Welcome to this webcast presentation of the Etteplan Q2 results for 2024. My name is Juha Näkki, I'm the President and CEO, and at the end of the presentation, there will be a Q&A session where you will be able to ask questions to myself and also our CFO, Helena Kukkonen. As per the previous presentations, previous quarters, we will go through this kind of agenda. So highlights first for the quarter, operating environment, financial development. We'll, towards the end, look a little bit on how we did against our targets, and then, then talk about the, the guidance and follow it by the Q&A session. But to begin with, the most important events for Q2. So, it was a difficult quarter for us. The market actually went weaker than we expected, and the demand declined during the quarter even further. And this had a little bit of issues, of course, and we had a little bit of challenges with this kind of a drop, but still, we were able to grow. So despite the uncertainty in the market and so on, we still managed to grow, but this was supported by acquisitions that we've completed during last year and this year. Also, our operating cash flow was good. It improved slightly, but it was at a good level, as it has been throughout the year. We also continued our development efforts in the company, so our offering development was continuing. We also worked a lot with AI, which is a big part of our offering development, and we were able to implement the first service solutions for our customers in the technical communication solutions service area, including AI. So this is a highly positive development, and it looks very, very promising going forward. We also continued investments into the company, and acquired a Swedish company, Affeo AB, which is mainly in testing in the automotive sector. And we also acquired a minority stake in a Bangladeshi IT service provider, BJIT. We also won several outsourcing contracts during the review period, and also we won customers which are outside our own market areas. For example, we started a partnership with a Japanese company, Konoike, which is an operating services company in Japan. And this is, of course, a highly, highly interesting project for us, but it also proves that our solutions are valuable and are providing value to customers also operating outside our markets, which is, again, creating new kinds of potential for us. But on the negative side, the market demand was even weaker than it was in the previous quarter. Our customers' decision-making was still slow. They did not receive as many new orders as perhaps we hoped and expected. And their order books were generally declining, and this resulted in very slow decision-making and quite few new investments starting. With this, our revenue decreased organically, which was not good, and also our profitability was under pressure and weakened in the company level. If we look a little bit on the investment into BJIT, which is a Bangladeshi IT services provider, so we did acquire a 19.99% minority stake in the company, but it does have a strategic importance for us. We have traditionally been working with offshoring services from China, but we have been looking for alternatives for that, and now we have made the decision to invest into a Bangladeshi company. BJIT will provide us with a flexible option to support our customers' software development, digitalization, and especially digital product data management, initially. Going forward, we will start to work more with BJIT and train the organization to do collaboration and engineering and software also in other areas which we are doing in at Wärtsilä. We see a lot of potential for very cost-efficient services in all our service areas regarding this. So this is highly positive development. However, at the moment, as probably everyone is aware, currently there is the unfortunate disorder in Bangladesh that is, based on our discussions, easing out right now. So far, there have been minor impacts to the business of BJIT, and it has had an impact for our collaboration or development of our collaboration, with a slight delay, but no major impacts, no profitability or profit impact, as we have not started any joint projects together yet. But it's a very good investment, and we see lots of opportunities going forward, and also a new sort of country/market area for us. If we look at the operating environment in Q2, so as mentioned, the demand situation was getting weaker. Of course, the geopolitical tensions are maintaining the uncertainty, and this is having an impact on our customers' decision-making. The order books I already explained, so the order books of our customers are generally decreasing, which is, you know, delaying investment decisions. This is normal in most of our customer industries, but of course, as we have said before, still, defense industry is strong, and also the investments into green transition and also energy efficiency remain at a fairly good level, and this has then been on the positive side of the demand development. If we look at the different market areas where we operate, so in Europe, the countries were relatively similar. Perhaps Finland, with the industry having quite a lot of investment goods and investment products in the manufacturing area. The market was weaker than in other European countries, but fairly similar. Decision-making slow and the interest rates dropping slightly less than expected, or at least at a slower pace. So that didn't encourage our customers to start investing into R&D and other types of investments yet. But we do see that towards the end of the year, this kind of development will take place. China is. Of course, the Western investments into China are at a very low level still, and will continue to be as far as we can see. But the sort of local internal business within China has turned positive, and we also saw a 7% increase in our hours delivered to the Chinese market compared to the comparison period, which is, of course, positive for our business. This is a development that we will continue to look at and invest in China. If we then look at the revenue and operating profit a bit, so on the revenue side, slight growth, 3.1%, overall, but still negative organic development on the revenue side. Operating profit dropping by 8%. Software and Embedded Solutions was growing, and also the operating profit was improving. But this was against a quite weak comparison period. Overall, we are disappointed with the sort of margin development in this particular quarter. Revenue and personnel split. So, revenue by service area, so Engineering Solutions now 54%, Software and Embedded Solutions, 27%, so growing, and, and Technical Communication Solutions, 19% of our revenues. Finland represented, 48% of the revenue; Scandinavia, 28, so clearly growing with the investments into, into our Software and Embedded business. Central Europe at 22%, and China at 2%, so declining, further. Personnel by area: Finland, 50%; Scandinavia, 20%; Central Europe, 21; and China, 9%. If we then look at the revenue by customer segment in 2024, so, clearly, as said, so the investments into, into, energy sector, energy efficiency, green transition, and, and defense sector, they are visible here as well. So, we were growing in the energy segment, also the automotive segment and this energy segment was growing with the sort of green transition investments. And, then also defense sector clearly growing. Aerospace slightly declining, which is a little bit diluting the defense number there. But still, clearly, these are the segments where we were, are growing. But then a clear decline in the industrial machinery, also in the forest industry, and also in the metal and mining area. So this is a clear indication of the sort of lower order intake for certain customers that we have. If we then look at the financial development for Q2 a little bit more in detail. So overall, slight revenue growth, and revenue outside Finland growing, but the profitability was weaker across the board. If we look at the revenue development in more detail, three point one percent growth, EUR 92.6 million in revenue for the quarter. And for the first half year, EUR 189.7 million, so 2.7% growth. Key accounts were decreasing by 6.9%, which is clearly shown also in the previous picture. On the positive side, the acquisitions that we completed and also the outsourcing agreements that we have won have contributed positively for the revenue development. On the EBITA side, we were 8% below last year, EUR 6.8 million, or 7.4%, and of course, we cannot be happy with such a figure. Non-recurring items were EUR 0.4 million, and these were mainly related to restructuring of the organization and different kinds of measures that we took to improve our profitability for the coming quarters. For the first half year, EBITA was EUR 50 million, or 7.9% of the revenues. EBIT was at 5.8%. Amortizations related to acquisitions were growing to EUR 1.5 million for the quarter, and EUR 3 million for the first half. For the first half, the EBIT was at 6.3%. Earnings per share was at EUR 0.13 for the quarter, and EUR 0.29 for the first half, slightly below last year. Higher financial expenses and costs were impacting the EPS. And also, we in the last quarter were having a slightly higher tax rate in our business. Now, the situation has normalized and we are on a sort of normal level on the taxes, so that has. That impact that we had in the Q1 has now gone to a normal level. Cash flow was strong. Operating cash flow was at EUR 9 million for the quarter, and EUR 17 million for the full year. Slight improvement compared to last year, but relatively on a similar level. Cash flow after investments was at EUR -3.4 for this year. Of course, investments into the acquisitions and the minority stake of BJIT play the major role here. Personnel was standing at 3,900 employees at the end of the period. A small decrease of 1.1%. But according to our strategy, we were still growing outside Finland, so 1,963 employees were employed outside Finland, which is now more than we have employees in Finland for the first time. We also recruited less people during this period than we had anticipated. Of course, due to the market situation, we slowed down the recruitment activity a little bit, and also we did have temporary layoffs and other restructuring measures done during the quarter to adjust our capacity into the prevailing market conditions. So the number of temporary layoffs in Finland totaled 111 employees at the end of the reporting period. If we then look a little bit more in detail into the service areas. So starting with the Engineering Solutions, so here the revenue was dropping by 2.7%. And the EBITDA was also dropping clearly, but to EUR 3.9 million, or 7.9%, so a clear drop from the comparison period. Here, of course, the storyline is that our customers are not really investing yet, and investments to our new R&D projects, and also to new factory improvements or plant projects is rather low level. On top of that, our customers' delivery project-related engineering is on a low level when their order books are declining and new orders are on a lower level. So this has an impact on this service area in particular. Outsourcing agreements, we have won several of them, and we have been very successful with our outsourcing models, and the deals that we have done will have a positive impact in our business for the second half of the year. That will contribute positively, but in the prevailing market conditions, the operational efficiency was a bit moderate, and this, of course, had an impact on the result. We also had in Germany certain issues with demand. There, the chemical industry demand was relatively low, and there we had also some issues, and now we have done certain restructuring measures to improve the situation in the service area and in Germany in particular. In the software and embedded solutions, we were growing thanks to the acquisitions that we completed. So, revenue was growing by 17.4% to EUR 24.9 million. And also, the EBITDA was improving to EUR 1.9 million or 7.6%. But of course, compared to a quite weak comparison period, when we last year had a fairly weak Q2. Still, in this service area, the demand situation continues to be weak, and the same story as in the Engineering Solutions R&D investment, which are driving this service area, are still at a low level, and we are still expecting or hoping that that the investment levels will be starting to climb up, when we move further in the year, as the interest rates are getting lower, and they should encourage our customers to really move forward. Also here, we needed to implement adaptation measures, and that improved our operational efficiency. But still, in the overall uncertain market, our profitability was at the modest level, not where we hoped it should be. The actions that we have now taken should be improving the situation going forward. If we look at the technical communication solutions service area, so slight growth, 2.9%, or EUR 17.9 million in revenues, but profitability, 6.9%, so weaker than the comparison period and weaker than what we would like to see in this particular service area. Still, with the project-related demand was slow, so this service area had some difficulty with that, so the demand was getting weaker, and we needed to take measures to adjust to that. But, with the new development that we have done with AI, that had a clear positive impact on our business. We won certain outsourcing deals where AI also already played a part, and we have also now implemented the first AI projects for our customers, which are proving to be very valuable, create high value for our customers, and we see that there's a good demand for these types of new solutions and services. So we see a positive development in this area. If we then look a little bit on how we did against our targets and the guidance then... So of course, on the revenue side, we had a target of reaching EUR 500 million for this year. Now, it is fairly safe to say that we will not reach that target. This target, of course, was set in 2019, when we had no knowledge of COVID or the war in Ukraine or the other turbulence that is going around the world. And we have not been able to meet that. But still, we are growing, and we still target to have strong growth going forward. But of course, new targets will be set at the end of the year once these targets become obsolete. Revenue outside Finland target is at 55%. We are progressing. Currently we are at 52%. Managed services share of revenue currently at 65% compared to the 75% target. This figure has dropped slightly. The highest impact is on the sort of business model of the Danish-acquired company, StrongIT. No major other impact for this, but we are looking to, of course, improve on this with our outsourcing models and our other managed service models, which are proving to be highly competitive also in this market. In operating profit, we were at 7.9% for the first half, which is clearly below our 10% target or above 10% target. This is something where we need to clearly improve. We have now taken measures to improve the profitability for the coming quarters, and we are looking forward to seeing the effects of these measures. Previously, when we have taken these, we have been able to move up, and we expect to see similar development going forward. But of course, we cannot be happy with this kind of level. It is far too low for us. On the financial guidance, we specified within the range our financial guidance for the year, and now expect the revenue to be between EUR 375 million-EUR 390 million, whereas previously it was EUR 375 million-EUR 415 million. On the operating profit, EBIT, we expect the EBIT to be between EUR 28 million-EUR 30 million now. Previous estimate was between 28 and 34 million. This, of course, due to the fact that the beginning of the year has been, from the market side, slower than what we anticipated or hoped for, and this is why we had a quite wide range. But now that the first half is gone with the low market, we see that there is a need for specifying we cannot reach the upper level. The market outlook remains the same. We do hope and expect that the lowering interest rates will encourage our customers to start investing. Everything is pointing at that direction. We also see a lot of opportunities to start new projects, but our customers' decisions need to start to take place more for this to happen. But we are still confident that this will, during the year, happen, and then the market development will be positive, and the demand situation will develop for a good level for us during the second half of the year. That is pretty much how it went in this quarter, and now it's time for the Q&A session. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Atte Heikura from Evli. Please go ahead. Good afternoon, this is Atte Heikura from Evli. First, on the specified guidance, what are kind of the scenarios now for the lower and upper range of the specified guidance? At least for me, it looks like also the lower end of the range requires quite good performance on the second half. This is true, and of course it is based on the fact that we do expect the market demand to pick up. There are clear signs that it would. If you look at any reports that are coming out, the market development overall is expected to pick up, and our type of industry is normally starting fairly fast when the sort of investments start to move forward. But of course, it does require the market to start to pick up in Q3, and then a stronger Q4. So this is required and expected by us at this moment. Okay, thanks. Then on that, kind of continuing, you saw the first signs of improved activity, at least in Europe, earlier in the year. What were the main reasons now for the sudden weakening of the environment, if you compare to the outlook that you saw at the beginning of the year? Well, we did see certain customers starting their investments and at a slow pace, but we did see that already in the second quarter, which was encouraging. Unfortunately, it didn't sort of move forward. Some customers are still continuing the investments, but on a general level, it did not start. And that compared, or combined with the fact that the project deliveries, as our customers' order books are declining, and they are receiving less orders, so this had an impact on the sort of project delivery-related engineering. And these effects then meant that the overall demand situation got weaker and worse. So even if there were signs that the investments would really start to move forward, they did not. There were individual customers who are still investing a little bit, but overall, the development didn't turn out to be as good as we had hoped. Okay, thanks. Then on the competitive situation, do you think that this Q2 performance reflects more or less the kind of overall market trend? Or how do you see the competitive environment at the moment? It, of course, varies between different countries and different service areas, but I would expect that in our area, in the sort of manufacturing companies and their demand, this would be relatively similar. So far, this is our understanding. So, this is how it is, but there is variation between countries and different service areas. So, this is how it seems. Okay. Then final from me, the revenue from key accounts has decreased throughout the first half. Could you bring us a bit more color on, on this? Yeah. Well, there are certain customer segments, as we were showing, the pulp and paper industry or the forestry industry, the industrial manufacturing, and so on. These are strong sectors for Etteplan, and there our customers are simply not getting new orders as much as they have before in the areas where we are working with them, and this has an impact on our sort of possibilities to move forward. So this is the primary reason why we are sort of falling behind in the sort of profitability and also on the sort of growth that we expected to have before. Okay, very helpful. Thank you. That was all from me. Thanks. The next question comes from Emil Immonen, from Carnegie. Please go ahead. Good afternoon, Juha, and thank you for taking my questions. If I continue on the Q2 performance, was the softer profitability at all a result of pricing or maybe utilization rates being lower, or could you describe that in more detail? Yeah, pricing, I would say that we have been fairly okay, as said in the, in the previous, quarter as well. We have been fairly okay in, in the pricing, but of course, certain projects in the kind of prevailing, market, environment, there is, you know, price pressure. Certain competitors are offering at lower rates. There is a price competition, that the customers are, of course, taking advantage of. So this had a minor impact, on our, our overall, profitability, but, but I would say that, the major impact was from the lowering demand and the fact that we needed to do restructuring and, and, and adapt to, to the current prevailing market condition. I see. And going then forward to the second half of the year, do you see any pressure on your costs, for example, in terms of salaries needing to be increased? Well, of course, of course, we will see. At the moment, the market seems to be fairly, fairly stable in this respect, but of course, if the, if the demand starts to pick up, then, then, of course, we will need to see how the market reacts to, to maintain our, our great people. But, but I do see that we have tools to, to manage this, and, and, we will be able to, to, to keep the margins that we have, in the business. But, but the demand, needs to improve for us to be able to be more efficient. Okay. And then if we look at kind of the geographic performance, Finland looks like the main weak point. Is there a difference in performance in terms of profitability between Finland and then maybe abroad? We have now certain countries. I explained that we had certain difficulties in Germany, in ES. We also had some difficulty in the Netherlands, in the technical communication solution service area. So there are these kinds of unit-specific issues that have an impact in the smaller countries into the overall country, sort of, profitability. Other than that, no, and Finland is not the, sort of, best profitability country for us. It is somewhere else. I see. And continuing on that, the Konoike deal in Japan, that was pretty surprising to me. Could you maybe talk a little bit about how you came across them from when and what it maybe means for the future? Well, it is, of course, a very interesting opportunity for us, and we were introduced by a consultant company to Konoike, who had sort of found us. It was not the other way around, but it was this way around. And then we started talking and saw that we are fairly similar, but they are a much bigger company than Etteplan is. They are in operating services, so they operate different kinds of factories and mills, et cetera, whereas we are a service, sort of a technology services company. So there, why we won is that they wanted to have a European partner, and they felt that our service offering matches very well to what they do. So we are able to then help them to digitalize their own business and also improve their efficiency through the means of digitalization and developing their services. And there we found a very good match, and at the end of the day, we were able to win this deal. But it's... In my view, it's a highly, highly very positive deal for us. We will see how that will go in the future, but it provides a completely new opening for us, and we will see how that goes. But it's also proof that our service offering is strong, and we can also sell services and create value for customers that are outside our operating markets. And this is also a highly positive thing that is bringing out new kinds of potential for us. Great. That's all from me. Thanks. Thank you. The next question comes from Juha Kinnunen from Inderes. Please go ahead. Hi, this is Juha from Inderes. I'm coming back to the demand situation. I'm just wondering if you could open up a little bit how you are seeing the underlying demand. I'm talking about the potential projects where you are bidding, or I'm wondering if that's the problem, or if it's decisions aren't made, that's fair. But are there projects, and how has it developed during the year? Well, there are still projects, but the growth is not picking up. And there are... We see opportunities, but the decision-making from our customers is very slow, as their order books are declining and the investment environment with the interest rates still rather high, and so on. So, no, there are very few new projects starting, and this is the issue that we have currently. So some part of the business with the project deliveries, when the projects are delivered, there are no new orders, so this is having a negative impact in our situation, which is then visible, for example, in our key accounts. So we have certain customer segments where the orders are down, which is having a direct impact on us. We are then having to find new customers, where we have been fairly successful. So overall, our organic decline was around 3%, and the key account drop was around 6%. So we have been able to compensate for that, but still, as the demand situation is fairly weak, so overall we have not been able to move forward as fast as we had anticipated and hoped for. But we see that there is a possibility, with a little bit of encouragement from the market, we see that there is a clear possibility that the market demand will start to pick up. We do see some more orders from certain customers in certain customer segments, which are encouraging. And if the interest rates continue to drop and encourage our customers to start the investments, then we do see the possibility that the market picks up fairly well. And normally, when that happens, our type of companies, and we have been fairly rapid to ramp up new services as well. But no decline from the levels where we are now, so small decline so far, constantly. Now we start to feel that we are at the bottom. This is, I believe, what also the Technology Industries of Finland was saying for the Finnish industries, and now from now on the market should be picking up. But this is, of course, uncertain, and our ability to really grow is heavily dependent on that. Yeah, for sure. I'm still also wondering about the energy efficiency and green transition, but that have been driving growth the past year or so. Is it losing steam? I noticed that you are using a less positive words, I believe, in the webcast. Well, it's maybe slightly slowing down. Difficult to say why, but maybe the whole sort of political or geopolitical tension that is there is drawing more attention. And certain kind of sort of certain kind of investments are maybe not as important as they were considered to be earlier. But still, we see that there is clear demand. They are much better, or investments in that area are much better than in other areas. And if you look at our growth segments, so they were energy, defense, and also the car industry, where this kind of electrification is driving the scene. So there is still investment, but perhaps with the current uncertainty in the world, maybe the attention for this kind of investment or the willingness to move forward with these investments is also slightly pushed forward. Yeah. Then I was wondering about the outsourcing agreements. Could you give us an estimate, how much did they contribute to your growth? I suppose this is organic growth, so it would have been more negative without the significant outsourcing deals. This is correct. Some of the deals that we have done and also published are such that we are still. The team has not been with us yet, but it will be there in the latter part of the year. So some of them will have positive impacts only in H2. Some of them started already at late Q2, so that's how it is. We are not giving out the exact numbers, but let's put it like this: the outsourcing deals are organic growth, and they are contributing to the otherwise organic loss that we are having, so they are keeping the business stable or fairly stable, and that is how it is at the moment. But towards the end of the year, we do see that they will have a positive impact. And, once they are fully on board, there are of course, opportunities with these kinds of arrangements once the market picks up as well. So they are highly positive for our business, and when the market picks up, we do expect that they will have a highly positive impact. All right, that's good to know. And the last one from me is, regarding profitability. If the demand remains low, can you defend the profitability now that you are more and more international? Because, you know, in Finland, the layoffs are relatively easy compared to other operating countries. Yeah, this is, of course, more difficult in some other countries than in Finland. But I would say that we have now taken measures we may need to do, depending on how the market develops further. We may need to do some measures still, in the coming quarter, but still, I think that we are now in a better shape, and we should be able to move forward in the profitability development also. Of course, it's Q3, it's the vacation quarter for us, so that needs to be taken into account. But overall, I would say that we are now, with the measures taken, in a better position, and we should be able to defend profitability and move forward towards where we should be. But this, of course, has dependency on the market development. All right. Many thanks. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speaker. Okay, thank you very much. Yes, it was, of course, a difficult second quarter and perhaps not the first half of the year that we would have expected. The reasons I have already explained. But still, I would say that during the quarter, we were able to develop the company further. We were able to win new customers outside our existing markets. We got a new offshoring location in Bangladesh. We have developed our offering in AI, so there are many, many positive things that we have done during the quarter. And of course, with this, we will try to improve our business performance going forward and give us more potential to grow going forward as well. But it, of course, requires us to see development, positive development in the market, but we're confident that this will start to happen during H2 and then continue in early next year. But, of course, the world is uncertain and anything can happen. But moving forward anyways, we see that positive development is going to be there in H2, and we're very much looking forward to getting back to the high growth, profitable growth path again. And again, if you wish to ask any questions between the sort of quarterly reporting meetings or webcasts, here are the contacts that you can contact. So Outi Torniainen, our SVP for Marketing and Communications, Helena Kukkonen, our CFO, or myself. So, feel free at any time. Thank you very much for participating, and I wish you a great day forward.