Results of the Work Service Group, as announced
For the first 6 months of 2016, the Work Service Group recorded revenues in excess of PLN 1,2 billion, improving its last year's results by more than 23%. Gross profit increased by almost a third, and reached over PLN 129 million. Operating profit before depreciation and amortization reached PLN 40,38 million, while EBIT was PLN 32,17 million. The results achieved are in-line with the targets announced by the Management Board at the beginning of the year. In recent months, the Group began the process of reorganization in order to improve the efficiency and integration of the activities. Improvement of the business climate is also fostered by strengthening of the labour market in the whole region of Central and Eastern Europe.
In the 1st half of 2016, Work Service Capital Group’s revenues reached PLN 1,203 million, an increase of 23.13% compared to the same period in 2015. During the same period, Work Service Capital Group also recorded a 30% improvement in gross profit, as well as steady growth in EBTDA (earnings before interest, depreciation and amortization) of more than 4%. EBIT reached a similar level to last year’s level and amounted to PLN 32,17 million.
The results for the first half are in line with our expectations and guidance. We continue to deliver more than 23% percent increase in revenues, whilst maintaining last year's levels of operating profit performance. Today, our growth is based largely on solid organic growth, which amounted to 14%, as well as on maximizing the effects of acquisitions of CRS, the Balkan and Hungarian markets. As a result, more than 45% of our revenues today come from international operations, and we are still growing twice as fast as our sector in Central and Eastern Europe – says Maciej Witucki, President of Work Service S.A. With the strengthening labour market in our entire region, we are recording increased demand for our services. Given the historically low unemployment levels and rising difficulties in recruitment, companies are increasingly using the services of specialized employment agencies. To fully benefit from the emerging business climate, we are changing our functioning models, as well as carrying out the announced restructuring – adds Maciej Witucki.
After a period of intense activity in the area of acquisitions in recent years, Work Service Group has started the process of optimizing the group structure, as well as utilising the synergies that flow from operations within such a large and diverse (business-wise and geographically) Group. One of the pillars of the 2016-17 development plan adopted in March this year, was the consolidation of structures. After the integration of the entities involved in the delegation of workers, in recent months there has been also a merger of the entities involved in consulting. On 1st July, Work Service Professional was merged with Antal Poland, resulting in the integration of know-how and competencies in the field of specialized recruitment. At the same time, a new model of organization as part of the Work Service S.A. was introduced. It mainly concerned the combination of commercial and operating structures at the regional level throughout the country. As a result, the system was simplified and gained greater transparency. As part of the internal processes, the Management Board also began the implementation of cost optimization, while maintaining investment activities, to develop new orders. The first decisions have been taken and implemented. We have incurred financial obligations in this respect, but I believe that we will achieve the intended goals. The changes introduced by us took effect after the closure of this reporting period, so we expect to see their first results at the end of this year, and the full results of the reorganization will be apparent by the end of Q2 2017 – highlights Maciej Witucki.
Employee market creates business climate
The Eurostat data show that the unemployment rate in the European Union is declining, and in the CEE region it reached a record low: 4.1% in the Czech Republic, 4.2% in Germany, 5.2% in Hungary and 6.2% in Poland. It shows that in countries, in which the Work Service Group operates, the market continues to be a candidates’ market for many months. Difficulties in recruiting candidates on the market prompt companies to reach out for external support. The effect of this can be seen in the growth of the revenue on the part of the specialized companies operating within the Group: ITKontakt +42% y/y, Antal +11,8% y/y and Exact Systems +42,6% y/y. At the same time Prohuman retains the leading position on the Hungarian market, thanks to a sales growth of 23,6%. As a result, in the first half, the Group’s revenues from abroad increased by more than 26% y/y.
Our acquisition activities and geographic development yielded the expected results. Today, being the regional leader, we provide comprehensive HR services in markets throughout Central and Eastern Europe, which against the background of the "old EU" has a much greater demand for recruitment support. It gives us great opportunities for further dynamic international development and diversification of the business – wraps up Tomasz Misiak, President of the Supervisory Board of Work Service S.A.
Key financials of the Work Service S.A. Group for the period from 1st January 2016 to 31st June 2016 compared to the same period last year:
Work Service Group operates since 1999 and is the largest provider of comprehensive HR services on the Polish market. It operates throughout Poland through a network of branches and also in 16 other countries (Russia, Germany, Czech Republic, Turkey, Romania, Hungary, Slovakia, Great Britain, Belgium, France, Switzerland, Slovenia, Bulgaria, Serbia, Croatia and China). Its specialty areas include personnel consulting services as well as HR restructuring, recruitment and staff outsourcing. More than 3,000 companies have already chosen Work Service as their business partner. Every day, 50,000 people – and 300,000 candidates a year – find employment via companies belonging to the Work Service Group.
Attorney of the Management Board, Press Spokesman
mobile: +48 508 040 345
Head of the Work Service Press Office
mobile: +48 512 176 030