Proact: Consulting revenues behind small miss - ABG

- 9% organic growth (ABG 9%) and EBITA -6% vs ABG
- Positive development in all markets, Systems grew 20% organically
- Small negative revisions, share flattish

Q3 details
Sales SEK 1,132m (-2% vs ABG 1,156m, no cons). Adj. EBITA 79m (-6% vs ABG 85m), Adj. EBITA margin 7.0% (ABG 7.3%). Organic sales growth 9% (vs ABG 9%), of which system sales grew 20% (ABG 12%) and services -2% (ABG 7%). Ok OCF at SEK 83m (133m in Q3’23).

Systems stronger, services weaker due to consulting
Positive development in all end markets, while consulting revenues caused the slight earnings miss. Not entirely unexpected given how weak the consulting market is. -1% organic cloud revenue growth also weighs somewhat. Systems business bounced to strong growth, and gross margin slightly above expectations. Positive demand comments across Europe despite macro, as customers need to digitalise, strengthen cybersecurity and increase the use of AI. Also positive on M&A.

Estimates slightly down
Small negative estimate changes most likely, although weak consulting revenues in a Q3 should not be extrapolated too much given that it is a small revenue quarter.Share relatively flat today.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/proact/Equity-research/2024/10/proact---consulting-revenues-behind-small-miss/