Weaker market takes its toll

EWork Group AB: 1 director

A director at EWork Group AB sold 200,000 shares at 128.000SEK and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clear...

Ework Group - Broad Q3 beat and still strong demand

3% sales beat and better GM drove 49% adj. EBIT beat We raise ’22e-‘24e adj. EBIT by 21-5% 11x ‘22e-‘23e EV/EBIT, ‘21-‘24e adj. EBIT CAGR of 13%

Sector Fast Comment - ABGSC’s Investor Day feedback

Rovio and EG7 attended ABGSC’s Investor Day COVID-rebasing in mobile gaming to normalise soon Important changes presented by new EG7 management

Ework Group - Strong growth, but disappointing margins

Sales +19% y-o-y, but EBIT only grew 4% y-o-y Minor changes to sales estimates, but -11% on ‘22e EBIT 14x-11x ‘22e-‘24e EV/EBIT vs. peers at 14x-9x

Sector Fast Comment - SE IT services lunch confirms strong market

Knowit and CAG CEOs attended a lunch event this week Demand remains strong in Q2, hourly prices on the rise Main challenge is net recruitment, but overall positive

eWork Group - Remote work growing in importance

Ability to work remotely is important for IT specialists Ework is benefitting from this trend 12x ‘22e EV/EBIT is 18% below IT services peers

eWork Group - An overall strong Q1

Sales +24% y-o-y, +5% vs. ABGSCe We lift ‘22e-‘23e EBIT by 12-13% 13x-12x ’22e-‘23e EV/EBIT, ~25% discount to peers

eWork Group - Another quarter with strong growth

Sales +19% y-o-y, 3% ahead of ABGSCe We raise ’22e-‘23e sales by 4-3% 16x-15x ‘22e-‘23e EV/EBIT

eWork Group - Performing well in a strong market

Q3 sales +14% y-o-y, order intake 28% y-o-y ’22-‘23e EBIT up 3-4% on strong momentum 16x-14x ’21-‘23e EV/EBIT

eWork Group - Poised for further growth

Strong recovery in sales (+7% y-o-y, +5% vs. ABGSCe) We raise our ‘21-‘23 EBIT forecasts by 4-2% Well-positioned for further growth, 14x ‘21e EV/EBIT

eWork Group - Encouraging gross margin improvements

Sales -3% vs. ABGSCe, but strong beat on EBIT We raise ’21e-’23e EBIT by 13-7% 13x ’21e EV/EBIT and 17x P/E

eWork Group - Increasing EBIT is hard work with lower prices

Sales -9% y-o-y (-3% vs. ABGSCe) We cut ‘21-‘22e EBIT by 6-5% due to lowered GMs 16x ‘21e EV/EBIT & 19x P/E, 5% EBIT growth in ‘21e

eWork Group - Another quarter with good margin resiliency

Sales -1% vs. ABGSCe, but EBIT came in 42% above 2021e EBIT up by 11% on lower cost assumptions 13x 2021e EV/EBIT, 11% EBIT growth in 2021e

eWork Group - Doubled EBIT y-o-y in Norway in Q2

Both sales and EBIT held up better than expected ‘20e EBIT up 10%, ’21-‘22e EBIT up 1-2% 13.7x ‘21e EV/EBIT, 6% lease adj. FCF yield

eWork Group - Solid all over, but we expect a weaker Q2

Q1 sales 0% vs. ABGSCe, EBIT +2% vs. ABGSCe We cut ‘20e-‘22e EBIT by 1-7% on lower gross margins Share is now trading at 13.6x ‘21e EV/EBIT

eWork Group - Challenging IT services market

‘20e sales to shrink amid a weak market We cut ’20e sales and EBIT by 16% and 37% 13x ‘21e EV/EBIT, 5% lease adj. FCF yield

eWork Group - Soft margins on high investments

Sales growth of 12% y-o-y, -1% vs. ABGSCe Lowered ’20e EBIT on higher cost assumptions 13x EV/EBIT on ’20e, 6% FCF yield

Sector Fast Comment - IT services Q3: solid results, weaker outlook

Sales and margins held up well across the Nordics in Q3 Organic net recruitment and market sentiment turns down Sector at all-time high multiples, risk to the downside

eWork Group - Lowered estimates following a weaker market

Q3 in line with forecasts… …but negative comments lead us to lower our estimates eWork should be relative outperformer in weaker market