Review by the President and CEO
Vaisala’s President and CEO Kjell Forsén comments on the fourth quarter and full-year 2017
“Vaisala´s performance was strong in the fourth quarter of 2017. Demand for weather observation and industrial measurement solutions continued healthy, even though our orders received totaling EUR 83.5 million did not reach comparison period’s level, which included the USD 18 million Bahamas contract. However, we were happy to book the second project phase of the Vietnamese weather infrastructure contract amounting to EUR 4.5 million. Deliveries of the contract are proceeding well.
Fourth quarter net sales were all-time high at EUR 102.3 million with 10% growth year-on-year despite negative exchange rate effect. In Weather and Environment Business Area, net sales increased by 12%. Project deliveries increased by 38% from previous year and deliveries to meteorology customer segment were at high level reflecting strong orders received earlier in the year. In Industrial Measurement Business Area, net sales growth was 6%, and twice as much with comparable exchange rates. In absolute terms, increase in net sales came from instrument deliveries while power transmission and continuous monitoring system deliveries grew strongest. In geographical terms, deliveries were strong in Europe in both business areas.
Fourth quarter operating result improved from previous year and was EUR 18.5 million or 18.1% of net sales. Weather and Environment Business Area’s quarterly operating result of EUR 14.0 million accounted for three-fourths of the business area’s full-year result, which has been seasonally typical for the business area. In Industrial Measurements Business Area, investments in R&D, sales and marketing as well as in process digitalization burdened profitability, and hence, business area’s operating result fell short of previous year’s level.
During the fourth quarter, we acquired a company specializing in computer vision and artificial intelligence. This acquisition follows Weather and Environment Business Area’s strategic target to grow and expand to environmental measurements. Our intention is to utilize the acquired computer vision platform by further developing innovative offering more widely to our customer segments. In Industrial Measurements Business Area, our entry to power transmission moved from testing phase to commercial deals towards the end of the year.
Vaisala performed very well in 2017. Net sales and operating result were the highest in Vaisala’s history, operating result margin continued to improve towards our long-term target level, cash flow continued strong and we entered year 2018 with a strong order book. Weather and Environment Business Area improved in all aspects after several challenging years. Industrial Measurements Business Area consistently continued positive performance throughout the year. Operations continued good on-time delivery performance contributing to net sales growth and improved product quality as well as productivity supporting profitability development.
I want to thank all Vaisala employees warmly for excellent contribution and commitment in 2017. The excellent outcome of the year would not have been possible without your strong efforts.
In 2018, we plan to increase our investment in R&D, sales and marketing as well as digitalization. Net sales development is expected to be further burdened by negative exchange rate impact. Therefore, we estimate our full-year 2018 net sales to be in the range of EUR 330–350 million and operating result (EBIT) in the range of EUR 35–45 million.”
President and CEO
Financial Statement Release 2017, February 7, 2018