ETTEPLAN OYJ Interim Report October 31, 2024, at 1.00 p.m.

ETTEPLAN Q3 2024: More difficult quarter than expected

• The Group's revenue was at the same level as the previous year at EUR 80.0 million (7-9/2023: EUR 80.0 million). At comparable exchange rates, revenue decreased by 0.2 percent.
• Operating profit (EBITA) decreased by 53.8 percent and was EUR 2.9 (6.3) million, or 3.7 (7.9) percent of revenue.
• Operating profit (EBIT) decreased by 71.3 percent and was EUR 1.4 (5.0) million, or 1.8 (6.2) percent of revenue.
• Operating cash flow decreased and was EUR -0.3 (7.1) million.
• Basic earnings per share were EUR 0.00 (0.10).
• Etteplan released a profit warning on August 28, 2024, and a second profit warning on October 15, 2024. According to the new estimate, the revenue is estimated to be EUR 355-370 million and operating profit (EBIT) to be EUR 18-22 million. The factors behind the profit warnings are the sharper-than-expected weakening of market demand and significant non-recurring costs.

• The Group's revenue increased by 1.9 percent and was EUR 269.7 million (1-9/2023: EUR 264.8 million). At comparable exchange rates, revenue increased by 1.6 percent.
• Operating profit (EBITA) decreased by 15.9 percent and was EUR 17.9 (21.3) million, or 6.6 (8.1) percent of revenue.
• Operating profit (EBIT) decreased by 22.4 percent and was EUR 13.5 (17.3) million, or 5.0 (6.5) percent of revenue.
• Operating cash flow decreased and was EUR 16.8 (23.0) million.
• Basic earnings per share were EUR 0.29 (0.43).

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 7-9/2024 7-9/2023 1-9/2024 1-9/2023 1-12/2023
Revenue 79,964 79,961 269,705 264,763 359,951
Operating 2,923 6,332 17,935 21,322 30,883
profit (EBITA)
EBITA, % 3.7 7.9 6.6 8.1 8.6
Operating 1,426 4,967 13,457 17,340 25,540
profit (EBIT)
EBIT, % 1.8 6.2 5.0 6.5 7.1
Basic earnings 0.00 0.10 0.29 0.43 0.66
per share, EUR
Equity ratio, % 40.2 39.3 40.2 39.3 40.9
Operating cash -0,261 7,087 16,767 22,985 35,571
flow
ROCE, % 3.3 10.0 9.2 12.2 13.3
Personnel at 3,870 4,010 3,870 4,010 3,902
end of the
period

President and CEO Juha Näkki:

Our business is suffering from the current investment slump, and the third quarter was very difficult for us. The market situation weakened throughout the review period, contrary to our expectations, and we had to lower our guidance twice: first at the end of August and again in mid-October. New investment projects were started at a very slow pace, and our customers focused mainly on cost-saving measures.

Our revenue remained at the same level as the previous year due to acquisitions, but in the difficult situation our revenue decreased organically. The market situation was particularly difficult in Finland and Germany, but the demand situation was also challenging elsewhere in Europe. In China, the trend of purchasing services developed favorably, and we managed to significantly increase the number of hours sold to the Chinese market.

As the market situation weakened, our operational efficiency declined and we had to implement new adaptation measures to improve efficiency. At the same time, we aimed to strengthen our ability to implement our new strategy for the strategic period of 2025-2027, which is currently being prepared. Adaptation measures were implemented in all of our service areas. In the Engineering Solutions service area, we also decided to discontinue the Building Technology business in Germany and focus on our core business. The adaptation measures caused significant non-recurring costs that had a negative effect on our result. The correction of an unfortunate accounting error in Sweden further lowered our profit level, and the result was weak.

In spite of the difficult situation, we continued to invest in the development of our business and service offering. The rapid development of technology, and artificial intelligence in particular, makes it essential to continue developing new solutions. We want to stay on the leading edge of development and help our customers benefit from new technologies through our service solutions. This will be a key part of our new strategy for 2025-2027, which is currently being prepared and will be published in December 2024.

We no longer believe that the market situation will improve substantially this year. We have implemented adaptation measures, and will implement new adaptation measures in the fourth quarter, if necessary. These measures are painful, but they help us ensure the restoration of profitability and, consequently, our ability to invest in continued profitable growth when the market situation improves.  
Market outlook 2024

The most important factor affecting Etteplan's business is the global development of the machinery and metal industry. The expansion of the conflict in the Middle East has increased geopolitical tensions, which further increases uncertainty in the markets. In addition, interest rates decreasing slower than expected and generally declining order backlogs are affecting our customers' willingness to invest and have further weakened the demand situation. Investments related to the defense industry are continuing at a good level. However, investments related to energy efficiency and accelerating the green transition, which were previously at a good level, have also slowed slightly. We expect the market situation to remain challenging throughout the rest of the year.

Financial guidance 2024 (published on October 15, 2024)

Etteplan lowered its guidance on October 15, 2024, and August 28, 2024.

According to the current estimate, issued on October 15, 2024:

Revenue in 2024 is estimated to be EUR 355-370 (2023: 360.0) million, and
operating profit (EBIT) in 2024 is estimated to be EUR 18-22 (2023: 25.5) million.

According to the estimate issued on August 28, 2024:

Revenue in 2024 is estimated to be EUR 360-375 (2023: 360.0) million, and
operating profit (EBIT) in 2024 is estimated to be EUR 24-27 (2023: 25.5) million.

According to the estimate issued in connection with the Q2 interim report on August 8, 2024:

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.

Disclosure procedure

This stock exchange release is a summary of Etteplan's January-September 2024 Interim Report. The complete Interim 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, October 31, 2024

Etteplan's President and CEO Juha Näkki will present the Company's results for January-September 2024 in a conference call and a live webcast, held in English language, on October 31, 2024 starting at 2.30 p.m. Finnish time (EET).

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=50048366 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fpalvelu.flik.fi%2Fteleconference%2F%3Fid%3D50048366&data=05%7C02%7CMervi.Suuronen%40etteplan.com%7C53898347680e4dd1b2bc08dcee874c13%7C1f23d6d3b1584e45b7e17631cf28c804%7C0%7C0%7C638647512062794498%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=OUSybhi4lNzK6qNWk4zJG1eu2iZ%2Faatwb%2FIpPqJ%2B6nE%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/q3-2024 (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fetteplan.videosync.fi%2Fq3-2024&data=05%7C02%7CMervi.Suuronen%40etteplan.com%7C53898347680e4dd1b2bc08dcee874c13%7C1f23d6d3b1584e45b7e17631cf28c804%7C0%7C0%7C638647512062765465%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=Oi7tlGn0XDnoUoLAQrB1vt8uESnTfU0A5zXvWCA9T7I%3D&reserved=0). The webcast starts at 2.30 p.m. Finnish time (EET). A recording of the webcast will be later available at www.etteplan.com (https://www.etteplan.com/investors).

Espoo, October 31, 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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