Welcome to this webcast presentation of Etteplan's Q1 results for 2026. My name is Juha Näkki. I'm the President and CEO, at the end of this session, you will be able to ask questions, the Q&A session, and there you will also be able to ask questions from our CFO, Helena Kukkonen. If I look at the contents a bit, so we'll go through the quarter one, what happened in terms of highlights and overview, look at the financial development more in detail, and then look at our service areas for the quarter. Towards the end, so we'll look a little bit on how we're doing against our targets and the strategy, followed by the Q&A session, of course, as per normal.
If we start with the highlights, I need to say that it was a really difficult start of the year for us. A lot of things happening on the political scene and really affecting our customers' decision-making and very few projects got started. It was a really difficult quarter for us. On the positive note, our strategy execution continued. We continued to invest, especially into our service offering and our service solutions and there's quite good interest towards those and our AI-driven revenue as a result of that was continuing to increase.
Still small numbers, 6% of our revenue, but the direction is good one and we are also now with the new solutions that we are launching and the revisited solutions that we are relaunching, they are clearly creating interest with our customers as we are bringing in new kind of value streams for our customers with AI. A long way to go before we are at our targeted levels, of course. On a positive note, during the quarter, we could clearly see that sort of discussion levels with our customers were increasing, also tendering activity, more quotations were made and as such, there is a slightly positive tone in the market, a little bit more discussion.
Unfortunately, the decisions customers are not taking and, for that reason, projects are not getting started and then for that reason our operational efficiency was not where it should be. Of course in the, in the sort of negative side, the exceptional market, the tension in the global political scene and, you know, the discussions around Greenland in January, the war in Iran starting in February, all the spillover effects regarding energy and regarding interest rates, et cetera, clearly had an impact on the decision-making of our customers and very few new things were invested in. In this kind of a market we then needed to implement new adaptation measures and this had also a negative impact on our result.
In Software and Embedded Solutions, we went through an organizational restructuring, a fairly heavy one, which had an impact on this service area in particular, but also on the all group level had an impact. Of course, as a result of the weak quarter and the weak market condition, we also needed to adjust our financial guidance a little bit downwards. We took the upper end a little bit downwards as we don't see that we could recover during the year to that part. I will return to that topic.
If we look a little bit more in, in detail on the, on the operating environment, as said, the different kind of political events during the quarter had a clear impact on our customers' decision-making and, as a result, a very few investment projects were started. We also had cancellations of some existings and some were postponed. Well, actually very many projects were postponed. It was quite difficult. We did see certain, of course, certain customer industries were still investing, defense being one, energy being another, and also in some of the other segments we saw slight pickup. There were really customers and customer segments which were not strong at all and this had an impact on our results.
All customers were investing in different kinds of cost saving measures and also in AI basically, and working with these types of things. These kind of traditional R&D investments, especially, also on these kind of planned investments and new things, were very slow to start. If we look at the different countries where we're operating, so, in Europe, fairly similar development, a little bit depending on which industries are strong in which country, but overall a quite weak development. In particular, Finland was suffering.
Many of our large customers were implementing new savings measures and the order intakes for certain customers were also very low in Q1 and for that reason, very few projects were started. China was in the number of hours sold to the Chinese market, we were declining, but the main impact of that was the fact that there was a slightly longer Chinese New Year holiday this year. Overall, the Chinese market seems to be fairly okay, driven by the sort of developing culture of buying services. More and more companies are buying services instead of recruiting their own people, which has a positive note on our demand. Overall, the market situation in China seems to be on an okay level.
If we look at the key figures, the revenue declined by 4.6% to EUR 90.5 million. EBITA was at 4.1%. EBIT at 2.4%, earnings per share at EUR 0.04 per share. If we look at the split then per revenue and personnel, revenue by service area was Engineering Solutions 57%, Software and Embedded Solutions 22%, a clear decline there, Technical Communication and Data Solutions growing to 21%. Revenue by area: Finland 45%, Scandinavia 27%, Central Europe 25%, China 3%. Personnel by area: Finland 47%, Scandinavia 19%, Central Europe 24%, China 11%. If we then look at the customer segments, energy was growing.
It is our largest segment to date, there is continued investments. Different kinds of energy efficiency measures, also data centers and related technology has high demand, this is also visible with our customers. Automotive, on the other hand, down quite significantly. We had, especially in the German and Swedish markets, there were significant savings measures implemented by some of our customers, which had an impact on our development. Metal and mining, at 10%, industrial machinery at 10%, aerospace and defense, growing to 9% of our revenues, and actually for the first time, surpassing forest industry. That has traditionally been a very large and strong industry for Etteplan, currently very much down on the investments. On the other is building technology, slightly down, et cetera.
The most significant change is, of course, the aerospace and defense growing to 9%, and then energy continuing to grow. That's where we also see that these segments will continue to grow in the future. Elsewhere, we hope that the market will pick up during the year. It remains to be seen how the political turmoil will affect the market development. If we then move on to the financial development in more detail, starting with the key figures. All key figures slightly down, unfortunately. The share of AI-driven revenue growing to 6%. Two percent last year this time of the year. At the end of last year, 5%.
A slight growth, but still the direction is right, and we are continuing to invest into our service offering. We expect this number to pick up or accelerate in picking up the pace during this year. If we look at the revenue, so EUR 90.5 million, - 4.6% at comparable exchange rates, at - 5.4%. Organic at comparable exchange rates, - 6.1%. Clearly down and reflecting the weak market situation. Revenue from key accounts was down 0.3%. Some key accounts, especially in the defense area, are clearly growing, which is having an impact on this figure, while others in certain other segments are going clearly down.
EBITA, weak demand, of course, had a clear impact on our efficiency, and therefore also the results. This is the primary reason for the weaker results. Also, we had non-recurring items of EUR 0.7 million, which were a result of adaptation measures that we took in the organization. There was also an earnout revaluation on one of our acquisitions. If we exclude the non-recurring items, then the profitability would have been at 4.9%, measured in EBITA. Not good, but still slightly better than without them. EBIT was at EUR 2.2 million or 2.4%. Amortizations related to acquisitions were at EUR 1.5 million.
EPS affected by, of course, the lower profitability at EUR 0.04 and down clearly from last year. Operating cash flow still fairly solid at EUR 4.1 million. Of course, we have done quite a lot to improve the cash flow in the company. Currently the measures seem to be working, so cash flow is not an issue at the moment. Personnel at the end of the period was at 3,748, so clearly down. Due to the market, we have not done, you know, continued recruitment that much. Of course, certain replacement recruitments and also certain new competencies have been recruited.
We have to follow the market here, and also the adaptation measures have had impacts on the number of people. In Finland, we have a total of 157 employees temporarily laid off, which clearly indicates what the market is like. On the income statement, nothing special that has not been mentioned already earlier. In the balance sheet, nothing special either. The total balance sheet standing at EUR 303.5 million at this time. If we go into the service areas a bit more in detail. In Engineering Solutions, we had, of course, the difficult market had an impact here.
The low result or utilization rate, or the operational efficiency, was at a low level due to the market. Of course, this had a clear impact on the profitability. We are continuing measures, and we are also here working with our offering development. There is new offering, AI-driven offering coming out, which looks promising. Still, in certain customer industries, we are having a lower workload, which has an impact on the results. We had EUR 0.2 million of non-recurring items here in the service area. EBITA without the non-recurring items would have been at 5.2%. We cannot be happy with this figure.
We need to continue working hard to improve the results. In the Software and Embedded Solutions, of course, we carried out a major restructuring during the quarter, which also had an impact on the numbers. The market as such is also difficult. We have lower demand due to lower level of investment in certain areas. We also do see a better level of investment in AI, and we are moving towards that direction. However, we did have quite a bit of focus on the restructuring. We did have restructuring efforts in Finland and in Sweden and in Poland, so we reduced a number of people in these countries.
This had an impact of EUR 0.7 million, and that of course is a fairly high number for the service area. With those, the EBITDA was at 0.6%. Without the non-recurring items, we would have been at 3.9%. Now, we are done in this service area with the major restructurings. We have a clear direction. There is positive momentum. We are building new offering, and we expect to see clearly better numbers and a clear operational improvement going forward. In the Technical Communication and Data Solutions service area, the revenue was flat or + 0.1% increase, really driven by the new solutions and the new deals that we are making with our AI-driven offering.
There's clear interest from our customers in this service area. We have great offering, we are getting inroads. Several outsourcing deals have been signed also during the review period. However, the volumes of the existing business or the volumes of our existing customers are coming down, for that reason, the revenue stays flat. Also, we had clear difficulties in especially in Germany and in the Netherlands, which took the efficiency and the operating profit down for the quarter. EBITA was at 4.4%. Also here we had one-offs or non-recurring items of EUR 0.3 million. The operating profit, EBITA, without these, would have been at 6.1%.
Not the level where we can be happy with, but still, not as bad as some of the others. Looking at our strategy and financial guidance, we are still continuing to invest into our AI-driven solutions and invest into improving the efficiency through AI and improving the value add towards our customers through AI-driven solutions. We continue to invest in this despite the difficult market because we believe that this is the right way to go, and with this kind of additional and new value add that we are able to provide our customers, we believe that we are able to start growing again despite the weak market conditions. This is also reflected in our guidance.
With the current performance, we are very much behind our financial and strategic targets. AI-driven solution share of revenue at 6%, but we expect to be able to accelerate this during the year. We have introduced new offering. This seems to resonate well with the customers, once they start to take decisions, we are confident that this number is going up. We also see that the managed services share of revenue will increase with this development and that we will be going into the right direction. The revenue target remains tough and very difficult or even impossible to reach without major acquisitions at this point. In operating profit, we clearly have a way to go.
4.1% is nowhere near satisfactory for us. We will work hard and continue measures to improve the profitability during the year. The financial guidance, we estimate that the revenue in 2026 will be between EUR 360 million and EUR 380 million. This is intact. We haven't touched that one. On the EBIT side operating profit, we estimate the operating profit to be between EUR 19 million and EUR 23 million. We have taken the upper level down from EUR 25 million- EUR 23 million due to the weak first quarter and due to the prevailing market conditions. We are working hard with the new offering. We are working hard with the customers.
We do see positive development in the discussions with the customers, and then once they start to take decisions on new projects, we do feel that we have all the possibilities to reach the guidance. At this point, I would welcome any questions that the audience may have.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Okay. Thank you very much. That was fairly quiet. Yeah, I mean, we are having a difficult period right now, it got worse before it can get better. We are still working hard to move forward with our AI-driven solutions. We are confident that with the work that we're doing and the relentless strategy execution will prove valuable for us and prove results as well. If you wish to ask any questions after the sessions here, feel free to contact Outi Torniainen and SVP for marketing and communications, our CFO, Helena Kukkonen, or myself for any questions that you may have. Thank you very much for tuning in.