CEO's review

Our business is suffering from the current investment slump, and the third quarter was very difficult for us. The market situation weakened throughout the review period, contrary to our expectations, and we had to lower our guidance twice: first at the end of August and again in mid-October. New investment projects were started at a very slow pace, and our customers focused mainly on cost-saving measures.

Our revenue remained at the same level as the previous year due to acquisitions, but in the difficult situation our revenue decreased organically. The market situation was particularly difficult in Finland and Germany, but the demand situation was also challenging elsewhere in Europe. In China, the trend of purchasing services developed favorably, and we managed to significantly increase the number of hours sold to the Chinese market. 

As the market situation weakened, our operational efficiency declined and we had to implement new adaptation measures to improve efficiency. At the same time, we aimed to strengthen our ability to implement our new strategy for the strategic period of 2025–2027, which is currently being prepared. Adaptation measures were implemented in all of our service areas. In the Engineering Solutions service area, we also decided to discontinue the Building Technology business in Germany and focus on our core business. The adaptation measures caused significant non-recurring costs that had a negative effect on our result. The correction of an unfortunate accounting error in Sweden further lowered our profit level, and the result was weak.

In spite of the difficult situation, we continued to invest in the development of our business and service offering. The rapid development of technology, and artificial intelligence in particular, makes it essential to continue developing new solutions. We want to stay on the leading edge of development and help our customers benefit from new technologies through our service solutions. This will be a key part of our new strategy for 2025–2027, which is currently being prepared and will be published in December 2024.

We no longer believe that the market situation will improve substantially this year. We have implemented adaptation measures, and will implement new adaptation measures in the fourth quarter, if necessary. These measures are painful, but they help us ensure the restoration of profitability and, consequently, our ability to invest in continued profitable growth when the market situation improves.

Juha Näkki
President and CEO

October 31, 2024