ETTEPLAN Q2 2017: Good organic growth continued, operating profit rose to record level

Released:8/10/2017 Category:Half Year financial report 

Etteplan Oyj, Half Year Financial Report, August 10, 2017, at 2:00 p.m.

ETTEPLAN Q2 2017: Good organic growth continued, operating profit rose to record level

Review period April-June 2017

  • The Group’s revenue increased by 8.2 per cent and was EUR 54.3 million (4-6/2016: EUR 50.2 million). At comparable exchange rates, revenue increased by 9.0 per cent.
  • Organic growth in revenue was 7.8 per cent. At comparable exchange rates, organic growth was 8.6 per cent.
  • EBIT from business operations* improved and amounted to EUR 4.7 (2.9) million, or 8.6 (5.8) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.2 (1.0) million.
  • Operating profit (EBIT) was EUR 4.2 (2.4) million, or 7.8 (4.7) per cent of revenue.
  • The profit for the review period was EUR 3.2 (1.8) million.
  • Operating cash flow improved and was EUR 5.4 (1.1) million.
  • Undiluted earnings per share were EUR 0.12 (0.08).
  • Etteplan continued to invest in growth by acquiring companies in Finland and Sweden.
  • Etteplan is updating its estimate of market outlook and keeping its financial guidance from May 3, 2017 unchanged.

  Review period January-June 2017

  • The Group’s revenue increased by 22.9 per cent and was EUR 109.1 million (1-6/2016: EUR 88.8 million). At comparable exchange rates, revenue increased by 23.7 per cent.
  • Organic growth in revenue was 10.9 per cent. At comparable exchange rates, organic growth was 11.8 per cent.
  • EBIT from business operations* improved and amounted to EUR 9.0 (5.1) million, or 8.2 (5.7) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.6 (1.2) million.
  • Operating profit (EBIT) was EUR 8.0 (4.2) million, or 7.4 (4.8) per cent of revenue.
  • The profit for the review period was EUR 6.0 (3.2) million.
  • Operating cash flow improved and was EUR 7.3 (-0.5) million.
  • Undiluted earnings per share were EUR 0.24 (0.15).
  • The number of personnel increased and the Group had 2,731 employees at the end of the review period (2,487).

*EBIT from business operations is an alternative performance measure, which reflects the Company’s operational performance: it does not include acquisition-related items such as amortization on PPA allocations and earn-out revaluations. 
Espotel Oy and Soikea Solutions Oy, acquired in spring 2016, are included in Etteplan’s figures in the second quarter 2017 in full.

Market outlook 2017

The most important factor in the development of 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 Finlandhas improved and good demand is expected to continue. In Asia, the growth of the service market is expected to continue.

Financial guidance 2017, updated on May 3, 2017

We expect the revenue and operating profit for the full year 2017 to grow clearly compared to 2016.

Key figures          
           
(EUR 1,000) 4-6/2017 4-6/2016 1-6/2017 1-6/2016 1-12/2016
Revenue 54,314 50,211 109,116 88,814 183,938
EBIT from business operations 4,669 2,911 8,998 5,090 12,071
EBIT from business operations, % 8.6 5.8 8.2 5.7 6.6
Operating profit (EBIT) 4,218 2,352 8,045 4,248 10,131
EBIT, % 7.8 4.7 7.4 4.8 5.5
Basic earnings per share, EUR 0.12 0.08 0.24 0.15 0.33
Equity ratio, % 40.1 38.1 40.1 38.1 40.0
Operating cash flow 5,400 1,148 7,305 -533 5,661
ROCE, % 19.3 13.9 18.6 12.8 14.8
Personnel at end of the period 2,731 2,487 2,731 2,487 2,545

President and CEO Juha Näkki:

Our business developed well in the second quarter, as it did in the first quarter. The market situation in Finland improved during the review period and the good situation in our other market areas continued. We were able to leverage our service offering and strong market position. Our revenue for the second quarter increased by 9.0 per cent year-on-year at comparable exchange rates, in spite of the quarter being shorter than the comparison period. The majority of the growth was organic. Our determined strategy execution enabled us to further improve our profitability and increase our operating profit to a record level. The measures implemented in previous quarters to improve cash flow also produced good results and cash flow was at record levels for the second quarter.

In the Engineering services service area, demand for machinery and equipment engineering improved particularly in Finland and some new plant engineering investment projects started. Supported by our service solutions, the service area’s business developed favorably and we achieved a clear improvement in our result. We also invested in future growth by strengthening our engineering expertise in the shipbuilding industry and steel structure engineering by acquiring SDS Aura Oy in Finland. 

Our business saw stable development in the Embedded systems and IoT service area. Revenue grew in line with our expectations, but profitability was slightly burdened by investments in organic growth made in the first quarter as well as excess hours in certain projects. Nevertheless, the service area’s demand is at an excellent level, which provides us with good growth opportunities going forward.

In Technical documentation, the development of our business was again excellent. Our outsourcing solutions, in particular, provided an stable foundation for growth and the positive development of our business. We also expanded our operations in Sweden by acquiring Sorona Innovation AB. Sorona complements our service offering particularly in structured documentation and strengthens our position in Southern Sweden.

I am satisfied with our development in the first half of the year. We were winning on many fronts and carried out investments that support our growth. After the end of the review period, we acquired full ownership of our Chinese joint venture. The acquisition supports our progress in China, a market that has very high potential.

Although visibility in our main markets remains low, the uncertainty has decreased and we enter the second half of the year with confidence. 

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-June 2017 Half Year Financial Report. The complete Half Year Financial 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, August 10, 2017

Etteplan's President and CEO Juha Näkki will present Company's results for January-June 2017 in a conference call and a live webcast for analysts and investors, held in English language, on August 10, 2017 starting at 3.30 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 7479 0360 and tell operator the event password: 997906. 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 on http://platform.goodmood.fi/goodmood/etteplan/live. The webcast starts at 3.30 p.m. Finnish time (EET). A recording of the webcast will be later available at www.etteplan.com/Investors.

Vantaa, August 10, 2017

Etteplan Oyj

Board of Directors

Additional information:
Juha Näkki, President and CEO, tel. +358 400 606 372
Outi Torniainen, SVP, Communications and Marketing, tel. +358 40 512 1375

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

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 2016, Etteplan had a turnover of EUR 183.9 million. The company currently has some 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

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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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