Hello and welcome to Vaisala's first quarter 2025 results call. I'm Nina Alalopa from Weisela's Investor Relations and today with me in this call are President and CEO Kai Ostermer and CFO Heli Lindfors. So Kaja Ostema will now present the first quarter results and after the presentation we have time for questions. So hello everybody and thanks for joining. As the headline says, we had a strong start of the year and at the same time obviously when we kind of living through the first quarter, it was an increasing market market uncertainty. There was not almost like a no day without either a rumor or a change or a tweet in terms of what would be the anticipated import duties and so on, which then in the end were not implemented between kind of our relevant geographies during the first quarter. Actually the actual implementation dates only happened in April. So despite all the uncertainty and everything else, direct impact from tariffs were not visible during the first quarter. Obviously then the uncertainty I'm sure impacted our customers and investment decisions somewhat. Despite all that we had like said, on all accounts a strong start of the year, net sales wise and profitability wise, clear improvement year on year wise net sales growth 21% year on year. EBITDA almost doubled year on year or EBITDA percentage almost doubled year on year. Kind of great, great improvements obviously both industrial measurements, excellent performance. I'll go into more details into the business areas and in a short while and on weather environment, a strong order book that we had opening or sort of order book obviously gave us a good start and we continue to deliver against that strong order book. And then on subscription sales, kind of an extraordinary growth on back of both a good organic growth of 12%. And then obviously the acquisitions that we closed now on the fourth quarter, Speedwell Climate and WeatherDesk boosted the subscription sales to 63% year on year. Fantastic number before going into the actual numbers and everything else. It's just good to kind of a pause for a while on our strategy which gives us a great backbone and great foundation to make the decisions even in, and especially I would say in turbulent times. The mission taking every measure for the planet. Being on the right side with climate change I think gives us good foundation to do good solid business decisions both short term and long term. Good examples on execution of the strategy. When we talk about climate and societal resilience, kind of taking different side examples from different sides of the of our businesses. Data centers obviously has been a growth segment or growth business for a long While driven by AI and rapid increase demand on compute power and during first quarter we continued to this has been also a growth segment in our industrial measurements for many years in a row and that continued during the first quarter continuing to drive growth and winning larger projects which typically the new data centers would be. Then when we take the X weather side great to note that we were able to integrate both Weatherdesk and and Speedwell Climate on our numbers already late fourth quarter and now being included in the entire quarter. Actually happy to report also that the entire integration of Weatherdesk is completely done and we did that in kind of several months earlier than what we anticipated it to take and are able to stop the SLAs early also from the previous owner and this gives us a great background strength on further develop on our offering on Exweather and as I said a minute ago helped us to boost the subscription sales growth when we compare to year on year numbers and on more traditional side of the business we continued the success on winning winning large orders this time a weather radar and lightning detection network in Greece in terms of absolute number somewhat smaller obviously than the extraordinary things that we've been doing now during last year and end of the previous year in both Kuwait and Spain. But here great to see another sizable deal giving more longevity in the strong order book that we have on on this and it's a great testament on our technology great testament on our competitiveness of our products and the leadership that we have been showing on weather monitoring infrastructure and in this case especially on the weather radar side. Now when we look at the financials as said strong start of the year orders received wise roughly on the same level as year before order book similar level as what we closed the previous year with and net sales as I said earlier grew very well 21% year on year. If I now take the the acquisitions of Speedwell Climate, Weatherdesk and Nevis that we closed during the fourth quarter and remove that from the growth numbers. The organic growth was very strong as well kind of being 17%. The growth came from both business areas as I will shortly show and very good performance in the Americas region. And this is good to see. This is now fourth quarter in a row where Americas continue to improve as a region. The performance was strong in other regions as well but especially satisfying. See the continued improvement in Americas gross margin improved a little bit over 3 percentage points and as usual with our business cash conversion continued to be strong. Diving deeper into the business areas industrial measurements I would say as the headline says, very positive development across all regions, all segments shown by the numbers, the orders received increased by 70% year on year and net sales increased by 24% year on year. Obviously last year's first quarter was a challenging one. But if you look at the graph on the right, you can see that even in a continuous basis. When you look at the second quarter, third quarter, fourth quarter last year we had a kind of a very strong quarter in industrial measurement in all aspects. Even if the the relative numbers, when you compare to the year on year numbers, obviously we got the benefit this time of week, first quarter last year, great to see also the gross margin improving and the business really scaling nicely. When we get higher sales and also the EBITDA percentage increases correspondingly. And now back on the levels that we should be with the EBITDA percentage starting with a 2 like being 21.7% at the quarter, then looking at the weather environment continue to deliver against a strong order book that we have had and continue to have orders received decreased. This is the one maybe kind of a glass half full on the numbers and the quarter itself. This is really on the back of renewable energy. As we flagged on our release that we are seeing the renewable energy market to decline. And this is on the back of multiple things. One thing is that the continued economic uncertainty and lack of investments into kind of energy intensive green investments requiring lots of energy has been sluggish, leading into competitive energy prices, leading into hesitance on building new energy parks, combined with all the policy changes in the US which put basically the renewable energy investments on hold in the U.S. given all the measures that were taken. So at least for short term, we are seeing a bit of a headwind on the marketplace. That being said, when we look at the long term, we continue to believe that renewable energy, obviously long term remains a very lucrative opportunity despite the short term headwinds. Moving on to the net sales side on weather environment increased by 18% here if I take the organic piece. So take all the acquisitions out which happen to all to be within the weather environment. The organic growth was great, 11% and driven by large orders received during the earlier quarters. So the opening order book that we had and subscription sales, speaking of subscription sales, as said, 63% growth on subscription sales year on year and and boosted by the two acquisitions I talked about as well as then a strong organic growth of 12% gross margin improved mainly following the growth again the business scales and simultaneously we had a good sales mix when we compared to earlier quarters and then previous year quarter, a year before and Then that led into EBITDA percentage being almost 10%. Cash flow continued on a good level here. I would say this is roughly like a usual quarter that we have been having. Obviously the strong cash conversion being one of our strengths and continue to be so also during the first quarter operative result operating result margin being 13%. And when you look at our kind of financial results on this page, you know, it's a kind of almost boring to say kind of continues to be kind of as strong as it has been for for many quarters and many calls that you've listened to before. Net sales growth strong organic Net sales growth strong Gross margin improving, EBITDA improving, EBIT improving. When we compare to the year before and then operating expenses increasing, it's good to note 12% year on year, but that's mainly on a back on the expenses related to the businesses that we acquired in weather environment side and then simultaneously we are doing investments in digital sales channels which we expect to yield into more efficient sales in the coming quarters and years. So important build for future on industrial measurement side and ebit. Oh sorry, EPS earnings per share kind of also increasing strongly compared to same time previous year. Financial position continues to be strong. We are not really a very levered company at all. We have a business model that is very much asset light and and maybe on this page good to note that we have been investing into the automated logistics center here in Vanta next to our factory that is progressing according to the plan. And just as a reminder, the plan is that it should be operational now towards the end of the year in the fourth quarter of this year. Then to market and business outlook. The outlook for 25 we expect industrial side life sciences and power to grow as usual. Meteorology, aviation and roads to be stable. I mean they are by nature that and then as I spoke earlier, renewable energy to decline. Given the headwinds that I talked about. Business outlook for this year remains unchanged. So we estimate our net sales to be between 590 to 620 million euros. And we expect our operating result in terms of ebitda be between 90 and 105 million million euros. Good to remember as usual, these kind of outlooks for the year kind of don't include any drastic changes in the outlook. And maybe that's a good reminder especially in this kind of days when the visibility for the future given what has been going on over the past quarter and past months is maybe especially valid. Valid to say. With that I want to close the prepared remarks and open up for any questions you may have And I noted Nico was the first one well in advance. The book the first question if you wish to ask a question please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial 6 on your telephone keypad. The next question comes from Nico Ruakangas from seb. Please go ahead. Hello, this is Nicarones from scb. Thank you for the presentation. I have couple of questions and I maybe go one by one and starting with declining orders in renewable energy. So could you kind of open a bit your order composition if you compare to last year in terms of how big was the renewable energy? Maybe just thinking that should we expect kind of a similar order declines in weather environment in the coming quarters also going forward? Yeah. So while we don't disclose kind of the exact numbers in terms of the sub segments on our business, but maybe giving you a couple of pointers and color on this. So if you look at renewable energy, you know the, the size of the business is such that the order intake kind of somewhat volatile between the quarters. It's not the same, it's not like by nature not the same between every single quarter and it's relatively fast from book to bill. So it's in between industrial measurements which is very quick and then on the other hand the traditional side of the meteorology which is kind of slow as you know. So this is like in between the two. I would not make the conclusion it's a similar, similar impact on, on to second quarter to rest of the year. The our estimation at the same time is that the market itself, there's a pause on the marketplace at the moment and a bit of a headwind. Headwind size of that headwind we'll see as the year progresses. Okay. Okay, thanks. That helps. Then maybe on the hot topic of tariffs and could you maybe explain a bit how are you mitigating the tariffs and have you already seen the impact of tariffs on your business volumes or demand in April and how have those been taken into account in guidance and then the segment based outlook and I'm sorry if you mentioned this when discussing about the outlook. My line was. Yeah, so so. Yeah, yeah, so so first of all if I start from the outlook, I mean outlook remains unchanged and obviously then everything that we know today is taken into account in the outlook. I mean that's, that's, that's, that's that I will refrain from commenting. How's the business going in April when we are talking about the first quarter numbers and, and, and, and April is Not done yet. So. So it's too early to kind of make any conclusive statements. But the question on how did we meet, how are we mitigating, what are we doing and so on. We were prepared for various different scenarios, 20%, 10% as it ended up being and other scenarios. What we have done and we were very quick on doing is first of all on big part of the business we are able to wear, we are able to move the tariffs into prices and we did it very swiftly. Day after the tariffs were set, the prices changed. And while it's too early really to say how will the market take and everything else, but I'll say this, that customers were not surprised and there was not a by any means. On the contrary, I would say that the customers were expecting a change due to the fact that the tariffs were raised. How will it impact on the demand and sales? Let's take the quarter and see. But I think it's maybe helpful to understand also the dynamic that it's not a pushback from the customer side on it fully. They understand what needed to be done and then other mitigation parts. Obviously I think the organization has shown its agility also in terms of when we know some kind of we have a blanket orders for certain things, we have a long term orders for certain things for the rest of the year in the US we were able to actually kind of ship quite a bit of that into us into our warehouse kind of creating our own hedge on whatever the tariffs may end up being. Okay, I understand. And then if you have orders from the US which were not delivered to the US before the tariffs were announced. So are you able to transfer the kind of increased tariff cost to those orders already in your backlog or do you have to take the heat for those? Yeah, obviously it depends. I mean if you have an ongoing delivery on a customer, kind of a government or public based on a public tender, you know, in a middle of a delivery you can't kind of change prices or it's kind of a new then it's a new complete new negotiation. That's the nature of a public side of the business, private side. You know we had a small short grace period and the prices are effective as of today and have been already for quite some time. Okay, thank you. Then I'll ask one more question and then let others ask. So US government is targeting savings on US national weather services. So is that visible in your business and kind of has this been surprised you obviously like so two comments on that. So yes. So the national Weather Service budget has been cut some extent. It's a bit unclear what that ends up being or the net impact of it is that some projects that we anticipated to start have not been canceled, but have been postponed into the future. When kind of clarity comes, the unclarity comes also from the fact that the US government used a very blunt instrument in reducing cost in terms of personnel. So basically a random cut of people on kind of a irrespective of their seniority or stay in the organization, which obviously if you can imagine in your own organization, if randomly you would pick every third person who gets fired, decision making gets to be a little bit slow and unclear and kind of approval paths and stuff are broken. That's being like the National Weather Service is kind of people who are remaining are working on it. We are supporting them. We know these people for from 10, sometimes even 20 years. And we remain very close to the organization itself. And here's an opportunity to help also the organization to actually do their duty, which is really, really important for the society. Really, really important for the society. Understand. But despite this, you are expecting or taking this into account, you are expecting the material markets as total to be stable. Yeah, of course, of course it's taken into account. Yeah. Okay, great. Thank you. I'll let others ask now, as I said, maybe one more piece. Nico, as a color on the National Weather Service side, we are taking into account what we know today. That being said, given its importance, what kind of the task for National Weather Service is, I would not be completely surprised if some sense at some point of time would come back and the cuts would not be as deep as they kind of at the first go now have been over time. Maybe it is this year, maybe it's next year, but over time. Yes, makes sense. Thank you for that. That's all from me. The next question comes from Ortika from Evelyn. Please go ahead. This is Arte from Ebli Research. Thank you for the presentation. Still continuing on the tariff topic. So how much of the Americas region strong performance in Q1 can be attributed to perhaps front loaded demand ahead of the said tariffs? Not materially. Okay, thank you. Definitely then have you made any decisions already on some products on production or locations going forward now? Yeah, we of course as I spoke earlier, we have looked into various different scenarios, various different levels of tariffs and so on. We are happy with the production network that we have today. Gives us obviously options. That being said, given our high mix low volume business model for many, especially the low volume products, splitting those volumes into two Locations the tariffs should be very high before that makes any sense. Yeah, makes sense. Then on the kind of opportunities also from this situation. So do you think there's any opportunities on the sourcing side, for example cheaper components from Asia or things like that now to Europe. So I don't see. I don't have anything quantified visible yet. But obviously this is something that we are taking a serious look. Same thought occurred to us and given all the changes in the world and uncertainty, obviously we are trying to take the benefit as we usually do in terms of sourcing. Sourcing the components in the best possible kind of place and at the best possible terms and conditions and prices. Yep. Then to other topics. Life science was a positive on the first quarter. How much was it due to a weaker comparable and secondly on that was the development across all of the Life Science customer verticals or were there some that stood out? On the latter one I actually haven't really looked at. I would argue so I better not comment since I have not looked at numbers on the sub verticals. It was partly, I mean if you look at Life sciences has been. We've been talking about stable market for now a little bit over two years. We've indicated I think in this course that kind of early signs in the US towards end of last year now kind of. So part of the. It is partly comparable obviously kind of since the market has not moved for quite some time. But at the same time it's great to see that there's now life in Life sciences as well. Yes. Then on defense, has the increased defense spending across Europe already resulted in stronger demand for your products on this defense side? Not anything to speak of. I mean and I'm not surprised if you think about where the defense spending in Europe is that it's mostly ammunition and tanks and missiles and filling the warehouses with all that weather related things. Probably were not the first ones on the list of military organizations. Can you hear me now? That we had a little bit of a technical glitch. Arto. Hello, can you hear us? Yes, hello. Did you hear my question? Yes, yes, yes I did. Yes I did. Yeah, yeah, yeah I did, I did. Sorry about the glitch. So no marked nothing meaningful in terms of a defence spending increasing or defence orders increasing on our side. I'm not surprised on that at all. The increased defense spending in Europe is concentrated I would argue much more on kind of a hardware in terms of ammunition and tanks and guns and things of that nature. Missiles rather than enabling equipment that what we are producing for the time being anyway. Okay, very helpful, thank you. That was all from me. Thank you. The next question comes from Paulie Lohi from Endeas. Please go ahead. Good afternoon, this is Paulo from Indras and thank you for the presentation. I would go back to the question regarding America's sales and Yuko, you said that it's not materially links to pre ordering the tariffs, but kind of. Do you think that this trend is sustainable and how do you know it? That's a great question. And I don't like nobody does. I mean given the uncertainty in the marketplace, you know, every tweet seems to be moving the market in the U.S. you know, it's so unpredictable that it's very hard to make long term predictions on where the overall industrial activity, gdp, overall spending goes in the us. What is the inflation kind of inflationary impact in US Time will only tell. I mean it's a question of being agile and quick to respond. The opportunities in the marketplace, I think we are pretty good at that. And the only thing I can kind of comment is that the first quarter we didn't see any kind of a. There was not a really a marked pull in impact in the numbers that we were reporting. And then we'll have to wait and see a bit on, on how the performances are going to go in the second quarter and third quarter outlook remains as I said and this is the best view that we have at the moment. Okay, thank you. Then considering the data business that you acquired in 2024, is there significant seasonality in saves for example, similar to your existing data businesses? No, no, it shouldn't be any more even. It should be more even like normal data business. There's no reason to be cyclical. Then my third question is regarding the cross margin. So could you once more elaborate the gross margin and maybe if you have any comments, do you see the current level in Q1 being fairly close to a normal or normalized level? Yeah. So if I look at the gross margin, so the gross margin was good in both sides whether in environment and industrial measurements. You know, as we have seen in the past, continues to be the fact that our business scales very nicely when sales increase, that impacts positively also the cross margin percentage. So that's one thing just as a nature of our business. Similarly if ever the sales would drop, it would impact negatively our gross margin. It's the scaling impact is just something I want to remind you. And then the second thing is there are changes in like between the quarters. If I look at just the historical numbers between kind of what the mix is both in industrial measurement side, somewhat lesser extent, but some extent in industrial measurement side and maybe a little bit more so in weather environment, where how much of the project sales in a given quarter is recognized as bit more of an impact, creates a little bit more variance between the quarters in terms of a mix as such. Okay, but you don't see kind of any big fluctuation in Q1? No, in the Q1, as I said earlier, if you look at where did the improvement come from in industry measurement side improved through the scaling, that is higher net sales, improving gross margin and some extent. Also favorable mix. And then if you look at the weather environment, it really was same thing in terms of growth in net sales, that is scaling and then favorable sales mix that is a little bit less projects and more products in terms of weather environment. Okay, that's clear. Thank you. Within the normal fluctuation between the quarters. Nothing extraordinary per se. Okay, thank you. Thank you. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. So thank you for your questions. Thanks for following. Following our call, just as a kind of recap, it's great to have a strong first call. Quarter behind us gives us good start of the year given especially the turbulence and kind of challenges in terms of reading what the future brings. So it's a good solid ground under our feet and gives us a good position to build the rest of the year as well. So with that, I mean, I'll close the call, you know where to find us in case of any further questions. Don't hesitate, give us a call, drop us an email and we'll jump on another call. Thank you very much.