CEO's Review
Half-year Report 2025
In April–June, Loihde's revenue was on par with the previous year at EUR 35.2 (35.4) million. Adjusted EBITDA was also on par with the corresponding period both in terms of euros at EUR 2.6 (2.6) million and in relative terms at 7.3% (7.2%) of revenue.
Growth in continuous services
In Security Solutions, growth was achieved in continuous services, such as video surveillance, nurse call systems and the alarm transmission service. Continuous services are a differentiating factor for us in the security technology market, and we believe that the market trends support our service business as conventional security technology solutions become digitalised and customer needs become increasingly diverse. This year, we have won several significant public sector tenders for security technology, but the materialisation of the contracts into orders and deliveries has progressed slower than expected, which had a negative impact on the development of revenue in the second quarter. During the first half of the year, we improved our inventory management, and the balance sheet value of inventories has developed favourably.
We also achieved growth in continuous services in the Cyber, Cloud & Connect business, and we are particularly satisfied with the growth of the Cyber Security Operations Centre (CSOC) and the strengthening of the customer base. We have also seen continued positive development in our network management services. One example of this is the five-year agreement we signed with the City of Turku for a value of approximately EUR 9.5 million. At the same time, consulting services and, in particular, the resale of network devices, weakened during the second quarter and had a negative impact on revenue and profitability. As part of refocusing our operations, we are phasing out certain services that are outside our core offering, which means that the invoicing of continuous services for a few such customers will decrease in the second half of the year and in 2026 as the agreements expire. With regard to our strategically most important continuous services, namely the Cyber Security Operations Centre and the Network Operations Centre, we are confident in their growth potential and we develop these services with a long-term approach.
IT consulting is stabilising, but the market situation remains difficult
The situation in IT consulting has improved as the clear decline in revenue seen in 2024 is levelling off, and revenue for the first half of the year was close to the previous year's level. Nevertheless, our view is that the market remains fairly challenging in the short term. Our invoicing rates have been fairly good and, in certain areas of expertise, the demand has exceeded our delivery capacity. We are actively recruiting experts for these needs. During the second quarter, we signed up new clients for data platform projects and artificial intelligence pilots, for example. In addition, we have renewed contracts and also achieved growth with our largest customers in the financial sector. The AI-based AinoAid application we delivered in 2024 won the European Commission’s Security Innovation Award in June, and the utilisation of AI is a topic in many of our discussions with customers. In terms of profitability, IT consulting has developed in a positive direction, and we expect this trend to continue during the second half of the year.
We are making progress as planned
In the first half of the year, revenue increased by 3% year-on-year to EUR 70.5 (68.4) million. Adjusted EBITDA was EUR 4.1 (4.2) million, or 5.8% (6.1%) of revenue.
During the first half of the year, revenue from continuing services increased by 10% year-on-year to EUR 19.8 (17.9) million, corresponding to 28.0% (26.2%) of total revenue. At the end of June, the annualised contract backlog for continuous services amounted to EUR 40.2 (37.4) million, representing year-on-year growth of 7%.
As a whole, the year has gone according to plan. We have achieved growth in the security business and in continuous services in the area of cyber security and corporate network services, and the decline in revenue from IT consulting is levelling off. Our profit performance is typically weighted towards the end of the year, and we are confident that we will achieve a level of profitability that is stronger than in the first half of the year. In line with this, we are confident that our full-year result will show an improvement in profit performance in accordance with our guidance.