ETTEPLAN Q3 2020: Good defense produced results

ETTEPLAN OYJ Interim Report October 29, 2020, at 1:00 p.m.

ETTEPLAN Q3 2020: Good defense produced results

Key points July-September 2020             

• The Group’s revenue decreased by 10.3 per cent and was EUR 55.2 million (7-9/2019: EUR 61.5 million). At comparable exchange rates, revenue decreased by 10.7 per cent.
• Operating profit (EBITA) amounted to EUR 5.2 (6.6) million or 9.5 (10.7) per cent of revenue.
• Operating profit (EBIT) was EUR 4.3 (5.7) million or 7.7 (9.3) per cent of revenue.
• Operating cash flow was EUR 0.2 (1.1) million.
• Basic earnings per share were EUR 0.13 (0.19).
• Etteplan strengthened its production-related competence and know-how by acquiring Tegema in the Netherlands.

Key points January-September 2020       

• The Group’s revenue decreased by 1.1 per cent and was EUR 189.4 million (1-9/2019: EUR 191.5 million). At comparable exchange rates, revenue decreased by 1.0 per cent.
• Operating profit (EBITA) amounted to EUR 18.1 (19.5) million or 9.5 (10.2) per cent of revenue.
• Operating profit (EBIT) was EUR 15.3 (17.3) million or 8.1 (9.0) per cent of revenue.
• Operating cash flow was EUR 20.5 (15.4) million.
• Basic earnings per share were EUR 0.46 (0.54).
• Etteplan updated its financial guidance: Revenue for 2020 will decrease slightly or be at the same level as in the previous year, while operating profit (EBIT) will decrease clearly 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.

Key figures

President and CEO Juha Näkki:

Our customers’ orders received and their order backlogs have declined as a result of the COVID-19 pandemic, which weakened demand in the third quarter. The start of the second wave of the pandemic also increased uncertainty in the markets, which was reflected in a slow start to projects and new investments, especially after the summer holidays. In this uncertain demand situation, we continued to implement the defensive approach that we were forced to adopt in the second quarter. This approach was again successful and our profitability was excellent for a third quarter considering the circumstances, in spite of a decrease in revenue.

In the prevailing market situation, we have had to slow down the execution of our strategy, but good defense of our market position and strong profitability also enabled investments in growth. We completed the acquisition of Tegema in the Netherlands in the third quarter. Tegema strengthens our expertise in production-related solutions and, combined with Etteplan’s automation and software expertise, this acquisition makes us an even stronger Industry 4.0 operator. Going forward, we will be able to act as an integrator in increasingly demanding production solutions and also deliver our customers production cells, which brings an interesting addition to our Engineering Solutions service area. We have also continued to develop our service offering in other service areas to create more value for our customers and strengthen our competitiveness when demand starts to grow again.

As the final quarter of the year began, our operating environment varied from one country to the next. The Chinese market was active and there were small signs of a recovery in the Central European and Swedish markets, but demand in Finland remained at a low level. As the second wave of the pandemic gathers momentum, it is again very difficult to estimate the development of the market.

Nevertheless, during the year we have proven our ability to adapt to changes in demand, even in a difficult market situation, and we believe that the good profitability will continue, which is why we specified our financial guidance for 2020.

We were also able to continue investments in future growth and consequently, I believe that Etteplan will return to the path of profitable growth once the pandemic eases up and the market situation improves.

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 October 29, 2020)

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

Previous 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.

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-September 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, October 29, 2020

Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-September 2020 in a conference call and a live webcast, held in English language, on October 29, 2020 starting at 2.30 p.m. Finnish time (EET).

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 56143321#. 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-q3-results. The webcast starts at 2.30 p.m. Finnish time (EET). A recording of the webcast will be available later at www.etteplan.com/investors.

Espoo, October 29, 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