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Work Service with revenues above PLN 1.5 billion is getting closer to the new business model

After the first 9 months of this year, the Work Service Capital Group recorded almost PLN 1.57 billion in revenue. The main sources of improved results were operations on the Polish and Hungarian markets. In the third quarter alone, Work Service generated almost PLN 10.5 million of operating profit. EBITDA at the end of September amounted to over PLN 13 million. However, non-cash write-offs made in the first half of 2018 encumbered the operating result by an amount exceeding PLN 26 million. The Group achieved results comparable to the same period last year. The Management Board announces further activities aimed at increasing profitability and further significant reduction of debt.

At the end of the third quarter of 2018, Work Service revenues amounted to PLN 1.568 billion. This is a result comparable to last year - then in the same period it was PLN 1.558 billion. The slight increase in the Group's revenue is related on the one hand to the negative impact - due to the business restructuring process - of results on the German market and in the area of contracts carried out by the Work Express Group (cross-border exchange of employees). On the other hand, the upward trends in other markets ensured a slightly higher level of revenues of the entire Group. It is worth noting the positive growth trend on the two markets, largest and crucial for Work Service: Polish (+ 4%) and Hungarian (+ 18%).

 

- Operations on the promising personal services market in Central and Eastern Europe, including Poland, where we are dealing with a record low unemployment rate, directly translates into the possibility of improving the financial results of our Group. In the third quarter of this year, the share of Work Service revenues from foreign operations reached 50.5%, which shows the high demand for personnel services not only in Poland, but also in other countries. This means that the sources of our income from the domestic market and foreign operations, for the first time in history, have levelled out and ensured adequate diversification - says Maciej Witucki, President of the Management Board of Work Service S.A. - As a result of the growing demand for cross-border employee exchanges, we note a steady increase in the employment of Work Service personnel from Ukraine in Poland. Since the beginning of the year, their number has increased by 64%. In turn, in the Work Service group alone, the number of employees converted to full-time employment increased by 8.5%. - he adds.

 

The EBIT result of the Work Service Group at the end of September amounted to -PLN 12.7 million, which was mainly caused by write-offs made in the first half of this year, which reduced it by PLN 26.6 million. However, without taking into account these one-off events, the group's operating profit would amount to PLN 13.9 million, of which nearly PLN 10.5 million were generated in the third quarter of this year alone. The operating result plus Work Service depreciation in the period under review increased by just over PLN 13 million.

 

Further implementation of the "Work Service 2020" strategy

 

As previously announced, Work Service is in the process of implementing the Group's development strategy, which aims to increase profitability and further significant debt reduction. At the beginning of November, the company concluded a contract for the sale of 100% shares in Exact Systems. Thanks to the funds obtained from this transaction, Work Service could spend over PLN 100 million to repay almost half of the bank's debt. At the same time, the company opened a new disinvestment process, meaning the sale of shares in the Prohuman Group, the leader of the Hungarian temporary work agencies market.

 

Successively implementing the announced development strategy, we strive for a new business model that will be based mainly on low-cost and sustainable operations in Poland. Last year, we successfully sold IT Kontrakt, and at the turn of 2017/2018 we disinvested the Russian assets of ProService. At the beginning of November we completed the sale process of Exact Systems. We intend to finalize the planned sale of shares in the Hungarian Prohuman Group in the next 18 months. The funds obtained from this transaction will be earmarked for minimizing indebtedness and liabilities to shareholders of minority subsidiaries - remarks Maciej Witucki.

 

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The Work Service Capital Group has been operating since 1999 and is the largest provider of comprehensive HR services in Central and Eastern Europe. It operates in Poland through its branch network and abroad in 12 countries (Czech Republic, Slovakia, Hungary, Ukraine, Germany, France, the Netherlands, Belgium, Austria, Romania, Slovenia, Croatia). It specializes in personnel consultancy services as well as restructuring in the area of HR, employee recruitment and outsourcing. Over 3,000 companies have already chosen Work Service as their business partner. Every day, 50,000 people and 300,000 employees annually find employment through companies belonging to the Work Service Capital Group. Work Service is a company listed on the Warsaw and London stock exchanges. More information on: www.workservice.pl

 

Media contact:

 

Hanna Mkhitaran
mobile: +48 512 817 166
e-mail: media.workservice@clearcom.pl

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