Review by the President and CEO

President and CEO Kai Öistämö

Vaisala’s President and CEO Kai Öistämö

“Vaisala’s year 2023 ended with strong order intake during the fourth quarter resulting to record-high order book of EUR 173 million. Despite the uncertain business environment, our fourth quarter net sales grew and both gross margin and operating result margin improved from previous year.

The business environment in 2023 deteriorated from previous year. The inflationary environment, continuation of geopolitical instability, and slow down in industrial investments are main factors that affected our performance. Despite the challenges in Industrial Measurements business area, and with strong performance in Weather and Environment business area, our full year order intake and net sales grew by 5%, and gross margin improved by one percentage point to 55.8%. Our operating expenses increased as planned due to investments in sales and marketing, R&D, and IT system renewal. Hence, our operating result margin remained at previous year’s level.

Our fourth quarter orders received grew by strong 14%. In Weather and Environment business area, we saw very strong growth of orders received, which was boosted by an approximately EUR 20 million order for an airport surface observation system for Kuwait International airport. Finalization of several-year negotiations is great evidence of persistent work in our governmental business. Fourth quarter order intake grew also in renewable energy and meteorology market segments. In Industrial Measurements business area, orders received decreased by 8%. The challenging market environment was visible especially in life science market segment. At the same time, orders for power and energy market segment grew very strongly.

Our fourth quarter net sales growth was a result of solid orders received during previous quarters in aviation, meteorology, renewable energy, as well as in roads and automotive market segment and through the continued strong growth in power and energy market segment. Our fourth quarter gross margin improved helped by significantly lower additional costs related component spot purchases compared to previous year.

Our strategy execution progressed during the year, while challenging business environment affected our financial performance. We continued our targeted investments to develop our technology leadership and to ensure future growth. In Weather and Environment business area, we developed our business operations and offering in the subscription-based data and software business. The net sales growth of both subscription sales and renewable energy business continued very strong. Moreover, we improved the profitability of the business in the more mature market of weather systems such as in meteorology and aviation. In Industrial Measurements business area, we further strengthened our product leadership with several new product launches. The business area’s net sales grew slightly despite the difficult market environment. As the year changed to 2024, we also reached an important milestone when our new company-wide ERP system went live. Vaisala employees showed perseverance and flexibility throughout the year, and I would like to thank all colleagues and partners for their commitment to continue executing our strategy.

In 2024, the uncertainty in the business environment is expected to continue high. We anticipate that our second half performance will be stronger compared to the first half as market improves. In the first quarter, combined impact of implementation of new ERP system and industrial actions in Finland is expected to affect our operations and financial performance. We expect the situation to normalize by the second quarter. 

We estimate that our full-year 2024 net sales will be in the range of EUR 530–570 million and operating result (EBIT) to be in the range of EUR 63–78 million.”
 

Financial Statement Release January-December 2023, February 14, 2024.