The page has turned
From an operative point of view, VEO’s year 2020 and net result were historic. The company had one of the best years ever in terms of profitability and cash flow.
For VEO’s CFO Petri Mäkinen, the long-term development of corporate finance shows that VEO has finally turned the page on both the deficit of 2018 and drastic restructuring in 2019.
In 2020 VEO reclaimed its position as a profitable company.
“This was the result of our employees’ dedication to their work. Our finance team was able to define and implement a significant improvement in terms of KPIs and financial reporting on a quarterly level, which enabled VEO to monitor and analyse its operations closely and take the necessary corrective measures when needed,” says Mäkinen before continuing:
“The fact that we were able to turn the net result and increase it manyfold from the year before is a great achievement. 2.1 million EUR in 2020 is something that everyone at VEO should be extremely proud of.”
The improved profitability provides an excellent starting point for VEO’s 5-year-strategy work, which began in late 2020 and will be finished by the middle of 2021. Petri Mäkinen sees the significantly improved profitability as an outcome of the employees’ perseverance and devotion, along with a systematic development of purchasing operations and cost savings especially related to travel. “Despite the uncertainty caused by COVID-19 and its negative impact for certain businesses, VEO’s employees were still able to improve their productivity as well as the project profitability during the year. The record-high opening backlog for 2021 provides us with promising prospects for the future as well”.
Another remarkable 2020 key figure was the VEO group cash flow. The net cash flow of EUR 6.4 million was the sum of numerous measures, such as negotiating projects with better payment terms, setting a goal for stock turnover, reducing the inventory, and enhancing the recovery of receivables.
“In Spring 2020 we decided, due to the pandemic, to actively seek measures to secure the company’s liquidity, which we succeeded to do excellently,” Mäkinen says with satisfaction.
Better economic outlook
Year 2020 was also the first complete year with more extensive financial reporting. The quarterly financial reporting concerning each business unit as well as the whole VEO group provided accurate data for the company’s decision-making and enabled corrective fact–based decisions.
“I feel that the finance team has succeeded in building a circle of trust with our business units. A mutual respect enables smooth cooperation. Year 2020 showed that fact–based financial data enabled us to make correct decisions faster and helped us to deliver one of the best results in the history of VEO.
A promising end to 2020
After a silent autumn in business industries due to the global pandemic, VEO has now started to receive good signs of a new upswing at the end of the year. VEO entered 2021 with an opening backlog that had grown 20% compared to last year.
“The good news for VEO’s employees is that there is much work to do in 2021 due to the strong order backlog. Year 2020 showed that we are definitely going in the right direction and need to continue our good work of further developing our operations and processes. This will enable profitability growth in the future”, states Mäkinen.
One of the first milestones in VEO’s 5-year-strategy is to further increase the company’s profitability. This means that the company aims to double its net result percentage.
“Although we still have many things to improve and a long way to go, we now know, after the success of year 2020, that VEO has talented and dedicated employees, who will together enable the company’s further improvement,” concludes Mäkinen.