YEAR 2014 Your Everyday Life
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We make... YEAR 2014 your everyday life easier safer 02 TELESTE, ENABLING DIGITAL EVOLUTION TELESTE IN 2014 BUSINESS AREAS RESPONSIBILITY MANAGEMENT more efficient CONTENTS TELESTE Teleste in Brief 2 Year 2014 in Brief 3 CEO’s Review 4 Market Environment 6 Strategy 8 Technology and Product Development 10 BUSINESS AREAS Business Areas in Brief 12 Video and Broadband Solutions 15 Network Services 18 Customer Projects 20 RESPONSIBILITY Personnel 24 Sustainable Development 26 MANAGEMENT Board of Directors 28 Management Group 30 Information for Shareholders 32 TELESTE IN 2014 BUSINESS AREAS RESPONSIBILITY MANAGEMENT YEAR 2014 1 TELESTE IN BRIEF Teleste is an international technology company that develops and Video and Broadband Solutions focuses on access networks and offers video and broadband technologies and related services. Our video security and information solutions. Network Services offers com- supply of technology contributes to the convenience and safety of prehensive services for network design, construction and maintenance. daily living. Our core business is video: video and data processing, In 2014, Teleste’s net sales totaled EUR 197 million, and the com- transfer and management. Our customer base consists of cable and pany employed more than 1,400 people. Teleste runs a worldwide net- telecom operators, as well as public sector organizations. work of offices and more than 90% of its sales are generated outside Our business is divided into two divisions, which are Video and Finland. Broadband Solutions and Network Services. In both areas, we rank The company is listed on the Nasdaq Helsinki. For more information among the world’s leading companies and technological forerunners. see www.teleste.com. 2 TELESTE, ENABLING DIGITAL EVOLUTION TELESTE IN 2014 BUSINESS AREAS RESPONSIBILITY MANAGEMENT YEAR IN BRIEF GOOD PERFORMANCE CONTINUED HIGHLIGHTS • Early in the year demand was sluggish, but the second half of the year exceeded expectations. January. Teleste turned 60 on 22 January. Over the decades, Teleste has grown into • Full-year net sales and operating profit rose slightly from the previous year. J one of the world’s leading suppliers of access networks and video surveillance • Orders received increased. applications, products and services. • Our customers’ ability to invest remained good. March. A Group-wide well-being survey • Price competition intensified further, especially in access networks products. was carried out in March. The overall • We focused strongly on developing our product and service offering. result was good, and corrective measures M were launched based on the areas of • We continued improving our competitiveness through a number of measures. development identified by the survey. A Steering Group was established to • The outlook for 2015 is mainly positive. monitor the progress. • Our order backlog provides a good starting point for the current year. • The acquisition of Mitron in January 2015 strengthens our offering of video surveillance solutions. July. Teleste won a public tender for delivering optical access network J transmission equipment to the French authority SIEA. The system is one of the largest RFoG deployments in Europe. August. Teleste signed a five-year frame agreement with multi-national Altice Group. This is the first mass-scale deployment A of DOCSIS 3.1 capable access network in NET SALES, MEUR OPERATING PROFIT, MEUR ORDERS RECEIVED, MEUR PERSONNEL Europe. 200 12 200 October. Teleste signed an agreement with the French State Railways (SNCF) 150 9 150 Finland O on maintenance of the video security 28% solution covering the whole of France. 100 6 100 The solution has been gradually supplied by Teleste over the past ten years. 50 3 50 Other countries 72% December. Fourth-quarter net sales was the second-highest in Teleste’s history and 0 0 0 almost reached the previous year’s record D 10 11 12 13 14 10 11 12 13 14 10 11 12 13 14 net sales. TELESTE IN 2014 BUSINESS AREAS RESPONSIBILITY MANAGEMENT YEAR 2014 3 Good Result to get inspired by our tasks and Teleste’s ACCELERATING RATE For Teleste, the year 2014 was, by and large, knowhow. On the other hand, a number of good. The typically rather sluggish market of deficiencies were found, and clear differences the early year picked up towards the end. In can be seen between our offices. Based on OF DIGITISATION the second half of the year, we took a clear these results, we defined development tar- final spurt. For the full year, our net sales gets and tackled the issues right away. We amounted to EUR 197.2 million, an increase now have several global programs running, of 2.3% over 2013. Our operating profit of the advancement of which is monitored by The rapid progression of digitisation is changing our operating EUR 11.1 million reached the level of the pre- steering groups. Job satisfaction is impor- environment and ways of living at great speed. The world is vious year. tant to us because of productivity, but in par- becoming networked while new technologies are being developed The demand for our products and ser- ticular, we want Teleste to have a nice work- vices developed favorably. The need for ing atmosphere. and utilised ever more widely. Intelligence and need for informa- access network products kept on growing, Regarding the development of our offer- tion increase in our environment. Public transport, regions and but at the same time the tough price com- ing, we carried out a lot of different meas- petition, that has been felt for some time, ures paying special attention to our product borders are already being monitored and controlled by means of only intensified. We, however, managed to and quality development, and product-spe- broadband and video solutions. Efficient dissemination of infor- strengthen our market position while increas- cific profitability calculation. As to the prod- mation facilitates movement of people and ensures their safety. ing our profitability. Similarly, the sales and uct development, we continued our R&D profitability of video surveillance solutions efforts involving access networks products developed, as a whole, well. The pace of in line with the DOCSIS 3.1 standard. We Smartness is also increasing in our homes. A broadband connec- orders coming in was steady, but the year succeeded in introducing the first upgraded tion can be used, among others, to control electronic equipment, brought no large systems contracts with it. products to the market, and their deliveries As for services, our net sales almost reached began in the second half of the year. Consid- lighting, heating and doors and to give an alarm on any hazard- the previous year’s level, whereas our prof- ering our extensive product offering, these ous situations. This, in turn, enables the development of a num- itability weakened due to the slower-than- upgrades will keep our product development ber of new services, for example, to cater to the needs of older expected progress achieved with the expan- busy for years to come. For our customers, sion of services in the UK. this new standard allows for building increas- people. ingly intelligent access networks cost-effec- Well-being at Work and Standards tively and, at the same time, diversification 2014 was also busy in terms of our internal of the provided services. We at Teleste develop technologies and solutions that promote development efforts. In March, we carried digitisation to make people’s daily life smoother, safer and more out the first Group-wide survey of well-being Mitron Strengthens Our Expertise efficient. at work. In the light of the obtained results, At the beginning of 2015, Teleste acquired people at Teleste enjoy their work; we tend the entire share capital of the Finnish Mitron 4 TELESTE, ENABLING DIGITAL EVOLUTION TELESTE IN 2014 BUSINESS AREAS RESPONSIBILITY MANAGEMENT CEO’S REVIEW Group Oy Ltd. Mitron delivers public trans- and buy any required products and services The need for port information systems and modern from the same supplier. Here, Teleste has an display solutions. Mitron strengthens our edge over its competitors as we are better broadband continues to expertise and position as a comprehensive equipped to provide end-to-end solutions, supplier of rail traffic video security and infor- especially in the European market. grow rapidly, so the operators mation management solutions. In our view, There are, of course, also uncertainties in will continue to invest in this merger will create clear synergies. Along sight. Direction of the European economy is with our customer base, the news about open and the exchange rate fluctuations are access networks in order to this acquisition got a positive reception also unpredictable. Competition in the market will among the personnel of both Mitron and Tel- only intensify, and especially the access net- offer new services. este. works products are subject to intense price pressure. Therefore, we need to take a good Demand Sustained by Trends care of our competitiveness. In accordance We have entered into the new financial year with the principles of continuous improve- with confidence. We believe the demand for ment, we increase the efficiency of our oper- our products and services will remain at a ations in every area, we develop our know- good level. The need for broadband contin- how and cost-efficiency while expanding our ues to grow rapidly, so the operators will con- markets and our customer base. We will con- tinue to invest in access networks in order to tinue our work with confidence, because we offer new services. The recent world politi- believe that Teleste has great potential for cal developments have only accentuated success also in the current year. the importance of guaranteeing safety, and I thank our employees, customers, part- video security systems have been proven to ners and shareholders for their trust and val- be effective tools for this need.