Etteplan Oyj - Interim report (Q1 and Q3)

Etteplan 1-9/2016: Growth continued, organic growth slowed down

ETTEPLAN OYJ INTERIM REPORT
OCTOBER 27, 2016 AT 2:00 PM

Etteplan 1-9/2016: Growth continued, organic growth slowed down

Review period July-September 2016

  -- The Group’s revenue increased by 31.7 per cent and was EUR 42.0 million
     (7-9/2015: EUR 31.9 million).
  -- EBIT from business operations* was EUR 2.4 million (EUR 1.9 million), or
     5.8 per cent (5.9 per cent) of revenue. EBIT from business operations
     included exceptional items with a combined negative effect of EUR 0.3
     million (EUR 0.3 million).
  -- Operating profit (EBIT) was EUR 1.9 million (EUR 1.7 million), or 4.4 per
     cent (5.2 per cent) of revenue.
  -- The profit for the review period was EUR 1.5 million (EUR 1.3 million).
  -- Operating cash flow decreased and was EUR -3.6 million (EUR -1.7 million).
  -- Earnings per share, adjusted for the share issue, were EUR 0.05 (EUR
     0.06**).
  -- The number of personnel increased and the Group had 2,508 employees at the
     end of the review period (2,078).
  -- Etteplan is updating its estimate of market outlook and keeping its
     financial guidance unchanged.

Review period January-September 2016

  -- The Group’s revenue increased by 29.8 per cent and was EUR 130.8 million
     (1-9/2015: EUR 100.8 million). Organic growth was 2.5 (3.1) per cent.
  -- EBIT from business operations* was EUR 7.5 million (EUR 6.7 million), or
     5.7 per cent (6.6 per cent) of revenue. EBIT from business operations
     included exceptional items with a combined negative effect of EUR 1.5
     million (EUR 0.6 million).
  -- Operating profit (EBIT) was EUR 6.1 million (EUR 6.0 million), or 4.7 per
     cent (6.0 per cent) of revenue.
  -- The profit for the review period was EUR 4.7 million (EUR 4.4 million).
  -- Operating cash flow was EUR -4.2 million (EUR 2.1 million).
  -- Earnings per share, adjusted for the share issue, were EUR 0.20 (EUR
     0.20**).
  -- Etteplan acquired Espotel and Soikea Solutions in April 2016 and expanded
     its business operations in Embedded Systems and into the Internet of Things
     (IoT). Etteplan carried out a rights offering in May 2016 to finance the
     acquisitions.

*EBIT from business operations reflects the Company’s operational performance:
it does not include acquisition related items such as amortization on PPA
allocations and earn out revaluations. 
**The comparison period’s earnings per share have been issue adjusted. The
rights issue factor was 1.050. 

Market outlook

The most important factor in the development of Etteplan's business is the
global development of the machinery and metal industry. We anticipate that the
prevailing uncertainty in the world economy will slow new investments. The
relatively good growth expectations for the European market in 2016 have
weakened slightly due to increased economic uncertainty. In the Finnish market,
the market situation is expected to remain weaker than in the rest of Europe.
In Asia, the service market development is expected to continue. 

Previous estimate of market outlook

The most important factor in the development of Etteplan's business is the
global development of the machinery and metal industry. The relatively good
growth expectations for Europe in 2016 were weakened by the result of the
Brexit vote in the United Kingdom. In the Finnish market, the market situation
is expected to remain weaker than in the rest of Europe. In Asia, the service
market development is expected to continue. We expect that the good market
situation in North America will continue. 

Financial guidance March 15, 2016

We expect the revenue and operating profit for the full year 2016 to grow
significantly compared to 2015. 

Key figures

(EUR 1,000)                7-9/201  7-9/201     1-9/201  1-9/201     1-12/201   
                                 6        5           6        5            5   
------------------------------------------------------------------------------  
Revenue                     41,986   31,880     130,800  100,770      141,143   
EBIT from business           2,425    1,894       7,514    6,656        9,540   
 operations                                                                     
EBIT from business             5.8      5.9         5.7      6.6          6.8   
 operations, %                                                                  
Operating profit (EBIT)      1,866    1,655       6,115    6,011        8,594   
EBIT, %                        4.4      5.2         4.7      6.0          6.1   
Basic earnings per share,     0.05     0.06  *     0.20     0.20  *      0.28  *
 EUR                                                                            
Equity ratio, %               39.7     37.0        39.7     37.0         37.8   
Operating cash flow         -3,640   -1,717      -4,174    2,115        9,932   
ROCE, %                       11.2     14.0        12.1     15.9         17.4   
Personnel at end of the      2,508    2,078       2,508    2,078        2,074   
 period                                                                         
*Comparison periods' earnings per share have been issue adjusted. The rights    
 issue factor was 1.050.                                                        

President and CEO Juha Näkki:

The third quarter got off to a very slow start after the summer holidays.
Market uncertainty was visible particularly in equipment and plant engineering
in Finland, where demand was at a low level. In addition more holidays fell on
the third quarter than usual. Due to these reasons, our organic growth was
negative and our profitability was weaker than expected. 

Nevertheless, our revenue continued to grow, boosted by acquisitions. Many
digitalization related projects started throughout the review period. Towards
the end of the review period also the demand situation in equipment and plant
engineering recovered slightly. 

The revenue of our Engineering Services service area decreased primarily due to
business being transferred to the Embedded Systems and IoT service area. The
number of new equipment and plant investment projects was very low especially
in Finland, which also affected revenue development. Nonetheless, our quotation
base in engineering services is strong and interest in our service solutions is
at a good level. The significant outsourcing agreement we signed with Outokumpu
after the end of the review period is an excellent example of this. Our local
business in China also developed favorably. 

In technical documentation, strong growth continued and interest in our
outsourcing solutions, in particular, is at a very good level. We improved our
profitability slightly compared to the preceding quarter. This was attributable
to the positive development of our business in Germany and a significant order
received from the German Ministry of the Interior. 

The Embedded Systems and IoT service area achieved excellent development. Our
customers trust in our strong expertise and we received several large orders
during the review period. The integration of Espotel and Soikea into Etteplan
is progressing as planned. In the third quarter, we proceeded with system
integration, which affected the Group’s result in the form of non-recurring
costs. 

As we move on from a challenging third quarter, we head into the final quarter
of the year in a slightly better market situation. I am confident that our
strong market position and quotation base will see our business develop
favorably during the remaining part of the year. 

Disclosure procedure

Etteplan follows the disclosure procedure enabled by Disclosure obligation of
the issuer (7/2013) published by the Finnish Financial Supervision Authority.
This stock exchange release is a summary of Etteplan's January-September 2016
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. Investors are advised to review the complete interim report
with tables. 

Conference call and live webcast today, October 27, 2016

Etteplan’s President and CEO Juha Näkki will present Company’s results for
January-September 2016 in a conference call and a live webcast for analysts and
investors, held in English language, on October 27, 2016 starting at 3.30 p.m.
Finnish time (EEST). 

To participate in the conference call please dial 5-10 minutes prior to the
start of the conference to +358 (0)9 7479 0360, the event password is 684516.
Questions can be asked in English after President and CEO’s presentation only
through conference call connection. 

Juha Näkki’s presentation can be followed as a live webcast on
http://www.goodmood.fi/webcaster/accounts/etteplan/live/. The webcast starts at
3.30 p.m. Finnish time (EEST). A recording of the webcast will be later
available at www.etteplan.com/Investors. 

Vantaa, October 27, 2016

Etteplan Oyj

Board of Directors


Additional information:
Juha Näkki, President and CEO, tel. +358 400 606 372

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

Etteplan's services cover engineering, technical documentation, embedded
systems and IoT solutions. Our customers are the world's leading companies in
the manufacturing industry. Our services are geared to improve the
competitiveness of our customers' products and engineering processes throughout
the product life cycle. The results of Etteplan's innovative engineering can be
seen in numerous industrial solutions and everyday products. 

In 2015, Etteplan had turnover of EUR 141.1 million. The company has about
2,400 professionals in Finland, Sweden, the Netherlands, Germany, Poland and
China. Etteplan's shares are listed on Nasdaq Helsinki Ltd under the ETT1V
ticker.

Priedai:

Etteplan_Q3_2016_EN.pdf