Temporary market grows - 11/2000

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.