Proffice Full Year Report January-December 2013

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2013 – Increased profitability in all markets

Year-on-year comparison with 2012

Proffice (STO:PROEB):

  • Revenue decreased 11 per cent to SEK 4,318 million (4,876)
  • EBITA and operating profit increased 14 per cent to SEK 125 million (110), including SEK 5 million (40) in other operating income · EBITA margin and operating margin stood at 2.9 per cent (2.3)
  • Basic earnings per share totalled SEK 1.51 (1.11)
  • Cash flow from operating activities totalled SEK 207 million (0)
  • The Board proposes a dividend of SEK 0.60 per share, totalling SEK 41 million
  • The Board proposes that the AGM continue to mandate repurchase of treasury shares and to authorize the issuance of new shares as in prior years

Q4 2013 year-on-year comparison

  • Revenue decreased 12 per cent to SEK 1,060 million (1,199)
  • EBITA and operating profit totalled SEK 35 million (-14), including SEK 5 million (27) in other operating income
  • EBITA margin and operating margin stood at 3.3 per cent (-1.2)
  • Basic earnings per share totalled SEK 0.35 (‑0.06)
  • Cash flow from operating activities totalled SEK 91 million (20)

Financial overview

  Fourth quarter   Change   Full year   Change
Group 2013   2012 quarter 2013   2012 full year
Revenue, SEK million 1,060 1,199 -12% 4,318 4,876 -11%
Other operating income, SEK million* 5 27 -81% 5 40 -88%
EBITA, SEK million 35 -14 - 125 110 14%
EBITA margin, per cent 3.3 -1.2 - 2.9 2.3 -
Operating profit/loss, SEK million 35 -14 - 125 110 14%
Operating margin, per cent 3.3 -1.2 - 2.9 2.3 -
Profit after tax, SEK million 25 -5 - 104 78 33%
Basic earnings per share, SEK 0.35 -0.06 - 1.52 1.11 37%
Diluted earnings per share, SEK 0.35 -0.06 - 1.52 1.11 37%
Cash flow from operating activities, SEK million 91 20 - 207 0 -
Cash flow from operating activities per
share, SEK 1.33 0.29 - 3.03 0.00 -
Basic equity per share, SEK 8.37 7.50 12% 8.37 7.50 12%
Return on equity, per cent 19.2 12.9 - 19.2 12.9 -

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

CEO comments

2013 – Improved profitability in all markets

The beginning of 2013 was marked by a continued sluggish market. Proffice’s focus was on completing the action plan that was initiated when the market declined in autumn 2012 and ensuring profitability over growth. Thanks to the efforts of our employees and the action plan in Sweden, profitability improved in all markets, and the EBITA margin was 2.9 per cent (2.3) for the full year.

In the second half of the year, an improvement in the Swedish market was cautiously anticipated. Overall, 2013 turned out to be a transitional year for our Swedish operation, where continued cost conciousness and internal efficiency resulted in increased profitability, despite substantial price pressure. The proportion of revenue from small and medium-sized customers continued to increase, affecting both profitability and cash flow in a positive direction. Demand from of a number of our major customers was lower, as well.

Growth continues to be our ambition in Norway. We see great potential in the Norwegian market and our goal is to strengthen our market position. However, the business was affected by the slump in early 2013 that affected the Norwegian economy and by increased uncertainty among customers with the introduction of the Vikarbyrå Directive*. Despite this, we managed to increase profitability in 2013 to an EBITA margin of 3.5 per cent (3.2). Our specialization strategy has continued to ensure the right conditions exist for better profitability by meeting our customers’ needs with excellence and continuously refined service offerings.

Both in Finland and Denmark, revenue and profitability increased significantly during the year as a result of the establishment of Proffice Aviation, one of our specialist companies.

A strong fourth quarter

Despite the negative impact of the weak market and unfavourable calendar effects, Proffice finished the year profitably. Consolidated operating profit was SEK 35 million (-14), resulting in an EBITA margin of 3.3 per cent (-1.2).

In Sweden, economic indicators continue to straggle. That fact that the Recruitment operating area improved while Outplacement declined and that revenue increased from the third quarter, convinces us that the economic situation may be about to brighten. Our Swedish operation reached an EBITA margin of 4.8 per cent (-1.6).

Despite focused efforts, we were not able to increase profitability in Norway during the fourth quarter. The Institutes of Economic Research reports that the Norwegian market’s economic climate remains tough. Revenue decreased 13 per cent in local currency compared year-on-year. We reached an EBITA margin of 3.0 per cent (4.4).

In Finland and Denmark, Proffice Aviation continued to contribute to increased growth and a stronger market position. Fourth quarter revenue was several times higher than its previous low levels in both Finland and Denmark, while profitability improved significantly.

In the fourth quarter, Proffice signed several important agreements with organizations such as the City of Stockholm, Husqvarna, Familjebostäder, ICA, Vattenfall, and Kommentus in Sweden, as well as Telenor, Oslo Kommune, and Deloitte in Norway, and Outokumpu in Finland.

Prepared for growth

As the new CEO, I can conclude that Proffice made it through a period of tough economic market conditions. The Group has successfully implemented major cost savings, streamlined internal processes, and improved profitability, while winning major contracts. At the end of the year, Proffice took over development responsibilities for the enterprise resource planning (ERP) system from the vendor. We estimate that this will allow for better potential to transform and develop the infrastructure according to our future needs.

Proffice is an efficient, profitable company that is well prepared to meet changes in the market with attractive offerings and good sales pressure. Our long-term strategy remains unchanged and our 2014 agenda reflects the Group’s ambitious business plans. Proffice will continue to play its leading role in the market and generate profitable growth through innovation and improved customer experiences. I look forward to leading Proffice toward our vision of becoming the most successful staffing company in the Nordics.

Henrik Höjsgaard

President and CEO

This is a translation from Swedish. In the event of any discrepancies between the Swedish and the translation, the former shall have precedence.

Proffice is the specialised flexible staffing company with more than 10,000 employees in the Nordic region. We provide temporary staffing, recruitment services, and outplacement. Proffice is listed on the NASDAQ OMX 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 20 February 2014 at 8 am CET.

This information was brought to you by Cision http://news.cision.com

Contacts

Henrik Höjsgaard
President and CEO
telephone +46 8 787 17 00
henrik.hojsgaard@proffice.com
or
Benno Eliasson
CFO
telephone +46 8 787 17 00
benno.eliasson@proffice.com

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Contacts

Henrik Höjsgaard
President and CEO
telephone +46 8 787 17 00
henrik.hojsgaard@proffice.com
or
Benno Eliasson
CFO
telephone +46 8 787 17 00
benno.eliasson@proffice.com