ETTEPLAN Half Year Financial Report 2023 published: Growth slowed down in a difficult market

Etteplan News release August 10, 2023

Etteplan Half Year Financial Report 2023 published: Growth slowed down in a difficult market

Etteplan’s Half Year Financial Report January-June 2023 has been published.

You can find the report and the related presentation materials at https://www.etteplan.com/investors/reports-presentations.

Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-June 2023 in a conference call today August 10, 2023 at 10.00 a.m. EEST. Join our live webcast here: https://www.inderes.fi/fi/videot/etteplan-q223-108-klo-1000

A recording of the webcast will be available later at www.etteplan.com.

More information about the webcast can be found here: https://www.etteplan.com/releases/etteplans-january-june-2023-half-year-financial-report-be-published-august-10-2023

President and CEO Juha Näkki:

The second quarter of the year was short and market uncertainty was reflected in customers’ willingness to invest, weakening the demand situation. In particular, very few new product development projects were launched. April was exceptionally difficult, but more projects got underway towards the end of the quarter. Engineering-to-Order projects remained at a good level during the review period. In Europe, the demand situation was similar in all of our operating countries, while the market situation in China was weak as Western companies were transferring operations to other countries due to geopolitical tensions.

In the difficult market situation, our growth slowed down and profitability was modest for us. However, operating cash flow was at a good level. Operational efficiency weakened and we took measures to rectify the situation. The review period was shorter than the comparison period, and more holidays relative to the comparison period also had a slight impact on our development.

The market situation was particularly difficult in our product development-focused Software and Embed-ded Solutions service area, where revenue and profitability decreased. The profitability of the service area was also burdened by credit losses. During the review period, we took measures to improve our opera-tional efficiency and also secured several major contracts late in the review period, which is an encourag-ing sign of the recovery of investment activity.

The Engineering Solutions service area continued to grow, and its profitability was at a good level. We also won several outsourcing contracts during the review period, which proves the functionality of our ser-vice offering in an uncertain market situation as well.

The growth of the Technical Communication Solutions service area stopped, especially as the situation of our customers manufacturing consumer products weakened. The weaker profit level of Cognitas contin-ued to burden our profitability, but measures to improve profitability are progressing.

The first half of the year fell short of our expectations, as the market situation especially in the second quarter was weaker than expected, and we are specifying our guidance. However, inflation is expected to ease slightly, which should increase investments and improve the demand situation during the second half of the year. We also returned to the acquisition path at the beginning of the third quarter by acquiring LAE Engineering GmbH in Germany, so we expect growth to continue and profitability to develop in a better direction during the second half of the year.

Additional information:

Juha Näkki, President and CEO, tel. +358 10 307 2077

Outi Torniainen, SVP, Marketing and Communications, tel. +358 10 307 3302