Major strategic changes crystallized during the year

The year 2023 was a challenging year for Oscar Software, and there were a lot changes over the year, especially within the company. In March, Oscar was targeted by a major data breach, which was also covered in the media. Fortunately, the company handled the situation well thanks to solid preparations, but it will take time to recuperate. Many lessons for the future were learned from the cyberattack, but what transpired also impacted Oscar’s result for the financial period. The second major event of the year was the changing of the CEO, when Mika Yletyinen left the position in September. Markku Virtanen has served as the interim CEO for the remainder of the year.

From projects to a more product-oriented model

The profit/loss for the 2023 financial period improved from the previous year, but the net sales remained at the same level.

Oscar’s basic business and selected strategy progressed at an even rate during the year. Late in the year, however, the poor economic situation began to manifest itself as investment-related caution and delayed decisions among new customers. Over the course of the year, resources have been diverted from new sizeable deployments toward existing customers to find new development projects. The slow decisions among new customers are expected to continue for some time. Oscar’s competitive situation has not weakened, because other operators in the field are wrestling with the same challenges.

The share of direct project work is decreasing as Oscar is steering its operations increasingly toward a more product-oriented model. This transition has been in the works for a couple of years, and it began to approach completion in the past financial year. Massive growth was achieved in the order book. Other successes of the year were related to internal development, in relation to which breakthroughs were achieved in projects related to background infrastructure and the SaaS transition, for example. The changes are invisible to customers but some emerge as more stable, achievable and efficient services.

The ERP campaign sparked wide-spread interest

Over the course of the year, the company also launched an ERP campaign, promising to donate its product, the Oscar business platform (ERP), to two companies in the production industry or wholesale and retail sector. The campaign sparked a lot of interest and drew in applications. The campaign also had a direct impact on Oscar’s sales, even though the market situation was otherwise stagnant.

Panostaja assisted Oscar through the year with updating background funding and insurance solutions, for example. With Panostaja’s assistance, Oscar has done things more boldly and strongly in alignment with its strategy: for example, owner and board efforts have supported the transition to more product-oriented operations. Oscar has also received expert support through Panostaja’s network.

Positive outlook for the coming years

In the past year, Oscar has also made even more investments than before into responsibility. The company has begun to work on responsibility themes with regard to its own footprint (e.g., server choices and data security) and handprint (e.g., more efficient resource usage and transparency). These efforts will continue in 2024. During the new year, the company also expects the investment levee to break and intends to continue its strategic transition. Oscar believes that in 2024, customers will more concretely see what the ERP platform of the future will be like. Over the course of the next two years, the results are expected to be more widely apparent among the customer base: Oscar’s modern ERP platform differs from its traditional counterparts and will begin to yield benefits in the near future.

Big steps of growth

CoreHW has two main areas of business operation, which both developed in 2023.

Net sales for the microchip design services and IP licensing (DS) increased slightly over the course of the year, even through there were some profitability challenges. That said, corrective measures were successfully carried out in relation to profitability. Next year, business profitability is expected to be better. During the year, new technologies with considerable commercial potential were created. The customer base of the design services consists of a wide range of companies from start-ups to the largest equipment and microchip manufacturers in the world. In 2023, CoreHW expanded its customer base particularly in the United States.

The indoor positioning module and equipment sales business (RTLS) includes the sale of components, modules and devices developed by CoreHW, whereas contract manufacturers produce the components themselves. In 2023, CoreHW was able to start the mass production of its proprietary antenna modules. Late in the year, some main customers were still finalizing their own products, but customers have still made advance orders for more than 2,500 antenna module boards for preproduction series.

Device product development was initiated due to growing demand

In the past financial period, CoreHW also took significant new steps by deciding to get involved in the indoor positioning equipment business. In addition to the design of microchips and antenna modules, the company began to invest more in devices, such as locators and tags, and began their product development. The devices utilize CoreHW’s own microchips, antennas and algorithms, which ensures a unique competitive advantage. The intention is to get the devices into mass production midway through 2024.

A decision was made to begin the new business due to high customer demand.

A decision was made to begin the new business due to high customer demand. The customer base includes equipment manufacturers, indoor positioning system providers and system integrators, for example. The devices can be used to monitor goods in warehouses and factories or ensure patient and staff safety in hospital environments, among other applications. CoreHW’s aim in all of its business operations is to develop microchip technology that enables providing better products to customers.

Significant investment assistance from Panostaja

In 2023, CoreHW faced challenges due to the payment delays of some customers, which has made CoreHW’s own cash management more difficult. There was no credit loss, however, and there has been none over the company’s entire history.

CoreHW has ensured responsibility through measures such as minimizing the environmental impacts of its products and operations and fostering safe and productive jobs in all operating areas. The company also promotes responsibility through its management structure, which regularly reviews thorough internal and third-party inspections. For CoreHW responsibility, honesty and lawfulness come first with regard to partners throughout the entire supply chain.

Panostaja assisted CoreHW substantially during the year, particularly with growing the module and equipment sales business for the next phase. Together with Business Finland, CoreHW invested about four million euros in product development in the spring of 2023. Panostaja’s role was also evident through its activity in the company’s Board of Directors and other expert assistance: for example, Panostaja organized a variety of theme days with portfolio companies, and the peer support also benefited the further development of CoreHW’s business operations.

For CoreHW, 2024 looks to be very positive for both design services and the module and equipment sales business. The company develops its products constantly and believes that it will become even more of a product company by 2025: at that point, a significant portion of the net sales will be generated by indoor positioning and the company’s own products.

The year of great changes becomes a success

During this financial period, Hygga got back to the basics and focused particularly on the profitability of its dental clinic which provides outsourcing services to the City of Helsinki. The Hygga Flow system, which was developed by Hygga to save valuable health care resources, was widely adopted by Finland’s new wellbeing services counties, and the company is taking strides in its internationalization efforts.

The year 2023 got off to a tumultuous start with Hygga’s CEO and the manager of the dental clinic located in Kamppi, Helsinki, leaving their positions almost at the same time. The new CEO was found inside the company, as Christoffer Nordström, who had previously served as Chief Digital Officer, was selected for the task. During the first quarter, Hygga and its new CEO focused on the dental clinic operations and reorganizing the management. The focus was particularly on operational management and data-based measurement, and results were gained very swiftly.

Investing in personnel pays off

The big picture required substantial changes and new thinking across the board. Investments were made in clinic management and supervisory work to make Hygga better equipped to recruit professionals in the highly competitive field. Staff satisfaction and comfort are now key focuses, which has also required investments through the new pay model, for example. On the other hand, Hygga has noticed that investing in personnel increases profits – the clinic already became profitable in March. More than 50% of the clinic’s net sales come from the City of Helsinki and the rest from private customers.

Hygga Flow is generating interest in Finland and across Europe

The service business focusing on the Hygga Flow ERP system gained a new CBO at the beginning of September. In addition to oral health care, fields such as basic and special health care  are interested in Hygga Flow, and the public sector has adopted the solution widely for oral health care in Finland.  In Sweden, the county of Örebro is already using the system for oral health care, and a pilot agreement was signed with another county last year. In 2024, Hygga Flow will be piloted for the first time for specialized health care in Belgium at the Roeselaren AZ Delta hospital. At the same time, the pilot is the first trial of the system for the purposes of radiology.

Hygga Flow is based on the idea that patients are provided with the treatment they need in one go. This saves in back-and-forth travel costs and treatment room cleaning. The ERP system increases the efficiency of patient care and saves resources but is also a highly responsible solution at the same time. For example, in Örebro, Sweden, Hygga Flow received the county’s environmental award. In this financial period, Hygga’s overall responsibility efforts were focused on human wellbeing, without forgetting other essential factors.

The future seems promising

The most significant successes of the year were experienced in finding a focus and in the management team’s spirit of pulling together . These were also reflected in the staff satisfaction. Overall profitability was also better at the end of the financial period. Panostaja’s team has been actively involved in the development of Hygga’s financial processes and has financed the operations in an occasionally challenging situation.

The year 2024 appears promising for Hygga. Hygga Flow has sparked a lot of interest among Finnish public sector operators, because all of the new wellbeing services counties are having difficulties with sustainability and long waiting times. There is also demand on the international markets, which is indicated by good pilot results and new initiatives. The profitability of the clinic business is expected to improve, which is why the new financial period is anticipated to be a good one. Despite the changing situation, Hygga is on a path of growth together with Panostaja.

A year of substancial changes

As advance estimates predicted, early 2023 was a period of positive growth for Grano. The start of the new financial period also involves significant organizational changes. Two separate business units were created within the company, both with clear profit responsibilities – this made it possible to move the responsibility down across organizational levels. Sales efforts were also streamlined by dividing them into three areas: sector-specific sales with comprehensive customer responsibility, expert sales, and a sales support and development unit which is responsible for internal sales policies, for example.

After the positive early part of the year, the second part was exceptionally challenging for Grano and the entire field. The summer season was already unusually slow, and the stagnation of the market was painfully evident especially in the fields of trade and construction. During the final quarter of the period, the company was forced to take financial corrective measures, the most radical of which was the decision to initiate change negotiations. As a result, Grano let go 27 employees.

The measures taken helped

Amid the challenges of 2023, many measures taken in the previous year proved valuable. For example, overcoming the material inflation brought on by the Ukraine War salvaged net sales and profitability in 2023.

The new Vantaa factory opened in 2022 also provided a favorable boost in 2023. Customers have provided a lot of positive feedback about the factory and, as an example, the showroom constructed on the premises, which showcases Grano’s wide product selection from basic print products to marketing services.

Silver-level EcoVadis sustainability label

Prominent themes for the company during the year were responsibility and artificial intelligence. Grano has been engaged in long-term responsibility efforts at a high level of quality but, in recent times, the efforts have been crystallized into an undeniable strength for the company in competitive bidding, for example. In 2023, Grano also achieved the silver level of the esteemed EcoVadis sustainability label. Grano has already been at the bronze level for a couple of years. Attaining and maintaining the silver level requires continuous development of responsibility efforts.

Several AI training courses have been organized for employees, and the company is in the process of creating its own AI strategy.

Alongside environmental matters, Grano has placed special emphasis on comprehensive employee satisfaction and motivation: as a general trend, the personnel of industrial manufacturing companies are getting older, which is why maintaining work capacity and drawing new people to the field are key interests among the companies. Responsibility is also demonstrated by new innovations, such as the ecological cardboard furniture solutions, which were launched in the fall. In terms of AI, Grano has made sure that its personnel stays up to date in the rapidly developing world. Several AI training courses have been organized for employees, and the company is in the process of creating its own AI strategy. Grano has also utilized the Responsibility Strategy workbook released by Panostaja and the related tools.

Panostaja assists with streamlining the portfolio

In 2023, Panostaja assisted Grano particularly with streamlining the overall portfolio. In the spring, Grano sold its subsidiary in Tallinn and, after the summer, also its shares in the Maker3D company. In the past year, Panostaja’s mentoring program for the management team members of various companies was also extremely useful in terms of peer support.

Grano is expecting 2024 to be challenging, and the economy is expected to provide little to no boost for growth. In the coming year, Grano will continue to invest particularly in responsibility, artificial intelligence, innovations and data security. Market-driving growth is expected in the packaging and food business. Despite the challenges, the company is confident in its wide range of strengths, competent and committed staff and good products.

The anniversary year was a happy time but challenges were not avoided

The 2023 customer satisfaction survey indicated that the company’s NPS is extremely high. Gugguu’s customers are committed and satisfied and also willing to recommend the products to others. On the other hand, challenges could not be avoided in the changed global situation. There have been significant changes in the purchasing behavior of consumers, and production costs and prices have increased, for example.

Many memorable events were organized over the year and new model ranges were also launched. Still, Gugguu’s sales did not develop in the desired manner. Fortunately, the company had prepared for the uncertain outlook through a variety of measures, such as reducing production volumes, which is why the challenges and changes were not as much of a surprise.

Responsibility brings people together

The support from Panostaja is very significant for Gugguu, and responsibility, which is important to both companies, is at the core of the company’s operations. Gugguu is a responsible producer that manufactures ecological products entirely within Europe. Increasing awareness of the Gugguu Preloved shop, which was launched in late 2022 to encourage the recycling of children’s clothing, has been one of the responsibility themes in 2023.

Gugguu finds that being part of Panostaja’s portfolio is also beneficial in terms of networking and the exchange of ideas. This year, too, the various events organized by Panostaja, such as the Financial Management Days and Management Forum, have provided important discussion forums for the company’s key personnel.

The coming year will surely continue to be challenging for Gugguu. However, there are also positive prospects in the figure. As an example, the efforts to drive internationalization will pick up speed with Gugguu opening a subsidiary in Norway in 2024.

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