Stuart Gentle Publisher at Onrec

Temporary market grows - 11/2000

Deutsche Bank initiate their coverage

Deutsche Bank initiate their coverage of the Swedish temporary employment companies Proffice and Poolia, and highlight the tremendous growth prospects for both companies, with potential upside of 105% for Proffice and 80% for Poolia.

It's one of the fastest growing and price stable markets in Europe, due to the current low level of temporary staffing penetration of (0.5% in Sweden compared to Europe at 2%). And, whilst the environment favours temporary staffing, Deutsche forecast Poolia and Proffice should grow at 50% in the next 3 years.

Both companies invested heavily in IT/Internet and marketing in 1998-99. As prices are stable in Sweden we see the risk as on the upside. Given that both companies require little capital, we see ROCE of around 50% (achieved in 1998-99) likely to continue.