Ework Group: Sequentially weaker IT services market - ABG

• Sales in line, EBIT below - mainly on lower capitalised costs
• Sequentially weaker market in Q2
• Expect relatively small estimate cuts on '23e-'25e EBIT

Q2 results
Q2 sales of SEK 4,384m (0% vs. ABGSCe 4,393m), up 11% y-o-y. Gross profit was SEK 164m (-3% vs. ABGSCe SEK 169m), +14% y-o-y, while EBIT was SEK 38m (-17% vs. ABGSCe 46m), +9% y-o-y. The gross margin of 3.75% declined slightly from 3.81% in Q1, likely driven by the sales mix. Ework notes that hourly prices grew 2.7% y-o-y, which we believe serves as a good proxy for the entire Nordic market in Q2. It should be noted that Ework did not capitalise any expenses in the quarter, which had a negative impact on EBIT. Looking at EBITDA excl capitalised development costs, it came in -6% vs. ABGSCe.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ework/Equity-research/2023/7/ework-group---sequentially-weaker-it-services-market/#