Etteplan - Remaining on track

Etteplan posted good Q4 results, although slightly below our estimates, with net sales at EUR 62.9m (Evli 66.0m) and EBIT at 5.7m (Evli 6.2m), affected at least partly by the impact of vacation timing and activities of two major customers in December. The market outlook remains encouraging and Etteplan expects revenue and operating for 2019 to grow compared to 2018. Our estimates remain largely unchanged and we retain our HOLD-rating with a target price of EUR 9.0.

Market outlook and guidance remaining favourable

Etteplan posted good Q4 results, although falling slightly below our estimates due at least partly to the impact of vacation timing and activities of two major customers in December. The Technical Documentation continued to see challenges while Embedded Systems and IoT saw solid development, as actions to improve profitability have taken effect. Etteplan expects the revenue and operating profit for the year 2019 to grow compared to 2018. Comments regarding the market outlook were encouraging, as Etteplan continues to see favorable development in all market areas but with demand growth in Europe expected to slow down slightly. The BoD’s dividend proposal for 2018 is EUR 0.30 per share, in line with expectations.

Estimates largely unchanged post-Q4

Our estimates remain largely unchanged post-Q4. We have raised our estimates for profitability for Embedded Systems and IoT after the solid performance in Q4. We expect net sales and EBIT BO of EUR 251.6m and EUR 24.7m respectively, with margins near Etteplan’s strategic target of 10%. We do not expect the growth target of 15% to be reached without acquisitions.

HOLD with a target price of EUR 9.0

On our estimates Etteplan trades largely in line with peers on 2019E EV/EBIT and P/E. With our estimates largely unchanged we retain our HOLD-rating with a target price of EUR 9.0.

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