ETTEPLAN Q2 2020: Strong profitability under exceptional circumstances

ETTEPLAN OYJ Half Year Financial Report August 11, 2020, at 1:00 p.m.

ETTEPLAN Q2 2020: Strong profitability under exceptional circumstances

Key points April-June 2020

• The Group’s revenue decreased by 2.2 per cent and was EUR 62.9 million (4-6/2019: EUR 64.3 million). At comparable exchange rates, revenue decreased by 2.0 per cent.
• Operating profit (EBITA) amounted to EUR 6.3 (6.5) million or 10.0 (10.1) per cent of revenue.
• Operating profit (EBIT) was EUR 5.4 (5.8) million or 8.5 (9.0) per cent of revenue.
• Operating cash flow was EUR 18.0 (8.8) million.
• Basic earnings per share were EUR 0.16 (0.18).

Key points January-June 2020                 

• The Group’s revenue grew by 3.3 per cent and was EUR 134.2 million (1-6/2019: EUR 130.0 million). At comparable exchange rates, growth was 3.7 per cent.
• Operating profit (EBITA) amounted to EUR 12.9 (12.9) million or 9.6 (9.9) per cent of revenue.
• Operating profit (EBIT) was EUR 11.0 (11.6) million or 8.2 (8.9) per cent of revenue.
• Operating cash flow was EUR 20.3 (14.2) million.
• Basic earnings per share were EUR 0.33 (0.35).
• Etteplan updates its market outlook and financial guidance: Our revenue will decrease slightly or be at the same level as in the previous year, our operating profit (EBIT) will decrease compared to 2019. (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 19-20.

President and CEO Juha Näkki:

“The effects of the COVID-19 pandemic were clearly reflected in demand in the second quarter. In Eu-rope, our customers implemented various adaptation and cost saving measures, which led to temporary suspensions and cancellations of assignments. Consequently, our revenue decreased year-on-year for the first time since the second quarter of 2014. Demand in the Chinese market returned to a good level in the second quarter and the number of hours sold in the Chinese market returned to growth again. Never-theless, the uncertainty caused by the pandemic in the global economy is continuing also in China, and future market development is difficult to predict.

As demand weakened, we focused on sales and found new opportunities in the changing circumstances. However, we were forced to implement adaptation measures and seek savings in operating costs throughout our organization. We also temporarily suspended some of our development programs. The timely measures enabled us to maintain good operating efficiency and our profitability was at an excel-lent level considering the circumstances. Strong profitability enables us to return back to implementing our growth strategy.

Operating cash flow was also exceptionally strong for the second quarter as operating expenses de-clined faster than cash flow from sales due to the adaptation and cost saving measures. When business returns to growth, the effect on cash flow will be the opposite. This means that, assessed over the longer term, cash flow will reflect our operating performance.

The uncertainty created by the pandemic is continuing and we are entering the second half of the year in a uncertain market situation. Nevertheless, for some of our customers, orders received are turning to a bet-ter direction after bottoming out in the second quarter. Some of our customers have also initiated new investments to be in a more competitive position when the demand situation improves. Investments fo-cused on digitalization, in particular, have already started and we have won new projects. Accordingly, we are hopeful regarding a market recovery to some degree in the second half of the year despite the pan-demic related uncertainty. Based on this assessment and our results for the first half of the year, we again issue a financial guidance for the full year 2020: our revenue will decrease slightly or be at the same level as in the previous year, our operating profit (EBIT) will decrease compared to 2019.”
 

Market outlook 2020 (updated on August 11, 2020)

The global COVID-19 pandemic has a significant impact on the global economy and market situation and it increases uncertainty in the market. The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry, and demand has weakened due to the pandemic. The prolonging of the situation will have a negative impact on Etteplan’s business.

Financial guidance 2020 (updated on August 11, 2020)

Revenue for the full year 2020 will decrease slightly or be at the same level as in the previous year, operating profit (EBIT) will decrease compared to 2019.

Withdrawal of the financial guidance 2020 (updated on March 30, 2020)

Etteplan withdraws 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-June 2020 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 11, 2020

Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-June 2020 in a conference call and a live webcast, held in English language, on August 11, 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 47829746#. 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-q2-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, August 11, 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