ETTEPLAN Q1 2019: Revenue and operating profit hit new records
Stock exchange release – Published: 08.05.2019 13:00:00
Etteplan Oyj Interim Report May 8, 2019, at 1:00 p.m.
ETTEPLAN Q1 2019: Revenue and operating profit hit new records
Review period January-March 2019
- The Group’s revenue grew by 11.3 per cent and was EUR 65.6 million (1-3/2018: EUR 59.0 million). At comparable exchange rates, growth was 12.2 per cent.
- Organic revenue growth was 7.0 per cent. At comparable exchange rates, organic growth was 7.9 per cent.
- Operating profit (EBITA) improved and amounted to EUR 6.4 (4.9) million or 9.8 (8.3) per cent of revenue.
- Operating profit (EBIT) was EUR 5.8 (4.4) million or 8.8 (7.5) per cent of revenue.
- Operating profit (EBITA) and operating profit (EBIT) included non-recurring items with a combined negative effect of EUR 0.2 (0.2) million.
- The profit for the review period was EUR 4.3 (3.3) million.
- Operating cash flow was EUR 5.4 (3.3) million.
- Undiluted earnings per share were EUR 0.17 (0.13).
- Etteplan adopted a new organizational structure on January 1, 2019, in order to boost its growth. Etteplan also made changes to the Management Group’s division of responsibilities and revised its segment reporting.
- Etteplan started to measure its profitability using operating profit (EBITA) instead of EBIT from business operations. The Company updated its strategic and financial target concerning profitability on April 4, 2019. The target is to reach 10 per cent operating profit (EBITA) of revenue.
- Etteplan updated its financial guidance for 2019 and now expects the revenue and operating profit (EBIT) for the year 2019 to grow clearly compared to 2018.
Etteplan also monitors non-IFRS performance measures, because they provide information on Etteplan’s strategic and financial development in addition to other key indicators. More information on performance measures is provided on page 21-22.
Etteplan renewed its organization and structure and made changes to its segment reporting effective from January 1, 2019. Starting from the beginning of 2019, the names of the service areas are Engineering Solutions; Software and Embedded Solutions; and Technical Documentation Solutions. Each service area forms a separate reporting segment. More information on the changes and the impacts of IFRS 16 “Leases” is provided on pages 13 and 22.
Market outlook 2019
The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. Our business environment continues to develop favorably in all market areas. In Europe, demand growth is expected to slow down slightly. In Asia, the opening up of the service markets is expected to continue, but growth is expected to slow down due to the prevailing political situation.
Financial guidance 2019
We expect the revenue and operating profit (EBIT) for the year 2019 to grow clearly compared to 2018.
Previous Financial guidance 2019, updated on February 7, 2019.
We expect the revenue and operating profit (EBIT) for the year 2019 to grow compared to 2018.
President and CEO Juha Näkki:
The year 2019 started with the best quarter in Etteplan’s history. All three service areas were successful, and we set new records for our revenue and operating profit (EBIT). In spite of the prevailing uncertainty in the markets, the demand situation in Europe remained good and we won several significant deals during the first months of the year. In China, the threat of a trade war affected the demand of our existing customers and our growth slowed down. Nevertheless, the opening up of the Chinese service market continued and we won several new customers.
We renewed our organization at the beginning of the year to boost the implementation of our strategy and respond even better to changing global demand. The new organization got off to a flying start in the first quarter and we have launched several development projects, particularly with the aim of boosting the sale of service solutions. We will continue the determined development of our business in order to achieve our strategic and financial targets.
The Engineering Solutions service area saw excellent development and we again exceeded the profitability level of 10 per cent through good operational efficiency. A good number of new equipment and plant engineering projects were started during the review period, and we expect the positive development to continue.
The Software and Embedded Solutions service area also had a good start to the year. Thanks to the measures we have taken, our project business has overcome the challenges that have burdened it during the recent years and we were able to achieve profitable growth in our project business. As a result, the share of revenue represented by Managed Services increased significantly, the impact of which was also seen at the Group level.
The Technical Documentation Solutions service area accelerated its growth and its profitability improved substantially. The demand for software solutions and outsourcing solutions picked up, which supported the improvement in profitability. Challenges in Germany continued to burden the service area’s profitability. We have replaced the unit’s management and increased the efficiency of the project operations on a broad front. With these measures, we believe the business will improve during the coming quarters.
We have now grown for five and a half years consecutively and improved our operating profit in every quarter for three straight years. While the forecasts of global economic growth have been reduced and uncertainty in the markets continues, we believe our business will develop positively and we expect our revenue and operating profit to grow clearly compared to 2018.
Disclosure procedure
This stock exchange release is a summary of Etteplan’s January-March 2019 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, May 8, 2019
Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-March 2019 in a conference call and a live webcast, held in English language, on May 8, 2019 starting at 2.30 p.m. Finnish time (EEST).
To participate in the conference call please dial 5-10 minutes prior to the start of the conference to +358 (0)9 8171 0310 and insert the conference PIN code 85486654#. 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://etteplan.videosync.fi/2019-q1 . The webcast starts at 2.30 p.m. Finnish time (EEST). A recording of the webcast will be available later at www.etteplan.com/Investors.
Vantaa, May 8, 2019
Etteplan Oyj
Board of Directors
Additional information:
Juha Näkki, President and CEO, tel. +358 10 307 2077
Outi Torniainen, SVP, Marketing and Communications, tel. +358 10 307 3302
The information presented herein has not been audited.
Releases and other corporate information are available on Etteplan’s website at www.etteplan.com .
DISTRIBUTION:
Nasdaq Helsinki
Major media
www.etteplan.com
Documents and links
Etteplan in brief
Etteplan provides solutions for industrial equipment and plant engineering, software and embedded solutions, 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, services 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 2018, Etteplan had a turnover of approximately EUR 236 million. The company currently has more than 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