FINANCIAL STATEMENT BULLETIN 1 JANUARY-3
ETTEPLAN OYJ STOCK EXCHANGE RELEASE 11 FEBRUARY 2004 10.00 A.M.
FINANCIAL STATEMENT BULLETIN 1 JANUARY-31 DECEMBER 2003
Consolidated turnover: EUR 51 million +36.9%
Operating profit: EUR 2.4 million -12.1%
Net profit: EUR 1.0 million -24.1%
Proposed dividend: EUR 0.55 per share
Etteplan continued to grow strongly in 2003. The turnover grew
mainly organically in consequence of the design functions
transferred to the Group, but also through an acquisition.
The turnover growth exceeded considerably the general growth
rate in the field, which was 2 %.
During the year Etteplan carried out three outsourcing projects
in Finland, in which the customer transferred its design
functions to Etteplan. In addition, the company acquired a
majority holding in its Swedish associated company. The number
of the Groups personnel grew by more than 200 employees, or by
30 %. The number of employees abroad has grown to 214. Main part
of the international organic growth has occurred in Germany.
The demand for industrial technology design services in 2003 was
in several areas weak and declined mildly in the last quarter of
the year. The demand situation was especially difficult in the
latter part of the year in the automotive industry and wood-
processing industrys machine and equipment markets. The order
book for other customer groups remained satisfactory.
During the report period Etteplan invested strongly in the
development of internal functions. The main objectives were
development of project follow-up, the improvement of total
quality in functions as well as the efficient exploiting of
fields of know-how. Due to exceptionally tight market situation
the profitability decreased from the previous year.
Turnover and result
The Etteplan Groups turnover grew by 37% on the previous year,
rising to EUR 51 million (37 million in 2002). The increase in
turnover was attributable both to organic growth, mainly the
outsourced units taken on, and the acquisition of a majority
holding in Swedish J.A. Produktutveckling AB.
Operating profit was EUR 2.4 million (2.7 million), or 4.7% of
turnover (7.4%). Operating profit decreased by 12% on the previous
year and the set targets were not reached. In the last quarter
of the year the operating profit was burdened by lump-sum
expenditures, which were related to efficiency boosting and
rearrangements of operations especially in Sweden. Profit for
the financial period before extraordinary items and taxes was
EUR 2.4 million (2.8 million). The net profit was EUR 1.0 million
EUR 1.3 million).
Earnings per share were EUR 0.23 (0.30). Equity per share was
EUR 2.89 (EUR 2.90). The return on investment was 16.1% (19.7%)
and the return on equity 9.6% (12.6%).
Business Operations
Etteplan acts as a partner of large and medium-sized inter-
nationally operating industrial companies, carrying out both
separate design projects as well as continuous product development
and equipment design. The Groups design services consist of
1) machine technology and mechatronics design, 2) automation and
electrical design as well as 3) electronics and software design.
The customer base comprises equipment manufacturers and end-users
in the wood-processing -industry as well as the automotive,
lifting and hoisting equipment, process and electronics industries.
Operations have been divided into four different business areas,
which are not separate business units. The estimated breakdown of
turnover by business area was the following at the end of the
financial year:
Production Lines 38%
Lifting and Hoisting 25%
Pulp and Paper 20%
Electronics 17%
The market situation for the Production Lines business area was
difficult during the report period. Demand for the services of the
Lifting and Hoisting business area remained stable. The market for
the Pulp and Paper as well as Electronics business areas were
unstable and the demand weakened especially in the latter half of
the year. Demand for engineering design services in Sweden was
poor due to weakened prospects in the automotive and electronics
industry. The situation improved, however by the year-end. The set
targets were clearly not reached. In Germany the business
operations have been growing and new customers have been secured.
The set targets were exceeded. In Italy the demand was weak during
the whole year and the profit target was not reached.
Achieving a good competitive situation has called for strong
inputs into developing engineering design services as well as
improving internal efficiency. The strengths of Etteplans
operations are an efficient design process, high-quality
operations in line with an ISO-9000 system and capable staff.
Thanks to these strengths, Etteplan has become a strategic
partner of a number of well-known Finnish blue-chip corporations
both in Finland and abroad.
Major events in 2003
In January 47 employees of Rautaruukki Steels Engineering unit in
Oulu transferred to the service of Etteplan Oyj and the operations
of the Oulu unit were combined with Etteplans Oulu regional
office.
Also in January Etteplan Production Lines Oy, which was
established by Etteplan Oyj and Nextrom Oy, started up operations
in Vantaa. 53 Nextrom employees transferred to the new company.
Etteplan Production Lines Oy provides engineering design and
project services that are required for developing and fabricating
new industrial production lines as well as in automation design.
In May Etteplan signed a Letter of Intent with J.A. Produkt-
utveckling AB of Sweden concerning the purchase of an additional
40 per cent stake in the company through an exchange of shares.
In June nine design engineers from the Konecranes Groups KCI
Hoists unit in Hämeenlinna transferred to the employ of Etteplan
Oyj. At the same time, the companies agreed on partnership-based
cooperation.
Also in June Etteplan Oyj agreed with Nextrom Oy on the transfer
of nine design engineers to Etteplan Oyjs payroll. The agreement
was a natural continuation of the partnership-based cooperation,
which the companies started right from the beginning of the year.
In August, in accordance with the Letter of Intent signed in May,
Etteplan Oyj acquired a 40 per cent additional stake in Swedish
J.A. Produktutveckling AB, bringing Etteplans holding to 75 per
cent. The Groups total personnel strength rose to 938 employees.
In December the Group combined its design functions in the Greater
Helsinki area into a single unit in Vantaa
Personnel
The operations and number of personnel of the Etteplan Group have
grown steadily. During the financial year the Group employed an
average of 876 people (660), an increase of 33%. At the end of
the period (31 December 2003) the payroll numbered 936 employees
(723). The increases in staff were mainly due to outsourcing-
driven organic growth as well as acquisitions.
Capital expenditures
The Groups total capital expenditures amounted to EUR 2.8 million
(4.5 million). The largest individual capital expenditure was the
purchase of a holding in J.A. Produktutveckling AB. Other
investments went mainly for the purchase of computer software and
hardware as well as for the development of information networks
and a project management system.
Financial position
Etteplans financial position remained strong. Total assets at
31 December 2003 stood at EUR 26.1 million (EUR 22.6 million), of
which cash and cash equivalents as well as securities held as
financial fixed assets totalled EUR 6.6 million (EUR 7.2 million).
The Groups interest-bearing liabilities at the end of the period
totalled EUR 1.2 million (1.0 million). The equity ratio was
57.2% (63.4%). Liquidity was good throughout the report period.
Shares, price trend and share buy-back
The Groups share capital at 31 December 2003 was EUR 427,460.80
and the number of shares outstanding was 4,274,608.
The number of Etteplan Oyj shares traded during the financial year
was 745,775, to a total value of EUR 3.3 million. The share price
registered a low of EUR 2.99, a high of EUR 6.48 and the average
price was EUR 4.41. The Groups market capitalization at
31 December 2003 was EUR 25.0 million and it had 1,378
shareholders.
During the financial year the company bought back 104,000 of its
own shares and has transferred in total 128,000 shares in the
J.A. Productutveckling AB share transaction. At the end of the
financial year the company held 100 of its own shares (treasury
shares) to a total value of EUR 481,00.
Stock options and share issue authorizations
The Annual General Meeting, held on 26 March 2003, authorized the
Board of Directors to decide within one year from the Annual
General Meeting on the floating of one or more issues of
convertible bonds and/or the granting of stock options and/or to
decide on increasing the share capital by offering in one or more
instalments a maximum of 854,921 shares with an accounting counter
value of EUR 0.10 at a price determined by the Board of Directors
and otherwise on the terms and conditions decided by the Board
of Directors.
The Annual General Meeting further authorized the Board of
Directors to decide on buying back the companys own shares in
one or more instalments such that the company can buy back a
maximum of 213,730 of the companys shares, having an accounting
counter value of EUR 0.10, with distributable funds in a
proportion other than shareholders existing holdings and to
decide, on the basis of the authorization according to the
resolution, on transferring the companys own shares thus bought
back in one or several instalments. The authorization granted to
the Board of Directors comprises the right to transfer a maximum
of 213,730 shares with an accounting counter value of EUR 0.10
such that the aggregate accounting counter value of the shares
to be transferred and the votes conferred by them is a maximum
of five (5) per cent of the companys share capital and the total
voting rights conferred by the shares.
All the companys permanently employed staff are covered by
Etteplans stock option programme.
Board of Directors, CEO and Auditors
The members of Etteplan Oyjs Board of Directors during the report
period were Tapani Mönkkönen, Chairman, the other members being
Tapani Tuori, Matti Virtaala, Ritva Mönkkönen and Heikki Hornborg.
The companys CEO has been Heikki Hornborg, M. Sc. (Eng.).
The companys auditor was the firm of independent public
accountants PricewaterhouseCoopers Oy, with Mika Kaarisalo,
Authorized Public Accountant, acting as chief auditor.
Board of Directors proposal for the disposal of profits
The Groups distributable shareholders equity according to the
balance sheet at 31 December 2003 is EUR 6,4 million and the
parent companys distributable shareholders equity is EUR 5,6
million.
The Board of Directors is proposing to the Annual General Meeting
on 30 March 2004 that on the dividend payout date a dividend
of EUR 0.55 per share be paid on the companys externally owned
shares and that the remainder be transferred to retained earnings.
In accordance with the Board of Directors proposal, the record
date for the dividend payout is 2 April 2004 and the dividend will
be paid on 13 April 2004.
Adoption of the IFRS Standards
Preparations to adopt the International Financial Reporting
Standards (IFRS) have proceeded according to plan. Etteplan will
report according to the IFRS Standards from the beginning of 2005.
Figures for 2004 will be announced according to IFRS Standards in
the spring of 2005. According to an initial survey, the change in
accounting principles will not have a significant effect on the
balance sheet or result.
Major events after the close of the financial year
The functions of the Groups EMC Laboratory were incorporated and
the new company began operations on 1 January 2004 under the name
NATLABS, Nordic Accredited Testing Laboratories Oy. The laboratory
offers electromagnetic interference measurements to both electro-
nics industry as well as machine and equipment manufacturers.
Outlook for the future
In the main market areas, especially in the Nordic Countries, the
market situation for Etteplans customers has improved during the
last months. Industrial investments have been started in several
countries among others in China and United States of America. The
company has received several new assignments at the end of 2003
and in the beginning of 2004. The companys order book as well
as offer stock is clearly better than in the last quarter of 2003.
The investments in project management as well as in the better
steering of workload give good potential to carry out the most
important near-term target, the improvement of the profitability.
Etteplan has expanded its customer base substantially during the
past year. The efficient boosting as well as the made investments
give good position to increase the volume of operations.
Etteplan will continue its efforts to strengthen and expand all
four of its business areas, both in Finland and abroad. The
principal means of accomplishing this are training, recruitment,
customers outsourcing projects and acquisitions.
Based on the recovered market situation and the made internal
efficient improvement actions, the management of the company
believes that the result for the entire financial year 2004 will
be clearly better than the previous one.
Hollola, 11 February, 2004
Etteplan Oyj
Board of Directors
For additional information, contact: CEO Heikki Hornborg,
tel. +358 3 872 9011, GSM +358 400 873 063.
The figures are unaudited.
DISTRIBUTION: Helsinki Exchanges
Principal media
www.etteplan.com
CONSOLIDATED PROFIT AND LOSS ACCOUNT (EUR 1 000)
1.1.-31.12.03 1.1.-31.12.02
TURNOVER 50 662 37 011
Variation in work in progress 110 196
Other operating income 134 66
Materials and services -1 087 -347
Staff expenses -38 312 -26 387
Depreciation and amortisation
according to plan -1 791 -1 744
Other operating expenses -7 193 -5 852
Share of losses from
Participating interests -128 -219
OPERATING PROFIT 2 395 2 724
" % 4,7 7,4
Financial income and expenses 49 29
PROFIT BEFORE EXTRAORDINARY ITEMS 2 444 2 753
Extraordinary items 0 0
PROFIT BEFORE APPROPRIATIONS AND TAXES 2 444 2 753
Income taxes -1 054 -1 020
Change in deferred tax liability -11 -29
Minority interest -416 -434
NET PROFIT FOR THE FINANCIAL YEAR 964 1 270
" % 1,9 3,4
CONSOLIDATED BALANCE SHEET (EUR 1 000)
1.1.-31.12.03 1.1.-31.12.02
ASSETS
NON-CURRENT ASSETS
Intangible assets 4 308 2 343
Tangible assets 3 361 3 054
Own shares 0 139
Other investments 443 2 381
NON-CURRENT ASSETS, TOTAL 8 112 7 917
CURRENT ASSETS
Stocks 843 493
Current receivables 10 518 7 027
Marketable securities 796 1 497
Cash and cash equivalent 5 810 5 663
CURRENT ASSETS, TOTAL 17 968 14 680
ASSETS, TOTAL 26 080 22 597
SHAREHOLDERS EQUITY AND LIABILITIES
SHAREHOLDERS EQUITY
Share capital 427 427
Share premium account 5 058 5 058
Reserve for own shares 0 139
Retained earnings 5 923 5 565
Net profit for the financial year 964 1 270
SHAREHOLDERS EQUITY, TOTAL 12 372 12 460
MINORITY INTERESTS 2 194 1 857
LIABILITIES
Deferred tax liabilities 198 188
Long-term liabilities 1 065 796
Current liabilities 10 249 7 297
LIABILITIES, TOTAL 11 513 8 281
SHAREHOLDERS EQUITY AND
LIABILITIES, TOTAL 26 080 22 597
KEY FIGURES FOR ETTEPLAN GROUP (EUR 1 000)
1.1.-31.12.03 1.1.-31.12.02 Change
for prev.
year
Turnover 50 662 37 011 36,9 %
Operating profit 2 395 2 724 -12,1 %
% of turnover 4,7 % 7,4 %
Profit before extra-
ordinary items 2 444 2 753 -11,2 %
Net profit for the period 964 1 270 -24,1 %
Return on investment, % 16,1 19,7
Return on equity, % 9,6 12,6
Equity ratio, % 57,2 63,4
Gross interest-bearing loans 1 197 1 006 19,1 %
Dept-equity ratio, % -37,1 -43,4
Total balance 26 080 22 597 15,4 %
Gross investments 2 772 4 497 -38,4 %
Earnings per share 0,23 0,30 -23,3 %
Equity per share 2,89 2,90 -0,3 %
Personnel at end of period 936 723 29,5 %
Personnel, average 876 660 32,7 %
CONSOLIDATED CASH FLOW STATEMENT (EUR 1 000)
1.1.-31.12.03 1.1.-31.12.02
OPERATING CASH FLOW
Cash receipts from customers 48 063 37 933
Other operating income 109 66
Operating expenses paid 44 117 32 050
OPERATING CASH FLOW BEFORE
FINANCIAL ITEMS AND TAXES 4 055 5 950
Interest and payment paid for
financial expenses 59 129
Interest received 98 153
Dividend received 11 5
Income taxes paid 1 054 1 020
OPERATING CASH FLOW (A) 3 051 4 958
INVESTMENT CASH FLOW
Investment in tangible and
intangible assets 2 759 2 346
Sales of tangible and
intangible assets 203 111
Investments to other investments 13 1 463
INVESTMENT CASH FLOW (B) -2 569 -3 697
FINANCING CASH FLOW
Purchase of own shares 0 64
Short-term loans, decrease 78 0
Long-term loans, increase 269 101
Dividends paid and other
profit distribution 1 227 1 365
FINANCING CASH FLOW (C) -1 036 -1 329
VARIATION IN WORKING CAPITAL (A + B + C)
INCREASE (+)/ DECREASE (-) -554 -68
ASSETS IN THE BEGINNING OF
THE FINANCIAL YEAR 7 160 7 227
ASSETS AT THE END OFTHE FINANCIAL YEAR 6 606 7 160
