eWork Group (EWRK) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw increased private sector demand, especially in retail, automotive, banking, finance, and life sciences, while the public sector remained restrained due to budget and legislative constraints.

• New client wins, framework agreements, and expansion into Slovakia contributed to a positive outlook.

• Significant advancements included new financial and talent management solutions, upgraded IT platforms, and a new operating model.

• Higher margins were achieved through improved cost efficiency, scalability, and a reduced cost base.

• The company expanded its global talent network and was recognized as the largest IT solutions provider in Poland.

Financial highlights

• Order intake decreased by 10.3% year-over-year to SEK 4,924 million, mainly due to the phase-out of low-margin clients and lower volumes in Norway.

• Net sales declined 5.1% year-over-year to SEK 4,151 million.

• Operating profit (EBIT) rose 36.2% year-over-year to SEK 52 million; adjusted EBIT up 24%.

• Operating margin improved to 1.25% (125 bps) from 0.87% (87 bps) last year.

• Earnings per share after dilution rose 8.7% to SEK 2.00.

Outlook and guidance

• Growth is expected to return by the end of 2024, with the outlook remaining unchanged.

• EBIT and EPS are forecast to increase at least 30% for the full year.

• Continued focus on cost efficiency, margin improvement, and scaling of new service offerings.

• Norway expected to continue negative revenue growth in the near term, but signs of stabilization are emerging.