Etteplan Q1: Demand improved at the end of the quarter

E TTEPLAN OYJ, INTERIM REPORT, MAY 7, 2014 AT 02.00 P.M.

ETTEPLAN Q1: DEMAND IMPROVED AT THE END OF THE QUARTER

Review period January-March 2014

– The Group’s revenue decreased by 3.4% and was EUR 33.3 million
   (1-3/2013: EUR 34.5 million).
– EBITDA declined by 26.4% and was EUR 1.8 million (EUR 2.5 million).
– Operating profit (EBIT) decreased by 34.2% and was EUR 1.2 million (EUR 1.8 million).
– The profit for the review period was EUR 0.8 million (EUR 1.0 million).
– Operating cash flow improved and was EUR -1.7 million (EUR -2.0 million).
– Earnings per share were EUR 0.04 (EUR 0.05).
– The Group had 1, 731 employees at the end of the period (1, 732).
– Etteplan keeps its financial guidance unchanged and adjusts the estimate of its
  market outlook.

Outlook 2014

Market outlook

The most important factor in the development of Etteplan’s business operations is the development of business operations in the machinery and metal industry. At the beginning of 2014, the revenues and order books of the machinery and metal industry were at a lower level than in the corresponding period in 2013. However, new orders increased on average. The demand for engineering design services showed signs of recovery at the end of the review period, but the full-year development remains uncertain.

Financial guidance

We expect the revenue and operating profit for the year 2014 to grow compared to 2013.

Previous estimate of outlook

Market outlook

The most important factor in the development of Etteplan’s business operations is the development of business operations in the machinery and metal industry. At the beginning of 2014, the new orders and order books of the machinery and metal industry were at a lower level than in the corresponding period in 2013. In the last quarter of 2013, new orders turned to slight growth. The development of the demand situation for engineering design services in the first quarter of 2014 is uncertain despite the slightly improved market situation. 

Financial guidance

We expect the revenue and operating profit for the year 2014 to grow compared to 2013.

Key figures

Juha Näkki, President and CEO of Etteplan Oyj comments on the interim report:

“In Europe, 2014 began in a weak demand situation as expected. New projects were still started at a slow pace during the early part of the review period. Therefore our revenue and operating profit declined compared to the corresponding period in 2013. However, the decline leveled off compared to the previous quarter. Our profitability was burdened by the low price level of projects sold in Europe in a weakening market situation during the second half of 2013. In addition our profitability was burdened by the tight competitive situation in the Swedish market.

The European market situation took a positive turn at the end of the review period, and some new engineering design projects were launched. This was affected by the new orders received by our customers. Especially the new orders in the forest industry equipment manufacturers increased the demand for engineering design services. There were also signs of improvement in demand among other equipment manufacturers serving the raw materials production. Due to better demand, the number of temporarily laid off personnel in Finland decreased to approximately half of the amount at the turn of the year, and new projects were also launched in Sweden and the Netherlands.

In Sweden, we strengthened our market position by acquiring the entire share capital of ProAvia Konsult AB. This acquisition strengthens our position, particularly in the aerospace and defense industry characterized by strong demand.

The implementation of the business strategy progressed well in the first quarter and the share of Managed Services exceeded one third of our revenue.

In China, our strong performance during 2013 continued in the review period and we increased our revenue substantially. The positive development of the Chinese engineering design services market continued, and the number of working hours sold in the Chinese market grew by more than 130 per cent compared to the corresponding period in 2013. We also achieved significant growth in offshoring services.

The uncertainty in the economy continues, but there are signs of a change for the better. New orders received by our customers have generally turned to growth compared to the situation at the end of 2013, which will have a positive effect on demand. I am confident that our efforts to strengthen our market position will be rewarded as demand improves and that our revenue and operating profit will develop positively during the rest of the year.”

Disclosure procedure

Etteplan follows the disclosure procedure enabled by Disclosure obligation of the issuer (7/2013) published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Etteplan’s January-March 2014 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. Investors are advised to review the complete interim report with tables.

Conference call and live webcast today, May 7, 2014

Etteplan’s President and CEO Juha Näkki will present Company’s results for January-March 2014 in a conference call and a live webcast for analysts and investors, held in English language, on May 7, 2014 starting at 3.30 p.m. Finnish time (EET).

To participate in the conference call please dial 5-10 minutes prior to the start of the conference to +358 9 2319 5437, event password is Etteplan2014. Questions can be asked in English after President and CEO’s presentation only through conference call connection.

Juha Näkki’s presentation can be followed as a live webcast though a link at Etteplan’s homepage at www.etteplan.com/Investors. The live webcast starts at 3.30 p.m. Finnish time (EET).

A recording of the webcast will be later available at the same address.

Vantaa, May 7, 2014

Etteplan Oyj

Board of Directors

Additional information:
Juha Näkki, President and CEO, tel. +358 400 606 372

The information presented herein has not been audited.

Releases and other corporate information are available on Etteplan’s Web site at www.etteplan.com.

DISTRIBUTION:
NASDAQ OMX Helsinki
Major media
www.etteplan.com

Etteplan provides engineering planning services and technical product information solutions to the world’s leading companies in the manufacturing industry. Our services are geared to improve the competitiveness of our customers’ products and engineering processes throughout the product life cycle. The results of Etteplan’s innovative engineering can be seen in numerous industrial solutions and everyday products.

In 2013, Etteplan had a turnover of EUR 128.6 million. The company has more than 1, 700 professionals in Finland, Sweden, the Netherlands and China. Etteplan’s shares are listed on NASDAQ OMX Helsinki Ltd under the ticker ETT1V.