Ework Group AB

Hello, everyone, and warm welcome to the presentation of IWA Group's results for the first quarter 2026. My name is Johan Lindblad. I'm the chief marketing and communications officer at IWA Group, and I will be moderating today's webcast. And with me here today to present our Q1 results, I have Daniel Angén, CEO at IWA Group, together with our CFO, Johanna Estö. In just a moment, we will begin to go through the highlights and insights of the first quarter. And after the presentation, we will open up for questions, starting with the calls followed by the written ones. And with that, I think I will hand it over to you, Daniel and Johanna.

Thank you very much, Johan. Thank you all for joining today. It's good to be here. It's going to be a pleasure to take you through the Q1 results of eWork Group. Looking at the highlights of the first quarter 2026, the market environment remains challenging. Demand continues to be cautious and uncertainty has increased further during the quarter, driven by geopolitical tensions, rising energy prices and continued cost control among our clients. As a consequence, business volumes remain down year on year. That said, the first quarter developed fully in line with our expectations and in line with our guidance for 2026. Our full year EPS guidance of minus 10 to minus 20% compared to 2025 remains unchanged. In that context, we view the quarter as a solid and as a confirmation that we are managing the business in a disciplined and controlled manner. Looking at the market conditions, they continue to vary across geographies and segments. Norway shows a positive momentum, while Sweden remains more restrained with differences between industries. Poland was impacted by the ending of a larger contract, but underlying demand remains stable, while Denmark had a softer quarter. Our expansion in Belgium and Germany continue to develop according to plan and preparations for entering the Netherlands are progressing, driven by clear market interest and as a natural step in strengthening our presence in Benelux. A key highlight of the quarter is the successful implementation of our organisational transformation, which is now fully in place and operating as intended. We see clearer accountability, shorter decision paths and higher internal engagement, allowing us to maintain a high operational tempo even in a challenging market. This transformation is critical as an enabler of long-term scalable growth and a more customer-centric and commercially driven organization. We have also strengthened our commercial capabilities during the quarter, including the recruitment of a new head of sales in Sweden and increased focus on proactive sales and new customer acquisition. At the same time, we continue to deepen relationships with existing clients. Technology and AI remain central to our strategy. Our AI-powered services continue to drive efficiency and productivity, particularly within consultant matching. During the quarter, we launched the e-work client hub, offering a more user-friendly alternative to traditional vendor management systems. And it has been very well received by our customer base. To conclude, while the market remains uncertain, we are executing and delivering according to our plan. With a more efficient organization, strengthened commercial focus, continued investments in technology and AI, and disciplined cost management, we are well positioned for a turnaround. Our work to broaden the customer base and deepen existing client relationships continued during the first quarter. We are pleased to see strong momentum as we secured several important new agreements, extended existing partnerships and increased business volumes with selected customers, including, for example, Assa Abloy, E.ON and Sittowise. As for Assa Abloy, we have secured a new framework agreement, creating strong opportunities to deliver consultancy services across multiple markets to one of the world's leading access solutions companies. With a decentralized organization and global footprint, Assa Abloy is a strong fit for eWorks model, combining a broad international network with strong local expertise. The agreement enables delivery of both individual consultants and teams across IT and engineering, supporting a wide range of business units within the group. E-Work has initiated a new collaboration with Citywise in 2026, a leading Nordic expert organization within the built environment and digital solutions. The partnership spans both the Finnish and Swedish markets. From the outset, Citywise will adopt E-Work's client hub, enabling a streamlined, transparent and compliant setup for managing external consultants engaged through E-Work. The collaboration highlights Ework's ability to support clients with scalable sourcing solutions combined with efficient digital tools. And we are pleased to have regained trust with Eon through a new framework agreement for consulting services within marketing and communication and procurement and process. Eon has previously been a client of Ework and we are glad to re-establish the collaboration. The agreement came into effect in February 2026 and positions Ework as a consulting provider. During the quarter, we also finalized the extension of a framework agreement with an important client in the automotive industry and look forward to continued cooperation. We are very excited about these new collaborations and the opportunities they bring going forward. Turning to our markets, the first quarter remained characterized by cautious demand and mixed signals. Sweden continued to experience varying demand, with the embattled automotive sector seeming to stabilise a bit. A decline in banking, while energy developed positively. Net revenue declined due to overall lower business volumes, driven by fewer consultants on assignment, although a higher number of hours per consultant compared with last year partially mitigated the decline. Norway delivered a positive quarter, with growth in both revenue and profit, primarily driven by telecom. During the quarter, a few smaller contracts were secured, while no existing client contracts were lost. Poland was impacted negatively by the ending of a larger client contract. Excluding this effect, net revenue remained broadly stable, supported by continued underlying demand. Slovakia showed a slight improvement in demand compared with the same period last year. Denmark experienced a weak quarter with lower demand, particularly within banking and life science. Higher gross margin could not compensate for the drop in business volume. Investments in sales capacity is being done in order to increase the sales pipeline going forward. Finland saw a decline in revenue compared with last year, also given the ending of a larger client contract. There were some small signs of stabilization in the market, driven by banking, public sector, consulting and manufacturing. Looking at our industry segments in Q1, the picture reflects continued variability across sectors. The public sector remains a key driver and continued to grow compared with last year. supported by ongoing frame agreements and new assignments across Sweden, Norway and Denmark. This sector continues to provide stable revenue and contributes to overall volume growth. The automotive sector remained uncertain, with continued declines compared with last year, reflecting recent client cost control and restructuring measures. Instead, within the private sector, growth was seen in telecom and energy, while manufacturing remained broadly stable compared with last year. Banking and finance, retail and life science declined year on year, although retail showed a slight increase in share of business. The negative development in life science, particularly in Denmark, reflects ongoing adjustments among key clients. Overall, these trends highlight the need for a strong client focus and the necessity of an increased sales effort, both of which were initiated during the quarter, as the software market requires gaining market share in order to achieve business growth. Looking at skills and competencies, our data shows a consulting market with a clear operational focus. Demand is concentrated on AI-related software development tools. Over the past year, our top five individual skills have been Python, SQL, Java, CI, CD, and Azure. We also see a preference for specialized technical expertise over broader non-technical roles. In Q1 specifically, the skilled areas that stood out in terms of rising demand were data science, cybersecurity and cloud development operations. If we look at the graph on the right, we see the distribution of requested seniority levels in the first quarter. Here, there's a slight shift compared to last year, with higher demand for junior and mid-level professionals. This may indicate that organizations are now focused on execution and scaling. Demand is shifting from strategy-heavy roles towards delivery-focused roles that can build, configure, test, and operate solutions. And with that, I'll hand over to Johanna, who will take us through the financials for the first quarter. Thank you very much, Johanna.

Thank you, Daniel. We will look into Q1 financials. And starting with the financial overview of the first quarter, we reported a revenue of approximately 3 billion SEK, which is 13.9% lower than last year, where we reported a revenue of 3.5 billion SEK. The lower revenue is related to all geographies, part from Norway, where we have seen a recovery. Overall, the market conditions are still challenging, especially in our main markets, Sweden and Denmark. We have reported earlier that we do not see any clear signs of recovery in the market. Geopolitics, tolls, etc. is creating uncertainties and many clients are postponing investment decisions and are instead focusing on cost control. In this market setting, Sales is key, and we are therefore strengthening our commercial capacity in different ways in order to maintain and gain market share. Focus in on setting the basis for long-term growth and profitability. Gross profit in the quarter decreased in line with the low revenue, while the gross margin remained strong at 4.1%, supported by our value-adding services. EBIT in the quarter amounted to 14 million SEC compared to 34.3 million SEC last year. EBIT was negatively impacted by non-recurring items of approximately 9 million SEC relating to the reorganization. Adjusted EBIT amounted to approximately 23.4 million SEK. The reorganization is expected to result in annual cost savings of approximately 18 million SEK, and we will also reduce facility costs on an annual basis with approximately 5 million SEK starting 2027. We will, although, see some gradual effect from this during the year. The financial net increased given reduced exposure to foreign currencies and more stable exchange rates. We have implemented new ways of working within Treasury that has given effect. Earnings per share decreased, impacted by the lower EBIT and restructuring costs. Our guidance on EPS target for financial year 2026 remains unchanged, as Daniel also mentioned. Moving on to order intake and our key drivers, the order intake for the first quarter amounted to approximately 3.7 billion SEK, which is lower than last quarter, where we reported an order intake of 4.2 billion SEK. The market in Denmark has been challenging for a while, and one larger client has enforced workforce reductions, and of that we have seen negative effects during the last quarters. In Poland, we have seen a negative impact mainly related to the loss of a bigger client contract, but the underlying nearshoring demand remains strong. As many clients look for cost reductions, nearshoring remains a competitive alternative. In terms of industries, public sector remains stable during the quarter, while private sector decreased. Automotive remains challenging due to the uncertainties, while telecom has picked up a bit. From the first quarter, we have reported lower revenue compared to last year, as mentioned before. The decrease is related to oil markets, apart from Norway, and an effect of the prolonged economic downturn. We have no calendar effects during the first quarter. This is just loss of business volumes. Going forward, increasing business volume is our highest priority, and as mentioned, we are enhancing our commercial focus and sales performance. EBIT is also impacted by the lower revenue, but also the restructuring costs relating to the reorganization. On the cost side, we see, for example, lower IT costs as expected, given that the new internal digital platform now is fully implemented, and we will see a gradual effect from the reorganization and reduction in facility costs. We are currently not planning any other larger investments that could impact the cost sides. And with that, I will hand over back to Daniel to sum up.