PONSSE OYJ ANNUAL REPORT 2005

Transcription

PONSSE OYJ
ANNUAL REPORT
2005
www.ponsse.com
PONSSE OYJ
ANNUAL REPORT 2005
Ponsse in brief
Ponsse Oyj develops, manufactures and markets forest
machines
for
the
cut-to-length
method
and
timber
harvesting-related information technology as well as
producing services relating to their effective use. The
company was established in 1970, and since then it has
been a pioneer in timber harvesting solutions based on
the cut-to-length method.
Ponsse Oyj’s shares are quoted on the main list of the
Helsinki Stock Exchange. Export and foreign operations
account for approximately sixty-five per cent of the
company’s turnover. The group has more than 750
employees and it engages in operations in nearly thirty
countries.
2
Ponsse 2005
Ponsse 2005
3
PONSSE OYJ
ANNUAL REPORT 2005
Ponsse in brief
Ponsse Oyj develops, manufactures and markets forest
machines
for
the
cut-to-length
method
and
timber
harvesting-related information technology as well as
producing services relating to their effective use. The
company was established in 1970, and since then it has
been a pioneer in timber harvesting solutions based on
the cut-to-length method.
Ponsse Oyj’s shares are quoted on the main list of the
Helsinki Stock Exchange. Export and foreign operations
account for approximately sixty-five per cent of the
company’s turnover. The group has more than 750
employees and it engages in operations in nearly thirty
countries.
2
Ponsse 2005
Ponsse 2005
3
Contents
Ponsse in brief
3
Contents
5
Ponsse’s mission
6
Quality policy, ISO 9001:2000
7
Information for Shareholders
8
Year 2005 in brief
9
Review by the Chairman of the Board and the President, CEO 10
Events in 2005
12
Cut-to-length method contributes to Ponsse’s success
14
Products
22
Our growth potential
24
Actions supporting growth by promoting the quality of
products and production
32
Board of Directors and Management
38
Addresses
44
Financial Statements
46
Front cover photo: Stora Enso
4
Ponsse 2005
Ponsse 2005
5
Contents
Ponsse in brief
3
Contents
5
Ponsse’s mission
6
7
8
Year 2005 in brief
9
Review by the Chairman of the Board and the President, CEO 10
Events in 2005
12
Cut-to-length method contributes to Ponsse’s success
14
Products
22
Our growth potential
24
Actions supporting growth by promoting the quality of
products and production
32
Board of Directors and Management
38
Addresses
44
Financial Statements
46
Front cover photo: Stora Enso
4
Ponsse 2005
Ponsse 2005
5
PONSSE’S MISSION
QUALITY POLICY
Ponsse’s mission
PONSSE’S MISSION
We provide our customers with the
best forest machines in the market.
We promote sustainable wood consumption by producing high-quality
wood-harvesting solutions and services in order to ensure the success of
our customers, increase shareholder
value and secure our own future.
PONSSE’S VALUES
CLOSENESS TO THE CUSTOMER
• understanding the customer’s business
• taking a genuine interest in the customer, getting to
know customer’s needs
• maintaining a lean organisation - decision-makers close
• being reachable
• pursuing customer-driven production
RELIABILITY
• always being there for the customer
• keeping our promises
• acting honestly and ethically
PONSSE SPIRIT
PONSSE’S VISION
We are the preferred partner in our
industry and the most valued brand
in selected market areas. We operate internationally while taking local
circumstances into account and supply the best cut-to-length harvesting
technology. Our products are based
on the special needs of each market
area. Differentiated across a range of
markets through the quality of our
products and our efficiency and reliability, we make major investments in
continuous skills development within
the Ponsse Academy’s learning environment. Our operations are cost-efficient and profitable, ensuring our
future competitiveness.
6
Ponsse 2005
• attending to staff welfare
• having the will to succeed, being entrepreneurial
• displaying constructive humility, but confronting one’s
work courageously
• refusing to compromise in achieving goals
• assuming common responsibility for the success of
our business
• maintaining friendliness and fair play
We develop, produce and market reliable and high-quality cut-to-length forest
machines and information technology
related to timber harvesting, as well as
supplying services to ensure their effective use. We constantly fulfil the requirements of our customers with our highquality products, services and operations.
According to our customer-oriented approach, we listen to and understand our
customers and respect their views.
The quality of our products and operations is our common objective. All
Ponsse personnel participate in promoting and developing quality through
their actions. We only deliver products
and services that fulfil our quality criteria. Each Ponsse employee has a process
customer whose quality requirements
must be met to achieve flawless operation, and to ensure the satisfaction of
our customers. We set goals, measure
and audit our operations and react effectively to possible deviations. In this
way we also ensure our competitiveness
for the future.
WILLINGNESS TO SERVE
• serving the customer as you would like to be served
• not ‘passing the buck’ when the customer calls with a problem
• helping colleagues in order to ensure successful customer care
The guarantee of our quality is skilful
and motivated personnel and profitable
business.
INNOVATION
The management of Ponsse is committed
to realising the company’s quality policy
and communicating it to the personnel.
By sufficient training we ensure that the
quality policy is understood throughout
the whole group.
•
•
•
•
continuous improvement of products and services
showing initiative and open-mindedness
regarding change as an opportunity
taking the initiative to ensure our competitiveness
Ponsse 2005
7
PONSSE’S MISSION
QUALITY POLICY
Ponsse’s mission
PONSSE’S MISSION
We provide our customers with the
best forest machines in the market.
We promote sustainable wood consumption by producing high-quality
wood-harvesting solutions and services in order to ensure the success of
our customers, increase shareholder
value and secure our own future.
PONSSE’S VALUES
CLOSENESS TO THE CUSTOMER
• understanding the customer’s business
• taking a genuine interest in the customer, getting to
know customer’s needs
• maintaining a lean organisation - decision-makers close
• being reachable
• pursuing customer-driven production
RELIABILITY
• always being there for the customer
• keeping our promises
• acting honestly and ethically
PONSSE SPIRIT
PONSSE’S VISION
We are the preferred partner in our
industry and the most valued brand
in selected market areas. We operate internationally while taking local
circumstances into account and supply the best cut-to-length harvesting
technology. Our products are based
on the special needs of each market
area. Differentiated across a range of
markets through the quality of our
products and our efficiency and reliability, we make major investments in
continuous skills development within
the Ponsse Academy’s learning environment. Our operations are cost-efficient and profitable, ensuring our
future competitiveness.
6
Ponsse 2005
• attending to staff welfare
• having the will to succeed, being entrepreneurial
• displaying constructive humility, but confronting one’s
work courageously
• refusing to compromise in achieving goals
• assuming common responsibility for the success of
our business
• maintaining friendliness and fair play
We develop, produce and market reliable and high-quality cut-to-length forest
machines and information technology
related to timber harvesting, as well as
supplying services to ensure their effective use. We constantly fulfil the requirements of our customers with our highquality products, services and operations.
According to our customer-oriented approach, we listen to and understand our
customers and respect their views.
The quality of our products and operations is our common objective. All
Ponsse personnel participate in promoting and developing quality through
their actions. We only deliver products
and services that fulfil our quality criteria. Each Ponsse employee has a process
customer whose quality requirements
must be met to achieve flawless operation, and to ensure the satisfaction of
our customers. We set goals, measure
and audit our operations and react effectively to possible deviations. In this
way we also ensure our competitiveness
for the future.
WILLINGNESS TO SERVE
• serving the customer as you would like to be served
• not ‘passing the buck’ when the customer calls with a problem
• helping colleagues in order to ensure successful customer care
The guarantee of our quality is skilful
and motivated personnel and profitable
business.
INNOVATION
The management of Ponsse is committed
to realising the company’s quality policy
and communicating it to the personnel.
By sufficient training we ensure that the
quality policy is understood throughout
the whole group.
•
•
•
•
continuous improvement of products and services
showing initiative and open-mindedness
regarding change as an opportunity
taking the initiative to ensure our competitiveness
Ponsse 2005
7
YEAR 2005 IN BRIEF
INFORMATION FOR SHAREHOLDERS
Year 2005 in brief
Ponsse Oyj’s Annual General Meeting
for 2005 will be held on Wednesday, 15
March 2006 at the company’s registered
office at Ponssentie 22, 74200 Vieremä,
commencing at 10:00 a.m.
ELIGIBILITY TO ATTEND
To be eligible to attend the Annual General Meeting, shareholders should be registered by 3 March 2006 in the share
register kept by the Finnish Central Securities Depository Ltd (APK). A shareholder in whose name the shares are, is
automatically registered in the company’s
share register. A shareholder with an administrative registration can be temporarily added in the company’s share register.
This must be done on 3 March 2006 at
the latest for the purpose of attending the
General Meeting. For a temporary registration, shareholders should contact their
account operator organisation.
REGISTRATION
Shareholders wishing to attend the Annual General Meeting should notify the
company of their intention to do so by
4 p.m. Finnish time on Friday 10 March
2006, either in writing to Ponsse Oyj,
Share Register, FI-74200 Vieremä, Finland; by telephone on +358 20 768 800;
by fax on +358 20 768 8690; or on the
company’s website at www.ponsse.com/
agm2006. Notifications made via letter
must arrive before the end of the notification period. Please deliver any letters
of attorney based accompanying the advance registration.
DIVIDEND
Ponsse Oyj’s Board of Directors will recommend to the Annual General Meeting
that a dividend of EUR 0.80 per share be
paid for 2005. The dividend shall be paid
8
Ponsse 2005
to all shareholders who are listed in the
share register kept by the Finnish Central Securities Depository Ltd as a company shareholder on the record date, 20
March 2006. Dividend shall be paid on
27 March 2006.
SHARE REGISTER
Ponsse Oyj’s shares and shareholders are
listed in the shareholder register held by
the Finnish Central Securities Depository Ltd. Shareholders are requested to
report any change of address and other
similar matters related to their shareholding to the book-entry securities register in
which they have a book-entry securities
account.
FINANCIAL REPORTS
IN 2006
In addition to financial statements and
annual report on 2006, Ponsse Oyj will
issue three Interim Reports. The Interim Reports of the financial period 2006
will be published as follows:
- January - March 25.04.2006 at 9 a.m.
- January - June
18.07.2006 at 9 a.m.
- January - Sept. 17.10 2006 at 9 a.m.
The Interim Reports will be published
in Finnish and English on the company’s web pages at www.ponsse.com.
ORDERING THE FINANCIAL
PUBLICATIONS
This Annual Report is available in both
Finnish and English. You may order Annual Reports from the following address:
Ponsse Oyj
Ponssentie 22
74200 Vieremä, Finland
Tel. +358 20 768 800
Fax +358 20 768 8690
E-mail:
[email protected]
The Annual Report will also be available
on the Internet at www.ponsse.com.
INVESTOR RELATIONS
Ponsse maintains a two week silent period
prior to the publication of financial results, during which company representatives will not comment on the earnings.
At other times, questions and inquiries
from analysts and investors will be answered via phone, e-mail, and in organized investor meetings.
Should you have any questions on
Ponsse’s business operations, please consult the following people:
Arto Tiitinen
President and CEO
Tel. +358 20 768 8621
Fax. +358 20 768 8690
E-mail: [email protected]
Mikko Paananen
CFO, deputy CEO
Tel. +358 20 768 8648
Fax +358 20 768 8690
INVESTMENT ANALYSES
These companies, among others, are following Ponsse as an investment object:
Opstock Securities Ltd
FIM Banking Co Ltd
eQ Bank Ltd
Evli Bank Plc
In April, the company announced the
establishment of a subsidiary in Brazil.
Ponsse Latin America will be responsible
for establishing and developing Ponsse’s
sales and service network in the region.
The company will sell PONSSE forest
machines throughout South America,
and supports Ponsse’s dealer network.
The company headquarters are in Brazil.
In April, Ponsse USA, Inc. extended its operations to cover all North
American operations and was renamed
Ponsse North America Inc. Assuming total responsibility for the development of
Ponsse’s maintenance and distribution
network in North America, the company will extend its distribution network
through private dealers.
In July, Ponsse purchased ninety-two
per cent of Lako Oy’s shares. Lako Oy
manufactures harvesting heads and its
product line includes a series of eucalyptus-debarking harvesting heads. The
company’s harvesting heads are suited for
attachment to both conventional rubbertyred cut-to-length forest machines and
excavator-based applications. In January
2006, Ponsse purchased eight per cent of
Lako Oy’s shares. This purchase increased
Ponsse Oyj’s ownership in the company
to one hundred per cent.
In August and September, Ponsse signed
partnership agreements with Maaseudun
Kone and the German company NAF.
Both partnership agreements are aimed
at long-term co-operation that will ensure Ponsse’s competitiveness and product quality in the future.
In December, Ponsse Oyj and Konekesko
Ltd agreed to co-operate in the Baltic
States. As a subsidiary of Kesko Agro
Ltd, Konekesko Ltd has a sales and service network covering all of the Baltic
States that provides excellent opportunities for using the existing infrastructure in the marketing and servicing of
PONSSE forest machines.
In October, Ponsse strengthened its distribution network in Russia by concluding a distributor agreement with OOO
Lespromservis of Russia. According to
the agreement, OOO Lespromservis will
market, sell and maintain PONSSE forest machines in Russia’s Komi, Kirov and
Perm regions. OOO Lespromservis will
also be responsible for the maintenance
of PONSSE forest machines and equipment and customer training.
In December, the company announced
its plan for expanding its production in
Brazil. Ponsse is to initiate production
and product development of eucalyptus-debarking harvesting heads near Sao
Paolo. This is a continuation to Ponsse’s
strategy for Latin America.
Key figures
2005
2004
Turnover, MEUR
226.1
177.9
Operating profit, MEUR
29.1
19.7
Profit before extraordinary items, MEUR
28.1
19.2
Earnings per share (EPS), EUR
1.40
0.97
Equity per share, EUR
3.67
2.47
Equity ratio, %
47.6
36.0
Average number of staff
729
607
International business operations/turnover, %
65.4
62.0
Ponsse 2005
9
YEAR 2005 IN BRIEF
INFORMATION FOR SHAREHOLDERS
Year 2005 in brief
Ponsse Oyj’s Annual General Meeting
for 2005 will be held on Wednesday, 15
March 2006 at the company’s registered
office at Ponssentie 22, 74200 Vieremä,
commencing at 10:00 a.m.
ELIGIBILITY TO ATTEND
To be eligible to attend the Annual General Meeting, shareholders should be registered by 3 March 2006 in the share
register kept by the Finnish Central Securities Depository Ltd (APK). A shareholder in whose name the shares are, is
automatically registered in the company’s
share register. A shareholder with an administrative registration can be temporarily added in the company’s share register.
This must be done on 3 March 2006 at
the latest for the purpose of attending the
General Meeting. For a temporary registration, shareholders should contact their
account operator organisation.
REGISTRATION
Shareholders wishing to attend the Annual General Meeting should notify the
company of their intention to do so by
4 p.m. Finnish time on Friday 10 March
2006, either in writing to Ponsse Oyj,
Share Register, FI-74200 Vieremä, Finland; by telephone on +358 20 768 800;
by fax on +358 20 768 8690; or on the
company’s website at www.ponsse.com/
agm2006. Notifications made via letter
must arrive before the end of the notification period. Please deliver any letters
of attorney based accompanying the advance registration.
DIVIDEND
Ponsse Oyj’s Board of Directors will recommend to the Annual General Meeting
that a dividend of EUR 0.80 per share be
paid for 2005. The dividend shall be paid
8
Ponsse 2005
to all shareholders who are listed in the
share register kept by the Finnish Central Securities Depository Ltd as a company shareholder on the record date, 20
March 2006. Dividend shall be paid on
27 March 2006.
SHARE REGISTER
Ponsse Oyj’s shares and shareholders are
listed in the shareholder register held by
the Finnish Central Securities Depository Ltd. Shareholders are requested to
report any change of address and other
similar matters related to their shareholding to the book-entry securities register in
which they have a book-entry securities
account.
FINANCIAL REPORTS
IN 2006
In addition to financial statements and
annual report on 2006, Ponsse Oyj will
issue three Interim Reports. The Interim Reports of the financial period 2006
will be published as follows:
- January - March 25.04.2006 at 9 a.m.
- January - June
18.07.2006 at 9 a.m.
- January - Sept. 17.10 2006 at 9 a.m.
The Interim Reports will be published
in Finnish and English on the company’s web pages at www.ponsse.com.
ORDERING THE FINANCIAL
PUBLICATIONS
This Annual Report is available in both
Finnish and English. You may order Annual Reports from the following address:
Ponsse Oyj
Ponssentie 22
74200 Vieremä, Finland
Tel. +358 20 768 800
Fax +358 20 768 8690
E-mail:
[email protected]
The Annual Report will also be available
on the Internet at www.ponsse.com.
INVESTOR RELATIONS
Ponsse maintains a two week silent period
prior to the publication of financial results, during which company representatives will not comment on the earnings.
At other times, questions and inquiries
from analysts and investors will be answered via phone, e-mail, and in organized investor meetings.
Should you have any questions on
Ponsse’s business operations, please consult the following people:
Arto Tiitinen
President and CEO
Tel. +358 20 768 8621
Fax. +358 20 768 8690
Mikko Paananen
CFO, deputy CEO
Tel. +358 20 768 8648
Fax +358 20 768 8690
INVESTMENT ANALYSES
These companies, among others, are following Ponsse as an investment object:
Opstock Securities Ltd
FIM Banking Co Ltd
eQ Bank Ltd
Evli Bank Plc
In April, the company announced the
establishment of a subsidiary in Brazil.
Ponsse Latin America will be responsible
for establishing and developing Ponsse’s
sales and service network in the region.
The company will sell PONSSE forest
machines throughout South America,
and supports Ponsse’s dealer network.
The company headquarters are in Brazil.
In April, Ponsse USA, Inc. extended its operations to cover all North
American operations and was renamed
Ponsse North America Inc. Assuming total responsibility for the development of
Ponsse’s maintenance and distribution
network in North America, the company will extend its distribution network
through private dealers.
In July, Ponsse purchased ninety-two
per cent of Lako Oy’s shares. Lako Oy
manufactures harvesting heads and its
product line includes a series of eucalyptus-debarking harvesting heads. The
company’s harvesting heads are suited for
attachment to both conventional rubbertyred cut-to-length forest machines and
excavator-based applications. In January
2006, Ponsse purchased eight per cent of
Lako Oy’s shares. This purchase increased
Ponsse Oyj’s ownership in the company
to one hundred per cent.
In August and September, Ponsse signed
partnership agreements with Maaseudun
Kone and the German company NAF.
Both partnership agreements are aimed
at long-term co-operation that will ensure Ponsse’s competitiveness and product quality in the future.
In December, Ponsse Oyj and Konekesko
Ltd agreed to co-operate in the Baltic
States. As a subsidiary of Kesko Agro
Ltd, Konekesko Ltd has a sales and service network covering all of the Baltic
States that provides excellent opportunities for using the existing infrastructure in the marketing and servicing of
PONSSE forest machines.
In October, Ponsse strengthened its distribution network in Russia by concluding a distributor agreement with OOO
Lespromservis of Russia. According to
the agreement, OOO Lespromservis will
market, sell and maintain PONSSE forest machines in Russia’s Komi, Kirov and
Perm regions. OOO Lespromservis will
also be responsible for the maintenance
of PONSSE forest machines and equipment and customer training.
In December, the company announced
its plan for expanding its production in
Brazil. Ponsse is to initiate production
and product development of eucalyptus-debarking harvesting heads near Sao
Paolo. This is a continuation to Ponsse’s
strategy for Latin America.
Key figures
2005
2004
Turnover, MEUR
226.1
177.9
Operating profit, MEUR
29.1
19.7
Profit before extraordinary items, MEUR
28.1
19.2
1.40
0.97
3.67
2.47
Equity ratio, %
47.6
36.0
Average number of staff
729
607
International business operations/turnover, %
65.4
62.0
Ponsse 2005
9
REVIEW BY THE CHAIRMAN OF THE BOARD AND THE PRESIDENT AND CEO
Review by the Chairman of the Board and
the President and CEO
and production technology, was introduced into use at the beginning of 2006.
The enlargement of the component factory as well as the construction of the delivery equipment hall will be started in
2006. These completed and upcoming
investments will enable us to double our
production.
The year 2005 was a
year of considerable
investments.
Ponsse’s 35th financial year proved to be
an anniversary year in many ways. We
strengthened our position among the
world’s three leading forest machine manufacturers, and also maintained our strong
position in Finland – the most competitive forest machine market in the world.
Our growth exceeded the general market
development and we achieved the best result in the history of the company. Our
exports accounted for an all-time record
high, 65.4 per cent of the net sales, thanks
to the development of our international
operations. The sales of our services also
developed favourably, increasing 28.2 per
cent from the previous year. The market
value of share capital grew by 56 per cent
and the number of shareholders increased
by more than 1000.
Ponsse’s 35-year experience in manufacturing cut-to-length harvesting machines
is just as long as the history of the cutto-length method itself. During our anniversary year we developed our operation
so that we could respond to the challeng-
10
Ponsse 2005
es of the future. The 35-year history was
celebrated with a new corporate look and
the yellow colouring of the machines. The
origin of the yellow colour, which is now
offered to customers as one of the colour
choices, derives from the colouring of the
first ever PONSSE forest machines 35
years ago.
The increased demand requires that we
continue to develop our operations. In
fact, the year 2005 was a year of considerable investments.
The significance
We decided
to establish
of technology in
a harvester
forest machines will
head factory
in Brazil, the
increase.
operations of
our subsidiary Epec Oy were further developed and
expanded into a technology company,
and we completed the enlargement of the
Vieremä assembly plant. The new assembly plant, which utilises latest methods
Epec Oy, and our investments in the company will continue in 2006.
Here at Ponsse, we want to do business
as close to our customers as possible, and
therefore focus our business operations
on areas where most of the world’s forest resources are located. The subsidiaries
established at the beginning of the year,
In 2005, we also established the Ponsse
OOO Ponsse and Ponsse Latin America
Academy, lead by Paula Oksman who
Ltda., enable the future development of
started as Principal of Ponsse Academy on
international business operations in these
1 August. Ponsse Acadstrategically signifiemy will be responsible
cant market areas,
Progress in
for the training of peri.e. Russia and Brasonnel and the distrizil. Our distribustrategically
bution network, and its
tion network was
significant market
operations will be constrengthened in Deducted at the customer
cember as we signed
areas.
service centre, which
a contract concernwas completed next to
ing Estonia, Latvia
the factory in the end of the year 2005.
and Lithuania with Konekesko Ltd, and
The new customer service centre was built
a contract with OOO Lespromservis
so that we could provide our Finnish and
on cooperation in the Komi, Kirov and
international visitors with even better servPerm regions in Russia. The range of opice. Last year we had more than 6000 visierations of our Northern American subtors at the factory.
sidiary, Ponsse North America Inc., was
expanded to include responsibility for
We believe that the cut-to-length methproviding support to Ponsse’s dealers in
od will account for a bigger share of toCanada as well as the development of the
tal harvesting than the other harvesting
maintenance and distribution network in
methods. At the moment, as little as apNorth America.
proximately 35 per cent of mechanically
harvested timber is harvested using the
Our strong specialisation in the cut-toCTL method. Due to issues such as the
length method and our customer-oriincreased use of paper in general, the logented operating model have always been
ging volumes and industrial consumption
our competitive assets, but one of our
of wood are expected to increase, especialgreatest advantages in this fierce market
ly in Latin America and Russia. More and
situation has been our skilled Ponsse permore attention is being paid to the envisonnel. Ponsse employees have shown a
ronmental friendliness and efficiency of
positive attitude towards their work, and
the harvesting method, and the quality of
we believe that our customers can see this
harvested wood in all market areas. This
in our high-quality products and great
also means that the role of technology in
service. Our success relies heavily on the
the forest machine will be emphasised in
great contribution of our personnel, for
the future. Last year we also strengthened
which we would like to thank each and
the operation of our technology subsidiary
everyone at Ponsse.
We would also like to thank our customers, partners, and shareholders for their
trust. We would like to continue to be
well worth your trust. Our special thanks
go to the municipality of Vieremä, with
whom we worked in close cooperation
on projects such as the construction of
our factory premises.
The investments in
Ponsse’s hometown
Promising
have been signifioutlook for the
cant to us, because
Vieremä provides us
year 2006.
with great facilities
and conditions to
conduct and increase
our strong business operations.
The general outlook of the forest sector,
our order book, and active business development projects only confirm our prognosis that the year of 2006 will be even more
successful than its predecessor. One of our
most important development projects will
be the development of our distribution
and service network. We will also continue the development work on our supplier
network, which we started in 2005. The
production and product development of
debarking harvester heads will begin in
Brazil at the beginning of 2006. Currently,
we are ready to make acquisitions or other
business arrangements, provided that they
are in accordance with our strategy and
state of will. The customer-oriented operating model that has been our asset for 35
years will continue to be the foundation of
all our operations in the future.
Einari Vidgrén
Chairman
of the Board
Arto Tiitinen
President and CEO
Ponsse 2005
11
Review by the Chairman of the Board and
the President and CEO
and production technology, was introduced into use at the beginning of 2006.
The enlargement of the component factory as well as the construction of the delivery equipment hall will be started in
2006. These completed and upcoming
investments will enable us to double our
production.
The year 2005 was a
year of considerable
investments.
Ponsse’s 35th financial year proved to be
an anniversary year in many ways. We
strengthened our position among the
world’s three leading forest machine manufacturers, and also maintained our strong
position in Finland – the most competitive forest machine market in the world.
Our growth exceeded the general market
development and we achieved the best result in the history of the company. Our
exports accounted for an all-time record
high, 65.4 per cent of the net sales, thanks
to the development of our international
operations. The sales of our services also
developed favourably, increasing 28.2 per
cent from the previous year. The market
value of share capital grew by 56 per cent
and the number of shareholders increased
by more than 1000.
Ponsse’s 35-year experience in manufacturing cut-to-length harvesting machines
is just as long as the history of the cutto-length method itself. During our anniversary year we developed our operation
so that we could respond to the challeng-
10
Ponsse 2005
es of the future. The 35-year history was
celebrated with a new corporate look and
the yellow colouring of the machines. The
origin of the yellow colour, which is now
offered to customers as one of the colour
choices, derives from the colouring of the
first ever PONSSE forest machines 35
years ago.
The increased demand requires that we
continue to develop our operations. In
fact, the year 2005 was a year of considerable investments.
The significance
We decided
to establish
of technology in
a harvester
forest machines will
head factory
in Brazil, the
increase.
operations of
our subsidiary Epec Oy were further developed and
expanded into a technology company,
and we completed the enlargement of the
Vieremä assembly plant. The new assembly plant, which utilises latest methods
Epec Oy, and our investments in the company will continue in 2006.
Here at Ponsse, we want to do business
as close to our customers as possible, and
therefore focus our business operations
on areas where most of the world’s forest resources are located. The subsidiaries
established at the beginning of the year,
In 2005, we also established the Ponsse
OOO Ponsse and Ponsse Latin America
Academy, lead by Paula Oksman who
Ltda., enable the future development of
started as Principal of Ponsse Academy on
international business operations in these
1 August. Ponsse Acadstrategically signifiemy will be responsible
cant market areas,
Progress in
for the training of peri.e. Russia and Brasonnel and the distrizil. Our distribustrategically
bution network, and its
tion network was
significant market
operations will be constrengthened in Deducted at the customer
cember as we signed
areas.
service centre, which
a contract concernwas completed next to
ing Estonia, Latvia
the factory in the end of the year 2005.
and Lithuania with Konekesko Ltd, and
The new customer service centre was built
a contract with OOO Lespromservis
so that we could provide our Finnish and
on cooperation in the Komi, Kirov and
international visitors with even better servPerm regions in Russia. The range of opice. Last year we had more than 6000 visierations of our Northern American subtors at the factory.
sidiary, Ponsse North America Inc., was
expanded to include responsibility for
We believe that the cut-to-length methproviding support to Ponsse’s dealers in
od will account for a bigger share of toCanada as well as the development of the
tal harvesting than the other harvesting
maintenance and distribution network in
methods. At the moment, as little as apNorth America.
proximately 35 per cent of mechanically
harvested timber is harvested using the
Our strong specialisation in the cut-toCTL method. Due to issues such as the
length method and our customer-oriincreased use of paper in general, the logented operating model have always been
ging volumes and industrial consumption
our competitive assets, but one of our
of wood are expected to increase, especialgreatest advantages in this fierce market
ly in Latin America and Russia. More and
situation has been our skilled Ponsse permore attention is being paid to the envisonnel. Ponsse employees have shown a
ronmental friendliness and efficiency of
positive attitude towards their work, and
the harvesting method, and the quality of
we believe that our customers can see this
harvested wood in all market areas. This
in our high-quality products and great
also means that the role of technology in
service. Our success relies heavily on the
the forest machine will be emphasised in
great contribution of our personnel, for
the future. Last year we also strengthened
which we would like to thank each and
the operation of our technology subsidiary
everyone at Ponsse.
We would also like to thank our customers, partners, and shareholders for their
trust. We would like to continue to be
well worth your trust. Our special thanks
go to the municipality of Vieremä, with
whom we worked in close cooperation
on projects such as the construction of
our factory premises.
The investments in
Ponsse’s hometown
Promising
have been signifioutlook for the
cant to us, because
Vieremä provides us
year 2006.
with great facilities
and conditions to
conduct and increase
our strong business operations.
The general outlook of the forest sector,
our order book, and active business development projects only confirm our prognosis that the year of 2006 will be even more
successful than its predecessor. One of our
most important development projects will
be the development of our distribution
and service network. We will also continue the development work on our supplier
network, which we started in 2005. The
production and product development of
debarking harvester heads will begin in
Brazil at the beginning of 2006. Currently,
we are ready to make acquisitions or other
business arrangements, provided that they
are in accordance with our strategy and
state of will. The customer-oriented operating model that has been our asset for 35
years will continue to be the foundation of
all our operations in the future.
Einari Vidgrén
Chairman
of the Board
Arto Tiitinen
President and CEO
Ponsse 2005
11
EVENTS IN 2005
EVENTS IN 2005
Events in Ponsse’s 35th anniversary year
12 JANUARY
The first anniversary celebration
model for 2005 was delivered to
Hannu and Markku Sahlström.
The yellow PONSSE Beaver of
the anniversary is Metsäkuljetus
Sahlström Oy’s 20th PONSSE
forest machine.
26 JANUARY
The Association of Finnish Work
awarded Ponsse Oyj with the right
to use of the Key Flag emblem for
its products.
JANUARY
Ponsse established an organisation
in Sweden’s large storm damage areas that was responsible for maintenance and support services for both
the local equipment and equipment
arriving from other countries.
8 FEBRUARY
Ponsse Oyj and the Vieremä local
authority prepare for a facilities arrangement where the Vieremä local
authority builds new production
facilities and rents them to Ponsse
during 2005 and 2006.
8 FEBRUARY
Automation engineer Jouni Matikainen was appointed Managing
Director of Ponsses’ subsidiary
Epec Oy as of 1 March 2005.
11 FEBRUARY
2004 financial statements.
18 FEBRUARY
The Vieremä local council decided
on the participation of the Vieremä
local authority in Ponsse Oyj’s facilities arrangements.
18 FEBRUARY
Ponsse Oyj started marketing communications cooperation with the
advertising agency Imageneering
Worldwide Partners.
1 MARCH
Ponsse’s 35th anniversary tour covering the whole country begins
in Ranua and ends in Iisalmi on
1 April.
21 FEBRUARY
Ponsse announced that the value
of the facilities arrangements with
the Vieremä local authority and
other investments is €10 million.
In addition to the expansions to
the assembly factory and the component factory, the investments
consist of equipment and machinery, a customer service centre and
the facilities for the Ponsse Academy. The new facilities will double the company’s production capacity.
15 MARCH
Ponsse Oyj’s annual shareholders’ meeting decided to distribute
a dividend of €0.20 per share and
pay a profit share to the staff of the
company. The following were elect-
12
Ponsse 2005
ed to continue as members of the
Board of Directors: Chairman, industrial counsellor, Einari Vidgrén;
Vice Chairman, Master of Pedagogy, Juha Vidgrén; and the other
members Bachelor of Economic
Sciences Nils Hagman; Managing
Director, wood industry technician, Ilkka Kylävainio; manager,
Licentiate of Economic Sciences,
Seppo Remes; and Master of Philosophy Mirja Ryynänen.
18 MARCH
Ponsse Oyj sells the information
system unit located in Kajaani to
Epec Oy, which it acquired in December 2004.
8 APRIL
The founder of Ponsse Oyj, industrial counsellor Einari Vidgrén established a foundation under his
own name the aim of which is to
increase the appreciation of work
done in the field of machine harvesting.
12 APRIL
The building work for the Ponsse
customer service centre begins. The
centre is intended for the needs of
the increased number of customers
and visitors and the Ponsse Academy. The winner in the competitive
bidding was Tapio Leinonen Oy, a
construction company located at
Vieremä.
25 APRIL
Ponsse establishes a subsidiary
in South America.M.Sc. (Econ.)
Claudio Costa was invited to act
as the Managing Director for the
company operating in Brazil.
26 APRIL
The operations of Ponsse USA Inc,
which was established in 1995,
were expanded to cover the entire
North American operations and
at the same time the name of the
company was changed to Ponsse
North America Inc.
20 MAY
Ponsse signed a contract with the
vocational institution PohjoisKarjalan ammattiopisto Valtimo
concerning cooperation in the
PONSSE forest machine mechanic
training programme to be started in
the autumn of 2005.
27 MAY
Paula Oksman was appointed as
HR Director at Ponsse Oyj and as
Principal of the Ponsse Academy as
of 1 August 2005.
27 MAY
Ponsse Oyj announced that it would
be involved in establishing a special
fund aimed at supporting research
work promoting the use of modern
technology and sustainable development in European countries.
18 APRIL
Ville Siekkinen was appointed Managing Director of OOO Ponsse,
Ponsse’s Russian subsidiary as of 1
May 2005.
6 JUNE
Ponsse Oyj and the javelin thrower
Tero Pitkämäki signed a sponsorship deal.
20 APRIL
Ponsse Oyj’s first interim report in
accordance with IFRS standards for
the period 1 January – 31 March
2005 is published.
1 JULY
Ponsse Oyj acquired a 92 per cent
holding in the stock of Lako Oy, a
Turku-based company designing,
marketing and manufacturing harvester heads.
20 JULY
Ponsse Oyj’s interim report in accordance with IFRS standards for
the period 1 January – 30 June
2005 is published.
12 AUGUST
Ponsse Oyj and Maaseudun Kone,
best known as a manufacturer of
safety cabins for tractors, enter into
a partnership agreement aiming at
developing the competitiveness of
both companies.
25 AUGUST
The Society of Finnish Professional Foresters and Nordea Bank
awarded industrial counsellor
Einari Vidgrén with the Forest Act
of the Year award for establishing a
foundation promoting the appreciation of timber harvesting and for
involvement in the establishment
of a scientific special fund.
13 SEPTEMBER
Ponsse Oyj and the German NAF
Neunkirchener Achsenfabrik AG,
which manufactures axles and
transmission components, signed
a partnership agreement aimed at
long-term cooperation.
19 OCTOBER
the period 1 January – 30 September 2005 is published.
25 OCTOBER
Ponsse Oyj and the Russian OOO
Lespromservis enter into a resale
agreement. OOO Lespromservis
markets, sells and services PONSSE
forest machines in Russia in the areas of Komi, Kirov and Perm.
16 DECEMBER
Ponsse Oyj announced that it will
begin product development and
production of eucalyptus-debarking harvester heads in Brazil.
23 DECEMBER
Ponsse Oyj and Konekesko, a service company specialising in the export, marketing and supplementary services of heavy and leisure
machines, agree on cooperation in
the Baltic countries.
16 NOVEMBER
Ponsse was ranked in second place
according to the results of the reputation survey of the Arvopaperi
magazine and the communications
office Viestintätoimisto Pohjoisranta. The survey included one hundred of the largest Finnish listed
companies.
Ponsse 2005
13
EVENTS IN 2005
EVENTS IN 2005
Events in Ponsse’s 35th anniversary year
12 JANUARY
The first anniversary celebration
model for 2005 was delivered to
Hannu and Markku Sahlström.
The yellow PONSSE Beaver of
the anniversary is Metsäkuljetus
Sahlström Oy’s 20th PONSSE
forest machine.
26 JANUARY
The Association of Finnish Work
awarded Ponsse Oyj with the right
to use of the Key Flag emblem for
its products.
JANUARY
Ponsse established an organisation
in Sweden’s large storm damage areas that was responsible for maintenance and support services for both
the local equipment and equipment
arriving from other countries.
8 FEBRUARY
Ponsse Oyj and the Vieremä local
authority prepare for a facilities arrangement where the Vieremä local
authority builds new production
facilities and rents them to Ponsse
during 2005 and 2006.
8 FEBRUARY
Automation engineer Jouni Matikainen was appointed Managing
Director of Ponsses’ subsidiary
Epec Oy as of 1 March 2005.
11 FEBRUARY
2004 financial statements.
18 FEBRUARY
The Vieremä local council decided
on the participation of the Vieremä
local authority in Ponsse Oyj’s facilities arrangements.
18 FEBRUARY
Ponsse Oyj started marketing communications cooperation with the
advertising agency Imageneering
Worldwide Partners.
1 MARCH
Ponsse’s 35th anniversary tour covering the whole country begins
in Ranua and ends in Iisalmi on
1 April.
21 FEBRUARY
Ponsse announced that the value
of the facilities arrangements with
the Vieremä local authority and
other investments is €10 million.
In addition to the expansions to
the assembly factory and the component factory, the investments
consist of equipment and machinery, a customer service centre and
the facilities for the Ponsse Academy. The new facilities will double the company’s production capacity.
15 MARCH
Ponsse Oyj’s annual shareholders’ meeting decided to distribute
a dividend of €0.20 per share and
pay a profit share to the staff of the
company. The following were elect-
12
Ponsse 2005
ed to continue as members of the
Board of Directors: Chairman, industrial counsellor, Einari Vidgrén;
Vice Chairman, Master of Pedagogy, Juha Vidgrén; and the other
members Bachelor of Economic
Sciences Nils Hagman; Managing
Director, wood industry technician, Ilkka Kylävainio; manager,
Licentiate of Economic Sciences,
Seppo Remes; and Master of Philosophy Mirja Ryynänen.
18 MARCH
Ponsse Oyj sells the information
system unit located in Kajaani to
Epec Oy, which it acquired in December 2004.
8 APRIL
The founder of Ponsse Oyj, industrial counsellor Einari Vidgrén established a foundation under his
own name the aim of which is to
increase the appreciation of work
done in the field of machine harvesting.
12 APRIL
The building work for the Ponsse
customer service centre begins. The
centre is intended for the needs of
the increased number of customers
and visitors and the Ponsse Academy. The winner in the competitive
bidding was Tapio Leinonen Oy, a
construction company located at
Vieremä.
25 APRIL
Ponsse establishes a subsidiary
in South America.M.Sc. (Econ.)
Claudio Costa was invited to act
as the Managing Director for the
company operating in Brazil.
26 APRIL
The operations of Ponsse USA Inc,
which was established in 1995,
were expanded to cover the entire
North American operations and
at the same time the name of the
company was changed to Ponsse
North America Inc.
20 MAY
Ponsse signed a contract with the
vocational institution PohjoisKarjalan ammattiopisto Valtimo
concerning cooperation in the
PONSSE forest machine mechanic
training programme to be started in
the autumn of 2005.
27 MAY
Paula Oksman was appointed as
HR Director at Ponsse Oyj and as
Principal of the Ponsse Academy as
of 1 August 2005.
27 MAY
Ponsse Oyj announced that it would
be involved in establishing a special
fund aimed at supporting research
work promoting the use of modern
technology and sustainable development in European countries.
18 APRIL
Ville Siekkinen was appointed Managing Director of OOO Ponsse,
Ponsse’s Russian subsidiary as of 1
May 2005.
6 JUNE
Ponsse Oyj and the javelin thrower
Tero Pitkämäki signed a sponsorship deal.
20 APRIL
Ponsse Oyj’s first interim report in
accordance with IFRS standards for
the period 1 January – 31 March
2005 is published.
1 JULY
Ponsse Oyj acquired a 92 per cent
holding in the stock of Lako Oy, a
Turku-based company designing,
marketing and manufacturing harvester heads.
20 JULY
the period 1 January – 30 June
2005 is published.
12 AUGUST
Ponsse Oyj and Maaseudun Kone,
best known as a manufacturer of
safety cabins for tractors, enter into
a partnership agreement aiming at
developing the competitiveness of
both companies.
25 AUGUST
The Society of Finnish Professional Foresters and Nordea Bank
awarded industrial counsellor
Einari Vidgrén with the Forest Act
of the Year award for establishing a
foundation promoting the appreciation of timber harvesting and for
involvement in the establishment
of a scientific special fund.
13 SEPTEMBER
Ponsse Oyj and the German NAF
Neunkirchener Achsenfabrik AG,
which manufactures axles and
transmission components, signed
a partnership agreement aimed at
long-term cooperation.
19 OCTOBER
the period 1 January – 30 September 2005 is published.
25 OCTOBER
Ponsse Oyj and the Russian OOO
Lespromservis enter into a resale
agreement. OOO Lespromservis
markets, sells and services PONSSE
forest machines in Russia in the areas of Komi, Kirov and Perm.
16 DECEMBER
Ponsse Oyj announced that it will
begin product development and
production of eucalyptus-debarking harvester heads in Brazil.
23 DECEMBER
Ponsse Oyj and Konekesko, a service company specialising in the export, marketing and supplementary services of heavy and leisure
machines, agree on cooperation in
the Baltic countries.
16 NOVEMBER
Ponsse was ranked in second place
according to the results of the reputation survey of the Arvopaperi
magazine and the communications
office Viestintätoimisto Pohjoisranta. The survey included one hundred of the largest Finnish listed
companies.
Ponsse 2005
13
CUT-TO-LENGTH METHOD CONTRIBUTES TO PONSSE’S SUCCESS
CUT-TO-LENGTH METHOD
CONTRIBUTES TO
PONSSE’S SUCCESS
CTL method’s share of the
harvested wood worldwide
will increase considerably
Mechanical harvesting methods
Ponsse and CTL method continue their favorable development
An ever-increasing percentage of the raw
wood used by the world’s forest industry is
harvested mechanically, even though in developing countries, as a result of low wage
levels and undeveloped wood acquisition
methods of the local forest industries, there
are still many loggers. Mechanized harvesting can be divided into two different methods: the tree-length method and the cut-tolength method (CTL) both require their
own machines and operations models.
Nearly half of the wood harvested worldwide is felled mechanically for industrial
use and the growth potential is enormous,
especially in the cut-to-length method
(picture). The cut-to-length method is also
known as the CTL method.
Source: Ponsse Oyj
In the tree length method the first machine
fells the trees, the second drags the trunks
to the storage area where the third machine
delimbs them. The fourth machine loads
the tall trunks onto the lumber trucks to
be delivered to the factory where a specially
designed cross-cutter cuts them into logs in
large batches. Any timber unacceptable due
to its measurements or quality is transported to other facilities as logs or chips.
In the cut-to-length method the harvester
cuts each trunk into logs of the required
length when felling the trees. The cutting
instructions are saved on the machine and
the cutting is optimized using an advanced
PC-based measuring device system that
helps to yield the best possible value from
each trunk. Once cut, the logs are stacked
14
Ponsse 2005
according to their use, making them easy to
load onto forwarders and deliver to roadside landings in stacks based on their use.
The different log assortments are usually
loaded onto trucks from the sorted stacks
using cranes found in the trucks. The
trucks then deliver each batch to the factories utilizing those specific log types in their
production.
lates into significantly greater staff and fuel
costs. The slightly larger purchase price of
cut-to-length machines is due to their more
advanced technology. On the other hand,
it is the advanced technology that enables
more productive and efficient utilization
of wood, as well as optimized machine use
and performance that saves fuel and makes
drivers’ work easier.
The cut-to-length method has developed in
the fiercely competitive Scandinavian forest
industry market into not just an efficient
and productive method, but also into an
environment friendly method with which
to acquire the best possible raw material for
the industry.
Whereas in the tree-length method the felling machine has to be positioned next to
each trunk, the reach of the cut-to-length
machines is usually ten meters. Therefore
the distance of the driving tracks burdening the soil can be approximately twenty
meters, and even thinning can be done mechanically. This method also reduces the
load on soil for near transport and storage: logs are transported to the cargo space
and the required storage area is very small,
only the area needed for the stacks and the
driving track next to them. Using the treelength method, the long and heavy piles of
wood are dragged along the ground to a big
storage area where they are first piled up before delimbing and then into storage piles.
This transportation method also causes significantly more damage to the wood.
Cost, quality and
environmental factors of the
different methods
The most significant differences in the harvesting methods are in their cost structure,
environmental friendliness, productivity and quality of work. Whereas the cutto-length method requires no more than
two machines at any single point, the treelength method requires altogether five machines to do the same work, which trans-
Benefits of the
cut-to-length method
• Efficient and accurate utilization of
wood through computer-controlledmeasuring and cutting optimization
• Improved control on acquiring wood
• Smaller fuel and staff expenses due to
less machines
• Possibility of mechanized thinning
• Comfort and safety of working with
modern machines
• Less damage to wood, nearby trees
and terrain
• Smaller storage areas
The key benefits of the cut-to-length method are the higher yield value, better logistics
efficiency and less capital tied-up in storage. These factors make it a productive and
cost-efficient way to acquire exactly the right
length and quality wood for each production
facility, and delivered at just the right time.
Ponsse’s history has gone hand-in-hand
with the mechanisation of the cut-to-length
method from the very beginning. The development has been really fast and the demands of the industry have increased every
day. Therefore, to succeed in the business
the company has had to focus all its efforts
on designing and manufacturing efficient
high-quality machines.
Ponsse 2005
15
CUT-TO-LENGTH METHOD
CONTRIBUTES TO
PONSSE’S SUCCESS
CTL method’s share of the
harvested wood worldwide
will increase considerably
Mechanical harvesting methods
Ponsse and CTL method continue their favorable development
An ever-increasing percentage of the raw
wood used by the world’s forest industry is
harvested mechanically, even though in developing countries, as a result of low wage
levels and undeveloped wood acquisition
methods of the local forest industries, there
are still many loggers. Mechanized harvesting can be divided into two different methods: the tree-length method and the cut-tolength method (CTL) both require their
own machines and operations models.
Nearly half of the wood harvested worldwide is felled mechanically for industrial
use and the growth potential is enormous,
especially in the cut-to-length method
(picture). The cut-to-length method is also
known as the CTL method.
Source: Ponsse Oyj
In the tree length method the first machine
fells the trees, the second drags the trunks
to the storage area where the third machine
delimbs them. The fourth machine loads
the tall trunks onto the lumber trucks to
be delivered to the factory where a specially
designed cross-cutter cuts them into logs in
large batches. Any timber unacceptable due
to its measurements or quality is transported to other facilities as logs or chips.
In the cut-to-length method the harvester
cuts each trunk into logs of the required
length when felling the trees. The cutting
instructions are saved on the machine and
the cutting is optimized using an advanced
PC-based measuring device system that
helps to yield the best possible value from
each trunk. Once cut, the logs are stacked
14
Ponsse 2005
according to their use, making them easy to
load onto forwarders and deliver to roadside landings in stacks based on their use.
The different log assortments are usually
loaded onto trucks from the sorted stacks
using cranes found in the trucks. The
trucks then deliver each batch to the factories utilizing those specific log types in their
production.
lates into significantly greater staff and fuel
costs. The slightly larger purchase price of
cut-to-length machines is due to their more
advanced technology. On the other hand,
it is the advanced technology that enables
more productive and efficient utilization
of wood, as well as optimized machine use
and performance that saves fuel and makes
drivers’ work easier.
The cut-to-length method has developed in
the fiercely competitive Scandinavian forest
industry market into not just an efficient
and productive method, but also into an
environment friendly method with which
to acquire the best possible raw material for
the industry.
Whereas in the tree-length method the felling machine has to be positioned next to
each trunk, the reach of the cut-to-length
machines is usually ten meters. Therefore
the distance of the driving tracks burdening the soil can be approximately twenty
meters, and even thinning can be done mechanically. This method also reduces the
load on soil for near transport and storage: logs are transported to the cargo space
and the required storage area is very small,
only the area needed for the stacks and the
driving track next to them. Using the treelength method, the long and heavy piles of
wood are dragged along the ground to a big
storage area where they are first piled up before delimbing and then into storage piles.
This transportation method also causes significantly more damage to the wood.
Cost, quality and
environmental factors of the
different methods
The most significant differences in the harvesting methods are in their cost structure,
environmental friendliness, productivity and quality of work. Whereas the cutto-length method requires no more than
two machines at any single point, the treelength method requires altogether five machines to do the same work, which trans-
Benefits of the
cut-to-length method
• Efficient and accurate utilization of
wood through computer-controlledmeasuring and cutting optimization
• Improved control on acquiring wood
• Smaller fuel and staff expenses due to
less machines
• Possibility of mechanized thinning
• Comfort and safety of working with
modern machines
• Less damage to wood, nearby trees
and terrain
• Smaller storage areas
The key benefits of the cut-to-length method are the higher yield value, better logistics
efficiency and less capital tied-up in storage. These factors make it a productive and
cost-efficient way to acquire exactly the right
length and quality wood for each production
facility, and delivered at just the right time.
Ponsse’s history has gone hand-in-hand
with the mechanisation of the cut-to-length
method from the very beginning. The development has been really fast and the demands of the industry have increased every
day. Therefore, to succeed in the business
the company has had to focus all its efforts
on designing and manufacturing efficient
high-quality machines.
Ponsse 2005
15
Wood harvesting and processing
using the CTL method
Ponsse has played an essential role in developing wood harvesting technology.
Close co-operation with forest companies and contractors has produced the
most modern IT applications for forest
machines and wood procurement logistics. Its solutions cover all areas of wood
procurement ranging from planning the
stand marked for cutting to controlling
the transportation network. The system
forms a functional package, which makes
the correct information available to all
parties at all times. An efficient and economical wood procurement chain serves
the forest owner, the contractor, the forest company and the natural environment well.
Information technology used alongside
traditional mechanics, hydraulics and
electronics is an essential part of modern
wood harvesting. New solutions are used
in modern forest machines for controlling the machine, measuring wood and
optimising the logistics of wood procurement. The forest machines, the harvesters
used for cutting and the forwarders used
for transporting the wood are connected
to a larger network through information
systems: control systems for wood procurement and transport.
Information technology plays an essential
role in controlling wood procurement
and its logistics when acquiring wood
material for the processing units. The
correct type of material must be transported to the correct location at the right
time while costs must be minimised. Efficient wood procurement logistics comprises efficiency in utilising the material,
short storage times, maximising the use
of timber trucks, cost-efficient wood harvesting, minimal damage to the natural
environment and seamless co-operation
between all parties involved.
PONSSE forest machines as
part of wood procurement
control systems
Wood procurement planning starts when
the forest company purchases a stand
marked for cutting from the forest owner. A map of the stand is made utilising
digital map information and marked
with all the details necessary for efficient
and environmentally friendly wood harvesting: stand boundaries, cutting methods, storage areas, electrical lines, groups
of trees to be saved, nesting trees, key
biotopes and natural areas protected by
law. Written instructions on the cutting
method, wood products, availability for
cutting and other issues are attached to
the map material.
the harvester to the forest company, and
new felling and cutting instructions are
received at the same time.
Digital map systems and GPS satellite
positioning provide accurate position data on the machine in the stand and help
the driver to be aware of electrical lines
and protected areas. PONSSE forwarders
also use these positioning applications.
The driver can use the software and GPS
to locate the timber stacks cut by the harvester and enter the timber transported
to the storage area into the system.
The forest machine transfers information
on the cut and any transported timber to
the forest agency, where transport control can be started. The forest agency optimises the transport orders to different
timber truck contractors and production
facilities so that the facilities receive the
correct kind of timber on time and the
material flow remains constant. The use
of route optimisation and two-way transports minimises transport distances.
The forest agency or the forest company creates an apting file for each stand.
This file includes the tree species and
timber products for cutting and the desired length and diameter distributions
for all timber products. An apting file
can be simulated before cutting to ensure that the possibilities of the stand
and the desired cutting result are in balance. The forest agency transfers the map
of the stand, written cutting instructions
and the apting files to the harvester using email. In this way, the harvester driver quickly and reliably receives all the required information on the stand before
cutting. The harvester automatically applies the forest agency’s desired diameter
and length distributions. The driver is responsible for e.g. quality control.
The transport orders are transferred to
the timber trucks automatically, the driver viewing the transport orders and the
amounts of timber to be transported
from the vehicle computer’s map display.
Also, the timber truck driver can perform
route optimisation with the vehicle computer. Information on e.g. timber transported to other production facilities is
transferred to the forest company from
the timber truck. This keeps the forest
company stock reports up-to-date.
The best possible cutting result is achieved
with the apting system in PONSSE harvesters. Thus, the processing plant receives the best possible material matching the amount and quality requirements
set by the desired end products. Added
value can be increased in ways not possible when using traditional, old-fashioned
methods. This benefits the forest owner,
the cutting contractor, the production facility and also the consumer. Daily production information is transferred from
16
Ponsse 2005
Ponsse 2005
17
method, wood products, availability for
cutting and other issues are attached to
the map material.
the harvester to the forest company, and
new felling and cutting instructions are
received at the same time.
Digital map systems and GPS satellite
positioning provide accurate position data on the machine in the stand and help
the driver to be aware of electrical lines
and protected areas. PONSSE forwarders
also use these positioning applications.
The driver can use the software and GPS
to locate the timber stacks cut by the harvester and enter the timber transported
to the storage area into the system.
The planning of timber haulage begins
already at the wood procurement stage.
At this point, it can be estimated when
the trees from the stands to be felled will
be at the roadside ready for forwarding.
The roadside situation is updated continuously as the machine operator sends
information on the amounts of cut and
forwarded timber to the forest office.
The head of transport then optimises the
transport orders to different timber haulage contractors and production facilities
so that the facilities receive the correct
kind of timber on time and the material
flow remains constant. The use of route
optimisation and two-way transports
minimises transport distances.
The forest agency or the forest company creates an apting file for each stand.
This file includes the tree species and
timber products for cutting and the desired length and diameter distributions
for all timber products. An apting file
can be simulated before cutting to ensure that the possibilities of the stand
and the desired cutting result are in balance. The forest agency transfers the map
of the stand, written cutting instructions
and the apting files to the harvester using email. In this way, the harvester driver quickly and reliably receives all the required information on the stand before
cutting. The harvester automatically applies the forest agency’s desired diameter
and length distributions. The driver is responsible for e.g. quality control.
The transport orders are transferred to
the timber trucks automatically, the driver viewing the transport orders and the
amounts of timber to be transported
from the vehicle computer’s map display.
Also, the timber truck driver can perform
route optimisation with the vehicle computer. Information on e.g. timber transported to other production facilities is
transferred to the forest company from
the timber truck. This keeps the forest
company stock reports up-to-date.
The best possible cutting result is achieved
with the apting system in PONSSE harvesters. Thus, the processing plant receives the best possible material matching the amount and quality requirements
set by the desired end products. Added
value can be increased in ways not possible when using traditional, old-fashioned
methods. This benefits the forest owner,
the cutting contractor, the production facility and also the consumer. Daily production information is transferred from
Ponsse 2005
17
Keitele Group utilises the world’s most
modern technology
quality are important issues for most export markets.
Customer’s needs form the
operational basis
In addition to Keitele Forest and the sawmill, Keitele Timber Oy, Keitele Group
also includes a processing facility, Keitele
Forest Wood Production and Keitele
Engineered Wood Oy, which produces
glue laminated products. These companies produce wooden pre-processed
parts and glue laminated products for
the building and joinery industry. These
facilities uses Keitele Timber Oy’s high
quality spruce and pine saw products.
The Group’s energy company, Keitele
Energy Oy, uses sawing by-products to
generate the needed energy.
Keitele Group has committed itself to
a customer-based approach. It produces customised specified qualities, fixed
lengths, extra large and long products
and also green split and heart free sawn
products. Customer-orientation in a
business with a lot of competition is the
Keitele Group’s strength, which has provided its products and customers with
substantial, profitability-enhancing added value. Sawn timber quality grades
have increased and 50 % of the sawn
timber produced is further processed in
the concern’s own facilities. Today, 1/3 of
the timber used is pine, but this proportion is constantly increasing.
By December 2005, the concern had
produced a total of 3 million cubic meters of sawn products, which equates to
approximately 10 million cubic meters
of harvested timber. Keitele Timber has
achieved a profitable result for every year
in operation. Today, it is the sixth largest
forest company in Finland.
CEO and Chairman of the Board
Ilkka Kylävainio
Keitele Group’s parent company, Keitele
Forest Oy, is one of Ponsse’s key partners.
It is also a family-owned company, owned
by the CEO and Chairman of the Board
Ilkka Kylävainio and his two sons Matti
and Mikko Kylävainio. Keitele Forest has
performed mechanical timber processing
in Keitele since 1981. Ilkka Kylävainio
founded the sawmill in a location with
no previous history of sawmill activity. Back then, the goal was to produce
10 000 m3 of timber annually – today
the same amount is produced in just
over one week. 230 employees produce
320 000 m3 of high quality spruce and
pine saw products yielding a turnover
of 69 million euros in 2005. Each year,
18
Ponsse 2005
Keitele Forest harvests 750,000 m3 of
wood from a harvesting radius of 150
km.
Keitele Group supplies timber and sawmill products to 30 countries, exports
bringing in over 70 % of its annual turnover. The largest export areas are the EU
countries and Japan, which has become
the most important export country during the last ten years because of Keitele
Group’s customer-based operations. The
Japanese market requires a lot of special
length timber and sawmills using timber
harvested with the whole trunk method have difficulties meeting this need.
Moreover, the origin of material and high
In the production process, the sawn timber is sorted and carefully dried as shipping dry or special dry according to the
customer’s needs. The process continues
with computer vision sorting and packaging, where the end product is finalised
by cutting it to standard lengths or special lengths. Keitele Timber Oy’s modern
sawing technology is designed to meet
the customers’ needs and requirements
and to provide a fast and reliable service. During the last five years the Keitele
concern has invested 33 million euros increasing the level of refining, IT equipment, machine lines and office premises.
Customer-based thinking
starts from timber harvesting
The Keitele Group’s production logistics
starts with planning the timber harvesting. Advanced information and cutting
technology enables cutting the timber
according to the customers’ needs at the
cutting site. Real-time computer based
control continues in the harvesting and
processing stages and throughout the delivery and documentation of the products.
Customers receive their orders at the right
time and in the right place thanks to this
sophisticated system.
Keitele Forest’s Forest Director Aarne
Lehtosaari is responsible for wood procurement and uses Ponsse’s office applications in his work.
A customer-based operation sets special
requirements for operative planning. On
a daily basis, the timber factory monitors
how the orders and the amount of timber
harvested match each other. The apting
programmes in the harvesters are changed
when needed in accordance with the orders. These programmes help in planning
both production and timber harvesting
so that the production stage knows exactly what types of timber can be expected to arrive in the facility. Forest director
Aarne Lehtosaari says that this method is
very demanding but also extremely productive. Keitele Forest does not receive
large batches of timber all at once, but
production is controlled according to the
customer’s order. This minimises material
loss and storage costs and improves logis-
Ponsse 2005
19
Keitele Group utilises the world’s most
modern technology
quality are important issues for most export markets.
Customer’s needs form the
operational basis
In addition to Keitele Forest and the sawmill, Keitele Timber Oy, Keitele Group
also includes a processing facility, Keitele
Forest Wood Production and Keitele
Engineered Wood Oy, which produces
glue laminated products. These companies produce wooden pre-processed
parts and glue laminated products for
the building and joinery industry. These
facilities uses Keitele Timber Oy’s high
quality spruce and pine saw products.
The Group’s energy company, Keitele
Energy Oy, uses sawing by-products to
generate the needed energy.
Keitele Group has committed itself to
a customer-based approach. It produces customised specified qualities, fixed
lengths, extra large and long products
and also green split and heart free sawn
products. Customer-orientation in a
business with a lot of competition is the
Keitele Group’s strength, which has provided its products and customers with
substantial, profitability-enhancing added value. Sawn timber quality grades
have increased and 50 % of the sawn
timber produced is further processed in
the concern’s own facilities. Today, 1/3 of
the timber used is pine, but this proportion is constantly increasing.
By December 2005, the concern had
produced a total of 3 million cubic meters of sawn products, which equates to
approximately 10 million cubic meters
of harvested timber. Keitele Timber has
achieved a profitable result for every year
in operation. Today, it is the sixth largest
forest company in Finland.
CEO and Chairman of the Board
Ilkka Kylävainio
Keitele Group’s parent company, Keitele
Forest Oy, is one of Ponsse’s key partners.
It is also a family-owned company, owned
by the CEO and Chairman of the Board
Ilkka Kylävainio and his two sons Matti
and Mikko Kylävainio. Keitele Forest has
performed mechanical timber processing
in Keitele since 1981. Ilkka Kylävainio
founded the sawmill in a location with
no previous history of sawmill activity. Back then, the goal was to produce
10 000 m3 of timber annually – today
the same amount is produced in just
over one week. 230 employees produce
320 000 m3 of high quality spruce and
pine saw products yielding a turnover
of 69 million euros in 2005. Each year,
18
Ponsse 2005
Keitele Forest harvests 750,000 m3 of
wood from a harvesting radius of 150
km.
Keitele Group supplies timber and sawmill products to 30 countries, exports
bringing in over 70 % of its annual turnover. The largest export areas are the EU
countries and Japan, which has become
the most important export country during the last ten years because of Keitele
Group’s customer-based operations. The
Japanese market requires a lot of special
length timber and sawmills using timber
harvested with the whole trunk method have difficulties meeting this need.
Moreover, the origin of material and high
In the production process, the sawn timber is sorted and carefully dried as shipping dry or special dry according to the
customer’s needs. The process continues
with computer vision sorting and packaging, where the end product is finalised
by cutting it to standard lengths or special lengths. Keitele Timber Oy’s modern
sawing technology is designed to meet
the customers’ needs and requirements
and to provide a fast and reliable service. During the last five years the Keitele
concern has invested 33 million euros increasing the level of refining, IT equipment, machine lines and office premises.
Customer-based thinking
starts from timber harvesting
The Keitele Group’s production logistics
starts with planning the timber harvesting. Advanced information and cutting
technology enables cutting the timber
according to the customers’ needs at the
cutting site. Real-time computer based
control continues in the harvesting and
processing stages and throughout the delivery and documentation of the products.
Customers receive their orders at the right
time and in the right place thanks to this
sophisticated system.
Keitele Forest’s Forest Director Aarne
Lehtosaari is responsible for wood procurement and uses Ponsse’s office applications in his work.
A customer-based operation sets special
requirements for operative planning. On
a daily basis, the timber factory monitors
how the orders and the amount of timber
harvested match each other. The apting
programmes in the harvesters are changed
when needed in accordance with the orders. These programmes help in planning
both production and timber harvesting
so that the production stage knows exactly what types of timber can be expected to arrive in the facility. Forest director
Aarne Lehtosaari says that this method is
very demanding but also extremely productive. Keitele Forest does not receive
large batches of timber all at once, but
production is controlled according to the
customer’s order. This minimises material
loss and storage costs and improves logis-
Ponsse 2005
19
tical efficiency. ”When we know how to
cut timber, we do not need expensive and
time-consuming work stages at the factory. Total control of the operation from
the forest to the order improves our competitiveness”, says Lehtosaari.
50-70 timber trucks visit
Keitele Timber each day.
The log sorter sorts the logs de-
The sawmill’s production control system changes the customer’s orders into
work orders and logs. Information on the
harvested timber arrives daily from the
harvester to the sawmill by email. The
Group’s CEO, Ilkka Kylävainio, says
that Ponsse’s information system products have provided good tools for the
optimum utilisation of operation and
production. ”It is essential for the final
product that the timber is harvested correctly in the forest. PONSSE forest machines produce reliable timber harvesting. We purchase timber mainly from
the private sector and every forest owner expects high quality, environmentally
livered to the sawmill into compartments in accordance with
received orders. This amount of
timber meets requirements for
approximately three weeks.
friendly and profitable timber harvesting”, explains Kylävainio. At the moment, 30 PONSSE forest machines work
for Keitele Forest.
Keitele Forest uses the full PONSSE
OptiPlan timber harvesting control system.
”Without these systems we simply could
not achieve such efficient, customer-oriented production”, says Kylävainio. When
forecast calculation is fast, the sellers have
real-time information on the products.
”We can supply the customer with the correct quality product in the right place at
the right time”, Kylävainio says, summing
up the Keitele Group’s success factors.
Ponsse Oyj’s product manager Hanna Vilkman would like to
thank Keitele Forest’s active participation in developing the
systems. Mika Rantonen (on the left), Keitele Forest’s logging
operations manager, has been one of Ponsse’s key partners.
20
Ponsse 2005
Co-operation between forest
machine manufacturer and
sawmill produces good
results
For forest manager Lehtosaari, the Finnish forest technology industry is develop-
ing rapidly. Before harvester measurement systems, the timber was collected
and sorted in the sawmill’s yard and
stock was monitored there. This was
problematic, especially during late winter, since the amount of timber in stock
was often unknown. Today, this information is in the sawmills’ information
systems, enabling quick response to customers’ needs.
Co-operation between Keitele Group
and Ponsse began in 1986, when the
founder of Ponsse, Einari Vidgrén, was
harvesting timber for Keitele. Keitele
tested Ponsse’s first apting equipment
in the beginning of the 1990s and apting has been used by the company since
1993. Since the spring of 2000, Keitele
Forest has used Ponsse’s harvesting system, developed for private sawmills by
Ponsse and Keitele. Good co-operation has led to other projects. At the
moment, we are testing an application
originally designed for managing transports, which has grown into a system for
managing roadside storage locations and
other stock accounting.
The design and manufacture of software
is exceptional among forest machine
manufacturers. ”We design software to
obtain full knowledge of our customers’ business. We offer our customers
and their clients solution packages, with
which they can succeed and fully leverage
the efficiency and productivity of cutto-length forest machines”, says Ponsse’s
product manager, Hanna Vilkman. The
timber harvesting information system,
OptiPlan, is intended for private sawmills and other parties working in timber harvesting with no harvesting planning information system of their own.
This solution can be acquired according to the customer’s needs either as a
full software package or a single application.
Excellent products and
services the key to success
in the future
CEO Kylävainio estimates that the difficult period for sawmills, due to overproduction of sawn products, will continue
in 2006. ”Only the best will succeed and
our key to success is good service and
high quality special products. Finland has
plenty of raw materials – the problem is
getting it to the markets. The quality of
raw materials is high here, in the North,
although pine is subject to natural variegations,” explains Ilkka Kylävainio.
er’s order saves material and modern production technology enables us to manufacture customer-specific products in an
environmentally friendly way. ”Wood is
a valuable material. When the price of
pulpwood is approximately 25 % of the
price of timber wood, a measurement
loss of 1 % is impossible to tolerate”,
Kylävainio clarifies.
One of Keitele’s guidelines is sustainable development, and Keitele
is committed to developing its activities to
conserve material and
energy. Timber harvesting and processing
based on the custom-
Ponsse 2005
21
tical efficiency. ”When we know how to
cut timber, we do not need expensive and
time-consuming work stages at the factory. Total control of the operation from
the forest to the order improves our competitiveness”, says Lehtosaari.
50-70 timber trucks visit
Keitele Timber each day.
The log sorter sorts the logs de-
The sawmill’s production control system changes the customer’s orders into
work orders and logs. Information on the
harvested timber arrives daily from the
harvester to the sawmill by email. The
Group’s CEO, Ilkka Kylävainio, says
that Ponsse’s information system products have provided good tools for the
optimum utilisation of operation and
production. ”It is essential for the final
product that the timber is harvested correctly in the forest. PONSSE forest machines produce reliable timber harvesting. We purchase timber mainly from
the private sector and every forest owner expects high quality, environmentally
livered to the sawmill into compartments in accordance with
received orders. This amount of
timber meets requirements for
approximately three weeks.
friendly and profitable timber harvesting”, explains Kylävainio. At the moment, 30 PONSSE forest machines work
for Keitele Forest.
Keitele Forest uses the full PONSSE
OptiPlan timber harvesting control system.
”Without these systems we simply could
not achieve such efficient, customer-oriented production”, says Kylävainio. When
forecast calculation is fast, the sellers have
real-time information on the products.
”We can supply the customer with the correct quality product in the right place at
the right time”, Kylävainio says, summing
up the Keitele Group’s success factors.
Ponsse Oyj’s product manager Hanna Vilkman would like to
thank Keitele Forest’s active participation in developing the
systems. Mika Rantonen (on the left), Keitele Forest’s logging
operations manager, has been one of Ponsse’s key partners.
20
Ponsse 2005
Co-operation between forest
machine manufacturer and
sawmill produces good
results
For forest manager Lehtosaari, the Finnish forest technology industry is develop-
ing rapidly. Before harvester measurement systems, the timber was collected
and sorted in the sawmill’s yard and
stock was monitored there. This was
problematic, especially during late winter, since the amount of timber in stock
was often unknown. Today, this information is in the sawmills’ information
systems, enabling quick response to customers’ needs.
Co-operation between Keitele Group
and Ponsse began in 1986, when the
founder of Ponsse, Einari Vidgrén, was
harvesting timber for Keitele. Keitele
tested Ponsse’s first apting equipment
in the beginning of the 1990s and apting has been used by the company since
1993. Since the spring of 2000, Keitele
Forest has used Ponsse’s harvesting system, developed for private sawmills by
Ponsse and Keitele. Good co-operation has led to other projects. At the
moment, we are testing an application
originally designed for managing transports, which has grown into a system for
managing roadside storage locations and
other stock accounting.
The design and manufacture of software
is exceptional among forest machine
manufacturers. ”We design software to
obtain full knowledge of our customers’ business. We offer our customers
and their clients solution packages, with
which they can succeed and fully leverage
the efficiency and productivity of cutto-length forest machines”, says Ponsse’s
product manager, Hanna Vilkman. The
timber harvesting information system,
OptiPlan, is intended for private sawmills and other parties working in timber harvesting with no harvesting planning information system of their own.
This solution can be acquired according to the customer’s needs either as a
full software package or a single application.
Excellent products and
services the key to success
in the future
CEO Kylävainio estimates that the difficult period for sawmills, due to overproduction of sawn products, will continue
in 2006. ”Only the best will succeed and
our key to success is good service and
high quality special products. Finland has
plenty of raw materials – the problem is
getting it to the markets. The quality of
raw materials is high here, in the North,
although pine is subject to natural variegations,” explains Ilkka Kylävainio.
er’s order saves material and modern production technology enables us to manufacture customer-specific products in an
environmentally friendly way. ”Wood is
a valuable material. When the price of
pulpwood is approximately 25 % of the
price of timber wood, a measurement
loss of 1 % is impossible to tolerate”,
Kylävainio clarifies.
One of Keitele’s guidelines is sustainable development, and Keitele
is committed to developing its activities to
conserve material and
energy. Timber harvesting and processing
based on the custom-
Ponsse 2005
21
PRODUCTS
Products
Products
22
Ponsse 2005
HARVESTERS
Ergo
Beaver
FORWARDERS
BuffaloKing
Buffalo
USED MACHINES
SERVICE
Certified Pre-owned
PRODUCTS
DUAL HARWARDERS
INFORMATION SYSTEMS
TEACHING TECHNOLOGY
BuffaloDual and WisentDual
Opti
3D simulator
Elk
Wisent
Gazelle
Debarking
Bioenergy
HARVESTER HEADS
Softwood and hardwood
Ponsse 2005
23
OUR GROWTH POTENTIAL
- Million m3 -
Ponsse has focused its business operations on geographical areas where a major part of the world’s forest
resources are located.
GROWTH 2005–2030, %/YR
Jaakko Pöyry Consulting
Elsewhere ............................. 0,7
Latin America ........................ 0,8
Other Asia ............................ 0,6
China .................................... 1,9
Japan ................................... -1,0
Russia .................................. 2,2
Eastern Europe...................... 2,4
Western Europe .................... 0,6
North America....................... 0,4
- million tons -
Global softwood lumber consumption will
grow until 2030 by 58 million m3 (0.7 %/yr)
from the 2005 level of 296 million m3. This
corresponds to annual consumption growth
of about 2.3 million m3. Correspondingly, the
fastest softwood lumber consumption growth
is in Europe, Russia and China.
GROWTH 2005–2030, %/YR
Africa .............................. 3,2
Oceania ........................... 1,8
Latin America ................... 3,0
Other Asia ....................... 2,9
China ............................... 3,7
Japan .............................. 0,2
Eastern Europe (incl. Russia) .. 2,9
Western Europe ............... 0,9
North America.................. 0,5
Forest
Other land
Other wooded land
Water
Global softwood lumber
consumption
Global paper and board
consumption
Global paper and board consumption will
grow until 2030 by 212 million tons (1.9 %/
yr) from the 2005 level of 363 million tons.
This corresponds to annual growth of about
8.5 million tons. About 60 % of the paper
and board consumption growth is in China
and elsewhere in Asia. Consumption growth
is slower in Japan, North America and Western Europe.
Source: FAO
CTL machine BAUS and vision trends
Forest machine sales, pcs
Trunk method
Assortment method
24
Ponsse 2005
Metla
Technologically
and economically achievable
The development of the
harvesting methods
The use of the cut-to-length (CTL) method
and the tree length method has changed due
to various factors, such as the development
of available technology. The BAUS trend
of the cut-to-length method is turning upwards.
BAUS trends
Ponsse 2005
25
- Million m3 -
Ponsse has focused its business operations on geographical areas where a major part of the world’s forest
resources are located.
GROWTH 2005–2030, %/YR
Elsewhere ............................. 0,7
Latin America ........................ 0,8
Other Asia ............................ 0,6
China .................................... 1,9
Japan ................................... -1,0
Russia .................................. 2,2
Eastern Europe...................... 2,4
Western Europe .................... 0,6
North America....................... 0,4
- million tons -
Global softwood lumber consumption will
grow until 2030 by 58 million m3 (0.7 %/yr)
from the 2005 level of 296 million m3. This
corresponds to annual consumption growth
of about 2.3 million m3. Correspondingly, the
fastest softwood lumber consumption growth
is in Europe, Russia and China.
GROWTH 2005–2030, %/YR
Africa .............................. 3,2
Oceania ........................... 1,8
Latin America ................... 3,0
Other Asia ....................... 2,9
China ............................... 3,7
Japan .............................. 0,2
Eastern Europe (incl. Russia) .. 2,9
Western Europe ............... 0,9
North America.................. 0,5
Forest
Other land
Other wooded land
Water
Global softwood lumber
consumption
Global paper and board
consumption
Global paper and board consumption will
grow until 2030 by 212 million tons (1.9 %/
yr) from the 2005 level of 363 million tons.
This corresponds to annual growth of about
8.5 million tons. About 60 % of the paper
and board consumption growth is in China
and elsewhere in Asia. Consumption growth
is slower in Japan, North America and Western Europe.
Source: FAO
CTL machine BAUS and vision trends
Forest machine sales, pcs
Trunk method
Assortment method
24
Ponsse 2005
Metla
Technologically
and economically achievable
The development of the
harvesting methods
The use of the cut-to-length (CTL) method
and the tree length method has changed due
to various factors, such as the development
of available technology. The BAUS trend
of the cut-to-length method is turning upwards.
BAUS trends
Ponsse 2005
25
Ponsse in Russia
The business environment in Russia is
fairly normal nowadays; there are no
specific problems or uncertainty factors
in the market. The country’s economic
growth is on a solid basis, and its economy
is no longer based on oil and gas alone.
Of course, there is still a lot to be done
in lessening the bureaucracy, but the situation has improved significantly over the
past few years.
The financial sector has also taken some
big steps on its way to a Western system.
Although the services need to be developed, the rapid progress of the reforms indicates that a few years from now neither
the availability of funding nor the price of
money should present considerable obstacles for private investments. Therefore,
President Siekkinen is confident that Ponsse’s traditional client group, the private
contractors, will increase their share of the
Russian forest machine market.
During the last few years
Ponsse has begun to
systematically focus its efforts
on developing the Russian
market. As a result, the sales
volume has increased rapidly
and the market area is already
among the most important.
“Nevertheless, we believe that
we have just taken the first
steps in utilizing the market
potential”, says OOO Ponsse’s
President Ville Siekkinen.
26
Ponsse 2005
Promising growth outlook
Ponsse is naturally very interested in the rapidly developing forest sector, since Russia is
one of its most important market areas in
the long term. One-fourth of the world’s forest resources are in Russia, and the State has
adopted an active role in their efficient utilization. It is a known fact that oil resources
will diminish within a couple of decades and
the green gold is seen as a viable alternative
to its current black companion.
The enormous forest resources in the area,
the growing domestic demand and its location near the large and rapidly developing Asian markets provide excellent facilities for the Russian forest sector’s growth as
well as for companies like Ponsse who produce high-level forest technology. The forest sector is experiencing rapid growth and
the technological development is creating a
demand for modern forest harvesters. Nat-
urally, all major manufacturers have recognised the potential that lies within the Russian market, but because of the sector’s rapid
growth the outlook is only promising for the
best players who can operate in all corners
of the area.
In the final years of the Soviet Union in the
1980s the harvesting amounts were up to
500 million m3 per year, but in the 1990s
they crashed below one hundred. Now the
figures are once again soaring and the actual
cut cubic metres are already around 200 million. A great deal of raw wood is now exported, mainly to China and Scandinavia,
but from now on Russia’s own refining, supported by the State, will use a bigger share
of the raw wood. In the Soviet era most of
the felling was done by loggers. The loggers
exited the market for the most part during
the quiet years of the 1990s, and there are
no signs of a new logger generation. Hard
manual labour is not the first choice for the
OOO Ponsse’s
President
Ville Siekkinen
and Tarpan’s CEO
Pavel Ohotnikov
younger generation when choosing a profession, and it is also very common that
the forest areas have too little manpower to
take care of the necessary felling, much less
growth. The only viable alternative is rapid
mechanization.
The technology gets tested in
demanding conditions
Ponsse has been operating in Russia for a few
years. Jaakko Laurila and Oleg Maslov were
the first two ”pioneers”, but since last spring
Ponsse has operated in the market more ”officially” through its subsidiary, OOO Ponsse.
Ponsse also has some influential members in
the parent company’s Board of Directors,
such as the very experienced Seppo Remes,
who has excellent connections in Moscow as
well.
Ponsse’s market area is very large with customers from Karelia to Far East. Besides
OOO Ponsse, there are two other retailers
in Russia, Zeppelin Russland in Northwest
Russia and Lespromservis in the areas west
of Ural. Ponsse is constantly continuing its
efforts to extend its retailer network. Entering the Russian network has been fairly easy
for Ponsse. The growing markets are always
easier than those with fierce competition
and a long history. Ponsse is also known and
recognized as the leading brand in the business. The Russians realize the importance of
proper technology in achieving great results.
“If we handle the Russian market properly,
before long we will sell more machines here
than in Finland”, estimates OOO Ponsse’s
Prsident Ville Siekkinen.
Ponsse machines. “Our experiences with
PONSSE harvesters and forwarders have
been very positive. The local conditions set
very high demands on the technology used
in the machines, but Ponsse’s machines have
proven themselves a worthy investment”, says
Timberland’s President Elena Lysokova.
Tarpan, one of PONSSE’s customers in
the Karelian Isthmus, has also voiced its
appreciation of the good results achieved
with PONSSE machines. ”We have used
PONSSE Ergo to harvest more than 9,000
cubic meters per month”, says Tarpan’s
Chairman of the Board Pavel Ohotnikov
with noticeable pride in his voice. Tarpan
also wishes to thank Ponsse for the close cooperation and direct contacts with Ponsse’s
staff. ”Problems are bound to arise every
now and then when harvesting timber in
demanding conditions, but help has always
been available. Successful cooperation and
mutual trust make it a lot easier for us to
consider further investments”, says Pavel
Ohotnikov.
Timberland’s President
Elena Lysokova
One of Ponsse’s first customers in Russia, Timberland, operates out of St. Petersburg and has been using Ponsse machines
for harvesting timber since 1995. Last
year the company purchased three new
PONSSE Ergo and PONSSE Buffalo machine chains. Timberland has been
very satisfied with the performance of the
Ponsse 2005
27
Ponsse in Russia
The business environment in Russia is
fairly normal nowadays; there are no
specific problems or uncertainty factors
in the market. The country’s economic
growth is on a solid basis, and its economy
is no longer based on oil and gas alone.
Of course, there is still a lot to be done
in lessening the bureaucracy, but the situation has improved significantly over the
past few years.
The financial sector has also taken some
big steps on its way to a Western system.
Although the services need to be developed, the rapid progress of the reforms indicates that a few years from now neither
the availability of funding nor the price of
money should present considerable obstacles for private investments. Therefore,
President Siekkinen is confident that Ponsse’s traditional client group, the private
contractors, will increase their share of the
Russian forest machine market.
During the last few years
Ponsse has begun to
systematically focus its efforts
on developing the Russian
market. As a result, the sales
volume has increased rapidly
and the market area is already
among the most important.
“Nevertheless, we believe that
we have just taken the first
steps in utilizing the market
potential”, says OOO Ponsse’s
President Ville Siekkinen.
26
Ponsse 2005
Promising growth outlook
Ponsse is naturally very interested in the rapidly developing forest sector, since Russia is
one of its most important market areas in
the long term. One-fourth of the world’s forest resources are in Russia, and the State has
adopted an active role in their efficient utilization. It is a known fact that oil resources
will diminish within a couple of decades and
the green gold is seen as a viable alternative
to its current black companion.
The enormous forest resources in the area,
the growing domestic demand and its location near the large and rapidly developing Asian markets provide excellent facilities for the Russian forest sector’s growth as
well as for companies like Ponsse who produce high-level forest technology. The forest sector is experiencing rapid growth and
the technological development is creating a
demand for modern forest harvesters. Nat-
urally, all major manufacturers have recognised the potential that lies within the Russian market, but because of the sector’s rapid
growth the outlook is only promising for the
best players who can operate in all corners
of the area.
In the final years of the Soviet Union in the
1980s the harvesting amounts were up to
500 million m3 per year, but in the 1990s
they crashed below one hundred. Now the
figures are once again soaring and the actual
cut cubic metres are already around 200 million. A great deal of raw wood is now exported, mainly to China and Scandinavia,
but from now on Russia’s own refining, supported by the State, will use a bigger share
of the raw wood. In the Soviet era most of
the felling was done by loggers. The loggers
exited the market for the most part during
the quiet years of the 1990s, and there are
no signs of a new logger generation. Hard
manual labour is not the first choice for the
OOO Ponsse’s
President
Ville Siekkinen
and Tarpan’s CEO
Pavel Ohotnikov
younger generation when choosing a profession, and it is also very common that
the forest areas have too little manpower to
take care of the necessary felling, much less
growth. The only viable alternative is rapid
mechanization.
The technology gets tested in
demanding conditions
Ponsse has been operating in Russia for a few
years. Jaakko Laurila and Oleg Maslov were
the first two ”pioneers”, but since last spring
Ponsse has operated in the market more ”officially” through its subsidiary, OOO Ponsse.
Ponsse also has some influential members in
the parent company’s Board of Directors,
such as the very experienced Seppo Remes,
who has excellent connections in Moscow as
well.
Ponsse’s market area is very large with customers from Karelia to Far East. Besides
OOO Ponsse, there are two other retailers
in Russia, Zeppelin Russland in Northwest
Russia and Lespromservis in the areas west
of Ural. Ponsse is constantly continuing its
efforts to extend its retailer network. Entering the Russian network has been fairly easy
for Ponsse. The growing markets are always
easier than those with fierce competition
and a long history. Ponsse is also known and
recognized as the leading brand in the business. The Russians realize the importance of
proper technology in achieving great results.
“If we handle the Russian market properly,
before long we will sell more machines here
than in Finland”, estimates OOO Ponsse’s
Prsident Ville Siekkinen.
Ponsse machines. “Our experiences with
PONSSE harvesters and forwarders have
been very positive. The local conditions set
very high demands on the technology used
in the machines, but Ponsse’s machines have
proven themselves a worthy investment”, says
Timberland’s President Elena Lysokova.
Tarpan, one of PONSSE’s customers in
the Karelian Isthmus, has also voiced its
appreciation of the good results achieved
with PONSSE machines. ”We have used
PONSSE Ergo to harvest more than 9,000
cubic meters per month”, says Tarpan’s
Chairman of the Board Pavel Ohotnikov
with noticeable pride in his voice. Tarpan
also wishes to thank Ponsse for the close cooperation and direct contacts with Ponsse’s
staff. ”Problems are bound to arise every
now and then when harvesting timber in
demanding conditions, but help has always
been available. Successful cooperation and
mutual trust make it a lot easier for us to
consider further investments”, says Pavel
Ohotnikov.
Timberland’s President
Elena Lysokova
One of Ponsse’s first customers in Russia, Timberland, operates out of St. Petersburg and has been using Ponsse machines
for harvesting timber since 1995. Last
year the company purchased three new
PONSSE Ergo and PONSSE Buffalo machine chains. Timberland has been
very satisfied with the performance of the
Ponsse 2005
27
Ponsse in Latin America
Following major investments in Latin America by large forestry companies, the continent has developed into
an interesting market area. Alongside
growing demand for paper, large international corporations have invested
in short fibre pulp in particular, while
sawmills and plywood mills have also
become more active in the region.
The area’s most commercially important tree, the eucalyptus, grows into harvestable pulp wood in 7-8 years
and into timber trees in 15 years. The
productivity of tree plantations is
increased by the fact that, due to favourable climatic conditions, these
eucalyptus trees, planted where cattle
once grazed, offer very high productivity
per hectare. Harvesting, too, must therefore become even more efficient. The
Latin American market for cut-to-length
logging equipment is concentrated in
four main market areas: Brazil, Chile,
Uruguay and Argentina.
In 2005, Ponsse decided to establish
itself in Latin America in order to be
in close contact with local customers.
Ponsse and its Brazilian subsidiary,
Ponsse Latin America, aim to provide
the best selection of products available in the market area for both softwood and eucalyptus harvesting.
Ponsse’s acquisition in July 2005 of
Lako Oy, a manufacturer of harvester
heads, enhanced Ponsse’s product range
with barking harvesters, which it previously lacked. At the same time we be-
28
Ponsse 2005
Market-specific
Ponsse is familiarising
product selection
itself carefully with
and comprehensive
the special needs of
customer support.
the area.
came better able to offer our customers
various options for enhancing harvesting productivity and efficiency.
As one of its first actions, Ponsse Latin America reorganised Ponsse’s distribution channels in Chile. Ponsse has
been active in Chile for approximately
ten years and our products have a good
reputation there. At the start of 2005,
Ponsse entered into a distribution
agreement with the Chilean company
SK Machinery S.A. Over the year, we
worked actively to show our customers
that besides a good product, we offer
comprehensive customer support in cooperation with SK Machinery.
In the Brazilian, Uruguayan and Argentinian markets, we have thoroughly
familiarised ourselves with customers’
demands regarding productivity and efficiency in harvesting. In order to offer just the right range of products, our
products were tested in 2005 in various
environments with different product
configurations.
At the end of 2005, Ponsse decided to
initiate product development and production of harvester heads. Besides the
related factory, Ponsse’s Latin American
Training Centre will begin operations.
With these investments, Ponsse Latin
America is able offer its customers both
a product range fulfilling local market
requirements and strong customer support. The new premises will be ready
during the first quarter of 2006.
Ponsse 2005
29
Ponsse in Latin America
Following major investments in Latin America by large forestry companies, the continent has developed into
an interesting market area. Alongside
growing demand for paper, large international corporations have invested
in short fibre pulp in particular, while
sawmills and plywood mills have also
become more active in the region.
The area’s most commercially important tree, the eucalyptus, grows into harvestable pulp wood in 7-8 years
and into timber trees in 15 years. The
productivity of tree plantations is
increased by the fact that, due to favourable climatic conditions, these
eucalyptus trees, planted where cattle
once grazed, offer very high productivity
per hectare. Harvesting, too, must therefore become even more efficient. The
Latin American market for cut-to-length
logging equipment is concentrated in
four main market areas: Brazil, Chile,
Uruguay and Argentina.
In 2005, Ponsse decided to establish
itself in Latin America in order to be
in close contact with local customers.
Ponsse and its Brazilian subsidiary,
Ponsse Latin America, aim to provide
the best selection of products available in the market area for both softwood and eucalyptus harvesting.
Ponsse’s acquisition in July 2005 of
Lako Oy, a manufacturer of harvester
heads, enhanced Ponsse’s product range
with barking harvesters, which it previously lacked. At the same time we be-
28
Ponsse 2005
Market-specific
Ponsse is familiarising
product selection
itself carefully with
and comprehensive
the special needs of
customer support.
the area.
came better able to offer our customers
various options for enhancing harvesting productivity and efficiency.
As one of its first actions, Ponsse Latin America reorganised Ponsse’s distribution channels in Chile. Ponsse has
been active in Chile for approximately
ten years and our products have a good
reputation there. At the start of 2005,
Ponsse entered into a distribution
agreement with the Chilean company
SK Machinery S.A. Over the year, we
worked actively to show our customers
that besides a good product, we offer
comprehensive customer support in cooperation with SK Machinery.
In the Brazilian, Uruguayan and Argentinian markets, we have thoroughly
familiarised ourselves with customers’
demands regarding productivity and efficiency in harvesting. In order to offer just the right range of products, our
products were tested in 2005 in various
environments with different product
configurations.
At the end of 2005, Ponsse decided to
initiate product development and production of harvester heads. Besides the
related factory, Ponsse’s Latin American
Training Centre will begin operations.
With these investments, Ponsse Latin
America is able offer its customers both
a product range fulfilling local market
requirements and strong customer support. The new premises will be ready
during the first quarter of 2006.
Ponsse 2005
29
KASVUMAHDOLLISUUTEMME
Ponsse’s technology subsidiary Epec Oy
Photo: Metso Minerals
mands and to improve their competitiveness. The improved customer orientation is based on a well thought out
strategy in which Epec’s mission, vision
and values have been updated to correspond to company’s current views. The
new ”Commitment to Your Continuous
Success” mission reflects the new state
of mind whereby Epec commits to their
customers’ continuous success both now
and in the future.
Epec specializes in machinespecific PC systems and
intelligent control systems for
mobile machines. The optional
information logistics systems
improve the productivity and
safety of the machines and make
the maintenance work easier,
even in the most challenging
conditions. Epec’s experts at
Seinäjoki and Kajaani provide a
comprehensive overall service
with decades of experience. The
company’s customers consist
of leading off-road machinery
manufacturers on a global basis.
30
Ponsse 2005
The year of 2005 introduced many changes at Epec. Automation engineer Jouni
Matikainen left his marketing manager’s
post at ABB’s Substation Automation and
Protection unit to become Epec’s President
at the beginning of March 2005. Matikainen had been working at ABB in various
sales and marketing tasks since 1995, and,
speaking Spanish and Portuguese, he had
worked in Brazil for a total of four years.
In March Epec Oy purchased Ponsse Oyj’s
information systems unit in Kajaani. The
integration doubled Epec’s staff and they
now employ more than 100 electronics
and software experts.
According to Matikainen, the company
also succeeded in its day-to-day operations regardless of the numerous changes
in 2005. “We achieved and partly even exceeded the objectives we had set for quality
and reliability of delivery. This provides the
basis for developing all operations and it is
a great start to 2006.”
Epec’s business operations developed favorably during 2005, and the company is
currently seeking additional growth in the
export markets. The high-quality products,
a strong position in the domestic market,
quality and environmental certificates,
the extensive know-how and competence
as an overall system provider, and various
references as the global supplier of overall
control systems for leading manufacturers
of moving machines create a very strong
basis for the company’s future growth.
Epec’s intelligent
control systems are
utilised in various
machines, such as
Metso Minerals’
crushers and Sandvik
Customer needs - the heart
of the new strategy
Epec is a strong company specializing in
demanding control and information systems for off-road machinery and capable
of offering comprehensive solutions to its
current and future customers. The com”The integration of the two units has been
pany also has long-term customer relationchallenging yet rewarding, and the enthuships with leading machinery manufactursiasm has been reflected in the employees’
ers in the mining, mineral crushing, and
positive attitude towards
waste treatment and forStrong basis
work. The purchase proest machine sectors. Epec
vided Epec with additiondesigns and manufactures
for increasing
al skilled resources and
state-of-the-art control
exports.
know-how, and the comsystems for moving mapany can now respond to
chines and machine comcustomers’ demands even better than bebinations in co-operation with growing
fore. The company received new expertise,
and development-oriented machine and
especially in the PC-based control systems
equipment manufacturers.
as well as in the remote service and diagnostics office applications”, says President
In 2005 Epec refocused its operations in
Matikainen.
order to meet the growing customer de-
The product manager nominations of
2005 also support the new strategy. The
product managers’ most important tasks
include collecting, analyzing and prioritizing the product and service-related client needs and market demands. The actions taken help the product development
and manufacturing department to develop innovative, competitive, high-quality
products that meet or exceed the customers’ needs and provide added value.
Tamrock’s mining
machines.
Photo: Tamrock
Epec’s control unit production purchased
an automated optical inspection device
in 2005. This so-called AOI device is attached to the control unit production line
and inspects every product manufactured
on the line. 13 cameras take and save approximately 100 pictures of each product
into the machine’s memory. The device
then compares the pictures with the reference pictures and is able to detect any
possible flaws or errors. These types of errors include short circuits, missing components, missing or incomplete soldered
joints, and incorrect position. Thanks to
the new device, the control unit line can
produce better and more even quality.
Ponsse 2005
31
KASVUMAHDOLLISUUTEMME
Ponsse’s technology subsidiary Epec Oy
Photo: Metso Minerals
mands and to improve their competitiveness. The improved customer orientation is based on a well thought out
strategy in which Epec’s mission, vision
and values have been updated to correspond to company’s current views. The
new ”Commitment to Your Continuous
Success” mission reflects the new state
of mind whereby Epec commits to their
customers’ continuous success both now
and in the future.
Epec specializes in machinespecific PC systems and
intelligent control systems for
mobile machines. The optional
information logistics systems
improve the productivity and
safety of the machines and make
the maintenance work easier,
even in the most challenging
conditions. Epec’s experts at
Seinäjoki and Kajaani provide a
comprehensive overall service
with decades of experience. The
company’s customers consist
of leading off-road machinery
manufacturers on a global basis.
30
Ponsse 2005
The year of 2005 introduced many changes at Epec. Automation engineer Jouni
Matikainen left his marketing manager’s
post at ABB’s Substation Automation and
Protection unit to become Epec’s President
at the beginning of March 2005. Matikainen had been working at ABB in various
sales and marketing tasks since 1995, and,
speaking Spanish and Portuguese, he had
worked in Brazil for a total of four years.
In March Epec Oy purchased Ponsse Oyj’s
information systems unit in Kajaani. The
integration doubled Epec’s staff and they
now employ more than 100 electronics
and software experts.
According to Matikainen, the company
also succeeded in its day-to-day operations regardless of the numerous changes
in 2005. “We achieved and partly even exceeded the objectives we had set for quality
and reliability of delivery. This provides the
basis for developing all operations and it is
a great start to 2006.”
Epec’s business operations developed favorably during 2005, and the company is
currently seeking additional growth in the
export markets. The high-quality products,
a strong position in the domestic market,
quality and environmental certificates,
the extensive know-how and competence
as an overall system provider, and various
references as the global supplier of overall
control systems for leading manufacturers
of moving machines create a very strong
basis for the company’s future growth.
Epec’s intelligent
control systems are
utilised in various
machines, such as
Metso Minerals’
crushers and Sandvik
Customer needs - the heart
of the new strategy
Epec is a strong company specializing in
demanding control and information systems for off-road machinery and capable
of offering comprehensive solutions to its
current and future customers. The com”The integration of the two units has been
pany also has long-term customer relationchallenging yet rewarding, and the enthuships with leading machinery manufactursiasm has been reflected in the employees’
ers in the mining, mineral crushing, and
positive attitude towards
waste treatment and forStrong basis
work. The purchase proest machine sectors. Epec
vided Epec with additiondesigns and manufactures
for increasing
al skilled resources and
state-of-the-art control
exports.
know-how, and the comsystems for moving mapany can now respond to
chines and machine comcustomers’ demands even better than bebinations in co-operation with growing
fore. The company received new expertise,
and development-oriented machine and
especially in the PC-based control systems
equipment manufacturers.
as well as in the remote service and diagnostics office applications”, says President
In 2005 Epec refocused its operations in
Matikainen.
order to meet the growing customer de-
The product manager nominations of
2005 also support the new strategy. The
product managers’ most important tasks
include collecting, analyzing and prioritizing the product and service-related client needs and market demands. The actions taken help the product development
and manufacturing department to develop innovative, competitive, high-quality
products that meet or exceed the customers’ needs and provide added value.
Tamrock’s mining
machines.
Photo: Tamrock
Epec’s control unit production purchased
an automated optical inspection device
in 2005. This so-called AOI device is attached to the control unit production line
and inspects every product manufactured
on the line. 13 cameras take and save approximately 100 pictures of each product
into the machine’s memory. The device
then compares the pictures with the reference pictures and is able to detect any
possible flaws or errors. These types of errors include short circuits, missing components, missing or incomplete soldered
joints, and incorrect position. Thanks to
the new device, the control unit line can
produce better and more even quality.
Ponsse 2005
31
ACTIONS SUPPORTING GROWTH BY PROMOTING THE QUALITY OF PRODUCTS AND PRODUCTION
ACTIONS SUPPORTING GROWTH
BY PROMOTING THE QUALITY OF
PRODUCTS AND PRODUCTION
Controlled growth requires a solid basis in product development, production, marketing, and maintenance
services. In 2005, we focused especially on increasing our know-how and the quality of our products.
We can get the best out of
our modern manufacturing
process by seamlessly linking
our suppliers as part of the
overall process.
Supplier network development project
As part of an extensive process to develop our plant and operations, we started
to develop our supplier network towards
the end of 2005. The project is associated with the national TRIO programme
of the Technology Industries of Finland,
aiming to improve the productivity and
competitiveness of the Finnish metal and
engineering industry through networking.
Partners to the network concept include
the main supplier, system supplier, component supplier and joint manufacturing
partners. We initiated the project in October by preparing a preliminary review
of potential system suppliers and joint
manufacturing partners. The objective is
to create the structure of the network and
decide on the companies to be included
within the first quarter of 2006.
Compared with traditional supplier cooperation, the most significant change in the
project is the emphasis on a partnership
orientation. The objective is to achieve a
continuous partnership rather than fixedterm contracts and competitive bidding.
Within the network, we are jointly developing products and procedures to become
more competitive while improving the
cost-efficiency of our operations. The cooperation also provides additional opportunities for the development of the quality of products and operations, as well as
logistics. As partners, we understand the
different parties’ need to achieve success
and support each other through open and
fair cooperation.
Through the development of a supplier
network, we are also making preparations
for expected increases in production. We
are aiming at increased flexibility through
joint manufacturing in order to better balance peaks in demand and keep delivery
times sufficiently short. A well-function-
32
Ponsse 2005
ing joint manufacturing network would
make it possible to ensure the competitive development of productivity.
Networked cooperation
improves the efficiency of
the entire delivery chain
More profound cooperation with suppliers and the establishment of long-term
supply contracts will allow us to further
develop the quality of production. We
can get the best out of our modern manufacturing process by seamlessly linking
our suppliers as part of the overall process.
Close cooperation with suppliers will enable a high-quality manufacturing process that can adhere to accurate delivery
times. We are also strongly committed to
cooperation in design, illustrated by the
partnership agreements signed with NAF
and Maaseudun Kone; the former supplies Ponsse with axles and transmission
components, while the latter supplies
cabin frames.
A network of
partners improves
quality as well as costefficiency.
Intensifying competition requires that
all unnecessary costs within the delivery
chain be minimised to the greatest possible extent. We will develop production
technology jointly with suppliers and
invest heavily in the utilisation of automation. We will then be able to take advantage of the efficiency provided by specialisation: as each company within the
network focuses on the task determined
by its competence, so we can avoid overlapping investments. Together with the
network of suppliers, we will also examine the entire manufacturing process of
each component, as well as the handling
and transport phases involved. This will
make it possible to improve the cost-efficiency of the overall process down to
each detail.
Ponsse 2005
33
ACTIONS SUPPORTING GROWTH
BY PROMOTING THE QUALITY OF
PRODUCTS AND PRODUCTION
Controlled growth requires a solid basis in product development, production, marketing, and maintenance
services. In 2005, we focused especially on increasing our know-how and the quality of our products.
We can get the best out of
our modern manufacturing
process by seamlessly linking
our suppliers as part of the
overall process.
Supplier network development project
As part of an extensive process to develop our plant and operations, we started
to develop our supplier network towards
the end of 2005. The project is associated with the national TRIO programme
of the Technology Industries of Finland,
aiming to improve the productivity and
competitiveness of the Finnish metal and
engineering industry through networking.
Partners to the network concept include
the main supplier, system supplier, component supplier and joint manufacturing
partners. We initiated the project in October by preparing a preliminary review
of potential system suppliers and joint
manufacturing partners. The objective is
to create the structure of the network and
decide on the companies to be included
within the first quarter of 2006.
Compared with traditional supplier cooperation, the most significant change in the
project is the emphasis on a partnership
orientation. The objective is to achieve a
continuous partnership rather than fixedterm contracts and competitive bidding.
Within the network, we are jointly developing products and procedures to become
more competitive while improving the
cost-efficiency of our operations. The cooperation also provides additional opportunities for the development of the quality of products and operations, as well as
logistics. As partners, we understand the
different parties’ need to achieve success
and support each other through open and
fair cooperation.
Through the development of a supplier
network, we are also making preparations
for expected increases in production. We
are aiming at increased flexibility through
joint manufacturing in order to better balance peaks in demand and keep delivery
times sufficiently short. A well-function-
32
Ponsse 2005
ing joint manufacturing network would
make it possible to ensure the competitive development of productivity.
Networked cooperation
improves the efficiency of
the entire delivery chain
More profound cooperation with suppliers and the establishment of long-term
supply contracts will allow us to further
develop the quality of production. We
can get the best out of our modern manufacturing process by seamlessly linking
our suppliers as part of the overall process.
Close cooperation with suppliers will enable a high-quality manufacturing process that can adhere to accurate delivery
times. We are also strongly committed to
cooperation in design, illustrated by the
partnership agreements signed with NAF
and Maaseudun Kone; the former supplies Ponsse with axles and transmission
components, while the latter supplies
cabin frames.
A network of
partners improves
quality as well as costefficiency.
Intensifying competition requires that
all unnecessary costs within the delivery
chain be minimised to the greatest possible extent. We will develop production
technology jointly with suppliers and
invest heavily in the utilisation of automation. We will then be able to take advantage of the efficiency provided by specialisation: as each company within the
network focuses on the task determined
by its competence, so we can avoid overlapping investments. Together with the
network of suppliers, we will also examine the entire manufacturing process of
each component, as well as the handling
and transport phases involved. This will
make it possible to improve the cost-efficiency of the overall process down to
each detail.
Ponsse 2005
33
Ponsse Academy
Dynamic training for changing needs
The vision and objectives of Ponsse Academy’s training environment were refocused
in the fall of 2005. The goal is to develop
versatile competence benefiting both Ponsse
and its customers and partners. Therefore, in
addition to Ponsse’s current and future employees, the training services are also available
to our interest groups. The practical operations of Ponsse Academy focus on organizing
training and events, as well as producing the
required materials. The Academy also develops methods and tools that are used to anticipate the needs of Ponsse and its interest
groups, to improve the current competence
level, to support learning, and to evaluate results.
Staff training for
customers’ benefit
Ensuring competence has a key role in
Ponsse’s operational system. The need for
training is evaluated throughout the organization from the company level to individuals’ development needs. The competence surveys done simultaneously with the personal
appraisals provide a good basis for planning
training, and the personal learning goals
make sure that the plans are put into action.
There is much more to improving people’s
competence than just traditional training sessions. Rotation of tasks, eLearning, learning
by doing with predefined objectives, and participating in development projects, for example, have proven themselves successful learning methods when combined with normal
training.
One of the biggest staff training projects has
been the product know-how training, which
was organised in cooperation with Lapin
Luonto-opisto (Lapland College of Natural
Resources). More than 200 Ponsse employees
have already completed this two-day training
that aims to familiarize the participants with
the Finnish forest policy, the forest industry
and the sustainable utilization of forests. It also gives them a chance to see and learn about
the forest machines in action. Besides getting
valuable background information, the participants have had some unforgettable moments
in the training. A personal hands-on experience is a very efficient learning method, and
therefore every participant is given the chance
to try the forest machine simulator as well as
the controls of a real forest machine with a little help from the trainers.
The short training courses lasting from one
to a few days have an important role in improving the employees’ competence. As long
as the content is based on an accurate need
analysis, a tailor-made training course is well
worth the effort. However, a longer training
Ponsse Fund
Ponsse Oyj has been involved in setting up a fund that invests in increasing interest in research and innovations
contributing to the role of modern technologies in sustainable development in European countries. The Ponsse Fund
awards scholarships mainly for PhD or post-doctoral studies
at the European Forest Institute (EFI).
The fund started its operation in January 2006.
34
Ponsse 2005
and learning period is often needed to achieve
the goals. In 2006 Ponsse Academy will
launch a training program for Ponsse’s maintenance engineers, as well as a program for
product and maintenance service salespeople.
The latter training will be organized in various countries using the languages spoken in
those areas. The intention is to improve sales
network’s know-how on product and clientele
for customers’ benefit.
Harvesting and
service expertise
User training has a key role in Ponsse’s product and service entity since there is a direct
link between a driver’s competence level and
productivity. Ponsse Academy seeks to harmonize the content and methods of these user
trainings and to ensure the total quality of the
training. Ponsse is also actively involved in the
research and development projects concerning forest industry education, as the results of
these studies can often be utilized in Ponsse’s
own development work. For instance, there
is a lot of research information available on
different characteristics and areas of expertise
contributing to the forest machine operator’s
efficiency. This information is utilized in various areas, such as drivers’ further training.
Ponsse Academy offers
various types of
training for staff, customers
and partners.
Skilled and motivated staff have been and will
continue to be the biggest key to Ponsse’s success. We want to provide our customers with
services from the most skilled people in the
business, and one of Ponsse Academy’s most
important tasks is to guarantee that we can
do so. Meeting the objectives we have set for
improving our employees’ know-how is not
something that takes care of itself; it requires
systematic work and sufficient investments.
The changing work environment, the continuously developing technology and the growth
of the business create new demands for individuals’ competence and constant development of operations.
Ponsse 2005
35
Ponsse Academy
Dynamic training for changing needs
The vision and objectives of Ponsse Academy’s training environment were refocused
in the fall of 2005. The goal is to develop
versatile competence benefiting both Ponsse
and its customers and partners. Therefore, in
addition to Ponsse’s current and future employees, the training services are also available
to our interest groups. The practical operations of Ponsse Academy focus on organizing
training and events, as well as producing the
required materials. The Academy also develops methods and tools that are used to anticipate the needs of Ponsse and its interest
groups, to improve the current competence
level, to support learning, and to evaluate results.
Staff training for
customers’ benefit
Ensuring competence has a key role in
Ponsse’s operational system. The need for
training is evaluated throughout the organization from the company level to individuals’ development needs. The competence surveys done simultaneously with the personal
appraisals provide a good basis for planning
training, and the personal learning goals
make sure that the plans are put into action.
There is much more to improving people’s
competence than just traditional training sessions. Rotation of tasks, eLearning, learning
by doing with predefined objectives, and participating in development projects, for example, have proven themselves successful learning methods when combined with normal
training.
One of the biggest staff training projects has
been the product know-how training, which
was organised in cooperation with Lapin
Luonto-opisto (Lapland College of Natural
Resources). More than 200 Ponsse employees
have already completed this two-day training
that aims to familiarize the participants with
the Finnish forest policy, the forest industry
and the sustainable utilization of forests. It also gives them a chance to see and learn about
the forest machines in action. Besides getting
valuable background information, the participants have had some unforgettable moments
in the training. A personal hands-on experience is a very efficient learning method, and
therefore every participant is given the chance
to try the forest machine simulator as well as
the controls of a real forest machine with a little help from the trainers.
The short training courses lasting from one
to a few days have an important role in improving the employees’ competence. As long
as the content is based on an accurate need
analysis, a tailor-made training course is well
worth the effort. However, a longer training
Ponsse Fund
Ponsse Oyj has been involved in setting up a fund that invests in increasing interest in research and innovations
contributing to the role of modern technologies in sustainable development in European countries. The Ponsse Fund
awards scholarships mainly for PhD or post-doctoral studies
at the European Forest Institute (EFI).
The fund started its operation in January 2006.
34
Ponsse 2005
and learning period is often needed to achieve
the goals. In 2006 Ponsse Academy will
launch a training program for Ponsse’s maintenance engineers, as well as a program for
product and maintenance service salespeople.
The latter training will be organized in various countries using the languages spoken in
those areas. The intention is to improve sales
network’s know-how on product and clientele
for customers’ benefit.
Harvesting and
service expertise
User training has a key role in Ponsse’s product and service entity since there is a direct
link between a driver’s competence level and
productivity. Ponsse Academy seeks to harmonize the content and methods of these user
trainings and to ensure the total quality of the
training. Ponsse is also actively involved in the
research and development projects concerning forest industry education, as the results of
these studies can often be utilized in Ponsse’s
own development work. For instance, there
is a lot of research information available on
different characteristics and areas of expertise
contributing to the forest machine operator’s
efficiency. This information is utilized in various areas, such as drivers’ further training.
Ponsse Academy offers
various types of
training for staff, customers
and partners.
Skilled and motivated staff have been and will
continue to be the biggest key to Ponsse’s success. We want to provide our customers with
services from the most skilled people in the
business, and one of Ponsse Academy’s most
important tasks is to guarantee that we can
do so. Meeting the objectives we have set for
improving our employees’ know-how is not
something that takes care of itself; it requires
systematic work and sufficient investments.
The changing work environment, the continuously developing technology and the growth
of the business create new demands for individuals’ competence and constant development of operations.
Ponsse 2005
35
New concepts for improving overall quality
Throughout the years, Ponsse products
have been based on customer orientation
and high quality. Tightening customer
demands and increasing production volumes have also increased the challenges
to maintain Ponsse quality. Quality and
processibility became subjects for special
attention in 2005.
The new production
and quality concepts
seamlessly support
each other.
New production and quality concepts
seamlessly supporting each other were
designed for Ponsse for the purpose of
developing quality functions. The purpose of the concepts is to create a strong
framework for operations that allows the
same proven systematics to be successfully implemented over and over again. The
production concept guides Ponsse’s manufacturing towards more systematic procedures while compliance with the quality concept creates the prerequisites for
implementing the principle of continuous improvement. On the top level, the
quality concept includes management reviews, internal audits, process groups and
quality circles.
The ISO 9001:2000 standard’s requirement for process-oriented operations provides the preconditions for high-quality operations. The Management Group
reformed Ponsse’s core processes, quality
policy and indicators to correspond to the
new challenges, which enabled a redesign
and reconstruction of the operational system. The most significant development at
the process level included the description
of Ponsse’s management system and the
linking of targets to the factors of success
determined by the Management Group.
Reforms in manufacturing,
co-operation and customer
service
The operational system was designed to
include all the information required for
36
Ponsse 2005
steering the operations. In order to ensure
the usability of the operational system,
a new method of describing processes,
a system of indicators, document management and integration of Web-based
applications into the system were developed. Throughout the project the aim
was to minimise the amount of maintenance work. The efficiency of combining the quality and IT organisations was
observed in connection with the project:
process development and information
systems development inevitably progress
hand in hand.
Quality circles in accordance with the
quality concept were launched at Ponsse
in order to improve quality as a part of
operations. The objective is to prioritise
the resolution of problems associated with
manufacturing with the help of process teams. The quality circles resulted in
a downward trend in problems detected
during test drives before products are delivered to the customer. Employees in the
production, design and quality departments committed themselves to improvement and operation of the quality circles.
A rapid problem resolution team was also
established within production.
The method of carrying out internal audits was also reformed. Employees were
trained in the new operating model and
audits were started with the aim of developing processes from Ponsse’s starting
points. The audits define the areas for development and note the functionality of
processes. The new procedure makes it
possible for all employees to participate in
development work.
A new product feedback system was developed for the customer interface by designers, product managers, and the quality and IT department. Its purpose is to
centralise feedback from the field in a
single location, to be processed within a
common systematic problem resolution
process. An efficient channel for processing feedback provides the parties submitting feedback with the opportunity to
monitor its processing within the plant.
In spite of the development in quality
management, we are still facing challenges imposed by the efficient use of new operating models and the development of a
new production system. The quality work
initiated during the year under review
will be actively continued through new
projects in 2006.
Customer-specific product
variations as high-quality
serial production
An extension to Ponsse’s assembly plant
was introduced into use at the beginning of 2006. Efficient logistics reduces
the number of processing phases at the
reformed assembly plant. The frames of
the machines are moved using automated
transport wagons that eliminate transport
delays and facilitate the installation of
components. Assembly installation work
and warehouse operations have been separated into different workflows, and the
reduction in processing phases has substantially improved occupational safety
and the quality of the final product.
The line-type order of assembly work is
more phased than previously. Assembly is
divided into smaller entities within which
the number of actions performed by each
installer and installation point has been
reduced. Because standardised functions
can be managed, guided and supervised
better than before, production quality
and productivity have reached new levels.
The plant extensions and production reforms currently underway will create a
framework for a more extensive product
offering, more flexible operations, and
forest machinery of an even higher quality. The investments allow us to provide
customers with individual products at the
Component plant to be
efficiency and quality of serial producreformed during 2006
tion. The new production structure is better
Ponsse’s component
in enabling customerplant will be reformed
A new feedback
specific product modto correspond to the
system improves the
ules from which the
needs of more efficustomer can flexibly
cient production durefficiency of customer
select the components
ing 2006. The starting
service and problem
and product features of
points for the design
its choice. The reformof the component
resolution.
ing plant will serve
plant include a clear
the entire life span of
and accurate flow of
a machine. Product information will rematerial and functions that will be standmain in Ponsse’s systems to secure the life
ardised and unified. The degree of autospan of a forest machine, and the product
mation in welding as well as machining
structure of a machine will be updated
will be increased. The component plant
by maintenance operations carried out at
produces parts for new machines in proPonsse’s service centres.
duction as well as discontinued models.
This ensures the availability of service
parts for old models of machines and reduces the price of parts.
The objective of the development work is
to unify the different phases of production, resulting in a smooth flow of components in the plant and adherence to
schedules. This will make it substantially easier to produce and supervise quality, and the productivity of work will be
improved.
Ponsse 2005
37
New concepts for improving overall quality
Throughout the years, Ponsse products
have been based on customer orientation
and high quality. Tightening customer
demands and increasing production volumes have also increased the challenges
to maintain Ponsse quality. Quality and
processibility became subjects for special
attention in 2005.
The new production
and quality concepts
seamlessly support
each other.
New production and quality concepts
seamlessly supporting each other were
designed for Ponsse for the purpose of
developing quality functions. The purpose of the concepts is to create a strong
framework for operations that allows the
same proven systematics to be successfully implemented over and over again. The
production concept guides Ponsse’s manufacturing towards more systematic procedures while compliance with the quality concept creates the prerequisites for
implementing the principle of continuous improvement. On the top level, the
quality concept includes management reviews, internal audits, process groups and
quality circles.
The ISO 9001:2000 standard’s requirement for process-oriented operations provides the preconditions for high-quality operations. The Management Group
reformed Ponsse’s core processes, quality
policy and indicators to correspond to the
new challenges, which enabled a redesign
and reconstruction of the operational system. The most significant development at
the process level included the description
of Ponsse’s management system and the
linking of targets to the factors of success
determined by the Management Group.
Reforms in manufacturing,
co-operation and customer
service
The operational system was designed to
include all the information required for
36
Ponsse 2005
steering the operations. In order to ensure
the usability of the operational system,
a new method of describing processes,
a system of indicators, document management and integration of Web-based
applications into the system were developed. Throughout the project the aim
was to minimise the amount of maintenance work. The efficiency of combining the quality and IT organisations was
observed in connection with the project:
process development and information
systems development inevitably progress
hand in hand.
Quality circles in accordance with the
quality concept were launched at Ponsse
in order to improve quality as a part of
operations. The objective is to prioritise
the resolution of problems associated with
manufacturing with the help of process teams. The quality circles resulted in
a downward trend in problems detected
during test drives before products are delivered to the customer. Employees in the
production, design and quality departments committed themselves to improvement and operation of the quality circles.
A rapid problem resolution team was also
established within production.
The method of carrying out internal audits was also reformed. Employees were
trained in the new operating model and
audits were started with the aim of developing processes from Ponsse’s starting
points. The audits define the areas for development and note the functionality of
processes. The new procedure makes it
possible for all employees to participate in
development work.
A new product feedback system was developed for the customer interface by designers, product managers, and the quality and IT department. Its purpose is to
centralise feedback from the field in a
single location, to be processed within a
common systematic problem resolution
process. An efficient channel for processing feedback provides the parties submitting feedback with the opportunity to
monitor its processing within the plant.
In spite of the development in quality
management, we are still facing challenges imposed by the efficient use of new operating models and the development of a
new production system. The quality work
initiated during the year under review
will be actively continued through new
projects in 2006.
Customer-specific product
variations as high-quality
serial production
An extension to Ponsse’s assembly plant
was introduced into use at the beginning of 2006. Efficient logistics reduces
the number of processing phases at the
reformed assembly plant. The frames of
the machines are moved using automated
transport wagons that eliminate transport
delays and facilitate the installation of
components. Assembly installation work
and warehouse operations have been separated into different workflows, and the
reduction in processing phases has substantially improved occupational safety
and the quality of the final product.
The line-type order of assembly work is
more phased than previously. Assembly is
divided into smaller entities within which
the number of actions performed by each
installer and installation point has been
reduced. Because standardised functions
can be managed, guided and supervised
better than before, production quality
and productivity have reached new levels.
The plant extensions and production reforms currently underway will create a
framework for a more extensive product
offering, more flexible operations, and
forest machinery of an even higher quality. The investments allow us to provide
customers with individual products at the
Component plant to be
efficiency and quality of serial producreformed during 2006
tion. The new production structure is better
Ponsse’s component
in enabling customerplant will be reformed
A new feedback
specific product modto correspond to the
system improves the
ules from which the
needs of more efficustomer can flexibly
cient production durefficiency of customer
select the components
ing 2006. The starting
service and problem
and product features of
points for the design
its choice. The reformof the component
resolution.
ing plant will serve
plant include a clear
the entire life span of
and accurate flow of
a machine. Product information will rematerial and functions that will be standmain in Ponsse’s systems to secure the life
ardised and unified. The degree of autospan of a forest machine, and the product
mation in welding as well as machining
structure of a machine will be updated
will be increased. The component plant
by maintenance operations carried out at
produces parts for new machines in proPonsse’s service centres.
duction as well as discontinued models.
This ensures the availability of service
parts for old models of machines and reduces the price of parts.
The objective of the development work is
to unify the different phases of production, resulting in a smooth flow of components in the plant and adherence to
schedules. This will make it substantially easier to produce and supervise quality, and the productivity of work will be
improved.
Ponsse 2005
37
BOARD OF DIRECTORS AND MANAGEMENT
BOARD OF DIRECTORS
AND MANAGEMENT
Board of Directors 31.12.2005
The Board of Directors was elected at the
general meeting on 15 March 2005.
Electing the board members
From left Seppo Remes, Ilkka
Kylävainio, Juha Vidgrén, Mirja
Ryynänen, Einari Vidgrén and Nils
Hagman.
According to the company’s articles of association, Ponsse Oyj’s Board of Directors consists of at least five and no more
than eight members. The members are
elected at the general meeting, which according to the articles of association has
to be held by the end of June. A board
member’s term expires at the next annual general meeting following his/her
election. The Board of Directors elects a
chairman from amongst its members.
Board meetings
The Board met 13 times during the year
under review. The members attended the
meetings actively – the participation percentage was 88,9.
Chairman of the Board
EINARI VIDGRÉN
B. 1943
• Industrial counsellor
• Founder of Ponsse Oyj
• Chairman of Ponsse Oyj’s Board of
Directors since 1993
• Ownership in Ponsse Oyj on 30
December 2005: 6,630,728 shares
38
Ponsse 2005
Members
NILS HAGMAN
B. 1947
• B.Sc. Econ.
• Focus area: Operations in
South America
• Board member of Ponsse Oyj since
2004, board member of Sisu Akselit
Oy, board member of Mateko Oy
December 2005: 1,000 shares
ILKKA KYLÄVAINIO
B. 1946
• Technician
• Focus area: Further processing
1999, President and Chairman of the
Board of Keitele Forest Oy, President
and Chairman of the Board of Keitele
Engineered Wood Oy, President and
Chairman of the Board of Keitele
Timber Oy, President and Chairman
of the Board of Keitele Energy Oy,
Board member of Finnish Sawmills.
SEPPO REMES
B. 1955
• M.Sc., Lic.Sc. (Econ.)
• Focus area: Operations in Russia
2004, CEO of Kiuru Partners LLC,
board member and senior advisor of
ZAO FIM, senior advisor of SITRA’s
Russia Program, Chairman of the
board’s auditing committee of OMZ,
Chairman of the board and board’s
auditing committee of SeverstalAvton, board member of RAO EES,
Chairman of the board’s auditing
committee, member of the valuation
committee and member of the strategy
and reform committee, board member
of OGK-6, board member of MRSK
Severo-Zapad, board member of the
Association for Protection of Investors
(API), board member of the Russian
Institute of Directors (RID)
MIRJA RYYNÄNEN
B. 1944
• M.Sc.
• Focus area: Forest cluster and EU
2004, member of the European
Parliament and Member of Parliament
1987–2003, Chairman of the network
working group for European forest
strategy 1995–1998, Vice-chairman
of the Committee for Development
Policy, (Foreign Ministry), member of
the Advisory Board for Human Rights
Issues (Foreign Ministry), Member of
the Supervisory Board of the Finnish
Broadcasting Company, Chairman of
the Advisory Board of the University of
Kuopio, Chairman of the Association
for International Democracy Cooperation
December 2005: 800 shares
JUHA VIDGRÉN
B. 1970
• M. Sc. (Educ.)
• Deputy Chairman of the Board of
Directors, board member of Ponsse
Oyj since 2000, Board member of
Fintoto Oy, Member of Vieremän
Oriyhdistys ry �s management team.
Ponsse 2005
39
Board of Directors 31.12.2005
The Board of Directors was elected at the
general meeting on 15 March 2005.
Electing the board members
According to the company’s articles of association, Ponsse Oyj’s Board of Directors consists of at least five and no more
than eight members. The members are
elected at the general meeting, which according to the articles of association has
to be held by the end of June. A board
member’s term expires at the next annual general meeting following his/her
election. The Board of Directors elects a
chairman from amongst its members.
Board meetings
The Board met 13 times during the year
under review. The members attended the
meetings actively – the participation percentage was 88,9.
Chairman of the Board
EINARI VIDGRÉN
B. 1943
• Industrial counsellor
• Founder of Ponsse Oyj
• Chairman of Ponsse Oyj’s Board of
Directors since 1993
Members
NILS HAGMAN
B. 1947
• B.Sc. Econ.
• Focus area: Operations in
South America
2004, board member of Sisu Akselit
Oy, board member of Mateko Oy
ILKKA KYLÄVAINIO
B. 1946
• Technician
• Focus area: Further processing
1999, President and Chairman of the
Board of Keitele Forest Oy, President
and Chairman of the Board of Keitele
Engineered Wood Oy, President and
Chairman of the Board of Keitele
Timber Oy, President and Chairman
of the Board of Keitele Energy Oy,
Board member of Finnish Sawmills.
SEPPO REMES
B. 1955
• M.Sc., Lic.Sc. (Econ.)
• Focus area: Operations in Russia
2004, CEO of Kiuru Partners LLC,
board member and senior advisor of
ZAO FIM, senior advisor of SITRA’s
Russia Program, Chairman of the
board’s auditing committee of OMZ,
Chairman of the board and board’s
auditing committee of SeverstalAvton, board member of RAO EES,
Chairman of the board’s auditing
committee, member of the valuation
committee and member of the strategy
and reform committee, board member
of OGK-6, board member of MRSK
Severo-Zapad, board member of the
Association for Protection of Investors
(API), board member of the Russian
Institute of Directors (RID)
MIRJA RYYNÄNEN
B. 1944
• M.Sc.
• Focus area: Forest cluster and EU
2004, member of the European
Parliament and Member of Parliament
1987–2003, Chairman of the network
working group for European forest
strategy 1995–1998, Vice-chairman
of the Committee for Development
Policy, (Foreign Ministry), member of
the Advisory Board for Human Rights
Issues (Foreign Ministry), Member of
the Supervisory Board of the Finnish
Broadcasting Company, Chairman of
the Advisory Board of the University of
Kuopio, Chairman of the Association
for International Democracy Cooperation
December 2005: 800 shares
JUHA VIDGRÉN
B. 1970
• M. Sc. (Educ.)
• Deputy Chairman of the Board of
Directors, board member of Ponsse
Oyj since 2000, Board member of
Fintoto Oy, Member of Vieremän
Oriyhdistys ry’s management team.
Ponsse 2005
39
ARTO TIITINEN,
b. 1959, Chairman of
the Management team
• MBA
• President and CEO
of Ponsse Oyj as of
1 April 2004
Management Team
31 December 2005
40
Managing Directors of Subsidiaries
PASI ARAJÄRVI,
b. 1967
• Bachelor of Logistics
• Purchasing and
Logistics Director
• Joined Ponsse
in 2002
JARI KARTANO,
b. 1955
• Mechanical Engineer
• Export Director
• Joined Ponsse on
2 August 2004
TAPIO MERTANEN,
b. 1965
• Technician, Diploma
in Logistics and
Operations
Management (MTD)
• Service Director
• Joined Ponsse
in 1994
JARI MONONEN,
b. 1974
• Forester, MSc (For)
• Communications
Manager
• Joined Ponsse
in 2001
JUHO NUMMELA,
b. 1977
• MSc (Eng)
• Quality and IT
Director
22 December 2004
Lako Oy
TURKKA
LASTUNEN
• Managing Director
since 1985
Epec Oy
JOUNI
MATIKAINEN
as of 1 March 2005
OOO Ponsse
VILLE
SIEKKINEN
as of 1 May 2005
Ponsse AB
BENNY
SONDELL
as of 1 January 2003
Ponsse AS
LYDER HOVE
ELLEVOLD
since 1998
HEIKKI OJALA,
b. 1957
• BSc (Eng),
MSc (Econ)
• Industrial Director
• Joined Ponsse
in 1992
PAULA OKSMAN,
b. 1959
• MA
• HR Director,
Principal of Ponsse
Academy
1 August 2005
MIKKO PAANANEN,
b. 1963
• LLM
• CFO, Deputy to the
President and CEO
of Ponsse Oyj
• Secretary of Ponsse
Oyj’s Board of
Directors
• Joined Ponsse
in 2002
VEIKKO RINTAMÄKI,
s. 1953
• MSc (Eng)
• Technology and
R&D Director
• Joined Ponsse on 22
December 2004
JARMO VIDGRÉN,
b.1975
• Commercial College
Graduate in
Marketing
• Sales Director
• Joined Ponsse
in 1997
Ponsse Latin America Ltda.
CLAUDIO COSTA
as of 25 April 2005
Ponssé S.A.S.
TAPIO INGERVO
since 2002
Ponsse UK Ltd.
JUKKA HAKALA
• Country Director
as of
15 November 2004
Ponsse North America, Inc.
MIKKO LAURILA
since 2002
AUDITOR
Ernst & Young Oy
Principal auditor
HEIKKI LAITINEN
Ponsse 2005
Ponsse 2005
41
ARTO TIITINEN,
b. 1959, Chairman of
the Management team
• MBA
• President and CEO
of Ponsse Oyj as of
1 April 2004
Management Team
31 December 2005
40
Managing Directors of Subsidiaries
PASI ARAJÄRVI,
b. 1967
• Bachelor of Logistics
• Purchasing and
Logistics Director
• Joined Ponsse
in 2002
JARI KARTANO,
b. 1955
• Mechanical Engineer
• Export Director
2 August 2004
TAPIO MERTANEN,
b. 1965
• Technician, Diploma
in Logistics and
Operations
Management (MTD)
• Service Director
• Joined Ponsse
in 1994
JARI MONONEN,
b. 1974
• Forester, MSc (For)
• Communications
Manager
• Joined Ponsse
in 2001
JUHO NUMMELA,
b. 1977
• MSc (Eng)
• Quality and IT
Director
22 December 2004
Lako Oy
TURKKA
LASTUNEN
since 1985
Epec Oy
JOUNI
MATIKAINEN
as of 1 March 2005
OOO Ponsse
VILLE
SIEKKINEN
as of 1 May 2005
Ponsse AB
BENNY
SONDELL
as of 1 January 2003
Ponsse AS
LYDER HOVE
ELLEVOLD
since 1998
HEIKKI OJALA,
b. 1957
• BSc (Eng),
MSc (Econ)
• Industrial Director
• Joined Ponsse
in 1992
PAULA OKSMAN,
b. 1959
• MA
• HR Director,
Principal of Ponsse
Academy
1 August 2005
MIKKO PAANANEN,
b. 1963
• LLM
• CFO, Deputy to the
President and CEO
of Ponsse Oyj
• Secretary of Ponsse
Oyj’s Board of
Directors
• Joined Ponsse
in 2002
VEIKKO RINTAMÄKI,
s. 1953
• MSc (Eng)
• Technology and
R&D Director
• Joined Ponsse on 22
December 2004
JARMO VIDGRÉN,
b.1975
• Commercial College
Graduate in
Marketing
• Sales Director
• Joined Ponsse
in 1997
Ponsse Latin America Ltda.
CLAUDIO COSTA
as of 25 April 2005
Ponssé S.A.S.
TAPIO INGERVO
since 2002
Ponsse UK Ltd.
JUKKA HAKALA
• Country Director
as of
15 November 2004
Ponsse North America, Inc.
MIKKO LAURILA
since 2002
AUDITOR
Ernst & Young Oy
Principal auditor
HEIKKI LAITINEN
Ponsse 2005
Ponsse 2005
41
PONSSE WORLDWIDE
42
Ponsse 2005
Ponsse 2005
43
PONSSE WORLDWIDE
42
Ponsse 2005
Ponsse 2005
43
ADDRESSES
ADDRESSES
ADDRESSES
PONSSE OYJ
Ponssentie 22
74200 VIEREMÄ
FINLAND
Tel. +358 20 768 800
Fax +358 20 768 8690
e-mail: [email protected]
www.ponsse.com
READYQUIP SALES AND
SERVICES LTD.
P.O. Box 2140, Highway 101 W
Timmins, Ontario
CANADA
Tel. +1 705 268 7600
Fax +1 705 268 7707
www.readyquip.com
CHILE
SUBSIDIARIES
SKC MACHINERY S.A.
EPEC OY
PONSSE AB
PONSSE NORTH AMERICA, INC.
Matinkatu 6
60100 Seinäjoki, FINLAND
Tel. +358 6 217 0111
Fax +358 6 217 0110
Västsura
735 91 Surahammar
SWEDEN
Tel. +46 220 399 00
Fax +46 220 399 01
4400 International Lane
Rhinelander, WI 54501
USA
Tel. +1 715 369 4833
Fax +1 715 369 4838
PONSSE AS
PONSSE UK LTD.
Eidskogveien 54
Postboks 1242
N-2206 Kongsvinger
NORWAY
Tel. +47 628 888 70
Fax +47 628 888 78
Unit 3
Broomhouses 1 Industrial Estate
Lockerbie, DG11 2RZ
UNITED KINGDOM
Tel. +44 (0) 1576 203 000
Fax +44 (0) 1576 202 202
PONSSE LATIN AMERICA LTDA.
PONSSÉ S.A.S.
Rua Princeza Isabel de Braganca
No. 235
Helbor Tower, Rooms 307 and 308
Mogi das Cruzes
Sao Paulo
BRASIL
Tel. +55 11 4798 5431
Fax +55 11 4798 5432
ZAC Croix Saint Nicolas
14 Rue de Lorraine - BP39
F-54840 Gondreville
FRANCE
Tel. +33 (0) 3 83 65 12 00
Fax +33 (0) 3 83 65 12 01
EPEC OY, KAJAANI OFFICE
Pakkastie 2
87500 Kajaani, FINLAND
Tel. +358 6 217 0111
Fax +358 20 760 8130
LAKO OY
Ruissalontie 11
20100 Turku, FINLAND
Tel. +358 2 4152 100
Fax +358 2 4690 120
OOO PONSSE
Pl. Konstitutsii 2, office 406
196247 St. Petersburg
RUSSIA
Tel. +7-812-331 9412
Fax +7-812-718 6547
DEALERS
44
CZECH
KRENEK FOREST SERVICE S.R.O.
Nov_ Nemojov 122
CZ-54461 Nemojov
CZECH
Tel. +420 603 261261
Fax +420 437 834540
ESTONIA
KESKO AGRO EESTI AS
Põrguvälja tee 3A
Pildiküla
75301 Harjumaa
ESTONIA
Tel. +372 6059 100
Fax + 372 6059 101
www.keskomachinery.ee
GERMANY
AUSTRIA
CANADA
GEBRÜDER KONRAD GMBH
A.L.P.A. EQUIPMENT LTD.
Gewerbepark 3
A-8564 Krottendorf
AUSTRIA
Tel. +43 3143 20 517
Fax + 43 3143 20 512
www.konrad-forst.com
258 Drapeau St
P.O. BOX 2532
Balmoral, N.B.
E8E 2W7
CANADA
Tel. +1 506 826 2717
Fax +1 506 826 2753
www.alpaequipment.com
Ponsse 2005
Panamericana Norte Km. 151/2
Casilla 436
V-Correo 21
Santiago
CHILE
Tel. +56 2 64 02222
Fax +56 2 64 02294
HYDROMEC INC.
2921, boul. Wallberg
Dolbeau-Mistassini
Quebec, G8L 1L6
CANADA
Tel. +1 418 276-5831
Fax +1 418 276-0408
WAHLERS FORSTTECHNIK GMBH
Im Heidhorn 24
27389 Lauenbrück
GERMANY
Tel. +49 4267 93020
Fax +49 4267 466
www.wahlers-forsttechnik.de
Landwehrstr.4
97215 Uffenheim
GERMANY
Tel. +49 09848 97 999 0
Fax +49 9848 97999 19
LATVIA
SPAIN
ADECOR CONSULTING S. L.
Avenida de la Vega 8-2-2B
28199 Alcobendas
Madrid
SPAIN
Tel. +34 91 622 923
Tel. +34 91 6622 928
Fax +34 91 6622 931
KESKO AGRO LATVIJA
Vienibas gatve 93
LV-1058
Riga
LATVIA
Tel. +371 7064300
Fax +371 7064301
www.keskomachinery.lv
LITHUANIA
SWEDEN
AN MASKINTEKNIK AB
Företagsvägen 10
95333 Haparanda
SWEDEN
Tel.+46 922 10390
Fax +46 922 10591
Mob.+46 6691686
E-mail:[email protected]
KESKO AGRO UAB LIETUVA
Savanoriu ave. 191
Vilnius
LT-02300
LITHUANIA
Tel. +370 5 2477393
Fax +370 52 2477403
www.keskomachinery.lt
POLAND
PML POLAND
Profesjonalne Maszyny Lesne
Sprzedaz i Serwis Sp. z o.o.
ul. Bitwy Warszawskiej 1920r. nr 3
00-973 Warszawa
POLAND
Tel. +48 22 572 98 50
Fax +48 22 823 96 75
www.proml.pl
PORTUGAL
AUTO SUECO (COIMBRA) LDA
ASC Industria EN 10
Edifício Volvo Apartado 2094
2696-801 S. João Da Talha
PORTUGAL
Tel. +351 21 9946500
Fax +351 21 9946553
RUSSIA
ZEPPELIN RUSSLAND OOO
Sofiyskaya 6, 4th floor
RUSSIA
Tel. +7 (812) 335 11 10
Fax +7 (812) 268 84 82
www.zeppelin.ru
141400, 1 B, Kliazma
Khimkinkskiy region
Moscow area
RUSSIA
Tel. +7 (095) 745 84 70
Fax +7 (095) 745 84 78
OOO NPP LESPROMSERVIS
167610 Russia, Republic of Komi
Syktyvkar, Str. Pervomaiskaja 149
RUSSIA
Tel. +7 8212 28 82 80
Fax +7 8212 28 84 16
Ponsse 2005
45
ADDRESSES
ADDRESSES
ADDRESSES
PONSSE OYJ
Ponssentie 22
74200 VIEREMÄ
FINLAND
Tel. +358 20 768 800
Fax +358 20 768 8690
e-mail: [email protected]
www.ponsse.com
READYQUIP SALES AND
SERVICES LTD.
P.O. Box 2140, Highway 101 W
Timmins, Ontario
CANADA
Tel. +1 705 268 7600
Fax +1 705 268 7707
www.readyquip.com
CHILE
SUBSIDIARIES
SKC MACHINERY S.A.
EPEC OY
PONSSE AB
PONSSE NORTH AMERICA, INC.
Matinkatu 6
60100 Seinäjoki, FINLAND
Tel. +358 6 217 0111
Fax +358 6 217 0110
Västsura
735 91 Surahammar
SWEDEN
Tel. +46 220 399 00
Fax +46 220 399 01
4400 International Lane
Rhinelander, WI 54501
USA
Tel. +1 715 369 4833
Fax +1 715 369 4838
PONSSE AS
PONSSE UK LTD.
Eidskogveien 54
Postboks 1242
N-2206 Kongsvinger
NORWAY
Tel. +47 628 888 70
Fax +47 628 888 78
Unit 3
Broomhouses 1 Industrial Estate
Lockerbie, DG11 2RZ
UNITED KINGDOM
Tel. +44 (0) 1576 203 000
Fax +44 (0) 1576 202 202
PONSSE LATIN AMERICA LTDA.
PONSSÉ S.A.S.
Rua Princeza Isabel de Braganca
No. 235
Helbor Tower, Rooms 307 and 308
Mogi das Cruzes
Sao Paulo
BRASIL
Tel. +55 11 4798 5431
Fax +55 11 4798 5432
ZAC Croix Saint Nicolas
14 Rue de Lorraine - BP39
F-54840 Gondreville
FRANCE
Tel. +33 (0) 3 83 65 12 00
Fax +33 (0) 3 83 65 12 01
EPEC OY, KAJAANI OFFICE
Pakkastie 2
87500 Kajaani, FINLAND
Tel. +358 6 217 0111
Fax +358 20 760 8130
LAKO OY
Ruissalontie 11
20100 Turku, FINLAND
Tel. +358 2 4152 100
Fax +358 2 4690 120
OOO PONSSE
Pl. Konstitutsii 2, office 406
RUSSIA
Tel. +7-812-331 9412
Fax +7-812-718 6547
DEALERS
44
CZECH
KRENEK FOREST SERVICE S.R.O.
Nov_ Nemojov 122
CZ-54461 Nemojov
CZECH
Tel. +420 603 261261
Fax +420 437 834540
ESTONIA
KESKO AGRO EESTI AS
Põrguvälja tee 3A
Pildiküla
75301 Harjumaa
ESTONIA
Tel. +372 6059 100
Fax + 372 6059 101
www.keskomachinery.ee
GERMANY
AUSTRIA
CANADA
GEBRÜDER KONRAD GMBH
A.L.P.A. EQUIPMENT LTD.
Gewerbepark 3
A-8564 Krottendorf
AUSTRIA
Tel. +43 3143 20 517
Fax + 43 3143 20 512
www.konrad-forst.com
258 Drapeau St
P.O. BOX 2532
Balmoral, N.B.
E8E 2W7
CANADA
Tel. +1 506 826 2717
Fax +1 506 826 2753
www.alpaequipment.com
Ponsse 2005
Panamericana Norte Km. 151/2
Casilla 436
V-Correo 21
Santiago
CHILE
Tel. +56 2 64 02222
Fax +56 2 64 02294
HYDROMEC INC.
2921, boul. Wallberg
Dolbeau-Mistassini
Quebec, G8L 1L6
CANADA
Tel. +1 418 276-5831
Fax +1 418 276-0408
Im Heidhorn 24
27389 Lauenbrück
GERMANY
Tel. +49 4267 93020
Fax +49 4267 466
Landwehrstr.4
97215 Uffenheim
GERMANY
Tel. +49 09848 97 999 0
Fax +49 9848 97999 19
LATVIA
SPAIN
ADECOR CONSULTING S. L.
Avenida de la Vega 8-2-2B
28199 Alcobendas
Madrid
SPAIN
Tel. +34 91 622 923
Tel. +34 91 6622 928
Fax +34 91 6622 931
KESKO AGRO LATVIJA
Vienibas gatve 93
LV-1058
Riga
LATVIA
Tel. +371 7064300
Fax +371 7064301
www.keskomachinery.lv
LITHUANIA
SWEDEN
AN MASKINTEKNIK AB
Företagsvägen 10
95333 Haparanda
SWEDEN
Tel.+46 922 10390
Fax +46 922 10591
Mob.+46 6691686
E-mail:[email protected]
KESKO AGRO UAB LIETUVA
Savanoriu ave. 191
Vilnius
LT-02300
LITHUANIA
Tel. +370 5 2477393
Fax +370 52 2477403
www.keskomachinery.lt
POLAND
PML POLAND
Profesjonalne Maszyny Lesne
Sprzedaz i Serwis Sp. z o.o.
ul. Bitwy Warszawskiej 1920r. nr 3
00-973 Warszawa
POLAND
Tel. +48 22 572 98 50
Fax +48 22 823 96 75
www.proml.pl
PORTUGAL
AUTO SUECO (COIMBRA) LDA
ASC Industria EN 10
Edifício Volvo Apartado 2094
2696-801 S. João Da Talha
PORTUGAL
Tel. +351 21 9946500
Fax +351 21 9946553
RUSSIA
Sofiyskaya 6, 4th floor
RUSSIA
Tel. +7 (812) 335 11 10
Fax +7 (812) 268 84 82
www.zeppelin.ru
141400, 1 B, Kliazma
Khimkinkskiy region
Moscow area
RUSSIA
Tel. +7 (095) 745 84 70
Fax +7 (095) 745 84 78
OOO NPP LESPROMSERVIS
167610 Russia, Republic of Komi
Syktyvkar, Str. Pervomaiskaja 149
RUSSIA
Tel. +7 8212 28 82 80
Fax +7 8212 28 84 16
Ponsse 2005
45
FINANCIAL STATEMENTS
Contents
Report by the Board of Directors’ report for
the period 1 January – 31 December 2005
48
The most important exchange rates
51
Consolidated financial statements (IFRS)
-
Profit and loss account
52
-
Balance sheet
53
-
Cash flow statement
54
-
Consolidated statement of changes in
shareholders’ equity
55
-
Notes to the consolidated financial statements
56
-
Financial indicators
74
-
Per share data
75
-
Formulae for financial indicators
76
Parent company’s financial statements (FAS)
-
78
-
Balance sheet
79
-
Parent company cash flow statement
80
-
Notes to the parent company’s accounts
81
Share capital and shares
92
Board of directors’ proposal for the disposal of profit
95
Auditor’s report
95
Ponsse Oyj’s financial statements have been prepared in accordance with the International Financial Reporting Standards, IFRS. The financial statements of the parent company have been prepared in accordance with the Finnish Accounting Standards, FAS, which the company conformed with prior to the 2005 financial period. The notes constitute an essential part of the financial statements. A sum of single figures may differ from the totals presented in the financial statements, as all figures have been rounded.
46
Ponsse 2005
Ponsse 2005
47
Contents
Report by the Board of Directors’ report for
the period 1 January – 31 December 2005
48
51
Consolidated financial statements (IFRS)
-
52
-
Balance sheet
53
-
Cash flow statement
54
-
Consolidated statement of changes in
shareholders’ equity
55
-
56
-
74
-
Per share data
75
-
76
Parent company’s financial statements (FAS)
-
78
-
Balance sheet
79
-
80
-
81
92
95
Auditor’s report
95
Ponsse Oyj’s financial statements have been prepared in accordance with the International Financial Reporting Standards, IFRS. The financial statements of the parent company have been prepared in accordance with the Finnish Accounting Standards, FAS, which the company conformed with prior to the 2005 financial period. The notes constitute an essential part of the financial statements. A sum of single figures may differ from the totals presented in the financial statements, as all figures have been rounded.
46
Ponsse 2005
Ponsse 2005
47
Board of Directors’ report for the period
1 January – 31 December 2005
General
Ponsse Group’s turnover and profit developed favourably in 2005. Consolidated turnover increased to EUR 226.1 million (EUR 177.9 million in 2004) and
the operating profit to EUR 29.1 million (19.7 million in 2004). Earnings per
share were EUR 1.40 (EUR 0.97), and
Equity ratio stood at 47.6 per cent (36.0
per cent).
Turnover and profit
Consolidated turnover rose by 27.1 per
cent year on year, to EUR 226.1 million (EUR 177.9 million). This highly
favourable development was due, in particular, to strong growth in international
operations.
International business operations accounted for 65.4 per cent (62.0 per cent)
of turnover. The sales were regionally
distributed as follows: Nordic countries,
53.6 per cent (54.9 per cent); the rest of
Europe, 31.4 per cent (30.0 per cent);
North and South America, 14.7 per cent
(15.1 per cent); and other countries, 0.3
per cent (0.0 per cent).
The order intake for the accounting period totalled EUR 236.9 million (EUR
189.3 million), while period-end order
books were valued at EUR 54.9 million
(EUR 44.4 million). The order books included dealers’ minimum purchase commitments, based on previous practice.
Consolidated operating profit for the accounting period came to EUR 29.1 million (EUR 19.7 million), up 47.5 per cent
on the previous year, accounting for 12.8
per cent of consolidated turnover (11.1
per cent). Return on investment (ROI)
stood at 37.7 per cent (29.5 per cent).
The profit after extraordinary items was
EUR 28.1 million (2004, EUR 19.2 mil-
48
Ponsse 2005
lion). Income and expenses resulting
from currency risk hedging were included in financial items. Extraordinary items
amounted to EUR -1 thousand (2004,
no extraordinary items).
Profit for the financial period totalled EUR
19.6 million (2004, EUR 13.5 million).
Earnings per share were EUR 1.40 (EUR
0.97).
Balance sheet and
financial position
servicing services for PONSSE machines
in Estonia, Latvia and Lithuania.
The range of operations of our Northern
American subsidiary was expanded to include responsibility for providing support to Ponsse’s dealers in Canada as well
as the comprehensive development of the
maintenance and distribution network
in North America. Following the expansion of operations, the business name of
Ponsse’s subsidiary Ponsse USA, Inc. was
changed to Ponsse North America, Inc.
At the end of the accounting period the
consolidated balance sheet total amounted to EUR 108.3 million (EUR 97.5
million). Interest-bearing liabilities totalled EUR 24.4 million (EUR 32.3 million) and net liabilities EUR 11.7 million
(EUR 16.3 million). Equity ratio stood
at 47.6 per cent (36.0 per cent). Cash in
hand and at banks came to EUR 12.3
million (EUR 15.7 million). The Group’s
liquidity remained at a good level during
the financial period , despite a large-scale
investment programme. To maintain financial flexibility and balance seasonal
fluctuations, the company uses finance
credit agreements of which EUR 37.3 remained unused at the end of the financial
period.
Capital expenditure and R&D
Reported cash flow from business operations totalled EUR 18.4 million (EUR
22.0 million), while that from investing
activities was EUR -11.1 million (EUR
-8.9 million).
R&D expenses totalled EUR 3.7 million
(EUR 3.7 million). The amount of activated R&D expenses during the financial
period was EUR 461 thousand (EUR 329
thousand).
The external contingent liabilities amounted to EUR 8.5 million (EUR 8.7 million)
at the end of the accounting period.
Quality and environment
Distribution network
In December 2005 Ponsse signed a distribution agreement with Konekesko
Ltd. According to the agreement, Kesko
Group’s companies will provide sales and
The most significant capital expenditure
during the financial period came from
the construction of a customer service
centre in Vieremä. The company also invested heavily in increasing the automation rate of the Vieremä plant and in the
equipment of the new assembly plant. In
September the company’s financial administration moved to the new premises
constructed at the Vieremä plant. The remainder comprised routine replacement
and maintenance investments.
Capital expenditure totalled EUR 11.2
million (EUR 9.0 million) during the financial period.
Ponsse has committed to comply with
the certified ISO 9001:2000 quality standard, ISO 14001 environment
management systems and standard, and
OHSAS 18001 Occupational Health
and Safety standard. The ISO 9001 audit was conducted during the accounting
period by DNV.
The company focused heavily on developing quality and quality leadership
during the accounting period. The focal
points were the systemisation of quality
leadership methods, and the development of reporting and operational systems. The quality circle activities and internal audits were used throughout the
year and provided good results.
According to Ponsse’s environmental
policy, the company aims to develop and
manufacture products with the smallest
possible load on the environment in use.
The environmental aspects are taken into consideration in designing, decisionmaking and implementation on all levels
of the organisation.
The company monitors and complies
with environment-related legislation in
all operations. Changes in the legislation
are constantly monitored and actions are
taken if the changes so require.
Changes in group structure
In July Ponsse acquired a 92 per cent stake
in Lako Oy of Turku. The company manufactures and markets harvesting heads. In
December 2005 Ponsse Oyj acquired an 8
per cent stake in Epec Oy of Seinäjoki. As a
result of the acquisition, Ponsse has 100%
ownership of the company’s shares.
Two new subsidiaries were established during the accounting period. OOO Ponsse’s
head office is in St. Petersburg. The company will sell and service Ponsse forest machines, and develop and provide support
to the dealer network in Russia. The other
subsidiary established during the accounting period, Ponsse Latin America Indústria
de Máquinas Florestais Ltda, conducts its
business in Brazil. The company head offices are in Mogi das Cruzes. The company
will sell and service Ponsse forest machines,
and provide support to the dealer network
in South America.
Ponsse 2005
49
Board of Directors’ report for the period
1 January – 31 December 2005
General
Ponsse Group’s turnover and profit developed favourably in 2005. Consolidated turnover increased to EUR 226.1 million (EUR 177.9 million in 2004) and
the operating profit to EUR 29.1 million (19.7 million in 2004). Earnings per
share were EUR 1.40 (EUR 0.97), and
Equity ratio stood at 47.6 per cent (36.0
per cent).
Turnover and profit
Consolidated turnover rose by 27.1 per
cent year on year, to EUR 226.1 million (EUR 177.9 million). This highly
favourable development was due, in particular, to strong growth in international
operations.
International business operations accounted for 65.4 per cent (62.0 per cent)
of turnover. The sales were regionally
distributed as follows: Nordic countries,
53.6 per cent (54.9 per cent); the rest of
Europe, 31.4 per cent (30.0 per cent);
North and South America, 14.7 per cent
(15.1 per cent); and other countries, 0.3
per cent (0.0 per cent).
The order intake for the accounting period totalled EUR 236.9 million (EUR
189.3 million), while period-end order
books were valued at EUR 54.9 million
(EUR 44.4 million). The order books included dealers’ minimum purchase commitments, based on previous practice.
Consolidated operating profit for the accounting period came to EUR 29.1 million (EUR 19.7 million), up 47.5 per cent
on the previous year, accounting for 12.8
per cent of consolidated turnover (11.1
per cent). Return on investment (ROI)
stood at 37.7 per cent (29.5 per cent).
The profit after extraordinary items was
EUR 28.1 million (2004, EUR 19.2 mil-
48
Ponsse 2005
lion). Income and expenses resulting
from currency risk hedging were included in financial items. Extraordinary items
amounted to EUR -1 thousand (2004,
no extraordinary items).
Profit for the financial period totalled EUR
19.6 million (2004, EUR 13.5 million).
Earnings per share were EUR 1.40 (EUR
0.97).
Balance sheet and
financial position
servicing services for PONSSE machines
in Estonia, Latvia and Lithuania.
The range of operations of our Northern
American subsidiary was expanded to include responsibility for providing support to Ponsse’s dealers in Canada as well
as the comprehensive development of the
maintenance and distribution network
in North America. Following the expansion of operations, the business name of
Ponsse’s subsidiary Ponsse USA, Inc. was
changed to Ponsse North America, Inc.
At the end of the accounting period the
consolidated balance sheet total amounted to EUR 108.3 million (EUR 97.5
million). Interest-bearing liabilities totalled EUR 24.4 million (EUR 32.3 million) and net liabilities EUR 11.7 million
(EUR 16.3 million). Equity ratio stood
at 47.6 per cent (36.0 per cent). Cash in
hand and at banks came to EUR 12.3
million (EUR 15.7 million). The Group’s
liquidity remained at a good level during
the financial period , despite a large-scale
investment programme. To maintain financial flexibility and balance seasonal
fluctuations, the company uses finance
credit agreements of which EUR 37.3 remained unused at the end of the financial
period.
Capital expenditure and R&D
Reported cash flow from business operations totalled EUR 18.4 million (EUR
22.0 million), while that from investing
activities was EUR -11.1 million (EUR
-8.9 million).
R&D expenses totalled EUR 3.7 million
(EUR 3.7 million). The amount of activated R&D expenses during the financial
period was EUR 461 thousand (EUR 329
thousand).
The external contingent liabilities amounted to EUR 8.5 million (EUR 8.7 million)
at the end of the accounting period.
Quality and environment
Distribution network
In December 2005 Ponsse signed a distribution agreement with Konekesko
Ltd. According to the agreement, Kesko
Group’s companies will provide sales and
The most significant capital expenditure
during the financial period came from
the construction of a customer service
centre in Vieremä. The company also invested heavily in increasing the automation rate of the Vieremä plant and in the
equipment of the new assembly plant. In
September the company’s financial administration moved to the new premises
constructed at the Vieremä plant. The remainder comprised routine replacement
and maintenance investments.
Capital expenditure totalled EUR 11.2
million (EUR 9.0 million) during the financial period.
Ponsse has committed to comply with
the certified ISO 9001:2000 quality standard, ISO 14001 environment
management systems and standard, and
OHSAS 18001 Occupational Health
and Safety standard. The ISO 9001 audit was conducted during the accounting
period by DNV.
The company focused heavily on developing quality and quality leadership
during the accounting period. The focal
points were the systemisation of quality
leadership methods, and the development of reporting and operational systems. The quality circle activities and internal audits were used throughout the
year and provided good results.
According to Ponsse’s environmental
policy, the company aims to develop and
manufacture products with the smallest
possible load on the environment in use.
The environmental aspects are taken into consideration in designing, decisionmaking and implementation on all levels
of the organisation.
The company monitors and complies
with environment-related legislation in
all operations. Changes in the legislation
are constantly monitored and actions are
taken if the changes so require.
Changes in group structure
In July Ponsse acquired a 92 per cent stake
in Lako Oy of Turku. The company manufactures and markets harvesting heads. In
December 2005 Ponsse Oyj acquired an 8
per cent stake in Epec Oy of Seinäjoki. As a
result of the acquisition, Ponsse has 100%
Two new subsidiaries were established during the accounting period. OOO Ponsse’s
head office is in St. Petersburg. The company will sell and service Ponsse forest machines, and develop and provide support
to the dealer network in Russia. The other
subsidiary established during the accounting period, Ponsse Latin America Indústria
de Máquinas Florestais Ltda, conducts its
business in Brazil. The company head offices are in Mogi das Cruzes. The company
will sell and service Ponsse forest machines,
and provide support to the dealer network
in South America.
Ponsse 2005
49
Otherwise, the group structure remained the same during the financial
period. The other subsidiaries included in the Ponsse Group are Ponsse AB,
Sweden; Ponsse AS, Norway; Ponssé
S.A.S, France; Ponsse UK Ltd, Great
Britain; and Ponsse North America,
Inc., the United States of America. Sunit Oy in Kajaani is Ponsse’s associated company, of which Ponsse has 34%
ownership.
Personnel
The Group had an average staff of 729
(607) during the financial period and
employed 770 (663) people at the financial period-end, 631 (553) of whom
worked in Finland and 139 (110) in
other countries.
Management and auditors
Ponsse Oyj’s Board of Directors comprised six members during the accounting period: Nils Hagman, Ilkka Kylävainio, Seppo Remes, Mirja Ryynänen,
Einari Vidgrén and Juha Vidgrén. The
Chairman of the Board was Einari
Vidgrén and Juha Vidgrén acted as the
deputy chairman.
The Board of Directors convened 12
times during the accounting period.
Board members assiduously attended
the meetings, whose attendance rate
was 88.9 per cent.
President and CEO during the accounting period was Arto Tiitinen, MBA,
with Mikko Paananen, LLM, CFO,
acting as deputy.
Paula Oksman, M.A., started as HR
Director, Principal of the Ponsse Academy and a member of the Management
Team in August 2005. Seppo Taatila, M.Sc. (Eng), will start as Director
of Technology and Engineering and
50
Ponsse 2005
a member of the Management Team
during 2006. He will replace Veikko
Rintamäki, M.Sc. (Eng), who resigned
from his position in January 2006. Prior to Mr. Taatila assuming the position,
Arto Tiitinen, CEO, will oversee the
technology and engineering activities in
addition to his own responsibilities.
The Annual General Meeting of 15
March 2005 re-appointed Ernst &
Young Oy as the company’s auditors,
with Heikki Laitinen, APA, as the principal auditor.
Resources
The Board of Directors has confirmed
the administration principles, which
can be viewed on Ponsse’s website at
www.ponsse.com/english/investors.
These principles are based on the Corporate Governance recommendation for
listed companies issued by HEX Helsinki Exchanges, the Central Chamber
of Commerce and the Confederation of
Finnish Industry and Employers.
Adoption of IFRS standards
Ponsse Group has applied International
Financial Reporting Standards (IFRS)
to its financial reporting as of 1 January
2005. The first IFRS-compliant annual
financial statement was drawn up for
the accounting financial period 2005.
Prior to the adoption of IFRS, Ponsse
Oyj’s consolidated financial statements
have been prepared according to Finnish Accounting Standards (FAS).
Ponsse Oyj issued three IFRS-compliant Interim Reports during the financial
period.
Events after the period
In January 2006 Ponsse acquired an 8
per cent stake in Lako Oy of Turku. Fol-
lowing the acquisition, Ponsse has 100%
Outlook for the future
forecasts that the result for the current
accounting financial period will outperform that of the previous year.
During the course of the year, logging
volumes and industrial consumption of
wood are expected to increase over the
previous year. Logging volumes show
strong growth in South America in particular. The company estimates that the
proportional share of cut-to-length harvesting in the total volume of timber
harvesting will increase in comparison
with other harvesting methods. The development is expected to be especially
rapid in Russia.
During the course of 2006 Ponsse will
invest heavily in expanding its distribution and maintenance network and, in
the second quarter of 2006, start industrial manufacture of harvester heads in
Brazil. The company may supplement
its organic growth with corporate acquisitions and arrangements if they support
the company’s strategy and strengthen
its market value and position as well as
competitiveness and profitability.
Considering the general prospects for
the forest sector, the total value of the
order book and the ongoing business
development initiatives, the company
31.12.2005
Average
exchange rate
2005
31.12.2004
Average
exchange rate
2004
SEK
9,38850
9,27826
9,02060
9,12035
NOK
7,98500
8,02404
8,23650
8,37022
GBP
0,68530
0,68473
0,70505
0,68128
USD
1,17970
1,24753
1,36210
1,24745
BRL
2,76130
3,04836
RUB
33,92000
34,99642
Ponsse 2005
51
Otherwise, the group structure remained the same during the financial
period. The other subsidiaries included in the Ponsse Group are Ponsse AB,
Sweden; Ponsse AS, Norway; Ponssé
S.A.S, France; Ponsse UK Ltd, Great
Britain; and Ponsse North America,
Inc., the United States of America. Sunit Oy in Kajaani is Ponsse’s associated company, of which Ponsse has 34%
ownership.
Personnel
The Group had an average staff of 729
(607) during the financial period and
employed 770 (663) people at the financial period-end, 631 (553) of whom
worked in Finland and 139 (110) in
other countries.
Management and auditors
Ponsse Oyj’s Board of Directors comprised six members during the accounting period: Nils Hagman, Ilkka Kylävainio, Seppo Remes, Mirja Ryynänen,
Einari Vidgrén and Juha Vidgrén. The
Chairman of the Board was Einari
Vidgrén and Juha Vidgrén acted as the
deputy chairman.
The Board of Directors convened 12
times during the accounting period.
Board members assiduously attended
the meetings, whose attendance rate
was 88.9 per cent.
President and CEO during the accounting period was Arto Tiitinen, MBA,
with Mikko Paananen, LLM, CFO,
acting as deputy.
Paula Oksman, M.A., started as HR
Director, Principal of the Ponsse Academy and a member of the Management
Team in August 2005. Seppo Taatila, M.Sc. (Eng), will start as Director
of Technology and Engineering and
50
Ponsse 2005
a member of the Management Team
during 2006. He will replace Veikko
Rintamäki, M.Sc. (Eng), who resigned
from his position in January 2006. Prior to Mr. Taatila assuming the position,
Arto Tiitinen, CEO, will oversee the
technology and engineering activities in
addition to his own responsibilities.
The Annual General Meeting of 15
March 2005 re-appointed Ernst &
Young Oy as the company’s auditors,
with Heikki Laitinen, APA, as the principal auditor.
Resources
The Board of Directors has confirmed
the administration principles, which
can be viewed on Ponsse’s website at
www.ponsse.com/english/investors.
These principles are based on the Corporate Governance recommendation for
listed companies issued by HEX Helsinki Exchanges, the Central Chamber
of Commerce and the Confederation of
Finnish Industry and Employers.
Adoption of IFRS standards
Ponsse Group has applied International
Financial Reporting Standards (IFRS)
to its financial reporting as of 1 January
2005. The first IFRS-compliant annual
financial statement was drawn up for
the accounting financial period 2005.
Prior to the adoption of IFRS, Ponsse
Oyj’s consolidated financial statements
have been prepared according to Finnish Accounting Standards (FAS).
Ponsse Oyj issued three IFRS-compliant Interim Reports during the financial
period.
Events after the period
In January 2006 Ponsse acquired an 8
per cent stake in Lako Oy of Turku. Fol-
lowing the acquisition, Ponsse has 100%
Outlook for the future
forecasts that the result for the current
accounting financial period will outperform that of the previous year.
During the course of the year, logging
volumes and industrial consumption of
wood are expected to increase over the
previous year. Logging volumes show
strong growth in South America in particular. The company estimates that the
proportional share of cut-to-length harvesting in the total volume of timber
harvesting will increase in comparison
with other harvesting methods. The development is expected to be especially
rapid in Russia.
During the course of 2006 Ponsse will
invest heavily in expanding its distribution and maintenance network and, in
the second quarter of 2006, start industrial manufacture of harvester heads in
Brazil. The company may supplement
its organic growth with corporate acquisitions and arrangements if they support
the company’s strategy and strengthen
its market value and position as well as
competitiveness and profitability.
Considering the general prospects for
the forest sector, the total value of the
order book and the ongoing business
development initiatives, the company
31.12.2005
Average
exchange rate
2005
31.12.2004
Average
exchange rate
2004
SEK
9,38850
9,27826
9,02060
9,12035
NOK
7,98500
8,02404
8,23650
8,37022
GBP
0,68530
0,68473
0,70505
0,68128
USD
1,17970
1,24753
1,36210
1,24745
BRL
2,76130
3,04836
RUB
33,92000
34,99642
Ponsse 2005
51
CONSOLIDATED FINANCIAL STATEMENTS (IFRS)
Balance sheet
2005
2004
TEUR
TEUR
2
226,095
177,934
730
968
4
1,326
1,453
-139,304
-113,587
-34,317
-26,917
-4,041
-3,089
-21,437
29,051
Note(1
Turnover
Increase (+)/decrease (-) in stocks of finished goods and work in progress
Other operating income
Raw materials and services
Staff costs
7, 28
Depreciation
6
Other operating expenses
5, 8
Operating profit
Share of results of associated companies
Financial income and expenses
9
Result before extraordinary items
Extraordinary items
Result after extraordinary items
Direct taxes
Minority interest
Profit for the period
1) The note refers to the Notes to the Accounts on pages 56–73.
10
ASSETS
Note(1
2005
2004
TEUR
TEUR
Fixed and other non-current assets
Intangible assets
13
2,652
2,426
Goodwill
13
3,773
3,466
Property, plant and equipment
12
24,270
18,095
Financial assets
15
35
25
Holdings in associated companies
14
1,013
829
-17,063
Non-current receivables
16
103
107
19,700
Deferred tax assets
537
540
32,383
25,488
285
251
-1,225
-778
28,111
19,172
-1
0
28,110
19,172
-8,480
-5,630
0
-11
19,629
13,532
Total fixed and other non-current assets
Current assets
Stocks
18
45,161
36,381
Trade receivables
19
14,782
19,228
Other current receivables
19
3,594
717
Marketable securities
20
2
0
Cash in hand and at banks
20
Total current assets
TOTAL ASSETS
CAPITAL AND RESERVES, AND LIABILITIES
Note(1
Capital and reserves
21
Share capital
Other reserves
Translation differences
12,339
15,706
75,879
72,032
108,262
97,520
2005
2004
TEUR
TEUR
7,000
7,000
19
20
-442
-838
Retained earnings
44,811
28,424
Capital and reserves owned by parent company shareholders
51,389
34,606
0
419
51,389
35,025
Minority interest
Total capital and reserves
Non-current creditors
Interest-bearing liabilities
24
18,953
23,937
Deferred tax liabilities
17
1,142
1,131
Other non-current creditors
23
Total non-current creditors
359
336
20,453
25,404
Current creditors
24
5,444
8,353
Provisions
23
6,324
4,153
1,216
2,343
Tax liabilities for the period
Trade creditors and other current creditors
Total current creditors
TOTAL CAPITAL AND RESERVES, AND LIABILITIES
24, 25
23,436
22,243
36,420
37,091
108,262
97,520
52
Ponsse 2005
Ponsse 2005
53
Balance sheet
2005
2004
TEUR
TEUR
2
226,095
177,934
730
968
4
1,326
1,453
-139,304
-113,587
-34,317
-26,917
-4,041
-3,089
-21,437
29,051
Note(1
Turnover
Staff costs
7, 28
Depreciation
6
5, 8
Operating profit
Share of results of associated companies
9
Extraordinary items
Direct taxes
Minority interest
10
ASSETS
Note(1
2005
2004
TEUR
TEUR
Fixed and other non-current assets
Intangible assets
13
2,652
2,426
Goodwill
13
3,773
3,466
12
24,270
18,095
Financial assets
15
35
25
14
1,013
829
-17,063
16
103
107
19,700
Deferred tax assets
537
540
32,383
25,488
285
251
-1,225
-778
28,111
19,172
-1
0
28,110
19,172
-8,480
-5,630
0
-11
19,629
13,532
Total fixed and other non-current assets
Current assets
Stocks
18
45,161
36,381
Trade receivables
19
14,782
19,228
19
3,594
717
Marketable securities
20
2
0
20
TOTAL ASSETS
Note(1
21
Share capital
Other reserves
12,339
15,706
75,879
72,032
108,262
97,520
2005
2004
TEUR
TEUR
7,000
7,000
19
20
-442
-838
Retained earnings
44,811
28,424
Capital and reserves owned by parent company shareholders
51,389
34,606
0
419
51,389
35,025
Minority interest
24
18,953
23,937
17
1,142
1,131
23
359
336
20,453
25,404
Current creditors
24
5,444
8,353
Provisions
23
6,324
4,153
1,216
2,343
Tax liabilities for the period
TOTAL CAPITAL AND RESERVES, AND LIABILITIES
24, 25
23,436
22,243
36,420
37,091
108,262
97,520
52
Ponsse 2005
Ponsse 2005
53
Cash flow statement
Consolidated statement of changes in shareholders’ equity
2005
2004
TEUR
TEUR
19,629
13,532
1,225
778
Effect of IFRS adoption
Adjusted capital and
reserves at 1 Jan. 2004
Attributable to equity holders of the parent company
TEUR
Share capital
Share premium
account and
other reserves
Translation
differences
Retained
earnings
Total
Minority
interest
Capital and
reserves,
total
3,500
2,562
-646
37,678
43,094
0
43,094
Business operations:
Adjustments:
Share of the results of associated companies
Depreciation
Deferred taxes
Income taxes
Other adjustments
Cash flow before change in working capital
-285
-251
4,041
3,089
22
-227
8,458
5,857
256
197
33,346
22,975
Change in working capital:
Capital and reserves at
31 Dec. 2003
0
0
0
-957
-957
0
-957
3,500
2,562
-646
36,721
42,137
0
42,137
Effect of changes in tax rate
0
0
0
80
80
0
80
0
0
-192
61
-131
0
-131
Net income recognised
directly in equity
0
0
-192
141
-51
0
-51
Result for the period
0
0
0
13,521
13,521
11
13,532
Total recognised income
and expenses
0
0
-192
13,662
13,469
11
13,480
Increase (-)/decrease (+) in current non-interest-bearing receivables
1,501
-2,145
Subsidiary acquisition
0
0
0
0
0
408
408
Increase (-)/decrease (+) in stocks
-9,052
-3,778
Dividends paid
0
0
0
-21,000
-21,000
0
-21,000
Increase (+)/decrease (-) in current non-interest-bearing creditors
1,279
8,658
Share issue
3,500
-2,542
0
-958
0
0
0
Change in provisions for liabilities and charges
2,171
1,869
7,000
20
-838
28,425
34,606
419
35,025
Interest received
277
227
31 Dec 2004
Interest paid
-932
-661
0
0
396
-443
-47
0
-47
directly in equity
0
0
396
-443
-47
0
-47
Other financial items
-656
-312
Income taxes paid
-9,517
-4,784
Cash flow before extraordinary items
18,417
22,049
Net cash flow from extraordinary items in business operations
Net cash flow from business operations (A)
0
0
18,417
22,049
0
0
0
19,629
19,629
0
19,629
and expenses
0
0
396
19,186
19,583
0
19,583
Dividends paid
0
0
0
-2,800
-2,800
0
-2,800
Change in minority interest
Investments:
Investments in tangible and and intangible assets
-11,209
-9,029
Proceeds from sales of tangible and intangible assets
0
0
Loans granted
0
0
-11
0
Repayment of loan receivables
0
0
Proceeds from sales of other investments
0
0
Investment in other assets
Interest received
Dividends received
Cash outflow from investing activities (B)
0
0
101
85
-11,119
-8,944
31 Dec. 2005
0
0
0
0
0
-419
-419
7,000
20
-442
44,811
51,389
0
51,389
Financing:
Share issue
0
0
Acquisition of own shares
0
0
Sales of own shares
0
0
Withdrawal of current loans
0
3,673
Repayment of current loans
-2,677
0
0
77
-4,961
9,444
-231
-269
Increase (-)/decrease (+) in current interest-bearing liabilities
Withdrawal/repayment of non-current loans
Payment of finance lease liabilities, IAS 17, IAS 18
Increase (-)/decrease (+) in non-current receivables
Paid dividends
Net cash outflow from financing (C)
Increase (+)/decrease (-) in liquid assets (A+B+C)
54
4
111
-2,800
-21,000
-10,665
-7,964
-3,367
5,141
Liquid assets at 1 January
15,706
10,565
Liquid assets at 31 December
12,339
15,706
Ponsse 2005
Ponsse 2005
55
Cash flow statement
Consolidated statement of changes in shareholders’ equity
2005
2004
TEUR
TEUR
19,629
13,532
1,225
778
Effect of IFRS adoption
Adjusted capital and
reserves at 1 Jan. 2004
Attributable to equity holders of the parent company
TEUR
Share capital
Share premium
account and
other reserves
Translation
differences
Retained
earnings
Total
Minority
interest
Capital and
reserves,
total
3,500
2,562
-646
37,678
43,094
0
43,094
Adjustments:
Share of the results of associated companies
Depreciation
Deferred taxes
Income taxes
Other adjustments
-285
-251
4,041
3,089
22
-227
8,458
5,857
256
197
33,346
22,975
31 Dec. 2003
0
0
0
-957
-957
0
-957
3,500
2,562
-646
36,721
42,137
0
42,137
Effect of changes in tax rate
0
0
0
80
80
0
80
0
0
-192
61
-131
0
-131
directly in equity
0
0
-192
141
-51
0
-51
0
0
0
13,521
13,521
11
13,532
and expenses
0
0
-192
13,662
13,469
11
13,480
1,501
-2,145
0
0
0
0
0
408
408
-9,052
-3,778
Dividends paid
0
0
0
-21,000
-21,000
0
-21,000
1,279
8,658
Share issue
3,500
-2,542
0
-958
0
0
0
Change in provisions for liabilities and charges
2,171
1,869
7,000
20
-838
28,425
34,606
419
35,025
Interest received
277
227
31 Dec 2004
Interest paid
-932
-661
0
0
396
-443
-47
0
-47
directly in equity
0
0
396
-443
-47
0
-47
-656
-312
Income taxes paid
-9,517
-4,784
18,417
22,049
0
0
18,417
22,049
0
0
0
19,629
19,629
0
19,629
and expenses
0
0
396
19,186
19,583
0
19,583
Dividends paid
0
0
0
-2,800
-2,800
0
-2,800
Change in minority interest
Investments:
Investments in tangible and and intangible assets
-11,209
-9,029
0
0
Loans granted
0
0
-11
0
Repayment of loan receivables
0
0
Proceeds from sales of other investments
0
0
Investment in other assets
Interest received
Dividends received
0
0
101
85
-11,119
-8,944
31 Dec. 2005
0
0
0
0
0
-419
-419
7,000
20
-442
44,811
51,389
0
51,389
Financing:
Share issue
0
0
Acquisition of own shares
0
0
Sales of own shares
0
0
0
3,673
-2,677
0
0
77
-4,961
9,444
-231
-269
Increase (-)/decrease (+) in current interest-bearing liabilities
Withdrawal/repayment of non-current loans
Payment of finance lease liabilities, IAS 17, IAS 18
Paid dividends
54
4
111
-2,800
-21,000
-10,665
-7,964
-3,367
5,141
15,706
10,565
12,339
15,706
Ponsse 2005
Ponsse 2005
55
1. ACCOUNTING POLICIES
SEGMENTS
CURRENT ASSETS
Ponsse Group designs, manufactures, markets,
and services environmentally-friendly and efficient cut-to-length method forest machines
and harvesting related information technology
solutions.
The geographical segment is used as the primary, and the business segment as the secondary segment for segment based reporting. The
geographical segments are the Nordic countries, the rest of Europe, and North and South
America. The business segments include machines sales and servicing services.
Current assets are valued at the direct manufacturing or acquisition cost, the replacement cost
or likely selling price, whichever is the lower.
The standard cost method is used as a basis for
calculating the value of materials and supplies
in stock.
TRANSLATION DIFFERENCES
Leases contracts are categorised as finance lease
contracts if the majority of risks and benefits associated with ownership of property or goods
are transferred onto the company. Assets rented on finance lease agreements, less depreciation according to plan, are booked in property,
plant, and equipment; and obligations resulting
from the agreement on interest-bearing liabilities. Finance lease contracts are recorded on the
balance sheet and valued at the market value of
the asset at the start date of the contract or at
the current value of minimum rents if it is lower than the market value. Regular depreciations
are recorded on goods acquired by finance lease
contracts.
The Group’s parent company is Ponsse Oyj
- a Finnish public limited company established in accordance with Finnish legislation. The parent company’s head office is in
Vieremä. Ponsse Oyj’s shares have been listed
on the Helsinki Stock Exchange since 1995.
BASIS OF CONSOLIDATION
Ponsse Oyj’s consolidated financial statements
have been prepared in accordance with the
International Financial Reporting Standards
(IFRS), and the standards and interpretations
valid on 31 December 2005. The information in the consolidated financial statements is
given in TEUR (EUR 1,000), and it is based
on original acquisition costs, if not otherwise
stated in the accounting policies. The financial
statements have been presented in accordance
with the profit and loss account by type of expense.
The Group adopted the IFRS accounting policies at the beginning of 2005. The adoption
to IFRS took place on1 January 2004. Prior
to the adoption, the Group complied with
the Finnish Accounting Standards (FAS).
All comparative information from 2004 has
been converted into an IFRS-compliant form.
The notes to the consolidated financial statements are also in compliance with the Finnish accounting and organisational legislation.
CONSOLIDATION PRINCIPLES
The consolidated financial statements include
the financial statements of the parent company
Ponsse Oyj and the subsidiaries it controls, and
also the financial statements of the associated
company consolidated using the equity method. More detailed information on the Group’s
companies and associated companies has been
presented later in section “28. Group companies” of Notes to the financial statements.
The consolidated financial statements have
been prepared using cost method. The acquisition cost in excess of the shareholders’ equity
of each subsidiary at the date of acquisition is
shown in the balance sheet under goodwill.
Intra-group transactions, balances and creditors, unrealised margins on deliveries, and
intra-group distribution of profit have been
eliminated. The profit for the accounting period shall be distributed to parent company
shareholders and minority shareholders. Minority interests have been separated from the
Group’s capital and reserves and profil are presented as a separate item.
The income statement include the Group’s
share of results of associated companies. The
Group’s pro rata share of the shareholders’ equity in associated companies, adjusted by any
changes in working capital since the share acquisition, is included in the shares in participating interests in the balance sheet.
56
Ponsse 2005
Foreign currency monetary items are recorded using the rates prevailing at the transaction
date, and any receivables and liabilities on the
balance sheet are translated into the financial
statements at the closing rate. All resulting
translation differences are recorded in the financial items of the accounts.
The profit and loss accounts of non-domestic
Group companies have been translated into
euro at the average rate of the accounting period and the balance sheets at the end rate of
the report year. The resulting translation differences in the profit and loss account and the
balance sheet, as well as in the shareholders’
capital and reserves, are shown as a separate
item in the shareholders’ capital and reserves.
RENEVUE RECOGNITION
Renevues are recognised upon legal completion. Indirect taxes and given discounts, among
others, have been deducted from the sales revenue before calculating the turnover. Exchange
rate differences in sales are recorded in the financial items.
INTANGIBLE ASSETS
Goodwill
The goodwill corresponds to the acquisition
cost in excess of the Group’s share of the current market value of the company’s net assets
at the date of acquisition.
No regular depreciations are recorded on
goodwill, but instead they are tested annually
for possible reduction in value.
Research and development expenses
Development expenses that fulfil the activation
requirements have been booked under intangible assets on the balance sheet, once the product is technically feasible, can be utilised commercially, and is expected to yield commercial
benefits in the future. Depreciations on goods
are recorded over their economic life. Research
expenses are recorded directly as annual expenses.
PROPERTY, PLANT AND EQUIPMENT
The property, plant, and equipment are booked
in the balance sheet at the direct acquisition
cost less depreciation according to plan, which
has been calculated on a straight-line basis over
the expected economic life. Depreciation times
are:
Intangible rights .................................... 5 years
Other long-term expense items ..........3-5 years
Buildings and structures ......................20 years
Plant and equipment ........................3-10 years
LEASES CONTRACTS
REDUCTION IN VALUE
The booking values of assets are evaluated at the
closing date for any indications of reduction in
value. If indications are found, the recoverable
amount of the assets is defined.
Loss on reduction in value is recorded in the
profit and loss account, if the balance sheet value of the assets exceeds the recoverable amount.
If the estimated recoverable amounts show a
change for the better, the loss on reduction in
value for property, plant and equipment, and
for other intangible assets, except goodwill, is reverted. However, the loss on reduction in value
is reverted to no more than the booking value
the asset would have had if the reduction in value had not been recorded in the first place. Reduction in value on goodwill is never reverted.
TRADE RECEIVABLES AND
OTHER RECEIVABLES
Trade receivables and other receivables are
booked using original values. Any uncollectible
credit losses are booked as expense items.
PENSION SYSTEMS
Statutory pension cover for Group employees
has been arranged through pension insurance
companies and there are no uncovered pension
liabilities.
PROVISIONS
Likely guarantee expenses in respect of products
delivered are booked under provisions for liabilities and charges. Other mandatory provisions
are associated with expenses and losses allocated
for the previous accounting period.
LIQUID ASSETS
Liquid assets include cash in hand and at banks,
and other liquid investments with a maturity of
less than three months.
INCOME TAXES
The tax expense on the profit and loss account
consists of taxes based on taxable income and
calculated tax. Income taxes include taxes corresponding with the Group companies’ results for
the accounting period and calculated based on
the tax legislation prevailing in each company’s
domicile. Tax is adjusted using any taxes from
previous periods if there are any such items.
Deferred taxes are calculated on all temporary
differences between the booking value and taxable value. The biggest temporary differences
deviate from depreciations made on property,
plant and equipment, unbooked taxable losses,
and appreciations made on market values at the
time of the acquisition. Non-deductible depreciation in value on goodwill is not booked in
the deferred tax, and retained earnings of subsidiaries are not accounted for deferred taxes
because it is probable that the temporary difference will not be reversed in the foreseeable
future.
Deferred tax liabilities and assets are calculated
for all taxable temporary differences using the
confirmed tax rate for the following years.
The balance sheet includes the calculated tax liability in its entirety and the amount of calculated tax assets the company expects to receive.
COMPARABILITY WITH PREVIOUS
YEARS
new machines has been changed in the financial
statement for 2005. The value adjustment made
at the time of purchase of used machinery has
been interpreted as actually being a discount on
the sales price of new machinery and, therefore,
the change in value has been accounted for as
an adjustment item in the consolidated turnover. Previously, until the end of Q3, this type of
value adjustment has been presented in materials and services. The financial statements for
2004 have been rearranged accordingly to make
them comparable.
The method for booking the used machines
that were purchased in connection with selling
2. Segment reporting
Segment reporting is based on Ponsse Group’s geographical segments and business segments. Segments are based on the group’s internal
financial reporting. Pricing between segments is done at the current market price.
Primary segment
Nordic countries
Rest of Europe
North and South America
A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and
returns that are different from those of segments operating in other economic environments.
Segment profits are allocated by location of customers. Assets and liabilities are allocated by location of assets. Unallocated sales include
profits from countries not included in the aforementioned segments. Other unallocated items include tax and financial items as well as items
shared by the company. Investments consist of increases to property, plant and equipment and increases on intangible assets that will be used
for more than one period.
Secondary segment
Machine sales
Servicing services
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that
are different from those of other business segments.
Geographical segments 2005
External sales
Services
Sales of goods
External sales, total
Internal sales
Nordic countries
Rest of Europe
North and South
America
Elimination
Total
TEUR
TEUR
TEUR
TEUR
TEUR
2,000
578
514
3,091
118,589
70,325
32,846
221,761
120,589
70,903
33,360
33,427
855
415
-34,697
154,016
71,758
33,775
-34,697
18,825
10,761
2,028
224,852
Unallocated sales
Turnover
Operating profit of the segment
1,242
Unallocated items
Operating profit
Shares of the result of associated companies
Minority interest
Unallocated items
Net profit for the period
226,095
31,613
-2,562
18,825
10,761
2,028
29,051
285
0
-9,707
19,629
Ponsse 2005
57
1. ACCOUNTING POLICIES
SEGMENTS
CURRENT ASSETS
Ponsse Group designs, manufactures, markets,
and services environmentally-friendly and efficient cut-to-length method forest machines
and harvesting related information technology
solutions.
The geographical segment is used as the primary, and the business segment as the secondary segment for segment based reporting. The
geographical segments are the Nordic countries, the rest of Europe, and North and South
America. The business segments include machines sales and servicing services.
Current assets are valued at the direct manufacturing or acquisition cost, the replacement cost
or likely selling price, whichever is the lower.
The standard cost method is used as a basis for
calculating the value of materials and supplies
in stock.
Leases contracts are categorised as finance lease
contracts if the majority of risks and benefits associated with ownership of property or goods
are transferred onto the company. Assets rented on finance lease agreements, less depreciation according to plan, are booked in property,
plant, and equipment; and obligations resulting
from the agreement on interest-bearing liabilities. Finance lease contracts are recorded on the
balance sheet and valued at the market value of
the asset at the start date of the contract or at
the current value of minimum rents if it is lower than the market value. Regular depreciations
are recorded on goods acquired by finance lease
contracts.
The Group’s parent company is Ponsse Oyj
- a Finnish public limited company established in accordance with Finnish legislation. The parent company’s head office is in
Vieremä. Ponsse Oyj’s shares have been listed
on the Helsinki Stock Exchange since 1995.
BASIS OF CONSOLIDATION
Ponsse Oyj’s consolidated financial statements
have been prepared in accordance with the
International Financial Reporting Standards
(IFRS), and the standards and interpretations
valid on 31 December 2005. The information in the consolidated financial statements is
given in TEUR (EUR 1,000), and it is based
on original acquisition costs, if not otherwise
stated in the accounting policies. The financial
statements have been presented in accordance
with the profit and loss account by type of expense.
The Group adopted the IFRS accounting policies at the beginning of 2005. The adoption
to IFRS took place on1 January 2004. Prior
to the adoption, the Group complied with
the Finnish Accounting Standards (FAS).
All comparative information from 2004 has
been converted into an IFRS-compliant form.
The notes to the consolidated financial statements are also in compliance with the Finnish accounting and organisational legislation.
CONSOLIDATION PRINCIPLES
The consolidated financial statements include
the financial statements of the parent company
Ponsse Oyj and the subsidiaries it controls, and
also the financial statements of the associated
company consolidated using the equity method. More detailed information on the Group’s
companies and associated companies has been
presented later in section “28. Group companies” of Notes to the financial statements.
The consolidated financial statements have
been prepared using cost method. The acquisition cost in excess of the shareholders’ equity
of each subsidiary at the date of acquisition is
shown in the balance sheet under goodwill.
Intra-group transactions, balances and creditors, unrealised margins on deliveries, and
intra-group distribution of profit have been
eliminated. The profit for the accounting period shall be distributed to parent company
shareholders and minority shareholders. Minority interests have been separated from the
Group’s capital and reserves and profil are presented as a separate item.
The income statement include the Group’s
share of results of associated companies. The
Group’s pro rata share of the shareholders’ equity in associated companies, adjusted by any
changes in working capital since the share acquisition, is included in the shares in participating interests in the balance sheet.
56
Ponsse 2005
Foreign currency monetary items are recorded using the rates prevailing at the transaction
date, and any receivables and liabilities on the
balance sheet are translated into the financial
statements at the closing rate. All resulting
translation differences are recorded in the financial items of the accounts.
The profit and loss accounts of non-domestic
Group companies have been translated into
euro at the average rate of the accounting period and the balance sheets at the end rate of
the report year. The resulting translation differences in the profit and loss account and the
balance sheet, as well as in the shareholders’
capital and reserves, are shown as a separate
item in the shareholders’ capital and reserves.
RENEVUE RECOGNITION
Renevues are recognised upon legal completion. Indirect taxes and given discounts, among
others, have been deducted from the sales revenue before calculating the turnover. Exchange
rate differences in sales are recorded in the financial items.
INTANGIBLE ASSETS
Goodwill
The goodwill corresponds to the acquisition
cost in excess of the Group’s share of the current market value of the company’s net assets
at the date of acquisition.
No regular depreciations are recorded on
goodwill, but instead they are tested annually
for possible reduction in value.
Research and development expenses
Development expenses that fulfil the activation
requirements have been booked under intangible assets on the balance sheet, once the product is technically feasible, can be utilised commercially, and is expected to yield commercial
benefits in the future. Depreciations on goods
are recorded over their economic life. Research
expenses are recorded directly as annual expenses.
PROPERTY, PLANT AND EQUIPMENT
The property, plant, and equipment are booked
in the balance sheet at the direct acquisition
cost less depreciation according to plan, which
has been calculated on a straight-line basis over
the expected economic life. Depreciation times
are:
Intangible rights .................................... 5 years
Other long-term expense items ..........3-5 years
Buildings and structures ......................20 years
Plant and equipment ........................3-10 years
LEASES CONTRACTS
REDUCTION IN VALUE
The booking values of assets are evaluated at the
closing date for any indications of reduction in
value. If indications are found, the recoverable
amount of the assets is defined.
Loss on reduction in value is recorded in the
profit and loss account, if the balance sheet value of the assets exceeds the recoverable amount.
If the estimated recoverable amounts show a
change for the better, the loss on reduction in
value for property, plant and equipment, and
for other intangible assets, except goodwill, is reverted. However, the loss on reduction in value
is reverted to no more than the booking value
the asset would have had if the reduction in value had not been recorded in the first place. Reduction in value on goodwill is never reverted.
TRADE RECEIVABLES AND
OTHER RECEIVABLES
Trade receivables and other receivables are
booked using original values. Any uncollectible
credit losses are booked as expense items.
PENSION SYSTEMS
Statutory pension cover for Group employees
has been arranged through pension insurance
companies and there are no uncovered pension
liabilities.
PROVISIONS
Likely guarantee expenses in respect of products
delivered are booked under provisions for liabilities and charges. Other mandatory provisions
are associated with expenses and losses allocated
for the previous accounting period.
LIQUID ASSETS
Liquid assets include cash in hand and at banks,
and other liquid investments with a maturity of
less than three months.
INCOME TAXES
The tax expense on the profit and loss account
consists of taxes based on taxable income and
calculated tax. Income taxes include taxes corresponding with the Group companies’ results for
the accounting period and calculated based on
the tax legislation prevailing in each company’s
domicile. Tax is adjusted using any taxes from
previous periods if there are any such items.
Deferred taxes are calculated on all temporary
differences between the booking value and taxable value. The biggest temporary differences
deviate from depreciations made on property,
plant and equipment, unbooked taxable losses,
and appreciations made on market values at the
time of the acquisition. Non-deductible depreciation in value on goodwill is not booked in
the deferred tax, and retained earnings of subsidiaries are not accounted for deferred taxes
because it is probable that the temporary difference will not be reversed in the foreseeable
future.
Deferred tax liabilities and assets are calculated
for all taxable temporary differences using the
confirmed tax rate for the following years.
The balance sheet includes the calculated tax liability in its entirety and the amount of calculated tax assets the company expects to receive.
COMPARABILITY WITH PREVIOUS
YEARS
new machines has been changed in the financial
statement for 2005. The value adjustment made
at the time of purchase of used machinery has
been interpreted as actually being a discount on
the sales price of new machinery and, therefore,
the change in value has been accounted for as
an adjustment item in the consolidated turnover. Previously, until the end of Q3, this type of
value adjustment has been presented in materials and services. The financial statements for
2004 have been rearranged accordingly to make
them comparable.
The method for booking the used machines
that were purchased in connection with selling
2. Segment reporting
Segment reporting is based on Ponsse Group’s geographical segments and business segments. Segments are based on the group’s internal
financial reporting. Pricing between segments is done at the current market price.
Primary segment
Nordic countries
Rest of Europe
A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and
returns that are different from those of segments operating in other economic environments.
Segment profits are allocated by location of customers. Assets and liabilities are allocated by location of assets. Unallocated sales include
profits from countries not included in the aforementioned segments. Other unallocated items include tax and financial items as well as items
shared by the company. Investments consist of increases to property, plant and equipment and increases on intangible assets that will be used
for more than one period.
Secondary segment
Machine sales
Servicing services
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that
are different from those of other business segments.
External sales
Services
Sales of goods
Internal sales
Nordic countries
Rest of Europe
North and South
America
Elimination
Total
TEUR
TEUR
TEUR
TEUR
TEUR
2,000
578
514
3,091
118,589
70,325
32,846
221,761
120,589
70,903
33,360
33,427
855
415
-34,697
154,016
71,758
33,775
-34,697
18,825
10,761
2,028
224,852
Unallocated sales
Turnover
1,242
Unallocated items
Operating profit
Minority interest
Unallocated items
226,095
31,613
-2,562
18,825
10,761
2,028
29,051
285
0
-9,707
19,629
Ponsse 2005
57
Segment assets
Business segments 2005
Nordic countries
Rest of Europe
North and South
America
Elimination
Total
TEUR
TEUR
TEUR
TEUR
TEUR
97,010
14,117
15,824
-23,493
103,457
678
1,013
453
3,792
335
Unallocated assets
Turnover
Assets
Investments
Total assets
97,345
14,117
15,824
-22,362
108,262
Segment liabilities
24,532
10,051
12,361
-21,178
25,766
Total liabilities
24,532
10,051
12,361
-21,178
50,484
Assets
Investments
10,269
281
670
11,220
Investments
Depreciation
3,642
255
145
4,041
Unallocated assets
24,718
Machine sales
Servicing services
Total
TEUR
TEUR
TEUR
198,872
27,223
226,095
91,256
17,006
108,262
7,720
3,500
11,220
Machine sales
Servicing services
Total
TEUR
TEUR
TEUR
156,685
21,249
177,934
84,678
12,842
97,520
8,718
311
9,029
Turnover
3. Acquired business operations
1 June 2005, the company acquired 91.80 per cent of Lako Oy’s shares. The company manufactures harvesting heads. Purchase price was TEUR 787.5
and it was paid in cash. In addtion to pecuniary consideration, the purchase cost included TEUR 9.8 of expert fees and TEUR 12.6 of capital transfer tax.
Lako Oy’s result of the last six months of the year, TEUR -481.3, is included in the group income statement for 2005. The TEUR 752.1 goodwill
was influenced by the significant synergy benefits from Lako Oy’s product technical know-how and their product line, as expected.
External sales
Services
Nordic countries
Rest of Europe
North and South
America
Elimination
Total
TEUR
TEUR
TEUR
TEUR
TEUR
1,479
405
344
2,228
96,345
52,611
26,487
175,443
97,824
53,016
26,831
177,671
Internal sales
24,685
426
178
Sales of goods
-25,289
Unallocated sales
Turnover
14,642
53,442
7,049
27,009
-25,289
1,864
-3,855
14,642
7,049
1,864
19,700
251
Minority interest
-11
Unallocated items
-6,408
Segment assets
13,532
89,977
12,362
10,980
335
Unallocated assets
-17,934
95,385
494
829
234
993
Total assets
90,312
12,362
10,980
-17,206
97,207
Segment liabilities
23,288
9,272
8,455
-16,461
24,554
Unallocated assets
Total liabilities
58
177,934
23,555
Unallocated items
Operating profit
Intangible assets
263
122,509
Financial assets
Recorded market values
used in the combination
Book values before
combination
TEUR
TEUR
77,4
77,4
103,6
103,6
0,2
0,2
Stocks
688,3
688,3
Trade receivables
695,1
695,1
Other receivables
51,6
51,6
Liquid assets
3,1
3,1
Total assets
1 619,3
1 619,3
-59,5
-59,5
-776,1
-776,1
Subordinated loans
-346,9
-346,9
Pension liabilities
Other liabilities
-956,9
-956,9
Total liabilities
-2 139,3
-2 139,3
Net assets
-520,0
-520,0
Purchase cost
759,4
Goodwill
752,1
Purchase price paid in cash
809,9
33,544
23,288
9,272
8,455
Investments
8,798
143
88
9,029
Depreciation
2,728
232
129
3,089
Ponsse 2005
The group turnover in 2005 would have amounted to TEUR 226.6, if Lako Oy would have been combined to the group financial statements from the
beginning of 2005 financial period.
-16,461
58,098
Liquid assets of the acquired subsidiary
Cash flow effect
-3,1
806,8
Ponsse 2005
59
Segment assets
Nordic countries
Rest of Europe
North and South
America
Elimination
Total
TEUR
TEUR
TEUR
TEUR
TEUR
97,010
14,117
15,824
-23,493
103,457
678
1,013
453
3,792
335
Unallocated assets
Turnover
Assets
Investments
Total assets
97,345
14,117
15,824
-22,362
108,262
Segment liabilities
24,532
10,051
12,361
-21,178
25,766
Total liabilities
24,532
10,051
12,361
-21,178
50,484
Assets
Investments
10,269
281
670
11,220
Investments
Depreciation
3,642
255
145
4,041
Unallocated assets
24,718
Machine sales
Servicing services
Total
TEUR
TEUR
TEUR
198,872
27,223
226,095
91,256
17,006
108,262
7,720
3,500
11,220
Machine sales
Servicing services
Total
TEUR
TEUR
TEUR
156,685
21,249
177,934
84,678
12,842
97,520
8,718
311
9,029
Turnover
3. Acquired business operations
1 June 2005, the company acquired 91.80 per cent of Lako Oy’s shares. The company manufactures harvesting heads. Purchase price was TEUR 787.5
and it was paid in cash. In addtion to pecuniary consideration, the purchase cost included TEUR 9.8 of expert fees and TEUR 12.6 of capital transfer tax.
Lako Oy’s result of the last six months of the year, TEUR -481.3, is included in the group income statement for 2005. The TEUR 752.1 goodwill
was influenced by the significant synergy benefits from Lako Oy’s product technical know-how and their product line, as expected.
External sales
Services
Nordic countries
Rest of Europe
North and South
America
Elimination
Total
TEUR
TEUR
TEUR
TEUR
TEUR
1,479
405
344
2,228
96,345
52,611
26,487
175,443
97,824
53,016
26,831
177,671
Internal sales
24,685
426
178
Sales of goods
-25,289
Unallocated sales
Turnover
14,642
53,442
7,049
27,009
-25,289
1,864
-3,855
14,642
7,049
1,864
19,700
251
Minority interest
-11
Unallocated items
-6,408
Segment assets
13,532
89,977
12,362
10,980
335
Unallocated assets
-17,934
95,385
494
829
234
993
Total assets
90,312
12,362
10,980
-17,206
97,207
Segment liabilities
23,288
9,272
8,455
-16,461
24,554
Unallocated assets
Total liabilities
58
177,934
23,555
Unallocated items
Operating profit
Intangible assets
263
122,509
Financial assets
Recorded market values
used in the combination
Book values before
combination
TEUR
TEUR
77,4
77,4
103,6
103,6
0,2
0,2
Stocks
688,3
688,3
Trade receivables
695,1
695,1
Other receivables
51,6
51,6
Liquid assets
3,1
3,1
Total assets
1 619,3
1 619,3
-59,5
-59,5
-776,1
-776,1
Subordinated loans
-346,9
-346,9
Pension liabilities
Other liabilities
-956,9
-956,9
Total liabilities
-2 139,3
-2 139,3
Net assets
-520,0
-520,0
Purchase cost
759,4
Goodwill
752,1
Purchase price paid in cash
809,9
33,544
23,288
9,272
8,455
Investments
8,798
143
88
9,029
Depreciation
2,728
232
129
3,089
Ponsse 2005
The group turnover in 2005 would have amounted to TEUR 226.6, if Lako Oy would have been combined to the group financial statements from the
beginning of 2005 financial period.
-16,461
58,098
Liquid assets of the acquired subsidiary
Cash flow effect
-3,1
806,8
Ponsse 2005
59
4. Other operating income
9. Financial income and expenses
Sales profits on property, plant and equipment
Public subsidies
2005
2004
TEUR
TEUR
72
55
2005
2004
Interest expenses
-738
-620
Interest income
277
228
129
401
Income from dividends
Other
1,125
998
Gain/loss on exchange rate changes
Total
1,326
1,453
Other financial income
Other financial expenses
5. Other operating expenses
Total
Sales loss on property, plant and equipment
R&D expenditure
2005
2004
29
9
519
798
Rent expenses
1,363
836
External services
1,749
1,227
Other
17,777
14,192
Total
21,437
17,063
Intangible assets
2005
2004
Activated development expenditure
12
1
Patents
45
40
0
1
Other long-term expense items
302
321
Total
359
363
Intangible rights
Property, plant, and equipment
Buildings
845
819
Plant and equipment
2,837
1,907
Total
3,682
2,726
Wages
2005
2004
27,796
21,905
Pension expenditure - payment based systems
3,864
3,042
Other indirect labour costs:
2,656
1,969
34,317
26,917
Total
2005
2004
Employees
427
372
White-collar employees
302
235
Total
729
607
Information on management’s employment related benefits will be presented in note 28 Related party transactions
60
Ponsse 2005
Change in deferred taxes
Total
-1,225
-778
2005
2004
8,084
5,755
371
102
26
-227
8,480
5,630
Reconciliation tax expenses in the income statement and taxes calculated using the group’s domestic tax rate (2005: 26 %, 2004: 29 %):
Profit before tax
Tax calculated using the domestic tax rate
28,110
19,172
7,309
5,560
Effect of the different tax rates used in foreign subsidiaries
175
94
Tax-free income
-105
0
Non-deductible expenses
99
77
Taxes from previous financial periods
371
102
Depreciation of group goodwill
158
0
Deferred taxes
474
-137
0
-66
8,480
5,630
2005
2004
Profit for the accounting period owned by parent company shareholders (TEUR)
19,629
13,521
Weighted average of shares during the financial periods (1,000)
14,000
14,000
1,40
0,97
2005
2004
378
379
4
-2
Taxes in the income statement
11. Earnings per share
12. Property, plant and equipment
Land and water areas
Acquisition cost 1.1
Additions
Acquisition cost and book value 31 Dec.
2005
R&D expenditure was recorded as a cost item in the income statement
Tax based on taxable income
Exchange rate difference
8. R&D expenditure
232
-209
10. Income taxes
Undiluted earnings per share, (EUR/share)
Average number of staff during the accounting period
56
-788
The business value of Lako Oy investment was reduced, as it seemed that there might be risks associated with Lako Oy’s receivables. The TEUR
607 value adjustment has been recorded in other financial expenses.
Calculated tax income/expense resulting from the decreased domestic tax rate
7. Expenditure on employment related benefits
43
-452
Other financial expenses include TEUR 108 of rents (interest expenses) resulting from finance lease contracts, recorded as expense items
(TEUR 105 in 2004).
Taxes from previous accounting periods
6. Depreciation
5
-36
52
1
434
378
2004
TEUR
TEUR
3,218
3,382
Ponsse 2005
61
4. Other operating income
9. Financial income and expenses
Sales profits on property, plant and equipment
Public subsidies
2005
2004
TEUR
TEUR
72
55
2005
2004
Interest expenses
-738
-620
Interest income
277
228
129
401
Income from dividends
Other
1,125
998
Gain/loss on exchange rate changes
Total
1,326
1,453
Other financial expenses
5. Other operating expenses
Total
Sales loss on property, plant and equipment
R&D expenditure
2005
2004
29
9
519
798
Rent expenses
1,363
836
External services
1,749
1,227
Other
17,777
14,192
Total
21,437
17,063
Intangible assets
2005
2004
12
1
Patents
45
40
0
1
302
321
Total
359
363
Intangible rights
Property, plant, and equipment
Buildings
845
819
Plant and equipment
2,837
1,907
Total
3,682
2,726
Wages
2005
2004
27,796
21,905
Pension expenditure - payment based systems
3,864
3,042
Other indirect labour costs:
2,656
1,969
34,317
26,917
Total
2005
2004
Employees
427
372
302
235
Total
729
607
Information on management’s employment related benefits will be presented in note 28 Related party transactions
60
Ponsse 2005
Change in deferred taxes
Total
-1,225
-778
2005
2004
8,084
5,755
371
102
26
-227
8,480
5,630
Reconciliation tax expenses in the income statement and taxes calculated using the group’s domestic tax rate (2005: 26 %, 2004: 29 %):
Profit before tax
Tax calculated using the domestic tax rate
28,110
19,172
7,309
5,560
Effect of the different tax rates used in foreign subsidiaries
175
94
Tax-free income
-105
0
Non-deductible expenses
99
77
Taxes from previous financial periods
371
102
Depreciation of group goodwill
158
0
Deferred taxes
474
-137
0
-66
8,480
5,630
2005
2004
Profit for the accounting period owned by parent company shareholders (TEUR)
19,629
13,521
Weighted average of shares during the financial periods (1,000)
14,000
14,000
1,40
0,97
2005
2004
378
379
4
-2
Taxes in the income statement
11. Earnings per share
Land and water areas
Additions
2005
R&D expenditure was recorded as a cost item in the income statement
Tax based on taxable income
8. R&D expenditure
232
-209
10. Income taxes
Undiluted earnings per share, (EUR/share)
Average number of staff during the accounting period
56
-788
Calculated tax income/expense resulting from the decreased domestic tax rate
7. Expenditure on employment related benefits
43
-452
Other financial expenses include TEUR 108 of rents (interest expenses) resulting from finance lease contracts, recorded as expense items
(TEUR 105 in 2004).
Taxes from previous accounting periods
6. Depreciation
5
-36
52
1
434
378
2004
TEUR
TEUR
3,218
3,382
Ponsse 2005
61
Property, plant, and equipment includes the following items rented on a finance lease agreement:
Buildings and structures
14,565
14,447
2005
2005
2004
2004
135
-68
Buildings
Plant and equipment
Buildings
Plant and equipment
4,156
186
Acquisition cost
762
1,556
762
896
-8
0
Accumulated depreciations
-152
-382
-115
-215
Acquisition cost 31 Dec.
18,848
14,565
Book value 31 Dec.
610
1,175
647
681
Accumulated depreciations 1 Jan.
-5,788
-4,971
13. Intangible assets
-14
2
2005
2004
5
0
Additions
Reductions
Accumulated depreciations on reductions and transfers
Depreciations for the accounting period
-845
-819
Depreciation and reduction in value 31 Dec.
-6,642
-5,788
Book value 31 Dec.
12,207
8,777
594
0
77
533
Additions
The write-up of TEUR 841 on the parent company’s business premises in Vieremä recorded on 31 August 1994 has been reversed in its
entirety.
Plant and equipment
Additions
18,499
16,277
53
-34
0
1,709
5,263
1,192
Reductions
-1,485
-645
22,331
18,499
-11,938
-9,680
-43
27
587
559
0
-937
-2,837
-1,907
-14,231
-11,938
8,100
6,561
Book value 31 Dec.
61
594
-1
0
-132
0
-12
-1
-145
-1
Book value 31 Dec.
607
593
428
370
Patent costs
80
751
0
44
42
14
470
428
-93
-21
Additions
0
-32
-45
-40
-138
-93
Book value 31 Dec.
332
335
85
85
0
0
85
85
-80
-79
Prepayments and tangible assets in course of construction
2,379
13
Additions
6,534
2,661
Reductions
-5,383
-295
3,529
2,379
Intangible rights
Additions
Book value 31 Dec.
62
Ponsse 2005
0
-1
-80
-80
5
5
Ponsse 2005
63
Property, plant, and equipment includes the following items rented on a finance lease agreement:
Buildings and structures
14,565
14,447
2005
2005
2004
2004
135
-68
Buildings
Plant and equipment
Buildings
Plant and equipment
4,156
186
Acquisition cost
762
1,556
762
896
-8
0
Accumulated depreciations
-152
-382
-115
-215
18,848
14,565
Book value 31 Dec.
610
1,175
647
681
-5,788
-4,971
13. Intangible assets
-14
2
2005
2004
5
0
Additions
Reductions
-845
-819
-6,642
-5,788
Book value 31 Dec.
12,207
8,777
594
0
77
533
Additions
The write-up of TEUR 841 on the parent company’s business premises in Vieremä recorded on 31 August 1994 has been reversed in its
entirety.
Plant and equipment
Additions
18,499
16,277
53
-34
0
1,709
5,263
1,192
Reductions
-1,485
-645
22,331
18,499
-11,938
-9,680
-43
27
587
559
0
-937
-2,837
-1,907
-14,231
-11,938
8,100
6,561
Book value 31 Dec.
61
594
-1
0
-132
0
-12
-1
-145
-1
Book value 31 Dec.
607
593
428
370
Patent costs
80
751
0
44
42
14
470
428
-93
-21
Additions
0
-32
-45
-40
-138
-93
Book value 31 Dec.
332
335
85
85
0
0
85
85
-80
-79
2,379
13
Additions
6,534
2,661
Reductions
-5,383
-295
3,529
2,379
Intangible rights
Additions
Book value 31 Dec.
62
Ponsse 2005
0
-1
-80
-80
5
5
Ponsse 2005
63
Group goodwill
Additions
15. Other stocks and shares
5,685
2,219
2005
2004
914
3,466
Other stocks and shares
25
25
6,599
5,685
Other receivables
11
0
Total
36
25
-2,219
-2,219
2005
2004
Loans receivables
41
35
Other receivables
0
6
Reduction in value
-607
0
-2,826
-2,219
Book value 31 Dec.
3,773
3,466
16. Receivables (non-current)
Accrued income
Additions
Reductions
Total
2,579
2,283
0
1
0
80
126
294
-54
-79
2,651
2,579
-1,492
-1,183
54
78
0
-66
-302
-321
-1,740
-1,492
Reductions and transfers - accumulated depreciations
Book value 31 Dec.
911
1,087
405
86
Additions
492
528
Reductions
-100
-208
798
406
2005
829
638
Share of the result of the financial period
184
191
1,013
829
2005
2004
Assets
5,216
4,482
Liabilities
2,263
2,071
Turnover
9,252
8,947
Sunit Oy, Kajaani, Finland
Share of ownership
17. Deferred tax assets and liabilities
Changes in deferred taxes during 2005:
1.1.2005
Booked
income
statement
Booked
total
capital
Exchange rate
differences
31.12.2005
Deferred tax assets:
Internal margin of inventories
234
209
0
0
443
Internal margin of fixed assets
0
10
0
0
10
Provisions
0
0
0
0
0
Confirmed losses
0
0
0
0
0
Other temporary differences
306
-222
0
0
Total
540
84
537
Immaterial goods
321
89
189
2
601
Accumulated depreciation differences
754
-47
0
0
707
56
223
-445
0
Total
2004
Book value 1 Jan.
Profit/loss
Receivables do not have any significant credit risk concentrations.
1,131
-166
1,142
18. Stocks
14. Holdings in associated companies
Associated company
66
107
Deferred tax liabilities:
Advance payments and unfinished acquisitions
Book value 31 Dec.
62
103
837
739
34,%
34,%
Materials and supplies
Unfinished products
2005
2004
22,824
19,053
905
688
3,658
2,776
Other current assets
17,774
13,864
Total
45,161
36,381
Finished products/goods
TEUR 372 was recorded as an expense item, which was used to reduce to book value of current assets to correspond to its net realization
value (TEUR 1,398 in 2004).
Sunit Oy specialises in telematics and manufactures vehicle computers.
64
Ponsse 2005
Ponsse 2005
65
Group goodwill
Additions
15. Other stocks and shares
5,685
2,219
2005
2004
914
3,466
Other stocks and shares
25
25
6,599
5,685
Other receivables
11
0
Total
36
25
-2,219
-2,219
2005
2004
Loans receivables
41
35
Other receivables
0
6
Reduction in value
-607
0
-2,826
-2,219
Book value 31 Dec.
3,773
3,466
16. Receivables (non-current)
Accrued income
Additions
Reductions
Total
2,579
2,283
0
1
0
80
126
294
-54
-79
2,651
2,579
-1,492
-1,183
54
78
0
-66
-302
-321
-1,740
-1,492
Reductions and transfers - accumulated depreciations
Book value 31 Dec.
911
1,087
405
86
Additions
492
528
Reductions
-100
-208
798
406
2005
829
638
Share of the result of the financial period
184
191
1,013
829
2005
2004
Assets
5,216
4,482
Liabilities
2,263
2,071
Turnover
9,252
8,947
Share of ownership
17. Deferred tax assets and liabilities
Changes in deferred taxes during 2005:
1.1.2005
Booked
income
statement
Booked
total
capital
Exchange rate
differences
31.12.2005
Deferred tax assets:
Internal margin of inventories
234
209
0
0
443
Internal margin of fixed assets
0
10
0
0
10
Provisions
0
0
0
0
0
Confirmed losses
0
0
0
0
0
306
-222
0
0
Total
540
84
537
Immaterial goods
321
89
189
2
601
Accumulated depreciation differences
754
-47
0
0
707
56
223
-445
0
Total
2004
Book value 1 Jan.
Profit/loss
Receivables do not have any significant credit risk concentrations.
1,131
-166
1,142
18. Stocks
14. Holdings in associated companies
Associated company
66
107
Deferred tax liabilities:
Advance payments and unfinished acquisitions
Book value 31 Dec.
62
103
837
739
34,%
34,%
Materials and supplies
Unfinished products
2005
2004
22,824
19,053
905
688
3,658
2,776
Other current assets
17,774
13,864
Total
45,161
36,381
TEUR 372 was recorded as an expense item, which was used to reduce to book value of current assets to correspond to its net realization
value (TEUR 1,398 in 2004).
Sunit Oy specialises in telematics and manufactures vehicle computers.
64
Ponsse 2005
Ponsse 2005
65
23. Provisions
19. Trade receivables and other receivables (current)
Trade receivables
Receivables from associated companies
Other receivables
Accrued income
Total
2005
2004
14,782
19,228
Total
11
0
Additions
3,374
350
313
Used provisions
-1,553
0
477
404
Book value at the end of the accounting period, 31 Dec.
5,963
361
18,376
19,945
Guarantee reserve
Products are given a 12 month / 2000 hours warranty. Any faults or errors noted in machines during the warranty period will be repaired at
the company’s own expense according to the warranty conditions. Guarantee provisions at the end of 2005 amounted to TEUR 5,963 (TEUR
4,142 in 2004). Guarantee provision are based on failure history recorded in the previous years.
2005
2004
12,339
15,706
2
0
12,341
15,706
21. Notes on capital and reserves
Other mandatory provisions
Other mandatory provisions are associated with expenses and losses allocated for the previous accounting period.
24. Interest-bearing liabilities
2005
2004
16,651
21,827
Non-current
Number of
shares (1,000)
1.1.2005
Share issue
31.12.2005
Share
capital EUR
14,000
7,000,000
0
0
14,000
7,000,000
Other
funds EUR
19,476
Total
EUR
7,019,476
0
19,476
7,019,476
Loans from financial institutions
Subordinated loan
Finance lease liabilities
Finance lease agreements
Total long-term credit capital
65
0
1,690
1,058
546
1,052
18,953
23,937
5,018
7,697
The maximum number of shares is 24 million (24 million shares in 2004)- The nominal value of shares is EUR 0.50 per share, and the group’s
maximum share capital is EUR 12 million (EUR 12 million in 2004). The number of issued shares is 14 million (14 million shares in 2004).
All issued shares have been paid in full.
Current
118
290
All shares are of the same series and each share entitles its holder to one vote at shareholder meetings and gives an equal right to a dividend.
308
367
5,445
8,353
2005
2004
Ponsse Oyj has no outstanding convertible notes, bonds with warrants or options. Neither the company nor its subsidiaries hold the company’s
own shares. Ponsse Oyj’s Board of Directors is not currently authorised to purchase the company’s own shares, increase the share capital or
issue convertible notes or bonds with warrants.
Total interest bearing current liabilities
The translation difference fund includes the translation differences arising from converting foreign units’ financial statements
Non-current interest bearing liabilities fall due as follows
2006
5,445
8,353
Other reserves
Ponsse AB and Ponsse S.A.S funds constitute the other funds.
2007
5,424
6,344
2008
3,807
4,697
2009
3,150
3,517
2010
2,790
3,363
Later
3,782
6,016
Total
24,398
32,291
Dividends
The Board of Directors has recommended that after the closing date a dividend of EUR 0.80 per share be paid.
22. Pension liabilities
The recognition principle governing the disability pension obligation under the current Finnish Employees’ Pension Act (TEL) is interpreted as
practically corresponding to the current accounting practice based on FAS. Based on IAS 19, disability pension is a long-term employee benefit,
the level of which does not depend on the length of employment at the company preparing IFRS-compliant financial statements. According to
the provisions of IAS 19.130, the so-called event leading to an obligation in the case of disability pension is an event of disability. Expenses and
liabilities are recognized once such an event has occurred. Our foreign subsidiaries apply defined contribution pension plans.
66
provisions
4,142
-3
20. Liquid assets and current investments
Current investments
Guarantee reserve
Book value at the beginning of the accounting period, 1 Jan.
3,121
The essential items of accrued income are associated with public subsidies and the assessment of forward exchange agreements.
Other mandatory
Ponsse 2005
TEUR 7,451 of all liabilities have a fixed interest rate (TEUR 11,933 in 2004). Other loans are linked to Euribor TEUR 15,220 (TEUR 18,494
on 2004) or linked to Libor TEUR 1,727 (TEUR 1,864 in 2004).
Ponsse 2005
67
23. Provisions
19. Trade receivables and other receivables (current)
Trade receivables
Receivables from associated companies
Other receivables
Accrued income
Total
2005
2004
14,782
19,228
Total
11
0
Additions
3,374
350
313
Used provisions
-1,553
0
477
404
Book value at the end of the accounting period, 31 Dec.
5,963
361
18,376
19,945
Guarantee reserve
Products are given a 12 month / 2000 hours warranty. Any faults or errors noted in machines during the warranty period will be repaired at
the company’s own expense according to the warranty conditions. Guarantee provisions at the end of 2005 amounted to TEUR 5,963 (TEUR
4,142 in 2004). Guarantee provision are based on failure history recorded in the previous years.
2005
2004
12,339
15,706
2
0
12,341
15,706
21. Notes on capital and reserves
Other mandatory provisions
Other mandatory provisions are associated with expenses and losses allocated for the previous accounting period.
24. Interest-bearing liabilities
2005
2004
16,651
21,827
Non-current
Number of
shares (1,000)
1.1.2005
Share issue
31.12.2005
Share
capital EUR
14,000
7,000,000
0
0
14,000
7,000,000
Other
funds EUR
19,476
Total
EUR
7,019,476
0
19,476
7,019,476
Subordinated loan
Total long-term credit capital
65
0
1,690
1,058
546
1,052
18,953
23,937
5,018
7,697
The maximum number of shares is 24 million (24 million shares in 2004)- The nominal value of shares is EUR 0.50 per share, and the group’s
maximum share capital is EUR 12 million (EUR 12 million in 2004). The number of issued shares is 14 million (14 million shares in 2004).
All issued shares have been paid in full.
Current
118
290
All shares are of the same series and each share entitles its holder to one vote at shareholder meetings and gives an equal right to a dividend.
308
367
5,445
8,353
2005
2004
Ponsse Oyj has no outstanding convertible notes, bonds with warrants or options. Neither the company nor its subsidiaries hold the company’s
own shares. Ponsse Oyj’s Board of Directors is not currently authorised to purchase the company’s own shares, increase the share capital or
issue convertible notes or bonds with warrants.
Total interest bearing current liabilities
The translation difference fund includes the translation differences arising from converting foreign units’ financial statements
Non-current interest bearing liabilities fall due as follows
2006
5,445
8,353
Other reserves
Ponsse AB and Ponsse S.A.S funds constitute the other funds.
2007
5,424
6,344
2008
3,807
4,697
2009
3,150
3,517
2010
2,790
3,363
Later
3,782
6,016
Total
24,398
32,291
Dividends
The Board of Directors has recommended that after the closing date a dividend of EUR 0.80 per share be paid.
22. Pension liabilities
The recognition principle governing the disability pension obligation under the current Finnish Employees’ Pension Act (TEL) is interpreted as
practically corresponding to the current accounting practice based on FAS. Based on IAS 19, disability pension is a long-term employee benefit,
the level of which does not depend on the length of employment at the company preparing IFRS-compliant financial statements. According to
the provisions of IAS 19.130, the so-called event leading to an obligation in the case of disability pension is an event of disability. Expenses and
liabilities are recognized once such an event has occurred. Our foreign subsidiaries apply defined contribution pension plans.
66
provisions
4,142
-3
20. Liquid assets and current investments
Current investments
Guarantee reserve
Book value at the beginning of the accounting period, 1 Jan.
3,121
The essential items of accrued income are associated with public subsidies and the assessment of forward exchange agreements.
Other mandatory
Ponsse 2005
TEUR 7,451 of all liabilities have a fixed interest rate (TEUR 11,933 in 2004). Other loans are linked to Euribor TEUR 15,220 (TEUR 18,494
on 2004) or linked to Libor TEUR 1,727 (TEUR 1,864 in 2004).
Ponsse 2005
67
Non-current interest bearing liabilities distributed by currencies:
26. Other lease contracts
2005
2004
TEUR
15,412
19,858
TUSD
3,788
4,737
TGBP
88
34
TSEK
1,868
4,990
Group as lessee
Minimum rents due based on other non-voidable lease contract:
2005
2004
Within one year
344
304
Within one to five years
417
521
0
0
After more than five years
Current interest bearing liabilities distributed by currencies:
2005
2004
TEUR
3,635
6,896
TUSD
1,587
1,280
TGBP
55
49
TSEK
3,593
4,039
The group has leased some of the service facilities it has used. The average contract length is three to ten years, usually with an option to
continue the contract after its original expiration date. The income statement for 2005 includes TEUR 1,019 of rent expenses (TEUR 532 in
2004) paid on the basis of other lease contracts.
27. Pledges given and contingent liabilities
2005
2004
Mortgages given on land and buildings
101
1,126
Mortgages given on company assets
336
820
Pledges given for own debt
Due dates of finance lease liabilities
2005
2004
230
321
Guarantees given for own debt
65
61
1,521
836
Guarantees given on behalf of others
1,223
769
390
468
Repurchase commitments
7,163
7,851
1,809
1,347
118
290
Group companies
Finance lease liabilities - total amount of minimum rents
Other contingent liabilities
Within one year
Finance lease liabilities - current value of minimum rents
Within one year
28. Related party transactions
1,358
669
Name and registered office
334
389
Parent company Ponsse Oyj, Finland
Future financial expenses
332
278
1,809
1,347
Total finance lease liabilities
25. Trade creditors and other liabilities
Current
Group and parent company share of shares and votes, %
Ponsse AB, Västerås, Sweden
100,00
Ponsse AS, Kongsvinger, Norway
100,00
Ponssé S.A.S, Gondreville, France
100,00
Ponsse UK, Lockerbie, Great Britain
100,00
Ponsse North America, Inc., Rhinelander, the United States
100,00
Ponsse Latin America Indústria de Máquinas Florestais Ltda, Mogi das Cruzes, Brasilia
100,00
2005
2004
11,961
13,357
OOO Ponsse, St. Petersburg, Russia
100,00
Advances received
315
243
Epec Oy, Seinäjoki, Finland
100,00
Pro-forma invoicing
14
617
Lako Oy, Turku, Finland
3,993
1,911
4,853
3,734
Interest periods
141
227
Accrued expenses of current assets
401
157
1,758
1,997
23,436
22,243
Trade creditors
Other liabilities
Accrued expenses
Accrued staff expenses
Other accrued expenses
Total
Non-current
1,543
1,195
Total
1,543
1,195
91,80
Management’s employment related benefits
2005
2004
Wages and other short-term employment related benefits
1,544
1,238
Benefits paid upon termination of employment
1,172
770
Total
2,716
2,008
Presidents and CEOs
853
733
Board members
186
127
1,040
860
Wages and bonuses
Total
Staff expenses and interest periods for liabilities constitute the essential items of accrued expenses.
68
Ponsse 2005
Ponsse 2005
69
Non-current interest bearing liabilities distributed by currencies:
26. Other lease contracts
2005
2004
TEUR
15,412
19,858
TUSD
3,788
4,737
TGBP
88
34
TSEK
1,868
4,990
Group as lessee
Minimum rents due based on other non-voidable lease contract:
2005
2004
Within one year
344
304
417
521
0
0
Current interest bearing liabilities distributed by currencies:
2005
2004
TEUR
3,635
6,896
TUSD
1,587
1,280
TGBP
55
49
TSEK
3,593
4,039
The group has leased some of the service facilities it has used. The average contract length is three to ten years, usually with an option to
continue the contract after its original expiration date. The income statement for 2005 includes TEUR 1,019 of rent expenses (TEUR 532 in
2004) paid on the basis of other lease contracts.
27. Pledges given and contingent liabilities
2005
2004
101
1,126
Mortgages given on company assets
336
820
Pledges given for own debt
Due dates of finance lease liabilities
2005
2004
230
321
Guarantees given for own debt
65
61
1,521
836
1,223
769
390
468
7,163
7,851
1,809
1,347
118
290
Group companies
Finance lease liabilities - total amount of minimum rents
Other contingent liabilities
Within one year
Finance lease liabilities - current value of minimum rents
Within one year
28. Related party transactions
1,358
669
Name and registered office
334
389
Parent company Ponsse Oyj, Finland
Future financial expenses
332
278
1,809
1,347
Total finance lease liabilities
25. Trade creditors and other liabilities
Current
Group and parent company share of shares and votes, %
Ponsse AB, Västerås, Sweden
100,00
100,00
100,00
Ponsse UK, Lockerbie, Great Britain
100,00
Ponsse North America, Inc., Rhinelander, the United States
100,00
100,00
2005
2004
11,961
13,357
100,00
Advances received
315
243
100,00
Pro-forma invoicing
14
617
3,993
1,911
4,853
3,734
Interest periods
141
227
Accrued expenses of current assets
401
157
1,758
1,997
23,436
22,243
Trade creditors
Other liabilities
Accrued expenses
Accrued staff expenses
Other accrued expenses
Total
Non-current
1,543
1,195
Total
1,543
1,195
91,80
Management’s employment related benefits
2005
2004
Wages and other short-term employment related benefits
1,544
1,238
Benefits paid upon termination of employment
1,172
770
Total
2,716
2,008
Presidents and CEOs
853
733
Board members
186
127
1,040
860
Wages and bonuses
Total
Staff expenses and interest periods for liabilities constitute the essential items of accrued expenses.
68
Ponsse 2005
Ponsse 2005
69
29. Adoption of IFRS-compliant financial statements
FAS
31.12.2003
Effects of
adopting
IFRS
IFRS
1.1.2004
FAS
31.12.2004
Effects of
adopting
IFRS
IFRS
31.12.2004
TEUR
TEUR
TEUR
TEUR
TEUR
TEUR
Share capital
3,500
0
3,500
7,000
0
7,000
Share premium account
2,554
0
2,554
0
0
0
8
0
8
20
0
20
37,678
-957
36,721
15,851
-958
14,893
reference
As stated in section Accounting policies, these are the first IFRS-compliant financial statements for the Ponsse Group. Prior to the adoption of
IFRS, Ponsse Oyj’s consolidated financial statements have been prepared according to Finnish Accounting Standards.
In comparison with previous financial statements, the adoption of IFRS has changed the calculations, notes, and principles used in the
preparation of financial statements. The principles outlined in section Principles of preparing the accounting policies have been applied in
preparing the financial statements of the financial period ending on 31 December 2005, the reference figures of the accounting period ending
on 31 December 2004, and the opening IFRS balance 1.1.2004.
The balancing reconciliation and reports below describe the differences between the IFRS-compliant financial statements and the Finnish
Accounting Standards of 2004 and the IFRS-standards on their adoption date, 1 January 2004.
Other reserves
Retained earnings
3
Profit for the accounting period
Other capital and reserves
Reconciliation of capital and reserves 1 Jan. 2004 and 31 Dec. 2004
reference
FAS
31.12.2003
TEUR
Effects of
adopting
IFRS
IFRS
1.1.2004
TEUR
TEUR
FAS
31.12.2004
TEUR
Effects of
adopting
IFRS
IFRS
31.12.2004
TEUR
TEUR
Capital and reserves owned by
parent company shareholders
Minority interest
0
0
13,518
14
13,532
0
-646
-838
0
-838
43,094
-957
42,137
35,550
-944
34,606
0
0
0
419
0
419
43,094
-957
42,137
35,969
-944
35,025
ASSETS
Non-current assets
4
13,164
1,414
14,578
22,885
1,052
23,937
Intangible assets
Goodwill
1
Financial assets
Deferred tax assets
5
Total non-current assets
1,541
0
1,541
2,426
0
2,426
5
838
186
1,024
1,019
112
1,131
0
0
0
3,466
0
3,466
6
121
492
613
121
215
336
15,479
986
16,465
17,518
577
18,095
14,123
2,093
16,216
24,025
1,379
25,404
22
0
22
25
0
25
638
0
638
829
0
829
Current creditors
218
0
218
107
0
107
4,603
346
4,949
7,986
367
8,353
240
234
474
387
153
540
Provisions
2,284
0
2,284
4,153
0
4,153
18,138
1,220
19,358
24,758
730
25,488
Current assets
Stocks
31,688
643
32,331
35,994
387
36,381
16,664
0
16,664
19,228
0
19,228
1,145
0
1,145
717
0
717
10,565
0
10,565
15,706
0
15,706
60,062
643
60,705
71,645
387
72,032
TOTAL ASSETS
78,200
1,863
80,063
96,403
1,117
97,520
Trade receivables
Ponsse 2005
2
4
Tax liabilities for the accounting period
961
0
961
2,343
0
2,343
13,135
382
13,517
21,928
315
22,243
20,983
727
21,710
36,409
682
37,091
TOTAL CAPITAL AND RESERVES,
AND LIABILITIES
78,200
1,863
80,063
96,403
1,117
97,520
70
0
-646
6
Ponsse 2005
71
29. Adoption of IFRS-compliant financial statements
FAS
31.12.2003
Effects of
adopting
IFRS
IFRS
1.1.2004
FAS
31.12.2004
Effects of
adopting
IFRS
IFRS
31.12.2004
TEUR
TEUR
TEUR
TEUR
TEUR
TEUR
Share capital
3,500
0
3,500
7,000
0
7,000
Share premium account
2,554
0
2,554
0
0
0
8
0
8
20
0
20
37,678
-957
36,721
15,851
-958
14,893
reference
As stated in section Accounting policies, these are the first IFRS-compliant financial statements for the Ponsse Group. Prior to the adoption of
IFRS, Ponsse Oyj’s consolidated financial statements have been prepared according to Finnish Accounting Standards.
In comparison with previous financial statements, the adoption of IFRS has changed the calculations, notes, and principles used in the
preparation of financial statements. The principles outlined in section Principles of preparing the accounting policies have been applied in
preparing the financial statements of the financial period ending on 31 December 2005, the reference figures of the accounting period ending
on 31 December 2004, and the opening IFRS balance 1.1.2004.
The balancing reconciliation and reports below describe the differences between the IFRS-compliant financial statements and the Finnish
Accounting Standards of 2004 and the IFRS-standards on their adoption date, 1 January 2004.
Other reserves
Retained earnings
3
Other capital and reserves
Reconciliation of capital and reserves 1 Jan. 2004 and 31 Dec. 2004
reference
FAS
31.12.2003
TEUR
Effects of
adopting
IFRS
IFRS
1.1.2004
TEUR
TEUR
FAS
31.12.2004
TEUR
Effects of
adopting
IFRS
IFRS
31.12.2004
TEUR
TEUR
Capital and reserves owned by
parent company shareholders
Minority interest
0
0
13,518
14
13,532
0
-646
-838
0
-838
43,094
-957
42,137
35,550
-944
34,606
0
0
0
419
0
419
43,094
-957
42,137
35,969
-944
35,025
ASSETS
Non-current assets
4
13,164
1,414
14,578
22,885
1,052
23,937
Intangible assets
Goodwill
1
Financial assets
Deferred tax assets
5
Total non-current assets
1,541
0
1,541
2,426
0
2,426
5
838
186
1,024
1,019
112
1,131
0
0
0
3,466
0
3,466
6
121
492
613
121
215
336
15,479
986
16,465
17,518
577
18,095
14,123
2,093
16,216
24,025
1,379
25,404
22
0
22
25
0
25
638
0
638
829
0
829
Current creditors
218
0
218
107
0
107
4,603
346
4,949
7,986
367
8,353
240
234
474
387
153
540
Provisions
2,284
0
2,284
4,153
0
4,153
18,138
1,220
19,358
24,758
730
25,488
Current assets
Stocks
31,688
643
32,331
35,994
387
36,381
16,664
0
16,664
19,228
0
19,228
1,145
0
1,145
717
0
717
10,565
0
10,565
15,706
0
15,706
60,062
643
60,705
71,645
387
72,032
TOTAL ASSETS
78,200
1,863
80,063
96,403
1,117
97,520
Trade receivables
Ponsse 2005
2
4
Tax liabilities for the accounting period
961
0
961
2,343
0
2,343
13,135
382
13,517
21,928
315
22,243
20,983
727
21,710
36,409
682
37,091
TOTAL CAPITAL AND RESERVES,
AND LIABILITIES
78,200
1,863
80,063
96,403
1,117
97,520
70
0
-646
6
Ponsse 2005
71
Reconciliation of profit of the accounting period 1 Jan.-31 Dec. 2004
TEUR
Turnover
4. Interest-bearing and other liabilities
reference
1
FAS
1.1- 31.12.2004
Effects of
adopting
IFRS
IFRS
1.1.- 31.12.2004
177,589
345
177,934
968
0
968
Non-current interest-bearing liabilities
1,453
0
1,453
-113,723
136
-113,587
-26,917
0
-26,917
-2,676
-413
-3,089
-17,063
0
-17,063
Operating profit (/loss)
19,632
68
19,700
251
0
251
-730
-48
-778
19,153
20
19,172
-5,624
-6
-5,630
-11
0
-11
13,518
14
13,532
2
Staff costs
Depreciation
1,7
Share of the result of associated companies
4
Profit (loss) before tax
Direct taxes
Minority interest
5
The items resulting from finance leases (IAS 17) and revenue recognition (IAS 18) increased non-current interest-bearing liabilities as follows:
Current interest-bearing liabilities
Total
1.1.2004
31.12.2004
1,414
1,052
346
367
1,760
1,419
5. Deferred tax assets and liabilities, and income taxes
Deferred tax assets (IAS 12) have been recorded based on the difference between the IFRS balance sheet and taxation resulting from revenue
recognition, a total of TEUR 234 on 1 January 2004, and TEUR 153 on 31 December 2004. As a result of the decreasing temporary
difference, deferred tax assets will disappear during upcoming financial periods.
Deferred tax liabilities (IAS 12) were recognised based on the difference between the IFRS balance sheet and taxation resulting from stocks, a
total of TEUR 186 on 1 January 2004, and TEUR 112 on 31 December 2004.
6. Other liabilities
Residual-value guarantees resulting from Ponsse Group’s repurchase commitments were recognised under other non-current creditors, and
other current creditors. These items will be recognised as income when the related contractual obligations cease.
Distribution:
To parent company shareholders
To minority holders
Earnings per share calculated on the profit
owned by parent company shareholders:
13,507
1.1.2004
31.12.2004
492
215
Other current liabilities
382
315
Total
874
530
13,521
11
11
0,96
0,97
Notes to the reconciliation of capital and reserves on 1 Jan. 2004 and 31 Dec. 2004, and of the profit of the accounting period
1 Jan.-31 Dec. 2004
7. Depreciations
Leases classified as finance leases were capitalised as required by IAS 17, and items under IAS 18 resulting from revenue recognition were
capitalised on the balance sheet. Under IAS 16, the revaluation of EUR 841 thousand for Ponsse Oyj’s premises in Vieremä was reversed
on the IFRS opening balance sheet, with its net effect on tangible assets amounting to TEUR 986 on 1 January 2004, and TEUR 577 on 31
December 2004.
In comparison with the FAS-compliant financial statements policy, the depreciations increased by TEUR 413 due to property, plant, and
equipment that were purchased by finance lease contracts and activated in the opening balance sheet.
2. Stocks
Statement on the essential corrections to the cash flow calculation
Stocks were stated as required by IAS 2 i.e., fixed acquisition and manufacturing costs and depreciation attributed to stocks were capitalised,
totalling TEUR 643 on 1 January 2004, and TEUR 387 on 31 December 2004.
There are no major differences between the IFRS-compliant and FAS-compliant cash flow calculations.
3. Total capital and reserves, and minority interest
The table below present a summary of the effects the adoption of IFRS standards had on Group’s retained earnings.
1.1.2004
TEUR
TEUR
37,678
29,368
IAS 16 Property, Plant, and Equipment
-841
-841
IAS 17 Leases and IAS 18 Revenue
-807
-530
IAS 2 Stocks
643
387
Retained earnings under FAS
IAS 12 Income taxes
Retained earnings under IFRS
72
31.12.2004
Ponsse 2005
48
40
36,721
28,424
Ponsse 2005
73
Reconciliation of profit of the accounting period 1 Jan.-31 Dec. 2004
TEUR
Turnover
4. Interest-bearing and other liabilities
reference
1
FAS
1.1- 31.12.2004
Effects of
adopting
IFRS
IFRS
1.1.- 31.12.2004
177,589
345
177,934
968
0
968
Non-current interest-bearing liabilities
1,453
0
1,453
-113,723
136
-113,587
-26,917
0
-26,917
-2,676
-413
-3,089
-17,063
0
-17,063
Operating profit (/loss)
19,632
68
19,700
251
0
251
-730
-48
-778
19,153
20
19,172
-5,624
-6
-5,630
-11
0
-11
13,518
14
13,532
2
Staff costs
Depreciation
1,7
Share of the result of associated companies
4
Profit (loss) before tax
Direct taxes
Minority interest
5
The items resulting from finance leases (IAS 17) and revenue recognition (IAS 18) increased non-current interest-bearing liabilities as follows:
Current interest-bearing liabilities
Total
1.1.2004
31.12.2004
1,414
1,052
346
367
1,760
1,419
5. Deferred tax assets and liabilities, and income taxes
Deferred tax assets (IAS 12) have been recorded based on the difference between the IFRS balance sheet and taxation resulting from revenue
recognition, a total of TEUR 234 on 1 January 2004, and TEUR 153 on 31 December 2004. As a result of the decreasing temporary
difference, deferred tax assets will disappear during upcoming financial periods.
Deferred tax liabilities (IAS 12) were recognised based on the difference between the IFRS balance sheet and taxation resulting from stocks, a
total of TEUR 186 on 1 January 2004, and TEUR 112 on 31 December 2004.
6. Other liabilities
Residual-value guarantees resulting from Ponsse Group’s repurchase commitments were recognised under other non-current creditors, and
other current creditors. These items will be recognised as income when the related contractual obligations cease.
Distribution:
To parent company shareholders
To minority holders
Earnings per share calculated on the profit
owned by parent company shareholders:
13,507
1.1.2004
31.12.2004
492
215
Other current liabilities
382
315
Total
874
530
13,521
11
11
0,96
0,97
Notes to the reconciliation of capital and reserves on 1 Jan. 2004 and 31 Dec. 2004, and of the profit of the accounting period
1 Jan.-31 Dec. 2004
7. Depreciations
Leases classified as finance leases were capitalised as required by IAS 17, and items under IAS 18 resulting from revenue recognition were
capitalised on the balance sheet. Under IAS 16, the revaluation of EUR 841 thousand for Ponsse Oyj’s premises in Vieremä was reversed
on the IFRS opening balance sheet, with its net effect on tangible assets amounting to TEUR 986 on 1 January 2004, and TEUR 577 on 31
December 2004.
In comparison with the FAS-compliant financial statements policy, the depreciations increased by TEUR 413 due to property, plant, and
equipment that were purchased by finance lease contracts and activated in the opening balance sheet.
2. Stocks
Statement on the essential corrections to the cash flow calculation
Stocks were stated as required by IAS 2 i.e., fixed acquisition and manufacturing costs and depreciation attributed to stocks were capitalised,
totalling TEUR 643 on 1 January 2004, and TEUR 387 on 31 December 2004.
There are no major differences between the IFRS-compliant and FAS-compliant cash flow calculations.
3. Total capital and reserves, and minority interest
The table below present a summary of the effects the adoption of IFRS standards had on Group’s retained earnings.
1.1.2004
TEUR
TEUR
37,678
29,368
IAS 16 Property, Plant, and Equipment
-841
-841
IAS 17 Leases and IAS 18 Revenue
-807
-530
IAS 2 Stocks
643
387
Retained earnings under FAS
IAS 12 Income taxes
Retained earnings under IFRS
72
31.12.2004
Ponsse 2005
48
40
36,721
28,424
Ponsse 2005
73
Per share data
1)
IFRS
IFRS
FAS
FAS
FAS
IFRS
IFRS
FAS
FAS
FAS
2005
2004
2003
2002
2001
2 005
2 004
2 003
2 002
2001
1.40
0.97
0.65
0.49
0.45
Extent of operation
226,095
177,934
166,034
134,726
123,264
3.67
2.47
3.08
2.76
2.59
Change, %
27.1
7.2
23.2
9.3
3.4
Nominal dividend per share, EUR
0.80(2
0.20
3.00
0.65
0.65
Foreign business operations and exports, %
65.4
62.0
55.8
58.1
61.5
Adjusted dividend per share, EUR
0.80
(2
0.20
1.50
0.33
0.33
Dividend per earnings, %
57.0
21.1
229.8
65.9
71.5
Turnover, TEUR
R&D expenditure
Capitalised
Expensed
R&D expenditure, total, TEUR
as % of turnover
Gross fixed asset investments, TEUR
461
329
19
0
0
Effective dividend yield, %
3.6
1.4
18.2
6.0
7.0
3,218
3,382
3,011
3,151
2,619
Price/earnings ratio (P/E)
15.9
15.1
12.6
10.9
10.2
3,679
3,711
3,030
3,151
2,619
Share performance
1.6
2.1
1.8
2.3
2.1
Lowest trading price
14.50
8.23
4.75
4.73
4.31
11,220
9,029
4,500
2,525
1,394
Highest trading price
23.29
16.00
9.50
5.70
6.04
as % of turnover
5.0
5.1
2.7
1.9
1.1
Closing price
22.29
14.30
8.23
5.38
4.63
Employees, average
729
607
553
521
518
Middle price
18.10
10.45
6.51
5.09
5.02
Turnover per employee, TEUR
310
293
300
259
238
Market capitalisation, MEUR
312.1
200.2
115.2
75.3
64.8
Order stock, MEUR
54.9
44.4
33.7
32.1
23.2
Total dividends paid, MEUR
11.2
Profitability
Operating profit, TEUR
as % of turnover
Profit before extraordinary items, TEUR
as % of turnover
Profit after extraordinary items, TEUR
as % of turnover
Profit for the period, TEUR
as % of turnover
Shares traded
29,051
19,700
14,253
10,934
9,157
12.8
11.1
8.6
8.1
7.4
28,111
19,172
13,050
9,802
9,168
12.4
10.8
7.9
7.3
7.4
28,110
19,172
13,050
9,802
9,168
12.4
10.8
7.9
7.3
7.4
19,629
13,532
9,139
6,907
6,366
8.7
7.6
5.5
5.1
5.2
ROE, %
45.5
34.0
22.4
18.5
18.0
ROI, %
37.7
29.5
22.5
18.2
18.9
2.5
2.2
3.2
2.4
2.8
Equity ratio, %
47.6
36.0
55.7
52.4
53.3
Gearing, %
23.5
47.4
16.7
26.6
31.2
Interest-bearing liabilities, TEUR
24,398
32,291
17,767
22,200
20,172
Non-interest-bearing liabilities, TEUR
26,152
26,052
15,055
13,092
11,725
Shares traded, %
(2
2.8
21.0
4.6
4.6
2,185,216
3,745,292
2,311,518
932,048
502,024
15.6
26.8
16.5
6.7
3.6
Weighted adjusted number of shares
during the financial year
14,000,000
14,000,000
14,000,000
14,000,000
14,000,000
Adjusted number of shares
on the closing day
14,000,000
14,000,000
14,000,000
14,000,000
14,000,000
1) Per-share data has been adjusted to reflect the number of shares after the 2004 scrip issue
2) Board of Directors’ proposal to the Annual General Meeting held on 15 March 2006.
Financial position
Current ratio
74
Ponsse 2005
Ponsse 2005
75
Per share data
1)
IFRS
IFRS
FAS
FAS
FAS
IFRS
IFRS
FAS
FAS
FAS
2005
2004
2003
2002
2001
2 005
2 004
2 003
2 002
2001
1.40
0.97
0.65
0.49
0.45
Extent of operation
226,095
177,934
166,034
134,726
123,264
3.67
2.47
3.08
2.76
2.59
Change, %
27.1
7.2
23.2
9.3
3.4
Nominal dividend per share, EUR
0.80(2
0.20
3.00
0.65
0.65
Foreign business operations and exports, %
65.4
62.0
55.8
58.1
61.5
Adjusted dividend per share, EUR
0.80
(2
0.20
1.50
0.33
0.33
Dividend per earnings, %
57.0
21.1
229.8
65.9
71.5
Turnover, TEUR
R&D expenditure
Capitalised
Expensed
R&D expenditure, total, TEUR
as % of turnover
Gross fixed asset investments, TEUR
461
329
19
0
0
Effective dividend yield, %
3.6
1.4
18.2
6.0
7.0
3,218
3,382
3,011
3,151
2,619
Price/earnings ratio (P/E)
15.9
15.1
12.6
10.9
10.2
3,679
3,711
3,030
3,151
2,619
Share performance
1.6
2.1
1.8
2.3
2.1
Lowest trading price
14.50
8.23
4.75
4.73
4.31
11,220
9,029
4,500
2,525
1,394
Highest trading price
23.29
16.00
9.50
5.70
6.04
as % of turnover
5.0
5.1
2.7
1.9
1.1
Closing price
22.29
14.30
8.23
5.38
4.63
Employees, average
729
607
553
521
518
Middle price
18.10
10.45
6.51
5.09
5.02
Turnover per employee, TEUR
310
293
300
259
238
Market capitalisation, MEUR
312.1
200.2
115.2
75.3
64.8
Order stock, MEUR
54.9
44.4
33.7
32.1
23.2
Total dividends paid, MEUR
11.2
Profitability
Operating profit, TEUR
as % of turnover
Profit before extraordinary items, TEUR
as % of turnover
Profit after extraordinary items, TEUR
as % of turnover
Profit for the period, TEUR
as % of turnover
Shares traded
29,051
19,700
14,253
10,934
9,157
12.8
11.1
8.6
8.1
7.4
28,111
19,172
13,050
9,802
9,168
12.4
10.8
7.9
7.3
7.4
28,110
19,172
13,050
9,802
9,168
12.4
10.8
7.9
7.3
7.4
19,629
13,532
9,139
6,907
6,366
8.7
7.6
5.5
5.1
5.2
ROE, %
45.5
34.0
22.4
18.5
18.0
ROI, %
37.7
29.5
22.5
18.2
18.9
2.5
2.2
3.2
2.4
2.8
Equity ratio, %
47.6
36.0
55.7
52.4
53.3
Gearing, %
23.5
47.4
16.7
26.6
31.2
Interest-bearing liabilities, TEUR
24,398
32,291
17,767
22,200
20,172
Non-interest-bearing liabilities, TEUR
26,152
26,052
15,055
13,092
11,725
Shares traded, %
(2
2.8
21.0
4.6
4.6
2,185,216
3,745,292
2,311,518
932,048
502,024
15.6
26.8
16.5
6.7
3.6
Weighted adjusted number of shares
during the financial year
14,000,000
14,000,000
14,000,000
14,000,000
14,000,000
Adjusted number of shares
on the closing day
14,000,000
14,000,000
14,000,000
14,000,000
14,000,000
1) Per-share data has been adjusted to reflect the number of shares after the 2004 scrip issue
2) Board of Directors’ proposal to the Annual General Meeting held on 15 March 2006.
Financial position
Current ratio
74
Ponsse 2005
Ponsse 2005
75
RETURN ON EQUITY (ROE), %
=
Result before extraordinary items – income taxes (incl. change in deferred taxes)
Shareholders’ equity + minority interest (average)
RETURN ON INVESTMENT (ROI), %
=
Result before extraordinary items + interest and similar charges
x 100
Balance sheet total – non-interest-bearing liabilities (average)
EQUITY RATIO, %
=
Shareholders’ equity + minority interest
Balance sheet total – advance payments received
GEARING, %
=
Interest-bearing liabilities – cash in hand and at banks and current investments
x 100
THE FINANCIAL YEAR
=
Average of the number of staff at the end of each month.
The calculation has been adjusted for part-time employees.
EARNINGS PER SHARE (EPS)
=
Result before extraordinary items – taxes (incl. change in deferred taxes) -/+ minority interest
Average adjusted number of shares during the financial year
SHAREHOLDERS’ EQUITY PER SHARE
=
Shareholders’ equity
Adjusted number of shares at balance sheet date
ADJUSTED DIVIDEND PER SHARE
=
Dividend per share
Adjustment coefficients for share issues after the financial year
DIVIDEND PER EARNINGS, %
=
Dividend per share
Earnings per share
EFFECTIVE DIVIDEND YIELD, %
=
Adjusted dividend per share
Adjusted closing price on last trading date of financial year
PRICE/EARNINGS RATIO (P/E)
=
Earnings per share
MARKET CAPITALIZATION
=
The number of shares at end of the financial year multiplied by the adjusted closing
price on the last trading day of the financial year.
SHARE TRADING, %
=
Number of shares traded during the financial year
x 100
Average number of shares during the financial year
AVERAGE NUMBER OF STAFF DURING
76
Ponsse 2005
x 100
x 100
x 100
x 100
Ponsse 2005
77
RETURN ON EQUITY (ROE), %
=
Result before extraordinary items – income taxes (incl. change in deferred taxes)
Shareholders’ equity + minority interest (average)
RETURN ON INVESTMENT (ROI), %
=
Result before extraordinary items + interest and similar charges
x 100
Balance sheet total – non-interest-bearing liabilities (average)
EQUITY RATIO, %
=
Balance sheet total – advance payments received
GEARING, %
=
Interest-bearing liabilities – cash in hand and at banks and current investments
x 100
THE FINANCIAL YEAR
=
Average of the number of staff at the end of each month.
The calculation has been adjusted for part-time employees.
EARNINGS PER SHARE (EPS)
=
Result before extraordinary items – taxes (incl. change in deferred taxes) -/+ minority interest
Average adjusted number of shares during the financial year
SHAREHOLDERS’ EQUITY PER SHARE
=
Adjusted number of shares at balance sheet date
ADJUSTED DIVIDEND PER SHARE
=
Dividend per share
Adjustment coefficients for share issues after the financial year
DIVIDEND PER EARNINGS, %
=
Dividend per share
Earnings per share
EFFECTIVE DIVIDEND YIELD, %
=
Adjusted dividend per share
PRICE/EARNINGS RATIO (P/E)
=
Earnings per share
MARKET CAPITALIZATION
=
The number of shares at end of the financial year multiplied by the adjusted closing
price on the last trading day of the financial year.
SHARE TRADING, %
=
Number of shares traded during the financial year
x 100
Average number of shares during the financial year
AVERAGE NUMBER OF STAFF DURING
76
Ponsse 2005
x 100
x 100
x 100
x 100
Ponsse 2005
77
PARENT COMPANY’S FINANCIAL STATEMENTS (FAS)
Balance sheet
Note(1
Turnover
2
Increase (+) or decrease (-) in stocks of finished goods and work in progress
2005
2004
TEUR
TEUR
179,929
146,805
ASSETS
Note(1
2005
2004
TEUR
TEUR
Non-current assets
736
775
Intangible assets
11.1
1,923
1,860
2,131
565
Tangible assets
11.2
18,722
13,562
-116,412
-93,795
Financial assets
11.3, 12
-23,834
-20,747
-2,150
-2,040
-16,387
-13,368
Current assets
Operating profit
24,014
18,196
Stocks
13
14.1
257
41
Current receivables
14.2
35,014
33,350
4,738
8,921
63,868
63,632
97,059
89,191
2005
2004
TEUR
TEUR
3
Staff costs
4, 5
Depreciation
7
8
Extraordinary items
Appropriations
9
Direct taxes
10
596
903
24,610
19,098
1,000
0
25,610
19,098
182
467
-6,797
-5,743
18,994
13,822
Total assets
LIABILITIES
Note(1
15
Share capital
Retained earnings
12,547
10,137
33,192
25,559
23,859
21,320
7,000
7,000
24,337
13,315
18,994
13,822
50,331
34,137
Appropriations
16
2,032
2,214
Provisions for liabilities and charges
17
6,313
4,142
Non-current
18
15,320
21,020
Current
19
23,063
27,678
38,383
48,698
97,059
89,191
Creditors
Total liabilities
1) The note refers to the Notes to the Accounts on pages 81 - 90.
78
Ponsse 2005
Ponsse 2005
79
Balance sheet
Note(1
Turnover
2
Increase (+) or decrease (-) in stocks of finished goods and work in progress
2005
2004
TEUR
TEUR
179,929
146,805
ASSETS
Note(1
2005
2004
TEUR
TEUR
Non-current assets
736
775
Intangible assets
11.1
1,923
1,860
2,131
565
Tangible assets
11.2
18,722
13,562
-116,412
-93,795
Financial assets
11.3, 12
-23,834
-20,747
-2,150
-2,040
-16,387
-13,368
Current assets
Operating profit
24,014
18,196
Stocks
13
14.1
257
41
Current receivables
14.2
35,014
33,350
4,738
8,921
63,868
63,632
97,059
89,191
2005
2004
TEUR
TEUR
3
Staff costs
4, 5
Depreciation
7
8
Extraordinary items
Appropriations
9
Direct taxes
10
596
903
24,610
19,098
1,000
0
25,610
19,098
182
467
-6,797
-5,743
18,994
13,822
Total assets
LIABILITIES
Note(1
15
Share capital
Retained earnings
12,547
10,137
33,192
25,559
23,859
21,320
7,000
7,000
24,337
13,315
18,994
13,822
50,331
34,137
Appropriations
16
2,032
2,214
Provisions for liabilities and charges
17
6,313
4,142
Non-current
18
15,320
21,020
Current
19
23,063
27,678
38,383
48,698
97,059
89,191
Creditors
Total liabilities
1) The note refers to the Notes to the Accounts on pages 81 - 90.
78
Ponsse 2005
Ponsse 2005
79
2005
2004
TEUR
TEUR
Operating profit
24,014
18,196
Depreciation and value adjustments
2,150
2,040
Unrealised exchange gains and losses
-1,406
-445
Change in provisions
2,171
1,858
0
0
26,929
21,650
-258
-2,138
-2,539
-2,624
-112
7,435
24,019
24,323
1,240
1,282
Interest paid
-754
-514
Dividends received
101
124
3
-303
Income taxes paid
-8,519
-4,641
16,091
20,269
Other adjustments
1. Accounting policies
Ponsse Oyj’s financial statements have
been prepared in accordance with the
Finnish Accounting Standards (FAS). The
information in the financial statements
is given in TEUR (EUR 1,000), and is
based on original acquisition costs, unless
otherwise stated in the accounting policies. The financial statements have been
presented in accordance with the profit
and loss account by type of expense.
Cash flow from operations before financial items and income taxes
Interest received
1,000
0
17,091
20,269
Foreign currency monetary items are recorded using the rates prevailing at the
transaction date, and any receivables and
liabilities on the balance sheet are translated into the financial statements at the
closing rate. All resulting translation differences are recorded into the financial
items of the accounts.
RECOGNITION OF SALES
Sales are recognised upon legal completion. Indirect taxes and given discounts,
among others, have been deducted from
the sales revenue before calculating the
turnover. Exchange rate differences in
sales are recorded into the financial items.
Investments:
Investments in tangible and intangible assets1)
-9,868
-12,591
0
0
Investments in other assets
0
0
-9,868
-12,591
-2,690
3,306
INCOME TAXES
Income taxes have been recorded according to the Finnish tax legislation.
LEASING
CURRENT ASSETS
Leasing expenses have been recorded as
annual expenses.
Current assets are valued at the direct
manufacturing or acquisition cost, the
replacement cost or likely selling price,
whichever is the lower. The Standard
Cost method is used as a basis for calculating the value of materials and supplies
in stock.
RESEARCH AND DEVELOPMENT
EXPENSES
Development expenses that fulfil the
activation requirements of Section 8 in
Chapter 5 of the Accounting Act have
been booked under intangible assets on
the balance sheet. Research expenses are
recorded directly as annual expenses. The
method for booking R&D expenses was
changed in 2003.
PENSIONS
Statutory pension cover for Group employees has been arranged through pension insurance companies and there are
no outstanding pension liabilities.
FIXED ASSETS
Fixed assets are booked in the balance
sheet at the direct acquisition cost less
depreciation according to plan, which
has been calculated on a straight-line
basis over the expected economic life.
Depreciation times are:
Intangible rights ..............................5 years
Other capitalised long-term
expenses ....................................... 3-5 years
Buildings and structures ................20 years
Machinery and equipment........ 3-10 years
GUARANTEE PROVISION
Likely guarantee expenses in respect of
products delivered are booked under
provisions for liabilities and charges.
COMPARABILITY WITH
PREVIOUS YEARS
The method for booking the used machines that were purchased in connection with selling new machines has been
changed in the financial statements of
2005. The value adjustment made at
the time of purchase of used machinery has been interpreted as actually being a discount on the sales price of new
machinery and, therefore, the change in
value has been accounted for as an adjustment item in the consolidated turnover. Previously, until the end of Q3, this
type of value adjustment has been presented in materials and services. The financial statements for 2004 have been
rearranged accordingly to make them
comparable.
Financing:
Increase (-)/decrease (+) in current interest-bearing operating receivables
Increase (+) /decrease (-) in non-current loans
Paid dividends
0
77
-5,700
9,669
-216
107
-2,800
-21,000
-11,406
-7,840
-4,183
-161
8,921
9,082
4,738
8,921
1) Shares in the acquired subsidiary are included in the item Investments in tangible and intangible assets.
80
Ponsse 2005
Ponsse 2005
81
2005
2004
TEUR
TEUR
Operating profit
24,014
18,196
Depreciation and value adjustments
2,150
2,040
Unrealised exchange gains and losses
-1,406
-445
Change in provisions
2,171
1,858
0
0
26,929
21,650
-258
-2,138
-2,539
-2,624
-112
7,435
24,019
24,323
1,240
1,282
Interest paid
-754
-514
Dividends received
101
124
3
-303
Income taxes paid
-8,519
-4,641
16,091
20,269
Other adjustments
1. Accounting policies
Ponsse Oyj’s financial statements have
been prepared in accordance with the
Finnish Accounting Standards (FAS). The
information in the financial statements
is given in TEUR (EUR 1,000), and is
based on original acquisition costs, unless
otherwise stated in the accounting policies. The financial statements have been
presented in accordance with the profit
and loss account by type of expense.
Cash flow from operations before financial items and income taxes
Interest received
1,000
0
17,091
20,269
Foreign currency monetary items are recorded using the rates prevailing at the
transaction date, and any receivables and
liabilities on the balance sheet are translated into the financial statements at the
closing rate. All resulting translation differences are recorded into the financial
items of the accounts.
RECOGNITION OF SALES
Sales are recognised upon legal completion. Indirect taxes and given discounts,
among others, have been deducted from
the sales revenue before calculating the
turnover. Exchange rate differences in
sales are recorded into the financial items.
Investments:
Investments in tangible and intangible assets1)
-9,868
-12,591
0
0
Investments in other assets
0
0
-9,868
-12,591
-2,690
3,306
INCOME TAXES
Income taxes have been recorded according to the Finnish tax legislation.
LEASING
CURRENT ASSETS
Leasing expenses have been recorded as
annual expenses.
Current assets are valued at the direct
manufacturing or acquisition cost, the
replacement cost or likely selling price,
whichever is the lower. The Standard
Cost method is used as a basis for calculating the value of materials and supplies
in stock.
RESEARCH AND DEVELOPMENT
EXPENSES
Development expenses that fulfil the
activation requirements of Section 8 in
Chapter 5 of the Accounting Act have
been booked under intangible assets on
the balance sheet. Research expenses are
recorded directly as annual expenses. The
method for booking R&D expenses was
changed in 2003.
PENSIONS
Statutory pension cover for Group employees has been arranged through pension insurance companies and there are
no outstanding pension liabilities.
FIXED ASSETS
Fixed assets are booked in the balance
sheet at the direct acquisition cost less
depreciation according to plan, which
has been calculated on a straight-line
basis over the expected economic life.
Depreciation times are:
Intangible rights ..............................5 years
Other capitalised long-term
expenses ....................................... 3-5 years
Buildings and structures ................20 years
Machinery and equipment........ 3-10 years
GUARANTEE PROVISION
Likely guarantee expenses in respect of
products delivered are booked under
provisions for liabilities and charges.
COMPARABILITY WITH
PREVIOUS YEARS
The method for booking the used machines that were purchased in connection with selling new machines has been
changed in the financial statements of
2005. The value adjustment made at
the time of purchase of used machinery has been interpreted as actually being a discount on the sales price of new
machinery and, therefore, the change in
value has been accounted for as an adjustment item in the consolidated turnover. Previously, until the end of Q3, this
type of value adjustment has been presented in materials and services. The financial statements for 2004 have been
rearranged accordingly to make them
comparable.
Financing:
Increase (-)/decrease (+) in current interest-bearing operating receivables
Increase (+) /decrease (-) in non-current loans
Paid dividends
0
77
-5,700
9,669
-216
107
-2,800
-21,000
-11,406
-7,840
-4,183
-161
8,921
9,082
4,738
8,921
1) Shares in the acquired subsidiary are included in the item Investments in tangible and intangible assets.
80
Ponsse 2005
Ponsse 2005
81
2. Turnover by market area
7. Depreciation and value adjustments
2005
2004
2005
2004
TEUR
TEUR
TEUR
TEUR
Nordic countries
99,621
88,799
Depreciation according to plan
2,150
2,040
Rest of Europe
47,141
33,532
Value adjustment of fixed assets and non-current investments
607
0
20,643
15,119
Total
2,758
2,040
Other countries
12,524
9,354
179,929
146,805
2005
2004
TEUR
TEUR
101
85
1,084
1,097
157
184
0
389
5,264
3,857
6,504
5,527
663
588
85
0
5,261
4,121
6,009
4,710
596
902
Total
8. Financial income and expences
3. Raw materials and services
2005
2004
Income from participating interests
TEUR
TEUR
Other interest and similar income
116,799
94,161
-2,222
-1,864
Raw materials and consumables
Purchases during the accounting period
External services
Raw materials and services, total
From Group companies
1,836
1,498
116,412
93,794
Interest received
From others
Interest received
Value adjustments of non-current financial assets
4. Staff costs
Total
2005
2004
Interest expences and finance costs
TEUR
TEUR
19,398
16,967
Pension costs
3,027
2,695
Interest expences
Other social security costs
1,408
1,085
23,834
20,747
Wages and salaries
Total
To others
Other expences
Total
5. Management salaries and remuneration
Financial income and expences, total
2005
2004
TEUR
TEUR
Managing directors
349
Members of the Board of Directors
186
127
Total
186
476
At year-end 2005, the shareholders’ equity in Ponsse USA Inc was TEUR 1,192. A value re-adjustment of TEUR 522 was booked in the parent
company’s accounts for 2005. Subsequently, the book value in the parent company corresponds to Ponsse USA Inc’s shareholders’ equity.
9. Appropriations
Increase (-)/decrease (+) in depreciation difference
2005
2004
TEUR
TEUR
182
467
2005
2004
TEUR
TEUR
6,797
5,743
-
-
6,797
5,743
6. Staff
2005
2004
persons
persons
Employees
320
302
191
189
Total
511
491
2005
2004
6.1 Average number of staff
10. Direct taxes
Income taxes
Change in deferred tax
Total
6.2 At the end of accounting period
82
persons
persons
Employees
325
309
186
190
Total
511
499
Ponsse 2005
Ponsse 2005
83
7. Depreciation and value adjustments
Depreciation according to plan
Value adjustment of fixed assets and non-current investments
Total
2005
2004
TEUR
TEUR
2,150
2,040
607
0
2,758
2,040
2005
2004
TEUR
TEUR
101
85
1,084
1,097
157
184
0
389
5,264
3,857
6,504
5,527
663
588
85
0
5,261
4,121
6,009
4,710
596
902
8. Financial income and expences
Income from participating interests
Other interest and similar income
From Group companies
Interest received
From others
Interest received
Total
Interest expenses and finance costs
To others
Interest expenses
Other expenses
Total
Financial income and expences, total
At year-end 2005, the shareholders’ equity in Ponsse USA Inc was TEUR 1,192. A value re-adjustment of TEUR 522 was booked in the parent
company’s accounts for 2005. Subsequently, the book value in the parent company corresponds to Ponsse USA Inc’s shareholders’ equity.
9. Appropriations
Increase (-)/decrease (+) in depreciation difference
2005
2004
TEUR
TEUR
182
467
2005
2004
TEUR
TEUR
6,797
5,743
-
-
6,797
5,743
10. Direct taxes
Income taxes
Change in deferred tax
Total
Ponsse 2005
83
11. Fixed assets and other non-current financial assets
2005
2004
TEUR
TEUR
11.1 Intangible assets
Development costs
Acquisition cost at 1 Jan.
405
86
Increase
354
527
Decrease
-100
-208
659
405
1,923
1,860
2005
2004
TEUR
TEUR
350
349
Increase
0
1
Decrease
0
0
350
350
12,149
11,977
3,650
172
Acquisition cost and book value at 31 Dec.
61
0
0
61
Acquisition costs at 31 Dec.
61
61
Accumulated depreciation at 1 Jan.
-1
0
Increase
Intangible assets, total
-12
-1
11.2 Tangible assets
Accumulated depreciation at 31 Dec.
-13
-1
Land and water
Book value at 31 Dec.
48
60
Depreciation for the accounting period
Patent expenses
Increase
Acquisition cost at 31 Dec.
384
370
42
14
426
384
Buildings
-61
-22
Increase
-41
-39
Decrease
-4
0
-102
-61
Transfers between items
0
0
324
323
Acquisition cost at 31 dec.
15,794
12,149
-5,345
-4,678
Intangible rights
Increase
85
85
0
0
85
85
Accumulated depreciation on on decrease and transfers
Revaluations
-80
-79
0
-1
-80
-80
5
5
Increase
Decrease
2,441
2,233
114
287
-54
-79
2,501
2,441
-1,375
-1,141
54
79
-293
-313
-1,613
-1,375
887
1,066
Accumulated depreciation on decrease and transfers
0
-667
-6,013
-5,345
841
841
10,622
7,645
A revaluation of TEUR 841 was made on 31 August 1994 to the parent company’s business premises at Vieremä. Depreciation has not been
made for the revaluation. The revaluation includes a deferred tax liability of TEUR 244. The revaluation was made on the basis of legislation then
in effect because the likely sales price of the premises is permanently and substantially larger than the acquisition cost.
Machinery and equipment
Other capitalised long-term expenses
2
-671
12,109
11,867
Increase
2,295
644
Decrease
-1,137
-402
0
0
13,267
12,109
-8,908
-8,287
1,004
398
-1,133
-1,020
-9,038
-8,909
4,230
3,200
The book value at 31 December 2005 of the machinery and equipment included in the parent company’s operating machinery and equipment
was TEUR 2,720 (TEUR 2,214 on 31 December 2004).
84
Ponsse 2005
Ponsse 2005
85
11. Fixed assets and other non-current financial assets
2005
2004
TEUR
TEUR
11.1 Intangible assets
Development costs
405
86
Increase
354
527
Decrease
-100
-208
659
405
1,923
1,860
2005
2004
TEUR
TEUR
350
349
Increase
0
1
Decrease
0
0
350
350
12,149
11,977
3,650
172
61
0
0
61
Acquisition costs at 31 Dec.
61
61
-1
0
Increase
Intangible assets, total
-12
-1
11.2 Tangible assets
-13
-1
Land and water
48
60
Patent expenses
Increase
384
370
42
14
426
384
Buildings
-61
-22
Increase
-41
-39
Decrease
-4
0
-102
-61
0
0
324
323
Acquisition cost at 31 dec.
15,794
12,149
-5,345
-4,678
Intangible rights
Increase
85
85
0
0
85
85
Accumulated depreciation on on decrease and transfers
Revaluations
-80
-79
0
-1
-80
-80
5
5
Increase
Decrease
2,441
2,233
114
287
-54
-79
2,501
2,441
-1,375
-1,141
54
79
-293
-313
-1,613
-1,375
887
1,066
0
-667
-6,013
-5,345
841
841
10,622
7,645
A revaluation of TEUR 841 was made on 31 August 1994 to the parent company’s business premises at Vieremä. Depreciation has not been
made for the revaluation. The revaluation includes a deferred tax liability of TEUR 244. The revaluation was made on the basis of legislation then
in effect because the likely sales price of the premises is permanently and substantially larger than the acquisition cost.
Machinery and equipment
Other capitalised long-term expenses
2
-671
12,109
11,867
Increase
2,295
644
Decrease
-1,137
-402
0
0
13,267
12,109
-8,908
-8,287
1,004
398
-1,133
-1,020
-9,038
-8,909
4,230
3,200
The book value at 31 December 2005 of the machinery and equipment included in the parent company’s operating machinery and equipment
was TEUR 2,720 (TEUR 2,214 on 31 December 2004).
84
Ponsse 2005
Ponsse 2005
85
Prepayments and unfinished acquisitions
12.2 Associated companies
2,366
13
Increase
6,324
2,648
Decrease
-5,170
-295
3,520
2,366
Tangible assets, total
18,722
13,562
11.3 Financial assets
2005
2004
TEUR
TEUR
Name and domicile
12.3 Other shares and similar rights of ownership
Other shares and similar rights of ownership
Share of parent company of shares and votes, %
34,00
Shares/similar rights of ownership owned by parent ccompany book value
18
13. Stocks
Holding in group companies
2005
2004
TEUR
TEUR
16,603
14,745
538
470
12,410
3,664
Work in progress
2,039
8,746
1,281
853
0
0
Other stocks
5,438
5,252
14,450
12,410
Total
23,859
21,320
14. Receivables
2005
2004
TEUR
TEUR
216
0
35
Increase
Decrease
-2,695
-3,084
Value adjustments
-607
0
Cancellation of value adjustment
522
390
-2,780
-2,694
11,670
9,716
Loans receivable
41
Subordinated loan
525
69
Other receivables
0
6
Total
525
69
Non-current receivables, total
257
41
2005
2004
335
335
0
0
335
335
Receivables from group companies
14.1 Non-current
Receivables from other members of the group
Loans receivable
Increase
Please see also note 13.2.
14.2 Current
Trade receivables
TEUR
TEUR
6,886
10,181
26,797
22,841
947
83
83
99
302
146
Trade receivables
Other receivables
Decrease
18
22
Accrued income
-1
-3
Grants
18
18
Accrued income
Total
Financial assets, total
12,547
10,137
Current receivables, total
384
245
35,014
33,350
12. Shares and similar rights of ownership
12.1 Group companies
Name and domicile
100,00
100,00
100,00
Ponsse UK Ltd., Lockerbie, United Kingdom
100,00
Ponsse North America, Inc., Rhinelander, USA
100,00
100,00
100,00
100,00
86
Ponsse AB, Surahammar, Sweden
Ponsse 2005
91,80
Ponsse 2005
87
Prepayments and unfinished acquisitions
12.2 Associated companies
2,366
13
Increase
6,324
2,648
Decrease
-5,170
-295
3,520
2,366
Tangible assets, total
18,722
13,562
11.3 Financial assets
2005
2004
TEUR
TEUR
Name and domicile
12.3 Other shares and similar rights of ownership
34,00
Shares/similar rights of ownership owned by parent ccompany book value
18
13. Stocks
2005
2004
TEUR
TEUR
16,603
14,745
538
470
12,410
3,664
Work in progress
2,039
8,746
1,281
853
0
0
Other stocks
5,438
5,252
14,450
12,410
Total
23,859
21,320
14. Receivables
2005
2004
TEUR
TEUR
216
0
35
Increase
Decrease
-2,695
-3,084
Value adjustments
-607
0
Cancellation of value adjustment
522
390
-2,780
-2,694
11,670
9,716
Loans receivable
41
Subordinated loan
525
69
Other receivables
0
6
Total
525
69
Non-current receivables, total
257
41
2005
2004
335
335
0
0
335
335
Receivables from group companies
14.1 Non-current
Loans receivable
Increase
Please see also note 13.2.
14.2 Current
Trade receivables
TEUR
TEUR
6,886
10,181
26,797
22,841
947
83
83
99
302
146
Trade receivables
Other receivables
Decrease
18
22
Accrued income
-1
-3
Grants
18
18
Accrued income
Total
Financial assets, total
12,547
10,137
Current receivables, total
384
245
35,014
33,350
12. Shares and similar rights of ownership
12.1 Group companies
Name and domicile
100,00
100,00
100,00
Ponsse UK Ltd., Lockerbie, United Kingdom
100,00
Ponsse North America, Inc., Rhinelander, USA
100,00
100,00
100,00
100,00
86
Ponsse AB, Surahammar, Sweden
Ponsse 2005
91,80
Ponsse 2005
87
15. Capital and reserves
18. Non-current creditors
2005
2004
2005
2004
TEUR
TEUR
TEUR
TEUR
15,320
21,020
7,000
3,500
Non-current creditors, total
15,320
21,020
2005
2004
Capital employees (IFRS)
Share capital at 1 Jan.
Capitalisation issue (IFRS)
0
3,500
7,000
7,000
Share premium account at 1 Jan.
0
2,545
0
-2,545
Share premium account at 31 Dec.
0
0
7,000
7,000
Retained earnings at 1 Jan.
27,137
Dividend distribution
Share capital at 31 Dec.
Debts falling due in five years or more
TEUR
TEUR
5,685
8,622
Total
5,685
8,622
35,270
2005
2004
-2,800
-21,000
TEUR
TEUR
0
-955
4,937
7,628
Exchange rate differences
0
0
311
243
Retained earnings at 31 Dec.
24,337
13,315
Trade creditors
9,630
12,350
Profit for the financial year
18,994
13,822
Liabilities to group companies
Non-restricted equity, total
43,331
27,137
Group trade creditors
1,768
0
Capital and reserves, total
50,331
34,137
Other Group payables
400
0
-
-
0
28
43,331
27,137
0
58
583
589
Capital employed (IFRS), total
Non-restricted equity
Portion of depreciation reserve and untaxed reserves booked under shareholders’ equity
Distributable funds from non-restricted equity
19. Current creditors
Ponsse Oyj’s registered share capital at 31 December 2005 was EUR 7,000,000 divided into 14,000,000 shares each having a nominal value
of EUR 0.50. All shares are of the same series and each share entitles its holder to one vote at shareholder meetings and gives an equal right
to a dividend. Ponsse Oyj has no outstanding convertible notes, bonds with warrants or options. Neither the company nor its subsidiaries hold
the company’s own shares. Ponsse Oyj’s Board of Directors is not currently authorised to purchase the company’s own shares, increase the
share capital or issue convertible notes or bonds with warrants.
16. Accumulated appropriations
Depreciation difference
Advances received
Accruals and deferred income
Advance invoicing
Other creditors
3,588
3,113
Interest matching
Staff cost creditors
136
227
Income tax liability
312
2,033
2005
2004
Accruals and deferred income in respect of stocks
419
188
TEUR
TEUR
Other accruals and deferred income
979
1,221
2,032
2,214
Total
Current creditors, total
5,434
6,782
23,063
27,678
17. Provisions for liabilities and charges
Guarantee provision
Other compulsory provisions
Provisions for liabilities and charges, total
88
Ponsse 2005
2005
2004
TEUR
TEUR
5,963
4,142
350
0
6,313
4,142
Ponsse 2005
89
15. Capital and reserves
18. Non-current creditors
2005
2004
2005
2004
TEUR
TEUR
TEUR
TEUR
15,320
21,020
7,000
3,500
Non-current creditors, total
15,320
21,020
2005
2004
Capital employees (IFRS)
Share capital at 1 Jan.
0
3,500
7,000
7,000
Share premium account at 1 Jan.
0
2,545
0
-2,545
Share premium account at 31 Dec.
0
0
7,000
7,000
Retained earnings at 1 Jan.
27,137
Dividend distribution
Share capital at 31 Dec.
Debts falling due in five years or more
TEUR
TEUR
5,685
8,622
Total
5,685
8,622
35,270
2005
2004
-2,800
-21,000
TEUR
TEUR
0
-955
4,937
7,628
Exchange rate differences
0
0
311
243
Retained earnings at 31 Dec.
24,337
13,315
Trade creditors
9,630
12,350
Profit for the financial year
18,994
13,822
Liabilities to group companies
Non-restricted equity, total
43,331
27,137
Group trade creditors
1,768
0
Capital and reserves, total
50,331
34,137
Other Group payables
400
0
-
-
0
28
43,331
27,137
0
58
583
589
Capital employed (IFRS), total
Non-restricted equity
Portion of depreciation reserve and untaxed reserves booked under shareholders’ equity
Distributable funds from non-restricted equity
19. Current creditors
Ponsse Oyj’s registered share capital at 31 December 2005 was EUR 7,000,000 divided into 14,000,000 shares each having a nominal value
of EUR 0.50. All shares are of the same series and each share entitles its holder to one vote at shareholder meetings and gives an equal right
to a dividend. Ponsse Oyj has no outstanding convertible notes, bonds with warrants or options. Neither the company nor its subsidiaries hold
the company’s own shares. Ponsse Oyj’s Board of Directors is not currently authorised to purchase the company’s own shares, increase the
share capital or issue convertible notes or bonds with warrants.
16. Accumulated appropriations
Depreciation difference
Advances received
Advance invoicing
Other creditors
3,588
3,113
Interest matching
Staff cost creditors
136
227
Income tax liability
312
2,033
2005
2004
Accruals and deferred income in respect of stocks
419
188
TEUR
TEUR
Other accruals and deferred income
979
1,221
2,032
2,214
Total
Current creditors, total
5,434
6,782
23,063
27,678
17. Provisions for liabilities and charges
Guarantee provision
Other compulsory provisions
Provisions for liabilities and charges, total
88
Ponsse 2005
2005
2004
TEUR
TEUR
5,963
4,142
350
0
6,313
4,142
Ponsse 2005
89
20. Pledges given, contingent and other liabilities
20.1 For own debt
2005
Debts for which mortgages have been pledged as collaterals
TEUR
TEUR
0
1,261
101
1,126
Chattel mortgages given
336
820
Mortgages given as collaterals, total
437
1,946
2005
2004
TEUR
TEUR
Nominal amount of leasing payments falling due in 2006
166
184
Nominal amount of leasing payments falling due threreafter
380
435
Total
546
619
2005
2004
TEUR
TEUR
884
763
2005
2004
TEUR
TEUR
14,690
10,616
TEUR
TEUR
-70
136
2005
2004
TEUR
TEUR
65
61
7,155
7,102
0
0
7,220
7,163
2004
20.2 Leasing commitments
20.3 Contingent liabilities on behalf of group companies (IFRS)
Guarantees given on behalf of group companies (IFRS)
20.4 Derivative liabilities (IFRS)
Nominal values
Foreign currency derivatives
Forward contracts (IFRS)
Market values
Foreign currency derivatives contracts are used solely to hedge against exchange rate fluctuations.
20.5 Other contingent liabilities
Other commitments
Total
The repurchase commitments include agreements on spreading the risk. The information concerning the year in comparison have been revised
in this respect.
90
Ponsse 2005
Ponsse 2005
91
20. Pledges given, contingent and other liabilities
20.1 For own debt
2005
Debts for which mortgages have been pledged as collaterals
TEUR
TEUR
0
1,261
101
1,126
Chattel mortgages given
336
820
Mortgages given as collaterals, total
437
1,946
2005
2004
TEUR
TEUR
Nominal amount of leasing payments falling due in 2006
166
184
Nominal amount of leasing payments falling due threreafter
380
435
Total
546
619
2005
2004
TEUR
TEUR
884
763
2005
2004
TEUR
TEUR
14,690
10,616
TEUR
TEUR
-70
136
2005
2004
TEUR
TEUR
65
61
7,155
7,102
0
0
7,220
7,163
2004
20.2 Leasing commitments
20.3 Contingent liabilities on behalf of group companies (IFRS)
Guarantees given on behalf of group companies (IFRS)
20.4 Derivative liabilities (IFRS)
Nominal values
Market values
Foreign currency derivatives contracts are used solely to hedge against exchange rate fluctuations.
20.5 Other contingent liabilities
Other commitments
Total
The repurchase commitments include agreements on spreading the risk. The information concerning the year in comparison have been revised
in this respect.
90
Ponsse 2005
Ponsse 2005
91
Ponsse Oyj’s share capital is EUR
7,000,000 divided into 14,000,000 shares.
The nominal value of the company’s
shares is EUR 0.50.Under the Articles of
Association, the minimum and maximum
share capital is EUR 3,000,000 and EUR
12,000,000 respectively, within which the
share capital may be increased or decreased
without amending the Articles of Association. All shares are of the same series and
each share entitles its holder to one vote at
shareholders’ meetings and gives an equal
right to dividends.
Share trading volume 1 Jan. – 30 Dec. 2005
Ponsse Oyj has no outstanding convertible notes, bonds with warrants or options.
Month
Purchase of own shares
Neither the company nor its subsidiaries
own the company’s own shares. Ponsse
Oyj’s board of directors is not currently
authorised to acquire its own shares.
Share trading
value, EUR
No. of shares
traded
Low,
EUR
High,
EUR
Average,
EUR
Closing
price,
EUR
Market
capitalisation,
EUR
No. of
shares
Relative
share trading
volume, %
1
3,537,612
222,532
14,50
17,75
15,90
17,74
120,400,000
14,000,000
1,59
2
9,777,920
538,482
16,50
19,51
18,13
17,70
138,670,000
14,000,000
3,85
3
1,597,889
94,472
14,80
17,81
16,87
15,14
122,500,000
14,000,000
0,67
4
4,894,107
296,998
15,10
18,22
16,43
17,45
145,180,000
14,000,000
2,12
5
2,009,515
112,844
16,90
18,21
17,77
17,99
143,500,000
14,000,000
0,81
6
1,697,251
92,739
17,60
18,99
18,29
18,68
148,750,000
14,000,000
0,66
7
1,879,193
96,335
18,20
20,28
19,53
19,57
154,000,000
14,000,000
0,69
8
1,428,752
74,636
18,50
19,70
19,14
19,00
153,300,000
14,000,000
0,53
9
3,463,058
181,956
18,60
19,49
19,03
19,00
159,810,000
14,000,000
1,30
10
2,072,574
112,148
17,03
19,30
18,46
18,60
187,600,000
14,000,000
0,80
11
2,964,177
154,808
18,00
19,98
18,92
19,79
209,300,000
14,000,000
1,11
12
4,425,491
207,266
19,72
23,29
21,55
22,29
200,200,000
14,000,000
1,48
39,747,539
2,185,216
14,50
23,29
18,19
14,000,000
15,61
Total
Increases in share capital 1994–2005
Subscription
period
Method of
increase
Nominal value
(EUR)
Number of
new shares
Increase in share
capital (EUR)
New share capital
(EUR)
31 Aug. 1994
Scrip issue
0.84
1,300,000
1,093,221.52
2,489,181.31
9 – 22 March 1995
Scrip issue
0.84
148,000
124,459.07
2,613,640.38
9 – 22 March 1995
Rights issue targeted
to general public
0.84
392,000
329,648.34
2,943,288.71
16 March 2000
Split 1: 2
0.42
-
0.00
2,943,288.71
16 March 2000
Scrip issue
0.50
-
556,711.29
3,500,000.00
29 Nov. 2004
Scrip issue
0.50
7,000,000
3,500,000
7,000,000.00
Shareholder profile as at 30 December 2005
No. of
shares
Authorization to increase
share capital
Taxation value of shares
For the 2005 tax year in Finland, the
confirmed taxation value of Ponsse Oyj’s
shares was EUR 15.99 per share.
No. of nomineeregistered shares
Nominee-registered,
%
No. of total
votes
Percentage of
total votes, %
Corporates
594,273
4.245
380
0.003
594,653
4.248
Financial institutions and insurance companies
665,520
4.754
534,735
3.82
1200,255
8.573
Public sector entities
636,420
4.546
0
0
636,420
4.546
11,109,998
79.357
0
0
11,109,998
79.357
429,400
3.067
0
0
429,400
3.067
29,104
0.208
170
0.001
29,274
0.209
13,464,715
96.177
535,285
3.824
14,000,000
100
Households
Non-profit organisations
The company’s Board of Directors is not
currently authorized to increase share
capital or to issue convertible bonds or
option rights.
Percentage of total
shares and votes
Abroad
Total
Analysis of shareholders as at 30 December 2005
Size of
shareholding
Number of
shareholders
Percentage of
shareholders
Number of
shares
Percentage of shares
and votes
1–100
1,044
101–1 000
1,993
29.533
66,204
0.473
56.379
783,563
1 001–10 000
5.597
444
12.560
1,248,574
8.918
10 001–100 000
40
1.132
1,239,215
8.852
over 100 001
14
0.396
10,662,444
76.160
3,535
100.00
14,000,000
100.000
Total
92
Ponsse 2005
Ponsse 2005
93
Ponsse Oyj’s share capital is EUR
7,000,000 divided into 14,000,000 shares.
The nominal value of the company’s
shares is EUR 0.50.Under the Articles of
Association, the minimum and maximum
share capital is EUR 3,000,000 and EUR
12,000,000 respectively, within which the
share capital may be increased or decreased
without amending the Articles of Association. All shares are of the same series and
each share entitles its holder to one vote at
shareholders’ meetings and gives an equal
right to dividends.
Share trading volume 1 Jan. – 30 Dec. 2005
Ponsse Oyj has no outstanding convertible notes, bonds with warrants or options.
Month
Purchase of own shares
Neither the company nor its subsidiaries
own the company’s own shares. Ponsse
Oyj’s board of directors is not currently
authorised to acquire its own shares.
Share trading
value, EUR
No. of shares
traded
Low,
EUR
High,
EUR
Average,
EUR
Closing
price,
EUR
Market
capitalisation,
EUR
No. of
shares
Relative
share trading
volume, %
1
3,537,612
222,532
14,50
17,75
15,90
17,74
120,400,000
14,000,000
1,59
2
9,777,920
538,482
16,50
19,51
18,13
17,70
138,670,000
14,000,000
3,85
3
1,597,889
94,472
14,80
17,81
16,87
15,14
122,500,000
14,000,000
0,67
4
4,894,107
296,998
15,10
18,22
16,43
17,45
145,180,000
14,000,000
2,12
5
2,009,515
112,844
16,90
18,21
17,77
17,99
143,500,000
14,000,000
0,81
6
1,697,251
92,739
17,60
18,99
18,29
18,68
148,750,000
14,000,000
0,66
7
1,879,193
96,335
18,20
20,28
19,53
19,57
154,000,000
14,000,000
0,69
8
1,428,752
74,636
18,50
19,70
19,14
19,00
153,300,000
14,000,000
0,53
9
3,463,058
181,956
18,60
19,49
19,03
19,00
159,810,000
14,000,000
1,30
10
2,072,574
112,148
17,03
19,30
18,46
18,60
187,600,000
14,000,000
0,80
11
2,964,177
154,808
18,00
19,98
18,92
19,79
209,300,000
14,000,000
1,11
12
4,425,491
207,266
19,72
23,29
21,55
22,29
200,200,000
14,000,000
1,48
39,747,539
2,185,216
14,50
23,29
18,19
14,000,000
15,61
Total
Increases in share capital 1994–2005
Subscription
period
Method of
increase
Nominal value
(EUR)
Number of
new shares
Increase in share
capital (EUR)
New share capital
(EUR)
31 Aug. 1994
Scrip issue
0.84
1,300,000
1,093,221.52
2,489,181.31
9 – 22 March 1995
Scrip issue
0.84
148,000
124,459.07
2,613,640.38
9 – 22 March 1995
Rights issue targeted
to general public
0.84
392,000
329,648.34
2,943,288.71
16 March 2000
Split 1: 2
0.42
-
0.00
2,943,288.71
16 March 2000
Scrip issue
0.50
-
556,711.29
3,500,000.00
29 Nov. 2004
Scrip issue
0.50
7,000,000
3,500,000
7,000,000.00
Shareholder profile as at 30 December 2005
No. of
shares
Authorization to increase
share capital
Taxation value of shares
For the 2005 tax year in Finland, the
confirmed taxation value of Ponsse Oyj’s
shares was EUR 15.99 per share.
No. of nomineeregistered shares
Nominee-registered,
%
No. of total
votes
Percentage of
total votes, %
Corporates
594,273
4.245
380
0.003
594,653
4.248
Financial institutions and insurance companies
665,520
4.754
534,735
3.82
1200,255
8.573
Public sector entities
636,420
4.546
0
0
636,420
4.546
11,109,998
79.357
0
0
11,109,998
79.357
429,400
3.067
0
0
429,400
3.067
29,104
0.208
170
0.001
29,274
0.209
13,464,715
96.177
535,285
3.824
14,000,000
100
Households
Non-profit organisations
The company’s Board of Directors is not
currently authorized to increase share
capital or to issue convertible bonds or
option rights.
Percentage of total
shares and votes
Abroad
Total
Analysis of shareholders as at 30 December 2005
Size of
shareholding
Number of
shareholders
Percentage of
shareholders
Number of
shares
Percentage of shares
and votes
1–100
1,044
101–1 000
1,993
29.533
66,204
0.473
56.379
783,563
1 001–10 000
5.597
444
12.560
1,248,574
8.918
10 001–100 000
40
1.132
1,239,215
8.852
over 100 001
14
0.396
10,662,444
76.160
3,535
100.00
14,000,000
100.000
Total
92
Ponsse 2005
Ponsse 2005
93
Shareholders as at 30 December 2005
Number of
shares
Percentage
of shares
Percentage
of votes
Vidgrén Einari
6,630,728
47.362343
47.362343
Vidgrén Juha
1,355,136
9.679543
9.679543
Varma Mutual Pension Insurance Company
475,000
3.392857
3.392857
4
HSS/Skandinaviska Enskilda Banken Ab, nominee-registered
457,332
3.266657
3.266657
5
OP-Suomi Kasvu Sijoitusrahasto
257,332
1.842000
1.842000
6
Thominvest Oy
208,800
1.491429
1.491429
7
Vidgrén Mikko Jooseppi
197,708
1.412200
1.412200
8
Einari Vidgrénin Foundation
194,000
1.385714
1.385714
9
Randelin Mari
191,540
1.368143
1.368143
10
Placeringsfonden Aktia Capital
160,000
1.142857
1.142857
Einari Vidgrén
11
Vidgrén Minna
149,480
1.067714
1.067714
Arto Tiitinen, President and CEO
12
Heikkinen Jonna
141,940
1.013857
1.013857
13
Vidgrén Jukka Tuomas
135,880
0.970571
0.970571
14
Lindbom Curt
107,020
0.764429
0.764429
15
Fondita Nordic Small Cap Placfond
100,000
0.714286
0.714286
16
Tapiola Mutual Pension Insurance Company
91,600
0.654286
0.654286
17
Nordea Foresta Equity Fund
86,000
0.614286
0.614286
18
Vidgrén Jarmo Kalle Johannes
80,960
0.578286
0.578286
19
Vidgrén Janne Ilmari
80,160
0.572571
0.572571
20
Turku and Kaarina Parish Union
76,960
0.549714
0.549714
21
Nordea Pankki Finland Plc.
74,943
0.535307
0.535307
22
Tiitinen Arto
57,040
0.407429
0.407429
23
Mäkinen Tommi
50,000
0.357143
0.357143
24
Laakkonen Mikko Kalervo
45,000
0.321429
0.321429
25
Tukinvest Oy
39,040
0.278857
0.278857
26
Seamen’s Pension Fund
33,440
0.238857
0.238857
27
Veikko Laine Oy
26,300
0.187857
0.187857
28
Päivikki and Sakari Sohlberg Foundation
23,360
0.166857
0.166857
29
Pemarstock Oy
21,520
0.153714
0.153714
30
Metsämiesten säätiö (Foresters’ Foundation)
No.
Name
1
2
3
Other shareholders
Total
20,000
0.142857
0.142857
2,431,781
17.365950
17.365950
14,000,000
100.00
100.00
The parent company’s distributable funds total EUR 43,330,599.49, and the group’s distributable funds total EUR 43,032,000.
The Board of Directors proposes that the distributable funds be disposed of as follows:
- Dividend of EUR 0.80 per share to be paid to shareholders, totalling
- Shareholders’ equity to be left
EUR 11,200,000.00
EUR 32,130,599.49
EUR 43,330,599.49
The record date for the payment of the dividend is 20 March 2006, and payments will be made on 27 March 2006.
Vieremä, 13 February 2006
Juha Vidgrén
Seppo Remes
Ilkka Kylävainio
Nils Hagman
Mirja Ryynänen
Auditor’s report
To the shareholders of Ponsse Oyj
We have audited the accounting records, the financial statements and the administration of Ponsse Oyj for the period 1.1.2005 –
31.12.2005. The Board of Directors and the Managing Director have prepared the Report of the Board of Directors and the consolidated financial statements prepared in accordance with International Financial Reporting Standards as adopted by the EU and the parent
company’s financial statements prepared in accordance with prevailing regulations in Finland, that includes parent company’s balance
sheet, income statement, cash flow statement and the notes to the financial statements. Based on our audit, we express an opinion on
the consolidated financial statements, the parent company’s financial statements and on the administration of the parent company.
We have conducted the audit in accordance with Finnish Standards on Auditing. Those standards require that we perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on
a test basis evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by the management as well as evaluating the overall financial statement presentation. The purpose of our audit of administration is to examine that the members of the Board of Directors and the Managing Director of the parent company have
complied with the rules of the Companies’ Act.
Consolidated financial statements
In our opinion the consolidated financial statements prepared in accordance with International Financial Reporting Standards as
adopted by the EU give a true and fair view, as referred to in the International Financial Reporting Standards as adopted by the EU and
defined in the Finnish Accounting Act, of the consolidated result of operations as well as of the financial position. The consolidated
financial statements can be adopted.
Parent company’s financial statements and administration
At the end 2005, Ponsse Oyj had 3,535 shareholders (2,511 at 31 December 2004).
In our opinion the parent company’s financial statements have been prepared in accordance with the Finnish Accounting Act and other
rules and regulations governing the preparation of financial statements in Finland. The financial statements give a true and fair view, as
defined in the Finnish Accounting Act, of the parent company’s result of operations as well as of the financial position. The financial
statements can be adopted and the members of the Board of Directors and the Managing Director of the parent company can be discharged from liability for the period audited by us. The proposal by the Board of Directors regarding the result from the period/distribution of retained earnings/distributable funds is in compliance with the Companies’ Act.
ERNST & YOUNG OY
Heikki Laitinen, Authorized Public Accountant
94
Ponsse 2005
Ponsse 2005
95
Shareholders as at 30 December 2005
Number of
shares
Percentage
of shares
Percentage
of votes
Vidgrén Einari
6,630,728
47.362343
47.362343
Vidgrén Juha
1,355,136
9.679543
9.679543
Varma Mutual Pension Insurance Company
475,000
3.392857
3.392857
4
HSS/Skandinaviska Enskilda Banken Ab, nominee-registered
457,332
3.266657
3.266657
5
OP-Suomi Kasvu Sijoitusrahasto
257,332
1.842000
1.842000
6
Thominvest Oy
208,800
1.491429
1.491429
7
Vidgrén Mikko Jooseppi
197,708
1.412200
1.412200
8
Einari Vidgrénin Foundation
194,000
1.385714
1.385714
9
Randelin Mari
191,540
1.368143
1.368143
10
Placeringsfonden Aktia Capital
160,000
1.142857
1.142857
Einari Vidgrén
11
Vidgrén Minna
149,480
1.067714
1.067714
Arto Tiitinen, President and CEO
12
Heikkinen Jonna
141,940
1.013857
1.013857
13
Vidgrén Jukka Tuomas
135,880
0.970571
0.970571
14
Lindbom Curt
107,020
0.764429
0.764429
15
Fondita Nordic Small Cap Placfond
100,000
0.714286
0.714286
16
Tapiola Mutual Pension Insurance Company
91,600
0.654286
0.654286
17
Nordea Foresta Equity Fund
86,000
0.614286
0.614286
18
Vidgrén Jarmo Kalle Johannes
80,960
0.578286
0.578286
19
Vidgrén Janne Ilmari
80,160
0.572571
0.572571
20
Turku and Kaarina Parish Union
76,960
0.549714
0.549714
21
Nordea Pankki Finland Plc.
74,943
0.535307
0.535307
22
Tiitinen Arto
57,040
0.407429
0.407429
23
Mäkinen Tommi
50,000
0.357143
0.357143
24
Laakkonen Mikko Kalervo
45,000
0.321429
0.321429
25
Tukinvest Oy
39,040
0.278857
0.278857
26
Seamen’s Pension Fund
33,440
0.238857
0.238857
27
Veikko Laine Oy
26,300
0.187857
0.187857
28
Päivikki and Sakari Sohlberg Foundation
23,360
0.166857
0.166857
29
Pemarstock Oy
21,520
0.153714
0.153714
30
Metsämiesten säätiö (Foresters’ Foundation)
No.
Name
1
2
3
Other shareholders
Total
20,000
0.142857
0.142857
2,431,781
17.365950
17.365950
14,000,000
100.00
100.00
The parent company’s distributable funds total EUR 43,330,599.49, and the group’s distributable funds total EUR 43,032,000.
The Board of Directors proposes that the distributable funds be disposed of as follows:
- Dividend of EUR 0.80 per share to be paid to shareholders, totalling
- Shareholders’ equity to be left
EUR 11,200,000.00
EUR 32,130,599.49
EUR 43,330,599.49
The record date for the payment of the dividend is 20 March 2006, and payments will be made on 27 March 2006.
Juha Vidgrén
Seppo Remes
Ilkka Kylävainio
Nils Hagman
Mirja Ryynänen
Auditor’s report
To the shareholders of Ponsse Oyj
We have audited the accounting records, the financial statements and the administration of Ponsse Oyj for the period 1.1.2005 –
31.12.2005. The Board of Directors and the Managing Director have prepared the Report of the Board of Directors and the consolidated financial statements prepared in accordance with International Financial Reporting Standards as adopted by the EU and the parent
company’s financial statements prepared in accordance with prevailing regulations in Finland, that includes parent company’s balance
sheet, income statement, cash flow statement and the notes to the financial statements. Based on our audit, we express an opinion on
the consolidated financial statements, the parent company’s financial statements and on the administration of the parent company.
We have conducted the audit in accordance with Finnish Standards on Auditing. Those standards require that we perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on
a test basis evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by the management as well as evaluating the overall financial statement presentation. The purpose of our audit of administration is to examine that the members of the Board of Directors and the Managing Director of the parent company have
complied with the rules of the Companies’ Act.
Consolidated financial statements
In our opinion the consolidated financial statements prepared in accordance with International Financial Reporting Standards as
adopted by the EU give a true and fair view, as referred to in the International Financial Reporting Standards as adopted by the EU and
defined in the Finnish Accounting Act, of the consolidated result of operations as well as of the financial position. The consolidated
financial statements can be adopted.
Parent company’s financial statements and administration
At the end 2005, Ponsse Oyj had 3,535 shareholders (2,511 at 31 December 2004).
In our opinion the parent company’s financial statements have been prepared in accordance with the Finnish Accounting Act and other
rules and regulations governing the preparation of financial statements in Finland. The financial statements give a true and fair view, as
defined in the Finnish Accounting Act, of the parent company’s result of operations as well as of the financial position. The financial
statements can be adopted and the members of the Board of Directors and the Managing Director of the parent company can be discharged from liability for the period audited by us. The proposal by the Board of Directors regarding the result from the period/distribution of retained earnings/distributable funds is in compliance with the Companies’ Act.
ERNST & YOUNG OY
Heikki Laitinen, Authorized Public Accountant
94
Ponsse 2005
Ponsse 2005
95
Corporate governance at Ponsse Oyj
1. Group structure
The Ponsse Group consists of parent company Ponsse Oyj and its wholly owned subsidiaries Ponsse AB, Sweden; Ponsse AS, Norway;
Ponssé S.A.S., France; Ponsse UK Ltd, Great
Britain; Ponsse North America, Inc., United
States of America; OOO Ponsse, Russia and
Ponsse Latin America Indústria de Máquinas
Florestais Ltda, Brazil, which provide machinery sales and spare parts and maintenance services. In addition, the Group comprises Epec
Oy located in Seinäjoki and Lako Oy located
in Turku. Epec Oy produces information and
control systems and Lako Oy is specialized in
producing harvester heads. Both companies
are wholly owned by Ponsse Group. Sunit Oy
in Kajaani is an associated company in which
Ponsse Oyj has a 34 per cent stake.
2. Applicable legislation and other
provisons
Ponsse Oyj (hereinafter: Company) is a Finnish limited company. Its decision-making and
administration are governed by the Finnish Companies Act, other provisions concerning listed companies and the Articles of
Association of Company. In its activities,
Company also complies, without the exceptions described below, with the recommendation for the corporate governance of listed
companies issued by the Central Chamber
of Commerce, the Confederation of Finnish
Industry and Employers and HEX Helsinki
Exchanges in December 2003.
3. General meeting
The highest decision-making body of the
company is the general meeting, whose duties and procedures are defined in the Finnish
Companies Act and in the company’s Articles
of Association. The general meeting is responsible for e.g. taking decisions on amending
the Articles of Association, on increasing and
decreasing share capital, on granting stock
options and electing the Board of Directors
and auditors.
96
Ponsse 2005
The Annual General Meeting (AGM) shall be
held each year by the end of June on a date to
be specified by the Board of Directors. At the
AGM shall be presented the company’s profit
and loss account and the consolidated profit and loss account; decided the adoption of
the profit and loss account, the balance sheet,
the consolidated profit and loss account and
the consolidated balance sheet, and dividends
or the actions warranted by the profit or loss
shown in the adopted balance sheet; and decided the discharge of liability of members
of the Board of Directors and the Managing
Director. Additionally, the AGM decides on
the number of Board members, the emoluments for members of the Board of Directors and the fee of the auditor as well as the
principles of compensation for travel expenses. The AGM also elects the members of the
Board of Directors and the auditor.
Shareholders are entitled to submit matters
for consideration at general meetings by notifying the Board of Directors thereof in writing well enough in advance of the meeting so
that the matter can be included in the notice
to convene the meeting. Proposals on matters involving the election of Board members
and auditors and other proposals submitted
by the Board to the general meeting may be
countered at the meeting as each point on
the agenda is being dealt with. Voting takes
place in accordance with the voting procedure adopted by the meeting and all shareholders present at the meeting are entitled to
vote.
In order to attend a general meeting, shareholders must inform the company of their
intention to do so by the deadline given in
the notice. This deadline may be no earlier
than five (5) days prior to the meeting.
All shareholders who are entered as such in
the company’s shareholders’ register kept by
the Finnish Central Securities Depository
(APK) ten (10) days prior to the meeting are
entitled to attend the general meeting.
Holders of nominee-registered shares may be
temporarily entered in the shareholder register
for the purpose of attending a general meeting. Shareholders may exercise their rights
at the meeting either in person or through a
representative, in addition to which they are
entitled to avail themselves of counsel at the
meeting.
Notice of independence is give in the Annual
Report and on the company’s website.
Extraordinary meetings of shareholders shall
be convened whenever the Board deem it necessary. Likewise, an extraordinary meeting of
shareholders shall be convened if the auditor
or shareholders holding at least one tenth of
all shares issued so request in writing for the
purpose of dealing with a matter specified by
them.
Board members are presented in the Annual Report and on the company’s website at
www.ponsse.com.
4. Board of directors
A Board of Directors consisting of no fewer
than five and no more than eight members
is responsible for the proper organization of
the company’s administration and operations.
The Annual General Meeting elects Board
members for a term of office expiring at the
end of the AGM first following their election.
The Board members choose a Chairman and
Deputy Chairman from among themselves.
In 2005, the Board consisted of six members.
Persons elected to the Board of Directors shall
have the necessary competence for their duties. Members shall be elected to represent a
diverse range of expertise as well as the viewpoint of the company’s owners. Under the Articles of Association, no upper age limit applies to Board members.
The majority of Board members shall be independent of the company, in addition to which
no fewer than two of the Board members belonging to the aforementioned majority shall
be independent of any of the company’s major shareholders. Board members shall submit
to the Board sufficient information to assess
their competence and independence and also notify of any changes in such information.
The Board of Directors considers Board
members Nils Hagman, Ilkka Kylävainio,
Seppo Remes and Mirja Ryynänen to be independent of the company and its major
shareholders.
The AGM held on 15 March 2005 decided
the annual remuneration payable to members
of the Board of Directors to be EUR 15,000.
No remuneration is paid to members in the
employ of the company with the exception
of the Chairman of the Board. In 2005, the
Board held thirteen meetings, whereas four
telephone meetings. The average attendance
rate of Board members was 88.9 per cent.
Should shareholders controlling more than 10
per cent of the company’s voting rights notify
the company’s Board of Directors of their proposal on the number and identity of Board
members, which matters shall be decided at
the AGM, this information shall be noted in
the notice to convene the meeting. Any proposals of the above nature made after notice
to convene a meeting has been sent out shall
be made public separately.
In addition to the duties specified in the
Companies Act and in the Articles of Association, the Board, including but not limited,
takes on responsibility for the company’s operations, result and development, confirms
the long-term strategy and the Group’s financial risk management policy, approves the
budget, decides on acquisitions and property
deals, strategically important business expansions and quasi-equity investments, the development of investments and significant
individual investments. The Board appoints
the company’s President and CEO and confirms the appointments of other Management
Team members, decides on the grounds for
remuneration payable to highest management
and evaluates the activities of management on
an annual basis.
At meetings of the Board of Directors, matters
shall be presented by the President and CEO
or his/her nominee, who shall be a company
executive.
5. Committees of the
board of directors
Duties and responsibilities have not been specifically divided among members and Chairman of the Board of Directors, nor has the
Board appointed any specific working groups
or committees.
6. President and CEO,
management team
The President and CEO is appointed by the
Board of Directors. The President and CEO
manages the company’s day-to-day business
affairs in accordance with guidelines and instructions issued by the Board of Directors.
His duties include e.g. operational management, informing the Board, presenting matters over which the Board has the power of
decision, implementing the decisions of the
Board and ensuring the legality of business
operations. The President and CEO is assisted by a Management Team consisting of the
President and CEO as Chairman and the executives appointed by the Board of Directors
to the Team. The Management Team meets
approximately once a month and also convenes whenever necessary to address e.g. business plans for the following year and strategy
in the longer term.
Each member of the Management Team is
responsible for a distinct sphere of operations
based on focal company functions. Management Team members report to the President
and CEO. Each member’s areas of responsibility are noted in the Annual Report and in
the section containing personal data and information about shareholding.
Under the agreement concluded between the
company and its President and CEO, both
parties may terminate the agreement on six
months’ notice. Should the company terminate the agreement, it shall pay the President
and CEO, in addition to salary and other
benefits accruing during the period of notice,
a sum equal to 18 months’ salary.
Arto Tiitinen, MBA, has appointed the President and CEO effective April 1st, 2004. In
2004, he was paid a salary and other benefits
of EUR 262.052.
In 2005 The Management Team of Ponsse
Oyj consisted of following members: President and CEO Arto Tiitinen, who is also Chairman, Director of Purchasing and
Logistics Pasi Arajärvi; Export Director Jari
Kartano; Service Director Tapio Mertanen;
Communications Manager Jari Mononen;
Quality and IT Director Juho Nummela;
Industrial Director Heikki Ojala; HR
Director and the Principal of Ponsse Academy
Paula Oksman (since 1.8.2005); CFO and
CEO’s deputy Mikko Paananen; Technology and R&D Director Veikko Rintamäki;
and Sales Director Jarmo Vidgrén. Company
management has had regular directors’ and
officers’ liability insurance.
The company has in place no option schemes
or other share-based incentive systems. The
management of a company is belonging to
the bonus system based on a company’s operational targets. In 2005, bonuses, paid to the
management and other staff were EUR 0.7
million in parent company and EUR 0.75
million in subsidiaries.
The Management Team monitors and revises
as necessary the company’s internal operational principles and procedures, which involve
e.g. reporting, financial administration, investments, risk management, insurance policies, information systems, general procurement, industrial property rights, management
of contractual risks, human resources administration, quality management issues, envi-
Ponsse 2005
97
Corporate governance at Ponsse Oyj
1. Group structure
The Ponsse Group consists of parent company Ponsse Oyj and its wholly owned subsidiaries Ponsse AB, Sweden; Ponsse AS, Norway;
Ponssé S.A.S., France; Ponsse UK Ltd, Great
Britain; Ponsse North America, Inc., United
States of America; OOO Ponsse, Russia and
Ponsse Latin America Indústria de Máquinas
Florestais Ltda, Brazil, which provide machinery sales and spare parts and maintenance services. In addition, the Group comprises Epec
Oy located in Seinäjoki and Lako Oy located
in Turku. Epec Oy produces information and
control systems and Lako Oy is specialized in
producing harvester heads. Both companies
are wholly owned by Ponsse Group. Sunit Oy
in Kajaani is an associated company in which
Ponsse Oyj has a 34 per cent stake.
2. Applicable legislation and other
provisons
Ponsse Oyj (hereinafter: Company) is a Finnish limited company. Its decision-making and
administration are governed by the Finnish Companies Act, other provisions concerning listed companies and the Articles of
Association of Company. In its activities,
Company also complies, without the exceptions described below, with the recommendation for the corporate governance of listed
companies issued by the Central Chamber
of Commerce, the Confederation of Finnish
Industry and Employers and HEX Helsinki
Exchanges in December 2003.
3. General meeting
The highest decision-making body of the
company is the general meeting, whose duties and procedures are defined in the Finnish
Companies Act and in the company’s Articles
of Association. The general meeting is responsible for e.g. taking decisions on amending
the Articles of Association, on increasing and
decreasing share capital, on granting stock
options and electing the Board of Directors
and auditors.
96
Ponsse 2005
The Annual General Meeting (AGM) shall be
held each year by the end of June on a date to
be specified by the Board of Directors. At the
AGM shall be presented the company’s profit
and loss account and the consolidated profit and loss account; decided the adoption of
the profit and loss account, the balance sheet,
the consolidated profit and loss account and
the consolidated balance sheet, and dividends
or the actions warranted by the profit or loss
shown in the adopted balance sheet; and decided the discharge of liability of members
of the Board of Directors and the Managing
Director. Additionally, the AGM decides on
the number of Board members, the emoluments for members of the Board of Directors and the fee of the auditor as well as the
principles of compensation for travel expenses. The AGM also elects the members of the
Board of Directors and the auditor.
Shareholders are entitled to submit matters
for consideration at general meetings by notifying the Board of Directors thereof in writing well enough in advance of the meeting so
that the matter can be included in the notice
to convene the meeting. Proposals on matters involving the election of Board members
and auditors and other proposals submitted
by the Board to the general meeting may be
countered at the meeting as each point on
the agenda is being dealt with. Voting takes
place in accordance with the voting procedure adopted by the meeting and all shareholders present at the meeting are entitled to
vote.
In order to attend a general meeting, shareholders must inform the company of their
intention to do so by the deadline given in
the notice. This deadline may be no earlier
than five (5) days prior to the meeting.
All shareholders who are entered as such in
the company’s shareholders’ register kept by
the Finnish Central Securities Depository
(APK) ten (10) days prior to the meeting are
entitled to attend the general meeting.
Holders of nominee-registered shares may be
temporarily entered in the shareholder register
for the purpose of attending a general meeting. Shareholders may exercise their rights
at the meeting either in person or through a
representative, in addition to which they are
entitled to avail themselves of counsel at the
meeting.
Notice of independence is give in the Annual
Report and on the company’s website.
Extraordinary meetings of shareholders shall
be convened whenever the Board deem it necessary. Likewise, an extraordinary meeting of
shareholders shall be convened if the auditor
or shareholders holding at least one tenth of
all shares issued so request in writing for the
purpose of dealing with a matter specified by
them.
Board members are presented in the Annual Report and on the company’s website at
www.ponsse.com.
4. Board of directors
A Board of Directors consisting of no fewer
than five and no more than eight members
is responsible for the proper organization of
the company’s administration and operations.
The Annual General Meeting elects Board
members for a term of office expiring at the
end of the AGM first following their election.
The Board members choose a Chairman and
Deputy Chairman from among themselves.
In 2005, the Board consisted of six members.
Persons elected to the Board of Directors shall
have the necessary competence for their duties. Members shall be elected to represent a
diverse range of expertise as well as the viewpoint of the company’s owners. Under the Articles of Association, no upper age limit applies to Board members.
The majority of Board members shall be independent of the company, in addition to which
no fewer than two of the Board members belonging to the aforementioned majority shall
be independent of any of the company’s major shareholders. Board members shall submit
to the Board sufficient information to assess
their competence and independence and also notify of any changes in such information.
The Board of Directors considers Board
members Nils Hagman, Ilkka Kylävainio,
Seppo Remes and Mirja Ryynänen to be independent of the company and its major
shareholders.
The AGM held on 15 March 2005 decided
the annual remuneration payable to members
of the Board of Directors to be EUR 15,000.
No remuneration is paid to members in the
employ of the company with the exception
of the Chairman of the Board. In 2005, the
Board held thirteen meetings, whereas four
telephone meetings. The average attendance
rate of Board members was 88.9 per cent.
Should shareholders controlling more than 10
per cent of the company’s voting rights notify
the company’s Board of Directors of their proposal on the number and identity of Board
members, which matters shall be decided at
the AGM, this information shall be noted in
the notice to convene the meeting. Any proposals of the above nature made after notice
to convene a meeting has been sent out shall
be made public separately.
In addition to the duties specified in the
Companies Act and in the Articles of Association, the Board, including but not limited,
takes on responsibility for the company’s operations, result and development, confirms
the long-term strategy and the Group’s financial risk management policy, approves the
budget, decides on acquisitions and property
deals, strategically important business expansions and quasi-equity investments, the development of investments and significant
individual investments. The Board appoints
the company’s President and CEO and confirms the appointments of other Management
Team members, decides on the grounds for
remuneration payable to highest management
and evaluates the activities of management on
an annual basis.
At meetings of the Board of Directors, matters
shall be presented by the President and CEO
or his/her nominee, who shall be a company
executive.
5. Committees of the
board of directors
Duties and responsibilities have not been specifically divided among members and Chairman of the Board of Directors, nor has the
Board appointed any specific working groups
or committees.
6. President and CEO,
management team
The President and CEO is appointed by the
Board of Directors. The President and CEO
manages the company’s day-to-day business
affairs in accordance with guidelines and instructions issued by the Board of Directors.
His duties include e.g. operational management, informing the Board, presenting matters over which the Board has the power of
decision, implementing the decisions of the
Board and ensuring the legality of business
operations. The President and CEO is assisted by a Management Team consisting of the
President and CEO as Chairman and the executives appointed by the Board of Directors
to the Team. The Management Team meets
approximately once a month and also convenes whenever necessary to address e.g. business plans for the following year and strategy
in the longer term.
Each member of the Management Team is
responsible for a distinct sphere of operations
based on focal company functions. Management Team members report to the President
and CEO. Each member’s areas of responsibility are noted in the Annual Report and in
the section containing personal data and information about shareholding.
Under the agreement concluded between the
company and its President and CEO, both
parties may terminate the agreement on six
months’ notice. Should the company terminate the agreement, it shall pay the President
and CEO, in addition to salary and other
benefits accruing during the period of notice,
a sum equal to 18 months’ salary.
Arto Tiitinen, MBA, has appointed the President and CEO effective April 1st, 2004. In
2004, he was paid a salary and other benefits
of EUR 262.052.
In 2005 The Management Team of Ponsse
Oyj consisted of following members: President and CEO Arto Tiitinen, who is also Chairman, Director of Purchasing and
Logistics Pasi Arajärvi; Export Director Jari
Kartano; Service Director Tapio Mertanen;
Communications Manager Jari Mononen;
Quality and IT Director Juho Nummela;
Industrial Director Heikki Ojala; HR
Director and the Principal of Ponsse Academy
Paula Oksman (since 1.8.2005); CFO and
CEO’s deputy Mikko Paananen; Technology and R&D Director Veikko Rintamäki;
and Sales Director Jarmo Vidgrén. Company
management has had regular directors’ and
officers’ liability insurance.
The company has in place no option schemes
or other share-based incentive systems. The
management of a company is belonging to
the bonus system based on a company’s operational targets. In 2005, bonuses, paid to the
management and other staff were EUR 0.7
million in parent company and EUR 0.75
million in subsidiaries.
The Management Team monitors and revises
as necessary the company’s internal operational principles and procedures, which involve
e.g. reporting, financial administration, investments, risk management, insurance policies, information systems, general procurement, industrial property rights, management
of contractual risks, human resources administration, quality management issues, envi-
Ponsse 2005
97
ronmental issues, industrial safety, insider guidelines and communications.
7. Insiders and insider
management
The Board of Directors has adopted insider
guidelines that comply with the insider regulations of the Helsinki Exchanges (HEX) that
entered into force on 1 March 2000. Pursuant
to the Securities Market Act, Board members,
the President and CEO and his/her deputy
as well as the company’s auditors are considered permanent insiders due to their position
in the company. In addition to these, pursuant to a decision taken by the company, the
members of the Management Team and specifically named persons who by virtue of their
duties regularly deal with non-public information impacting on the value of the company’s
share are also considered permanent insiders.
Although a person is not an insider, he/she
may temporarily be entered in a project-specific insider register which the company may
employ in extensive or otherwise significant
projects. Insiders may not trade in the company’s shares during a period of three (3)
weeks prior to the publication of the company’s Annual Report or interim report. A stock
exchange bulletin is issued annually to notify
in advance of the publication dates of these
reports.
The shareholding of insiders is available for
inspection at the insider register maintained
by the Finnish Central Securities Depository
(APK). Current information about the shareholding of insiders may be viewed at the office of the Finnish Central Securities Depository (APK) at the address Unioninkatu 32 B,
FI-00100 Helsinki, Finland. Additionally, the
company lists its major permanent insiders
and information about their shareholding on
its website.
98
Ponsse 2005
8. Audits and internal supervision
The primary purpose of statutory audits is to
verify that the financial statements give a true
and fair view about the Group’s result and financial position for the financial year. Company’s financial year runs from 1 January to
31 December annually.
The auditor is responsible for auditing the
company’s accounts and financial statements
to verify that they are free of material misstatement. The auditor shall also submit a
report to the general meeting. Additionally,
under Finnish law, the auditor also audits the
company’s corporate governance for compliance with relevant legislation. Normally, the
auditor reports to the Board once a year.
The company has one auditor, which shall
be a public accounting firm (KHT) authorised by the Central Chamber of Commerce.
The auditor is elected by the Annual General
Meeting for a term of office that expires at the
end of the AGM following election.
The auditing procedures of the foreign subsidiaries of the Ponsse Group have been organised in the manner provided for in each
nation’s relevant legislation and other regulations. The parent company’s auditor in 2005
was Ernst & Young Oy with Heikki Laitinen
APA as principal auditor.
In 2005, the Group’s auditing costs amounted
to EUR 88.662,35.
Internal supervision
Internal supervision is the responsibility of
the Board of Directors whilst the President
and CEO is responsible for its organisation in practice. The Board monitors that the
President and CEO attends to the company’s
day-to-day management in accordance with
its guidelines and instructions. The Board also ensures the supervision of the company’s
bookkeeping and asset management has been
properly organised.
Methods of internal supervision include internal guidelines, reporting and various technical
systems relating to activities. As the company
has in place no specific organisation for internal supervision, particular attention has been
paid to the organisation of operations, operational instructions, reporting and the scope of
auditing.
9. Shareholder agreements
The company is not aware of its shareholders
having entered into shareholder agreements.
10. Dividend policy
The company has adopted a dividend policy whereby dividends are paid in accordance
with the company’s long-term performance
and capital requirements.
11. Redemption obligation clause
Under article 14 of company’s Articles of Association, a shareholder who, either alone or
jointly with other shareholders, acquires or
whose holding exceeds either 33 1/3 per cent
or 50 per cent of all the company’s shares or
the votes conveyed by shares, is obliged to redeem, on request, the shares of other shareholders and other securities entitling thereto
under the Companies Act subject to the more
detailed terms and conditions provided for in
Article 14 of the Articles of Association.
12. Risk management
The Group’s risk management policy seeks to
maintain and further develop a practical and
comprehensive system for the management
and reporting of risks. This entails systematic risk assessment for each function and unit,
heightening risk management awareness and
quality, disseminating information on best
practices and supporting risk management
projects involving more than one company
function.
ronmental issues, industrial safety, insider guidelines and communications.
7. Insiders and insider
management
The Board of Directors has adopted insider
guidelines that comply with the insider regulations of the Helsinki Exchanges (HEX) that
entered into force on 1 March 2000. Pursuant
to the Securities Market Act, Board members,
the President and CEO and his/her deputy
as well as the company’s auditors are considered permanent insiders due to their position
in the company. In addition to these, pursuant to a decision taken by the company, the
members of the Management Team and specifically named persons who by virtue of their
duties regularly deal with non-public information impacting on the value of the company’s
share are also considered permanent insiders.
Although a person is not an insider, he/she
may temporarily be entered in a project-specific insider register which the company may
employ in extensive or otherwise significant
projects. Insiders may not trade in the company’s shares during a period of three (3)
weeks prior to the publication of the company’s Annual Report or interim report. A stock
exchange bulletin is issued annually to notify
in advance of the publication dates of these
reports.
The shareholding of insiders is available for
inspection at the insider register maintained
by the Finnish Central Securities Depository
(APK). Current information about the shareholding of insiders may be viewed at the office of the Finnish Central Securities Depository (APK) at the address Unioninkatu 32 B,
FI-00100 Helsinki, Finland. Additionally, the
company lists its major permanent insiders
and information about their shareholding on
its website.
98
Ponsse 2005
8. Audits and internal supervision
The primary purpose of statutory audits is to
verify that the financial statements give a true
and fair view about the Group’s result and financial position for the financial year. Company’s financial year runs from 1 January to
31 December annually.
The auditor is responsible for auditing the
company’s accounts and financial statements
to verify that they are free of material misstatement. The auditor shall also submit a
report to the general meeting. Additionally,
under Finnish law, the auditor also audits the
company’s corporate governance for compliance with relevant legislation. Normally, the
auditor reports to the Board once a year.
The company has one auditor, which shall
be a public accounting firm (KHT) authorised by the Central Chamber of Commerce.
The auditor is elected by the Annual General
Meeting for a term of office that expires at the
end of the AGM following election.
The auditing procedures of the foreign subsidiaries of the Ponsse Group have been organised in the manner provided for in each
nation’s relevant legislation and other regulations. The parent company’s auditor in 2003
was Ernst & Young Oy with Heikki Laitinen
APA as principal auditor.
In 2005, the Group’s auditing costs amounted
to EUR 88.662,35.
Internal supervision
Internal supervision is the responsibility of
the Board of Directors whilst the President
and CEO is responsible for its organisation in practice. The Board monitors that the
President and CEO attends to the company’s
day-to-day management in accordance with
its guidelines and instructions. The Board also ensures the supervision of the company’s
bookkeeping and asset management has been
properly organised.
Methods of internal supervision include internal guidelines, reporting and various technical
systems relating to activities. As the company
has in place no specific organisation for internal supervision, particular attention has been
paid to the organisation of operations, operational instructions, reporting and the scope of
auditing.
9. Shareholder agreements
The company is not aware of its shareholders
having entered into shareholder agreements.
10. Dividend policy
The company has adopted a dividend policy whereby dividends are paid in accordance
with the company’s long-term performance
and capital requirements.
11. Redemption obligation clause
Under article 14 of company’s Articles of Association, a shareholder who, either alone or
jointly with other shareholders, acquires or
whose holding exceeds either 33 1/3 per cent
or 50 per cent of all the company’s shares or
the votes conveyed by shares, is obliged to redeem, on request, the shares of other shareholders and other securities entitling thereto
under the Companies Act subject to the more
detailed terms and conditions provided for in
Article 14 of the Articles of Association.
12. Risk management
The Group’s risk management policy seeks to
maintain and further develop a practical and
comprehensive system for the management
and reporting of risks. This entails systematic risk assessment for each function and unit,
heightening risk management awareness and
quality, disseminating information on best
practices and supporting risk management
projects involving more than one company
function.
Ponsse 2005
99
www.ponsse.com
Annual Report 2005

PONSSE OYJ ANNUAL REPORT 2005

Transcription

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