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View All NewsSweden – Wise Group Q3 revenue rises 9.8%, but profits slip
Wise Group (WISE:SS), the Swedish staffing firm reported revenue on Friday for the second quarter ending 30 September 2018 of SEK 196.0 million (€19.0 million), an increase of 9.8% compared with the same quarter last year.
| (SEK millions) | Q3 2018 | Q3 2017 | Change | Q3 2018 (€ millions) |
| Revenue | 196.0 | 178.5 | 9.8% | 19.0 |
| EBITDA | 9.6 | 10.4 | -7.6% | 0.9 |
| Operating Profit | 6.2 | 7.2 | -12.9% | 0.6 |
| Profit for the Period | 4.4 | 4.1 | 7.3% | 0.4 |
During the quarter, the group saw a number of personnel changes. On August 2018, Stefan Wikström, CEO of subsidiary Brilliant Future and a member of the Wise Group's management team, resigned from his role. A search is underway for a replacement.
Last week, Wise Group’s executive search subsidiary K2 Search Group announced that it had appointed Jonas Konstantinov as new CEO of K2 Search with effect from 1 January 2019.
Ingrid Höög, CEO of the Wise Group, said “profitability did not meet our expectations” during the period. “The quarter has always been difficult to assess as it includes summer months with lower demand and holiday withdrawals,” Höög said.
“The decline in profits can also be linked to lower sales and less efficient processes in the Recruitment & Consultancy segment, especially to the development of the renamed recruitment companies K2 Search and SalesOnly,” Höög said.
Höög added that the HR Consultancy & Leadership segment “continues to excel positively”.
“It is the subsidiary Wise Consulting, which shows strong sales growth and improved profitability,” Höög said. “To some extent, the profitability improvement is related to the fact that we no longer need to bear losses in the Danish operations.”
Revenue by business segment was broken down during Q3 2018 as follows:
| (SEK millions) | Q3 2018 | Q3 2017 | Change | Q3 2018 (€ millions) |
| Recruitment & Consultancy | 121.1 | 115.4 | 4.9% | 11.7 |
| HR Consultancy and Leader Development | 37.6 | 30.7 | 22.4% | 3.6 |
| Digital HR Services | 37.2 | 32.3 | 15.1% | 3.6 |
Wise Group has operations in Sweden and Finland. Geographically, revenue was broken down as follows. The previous operations in Denmark have been largely decommissioned though there are still some activities still being handled from Denmark which were reported below.
| (SEK millions) | Q3 2018 | Q3 2017 | Change | Q3 2018 (€ millions) |
| Sweden | 191.1 | 173.3 | 10.2% | 18.5 |
| Finland | 4.4 | 2.8 | 57.1% | 0.4 |
| Denmark | 0.4 | 2.4 | -80.0% | 0.0 |
“During the rest of the year we will continue to focus on developing customer segmentation and sales to control the right service and product mix,” Höög said. “All in all, Wise Group has good prospects to complete 2018 in a good way and enter the new year with a strong team of all levels within the organisation.”
In trading last week, Wise Group shares closed at SEK 48.50 (€4.70), down 4.15% on the day. Based on its current share price the company has a market value of SEK 345.89 million (€33.5 million).