ETTEPLAN Q1 2020: After a good start the year continues under exceptional circumstances

ETTEPLAN OYJ Interim Report May 5, 2020, at 1:00 p.m.

ETTEPLAN Q1 2020: After a good start the year continues under exceptional circumstances

Key points January-March 2020              

• The Group’s revenue grew by 8.6 per cent and was EUR 71.3 million (1-3/2019: EUR 65.6 million). At comparable exchange rates, growth was 9.5 per cent.
• Operating profit (EBITA) amounted to EUR 6.6 (6.4) million or 9.2 (9.8) per cent of revenue.
• Operating profit (EBIT) was EUR 5.7 (5.8) million or 7.9 (8.8) per cent of revenue.
• Basic earnings per share were EUR 0.17 (0.17).
• The financial impact of the COVID-19 pandemic on our company is impossible to estimate, which is why we withdrew our financial guidance at the end of March. (see page 2). 

Etteplan also monitors non-IFRS performance measures, because they provide additional information on Etteplan’s development. More information on performance measures is provided on pages 18-19.

President and CEO Juha Näkki:

The first quarter of 2020 got off to a slow start in Europe. In Finland, turbulence in the labor market affected demand, while elsewhere in Europe, there were delays in the starting of projects. Toward the end of January, demand clearly picked up across Europe and remained at a good level nearly throughout the first quarter in spite of the uncertainty caused by the COVID-19 pandemic. As the pandemic spread to Europe, the impact on demand and our business started to be visible in Europe in late March.

In China, the COVID-19 pandemic had a significant effect on demand in the first quarter and on our business. Due to the additional holidays, quarantines and other measures imposed by the authorities, our business was nearly at a standstill after Chinese New Year and throughout February. In March, however, our employees were able to gradually return to work, demand quickly returned to a good level and our business was nearly back to normal by the end of March.

We achieved a good result in spite of the unusual circumstances. Our revenue grew, boosted by acquisitions, but our organic growth turned to a decrease, particularly due to the impact of the COVID-19 pandemic in China. We were also cautious in recruitments due to the uncertainty brought about by the pandemic. Our operating profit in all of our service areas was at a good level considering the circumstances thanks to good operational efficiency. We were particularly satisfied with the development of the Technical Documentation Solutions service area where, after some weaker quarters, profitability returned to a good level, exceeding our target of 10 per cent.

Nevertheless, following a good first quarter in the current market environment, we now face an entirely new situation. The outbreak of the COVID-19 pandemic immediately affected the market situation and demand as our customers implemented various adaptation measures, and we have also had to adapt our business to the prevailing situation in all of our operating countries. Our first priority at the present time is the health of our employees, and we are doing everything we can to ensure safe working conditions for our personnel. Etteplan’s strategy is largely based on service solutions that can be flexibly produced anywhere in the world. To implement this strategy we have made extensive investments in our information systems and tools. These investments now enabled a very quick transition to remote work, which is the safest and most efficient way of working for the time being. Approximately 85 per cent of our employees are currently working remotely, and I want to thank our employees for their flexibility and good fighting spirit in this difficult situation.

The financial impact of the COVID-19 pandemic on our company is impossible to estimate, which is why we withdrew our financial guidance at the end of March. It is clear that the prolongation of the pandemic and the various restrictive measures will have significant effects on our customers’ business and, consequently, on our business. However, we have already agreed on loan arrangements that ensure the financing of the Company under any circumstances and we are confident that Etteplan will emerge from this difficult situation as an even stronger company.

Market outlook 2020

The global COVID-19 pandemic has a significant impact on global economy and market situation. The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. Due to the prevailing uncertainty on the market there have been unforeseen changes in Etteplan’s customer demand. The prolonging of the situation will have a negative impact on financial development that is very difficult to estimate at the moment.

Financial guidance 2020 (updated on March 30, 2020)

On March 30, 2020, Etteplan withdrew its financial guidance for the year 2020 for the time being due to the uncertainty caused by the COVID-19 pandemic. Etteplan will not provide any financial guidance for 2020 for the time being. The guidance will be issued when the Company is in a better position to assess the impact of the COVID-19 pandemic on Etteplan’s business.

Previous financial guidance 2020 (updated on February 11, 2020):

We expect the revenue for 2020 to increase clearly and operating profit (EBIT) to be at the same level or to improve compared to 2019.

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-March 2020 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 5, 2020

Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-March 2020 in a conference call and a live webcast, held in English language, on May 5, 2020 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 0310 and insert the conference PIN code 31482910#. 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://etteplan.videosync.fi/2020-q1-results. 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.

Espoo, May 5, 2020

Etteplan Oyj

Board of Directors

Additional information:
Juha Näkki, President and CEO, tel. +358 10 307 2077
Outi Torniainen, SVP, Marketing and Communications, tel. +358 10 307 3302

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

Etteplan in brief

Etteplan provides solutions for industrial equipment and plant engineering, software and embedded solutions, 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, services 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 2019, Etteplan had a turnover of approximately EUR 263 million. The company currently has over 3,400 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