PION Group — Interim / Quarterly Report 2013

Jul 19, 2013

INTERIM REPORT 1 JANUARY – 30 JUNE 2013

Quarterly period April-June

• Poolia's revenue amounted to SEK 204.7 (258.1) million, a decline of 20.7% (19.7% in local currency).
• Operating profit/loss amounted to SEK -5.4 (0.3) million, with an operating margin of -2.6% (0.1%).
• Profit/loss before tax was SEK -5.5 (0.6) million.
• Profit/loss after tax was SEK -4.6 (0.0) million.
• Earnings per share was SEK -0.27 (0.00).
• Cash flow from operations for the quarter amounted to SEK 5.4 (10.2) million.

Other significant events

• Poolia's CEO Monika Elling has resigned and Board member Dag Sundström has taken over as Acting CEO until a new CEO is recruited.
• The subsidiary Talent Eye AB will be sold to Monika Elling following a resolution at an extraordinary general meeting.

From the CEO – "Continued weak but stable market"

Poolia reported an operating profit/loss of SEK -5.4 (SEK 0.3) million for the second quarter of 2013. Revenue for the quarter was SEK 204.7 (258.1) million, a decline of 19.7% in local currency.

Financially, the second quarter was a disappointment, primarily driven by seasonality with fewer working days than other quarters, as well as a high proportion of unoccupied time in certain units. Permanent placement revenues were also generally lower than normal, reflecting less change activity than usual in the business sector. The general market outlook remains relatively weak, with low demand in all markets. Poolia's CEO Monika Elling resigned during the quarter and one-off costs associated with the resignation reduced earnings by SEK 3.7 million. Poolia's restructuring process will continue until the Company is able to show satisfactory results.

Poolia Sweden reported an operating profit/loss of SEK -5.4 (1.4) million for the second quarter of 2013. Revenue was SEK 157.5 (205.3) million, a decline of 23%. Demand for temporary staffing services is stable but at a low level. The outplacement business, which is run by Utvecklingshuset, had an adverse effect on operating profit during the quarter.

Poolia Germany's revenue for the quarter grew by 29% in local currency, which means that Poolia continues to gain market shares. Although operating profit is developing in a positive direction, it is still lower than expected, due to

Interim period January-June

• Poolia's revenue amounted to SEK 418.6 (534.8) million, a decline of 21.7% (20.9% in local currency).
• Operating profit/loss amounted to SEK -2.1 (3.2) million, with an operating margin of -0.5% (0.6%).
• Profit/loss before tax was SEK -2.2 (3.2) million.
• Profit/loss after tax was SEK -2.3 (1.5) million.
• Earnings per share was SEK -0.14 (0.09).
• Cash flow from operations for the period was SEK 11.0 (19.5) million.
• The equity/assets ratio ended the period at 30.2% (33.2%), while the Group's equity per share was SEK 4.50 (6.24).

weaker growth in permanent placement revenue than expected. Earnings continue to be burdened by the costs of building up the office structure.

At Poolia UK, the process of building up the business, mainly in Finance & Accounting, is continuing. While the core business shows positive signs and the organisation has a high level of activity, earnings are suffering from high overhead costs; a situation which will continue for some time.

Poolia Finland's revenue is stable and has outperformed the market. Operating profit is slightly lower than the previous year, primarily due to lower permanent placement revenue.

In spite of the grave situation I look to the future with confidence. Poolia has committed and talented employees who continue to deliver qualified temporary staffing and permanent placement services to satisfied customers.

Dag Sundström Acting Managing Director and CEO

Business concept

Poolia's business concept is to provide companies and organisations with the skills that either temporarily or permanently meet their needs for qualified professionals and outplacement services.

Poolia Quality

Poolia's business is the temporary staffing, permanent placement and outplacement of qualified professionals. We specialise in the areas of Finance & Accounting, Financial Services, Human Resources, Sales & Marketing, IT & Engineering, Office Support and Executive Search. This specialisation focuses our expertise and deepens our commitment to our clients' business operations. We

APRIL-JUNE GROUP

Revenue

The Group's revenue declined by 20.7% to SEK 204.7 (258.1) million. Currency effects had a negative impact of 1.0% on revenue. Temporary staffing is the largest service area. Permanent placement's share of revenue declined from 14% to 13%.

understand our clients' staffing needs, and we have the processes and tests in place to ensure the client gets the right person.

Our experience, specialisation, commitment and working methods combine to create the quality that gives our clients a crucial advantage: employees who not only perform, but also contribute. This is what we call Poolia Quality.

Market conditions

There is a cautious mood in the market. Several competitors are making cuts and adjusting to market conditions. We maintain our positive view of the long-term outlook for the staffing industry.

Earnings

Operating profit/loss amounted to SEK -5.4 (0.3) million, while the operating margin was -2.6% (0.1%). The Group's net financial income/expense was SEK -0.1 (0.3) million. Profit/loss before tax amounted to SEK -5.5 (0.6) million. The Group's tax was SEK 0.9 (-0.6) million.

POOLIA SWEDEN

Revenue

Poolia Sweden's revenue amounted to SEK 157.5 (205.3) million, a decline of 23% compared with the same period the previous year.

There was no change in permanent placement/outplacement's share of revenue during the period, which was 13%.

Earnings

Poolia Sweden's operating profit/loss amounted to SEK -5.4 (1.4) million. The operating margin was -3.4% (0.7%).

The negative operating profit figure for the second quarter was due to fewer billable hours and a lower than planned proportion of permanent placement. Some offices have in fact been over-staffed, which has had an adverse effect on earnings. Staff layoffs have therefore been implemented. The restructuring work to adjust the organisation to lower market demand continued. The number of staffing assignments is stable. Earnings were adversely affected by an unfavourable trend in the outplacement business. Restructuring of the business has been initiated. Earnings were also affected by costs of SEK 3.7 million associated with the departing CEO.

POOLIA GERMANY

Revenue

Poolia Germany's revenue amounted to SEK 28.6 (23.0) million, an increase of 24%. Currency effects had a negative impact of 6% on revenue during the quarter. Permanent placement's share of revenue fell from 20% to 13%, although the proportion varied from office to office.

Earnings

Poolia Germany's operating profit was SEK 0.5 (0.2) million. The operating margin was 1.9% (1.1%).

The German business continues to perform well, with both revenue and operating profit showing positive growth. The increase in revenue was achieved despite a lower than planned proportion for permanent placement and fewer working days than in the other quarters of the year. An adjustment of staffing levels in two of the offices under development has been completed.

POOLIA UK

Revenue

Poolia UK's revenue amounted to SEK 9.6 (20.6) million, a decline of 53%. Currency effects had a negative impact of 4% on revenue during the quarter. There was no change in permanent placement's share of revenue, which was 12%.

Earnings

Poolia UK's operating profit/loss for the period was SEK -1.1 (-2.1) million. The operating margin was -11.0% (-10.3%).

The generational change within Poolia UK continues and market activity is high. A positive outcome will be dependent on further intensive market canvassing, mainly targeting medium-sized and small clients, together with gradual measures to reduce the excessive overhead costs.

POOLIA FINLAND

Revenue

Poolia Finland's revenue amounted to SEK 9.0 (9.2) million. Currency effects had a negative impact of 5% on revenue during the quarter. Permanent placement's share of revenue fell from 20% to 11%.

Earnings

Poolia Finland's operating profit was SEK 0.5 (0.8) million. The operating margin was 6.1% (9.1%).

Operations in Finland continue to be stable and have outperformed the market. The lower operating margin compared with 2012 is attributable to the lower proportion for permanent placement.

JANUARY-JUNE GROUP

Revenue

The Group's revenue declined by 21.7% to SEK 418.6 (534.8) million. Currency effects had a negative impact of 0.9% on revenue. Temporary staffing is the largest service area. Permanent placement's share of revenue increased from 12% to 14%. The chart below shows the Group's revenue by segment during the period.

Earnings

Operating profit/loss amounted to SEK -2.1 (3.2) million, while the operating margin was -0.5% (0.6%). The Group's net financial income/expense was SEK -0.1 (0.0) million. Profit/loss before tax was SEK -2.2 (3.2) million. The Group's tax was SEK -0.1 (-1.7) million.

Liquidity and financing

The Group's cash and cash equivalents at 30 June 2013 were SEK 9.4 (10.7) million. Cash flow from operating activities during the period was SEK 11.0 (19.5) million. The equity/assets ratio at 30 June 2013 was 30.2% (33.2%). Intra-Group transactions with one and the same bank/lender are offset in the consolidated balance sheet. The Parent Company's credit balances or credit utilisation are recognised in the Parent Company. The Group's Swedish business has a joint cash pool and an overdraft facility of SEK 60 (40) million. At 30 June 2013, SEK 4.9 (3.5) million of this amount had been utilised.

Investments

The Group's investments in non-current assets in the period January to June amounted to SEK 1.9 (4.0) million.

The share

The Poolia share is listed on NASDAQ OMX Stockholm AB under the ticker POOL B. The number of shares issued is 17,121,996. The price on the reporting date was SEK 13.00. During the period, 798,625 shares were traded at a total value of SEK 9.5 million.

Dividend policy

The Board of Directors' long-term dividend policy is that the annual dividend shall normally exceed 50% of the Group's profit after tax.

Employees

The average number of full time equivalents was 1,439 (1,768). The total number of employees at 30 June 2013 was 1,539 (1,904). The CEO of Poolia AB resigned during the period. The Acting CEO, Dag Sundström, will head operations until a new CEO is recruited.

Seasonal variations

Number of working days in the year:

	Sweden	UK	Germany	Finland
Jan-Mar	62(64)	63(64)	62(64)	63(63)
Apr-Jun	60(59)	62(60)	60(59)	63(63)
Jul-Sep	66(65)	64(64)	66(64)	63(63)
Oct-Dec	62(62)	63(63)	62(60)	63(63)
Full year	250(250)	252(251)	250(247)	252(252)

Parent Company

Group management, development and financial and IT management are centralised in the Parent Company. All Parent Company expenses are allocated to the operating segments. Revenue during the period was SEK 19.4 (13.0), million. Profit/loss after financial items was SEK 0.4 (-4.1) million. A dividend of SEK 2.1 million was received from Poolia Finland.

Significant risks and uncertainties

Risks and risk management are described in Poolia's 2012 Annual Report. The risks can be summarised as economic fluctuations, dependence on clients and individuals, legislation and regulations, and financial risks. Significant risks and uncertainties at 30 June 2013 were unchanged from those at 31 December 2012.

Events after the end of the period

There are no other significant events to report.

Related party transactions

There were no related party transactions during the period that had a significant effect on the Company's financial position and earnings.

Under an agreement dated 26 June 2013, retiring CEO Monika Elling has an option to acquire the operations of the subsidiary Talent Eye AB, subject to the approval of an Extraordinary General Meeting of Poolia AB. Poolia will not recognise revenue or earnings from Talent Eye after 30 June 2013.

	2013	2012	2013	2012	2012
Amounts in SEK millions	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Operating income	204.7	258.1	418.6	534.8	981.4
Operating expenses
Staff costs	-191.3	-234.3	-383.7	-482.2	-906.3
Other expenses	-17.7	-21.9	-34.9	-46.4	-93.6
Depreciation, amortisation and impairment of assets	-1.1	-1.6	-2.1	-3.0	-11.4
Operating profit/loss	-5.4	0.3	-2.1	3.2	-29.9
Financial items	-0.1	0.3	-0.1	0.0	0.2
Profit/loss before tax	-5.5	0.6	-2.2	3.2	-29.7
Tax	0.9	-0.6	-0.1	-1.7	4.2
Profit/loss for the period	-4.6	0.0	-2.3	1.5	-25.5
Other comprehensive income
Items to be transferred to income statement
Translation differences	1.4	0.2	0.2	-0.2	-1.0
Total comprehensive income for the period	-3.2	0.2	-2.1	1.3	-26.5
Operating margin, %	-2.6	0.1	-0.5	0.6	-3.0
Profit margin, %	-2.7	0.2	-0.5	0.6	-3.0
Profit/loss for the period attributable to:
Shareholders of the Parent	-4.6	0.0	-2.3	1.5	-25.5
Non-controlling interests	0.0	0.0	0.0	0.0	0.0
Basic and diluted earnings per share, SEK	-0.27	0.00	-0.14	0.09	-1.49
Total comprehensive income attributable to:
Shareholders of the Parent	-3.2	0.2	-2.1	1.3	-26.5
Non-controlling interests	0.0	0.0	0.0	0.0	0.0

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED BALANCE SHEET

Amounts in SEK millions	30 June 2013	30 June 2012	31 Dec 2012
Assets
Non-current assets
Goodwill	27.8	27.8	27.7
Other non-current assets	10.3	18.6	10.4
Deferred tax assets	14.9	10.8	14.8
Current assets
Current receivables	192.3	253.9	209.5
Cash and cash equivalents	9.4	10.7	4.0
Total assets	254.7	321.8	266.4
Equity and liabilities
Equity	77.0	106.9	79.2
Non-controlling interest in equity	0.0	0.0	0.0
Non-current liabilities	0.9	1.9	0.9
Current liabilities to credit institutions	0.0	0.0	3.7
Other current liabilities	176.8	213.0	182.6
Total equity and liabilities	254.7	321.8	266.4
Pledged assets and contingent liabilities	7.8	27.2	8.7

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	2013	2012	2013	2012	2012
Amounts in SEK millions	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Profit/loss before tax	-5.5	0.6	-2.2	3.2	-29.7
Adjustments	1.1	1.7	2.2	3.0	12.1
Income tax paid	0.8	1.5	-2.6	-4.1	-8.1
Cash flow from operating activities before changes in working capital	-3.6	3.8	-2.6	2.1	-25.7
Increase (-)/decrease (+) in current receivables	6.4	-0.1	19.5	9.6	48.9
Increase (+)/decrease (-) in current liabilities	2.6	6.5	-5.9	7.8	-12.5
Cash flow from operating activities	5.4	10.2	11.0	19.5	10.7
Cash flow from investing activities	-1.0	-3.9	-1.9	-4.3	-5.4
Cash flow from financing activities	0.0	-7.4	-3.7	-11.8	-8.0
Cash flow for the period	4.4	-1.1	5.4	3.4	-2.7
Cash and cash equivalents at beginning of period	3.8	11.7	4.0	7.5	7.5
Exchange differences	1.2	0.1	0.0	-0.2	-0.8
Cash and cash equivalents at end of period	9.4	10.7	9.4	10.7	4.0

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	2013	2012	2012
Amounts in SEK million	Jan-Jun	Jan-Jun	Jan-Dec
Opening balance	79.2	113.1	113.1
Dividend	-	-7.4	-7.4
Total comprehensive income for the period attributable to shareholders of the Parent	-2.1	1.3	-26.5
Closing balance attributable to shareholders of the Parent	77.0	106.9	79.2
Non-controlling interest in equity	0.0	0.0	0.0
Closing balance including non-controlling interest	77.0	106.9	79.2

CONDENSED STATEMENT OF COMPREHENSIVE INCOME – PARENT COMPANY

	2013	2012	2013	2012	2012
Amounts in SEK million	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Net sales	11.9	6.4	19.4	13.0	28.3
Operating expenses
Staff costs	-8.3	-5.1	-12.3	-10.1	-16.0
Other expenses	-3.7	-3.8	-7.3	-7.3	-19.7
Depreciation, amortisation and impairment of assets	-0.7	-1.1	-1.4	-2.2	-9.9
Operating profit/loss	-0.8	-3.6	-1.6	-6.6	-17.3
Financial items	2.0	0.0	2.0	2.5	2.6
Profit/loss after financial items	1.2	-3.6	0.4	-4.1	-14.7
Appropriations	-	-	-	-	4.9
Tax	0.2	0.9	0.4	1.8	2.9
Profit/loss for the period	1.4	-2.7	0.8	-2.3	-6.9
Statement of comprehensive income Profit/loss for the period Other comprehensive income	1.4 -	-2.7 -	0.8 -	-2.3 -	-6.9 -
Total comprehensive income for the period	1.4	-2.7	0.8	-2.3	-6.9

CONDENSED BALANCE SHEET – PARENT COMPANY

Amounts in SEK million	30 June 2013	30/06/2012	31 Dec 2012
Assets
Non-current assets
Investments in Group companies	24.4	24.3	24.4
Other non-current assets	6.9	12.9	7.9
Current assets
Current receivables	65.8	70.3	65.2
Cash and bank balances	0.0	0.0	0.0
Total assets	97.1	107.5	97.5
Equity and liabilities
Equity	67.8	71.7	67.0
Untaxed reserves	-	4.9	-
Provisions	1.2	0.5	1.2
Current liabilities to credit institutions	11.5	17.6	13.0
Other current liabilities	16.6	12.8	16.3
Total equity and liabilities	97.1	107.5	97.5
Pledged assets and contingent liabilities	15.1	14.6	15.1

OVERVIEW OF KEY FINANCIAL RATIOS FOR THE QUARTER

	2013	2013	2012	2012	2012	2012	2011	2011
	Apr-Jun	Jan-Mar	Oct Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct Dec	Jul-Sep
Operating income3	204.7	214.0	228.8	217.8	258.1	276.7	292.0	263.8
Growth3, %	-20.7	-22.7	-21.7	-17.4	-8.9	-2.4	-1.2	7.5
Growth in local currency3, %	-19.7	-22.0	-20.9	-16.6	-9.5	-2.6	-1.0	8.7
Operating margin3, %	-2.6	1.6	-14.1	-0.3	0.1	1.0	-0.6	1.2
Profit margin3, %	-2.7	1.5	-14.0	-0.4	0.2	0.9	-0.5	1.1
Return on capital employed1, %	-37.6	-29.4	-29.1	1.6	4.9	9.2	15.5	-24.2
Return on total assets1, %	-12.0	-9.9	-9.9	0.6	1.6	3.3	5.6	-9.8
Return on equity1, %	-32.0	-25.4	-26.5	1.9	4.7	7.8	12.9	-33.5
Equity/assets ratio, %	30.2	31.4	29.7	36.0	33.2	35.4	34.9	34.8
Risk-bearing capital, %	30.2	31.4	29.7	36.5	33.8	35.8	35.3	35.3
Number of FTEs, average3	1439	1438	1572	1690	1776	1760	1877	1921
Revenue per employee3, SEK 000	142	149	146	129	145	157	156	137
Number of shares, average (000)	17122	17122	17122	17122	17122	17122	17122	17122
Number of shares, outstanding (000)	17122	17122	17122	17122	17122	17122	17122	17122
Basic earnings per share2, SEK	-0.27	0.13	-1.53	-0.05	0.00	0.08	0.08	0.13
Equity per share, SEK	4.50	4.69	4.62	6.13	6.24	6.66	6.60	6.58

¹Trailing 12 months.

²No dilutive effects.

³Group, excluding Dedicare

OVERVIEW OF KEY FINANCIAL RATIOS FOR THE PERIOD

	2013	2012
	Jan-Jun	Jan-Jun
Operating margin, %	-0.5	0.6
Profit margin, %	-0.5	0.6
Basic earnings per share1, SEK	-0.14	0.09
Equity per share, SEK	4.50	6.24

¹No dilutive effects

DEFINITIONS

Risk-bearing capital

Equity plus non-controlling interests and provisions for taxes as a percentage of total assets.

Number of FTEs, average

The total number of hours worked during the period divided by the normal number of working hours for a full-time employee.

Return on equity

Profit/loss after tax divided by average equity.

Return on capital employed

Profit/loss after financial items plus finance costs divided by average capital employed.

Return on total assets

Profit/loss after financial items plus finance costs divided by average total assets.

Equity per share

Equity divided by the number of shares outstanding.

Revenue per employee

Operating income divided by the average number of FTEs.

Earnings per share

Profit/loss for the period after tax divided by the average number of shares.

Operating margin

Operating profit/loss as a percentage of operating income.

Equity/assets ratio

Equity, including non-controlling interests, as a percentage of total assets.

Capital employed

Total assets less non-interest-bearing liabilities, including provisions for taxes.

Profit margin

Profit/loss after financial items as a percentage of operating income.

Operating segments

Poolia's segment reporting is based on internal reporting, which means that the segment reporting format is geographical regions.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, and for which separate financial information is available. The operating segment's operating results are reviewed regularly by the Company's

REVENUE BY OPERATING SEGMENT

chief operating decision maker, i.e. the Poolia Group's management team, in order to allocate resources to the segment and assess its performance.

Poolia's geographical segments are Sweden, Finland, Germany and the UK. With effect from 2013, all Parent Company expenses are allocated to the operating segments.

	2013	2012	2013	2012	2012
SEK millions	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Poolia Sweden	157.5	205.3	325.2	427.9	773.0
Poolia UK	9.6	20.6	20.3	44.4	76.9
Poolia Germany	28.6	23.0	55.4	44.7	97.1
Poolia Finland	9.0	9.2	17.7	17.8	34.3
Total revenue	204.7	258.1	418.6	534.8	981.4

OPERATING PROFIT/LOSS BY OPERATING SEGMENT

	2013	2012	2013	2012	2012
SEK millions	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Poolia Sweden	-5.4	1.4	-1.3	3.2	-30.5
Poolia UK	-1.1	-2.1	-2.2	-2.0	-2.7
Poolia Germany	0.5	0.2	0.5	0.6	0.7
Poolia Finland	0.5	0.8	0.9	1.3	2.7
Total operating profit/loss	-5.4	0.4	-2.1	3.2	-29.9

Accounting policies

The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act, and for the Parent Company in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. Unless specified otherwise below, the accounting policies applied for the Group and the Parent Company are consistent with the accounting policies applied when preparing the most recent annual report.

New and amended IFRS standards and IFRIC interpretations which come into effect in 2013 have not had any significant effect on the Group's financial reporting.

The Board of Directors and CEO hereby certify that the interim report provides a true and fair view of the operations, financial position and financial performance of the Parent Company and the Group, and describes the material risks and uncertainties to which the Parent Company and Group companies are exposed.

Future reporting dates

Interim report Jan-Sep 2013	24 October at 7 a.m.
Year-end report 2013	13 February 2014 at 7 a.m.

Stockholm, 18 July 2013

Björn Örås Chairman of the Board

Monica Caneman Board member

Anna Söderblom Board member

Lennart Pihl Board member

Dag Sundström Board member

Acting Managing Director and CEO

This interim report has not been reviewed by the Company's auditors.

For further information, please contact: Dag Sundström, Acting Managing Director and CEO, tel: +46 (0)70-511 64 58

POOLIA AB (PUBL) Kungsgatan 57 A Box 207 SE-104 24 Stockholm Tel: +46 (0)8-555 650 00 Fax: +46 (0)8-555 650 01 Corp. ID no.: 556447-9912 www.poolia.com