ETTEPLAN Q3 2018: Operating profit improved by more than 50 per cent
Stock exchange release – Published: 30.10.2018 13:00:00
Etteplan Oyj Interim Report October 30, 2018 at 1:00 pm
ETTEPLAN Q3 2018: Operating profit improved by more than 50 per cent
Review period July-September 2018
- The Group’s revenue grew by 11.6 per cent and was EUR 52.6 million (7-9/2017: EUR 47.1 million). At comparable exchange rates, growth was 13.7 per cent.
- Organic revenue growth was 6.8 per cent. At comparable exchange rates, organic growth was 8.9 per cent.
- EBIT from business operations* improved and amounted to EUR 4.8 (3.4) million or 9.2 (7.1) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.3 (0.1) million.
- Operating profit (EBIT) was EUR 4.4 (2.9) million or 8.3 (6.1) per cent of revenue. Operating profit included exceptional items with a combined negative effect of EUR 0.0 (0.1) million.
- The profit for the review period was EUR 3.2 (2.1) million.
- Operating cash flow was EUR -0.5 (-1.2) million.
- Undiluted earnings per share were EUR 0.13 (0.08).
Review period January-September 2018
- The Group’s revenue grew by 11.1 per cent and was EUR 173.6 million (1-9/2017: EUR 156.2 million). At comparable exchange rates, growth was 12.8 per cent.
- Organic revenue growth was 7.6 per cent. At comparable exchange rates, organic growth was 9.3 per cent.
- EBIT from business operations* improved and amounted to EUR 15.7 (12.4) million or 9.1 (7.9) per cent of revenue. EBIT from business operations included exceptional items with a combined negative effect of EUR 0.8 (0.7) million.
- Operating profit (EBIT) was EUR 14.5 (10.9) million or 8.3 (7.0) per cent of revenue. Operating profit included exceptional items with a combined negative effect of EUR 0.3 (0.7) million.
- The profit for the review period was EUR 10.9 (8.1) million.
- Operating cash flow improved and was EUR 7.2 (6.1) million.
- Undiluted earnings per share were EUR 0.44 (0.33).
- The number of personnel increased by 9.7 per cent and the Group had 3,050 (2,781) employees at the end of September 2018.
*EBIT from business operations is an alternative performance measure that is presented because it reflects the Company’s operational performance better than operating profit (EBIT). EBIT from business operations does not include the amortization of fair value adjustments at acquisitions or premeasurements of contingent considerations. More information on page 17.
Market outlook 2018
The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. Our business environment is currently developing favorably in all market areas. The development of the Central European markets is expected to remain unchanged. The favorable situation in the Swedish market is expected to continue. The market situation in Finland is good. In Asia, the growth of the service market is expected to continue.
Financial guidance 2018, updated on August 14, 2018
We expect the revenue for the year 2018 to grow clearly and the operating profit for the year 2018 to grow significantly compared to 2017.
President and CEO Juha Näkki:
During the third quarter we continued the strong development we achieved in the preceding quarters: our revenue grew and operating profit improved significantly. While uncertainty in the markets has increased, the demand situation remained good in all of our market areas, and our strong operational performance enabled us to achieve a record-high profitability for the third quarter.
The development of the Engineering services service area was outstanding. Our good market position combined with excellent operational efficiency produced good results and we again exceeded our profitability target of 10 per cent.
The development of Embedded systems and IoT service area was also excellent. The measures we have taken to improve the efficiency of the project business have produced good results and profitability has improved, nearly reaching our target level. The integration of Eatech into Etteplan is progressing as planned. Eatech Oy and the previously acquired Soikea Solutions Oy and Koodain Solutions Oy will be combined to create a new agile software design unit. This unit, together with Etteplan’s other expertise, makes us a strong player in the growing digitalization and IoT markets and will give excellent opportunities for growth for us in the future.
The Technical documentation service area did not meet our expectations and growth slowed down. Compared to the same, strong period last year, our customers invested less in new operating models, which led to slower growth. In addition, a significant project delivery in Germany was delayed further. Nevertheless, demand for our outsourcing solutions remains at a good level. We are having discussions with several customers about outsourcing solutions and are confident we will be able to again accelerate growth in the coming quarters.
During the review period, we also continued to invest in the development of our service solutions and service offering. For example, we invested in additive manufacturing (3D printing) expertise, digital twin solutions and the development of other digital technologies. We have begun our first trials related to artificial intelligence this year, and during the review period started our first customer project utilizing AI. Investing in new technologies and incorporating them into our service solutions allows us to create new added value for our customers. These kinds of solutions also create excellent growth platforms for the future.
We are entering the final quarter of the year in a favorable market situation and we expect good demand to continue in spite of the increased uncertainty. The short month of December will affect growth and profitability in the fourth quarter, but we, nevertheless, expect a good last quarter to a year that has been record-breaking in many ways.
Disclosure procedure
This stock exchange release is a summary of Etteplan’s January-September 2018 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.
Conference call and live webcast today, October 30, 2018
Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-September 2018 in a conference call and a live webcast, held in English language, on October 30, 2018 starting at 2.30 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 (0)800 523 163 and tell the operator that you wish to join Etteplan conference call. Questions can be asked in Finnish and in English after President and CEO’s presentation only through conference call connection.
Juha Näkki’s presentation can be followed as a live webcast on https://www.inderes.fi/fi/videot/etteplan-osavuosikatsaus-q3-2018-webcast-30102018-1430. The webcast starts at 2.30 p.m. Finnish time (EET). A recording of the webcast will be available later at www.etteplan.com/Investors.
Vantaa, October 30, 2018
Etteplan Oyj
Board of Directors
DISTRIBUTION:
Nasdaq Helsinki
Major media
www.etteplan.com
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Etteplan in brief
Etteplan provides industrial equipment and plant engineering, embedded systems, IoT (Internet of Things), and technical documentation 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 2017, Etteplan had a turnover of approximately EUR 215 million. The company currently has over 3,000 professionals in Finland, Sweden, the Netherlands, Germany, Poland and China. Etteplan's shares are listed on Nasdaq Helsinki Ltd under the ETTE ticker. www.etteplan.com
