Proffice doubles operating profit
Q1 2014 year-on-year comparison
• Revenue decreased 6 per cent to SEK 996 million (1,062)
• EBITA and operating profit increased 100 per cent to SEK 20 million (10)
• EBITA and operating margin stood at 2.0 per cent (0.9)
• Basic earnings per share totalled SEK 0.19 (0.19)
• Cash flow from operating activities totalled SEK -1 million (44)
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Henrik Höjsgaard, president and CEO, released the following statement.
Proffice doubles operating profit
After just over a quarter as CEO and president, I can state that Proffice is a profitable company with great potential. Compared to last year’s first quarter, operating profit doubled to SEK 20 million (10).
We think we discern a certain optimism in the market, which is demonstrated especially by the fact that a number of customers in both Sweden and Norway chose to employ many of the temporary consultants who were contracted from Proffice. This will have a negative effect on our earnings in the short term, but it is also proof that customers are satisfied with our matching of consultants, which hopefully will build trust and increase volume in the long term.
When I visit my new colleagues across the Nordic region, I see great commitment to our customers. Proof of our customer’s appreciation is that the customer satisfaction index survey (CSI) conducted during the first quarter broke the record once again.
Simpler, clearer structure
Revenue is not growing, however, partly due to the fact that some major customers are placing fewer orders. In order to strengthen and energize the sales process and raise internal efficiency, I have initiated an organizational change that will take effect 1 June. The organizational structure will be simpler and clearer, and Group management will be reinforced with the heads of the four major business units and the head of Group Sales.
In line with Proffice’s main strategy – product leadership through specialization – we are establishing a company called Dfind Science & Engineering. This entails combining the existing operations of Proffice Life Science and Dfind Engineering and further developing them to add new services and new markets.
A non-recurring cost for this organizational change will be in the range of SEK 10-15 million and will affect earnings in the second and third quarters. Annual savings from 2015 are expected to be SEK 5-10 million.
Strengthening for the future
The new organizational structure will enhance the Group’s focus on sales. In the first and second quarters we will develop our future sales strategy and will implement it in the fourth quarter. Weak sales to new customers have affected consolidated revenue for some time, but our ambition to grow faster than the market stands firm.
The organizational changes coupled with additional investments in Group infrastructure and IT systems of SEK 20-25 million per year in 2014 and 2015 convince me that we can improve our ability to respond more quickly to the market. Consequently, Proffice will further strengthen its position in order to become the most successful staffing company in the Nordics.