ETTEPLAN Q2 2022: Strong growth in spite of uncertainty

 ETTEPLAN OYJ Half Year Financial Report August 10, 2022, at 1.00 p.m.

ETTEPLAN Q2 2022: Strong growth in spite of uncertainty

Key points April-June 2022

• The Group’s revenue grew by 18.9 percent and was EUR 89.3 million (4-6/2021: EUR 75.0 million). At comparable exchange rates, revenue increased by 19.5 percent.
• Operating profit (EBITA) grew by 4.6 percent and was EUR 8.1 (7.8) million, or 9.1 (10.4) percent of revenue.
• Operating profit (EBIT) grew by 1.3 percent and was EUR 6.8 (6.7) million, or 7.6 (9.0) percent of revenue.
• Operating cash flow was EUR 4.4 (12.4) million.
• Basic earnings per share were EUR 0.22 (0.20).

Key points January-June 2022                

• The Group’s revenue grew by 20.8 percent and was EUR 178.8 million (1-6/2021: EUR 148.0 million). At comparable exchange rates, revenue increased by 21.4 percent.
• Operating profit (EBITA) grew by 10.5 percent and was EUR 17.1 (15.5) million, or 9.6 (10.5) percent of revenue.
• Operating profit (EBIT) grew by 8.4 percent and was EUR 14.4 (13.3) million, or 8.1 (9.0) percent of revenue.
• Operating cash flow was EUR 13.0 (13.7) million.
• Basic earnings per share were EUR 0.46 (0.41).

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.

President and CEO Juha Näkki:

Our strong growth continued in the second quarter. Also the number or personnel grew reaching a new level and exceeding 4,000 soon after the end of the review period. Acquisitions supported growth but also organic growth was on a good level despite the market uncertainties.

We continued to develop our service offering and capabilities through two acquisitions. We strengthened our sustainability know-how and acquired LCA Consulting Oy in Finland. The acquisition of DDCOM B.V. in the Netherlands widened our capabilities in 3D content-based animation and visualization services related to technical documentation. After the review period we made a strategic investment in Swedish start-up company Ekkono Solutions AB, a developer of machine learning and artificial intelligence technology. We see great potential for utilizing the technology as part of our service solutions.

Once the pandemic related restriction were halted in Europe, we were finally able to organize different types of personnel events. A backlog of employee training and social events accumulated during the pandemic, and took measures to release the backlog during the review period. This increased personnel, training and travel expenses in the review period and affected profitability. Going forward, we expect these costs to normalize at a level that corresponds to the new hybrid work model. In addition, profitability was affected by sickness-related absences, more holidays falling in the second quarter, and organizational restructuring costs in the software business due to which our profitability fell slightly short of our target level.

During the review period, the demand situation remained good but there were fluctuations in the demand. The war Russia started in Ukraine accelerates inflation and increases uncertainty. This affects our customers’ willingness to invest in some industries, and postponed the start of development projects to some extent. The demand fluctuations were visible especially in Software and Embedded Solutions and Technical Documentation Solutions service areas. Operational efficiency was cut short from our expectations in Software and Embedded Solutions service area, and during the review period we implemented actions to fix the situation. In Engineering Solutions service area good level of demand was maintained by Engineering-to-Order services related to customer projects and operational efficiency was on good level.

Despite the uncertainty and fluctuations in demand we will start the second half of the year with a relatively good demand situation. Though investments in some customer industries have been postponed, investments in defense industry and accelerating the green transition are growing and our customers’ orderbooks have continued to develop mainly positively. Therefore, we estimate that growth and positive development will continue also in the latter part of the year and keep our financial guidance intact.  

Market outlook 2022

The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. The prolongation of the COVID-19 pandemic continues to have an impact on the market situation and supply chains. The war Russia started in Ukraine increases uncertainty in the markets and accelerates inflation, which slows down investments and affects the demand situation. On the other hand, the unstable geopolitical climate increases demand in the defense industry and for investments related to the green transition. Forecasting remains difficult and the demand situation is fluctuating. We, nevertheless, expect the general demand situation to remain fairly good throughout 2022.

Financial guidance 2022

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

Revenue in 2022 is estimated to be EUR 340-370 (2021: 300.1) million, and
operating profit (EBIT) in 2022 is estimated to be EUR 28-32 (2021: 25.8) million.

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-June 2022 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, 2022

Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-June 2022 in a conference call and a live webcast, held in English language, on August 10, 2022 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 81322636#. 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/2022-q2. 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, August 10, 2022

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 documentation 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 2021, we had a turnover of EUR 300.1 million. The company currently has over 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