Etteplan - High uncertainty clouds 2026 outlook
Q4 results came in below expectations but showed slight y/y improvement. Guidance implies modest progress despite continued market challenges, with high uncertainty heading into 2026.
Modest sales and EBIT growth, market still challenging
Etteplan's net sales grew 2% in Q4 (1% in constant FX), though organic sales continued to decline slightly. Engineering Solutions remained the primary driver, with growth supported by the Novacon acquisition, while also Technical Communication and Data Solutions delivered solid 7% growth. Software and Embedded Solutions remained under pressure with sales down 15%, in line with our estimate. Etteplan’s AI-driven revenue initiative reached its first milestone, with 5% of FY2025 revenue (35% target by 2027). Q4 EBIT of EUR 5.3m came slightly below our forecast but improved y/y. Management's market commentary was unchanged, with geopolitical uncertainties continuing to weigh on demand and delay customers investment decisions.
Muted outlook amid uncertainty
Etteplan expects net sales of EUR 360–380m and EBIT of EUR 19–25m for 2026E. We have lowered our estimates and now model net sales of EUR 366m (prev. EUR 374m) and EBIT of EUR 22m (prev. EUR 23m). We expect TCDS to sustain growth throughout the year, while both Engineering Solutions and Software and Embedded face difficult conditions heading into H1. The muted outlook reflects continued geopolitical tensions and cautious customer investment decision-making. While the defense and energy sectors continue to show resilience, most other customer industries face persistent headwinds and limited visibility on the timing of a demand recovery makes 2026 another year of cautious execution. On profitability, AI-driven service solutions should continue supporting TCDS margins, while recently announced restructuring actions should support Software and Embedded margins, though some one-off costs are expected in Q1.
ACCUMULATE with a TP of EUR 9.5
Following our estimate revisions, we lower our target price to EUR 9.5 (prev. EUR 10.0) but keep our ACCUMULATE rating. Etteplan trades at 11x-9x EV/EBITA on our 2026-2027E estimates, broadly in line with peer median and its historical multiples.