ETTEPLAN Q1 2018: Year 2018 got off to a good start
Etteplan Oyj Interim Report May 3, 2018 at 1 p.m.
ETTEPLAN Q1 2018: Year 2018 got off to a good start
Review period January-March 2018
- The Group’s revenue growth was 7.6 per cent and was EUR 59.0 million (1-3/2017: EUR 54.8 million). At comparable exchange rates, growth was 8.9 per cent.
- Organic revenue growth was 6.2 per cent. At comparable exchange rates, organic growth was 7.5 per cent.
- EBIT from business operations* improved and amounted to EUR 4.9 (4.3) million or 8.3 (7.9) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.2 (0.4) million.
- Operating profit (EBIT) was EUR 4.4 (3.8) million or 7.5 (7.0) per cent of revenue.
- The profit for the review period was EUR 3.3 (2.9) million.
- Operating cash flow improved and was EUR 3.3 (1.9) million.
- Undiluted earnings per share were EUR 0.13 (0.12).
- The number of personnel increased by 9.1 per cent and the Group had 2,868 (2,628) employees at the end of the review period.
- The Annual General Meeting approved the Board of Directors’ dividend proposal. A dividend of EUR 0.23 (0.16) per share was paid on April 16, 2018.
- Etteplan revises its financial guidance: we expect the revenue and operating profit for the year 2018 to grow clearly compared to 2017.
* EBIT from business operations is an alternative performance measure that is presented because it reflects the Company’s operational performance better than operating profit (EBIT). EBIT from business operations does not include the amortization of fair value adjustments at acquisitions or premeasurements of contingent considerations. More information on page 17.
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, updated on May 3, 2018
We expect the revenue and operating profit for the year 2018 to grow clearly compared to 2017.
Previous financial guidance 2018, updated on February 8, 2018
We expect the revenue and operating profit for the year 2018 to grow compared to 2017.
|EBIT from business operations||4,871||4,329||17,163|
|EBIT from business operations, %||8.3||7.9||8.0|
|Operating profit (EBIT)||4,415||3,827||15,484|
|Basic earnings per share, EUR||0.13||0.12||0.47|
|Equity ratio, %||43.0||42.1||40.7|
|Operating cash flow||3,278||1,904||18,254|
|Personnel at end of the period||2,868||2,628||2,802|
President and CEO Juha Näkki:
The year 2018 got off to a good start overall. In Europe, the demand situation remained good in all of our market areas and the positive development of the Chinese market continued. Our revenue grew and our profitability improved year-on-year. Also the good development of our cash flow continued.
The development of the Engineering Services service area was excellent and profitability improved clearly, boosted by strong demand. The share of Managed Services declined slightly in the service area as customers were buying more individual resources in the good market environment.
The profitability of the Embedded Systems and IoT service area was still short of our expectations. We have taken measures to improve the efficiency of the business and we started to see results of these measures towards the end of the review period. The share of Managed Services declined due to measures directed at the project business as well as customers buying more individual resources. The service area’s profitability nevertheless improved from the previous quarter, and we expect the positive development to continue. We acquired Koodain Solutions Oy, which supports the development of the service area.
The growth of the Technical documentation service area continued, but the service area was burdened by further delays in deliveries for a significant project as well as challenges with certain customers in Germany. We are nevertheless seeing strong demand for our service solutions, which provides us with excellent growth opportunities.
Our business in China is in an interesting phase. Hours sold to the Chinese market grew by more than 40 per cent during the review period. After the end of the review period we received an order from a major state-owned Chinese corporation. With this deal we will expand our operations in China to Qingdao, in Shandong province. Until now, mainly the Western companies have used our services in China. When the market opens up to Chinese customers as well, the potential of the market multiplies. This offers an excellent ground for further growth and we will continue to invest in China.
The prevailing political situation has increased uncertainty in the markets to some extent. However, we expect the favorable demand situation to continue and, buoyed by the positive development of our business, we are updating our financial guidance for 2018: we expect revenue and operating profit to grow clearly compared to 2017.
This stock exchange release is a summary of Etteplan's January-March 2018 Interim Report. The complete Interim Report 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, May 3, 2018
Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-March 2018 in a conference call and a live webcast, held in English language, on May 3, 2018 starting at 2.30 p.m. Finnish time (EEST).
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-osavuosikatsaus-q1-2018-webcast-352018-1430. 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, May 3, 2018
Board of Directors
Juha Näkki, President and CEO, tel. +358 10 307 2077
Outi Torniainen, SVP, 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