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Sweden – Uniflex to raise prices to return to growth following disappointing Q3

21 October 2014

Swedish staffing firm Uniflex AB (UFLXB: SS) yesterday reported revenue of SEK 301.9 million (€32.9 million) for the third quarter ending 30 September 2014, a decrease of -16% compared with SEK 359.5 million (€39.1 million) during the same period last year.

The company reported an operating profit of SEK 12.4 million (€1.4 million), a decrease of -23.5% from SEK 16.2 million (€1.8 million) a year ago. Net income for the period fell by -12.5% to SEK 9.8 million (€1.1 million), down from SEK 11.2 million (€1.2 million) in Q3 2013.

This marks the fifth consecutive quarter of revenue decline, when compared with the same period the previous year.

Jan Bengtsson, Managing Director of Uniflex, commented: “Sales in many of our markets declined, compared with last year, but we were still able to achieve an operating margin in line with last year. The reason for that is that we were successful in our efforts to reduce costs.”

“In order to increase our margins, during the summer we implemented a strategy to change our lowest price point to the correct price. In practice, this means that we will raise the prices for our small and mid-sized customers. It may lead to lower revenue in the short term, but at the same time operating margins will increase.”

“We have also made the decision, as of the fourth quarter this year, to increase our sales and marketing costs to create opportunities to grow revenue. As a result, we predict that we will eventually once again reach our goal to grow faster than the market,” Mr Bengtsson concluded.

Broken down geographically, Sweden remains Uniflex’s largest market reporting revenue of SEK 265.4 million (€28.9 million), a decline of -17.6% from SEK 322.1 million (€35.1 million) in Q3 2013. Norway, the only region to report growth, rose by +7.6% to SEK 25.4 million (€2.8 million), up from SEK 23.6 million (€2.6 million) a year ago.

Revenue from Finland remained unchanged, year-on-year, at SEK 2.4 million (€264,355). A decline of -23.7% was reported in Germany, with revenue falling to SEK 8.7 million (€947,413), down from SEK 11.4 million (€1.2 million) a year ago.