In brief, the year 2022 could be described in the words of one of our common ways of working: “growth in many directions”. In addition to the financial results, we have also strengthened our offering, expertise and service capability, and we took important steps developing our internal operations and cooperation as well.
Revenue from Loihde’s continuing operations increased by 18% year-on-year and adjusted EBITDA improved by 42%. In both our business areas, we grew at a faster pace than the market, and our profitability is improving with good momentum.
The reason for our growth is, in addition to our organic growth, two significant acquisitions. Turvakolmio that joined Loihde in early summer has strengthened our position in the security technology market, especially in the Helsinki Metropolitan Area and in fire safety services. In our estimation, Loihde Trust is now Finland’s largest provider of electronic security technology services. During the latter part of the year, Turvakolmio has been successfully integrated with Loihde Trust, which we expect will give us scale advantages in the future and hence also provide potential for improving our profitability.
Our cloud expertise was strategically strengthened by our acquisition of Onrego Ltd. Cloud technologies are closely linked to both our security business and our digital development business, since digital development and data projects use cloud platforms and cloud security is one of the fastest growing areas of cyber security. As a new service area, Onrego extends our offering with cloud management delivered as a continuous service. In our financial reporting, Onrego is included in the digital development business area, and in future the company will go by the name of Loihde Cloudon.
The security business grew nicely during the year. In addition to the Turvakolmio acquisition, there was good organic growth in both security technology and cyber security. We are also satisfied with the significant growth of our unique comprehensive One Security service. More and more companies have realised the advantages that centralising security technology and cyber security has for the management of comprehensive security.
We provide services for many critical operators in society, such as the social welfare and health care sector, the Finnish Defence Forces, other public administration and energy companies. In the past year, we made extensive deliveries of personal safety and security and locking systems to large hospital projects, among other things. Of our digital security services, our continuous CSOC 24/7 cyber surveillance service and our IAM consulting grew the most. Also, the demand for security services for customers’ critical OT/SCADA networks has increased, and in relation to this, new customer agreements have been made.
Throughout the year, the global shortage of components hampered many of the customer projects in security technology and cyber security. Thanks to successful project management and precautionary measures related to purchases, our project deliveries did, however, succeed fairly well, and the effects of the component shortage were smaller than feared.
In the digital development business, growth slowed noticeably in the autumn compared to the strong growth in the early part of the year. The most significant reason was that two large customers decreased their purchases, which lowered the utilisation rate and hence also affected the profitability of the entire Group. There is also generally a slight decrease in the demand for digital services due to the uncertain economic situation. However, in the medium term, we do not yet see a change in the market situation, since digitalisation is progressing rapidly and companies want to actively develop their functions to better serve their own customers. The extensive offering of our digital development companies, from digital and data strategy planning to data utilisation, software development, design expertise and cloud consulting, corresponds well to the needs of the customers, and we believe that the IT service area will continue to be a good growth market for Loihde.
Loihde has a unique combination of security, digital development and cloud technology expertise, which enables an integrated service offering that stands out in the market. The cross-selling between Loihde’s companies has multiplied during the year, and customer projects increasingly include experts from two or three Loihde companies. We are also increasingly delivering customer projects as a cooperation between our units in Finland and Sweden.
Artificial intelligence is connected to many of our service areas and we are investing heavily in AI solutions and AI governance development as part of our Loihde AI cluster. Secure and sustainable AI is an important focus area when we develop our AI solutions.
We have simplified Loihde’s group structure by combining some of our subsidiaries into larger units. At the turn of the year, all our other security companies merged with Loihde Trust Ltd. In our digital development business, Loihde Advisory and Loihde Analytics are about to merge and become Loihde Advance. Loihde Factor and Loihde Cloudon will remain separate companies. Characteristic of Loihde is still our network operating model, where the companies’ own strengths and cultures are visible, but we can offer extensive service packages by working together.
I want to thank our customers and owners for their trust in Loihde. We have been able to do some great projects and important work to ensure the continuity of our customers’ operations. All this has been enabled and realised by our skilled and committed top professionals, to whom I yet again want to extend a huge thank you.