Proffice grows on a stagnating market Q1 2012 year-on-year comparison · Net sales increased 9 per cent to SEK 1,200 million (1,096) · EBITA and operating profit declined 13 per cent to SEK 40 million (46) · EBITA and operating margin amounted to 3.3 per cent (4.2) · In Sweden, which accounts for 78 per cent of consolidated net sales, Proffice’s net sales increased 9 per cent to SEK 930 million (850). Operating profit totalled SEK 51 million (56), representing an operating margin of 5.5 per cent (6.6). · Cash flow from operating activities totalled SEK -51 million (15) · Basic earnings per share totalled SEK 0.35 (0.43) Financial overview Group First quarter 2011 Full year Change 2012 2011 quarter Net sales, SEK million 1,200 1,096 4,770 9% EBITA, SEK million 40 46 227 -13% EBITA margin, per cent 3.3 4.2 4.8 - Operating profit, SEK 40 46 218 -13% million Operating margin, per 3.3 4.2 4.6 - cent Profit after tax, SEK 26 33 154 -21% million Basic earnings per 0.35 0.43 2.02 -19% share, SEK Diluted earnings per 0.35 0.42 2.02 -17% share, SEK Cash flow from operating -51 15 128 - activities, SEK million Equity per share, SEK 7.83 9.36 10.27 -16% Return on equity, per 4.4 5.2 22.0 - cent CEO comments The Proffice Group continues to grow Proffice had its strongest year ever in 2011. Against this background, the year-on-year consolidated net sales increase of 9 per cent for Q1 2012 is considered particularly strong. Once again we show that despite a tougher market environment we can grow and gain market share. Profitability in Q1 was affected by continued efforts to build structural capital by implementing our Group-wide enterprise resource planning (ERP) system in Sweden, along with higher guaranteed wages due to lower growth rates. Our specialisation strategy continues to reap success, and in Q1 we developed the strategy further by acquiring the minority shares in Dfind IT. This gives us a strong position in a business area with high demand in the Nordic market. Our specialist companies in the Finance and Industry/Logistics areas are growing considerably more than the market. Sweden: Growth despite stagnant market In Sweden, Proffice grew 9 per cent in Q1 year-on-year. The staffing market in Sweden is highly competitive, and the growth rate slowed during the quarter. Despite this, several of our business areas continue to show good earnings. Industry/Logistics in Sweden grew 38 per cent year-on-year and sees strong demand ahead. Our initiatives in the Finance business area resulted in a sales increase of 35 per cent in Q1 year-on-year. Profitability for Proffice Sweden in Q1 was 5.5 per cent (6.6). Direct and operational costs associated with implementation of our new ERP system in Sweden encumbered profitability and liquidity in Q1 and will also affect the next two quarters. During the period, Proffice concluded several important agreements, including one with Region Skåne in which the company will be a supplier in the finance, medical secretary, HR, and communication occupational categories. Norway: Good results in favourable labour market Operations are developing as planned in Norway. Efforts to improve the operation are giving good results, and aspirations for the future continue to be high. Overall, sales grew in Norway by 12 per cent in Q1 year-on -year. The operating margin also improved during the period to 1.6 per cent (1.4). The Norwegian labour market is currently somewhat more stable than the Swedish with lower unemployment, which is confirmed in our Norwegian operation by a positive trend reversal, with increased sales in the Recruitment operating area. The specialisation strategy has also been successful in our Norwegian operation, and our Industry/Logistics and Care business areas increased their sales 19 and 31 per cent, respectively. Proffice Norway concluded a number of important agreements in Q1, including one with NextGenTel AS. Denmark and Finland achieve stability In Denmark, previously implemented cuts resulted in a balanced operation with low costs. With a new sales-oriented Managing Director, we believe in conservative growth and continued good cost control. Proffice Finland is on track and also shows stable development. Finland is an interesting market in which we continue to evaluate various growth opportunities. At Proffice, the people make all the difference We are currently experiencing a tougher economic climate with slower growth. Our business model continues to work well, but now we must also be able to quickly reorganise to meet a lower growth rate. Changing our ERP system will give us large competitive advantages in the long term. To achieve our long-term goals, we continue to work with that which drives our organisation forward: getting people and businesses to develop and grow. By creating a business environment in which entrepreneurship is part of the culture, we will be first with the best services and thus meet our clients’ and candidates’ needs. We are currently in the second round of Prolab, our internal entrepreneurial school in which our employees have the opportunity to develop themselves and their business concepts. In Q1, Proffice also concluded a partnership with Uppstart Malmö, in which we, together with young entrepreneurs, help highlight people’s competence and help companies and entrepreneurs grow. Together, these initiatives give the Proffice Group even greater opportunities to offer both existing and new customers successful staffing solutions while becoming an increasingly important player in the Nordic labour market. With good cost control and driven, motivated employees, we will continue our persistent efforts to become the most successful staffing company in the Nordics. Lars Kry, president and CEO
Interim Report January - March 2012
| Source: Proffice AB
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