Sales fell by 8% y/y and was 11% below our expectations. EBIT, adjusted for SEK4.8m in restructuring costs, was SEK-1,8m (0.7), corresponding to an EBIT margin of -1.8% (0.6). Our forecast was SEK5.7m and 4.9%. A soft Sales-COGS/employees/working day due to low utilization rates hurt both sales and EBIT. As seen in recent quarters, weak e-commerce sales have reduced customers’ willingness to invest.

On the other hand, the utilization rate improved gradually during the quarter due to Avensia reducing its capacity and a stabilizing market, although still below normal levels in terms of activity. Considering those factors, we believe Avensia is heading back to profitable territory H2 2023, followed by gradual margin improvements.

We reduced our Base Case somewhat to SEK13 (14) following the decreased forecasts. We expect negative EBIT for the full-year 2023 and cut our 2024 EBIT forecast by 20% while still assuming a substantial improvement next year. However, we believe the case, where we expect Avensia to regain its status as a profitable consulting firm, is intact.