ETTEPLAN OYJ Financial Statement Review February 8, 2024 at 1.00 p.m. (EET)

ETTEPLAN 2023: Navigating a difficult operating environment

• The Group's revenue increased by 4.6 percent and was EUR 95.2 million (10-12/2022: EUR 91.0 million). At comparable exchange rates, revenue increased by 6.5 percent.
• Operating profit (EBITA) decreased by 1.7 percent and was EUR 9.6 (9.7) million, or 10.0 (10.7) percent of revenue.
• Operating profit (EBIT) decreased by 2.6 percent and was EUR 8.2 (8.4) million, or 8.6 (9.2) percent of revenue.
• Operating cash flow improved and was EUR 12.6 (11.0) million.
• Basic earnings per share were EUR 0.24 (0.30).

• The Group's revenue grew by 2.8 percent and was EUR 360.0 million (1-12/2022: EUR 350.2 million). At comparable exchange rates, revenue increased by 4.7 percent.
• Operating profit (EBITA) decreased by 8.9 percent and was EUR 30.9 (33.9) million, or 8.6 (9.7) percent of revenue.
• Operating profit (EBIT) decreased by 10.8 percent and was EUR 25.5 (28.6) million, or 7.1 (8.2) percent of revenue.
• Operating cash flow was EUR 35.6 (28.1) million.
• The combined effect of non-recurring items on operating profit (EBITA) and operating profit (EBIT) in January-December was EUR -1.7 (-1.0) million.
• Basic earnings per share were EUR 0.66 (0.73).
• The Board of Directors' dividend proposal is EUR 0.30 (0.36) per share.

Etteplan also monitors non-IFRS performance measures, because they provide additional information on Etteplan's development. More information on performance measures is provided at the end of the release.

Key figures

EUR 1,000 10-12/2023 10-12/2022 1-12/2023 1-12/2022
Revenue 95,188 91,024 359,951 350,170
Operating profit (EBITA) 9,561 9,731 30,883 33,915
EBITA, % 10.0 10.7 8.6 9.7
Operating profit (EBIT) 8,199 8,417 25,540 28,622
EBIT, % 8.6 9.2 7.1 8.2
Basic earnings per share, EUR 0.24 0.30 0.66 0.73
Equity ratio, % 40.9 38.2 40.9 38.2
Operating cash flow 12,587 11,020 35,571 28,095
ROCE, % 16.8 18.6 13.3 15.9
Personnel at end of the period 3,902 3,929 3,902 3,929

President and CEO Juha Näkki:

Changes in the operating environment swayed market demand and made forecasting difficult throughout the year. Increased uncertainty due to geopolitical tensions, especially rising interest rates, significantly impacted our customers' investment willingness, leading to prolonged decision-making on new projects. The year started with a reasonably good demand situation, but in the second quarter of the year we saw a clear decrease in demand, especially in the Software and Embedded Solutions service area. The orders received by our customers started to decrease in the second quarter, and the decreasing continued until the end of the year in several industries. Due to this, the demand situation also weakened in the Engineering Solutions and Technical Communication Solutions service areas in the second half of the year. However, investments related to the defense industry, energy efficiency and accelerating the green transition continued to grow, which leveled the decline in demand.

Despite the difficult operating environment, we managed to increase our revenue slightly during the year. We completed two acquisitions and thanks to our versatile service offering we also managed to grow organically during the year. This was supported by success in the outsourcing business, especially in the Engineering Solutions service area.

Operating profit EBITA fell short of our target level and we cannot be satisfied with this. In the second quarter, the profitability of the Software and Embedded Solutions service area fell due to a clear weakening of demand, and in the third quarter, the profitability of the Technical Communication Solutions service area was weak. The profitability of the Engineering Solutions service area remained at a good level throughout the year. As demand fell, we had to implement adaptation measures in all our service areas, and the measures yielded results. In the last quarter of the year, we again reached a 10% profit level, although we fell a little short of our full year financial guidance. Operating cash flow was at a good level throughout the year.

The changing market situation created challenges during 2023, but we managed to adapt well to the changes and I would like to thank our organization for the excellent work throughout the year. The year 2024 started in an uncertain market situation and forward-looking atmosphere. However, we assume that interest rates will decrease and demand will clearly pick up during 2024. We see a lot of growth opportunities when our customers gain enough trust in the market and investments start. We continue to develop our business, as evidenced by the Strongit acquisition in Denmark in early 2024 and the brand renewal published at the end of January. We aim for clear growth and profitability improvement for 2024, and I believe that with determined work we can achieve these goals.
Market outlook 2024

The most important factor affecting Etteplan's business is the global development of the machinery and metal industry. Continued Russian aggression against Ukraine and the further elevation of geopolitical tensions due to the conflict in the Middle East have increased uncertainty globally. Uncertainty and the rise in interest rates caused by inflation have reduced our customers' willingness to invest and weakened the demand situation in certain customer industries. Nevertheless, investments related to the defense industry, energy efficiency and accelerating the green transition are continuing to grow. There are fluctuations in demand, and the year 2024 begins in an uncertain and slightly weaker demand situation. The markets expect interest rates to fall in 2024, and we believe this will boost investments and improve the demand situation to a good level.

Financial guidance 2024

Etteplan issues guidance for revenue and operating profit (EBIT) as a numerical range and issues the following estimate:

Revenue in 2024 is as estimated to be EUR 375-415 (2023: 360.0) million, and
operating profit (EBIT) in 2024 is estimated to be EUR 28-34 (2023: EUR 25.5 million).

Disclosure procedure

This stock exchange release is a summary of Etteplan's 2023 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 8, 2024

Etteplan's President and CEO Juha Näkki will present the Company's result for 2023 in a conference call and a live webcast, held in English language, on February 8, 2024 starting at 1.00 p.m. Finnish time (EET).

Questions can be asked in Finnish and in English after President and CEO's presentation only through conference call connection. Participants must register through this link https://palvelu.flik.fi/teleconference/?id=50048363 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fpalvelu.flik.fi%2Fteleconference%2F%3Fid%3D50048363&data=05%7C02%7CMervi.Suuronen%40etteplan.com%7Cca83736002d340204f9f08dc22f46ac1%7C1f23d6d3b1584e45b7e17631cf28c804%7C0%7C0%7C638423680478228926%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=by0uGgXt5rvAkWI8rZYPH9PwdAPjvLZk3dSz2bCebDM%3D&reserved=0) to ask questions through the conference call lines. After registering the participants will receive a teleconference number and a code to join the call. The participants are asked to press *5 to join the queue for questions.

Juha Näkki's presentation can be followed as a live webcast on https://etteplan.videosync.fi/q4-2023 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fetteplan.videosync.fi%2Fq4-2023&data=05%7C02%7CMervi.Suuronen%40etteplan.com%7Cca83736002d340204f9f08dc22f46ac1%7C1f23d6d3b1584e45b7e17631cf28c804%7C0%7C0%7C638423680478202478%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=m5vgrSWKfdAlVvACVY0Bqc%2FgqqHUPjVtOb5F4nPFeDI%3D&reserved=0). The webcast starts at 1.00 p.m. Finnish time (EET). A recording of the webcast will be available later at www.etteplan.com (https://www.etteplan.com/investors).

Espoo, February 8, 2024

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