Ework Group: Next up; Germany - ABG

* Ework enters its eighth market: Germany * Cost-effective action, while moving along existing clients into new markets * 2025e will be a challenging year, but organic efforts are improving
Enters Germany...
Today, Ework announced that it is continuing its geographical expansion by opening a new market unit in Germany. This is its eighth market in which it has a local presence, alongside Sweden (73% of sales), Norway (8%), Denmark (8%), Finland (3%), Poland (8%), Slovakia and Belgium (which currently account for a negligible share of sales).
... thus continuing its European expansion
While the Nordic region remains Ework's most important market, the company has recently identified opportunities for expansion across Europe. It has established new market units in Poland (2015), Slovakia (2024) and Belgium (2025). In our view, the expansion into Poland has been successful - growing from essentially zero revenue in 2015 to SEK 1.2bn in 2024 - and although it is still early since entering Slovakia and Belgium, we emphasise that such moves can be cost-effective with relatively quick traction, as the company tends to follow its existing customers into new markets. For example, Ework signed an agreement with Volvo Cars in Slovakia only a couple of months after announcing its expansion into the market. Furthermore, establishing operations in new markets also means that the company is broadening its network, i.e. improving the supply.
Limited impact on consensus
We do not expect the announcement to have any significant impact on consensus. Similar to most of its peers, 2025e will be a challenging year, where we estimate sales -11% y-o-y coupled with adj. EBIT -17% y-o-y. However, we emphasise that this is a market-related issue - also, bear in mind that Ework recently churned some margin-dilutive contracts - while we are encouraged by the recent gross margin trajectory.