CEO's review

Petri Kairinen

Petri Kairinen, CEO, Nixu Corporation
Espoo, February 28, 2019

Petri Kairinen, Nixu CEO: Towards improved profitability through growing pains

The financial year 2018 was once again a year of rapid growth (+24%) for Nixu and our operations progressed well in line with our strategy. Financially, however, the year was a disappointment, as our operating profit remained slightly negative. Part of Nixu's growth strategy is to seek strong growth, even at the expense of profitability. However, our aim is to keep the operating profit positive. This year, we fell short of this goal, mainly due to weak profitability management in the first half of the year in different areas of our operations. We have done a lot of work to consolidate our practices and models after our earlier acquisitions. As an example of this, we have merged the various subsidiaries in our operating countries so that only one Nixu company is in operation in each market. This strengthening of the platform is essential for us to continue our growth story and to bring more members to our family.

I strongly believe that in 2018 we have taken exactly the right measures that will lead us towards better profitability, and we did see clear improvement in the last quarter. Furthermore, due to major cybersecurity partnership agreements and general efficiency improvements made last year, we expect the operating profit in 2019 to improve significantly. Another fact that supports this view is that the relationship between wages and price levels has remained unchanged, i.e., our operational performance has not deteriorated. Our aim has not been, nor will it ever be, to seek rapid growth by undercutting our services or recruiting at any cost.

Cybersecurity was frequently in the headlines in 2018 with the emergence of increased transparency of regulation, recurring data breaches and state influence. At the same time, the legislation of different countries has evolved to the point where the creation of closed state Internet has come to be viewed as a threat. Once implemented, this development will result in companies no longer being able to operate digitally in a fully harmonized manner around the world. These phenomena continue to keep the cybersecurity market on a strong growth curve and require the industry’s suppliers to offer both solid expertise and customer-centric understanding.

Nixu's updated strategy and objective to become a trusted cybersecurity partner for customers' digital transformation is positioned perfectly against this background. The cybersecurity of digital services is not only achieved by using the best technologies - it also requires customer understanding and the ability to make changes. The best cybersecurity technologies in the world are of course also required, but these must be applied and adapted to match the specific needs of each customer.

We will continue our work to ensure the functionality of digital society. We will recruit and train more cyber professionals in different areas and tailor our services to create the best fit for our clients’ needs. We will gain competitive advantage by providing our customers with a complete service package. In such partnerships, Nixu’s enthusiastic, professional teams will help our customers in situ and of course, rely on the technology-based continuous services supplied by Nixu.