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Positive signals in Sweden, but volumes awaitThe Nordic consultancy downturn has lasted longer than most anticipated, and while early signs of stabilisation are emerging, a meaningful recovery is unlikely in the near term. We believe the market is broadly flat, with pricing pressure persisting across most geographies. Sweden, representing ~72% of group sales, is showing early signs of improvement, although volume growth will likely remain muted in Q2. Denmark remains a drag, as large layoffs at major corporates such as Novo Nordisk have led to a significant oversupply of consultants. We believe Norway will likely be the relative outperformer, driven by continued telecom investments. We expect Q2 sales of SEK 3.1bn, a decline of 14% y-o-y. On costs, we expect continued discipline following the reorganisation, although adj. EBIT is likely to decrease to SEK 34m (vs. SEK 45m in Q2'25) given the lower volumes. Uncertainty remainsWith the reorganisation now fully implemented and SEK 18m in annualised cost savings being gradually realised through '26, we think Ework is better equipped to handle the current environment. Q2 will likely be the first quarter with an improved cost base, but the volume issue remains a key uncertainty. KPIs (from the Swedish National Institute of Economic Research) show some improvement but remain muted, leaving us cautious on the pace of recovery. As a result, we lower our adj. EBIT for '26e by 1% and '27e by 4%. Trading at 11x-9x '26e-'27e EV/EBIT adj.The share is trading at 11x/9x '26e/'27e EV/EBIT adj. (vs. peers at 12x/9x), which is largely in line with its 10Y avg. of ~12x. The overall market remains subdued and visibility into the timing and trajectory of the recovery remains blurred. We continue to expect earnings to pick up once demand returns, but anticipate subdued growth in the near term. |