Another quarter with decelerating growth
Ework was one of the first companies in the Nordic consultancy space to release its Q3 report. Amid a gradually weakened market - evidenced by leading indicators (e.g. from Konjunkturinstitutet) and comments from peers in their Q2 reports - the recent slowdown in Ework's sales growth continued in Q3: +4% y-o-y, down from +11% y-o-y in Q2, of which 1% stemmed from a higher price/mix (vs. +5% in Q2), and 3% from increased volumes (vs. 4% in Q2). Although we expect prices for Ework to stay relatively flat in the near term (but with some downside risk), we expect volumes to turn negative in Q4 on the back of the Q3 order intake (-16% y-o-y from tough comps and the weaker market), driving sales -1% y-o-y. That said, Ework's emphasised focus on senior consultants and other value-added services should benefit the gross margin over the coming quarters. Furthermore, recent profitability-enhancing measures started to yield solid results in Q3 (opex -8% y-o-y), which should also support the EBIT margin ahead.
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