CEO’s review

From a digital commerce house to an industry-independent expert in digital customer engagement

My journey as the CEO began on 1 April 2017. As I stated in my review of the first quarter, we are continuing on the path of profitable growth and internationalisation. We have further defined some policies that will help us reach our strategic objective.

Solteq is an expert in digital customer engagement. We operate in industries where the foundations are being shaken by the digital revolution. Commerce and its related solutions will remain important to us, but now they will be accompanied by other strong mainstays.

One of the new mainstays will be built in the rapidly digitising Utilities industry where efficient use of information is a fast-growing trend. We started this operation by acquiring inPulse Works Ltd on 12 June 2017. As the deal was closed, we made an agreement with Fingrid the same week to have inPulse Works Ltd provide the data conversion service and its related support service for the Finnish Datahub. The Datahub is a centralised information exchange system for the electricity retail market, containing the information of Finland’s 3.5 million electricity use sites.

Our second area of growth is analytics services, which we have started building up in the past year. Our existing competence base in analytics was substantially bolstered by the acquisition of inPulse, as their offering included industry-independent business intelligence and analytics services. We have already invested in the business earlier this year by buying the majority of Analyteq Ltd, who specialise in product replenishment analytics services.

In line with the strategy’s specification, we partnered up with eCraft Oy Ab and sold our Microsoft AX business, customers and personnel to eCraft. The partnership agreement focused our offering of ERP solutions.

Our own software products are a key elements of our organic growth. We will make sure our software products stay competitive in the constantly developing markets. We have started further development of our existing software products to introduce cloud-based operation and to enable them to integrate into a digital customer and operating environment. We have also started the development of new cloud-based software services for the industries where we have strong expertise. From the second quarter onwards, the company will invest between €150,000 and €200,000 in its internal development operations each quarter. Development projects in their commercial phase will be capitalized by quarter, starting from Q3 in 2017.

We will shift the focus of our operations towards the business areas and industries where the digital revolution is having the most impact, and we will develop our own software services to support this policy. Our specified strategy will require enhanced expertise, which is why the management team underwent changes during this quarter. Matti Djateu was named the Chief Digital Officer, who will be responsible for our digital marketing service business and Solteq’s marketing. Juha Rokkanen was appointed as the Executive Vice President of the Digital Services business unit.

Solteq’s offering has worked well for our customer base. I am satisfied by our sales performance in this quarter. The company netted many more new sales in the review period than we did at the same time last year.

During the review period, we have completed significant projects in the commerce sector and are happy to see satisfied customers. As large projects are completed and move to the continuous business support and maintenance phase, our role in these projects is changing which may have a temporary negative effect on the revenue of these business areas. Thanks to our excellent sales performance, I strongly believe that our strategic goal of profitable growth can be met.

Our business has a solid foundation in the skills and competencies of Solteq employees. We have already broken the news that we will be recruiting 100 new employees in 2017. We are on schedule with the hiring.

We will maintain our earlier guidance concerning the adjusted operating result for 2017.

CEO Olli Väätäinen, Solteq Plc

Olli Väätäinen
CEO, Solteq Plc
+358 50 5578 111
olli.vaatainen@solteq.com

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