CEO's review

The year 2024 was a very difficult period for us. Orders received by our customers, and their order backlogs, were generally on a declining trend throughout the year, and very few decisions on new investments were made in the highly uncertain market situation. This led to a weakening of the demand situation in all four quarters. The defense industry and the energy industry were the only customer industries that saw positive development. In Europe, the Finnish and German markets were particularly challenging, but demand was also weak in other markets. The Chinese market developed in the opposite direction in the second half of the year. The demand situation in China improved substantially, which supported the development of our business.

In a challenging market situation, our organic revenue decreased, but we achieved slight growth in total revenue supported by acquisitions. Our extensive adaptation measures, which continued in the fourth quarter, had a significant negative impact on our operating profit, which was modest for the year. Nevertheless, the adaptation measures were effective, as operational profitability in the fourth quarter improved across all of our service areas when compared to the preceding quarters. We were successful in managing our cash flow in the challenging situation, and our operating cash flow was at a good level throughout the year.

During the year, we continued to develop the company and invested in future growth. We acquired two companies, invested in the development of our service offering and implemented our first AI-powered service solutions for our customers. We also strengthened our cost competitiveness by acquiring a minority stake in the Bangladesh-based company BJIT. We worked on our strategy during the year and, at the end of the year, we published our updated strategy and strategic targets. Our updated strategy, which is strongly driven by artificial intelligence, will guide our operations over the next three years. We will transform as a company and again create new added value for our customers with the help of new technologies and AI.

Although we had to make difficult decisions in 2024, our organization was able to perform well even in difficult situations, and I would like to take this opportunity to thank everyone for their perseverance and good work. After the difficult decisions, we are ready to move forward and implement our new strategy. We enter 2025 in a market situation that is still difficult, but we got off to a strong start by acquiring Germany-based Novacon Powertrain in January. We also expect our customers’ investments to get started, and we anticipate that the demand situation will improve over the course of the year. Consequently, we expect a clear year-on-year improvement in both revenue and operating profit.

Juha Näkki
President and CEO

Updated February 12, 2025