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Sweden – Sales decline as Poolia focuses on profitability and streamlining in Q4

13 February 2014

Poolia (POOLB: SS) reported revenue for the fourth quarter ending 31 December 2013 of SEK 182.2 million (€20.8 million), a fall of -12.2% compared with revenue of SEK 207.7 million (€23.7 million) in Q4 2012.

The company announced an operating loss of SEK 800,000 (€91,155), a substantial improvement on an operating loss of SEK 30.5 million (€3.5 million) last year. Poolia reported a net loss after tax of SEK 300,000 (€34,183), another substantial improvement compared with a net loss after tax of SEK 24.4 million (€2.8 million) a year ago.

On an annual basis, Poolia achieved revenue of SEK 729.1 million (€83.1 million), a year-on-year fall of -17.9% compared with SEK 888.5 million (€101.2 million) in 2012. The company, however, reported an operating profit for the year of SEK 2.4 million (€273,464), compared with an operating loss of SEK 23.2 million (€2.6 million) last year. Profit after tax for 2013 was SEK 2.5 million (€284,858), from an operating loss of SEK 18.8 million (€2.1 million) a year ago.

Poolia announced last year that acting Managing Director and CEO Dag Sundstrӧm would step down from his post on 31 January 2014, and would be replaced by Morten Werner effective from 1 February 2014.

Dag Sundstrӧm commented on the company’s results: “A focused cost reduction programme has been implemented for the support functions and will reduce annual costs by approximately SEK 9 million (€1 million). The programme resulted in restructuring­ costs of SEK 1.5 million (€170,915) in the fourth quarter. Market demand remains weak. However, there were signs of some positive market trends towards the end of the period. Prices continue to be unchanged.”

Poolia Sweden reported an operating loss of SEK 3 million (€341,830), compared with an operating loss of SEK 29.5 million (€3.4 million) for the fourth quarter of 2013. Revenue for the period was SEK 141.2 million (€16.1 million), a fall of -18.5% from SEK 173.2 million (€19.7 million) last year.

Mr Sundstrӧm explained: “Demand for temporary staffing services (in Sweden) is stable but at a low level. Demand for permanent placement has been low compared with the previous year. However, we have seen an increase in permanent placement enquiries in Sweden at the end of the period. Large-scale initiatives to improve profitability have been conducted.”

“Marketing and sales activity has increased significantly as a result of clearer requirements, a substantial increase in sales work and simplified internal processes. The number of employees in the support functions has been reduced in order to reduce costs and allow some increase in the number of sales staff,” he added.

Revenue from Poolia Germany for the fourth quarter grew by +13% to SEK 30.5 million (€3.5 million), up from SEK 26.2 million (€3 million) in Q4 2012.The company reported an operating profit of SEK 1.3 million (€148,126), compared with an operating loss of SEK 1.5 million (€170,915) a year ago.

Poolia Finland also reported a strong fourth quarter, with growth of +26.5% to SEK 10.5 million (€1.2 million) up from SEK 8.3 million (€945,730) last year. Revenue grew by +23% in local currency. The company achieved an operating profit of SEK 900,000 (€102,549), a rise of +80% from an operating profit of SEK 500,000 (€56,971) in 2012.

At the end of the fourth quarter, an agreement was signed with Staffing 360 Solutions Inc. for the acquisition of Poolia's UK business. Subject to the approval of an employee consultation process, which is required under UK law, the business will be transferred on 28 February 2014. Poolia has suffered losses in the UK market for several years and as profitability for the business is not considered imminent, Poolia has made it a priority to develop its operations in the Swedish, Finnish and German markets.

During the fourth quarter, Poolia UK achieved revenue of SEK 8.9 million (€1 million), a fall of -37.8% from SEK 14.2 million (€1.6 million) last year. The company reported a net loss of SEK 1.1 million (€125,338) during Q4 2013, unchanged from a year ago.

Dag Sundstrӧm concluded: “The process of streamlining Poolia's organisation is now completed, and all energy can be channelled towards developing the profitable core business. I wish the incoming CEO every success in this work.”

In trading today, the company’s share price rose +2.7% to SEK 11.60 (€1.32), an increase of +9.1% compared with a year ago. Based on its current share price, the company has a market value of SEK 194.3 million (€22.1 million). 

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