Review by the President and CEO

Kjell Forsen

Vaisala’s President and CEO Kjell Forsén comments on the third quarter 2018

"Vaisala’s third quarter operating result was good. Gross margin improvement in project deliveries in Weather and Environment Business Area was noteworthy and Industrial Measurements Business Area continued its strong performance. I am satisfied with the operating result exceeding 17% of net sales.

Despite solid profitability development, third quarter net sales fell short from previous year mainly due to timing of project deliveries in EMEA. Industrial Measurements Business Area’s growth continued and net sales for the quarter were all-time high, EUR 29.5 million.

Order intake was a disappointment particularly in Weather and Environment Business Area’s. As opposed to previous year, no large deals were signed.

Progress in strategic focus areas was mixed. On the positive side, net sales to life science customers grew double-digit, while sales ramp-up of power transmission products has been slow and challenging as customers’ decision cycles are long. Digital Solutions net sales did not quite reach the same level as during the first half, however, profitability developed positively. Operations has successfully continued productivity improvements and manufacturing partner consolidation.

R&D activities have progressed according to plans and both business areas have introduced new products to the market. New automatic radiosonde launching system enables full automation of sounding operations. New forward scatter series is targeted to meteorological institutes and airports. The series consists of visibility sensor and present weather sensor. Deliveries for these new weather observation solutions are estimated to start during the first half of 2019. An upgraded and a new hydrogen peroxide measurement probes are designed for environmentally friendly bio-decontamination processes. Both smart probes are optimized to provide accurate and repeatable measurements even in high humidity. Deliveries for these industrial measurement products are planned to start already this year.

At the beginning of October, we announced acquisition of Leosphere specializing in developing, manufacturing and servicing turnkey wind lidar (light detection and ranging) instruments for wind energy, aviation, meteorology, and air quality customer segments. With EUR 27 million net sales in 2017, Leosphere is the biggest acquisition in Vaisala’s history. This acquisition supports Weather and Environment Business Area’s strategy to drive industry leadership and growth through strengthening its position as a global leader providing remote wind sensing technologies for growing markets. I am very excited in welcoming our new colleagues to Vaisala.

Following this acquisition, we estimate our full-year 2018 net sales to be in the range of EUR 340–360 million and operating result (EBIT) to be in the range of EUR 30–36 million."

Kjell Forsén

President and CEO

Interim Report January-September 2018, October 23, 2018​