Here are Roniâs preliminary comments, as Etteplan reports its Q3 results on Wednesday
We expect revenue to have grown slightly, driven by acquisitions, but organically we anticipate revenue to still be in decline. We expect the operating profit level to have remained subdued, but to have improved from a very weak comparison period. There is no room for disappointment, as a clear risk of a negative profit warning hangs over the company, with our current forecasts being at the very bottom end of the companyâs guidance. The fact that a profit warning has not been issued before the results, in our opinion, indicates that Q3 has performed at least moderately. Naturally, the report will focus on gauging market sentiment and customersâ willingness to invest.
I had highlighted the risk of an earnings warning in the pre-commentary, and it indeed came even before the results.
Those preliminary Q3 figures did not dramatically deviate from forecasts. However, the ranges of the new guidance are quite wide and the lower ends are quite low, so thereâs
Here are Roniâs comments on Etteplanâs negative outlook.
Etteplan issued a profit warning yesterday and lowered its revenue and operating profit guidance for 2025 due to weaker-than-expected market demand. The profit warning was thus issued a day before the companyâs Q3 results, which are reported today at 1:00 PM. The company also provided preliminary information on its Q3 figures, which, however, did not significantly deviate from our forecasts. However, the new guidance ranges are still quite wide, leaving room for uncertainty regarding the development for the rest of the year. The profit warning and Q3 results will likely lead to a reduction in our forecasts.
Etteplanâs CEO Juha NĂ€kki was interviewed by Roni on topics such as Q3 and the future.
Topics:
00:00 Introduction
00:10 Background of the profit warning
01:19 Background assumptions for the updated guidance range
02:15 Are the challenges only cyclical?
03:33 Relocation of product development
04:15 Collaboration with Bangladeshi BJIT
05:32 Third quarter development
06:40 Improved profitability in the Technical Communication and Data Solutions service area
07:12 Weakness in the Software and Embedded Solutions service area
08:05 Willingness to acquire
09:14 Outlook for next year
Roni has prepared a new company report on Etteplan after Q3.
Despite the negative profit warning, Etteplanâs Q3 figures did not show major drama, and profitability was even moderate. The profit warning mainly concerned the outlook for the end of the year, which emphasizes that business is not recovering in the short term and visibility for the rest of the year is weak. The valuation, even at the current weak earnings level, is still reasonable, which gives time to wait for demand to pick up. Following forecast cuts, we lower our target price to EUR 11.0 (previously EUR 11.5) and reiterate our Add recommendation.
Quoted from the report:
2025-2026 Forecasts
The negative profit warning and Q3 results led us to lower our forecasts again. We now expect Etteplanâs revenue to end up at EUR 362 million in 2025 and operating profit at EUR 18.3 million. Our forecasts are thus largely around the midpoint of the new guidance range.
Next year, we expect growth to pick up and revenue to grow by 3% to EUR 374 million. This would require a moderate recovery in the companyâs demand but is not, in our opinion, a particularly optimistic scenario yet. Supported by growth, we also expect a clear improvement in results, and we expect operating profit to end up at EUR 23.6 million.
Here are Roniâs comments on Etteplanâs new updated framework agreement with Vattenfall.
Etteplan announced on Thursday that it had signed a new framework agreement with Vattenfall AB. The agreement is a continuation of the companiesâ long-standing cooperation, and therefore does not cause pressure for changes to our forecasts. However, the news is positive in a challenging market where the company has complained more about project postponements and cancellations.
