ETTEPLAN 2017: Record results achieved through strong organic growth

Etteplan Oyj Financial Statement Review February 8, 2018 at 1 p.m. 

ETTEPLAN 2017: Record results achieved through strong organic growth 

Review period October-December 2017

  • The Group’s revenue increased by 10.1 per cent and was EUR 58.5 million (10-12/2016: EUR 53.1 million). At comparable exchange rates, revenue increased by 11.1 per cent.
  • Organic growth was 9.0 (2.7) per cent. At comparable exchange rates, organic growth was 9.9 per cent.
  • EBIT from business operations* amounted to EUR 4.8 (4.6) million, or 8.2 (8.6) per cent of revenue. EBIT from business operations did not include any exceptional items (Q4/2016: EUR -0.2 million).
  • Operating profit (EBIT) was EUR 4.6 (4.0) million, or 7.8 (7.6) per cent of revenue. Operating profit included exceptional items with a combined effect of EUR 0.2 (-0.2) million.
  • The profit for the review period was EUR 3.5 million (EUR 2.9 million).
  • Operating cash flow improved and was EUR 12.2 (9.8) million.
  • Undiluted earnings per share were EUR 0.14 (0.12).

Review period January-December 2017

  • The Group’s revenue increased by 16.8 per cent and was EUR 214.8 million (1-12/2016: EUR 183.9 million). At comparable exchange rates, revenue increased by 17.3 per cent.
  • Organic revenue growth was 10.4 (2.5) per cent. At comparable exchange rates, organic growth was 10.9 per cent.
  • EBIT from business operations* improved and amounted to EUR 17.2 (12.1) million, or 8.0 (6.6) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.7 (1.7) million.
  • Operating profit (EBIT) was EUR 15.5 (10.1) million, or 7.2 (5.5) per cent of revenue. Operating profit included exceptional items with a combined negative effect of EUR 0.4 (1.7) million.
  • The profit for the financial year was EUR 11.6 (7.6) million.
  • Operating cash flow improved and was EUR 18.3 (5.7) million.
  • Undiluted earnings per share were EUR 0.47 (0.33).
  • The number of personnel increased and the Group had 2,802 employees at the end of the review period (2,545).
  • The Board of Directors’ dividend proposal is EUR 0.23 (0.16) per share.

* EBIT from business operations is an alternative performance measure, which is presented, because it reflects the Company’s operational performance better that Operating profit (EBIT). EBIT from business operations does not include amortization of fair value adjustments at acquisitions or premeasurements of contingent considerations.
Espotel Oy and Soikea Solutions Oy, which were acquired in spring 2016, are included in the figures for the comparison period starting from the second quarter of 2017.

Market outlook 2018

The most important factor affecting Etteplan's business is the global development of the machinery and metal industry. Our business environment is currently developing favorably in all market areas. The development of the Central European markets is expected to remain unchanged. The favorable situation in the Swedish market is expected to continue. The market situation in Finland is good. In Asia, the growth of the service market is expected to continue.

Financial guidance 2018

We expect the revenue and operating profit for the year 2018 to grow compared to 2017.

Key figures
(EUR 1,000) 10-12/2017 10-12/2016 1-12/2017 1-12/2016
Revenue 58,520 53,137 214,768 183,938
EBIT from business operations 4,801 4,557 17,163 12,071
EBIT from business operations, % 8.2 8.6 8.0 6.6
Operating profit (EBIT) 4,552 4,017 15,484 10,131
EBIT, % 7.8 7.6 7.2 5.5
Basic earnings per share, EUR 0.14 0.12 0.47 0.33
Equity ratio, % 40.7 40.0 40.7 40.0
Operating cash flow 12,158 9,835 18,254 5,661
ROCE, % 21.2 21.6 17.8 14.8
Personnel at end of the period 2,802 2,545 2,802 2,545

President and CEO Juha Näkki:

Etteplan had a very good year in 2017. The work we have done in recent years to implement our strategy produced results in the improved market situation. Revenue, operating profit and cash flow reached new record highs. We exceeded our 15 per cent growth target and our organic growth was at an excellent level. The number of personnel increased throughout the year and Etteplan employed more than 2,800 experts at the turn of the year. In 2017, we also implemented several internal development projects that will help us make progress toward our goals in the coming years.

The market situation in Finland improved in the first quarter and demand remained at a good level for the rest of the year. In Sweden and Central Europe, the market situation was good throughout the year. In China, the development of the engineering services market continued and we were able to increase our working hours in the Chinese market by 50 per cent. The number of our personnel in China exceeded 300 experts and we opened new offices in Xian and Beijing. We will continue to invest in the Chinese market in 2018.

In the Engineering services and Technical documentation service areas, development was strong throughout the year. The growth of technical documentation, in particular, was at an excellent level. Successful sales of outsourcing solutions contributed to the positive development of both service areas. We also continued to develop our service solutions and we invested in incorporating new technologies into our service offering.

The Embedded systems and IoT service area saw positive development early in the year and the service area’s demand situation is generally good, but growth is affected by the reduced availability of competent professionals, particularly in the software business. The challenges that began in the project business in the second and third quarters of the year continued in the final quarter. In addition, a sudden decline in the demand situation of certain customers affected the development of the Embedded systems and IoT business, and the service area’s profitability fell short of our expectations. We have continued to implement measures to improve the efficiency of the project business and we expect the service area’s profitability to improve in the coming quarters.

I would like to thank all of our personnel for their strong contribution during the year. We enter 2018 buoyed by strong growth, in a good market situation. We will continue to invest in growth and we expect to pass the milestone of employing 3,000 professionals in 2018.

Disclosure procedure

This stock exchange release is a summary of Etteplan's 2017 Financial Statement Review. The complete Financial Statement Review is attached to this stock exchange release in pdf format and is also available on Etteplan's website at www.etteplan.com.

Conference call and live webcast today, February 8, 2018

Etteplan’s President and CEO Juha Näkki will present the Company’s results for 2017 in a conference call and a live webcast, held in English language, on February 8, 2018 starting at 2.30 p.m. Finnish time (EET).

To participate in the conference call please dial 5-10 minutes prior to the start of the conference to +358 (0)9 8171 0495 and tell the operator that you wish to join Etteplan conference call. Questions can be asked in Finnish and in English after President and CEO’s presentation only through conference call connection.

Juha Näkki’s presentation can be followed as a live webcast on https://www.inderes.fi/videot/etteplan-tilinpaatostiedote-2017-webcast-822018-1430. The webcast starts at 2.30 p.m. Finnish time (EEST). A recording of the webcast will be available later at www.etteplan.com/Investors.

Vantaa, February 8, 2018

Etteplan Oyj

Board of Directors

The information presented herein has not been audited.
Releases and other corporate information are available on Etteplan's website at www.etteplan.com.

DISTRIBUTION:
Nasdaq Helsinki
Major media
www.etteplan.com

Additional information:

Juha Näkki, President & CEO, tel. +358 10 307 2077
Outi Torniainen,
Senior Vice President, Communications and Marketing, tel. +358 10 307 3302



Etteplan provides industrial equipment and plant engineering, embedded systems, IoT (Internet of Things), and technical documentation solutions to the world’s leading companies in the manufacturing industry. Our services are geared to improve the competitiveness of our customers' products and engineering processes throughout the product life cycle. The results of Etteplan’s innovative engineering can be seen in numerous industrial solutions and everyday products.

In 2017, Etteplan had a turnover of approximately EUR 215 million. The company currently has over 2,800 professionals in Finland, Sweden, the Netherlands, Germany, Poland and China. Etteplan's shares are listed on Nasdaq Helsinki Ltd under the ETTE ticker. www.etteplan.com

About Us

Etteplan’s services cover engineering, technical documentation, embedded systems and IoT solutions. Our customers are the world’s leading companies in the manufacturing industry. Our services are geared to improve the competitiveness of our customers’ products and engineering processes throughout the product life cycle. The results of Etteplan’s innovative engineering can be seen in numerous industrial solutions and everyday products. In 2017, Etteplan had turnover of approximately EUR 215 million. The company has over 3,000 professionals in Finland, Sweden, the Netherlands, Germany, Poland and China. Etteplan's shares are listed on Nasdaq Helsinki Ltd under the ETTE ticker.

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