ETTEPLAN OYJ: FINANCIAL STATEMENT BULLETIN 1 JANUARY – 31 DECEMBER 2006
Stock exchange release – Published: 09.02.2007 10:00:04
FINANCIAL STATEMENT BULLETIN 1 JANUARY - 31 DECEMBER 2006
Revenue: EUR 101.7 million +28%
Operating profit: EUR 6.8 million +100%
Net profit for the financial year: EUR 4.2 million +86%
Earnings per share: EUR 0.43 +72%
Proposed dividend: EUR 0.26 per share
During 2006, Etteplan grew, went international and cemented its position
as one of the leading industrial technology design companies in the
Nordic countries. In May, the company acquired the entire share capital
of ABA Teknikpartner AB, thereby becoming a major player in the automotive
industry. In line with its strategy, Etteplan has also grown through closer
cooperation with customers by taking on outsourced design services.
Examples of this include the agreements with John Deere Forestry Oy and
Larox Corporation. Systematic strengthening of customer relationships
in all main business areas has forged a foundation for organic growth.
As a result of solid demand and enhanced internal procedures, the company's
operating profit has doubled and units that were in the red last year have
noticeably improved their results. The company's profitability has risen,
especially during the second half of last year, with the fourth quarter
result being the year's best.
During 2006 Etteplan acquired the entire share capital of its formerly
associated companies Etteplan Design Center Oy, Etteplan Technical Systems AB
and Etteplan Consulting (Shanghai) Co., Ltd.
Revenue and result
The Etteplan Group's revenue increased significantly compared to the previous
year. Revenue grew by 28.1% to EUR 101.7 million (EUR 79.4 million in 2005).
Growth was attributable to the acquisition of the entire share capital of
ABA Teknikpartner AB, as well as to organic growth, which accounted for 7.3%.
Operating profit amounted to EUR 6.8 million (EUR 3.4 million), or 6.7%
of revenue (4.3%). Operating profit rose by 100.0% on the previous year.
Profit for the financial year before taxes and minority interest totalled
EUR 6.7 million (EUR 3.4 million). Net profit for the financial year amounted
to EUR 4.2 million (EUR 2.2 million).
Earnings per share were EUR 0.43 (EUR 0.25). Equity per share was EUR 2.31
(EUR 1.99). The return on investment increased to 24.6% (18.2%) and the return
on equity to 20.9% (12.8%).
Business operations
Etteplan operates as a partner to large and medium-sized internationally
operating industrial companies, providing industrial technology design services.
The Group's design services are divided into two segments: Delivery Design and
Product Development.
The Delivery Design segment provides services for the design of machinery and
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 that is specialized in electromagnetic 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 Product Development segment's revenue has almost doubled as a result of
acquisitions made and accounts for close to half of the Group's revenue. Demand
grew steadily towards the end of the year and the segment's profitability showed
a notable improvement.
Vigorous growth in the Delivery Design segment was seen in Sweden in particular,
where organic growth amounted to 15%. In Finland, organic growth reached a level
of about 10%. The good level of demand that began in the spring has led to a
shortage of resources in certain areas. The segment's profitability improved on
the previous year.
Major events in 2006
In March, Etteplan Oyj strengthened its operations in software design services
for the electronics and telecommunications sector. The company entered into an
agreement with Integrated e-Solutions Finland Oy under the terms of which the
business operations of the company were integrated into Etteplan.
Also in March, Etteplan Oyj's Annual General Meeting decided to follow the Board
of Director's proposal and distribute a dividend of EUR 0.20 per share for 2005.
It also granted the Board of Directors the authorization to take convertible
loans, issue option rights, increase share capital with a rights issue, and buy
back and transfer the company's own shares.
Etteplan acquired the entire share capital of the Swedish company
ABA TeknikPartner AB in May. The company was established in 1995 and offers
product development services, primarily to the Swedish automotive industry.
The acquisition strengthened Etteplan's position as a notable player in the
industrial technology design sector in Sweden. The number of people working for
the Etteplan Group in Sweden rose to almost 600 as a result of the transaction.
In June, the company increased its 75% holding in Etteplan Technical Systems AB
to 100%. The 100% holding is expected to bolster synergies between the Group's
Swedish companies.
In order to clarify the company's corporate image, the business and personnel
of the Group's subsidiary EPE Design Oy were transferred to Etteplan Oyj in
June, and EPE Design Oy's operations as a separate company were discontinued.
Etteplan acquired a 19% holding in Etteplan Design Center Oy from
KONE Corporation in September and completed the planned increase of its 81%
holding to 100%.
Also in September, Etteplan acquired a minority interest in Etteplan
Consulting (Shanghai) Co., Ltd., increasing its 80% holding to 100%.
In October, Etteplan and Larox Corporation signed a letter of intent to broaden
their two decades of design cooperation. As part of the agreement, 10 salaried
employees working on delivery project and product maintenance design and
documentation tasks at Larox's Finnish locations transferred to Etteplan as
existing employees as of 1 January 2007.
In December, Etteplan Group company DokuMentori Oy signed a framework agreement
with John Deere Forestry Oy concerning the transfer of its technical
documentation business to DokuMentori Oy. As part of the agreement, 10 of John
Deere Forestry's documentation employees transferred to DokuMentori as existing
employees on 1 December 2006.
In order to clarify Etteplan's corporate image, Konette GmbH changed its name
to Etteplan Engineering GmbH in December.
Personnel
The Etteplan Group's operations and number of personnel have grown steadily.
During the financial year, the Group employed an average of 1,501 people (1,230),
an increase of 22.0%. At the end of the period on 31 December 2006, the payroll
numbered 1,586 employees (1,294). The increases in staff were mainly due to
acquisitions and to organic growth attributable to outsourcing by key customers.
At the end of the period, the Group employed 894 people in Finland, 581 in
Sweden, 55 in Germany and 56 in other countries.
Capital expenditures
The Group's total capital expenditures increased by 51% to EUR 12.5 million
(EUR 8.3 million). The largest single investment was the acquisition of the
entire share capital of ABA TeknikPartner AB. Other capital expenditures were
earmarked for the implementation and development of business operations.
Risks and risk management
Risk management within the Group encompasses corporate governance within the
Group as well as the management of operational and financial risks. The Group's
corporate governance guidelines and quality system are the means used for the
supervision of administrative risk within the Group. The risks are itemized in
the Notes to the financial statements.
Owing to their nature, the company's business operations involve no significant
credit, environmental or foreign currency risks.
Financial position
Etteplan's financial structure has changed as a result of the acquisitions made
by the company and their financing arrangements. Total assets at 31 December 2006
increased by 46.9% to EUR 55.2 million (EUR 37.6 million). Balance sheet goodwill
rose to EUR 16.6 million (EUR 8.9 million). The Group's cash and cash equivalents
as well as marketable securities rose to EUR 6.2 million (EUR 4.9 million). The
Group's interest-bearing liabilities increased as a result of the acquisitions
and stood at EUR 10.8 million (EUR 2.2 million) at the end of the period. The
equity ratio was 42.6% (54.7%). Liquidity remained good throughout the period.
Shares, share price trend and share buy-back
The Etteplan Oyj share (ETTIV) has been quoted in the Nordic Exchange's Small Cap
market capitalization group in the Industrials sector as of 2 October 2006.
Previously, the company's share was listed on the Main List of the Helsinki
Stock Exchange.
The company's share capital at 31 December 2006 was EUR 2,443,232.50 and the
number of shares outstanding was 9,772,930. The company has one series of shares
and the accounting countervalue of a share is EUR 0.25. All shares confer an
equal right to a dividend and the company's funds.
The number of Etteplan Oyj shares traded during the financial year was 4,469,523,
to a total value of EUR 26.5 million. The share price low was EUR 4.78, the
average EUR 5.93 and the closing price EUR 6.90. Market capitalization at 31
December 2006 was EUR 67.5 million and it had 1,792 shareholders.
Etteplan increased its share capital by 159,800 shares and EUR 39,950 by means
of a directed share issue in June. The new shares were used as payment in a
share swap to raise the company's holding in Etteplan Technical Systems AB.
The increase in share capital was reported in a stock exchange release dated
19 June 2006. The new shares became subject to public trading on the Helsinki
Stock Exchange on 20 June 2006.
Also in June, the company transferred 200 of its own shares as payment in a
share swap, which was reported in a stock exchange release dated 19 June 2006.
During the financial year, the company bought back 63,022 of its own shares.
The shares were used as consideration in the purchase of 5,882 ProTang AB
series B shares owned by ProTang personnel. These B shares originated from
a rights issues arising out of ProTang's convertible loan program and were
directed at the company's personnel. A consideration of EUR 410,273.22 was
paid, which was reported in a stock exchange release dated 29 November 2006.
The company did not hold any of its own shares on 31 December 2006.
In accordance with the Securities Market Act, Chapter 2, Article 9,
Etteplan Oyj issued five notifications of changes in shareholding during
the financial year. Stock exchange releases were issued on 4 January 2006,
8 March 2006, 19 June 2006 and 6 September 2006 (two announcements).
Share issue authorizations, the exercise of authorizations and the option
programme
The Annual General Meeting held on 29 March 2006 granted the Board of
Directors the authorization to:
- decide, within one year from the date of the Annual General Meeting to
take one or more convertible bonds and/or issue option rights and/or decide
to increase the share capital in one or more lots by using new issue so that
when issuing convertible bonds or option rights or new issues together, the
Board of Directors' unexercised, valid authorizations shall, however, with
regard to the total amount of increase and the total number of voting rights
attached to the shares to be issued, correspond to no more than one-fifth
of the registered share capital and the aggregate number of voting rights
attached to the shares at the date of the resolution of the General Meeting
of Shareholders concerning the authorization and the decision of the Board
of Directors to increase the share capital. Pursuant to the authorization
the company's share capital may be increased by a maximum of EUR 480,656.50.
- decide to acquire the company's own shares in one or more lots to the
effect that the company may use funds distributable as profit otherwise
than in proportion to the holdings of the shareholders. The authorization
includes the right to acquire the company's shares in public trade at the
applicable quoted price to the effect that the total accounting par value
and the voting rights attached to the acquired shares shall be no more than
ten (10) per cent of the company's share capital and the aggregate number
of voting rights after the acquisition of the shares.
- decide to convey, in one or more lots, the company's own shares acquired
pursuant to the authorization set forth. The authorization to the Board of
Directors includes the right to convey to the effect that the aggregate
accounting par value and the voting rights attached to the shares shall be no
more than ten (10) per cent of the company's share capital and the aggregate
number of voting rights attached to the shares at the time of the conveyance.
The authorizations to increase the share capital, to take convertible loans
and/or issue option rights, and buy back and transfer own shares (granted to
the Board of Directors at the Annual General Meeting held on 29 March 2006)
that were not exercised during the report period remain valid. The authorizations
exercised during the report period are detailed above. The authorizations granted
to the Board of Directors are presented in detail in a stock exchange release
dated 29 March 2006.
The company does not currently have a share option programme.
Board of Directors, CEO and auditors
The members of Etteplan Oyj's Board of Directors during the report period
were Tapani Mönkkönen, Chairman, and Tapio Hakakari, Heikki Hornborg,
Pertti Nupponen and Matti Virtaala. Board members Tapio Hakakari,
Pertti Nupponen and Matti Virtaala were independent of the company in 2006.
The company's Chief Executive Officer was Heikki Hornborg, M. Sc. (Tech.).
The company's auditor was PricewaterhouseCoopers Oy, a firm of authorized
public accountants, with Mika Kaarisalo APA acting as chief auditor.
As of 1 January 2006, the company has complied with the amended Insider
Guidelines issued by the Helsinki Stock Exchange. Etteplan's statutory
insiders include the members of the Board of Directors, the CEO, the
Executive Vice President and the auditor. Furthermore, the members of
the Management Group are considered as Etteplan's public insiders.
Board of Directors' proposal for the disposal of profits
The parent company's distributable shareholders' equity according to
the balance sheet at 31 December 2006 is EUR 10.1 million.
The Board of Directors is proposing to the Annual General Meeting, which
will convene on 29 March 2007, that on the dividend payout date a dividend
of EUR 0.26 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 3 April 2007 and the dividend will be paid on 12 April 2007.
No substantial changes to the company's financial position have occurred
after the end of the financial year. The company's liquidity is good and
in the view of the Board of Directors the proposed dividend payout does not
jeopardize the company's solvency.
Major events after the close of the financial year
In January, Etteplan Oyj acquired the entire share capital of the Kouvola-
based company LCA Engineering Oy. The company was established in 1993 and
offers process and plant design services to industrial companies and machinery
and equipment manufacturers, primarily those in the wood processing industry.
The agreement will bolster Etteplan's position in wood processing industry
projects in particular, as well as in investment projects in Russia.
Etteplan increased its share capital by EUR 49,086.75 in February with a
directed share issue of 196,347 shares. The shares were used as payment in
the acquisition of LCA Engineering Oy. The new shares were registered in
the Trade Register on 7 February 2007 and became subject to trade on the
stock exchange together with the old shares on 8 February 2007. After the
issue, share capital amounted to EUR 2,492,319.25 and the total number of
shares to 9,969,277. The increase in share capital was reported in a stock
exchange release dated 7 February 2007.
Outlook for the future
The company has set internationalization and profitable growth as its
main objectives. A solid level of demand for industrial technology design
services continues in the company's main market areas. The company estimates
that in 2007 the revenue will increase and the operating profit will improve.
Growth is achieved both through acquisitions and organically.
Hollola, 9 February 2007
Etteplan Oyj
Board of Directors
For additional information, please contact: CEO Heikki Hornborg,
tel. + 358 400 873 063 or Pia Björk, CFO, Vice President,
Corporate Planning, tel. +358 400 241 815.
No auditor's report on the financial statement bulletin has been submitted.
APPENDICES
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Key figures for the Etteplan Group
Revenue and operating profit quarterly
Etteplan Oyj's Q1 interim report for 2007 will be published on 27 April 2007.
Releases and other corporate information are available on Etteplan's website
at www.etteplan.com.
DISTRIBUTION
Helsinki Stock Exchange
Principal media
CONSOLIDATED INCOME STATEMENT (EUR 1 000)
1.1.-31.12.06 1.1.-31.12.05
Revenue 101 698 79 365
Other operating income 219 98
Materials and services -6 728 -2 920
Staff costs -71 111 -58 072
Other operating expenses -15 213 -13 129
Depreciation -2 042 -1 930
Operating profit 6 823 3 411
Financial income 172 120
Financial expenses -299 -103
Profit before taxes 6 695 3 429
Income taxes -2 096 -1 167
Profit for the financial year 4 599 2 262
Net profit for the financial year
attributable to minority interest -427 -17
Net profit for the financial year
attributable to equity holders of
the Company 4 172 2 244
Basic earnings per share, EUR 0.43 0.25
Diluted earnings per share, EUR 0.43 0.25
CONSOLIDATED BALANCE SHEET (EUR 1 000)
31.12.2006 31.12.2005
ASSETS
Non-current assets
Property, plant and equipment 2 759 3 491
Goodwill 16 582 8 921
Other intangible assets 4 122 1 953
Investments available for sales 425 465
Other long-term receivables 852 0
Deferred tax assets 88 96
Non-current assets, total 24 829 14 926
Current assets
Stocks 0 25
Trade and other receivables 24 191 17 676
Financial assets at fair value
through income statement 0 475
Current tax assets 28 35
Cash and cash equivalents 6 174 4 445
Current assets, total 30 393 22 657
TOTAL ASSETS 55 222 37 582
EQUITY AND LIABLITIES
Capital attributable to equity holders
Share capital 2 443 2 403
Share premium account 9 179 8 269
Cumulative translation adjustment 43 -252
Retained earnings 6 759 6 439
Net profit for the financial year 4 172 2 244
Capital attributable to equity
holders, total 22 596 19 104
Minority interest 872 1 360
Equity, total 23 468 20 463
Non-current liabilities
Deferred tax liability 1 046 193
Non-current interest-bearing
liabilities 8 967 1 414
Non-current liabilities, total 10 013 1 606
Current liabilities
Current interest-bearing liabilities 1 837 766
Trade and other payables 19 904 14 746
Current liabilities, total 21 741 15 512
Liabilities, total 31 754 17 119
TOTAL EQUITY AND LIABILITIES 55 222 37 582
CONSOLIDATED CASH FLOW STATEMENT (EUR 1 000)
1.1.-31.12.06 1.1.-31.12.05
OPERATING CASH FLOW
Cash receipts from customers 99 290 73 864
Cash receipts from other
operating income 194 78
Operating expenses paid 90 851 72 836
OPERATING CASH FLOW BEFORE
FINANCIAL ITEMS AND TAXES 8 633 1 106
Interest and payment paid
for financial expenses 249 103
Interest received 172 120
Income taxes paid 1 782 980
OPERATING CASH FLOW (A) 6 773 144
INVESTING CASH FLOW
Purchase of tangible and
intangible assets 1 612 1 614
Acquisition of subsidiaries 9 952 672
Proceeds from sale of tangible
and intangible assets 212 295
Purchase of other investment 476 845
Proceeds from sale of investment 464 0
INVESTMENT CASH FLOW (B) -11 363 -2 836
FINANCING CASH FLOW
Proceeds from issuance of share capital 0 317
Short-term loans, increase 1 332 0
Short-term loans, decrease 1 332 28
Long-term loans, increase 11 335 1 423
Long-term loans, decrease 3 108 0
Dividend paid and other
profit distribution 1 923 1 305
FINANCING CASH FLOW (C) 6 305 409
VARIATION IN WORKING CAPITAL (A + B + C)
INCREASE (+)/DECREASE (-) 1 715 -2 284
ASSETS IN THE BEGINNING OF THE PERIOD 4 445 6 601
EXCHANGE GAINS OR LOSSES ON CASH
AND BANK EQUIVALENTS -14 -128
ASSETS AT THE END OF THE PERIOD 6 174 4 445
KEY FIGURES FOR ETTEPLAN GROUP (EUR 1 000)
1.1.-31.12.06 1.1.-31.12.05 Change
for prev.
year
Revenue 101 698 79 365 28.1 %
Operating profit 6 823 3 411 100.0 %
% of revenue 6.7 % 4.3 %
Profit before taxes and
minority interest 6 695 3 429 95.3 %
Profit for the
financial year 4 172 2 244 85.9 %
Return on equity, % 20.9 12.8
Return on investment, % 24.6 18.2
Equity ratio, % 42.6 54.7
Gross interest-bearing loans 10 804 2 180 395.6 %
Dept-equity ratio, % 19.7 -13.4
Total balance 55 222 37 582 46,9 %
Gross investments 12 512 8 311 50,6 %
Earnings per share 0.43 0.25 72.1 %
Equity per share 2.31 1.99 16.2 %
Personnel, average 1 501 1 230 22.0 %
Personnel at year end 1 586 1 294 22.6 %
REVENUE AND OPERATING PROFIT QUARTERLY
Q4/2006 Q3/2006 Q2/2006 Q1/2006
Revenue 29 360 23 500 26 422 22 416
Operating profit 2 141 1 653 1 517 1 512
% of revenue 7.3 7.0 5.7 6.7
