PION Group — Interim / Quarterly Report 2016

Feb 21, 2017

YEAR-END REPORT 1 JANUARY – 31 DECEMBER 2016

Quarterly period October-December

• Poolia's revenue amounted to SEK 198.9 (210.2) million, a decline of 5%.
• Operating profit amounted to SEK 8.8 (6.9) million, with an operating margin of 4.4% (3.3%).
• Profit before tax was SEK 8.8 (11.1) million.
• Profit after tax was SEK 5.6 (8.2) million.
• Earnings per share amounted to SEK 0.33 (0.48).
• Cash flow from operations for the quarter improved to SEK 23.4 (11.4) million.
• Poolia Sweden reported restructuring costs of SEK 0.8 (0.3) million during the quarter.

Discontinued operations

• Poolia's UK operations were divested on 28 February 2014. The only costs remaining in the companies are administrative expenses and a tax provision for the gain on the sale of the operations.
• Profit/loss from discontinued operations was SEK -0.4 (-0.7) million for the fourth quarter and SEK -2.0 (-0.7) million for the period January-December.
• Cash flow from discontinued operations in the period January-December was SEK -0.8 (-0.0) million.

From the CEO – Continuing positive earnings growth in operations

Poolia has delivered its best Q4 operating profit since 2008. The operating profit of SEK 8.8 million represents an increase of 28% compared with the same quarter in 2015. The operating margin of 4.4% is close to our long-term target and is the highest for a fourth quarter since 2008.

Revenue for the quarter fell by 5%, which is unsatisfactory and is partly due to our clients increasingly employing our temps, and a noticeable shortage of candidates. We work constantly to develop our client portfolio and have successfully increased profitability in new business.

During 2016, Poolia's revenue increased by 3.6% and operating profit by 44% compared with 2015. Our restructuring programme, which started three years ago, is producing good earnings growth.

Profit before tax for the full year 2016 was SEK 20.5 million, which is 28% better than for 2015 excluding a non-recurring currency gain of SEK 6.5 million in 2015 attributable to a prior year. The 2016 figure includes restructuring costs of SEK 6.4 million.

Full year January-December, continuing operations

• Revenue amounted to SEK 784.7 (757.1) million, an increase of 3.6%.
• Operating profit amounted to SEK 23.0 (16.0) million, with an operating margin of 2.9% (2.1%).
• Profit before tax was SEK 20.5 (22.5) million.
• Profit after tax was SEK 13.7 (16.0) million.
• Earnings per share amounted to SEK 0.80 (0.93).
• Cash flow from operations for the period was SEK 13.3 (17.4) million.
• Poolia Sweden reported restructuring costs of SEK 6.4 (5.3) million during the period.
• The equity/assets ratio ended the period at 33.2% (32.4%), and the Group's equity per share was SEK 4.76 (4.41).
• The Board proposes a dividend of SEK 0.6 per share, with a total value of SEK 10,273,198.

The economies of Germany and Sweden are still booming, creating a good demand for our services, but also leading to a shortage of candidates. To achieve growth, we shall intensify our marketing to the candidate market and continue to build up our sales organisation.

Poolia's long-term goals and strategies stand firm.

Morten Werner Managing Director and CEO

Business concept

Poolia's business concept is to provide companies and organisations with the skills that meet their temporary or permanent needs for qualified professionals.

Poolia Quality

Poolia's business is based on the temporary staffing and permanent placement of qualified professionals. We specialise in the areas of Finance & Accounting, IT, Office Support, Human Resources, Sales & Marketing, Life Science & Engineering, Legal and Executive Search. This specialisation focuses our expertise and sharpens our knowledge of our clients' business operations. We 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.

OCTOBER – DECEMBER GROUP

Revenue

The Group's revenue declined by 5% to SEK 198.9 (210.2) million. Exchange rate changes had a negative impact of -0.8% (0.8%) on revenue. Temporary staffing is the largest service area. Permanent placement's share of revenue increased from 12% to 13%.

Market conditions

It is our assessment that demand for staffing and recruitment services in Sweden and Germany is at a high level and stable. We believe that the Finnish economy is slowly beginning to move in a positive direction.

The purchasing managers' index for services in Sweden increased during the quarter from a level of 56.9 in September to 59.9 in December. The main drivers are an increased order intake and higher employment. This can be interpreted as indicative that demand is likely to remain at a high level in the coming quarters.

We maintain our positive view of the long-term outlook for the staffing industry.

Earnings

Operating profit amounted to SEK 8.8 (6.9) million, with an operating margin of 4.4% (3.3%). The Group's net financial items amounted to SEK 0.0 (4.2) million. Profit before tax was SEK 8.8 (11.1) million. The Group's tax expense was SEK -3.2 (-2.9) million.

POOLIA SWEDEN

Revenue

Poolia Sweden's revenue for the quarter amounted to SEK 140.9 (150.2) million, a decline of 6% compared with the same quarter the previous year.

Permanent placement's share of revenue was 13% (13%) during the quarter.

Earnings

Poolia Sweden's operating profit was SEK 2.9 (1.4) million. The operating margin was 2.1% (0.9%).

Poolia Sweden's operating profit has improved by 107% from the previous year. Growth in revenue is unfortunately negative. Permanent placement revenue is still at a high level. Poolia Sweden's share of Group revenue decreased from 71.5% to 70.9% compared to the fourth quarter in 2015.

Poolia Sweden incurred restructuring costs of SEK 0.8 (0.3) million during the quarter. The corresponding figure for the full year 2016 is SEK 6.4 (5.3) million.

Poolia Sweden's operating profit for the full year 2016 was SEK 5.1 million. This corresponds to an improvement of SEK 6.7 million from the previous year and is positive for the first time since 2011.

POOLIA GERMANY

Revenue

Poolia Germany's revenue for the quarter amounted to SEK 48.2 (47.6) million, an increase of 1%. Exchange rate changes had a negative impact of -3% (3%) on revenue. In local currency, revenue increased by 4%. Permanent placement's share of revenue increased from 11% to 12%.

Earnings

Poolia Germany's operating profit was SEK 5.2 (5.5) million. The operating margin was 10.8% (11.6%).

Poolia Germany's positive development continues. More and more of the offices are showing positive development and good stability in revenue and expenses. Despite intense competition and economic conditions that do not favour growth, we are managing to maintain our revenue and earnings. Growth in permanent placement revenue was 7% and in temporary staffing revenue 4% during the quarter. The candidate market is very difficult, as Germany's unemployment is below 1% in our occupational categories.

POOLIA FINLAND

Revenue

Poolia Finland's revenue for the quarter amounted to SEK 9.8 (12.4) million, a decline of 21%. Exchange rate changes had a negative impact of -3% (2%) on revenue. Permanent placement's share of revenue increased from 5% to 13%.

Earnings

Poolia Finland's operating profit was SEK 0.7 (0.0) million, with an operating margin of 7.1% (0.0%).

Our operations have continued to face difficulties in maintaining revenue, but with cost savings and permanent placement revenue, they have managed to achieve a positive result and an acceptable operating margin. Our earnings improvement measures for Finland continue.

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 revenue and incur expenses, and for which separate financial information is available. The operating segment's operating results are reviewed regularly by the Company's chief operating decision maker, i.e. the Poolia Group's management group, in order to allocate resources to the segment and assess its performance.

REVENUE PER OPERATING SEGMENT

	2016	2015	2016	2015
SEK millions	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Poolia Sweden	140.9	150.2	552.7	528.6
Poolia Germany	48.2	47.6	190.1	178.6
Poolia Finland	9.8	12.4	41.9	49.9
Total revenue	198.9	210.2	784.7	757.1

OPERATING PROFIT/LOSS PER OPERATING SEGMENT

	2016	2015	2016	2015
SEK millions	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Poolia Sweden	2.9	1.4	5.1	-1.6
Poolia Germany	5.2	5.5	17.0	16.4
Poolia Finland	0.7	0.0	0.9	1.2
Total operating profit/loss, continuing operations	8.8	6.9	23.0	16.0
Discontinued operations
Poolia UK	-0.6	0.0	-0.7	-0.7
Total operating profit/loss	8.8	6.9	22.3	15.3
Reversal of discontinued operations	0.6	0.0	0.7	0.7
Financial items	-1.0	2.4	-2.5	6.5
Profit before tax and discontinued operations	8.4	9.3	20.5	22.5

Poolia's geographical segments are Sweden, Finland and Germany. All Parent Company expenses are allocated to the operating segments.

JANUARY – DECEMBER GROUP

Revenue

The Group's revenue for continuing operations increased by 4% to SEK 784.7 (757.1) million. Currency effects had a positive impact of 0.5% on revenue. Temporary staffing is the largest service area. Permanent placement's share of revenue increased to 12% (11%). The chart below shows the Group's revenue by segment during the period.

Earnings

Operating profit amounted to SEK 23.0 (16.0) million, with an operating margin of 2.9% (2.1%). The Group's net financial items amounted to SEK -2.5 (6.5) million. The positive net financial items during 2015 were due to a currency effect. Profit before tax was SEK 20.5 (22.5) million. The Group's tax expense was SEK -6.8 (-6.5) million.

Poolia incurred restructuring costs of SEK 6.4 (5.3) million during the period.

Liquidity and financing

The Group's cash and cash equivalents at 31 December 2016 were SEK 36.6 (20.2) million. Cash flow from operations for the period was SEK 13.3 (17.4) million and was primarily attributable to a reduction in current liabilities. The equity/assets ratio at 31 December 2016 was 33.2% (32.4%). Group transactions with one and the same lender are offset in the consolidated balance sheet. The Parent Company's credit balances and credit utilisation are recognised in the Parent Company's financial statements. The Group's Swedish business has a joint cash pool and an overdraft facility of SEK 40 (40) million. At 31 December 2016, SEK 14.2 (1.9) million of this amount had been utilised.

A dividend of SEK 8.5 (0.0) million was paid to shareholders in the second quarter of 2016.

Investments

The Group's investments in non-current assets during the period were SEK 1.4 (11.8) million. The previous year's investments included Joblink, for which the cost of acquisition was SEK 10.7 million.

The share

Poolia AB has a total of 17,121,996 issued shares, 13,098,181 of which are class B shares listed on NASDAQ OMX Stockholm AB under the ticker POOL B. The price on the reporting date was SEK 15.60. During the period, 6,197,369 shares were traded at a total value of SEK 87.3 million.

Employees

The average number of full-time equivalents was 1,359 (1,353). The total number of employees at 31 December 2016 was 1,517 (1,551).

Seasonal variations

Number of working days in 2016:

	Sweden	Germany	Finland
Jan-Mar	61(62)	60(63)	63(63)
Apr-Jun	62(59)	64(59)	63(63)
Jul-Sep	66(66)	66(66)	63(63)
Oct-Dec	64(63)	62(65)	63(63)
Full year	253(250)	252(253)	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 16.8 (20.4) million. Profit/loss after financial items was SEK 0.2 (-1.4) million.

Significant risks and uncertainties

Risks and risk management are described in Poolia's 2015 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 31/12/2016 are unchanged from those at 31/12/2015.

Events after the end of the period

There were no significant events to report after the end of the period.

Related party transactions

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

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME

	2016	2015	2016	2015
Amounts in SEK millions	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Operating income	198.9	210.2	784.7	757.1
Operating expenses
Staff costs	-176.1	-187.5	-696.8	-680.0
Other expenses	-13.1	-15.0	-61.2	-58.2
Depreciation and amortisation of assets	-0.9	-0.8	-3.7	-2.9
Operating profit/loss	8.8	6.9	23.0	16.0
Finance income	0.0	4.3	0.0	6.8
Finance costs	0.0	-0.1	-2.5	-0.3
Profit/loss before tax	8.8	11.1	20.5	22.5
Tax	-3.2	-2.9	-6.8	-6.5
Profit/loss for the period from continuing operations	5.6	8.2	13.7	16.0
Discontinued operations
Profit/loss for the period from discontinued operations	-0.4	-0.7	-2.0	-0.7
Profit/loss for the period	5.2	7.5	11.7	15.3
Other comprehensive income
Items that will be reclassified to the income statement
Translation differences	0.9	-1.2	2.9	-7.6
Total comprehensive income for the period	6.1	6.3	14.6	7.7
Operating margin, %	4.4	3.3	2.9	2.1
Profit margin, %	4.4	5.3	2.6	3.0
Profit/loss for the period from continuing operations attributable to:
Shareholders of the Parent	5.6	8.2	13.7	16.0
Non-controlling interests	0.0	0.0	0.0	0.0
Basic and diluted earnings per share, SEK
Earnings per share from continuing operations
and discontinued operations	0.30	0.44	0.68	0.89
Earnings per share from continuing operations	0.33	0.48	0.80	0.93
Total comprehensive income attributable to:
Shareholders of the Parent	6.1	6.3	14.6	7.7
Non-controlling interests	0.0	0.0	0.0	0.0

CONDENSED CONSOLIDATED BALANCE SHEET

Amounts in SEK millions	31/12/2016	31/12/2015
Assets
Non-current assets
Goodwill	18.7	18.5
Other non-current assets	5.1	7.3
Deferred tax assets	11.2	11.6
Current assets
Current receivables	174.4	175.2
Cash and cash equivalents	36.6	20.2
Total assets	246.0	232.8
Equity and liabilities
Equity	81.6	75.5
Non-controlling interests	0.0	0.0
Total equity	81.6	75.5
Current liabilities
Interest-bearing liabilities	14.2	1.9
Other current liabilities	150.2	155.4
Total equity and liabilities	246.0	232.8

CONDENSED CONSOLIDATED CASH

FLOW STATEMENT

	2016	2015	2016	2015
Amounts in SEK millions	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Profit/loss before tax	8.8	11.1	20.5	22.5
Adjustments	0.9	-5.9	6.0	-3.8
Income tax paid	-1.3	4.6	-6.5	-1.5
Cash flow from operating activities before changes in working capital	8.4	9.8	20.0	17.2
Increase (-)/decrease (+) in current receivables	7.0	-9.2	2.8	-11.7
Increase (+)/decrease (-) in current liabilities	8.0	10.8	-9.5	11.9
Cash flow from operating activities	23.4	11.4	13.3	17.4
Cash flow from investing activities	-0.5	0.0	-1.4	-11.8
Dividend to shareholders	0.0	0.0	-8.5	0.0
Borrowings/Repayment of borrowings	-14.7	8.2	12.2	-3.6
Cash flow from financing activities	-14.7	-4.1	3.7	-3.6
Cash flow for the period	8.2	7.3	15.6	2.0
Cash flow for the period, discontinued operations	-0.5	0.0	-0.8	0.0
Cash and cash equivalents at beginning of period	28.7	13.5	20.2	19.0
Exchange differences	0.2	-0.6	1.6	-0.8
Cash and cash equivalents at end of period	36.6	20.2	36.6	20.2

	2016	2015
Amounts in SEK millions	Jan-Dec	Jan-Dec
Opening balance	75.5	67.8
Total comprehensive income for the period attributable to shareholders of the Parent	14.6	7.7
Dividend to shareholders of the Parent	-8.5	-
Closing balance attributable to shareholders of the Parent	81.6	75.5
Non-controlling interests	0.0	0.0
Total equity, closing balance	81.6	75.5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED INCOME STATEMENT – PARENT COMPANY

	2016	2015	2016	2015
Amounts in SEK millions	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Operating income	3.0	5.4	16.8	20.4
Operating expenses
Staff costs	-2.8	-2.9	-10.2	-10.6
Other expenses	-1.0	-2.8	-8.6	-11.4
Depreciation, amortisation and impairment of assets	-0.1	-0.2	-0.7	-0.6
Operating profit/loss	-0.9	-0.5	-2.7	-2.2
Finance income	5.7	0.0	5.7	0.0
Finance costs	-0.1	1.0	-2.8	0.8
Profit/loss after financial items	4.7	0.5	0.2	-1.4
Group contributions	8.6		8.6	0.7
Tax	-1.6	-1.2	-0.6	-0.8
Profit/loss for the period	11.7	-0.7	8.2	-1.5
Other comprehensive income	-	-	-	-
Total comprehensive income for the period	11.7	-0.7	8.2	-1.5

CONDENSED BALANCE SHEET – PARENT COMPANY

Amounts in SEK millions	31/12/2016	31/12/2015
Assets
Non-current assets
Investments in Group companies	23.6	23.6
Deferred tax assets	3.1	3.7
Other non-current assets	0.8	1.0
Current assets
Current receivables	0.6	1.0
Receivables from Group companies	51.6	37.7
Total assets	79.7	67.0
Equity and liabilities
Equity	17.3	17.7
Liabilities to Group companies	44.6	42.7
Interest-bearing liabilities	14.2	1.9
Other current liabilities	3.6	4.7
Total equity and liabilities	79.7	67.0

THE GROUP'S KEY FINANCIAL RATIOS BY QUARTER ¹

	2016	2016	2016	2016	2015	2015	2015	2015
	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Operating income	198.9	183.6	201.9	200.3	210.2	177.7	187.0	182.2
Growth, %	-5.3	3.3	8.0	9.9	17.3	9.0	5.8	0.3
Growth in local currency, %	-5.0	-0.2	8.0	10.1	16.5	8.2	4.8	-1.4
Operating margin, %	4.4	3.2	3.9	0.2	3.3	2.4	0.8	1.9
Profit margin, %	4.4	2.6	3.2	0.2	5.3	3.7	0.7	1.9
Return on capital employed1, %	26.7	31.6	34.0	23.4	30.6	10.1	14.6	7.8
Return on total assets1, %	8.8	10.2	10.2	8.1	10.2	3.4	4.5	2.6
Return on equity1, %	14.9	20.3	22.0	16.9	21.3	13.9	10.3	2.2
Equity/assets ratio, %	33.2	31.0	29.5	31.3	32.4	29.6	30.4	32.7
Risk-bearing capital, %	33.2	31.0	29.5	36.6	32.4	30.5	30.4	32.7
Number of FTEs, average	1,271	1,198	1,247	1,276	1,275	1,211	1,170	1,150
Revenue per employee, SEK 000	157	153	162	157	165	147	160	158
Number of shares, average (000)	17,122	17,122	17,122	17,122	17,122	17,122	17,122	17,122
Number of shares, outstanding (000)	17,122	17,122	17,122	17,122	17,122	17,122	17,122	17,122
Basic earnings per share2, SEK	0.33	0.21	0.26	0.00	0.48	0.26	0.06	0.14
Equity per share, SEK	4.76	4.41	4.16	4.35	4.41	4.05	4.11	4.06

¹ Trailing12 months, incl. discontinued operations.

² No dilutive effects.

THE GROUP'S KEY FINANCIAL RATIOS BY PERIOD

	2016	2015
	Jan-Dec	Jan-Dec
Operating margin, %	2.9	2.1
Profit margin, %	2.6	3.0
Basic earnings per share1, SEK	0.68	0.89
Equity per share, SEK	4.76	4.41

¹ No dilutive effects.

NOTES

Note 1 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 2016 have not had any significant effect on the Group's financial reporting.

Note 2 Pledged assets and contingent liabilities

	Group		Parent company
Amounts in SEK millions	31/12/2016	31/12/2015	31/12/2016	31/12/2015
Pledged assets
Investments in Group companies	17.4	22.0	14.2	14.2
Pledged endowment insurance	1.4	1.4	1.4	1.4
Contingent liabilities
Lease guarantee	1.4	1.5	-	-

DEFINITIONS

In this interim report, Poolia presents certain financial performance measures that are not defined under IFRS. Poolia believes that these measures provide useful supplementary information for investors and Company management as they allow for an evaluation of relevant trends. As not all companies calculate financial performance measures in the same way, these are not always comparable with measures used by other companies. These financial performance measures should therefore not be seen as a replacement for measures defined under IFRS. In the key ratios below, the average is the sum of the opening and closing values divided by two.

KEY RATIOS DEFINED UNDER IFRS

Earnings per share

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

KEY RATIOS NOT DEFINED UNDER IFRS

Growth

Increase in operating income compared with the same period the previous year, expressed as a percentage.

Risk-bearing capital

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

Return on equity

Profit/loss after tax divided by average equity.

Return on capital employed

Profit/loss before tax plus finance costs divided by average capital employed.

Return on total assets

Profit/loss before tax 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.

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 total current liabilities, including provisions for taxes.

Profit margin

Profit/loss before tax as a percentage of operating income.

Operating profit/loss

Operating income less operating expenses.

OPERATIONAL MEASURES

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.

Restructuring costs

Costs that are not considered part of normal operations and are determined to be non-recurring. They are reported under operating expenses in the income statement.

Proposed appropriation of profits

According to Poolia's dividend policy, the annual dividend shall normally exceed 50% of the Group's profit after tax. The Group's profit after tax for continuing operations for the 2016 financial year is SEK 13.7 million. The Board of Directors proposes that the AGM adopt a dividend of SEK 0.6 per share, with a total value of SEK 10,273,198.

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 that the Parent Company and Group companies face.

Future reporting dates

Interim Report, Jan-Mar 2017 3 May 2017 Interim Report, Jan-Jun 2017 21 July 2017 Interim Report, Jan-Sept 2017 27 October 2017 2017 Year-end report 16 February 2018

The Annual Report will be published on the Company's website www.poolia.com on 11 April 2017. The AGM will be held on 3 May 2017.

Stockholm, 20 February 2017

Björn Örås Chairman of the Board

Lennart Pihl Board member

Marika Skärvik Board member

Dag Sundström Board member

Anna Söderblom Board member

Morten Werner Managing Director and CEO

This year-end report has not been reviewed by the Company's auditors.

Contact person:

Morten Werner Managing Director and CEO Tel. +46 (0)70-636 25 25 morten.werner@poolia.com

POOLIA AB (PUBL) Kungsgatan 57 A Box 207 SE-101 24 Stockholm Tel: +46 (0)8-555 650 00 Corp. ID no.: 556447-9912 www.poolia.com