FINANCIAL STATEMENT BULLETIN 1 JANUARY –
Stock exchange release – Published: 12.02.2003 9:30:12
FINANCIAL STATEMENT BULLETIN 1 JANUARY - 31 DECEMBER 2002
Consolidated turnover: EUR 37 million + 9.4%
Operating profit: EUR 2.7 million -40.7%
Net profit: EUR 1.3 million -55.3%
Proposed dividend: EUR 0.25 per share
Within industrial technology design - Etteplans field of
operations - 2002 was a year of pronounced structural change.
The market situation was tight throughout the year and industry
made operational arrangements concerning design activities,
especially outsourcing. For a service company like Etteplan, the
year was characterized by the dual aspects of pressure on
profitability due to the tight market situation and opportunities
afforded by M&A arrangements.
During the year Etteplan carried out three outsourcing projects
in Finland and one in Germany. In the first phase, these meant
the transfer to the Groups employ of about 150 design engineers.
In addition, the company acquired a majority holding in an approx.
50-employee engineering design company in Finland, a majority
holding in a fairly small (15 employees) engineering design
company in northern Italy and a 35% stake in a 130-employee
electronics design company in Sweden. All in all, the Groups
personnel grew by more than 350 employees, counting associated
companies, increasing its total staff by about 60%. The number
of employees abroad has grown to 206, including the joint
ventures staff. Implementation of the expansion arrangements
took place largely in the latter part of the year, and they will
not have a major impact on turnover until 2003.
Turnover in 2002 showed moderate growth on the previous year.
Demand fluctuated sharply in different fields. Thanks to
Etteplans operational model, flexibility and network solutions,
which have been beefed up through investments over the past
years, the company succeeded in evening out the ups and downs
in the workload of individual sites and sectors. Despite an
exceptionally tough market situation, profitability was
maintained at a satisfactory level, though it did fall
substantially compared with the previous year. The focus of
operations was on building future capabilities in line with
company strategy, whilst exploiting the structural changes in
the industry.
Turnover and result
The Etteplan Groups turnover grew by 9.4% on the previous year,
rising to EUR 37 million (33.8 million in 2001). The increase in
turnover was attributable to organic growth, the outsourced units
taken on and acquisitions. Earnings were below last years figure
but were satisfactory in view of the weak demand in the market.
Operating profit was EUR 2.7 million (4.6 million), or 7.4% of
turnover (13.6%). Profit for the financial period before extra-
ordinary items and taxes was EUR 2.8 million (4.8 million).
The consolidated financial statements show a net profit of
EUR 1.3 million (EUR 2.8 million).
Earnings per share were EUR 0.30 (0.69). Equity per share was
EUR 2.90 (EUR 2.89). The return on investment was 19.7% (37.8%)
and the return on equity 12.6% (28.0%).
Fourth-quarter turnover was EUR 10.7 million (9.4 million) and
operating profit was EUR 0.8 million (1.1 million).
Business Operations
Etteplan acts as a partner of large and medium-sized inter-
nationally operating industrial companies, carrying out entire
design projects or 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 32%
Pulp and Paper 27%
Lifting and Hoisting Equipment 21%
Electronics 20%
The Production Lines business had satisfactory overall demand
during the report period. Demand for the services of the Pulp
and Paper as well as Lifting and Hoisting Equipment business
areas remained stable. The market of the Electronics business
fluctuated sharply. Thanks to the expansion of services, the
overall situation held up fairly well. Demand for engineering
design services in Sweden was weak in the first part of the year
but improved after the summer. In Germany and Italy there was
stable demand and the units in both countries reached their
budgeted earnings.
Achieving a good competitive situation has called for strong
inputs into developing engineering design services, improving
internal efficiency and personnel recruitment. 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.
Major events in 2002
In January Etteplan acquired a 35% holding in the Swedish
engineering office JA Produktutveckling AB. The acquisition
bolsters the Etteplan Groups operations in Swedens industrial
technology market and opens up for the Group the possibility
of exporting Finnish engineering expertise to Swedens automotive
industry.
In February the company acquired a 51% holding in Di & Esse
S.r.l. of Italy. The company primarily serves the Groups
existing internationally operating customer base.
In June Etteplan acquired a 60% holding in Insinööritoimisto
Keskilinja Oy, which operates in Vaajakoski. The deal
strengthened the companys expertise, particularly within
machinery and equipment for the wood-processing industry.
June saw the founding, together with Perlos Corporation, of the
joint venture EPE Design Oy, which took on 14 Perlos employees.
The joint venture was established for the purpose of producing
design services for developing and manufacturing new products.
In October Konette GmbH, which is part of the Etteplan Group,
concluded a cooperation agreement with Kone GmbH. Under the
agreement, 33 employees of Kones escalator unit in Germany
joined the Etteplan Group. The agreement is a natural conti-
nuation of the companies smooth cooperation in Finland.
A cooperation agreement was signed with Rautaruukki Oyj in
November. According to the agreement Rautaruukki will purchase
a substantial part of its capital expenditure-related design
and project management services from Etteplan. Under the terms
of the agreement 47 employees of Rautaruukki Steel Engineerings
Oulu location will join Etteplans staff on 1 January 2003.
The joint venture Etteplan Production Lines Oy was founded
together with Nextrom Oy in December, whereby 53 Nextrom
employees joined the new company. The joint venture will
provide engineering design and project services that are
required for developing and fabricating new industrial
production lines.
In December the company signed an agreement on the automation
and electrical design for a waste water treatment plant in
St Petersburg. The deal is the companys largest automation
and electrical design assignment so far.
Personnel
The operations and number of personnel of the Etteplan Group have
grown steadily. During the financial year the Group employed an
average of 660 people (561), an increase of 17.6%. At the end of
the period (31 December 2002) the payroll numbered 723 employees
(583). Counting the associated companies, the number of employees
was 837. The increases in staff were due mainly to both
outsourcing-driven organic growth and to acquisitions.
Capital expenditures
The Groups total capital expenditures amounted to EUR 4.5
million (2.7 million). The largest capital expenditure was the
purchase of a holding in JA 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 2002 stood at EUR 22.6 million (EUR 20.0 million),
of which cash and cash equivalents as well as securities held
as financial fixed assets totalled EUR 7.2 million (EUR 7.2
million). The Groups interest-bearing liabilities at the end
of the period totalled EUR 1.0 million (0.9 million). The
equity ratio was 63.4% (65.0%). Liquidity was good throughout
the report period.
Shares, price trend and share buy-back
In June the company increased its share capital through a
directed share issue in accordance with an authorization
granted by the Annual General Meeting. The share issue was
connected with the purchase of shares in Insinööritoimisto
Keskilinja Oy, whereby the selling shareholders were offered
162,108 new shares with a total accounting countervalue of
EUR 16,210.80 through a directed issue. The subscription
price of the shares was determined on the basis of the
companies fair values. The share capital at 31 December 2002
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 390,375, to a total value of EUR 2.1 million. The
share price registered a low of EUR 3.90, a high of EUR 6.44
and the average price was EUR 5.32. The Groups market
capitalization at 31 December 2002 was EUR 17.3 million and
it had 1,267 shareholders.
During the financial year the company bought back 12,000 of
its own shares. At the end of the financial year the company
held 24,100 of its own shares (treasury shares) to a total
value of EUR 139,418.34.
Etteplan has put into use the Insider Guidelines issued by
Helsinki Exchanges.
Stock options and share issue authorizations
The Annual General Meeting, held on 26 March 2002, 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 822,500 shares with
an accounting countervalue 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 205,625 of the companys shares, having an
accounting countervalue 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 205,625 shares with an
accounting countervalue of EUR 0.10 such that the aggregate
accounting countervalue 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, President and 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 President and 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 2002 is EUR 6.8 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 26 March 2003 that on the dividend payout date a
dividend of EUR 0.25 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 31 March
2003 and the dividend will be paid on 7 April 2003.
Major events after the close of the financial year
In accordance with previously made agreements, the company
Etteplan Production Lines Oy, which is jointly owned by
Nextrom Oy and Etteplan Oyj (Etteplans holding is 81%)
began operating on 1 January 2003. The Etteplan Metals
Processing unit, which put 47 Rautaruukki Oyj employees on
its payroll, started up operations in Oulu at the beginning
of the year.
Outlook for the future
Etteplan has expanded its customer base substantially during
the past year, at the same time fortifying its customer
relationships. As a result of efficiency boosting and a wider
customer base, the company is well placed to increase its
volume of operations and earnings. Steps have been taken to
even out the ups and downs of workloads, and this means that
the company has good potential for operating flexibly and
raising its profitability.
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.
The market situation is expected to remain tight until the
global factors of uncertainty are alleviated. The company will
maintain its strong competitiveness thanks to the market
position it has achieved and to its increased volume of
operations. This means that Etteplan has good possibilities
of increasing both its turnover and operating profit in the
first quarter, compared with the same period a year ago.
Hollola, 12 February, 2003
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.-31.12.02 1.1.-31.12.01
TURNOVER 37 011 33 821
Variation in work in progress 196 184
Other operating income 66 41
Materials and services -347 -348
Staff expenses -26 387 -22 465
Depreciation and amortisation
according to plan -1 744 -1 483
Other operating expenses -5 852 -5 152
Share of losses from
Participating interests -219 0
OPERATING PROFIT 2 724 4 597
" % 7,4 13,6
Financial income and expenses 29 211
PROFIT BEFORE EXTRAORDINARY ITEMS 2 753 4 809
Extraordinary items 0 0
PROFIT BEFORE APPROPRIATIONS AND TAXES 2 753 4 809
Income taxes -1 020 -1 435
Change in deferred tax liability -29 -45
Minority interest -434 -490
NET PROFIT FOR THE FINANCIAL YEAR 1 270 2 838
" % 3,4 8,4
CONSOLIDATED BALANCE SHEET (EUR 1 000)
1.1.-31.12.02 1.1.-31.12.01
ASSETS
NON-CURRENT ASSETS
Intangible assets 2 343 2 353
Tangible assets 3 054 2 559
Own shares 139 75
Other investments 2 381 578
NON-CURRENT ASSETS, TOTAL 7 917 5 566
CURRENT ASSETS
Stocks 493 252
Current receivables 7 027 6 998
Marketable securities 1 497 0
Cash and cash equivalent 5 663 7 227
CURRENT ASSETS, TOTAL 14 680 14 478
ASSETS, TOTAL 22 597 20 043
SHAREHOLDERS EQUITY AND LIABILITIES
SHAREHOLDERS EQUITY
Share capital 427 411
Share premium account 5 058 4 599
Reserve for own shares 139 75
Retained earnings 5 565 4 006
Net profit for the financial year 1 270 2 838
SHAREHOLDERS EQUITY, TOTAL 12 460 11 930
MINORITY INTERESTS 1 857 1 063
LIABILITIES
Deferred tax liabilities 188 159
Long-term liabilities 796 739
Current liabilities 7 297 6 152
LIABILITIES, TOTAL 8 281 7 050
SHAREHOLDERS EQUITY AND
LIABILITIES, TOTAL 22 597 20 043
KEY FIGURES FOR ETTEPLAN GROUP (EUR 1 000)
1.1.-31.12.02 1.1.-31.12.01 Change
for prev.
year
Turnover 37 011 33 821 9,4 %
Operating profit 2 724 4 597 -40,7 %
% of turnover 7,4 % 13,6 %
Profit before extra-
ordinary items 2 753 4 809 -42,7 %
Net profit for the period 1 270 2 838 -55,3 %
Return on investment, % 19,7 37,8
Return on equity, % 12,6 28,0
Equity ratio, % 63,4 65,0
Gross interest-bearing loans 1 006 905 11,1 %
Dept-equity ratio, % -43,4 -48,9
Total balance 22 597 20 043 12,7 %
Gross investments 4 497 2 677 68,0 %
Earnings per share 0,30 0,69 -56,0 %
Equity per share 2,90 2,89 0,3 %
Personnel at end of period 723 583 24,0 %
Personnel, average 660 561 17,6 %
CONSOLIDATED CASH FLOW STATEMENT (EUR 1 000)
1.1.-31.12.02 1.1.-31.12.01
OPERATING CASH FLOW
Cash receipts from customers 37 933 32 853
Other operating income 66 41
Operating expenses paid 32 050 27 053
OPERATING CASH FLOW BEFORE
FINANCIAL ITEMS AND TAXES 5 950 5 840
Interest and payment paid for
financial expenses 129 63
Interest received 153 272
Dividend received 5 3
Income taxes paid 1 020 1 435
OPERATING CASH FLOW (A) 4 958 4 617
INVESTMENT CASH FLOW
Investment in tangible and
intangible assets 2 346 2 448
Sales of tangible and
intangible assets 111 64
Investments to other investments 1 463 378
INVESTMENT CASH FLOW (B) -3 697 -2 762
FINANCING CASH FLOW
Purchase of own shares 64 75
Long-term loans, decrease -101 136
Dividends paid and other
profit distribution 1 365 1 180
FINANCING CASH FLOW (C) -1 329 -1 391
VARIATION IN WORKING CAPITAL (A + B + C)
INCREASE (+)/ DECREASE (-) -68 464
ASSETS IN THE BEGINNING OF
THE FINANCIAL YEAR 7 227 6 764
ASSETS AT THE END OFTHE FINANCIAL YEAR 7 160 7 227
