ETTEPLAN Q2 2019: Growth continued and profitability exceeded the target level
Stock exchange release – Published: 13.08.2019 13:00:00
Etteplan Oyj Half Year Financial Report, August 13, 2019, at 1:00 p.m.
ETTEPLAN Q2 2019: Growth continued and profitability exceeded the target level
Review period April-June 2019
- The Group’s revenue grew by 3.7 per cent and was EUR 64.3 million (4-6/2018: EUR 62.0 million). At comparable exchange rates, growth was 4.1 per cent.
- Organic growth was 1.2 per cent. At comparable exchange rates, organic growth was 1.6 per cent.
- Operating profit (EBITA) improved and amounted to EUR 6.5 (6.2) million or 10.1 (10.1) per cent of revenue.
- Operating profit (EBIT) was EUR 5.8 (5.7) million or 9.0 (9.1) per cent of revenue.
- The profit for the review period was EUR 4.5 (4.4) million.
- Operating cash flow was EUR 8.8 (4.5) million.
- Basic earnings per share were EUR 0.18 (0.18).
- Etteplan accelerated its international growth and acquired Devex Mekatronik AB in Sweden in June and EMP Engineering Alliance in Germany after the review period in July. As a result of the acquisitions, Etteplan’s number of personnel increased by approximately 250 engineering professionals.
- Etteplan raises its financial guidance: We expect the revenue and operating profit (EBIT) for the year 2019 to grow significantly compared to 2018.
Review period January-June 2019
- The Group’s revenue grew by 7.4 per cent and was EUR 130.0 million (1-6/2018: EUR 121.0 million). At comparable exchange rates, growth was 8.1 per cent.
- Organic growth was 4.0 per cent. At comparable exchange rates, organic growth was 4.7 per cent.
- Operating profit (EBITA) improved and amounted to EUR 12.9 (11.1) million or 9.9 (9.2) per cent of revenue.
- Operating profit (EBIT) was EUR 11.6 (10.1) million or 8.9 (8.3) per cent of revenue.
- The profit for the review period was EUR 8.8 (7.6) million.
- Operating cash flow was EUR 14.2 (7.7) million.
- Basic earnings per share were EUR 0.35 (0.31).
- The number of personnel increased by 8.2 per cent and the Group had 3,301 (3,051) employees at the end of June 2019.
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 pages 22-23.
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 14-15 and 23.
Market outlook 2019
The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. Overall our business environment continues to develop favorably, but the prevailing political situation increases uncertainty and affects demand. In Europe, demand growth is expected to slow down. In Asia, the opening up of the service markets is expected to continue, but growth is expected to slow down.
Financial guidance 2019, updated on August 13, 2019
We expect the revenue and operating profit (EBIT) for the year 2019 to grow significantly compared to 2018.
Financial guidance 2019, updated on May 8, 2019
We expect the revenue and operating profit (EBIT) for the year 2019 to grow clearly compared to 2018.
President and CEO Juha Näkki:
In the second quarter of the year, the market situation remained generally good and our business developed favorably. The share of revenue represented by Managed Services grew, which boosted our profitability beyond our target level. Cash flow was also strong. Our revenue grew for the 23rd consecutive quarter. Growth slowed down slightly though, as the Easter holidays fell entirely in the second quarter.
The operational performance of the Engineering Solutions service area was very strong. Excellent operational efficiency and successes in projects increased profitability.
The development of the Software and Embedded Solutions service area was stable. Profitability was slightly affected by a slow start to certain software projects and by changes in the demand situation of a customer in Poland.
The Technical Documentation Solutions service area also developed favorably. The postponement of software sales to the upcoming quarters and the continued challenges in Germany burdened the service area’s profitability. Nevertheless, we believe the situation of our German business will improve toward the end of the year as a result of the measures we have taken. As strong progress continues in the digitalization of technical documentation, we have also continued to develop our service solutions and we will launch new digital services during the second half of the year.
In the latter part of the review period, we accelerated our growth again and acquired Devex Mekatronik AB in Sweden in June and EMP Engineering Alliance in Germany in July. With these acquisitions we strengthened our position as an international operator in the engineering services market. Although market uncertainty has increased in the prevailing political situation, which affects demand, we expect our business to continue to develop favorably during the second half of the year. Supported by the acquisitions we have made, we raised our financial guidance and we now expect our revenue and operating profit (EBIT) to grow significantly compared to 2018.
Disclosure procedure
This stock exchange release is a summary of Etteplan’s January-June 2019 Half Year Financial Report. The complete Half Year Financial 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, August 13, 2019
Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-June 2019 in a conference call and a live webcast, held in English language, on August 13, 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 31558791#. 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-q2-results. 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, August 13, 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.
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Major media
www.etteplan.com
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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 some 3,400 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
