Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Etteplan Oyj (FRA:EPL, Financial) managed to achieve slight revenue growth in 2024 despite challenging market conditions, supported by acquisitions.
- The company saw positive developments in the defense and energy sectors, with increased demand in these areas.
- China showed substantial demand growth, particularly in the second half of the year, driven by a trend towards buying services.
- Operational margins began to improve across all service areas towards the end of the year, indicating effective adaptation measures.
- Etteplan Oyj (FRA:EPL) has initiated a new strategy focusing on AI-driven solutions, aiming to transform service delivery and increase value for customers.
Negative Points
- The overall market situation was difficult, with declining customer orders and slow decision-making due to political uncertainties.
- Significant restructuring costs and non-recurring items burdened financial results, particularly in Q3 and Q4.
- Key financial metrics such as EBITDA and EPS saw notable declines, with EBITDA dropping by 21% and EPS impacted by lower profitability.
- The Finnish and German markets were particularly challenging, with temporary layoffs affecting nearly 10% of operational personnel in Finland.
- Organic revenue development was negative, with a 7.2% drop in Q4, and key account revenue decreased by 10%.
Q & A Highlights
Q: The guidance low range seems puzzling, given last year's net sales and the recent acquisition. What scenario is this based on?
A: Juha Nakki, CEO, explained that the low range is a cautious estimate. The company is starting the year with a higher number of temporary layoffs compared to last year, reflecting a low starting point. If the market does not improve, the numbers could be worse, but the cautious approach is deemed necessary given past profit warnings.
Q: Can you elaborate on the industries where you see orders picking up?
A: Juha Nakki noted that cargo handling and marine sectors are showing slightly increasing order intakes. While defense and energy sectors were strong last year, these new signs are positive, though widespread improvement across industries is needed for a significant market recovery.
Q: The automotive sector seems to be performing better than expected. What is driving this demand?
A: The CEO highlighted that the demand is driven by electrification and new developments in powertrain technology, particularly in the truck segment. Etteplan has focused on this area, gaining inroads and benefiting from the necessary changes in the industry.
Q: The AI-related goal is ambitious. How do you plan to achieve it?
A: Juha Nakki stated that the goal involves both developing new AI-driven services and converting existing offerings to include AI components. The focus is on creating solutions where AI is crucial, enhancing competitiveness and customer benefits. Acquisitions may also play a role, but the emphasis is on integrating AI into service solutions.
Q: What actions are being taken to improve organic growth?
A: The CEO mentioned that offering development, particularly integrating AI into service solutions, is key. The company is enhancing existing offerings and introducing new AI components to increase customer value. Areas like data management are expected to grow significantly with AI, providing opportunities for organic growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
