Hello, and welcome to Vaisala's fourth quarter and full-year 2025 audiocast and results call. I am Niina Ala-Luopa from Vaisala's Investor Relations, and today in this call with me are President and CEO Kai Öistämö, CFO Heli Lindfors, and Chair of the Board Ville Voipio.

We have today published our financial statement release, and Kai will first go through the results, and then we have time for questions.

Thank you, Niina, and welcome for everybody from my side as well. As the headline says, strong performance in 2025 and on a highlight in the fourth fourth quarter really being the orders received improving.

If we look at the the actual what happened in in in the year in the quarter, maybe I'll start with kind of just if we were to teleport ourselves into beginning of 2025, just to remind you what kind of a year we were kind of thinking that we would face and what was the reality. We had a plan as a company to grow on the renewable energy on the back of kind of many years of good success building building on that, and the outlook albeit that little bit more muted growth on renewable energy investments, but but nevertheless continuing the growth.

Then, US elections have happened, but the the speculations on trade wars, import duties, things of that nature, were on the scenario scenarios, but not the most likely ones, still in in early January. Then there was really I I think not really much of a speculation, which is hard to have, the speculation on how volatile the currency exchange rates then became during the year.

What a roller coaster ride in in a in in 2025. First thing is what happened was that the renewable energy market for us really plummeted quite a bit, creating a big hole from the get-go in the in the year, remembering that that this has be had been one of the growth drivers for the company and profitable very profitable one as well.

That kind of went away from from the beginning of the year. We've quantified about €20 million, even a little bit over €20 million, as a as a hole that it created from the from the get-go.

Then, in during the year, the with twist and turn twists and turns getting to 15% import duties between US and Europe. Then, in the second half of the year, US oh, actually the euro appreciating vis-a-vis vis-a-vis not only US dollar, but many other currencies, Chinese yuan, Australian dollar, Canadian dollar, and so on and so on.

It it it's clearly a broader event than than than than just the the import duties between kind of two two two continents or two countries. In this environment, I I think we can be as as a company very proud how we performed.

We we were able to continue our on on our growth journey. If I look at in kind of our long-term first reminding that our our strategy goal was growing the growing the net sales by average 7% over long term, and we were clearly above that if we as we should be measuring that in constant currencies, 7.4% year-on-year growth rate on during 2025.

We were able to mitigate the the the import duties on Industrial Measurements side. That meant increasing prices the day after where the the import duties were clear, with no visible impact on on demand.

On on the Weather side, actually preshipping into US, avoiding the tariffs, and giving us time to negotiate, as the business on that side is based on longer-term contracts, and especially public side, it takes time to negotiate. Happy to report that we've been able to actually during like during that buy time that we bought for the second half, we've been able to actually come to terms and and agree with the customers that we were we are going to be are now able to pass also in in Weather side the import duties to to our customers.

Then, thirdly, the the fluctuation on the on the on the currency currencies, the strong appreciation of dollar during the of of euro during the second second half of of the year obviously then created headwind, which is is is a lead-in into into when we look at the the fourth quarter. In this environment where we are we were kind of during the quarter in 1.18, 1.16 range on in terms of a euro-dollar ratio, comparing to the year before where we were 1.02, that gives you kind of a flavor what what kind of a head headwind you one would face.

Despite that, essentially a flat net sales year on year. That obviously kind of creating challenges on on some parts of the businesses even more than other ones.

Xweather being very highly a dollar-based, we are talking about clearly over 60% of the sales in in in USD, obviously creating even more headwinds than than than in some other parts of the business. That being said, also the then then when we look at the order intake in in in fourth quarter, that's the really a a positive highlight, I think, in in the fourth quarter.

The order book increased increased 10% in terms of a constant currencies, really driven by Industrial Measurements, but also in Weather and Environment clearly improving to the level the the year before, marking kind of a significant change when we go see go look at sequentially, first quarter, second quarter, and third quarter, really kind of like changing changing kind of significant change in in in that trend. The when then looking forward, the market uncertainties continue.

I think that's one thing that is a kind of a for sure as a as a as as an expectation for for for this year. What are exactly the uncertainties?

What are exactly the things that we are going to face? Nobody knows.

I I am actually convinced when we going to have this year year from now this call year from now and we do also the again the kind of the exercise of teleporting ourselves back to this date, we will we find ourselves how many changes and what kind of a rapid changes in the marketplace have happened. In all this kind of based on the good strong performance in 2025, the Board of Directors also yesterday or today decided to propose 86 euro cents as the dividend for for AGM to to decide.

Now, before going into like specifically now the specific numbers and and and and and more details in the in the performance itself, maybe good to look at kind of more of a kind of a strategy perspective, highlights on on on on on the 2025. It really is about technology leadership, it's about climate action.

I think we can be very proud of Xweather and subscription sales growing 50% year on year. We can be very proud of actually meeting and exceeding our long-term growth target as a company.

On top of that, maybe a couple of other other things that that you might not be as familiar with. The the work that we have been doing very systematically in the company to improve the health and safety to the level that I am super proud on where we are today.

The TRIR being 1.15. Some of you might not know what exactly that means.

It means that we are kind of the top-of-the-range industrial company in terms of health and safety. We've we really have been able to create the this to be a safe working place where everybody gets home safe, comes safe to safe to work, and gets home safe as it should be.

This is something that we we as a company, we as employees of a company, we we are very very happy, and we continue on this journey. Then, another recognition on on our sustainable growth journey, this time by by TIME.

Then, we continued on our strategy execution, continuous improvement and and and a flow of new products and services in in all parts of the business. We continue to invest also into into our operations, which is a key part of our success formula.

Clearly a milestone on this was the the completion of the automated logistics center here in Finland and taking into into full use, now giving us benefits going going forward on on multiple different levels. Then into into the financials and starting with with overall as a as a company.

As said, orders received improved in in in fourth quarter, driven by by very good performance in in in Industrial Measurements and and a and a clear improvement on on Weather side. Orders received increased by by 5% year on year in in reported currencies and 10% in constant currencies, bringing the order book to €185.8 million.

That puts us below the what the level was at the beginning of last year or end of end of December 31st of of 2024, but at the at the same time, it puts us clearly above what the order book was at the same time in in the year 2023. The year 2024, as was not a bad one for for Vaisala.

I think this order book level gives us a good comfort on on at least on the starting of starting of the year on both both sides of the business. Net sales in fourth quarter slightly decreased, and and if we look at constant currencies being flat.

This you have to remember again, the 20 2024 being exceptionally strong fourth quarter, the comparable was was quite quite strong on on what we compare ourselves to. Gross margin slight decline, and and here I would kind of pick up two things: the when we say that we compensated fully the import duties, the way the math work works on that, that means in terms of a relative profitability in terms of gross margin, there's about 1 percentage point, a little bit over 1 percentage point headwind caused by that.

Then then also, as I said, we had a extremely difficult year in Excuse me. on the renewable energy side, and when we compare to previous year, that was a kind of a clear accretive business in terms of a in in terms of a profitability for the company, turning into a a a more of a much more of a drag to the profitability.

No news is good news in cash conversion, so as we have been showing as a as a track record for many years now, cash cash conversion continued to be strong. Looking at Industrial Measurements side, I've said multiple times, the record-high orders received and net sales in in in 2025, I I think something that we can be super proud of.

We look at the the the year as such, orders received increasing by 13% year on year, and especially in the constant currencies, 21%. That, we really need we really can be proud of proud about it, and it feels very good.

This growth was driven by Americas. Despite all the all the talk about the trade wars and everything else, continued our success in in the US especially.

Net sales increasing by by 1% in terms of reported currencies, but 7% in constant currencies, which I think really reflects our real underlying performance. There obviously the the headwinds caused by the depreciation of not only US dollar, but also Chinese yuan and other several other currencies, impact obviously the reported orders received and net sales and as as discussed already earlier.

Gross margin stayed on the same level, despite the the headwind, as I said, from mitigating the the the the import duties. Then then on EBITDA side, slight decline, and that this was like really driven by on the OPEX side one-offs and and and some investments into sales and marketing and commercial excellence, and couple of maybe words on on that.

There when when I say investments in sales and sales, that means into digital channel and building the digital channel capabilities, which we are going to be benefiting in the coming years. Then also kind of a clear investment into commercial excellence, which we are running as a program in Industrial Measurement, which we also expect to be improving the performance even further in the coming years.

Then, on the Weather and Environment side, highlight of the year I I think is really how the year developed, and especially in the fourth quarter the the orders received on the on the previous previous year level and and really the increased demand coming from meteorology and aviation segments. Maybe some of you have been somewhat worried about the volatility and and and and and the changes of the demand in in meteorology and aviation segments.

I think this is a good reminder how how cyclical and and and and it it changes between the quarters and and between the years. The market itself, when looking at it as we we will talk about it, in grand scheme of things, is is is a strong strong continues to be a a a good market.

Order book somewhat below the clearly below the level of end of the previous year, but at the same time, as I said for the entire company, similar story as actually also for for Weather and Environment. If we compare the order book that we start this year with actually is on a good level compared to what we ended in 2023, or be kind of what we started 2024 with.

Then gross margin headwinds there clearly lower, and and this is back to what I now said multiple times, that the the significant decline on the high-margin renewable energy business clearly visible on the gross margin. Obviously, the exchange rate rate impacts, and and then then and then then the impacts also from from the US tariffs as as discussed previously.

Despite all that EBITDA the headwinds and the challenges that we faced in in in the year, the EBITDA level stay in in a good level of close to 15% EBITDA. Looking at the cash flow, I said strong cash flow continued, and and we actually increased the the cash flow from operating activities over €10 million compared to the previous year, and mainly really as a good work on improving the net working capital by by the company, yielding the cash conversion to to 1.1.

I understand that there was a break in the internet connection, and and I assume we are back. Just as a summary for for for 2025, not sure where where you dropped off, I'll I'll start at the top of the slide.

Reminder that net sales grew in line with with our long-term targets. We grew over 7% in constant currencies.

If if I kind of pick a couple of highlights on this slide, the subscription sales were up by 50%, boosted by the the acquisitions that we did at the very end of the previous year on Weatherdesk and and and Speedwell Climate now being fully integrated, and and bringing when when you exclude the Weatherdesk and and Speedwell Climate, the on constant currencies, the organic growth well in double-digit. On gross margin, slight decline due to several headwinds, exchange rates impacts, the proportional impacts of the US tariffs, as well as I discussed earlier, and and then the the strong decline in in the high-margin renewable energy business.

EBITDA being roughly on the same level as as year before, and the earnings per share per share slightly below the year before. The financial position for the company remains strong.

Again, no news is good news. When we were preparing these slides, we should for the next quarter maybe count how many quarters have we have had the same heading, and I am super proud to have the same heading on this slide.

It it gives us kind of very very solid solid ground obviously, and and it's a testament on low leverage on the balance sheet and and the the asset-light business model that that we have as a company, strong cash flow generation that we have as a company. Now with automated logistics center completed, that obviously kind of takes kind of gives us another leverage going going forward as forward as well.

Moving on to the the market and business outlook. The market outlook for 20 as we see it for 2026, we see growth in industrial, in life science, in power power markets, power, and the markets for Xweather subscription sales.

Then stable a stable market outlook for meteorology and aviation, as well as for renewable energy. On the renewable energy, obviously now stable on a clearly lower level where we started a year year and a half ago.

What did what does it look then in in terms of business outlook? For this year, we estimate that our full-year net sales will be in the range between €600 to 630 million, and our operating result in terms of an EBIT will be in the range of between €95 to 110 million.

With that, I'll conclude the the prepared remarks, and happy to answer any questions that you may have.

Hello, this is Niko Ruokangas from SEB. Thank you for the presentation.

Sorry, there was some technical error in the line, I lost or didn't hear anything for a couple of minutes, I'm sorry if I am repeating something. I have three questions, and I'll start with order intake for the Industrial Measurements.

You showed very strong 21% FX-adjusted order intake growth in Industrial Measurements, and you for example mentioned there data center orders and so on. Were there something extraordinarily strong in this quarter, or does that kind of describe or reflect the current strong trend overall in Industrial Measurements?

The only thing I think that is maybe little bit more pronounced this year than last year, and certainly the year before, has been the kind of longer-term orders from Chinese companies that you may recall if you have followed us a little bit longer, that we have had for a long time a year-end early-in-the-year orders, kind of full-year orders, blanket orders from our customers in especially in China. They became almost absent in 2022, 2023, when there was a 2023, 2024, when there was more of an uncertainty in the market driven by uncertainty in economic development in China.

I think it is a very positive news that at least the confidence of our customers seems to be there in a higher level than in the previous years. That's only a portion of this, and big part of it is really is, as we said in the release as well, that it really is driven by the demand of our products, and remembering that we are, as we have been saying, well situated vis-a-vis the megatrends.

There's lots of growth industries that we serve that are sizable for us. Be it life sciences, be it data centers, as you said Niko, be it semiconductor, and the power are good examples, as just mentioning a few.

Understand. Thanks.

That you would have had also significant FX-adjusted growth even without those Chinese orders.

Correct.

Good. Then, my second one is on the order or potential order from Indonesia.

You mentioned in the report that the Indonesian airport order will be included in orders if the client receives financing in H1. Can you open that situation a bit more, so that does it mean that if they don't receive the financing, you will lose this order totally?

Then, are you kind of including that order in your guidance assumptions?

Yeah. A couple of things on that.

A good question. Thank you, Niko.

It is not included in our order book or the guidance. As we don't do anything which are bigger orders, especially from emerging markets, where timings of such orders is extremely difficult to predict, even in a year.

That's one. Then, the background is that, as it's been for a while announced publicly, where it actually was done by our customer, who wanted to publish it even before we had the final commercial agreement done.

The Indonesian order is one of these MICD projects, where it's based on public financing, and the public financing rules are, when this kind of projects are done, the public financing vehicles are guaranteed for a period of time, and then it's to be, for good governance, a backstop on when they kind of expire. When they expire, then obviously you would have to kind of restart building the financing package if that kind of a case were to happen.

That's what the wording is reflecting. The customer feedback is that they absolutely want this to happen.

Now, sometimes these kind of things have quite a bit of red tape in both timing. It reflects back to my comment on the timing itself, again, the predictability is hard.

Totally understands. Thank you for good color.

My last question on USA and the public client side. Have you now seen kind of a stabilization there in demand?

Did you have any impacts from the US government shutdown in Q4?

Good question. Thank you.

Very happy to actually give you color on this. We now have verbal insight on, for example, the budget for National Weather Service, and it seems to be on a good level.

The cuts really in the end did not materially occur in National Weather Service. In some other agencies, much more so.

The budget is, like said, on a good level. Regarding the fourth-quarter government shutdown, in the end, it actually did not affect our sales.

We were able to cope with it.

All right. Good.

That's all for me. Thank you.

Thank you.

Hi, it's Valter Rossi from Danske Bank. Thank you for the presentation.

Few questions. Maybe first, I'll ask about the semiconductor segment that you say is also driving the growth currently in the Industrial Measurements.

Could you open a bit how Vaisala products are used in semiconductor segment?

Let's define what semiconductor, when I say semiconductor, what it means for us. We are present from different types of memory processes to commodity silicon to really the leading edge compute nodes in terms of fabs, in terms of manufacturing equipment, and so on.

We sell to the semiconductor environment via multiple different ways. Our equipment may be sold sometimes directly into the fab itself, sometimes through an OEM that is creating the environment in the fab, sometimes to the equipment that are actually used in the production of the different types of silicon products.

We are present in all around the world. It's much broader kind of a coverage when typically talked about semiconductor.

All right. Thank you.

Then about the meteorology and aviation segments, which you expect to be stable going into '26, does that mean zero growth or could it be a small positive number still?

When we have said stable and we've said stable for the long term as well, if I take a little bit longer term view averaging things out, it's inflation corrected stable. It's not a market that is declining in real terms.

It is actually stable in real terms. Now, then how does that behave between kind of as you saw last year, between different quarters and so on, the nature of that business is somewhat volatile.

Great. Thanks.

Just

a few questions on

I'll give you a little bit more color on, for example, we just talked about with Niko on the Indonesian order is a great example. It's a sizable order that would even impact the entire market size when it happens, but predicting which quarter it comes is super hard.

Good addition, thanks. Still few questions about Xweather.

First, what is driving the growth in that business? You expect it to grow this year, but any indication here?

Could it mean double-digit or more like 5%?

Our ambition is to continue to grow double-digit the business itself. That being said, when I say double-digit, I can really talk about in constant currencies.

Given the speed of the currency exchange rate changes and the fluctuation, especially in this business where the exposure to non-euro currencies is larger than anywhere else that we have, the impact also is the biggest on euro reported numbers.

Great. Can you say anything about what's driving the growth here?

Where are you potentially getting the customers and so?

Yeah. We are strong on several customer segments: finance and insurance, renewable energy, and transport.

We see kind of both more usage from existing customers and then clearly a potential getting more customers. We see that there's a kind of opportunity to grow both ways, that it's more and wider usage for existing customers, as well as then kind of getting new customers.

Then obviously, we are looking at the adjacencies at the same time, that is a kind of a further growth initiative.

All right. Lastly on the Xweather profitability, yeah, as we know, this profitability should improve once you lower the investments in the growth.

Kind of two questions: What are you actually investing in right now at the business that is still keeping the profitability down? What is your kind of ambition level on the profitability during this strategy period for Xweather?

First comment is that the profitability improved significantly last year, and so the direction is we're super happy with the direction on the profitability. Then, where are we investing today?

It really is about growth. It's sales and marketing.

Think about this as a recurring software subscription business. There, the investment into it's relatively easy to kind of measure the sales and marketing impacts, both to new leads, qualified leads, into then conversions from qualified leads into sales.

Really the focus is driving growth, and therefore, the focus on investment side is increasing the reach of sales and marketing.

About the kind of your target level on profitability during this

period,

any kind of

We have not said any concrete target level on Xweather during the strategy period. I just repeat what I said earlier that super happy on the development that we had last year.

Understood. Thank you for the answers.

Thank you.

It's Joonas from Evli. Your Industrial Measurements product sales grew only 1% year on year, I think that seemed relatively low.

Was that only a timing issue?

Less of a timing issue. You are talking about the fourth quarter, I assume?

Yeah.

That's

more

of a significant headwind in terms of the currency exchange rates. That's kind of the biggest impact on it.

On constant currency terms, how much would have these product sales then grown?

Let me get back. Net sales growth fourth quarter on 7% on that's the year annual number.

Then quarterly number, it's a bit bit in bit in timing timing as you said.

Nothing really special happening there. I guess we can just assume that basically the volumes are growing at around 5% to 7% or so.

We report the constant currencies, the net sales growth, only the total net sales in Industrial Measurements, but not on a product or service sales level.

They are fairly the same, you can apply the same percentage gap to the below items roughly.

Correct.

All right, that's clear. Then Weather and Environment on the cost side, you've implemented these cost adjustments, and I think they were already quite well visible in the Q4 figures.

Do the Q4 figures already fully reflect all these cost adjustments that you have recently made? Can we expect even more to be visible in 2026?

Already announced cost savings that to a very large extent, they are visible in the fourth quarter already. They were done in the third quarter during the third quarter, and they Heli are very large extent already visible there.

Yes. Mostly is done, as we recorded also the one-off cost already in Q3, so.

That's clear. Then could you remind us of the gross margin outlook for Industrial Measurements and Weather and Environment for 2026?

I can't remind you because we don't give it. Oh,

okay. Can you describe some of the drivers that might impact it this year, what might change in that respect?

Yeah. Obviously, if you look at from a gross margin side, similar similar impacts obviously on as as in a typical year, that if I take Weather side first, the project sales like if you look at individual quarters, how was the extent of the project sales versus product sales, that has a big impact on on gross gross margin on an individual quarter and sometimes even in a year to some extent, at least.

Then, last year, we had a significant headwind from the the the renewable energy into the gross margin as well in Weather and Environment. As we are fixing that business, obviously we can't kind of completely fix it since it's now inherently on a lower level that it was kind of in 2024.

We we kind of we we are working on on on that side. Then, of course, the accretive thing in in gross margin in in Weather and Environment is is Xweather, where the bigger that that gets to be, and it clearly has a kind of a creative like very accretive gross margin at in the Weather and Environment numbers.

Then on on VIM side, there it's like if again if I look at the quarterly side, some fluctuations between quarters based on, product mixes that happen to be sold in in a in a in a quarter. That's less so when you look at on an annual level.

Then it continues to scale like like we has been in the past, that as the business continues to grow, that should be bringing leverage, not only on the profitability, but also on the gross margin side.

Okay. Yeah.

Then finally, could you remind us of the geographic sales drivers? The big picture, IM should grow this year quite a lot, and it's mostly driven by the US and Europe, but the big picture, are there anything to highlight from a geographic

point of view? US if I look at overall actually last year, US grew more than any other, Americas as we say, but it really is US, grew much more than other regions.

Reflected also the industrial activity and the growth of industrial activity in the US. I think that the overall when you look at the geographic mix, it reflects often the industrial activity and investments into industrial activity in different geographies.

I would expect that US continues to be probably ahead of Europe. I think that's a safe bet.

Then positive dynamic in China in short term at least, but we will see. Important events, for example, the Trump-Xi meeting now in April, we'll see how that impacts in the US-China relationships and may be positive, maybe negative.

That's clear. That's all from me.

Thank you.

Thank you.

Thank you everyone for joining the call. Thank you Kai for the presentation.

Next in our financial calendar, we have the Annual General Meeting on March 24, and then the first quarter result sharing on April 24. Now, thank you very much, and have a pleasant week.