Economic responsibility

Sound financial development and performance is the foundation of a sustainable company. For Vaisala, economic responsibility means creating added value to the company’s stakeholders, managing finances and resources prudently and efficiently, and securing long-term growth and financial stability.

Our ability to compete in a developing market strengthens our financial sustainability. As customer demand for environmentally sustainable products, energy efficiency, and increased measuring accuracy has risen, we have stepped up efforts to develop products and solutions with these attributes. Furthermore, the service and solutions business is becoming increasingly important for our stakeholders and we are continuously designing new and improved services for these customers.

Vaisala is listed on the NASDAQ OMX Helsinki on the Mid Cap list under IT, Electronic Equipment & Instruments sector.

Financial overview of 2008

Despite the challenges in the world economy, year 2008 was very rewarding for Vaisala. Focused development work and maintaining our competitiveness has helped the company to retain its strong market shares. However, Vaisala’s customers, especially in the weather businesses, are often publicly funded and thus may react to changes in the world economy in a slower and more moderate way than businesses more sensitive to economic fluctuations. Vaisala Group’s net sales increased by 8.2 percent on the comparison year and totaled EUR 242.5 million (EUR 224.1 in 2007, EUR 220.8 million in 2006). Operating profit for the financial year was EUR 38.0 million (35.3), or 15.7 percent of net sales. Profit before taxes was 16.0 percent of net sales, EUR 38.9 million, up by 5.1 percent. Net profit for the financial year was EUR 28.4 million (25.8), up by 10.0 percent from the previous year. Vaisala’s consolidated liquid assets totaled EUR 103.4 million (EUR, 99.2 in 2007, EUR 87.3 million in 2006). Gross capital expenditure totaled EUR 12.2 million (7.3 in 2007; 20.4 in 2006).

Growth was largest in the Asia-Pacific region where net sales increased by 27.8 percent on the previous year to EUR 76.9 million (60.2). Net sales in Europe increased by 5.0 percent to EUR 84.8 million (80.7 and in Africa, South and Central America by 39.0 percent to EUR 13.9 (10.0) million. Sales in North America declined by 8.6 percent to EUR 66.8 (73.2) million.

Cost-intensive development projects continued and this shows in the overall group results. The development of exchange rates also had a negative impact, especially the weakening of the US dollar by approximately 7 percent. In the fourth quarter, Vaisala announced a new market segment based strategy and redesigned its organization to support strategy execution.

 

Investment in research and development in the financial year totaled EUR 24.6 million (EUR, 23.5 in 2007, EUR 20.6 million in 2006), representing 10.1 percent of the Group’s net sales.

Salaries paid by the company are based on local collective and individual agreements, individual performance and the demand level of each job. The base salaries are supplemented by results-based bonus systems, which cover all Vaisala personnel. The total sum of salaries paid in 2008 was EUR 59.7 million (EUR 57.2 million in 2007).

Vaisala has two incentive plans; one based on the development of sales and profitability and covering all employees, and another three-year plan based on the development of profitability and covering key employees. Research and development grants from Finnish governmental organizations amounted to EUR 679,200.