Review by the President and CEO

President and CEO Kai Öistämö

Vaisala’s President and CEO Kai Öistämö

“Vaisala’s third quarter 2023 reflected uncertainty in the business environment. Our quarterly net sales decreased slightly Y/Y following the continued soft demand for industrial products and services and headwinds from currency exchange rates. However, our gross margin improved clearly, and hence, our operating result reached 19.3% of net sales.

The demand for products and services for Industrial Measurements business area continued to be soft during the third quarter. The lower demand in industrial instruments, life science, as well as power and energy market segments led to a 14% decrease in orders received and 6% decrease in net sales Y/Y. However, we believe we have maintained our market position.

On the other hand, during the quarter, business environment for Weather and Environment business area was more resilient than in industrial measurements. The business area reached previous year’s level both in orders received and net sales. In order intake, aviation was the strongest market segment during the quarter.

Our gross margin improved clearly to 58% as additional costs related to component spot purchases have been fading away as expected and the sales mix in Weather and Environment business area was more favorable compared to previous year. The higher share of more profitable product and subscription sales played an important role in the business area’s gross margin improvement.

Our strategy execution continued as planned. In Weather and Environment business area, growth of subscription sales and growth businesses continued, and flagship business focused on profitability improvement. In Industrial Measurements business area, we continued our strategic investments in new technologies and products for long-term growth.

During the quarter, we also took the next steps on our journey of increasing climate action. In September, we submitted our science-based emission reduction targets for validation by the Science-Based Targets initiative (SBTi). We expect to receive approval from SBTi by February 2024.

The uncertainty in the business environment is expected to remain high during the fourth quarter of 2023. The additional costs related to component spot purchases are expected to be insignificant in the fourth quarter. We continue to estimate that our full-year 2023 net sales will be in the range of EUR 530–560 million and operating result (EBIT) to be in the range of EUR 65–75 million.”

Interim Report January-September 2023, October 27, 2023.