Etteplan Q2: Demand situation continued to be challenging

ETTEPLAN OYJ, INTERIM REPORT, AUGUST 15, 2013 AT 2.00 P.M.

ETTEPLAN Q2: DEMAND SITUATION CONTINUED TO BE CHALLENGING

Review period April-June 2013

- The Group’s revenue decreased by 2.2% and was EUR 34.2 million
  (4-6/2012: EUR 35.0 million).
- EBITDA declined by 12.1% and was EUR 2.6 million (EUR 3.0 million).
- Operating profit (EBIT) decreased by 17.0% and was EUR 2.0 million (EUR 2.4 million).
- The profit for the review period was EUR 1.6 million (EUR 1.7 million).
- Operating cash flow decreased and was EUR 1.0 million (EUR 2.4 million).
- Earnings per share were EUR 0.08 (EUR 0.09).
- Etteplan adjusts its estimate of outlook for 2013.

Review period January-June 2013

- The Group’s revenue decreased by 2.7% and was EUR 68.7 million
  (1-6/2012: EUR 70.6 million).
- EBITDA declined by 16.2% and was EUR 5.1 million (EUR 6.1 million).
- Operating profit (EBIT) decreased by 25.2% and was EUR 3.7 million (EUR 5.0 million).
- The profit for the review period was EUR 2.7 million (EUR 3.4 million).
- Operating cash flow decreased and was EUR -0,9 million (EUR 4.0 million).
- Earnings per share were EUR 0.13 (EUR 0.18).

Outlook 2013

Market outlook

Changes in Etteplan’s customers’ order books quickly influence the development of Etteplan’s revenue. At the end of the review period, the order books of Etteplan’s major customers were, on average, at a lower level than in the corresponding period in 2012. We estimate that the demand situation for engineering design services continues to be challenging.

Financial guidance

We expect the revenue for the year 2013 to be on the same level as in year 2012 and the operating profit for the year 2013 to be lower than in year 2012.

Previous estimate of outlook

Market outlook

Changes in Etteplan’s customers’ order books quickly influence the development of Etteplan’s revenue. At the end of the review period, the order books of Etteplan’s major customers were, on average, at a lower level than in the corresponding period in 2012. We estimate that the demand situation for engineering design services continues to be challenging.

Financial guidance

We expect the revenue and operating profit for the year 2013 to be on the same level as in year 2012.

Key figures

(EUR 1,000) 4-6/2013 4-6/2012 1-6/2013 1-6/2012 1-12/2012
Revenue 34,240 35,002 68,699 70,628 134,479
EBITDA 2,632 2,995 5,090 6,078 11,154
EBITDA, % 7.7 8.6 7.4 8.6 8.3
Operating profit (EBIT) 1,954 2,353 3,712 4,962 8,715
EBIT, % 5.7 6.7 5.4 7.0 6.5
Basic earnings per share, EUR 0.08 0.09 0.13 0.18 0.29
Equity ratio, % 31.7 28.8 31.7 28.8 32.4
Operating cash flow 1,022 2,433 -938 3,998 11,339
ROCE, % 18.3 22.7 16.8 23.8 20.4
Personnel at end of the period 1,742 1,784 1,742 1,784 1,776

Juha Näkki, President and CEO of Etteplan Oyj comments on the interim report:

“The market situation continued to be difficult in the second quarter. The order backlogs of our key customers continued to decline and decision-making on new development projects and investments was slow due to continued economic uncertainty. In this challenging demand situation, our revenue remained at the level seen in the first quarter of the year and was slightly lower compared to the second quarter of 2012.  Our operating profit improved compared to the first quarter of 2013, but was substantially lower than in the second quarter of 2012. There are multiple signs indicating that the market situation will remain challenging in the fall. This makes it more difficult to predict how the demand for engineering design services will develop.  

In Finland and Sweden, the demand situation remained at the weakened level seen in the first quarter of the year and varied substantially between customers. The development in the demand for investment projects in Russia was positive. The demand situation in the Netherlands continued to weaken during the review period. In China, the market for engineering design services developed positively in line with our expectations, and the number of working hours towards the Chinese market continued to increase. In the first half of the year, the number of working hours towards the Chinese market increased by approximately 50 per cent compared to the corresponding period in 2012. During the review period, we received significant assignments in China in new engineering areas and from new customers. We therefore expect our positive development in the Chinese market to continue.

In Europe, we expect that the challenging market situation will continue in the second half of the year and we continue to focus on strengthening our market position through our service products and solutions. The interest in our solutions is at a good level. Quotation activity was brisk in the first half of the year, particularly in the area of technical product information service solutions, and we gained several technical product information customers in the second quarter. In the first half of the year, we continued our investments in developing innovative new service solutions. The proportion of revenue represented by these higher added value Managed Services grew in the second quarter, exceeding one quarter. This positive development creates a strong foundation for future growth and improvements in profitability. I believe that the proportion of our operations represented by higher added value services will continue to grow in the second half of the year. This development will strengthen our competitive position in the market for engineering design services.”

Disclosure procedure

Etteplan follows the disclosure procedure enabled by Disclosure obligation of the issuer (7/2013) published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Etteplan’s January-June 2013 interim report. The complete report is attached to this release in pdf format and is also available on Etteplan’s website at www.etteplan.com . Investors are advised to review the complete interim report with tables.

Conference call and live webcast today, August 15, 2013

Etteplan’s President and CEO Juha Näkki will present Company’s results for January-June 2013 in a conference call and a live webcast for analysts and investors, held in English language, starting at 15.00 pm Finnish time (EET).

To participate in the conference call please dial 5-10 minutes prior to the start of the conference +358 9 2319 5437, event password Etteplan2013. Questions can be asked in English after President and CEO’s presentation only through conference call connection.

Juha Näkki’s presentation can be followed as a live webcast through a link at Etteplan’s homepage at www.etteplan.com/Investors . The live webcast starts at 15.00 pm Finnish time (EET).

A recording of the webcast will be later available at the same address.

Hollola, August 15, 2013

Etteplan Oyj

Group Communications

Additional information:
Juha Näkki, President and CEO, tel. +358 400 606 372

The information presented herein has not been audited.

Releases and other corporate information are available on Etteplan’s Web site at www.etteplan.com .

DISTRIBUTION:
NASDAQ OMX Helsinki
Major media
www.etteplan.com

Etteplan provides engineering services and technical product information 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 2012, Etteplan had turnover of EUR 134.5 million. The company has more than 1,700 professionals in Finland, Sweden, the Netherlands and China. Etteplan's shares are listed on NASDAQ OMX Helsinki Ltd under the ETT1V ticker.

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 2016, Etteplan had turnover of EUR 183.9 million. The company has over 2,500 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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