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Proffice publish financial results

Q3 2013 compared year on year

•Revenue decreased 10 per cent to SEK 1,066 million (1,182)

•EBITA and operating profit increased 61 per cent to SEK 50 million (31)

•EBITA margin and operating margin stood at 4.7 per cent (2.6)

•Basic earnings per share totalled SEK 0.66 (0.28)

•Cash flow from operating activities totalled SEK 62 million (104)

January-September 2013 compared year-on-year

•Revenue decreased 11 per cent to SEK 3,258 million (3,677)

•Other operating income totalled SEK 0 million (13)

•EBITA and operating profit declined 27 per cent to SEK 90 million (124)

•EBITA margin and operating margin stood at 2.8 per cent (3.4)

•Basic earnings per share totalled SEK 1.16 (1.16)

•Cash flow from operating activities totalled SEK 116 million (-20)

Financial overview

Third   quarter Change Nine   months Change Full year

Group 2013 2012 quarter 2013 2012 nine   months 2012

Revenue,   SEK million 1,066 1,182 -10% 3,258 3,677 -11% 4,876

Other   operating income, SEK million* 0 0 - 0 13 - 40

EBITA,   SEK million 50 31 61% 90 124 -27% 110

EBITA   margin, per cent 4.7 2.6 - 2.8 3.4 - 2.3

Operating   profit, SEK million 50 31 61% 90 124 -27% 110

Operating   margin, per cent 4.7 2.6 - 2.8 3.4 - 2.3

Profit   after tax, SEK million 44 19 132% 79 83 -5% 78

Basic   earnings per share, SEK 0.66 0.28 136% 1.16 1.16 0% 1.11

Diluted   earnings per share, SEK 0.66 0.28 136% 1.16 1.16 0% 1.11

Cash   flow from operating activities, SEK million  62 104 - 116 -20 - 0

Cash   flow from operating activities per              

share,   SEK 0.90 1.51 - 1.69 -0.29 - 0.00

Basic   equity per share, SEK 7.95 7.44 7% 7.95 7.44 7% 7.46

Return   on equity, per cent 14.0 20.5 - 14.9 14.0 - 12.9

*Deviation between actual additional purchase price from previous acquisitions and expected outcome.

Lars Kry, CEO, commented, "In an economic climate that continues to be tough, we further increased profitability in all markets. EBITA reached SEK 50 million (31), and the EBITA margin improved to 4.7 per cent (2.6). The intensive action plan we initiated when the market gave way in the autumn of 2012 continues to have a positive effect, but the improved performance is also the result of a conscious effort to increase focus on margins across the Group."

Action plan results in additional effects in Sweden

He stated, "Although the Swedish market is showing signs of greater stability and increased activity, customers continue to be cautious. Revenue fell by 14 per cent during the quarter, primarily due to the market situation but also as a consequence of a change in customer mix. The proportion of revenue from major customers decreased, which benefited small and medium-sized customers and affected both profitability and cash flow in a positive direction. Despite decreased revenue and the continuing effects of higher-than-normal guaranteed wages, operating profit increased by 60 per cent compared with the same quarter last year and we attained an EBITA margin of 5.2 per cent (2.8).

"Our successful specialization strategy creates opportunities for better profitability. With leading-edge expertise in each business area, we can continually refine our services to meet our customers’ needs and develop their businesses. During the quarter, we extended or initiated several important agreements with NCC, Peab, ICA, Swedavia, the Swedish Transport Administration, Intersport, Sandvik, SVT, and others."

Improved earnings in Norway

"Operating profit increased 44 per cent in the third quarter, which results in an operating margin of 5.1 per cent (3.3).

"The market in Norway was characterized by a continued uncertain economic climate during the quarter. Growth slowed and our business was adversely affected by the new work and employment conditions brought about by the Vikarbyr&aring Directive. Revenue dipped 5 per cent compared year-on-year, but our high ambitions for Proffice Norway remain. We will strengthen both our market position and profitability by creating a better balance in the customer mix, continuing to focus on margins, and through efficiency and cost control at every stage.

"Through our specialization strategy, we can better meet the skills shortage prevailing in so many industries. For example, our focus on engineers continues in a positive direction.

Profitable growth in Denmark and Finland

"Proffice in Denmark once again delivered a positive result. Revenue tripled compared with the same quarter last year and we attained an EBITA margin of 25.0 per cent (0.0). Operating profit was positively impacted by the successful establishment of specialist areas as well as the increasingly profitable recruitment business.

"Our operations in Finland continued in the black during the quarter despite the enduring unsettled economic climate. We achieved an operating margin for the quarter of 6.5 per cent (-7.1), and revenue more than doubled. The positive earnings trend in Finland is mainly due to the establishment of specialist company Proffice Aviation, but also to a conscious strategy to redirect the business towards hiring a larger proportion of white collar employees.

"During the quarter, we signed a recruitment agreement with Outokumpu.

"Customers and profitability remain in focus

"Thanks to our intensive action plan we are back up to a good level of profitability. However, we know that the third quarter is normally strong in calendar terms, and that the fourth quarter contains a large number of non-working days this year. In addition, there is uncertainty about how the market will develop, which means that we must continue to be able to quickly adapt to prevailing market conditions.

"We will continue our long-term efforts to become the most successful staffing company in the Nordics. With our strong local sales culture, Proffice stands ready to strengthen its market position in all markets. By maintaining cost control, continuing to focus on margins, and being first with the best services, we will generate profitable growth and become an increasingly prominent player in the Nordic staffing market."


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