Market situation
Demand stopped increasing in early 2002 and has been unstable ever since in most divisions.
The demand for Vaisala's products is post-cyclical. As a result, when an upswing in the global economy begins, its effects are visible only after a delay. Positive signs have been received from Japan.
The sustained maintenance and development of competitiveness has enabled Vaisala to retain its market share, and the company's market position is still strong.
Net sales and order book
The Vaisala Group's net sales for the review period were EUR 38.3 million (1-3/2003: EUR 40.2 million). Operations outside Finland accounted for 96% (96%) of net sales. The Group received new orders worth EUR 41 (39) million during the review period. The order book at the end of the review period was EUR 60 (71) million.
Vaisala Soundings
The Vaisala Soundings division generated net sales of EUR 10.7 (12.4) million.
Vaisala Solutions
The Vaisala Solutions division generated net sales of EUR 9.6 (12.4) million.
Vaisala Remote Sensing
The Vaisala Remote Sensing division generated net sales of EUR 4.9 (4.4) million.
In January, Vaisala announced its new lightning detection system that combines the technologies acquired through two separate corporate acquisitions into one modular product family. The new product line reduces the amount of equipment to be maintained and improves product profitability.
Vaisala Instruments
The Vaisala Instruments division generated net sales of EUR 13.1 (11.0) million.
During the period under review, Vaisala decided to discontinue its ammonia measurement business.
Performance
Operating profit for the review period was EUR 1.9 (-0.1) million. Profit before extraordinary items was 4.2% of net sales, or EUR 1.6 (-0.5) million. Amortization of goodwill from acquisitions totaled EUR 0.9 (1.1) million.
The improved performance can be attributed to the measures taken in 2003 to improve operational efficiency. The US dollar continues to have an unfavorable effect on Vaisala.
Balance sheet
The Vaisala Group's solvency and liquidity remained strong. On March 31, 2004, the balance sheet total was EUR 159.6 (161.1) million. The Group's solvency ratio at the end of the review period was 84% (83%).
Research and development
Expenditure on research and development in the review period totaled EUR 5.4 (5.6) million, representing 14.1% of the Group's net sales.
Other events during the review period
The Annual General Meeting re-elected Board Members Yrjö Neuvo, Ph.D (EE), and Gerhard Wendt, Ph.D., who were to retire by rotation, for an additional three years. The Group's auditors are PricewaterhouseCoopers Oy, Authorized Public Accountants, and Jukka Ala-Mello APA.
Capital expenditure
Gross capital expenditure in non-current assets totaled EUR 1.1 (6.4) million during the review period.
Vaisala's shares
The price of Vaisala's A share on the Helsinki Exchanges was EUR 24.50 at the beginning, and EUR 20.50 at the end, of the review period. The highest share price quoted during the review period was EUR 24.50 and the lowest EUR 18.52.
Vaisala's share capital at the end of March was EUR 7,349,905.88 and the total number of shares was 17,479,000.
A total of 383,189 Vaisala shares were traded during the review period.
Personnel
The total number of employees in the Vaisala Group at the end of the review period was 1,100, compared with 1,152 at the end of the corresponding period in 2003. Some 21% (24%) of the personnel worked in research and development. Approximately 37% (36%) of the Group's personnel worked outside Finland.
Board of Directors and President & CEO
The members of the Board of Directors are Raimo Voipio M.Sc.(Eng.) (Chairman), Professor Pekka Hautojärvi, Professor Yrjö Neuvo, Executive Vice President, Mikko Niinivaara M.Sc.(Eng.), Mikko Voipio M.Sc.(Eng) and Gerhard Wendt Ph.D. The Group's President & CEO is Pekka Ketonen, D.Tech.(h.c.).
Outlook
The market outlook has not significantly changed. Net sales for 2004 are expected to be approximately at the same level as in the previous year and profit is expected to increase slightly.
Vaisala aims to be the global market leader in its selected business areas in the future. Therefore, investments in product development and competitiveness will continue to be substantial.
Vantaa, Finland, May 3, 2004
Vaisala Oyj
Board of Directors
The full report including tables can be downloaded from the following link.
