CEO's Review
Business Report Q1 2025
In the first quarter, Loihde's revenue increased by 7% year-on-year and came to EUR 35.2 million. Adjusted EBITDA was EUR 1.5 (1.6) million, or 4.3% of revenue.
In the early part of the year, profitability is typically lower than towards the end of the year – in this respect the year started as expected. The profitability of the first quarter was affected by the change in the payment schedule of the sales bonus model and fluctuation in product mix. We are, however, confident that the company’s profitability will improve for the full year.
Security and network services grew as planned
Our Security Solutions business unit continued to grow well, both as continuous services and project deliveries. We won new customers in sectors such as manufacturing, trade and public sector, examples of which are significant multi-year frame agreements concerning security technology with Finnish Customs, Defence Properties and Senaatti Properties. The relevancy of IT competence is growing in security technology implementations, and this strengthens Loihde’s competitive edge as our network and cyber services support physical security solutions. Overall, the demand for security solutions has been solid, but price competition has increased.
The year has started as expected also in cyber security and corporate network services. Especially, 24/7 Cyber Security Operations Centre CSOC and Network Operations Centre NOC have showed good growth. We have signed several new agreements with operators in sectors such as manufacturing and energy.
Decline in IT consulting has levelled off but uncertainty continues
In IT consulting, which makes up about a quarter of Loihde, the revenue nearly reached the year-on-year level. This means that the decline in revenue that continued through the last year levels off. In our view, the market will continue to be quite challenging at least until autumn, and if the common financial uncertainty continues, significant recovery in the market may be postponed to next year. Loihde has a strong position as a partner to its largest customers, especially in sectors such as finance and manufacturing, and these customer relations have continued to strengthen. In addition, we have achieved success e.g. in the energy sector, where we have delivered solutions of, for instance, data management and analytics.
Enhancing competitiveness by reorganization
At the beginning of the year, we conducted change negotiations that affected a large part of the company's personnel and led to 35 redundancies and 10 lay-offs. Part of the deductions are implemented through pension or other arrangements. The most significant reorganization is the merger of the Data & AI and Digital Services business units, which provide IT consulting. The merger was completed at the beginning of April.
Overall, the year has started as expected. We have continued to grow in continuous services in physical and cyber security as well as in corporate network services. Project delivery business in Security Solutions has been going well, and the order book has developed as expected. In IT consulting, the results have improved from last year, but the market outlook is still uncertain. Possible scenarios of trade war can add uncertainty to customers’ procurement decisions and impact all business areas of Loihde.