CEO´s Message

INVESTING FOR GROWTH

In 2017 our net sales grew and profitability developed well providing a solid basis for continued strong investment in research and development. Innovation and technology leadership are cornerstones for Vaisala´s success and we keep advancing the art of environmental observations.

IMPLEMENTING OUR STRATEGY

In 2017 we expanded from weather observations to a broader addressable market by including air quality measurements as well. We are also implementing capacity building projects in the Bahamas and Vietnam to provide the necessary weather infrastructure and readiness in these areas where extreme weather events do occur.

In 2017, we also continued expanding our geographical reach by opening offices in Mexico City and Nairobi and investing in our distribution channels in Latin America, Asia-Pacific, and Europe. This has strengthened our promise to be closer to our customers.

We are continuously developing our operations in order to seize new opportunities. Our RunWay projects are a good example of this; with more flexible R&D processes mimicking agile start-up companies. They aim at simplifying and speeding up innovation and shortening the time to market for new products, making it easier to respond to changing needs on the market in an agile way.

The Vaisala Production System evolved further in 2017. We took steps to involve all our production employees in continuously improving our operations. We emphasized the importance of good workplace skills, and strived to harmonize our working methods. One of the outcomes was improved productivity in our manufacturing.

Moving forward, the combination of computer vision and artificial intelligence is one of the new technologies we are looking into. To increase our expertise, we acquired Vionice, a Finnish start-up, which specializes in computer vision and image processing. Their solution monitors the condition of roads with automated image sourcing and computer vision, with powerful artificial intelligence algorithms enabling pothole and crack detection, among other things.

MEGATRENDS PROVIDE US WITH OPPORTUNITIES

We are starting to see that increased awareness of climate change is bringing more business to Vaisala. We have been involved in extreme weather and hurricane research for a long time, but the recent weather-related catastrophes have raised awareness in many developing countries: they need to improve their meteorological forecasting capabilities. These countries are often vulnerable to weather, but do not have the infrastructure to track storms and warn their citizens of the approaching danger.

The construction of meteorological capabilities in Vietnam and the Bahamas addresses these real problems. To promote similar projects in Africa, we set up an office in Nairobi, Kenya. The local office, with permanent staff, will help us better understand the special needs of the area. Africa is, after all, one of the regions to suffer most from climate change.

Moreover, the megatrends of urbanization and health awareness have great potential for us. The air quality technology we acquired in 2016 was developed further and the first product was launched in 2017. The business is still in its infancy, but the market response has been very positive.

The air quality monitoring networks being set up in Helsinki and soon in Nanjing, China, are good examples of how we can help improve people’s lives by providing them and the authorities with local information about air pollutants in their living area, route to work, and workplace.

As a high-end provider Vaisala Industrial Measurements benefitted from higher demands for monitoring of process conditions, quality and energy saving. Higher expectations from consumers and demands from regulators open up new opportunities to us as well.

Investments into renewable energy solutions and power transmission monitoring are paying off. In 2017, we had two firsts.

Our Triton Wind Profiler was used for the first time in the optimization of wind farm operations, to get more power out of it. This opens a new market for us, as earlier, the product was primarily used in wind resource assessment and wind farm design.

The power transformer monitoring has a big potential for us. In 2017 we made the first commercial deliveries of equipment for online and real-time condition monitoring of power transformers to keep them operating safely and with maximum efficiency.

TAKING RISKS IS ESSENTIAL

Technological innovation is in our DNA, and we want and need to be at the cutting edge of development, to find new solutions to customer needs in demanding applications.

Taking risks and exploring new solutions is something we need to do, otherwise we could not call ourselves a true hi-tech company. To find new opportunities, we are scouting new business systematically, looking into measurement intensive growth industries that will benefit from megatrends. Circular economy is one approach that is providing us with new opportunities.

Megatrends support our business, we continue to invest in our own development, and we have world-class partners in our customers, suppliers, and research associates. All in all, our prospects for the future are bright.

Helsinki, February, 2018

Kjell Forsén
President and CEO