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SD Worx Holding invests heavily in growth

Strong increase in operating result; normalised EBITDA increased from EUR 68.1 million to EUR 85.4 million

With a consolidated turnover of EUR 767.6 million (+29.1%) and a normalised EBITDA of EUR 85.4 million (+25.4%), HR services provider SD Worx achieved excellent growth in 2019.

    Good dynamics

    “SD Worx People Solutions, our traditional Payroll & HR segment, has good dynamics driven by positive results in all of its home markets, signed important deals with customers generating recurring income and a normalised EBITDA that is evolving well. The operating margin has increased as planned, so we can look back on a very good year”, says Filip Dierckx, Chairman of the Board of Directors of SD Worx Holding. “At the same time, we are investing heavily in the transformation of our company, with a focus on extensive digitalisation in order to respond to changing customer needs and be ready for the future. SD Worx Staffing & Career Solutions, our segment that focuses on staffing and flexible work, operates in a market that is under pressure. On top of that, last year we invested in the integration of the two companies we acquired. Fortunately, we were able to stabilise the price pressure and keep the relative gross margin constant. We look to the future with confidence, and firmly believe that this trend towards flexible work will continue”.


      SD Worx People Solutions

      Within the consolidated turnover of EUR 767.6 million, SD Worx People Solutions – which today provides payroll and HR services to more than 65,000 clients in Europe – managed to increase its turnover, mostly organically, from almost EUR 466.7 million in 2018 to EUR 505.1 million in 2019. Normalised EBITDA grew from EUR 63.9 million* in 2018 to EUR 77.6 million in 2019.

      “SD Worx People Solutions’s ambition is to become Europe’s number one player by 2023 with a strategy based on customer centricity, innovation and the offering of solutions to manage the entire HR lifecycle”, says Kobe Verdonck, CEO of SD Worx People Solutions. “We won’t get there with organic growth alone, so we are constantly looking for acquisitions that strengthen us, both in terms of geographical presence and solutions for our customers”.

      * To provide the reader of the financial statements more insight into the recurring operational profitability of the group, the presentation of the normalised EBITDA was adjusted in 2019.

        SD Worx Staffing & Career Solutions

        SD Worx Staffing & Career Solutions focuses on the market for flexible work, and provides services relating to temporary work, secondment, recruitment & selection, career guidance, outplacement and specific payroll for temps. This segment realised a turnover of EUR 264.1 and an EBITDA of EUR 8.4 million in 2019, representing an inorganic increase compared to the previous year, as this segment was only acquired in the course of 2018 and has now for the first time been consolidated for a full year.

        “In 2019, SD Worx Staffing & Career Solutions took a major leap forward with the launch of its SD Worx Staffing Solutions trademark and with the integration of Vio and Flexpoint”, says Christophe Petit, CEO of SD Worx Staffing & Career Solutions. “In Belgium, these integration efforts led to a significant improvement in our cost structure, although it was a difficult year in terms of revenues as a consequence of the current market conditions. In the Netherlands – against the market trends – we were able to increase revenues, although this did require the necessary investments in our office network.”


          Non-recurring costs

          The digital transformation plan for SD Worx People Solutions, which was launched in 2018, had a strong impact on the consolidated net result. This digital transformation plan is aimed at strengthening organic growth in all markets SD Worx operates in and at reducing the cost-to-serve. Costs specifically allocated to the transformation plan rose from EUR 9.6 million in 2018 to EUR 18.4 million in 2019.

          In 2019, additional pension provisions have been accounted for, of which EUR 8.1 million (EUR -0.8 million in 2018) resulting from adjustments to actuarial assumptions (reduced discount rate) when calculating the Defined Benefit Obligation. These Defined Benefit Obligations are closed to new entrants.

          Other non-recurring costs mainly relate to the group’s M&A activities (EUR 3.7 million) and share plans for the group management (EUR 2.3 million).

            Depreciations and write-downs

            In 2019, the goodwill accounted for on the SD Worx Staffing & Career Solutions business combination was for the first time amortised for a full year. This led to an increase in goodwill amortisation of EUR 5.1 million. Difficult market conditions in Staffing & Career Solutions resulted in a non-cash extraordinary impairment of EUR 13 million. An extraordinary impairment of EUR 3.2 million was also recorded on the value of the real estate in Antwerp. This is in line with the group’s new HQ office plans. Total depreciation and amortization charges amount to EUR 63.5 million, including the ordinary annual depreciations, an increase of EUR 23.6 million compared to 2018.

              Financial result

              The financial result was EUR 0.6 million higher than in 2018. Increased interest charges resulting from the subordinated bond issuance in June 2019 were offset by the reversal of an unrealised capital loss on the group’s discretionary investment portfolio.


                Tax charges decreased by EUR 3.3 million to EUR 8.7 in 2019, predominantly due to a lower taxable result.

                  Net result

                  The net result, recorded at EUR -33.2 million, decreased significantly compared to 2018 due to the aforementioned increase in non-recurring costs and the extraordinary non-cash impairments on goodwill and non-current assets.

                  The net result, excluding actuarial pension adjustments and goodwill amortisation, increased from EUR 19.4 million in 2018 to EUR 20.0 million in 2019.

                    External Audit

                    The Statutory Auditor, DELOITTE Bedrijfsrevisoren CVBA, represented by Bernard De Meulemeester and Maurice Vrolix, has confirmed that the audit of the consolidated annual accounts of SD Worx Holding NV is substantially complete, with the exception of the review of the consolidated annual accounts and the report of the board of directors, and that the audit has to date not revealed any material misstatements that should be adjusted in the accounting data included in this press release. The same policies for financial reporting and accounting principles were applied to the drafting of the financial report that were used for the consolidated financial overviews as of 31 December 2018.

                      About SD Worx

                      In today’s New World of Work, people want to be inspired by what they do and have the freedom to focus on what truly matters. At the same time, organisations need dynamic and motivated employees who can anticipate smart technologies. As a leading European supplier of staffing solutions, SD Worx enables organisations to use Human Resources to deliver added value to their own business and all who work for them. SD Worx provides people solutions that help people throughout their entire careers, from attracting to remuneration, rewarding and developing the talents that make organisations successful. SD Worx offers its services via four channels: technology, outsourcing, extensive expertise and data-driven insights.

                      More than 68,000 small and large enterprises around the world put their trust in SD Worx’s 75 years of experience. The company offers its people solutions in 130 countries, performs payroll calculations for up to 4.6 million employees and ranks among the top 5 worldwide. SD Worx has more than 4,600 employees working in ten countries: Belgium (head office), Germany, France, Ireland, Luxembourg, Mauritius, Netherlands, Austria, United Kingdom and Switzerland.

                      SD Worx is the co-founder of the Payroll Services Alliance, a global strategic network of leading payroll companies that together handle 32 million payroll calculations. In 2019, SD Worx achieved a consolidated turnover of EUR 767.6 million.

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