Etteplan (ETTE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 3.1% year-over-year to €92.6M, mainly supported by acquisitions and outsourcing contracts, but market demand weakened and customer decision-making slowed, leading to declining order books and profitability.

• EBITA fell 8.0% to €6.8M (7.4% margin), and EBIT dropped 12.7% to €5.3M (5.8% margin) in Q2.

• Investments continued in AI-driven service development and international expansion, including acquiring Affeo/AFFRA AB (Sweden) and a minority stake in BJIT (Bangladesh).

• New customers and partnerships were won outside core markets, notably with Konoike in Japan.

• Adaptation measures, including temporary layoffs and restructuring, were implemented to improve efficiency amid weak demand.

Financial highlights

• Q2 2024 revenue: €92.6M (+3.1% y/y); H1 2024 revenue: €189.7M (+2.7% y/y); organic revenue declined 3.3%.

• Q2 EBITA: €6.8M (7.4% margin, -8% y/y); Q2 EBIT: €5.3M (5.8% margin, -12.7% y/y); H1 EBITA: €15.0M (7.9% margin); H1 EBIT: €12.0M (6.3% margin).

• Basic EPS: €0.13 in Q2 (down 13.3% y/y), €0.29 in H1, impacted by higher financial expenses and normalized tax rate.

• Operating cash flow: €9.0M in Q2 (vs €8.9M); €17.0M in H1 (vs €16.1M); cash flow after investments: €-3.4M, impacted by acquisitions.

• Personnel: 3,900 at period end, with more staff outside Finland than in Finland for the first time.

Outlook and guidance

• 2024 revenue guidance narrowed to €375–390M (previously up to €415M); EBIT guidance specified to €28–30M (previously up to €34M).

• H2 performance depends on market demand picking up, with expectations of improvement as interest rates decline.

• Long-term growth targets to be reset at year-end; current targets for revenue and managed services share unlikely to be met.

• Investments in defense, energy efficiency, and green transition remain strong, while other sectors face weak demand.