and services 102 84 2: Capital goods 50 48 3: F uel and energy-related activities not included in scope 1 or 2 n.a. 3292) 4: Upstream transportation and distribution 184 140 5: Waste generated in operations 1 2 6: Business travel 3,154³) 1,774 8: U pstream leased assets (company cars, goods, data centres, electricity in leased office space) 3,486 3,470 9: Downstream transportation and distribution 0 64 TOTAL 6,977 5,911 Data is unavailable for categories 7 (employee commuting), 11 (use of products sold), 12 (waste management of products sold) and 13 (down - stream leased assets). Category 10 (processing of products sold) is not applicable. 2) In 2023, energy in leased office space was reported in category 3. 3) O f which 111 tonnes relate to travel in connection with Proact’s 30th anniversary celebrations that have been carbon offset via the United Nations Carbon offset platform. Greenhouse gas emissions, tonnes CO 2e 2024 2023 Breakdown by scope Scope 1 0 0 Scope 2, market-based ¹) 0 0 Scope 3 6,977 5,911 TOTAL 6,977 5,911 2024 2023 Scope 2, location-based ¹) 62 60 Proact reports according to the guidelines in the GHG Protocol Corporate Standard, Appendix F: Categorising GHG Emissions Associated with Leased Assets, as well as the equity share method, which means that activities associated with leased assets are reported in scope 3. For 2024, Proact’s calculation basis has been revised, which means that some catego- ries have been adjusted and that some emissions have changed category. 1) S cope 2 only includes electricity consumption from an office building owned by Proact in the UK. Minimise environmental footprint Low greenhouse gas emissions to get even lower
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Proact Annual and Sustainability Report 2024 25 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Digitalisation in society is increasing at a rapid pace, and both private and public stakeholders are now dependent on secure and reliable IT operations. Finding efficient and secure solutions for cus- tomers that are sustainable in the long term, often relating to large volumes of information, is at the very heart of what Proact does. We have a history of long and close relationships with our customers. They can be found in many sectors of society, and include both private companies and public organisations. The needs of customers are at the heart of how we develop our prod- ucts, services and processes – through both close cooperation and continuous and systematic feedback. Cyberthreat mitigation Shortcomings in IT security can lead to business disruptions, with disastrous consequences. The number of cyberthreats and data breaches has been increasing significantly for a number of years. Ensuring that data is protected and secure is at the heart of everything Proact does. Our expertise, combined with our se- curity solutions and services, enables our customers to prevent intrusions and quickly detect and manage any incidents. SecurityScorecard is one way to rate cybersecurity. Security- Scorecard assesses a company’s cybersecurity from a hacker’s perspective on a monthly basis by analysing ten risk factors. Proact’s performance was at group level B (B) in December 2024. The goal going forward is to achieve and maintain level A. Data management and protection Data is the lifeblood of any modern business. Data is ana - lysed, sent, stored, replicated and protected. Every terabyte of data stored is both replicated and backed up frequently, which increases the amount of storage capacity required. It is not uncommon for every terabyte of primary data to be stored three to five additional times for protection. Moreover, around 60 per cent of all primary data stored is never used again, but is protected to the same extent. We can drastically reduce the amount of unnecessary data (known as data waste), and thus the need for storage, by helping our customers to analyse and optimise their storage infrastructure and review backup and protection. This in turn means reduced costs for our customers and lower climate impact from their IT operations. In order to manage the trust which our customers have placed in us, our services are supplied in accordance with established standards such as “ITIL Service Management”, which includes a number of processes for the supply of cost-effective IT services based on the customer’s business. Hybrid cloud services Proact does not own any data centres of its own but works in partnership with leading suppliers who provide and manage the running of the data centre. In general, data centres are very energy-intensive operations compared to typical commer - Proact has a great opportunity to support our customers’ sustainability ambitions by offering resilient and sustainable IT services. cial office buildings. Proact can help reduce energy demand per terabyte by offering sustainable hybrid cloud services, with energy-efficient data centres and equipment, combined with optimised hardware capacity and high infrastructure utilisation. The PUE (Power Usage Effectiveness) metric is used to measure energy efficiency at a data centre. This is the ratio of the total amount of energy used by the facility to the energy delivered to the computing equipment. The lower the PUE value, the more energy-efficient the data centre is. The PUE value of the data centres used by Proact was 1.31 (1.30) on average in 2024, which is relatively good compared to an EU market average estimated at around 1.7. Proact has a clear objective to use data centres with high energy efficiency and to consolidate and increase the utilisation rate at the data centres used. The goal is to achieve a PUE value of 1.2 on average for all data centres by 2030. Digital employee experience Since the outbreak of the COVID-19 pandemic, working from home has become common for millions of people in the EU and all over the world. Proact designs, installs and manages modern IT environments and offers services enabling fast and secure access to relevant data, regardless of where our customers’ employees are located. This allows our customers to offer their employees hybrid work, which helps achieve a better work-life balance. It can also provide the option of online meetings and mean less travelling to and from the workplace. This means reducing our customers’ carbon footprint while also keeping their business data accessible and secure. Suppliers Proact partners with suppliers who have high ambitions and are committed to corporate responsibility, which in turn has an impact on value chains for both Proact and our customers. Most of our suppliers are located in Europe and North America, where compliance with basic human rights, environmental consider- ations and labour law conditions are good. Our suppliers are normally also major corporations that have devised extensive schemes relating to responsible, sustainable business. All our suppliers undergo an approval process which involves evaluation of both product safety and sustainability aspects. As part of our process, we have an extensive question - naire in order to gain a clear understanding of our suppliers’ standards in terms of sustainability. The approval process is also documented in our Company Handbook. We also conduct regular follow-ups and reviews. Our aim is to ensure compli - ance with international principles relating to human rights, labour law, the environment and anti-corruption. Resilient and sustainable IT services How we help our customers become sustainable
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Proact Annual and Sustainability Report 2024 26 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability We believe in success through our employees – the talent and commitment of exceptional individuals working together for a common purpose. Our employees are our most valuable asset. Their commit - ment and continued development is fundamental to fulfilling our vision and strategy, where the emphasis is on developing our customer offering and increasing profitable growth, both organically and through acquisitions. Employer brand and recruitment Proact wants to be an attractive employer for both current and potential employees. We recognise the importance of strengthening our employer brand in the long term and clearly showing who we are, what we stand for and do, and what we offer our employees. During the year, we completed our EVP (Employer Value Proposition) project, which clarified our offering to employees. Having clarity on what to expect as an employee at Proact is a necessity if we are to achieve our growth goals. Given current competition for talent, this is both a challenge and a task that requires our closest attention. To recruit new employees, we promote Proact in digital campaigns, at fairs and in partnership with universities and colleges. There are also a number of local initiatives in respect of recruitment programmes, where young people or recent graduates can try out different tasks and thus get job opportu - nities in the IT industry. In 2024, we took on 154 new employees (133). Providing a warm welcome and introducing new employees is a high priority at Proact. Given our active acquisition agenda, the induction process is essential not only for new employees but also for those who join the company through our acquisitions. Talent development If Proact is to be able to offer our customers relevant solutions, talent development is not an opportunity – it is a must. For the most part, employees learn things as they go about their day- to-day work together with colleagues and customers. We offer rewarding roles and tasks so that our employees feel they are being challenged and helping to further Proact’s business development. Employer of choice Our employees are the key to our success Collaboration is the heartbeat of our culture, bringing together em- ployees, customers and partners. Every person is crucial, and every contribution drives our collective success – we win when we work together. Win as one The Proact way is defined by high ambitions and continuous improve - ment. A curious approach and excellent skills are the foundation of our success. Every day, we achieve excellence – we drive innovation, push boundaries and deliver best-in-class. Excel every day Our dedication and passion for what we do guides us to always walk the extra mile. We have a customer-first mindset and believe in long-lasting relationships built on trust. Engage with passion Our values We also offer in-house training through our very own Proact Academy. Employees receive education and training here, parti c u larly in areas relating to sales and technology, but also on internal policies and compliance. Other learning platforms are also used locally, such as Good Habitz and LinkedIn learning. The annual appraisals between employees and managers are another important factor in individual development. These appraisals ensure that employees are given the opportunity for discussion and to devise plans for development. Proact supports and encourages internal promotion. We are proud of the number of employees who have progressed in their roles, sometimes from junior positions, to various senior positions. Leadership Leadership is one of our priorities, as we feel that this is the strongest driving force for both our success and a strong culture. Leadership is all about creating sustainable results by developing both our employees and our business. Our leaders live our culture and values, communicate our vision and strat - egy and inspire us to give of our best in our day-to-day work. At Proact, we want to give our leaders both the knowledge and the tools they need to develop. We work in a structured manner and maintain a long-term approach, identifying people with management talent and planning for promotion and succession. Leadership and succession planning takes place annually for all country managers and other people who report directly to the Group Management. Development among our leaders takes place through various initiatives and is continuously implemented at local level in our countries. Our global leadership development continued for around 50 of our top leaders in 2024, including a physical meet- ing in the spring. The focus was on strategy, leadership and continuing to strengthen the leadership network within Proact. In 2024, Proact continues to show excellent results in the leadership index relative to other companies overall, a trend that has lasted for several years. The year’s result stands at 87, maintaining the same high level as last year. See the table on page 27.
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Proact Annual and Sustainability Report 2024 27 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Age structure Employees by employment timeEmployees by country - 20 years 1% 20-29 years 13% 30-39 years 30% 40-49 years 24% 50-59 years 25% 60- years 7% Netherlands 23% Germany 23% UK 21% Sweden 21% Other 12% Finland 3%, Norway 3%, Belgium 2%, Denmark 1% Estonia 1%, Lithuania 1%, Czech Republic 1% < 1 year 10% 1-2 years 21% 3-5 years 20% 6-9 years 20% 10-19 years 23% 20 years or more 6% Culture We are proud of our inclusive corporate culture and how our employees live up to our values and #ThePowerOfTogether. We have a special Proact spirit of openness and inclusion, high levels of commitment, professionalism and continuous learning. We value diversity and appreciate the things that make our employees different. Having a strong Proact culture is crucial as we welcome new colleagues and work together to achieve common goals. We are committed to offering a place of work that gives our employees positive experiences in terms of both physical and mental health and well-being. We are committed to ensuring that new Proact employees receive a welcoming and thorough induction. Over the years, we have been hugely appreciated for our well-structured process. There are a number of examples of how our induction processes reflect the Proact spirit, including various meetings for new employees, buddy systems and induction groups. Diversity and inclusion The IT sector is one of the fastest growing industries. While the need for skilled labour is high, the industry faces chal - lenges in terms of representation and diversity and, despite its growth, the percentage of women in the industry is not increasing. Diversity and inclusion are key to driving innovation and reinforcing competitiveness. Employees with a wealth of backgrounds, perspectives and experience make Proact more robust and dynamic. Proact must provide equal opportunities for employment, promotion, development, remuneration and all other employee- related processes and practices without discrimination on the basis of gender, transgender identity or expression, ethnicity, religion or belief, disability, sexual orientation or age. Our goal is to achieve a gender balance of at least 30 per cent women in the overall workforce by 2030. At the end of 2024, the proportion was 19 per cent (19). Employee surveys We conduct surveys every year in order to give all our em- ployees the opportunity to make their voices heard and let us know how we can work together to improve Proact. We use a platform that enables us to follow up on the annual employee survey with pulse surveys in selected survey areas and selected parts of the organisation. Employee Index Proact 2024 Benchmark, all industries 2024 Proact 2023 Leadership Index 87 80 87 Team Efficiency Index 84 77 83 Engagement Index 83 81 83 OSI Work Environment Index 82 76 82 Management Index 69 66 69 eNPS Index 30 15 31 Gender breakdown Proact 2024 Proportion of women, total 19% Proportion of female managers who are responsible for employees 22% Proportion of women, senior management 38% Proportion of women, Board of Directors 40% The employee survey is a valuable tool and provides a foun- dation for structured discussion and improvement of working methods and commitment. Working with the survey results is a high priority for Proact. Managers present results and work with their teams to devise activity plans for their respective fields of responsibility. The executive team makes decisions on measures of key importance to the company as a whole. This year’s survey achieved a response rate of 91 per cent (94), a very high response frequency. The high response rate indicates a high level of commitment among Proact employees. Proact also performs very well overall against the benchmark, which includes all industries. It is particularly gratifying to see that Proact’s Employer Net Promoter Score (eNPS) remains at a high level, 30 (31).
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Proact Annual and Sustainability Report 2024 28 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Structure of our sustainability work Guidelines for our sustainability efforts are established by the Board of Directors. The Chief Executive Officer bears ultimate responsibility for the sustainability work while Group Manage - ment is responsible for devising a strategy and following up the results of the Group’s sustainability work. A member of Group Management is responsible for implementing and driving the sustainability work, and there is regular reporting on this work at both Board meetings and Group Management meetings. Day-to-day operational responsibility rests with the relevant business units, with the assistance of the expertise functions Legal, People & Sustainability, Technology & Services, Corporate Development and Finance. Sustainability in respect of employees is one of the targets for all members of Group Management’s performance-based annual bonus scheme. Policies and policy documents Proact is an international company operating in a number of countries, all of which have different laws, cultures and tradi - tions. All business must be run sustainably, in compliance with applicable legislation and in line with the company’s policies and values. Our Code of Conduct includes 13 key principles applicable to all our employees, suppliers and business partners. It pro - vides guidance on doing ethically correct business, respecting human rights and labour law, and operating in compliance with legislation and practice in respect of the environment, anti-corruption, competition and anti-discrimination. Besides Proact’s Code of Conduct, the following documents and policies are relevant to our business ethics and compli - ance: • Anti-slavery and Anti-human trafficking statement • Company Handbook • Finance Policy • Governance Framework • Information Security Policy • Internal Controls and Monitoring Framework • Legal Policy • People and Sustainability Policy • Risk Management Framework • Sustainability Due Diligence Process • Vendor Onboarding Process Compliance with laws and regulations is always a top priority for us, and in a changing world we are of the opinion that it is equally important to adopt a broader approach as regards our corporate responsibility. Our Company Handbook includes guidelines, policies and processes to ensure social, environ - m ental and ethical responsibility, both internally and with external parties. Proact has a whistleblower policy that provides all employ - ees with information on how suspected deviations from the company’s Code of Conduct are to be reported. All Proact employees must report, without delay, every known breach of the Code of Conduct or any concerns they may have with regard to breaches as specified in the policy. Such reports and concerns will be examined in depth as a matter of urgency. Anyone reporting such fears in good faith will be protected by Proact from all forms of reprisal. The whistleblower policy is part of our Code of Conduct, which is communicated to all employees. Two whistleblowing cases were received and investigated in 2024, and appropriate action was taken. How we work Proact has a compliance monitoring team to investigate com - pliance and any grievances. This team is headed by General Counsel and includes the CFO and VP People & Sustainabil - ity. Our legal function conducts audits which are compiled and presented to the Chief Executive Officer and the compliance team, along with proposals for action. The induction programme for new employees includes train - ing on our policies and policy documents, which are also avail - able on our continuous learning platform. The Proact Code of Conduct and Company Handbook provide the framework for employees, enabling them to behave professionally with our customers and do responsible business. Ethical assessments and positions in respect of the business in which we want to participate are discussed at the business areas’ quarterly progress checks with the Chief Executive Officer. Certifications The company’s objective is for all operations to have relevant certification so that they can be pursued in a safe, structured manner in accordance with the local requirements on the mar - ket in question. The certifications are specific to each country and require annual updates and audits. In most cases, the companies in the countries in which Proact works extensively hold accreditation to ISO 9001 (quality), ISO 14001 (environ- ment) and ISO 27001 (data security), but the companies in the countries in which Proact works less extensively are also often certified in accordance with one of the most common ISO systems. Materiality analysis and stakeholder dialogue A materiality analysis has been conducted in order to deter- mine which sustainability topics are most strategic for Proact. Each material sustainability topic has been analysed on the basis of how the topic may affect Proact financially and what impact Proact can have on the topic (double materiality). The perspective of Proact’s key stakeholder groups – employees, customers, shareholders, suppliers and partners, and the local community and the surrounding world – has also been taken into account. Proact’s most essential topics are judged to be: • Climate change • Cyberthreat mitigation • Data management and protection • Hybrid cloud services • Digital employee experience • Leadership • Diversity and inclusion • Learning and development Open discussion with our stakeholders is crucial for us to successfully address their concerns, along with global trends and market expectations. We adopt a structured approach to stakeholder involvement, with regular surveys of customers and employees, investor meetings and gatherings and via our official media channels. Sustainability information Sustainability governance
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What are your thoughts on our revised values? In my view, the updated values represent Proact’s working methods, with an emphasis on high ambition, continuous improvement, passion, customer focus and fostering trust. They convey our commitment and enthusiasm, highlight that success is most effectively achieved when we collaborate, and showcase our focus on innovation and our goal to be best in class. How can we maintain and strengthen our values? The engagement of leaders is essential, as they are expected to be role models for the values and to show commitment through their actions. A clear communication strategy and rigour across all levels of the organisation are critical to ensure that everyone understands and applies the values consistently. It is also essential to celebrate achievements and learn from mistakes by taking corrective and preventive measures. Ultimately, embracing essential changes and steering clear of stagnation is vital, given the rapid changes in the world, and the key lies in our ability to adapt. How do you think values can help us shape our company? After almost a year with Proact, it has become clear to me that our values are not simply a paper exercise. They act as guiding princi- ples that shape the culture, enhance relationships with customers, employees, suppliers and other stakeholders, and promote long-term success. I have been pleasantly surprised by the consistent dedica- tion of our leadership to improve and innovate with our values at the forefront. The values help employees understand Proact’s strategy and vision. By aligning our business strategy and values, Proact will build a strong, adaptable and sustainable foundation that will support both immediate growth and long-term goals. #ExcelEveryDay Celebrating a milestone! Company culture and revised values Veerle Fonck, Sales Director, Belgium About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Proact Annual and Sustainability Report 2024 29
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Proact Annual and Sustainability Report 2024 30 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Revenue Parts of Proact’s revenue in cloud services are covered by the EU Taxonomy Regulation in area 8.1, “Data processing, hosting and related activities” and contribute – where taxonomy-aligned – to the EU’s environmental objective 1 on climate change mitigation. Proact’s interpretation is that the cloud services where Proact is responsible for the processing of data constitute an activity that is covered by area 8.1 and thus constitute what is known as eligible turnover. However, other cloud services such as surveillance, mon - itoring, network services or public cloud services are not eligible. Nor are other revenue streams – i.e. systems, support and consul - tancy services – eligible under the EU Taxonomy Regulation. Total revenue is recognised under IFRS in accordance with the accounting policies set out in Note 3 of the annual report and corresponds to the total revenue recognised in the consolidated statement of comprehensive income. Eligible turnover is the por - tion of total revenue that is attributable to performance obligations for services as defined above. Capital expenditure (CapEx) CapEx consists of investments in tangible and intangible fixed assets, including acquired assets and investments in right-of use assets. The CapEx eligible to Proact according to the EU Taxonomy Regulation is that which is directly attributable to the cloud services in activity 8.1. According to the guidance from the European Commission in the FAQ published in 2022, it has been clarified that purchases of outputs from economic activities that are compliant with the taxonomy requirements and individual measures that enable the target activities to become low-carbonor lead to reduced greenhouse gas emissions are also eligible. This is the case even if the investments are not related to a turnover activity conducted by an enterprise. In Proact’s case, this means that investments in buildings and leases under activity 7.7, and investments in leased vehicles under activity 6.5 are also eligible CapEx. CapEx consists of the new investments in accordance with IFRS in Note 15 of the annual report for intangible assets (excluding goodwill), Note 16 for Tangible assets and as additional rights of use in Note 27 for Leased assets. EU taxonomy Consolidated information under Article 8 of the Taxonomy Regulation Turnover Proportion of turnover/ Total turnover Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 17% CCA 0% 0% WTR 0% 0% CE 0% 0% PPC 0% 0% BIO 0% 0% CapEx Proportion of CapEx/ Total CapEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 85% CCA 0% 0% WTR 0% 0% CE 0% 0% PPC 0% 0% BIO 0% 0% OpEx Proportion of OpEx/ Total OpEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 28% CCA 0% 0% WTR 0% 0% CE 0% 0% PPC 0% 0% BIO 0% 0% Operational expenditure (OpEx) As OpEx, Proact has identified the costs that are directly related to maintenance and repairs of equipment reported as CapEx as stated above, as well as renovation costs and short-term leases where applicable. This includes both the cost of external purchases and the cost of Proact’s own employees when performing this type of activity. Eligible OpEx is such OpEx that is directly related to activity 8.1. Eligible OpEx is also such OpEx that is eligible in itself as described above, although Proact has not identified any such OpEx. EU Taxonomy-aligned activities To be taxonomy-aligned, activities in area 8.1 require the data centres used to process data to meet a number of technical screening criteria. In addition, the suppliers of the equipment used must fulfil a number of other technical screening criteria. As Proact does not own any data centres and purchases all equipment from suppliers, the suppliers of data centres and equipment are required to meet all relevant technical screening criteria, including verifying and documenting the fact that they ‘Do No Significant Harm’ (DNSH) to any of the other environmental objectives. This needs to be confirmed by all suppliers, which none of them have been able to do in full. Consequently, we are not reporting any taxonomy-aligned activities for 2024. The same assessment has been made for suppliers of leased vehicles and buildings. Proact’s policy is to promote sustainable choices of cars and premises. However, Proact has not been able to ensure that suppliers fulfil all screening criteria, and therefore no taxonomy-aligned activities are reported for 2024. Minimum safeguards and Do No Significant Harm (DNSH) criteria The fulfilment of minimum safeguards and whether any signif- icant harm is being done to any of the other EU environmental objectives are not reported as no taxonomy-aligned activities have been identified. Nuclear and fossil gas related activities Row Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. No 2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. No 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. No Fossil gas related activities 4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that pro - duce electricity using fossil gaseous fuels. No 5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. No 6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. No
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Proact Annual and Sustainability Report 2024 31 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Proportion of taxonomy-aligned economic activities, Turnover Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024. Financial year 2024 Substantial Contribution Criteria DNSH criteria (Do No Significant Harm) Economic activities Code(s) Turnover (SEK million) Proportion of turnover, 2024 Climate change miti - gation Climate change adap - tation Water Pollution Circular economy Biodiversity Climate change miti - gation Climate change adap - tation Water Pollution Circular economy Biodiversity Minimum safe- guards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) CapEx, 2023 Category ena - bling activity Category transitional activity % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; Y; N; Y; N; Y; N; Y; N; Y; N; Y; N; % E T A. TAXONOMY-ELIGIBLE ACTIVITIES 17% 12% A.1. Environmentally sustainable activities (Taxonomy-aligned) Data processing, hosting and related activities CCM 8.1 0 0% 0% Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0% % % % % % % 0% Of which Enabling 0% % % % % % % 0% E Of which Transitional 0% % 0% T A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Data processing, hosting and related activities CCM 8.1 813 17% EL N/EL N/EL N/EL N/EL N/EL 12% Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 813 17% % % % % % % 12% A. T urnover of Taxonomy-eligible activities (A.1+A.2) 813 17% % % % % % % 12% B. T AXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non-eligible activities 4,052 83% TOTAL 4,864 100% Taxonomy tables
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Proact Annual and Sustainability Report 2024 32 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Proportion of taxonomy-aligned economic activities, CapEx Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024. Financial year 2024 Substantial Contribution Criteria DNSH criteria (Do No Significant Harm) Economic activities Code(s) CapEx (SEK million) Proportion of CapEx, year 2024 Climate change miti - gation Climate change adap - tation Water Pollution Circular economy Biodiversity Climate change miti - gation Climate change adap - tation Water Pollution Circular economy Biodiversity Minimum safe- guards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) CapEx, year 2023 Category ena - bling activity Category transitional activity % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; Y; N; Y; N; Y; N; Y; N; Y; N; Y; N; % E T A. TAXONOMY-ELIGIBLE ACTIVITIES 85% 85% A.1. Environmentally sustainable activities (Taxonomy-aligned) Data processing, hosting and related activities CCM 8.1 0 0% 0% Acquisition and ownership of buildings CCM 7.7 0 0% 0% Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 0 0% 0% CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0% % % % % % % 0% Of which Enabling 0% % % % % % % 0% E Of which Transitional 0% % 0% T A2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Data processing, hosting and related activities CCM 8.1 29 25% EL N/EL N/EL N/EL N/EL N/EL 46% Acquisition and ownership of buildings CCM 7.7 22 19% EL N/EL N/EL N/EL N/EL N/EL 10% Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 48 41% EL N/EL N/EL N/EL N/EL N/EL 29% CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 99 85% % % % % % % 85% A. Ca pEx of Taxonomy-eligible activities (A.1+A.2) 99 85% % % % % % % 85% B. T AXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities 17 15% TOTAL 116 100%
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Proact Annual and Sustainability Report 2024 33 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Proportion of taxonomy-aligned economic activities, OpEx Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024. Financial year 2024 Substantial Contribution Criteria DNSH criteria (Do No Significant Harm) Economic activities Code(s) OpEx (MSEK) Proportion of OpEx, year 2024 Climate change miti - gation Climate change adap - tation Water Pollution Circular economy Biodiversity Climate change miti - gation Climate change adap - tation Water Pollution Circular economy Biodiversity Minimum safe- guards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) OpEx, year 2023 Category ena - bling activity Category transitional activity % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; Y; N; Y; N; Y; N; Y; N; Y; N; Y; N; % E T A. TAXONOMY-ELIGIBLE ACTIVITIES 28% 29% A.1. Environmentally sustainable activities (Taxonomy-aligned) Data processing, hosting and related activities CCM 8.1 0 0% 0% Acquisition and ownership of buildings CCM 7.7 0 0% 0% Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 0 0% 0% OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) % % % % % % % Of which Enabling 0% % % % % % % 0% E Of which Transitional 0% % 0% T A2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Data processing, hosting and related activities CCM 8.1 3 28% EL N/EL N/EL N/EL N/EL N/EL 29% Acquisition and ownership of buildings CCM 7.7 0 0% EL N/EL N/EL N/EL N/EL N/EL 0% Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 0 0% EL N/EL N/EL N/EL N/EL N/EL 0% OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 3 28% % % % % % % 29% A. O pEx of Taxonomy-eligible activities (A.1+A.2) 3 28% % % % % % % 29% B. T AXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities (B) 8 72% TOTAL 12 100%
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Proact Annual and Sustainability Report 2024 34 About us and the year in brief Our business Additional informationDirectors’ report Financial statementsSustainability Engagement and responsibility It is the board of directors who is responsible for the statutory sustainability report for the year 2024 on pages 10-13 and 23-33 and that it has been prepared in accordance with the Annual Accounts Act according to the prior wording that was in effect before 1 July 2024. The scope of the audit Our examination has been conducted in accordance with FAR’s standard RevR 12 The auditor´s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with Interna - tional Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion. Opinion A statutory sustainability report has been prepared. Stockholm 31 March 2025 Öhrlings PricewaterhouseCoopers AB Magnus Thorling Authorised Public Accountant This is an unofficial translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail. Auditor’s opinion on the statutory sustainability report To the general meeting of the shareholders in Proact IT Group AB (publ), co. reg. no. 556494-3446.
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Directors’ report 36 Risks and risk management 40 Corporate governance report 42 Board of Directors 45 Group Management 46 35Proact Annual and Sustainability Report 2024 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Directors’ report
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Proact Annual and Sustainability Report 2024 36 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report The Board of Directors and the Chief Executive Officer of Proact IT Group AB (publ), corporate ID number 556494-3446, hereby submit the annual financial statements and consolidated financial statements for the 2024 financial year. The consolidated balance sheet and income statement and the balance sheet and income statement for the parent company will be ratified at the Annual General Meeting on 6 May 2025. General information The name of the company is Proact IT Group AB (publ), and the company has its registered office in Solna, Sweden, at the address Frösundaviks Allé 1, 169 04 Solna. The company has been listed on Nasdaq Stockholm under the ticker symbol PACT since 1999. Business approach Proact is one of Europe’s leading data and information management specialists, focusing on cloud services and data centre solutions. We help our customers to store, network, protect and secure their data and add value using it, focusing on increased flexibility, productivity and efficiency. Proact has implemented thousands of successful projects, mainly in Europe, has more than 4,000 customers and manages hundreds of petabytes of information in the cloud. Proact comprises wholly owned subsidiaries in Europe, North America and Japan. As at 31 December 2024, Proact employed 1,137 staff in Belgium, the Czech Republic, Denmark, Estonia, Finland, Germany, Latvia, the Netherlands, Norway, Sweden, the United Kingdom and the USA. Proact Finance AB is a wholly-owned subsidiary which offers customers financial services for both services and products via the Group’s other subsidiaries. The parent company, Proact IT Group AB (publ), is globally responsible for issues relating to the Group as a whole. The past year In 2024, Proact continued to develop its portfolio with a focus on IT services and hybrid cloud solutions. Demand for our services has been strong, particularly in cloud and support services, contributing to steady growth in our services busi - ness. At the same time, the market has been characterised by longer sales cycles and greater caution in investment deci - sions, which has affected system sales. To strengthen our profitability and efficiency, we have undertaken extensive efficiency measures, including optimised resource allocation and increased automation in our delivery workflows. These initiatives have contributed to an improved cost structure and higher operational efficiency. During the year, our total revenue increased by 0.3 per cent to SEK 4,864.2 million (4,847.3), while recurring revenue from cloud and support services increased by 1.9 per cent to SEK 1,781 million (1,748). Newly signed cloud service contracts to- talled SEK 224 million (197) in the fourth quarter, setting a new quarterly record. Adjusted EBITA increased by 16.1 per cent to SEK 350.6 million (302.1), mainly due to improved delivery efficiency and a stronger gross margin. Cash flow was positive, and the company ended the year with a net cash position of SEK 330 million (80). Group revenue and profit For 2024 as a whole, the company’s revenues amounted to SEK 4,864 million (4,847), representing an increase of 0.3 per cent. Revenue by Business Unit SEK million Jan-Dec 2024 Jan-Dec 2023 Jan-Dec 2022 Nordic & Baltics 2,529 2,619 2,508 UK 708 662 712 West 848 823 806 Central 888 833 789 Groupwide -109 -90 -58 Total revenue 4,864 4,847 4,757 For Business Unit Nordic & Baltics, total revenue decreased by 3.4 per cent over the year. System revenue decreased by 8.1 per cent, while service revenue increased by 7.8 per cent. Organically, the decrease amounted to 2.8 per cent. For Business Unit UK, total revenues increased by 7.0 per cent. Organic growth amounted to 4.5 per cent. System rev - enue increased by 17.2 per cent, while revenue from service operations decreased by 0.7 per cent. For Business Unit West, total revenue increased by 3.1 per cent. The increase in organic growth was 3.5 per cent. System revenue increased by 12.2 per cent, while service revenue was unchanged com - pared with the previous year. For Business Unit Central, total revenue increased by 6.6 per cent. The increase in organic growth was 7.4 per cent. System revenue increased by 19.6 per cent, while service revenue decreased by 4.7 per cent. Future contracted cash flows from Proact Finance amounted to SEK 64 million (67) as at 31 December 2024. Proact has good revenue distribution in respect of its various industry segments. The three biggest industry segments are Public Sector, Retail & Services and Manufacturing Industry. Revenue by sector Revenue by operating segment SEK million Jan-Dec 2024 Jan-Dec 2023 Jan-Dec 2022 System sales 2,686 2,698 2,861 Service operations 2,171 2,145 1,889 Other revenue 8 5 6 Total revenue 4,864 4,847 4,757 System revenue fell compared with the previous year, amount- ing to SEK 2,686 million (2,698) during the year. When adjusted for currency effects¹) and acquisitions and divestments, system revenue decreased by 0.2 per cent. Revenue for the services business, attributable to consultancy services, contract customer support, management and cloud services, increased by 1.2 per cent compared to the previous year. When adjusted for currency effects¹) and acquisitions and divestments, service revenue increased by 1.4 per cent. New contracts have been concluded relating to cloud services to the value of SEK 643 million (548). Revenue from cloud services is recognised as income over the term of the contract, which is normally between 3 and 5 years. Both cus - tomer support and cloud services are contributing to a positive development of the company’s total recurring revenue, which is important for the company’s future growth in profits. Reve - nue for the year from cloud services totalled SEK 1,130 million (1,097), an increase of 3.0 per cent. Revenue for the year from support services totalled SEK 625 million (595), an increase of 5.1 per cent. Revenue for the year from consultancy services totalled SEK 415 million (452), a decrease of 8.1 per cent. Adjusted operating profit before amortisation of intangible assets, adjusted EBITA, for the full year 2024 totalled SEK 351 million (302), which is an increase of 16.1 per cent compared to the previous year. During the same period, earnings before tax totalled SEK 278 million (218), which is an increase of 27.3 per cent. EBITA per Business Unit SEK million Jan-Dec 2024 Jan-Dec 2023 Jan-Dec 2022 Nordic & Baltics 259.5 206.9 174.1 UK 26.1 21.3 36.4 West 36.4 23.2 45.3 Central 31.2 34.0 45.7 Groupwide 1.6 16.7 13.7 Adjusted EBITA (before non-recurring items) 350.6 302.1 315.1 Non-recurring items - -16.6 2.0 EBITA 350.6 285.5 313.1 For Business Unit Nordic & Baltics EBITA increased due to increased gross margin. In the UK and West, EBITA increased due to higher revenue and increased gross margin. The reported tax expense over the financial year amounted to SEK 58 million (45), equivalent to an effective tax rate of 21 per cent (21). Earnings per share amounted to SEK 8.15 (6.29). Offentlig Sektor 34% (36) Handel & Tjänster 18% (23) Tillverkande Industri 11% (14) Energi 7% (6) Telekom 8% (5) Bank, Finans 7% (4) Media 2% (3) Övrigt 13% (12) Public Sector 34% (36) Retail and Services 18% (23) Manufacturing Industry 11% (14) Energy 7% (6) Telecoms 8% (5) Banking, Finance 7% (4) Media 2% (3) Other 13% (12) Offentlig Sektor 34% (36) Handel & Tjänster 18% (23) Tillverkande Industri 11% (14) Energi 7% (6) Telekom 8% (5) Bank, Finans 7% (4) Media 2% (3) Övrigt 13% (12) Public Sector 34% (36) Retail and Services 18% (23) Manufacturing Industry 11% (14) Energy 7% (6) Telecoms 8% (5) Banking, Finance 7% (4) Media 2% (3) Other 13% (12) Directors’ report 1) C urrency effects refer to the difference between the revenue for the year translated at the exchange rates of the current and previous years.
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Proact Annual and Sustainability Report 2024 37 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Financial position and cash flow The Group’s cash and cash equivalents amounted to SEK 814 million (548) as at 31 December 2024. In addition to this, the Group has an unused overdraft facility of SEK 159 million (155). The equity ratio was 26.2 per cent (24.9) as at 31 December 2024. Net debt has decreased by SEK 250 million during the year, while net debt decreased by SEK 307 million in 2023. As at 31 December 2024, the company has net cash amounting to SEK 330 million (80). Excluding lease liabilities, the Group has net cash amounting to SEK 584 million (326). Cash flow amounted to SEK 250 million (50) for the year as a whole, of which SEK 524 million (532) was from operat- ing activities. SEK 26 million (51) has been invested in fixed assets, of which SEK 6.6 million (9.1) was invested in Proact Finance in respect of customer deliverables, and SEK 0 million (8) has been paid out in respect of acquisition of companies. A change in loans from credit institutions and use of overdraft facilities have had a total impact of SEK 0 million (224) on cash flow. Dividends paid to the parent company’s shareholders amounted to SEK 54 million (51). Buy-backs of own shares totalling SEK 43 million (20) were made during the year. Of total bank overdraft facilities of SEK 159 million (155), SEK 0 million (0) has been utilised. Bank loans amount to SEK 230 million (222). The parent company has bank loans amounting to SEK 230 million (222): a three-year loan facility of EUR 20 million from Svensk Exportkredit and a three-year revolving credit facility agreed in the third quarter of 2021. The revolving facility amounts to a total of SEK 600 million, of which SEK 0 million was utilised as at 31 December 2024; it has been extended for a maximum of two years, which means that it will run until the third quarter of 2026. This bank loan includes lending terms in respect of net debt in relation to EBITDA. The lending terms have been met by a good margin in 2024 and as at 31 December 2024. The Group also uses invoice factoring in Sweden and Finland. Total goodwill for the Group amounts to SEK 1,022 million (984), attributable primarily to the operations in the Nether - lands, the United Kingdom, Sweden, Germany and Norway. Other intangible assets amount to SEK 130 million (177) and are depreciated over a useful life of five to ten years. The Group’s total deductions for losses amount to SEK 116 million (36). It has been assessed that of this amount, SEK 92 million (18) can be made use of against future taxable profits and the tax effect of the estimated future deduction has been recognised as a deferred tax asset. As at 31 December 2024, a total of SEK 22 million (23) has been recognised as a deferred tax asset, of which SEK 5 million (5) is attributable to tax losses. Tax expense for the year amounts to SEK 58 million (45). Tax paid during the year amounts to SEK 59 million (55). Employees The average number of employees over the year was 1,112 (1,160). On 31 December 2024, the company employed 1,137 people (1,171). Parent company The parent company’s revenue totalled SEK 153 million (152). Earnings before tax for the year amounted to SEK 273 million (142). This result is largely due to dividends and Group contri- butions from subsidiaries. The parent company’s liabilities in a joint Group currency account amounted to SEK 420 million (409) as at 31 December 2024. At the end of the period, the number of people employed by the parent company totalled 21 (20). The parent company’s operations remained unchanged during the period and comprise Group-wide functions and work relating to capital market and shareholder relations. There have been no significant transactions with related parties besides those with the management in the capacity of employees. Environment The company does not carry on any business affected by registration or licence obligations under the Swedish Environ - mental Code. Research and development The company’s research and development operations are run by means of an innovation process established within the company. This process ensures that the company will meet the needs and requirements of the market as effectively as possible, and also that new products and services will be de - veloped in a time-efficient, cost-effective manner. No research and development expenditure has been capitalised. The company also maintains close contact with the leading and most important suppliers of data storage and cloud service solutions. In addition, the company keeps track of technical developments in the company’s focus areas by participating in trade fairs and seminars. Risks and uncertainty factors The Group manages financial risks based on a finance policy laid down by the Board. The Group’s operational risks are mainly assessed and managed by Group Management and reported to the company’s audit committee and Board of Directors. See the section entitled “Risks and risk management” for a detailed description of risks and risk management. Board and management Since 1 March 2025, Magnus Lönn has been President and CEO of Proact IT Group AB. Other senior executives in 2024 were Jonas Hasselberg, President and CEO (until 28 February 2025), Jonas Ekman, VP Corporate Development, Paul de Freene, VP Service Operations (until 30 April 2024), Linda Höljö, CFO (until 13 January 2024), Åsa Regen Jansson, Interim CFO (from 14 January 2024 until 1 May 2024), Noora Jayasekara, CFO (from 2 May 2024). Magnus Lönn ‘’Business Unit Director Nordic & Baltics‘’ (until 28 February 2025), ‘Deputy CEO’‘ (from 1 October 2023 until 1 March 2025) and “Acting Business Unit Director Nordic & Baltics” (from 1 March 2025)’’. Alexander Lechthaler, Business Unit Director West. Madeleine Samuelson, VP People & Sustainability. Maria Gomez, Business Unit Director Central (from 8 January 2024). Per Sedihn, CTO & VP Portfolio & Technology. Martin Thompson, Business Unit Director UK (until 12 January 2024), Jonas Hasselberg, Interim Business Unit Director UK (from 13 January 2024 to 1 September 2024) and Jamie Ford, Business Unit Director UK (from 2 September 2024). Anna Söderblom was re-elected Chair of the Board at the Annual General Meeting held on 7 May 2024. Martin Gren, Erik Malmberg, Annikki Schaeferdiek and Thomas Thuresson were re-elected to the Board. Each year, the Board adopts an agenda for the Board and instructions for the Chief Executive Officer. This agenda determines – among other things – which issues are to be discussed at the Board meetings, the forms of Board meet - ings, minutes and reports, as well as the distribution of work between the Board and the Chief Executive Officer. The Board has met 8 times in 2024. At all ordinary general meetings, the Board has discussed Proact’s operations and financial position, looking at lines of business and financial administration. In addition, the Board has discussed strategic issues such as financial targets, the establishment of business and operational plans, acquisitions, issues relating to per - sonnel and organisation, legal issues and essential policies. Individual Board members have assisted the Group Manage - ment on various issues of a strategic nature. The Board has appointed two Board members to make up an audit commit- tee, two to make up a remuneration committee, and two to make up an M&A committee. The company’s auditor participates in Board meetings at least once a year and on such occasions reports on observations from the review. The company’s auditor also attended all audit committee meetings during the year. Guidelines on remuneration for senior executives The 2024 Annual General Meeting resolved that the following guidelines for remuneration to senior executives shall apply until the 2028 Annual General Meeting unless circumstances arise that necessitate an earlier revision. These guidelines cover remuneration to the CEO, Deputy CEO and senior management. The guidelines shall be applied to remunerations agreed upon, and changes made to already agreed remunerations, after the guidelines have been adopted by the 2024 Annual General Meeting. The guidelines do not cover remunerations resolved upon by the general meeting. The guidelines promote the company’s business strategy, long-term interests and sustainability. The combination of digitalisation and rapid development in areas such as cloud technologies, cybersecurity, and artificial intelligence is making customers’ IT infrastructure increasingly complex, with growing volumes of information. To remain relevant to customers, Proact must continue to ensure a very good customer experience as well as provide a market-leading offering and delivery model. To achieve this, Proact works according to the following strategies: • Establish a clear position in local markets • Offer a relevant and competitive portfolio of products and services • Professionalise and streamline the company’s service delivery • Drive employee engagement and development • Accelerate growth through acquisitions A successful implementation of the company’s business strategy and the achievement of the company’s long-term interests, including its sustainability, requires that the company can recruit and retain qualified employees. These guidelines enable senior executives to be offered competitive total remuneration. Variable cash remuneration covered by these guidelines should aim to promote the company’s business strategy and long-term interests, including its sustainability.
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Proact Annual and Sustainability Report 2024 38 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Forms of compensation, etc. The remuneration should be market-based and may consist of the following components: fixed cash salary, variable cash remuneration, pension benefits, and other benefits. In addition, and independently of these guidelines, the general meeting may decide on, for example, share and share price-related remunerations. The fixed cash salary for senior executives should be competitive within the market. The fixed cash salary for senior executives is reviewed annually. The fixed cash salary constitutes a maximum of 75 per cent of the total remuneration at the maximum outcome of variable cash remuneration. The fulfilment of criteria for the payment of variable cash remuneration shall be measurable over a period of one or several years. Variable cash remuneration constitutes a max - imum of 50 per cent of the total remuneration at the maximum outcome of variable cash remuneration for a certain financial year. The company does not have the right to reclaim variable cash remuneration. The company does not apply deferral periods for variable cash remuneration. Additional variable cash compensation may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are time-limited and made on an individual basis either for the purpose of recruiting or retaining senior executives, or as compensation for extraordinary efforts beyond the person’s regular duties. Additional variable cash compensation may not be granted more than once per year and per individual. Decisions on additional cash compensation shall be made by the Board upon recommendation from the remuneration committee. Additional variable cash compensa - tion, together with variable cash compensation as mentioned above, may constitute a maximum of 60 per cent of the total remuneration at the maximum outcome of variable cash compensation as mentioned above. Variable cash compen - sation shall not be pensionable, unless otherwise dictated by mandatory law or collective agreement provisions. For the CEO, pension benefits, including health insurance, shall be defined contribution. For the CEO, pension benefits, including health insurance, constitute a maximum of 20 per cent of the total remuneration at the maximum outcome of variable cash compensation. For other senior executives, pension benefits, including health insurance, shall be defined contribution unless the executive is covered by a defined benefit pension according to mandatory collective agreement provisions. For other senior executives, pension benefits, in - cluding health insurance, constitute a maximum of 20 per cent of the total remuneration at the maximum outcome of variable cash compensation. Other benefits may include, among others, life insurance, health insurance, and car benefits. Other benefits constitute a maximum of 15 per cent of the total remuneration at the maximum outcome of variable cash compensation. Regarding employment conditions subject to regulations other than Swedish, appropriate adjustments may be made to comply with mandatory rules or established local practices in the country of the individual’s employment, whereby the overarching purpose of these guidelines should be fulfilled as far as possible. Termination of employment Employment or service contracts for senior executives should be valid until further notice or for a fixed period. Upon termi - nation by the company, the notice period may be up to twelve months. The combined fixed cash salary during the notice period and severance pay shall not exceed an amount corre - sponding to eighteen monthly salaries for all senior executives. Upon termination by the senior executive, the notice period may be up to six months, without the right to severance pay. Criteria for allocation of flexible cash remuneration, etc. The variable cash compensation should be linked to the fulfilment of criteria set annually or with another periodicity, for either the company’s performance and/or the individual’s per - formance. This makes the variable cash compensation clearly connected to the company’s development and/or the individu - al’s work effort and performance. The criteria may be financial or non-financial, qualitative or quantitative, and should be designed to promote the company’s business strategy and long-term interests, including its sustainability. After the measurement period for the fulfilment of criteria for the payment of variable cash compensation has concluded, it should be determined to what extent the criteria have been met. Variable cash compensation for the CEO should be prepared by the remuneration committee and decided by the Board. Variable cash compensation for other senior execu - tives should be prepared and decided by the CEO. As far as financial criteria are concerned, the assessment should be based on relevant financial information. Salaries and employment terms for employees In the preparation of the Board’s proposal for these remuner- ation guidelines, salary and employment conditions for the Group’s employees were taken into account by including infor- mation on employees’ total compensation, the components of compensation, and the rate and pace of increase in com - pensation over time as part of the remuneration committee’s and the board’s decision-making basis when evaluating the fairness of the guidelines and the limitations that follow from them. The annual change in compensation for the company’s CEO and Deputy CEO on the one hand, and the change in the average compensation in full-time equivalents for the compa - ny’s other employees on the other hand, will be disclosed in the remuneration report. The decision-making process for establishing, reviewing and implementing the guidelines The Board has established a remuneration committee. The Chair of the Board may serve as the Chair of the remuneration committee. To handle conflicts of interest, the other mem - bers of the remuneration committee, elected by the general meeting, must be independent in relation to the company and its senior management. If the Board finds it more appropriate, the entire Board can perform the tasks of the remuneration committee, provided that any Board member who is part of senior management does not participate in the work. The tasks of the remuneration committee include preparing the Board’s decisions on proposals for guidelines for remu - neration to senior executives. The Board should prepare a proposal for new guidelines at least every fourth year and sub - mit the proposal for decision at the annual general meeting. The guidelines shall apply until new guidelines are adopted by the general meeting. The remuneration committee is also responsible for monitoring and evaluating programs for varia - ble compensation for senior management, the application of guidelines for remuneration to senior executives, and the cur- rent compensation structures and compensation levels within the company. During the Board’s consideration and decisions on compensation-related matters, the Chief Executive Officer or other members of senior management do not attend, insofar as they are affected by the matters. If the annual general meeting decides not to adopt the guidelines due to a proposal to that effect, the Board must present a new proposal before the next annual general meet - ing. In such cases, compensation shall be paid in accordance with the guidelines that previously applied or, if no such guide- lines exist, in accordance with the company’s practice. Deviating from the guidelines The Board may decide to temporarily deviate from the guide - lines, in whole or in part, if there are special reasons for doing so in an individual case and a deviation is necessary to serve the company’s long-term interests, including its sustainability, or to ensure the company’s financial stability. If such devia- tions occur, this must be reported in the remuneration report before the next annual general meeting. As mentioned above, it is part of the remuneration committee’s tasks to prepare the Board’s decisions on compensation matters, which includes proposals for decisions on deviations from the guidelines. Review of the guidelines A review of the guidelines for remuneration to senior exec- utives has been conducted ahead of the Annual General Meeting 2024. Performance share programme A decision was made at the Annual General Meeting on 7 May, with the requisite majority, to implement a performance share scheme in accordance with the Board’s proposal. The 2024 performance share scheme follows the same structure as the performance share scheme decided at the 2023 Annual General Meeting, with the same performance targets. The 2024 performance share scheme has been formulated to drive profitability and growth and includes around 20 individuals: the company’s Chief Executive Officer, the Group Manage - ment and other key individuals within the company. For more information, see Note 9 and the remuneration report. Corporate governance Corporate governance in Proact IT Group AB (publ) is based on the Swedish Companies Act, the Swedish Annual Ac - counts Act, the Articles of Association, the listing agreement with Nasdaq Stockholm and the Swedish Code of Corporate Governance. The Corporate Governance Report including the Board of Directors’ Report on Internal Control for 2024 has been prepared as a separate document, which can be found on page 42–44. The report is also published on the Proact website. Sustainability report In accordance with Chapter 6, Section 11 of the Swedish Com- pany Accounts Act, Proact IT Group AB (publ) has compiled the statutory sustainability report on pages 10-13 and 23-33 in the annual report. Ownership structure Proact shares have been listed on Nasdaq Stockholm with ticker symbol PACT since July 1999. Proact had 7,989 share- holders (7,498) as at 31 December 2024, most of whom were
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Proact Annual and Sustainability Report 2024 39 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report private individuals with small holdings. The largest share - holder, with a holding of over 10 per cent, was Aktiebolaget Grenspecialisten with a holding of 12.41 per cent. As far as the Board of Directors is aware, there are no contracts between shareholders requiring specific information in accordance with the Swedish Company Accounts Act. The share Share capital amounts to SEK 10,618,837, divided over 27,401,658 shares with a quotient value of SEK 0.39. All shares entitle the holder to an equal share of the company’s assets and profits and entitle the holder to one vote at the Annual General Meeting. At the Annual General Meeting, every individual entitled to vote may vote for the full number of shares owned and represented by the shareholder without any restriction on voting rights. Buy-back of own shares Shares are bought back partly with a view to adjusting the company’s capital structure, and partly with a view to using bought-back shares as cash for payment of LTI programmes or for the financing of acquisitions of companies or busi - nesses. At the Annual General Meeting held on 7 May 2024, the Board of Directors was authorised to acquire up to 10 per cent of the company’s shares by the next Annual General Meeting. Up to and including 31 December 2024, 97,150 shares have been bought back under this authorisation. During 2024, no shares in the company’s own custody have been used for acquisitions of companies. The total number of own shares held by the company is 500,189 as at 31 December 2024, which is equivalent to 1.83 per cent of the total number of shares. The total purchase price paid for shares in own custody during the year is SEK 42.8 million, corresponding to an average acquisition value of SEK 130.67 per share. Cancellation of own shares In accordance with the decision of the Annual General Meet - ing on 7 May, 600,000 shares were cancelled on 25 Septem - ber at a value of SEK 227,533 from shares in own custody. At the same time, a bonus issue of the same value was made, also in accordance with the General Meeting in May. Significant events after the end of the financial year In February, it was announced that the Board of Directors of Proact IT Group AB (“Proact”) has appointed Magnus Lönn as the new President and CEO of Proact, effective 1 March 2025. Mr Lönn succeeds Mr Hasselberg, who had previously informed the Board of his resignation. Expectations of the future Demand for Proact products and services is strong, although macroeconomic improvements and the anticipated accel - eration in demand are still projected to be ahead of us. Our customers’ needs to digitise their businesses, bolster cyber - security, and expand the use of artificial intelligence are all crucial elements driving progress. Despite the challenging comparative figures for the first quarter, we look ahead with great confidence to 2025 and the opportunities that await us. Our strategy is clear and we firmly believe that Proact is well positioned to support our customers in an increasingly com - plex digital landscape. We work with companies and organi - sations that are constantly searching for methods to improve their IT systems, whether it involves streamlining operations, protecting sensitive data or harnessing new technologies to create value. Rapid digitalisation and the growth of business- critical information are leading to increasingly complex IT infrastructure for companies. To address these challenges, we note a growing number of companies are exploring options to use various services and technologies to simplify their IT operations and ensure that their delivery of IT services meets both internal and external requirements. Another driving force is the rising awareness of the sig - nificance of cybersecurity. To safeguard business-critical information from both external threats and internal errors, it is now crucial for companies and organisations to secure their IT systems. Information security is therefore an important part of the business strategy and has a significant impact on the business decisions taken. A growing number of our customers are working towards offering IT support as a service to their users, enabling users to order and consume IT services according to their individual needs. To make this possible, businesses and public author - i ties are increasingly using a combination of private and public cloud services, known as hybrid clouds. This approach provides flexibility, cost-effectiveness and better adaptation to the needs of both internal and external users. In parallel with these trends, we also see growing demand for automation. By automating the underlying processes in a data centre, IT services can be delivered with greater speed and efficiency. This strategy enables us to lower complexity and risk, while providing solutions that better meet the busi - ness needs of our customers. Proact is well positioned to address these market trends. Our solidity in both financial position and cash flow, together with our established offering, gives us a strong foundation for organic growth. We can identify promising opportunities for continued expansion, both through growth with existing cus - tomers and by securing new business. At the same time, we also recognise opportunities for complementary acquisitions in our established markets in Europe as they arise. Dividend policy The company’s policy on dividends is adapted to suit the Group’s profit level, financial position and investment re - quirements. The dividend proposal is weighed up between shareholders’ expectations for reasonable direct returns and the company’s need to be able to finance itself. In the long term, Proact intends to issue a dividend of 25-35 per cent of profits after tax. Dividend proposal and proposed appropriation of profits The Board of Directors will propose to the Annual General Meeting the distribution of a dividend of SEK 2.40 (2.00) per share for the 2024 financial year, which corresponds to 29 per cent (31) of profit after tax. The Annual General Meeting has at its disposal: Retained earnings 394,237,148 SEK Profit/loss for the year 269,812,363 SEK Total non-restricted equity 634,049,510 SEK The Board of Directors proposes appropriation of retained earnings as follows: Dividend, SEK 2.40 per share 64,563,526 SEK Carried forward 569,485 ,984 SEK Total 634,049,510 SEK The Board of Directors proposes appropriation of retained earnings as follows: There are 27,401,658 registered shares in the company, of which, as at 31 March 2025, 607,689 shares are bought-back shares not entitled to dividends. The Board submits the following statement of motivation in accordance with Chapter 18, section 4 of the Companies Act with regard to the proposed appropriation of profits: The proposed dividend amounts to 10 per cent of the company’s equity and 6 per cent of the Group’s equity. Non- restricted equity in the parent company at the end of the 2024 financial year amounted to SEK 634,050,510. The annual report indicates that the Group’s equity ratio amounts to 26.2 per cent. It may further be noted that the Group has cash and cash equivalents amounting to approximately SEK 814 million, unutilised bank overdraft facilities amounting to approximately SEK 159 million and net cash of SEK 330 million. For the company’s recognised profit/loss for the financial year and its situation as at 31/12/2024, please see the follow- ing income statement and balance sheet below, statement of changes in equity and the statement of cash flows, as well as the notes pertaining to these.
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Proact Annual and Sustainability Report 2024 40 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Proact’s risk management framework aims to identify, control and reduce the risks linked with its operations. Proact ensures that decisions on risks are made at the right level in the organisation, depending on the impact a risk may have on Proact’s business targets. Risks may be identified by each subsidiary or by Group functions, and actions are approved locally or at Group level, or by Proact’s Board of Directors as defined in the risk management framework. Risks may be identified by each subsidiary or by Group functions, and actions are approved locally or at Group level as defined in the risk management framework. Risks limited to local operations are generally managed within each subsidiary or business unit, while certain legal, strategic and financial risks are managed at Group level. All risks and measures to mitigate them are regularly assessed. Business and operations / legal and regulatory issues Handling Compliance As a cloud service provider, Proact is subject to increasing levels of regulation, including GDPR, NIS, and the EU Data Act. There is a risk of non-compliance leading to fines and reputational damage. Proact is allocating additional resources to compliance and has appointed a dedicated Data Protection Officer, along with a legal and compliance team, responsible for implementing compliance controls and providing training. IT systems and cybersecurity Proact operates in a complex technological landscape and manages huge volumes of mission-critical data for its cus- tomers. Cybersecurity incidents could have a significant negative impact on Proact’s customers as well as on its business operations, financial performance and supplier relations. Proact is investing significant resources in cybersecurity in order to remain resilient and support customers and its own organisation. A number of staff are working to ensure that the company goes on implementing improved measures to reduce risks and unauthorised access to systems, and to protect the company from exposure to malware and security vulnerabilities. Proact operates a 24/7 Security Operations Centre that monitors and responds to security threats. Proact has internally appointed a Group Chief Information Security Of ficer for the Group and an internal Group Data Protection Officer for the Group who work together in close co - operation. All staf f receive mandatory annual training on cybersecurity and privacy in order to enhance security and awareness of privacy. Workers and talent management An inability to recruit, develop, motivate and retain qualified staff could have a negative impact on Proact’s success. As future success is dependent on the ability to maintain its reputation as an attractive employer, Proact has customised training schemes and in-house schemes. Employer brand- ing and talent development are focus areas for Proact’s People and Culture strategy. This includes further development of our ability to attract, develop and retain both employees with outstanding and/or niche skills, and young talent as well. During the year, a new employee promise and updated values were introduced to clarify Proact’s employer brand. Acquisitions and integration The implementation and integration of acquisitions involves risk. The acquired company’s relations with customers, suppliers and key individuals may be adversely affected. This is also a risk that integration processes may become more costly or more time-consuming than calculated, and that anticipated synergies may fail to emerge. Proact evaluates potential candidates for acquisition on the basis of an evaluation model, which includes potential synergy effects and how well the candidate for acquisition supports Proact’s strategies. A review (due diligence) of the entire company takes place in due course before a decision is made so that any risks can be evaluated. A structured integration plan in accordance with Proact’s integration handbook, overseen by a Group-level steering group, is being followed. Experience gained from acquisition and integration work carried out creates a strong foundation for successful limitation of these risks in future. Management of contracts Proact has a large number of service contracts with cus- tomers all over the world. Breaches of these contracts could have an adverse impact financially and in terms of reputation. There is also an additional assumed contract risk on account of acquisitions. Proact focuses on contract management, comprehensive contract approval processes, train- ing new colleagues in contract compliance processes, amending contract documentation and auditing. Risks involving business ethics Risk of inappropriate business practices in our sales activities. Proact maintains a zero tolerance approach to unethical business practices in accordance with its Code of Conduct and Company Handbook, and all employees receive mandatory training. The company has a whistleblower policy that is laid out in the Company Handbook so that all employees receive information on how to report suspected deviations. Equality and diversity Risk of imbalance in workplace diversity can lead to an in ability to recruit or retain staf f, or harm the employer’s brand. Proact promotes diversity in the workplace and ensures that people with similar qualifications are given the same employment terms and opportunities without distinction or discrimination on the basis of gender, transgender identity or expression, ethnicity, religion or belief, disabil- ity, sexual orientation or age. Market and environment Handling The general market, political and economic situation The general market situation affects the choices and will- ingness of Proact’s existing and potential customers to invest. The heightened geopolitical uncertainty globally has led to further uncertainty for customers, along with potential disruptions to Proact’s supply chains and customers’ will- ingness to invest. Global events such as the wars in Ukraine and the Middle East have also led to an increased inflation risk. Proact’s impact on the general market, along with the political and economic landscape, is relatively lim- ited. Proact operates over a significant geographical area, and the company has a broad customer base in a large number of industries. The volume of digital information for storage and archiv- ing is expanding greatly, while Proact supplies its customers with efficiency improvements and cost savings. The fact that approximately a third of Proact’s total sales are contracted for one to five years alleviates the effects of market fluctuations. Price adjustments to take into account Customers A limited geographical presence or a presence in an industry sector may affect Proact’s business. Proact has a good risk spread with regard to geographical presence and customer segments. Our biggest customers are in the trade/services sector, the public sector, telecoms and the manufacturing industry, and are spread across a number of countries. Proact’ s ten biggest customers account for 22 per cent (20) of sales, and no single customer represents more than 4 per cent (3) of revenue. Suppliers Dependence on key suppliers may affect Proact’s ability to deliver on customer contracts. Proact works continuously with evaluation of various suppliers in order to minimise risk expo- sure and dependency. As an independent integrator, Proact has the opportunity to achieve a good balance between a number of market-leading strategic suppliers in combination with smaller niche suppliers in the respective product areas. Products and technology Risk of not meeting market requirements. The IT sector is constantly undergoing development as regards products and technology, with requirements for more efficient solu- tions helping users to save money. Proact is constantly evaluating new technologies and developing new products and services in close partnership with its customers and suppliers to be able to provide the best solutions possible for the market. Business and operations / legal and regulatory issues, continued Handling Risks and risk management
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Proact Annual and Sustainability Report 2024 41 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Competitors Proact’s business may be adversely affected by competi- tion. Most competition comes from integrators focusing on general IT business, public cloud services suppliers and global IT service companies. Proact’s competitive advantages lie mainly in being an independent integrator with specialist expertise and extensive experience with regard to data centres with associated consultancy and support services, as well as in the field of cloud services. Our international geographical spread, close customer relations on a local level and diverse customer base from an industry perspective place us in a strong competitive position. Results from customer satisfaction sur- veys remain strong, with higher scores since last year. We are constantly developing our product portfolio, expertise and partner relations in order to further reinforce our market posi- tion and competitive advantage. Social and environmental responsibility Risk of inappropriate practices in respect of human rights, health, safety and the environment in our supply chains. Proact maintains a zero tolerance approach to violations of human rights and has a process in place to ensure compliance with all applicable laws and industry standards in the supply chain. Proact endeavours to use limited environmental resources efficiently. Climate change Failure to meet customers’ and investors’ demands and expectations in respect of climate action may lead to lost contracts, financial impact or damage to the Proact brand. Difficulties in finding suppliers that meet Proact’s climate ambition requirements in terms of renewable energy at data centres, low PUE or net zero targets, for instance, may impact on Proact’s ability to deliver on customer requirements or achieve our own sustainability targets. Proact’s climate impact is mainly indirect and can be found in the supply chain. The aim is to reduce greenhouse gas emissions, with a view to reaching net zero by 2050. Moving forward, efforts will focus on minimising the carbon footprint of the supply chain. Proact’s objective of using only data centres powered by renewable energy is one key factor for achieving this target. Another involves collaboration with suppliers who are dedicated to reducing their emissions. Financial risks Handling Liquidity risk Liquidity risk is the risk of the company not being able to meet its payment obligations in full, or of only doing so on significantly unfavourable terms due to a shortage of cash. Liquidity risk is managed within Proact by combining liquidity planning with credit limits and lending facilities to ensure that the Group has sufficient liquid funds at all times. At the end of the year , Proact had cash and cash equivalents amounting to SEK 814 mil- lion (548) and an unutilised overdraft facility of SEK 159 million (155), and at the same time net debt has been reduced from SEK 250 million to net cash of SEK 330 million during the 2024 financial year. Liabilities related to leases in accordance with IFRS 16 accounting rules—see also Note 27—have had a negative impact on net liabilities in the amount of SEK 254 million (246). Excluding lease liabilities, the company has a net cash position of SEK 584 million (326). According to the company’s finance policy, the parent company must manage the Group’s investments of surplus liquidity. Investments may be made in bank accounts or in interest-bearing securities, which must be government bonds or treasury bills. Investments may only be made with counterparties with a high credit rating of at least A- (Standard & Poor’s) or A2 (Moody’s). Short-term liquidity needs are currently secured with overdraft facili- ties. To ensure that these needs can be met, a strong financial position is required in combi- nation with active efforts to gain access to such credit. Finance risk There is a risk that Proact may face challenges in securing the necessary funds for its capital requirements or in refi- nancing current loans, which could result in higher costs or a decline in financing. Bank loans amount to SEK 230 million (222). The bank loan consists of both a three-year loan facility of EUR 20 million from Svensk Exportkredit and also a three-year revolving credit facility that Proact signed in the third quar- ter of 2021. The revolving facility amounts to a total of SEK 600 million, of which SEK 0.0 mil- lion was utilised as at 31 December 2024; it has been extended by a maximum of two years, which means that it will run until the third quarter of 2026. This bank loan includes lending terms in respect of net debt in relation to EBITDA. The lending terms have been met by a good margin in 2024 and as at 31 December 2024. See Note 24 for further information. The company also uses invoice factoring in Sweden and Finland. With invoice factoring, the risk remains with the company until the customer pays. Overdraft facilities granted amounted to SEK 159 million, of which SEK 159 million was un utilised as at 31 December 2024. The company is unable to guarantee that no capital requirement will arise. Failure to generate profits or meet future needs for finance may substantially affect the market value of the company. Financial risks, continued HandlingMarket and environment, continued Handling Capital The Group’s objective is to maintain a stable financial position that protects its ability to operate effectively and to consistently generate returns for its shareholders and other stakeholders and to maintain an optimal capital tructure to keep the cost of capital down. Proact’s strategies ensure that it achieves a solid financial position, thereby generating profits for shareholders by increasing the value of assets under management. In order to maintain or adjust the capital structure, the group may change the dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce liabilities. There are no external capital requirements other that those referred to in the Swedish Companies Act. A dividend of SEK 53,984,412, equivalent to SEK 2.00 per share, was issued in 2024 for the 2023 financial year. The Group has met the loan covenants throughout the period. There are no indications that the Group would have difficulties in meeting the covenants when they are next tested, i.e. by the interim reporting date of 31 March 2025. Credit/counterparty risk Credit risk is the risk that the counterparty in a transaction will not meet its financial obligations and that collateral does not cover the company’s receivables. The predominant element of Proact’s credit risk relates to receivables from customers. Proact’s sales are divided over a large number of end-customers spread over a broad geo- graphical area, which limits the concentration of credit risk. Credit risk within the Group must be kept to a minimum by establishing a credit limit for each customer and partner, as well as entering into contracts where considered necessary with a view to minimising credit risk. Below is an analysis of accounts receivable as at 31 December: 2024 % 2023 % Not due 664.3 87.2 632.0 88.1 <30 days 71.2 9.3 59.0 8.2 31-60 days 12.6 1.7 11.8 1.7 61-90 days 4.8 0.6 9.3 1.3 >90 days 9.0 1.2 5.5 0.8 Total 761.9 100.0 717.7 100.0 The credit quality of not due receivables is deemed to be good. Customer losses for the year amount to SEK 0 thousand (1). Provision for doubtful debts amount to SEK 5,540 thousand (1,121). During the year, anticipated bad debt losses totalled SEK 343 thousand. Of total accounts receivable, 3 per cent (4) are older than 30 days. Currency risk Proact faces significant exchange rate risks in USD and EUR, primarily because most purchases are sourced from suppliers in these areas. As a result, fluctuations in exchange rates may adversely impact the income state- ment, balance sheet, and statement of cash flows. Proact manages the currency risk that may arise through a currency clause with customers, which covers the currency risk that may occur from the time of tendering until delivery to the customer, and also by hedging major purchases in foreign currencies. According to Proact’s finance policy, exposure exceeding EUR 200 thousand / USD 250 thousand must be hedged. The fair value of outstanding forward contracts as at 31 December 2024 amounted to SEK -408 thousand (-1,669). The purchase and sale of foreign currencies is reported in note 14. Interest rate risk There is a risk that permanent changes in market interest rates may adversely affect Proact’s cash flow or the fair value of financial assets and liabilities. Interest rate risk exposure arises mainly from outstanding external loans. The impact on net interest is partly due to average interest terms on borrowings. In accordance with the Group’s financial policy, all external borrowings have short interest terms; three months on average. No interest rate derivatives were utilised to manage this risk in 2024. Lending and interest rates are specified in greater detail in Note 24.
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Proact Annual and Sustainability Report 2024 42 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Proact IT Group AB (publ) is a parent company in the Proact Group which consists of a number of subsidiaries as outlined in the annual report, Note 17. This corporate governance report has been compiled in accordance with the Swedish Company Accounts Act and the Swedish Code of Corporate Governance. The parent company and Group are governed via the Annual General Meeting, the Board of Directors and the Chief Exec - utive Officer in accordance with the Swedish Companies Act, t he Swedish Company Accounts Act, the company’s Articles of Association, the listing agreement with Nasdaq Stockholm and the Swedish Code of Corporate Governance. This code is based on the “comply or explain” principle. Proact deviates from the recommendations of the code in respect of one item: the company’s half-yearly and nine-monthly reports have not been reviewed by the auditors. The Board has determined that based on the complexity of the company and the business risks, such a review would not add value commensurate with the resources and costs involved. Governance structure Annual General Meeting The Annual General Meeting is the supreme governing body of Proact. The Annual General Meeting of Proact IT Group AB is held annually in April or May in Solna. The time and date of the meeting are published at the latest when the interim report for the third quarter is issued and published simultaneously on the company’s website. The Annual General Meeting elects Proact’s Board of Directors and its Chair. The other tasks of the Annual General Meeting also include: • Approving and adopting the company’s income statements and balance sheets. • Making decisions on allocation of the company’s profit. • Making decisions on changes to the Articles of Association. • Electing auditors. • Making decisions on discharge from liability for Board mem - bers and the Chief Executive Officer. • Making decisions on remuneration for the Board of Directors and auditors. • Approving principles for the appointment of the nomination committee. Shareholders who do not have the opportunity to attend the General Meeting in person may instead participate via a repre - sentative. The Board of Directors also has the option of allowing s hareholders to participate by postal vote. The “Ownership” section in the Directors’ Report indicates the direct or indirect shareholdings in the company which represent at least one-tenth of the voting rights for all shares in the company. The “Shares” section also indicates the restrictions on how many votes each shareholder can cast at an Annual General Meeting. 2024 Annual General Meeting Proact’s annual general meeting was held on 7 May 2024. 69 shareholders representing 50.9 per cent of both the number of shares and the total number of votes in the company exercised their voting rights by attendance and postal vote. Among other things, the following decisions were made: • The income statement and balance sheet, and the consoli - dated income statement and consolidated balance sheet were ap proved and adopted. • The Board’s remuneration report was approved. • The Board’s proposal for a dividend of SEK 2.00 per share for the 2023 financial year was adopted. • The Board of Directors and Chief Executive Officer were granted discharge from liability for the 2023 financial year. • Remuneration payable to the Board of Directors was set at a total of SEK 2,180,000. • Remuneration to the auditors will be paid in accordance with an approved invoice. PwC were re-elected as auditors. • Re-election of Board members Anna Söderblom, Annikki Schaeferdiek, Erik Malmberg, Martin Gren and Thomas Thuresson. Re-election of Anna Söderblom as Chair of the Board. • A decision was made, with the requisite majority, to imple - ment the performance share scheme in accordance with the B oard’s proposal. This scheme has been formulated to drive profitability and growth and includes around 20 individuals: the company’s Chief Executive Officer, Group Management a nd other key individuals within the company. For further information, see Note 9. • Principles for the appointment of a nomination committee for the 2025 Annual General Meeting were adopted. • A decision was made to authorise the Board to make deci - sions on the new issue of shares. It was noted that payment through offsetting must only take p lace in connection with company acquisitions. • A decision was made to authorise the Board to implement acquisitions and transfers of the company’s own shares. It was also decided that the Board can only buy back shares in such numbers that bought-back shares, together with any newly issued shares according to the authorisation decided upon in the section above, do not exceed a total of 10 per cent of the now outstanding number of shares. It was noted that payment through offsetting must only take place in connection with company acquisitions and that the company is not allowed to sell its own shares on Nasdaq Stockholm. • It was decided, with requisite majority, to authorise the Board to reduce the share capital (cancellation) and to increase share capital by means of a bonus issue in accordance with the Board’s proposal. Nomination committee At the Annual General Meeting of Proact held on 7 May 2024, a decision was made for the nomination committee to comprise representatives for the four biggest shareholders or, as referred to in the paragraph below, the five biggest shareholders in terms of votes as at 30 September 2024. The nomination committee therefore has the right to require the attendance of the Chair of the Board at meetings of the nomination committee. The Chair of the Board must, without delay, contact the four biggest shareholders in terms of votes in accordance with Euroclear Sweden’s list of shareholders as at 30 September 2024, and offer each and every one of them the opportunity to appoint a member of the nomination committee within a reasonable time. If there is a change in the company’s ownership structure after 30 September but before the date occurring two months before the forthcoming Annual General Meeting, and if a share - holder constituting one of the four biggest shareholders in the c ompany in terms of votes after this change expresses a desire to the Chair of the nomination committee to become part of the nomination committee, this shareholder shall have the right to either appoint a further member of the nomination committee or, if so decided by the nomination committee, to appoint a member of the nomination committee who will replace the member that is the smallest shareholder in terms of votes after the change in ownership and that has appointed a member of the nomination committee. In addition, any member appointed by a share - holder that has sold more than half of its shareholding after 30 S eptember and thus no longer constitutes one of the ten biggest shareholders in the company will be obliged to resign from the company’s nomination committee within two weeks of the date of the sale. The names of the members of the nomination com - mittee must be published as soon as the nomination committee h as been appointed. If any of the largest owners declines to appoint a representative on the nomination committee, the next largest shareholder in order of size must be given the oppor- tunity to appoint such a representative. A representative of the s hareholders is appointed Chair of the nomination committee. The mandate period of the nomination committee continues until a new nomination committee has been appointed. Where appropriate, the nomination committee must prepare and submit to the Annual General Meeting proposals for: • Election of a Chairman for the meeting • Election of a Chairman of the Board and other company directors • Directors’ fees divided between the Chairman and other members, plus remuneration for committee work • Election of and payment to auditors (where appropriate) • Decisions on principles for the appointment of a nomination committee Work of the nomination committee The composition of the nomination committee was announced on 10 October 2024, comprising Katarina Berggren, Chair, (Aktiebolaget Grenspecialisten), Niclas Röken (Alcur Fonder AB), Jesper Bergström (Handelsbanken Fonder) and Johannes Wingborg (Länsförsäkringar Fondförvaltning AB). This nomina - tion committee represented a total of around 33.08 per cent of v otes in Proact as at 30 September 2024. The nomination committee has applied rule 4.1 in the Swed - ish Code of Corporate Governance as its diversity policy when d evising the proposal for the Board, with the aim of achieving effective composition of the Board in terms of diversity and breadth with regard to factors such as gender, nationality, age and industry experience. The ambition of the nomination committee is to propose a Board composition where members complement one another with their respective experience and skills in a manner that gives the Board the opportunity to help bring about positive development of the company. The nomi - nation committee always focuses on diversity so as to ensure Auditor Shareholders via Annual General Meeting Board of Directors Chief Executive Officer Senior management Nomination committee Remuneration committee Audit committee M&A committee Corporate governance report
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Proact Annual and Sustainability Report 2024 43 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report that the Board has different perspectives on its Board work and the considerations made. The nomination committee also takes into account the need for regeneration and carefully examines whether the proposed Board members have the opportunity to devote sufficient time and care to their Board work. All share - h olders have the opportunity to submit proposals for Board members to the nomination committee. The nomination commit - tee held several minuted meetings. A r eport on the work of the nomination committee is pub - lished on the Proact website – www.proact.se, most recently in c onnection with the notice to attend the 2024 Annual General Meeting. Board of Directors Proact’s Board of Directors makes decisions on issues relating to Proact’s strategic focus, investments, finance, organisational issues, acquisitions and divestments, as well as its major policies. The Board must also ensure that correct information is given to Proact’s stakeholders in accordance with the governing regulations mentioned above. Board composition and diversity According to the Articles of Association, the Board of Directors must consist of three to eight members, with at most five deputy members. These members, and where appropriate their dep - uties, are elected each year at the Annual General Meeting for t he period until the next Annual General Meeting. At the Annual General Meeting held on 7 May 2024, it was decided that the Board would consist of five members and no deputies for the period until the next Annual General Meeting. The nomination committee applies the Swedish Code of Corporate Governance, section 4.1, as its diversity policy. The objective is to propose a composition of a Board with complementary experience and skills, also demonstrating diversity in terms of age, gender, nationality and industry experience. The composition of the present Board is the result of the work of the nomination com - mittee prior to the 2024 Annual General Meeting. The Board c onsists of members with experience from various industries and is gender balanced. The Articles of Association contain no provisions relating to the appointment or compulsory retirement of Board members or to amendments to the Articles of Association. The Board is deemed to be compliant with the stock ex- change rules from Nasdaq Stockholm and the Swedish Code of C orporate Governance in respect of requirements for indepen - d ent Board members. Once each financial year, the Board of Directors reviews the work of the Board and the CEO through: • Evaluation of the work of the Board. A board evaluation is carried out in the fourth quarter of the financial year. The survey results are discussed by the Board and shared with the nomination committee. The nomination committee then interviews all members during the same quarter or the first quarter of following year. • Evaluation of the work of the CEO. • The CEO’s view of the work of the Board. This review forms the basis for the Board’s future working methods. Board remuneration The Annual General Meeting of 7 May 2024 set the total remu - neration of the Board of Directors at SEK 2,180,000, of which t he Chairman receives SEK 625,000 and the other members SEK 285,000 each. A total of SEK 415,000 is paid for commit- tee work. No additional remuneration was paid to the Board of D irectors during the year. Board members are not included in any share or share price-related incentives schemes issued by the company. The Board’s procedures The work of the Board is governed by a set of procedures es - tablished annually which regulate the members’ mutual division o f work, decision-making arrangements, signing on behalf of the company, a meeting agenda for the Board and the tasks of the Chair. The work of the Board follows a set agenda intended to ensure that the Board’s information needs are satisfied and that there is an appropriate distribution of work between the Board and the Chief Executive Officer. In 2024, the Board held 10 meetings (11). The control issues arising at Board meetings are dealt with by the Board where appropriate following preparation by the remuneration commit - tee, M&A committee or audit committee. In addition, at least o nce a year the company’s auditors report directly to the Board regarding their observations from the review and their assess - ments of the company’s internal accounting control. B esides the ongoing follow-up and monitoring of business, over the year the Board of Directors has dealt with strategies, acquisition issues, capital structure and organisational issues. Composition of the Board and attendance at Board meetings, 2024 Board member Remuneration committee Audit committee M&A committee Attendance at Board meetings, % Anna Söderblom 100 Annikki Schaeferdiek 91 Martin Gren 100 Thomas Thuresson 100 Erik Malmberg 100 Board members’ independence in respect of Proact, Proact’s executive and major owners Board member Function Date of birth Nationality Elected Inde- pen dent Shareholding 31/12/2024 Anna Söderblom Chair 1963 Swedish 2022 Yes 10,100 Martin Gren Member 1962 Swedish 2017 No 3,400,000 1) Annikki Schaeferdiek Member 1969 Swedish 2017 Yes 4,000 Thomas Thuresson Member 1957 Swedish 2018 Yes 2,500 Erik Malmberg Member 1982 Swedish 2020 Yes 7,000 1) H oldings directly or indirectly owned and/or controlled through legal entities or related parties. Other information on Board members • Anna Söderblom, teacher and researcher at the Stockholm School of Economics, Chair of the Board of Net Insight AB and Board member of Länsförsäkringar Liv Försäkringsaktiebolag, BTS Group AB, HAKI Safety, Dedicare AB and Webstep ASA. Previously held senior positions at Microsoft, Posten and Industrifonden. • Martin Gren, founder and advisor to Axis Communications AB, Chairman of the Board of Axis AB and Axis Communications AB, and Board member of Askero Sagoboks Förlag AB, AB Grenspecialisten, Lumen Radio and H. Lundén Holding AB. • Annikki Schaeferdiek, founder and CEO of Syster P AB, Chair of the Board of Formpipe Software AB, and Board member of Syster P AB, Axiell Group AB and Addtech AB • Thomas Thuresson, former CFO and various senior positions within the Alfa Laval Group, Chairman of the Board of Terra - t ech Group AB and Tetra Laval Real Estate AB, and Board member of JM AB and Skiold Group AS. Member of the Board for JM AB and Skiold Group A/S. • Erik Malmberg, independent advisor and investor. Former Investment Advisory Professional at Triton Advisers (Sweden) AB and equity analyst at Goldman Sachs International. No other board assignments. Remuneration committee The duty of the remuneration committee is to examine the principles for remuneration, including performance-based remuneration and pension terms for the company’s senior executives, and to give recommendations to the Board concern - ing these issues. Issues relating to the Chief Executive Officer’s t erms of employment, remuneration and benefits are prepared by the remuneration committee and decided upon by the Board of Directors. This committee also discusses the general starting points for setting salary levels within the Group. More informa - tion on remuneration to the Chief Executive Officer and other m embers of senior management can be found in the annual report, Note 9. The remuneration committee comprises two Board members and has held three minuted meetings during the year, as well as maintaining constant contact by telephone and e-mail. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Board meetings in 2024 FEBRUARY Year-end report, report from auditors, review of the service delivery organisation, review of BU West. MARCH Decision on annual report, preparation for Annual General Meeting. MAY Interim report January-March, review of BU Central, start of strategy work, Annual General Meeting, constitutive Board meeting, adoption of instructions and policies. Election of committees. JULY Interim report, January-June. SEPTEMBER Strategy work, review of portfolio, market and business plans and risk for Business Units and the Group. OCTOBER Interim report, January-September. Risk review and review of the sustainability strategy. DECEMBER Review of the business plan for 2024. Organisational development. Evaluation of the work of the Board, the Chief Executive Officer and senior management. Review, BU NOBA.
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Proact Annual and Sustainability Report 2024 44 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Audit committee The job of the audit committee is to prepare Board work on quality assurance of the company’s financial reporting. This committee maintains constant contact with the company’s external auditors in order to stay abreast of the focus and scope of the audit and discuss views on the company’s risks. Deci - sions by the Board are required for non-audit services from the s elected auditor that exceed SEK 500 thousand. Total fees for non-audit services must not exceed 70 per cent of the budgeted audit fees. This committee is also tasked with providing its evaluation of the audit work to the nomination committee and with assisting the nomination committee with production of the nomination committee’s proposals to the Annual General Meet - ing concerning the election of auditors and the size of the audit f ee. The committee also deals with issues related to internal control, risks, insurance and GDPR. After the 2024 Annual General Meeting, the audit commit - tee comprises two Board members. The Chair of the audit c ommittee prepares and convenes the meetings of the audit committee. The audit committee has held four minuted meetings during the year, as well as maintaining constant contact by telephone and email. M&A committee The committee’s job is to prepare the Board’s work on acqui - sitions in accordance with the company’s acquisition strategy. T his work includes evaluating potential acquisition candidates and assisting the management in matters such as financing, business valuation and pipeline of potential acquisitions. During the year, the M&A committee consisted of two Board members and held ten meetings for which minutes were kept. External auditors The Annual General Meeting, which was held on 7 May 2024, elected the firm of auditors Öhrlings PricewaterhouseCoopers AB (PwC), with Magnus Thorling as principal auditor, for the period up to the 2025 Annual General Meeting. The auditors review the Board’s and the Chief Executive Officer’s management of the company and the quality of the company’s accounts documentation. The auditors’ report on the results of their review to shareholders by means of the audit report, which is presented at the Annual General Meeting. In addition, the auditors submit detailed reports at the meetings of the audit committee with the committee and to the Board of Directors at least once a year. The company’s half-yearly and nine-monthly reports have not been reviewed by the auditors. This is a deviation from the re - c ommendation in the Swedish Code of Corporate Governance. The Board is of the opinion that any such review on the basis of a cost perspective is not necessary, given the company’s degree of complexity and business risks. PwC performs certain services for Proact in addition to audits. When PwC is engaged to provide services other than auditing, this takes place in accordance with the rules decided upon by the audit committee for approval of the nature and scope of the services and remuneration for the same. Proact is of the opinion that execution of these services is within the guidelines and has not impacted upon PwC’s independence. Further information on remuneration to the auditors can be found in the annual report, Note 8. Chief Executive Officer and Group Management From 1 September 2018 until 28 February 2025, Jonas Hasselberg was President and CEO of Proact IT Group AB. Jonas owned 39,711 shares in the company as at 31 December 2024. Since 1 March 2025, Magnus Lönn has been President and CEO of Proact IT Group AB. Magnus Lönn holds a Master of Science in Applied Physics and Electrical Engineering from the Institute of Technology at Linköping University and has ex- perience from senior positions within Nasdaq and Time People G roup. Magnus Lönn owned 7,000 shares in the company as at 31 December 2024. Magnus Lönn has no significant share - holdings or co-ownership in companies with which Proact has si gnificant business relationships. The Chief Executive Officer manages operations in accord - ance with the instructions of the Board of Directors and the a pproved distribution of work between the Board and the Chief Executive Officer. The Chief Executive Officer is responsible for keeping the Board informed and for ensuring that the Board is provided with the requisite decision data. The Chief Exec - utive Officer presents reports to the Board but is not a Board m ember. This is in accordance with applicable policy, in which neither the Chief Executive Officer nor another senior executive should be a Board member in the parent company. In ongoing contact, the Chief Executive Officer keeps the Chair informed of the development and financial position of the company and t he Group besides providing periodic reporting. The Chief Executive Officer and other members of senior management hold regular meetings in order to review results development, update forecasts and plans, and make decisions on various issues. As at 31 December 2024, Proact’s Group Management consisted of the Chief Executive Officer and eight other senior executives. The subsidiaries running operations report to the relevant Business Unit Directors, who in turn report directly to the Chief Executive Officer. Reporting takes place on a monthly basis, with more in-depth quarterly reviews of the operations in ques - tion. The Boards of Directors of the subsidiaries principally con - sist of members of Proact’s Group Management. Chair positions a t the subsidiaries are held either by the Chief Executive Officer of Proact IT Group AB or by the relevant Business Unit Directors. Remuneration to senior executives The Annual General Meeting held on 7 May 2024 adopted the Board’s proposal concerning guidelines for remuneration to sen - ior executives, which should apply until the 2028 Annual General M eeting, unless circumstances arise that necessitate revision of this at an earlier stage. These guidelines include the Chief Executive Officer and senior management. The guidelines must promote the company’s business strategy, long-term interests and sustainability. Provision of information Proact endeavours to maintain communication with its share - holders and other stakeholders which is correct, clear, factual, r eliable and quick. It must also be characterised by openness. Proact regularly publishes interim reports and annual reports in Swedish and English. Events which are deemed to affect rates are published as press releases. The Proact website also includes a wide range of company information which is updated regularly. In addition, Proact communicates with the capital market and the media by means of meetings with analysts and journalists in connection with the publication of the interim reports and annual reports. Representatives of Proact also take part regularly in various meetings of shareholders and analysts. The Board’s Report on Internal Control Control environment Internal controls at Proact are based on a control environment which includes organisation, decision paths, authorisations and responsibilities. This is documented and communicated in steering documentation such as internal policies, guidelines and instructions. For example, this is applicable to the distribution of work between the Board of Directors and the Chief Executive Officer, and between the various units within the organisation, a nd also via instructions for rights of authorisation, accounting and reporting, etc. The Board follows up to ensure compliance with set principles for financial reporting and internal controls, and also maintains the appropriate relationships with the com - p any’s auditors. The corporate executive reports to the Board based on established procedures. The corporate executive is responsible for the system of internal controls which is required for handling significant risks in ongoing operations. For example, guidelines and instructions for various officials are compiled in order to reinforce understanding and the importance of their respective roles, and hence also to contribute towards good internal control. Risk assessment and inspection activities The Board holds overall responsibility for risk management. Clear organisation and decision-making arrangements aim to create good awareness of risks among employees and well considered risk-taking. The risk assessment includes identifi - cation, charting and assessment of risks at all levels within the G roup. Activities and reporting take place regularly in order to maintain good internal control, and hence to prevent and detect risks. Information and communication Essential guidelines and manuals – such as the Company Handbook and finance policy – affect financial reporting and are updated and communicated regularly to the relevant personnel within the Group. There are both formal and informal information channels for the corporate executive and Board for essential information from employees. For external communica - tion, the company complies with the governing rules discussed p reviously. Follow-up The Board receives monthly financial statements, as well as non-conformance reports relating to the company’s profit and position. Extraordinary incidents and emerging risks are also reported each month. The Board regularly evaluates the infor - mation submitted by the corporate executive. The work of the B oard also includes ensuring that measures are implemented with regard to any shortcomings and proposals for measures which have arisen during external audits. Given the size of the company, there is no separate department for internal audits. Instead, this work is carried out from the Group finance function together with the company’s own lawyers. The company per - forms regular audits of its subsidiaries. The outcome is reported to t he CEO, CFO and Board of Directors.
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Proact Annual and Sustainability Report 2024 45 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Anna Söderblom Martin Gren Erik Malmberg Annikki Schaeferdiek Thomas Thuresson Role Chair of the Board Board member Board member Board member Board member Current position Teacher and researcher, Stockholm School of Economics. Independent advisor, investor and board work. Chief Executive Officer of Syster P AB. Chief Executive Officer of Tetra Laval Real Estate AB. Date of birth 1963 1962 1982 1969 1957 Elected 2022 2017 2020 2017 2018 Training Bachelor’s degree in mathematics, Lund University. PhD, Stockholm School of Economics. Honorary doctorate in entrepreneurship, Lund University of Technology . Master’s degree in business administra - tion, Stockholm School of Economics. MSc from the Institute of Technology at Linköping University. Master’s degree in business administration, Lund University BPSE, IMD. Experience Board work, senior positions at companies including Nokia, Ericsson, Posten and Industrifonden. Founder of and advisor to Axis Communications AB. Investment Advisory Professional at Triton Advisers (Sweden) AB and share analyst at Goldman Sachs International. Board work, internation - al experience of the IT/ telecoms industry, Chief Executive Officer of Netwise, business area manager at an Ericsson multimedia unit, founder of Syster P. Board work at Tetra Laval Real Estate AB, various previous positions at Alfa Laval Group. Other directorships Chair of the Board: Net Insight AB Board member: Länsförsäkringar Liv Försäkringsaktiebolag, BTS Group AB, HAKI Safety, Dedicare AB and Webstep ASA. Chairman of the Board: Axis Communications AB. Board member: Askero Sagoboks Förlag AB, AB Grenspecialisten, Lumen Radio and H. Lundén Holding AB. No other director - ships. Chair of the Board: Formpipe Software AB. Board member: Syster P AB, Axiell Group AB, and Addtech AB. Chairman of the Board: Terratech Group AB and Tetra Laval Real Estate. Member of the Board: JM AB and Skiold Group A/S. Member of the Advisory Board: Solix Group AB. Independence in respect of Proact, Proact’s executive and major owners Yes No Yes Yes Yes Number of shares 10,100 3,400,000 7,000 4,000 2,500 Present, from left: Martin Gren, Anna Söderblom, Erik Malmberg, Annikki Schaeferdiek. Absent: Thomas Thuresson Board of Directors
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Proact Annual and Sustainability Report 2024 46 About us and the year in brief Our business Additional informationSustainability Financial statements Directors’ report Magnus Lönn CEO & President, Acting Business Unit Director, Nordic & Baltics Date of birth 1974 Employed since 2022 Number of shares 7,000 Jonas Ekman VP Corporate Development Date of birth 1975 Employed since 2019 Number of shares 12,218 Alexander Lechthaler Business Unit Director, West Date of birth 1982 Employed since 2011 Number of shares 4,000 Jamie Ford Business Unit Director, UK Date of birth 1976 Employed since 2024 Number of shares 500 Madeleine Samuelson VP People & Sustainability Date of birth 1972 Employed since 2022 Number of shares 5,350 Nora Jayasekara CFO & VP Investor Relations Date of birth 1978 Employed since 2024 Number of shares 0 Maria Gomez Business Unit Director, Central Date of birth 1970 Employed since 2024 Number of shares 3,500 Per Sedihn VP Technology & Services Date of birth 1964 Employed since 1994 Number of shares 500 Group Management
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Content 48 Group financial statements 49 Parent company financial statements 53 Notes 57 Certification 79 Audit report 80 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Proact Annual and Sustainability Report 2024 47 Financial statements
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Proact Annual and Sustainability Report 2024 48 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Notes Page Note 1 Accounting policies 57 Note 2 Reporting for segments 58 Note 3 Revenue by sector 59 Note 4 Intra-Group purc hases and sales 61 Note 5 Depreciation and impairment of fixed assets 61 Note 6 Research and development costs 61 Note 7 Operating expenses 61 Note 8 Information about audit fees 61 Note 9 Average number of employees, salaries, other remuneration and social costs, etc. 61 Note 10 Financial income 63 Note 11 Financial expenses 63 Note 12 Income tax 64 Note 13 Non-recurring items 66 Note 14 Foreign currencies 66 Note 15 Intangible fixed assets 67 Note 16 Tangible fixed assets 69 Statements Page Consolidated statement of comprehensive income 49 Consolidated Balance Sheet 50 Consolidated statement of changes in equity 51 Consolidated statement of cash flows 52 Income statement, parent company 53 Statement of comprehensive income, parent company 53 Balance sheet, parent company 54 Statement of changes in equity , parent company 55 Statement of cash flows, parent company 56 Notes Page Note 17 Shares in Group companies 70 Note 18 Receivables and liabilities with Group companies and Other non-current receivables 71 Note 19 Inventories 71 Note 20 Accounts receivable 71 Note 21 Prepaid expenses and accrued income 71 Note 22 Other liabilities 72 Note 23 Accrued expenses and prepaid income 72 Note 24 Financial assets and liabilities 72 Note 25 Pledged assets, contingent liabilities and commitments 75 Note 26 Supplementary disclosures to the statement of cash flows 76 Note 27 Leases 77 Note 28 Related party disclosures 77 Note 29 Events after the balance sheet date 77 Note 30 Equity 78 Note 31 Earnings per share 78 Note 32 Acquisitions 78 Content
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Proact Annual and Sustainability Report 2024 49 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Amounts in SEK thousand Note 2024 2023 1 System revenue 2,685,703 2,698,001 Service revenue 2,170,849 2,144,644 of which support revenue 625,419 595,165 of which revenue from cloud services 1,130,034 1,097,359 of which consulting revenue 415,396 452,120 Other revenue 7,684 4,670 Total revenue 2, 3 4,864,236 4,847,315 Cost of goods and services sold 5, 6, 7, 9, 13, 14, 19 -3,655,733 -3,758,117 Gross profit 5, 28 1,208,503 1,089,198 Sales and marketing expenses 9, 13 -525,348 -504,456 Administrative expenses 5, 6, 8, 9, 13 -387,619 -354,988 Operating profit 7, 8, 13, 14, 27 295,536 229,754 Financial income 10 17,599 28,518 Financial expenses 11 -35,180 -40,000 Earnings before tax 14 277,955 218,272 Income tax 12 -58,079 -45,179 Profit/loss for the year 219,876 173,093 Amounts in SEK thousand Note 2024 2023 Other comprehensive income Items that can be transferred to profit/loss for the year Hedging of net investment in foreign subsidiaries 16,953 262 Tax effect of hedging of net investment in foreign subsidiaries -3,492 -54 Translation differences 22,385 -4,864 Total items that can be transferred to profit/loss for the year, after tax 35,846 -4,656 Total comprehensive income for the year 255,722 168,437 Profit/loss for the year attributable to: Parent Company’s shareholders 219,876 172,647 Non-controlling interests 17 - 446 219,876 173,093 Total comprehensive income for the year attributable to: Parent Company’s shareholders 255,722 168,728 Non-controlling interests - -291 255,722 168,437 Earnings per share Earnings per share for profit/loss attributable to parent company shareholders, before dilution, SEK 1) 31 8.15 6.29 parent company shareholders, after dilution, SEK 1) 31 8.15 6.29 Weighted average number of outstanding shares 26,987,862 27,466,985 1) T he company has a long-term performance share scheme which may involve maximum dilution of 2.36 per cent. Consolidated statement of comprehensive income
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Proact Annual and Sustainability Report 2024 50 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Amounts in SEK thousand Note 31 Dec 2024 31 Dec 2023 1 ASSETS FIXED ASSETS Goodwill 5, 15 1,021,733 983,571 Other intangible assets 5, 15 129,596 177,310 Tangible fixed assets 5, 16 65,776 74,098 Right-of-use assets 27 253,393 245,219 Other non-current receivables 18, 21, 27 614,916 544,605 Deferred tax receivables 12 22,177 22,453 TOTAL FIXED ASSETS 2,107,591 2,047,256 CURRENT ASSETS Inventories 19 20,844 15,442 Accounts receivable 14, 20 756,380 717,665 Current tax receivables 12,755 6,612 Other receivables 55,494 52,260 Prepaid expenses and accrued income 21 709,074 657,316 Cash and cash equivalents 26 813,518 547,897 TOTAL CURRENT ASSETS 2,368,065 1,997,192 TOTAL ASSETS 4,475,656 4,044,448 Amounts in SEK thousand Note 31 Dec 2024 31 Dec 2023 EQUITY AND LIABILITIES EQUITY 30 Equity attributable to the parent company’s shareholders Share capital 10,619 10,619 Other capital contributions 297,964 297,964 Other reserves 103,444 67,598 Retained earnings including profit/loss for the year 760,401 632,423 Equity attributable to the parent company’s shareholders 17 1,172,428 1,008,604 TOTAL EQUITY 1,172,428 1,008,604 LIABILITIES Non-current liabilities Loan liabilities 24 229,730 221,920 Lease liabilities 152,612 146,092 Other non-current liabilities 23, 24, 27 957,101 775,298 Deferred tax liabilities 12 47,536 58,186 Non-current liabilities, total 1,386,979 1,201,496 Current liabilities Accounts payable 14 561,880 529,970 Current tax liabilities 24,558 25,035 Loan liabilities 24 - - Lease liabilities 101,123 100,258 Other liabilities 22, 24 152,196 166,028 Accrued expenses and prepaid income 23 1,076,492 1,013,057 Current liabilities, total 1,916,249 1,834,348 TOTAL LIABILITIES 3,303,228 3,035,844 TOTAL EQUITY AND LIABILITIES 4,475,656 4,044,448 Consolidated balance sheet
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Proact Annual and Sustainability Report 2024 51 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Consolidated statement of changes in equity Amounts in SEK thousand, Note 30 Attributable to the parent company’s shareholders Attributable to non- controlling interests Total share- holders’ equity Share capital Other capital contributions Hedging of net investment in foreign subsidiaries Translation of foreign subsidiaries Retained earnings, inc. profit/ loss for the year Total Opening balance as at 1 January 2023 10,619 297,964 23,755 48,208 538,987 919,533 3,888 923,421 Profit/loss for the year - - - - 172,647 172,647 446 173,093 Other comprehensive income - - 208 -4,127 - -3,919 -737 -4,656 Total comprehensive income for the year - - 208 -4,127 172,647 168,728 -291 168,437 Transactions with shareholders Dividends - - - - -50,791 -50,791 - -50,791 Buy-back of own shares - - - - - 19,588 -19,588 - -19,588 Acquisitions from non-controlling interests - - - -446 -8,427 -8,873 -2,680 -11,553 Sales of non-controlling interests - - - - - - -917 -917 Long-term incentive programme - - - - -3,087 -3,087 - -3,087 Sold previously repurchased shares - - - - 2,682 2,682 - 2,682 Total transactions with shareholders - - - -446 -79,211 -79,657 -3,597 -83,254 Closing balance as at 31 December 2023 10,619 297,964 23,963 43,635 632,423 1,008,604 - 1,008,604 Consolidated statement of changes in equity Amounts in SEK thousand, Note 30 Attributable to the parent company’s shareholders Attributable to non- controlling interests Total share- holders’ equity Share capital Other capital contributions Hedging of net investment in foreign subsidiaries Translation of foreign subsidiaries Retained earnings, inc. profit/ loss for the year Total Opening balance as at 1 January 2024 10,619 297,964 23,963 43,635 632,423 1,008,604 - 1,008,604 Profit/loss for the year - - - - 219,876 219,876 - 219,876 Other comprehensive income - - 13,461 22,385 - 35,846 - 35,846 Total comprehensive income for the year - - 13,461 22,385 219,876 255,722 - 255,722 Transactions with shareholders Dividends - - - - -53,984 -53,984 - -53,984 Buy-back of own shares - - - - -42,801 -42,801 - -42,801 Acquisitions from non-controlling interests - - - - - - - - Sales of non-controlling interests - - - - - - - - Long-term incentive programme - - - - 3,925 3,925 - 3,925 Sold previously repurchased shares - - - - 962 962 - 962 Total transactions with shareholders - - - - -91,898 -91,898 - -91,898 Closing balance as at 31 December 2024 10,619 297,964 37,424 66,020 760,401 1,172,428 - 1,172,428
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Proact Annual and Sustainability Report 2024 52 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Amounts in SEK thousand Note 2024 2023 26 CASH FLOW FROM OPERATIONS FOR THE YEAR Operating profit for the year 295,536 229,754 Adjustment for items not affecting cash flow: Reversal of depreciation and impairment of fixed assets 5, 15, 16 214,083 228,211 Financial lease sales 27 26,179 32,954 Reversal of unrealised items - - Reversal of other non-cash items 2,598 -9,049 Changes in provisions 777 -174 Income tax paid1) 12 -58,804 -54,651 Cash flow from operating activities before changes in working capital 480,369 427,045 Cash flow from changes in working capital Inventories -4,956 49,504 Operating receivables -133,812 64,554 Operating liabilities 182,472 -9,060 Cash flow from current operations 524,073 532,043 Amounts in SEK thousand Note 2024 2023 INVESTMENT ACTIVITIES Acquisition of businesses 17 - -7,951 Divestment of businesses 26 - -12 Capital expenditure on tangible fixed assets 16 -30,049 -44,347 Disposals of tangible fixed assets 16 - 1,064 Investments in intangible fixed assets 15 -1,177 -968 Decrease, non-current receivables 18 4,713 333 Increase, non-current receivables 18 - -45 Cash flow from investment activities -26,513 -51,926 FINANCING ACTIVITIES Dividends -53,984 -50,791 Buy-back of own shares -42,801 -19,588 Borrowing - 112,018 Repaid loans - -336,176 Interest earned 13,237 10,366 Interest paid -26,466 -25,133 Amortisation of lease liabilities -135,510 -117,971 Other cash flow from financing activities -1,627 -2,784 Cash flow from financing activities -247,151 -430,059 CASH FLOW FOR THE YEAR 250,409 50,058 Cash and cash equivalents at start of year 547,897 505,684 Translation difference in cash and cash equivalents 15,212 -7,845 CASH AND CASH EQUIVALENTS AT YEAR-END 813,518 547,897 1) Income tax SEK 58,079 thousand (45,179). Net non-cash adjustment and paid tax SEK -722 thousand (-9,472). Consolidated statement of cash flows
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Proact Annual and Sustainability Report 2024 53 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Amounts in SEK thousand Note 2024 2023 Revenue 4, 14 152,494 152,021 Gross profit 4 152,494 152,021 Administrative expenses 5, 9 -161,436 -151,896 Operating profit 9 -8,942 125 Financial income 10 313,086 187,550 Financial expenses 11 -31,532 -45,396 Earnings before tax and appropriations 14 272,612 142,279 Group contribution - - Earnings before tax 14 272,612 142,279 Income tax 12 -2,800 -742 Profit/loss for the year 269,812 141,537 Amounts in SEK thousand 2024 2023 Profit/loss for the year 269,812 141,537 Other comprehensive income - - Total comprehensive income for the year 269,812 141,537 Income statement, parent company Statement of comprehensive income, parent company
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Proact Annual and Sustainability Report 2024 54 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Amounts in SEK thousand Note 31 Dec 2024 31 Dec 2023 ASSETS FIXED ASSETS Intangible fixed assets 5, 15 3,063 8,216 Tangible fixed assets 5, 16 311 294 Shares in Group companies 17 494,687 492,383 Current receivables from Group companies 629,884 640,109 Other non-current receivables 513 1,448 Deferred tax receivables 12 1,871 1,394 TOTAL FIXED ASSETS 1,130,329 1,143,844 CURRENT ASSETS Current tax receivables - - Current receivables from Group companies 18 274,705 81,020 Other receivables 7,995 1,696 Prepaid expenses and accrued income 21 23,007 15,031 Cash and cash equivalents 26 - - TOTAL CURRENT ASSETS 305,707 97,747 TOTAL ASSETS 1,436,036 1,241,591 Amounts in SEK thousand Note 31 Dec 2024 31 Dec 2023 EQUITY AND LIABILITIES EQUITY 30 Restricted equity Share capital 10,619 10,619 Statutory reserve 28,236 28,236 Capitalised development costs 3,062 8,216 Total restricted equity 41,917 47,071 Non-restricted equity Retained earnings 364,237 309,444 Profit/loss for the year 269,812 141,537 Total non-restricted equity 634,049 450,981 TOTAL EQUITY 675,966 498,052 LIABILITIES Non-current liabilities Liabilities to credit institutions 24 229,730 221,920 Liabilities to Group companies 18 13,847 12,768 Non-current liabilities, total 243,577 234,688 Current liabilities Accounts payable 3,173 4,957 Current tax liabilities - 3,958 Liabilities to Group companies 18, 26 487,693 478,401 Other liabilities 22, 24 8,151 8,181 Accrued expenses and prepaid income 23 17,476 13,354 Current liabilities, total 516,493 508,851 TOTAL LIABILITIES 760,070 743,539 TOTAL EQUITY AND LIABILITIES 1,436,036 1,241,591 Balance sheet, parent company
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Proact Annual and Sustainability Report 2024 55 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Amounts in SEK thousand, Note 30 Number of shares Share capital Statutory reserve Capitalised development costs Retained earnings Profit/loss for the year Total share - holders’ equity Transfer of previous year’s profit - - - - 68,754 -68,754 - Dividends - - - - -50,791 - -50,791 Long-term incentive programme - - - - -3,087 - -3,087 Sold previously repurchased shares - - - - 2,682 - 2,682 Reversal of capitalised development costs - - - -34,673 34,673 - - Buy-back of own shares - - - - -19,588 - -19,588 Profit/loss for the year - - - - - 141,537 141,537 Closing balance as at 31 December 2023 28,001,658 10,619 28,236 8,216 309,444 141,537 498,052 Transfer of previous year’s profit - - - - 141,537 -141,537 - Dividends - - - - -53,984 - -53,984 Long-term incentive programme - - - - 3,925 - 3,925 Sold previously repurchased shares - - - - 962 - 962 Reversal of capitalised development costs - - - -5,154 5,154 - - Buy-back of own shares - - - - -42,801 - -42,801 Cancellation of own shares -600,000 - - - - - - Profit/loss for the year - - - - - 269,812 269,812 Closing balance as at 31 December 2024 27,401,658 10,619 28,236 3,062 364,237 269,812 675,966 Statement of changes in equity, parent company
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Proact Annual and Sustainability Report 2024 56 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Amounts in SEK thousand Note 2024 2023 26 CASH FLOW FROM OPERATIONS FOR THE YEAR Profit/loss for the year 269,812 141,537 Adjustment for items not affecting cash flow: Depreciation and impairment of fixed assets 5, 15, 16 6,469 6,645 Impairment of shares in subsidiaries 17 - - Other financial items 7,927 4,901 Other adjustments 1,513 6,513 Income tax 1) 12 -4,326 -1,594 Cash flow from operating activities before changes in working capital 281,395 158,002 Cash flow from changes in working capital: Operating receivables -207,142 9,878 Operating liabilities 11,600 75,801 Cash flow from current operations 85,853 243,681 INVESTMENT ACTIVITIES Capital expenditure on tangible assets 16 -229 -217 Disposals of tangible assets 16 - - Investments in intangible assets 15 -1,105 -839 Changes in non-current receivables 18 10,225 49,043 Cash flow from investment activities 8,891 47,987 FINANCING ACTIVITIES Dividends -53,984 -50,791 Buy-back of own shares -42,801 -19,588 Borrowing - 112,018 Repaid loans - -336,176 Other cash flow from financing activities 2,041 2,869 Cash flow from financing activities -94,744 -291,668 CASH FLOW FOR THE YEAR - - Cash and cash equivalents at start of year - - CASH AND CASH EQUIVALENTS AT YEAR-END - - 1) Income tax SEK 3,277 thousand (742), tax paid SEK 7,603 thousand (2,336). Net non-cash adjustment and paid tax SEK -4,326 thousand (-1,594). Statement of cash flows, parent company
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Proact Annual and Sustainability Report 2024 57 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 1 Accounting policies As regards goodwill and intellectual property rights, the impairment test is based on future assump- tions derived from conditions that are known at the time of the assessment. When calculating the value in use of assets, assumptions are made about future performance. Future earnings may not deviate from the assumptions made if conditions in the market change without the company’s management adapting the organisation and business in accordance with the changed market conditions. In such a case, there is a risk that the future earnings trend will be less favourable and thus there is a risk of material adjustments to the amounts recognised. More information on impairment testing can be found in Note 15. Tax losses are capitalised insofar as they are deemed to be potentially usable against future tax profits on the basis of assumptions on future profit development. See Note 12 for further information. Changes in accounting policies and information The Group applies the same accounting policies as those described in the annual report for 2023. No new standards have been adopted by the EU and no amended or revised standards, interpreta- tions and improvements that are to be applied as of 1 January 2024 have resulted in any changes for the Group. 2025 and beyond IASB has not published any new standards approved by the EU for application as of 1 January 2025. IFRS 18 Presentation and Disclosure in Financial Statements is applicable for annual periods beginning on or after 1 January 2027 and has not yet been adopted by the EU. IFRS 18 will replace IAS 1 Presentation of Financial Statements, and introduce new requirements aimed at achieving greater comparability in the reporting of performance of similar entities and providing users with more relevant information and transparency . IFRS 18 introduces, among other things, new requirements for the structure of the income statement and disclosures about certain performance measures. Although IFRS 18 will not affect the recognition or measurement of items in the financial statements, its effects on presentation and disclosures are expected to be significant, particularly those related to the income statement and performance measures defined by management. Management is currently evaluating the precise consequences of applying the new standard to the consolidated financial statements. Proact’s policies for consolidated accounts Scope of the Group The Group includes Proact IT Group AB and all companies over which the parent company has a con- trolling influence. The Group checks a company when it is entitled to a variable return from its holding in the company and has the opportunity to influence this return through its influence within the compa- ny , which normally means that the parent company owns more than 50 per cent of votes for all shares and participations. Subsidiaries are included in the consolidated financial statements from the day on which controlling influence passes to the Group. They are excluded from the consolidated financial statements from the day on which the controlling influence ceases. Internal Group transactions, balance sheet items, revenue and expenses on transactions between Group companies are eliminated. Profit or loss arising from intra-group transactions and that are recognised as assets are also eliminated. The accounting policies for subsidiaries have been amended where necessary in order to guarantee consistent application of the Group’s policies. The purchase method The purchase method is used to report on the Group’s business combinations. The purchase price for the acquisition of a subsidiary is made up of the fair value of transferred assets, liabilities and the shares issued by the Group. The purchase price also includes the fair value of all assets or liabilities which are a consequence of a contract on a contingent purchase price. Acquisition-related expenses are reported in the income statement when they arise. Identifiable acquired assets and transferred liabilities in a business combination are initially valued at fair value on the acquisition date. For every acquisition, the Group decides whether all non-controlling interests in the acquired company are rec- ognised at fair value or at the proportional percentage of the net assets of the acquired company . The amount by which the purchase price, any holding without a controlling influence and the fair value on the acquisition date of earlier shareholdings exceeds the fair value of the Group’s share of identifiable acquired net assets is recognised as goodwill. If this amount falls below the fair value for the assets of the acquired subsidiary , in the event of what is known as a “bargain purchase”, the difference is recognised directly in the statement of comprehensive income. Translation of foreign subsidiaries The consolidated financial statements are presented in Swedish kronor (SEK), which is the parent company’s functional currency . All amounts are shown in SEK thousands unless otherwise stated. Rounding differences may occur and thus the sum of individual figures may differ from that presented. Unless otherwise stated, comparative figures in this report are presented in parentheses and refer to the corresponding period in the previous year . Income statement and balance sheet items, including goodwill, of companies with functional curren- cies other than SEK are translated into SEK. As a result, assets and liabilities are translated at the rate on the balance sheet date and the income statement items at the average rate over the period. Transla- tion differences are presented as a separate item under Other comprehensive income in the statement of comprehensive income. When investments are divested, the previous translation differences are recognised in the statement of comprehensive income as part of capital gains. Transactions and balance sheet items in a currency other than the functional currency are translated in each operation to the functional currency using the average exchange rate for transactions for the period and the exchange rate as at the balance sheet date for balance sheet items. Non-controlling interests Non-controlling interests comprise the part of subsidiary results and net assets which are not directly or indirectly owned by the parent company . The Group handles transactions with non-controlling interests as transactions with the Group’s shareholders. In the case of acquisitions from non-controlling interests, the difference between the purchase price paid and the current acquired share of the book value of the subsidiary’s net assets is recognised against equity . Profits and losses on disposals to non-controlling interests are also recognised against equity . In 2010, Proact signed a contract concerning the purchase of 60 per cent of Storyflex Inc. The business is being run under the name Proact Czech Republic, s.r .o.The parties have entered into a contract which meant that Proact had the opportunity/an obligation to acquire the remaining share within three to seven years of the time of acquisition. A further 20 per cent was acquired in 2013, along with a further 6 per cent in 2014. This agreement concerning the opportunity/obligation to acquire the remaining percentage expired in 2018. No agreement concerning buyout has been concluded, which is why the estimated value of the selling options assigned to owners without a controlling influence that were previously recognised as a financial liability in the consolidated balance sheet has been converted into a share of equity that is attributable to owners without a controlling influence. In 2023, the last 14.7 per cent of Proact Czech Republic, s.r .o. were acquired which means that Proact IT Group now owns 100 per cent of the company . On 28 August 2023, the subsidiary in Lithuania was divested. Including these two transactions, Proact IT Group AB no longer has a holding without controlling influence. Corporate information Proact IT Group AB (publ) Frösundaviks Allé 1 SE-169 04 Solna, Sweden Headquarters: Solna, Sweden Company registration number: 556494-3446 The consolidated accounts and annual report relating to the 2024 financial year for Proact IT Group AB have been prepared by the Board of Directors and Chief Executive Officer , who on 31 March 2025 have approved this annual report and these consolidated accounts for publication. The annual report and consolidated accounts will be submitted to the Annual General Meeting on 6 May 2025 for approval and adoption. The parent company is a Swedish limited company (publ) listed on NASDAQ Stockholm and based in Solna, Sweden. The primary operations of the Group involve offering special- ist skills in the field of storage and archiving of large volumes of business-critical information. Subsidiary information The following subsidiaries, as companies, are part of the consolidated statements and therefore exempt from the obligation to prepare notes and, where applicable, a directors’ report in accordance with the provisions for companies and to apply the publication provisions under Article 264 (3) of the German Commercial Code (Handelsgesetzbuch, HGB). Proact IT Germany GmbH, HRB 132327, Hamburg. Proact Deutschland GmbH, HRB 18320, Nuremberg. Proact IT Germany GmbH owns 100 per cent of the shares in Proact Deutschland GmbH. AP General accounting policies The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB), and interpretation pronouncements from the International Financial Reporting Interpretations Committee (IFRIC) as assumed by the EU. In addition, the Swedish Financial Reporting Board’s recommendation RFR 1 (Supplementary accounting rules for groups) has been applied. The annual financial statements for Proact IT Group AB have been compiled in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2 (Account- ing for Legal Entities). Differences between the parent company’s and the Group’s applied accounting policies stem from the limited opportunities for applying IFRS to the parent company as a conse- quence of the Annual Accounts Act, and in some cases because of applicable tax regulations. Significant differences between the Group’s and parent company’s accounting policies The parent company is compliant with the same accounting policies as the Group, with the following exceptions. Shares in subsidiaries are reported in the parent company in accordance with the cost method. There may also be Group contributions within the parent company which are reported as ap- propriations at the parent company . As of the 2016 financial year , the parent company is setting aside capitalised development costs relating to software to the Fund for development costs within restricted equity . This fund is being reduced with depreciation on these capitalised development costs. The parent company reports all leases as operating leases. Uncertain assessments and estimates The balance sheet includes uncertainty in assessment and estimates, primarily in the items goodwill and deferred tax receivables attributable to loss carryforwards. Notes to the accounts
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Proact Annual and Sustainability Report 2024 58 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 2 Reporting by segment The information below is presented from a management perspective, which means that it is presented in the manner applied in internal reporting. Reportable segments are identified on the basis of internal reporting to the highest executive decision-maker . The Group has identified the Chief Executive Officer as its highest executive decision-maker . The company manages and reports on results by operating segment, known as Business Units (BUs). Transactions between units take place under market conditions. Total assets/liabilities per segment are not reported to the highest executive decision maker . The same range of products and services is offered within each BU, with the exception of Proact Finance. The business units are as follows: Nordic & Baltics: Denmark, Estonia, Finland, Latvia, Lithuania (divested on 28 August 2023), Norway , Sweden and the US UK: United Kingdom West: Belgium and the Netherlands Central: Czech Republic and Germany Financial year 2024 Nordic & Baltics UK West Central Groupwide Eliminations Group External revenue 2,454,226 701,909 822,915 862,608 22,578 - 4,864,236 Internal revenue 75,129 5,781 25,391 25,330 152,494 -284,125 - Total revenue 2,529,355 707,690 848,306 887,938 175,072 -284,125 4,864,236 Earnings before tax and non-recurring items 270,803 18,138 18,432 -22,873 -6,545 - 277,955 Non-recurring items1) - - - - - - - Earnings before tax 270,803 18,138 18,432 -22,873 -6,545 - 277,955 Tax -58,079 Profit/loss for the year 219,876 1) T his item is not presented in accordance with IFRS, but as it is included in internal reporting the company has opted to include it in the presentation above, see also Note 13. Financial year 2023 Nordic & Baltics UK West Central Groupwide Eliminations Group External revenue 2,559,222 652,229 794,805 809,031 32,028 - 4,847,315 Internal revenue 60,036 9,489 28,379 24,123 151,988 -274,015 - Total revenue 2,619,258 661,718 823,184 833,154 184,016 -274,015 4,847,315 Earnings before tax and non-recurring items 211,606 13,204 4,670 -3,100 8,554 - 234,934 Non-recurring items 1) -4,760 -963 -6,450 -2,031 -2,458 - -16,662 Earnings before tax 206,846 12,241 -1,780 -5,131 6,069 - 218,272 Tax -45,179 Profit/loss for the year 173,093 1) T his item is not presented in accordance with IFRS but as it is part of the internal reporting, the company has chosen to show it in the above table, see also note 13. Geographical information 2024 2023 External revenue 1) 2) Sweden 1,638,121 1,661,086 United Kingdom 701,909 652,229 The Netherlands 729,776 710,602 Germany 793,050 769,121 Other countries 1,001,380 1,054,277 Total 4,864,236 4,847,315 1) R evenue is attributable to the geography in question, based on the country in which the company is located. There is no other information, e.g. on whether the company has sales to customers in other countries. 2) T he section “Risks and risk management” include information stating that an individual customer is responsible for most of the net sales. Intangible and tangible fixed assets and right-of-use assets 31 Dec 2024 31 Dec 2023 Sweden 251,615 250,870 United Kingdom 343,446 322,530 The Netherlands 266,475 274,470 Germany 528,813 548,290 Other countries 80,149 84,038 Total 1,470,498 1,480,198
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Proact Annual and Sustainability Report 2024 59 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 3 Revenue by sector Cloud services Revenue from cloud services has been divided into five different performance commitments: Ser- vice Management, Premium Support Plus, Customer Support, Private Cloud and Shared Cloud. Revenue from cloud service activities is recognised when the performance commitments are fulfilled, which normally takes place on a straight-line basis over the term of the contract. If the cloud services are sold together with installation, any revenue for installation and costs for installa- tion are reported on a straight-line basis over the term of the contract. Proact charges cloud services on the basis of two different measurement methods: a fixed basic charge and a fixed price per unit for any usage in excess of an agreed volume included in the fixed basic charge. T he various services (performance commitments) included in a cloud service offering can be recognised as a single performance commitment if the services mean that all performance commitments are fulfilled over the same period. In these cases, the revenue is recognised for the charge per unit that is charged to the customer on a monthly basis. If any performance commitment – such as customer support – is performed over any period of time, part of the income per unit must be allocated to that service and recognised when this performance commitment is fulfilled. Volume discounts Proact has contracts with customers for the storage of data where the pricing model means that the customer pays a certain price per GB stored. The contract includes volume discounts where the price per GB is reduced for every additional GB stored if the customer exceeds certain levels during the specific measurement period (month/quarter). With these contracts, the customer is charged monthly for a minimum capacity (GB). Revenue and usage measured on a monthly basis With use of storage space (GB) measured on a monthly basis, the amount of revenue to which Proact is entitled for the period is determined at the end of the month. The revenue is recognised on the basis of the amount invoiced during the month. Revenue and usage measured on a quarterly basis Proact has to calculate performance-related pay for volume discounts (price per GB) where usage is measured per quarter . Proact has to estimate how many GB the customer will use during the period, and hence how much expected remuneration is to be recognised. Rental income - Leasing operations Lease operations is generated on an ongoing basis, and rental revenue is recognised on a straight-line basis over the rental period. Sale of lease income amounts to SEK 22,578 thousand (31,987). These are included in the Group-wide segment report. Composite customer contracts Sales in the form of what are known as composite customer contracts, which may include hardware, software and service in a single contract, are common in the Group’s business. If the contract includes various services and/or products and services (a composite customer contract), it is necessary to cal- culate distribution of the transaction price between each service and product (performance commit- ment) promised in the contract on the basis of the independent selling price of the products and ser- vices. More information on the various performance commitments that can be included in a composite contract is provided above, and when revenue is recognised for each performance commitment. Costs for obtaining customer contracts Costs for obtaining customer contracts are capitalised in accordance with IFRS 15. In Proact’s case, this relates to sales commissions only . The costs are then charged to expenses over the period that Proact believes the customer will remain with Proact. For 2024, expensed sales commissions for ob- taining customer contracts amounted to SEK 20,715 thousand (17,395). The balance sheet, under Pre- paid expenses, bookings related to customer contracts amounted to 31,597 thousand SEK (30,039). Group Revenue by operating segment 2024 2023 System sales 2,685,703 2,698,001 Service operations 2,170,849 2,144,644 of which support revenue 625,419 595,165 of which revenue from cloud services 1,130,034 1,097,359 of which consulting revenue 415,396 452,120 Other revenue 7,684 4,670 Total 4,864,236 4,847,315 Group Revenue by operating segment 2024 2023 Nordic & Baltics 2,529,355 2,619,258 UK 707,690 661,723 West 848,306 823,186 Central 887,938 833,155 Groupwide 175,072 184,008 Eliminations -284,125 -274,015 Total 4,864,236 4,847,315 Group Revenue by sector 2024 2023 Public sector 1,637,295 1,570,339 Retail and wholesale trade and services 858,337 987,683 Manufacturing industry 370,972 356,087 Telecoms 532,171 531,980 Banking, finance 339,401 293,677 Energy 364,447 266,049 Media 73,367 128,307 Additional information 688,246 713,193 Total 4,864,236 4,847,315 AP Accounting policies Revenue recognition Proact has applied IFRS 15 “Revenue from Contracts with Customers” since 1 January 2018. The basic principle for revenue reporting is that Proact should report revenues on the basis of the fact that everything commences from a contract concerning the sale of a product or service between two parties. Thus the first action is to identify a customer contract, which generates an asset (rights, i.e. a promise of obtaining remuneration) and a liability (commitment, i.e. a promise to transfer goods/services) for the vendor . The commitments (performance commitments) in the contract are identified and the transaction price is distributed over various commitments, if there is more than one. Revenue is recognised when the commitment to supply promised goods or services to the customer is fulfilled. Revenue streams The Group mainly generates revenue through: • System sales – sale and installation of hardware and software • Maintenance and support services •Independent IT consultancy services •Cloud services System sales Every item of hardware and software is a separate performance undertaking. Revenue from the sale of hardware and software is recognised when Proact has transferred all material risks and benefits associated with ownership of the product, i.e. when the customer takes control of hardware and/or software. In most cases this is at the time of transferring legal ownership and when the goods are physically handed over to the purchaser . The sale has not been completed in cases where material risks associated with the ownership of the goods remain. The revenue is recognised only when the sale has been completed. Invoicing takes place at the time of delivery , or in certain cases at the time of approval of the deliverable. Customer does not have the right to return hardware or software after the time of delivery or approval of the deliverable. The payment terms are normally between 30 and 90 days. Proact has no guarantee obligations to the customer . Proact acts as the principal for the sale of supplier guarantees and maintenance. Income and expenses for this are recognised gross in the income statement and on a straight-line basis over the contract period. Services Maintenance and support revenue Maintenance and support revenue stems mainly from fixed price service agreements. Mainte- nance and support are two different performance commitments, and the revenue is recognised on a straight-line basis over the contract period. IT consultancy services IT consultancy services have been divided into six different performance commitments: Analysis and Design, Implementation (Installation, Project Management, Documentation, Training) and Operation. Proact sells consultancy services with three different charging options: current account, fixed price and time banks. Revenue is reported as the work is carried out in the case of sales on a current account basis. Fixed price projects, or capped current account, are recognised as they are completed. Of the estimated total income for a project, during each period the proportion settled corre- sponds to the share of estimated total costs accumulated during the period. Time banks are billed in advance and income is recognised as consultancy hours are used.
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Proact Annual and Sustainability Report 2024 60 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Contract assets 2024 1) Group Opening balance 2024 Total system and service revenue for the year of which revenue attributable to performance commitments ful- filled and invoiced during the year Contract assets settled during the year, attributable to performance commit- ments fulfilled in previous years Remaining contract assets, attributable to performance commitments fulfilled in previous years Additional contract assets, attributable to performance commitments fulfilled during the year Closing balance 2024 Accrued system revenue 5,472 2,685,703 2,673,493 -5,472 - 12,210 12,210 Accrued service revenue 122,511 2,170,849 2,040,088 -56,432 66,079 64,682 130,761 Total contract assets 127,983 142,971 1) T here have been no provisions or write-downs relating to contract assets in 2024. Contract assets 2023 1) Group Opening balance 2023 Total system and service revenue for the year of which revenue attributable to performance commitments ful- filled and invoiced during the year Contract assets settled during the year, attributable to performance commit- ments fulfilled in previous years Remaining contract assets, attributable to performance commitments fulfilled in previous years Additional contract assets, attributable to performance commitments fulfilled during the year Closing balance 2023 Accrued system revenue 6,799 2,698,001 2,692,529 -6,799 - 5,472 5,472 Accrued service revenue 114,122 2,144,644 2,022,133 -37,797 76,325 46,186 122,511 Total contract assets 120,921 127,983 1) T here have been no provisions or write-downs relating to contract assets in 2023. Contract liabilities 2024 Group Opening balance 2024 Total system and service revenue for the year of which taken up as revenue, attributable to contracts entered in previous years of which taken up as revenue, attributable to contracts entered into during the year Deferred income, attributable to con- tracts entered into in previous years Deferred income, attributable to con- tracts entered into during the year Closing balance 2024 Deferred system revenue 701,542 2,685,703 352,198 2,333,505 360,652 408,009 768,661 Deferred service revenue 863,901 2,170,849 456,613 1,714,236 395,980 604,838 1,000,818 Total contract liabilities 1,565,443 1,769,479 Contract liabilities 2023 Group Opening balance 2023 Total system and service revenue for the year of which taken up as revenue, attributable to contracts entered in previous years of which taken up as revenue, attributable to contracts entered into during the year Deferred income, attributable to con- tracts entered into in previous years Deferred income, attributable to con- tracts entered into during the year Closing balance 2023 Deferred system revenue 605,531 2,698,001 334,547 2,363,454 360,640 340,902 701,542 Deferred service revenue 755,753 2,144,644 364,460 1,780,184 370,905 492,996 863,901 Total contract liabilities 1,361,284 1,565,443 Long-term contracts, with unfulfilled or partially unfulfilled performance obligations, are expected to generate revenue: within 1 year within 1-2 years 3 years and later Total contracted revenue for out- standing or partially outstanding performance obligations Expected system revenue 378,248 202,796 219,982 801,026 Expected service revenue 725,888 323,297 338,451 1,387,636 Total 1,104,136 526,093 558,433 2,188,662 Note 3 Revenue by sector , continued
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Proact Annual and Sustainability Report 2024 61 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 4 Intra-Group purchases and sales Of the parent company’s total purchasing expenses and sales revenue, SEK 63,290 thousand (58,770), 41 per cent (41), refers to purchasing and SEK 152,494 thousand (151,988), 100 per cent (100), refers to sales to other Group companies. Note 5 Depreciation, amortisation and write-down of fixed assets Group Parent company 2024 2023 2024 2023 Depreciation/impairment included in expenses for goods sold and services Depreciation/amortisation – Intangible assets 48,796 49,173 - - – Tangible assets 8,388 9,570 - - – Spare par ts and demonstration equipment 2,655 2,148 - - – Right-of-use assets 89,597 99,631 - - Impairment – Intangible assets - - - - Depreciation included in administrative expenses – Intangible assets 6,295 6,508 6,258 6,460 – Tangible assets 22,417 24,212 211 185 – Right-of-use assets 35,889 36,867 - - Total 214,037 228,109 6,469 6,645 Note 6 Research and development costs No research and development costs relating to services or products were specifically charged to income or capitalised during the year . Note 7 Operating expenses The difference between total revenue and recognised operating profit is explained by the following expense items: Group Operating expenses by expense type 2024 2023 Product cost 2,794,606 2,864,708 Other expenses 233,259 214,254 Personnel expenses 1,326,798 1,310,468 Depreciation, amortisation and write-down 214,037 228,131 Total operating expenses 4,568,700 4,617,561 Note 8 Information about auditor ’s remuneration Auditing assignment refer to the statutory review of the annual accounts and accounting records as well as the administration of the Board of Directors and the Chief Executive Officer . Other statutory assignments include other quality assurance services to be implemented in accord- ance with statute, the articles of association, regulations or contracts. Tax advice includes both advice and tax compliance audits. Other services are other assignments. Group Parent company Fees and remuneration 2024 2023 2024 2023 Öhrlings PricewaterhouseCoopers AB 1) Audit assignments 4,984 5,467 885 1,217 Other statutory assignments 46 23 38 - Tax advice - - - - Other services 258 109 74 50 Other auditors Audit assignments 466 687 - - Tax advice 68 158 - - Other services 75 110 - - Total 5,897 6,554 997 1,267 1) Öhr lings PricewaterhouseCoopers AB have been the elected auditors since the 2017 Annual General Meeting. Of audit assignments, SEK 2,435 thousand (1,785) relates to PwC Sweden, of other statutory as- signments, SEK 38 thousand (0) relates to PwC Sweden; of fees for tax advice, SEK 0 thousand (0) relates to PwC Sweden and of fees for other services, SEK 74 thousand (50) relates to PwC Sweden. Average number of employees, salaries, other remuneration Not 9 and social cost etc. AP Accounting policies Employee benefits Pensions In defined contribution plans the Group pays contributions to a separate legal entity . The contributions are charged to income as they arise. The Group has no legal obligations other than paying something above the ongoing contributions. The Group has no defined benefit pension plans. Severance pay The Group reports expenses for severance pay in the statement of comprehensive income when it is demonstrably obliged either to give notice to employees in accordance with a detailed formal plan without the option of recall, or to provide compensation as a result of an offer made to encourage voluntary resignation from employment. Benefits due more than 12 months after the balance sheet date are discounted to net present value. Bonus programme Where there are legal commitments the Group recognises a liability and a cost for bonuses based on a formula that allows for sales and/or gains in accordance with the company’s bonus models.
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Proact Annual and Sustainability Report 2024 62 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Average number of which women of which men Average number of employees 2024 2023 2024 2023 2024 2023 Parent company Sweden 21 20 10 9 11 11 Subsidiaries Sweden 209 201 24 20 186 182 Norway 39 40 9 8 30 32 Finland 34 34 2 3 32 32 Denmark 13 14 - - 13 14 Latvia 10 13 3 4 7 9 Lithuania - 7 - 2 - 5 Estonia 15 16 2 3 13 13 Czech Republic 14 14 4 4 10 10 The Netherlands 267 281 37 42 230 239 Belgium 19 18 2 1 17 17 Spain - - - - - - Germany 226 244 55 58 171 186 United Kingdom 245 253 53 56 191 197 USA - - - - - - Total subsidiaries 1,091 1,134 191 200 901 934 Group total 1,112 1,154 200 209 911 945 Board members and senior executives Number of which women of which men 2024 2023 2024 2023 2024 2023 Group and parent company Board members and Chief Executive Officer/President 6 6 2 2 4 4 Other senior executives 8 10 3 2 5 8 Note 9 CONTINUED Salaries and remuneration to the Board of Directors and Chief Executive Officer (of which bonuses, etc.) Salaries and remuneration to other employees Salaries and remuneration Total Social Costs (of which pension expenses) Salaries, remuneration and social costs 2024 2023 2024 2023 2024 2023 2024 2023 Parent company 9,666 8,237 23,936 23,125 33,602 31,362 17,352 16,419 (2,773) (1,244) (2,773) (1,244) (6,294) (5,851) Subsidiaries 33,627 33,993 967,613 949,335 1,001,240 983,328 245,577 238,257 (7,830) (5,509) (7,830) (5,509) (65,779) (60,594) Group total 43,293 42,230 991,549 972,460 1,034,842 1,014,690 262,929 254,676 (10,603) (6,753) (10,603) (6,753) (72,073) (66,445) Remuneration to the Board of Directors and senior executives Directors’ fees 1) Committee fees 1) Total fees 2024 2023 2024 2023 2024 2023 Chair of the Board Anna Söderlund 625 584 115 110 740 694 Board member Martin Gren 285 273 60 60 345 333 Board member Annikki Schaeferdiek 285 273 - - 285 273 Board member Thomas Thuresson 285 273 120 115 405 388 Board member Erik Malmberg 285 273 120 115 405 388 Total 1,765 1,675 415 400 2,180 2,075 1) Relates to the actual fee for the calendar year in question according to a resolution by the Annual General Meeting. Chief Executive Officer Deputy CEO 1) Other senior executives 2024 Jonas Hasselberg 2023 Jonas Hasselberg 2024 Magnus Lönn 2023 Magnus Lönn 2024 2023 Set salaries 4,566 4,411 2,496 624 13,411 21,975 Performance-related pay 748 597 940 210 1,967 1,660 Benefits 2) 905 1,071 41 9 1,173 3,687 Pension costs 1,378 1,330 395 76 1,581 1,872 Severance pay - - - - - - Total 7,596 7,410 3,872 919 18,132 29,194 1) The role of Deputy CEO was established on 1 October 2023. 2) Includes preference shares regarding the long-term incentive programme LTI 2021.
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Proact Annual and Sustainability Report 2024 63 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements All Group companies have only defined contribution pension plans. The Chief Executive Officer’s pension pre- mium is equivalent to 30 per cent of his set annual salary . The variable element of the salary is not pensiona- ble. Retirement age is 65. Pensionable remuneration for the year to the CEO amounts to SEK 4,566 thousand (4,411). There are no pension liabilities other than the paid-in pension contributions. The company must give the Chief Executive Officer nine months’ notice of termination of employment, and the Chief Executive Officer must give the company six months’ notice. If employment is terminated by the company , severance pay of nine months’ basic salary will also be payable to the Chief Executive Officer . The severance pay must be off- set against any remuneration from a new employer . The variable element of the Chief Executive Officer’s sal- ary is based on the company’s growth and profit, as well as employee-related targets. There were eight (ten) other senior executives, including the Deputy CEO, in 2024. Of the other senior executives, four people are employed by the parent company and three people are employed by subsidiaries. Proact’s pension terms in accordance with a defined-contribution pension plan are applicable to other senior executives. The variable part of the salary is pensionable in some cases and the retirement age is 65. The pensionable salary for the Deputy CEO was SEK 2,496 thousand (624) and for other senior executives it was SEK 12,992 thousand (17,574) for the year . There are no other pension liabilities besides the paid-in pension contributions. The company must give other senior executives 3-9 months’ notice of termination of employ- ment, and other senior executives must give the company 3-6 months’ notice. Should the company give notice to terminate their employment, other senior executives are entitled to severance pay of 0-12 months’ salary . The variable element of the salaries of other senior executives is based on growth, earnings and employee- related targets both locally and within the Group. During the year , Maria Gomez assumed the role of Business Unit Director Central and Jamie Ford as Business Unit Director UK. Both are members of the Group Manage- ment. Queries relating to remuneration and benefits to the Chief Executive Officer and other senior executives will be dealt with by the Board of Directors and its remuneration committee. Long-term incentive programmes The 2021 Annual General Meeting decided to introduce a long-term incentive programme in the form of a performance share programme, LTI 2021. This programme will run from 2021 until April 2024. The programme was designed for 17 senior executives and other key personnel. Participation in LTI 2021 requires participants to own a certain number of shares in Proact throughout the entire period, and they must also be employed by Proact during the entire period and at the time of allocation. The Chief Executive Officer can invest up to 900 shares (equivalent to 2,700 after the 2021 split), senior management up to 450 shares (equivalent to 1,350 after the 2021 split) and other key employees up to 340 shares (equivalent to 1,020 after the 2021 split). All participants have the same performance targets. The number of shares awarded depends on how well per- formance targets are met. Participants can be assigned a maximum of five new shares in Proact IT Group AB for every share with which they participate if the performance targets defined by the Board in respect of net revenue, earnings per share and return on capital employed for 2023 are met. The shares will be allocated after the first quarterly report for 2024 is published. The 2021 incentive programme expired in 2024. Target fulfilment for the program amounted to 45 per cent of the maximum level and resulted in an allocation of 2.26 shares per invested share. The 2022 Annual General Meeting decided to introduce a long-term incentive programme in the form of a performance share programme, LTI 2022. This programme will run from 2022 until May 2025. The programme was designed for 19 senior executives and other key personnel. Participation in LTI 2022 requires participants to own a certain number of shares in Proact throughout the entire period, and they must also be employed by Proact during the entire period and at the time of allocation. The CEO is able to invest up to 2,700 shares, members of senior management up to 1,350 shares and other key personnel up to 1,020 shares. All partici- pants have the same performance targets. The number of shares awarded depends on how well performance targets are met. Participants can be assigned a maximum of five new shares in Proact IT Group AB for every share with which they participate if the performance targets defined by the Board in respect of net revenue, earnings per share and return on capital employed for 2024 are met. The shares will be allocated after the first quarterly report for 2025 is published. The maximum number of performance shares that can be allocated to programme participants is 122,000 shares. The 2023 Annual General Meeting decided to introduce a long-term incentive programme in the form of a performance share programme, LTI 2023. The programme runs from 2023 to May 2026. The programme was aimed at about 21 senior executives and other key personnel. Participation in LTI 2023 requires participants to own a certain number of shares in Proact throughout the entire period, and they must also be employed by Proact during the entire period and at the time of allocation. The CEO is able to invest up to 4,000 shares, the corporate management team up to 2,000 shares and other key personnel up to 1,250 shares. All participants have the same performance targets. The number of shares awarded depends on how well performance Note 9 CONTINUED targets are met. For each share the participant participates with, the participant may be allotted a maximum of seven new shares in Proact IT Group AB if the performance targets set by the Board of Directors regarding net income, earnings per share and return on capital employed in 2025 are met. Allocation will take place after the first quarterly report for 2026 is published. The maximum number of performance shares that can be allocated to programme participants is 256,000 shares. The 2024 Annual General Meeting decided to introduce a long-term incentive programme in the form of a performance share programme, LTI 2024. This programme will run from 2024 until May 2027. The pro- gramme was aimed at about 20 senior executives and other key personnel. Participation in LTI 2024 requires participants to own a certain number of shares in Proact throughout the entire period, and they must also be employed by Proact during the entire period and at the time of allocation. The CEO can invest up to 4,000 shares, company management up to 2,000 shares and other key personnel up to 1,250 shares. All partici- pants have the same performance targets. The number of shares awarded depends on how well performance targets are met. For each share the participant participates with, the participant may be allotted a maximum of seven new shares in Proact IT Group AB if the performance targets set by the Board of Directors regarding net income, earnings per share and return on capital employed in 2026 are met. The shares will be allocated after the first quarterly report for 2027 is published. The maximum number of performance shares that can be allocated to programme participants is 242,000 shares. The cost of the share-based compensation is based on fair value on the grant date and is reported over the vesting period, in line with the earnings plan. Options There are no option programmes. Proact shareholdings of the Board of Directors, the Chief Executive Officer and other senior executives Board of Directors Shareholding in Proact 31 Dec 2024 Anna Söderblom 10,100 Martin Gren 1) 3,400,000 Annikki Schaeferdiek 4,000 Thomas Thuresson 2,500 Erik Malmberg 7,000 1) Holding that are directly or indirectly owned and/or controlled through legal entities or related parties. Chief Executive Officer and other senior executives Shareholding in Proact 31 Dec 2024 Jonas Hasselberg (CEO and President) 1) 39,411 Noora Jayasekara - Jonas Ekman 12,218 Jamie Ford 500 Maria Gomez 3,500 Alexander Lechtaler 4,000 Magnus Lönn 1) 7,000 Madeleine Samuelson 5,350 Per Sedihn 500 1) Jonas Hasselberg resigned as President and CEO on March 1, 2025 and was replaced by Magnus Lönn. Note 10 Financial revenue Group Parent company 2024 2023 2024 2023 Interest income 15,723 12,368 11,781 8,860 Interest income from Group companies - - 40,918 38,007 Income from participations in Group com- panies - - 260,368 140,675 Other items 1,876 16,150 19 - Total 17,599 28,518 313,086 187,542 The Group’s entire interest income is attributable to loans and receivables. For participations in Group companies, see also Note 17. Note 11 Financial expenses Group Parent company 2024 2023 2024 2023 Interest expenses 28,454 29,520 12,749 17,027 Interest expenses to Group companies - - 30,549 23,597 Exchange rate differences 1,686 1,747 -15,511 1,918 Other items 5,040 8,733 3,745 2,854 Total 35,180 40,000 31,532 45,396 All of the Group’s interest expenses are attributable to loans and other liabilities.
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Proact Annual and Sustainability Report 2024 64 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 12 Income tax AP Accounting policies Taxes Deferred taxes are calculated according to the balance sheet method for all temporary differenc- es that arise between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets including as yet unexercised tax loss carryforwards are recognised only if it is deemed that they can be exercised. The deferred tax liability/asset is remeasured annually at the current tax rate and recognised in the consolidated statement of comprehensive income as part of the tax expense for the year . The valuation of tax liabilities/assets is at nominal value and in accordance with the tax rules and rates adopted. Deferred tax assets and deferred tax liabilities are recog- nised net if they relate to the same taxation authority . Tax expense (-)/tax income (+) Group Parent company 2024 2023 2024 2023 Current tax for the year -75,478 -56,759 -3,320 -899 Adjustment relating to previous years’ tax 4,792 -339 -1 -163 Deferred tax 12,607 11,919 478 320 Tax recognised in the income statement -58,079 -45,179 -2,843 -742 During the year , the Group paid tax of SEK 58,804 thousand (54,561), and SEK 7,321 thousand (13) for the parent company . Reconciliation of effective tax Group Parent company 2024 2023 2024 2023 Reported profit before tax 277,955 218,272 272,406 142,279 Tax for the parent company , based on Swedish 20.6 per cent (20.6) tax rate -57,259 -44,964 -56,116 -29,309 Difference attributable to foreign tax rates -11,229 -3,470 - - Non-deductible expenses -23,125 -61,141 -282 -1,866 Non-taxable income 32,071 64,273 53,640 30,597 Losses for the year for which no deferred tax assets have been capitalised -2,639 -4,680 - - Tax effect for the year relating to capitalised unused loss carryforwards from previous years -1,779 800 - - Tax effect for the year relating to non-capitalised unused loss carryforwards from previous years 1,330 3,909 - - Adjustment relating to previous years’ tax 4,792 347 -1 - Adjustment relating to previous years’ deferred tax - - - - Other taxes -241 -253 -84 -164 Tax expense (-)/tax income (+) -58,079 -45,179 -2,843 -742 Deferred tax assets and tax liabilities There are temporary differences in cases of differences between the reported tax values of assets or liabilities. The Group’s temporary differences and loss carry-forwards have resulted from deferred tax liabilities and deferred tax assets associated with the following items: 2024 Deferred tax assets Opening balance Deferred tax recognised in income statement (+ income/- expense) Recognised in other compre- hensive income Deferred tax recognised in balance sheet Exchange rate differences Closing balance Unused loss carryforwards 4,833 -337 - - 167 4,663 Goodwill - - - - - - Other intangible assets 1,247 497 - - - 1,744 Tangible fixed assets 14,848 -500 - - 10 14,358 Hedging of net investment in foreign subsidiaries - - -3,492 3,492 - - Provisions 581 -311 - - 26 296 Additional information 943 159 - - 14 1,116 Net reporting - - - - - - Total deferred tax assets 22,452 -492 -3,492 3,492 217 22,177 2024 Deferred tax liabilities Opening balance Deferred tax recognised in income statement (- income/+ expense) Recognised in other compre- hensive income Deferred tax recognised in balance sheet Exchange rate differences Closing balance Goodwill 2,641 - - - -130 2,511 Other intangible assets 46,402 -12,042 - - 1,668 36,028 Tangible fixed assets -498 34 - - -41 -505 Provisions 1,900 313 - - 168 2,381 Additional information 7,741 -1,404 - - 784 7,121 Net reporting - - - - - - Total deferred tax liabilities 58,186 -13,099 - - 2,449 47,536
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Proact Annual and Sustainability Report 2024 65 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements 2023 Deferred tax assets Opening balance Deferred tax recognised in income statement (+ income/- expense) Recognised in other compre- hensive income Deferred tax recognised in balance sheet Exchange rate differences Closing balance Unused loss carryforwards 6,711 -1,912 - - 34 4,833 Goodwill - - - - - - Other intangible assets 896 351 - - - 1,247 Tangible fixed assets 16,903 -2,034 - - -21 14,848 Hedging of net investment in foreign subsidiaries - - -54 54 - - Provisions -499 1,073 - - 7 581 Additional information 1,709 -718 - - -48 943 Net reporting -130 130 - - - - Total deferred tax assets 25,590 -3,110 -54 54 -28 22,452 2023 Deferred tax liabilities Opening balance Deferred tax recognised in income statement (- income/+ expense) Recognised in other compre- hensive income Deferred tax recognised in balance sheet Exchange rate differences Closing balance Goodwill 7,080 -4,384 - - -55 2,641 Other intangible assets 58,695 -12,457 - -148 312 46,402 Tangible fixed assets -474 -18 - - -6 -498 Provisions 1,640 268 - - -8 1,900 Additional information 6,310 1,432 - - -1 7,741 Net reporting -130 130 - - - - Total deferred tax liabilities 73,121 -15,029 - -148 242 58,186 Deferred tax assets and liabilities are recognised net when there is a legally enforceable right to set off current tax assets and liabilities. Deferred tax assets have been recognised for tax loss carryforwards in those subsidiaries where the company has assessed that these loss carryforwards will be utilised against future taxable profits. Expected taxable profits have been calculated individually for each company . As at 31 December 2024, 79 per cent of the total tax loss carryforwards in the Group have been assessed to be available for utilisation against future taxable profits. Deferred tax assets/liabilities attributable to deductible temporary differences relating to interests in subsidiaries are reported insofar as it is likely that the temporary difference will be returned in the future and there will be taxable profits against which the deduction can be utilised. The profit for the year has resulted in the Group being able to report a tax expense amounting to SEK 58,079 thousand (45,149). Note 12 CONTINUED Parent company 2024 Opening balance Deferred tax Closing balance Unused loss carryforwards - - - Temporary differences 1,394 477 1,871 Total deferred tax asset (+)/tax liability (-) 1,394 477 1,871 Parent company 2023 Opening balance Deferred tax Closing balance Unused loss carryforwards - - - Temporary differences 1,074 320 1,394 Total deferred tax asset (+)/tax liability (-) 1,074 320 1,394 Unutilised loss carryforwards Unutilised loss carryforwards are recognised as deferred tax assets when it is likely that these can be utilised to offset future taxable excesses. The parent company’s unutilised loss carryforwards amount to SEK 0 thousand (0). The Group’s unutilised loss carryforwards amount to SEK 115,932 thousand (36,700), of which SEK 92,075 thousand (17,901) has been deemed to be utilisable, which is why a deferred tax asset of SEK 4,664 thousand (4,833) has been recognised. Can be utilised at the latest by: 31 Dec 2024 31 Dec 2023 Not subject to time limit 115,932 36,700 Total unutilised loss carryforwards 115,932 36,700
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Proact Annual and Sustainability Report 2024 66 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 14 Foreign currencies The currency exchange rates used for the Group’s significant currencies throughout the year appear in the table below. Rate, balance sheet date Average rate Currency 2024 2023 2024 2023 EUR 11.4865 11.0960 11.4322 11.4765 USD 10.9882 10.0416 10.5614 10.6128 GBP 13.8475 12.7680 13.5045 13.1979 NOK 0.9697 0.9871 0.9832 1.0054 CZK 0.4553 0.4488 0.4551 0.4781 DKK 1.5398 1.4888 1.5327 1.5403 JPY 0.0698 0.0710 0.0698 0.0756 Exchange rate differences affecting net result for the year (+ profit, - loss) Group Parent company 2024 2023 2024 2023 Recognised within cost of sold product 6,015 5,914 - - Recognised within net financial items -1,686 -1,747 15,511 -1,918 Invoicing and goods purchased in foreign currencies Most goods are purchased from the US and Europe, and therefore the company is affected by fluctuations in the USD, GBP and EUR exchange rate, respectively . Invoicing and goods purchased in: (Amounts in SEK thousand) Group 2024 2023 Invoicing Percentage of total revenue, % Goods purchased Percentage of total purchases, % Invoicing Percentage of total revenue, % Goods purchased Percentage of total purchases, % EUR 2,299,991 47 1,549,206 42 2,222,070 46 1,560,234 42 USD 395,283 8 539,692 15 448,836 9 722,233 19 GBP 732,551 15 352,528 10 702,270 14 294,451 8 Other currencies 1,436,411 30 1,214,307 33 1,474,139 30 1,181,199 31 Total 4,864,236 100 3,655,733 100 4,847,315 100 3,758,117 100 Accounts receivable and accounts payable in foreign currencies Accounts receivable and accounts payable in: (Amounts in SEK thousand) Group 2024 2023 Accounts receivable Percentage of total accounts receivable, % Accounts payable Percentage of total accounts payable; % Accounts receivables Percentage of total accounts receivable, % Accounts payable Percentage of total accounts payable, % EUR 328,923 43 228,525 41 311,108 43 230,011 43 USD 80,288 11 120,733 21 19,463 3 62,342 12 GBP 75,274 10 75,537 13 77,316 11 59,465 11 Other currencies 271,895 36 137,085 24 309,778 43 178,152 34 Total 756,380 100 561,880 100 717,665 100 529,970 100 Note 13 Non-recurring items Non-recurring items as stated below have affected the operating profit in 2024. Group 2024 2023 Administrative expenses - -16,662 Total 1) - -16,662 1) Non-recur ring items in 2023 relate to costs associated with the cost savings programme, SEK -19.3 million, and the realised gain from the sale of Proact’s Lithuanian subsidiary SEK 3.0 million in operating profit.
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Proact Annual and Sustainability Report 2024 67 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 14 CONTINUED Hedges as at 31 December 2024 The Group does not apply hedge accounting. Concluded forward contracts constitute financial hedges. As at the balance sheet date, hedged accounts receivable amounted to USD 6,300 thousand (2,149) and EUR 2,211 thousand (2,095) in the Group. Denominated in SEK, the hedged amount totals SEK 94,624 thousand (44,787). The effect on profit or loss is recognised within operating profit in the statement of comprehensive income. The fair value of these forward contracts at 31 December 2024 resulted in an unrealised gain of SEK 1,312 thousand, which has affected the statement of compre- hensive income by an equivalent amount. The previous year’s unrealised result was a profit amounting to SEK 1,509 thousand. As at the balance sheet date, hedged accounts payable amounted to USD 12,375 thousand (7,964) and EUR 10,425 thousand (6,382) in the Group. Denominated in SEK, the hedged amount totals SEK 255,724 thousand (150,756). The effect on profit or loss is recognised within operating profit in the statement of comprehensive income. The fair value of these forward contracts at 31 December 2024 resulted in an unrealised loss of SEK -5,606 thousand, which has affected the statement of compre- hensive income by an equivalent amount. The previous year’s unrealised result was a loss amounting to SEK -5,719 thousand. Hedged receivables in leases as at the balance sheet date amount to EUR 1,738 thousand (2,465), GBP 659 thousand (2,014), USD 0 thousand (0) and NOK 719 thousand (3,067) within the Group. Denominated in SEK, the hedged amount totals SEK 29,776 thousand (56,092). The effect on profit or loss is recognised within operating profit in the statement of comprehensive income. The fair value of these forward contracts as at 31 December 2024 resulted in an unrealised loss of SEK -997 thousand (-1,084), which has affected the statement of comprehensive income by an equivalent amount. The parent company had outstanding forward contracts as at 31 December 2024 totalling EUR 1,273 thousand (1,386) and USD 192 thousand (205). The fair value of these forward contracts as at 31 December 2024 was an unrealised loss of SEK -26 thousand (-223). As at 31 December 2024, accounts receivable in foreign currencies amounted to SEK 547,968 thou- sand (445,626) and accounts payable amounted to SEK 450,512 thousand (386,662). Note 15 Intangible assets AP Accounting policies Goodwill Recognised goodwill consists of the difference between, on one hand, the acquisition value of Group company shares, the value of non-controlling interests in the acquired business, and the fair value of previously owned shares and, on the other hand, the reported value in the acquisition analysis of acquired assets and assumed liabilities. Impairment tests are performed annually and whenever there is an indication that an asset has decreased in value. Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of these cash-generating units constitutes the Group’s Business Units. In cases where the carrying amount of the asset exceeds its estimated recoverable amount, the value of the asset is written down to its recoverable amount. Other intangible assets Customer relationships, brands and support contracts Customer relationships, brands and support contracts that are identified upon the acquisition of companies are recognised as intangible assets at acquisition value (fair value at the time of acqui- sition). Customer relationships and brands are amortised on a straight-line basis over a maximum of ten years. In each case a useful life is set over which the support contracts are amortised on a straight-line basis according to plan. If there are indications of impairment, the asset’s recovera- ble amount is assessed. In cases where the carrying amount of the asset exceeds its estimated recoverable amount, the value of the asset is written down to its recoverable amount. Capitalised software expenses Capitalised software expenses consist of costs associated with implementation and adaptation of software that can be capitalised. Capitalised software is amortised on a straight-line basis over a maximum of 5 years. If there are indications of impairment, the asset’s recoverable amount is assessed. In cases where the carrying amount of the asset exceeds its estimated recoverable amount, the value of the asset is written down to its recoverable amount. Proact had no cloud-based solutions in 2024. Impairment Assets with an indefinite useful life are not amortised but are tested annually for impairment. As- sets that are amortised are assessed for impairment whenever events or changes in circumstanc- es indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recov- ery value is the higher of an asset’s fair value minus sales costs and value in use. When assessing impairment, assets are grouped at the lowest levels at which there are separately identifiable cash flows (cash-generating units). Net investment (excluding goodwill) in foreign subsidiaries Net assets in foreign subsidiaries broken down by currency . When translating the balance sheets of foreign subsidiaries into Swedish kronor , the Group is exposed to exchange rate fluctuations. The effect on equity in 2024 of translating the accounts of foreign subsidiaries into Swedish kronor totalled SEK 22,385 thousand (-4,573). The Group’s equity exposure to exchange rate fluctuations at the balance sheet date was as follows: 2024 2023 Amount in thousands Amount Converted to SEK at the exchange rate on balance sheet date Amount Converted to SEK at the exchange rate on balance sheet date CZK 16,808 7,653 34,647 15,550 DKK 26,381 40,620 21,339 31,770 EUR -5,086 -58,420 15,165 168,271 GBP 8,789 121,706 21,773 277,998 USD -330 -3,626 -435 -4,368 NOK -11,431 -11,085 68,199 67,319 Hedging of net investment in foreign operations Group Opening balance as at 1 January 2023 24,994 Hedge accounting of net investments recognised in other comprehensive income 262 of which deferred tax recognised in other comprehensive income -54 Closing balance as at 31 December 2023 25,202 Opening balance as at 1 January 2024 25,202 Hedge accounting of net investments recognised in other comprehensive income 16,953 of which deferred tax recognised in other comprehensive income -3,492 Closing balance as at 31 December 2024 38,663
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Proact Annual and Sustainability Report 2024 68 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Group Parent company Goodwill Customer relationships Other intangible assets Total Other intangible assets Opening acquisition value at 1 January 2024 1,060,885 512,702 126,476 1,700,063 70,335 Acquisitions for the year - - 1,177 1,177 1,105 Accumulated acquisition value in acquired companies - - - - - Acquisitions for the year via corporate acquisitions - - - - - Sales/disposals - - - - - Exchange rate differences 39,039 20,019 4,937 63,995 - Closing accumulated acquisition value 1,099,924 532,722 132,589 1,765,235 71,440 Opening amortisation and write-downs, 1 January 2024 -77,314 -358,192 -103,676 -539,182 -62,119 Amortisation for the year - -46,990 -8,101 -55,091 -6,258 Write-downs for the year - - - - - Sales/disposals - - - - - Exchange rate differences -877 -14,668 -4,088 -19,633 - Accumulated amortisation and impairment -78,191 -419,851 -115,864 -613,906 -68,377 Book value as at 31 December 2024 1,021,733 112,871 16,725 1,151,329 3,063 Opening acquisition value, 1 January 2023 1,062,175 514,782 125,605 1,702,562 69,496 Acquisitions for the year - - 968 968 839 Accumulated acquisition value in acquired companies - - - - - Acquisitions for the year via corporate acquisitions 67 - - 67 - Sales/disposals - -1,681 - -1,681 - Exchange rate differences -1,357 -399 -97 -1,853 - Closing accumulated acquisition value 1,060,885 512,702 126,476 1,700,063 70,335 Opening amortisation and write-downs, 1 January 2023 -78,537 -315,064 -94,594 -488,195 -55,659 Amortisation for the year - -46,217 -9,487 -55,704 -6,460 Write-downs for the year - - - - - Sales/disposals - 1,681 - 1,681 - Exchange rate differences 1,223 1,408 405 3,036 - Accumulated amortisation and impairment -77,314 -358,192 -103,676 -539,182 -62,119 Book value as at 31 December 2023 983,571 154,510 22,800 1,160,881 8,216 Distribution of goodwill by cash-generating unit Group 31 Dec 2024 31 Dec 2023 Nordic & Baltics 199,779 199,524 UK 231,973 213,889 West 199,222 192,449 Central 390,759 377,709 Total 1,021,733 983,571 Cash-generating unit Group WACC, before tax Group WACC, after tax Group Growth in terminal period 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Nordic & Baltics 10.5% 10.8% 10.4% 10.6% 2.0% 2.0% UK 10.3% 10.5% 10.1% 10.4% 2.0% 2.0% West 10.3% 10.5% 10.1% 10.3% 2.0% 2.0% Central 10.3% 10.7% 10.3% 10.6% 2.0% 2.0% Impairment test A possible impairment requirement for goodwill is determined each year by calculating the future utilisation value of each individual cash-generating unit. An impairment loss is recognised if the carrying amount of goodwill exceeds the calculated utilisation value. When estimating the future utilisation value, the future cash flows for the respective cash-generating units have been calculated based on the forthcom- ing year’s budget and forecasts for a further 4 years, assuming an eternal growth rate of 2 per cent (2). A Weighted Average Cost of Capital (WACC) before tax of between 10-11 per cent (10-11) and after tax of between 10-11 per cent (10-11) has been used for calculation, depending on risk factor in the various cash-generating units. Besides these important assumptions in respect of WACC and future growth, profitability (margin on earnings before tax) of 6-8 per cent (6-8) has been estimated. Senior management’s determination of important assump- tions, and the values inherent in them, are based on a reflection of past experience. Eternal growth of 2 per cent has been deemed reasonable on the market in which the company is active. The assessment is based on a weighted analysis of both products and services, and also on higher growth earlier in the first years of the forecast period. The company has implemented sensitivity analyses based on isolated changes of lower budget levels, lower growth figures and higher weighted capital costs. In the event of an increase of 2 percentage points in weighted average cost of capital, all cash-generating units would still have good margins for the recoverable amount compared with the carrying amount. If the growth rate in terms of net sales were to fall by 1 percentage point during the forecast period, the recoverable amount for all cash-generating units would still exceed the reported values by a good margin. If the long-term growth rate in terms of net sales were to fall by 1 percentage point, the recoverable amount for all cash-generating units would still exceed the carrying amounts by a good margin. No need for impairment has been assessed as at 31 December 2024. Note 15 CONTINUED
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Proact Annual and Sustainability Report 2024 69 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 16 T angible fixed assets AP Accounting policies Tangible fixed assets are recognised at acquisition value less depreciation and write-downs. The acquisition cost includes expenses that are directly attributable to the acquisition of the asset. Depreciation of tangible fixed assets is based on the acquisition value of the assets and the estimated useful life. In this regard, a depreciation time of three years is applied for computers and technical equipment, five years for machinery and equipment, three years for spare parts and 50 years for buildings. The useful lives of the assets are tested on each balance sheet date and adjusted where required. The book value of assets is written down to recovery value if the asset’s book value exceeds its assessed recovery value. Gains and losses on disposal are determined by comparing the sales income and reported value, and are recognised in the statement of comprehensive income. Group Parent company Computers and machinery Equipment Spare parts Buildings Total Computers and machinery Opening acquisition value at 1 January 2024 280,224 76,536 66,054 20,002 442,816 4,050 Acquisitions during the year 1) 20,754 4,628 4,667 - 30,049 229 Accumulated acquisition value of acquired businesses - - - - - - Sales/disposals -13,713 -4,256 -5,589 - -23,558 -16 Reclassifications 1) -5,392 289 - - -5,103 - Exchange rate differences 12,118 2,142 2,428 1,680 18,368 - Closing accumulated acquisition value 293,991 79,339 67,560 21,682 462,572 4,263 Opening depreciation and write-downs, 1 January 2024 -241,597 -59,238 -62,416 -5,467 -368,718 -3,756 Depreciation for the year -22,001 -8,416 -2,655 -388 -33,460 -211 Sales/disposals 13,263 3,176 5,525 - 21,964 15 Reclassifications -1,147 -296 - - -1,443 - Exchange rate differences -10,667 -1,717 -2,290 -465 -15,139 - Accumulated depreciation and write-downs -262,149 -66,491 -61,836 -6,320 -396,796 -3,952 Book value as at 31 December 2024 31,842 12,848 5,724 15,362 65,776 311 Group Parent company Computers and machinery Equipment Spare parts Buildings Total Computers and machinery Opening acquisition value at 1 January 2023 282,941 69,683 72,433 19,033 444,090 3,833 Acquisitions during the year 1) 29,478 10,682 3,129 766 44,055 217 Accumulated acquisition value of acquired businesses - - - - - - Sales/disposals -32,005 -3,431 -9,430 -73 -44,939 - Reclassifications 1) - - - - - - Exchange rate differences -190 -398 -78 276 -390 - Closing accumulated acquisition value 280,224 76,536 66,054 20,002 442,816 4,050 Opening depreciation and write-downs, 1 January 2023 -239,456 -55,558 -69,792 -5,117 -369,923 -3,571 Depreciation for the year -25,414 -7,616 -2,148 -361 -35,539 -185 Sales/disposals 31,484 3,332 9,371 73 44,260 - Reclassifications -9,140 - - - -9,140 - Exchange rate differences 929 604 153 -62 1,624 - Accumulated depreciation and write-downs -241,597 -59,238 -62,416 -5,467 -368,718 -3,756 Book value as at 31 December 2023 38,627 17,298 3,638 14,535 74,098 294 1) Inc ludes SEK 6,558 thousand (9,140) reclassified from fixed assets Computers and machinery to financial lease sales.
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Proact Annual and Sustainability Report 2024 70 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 17 Shares in Group companies Shares in Group companies Company registration number Headquarters Number of shares Share of equity, % Book value, SEK thousand 31 Dec 2024 Book value, SEK thousand 31 Dec 2023 Proact IT Sweden AB 556328-2754 Solna, SE 47,456,047 100.00 96,672 96,672 Proact IT Norge AS 971,210,737 Oslo, NO 3,475,000 100.00 49,523 49,523 Proact Finland OY 1084241-2 Espoo, FI 20,000 100.00 15,519 15,519 Proact Systems A/S 18,803,291 Brøndby , DK 600 100.00 - - Proact Finance AB 556396-0813 Sollentuna, SE 500,000 100.00 5,000 5,000 Proact IT Latvia SIA LV40003420036 Riga, LV 850 100.00 8,499 8,499 Proact Lietuva UAB 110861350 Vilnius, LT 7,386 73.86 - - Proact Netherlands B.V . 20136449 Breda, NL 44,419 100.00 221,789 221,789 Proact Estonia AS 115131151 Tallinn, EE 22,757 100.00 11,388 11,388 Proact IT (UK) Ltd 07493526 Chesterfield, UK 775,000 100.00 62,112 62,112 Databasement International Holding B.V . 27326003 Zoetermeer , NL 1,802 100.00 - - Proact Belgium BVBA 090211403 Drongen, BE 6,408 100.00 2,303 - Proact Czech Republic, s.r .o. 24799629 Prague, CZ - 85.30 21,882 21,882 Proact U.S. LLC - Delaware, USA - 100.00 - - Proact IT Germany GmbH HRB 132327 Hamburg, DE 210,000 100.00 - - 494,687 492,384 Any impairment requirements in respect of shares in subsidiaries are tested each year by calculating the future utilisation value of each individual subsidiary , as referred to in Note 15. In 2023, a further 14.7 per cent was acquired from non-controlling interests in Proact Czech Republic Ltd, amounting to SEK 8,427 thousand. The shares in Proact Lietuva UAB were sold during the year . The value of shares in Databasement International Holding B.V . was transferred to Proact Netherlands B.V . in 2023. Shares in subsidiaries Parent company 31 Dec 2024 31 Dec 2023 Opening book value 492,384 491,802 Acquisitions 2,303 8,427 Disposals - -7,845 Closing accumulated acquisition value 494,687 492,384 BOOK VALUE 494,687 492,384 Income from participations in Group companies Parent company 2024 2023 Dividends received 260,368 148,520 Total 260,368 148,520 Acquisitions 2024 No acquisitions took place in 2024. Acquisition of additional shares in 2023 from non-controlling interests In 2023, the company acquired a further 14.7 per cent of shares in Proact Czech Republic Ltd from non-controlling interests. Following the acquisition, the company holds 100 per cent of shares in the subsidiary . The purchase price amounted to CZK 17,922 thousand (SEK 8,427 thousand). Disposal of shares in 2023 from non-controlling interests Shares in Proact Lietuva UAB were sold on 28 August 2023. Following the disposal, the company holds 0 per cent of shares in the subsidiary . The purchase price amounted to SEK 0 thousand. Profit, equity and cash flow attributable to non-controlling interests Equity Profit Cash flow Percentage of non-controlling interests SEK thousand 31 Dec 2024 2024 2024 2024 Proact Lietuva UAB - - - - - - - - 31 Dec 2023 2023 2023 2023 Proact Lietuva UAB - -384 -7,745 26 - -384 -7,745
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Proact Annual and Sustainability Report 2024 71 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Receivables and liabilities with Group companies and Note 18 Other non-current receivables Parent company <1 year 1-5 years >5 years Receivables with Group companies due within 274,705 186,564 443,320 Liabilities with Group companies due within 487,693 - 13,847 There are no subordinated loans to foreign subsidiaries. Other non-current receivables Group 31 Dec 2024 31 Dec 2023 Blocked accounts for tenancy agreements 1,214 1,222 Receivables relating to finance leases 24,752 40,255 Pre-paid expenses and accrued income – Non-current 1) 588,525 502,622 Other non-current receivables 323 506 Total 614,814 544,605 1) See also Note 21. Note 19 Inventories AP Accounting policies Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and costs necessary to make the sale. Cost is calculated using the first-in, first-out (FIFO) method and includes expenditure incurred in acquiring the inventory assets and bringing them to their present location and condition. Inventories are valued at the lower of cost and net realisable value. The carrying amount of inventories may need to be written down if they have been damaged, if they are partially or wholly obsolete or if the selling price has fallen. The value of inventory as at 31 December 2024 amounted to SEK 20,844 thousand (15,442). During the year , the Group wrote down inventories to the value of SEK 0 thousand (276) due to obsolescence. At the same time, write-downs amounting to SEK 0 thousand (493) were reversed in 2024 as it was possible to sell previously written down inventories. Note 20 Accounts receivable AP Accounting policies Accounts receivable Accounts receivable are amounts attributable to customers in respect of goods or services sold that are implemented in current operations. Accounts receivable generally fall due for pay- ment within 30-90 days, and so all accounts receivable have been classified as current assets. Accounts receivable are initially recognised at the transaction price. The Group holds accounts receivable for the purpose of collecting contractual cash flows. Provision for doubtful debts and impairment The Group applies the simplified method for calculating expected credit losses. This method means that expected losses throughout the entire term of the receivable are used as a basis for accounts receivable and contract assets. Provision for expected credit loss is based on the credit risk characteristics of the accounts receivable and contract assets and the number of days past due. The contract assets are attributable to as yet uninvoiced work and essentially have the same risk characteristics as already invoiced work for the same type of contract. Therefore, the Group considers that the loss rates for accounts receivable are a reasonable estimate of the loss rates for contract assets. Expected credit losses are based on customers’ payment histories together with the loss history . Accounts receivables and contract assets are impaired when it is determined that no amount will be recoverable. Credit losses are recognised in the income statement as a cost of goods and services sold. Group 31 Dec 2024 31 Dec 2023 Accounts receivable 761,920 718,786 Provisions for impairment of accounts receivable -5,197 -1,121 Established bad debt losses -343 - Accounts receivable – net 756,380 717,665 During 2024, the Group had SEK 3,824 thousand in expected bad debt losses. During 2023, the Group had SEK 49 thousand in expected bad debt losses See the section entitled “Risks and risk management” for risks and ageing analysis relating to accounts receivable. Contract assets are reported separately: see Note 3 Revenue and Note 21 Interim receivables. Note 21 Prepaid expenses and accrued income Current Group Parent company 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Prepaid rental costs 5,749 4,559 - - Prepaid lease fees 4,415 2,935 - - Prepaid insurance premiums 9,422 8,417 3,232 3,692 Prepaid maintenance charges 219,274 200,464 15,896 8,882 Prepaid system costs 332,076 320,233 - - Other prepaid expenses 65,849 52,239 3,879 2,457 Accrued service revenue 58,668 56,432 - - Accrued system revenue 5,295 5,472 - - Other accrued revenue 8,326 6,568 - - Total current interim receivables 709,074 657,319 23,007 15,031 Non-current Prepaid rental costs - - - - Prepaid lease fees 23 33 - - Prepaid maintenance charges 164,666 134,053 - - Prepaid system costs 325,492 280,748 - - Other prepaid expenses 15,961 17,863 513 1,448 Accrued service revenue 72,093 66,079 - - Accrued system revenue 6,915 - - - Other accrued revenue 3,375 3,846 - - Total non-current interim receivables 1) 588,525 502,622 513 1,448 1) Non-cur rent interim receivables are included as part of Other non-current receivables in the balance sheet.
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Proact Annual and Sustainability Report 2024 72 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 22 Other liabilities Group Parent company 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Employee withholding tax 31,959 30,561 828 798 Social security contributions 45,893 44,298 7,323 6,056 VAT liabilities 38,463 50,279 - 1,327 Advance payments from customers 5,278 3,427 - - Deferred payment of part of purchase price 5,456 5,031 - - Other items 25,147 32,432 - - Total 152,196 166,028 8,151 8,181 All liabilities are due for payment within one year . Note 23 Accrued expenses and deferred income Current Group Parent company 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Accrued wages and salaries 71,784 60,673 2,626 3,479 Accrued holiday pay liabilities 59,208 51,783 3,721 3,485 Accrued social costs 11,707 11,355 151 - Accrued servicing costs 17,264 11,740 - - Accrued non-recurring costs 2,981 6,536 1,304 1,304 Prepaid system revenue 357,470 342,473 - - Prepaid service revenue 484,602 456,613 - - Other items 71,476 71,881 9,674 5,086 Total current interim liabilities 1,076,492 1,013,054 17,476 13,354 Non-current Accrued servicing costs 6,409 - - - Prepaid system revenue 408,937 395,980 - - Prepaid service revenue 527,753 359,447 - - Other items 451 1,516 - - Total non-current interim liabilities 1) 943,550 756,943 - - 1) Non-cur rent interim liabilities are included as part of Other non-current liabilities in the balance sheet. Note 24 Financial assets and liabilities AP Accounting policies Financial assets and liabilities The Group classifies its financial assets into the following categories: financial assets measured at fair value through other comprehensive income, financial assets measured at amortised cost, financial instruments held to maturity , and financial assets available for sale. Classification depends on the purpose for which the instruments were acquired. The Group determines the classification of the instruments at the time of initial recognition. Only the categories relevant to the Group are described below. The Group classifies its financial liabilities into the following categories: financial liabilities measured at fair value through comprehensive income and other financial liabilities measured at amortised cost. Risks related to financial instruments, sensitivity analyses, etc. are described in the “Risks and Risk Management” section of the Annual Report. Financial assets measured at fair value through comprehensive income Assets in this category are measured at fair value on a recurring basis with changes in value recognised in the statement of comprehensive income. This category consists of two subgroups: financial assets and liabilities held for trading and other financial assets and liabilities that the company has initially opted to measure at fair value through the statement of comprehensive income. A financial asset is classified as held for trade if it is acquired with a view to being sold in the short term. Proact only has derivatives in the group financial asset held for trading. Financial assets measured at amortised cost Loans receivable and accounts receivable are non-derivative financial assets with determined or determinable payments that are not listed on an active market. It is significant that they arise when the Group provides money , goods or services directly to a customer without the intention of trad- ing the resulting receivable. They are included in current assets, with the exception of items with due dates more than 12 months after the balance sheet date, which are classified as non-current assets. The Group’s finance lease receivables are recognised in the balance sheet under other non-current receivables. Assets in this category are subsequently measured at amortised cost. Amortised cost is determined based on the effective interest rate calculated at the time of acquisition. Accounts receivable are recognised at the amount expected to be paid following individual assessment. The expected maturity of accounts receivable is short, and so the value has been recognised at a nominal amount without discount. Provision for expected credit loss is based on the credit risk characteristics of the accounts receivable and contract assets and the number of days past due. Contract assets relate to work not yet invoiced and have essentially the same risk characteristics as work already invoiced for the same type of contract. Therefore, the Group considers that the loss rates for accounts receivable are a reasonable estimate of the loss rates for contract assets. Expected credit losses are based on customers’ payment histories together with the loss history . Write-downs of accounts receivable are recognised in operating expenses. Financial liabilities measured at fair value through comprehensive income Liabilities in this category are measured at fair value on a recurring basis with changes in value recognised in the statement of comprehensive income. This category consists of financial liabil- ities that the company recognises at fair value through the statement of comprehensive income. Proact has carried out present value calculation of additional purchase prices as they arise in this category , as well as derivatives. The effective portion of the change in fair value of a derivative instrument identified as a net investment that qualifies for hedge accounting is recognised through other com- prehensive income in the hedging reserve in equity . The ineffective portion of the change in value is recognised immediately in the income statement as other revenue or other expenses. The portion of the gain or loss on a hedging instrument that is deemed to be an effective hedge is recognised in other comprehensive income and accumulated in equity . The gain or loss attrib- utable to the ineffective portion is recognised directly in the income statement as other income or other expenses. Other financial liabilities measured at amortised cost Accounts payable are unsecured and are normally paid within 30 days. The fair value of accounts payable and other liabilities is considered to correspond to their carry- ing amounts, as they are current by nature. Borrowing is initially recognised at fair value, net after transaction costs. Borrowing is then recognised at amortised cost and any difference between the amount received (net after trans - action costs) and the repa yment amount is recognised in the statement of comprehensive income, distributed across the loan period, using the effective interest method. Accounts payable are unsecured and are normally paid within 30 days. Accounting for derivative instruments Derivatives are recognised in the balance sheet on contract date and are measured at fair value, both initially and when subsequently reassessed. All derivatives are recognised on an ongoing basis at fair value with changes in value recognised in the statement of comprehensive income within cost of sales for those derivatives linked to accounts payable and financial items for those derivatives linked to finance leases. Calculation of fair value The fair value of financial instruments such as forward exchange contracts that are not traded in an active market is determined using valuation techniques. Such methods may include an analysis of recent transactions of similar instruments or discounting of anticipated cash flows. The nominal value less any assessed credits, for accounts receivable and liabilities to suppliers, are assumed to correspond to their fair value. The fair value of additional purchase prices is calculated by discounting the future contract- ed or assessed cash flow at the current market rate of interest available to the Group for similar financial instruments. The fair value of financial liabilities is calculated for disclosure in a note by discounting the future contracted or assessed cash flow at the current market rate of interest available to the Group for similar financial instruments.
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Proact Annual and Sustainability Report 2024 73 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Other financial liabilities measured at amortised cost Group Parent company 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Non-interest-bearing Currency derivatives 408 1,669 - - Other liabilities 1) 59,607 42,819 6,918 2,350 Accounts payable 561,880 529,970 3,173 4,957 Total non-interest-bearing 621,895 574,458 10,091 7,307 Interest-bearing Liability on acquisition – Current 1) - - - - Liability on acquisition – Non-current 1) - - - - Bank loans, of which current portion - - - - Bank loans, of which non-current portion 229,730 221,920 229,730 221,920 Lease liabilities 2) 253,735 246,350 - 456 Total interest-bearing 483,465 468,270 229,730 222,376 Total other financial liabilities measured at amortised cost 1,105,360 1,042,728 239,821 229,683 1) Def erred payment of part of the purchase price for the acquisition of Cetus Solutions Ltd SEK 5,456 thousand (5,031). 2) See also note 27. Note 24 CONTINUED Interest-bearing liabilities, Group, 31 Dec 2024 Interest Maturity Carrying amount Utilised overdraft facility , Nordea1) 2) Base rate +2.0% 31/12/2024 - Bank loan, Nordea 2) STIBOR 3M +1.25% 16/07/2026 - Bank loan, Nordea 2) EURIBOR 3M +1.25% 16/07/2026 - Bank loan, Svensk Exportkredit 2) EURIBOR 3M + 1.8% 16/07/2026 229,730 Lease liability3) 4.17% - 7.48% 2025 53,112 Lease liability3) 3.06% - 6.19% 2026-2029 200,623 Total interest-bearing liabilities 483,465 1) Interest will be payable over three months 2) T he limit for the Group overdraft facility is SEK 159,107 thousand, and for the parent company SEK 150,000 thousand, of which the Group amount utilised was SEK 0 thousand and SEK 0 thousand for the parent company . 3) Interest will be payable over one month. Interest-bearing liabilities, Group, 31 Dec 2023 Interest Maturity Carrying amount Utilised overdraft facility , Nordea1) 2) Base rate +2.0% 31/12/2023 - Bank loan, Nordea 2) STIBOR 3M +1.25% 16/07/2026 - Bank loan, Nordea 2) EURIBOR 3M +1.25% 16/07/2026 - Bank loan, Svensk Exportkredit 2) EURIBOR 3M + 1.8% 16/07/2026 221,920 Lease liability3) 4.17% - 7.48% 2024 51,565 Lease liability3) 3.06% - 6.19% 2025-2028 194,785 Total interest-bearing liabilities 468,270 1) Interest will be payable over three months 2) T he limit for the Group overdraft facility is SEK 154,488 thousand, and for the parent company SEK 150,000 thousand, of which the Group amount utilised was SEK 0 thousand and SEK 0 thousand for the parent company . 3) Interest will be payable over one month. Interest-bearing liabilities, parent company, 31 December 2024 Interest Maturity Carrying amount Bank loan, Nordea1) STIBOR 3M +1.25% 16/07/2026 - Bank loan, Nordea1) EURIBOR 3M +1.25% 16/07/2026 - Bank loan, Svensk Exportkredit1) EURIBOR 3M + 1.8% 16/07/2026 229,730 Total interest-bearing liabilities 229,730 Of the above interest-bearing liabilities, current loans that fall due in 2025 amount to SEK 0 thousand. Of the parent company’s bank loans above, maturing on 16 July 2026, SEK 229,730 thousand relates to a three-year credit facility of EUR 20 million from Svensk Exportkredit and a three-year credit facility from Nordea totalling SEK 600 million. The credit facility from Nordea has two extension options of one year each, occurring after 12 and 24 months respectively . As at 31 December 2024, there is no drawdown under the Nordea credit facility . The bank loan contains lending terms relating to net debt in relation to EBITDA. The lending terms have been met by a good margin in 2024 and as at 31 Dec - ember 2024. 1) Interest will be payable over three months. Interest-bearing liabilities, parent company, 31 December 2023 Interest Maturity Carrying amount Bank loan, Nordea1) STIBOR 3M +1.25% 16/07/2026 - Bank loan, Nordea1) EURIBOR 3M +1.25% 16/07/2026 - Bank loan, Svensk Exportkredit 1) EURIBOR 3M + 1.8% 16/07/2026 221,920 Total interest-bearing liabilities 221,920 Of the above interest-bearing liabilities, current loans that fall due in 2024 amount to SEK 0 thousand. Of the parent company’s bank loans above, maturing on 16 July 2026, SEK 221,920 thousand relates to a three-year credit facility of EUR 20 million from Svensk Exportkredit and a three-year credit facility totalling SEK 600 million. This credit facility from Nordea has two extension options of one year each, occurring after 12 and 24 months respectively . The second extension option was exercised in 2023. As at 31 December 2023, there is no drawdown under the Nordea credit facility . This bank loan includes lending terms in respect of net debt in relation to EBITDA. The lending terms were met by a good margin in 2023 and as at 31 December 2023. 1) Interest will be payable over three months. Group maturity analysis, financial liabilities as at 31 December 2024 Contractual undiscounted amounts including future interest payments On request <3 mths 3-12 mths 1-5 years >5 years Currency derivatives - - 408 - - Liabilities on acquisition - Current portion 1) - - - - - Liabilities on acquisition - Non-current por - tion1) - - - - - Bank loans, of which non-current portion - 3,301 9,904 216,525 - Accounts payable - 561,880 - - - Other liabilities - 59,607 - - - Lease liabilities - 13,278 39,837 212,447 - - 638,066 50,149 428,972 - 1) Liability on acquisition of Cetus Solutions Ltd SEK 5,456 thousand (5,031).
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Proact Annual and Sustainability Report 2024 74 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 24 CONTINUED Group maturity analysis, financial liabilities as at 31 December 2023 Contractual undiscounted amounts including future interest payments On request <3 mths 3-12 mths 1-5 years >5 years Currency derivatives - - 587 1,082 - Liabilities on acquisition - Current portion 1) - - - - - Liabilities on acquisition - Non-current portion1) - - - - - Bank loans, of which non-current portion - 3,189 9,564 209,214 - Accounts payable - 529,970 - - - Other liabilities - 42,819 - - - Lease liabilities - 12,891 38,674 194,785 - - 588,869 48,825 405,081 - 1) Liability on acquisition of sepago GmbH SEK 0 thousand (12,786), and on acquisition of Cetus Solutions Ltd SEK 5,031 thousand (4,957). Parent company maturity analysis, financial liabilities as at 31 December 2024 Contractual undiscounted amounts including future interest payments On request <3 mths 3-12 mths 1-5 years >5 years Bank loans, of which non-current portion - 3,301 9,904 216,525 - Accounts payable - 3,173 - - - - 6,474 9,904 216,525 - Parent company maturity analysis, financial liabilities as at 31 December 2023 Contractual undiscounted amounts including future interest payments On request <3 mths 3-12 mths 1-5 years >5 years Bank loans, of which non-current portion - 3,189 9,564 209,214 - Accounts payable - 4,957 - - - - 8,146 9,564 209,214 - Financial assets and liabilities by valuation category Group 2024 Assets and liabilities measured at fair value through comprehensive income Financial assets measured at amortised cost Other financial liabilities measured at amortised cost Total carrying amount Fair value 2) Lease receivables - 25,701 - 25,701 25,701 Rent deposits - 1,214 - 1,214 1,214 Accounts receivable - 756,380 - 756,380 756,380 Other receivables - 163,844 - 163,844 163,844 Cash and cash equivalents - 813,518 - 813,518 813,518 Currency derivatives1) - - - - - Total financial assets 3) 4) - 1,760,657 - 1,760,657 1,760,657 Accounts payable - - 561,880 561,880 561,880 Other liabilities - - 59,607 59,607 59,607 Loan liabilities - - 229,730 229,730 229,730 Liabilities, acquisitions - - 5,456 5,456 5,456 Currency derivatives1) 408 - - 408 408 Lease liabilities - - 253,735 253,735 253,735 Total financial liabilities 3) 408 - 1,110,408 1,110,816 1,110,816 Financial assets and liabilities by valuation category Group 2023 Assets and liabilities measured at fair value through comprehensive income Financial assets measured at amortised cost Other financial liabilities measured at amortised cost Total carrying amount Fair value 2) Lease receivables - 46,675 - 46,675 46,675 Rent deposits - 978 - 978 978 Accounts receivable - 717,665 - 717,665 717,665 Other receivables - 129,105 - 129,105 129,105 Cash and cash equivalents - 547,897 - 547,897 547,897 Currency derivatives1) - - - - - Total financial assets 3) 4) - 1,442,320 - 1,442,320 1,442,320 Accounts payable - - 529,970 529,970 529,970 Other liabilities - - 42,819 42,819 42,819 Loan liabilities - - 221,920 221,920 221,920 Liabilities, acquisitions - - 5,031 5,031 5,031 Currency derivatives1) 1,669 - - 1,669 1,669 Lease liabilities - - 246,350 246,350 246,350 Total financial liabilities 3) 1,669 - 1,046,090 1,047,759 1,047,759 1) Assets and liabilities rela ting to currency derivatives are recognised in Other non-current receivables, Other receivables, Other non-current liabilities, Other liabilities and Accrued expenses. 2) Carrying amounts are a reasonable estimate of fair value. 3) T he Group’s exposure to various risks associated with the financial instruments is described in the section entitled Risks and risk management. The maximum exposure to credit risk as at the balance sheet date corresponds to the carrying amount for each category of financial assets stated above. 4) Financial assets pledged as security , see Note 25.
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Proact Annual and Sustainability Report 2024 75 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 24 CONTINUED Note 25 Pledged assets, contingent liabilities and commitments AP Accounting policies Provisions A provision is recognised in the balance sheet when there is a commitment as a consequence of an event that has occurred, and it is likely that an outflow of resources will be required to settle the obligation, and that a reliable estimate of the amount can be made. Where the timing of payments is material, the provision shall be measured at the present value of the payments expected to be required to settle the obligation. Contingent liabilities A contingent liability is present when there is a possible commitment that stems from events that have occurred and its existence is confirmed only by one or more uncertain future events. Contingent liabilities are not recognised as a liability or provision because it is not likely that an outflow of resources will be required or because the amount of the obligation cannot be measured with sufficient reliability . Disclosure is made unless the likelihood of an outflow of resources is extremely remote. Pledged assets Group Parent company 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Chattel mortgages 1 ) 7,730 7,468 - - Blocked resources2) 1,214 978 - - Security bank loan3) 802,395 748,750 96,672 96,672 Pledged accounts receivable 4) 11,839 11,045 - - Total pledged assets 823,178 768,241 96,672 96,672 1) Cha ttel mortgages refer to security placed for overdraft facilities in Finland amounting to SEK 7,730 thousand (7,468). 2) Security f or rental contract SEK 1,214 thousand (978). Frosen liquid funds are included in the item Other non-current receivables. 3) Shares in subsidiaries as collateral for bank loans of SEK 229,730 thousand (221,920) in Nordea. 4) Pledged for overdraft facility in Proact Czech Republic, s.r .o. Contingent liabilities The parent company has contingent liabilities relating to bank guarantees and other guarantees and other business arising during normal business operations. No significant liabilities are expected to stem from these contingent liabilities. Group Parent company 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Guarantees for Other guarantees subsidiaries1) 264 255 135,257 32,568 Total contingent liabilities 264 255 135,257 32,568 1) Other guarantees , subsidiaries relate to customer commitments of SEK 2,059.6 thousand, supplier guarantees of SEK 132,287.2 thousand and guarantees for leased vehicles of SEK 910.2 thousand. Commitments As at 31 December 2024, the company had no contracted commitments which had not yet been recognised in the financial statements that would result in significant future cash outflows, except for commitments relating to operating and support activities. For lease commitments, see Note 27. Borrowing Group 2024 Group 2023 Current Non-current Total Current Non-current Total Loans with pledged assets Bank loans - 229,730 229,730 - 221,920 221,920 Total loans with pledged assets - 229,730 229,730 - 221,920 221,920 Loans without pledged assets Accounts payable 561,880 - 561,880 529,970 - 529,970 Total loans without pledged assets 561,880 - 561,880 529,970 - 529,970 Total borrowing 561,880 229,730 791,610 529,970 221,920 751,890 Sensitivity analysis – Currency risk The Group’s profit is affected by factors such as changes in foreign exchange rates in relation to SEK. Many of the Group’s purchases are made in EUR and USD, while sales to end customers are made in local currency . A 10 per cent change in currency exchange rates would affect profit before depreciation as follows: Group 2024 Group 2023 Currency Change Effect on profit before depreciation, SEK thousand Effect on equity after tax, SEK thousand Change Effect on profit before depreciation, SEK thousand Effect on equity after tax, SEK thousand SEK / EUR +/- 10% 23,000 18,308 +/- 10% 27,071 21,548 SEK / USD +/- 10% 14,691 11,694 +/- 10% 27,698 22,048 Calculation of fair value According to IFRS 9, certain financial instruments must be measured at fair value in the balance sheet. Accordingly , fair value measurement disclosures are required by level in the following fair value hierarchy: Level 1) Quoted prices (unadjusted) on activ e markets for identical assets or liabilities. Level 2) Obser vable inputs for assets or liabilities other than quoted prices included in level 1, either directly (i.e. prices) or indirectly (i.e. derived from prices). Level 3) Da ta for assets or liabilities that are not based on observable market data (i.e. non-observable data). In category 2, the Group has receivables and liabilities relating to currency hedges at a net value of SEK 14,343 thousand as at 31 December 2024. Receivables of SEK 1,030 thousand (0) are recognised in Other non-current receivables and SEK 14,751 thousand (6,938) in Other receivables, SEK 1,438 thousand (1,669) in Other liabilities. Currency hedges are marked to market by making an early disposition of the hedge to determine what the forward price would be at maturity on the balance sheet date. For hedges that are, for example, EUR to SEK, the interest rate differential between Sweden and Europe is used for the remaining original maturity , giving the number of basis points deducted from the original forward price. The difference between the new forward price and the original forward price gives the market value of the currency hedge. The Group has no financial assets and liabilities in category 1 and category 3. No movements between the categories have taken place during the period.
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Proact Annual and Sustainability Report 2024 76 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 26 Supplementary disclosures to the statement of cash flows AP Accounting policies Cash and cash equivalents and short-term investments Cash and cash equivalents are deposited in bank accounts or invested in Swedish interest- bearing securities. Cash and cash equivalents belong to the category of loans and receivables. The maturity of investments included in cash and cash equivalents is a maximum of three months. Cash flow analysis The indirect method has been applied when drawing up the statement of cash flows. When apply- ing the indirect method, net payments to and from current operations are calculated by adjusting the net result for changes in operating income and expenses during the period, items which are not included in the cash flow and items which are included in the cash flow of investment and financing activities. Cash and cash equivalents comprise cash balances and immediately acces- sible holdings in banks and corresponding institutes, and short-term investments with a maturity from the acquisition date of less than three months and which are exposed to only a minimal risk of value fluctuation. Information concerning interest paid Interest received during the period totalled SEK 13,237 thousand (10,366) in the Group and SEK 11,800 thousand (8,868) in the parent company . Interest paid during the period totalled SEK 26,466 thousand (25,133) in the Group and SEK 12,749 thousand (17,027) in the parent company . Acquisitions of subsidiaries and businesses No acquisitions were made in 2024 or 2023. Acquisitions from non-controlling interests No acquisitions were made from non-controlling interests in 2024. In the first quarter of 2023, the company acquired an additional 14.7 per cent of the shares in Proact Czech Republic from non-controlling interests. Following the acquisition, the company holds 100 per cent of shares in the subsidiary . The purchase price amounted to CZK 17,922 thousand (SEK 8,427 thousand). Divestment of subsidiaries and businesses No divestments took place in 2024. The subsidiary in Lithuania was sold in 2023. The divestment had an impact of EUR 261 thousand (SEK 2,995 thousand) on cash flow. Acquisition of intangible fixed assets Intangible fixed assets worth SEK 1,177 thousand (968) were acquired during the year . Acquisition of tangible fixed assets Tangible fixed assets worth SEK 30,049 thousand (44,347) were acquired during the year . Dividends to non-controlling interests Dividends to non-controlling interests in partly owned subsidiaries in the Baltic countries totalled SEK 0 thousand (0) during the year . Cash and cash equivalents Group Parent company 31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023 Cash and cash equivalents 1 ) 813,518 547,897 - - 1) T he parent company’s cash and cash equivalents relate to the balance of the Group account and are recognised as liabilities to Group companies, amounting to SEK 419,615 thousand (408,950) at 31 December 2024. Blocked liquid assets The Group has total frosen liquid assets totalling SEK 1,214 thousand (1,222). Of these, SEK 1,214 thousand (1,222) are included in Other non-current receivables and relate to security for rental con- tracts. See Note 18. Transactions not settled in cash and cash equivalents There were no transactions settled by means of payment methods other than cash and cash equiva- lents in 2024.There were no transactions settled by means of payment methods other than cash and cash equivalents in 2023. Specification of cash flow from financing activities Changes not affecting cash flow 2024 Opening balance Cash flow Translation difference Acquisition- related Additional information Closing balance Non-current loan liabilities 221,920 - 7,810 - - 229,730 Other non-current liabilities 1) 914,495 -4,818 23,364 - 176,672 1,109,713 Current loan liabilities -2,374 - - - - -2,374 Other current liabilities 266,286 -131,860 4,179 - 114,714 259,319 Total 1,400,327 -136,678 35,353 - 291,386 1,590,388 Changes not affecting cash flow 2023 Opening balance Cash flow Translation difference Acquisition- related Additional information Closing balance Non-current loan liabilities 440,665 -224,158 5,413 - - 221,920 Other non-current liabilities 1) 881,548 17,162 4,394 - 11,391 914,495 Current loan liabilities -2,530 - - - 156 -2,374 Other current liabilities 275,393 -127,712 14,934 19,006 84,665 266,286 Total 1,595,076 -334,708 24,741 19,006 96,212 1,400,327 1) Non-cur rent interim liabilities, included in Other non-current liabilities in the balance sheet, are classified under working capital in the statement of cash flows. Note 27 Leases AP Accounting policies In Proact operations, the Group acts as both lessor and lessee. Proact as lessee Assets and liabilities arising from leases are initially recognised at present value. Lease liabilities include the present value of the following lease payments: • fix ed charges (including in substance fixed charges), after deduction of any benefits related to the conclusion of the lease to be received • v ariable lease payments dependent on an index or a price, initially measured using the index or price at the commencement date • amounts tha t are expected to be paid by the lessee according to residual value guarantees • the strik e price for an option to buy if the company is reasonably certain to exercise such an option. Right of use is depreciated on a straight-line basis over the right of use period. Short-term leases are leases with terms of less than 12 months, and low-value leases are leases for assets of less than EUR 5,000. In the statement of comprehensive income, the straight-line operating lease expense is replaced by an expense for the depreciation of the right-of-use asset and an interest expense related to the lease liability . Leases may contain both lease and non-lease components. As regards leases in respect of vehicles, the Group has opted not to separate different lease components, but instead to report these as a single lease component. Non-lease components are separated for other leases. Any options to extend the agreement or terminate it early must be included when calculating the lease term, if it is reasonably certain that these options will be exercised. A thorough evaluation of the financial benefits must be performed before making a decision to exercise an option. For most of the Group’s leases, the lease term is equivalent to the initial term of the lease. Leases contain- ing a buyout option are not treated as short-term leases even if the term is less than 12 months. Proact uses different discount rates depending on the terms of its agreements and the geo- graphical market. Lease payments are discounted using the interest rate implicit in the lease. If this interest rate cannot be easily determined, which is typically the case for the Group’s leases, the lessee’s incremental borrowing rate should be used, which is the rate that the individual lessee would have to pay to borrow the necessary funds to purchase an asset of similar value to the right-of-use asset in a similar economic environment with similar terms and conditions. The Group determines the marginal loan rate as follows: • w here possible, financing recently received from a third party is used as a starting point and then adjusted to reflect changes in the finance criteria since the financing was obtained. • adjustments are made f or the specific terms of the agreement, e.g. the lease term, country , currency and security . Proact is exposed to potential future increases in variable lease payments based on an index or a rate, which are not included in the lease liability until they take effect. When adjustments of lease payments based on an index or an interest rate come into force, the lease liability is remeasured and adjusted against the right of use. Lease payments are allocated between repayment of the liability and interest. The interest is recognised in the income statement over the lease term in a manner that results in a fixed interest rate for the lease liability recognised in each period. Proact as lessor In cases where Proact is the lessor under a finance lease, the transaction is recognised as a sale and a lease receivable. It comprises the future minimum lease payments and any residual values guaranteed to the lessor . Lease payments received are recognised as interest income and repay- ment of lease receivables.
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Proact Annual and Sustainability Report 2024 77 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Lease commitments Lessors – Finance leases Proact offers customers lease financing, hire purchase, via Proact Finance AB. Future amortisations plus interest will be received as follows: Gross investment Present value of future minimum lease payments Gross investment Present value of future minimum lease payments 31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023 Within 0-1 year 17,137 15,750 26,404 24,385 Within 1-5 years 11,860 11,303 23,624 22,900 After more than 5 years - - - - 28,997 27,053 50,028 47,285 Unearned financial income - 1,943 - 3,353 28,997 28,996 50,028 50,638 The total variable fee included in the profit for the year amounted to SEK 1,019 thousand (2,365). Finan- c ial revnues included in profit for the year amounted to SEK 2,626 thousand (2,931). At the end of the lease term, customers are offered the opportunity to purchase the underlying asset at the prevailing market price. Profit on the sale of underlying assets during the year amounted to SEK 0.2 million. Lessees–IFRS16 The following amounts related to leasing agreements are recognised in the balance sheet: Assets with right of use 31 Dec 2024 31 Dec 2023 IT equipment 94,694 89,220 Premises 80,835 88,180 Vehicles 71,556 58,190 Office equipment 6,308 9,629 253,393 245,219 Lease liabilities 31 Dec 2024 31 Dec 2023 Current 101,123 100,258 Non-current 152,612 146,092 253,735 246,350 Additional rights of use in 2024 amounted to SEK 112,401 thousand (11,564). The following amounts related to leases are recognised in the income statement: Depreciation on rights of use 2024 2023 IT equipment -55,506 -66,071 Premises -30,414 -30,584 Vehicles -35,255 -33,349 Office equipment -4,311 -6,494 -125,486 -136,498 Other items in the income statement 2024 2023 Interest expenses (included in financial expenses) -7,227 -6,713 Expenses related to short-term leases and leases of low-value assets - - Expenses related to variable lease payments not included in lease liabilities - - -7,227 -6,713 The total cash flow in respect of leases in 2024 amounted to SEK 143, million (118) consisting of amortizations and interest expenses paid. Note 28 Related party disclosures Proact IT Sweden AB has a customer contract with Axis Communications AB, co. reg. no. 556253- 6143. R evenue generated from this contract amounted to SEK 57.2 million in 2024, and Proact IT Sweden AB has an outstanding receivable of SEK 1.0 million due from Axis Communications AB as at 31 December 2024. All transactions with Axis Communication AB took place at market price. Axis Communication AB is an affiliate of Proact IT Group AB via Martin Gren, who has been a Board member at Proact IT Group AB since the 2017 Annual General Meeting, while also being founder , advisor and Chairman at Axis Communication AB. Note 29 Events after the balance sheet date In February it was announced that the Board of Directors of Proact IT Group AB (“Proact”) had ap- pointed Magnus Lönn as the new President and CEO of Proact, effective 1 March 2025. Magnus Lönn succeeds Jonas Hasselberg, who previously informed the Board of his resignation. On 17 March 2025, Proact IT Group AB acquired BlakYaks, a privately held UK consultancy , a lead- ing consultancy specialising in automated cloud-native services that designs, implements and man- ages Microsoft Azure platforms and solutions entirely through code. With deep Azure expertise and broad skills in GitOps, DevSecOps, container technologies and Infrastructure as Code (IaC), BlakYaks delivers cloud-native solutions tailored to each client’s specific needs with the aim of optimising costs, streamlining operations and accelerating the transition to a cloud-based architecture. Headquartered in London with around 50 employees, the company has a strong position in the finance and insurance sectors, with a focus on delivering value-added solutions to medium and large enterprises. BlakYaks’ revenue for the last twelve months (to February 2025) was GBP 5.6 million, with an EBITA of GBP 1.5 million. The company will become part of Proact’s Business Unit UK, where BlakYaks’ technical expertise and customer focus will remain unchanged - now with increased support from its new parent company . The acquisition strengthens Proact’s position as a specialist in hybrid cloud services and extends the company’s expertise in Microsoft Azure and cloud native technologies to create even greater cus- tomer value. As a key part of Proact’s growth strategy , the acquisition of BlakYaks aims to broaden the company’s expertise, partnerships and presence in key markets. The increasing demand for flexible, efficient and secure digital solutions is driving the need for advanced hybrid cloud and infrastructure services. By leveraging BlakYak’s cutting-edge expertise in Azure platforms, Kubernetes, container technologies, and modern cloud infrastructure automation and transformation, Proact will be able to offer its customers an even stronger and more competitive portfolio of next-generation infrastructure and platform solutions. The transaction consists of a fixed consideration of GBP 16 million on a cash and debt free basis and a contingent additional consideration of up to GBP 11 million, subject to the achievement of certain financial targets, to be paid over the period 2025-2027. At the time of publication of this report, no financial statements are available on which to base a detailed description of the acquisition. Therefore, no information is provided on the fair value of the assets acquired and the assets and liabilities assumed. Note 27 CONTINUED
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Proact Annual and Sustainability Report 2024 78 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Note 30 Equity AP Accounting policies Equity Costs attributable to the new issue of shares or options are included in equity as a reduction of the proceeds received. The buy-back of own shares is classified as own shares and recognised as a deduction from equity . Dividends Dividends proposed by the Board of Directors reduce distributable funds and are recognised as liabilities once the Annual General Meeting approves the dividend. Share capital The share capital item relates to the parent company’s share capital. Total number of shares According to the Articles of Association, the number of shares in the company must be no fewer than 15 million and no more than 60 million. A total of 27,401,658 shares in the company had been issued as at 31 December 2024. Total number of shares as at 1 January 2024 28,001,658 Cancelled repurchased shares September 2024 -600,000 Total number of shares as at 31 December 2024 27,401,658 No. of shares bought back Opening balance, bought-back own shares in own custody , 1 January 2024 720,210 Own shares bought back over the year 386,392 Own shares sold over the year -6,413 Cancelled shares -600,000 Number of bought-back own shares in own custody as at 31 December 2024 500,189 Other capital contributions Other capital contributions comprises capital arising from transactions with shareholders, such as premium issues. Hedging of net investment in foreign subsidiaries Exchange rate differences concerning net investment in operations in the United Kingdom, Germany and the US. Translation of foreign subsidiaries Other reserves consist of translation differences attributable to the translation of foreign subsidiaries. Specification of translation differences Group Opening balance, 1 January 2024 43,635 Change 2024 22,385 Closing balance, 31 December 2024 66,020 Retained earnings Retained earnings in the Group includes profit for the current and previous years, dividends to share- holders, buy-back of own shares, divestments of businesses and acquisitions from non-controlling interests. In December 2024, the parent company bought back a total of 386,392 shares on Nasdaq Stockholm at an average share price of SEK 130.67. A total of SEK 42,801 thousand was paid for the shares, which reduced retained earnings. A total of 500,189 own shares were held as at 31 December 2024. All shares held as own shares were fully paid as at 31 December 2024. Attributable to non-controlling interests There are no non-controlling interests as at 31 December 2024. Capital Proact’s managed capital consists of equity . The company’s objective is to use established strategies to achieve a good financial position and so prepare profits for shareholders by increasing the value of the managed capital. There are no external capital requirements other than those referred to in the Swedish Companies Act. Parent company Each share entitles the holder to one vote. All shares issued are fully paid up. A dividend of SEK 53,984 thousand, equivalent to SEK 2.00 per share, was issued in 2024 for the 2023 financial year . The Board of Directors will propose to the Annual General Meeting on 6 May 2025 the distribution of a dividend of SEK 2.40 per share for the 2024 financial year . The parent company has not issued any share options or conversion rights. Proposed distribution of profits The Board of Directors will propose to the Annual General Meeting the distribution of a dividend of SEK 2.40 (2.00) per share for the 2024 financial year . The Annual General Meeting has at its disposal (non-restricted equity in the par- ent company), SEK thousand: 2024 Retained earnings 364,238 Profit/loss for the year 269,812 Total non-restricted equity 634,050 The Board of Directors proposes appropriation of retained earnings as follows: Dividend, SEK 2.40 per outstanding share 1 ) 64,564 Carried forward 569,486 Total 634,050 1) T here are 27,401,658 registered shares in the company , of which, as at 31 March 2025, 607,689 shares are bought-back shares not entitled to dividends. The total of the dividend of SEK 64,563,526 proposed above may change, but to no more than SEK 65,763,979, if ownership of the number of bought-back own shares changes prior to the record date for dividends. Note 31 Earnings per share Earnings per share are calculated by dividing the result attributable to the shareholders in the parent company by the “Weighted average number of outstanding shares”. 2024 2023 Profit per share for the year attributable to the parent company’s shareholders 219,876 172,647 Weighted average total number of shares 27,401,658 28,001,658 Weighted average number of outstanding shares 26,987,862 27,466,985 Earnings per share before dilution, SEK 8.15 6.29 Earnings per share after dilution, SEK 8.15 6.29 Proact has a long-term performance share scheme which may give rise to dilution not exceeding 2.36 per cent. The company has repurchased its own shares held in its own custody , which affects the number of shares outstanding. Note 32 Acquisition On 17 March 2025, Proact IT Group AB acquired the privately held UK consultancy BlakYaks, a leading consultancy specialising in automated cloud native services that designs, implements and manages Microsoft Azure platforms and solutions entirely through code. With deep Azure expertise and broad skills in GitOps, DevSecOps, container technologies and Infrastructure as Code (IaC), BlakYaks delivers cloud-native solutions tailored to each client’s specific needs with the aim of optimising costs, streamlining operations and accelerating the transition to a cloud-based architecture. Headquartered in London with approximately 50 employees, the company has a strong position in the finance and insurance sectors, with a focus on delivering value-added solutions to medium and large enterprises. BlakYaks’ revenue for the last twelve months (to February 2025) was £5.6 million with an EBITA of £1.5 million. The company will become part of Proact’s UK business unit, where BlakYak’s technical expertise and customer focus will remain unchanged - now with increased support from its new parent company . The transaction consists of a fixed consideration of GBP 16 million on a cash and debt free basis and a contingent additional consideration of up to GBP 11 million, subject to the achievement of certain financial targets, to be paid over the period 2025-2027. At the time of publication of this report, no financial statements are available on which to base a detailed description of the acquisition. There- fore, no information is provided on the fair value of the assets acquired and the assets and liabilities assumed.
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Proact Annual and Sustainability Report 2024 79 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Certification The undersigned assure that the consolidated and annual financial statements have been prepared in accordance with international financial reporting standards IFRS as adopted by the EU, as well as with good accounting practice, and give a fair view of the Group’s and the parent company’s financial position and results, and that the Directors’ Report gives a fair summary of the development of the operations, position and results of the Group and the parent company, as well as describing significant risks and uncertainty factors facing the companies which form part of the Group. Solna, 31 March 2025 Anna Söderblom Chair Martin Gren Board member Annikki Schaeferdiek Board member Erik Malmberg Board member Thomas Thuresson Board member Magnus Lönn Chief Executive Officer Our audit report was submitted on 31 March 2025 Öhrlings PricewaterhouseCoopers AB Magnus Thorling Authorised Public Accountant
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Proact Annual and Sustainability Report 2024 80 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Opinions We have audited the annual accounts and consolidated accounts of Proact IT Group AB (publ for the year 2024 except for the corporate governance statement on pages 42-46. The annual accounts and consolidated accounts of the company are included on pages 35-79 in this document. In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of December 31 2024 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been pre - pared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of December 31 2024 and their financial performance and cash flow for the year then ended in accordance with IFRS Accounting Standards as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 42-46. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the general meeting of shareholders adopts the income state - ment and balance sheet for the parent company and the consolidated statement of comprehen - sive income and consolidated balance sheet for the group. Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company’s audit committee in accordance with the Audit Regulation (537/2014/EU) Article 11. Basis for the opinion We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014/EU) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Our audit approach Audit scope We designed our audit by determining materiality and assessing the risks of material misstate - ment in the consolidated financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, includ - ing among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the struc - ture of the group, the accounting processes and controls, and the industry in which the group operates. Materiality The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstate - ment. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Key audit matters Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. Audit report Report on the annual accounts and consolidated accounts To the general meeting of the shareholders in Proact IT Group AB (publ), co. reg. no. 556494-3446.
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Proact Annual and Sustainability Report 2024 81 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Particularly significant area Reporting revenue from system sales at the correct amount and in the correct period Revenue from the sale of systems constitutes more than half of the Proact Group’s reported turnover and in some cases takes the form of so-called composite customer agreements where hardware, software, services and support and maintenance are included in one and the same transaction. The price is normally set for the agreement as a whole and not per product or service. The agreements are therefore divided into sub-components where the revenue is allocated between each part of the agreement. The revenue for each sub-component is then recognised when the customer has gained control of the respective part. This means that the time of revenue recognition does not usually coincide with invoicing and payment from the customer. When management divides the agreement into sub-components, estimates and assessments need to be made regarding the stand- alone selling price of the different parts of the customer agreements. How the agreement is divided affects when the sales margins are recognised. As a result of the inherent complexity of revenue recognition and the element of estimates and assessments by management, we have assessed revenue from the sale of systems as a particularly significant area in the audit. For the above accounting principles, we refer you to Note 1 and Note 3 in the Annual Report for 2024. Impairment testing In the consolidated balance sheet, acquisition- related surplus values and goodwill are reported at a value of SEK 1,022 million and in the parent company’s balance sheet, shares in subsidiaries are reported at SEK 494 million. Goodwill and acquisition-related surplus values correspond to the difference between the value of net assets and the purchase price paid in an acquisition. The resulting goodwill is allocated between cash- generating units, which may differ from the level of the acquisition once it was completed as the new business is integrated into the group. Unlike other assets, there is no amortization of goodwill, but the item is tested annually for impairment or when there is an indication of an impairment need. Other acquisition-related surplus values are written off over the estimated useful life. When management tests cash-generating units for impairment, the reported values are compared with the estimated recoverable amount. Should the recoverable amount be significantly less than the reported value, the asset is written down to its estimated recoverable amount. The recoverable amount is deter - mined by calculating the asset’s value in use. When calculating the value in use, management must make assumptions about future growth and margin development. Future events and new information may change these assessments and estimates, and it is therefore particularly important for management to continuously evaluate whether the value of the acquisition-related intangible assets can be justified taking into account the assumptions made. Management’s calculation of the assets’ value in use is based on the next year’s budget and forecasts for the following four years. A more detailed description of these assumptions is provided in Note 15. Depending on the assessed market risk for the various cash-generating units, a discount factor of 10 – 11% (10 – 11%) has been used. Management has based its assumptions about future development on historical experience and analyses conducted in connection with the acquisitions. Impairment tests naturally contain a greater element of estimates and assessments from management, which is why we have assessed this as a parti - c ularly significant area in our audit. For the above accounting principles, we refer you to Note 1 and Note 15 in the Annual Report for 2024. How our audit considered the area of particular importance We have focused a significant part of our audit on evaluating Proact’s principles and underlying assumptions for dividing revenue from system sales into different parts. We have done this by, among other things, taking the following audit proce - dures: • Analysis of revenue during the year compared with the previous year. • Mapping and evaluating controls over revenue recognition. • Reviewing a selection of new major contracts and sales against the contract terms and Proact’s guidelines for assessing revenue recognition. • Testing on a sample basis that revenue has been recognized in the correct period and at the correct amount. • Evaluating assumptions in revenue recognition principles by comparing deviating margins for system sales. In our audit, we have paid particular attention to how management tests for impairment. We have, among other things, taken the following audit procedures: • Mapped Proact’s process for testing acquisition-related surplus values and goodwill and shares in subsidiaries for impairment. • Reviewed how management has identified cash-generating units and compared it with how management follows up on goodwill internally. • With the support of PwC’s internal valuation specialists, obtained market data on the discount rate used. • Evaluated the reasonableness of the assumptions made and performed sensitivity analyses for changed assumptions. • Evaluated management’s forecasting ability by comparing previously made forecasts with actual outcomes. • Based on materiality, evaluated the note information provided in the annual report regarding impairment testing. Other Information than the annual accounts and consolidated accounts Statements and consolidated financial statements This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1–33 and 83-88. Other information also includes the remuner - ation report that we obtained prior to the date of this auditor’s report. The Board of Directors and the Managing Director are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our audit of the annual accounts and consolidated accounts, our respons - i bility is to read the information identified above and consider whether the information is mate - rially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS Accounting Standards as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material mis - statement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company’s and the group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intend to liquidate the company, to cease operations, or has no realistic alternative but to do so. The Audit Committee shall, without prejudice to the Board of Directors responsibilities and tasks in general, among other things oversee the company’s financial reporting process. Auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts. A further description of our responsibility for the audit of the annual accounts and consoli - dated accounts is available on Revisorsinspektionen’s website: www.revisorsinspektionen.se/ revisornsansvar. This description is part of the auditor´s report.
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Proact Annual and Sustainability Report 2024 82 About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Report on other legal and regulatory requirements The auditor’s examination of the administration of the company and the proposed appropriations of the company’s profit or loss Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Proact IT Group AB (publ) AB for the year 2024 and the proposed appropriations of the company’s profit or loss. We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year. Basis for the opinion We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsi - bilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical respons - i bilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Responsibilities of the Board of Directors and the Managing Director The Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company’s and the group’s type of opera - tions, size and risks place on the size of the parent company’s and the group’ equity, consoli - d ation requirements, liquidity and position in general. The Board of Directors is responsible for the company’s organization and the administra - tion of the company’s affairs. This includes among other things continuous assessment of the company’s and the group’s financial situation and ensuring that the company´s organization is designed so that the accounting, management of assets and the company’s financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the on - going administration according to the Board of Directors’ guidelines and instructions and among other matters take measures that are necessary to fulfill the company’s accounting in accord - ance with law and handle the management of assets in a reassuring manner. Auditor’s responsibility Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assur - ance whether any member of the Board of Directors or the Managing Director in any material respect: • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit con - ducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appro - p riations of the company’s profit or loss are not in accordance with the Companies Act. A further description of our responsibility for the audit of the administration is available on Revisorsinspektionen’s website: www.revisorsinspektionen.se/revisornsansvar. This descrip - tion is part of the auditor’s report. The auditor’s examination of the ESEF report Opinion In addition to our audit of the annual accounts and consolidated accounts, we have also exam - ined that the Board of Directors and the Managing Director have prepared the annual accounts and consolidated accounts in a format that enables uniform electronic reporting (the Esef report) pursuant to Chapter 16, Section 4 a of the Swedish Securities Market Act (2007:528) for Proact IT Group AB (publ) for the financial year 2024. Our examination and our opinion relate only to the statutory requirements. In our opinion, the Esef report has been prepared in a format that, in all material respects, enables uniform electronic reporting. Basis for Opinion We have performed the examination in accordance with FAR’s recommendation RevR 18 Examination of the Esef report. Our responsibility under this recommendation is described in more detail in the Auditors’ responsibility section. We are independent of Proact IT Group AB (publ) in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the Esef report in accordance with the Chapter 16, Section 4 a of the Swedish Securities Market Act (2007:528), and for such internal control that the Board of Directors and the Managing Director determine is necessary to prepare the Esef report without material misstatements, whether due to fraud or error. Auditor’s responsibility Our responsibility is to obtain reasonable assurance whether the Esef report is in all material respects prepared in a format that meets the requirements of Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), based on the procedures performed. RevR 18 requires us to plan and execute procedures to achieve reasonable assurance that the Esef report is prepared in a format that meets these requirements. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engage - ment carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Esef report. The firm applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. The examination involves obtaining evidence, through various procedures, that the Esef report has been prepared in a format that enables uniform electronic reporting of the annual accounts [and consolidated accounts]. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the report, whether due to fraud or error. In carrying out this risk assessment, and in order to design audit procedures that are appropriate in the circumstances, the auditor considers those elements of internal control that are relevant to the preparation of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of expressing an opinion on the effectiveness of those internal controls. The examination also includes an evaluation of the appropriateness and reasonable - ness of assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a validation that the Esef report has been prepared in a valid XHMTL format and a reconciliation of the Esef report with the audited annual accounts and consolidated accounts. Furthermore, the procedures also include an assessment of whether the consolidated state - ment of financial performance, financial position, changes in equity, cash flow and disclosures in the Esef report have been marked with iXBRL in accordance with what follows from the Esef regulation. The auditor’s examination of the corporate governance statement The Board of Directors is responsible for that the corporate governance statement on pages 42-46 has been prepared in accordance with the Annual Accounts Act. Our examination of the corporate governance statement is conducted in accordance with FAR’s auditing standard RevR 16 The auditor’s examination of the corporate governance state - ment. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examina - tion has provided us with sufficient basis for our opinions. A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act. Öhrlings PricewaterhouseCoopers AB, Torsgatan 21, 113 97 Stockholm, was appointed auditor of Proact IT Group AB:s (publ) by the general meeting of the shareholders on the 7 May 2024 and has been the company’s auditor since the 2 May 2018. Stockholm 31 March 2025 Öhrlings PricewaterhouseCoopers AB Magnus Thorling Authorized Public Accountant This is an unofficial translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail.
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Five-year summary 84 Definition of key ratios 85 Four reasons to own Proact shares 86 The share 87 Shareholder information 88 About us and the year in brief Our business Sustainability Directors’ report Financial statements Additional information Proact Annual and Sustainability Report 2024 83 Additional information The Power Of Together – for a better future
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Proact Annual and Sustainability Report 2024 84 About us and the year in brief Our business Sustainability Directors’ report Financial statements Additional information Income statement (SEK million) 2024 2023 2022 2021 2020 Total revenue 4,864.2 4,847.3 4,756.8 3,525.0 3,633.1 EBITDA 509.6 457.9 473.2 348.6 369.6 EBITA 350.6 285.5 313.1 197.5 216.7 EBIT 295.5 229.8 260.6 166.2 182.1 Earnings before tax 278.0 218.3 244.2 151.9 167.7 Profit/loss for the year 219.9 173.1 191.5 117.2 132.3 EBITDA margin, % 10.5 9.4 9.9 9.9 10.2 EBITA margin, % 7.2 5.9 6.6 5.6 6.0 EBIT margin, % 6.1 4.7 5.5 4.7 5.0 Net margin, % 5.7 4.5 5.1 4.3 4.6 Profit margin, % 4.5 3.6 4.0 3.3 3.6 Equity, provisions and liabilities (SEK million) Equity 1,172.4 1,008.6 923.4 713.9 605.0 Balance sheet total 4,475.7 4,044.4 4,241.9 3,395.0 2,923.9 Capital employed 1,680.6 1,504.8 1,673.4 1,467.9 1,094.9 Net cash (+)/Net debt (-) 330.1 79.6 -227.0 -261 22.0 Financial key ratios Equity ratio, % 26.2 24.9 21.8 21.0 20.7 Capital turnover rate, times 1.1 1.2 1.2 1.1 1.3 Cash flow, SEK million 250.4 50.0 12.2 -26.3 126.0 Investments in fixed assets, SEK million 158.7 148.3 397.5 550.7 269.1 Return on equity, % 20.2 18.2 23.4 17.8 23.4 Return on capital employed, % 19.7 16.3 17.2 13.4 17.1 Dividend to Parent Company’s shareholders, SEK million 2) 54.0 50.8 41.2 41.2 41.2 Key ratios per employee Average number of employees on annual basis 1,112 1,160 1,160 1,027 973 Number of employees at year-end 1,137 1,171 1,258 1,178 1,022 Earnings before tax per employee, SEK thousand 250 188 211 148 172 Data per share 2024 2023 2022 2021 2020 Earnings per share (total number of shares), SEK 8.03 6.13 6.84 4.18 4.70 Earnings per share (outstanding shares), SEK 3) 8.15 6.29 6.97 4.27 4.80 Equity per share (total number of shares), SEK 42.79 36.02 32.84 25.38 21.50 Equity per share (outstanding shares), SEK 3) 43.58 36.97 33.49 25.88 21.93 Cash flow from current operations per share (total number of shares), SEK 18.20 19.00 15.83 10.84 16.72 Cash flow from current operations per share (outstanding shares), SEK 3) 18.54 19.50 16.14 11.06 17.05 Total number of shares at end of period 27,401,658 28,001,658 28,001,658 28,001,658 28,001,658 Total number of shares outstanding at end of period, 3) 26,901,469 27,281,448 27,454,851 27,454,851 27,454,851 Weighted average number of shares (total number of shares) 27,401,658 28,001,658 28,001,658 28,001,658 28,001,658 Weighted average number of shares (outstanding shares), 3) 26,987,862 27,466,985 27,454,851 27,454,851 27,454,851 Number of own shares held at end of period 500,189 720,210 546,807 546,807 546,807 Number of warrants at end of period - - - - - Share price as at 31 December, SEK 117.80 94.00 83.00 87.00 91.00 1) Key ratios recalculated after the split in May 2021. 2) The Board of Directors will propose to the Annual General Meeting that a dividend of SEK 2.40 per share be paid for the 2024 financial year. 3) P roact has a long-term performance share scheme which may give rise to dilution not exceeding 2.36 per cent. The company has also bought back shares that are in its own custody, which affects the key ratios and figures above. Five-year summary
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Proact Annual and Sustainability Report 2024 85 About us and the year in brief Our business Sustainability Directors’ report Financial statements Additional information Alternative key ratios This financial report refers to a number of key ratios. Some of these are defined in accordance with IFRS, while others are alternative key ratios and are not presented in accordance with applicable regulations and frameworks for financial reporting. The key ratios are used within the Group in order to help both investors and the executive to analyse Proact’s business. The key ratios used in this financial report are described, defined and justified below. Economic key ratios Definition Purpose Gross margin Gross profit as a percentage of total revenue. Gross profit in relation to total revenue shows profitability at gross profit level and provides profit comparability over time. EBIT Operating profit before net financial items and tax. EBIT provides a general view of total profit generated by the business. EBIT margin Operating profit/loss as a percentage of total revenue. EBIT in relation to total revenue shows operational profit - a bility and provides profit comparability over time. EBITA Earnings after depreciation of tangible fixed assets but before amortisation of intangible assets, net financial items and tax. EBITA gives a more correct view of which profit is generat - ed by the business when amortisation of intangible assets – which is affected extensively by assessment of the amorti - sation period – is excluded. Adjusted EBITA Earnings after depreciation of tangible fixed assets but before amortisation of intangible assets, net financial items and tax, adjusted for non-recurring items. Adjusted EBITA gives a more correct view of which profit is generated by the business when amortisation of intangible assets affected extensively by assessment of the amortisa - tion period, as well as non-recurring items that vary from regular operations, is excluded. EBITA margin EBITA as a percentage of total revenue. EBITA in relation to total revenue shows profitability at EBITA level and provides profit comparability over time. EBITDA Earnings before depreciation/amortisation (tangible and intangible assets), net financial items and tax. Besides amortisation of intangible assets, EBITDA also excludes depreciation of tangible assets, both of which are affected extensively by assessed depreciation/amortisation periods. EBITDA margin EBITDA as a percentage of total revenue. EBITDA in relation to total revenues shows profitability at EBITDA level and provides profit comparability over time. Equity per share Equity attributable to the parent company’s shareholders per share. The net asset value per share provides a guideline on how high or low a share is valued by the stock exchange in relation to the money in the company. Non-recurring items Items in the income statement that are non-recurring and have affected the profit and are important to be aware of in order to understand the underlying result. It is necessary to be aware of and be able to take into account expense items that deviate from normal business so that Proact’s development can be analysed and assessed correctly. Capital turnover rate, times Revenue expressed as a percentage of the average balance sheet total. This is used to show the efficiency of the use of total capital for the company. Cash flow Change in cash and cash equivalents. The cash flow shows the net amount of cash and cash equivalents generated and used within the company. Net cash/Net debt Cash and cash equivalents minus interest-bearing liabilities to credit institutions. To assess the ability to use available cash and cash equiv - alents to pay off all liabilities if they were to fall due on the date of the calculation. Net margin Earnings before tax as a percentage of total revenue. The net margin provides comparable profitability regard - less of the corporation tax rate. Organic growth Growth in net sales, excluding the net sales contributed to the Group by companies acquired during the year, plus cur - rency effects. Shows the underlying growth, i.e. growth excluding acquired growth. Earnings per share Earnings to the parent company’s shareholders per share. Earnings per share is used to determine the value of the company’s outstanding shares. Profit per employee Profit before tax divided by the average number of annual employees. This is a measure of productivity showing profitability per employee. Return on equity Earnings for the period after tax, expressed as a percentage of average equity. Return on equity shows what the company is generating in terms of profitability, returns, on capital invested by owners. Return on capital employed Earnings after net financial items plus financial expenses, expressed as a percentage of the average capital employed. For evaluating the profitability and efficiency of Proact’s capital employed. Debt levels Net debt in relation to EBITDA. Net debt/EBITDA is a theoretical measure of how many years it would take with current earnings (EBITDA) to pay off the company’s liabilities. Equity ratio Equity including minority interests as a percentage of bal - ance sheet total. The key ratio is an indicator of the company’s leverage for financing the company. Capital employed Balance sheet total minus non-interest bearing liabilities inclusive of deferred tax liabilities. Capital employed measures the company’s ability to meet the needs of the business in addition to cash and cash equivalents. Currency effects Net sales and profit for the period, translated into currency exchange rates for the previous year. Show underlying growth, i.e. growth excluding the effect of changes in currency exchange rates. Profit margin Earnings for the period after tax as a percentage of total rev - enue. The profit margin makes it possible to compare profitability including the corporate tax rate. Definition of key ratios Economic key ratios Definition Purpose
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Growing market with stable demand The market for hybrid cloud services continues to grow at a good pace, driven by a number of general trends: • Focus on digital transformation and innovation through IT • Use of hybrid clouds to increase speed, flexibility and availability • Greater focus on cybersecurity and data compliance • IT as a tool for achieving sustainability targets Market-leading position Proact has a comprehensive, competitive offering relating to hybrid cloud solutions for data centres, including consultancy and support services, as well as cloud services. With specialist expertise and extensive experience, Proact supplies sustainable, flexible and secure IT solutions that help customers reduce risks, lower costs and increase productivity. Attractive financial profile with strong cash flow Proact’s leading position in a non-cyclical and growing market enables good organic growth, which together with acquisitions, provides a growth rate exceeding that of the market. Economies of scale combined with continued streamlining and invest- ments in automation will in turn lead to increasing EBITA margins. With limited capital requirements and little working capital tied up, Proact generates a strong cash flow that can be used for acquisitions or direct returns to shareholders. Clear strategy for good future returns Proact has a well-developed strategy for achieving its financial targets that will enable continued good returns to shareholders. The focus on offering competitive cloud services is leading to a growing share of recurring revenue, which increases both the growth rate and the stability of earnings capac- ity. The emphasis on attracting and developing the company’s expertise ensures continued competi- tiveness, which is complemented by acquisitions in growth areas such as public cloud services. About us and the year in brief Our business Additional informationSustainability Directors’ report Financial statements Proact Annual and Sustainability Report 2024 86 Four reasons to own shares in Proact
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Proact Annual and Sustainability Report 2024 87 About us and the year in brief Our business Sustainability Directors’ report Financial statements Additional information Proact shares have been listed on Nasdaq Stockholm with ticker symbol PACT since July 1999. The share capital amounts to SEK 10,618,837, divided over 27,401,658 shares with a quotient value of 0.39. All shares entitle the holder to an equal share of the company’s assets and profits and entitle the holder to one vote at the Annual General Meeting. At a general meeting, every individual entitled to vote may vote for the full number of shares owned and represented by the shareholder without any restriction on voting rights. Stock exchange In 2024, 14,652,399 shares were traded at a volume weighted average price (VWAP) of SEK 124.2. The share price at the beginning of the year was SEK 92.30 and at the end of the year SEK 117.80. Ownership structure Proact had 7,989 shareholders as at 31 December 2024, most of whom were private individuals with small holdings. The number of shareholders with a holding of more than 20,000 shares totalled 59, with the largest individual shareholders Number of shares per shareholder Holding Number of share- holders Percentage of share- holders Number of shares Percentage of share capital 1–500 6,415 80.3% 724,863 2.6% 501–1,000 719 9.0% 536,459 2.0% 1,001–5,000 687 8.6% 1,449,102 5.3% 5,001–10,000 77 1.0% 538,065 2.0% 10,001–20,000 32 0.4% 438,142 1.6% 20,001– 59 0.7% 23,715,027 86.6% Total, 31/12/2024 7,989 100.0% 27,401,658 100.0% Shareholders as at 31 December 2024 Number of shares Percentage of capital and votes Aktiebolaget Grenspecialisten 3,400,000 12.4% Alcur Fonder 2,319,273 8.5% Handelsbanken Fonder 2,150,520 7.8% Fidelity Investments (FMR) 1,606,531 5.7% Länsförsäkringar Funds 1,303,160 4.8% Livförsäkringsbolaget Skandia 1,109,203 4.0% Canaccord Genuity Wealth Management 975,241 3.6% Avanza Pension 796,196 2.9% Polaris Management A/S 538,498 2.0% FE Fonder 533,650 2.0% Other 12,669,386 46.3% Total 27,401,658 100.0% Key ratios per share ¹) 2024 2023 2022 2021 2020 Earnings after tax, SEK ²) 8 .15 6.29 6.97 4.27 4.80 Share price, 31 December, SEK 117.80 94.00 83.00 87.00 91.00 Dividend, SEK ³) 2. 40 2.00 1.85 1.50 4.50 Direct returns, % 2.0 2.1 2.2 1.7 1.6 Equity, SEK 4) 4 3.58 36.97 33.49 25.88 21.93 Average number of shares, thousands 26,988 27,467 27,455 27,455 27,455 Number of outstanding shares at end of period, thousands 26,901 27,281 27,455 27,455 27,455 Number of bought-back own shares at end of period, thousands 500 720 547 547 547 1) K ey ratios recalculated after the split in May 2021. 2) C alculated on the basis of the weighted average number of outstanding shares. There is no dilution in the periods reported above. Proact has a long-term performance share scheme that may involve dilution not exceeding 2.36 per cent. 3) T he Board of Directors will propose to the 2025 Annual General Meeting that a dividend of SEK 2.40 per share be paid for the 2024 financial year. 4) Based on shares outstanding at the end of the period. Kr % Utdelning per aktie, kr Direktavkastning, % Föreslagen utdelning 2024 0 1 2 3 4 5 20242023202220212020 0 1 2 3 4 5 0 1 2 3 4 5 20242023202220212020 0 1 2 3 4 5 SEK % Dividends per share, SEK Direct returns, % Proposed dividends 2024 Dividends Swedish institutional investors 33% Foreign institutional investors 24% Swedish private individuals 18% Other 16% Unknown type of owner 9% Svenska institutionella ägare 33% Utländska institutionella ägare 24% Svenska privatpersoner 18% Övriga 16% Okänd ägartyp 9% Distribution of ownership, % of capital (Monitor)being Aktiebolaget Grenspecialisten with a holding of 3,400,000 shares and Alcur Fonder with 2,319,273 shares. At the Annual General Meeting held on 7 May 2024, the Board of Directors was authorised to acquire up to 10 per cent of the company’s shares by the next Annual General Meeting. As at 31 December 2024, 97,150 shares have been bought back under this authorisation. The company holds 500,189 shares in its own custody as at 31 December 2024. As far as the Board of Directors is aware, there are no contracts between shareholders requiring specific information in accordance with the Swedish Company Accounts Act. Shareholder value Shareholder value arises when the company is positioned correctly and has long-term profitability. Proact upholds its creation of long-term profitability for its shareholders by constantly focusing on good business development with improved profitability within the Company and reinforcement of the Company’s market-leading position as a specialist and independent integrator in Europe. The share Share price development 0 1 000 2 000 3 000 4 000 5 000 0 40 80 120 160 200 2024202320222021202020192018 Kr Antal aktier 1000-tal Proact (Totalavkastning) OMXSGI (Indexerat) Omsatt antal aktier i 1000-tal per månad Källa: Modular Finance 0 1,000 2,000 3,000 4,000 5,000 0 40 80 120 160 200 2024202320222021202020192018 SEK Number of Shares, 1,000´s Proact (Total return) OMXSGI (Indexerat) Number of shares traded, 1000’s per month Source: Modular Finance
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Proact Annual and Sustainability Report 2024 88 About us and the year in brief Our business Sustainability Directors’ report Financial statements Additional information 2025 Annual General Meeting The Annual General Meeting will take place at 4:00 p.m. on Tuesday, 6 May 2025 at Meeting Lab, Gate 01, Frösundaviks Allé 1, in Solna. The Board has decided that shareholders should also be able to exercise their voting rights by post before the meeting. Shareholders who are entered in the shareholder register kept by Euroclear Sweden on Friday, 25 April 2025 and who have registered as described below shall be entitled to participate in the proceedings of the Annual General Meeting. Shareholders whose shares are registered to administrators must therefore temporarily register under their own names in the shareholder register to be entitled to participate in the proceedings of the Annual General Meeting, either personally or through a representative. Such re-registration must be completed in plenty of time prior to Friday, 25 April 2025. Registration Shareholders wishing to attend the Annual General Meeting in person must notify the company of their intention to attend no later than Tuesday, 29 April 2025. Registration will take place by post, telephone or email: • Post: Computershare AB, “Proact IT Group AB:s Annual General Meeting”, Box 5267, 102 46 Stockholm, Sweden • Telephone: +46 (0)771 24 64 00 • Email: info@computershare.se Postal voting Shareholders wishing to participate in the Annual General Meeting by means of postal voting must register by casting their postal vote no later than Tuesday, 29 April 2025 so that the postal vote is received by Computershare no later than 29 April. The postal voting form available on the company’s website, www.proact.eu, must be used for postal voting. Completed and signed postal voting forms can be sent by post to Computer s hare AB, “Proact IT Group AB Annual General Meeting”, Box 5267, 102 46 Stockholm or by e-mail to info@computershare.se. Future information Interim report, Q1 ...................... 6 M ay 2025 8 :00 a .m. Annual General Meeting ........... 6 May 2025 4 :00 p .m. Half-yearly report, Q2 ............... 14 July 2025 1 :00 p .m. Interim report, Q3 ................24 October 2025 8 :00 a .m. Year-end report ................ 10 February 2026 8 :00 a .m. Further information Magnus Lönn, President and CEO Tel: +46 8 410 666 00 magnus.lonn@proact.eu Noora Jayasekara, CFO Tel: +46 8 410 666 00 noora.jayasekara@proact.eu www.proact.eu Shareholder information
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Proact IT Group AB Frösundaviks Allé 1, Box 4061, SE-169 04 Solna, Sweden Telephone +46 8 410 666 00 info@proact.eu www.proact.eu