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 constraints.

• Order intake decreased by 10.3% to SEK 4,924 million, mainly due to the planned phase-out of the Vattenfall agreement and lower volumes in Norway.

• Net sales declined 5.1% to SEK 4,151 million, but operating profit rose 36.2% to SEK 52 million, driven by improved cost efficiency and a new operating model.

• The company expanded its service portfolio, launched new financial solutions, and continued its geographical expansion, notably in Slovakia.

• New client wins and framework agreements, especially in Sweden and Poland, contributed to a positive outlook.

Financial highlights

• Order intake: SEK 4,924 million, down 10% year-over-year.

• Net sales: SEK 4,151 million, down 5.1% year-over-year.

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

• Operating margin (EBIT/net sales): 1.25% (125 basis points), up from 0.87% in Q2 2023.

• 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 positive.

• Full-year 2024 forecast: limited decrease in sales, but EBIT and EPS expected to increase at least 30%.

• 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.