ETTEPLAN OYJ Interim Report October 31, 2024, at 1.00 p.m.
ETTEPLAN Q3 2024: More difficult quarter than expected
Key points July-September 2024
· The Group's revenue was at the same level as the previous year at EUR 80.0
million (7-9/2023: EUR 80.0 million). At comparable exchange rates, revenue
decreased by 0.2 percent.
· Operating profit (EBITA) decreased by 53.8 percent and was EUR 2.9 (6.3)
million, or 3.7 (7.9) percent of revenue.
· Operating profit (EBIT) decreased by 71.3 percent and was EUR 1.4 (5.0)
million, or 1.8 (6.2) percent of revenue.
· Operating cash flow decreased and was EUR -0.3 (7.1) million.
· Basic earnings per share were EUR 0.00 (0.10).
· Etteplan released a profit warning on August 28, 2024, and a second profit
warning on October 15, 2024. According to the new estimate, the revenue is
estimated to be EUR 355-370 million and operating profit (EBIT) to be EUR 18-22
million. The factors behind the profit warnings are the sharper-than-expected
weakening of market demand and significant non-recurring costs.
Key points January-September 2024
· The Group's revenue increased by 1.9 percent and was EUR 269.7 million
(1-9/2023: EUR 264.8 million). At comparable exchange rates, revenue increased
by 1.6 percent.
· Operating profit (EBITA) decreased by 15.9 percent and was EUR 17.9 (21.3)
million, or 6.6 (8.1) percent of revenue.
· Operating profit (EBIT) decreased by 22.4 percent and was EUR 13.5 (17.3)
million, or 5.0 (6.5) percent of revenue.
· Operating cash flow decreased and was EUR 16.8 (23.0) million.
· Basic earnings per share were EUR 0.29 (0.43).
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
EUR 1,000 7-9/2024 7-9/2023 1-9/2024 1-9/2023 1-12/2023
Revenue 79,964 79,961 269,705 264,763 359,951
Operating 2,923 6,332 17,935 21,322 30,883
profit (EBITA)
EBITA, % 3.7 7.9 6.6 8.1 8.6
Operating 1,426 4,967 13,457 17,340 25,540
profit (EBIT)
EBIT, % 1.8 6.2 5.0 6.5 7.1
Basic earnings 0.00 0.10 0.29 0.43 0.66
per share, EUR
Equity ratio, % 40.2 39.3 40.2 39.3 40.9
Operating cash -0,261 7,087 16,767 22,985 35,571
flow
ROCE, % 3.3 10.0 9.2 12.2 13.3
Personnel at 3,870 4,010 3,870 4,010 3,902
end of the
period
President and CEO Juha Näkki:
Our business is suffering from the current investment slump, and the third
quarter was very difficult for us. The market situation weakened throughout the
review period, contrary to our expectations, and we had to lower our guidance
twice: first at the end of August and again in mid-October. New investment
projects were started at a very slow pace, and our customers focused mainly on
cost-saving measures.
Our revenue remained at the same level as the previous year due to acquisitions,
but in the difficult situation our revenue decreased organically. The market
situation was particularly difficult in Finland and Germany, but the demand
situation was also challenging elsewhere in Europe. In China, the trend of
purchasing services developed favorably, and we managed to significantly
increase the number of hours sold to the Chinese market.
As the market situation weakened, our operational efficiency declined and we had
to implement new adaptation measures to improve efficiency. At the same time, we
aimed to strengthen our ability to implement our new strategy for the strategic
period of 2025-2027, which is currently being prepared. Adaptation measures were
implemented in all of our service areas. In the Engineering Solutions service
area, we also decided to discontinue the Building Technology business in Germany
and focus on our core business. The adaptation measures caused significant non
-recurring costs that had a negative effect on our result. The correction of an
unfortunate accounting error in Sweden further lowered our profit level, and the
result was weak.
In spite of the difficult situation, we continued to invest in the development
of our business and service offering. The rapid development of technology, and
artificial intelligence in particular, makes it essential to continue developing
new solutions. We want to stay on the leading edge of development and help our
customers benefit from new technologies through our service solutions. This will
be a key part of our new strategy for 2025-2027, which is currently being
prepared and will be published in December 2024.
We no longer believe that the market situation will improve substantially this
year. We have implemented adaptation measures, and will implement new adaptation
measures in the fourth quarter, if necessary. These measures are painful, but
they help us ensure the restoration of profitability and, consequently, our
ability to invest in continued profitable growth when the market situation
improves.
Market outlook 2024
The most important factor affecting Etteplan's business is the global
development of the machinery and metal industry. The expansion of the conflict
in the Middle East has increased geopolitical tensions, which further increases
uncertainty in the markets. In addition, interest rates decreasing slower than
expected and generally declining order backlogs are affecting our customers'
willingness to invest and have further weakened the demand situation.
Investments related to the defense industry are continuing at a good level.
However, investments related to energy efficiency and accelerating the green
transition, which were previously at a good level, have also slowed slightly. We
expect the market situation to remain challenging throughout the rest of the
year.
Financial guidance 2024 (published on October 15, 2024)
Etteplan lowered its guidance on October 15, 2024, and August 28, 2024.
According to the current estimate, issued on October 15, 2024:
Revenue in 2024 is estimated to be EUR 355-370 (2023: 360.0) million, and
operating profit (EBIT) in 2024 is estimated to be EUR 18-22 (2023: 25.5)
million.
According to the estimate issued on August 28, 2024:
Revenue in 2024 is estimated to be EUR 360-375 (2023: 360.0) million, and
operating profit (EBIT) in 2024 is estimated to be EUR 24-27 (2023: 25.5)
million.
According to the estimate issued in connection with the Q2 interim report on
August 8, 2024:
Revenue in 2024 is estimated to be EUR 375-390 (2023: 360.0) million, and
operating profit (EBIT) in 2024 is estimated to be EUR 28-30 (2023: 25.5)
million.
Disclosure procedure
This stock exchange release is a summary of Etteplan's January-September 2024
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 (https://www.etteplan.com/investors).
Conference call and live webcast today, October 31, 2024
Etteplan's President and CEO Juha Näkki will present the Company's results for
January-September 2024 in a conference call and a live webcast, held in English
language, on October 31, 2024 starting at 2.30 p.m. Finnish time (EET).
Questions can be asked in Finnish and in English after the President and CEO's
presentation only through conference call connection. Participants must register
through this link
https://palvelu.flik.fi/teleconference/?id=50048366 (https://eur02.safelinks.prot
ection.outlook.com/?url=https%3A%2F%2Fpalvelu.flik.fi%2Fteleconference%2F%3Fid%3D
50048366&data=05%7C02%7CMervi.Suuronen%40etteplan.com%7C53898347680e4dd1b2bc08dce
e874c13%7C1f23d6d3b1584e45b7e17631cf28c804%7C0%7C0%7C638647512062794498%7CUnknown
%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D
%7C0%7C%7C%7C&sdata=OUSybhi4lNzK6qNWk4zJG1eu2iZ%2Faatwb%2FIpPqJ%2B6nE%3D&reserved
=0) 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/q3
-2024 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fetteplan
.videosync.fi%2Fq3
-2024&data=05%7C02%7CMervi.Suuronen%40etteplan.com%7C53898347680e4dd1b2bc08dcee87
4c13%7C1f23d6d3b1584e45b7e17631cf28c804%7C0%7C0%7C638647512062765465%7CUnknown%7C
TWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C
0%7C%7C%7C&sdata=Oi7tlGn0XDnoUoLAQrB1vt8uESnTfU0A5zXvWCA9T7I%3D&reserved=0). The
webcast starts at 2.30 p.m. Finnish time (EET). A recording of the webcast will
be later available at www.etteplan.com (https://www.etteplan.com/investors).
Espoo, October 31, 2024
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 (https://www.etteplan.com/investors).
DISTRIBUTION:
Nasdaq Helsinki
Major media
www.etteplan.com
Etteplan in brief
Etteplan is a growing technology service company with the purpose of bringing
people and technologies together to change things for the better. Together with
our customers, we are building a world where every system, process, and product
can be made smarter, more efficient, and more sustainable. Our customers include
world's leading companies in the manufacturing industry.
In 2023, we had a turnover of EUR 360.0 million and around 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 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F
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