Zalaris

Earnings Release • Apr 28, 2016

ZALARIS: 2016 First Quarter Results

ZALARIS: 2016 First Quarter Results

Major projects on track

Zalaris' Q1/16 revenues up 4.6% to NOK 98.5 million, with

EBIT of 9.4%. Positive pipeline of new opportunities and

major prospects on track.

Zalaris, a leading provider of payroll and HR services,

generated solid results for its Q1/16, continuing to advance

the financial performance. The company grew sales 4.6% to

NOK 98.5 million for Q1/16 with a corresponding EBIT of NOK

9.3 million (9.4%) before extraordinary items for the

period.

"The results for the first three months of 2016 prove our

ability to deliver continued growth. In addition, we are

delivering margins approaching our target", says Hans-Petter

Mellerud, Zalaris' CEO and founder.

Zalaris successfully launched outsourced payroll services

for a Swedish Fortune 500 company in Sweden and Finland on

the Zalaris' Platform in Q1/16. In addition, the company

entered into a multi-country payroll services agreement with

a global company to deliver a comprehensive set of payroll

services to their more than 4,000 employees in the Nordics

and Poland. The project is already under implementation.

"Our major projects are on track. In the first quarter we

had successful go-lives with two large customers also

including the Norwegian Railways. In addition, we are seeing

strong interest in our mobile solutions. This is supported

by Telenor as one of our large customers adopting and

rolling out the solution for their more than 10,000

employees in Scandinavia. Furthermore, we see continued

positive development in our pipeline of deals and visibility

in the market during the first quarter of 2016", says

Mellerud.

Zalaris' operations serve more than 196,000 employees today,

including some of the largest companies in the Nordic

region. The total number of employees covered by Zalaris

solutions was 10.5% higher at the end of the first quarter

compared to the same period in 2015. This implies continued

strong growth in employees covered by Zalaris' solutions.

Zalaris continues to follow up strategic growth

opportunities. Extraordinary costs related to these efforts

amounted to NOK 1.6 million in the quarter.

"These are exciting times for Zalaris. We will continue in

pursuing growth opportunities in the European markets going

forward, says Mellerud.

Zalaris announced in previous quarter that it increases its

offshoring target from 20 percent to 25 percent, with

further cost and headcount reductions planned in the

Nordics. Zalaris' new Chennai, India-based service center,

provides many other advantages and represents in Q1/16 14%

of the company's total service and support hours.

"In order to offer competitive priced services to our

customers, our goal is to increase the offshore component of

our services to 20 percent by the end of 2016", says

Mellerud.

Contact

Hans-Petter Mellerud, CEO and founder

Mobile: +47 928 97 276

E-mail: hans-petter.mellerud@zalaris.com

Nina Stemshaug, CFO

Mobile: +47 982 60 394

E-mail: nina.stemshaug@zalaris.com

About Zalaris

Zalaris excels in delivering comprehensive cloud- based HR

and payroll services. The company is certified as a SAP

Business Process Outsourcing (BPO) Partner and is a leading

SAP Human Capital Management (HCM) and SuccessFactors

consulting partner. Founded in 2000, Zalaris today operates

in Denmark, Estonia, Finland, India, Latvia, Lithuania,

Norway, Poland and Sweden, including local-language service

centers with extensive expertise in HR- related laws and

regulations. Learn more about Zalaris at www.zalaris.com