Etteplan Oyj and future prospects?

[Juha_Kinnunen]

It’s nice to see some life in the thread!

The atmosphere seems to be exactly what I would expect after the past year. I have followed Etteplan for over a decade now, which I believe gives some perspective on the company’s situation. Additionally, there are many other companies in the sector and in B2B services in general that are also complaining about the market situation, especially in Finland. Of course, that doesn’t mean I’m right with my recommendation, but I think it gives me a pretty good overall picture.

@Loiskuttaja

Personally, I don’t believe Etteplan will do very well in the future either. The company is unable to compete for top talent because they would actually have to pay reasonable wages. This is reflected in top performers leaving in an increasingly tight talent market. I work at the outfit in question myself, and I wouldn’t invest in the company.

Thanks for the comment! Has the talent market really tightened at the same time as demand has decreased? Are so many people retiring in Finland too (a clear problem in Germany)? Of course, there is always a shortage of certain skills, but I haven’t thought of this as a broader trend right at this moment.

In my experience, there have always been experts who have found better pay or more appreciation in other companies. I personally know some people in the sector who have also been at Etteplan and left. This is very natural, and they didn’t seem bitter. It hasn’t been an obstacle to the company’s success before, and I find it hard to believe it would be in the future either. In my opinion, it’s just the market’s pricing mechanism and part of the industry dynamics. In any case, I appreciate all comments from experts in the sector, especially when they disagree and bring new information to me

@Ummon

Yeah, with growth realized, 500 million in turnover, I wonder if it’s happening…

This would have been realized if the Semcon acquisition had gone through in 2022. It didn’t, as they withdrew from the price competition. I reckon it was probably good that they didn’t enter a down market with high leverage. After that, it was practically known that the goal wouldn’t be reached. However, it remains the goal as long as the strategy is updated, which is coming in December. I think it’s better not to just bury it but to be honest about how it went.

@Ummon

Stock exchange releases from Etteplan’s website in order:

1. insider selling
2. interim report - doing poorly
3. profit warning
4. next year’s calendar
5. profit warning
6. interim report - doing poorly

Analysts from both Inderes and Evli are confident.
Let’s hope for the best for the company, but the performance looks interesting.

Yep, no one is cheering for this year. It has been miserable. I don’t know about Evli, but we have been on a “buy” recommendation for almost 3 weeks. No need to panic about that yet.

@Archer

This leads to your question: When the market picks up, competition for top talent will be really tough, and attracting an employee back is always harder after they have already left. As @Loiskuttaja noted, it might be difficult for Etteplan to attract these top performers to replace the “Average Joes” — especially if they are being lost to competitors/customers in the current market.

@Wallet_Buffet_Omahan

This might be a stupid question since I don’t know the industry dynamics well, but in Etteplan’s case, is it possible to hire the mentioned top performers to replace the Average Joes when the market picks up? Or is it part of the industry’s nature that good people don’t move where the money is when needed? I recall the CEO mentioning, at least indirectly in some interview amidst the turmoil, that they are saving some ammunition for better times. Or is the mentioned powder wet in Etteplan’s case?

Recruitment is one of Etteplan’s key tasks, so one would hope so. Etteplan is traditionally quite strict with idle time and people are on furloughs, so it’s no surprise that people leave. One might get the impression from the comments that they are all top experts and then only “handymen” are hired to replace them, but I don’t really believe this is the whole picture. There is demand for top experts even in a bad market, and it’s also easy to pay them if and when customers are willing to pay for them. There are certainly exceptions, and there has always been a transition both to customers and competitors. I would think of this as a similar dynamic to the basic rule of sales: if you have never lost a customer because of price, you can’t know what the “right” price level is. I certainly need to dig into this matter more!

@JukkaM

Indeed, those interest rate forecasts from analysts were optimistic, as ECB rates only nudged down slightly in the summer of 2024.

I have to say that economists make those interest rate forecasts — we don’t take responsibility for them But yes, they went completely wrong there too.

@JukkaM

Surely someone might know Etteplan’s salary structure well.

We haven’t done comparisons in a while, but generally, I think Etteplan has been an average payer in the industry. So these comparisons can be made from reported figures (number of personnel and personnel costs). It always mixes things up a bit since companies operate in different countries with different levels, and the reporting isn’t always top-notch.

Here are some basic thoughts for the discussion! All from memory, so I’m escaping responsibility