January - September
• Net turnover MSEK 2,096  (1,775)  – an increase by 18 per cent
• Operating Profit MSEK 57 (52)
• Profit after tax MSEK 50 (41)
• Earnings per share before and after dilution 0.70 (0.99)
• Operating profit excluding capital gains and excluding outsourcing operations MSEK 15 (-35)

Important events after the close of the period
• As a step in Proffice’s specialist strategy, Proffice has made a resolution on November 8, to acquire Plus4You, a technical services specialist within the area Industry and Production.

The Group net turnover for January – September 2006 was MSEK 2,096 (1,775). The increased turnover is primarily due to increased sales within the activity area Temporary Staffing and Recruitment. The growth for this area was 37 per cent for the third quarter compared to 29 per cent for the second quarter. Adjusted for the sales of Proffice’s outsourcing operations, the growth including the acquisition of  HSG-Henkilöstöpalvelut Oy and Proffice Aviation AB was 31 per cent. The Group operating profit was MSEK 57 (52) MSEK.

The cash flow from the current operations for the third quarter was MSEK 6 (-24). The cash flow from the current operations for January – September was MSEK -1 (-123). The improved cash flow is partly due to an improved profit, partly due to less capital tied-up.

- The new strategy for long term profitability through specialisation and improved efficiency is starting to give result. Existing operations show a continued high growth and improved profitability for the third quarter, says Lars Wahlström, CEO Proffice AB. With our new common Nordic processes, new products will be created both faster and more efficient.

Temporary Staffing and Recruitment
The turnover for the third quarter was MSEK 721 (527), an increase by 37 per cent.

The operating profit for the third quarter was MSEK 31 (16), almost a doubling compared to the same period last year.

Temporary Staffing and Recruitment for the period January – September shows a net turnover of MSEK 1.936 (1.469), an increase by 32 per cent and an operating profit of MSEK 57 (5). The net turnover in Norway, Sweden and Finland has developed well. Dfind, the group’s IT venture, has had a continued strong development in both turnover and profit.

Even if both Temporary Staffing and Recruitment show a profit, the level of profit margin is still unsatisfactory and additional measures will be taken to increase efficiency and to improve profitability.

Career & Deveopment
The turnover for the third quarter was MSEK 12 (10), an increase by 20 per cent.

The operating profit for the third quarter was MSEK -2 (-3).

Career & Development had a turnover for the period January - September of MSEK 50 (37), an increase by 35 per cent, and an operating profit of MSEK -2 (-9). During the last quarter, Proffice has further increased the market share, and a continued growth in the total market for this activity area is expected.

Sweden
The turnover for the third quarter was MSEK 412 (367), an increase by 12 per cent. The now sold outsourcing operation is included by MSEK 71 in the comparative figure for the third quarter 2005. The turnover growth for  Temporary Staffing and Recruitment was 39 per cent.

The operating profit for the third quarter, excluding unallocated parent company expenses amounted to MSEK 20 (8), an increase by 150 per cent.

The net turnover for the period January – September was MSEK 1,246 (1,064) MSEK. The operating profit, excluding unallocated parent company expenses amounted to MSEK 33 (-24). The operating profit is primarily due to an improved profit for Temporary Staffing and Recruitment.

Norway
The turnover for the third quarter was MSEK 199 (157), an increase by 27 per cent. 

The operating profit for the third quarter was MSEK 7 (10).

The net turnover for the period January – September was MSEK 506 (430). The operating profit was MSEK 16 (17). Proffice’s Temporary Staffing and Recruitment operations show a continued increased net turnover compared to last year.

Denmark
The turnover for the third quarter was MSEK 58 (57). A turnover of MSEK 3 for the now sold outsourcing operation is included in the comparative figure for the third quarter 2005.  The turnover growth for Temporary Staffing and Recruitment was 7 per cent. During the end of the third quarter a reorganization in accordance with the new specialist strategy, was implemented. A new business area for recruitment has started, which is expected to contribute positively during 2007.

The operating profit for the third quarter was MSEK -4 (-5).

The net turnover for the period January – September was MSEK 175 (167). The operating profit was MSEK -17 (-20).

Finland
The turnover for the third quarter was MSEK 64 (38), an increase by 68 per cent. The third quarter was characterized by a strong growth in Finland. The two companies, Proffice Finland and HSG Henkilöstöpalvelut will merge during 2007.

The operating profit for the third quarter was MSEK 6 (0).

The net turnover for the period January – September was MSEK 169 (114). The operating profit was
MSEK 5 (4).

Personnel
The average number of full-time employees was 6,822 (5,540). 
 
Earnings development
Operating profit amounted to MSEK 57 (52). The operating profit excluding capital gains and excluding Outsourcing operations amounted to MSEK 15 (-35).

The Group staff costs of MSEK 1,830 (1,570) include a cost for administrative staff of MSEK 243 (210). Depreciations of tangible assets amounted to MSEK 8 (11). Earnings after financial items amounted to
MSEK 53 (43). Financial items include exchange rate differences of MSEK 0 (3). Earnings after tax for the period amounted to MSEK 50 (41). The group  taxes for the period amounted to MSEK -3 (-2). Gains from the sale of shares have been handled as a non taxable income.

Financial position and liquidity
Liquid assets as of September 30, 2006 were MSEK 70 (88) and the equity/assets ratio was 31 (28) per cent. The disposable liquid assets, including unused credit undertakings amounted to MSEK 139 (141). The interest-bearing liabilities amounted to MSEK 95 (184). 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 September 30, 2006 was MSEK 312 (258).

Cash flow
The change in Group liquid assets during the period was MSEK -17 (-85). The cash flow from current operations was MSEK -1 (-123), of which changes in working capital amounted to MSEK -8 (-61). The cash flow from investment activities was MSEK 81 (105), of which acquisitions amounted to MSEK -26 (-27), sales of subsidiaries amounted to MSEK 114 (149) and acquisitions of tangible assets was MSEK -7 (-10). Cash flow from financing activities was MSEK -94 (-75) and relates to amortisation of short term loans.

Acquisitions and Sales
In August 2006, Proffice acquired a previous franchisee in Norway. The acquired company’s turnover was approximately MSEK 67 during 2005.

During the second quarter Proffice sold the Outsourcing operations in Sweden and Finland and the Outsourcing operations in Denmark were discontinued. The capital gains were MSEK 60. Net turnover for the total Outsourcing operations amounted to MSEK 110 (269) and the operating profit was MSEK -18 (-19).

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 chooses to exercise their option.

Important events after the close of the period
On November 8, a resolution was made to acquire Plus4You, as a step in Proffice’s specialist strategy.  Plus4You is a specialist on technical services within the area Industry and Production. The company’s turnover is approximately MSEK 50 per annum. The acquisition will be made as per November 10 and is expected to give a positive contribution to Proffice’s profitability already this year.

The purchase sum is divided in one fixed sum and two additional purchase sums. The fixed amount is MSEK 13, of which MSEK 3 will be paid by a private placement of Proffice shares to the owners of Plus4You. With reference to an authorization given by the Annual General Meeting on April 6, 2006, a total of 158,061 shares will be issued, which means a total dilution of approximately 0.2%. Additional purchase sums may be paid during 2008 and 2009 respectively, based on the turnover and operating profit during 2007 and 2008.
  

Parent company
The parent company includes among other things Group functions for Finance and Communications. The net turnover was MSEK 3 (16) and consists of intra-Group invoicing of services only. The parent company’s undistributed operating profit was MSEK -37 (-31). The earnings after financial items amounted to MSEK  49 (98). The disposable liquid assets amounted to MSEK 77 (68), including unutilized credit undertakings of MSEK 68 (68). The parent company expenses for 2006 includes redundancy pay of a total of approximately MSEK 5 regarding personnel changes in Sweden and Denmark.

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 November 9, 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 not been subject to the Company's auditors' review.

Upcoming reports
Year end report  2006: February 8, 2007 at 08:00 CET
Interim report January – March 2007: May 3, 2007 at 08:00 CET
Interim report January – June 2007: August 17, 2007 at 08:00 CET
Interim report January – September 2007: November 8, 2007 at 08:00 CET

Proffice’s Annual General Meeting 2007 will take place on April 17, 2007at 17:00 CET in Stockholm.

Proffice is the Nordic specialist 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 the enclosed pdf for the interim report in full