Review by the President and CEO

President and CEO Kai Öistämö

Vaisala’s President and CEO Kai Öistämö

“Vaisala had a slow start for the year 2024, with market activity continuing at the same level as in the second half of 2023. Especially in the Industrial Measurements business area, the industrial actions in Finland and simultaneous ramp-up of the new Enterprise Resource Planning (ERP) system had a negative impact on our first quarter net sales. In the Weather and Environment business area, net sales decreased, mainly due to the timing of the project deliveries. On the other hand, growth of subscription sales continued strong. Decrease in net sales was partly mitigated by lower operating expenses resulting in a 6.4% operating result margin.

Decrease in our first quarter orders received reflects the continued low market activity level as well as the strong comparison period for the Industrial Measurements business area. In addition, as component availability has normalized, there was less incentive for customers to make annual orders compared to the beginning of last year. In the Weather and Environment business area, orders received were at previous year’s level reflecting stability in the market environment. On Vaisala level, the quarter ended with a record-high order book of EUR 190 million, of which 75% is scheduled to be delivered in 2024.

In February, we also updated our company purpose, Taking every measure for the planet, and sharpened our strategic priorities. Our renewed purpose reflects how we intend to expand our role as a leader in measurement instruments and intelligence. At the core of our strategy is our ambition to enable global climate action together with our customers, helping them to save resources, drive the energy transition, and care for the safety and well-being of people and societies. To support the recalibrated purpose, we also updated our visual brand identity.

After we closed the quarter, Vaisala’s greenhouse gas emission reduction targets received the approval by the Science Based Targets initiative in early April. Vaisala commits to more than halve its direct emissions (scope 1) and purchased-energy emissions (scope 2) from 2021 level by 2030. Moreover, Vaisala commits to more than halve its other indirect emissions (scope 3) in relation to gross profit within the same timeframe. As scope 3 emissions make up over 99 % of Vaisala’s total emissions, we focus especially on these categories in our emission reduction actions.

Looking ahead at the rest of 2024, we expect that there will be continued uncertainty in the business environment. We expect the market to improve and continue to anticipate that our performance in the second half of the year will be stronger than the first half. Despite the soft first quarter, we reiterate our full year 2024 business outlook. We estimate that our full-year 2024 net sales will be in the range of EUR 530–570 million and that our operating result (EBIT) will be in the range of EUR 63–78 million.”

Interim Report January-March 2024, May 3, 2024.