Interim Report January September 2012

Interim Report

January – September 2012

Lars Kry, President and CEO

Magnus Uvhagen, acting CFO

21 November 2012

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Agenda

Report in brief

Highlights

Financial development

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Introductory comments Q3-2012

• Positive start of Q3, followed by increased uncertainty in the market.

• Tangible actions in Q2 improved cash flow and stabilised liquidity in Q3.

• Turnover in Q3 declined 2% to SEK 1,182 million (1,208).

• Decreasing demand resulted in higher adjustment costs due to higher

costs for guarantee wages.

• Continued implementation of ERP system during Q4 and 2013.

• Growth continued in Norway.

After end of quarter:

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Q3-2012 in brief

2012 2011 2012 2011 2011 Change quarter

Revenue, SEK million 1,182 1,208 3,677 3,486 4,770 -2%

EBITA, SEK million 31 68 124 163 227 -54%

EBITA, per cent 2.6 5.6 3.4 4.7 4.8 -

Profit after tax, SEK million 19 47 83 117 154 -60%

Basic earnings per share, SEK 0.28 0.65 1.16 1.57 2.02 -57% Cash flow from operating activities, SEK million 104 52 -20 29 128 -

3rd quarter YTD Full year

Top-line -2%

EBITA for Q3 down -54% compared year-on-year Costs related to implemen-tation of new ERP system in Sweden affected EBITA negatively

Concrete actions and more aligned processes over the period resulted in good cash flows

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Key events Q3-2012

• The action plan was initiated.

• Proffice entered a partnership with Newsec to form a staffing pool for the real estate

industry.

• Proffice Aviation was established in Finland.

• New customer agreements with PostNord, Swedish National Board of Health and Welfare

(Socialstyrelsen) and others.

• Appointed by AstraZeneca as its Managed Service Provider for all staffing services for

AstraZeneca's operations in Sweden

• Contracts with new customers including the Swedish Public Employment Service

(Arbetsförmedlingen), Swerock and Bauhaus in Sweden.

• Launch of Dfind Engineering AS in Norway.

• Benno Eliasson named new CFO of Proffice, starting on 1 December.

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Balanced products

Staffing

Sales, Group: -2%

Sales, Sweden: -2%

Recruitment

Sales, Group: -3%

Sales, Sweden: 0%

Outplacement

Sales, Group: -6%

Sales, Sweden: -6%

1 1 066 1 021 1 111 1 154 1 213 1 128 1 218 1 130 40 48 54 38 48 51 55 37 30 27 17 16 23 21 22 15 -6,0 -4,0 -2,0 0,0 2,0 4,0 6,0 8,0 10,0 600 700 800 900 1000 1100 1200 1300 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

EBITA, per cent SEK million

Staffing Recruitment Outplacement

Proffice Uniflex Poolia

Lernia

Sales Q4-2010 to Q3-2012

Long-term EBITA goal

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Sweden

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Redundancies recorded by the Swedish Public

Employment Service, July-October 2012

3692 4227 7329 10260 0 2000 4000 6000 8000 10000 12000

July August September October

Affected persons

1 0,00 1,00 2,00 3,00 4,00 5,00 6,00 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 SEK billion

Swedish market growth 2002-2012

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

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Market share:

Swedish market Q2 2011 vs. Q2 2012

Q2 2011

Q2 2012

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Sweden Q3-2012

• Sales declined 2% to SEK 894 million, compared with a record strong Q3 2011.

• EBITA 2.8% (7.0%).

• New customer agreements with the Swedish Public Employment Service, Swerock,

Bauhaus and others.

• Clear slowdown in the Swedish labour market in September. Increased number of

redundancies.

• Increased price pressure.

• Increased costs due to the new ERP system.

After end of quarter:

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Norway

1 1,00 1,50 2,00 2,50 3,00 3,50 4,00 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3

Norwegian market growth 2009-2012

Source: NHO Service

NOK billion

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Norwegian market shares 2009-2011

0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 Adecco Norge Manpower Proffice AS Jobzone ISS Personalhuset AS

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Norway Q3-2012

• Sales up 2% to SEK 270 million (265).

• EBITA margin 3.3% (6.0), affected by investments into increased growth, including

Dfind Engineering and Dfind Finance.

• Proffice won market share.

• Several new customer agreements and closer relationships with existing customers in

manufacturing, pharmaceuticals, energy and the public sector.

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Denmark & Finland

u str a tio n : Chr is S h a rp , F re e Di g ita lP h o to s.n e t

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Denmark & Finland Q3-2012

• Denmark

Turnover: SEK 4 million (6)

EBITA: SEK 0 million (0)

Continued focus on profitability and increased sales.

• Finland

Turnover: SEK 14 million (28)

EBITA: SEK -1 million (1)

Macroeconomic instability had a significant impact on Finland – growth trend weakened.

After end of quarter:

Proffice Aviation was established in Finland and employs about 100 cabin crew based in

Helsinki.

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Financial Development

Magnus Uvhagen, acting CFO

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Income statement

Financial development

SEK million 2012 2011 2012 2011 2011

Revenue 1,182 1,208 3,677 3,486 4,770

Other operating income 0 0 13 0 0

Operating costs

Employee expenses -1,019 -1,001 -3,104 -2,886 -3,925 Other operating expenses -128 -136 -450 -425 -601 Depreciation and amortisation of assets -4 -3 -12 -12 -17

EBITA 31 68 124 163 227

Write down of intangible assets - - - - -9

Operating profit 31 68 124 163 218 Profit after financial items 30 68 118 164 223

Tax -11 -21 -35 -47 -69

Profit for the period 19 47 83 117 154

3rd quarter YTD Full year

Turnover declined by 2% • Demand for Staffing in

Sweden declined during the second half of the quarter.

• One less working day: 65 (66)

Operating margin 2.6% (5.6) • Significant increase in

guaranteed wages in the second half of the quarter • Temporarily increased

costs in conjunction with ERP implementation

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Countries

Financial development

3rd quarter YTD Full year

SEK million 2012 2011 2012 2011 2011 Change quarter Revenue Sweden 894 909 2,816 2,672 3,667 -2% Norway 270 265 793 720 983 2% Finland 14 28 54 72 93 -50% Denmark 4 6 14 22 27 -33% Total 1,182 1,208 3,677 3,486 4,770 -2% EBITA Sweden 25 64 143 191 262 -61% Norway 9 16 22 24 31 -44% Finland -1 1 -2 -1 0 - Denmark 0 0 0 -3 -4 - Other -2 -13 -39 -48 -62 85% Total 31 68 124 163 227 -54% EBITA % Sweden 2.8 7.0 5.1 7.1 7.1 Norway 3.3 6.0 2.8 3.3 3.2 Finland - - - - - Denmark

Diminished growth in Sweden 2%

Growth in Norway 2% Profit Sweden 2.8% (7.0%), lower than PY due to: • increased costs for

guaranteed wages in the latter part of the quarter • implementation of new

ERP system

• one less working day Profit Norway 3.3% (6.0%), lower than PY due to

• building-up new specialist areas Dfind Engineering and Dfind Finance • One less working day Finland – operational management was replaced after the end of the third quarter.

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Operating areas

Financial development

SEK million 2012 2011 2012 2011 2011 Change quarter Revenue Staffing 1,130 1,154 3,475 3,286 4,499 -2% Recruitment 37 38 144 140 188 -3% Outplacement 15 16 58 60 83 -6% Total 1,182 1,208 3,677 3,486 4,770 -2%

3rd quarter YTD Full year

All operating areas – diminished growth Staffing – decreased -2% • Sweden -2% • Norway 3% Recruitment – decreased -3% • Sweden 0% • Norway -17%

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Business area Staffing

Financial development

SEK million 2012 2011 2012 2011 2011 Change quarter Revenue

Office & Customer Service

369 444 1,196 1,292 1,767 -17% Industry & Logistics 459 404 1,291 1,019 1,409 14%

Finance 82 80 273 244 335 3%

IT 111 97 359 311 435 14%

Care 82 98 257 312 408 -16%

Life Science 27 31 99 108 145 -13%

Total 1,130 1,154 3,475 3,286 4,499 -2%

3rd quarter YTD Full year

Continued specialization results in growth

• Office & Customer Service -17%, uncertainties about the ongoing recession affected demand • I&L 14%, showed

decreased growth during the latter part of the quarter

• IT 14%

• Care -16%, management change during year has not yet produced the desired effect

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Balance sheet

30 Sep 30 Jun 31 Dec

SEK million 2012 2012 2011 Assets

Intangible non-current assets 624 626 630 Property, plant, and equipment 15 16 19 Other investments held as fixed assets 1 1 1

Non-current receivables 3 3 4

Deferred tax assets 20 20 22

Current receivables 1,159 1,300 1,163 Cash and cash equivalents 92 43 120

Total assets 1,914 2,009 1,959

Equity and liabilities

Equity 511 499 700

Deferred tax liability 46 46 46 Interest-bearing non-current liabilites 8 8 8 Interest-bearing current liabilities 295 340 39 Non-interest-bearing current liabilies 1,054 1,116 1,166

Total equity and liabilities 1,914 2,009 1,959

Pledged assets 245 245 245

Contingent liabilites - - -

Change, Net cash, due to ERP system (temporary delay in invoicing) Some recovery in Q3 has slowed due to the economic situation

Change due to acquisition Dfind IT, dividend

Interest-bearing current liabilities, Dfind IT and temporary short-term loan Temporary short-term loan was amortized with 45

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Cash flow

Financial development

SEK million Q3 Q2 2012 2011 2011 Operating activities

Profit after financial items 29 52 118 163 223

Adjustment for items not included in cash flow

Reversal of amortisation, depreciation, and impairment losses 4 4 12 12 26

Other -1 13 -14 0 0

Tax paid 2 -24 -55 -69 -81

Cash flow from operating activities before changes in working capital

34 19 61 106 168

Change in working capital 70 -92 -81 -77 -40 Cash flow from operating activities 104 -73 -20 29 128 Cash flow from investing activities -4 -2 -12 -108 -113 Cash flow from financing activities -47 71 7 -20 -77 Cash flow for the period 53 -4 -25 -99 -62 Cash and cash equivalents, at period’s start 43 47 120 182 182 Cash and cash equivalents, at period’s end 92 43 92 86 120

2012 YTD Full year

Change in working capital higher due to measures implemented to avoid delays in invoicing seen in earlier quarters

Cash flow from financing activities was -47. Temporary short-term loan was

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Proffice’s long-term goals

Market goal

Revenue growth

- We aim to outgrow the

market by 5 percentage

points each year.

Proffice declined 2% in

Q3.

Customer goal

Customer satisfaction

1. We aim to increase customer satisfaction by at least one point every year (long-term target of 75). 2. 50% of our revenue shall come from small and mid-sized

enterprises (SMEs).

1. Satisfied Customer

Index: currently 70.2

points – target 75

2. SME-KAM ratio:

currently 52-48

Personnel goal

Satisfied managers

index

- We aim to increase

manager satisfaction by at

least one point every year

(long-term target 68).

Satisfied Managers Index:

currently 72, target 68

Financial goal

Profitability

- Profitability: we aim for

an operating margin

(EBITA) above 6%.

Currently 2012: 2.6%

Sweden: 2.8%

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Proffice’s short-term focus Q2-Q3 2012

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Adjust cost base

•

Increase sales

2

•

Finalize

implementation of

new ERP system

3

•

Cash flow

4

•

Business plan,

strategy 2013

< <

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1

•

Adjust cost base

•

Increase sales

2

•

Finalize

implementation of

new ERP system

Halfway there – now we’re picking up

speed

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1

•

Adjust cost base

•

Increase sales

Halfway there – now we’re picking up

speed

Action plan SEK 250 million

•

Double no. of sales visits

•

Staff cuts

•

Review other overhead

costs

•

Will impact earnings by

30-50 MSEK, mainly in Q4

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Proffice’s strategies for achieving goals

1 Norway Market: 18,000 MSEK Proffice 7% Sweden Market: 25,000 MSEK Proffice 18.4% Finland Market: 9,000 MSEK Proffice 0.7% Denmark Market: 5,500 MSEK Proffice 0.1%

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