ETTEPLAN 2019: A year of international growth
Stock exchange release – Published: 11.02.2020 13:00:00
Etteplan Oyj Financial Statement Review February 11, 2020 at 1:00 pm EET
ETTEPLAN 2019: A year of international growth
Review period October-December 2019
- The Group’s revenue grew by 14.2 per cent and was EUR 71.8 million (10-12/2018: EUR 62.9 million). At comparable exchange rates, growth was 14.8 per cent.
- Organic growth was 0.7 per cent. At comparable exchange rates, organic growth was 1.4 per cent.
- Operating profit (EBITA) grew and amounted to EUR 6.5 (6.4) million or 9.0 (10.2) per cent of revenue.
- Operating profit (EBIT) decreased and was EUR 5.6 (5.7) million or 7.7 (9.1) per cent of revenue.
- The combined effect of non-recurring items on operating profit (EBITA) and operating profit (EBIT) was EUR 0.5 (0.0) million.
- The profit for the review period was EUR 3.9 (4.4) million.
- Operating cash flow improved and was EUR 17.5 (15.8) million.
- Basic earnings per share were EUR 0.16 (0.18).
- Etteplan renewed its strategy and updated its financial targets in December. Read more on page 13.
Review period January-December 2019
- The Group’s revenue grew by 11.3 per cent and was EUR 263.3 (1-12/2018: 236.5) million. At comparable exchange rates, growth was 12.0 per cent.
- Organic growth was 3.4 per cent. At comparable exchange rates, organic growth was 4.1 per cent.
- Operating profit (EBITA) improved and amounted to EUR 26.0 (22.6) million or 9.9 (9.5) per cent of revenue.
- Operating profit (EBIT) improved and amounted to EUR 22.8 (20.2) million or 8.7 (8.5) per cent of revenue.
- The combined effect of non-recurring items on operating profit (EBITA) and operating profit (EBIT) was EUR 1.1 (-0.3) million.
- The profit for the review period was EUR 17.4 (15.3) million.
- Operating cash flow improved and was EUR 32.9 (23.1) million.
- Basic earnings per share were EUR 0.70 (0.62).
- The number of personnel increased by 12.8 per cent and the Group had 3,447 (3,055) employees at the end of December 2019.
- The Board of Directors’ dividend proposal is EUR 0.35 (0.30) per share.
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 20-21.
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 in the January-March 2019 Interim Report and on pages 12-13 and 19-20.
Market outlook 2020
The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. The year 2020 has got off to a slow start. In Finland, the labor market situation is affecting demand. In China, the coronavirus is influencing the market situation and increasing the uncertainty of the global market outlook. On the other hand, political uncertainty has decreased slightly and demand is expected to pick up during the early part of the year.
Financial guidance 2020
We expect the revenue for 2020 to increase clearly and operating profit (EBIT) to be at the same level or improve compared to 2019.
| Key figures | ||||
| (EUR 1,000) | 10-12/2019 | 10-12/2018 | 1-12/2019 | 1-12/2018 |
| Revenue | 71,798 | 62,887 | 263,292 | 236,477 |
| Operating profit (EBITA) | 6,471 | 6,384 | 25,964 | 22,555 |
| EBITA, % | 9.0 | 10.2 | 9.9 | 9.5 |
| Operating profit (EBIT) | 5,553 | 5,731 | 22,819 | 20,184 |
| EBIT, % | 7.7 | 9.1 | 8.7 | 8.5 |
| Basic earnings per share, EUR | 0.16 | 0.18 | 0.70 | 0.62 |
| Equity ratio, % | 38.9 | 42.9 | 38.9 | 42.9 |
| Operating cash flow | 17,525 | 15 830 | 32,884 | 23,055 |
| ROCE, % | 19.1 | 21.9 | 19.9 | 21.3 |
| Personnel at end of the period | 3,447 | 3,055 | 3,447 | 3,055 |
President and CEO Juha Näkki:
Etteplan had another good year in 2019. Revenue growth continued for the 25th consecutive quarter, profitability was at the targeted level for the full year and cash flow was excellent. All our service areas performed general well, and I want to thank our personnel for their good work.
During the year, we accelerated our international growth through four acquisitions: we strengthened our position in Sweden by making two acquisitions, we strengthened our market leading position in technical documentation in the Netherlands and we started the Engineering Solutions business in Germany. The integration of all of the acquisitions has progressed according to our plans. We also continued our organic growth, although it did slow down toward the end of the year.
The demand situation development was twofold during the year. Demand grew in the first half of the year. In the second half of the year, demand growth slowed down, and it weakened toward the end of the year. In Finland, the strikes in December had a very negative effect on our business in all of our service areas. The strike in the engineering and consulting industry had a direct impact on our revenue and operating profit. In addition, the strikes in our customer industries had an indirect impact on our business as customers focused on minimizing strike effects instead of focusing on their normal business. In China, the trade war had a significant impact on local demand and, as a result, our business.
The implementation of our strategy progressed well during the year. The share of revenue represented by Managed Services exceeded 60 per cent for the first time during the year. The development of the project business was particularly strong. For example, we won the largest plant engineering project in Etteplan’s history. We also continued to make investments in the development of our service offering, which supported our business development. We carried out several interesting projects around new technologies and launched our first SaaS service.
We updated our strategy and financial targets in late December. The key objective of our strategy, “Increasing value for customers”, is to increase the value we create for our customers by further developing our service solutions and increasingly incorporating new technologies into our service offering. We will also continue our international growth and we are aiming for revenue of more than EUR 500 million in 2024.
We entered the new year in a weaker market situation and the year has got off to a slow start. The Finnish labour market situation and the coronavirus outbreak are increasing uncertainty in the markets and making the development of our business more difficult to predict. However, at the same time, political uncertainty has eased slightly, so we believe the demand situation will pick up during the early part of the year and we expect the good development of our business to continue in 2020.
Disclosure procedure
This stock exchange release is a summary of Etteplan’s 2019 Financial Statement Review. The complete Financial Statement Review 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, February 11, 2020
Etteplan’s President and CEO Juha Näkki will present the Company’s results for 2019 in a conference call and a live webcast, held in English language, on February 11, 2020 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)9 8171 0310 and insert the conference PIN code 60730367#. 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-q4-results. 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, February 11, 2020
Etteplan Oyj
Board of Directors
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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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 2019, Etteplan had a turnover of approximately EUR 263 million. The company currently has over 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
