Slide 1: Third Quarter 2024
Third Quarter 2024 October 23rd, 2024 Karin Schreil, President & CEO Klas Rewelj, Executive Vice President & CFO
Slide 2: Increased order intake and higher margins despite a more prolonged market recovery
Increased order intake and higher margins despite a more prolonged market recovery • Increased order intake after five quarters with negative growth • Higher margins in the order intake for the fifth consecutive quarter • Positive momentum in value adding services growth • Successful expansion into
Slide 3: Volatility between industries and varying conditions across markets
Service Revenue by Industry, Q3 Volatility between industries and 2% (-67%) varying conditions across markets 4% (28%) 2% (-55%) Automotive Public 4% (20%) 24% (20%) Manufacturing 12% (16%) Consulting, Tech & Telecom Banking, Finance & Insurance 14%. (-33%) Retail 19% (-21%) Life Science Other • Vol
Slide 4: Extended trust and important client wins
Extended trust and important client wins Deutsche NOVO Telekom Energy IT Solutions Ø New PMO Solution Ø Continued growth of value-adding services Ø Climbing the value chain with clients
Slide 5: Expanded offering for increased value creation
Expanded offering for increased value creation • Continued development of Talent Acquisition and Talent Management offering − New offerings for temporary and permanent • Bild här placements of talent, on-shore and near-shore, individually or teams working on SoW basis • Launch of new Talent Manageme
Slide 6: Progress in operational excellence
Progress in operational excellence • Updated operating model − Model is operational and continuously fine-tuned − Talent network development and acquisition focusing on skill areas − Talent network growing by 10,000 professionals every quarter − Reinforced client governance for value and experience
Slide 7: Q3 Financials
Q3 Financials Klas Rewelj, EVP & CFO
Slide 8: Return to order growth, sustained trend of margin improvement
Return to order growth, sustained trend of margin improvement Order intake, quarter (Mkr) • Order intake +5.8% to SEK 3,204 M (3,028) 10 000 − Trend reversal after five quarters of negative growth 9 000 • Increase in demand, but recovery slower than anticipated 8 000 − No uplift in demand from publi
Slide 9: Increasing margins and lower cost improving profitability
Increasing margins and lower cost improving profitability Net sales and operating profit (MSEK) Net sales Operating profit Net sales -11% to SEK 3,227 M 5 000 70 • Reduced volumes of active assignments 4 500 60 • One workday more in Q3 vs. 2023 supporting growth 4 000 50 Operating profit (EBIT) SEK
Slide 10: Reduced volumes hampering growth and scaling
Reduced volumes hampering growth and scaling Net Sales (MSEK) 3800 3700 3639,9 3630,4 3600 -9,5 3500 3400 3300 10,4 1,6 3227,2 3200 -392,3 -23 3100 3000 Reclassification Volume Add-on Services Net Sales Q2 2024 Reported Net Sales Q2 PayExpress Comparable Net Sales Q3 Average rates Exchange rates 202
Slide 11: Higher margins and improved cost efficiency increasing profit
Higher margins and improved cost efficiency increasing profit EBIT (MSEK) +1,2m 50 (3,1%) 45 44,8 40 38,1 10,5 39,3 -6,7 -0,3 35 30 2,4 1,4 25 -12,8 20 15 10 5 0 Reclassification Volume Add-on Services Exchange rates Reported EBIT Q3 Adjusted EBIT Q3 Price/Mix Revenue Total Cost EBIT Q3 2024 2023 20
Slide 12: Increasing margins
Increasing margins Operating margin, basis points 140 • Operating margin (EBIT) 122 bps (105 bps adj, 123 bps) 120 • Substantial improvement in underlying margin 100 • Price increases on our add-on services 80 60 • Milestone with margin increase in active assignments 40 • Cost efficiency will come a
Slide 13: Service Revenue (Gross Profit) and Operating Profit (EBIT)
Service Revenue (Gross Profit) and Operating Profit (EBIT) EBIT to Service Revenue margin % • Complementary margin KPI 35% • Operating Profit in relation to Ework “Retained income for 30% Services provided” 25% • Comprehensive service offering and elevated value proposition 20% • Service revenue dri
Slide 14: Summary and outlook
Summary and outlook • Increased order intake after five quarters with negative growth • Higher margins in the order intake for the fifth consecutive quarter • Increasing margins and lower cost improving profitability • Reduced volumes hampering growth and scaling • Slower recovery in our main market