The Group net turnover for the first half year 2006 was MSEK 1,363 (1,156).
The increased turnover is primarily due to increased sales within the activity area Temporary Staffing and Recruitment. Adjusted for the sales of Proffice’s outsourcing operations, the growth including the acquisition of HSG-Henkilöstöpalvelut Oy and Proffice Aviation AB was 29 per cent and organic growth was 19 per cent. The Group operating profit was MSEK 45 (-3).  The Group operating profit excluding capital gains and excluding outsourcing operations was MSEK 3 (-39). The cash flow from the current operations was MSEK -7 (-99). The improved cash flow is partly due to an improved profit, partly due to less capital tied-up.

The Group operating profit for the second quarter 2006 includes expenses for the divestment of Outsourcing, restructuring expenses in Proffice Care Denmark and Sweden, and write-downs in connection with sales of operations of a total of MSEK 13. Adjusted for these expenses, the Group operating profit for the second quarter 2006 was MSEK 62 including capital gains and MSEK 2 excluding capital gains. The second quarter also includes a negative effect due to a late Easter, which has reduced the number of efficient working days for the period with approximately 5 per cent.

- The sales of Proffice Service Centers AB and Proffcom is an important part of our strategy to improve long term profitability through a concentration of business and an increased specialisation. The existing operations now show a continued high growth and an improved profitability, says Lars Wahlström, CEO Proffice AB.

Temporary Staffing and Recruitment
Temporary Staffing and Recruitment shows a net turnover of MSEK 1,215 (942), an increase by 29 per cent, and an operating profit of MSEK 26 (-11). Proffice’s operations in Norway, Sweden and Denmark have developed well, while the Finnish operation and the Care operations had a somewhat weaker development. Dfind, Proffice’s IT venture, had a continued strong development of both turnover and result.

Even if the activity area Temporary Staffing and Recruitment total shows a positive result the margin level is still not satisfactory and further actions will be taken to increase efficiency and improve profitability.

Career & Deveopment
Career & Development had a turnover of MSEK 38 (27), an increase by 41 per cent, and an operating profit of MSEK 0 (-6). Proffice has increase the market share further during the quarter and during the half year, and a continued strong growth for the activity area on the total market is expected in the future.

Outsourcing
Outsourcing shows a net turnover of MSEK 110 (187) and an operating profit of MSEK -18 (-19). During the quarter, the operations in Sweden, Norway and Finland were sold. The operating profit for the second quarter 2006 includes expenses for the divestment of  the Outsourcing operations, and write-downs in connections with the sale of the operation with a total of MSEK 12. The capital gains for the sale were MSEK 60. 

Sweden
The net turnover was MSEK 834 (697). The operating profit, excluding unallocated parent company expenses amounted to MSEK 13 (-32). The improved operating profit is mainly due to a stronger result within Temporary Staffing and Recruitment, and Career & Development. The turnover growth excluding Outsourcing was 39 per cent during the second quarter.

Norway
The net turnover was MSEK 307 (273). The operating profit amounted to MSEK 9 (7). Proffice’s operations within Temporary Staffing and Recruitment continues to show an improved result compared to previous year.

Denmark
The net turnover was MSEK 117 (110). The operating profit was MSEK -13 (-15). The operation within Temporary Staffing and Recruitment had a turnover growth during the first half year 2006 of 30 per cent. During the quarter remaining Outsourcing operations in Denmark were phased out. The phased out operations had a turnover of MSEK 4 and an operating profit of MSEK -8 during the first half year 2006.

Finland
The net turnover was MSEK 105 (76). The operating profit was MSEK -1 (4). HSG-Henkilöstöpalvelut Oy, which was acquired in December 2005 had a turnover of approximately MSEK 32 during the first half year 2006.

Personnel
The average number of full-time employees was 6,410 (5,678).

Earnings development
Operating profit amounted to MSEK 45 (-3). The operating profit excluding capital gains was MSEK -15 (-58). The operating profit excluding capital gains and excluding Outsourcing operations amounted to MSEK 3 (-39).

The Group staff cost of MSEK 1,193 (1,036) includes a cost for administrative staff of MSEK 166 (147).

Depreciations of tangible assets amounted to MSEK 6 (8). Earnings after financial items amounted to
MSEK 42 (-9). Financial items include exchange rate differences of MSEK 0 (3). Earnings after tax for the period amounted to MSEK 44 (-9). The group  taxes fo the period amounted to MSEK 2 (0). Gains from the sale of shares have been handled as a non taxable income.

Financial position and liquidity
Liquid assets as of June 30, 2006 were MSEK 136 (69) and the equity/assets ratio was 31 (23) per cent. The disposable liquid assets, including unused credit undertakings amounted to MSEK 167 (93).

The interest-bearing liabilities amounted to MSEK 145 (204). The reduced interest-bearing liabilities refer mainly to reduced utilization of the committed credit line in Sweden and amortizations of debts in Denmark.

Group shareholders’ equity as per June 30, 2006 was MSEK 310 (211).

Cash flow
The change in Group liquid assets during the period was MSEK 49 (-104). The cash flow from current operations was MSEK -7 (-99), of which changes in working capital amounted to MSEK 4 (-35). The cash flow from investment activities was MSEK 104 (51), of which acquisitions amounted to MSEK -5 (-26), sales of subsidiaries amounted to MSEK 114 (89) and acquisitions of tangible assets was MSEK -5 (-6). Cash flow from financing activities was MSEK -46 (-62) and relates to amortisation of short term loans.

Acquisitions and Sales
Proffice sold the Outsourcing operations in Sweden, Norway and Finland in June. Proffice Service Centers were sold to WM-data and Proffcom was sold to Dacke Group Nordic AB. The capital gains were MSEK 60. The main part of the purchase price has been paid to Proffice during June and the remaining will be paid in two additional payments during the next 15 months. The turnover for the sold operations was MSEK 106 (111) and the operating profit was MSEK -7 (-6).

In order to facilitate the sales of Proffcom, Proffice signed an agreement regarding a redemption in advance of the remaining Proffcom shares, which Proffice, according to a previous agreement with Christiania Compagnie, should have acquired at the  year-end 2006. No purchase fee has been paid for the remaining shares. This agreement settles all business between the parties and means a reduction of the majority interest of the result brought forward of MSEK 30 and an increase of Group shareholders’ equity by MSEK 21.

In January 2006 Proffice acquired a previous franchisee in Norway. The acquired company’s turnover was approximately MSEK 18 during 2005.

Proffice AB has an option to acquire the minority’s shares in Dfind AB year 2013 and the minority owners have an option to sell their shares to Proffice AB. The purchase sum will be based on EBITDA for the year 2012 if one of the parties choose to exercise their option.

Parent company
The parent company includes among other things Group functions for Finance and Communications. The net turnover was MSEK 2 (16) and consists of intra-Group invoicing of services only. The parent company’s undistributed operating profit was MSEK -23 (-21). The parent company expenses for 2006 includes redundancy pay of a total of approximately MSEK 5 regarding change of personnel in Sweden and Denmark. The earnings after financial items amounted to MSEK -33 (-28). The disposable liquid assets amounted to MSEK 120 (43), including unutilized credit undertakings of MSEK 32 (39).

Accounting principles
The interim report for the Group has been prepared in accordance with IAS 34 – Interim reporting and RR 31 – Consolidated interim reports. The same accounting principles have been used as those of the annual report 2005.

The new or revised IFRS standards or IFRIC interpretation introduced after January 1, 2006 have not had any significant effect on the result or the balance sheet.

Stockholm August 10,  2006

Lars Wahlström
CEO

Proffice AB (publ), reg.nr 556089-6572, P O Box 70368, SE-107 24 Stockholm, Sweden. 
Phone: +46 8 787 17 00, www.proffice.com

Questions related to this report will be answered by:
Lars Wahlström, CEO Proffice AB, Phone: + 46 8 787 17 00 or + 46 73 3434 200, lars.wahlstrom@proffice.com

Please also see www.proffice.com

This interim report has been subject to the Company's auditors' review.

Upcoming reports
Interim report for January  - September 2006: November 9, 2006, at 08.00 (CET)

Proffice is the Nordic flexible staffing company. We have more than 10,000 employees and provide temporary staffing, recruitment services, and career & development programs. The Proffice share is listed on Stockholmsbörsen (Stockholm Stock Exchange).

Please see enclosed pdf for the interim report in full.