hansab group annual report 2015

Hansab Group Annual Report 2014

Design by Greta Babarskaite

3Hansab Group Annual Report 2014

This year’s annual report is dedicated to Heikki Rosendahl and his many years of cooperation with Hansab.

Aigar Urva

Our vision is to be the leading partner in

innovative technology solutions.

Our mission is to help you be secure and efficient.

4

About the company......................................................... 6 Reaching New Heights ................................................. 10

Financial Results of Hansab Group in 2014 ................ 12

Concentrating on Mobility ............................................. 18

Working For Efficient and Stable Services ................... 20

Maintaining an Enjoyable Work Culture while Expanding ........................................................... 22

Offering a Customer-Driven Brand Experience ............ 24

A Strategy Fulfilled........................................................ 26

The Beginning of Operations in Finland ....................... 28

A Year of Adjustments................................................... 30

20 Years of Improvement at UAB Hansab .................... 32

Ellore in 2014 - More Integration in the Everyday Work of Hansab Group .......................................................... 34

Creating a Brand with a Sustainable Perspective ........ 36

Aigar UrvaCEO and Founderof Hansab Group Companies

Jaak ÕunpuuCFO of Hansab Group

Margus TammojaDevelopment and IT Manager of Hansab Group

Algo PuuseppService Manager of Hansab Group

Annika Urva-RonkHuman Resources Manager of Hansab Group

Sigita BabarskaitėMarketing and Communications manager of Hansab Group

Janno Kallikorm Managing Director of Hansab AS

Kristo KaljuveeHansab OY Sales Director

Darius ŽekonisManaging Director of Hansab UAB

Ričards BataragsManaging Director of Hansab UAB

Alar AlumaaManaging Directorof Ellore OÜ

Tarmo KoreinikManaging Directorof Moya OÜ


Table of Contents

6

About the company

Hansab is the leading company providing innovative technology solutions for businesses – especially in the financial, retail and public sectors of the Baltic region. In 2006, Hansab Group founded Moya OÜ, which focuses mainly on operating reverse vending machines. Then in 2007, Ellore OÜ followed, mainly dealing with financial and card payment solution integration and software development. In 2014, Hansab OY Finland was established to manage operations in Finland.

Currently, Hansab Group has eight subsidiaries: Hansab AS, Hansab OY, Hansab SIA, Hansab UAB, Moya OÜ, Ellore OÜ, Hansab Kinnisvara OÜ, and Hansab Turtas UAB. Hansab employs more than 224 people under permanent contract and 70 project based personnel. Hansab aims to hire the top people in their field, at the same time encouraging young talent by providing a Hansab university scholarship.Two thirds of Hansab employees are engaged in service activities. Hansab complete solutions involve consultancy, software development and integration, software and hardware sales, installation and after sales services, together with service export. The processes, service

and structure are common to all Hansab companies ensuring a high level of service no matter what the location.

The Hansab Group is unique in the Baltics offering a wide range of products and solutions. According to the latest statistics our companies service approximately 50 000 devices. The services offered by Hansab comply with ISO 9001 and ISO 20 000 standards. Hansab has implemented all ITIL processes ensuring we provide the necessary resources to meet our customers’ demands. Quality is a watchword for Hansab businesses. We aim for the highest level, which has been acknowledged consistently with numerous Quality Management awards.


HANSAB GROUP OÜestablished: 2005 in Tallinn, Estonia

HANSAB ASestablished:

1991

Tallinn, Estonia

Tartu,Pärnu,Jõhvi,

Kuressaare, Kärdla

Rezekne, Liepaja,

Valmiera, Daugavpils

HANSAB SIAestablished:

1993

Riga, Latvia

Kaunas, Klaipėda, Šiauliai,

Panevėžys+

representative in Belarus.

HANSAB UABestablished:

1994

Vilnius, Lithuania

MOYA OÜestablished:

2006

Tallinn, Estonia

ELLORE OÜestablished:

2007

Tallinn, Estonia

HANSAB OYestablished:

2014

Helsinki, Finland

HANSAB KINNISVARA OÜ

established:2009

Tallinn, Estonia

HANSAB TURTAS UAB

established:2010

Vilnius, Lithuania

1991 1992 1993 1994 1995 1997 1998

2006 20052004

20032002 2001

1999

2007

20092010

2011

20132012

The first financial crisis in the Baltic financial sector

Hansab ASestablished in Tallinn Estonia.

Hansab starts selling security and cash handling equipment to the financial sector

Establishment of Hansab service department. Product portfolio expands to customer management systems.The first service agreement is signed.

Hansab SIA founded in Riga, Latvia.

Sales and service of NCR ATMs begins.Period of rapid growth in the company.

Second financial crisis in the Baltic financial sector after collapse of the Russian economy.

Turnover reaches 300 000 euros

1600m2 headquarters constructed in Tallinn

Product portfolio joins POS terminal sales and service

Hansab Group OÜ founded to unify and coordinate operations across the Baltics.

A daughter company Moya OÜ founded to operate reverse vending

Ellore OÜ established by Hansab and Voicecom to develop and integrate software with equipment sold by Hansab (specifically for payment systems).

2500m2 Lithuanian headquarters are built in Vilnius

Global economic crisis begins

2000

ISO 9001 quality standard acquired

Hansab UAB founded in Vilnius, Lithuania

Hansab introduces new strategy with the emphasis on key account management and additionally to finance – focus on public and retail sectors.Shift from product to solution sales. New products in security field – electronic security, EAS and access control.

Hansab TOB Ukraine founded to manage operations in Ukraine.

Hansab Kinnisvara OÜ founded in Estonia

Turnover declines to 11.3 million Euros

Employees:135Hansab Turtas UAB founded in Vilnius

Project department founded to manage complex projects and to divide responsibilities between the departments.

Turnover recovers to pre-crisis level 17,5 million Euros

Employees: 168 Hansab starts service export

Turnover 17.4 million euros

Hansab TOB Ukraine sold Hansab OY

founded in Finland

Employees: 192 and 65 people project based. Hansab begins active

operations in Belarus

Employees: 5

Employees: 117Employees: 147

Employees: 43

Turnover rises to 15 million euros

Turnover reaches 18,5 million euros, and net profit of 1,2 million Euros, resulting in the best financial results in the history of the company.

2008 2014

ISO 20 000 certificate acquired. Hansab becomes one of the first companies to acquire this quality management certificate in the Baltics.

8

1991 1992 1993 1994 1995 1997 1998

2006 20052004

20032002 2001

1999

2007

20092010

2011

20132012

The first financial crisis in the Baltic financial sector

Hansab ASestablished in Tallinn Estonia.

Hansab starts selling security and cash handling equipment to the financial sector

Establishment of Hansab service department. Product portfolio expands to customer management systems.The first service agreement is signed.

Hansab SIA founded in Riga, Latvia.

Sales and service of NCR ATMs begins.Period of rapid growth in the company.

Second financial crisis in the Baltic financial sector after collapse of the Russian economy.

Turnover reaches 300 000 euros

1600m2 headquarters constructed in Tallinn

Product portfolio joins POS terminal sales and service

Hansab Group OÜ founded to unify and coordinate operations across the Baltics.

A daughter company Moya OÜ founded to operate reverse vending

Ellore OÜ established by Hansab and Voicecom to develop and integrate software with equipment sold by Hansab (specifically for payment systems).

2500m2 Lithuanian headquarters are built in Vilnius

Global economic crisis begins

2000

ISO 9001 quality standard acquired

Hansab UAB founded in Vilnius, Lithuania

Hansab introduces new strategy with the emphasis on key account management and additionally to finance – focus on public and retail sectors.Shift from product to solution sales. New products in security field – electronic security, EAS and access control.

Hansab TOB Ukraine founded to manage operations in Ukraine.

Hansab Kinnisvara OÜ founded in Estonia

Turnover declines to 11.3 million Euros

Employees:135Hansab Turtas UAB founded in Vilnius

Project department founded to manage complex projects and to divide responsibilities between the departments.

Turnover recovers to pre-crisis level 17,5 million Euros

Employees: 168 Hansab starts service export

Turnover 17.4 million euros

Hansab TOB Ukraine sold Hansab OY

founded in Finland

Employees: 192 and 65 people project based. Hansab begins active

operations in Belarus

Employees: 5

Employees: 117Employees: 147

Employees: 43

Turnover rises to 15 million euros

Turnover reaches 18,5 million euros, and net profit of 1,2 million Euros, resulting in the best financial results in the history of the company.

2008 2014

ISO 20 000 certificate acquired. Hansab becomes one of the first companies to acquire this quality management certificate in the Baltics.


10 Hansab Group

In their 20th year of operations, they reached the revenue of 8.7 million euros. These excellent results were supported by the successful euro changeover process. Now all Hansab Group companies are operating in the euro area.

During the previous year, we successfully developed our Estonian company Hansab AS, which increased its revenue by 18%. In July, they also opened a subsidiary company, Hansab OY, in Finland. We can see a good opportunity to get synergy between Hansab AS and Hansab OY, which will open up new horizons for their development. At the same time, we took a conservative approach for developing our business in Finland, trying to learn from the lessons related to Ukraine.

The biggest disappointment of the previous year was our Latvian company Hansab SIA. It finished the year with the loss of 268 thousand euros. The key reasons for that were weak sales results and internal management issues. From the autumn of last year, we employed a new managing director, sales and marketing director and client service director, and we also began to strengthen our sales team. We are

Aigar UrvaCEO and Founder of Hansab

Group Companies

Hansab Group finished 2014 with the record revenue of 20.5 million euros, increasing it by 18% in comparison with the previous year. At the same time, due to an increase of 11% in our salary costs, the Group’s profit decreased and we finished the year with 970 thousand euros EBITDA.

The best results among the Group’s companies were delivered by our Lithuanian company Hansab UAB.

Reaching New Heights


“Hansab Group finished 2014 with the record revenue of 20.5 million euros, increasing it by 18% in comparison with the previous year. ”

floor for our Hansab headquarters in Tallinn. In addition, we upgraded our Riga office to a better location and more modern facilities.

Finally, despite the increasing political tension in our region, we can see positive developments in our markets. Thus, we are planning to expand our company and improve profitability. Thanks to our strategy, colleagues, customers and partners, we have confidence in our plans.

hoping to see the results this year, as a consequence of the aforementioned changes.

Ellore OÜ last year’s financial results were affected by our main customers: Swedbank POS terminal strategy adjustment. At the same time, we saw implementation of many new self-service solutions in the market, starting with the successful cooperation with NETS in the Baltic market and an increase of our own software developments.

Moya OÜ has continued to implement the new successful strategy, increasing market share, improving quality and adding new services. The positive financial results can be seen during the next periods.

Outside of our main markets, we have continued to expand the business operations of our Lithuanian company in the Belarussian market, in addition to successful service export projects in Scandinavia.

During the previous year, we continued investments to our IT systems and mainly finished the implementation of the in-house document management system (DMS). In order to improve work conditions, we built an additional, 3rd

12 Hansab Group

In 2014, the economic growth accelerated in Estonia, but in spite of a slowdown in Latvia and Lithuania, their economies still grew slightly faster. According to the preliminary figures, last year’s economic growth in Estonia was 2.1%, 2.4% in Latvia, and 3.0% in Lithuania. The price increase was around 0% in Hansab Group home markets. It was -0.1% in Estonia, 0.6% in Latvia and 0.1% in Lithuania.Overview of the Group’s year

2014 was a successful year for the group - consolidated turnover was more than 20 million euros for the first time in the history of Hansab Group, and the majority of the group's subsidiaries' financial results met the expectations. Only the sales results of Latvian subsidiary Hansab SIA were much smaller than planned, and the company ended 2014 with a higher loss than in previous years. Compared to 2013, the consolidated revenue of Hansab Group

Financial Results of Hansab Group in 2014

Jaak ÕunpuuCFO of Hansab Group

Hansab AS

Hansab AS

2014

2013

Hansab SIA

Hansab SIA

Hansab UAB

Hansab UAB

Hansab OY

MOYA

MOYA

Ellore

Other

Hansab Group revenueby Companies


“The group’s turnover increased due to higher investments from our customers in the banking sector; bigger projects in the commercial, transportation, industrial, medical sector; and the sales of euro equipment in Lithuania.”

increased by 18% to 20.5 million euros and the net profit was 306 thousand euros (698 thousand euros in 2013).

The group's turnover increased due to higher investments from our customers in the banking sector; bigger projects in the commercial, transportation, industrial, medical sector; and the sales of euro equipment in Lithuania. The continuing growth in service revenues was also positive: the revenues increased by 3% in 2014 and accounted for nearly a third of the total turnover.

The largest part of the turnover growth came from the increased sales of companies in Lithuania and Estonia. The turnover of Hansab UAB increased by 56%, Hansab AS by 18% and Moya OÜ by 7%. The sales of Hansab SIA decreased by 26% and the sales of Ellore OÜ by 19%.

The largest part of the consolidated turnover in 2014 was generated by Hansab UAB - 42%. The share of Hansab AS was 35% and Hansab SIA 17%. The other group companies provided 6%.

In 2014, the highest net profit of 306 thousand euros was earned by Hansab AS, followed by Hansab UAB with 299

14 Hansab Group

thousand euros and 25 thousand euros by Ellore OÜ. For Hansab SIA, the year ended with a bigger loss (-268 thousand euros), and OÜ Moya finished with a small loss (-11 thousand euros).Investments

The most important investment in 2014 was the construction of the 3rd floor to the head office in Tallinn. This allows the Estonian companies of Hansab Group to offer significantly better working conditions for employees, and to create additional jobs for the development of the group in the future.

Additional larger investments in 2014 were: the acquisition of the reverse vending machines and the renovation of service stations by Moya OÜ, the purchase of equipment for full-service

rentals to customers by Hansab AS, buying the furniture and equipment for the new head office of Hansab SIA, and various software developments for Hansab companies. The total amount of fixed assets of the group increased by 701 thousand euros. With regard to these investments, the group’s depreciation costs increased to 472 thousand euros (425 thousand euros in 2013).Annual results

The interest expenses of Hansab Group decreased in 2014 to 80 thousand euros compared to 85 thousand euros in 2013. The decrease of costs resulted from the decline of the interest rates and the centralised management of cash flow by Hansab Group. The EBITDA in 2014 was 970 thousand euros (1,270

thousand euros in 2013).The consolidated balance sheet

decreased to 10 million euros. The decline came from the purchase of ATM-s at the end of 2013, the deal which increased the inventories and the trade payables in 2013, but these machines were sold during the first months of 2014 and the payments were made to the supplier of the machines. The share of equity at the end of 2014 increased to 40% of the balance sheet. The consolidated return of equity (ROE) was close to 8% and the return on assets (ROA) 3%.

The conservative financial policy of Hansab Group has ensured the strong liquidity of the company. The cash flow from operating activities in 2014 was 988 thousand euros.

49%Banking

17%Retail

13%Publicservices

9%Transport

4%Industry

4%Resellers

3%CIT

1%Other

27%Services

11%Automation

11%Electronicsecurity

8%Cashhandling

6%Physicalsecurity

3%Consumables

1%Card products

33%Finance and Payment 2014

Product groups

2014Customersegments

ServicesSalesin thousands of euros

Hansab Group Revenue

‘00 ‘01 ‘02 ‘03 ‘15‘14‘13‘12‘11‘10‘09‘08‘07‘06‘05‘04

*expected

Plans for next yearWe believe that Hansab Group’s

conservative financial policy, its flexible cost base and the group’s development strategies have created a basis for the growth of group’s sales and profit in the future.

Economic experts forecast that the growth in 2015 will be modest in the Baltic countries (2.0-2.5%) and our new market, Finland, will recover from previous recession, and the Finnish economy will start to grow slightly in the coming years. The main risks are still the geopolitical tensions and uncertainty related to Russia that could negatively influence our economies.

ASSETS 31.12.201431.12.2014

TOTAL ASSETS

CURRENT ASSETS

Total current assets

CashTrade receivablesOther receivablesPrepaymentsInventories

NON-CURRENT ASSETS

9 981 11 534

4 921

7412 086

319101

1 675

Total non-current assets 5 060

Long-term financial investments 293Property, plant and equipment 4 637Intangible assets 130

31.12.2013

7 175

9851 538

38180

4 191

4 359

2444 018

98

*in thousands of euros

EQUITY

TOTAL EQUITY

Share capitalReservesNon-controlling interestRetained earningsCurrency translation differences

3 957

33

1063 550

2Net profit for the period 294

LIABILITIES

LIABILITIES & EQUITY

TOTAL LIABILITIES AND EQUITY 9 981 11 534

TOTAL LIABILITIES

Current liabilities

Total current liabilities

Loans and borrowingsTrade and other payablesAccrued expensesTax liabilities

Non-Current liabilities

Total non-current liabilities

Loans and borrowingsOther long-term liabilities

6 024

4 491

1 3151 990

563623

1 533

1 5312

31.12.2013

3 997

33

1433 212

-1638

7 537

6 568

1 6513 915

512490

969

9672

Consolidated Balance Sheet

2014

20 451REVENUEOther operating income


56

Business expensesGoods, materials, services -12 456Operating expenses -2 214Labour expenses -4 823Depreciation -472Other expenses -45

Operating profit 497

446

306

Finance costs -51

Profit before income taxIncome tax -140

Net profit for the financial year

Non-controlling interest 12Equity holders of the parent company 294

2013

17 41033

-9 705-2 067-4 345

-425-56

844

798

698

-46

-101

60638

Consolidated Income Statement

16 Hansab Group

ASSETS 31.12.201431.12.2014

TOTAL ASSETS

CURRENT ASSETS

Total current assets

CashTrade receivablesOther receivablesPrepaymentsInventories

NON-CURRENT ASSETS

9 981 11 534

4 921

7412 086

319101

1 675

Total non-current assets 5 060

Long-term financial investments 293Property, plant and equipment 4 637Intangible assets 130

31.12.2013

7 175

9851 538

38180

4 191

4 359

2444 018

98


EQUITY

TOTAL EQUITY

Share capitalReservesNon-controlling interestRetained earningsCurrency translation differences

3 957

33

1063 550

2Net profit for the period 294

LIABILITIES

LIABILITIES & EQUITY

TOTAL LIABILITIES AND EQUITY 9 981 11 534

TOTAL LIABILITIES

Current liabilities

Total current liabilities

Loans and borrowingsTrade and other payablesAccrued expensesTax liabilities

Non-Current liabilities

Total non-current liabilities

Loans and borrowingsOther long-term liabilities

6 024

4 491

1 3151 990

563623

1 533

1 5312

31.12.2013

3 997

33

1433 212

-1638

7 537

6 568

1 6513 915

512490

969

9672

Consolidated Balance Sheet

2014

20 451REVENUEOther operating income


56

Business expensesGoods, materials, services -12 456Operating expenses -2 214Labour expenses -4 823Depreciation -472Other expenses -45

Operating profit 497

446

306

Finance costs -51

Profit before income taxIncome tax -140

Net profit for the financial year

Non-controlling interest 12Equity holders of the parent company 294

2013

17 41033

-9 705-2 067-4 345

-425-56

844

798

698

-46

-101

60638

Consolidated Income Statement


18 Hansab Group

Margus TammojaDevelopment and IT Manager

of Hansab Group

In 2014, we pursued our goals in product innovation and the development of IT systems and services. As a result we continued Hansab Group companies’ Innovation Forums to find out the best ideas and solutions for future developments. This year, we decided to focus more on sales of services and to detect additional service sales models.

Historically, the sales of Hansab services have been stable, and the economic crisis has not affected it as much as it affects the sales of products or solutions. Therefore it is important for us to increase our stable income by increasing the sales of services.Innovative Solutions

We started with new Video Surveillance as a Service (VSaaS) development project. Its main idea is to offer a cloud-based video recording and managing solution. We believe that this system has quite a few additional values for customers, compared to

Concentrating on Mobility


“This year, we decided to focus more on sales of services and to detect additional service sales models.”

traditional video surveillance systems. For example, some of the benefits for the end-user include: access to live and recorded video from anywhere, no DVR or NVR hardware on-site, video securely off-site, low upfront investment, no hardware purchase and virtually unlimited expanding opportunities.

Another important service that we started to develop is monitoring customer equipment. Equipment such as video recorders and cameras, digital signage devices, parking solutions and queue management solutions can be easily monitored. As a result of this monitoring work, we can prevent a large number of incidents and if an incident occurs then we can react or immediately inform our customer about it. We have a long history and competence in monitoring ATM and reverse vending machines, but we have to extend the range of products that we can supervise centrally.Changes in IT

In IT management, we continued following and implementing the international standards and ITIL principles. These international standards help us speak the “same language” with our customers and partners. It also

provides stability, continuity and security for our IT systems.

One of the biggest projects in 2014 was the implementation of Hansab’s central document management system (DMS). It was a great challenge for our IT team and the personnel managers responsible for system implementations, but it was worth it. Now, all document confirmations and the management of invoices and agreements are done within the system. The main advantage of the system is that all Hansab Group’s companies are now following similar document management principles. In addition to this, it is now much easier to approve and to find documents and these are accessible from any location within seconds.

In 2015, we are planning to continue improving the IT management and finish the implementation of the document management system. One important part of it is the integration with our ERP programme.

20 Hansab Group

The main target for 2014 was to improve service efficiency. We decided to centralize repair center services to Tallinn, which improved our quality and increased our adaptability.

Since the beginning of 2014, we focused a great deal on unifying customer service processes. The Group made substantial improvements, and today, our customers receive equal quality in every country. Our logistics and purchase processes were changed and improved, also through centralization and better control.

The total service revenue of the group in 2014 was 6.4 million euros. The turnover grew in Estonian and Latvian companies. In 2014, companies solved a total of 67 600 service orders. New tools for service planners were implemented in all Hansab companies throughout the year. Together with our partners, we developed a service planner tool, which improved our service quality by decreasing delayed calls, and having a better planning process.

Algo PuuseppService Manager of

Hansab Group

Working For Efficient and Stable Services

Total Service Turnover (thous. euro)‘15* expected

‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15*


In November 2014, the Estonian Association for Quality presented Hansab AS with the Quality Deed of the Year award 2014. The Association for Quality awarded Hansab Estonia for presenting an innovative and original solution for service-providing companies, in order to offer better customer communication and service work. The solution consists of three different but integrated tools that work with a central database and have three parties involved simultaneously – customers, the service help desk and the maintenance engineers.

In addition to elaborating the methods already in use, we are working on two new development projects to come up with solutions in fields of customer relationship management (CRM) use and problem management in 2015.

The main priority for the year is to improve our efficiency even further. To this extent, we are going to track additional quality measurements to collect more information and therefore enhance our services. Our goal is to achieve a service planning accuracy of 75% by the end of the year. The planned service turnover growth in the Hansab Group for the next year is 8%.

22 Hansab Group

Last year, we created a total of 34 new job positions across the entire Group. The number of employees grew 17% over the year 2014, reaching a total of 224 people. The high increase was reached mainly due to the project department’s continuous growth, and due to the increased number of service contracts where additional personnel were needed. The growth of the project department was possible thanks to the

sales of technological solutions that require implementation and integration which have continuously increased the companies' turnover. To cover the increased work load, we also used temporary workforce.Recruiting suitable staff

In 2014, the biggest challenge in the field of human resources was similar in all countries – how and where to find appropriate employees, especially in the sales and IT sector. Due to many new positions, increased employee turnover and low employment rate, it was crucial throughout the year. It was necessary to find creative solutions to obtain the needed workforce.

The best results in recruitment came from internal recommendations (we involve our own employees in recruitment, successful recommendations will be rewarded). Good cooperation with field-related vocational schools and universities gave good results as well.

Hansab has formed scholarship agreements with 3 schools: in Estonia, with the Estonian Information Technology College and Tallinn Polytechnic School; and in Latvia, with the Riga Technical University. In 2014, Hansab offered

Annika Urva-RonkHuman Resources

Manager of Hansab Group

Maintaining an Enjoyable Work Culture while Expanding

‘10 ‘11 ‘12 ‘13 ‘14

71Hansab UAB

70HansabAS

41Hansab SIA

29MOYA OÜ

8 Hansab Group OÜ

5Ellore OÜ

The change in number of employees over the last 5 years

2014224employees

Employee distribuition by company


Hansab and OÜ Ellore (4.2 points). SIA Hansab result (3.9 points) was slightly below the set target.

The highest scores were given to issues regarding how well the employees are being informed, and the contribution of the company to the well-being of their employees. Similarly to last year, the question about how proud and content the employees are received the highest scores.

internship experience for 25 students, of whom two thirds got a permanent job contract after the trainee period ended. These internships are a good way to fill job positions quickly, flexibly and smoothly with motivated and trained personnel. At the same time, it offers young people a chance to enter the labour market and get valuable experience.Excellent survey results

Highly satisfied and motivated employees are a high priority for us. For that reason, we run employee satisfaction surveys every year to receive feedback. This survey has always been a good indicator of different issues, and helpful in finding ways for improving the work environment. Our experience has shown that there is a link between employee satisfaction and the company’s financial results.

In the autumn of 2014, the anonymous satisfaction survey was conducted for the 14th time. It involved the employees of the whole Group, and 82% of those participated.

The average result on a 5-point scale was 4.1, which was the desired objective. This was reached by AS Hansab, UAB

“Last year, we created a total of 34 new job positions across the entire Group. The number of employees grew 17% over the year 2014, reaching a total of 224 people.”

24 Hansab Group

In 2014, we continued strengthening Hansab brand communications. The key processes were: Hansab’s portfolio compilation, a corporate brand facelift and customer satisfaction evaluation. Additionally, Hansab has aligned marketing communications with all the other departments in the company to preserve the same standards and qualities throughout. All of these tactical elements helped us stand out among our competitors, and to deliver an improved customer experience.The Firsts of 2014

One of the most prominent marketing-related projects in 2014 was the development of the full Hansab portfolio, showcasing 52 projects from all Hansab strategic sectors across the Baltics. This booklet is the first of its kind in the Hansab group companies, providing our customers with a comprehensive guide of our installations.

Sigita BabarskaitėMarketing and Communications

Manager of Hansab Group

Offering a Customer-Driven Brand Experience


“Additionally, Hansab has aligned marketing communications with all the other departments in the company to preserve the same standards and qualities throughout.”

can dedicate more time on the specifics of the proposal, not on the manual work.Reaching Customers Online

Hansab’s social media channels have grown organically and consistently over the last year. Today, we have over 500 followers, interested in the industry trends, news and company changes.

Timely customer satisfaction measurement has been of high importance in all Hansab Group companies. Last year, we hosted 3 annual web-based relationship surveys for Hansab companies, Ellore and Moya. Our customers evaluated our services and products with the score of 4.3 in Hansab.

Ellore’s second annual survey helped to get a grasp of the interest areas for further development, resulting in a 4.1 evaluation on the scale. Finally, Moya, the reverse vending operator conducted its first survey, targeted to store owners across Estonia. They evaluated the services provided by the company with a score of 4.3 – the highest of the Group companies.

In addition to the relationship surveys, we have started measuring the quality of projects in Hansab. From

2015, each project will be followed by a transactional, web-based survey, to measure the quality, schedule, and the competence of the project department.Strategy for the Next Year

One of the biggest projects in 2015 will be to completely renew Hansab’s and Moya’s websites. The main goal is to complement the sites so that they will be more customer-orientated and considerably enhance user experience.

It is also essential for us to continue unification of the marketing communications with sales and every other domain in Hansab. That, together with the strategic marketing and centralised coordination, will help to strengthen Hansab brand differentiation and create additional customer value.

Also, the first EXEX Payment Solutions Conference was held at the Tallinn TV Tower. The event organised by Hansab, Swedbank, MasterCard and Ingenico aimed to take a closer look at how planning and implementation of payment solutions improve efficiency and customer satisfaction along the supply chain. In total, the event had 92 participants from the area of retail, allowing Hansab take its customer events to the next level.Focus On Strengthening the Brand

Recruitment of an in-house graphic designer and a visual communications specialist was a jump forward in 2014. The new in-house expertise enabled to freshen up Hansab corporate brand identity and to align it better with its mission and vision. Having one designer for the Group allows to have all visual communications coordinated centrally, to make sure that that corporate branding stays consistent.

In order to provide faster and more focused offers for customers, we have developed a unique way of presenting sales offers. A fresh look and easy template management help sales managers to create better offers, as they

were able to grow in all our strategic segments with retail and state and public leading the way by growth figures of 84% and 78% respectively. All the above resulted in sales revenues growing by 21% compared to 2013.

Also our services revenue saw a significant increase of 12% compared to 2013. Although the SLA revenues stayed at the same level compared to the previous period we were able to grow mainly due to the increase of revenues for installations and service export by 108% and 327% respectively.

The total revenue for the company reached 7.8 million euros being 17% higher than in 2013. The profit before taxes remained on the same level - 0.4 million euros.

The feedback from our stakeholders continued to show positive results as we were evaluated highly both in the employee satisfaction survey and the customer satisfaction survey, by 4.1 and 4.2 points on a 5 point scale respectively.Customers Focus on Efficiency and Security

Due to increasing cost levels and higher service quality expectations, our customers see greater need to invest

Janno Kallikorm Managing Director

of Hansab AS

A Strategy Fulfilled

During 2014 we continued to grow due to our ability to adapt to the changing market conditions and an excellent execution of our strategies. We saw huge increases in automated systems and electronic security sales where the revenues grew by 110% and 51% respectively. Also the finance- and payment systems sales continued to grow reaching an increase of 20% compared to 2013. More specifically, we

26 Hansab AS

into solutions which help them to be more efficient. In 2014 we helped to improve the quality of customer service in Estonian Road Administration and Police and Border Guard Board by installing advanced customer flow management systems with online registering services in more than 40 branch offices all over Estonia.

The continued development and investments in Estonia’s retail market, and concerns for theft, helped us increase our market share in Electronic Article Surveillance systems significantly. In 2014 we installed more than 100 EAS systems in different locations.Project Management, a Key Process

During 2014 our project team installed 359 different systems, this equals roughly one system for every calendar day. To achieve this we launched a brand new project management and planning tool and a total of four new positions were created during the year.Quality Doesn’t Go Unnoticed

Similarly to the previous period our service engineers took care of more than 30 000 service calls during the year. The continuous investments into improving our service quality were awarded with

the Quality Deed of the Year 2014 award by the Estonian Association for Quality. The awarded solution consists of three different but integrated tools that work with a central database and have three parties involved simultaneously – customers, service desk and service engineers.New Heights

As our customers continue to pursue efficiency and security in their activities, we see a growing demand for solutions which support their ideas. Based on the previous we expect to achieve a record-breaking turnover in 2015, growing another 19% compared to 2014 and reaching more than 9 million euros.


28 Hansab OY

It all lead to a decision to establish a company in Finland: Hansab OY was registered in July 2014.Off to a great start

The main targets for the year were to form a company, develop a business strategy for the market and complete the first projects. With less than half a year of operations, Hansab OY generated over 100 thousand euros of sales revenue, and over two thousand euros of profit.

Hansab Finland operation’s main focus is set into two strategic market sectors - retail and public. In these sectors, Hansab OY has strong, experienced technology partners from the Baltics.

In the retail sector, Hansab has a wide range of solutions to make retailers' everyday business more secure and efficient. For increasing clients’ productivity and sales performance, several technologies can be implemented from the Hansab portfolio: visitor counting solutions, complex multimedia solutions which combine digital signage with sound systems, and a new trend in retail - electronic shelf labels to lower retailers' running cost and increase sales.

Kristo KaljuveeHansab OY Sales Director

In 2014, Hansab expanded its business by successfully entering into new territory – Finland. Finland, with its relatively large market, a population of 5.5 million inhabitants, and a highly developed economy offers Hansab excellent opportunities for expanding its business operations. Another impetus came from our existing partners in the Baltics – requests for having a strong and trustworthy partner in Finland.

The Beginning of Operations in Finland


“ With less than half a year ofoperations, Hansab OY generated over100 thousand euros of sales revenue,and over two thousand euros of profit.”

In the public sector, the focus is set on physical and electronic security solutions, low-voltage systems and multimedia solutions. A part of the strategy is to provide different services which include solutions design and installation projects as well as after-sales support.Completed projects

In 2014, Hansab Finland completed several installation projects, mainly in the retail sector. Most of the projects included complete security solutions delivery: cash-handling equipment, electronic article surveillance systems, video surveillance and access control systems. Visitor counting system and digital signage solutions were growing trends on the Finnish market as well.

Looking into the future, the main targets for 2015 are: multiplying sales revenue and developing the organisation further. A significant growth in sales revenue is planned in the public sector with ongoing tender projects, as well as in the retail sector by developing our customer base.

30 Hansab SIA

a bigger amount of clients. The customer base increased by 29% during 2014. We also continued to provide our innovative queuing systems to Road Traffic Safety Directorate (CSDD) and helped them reach higher customer satisfaction with services in 13 renovated branches.New people in SIA Hansab

In March 2014, we participated in the Career Day at Riga Technical University. The goal was to introduce the company and to find students who would like to have an internship at Hansab SIA as engineers. We will continue to cooperate with technical schools to offer internships, in order to get qualified employees in the future.

A lot of work and support from Hansab Group’s specialists was provided to the company in Latvia. Therefore, we can also say that the year 2014 was the year of international practice sharing. Till the third quarter, the most important management issues were supervised by management members from Estonia and Lithuania, but in the fourth quarter, the new local management team started to run the company.

Since the second half of year, we have a new sales and marketing director,

Ričards BataragsManaging Director

of Hansab SIA

2014 was not an easy year for Hansab SIA. The euro implementation process had an impact on the first quarter, since many customers were in great need of different euro cash handling solutions, but the overall year in sales did not go as well as expected. Compared to the total sales of the company in 2013, the decrease was 26 %.

Despite the cutback in sales, Hansab Latvia managed to provide its solutions to

A Year of Adjustments


“The euro changeover helped us increase the turnover by more than 8% and experience the first profitable year after four consecutive years in a row. ”

a customer service director and a company managing director. In addition, changes were made in the company board at the beginning of 2015. During summer, the head office and the central warehouse moved to new premises on Piedrujas street 7.

Although the year was quite challenging and full of different changes, we still got positive feedback from the employee satisfaction survey and the customer satisfaction survey, being 3.9 and 4.18 on a 5-point scale, respectively.

In autumn, Hansab SIA decided to organize an auction for employees. The goal of the auction was to collect money for charity to support sick children. Employees participated in the auction very actively and with enthusiasm. The money raised during the auction helped three sick children get better.Plans for 2015

Strategic operation improvements have been scheduled for the current year as well. We hope that the modifications we implemented will help us restart Hansab Latvia in 2015, increase our revenue considerably and finish the year with profit.

32 Hansab UAB

Darius ŽekonisManaging Director

of Hansab UAB

20 Years of Improvement at UAB Hansab

In 2014, Hansab UAB celebrated its 20th anniversary. It is symbolic that the company’s turnover was the highest in history and reached 8.7 million euros. Compared to 2013, the sales revenue grew more than 55% (from 5.6 million euros in 2013).

The vast revenue growth was especially affected by the euro changeover in Lithuania, because the company generates high proportions of the sales revenue from the banking sector. As Lithuania joined the Eurozone in 2015, Hansab Lithuania won approximately 70% of the tenders for the cash handling and security equipment including service contracts for the next few years. The experience we gained during the same process in Latvia and Estonia was one of the main success factors in the euro changeover process in Lithuania.


“As Lithuania joined the Eurozone in 2015, Hansab Lithuania won approximately 70% of the tenders for the cash handling and security equipment including service contracts for the next few years.”

Successful In Various FieldsHowever, the euro changeover was

not the only factor for success. The company successfully managed projects in the transport sector, and increased the sales of electronic security and video surveillance systems significantly.

Integrated solutions for retail chains allowed increasing the income of the company in this sector, compared to the previous financial year. We successfully started cooperation with retail chain Rimi by installing low voltage systems and security solutions for newly opened Rimi stores. Hansab Lithuania successfully continued collaboration with the Apranga Group in the implementation of systems in more than 30 stores in the Baltics.

The transport sector had a remarkably successful year – our company has installed a number of new solutions, including parking systems at Vilnius and Kaunas airports, and passenger information LED displays for various bus companies.

In 2014, the company had two service export projects in Sweden and Denmark by installing pneumatic tube transport systems. Hansab UAB is planning to continue the service export in 2015.

Over the course of the year, the number of employees increased to 70. The company changed the structure of the sales department by appointing field managers for strategic sectors. This change will make carrying out sales projects even more effective in the future. In 2014, the company intensified its activities in neighbouring Belarus, and we hope to achieve great results in 2015.

34 Ellore

Alar AlumaaManaging Director

of Ellore OÜ

Ellore kept the leading position in electronic payments solutions projects in the Baltics. The key success factors in 2014 were: an increased demand for these solutions, euro migration in Lithuania, incoming requests from new international accounts, and continuous improvement of card payment security related regulations.

By the end of the year, Ellore had five employees and the company’s revenue was 603 thousand euros. Expenses grew mainly due to investments made by hiring new qualified specialists and increased salaries.

In order to help Ellore improve its services, we conducted a customer satisfaction survey. Ellore’s customers defined the company as a partner that sells and integrates solutions while providing support. The satisfaction index 4.1 (on a 5-point scale) gave positive feedback about our work, but also confirmed the importance of a

Ellore in 2014 - More Integration in the Everyday Work of Hansab Group


continuous need to improve customer relationships and service quality.Terminals Market

The high quality hardware from Ingenico, and the secure, feature-rich software application from Voicecom help us keep and strengthen our leading position as a card payment solutions provider in the Baltics. The solutions delivered are compliant with all card payment requirements and local card organization requirements.

In September, we received an approval to start installations of the new generation Ingenico Self Service terminals iSELF. This locally developed terminal application provides easy and quick integration for the self-service kiosks, including parking, petrol sales, vending and other verticals.Card Payment Solution Competence Centre

Services related to card payment solutions have a significant role in Ellore’s share of activities. During the year, the amount of terminals serviced by Hansab companies grew to over 20 000 units, which increased the need for technical expertise, pre- and after-sales consultation in the Baltic Countries.

solutions like Customer Portal and NavMob or a central management system for reverse vending machines, which enable them to increase the quality of the service delivery process.

During the year, Ellore has been involved in several Hansab sales projects, where software integration or building of management software has been requested. Ellore has provided software solutions for G4S, Estonian Telekom, Tallinn University, and others.Social Projects

Ellore continued the cooperation with Estonian IT College to support students with two scholarships annually, and provide jobs for the academic practice to extend the practical know-how of students and help launch their careers.Future Goals

Ellore’s objectives for 2015 are improving the quality of IT services and focusing on the in-house software capacity development. Additionally, we want to grow our revenue through expanding the share of the terminals' market, increasing software sales, and finding new clients. Furthermore, Ellore has many stimulating activities planned for next year, for example the extended mPOS project.

The beginning of 2014 proved that all our preparations for the Latvian euro changeover had been completed smoothly without detecting any technical problems. In spring, Ellore started to prepare for the euro changeover project in Lithuania. The migration included the whole terminals' network review, testing and updating of software versions and consulting with integration partners around the country.

The integration with finance systems avoids the double typing of the financial information from the Cash Register and the terminal, as well helping to link the purchases with card transactions and giving more control over the card payment process for the cash register.

During the year, we participated in multiple integration projects. Ellore equipped an Estonian railway company Elron, ID Systems, Astro Baltics, ZZDats and McDonald's with customized card payment solutions according the customers' specific needs. In total, our card payment terminals have integrated over 60 different Software Solutions.In-House Software Development

Ellore has the expertise and bandwidth to develop and maintain the Hansab companies’ essential IT

36 Moya

Tarmo KoreinikManaging Director of Moya OÜ

The year 2014 in Moya will be remembered for information systems development and market share growth. Despite unstable weather conditions and downtimes occurring during the continuous development process, we were able to obtain financial results similar to the previous year.

By the end of 2014, Moya had 55 reverse vending machines and over 27 million bottles were recycled through these appliances.Establishing the Brand

We continued with the consistent marketing of Moya brand, as a result of which the collection points operated by Moya OÜ are no longer anonymous. We are currently preparing a new website, which will be modern, and which will give an overview of the company and its way of thinking.

Creating a Brand with a Sustainable Perspective


Staff turnover has decreased with each passing year.Reliable Collaborator

For the first time in the history of Moya OÜ, a customer satisfaction survey was conducted. The result of the survey was 4.3 points out of the maximum of 5.0. The result will not put us in the comfort zone; instead, it will motivate us to make further efforts in order to be a worthy and valued partner to our customers also in the future.

In addition to our current partners, in 2014 we started collaborating with retail chain RR Lektus. Together, we plan to establish a number of new packaging collection points. Moya aims at expanding its activities in all regions of Estonia.Arrangements for the Future

For the next year, Moya is planning to grow its market share all over Estonia, and earn profit. The year 2015 will also see the opening of several new collection points, and the restructuring of existing collection points. Our ambition is to operate 55 returning points and 65 machines by the end of the year, and get nominated for the campaign “Excellent collection point” once again.

As in the previous years, the collection points of Moya OÜ received a high rating in the campaign “Excellent collection point”, which confirms that the activities carried out to improve the operation and maintenance of the stations have been proven to work.Organising the Workforce

The company's management structure went through the process of renewal with the aim of supporting the continuous growth of the company, without compromising on quality. Additionally, the working conditions of office workers were improved significantly.

Moya supplemented its repair and maintenance team with regional project-based staff, which resulted in prompt reaction to breakdowns as well as in lower total costs. Thanks to systematic and continuous maintenance, the costs of fleet repair have been constantly decreasing.

We work in close cooperation with the Estonian Unemployment Insurance Fund and related support organizations by helping many people that have been unemployed for a long time return to the labour market. Today, the company has more than 80 contract based employees.

FINLAND

SWEDEN

RUSSIAESTONIA

BELARUS

LATVIA

LITHUANIA

POLAND

Tallinn

Riga

Helsinki

Vilnius

Minsk

Jõhvi

TartuPärnu

Kärdla

KuressaareValmiera

Rēzekne

Daugavpils

LiepājaŠiauliai

Klaipėda

Panevėžys

Kaunas

St.Petersburg

Kaliningrad

Stockholm

Gdansk

Baltic Sea

38 Map and Contacts

Hansab Group OÜ Keevise 11, 11415, Tallnn+372 605 [email protected]

Hansab AS Keevise 11, 11415, Tallinn+372 605 [email protected] offices: Tartu, Pärnu, Jõhvi, Kuressaare

ESTONIA

Hansab UAB Savanorių pr. 180A, 03154, Vilnius+370 5 205 [email protected] offices: Kaunas, Klaipeda, Šiauliai, Panevežys

LITHUANIA

Hansab SIAPiedrujas iela 7, LV-1073, Riga+371 6732 [email protected] offices: Daugavpils, Liepaja, Valmiera, Rezekne

LATVIA

Moya OÜKeevise 11, 11415, Tallinn+372 683 [email protected]

Ellore OÜKeevise 11, 11415, Tallinn+372 605 [email protected]


Visit us at www.hansab.comHansab Group Annual Report 2014

hansab group annual report 2015

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