ETTEPLAN Q3 2022: Forward with strong operational performance
ETTEPLAN Oyj Interim Report October 31, 2022, at 9.00 a.m.
ETTEPLAN Q3 2022: Forward with strong operational performance
Key points July-September 2022
- The Group’s revenue grew by 20.1 percent and was EUR 80.3 million (7-9/2021: EUR 66.9 million). At comparable exchange rates, revenue increased by 21.0 percent.
- Operating profit (EBITA) grew by 24.3 percent and was EUR 7.1 (5.7) million, or 8.8 (8.5) percent of revenue.
- Operating profit (EBIT) grew by 25.4 percent and was EUR 5.8 (4.6) million, or 7.2 (6.9) percent of revenue.
- The combined effect of non-recurring items on operating profit (EBITA) and operating profit (EBIT) was EUR -0.7 (-0.2) million in July-September and EUR -1.3 (-0.6) million in January-September. Non-recurring costs were exceptionally high due to the offer made for Semcon AB.
- Operating cash flow was EUR 4.1 (0.2) million.
- Basic earnings per share were EUR -0.03 (0.14).
- Etteplan issued a public offer to the shareholders of Semcon AB on August 23, 2022. The conditions of Etteplan’s offer were not fulfilled due to a competing purchase offer. Etteplan did not raise its offer, and the offer consequently lapsed on October 6, 2022. Etteplan recognized significant non-recurring costs related to the preparation of the transaction in the third quarter. The fair value measurement of a currency hedge related to the preparation of the transaction had a significant negative impact on financing items and, consequently, earnings per share. The final effect of the currency hedge will be recognized in the result for the fourth quarter.
- Etteplan specifies its financial guidance for Revenue and Operating profit (EBIT) within the previously communicated range and estimates: revenue in 2022 to be EUR 345-360 (previously 340-370) million, and operating profit (EBIT) in 2022 to be EUR 28-31 (previously 28-32) million.
Key points January-September 2022
- The Group’s revenue grew by 20.6 percent and was EUR 259.1 million (1-9/2021: EUR 214.9 million). At comparable exchange rates, revenue increased by 21.2 percent.
- Operating profit (EBITA) grew by 14.2 percent and was EUR 24.2 (21.2) million, or 9.3 (9.9) percent of revenue.
- Operating profit (EBIT) grew by 12.7 percent and was EUR 20.2 (17.9) million, or 7.8 (8.3) percent of revenue.
- Operating cash flow was EUR 17.1 (13.9) million.
- Undiluted earnings per share were EUR 0.43 (0.55).
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 | 7-9/2022 | 7-9/2021 | 1-9/2022 | 1-9/2021 | 1-12/2021 |
| Revenue | 80,308 | 66,860 | 259,146 | 214,853 | 300,111 |
| Operating profit (EBITA) | 7,085 | 5,701 | 24,184 | 21,174 | 30,139 |
| EBITA, % | 8.8 | 8.5 | 9.3 | 9.9 | 10.0 |
| Operating profit (EBIT) | 5,766 | 4,597 | 20,204 | 17,921 | 25,754 |
| EBIT, % | 7.2 | 6.9 | 7.8 | 8.3 | 8.6 |
| Basic earnings per share, EUR | -0.03 | 0.14 | 0.43 | 0.55 | 0.80 |
| Equity ratio, % | 36.7 | 42.1 | 36.7 | 42.1 | 39.7 |
| Operating cash flow | 4,085 | 227 | 17,075 | 13,937 | 27,093 |
| ROCE, % | 13.2 | 12.0 | 15.4 | 15.6 | 16.0 |
| Personnel at end of the period | 4,001 | 3,625 | 4,001 | 3,625 | 3,629 |
President and CEO Juha Näkki:
Our operational performance was strong in the third quarter. Strong revenue growth continued, and profitability and cash flow were at a good level for a third quarter. The results for the review period were weakened by significant non-recurring costs related to the public offer we made for Semcon AB. Our offer was ultimately not accepted due to a competing offer. We recognized transaction and financing costs related to the project in our result, with the most significant of these being related to currency hedge, and these costs pushed our earnings per share into negative in the third quarter.
The demand situation remained good during the review period in spite of the war started by Russia and its impacts. However, there were differences in demand between customer industries and customers.
All three of our service areas performed well in a good market situation. The result of Engineering Solutions was excellent thanks to good operational efficiency, while Software and Embedded Solutions substantially improved its profitability compared to the slightly weaker previous quarter. The strong growth of Technical Documentation Solutions continued, but profitability was slightly lower than expected. This was mainly due to challenges in the service area’s business in Germany, and we have taken action to improve the situation.
We enter the final quarter of the year in an uncertain market situation. Russia’s invasion of Ukraine as well as the related acceleration of inflation and the European energy crisis are affecting the willingness to invest and demand in certain customer industries. In these uncertain conditions, we have adopted a slightly more cautious policy with regard to recruitment in order to ensure good operational efficiency and, consequently, good profitability in all circumstances. At the same time, however, we also see many opportunities related to energy efficiency and the defense industry, for example.
It was naturally a setback that the Semcon acquisition did not materialize, but we have already turned our attention toward new opportunities and we will continue the determined execution of our strategy in order to achieve our financial targets.
Market outlook 2022
The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. The COVID-19 pandemic continues to affect the market situation, especially in China. The war started by Russia in Ukraine, and the related energy crisis in Europe, increase uncertainty in the markets and accelerate inflation, which slows down investments and affects the demand situation and supply chains. On the other hand, the unstable geopolitical climate increases the demand for investments related to the defense industry, energy efficiency and the green transition. Forecasting remains difficult and the demand situation is fluctuating. We, nevertheless, expect the general demand situation to remain fairly good throughout 2022.
Financial guidance 2022 (published on October 31, 2022)
Etteplan specifies its financial guidance for Revenue and Operating profit EBIT) within the previously communicated range and estimates:
revenue in 2022 is estimated to be EUR 345-360 (2021: 300.1) million, and
operating profit (EBIT) in 2022 is estimated to be EUR 28-31 (2021: 25.8) million.
Previous financial guidance 2022 (published on August 10, 2022)
Etteplan keeps its guidance for revenue and operating profit (EBIT) intact and issues the following estimate:
revenue in 2022 is estimated to be EUR 340-370 (2021: 300.1) million, and
operating profit (EBIT) in 2022 is estimated to be EUR 28-32 (2021: 25.8) million.
Disclosure procedure
This stock exchange release is a summary of Etteplan's January-September 2022 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.
Conference call and live webcast today, October 31, 2022
Etteplan’s President and CEO Juha Näkki will present the Company’s results for January-September 2022 in a conference call and a live webcast, held in English language, on October 31, 2022 starting at 10.00 a.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://call.vsy.io/access-8444 to ask questions through the conference call lines. After registering the participant 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/2022-q3. The webcast starts at 10.00 a.m. Finnish time (EET). A recording of the webcast will be available later at www.etteplan.com.
Espoo, October 31, 2022
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
