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)

Key events
First quarter

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).

Financial overview

                           Q1                      Full year
Group                      2015   2014   Change    2014
Revenue, SEK million       1,009  996    1%        4,203
Other operating income,    1      0      -         4
SEK million
EBITA, SEK million         22     20     10%       140
EBITA margin, %            2.2    2.0    -         3.3
Operating profit/loss,     -14    20     -         140
SEK million
Operating margin, %        -1.4   2.0    -         3.3
Profit/loss after tax,     -21    13     -         104
SEK million
Basic earnings per share,  -0.31  0.19   -         1.51
SEK
Diluted earnings per       -0.31  0.19   -         1.51
share, SEK
Cash flow from operating   34     -1     -         148
activities, SEK million
Cash flow from operating   0.50   -0.01  -         2.17
activities per share, SEK
Basic equity per share,    9.09   8.63   -         9.36
SEK
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.

Revised strategy
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.

Henrik Höjsgaard
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,
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 6 May 2015 at 8 am CET.