Zalaris

Earnings Release • Feb 28, 2017

Margins above target, multiple wins supporting outlook

Margins above target, multiple wins supporting outlook

Zalaris' Q4/16 revenues were up 11.2% to NOK 105.2 million, with an

EBIT margin at 11.8% - well above target. Dividend for FY/16

proposed at NOK 0.87 per share.

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

solid results in Q4/16 with both revenues growth and margins above

target. The quarterly revenues passed a record high hundred million

mark to NOK 105.2 million, 11.2% higher compared to Q4/15. EBIT

reached NOK 12.4 million (11.8%) for the period.

"We managed to reach our sales growth and margin targets due to

strong focus on operational improvements. This, together with

multiple wins, give us confidence that we are on the right track a

couple of months into 2017", says Hans-Petter Mellerud, Zalaris' CEO

and founder.

New contracts

Full year revenues were up 6.1% to NOK 396.6 million, and EBIT

reached NOK 37.9 million for 2016. Dividend for 2016 is proposed at

NOK 0.87 per share.

Multiple new wins and advances were achieved in Q4, including

contracts signed with Norwegian Railways (NSB), the municipally

owned public transport operator Sporveien Oslo AS and the steel

producer Outokumpu in Sweden. Post quarter, Zalaris renewed a

contract with Norsk Hydro for another five year term.

"These wins are evidence of our ability to deliver continued growth.

We are already covering 200,000 employees in the region and we see

substantial opportunities for further growth on our scalable

platform", says Mellerud.

Extensive regulations

New EU privacy regulation generates opportunities for Zalaris,

increasing relevance and demand for the company's services

supporting compliance.

"The risk of being subject to large fines for non-compliance could

potentially result in a boost for Zalaris' fully compliant systems

and processes", Mellerud comments.

During Q4 Zalaris continued to improve its utilization target for

the Chennai service center within the HR Outsourcing segment - with

India representing close to 19% of the total headcount. Zalaris'

aggregate offshore and nearshore presence was 34% of the total

workforce at the end of Q4/16.

"Through building bridges between our outsourcing, cloud and

consulting business units we target improved customer service,

innovation and further cost reductions in 2017", Mellerud comments.

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