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Ework Group Interim / Quarterly Report 2022
3158_10-q_2022-10-20_e1480df6-5149-4e4d-8d4a-fee35e2289ff.pdf
Interim / Quarterly Report
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Strengthened position, continued high rate of growth and improved operating margin
We are summing up the best third quarter in our history with a highly favorable performance for Ework. We continued to grow and reported robust order intake. Operating profit nearly doubled and the operating margin improved. This trend is in pace with our ambition and expectations, which bodes well for the future.
Third quarter 2022 compared to 2021
- Net sales rose 24 percent to SEK 3,492 M (2,815). The increase is due to continued strong demand and higher fees for consulting services.
- Operating profit rose 97.5 percent to SEK 46.4 M (23.5). The earnings improvement is due to sales growth, a positive trend in the profitability of our services Consulting Services and Managed Services as well as continued growth and increased contributions from our add-on services PayExpress and Ework Services.
- The operating margin (EBIT) increased to 132 (83) bps as a result of a lower cost level and thus a lower cost increase rate. Adjusted for seasonal variations and accrual effects, the cost level was also lower compared to the second quarter and the rate of increase was lower than both sales growth and volume increase, compared to the year 2021.
- SEK M Net sales (left) Operating profit (right) Quarter 1 2 3 4 20l8 0 1,000 2,000 3,000 4,000 5,000 0 10 20 30 40 50 1 2 3 4 20l9 1 2 3 4 2020 1 2 3 4 2021 1 2 3 2022
Net sales and operating profit
From Karin Schreil's CEO statement
- Order intake rose 18 percent to SEK 3,606 M (3,054).
- The number of consultants on assignment reached a record-high 13,297 (11,280).
- Earnings after tax per share before dilution amounted to SEK 2.04 (1.06), an increase of 92 percent.
First nine months of 2022 compared to 2021
- Net sales rose 22 percent to SEK 11,383 M (9,327).
- Operating profit increased 52 percent to SEK 128.3 M (84.5).
- Profit after financial items increased 47 percent to SEK 122.1 M (83.0).
- Earnings after tax per share before dilution amounted to SEK 5.58 (3.76), an increase of 48 percent.
Quarterly order intake
CEO STATEMENT
Strengthened position, continued high rate of growth and improved operating margin
We are summing up the best third quarter in our history with a highly favorable performance for Ework. We continued to grow and reported robust order intake. Operating profit nearly doubled and the operating margin improved. This trend is in pace with our ambition and expectations, which bodes well for the future.
Demand for Ework's services remained strong in the third quarter. Order intake increased by approximately 18 percent to SEK 3,606 M (3,054). Total net sales increased 24 percent to SEK 3,492 M (2,815) during the quarter, and operating profit nearly doubled to SEK 46.4 M (23.5). This is clear proof that Ework's strong position as a bridge between professionals and assignments in, among other things, digitalization and green transition, yields good results. We increased our sales among existing customers and won new contracts in the private and public sectors.
We noted robust growth in all markets during the third quarter. Demand increased in Poland as a result of rising inflation and geopolitical developments as more companies searched for markets with a more attractive cost picture, which promoted robust growth throughout the year. We are also seeing a general increase in demand for consultants who can work remotely, which we have been able to meet through our Remote Sourcing Center. In Sweden, the Gothenburg region, where we have a strong position in both the automotive industry and the public sector, remained a growth generator in the quarter.
Sights on continued improvements to earnings and profitability
Apart from the growth in sales, the improvement to earnings is attributable to a positive trend in profitability in Consulting Services and Managed Services, as well as continued growth and increased contributions from PayExpress and Ework Services. In particular, lower cost levels – and thus a lower rate of cost increases – supported a higher operating margin. Adjusted for normal seasonal variations and accrual effects, our cost levels were lower compared with the second quarter and the rate of growth was lower than both sales growth and volume growth compared to 2021.
Increased value in our offering
Our plan for continued earnings improvement includes key initiatives related to service development and increased digitalization of our business processes. During the quarter, we took additional steps to develop and increase the value in our service offering. One example of this is new supplementary services in the field of security, where we have a strong offering that meets extremely strict requirements in both the private and the public sector.
Moreover, we are working not only on reinforcing our consultant network in general, but also on the possibilities of offering consultants in expert and specialized fields where there is significant demand. Overall, we strengthened our position in the supply chain and in our network. During the third quarter, we had an average of just over 12,800 consultants (10,900) on assignment, corresponding to an increase of just over 17 percent.
Resilient business model in an uncertain environment
The uncertainty around the general market situation has gathered pace in recent times. Owing to its agile business model, Ework is able to respond quickly to changes in demand – which is key to success in our industry. We also deliver skills that are crucial for the strategic development of a number of our customers, thus making these nearly irreplaceable. By focusing on value-creating services for all players in the value chain, we are building long-term and sustainable relationships that ensure our delivery capacity regardless of the market situation.
The shortage of competence in digitalization and the transition to a green economy continue to serve as strong drivers of demand in both the private and the public sector. The proof of this is the numerous new framework agreements we signed in the third quarter, many of which are based on quality and the capacity to provide the right competence. While the number of assignments is increasing, so are the number of consultants in our network – which is a clear sign of the desire to work flexibly on a per-assignment basis under organized forms.
Outlook
We continued to strengthen our position during the quarter, reporting a continued strong order intake. We are also continuing to develop Ework's value offering. In light of this, our previous assessment that we will increase both our rate of growth and our operating margin in 2022 as compared with 2021 stands firm.
Stockholm, 20 October 2022
Karin Schreil, CEO
THIRD QUARTER 2022
Operations
Market performance
The positive trend in demand stabilized at a high level during the quarter. Demand was more hesitant in certain sectors – grocery and retail, for example – while it remained strong in sectors such as automotive.
Order intake continued to rise during the quarter to SEK 3,606 M (3,054), and the average length of contracts signed with our customers increased, which promoted the growth in volume. New contracts increased by 29 percent, and we also noted an increase in profitability in order intake during the quarter. Out of the order intake of SEK 14.1 billion (11.2) to date this year, 48 percent comprises new customers.
The need for competence may vary over time during longer processes, which becomes easier to resolve via Ework since we can meet different needs more flexibly than is possible compared with permanent positions. Over the long term, we see that demand in the consulting market will continue to be driven by a broad need of specialist expertise for our customers' ongoing digital and strategic development.
The Group's net sales
The Group's net sales increased by 24 percent in the third quarter, totalling SEK 3,492 M (2,815). The upswing is attributable to increased demand, successful sales and – to some extent – price increases for consultant fees. The number of consultants on assignment totalled 13,297 (11,280) at the end of the quarter, corresponding to an increase of 17.9 percent compared with 2021.
Net sales in the first nine months of the year rose 22.0 percent to SEK 11,383 M (9,327). The increase in Poland was particularly pronounced.
The Group's earnings
The Group's operating profit for the third quarter doubled, totalling SEK 46.4 M (23.5). At the same time, it was an increase of approximately SEK 11.5 M compared with the second quarter, when many new employees were hired. The increase in the third quarter is attributable primarily to robust sales growth. The operating margin (EBIT) totalled 132 basis points (83), impacted positively by non-recurring items totalling SEK 9.2 M.
A review of the company's contracts for the nine-month period yielded a positive effect of SEK 3.1 M, which improved the operating margin in the quarter by 9 basis points. Costs were also impacted positively by SEK 6.2 M. Essentially, these items were accrual effects from previous quarters such as the adjustment of variable salary costs and the capitalization of platform development.
Net financial items for the quarter amounted to SEK -2.7 M (-0.2), of which interest expense amounted to SEK -2.5 M (-1.1). Profit after financial items amounted to SEK 43.7 M (23.3). Profit after tax amounted to SEK 34.8 M (18.3).
Operating profit (EBIT) for the first nine months of the year increased by 51 percent to SEK 128 M (84.5). The operating margin (EBIT) for the nine-month period totalled 1.13 percent (0.90).
Net financial items for the first nine months of the year totalled SEK -6.2 M (-1.4), of which interest expense comprised SEK -4.1 M (-3.1). Profit after financial items for the period amounted to SEK 122 M (83.0). Profit after tax amounted to SEK 95.9 M (64.8).
Sweden
Net sales for the quarter increased 19 percent to SEK 2,490 M (2,089). The increase was mainly attributable to higher demand combined with a good market position. Operating profit improved drastically, totalling SEK 25.2 (9.9), driven by factors such as the strong development in the Gothenburg area.
Net sales for the first nine months of the year increased 20 percent to SEK 8,462 M (7,071) while operating profit increased 79 percent to SEK 73.9 M (41.2).
Norway
Net sales for the quarter rose 32 percent to SEK 507 M (383). Operating profit amounted to SEK 9.0 M (7.8). This development was due primarily to continued favorable demand.
Net sales for the first nine months of the year increased 29 percent to SEK 1,568 M (1,218) while operating profit increased by 14 percent to SEK 31.6 M (27.7).
Denmark
Net sales for the quarter increased by 47 percent to SEK 212 M (144), while operating profit totalled SEK 2.3 M (1.0). This positive development was primarily related to continued favorable demand.
Net sales for the first nine months of the year increased 29 percent to SEK 557 M (433) while operating profit rose to SEK 4.6 M (2.0).
Finland
Net sales in the third quarter rose 7 percent to SEK 85.3 M (79.4), while operating profit fell to SEK 0.6 M (0.8).
Net sales for the first nine months of the year increased marginally to SEK 271 M (263) while operating profit fell 29 percent to SEK 2.5 M (3.5).
Poland
The strong growth trend continued for Ework's Polish operations and net sales increased 65.0 percent to SEK 198 M (120) during the quarter. Operating profit increased 150 percent to SEK 8.0 M (3.2). Demand increased in Poland as a result of rising inflation and geopolitical developments as more companies searched for markets with a more attractive cost picture.
Net sales for the first nine months of the year increased 55.3 percent to SEK 525 M (338) while operating profit increased 76.6 percent to SEK 11.3 M (6.4).
To date this year, Ework's position in the Polish market has substantially strengthened. It is a market that is assessed as having significant potential for further development.
Consultant platform, networks and structural capital
Using the Verama digital platform, Ework connects consultants with client companies and current project assignments. The number of affiliated consultant profiles increased by 8,923 during the quarter, an increase of 11.7 percent compared with the preceding quarter. In pace with the increased use of the platform and thereby the volume of information, the possibilities for analyzing performance in order to further develop our business are improving.
Our PayExpress financing service is one possibility for our customers to adjust their terms of payment, which provides opportunities for rapid payment for our consultants, for example. PayExpress continued to post good performance during the quarter. Rising interest rates and increased uncertainty around economic developments promoted interest in the service.
One of Ework's largest assets is the global network of consultants that has been built up. Ework strengthened this network further during the quarter, which enabled more contracts to be won. Currently, the company has consultants operating in approximately 50 countries, which is a major strength in being able to meet varied customer needs since it creates flexibility where both expertise and price are concerned. This is coordinated through Ework's Remote Sourcing Center.
Financial position and cash flow
Cash flow from operating activities for the third quarter totalled SEK 44.7 M (85.2).
Ework holds a credit of SEK 550 M (550) pertaining to additional services with advance payment. Accounts receivable have been pledged as collateral for this facility. As of 30 September, the company's overdraft facility totalled SEK 0 M (30). Total unutilized credit at the end of the period amounted to SEK 277 M (424).
The equity/assets ratio at the end of the period was 5.5 percent (5.3).
Workforce
The average number of employees in the quarter was 318 (285). The average number of employees is counted based on the number of full-time employees, excluding employees on parental leave, on work leave and long-term sick leave.
Parent Company
The Parent Company's net sales for the third quarter totalled SEK 2,490 M (2,089). Profit after financial items was SEK 25.9 M (9.8), and profit after tax was SEK 20.5 M (7.7).
The Parent Company's equity was SEK 137.3 M (119.6) at the end of the quarter, and its equity/assets ratio was 4.7 percent (4.9).
Subsequent events
No significant events have occurred after the end of the reporting period.
Significant risks and uncertainties
Ework's material business risks, for the Group and the Parent Company, consist of reduced demand for consulting services, difficulties in attracting and retaining skilled staff, credit risks, and to a lesser extent, currency risks.
Ework's risks are impacted by the effects on society and the economy as well as rising interest rates and uncertainty around the progress of inflation. This means a risk of reduced demand for consulting services. Meanwhile, regulatory decisions and necessary consideration of safety aspects may imply a risk of disruptions to the business, both for Ework's own staff and for consultants on assignment.
For a more detailed review of significant risks and uncertainties, please refer to Ework's Annual Report.
The Group previously provisioned SEK 7.0 M for a tax dispute in Norway, as stated in previous interim reports. The provision will remain awaiting a new decision. An amendment linked to labour legislation is currently being discussed in Norway. There is some uncertainty in the Norwegian market and among our customers pending a decision on the matter.
Other information
The company has an outstanding stock option program that is part of an incentive program for senior managers adopted by the 2017 Annual General Meeting. It resolved to issue a total of 120,000 share warrants per year during the period 2017–2019.
47,600 stock options were issued in 2019 with an exercise price of SEK 86.84, which mature in the fourth quarter of 2022.
The information disclosed in this Interim Report is mandatory for Ework Group AB (publ) to publish pursuant to the EU's Market Abuse Regulation (MAR). This information was submitted for publication at around 11:00 a.m. (CEST) on 20 October 2022, through the agency of the CEO.
KEY PERFORMANCE DATA
| SEK 000 | Jul–Sep 2022 |
Jul–Sep 2021 |
Jan–Sep 2022 |
Jan–Sep 2021 |
Rolling 4 quarters Oct 21–Sep 22 |
Full-year 2021 |
|---|---|---|---|---|---|---|
| Net sales | 3,492,277 | 2,815,013 | 11,383,089 | 9,326,801 | 15,244,944 | 13,188,655 |
| EBIT | 46,404 | 23,507 | 128,287 | 84,476 | 170,581 | 126,770 |
| Profit before tax | 43,659 | 23,347 | 122,108 | 83,037 | 163,369 | 124,298 |
| Profit for the period | 34,795 | 18,320 | 95,915 | 64,849 | 129,053 | 97,987 |
| Sales growth, % | 24.1 | 14.1 | 22.0 | 3.6 | 14.4 | 7.8 |
| EBIT margin, % | 1.3 | 0.8 | 1.1 | 0.9 | 1.1 | 1.0 |
| Profit margin, % | 1.3 | 0.8 | 1.1 | 0.9 | 1.1 | 0.9 |
| Return on equity, % | 66.7 | 38.9 | 94.4 | 45.9 | 82.7 | 47.7 |
| Total assets | 3,807,915 | 3,123,382 | 3,807,915 | 3,123,382 | 3,807,915 | 3,724,151 |
| Equity | 208,870 | 164,658 | 208,870 | 164,658 | 208,870 | 198,917 |
| Equity/assets ratio, % | 5.5 | 5.3 | 5.5 | 5.3 | 5.5 | 5.3 |
| Acid test ratio, % | 102.9 | 102.8 | 102.9 | 102.8 | 101.9 | 103.2 |
| Average number of employees | 318 | 285 | 309 | 281 | 289 | 280 |
| Net sales per employee | 10,982 | 9,877 | 35,796 | 33,191 | 52,705 | 47,102 |
| KEY RATIOS PER SHARE | ||||||
| Earnings per share before dilution, SEK | 2.04 | 1.06 | 5.58 | 3.76 | 7.50 | 5.68 |
| Earnings per share after dilution, SEK | 2.03 | 1.06 | 5.57 | 3.76 | 7.48 | 5.68 |
| Equity per share before dilution, SEK | 12.1 | 9.6 | 12.1 | 9.6 | 12.1 | 11.5 |
| Equity per share after dilution, SEK | 12.1 | 9.6 | 12.1 | 9.6 | 12.1 | 11.5 |
| Cash flow from operating activities per share before dilution, SEK |
2.59 | 4.94 | 5.11 | 7.37 | 1.70 | 3.96 |
| Cash flow from operating activities per share after dilution, SEK |
2.58 | 4.94 | 5.09 | 7.37 | 1.70 | 3.96 |
| Number of shares outstanding at end of period before dilution (000) |
17,240 | 17,240 | 17,240 | 17,240 | 17,240 | 17,240 |
| Number of shares outstanding at end of period after dilution (000) |
17,288 | 17,240 | 17,288 | 17,240 | 17,288 | 17,247 |
| Average number of shares outstanding before dilution (000) |
17,240 | 17,240 | 17,240 | 17,240 | 17,240 | 17,240 |
| Average number of shares outstanding after dilution (000) |
17,288 | 17,240 | 17,288 | 17,240 | 17,288 | 17,247 |
SHAREHOLDERS
| As of 30 September 2022 | No. of shares | Votes and equity |
|---|---|---|
| Investment AB Arawak 1) | 6,760,358 | 39.2% |
| Avanza Pension | 3,178,895 | 18.4% |
| Protector Forsikring ASA | 1,737,682 | 10.1% |
| Katarina Salén, private and through family company | 473,962 | 2.8% |
| Patrik Salén and family through company | 397,500 | 2.3% |
| Ålandsbanken Abp (Finland), Swedish branch | 377,730 | 2.2% |
| Karin Schreil through company | 252,000 | 1.5% |
| Handelsbanken Liv Forsakring AB | 182,795 | 1.1% |
| Mikael Gunnarsson | 162,000 | 0.9% |
| Claes Ruthberg | 155,000 | 0.9% |
| Sub-total | 13,677,922 | 79.4% |
| Other | 3,561,753 | 20.6% |
| Total | 17,239,675 | 100% |
1) Staffan Salén and family 86.2%, Erik Åfors 13.8%.
Consolidated Statement of Income and Other Comprehensive Income
| SEK 000 Note |
Jul–Sep 2022 |
Jul–Sep 2021 |
Jan–Sep 2022 |
Jan–Sep 2021 |
Rolling 4 quarters Oct 21–Sep 22 |
Full-year 2021 |
|---|---|---|---|---|---|---|
| Operating income | ||||||
| Net sales 1 |
3,492,277 | 2,815,013 | 11,383,089 | 9,326,801 | 15,244,944 | 13,188,655 |
| Other operating income | 1 | 1 | 64 | 17 | 172 | 124 |
| Total operating income | 3,492,278 | 2,815,015 | 11,383,153 | 9,326,817 | 15,245,115 | 13,188,780 |
| Operating costs | ||||||
| Cost of consultants on assignment | -3,354,522 | -2,710,739 | -10,957,021 | -8,985,906 | -14,676,326 | -12,705,211 |
| Work performed by the company for its own use and capitalized |
6,744 | 3,547 | 13,928 | 11,190 | 17,519 | 14,781 |
| Other external costs | -34,930 | -20,013 | -90,467 | -63,870 | -118,176 | -91,580 |
| Personnel costs | -60,320 | -55,650 | -200,159 | -178,141 | -267,444 | -245,425 |
| Depreciation, amortization and impairment of property, plant and equipment and intangible non-current assets |
-2,846 | -8,654 | -21,147 | -25,615 | -30,106 | -34,575 |
| Total operating costs | -3,445,874 | -2,791,508 | -11,254,865 | -9,242,341 | -15,074,534 | -13,062,010 |
| Earnings before interest and taxes | 46,404 | 23,507 | 128,287 | 84,476 | 170,581 | 126,770 |
| Profit from financial items | ||||||
| Net financial items | -2,745 | -159 | -6,179 | -1,439 | -7,212 | -2,472 |
| Profit after financial items | 43,659 | 23,347 | 122,108 | 83,037 | 163,369 | 124,298 |
| Tax | -8,864 | -5,028 | -26,193 | -18,187 | -34,316 | -26,311 |
| Profit for the period | 34,795 | 18,320 | 95,915 | 64,849 | 129,053 | 97,987 |
| Other comprehensive income | ||||||
| Items that have been reclassified, or are reclassifiable, to profit or loss |
||||||
| Translation differences on translation of foreign operations for the period |
49 | -613 | 1,467 | 1,467 | 0 | |
| Value changes during the period for cash flow instruments |
-1,470 | -389 | -1,673 | -158 | 151 | 1,667 |
| Value changes during the period for cash flow instruments transferred to profit for the period |
1,107 | 42 | 443 | 0 | -311 | -754 |
| Other comprehensive income for the | ||||||
| period | -314 | -960 | 237 | -158 | 1,307 | 913 |
| Comprehensive income for the period | 34,481 | 17,360 | 96,468 | 64,692 | 130,676 | 98,900 |
| Earnings per share | ||||||
| before dilution (SEK) | 2.04 | 1.06 | 5.58 | 3.76 | 7.50 | 5.68 |
| after dilution (SEK) | 2.03 | 1.06 | 5.57 | 3.76 | 7.48 | 5.68 |
| Number of shares outstanding at end of reporting period: |
||||||
| before dilution (000) | 17,240 | 17,240 | 17,240 | 17,240 | 17,240 | 17,240 |
| after dilution (000) | 17,288 | 17,240 | 17,288 | 17,240 | 17,288 | 17,247 |
| Average number of outstanding shares: |
||||||
| before dilution (000) | 17,240 | 17,240 | 17,240 | 17,240 | 17,240 | 17,240 |
| after dilution (000) | 17,288 | 17,240 | 17,288 | 17,240 | 17,288 | 17,247 |
Consolidated Statement of Financial Position
| SEK 000 Note |
30 September 2022 | 30 September 2021 | 31 December 2021 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Intangible assets | 66,067 | 61,242 | 61,595 |
| Property, plant and equipment | 7,345 | 2,685 | 2,803 |
| Right-of-use assets | 44,081 | 27,495 | 28,003 |
| Deferred tax asset | 3,763 | 2,811 | 4,469 |
| Non-current receivables | 4,879 | 838 | 857 |
| Total non-current assets | 126,135 | 95,070 | 97,728 |
| Current assets | |||
| Accounts receivable | 3,201,180 | 2,650,136 | 3,246,162 |
| Tax receivables | 8,729 | 21,472 | 3,426 |
| Other receivables 2 |
18,472 | 15,268 | 15,383 |
| Prepaid expenses and accrued income | 267,685 | 172,700 | 206,957 |
| Cash and cash equivalents | 185,713 | 168,737 | 154,495 |
| Total current assets | 3,681,780 | 3,028,312 | 3,626,423 |
| Total assets | 3,807,915 | 3,123,382 | 3,724,151 |
| Equity and liabilities | |||
| Equity | |||
| Share capital | 2,241 | 2,241 | 2,241 |
| Other paid-up capital | 59,749 | 59,749 | 59,749 |
| Translation reserve | -9,999 | -11,357 | -10,236 |
| Retained earnings including profit for the period | 156,880 | 114,025 | 147,163 |
| Total equity | 208,870 | 164,658 | 198,917 |
| Non-current liabilities | |||
| Lease liabilities | 21,068 | 13,500 | 11,437 |
| Total non-current liabilities | 21,068 | 13,500 | 11,437 |
| Current liabilities | |||
| Current interest-bearing liabilities | 276,765 | 156,530 | 211,157 |
| Lease liabilities | 19,325 | 9,535 | 12,466 |
| Accounts payable | 3,117,854 | 2,644,190 | 3,173,426 |
| Other liabilities | 41,861 | 40,395 | 32,627 |
| Accrued expenses and deferred income | 122,171 | 94,574 | 84,120 |
| Total current liabilities | 3,577,976 | 2,945,224 | 3,513,797 |
| Total equity and liabilities | 3,807,915 | 3,123,382 | 3,724,151 |
Consolidated Statement of Changes in Equity
| SEK 000 | Share capital |
Other paid-up capital |
Translation reserve |
Risk reserve |
Retained earnings including profit for the period |
Total equity |
|---|---|---|---|---|---|---|
| Opening equity, 1 January 2021 | 2,241 | 59,749 | -11,149 | 0 | 161,233 | 212,074 |
| Comprehensive income for the period | ||||||
| Profit for the period | 64,849 | 64,849 | ||||
| Other comprehensive income for the period |
180 | -389 | -208 | |||
| Comprehensive income for the period | 180 | -389 | 64,849 | 64,641 | ||
| Transactions with the Group's shareholders |
||||||
| Dividends | -112,058 | -112,058 | ||||
| Closing equity, 30 September 2021 | 2,241 | 59,749 | -10,969 | -389 | 114,025 | 164,658 |
| Opening equity, 1 October 2021 | 2,241 | 59,749 | -10,969 | -389 | 114,025 | 164,658 |
| Comprehensive income for the period | ||||||
| Profit for the period | 33,138 | 33,138 | ||||
| Other comprehensive income for the period |
1,487 | -365 | 1,122 | |||
| Comprehensive income for the period | 1,487 | -365 | 34,260 | |||
| Closing equity, 31 December 2021 | 2,241 | 59,749 | -9,482 | -754 | 147,163 | 198,917 |
| Opening equity, 1 January 2022 | 2,241 | 59,749 | -9,482 | -754 | 147,163 | 198,917 |
| Comprehensive income for the period | ||||||
| Profit for the period | 95,915 | 95,915 | ||||
| Other comprehensive income for the period |
1,467 | -1,230 | 237 | |||
| Comprehensive income for the period | 1,467 | -1,230 | 95,915 | 96,152 | ||
| Transactions with the Group's shareholders |
||||||
| Dividends | -86,198 | -86,198 | ||||
| Closing equity, 30 September 2022 | 2,241 | 59,749 | -8,016 | -1,984 | 156,880 | 208,870 |
Consolidated Statement of Cash Flows
| Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | Rolling 4 quarters Oct 21–Sep |
Full-year | |
|---|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | 22 | 2021 |
| Operating activities | ||||||
| Profit after financial items | 43,659 | 23,347 | 122,108 | 83,037 | 163,369 | 124,298 |
| Adjustment for non-cash items | 2,846 | 8,654 | 21,147 | 25,615 | 30,616 | 35,085 |
| Income tax paid | -11,543 | -7,959 | -33,806 | -26,596 | -23,488 | -16,278 |
| Cash flow from operating activities before changes in working capital |
34,962 | 24,042 | 109,448 | 82,055 | 170,498 | 143,105 |
| Cash flow from changes in working capital | 9,719 | 61,187 | -21,385 | 44,972 | -141,168 | -74,811 |
| Increase (-)/decrease (+) in operating | ||||||
| receivables | 347,728 | 367,066 | 47,342 | 180,707 | -573,353 | -439,988 |
| Increase (+)/decrease (-) in operating liabilities | -338,009 | -305,879 | -68,727 | -135,736 | 432,186 | 365,177 |
| Cash flow from operating activities | 44,681 | 85,229 | 88,063 | 127,027 | 29,330 | 68,294 |
| Investing activities | ||||||
| Acquisition of property, plant & equipment | -2,425 | -24 | -6,362 | -52 | -6,615 | -305 |
| Acquisition of intangible assets | -6,744 | -3,544 | -13,928 | -11,340 | -17,369 | -14,781 |
| Cash flow from investing activities | -9,169 | -3,569 | -20,290 | -11,392 | -23,984 | -15,086 |
| Financing activities | ||||||
| Dividend paid to Parent Company shareholders | 0 | 0 | -86,198 | -112,058 | -86,198 | -112,058 |
| Amortization of lease liability and borrowings | 46,284 | -41,288 | 56,016 | -74,161 | 103,917 | -26,260 |
| Realized derivatives | -4,829 | -215 | -4,829 | 1,355 | -3,348 | 2,836 |
| Cash flow from financing activities | 41,455 | -41,502 | -35,011 | -184,864 | 14,371 | -135,482 |
| Cash flow for the period | 76,968 | 40,158 | 32,762 | -69,230 | 19,718 | -82,274 |
| Cash and cash equivalents at beginning of period |
107,501 | 129,953 | 154,495 | 239,115 | 168,737 | 239,115 |
| Exchange rate difference | 1,245 | -1,374 | -1,544 | -1,148 | -2,744 | -2,346 |
| Cash and cash equivalents at end of period | 185,713 | 168,737 | 185,713 | 168,737 | 185,711 | 154,495 |
Parent Company Income Statement
| Rolling 4 quarters |
||||||
|---|---|---|---|---|---|---|
| SEK 000 | Jul–Sep 2022 |
Jul–Sep 2021 |
Jan–Sep 2022 |
Jan–Sep 2021 |
Oct 21–Sep 22 |
Full-year 2021 |
| Operating income | ||||||
| Net sales | 2,490,308 | 2,089,364 | 8,461,638 | 7,071,093 | 11,374,265 | 9,983,720 |
| Work performed by the company for its own use and capitalized |
6,744 | 3,547 | 13,928 | 11,190 | 17,519 | 14,781 |
| Other operating income | 9,543 | 6,142 | 27,416 | 20,463 | 33,928 | 26,975 |
| Total operating income | 2,506,595 | 2,099,053 | 8,502,983 | 7,102,746 | 11,425,711 | 10,025,475 |
| Operating costs | ||||||
| Cost of consultants on assignment | -2,406,959 | -2,024,240 | -8,181,840 | -6,847,894 | -11,000,616 | -9,666,670 |
| Other external costs | -32,328 | -26,074 | -100,418 | -82,293 | -133,204 | -115,079 |
| Personnel costs | -38,204 | -35,872 | -135,624 | -122,879 | -180,261 | -167,515 |
| Depreciation, amortization and impairment | ||||||
| of property, plant & equipment and intangible | ||||||
| non-current assets | -3,903 | -2,955 | -11,167 | -8,488 | -14,515 | -11,836 |
| Total operating costs | -2,481,395 | -2,089,140 | -8,429,050 | -7,061,553 | -11,328,596 | -9,961,100 |
| Earnings before interest and taxes | 25,200 | 9,913 | 73,933 | 41,193 | 97,115 | 64,376 |
| Profit from financial items | ||||||
| Dividends from participations in subsidiaries | 0 | 0 | 0 | 7,334 | 27,686 | 35,020 |
| Other interest income and similar items | 3,197 | 608 | 8,039 | 3,329 | 6,789 | 2,079 |
| Interest expense and similar items | -2,527 | -760 | -6,814 | -2,258 | -7,576 | -3,020 |
| Profit after financial items | 25,869 | 9,761 | 75,158 | 49,599 | 124,014 | 98,455 |
| Tax | -5,380 | -2,038 | -15,677 | -8,758 | -20,124 | -13,205 |
| Profit for the period* | 20,489 | 7,723 | 59,481 | 40,840 | 103,890 | 85,250 |
* Profit for the period is consistent with comprehensive income for the period.
Parent Company Balance Sheet
| SEK 000 | 30 September 2022 | 30 September 2021 | 31 December 2021 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Intangible assets | 66,067 | 61,092 | 61,595 |
| Property, plant and equipment | 6,653 | 1,656 | 1,855 |
| Financial assets | |||
| Other non-current receivables | 3,750 | 38 | 38 |
| Participations in Group companies | 34,240 | 34,215 | 34,240 |
| Total financial assets | 37,990 | 34,253 | 34,278 |
| Total non-current assets | 110,709 | 97,000 | 97,727 |
| Current assets | |||
| Accounts receivable | 2,367,235 | 1,967,294 | 2,509,861 |
| Receivables from Group companies | 173,971 | 125,972 | 155,423 |
| Tax receivables | 17,307 | 30,255 | 12,199 |
| Other receivables | 32 | 152 | 76 |
| Prepaid expenses and accrued income | 211,474 | 141,636 | 160,407 |
| Cash and bank balances | 68,679 | 67,664 | 41,814 |
| Total current assets | 2,838,699 | 2,332,972 | 2,879,781 |
| Total assets | 2,949,408 | 2,429,972 | 2,977,508 |
| Equity and liabilities Equity |
|||
| Restricted equity | |||
| Share capital (17,239,675 shares with par value of SEK 0.13) | 2,241 | 2,241 | 2,241 |
| Statutory reserve | 6,355 | 6,355 | 6,355 |
| Development fund | 69,180 | 60,934 | 61,560 |
| Total restricted equity | 77,776 | 69,530 | 70,157 |
| Non-restricted equity | |||
| Share premium reserve | 9,518 | 9,518 | 9,518 |
| Retained earnings | -9,439 | -245 | -872 |
| Profit for the period | 59,481 | 40,840 | 85,250 |
| Total non-restricted equity | 59,559 | 50,113 | 93,896 |
| Total equity | 137,335 | 119,643 | 164,053 |
| Current liabilities | |||
| Liabilities to credit institutions | 276,765 | 156,530 | 211,157 |
| Accounts payable | 2,407,568 | 2,038,829 | 2,502,224 |
| Liabilities to Group companies | 4,566 | 4,876 | 586 |
| Other liabilities | 29,734 | 27,291 | 26,854 |
| Accrued expenses and deferred income | 93,440 | 82,802 | 72,634 |
| Total current liabilities | 2,812,072 | 2,310,329 | 2,813,455 |
| Total equity and liabilities | 2,949,408 | 2,429,972 | 2,977,508 |
ACCOUNTING POLICIES
The Interim Report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and appropriate provisions of the Swedish Annual Accounts Act. The Interim Report for the Parent Company has been prepared in accordance with chapter 9 of the Swedish Annual Accounts Act, on interim financial reporting.
Accounting policies and calculation methods are unchanged from those applied in the annual report for 2021.
Note 1 The Group's operating segments
Third quarter 2022 compared to third quarter 2021
| Sweden Jul–Sep | Norway Jul–Sep | Denmark Jul–Sep | Finland Jul–Sep | Poland Jul–Sep | Total Jul–Sep | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Income from clients | 2,490,631 2,088,900 506,822 | 382,818 | 211,943 | 144,112 | 85,308 | 79,361 | 198,486 | 119,823 3,493,190 2,815,013 | ||||
| Profit per segment | 39,064 | 20,946 | 11,634 | 9,684 | 3,463 | 1,840 | 1,626 | 1,480 | 10,188 | 4,211 | 65,976 | 38,162 |
| Group-wide expenses | -12,637 | -10,259 | -2,646 | -1,872 | -1,119 | -798 | -1,003 | -727 | -2,169 | -1,000 | -19,573 | -14,656 |
| EBIT | 26,428 | 10,687 | 8,989 | 7,813 | 2,344 | 1,042 | 623 | 753 | 8,019 | 3,211 | 46,402 | 23,505 |
| Net financial items | — | — | — | — | — | — | — | — | — | — | -2,745 | -159 |
| Profit/loss for the period | ||||||||||||
| before tax | 43,657 | 23,347 |
First nine months of 2022 compared to corresponding period 2021
| Sweden Jan–Sep | Norway Jan–Sep | Denmark Jan–Sep | Finland Jan–Sep | Poland Jan–Sep | Total Jan–Sep | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Income from clients | 8,463,554 7,075,377 1,568,141 1,217,963 | 557,072 | 432,701 270,690 262,607 524,544 | 338,153 11,384,002 9,326,801 | ||||||||
| Profit per segment | 120,654 | 78,539 | 39,583 | 33,755 | 7,825 | 4,417 | 5,140 | 5,683 | 16,366 | 9,527 | 189,569 | 131,921 |
| Group-wide expenses | -42,337 | -33,568 | -8,006 | -6,082 | -3,202 | -2,391 | -2,654 | -2,226 | -5,083 | -3,176 | -61,282 | -47,444 |
| EBIT | 78,317 | 44,970 | 31,577 | 27,673 | 4,624 | 2,025 | 2,486 | 3,457 | 11,283 | 6,351 | 128,287 | 84,476 |
| Net financial items | — | — | — | — | — | — | — | — | — | — | -6,179 | -1,439 |
| Profit/loss for the period | ||||||||||||
| before tax | 122,107 | 83,037 |
Note 2 Financial instruments valued at fair value
| Jan–Sep 2022 | Jan–Sep 2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| Carrying amount | Fair value | Carrying amount | Fair value | |||||
| SEK 000 | Valued at fair value through profit or loss |
Valued at fair value via other total income |
Level 2 | Valued at fair value through profit or loss |
Valued at fair value via other total income |
Level 2 | ||
| Financial liabilities/ assets |
||||||||
| Currency derivatives | -294 | -1,230 | -1,524 | 2,130 | -389 | 1,741 |
Fair value is determined on the basis of quoted prices.
Carrying amount of accounts receivable, accrued income, cash and cash equivalents, accounts payable, current interest-bearing liabilities and other liabilities constitute a reasonable approximation of fair value.
Auditor's Report
To the Board of Directors of Ework Group AB (publ) Corp. ID No. 556587-8708
Introduction
We have reviewed the condensed interim financial information (interim report) of Ework Group AB (publ) as of 30 September 2022 and the nine-month period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm, 20 October 2022
KPMG AB
Helena Nilsson Authorized Public Accountant
DEFINITIONS
Ework Group utilizes a number of financial metrics in Interim Reports and Annual Reports that are not defined according to IFRS, known as alternative performance measures, according to ESMA (the European Securities and Markets Authority) guidelines.
A number of metrics and key indicators appearing in interim reports and the Annual Report are defined below. Most should be considered generally accepted, and of such nature that they could be expected to be presented in interim reports and the Annual Report to convey a view of the Group's results of operations, profitability and financial position.
| Key performance data | Definition and usage |
|---|---|
| Sales growth | Net sales for the period less net sales for the comparative period in relation to net sales for the comparative period. |
| Operating margin, EBIT | Operating profit (EBIT) in relation to net sales. |
| Profit margin | Profit after financial items in relation to net sales. |
| Return on equity | Profit for the period in relation to average equity in the period. Return on equity is restated at an annualized rate in interim reporting. A profitability metric that illustrates returns on the capital shareholders invested in operations during the period. |
| Equity/assets ratio | Reported equity in relation to reported total assets at period-end. Metric illustrating interest rate sensitivity and financial stability. |
| Quick ratio | Current assets in relation to current liabilities. |
| Earnings per share | Profit for the period in relation to the number of outstanding shares before dilution at period-end. Defined in IAS 33. |
| Equity per share | Equity in relation to the number of shares outstanding before dilution at the end of the period. Metric illustrating shareholders' proportion of total net assets per share. |
Ework Group AB (publ) provides total talent solutions, with focus on IT/OT, R&D, Engineering and Business Development and has today around 13,000 independent professionals on assignment. Ework partners with clients, in both the private and public sector, and professionals to create sustainable talent supply chains. Ework was founded in Sweden year 2000 and operates in Sweden, Denmark, Norway, Finland, and Poland with its head office in Stockholm. Ework's shares are listed on Nasdaq Stockholm. www.eworkgroup.com
Ework Group AB (publ) Vasagatan 16 SE-111 20 Stockholm Tel: +46 (0)8 506 05500 Corp. ID No. 556587-8708
Forthcoming financial reports
Year-end Report, January–December 2022 9 February 2022
Contacts for more information
Karin Schreil, CEO +46 (0)8 506 05500 mobile +46 (0)70 794 5883 Klas Rewelj, CFO +46 (0)8 506 05500 mobile +46 (0)70 626 5424
