ETTEPLAN Q1 2023: Exceptional items burdened the good result

ETTEPLAN OYJ Interim Report May 11, 2023, at 1:00 p.m. (EEST)

ETTEPLAN Q1 2023: Exceptional items burdened the good result

Key points January–March 2023         

• The Group’s revenue grew by 6.0 percent and was EUR 95.0 million (1–3/2022: EUR 89.6 million). At comparable exchange rates, revenue increased by 8.0 percent.
• Operating profit (EBITA) was EUR 7.6 (9.0) million, or 8.0 (10.0) percent of revenue.
• Operating profit (EBIT) was EUR 6.3 (7.6) million, or 6.6 (8.5) percent of revenue.
• The result was affected by non-recurring items and one-time salary payment in accordance with the collective labor agreement in Finland, which totaled EUR -2.0 (-0.3) million.
• Operating cash flow was EUR 7.2 (8.6) million.
• Basic earnings per share were EUR 0.17 (0.23).

Etteplan also monitors non-IFRS performance measures, because they provide additional information on Etteplan’s development. More information on performance measures is provided at the end of the release.

Key figures

President and CEO Juha Näkki:

The first quarter of the year went as expected. At comparable exchange rates, revenue grew by eight percent in a slightly softened market situation. The result was burdened by significant exceptional items consisting of one-time salary payment defined in the collective labor agreement in Finland, as well as organizational restructuring costs. During the review period, we carried out measures that were mainly directed at the company’s management. The measures are aimed at ensuring that the company develops in the right direction in all of its businesses. Without the exceptional items, profitability would have been at our target level.

As expected, the market situation was slightly softer than at the end of the previous year. Inflation has remained high due to the war in Ukraine and geopolitical tensions. This has affected consumers’ purchasing behavior, and several European countries have fallen into a slight recession. This is also reflected in industrial investments, and some of our customers have been slightly more cautious in starting for example new product development projects. This caution was apparent particularly in our Software and Embedded Solutions service area, where product development accounts for most of the business. The demand for delivery projects and plant engineering projects remained at a good level. This enabled our Engineering Solutions service area – which had very strong operational performance – achieve an excellent result, if exceptional items are taken into account. The Technical Communication Solutions service area (formerly the Technical Documentation Solutions service area) performed well, but the weaker profitability of Cognitas continued to burden the result. During the review period, we took measures to improve the situation, and we expect the service area’s profitability to return to a level that is in line with our expectations towards the end of the year.

Etteplan’s strategy has proved its effectiveness in both good and weaker market conditions. In connection with the Annual General Meeting, we extended our strategy period and raised our financial targets slightly. Although there was slight softness in demand in the early months of the year, we also see opportunities and expect demand to pick up towards the end of the year. With strong implementation of our strategy, we can achieve the targets set also for this year, and we keep our financial guidance unchanged.

Market outlook 2023

The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. The war started by Russia in Ukraine and the subsequent elevation in geopolitical tensions have increased uncertainty globally. Inflation remains high, which raises prices and affects consumer behavior. Changes in consumer demand are reflected in industry, which has an impact on our customers’ willingness to invest and affects demand in certain industries. At the same time, investments related to the defense industry, energy efficiency and accelerating the green transition are growing. There is still variation in demand, but we expect the general demand situation to remain fairly good throughout 2023.

Financial guidance 2023

Etteplan keeps its guidance for revenue and operating profit (EBIT) intact and issues the following estimate:  

Revenue in 2023 is estimated to be 360–390 (2022: 350.2) million, and
operating profit (EBIT) in 2023 is estimated to be EUR 28–33 (2022: 28.6) million.

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-March 2023 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 11, 2023

Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-March 2023 in a conference call and a live webcast, held in English language, on May 11, 2023 starting at 2.30 p.m. Finnish time (EEST).

Questions can be asked in Finnish and in English after President and CEO’s presentation only through conference call connection. Participants must register through this link http://palvelu.flik.fi/teleconference/?id=10010623 to ask questions through the conference call lines. After registering the participants will receive a teleconference number and a code to join the call. The participants are asked to press *5 to join the queue for questions.

Juha Näkki’s presentation can be followed as a live webcast on https://etteplan.videosync.fi/q1-2023. The webcast starts at 2.30 p.m. Finnish time (EEST). A recording of the webcast will be available later at www.etteplan.com.

Espoo, May 11, 2023

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

We are a rapidly growing technology service company specializing in software and embedded solutions, engineering solutions, and technical communication solutions. We are a forerunner in the engineering industry and we differentiate ourselves by the wide-ranging competence of our experts. Our customers include world’s leading companies in the manufacturing industry. We help them to create a better world through engineering, innovation and digitalization.

Etteplan has lead the way in the engineering field already since 1983. In 2022, we had a turnover of EUR 350.2 million. The company currently has some 4,000 professionals in Finland, Sweden, the Netherlands, Germany, Poland, Denmark and China. Etteplan's shares are listed on Nasdaq Helsinki Ltd under the ETTE ticker. www.etteplan.com