Future Outlook
We estimate that deliveries of equipment and solutions for the operator clientele of Video and Broadband Solutions will increase from the 2011 level. European telecom operators are about to launch their investments into the TV distribution infrastructure, and we believe that our video headend and optical network products will be competitive in this new emerging market. Also, the network capacity will continue to increase driven by the new video services provided by the operators. The big sports events to be held in summer 2012 may slow down the upgrading of networks in the second and third quarters.
On the annual basis, demand by our current clientele for the services provided by Network Services will remain relatively stable. In the main market area of Germany, we expect profitability to improve from the 2011 level with the gradual introduction of the efficiency measures.
We estimate the 2012 net sales and operating profit to increase from the level of 2011.
In our estimation, deliveries of equipment and solutions in 2012 for the operator clientele by Video and Broadband Solutions will reach at least the 2011 level. European telecom operators have launched TV distribution infrastructure investments, and in our view, Teleste's optical products and IP network solutions are competitive in this new emerging market.
In our estimate, demand on the annual level for services by Network Services continues relatively stable. We believe that in the main market area of Germany the operating profit will improve from the 2011 level due to more efficient resource management.
Net sales and operating profit will grow over the 2011 level.
In 2011, deliveries of equipment and solutions by Video and Broadband Solutions to its customer base of operators in our target markets will, in our estimation, at least achieve the level of 2010. European telecom operators have launched their investments into the TV distribution infrastructure, and we believe that our video headend and optical network products will be competitive in this new emerging market. Due to postponements in a number of medium-sized projects Teleste's deliveries related to security and traffic control will remain at the level of the comparative period.
On the annual basis, demand by our current clientele for the services provided by Network Services will remain relatively active. We expect that in Germany, the main market, profitability for the current year will improve from the 2010 level with the increase in net sales and the gradual introduction of the streamlining measures.
We keep the outlook for 2011 unchanged. We estimate net sales to increase slightly and the operating profit to improve somewhat over the 2010 level.
In 2011, deliveries of equipment and solutions by Video and Broadband Solutions to its customer base of operators in our target markets will, in our estimation, at least achieve the level of 2010. European telecom operators are about to launch their investments into the TV distribution infrastructure, and we believe that our video headend and optical network products will be competitive in this new emerging market. Deliveries related to security and traffic control may remain at the comparative period's level due to postponements in a number of medium-sized projects.
On the annual basis, demand by our current clientele for the services provided by Network Services will remain relatively active. We expect that in Germany, the main market, profitability for the current year will improve from the 2010 level with the increase in net sales and the gradual introduction of the streamlining measures.
We keep the outlook for year 2011 unchanged. We estimate net sales to increase slightly and the operating profit to improve somewhat over the 2010 level. Improvement in the operating profit depends on the scheduled execution of the development program for the German services operations in the latter part of the year.
In 2011, deliveries of equipment and solutions by Video and Broadband Solutions to its customer base of operators in our target markets will at least achieve the level of 2010. European telecom operators are about to launch their investments into the TV distribution infrastructure, and we believe that our video headend and optical network products will be competitive in this new emerging market. Deliveries related to security and traffic control may remain at the reference year's level due to postponements in a number of medium-sized projects.
On the annual basis, demand by our current clientele for the services provided by Network Services will remain relatively stable. We expect that in Germany, the main market, profitability will improve from the 2010 level with the gradual introduction of the development program. In our estimation, most of the improvement in profitability will be seen on the second half of the year.
We estimate net sales for the entire 2011 to increase slightly and the operating profit to improve somewhat over the 2010 level. Improvement in the operating profit depends on the scheduled execution of the development program for the German services operations.
In 2011, deliveries of equipment and solutions by Video and Broadband Solutions to its customer base of operators in our target markets will at least achieve the level of 2010. European telecom operators are about to launch their TV distribution investments, and we believe that our video headend and optical network products are competitive in this new emerging market. Deliveries related to security and traffic control will grow from the 2010 level.
Demand for services provided by Network Services will remain relatively stable on the annual basis. We believe that in Germany, our main market, profitability will improve from the 2010 level thanks to the ongoing streamlining measures. This improvement in profitability will, in our estimation, mainly be seen in the second half of 2011.
Teleste expects to maintain its strong market position in its core markets. Severe weather conditions in Central Europe and the low order backlog of the early year may hold back our deliveries in the first quarter of 2011.
We believe the net sales for the entire 2011 to increase slightly and the operating profit to improve somewhat over the 2010 level.
Cautious approach to network investments is likely to continue among the operator clientele of Video and Broadband Solutions even for the rest of the year. Nevertheless, we believe the deliveries will continue at least on the level of 2009.
We estimate the demand by the current clientele of Network Services to remain stable on an annual level but with some fluctuation between the quarters. The strategic investments already carried out ensure that our net sales will improve over last year.
Due to increased net sales and adaptation of costs we estimate the operating profit for 2010 to improve clearly over 2009.
Cautious approach to network investments is likely to continue among the operator clientele of Video and Broadband Solutions. Nevertheless, we believe the deliveries will continue at least on the level of 2009.
We estimate the demand by the current clientele of Network Services to continue steady. The strategic investments already carried out ensure that our net sales will improve from last year.
Due to increased net sales and adaptation of costs we estimate the operating profit for 2010 to improve clearly over 2009.
Cautious approach to network investments is likely to continue among the operator clientele of Video and Broadband Solutions. Nevertheless, we believe the deliveries will continue at least on the level of 2009.
We estimate the demand from the current clientele of Network Services to continue steady. The realized acquisitions ensure that the net sales will improve considerably from last year.
Due to increased net sales and adaptation of costs we estimate the operating profit to improve clearly over 2009.
Outlook for 2010 In Teleste´s estimation, the offering of services to private households by the operator clientele of Broadband Cable Networks will remain relatively stable even in an uncertain market situation. The demand for network services provided by Broadband Cable Networks will remain stable, but owing to the difficult situation in the financial market the cable operators continue to be cautious with regard to their network investments.
In our view, deliveries involving product solutions offered by Broadband Cable Networks in 2010 will remain at least on the same level with 2009. Net sales of the business area will grow owing to the increased offering of services. However, the exceptionally cold winter in Europe makes network installation works difficult in Q1. Moreover, significant sporting events scheduled for the first half of 2010 may delay the upgrading of networks.
As for the markets of the Video Networks business area, increased needs for security and more effective traffic infrastructure allow for a cautious growth in net sales in 2010.
Teleste is confident about keeping its strong market position in the core markets and continues to implement its strategy in a goal-directed manner while adapting its cost structure as required by the economic situation. In an uncertain market situation, the recent strategic investments made in the services business enable the net sales to grow from the 2009 level. Bearing in mind increased net sales and the adaptation of costs we estimate the operating profit to improve over 2009.
Owing to the offering of services by the Group, changes will be made to the segment reporting as from the beginning of 2010. The new segments include Video and Broadband Solutions with the emphasis on products, and Network Services focusing on the services business. The product and system solutions consisting of Broadband Cable Networks and Video Networks will be combined under the Video and Broadband Solutions business area, whereas Network Services will include the network maintenance and planning services.
The offering of services to private households by the operator clientele of Broadband Cable Networks will remain relatively stable even in an uncertain market situation. Demand for network services provided by the business area is increasing in Germany. Due to the difficult situation in the financial markets, the cable operators continue to proceed cautiously with regard to their network investments. In our view, in the current year, deliveries of product solutions provided by Broadband Cable Networks will remain clearly under the 2008 level with the price competition continuing further. Net sales of the business area is growing owing to the increased offering of services.
Increased needs for security and more effective traffic infrastructure maintain demand for the Video Networks' solutions on the same level with the previous year.
Teleste is confident about keeping its strong market position in the core markets and continues to implement its strategy in a goal-directed manner while adapting its cost structure as required by the economic situation. The recent strategic investments in network services business performed by Teleste will cushion the cyclic pattern in the company net sales under the uncertain market conditions.
As a result of decreased demand for network investments, the Group's action plan prepares for sales in products and systems falling below the level of the previous year. Given the increased offering of network services we estimate net sales to exceed the last year's level, whereas operating profit will fall clearly from the last year's level.
The offering of services to private households by the operator clientele of Broadband Cable Networks will remain relatively stable even in an uncertain market situation. Demand for network services provided by the business area will remain strong in Germany. Due to the difficult situation in the financial markets, the cable operators are proceeding cautiously with regard to their network investments. In our view, in the current year, deliveries of product solutions provided by Broadband Cable Networks will remain under the 2008 level with the price competition increasing further.
Increased needs for security and more effective traffic infrastructure maintain demand for the Video Networks' solutions on the same level with the last year.
Teleste is confident about keeping its strong market position in the core markets and continues to implement its strategy in a goal-directed manner while adapting its cost structure as required by the economic situation. The recent strategic investments in the services business performed by Teleste will cushion the cyclic pattern in the company net sales under the uncertain market conditions.
Owing to decreased demand for network investments, Teleste's action plan makes preparations for sales in product and systems falling below the level of the previous year. As a result of our increased services business, we estimate our net sales to end up at least on a par with last year, whereas operating profit for the whole year will fall clearly short of the previous year's level.
The offering of services to private households by the operator clientele of Broadband Cable Networks will remain relatively stable even in an uncertain market situation. Demand for the network services provided by the business area is growing particularly in Germany. Due to the difficult situation in the financial markets the cable operators are proceeding cautiously with regard to their network investments. In our view, in the current year deliveries of product solutions provided by Broadband Cable Networks will remain under the 2008 level with the price competition increasing further.
Increased needs for security and more effective traffic infrastructure maintain demand for the Video Networks' solutions on the same level with the previous year.
Teleste will keep its strong market position in the core markets and continue to implement its strategy in a goal-directed manner while adapting its cost structure as required by the economic situation. The recent strategic investments in the services business performed by Teleste will cushion the cyclic pattern in the company net sales under the uncertain market conditions.
Due to delays in network investments the company action plan prepares for net sales lower than that of the previous year and for a clear drop in profitability in the first half of the year. In the second half of the year, we expect the market to pick up to some degree based on the investment plans of the operators. However, we estimate that profitability for the whole year will fall clearly from the last year's level.