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Third party research

PION Group: Market challenges persist - ABG

PION Group

This is a third party research report and does not necessarily reflect our views or values

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- Sales down 19% y-o-y in Q1
- Cost initiatives keep EBITA positive
- Signs of a better market later in '24

Q1: Challenging quarter for Poolia
PION Group reported revenues of SEK 429m (-19% y-o-y), it was 7% below ABGSCe. The deviation mainly stems from Poolia, which had a challenging quarter as sales were down 20% y-o-y. We also had higher expectations for QRIOS, while Uniflex was in line with our expectations. Adj. EBITA was SEK 1.7m (3.3m) versus ABGSCe at SEK 6.0m. Lower sales volumes and profitability in Poolia and QRIOS in conjunction with higher group costs explains the deviation, and Uniflex managed to offset some of that with improved profitability y-o-y. Almega is yet to publish its Q1 numbers for the industry but PION Groups problems are partially explained by a weak market in general. However, the latest report from the Swedish NIER gives a positive reading for the service sector in general, and we have also seen expectations rising for staffing in recruitment companies of late.

Lower estimates stem from Poolia, '24e EBIT down 13%
The weak quarter from Poolia surprised us as we thought demand had stabilised in Q4 and we thought the announced framework agreement with Ahlsell would support a recovery in '24e but it was clearly not enough as demand from other customers was weaker than expected. Poolia explains most of our revisions, which sees group sales down 4% and EBIT down 13% for '24e.

Swift CEO change, board member steps in as new CEO
Another rather unexpected development in conjunction with the Q1 report was the announcement that Nils Carlsson has stepped down as CEO after just seven months in charge, and was replaced by Martin Hansson, a current board member of PION Group. It will be interesting to see in which direction PION Group develops under Mr. Hansson's leadership, but we think it is important that we get some stability in the CEO position as this is the third CEO in the last 14 months.
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