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Eezy Plc's Interim Report 1-9/2022: Revenue grew by 16 percent

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EEZY PLC --   INTERIM REPORT   -- 8 NOVEMBER 2022 AT 8:00

Eezy Plc's Interim Report 1–9/2022: Revenue grew by 16 percent

JulySeptember 2022

  • Revenue was EUR 67.3 million (EUR 58.3 million in July–September 2021).
  • EBITDA was EUR 6.8 million (6.5).
  • EBIT was EUR 4.7 million (4.7) and was 7.0% of revenue (8.0%).
  • Earnings per share was EUR 0.14 (0.13).
  • Revenue grew by 16%.
  • The impact of higher sick-leave costs was EUR 0.6 million more than in the comparison period. Their impact is starting to get partially offset in pricing.

January–September 2022

  • Revenue was EUR 185.4 million (EUR 142.9 million in January–September 2021).
  • EBITDA was EUR 13.6 million (14.2*).
  • EBIT was EUR 7.3 million (8.6*) and was 3.9% of revenue (6.0%).
  • Earnings per share was EUR 0.21 (0.22).
  • Revenue grew by 30%.
  • Business continued to normalize from Corona conditions, but EUR 2.3 million higher sick-leave costs than last year have negatively affected profit.

*) 1–9/2021 EBITDA and EBIT included EUR 2.7 million non-recurring income (Corona subsidy EUR 1.0 million, VAT refund EUR 1.7 million).

Outlook for 2022 (since 8 August 2022)

Eezy expects revenue to grow and EBIT to be 5-6% of revenue in 2022.

Key figures (IFRS)

EUR million, unless
otherwise specified
7–9/20227–9/20211–9/20221–9/20211–12/2021
Revenue        67.358.3185.4142.9203.3
EBITDA6.86.513.614.219.5
EBITDA, %10.1%11.1%7.3%10.0%9.6%
EBIT4.74.77.38.611.8
EBIT, %7.0%8.0%3.9%6.0%5.8%
EPS, undiluted, EUR0.140.130.210.220.31
EPS, diluted, EUR0.130.130.210.220.30
Net debt / EBITDA--3.0 x2.6 x2.4 x
Chain-wide revenue94.186.1265.2215.8305.5

CEO Sami Asikainen:

Growth continued - profit needs improvement

"Our revenue grew by 16 percent in the third quarter to the highest-ever amount of 67.3 million euro. Our growth has been most rapid in the professional services area. Our largest business area, staffing services, continued good growth boosted by the recovery of the horeca sector. We are satisfied with the significant improvement of our profit and profitability compared to the early part of the year. Despite the grown revenue and moderate profitability, we missed our targets and have started corrective actions.

Wide customer base and diversified service portfolio are our strengths

Our greatest strength in the current weakly forecastable environment is our wide customer base and our diversified service portfolio. However, the economic outlook, energy prices and inflation affect many of our customers. In this quarter the impact was most clearly seen in the customers of our franchisees. Many large industrial and constriction customers have decreased production, and thus the usage of our employees has decreased in these companies.

In the staffing business, the horeca, retail and office sectors still grew. In addition, the rapid growth in usage of foreign labor helps to increase our revenue and helps our customers regarding the workforce availability. The workforce shortages, willingness for flexibility and changing attitudes for work support the growth of our markets in the long run. In the short term, our strength is in the base of thousands of customers and approx. 30 000 staffed employees. The employees work under more than a hundred different collective agreements and all over Finland. The wide sector scope, as well as the grown volume of the social sectors, protects us in the difficult times.

In line with our strategy, we have consistently built new business areas. New services widen the service offering for our customers and our employees. From the perspective of the company and our owners, the widening improves our total profitability and decreases our sensitivity to economic changes. The employee experience, service design and change management services of Eezy Flow grow rapidly and are clearly our most profitable units. The Eezy light entrepreneur business is a digital platform business that nicely scales volume into profit improvement. Also this business has grown during the year. As a total, the revenue share of these working life services continued to grow by 3 percentage points in this quarter.

Eezy Flow in wild speed

Eezy Flow does important work by improving the Finnish working life and helping companies in their growth and changes. Eezy Flow is definitely the unit with the highest growth this year, by all measurements. We have quickly grown to a significant data, coaching, consulting and change management services house. In addition to the organic growth, the acquisitions of Leidenshcaft and Siqni has boosted our revenue and profit. We will reach approx. 10 million euro annual revenue level in this unit, which enjoys excellent profitability especially regarding the scalable research and data services. The data related services make half of the unit's revenue.

Operational profitability develops into right direction

Our revenue has grown 30 percent in this year. The substantial growth has not yet fully materialized in our profit and profitability. However, I am still satisfied with the direction of our operational profitability development and the results from our recent actions. For example, we have turned the Eezy Valmennuskeskus that made losses in the first year-half, back into profitable by clarifying the business and by taking cost control actions. During the quarter we have been able to offset the negative gross margin developments caused by the sick-leaves with new price increases and pricing models.

The cumulative EBIT from 1-9/2022 is 7.3 million euro, but the 3.9 percent profitability is far from our long-term targets. The profit development is to the right direction, if we take the approx. 0.7 million euro negative impact from the horeca restrictions in Q1 and the sick-leaves' negative profit impact of 2.3 million euro more than last year into account. Taking these external matters and the year 2021 non-recurring income (corona subsidy, VAT handling) into account, our profit growth has been excellent.

Economic outlook shifts focus to profitability

The starting point into 2022 was great. We built our organization and operational plans for high growth. The growth has been high enough, but sadly the Corona related costs have ruined our profit development. The aggressive offensive of Russia into Ukraine and its negative impacts to Finnish people and companies have grown.

The economic environment has a record high amount of uncertainties and forecasting is historically difficult.

During the current quarter we have started several cost reduction programs and during the remaining part of the year we will accommodate our business to the slowing markets. Our goal is to decrease the fixed costs by approx. one million euro on annual basis. Increasing our operational efficiency is necessary for maintaining our competitiveness and capability to invest into long-term success factors.

I have served as the CEO the whole three years of the current Eezy's history. This period has contained an exceptional number of unprecedented crises. Despite the challenging environment, our organization has good spirits and a feeling of togetherness. I trust that we Eezyens will overcome the future challenges with success."


Result publication event:

A Finnish-language briefing for analysts and media will be held on 8 November 2022 at 13.00 Finnish time as a webcast at https://eezy.videosync.fi/2022-q3

The webcast will be hosted by CEO Sami Asikainen and CFO Hannu Nyman. During the presentation, there will be an opportunity to ask questions. The presentation material will be available at the company website at https://eezy.fi/en/financials/reports-and-presentations/ before the conference. A recording of the webcast will be available at the same website later.


Attachment: Interim Report January–September 2022 in PDF format


Further information:

Sami Asikainen
CEO
sami.asikainen@eezy.fi
tel. +358 (0)40 700 9915

Hannu Nyman
CFO
Eezy Plc
hannu.nyman@eezy.fi
tel. +358 (0)50 306 9913

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