<a id="bm-comp-46c33187-86b5-40ce-b7a4-6c735f45e104" name="bm-comp-46c33187-86b5-40ce-b7a4-6c735f45e104" class="BMCustomAnchor"></a><table><tr><td bm-component-id="46c33187-86b5-40ce-b7a4-6c735f45e104" style="vertical-align: top; width:100.000000%;"><ul><li>Sales down 20% y-o-y in Q2</li><li>More restructuring in the quarter</li><li>Overall market has likely trouged</li></ul></td></tr></table><a id="bm-comp-f3bd5f8d-573d-4aae-96e4-7c71f2ffc7ab" name="bm-comp-f3bd5f8d-573d-4aae-96e4-7c71f2ffc7ab" class="BMCustomAnchor"></a><table><tr><td bm-component-id="f3bd5f8d-573d-4aae-96e4-7c71f2ffc7ab" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q2: New CEO immediately starts cutting costs</h3><p>PION Group reported Q2 revenues of SEK 424m (-20% y-o-y), which was 9% below ABGSCe. The deviation was broad-based over the three business units, with QRIOS having the largest deviation in percentage terms and Uniflex the smallest. Adj. EBITA was SEK -10.5m (-0.3m) versus ABGSCe at SEK 13.8m. The lower sales volumes with less revenue from recruiting was too much to bear, with QRIOS and Poolia in the red in Q2. The company took IAC costs of SEK 12m in Q2, which is aimed at bringing yearly savings of SEK 30m. According to Almega, PION Group lost some market share in Q1 and management believes it is in line or slightly behind the overall market in Q2. We think the market has likely troughed, as the Swedish NIER is giving a positive reading for the service sector in general, and we have also seen expectations rising for staffing in recruitment companies of late.</p><h3 class="bm-h3">Major revisions after underwhelming Q2</h3><p>We got the impression after Q1 that things were moving in the right direction for PION Group, but with the overall market still on depressed levels, the Q2 numbers were below our expectations, especially on profitability. Even with the announced restructuring, we need to revise our numbers after the report. We lower our sales estimates by 6-4% for '24-'26e and think the company will be loss-making for '24e, and our '26e EBIT is cut by 24%.</p><h3 class="bm-h3">A long way to go to reach '26 targets</h3><p>With this report, we think the '26 financial targets look challenging, and we would not be surprised if they need to be pushed back a year or two. However, it is worth keeping in mind that the cyclical nature of the business also tends to lead to sharp turns in profitability, and with market KPIs starting to improve, a recovery in profitability could be swift.</p></td></tr></table>