Proffice Aktiebolag (publ) Interim report January-March 2015
PRESS RELEASE Stockholm 2015-05-06
Solid underlying earnings, new financial targets, and revised strategy
First quarter 2015
- Revenue increased 1 per cent to SEK 1,009 million (996)
- EBITA increased by 10 per cent to SEK 22 million (20)
- The EBITA margin totalled 2.2 per cent (2.0)
- Write-down of goodwill totalled SEK 36 million
- Cash flow from operating activities totalled SEK 34 million (-1)
- Basic earnings per share totalled SEK -0.31 (0.19)
Dfind Group expands and opens new offices in Sweden. The Dfind Group consists of specialist companies Dfind Finance, Dfind IT, and Dfind Science & Engineering, which are part of the Proffice Group.
Proffice appointed new director in Norway. Eivind Bøe assumed the position of director of the Proffice Group’s operations in Norway in the second half of February.
After end of quarter
New financial targets and revised strategy. The Board adopted new long-term financial targets, which are: EBITA margin of at least 5 per cent, organic growth at least in line with the market in the Group’s priority areas, and an average debt/equity ratio of 10-30 per cent. The Group’s strategy was also revised in conjunction with this.
AGM resolved to approve the Board’s dividend proposal. A dividend of SEK 0.90 per share (0.60) totalling SEK 61 million was approved.
Proffice Group sells Aviation area of competence. The Aviation area of competence was sold to OSM Aviation AS. The sale affects all four Nordic countries.
Acquisition of treasury shares. The Board agreed to acquire a maximum of 4,500,000 B shares up until the 2016 Annual General Meeting (AGM).
|Revenue, SEK million||1,009||996||1%||4,203|
|Other operating income, SEK million||1||0||-||4|
|EBITA, SEK million||22||20||10%||140|
|EBITA margin, %||2.2||2.0||-||3.3|
|Operating profit/loss, SEK million||-14||20||-||140|
|Operating margin, %||-1.4||2.0||-||3.3|
|Profit/loss after tax, SEK million||-21||13||-||104|
|Basic earnings per share, SEK||-0.31||0.19||-||1.51|
|Diluted earnings per share, SEK||-0.31||0.19||-||1.51|
|Cash flow from operating activities, SEK million||34||-1||-||148|
|Cash flow from operating activities per share, SEK||0.50||-0.01||-||2.17|
|Basic equity per share, SEK||9.09||8.63||-||9.36|
|Return on equity, %||11.6||19.0||-||17.2|
Comments by Henrik Höjsgaard, CEO
Continued good performance in Sweden and strong cash flow
Proffice continued to perform well overall in Q1. All of the Group’s operating areas – Staffing, Recruitment, and Outplacement – grew and the consolidated underlying operating profit and operating margin improved. Cash flow remained strong during the quarter, which led to a further strengthening of financial position.
It is gratifying to note that the Swedish operations continue to perform well in terms of profitability. We are now intensifying our efforts to increase profitability in the rest of the Nordic region, that is, Norway, Finland, and Denmark. Among other things, a new head of the Norwegian operations was appointed in Q1. In conjunction with the Group's strategic review and new circumstances in the current market situation, SEK 36 million in goodwill attributable to Finland was written down. In addition, the restructuring in Norway encumbered operating profit by SEK 2 million. Consolidated operating profit excluding these non-recurring items was SEK 24 million, an increase of 20 per cent as compared year-on-year.
New financial targets
The Board has taken decisions on new long-term financial targets. Organic growth should be in line with the market in the Group’s priority areas. Our organic growth should be achieved with good profitability. Consolidated EBITA as a percentage of revenue should amount to at least 5 per cent in the long term.
Proffice’s financial position is good. The Group has been debt free since October 2014, and at the end of the quarter our net cash was just over SEK 100 million. If developments continue as they have we will very likely see a further strengthening of our cash position. Taking all this into account, we intend to make our capital structure more effective. Our new capital structure target entails that Proffice’s average net debt is to range between 10 and 30 percent of equity. Introducing this target range makes our capital utilisation more effective. The Board was also authorised by the AGM to repurchase shares.
The Group’s dividend policy that at least 50 per cent of consolidated earnings after tax should be distributed remains unchanged.
In order to achieve the new financial targets Proffice has revised its strategy (see page 3). Proffice’s main strategy is competence specialisation. We will prioritise profitable business dealings within existing areas of competence, increase the proportion of advanced services in our offer throughout the Group, and develop new, attractive services and solutions. To support the implementation of this strategy for competence specialisation, we invested in systems support and added 30 new salespeople to the sales organisation, who began their employment during the quarter. The sales organisation now has clear processes and methods for strengthening our presence in the local markets of the Nordic countries.
The Group’s new long-term financial targets reflect existing market conditions well. Efforts to build a more stable and consistently profitable Proffice have begun, aided by investments in infrastructure and systems support as well as a stronger sales organisation. Great effort will continue to be required, but we now have a strategy, a plan, and the determination needed to succeed.
President and CEO
If you have questions about this full year report, please contact:
Henrik Höjsgaard, President and CEO, telephone +46 8 787 17 00, email@example.com
Benno Eliasson, CFO, telephone +46 8 787 17 00, firstname.lastname@example.org
This is a translation from Swedish. In the event of any discrepancies between the Swedish and the translation, the former shall have precedence.
Proffice Group is one of the Nordic region's largest specialists within staffing, recruitment and outplacement. Our commitment and service help people and companies to find solutions to develop. The Proffice Group consists of Proffice, Dfind and Antenn and it has around 10,000 employees. The Proffice share is listed on Nasdaq Stockholm, Mid Cap. www.proffice.com
Information in this interim report is such that Proffice AB (publ) is obligated to disclose it pursuant to the Swedish Securities Markets Act. The information was released for publication on 6 May 2015 at 8 am CET.