ETTEPLAN OYJ: FINANCIAL STATEMENT BULLETIN 1 JANUARY – 31 DECEMBER 2004
Stock exchange release – Published: 17.02.2005 10:00:00
FINANCIAL STATEMENT BULLETIN 1 JANUARY-31 DECEMBER 2004
Consolidated turnover: EUR 61.6 million + 22%
Operating profit: EUR 4.7 million + 98%
Net profit: EUR 2.6 million + 167%
Earnings per share: EUR 0.60 + 161%
Proposed dividend: EUR 0.30 per share
According to company's main object Etteplan continued to grow
strongly and profitably in 2004. The turnover grew mainly
organically in consequence of the design functions transferred
to the Group, but also through acquisitions.
During the year Etteplan carried out four outsourcing projects,
in which the customer transferred its' design functions to Etteplan.
Three of these outsourcings were carried out in Finland and one
in Italy. In addition, the company acquired a 70 % majority stake
in Swedish Timatec AB and increased its' holding in its' two Finnish
and one Italian subsidiary companies. The number of the Group's
personnel abroad grew to 278.
The demand for industrial technology design services in 2004
normalized at the year-end. The demand situation improved in all
market areas in both Etteplan's business segments Delivery Design
and Product Development. The company made significant openings
among others in automotive and processing industry.
During the report period Etteplan invested further strongly in
the development of internal functions. The main objectives were
effective use of office network, work load balancing and management
of international design assignments by training.
Turnover and result
The Etteplan Group's turnover grew significantly compared to the
previous year. The turnover grew 21.5 % to EUR 61.6 million
(50.7 million in 2003). Delivery Design represented 59 % and
Product Development 41 % of Group turnover. The increase in turnover
was attributable both to organic growth, mainly the outsourced units
taken on, and the acquisitions of majority holdings in Swedish
Timatec AB (in 2004) and J.A. Produktutveckling AB (in 2003).
Operating profit was EUR 4.7 million (2.4 million), or 7.7% of
turnover (4.7%). Operating profit increased by 98% on the previous
year. Profit for the financial period before extraordinary items
and taxes was EUR 4.8 million (2.4 million). The net profit was
EUR 2.6 million (EUR 1.0 million). To result improvement effected
in addition to the improvement in market situation the successful
acquisitions and outsourcing takeovers as well as boosting of
business operations.
Earnings per share were EUR 0.60 (0.23). Equity per share was
EUR 2.98 (EUR 2.89). The return on investment was 31.0% (16.1%)
and the return on equity 22.0% (9.6%).
Business operations
Etteplan operates as a partner of large and medium-sized
internationally operating industrial companies, providing
industrial engineering design services. The Group's design
services are divided in two segments: Delivery Design and
Product Development.
The Delivery Design segment provides services for the design of
machinery, devices as well as production facilities. Mechanical,
electrical, automation and plant design and commissioning services
are provided for project and equipment suppliers as well as for plant
owners and operators. The Product Development segment provides design
services for product development. The services are based on long-term
partnerships with customers and are aimed to ensure the customer's
competitiveness in the future. In addition the company has an
accredited laboratory which is specialized in electro-magnetic
disturbance measurements. Etteplan's customer base comprises equipment
manufacturers and end-users in the wood-processing industry as well as
the process, automotive, lifting and hoisting equipment and electronics
industries.
The market situation for the Delivery Design segment improved in 2004
and the volume of orders increased. During 2004 also the number of
assignments in the Product Development segment has been increasing.
Achieving a good competitive situation has called for strong input
into developing engineering design services as well as improving
internal efficiency. The strengths of Etteplan's operations are
efficient design process, high-quality operations in line with an
ISO-9000 system and capable staff.
Major events in 2004
In January the functions of Etteplan Oyj's EMC Laboratory were
incorporated and the new company began operations on 1 January 2004
under the name NATLABS Oy.
In March Etteplan Oyj's Annual General Meeting passed a resolution,
in accordance with the proposal of the Board of Directors, to pay a
dividend of EUR 0.55 per share for the 2003 financial year and
Authorized the Board of Directors to increase the share capital
through a rights issue as well as to purchase the company's own
shares and to transfer them.
In April Etteplan and MacGREGOR (FIN) Oy signed a framework agreement
on engineering design services for ship lift shafts.
In June Etteplan acquired a 70 % majority stake in the Swedish
Timatec AB. The company, which operates in Karlstad, employs 15 people
and provides mechanical and automation design services especially for
machinery and device manufacturers in the wood processing industry.
Etteplan increased in June its share of ownership in Konette Design
Center Oy from 60 % to 81 %. The business acquisition is in line with
the ownership strategy agreed when Konette Design Center Oy was
established in 1999.
Di&Esse Etteplan Srl in Italy and Metso Paper Como S.p.A, member of
the Metso Corporation, signed in June a cooperation agreement.
Eighteen design engineers from Metso Paper Como transferred to the
service of Di&Esse Etteplan. Concurrently Etteplan Oyj increased its
share of ownership in Di&Esse Etteplan to 70 %.
Further in June Etteplan Oyj and Shanghai Nextrom Machinery Manufacturing
Co., Ltd. agreed on establishing a joint venture in Shanghai, China.
The Etteplan Group will have an 87.5 % controlling interest in the
company and Shanghai Nextrom Machinery Manufacturing Co., Ltd. 12.5 %.
Etteplan and Sulzer Pumps Finland Oy signed a cooperation agreement
in June. According to the agreement Etteplan provides design services
such as agitator related design to Sulzer Pumps Finland Oy.
Also in June Etteplan agreed with Nokian Tyres plc and Lemcon Ltd, a
subsidiary of Lemminkäinen Group, on providing design services for the
tyre plant in Vsevolozhsk, near St. Petersburg.
In July Etteplan Oyj raised its share capital in order to acquire the
controlling interest in Timatec AB. Share capital after this increase
amounted to EUR 434,245.00.
The Etteplan and Nextrom joint venture in Shanghai, China, began
operations in August.
In September six design engineers from the Salo unit of Sulzer Pumps
Finland Oy transferred to Etteplan.
Also in September Etteplan and Oy Sisu Auto Ab signed a cooperation
agreement for design and project management services.
In October Etteplan established a regional office in Karjaa; eleven
design engineers from the product development department at the Sisu
Auto Karjaa plant transferred there.
In December Etteplan made an agreement with Metso Paper Oy on the
transfer to Etteplan of the mechanical head box engineering design
business operations at the Metso Paper Karhula unit. Six design
engineers from the Karhula unit transferred to Etteplan on
1 January 2005.
Further in December Etteplan Oyj increased its holdings in
Insinööritoimisto Keskilinja Oy from 60% to 100%. Keskilinja employs
46 people. Based in Vaajakoski and Lappeenranta, the company provides
mechanical and automation design services especially for the machinery
and device manufacturers in the wood processing industry.
Personnel
The operations and number of personnel of the Etteplan Group
have grown steadily. During the financial year the Group employed
an average of 965 people (876), an increase of 10%. At the end of
the period (31 December 2004) the payroll numbered 1 049 employees
(936). The increases in staff were mainly due to outsourcing-driven
organic growth as well as acquisitions.
Capital expenditures
The Group's total capital expenditures amounted to EUR 2.4 million
(2.8 million). The main part of capital expenditures were directed
to increase of shareholding in subsidiary companies as well as for
the expansion of business operations.
Financial position
Etteplan's financial position remained strong. Total assets at
31 December 2004 stood at EUR 28.1 million (EUR 26.1 million),
of which cash and cash equivalents as well as securities held as
financial fixed assets totalled EUR 6.6 million (EUR 6.6 million).
The Group's interest-bearing liabilities at the end of the period
totalled EUR 1.3 million (1.2 million). The equity ratio was 52.1%
(57.2%). Liquidity was good throughout the report period.
Shares, price trend and share buy-back
The Group's share capital at 31 December 2004 was EUR 434,245 and
the number of shares outstanding was 4,342,450.
The number of Etteplan Oyj's shares traded during the financial year
was 1,311,822, to a total value of EUR 8.9 million. The share price
registered a low of EUR 5.50, a high of EUR 8.25 and the average
price was EUR 6.31. The Group's market capitalization at 31 December
2004 was EUR 35.8 million and it had 1,363 shareholders.
During the financial year the company has not bought back its own
shares nor transferred them. 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 30 March 2004, 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 company's own shares in one or more
instalments such that the company can buy back a maximum of 213,730
of the company's 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
company's 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 company's share capital and
the total voting rights conferred by the shares.
Etteplan Oyj increased its' share capital as a consequence of the
agreement made on 10 June 2004 to acquire a majority stake in the
Timatec AB. The new shares were entered into Trade Register on
20 July 2004. The amount of share capital increase is 6.784,20 euros
and the total amount of the new share capital after the increase
is 434.245,00 euros. In the direct share issue the total number
67.842 of new shares were tradable from 21 July 2004 onwards.
All the company's permanently employed staff were covered by
Etteplan's stock option programme until 31 January 2005.
Board of Directors, CEO and Auditors
The members of Etteplan Oyj's Board of Directors during the report
period were Tapani Mönkkönen, Chairman, the other members being
Tapio Hakakari, Heikki Hornborg, Tapani Tuori and Matti Virtaala.
The company's CEO has been Heikki Hornborg, M. Sc. (Eng.).
The company's 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 Group's distributable shareholders' equity according to the
balance sheet at 31 December 2004 is EUR 6,7 million and the parent
company's distributable shareholders' equity is EUR 5,9 million.
The Board of Directors is proposing to the Annual General Meeting
on 23 March 2005 that on the dividend payout date a dividend of
EUR 0.30 per share be paid on the company's 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 30 March 2005 and the dividend will be
paid on 6 April 2005.
Adoption of the IFRS Standards
Preparations to adopt the International Financial Reporting
Standards (IFRS) have proceeded according to plan. Etteplan has
adopted the IFRS Standards from the beginning of 2005. The company
will publish the opening balance on 1 January 2004 with a separate
bulletin on 23 February 2005. The IFRS profit and loss account and
balance sheet for 2004 are published in April 2005. Adoption of the
IFRS Standards has minor effect on shareholders' equity.
Major events after the close of the financial year
Etteplan Oyj's stock option programme came to an end on 31 January
2005. 24,130 option rights were subscribed in the framework of the
stock option programme.
During January 2005 three of Etteplan's subsidiary companies carried
out a name change to facilitate marketing efforts. In Finland Konette
Design Center Oy changed name to Etteplan Design Center Oy and in Sweden
J.A. Produktutveckling AB was changed to Etteplan Technical Systems AB
and Timatec AB to Etteplan Industriteknik AB.
In February Etteplan Oyj acquired a majority stake in Swedish Protang AB.
In 1995 established Protang provides mechanical and equipment design
services and plant design especially for the mechanical engineering
industry as well as maintenance and rationalization design for nuclear
power plants. The annual net sales of the company amount to more than
EUR 12 million and it currently employs 165 persons in Västerås, Malmö,
Örebro and Uppsala in Sweden.
The Board of Directors will within the authorization given by the
Annual General Meeting decide to increase Etteplan's' share capital as
a consequence of the agreement made on 7 February 2005 to acquire a
majority stake in the Protang AB. The amount of share capital increase
is 18.144,30 euros. In the direct share issue the total number 181.443
of new shares will be available for trading together with the former
shares. The total amount of the new share capital after both these
increases is 454.802,30 euros.
Outlook for the future
Etteplan's management believes that company's primary object, profitable
growth continues. The principal means of accomplishing this are increasing
of market share in present operations and on the other hand expansion to
new markets through acquisitions.
Market outlook for Etteplan's clientele is expected to remain positive
especially in the Nordic Countries. The work load situation for individual
customers may, however, fluctuate shortly.
The company has started the actions to transfer the company's share trading
to the main list of Helsinki Exchanges. The transfer is estimated to take
place in the second quarter of 2005.
Hollola, 17 February, 2005
Etteplan Oyj
Board of Directors
For additional information, contact: CEO Heikki Hornborg,
tel. +358 3 872 9011, GSM +358 400 873 063.
No auditor's report on the financial statement bulletin has been submitted.
DISTRIBUTION: Helsinki Exchanges
Principal media
www.etteplan.com
CONSOLIDATED PROFIT AND LOSS ACCOUNT (EUR 1 000)
1.1.-31.12.04 1.1.-31.12.03
TURNOVER 61 550 50 662
Variation in work in progress 222 110
Other operating income 121 134
Materials and services -1 857 -1 087
Staff expenses -44 157 -38 312
Depreciation and amortisation
according to plan -2 066 -1 791
Other operating expenses -9 072 -7 193
Share of losses from
Participating interests 0 -128
OPERATING PROFIT 4 742 2 395
" % 7,7 4,7
Financial income and expenses 43 49
PROFIT BEFORE APPROPRIATIONS AND TAXES 4 784 2 444
Income taxes -1 662 -1 054
Change in deferred tax liability 39 -11
Minority interest -588 -416
NET PROFIT FOR THE FINANCIAL YEAR 2 574 964
" % 4,2 1,9
CONSOLIDATED BALANCE SHEET (EUR 1 000)
31.12.2004 31.12.2003
ASSETS
NON-CURRENT ASSETS
Intangible assets 4 859 4 308
Tangible assets 3 230 3 361
Own shares 0 0
Other investments 464 443
NON-CURRENT ASSETS, TOTAL 8 553 8 112
CURRENT ASSETS
Stocks 1 134 843
Current receivables 11 784 10 518
Marketable securities 0 796
Cash and cash equivalent 6 601 5 810
CURRENT ASSETS, TOTAL 19 520 17 968
ASSETS, TOTAL 28 073 26 080
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 434 427
Share premium account 5 434 5 058
Reserve for own shares 0 0
Retained earnings 4 514 5 923
Net profit for the financial year 2 574 964
SHAREHOLDERS' EQUITY, TOTAL 12 957 12 372
MINORITY INTERESTS 1 208 2 194
LIABILITIES
Deferred tax liabilities 159 198
Long-term liabilities 1 295 1 065
Current liabilities 12 454 10 249
LIABILITIES, TOTAL 13 909 11 513
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 28 073 26 080
KEY FIGURES FOR ETTEPLAN GROUP (EUR 1 000)
1.1.-31.12.04 1.1.-31.12.03 Change
for prev.
year
Turnover 61 550 50 662 21,5 %
Operating profit 4 742 2 395 98,0 %
% of turnover 7,7 % 4,7 %
Profit before extra-
ordinary items 4 784 2 444 95,7 %
Net profit for the period 2 574 964 166,9 %
Return on investment, % 31,0 16,1
Return on equity, % 22,0 9,6
Equity ratio, % 52,1 57,2
Gross interest-bearing loans 1 323 1 197 10,5 %
Dept-equity ratio, % -37,3 -37,1
Total balance 28 073 26 080 7,6 %
Gross investments 2 384 2 772 -14,0 %
Earnings per share 0,60 0,23 160,9 %
Equity per share 2,98 2,89 3,1 %
Personnel at end of period 1 049 936 12,1 %
Personnel, average 965 876 10,2 %
CONSOLIDATED CASH FLOW STATEMENT (EUR 1 000)
1.1.-31.12.04 1.1.-31.12.03
OPERATING CASH FLOW
Cash receipts from customers 60 675 48 063
Other operating income 121 109
Operating expenses paid 54 944 44 117
OPERATING CASH FLOW BEFORE
FINANCIAL ITEMS AND TAXES 5 852 4 055
Interest and payment paid for
financial expenses 53 59
Interest received 90 98
Dividend received 6 11
Income taxes paid 1 662 1 054
OPERATING CASH FLOW (A) 4 234 3 051
INVESTMENT CASH FLOW
Investment in tangible and
intangible assets 2 363 2 759
Sales of tangible and
intangible assets 371 203
Investments to other investments 21 13
INVESTMENT CASH FLOW (B) -2 013 -2 569
FINANCING CASH FLOW
Purchase of own shares 0 0
Short-term loans, decrease 105 78
Long-term loans, increase 230 269
Dividends paid and other
profit distribution 2 351 1 227
FINANCING CASH FLOW (C) -2 225 -1 036
VARIATION IN WORKING CAPITAL (A + B + C)
INCREASE (+)/ DECREASE (-) -5 -554
ASSETS IN THE BEGINNING OF
THE FINANCIAL YEAR 6 606 7 160
ASSETS AT THE END OFTHE FINANCIAL YEAR 6 601 6 606
