CEO's Review

The strategic acquisition of BLC Turva is moving forward

The acquisition of BLC Turva Oy, which is Loihde's largest-ever acquisition, has been under consideration by the Finnish Competition and Consumer Authority (FCCA) since November. On 27 May 2026, the FCCA conditionally approved the acquisition.

The condition for approving the transaction is that, prior to the completion of the acquisition of BLC Turva, Loihde will divest its local locking business in the regions of South Karelia and South Savo, and BLC Turva will divest its local locking business in the region of Central Finland. The divestments are currently being prepared, and we expect them to be completed during the remainder of the year.

The conditions set by the FCCA have no essential impact on the planned cost synergies of the acquisition, which are targeted at over EUR 3 million, or the other value creation opportunities created by the transaction.

Significant wins in Security Solutions

In the Security Solutions business, the second quarter was a subdued period in terms of revenue, but the strong order book supports a positive outlook for the remainder of the year. Continuous services in the Security Solutions business continued to grow, but the project business fell short of the comparison period's level. During the quarter, we signed several important customer agreements, including a strategically important security solution delivery for a data centre. Dozens of data centres will be built in Finland over the coming years, and their security solution deliveries represent a significant growth opportunity for us.

Revenue from the Cyber, Cloud & Connect business increased slightly in April–June. Regarding continuing services, especially the sales of the Cyber Security Operations Centre (CSOC) has been positive, and we signed customer agreements concerning cyber security monitoring with customers including a critical infrastructure operator and a significant logistics company, for which we will deliver cyber security monitoring of production networks. With regard to the resale of network devices, the quarter under review was good and the outlook for the second half of the year is fairly positive.

IT consulting is still declining, but profitability is at a good level

In IT consulting, the market has remained difficult in terms of new customer acquisition, and revenue from this business area was lower than in the comparison period. The decrease in revenue has largely been attributable to subcontracting, while the billing rate of our in-house personnel has remained healthy. In spite of the decline in revenue, the profitability of IT consulting improved substantially year-on-year and was at a good level in the second quarter. Customer demand for the planning and implementation of AI-native operating models, for example, is growing. However, we estimate that the market on the whole will continue to be challenging through the remainder of the year.

The first half of the year went according to plan – the outlook is unchanged

In the first half of the year, Loihde’s revenue was slightly lower than in the comparison period and amounted to EUR 68.4 (70.5) million. However, adjusted EBITDA improved by 32% year-on-year and came to EUR 5.4 (4.1) million, representing 7.9% (5.8%) of revenue.

Revenue from continuing services increased by 3% year-on-year to EUR 20.4 (19.8) million, corresponding to 29.7% (28.0%) of total revenue. At the end of June, the annualised contract backlog for continuous services amounted to EUR 39.3 (40.2) million, representing a change of -2%. The revenue and contract backlog of continuous services is affected by the phasing out at the turn of the year of a few services that were outside our core offering. Excluding the services that were phased out, revenue from continuing services would have increased by 7% and the annualised contract backlog would have grown by 2%.

Cash flow from operating activities improved clearly and amounted to EUR 5.1 (2.9) million.

The FCCA's review of the BLC Turva acquisition, along with the divestments required by the conditional approval, has been a resource-intensive project and has disrupted Loihde's day-to-day operations. The aim is to complete the required divestments during the remainder of the year and to start the BLC Turva integration project.

As a whole, the first half of the year went according to plan. We expect the second half of the year to be stronger than the first half in terms of both revenue and profitability.