Proact It Group Aktie

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes. That's a relevant interpretation, yes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

They are representative. Yes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Daniel, please.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yes. Sorry, please, Paul.

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

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

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

Welcome, everyone, to Proact Q2 report. I am Magnus Lönn, I am the CEO and President of Proact. And for you who doesn't know me, I have been in the company for 5 years -- 4 years. And before I became President, I was nominated first of March this year. Before that, I was running as a Deputy Group CEO, and I've been running our Nordic & Baltics business.

So I am here today to give you an introduction of our Q2 results, together with Noora. And we will do, as usual, that I will give you a short introduction for you that are new to our company, what we're doing and how we are generating our money. And for you that knows our company well, I hope that this will also be a good reminder of how we act as a company.

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

So we at Proact, we are extremely good in taking care of our customers' data and work with data in all the forms that are available when it comes to IT and technology. This is our core focus, and we have been doing this for over 30 years. And if you think about this, today, data is the sort of key for every company. So it doesn't really matter what industry that you are in or what company that you are running. At the end of the day, you need to have an IT infrastructure, and you generate a lot of data both as individual but also as a company. And this is what we have been working with for 30 years and we are really expert in this field.

And of course, we have sort of expanded around that, but our core business is related to data. We are today having a turnover of roughly SEK 5 billion and as you can see to the right here, we have been on a growth journey, both from a sort of profit perspective, but also on the revenue the last couple of years and this is a good trajectory that we are on. We are 1,200 expert and dedicated employees that are working with this. And as you can see on the colorful map here, our geographical presence is within the Northern Europe. Which in the red, I would say, in the Nordic & Baltics, we have sort of our main footprint where we started 30 years ago and then we have expanded out of that.

We are having a revenue split of around half of our revenue coming from our services, and half of that is coming from our system sales. So that is the sort of a key thing.

We can flip to the next slide, Christopher. From an operational perspective, we have divided our company into 4 clear profit and loss units. And we have the first one, Nordic & Baltics, this is around half of our companies. So this is the far biggest business unit that we have. And then follow that, we have U.K. and then we have 2 others, West, which consist of Netherlands and Belgium. And then we also have Central, which consists of Germany and Czech.

In our business units, we are also having our factories net where we are creating and generating the services that we provide our customers. And now we'll talk more about what type of services further on. So we have 4 different delivery hubs, which are collaborating. We have our own stock that is up and running 24/7, and this is how we sort of have operated and divided our company.

So if you take the next slide here. So Proact, as a company, we have 4 distinct and clear revenue stream. And I will walk them through and give you a little bit more highlights around them, so you get a better understanding of what we are doing. Starting from left, with our system sales. This is sort of the core of Proact, the foundation that were founded 30 years ago and that we are still doing and is very, very good at. This means that we are providing our customers with system advice recommendation of how they should build their modern data infrastructure.

In reality, this means that we are working with the sort of best brands in the world, and we are targeting large and enterprise customer in this segment. And then we are helping them sizing and delivering the system to them that they need in order to run their company. So what we are doing at Proact is actually, we are working with the things that you don't see, but you will, for sure, notice if the IT system is not up and running. And this is what Proact is doing on a core basis.

Our System business. Here, we are doing quite large deals, and I used to say that our system business is actually a recurring business. And with that, I mean that it is very sell-down that a customer leaves us. We have very high customer satisfaction. And the system that we are providing our customers are part of the core IT infrastructure. And if you think about that, it's very seldom you sort of do a heart transplantation and exchange your sort of system, which we are providing them. But it's more likely that the customer also expands their current system environment. And after some years, they also do a tech refresh. So from that perspective, I see our system business is very sort of reoccurring.

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

The contract is often very long. It's 3 to 5 years normally. And that means that over the time, we have a really tight and close collaboration with our customer. So our system and our support business is really tied together. At the same time, as I mentioned earlier, we have 4 different hubs where we are delivering services. And the services that we are delivering is actually sort of the same as we are selling to the system. That means that we can provide our customer with sort of modern, highly infrastructure as a service. Meaning that our customer, they don't need to have their own staff. They don't need to have their own competence. We can provide them the same thing as a service.

And also given what's happening also around the world with all the uncertainty and things like that, we see a lot of customers that are appreciating working with a European service provider because there are a little bit too much uncertainty happening now when it comes to cloud and American companies. So I would say that our managed cloud service is a very good add-on in our portfolio.

And secondly, and I will not, for sure, say that it's the lease, but it's really our consultancy service. Here, we have super skilled talents and consultants that are working very closely with our customers, providing knowledge and technology of how to design a modern infrastructure. All of these 4 different revenue streams are really tied together and they're also collaborating, meaning that, it's very often that we have a customer that maybe to start with a system deal and then they expand to a managed cloud service or a consultancy service.

We can move to the next slide. As I mentioned also in the beginning, I will say that Proact is probably in a better position today compared to 30 years ago when we -- the company was founded. In what is really, really key here is the data. And if you think about that, we, as individuals, are generating more and more data. Our society is sort of built upon IT and infrastructure. And every company also are using the data to do business. We want to do more analysis. We want to do more sort of refining of our customer data to understand more. And this is exactly what Proact is working with providing the sort of the storage and IT infrastructure that enables our customer to do their business.

And then secondly, this is also something I want to highlight and something that we discuss a lot with our customer is security. As you all now know, cybersecurity is a real threat that are happening more and more and more. This is becoming more and more complicated. The best way to protect yourself around cybersecurity is to protect your data and the most sort of basic fundamental that you can do which more and more customers actually are realizing is that you are taking a backup of your data and store that in a safe place. And if you take a backup of your data, then you also need storage, and this is exactly what Proact is working on. And then we are helping a lot of our customers also to make sure to size their IT infrastructure and also design it so that when it happens, then you also can have a quick restore of the data. And that, I would say, is very key.

And the third trend that is also driving our growth is AI. And if you think about this, is that in order to get value out of AI, you need to train your model. And in order to do that, you need a lot of data. And this is the key where Proact has been working with for 30 years. So we are extremely good in sort of how to structure and build environment so that you can actually add on an AI capability and work on the data that you have. And this is an increasing demand that we are seeing from our customers. So I would say that the underlying trend in the business where we are positioning is very, very strong. So the market is for sure there.

And on top of that, I also would like to just emphasize this that in today's uncertainty, especially when Trump in the U.S. and the sort of uncertainty, we have also a lot of dialogues with our customers around cloud strategy and what is the best on things like that. So many companies are also rethinking about how is our long-term strategy. Is it cloud? That is our first? Is it really a smart thing to put all our critical business data in the American cloud provider or should we rethink this? And this is the sort of day-to-day dialogues that we have with our customers. And here, I think we, as product, have a good add-on as being a trusted local European partner.

Next slide, please. This is my favorite slide, and I will not go into the detail of it. But every company, as I said in the beginning, they are in a need for sort of data and modern IT infrastructure. And if you look into the blue colors here, it doesn't really matter if you store your data on-prem as an infrastructure because then we can help you. Or if you sort of have a private cloud that is sort of a purpose-built cloud that you only can access. We can also help you around that. Or if you're working with some other public cloud providers like Azure or Google or things like that. We at Proact are super good storage and data and it doesn't really matter for us where the data is allocated. We can help our customers around that.

And then as I mentioned earlier, on top of that, if you want to work with AI, the first thing you need to do is secure your data and hence, AI infrastructure that is sort of a very good add-on on what we are doing at Proact. And if you want to use modern software development with cloud native and containers, that is exactly where we have a lot of competence. For example, in our consultancy company, Conoa and BlakYaks that we acquired during last quarter. And then on top of that, as I said, everything is actually related to data protection backup and recovery, security operations and everything, and then it all starts with data.

And then we, as a company, we have the possibility to provide this both as a service or if you want to buy it as a system. And we could have done nothing around this if we wouldn't have extremely skilled staff that are really knowledgeable around this. And this is what we are doing, and this is how Proact earns money.

So it is, I think it's a sort recap and quick repetition of how we at Proact our earning our money and what our core business in infrastructure is.

So with that, I would take the next slide, Christopher. And then talk and walk more into the Q2 highlights here. So all in all, as you can see, we released our report for 40 minutes ago. We made a revenue of SEK 1.2 billion and EBITA result of SEK 76 million, and that resonates in an EBITA margin of 6.5%. And Noora will walk through some of the details, but I just want to highlight a part of it here.

As I mentioned, in Q1, we have actually done exactly what I said. We have had churn, and we have some performance issues, mainly related to Central and West. Hence, we have during the quarter initiated a group-wide action program that we are being executed as we speak. This program is really focusing on addressing some of the underlying things. So we are looking to skills review, refocus our sales effort. And far most, we are actually looking to building a more efficient organization. So this is exactly what I indicated in Q1 and what we now are doing in Q2.

I also really would like to stress that in the Nordic region, for example, and in combination with U.K., we see a strong result. We have continued to grow in that area. And as you can see, and as I mentioned in the beginning, Nordic & Baltics that is more than half of our company. So even if we now have some performance issue that we are being addressed, we have more than half of our company that is growing. During the quarter, I'm also super glad that we launched a new service related to AI. So we added AI capability to our Proact Hybrid Cloud. That means that our customer can directly access advanced AI workloads in our hybrid cloud environment. This means that our customers, they don't need to invest millions in setting up their own AI infrastructure.

Instead, they can buy this directly from us as a service. This is also super dedicated to customer working in a regulated environment, meaning that we are providing this in a sovereign cloud, meaning that our customers know where the data is. It's not outside EU. And this is also an increasing demand that we see from our customer that we can help and provide them.

Also worth mentioning during the quarter was that we was named Enterprise Partner of the Year by NetApp. This is offshore a true testimony to our skills and experts that we have in the company. And the other 2 bullets here, I really would like to stress them because they -- even if they maybe are more into sort of administrative that we are sort of getting a decision from our Annual General Meeting to initiate a share back program and we also cancel some shares. This is true tool that are really explaining the sort of the strength positioning that we are doing a buyback program. We are working and having dividend as a company.

And as we did in Q1, we are also investing and buying an acquisition of company like BlakYaks, for example, so all in all, with this, we sort of have a super strong position that we sort of -- are leveraging and are working.

So all in all, I would say that we are focusing on what is working very well and working with enhancing that. In parallel that we have initiated sort of strong actions to work with the areas that we see that we can improve. So I think all in all, Q2, given where we are, I think it's a solid result.

So with this, I think, Noora, I hand it over to you to walk you through to some of the financial details from our business units and then we'll wrap up with some questions and summary at the end.

Thank you, Magnus. Okay. Turning to the next slide. Revenue in the second quarter reached as Magnus said, SEK 1.17 billion, a decrease of 7.9% driven by good performance in the Nordic & Baltics and U.K., offset by lower performance in business units West and Central. The decline in Central was driven by significantly lower system sales compared to an exceptionally strong comparison period.

Organically, revenue declined with 7.2%. System sales amounted to SEK 641 million, corresponding to a decrease of 10.7% for the same -- with the same dynamics as total revenue. Services revenue amounted to SEK 530 million, a decrease of 4.3%. Overall, the service business developed weak this quarter.

On the next slide. Annualized recurring revenue amounted to SEK 1.7 billion in the second quarter, a decrease of 2.8% compared to Q2 2024. New cloud service agreements amounted to SEK 141 million in the second quarter compared to SEK 133 million last year. Despite new contract signings, total cloud service revenue decreased by 5% to SEK 272 million, primarily due to contract terminations and customer churn in West and Central regions. Nordic & Baltics and the U.K. showed positive development, but we were unable to fully compensate for the decline.

Next page, please. Adjusted EBITA amounted to SEK 76 million, mainly due to lower revenue in the Services business and reduced gross margin. Business Unit Nordic & Baltics stands out this quarter with an EBITA increase of SEK 9.4 million. Central saw a decline of SEK 21 million following an exceptionally strong comparison period. West also decreased by SEK 9.8 million, while U.K. remained largely flat.

We have taken strong measures to reverse the negative trend, as Magnus was mentioning. Both through initiatives to increase revenue and revenue and through group-wide actions to strengthen profitability, particular focus on West and Central where the challenges are the greatest. Further, the cash flow and cash position. Our net cash position at the end of the second quarter amounted to SEK 100 million compared to SEK 330 million at year-end. Total cash flow for the first 6 months was minus SEK 222 million with an operating cash flow of SEK 182 million.

The year-on-year decline in operating cash flow was mainly due to lower operating profit. Cash flow from investing activities amounted to minus SEK 241 million, largely driven by the acquisition of BlakYaks in March, along with continued investments in both tangible and intangible assets. Cash flow from financing activities totaled minus SEK 163 million including a dividend payment of SEK 64 million, lease amortizations of SEK 72 million. And as Magnus also mentioned, repurchase of own shares amounting to SEK 32 million.

Despite these cash outflows, we remain financially strong and continue to invest in strategic growth initiatives while maintaining capital discipline. Now some details for our business units, starting with Nordic & Baltics. Revenue in the Nordic & Baltics grew by 3.6% to SEK 672 million in the quarter. Mainly driven by strong performance in Cloud and Support Services. This was partly offset by a decline in consulting services. Systems revenue increased by 2.9% to SEK 453 million, supported by several large deals.

Service revenue grew by 5% to SEK 219 million with Cloud Services as the main driver. Adjusted EBITA increased by 16.3% to SEK 67 million. Corresponding to a margin of 10%, clearly above the group's financial target of 8%. The improvement was mainly due to the growth in the services business and continued good cost control. Note that adjusted EBITA excludes nonrecurring costs of SEK 4.4 million related to the ongoing action program. All in all, Nordic & Baltics continues to deliver solid and consistent performance.

Further to Business Unit, U.K. on the next slide. In the U.K., revenue increased by 18.7% to SEK 212 million, supported by a strong development in both systems and service sales, including positive contributions from BlakYaks. System revenue grew by 20.8% to SEK 101 million, while service revenue was up 16.8% to SEK 110 million. Consulting Services increased by over 150%, mainly driven by BlakYaks. Cloud Services also showed solid growth of 5.7%. Adjusted EBITA came in at SEK 12 million, corresponding to a margin of 5.8%. BlakYaks contributed SEK 10 million to EBITA with an exceptionally strong margin of over 40%. Note that adjusted EBITA excludes nonrecurring costs of SEK 0.8 million.

Business Unit West on this next slide. Revenue in West decreased by 14.4% to SEK 176 million, reflecting lower activity in both the systems and services business. System revenue declined slightly by 2.3%, while services revenue fell by almost 18%. The decline in consulting services was notable, down 37% due to resourcing challenges. Adjusted EBITA was negative at SEK 2.8 million, corresponding to a negative margin of 1.6%. Although cost savings were implemented, they did not fully offset the drop in revenue. We have initiated targeted actions to reverse the negative trend to a cost of SEK 4 million, which are excluded from adjusted EBITA.

Lastly, Business Unit Central on this next slide. Revenue in Central declined by 45.2% to SEK 146 million, compared to a very strong performance in the same quarter last year, driven by a few large system deals. Hence, System revenues fell by 65.7% and service revenue declined by 18.1%. Adjusted EBITA amounted to SEK 3.4 million with a negative margin of 2.4%. The decline is mainly due to the significant drop in revenue and cost base not fully aligned with current market conditions. Several improvement measures are in progress aiming to stabilize performance going forward. Adjusted EBITA excludes nonrecurring costs of SEK 11.5 million related to the action program.

On the next slide, our financial targets. As mentioned, we had an organic decline this quarter, albeit compared to a strong quarter last year. Measured as the last 12 months, growth is now at minus 1.6%. Hence, we still have a way to go, reaching our target of 5% organic growth and an additional 5% growth via acquisitions. Adjusted EBITA margin last 12 months was 6.6%. As already mentioned, we have taken action to move back towards the long-term target of 8%. As I also previously mentioned, we are in a net cash position, meaning that our leverage is well below the set level of 2x EBITA. Return on capital employed is at 13.2% for last 12 months, where the decline is mainly attributed to the lower result. This concludes the financial overview of the second quarter.

Back to you, Magnus, for some final comments.

Super and thanks, Noora for guiding us through the financial detail. So I just want to reiterate here that I mean we have a clear strategy here. And as I said, in Q1, we are really focusing on what is working and then we very quickly where we need to improve. And this is what exactly we have done during the quarter. I see that we, as a company, have a super strong position in the market, and I would say that it's actually strengthening given the sort of demands and the trends that are now.

And here, I think we have a very good position, especially when we are a local European trusted partner. As you can see here, also our sort of guiding star here are in the Nordics where we continue to sort of grow and show the way. I think this is a combination of that we have a strong customer base and a really strong focus on profitability and trying to do as efficient as possible.

During the quarter, we have actually implemented actions that also will, over time, improve our other business units. And as you saw here in the U.K., we are seeing really strong performance. And especially glad that BlakYaks has gotten such a good start within our group. Then we continue to focus on business values and execution. And then over time, you will see that the long-term growth and that I think we, as a company, have a really strong position. And together with a committed team, and so I'm really, really looking forward to talk more around that in coming quarters and reports, but I think for now, let's open up with some questions.

Daniel, it's glad that you are first out here leading the way.

I have a question on the cost reductions here in Central and West. Can you say how many people it will roughly expose?

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

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

I think if you're looking into specific maybe Central and West, I think you should expect that we will have an improvement, but it will be weak and the impact and effect of what we are now executing, that will take some further quarters to see a full effect of that. In the other business units, Nordic & Baltics and U.K., we are sort of investing and accelerating. So we sort of compensate on that.

Okay. I see. That's clear. And then a question on the German business here. Is that up for sale from your end? Or can you really recover that business into a stronger margin by shrinking the business from here?

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

Okay.

I think what we see short term is that the actions that we're doing, that is what we will continue focusing upon.

I see. Okay, that's clear. And then on BlakYaks, you mentioned some numbers here in Q2 look very strong, both on sales and margins, obviously. Do you see any early signs of cross-selling between the groups? Or is too early?

That's a good point that you raised, Daniel. And exactly -- and during the quarter here, I think we have seen a several cases coming in going on both direction and this is exactly what we sort of have planned and what we want to enhance and focus. So instead of putting a lot of focus on creating integration activities. Instead, we have spend that time and focus on sales integration, meaning that we should sort of open up our books and sort of provide and give our customers more access to new technology and new offerings from our side. And maybe that is a contrast compared to the way that we have done it in Germany, where we maybe focus more on integration and things like that. So roughly, we are turning that around, and Maria and the team in Germany are working really hard on that. And I think over time, we will see improvements also in Germany.

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

Yes. I mean, absolutely. And I think I said that also in Q1. When it comes to M&A, we are, for sure, looking into that actively. But we are sort of quite picky on which target that we are seeing and foremost, Nordic & Baltics and the U.K. since we sort of feel that we have the sort of momentum in the business that is a very high likely that, that will be the next place of our M&A. Then in Central and West long term, I see that we will also get back to an acquisition base there. But -- we have some more work to do and also to prove that our profit will be going in the right direction first. You need to have a sort of a proper home before you look into acquisitions. Otherwise, you create more problem for yourself.

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

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

Yes, I see. And then a final question here on the financial targets. As you showed in the presentation, you are a bit below both top line growth, margins and return on capital at the moment, and you are addressing these with actions, but how do you prioritize coming back to the targets? I mean, for me, it looks like you're prioritizing return on capital and margins before growth given the cost reductions you do. But how do you think about them? And when is it reasonable to get back meeting these targets, all 3? How many years out is reasonable to expect?

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

And secondly, I also want to stress that as it is of today, Nordic & Baltics, that is more than half of the company. So, it's sort of, even if we have 4 business units, they are not sort of equally strong when it comes to impact and so forth.

Yes, that's clear. And then the last part, when in time or how many years do you think it could take to meet all the 3 targets?

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

Good. Do we have any other questions on the call here? Good. If then, I will wish you all a super pleasant and have a really, really nice summer. Me and Noora and the full team are really looking forward to talk to you more again in our upcoming Q3 that probably will be here quicker than we think, given the summer and everything. So once again, thank you for listening in and looking forward to talk more shortly. Bye-bye.