Future outlook

Q1 2019

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position particularly in Northern America.

Demand for broadband services by cable operators continues to grow. Household broadband services are estimated to grow by 30-40 per cent a year. European cable operators have been able to competitively respond to the increasing demand by investing in DOCSIS 3.1 standard-compliant 1.2 GHz frequency range network upgrades. Investments in expansion of the traditional HFC network infrastructure frequency range continue, but operators are already planning investment in next-generation distributed access architecture network solutions. For years now, the cable industry, including Teleste, has been preparing for the next technology wave with which investment in cable network infrastructure can be competitively continued also in the years to come. We expect that new investment projects that are based on distributed access architecture will be launched in Europe and North America in 2019. The transition to the new access architecture requires careful preparation, and we expect that upgrade projects will increase and more and more operators will launch distributed architecture investment projects in 2020. Transition to distributed architecture provides Teleste with growth opportunities, but it also involves risks. Growth is enabled by the increased value of access network optical products as well as the possibility to use the technological transition to expand business into the North American markets. Achieving interoperability with the cable network central systems is the most significant risk. We estimate that net sales from access network products in 2019 will be on par with the previous year, including the launch of distributed architecture product sales.

Ensuring safety in city environments, increase of public transport services and the increasing popularity of smart digital systems for a smoother life provide a foundation for growing business. Public transport operators must ensure smooth running of services and infrastructure as well as passenger safety. Supply of real-time information for passengers is essential for flexible public transport. The public transport information systems market as well as video security and situational awareness systems market are expected to grow in 2019. The prices of traditional video security systems have fallen and competition has increased considerably. Video security solutions are becoming increasingly smart, including pattern recognition and artificial intelligence. Furthermore, a need is arising in the market for comprehensive situational awareness systems that include management of other sensor-level data flows in addition to video image and automate operating processes in exceptional situations. Ensuring competitiveness requires Teleste to continuously make R&D investments in new intelligent solutions. In addition, it is necessary to improve the productivity and cost-efficiency of business. The order backlog of video security and information solutions increased in 2018. Characterisitic for the business, a considerable proportion of deliveries will be distributed over several years. We estimate that net sales for video security and information solutions will continue to increase in 2019 from the previous year.

In Network Services, operators will increase their demand for various services as a result of changes in access architectures. As to Network Services, our business objective is to further develop operational efficiency and increase the share of those services that provide our customers with higher added value. In our largest market area, Germany, we will continue to improve the efficiency of operations, strengthen the capabilities of the organisation and renew the subcontractor network. In addition, we will invest in the continuous improvement of customer satisfaction. In 2018, we completed an important delivery project in Germany, and the forecast for 2019 does not include a similar project. Therefore, we estimate that net sales of Network Services will decrease in 2019 compared with the previous year.

Teleste expects the company's net sales to remain at the level of 2018 (EUR 250.3 million). Adjusted operating result is expected to increase compared with 2018 (EUR 9.7 million).

 

 

TELESTE CORPORATION   STOCK EXCHANGE RELEASE   6.3.2019   AT 14:50 EET

Extract from the release:

Profit warning:  There has been a crime against a subsidiary of Teleste, as a result of which Teleste records non-recurring costs of approximately EUR 7 million. Teleste gives a more precise financial outlook for 2019.

New guidance for the 2019 outlook

Teleste expects the company's net sales to remain at the level of 2018 (EUR 250.3 million). Adjusted operating result is expected to increase compared with 2018 (EUR 9.7 million).

Earlier guidance for the 2019 outlook

Teleste expects the company's net sales to remain at the level of 2018 (EUR 250.3 million). Operating result is expected to increase compared with 2018 (EUR 9.7 million).

 

Outlook for 2019

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position particularly in Northern America. Demand for broadband services by cable operators continues to grow. Household broadband services are estimated to grow by 30–40 per cent a year. European cable operators have been able to competitively respond to the increasing demand by investing in DOCSIS 3.1 standard-compliant 1.2 GHz frequency range network upgrades. Investments in expansion of the traditional HFC network infrastructure frequency range continue, but operators are already planning investment in next-generation distributed access architecture network solutions. For years now, the cable industry, including Teleste, has been preparing for the next technology wave with which investment in cable network infrastructure can be competitively continued also in the years to come. We expect that new investment projects that are based on distributed access architecture will be launched in Europe and North America in 2019. The transition to the new access architecture requires careful preparation, and we expect that upgrade projects will increase and more and more operators will launch distributed architecture investment projects in 2020. Transition to distributed architecture provides Teleste with growth opportunities, but it also involves risks. Growth is enabled by the increased value of access network optical products as well as the possibility to use the technological transition to expand business into the North American markets. Achieving interoperability with the cable network central systems is the most significant risk. We estimate that net sales from access network products in 2019 will be on par with the previous year, including the launch of distributed architecture product sales.

Ensuring safety in city environments, increase of public transport services and the increasing popularity of smart digital systems for a smoother life provide a foundation for growing business. Public transport operators must ensure smooth running of services and infrastructure as well as passenger safety. Supply of real-time information for passengers is essential for flexible public transport. The public transport information systems market as well as video security and situational awareness systems market are expected to grow in 2019. The prices of traditional video security systems have fallen and competition has increased considerably. Video security solutions are becoming increasingly smart, including pattern recognition and artificial intelligence. Furthermore, a need is arising in the market for comprehensive situational awareness systems that include management of other sensor-level data flows in addition to video image and automate operating processes in exceptional situations. Ensuring competitiveness requires Teleste to continuously make R&D investments in new intelligent solutions. In addition, it is necessary to improve the productivity and cost-efficiency of business. The order backlog of video security and information solutions increased in 2018. Characteristic for the business, a considerable proportion of deliveries will be distributed over several years. We estimate that net sales for video security and information solutions will continue to increase in 2019 from the previous year.

In Network Services, operators will increase their demand for various services as a result of changes in access architectures. As to Network Services, our business objective is to further develop operational efficiency and increase the share of those services that provide our customers with higher added value. In our largest market area, Germany, we will continue to improve the efficiency of operations, strengthen the capabilities of the organisation and renew the subcontractor network. In addition, we will invest in the continuous improvement of customer satisfaction. In 2018, we completed an important delivery project in Germany, and the forecast for 2019 does not include a similar project. Therefore, we estimate that net sales of Network Services will decrease in 2019 compared with the previous year.

Teleste expects the company’s net sales to remain at the level of 2018 (EUR 250.3 million). Operating result is expected to increase compared with 2018 (EUR 9.7 million).

 

 

Q3 2018

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. In particular, investments in the North American market will continue in 2018.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows cable operators to increase their network capacity competitively. In 2018, two network upgrade projects will be completed that are significant on the European scale. Operators will launch new upgrade projects. However, there is uncertainty associated with the timing of these projects, as operators are already planning next-generation distributed access architecture solutions. We expect that new investment projects that are based on distributed access architecture will be launched in Europe and, in particular, North America in 2018 and 2019. The change in access network technology also has an effect on suppliers' competitive position. Teleste continues investing in distributed access architecture technology and access network products that are suitable for new markets. In addition, the target of the subsidiary established in the US is to promote the sales of broadband network products to the cable network operators in North America. The objective of these investments is the long-term increase in sales. We estimate that net sales from access network products in 2018 will remain below the level of 2017.

The improvement of safety in city environments, the increase of public transport services, and the increasing popularity of smart systems for a smoother life provide a foundation for new business opportunities. Demand for video security solutions for public spaces continues worldwide, but competition in the industry has increased considerably and price erosion in the traditional video security equipment market continues. Video security solutions are becoming increasingly smart, including pattern recognition and artificial intelligence. Furthermore, a need is arising in the market for more comprehensive situation awareness systems that include management of other sensor-level data flows in addition to video image. New innovations and solutions are also changing the public transport passenger information solution business. Supply of real-time information for passengers is essential for safe and flexible public transport. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions. Although the orders received in 2017 for video security and information solutions increased, a significant portion of the deliveries is scheduled for the coming years. We estimate that net sales for 2018 will increase clearly from the previous year.

As to Network Services, our business objective is to further develop operational efficiency and increase the share of those services that provide our customers with higher added value. The negotiations to renew an important three-year frame agreement with a German customer were concluded and the new agreement was signed at the beginning of May. The new agreement will have a significant effect on the profitability of our services business. We estimate that net sales for 2018 will increase from the previous year.

Teleste expects the company's net sales to increase in 2018 compared with 2017 (EUR 234.6 million). Operating result is expected to be clearly positive. However, due to the ongoing investments, it will not yet reach the record level of 2016 (EUR 15.6 million).

 

 

Q2 2018

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. In particular, investments in the North American market will continue in 2018.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows cable operators to increase their network capacity competitively. In 2018, two network upgrade projects will be completed that are significant on the European scale. Operators will launch new upgrade projects. However, there is uncertainty associated with the timing of these projects, as operators are already considering next-generation distributed access architecture solutions. We expect that new investment projects that are based on distributed access architecture will be launched in Europe and, in particular, in North America in 2018 and 2019. The change in access network technology also has an effect on suppliers’ competitive position. Teleste continues investing in distributed access architecture technology and access network products that are suitable for new markets. In addition, the target of the subsidiary established in the US is to promote the sales of broadband network products to the cable network operators in North America. The objective of these investments is the long-term increase in sales. We estimate that net sales from access network products in 2018 will remain below the level of 2017.

The improvement of safety in city environments, the increase of public transport services, and the increasing popularity of smart systems for a smoother life provide a foundation for new business opportunities. Demand for video security solutions for public spaces continues worldwide, but competition in the industry has increased considerably and price erosion in the traditional video security equipment market continues. Video security solutions are becoming increasingly smart, including pattern recognition and artificial intelligence. Furthermore, a need is arising in the market for more comprehensive situation awareness systems that include management of other sensor-level data flows in addition to video image. New innovations and solutions are also changing the public transport passenger information solution business. Supply of real-time information for passengers is essential for safe and flexible public transport. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions. Although the orders received in 2017 for video security and information solutions increased, a significant portion of the deliveries is scheduled for the coming years. We estimate that net sales for 2018 will increase clearly from the previous year.

As to Network Services, our business objective is to further develop operational efficiency and increase the share of those services that provide our customers with higher added value. The negotiations to renew an important three-year frame agreement with a German customer were concluded and the new agreement was signed at the beginning of May. The new agreement will have a significant effect on the profitability of our services business. We estimate that net sales for 2018 will increase from the previous year.

Teleste expects the company’s net sales to increase in 2018 compared with 2017 (EUR 234.6 million). Operating result is expected to be clearly positive. However, due to the ongoing investments, it will not yet reach the record level of 2016 (EUR 15.6 million).

 

 

Q1 2018

 

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. In particular, investments in the North American market will continue in 2018.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows cable operators to increase their network capacity competitively. In 2018, two network upgrade projects will be completed that are significant on the European scale. Operators will launch new upgrade projects. However, there is uncertainty associated with the timing of these projects, as operators are already considering next-generation distributed access architecture solutions. We expect that new investment projects that are based on distributed access architecture will be launched in Europe and, in particular, in North America in 2018 and 2019. The change in access network technology also has an effect on suppliers’ competitive position. Teleste continues investing in distributed access architecture technology and access network products that are suitable for new markets. In addition, the target of the subsidiary established in the US is to promote the sales of broadband network products to the cable network operators in North America. The objective of these investments is the long-term increase in sales. We estimate that net sales from access network products in 2018 will reach the level of 2017.

The improvement of safety in city environments, the increase of public transport services, and the increasing popularity of smart systems for a smoother life provide a foundation for new business opportunities. Demand for video security solutions for public spaces continues worldwide, but competition in the industry has increased considerably and price erosion in the traditional video security equipment market continues. Video security solutions are becoming increasingly smart, including pattern recognition and artificial intelligence. Furthermore, a need is arising in the market for more comprehensive situation awareness systems that include management of other censor-level data flows in addition to video image. New innovations and solutions are also changing the public transport passenger information solution business. Supply of real-time information for passengers is essential for safe and flexible public transport. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions. Although the orders received in 2017 for video security and information solutions increased, a significant portion of the deliveries is scheduled for the coming years. We estimate that net sales for 2018 will increase clearly from the previous year.

As to Network Services, our business objective is to further develop operational efficiency and increase the share of those services that provide our customers with higher added value. The negotiations to renew an important three-year frame agreement with a German customer have entered the final stage. The outcome of the negotiations will have a significant effect on the profitability of our services business. We estimate that net sales for 2018 will increase from the previous year.

Teleste expects the company’s net sales to increase in 2018 compared with 2017 (EUR 234.6 million). Operating result is expected to be clearly positive. However, due to the ongoing investments, it will not yet reach the record level of 2016 (EUR 15.6 million).

 

Outlook for 2018

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. In particular, investments in the North American market will continue in 2018.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows cable operators to increase their network capacity competitively. In 2018, two network upgrade projects will be completed that are significant on the European scale. Operators will launch new upgrade projects. However, there is uncertainty associated with the timing of these projects, as operators are already considering next-generation distributed access architecture solutions. We expect that new investment projects that are based on distributed access architecture will be launched in Europe and, in particular, in North America in 2018. The change in access network technology also has an effect on suppliers’ competitive position. Teleste continues investing in distributed access architecture technology and access network products that are suitable for new markets. In addition, the target of the subsidiary established in the US is to promote the sales of broadband network products to the cable network operators in North America. The objective of these investments is the long-term increase in sales. We estimate that net sales from access network products in 2018 will reach the level of 2017.

The improvement of safety in city environments, the increase of public transport services, and the increasing popularity of smart systems for a smoother life provide a foundation for new business opportunities. Demand for video security solutions for public spaces continues worldwide, but competition in the industry has increased considerably and price erosion in the traditional video security equipment market continues. Video security solutions are becoming increasingly smart, including pattern recognition and artificial intelligence. Furthermore, a need is arising in the market for more comprehensive situation awareness systems that include management of other censor-level data flows in addition to video image. New innovations and solutions are also changing the public transport passenger information solution business. Supply of real-time information for passengers is essential for safe and flexible public transport. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions. Although the orders received in 2017 for video security and information solutions increased, a significant portion of the deliveries is scheduled for the coming years. We estimate that net sales for 2018 will increase clearly from the previous year.

As to Network Services, our business objective is to further develop operational efficiency and increase the share of those services that provide our customers with higher added value. The programme to improve profitability of the services business in Germany will be continued in 2018, and we expect the measures taken to show results during the first half of 2018. In addition, we are engaging in negotiations to renew an important frame agreement with a customer. We estimate that net sales for 2018 will increase from the previous year.

Teleste expects the company’s net sales to increase in 2018 compared with 2017 (EUR 234.6 million). Operating result is expected to be clearly positive. However, due to the ongoing investments, it will not yet reach the record level of 2016 (EUR 15.6 million).

 

Q3/2017

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. We estimate the demand for access network products in Europe to continue on a par with 2016. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows cable operators to increase their network capacity competitively. Our customers are becoming consolidated and our competitors are introducing their own DOCSIS 3.1 products to the market, resulting in pressure on the pricing of products. The American markets in particular are growing strongly, providing significant growth opportunities for Teleste’s access network products. In 2017, we have invested in access network products suitable for new markets and also established a subsidiary to promote the sales of broadband network products to cable network operators in North America. The objective of these investments is the long-term increase in sales.

Demand for video security solutions for public spaces continues worldwide, but some investment decisions may be delayed by the economic situation. Teleste’s video security solution for public space introduced in Paris provides new opportunities for other major cities of the world. The added value in the ecosystem has increasingly shifted to software and intelligence, and price erosion in the traditional video security equipment market continues. New innovations and solutions are also changing the rail industry passenger information solution business. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions. Although the orders received in the first half of 2017 for video security and information solutions clearly exceeded the previous year’s level, the weight of deliveries is on the coming years. 

As to Network Services, our business objective is to further develop operational efficiency and increase the share of those services that provide our customers with higher added value. Subcontracting costs of the services business in Germany have risen significantly, contributing to the loss made by the business, while the results of the profitability improvement programme have been delayed. For these reasons, there was an impairment in the goodwill of the German services business, and restructuring efforts aimed at improving profitability were launched. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the level of the previous year.

We estimate that net sales for 2017 will remain below the reference period and that the operating result for 2017 will remain clearly below the reference period level. The operating result for the second half of 2017 is expected to be considerably better than in the first half.

 

Q2/2017

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. The weight of net sales and operating profit of Video and Broadband Solutions will be on the second half of the year.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. We estimate the demand for access network products in Europe to continue at par with 2016. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows the cable operators to increase their network capacity competitively. Our clientele is becoming consolidated and our competitors are introducing their own DOCSIS 3.1 products in the market, resulting in pressure on the pricing of products. The American markets in particular are growing strongly, providing significant growth opportunities for Teleste’s access network products. In 2017, we have invested in access network products suitable for new markets and also established a subsidiary to promote the sales of broadband network products to the cable network operators in North America. The objective of the investments is the long-term increase in sales.

Demand for video security solutions for public spaces continues worldwide, but some investment decisions may be delayed by the economic situation. Teleste’s video security solution for public space introduced in Paris provides new opportunities for other major cities of the world. The added value in the ecosystem has increasingly shifted to software and intelligence, and price erosion in the traditional video security equipment market continues. New innovations and solutions are also changing the rail industry passenger information solution business. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions. Although the orders received in the first half of 2017 for video security and information solutions clearly exceeded the previous year’s level, the weight of deliveries is on the coming years. 

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher added value. Subcontracting costs of the services business in Germany have risen significantly, contributing to the loss made by the business, while the results of the profitability improvement programme have been delayed. For these reasons, there was an impairment in the goodwill of the German services business, and restructuring efforts aimed at improving profitability were launched. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the level of the previous year.

We also estimate that net sales for 2017 will remain below the reference period and that the operating result for 2017 will remain clearly below the reference period level. The operating result of the second half of 2017 is expected to be considerably better than in the first half.

 

New guidance for the 2017 outlook - 14th July 2017

We estimate that net sales for 2017 will be lower than in 2016 and that the operating profit for 2017 will be clearly lower than in 2016. The operating profit for the second half of the year is estimated to be clearly better than that for the first half of the year.

 

Outlook Q1/2017

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Due to the low order backlog, the weight of net sales and operating profit of Video and Broadband Solutions will be on the second half of the year.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. We estimate the demand for access network products in Europe to continue on a par with 2016. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows the cable operators to increase their network capacity competitively. Our clientele is becoming consolidated and our competitors are introducing their own DOCSIS 3.1 products in the market, resulting in pressure on the pricing of products. The American markets in particular are growing strongly, providing significant growth opportunities for Teleste’s access network products. In 2017, we will start investing in access network products that are suitable for new markets. The objective of the investments is the long-term increase in sales.

Demand for video security solutions for public spaces continues worldwide, but some investment decisions may be delayed by the economic situation. Teleste’s video security solution for public space introduced in Paris provides new opportunities for other major cities of the world. The added value in the ecosystem has increasingly shifted to software and intelligence, and price erosion in the traditional video security equipment market continues. New innovations and solutions are also changing the rail industry passenger information solution business. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher added value. Our aim is to improve the profitability of the provided services particularly in Germany. We are preparing to reorganise and adapt our services in Germany in accordance with our customers’ changing needs. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the level of the previous year.

We estimate that net sales and operating profit for 2017 will remain below the 2016 level, due to the low order backlog in the beginning of the financial period, the adaptation measures in services business in Germany and the investments in growth in new market areas.

 

Outlook for 2017

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Due to the low order backlog, the weight of net sales and operating profit of Video and Broadband Solutions will be on the second half of the year.

Network capacity will continue to grow, with operators responding to consumers’ new and expanding broadband and video service needs. We estimate the demand for access network products in Europe to continue at par with 2016. Teleste’s entire access network product portfolio has been renewed in accordance with the DOCSIS 3.1 standard, and our offering allows the cable operators to increase their network capacity competitively. Our clientele is becoming consolidated and our competitors are introducing their own DOCSIS 3.1 products in the market, resulting in pressure on the pricing of products. The American markets in particular are growing strongly, providing significant growth opportunities for Teleste’s access network products. In 2017, we will start investing in access network products that are suitable for new markets. The objective of the investments is the long-term increase in sales.

Demand for video security solutions for public spaces continues worldwide, but some investment decisions may be delayed by the economic situation. Teleste’s video security solution for public space introduced in Paris provides new opportunities for other major cities of the world. The added value in the ecosystem has increasingly shifted to software and intelligence, and price erosion in the traditional video security equipment market continues. New innovations and solutions are also changing the rail industry passenger information solution business. It is necessary to improve the productivity and cost-efficiency of traditional business. The improvement of competitiveness requires R&D investments in new intelligent solutions.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher added value. Our aim is to improve the profitability of the provided services particularly in Germany. We are preparing to reorganise and adapt our services in Germany in accordance with our customers’ changing needs. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the level of the previous year.

We estimate that net sales and operating profit for 2017 will remain below the 2016 level, due to the low order backlog in the beginning of the financial period, the adaptation measures in services business in Germany and the investments in growth in new market areas.

 

Outlook Q3/2016

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to grow driven by the new broadband and video services provided by the operators, even if some cable operators have shifted their network investments scheduled for 2016 over to the next year. Our new products in line with the DOCSIS 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the markets for video security and passenger information solutions will continue whereas the public sector decisions concerning the initiation of projects may be delayed by the current economic situation. The security solution for public areas introduced in Paris provides new opportunities for other major cities of the world. Train manufacturers and public transport operators benefit from Teleste's video security and passenger information solutions. 

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. Our aim is to improve the profitability of the provided services particularly in Germany. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level. 

We estimate that net sales and operating profit for 2016 will exceed the 2015 level. 

 

Outlook Q2/2016

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to grow driven by the new broadband and video services provided by the operators, even if some cable operators have shifted their network investments scheduled for 2016 over to the next year. Our new products in line with the DOCSIS 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the markets for video security and passenger information solutions will continue whereas the public sector decisions concerning the initiation of projects may be delayed by the current economic situation. The security solution for public areas introduced in Paris provides new opportunities for other major cities of the world. Train manufacturers and public transport operators benefit from Teleste's video security and passenger information solutions.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In the UK, our aim is to improve the profitability of the provided services. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level.

We estimate that net sales and operating profit for 2016 will exceed the 2015 level.

 

Outlook Q1/2016

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Our new products in line with the DOCSIS 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the markets for video security and passenger information solutions will continue whereas the public sector decisions concerning the initiation of projects may be delayed by the current economic situation. The security solution for public areas introduced in Paris provides new opportunities for other major cities of the world. Train manufacturers and public transport operators benefit from Teleste's video security and passenger information solutions.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In the UK, our aim is to improve the profitability of the provided services. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level.

We estimate that net sales and operating profit for 2016 will exceed the 2015 level.

 

Outlook for 2016

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Our new products in line with the Docsis 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the markets for video security and passenger information solutions will continue whereas the public sector decisions concerning initiation of projects may be delayed by the current economic situation. The security solution for public areas introduced in Paris provides new opportunities for other major cities of the world. Train manufacturers and public transport operators benefit from Teleste's video security and passenger information solutions.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In the UK, our aim is to improve the profitability of the provided services. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level.

We estimate that net sales and operating profit for 2016 will exceed the 2015 level.

 

Outlook Q3/2015

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Our new products in line with the Docsis 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the video security and passenger information markets will continue, but the public sector decisions concerning initiation of projects may be delayed by the current economic situation. In addition to organic growth, we estimate the Mitron acquisition to increase our net sales by more than EUR 22 million and its impact on our operating profit to be positive.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In line with this objective, we will continue to expand the new services business in the UK. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level.

We estimate that net sales and operating profit for 2015 will exceed the 2014 level.

 

Outlook Q2/2015

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Our new products in line with the Docsis 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the video security and passenger information markets will continue, but the public sector decisions concerning initiation of projects may be delayed by the current economic situation. In addition to organic growth, we estimate the Mitron acquisition to increase our net sales by more than EUR 22 million and its impact on our operating profit to be positive.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In line with this objective, we will continue to expand the new services business in the UK. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level.

We estimate that net sales and operating profit for 2015 will exceed the 2014 level.

 

Outlook Q1/2015

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to increase, driven by the new broadband and video services provided by the operators. Our new products in line with the Docsis 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the video security and rail information markets continue, but the public sector decisions concerning initiation of projects may be delayed by the current economic situation. In addition to organic growth, we estimate the Mitron acquisition to increase our net sales by more than EUR 22 million and its impact on our operating profit to be positive. 

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In line with this objective, we will continue to expand the new services business in the UK. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year’s level.

We estimate that net sales and operating profit for 2015 will exceed the 2014 level.
 

Outlook for 2015

The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to increase, driven by the new broadband and video services provided by the operators. Our new products in line with the Docsis 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the video surveillance and rail traffic data management market continues, but the public sector decisions concerning initiation of projects may be delayed by the current economic situation. In addition to organic growth, we estimate the Mitron acquisition to increase our net sales by more than EUR 22 million and its impact on our operating profit to be positive.

As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In line with this objective, we will continue to expand the new services business in the UK. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level.

We estimate that net sales and operating profit for 2015 will exceed the 2014 level.

 

Outlook Q3/2014

Video and Broadband Solutions aim at maintaining a strong market position in Europe and expand into selected new markets. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. New products in line with communication standard Docsis 3.1 will enable network operators to activate their investments. Price erosion in the market continues. The positive trend in the video surveillance market will continue, but the public sector decisions to start projects may be delayed in the current economic climate.

The business objective of Network Services is to develop the operational efficiency and increase their services business requiring higher level of competence. We estimate the demand for comprehensive network services in our key target markets to continue at par with the comparative year.


New guidance for the 2014 outlook

We estimate that net sales for 2014 will reach 2013 level, while operating profit is likely to fall from the 2013 level.


Previous guidance for the 2014 outlook

We estimate that net sales and operating profit for the year 2014 will not reach the 2013 level.

 

Outlook Q2/2014

Video and Broadband Solutions aim at maintaining a strong market position in Europe and expand into selected new markets. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. New products in line with communication standard Docsis 3.1 will enable network operators to activate their investments in the rest of the year. Price erosion in the market continues. The positive trend in the video surveillance market will continue, but the public sector decisions to start projects may be delayed in the current economic climate. We estimate profitability of Video and Broadband Solutions to improve compared to the first half of the year.

The business objective of Network Services is to develop the operational efficiency and give up any unprofitable services activities during the year. We estimate the demand for comprehensive network services in our key target markets to continue at par with the comparative year and the profitability to improve compared to the first half of the year.

We estimate that net sales and operating profit for the year 2014 will not reach the 2013 level.

 

Outlook Q1/2014

Video and Broadband Solutions aim at maintaining a strong market position in Europe and expand into selected new markets. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Limited product offering of the new Docsis 3.1 communications standard may delay the network investments in the beginning of the year. Price erosion in the market continues. The positive trend in the video surveillance market will continue, but the public sector decisions to start projects may be delayed in the current economic climate. We estimate the market conditions of Video and Broadband Solutions to fluctuate greatly during the year.


The business objective of Network Services is to develop the operational efficiency and give up any unprofitable services activities during the year. These measures will be taken to create conditions for better business profitability over the reference year, but these will have a slight reducing effect on net sales. We estimate the demand for comprehensive network services in our key target markets to continue at par with the comparative year.


We estimate net sales and operating profit for the first half of 2014 to fall clearly from the comparative period. Due to this, we estimate that net sales and operating profit for the full year of 2014 will not reach the 2013 level.

Outlook for 2014  

Video and Broadband Solutions aim at maintaining a strong market position in Europe and expand into selected new markets. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Limited product offering of the new Docsis 3.1 communications standard may delay the network investments in the beginning of the year. Price erosion in the market continues. The positive trend in the video surveillance market will continue, but the public sector decisions to start projects may be delayed in the current economic climate. We estimate the market for Video and Broadband Solutions to fluctuate greatly during the year and the demand to be emphasized on the second half of the year.

The business objective of Network Services is to develop the operational efficiency and give up any unprofitable services activities during the year. These measures will be taken to create conditions for better business profitability over the reference year, but these will have a slight reducing effect on net sales. We estimate the demand for comprehensive network services in our key target markets to continue at par with the comparative year.

We estimate net sales and operating profit for the first half of 2014 to fall clearly from the comparative period. Due to this, we estimate that net sales and operating profit for the full year of 2014 will not reach the 2013 level.

Outlook Q3/2013

Network capacity will continue to increase driven by the new video services provided by the operators. However, comparisons made by the operators concerning the future access network technologies could delay the launch of investments. We estimate profitability of Video and Broadband Solutions to improve over the comparative period.

We estimate profitability of Network Services to remain below the comparative period.  

We expect net sales and operating profit for 2013 to reach the 2012 level.

Outlook Q2/2013

Network capacity will continue to increase driven by the new video services provided by the operators. However, comparisons made by the operators concerning the future access network technologies could delay the launch of investments. We estimate profitability of Video and Broadband Solutions to improve over the comparative period.

We estimate profitability of Network Services to remain below the comparative period.

We expect net sales and operating profit for 2013 to reach the 2012 level.

Outlook Q1/2013

Given the new video services offered by the operators, there is a continuous need for increased cable network capacity, so we estimate the deliveries by Video and Broadband Solutions in our target markets to reach at least the 2012 level. In our view, investments by cable operators will be given more weight during the second half of the year.

We estimate that Network Services' net sales in our target markets will reach at least the 2012 level and that the profitability will improve from the 2012 level with the developments in productivity.

We expect net sales and operating profit for 2013 to reach the 2012 level. In our assessment, net sales and operating profit for the first half of 2013 will remain below the comparative period.

Outlook for 2013

Given the new video services offered by the operators, there is a continuous need for increased cable network capacity, so we estimate the deliveries by Video and Broadband Solutions in our target markets to reach at least the 2012 level. In our view, investments by cable operators will fall on the second half of the year,  i.e. investments will be given more weight during the second half of the year.

We estimate that Network Services' net sales in our target markets will reach at least the 2012 level and that the profitability will improve from the 2012 level with the developments in productivity.

We expect net sales and operating profit for 2013 to reach the 2012 level. In our assessment, net sales and operating profit for the first half of 2013 will remain below the comparative period.

Outlook Q3/2012

In terms of the whole year, we estimate that deliveries of equipment and solutions for the operator clientele of Video and Broadband Solutions will increase from the 2011 level.

On the annual basis, demand by the current clientele of Network Services will remain stable. Profitability in our main market of Germany will improve markedly for the entire year over the 2011 level.

Net sales and profitability for Teleste's fourth quarter of 2012 will fall short of the comparative period due to leveling off in demand.

We estimate that the 2012 net sales and operating profit will increase from the level of 2011.

Outlook Q2/2012

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. Major sports events held in summer 2012 bring down the upgrading of networks also in the third quarter. Due to the strong fourth quarter of the reference period, achieving equal profitability in the remainder of the year will be a challenge.


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.

Outlook Q1/2012

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.​

Outlook for 2012

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.

Interim report Q3/2011

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.

​Interim report Q2/2011

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.​

Interim report Q1/2011

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.​

Outlook for 2011

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.

Interim report Q3/2010

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.​

Interim report Q2/2010

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.

​Interim report Q1/2010

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

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.

Interim report Q3/2009

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.

Interim report Q2/2009

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.

​Interim report Q1/2009

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.