HANSAB GROUP ANNUAL REPORT 2017
Annual Report 2017 | Contents
Table of Contents
05 About Us 09 Envisioning the Future of Businesses / Aigar Urva Founder and CEO Hansab Group 11 Financial Results of Hansab Group in 2017 / Jaak Õunpuu CFO Hansab Group 15 Consolidated Balance Sheet
16 Consolidated Income Statement 17 Focusing on Value Added Solutions / Markko Purge Sales Manager Hansab Group 21 Innovation as a Mindset / Priit Ivanov Innovation Manager Hansab Group 23 Significant Improvement in Efficiency / Algo Puusepp Service and Quality Manager Hansab Group 25 Focus on Brand Humanisation & Communication / Sigita Babarskaitė CMO Hansab Group 27 Another Record-Breaker / Janno Kallikorm Managing Director Hansab AS 29 Laying Strong Foundations / John Torn Managing Director Hansab OY 31 A Leap of One Million / Deniss Rubens Sales and Marketing Director Hansab SIA 33 Strengthening Position in Strategic Sectors / Darius Zekonis Managing Director Hansab UAB 35 Ready for New Challenges / Alar Alumaa Managing Director Ellore 37 A New Direction / Tarmo Koreinik Managing Director Moya 40 Head Offices and Contacts
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Members of Hansab Group Companies
AIGAR URVA FOUNDER AND CEO HANSAB GROUP
JAAK ÕUNPUU CFO HANSAB GROUP
SIGITA BABARSKAITE CMO HANSAB GROUP
MARKKO PURGE SALES MANAGER HANSAB GROUP
ALGO PUUSEPP SERVICE AND QUALITY MANAGER HANSAB GROUP
PRIIT IVANOV INNOVATION MANAGER HANSAB GROUP
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Annual Report 2017 | Members of Hansab Group Companies
4
RUTA URVA INTERNAL AUDIT MANAGER HANSAB GROUP
KARI PAVELSON MEMBER OF THE BOARD HANSAB KINNISVARA
REIGO ROSIN IT MANAGER HANSAB GROUP
JOHN TÖRN COUNTRY MANAGER HANSAB OY
DENISS RUBENS SALES AND MARKETING DIRECTOR HANSAB SIA
JANNO KALLIKORM MANAGING DIRECTOR HANSAB AS
DARIUS ŽEKONIS MANAGING DIRECTOR HANSAB UAB
ALAR ALUMAA MANAGING DIRECTOR ELLORE
TARMO KOREINIK MANAGING DIRECTOR MOYA
About Us
Hansab celebrates 27 years of leading business innovation, automation and security with a consolidated turnover of € 25.5 million and a team of 305 professionals. Our main goal is to be the leading provider of complete technology solutions for customers. Thanks to the wide product portfolio, which includes automation, security, cash handling and finance systems, we offer Service 50% the best technical solutions and products to make our customers’ businesses 305 more effective and secure, their employees’ everyday life easier, employees and lift their customer experience to a new level.
Sales and Project Department 39%
Administration 11%
Employees by activity field Sales and Project Department 39%
Service 50%
Hansab Estonia
Hansab Lithuania
305 employees
Moya
Hansab Latvia
Ellore
Hansab Group Administration 11%
11
48
59
68
76
10
Employees by company *including project based
Employees by activity field
Hansab Estonia
Hansab Lithuania
Moya
Hansab Latvia
48
59
68
76
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Annual Report 2017 | About us
HANSAB GROUP OÜ Est. 2005 in Tallinn, Estonia
HANSAB AS
HANSAB SIA
HANSAB UAB
Tartu, Pärnu, Jõhvi, Kuressaare
Rezekne, Liepaja, Valmiera, Daugavpils
Kaunas, Klaipėda, Šiauliai, Panevėžys and a representative in Belarus.
Est. 1991 Tallinn, Estonia
Est.1993 Riga, Latvia
Est. 1994 Vilnius, Lithuania
MOYA OÜ
Est. 2006 Tallinn, Estonia
HANSAB OY
Est. 2014 Helsinki, Finland
One of our main strengths is creating complete solutions. They consist of consultation, software development and integration, hardware sales, project management and after-sales services. Among our long-term customers we have leading organisations operating in retail, transportation, finance, state, and education sectors. Our home territory covers Estonia, Latvia, Lithuania, Finland and Belarus and consists of 8 companies: Hansab Group OÜ, Hansab AS, Hansab SIA, Hansab UAB, Hansab OY, Ellore OÜ, Moya OÜ, Hansab Kinnisvara OÜ and Hansab Turtas UAB. Our solutions and services portfolio is unique. An official channel partner to more than 100 suppliers,
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ELLORE OÜ
Est. 2007, Tallinn, Estonia
HANSAB KINNISVARA OÜ Est. 2009 Tallinn, Estonia
HANSAB TURTAS UAB
Est. 2010 Vilnius, Lithuania
we sell, install and service solutions from the leading manufacturers such as NCR, Ingenico, Qmatic, Bosch, Sony, Samsung, Glory Global Solutions and more. Partnerships with the world’s best known technology companies give us the advantage to have the newest and most innovative technology, also the know-how on the market. Quality is a watchword for Hansab businesses and the companies aim the highest level, acknowledged consistently by numerous quality management awards. Services and solutions, offered by Hansab, comply with ISO 9001, ISO 14001, ISO 20000 and ISO 27001 standards.
Brand Timeline
1990s 1991
Hansab AS established in Tallinn Estonia 5 employees
1992
Hansab starts selling security and cash handling equipment to the financial sector
1993
Establishment of Hansab service department. Product portfolio expands to customer management systems. The first service agreement is signed. Hansab SIA founded in Riga, Latvia
1994
Hansab UAB founded in Vilnius, Lithuania
1995
The first financial crisis in the Baltic financial sector
1998
Second financial crisis in the Baltic financial sector after collapse of the Russian economy 43 employees Turnover reaches â‚Ź 300 000
1999
Sales and service of NCR ATMs begins Period of rapid growth in the company
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Annual Report 2017 | Brand Timeline
2000s
2010s
2001
ISO 9001 quality standard acquired
2010
Hansab Turtas UAB founded in Vilnius
2003
1600m2 headquarters constructed in Tallinn
2011
ISO 20 000 certificate acquired
2005 2006
Product portfolio joins POS terminal sales and service Hansab Group OÜ founded to unify and coordinate operations across the Baltics
117 employees Ellore OÜ established by Hansab and Voicecom to develop and integrate software with equipment sold by Hansab (specifically for payment systems) Turnover reaches € 18.5 million euros and net profit of € 1.2 million, resulting in the best financial results in the history of the company 147 employees
2008
2009
2500m2 Lithuanian headquarters are built in Vilnius
168 employees
2012 2013
2014
2015
Hansab OY founded in Finland
25th Anniversary 321 employees Turnover € 21.2 million
Shift from the product to the solution sales. New products in security field – electronic security, EAS and access control
2017
135 employees
Hansab TOB Ukraine sold
Turnover € 20.5 million
2016
Turnover declines to € 11.3 million
Hansab begins active operations in Belarus
Employees: 257
Hansab introduces new strategy with the emphasis on key account management and additionally to finance – focus on public and retail sectors.
Hansab TOB Ukraine founded to manage operations in Ukraine.
Hansab starts service export
Turnover 17.4 million euros
Global economic crisis begins.
Hansab Kinnisvara OÜ founded in Estonia
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Turnover recovers to pre-crisis level € 17.5 million
A daughter company Moya OÜ founded to operate reverse vending machines Turnover rises to € 15 million
2007
Project department founded to manage complex projects and to divide responsibilities between the departments.
Record turnover € 26.1 million First humanoid robot is brought to the Baltics 305 employees Turnover € 25.6 million Focus on development of inhouse solutions
ENVISIONING THE FUTURE OF BUSINESSES Aigar Urva Founder and CEO Hansab Group
We are living and working in a very interesting and economically challenging time, where drastic changes such as digitalization and robotics are taking place. We are happy that Hansab Group companies have an opportunity to actively take a part and influence this transformation. Therefore, we continue with our priority to work out and deliver new and innovative solutions.
In 2017, Hansab Group revenue was €25.6 million and EBITDA over €1 million, at the same time we did not succeed in fulfilling all of our plans and profits were lower than the year before. These results prove the need to move earnestly to high value providing solutions and services (mainly software development, sales and services). The target will be one of our top priorities in 2018 as well. In addition,we began
developing our own products and solutions, which we are planning to export to countries where we are not still represented. Hopefully, these steps will help increase our profitability. The best results from the Hansab Group companies were delivered by Hansab AS (Estonia), which finished the year with the record revenue of €10.7 million and profit of €337 thousand accordingly. 9
Annual Report 2017 | Hansab Group
We need to earnestly move to high value providing solutions, mainly software development sales and services.
Also, Hansab AS’s daughter company in Finland, Hansab Oy, demonstrated positive developments. The best improvement in financial figures exhibited Latvian company Hansab SIA. At the same time, our Lithuanian company Hansab UAB stayed under our expectations. The results of Moya OÜ, recycling management company, were largely influenced by changes in excise duties in Estonia. Despite this fact, the company had the second best EBITDA 0,3 thousand euros among the Group companies. Ellore OÜ, software development and integration company, successfully implemented several payment card terminal projects. However, our own software development projects were smaller than estimated. In 2018, we plan to significantly invest in the growth and development of Ellore. 10
Finally, we will continue our growth with the goal to exceed 30 million revenues in 2018 and improve profitability. The fulfillment of such ambitious target will be supported by the positive macro-economic climate in our markets and further investments in software development and innovations. In short, it’s not always the most financially profitable way, but in a long term perspective, it will ensure success and help us implement our vision as the leading partner in innovative technology solutions. Annual customer satisfaction surveys confirm that we have succeeded to certify our image as a company, which is the main partner to our customers for providing innovative technology solutions.
FINANCIAL RESULTS OF HANSAB GROUP IN 2017 Jaak Õunpuu CFO Hansab Group
In 2017, economic growth was the best of last 6 years in Baltics. The Estonian economy grew slightly faster compared to its southern neighbours. According to preliminary figures, last year’s economic growth was 4.9%, 4.5%, and 3.8% in Estonia, Latvia, and Lithuania, respectively. Growth of Finnish economy in 2017 was 2.7%. Last year the inflation accelerated in Baltics, by 3.7% in Estonia and Lithuania and 2.9% in Latvia.
In 2017 consolidated turnover was the second best in company’s history, reached to € 25.6 million (€ 26.1 million in 2016). The consolidated profit before taxes was close to € 0.5 million (€ 0.9 million in 2016). Growing sectors in 2017 were
retail and public sector, compared to the previous year decrease of revenues was in finance, transport and industry sector. The group showed continuous growth in service revenues, increasing more 13% accounting for 35% of total turnover.
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Annual Report 2017 | Hansab Group
SIA Hansab UAB Hansab Moya
Ellore Hansab OY
21% 4%
41% 31%
1,2% 0,9% 0,9%
Hansab Group Turnover by Companies
Investments
The biggest improvement of sales turnover was in Latvian subsidiary SIA Hansab (22%). The highest turnover was achieved in Estonia by Hansab AS € 10.7 million (increase 2%). In Finland (Hansab Oy) the growth was 30%. Sales in 2017 was less compared to year before in Hansab UAB 19%, in Ellore OÜ 9% and in Moya OÜ 4%. The largest portion, 41%, of the consolidated turnover in 2017 was generated by Hansab AS, while the share generated from Hansab UAB and Hansab SIA amounted to 31% and 21%, correspondingly, with other group companies accounting for 7%. In 2017, Hansab AS generated the highest net profit with € 337 thousand, followed by Ellore OÜ with € 59 thousand, Hansab SIA with € 57 thousand, Hansab Oy € 28 thousand and Moya OÜ with € 15 thousand. Hansab UAB had a loss of € -114 thousand. 12
The largest investments of 2017 included the purchase of equipment for full-service rentals by Hansab AS, reverse vending machines and service stations by Moya OÜ, and software developments. The total amount of investment in 2017 was € 383 thousand and depreciation expenses increased by 4% to € 487 thousand
Annual results
The net interest expenses of Hansab Group increased by 5% to € 46 thousand. EBITDA decreased from € 1,375 thousand to € 1,016 in 2017. The consolidated balance sheet volume decreased to € 10.8 million (€ 11.4 million in 2016) based on reducing sales receivables and inventories. Total amount of net fixed assets remained on the same level. Group’s financial liabilities decreased and share of equity by the end of 2017 was 41% from the balance sheet. The consolidated return of equity (ROE) was close to 9%, and the return on assets (ROA) over 3%.
Service
Sales
25000
20000
15000
10000
Planning for 2018 and beyond
We believe that Hansab Group’s financial policy, flexible cost base, and development strategies have created a basis for good growth in 2018 and in the future. Economic experts forecast faster growth 3-4% for the Baltic region in 2018, and the Finnish economy should grow over 2% in the coming years. The inflation will be on level of 2-3% in Baltics. The main risks are still uncertainty related to global economies which may influence Baltic export related sectors.
5000
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Consolidated turnover of sales and service in thousands of euros
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Annual Report 2017 | Hansab Group
We believe that Hansab Group’s financial policy, flexible cost base, and development strategies have created a basis for good growth in 2018 and in the future.
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Consolidated Balance Sheet in thousands of euros
ASSETS 31/12/2017 31/12/2016
LIABILITIES AND EQUITY 31/12/2017 31/12/2016
321 782 Cash
Loans and borrowings 927
Current assets
3 739 2 848 Trade receivables 416 582 Other receivables 128 Prepayments
124
6 041 Total current assets
6 600
2 000 1 701 Inventories
Non-current assets 348 Long-term financial investments
250
4 299 Property, plant and equipment
4 430
4 743 Total non-current assets
4 780
Current liabilities Trade and other payables 3 052
1 271
2 909 Accrued expenses 669 496 Tax liabilities 836 910 Total current liabilities 5 385
5 685 Non-current liabilities Loans and borrowings 1 018
1 205
TOTAL LIABILITIES
6 890
Total non-current liabilities 1 018 6 403
1 205
100 96 Intangible assets
EQUITY
11 380 10 783 TOTAL ASSETS
Reserves 3 3 Non-controlling interest 162 487
Share capital 3 3
Retained earnings 3 622 3 562 Currency translation differences 2 Net profit for the period 325 TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
4 381
10 783
2
699
4 490
11 380
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Annual Report 2017 | Hansab Group
Consolidated Income Statement in thousands of euros
2017 2016 Revenue 25 579 26 077 Other operating income 76
101
Business expenses Goods, materials, services -16 173 -16 637
Operating expenses -2 400 -2 234 Labour expenses -5 992 -5 884 Depreciation -486 -470 Other expenses -74 -48 Operating profit 530
905
Profit before income tax 484
861
Net profit for the financial year 378
764
Non-controlling interest 53
64
Finance costs -46 -44 Income tax -106 -98 Equity holders of the parent company 325
16
699
FOCUSING ON VALUE ADDED SOLUTIONS In 2017, the group sales of goods turnover was similar to 2016, â‚Ź 17.3 million. Our ambitious goal was to continue increasing sales, like we had done during the previous years. Still, finance and payment product groups played the leading role in our sales revenue, giving us 39% of our income. Successful projects in automation product group provided 26% of the revenue and electronic security 16%. We are pleased that during 2017, one of our oldest product group, physical security, increased by 45%. Such results were achieved due to winning majority of tenders for the physical access protection solutions in state sector. Hansab is glad that our solutions are protecting ministries, government and parliament buildings across the Baltics.
Markko Purge Sales Manager Hansab Group
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Annual Report 2017 | Hansab Group
The key customer segment is still finance and banking, resulting in 37% of the total sales revenue. For the second year in a row, retail sector is increasing, giving us 24% of income. State and retail sectors grew the most, both on average by 25%. Retail sector growth was not only influenced by the amount of new stores opening, but as well as due to investment in retail efficiency solutions, which Hansab had been offering to the market for years. We’re glad that during 2017 Hansab won such large tenders. One of the most prominent projects was a comprehensive solution tender for digital signage in Tallinn Department Group stores. Such outcome has been achieved due to years of persistent work. The Digital Signage solution received an award as the Best Hansab Group Sales Project of 2017. Such tenders and good reputation in retail sector have helped us grow and become stronger partner for other retailers. Strategic partnership provides the best support and competitive advantage, necessary in increasing competition. Last year, we started revising our supplier list and product portfolios we represent in our territory. As we have been increasing our turnover annually, our partner and supplier network has grown rapidly. We have chosen partners, with who we will continue working on a strategic level.
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Our sales is anxiously waiting outcome for our own developments, where we see great opportunities to grow.
The outcome of our supplier revision gave us a new product structure. We focus on high value-added products and sales of software solutions. We merged all security solutions into one group and as digital signage and multimedia field has grown so well, it was reasonable to make it as a separate product group. Our sales is anxiously waiting outcome for our own developments, where we see great opportunities to grow. I’m sure that we have the best products and solutions to our customers and their feedback confirms it. Throughout the years, Hansab has evolved in providing solutions for export. With our long term expertise and knowledge, we will start seeking export opportunities with either our own solutions, or these, which add extra value. Through the development, we expect to bring to the market new solutions, which we can start selling globally. Interesting times are waiting for us ahead as Hansab will become stronger than ever.
15 000
10 000
5 000
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Sales Turnover
in thousands of euros
We want to be the leading partner in innovative technology solutions in our markets. Hence, we need to focus more on consulting our customers. Every year our seminars become more and more interesting and educational for our customers. As the technology is developing rapidly, it is very important that we also continue invest to our sales and service employee trainings, to raise our competences. Likewise, the projects are more complex and consist of almost always IT infrastructure solutions, we are hiring more IT competence persons to our project teams. Our sales forces are stronger and more competent than ever. We use more synergy among our field managers across countries. In the end it all will reflect in better customer service. 19
Annual Report 2017 | Hansab Group
Finance and Payment Automation Electronic security Physical security
8%
Money handling
39%
6%
Consumables
Card products
16%
26%
1%
4%
Distribution of Revenue by Product Groups
Banking and Finance Retail Transport
13%
State and Public
7%
Industry
Resellers
Hotels & Recreation
1%
Distribution of Revenue by Strategic Segments
20
7%
12%
24%
37%
INNOVATION AS A MINDSET Priit Ivanov Innovation Manager Hansab Group
In 2017 our strategy was on innovation, throughout the Hansab companies and business areas. Using the 3-level innovation strategy, we developed our business by constantly monitoring our partners, developing new products and services based on the market trends and holding regular internal workshops.
Our markets are developing and to keep up with the pace we have been improving and developing through innovation. The year 2017 has been a leap of innovation for Hansab – we have successfully managed our innovation strategy, we have had 3 successful Innovation Workshops (transport, retail, and healthcare) resulting in more than 30 new ideas and we have made a big step by introducing robotics as one of our new fields.
It is not only the business strategy, but innovation has become a mindset and is reflecting throughout the company, including how people think, work and how we market our company. This is creating an excellent environment and laying a foundation the company can use on the way to the future.
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Annual Report 2017 | Hansab Group
It is not only the business strategy, but innovation has become a mindset and is reflecting throughout the company, including how people think, work and how we market our company.
Automation and transportation leading the way
Business costs are increasing, competition is getting tougher by the day and search for new ways of automation is more thorough than ever before. Our customers are looking for better efficiency which is the key driver for automation. Automation is hot topic in all of our existing sectors with the most active being transportation, banking, retail and healthcare. The main focus is on automating the easier processes that take up lot of time resources like guiding traffic, automating the physical banking environment, automating shopping experience in retail stores or automating transportation/material handling and patient flow in hospitals.
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Robotics as a vision of tomorrow
It is clear that robots will play a bigger part in our everyday life in the upcoming near future, we have decided invest into humanoid robotics that would help to automate the customer service and guidance processes in retail, healthcare and banking and cooperate with the leading robotics company in the world, Softbank Robotics. Robots will automate a large proportion of the standard physical and digital tasks that are time and resource consuming.
Future of Hansab
We have grown our business for 27 years and have been a trusted system integrator and service partner for majority of the leading companies in our strategic segments. The experience we have gained will enable us to take the next step. Hansab is on a verge of a shift from a hardware oriented company to a full solution provider offering Hansab produced smart and integrated systems combining state of the art functionality and technology.
SIGNIFICANT IMPROVEMENT IN EFFICIENCY Algo Puusepp Service and Quality Manager Hansab Group
In 2017 we became significantly more effective in managing information with our customers. Up to 40% of service orders were created via our customer portal, as opposed to calling or sending an email. Hansab service department solved more than 78 thousand service orders, 4% more than last year. The service management system gives great value not only for us, but also for our customers, due to higher information accuracy and better information exchange.
Last year was important, as it signifies 100% transition from paper to digital document management, which we call eDoc. The eDoc is a solution, which handles service orders electronically. By using it, we have effectively completed 7000 digital work orders in the system by now. Previously, the service documents were being filled on paper, they were
sent to the customers and it took a lot of valuable time. Now, the process is significantly faster. It is as well more efficient for all parties, as the information reaches our customer immediately. Resulting in saved engineers’ working hours and reduction of customers’ processing time.
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Annual Report 2017 | Hansab Group
One of the keywords for 2017 was to raise our engineers’ IT competencies to offer better services for our customers. We have many customers with service level agreements, which means that we monitor the installed systems constantly. The monitoring system gives us an immediate alert, so we can be aware of every problem, which occurs with the solutions. It is a great step ahead for us. We have managed to shorten the solving time substantially - up to 20% service calls have been solved without visiting customer site.
2012
54 263
2014
67 600
2013
68 522
2015
69 678
2016 2017
75 197 78 180
Number of Service Orders
9000 8000 7000 6000 5000 4000 3000 2000 1000
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Service Turnover
in thousands of euros 24
For 2018 we are planning on upgrading the service management software to be even more efficient. This new generation software enables us to develop our services to a next level. The new ERP we are planning to implement is a modern software platform with more possibilities. The system enables handling service database starting from all customer data and service agreements to managing service orders and engineers’ tasks. This way, we improve all other integrated solutions, our service department is using today, and which we need to continuously develop to meet our customers’ demands. Quality is a watchword for Hansab. Our focus is on developing the management system and we can be proud that it is continuously being certified according to ISO 9001, ISO 14001, ISO 27001 and ISO 20000 standard. Providing high quality, fast and efficient services is key. For us, it means constant improvement of our services speed and quality. In 2018, we are planning to raise the amount of remotely solved incidents by 35%. Furthermore, this would in turn help our customers be more efficient and focus on their work. Finally, we believe that through constantly investing in our engineer competencies, we can provide an even better service for our customers.
FOCUS ON BRAND HUMANISATION & COMMUNICATION Sigita BabarskaitÄ— CMO Hansab Group
In 2017, we focused our marketing and communications even more on our customer by improving customer experience at events, optimising our digital marketing, internal communication and almost doubling our e-commerce results.
Last year, our companies hosted 28 events, focusing on banking, retail, transport, and state sectors. The events were about innovation, automation, efficiency and security. They included Robotex, Rise Vilnius, Innovation Drift, Future is Now, Swedbank Card Payment Seminar, Retail Roadshow and more. In 2018, we continue creating meaningful experiences through our seminars, where we connect our leading partners, customers and new solutions to educate our customers. How do we know it? By
asking our customers. They asses our events, on average, 4.5 on Likert scale. Internally, our goal was a constant improvement of information exchange between our companies, bringing them closer and using the advantage of being a pan-Baltic organisation. As our organisation is growing, we need to ensure that information and connection do not get lost. Last year, we issued monthly Hansab Group newsletter bulletins, featuring the latest developments, changes and 25
Annual Report 2017 | Hansab Group
announcements. Through constant feedback, we see that our employees want to be be engaged. In 2018, we’re going to strengthen intercompany communication. Our local companies will issue quarterly internal newsletters, where all employees, regardless of the position, will have the newest information. In Hansab marketing communications, our goal is to help our customers better understand our solutions. Video has proved to be a successful medium. Across our companies, we developed 12 videos – about innovation, our humanoid robot Pepper as well as key highlights from events and references. For example, Pepper has been the centre of attention, providing a change for our organisation to increase awareness in the biggest TV channels. In 2018, this way, together with our partners and customers, we can even better communicate how innovation is created in the Baltics. As part of our digital transformation, we continued investing in our websites. First, and foremost, we improved user experience and journey by removing additional clicks, adding video and material page to faster find relevant information. Our ecommerce channel revenue grew as well to 150 thousand euros. Our customers have expressed their appreciation for being able to purchase products faster. One of our goals in Hansab three-year strategy is to improve brand awareness. Last year, we launched a new channel – Instagram, to share our projects and achievements with a little twist. We see potential to
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In Hansab marketing communications, our goal is to help our customers better understand our solutions.
position ourselves as an early adopter in the field. So far, our customers are as well joining the forces. In addition, we keep strategic communication in all of our social media channels. First, and foremost LinkedIn, where we share our latest projects, then Facebook, where we display our true corporate culture and then finally Instagram. Our brand is one of the oldest and most reputable brands on the market. With 27 years of history, we have positioned ourselves as a trustworthy solution provider and partner for our customers. For 2018, our goal is to complete Hansab logo redesign, which comes from desire to modernise the brand and help it correspond with the strong focus on innovation and complete solutions. In addition, we will continue building Hansab video content and further improving brand positioning as a complete solution provider.
ANOTHER RECORD-BREAKER Janno Kallikorm Managing Director Hansab AS Member of the Board
We are extremely happy about yet another record turnover achieved in 2017 with us being able to grow or maintain the revenue levels in all of our strategic customer segments. With the financial sector’s investments slowing down but still accounting for 41% of our sales revenue, we saw excellent sales results in retail and state sectors, growing year over year by 20% and by 105% and accounting for 24% and 16% of the total revenue respectively.
Best performance in our solutions portfolio was delivered by physical security solutions with a growth of 85% compared to 2016. Automation did show a modest growth of 7% and with the financial and electronic security solutions able to hold their own, we were able to get close to matching 2016 total sales revenues.
In our services space we saw the biggest increase in revenues in 2017 with the installation services growing an astonishing 118% compared to 2016 and service level agreements revenues matching the 2016 figures. As a result, the total revenue of Hansab AS reached €10.7 million, being 2% higher than in 2016. Profit before taxes was calculated at €425
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Annual Report 2017 | Hansab AS
thousand. Feedback from stakeholders showed slight improvement in both, our employee and customer satisfaction surveys, with ratings of 4.1 and 4.1 (on a 5-point scale) respectively.
Let’s keep on innovating
Whether it is a smart traffic guidance solution, a time-saving online room-booking or a friendly humanoid robot acting as a concierge – we are there to make it happen! 2017 saw Hansab contributing our markets with innovations like humanoid robot Pepper in Telia headquarters in Tallinn, our own roombooking solution at different public and private offices, and continuous development of the Tallinn Harbor vehicle management system. We are very grateful to our customers and partners who are willing to take on the challenges and risks of being the first and stepping into the unknown. We were extremely happy to partner up and share our experience in robotics field with Europe’s biggest robotics exhibition Robotex to encourage our youth and entrepreneurs to realize their great ideas.
Security is not an option
Perhaps a secure folding gate or a bollard made of the best stainless steel and can stop a multiple ton vehicle within a few meters are not the most innovative products, but they sure are effective! We would like to highlight the fact that many of Estonia’s public and private organizations have made significant investments in 2017 into physical security solutions to ensure the safety of both our citizens and visitors in many secure areas and public venues such as Tallinn Old Town, ministries and markets. Hansab is proud that it has been the main partner for delivering, installing and maintaining these solutions.
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We are very grateful to our customers and partners who are willing to take on the challenges and risks of being the first and stepping into the unknown. Our work gets noticed
In April Estonian Security Association together with its partners nominated Tallinna Sadam AS and Hansab AS for the “Best Security Solution of 2016”. Hansab created and deployed an automated traffic management solution in Tallinn Harbor A Terminal. The deployed solution helps the customer to improve efficiency and security of the harbor’s traffic management and logistics processes. In January 2018 Hansab AS was awarded “Quality Innovation Prize 2017” by Estonian Quality Association for deploying humanoid robot Pepper at Telia headquarters in Tallinn. In addition, the same solution achieved a second nomination at an International competition for “The Quality Innovation of the Year 2017” in February 2018, in Bilbao, where it achieved a silver medal.
What’s around the corner?
With continued great partnerships with our customers, partners and other stakeholders, we expect the next years to be as interesting and challenging as was 2017. Together, we are able to change the way we bank, shop, travel and communicate, to be a seamless and fascinating experience for us all.
LAYING STRONG FOUNDATIONS John Törn country manager Hansab OY
It was a breakthrough year for the Finnish operations in the Horeca sector. We had the first large scale project for the Prime Hotels chain Sveitsi in Hyvinkää. Hansab equipped the hotels with complete multimedia solutions, ensuring the highest hotel visitor experience. This project was the biggest single project during the year 2017 and helped us to achieve the best financial results for Hansab Oy so far.
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Annual Report 2017 | Hansab OY
As the journey to get familiar with the new market continues, we participated in the largest e-commerce and retail fair Shop Tech Helsinki this spring. The fair welcomed over 4000 professionals, and during two day event we participated in seminars, workshops and established contacts with valuable leads. Together with the strengthening position on the market, we also need to have more qualified personnel. We are in the process of strengthening our organization with a sales representative and are making efforts to start building a local service organization to satisfy the future needs of our customers. This year, we will continue working with the four strategic sectors: retail, hotels and recreation , state and transport. The foundation we have laid during the last years has begun to come to fruition. The market is more active and our brand is more recognisable among our current and future customers. 30
The foundation we have laid during the last years has begun to come to fruition. The market is more active and our brand is more recognisable among our current and future customers.
A LEAP OF ONE MILLION Deniss Rubens Sales and Marketing Director Hansab SIA Member of the Board
Hansab Latvia had a long list of comprehensive challenges in the past year of 2017. By overcoming many of these challenges and increasing our customer base by 28%, our team was able to improve company revenue by 22% making nearly 1 million revenue leap compared to results of 2016. The results accordingly were 5.5 million euros in 2017 against 4.5 million â‚Ź in 2016. Achieved revenue increase was accompanied by a positive profit before taxes of 61 thousand euros.
Our most strategic sectors for already many years has been financial sector. In 2017 it provided the best results reaching phenomenal â‚Ź3.5 million. It was backed up by several big deals with major banks in Latvia. And as we put significant efforts to provide innovative solutions for our market than one of the most acknowledged deals in 2017 was the deal of
new ATM family delivered to Citadele Bank. Gladly Citadele was the first bank in Baltics to provide their services through innovative NCR SelfServ 6623 cash dispenser machines. At the same time, we have successfully continued sales of innovative smart payment terminal, hitting more than one thousand unit sales in 2017 - nearly double the result of 2016.
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Annual Report 2017 | Hansab SIA
Continuous growth in retail and state sectors
Our most growing sector throughout recent years is retail sector. Previous year has brought several big projects with Kesko Senukai and different pharmacy businesses. In 2017, we gladly shared our expertise and helped our retail customers with innovative security, cash handling and digital signage solutions. Hansab Latvia revenue results in retail sector has grown for solid 18 percent comparing to 2016.
By overcoming many of these challenges and increasing our customer base by 28%, our team was able to improve company revenue by 22% making nearly 1 million revenue leap compared to results of 2016.
Acknowledged player in digital signage
Our focused efforts in providing quality solutions in digital signage field were specifically acknowledged by our retail partners. We were the first in the Baltics to install various digital screen solutions – LG magic fridge, the first LG stretched screen, high-brightness 75 inch screen,and more.
Double in projects
The Latvian company’s focus on increasing the technical competence continued during 2017. Due to extensive increase in project-based revenue, which reached considerable ₏1.1 million for the first time in Hansab Latvia history, we have doubled our team in project department from 4 to 8 employees. The significant change in the project team was the addition of software development specialist. It provided the first positive results in 2017 and created a solid foundation for continuous growth of delivering more customized software solutions for our customers.
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Innovations ahead
Throughout 2017 we have been expanding our portfolio of innovative solutions with first humanoid robot Pepper, electric car chargers, interactive self-service kiosks, laser sensor based security solutions and many others. As Latvian market is growing in various sectors so is the pressure for costs on human resources. Based on this fact we see enormous potential for different innovative solutions in automation and self service solutions. Therefore in 2018, our key focus will continue to be innovation.
STRENGTHENING POSITION IN STRATEGIC SECTORS Darius Žekonis Managing Director Hansab UAB
After an all-time record revenue in 2016, when the turnover had grown by 37%, last year the company was committed to repeat the same results. However, due to some postponed and lost big projects, the Hansab Lithuania revenue decreased by 19% from €9.9 million in 2016 to €8.1 million in 2017. The drop affected the bottom line as well, Hansab UAB finished the year with negative profit line and accounted 127 thousand euros loss.
As much as 90% of the sales revenue came from 4 largest segments – transport, retail, banking and industry with an equal share distribution. Transport stayed at the leading position for the second year in the row, reaching 28% of the total sales turnover. The sales revenue in Belarusian market has decreased as well after the very successful year 2016.
It is very positive that service revenue grew by almost 13%. The installation revenue is growing year over year by almost 20%. SLA and other regular services grew by 10% and it shows positive trend for coming years as well.
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Annual Report 2017 | Hansab UAB
The company managed to keep stable and positive feedback from customers (4.2 on a 5-point scale) and employees (4.1 on a 5-point scale) surveys for several years in the row. It shows that the company is on the right path to success. The organisation’s quality management, based on ISO 9001, ISO 14001, ISO 20000 and ISO 27001 helps run processes smoother, while being beneficial for both our customers and employees.
From the idea to the result
Innovation has been the watchword in the group companies for the last years, helping bring new ideas and solutions to our markets. TOPO Centras was the first customer in Lithuania, which started to believe that robots are the future for customer service. Hansab has sold humanoid robot Pepper and developed the applications which help to assist the customers in stores. The positive feedback from the consumers shows the readiness for the innovations in retail. In recent years, more and more customers use parcel delivery terminals. During last years, parcel terminals are more and more used not only for parcel collection, but also for item exchange. Hansab UAB completed innovative project of parcel delivery terminals for the Baltic Post and DPD Lietuva five years ago, which laid foundations for our future success in this business segment. The rapidly growing Baltic Post and DPD parcel terminal demand on the market ensures active expansion not only in Lithuania, but across the Baltics too. One of the largest providers of logistics services in Europe Rhenus logistics built a brand new logistic center and selected Hansab UAB as a reliable partner for a modern technology package installation: video
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surveillance, number recognition, security systems and conference equipment. All these modern solutions have made Rhenus logistics center one of the most innovative in Lithuania. In the retail sector Hansab UAB holds a leading position by providing digital signage solutions with innovative content management. Panorama shopping mall selected Hansab UAB as a partner for more comfortable customer orientation in the center – interactive wayfinding info terminals. One of the most world’s leading international tobacco company Philip Morris selected Hansab UAB as a partner for all professional video walls installation, which helps the shop environment become more modern and increase product distribution to potential customers.
Successfully entering retail segment in Belarus
Year 2017 has been successful for Hansab BY, mainly in banking sector during the denomination process. But we have been keeping constant focus on other strategic sectors, such as retail which has already given us some good results. Hansab managed to close the contracts with different retailers for the security solutions, including one of biggest DIY retailers OMA. Electronic gates and vacuum tube transport has already been delivered and installed by Hansab team. In 2018 we plan to keep the focus on the main largest segments, banking and retail. The continuous investments in new solutions, already signed agreements for large projects and well established team provides us the confidence that the growth of 20% can be expected by reaching 10 million EUR turnover in 2018. Hansab UAB has all necessary components to come back on the track to success.
READY FOR NEW CHALLENGES Alar Alumaa Managing Director Ellore Member of the Board
Pepper
Ellore positions itself as an integrated software development partner, selling and integrating solutions, as well as providing support and consultation services. In 2016, Ellore’s sales revenue was €878 thousand euros, profit before taxes - 84 thousand euros. The major share of the activities is connected with card payment software distribution, integration services, and support.
Automation, robotics, artificial intelligence, selfpropelled machines – these are the words that we hear more and more often. Ellore created multiple new applications for the humanoid robot Pepper. The applications enable humanoid robot Pepper robot to assist customers in Telia Estonia headquarters,
welcome the guests at Virumaa Robotic museum, help to attract customers at Topo Centras electronics retailer in Lithuania. Robot Pepper with Ellore’s applications was presented in the biggest robotics and technology fair Robotex in Tallinn and Techtop 2017 Awards in Vilnius.
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Annual Report 2017 | Ellore
Smart Harbour
Ellore participated in Tallinn Smart Harbour Project by developing a middleware application for TS Laevad port traffic management system. The software solution we created, analyses and combines vehicle data received from different hardware sensors and forwards it to the Harbour Central Information system. The solution significantly reduces waiting time behind the barrier and thereby increases the capacity of the cashier lanes.
Integrations
Card payment solutions related services preserve a significant role in Ellore’s share of activities. During the year 2017, the volume of terminals serviced by Hansab companies has grown over 35 000 items. Ellore takes care of terminal’s software release management, remote updates delivery, and problem management. Ellore developed Smart terminal solution to Swedbank, continued to be a successor by reaching over 6000 items in the Baltic countries and extending the card payment acceptance within micro and small merchants. The contactless migration project, which started in 2016, concentrated to the integrators to upgrade their systems to accept Contactless Card Payments. Project included the change of software in the terminals, consultation of integrators and different software services. As 20 new partners who integrated Pos XML in their Electronic cash register system or kiosk solutions. 36
The applications enable humanoid robot Pepper robot to assist customers in Telia Estonia headquarters, welcome the guests at Virumaa Robotic museum, help to attract customers at Topo Centras electronics retailer in Lithuania.
Ellore takes care for Hansab Group IT infrastructure management and IT services. Everyday we service Hansab’s corporate IT systems including business applications, more than 100 servers and overall IT infrastructure. Ellore, in cooperation with Tallinn Technical University started to support students with annual scholarships, also providing opportunities for the academic practice to extend the students practical know-how and help kick start their career. In 2018 Ellore plans to introduce new Ingenico TETRA generation card payment terminals, which bring new functionalities to satisfy the most demanding expectations of merchants, retailers, and banks. We bring a consumer-centric approach to vertical markets (including hospitality, retail, vending, banks and acquirers, and transportation) with payment solutions to cover all points of transactions. We preserved the high customer (4.1) and employee (4.4) satisfaction indexes in 5 points scale system. Trust via the high indexes with continuous improvement of quality processes, following the ITIL principles and ISO standards create the solid base to growth together with our existing and new customers.
A NEW DIRECTION Tarmo Koreinik Managing Director Moya Member of the Board
For Moya, 2017 signifies a step forward towards a new business model to help manage risk, enable grow and offer more stability. While the revenues remained € 1.2 million, we collected approximately 32 million packages all over Estonia.
An important economic factor for Moya was the major change in the Estonian taxation system. The excise duty of alcohol was significantly increased by the government. As a result, collecting of empties was reduced by around 15%, as Estonians would purchase alcohol from Latvia. The change in legislation has had a major impact on Moya’s operations and turnover. We started a partnership with reverse vending machine manufacturer RVM Systems Ltd which is
a rapidly growing Scandinavian company active in different markets all over the world. One of our goals for 2017 was to implement innovative technology solutions. The new machines have more possibilities, they are easier to manage both, to the customer and for our employees. We are exceptionally proud that we managed to keep the number of our employees stable. As we are going forward with bigger goals this year, it is good for us to continue working with the same team. 37
Annual Report 2017 | Moya
Moya is actively working on enabling better conditions and possibilities for environmental protection. Our target is to collect non-deposit packages, minimum 50 tons per year, with an ambitious goal of 100 tons in 2019. Simultaneously, we started to offer new services in cooperation with Producer Responsibility Organisations, now additionally collecting non-deposit packages. One project has already begun - the installation of package containers near Moya collecting points. It is carried out in cooperation with Rimi Food Eesti and Producer Responsibility Organisation and Moya’s main responsibility is to ensure correct logistics and monitoring. Once the pilot project shows positive results, the same principle will be applied throughout other spots across Estonia. Additionally, we expanded our portfolio by servicing and maintaining self-service car wash stations, with focusing on cleaning exterior and maintenance rooms. In our activities, we follow ISO 9001, ISO 14001 and ISO 27001 certification from Bureau Veritas for quality management, environmental management and information security. For us, these certificates confirm that in addition to modern company culture, our processes are systematically organized. We implemented Moya’s new interior and exterior design which was one of the goals for 2017. It means that we start unifying all Moya’s empty return locations in near future so that all our spots would have the same and recognizable appearance. The design is modern, practical, easy to clean, and durable. The spots have now more natural light inside, that also means that it is more pleasant for the clients to stay there. 38
Moya is actively working on enabling better conditions and possibilities for environmental protection.
For the second year in a row, Moya sponsors one of the most promising discus throwers in Estonia, Priidu Niit. In 2017, he participated in the Baltic Championships, where he won the silver medal with the season’s best result. In addition, Priidu has been a valuable member of Moya IT and development team, especially while introducing the new recycling technology to the market. This year promises to be a rather ambitious one for Moya. We are introducing the new recycling technology to the market, moving to the new stock office, strengthening cooperation with our partners, such as real estate and producer responsibility companies and local area municipalities to better manage empties and waste. Combined, these strategic efforts should strengthen Moya’s position in the market, thus continuously helping to better manage waste in our region.
Head Offices and Contacts ESTONIA
LATVIA
Keevise 11, Tallinn, 11415
Piedrujas iela 7, LV-1073, Riga
Hansab Group OÜ +372 6059800
group@hansab.com
Hansab SIA
+371 67325550
hansab@hansab.lv
Hansab AS
Other offices: Daugavpils, Rezekne, Valmiera, Liepaja
+372 6059800
LITHUANIA
Keevise 11, Tallinn, 11415 hansab@hansab.ee
Other offices: Tartu, Pärnu, Jõhvi, Kuressaare, Kärdla Moya OÜ
Keevise 11, Tallinn, 11415 +372 6836440
Hansab UAB
Savanorių av. 180A, LT-03154, Vilnius +370 5 205 8800 info@hansab.lt
Other offices: Kaunas, Klaipėda, Šiauliai, Panevėžys
info@moya.ee Ellore OÜ
Keevise 11, Tallinn, 11415 +372 6059813
info@ellore.ee
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Annual Report 2017 | Map and Contacts
FINLAND
St.Petersburg
Helsinki
Jõhvi
SWEDEN
Tallinn
Kärdla
Stockholm
ESTONIA
Kuressaare
Baltic Sea
Valmiera
LATVIA Riga Liepāja
Klaipėda
Šiauliai
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Gdansk
POLAND
Rēzekne
Daugavpils
Panevėžys
LITHUANIA Kaunas
Kaliningrad
RUSSIA
Tartu
Pärnu
Vilnius
BELARUS Minsk
Annual Report 2017 | Notes
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OUR VISION IS TO BE THE LEADING PARTNER IN INNOVATIVE TECHNOLOGY SOLUTIONS
OUR MISSION IS TO HELP YOU BECOME SECURE AND EFFICIENT
