Hello, and welcome everyone to this next presentation at ABG Investor Days. My name is Simon Granath, and I work as an equity analyst at ABG, in which I partly, in which I cover Ework. And, here we, today have the pleasure of welcoming the CEO of Ework, Karin Schreil, who will, for the coming 15-20 minutes, present the company, and then we will follow up with a shorter Q&A session. So with that said, Karin, please go ahead.
Thank you so much, Simon, and thank you for the opportunity to present here today. Thank you also to the audience for attending this session. I will start by giving an overview of our company, and I will then move on to talk about the trends and performance according to our Q3 results. So first of all, Ework Group is an industry-leading total talent solutions provider. We are market leading in what we do. We operate across Europe with a main focus on Northern Europe and our five main markets. I will get back to the details about that shortly. What we do is provide services for talent management. This includes acquisition of talent, management of talent, optimization and planning of workforce.
We leverage our comprehensive network of currently more than 130,000 professionals and 16,000 partners to connect professionals, talent, and skills to the very tailored assignments where help is needed in public sector organizations and in private sector companies. Our unique model means that we have no consultants, professionals, or talent employed, except for the 350 Ework employees that provide the services and engage with our clients, partners, and professionals. By providing access to attractive client assignments, we are able to support the entire network of partners and professionals with a solid and interesting future entailing personal development and growth. This is all underpinned by our mission to contribute to a sustainable society. Our sales in 2022 amounted to SEK 16 billion, and this is the total revenue for our company.
We had at the end of last year, 125,000, currently more than 130,000 professionals in our network. Close to thirteen thousand consultants on assignment, working for our 500+ clients across our five main markets. Our headquarters is based in Sweden, Stockholm, and we operate across entire Sweden, as well as Norway, Poland, Denmark, and also Finland. We have currently, as said, 350 own employees supporting our clients, partners, and professionals. We have a proud history. Our company was founded in year 2000, and it was started off as a marketplace where clients would meet with talent, with partners and professionals, and work together, based on a digital platform, and that idea then expanded into more services.
The whole idea and the red line across our history has been to provide a really strong user experience for clients, partners, and professionals, where Ework acts as the bridge, connecting the client needs to the available skills and talent in the labor market. We have expanded into managed services, meaning that we can manage the entire talent acquisition activity in a company or an organization. This is similar to what you could refer to as outsourcing of talent acquisition. Our focus has been on contingent workforce, meaning consultants and temporary professionals, but it is also now moving into permanent workforce recruitment services. Along with this, we provide advisory to clients on how to best act in order to acquire and manage workforce. We provide insights and data to help them optimize and make solid workforce plans.
This is now moving into what we can refer to as Total Talent Management, and the solutions that we provide are all components in a Total Talent Management offering. As said, we have a key position acting as a bridge. This means that we act across the entire value chain, seamlessly connecting the client needs to the top-tier talent in the market. We tap into two mega trends. One is on the left side of the value chain, the future of work trends, meaning that we have more and more people who are interested in working on a freelance basis, at least at some point in time during their career, work as a consultant or as a contingent workforce, where they can freely choose where they want to work, when they want to work, and who they want to work for.
So this is a growing market, and we've seen, following the pandemic, a growth in this direction, where more and more people are willing and interested to work as freelancers. On the other side, to the right of the value chain, we see the future of business and society trends, meaning that skills is key to the development, and skills is scarce to many companies and organizations today, in particular in areas like tech, digitalization, green transition, and very strategic development where niche expertise is needed. And this is also where help is needed to find that skill, to help and build and develop and grow that skill, and this is where Ework comes in. So we act as the bridge across the players, the partners, professionals, and clients in the value chain, but also as the bridge across two mega trends in society.
So we like to say that bridging, not breaking, is the future. As said, we are providing services in what we can refer to as total talent management. We have a holistic service portfolio of solutions. We can see at the bottom of this summary, acquiring talent, talent acquisition, meaning help to find that niche expertise and the specialists needed to fulfill the needs of projects, can be projects in very strategic development, can be transformation projects based on digitalization and the latest tech opportunities, can be green transition, where entire organizations are moving themselves into operating in new ways, in sustainable ways. And what we've seen during the last year is a trend, where contingent workforce acquisition and permanent workforce acquisition is moving together under one umbrella, under the umbrella of talent acquisition.
This is also why we are moving ourselves into more recruitment services to be able to be that provider to our clients. On top of this, as said, we, we can also provide the management of an entire workforce. Can be talent acquisition, but can also be management of workforce in an organization. And compliance is something we are adding to this. We see many, many clients now faced with needs to report to be compliant to new and updated legislation. This is also a field where we see a great need for help. We are adding, as an added service, compliance services, where we can advise our clients, help them navigate in legislation, help them with the reporting and compliance activities. On top of this, as said, workforce insights and planning.
Here we see a growing interest in the data that we can provide based on our consultants on assignments, based on our network. We can see trends when it comes to need for skills, availability of skills. We have some indicators that we are following, for instance, the number of requests that we get for project managers. That's typically an early indicator of the trends in the workforce market. So typically, when the market is taking off, and companies are investing in more transformation activities, strategic development, we see more needs for project managers. And typically, this is where it starts. And onto this follows then need for specialists and other resources working in the projects.
On the contrary, we see as an early sign of a recession, that typically the number of requests for project managers are decreasing. At this point in time, as we reported also in our Q3 results, we see more project managers available in the market looking for new assignments than we saw a year ago. Clearly, less activity in general in the market, less projects requiring project managers now than a year ago. This is an example of trends and data and insights that we share with our clients and also share with the market, to help them navigate and be a good advisor when it comes to their talent management activities.
Onto this, we also add financial services, where we can, for instance, allow partners and professionals to get paid for their invoices, at the exact number of days they wish. They pay a fee for that, and that is a service we call Pay Express. We have a similar services for our clients, where we can provide a corporate Pay Express solution, where an entire company or organization can buy that as a service from us, and we can then provide to the consultants the opportunity to get paid at a fixed amount of days. And we've seen during this year an increased interest in these kind of services. Also, again, related to the current economic situation of small companies as well as bigger companies and organizations.
We have, as I said, a business model which is based on bridging, connecting the different players of the value and supply chain. And it is built on strategic alignments between client needs and the availability of skills in the market, but also fair compensation, fair compensation to the professionals and the partners that are part of providing the skills and the talent. And also agility, which of course, is really, really key here, that we can be responsive, that we can act on changing needs and demands of both clients, partners and professionals. And here is where our role as the bridge comes in and plays a really important role. So what we do as an example, when we provide consultants to clients, is that we start from the position we have with the network available.
We match the right talent and skills to the client needs. We act and serve also as the contractual party. We make an agreement with, on one hand, the client, on the other hand, the consultant or the partner professional. We manage the administration throughout the entire assignment, and we follow up. We track the performance, the user experience, the stakeholder experience, and also any, suggestions for improvements going forward. We have a financial model which is based on pay-when-paid. So we pay the professional or the partner when the client pays Ework. So looking into Q3, we clearly saw a varying demand in a market with very strong underlying needs for specialist skills. We saw a continued cost focus among our clients, which slowed down new project starts, meaning, as said before, more project managers, as an example, available in the market.
But still a very high demand for experts and highly skilled specialists for niche strategic projects, mainly in digitalization and green transition. We saw a varying demand also across our markets. We saw a varying demand across the industries that we serve and also among our clients. Poland continues to be a very interesting and attractive market, also serving as a platform for our nearshore activities. And this is, again, something that we've seen increasing during 2023, an increasing interest for nearshoring, for having talent work on a remote basis, and even offshoring activities outside of Europe. We've seen, as said before, more interest in compliance services and also protective security services, where we can help clients do background checks and security controls. So, this is the distribution during the third quarter of consultants on assignment across the different industries that we serve.
Our major group of industries is manufacturing, automotive, and life science. It's the yellow line in the diagram, and here you can see that we had a growth also in Q3. This is driven by partly the automotive industry that we serve and also our growing activities in life science. Life science for us is much about Denmark currently, but also growing into more geographies. Automotive is much about Sweden currently. We saw, on the other hand, our second-largest segment or group of industries, consulting, tech, and telecom, continuing to decline, and this is much related to telecom declining for us and also some tech companies with less demand in the market, clearly yielding less demand for skills and talent from Ework.
So some more business trends and performance during the third quarter. All in all, we saw in the third quarter our order intake drop by 17.2% compared to third quarter in 2022. Now, the third quarter in 2022 was really strong for us. It was still a time with very high demands for skills and expertise, following all the projects that were started after the pandemic. So we had a very strong third quarter last year. We had a good quarter also this year, but not as strong as in 2022. Number of new and extended assignments for consultants was down by 15% compared to the third quarter, new assignments by 32%, while extended assignments, just 2%. And this indicates the client tried to stick to the consultants they already have engaged in their organizations.
We saw many clients during the pandemic, dropping or closing down, assignments for consultants. During that time, many of the consultants left for new assignments or even working for other clients or in other markets. It was very difficult to get them back when the activities started again. We see many clients wanting and wishing to hold on to the good consultants and the specialists they have in their organizations, rather than to let them go, even though times might be tough and challenging. We saw the private sector declining more than the public sector, -19%, whereas the public sector dropped by 9%. The public sector for us in 2023 is, is in total bigger than in 2022, following, wins on new contracts in 2022. We have a broader public sector base to work from.
We saw, and this was a very positive sign to us, improved margin on new assignments. This has been, and is, and will be one of our focus areas. That's part of our strategic plan to continuously grow our margins, and this is related to increased value creation for our clients. We are focusing in all services that we develop and provide on maximizing the value for our clients, of course, also for our partners and professionals. By that, our ambition is to also increase our margins. This was a good and positive sign in the right direction... Our average hourly rates were up 5% compared to Q3 2022, and this is not just related to inflation.
It's also related to the fact that we have more specialists and experts, assigned by our clients, and specialists and experts typically come with higher hourly rates. So when we look at the average hourly rates, it's a combination of, economic situation and, the demographics of the consultants that we provide to our clients. The professionals on assignment were down 2% to 12,842 at the end of the quarter. So, following this, our net sales, increased 4.2% in the quarter compared to 2022. It was a negative volume growth, as said, compared to 2022, and a large variation between industry segments and clients.
The operating profit following this was down 3.5% to SEK 45 million, and we again saw this dropping as a consequence of the varying demand and in total the lower volume compared to the third quarter in 2022. Finally, the operating margin ended up at 120 basis points for Q3, compared to 132 in the third quarter 2022. The periodic invoicing at lower margins is the main factor here driving down the EBIT compared to the third quarter in 2022.
The reduced revenue growth limiting positive margin development, of course, had an impact from lower cost, and cost is also something that we are, of course, focusing on, working to optimize at any given point in time, the cost for the services we deliver, the cost of our own operations. So we've been working to optimize cost in parallel to the reducing volumes. We saw again positive signs when it came to new assignments, higher margins, and we saw that the price increases that we were able to implement in our current agreements also contributing positively to the profit. So the outlook for 2023 is that we believe the market will continue to be cautious during 2023, lower demand than 2022.
We will continue to focus on client value creation, optimize service delivery to be able to provide really cost-efficient delivery, cost alignment to business volumes continuously, and we are making progress. We are making progress with the scalability activities, and we believe this to materialize onwards, meaning that we are working in line with our long-term strategy to improve the profitability of our business. Given the slower revenue growth in the coming quarter, we are working hard to make sure, of course, that we continue to expect to grow faster than the market and be able to report improvement of the operating margin. So that is the outlook for 2023.
We have stated that, through to 2025, we expect to grow faster than the market and further improve our operating margin by, as said before, being a service provider focused on stakeholder value, create maximum value for our clients, partners, and professionals, continue to develop an attractive service portfolio, strengthen our collaboration with clients, partners, professionals, increase sales and expand into more markets. Our ambition here is to continue and follow our clients. Wherever they have needs, we will be there to support them. But of course, also continue to win new clients, win new contracts, and gain market share. And finally, scaling by securing cost efficiency in our growth. So we believe, of course, that Ework Group is a strong investment. We are well positioned for the global trends, where skills and experience is key to the development.
We have a solid structural capital. We have a comprehensive service portfolio that continues to evolve, strong relationships, strong client base, vast network, scalability, increasing, growing, and the power to continue and expand our business. Thank you.
Thank you, Karin.
Thank you.
Very good. Nice to have you here as always. I'd like to stay on the topic of outlook and that you are also giving an outlook that you want to outperform the market.
Yes.
What would you say is the main reason for this, that you actually outperform both competitors and perhaps the market itself?
I think we start from a very strong position in the market with a strong client base. Many of our clients have been with us for many, many years. We continue to be close to them and continue to create value. So as our clients grow, we will also continue to grow. But we're also making some active choices when it comes to expanding our business, so we are looking into further sweet spots for Ework Group, where we look at, for instance, a combination of services, industries, and geographies where we can really thrive and be a really strong partner to clients and partners and professionals. And we are now identifying a number of such sweet spots, where we are planning to continue and expand our activities.
So this is in the plan, and this is something that we are working every day to do. But we're also working, of course, to continue and expand our service portfolio, and I think that's one of the reasons here that we have a comprehensive service portfolio that is in many aspects a unique one. And that in combination with our position as the bridge and the independency it entails, if you compare us to a traditional consulting company with own consultants, we are independent and can seek for the best talent in at any given point in time. I think that combination is really one of the reasons why we see a good potential for further growth and a strong market position.
Very good. You've now been the CEO of Ework for about two years?
Yes. I think it's exactly two years, actually.
Yes, exactly.
Yeah.
What would you highlight are your main achievements so far, and are there any focus areas that you feel are have been slightly behind the plan?
Yeah, very good question, of course. So, as we have stated, we are on a journey towards an ambition to really have that market-leading role as we do, but also on a broader basis in more geographies across Europe. So, defining that and setting that ambition, of course, has been a very important part, but also the plan and the work we are driving to develop towards that ambition. I'm really proud of the plan, but I'm more proud of the steps that we are taking along that plan and where we now see good progress, for instance, in terms of increased margin on new assignments.
That's been a lot of hard work, and we are talking a lot with our clients, and also internally about value, value creation. And that is something that, of course, contributes to the fact that we now see higher margins in new contracts. So that's one example of things I'm really proud of.
That's very good. Actually, I note that we are running out of time-
Yes
... as we're running a bit of a tight schedule.
Yeah.
So thank you so much for attending here today, and thank you to the audience as well. So with that said, we'll end this session.
Thank you.
Thank you.
Thank you so much.