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, despite weak market demand and slow customer decision-making.

• Profitability declined as EBITA fell 8.0% to €6.8M (7.4% margin), and EBIT dropped 12.7% to €5.3M (5.8% margin) compared to Q2 2023.

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

• New customer wins and strategic partnerships, such as with Japan's Konoike, contributed to growth and entry into new markets.

• 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), down from €7.4M (8.3%); Q2 EBIT: €5.3M (5.8% margin), down from €6.1M (6.8%).

• Basic EPS: €0.13 in Q2 (down 13.3% y/y); H1 EPS: €0.29 (vs €0.32).

• Operating cash flow: €9.0M in Q2 (vs €8.9M); €17.0M in H1 (vs €16.1M); cash flow after investments was negative due to acquisitions.

• Personnel at period end: 3,900, with more employees outside Finland than within, down 1.1% year-over-year.

Outlook and guidance

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

• Management expects demand to improve in H2 2024 as interest rates decrease and investments pick up.

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

• Full-year revenue target of €500M will not be met; new targets to be set at year-end.