eWork Group (EWRK) Q3 2024 earnings summary

Executive summary

• Order intake increased by 5.8% to SEK 3.2 billion, marking a return to growth after five quarters of negative order development.

• Net sales declined 11.1% year-over-year to SEK 3,227 million, mainly due to lower assignment volumes and strategic phase-outs.

• Operating profit reached SEK 39.3 million, with an operating margin of 122 basis points, reflecting improved profitability despite lower volumes.

• Underlying margin reached a four-year high due to a shift toward value-generating services and lower costs.

• The company continued to secure new framework agreements and expand its service portfolio, supporting future growth.

Financial highlights

• Q3 2024 net sales: SEK 3,227M (down 11.1% year-over-year); operating profit: SEK 39.3M (down 12.3%).

• Adjusted Q3 2023 EBIT was SEK 38.1M; Q3 2024 EBIT up 3.1% versus this adjusted figure.

• Profit before tax rose 16% year-over-year; earnings per share after dilution: SEK 1.49 (up 18.6%).

• Operating margin improved to 122 basis points from an adjusted 105 basis points last year.

• Add-on services and cost reductions contributed to margin uplift.

Outlook and guidance

• Positive margin development and cost efficiency are in line with the annual plan.

• Order intake is increasing, but market recovery is slower than expected, limiting volume growth.

• Achieving 30% EPS growth by year-end is unlikely due to insufficient volume recovery.

• Revenue growth in Q4 is not expected unless there is a significant boost in order intake.