Financial Statements 1.1.-31.12.2018

Report by the Board of Directors and Financial Statements 2018

Empower Oyj is the parent company of the Empower Group, and it started operating in December 2015 in connection with the corporate restructuring of the Group. Empower Group was established in 1998 in connection with the incorporation of PVO’s network construction and maintenance functions.

Empower Oyj applies IFRS accounting principles in its consolidated financial statements.

Key figures

















Review of the company’s business operations, financial position, results and other factors that have an effect on business development

Empower is an international service and digital platform provider that is realizing a smart society.

Our business consists of maintaining power plants and factories, executing energy market operations and building and maintaining smart power networks and telecommunications connections. We develop digital solutions based on our long-term experience in the above-mentioned businesses. We also develop modular software and provide services that help our energy sector customers manage their data flows and Big Data. We operate in the Nordic and Baltic countries.

In the financial period 2018, the Empower Group’s turnover grew by 3.0 percent.

The turnover by country and business area is shown in the tables below.

Turnover per country

 EUR million                                        2018                2017           change %  
 Finland              178,0           194,3                    -8,4
 Estonia               35,5            23,2                    53,1
 Sweden                      24,0             17,9                   34,0 
 Latvia               13,2             14,0                    -6,1
 Lithuania                2,0              2,8                  -26,6
 Other                0,0             -6,8    
 Group            252,7            245,3                     3,0


Turnover per business area

 EUR million                                        2018                2017            change %  
 Power              120,9             111,8                      8,1
 Connectivity               59,2             47,5                    24,5
 Smart Industry                      47,3             67,8                   -30,3
 Energy Intelligence              25,2             25,0                       1,1
 Other                0,0             -6,8  
 Group            252,7            245,3                      3,0


The turnover of the Power, Connectivity and Energy Intelligence business areas grew due to our competitive service and product portfolio. The decrease in turnover of the Smart Industry business area was due to the expiry of one outsourcing contract. The Group’s order book strengthened further during the financial period, and at the beginning of the 2019 financial period, the order book already covered more than 80 percent of the turnover target for 2019.

Empower Group’s EBITDA for the financial period 2018 amounted to EUR 8.9 million, decreasing slightly year-on-year.

EBITDA by country and business area is shown in the tables below.

EBITDA per country

                      2018                     2017         change %  
        1 000 €        % of turnover           1 000 €        % of turnover              1 000 €
 Finland                                     6 754                       3,8           14 613                       7,5              -7 859
 Sweden              -757                      -2,1             1 488                       6,4              -2 245
 Estonia              920                       3,8             -600                      -3,4                1 520
 Latvia            1 788                      13,6               703                       5,0                1 085
 Lithuania              245                      12,0               193                       6,9                    52
 Other               -45                         -45
 Group           8 905                       3,5           16 397                       6,7               -7 492


EBITDA per business area

                      2018                     2017         change %  
        1 000 €        % of turnover           1 000 €        % of turnover              1 000 €
 Power                994                       0,8            3 701                       3,3                -2707
 Connectivity            -1 817                      -3,1            1 266                       2,7                3 082
 Smart Industry            3 797                        8,0            6 479                       9,6               2 682
 Energy Intelligence                   5 231                      20,7            4 989                     20,0                  243
 Other              699                 -38                     737
 Group           8 905                       3,5           16 397                       6,7               -7 492


The change in EBITDA was due to slimmer project margins than expected in parts of the projects Connectivity and Power business areas. In addition, the unfavorable competitive market situation impacted the EBITDA of the Power and Connectivity business areas. The EBITDA of the Connectivity business areas was also impacted by a quick expansion of business required by new significant contracts. In the Smart Industry and Energy Intelligence business areas, EBITDA was at a satisfactory level. The EBITDA outlook for 2019 is more favorable in all business areas than in 2018.

A loss of EUR 2.6 million was recorded in the Empower Group’s profit and loss statement for 2018 due to the completion of projects in the discontinued operations. The incoming and outgoing cash flows of the discontinued operations were low at the end of 2018, so their separate reporting was discontinued at the end of the financial period.

Projects progressing slowly during the first months of the year due to the cyclical nature of the business and the impact of discontinued operations reduced the Group’s cash flow in the financial period 2018, which tightened the companies’ liquidity and lead to breaches of covenants in the Group’s financing agreements. The cash situation was brought to a manageable level by the end of the year due to EUR 8 million of senior loan funding granted to the Group in May and systematic program to increase cash flow efficiency that continued throughout the financial period. The stable and growing order book and the continuation of future megatrends contributed to the recovery of the cash situation through profitable business operations.

The Group's key figures

 EUR million                 2018                 2017  
 Turnover 252,7   245,3  
 EBITDA 8,9   16,4  
 Continuing operations, profit for the period      -6,8   0,5  
 Discontinued operations, profit for the period    -2,6   3,2  
 Profit for the period -9,5   3,6  


Significant events during and after the financial period

During 2018, Empower’s business operations developed favorably. The order book realizing in and after 2019 grew in all business areas. The expansion and diversification of the customer base continued, too. On the basis of the feedback surveys conducted, Empower’s customer satisfaction and loyalty was good.

The renewable energy megatrend that supports growth in the Power business areas continued to be very strong globally. In particular, the increase in the indirect demand for wind power in both corporate and consumer sectors was clearly reflected in a significant increase in wind farm construction projects. Also, the payback times and returns of wind power have financially overcome many non-renewable energy sources.  Empower was selected to construct the first completely market-term wind farms in Finland, and the company’s renewable energy project portfolio also grew significantly in Sweden. Moreover, the company secured major power transmission construction projects in Sweden and agreed on the delivery of the first digital electrical substation in the Finnish main grid.

In the Connectivity business, Empower strengthened its leading position in Finland, with the delivery of new significant customer contracts commencing during the first quarter of the financial period. The position was further strengthened with the expansion of Empower’s customer agreements. The fully digital delivery process solidified quality leadership, and a partnership with a vendor known for space technology introduced AR remote work to Empower’s operations.

In the Smart Industry operations, the work for developing digital products yielded good results. The company established a Smart Factory in Hamina, and the company’s maintenance center and workshop operations were transferred there from other locations. In the Smart Factory, conventional industry will operate using the possibilities provided by state-of-the art technology, such as IoT and 5G solutions. The transparency of the operations provides up-to-date information for everyone to use from every level of the in-house organization to customers and subcontractors. It provides almost limitless opportunities for improving the efficiency of operations and optimizing production conditions. In addition, several digital offers and pilots were made for old and new customers to further strengthen the maintenance and service operations for production plants. Regional services managed to grow their business, with the exception of the expiry of one outsourcing contract.

The Energy Intelligence business strengthened its position as the market leader in Finland. The market position expanded in the Nordic countries with a significant CIS delivery in Sweden and Norway, for example. The development of the Enerim platform proceeded as expected, making several new modules available to our customers. Empower’s market share continued to grow strongly with the acquisition of new customers in customer information system deliveries to energy companies. The demand for Energy Intelligence services increased significantly during the financial period and customer loyalty remained extremely high.

Empower has made significant investments in developing both functional processes and new service offering using digitalization and new technological innovations. Examples of the investments made are the fully digital delivery process supporting quality leadership in the Connectivity business area, the establishment of the Smart Factory in Hamina, our safety solution EmSafe that has attracted international interest, and the EmTEM solution for managing the grounding of power networks during work.

Research and development

In order to facilitate high-quality, customer-driven operations and efficient service development in the future as well, the Empower Group significantly strengthened its R&D organization and will continue the development of a secure and reliable technology platform for future customer needs.

The Empower Group’s companies carried out platform-related R&D projects in the development of information systems related to energy measurements and invoicing as well as in the work planning and control systems related to the installation and maintenance of telecom and power networks. The company also invested heavily in digital products and solutions that enhance safety and production efficiency.

During the financial period 2018, the R&D costs of the Group’s companies stood at EUR 8.7 million (EUR 7.9 million), comprising 3.4 per cent (3.2 percent) of their turnover.


During the financial period, the information system, maintenance and annual investments of the Empower Group’s companies totaled EUR 12.5 million (EUR 7.5 million).

                  2018                 2017  
 Number of personnel average      
    Continued business 1 629   1 661  
    Discontinued business      14   22  
 Salaries and wages     70 833   73 475  
Estimate of future development and business outlook

At the end of 2018, the Group’s order book was very good and distributed over several future years. The outlook concerning profitability is good in the Smart Industry and Energy Intelligence business areas. As a result of programs launched to improve efficiency and improving market situation, profitability is expected to increase in the Power and Connectivity business areas.  Turnover is expected to grow moderately to ensure quality and efficiency.

Estimate of risks

The Group’s financial performance is influenced by the sector risks of the largest customer segments. Should these risks materialise, they may reduce demand for the services of Empower Group’s companies.

The Empower Group’s companies have some large solvent customers, and their purchasing behaviour may have a significant impact on the result of the sectors of the business operations in question.

The price risk of material and equipment purchases is minimised through agreements. Salary, service and material purchase costs can be transferred to sales prices, partially or with a delay.

The company has large projects in which incidents in the subcontracting and material chain are possible due to qualitative or functional issues, for instance.

The Group companies have insurance policies for liability for damage or loss to material or property.

Risks associated with the sufficiency of the Group’s financing are discussed below under “Going concern”, but in general, risks associated with financing and liquidity are possible because the company’s project business requires millions of euros of capital. The company is also exposed to SEK/EUR currency risk, mainly regarding the SEK net exposures of the Power business area, which are regularly hedged with a time horizon of 6–12 months, but as the projects last for up to more than 3 years, fully solid hedging is not possible or financially feasible. The SEK hedging has commenced in the first quarter in 2019.

Going concern

The company’s mezzanine financiers converted a total of EUR 28.25 million of their receivables into the company’s equity as Class B shares. This share capital increase was subscribed for in December 2017 and registered in April 2018. Along with the conversion, the Empower Group’s equity turned positive in first half of 2018, but returned negative by 31.12.2018. An agreement was concluded in March 2018 by which the previous loan period of the bank loans received by the company from the financing companies was extended until the end of July 2019. At the end of 2018, the loans were accounted for as current liabilities, and their restructuring is due in July 2019. The company is not aware of any threatening legal action or ending customer agreement which could materially reduce EBITDA or cash flow.

The Group’s balance sheet structure is indebted and the Group is engaged in continuous discussions with its financiers in order to improve the situation. As result of these negotiations, 5M€ loan arrangement was agreed with senior lender in June 2019 in order to ensure going concern.  The Group’s current senior loans become due during July and August 2019. The going concern is depended on the related financing negotiations and the Group expects these negotiations to be successful and as consequence resulting to extension of the financing with improved terms. On the other hand, the development of the profitability of the Group’s continuing operations is expected to improve, which will have a further positive impact on cash flow. The Group’s liquidity is therefore expected to develop positively and in accordance with the normal seasonal variation, particularly during the second half of the year. The company keeps its financiers regularly up to date by means of reports and negotiations and, according to the company’s understanding, the financiers are well aware of the status and outlook of the company’s business operations. The financiers have had a consistent stand on the company’s continuing covenant breaches.

The company’s shares

The parent company has a total of 1,600,000 shares, divided into 1,000,000 A shares which include a right to vote and 600,000 B shares without a right to vote. The B shares have a priority over A shares to dividends, as described in more detail in the Articles of Association.

Legal disputes

In 2013, the Finnish Competition and Consumer Authority conducted an investigation in the Group’s subsidiary Empower IN Oy and the Group’s then parent company TPI Holding Oy to find out whether Empower IN Oy (formerly Empower Oy) had participated in actions in breach of competition law in Finland in the business of constructing and designing of high voltage transmission lines during the previous decade. The investigation was initiated by Empower IN Oy as it had been made aware of such claims. The companies belonging to the Empower Group, including Empower Oyj, are therefore released from paying any fines. With its (non-final) decision of 30 March 2016, the Market Court rejected the Finnish Competition and Consumer Authority’s claim for a fine as statute-barred. The authority has appealed to the Supreme Administrative Court. If the Supreme Administrative Court concludes in a final decision that Empower IN Oy (formerly Empower Oy) is guilty of having acted in breach of competition law, this may lead to claims for damages. Based on the information available at this stage, the company’s Board of Directors does not consider it necessary to make a related provision in the annual accounts.

The company’s management

Members of Empower Oyj’s Board of Directors during the financial period were:

Ordinary members:

Bo Elisson (Chair)

Johan Bjurström

Rainer Häggblom

Matti Manninen

Kristofer Runnquist (Jan 1–May 29, 2018)

Tommy Wikström (May 29–Dec 31, 2018)

President and CEO:

Jari Onniselkä


Ernst & Young Oy, authorized public accountants, with Anders Svennas acting as the principal auditor.

Proposals of the Board of Directors to the Annual General Meeting

The Board of Directors proposes to the Annual General Meeting that the company’s loss for the period, EUR -6 658 830.13, be transferred to retained earnings on the balance sheet and that no dividend be distributed.

Annual Report 2018

The whole Annual Report can be downloaded as a PDF file. The report consists of the Annual Review and the Financial Statements for 2018.

Annual Report 2018