Annual Report 2010

This is a print-out of the contents of the Vaisala 2010 Annual Report.

To view the online report please go to: www.vaisala.com/annualreport2010

Year 2010

The year 2010 showed that Vaisala's long term investments in executing the new market driven strategy are beginning to pay off.

The Group's organic net sales stayed on the previous year's level, as recession still affected the sales volumes in the weather

business. The first half of the year was also burdened by low margins and cost increases. In addition, global component shortage

affected the delivery capability. We worked together with the subcontractors to solve the problems.

Despite the challenges, the last quarter was excellent - the sales volumes and orders received were all time high. The strong order

book gives Vaisala a solid foundation to begin the company's 75th operational year

CEO Review

New Strategy Beginning to Yield

The year 2010 was a turning point for Vaisala in the execution of our new market driven strategy. The results at the end of the year

show that our long term investments are beginning to pay off.

The turning point was the most visible in the results of the Controlled Environment business area. The Life Science and High

Technology segment especially demonstrated good growth figures backed up by the Veriteq acquisition. The combined product

and service offering of Vaisala and Veriteq strengthens our position in the life science market and brings clear benefits to our

customers, i.e. the pharmaceutical industry, biotechnology companies and medical device manufacturers, for example.

We were also pleased to see that the additional R&D investments made during 2009-2010 had clearly made a difference in the

operations of the Products & Technologies function. As a result Vaisala was able to launch a record number of new products in

2010.

Service business plays an important role in our growth strategy. During the last couple of years we have concentrated on building a

versatile service offering and strengthening our delivery capability. In 2010, these investments yielded results as well and the net

sales generated by Vaisala Services grew by approximately 20 percent.

In Finland, we implemented a new enterprise resource planning system, which had a positive effect on the management of project

business and the harmonization of global customer service, for example. The system will be implemented in its entirety in all

Vaisala offices during 2011 - 2012.

The recession still affected the sales volumes of the weather business, which kept Vaisala Group's organic net sales on the

previous year's level. Meteorology and Weather Critical Operations business areas did not meet expectations, mostly due to the

lack of big project deliveries in 2010.

In addition, the Group was burdened by low margins and cost increases especially during the first half of the year. As a result,

Vaisala initiated an efficiency program to improve the company's profitability and competitiveness. In order to reach sufficient cost

savings, we were also forced to reduce the number of our personnel. The related consultation processes were completed in June.

Global component shortage affected the delivery capability of both Vaisala and our subcontrators during 2010. We strengthened

cooperation with our main subcontractors, and worked together to solve the problems caused by the material shortage. Due to

these efforts, we were able to decrease the number of delayed deliveries during the last quarter, especially in December, but

despite of our best efforts some deliveries had to be postponed to 2011.

The last quarter is typically the most significant in terms of Vaisala's net sales. The year 2010 was no exception, on the contrary -

the sales volumes and orders received during the fourth quarter were at an all time high level. The strong order book we enjoy now

is a good starting point to enter the company's 75th operational year.

I want to thank all Vaisala personnel for their excellent work during this difficult year. I would also like to extend my thanks to our

customers and partners for good cooperation in 2010.

Kjell Forsén

President and CEO

2010 Highlights

Vaisala Strengthens its Position in Life Science Business

In April 2010 Vaisala acquired Veriteq, a leading company in continuous monitoring and data logger solutions for the life science

market. The strategic acquisition of this Canadian based company was an important step for Vaisala to strengthen its position in the

steadily growing global life science market. As a result of the acquisition, the market segment's name was changed from

Cleanrooms and Chambers to Life Science and High Technology. Read more:

Stock exchange release

Controlled Environment's 2010 highlights

New York and New Jersey Airports Benefit from Vaisala Weather Observation Solutions

Vaisala signed a USD 5 million agreement with the Port Authority of New York and New Jersey for a weather observation solution.

Vaisala delivers weather solutions to John F. Kennedy (JFK), LaGuardia, Newark, Teterboro and Stewart International airports to

improve their maintenance operations and aviation safety. Read more:

Press release

Weather Critical Operations' 2010 highlights

Online Weather Information for Oman Airports

In November Vaisala signed a 9 million euro contract with Directorate General of Meteorology and Air Navigation of Sultanate of

Oman to supply weather observation systems to two international and four regional airports in Oman. Read more:

Stock exchange release

Weather Critical Operations' 2010 highlights

Precise Rain Information in High Demand

Weather radars have been part of Vaisala's offering for the past three years during which their demand and global market share

have grown steadily. In 2010 new radar orders were received from all over the world. Vaisala has ongoing delivery and installation

projects e.g. to Turkey, China and several South American countries. Read more:

Meteorology 2010 highlights

New Energy Efficient Office Building in Vantaa

The construction of a new office building to Vaisala's headquarters was completed, as

scheduled, at the end of the year. Environmental aspects, such as high self-supporting energy

production together with low energy consumption were the guiding principles in the planning of

the new building. Most of the heating energy is produced by the building's own geothermal

energy system. In addition, 700 m2 of solar panels have been installed on the building's rooftop

and the south wall which will provide approximately 15 percent of the annual electricity

demand.

The building automation solutions control the complex network of lighting, air condition and heating. Vaisala's carbon dioxide

measurement technology is utilized to provide good quality indoor air energy-efficiently with the help of demand controlled

ventilation.

Vaisala has applied for an international green building certificate (LEED) for the new building.

Vilho Vaisala Award to American Scientists

A group of US National Oceanic and Atmospheric Administration (NOAA) scientists were awarded the prestigious Professor Dr.

Vilho Vaisala Award in 2010. The awarded research paper "Rapid Sampling of Severe Storms by the National Weather Radar

Testbed Phased Array Radar" describes a study that demonstrated Weather Radar's capability for adaptable, high temporal

resolution scanning of quickly developing features in deep convective storms.

Vilho Vaisala award is granted to research in the field of environmental measurement instruments and methods of observation.

Read more:

Pess release

Vaisala Leading Industry Partner for Environmental Monitoring Program

The Finnish Strategic Centre for Science, Technology and Innovation for Energy and Environment, CLEEN Oy, launched an

ambitious five year, 50 MEUR research program (MMEA) on environmental monitoring and services. Vaisala is the largest industry

contributor in the program which aims to create new tools, standards and methods for environmental measurement, monitoring and

decision support. Read more:

Press release

Research

Vaisala Joined Cleantech Finland

Vaisala has joined forces with Cleantech Finland, an umbrella brand uniting top Finnish companies that work in the cleantech area,

i.e. with products, services and technologies that prevent or reduce harmful impacts on the environment. Cleantech Finland brand

supports the growth of Finland’s environmental business sector and builds the country’s reputation

as a leading cleantech country and number one supplier of clean technologies.

Weather Park at Shanghai Expo

Vaisala’s measurement systems were part of the integrated weather observation systems of the

Shanghai World Expo. The weather site monitored environmental conditions at the Expo Park,

and provided precise updated information for weather forecasts during the exhibition. The

Shanghai World Expo was visited by 73 million people during May 1 - October 31, 2010.

Key Figures

Business

Vaisala serves customers in different environmental measurement markets. Our global market segments include meteorology and

hydrology, airports, roads, defense, weather critical energy, life science and high technology, building automation and targeted

industrial applications. We provide our customers with the means to influence and better understand their environment and reduce

uncertainty by enabling well-informed decisions.

Vaisala's comprehensive offerings range from small industrial probes to comprehensive weather observation solutions such as

surface weather networks and aviation weather solutions. Our customer base covers over 140 countries. Geographically the

markets are divided into three regions: Europe, Middle East and Africa (EMEA), Americas, and Asia Pacific (APAC).

Controlled Environment

Good Growth in 2010

"Controlled Environment business experienced financially a slow start in 2010. Fortunately the demand picked up well during the

latter half of the year, and by the end the of the year the revenue increased by 29 percent compared to 2009. The biggest growth

was seen in the life science business.

In 2010, the execution of our strategy resulted in an acquisition and a divestment. The acquisition of Veriteq was to strengthen our

position in the life science market. The divestment of the oxygen measurement business, for one, was an additional step in

concentrating efforts on our selected market segments."

Kenneth Forss, Executive Vice President, Controlled Environment

Controlled Environment serves customers in building automation, life science and high technology, and industrial measurements

segments. Their main drivers are operational quality, productivity and energy savings. Even though our customers operate in very

different types of environments from tiny incubators to massive engine rooms and high rise buildings, they all need to measure and

monitor environmental conditions very closely and precisely.

Life science and high technology customers operate in demanding research, production and storage areas where precise

continuous measuring and monitoring of environmental conditions is essential. As a rule their operations are tightly regulated by

authorities. The segment comprises of pharma, biotechnology and medical device companies as well as customers in electronics

and semiconductor industries.

In the building automation markets, customers aim at optimizing energy consumption and indoor air quality by controlling the

heating, ventilating, air conditioning and refrigeration systems in buildings. High energy costs and new legislation promote the use

of advanced building automation solutions. The main customer groups represent building automation system manufacturers,

integrators, and facility management.

Customers of industrial measurements represent various demanding industries from power and steel to marine and plastics.

Reliable and stable real-time measurements improve processes, extend equipment lifetime, minimize energy consumption and

prevent downtime.

2010 Key Figures

Net sales 63.4 MEUR

Operating profit 8.9 MEUR

Orders received 66.3 MEUR

2010 Highlights

Strengthening Life Science Knowledge and Offering

Controlled Environment took an important step towards its strategic goals in April with the acquisition of Veriteq, a Canadian

continuous monitoring and data logger solution company. See the stock exchange release.

Vaisala's strong instrumentation know-how and global presence combined with Veriteq's deep understanding of the customer

needs together with its leading continuous monitoring solutions and services, places Vaisala in a competitive position in the life

science market. This unique combination brings also clear benefits to customers in the strictly regulated life science markets and in

performance-critical high technology applications.

The integration activities in 2010 were focusing on two main objectives: increasing business in North America with a shared sales,

marketing and service organization, and building the foundation for expansion into the European and Asia-Pacific markets. The

integration progressed smoothly with the help of highly motivated people sharing the same values. In addition, the facts that Veriteq

had been Vaisala's customer earlier and that there was no ovelap in products or services, supported the smooth transition.

Divesting Oxygen Measurement Business

In September, Vaisala signed a contract to sell its oxygen measurement technology and business to SICK Maihak GmbH. During

the last quarter, the related know-how was transferred to the new owner. The divestment supports Controlled Environment's

strategy to focus on the selected market segments of life science and high technology, building automation and targeted industrial

applications. See the press release.

Improving Indoor Air in Shenzhen Metro Network

Vaisala provides humidity and temperature measurement instruments for the renewed

Shenzhen metro network. In hot and humid environments, such as Shenzhen in southern

China, accurate and stable humidity measurements contribute to energy savings as well

as maintaining high passenger comfort in metro facilities. In addition, optimal humidity

and temperature conditions prevent corrosion and unnecessary failures of the trains and

other technical equipment. Measurement stability was one of the key factors why Vaisala

instruments were chosen for the demanding air conditioning and ventilation application.

Meteorology

Net Sales Decreased Slightly

"The Meteorology business experienced a slight dip in 2010. This was due to the lack of large projects and the cuts in the weather

service budgets in the developed markets. The emerging markets still grew at a fast pace, but could not quite fill in the gap. The

emerging markets meteorological infrastructure investments were sparked by the publicity of weather impacts on emerging

economies.

We made major investments in the R&D, especially in radiosondes. We want to keep the current radiosondes competitive to ensure

base for the upcoming technology generations. These investments affected our profitability which stayed roughly at the same level

as in 2009."

Martti Husu, Executive Vice President, Meteorology

Meteorology serves meteorological and hydrological institutes whose primary interest is the safety and wellbeing of people and the

safeguarding of property. These customers are responsible for providing weather

forecasts and warnings for the society. Weather observationdata is also used to follow the climate change.

Globally, the meteorology markets are divided into two: established markets and emerging markets. In established markets, the

focus is on increasing the costefficiency of products, further automation and remote monitoring, as well as expanding the services

offering. In emerging markets, the needs vary from standard weather observation equipment to turnkey projects and

capability upgrades for severe weather prediction.

2010 Key Figures

Net sales 75.2 MEUR

Operating profit 2.8 MEUR

Orders received 79.2 MEUR

2010 Highlights

Reliable Weather Information at Vancouver Winter Olympics

The world's best athletes competed in the Vancouver 2010 Winter Olympics. Less visible, but equally important group were the

organizers, including weather forecasters as reliable and timely weather information is a prerequisite for the success of any outdoor

event. Environment Canada, the official weather services provider, expanded the observational network in the area with Vaisala

instruments. The extended network consisted several additional measurement instruments, such as ceilometers, visibility sensors

and weather radars. More information:

Press release

Research

Vaisala Weather Radars in High Demand

Vaisala weather radars have gained popularity in all corners of the world. The installed radar networks in New Zealand, Finland and

Estonia are demonstrating excellent reliability with over 99% data availability. Approximately total of 40 radars are installed, in

production or various stages in becoming operational, e.g. in Turkey, Spain, Korea,

China, various locations in South America and Africa. We have delivered a radar to

Russia for the Sochi 2014 winter olympics and are in the process of delivering two radars

for Indian MET Department this year.

In addition to complete radar installations we are upgrading existing radars with state-of-

the-art signal processing. These projects include Malaysia, Mexico and Canada weather

radar network upgrades.

Vaisala has a dual-polarized weather radar for test and development purposes. The test radar is located at the top of Kerava water

tower in Southern Finland.Follow rain information from Kerava weather radar

Vaisala's Radiosonde Technology Still in the Lead

Despite the growing competition in the radiosonde market, Vaisala's radiosondes have remained the technology leader, often used

as a reference when comparing the competitors against each other. Our participation in the WMO radiosonde intercomparison in

China during July 2010 proved that we have been able to improve the humidity measurements even further, and can demonstrate

unique accuracy of the critical measurements.

WMO has organized radiosonde intercomparisons since 1950. Altogether

11 manufacturers participated in the 2010 event in China.

Shenzhen Invests in Enhanced Weather Services

Shenzhen, a buzzing city in Southern China, has changed dramatically over the past decades to become the metropolis it presently

is. The city's meteorological services have chosen Vaisala's weather systems to be used in the municipal weather forecasting

enhancement program. The goal is to improve the weather forecasts and to distribute accurate extreme weather warnings to the

public. The contract comprises of wind profilers, a sounding system, automatic weather stations and a lightning detection system.

The deliveries take place during 2010-2011.

Weather Critical Operations

Tough Year

"Year 2010 was a tough for Weather Critical Operations business. Market demand was slowish during the first half, and in fact for

North American Roads segment throughout the whole year. The latter part of the year was brighter, as order intake developed

favorably. Due to the delivery challenges we experienced Q2 onwards, we could not fully leverage this increased customer activity.

We continued extending the offering towards decision support systems and services."

Kai Konola, Executive Vice President, Weather Critical Operations

Weather Critical Operations business area serves customers in airports, roads, defense and weather critical energy markets. It

provides products and solutions to support customers in their operational decision making under any weather conditions. Accurate,

real-time, uninterrupted and reliable weather data is the cornerstone of efficient operations for these customers.

At airports, Vaisala's weather observation offering supports decision making to improve the efficiency, safety and environmental

compatibility of airport operations. Customers include aviation authorities, airport operators and maintenance.

Road organizations use Vaisala's weather observation products and solutions to ensure safety and optimize the efficiency of traffic

management and road maintenance operations. The products and solutions offer reliable real time weather and traffic information

to support operational decision making and are an integral part of intelligent traffic solutions

Operations in the energy market are significantly impacted by the weather all over the world. Vaisala provides the market with the

capability to measure, forecast and intelligently integrate environmental observations to enhance operational efficiency and

decisionmaking. The customers include wind farm developers and operators, turbine manufacturers, integrators, electric utilities,

and transmission system operators.

Vaisala weather observation products and systems are used in defense weather observation applications.

2010 Key Figures

Net sales 114.6 MEUR

Operational profit 1.0 MEUR

Orders received 141.3 MEUR

2010 Highlights

Decision Support for Wind Ramp Events

Vaisala is developing a new wind observing and forecasting system to provide critical decision-making support for balancing wind

power with traditional fossil fuel generation. The project started in 2009 in cooperation with Xcel Energy, a US electricity and natural

gas energy company.

The goal is to find new ways to detect and predict pending wind ramp events using specialized techniques focused at the 0-3 hour

timeframe. Project includes installing and operating an in situ observation network which together with short-term modeling systems

feed an operational decision support system.

Extensive Weather Information for Oman Airports

Vaisala signed a significant 9 million euro contract with the meteorological institute of Sultanate of Oman to supply weather

observation systems to two international and four regional airports in Oman.

Vaisala's weather observation systems are part of the extensive upgrade projects which aim at increasing efficiency and safety as

well as multiplying the airports' passenger capacity. The systems are integrated to the air traffic management networks to provide

online weather information to various user groups at the airports. See the stock exchange release.

New Airport Weather Data Service Solution

In cooperation with Finnish airport and air navigation services provider Finavia, Vaisala has developed a concept called "AWOS as

a Service". This solution transfers the ownership and operation of all weather observation systems at an airport to Vaisala who then

delivers the data to the customer as an automated service.

The new system is in operational use at Turku and Oulu airports, and undergoing a systems testing phase in two other Finnish

airports. The AWOS as a Service concept has been approved by the Finnish Transport Safety Agency Trafi.

Strengthened Roads Business

Vaisala acquired QTT (Quixote Transportation Technologies), a U.S. based road weather and information technology company at

the end of 2009. In 2010, the integration of QTT to Vaisala was successfully completed. As a result we now have even stronger

expert organization, more extensive customer base and offering that enables Vaisala to sell complete road weather solutions with

value added services, and gain foot hold in the global Intelligent Transportation Solutions (ITS) market.

In August the segment received an important order from the Port Authority of New York and New

Jersey to supply weather observation solutions for John F. Kennedy (JFK), LaGuardia, Newark,

Teterboro and Stewart International airports. The order, consisting of weather and lightning data

and runway measurements and data, was the first major one won by the new organization and

offering. The customized solution helps maximize air travel safety, minimize delays, and promote

cost-efficient operations at the airports.

Installations started at the JFK in December and will continue at the other airports in the summer of 2011. All installments will be

finalized by the end of September 2011, so the airports will be well-equipped for the next winter weather events. See the press

release.

Vaisala

Vaisala is a global leader in environmental and industrial measurement. Building on 75 years of experience, Vaisala contributes to

a better quality of life by providing a comprehensive range of innovative observation and measurement products and services for

meteorology, weather critical operations and controlled environments.

Vaisala's competitiveness is based on understanding customer requirements, premium class quality and reliability, a wide selection

of products and services, and strong application know-how. Vaisala's customer groups include meteorological and hydrological

institutes, road organizations, defense forces, aviation organizations, private sector with weather-critical operations, system

integrators and industry worldwide. Vaisala' customer base covers 0ver 140 countries.

In 2010 the Vaisala Group employed approximately 1350 professionals. Parent company Vaisala Oyj, domicile in Finland, is listed

on NASDAQ OMX Helsinki stock exchange. The Vaisala Group has offices and operations in Finland, United States, Canada,

France, United Kingdom, Germany, China, Sweden, Malaysia, India, Japan, Australia and United Arab Emirates.

Strategy

Observations for A Better World

Environmental awareness is increasing worldwide, creating demand for energy efficiency and renewable energy sources. As a

global leader in weather and industrial measurement, Vaisala is ideally positioned to respond to these requirements: to grow within

our well-established market segments and enter new growth segments. Similarly, Vaisala's business environments are developing.

Investments in airport and road infrastructure continue, resulting in a need for even more reliable weather information to maximize

safety and increase operational efficiency.

Vaisala focuses on markets with the most growth potential serving customers in the chosen meteorology, weather critical

operations and controlled environment markets. The global markets are divided into customer-specific segments, as seen in the

following image. The segments consist of customers with similar needs, and represent an attractive market in terms of size,

sustainable growth and profitability.

Mission

Our mission is to be the leading supplier of observation and measurement products and services for meteorology, chosen

segments of weather critical operations and chosen segments of controlled environment and industrial measurement

We achieve leadership by providing a comprehensive range of innovative products and services for each chosen segment with the

right mix of performance, reliability and convenience to best fulfill the needs of the customers we serve.

Vision

We believe in a world where environmental observations improve daily life.

Corporate Responsibility

Responsible Business

As a leading environmental measurement company in the world and active member in the society, Vaisala is committed to conduct

all its business in a responsible way. We want to be transparent and report openly on the economic, social and environmental

impacts of our work and follow up on our progress. Corporate Responsibility in Vaisala is guided by our Code of conduct,

Environmental policy, Anti-corruption policy and Community outreach policy.

Vaisala publishes an annual Corporate Responsibility Report (CR report) based on Global Reporting Initiative’s (GRI G3) universal

guidelines. Vaisala is also a UN Global Compact signatory and committed to its principles.

Social

Personnel

Vaisala's success is built on the skills and knowledge of its people.Our personnel is highly valued and we want to see them develop

in their careers. Fair Play is one of our most cherished values.

At the end of 2010 Vaisala Group employed approximately 1350 persons working in nearly 30 locations in 12 countries. Most of the

personnel works in the headquarters in Finland (57%) and in USA (28%).

Society

Vaisala has always been an active member of society and especially devoted to the scientific community and academia. Today, the

company is a significant contributor to universities, scholarships and numerous research programs. We engage and support

students giving them opportunities in the company and involving them in research projects and internships.

Environmental

At Vaisala, we are passionate about weather and the climate. We consider the environment to be our key stakeholder and we live

by that notion in our daily work.

We believe it is our duty to provide means for accurate measurements of both the natural and built environments and we consider

environmental safeguarding in all its forms to be of great importance. That is why we do our best to enhance our own

environmental performance on all levels.

Organization

The Vaisala Group operates in a matrix organization consisting of three business areas divided into market segments, and group

wide functions.

Meteorology, Controlled Environment and Weather Critical Operations business areas together with their related market segments,

drive, grow and develop their businesses according to the Vaisala strategy. Business areas carry profit and loss responsibility.

The group-wide functions: Products and Technology, Operations, Services and support functions provide the business areas with

resources and competencies to reach their business goals.

Services

Services are an important growth area for Vaisala with a global organization and scalable operations. This allows the company to

offer comprehensive and diverse services to all its customers.

The Services unit has global responsibility of installing, repairing and maintaining the installed base of Vaisala products and

systems, and providing operation and information services to, for example, airports, energy, life science and road weather

customers. Vaisala's service centers are located in the United States, Canada, Finland, United Kingdom, Germany, Japan, and

China.

Vaisala's Service business is reported as part of the business areas.

In 2010 net sales 33.8 MEUR, growth 20.2 %

2010 Highlights

New Data Center

The new state-of-the-art Vaisala Data Center in Birmingham, England went live in June. The project was managed under strict

schedule and was successfully completed on time. The data center serves mainly Vaisala's global road customers. In addition, it

provides support to some wind energy and airport customers.

The new data systems have been in full operation during the northern hemisphere 2010-11 winter season, which was exceptionally

cold and wintry during late November and December in most of the countries. This provided a key test of the new infrastructure,

which responded very well.

On-Site Calibration Service

In 2010, Vaisala introduced a new on-site calibration service. This new service is developed to serve customers in the life science

industry. Life science companies must calibrate and adjust their measurement equipment on a regular basis to fulfill regulatory

requirements. Most companies want to minimize production downtime and the risk involved in removing and shipping their

measurement equipment. The new service was first introduced in Massachusetts and surrounding areas.

Products and Technology

The key to Vaisala's success is its diverse research and development activity, and the combined input in technology development

is substantial. Customers can trust that Vaisala's products, solutions and services represent leading edge technology.

Altogether 20 percent of Vaisala's personnel work in product development, product management and research. The personnel is

located in Finland, the USA, Canada, the UK, and Germany.

Record Number of Product Launches

The share of research and development expenses of the Group's net sales remained high in 2010. This was due to some

extraordinary efforts aiming at aligned technology platforms and improved product modularity, usability and mass customization

capability. The efforts paid off and our 2010 accomplishments covered all focus areas.

Year 2010 was a record-breaking year for the Products and Technology unit and the number of product launches grew by 100

percent to 34.

The new standard version of the automatic weather station for meteorological use is a good example of mass customized system.

The system is simple and fast to manufacture and customers can even configure the system online. The nex step is to expand the

standardization to road and aviation weather stations.

For our roads customers we developed two easy-to-use web-based service tools that enable the customer to see at a glance what

is happening on the road weather network.

We made good progress regarding software technology platform alignment. Especially the new Web platform has made it possibly

to launch state of the art applications utilizing modern Web technologies. New Web-based applications where launched (in 2010?)

for decisions support systems and road visualization areas.

In 2010 the R&D expenses totaled 31.4 MEUR, 12.4 % of Vaisala's net sales. The share of R&D spending is expected to decrease

in 2011 to its historical ten percent level.

Research

Scientific Collaboration Across Two Continents

In addition to its own extensive R&D activities, Vaisala works closely with research institutes, universities and customers all over

the world. The forms of cooperation include partnership projects, support for meteorological training programs, grants, and the

funding of scholarships and internships.

Vaisala participates in a large number of projects together with leading research organizations in the field. Key partners include the

National Oceanic and Atmospheric Administration (NOAA) and the National Center for Atmospheric Research (NCAR), both in the

USA, the Finnish Meteorological Institute and VTT Technical Research Centre of Finland.

Research themes in 2010

o Contribution in Climate Change Research

o High-impact forecasts to support decision making

o When Weather Matters

o Research Program Development in CLEEN Oy

o Improved Nowcasting for Vancouver Olympics

o Support for Universities and Research

o Meteorological Research at the University of Helsinki

o University Cooperation in the USA

Vaisala's Contribution in Climate Change Research

In 2010, Vaisala continued the reference radiosonde program launched in 2009. The Reference Radiosonde RR01, based on

Vaisalas's RS92 radiosonde model and DRYCAP® technology is designed for upper tropospheric and stratospheric humidity

measurements. The radiosonde is in prototype phase and being evaluated by the program's research partners, including National

Center for Atmospheric Research NCAR and Finnish Meteorological Institute.

The Sounding Data Continuity service on Vaisala's website helps climate researchers to confirm the seamless continuity of their

sounding data records. All the changes in Vaisala's radiosondes and sounding software are documented on the site. Furthermore,

Vaisala has published the technical details of the RS92 radiosonde so that 3rd party sensors needed in climate research can be

directly connected to RS92.

High-impact Forecasts to Support Decion Making

Decision makers in a variety of market segments, particularly those served by Weather Critical Operations, are continually

impacted by high-impact weather events that occur throughout the year. These individuals and groups have little concern about the

weather that occurs across a general region. Instead, their attention is on their own area(s) of responsibility. These decision

makers have attempted to address the need for targeted weather data and information by deploying measurement systems within

their area of responsibility. Although such weather data is essential in aiding these decision makers in tactically (reactive)

responding to situations, they still lack site-specific, high-impact forecasts (HIFs) that will help their decision making from a

strategic (proactive) perspective.

Weather forecasts are generated across the globe; however, very few are designed and tailored to meet the needs and

requirements of specific sectors within the market segments. In its investigation of decision support systems and related solutions,

Vaisala is working with its research and industry partners to explore the potential of HIFs that are targeted at market-specific,

operational needs. Additionally, this strategy, which is focused on short-term prediction, is centered on taking full advantage of

observations, both regional and customer-specific, to optimize predictions and guidance products.

Vaisala has a long history in atmospheric observations. It is this experience and expertise that serves as the basis for site-specific,

high-impact forecasts. There are different approaches to forecasting, but regardless of the technique used, the final prediction is

highly dependent on “knowing” the state of the atmosphere at the beginning of the forecast period. Not only do observations

enhance forecasts from the standpoint of using them to initialize or start the forecast, but observations can also be used in post-

processing and verification in an effort to further increase forecast accuracy.

The efforts being undertaking by Vaisala and its partners are centered on using disparate observations in the forecast process with

the goal of not only providing accurate, timely predictions that will enable decision support systems but also demonstrate the

importance of instrumentation and measurement systems in the assessment and prediction of parameters that are vital to

customer-specific operations. Vaisala seeks to focus research and development resources at identifying, assessing, and optimizing

short-term predictions in the spatial and temporal domains that are most influenced by core Vaisala observational capabilities. With

this understanding and key partnerships, Vaisala will be in a position to deliver enhanced products and solutions to critical decision

makers across a number of market segments.

When Weather Matters

In November 2010, the U.S. National Research Council published a seminal report on needs for weather research and the

transitioning of research results into operations. “When Weather Matters: Science and Services to Meet Critical Societal Needs”

puts forward a pressing set of high-level, weather-focused challenges and needs. The report identified numerous established and

emerging research areas needing attention. The established needs pertain to improvements in: global weather prediction

techniques; quantitative precipitation forecasting; hydrologic prediction; and regional observations. The emerging needs relate to

the forecasting of weather impacts, urban meteorology, and renewable energy development.

Walt Dabberdt, Vaisala’s Chief Science Officer chaired the eight-member committee that conducted the study and authored its

report.

Research Program Development in CLEEN Oy

Vaisala is a shareholder in CLEEN Oy, a specialist body for energy and environmental expertise. In 2010, Vaisala had a leading

role in establishing a five-year, 50 million euro research program titled "Measurement, Monitoring and Environmental Assessment

(MMEA)". The program combines development of new measurement technologies, modeling and forecasting tools and latest ICT

infrastructure to create advanced environmental decision support systems. An important part of the Program is the MMEA Testbed

- an extension to the Helsinki Testbed - which will integrate data from several environmental measurement networks in a portal to

be analyzed, modeled and used as raw material for the new environmental services.

The MMEA program is jointly funded by TEKES (the Finnish Funding Agency for Technology and Innovation) and the participating

enterprises and research institutes. The consortium is large - 45 members - and includes the leading Finnish companies and

research institutes in the area of environmental monitoring and services. The main research institute partners include Technical

Research Centre of Finland (VTT), Finnish Meteorological Institute, Finnish Environment Institute, Centre for Metrology and

Accreditation (MIKES), as well as several universities. The program development and execution is facilitated by CLEEN

Oy. www.cleen.fi

Improved Nowcasting for Vancouver Olympics

Vaisala is a corporate partner in a nowcasting research program, Science and Nowcasting Olympic Weather for Vancouver 2010

(SNOW-V10), initiated by the World Meteorological Organization (WMO) in 2009. Nowcasting is short term weather forecasting

which concentrates on 0-6 hr predictions.

In the Vancouver winter olympics, SNOW-V10 provided forecasters with improved techniques to nowcast cloud, fog, visibility,

precipitation type and amount, and wind conditions in challenging mountainous environment. WMO has conducted similar

nowcasting studies already in the Sydney and Beijing Summer Olympic Games. SNOW-V10 is the first comparable study focused

on winter weather. Weather data obtained during SNOW V-10 continue to be analyzed and used to develop better ways to

forecast adverse winter weather in mountainous terrain. Vaisala is supporting a post-doctoral researcher at Colorado State

University who is researching advanced weather radar techniques.

Support for Universities and Research

Universities are an important part of Vaisala's partnership network. Vaisala funds selected meteorological research projects,

supports meteorological studies and training programs, and provides grants, scholarships, and internships. Over many years,

Vaisala has partially sponsored meteorology students selected by the American Meteorological Society. Vaisala is also supporting

a Master's Degree student at the University of Oklahoma. In Finland, Vaisala annually sponsors the theses of ten university

students.

In 2010, Vaisala granted a donation of 250,000 euros was granted to the Aalto University in Finland.

Meteorological Research at the University of Helsinki

Vaisala provides funds for radar meteorology research and teaching at the University of Helsinki's Physics Faculty. Dr. Dmitri

Moisseev from Colorado State University in the USA took up this post as a researcher in the field of Radar Meteorology at the end

of 2007. The research contract is for five years.

Professor V. Chandrasekar was appointed Professor in the Finland Distinguished Professor (FiDiPro) programme to develop new

ground and space based environmental monitoring methods and technologies. The main objective of Prof. Chandrasekar’s four

year project is to establish a world-class radar technology and application group in Finland. He will conduct research at both the

Finnish Meteorological Institute and the Physics Department of the University of Helsinki. Vaisala supports Dr. Chandrasekar' stay

in Finland.

FiDiPro is a research funding programme designed to promote the international engagement of Finnish research organizations.

Launched by the Academy of Finland and the Finnish Funding Agency for Technology and Innovation Tekes, the programme

provides Finnish universities and research institutes with the opportunity to recruit distinguished foreign or expatriate researchers to

work in Finland for a fixed term.

University Cooperation in the USA

Vaisala continues its cooperation with the Universities of Massachusetts, Oklahoma, Colorado, and Puerto Rico-Mayaguez by

supporting their joint CASA program. CASA is a 10-year research program whose goal is to develop an adaptive remote sensing

system based on low-power, low-cost, dual-polarization Doppler weather radars.

In lightning detection, and soil moisture measurement Vaisala has R&D cooperation with the University of Arizona.

Operations

Vaisala Operations cover the entire delivery chain, from procurement to the delivery of finished products and services. Its functions;

procurement, manufacturing and assembly, and project deliveries, provide economies of scale and synergies which result in a cost-

efficiency and flexibility. Approximately 360 people work in Operations in Finland, Germany, the USA and China.

In the US, the main activities in 2010 focused on the integration of the former QTT. The consolidation of operational activities from

Uniontown, Pennsylvania and Durham, North Carolina to Vaisala's Boulder facilities was completed by the end of 2010.

Activities around the World

Vaisala Group is a global company with approximately 1350 personnel around the world. Vaisala's personnel and distributor

network serve customers in more than 140 countries. Efficient customer service requires presence, knowledge of local

circumstances and close contacts with customers.

Vaisala has nearly 30 offices around the world: Australia, Canada, China, Finland, France, Germany, India, Japan, Malaysia,

Sweden, the UK, the United States, and the United Arab Emirates. In 2010, 65 percent of Vaisala's employees worked in Europe,

28 percent in North America, and 7 percent in Asia and Australia.

Larger image

Annual General Meeting

Invitation to Vaisala's 2011 Annual General Meeting

Vaisala Oyj's Annual General Meeting will be held on Thursday March 24, 2010, at 6 p.m. at Vaisala's headquarters, Vanha

Nurmijärventie 21, 01670 Vantaa, Finland. The reception of shareholders who have pre-registered to the meeting will start

at 5.15 p.m.

Agenda of the Annual General Meeting

The following items will be presented at the meeting:

1. The Board of Directors propose that the Articles of Association 3§, 5§, 6§, 9§, 10§ and 12§ are amended. The main content of

the amendment is to increase the maximum number of Board members to eight (8) and to make technical updates to meet the

present wording of the Companies Act and established practices of the company.

2. The issues defined in Section 13 of the Group’s Articles of Association and the Limited Liability Companies Act to be dealt with at

Annual General Meetings. The Agenda includes the items associated with calling the meeting to order according to normal Annual

General Meeting practice.

3. At the meeting, the Agenda will include the CEO’s review, given in conjunction with the presentation of the financial statements.

The review is not a matter for decision.

Distribution of profit and remuneration of the members of the Board

The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.65 per share be paid for 2010. The

dividend will be paid to shareholders registered in the Register of Shareholders held by Euroclear Finland Ltd on the record date

March 29, 2011. The Board proposes that the dividend be paid on April 5, 2011.

The Board proposes to the Annual General Meeting that the remuneration of the members of the Board of Directors to be elected

at the Annual General Meeting for the term until the close of the Annual General Meeting in 2012, will be as follows: EUR 35,000

for the Chairman and EUR 25,000 for each member.

Proposal for the number and election of the members of the Board of Directors

The terms of office of Board members Mikko Niinivaara and Raimo Voipio will end at the Annual General Meeting. Shareholders

representing more than 10 percent of all the votes in the company have announced their intention to propose to Vaisala’s Annual

General Meeting, to be held on March 24, 2011, that Mikko Niinivaara and Raimo Voipio are re-elected.

The same shareholders have also proposed that the number of Board members in Vaisala Corporation’s Board is seven (7) and

that Timo Lappalainen is elected as a new member of the Board.

Proposal for the election of auditors and their fee

The Board proposes that PricewaterhouseCoopers Oy, Authorized Public Accountants, continues as the Company's

auditor. PricewaterhouseCoopers Oy has informed that APA Hannu Pellinen will act as the auditor with the principal responsibility.

The Board of Directors further proposes that the auditors’ compensation will be based on reasonable invoicing presented to the

company.

The proposed persons and the auditor have given their consent to the re-election.

The authorization of the Board to grant donations

The Board of Directors proposes that the Annual General Meeting authorize donations of maximum EUR 250,000 to one or more

universities. The donations would be granted in one or several payments. According to the proposal, the Board of Directors is

authorized to decide on the recipients and the payments they receive. The authorization would be in force until the 2012 Annual

General Meeting.

Documentation

Documents relating to the financial statements, Board of Directors' proposal for the amendment of the Articles of Association, and

other documentation for Annual General Meeting will be available on March 3, 2011 at the company's head office in Vantaa, Vanha

Nurmijärventie 21. On request, copies will be sent to shareholders. The material will also be available on

www.vaisala.com/investors by March 3, 2011 at the latest.

Total number of shares and votes by series of shares

On February 21, 2011, the date of the invitation to the General Annual Meeting, Vaisala Oyj had 18,218,364 shares, out of which

3,389,684 are series K shares and 14,828,680 are series A shares. Each K share entitles its owner to 20 votes at a General

Meeting while each A share entitles its owner to 1 vote. The total number of votes by all shares is 82,622,360 out of which the

series K shares represent 67,793,680 votes and series A shares 14,828,680 votes.

Notice to the attendees

1. Right of attendance and registration

Shareholders who are registered in the company's share register maintained by Euroclear Finland Ltd by March 14, 2011 have the

right to attend the Annual General Meeting. Shareholders whose shares have not been transferred to the book-entry securities

system also have the right to attend the Annual General Meeting, provided that such shareholders were registered in the

company's share register before October 21, 1994. In such cases, shareholders must present evidence that their shareholding

rights have not been transferred to the book-entry securities system.

Shareholders wishing to attend the Annual General Meeting must register by Tuesday, March 15, 2011, 4 p.m. Registration starts

on February 28, 2011 at 9.00 a.m. Registration can be made

on Vaisala's web site at www.vaisala.com/investors

by email to paivi.heinonen@vaisala.com

by telephone on weekdays between 9 a.m. and 11 a.m., tel. +358 9 8949 2201

by letter addressed to Vaisala Oyj, Päivi Heinonen, P.O.Box 26, FIN-00421 Helsinki, Finland

In connection with the registration, a shareholder shall notify his/her name, personal identification number, address, telephone

number and the name of a possible assistant or proxy representative and the personal identification number of a proxy

representative. The personal data given to Vaisala Oyj is used only in connection with the Annual General Meeting and with the

processing of related registrations.

Letters authorizing a proxy to vote on behalf of a shareholder should be sent to the company by mail to Vaisala Oyj, Päivi

Heinonen, P.O. Box 26, 00421 Helsinki or by email to paivi.heinonen@vaisala.com before the expiry of the registration period.

2. Holders of nominee registered shares

A holder of nominee registered shares is advised to request without delay necessary instructions regarding the registration in the

shareholder's register of the company, the issuing of proxy documents and registration for the Annual General Meeting from his/her

custodian bank. The account management organization of the custodian bank will register a holder of nominee registered shares,

who wants to participate in the meeting, to be temporarily entered into the shareholders' register of the company at the latest on

March 21, 2010 by 10.00 a.m.

Vantaa February 17, 2011

Vaisala Oyj

Board of Directors

Dividend

The Board of Directors propose to the Annual General Meeting that the distributable funds be used as follows:

A dividend of EUR 0.65 per share be paid, totaling EUR 11,835,989.10

To be retained in shareholders’ equity EUR 119,152,131.10

Total EUR 130,988,120.20

Financial Reporting 2011

Interim Reports 2011

January–March (Q1) May 6, 2011

January–June (Q2) August 4, 2011

January–September (Q3) November 4, 2011

Capital Markets Day

November, Week 45 in Finland

The result stock exchange releases, presentations and briefing webcasts will be published at www.vaisala.com/investors.

Vaisala observes a silent period which starts at the end of the reporting quarter and ends to the publication of the respective

quarterly or annual results. During this time, Vaisala does not comment on the company’s financial situation, markets or future

outlook.

Corporate Governance

The Vaisala Group's corporate governance system is based on the Finnish Limited Liability Companies Act and Vaisala Oyj's

Articles of Association. The company complies with the recommendations and instructions for listed companies issued by NASDAQ

OMX Helsinki Ltd and the Finnish Financial Supervisory Authority.

The Vaisala Group's parent company, Vaisala Oyj (Business ID 0124416-2), is incorporated and domiciled in Finland. The

company's A shares are listed on NASDAQ OMX Helsinki Ltd.

Vaisala complies with the Finnish Corporate Governance Code published by the Securities Market Association on June 15, 2010.

The code is available on the Securities Market Association website www.cgfinland.fi. The company's policy deviates from the

recommendation concerning the term of Board members in accordance with the latter part of the Code’s Comply or Explain

principle.

Read more about Vaisala's Corporate Governance atwww.vaisala.com/en/investors/corporategovernance