eWork Group (EWRK) Q4 2024 earnings summary

Executive summary

• Achieved profitable growth in Q4 2024, with positive margin trends and increased contribution from value-added and add-on services despite a challenging market.

• Net sales for Q4 2024 were SEK 4.2 billion, down 10% sequentially and 10.4% year-over-year, with full-year sales at SEK 15.8 billion.

• Expanded geographical presence to Belgium, now operating in seven European countries, and increased nearshoring to Poland and Slovakia.

• Secured major long-term framework agreements, including with Swedish National Grid, Police Authority, and Board of Agriculture.

• Board proposed a dividend of SEK 7 per share, exceeding the 75% net profit target and unchanged from the previous year.

Financial highlights

• Q4 EBIT was SEK 54.3 million, down 6.7% year-over-year and 7% quarter-over-quarter, but EBIT margin improved by 5 basis points to 130 bps.

• Full-year EBIT was SEK 190.0 million, with a margin of 121 bps, and EPS after dilution up 19.7% in Q4.

• Order intake for Q4 was SEK 7.6 billion, down 9% year-over-year due to contract pruning.

• Service revenue margin reached 32% in Q4 and 31% for FY 2024, up 1 percentage point year-over-year.

• Return on equity Q4: 57.4%; full-year: 47.6%.

Outlook and guidance

• Continued focus on profitable growth, margin improvement, and expansion of value-adding services.

• Ongoing phase-out of low-margin contracts expected to impact net sales into 2025, but higher margins anticipated.

• Expansion into Belgium and digital platform upgrades are expected to drive future growth and efficiency.

• Optimism for growth in Norway with new leadership and updated service portfolio.