Changes to Etteplan’s financial reporting and financial and strategic targetBack to Releases
Etteplan Oyj Stock Exchange Release April 4, 2019 at. 14:30 p.m.
Etteplan will start measure its profitability with Operating profit (EBITA) instead of EBIT from business operations both for the Group as well as for the Service areas. Based on the decision of the Board of Directors, also the related strategic and financial target will be updated. Etteplan’s target is to reach 10 per cent Operating profit (EBITA) of revenue.
Operating profit (EBITA) is more commonly used within Etteplan’s peer companies and by starting to report it Etteplan makes it easier for investors to compare its performance against other companies in the industry.
Comparison numbers for 2018 (pro forma)
|Operating profit (EBIT)||5,731||4,385||5,653||4,415|
|Amortization on fair value adjustments at acquisitions||652||652||593||473|
|Operating profit (EBITA)||6,384||5,038||6,246||4,888|
|Premeasurements of contingent considerations||-250||-213||-200||-18|
|EBIT from business operations||6,134||4,824||6,046||4,871|
Operating profit (EBITA) = Operating profit (EBIT) + amortization on fair value adjustments in acquisitions
EBIT from business operations = Operating profit (EBIT) + amortization on fair value adjustments in acquisitions +/- premeasurements of contingent considerations
Both Operating profit (EBITA) and EBIT from business operations are non-IFRS performance measures, which provide additional information on Etteplan’s strategic and financial development.
Changes in the segment reporting
On January 1, 2019, Etteplan introduced a new global organization in which the service areas form the reporting lines instead of the previous country organization. Starting from the beginning of 2019, Etteplan has three service areas: Engineering Solutions; Software and Embedded Solutions; and Technical Documentation Solutions.
Etteplan’s business was previously conducted in one operating segment. With the organizational changes, Etteplan is also changed the internal reporting provided for the chief operating decision-maker, i.e. Etteplan’s Management Group, for decision-making. From the first Interim Report 2019 onwards, each of Etteplan’s service areas forms an operating and reporting segment of its own. With the changes to the segment reporting, Etteplan aims to increase the transparency of the implementation of the company’s business strategy and the realization of targets.
From the first Interim Report 2019 onwards, Etteplan will report, in addition to Revenue and MSI-index, Operating profit (EBITA), EBITA-% and the number of personnel for each reporting segment/Service area. As the Premeasurements of contingent considerations are only included on the Group level, the Operating profit (EBITA) equals the previously reported EBIT from business operations on the reporting segment/Service area level both for the quarters and the full year 2018.
Etteplan’s strategic and financial targets as of April 4, 2019
Growth: 15% average annual revenue growth (unchanged)
Profitability: 10% Operating profit (EBITA) of revenue (changed)
Managed Services: 65%, the share of revenue represented by Managed Services (Managed Services Index, MSI) by the end of 2019 (unchanged)
Balance sheet: >30% Equity ratio (unchanged)
For more information, please contact:
Juha Näkki, President and CEO, tel. +358 10 307 2077
Outi Torniainen, SVP, Marketing and Communications, tel. +358 10 307 3302
Etteplan in brief
Etteplan provides solutions for industrial equipment and plant engineering, software and embedded solutions, and technical documentation solutions to the world’s leading companies in the manufacturing industry. Our services are geared to improve the competitiveness of our customers’ products, services 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 2018, Etteplan had a turnover of approximately EUR 236 million. The company currently has more than 3,000 professionals in Finland, Sweden, the Netherlands, Germany, Poland and China. Etteplan's shares are listed on Nasdaq Helsinki Ltd under the ETTE ticker. www.etteplan.com