Zalaris

Earnings Release • Aug 16, 2017

Milestone quarter, new markets opened up

Milestone quarter, new markets opened up

Zalaris' Q2/17 revenues were up 33.2% to NOK 126.9 million (incl.

sumarum AG which was acquired in the quarter and included from 18

May), with an EBIT margin of 5.7%. First half-2017 pro forma

revenues for the combined entity are 15.4% higher compared to the

same period in 2016.

Zalaris, a leading provider of payroll and HR services, announced

mid-May the acquisition of sumarum AG. Through the acquisition,

Zalaris is gaining an immediate access into Germany, Europe's

largest economy with more than 80 million people and a high

concentration of medium-size and large international companies.

"Q2 of 2017 has been a milestone quarter for Zalaris staking out a

new direction for growth. We are also happy to deliver continued

growth as new customers have come aboard in this quarter, says Hans-

Petter Mellerud, Zalaris' CEO and founder.

The acquisition also introduces the company to other German speaking

countries on the continent, notable Switzerland and Austria.

Twofold growth

Growth continues, both organically and through the acquisition of

sumarum. Sales increased 33.2% to NOK 126.9 million in Q2/17,

including sumarum. On a stand-alone basis, Zalaris grew 7.9%,

booking revenues of NOK 102.9 million for the quarter.

Profit in Q2 was marked by the usual seasonal variations for both

Zalaris and sumarum. After a strong Q1/17, EBIT, excluding other

costs, reached NOK 7.2 million or a profit margin of 5.7% in the

quarter. NOK 10.8 million in other costs were related to the

acquisition of sumarum.

Continued growth for cloud

The cloud services business maintains a trend of significant

revenues growth up to NOK 18.9 million (NOK 6.0 million) in Q2/17.

Cloud services now represent 14.9% of total revenues.

"All customers now require cloud solutions, boosting demand and

activity for our Cloud business. We believe this trend will continue

and perhaps even gain further momentum in the coming years",

Mellerud says.

Zalaris' Cloud business added five-year contract to deliver SAP

SuccessFactors-based cloud services to China Euro Vehicle

Technology, a Sweden-based automotive innovator with an estimated 2

000 employees and contractors. Statkraft chose Zalaris to deliver

solutions and services to more than 3 000 employees in four

countries.

New colleagues in Germany

On 26 April Zalaris announced the acquisition of the leading German

HR outsourcing company sumarum AG. The DACH area, comprising

Germany, Austria and Switzerland, now represents the second most

important geographical market for Zalaris after Norway (in Q3/17).

Pro forma revenues for the combined entity in H1/17 of NOK 305.6

million represents a 15.4 per cent growth compared to 50% of the FY

2016 as presented in the information memorandum describing the

transaction.

"Whether looking internally at our operations or externally at

market opportunities, we have never been in a better position to

become a leading international provider of innovative cloud-based

payroll and HR services", Mellerud states.

All integration efforts are progressing well in accordance with

overall plans.

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, Sweden and Germany, including local-language service

centers with extensive expertise in HR- related laws and

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