ETTEPLAN Q2 2020 published: Strong profitability under exceptional circumstances

Etteplan News release August 11, 2020

Etteplan’s Half Year Financial Report for January-June 2020 has been published. You can find the Report and the related presentation materials at https://www.etteplan.com/investors/reports-presentations.

Join our webcast today August 11, 2020 at 2.30 P.M. EEST. More information can be found here: 

https://etteplan.videosync.fi/2020-q2-results

A recording of the webcast can be found through the same link after the live event.

President and CEO Juha Näkki:

“The effects of the COVID-19 pandemic were clearly reflected in demand in the second quarter. In Europe, our customers implemented various adaptation and cost saving measures, which led to temporary suspensions and cancellations of assignments. Consequently, our revenue decreased year-on-year for the first time since the second quarter of 2014. Demand in the Chinese market returned to a good level in the second quarter and the number of hours sold in the Chinese market returned to growth again. Nevertheless, the uncertainty caused by the pandemic in the global economy is continuing also in China, and future market development is difficult to predict.

As demand weakened, we focused on sales and found new opportunities in the changing circumstances. However, we were forced to implement adaptation measures and seek savings in operating costs throughout our organization. We also temporarily suspended some of our development programs. The timely measures enabled us to maintain good operating efficiency and our profitability was at an excellent level considering the circumstances. Strong profitability enables us to return back to implementing our growth strategy.

Operating cash flow was also exceptionally strong for the second quarter as operating expenses declined faster than cash flow from sales due to the adaptation and cost saving measures. When business returns to growth, the effect on cash flow will be the opposite. This means that, assessed over the longer term, cash flow will reflect our operating performance.

The uncertainty created by the pandemic is continuing and we are entering the second half of the year in a uncertain market situation. Nevertheless, for some of our customers, orders received are turning to a better direction after bottoming out in the second quarter. Some of our customers have also initiated new investments to be in a more competitive position when the demand situation improves. Investments focused on digitalization, in particular, have already started and we have won new projects. Accordingly, we are hopeful regarding a market recovery to some degree in the second half of the year despite the pandemic related uncertainty. Based on this assessment and our results for the first half of the year, we again issue a financial guidance for the full year 2020: our revenue will decrease slightly or be at the same level as in the previous year, our operating profit (EBIT) will decrease compared to 2019.”

Additional information:
Juha Näkki, President and CEO, tel. +358 10 307 2077
Outi Torniainen, SVP, Marketing and Communications, tel. +358 10 307 3302