Street Calls of the Week
eWork Group AB’s third-quarter earnings call revealed a challenging period for the company, marked by a 7% decrease in net sales and a significant drop in stock price. The company’s shares fell by 8.87% in pre-market trading, reflecting investor concerns over declining earnings and market conditions in Sweden. According to InvestingPro data, the company’s revenue has declined by 12.93% over the last twelve months, though analysts maintain their profit forecasts for the current year. Despite these challenges, eWork Group reported improvements in gross margin and continued expansion in European markets.
Key Takeaways
- eWork Group’s stock fell by 8.87% following the earnings call.
- Net sales decreased by 7% from the previous quarter.
- Gross margin improved to 4.2% from 4% last year.
- Expansion into Belgium and preparation for entry into Germany.
Company Performance
eWork Group faced a challenging third quarter, with net sales reaching SEK 3 billion, down 7% from the previous quarter. The company attributed this decline to slower market conditions, particularly in Sweden, and reduced consultant engagements. InvestingPro analysis shows the company maintains a moderate debt level with a debt-to-equity ratio of 1.16, while offering a substantial 6.6% dividend yield to shareholders. Despite these setbacks, eWork Group expanded its operations across Europe and improved its gross margin to 4.2%, up from 4% last year. Subscribers to InvestingPro can access 12 additional key insights about eWork Group’s financial health and market position.
Financial Highlights
- Revenue: SEK 3 billion, down 7% from the previous quarter.
- Gross margin: 4.2%, up from 4% last year.
- EBIT: SEK 28 million, down from SEK 39 million last year.
Market Reaction
The stock price of eWork Group fell by 8.87%, dropping 9.4 points from the last close value of 106. This decline reflects investor concerns over the company’s declining sales and earnings, as well as challenging market conditions in Sweden. InvestingPro analysis indicates the stock is currently trading below its Fair Value, with a beta of 0.42 suggesting relatively low price volatility. The stock’s movement is notable given its 52-week range of 95 to 155. For detailed valuation analysis and more insights, investors can access the comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 stocks.
Outlook & Guidance
Looking forward, eWork Group does not anticipate a short-term market recovery. The company plans to focus on profitable growth through investments in digital platforms and AI capabilities. Expansion efforts continue with a planned market entry into Germany in 2026.
Executive Commentary
CEO Caroline emphasized the importance of AI in the company’s strategy, stating, "AI is not a side initiative for eWork Group AB. It’s embedded in how we create value for our clients, consultants, and suppliers." Financial Officer Johanna highlighted proactive sales efforts and new frame agreements.
Risks and Challenges
- Continued market challenges in Sweden due to recession impacts.
- Price pressure in managed provider solutions.
- Ongoing restructuring costs and conference expenses.
- Consultancy freezes and workforce reductions expected to continue.
Q&A
Analysts questioned the company’s strategies for managing market challenges in Sweden and the impact of price pressures on managed provider solutions. Executives addressed these concerns by highlighting ongoing cost management strategies and positive trends in telecom and financial services sectors.
Full transcript - eWork Group AB (EWRK) Q3 2025:
Caroline, CEO, eWork Group AB: Through our vast global talent network, we have access to over 225,000 consultants and 30,000 partner companies globally. Today, around 10,400 consultants are on assignment onshore, nearshore, and offshore across more than 50 countries. eWork currently operates in 12 sites across seven European countries. During the third quarter, we announced our expansion into Germany, with a planned opening next year. This is a key step in our strategic growth plan towards a strong position as a leading talent solution partner in Europe. Whether it’s about individual talent, teams, or advisory, we focus on business needs and real value. We are powered by people and driven by impact. Our offering is a Total Talent Solutions portfolio centered around workforce management, from strategic planning and talent acquisition to ongoing optimization. This makes us a full-service, trusted partner to our clients.
At the core is our find-and-select offering, supported by modular services that can be combined, just like Lego pieces, to meet each client’s unique needs, ensuring efficiency, quality, and security in every activity. In addition to our core services, we provide a set of value-adding services for both clients and consultants, such as eWork services, Pay Express, protected security services, including background checks, permanent recruitment, and nearshoring. In 2025, we are elevating our proposition in talent advisory and expanding our nearshoring capabilities to help clients optimize cost and get access to the best talent globally. Now, over to the third quarter. This was a quarter marked by a mix of continued caution and limits of light. A number of our enterprise clients paused or reduced consultant engagements while price pressure increased, particularly for our core services in the Swedish public sector.
Despite the challenging environment, we successfully won and extended several key frame agreements, which strengthened our position ahead of a broader market recovery. The Swedish talent market is mature and remains highly competitive, however, with large demand for talent. Following the uncertainty related to a new labor legislation and recession, Norway is now stabilizing. In the quarter, we won new public contracts at Ullensaker and Skattetaten, as well as renewals of several existing agreements. In Denmark, the market remains mixed, with high demand on one hand and reductions on the other. Finland experienced a certain decline in consulting services in the quarter while securing a major public sector contract. Meanwhile, Poland continues to perform well despite tougher competition, much driven by the continued strong nearshoring trends. Slovakia shows promising growth in consulting and recruitment services. In Belgium, local operations have now been established with Ghent as a base.
Preparations for our market entry in Germany are also underway, with plans to start operations in 2026. AI is playing an increasingly important role in our client assignments, with the number of AI-related projects tripling in our platform compared to those without AI elements. This clearly illustrates how rapidly the demand for skills is changing. We are beginning to see the effects among large enterprises, where broader transformation efforts are now underway, highlighting the importance of strategic workforce planning to ensure the right skills for development and competitiveness. Here, eWork Group AB’s new Workforce Future Readiness program supports clients in aligning their business strategies with long-term workforce planning. Our talent network continued to develop positively in the third quarter, reaching 227,000 registered consultants, with a majority in IT.
Our talent specialists are working systematically to strengthen the network with the right skills and to build long-term relationships with consultants, suppliers, and partners. All of this is done in line with the market demand, which in the third quarter was particularly high for skills in AI, software development, technical testing, and verification. The demand for our add-on services, particularly Pay Express, continues to rise, and we see a growing interest in insights, guidance, and advisory related to the volatile global environment. This is also driving growth in our protective security services, including background checks and related security offerings, which are now being rolled out across all markets. The growth in add-on services contributed to the continued positive trend in our gross margin, which increased to 4.2% in the third quarter, in line with eWork Group AB’s strategic focus on value creation and more profitable business.
The EBITDA of SEK 28 million was impacted negatively by costs related to our strategic initiatives in digitalization and automation, as well as restructuring and the group conference. Current operating costs are developing according to plan. Finally, our new digital platform is now operational across the Nordics, enabling automation, AI-driven matching, and greater efficiency. It will help us improve quality, objectivity, and lead times for our clients. More on that in a coming slide. Our rollout to Poland and Slovakia will follow in the fourth quarter. Switching focus to our markets, in Sweden, order intake and consultants on assignment decreased during the third quarter compared to the same period last year. The uncertainty regarding tariffs, challenges in supply chains, and continued cost focus in our clients’ businesses are some of the main drivers behind the weaker demand and declining volumes.
Poland continues to show strength while not growing with the same speed as in previous periods. The growth comes from a continued capability to capitalize on the European trend for nearshoring, as well as developing local clients to further boost our volumes with profitable growth. In Norway, the trend is now more positive following the new labor legislation and overall recession in recent years. We have strengthened our position in the public segment, which provides a stable revenue with a growth in profitability underpinned by a more favorable client mix. In Denmark, earnings increased based on positive development in a more diversified client portfolio. Lower internal costs are impacting the result positively in the period. However, we also saw a slowdown during the quarter after a long period of strong performance.
This was mainly due to cost and workforce optimization activities at key clients and led to a decrease in order intake for the quarter. Finland showed strength with increased revenue and stable profitability in the third quarter, despite a declining market. We do, however, see signs of a slowdown with a decrease in order intake for the third quarter. Finally, we are, as said, establishing new operations in Belgium with Ghent as a base and have hired a local sales representative who is now leading our business development activities locally. We see good opportunities for growth at new and existing clients, and we leverage our global operating model and platform to support further expansion and scaling. Looking at our industry segments in the third quarter, we saw an increasing strength and demand from our public sector clients, where we added new frame agreements in Sweden, Norway, and Denmark.
The ramp-up of consultants on assignment at Swedish client Swedish National Grid is also contributing to overall volume growth. All of this means that the public sector is once again our largest segment in the third quarter. The uncertainties in the automotive segment, stemming from macroeconomic policy changes, led to various cost reduction programs in our clients’ businesses, which in turn affected eWork Group AB’s consultant volumes in the quarter. Following this, the automotive segment decreased its share of eWork Group AB’s industry coverage to just about 20%. Within the private sector, we see a continued increase in demand from clients within banking, finance, and insurance, as well as higher activity in telecom, which leads to a growing number of consultant requests and a favorable growth in the segment. The remaining segments generally reflect the market sentiment for the quarter.
One segment that stands out from the rest is life science, where we expect a temporary slowdown in the Danish market related to workforce restructuring and transformation activities. As I mentioned earlier, with our new digital platform now operational across the Nordics, we’ve taken the next big step, integrating AI into the very core of how we operate and deliver value, both for our clients and internally. Over the past quarter, our focus has been on enabling automation and efficiency within our own core processes. A key milestone is that we’ve now gone live with AI-driven candidate matching. This allows us to connect the right talent with client requests faster and more accurately, improving both speed and quality in our delivery. This is not just a technical upgrade. It’s a real enabler for our teams to focus more on relationships and value creation for our clients.
At the same time, we’re working on automating the entire request-to-contract process for consultants. This initiative will create smoother workflows. It will reduce manual efforts and provide a more efficient experience both for suppliers, consultants, and clients. It’s an important step towards making our business more scalable, predictable, and resilient. In the near future, feedback and responses both to suppliers, consultants, and clients will be powered by AI, which will create a faster, more efficient, and transparent process for everyone. This ensures that communication keeps pace with our growing scale and enhances the overall experience for all stakeholders. Looking ahead, we will bring AI even closer to our clients and consultants. With the upcoming digital client portal now under development, we will empower clients to manage their engagements more independently with full transparency and data-driven insights.
This represents a major step forward, positioning eWork Group AB not just as a services company, but a true platform provider. In short, AI is not a side initiative for eWork Group AB. It’s embedded in how we create value for our clients, consultants, and suppliers, developing our business, shaping the future, and continuously strengthening our position in a rapidly evolving market. Johanna, I’m glad to hand over to you.
Johanna, Financial Officer, eWork Group AB: Thank you, Caroline.
Caroline, CEO, eWork Group AB: For more details.
Johanna, Financial Officer, eWork Group AB: Yes. Let’s move over to some numbers then. Looking at the financial overview of the third quarter, we reported net sales of approximately SEK 3 billion, which is about 7% lower than last quarter, where we reported net sales of SEK 3.2 billion. This drop is related to the slower market and mainly to the Swedish market that is also our largest with the biggest volume and therefore a bigger impact. From this quarter, we do not have effects from the previously reported phase-out of non-profitable client contracts and no calendar effects, meaning we are comparing apples to apples. We unfortunately do not see any clear signs of recovery in the market short term. Some of our bigger clients have enforced consultancy freezes or reductions in their workforce, as mentioned. We expect this to continue throughout the year, impacting our top line.
We continue to be proactive in sales, and we are also winning new frame agreements also in this market setting, which gives a better starting position for a market recovery. Continuing down in the P&L, our gross margin continues to have a positive development, 4.2% versus last year 4%. This is still partly driven by our add-on services, where we are now ramping up sales activities further. We have seen a high demand for security services as a result of the uncertainties in our environment currently. We are now rolling out the services in all of the Nordics. We see a potential to increase the volume of add-ons still. EBIT in the third quarter amounted to SEK 28 million compared to SEK 39 million last year. EBIT was negatively impacted by restructuring costs and by costs for a group conference in relation to the celebration of eWork 25 years.
In total, that amounts to approximately SEK 6.3 million. Other than that, we are, as mentioned, doing investments in our new digital platform that is increasing IT costs somewhat. The financial net decreased somewhat relating to currency effects. As mentioned before, we have taken actions to reduce exposure, and that has already given effect. We continue to have a steady focus on our long-term strategic goals to increase our profitability by higher business margins and scalability. Looking at the order intake for the second quarter, it was approximately SEK 3 billion, which is lower than in last year, SEK 3.2 billion. The order intake decreased, especially in Denmark and Finland, impacted amongst other by reductions in workforce at one larger client.
We have, as mentioned, seen consultancy freezes and cost reductions at some of our largest clients in the last quarters and expect it to continue throughout the year, impacting requests and order intake. We do also see that the automotive industry is a bit more uncertain given the toll situation and expect some negative impact from this during the year. Energy has gladly picked up, where we are ramping up based on our new frame agreement with Swedish National Grid. We also see some positive signs from the telecom industry. We also see that the public sector in Sweden and Norway has stabilized somewhat, and the drop is mainly related to the private sector. From the third quarter, as mentioned, we do not have any impact from the previously reported phase-out of less profitable client contracts.
The decrease in sales, as you can see in this slide, in the quarter is due to the lower business volumes and fewer consultants in assignments. We can see that hourly rates remain stable still. The explanation for the drop is mainly Sweden, where the market remains challenging. Our focus is still on profitable growth, as mentioned, meaning that we will not sign frame agreements that do not meet our profitability requirements going forward. EBIT is negatively impacted from the lower business volumes as well, but also by the higher costs relating to the implementation of the digital platform and also by the restructuring costs and also the costs relating to the group conference. On the opposite side, we have a positive impact from the increased contract margins and add-ons that are driving profitability, which is really positive.
Given the situation in the market, we are looking into actions on the cost side that can give effect both short and mid-long term in order to adapt to the current settings. I will hand over to Karin to sum up.
Caroline, CEO, eWork Group AB: Thank you so much, Johanna. To summarize this quarterly presentation, we do see a mixed momentum in our different markets and geographies, with stronger demand in Denmark and Poland, but continued restrained markets in Sweden and Norway, where, as said, Norway is now stabilizing. We’re, at the same time, continuing to generate more profitable growth, and we’re seeing a positive trend in our gross margin as a result. At the same time, to further increase profitability, we need higher volumes and a broader client base. We also see a growing demand for flexible workforce management, which plays to our strengths. Internally, the implementation of our new digital platform is nearly done. It’s a key step in improving efficiency and creating a foundation for further automation and AI over time. In short, eWork Group AB continues to execute on our long-term strategy and work towards our long-term goals.
Now we will be opening up the floor for questions from the viewers. We will start with the questions coming in over the phone if we have any.
Conference Operator: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
OK.
Caroline, CEO, eWork Group AB: Yeah.
Thank you for that, Karin and Johanna.
Thank you.
We have a few written questions here for you. The first one says, it seems the market was particularly difficult in Sweden. Why is that?
It’s mainly because we have a recession still going on and affecting several of our clients, especially in the enterprise segment. We are exposed to many clients with different types of challenges, but also strategies to further optimize the cost and workforce. This, of course, impacts also the demand for consultants and contingent workforce. Now, having said that, we still see a big underlying demand for skills and for talent who can help with the transformation, as an example, into AI and automation, where new skills and capabilities are needed. It’s a mixed picture. That’s why we like to talk about the mixed momentum, because on one hand, we see a reduction or a cautious demand. On the other hand, we see major needs.
Yeah.
We are doing our very best at all times to navigate through these mixed momentums.
Thank you. Another question. There was a dramatic drop in order intake in Denmark. What happened there?
Denmark has been developing very well over the last couple of years if we compare it to Sweden, as an example. Now, we also see some of our clients in Denmark doing similar activities as our clients in Sweden, meaning they optimize workforce, they optimize cost. This is natural development. As said, we also see bigger impact from the life science segment and particular clients with big activities going on that are affecting contingent workforce. Again, quite a mixed picture, but somewhat different from the previous quarter.
Thank you for that. Do you then see challenges in any industry in particular?
As said, on a positive note, we see a certain stabilization in the public sector across Sweden, Norway, and Denmark. This is a good sign. We do see big needs for talent and skills in the public sector in general to drive transformation and development. In addition to that, we see the automotive segment, of course, being challenged with global uncertainty and volatile momentum. Of course, that also spills over on our business. As said, on the other hand, again, we do see a positive trend in telecom, which we are also glad to see. We have a number of important companies and clients in this segment, as well as in the financial services segment. Quite a mixed picture where some segments stand out more than others.
Mixed picture again.
Mm-hmm.
OK. Thank you for that. Do you see any price pressure in the market?
Yeah.
It was mentioned?
Yeah. We do see price pressure for our core services, and in particular, the services in managing spend for clients. That’s what we call managed provider solutions. Here, we see quite a heavy price pressure. We see a very competitive market and a mature market in Sweden that is, of course, driving things in that direction. We have a very comprehensive portfolio at hand, ready to offer not just the core services, but a lot of add-on services and additional services that we know clients value and where we can be of great help. We’re doing what we can to navigate through this very competitive landscape, also impacted by price pressure. Looking at consultants, it’s a slightly different picture, as we reported. Here, we do not see a big impact on consultant hourly rates driving rates down, as you could maybe imagine.
This has to do with also the demographics of the consultants we have on assignment. We know that many of our clients are really keen to keep their senior consultants and the experts they need to drive business-critical activities.
OK. We have one more question here. It says, considering the continued drop in order intake, do you see a need for further cost measures?
As said in Johanna’s part of the presentation, this is something we are always looking into to see that we are matching our cost base with the volume and our top line. Automation and AI will certainly be an important component in all of this, because it will enable us to deliver services at a lower cost over time. It will provide a very, very good platform for scalability when time turns and the market turns the other direction. The answer is yes. That’s something we’re always doing. Maybe you want to comment further on that, Johanna?
Johanna, Financial Officer, eWork Group AB: I totally agree. eWork has done a lot of work with the cost base, and we expect it to continue in these levels. We are doing a lot of investments, which will impact the cost side. Hopefully, that will increase our scalability and profitability over time.
OK.
Yeah.
I think that was it.
Yeah.
Good. Thank you so much.
Caroline, CEO, eWork Group AB: Thank you so much, Johan. This concludes also my final and last quarterly presentation at eWork Group AB. I’m happy to hand over to my successor, Daniel Almgren, to do the next presentation of the quarterly results for the fourth quarter.
That will be on the 19th of February 2026.
Good. Look forward to that.
Yeah.
Thank you.
Thank you.
Thank you.
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