2016-02-10 13:00:50 CET
2016-02-10 13:00:50 CET
REGULATED INFORMATION
Vaisala - Financial Statement Release
Vaisala Corporation Financial Statement Release 2015
Vaisala Corporation
Financial Statement Release
February 10, 2016 at 2.00 p.m.
Vaisala Corporation Financial Statement Release 2015
In January-December 2015, net sales increased by 6% to EUR 318.5 million and
operating result increased by 12% to EUR 29.6 million.
October-December 2015 highlights
* Orders received EUR 90.7 (87.1) million, increase 4%
* Order book EUR 129.2 (129.2) million, increase 0%
* Net sales EUR 101.1 (95.7) million, increase 6%
* Gross margin 54.1% (52.5%)
* Operating result EUR 19.1 (14.9) million, increase 28%
* Earnings per share EUR 0.98 (0.73), increase 35%
* Cash flow from operating activities EUR 29.0 (15.0) million
January-December 2015 highlights
* Orders received EUR 318.5 (295.0) million, increase 8%
* Net sales EUR 318.5 (299.7) million, increase 6%
* Gross margin 51.1% (51.1%)
* Operating result EUR 29.6 (26.4) million, increase 12%
* One-time expenses related to the restructuring EUR 1.8 million
* Earnings per share EUR 1.52 (1.30), increase 17%
* Cash flow from operating activities EUR 38.8 (23.8) million
* Cash and cash equivalents EUR 59.2 (47.6) million
* Dividend paid EUR 16.4 (16.2) million
* Vaisala's Board of Directors is proposing a dividend of EUR 0.95 per share
(0.90 per share in 2014)
* Business outlook for 2016: Vaisala estimates its full year 2016 net sales to
be in the range of EUR 305-335 million and the operating result (EBIT)
excluding non-recurring items in the range of EUR 28-38 million
Vaisala's President and CEO Kjell Forsén
"The fourth quarter of the year is typically strong for Vaisala, and again one
third of annual net sales was generated during the last quarter. Orders received
increased by 4% from previous year driven by Controlled Environment Business
Area's order intake which grew 10%. Vaisala's fourth quarter net sales were all-
time high and amounted to EUR 101.1 million, an increase of 6% compared to
previous year.
Fourth quarter net sales developed especially well in Americas following the
positive trend which started in the previous quarter and also APAC performed
well. Excellent net sales growth was achieved in Controlled Environment Business
Area increasing 10% into EUR 24.5 million. Weather Business Area net sales were
EUR 76.6 million and increased by 4%. The weakening euro had a notable positive
effect. Operating result was 19.1 million, increasing 28%, which is quite an
achievement. This clear improvement was a result of favorable sales mix,
improved project profitability in Weather Business Area as well as USD
appreciation against EUR and of course keeping operating expenses under control.
Vaisala performed well in 2015 despite challenging market conditions. Vaisala's
orders received were EUR 318.5 million resulting in 8% increase from previous
year. Both business areas increased orders received materially in Americas, and
Controlled Environment Business Area's order intake grew in all regions totally
by 18%. Net sales growth was strong and the three hundred million barrier was
crossed as the highest ever net sales were EUR 318.5 million. Controlled
Environment Business Area was performing especially well as its net sales
increased by 16% year-on-year to EUR 93.0 million. Weather Business Area net
sales were EUR 225.5 million and increased by 3%. Operating result was EUR 29.6
million and increased by 12%. The EUR 3.2 million improvement was due to higher
net sales but certainly the restructuring and related cost savings had a
positive impact as well.
I want to thank all Vaisala employees for the excellent result which was
achieved by a competent team driving continuous renewal and improvement.
In 2015, Vaisala's strategy implementation progressed steadily and investments
continued in strategic growth areas both in Weather and Controlled Environment
Business Areas. In Weather Business Area we continued our efforts to drive
growth in renewable energy business, however, the sales performance did not yet
meet our expectations. The renewable energy market continued to grow, but market
entry has taken longer than anticipated. In Controlled Environment we continued
investing in growth markets, Life Science and Power Transmission. Regional
expansion progressed well by contracting new distributors in countries with high
industrial potential.
In 2016, Vaisala is expecting stable weather observation and industrial
measurement market conditions. Especially weather radars have favorable market
outlook, and also demand from renewable energy industry is expected to increase.
In EMEA and Americas demand for weather observation solutions is expected to
remain stable and slightly weaken in APAC. Demand for industrial measurement
solutions is expected to remain good in EMEA and Japan, whereas demand in
Americas is expected to remain stable.
We estimate our full-year 2016 net sales to be in the range of EUR 305-335
million and the operating profit (EBIT) in the range of EUR 28-38 million."
Key Figures
10-12/2015 10-12/2014 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Orders received, EUR million 90.7 87.1 318.5 295.0
Order book, EUR million 129.2 129.2 129.2 129.2
Net sales, EUR million 101.1 95.7 318.5 299.7
Gross profit, EUR million 54.7 50.2 162.8 153.1
Gross margin, % 54.1 52.5 51.1 51.1
Operating expenses, EUR million 35.7 35.4 131.9 127.2
Operating result, EUR million 19.1 14.9 29.6 26.4
Operating result, % 18.9 15.6 9.3 8.8
Profit (loss) before taxes, EUR
million 20.2 15.7 33.0 29.1
Profit (loss) for the period, EUR
million 17.7 13.1 27.5 23.4
Earnings per share, EUR 0.98 0.73 1.52 1.30
Return on equity, % 15.7 14.3
Capital expenditure, EUR million 2.9 2.1 8.3 7.9
Depreciation, EUR million 3.8 4.0 15.1 15.2
Cash flow from operating activities,
EUR million 29.0 15.0 38.8 23.8
Cash and cash equivalents, EUR
million 59.2 47.6
-------------------------------------------------------------------------------
Market situation in October-December 2015
Global economy continued to decelerate slightly in the fourth quarter 2015, and
especially emerging economies were slowing down. However, demand for weather
observation and industrial measurement solutions remained solid despite
macroeconomic weakening. Weather observation market continued seasonal
improvement, and as typical significant portion of Vaisala Weather Business
Area's annual revenue was recognized in the fourth quarter 2015. Market
environment for industrial measurement solutions remained stable.
In EMEA weather observation markets in Russia and its neighboring countries
continued to be affected by difficult economic conditions and depreciated
currencies, in Western Europe market was stable. Demand for industrial
measurement solutions continued to increase in EMEA.
In Americas demand from North American weather observation customers continued
to improve in the fourth quarter 2015, and also in Latin America weather
infrastructure project tendering picked up. Demand for industrial measurement
solutions was flat in Americas.
In APAC weather observation market remained active in the fourth quarter 2015.
Good demand for industrial measurement solutions continued in Japan, in the rest
of APAC market conditions were affected by deceleration of Chinese manufacturing
industry.
October-December 2015 performance
Orders received
EUR million 10-12/2015 10-12/2014 Change, % 2015 2014
-------------------------------------------------------------------
Weather 66.7 65.4 2 224.0 215.2
Controlled Environment 24.0 21.7 10 94.5 79.8
-------------------------------------------------------------------
Total 90.7 87.1 4 318.5 295.0
-------------------------------------------------------------------
Order book
EUR million 10-12/2015 10-12/2014 Change, % 2015 2014
-------------------------------------------------------------------
Weather 122.2 123.7 -1 122.2 123.7
Controlled Environment 7.0 5.5 28 7.0 5.5
-------------------------------------------------------------------
Total 129.2 129.2 0 129.2 129.2
-------------------------------------------------------------------
Orders received
In the fourth quarter 2015, Vaisala's orders received were EUR 90.7 (87.1)
million and increased by 4% compared to previous year. The increase came from
Americas.
In the fourth quarter 2015, Weather Business Area's orders received were EUR
66.7 (65.4) million and increased by 2% compared to previous year. The increase
came from Energy and Transportation business units.
In the fourth quarter 2015, Controlled Environment Business Area's orders
received were EUR 24.0 (21.7) million and increased by 10% compared to previous
year. The increase came from all regions.
Order book
At the end of December 2015, Vaisala's order book was EUR 129.2 (129.2) million
and was at last year's level. The order book increased in Americas. Of the order
book EUR 95.5 (74.1) million will be delivered in 2016.
At the end of December 2015, Weather Business Area's order book was EUR 122.2
(123.7) million and decreased by 1% compared to previous year. Meteorology
Infrastructure business unit's order book decreased. Of the order book EUR 88.8
(70.0) million will be delivered in 2016.
At the end of December 2015, Controlled Environment Business Area's order book
was EUR 7.0 (5.5) million and increased by 28% compared to previous year. The
increase came from all regions. Of the order book EUR 6.7 (4.1) million will be
delivered in 2016.
Net sales by business area
EUR million 10-12/2015 10-12/2014 Change, % 2015 2014
-------------------------------------------------------------------
Weather 76.6 73.3 4 225.5 219.6
Products 41.3 35.9 15 116.2 108.1
Projects 23.1 26.6 -13 71.0 74.7
Services 12.2 10.9 12 38.3 36.7
Controlled Environment 24.5 22.3 10 93.0 80.2
Products 22.2 20.0 11 83.5 71.9
Services 2.3 2.4 -4 9.5 8.3
-------------------------------------------------------------------
Total 101.1 95.7 6 318.5 299.7
-------------------------------------------------------------------
Net sales by region
EUR million 10-12/2015 10-12/2014 Change, % 2015 2014
-------------------------------------------------------------------
EMEA 33.8 35.8 -6 105.1 111.8
Americas 42.3 36.2 17 132.0 112.1
APAC 25.0 23.7 6 81.3 75.9
-------------------------------------------------------------------
Total 101.1 95.7 6 318.5 299.7
-------------------------------------------------------------------
In the fourth quarter 2015, Vaisala's net sales were EUR 101.1 (95.7) million
and increased by 6% compared to previous year. Vaisala's net sales in EMEA were
EUR 33.8 (35.8) million and decreased by 6%, in the Americas EUR 42.3 (36.2)
million and increased by 17% and in APAC EUR 25.0 (23.7) million and increased
by 6%. At comparable exchange rates net sales would have been EUR 94.9 (95.7)
million and decrease would have been EUR 0.8 million or 1% from previous year.
The positive exchange rate effect was EUR 6.2 million, which was mainly caused
by USD exchange rate appreciation against EUR.
In the fourth quarter 2015, Weather Business Area's net sales were EUR 76.6
(73.3) million and increased by 4% compared to previous year. The increase came
from Transportation and Meteorology Infrastructure business units. Net sales
improved in product and services businesses. At comparable exchange rates the
net sales would have been EUR 72.1 (73.3) million and decrease would have been
EUR 1.2 million or 2% from previous year. The positive exchange rate effect was
EUR 4.5 million, which was mainly caused by USD appreciation against EUR.
In the fourth quarter 2015, Controlled Environment Business Area's net sales
were EUR 24.5 (22.3) million and increased by 10% compared to previous year. The
growth came from all regions. At comparable exchange rates the net sales would
have been EUR 22.8 (22.3) million and increase would have been EUR 0.4 million
or 2% from previous year. The positive exchange rate effect was EUR 1.7 million,
which was mainly caused by USD appreciation against EUR.
Gross margin and operating result
10-12/2015 10-12/2014 Change, % 2015 2014
------------------------------------------------------------------------
Gross margin, % 54.1 52.5 51.1 51.1
Weather 51.9 50.2 47.4 48.4
Controlled Environment 62.5 59.8 60.4 58.4
Operating result, EUR million 19.1 14.9 28 29.6 26.4
Weather 15.1 12.7 19 15.2 17.0
Controlled Environment 4.9 3.9 23 18.3 12.1
Eliminations and other -0.9 -1.7 49 -4.0 -2.8
------------------------------------------------------------------------
In the fourth quarter 2015, Vaisala's operating result was EUR 19.1 (14.9)
million and increased by 28% compared to previous year. Operating result
increase was due to higher net sales and gross margin in both Weather and
Controlled Environment Business Areas. Gross margin was 54.1% (52.5%) and the
increase was mainly due to more favorable sales mix, improved project
profitability in Weather Business Area as well as positive impact of USD
appreciation against EUR. Operating expenses were EUR 35.7 (35.4) million and
increased by 1%. The increase came mainly from USD based expenses growing due to
USD appreciation against EUR.
In the fourth quarter 2015, Weather Business Area's operating result was EUR
15.1 (12.7) million and increased by 19% compared to previous year. Operating
result increase was due to higher net sales and gross margin. Gross margin was
51.9% (50.2%) and the increase was mainly due to improved project profitability
and more favorable sales mix. Operating expenses were EUR 24.7 (24.2) million
and increased by 2%. The increase came mainly from USD based expenses growing
due to USD appreciation against EUR.
In the fourth quarter 2015, Controlled Environment Business Area's operating
result was EUR 4.9 (3.9) million and increased by 23% compared to previous year.
Operating result increase was due to higher net sales and gross margin. Gross
margin was 62.5% (59.8%) and the increase was mainly due to positive impact of
USD appreciation against EUR, higher sales volumes and related improvement in
scale economies. Operating expenses were EUR 10.5 (9.4) million and increased by
11%. The increase came mainly from higher research and development expenses as
well as USD based expenses growing due to USD appreciation against EUR.
In the fourth quarter 2015, financial income and expenses were EUR 1.2 (0.6)
million. The increase is mainly due to foreign exchange gains related to
valuation of USD denominated receivables.
In the fourth quarter 2015, profit/loss before taxes was EUR 20.2 (15.7)
million. Income taxes were EUR
2.5 (2.5) million. Net result was EUR 17.7 (13.1) million.
In the fourth quarter 2015, earnings per share were EUR 0.98 (0.73).
Market situation in 2015
Macroeconomic conditions were moderate in 2015, and also weather observation and
industrial measurement markets were stable. However, performance of different
market segments and geographic areas varied significantly. Demand for weather
radars and industrial measurement solutions developed well. Heavy decline in
commodity prices, especially in crude oil and natural gas, affected market
conditions in offshore business and commodity exporting economies. Depreciation
of euro improved Vaisala's financial performance.
In EMEA weather observation markets in Russia and its neighboring countries were
affected by difficult economic conditions and depreciated currencies. In rest of
EMEA weather observation market was stable, but demand was slightly below very
active 2014. Demand for industrial measurement solutions increased in EMEA in
2015.
In Americas weather observation market was quiet in the first half of 2015.
However, good demand from North American customers improved market activity
significantly during the second half of the year. Market environment for
industrial measurement solutions was stable.
In APAC weather observation market was active in 2015, also supported by good
demand from China. Demand for industrial measurement solutions was good in
Japan, in the rest of APAC deceleration of Chinese manufacturing industry
affected market conditions especially in the second half of the year.
January-December 2015 performance
Orders received
EUR million 2015 2014 Change, %
---------------------------------------------
Weather 224.0 215.2 4
Controlled Environment 94.5 79.8 18
---------------------------------------------
Total 318.5 295.0 8
---------------------------------------------
Order book
EUR million 2015 2014 Change, %
---------------------------------------------
Weather 122.2 123.7 -1
Controlled Environment 7.0 5.5 28
---------------------------------------------
Total 129.2 129.2 0
---------------------------------------------
Orders received
In January-December 2015, Vaisala' orders received were EUR 318.5 (295.0)
million and increased by 8% compared to previous year. The increase came from
Americas.
In January-December 2015, Weather Business Area's orders received were EUR
224.0 (215.2) million and increased by 4% compared to previous year. The
increase came from Energy and Transportation business units.
In January-December 2015, Controlled Environment Business Area's orders received
were EUR 94.5 (79.8) million and increased by 18% compared to previous year. The
growth came from all regions.
Order book
At the end of December 2015, Vaisala's order book was EUR 129.2 (129.2) million
and were at last year's level. The order book increased in Americas. Of the
order book EUR 95.5 (74.1) million will be delivered in 2016.
At the end of December 2015, Weather Business Area's order book was EUR 122.2
(123.7) million and decreased by 1% compared to previous year. Meteorology
Infrastructure business unit's order book decreased. Of the order book EUR 88.8
(70.0) million will be delivered in 2016.
At the end of December 2015, Controlled Environment Business Area's order book
was EUR 7.0 (5.5) million and increased by 28% compared to previous year. The
increase came from all regions. Of the order book EUR 6.7 (4.1) million will be
delivered in 2016.
Net sales by business area
EUR million 2015 2014 Change, %
---------------------------------------------
Weather 225.5 219.6 3
Products 116.2 108.1 7
Projects 71.0 74.7 -5
Services 38.3 36.7 4
Controlled Environment 93.0 80.2 16
Products 83.5 71.9 16
Services 9.5 8.3 15
---------------------------------------------
Total 318.5 299.7 6
---------------------------------------------
Net sales by region
EUR million 2015 2014 Change, %
---------------------------------------------
EMEA 105.1 111.8 -6
Americas 132.0 112.1 18
APAC 81.3 75.9 7
---------------------------------------------
Total 318.5 299.7 6
---------------------------------------------
In January-December 2015, Vaisala's net sales were EUR 318.5 (299.7) million and
increased by 6% compared to previous year. Vaisala's net sales in EMEA was EUR
105.1 (111.8) million and decreased by 6%, in the Americas EUR 132.0 (112.1)
million and increased by 18% and in APAC EUR 81.3 (75.9) million and increased
by 7%. Operations outside Finland accounted for 98% (97%) of net sales. At
comparable exchange rates the net sales would have been EUR 294.5 (299.7)
million and decrease would have been EUR 5.3 million or 2% from previous year.
The positive exchange rate effect was EUR 24.0 million, which was mainly caused
by USD exchange rate appreciation against EUR.
In January-December 2015, Weather Business Area's net sales were EUR 225.5
(219.6) million and increased by 3% compared to previous year. The increase came
from Meteorology Infrastructure and Transportation business units, and Energy's
net sales were on previous year's level. Weather Business Area improved its net
sales in product and services businesses. At comparable exchange rates the net
sales would have been EUR 209.9 (219.6) million and decrease would have been EUR
9.6 million or 4% from previous year. The positive exchange rate effect was EUR
15.6 million, which was mainly caused by USD appreciation against EUR. At
comparable exchange rates net sales of all Weather Business Area business units
decreased.
In January-December 2015, Controlled Environment Business Area's net sales were
EUR 93.0 (80.2) million and increased by 16% compared to previous year. Net
sales increased in all regions. At comparable exchange rates the net sales would
have been EUR 84.5 (80.2) million and increase would have been EUR 4.3 million
or 5% from previous year. The positive exchange rate effect was EUR 8.6 million,
which was mainly caused by USD appreciation against EUR. At comparable exchange
rates net sales of EMEA and APAC grew, and Americas was on previous year's
level.
Gross margin and operating result
2015 2014 Change, %
--------------------------------------------------
Gross margin, % 51.1 51.1
Weather 47.4 48.4
Controlled Environment 60.4 58.4
Operating result, EUR million 29.6 26.4 12
Weather 15.2 17.0 -11
Controlled Environment 18.3 12.1 51
Eliminations and other -4.0 -2.8 43
--------------------------------------------------
In January-December 2015, Vaisala's operating result was EUR 29.6 (26.4) million
and increased by 12% compared to previous year. Operating result increase was
due to higher net sales in both business areas. Vaisala's gross margin was
51.1% (51.1%). Vaisala's operating expenses were EUR 131.9 (127.2) million and
increased by 4% compared to previous year. The increase came mainly from USD
based expenses growing due to USD appreciation against EUR. In addition,
operating result was decreased by EUR 1.8 million one-time expenses related to
the restructuring.
In January-December 2015, Weather Business Area's operating result was EUR 15.2
(17.0) million and decreased by 11% compared to previous year. Gross margin was
47.4% (48.4%) and declined by one percentage point. The decrease was mainly due
to lower sales volumes especially during the first half of the year and related
weakening in scale economies as well as unfavorable inventory valuations related
to Vaisala's commitments as a result of products with long life-cycles. However,
gross margin of customer projects improved. Operating expenses were EUR 91.9
(89.7) million and increased by 2%. The increase came mainly from USD based
expenses growing due to USD appreciation against EUR.
In January-December 2015, Controlled Environment Business Area's operating
result was EUR 18.3 (12.1) million and increased by 51% compared to previous
year. Gross margin was 60.4% (58.4%) and the increase was mainly due to positive
impact of USD appreciation against EUR as well as higher sales volumes and
related improvement in scale economies. Operating expenses were EUR 37.9 (34.7)
million and increased by 9%. The increase came mainly from USD based expenses
growing due to USD appreciation against EUR as well as higher research and
development expenses.
In January-December 2015, financial income and expenses were EUR 3.5 (2.6)
million. The increase is mainly due to foreign exchange gains related to
valuation of USD denominated receivables.
In January-December 2015, profit/loss before taxes was EUR 33.0 (29.1) million.
Income taxes were EUR
5.5 (5.7) million. Effective tax rate for January-December 2015 was 16.6%
(19.5%). The decrease of the effective tax rate was due to tax refund related to
previous financial years. Net result was EUR 27.5 (23.4) million.
Statement of financial position and cash flow
Vaisala's financial position remained strong at the end of the December 2015.
Cash and cash equivalents amounted to EUR 59.2 (47.6) million at the end of
December 2015 and Vaisala did not have any material interest bearing
liabilities.
The statement of financial position total was EUR 264.0 (244.6) million. The
increase was due to EUR depreciation against other currencies and also better
net profit as well as increased level of inventories, cash balance and short
term liabilities.
In January-December 2015, Vaisala's cash flow from operating activities was EUR
38.8 (23.8) million. The improvement compared to previous year was mainly due to
development of working capital and better profitability.
Vaisala repurchased 160,000 own shares with EUR 3.9 million during the financial
year 2015.
Capital expenditure and divestments
In January-December 2015, gross capital expenditure totaled EUR 8.3 (7.9)
million. Capital expenditure was mainly related to investments in machinery and
equipment to develop and maintain Vaisala's production and service operations.
Depreciation and amortization was EUR 15.1 (15.2) million.
Research and development
In January-December 2015, research and development expenses totaled EUR 36.1
(34.0) million, representing 11.3% (11.3%) of net sales.
R&D by business area
EUR million 10-12/2015 10-12/2014 Change, % 2015 2014 Change, %
---------------------------------------------------------------------------
Weather 7.5 7.3 3 26.7 25.7 4
Controlled Environment 2.8 2.1 34 9.4 8.2 15
---------------------------------------------------------------------------
Total 10.3 9.4 10 36.1 34.0 6
---------------------------------------------------------------------------
In January-December 2015, Weather Business Area R&D expenses were 11.8% (11.7%)
of net sales. Controlled Environment Business Area R&D expenses were 10.1%
(10.3%) of net sales.
Weather Challenge, an open innovation competition, was introduced at Slush 2015
start-up event in Finland. The goal of the competition is to collect globally
ideas for weather data related business opportunities.
Key product and software releases
In 2015, Vaisala launched several new advanced products and software to enhance
growth as well as to replace existing products. More details concerning the new
products and software can be found at www.vaisala.com.
Weather Business Area launched a new version of Vaisala Observation Network
Manager NM10, which is a scalable, automated system to remotely monitor and
manage different weather observation sites. The new NM10 enables cost effective
deployment of Automatic Weather Station networks and advanced remote monitoring
and control of Autosonde stations supporting Vaisala 4:th Generation
radiosondes. With this system customers can keep their network up and running
and secure continuous data availability.
Second key launch of Weather Business Area was IRIS Focus, the next generation
weather radar software designed for meteorologists to support in more accurate
precipitation estimation and classification as well as earlier warnings of
severe weather conditions.
Third key launch of Weather Business Area was Thunderstorm Manager, a web based
global application enabling customers to minimize the risk of lightning strikes
impacting their operations.
Fourth key launch of Weather Business Area was Nomad 3 Data Logger for the wind
energy market. Nomad 3 is a flexible and portable data management device, which
enables wind energy developers and operators to operate more efficiently.
Controlled Environment Business Area launched a Moisture and Hydrogen
Transmitter MHT410 for transformer oil, which enables power generation and
transmission customers to easily monitor the condition of their transformer
assets.
Controlled Environment Business Area launched also GMW80-series carbon dioxide
(CO2) and temperature transmitter series with second generation CARBOCAP®
technology for standard demand-controlled ventilation application. Another
important CO2 product launch was GMP251, which is a probe intended for
industrial and semi-industrial CO2 measurement applications such as CO2
incubator control and monitoring, cold storage monitoring, as well as measuring
CO2 in fruit and vegetable storages and during their transportation.
Personnel
In 2015 both Vaisala's organization and competence development activities
focused on improving the ability to execute growth strategies and to improve
operational efficiency. The program for restructuring business organization in
spring 2015 advanced smoothly and the new organizational structure was well
received. In this program Controlled Environment Business Area established
regional organization structure with profit and loss responsibility. In Weather
Business Area its sales teams were integrated into three profit and loss
responsible and customer-oriented business units. Also Service organization was
integrated into Weather and Controlled Environment Business Areas. After
completing the simplification of the organization structure Vaisala's competence
development activities focused on sales support, customer and application
knowledge as well as process development.
ERP upgrade implemented in January 2015 was supported by comprehensive training
programs in order to support its many users in applying re-designed processes,
new functionalities as well as using new systems and solutions integrated with
ERP. The upgrade was followed by further process, working practice and related
competence development throughout the year. Sales to Delivery process renewals
were targeted for increased customer satisfaction and internal process
efficiency. Product Delivery process development activities continued with the
focus to improve on-time delivery. New cross-functional Product Creation process
was released and piloted in new R&D projects. Interactive training sessions with
supportive e-learning modules were developed to facilitate the implementation of
process changes and usage of new applications and tools.
Weather Education program started in the USA and in Europe, and 180 people
attended the training sessions. The program was designed to enhance
participants' understanding of weather phenomena, its impact on weather related
customers and how Weather Business Area's offering is aligned with customer
requirements. Also the development of value selling capabilities continued.
Vaisala continued developing its management system and in Operations daily
management practice was taken into use in all factories. This practice has
improved employees' end-to-end process understanding whereby organization's
capability for quick reactions and proactive planning has improved.
Vaisala Business Learning Program continued with strategy and leadership modules
and strategic business assignments. Also Leadership development Program LEAD
continued and Leading Quality modules were organized in all regions.
The average number of personnel employed in Vaisala during January-December
2015 was 1,611 (1,617). The number of employees at the end of December 2015 was
1,588 (1,613).
On December 31, 2015, 66% (64%) of employees were located EMEA, 26% (27%) in the
Americas and 8% (9%) in APAC. 41% (43%) of employees were based outside Finland.
December 31, 2015 December 31, 2014 Change, employees
-------------------------------------------------------------------------------
Finland 930 917 13
EMEA (excluding Finland) 119 123 -4
Americas 407 438 -31
APAC 132 135 -3
-------------------------------------------------------------------------------
Total 1,588 1,613 -25
-------------------------------------------------------------------------------
As a part of the business restructuring, the Service function was integrated
into Weather and Controlled Environment Business Areas and the number of
services related people decreased during 2015.
December 31, 2015 December 31, 2014 Change, employees
--------------------------------------------------------------------------
Sales and marketing 386 387 -1
R&D 304 296 8
Operations 379 370 9
Services 357 384 -27
Administration 162 176 -14
--------------------------------------------------------------------------
Total 1,588 1,613 -25
--------------------------------------------------------------------------
Share-based incentive plans
On May 3, 2012 the Board of Directors resolved for the Group key employees a
share-based incentive plan that was based on the development of Group's
profitability in calendar year 2012 and it was paid partly in the Company's
series A shares and partly in cash in March 2015. The cash proportion was paid
to cover taxes and tax-related costs arising from the reward to employees. No
reward was paid to employees whose employment or service had ended before the
reward payment date. In total 63,800 A shares were transferred. In 2015, EUR
0.2 million and in 2012-2014 EUR 1.7 million was expensed for the plan.
On February 6, 2013 the Board of Directors resolved for the Group key employees
a share-based incentive plan that was based on the development of Group's
profitability in calendar year 2013 and it will be paid partly in the Company's
series A shares and partly in cash in spring 2016. The cash proportion will
cover taxes and tax-related costs arising from the reward to a key employee. No
reward will be paid, if a key employee's employment or service ends before the
reward payment date. Maximum amount corresponding to 150,000 shares will be paid
depending on the number of entitled persons in the company at the end of vesting
period. No reward will be paid based on this plan as the profitability targets
for 2013 were not met.
On February 10, 2014 the Board of Directors resolved for the Group key employees
a share-based incentive plan that was based on the development of Group's
profitability in calendar year 2014 and it will be paid partly in the Company's
series A shares and partly in cash in spring 2017. The cash proportion will
cover taxes and tax-related costs arising from the reward to a key employee. The
maximum amount of this plan originally corresponded to 160,000 shares. No reward
will be paid if a key employee's employment or service ends before the reward
payment date. In 2015 EUR 0.3 million and in 2014 EUR 0.2 million was expensed
for the plan. On December 31, 2015 the maximum amount corresponds to 115,200
shares and it is depending on the number of entitled persons in the company at
the end of vesting period.
On December 18, 2014 the Board of Directors resolved for the Group key employees
a share-based incentive plan that was based on the development of Group's
profitability in calendar year 2015 and it will be paid partly in the Company's
series A shares and partly in cash in spring 2018. The cash proportion will
cover taxes and tax-related costs arising from the reward to a key employee. The
maximum amount of this plan originally corresponded to 160,000 shares. No reward
will be paid, if a key employee's employment or service ends before the reward
payment date. In 2015 EUR 0.5 million was expensed for the plan. On December
31, 2015 the maximum amount corresponds to 143,000 shares and it is depending on
the number of entitled persons in the company at the end of vesting period.
On December 16, 2015 Vaisala's Board of Directors resolved for the Group key
employees a share-based incentive plan that is based on the development of
Group's profitability in calendar year 2016 and it will be paid partly in the
Company's series A shares and partly in cash in spring 2019. The cash proportion
will cover taxes and tax-related costs arising from the reward to a key
employee. No reward will be paid if a key employee's employment or service ends
before the reward payment date. Maximum amount corresponding to 200,000 shares
will be paid depending on the number of entitled persons at the end of vesting
period.
The total personnel expenses in 2015 were EUR 130.0 (116.3) million.
Vaisala's long-term financial targets for 2014-2018 and strategy
Vaisala's long-term financial targets
Growth: Vaisala targets an average annual growth of 5%. In selected growth
businesses such as renewable energy, life science and power transmission the
target is to exceed 10% annual growth.
Profitability: Vaisala's objective is profitable growth and the target is to
achieve 15% operating profit (EBIT) margin towards the end of the year 2018.
Vaisala does not consider the long-term financial targets as market guidance for
any given year.
Vaisala's strategy
Vaisala's goal of profitable growth will be achieved through the implementation
of the strategic themes: creation of customer value, reliability, and
simplification.
Additional customer value will be created in Weather Business Area by building
new business around decision support services that are offered to renewable
energy, aviation and roads customers. Controlled Environment Business Area will
focus on enhancing offering and developing the sales channel for life science
and industrial customers in order to create value for customers' operations.
Reliability will create customer satisfaction and loyalty. High quality of
products and services, well-functioning customer service and on-time actions
will deliver reliable customer experience.
Simplification will create operational efficiency. Optimized global networks,
streamlined supply chains, common capabilities and continual improvement in all
functions will ensure increased efficiency of Vaisala's operations.
Implementation of the strategy in 2015
In 2015, Vaisala continued the investments in strategic growth areas in Weather
and Controlled Environment Business Areas.
Weather Business Area
Weather Business Area continued its efforts to create customer value by building
new business around information services that are offered to renewable energy,
aviation and roads customers. Several new advanced products and software were
launched to enhance growth as well as to replace existing products. Key launches
included Observation Network Manager NM10, IRIS Focus and Thunderstorm Manager.
Vaisala continued its efforts to drive growth in renewable energy business,
however, the sales performance did not yet meet expectations. The renewable
energy market continued to be vibrant and growing, but market entry took longer
than anticipated due to long authorization and approval processes, evolving
business models and customers' postponed decision making. Nevertheless, Energy
business unit continued to invest in building new offering for renewable energy
customers and gaining industry acceptance of the existing product portfolio. A
good example of building new offering was the launch of Nomad 3, a flexible and
portable data management device, which enables wind energy developers and
operators to operate more efficiently.
Controlled Environment Business Area
Controlled Environment Business Area's product leadership strategy provided a
strong growth platform during 2015. Controlled Environment Business Area
continued to grow through industrial measurement solutions in various industries
across all regions.
Controlled Environment Business Area continued investing in its growth markets,
Life Science and Power Transmission. Continuous monitoring systems offered to
Life Science and other industrial customers had double digit growth with
improving profitability which is already contributing to Controlled Environment
Business Area's operating profit even though investment phase still continues.
Vaisala enhanced its offering for Power Transmission customers by launching
MHT410 for high voltage transformers. The Vaisala Moisture, Hydrogen and
Temperature transmitter MHT410 was launched to the market in July. Other key
launches include new products to the Vaisala Carbon Dioxide, Humidity and
Temperature Transmitter Series GMW80 integrating the new generation CARBOCAP®
sensor.
Regional expansion continued by contracting new distributors in countries with
high industrial potential. This had a positive impact on distributor sales,
which achieved double digit growth.
More information of the product and software launches can be found on page 9.
Quality and operational excellence
In 2015, Vaisala continued to systematically improve quality of products and
services with focus on customer satisfaction. This was achieved through enhanced
quality of product design and quality control of material flow. Quality training
was also continued to further improve competence of Vaisala's employees.
Vaisala continued its efforts in on-time delivery accuracy and reduction of lead
times throughout a variety of products, projects and services. Delivery times
are especially important for Vaisala's industrial customers. Good progress in
on-time delivery was achieved by utilizing Lean method of daily management and
as a result of improved material availability. Lead-time reductions were
achieved by optimizing order-to-delivery flow for selected products. Vaisala
also continued to consolidate its' supplier base and built stronger
relationships with preferred suppliers.
ERP upgrade implemented in January 2015 enabled further development of globally
harmonized processes, enhancements of management reporting and centralization of
accounting services. Customer service portal was developed and implemented in
order to create a platform for Customers Self Service Solutions with a single
sign-on capability.
In order to strengthen the capability to implement its strategy and to increase
agility, Vaisala restructured its business in 2015. More detailed information
about the new business structure can be found below.
New business structure and completion of co-operation negotiations
Vaisala announced on January 27, 2015 its plans to restructure its business in
order to strengthen the capability to implement its strategy and to increase
agility. As of April 1, 2015, Weather Business Area was organized into three
business units, Meteorology Infrastructure, Transportation and Energy, and
Controlled Environment Business Area was organized into three regions with full
business responsibility, Americas, EMEA and APAC.
In order to foster the business areas to operate with different business models
Service function was integrated into Weather and Controlled Environment Business
Areas. In the new structure Information Services and Field Services are part of
the Weather Business Area, whereas Calibration and Repair Services are part of
the Controlled Environment Business Area. Vaisala's Operations and Support units
continue to serve as group functions.
Vaisala continues to invest in its growth businesses and to develop products and
services which combine its customers' business expertise and Vaisala's
technological leadership. The new organizational structure strengthens customer
focus across all functions and ensures operational efficiency through
simplification.
The planning of restructuring was finalized and in Finland the related co-
operation negotiations, which were initiated on February 2, 2015, were completed
on March 5, 2015. As a result, Vaisala reduced its workforce by a total of 52
positions, out of which 18 positions were reduced in Finland. The original
estimate for the reduction was 60 full-time equivalents, out of which about 25
were estimated to be in Finland. The reduction took place through redundancies,
retirement options and terminations of temporary contracts. Vaisala provided a
range of support measures for those affected by the restructuring.
This restructuring is estimated to result in annual cost savings of EUR 4
million by 2016. The cost savings for 2015 were EUR 2 million. The first quarter
2015 operating result includes EUR 1.8 million accrual for one-time costs.
Changes in Vaisala's Management Group
Hannu Katajamäki, Executive Vice President, Services and member of Vaisala's
Management Group since 2011 left Vaisala on April 1, 2015. The change followed
Vaisala's business restructuring where the Service function was integrated into
Weather and Controlled Environment Business Areas.
Kai Konola, Executive Vice President, Weather Business Area and member of
Vaisala's Management Group since 2010 left Vaisala on December 15, 2015.
Jarkko Sairanen was appointed Executive Vice President of Vaisala Weather
Business Area on November 26, 2015. Jarkko Sairanen started at Vaisala on
February 1, 2016. Head of Weather Offering, Ilkka Mannonen acted as interim EVP
Weather Business Area December 15, 2015-January 31, 2016.
On December 31, 2015 Vaisala's Management Group members were:
* Kjell Forsén, President and CEO, Chairman of the Management Group
* Marja Happonen, Executive Vice President, Human Resources
* Sampsa Lahtinen, Executive Vice President, Controlled Environment Business
Area
* Ilkka Mannonen, Head of Weather Offering, interim Executive Vice President,
Weather Business Area
* Kaarina Muurinen, Chief Financial Officer
* Vesa Pylvänäinen, Executive Vice President, Operations
Sustainability
Vaisala is in a unique position to promote sustainable development through the
technologies it offers to its customers. Through its weather solutions, Vaisala
safeguards lives and property and reduces environmental impacts. Industrial
instruments bring efficiencies and reduce energy and material consumption in
customers' operations.
Vaisala pays special attention to the objectives of UN Global Compact in the
areas of human and labor rights, the environment and anti-corruption. In 2015,
Vaisala strengthened its support toward a stronger climate agenda by joining
Caring for Climate, an initiative under UN Global Compact, and Climate
Leadership Council, a Finnish initiative for leading sustainable companies. In
September 8, 2015, Vaisala made a public commitment to become powered by 100%
renewable energy by 2020.
Vaisala was awarded a position on CDP's (formerly the Carbon Disclosure Project)
Nordic Climate Disclosure Leadership Index for the second year in a row. The
performance score assesses the level of action on climate change mitigation,
adaptation and transparency. Vaisala is assessed under Information technology
sector, which is widely understood to be one of the fundamental driving forces
of change in the business and consumer societies. Vaisala is addressing
operational productivity targets and evolving regulations, like energy
efficiency requirements through its product offering and development.
Further information about Vaisala's sustainability is available on the company
website at www.vaisala.com/sustainability.
Near-term risks and uncertainties
Uncertainties in world economic and political situation as well as changes in
customer behavior may cause demand slowdown or delays in customer projects.
Especially market situation in China and continuing conflicts in Middle East and
Africa may cause interruptions in business. Also increasing competition, changes
in price levels and exchange rates may impact Vaisala's net sales and
profitability.
Vaisala's capability to successfully complete investments, acquisitions,
divestments and restructurings on a timely basis and to achieve related
financial and operational targets represent a risk which may impact net sales
and profitability.
The ongoing business expansion in renewable energy market may be delayed due to
long authorization and approval processes, evolving business models and
customers' postponing decision making. Delays in new product ramp-ups and market
acceptance of new offering may postpone the realization of Vaisala's growth
plans.
Suppliers' and subcontractors' delivery capability or operating environment as
well as product quality may impact Vaisala's net sales and profitability. Also
uncertainty of Finnish labor market may cause interruptions in operations. Cyber
risk and availability of IT systems may impact operations, delivery of
information services or Internet-based services or cause financial loss.
Further information about risk management and risks are available on the company
website at www.vaisala.com/investors, Corporate Governance and
www.vaisala.com/investors, Vaisala as an Investment.
Decisions by Vaisala Corporation's Annual General Meeting
Vaisala Corporation's Annual General Meeting was held on March 31, 2015 in
Vantaa, Finland. The meeting approved the financial statements and discharged
the members of the Board of Directors and the President and CEO from liability
for the financial period January 1-December 31, 2014.
Dividend
The Annual General Meeting decided a dividend of EUR 0.90 per share,
corresponding to the total of EUR 16,368,132.60. The record date for the
dividend payment was April 2, 2015 and the payment date was April 14, 2015.
Board of Directors
The Annual General Meeting confirmed that the number of Board members is seven.
Petra Lundström, Mikko Niinivaara, Yrjö Neuvo, Maija Torkko, Pertti Torstila and
Raimo Voipio continued as members of the Board of Directors. Ville Voipio was
elected as a new member of the Board of Directors.
The Annual General Meeting decided that the annual fee payable to the Chairman
of the Board of Directors is EUR 45,000 and EUR 35,000 for each Board member.
Approximately 40 percent of the annual remuneration was paid in Vaisala
Corporation's A shares acquired directly in the name of the Board members from
the market and the rest in cash. In addition, the Annual General Meeting decided
that the compensation for the Chairman of the Audit Committee is EUR 1,500 per
attended meeting and EUR 1,000 for each member of the Audit Committee. The
compensation for the Chairman and each member of the Remuneration and HR
Committee and any other committee established by the Board of Directors is EUR
1,000 per attended meeting.
Auditor
The Annual General Meeting re-elected Deloitte & Touche Oy as the auditor of the
Company and APA Merja Itäniemi will act as the auditor with the principal
responsibility. The Auditors are reimbursed according to their reasonable
invoice presented to the company.
Authorization for directed acquisition of own A shares
The Annual General Meeting authorized the Board of Directors to decide on the
directed repurchase of a maximum of 160,000 of the Company's own A shares in one
or more instalments with funds belonging to the Company's unrestricted equity.
The authorization is valid until the closing of the next Annual General Meeting,
however, no longer than September 30, 2016.
Authorization to transfer Company's own shares
The Annual General Meeting authorized the Board of Directors to decide on the
issuance of the Company's treasury A shares. The authorization is limited to a
maximum of 319,150 shares. The issuance of own shares may be carried out in
deviation from the shareholders' pre-emptive rights (directed issue). The
authorization entitles the issuance of treasury A shares as a directed issue
without payment as part of the Company's share based incentive plan. The Board
of Directors can also use this authorization to grant special rights entitling
subscription of the Company's own shares that are held by the Company. The
subscription price of the shares can instead of cash also be paid in full or in
part as contribution in kind. The authorization is valid until March 31, 2020.
Donations
The Annual General Meeting authorized the Board of Directors to decide on
donations of maximum EUR 250,000.
The organizing meeting of the Board of Directors
At its organizing meeting held after the Annual General Meeting the Board
elected Raimo Voipio to continue as the Chairman of the Board of Directors and
Yrjö Neuvo to continue as the Vice Chairman.
The composition of the Board committees was decided to be as follows:
Audit Committee
Maija Torkko was elected as the Chairman and Petra Lundström and Mikko
Niinivaara as members of the Audit Committee. The Chairman and all members of
the Audit Committee are independent both of the Company and of significant
shareholders.
Remuneration and HR Committee
Raimo Voipio was elected as the Chairman and Yrjö Neuvo and Maija Torkko as
members of the Remuneration and HR Committee. Raimo Voipio is independent of the
Company. Yrjö Neuvo and Maija Torkko are independent both of the Company and of
significant shareholders.
Vaisala's shares and shareholders
Vaisala's share capital totaled EUR 7,660,808 on December 31, 2015. On December
31, 2015, Vaisala had 18,218,364 shares, of which 3,389,351 are series K shares
and 14,829,013 are series A shares. The K shares and A shares are differentiated
by the fact that each K share entitles its owner to 20 votes at a General
Meeting of Shareholders while each A share entitles its owner to 1 vote. The A
shares represent 81.4% of the total number of shares and 17.9% of the total
votes. The K shares represent 18.6% of the total number of shares and 82.1% of
the total votes.
Trading in shares on the Nasdaq Helsinki Ltd
In 2015, a total of 2,507,672 (1,110,337) Vaisala shares with a value totaling
EUR 60.9 (25.1) million were traded on the Nasdaq Helsinki Ltd.
The closing price of the Vaisala Corporation share on the Nasdaq Helsinki Ltd
stock exchange in 2015 was EUR 23.94 (21.89). Vaisala's share price increased by
9% (declined 6%) during the year while OMX Helsinki Cap index increased by 11%
(6%). Shares registered a high of EUR 27.02 (24.98) and a low of EUR 21.55
(19.40). The volume-weighted average share price was EUR 24.33 (22.60).
The market value of Vaisala's A shares on December 31, 2015 was EUR 350.4
(321.1) million, excluding the Company's treasury shares. Valuing the K shares -
which are not traded on the stock market - at the rate of the A share's closing
price on the last day of December, the total market value of all the A and K
shares together was EUR 431.6 (395.3) million, excluding the Company's treasury
shares.
At the end of December, 2015 Vaisala Corporation had 7,294 (7,302) registered
shareholders. Ownership outside of Finland and nominee registrations represented
14.8% (16.3%) of the company's shares. Households owned 44.8% (45.7%), private
companies 14.0% (13.5%), financial and insurance institutions 12.3% (11.7%),
non-profit organizations 7.9% (8.2%) and public sector organizations owned 6.1%
(4.6%).
Vaisala Corporation's Board of Directors held and controlled 522,427 A shares on
December 31, 2015 and 293,656 K shares. The Board of Directors' A and K shares
accounted for 7.8% (14.0%) of the total votes.
The company's President and CEO held and controlled 10,720 (2,720) A shares and
no K shares on December 31, 2015. Other Management Group members held and
controlled 13,463 (2,463) Vaisala A shares and no K shares.
The Board of Directors of Vaisala Corporation decided on March 10, 2015 issuance
of directed shares without consideration. In the issuance of shares a total of
63,800 Company's series A treasury shares were transferred without consideration
to Company's key employees according to the terms and conditions of the
Performance Share Plan 2012.
Treasury shares and their authorizations
The Annual General Meeting held on March 26, 2014 authorized the Board of
Directors to decide on the transfer of a maximum of 319,150 own A-shares. The
transfer of own shares may be carried out in deviation from the shareholders'
pre-emptive rights and may be transferred as a directed issue without payment as
part of the Company's share based incentive plan. The authorization can also be
used to grant special rights entitling subscription of own shares, and the
subscription price of the shares can instead of cash also be paid in full or in
part as contribution in kind. The new authorization replaces the previous one
and is valid until March 26, 2019.
The Board of Directors of Vaisala Corporation decided on March 10, 2015 to use
the authorization granted for transferring the Company's series A treasury
shares. Vaisala Corporation sold a total of 63,800 series A treasury shares held
by the Company in order to cover the cash reward of the Performance Share Plan
2012. The cash reward was used to cover withholding tax and other similar costs.
The sale of the Company's treasury shares commenced on March 11, 2015 and were
concluded on the same day.
The Board of Directors of Vaisala Corporation decided on March 10, 2015 to use
the authorization granted for issuance of treasury A shares as a directed issue
without payment as part of the Company's share based incentive plan. In the
issuance of shares a total of 63,800 Company's series A treasury shares were
transferred without consideration to Company's key employees according to the
terms and conditions of the Performance Share Plan 2012.
The Annual General Meeting held on March 31, 2015 authorized the Board of
Directors to decide on the issuance of the Company's treasury A shares. The
authorization is limited to a maximum of 319,150 shares. The issuance of own
shares may be carried out in deviation from the shareholders' pre-emptive rights
(directed issue). The authorization entitles the issuance of treasury A shares
as a directed issue without payment as part of the Company's share based
incentive plan. The Board of Directors can also use this authorization to grant
special rights entitling subscription of the Company's own shares that are held
by the Company. The subscription price of the shares can instead of cash also be
paid in full or in part as contribution in kind. The authorization is valid
until March 31, 2020.
The Board of Directors of Vaisala Corporation did not use the authorization in
2015.
The Annual General Meeting on March 31, 2015 authorized the Board of Directors
to decide on the directed repurchase of a maximum of 160,000 of the Company's
own A-shares in one or more instalments with funds belonging to the Company's
unrestricted equity. The authorization is valid until the closing of the next
Annual General Meeting, however, no longer than September 30, 2016.
Vaisala Corporation's Board of Directors decided on April 28, 2015 to use the
authorization granted for directed repurchase of shares. The Board of Directors
resolved of directed repurchase of a maximum of 160,000 of the Company's own A
shares in one or more instalments with funds belonging to the Company's
unrestricted equity. Vaisala acquired through public trading in accordance with
the rules of on the Nasdaq Helsinki Ltd. during the time period April 30-
November 19, 2015 a total of 160,000 Company's own shares at an average price
per share of EUR 24.1771. The total value of the acquired shares was EUR
3,868,334.28.
At the end of December, the Company held a total of 191,550 (159,150) Vaisala A
shares, which represented 1.3% (1.1%) of all A-shares in the Company and 1.1%
(0.9%) of all shares in the Company. The consideration paid for these shares was
EUR 4,344,256 (2,527,160).
More information about Vaisala's share and shareholders are presented on the
website, www.vaisala.com/investors.
Donations
The Annual General Meeting authorized the Board of Directors to decide on
donations of maximum EUR 250,000.
Vaisala Corporation's Board of Directors did not use the authorization in 2015.
Events after the review period
As announced on February 2, 2016, Vaisala signed a EUR 20 million contract with
National Hydro-Meteorological Service of Vietnam. The contract, that has been
prepared over the past four years together with National Hydro-Meteorological
Service, will come in force when the customer has given final approval for the
technical design. Vaisala will report the contract in the order book after this
approval. The deliveries will start after the contract has entered into force,
and are scheduled to be completed within two years. The funding of the contract
is arranged through the Finnish Concessional Credit instrument provided to
National Hydro-Meteorological Service of Vietnam. This instrument is part of
Finland's development cooperation portfolio, governed by the Ministry for
Foreign Affairs of Finland.
Vaisala's Board of Directors decided on February 10, 2016 on Vaisala's dividend
policy. According to the policy, Vaisala aims to pay a stable dividend which
will increase in line with net profit development. Vaisala's goal is to maintain
high solvency and to take future investment plans into account. Vaisala will
apply this dividend policy for the first time to the dividend distributed in
2016.
Market outlook 2016
Even though global economy has recently slightly decelerated, the latest
forecasts still predict moderate development for 2016 and Vaisala is expecting
stable weather observation and industrial measurement market conditions.
However, differences in business conditions between customer groups and regions
are expected to remain.
In weather observation market especially weather radars have favorable market
outlook, and also demand from renewable energy industry is expected to increase.
Heavy decline in commodity prices, especially in crude oil and natural gas, is
affecting market conditions in offshore business and commodity exporting
economies. Competition in weather observation market is expected to continue
intensifying. In weather observation market it continues to be challenging to
forecast customers' timing for decision making and acceptance of larger customer
projects, having potentially material impact on overall Vaisala weather
business.
In industrial measurement market especially power transmission and life science
are expected to grow faster than other targeted markets.
In EMEA demand for weather observation solutions is expected to remain stable.
Demand from Russia and its neighboring countries is still expected to be
constrained by economic weakness in the area. Demand for industrial measurement
solutions is expected to remain solid.
In Americas demand for weather observation and industrial measurement solutions
is expected to remain stable.
In APAC weather observation market is expected to cool off slightly compared to
active year 2015, as a result of lower demand from China. Demand for industrial
measurement solutions is expected to remain good in Japan, but elsewhere in APAC
uncertainty has increased due to deceleration of Chinese manufacturing industry.
Business outlook for 2016
Vaisala estimates its full year 2016 net sales to be in the range of EUR
305-335 million and the operating result (EBIT) excluding non-recurring items in
the range of EUR 28-38 million.
Board of Directors' proposal for distribution of earnings
The parent company's distributable earnings amount to EUR 157,847,008.00, of
which the net result for the period is EUR 30,930,974.30.
The Board of Directors proposes to the Annual General Meeting that dividend of
EUR 0.95 per share be paid out of distributable earnings totaling approximately
EUR 17.1 million and the rest to be carried forward in the shareholders' equity.
No dividend will be paid for treasury shares held by the company.
There have been no significant changes to the company's financial position since
the close of the financial period. According to the Board of Directors, the
proposed dividend distribution does not endanger the company's financial
standing.
Financial statements 2015 publication
Vaisala will publish a Financial Statements 2015 publication. This report will
be available in English and Finnish and can be downloaded as a pdf file and
ordered as a printed copy at www.vaisala.com the week starting March 7, 2016.
Annual General Meeting 2016
Vaisala's Annual General Meeting will be held on Tuesday, April 5, 2016 at 6
p.m. at Vaisala Corporation's head office, Vanha Nurmijärventie 21, 01670
Vantaa.
Vantaa, February 10, 2016
Vaisala Corporation
Board of Directors
The forward-looking statements in this release are based on the current
expectations, known factors, decisions and plans of Vaisala's management.
Although the management believes that the expectations reflected in these
forward-looking statements are reasonable, there is no assurance that these
expectations would prove to be correct. Therefore, the results could differ
materially from those implied in the forward-looking statements, due to for
example changes in the economic, market and competitive environments, regulatory
or other government-related changes, or shifts in exchange rates.
Financial information and changes in accounting policies
The financial statements have been prepared in accordance with the IAS 34
following the same accounting principles as in the annual financial statements.
The whole year numbers presented in the financial report have been audited. All
figures in the report are Group figures. All presented figures have been rounded
and consequently the sum of individual figures may deviate from the sum
presented.
The preparation of the financial statements in accordance with IFRS requires
Vaisala's management to make estimates and assumptions that affect the valuation
of the reported assets and liabilities and the recognition of income and
expenses in the statement of income. Although the estimates are based on the
management's best knowledge at the date of this report, actual results may
differ from the estimates.
In order to align Vaisala's business type reporting with the new organization
structure, the net sales of spare parts and systems are reported under Products
business starting from January 1, 2015. Previously spare parts were reported
under Services business and systems under Projects business. 2014 numbers have
been adjusted retrospectively.
Consolidated Statement of Income
EUR million 10-12/2015 10-12/2014 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Net sales 101.1 95.7 318.5 299.7
Costs of sales -46.4 -45.5 -155.6 -146.6
-------------------------------------------------------------------------------
Gross profit 54.7 50.2 162.8 153.1
Sales, marketing and
administrative costs -25.4 -26.1 -95.8 -93.2
Research and development costs -10.3 -9.4 -36.1 -34.0
Other operating income and expense 0.1 0.1 -1.3 0.5
-------------------------------------------------------------------------------
Operating profit (loss) 19.1 14.9 29.6 26.4
Share of result in associated
companies -0.1 0.1 -0.1 0.1
Financial income and expenses, net 1.2 0.6 3.5 2.6
-------------------------------------------------------------------------------
Profit (loss) before taxes 20.2 15.7 33.0 29.1
Income taxes -2.5 -2.5 -5.5 -5.7
-------------------------------------------------------------------------------
Profit (loss) for the period 17.7 13.1 27.5 23.4
Earnings per share, EUR 0.98 0.73 1.52 1.30
Diluted earnings per share, EUR 0.97 0.72 1.51 1.29
-------------------------------------------------------------------------------
Consolidated Statement of Comprehensive Income
EUR million 10-12/2015 10-12/2014 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Items that will not be reclassified
to
profit or loss
-------------------------------------------------------------------------------
Actuarial profit (loss) loss on
post-
employment benefits 0.4 -0.5 0.4 -0.5
-------------------------------------------------------------------------------
Total 0.4 -0.5 0.4 -0.5
-------------------------------------------------------------------------------
Items that may be reclassified
subsequently to profit or loss
-------------------------------------------------------------------------------
Currency translation differences 0.5 0.9 3.1 3.5
-------------------------------------------------------------------------------
Total 0.5 0.9 3.1 3.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total other comprehensive income 0.9 0.5 3.5 3.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total comprehensive income 18.6 13.6 31.0 26.4
-------------------------------------------------------------------------------
Consolidated Statement of Financial Position
EUR million
------------------------------------------------------------------------------
Assets December 31, 2015 December 31, 2014
------------------------------------------------------------------------------
Non-current assets
Intangible assets 34.0 37.1
Property, plant and equipment 44.1 44.2
Investments 0.1 0.1
Investment in associated companies 0.8 0.8
Long-term receivables 0.8 0.3
Deferred tax assets 10.2 8.9
------------------------------------------------------------------------------
Total non-current assets 90.0 91.5
Current assets
Inventories 39.0 33.9
Trade and other receivables 74.6 70.5
Income tax receivables 1.2 1.1
Cash and cash equivalents 59.2 47.6
------------------------------------------------------------------------------
Total current assets 174.0 153.1
------------------------------------------------------------------------------
Total assets 264.0 244.6
------------------------------------------------------------------------------
Shareholders' equity and liabilities December 31, 2015 December 31, 2014
------------------------------------------------------------------------------
Shareholders' equity
Share capital 7.7 7.7
Other reserves 1.1 2.5
Cumulative translation adjustment 2.9 -0.2
Treasury shares -4.3 -2.5
Retained earnings 173.9 162.6
------------------------------------------------------------------------------
Total shareholders' equity 181.3 170.0
Non-current liabilities
Interest-bearing liabilities 0.0 0.0
Post-employment benefit obligations 2.1 1.3
Deferred tax liabilities 4.5 5.3
Provisions for other liabilities and
charges 0.2 0.2
Other long-term liabilities 0.8 2.9
------------------------------------------------------------------------------
Total non-current liabilities 7.6 9.7
Current liabilities
Interest-bearing liabilities 0.0 0.0
Advances received 3.9 3.9
Income tax liabilities 1.7 1.5
Provisions for other liabilities and
charges 0.4 1.4
Trade and other payables 69.2 58.1
------------------------------------------------------------------------------
Total current liabilities 75.1 64.9
------------------------------------------------------------------------------
Total shareholders' equity and
liabilities 264.0 244.6
------------------------------------------------------------------------------
Consolidated Statement of Changes in Shareholders' Equity
Share Other Treasury Translation Retained
EUR million capital reserves shares adjustment earnings Total
-------------------------------------------------------------------------------
Balance at Jan 1, 2014 7.7 1.5 -2.5 -3.6 155.9 158.9
Profit (loss) for the
period 23.4 23.4
Other comprehensive
income 0.0 3.5 -0.5 3.0
Dividend paid -16.3 -16.3
Reclassification -0.0 0.0 0.0
Correction 0.0 0.0
Share-based payment 1.0 1.0
-------------------------------------------------------------------------------
Balance at Dec 31, 2014 7.7 2.5 -2.5 -0.2 162.6 170.0
-------------------------------------------------------------------------------
Share Other Treasury Translation Retained
EUR million capital reserves shares adjustment earnings Total
-------------------------------------------------------------------------------
Balance at Jan 1, 2015 7.7 2.5 -2.5 -0.2 162.6 170.0
Profit (loss) for the
period 27.5 27.5
Other comprehensive
income 0.0 3.1 0.4 3.5
Dividend paid -16.4 -16.4
Reclassification -0.0 0.0 0.0
Purchase of treasury
shares -3.9 -3.9
Sale of treasury shares 2.1 -2.1 0.0
Share-based payment -1.4 1.9 0.5
-------------------------------------------------------------------------------
Balance at Dec 31, 2015 7.7 1.1 -4.3 2.9 173.9 181.3
-------------------------------------------------------------------------------
Consolidated Cash Flow Statement
EUR million 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Cash flows from operating activities
Cash receipts from customers 325.4 287.0
Other income from business operations -1.4 0.4
Cash paid to suppliers and employees -277.1 -260.3
Financials paid, net -1.0 1.3
Income taxes paid, net -7.2 -4.5
-------------------------------------------------------------------------------
Cash flow from operating activities 38.8 23.8
Cash flows from investing activities
Capital expenditure on fixed assets -8.3 -7.9
Divestments 0.2 1.3
-------------------------------------------------------------------------------
Cash flow from investing activities -8.1 -6.6
Cash flows from financing activities
Dividends paid -16.4 -16.2
Purchase of treasury shares -3.9 -
Change in loan receivables 0.0 -0.1
Change in leasing liabilities 0.0 0.0
-------------------------------------------------------------------------------
Cash flow from financing activities -20.2 -16.3
Cash and cash equivalents at the beginning of period 47.6 45.8
Net increase (+) / decrease (-) in cash and cash
equivalents 10.5 0.9
Effect from changes in exchange rates 1.0 0.9
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of period 59.2 47.6
-------------------------------------------------------------------------------
Notes for Report
Orders Received by Business Area
EUR million 10-12/2015 10-12/2014 1-12/2015 1-12/2014
---------------------------------------------------------------------
Weather 66.7 65.4 224.0 215.2
Controlled Environment 24.0 21.7 94.5 79.8
---------------------------------------------------------------------
Total 90.7 87.1 318.5 295.0
---------------------------------------------------------------------
Net Sales by Business Area
EUR million 10-12/2015 10-12/2014 1-12/2015 1-12/2014
---------------------------------------------------------------------
Weather
Products 41.3 35.9 116.2 108.1
Projects 23.1 26.6 71.0 74.7
Services 12.2 10.9 38.3 36.7
---------------------------------------------------------------------
Total 76.6 73.3 225.5 219.6
Controlled Environment
Products 22.2 20.0 83.5 71.9
Services 2.3 2.4 9.5 8.3
---------------------------------------------------------------------
Total 24.5 22.3 93.0 80.2
Sales, Other 0.0 0.0 0.0 0.0
---------------------------------------------------------------------
Total Sales 101.1 95.7 318.5 299.7
---------------------------------------------------------------------
Operating Result by Business Area
EUR million 10-12/2015 10-12/2014 1-12/2015 1-12/2014
---------------------------------------------------------------------
Weather 15.1 12.7 15.2 17.0
Controlled Environment 4.9 3.9 18.3 12.1
Other -0.9 -1.7 -4.0 -2.8
---------------------------------------------------------------------
Total 19.1 14.9 29.6 26.4
---------------------------------------------------------------------
Net Sales by Geographical Area
EUR million 10-12/2015 10-12/2014 1-12/2015 1-12/2014
---------------------------------------------------------------------
EMEA 33.8 35.8 105.1 111.8
Americas 42.3 36.2 132.0 112.1
APAC 25.0 23.7 81.3 75.9
---------------------------------------------------------------------
Total 101.1 95.7 318.5 299.7
---------------------------------------------------------------------
Personnel
10-12/2015 10-12/2014 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Average personnel 1,594 1,614 1,611 1,617
Personnel at the end of period 1,588 1,613 1,588 1,613
-------------------------------------------------------------------------------
Financial Instruments
10-12/2015 10-12/2014 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Nominal value of financial
derivatives,
EUR million 36.5 20.0 36.5 20.0
Fair values of financial
derivatives, assets,
EUR million 0.1 0.0 0.1 0.0
Fair values of financial
derivatives,
liabilities, EUR million 0.8 1.4 0.8 1.4
-------------------------------------------------------------------------------
Financial derivatives consist solely of foreign currency forwards and they are
measured based on price information derived from active markets and commonly
used valuation methods (Fair value hierarchy 2). Financial contracts are
executed only with counterparties that have high credit ratings.
Share Information
10-12/2015 10-12/2014 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Number of shares outstanding,
thousand 18,027 18,059 18,027 18,059
Number of treasury shares, thousand 192 159 192 159
Number of shares, diluted, thousand 18,199 18,234 18,259 18,234
Number of shares, weighted average,
thousand 18,043 18,059 18,103 18,059
Number of shares traded, thousand 703 359 2,508 1,110
Share price, highest, EUR 26.95 22.50 27.02 24.98
Share price, lowest, EUR 22.81 19.40 21.55 19.40
-------------------------------------------------------------------------------
Key Ratios
10-12/2015 10-12/2014 1-12/2015 1-12/2014
-------------------------------------------------------------------------------
Earnings per share, EUR 0.98 0.73 1.52 1.30
Earnings per share, diluted, EUR 0.97 0.72 1.51 1.29
Equity per share, EUR 10.06 9.41 10.06 9.41
Return on equity, % 15.7 14.3
Cash flow from operating activities
per share,
EUR 1.61 0.83 2.15 1.32
Solvency ratio, % 69.7 70.6 69.7 70.6
-------------------------------------------------------------------------------
Further information
Kaarina Muurinen, CFO
Mobile +358 40 577 5066
Vaisala Corporation
Briefing and Audiocast
Briefing for analysts and media will be arranged in Hotel Kämp, Paavo Nurmi
meeting room, Pohjoisesplanadi 29, Helsinki starting at 4 p.m. today (Finnish
time). The presentation of Kjell Forsén, President and CEO, at the briefing will
be audiocast live at www.vaisala.com/investors starting at 4 p.m. A recording of
the audiocast will be published at the same address at 6 p.m.
Distribution
Nasdaq Helsinki
Key media
www.vaisala.com
Vaisala is a global leader in environmental and industrial measurement. Building
on 80 years of experience, Vaisala contributes to a better quality of life by
providing a comprehensive range of innovative observation and measurement
products and services for chosen weather-related and industrial markets.
Headquartered in Finland, Vaisala employs approximately 1,600 professionals
worldwide and is listed on the Nasdaq Helsinki stock exchange.
www.vaisala.com www.twitter.com/VaisalaGroup
[HUG#1985099]
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