Solving Global Challenges Guides Us into the Future

In 2018, our net sales increased by 5% driven by good product deliveries. Net sales in Americas and APAC regions grew nicely, although weather related market in China was challenging. Operating result reached almost previous year’s level and was 11% of net sales.

An Increasingly Complex World

We live in a world in which we need to solve more and more challenging and complex problems. There are no easy solutions to these problems. Climate change, for example, is one of the most significant problems of our time. The most visible consequences of climate change include extreme weather conditions, which are increasingly common. Vaisala is investing heavily in promoting research on extreme weather. We also help the developing countries that are most prone to adverse weather effects to increase their meteorological capabilities, as they lack the infrastructure to detect storms and warn people. We are developing these capabilities in our long-term national projects in Vietnam and the Bahamas, for example.

In 2018, we introduced a next-generation dropsonde for extreme weather observation. Dropsondes provide measurement data that can be used to calculate the strength and structure of hurricanes and predict their routes and changes. Vaisala’s dropsondes continued to play a significant role in measuring hurricanes and predicting their routes in 2018.

Current global challenges also include air quality, which carries an even more significant role as a result of urbanization. Air quality business is still a relatively new area for Vaisala, but it developed favorably in 2018. We entered into commercial agreements in Sydney, Prague, Marseille, and Ukraine, for example, and we continued our research and development projects in Helsinki and Nanjing, and within the LuxTurrim consortium. Air quality solutions are part of increasingly common smart city projects. In this field, we have also successfully used computer vision technology to enhance the efficiency of road maintenance in cities and towns throughout the year. We signed new agreements in England and in Central and Northern Europe.

In industrial measurements, we have been able to solve more and more difficult challenges and have created value for our customers by improving their process efficiency. In medicine, for example, vaporized hydrogen peroxide is used in the biodecontamination process to clean packaging, equipment, and facilities in an environmentally friendly manner, and validating the process would be difficult without reliable measurement data. In 2018, we expanded our selection of hydrogen peroxide probes to meet demand. This was well received by the market, and sales met our expectations.

Vaisala also promotes circular economy, with our most recent effort being the launch of the new biogas solution in January 2019. It is an excellent example of a product that can produce reliable measurement data in a challenging, even explosive environment. We are extremely pleased to be able to create significant and unique added value for our customers in this way.

Significant Product Launches

Deliveries of the new Vaisala viewLinc Continuous Monitoring System began in May 2018. This unique wireless system offers superior reliability and has been received with enthusiasm among customers. In December 2018, viewLinc won also the Quality Innovation Award by
Laatukeskus Excellence Finland in the business innovation category for large companies, which is a further proof of the quality of the system.

In October 2018, we introduced our seventh generation of sensors for the measurement of visibility and present weather. The products in the Vaisala Forward Scatter FD70 series feature novel, innovative technology that sets new accuracy standards for precipitation identification, quantification and visibility determination. The same month, we also introduced the next-generation automatic sounding system Vaisala AUTOSONDE ® AS41, which reduces the costs of soundings and enables flexible remote soundings. The system makes it possible to carry out automatic soundings for one month at a time, which is twice as long as with the previous systems.

New Openings and Accelerated Growth Through Acquisitions

The acquisition of the French company Leosphere SAS in October 2018 was the largest business acquisition in Vaisala’s history. Leosphere supplies remote wind sensing LiDAR instruments for wind energy, aviation, meteorology, and air quality applications. Leosphere is the technology and market leader in its field, which offers excellent growth opportunities in the renewable energy, aviation, air quality, and meteorology sectors.

In December, we entered the significant liquid measurement market by acquiring the Finnish company K-Patents Oy, a pioneer in liquid measurements, and its research and development organization, Janesko Oy. This is a very attractive growth area for Vaisala, with the liquid measurement market being approximately the same size as Vaisala’s current gas measurement market. We will continue to invest in this business and are expecting the new market to contribute strongly to Vaisala’s growth in industrial measurements.

The Vaisala Production System (VPS) is one of the cornerstones of Vaisala’s success. Short delivery times and high delivery quality are essential aspects of our expertise that we can also transfer to the companies we have acquired.

Strong Investments in the Future

We are very confident about Vaisala’s future, and growth will also offer new opportunities for our employees. Our investments in research and development totaled EUR 45 million in 2018 (EUR 40 million in 2017).

In September, we broke ground on our new U.S. headquarters in Louisville, Colorado. We also began to build new research and development facilities in Vantaa, Finland at the end of 2018. The new building will rise next to our headquarters. Both buildings are expected to be completed in 2020.

Overall, 2018 was an eventful year for Vaisala, and I would like to express my warmest thanks to all of our employees for their commitment to our common goals  and for their flexibility. The atmosphere in Vaisala is positive and constructive: our community is characterized by curiosity and willingness to learn, which will  continue to be our recipe for success also in the future.

Kjell Forsén
President and CEO