ETTEPLAN OYJ Half Year Financial Report August 8, 2024, at 1.00 p.m.

ETTEPLAN Q2 2024: The market situation weakened further

• The Group's revenue increased by 3.1 percent and was EUR 92.6 million (4-6/2023: EUR 89.8 million). At comparable exchange rates, revenue increased by 3.2 percent.
• Operating profit (EBITA) decreased by 8.0 percent and was EUR 6.8 (7.4) million, or 7.4 (8.3) percent of revenue.
• Operating profit (EBIT) decreased by 12.7 percent and was EUR 5.3 (6.1) million, or 5.8 (6.8) percent of revenue.
• Operating cash flow improved slightly and was EUR 9.0 (8.9) million.
• Basic earnings per share were EUR 0.13 (0.15).
• Etteplan specifies its financial guidance for revenue and operating profit (EBIT) within the previously communicated range and estimates: revenue in 2024 to be EUR 375-390 (previously 375-415) million, and operating profit (EBIT) in 2024 to be EUR 28-30 (previously 28-34) million.

• The Group's revenue increased by 2.7 percent and was EUR 189.7 million (1-6/2023: EUR 184.8 million). At comparable exchange rates, revenue increased by 2.6 percent.
• Operating profit (EBITA) increased by 0.1 percent and was EUR 15.0 (15.0) million, or 7.9 (8.1) percent of revenue.
• Operating profit (EBIT) decreased by 2.8 percent and was EUR 12.0 (12.4) million, or 6.3 (6.7) percent of revenue.
• Operating cash flow improved and was EUR 17.0 (16.1) million.
• Basic earnings per share were EUR 0.29 (0.32).

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 4-6/2024 4-6/2023 1-6/2024 1-6/2023 1-12/2023
Revenue 92,623 89,849 189,741 184,803 359,951
Operating 6,826 7,422 15,012 14,991 30,883
profit (EBITA)
EBITA, % 7.4 8.3 7.9 8.1 8.6
Operating 5,335 6,114 12,031 12,373 25,540
profit (EBIT)
EBIT, % 5.8 6.8 6.3 6.7 7.1
Basic earnings 0.13 0.15 0.29 0.32 0.66
per share, EUR
Equity ratio, % 38.2 37.3 38.2 37.3 40.9
Operating cash 8,973 8,916 17,028 16,095 35,571
flow
ROCE, % 10.8 13.4 12.0 13.3 13.3
Personnel at 3,900 3,942 3,900 3,942 3,902
end of the
period

President and CEO Juha Näkki:

The market situation weakened further in the second quarter. The uncertainty of the operating environment, interest rates decreasing slower than expected and our customers' generally declining order backlogs slowed our customers' decision-making on new investments. Demand for delivery related project engineering also weakened as order backlogs declined.

Our revenue increased slightly, supported by acquisitions, and our cash flow remained strong, but profitability remained at a modest level for us in the difficult demand situation. We implemented adaptation measures in all of our service areas in order to improve operational efficiency and profitability in the coming quarters.

However, we were once again able to demonstrate the strength of our diverse service offering in a difficult market situation. We have won several outsourcing contracts, which will have a positive impact on our business in the future, and we have gained new customers outside our own market areas. During the review period, we announced a strategic partnership with Konoike, a Japanese provider of operational services. The strategic framework agreement proofs the competitiveness of our service solutions and our expertise in the global operating environment. 

We continued to develop our company despite the challenging market situation. We developed our service offering, in which artificial intelligence will play a significant role. We have already implemented our first AI projects in the Technical Communication Solutions service area, and we see a lot of opportunities there. We acquired AFFRA AB, a Gothenburg-based company that serves the automotive industry and strengthens our Software and Embedded Solutions service area. We also acquired a minority stake in BJIT, an IT services company based in Bangladesh.

BJIT will initially provide us with a flexible and highly cost-competitive option to support our customers' software development, digitalization and digital product data management. In the future, we will expand our co-operation with BJIT across all of our service areas, which will increase our competitiveness and create new growth opportunities for both Etteplan and BJIT. The unfortunate disorder in Bangladesh has had only a minor impact on BJIT's business. According to our discussions BJIT's employees are safe and we expect the situation to calm down in the next few weeks. We are actively monitoring the situation and expect the disorder to cause only a small delay in the start of our co-operation with BJIT.

Due to the difficult first half of the year, we specified our guidance towards the lower end of the specified range. Nevertheless, we still expect investments to start in the latter half of the year, boosted by decreasing interest rates, and we expect the demand situation to improve to a good level.  When this happens, we will once again be ready to accelerate our profitable growth through our competitive service offering and service solutions. 

Market outlook 2024

The most important factor affecting Etteplan's business is the global development of the machinery and metal industry. The uncertainty caused by geopolitical tensions, interest rates decreasing slower than expected and our customers' generally declining order backlogs are affecting our customers' willingness to invest and keeping the demand situation at a low level in certain customer industries. Investments related to the defense industry, energy efficiency and accelerating the green transition are still at a good level. Decreasing interest rates have not yet had an impact on demand, but we expect that the decrease in interest rates will accelerate investments towards the end of the year. We also expect the demand situation to improve to a good level during the latter part of the year.

Financial guidance 2024 (August 8, 2024)

Etteplan specifies its financial guidance for revenue and operating profit (EBIT) within the previously communicated range and issues the following estimate:

Revenue in 2024 is estimated to be EUR 375-390 (2023: 360.0) million, and
operating profit (EBIT) in 2024 is estimated to be EUR 28-30 (2023: 25.5) million.

Previous financial guidance 2024 (May 8, 2024)

Etteplan keeps its guidance for revenue and operating profit (EBIT) intact 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: 25.5) million.

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-June 2024 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 (https://www.etteplan.com/investors).

Conference call and live webcast today, August 8, 2024

Etteplan's President and CEO Juha Näkki will present the Company's results for January-June 2024 in a conference call and a live webcast, held in English language, on August 8, 2024 starting at 2.30 p.m. Finnish time (EEST).

Questions can be asked in Finnish and in English after the President and CEO's presentation only through conference call connection. Participants must register through this link https://palvelu.flik.fi/teleconference/?id=50048365 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/q2-2024 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fetteplan.videosync.fi%2Fq2-2024&data=05%7C02%7CMervi.Suuronen%40etteplan.com%7C6a9aa87409fa45e070c508dc912536f2%7C1f23d6d3b1584e45b7e17631cf28c804%7C0%7C0%7C638544836236560986%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=1AS%2FV2%2F2C4DdnK2IpTaUL99VcBTpiCuRxp1LmNcGYoY%3D&reserved=0). The webcast starts at 2.30 p.m. Finnish time (EEST). A recording of the webcast will be later available at www.etteplan.com (https://www.etteplan.com/investors).

Espoo, August 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 (https://www.etteplan.com/investors).

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