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Sweden – Proffice CEO resigns following lower revenue and profit

21 August 2013

Sweden-based recruiter Proffice AB (PROED: SS) reported lower revenue and EBITA for the second quarter of 2013. Revenue for the period fell -13% from SEK 1.3 billion (€149.5 million) to SEK 1.1 billion (€126.5 million) year-on-year. EBITA declined -44% from SEK 54 million (€6.2 million) to SEK 30 million (€3.4 million).

Lars Kry, CEO of Proffice, commented: “After several quarters marked by market turmoil, we can discern a certain optimism in the economic figures. Overall, we seem to see a slightly more positive business climate for our customers and an increase in activity levels. Our main business areas; Office & Customer Service and Industry & Logistics, grew compared to the first quarter of 2013.”

Nevertheless, following the release of the  company’s results, Lars Kry also announced that, after five years, he is leaving his position. Efforts to find his successor have been initiated, and Mr Kry will continue in his role until his successor is appointed. He commented: “I have had the enormous privilege to lead and guide Proffice into a strong position in the Nordics, and to lead the team that developed the strong corporate culture and [innovative] driving force that Proffice has today. This is the right time for me to hand over the company to a successor, who can use their new insight and energy to raise the company to the next level.”

In Sweden, representing 73% of company revenue, growth in Outplacement and declines in Recruitment, compared to the same quarter last year, testifies to the continued weak business climate in Sweden. Revenue fell by -17% to SEK 828 million (€95.1 million) compared with SEK 992 million (€114 million) the same quarter last year, with an EBITA margin for the quarter of 2.9%, down sharply from 6.8% in Q2 2012 given significantly lower demand from major customers.

In Norway, the weaker business climate combined with continued uncertainty among customers with the introduction of the so-called Vikarbyrå (Recruitment Agency) Directive impacted operations during the second quarter. On 1 January 2013, Norway implemented the European Union’s directive providing temporary employee parity with permanent staff. Revenue during the quarter totalled SEK 262 million (€30 million), falling short of the company’s growth ambitions for Norway, and -6% below revenue of SEK 279 million (€32.1 million) last year. Despite slowing economic growth in Norway, unemployment figures continue to be low and there are skills shortages in several sectors of the Norwegian labour market. Norway represents 23% of company revenue.

The establishment of specialist company Proffice Aviation in Denmark and Finland performed well. Proffice Denmark increased revenue to SEK 12 million (€ 1.4 million) compared with SEK 4 million (€459,871) last year, reporting positive earnings for the sixth consecutive quarter. Operations in Finland returned to profitability, with a revenue increase of +40%, rising to SEK 28 million (€3.2 million) compared with SEK 20 million (€2.3 million) in the same quarter last year. Denmark and Finland only account for 1% and 3% of company revenue, respectively.  

Looking forward, the Group describes its focus for the second half of 2013 as “Industry & Logistics, Norway, Sales, sourcing, and company efficiency”.

In trading today, the company’s share price fell -3.92% to SEK 24.50 (€2.82), up by +9.01% compared with a year ago. Based on its current share price, the company has a market value of SEK 1.67 billion (€192 million). 

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