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Sweden – Proffice growth halted in third quarter

21 November 2012

Proffice (PROEB:STO), one of Scandinavia’s largest staffing firms, reported today that sales for the third quarter of 2012 decreased by -2% to SEK1,182 million (€136 million), compared to SEK1,208 million (€134 million) for the same period last year. In a statement released today, Proffice CEO, Lars Kry, adds: “After a positive start to the third quarter, the worsening economic situation and the increased uncertainty in the market eventually caught up with our business.”

“The decline in demand resulted in higher converting costs. Furthermore the period was also impacted by one less working day compared with the same period last year and by increased direct and indirect costs related to the implementation of a new Group-wide enterprise resource planning system, which will also affect our results in the fourth quarter.”

Consolidated operating profit sunk to SEK31 million (€3.6 million), from SEK68 million (€7.5 million) in Q3 2011. Consequently the total operating margin fell to 2.6%, compared with 5.6% in Q3 last year.

The Swedish market slowed down dramatically by the end of the third quarter, and Proffice Sweden saw its revenue decline by -2% to SEK894 million (€103 million), compared with SEK909 million (€101 million) for the same period last year. During the period, the Swedish business recorded an operating margin of 2.8%, down from 7.0% over the same period last year. The business was impacted by increased price pressure, driven by low demand and higher conversion costs. The company anticipates a weak market for 2013.

In the press release, the company also reported new contracts in Sweden with construction company Swerock to provide logistics workers. Furthermore, the postal service company, PostNords, has chosen Proffice Sweden as its main supplier of flexible workfers.

Norway’s labour market continues to be improve with revenue up by +2.3% to SEK271 million (€31 million), compared to SEK265 million (€29 million) last year.

“We are pushing forward with our ambitious plans for the Norwegian business. In the third quarter, we launched Dfind Engineering, a company specialising in the recruitment of engineers. Our investments affected this quarter’s operating margin, which fell to 3.3%, compared with 6.0% for the same period last year.”

According to Staffing Industry Analysts’ research, Proffice is the second largest staffing firm in Sweden and the third largest staffing firm in Scandinavia.

Proffice AB briefly set a new 52-week low during today's trading session when it reached SEK16.30. It is currently trading at SEK17.80, down 7.29% from yesterday and 11.44% lower than a year ago. This means the company is valued at SEK1.24 billion (€143 million).

To read the full interim report, click here


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