Added depth to ownership and partnership
The year 2020 was different and unique in many ways. The period was characterized by a continuous and close dialogue between organizations.Read more
CEO Tapio Tommila:
Our segments tackled the challenging situation quickly and successfully.
These extraordinary times turned the spotlight on short-term goals in an unprecedented manner. As was the case with many other companies, we, along with our segments, initiated measures to protect our staff and adapt our operations. Measures were also taken to secure the financial situation of our segments. We sought to resolve practical challenges together, identified risks and found new opportunities. Our role as an active owner and engaged partner deepened and expanded.
Our segments tackled the challenging situation quickly and successfully. People were exceptionally committed and flexible, ensuring that concerns never overcame the will to make things happen. In fact, several of our segments came up with entirely new innovations during the year and took larger leaps toward digitalization than were originally planned. Each one of our companies has grown throughout the year in terms of both expertise and vision. This lends us the confidence to take action in a world that is changing at an accelerating pace.
Our basic mission is to support the implementation of changes and expedite growth. During the financial period, our segments also successfully and extensively advanced these development projects, despite the challenging situation. Hygga, the dental clinic with a new service concept, won the competitive bidding for the City of Helsinki’s outsourced services, and the development of Hygga’s international business operations progressed. Gugguu took new steps to expand its international business and strengthened its efforts to increase its online presence. Software service company Oscar made significant progress in the development of its Cloud solutions. Design services company CoreHW, on the other hand, continued to develop its proprietary products toward market launch.
Despite the challenging situation, we have been able to push development projects forward extensively.
The net sales of many of our segments declined significantly as a result of the coronavirus crisis. The business operations of Grano and Carrot suffered the most dramatic impacts. Hygga’s clinic business was another victim of the changed circumstances. However, comprehensive adaptation measures lessened the impacts on profitability significantly, and overall the operational EBIT for the financial period remained at the level of the reference period. Thanks to a series of active measures, all of our segments are positioned well for the coming year. Naturally, uncertainty about the future is making forecasts substantially more difficult than before.
During the previous financial period, our investment portfolio was updated through three corporate acquisitions. In April of this financial year, we sold the share capital of Tilatukku Group, which has been one of our segments for eight years and enjoys a strong market position, to the company’s acting management. This was the right time to divest.
At this stage, the coming financial year appears vastly different from those before it. The fog that hangs before us remains thick and seemingly impenetrable. That being said, last spring taught us that we are perfectly capable of adapting to a variety of situations and finding solutions at a rapid pace.
We will continue to carry out our basic mission and actively explore new investment opportunities. The competition for new investments is fierce, but the market still holds plenty of good opportunities for us. The rate of change in the various operating environments is accelerating, which is further broadening the opportunities of our kinds of companies to support the growth of other businesses. We must maintain our readiness to react but still have the courage to invest in the future.
I would like to thank the staff of Panostaja and our segments for their hard work and commitment. I also wish to extend my thanks to our shareholders for their trust – we will continue our long-term efforts to increase shareholder value.
Companies we want to invest in
We want to help businesses reach their full potential and work with them to build success stories. We are an investment company that owns and develops unique SMEs. Investing in growing and unlisted Finnish SMEs is appealing to many, and we can offer a good channel for this through our segments.
We are actively looking for companies that have the enthusiasm and drive for continuous development. When a company has the finances and growth potential, Panostaja can help it climb to the top of its field. We consider identifying growth potential and facilitating growth, as well as ownership, to be the responsible and long-term efforts needed for success. Our basic mission is always to generate value as a responsible owner-partner, accelerating growth and the implementation of changes.
“We invest in growing Finnish companies that have already demonstrated the feasibility of their operating model.”
Our operating method
Why invest in Panostaja?
We increase shareholder value by developing and supporting the growth of our segments. Our aim is for the company’s value to have clearly increased once we divest it. We base our operations on continuously increasing shareholder and market value. We have succeeded when the overall yield of a share exceeds the average long-term yield of the Nasdaq OMX Helsinki Small Cap Index.
Earnings potential of unlisted companies
- Unique liquid channel for investing in growing Finnish SMEs
- SMEs have high earnings expectations
Decentralized and balanced investment portfolio of growing SMEs
- Ownership is distributed to several companies in different fields of operation and different stages of growth
- Fluctuations in demand in companies’ fields of operation partly balance one another
Active value creation
- Evidence of value creation in the SME sector as an active owner
- Tested operation model. Over 30 years of experience in SME development
- Management systems, development processes and tools that support value creation
The past financial year and outlook for 2021
The financial period November 1, 2019–October 31, 2020 was in many ways extraordinary due to the uncertainty caused by the coronavirus outbreak. Despite this, Panostaja furthered its development projects and strengthened its role as an active owner.
Niko Skyttä was appointed as Panostaja Oy’s CIO and member of the Senior Management Team in March 2020. Skyttä has been working for Panostaja since 2011.
In April 2020, Panostaja sold the majority of Tilatukku Group Oy’s share capital to the acting management. Through this transaction Panostaja divested its entire shareholding in Tilatukku Group Oy.
Outlook for 2021
As regards the demand of Panostaja’s segments, there are many uncertainties relating to the possible escalation of the COVID-19 pandemic. The worsening effects of the outbreak may particularly affect the business operations of Grano, Carrot and Hygga.
The demand for CoreHW and Oscar Software is good. Both companies operate in a market that is expected to see positive development.
The demand for Grano, Hygga, Helakeskus and Heatmasters is satisfactory. For Grano and Hygga the operating environments are challenging, as both companies are in the process of operational reform to make it easier for them to respond to changes in the operating environment. The main challenge for Helakeskus is the possible shrinking of the overall construction market in 2021. Heatmasters has an opportunity in focusing on internationalization even more than before.
The demand for Carrot is poor. The field of staffing services is very sensitive to fluctuations in economic trends and their impacts.
The demand for Gugguu has remained good. Gugguu will seek growth through the internationalization of online business.
As regards the corporate acquisition market, plenty of opportunities are available and the market is active. The need to leverage ownership arrangements and growth opportunities will persist for SMEs, but the high market liquidity and increased price expectations of sellers are making the operating environment more challenging for corporate acquisitions. Panostaja will continue exploring new possible investment targets in accordance with its strategy and assess the preconditions for divestment as part of its segments’ ownership strategies during the financial period November 1, 2020–October 31, 2021.
Panostaja and its segments employ almost 1,600 professionals. Even though the total net sales of Panostaja’s segments dropped by 13% from the reference period, profitability was maintained despite the onset of the coronavirus pandemic in the spring, thanks to quick reactions and cutbacks among the segments.
The profit and loss figures for the financial year include goodwill of EUR 3.3 million impairment (excluding discontinued operations).
(2019 182.9 M€)
Profit/loss for the financial period
(2019 2.5 M€)
Profit before taxes
(2019 1.9 M€)
(2019 3.8 M€)
(2019 40.8 M€)
Profit/loss from continuing operations
(2019 0.6 M€)
Profit/loss from sold or discontinued operations
(2019 2.0 M€)
Earnings per share, undiluted
Equity per share
Our Business Segments
Panostaja’s segments are growing and unlisted Finnish SMEs. Continuous development is something shared by each one of our segments. This is why our segments are companies that are genuinely appealing investments.
CoreHW brings unparalleled precision in indoor positioning to the international market
CoreHW has made significant investments in developing a new product for the international market.The product is a microchip component for a Bluetooth indoor positioning system. Later in the year, CoreHW’s evaluation solution for indoor positioning technology was delivered to numerous international customers. What makes the product unique is the technology it contains, which enables more accurate positioning than ever before in indoor environments. The customer feedback for the product has been positive, and negotiations regarding extended deliveries have been initiated with multiple customers. Through its products, CoreHW demonstrates the ability to bring entirely new technology to the international market. The demand was also strong for the design services, and CoreHW began collaboration with three significant new customers during the financial period.
In the spring, the coronavirus emergency temporarily forced all CoreHW staff to work entirely remotely. However, working remotely suits the nature of the company’s specialist tasks very well, which ensured that work efficiency remained impeccable. The pandemic imposed a set of unique challenges on sales efforts, too. Travelling became more difficult and several international trade fairs were cancelled. This partially slowed down CoreHW’s efforts to gain new customers. Still, customer satisfaction remained as high as it can get – the rating has been a full 100% for four years running.
The most inspiring workplace brings top specialists together
CoreHW currently employs more than 70 top-level experts in microchip and antenna technology. At least 90% have a master’s degree in engineering, and roughly 25% have a doctorate. The company has succeeded in creating a work environment that is pleasant and efficient in every way. The achievements are reached through people and teams. In fact, the company was acknowledged as one of Finland’s Most Inspiring Workplaces in the category for small organizations. CoreHW employs both veterans in the field and young upcoming talent. Everyone has a strong shared desire to develop world-class solutions that leverage new technology. The company and its staff have gained more confidence in their own products, thanks to the experiences gained throughout the successful year.
The year was good for CoreHW. The planned development measures progressed well and the company grew on many fronts. The Group’s net sales were 40% higher compared to the previous season. The recruitments succeeded well and the company gained 11 new team members.
Year of investment
Pioneer in children’s clothing invests in online trade
For Gugguu, the year 2020 got off to a good start, but the impacts of the coronavirus crisis on the company’s business became apparent very quickly. Gugguu did not waste time tackling the situation and proceeded to develop measures to ensure demand despite the challenges. Because the Child Fair event planned for April was cancelled, Gugguu organized a variety of online trade events for consumers. Investments were also made in digital marketing campaigns. These measures were effective, and the company’s net sales have increased in the autumn. Overall, Gugguu’s net sales dropped slightly in the financial period, especially due to the declining number of retailers.
However, online sales have increased consistently, which has been extremely important for Gugguu’s business. The coronavirus situation sped up the process of opening Gugguu’s updated online shop. The company has also made efforts to develop Gugguu’s online business significantly in other ways. At the moment, the company gets 82% of its net sales from online trade, 9% from outlets and the remaining 9% from retailers. Online trade has increased by 30% in Finland and by 51% abroad. In terms of net sales, the share of international customers stands at 7%.
The company is moving forward on its path toward internationalization, and the measures planned before the coronavirus to gain new customers in relation to sales and marketing have now been made entirely digital. This will slow down Gugguu’s internationalization somewhat, especially in countries where the company is not known well or at all. In Europe, consumers in Germany and Sweden, among other countries, have expressed interest in Gugguu’s products.
Products that can take years of wear and washing, and last from one child to the next.
Responsibility is at the core of Gugguu’s operations, and customers also expect the company to be extremely responsible. That is what the company is known for. In 2019, Gugguu developed its responsibility reporting arrangements, and in early 2020 it published a responsibility report as well as a report on ethical principles. In September, the Pro Ethical Trade Finland association published its annual report for 2020, which reviews the responsibility reporting and transparency of Finnish clothing brands. Gugguu placed in the second best category of the report, which is the company’s best ranking ever.
The outlook for 2021 is positive. Gugguu’s special focuses are breaking new ground and achieving international growth. In Finland, Gugguu’s responsible brand is well known and demand is increasing. Consumers have become very aware and are making choices based on responsibility. In marketing, a communal and customer-oriented way of engaging in dialogue with consumers is characteristic of Gugguu. It wants to provide its customers with experiences. A variety of cooperation models based on partnerships will also be deployed in 2021.
* In contrast to Panostaja, Gugguu’s financial period is April 1, 2019–March 31, 2020
Gugguu’s second year in Panostaja’s portfolio has included a massive amount of development, and many ongoing development measures took significant leaps forward. Internationalization and laying the foundation for growth were the focuses throughout the year.
Year of investment
Giant leaps toward reinvention
At the start of the financial period, demand was at a good level for all product lines and subsidiaries. When the coronavirus crisis began in mid-March, Grano successfully adapted its expenditures to match the order volumes that had declined by 30% on average. The average order price increased correspondingly at the same time, so Grano’s actual net sales turned out higher than expected. Demand dropped primarily for sheet printing, large-scale prints and the subsidiaries Grano Digital Oü and Grano Diesel Oy.
The company made giant reformative leaps amidst the crisis, creating a new group strategy, launching more than 10 coronavirus protection products and piloting an agile operating model for sales and marketing, among other efforts. One of the most significant coronavirus protection products was the protective apron development by Grano in collaboration with experts from the Ministry of Social Affairs and Health. So far, more than 1,000,000 protective aprons have been delivered to health care providers.
Significant customer value now and in the future
Grano’s shift in focus from products to services is at the core of the company’s new strategy. The most substantial difference from before is the transition from a hierarchical management system to shared leadership and from production economy to customer economy. The new strategy will enable Grano to generate significant customer value now and in the future.
Marketing communications as a market will grow in the long term. This provides a wealth of opportunities to Grano as a versatile expert in marketing communications. In the short term, the declining paper-based communications market, in particular, presents a challenge, but Grano has plenty of potential to seize market share from its competitors.
Grano is entering the 2021 financial period from a position that is stronger than anticipated. The significant reforms initiated in the autumn of 2020 will be completed over the course of the financial period. The changes will enable Grano’s growth far into the future. The operating environment will remain unpredictable and challenging. Thanks to the new structural arrangement and shared leadership, however, Grano will be able to react more quickly to changes in the operating environment and help its customers achieve impactful communications despite the changing world.
The strong commitment and flexible approach of the Grano team has resulted in the end result for the 2020 financial period being better than expected. Customers trust Grano, and the feedback they provide helps develop the company further every day.
Grano’s financial period was successful despite the challenging conditions. The largest leaps in growth were seen in software, translation services and illuminated advertisements. The group’s net sales dropped due to the coronavirus pandemic and the decline in sheet printing. Net sales for other product lines primarily either increased or remained at the level of the previous financial period.
Year of investment
Integrating an ecosystem approach into Oscar’s operating methods
In the spring, the coronavirus impacted the company’s business and adaptation measures were needed in the form of lay-offs, for example. Later in the spring, a growing trend was once again achieved, and new recruitments were initiated.CEO Riikka Kivimäki assumed her position in August. Toward the end of the financial period, the Oscar team in Tampere moved to new premises. The state-of-the-art premises support a modern way of working under a hybrid model. The increased number of group work spaces at the new location enables more efficient collaboration with in-house staff, customers and other parties.
The coronavirus emergency forced Oscar to reconsider its processes, which led to increased efficiency in customer projects. Customers’ changing needs generated a demand for different kinds of products. For example, new online shops springing up during the coronavirus crisis led to increased demand for the Oscar eCommerce suite. The shift in demand also changed the direction of product development to some extent. The outlook for 2021 seems bright. The market is expected to continue to develop favorably despite the unstable situation.
The operating environment is changing, and Oscar is a firm believer in an ecosystem approach, which involves closer cooperation with partners, customers and other interest groups. Within these ecosystems, information is shared freely and the ultimate goal is always to provide the best possible end result for everyone involved.
Committed employees provide an excellent customer experience
Oscar’s most important resource are its employees. Over the course of its second full financial year in Panostaja’s portfolio, Oscar has done well in utilizing the services offered by Panostaja to improve employee development and well-being. In 2021, Oscar will focus on developing the customer experience. Many of its internal development projects are specifically focused on improving customer satisfaction, which is an endeavor in which people play the most important role.
Oscar’s net sales and EBIT increased, and the company’s strategic projects progressed. The product development of the business platform took a huge leap forward. The advanced product combines systems that steer the operations of companies and is aimed at SMEs.
Year of investment
A year of massive deals and challenges
The coronavirus crisis had a significant impact on Hygga’s clinic business during the financial period. The company’s net sales plunged in March-May, which necessitated a range of adaptation measures. However, Hygga is entering the new financial year in a strong position.
In March, Hygga won the City of Helsinki’s competitive bidding for oral health services. The three-year contract for outsourced services will begin on November 1, 2020. In June, the turnover for Hygga’s clinic business began to increase, and July was exceptionally busy. The situation has remained good through the fall season. Toward the end of the financial year, Hygga initiated a new extensive round of recruitments of oral health care professionals in relation to the contract for outsourced services. The contract will increase Hygga’s annual patient visits by about 40,000.
In September, it was announced that Hygga’s licensing segment is involved in the Aster project managed by the Central Finland Health Care District. Aster aims to develop a new information system for social welfare and health care professionals to combine basic health care, specialized health care and social services. Within the scope of the project, Hygga is responsible for providing a patient information system for oral health care and supplying the Hygga Flow ERP system.
In terms of international licensing business, Hygga Flow has been adopted in the Netherlands and Sweden. Italy and Switzerland have also been interested. However, the coronavirus pandemic is currently slowing down the company’s internationalization and customer acquisition efforts. Many important trade fairs have been cancelled or postponed indefinitely due to the coronavirus crisis.
Wastage in health care is an opportunity for Hygga
For Hygga, the coming financial year looks good but challenging. Next year’s net sales are expected to increase as a result of recently-made contracts. Hygga is strengthening its position as a trailblazer in the development of digital systems and services for the health care sector.
The coming financial year will require the organization to have the capacity to do things in entirely new ways. Hygga is now focusing its attention on ensuring controlled growth and engaging the entire organization, including new and existing employees, to helping the company achieve it.
Hygga has identified the wastage generated in the context of health care processes and decided to seize the opportunity. The company’s operating model enables reacting to changes in the operating environment quickly, providing an efficient solution for working through long waiting lists and managing customer flows in health care in a comprehensive manner.
Over the course of the year, Hygga, which also turned ten years old as a company, managed to drive its strategy forward substantially. Hygga decided to boldly seek growth opportunities for its licensing business in the basic health care sector. Pilot projects are currently under way in Rauma and Porvoo. Hygga also developed product and service solutions as well as its clinic and licensing business for the domestic and international markets.
Year of investment
Carrot’s year full of changes and speedy development
The field of HR services reacts to changes in the economy very quickly. This is why the coronavirus has had a significant impact on the HR services field and Carrot’s business operations. Over the course of the financial period, Carrot also conducted adaptation measures, which have positioned it well for the coming financial period.
The coronavirus situation in the spring accelerated Carrot’s development, especially in terms of digital aspects: among other efforts, the entire recruitment process was digitalized. In August, these agile development efforts progressed to a phase that involved piloting the company’s own mobile platform. Going forward, Carrot will shift its operations toward the platform economy, enabling customer orders and job offers to applicants through the proprietary platform, for example. Digital development at Carrot will continue, as the values at the core of the company’s operations are customer experience, automation, artificial intelligence, digital solutions and mobility. In the years to come, the company will continue to seek growth through new services that can be scaled to generate significant growth.
Partner to job seekers and businesses amid the shift in working life
Carrot aims to meet the changing need of the expanding sector especially by developing its services and solutions. Work methods are changing, and an important aspect in the context of this shift is to identify the changing values of job seekers. Among other things, the significance of work has been put into much starker relief than before. The employment sector needs new ideas and partners to ensure that job seekers and employers find each other. Carrot expects growth from the coming financial period. The most substantial changes have now been made, and Carrot has stepped onto a path of continuous learning and development together with its staff.
Carrot is a swift, caring and responsible partner in employment that aims to ensure a good and satisfying working life for everyone. The structural change implemented by Carrot in 2019 shifted the focus of its operating model toward job seekers. In 2020, even stronger efforts were made to put the operating model into practice across a variety of fronts. The results of these efforts to enable growth and change are now clearly apparent in Carrot’s day-to-day operations.
Year of investment
Our growth comes from internationalization and value-added services
Despite the challenging situation, Heatmasters succeeded well in its business operations during the financial period. Net sales remained almost at the level of 2019, and profitability increased by a few percentage points. Business remained profitable thanks to the adaptation measures, which were initiated earlier and continued in the spring due to the coronavirus crisis, as well as staff flexibility in Finland and Poland.
General uncertainty in terms of investments cut into equipment trade on a global scale. Travel restrictions resulted in deployments and maintenance being postponed, and the large-scale plant outages planned for the spring were delayed. That being said, the impacts of the first phase of the coronavirus pandemic were smaller than expected, and the company is now well positioned for the coming year. A number of significant sales helped the company’s order book recover. One example is the order made by Andritz Warkaus Works, which involves tempering the components of a soda recovery boiler to be installed in a pulp mill in the state of São Paulo, Brazil. The heat treatments and related added-value services were completed at the Heatmasters Varkaus service center in the spring and summer of 2020.
Exactly zero work-related accidents during the financial period
There were plenty of causes for celebration over the course of the year. Heatmasters’ service center, which currently operates in Będzin, Poland, turned 25 years old. In addition to this, the company reached an important milestone by keeping the number of work-related accidents at exactly zero. The continuous improvement is one of the cornerstones and most important goals in Heatmasters’ operations.
The future prospects in terms of internationalization are good. Heatmasters’ competitive and proficient team in Finland and Poland, as well as the company’s high-quality products and services, provide a solid foundation for the efforts. Investments into product development continue, and the integration of equipment into constantly developing production automation solutions have increased. Furthermore, strong efforts are being made to develop the tools for marketing communications further to make larger markets available to Heatmasters.
Heatmasters continues its internationalization while focusing increasingly on producing value-added services that support its customers. Over the course of the year, Heatmasters directed its product development investments mostly on the further development of gas heating technology and temperature adjustment systems.
Year of investment
The digital lessons learned in the spring are here to stay
The coronavirus outbreak in the spring and the discontinuation of the brokerage of consumer light fixtures dragged Helakeskus’ net sales down. Business remained profitable, however, thanks to careful cost management and a wide selection of products, in particular.
In March, the coronavirus emergency forced Helakeskus to temporarily halt customer visits, which are very important for its business operations. All contact with customers and clients was primarily handled remotely. The experiences were surprisingly good, and Helakeskus took a step toward digitalization. After the holidays, customer visits were resumed, but the digital lessons learned in the spring are here to stay.
Helakeskus wants to provide its customers with the best and most extensive product selection possible. As a result, Helakeskus introduced a variety of new products over the course of the year, including a selection of light fixtures, basins and handles. Customers now have even better opportunities for finding more products to suit their needs. The new website was opened in September, and the online shop will be launched in 2021.
Excellent service, a wide product selection and competitive prices lay the groundwork for a good customer experience
The coronavirus crisis is still casting a shadow of uncertainty over the coming year. That being said, the current market demand is moderate. Helakeskus is continuing its development measures, and the company is internally focusing on updating its ERP system.
Helakeskus believes in solid brands, high quality and the functionality of products. The persistent goal is to improve the profitability of the company’s customers by means of a competitive product selection and the right product solutions selected with help from Helakeskus’ expert staff.
In terms of construction, the total market is expected to shrink slightly in 2021. The coronavirus situation is also adding to the general uncertainty. However, there is still plenty of construction in Finnish growth centers, which provides plenty of opportunities. Helakeskus is well-positioned for the coming year.
Opening a new website and ending the brokerage of consumer light fixtures were among the most important events for Helakeskus during the financial period. The decisions indicate a tighter focus on product selection and an increase in the significance of digitalization in terms of the company’s business.