CEO’s review


In October–December 2023, Loihde’s revenue increased 3% year-on-year to EUR 37.3 (36.0) million. Adjusted EBITDA improved 13% to EUR 3.8 (3.6) million, or 10.1% (9.3%) of revenue.

Variation between service areas in digital development

In the digital development business, there were continued challenges with demand, and revenue decreased 2% year-on-year. However, for some of our clients, the number of projects has remained good, and we have seen some growth in e.g. the financial and public sectors.

Demand for bespoke software development has been low over the past year, and we do not see any significant improvement in a more positive direction in early 2024.

In data and analytics services, the market situation is slightly more positive. We have won several interesting projects related to artificial intelligence, data management, data platforms, analytics and reporting. One such example is AinoAid, where we are developing a generative AI chatbot service to help people that are experiencing domestic violence. The pilot project is a splendid example of how AI can be used to promote well-being. In addition to AI engineering, the project also uses Loihde’s extensive expertise in information security and digital development.

The market for cloud transformation and cloud optimisation consultancy has remained fairly positive. Loihde’s strength is its versatile expertise in cloud, hybrid and server implementations, which is highlighted in the phased cloud adoption of customers and in situations where part of the IT environment needs to be located on the customer’s own servers.

Growth continued as expected in the security business

The security business continued to grow; in October–December, revenue grew by 5% year-on-year.

In security technology, the last quarter of the year was typical, with customers pushing to complete projects by the end of the year, and also with established budget practices accumulating purchases towards the end of the year. We performed well in several customer and offering segments. In the social welfare and health care sector, for example, we had several projects underway at the end of the year to deliver nurse call and other security systems to major hospital projects.

In digital security, Identity and Access Management (IAM) consulting and our 24/7 Cyber Security Operations Centre CSOC grew nicely towards the end of the year, and the year as a whole was good for these service areas. We also entered into several new agreements in these areas, which will have an impact this year. In infrastructure and equipment sales, revenue in Q4 was weak due to customers postponing their purchase decisions.

Towards the end of the year, we signed two important framework agreements in the security business, with an estimated combined value of more than EUR 10 million. One of the agreements concerns security technology systems and services and the other network solutions. Deliveries are spread over a period of several years.

A mixed year that improved towards the end

Full-year revenue saw a year-on-year increase of 8% and came to EUR 132.7 million. Adjusted EBITDA was EUR 7.6 million, a decrease compared to the previous year due to the very weak start to the year. The latter half of the year was better in terms of profitability, with the adjusted EBITDA margin for this period improving by 20% compared to the comparative period and amounting to approximately 10% of revenue. In the early part of the year, the company’s profitability was weighed down by, among other things, weaker demand for bespoke software development, which led to low utilisation rates, and one-off costs and slowdowns due to the ERP change in the security business.

New strategy and financial targets – towards 15% EBITDA

In November, we published our new strategy and financial targets for the period 2024–2027. During the strategy period, we aim to grow faster than the market and achieve a significant improvement in profitability, resulting in an adjusted EBITDA margin of 15% at the end of the strategy period. A key change is the operating model shift from a subsidiary-based management model to business areas based on customer needs.

In the past year, our employees have again shown strong professionalism and commitment to serving our customers, and I would like to express my sincerest thanks to them. I would also like to thank our customers and owners; we do our utmost to be worthy of your trust.

Samu Konttinen