<a id="bm-comp-5d7bdb4a-8333-4106-80da-b8fb289a1a6a" name="bm-comp-5d7bdb4a-8333-4106-80da-b8fb289a1a6a" class="BMCustomAnchor"></a><table><tr><td bm-component-id="5d7bdb4a-8333-4106-80da-b8fb289a1a6a" style="vertical-align: top; width:100.000000%;"><ul><li>Portfolio rebalancing and weak market behind PW</li><li>We lower '25e-'27e EBIT by 31-22% on lower sales</li><li>We expect some market recovery in '26e</li></ul></td></tr></table><a id="bm-comp-f1d43a34-6e11-4b1e-ad45-28b0ba29ad33" name="bm-comp-f1d43a34-6e11-4b1e-ad45-28b0ba29ad33" class="BMCustomAnchor"></a><table><tr><td bm-component-id="f1d43a34-6e11-4b1e-ad45-28b0ba29ad33" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Still no signs of meaningful market improvement</h3><p>Ework's full Q1 figures were in line with the preliminary numbers, with adj. EBIT -38% y-o-y due to a surprisingly weak top line (-17% y-o-y, -13% vs. ABGSCe). This was due to recent portfolio rebalancing (8pp headwind), together with a continued weak market. We also note that most of Ework's peers, including Knowit, B3, CAG and TietoEVRY, have reported negative organic growth rates in Q1. The impact of the portfolio rebalancing has taken much longer to affect Ework's numbers than we initially expected (the Vattenfall churn was announced in Q1'24), and we anticipate a comparable effect in Q2e before comps become much easier in Q3e and beyond. In the broader market, we have observed ongoing weakness in the public sector, with few signs of imminent improvement. Meanwhile, the automotive sector (23% of GP) has deteriorated since Q4, as also evidenced by DevPort's Q1 figures. We expect these trends to continue in Q2e.</p><h3 class="bm-h3">Delayed market recovery</h3><p>Following the weak Q1, we make significant estimate revisions, lowering '25e-'27e sales by 11%. This drives a 31–22% cut to the corresponding EBIT estimates, which is partly offset by higher GM assumptions. On a positive note, Ework's Q1 GM improved to 4.1% (vs. 3.8% in Q1'24), which bodes well for further improvements. Nevertheless, we expect continued sales pressure in Q2e and Q3e, which will impact profits in FY'25e (adj. EBIT -19% y-o-y). However, in FY'26e, we expect the currently-pressured IT services market to recover somewhat, which will benefit earnings. We emphasise that Ework's track record is good, but argue that its financial target of >30% EPS growth/p.a. should be reviewed.</p><h3 class="bm-h3">13x-10x '25e-'26e EV/EBIT adj.</h3><p>The share is trading at 13x-10x '25e-'26e EV/EBIT (vs. peers at 15x-11x). This is in line with its 10Y avg. of ~12x.</p></td></tr></table>