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From the CEO

The last quarter of 2024 was subdued for Vincit, both in terms of revenue and profitability development, similar to the entire fiscal year. Sales cycles have remained long throughout the year as customers carefully consider initiating new projects, even relatively small ones. The market environment, especially for custom software development, was challenging throughout the year.

In the Nordics, demand for our service offering was highest for data and AI solutions, as well as SAP S/4HANA transformation projects. Among customer deliveries in Finland, I would particularly like to highlight the Edilex AI tool, developed by Vincit and Edilex, which is designed for legal information retrieval. The tool is currently being tested by law firms, and the commercial version will be released during 2025. After the review period, we also announced an extensive cooperation agreement with Schetelig Group, a wholesaler catering to garden professionals. We are helping the Group’s companies modernize their core business processes with a cloud-based, comprehensive SAP solution. These projects are examples of our strategic goal to apply our expertise more deeply to our customers’ business-critical challenges.

In the United States, the operating environment has remained challenging for Vincit, and the past quarter was again unprofitable. We continue to work on building a new market position as a digital commerce partner and adjusting the cost base to the current size of the US business. We are focused on winning new customers in the retail, media, and manufacturing industries by leveraging our delivery capabilities from Europe.

During the year, we have significantly streamlined our cost structure and increased cost flexibility in our operations. Thanks to cost-cutting measures related to office premises and other operating costs, we achieved annual savings of EUR 2 million. In addition, we concluded change negotiations in November concerning temporary layoffs in Finland. The layoffs apply to employees in billable roles whose customer invoicing has been low for an extended period. We will continue to evaluate the necessary measures and need for temporary layoffs until the end of June 2025. At the end of the year, Vincit had 30 employees on temporary layoff in Finland and the US.

In December, we announced that we had become part of a professional cyberattack. The multi-stage attack originated from stolen VPN credentials from a Vincit employee's personal computer, which allowed the criminals to penetrate a closed network of a Vincit customer. The stolen credentials did not directly allow access to customer systems or personal data managed by customers, but the criminals were able to exploit vulnerabilities independent of Vincit in the next stage of the attack. We take this series of events extremely seriously and have conducted a thorough investigation in cooperation with cybersecurity professionals and authorities. We will accelerate the schedule of ongoing cybersecurity projects and further increase investments in cybersecurity development and risk management together with our customers. The costs related to the cybersecurity attack burdened the result of the final quarter.

The year 2024 ended with the clarified strategy and updated financial targets published in December. Vincit aims to be the most trusted digital business partner for its customers, combining leading technology platforms and tailored solutions. The results of a customer satisfaction survey conducted in December (NPS 58) provide a good starting point for our goal. As a result of the strategy work, we started 2025 with a new organizational structure, which strengthens the independence of our business areas. This enables clearer profit responsibility, closer customer collaboration and brings experts closer to the business. Although the operating environment remains challenging at the turn of the year, we are entering the new year committed to earning our customers' trust every single day.