A warm welcome to the presentation of Ework Group's results for the second quarter of 2024. My name is Karin Schreil, and I'm the CEO and Group Chief Executive Officer of Ework Group. I'm here together with Klas Rewelj, Deputy CEO and CFO of Ework Group. As you may have already figured out, Klas and I will, from this report and onwards, present in English. This decision is driven by the increased interest we are seeing from international investors. We believe that by presenting in English, we can better engage with a broader audience and provide more accessibility to our financial information. You can still ask questions in Swedish during the presentation. Klas and I will now jointly review the results and developments during the quarter, after which we will open up for your questions.
We are, as usual, recording the presentation to be able to share it with shareholders who are unable to attend and join us during the live broadcast. During the second quarter, we saw some very exciting developments. They were completely according to our plan. The underlying demand for talent continued to be high and increased in the private sector compared to the second quarter 2023. The public sector was still holding back on new requests, mainly due to budget constraints, and the total number of requests for talent was therefore lower than last year. Retail was one of the first sectors to pull the handbrake last year, and this is now the sector showing strong growth. This can well be a sign that the overall market is turning, albeit large variations between industries and clients.
The trend is similar in all our markets, apart from Norway that continues to be challenged due to the new labor legislation that entered into force during the second quarter 2023. We continue to have good progress in winning new framework agreements and extensions in both private and public sector. We deepened our relationships and strengthened the collaboration with our clients. We were happy to conclude two new framework agreements with Swedish clients in the transportation sector, Transitio and Swedavia. The new agreements will contribute positively to our volumes and give us better conditions to strengthen our margins going forward. The margin in our order intake continued to increase in new as well as extended assignment contracts. This is the result of proactive efforts and a testament to everybody's hard work, along with our ability to articulate the value that we create for our clients.
Making active choices and moving up the value chain will be important to secure continued improvement of our margins. Our updated operating model is now in place, and we are gradually securing the effects from our new way of working. A lowered cost base and a foundation for continued scaling are two of the most significant value contributions to our business. The work with our upgraded internal IT platform is running according to plan and will give us further economies of scale once in place at the end of the year. Finally, I'm happy to share that during the quarter, Ework was ranked the largest provider of IT solutions and services for the IT sector in the Polish market, according to the Computerworld Top 200 report for 2023. A huge testament to our teams who bring great value to our clients, partners, and professionals every day.
The second quarter summarized in numbers was as follows: Order intake decreased 10.3% to just over SEK 4.9 billion, where the planned phasing out of the agreement with Vattenfall accounted for approximately half of the decline. The volume decrease in Norway is another major contributor. Net sales decreased 5.1% to just under SEK 4.2 billion. The operating profit rose 36.2% to just under SEK 52 million. Adjusted operating profit for the second quarter 2023 was just under SEK 42 million, and compared with this, the result increased by 24.3%. The operating margin EBIT amounted to 125 basis points. The need for talent and skills drives development in businesses and society continues to be really high. Growth and strategic initiatives entail a demand for talents in numbers and with specific skills that are short in supply.
New technology and the increased adoption of AI requires expertise that constantly needs to be renewed. On top of this, the green transition rests on new solutions, business models, and ways of working to be developed by large numbers of experts. During the second quarter, we saw a mixed and volatile demand for talents across industries and clients. While the public sector continued to be restrained, we saw clear signs of lightening in the private sector. As in the last year or so, the automotive industry, as well as life science, showed strong development driven by a demand for talent to enable growth and strategic initiatives. This said, we also saw temporary hiring freezes at some of our clients, which caused us to reallocate our efforts and resources. We saw more positive signs in banking, finance, and insurance, as well as in the retail sector during the quarter.
It might be a signal that the market in general is returning to growth. Telecom was still lower in demand than 2023, and we continued our efforts to broaden the client base and extend framework agreements to secure growth for Ework in the sector onwards. The public sector in Sweden remains weak due to budget constraints that limit activities and resources. The public sector in Norway declines mainly due to the updated labor legislation. In Denmark and Finland, Ework is on the path of growing our footprint and gaining market share in the public sector. In our different markets, we saw a varying demand that is largely related to the client and industry mix. Denmark continued to show good growth, benefiting from a favorable client mix and a relatively strong economy. Order intake decreased, partly due to the ongoing phase-out of the Vattenfall agreement.
Finland is transforming its business from high volumes with low margins toward selected volumes with higher margins and has a good momentum in business development. The banking, finance, and insurance segments had a positive development in the quarter, however, not fully compensating for the decline in the tech segment. Sweden saw further signs of market recovery during the quarter. The overall demand in the automotive industry was strong, and the retail sector had a positive development, potentially, as said, indicating a market recovery. The public sector remained restrained, as said, and volumes were also impacted by hiring freezes and volume constraints at individual clients. Norway order intake decreased compared to the second quarter last year, mainly again due to the updated labor legislation and also fierce competition in the market, which has led to a significant drop in volumes, mainly in the public sector.
The decline in order intake, however, decreased in the second quarter compared to the first quarter. Trust, deep relationships, and strong collaborations based on value creation are key to winning new clients and extending existing agreements with our clients. During the second quarter, we signed a number of new or extended framework agreements based on our growing service portfolio and vast talent network in our selected industries and supported by our dedicated client teams across six markets. A couple of examples: state-owned transportation companies Transitio and Swedavia. Here we will deliver talent acquisition and talent management services for contingent talent and be in a position to guide and advise our clients on various workplace-related topics and workforce-related topics, market insights, and best practice. Another example is Kongsberg, our Norwegian client, who signed a framework agreement with Ework for recruitment services in Poland during the quarter.
As we continue to drive business development, our focus is to maximize value creation for our clients and provide a superior experience. This will allow us to gain trust and climb the value chain together with our clients, which ultimately will lead to increased volumes and higher margins. In the quarter, we made a significant advancement of our service portfolio through service development and close collaborations with our clients at the forefront of total talent management. All of this with the ambition of being a leading total talent management solutions provider in Europe. It is evident that our growing service portfolio and solutions catalog adds increasing value for our clients. All of this is underpinned by our improved ability to package and articulate our value proposition.
One such example is the development of a solution where Ework establishes an office at the client's premises and takes the full responsibility for both permanent and contingent talent acquisition and management. This can be referred to as a total talent management PMO, program management office. The commercial model is based on a service charge instead of a markup on top of hourly consultant rates, and this results in a mutually beneficial incentive model, which focuses on maximizing value creation for our clients. Similarly to this, we have also developed a solution for permanent talent acquisition, referred to as RPO, Recruitment Process Outsourcing, where Ework assumes an end-to-end responsibility for a defined scope of recruitments. The deliveries here are done in close collaboration with the client, and it constitutes an important piece of a total talent management solution.
Here, the business model is based on a service charge reflecting the value that is created for the client. Our new service, Corporate Pay Express, has been released and is intended for clients who wish to optimize their cash flow and working capital while potentially also ensuring attractiveness among contingent talent. The service simplifies and accelerates the way we work with our clients to support the mission of efficient cash flows and lower working capital. During the quarter, we launched a new financial solution for the services Pay Express and Corporate Pay Express. The solution is reliable and scalable, and it contributes to improving our margins while also strengthening our position as a bridge between clients and partners and professionals. Additionally, Pay Express is now included as a standard in all assignment contracts.
The updated operating model, as announced in the beginning of the year, is now in place and operational. Our employees are working hard, making major and important value contributions to our business, and we continue to secure the effects as we move forward. We are now working as one team with one unified approach, which is a cornerstone of the model. Central to the model is to enhance efficiency, quality, and flexibility based on our standard services and defined way of working. This will enhance value creation for all our stakeholders and ultimately increase the value of our company. The operating model will secure maximum value contribution through a number of dimensions. First, one skills. We have now established five specific skill areas within our talent network, which allows for more efficient sourcing of talent and development of our talent network, and this relates to both permanent and contingent workforce.
Load balancing, another important dimension. Overall, we are optimizing our core business operations to align with market demand and our own strategic development. We aim to reduce volatility and enhance leverage, and this also involves balancing demand across different geographies, markets, and clients. Cost efficiency. We are already seeing significant cost efficiencies and will continue to further optimize our efforts and resources. And finally, cross-collaboration and best practice. Sharing of insights along with the adoption of best practices and experience is elevating our performance in all parts of our operations. The work on our upgraded internal IT platform is progressing as planned, and this will give us further economies of scale when implemented and in place at the end of 2024. The upgraded IT platform will secure maximum value through, again, a number of dimensions.
First of all, the choice of a proven, stable, and scalable standard platform aligned to our business needs today and tomorrow. Enhanced integration and automation, which will give us the opportunity to standardize and further streamline our operations. A data model which allows for access to an analysis of data across multiple dimensions of our business and an important foundation for the use of AI, something that we are actively looking at as a way to accelerate our business performance going forward. Growing talent network is another important development during the quarter. At the end of the first half of 2024, we had a total of 160,000 professionals, talents, and more than 21,000 partners in our network.
We continue to grow the network at a high pace with over 10,000 new professionals added per quarter, and this is a sign of our time and in line with our ambition to provide the best global talent network for our clients. The talent network currently extends over 50 countries. The provision of talent in geographies where Ework does not have own operations is made possible thanks to our solution with People 2.0. Looking into our geographical expansion, Slovakia is now in place and operational as one of our market units and also a hub for remote and nearshoring in Central and Eastern Europe. Here we have access to skilled talent and specialists, and we see a great interest from our clients to utilize this as an opportunity for further growth and development.
Here, AI is also an important component driving a steep demand for skills within related areas of expertise, and this is something we have been addressing in the quarter, and we are now working proactively to develop our network in response to this also in Slovakia. We also aim to increase the value to our partners and professionals in the network, and in order to do that, we are elevating our benefits through collaborations with partners like Lexicon in education and Söderberg & Partners in financial services and advisory, all for the benefit of our partners and professionals, and they can access these services through the newly relaunched Ework Plus portal. Looking at Slovakia again, our geographical establishment and expansion continued both in Slovakia and in neighboring opportunities in the geography.
Since the turn of the year, we have now concluded new framework agreements with both contingent and permanent talent needs in scope. We have several interesting customer dialogues regarding various talent solutions, and we are gradually building a strong pipeline. As said, our business is now fully operational, and we have a number of consultants on assignment. As a next step, we have now initiated the recruitment of own staff to be based locally in Slovakia. The expansion into Slovakia is done in close collaboration with our market unit in Poland, in line with our ambition to drive growth and expansion as one strong team. With our establishment in Slovakia as a foundation, we now have a strong blueprint in place for continued expansion into more countries. The steps we're taking are supported by our updated operating model and our global talent network.
We have all the necessary capabilities in place to serve our clients as a truly global provider of talent. All of this in response to the pull we are seeing from our clients to expand operations into more markets.
All right. Thank you, Karin. Now clearing the throat and over to our financials. First, looking at order intake. Quarterly order intake was SEK 4,924 million. This was 10% lower than 2023, where the planned phase-out of Vattenfall and one other low-margin client represents two-thirds of this decrease. For Norway, we saw a less negative order intake growth compared to Q1, but our demand and order value were lower also in the second quarter, being the other main factor for a reduced order value total. During the quarter, we saw an increased demand in the private sector, with more industries and clients returning to growth.
The recovery was connected to some bumps in the road, impacting quarterly numbers negatively. A temporary freeze during part of May at one of our larger automotive clients was one example of this. We can now confirm an increasing order margin as a very positive trend throughout this year. Increased value creation and the share of our assignments matched by Ework is driving this. The P&L effect from this comes gradually, but will allow for improved margins ahead, positive. One fundamental effect of the improved order margin is that despite the lower volumes in the quarter, Ework's retained service revenue, what we keep for ourselves, was on the same level as 2023 in Q2. Quarterly net sales was SEK 4,225 million, giving a negative growth of 5.1%. As expected, we saw a negative revenue growth in the quarter with fewer active assignments.
Client phase-out and the lower volumes in Norway are the factors giving negative growth. During 2024, the quarter included one more working day, adding positively to reported growth. Operating profit increased to SEK 51.8 million, a reported increase of 36%. Adjusted for a classification of financing cost to the financial net, the result for Q2 last year was SEK 41.7 million, and this year's increase on comparable number does 24%. It is the improved cost efficiency and lower cost level connected to our new operating model that explains the sustainable profit and margin increases. This effect is particularly strong considering reduced volumes and negative revenue growth in the quarter. Net sales development. We had a reducing number of active assignments during the quarter compared to 2023. At the end of June, the assignments were 11,959, meaning 1,215 assignments or 9% fewer.
As expected, we are phasing out the assignments from our former client Vattenfall, and this is the single largest factor for the reduced volumes. The other main factor for reduced volumes is Norway. However, in June, we started to see a small increase in the assignments, but Norway will have a negative impact on our revenue growth also in the coming quarter. The negative effect from average rates is also connected to the decline in Norway, and there was actually an increase on average hourly rates on all our different geographies. Following a non-material IFRS adjustment, our Pay Express service revenue is reported as cash discount nowadays, and this is not part of net sales. This adjustment is done to 2023 numbers in our 2024 reports. However, including our Pay Express fees, our add-on service total revenue increased with SEK 4 million compared to last year. EBIT development.
In 2024, all types of financing costs are correctly reported in the financial net in our P&L. In Q2 2023, part of these costs, SEK 3.6 million, were reported above EBIT. For fair comparison, we should use SEK 41.7 million as the 2023 EBIT, giving an increase of SEK 10 million and a growth of 24% this year. The reduced volumes we see in Norway provide our main profitability challenge in the short term. With Vattenfall, it was more the delay of the phase-out combined with a somewhat uneven or staged total demand recovery that created profitability challenges during this quarter. Following the 2023 price increases we implemented for our Pay Express services, the total service revenue for our add-on services increased and gave a solid contribution to our profit, this also when considering development of associated financing costs below EBIT.
Our cost base is now substantially lower, and even considering periodical effects, the outcome is well supporting previous outlook with a reduction of SEK 60 million on an annual basis and SEK 15 million quarterly. The improved cost efficiency is driving the profit increase. A strong performance considering a period of reduced volumes and negative revenue growth. Our operating margin, EBIT in relation to our net sales, increased to 125 basis points. The 125 basis point is best compared to the adjusted level of 95 for Q2 2023, showing a solid increase of 30 driven by increased cost efficiency from our new operating model. The margin is kept down by assignments booked in the second half of 2023, where a retracting demand with followed increased competition pressured margins periodically. The delay in the phase-out of our larger low-margin client assignments has the same effect in the short term.
The performance is, though, on a historical high level, a strong delivery considering a quarter with negative revenue growth and reduced volumes in our relatively high-margin Norwegian business. Considering the gradual demand recovery, combined with our extended service offering, new sales wins, increasing order margin, and further scaling opportunities ahead, we now have a very positive outlook on our operating margin. At this point, we find it also suitable to introduce a new complementary margin KPI as part of our reporting, as a first step only in this presentation. Service revenue is the part of our net sales that is retained for Ework and not paid out to our partners and professionals as pass-through. It is typically denominated as gross profit by those following our P&L closer and is calculated as the net of total income and cost for professionals on assignment.
Relating EBIT as a percentage of the service revenue will give a complementary perspective on our profitability and will allow a fairer benchmark to alternative business models such as consulting and recruitment companies on the wider talent market. As you can see, the Q2 margin of 33.2% not only allows us to question the low margin label in relation to such peers, but also demonstrates a clear improvement year-on-year. We aim to continue to report on this complementary EBIT margin and hope it to be one piece of the puzzle in further clarifying the dynamics of our business and support a well-deserved increased valuation. Well, that concludes the presentation of the Q2 financials. Over to you again, Karin.
Thank you so much, Klas. And I will conclude with a summary. So, first of all, we conclude an increased demand for talent in the private sector during the quarter.
We also saw continued good progress in new client wins and framework agreement extensions. We had higher margins in new and extended assignment contracts, and our lower cost base and improved scalability contributed significantly to our performance. Ework expects to show growth again at the end of 2024, and our outlook remains unchanged. With this, we are concluding the presentation of our Q2 results and would like to open up for questions.
If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Simon Granath from ABG Sundal Collier. Please go ahead.
Thank you. Hi, Karin and Klas. Thanks for the presentation.
I would initially send my appreciation for all the color added and that you highlight EBIT in relation to gross profit as an alternative metric. Nonetheless, I have a couple of questions. Initially, you have both been active in this market for many years. Is there anything you would like to highlight regarding the current downfall in comparison to previous market downturns, or is it a relatively similar cyclical trend that we see now as in previous downturns? Thank you. Well, I can maybe start off there.
Thank you, Simon, for the good question. Yes, this has in some ways been a slightly different pattern in the market compared to what we've seen in the past. I'm then mainly referring to the demand in the public sector in Sweden, where, as we said in the presentation, we've seen that the public sector is restrained related to budget constraints typically.
However, we still see a huge need for talent also in the public sector to drive development, to drive digitalization, automation, and the adoption in the future of AI. So the need is there, but it does not translate into new requests and demand for talent in a way that we have seen in previous downturns. So that's clearly one difference. Another one, I think, is also the big, as we have said, variation and volatility across different industries in the private sector. So there has not really been a clear or consistent trend within the private sector and not even within the subsectors of the private sector. And also between individual clients, we've seen big differences in demand. So those two aspects, I think, have become clearer as something we haven't quite seen in the same way in the past.
To further geographies that you see, would it be fair to expect it to be relatively closely related geographies as to Slovakia? If I understood your comments correctly, should this be done in a cost-lean way without driving too much cost?
Yes, correct. Our continued geographical expansion will be driven by client demands, and it will be done using the blueprint that we have established now with establishment in Slovakia. It is, as you said, in a lean and very cost-efficient way without increasing the risk as we move forward. Clearly, as we see things taking off in a new market, we will, of course, add resources and do the investments that we deem necessary.
And as for countries we are looking at, yes, we are looking at other countries in Europe typically where our global clients have premises and ask us to be supporting them with talent on a local basis, as well as also potentially on a continued remote basis. So more to follow on these topics.
Thank you. Looking forward to that. Moving on, Norway continues on its recently deteriorating trend. Could you elaborate on what we should expect from that region going forward? I did hear from Norway this morning that it is starting to see some positive signs in Norway recently. You are, of course, operating in another part of the market, but are you seeing any signs of stabilization in the near term, or should we expect a similar trajectory at least for the coming set of quarters?
Yeah, I can start off, and maybe then you can continue, Klas. As we mentioned, we saw during the second quarter that the decrease was lower. The decrease in volumes was lower than in the previous quarter. So if we compare quarter-over-quarter, yes, we see a somewhat positive trend in the sense that the decrease is not increasing, so to speak. We are also very active in talking to policymakers and politicians in Norway to discuss and explain the implications of the legislation that was taken and brought into force last year. And we have good and constructive dialogues and hope to see that there might be also some openings when it comes to the legislation going forward. So that's the general view. And maybe if you would like to add some.
Yeah, thank you, Karin. Yes, I can do that.
I mean, we have a fewer number of assignments right now in Norway, and that, of course, will impact the revenues in this current Q3. Whereas we saw positive signs of a recovery at the end of the Q2 in June, where we had a few more assignments for the first time in a long time. So we hope that we see that trend accelerating so that we can start to see growth in orders first and revenue later. However, I think it's fair to estimate that we will have a similar level of negative revenue growth in the coming quarter as we saw in Q2, unfortunately.
It all makes a lot of sense. Thank you for that. Then I wanted to ask, are you seeing any pressure on hourly rates in the wake of the recent market weakness?
I note your comments on higher prices in the order intake, but it sounds that it's partly on the back of a different mix rather than a general trend in the market.
Yeah, I think that's fair to say. So we, as part of our delivery, are always working to make sure that our clients get the best possible talent for the best possible conditions and terms. So on an individual basis, we always strive for that. And another factor that has an impact on our average hourly rates is, of course, also the seniority of consultants that we are providing to our clients. And what we have seen in the past year and typically see during a downturn is that experts and specialists are higher in demand. They are more difficult for clients to get hold of on their own, and they need us and others to help.
Of course, more senior specialists and experts will also come with higher hourly rates in our case. There are a number of factors that impact the average hourly rates for us.
That also makes a lot of sense, and it sounds like it should bode well for further margin improvements. That's all from me. Thank you so much again for the presentation, and have a nice summer.
Thank you, Simon. Likewise.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Yeah, the closing comments we'll have to await because we also have received some online questions. We can start off with one here, Karin. I put on my glasses so I see it really properly. The question is about what we do to get maximum leverage from our large talent network.
Yeah, that's a really good, really, really good question. Our talent network is one of our most important assets. As we mentioned, we are working to develop our network to not just grow in size, but also develop the skills and the availability of skills in the network. We are, for instance, now adding all the skills related to AI development in bigger numbers into our network. So we are looking for talent who can help and provide skills and expertise in the area of AI, as an example. We are also extending our network into more geographies. We currently have a network that covers more than 50 countries, but there is a constant need and ask for more talent across different geographies. So that's another development that we are driving.
So with various activities and in various ways, we are working actively to grow a really, really strong network for our clients. Thank you. All right, maybe then we move to the next one. The question is following. There seems to have been a focus on phasing out contracts with less profitability. Why say no to these types of contracts? So we look at each contract or framework agreement as it is individually. It's not just a matter of what the contract says clearly. It's also about a judgment regarding the opportunity for us to provide real value, sometimes beyond what a framework agreement might cover initially. So it's a combination of aspects that we look at when we try to conclude whether or not there is a good fit, whether we can provide good value in the long term. It's not just about margins.
It's also about the position and the value that we can provide to our clients. Super. Another question here. How much does the expansion to Slovakia affect the result? As we said, we have a lean and very cost-efficient approach to entering into new markets, and that's the one we have applied in Slovakia. So we are not adding or bringing additional cost to the company as a part or result of the implementation that we do operations in Slovakia. As soon as we have traction and see momentum enough to justify additional resources on the ground, we will take steps to recruit our own staff. And that's something we have initiated during the second quarter, as we now see the pipeline and the number of client engagements taking off. So it's a very cautious way of driving geographical expansion.
Solid.
Okay, one question here is regarding any feedback that we may have received from our stakeholders regarding our new operating model: clients, employees, partners, and professionals.
Yeah, of course, that's something that we track and assess on a regular basis. Our operating model is here not just to, as we said, improve efficiency, but really to be a foundation for our future expansion and growth. And working as one strong team with one unified approach is really, really key to all of that. Having said that, as we said, in a number of cases, we have now been able to quickly reallocate resources to clients where they are needed the most. And that's, of course, a benefit to our clients and also to our talent in the network that we can actually provide them with more exciting opportunities at a much faster pace.
Of course, we also track the experience internally with our own organization and employees. We are on a journey here to get everything in place when it comes to standardized service delivery, our client contracts, and so on and so forth. So that's, of course, an important part of really making this operational and delivering the effects we are looking for.
We may take one trick question also. The question would be about our market share in the Swedish market for consultant providers, the development of such market share over time, and the main competitors.
Yeah, so as we broaden our service portfolio, clearly, we are competing with more players. For instance, in recruitment services, we are often competing with recruitment companies. In providing consultants to clients, we might be competing with consulting companies. In wider staffing, we might be competing with staffing companies.
So, of course, we try and keep track of competition and, of course, aim to be the player that can provide the best and most value to our clients and basically compete based on the value we provide rather than anything else. Having a broad service portfolio with relevant services is, of course, very important in that aspect, but it also, of course, makes the comparison to other players in the market a bit more complicated because we need to compare ourselves to several different players. That's something we do and are inspired by doing.
Super. Excellent answer there. I saved some of the goodies for last, maybe some questions for myself. One question is about what you introduced, the new Corporate Pay Express service addressing cash flows and working capital of our clients. And a little bit more practically how that works. And it's quite simple.
Our client gets the opportunities to prolong their payment rates and conditions without it impacting our network of partners and professionals working on their specific assignments. So it is a financing of the bridge that we provide at the charge, of course, for the service. So it's a win-win-win. Everybody wins for that service. Simple summary of it. One question here is, do we now plan to report our service revenue or gross profit as the revenue? And that is not the plan. Not only will we continue to report net sales, including the pass-through parts for the cost to partners and professionals. Obviously, that is following accounting guidelines and practices, but also we think it's very important to show our full market and client reach and the scope linked to that. So I think it's good.
So we have both complementary models, whereas the focus on our services and the revenue linked to the service is something we've had for a long time and will continue to increase and potentially also include more and more reporting on over time. So that will be probably the answer on that one. And then there's a question about, do we have any specific goals on our gross margin? And we don't communicate the goal for our gross margin, but rather focusing on the bottom line and our profit growth being 30% year-over-year. But that, of course, will depend on us increasing our operating margin and our net profit margin. And that is our focus. So step-by-step increase would be the answer. Reading here. So yeah, the question would be more general.
How do we plan to secure that we can deliver on our outlook and further on the goal of increasing earnings per share 30% on an annual basis?
Yeah, so by continuing to drive value through all the various steps and measures that we are taking with regards to our strategic sales, new client contracts important, extending existing client contracts important. And I'm speaking here about framework agreements that lay the foundation for our entire business. But also important that we continue to broaden our service portfolio, as we said, develop our network, get our operating model fully into place in all parts of our business, and continuing on the path of really elevating the value in all parts of our business with client, partner, professional, employee experience as a focus.
Yeah, that's well put.
I think that for this year and the coming quarters here, I think that the improved and sustainable cost efficiency that we now deliver on is the main driver for profit and margin increase. Whereas it in the coming quarters is supported by the increased business margins that we see through our orders, new client wins that allows both for margin improvement as well as for additional growth. I think those are the main components for 2024. Into next year, we see further scaling and impacts of our new and updated service offering as well.
Okay, that concludes the number of questions I received here.
Okay, very good. Thank you so much for the good questions.
And with this, Klas, I think the only thing that remains for us is to say thank you for this time and wish you a really, really nice and relaxing summer.
Exactly. Thank you very much.
Thank you.