Increased revenue in 2012 despite deteriorating market conditions
Year-on-year 2012 comparison
· Revenue increased 2 per cent to SEK 4,876 million (4,770)
· Other operating income totalled SEK 40 million (0) because the actual
additional purchase price from previous acquisitions deviated from the
previously expected outcome
· EBITA declined 52 per cent to SEK 110 million (227)
· Operating profit declined 50 per cent to SEK 110 million (218)
· EBITA margin totalled 2.3 per cent (4.8) and operating margin totalled 2.3
per cent (4.6); excluding other operating income, operating margin totalled 1.4
per cent (4.6)
· Basic earnings per share totalled SEK 1.11 (2.02)
· Cash flow from operating activities totalled SEK 0 million (128)
· The Board proposes a dividend of SEK 0.30 per share, totalling SEK 21
million
· The Board proposes that the AGM continues to authorise buyback of company
shares and to authorise the issuance of new shares as in prior years
Q4 2012 year-on-year comparison
· Revenue decreased 7 per cent to SEK 1,199 million (1,284)
· Other operating income totalled SEK 27 million (0) because the actual
additional purchase price from previous acquisitions deviated from the
previously expected outcome
· EBITA declined 122 per cent to SEK -14 million (64)
· Operating loss totalled SEK -14 million (55), a 125 per cent decline
· Excluding non-recurring items, EBITA totalled SEK 9 million (64)
· EBITA margin totalled -1.2 per cent (5.0) and operating margin totalled -1.2
per cent (4.3); excluding other operating income, operating margin totalled -3.4
per cent (4.3)
· Basic earnings per share totalled SEK -0.06 (0.45)
· Cash flow from operating activities totalled SEK 20 million (99) The
restructuring program initiated in Q4 is expected to cut administrative expenses
by SEK 200 million annually. Q4 earnings was encumbered by SEK 50 million in non
-recurring costs
Financial overview
Q4 Full year Change
Group 2012 2011 2012 2011 quarter
Revenue, SEK million 1,199 1,284 4,876 4,770 -7%
Other operating income, 27 0 40 0 -
SEK million
EBITA, SEK million -14 64 110 227 -122%
EBITA margin, per cent -1.2 5.0 2.3 4.8 -
Operating profit/loss, SEK -14 55 110 218 -125%
million
Operating margin, per cent -1.2 4.3 2.3 4.6 -
Profit/loss after tax, SEK -5 37 78 154 -114%
million
Basic earnings per share, -0.06 0.45 1.11 2.02 -113%
SEK
Diluted earnings per -0.06 0.45 1.11 2.02 -113%
share, SEK
Cash flow from operating 20 99 0 128 -
activities, SEK
million
Basic equity per share, 7.46 10.27 7.46 10.27 -28%
SEK
Return on equity, per cent -0.8 5.3 12.9 22.0 -
Comments from Lars Kry, CEO
Increased revenue in 2012 despite deteriorating market conditions
After starting the year with two strong quarters, we faced a much more uncertain
economic climate in September. The shift to lower demand in the second half of
the year reduced full-year earnings, primarily due to increased guaranteed wage
expenses and non-recurring costs. Full year 2012 was also affected by the 4.5
fewer work days than last year, which was hard on both revenue and EBITA.
Despite this, revenue increased 2 per cent to SEK 4,876 million (4,770).
Consolidated EBITA margin for the full year totalled 2.3 per cent (4.8).
Challenges regarding implementation of our new Enterprise Resource Planning
(ERP) system affected our liquidity and profitability during the year. The
situation stabilised in the third quarter, and through concrete measures and
attuned processes, we achieved better cash flow and a stronger cash position.
Over the course of the year we continued to extend our successful specialisation
strategy to several new areas, including Mining, Green Jobs, and Engineering. By
constantly creating innovative new services and offers we increase our
customers’ competitiveness and improve their ability to deal with opportunities
and challenges.
Earnings in our Swedish business were strongly affected by the recession over
the last two quarters as reflected in a full-year EBITA margin of 3.5 per cent
(7.1) or 3.9 per cent (7.1) adjusted for non-recurring items.
Our venture in Norway is proceeding according to plan. Proffice Norway accounted
for the most growth in the Group, with 2012 revenue growth at 13 per cent and a
16 per cent increase in EBITA. Our specialisation strategy continued to reap
success in the Norwegian market, primarily in the Industry & Logistics and Care
areas.
Our Danish operation improved its profitability during the year by breaking
even. The tougher economic climate has hit Finland harder and both revenue and
profitability declined in 2012. However, with the start-up of Aviation in
Finland in the fourth quarter we see great potential for development of our
business in the Finnish market.
Market challenges for Sweden in fourth quarter but Norway stood strong
Consolidated revenue decreased 7 per cent in the fourth quarter to SEK 1,199
million (1,284). Excluding non-recurring items, EBITA totalled SEK 9 million
(64) year-on-year.
The clear slowdown in the Swedish labour market resulted in continued high
restructuring costs and margin pressure in the fourth quarter. The vigorous
action programme that was quickly initiated to adapt operations to the current
economic situation went according to plan. To ensure future profitability,
extensive streamlining is being done in the Group’s various business areas and
support functions. So far, estimated annual administrative cost savings total
SEK 200 million, and fourth quarter earnings were encumbered by non-recurring
costs of SEK 50 million. EBITA for the quarter totalled SEK -14 million (72).
Nevertheless, the underlying business in Sweden showed a profit. Excluding non
-recurring items, EBITA totalled SEK 10 million (72). In parallel, intensified
sales activities had a positive effect and resulted in increased customer
visits. At the same time, we increased our proportion of small and medium-sized
customers, leaving us in a better position to increase margins on hard-pressed
market prices.
In Norway, the labour market remained favourable in the fourth quarter, and we
won the confidence of new customers and cultivated many existing accounts, which
resulted in a 21 per cent increase in revenue to SEK 317 million (263) and an
doubled EBITA.
In the fourth quarter, Proffice signed several key agreements with customers
such as PostNord and the Swedish National Board Of Health And Welfare, and
entered into a Managed Service Provider agreement with AstraZeneca.
Continued reorganisation and sustained strategy for profitability and growth
We are taking a humble approach to economic trends in 2013. Nothing indicates
that the market will improve in the near future, so we are readying ourselves
for continued weak demand in the first half of 2013.
The action programme will also affect our earnings in the first quarter, mainly
in the form of reorganisation costs. Continued high guaranteed wage expenses
will also have an impact on the quarter.
The streamlining that we are now implementing will have a great effect when
demand increases. That, combined with more customer visits and an increased
market presence, will ready us to grow faster than the market and consolidate
Proffice’s position as the leading staffing company in the Nordics.
Lars Kry
President and CEO
Proffice AB
Full Year Report January-December 2012
| Source: Proffice AB
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