Slide 1: Second Quarter 2024
Second Quarter 2024 July 19th, 2024 Karin Schreil, President & CEO Klas Rewelj, Executive Vice President & CFO
Slide 2: Increased Demand, more Profitable Business and Strengthened Margin
Increased Demand, more Profitable Business and Strengthened Margin • Increased demand for talent in private sector • Continued good progress in new client wins and frame agreement extensions • Higher margins in new and extended assignment contracts • Lower cost base and improved scalability Second Q
Slide 3: Stronger but volatile Market
Service Revenue by Industry, Q2 2% (-13%) Stronger but volatile Market 4% (54%) 2% (-44%) Public 5% (19%) Automotive Manufacturing • Need for talent to drive development 11% (17%) 24% (-14%) Consulting, Tech & Telecom Banking, Finance & Insurance − Growth and strategic initiatives Retail 14% (-27%)
Slide 4: Increased Trust and important Client Wins
Increased Trust and important Client Wins Swedavia Transitio Ø Increased client value Ø Stronger relations Ø More value-adding services
Slide 5: Significant advancement of our Service Portfolio
Significant advancement of our Service Portfolio • New solution for Total Talent Management – PMO • Bild här • Upgraded solution for Recruitment – RPO • New service targeting client cashflow and working capital - Corporate Pay Express • Upgraded scalable financing solution for Pay Express Services 5
Slide 6: Progress in Operational Excellence
Progress in Operational Excellence • Updated Operating Model − Model operational − Full alignment with our unified service delivery − Securing maximum value contribution: Ø Focus on skill areas in Talent Acquisition Ø Internal load balancing Ø Increased cost efficiency Ø Cross-collaboration & best p
Slide 7: Future-proofing our Talent Network
Future-proofing our Talent Talent Network by Skill Area Network • Growing global Talent Network − 160,000 Professionals − 21,000 Partners − More than 50 countries • Geographical expansion - Slovakia & CEE • Skills expansion - AI • Increased value creation - Ework+ System Develo pment & AI Business M
Slide 8: Expansion into new Markets
Expansion into new Markets • Establishment in Slovakia − New client frame agreements in place for both contingent & permanent talent needs − Business operations up and running − Close collaboration with Poland and other Market Units • Blueprint for continued expansion • Capabilities in place to serv
Slide 9: Q2 Financials
Q2 Financials Klas Rewelj, EVP & CFO
Slide 10: Continued increase in order margin
Continued increase in order margin Order intake, quarter (MSEK) • Order intake -10.3% to MSEK 4,924 (5,492) 10 000 − Two-thirds of the lower order intake from phase out low-margin 9 000 clients 8 000 − Continued low volumes in Norway 7 000 • Increasing requests from Private Sector 6 000 − Increasing
Slide 11: Improved cost efficiency increased EBIT and operating margin
Improved cost efficiency increased EBIT and operating margin Net sales and operating profit (MSEK) Net sales Operating profit Net sales -5.1% to SEK 4,151 million 5 000 70 • Mainly due to phase-out of Vattenfall as well as lower 4 500 volumes in Norway 60 4 000 • One working day more in Q2 contribut
Slide 12: Phase-out of Vattenfall and lower volumes in Norway reduced revenue
Phase-out of Vattenfall and lower volumes in Norway reduced revenue Net Sales (MSEK) 4500 4450 4400 4384 4375 4350 -9 4300 4250 4200 22 4151 4150 1 4100 -236 -12 4050 4000 Reclassification Volume Add-on Services Net Sales Q2 2024 Reported Net Sales Q2 PayExpress Net Sales Q2 2023 Average rates Excha
Slide 13: Increased cost efficiency driving profitability upwards
Increased cost efficiency driving profitability upwards +10.1m (24.3%) EBIT (MSEK) 60 18,5 0,6 51,8 50 3,6 41,7 40 38 4 30 -8,3 -4,7 20 10 0 Reclassification Volume Add-on Services Exchange rates Reported EBIT Q2 Adjusted EBIT Q2 Average rates Total Cost EBIT Q2 2024 2023 2023 13
Slide 14: Operating margin
Operating margin Operating margin, basis points 140 • Operating margin (EBIT) of 125 bps (87 adj 95 bps) 120 • Solid year on year improvement • Margin kept down by: 100 o Assignments booked in H2 2023 80 o Delayed phase-out of “low margin” clients o Norway “headwinds” 60 • Margin increase supported
Slide 15: EBIT in relation to Service Revenue (Gross Profit)
EBIT in relation to Service Revenue (Gross Profit ) EBIT to Service Revenue margin % • Introducing a new complementary margin KPI 35% • Operating profit in relation to our retained income 30% • EBIT to Service Revenue Margin 33,2% (adj 25,0%) 25% • Fair benchmark to peers removing “low margin” label
Slide 16: Summary and Outlook
Summary and Outlook • Increased demand for talent in private sector • Continued good progress in new client wins and frame agreement extensions • Higher margins in new and extended assignment contracts • Lower cost base and improved scalability • Ework expects to show growth at the end of 2024 • Out