ETTEPLAN Q2 2018: Growth accelerated and profitability close to the target level

Etteplan Oyj Half Year Financial Report August 14, 2018 at 1:00 pm

ETTEPLAN Q2 2018: Growth accelerated and profitability close to the target level

Review period April-June 2018

• The Group’s revenue grew by 14.2 per cent and was EUR 62.0 million (4-6/2017: EUR 54.3 million). At comparable currencies, growth was 16.2 per cent.
• Organic revenue growth was 9.6 per cent. At comparable currencies, organic growth was 11.5 per cent.
  
• EBIT from business operations* improved and amounted to EUR 6.0 (4.7) million or 9.7 (8.6) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.3 (0.2) million.
• Operating profit (EBIT) was EUR 5.7 (4.2) million or 9.1 (7.8) per cent of revenue. Operating profit included exceptional items with a combined negative effect of EUR 0.1 (0.2) million.
• The profit for the review period was EUR 4.4 (3.2) million.
• Operating cash flow was EUR 4.5 (5.4) million.
• Undiluted earnings per share were EUR 0.18 (0.12).
• Etteplan continued to invest in growth by acquiring the software company Eatech Oy.
• Etteplan updates its financial guidance: We expect the revenue for the year 2018 to grow clearly and the operating profit for the year 2018 to grow significantly compared to 2017.

Review period January-June 2018

• The Group’s revenue grew by 10.9 per cent and was EUR 121.0 million (1-6/2017: EUR 109.1 million). At comparable currencies, growth was 12.5 per cent.
• Organic revenue growth was 7.9 per cent. At comparable currencies, organic growth was 9.5 per cent.
• EBIT from business operations* improved and amounted to EUR 11.0 (9.0) million or 9.0 (8.2) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.5 (0.6) million.
• Operating profit (EBIT) was EUR 10.1 (8.0) million or 8.3 (7.4) per cent of revenue. Operating profit included exceptional items with a combined negative effect of EUR 0.3 (0.6) million.
• The profit for the review period was EUR 7.6 (6.0) million.
• Operating cash flow improved and was EUR 7.7 (7.3) million.
• Undiluted earnings per share were EUR 0.31 (0.24).
• The number of personnel increased by 11.7 per cent and the Group had 3,051 (2,731) employees at the end of June 2018.

* 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 August 14, 2018

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

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.

President and CEO Juha Näkki:

‘The market situation remained good in all of our market areas in the second quarter of the year. We accelerated organic growth for example by opening new operations in China and Poland. We also acquired Eatech Oy and significantly strengthened our position in software design and IoT solutions. Our strong operating performance also improved our EBIT from business operations close to our target level of 10 per cent. I am very satisfied with the development of our business and the results we have achieved, and I want to thank our people for a job well done.

Development was particularly strong in the Engineering Services service area. Our performance was excellent in all market areas and our operational profitability exceeded our target level of 10 per cent for the first time.

The Embedded Systems and IoT service area also developed positively. The Eatech acquisition in May accelerated growth. The measures taken to improve the efficiency of the project business began to show results and the profitability of the business continued to increase.

Technical documentation was burdened by further delays in deliveries for a project and challenges in Germany. In general, however, the service area saw positive development and interest in our outsourcing solutions, in particular, remained at a good level.

Our revenue has now grown for 16 consecutive quarters and our operating profit has improved for 9 consecutive quarters. While tension related to international trade has increased uncertainty in the markets, we will continue to invest in profitable growth of our business. As our operating profit for the first half of the year exceeded EUR 10 million, we updated our financial guidance regarding operating profit and we now expect that operating profit for the year 2018 will grow significantly compared to 2017.’

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-June 2018 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 14, 2018

Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-June 2018 in a conference call and a live webcast, held in English language, on August 14, 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-h12018-webcast-1482018-1430. 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, August 14, 2018

Etteplan Oyj

Board of Directors

Additional information:
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 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. www.etteplan.com