Ework Group
eWork - Norway continues to impress (ABG Sundal Collier)

2019-07-18 19:28
Q2 sales and gross profit +2% and +1% vs ABGSCe
Opex scalability mitigates declining gross margins
12.4x EV/EBIT ‘19e, 5.1% FCF yield
Q2 was largely in line with our expectations
Q2 sales were SEK 3,249m, up 13.2% y-o-y and +2% vs ABGSCe. EBIT was SEK 30.7m, corresponding to a margin of 0.94% and LFL growth of 15%. Despite the gross margin continuing to decline (-323bp vs. Q2’18), eWork has been able to reduce costs (opex as % of sales), which we find positive. In terms of markets, there were few surprises compared to our expectations, with Sweden holding up well (+13% y-o-y) and Norway coming in strong (+45% y-o-y), while Denmark (-14% y-o-y) and Finland (-6% y-o-y) remained weak. The company reiterated its indications of a weaker market, which the recently decelerating growth in order intake also suggests.

Modest sales revisions, but reduced ’19e-‘21e EBIT
After the Q2 report, we have made modest revisions to our group sales forecasts, but we have reduced ’19e-‘21e EBIT by ~5%. Our estimate for gross profit is intact, with the EBIT cut coming from higher costs, largely from a higher estimate for personnel costs. We now expect sales to reach SEK 14.2bn in 2020e, coupled with an EBIT margin of 1.11%, which corresponds to 164bp margin expansion vs. 2019e. This reflects a somewhat stabilised gross margin ahead, as we think that the metric will benefit from a cooler market given eWork’s market-leading position.

NTM EV/EBIT is currently 10% below historical average
On our revised estimates, eWork is trading at a forward 12-month EV/EBIT of 11x, which is ~10% below its historical valuation. The FCF yield for ‘19e is at 5.1%, although we note that eWork has recently had a soft trend in terms of NWC/sales. This partly stems from the company’s pre-payment service, but also from changed contracts with customers. Although NWC/sales was negative before 2015, we believe that it will remain at current levels (~3% of sales) in our forecast period.


  • Läs mer på Introduce

  • Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.

info@introduce.se (Introduce.se)
ABG Sundal Collier - Introduce.se

Ework Group - I dag

{point.key}

Marknadsöversikt

Stockholmsbörsen, OMXS30

I dag
-
Senast
-
{point.key}

Världsindex

Index +/- % Senast
DAX - -
Hang Seng - -
Nikkei - -

Valutor

Valuta +/- % Senast
USD/SEK - -
EUR/SEK - -
GBP/SEK - -
EUR/USD - -

Räntor

Ränta +/- % Senast
5-års ränta - -
10-års ränta - -

Råvaror

Råvara +/- % Senast
Guld - -
Silver - -
Koppar - -