* Sales beat, lower costs and executing on M&A * Adj. EBITA up 3-4% 2025-27e, 12% adj. EBITA growth '26e * Share at 6.7x 2026e EV/adj. EBITA, 40% below peers Nordics & Baltics and the UK shine alongside cloud orders Regionally, Proact continues to deliver solid earnings growth in both Nordics & Baltics (NOBA) and the UK, with the acquisition of BlakYaks showing particularly strong performance alongside the operating margin in NOBA. We also highlight the 143% y-o-y growth in cloud order intake, with some larger deals won in the West and Central segments (where Proact continues to focus on lower costs and narrowing its offering). This increases the likelihood of returning to positive organic growth in cloud revenue in 2026e, in our view, following the effects of a more hesitant IT spending market. Margin-wise, NOBA remains above a 10% R12m EBITA margin and the UK has shown a clear improvement to 4.4% (2.7% in Q2), while West and Central continue to struggle at -0.2-0.3%. This should mean that Proact continues to evaluate the divestment of the West and Central segments, which we have previously highlighted as a potential trigger. This would increase group profitability and free up excess cash. On a weak note, operating cash flow (OCF) was somewhat soft in the quarter at SEK -28m (83m), with YTD OCF -51% y-o-y. Positive estimate revisions We make small underlying estimate changes, but also add the recent acquisition of Consular. All in all, we raise adj. EBITA by 3-4% in 2025-27e and mainly see potential upside risk to margin estimates in 2026-27e. Valuation remains below peers The share has been weak over the past 12 months (-25%), but estimates now seem to be trending upwards again. With the addition of M&A, cost reductions mainly behind us and a return to cloud revenue growth in 2026e, the valuation has come down to 6.7x 2026e EV/adj. EBITA on our updated estimates. This is 40% below peers, and Proact continues to execute on its buyback programme as well.
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