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Third party research

Ework: No imminent sales recovery - ABG

Ework Group

This is a third party research report and does not necessarily reflect our views or values

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Continued gross margin expansion, but the market remains tough
We take a more cautious view on the recovery
We cut '25e-'27e adj. EBIT by 10-15%; 12x-10x '25e-'26e EV/EBIT


Good gross margins, but tough market

The overall market remains challenging, with headwinds from both subdued volumes and price pressure due to an oversupply of consultants. Although Ework's sales mix, with a high proportion of senior consultants, coupled with an increased focus on profitability levels in new contracts, is helping gross margins, this is hurting sales volumes. These headwinds are further exacerbated by continued cost-saving measures in the important automotive end-market (including layoffs at Volvo Cars), resulting in a 7% y-o-y decline in sales. While Ework is managing things well within its control, particularly in terms of gross margins, adj. EBIT fell 13% y-o-y due to lower sales volumes. This was -8% vs. versus ABGSCe on a 1% sales miss, while orders were 8% below.