Creating new opportunities

Updated strategy supports growth 

Oscar’s most important themes of the year revolved around strategic efforts, reorganizing operations and fixing up processes. The software company, which gained a new CEO in the spring, is now operating at an excellent pace. In terms of technology, Oscar took substantial strides toward becoming an SaaS provider according to its plans. Even so, the period was financially challenging.

The revitalization of the software sector’s labor market after the coronavirus pandemic caused some changes in personnel. The departure of some experienced professionals had a negative impact on the company’s result, even though the company was successful in recruiting new experts. The changes in personnel had an inevitable impact on Oscar’s bottom line, which fell short of the target. The uncertain global situation and the war in Ukraine were also mirrored by customer activities, and more thought was put into new investments. On the other hand, the possible return of some industrial operators to Finland will provide new growth opportunities for the company.

Praise for the strategic efforts

Oscar’s updated strategy has been well received by the personnel. An even more transparent organizational model, which defines responsibilities very clearly, has also been drawn up to support it. The sales processes were fixed up during the year, and attention has been paid to sales management to ensure a sufficiently broad clientele. The efforts to improve processes on many fronts will also boost the company’s profitability.

In addition to active board work, Panostaja’s support has been evident in the updates to Oscar’s financial reporting, for example. The sparring support for HR management has also been very helpful. Panostaja’s strategy emphasizes responsibility, which shows in Oscar’s operations. Software solutions are being developed for automating processes and eliminating wastage, which results in decreased environmental impacts. For a software company, it is also important to consider responsibility with regard to personnel, which is why plenty of attention is paid to the capacity of employees, for example.

Lofty goals for 2023

Oscar has lofty goals for the 2023 financial period, which are supported by the updated strategy and organization model. The company is well-positioned, as it currently has the best understanding on the market of the needs of industrial operators. The development of SaaS expertise provides a lot of new opportunities. The outlook is extremely positive, provided that there are no substantial changes in the operating environment. 

Year of strong growth

CoreHW had a good year for both design services and the component business. In terms of design services, the financial situation recovered to the 2020 level after the COVID-19 years. The number of automotive customers increased the most thanks to the company’s investments in 2020–2021 – at the time, capacity was freed up from customer projects. The development of automotive customers is seeing strong global growth due to technological trends and challenges with the availability of semiconductors, so the outlook for 2023 and 2024 is very positive.

In the component business, the year 2022 was a significant turning point: demand turned to a substantial climb especially in the American and Japanese markets. This was thanks to CoreHW’s unique indoor positioning technology. Based on customer feedback, the Bluetooth positioning technology is the most precise and reliable in the world – so good that customers now have the confidence to develop their own devices and systems with CoreHW technology. The company has significant customer accounts and future potential, especially in the US.

Panostaja provides support for financial challenges

Even though the past year was good, the losses of 2021 continued to impact cash management. As a result, CoreHW received substantial assistance from Panostaja to overcome temporary financial challenges. Over the past five years, Panostaja has helped the company in many ways to grow from a small company to the next level, particularly with regard to the activities of the Board of Directors and management teams. Panostaja has also provided CoreHW with the training it was looking for on project management, for example.

In 2023, CoreHW will continue implementing its long-term strategy. At the moment it seems clear that indoor positioning technology is taking over the world. It is difficult to predict the time frame for the new technology, but positive development will be seen in the coming years. Many customer companies will still be developing their own products in 2023, but it is to be expected that the technology will be widely adopted in the following year.  

International markets open for the Hygga Flow operating model after the coronavirus pandemic  

The long period of coronavirus restrictions has delayed the establishment of new customer relationships in the software business. The easing of the COVID-19 pandemic in the fall of 2022 has opened up the software business markets. Two new clinics in Sweden and one in the Netherlands began using the Hygga Flow operating model in the fall. Next year, the operating model will be deployed at two additional clinics in Sweden. 

The pilot of the Hygga Flow model in the municipality of Lindesberg in Örebro County, Sweden, was successful, and the collaboration was expanded to cover new clinics in the fall of 2022. The Hygga Flow operating model managed to eliminate the waits for oral health care almost entirely. Before the model, customers were at times forced to wait for appointments for more than two years.  Other benefits gained by Lindesberg included not needing to cancel appointments due to the absences of clinical workers, as patients could now be assigned to other professionals very easily.  

In Finland, the coordination of the wellbeing services counties delayed the establishment of new customer relationships. The cooperation with the City of Porvoo will continue in basic health care, and the operations will be expanded to the Wellbeing Services County of East Uusimaa. The Wellbeing Services County of Ostrobothnia also kicked off an oral health care pilot project in the autumn.  

The clinic business is recovering 

As regards the clinic business, the development of net sales and profitability in 2022 was encumbered by resource challenges related to the outsourcing services agreed with the City of Helsinki, the majority of which resulted from the extraordinarily high number of absences due to the coronavirus pandemic. In addition to this, the profitability of the outsourcing business has been weakened by the increased costs. Fortunately, the impact has been successfully transferred to prices starting from the end of 2022, as a result of the contractual price adjustment. Otherwise, the company’s clinic business saw positive development and grew substantially compared to the previous financial period. Over the course of the period, the operations recovered close to pre-COVID levels and the development has continued on an upward trend. In addition to this, efforts were made in the latter half of 2022 to increase Hygga’s visibility in Finland and the international markets through participation in significant events in the field. 

Panostaja supports growth and responsibility 

The dialogue with Panostaja remained excellent during the past financial period. For example, the Management Forum organized in the fall, the active board work and support for the operations management have been valuable forms of cooperation. Panostaja has strongly supported the expansion of Hygga’s software business. This year, special attention has also been paid to responsibility with regard to the staff and the environment. The Hygga Flow operating model reduces travel needs among patients and the use of disposable materials. In Örebro County, Sweden, the municipality of Lindesberg won an environmental award, in large part thanks to Hygga Flow. 

The coming year is very promising 

The year 2023 looks extremely good for Hygga, and the growth of the software business is supported by the new customer relationships gained at the end of 2022 as well as those acquired through existing contracts. Multiple new projects are about to begin, as the Hygga Flow model will be deployed at the AZ Delta hospital in Belgium for specialized medical care and new oral health care agreements are being forged in the Netherlands. In Finland, the opening of the wellbeing services counties will provide new opportunities. The growth of the clinic business is expected to continue in the year following the economic downturn. 

A varying year for Grano

The sale of the SokoPro business operations to the Swedish iBinder company in February enabled Grano to focus on developing added-value services for marketing communications in accordance with its strategy, thanks to a stronger financial position. The sale price of the divested shares was approximately MEUR 45.5. Still, the company’s profitability for the financial period fell short of the target. At the beginning of 2022, Kimmo Kolari was appointed as the CEO of the company. He had already served as the acting CEO for the preceding fall season.

One of the highlights of the financial period was the opening of a 15,000 square-meter factory in the Koivuhaka district of Vantaa. The factory combines state-of-the-art technology, traditional craftsmanship and a strong belief in Finnish work. The coronavirus pandemic impacted Grano’s business operations for the early part of the financial period. The demand recovery was also slowed down by the war in Ukraine, which broke out in the spring. Despite the difficulties, the market recovered in April, and demand normalized during the summer and early fall. That said, Grano’s profitability fell short of the target level due to increased material costs and the decline in demand early in the year. 

Specified strategy brings focus

Grano’s strategy emphasizes a customer-oriented approach and value creation. The company wants to continue providing comprehensive marketing communications solutions from content production and translation services to turnkey deliveries. Panostaja has supported Grano with strategic efforts as well as market and competitor analysis, for example. The cooperation has also been close with regard to board work and sparring related to financial and HR matters.

Leader in its field in responsibility

Grano wants to be a trailblazer in its field in terms of responsibility, which is why it prepared a responsibility strategy in 2022 and is measuring its implementation regularly. One of the goals is to ensure that Grano uses only renewable sources for electricity and heating by 2025. The responsibility efforts take a wide variety of matters into account, and they cover business profitability in addition to environmental factors and social responsibility.

Winds of change persist

At the beginning of the new financial period, Grano will be updating its organizational structure. The new organization will expedite decision-making and the deployment of practical measures. It will also support the implementing of the updated strategy. Grano now has an excellent foundation for success, but the uncertainties of the operating environment may impact its result. The company is developing its own operations and wants to shape the entire field at the same time. The bar has now been set higher than ever before, and the operations are being modelled after the best operators in Europe and North America, in particular.

Substantial strides in responsibility  

The year for children’s clothing brand Gugguu included many successes: after a two-year break due to the coronavirus pandemic, the company was able to organize its pop-up tour, which set up stores in four cities a total of eight times. The events were successful in terms of sales and the feedback from the customers was overwhelmingly positive. During the year, Gugguu also took substantial strides with regard to the efficiency of its product development, for example.

In the fall, the now 10-year-old Gugguu launched an online store for secondhand clothing, which has been built on the company’s most important value: responsibility. The online store is aimed from consumers to consumers: it enables customers to sell quality children’s clothes that they no longer use to those who need them. Gugguu provides a platform that ensures safe sales and affordable shipping. The service has an incredible amount of potential and, sure enough, the online store is off to a strong start. All aspects of responsibility form the core of Gugguu’s business operations: all significant decisions, such as material procurements, start with responsible choices and the company’s entire production network is situated in Europe.

Despite the successes, 2022 was also one of the most challenging in Gugguu’s history. The war in Europe caused uncertainty and resulted in considerable issues with material availability and increased prices. This also protracted production times. Over the course of the year, Gugguu was forced to increase the prices of some of its products, which naturally impacted consumers.

Important support and stability from Panostaja

Panostaja has been an important partner and solid support for Gugguu, particularly in the context of significant strategic matters. The partnership has now lasted four years, and Gugguu has retained its place in Panostaja’s portfolio, even with the updated strategy. Gugguu has received help from Panostaja for board and management team efforts, along with a stronger structure around business operations to enable positive growth. The networking events with other portfolio companies have also been important for Gugguu.

The year 2023 will be both interesting and challenging for the company. The energy crisis and inflation may cause unexpected changes in consumer behavior, which makes the business operations more uncertain. At the same time, however, Gugguu has expanded its aims geographically and is taking massive leaps toward international markets: growth is being sought particularly in Sweden and Norway. The company intends to continue viewing challenges as opportunities: being sometimes forced to view things from new perspectives serves to develop the business operations.  

* In contrast to Panostaja, Gugguu’s financial period is April 1–March 31