SD Worx, European supplier, doubles (growth figures) in '21

SD Worx, the leading European provider of HR and payroll services, achieved a consolidated turnover of EUR 858.1 million in 2021 (+15.4% compared to EUR 743.5 million in 2020) and a normalised EBITDA of EUR 115.6 million, an increase of 20% compared to 2020 (EUR 96.3 million).

Net income was 46.8 million euros.

"The numbers are up for both SD Worx People Solutions, our payroll and HR segment, and for SD Worx Staffing & Career Solutions, the segment that focuses on staffing and flexible work," said Filip Dierckx, chairman of the SD Worx board of directors.

"Combined sales climb 15.4% compared to 2020. SD Worx People Solutions, which continued to do well financially during the first year of the crisis, saw its revenue increase last year compared to 2020. Staffing & Career Solutions also experienced strong revenue growth in 2021. We should mention that 2020 was a difficult year for this segment due to the outbreak of the COVID-19 pandemic. Still, it is promising that we were able make up a lot of ground in 2021. Finally, our acquisitions in 2021 also explain the strong growth in revenue: Aditro, launch! and Teal Partners joined our group during the first half of the year and all three are doing well."Even more noteworthy is that SD Worx passed the 100 million mark for the first time for its normalised EBITDA at 115.6 million euros. That's a 20% increase from 2020. Again, this is driven by strong organic growth and the acquisitions mentioned earlier. The consolidated net income for 2021 clocks in at 46.8 million euros. That's almost double the 24.1 million in 2020.

Solid international growth

Within the consolidated turnover of 858.1 million euros, SD Worx People Solutions, which today provides payroll and HR services to more than 76.000 customers worldwide, its turnover from €529.5 million in 2020 to €606.9 million in 2021 (+14.6%). Excluding acquisitions, sales grow by 6.3%. Normalised operating income before depreciation and amortisation (EBITDA), increased by 22.8%, from 90.2 million euros in 2020 to 110.8 million euros in 2021.SD Worx Staffing & Career Solutions focuses on the flexible working market and provides services relating to temporary employment, secondment, recruitment and selection, career guidance, outplacement and specific payrolling of temporary employees. This segment saw its revenue grow from 216.8 million euros in 2020 to 253.8 million euros in 2021 (+17.1%). Normalised EBITDA decreased from 7.2 million euros in 2020 to 6.6 million euros in 2021 (-8.1%). However, if we take into account government support measures such as the NOW subsidy in the Netherlands, the aforementioned EBITDA increases by 44.1%.Kobe Verdonck, CEO of SD Worx: "We are pleased to note that our growth strategy is working. Special thanks to our employees for all putting their shoulders to the wheel here and to our customers for their trust. Our ambition is to be the European reference within payroll and HR. In 2021 we expanded significantly internationally: we opened offices in Poland, Spain, and Italy, and with the acquisitions of Aditro and launch! we are now also active in Denmark, Estonia, Finland, Norway, and Sweden. The intention is to eventually have a presence throughout Europe. This international expansion allows us to grow with our customers, wherever they do business. We are literally close to them, with local payroll & HR professionals in now seventeen European countries. At the same time, this takes us into new markets where we see opportunities in all sectors, both private and public. We are investing heavily in digitalisation and have further broadened our offer so that we can provide our clients with a complete range of services and digital solutions within payroll and HR. This allows us to help all of our customers, from smaller local players to large multinational corporations, and their employees to be successful in business."

More information about net income 

Non-recurring expenses

Restructuring and integration costs amount to EUR 5.4 million and have increased by EUR 2.4 million compared to December 31, 2020, mainly due to the growth plan in the UK, the costs incurred for the integration of Aditro, launch! and Protime into SD Worx and the sale of ASPEX.Acquisition and transaction costs increased by EUR 1.1 million to EUR 1.7 million due to the acquisition of Aditro, Teal Partners and launch! during the first half of 2021.The cost of uncommitted group management share plans is spread evenly over a three-year vesting period. The increase of EUR 1.9 million is related to the share plans issued in FY2020 and FY2021.

Depreciation and amortisation

As of December 31, 2021, amortisation of property, plant and equipment and intangible assets of EUR 48.4 million were recorded, primarily related to the group's significant and ongoing investments in digital solutions (EUR 23.6 million), the amortisation of leased rights of use such as rented buildings and company cars (EUR 21.4 million) and the amortisation of intangible assets acquired in business combinations (EUR 3.4 million).

Financial results

The financial results as of December 31, 2021, is EUR -6.4 million, mainly due to the interest expense on the subordinated bond issued in June 2019 of EUR 80 million, the committed revolving credit facility of EUR 125 million and financial charges on lease obligations.The financial result improved by EUR 2.2 million compared to 2020, which is mainly due to the loss realised as of June 30, 2020, on the sale of the group's cash investments in financial assets under discretionary management.

Taxes

Tax expenses decreased by EUR 7.4 million from EUR 10.1 million to EUR 2.7 million. The significantly reduced effective tax burden is mainly due to the recognition of deferred tax assets on tax losses carried forward in Belgium, which were deemed recoverable as a result of a legal merger of two subsidiaries. A tax ruling was obtained on the tax neutrality of the merger.

Net income

Net income, recorded at EUR 46.8 million, increased significantly compared to the same period last year due to the aforementioned increase in operating profit, higher financial result, and lower effective tax rate.

Further details are included in this report.

External audit

The Auditor, DELOITTE Bedrijfsrevisoren BV, represented by Ben Vandeweyer and Maurice Vrolix, has confirmed that the attached balance sheet of SD Worx NV as of December 31, 2021, and the related income statement and notes for the financial year closed on that date, have not yet been audited and that the Auditor therefore does not express an opinion on them.