ANNUAL REPORT 2023
CONTENT
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Vincit in 2023
Strategy
Sustainability
Financials
Board of Directors' report
Financial Statements
Auditor's report
2 CONTENT
VINCIT IN BRIEF
Vincit, founded in 2007, is an agency focused on turning digital into business results. We are a comprehensive technology and business partner for our clients, leveraging technology to streamline business operations, transform commercial capabilities and accelerate digital development.
Vincit's service offering combines business-driven design, agile software development, data & AI capabilities, and extensive platform expertise especially in SAP ecosystem technologies. In addition, our own product solution VincitEAM helps companies automate their maintenance operations and asset management.
We operate globally through offices in several locations in Finland, Poland, Portugal, Sweden, and the United States. Nordic countries and the United States are our two main customer markets, where we serve mid-sized to large companies as well as large public sector clients.
We believe that technology is a key component for solving the global challenges of our time - we're here to create better Mondays for Vincitizens, our customers, and our planet.
3 | VINCIT IN BRIEF |
VINCIT IN NUMBERS
Founded 2007
~800 vincitizens & partners
EUR 98.1 million revenue in 2023
35 nationalities
5 countries: Finland, Poland, Portugal, Sweden, USA
450+ customers
4 | VINCIT IN BRIEF |
HIGHLIGHTS OF 2023
Renewed brand tells the story of Vincit today
The redesigned Vincit brand communicates the new Vincit - our value proposition, offering, positioning and tone of voice - in a clear and relevant way, and stays true to our core values. Side by side with the brand renewal, we redesigned our values together, and invested in several culture and career development projects, such as redesigning our competence development platform Univincity.
Investments in AI knowledge and tools continue
A pilot project with construction industry leader SRV showed that AI-assisted software development is up to 20% more efficient compared to not using the tools. Our target of having 100 Vincitizens certified with Microsoft Azure AI technologies was reached during 2023. Vincit's sales organisation is also trained to use artificial intelligence-assisted tools, and we have created operational and ethical guidelines for the use of artificial intelligence.
Moving up the customer value chain
The positioning after the Bilot merger in 2022 opened a new market for Vincit and the move upwards in customers' value chain has progressed according to the strategy. The renewal of Vincit continues by developing commercial expertise and broader offering. At the same time, Vincit continues measures to improve profitability and adapt its business to the changed market situation.
Vincit renewed Verkkokauppa.com's online customer experience
Vincit renewed the Verkkokauppa.com online store, to create a base for continuous improvement of Verkkokauppa.com's online customer experience. The renewed online store concretizes Verkkokauppa.com's strategy of aligning with customers and focusing on key target groups and product categories. The project aimed to enhance online customer experience, increase category awareness, improve product findability, and embrace a customer-driven way of working.
5 | VINCIT IN BRIEF |
Vincit developed a commerce-driven customer portal with Outokumpu
Vincit partnered with Outokumpu to design and implement the overall solution of Outokumpu Connect, a commerce-driven customer portal that enables better digital services for customers and increased sales for Outokumpu. The end goal was to create a future-proof platform that could efficiently and intelligently tie together all the necessary systems in use at Outokumpu, including the ERPs.
The core technologies of Outokumpu Connect include SAP Commerce Cloud with the Composable storefront and Integration Suite. We designed a modern, easy-to- use user experience and user interface for the portal. We also helped Outokumpu to plan and realise the needed harmonisation of data, processes, and business logic to make it all work together seamlessly.
GREETINGS FROM OUR CEO
"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."
Julius Manni
CEO
6 | VINCIT IN BRIEF |
VINCIT'S GROWTH
STRATEGY
Vincit's growth strategy aims to elevate our position within the partner value chain of our customers.
The cornerstones of our strategy are:
We aim to be the trusted partner for customers looking to transform their commercial capabilities and accelerate digital development.
In the Nordic countries, we are building a business-driven position, where Vincit's competitive advantage is a unique combination of design thinking, data & AI, modern agile software development, commercial solutions and enterprise-level platform expertise, especially in SAP ecosystem technologies.
In the United States, we aim to accelerate our software development business growth, as the relevant IT market is several times larger than in the whole of Europe.
We continue to develop and diversify our global delivery capability and thus offer our clients the best experts and development teams competitively.
We are committed to being the best place to grow for the best digital talent, aiming for the best customer experience and a stellar employer reputation in the industry.
7 | OUR BUSINESS AND STRATEGY |
GOALS BY THE END OF 2023-2025 STRATEGY PERIOD
Business targets
Financials:
20% | 30% |
Revenue: | of growth from |
Annual growth | acquisitions mainly |
outside Finland |
> 60% | > 10% |
Equity ratio: | Adjusted EBIT throughout |
strategy period | |
Market split | |
USA: 30% of revenue | Europe: 70% of revenue |
Sustainability targets
Diversity:
30% | 15% |
women and gender | international talent/ |
minorities | country |
Impact:
- Vincit own operations carbon neutral in 2023
- Towards a carbon neutral digital value chain with partners by 2025
- 100% of customer work has a set goal aligned with our customer's sustainability goals
8 | GOALS BY THE END OF2023-2025 STRATEGY PERIOD |
WE TURN DIGITAL INTO BUSINESS RESULTS
Vincit's business comprises two areas: the Service business in Europe (Vincit Europe) and the US (Vincit USA), and the Product business focusing on the Finnish market. Majority of our revenue comes from our Services business.
A partner in business transformation and an accelerator of digitalization
In recent years, we have shaped our Services business from the role of an IT project supplier towards a strategic partner for business- critical processes and systems. Our goal is to be the trusted partner for our clients in the transformation of their commercial capabilities and in accelerating digital development.
Our Services business forms a logical chain between the development, commercialization and ongoing maintenance of digital solutions, extending our projects deeper into our clients' business processes.
The merger with Vincit and Bilot Oyj in 2022 strengthened our capabilities especially in SAP technologies, data and integration expertise. Now we are able to leverage leading enterprise
software and cloud-based technology platforms (including SAP, Microsoft Azure, Amazon Web Services, Google Cloud, Snowflake and Adobe), combined with design-thinking, data & AI, and agile custom software development. This has further strengthened our position as a strategic partner, while at the same time our customer engagements have become more continuous, and we have further enhanced our IT service management capabilities.
Our services include: | Our solutions include: | The industries we serve: |
• Winning experiences & digital solutions | • | Data, AI and analytics |
• Growth with commerce & engagement | • | SAP enterprise solutions |
• Business direction with data & analytics | • | Web / Mobile applications |
• Efficiency with core processes and | • | Digital commerce, portals and |
platforms | marketplaces | |
• Value with continuous services and | • | Product information management |
DevOps | • | IoT and embedded systems |
• | Integrations |
- Wholesale and retail
- Manufacturing industries
- Public sector
- Energy and utilities
- Digital platform economy
- Banking, finance, and insurance
- Medical devices manufacturers
9 | OUR BUSINESS AND STRATEGY |
FROM HELSINKITO CALIFORNIA
We have offices in Finland, Poland, Portugal, Sweden and in the USA. The majority of our net sales comes from the Finnish IT service market, however we have established a solid track record and presence in the US market. We expect the US business to become an increasingly significant part of our entire business.
PORTUGAL
USA | Lisbon |
Irivine, Phoenix
10 OUR BUSINESS AND STRATEGY
FINLAND
Tampere, Helsinki, Espoo, Turku,
Oulu, Jyväskylä, Kuopio
SWEDEN
Stockholm
POLAND
Poznán, Warsaw
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Vincit Group Oyj published this content on 07 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2024 18:20:09 UTC.