CEO’s review 2018
Empower Group’s business developed favorably in 2018, although growth also brought challenges. The Group’s turnover increased by 3.0% during the financial year 2018 on the strength of our competitive service and product portfolio, with growth achieved in nearly all of our business areas. The only exception was Smart Industry, where turnover declined due to the expiration of a long-term service agreement.
Empower Group’s EBITDA for the financial year 2018 amounted to EUR 8.9 million, which was slightly below our target. The start of significant new service agreements called for rapid growth in operations, which presented challenges concerning profitability. Furthermore, the unfavorable competitive climate in our personnel-intensive businesses had an impact on our EBITDA. The Group’s order book strengthened during the financial year and we were able to enter 2019 with a positive outlook, as our order book already covered more than 80 percent of our turnover target for 2019.
We are realizing a smart society
In the Power business, demand was particularly focused on renewable energy projects. Empower was chosen to implement the first wind farms in Finland to be developed fully on market terms and our renewable energy project portfolio grew significantly in both Finland and Sweden. We also secured major power transmission construction projects in Sweden as well as the delivery of the first digital electrical substation in the Finnish main grid.
In the Connectivity business, Empower strengthened its leading position in Finland, with the delivery of new significant customer contracts commencing during the first quarter of the financial year. This called for rapid growth in operations, which presented challenges related to profitability as well as customer satisfaction. The fully digital delivery process implemented in the Connectivity business supported the quality of deliveries, while a partnership with a vendor known for space technology enabled Empower to add AR-based remote collaboration to its service selection.
In the Smart Industry business, our efforts to develop digital products produced good results. Demand for our digital products was robust among both existing and new customers, and we piloted IoT-based maintenance and service operations at several production facilities. We also established a Smart Factory in Hamina and transferred maintenance center and workshop operations there from other locations. In the Smart Factory, conventional industry will operate using the possibilities provided by state-of-the art technology, such as IoT and 5G solutions. The transparency of the operations provides up-to-date information for everyone to use from every level of the in-house organization to customers and subcontractors. It provides almost limitless opportunities for improving the efficiency of operations and optimizing production conditions.
We also made strong progress in the Energy Intelligence business, strengthening our market-leading position in Finland and improving our position in the other Nordic countries. The development of the EnerimCIS platform continued according to plan, with several new modules made available to our customers and contracts signed on the delivery of the platform in Sweden and Norway. The demand for Energy Intelligence services also grew significantly during the financial year. Among other things, we increased the volume of our remote reading and metering data management service by more than 20 percent.
Investments in a digital future
One of our fastest-growing business areas is digital solutions, which we provide for both industrial customers and the energy sector. We expanded our IoT technology expertise in early 2018 by acquiring TreLab’s technology solutions. In line with our strategy, we will continue to make significant investments in building a smarter society and developing digitalization solutions. From the customer perspective, this means further improvements in Empower’s technology competencies and a broader capacity to solve customers’ maintenance-related challenges by making use of analytics and the entire organization’s professional expertise.
We significantly strengthened our R&D organization in 2018 and invested EUR 8.7 million in product development, which corresponds to 3.4% of the Group companies’ total turnover. Going forward, we will continue to allocate R&D investments to, among other things, the development of information systems related to energy metering and invoicing, work planning and control systems related to the installation and maintenance of telecom and power networks as well as digital products and solutions that improve safety and production efficiency.
Big enough to deliver, respectful enough to care
Empower’s constitutive meeting took place on December 15, 1998, at the Pohjolan Voima head office on Mikonkatu in Helsinki. As 2018 drew to a close, we invited all Empower employees to celebrate the 20th anniversary of our Group by getting together for coffee and cake at our construction sites and offices in Finland, Sweden and the Baltic countries. Empower will have its 21st year of operations in 2019, which speaks to our Group’s capacity for renewal and an attractive service portfolio that stands the test of time.
Recognizing that our employees are our most important resource, we allocated our 20th anniversary donations to charities chosen by our personnel. Empower’s operations have a significant impact on energy efficiency and climate affairs, and the choices made by our employees reflected these themes. We made donations to support WWF Finland’s climate efforts, sponsored Koodikerho coding club activities for 60 children and helped increase awareness of the energy industry by providing two energy-related learning packages for use in basic education, enabling students to learn about the production, storage and use of renewable energy.
I want to take this opportunity to thank our customers for successful cooperation as well as our personnel and partners for ensuring our success. At the end of 2018, our Group’s order book is very good and covers several future years, which gives us bright future prospects. Our aim in 2019 is to again grow in a controlled manner to ensure quality and efficiency. We want to build a smart society by combining the industry expertise we have accumulated over the years with the opportunities presented by the digital transformation.
CEO, Empower Group