2007-04-27 09:00:00 CEST
2007-04-27 09:00:00 CEST
REGULATED INFORMATION
Etteplan Oyj - Quarterly report
INTERIM REPORT 1 JANUARY - 31 MARCH 2007
INTERIM REPORT 1 JANUARY - 31 MARCH 2007
ETTEPLAN'S REVENUE GROWS BY 44%; OPERATING PROFIT EUR 4.3 MILLION
- Consolidated revenue: EUR 32.2 million (22.4 million)
- Operating profit: EUR 4.3 million (1.5 million)
- Net profit: EUR 3.1 million (0.9 million)
- Earnings per share: EUR 0.32 (0.09)
- Personnel at the end of the report period: 1,707 employees (1,329)
(Figures in parenthesis refer to the corresponding period of the previous year,
unless otherwise indicated.)
Etteplan achieved all the goals set for the period in their entirety. A good
demand situation for design orders and information technology raised the
workload level. This, coupled with long-term, systematic efforts to improve
co-operation between Group units, had a favourable impact on earnings. The
divestment of NATLABS Oy (an EMC measurement laboratory) also improved operating
profit with capital gains of EUR 0.84 million.
Organic growth accounted for 18% of the increase in revenue. The acquisitions of
TeknikPartner AB and LCA Engineering Oy primarily accounted for the rest. Growth
was brisk in both of the company's segments (Delivery Design and Product
Development). Demand for design services improved in all market areas with a
significant increase in revenue in Sweden in particular.
Revenue and result
Etteplan's revenue showed a clear increase on the previous year, up 43.8% to EUR
32.2 million (EUR 22.4 million).
Operating profit during the review period totalled EUR 4.3 million (EUR 1.5
million), representing 13.2% of revenue (6.7%). Profit for the period before
taxes was EUR 4.2 million (EUR 1.5 million). Taxes amounted to EUR 0.9 million
(EUR 0.4 million). Taxes have been periodized in line with the result for the
review period. Income tax rate calculated from profit before taxes in the
consolidated income statement was 21%. Tax-exempt capital gains from the
divestment of NATLABS Oy shares lowered the tax rate for the period.
Net profit for the period amounted to EUR 3.1 million (EUR 0.9 million).
Earnings per share were EUR 0.32 (EUR 0.09). Equity per share grew by 27.2% to
EUR 2.40 (EUR 1.89). Return on investment showed a clear improvement on the
comparison period at 49.6% (27.4%).
Business operations
Etteplan operates as a partner of large and medium-sized internationally
operating industrial companies, providing industrial engineering design
services. The Group's design services are divided into two segments: Delivery
Design and Product Development.
The Delivery Design segment provides a broad range of design services for the
design of production facilities and the machinery and equipment in them. Related
commissioning, site supervision and training services are also offered. The
Product Development segment provides diversified design and implementation
services for product development, as well as services for product information
content production. Services are based on long-term partnerships with customers
and are aimed to ensure the customer's competitiveness in the future.
Etteplan's customer base comprises equipment manufacturers and end-users in the
wood-processing industry as well as the process, automotive, lifting and
hoisting equipment and electronics industries.
Major events in the first quarter
In accordance with the letter of intent signed in October 2006 with Larox
Corporation, 10 employees working on design and documentation tasks at Larox's
Finnish locations transferred to Etteplan as of 1 January 2007.
Etteplan Oyj acquired the entire share capital of Kouvola company LCA
Engineering Oy in January. The company was established in 1993 and provides
process and plant design services to both industrial companies and machinery and
device suppliers, especially those in the wood processing industry. The
agreement will bolster Etteplan's position in wood processing projects in
particular and also those involving investments in Russia.
Etteplan increased its share capital by 196,347 shares and EUR 49,086.75 by
means of a directed share issue in February. The new shares were used as payment
in the acquisition of LCA Engineering Oy. The new shares were entered into the
Trade Register on 7 February 2007 and became subject to public trading on the
Helsinki Stock Exchange together with the old shares on 8 February 2007. The
company's share capital after the increase totals EUR 2,492,319.25 and 9,969,277
shares. The increase in share capital was reported in a stock exchange release
dated 7 February 2007.
In March, Etteplan signed an agreement to broaden co-operation with Intertek. As
part of the agreement, the entire share capital, operations and staff of
Etteplan's subsidiary NATLABS Oy were transferred to Intertek. The agreement is
in line with Etteplan's strategy to focus on providing its customers with
industrial technology design services in the international market. As a result
of the co-operation, Etteplan will be able to offer its customers not just
design but also approval and testing services through Intertek's global network.
The Annual General Meeting held in March granted the Board of Directors the
authorization to:
- decide on granting a maximum of 4,000,000 shares in one or more lots through
the issuance of shares, option rights or other special rights entitling to
shares pursuant to Chapter 10, Section 1 of the Finnish Companies Act. The
authorization includes the right to decide to issue new shares or assign own
shares held by the company. The authorization is valid for three (3) years,
beginning from the Annual General Meeting's decision on 29 March 2007 and ending
on 29 March 2010.
- decide to acquire the company's own shares in one or more lots using the
company's non-restricted shareholders' equity. Acquisition of the company's own
shares may be carried out otherwise than in proportion to the holdings of the
shareholders, that is, the Board of Directors may decide on a directed
acquisition of own shares. The authorization is valid for eighteen (18) months,
beginning from the Annual General Meeting's decision on 29 March 2007 and ending
on 29 September 2008.
The decisions of the Annual General Meeting are presented in detail in a stock
exchange release dated 29 March 2007.
Etteplan received numerous major orders from key customers during the review
period. As an example Etteplan Design S.r.l from Italy has received an
assignment from Metso Paper Como which includes the assembly and detail design
of a paper machine rebuild. The company also signed a continuation agreement
with Nokian Tyres concerning plant and building technology design for the
extension to its Vsevolozhsk tyre plant in the St Petersburg area. Etteplan is
also designing building technology for two major logistics centres opening in
Gorelovo near St Petersburg.
Personnel
The Etteplan Group's operations and number of personnel have grown steadily. The
Group's average payroll during the report period was 1,703 employees (1,327) and
the number of staff at the end of the period was 1,707 employees (1,329). The
number of employees rose due to active recruitment and the business operations
transferred to the Group; these employees are almost solely allocated to the
implementation of customer projects. 739 people worked for the Group abroad.
Capital expenditures
The Group's total capital expenditures amounted to EUR 2.4 million (EUR 0.4
million). The largest single investment was the acquisition of the entire share
capital of LCA Engineering Oy. Other capital expenditures were earmarked for the
implementation and development of business operations.
Risks and risk management
Risk management within the Group encompasses corporate governance within the
Group as well as the management of operational and financial risks. The Group's
corporate governance guidelines and quality system are the means used for the
supervision of administrative risk within the Group. The risks are itemized in
the Notes to the 2006 financial statements.
Unpredictable changes in customers' order books pose the greatest risk to the
company's business. Owing to their nature, the company's business operations
involve no significant credit, environmental or foreign currency risks.
Financial position
Compared to the corresponding quarter of the previous year, Etteplan's financial
structure has changed as a result of acquisitions made by the company and their
financing arrangements. Total assets at 31 March 2007 increased by 55.0% to EUR
61.3 million (EUR 39.6 million). Balance sheet goodwill rose to EUR 19.9 million
(EUR 9.0 million). The Group's cash and cash equivalents totalled EUR 7.1
million (EUR 5.3 million). The Group's interest-bearing liabilities increased as
a result of financial arrangements for an acquisition carried out in the second
quarter of 2006 and stood at EUR 10.2 million (EUR 2.2 million) at the end of
the period. The equity ratio declined to 40.5% (49.5%).
Shares
The Etteplan Oyj share (ETTIV) has been quoted in the Nordic Exchange's Small
Cap market capitalization group in the Industrials sector as of 2 October 2006.
Previously, the company's share was listed on the Main List of the Helsinki
Stock Exchange.
The company's share capital at 31 March 2007 was EUR 2,492,319.25 and the number
of shares outstanding was 9,969,277. The company has one series of shares and
the accounting countervalue of a share is EUR 0.25. All shares confer an equal
right to a dividend and the company's funds.
The company did not hold any of its own shares on 31 March 2007 and did not buy
back any of its own shares during the review period.
The authorizations to increase the share capital, to take convertible loans
and/or issue option rights, and buy back and transfer own shares (granted to the
Board of Directors at the Annual General Meeting held on 29 March 2007) remain
valid. No new authorizations were exercised during the review period. The
authorizations granted to the Board of Directors are presented in detail in a
stock exchange release dated 29 March 2007.
Outlook for the near future
The company holds a stable position in the Nordic countries, its main market
area. Demand for industrial technology design services is forecast to remain
good in all key market areas throughout the current quarter.
Company's full-year revenue is expected to grow and a notable improvement is
expected in the result for 2007. Growth will occur both organically and through
acquisitions.
The information presented herein has not been audited.
Hollola, 27 April 2007
Etteplan Oyj
Board of Directors
For additional information, contact: CEO Heikki Hornborg,
tel. + 358 400 873 063 or Pia Björk, CFO, Vice President, Corporate Planning,
tel. +358 400 241 815
APPENDICES
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Key figures
Notes to the Interim Report
Etteplan Oyj's Q2 interim report for 2007 will be published on 8 August 2007.
Releases and other corporate information are available on Etteplan's website at
www.etteplan.com.
DISTRIBUTION
Helsinki Stock Exchange
Principal media
CONSOLIDATED INCOME STATEMENT
(EUR 1 000) 1-3/2007 1-3/2006 1-12/2006
Revenue 32 232 22 416 101 698
Other operating income 906 46 219
Materials and services -1 726 -1 040 -6 728
Staff costs -22 226 -16 015 -71 111
Other operating expenses -4 424 -3 393 -15 213
Depreciation and amortisation -496 -502 -2 042
Operating profit 4 265 1 512 6 823
Financial income 34 8 172
Financial expenses -94 -30 -299
Profit before taxes 4 205 1 490 6 695
Income taxes -892 -446 -2 096
Profit for the financial period 3 313 1 044 4 599
Net profit for the financial
period attributable to
minority interest -190 -158 -427
Net profit for the financial
period attributable to equity
holders of the Company 3 123 887 4 172
Basic earnings per share, EUR 0.32 0.09 0.43
CONSOLIDATED BALANCE SHEET
(EUR 1 000) 31.3.2007 31.3.2006 31.12.2006
ASSETS
Non-current assets
Property, plant and equipment 2 244 3 239 2 759
Goodwill 19 919 8 997 18 580
Other intangible assets 2 176 2 008 2 124
Investments available for sales 420 415 425
Other long-term receivables 822 0 852
Deferred tax assets 251 115 88
Non-current assets, total 25 831 14 773 24 829
Current assets
Stocks 0 25 0
Trade and other receivables 28 329 19 377 24 191
Financial assets at fair value
through income statement 0 475 0
Current tax assets 75 81 28
Cash and cash equivalents 7 075 4 821 6 174
Current assets, total 35 479 24 779 30 393
TOTAL ASSETS 61 310 39 552 55 222
EQUITY AND LIABILITIES
Capital attributable to
equity holders
Share capital 2 492 2 403 2 443
Share premium account 9 179 8 269 9 179
Unrestricted equity fund 1 241 0 0
Cumulative translation adjustment -407 -162 43
Retained earnings 8 339 6 759 6 759
Net profit for the financial
period 3 123 887 4 172
Capital attributable to
equity holders, total 23 968 18 156 22 596
Minority interest 861 1 291 872
Equity, total 24 829 19 448 23 468
Non-current liabilities
Deferred tax liability 954 178 1 046
Non-current interest-bearing
liabilities 8 575 1 455 8 967
Non-current liabilities, total 9 529 1 632 10 013
Current liabilities
Current interest-bearing
liabilities 1 621 779 1 837
Trade and other payables 25 331 17 692 19 904
Current liabilities, total 26 952 18 471 21 741
Liabilities, total 36 481 20 104 31 754
TOTAL EQUITY AND LIABILITIES 61 310 39 552 55 222
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1 000) 1-3/2007 1-3/2006 1-12/2006
OPERATING CASH FLOW
Cash receipts from customers 28 749 21 819 99 290
Cash receipts from other
operating income 68 37 194
Operating expenses paid 27 453 20 682 90 851
OPERATING CASH FLOW BEFORE
FINANCIAL ITEMS AND TAXES 1 364 1 175 8 633
Interest and payment paid
for financial expenses 90 18 249
Interest received 34 8 172
Income taxes paid 434 255 1 782
OPERATING CASH FLOW (A) 874 909 6 773
INVESTMENT CASH FLOW
Purchase of tangible and
intangible assets 265 270 1 612
Acquisition of subsidiaries 294 22 9 952
Disposal of subsidiaries 624 0 0
Proceeds from sale of tangible
and intangible assets 22 82 212
Purchase of other investment 0 -10 476
Proceeds from repayments of loans 540 0 0
Proceeds from sale of investment 5 0 464
INVESTMENT CASH FLOW (B) 632 -200 -11 363
FINANCING CASH FLOW
Short-term loans, increase 0 0 1 332
Short-term loans, decrease 0 221 1 332
Long-term loans, increase 51 0 11 335
Long-term loans, decrease 579 112 3 108
Dividend paid and other
profit distribution 0 0 1 923
FINANCING CASH FLOW (C) -527 -333 6 305
VARIATION IN WORKING CAPITAL (A + B + C)
INCREASE (+)/DECREASE (-) 978 377 1 715
ASSETS IN THE BEGINNING
OF THE FINANCIAL PERIOD 6 174 4 445 4 445
EXCHANGE GAINS OR LOSSES ON
CASH AND BANK EQUIVALENTS 77 1 -14
ASSETS AT THE END OF
OF THE FINANCIAL PERIOD 7 075 4 821 6 174
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(EUR 1 000)
Share Share Unres- Cumula- Retained Minority Total
capital premium tricted tive earnings interest
account equity trans-
fund lation
adjust-
ment
Equity
1.1.2006 2 403 8 269 0 -251 8 682 1 360 20 463
Dividends -1 923 -184 -2 107
Share issue 40 910 950
Changes in
ownership -731 -731
Net profit for
the financial
period 4 172 427 4 599
Translation
adjustment 294 294
Equity
31.12.2006 2 443 9 179 0 43 10 931 872 23 468
Equity
1.1.2007 2 443 9 179 0 43 10 931 872 23 468
Dividends -2 592 -201 -2 793
Share issue 49 1 241 1 290
Net profit for
the financial
period 3 123 190 3 313
Translation
adjustment -449 -449
Equity
31.3.2007 2 492 9 179 1 241 -407 11 462 861 24 829
KEY FIGURES
1-3/2007 1-3/2006 1-12/2006 Changes
for prev.
year
Revenue 32 232 22 416 101 698 43.8 %
Operating profit 4 265 1 512 6 823 182.1 %
Operating profit, % 13.2 6.7 6.7
Profit before taxes 4 205 1 490 6 695 182.2 %
Profit for the
financial period 3 123 887 4 172 252.1 %
Return on equity, % 54.9 20.9 20.9
Return on investment, % 49.6 27.4 24.6
Equity ratio, % 40.5 49.5 42.6
Gross interest-bearing debt 10 196 2 234 10 804 356.4 %
Net gearing, % 12.6 -15.7 19.7
Balance sheet total 61 310 39 552 55 222 55.0 %
Gross investments 2 436 433 12 512 462.6 %
Earnings per share, EUR 0.32 0.09 0.43 250.9 %
Equity per share, EUR 2.40 1.89 2.31 27.2 %
Personnel, average 1 703 1 327 1 501 28.4 %
Personnel at the end of
the period 1 707 1 329 1 586 28.4 %
NOTES TO THE INTERIM REPORT
General
The parent company of the Etteplan Group is Etteplan Oyj. Etteplan Oyj (the
Company) is a Finnish public limited company that has been established under
Finnish law. The Company is domiciled in Hollola. The Company's shares are
listed on the Nordic Exchange List.
Etteplan Oyj and its subsidiaries provide high-quality industrial technology
design services. The business is divided into two segments: Product Development
and Delivery Design. The Other Operations segment consists of administration.
The Group's main market area is Europe. In respect of our core customers,
Etteplan's service extends worldwide.
A copy of the consolidated financial statements can be obtained from our website
at www.etteplan.com or from the Head Office of the Group's parent company at the
address Terveystie 18, 15860 Hollola.
Etteplan Oyj's Board of Directors approved the interim report for publication at
its meeting on 27 April 2007.
Basis of preparation
This interim report has been prepared in accordance with International Financial
Reporting Standards (IFRS) recognition and measurement policies, but not in
compliance with all the requirements of IAS 34 Interim Financial Reporting. The
interim report applies the same accounting policy and methods as the 2006
financial statements. Monetary figures in this interim report are presented in
thousands of euros. All the figures in the financial statement tables have been
rounded up or down, due to which the sums of figures may deviate from the sum
total presented.
New standards, amendments and interpretations became effective as of 1 January
2007. It is the view of the company's management that their adoption will not
have a significant effect on the Group's interim report.
Business combinations
On 10 January 2007, the Group acquired a 100% holding in LCA Engineering Oy, a
company that provides design services. Company agreements and customerships are
not recognized as an asset in connection with this acquisition, as the customer
agreements are non-binding outline agreements by nature and therefore cannot be
separated or sold as such. According to Etteplan Oyj's management's opinion, the
cost of acquisition exceeding the net assets of the acquired company is goodwill
by nature as it is related to the competence of the management and personnel of
the acquired company, its market position and the operational synergies sought.
Income taxes
The taxes in the consolidated income statement have been calculated using the
tax rate appropriate for the forecast full-year result. The estimated average
effective tax rate for the year has been set separately for each country. The
effective tax rate for 2007 in this interim report is 21% (2006: 31%). The
lowered tax rate is due to tax-exempt capital gains from the divestment of a
subsidiary.
Operating profit
The operating profit in this interim report contains EUR 837 thousand in
proceeds from the divestment of Etteplan's subsidiary NATLABS Oy. It has been
recorded as a non-recurring item under other operating income.
Events after the close of the financial period
The Annual General Meeting held on 29 March 2007 approved the Board of
Directors' proposal concerning the dividend payout. The dividend payout date was
12 April 2007, meaning that dividends had not yet been paid to shareholders when
this interim report was drawn up. The dividend of EUR 0,26 on each share, to a
total of EUR 2.6 million was deducted from shareholders' equity on 31 March
2007.
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