Proffice Interim report January-September 2015

PRESS RELEASE                                                                                           Stockholm 2015-11-05

Stable performance in Sweden and challenges in Norway

Q3 2015

  • Revenue amounted to SEK 964 million (1,058). Revenue increased by 3 percent, adjusted for currency effects and the sale of Aviation, which took place in the second quarter of 2015.
  • EBITA totalled SEK 40 million (52); the decrease was mainly attributable to the sale of Aviation.
  • The EBITA margin totalled 4.1 per cent (4.9).
  • Cash flow from operating activities totalled SEK 7 million (-22).
  • Basic earnings per share totalled SEK 0.43 (0.53).

YTD 2015

  • Revenue amounted to SEK 3,018 million (3,132). Revenue increased by 3 percent, adjusted for currency effects and the sale of Aviation, which took place in the second quarter of 2015.
  • EBITA totalled SEK 93 million (97); the decrease was mainly attributable to the sale of Aviation. In addition, EBITA was affected by other operating income of SEK 10 million from the disposal of Aviation.
  • The EBITA margin totalled 3.1 per cent (3.1).
  • Write-down of goodwill totalled SEK 36 million.
  • Cash flow from operating activities totalled SEK 6 million (1).
  • Basic earnings per share totalled SEK 0.50 (0.97).

Key events

Q3

Proffice Care in Norway entered into an agreement with HINAS, the purchasing organisation of the Norwegian health companies, regarding nurses for Norwegian hospitals. The agreement applies from 1 October 2015 and will run for two years.

After end of quarter

A new Head of Industry and Logistics in Sweden, Carl Dahlén, was appointed in October and will take up his position in January 2016. Carl will be a member of Group management.

The Swedish Transport Administration and Proffice are to enter into a new two-year national framework agreement for staffing services. Proffice will provide personnel in a number of areas of competence, including office administration, HR, finance, information management, communications and operating technology.

Financial overview

Q3 YTD R12 2) Full year
Group 1) 2015 2014 Change 2015 2014 Change 2014
Revenue, SEK million 964 1,058 -9% 3,018 3,132 -4% 4,089 4,203
Other operating income, SEK million 1 0 - 12 1 - 15 4
EBITA, SEK million 40 52 -23% 93 97 -4% 136 140
EBITA margin, % 4.1 4.9 - 3.1 3.1 - 3.3 3.3
Operating profit SEK million 40 52 -23% 57 97 -41% 100 140
Operating margin, % 4.1 4.9 - 1.9 3.1 - 2.4 3.3
Profit after tax, SEK million 29 36 -19% 34 66 -48% 72 104
Basic earnings per share, SEK 0.43 0.53 -19% 0.50 0.97 -48% 1.05 1.51
Diluted earnings per share, SEK 0.43 0.53 -19% 0.50 0.97 -48% 1.05 1.51
Cash flow from operating activities, SEK million 7 -22 - 6 1 - 153 148
Cash flow from operating activities per share, SEK 0.10 -0.32 - 0.09 0.01 - 2.24 2.17
Basic equity per share, SEK 8.20 9.01 -9% 8.20 9.01 -9% - 9.36
Return on equity, % 12.3 15.7 - 12.3 15.7 - - 17.2

1) As of 17 April 2015 all financial information excludes the Aviation area of competence
2) Refers to the last 12 months

Comments by Henrik Höjsgaard, CEO

Stable performance in Sweden and challenges in Norway
The fragmented Nordic economy continued to have an effect on Proffice’s revenue and earnings in the third quarter. Operations in Sweden performed well, while business in Norway and Finland was affected by the downward trend in the economy.

Consolidated revenue increased by 3 percent to SEK 964 (953), adjusted for the currency effect and the sale of Aviation, which took place in the second quarter of 2015. The change in consolidated EBITA was mainly attributable to the sale of Aviation.

Skills specialisation – a commercial advantage
During the quarter, Proffice Care entered into a framework agreement with HINAS, the purchasing organisation of the Norwegian health companies, regarding nurses for Norwegian hospitals. During the period, the Swedish business areas under the Dfind brand also showed positive development.

Continued stable performance in Sweden
The Swedish market remains favourable. During the quarter, the Life Science and IT/Technology areas of competence grew by 33 per cent and 9 per cent, respectively, year-on-year.

The Swedish Transport Administration and Proffice are to sign a new two-year national framework agreement for staffing services relating to administrative personnel.

The lower reduction on employer contributions for young people led to us, in dialogue with our customers, adjusting prices for this category of consultants. The impact on EBITA in the quarter was a negative non-recurring effect of SEK 3 million, attributable to employer contributions on holiday pay liability.

Increased challenges in Norway
Figures from the Norwegian industry body show continued declining demand for the staffing sector’s services. This is due, in particular, to the economic knock-on effects from the sharp fall in the price of oil. The strong impact of worse economic conditions resulted in a decline in all areas of competence during the quarter. To better meet these challenges and strengthen our position on the Norwegian market, a new Managing Director has already been appointed for Norway during the year along with a new management group, and a new sales organisation is currently being put in place.

Nordic economy remains fragmented
There are strong indications that the Nordic region’s economy remains fragmented, with good market conditions in Sweden and worse conditions in Norway and Finland. Through continued investments in a more efficient basic platform in addition to a strong sales organisation, Proffice is continuing to focus on the Group’s strategies to achieve its long-term financial targets.

Proffice staff support refugees
During the quarter, Proffice organised fundraising within the company in aid of the Red Cross’ efforts to help refugees. Together, Proffice and its employees succeeded in raising over SEK 250,000.

I’m proud of the result and of the commitment of all our colleagues, including in their fundraising efforts.

Henrik Höjsgaard
CEO

If you have questions about this full year report, please contact:
Henrik Höjsgaard, President and CEO, telephone +46 8 787 17 00, henrik.hojsgaard@proffice.com
Benno Eliasson, CFO, telephone +46 8 787 17 00, benno.eliasson@proffice.com

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 5 November 2015 at 8 am CET.

About Us

Proffice is the Nordic flexible staffing company. We have more than 10,000 employees and provide temporary staffing, recruitment services, outsourcing, and career & development programs. The Proffice share is listed on Stockholmsbörsen (Stockholm Stock Exchange).

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