Zalaris

Earnings Release • Feb 28, 2020

19th year of uninterrupted growth and all-time high Q4 revenues

19th year of uninterrupted growth and all-time high Q4 revenues

Zalaris ASA, the provider of Payroll and HR Solutions that Value People, today

posted all-time high fourth quarter revenues of NOK 206 million making 2019 the

company's 19[th] year of uninterrupted growth.

Zalaris' revenues reached NOK 206 million for Q4 (NOK 194 million), and NOK 777

million for FY19 (NOK 745 million), an increase of 6% and 4% respectively

compared to the previous year.

Key financial figures for Q4 and FY2019:

· Revenue of NOK 206.2 million (NOK 194.2 million) for Q419 and NOK 776.8

million (NOK 745.4 million) for FY19, an increase of 6.2% and 4.2% respectively

· Adjusted EBIT of NOK 5.1 million (NOK 12.5 million) for Q419, and NOK 30.4

million (NOK 27.9 million) for FY19, an increase of 9.0%

· Result for the period of NOK -1.3 million (NOK -4.1 million) for Q419

Fortifying recurring revenue streams

During the fourth quarter Zalaris continued securing long term recurring revenue

streams.  Existing customers such as The State of North Rhine-Westphalia,

Gassco,and Yara extended their long term agreements.  New customers such as the

PEKAO bank in Poland with 16'000 employees and Mahle in UK signed up for five

year agreements.  "These agreements reflect Zalaris' successful long-term

business model in securing recurring revenue streams and low historic churn" -

says CEO and founder Hans-Petter Mellerud.

Vision 2020 - Completed initiatives delivering NOK 4.7 million monthly savings

The company continued to deliver on its cost reduction program targeting monthly

cost reductions of  NOK 4,7 million compared to Q1 2019.  Communicated

initiatives have been completed including consolidating delivery locations,

improving operational efficiency, renegotiating supplier agreements and

downsizing administrative non-market facing capacity resulting in a net

reduction of 52 FTEs.  "All in all, we see a corresponding positive effect on

our personnel costs.  However, as a result of our consolidation activities,

especially in Germany, our resource costs in Q4 are temporarily higher due to

lower utilization of new resources and a temporarily increase in the use of

external consultants to deliver on our customer commitments." - says Mellerud.

Growth 2020: Increase customer value

"Profitable growth is our resolute focus in 2020. Recurring revenue and

agreements with existing customers already account for approximately 80% of our

business. This combines with a historic low churn of 1.5-3% per annum. We want

to build on this proven business model and acquire new customers with an

emphasis on expanding platform-based payroll and HR services in Central Europe,

UK and Ireland. Customer satisfaction is equally a focus area" - says Mellerud.

Zalaris will host a webcast for all shareholders and interested parties today at

08:30 CET. There will be a Q&A session following the management presentation.

The fourth quarter webcast will be available

here (https://channel.royalcast.com/webcast/hegnarmedia/20200228_3/)

Zalaris Q4 2019 Report (https://zalaris.com/wp-content/uploads/2020/02/Q4

-Report.pdf)

Zalaris Q4 2019 Presentation (https://zalaris.com/wp-content/uploads/2020/02/Q4

-Presentation.pdf)

Contact:

Gunnar Manum, CFO

Mobile: +47 951 79 190

E-mail: gunnar.manum@zalaris.com

Hans-Petter Mellerud, CEO and founder

Mobile: +47 928 97 276

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

About Zalaris

Zalaris (OSLO: ZAL) ranks among Europe's top providers of payroll and human

capital management (HCM) solutions - addressing the entire employee lifecycle,

from recruiting and onboarding to payroll and benefits, time and attendance,

travel expense, performance management and learning. Our proven local and multi

-country delivery models include on-premise implementations, software as a

service (SaaS), integrated cloud and business process outsourcing (BPO).

Zalaris' experienced consultants and advisors cover all industries and IT

environments. For more information, go to www.zalaris.com.