Vuosikertomus 2019 Annual Report 2019 Teleste 2018
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A Smart, Safe, Smooth Future Vuosikertomus 2019 Annual Report 2019 Teleste 2018 Strategia Teknologia Liiketoiminta-alueet Contents Vastuullisuus Johto Tilinpäätös CONCERN Teleste’s Year 3 CEO’s Review 4 Events and News 6 Megatrends 12 Mission, Vision, Values 13 Technology and Solutions 14 BUSINESS AREAS Video and Broadband Solutions 17 Network Services 20 RESPONSIBILITY Personnel 22 Sustainable Development 25 MANAGEMENT Board of Directors 30 Management Group 32 Information for Shareholders 34 Teleste 2019 Strategy Technology Business areas Responsibility Management Financial statement 2 Year in brief Operating result, Net sales, Meur adjusted Meur 300 250 200 20 150 15 100 10 TELESTE offers an integrated product and service portfolio that 50 5 makes it possible to build and run a better networked society. Our 0 0 15 16 17 18 19 15 16 17 18 19 solutions bring television and broadband services to you, secure your safety in public places and guide your use of public transport. With solid industry experience and drive for innovations, we are a leading international company in broadband, security and informa- tion technologies and related services. Orders received, Meur Dividend, Eur 300 250 0,5 • Net sales decreased 5.9 per cent to EUR 235.5 (250,3) million. 200 0,4 150 0,3 • Adjusted operating result was EUR 7.7 (9.7) million. 100 0,2 • Earnings per share, adjusted was EUR 0.31 (0.38). 50 0,1 0 0 • Orders received totalled EUR 237.6 (264.0) million. 15 16 17 18 19 15 16 17 18 19 * • The Board of Directors proposes a dividend of EUR 0.10 for year *board proposal 2019. Teleste 2019 Strategy Technology Business areas Responsibility Management Financial statement 3 CEO’S REVIEW An eventful year in 2019 Our operating environment is characterised by continuous change. We started the year in a good position for insurance compensation are also being ex- Teleste, the transformation presents an opportu- and with positive expectations. Our order amined. The overall impact of the crime will only nity for expansion into the world’s largest cable be determined when these processes have been network market in North America. I am satisfied backlog was high, our offering was compet- completed. with the position we have already achieved and itive and our operational efficiency was at our capacity to deliver products that match the re- a good level overall. However, at the same TECHNOLOGICAL TRANSFORMATION quirements of the new technology. I expect that time, we were very aware of the technolog- DELAYED investments in distributed access architecture will gather momentum in earnest in the coming years, ical transformation of the access network There were significant differences in the develop- but the timing of commercial success this year is market. While our success exceeded our ment of Teleste’s businesses. The net sales of the difficult to predict. Nevertheless, I believe that the expectations in many respects, the year access network products business declined due first deliveries will take place in the latter part of also brought some unpleasant surprises. to decreased investment levels among the cus- the year 2020. tomer base. Orders were focused on updates to traditional HFC networks and the breakthrough GROWTH IN THE PUBLIC TRANSPORT Our net sales decreased by 5.9 per cent to EUR of distributed access architecture did not happen 235.5 million (2018: EUR 250.3 million). Our ad- yet. We nevertheless maintained our leading po- The development of video security and informa- justed operating result was EUR 7.7 million (2018: sition in the declining European access network tion solutions was very positive and, in particular, EUR 9.7 million). At the end of the year, orders re- market by a clear margin. the increased investments in the public transport ceived amounted to EUR 237.6 million (2018: EUR We made strong progress in developing our among our customer base were reflected favoura- 264.0 million). product range to ensure compatibility interoper- bly in our net sales and order backlog. The growth At the beginning of March, a crime was commit- ability of products and solutions of various hard- of public transport is inevitable as urbanisation ted against a foreign subsidiary of Teleste. Identity ware and software providers and our negotiations continues, and it also supports the mitigation of theft and other illegal actions resulted in the sub- with potential customers went well. Teleste is a climate change. Video security and passenger in- sidiary making unwarranted payments. We had to recognised forerunner in products for distributed formation solutions increase the convenience and issue a profit warning to announce that we would access architecture and a preferred partner for safety of public transport. This was clearly evi- record non-recurring costs of approximately EUR customers and other equipment suppliers. The dent in the development of the business area. We 7 million due to the crime. The case is under in- upcoming significant technological transformation expanded our production capacity and personnel vestigation by the authorities and the conditions will change the way the industry operates. For resources in passenger information solutions. Teleste 2019 Strategy Technology Business areas Responsibility Management Financial statement 4 Despite the intense rate of activity, we were able growing among our customer base and operating to maintain high quality and customer satisfac- models and roles are changing. Technology life cy- tion, which were also reflected in our profitabili- cles are becoming shorter and new products and ty. Our reputation grew stronger and our growth services are being designed at an accelerating outpaced the industry. The signs suggest that the rate. Our world is becoming increasingly complex positive development will continue in 2020. and we are part of a broader ecosystem. In order to respond to the changes, we must anticipate CHALLENGES IN GERMANY future developments and have the flexibility to adapt accordingly. We test our strategy by mon- The success of our service business fell short of itoring our results. If we fail to make the desired our expectations and we faced challenges particu- progress, we take corrective action. Continuous larly in relation to the decreased sales volumes in improvement has always been part of our day-to- our largest unit, in Germany. The order volumes day business. We currently have projects under under the service agreement with our most signifi- way to promote development in areas such as cant customer in Germany decreased, and no sep- production automation and digitalisation. arate projects were initiated. As it was not pos- We have also invested in competence develop- sible to sufficiently adapt to the lower net sales ment and our HR function. We take a systematic in the short term, the profitability of the business approach to anticipating our future competence area declined. The efficiency improvement meas- needs. We assess the competencies of our per- ures taken in the previous years have already sonnel and build development and training pro- produced results, but we continued to implement grammes to ensure competence development. At further development measures. The contraction of the same time, we increasingly focus on maintain- the service business and the technological trans- ing a pleasant working environment. formation in access network products meant that we had to issue a profit warning late in the year to RISKS AND OPPORTUNITIES reduce our guidance with regard to our net sales and result. At the same time, we achieved clear The start of 2020 has been characterised by un- progress in the UK and Switzerland, while profita- certainty in many respects. The threat of a trade bility declined in Finland and Belgium. war, Brexit and the coronavirus epidemic may There are many growth opportunities on the all influence our business in some ways. At the horizon in the service business, driven by network same time, there are many positive signals in our investments and changes in the customer base. markets as well. I hope that the new year will be Nevertheless, the expectation is that there will brighter for Teleste than the previous one and be no significant changes in the business in 2020. that we will make progress in line with our plans. I would like to thank all Teleste employees for CONTINUOUS IMPROVEMENT the good work we have done together and our Board of Directors for their support. I would also Our operating environment is characterised by like to thank our customers, partners and share- continuous and rapid change. Company sizes are holders for their trust in Teleste. Jukka Rinnevaara CEO 5 Events and news Um ime aliae autem lab ipis eaqui debitatem sam ra culliam, corro to bla Everything began literally at the foot of the Matterhorn The collaboration between the Swiss Company Hell- features trust and cooperation on all levels. Based on tec Engineering AG and Teleste started with a large this continuity, Helltec was able to achieve a high in- project shortly after it was founded in 2002. Helltec stallation base for Teleste products in the highly frag- was able to land an upgrade project with the Valais mented Swiss cable market with over 200 operators. cable network operator, Valaiscom AG. In October 2004, the first upgrade project was ceremonially HELLTEC IS WELL POSITIONED IN THE FUTURE handed over to Valaiscom at the Matterhorn in Ze- rmatt. This was the foundation of a successful and Thanks to the consistent implementation of the long-lasting partnership. strategy, Helltec has been able to develop steadily and has established a strong position in the Swiss THE COLLABORATION IS A SUCCESS STORY cable market. The portfolio includes conception, pro- ject planning/design, system integration, training The change processes within the Swiss cable industry and documentation of cable network infrastructures.