eWork Group (EWRK) Q1 2025 earnings summary

Executive summary

• Net sales declined 16.9% year-over-year to SEK 3,511M, mainly due to phasing out unprofitable contracts and weak markets in Sweden and Norway, while Denmark and Poland saw strong growth.

• Gross margin improved to 4.1% from 3.8%, driven by add-on services and digital platform initiatives.

• EBIT dropped 23.3% to SEK 34.3M, with profit after financial items down 53.2% to SEK 21.4M.

• Order intake fell 6.3% to SEK 4,203M, with average professionals on assignment decreasing to 10,850.

• Expansion into Belgium and a growing talent network, especially in AI and nearshoring, signal strategic shifts.

Financial highlights

• Net sales: SEK 3,511M (Q1 2024: SEK 4,225M), down 16.9% year-over-year.

• EBIT: SEK 34.3M (Q1 2024: SEK 44.7M), operating margin: 0.98% (1.06%).

• Gross margin: 4.1% (up from 3.8% year-over-year).

• Order intake: SEK 4,203M, down 6.3% year-over-year.

• EPS after dilution: SEK 0.98 (Q1 2024: SEK 2.11).

Outlook and guidance

• Market in Sweden and Norway remains weak with delayed recovery and continued client caution.

• Denmark, Finland, and Poland & Slovakia showed positive trends, especially in nearshoring and banking/finance.

• Focus remains on improving gross margins, expanding add-on services, and leveraging digital and AI capabilities.

• Geopolitical and macroeconomic uncertainty continues to cloud the outlook.

• EPS growth target of 30% is unlikely to be met this year.