Investors

From the CEO

2023

“2023 was a mixed year for Vincit: we made significant progress in
many areas but fell short of our targets for the year in terms of
profitability and revenue development. The trends seen in the first half
of the year – changes in customer demand and strong price
competition, especially in custom software development – continued
towards the end of the year, and the investments made in sales and
marketing were not reflected in the revenue development at the
desired pace. The good profitability development after the summer
also stalled in the last months of the year. In the last quarter of the year,
the downward trend in revenue continued and, after cost saving
measures, we entered the new year with 80 fewer Vincitizens
compared to the previous year. Despite the challenges, Vincit's cash
flow improved by more than EUR 3 million compared to the financial
year 2022.

Throughout 2023, we received strengthening signals that the Nordic
digital market is now being driven by players with a deeper
understanding of their customers' businesses and the ability to apply
their expertise to business-critical challenges in different industries.
With the Bilot merger, our renewed offering and our strategy are well
aligned with this market development: a focus on our clients' business
results. Our own transformation journey is well underway, but it will
take longer than expected to have a positive impact on the bottom
line. Sales cycles for new comprehensive projects are long, and
demand for hourly custom software development work has been
declining.

In the US, we adjusted our cost structure, but the impact of the new
interest rate environment on our home turf of technology and start-up
customers impacted sales negatively throughout the year. Customers'
financial difficulties also led to write-offs of around EUR 1 million on
trade receivables that had already been incurred before 2023. Despite
the challenges, the value potential of the US market for Vincit is
significant.

The renewed brand and customer promise and our continued efforts to
develop our sales and offering will provide the foundation and focus for
the year ahead. I would like to highlight two customer deliveries in
Finland: our SAP S/4HANA implementation for Certia, which was
delivered on time and to quality standards, and our project with
Verkkokauppa.com, where together we made a significant impact on
the customer experience of the digital channel. In the US, we made
important new openings in the travel, media and retail sectors.

Our investment in AI capabilities will continue through concrete client
projects and by investing in systematic training of all our experts; last
year alone, more than 100 Vincit employees obtained an officially
verified certification in AI technologies, and we will double this number
in the spring.

Despite a challenging year, I am proud of the energy with which
Vincitizens rolled up their sleeves and worked to find ways to build a
new foundation for better Mondays in a rapidly changing IT services
market – for our customers and for all Vincit employees."