• Sales -4% vs. ABGSCe (-11% y-o-y), EBIT -24% vs. ABGSCe
• Weaker orders but improving margins, partly from portfolio rebalancing
• We expect cons to lower '25e-'26e adj. EBIT by ~3%

Q4 results

Q4 sales were SEK 4,161m (-4% vs. ABGSCe 4,319m), -11% y-o-y. Gross profit was SEK 168m (-4% vs. ABGSCe SEK 174m), -8% y-o-y, while EBIT was SEK 54m (-24% vs. ABGSCe 72m), -7% y-o-y. Encouragingly, the gross margin increased to 4.03% from 3.98% in Q3, driven by Eworks' continued focus on a better sales mix combined with the recent portfolio rebalancing. The Board of Directors proposes a DPS of SEK 7.0/share (vs. SEK 7.0/share in 2023).

Q4 thoughts

Although Q3 orders showed positive growth of +6% y-o-y, the recent rebalancing measures impacted Q4 orders, which came in at -8% y-o-y. Ework calculates that most of this is due to the rebalancing measures, where the company is increasingly focusing on high-margin contracts. Similarly, Ework estimates that 7pp of the negative revenue growth was due to the same measures, while the rest was due to recent legislative changes in Norway. All this is positive for margins, which bodes well for further margin expansion in 2025. In terms of end-market segments, Ework highlights that the financial sector performed well, while telecom was weak. The company also noted a sequential slowdown in automotive, while the public sector is still showing no signs of recovery. Ework did not give a specific outlook for 2025, but expects margins to improve.

Estimate changes

Following the Q4 report, we expect consensus to lower '25e-'26e adj. EBIT estimates by ~3% on lower revenue assumptions, partly offset by higher margin assumptions.

There will be a conference call at 13.00 CET, link.