Map A-Rakennusmies (Ramirent) in Brief CEO s review Domestic Product Lines and Subsidiaries Organization, Operating and Group

Transcription

1 Map A-Rakennusmies (Ramirent) in Brief CEO s review Domestic Product Lines and Subsidiaries Organization, Operating and Group Structures Domestic Operations International Operations Board of Directors Report Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Parent Company Income Statement Parent Company Balance Sheet Parent Company Cash Flow Statement Notes Key Figures and Calculation of Key Figures Board of Directors Proposal Signing of Accounts and Auditor s Report Corporate Governance and Managemet Share Turnover and Performance (monthly) Outlet Network 1

2 Kuvateksti kuvateksti kuvateksti kuvateksti kuvateksti kuvateksti kuvateksti kuvateksti kuvateksti kuvateksti kuvateksti. 2

3 A-RAKENNUSMIES (RAMIRENT) IN BRIEF A-Rakennusmies (to be renamed Ramirent as of April 2001) is the largest company in Finland renting and selling machinery and equipment for construction and industry. Ramirent has the most extensive rental fleet in the Finnish market. With the exception of contracting machinery (earthmoving machines, mobile cranes, etc.) it provides customers with all the machinery and equipment used on construction sites, ranging from tower cranes to drills. The Ramirent Group s core product lines are Small Machinery, Equipment and Personnel Hoists, Scaffolding and Weather Covers, Formwork and Supporting Equipment, Portable Spacial Units and Containers, and Tower Cranes and Hoists. The Group also offers related planning, erection, transportation and advisory services. In addition to its rental operations, Ramirent is also involved in the technical trade, and in this capacity imports and markets key construction machines and equipment. The Group s main customer segments are construction companies, installation companies, industrial plants, shipyards, national and local authorities, and private persons. The Group has some 20,000 customers. Ramirent has a network of over 75 rental outlets throughout Finland, most of them owned by the company and the remainder being dealer outlets. Ramirent also owns 65% of A-Rakennusmies East Oy (to be renamed Ramirent Europe Oy) which, through its subsidiaries, rents out construction machinery and equipment in Russia, Estonia, Latvia, Lithuania and Poland. Ramirent Europe currently has a network of 16 rental outlets in these countries. KEY FIGURES Net sales and other operating income FIM mill. Profit before extraordinary items FIM mill. Earnings per share FIM Return on investment Personnel % % % % % 271 3

4 REVIEW BY THE PRESIDENT & CEO reserves and taxes was up 47% to FIM 68 million, in comparison to the figures for A-Rakennusmies Oyj for the previous year. Domestically, there was growth in all product groups and the highest increases in net sales were in scaffolding (90%), portable spacial units (73%) and formwork (39%). Growth of 25% was achieved in tower cranes and 20% in small machinery and equipment. International operations (Ramirent Europe) grew by 43% in comparison to the previous year, at which time the net sales figures were not included with A-Rakennusmies Oyj figures. The profit after financial items of international operations turned positive during the year. Despite strong growth the Ramirent Group s equity ratio remained over 50%, and gearing was also at a good level of 56% despite extremely high investments (FIM 130 million). 4 REVIEW OF 2000 Construction continued to be brisk in Finland in New construction and renovation work both grew in comparison to the previous year. Additionally, there was increased demand for rental equipment for shipyards and industrial maintenance. Concerning the Baltic countries, construction picked up in Estonia and Latvia but was lower than expected in Lithuania. Construction growth tapered off in Poland and actually decreased by 2%. Following sharp drops in construction in Russia over recent years, the situation began to improve slightly, although 2000 was still very quiet was the first operating year in which A-Rakennusmies (renamed Ramirent) functioned as a Group. The Ramirent Group consists of its 100% owned subsidiaries Rami-Cranes Oy, Uudenmaan Telineykköset Oy, Teline-Rami Oy, Rami-Service Oy and its 65% owned subsidiary A-Rakennusmies East Oy (renamed Ramirent Europe). The Group s net sales and profit improved considerably in Net sales were up 45% to FIM 320 million and the profit before extraordinary items, In accordance with the Group s growth strategy, acquisitions were made in Finland and abroad (in Poland, Latvia and Estonia), new outlets were opened and substantial investments were made in the rental fleet. The development of rental outlets was continued both domestically and abroad. The Group has a Finnish network of 77 rental outlets and a network of 16 rental outlets in Estonia, Latvia, Lithuania, Poland and Russia. In Finland, tower crane operations were incorporated into Rami-Cranes Oy at the beginning of March 2000 and the total stock of Uudenmaan Telineykköset Oy and Etelä-Suomen Telinepiste Oy was acquired in June. A decision on the incorporation of the scaffolding product range was also made in summer and implemented practically on January 1, Since that date all of the Group s Finnish scaffolding operations have taken place through Uudenmaan Telineykköset Oy and Teline-Rami Oy. A quality system in accordance with the ISO 9001 standard, introduced in the Finnish operations in 1999, received certification during In order to expand international operations, the share capital of A-Rakennusmies East Oy (Ramirent Europe Oy following the name change) was increased, with the holding of the parent company A-Rakennusmies Oy (renamed Ramirent Oy) accordingly increasing to 65%. The ScanEast Fund L.P., which is managed by CapMan Capital Management Oy, continues to have a 35% holding. Ramirent Oyj has the option to purchase the remaining 35% of shares in Ramirent Europe Oy.

5 The operations of AS Scanlift in Estonia and SIA Scanlift in Latvia were acquired. In Lithuania new outlets were established in Klaipeda and in Kaunas. Ramirent Polska was established in Poland, as were other companies carrying the Rami Polska name, and the majority of shares in Rema-Rental S.A., a company renting machinery and equipment, were acquired. OUTLOOK FOR 2001 The favourable development of the Group is expected to continue in Growth and improved profitability are expected in rental activities and technical trade in both the domestic and international markets. The outlook is based on presented estimates of the growth of the construction and industrial maintenance markets in Finland, and on the favourable outlook for development in machinery and equipment rental in the Baltic countries and in Poland. The investments in the rental fleet and acquisitions both domestically and abroad during 2000 will support favourable growth in During the present financial year the Ramirent Group will continue investments in rental fleet and acquisitions, in accordance with its internationalisation and growth strategy INTERNATIONALISATION AND GROWTH STRATEGY OF RAMIRENT The Ramirent Group aims at strong growth for the coming years. The Group s target is to grow by at least 20% annually. The aim is also to maintain, concurrently, the Group s present good level of profitability; i.e. for the profit before taxes and extraordinary items to be at least 20% of net sales. Growth will mainly take place through internationalisation, but there will also be continued efforts for domestic growth. In addition to the Finnish market, the Group s main market area is the developing European countries. The Group will invest in rental fleet, in acquisitions and new outlets in Poland and the Baltic countries with the aim of building a rental outlet network in these countries equivalent to the one in Finland. The potential for expanding operations into Hungary, the Czech Republic and Slovakia will also be studied. The Group s net sales target is FIM 400 million for this year and FIM 500 million for March 2001 Erkki Norvio President and CEO PROFIT BEFORE EXTRAORDINARY ITEMS OPERATING PROFIT NET SALES FIM million FIM million FIM million , ,

6 PRODUCT LINES AND SUBSIDIARIES IN FINLAND 6 SMALL MACHINERY, EQUIPMENT AND PERSONNEL HOISTS The product line covers the renting of small machinery, equipment, personnel hoists and tools for construction sites and industrial maintenance services, and sales of related accessories and equipment. The products range in size from simple sewer opening springs to electricity generators weighing more than a ton and large personnel hoists. Small Machinery, Equipment and Personnel Hoists is Ramirent s largest product line. It includes machinery and equipment for concrete casting, soil compaction, hoisting, heating, sanding, grinding, welding, drilling and nailing. The product range also includes various cutting machines, pneumatic machinery and equipment, electrical and lighting equipment, pumps, and testing and measuring equipment. FORMWORK AND SUPPORTING EQUIPMENT The product line covers the renting and sales of shuttering forms required for on-site concrete casting, and the related planning, erection and supervision services. Shuttering forms are used to cast vertical and horizontal structures such as walls and vaults. The renting of shuttering forms takes place in accordance with the special features of each construction project, the construction schedule and the resources of the contractor. The machinery and equipment in the product line are well-known European brands. TELINE-RAMI OY AND UUDENMAAN TELINEYKKÖSET OY Teline-Rami Oy and Uudenmaan Telineykköset Oy are wholly owned subsidiaries of Ramirent Oyj, responsible for renting and selling scaffolding and weather covers. The companies comprehensive service also includes planning, erection, transfers, disassembly and transportation. In addition to the above, Teline-Rami imports and sells various brands of scaffolding. Uudenmaan Telineykköset focuses mainly on buildings and facades in the Helsinki metropolitan area, while Teline-Rami deals with the rest of Finland and also supplies the scaffolding needs of industry.

7 Scaffolding and weather covers are necessary in renovation and new building projects, in shipyards and in industrial maintenance. PORTABLE SPACIAL UNITS AND CONTAINERS The product line rents and sells portable spacial units and containers for new building and renovation sites and for several other purposes. The products include office, changing room, canteen, storage and accommodation units. In addition to ready-furnished units, the product line also designs and furnishes tailored solutions for construction site buildings, schools, day care centers and offices. TECHNICAL TRADE Ramirent Oyj imports and markets a variety of construction machines and equipment. The technical trade is conducted by the product lines and subsidiaries, using the network of rental outlets for their sales activities. The Group sells the same brands as it rents out. The main products in the technical trade are hoists, heaters, tower cranes, containers, scaffolding, formwork, portable spacial units, and various small machines, equipment and accessories needed on construction sites. RAMI-CRANES OY Rami-Cranes Oy is a wholly owned subsidiary of Ramirent Oyj, responsible for renting and selling tower cranes and hoists and the related maintenance and spare parts services. Rami-Cranes also repairs and provides spare parts for other kinds of construction machinery. 7

8 ORGANIZATION AND OPERATING STRUCTURE FINLAND Ramirent has a matrix organization in Finland, with operations organized by product line and region. The product lines are: Small Machinery and Equipment & Personnel Hoists, Formwork and Supporting Equipment, Scaffolding and Weather Covers (Teline-Rami Oy and Uudenmaan Telineykköset Oy), Portable Spacial Units and Containers, and Tower Cranes and Hoists (Rami-Cranes Oy). Operations are geographically divided into 12 regions and over 75 outlets. The formwork, scaffolding (Teline-Rami Oy and Uudenmaan Telineykköset Oy), portable spacial units and tower crane products (Rami-Cranes Oy) are rented and sold by their respective product lines and subsidiaries and through the company s network of outlets. The renting of small machinery and equipment & personnel hoists and the sales of accessories and equipment are handled by the outlets. OPERATING STRUCTURE PRODUCT LINES OPERATING STRUCTURE Small machinery and equipment Network of outlets and regional sales Ramirent Europe, 65% Formwork and supporting equipment Helsinki region Southeast Finland ZAO Techrrent Moscow Scaffolding and weather covers (Telineykköset Oy) (Teline-Rami Oy) Turku region Kotka region ZAO Peterrent St. Petersburg Portable spacial units and containers West Finland Central Finland South Savolax East Finland A-Ramirent AS Estonia A-Ramirent SIA Latvia Tower cranes and hoists (Rami-Cranes Oy) Pirkanmaa Keski-Pohja A-Ramirent UAB Lithuania Päijät-Häme North Finland Rema Rental SA Poland 8 Over 75 outlets Over 15 outlets

9 JURIDICAL STRUCTURE (inoperative companies excluded) RAMIRENT OYJ RAMIRENT EUROPE 65% ZAO TECHRENT (MOSCOW, 100%) ZAO PETERRENT (ST. PETERSBURG, 100%) A-RAMIRENT AS (ESTONIA, 100%) A-RAMIRENT SIA (LATVIA, 67%) VIA TEH SIA (LATVIA, 100%) letter of intent A-RAMIRENT UAB (LITHUANIA, 100%) RAMI POLSKA Sp.zo.o (POLAND, 100%) RAMIRENT POLSKA Sp.zo.o (POLAND, 100%) REMA-RENTAL S.A. (POLAND about 70%) MASTRENT Sp.zo.o (POLAND, 100%) letter of intent RAMI-CRANES OY (100%) UUDENMAAN TELINEYKKÖSET OY (100%) TELINE-RAMI OY (100%) 9

10 FINNISH OPERATIONS 10 NET SALES BY PRODUCT LINE FIM million Small Machinery and Equipment and Personnel Hoists Formwork and Supporting Equipment Scaffolding and Weather Covers Portable Spacial Units and Containers Tower Cranes and Hoists Intragroup sales Total Other operating income Total HISTORY The history of Ramirent dates back to 1955 and the establishment of a partnership called Rakennusmies. At that time new construction machinery and equipment were in great demand in Finland with the post-war reconstruction at its height. The import, manufacture, and trading of construction machinery and equipment were defined as the company s line of business. In the 1960s and 1970s the product range expanded, and the company also took on the development and manufacture of various prefabricated units. At the time, the company was called A-Elementti Oy Rakennusmies. In 1983, Oy Partek Ab acquired the whole stock of the company, and in the following 2 3 years Partek largely transferred the prefabricated unit production to its own similar group. After the company s own production came to an end, its name was changed to A-Rakennusmies Oy. Through this change the company returned to its roots and focused on the import, sales and renting of construction machinery and equipment. In the late 1980s, business grew again, and the product range expanded. Further growth was sought mainly through acquisitions. In 1989, A-Rakennusmies acquired Rakennuslaite Oy, which had been renting construction machinery for 15 years. Hytec Oy, a leading seller and renter of formwork and personnel hoists, was merged with the company in In 1992, the major part of Monivuokraus Ky s business and network of rental outlets was acquired, which significantly increased A-Rakennusmies construction machinery rental operations. In 1993, the construction machinery operations of Starckjohann-Telko Oy were joined to the company, and in 1994 A-Rakennusmies acquired Tallberg Rakennustekniikka Oy s business. In 1995, the business of Betox Oy was purchased. In December 1995, the business operations of A-Rakennusmies were transferred to a new company held by key persons in A-Rakennusmies Oy through the holding company Gaspar Oy Ab, together with funds managed by CapMan Capital Management Oy and MB Finance Group Oy. Of the previous owners, Oy Julius Tallberg Ab, Oy Partek Ab and Starckjohann Oy, retained their holdings in the company until November 1997, when the latter two sold their shares to the company s other shareholders. In 1998, A-Rakennusmies was listed on the main list of the Helsinki Exchanges and the public quotation of its shares began on April 30, In conjunction with this, the capital investors, CapMan Capital Management and MB Finance Group, sold most of their holdings. A-Rakennusmies continued its acquisitions. The equipment rental operations of Kehä-Vuokraus and Cranes-Sampo were purchased in 1998 and two scaffolding rental companies, Uudenmaan Telineykköset Oy and Etelä-Suomen Telinepiste Oy, were purchased in The Tower Crane operations were incorporated as a subsidiary company called Rami-Cranes Oy at the beginning of March During 2000 a decision was made to incorporate the scaffolding operations into Teline-Rami Oy, which came into effect at the beginning of It was also decided to change the name A-Rakennusmies Oyj to Ramirent Oy as of April MARKET DEVELOPMENT IN FINLAND According to the estimates of Ramirent, Finland s rental market for construction machinery and equipment grew by approximately 15 20% in Nevertheless, the use of rental machinery and equipment for construction is still low in Finland by international standards. As construction companies and industry focus on improving profitability and productivity, a further increase is expected in the use of rental services in Finland. Construction

11 companies also have their own machinery and equipment, which they will need to renew in the future. This heightens the prospects for technical trade. OPERATIONS AND MARKET SITUATION The combined net sales of the outlets in the Small Machinery and Equipment and Personnel Hoists product line were FIM 188 million in 2000, which was 20% more than in the previous year. The increase was mainly due to increased activity throughout the market and the new outlets established during the year. Renting of small machinery and personnel hoists is expected to further increase mainly because of the overall growth in the construction market and the trend for increased use of rental machinery and equipment. In 2001, the network of outlets will be further expanded. The net sales of the Formwork and Supporting Equipment product line amounted to FIM 32 million in 2000, an increase of 39% compared with This was mainly due to an increase in new construction and the increasing occurrence of on-site building and renovations. The year 2001 will most likely be busy and the net sales of the product group are expected to grow further. The net sales of Scaffolding and Weather Covers, including installations, were FIM 55 million in 2000, which was 90% more than the previous year. The vigorous growth was mainly affected by the increase in scaffolding usage by industry and shipyards and the appearance of Uudenmaan Telineykköset Oy and Etelä-Suomen Telinepiste Oy in the Group s figures starting from July, The rental, sales and installion of scaffoldings will in the future be conducted by Ramirent s subsidiaries: Teline-Rami Oy and Uudenmaan Telineykköset Oy. The net sales of the subsidiary companies are expected to further increase in The net sales of Portable Spacial Units and Containers amounted to FIM 19 million, an increase of 73% compared with The growth was largely due to the increase in the number of industrial projects and large investments in rental fleet. Growth is expected to continue also during the year The net sales of the Tower Cranes and Hoists (Rami-Cranes Oy) product group totaled FIM 25 million in 2000, an increase of 25% over the previous year. The main reason for growth was the sale of new and second-hand tower cranes. A favorable demand situation is expected to continue also in The basic idea of Technical Trade is to sell the same products that are used in the Group s rental business, which enables the company to gain advantage from common maintenance and spare parts activities and relations with international suppliers. The net sales of Technical Trade were FIM 45 million in 2000, an increase of 15% over the previous year. The Group continues to be committed to the technical trade and its Rami sales. The growth of Technical Trade is expected to continue also in

12 INTERNATIONAL OPERATIONS 12 KEY FINANCIAL STATEMENT FIGURES (EAST SUB GROUP) INCOME STATEMENT FIGURES (FIM 1,000) Net sales 34,888 24,386 23,656 14,465 Operating profit before depreciation 6,821 4,479 4,870 2,377 Depreciation -6,582-4,482-4,039-2,139 Operating pofit / loss Financial income and expenses 145-2,928-1, Profit after financial items 384-2, BALANCE SHEET FIGURES (FIM 1,000) Fixed assets 42,304 20,376 18,603 14,736 Inventories 3,364 1,942 1,295 2,826 Receivables 8,864 4,766 4,193 5,548 Cash and bank 9,741 1,055 2,834 5,906 Non-interest bearing debt 11,551 4,823 2,341 6,719 Interest-bearing debt 4,681 5,458 6,204 Minority interests 2,732 1, Shareholders equity 45,309 16,646 20,529 21,694 Balance sheet total 64,273 28,139 29,842 29,016 The Group began its international machinery rental business in Moscow in 1989 by founding a joint venture with two local partners in the former Soviet Union. In 1993, the Moscow business was transferred to a wholly-owned subsidiary, ZAO Techrent. In 1994, international operations were expanded by establishing subsidiaries in St. Petersburg (Russia) and Tallinn (Estonia). A-Rakennusmies East Oy began operations in 1997, as a result of forming the eastern operations of A-Rakennusmies into a separate company. 50% of the equity of the new company was put up by the Alliance ScanEast Fund L.P. managed by CapMan Capital Management Oy. At the moment, the Group s international operations are handled through Ramirent Europe Oy (the new name for A-Rakennusmies East Oy) and its subsidiaries. Ramirent Europe has subsidiaries in five countries; ZAO Techrent (Moscow) and ZAO Peterrent (St. Petersburg) in Russia, A-Ramirent AS in Estonia, A-Ramirent SIA in Latvia, UAB A-Ramirent in Lithuania and Ramirent Polska Sp.zo.o, Rami Polska Sp.Zo.o, Rema-Rental S.A. and Mastrent Sp.zo.o in Poland. As a result of the share issue in 2000, Ramirent Oyj s holding in Ramirent Europe rose to 65% and the Alliance ScanEast Fund s holding decreased correspondingly to 35%. Ramirent Oyj also has the right of redemption of the minority holding. The internationalization of the Group has proceeded according to the strategy. In 2000, the net sales of Ramirent Europe grew by 43% compared to the previous year, and the profit after financial items increased. All the subsidiaries of Ramirent Europe made a profit in 2000, except for ZAO Peterrent, which recorded a loss of FIM 2 million. The loss was mainly due to the unfavorable market situation. The Polish companies had negligible effect on the figures for 2000 as they joined the Group so late in the year and were burdened by the initial investments. In 2001, the operations of the Ramirent Europe Group will experience strong growth and profitability is expected to improve due to the acquisitions and investments in rental fleet made in The internationalization and growth strategy will continue in 2001 through investments in new rental fleet, the opening of new outlets primarily in Poland and the Baltic countries and acquisitions in accordance with the strategy. ESTONIA (A-RAMIRENT AS) Construction in Tallinn returned to a better level in 2000 after a slower year in After A-Ramirent AS acquired the rental business and real estate of Scanlift AS in the spring of 2000, the Tallinn operations were handled by two outlets. The company s profit was good and the merger of the acquired businesses with A-Ramirent AS was carried out without any problems. The result for 2001 is also expected to be good and the company plans to expand its operations in the Estonian market. LATVIA (A-RAMIRENT SIA) Construction continued to be buoyant in Riga, which was beneficial to the rental business. In the spring, A-Ramirent SIA acquired the construction machinery and equipment rental business of Scanlift SIA, and subsequently operations in Riga were handled by two outlets. The company s profit

13 for the year was good and the merger of the acquired businesses with A-Ramirent SIA was carried out without any problems. The profit for 2001 is expected to continue to be good. The company plans to expand its businesses by opening a new outlet in the port city of Ventspils. In January 2001 the company signed a letter of intent to acquire the leading Latvian formwork rental company, Viateh SIA. The final deed of sale is to be signed in April 2001 by the latest. LITHUANIA (UAB A-RAMIRENT ) Construction was less lively than expected in Vilnius, and in Lithuania in general, during the year under review. Nevertheless, UAB A-Ramirent s profit was satisfactory. During the year, a new outlet was founded in the port city of Klaipeda, and a decision was made to open an outlet and depot in Kaunas. The profit for 2001 is expected to improve over the previous year. POLAND (REMA-RENTAL S.A., RAMIRENT POLSKA SP.ZO.O AND RAMI POLSKA SP.ZO.O.) Ramirent Europe founded two wholly-owned subsidiaries in Poland during the year under review: Ramirent Polska Sp.zo.o and Rami Polska Sp.zo.o. Ramirent Polska operates as a holding company only and Rami Polska plans to begin machinery and equipment importing and selling activities during Ramirent Europe s subsidiary, Ramirent Polska, acquired a majority in the Polish machinery rental company, Rema-Rental S.A., towards the end of the year. The operating management of the company acquired a minority holding. The companies in Poland had little effect in Ramirent Europe s profit for As notable investments only occurred in Poland in the latter half of the year, their benefits will not be reflected in the figures until At the time of signing the financial statements, there was a network of 6 outlets in Poland. The target is to significantly expand this network during the coming years when the Polish market is expected to grow. By combining Ramirent s experience in the rental business and in building rental networks with the local knowledge and contacts of the Polish owners, there will be a good opportunity to create a growing and profitable rental business in Poland. Ramirent Polska Sp.zo.o has signed a letter of intent to acquire the whole share capital of the Polish hoist rental company Mastrent Sp. zo.o. The final deed will be signed after the Polish competition authorities have approved the acquisition. RUSSIA, MOSCOW (ZAO TECHRENT) Construction was at a low level in Moscow due to the overall economic situation in Russia. Techrent improved its result towards the end of the year, however, and the final result for 2000 was satisfactory. In 2001, the company expects moderate growth and, above all, improved profitability. RUSSIA, ST. PETERSBURG (ZAO PETERRENT) Construction was at a very low level in St. Petersburg due to the overall situation in Russia. Peterrent recorded a loss in The outlook for 2001 is better and the target is to put Peterrent into profit again, which is considered to be realistic. 13

14 BOARD OF DIRECTORS REPORT 14 GENERAL The Group s rental operations and technical trade continued to grow strongly in Finland and abroad in the year under review, and the net sales target was exceeded. In compliance with its growth strategy, the Group made acquisitions, opened new outlets and invested in new rental fleet both in Finland and abroad (in Poland, Latvia and Estonia). The growth was profitable and the Group s operating profit and profit after financial items increased substantially. Despite the strong growth, the equity ratio and gearing remained good. The network of outlets was further expanded both domestically and abroad with the result that the Group now has a network of 77 outlets in Finland and 16 outlets in Estonia, Latvia, Lithuania, Poland and Russia. At the beginning of March 2000 in Finland, the Tower Cranes and Hoists product line was incorporated into Rami-Cranes Oy. In the summer of 2000, the stock of Uudenmaan Telineykköset Oy and Etelä-Suomen Telinepiste Oy was acquired as part of the growth strategy for the Scaffolding product line. The transaction was partly financed with the company s own shares, for which purpose a special issue was organized. A decision was also made in the summer of 2000 to incorporate the Scaffolding and Weather Covers product line and this was put into effect on January 1, Since then, the Group s domestic scaffolding business has been organized through Uudenmaan Telineykköset Oy and Teline-Rami Oy. A quality system conforming with the SFS-EN ISO 9001 standard, which had been introduced in Finland during 1999, was certified in In order to prepare for further growth in international operations, the share capital of A-Rakennusmies East Oy (to be renamed Ramirent Europe Oy) was increased. This also meant that the holding of the Group s parent company in A-Rakennusmies East Oy was increased to 65%. The Alliance ScanEast Fund L.P. managed by CapMan Capital Management Oy will continue for the time being as the minority shareholder, but A-Rakennusmies Oyj has an option to buy the fund s 35% holding. The business operations of Scanlift AS in Estonia and Scanlift SIA in Latvia were acquired during the financial year. In Lithuania, new outlets were opened in Klaipeda and Kaunas. The Ramirent Polska Sp.Zo.o and Rami Polska Sp.Zo.o companies were founded in Poland and a majority holding of Rema- Rental S.A. was acquired. CHANGES IN GROUP STRUCTURE The year under review is the first for the Group structure. The A-Rakennusmies (to be renamed Ramirent) Group consists of the following wholly owned Finnish subsidiaries: Uudenmaan Telineykköset Oy, Teline-Rami Oy, Rami-Cranes Oy, Rami- Service Oy and a few companies with no business activities, plus the 65% owned A-Rakennusmies East Oy (to be renamed Ramirent Europe Oy). A-Rakennusmies East Oy wholly owns the following companies: A-Ramirent AS (Estonia, two outlets), UAB A-Ramirent (Lithuania, three outlets), ZAO Techrent (Russia, Moscow, two outlets), ZAO Peterrent (Russia, St. Petersburg, one outlet), Ramirent Polska (Poland) and Rami Polska (Poland). It also owns 2/3 of A-Ramirent SIA (Latvia, two outlets) and 52% of Rema-Rental S.A. (six outlets). The minority shareholders are a local partner in Latvia and the operating management of the Polish company. PROFIT DEVELOPMENT DURING THE 2000 FINANCIAL YEAR The figures for 2000 are the Group s figures unless otherwise stated. The figures from the previous year (in brackets) are A-Rakennusmies Oyj s figures, and hence are not in all respects comparable. The Group s net sales for 2000 were FIM (219.6) million which is 45.6% more than in the previous year. Other operating income was FIM 1.1 (4.4) million. The operating profit before depreciation (operating margin) was FIM (75.5) million, which is 43.1% more than in the previous year. Due to the growth in investments and acquisitions, depreciation increased to FIM 36.0 (25.7) million and the operating profit thus totaled FIM 72.0 (49.8) million. The operating profit was 22.5 (22.7) % of net sales. Net financial costs increased to FIM 4.3 (3.8) million due to an increase in interest-bearing liabilities and a rise in interest rates. Interest-bearing liabilities

15 were used for investments in Finland and abroad, in accordance with the growth strategy. Profit before extraordinary items and taxes was FIM 67.7 (46.0) million, equaling 21.2 (21.0) % of net sales. Taxes increased to FIM 20.8 (10.7) million due to the increase in profit, the decrease in excess depreciation possibilities and the increase in the deferred tax liability. The net profit for the year was FIM 49.1 (30.2) million. Earnings per share were FIM (8.55). NET SALES AND NET PROFIT BY MARKET AREA IN 2000 (FIM millions) Net sales Operating margin Depreciation Operating profit Finnish operations International operations Intra-Group transactions Total When compared to the previous year, net sales increased 37% in Finnish operations and 43% in international operations. INVESTMENTS The Group s gross investments totaled FIM (41.9) million which is 40.7 (19.1) % of net sales. This figure includes FIM 99 million in various machine and equipment investments, FIM 13 million in real estate and business premise purchases and FIM 18 million in intellectual property rights and increase in corporate goodwill. FINANCING AND BALANCE SHEET STATUS The Group s interest-bearing net debt increased to FIM 92.4 (52.9) million, owing to the strong growth in investments. Correspondingly, gearing was 55.9 (45.1) %. The Group aims to keep gearing below 50% in the long term, but to allow it to moderately exceed that level in periods of active investment. The equity ratio was 50.1 (54.6) %. The Group aims to keep the equity ratio over 50% in the long term, but to allow it to moderately fall short of that level in periods of active investment. The Group s liquidity during the year under review was good. On December , the consolidated balance sheet total was FIM million and the shareholders equity was FIM million. PERSONNEL The average number of personnel employed by the Group during the financial year was 487 (329), 388 of whom were employed in Finland and 99 abroad. The Group has a profit bonus scheme which applies to all personnel. The size of the bonus depends on the achievement of each unit s key profit targets. More than 50 of the Group s executives and key personnel are included in the 1998 and 2000 option programs. EURO The Group s financial statements will be denominated in FIM until the end of Transition to the euro will be completed in all operations by January 1, The Group s companies are currently able to invoice and receive invoices denominated in euros. OUTLOOK FOR 2001 The Group is expected to continue its favorable business development in Growth and improved profitability are expected in rental activities and the technical trade both in Finland and abroad. The outlook is based on the presented estimates 15

16 concerning the growth of the construction and industrial maintenance markets in Finland and the positive development prospects for machine rental markets in the Baltic countries and Poland. Investments in the rental fleet during 2000 and the acquisitions in Finland and abroad will support favorable development in In accordance to its growth and internationalization strategy, the Group will continue its investments in rental fleet and acquisitions also in the current financial year. INCREASE IN THE SHARE CAPITAL BY AN ALLOTTED ISSUE As authorized by the Annual General Meeting of April 13, 2000, the Board of Directors decided to increase the share capital by an allotted share issue in connection with the acquisition of the stock of Uudenmaan Telineykköset Oy and Etelä-Suomen Telinepiste Oy. 57,904 new shares of A-Rakennusmies Oyj (to be renamed Ramirent Oyj) were issued to the former owners of Uudenmaan Telineykköset Oy and Etelä-Suomen Telinepiste Oy and entered into the trade register on July 3, As a result, the share capital increased by FIM 289,520 and the number of shares to 4,187,904. SIGNIFICANT EVENTS AFTER THE YEAR UNDER REVIEW In Finland, the Scaffolding product line was incorporated into Teline-Rami Oy on January 1, In international operations, preliminary agreements have been made for the acquisition of VIA TEH SIA (Latvia) and Mastrent Sp. zo.o. (Poland). The final agreements will probably be signed by the end of April, BOARD OF DIRECTORS, PRESIDENT & CEO, AND AUDITORS The Annual General Meeting held on April 13, 2000, elected Mr. Raimo Taivalkoski (Chairman), Mr. Thomas Tallberg (Vice Chairman), Mr. Erkki Norvio and Ms Tuire Mannila as members of the company s Board of Directors. The firm of Authorized Public Accountants, KPMG- Wideri Oy Ab, was elected as the auditor, with the responsible auditor being Ms. Solveig Törnroos- Huhtamäki, Authorized Public Accountant. The President and CEO is Mr. Erkki Norvio. 16

17 INCOME STATEMENT CONSOLIDATED Note (EUR 1000) (FIM 1000) NET SALES Other operating income Materials and services Personnel expenses Depreciation and writedown Other operating expenses OPERATING PROFIT Financial income and expenses PROFIT BEFORE EXTRAORDINARY ITEMS Extraordinary items PROFIT BEFORE APPROPRIATIONS AND TAXES Income taxes Minority interests NET PROFIT FOR THE YEAR

18 BALANCE SHEET CONSOLIDATED Note (EUR 1000) (FIM 1000) ASSETS NON-CURRENT ASSETS Intangible assets Goodwill Tangible assets Investments Other investments NON-CURRENT ASSETS TOTAL CURRENT ASSETS Inventories Current receivables Sales receivables Other receivables Prepayments and accrued income Cash in hand and at the banks TOTAL CURRENT ASSETS TOTAL ASSETS

19 CONSOLIDATED Note (EUR 1000) (FIM 1000) LIABILITIES CAPITAL AND RESERVES Share capital Share premium account Legal reserve Retained earnings Net profit for the year CAPITAL AND RESERVES TOTAL MINORITY INTERESTS CREDITORS Deferred tax Non-current liabilities Debenture loans Loans from financial institutions 28, Pension loans Current liabilities Loans from financial institutions 27, 28, Pension loans Advances received Trade payables Other payables Accruals and deferred income CREDITORS TOTAL TOTAL LIABILITIES

20 CASH FLOW STATEMENT CONSOLIDATED (EUR 1000) (FIM 1000) Cash flow from operating activities: Profit before extraordinary items Adjustments: Depreciation and writedown Other income and expenses, not involving payment Financial income and expenses Other adjustments Cash flow before change in net working capital Change in net working capital: Non interest-bearing short-term business receivables increase (-) / decrease (+) Inventories increase (-) / decrease (+) Non interest-bearing debt increase (+) / decrease (-) Cash flow before financing activities and taxes Paid interests and payments of other business financing costs Interests received from business activities Direct taxes paid Cash flow from operating activities (A) Cash flow from investing activities: Investments in tangible and intangible assets Proceeds from sale of tangible and intangible assets Other investments Loans granted 0 0 Purchased shares of subsidiaries Dividends received from investments 1 4 Cash flow from investing activities (B) Cash flow from financing activities: Paid share issue Raising of short-term loans Repayment of short-term loans Raising of long-term loans Repayment of long-term loans Dividends paid Cash flow from financing activities C Change in liquid assets, increase (+) / decrease (-) (A+B+C) Liquid assets at the beginning of the financial year Liquid assets at the end of the financial year

21 INCOME STATEMENT PARENT COMPANY Note (EUR 1000) (FIM 1000) (FIM 1000) NET SALES 1, Other operating income Materials and services Personnel expenses Depreciation and writedown Other operating expenses OPERATING PROFIT Financial income and expenses PROFIT BEFORE EXTRAORDINARY ITEMS Extraordinary items PROFIT BEFORE APPROPRIATIONS AND TAXES Appropriations Income taxes NET PROFIT FOR THE YEAR

22 BALANCE SHEET PARENT COMPANY Note (EUR 1000) (FIM 1000) (FIM 1000) ASSETS NON-CURRENT ASSETS Intangible assets Intangible rights Goodwill Other capitalised long-term expenditure Tangible assets Land and water Buildings Machinery and equipment Investments Holdings in Group companies 12, Participating interests Other shares and holdings 13, NON-CURRENT ASSETS TOTAL CURRENT ASSETS Inventories Non-current receivables Receivables from Group companies Receivables from participating interest undertakings Current receivables Sales receivables Receivables from Group companies Receivables from participating interest undertakings Other receivables Prepayments and accrued incom Cash in hand and at the banks TOTAL CURRENT ASSETS TOTAL ASSETS

23 PARENT COMPANY Liite (EUR 1000) (FIM 1000) (FIM 1000) LIABILITIES CAPITAL AND RESERVES Share capital Share premium account Retained earnings Net profit for the year CAPITAL AND RESERVES TOTAL APPROPRIATIONS Depreciation reserve CREDITORS Non-current liabilities Debenture loans Loans from financial institutions 28, Pension loans Current liabilities Loans from financial institutions 27, 28, Pension loans Advances received Trade payables Liabilities to Group companies Liabilities to participating interest undertakings Other liabilities Accruals and deferred income CREDITORS TOTAL TOTAL LIABILITIES

24 CASH FLOW STATEMENT PARENT COMPANY (EUR 1000) (FIM 1000) (FIM 1000) Cash flow from operating activities: Profit before extraordinary items Adjustments: Depreciation and writedown Other income and expenses, not involving payment Financial income and expenses Other adjustments Cash flow before change in net working capital Change in net working capital: Non interest-bearing short-term business receivables increase (-) / decrease (+) Inventories increase (-) / decrease (+) Non interest-bearing short-term debt increase (+) / decrease (-) Cash flow before financing activities and taxes Paid interests and payments of other business financing costs Interests received from business activities Direct taxes paid Cash flow from operating activities (A) Cash flow from investing activities: Investments in tangible and intangible assets Proceeds from sale of tangible and intangible assets Other investments Loans granted Repayments of loans Proceeds from sale of other investments Dividends received from investments Cash flow from investing activities (B) Cash flow from financing activities: Paid share issue Raising of short-term loans Repayment of short-term loans Raising of long-term loans Repayment of long-term loans Capital loan increase (+) / decrease (-) Dividends paid Cash flow from financing activities C Change in liquid assets, increase (+) / decrease (-) (A+B+C) Liquid assets at the beginning of the financial year Liquid assets at the end of the financial year

25 NOTES TO THE FINANCIAL STATEMENTS ACCOUNTING PRINCIPLES GENERAL The financial statements have been prepared in accordance with the valid provisions of the Finnish Accounting Act and Companies Act. The financial statements have been prepared in Finnish marks. SCOPE AND PRINCIPLES OF CONSOLIDATION Consolidated financial statements have been prepared for A-Rakennusmies Oyj for the first time, due to Rami-Cranes Oy beginning operations on March 1, 2000, and the parent company s holding in A-Rakennusmies East Oy increasing from 50% to 65%. The figures for the A-Rakennusmies East Oy subsidiary Group have been included as of January 1, The other companies acquired during the 2000 financial year have been included as of their date of acquisition or incorporation. All Group companies are included in the consolidated financial statements. All intragroup transactions, receivables, liabilities and profit distribution have been eliminated. The unrealized margins from intragroup sales have been eliminated in so far as they would affect the Group s profit and shareholders equity. Minority interests have been separated from the Group s profit and shareholders equity, and are presented separately in the income statement and balance sheet. at the exchange rate on December 31. The differences arising from translation and exchange rates have been entered in financial income and expenses in the income statement, except for exchange rate translation differences in shareholders equity, which are presented under capital and reserves in the balance sheet. NET SALES Net sales include rental income, sales income from technical trade, the sale of services, and gains from the sale of used rental machinery and equipment. In previous years, the net gain from the sale of rental machinery and equipment was presented in other operating income. Because of the change, the net sales figure now presents the volume of operations more accurately. No corresponding change has been made in the comparison figures for previous years. APPROPRIATIONS Appropriations are changes in the parent company s depreciation in excess of plan. In the consolidated balance sheet, the accumulated appropriations have been divided between capital and reserves and the deferred tax liability. In the income statement, the change in appropriations for the year has correspondingly been divided between net profit for the year and change in deferred tax liability. Intragroup holdings have been eliminated using the acquisition cost method. The differences arising from elimination have been entered as fixed assets or treated as goodwill. The amount entered as fixed assets on December 31, 2000, was FIM 7,096,722. The fixed assets item will be amortized according to plan and goodwill in 15 years. The financial statements of the Russian subsidiaries of A-Rakennusmies East Oy have been translated into Finnish markkas using the monetary nonmonetary method. The income statements of other subsidiaries of the subsidiary Group have been translated into Finnish markkas at the average exchange rate for the year, and the balance sheets TAXES The taxes due on the taxable profit for the 2000 financial year have been entered as income taxes in the parent company s income statement. The taxes due on the taxable profits of Group companies have been entered as direct taxes in the consolidated income statement. The taxes have been calculated in accordance with each company s local tax regulations, on the basis of computed taxable income. Deferred tax liabilities and assets in the consolidated figures take account of changes caused by 25

26 timing differences between accounting and taxation periods and by consolidation, and are based on the following year s tax rate confirmed at the time of closing the books. The consolidated balance sheet includes the deferred tax liability in total and the deferred tax asset computed as the estimated probable asset. MAINTENANCE AND REPAIRS Except for major refurbishment costs, which are capitalized and depreciated over their period of impact, maintenance and repair costs are booked as expenses during the financial year in which they occur. The difference arising from the change of accounting method is presented in extraordinary income. INVENTORIES Inventories are shown at the lowest of the weighted average price, the replacement price or the probable selling price. The direct acquisition costs are included in the value of the inventories. FOREIGN CURRENCY ITEMS At the end of the financial year, unsettled foreign currency assets and liabilities are valued at the average rate of the Bank of Finland on December 31. Exchange rate differences are presented in the income statement. The principal foreign exchange rates used were: Income Balance statement rate sheet rate RUB EEK LVL LTL PLN FINANCIAL INSTRUMENTS The Group companies have no derivatives contracts. PENSION COSTS Pension cover is arranged through pension insurance companies. Pension insurance costs are booked as they occur. Pension insurance costs of foreign subsidiaries are presented as required by each respective country s local legislation. FIXED ASSETS Fixed assets are capitalized at their direct acquisition cost in the balance sheet, reduced by the depreciation made according to plan. The planned depreciation is calculated on the basis of the economic life expectancies of the fixed assets either as straight-line depreciation or as a percentage. The depreciation periods for the fixed assets are as follows: Goodwill Other long-term expenditure Buildings and structures Machinery and equipment for own use years 3-8 years 20 years 3-10 years Rental machinery, equipment and machinery, itemized Lifting and loading equipment 8-15 years Small machines 3 8 years Portable spacial units 10 years Rental machinery and equipment, non-itemized Scaffolding 10% Formwork and supporting equipment 10% Other non-itemized 10 33% Goodwill arising from restructuring of the Group is amortized over years depending on the perceived importance of the restructuring to Group strategy. CASH AND BANK Cash and bank includes cash, bank accounts and overnight money market deposits. 26

27 NOTES TO THE INCOME STATEMENT 1) Distribution of net sales, parent company by market area (FIM million) Finland Other European countries 7 Other countries 3 Total ) Distribution of net sales, Group (FIM million) 2000 Finnish operations 285 International operations 35 Total 320 Finnish operations/net sales by product line (FIM million) Small machinery and equipment and personnel hoists Formwork and supporting equipment Scaffolding and weather covers Portable spacial units and containers Tower cranes and hoists Intragroup sales Total ) Other operating income Group Parent company Profits from disposal of fixed assets 262, ,014,26 3,726, Other income 890,047 1,522, , Total 1,152,061 1,784, ,361, ) Materials and services Group Parent company Purchases and change in inventory 43,407,093 31,771, ,733, Outsourced and subcontracted services 26,028,592 23,265, ,316, Total 69,435,685 55,036, ,050, ) Personnel expenses Group Parent company Salaries and wages 60,106,908 47,504, ,455, Pension costs 8,614,587 7,570, ,285, Other indirect employee costs 7,029,453 4,764, ,976, Total 75,750,948 59,839, ,718, Emoluments of management (FIM thousand) Presidents 3,682 Total 3,682 Average number of personnel Finnish operations International operations 99 Total ) Depreciation and write-downs Group Parent company Tangible and intangible assets 36,020,418 28,338, ,709, Depreciation is itemized under non-current assets. 27

28 7) Financial income and expenses Group Parent company Dividend income from outsiders 6,250 5, , Interest income from long-term investments from Group companies 39, Other interest and financial income from Group companies 648, from participating interest undertakings 49, from others 500, , , Exchange rate differences 1,694, Total 2,195,313 1,002, , Interest income from long-term investments and other interest and financial income, total 2,201,023 1,047, , Interest expenses and other financial expenses from Group companies 164, from others 5,171,256 4,941, ,079, Exchange rate and translation differences 1,356,324 4, , Total 6,527,580 5,105, ,079, Total financial income and expenses 4,326,557 4,058, ,773, ) Extraordinary items Group Parent company Extraordinary income Deferred tax assets from previous financial years 2,312,486 Group contributions 4,300, Extraordinary expenses Group contributions -558, Total 2,312,486 3,742, ) Appropriations Group Parent company Difference between depreciation made according to plan and in taxation 4,379, ,094, ) Income taxes Group Parent company Income taxes on actual operations 18,524,060 15,538, ,725, Income taxes on extraordinary items 1,085, Change in deferred tax liability 2,308,012 Total 20,832,072 16,623, ,725,

29 NOTES TO THE BALANCE SHEET NON-CURRENT ASSETS Group Parent company 11) Intangible assets Intangible rights Acquisition cost, Jan 1 591, , , Increase 273, , , Transfers between items -265, , Acquisition cost, Dec , , , Depreciation, Jan 1 Dec 31-11,296 Accumulated depreciation, Dec 31-11,296 Book value, Dec , , , Goodwill Acquisition cost, Jan 1 31,721,351 31,721, ,721, Increase Acquisition cost, Dec 31 31,721,351 31,721, ,721, Accumulated depreciation and write-downs, Jan 1-12,775,784-12,775, ,498, Depreciation, Jan 1 Dec 31-3,277,378-3,277, ,277, Accumulated depreciation, Dec 31-16,053,163-16,053, ,775, Book value, Dec 31 15,668,187 15,668, ,945, Other long-term expenditure Acquisition cost, Jan 1 7,363,243 7,670, ,049, Increase 4,963,536 3,458, ,044, Transfers between items -1,014, Acquisition cost, Dec 31 12,326,779 10,863, ,079, Accumulated depreciation and write-downs, Jan 1-3,260,497-3,260, ,386, Depreciation, Jan 1 Dec 31-1,291,011-1,100, , Accumulated depreciation, Dec 31-4,551,508-4,360, ,260, Book value, Dec 31 7,775,271 5,978, ,818, Total intangible assets 24,032,110 22,171, ,355, Consolidation goodwill Acquisition cost, Jan 1 Increase 12,351,311 Decrease Acquisition cost, Dec 31 12,351,311 Accumulated depreciation and write-downs, Jan 1 Depreciation, Jan 1 Dec ,041 Accumulated depreciation, Dec ,041 Book value, Dec 31 11,868,270 29

30 Group Parent company Tangible assets Land areas Acquisition cost, Jan 1 452, , , Increase 3,939, Acquisition cost, Dec 31 4,391, , , Book value, Dec 31 4,391, , , Buildings Acquisition cost, Jan 1 5,319,769 5,319, ,270, Increase 7,481,163 3,182, , Decrease Transfers between items 265, ,014, Acquisition cost, Dec 31 12,800,932 8,756, ,319, Accumulated depreciation and write-downs, Jan 1-585, , , Depreciation, Jan 1 Dec , , , Accumulated depreciation, Dec 31-1,110, , , Book value, Dec 31 11,690,243 7,838, ,733, Machinery and equipment Acquisition cost, Jan 1 226,605, ,561, ,657, Increase 99,349,233 54,112, ,449, Decrease -15,569,208-19,758, ,546, Acquisition cost, Dec ,385, ,915, ,561, Accumulated depreciation and write-downs, Jan 1-77,138,316-77,138, ,881, Accumulated depreciation on decreases 2,723,051 2,723, ,038, Depreciation, Jan 1 Dec 31-31,788,313-23,618, ,295, Accumulated depreciation, Dec ,203,578-98,033, ,138, Book value, Dec ,182, ,881, ,422, Total tangible assets 220,264, ,172, ,609, ) Investments Group Parent company Holdings in Group companies Acquisition cost, Jan 1 100, Increase 36,362, , Transfers between items 11,276, Book value, Dec 31 47,738, , Holdings in associated companies Acquisition cost, Jan 1 11,276, ,276, Transfers between items -11,276, Book value, Dec ,276,400.00

31 13) Other shares and holdings Group Parent company Acquisition cost, Jan 1 315, , , Increase 1,639,608 1,625, Decrease -49, Book value, Dec 31 1,954,822 1,940, , The value on the date of establishing the Group is stated as the acquisition cost of the Group s fixed assets on Jan 1, The balance sheet value of machinery and equipment in the parent company on Dec 31, 2000, was FIM 144,881, (FIM 131,422, on Dec 31, 1999) and in the Group FIM 208,182, ) Shares and holdings Group Parent company in Group companies Domicile holding holding Teline-Rami Oy Helsinki 100% 0% Uudenmaan Telineykköset Oy Tuusula 100% 100% Rami-Service Oy Helsinki 100% 100% Rami-Cranes Oy Helsinki 100% 100% Rami-Rent Oy Helsinki 100% 100% Rami-Tilat Oy Helsinki 100% 100% A-Rakennusmies East Oy Helsinki 65% 65% Kiinteistö Oy Tuusulan Telinetalo Tuusula 100% 0% ZAO Techrent Moscow 100% 0% ZAO Peterrent St. Petersburg 100% 0% A-Ramirent AS Tallinn 100% 0% A-Ramirent SIA Riga 67% 0% A-Ramirent UAB Vilnius 100% 0% Ramirent Polska Sp. zo.o. Warsaw 100% 0% Rema-Rental S.A. Szczezin 52% 0% Rami-Tilat Oy and Rami-Rent Oy had no business operations in the 2000 financial year. 15) Other shares and holdings Group Parent company Telephone shares and holdings 327, , , Shares in housing corps/business premises 1,625,358 1,625, Other shares and holdings 2,000 2, , Total 1,954,822 1,940, , ) Inventories Group Parent company Goods 18,475,793 12,026, ,461,

32 17) Receivables from Group companies Parent company 2000 Long-term Loans 21,305, Short-term Sales receivables 3,867, Loans 2,405, Prepayments and accrued income 815, Other receivables 4,300, Total 32,692, ) Receivables from participating interest undertakings Parent company 1999 Long-term Other receivables 1,585, Short-terms Sales receivables 1,487, Total 3,072, ) Capital and reserves Group Parent company Share capital, Jan 1 20,650, ,650, Rights issue 289, Share capital, Dec 31 20,939,520 20,939, ,650, Share premium account, Jan 1 21,267, ,267, Issue premium 4,710, Share premium account, Dec 31 25,978,883 25,977, ,267, Legal reserve, Dec 31 35,638 Retained earnings, Jan 1 46,220, ,528, Dividend distribution -16,520, ,520, Retained earnings, Dec 31 51,753,708 29,700, ,008, Net profit for the year 49,105,068 40,787, ,212, Capital notes, Jan 1 10,000, Amortization -10,000, Capital notes, Dec 31 Total shareholders equity 147,812, ,406, ,798,

33 20) Distributable funds Group Parent company (FIM million) Retained earnings Net profit for the year Capitalized founding costs -1.1 Part of accumulated depreciation difference transferred to shareholders equity Affect of associated companies -5.4 Total ) Accumulated appropriations, parent company Parent company Accumulated depreciation difference, Jan 1 40,479, ,384, Transfer of business, Rami-Cranes Oy -2,882, Increase in depreciation difference 4,379, ,094, Accumulated depreciation difference, Dec 31 41,976, ,479, ) Deferred tax assets and liabilities Group 2000 Deferred tax assets from timing differences 1,526,701 from consolidation 392,892 Deferred tax liabilities from appropriations 13,251,167 from timing differences 841,697 Total deferred tax liabilities -12,173,271 The deferred tax liability arising from the parent company s accumulated depreciation difference is FIM 12,173,166 (FIM 11,739,004 in 1999). 23) Long-term liabilities, debenture loan The debenture loan of FIM 9,800, is from 1995, and its terms and conditions are as follows: Loan period, Nov 2, 1995 Nov 2, 2002 Repayments twice a year starting on May 2, 2001 Fixed interest at 8% during Nov 2, 1995 Nov 2, 1997, and at 9% during Nov 2, 1997 Nov 2, 2002, but at least the Bank of Finland s 6-month Helibor rate from Nov 2, The terms and conditions of the debenture loan have not changed since the previous financial statements. There are no unbooked expenses in connection with issuing the loan. 24) Liabilities maturing in more than five years Group Parent company Pension loans 6,308,474 6,308, ,000, ) Debts to participating interest undertakings 1999 Accounts payable 74,

34 26) Debts to Group companies Parent company 2000 Accounts payable 289, Other debts 5,987, Accruals and deferred income 96, Total 6,373, ) Short-term debts Group Parent company Credits of FIM 30 million are included in interest-bearing short-term loans on Dec 31, The credit facility, which is in force until Dec 31, 2003, allows renewable credits of 3, 6 or 12 months duration to be raised. The total credit facility on Dec 31, 2000 was FIM 60 million, of which FIM 30 million was unused. Accruals and deferred income of FIM 18,064, in the parent company on Dec 31, 2000 (FIM 14,226, in 1999) and FIM 25,534,395 in the Group comprised mainly tax liabilities, salaries and other accruals. Repayments due in the following year: Debenture loan 4,900,000 4,900, Loans from financial institutions 9,508,529 7,842, Pension loans 3,859,431 3,859, Total 18,267,960 21,961, Current account overdraft in use 9,219,466 9,219, Short-term loan overdraft in use 30,000,000 30,000, Debts to Group companies 4,400, Total short-term debts 57,487,426 60,221, ) Debts secured by mortgages or pledges Group Parent company Loans from financial institutions 65,226,553 63,679, ,769, ) Mortgages and pledges Group Parent company Real estate mortgaged 6,302,817 6,302, ,000, Companies mortgaged 100,747,000 94,200, ,200, Shares (book value) 1,627,358 1,627, Other pledges on behalf of Group companies Guarantees 2,602, Pledges and guarantees given as security for other liabilities Group companies have not given pledges or guarantees as security for liabilities other than their own or Group company liabilities. 34 Leasing obligations Leasing payments due in following financial year , ,00 Leasing payments due later , ,00 Total , ,00

35 30) Credit facilities, exchange rate and interest rate risks The parent company has a current account credit facility of FIM 20 million and a loan facility of FIM 60 million, of which FIM 30 million was unused at the time of closing the accounts. A-Rakennusmies East Oy has a current account credit facility of FIM 5 million, which was completely unused on Dec 31, The Group operates partly in countries where, owing to the undeveloped nature of the money markets and the instability of the currency, the hedging of interest rate risks is not economically feasible in practice. The local external loans of Group companies are always taken, whenever it is economically feasible and possible, in the local currency. The Group s subsidiaries outside Finland are to a large extent financed by loans given by A-Rakennusmies East Oy. Starting in the spring of 2000, the subsidiaries began to raise especially leasing finance and to some extent bank loans for the purpose of investments in spring In the Baltic countries, leasing finance has typically been DEM or EUR-linked. Up to Dec 31, 2000, the Russian companies had no loans other than the Group s internal foreign currency loans which were non-hedged. The Group s parent company has no foreign currency loans. The interest period of the parent company s credits is typically 6 12 months and, concerning pension loans, 2 3 years. The debenture loan (the repayment of which begins in the 2001 financial year) has fixed interest of 9%. Interest periods of different lengths are used to reduce the interest rate risk in the Group. 31) Ten principal shareholders according to share register on Dec 31, 2000 Shares % of total shares and votes Gaspar Oy Ab 1,068, Oy Julius Tallberg Ab 1,001, Optiomi Oy 411, Finnish National Fund for Research and Development 202, PT Pension Foundation 86, Sampo Life Insurance Company Ltd. 82, The Finnish Medical Foundation 81, Alfred Berg Small Cap Fund 77, Gyllenberg Small Firm Fund 76, Kemira Chemicals Oy Pension Foundation 68, Other shareholders 1,032, On Dec 31, 2000, 31.58% of the shares and votes of A-Rakennusmies Oyj were owned or controlled, directly or indirectly, by the President & CEO and the members of the Board, excluding all options. When the options are included, the corresponding figure is 29.1%. 35

36 32) Shareholder structure on Dec 31, 2000 Shareholders Total shares and votes Companies Privately-held companies 44 2,598,233 Financial and insurance institutions ,257 Public organizations ,482 Non-profit organizations ,530 Households/private persons ,202 International shareholders The number of nominee-registered shares on Dec 31, 2000 was 64,600, or 1.54% of total shares and votes. 33) Distribution of shareholdings on Dec 31, 2000 No. of % of No. of % of No. of shares shareholders shareholders shares total shares , , , ,001 10, , , , ,305, ,001 1,000, , over 1,000, ,070, ) Option programs The company has two valid option programs, the first launched in 1998 and the second in The 1998 options were allotted to key personnel and Board members of the A-Rakennusmies East Group. The 150,000 options were divided into 75,000 A options and 75,000 B options, all of which were subscribed for in the 1998 financial year. Those subscribing for the options jointly own and control no more than 3.9% of the company s share capital and votes. The share subscription period for those holding A options began on April 1, 2000 and will end on May 31, To date, no share subscriptions have been made. The share subscription period for those holding B options will begin on April 1, 2002 and will end on May 31, The share subscription price will be determined on the basis of the results of the A- Rakennusmies East Group. The options issued in 2000 and designated as C options were allotted to key personnel of the A- Rakennusmies Group, including the CEOs and Board members of companies in the Group. The 400,000 options were all subscribed for in the 2000 financial year. Those subscribing for the options jointly own and control no more than approximately 9.6% of the company s share capital and votes. The share subscription period for those holding the options will begin on May 1, 2002 and end on April 30, The share subscription price will be the average trade-weighted price in the Helsinki Exchanges during the period January 1 March 31, The subscription price of the share will be reduced after the period for determining the subscription price and before the actual subscription by the amount of dividends payable on the record date of each dividend. However, the subscription price of the share will always be at least the par value of the share. The two option programs include more than 50 key Group personnel, including insiders as defined in the Companies Act, chapter 1, section 4. The total holding of these persons in the company amounts, at the time of signing the financial statements for 2000 and prior to the exercising of the East options, to 14.6% of the company s shares and votes. After subscribing for the options, and if they later exercise all the options to subscribe for shares, the amount may rise to no more than 17.0% of the company s shares and votes.

37 35) Board s valid authorization to acquire and surrender the company s own shares The Board of Directors is authorized until 13 April, 2001 to acquire up to 206,000 of the company s own shares, equal to 4.99% of the total number of shares. The company can acquire its own shares in order to develop the capital structure of the company, and/or to use them as payment in the case of corporate or business acquisitions. The shares can be acquired by decision of the Board of Directors either by means of public trading on the Helsinki Exchanges or by making a public offer of purchase concerning the shares to be purchased. The shares can be acquired at their market value in public trading at the moment of acquisition. The authorization has not yet been used. The Board is authorized until 13 April, 2001 to decide on the surrender of the company s own acquired shares on the following conditions: The authorization is valid for no more than 206,000 shares. The Board is authorized to decide to whom and in what order the company s own shares will be surrendered. The Board can decide on the surrender of the company s own shares in ways which depart from the pre-emptive rights of shareholders to purchase the company s own shares. The shares can be used as payment in cases of corporate or business acquisitions or when the company otherwise acquires business-related assets in a way and to the extent decided by the Board. The surrender price must be no less than the market price quoted in the Helsinki Exchanges at the moment of surrender. The authorization has not yet been used. 36) Board s valid authorization to decide on the execution of an allotted share issue The Board of Directors is authorized until April 13, 2001, to decide on the raising of the share capital by one or more rights issues, giving the right to subscribe to no more than 430,000 of the company s new shares, equal to 10.41% of all the current shares, and in which the company s share capital can be raised by a total of no more than FIM 2,150,000. The authorization entitles the Board to depart from the pre-emptive rights of shareholders to subscribe for new shares, and to decide on the subscription prices and terms. The authorizations departing from the pre-emptive rights of shareholders can be used provided that there are weighty financial reasons from the company s perspective, such as the financing of corporate or business acquisitions or other arrangements affecting the development of the company s business operations. They cannot be made for the benefit of those who are counted as insiders of the company. In the case where share capital is raised by a rights issue, the Board of Directors is entitled to decide whether the shares can be subscribed for in kind, or otherwise on particular conditions. The authorization was used during the period under review. 37) Increase of share capital by a rights issue During the 2000 financial year, A-Rakennusmies Oyj s share capital was raised by a rights issue of 57,904 shares, equaling FIM 289,520. The increase in share capital was entered in the Trade Register on 3 July, The rights issue, which was allotted to the former owners of Uudenmaan Telineykköset Oy and Etelä-Suomen Telinepiste Oy, was used as part-payment in acquiring the said companies. The number of A-Rakennusmies Oyj shares after the rights issue is 4,187,

38 KEY FIGURES INCOME STATEMENT (FIM thousand) Net sales 319, , , , ,130 Other operating income 1,152 4,362 6,590 6,154 5,176 Operating profit before depreciation 108,029 75,515 73,586 59,450 40,492 Depreciation 36,020-25,709-23,473-19,305-19,381 Operating profit 72,008 49,806 50,113 40,145 21,111 Financial income and expenses -4,327-3,773-5,138-7,664-9,062 Profit before extraordinary items 67,682 46,033 44,975 32,481 12,049 Profit before appropriations and taxes 69,994 46,033 42,265 39,056 12,049 Net profit for the year 49,105 30,212 21,067 18,419 5,030 BALANCE SHEET (FIM thousand) Fixed assets 258, , , , ,156 Inventories 18,476 12,461 10,794 9,229 9,216 Receivables 42,826 25,294 24,374 22,673 20,131 Cash and bank receivables 10,382 5,764 3,082 6,257 2,932 Shareholders equity 147, ,283 99,923 51,810 26,438 Minority interests 17,510 Interest-bearing debt 102,746 58,705 67,950 95, ,210 of which capital notes 10,000 20,000 20,000 Non interest-bearing debt 61,734 39,187 35,406 28,171 18,787 Balance sheet total 329, , , , ,435 KEY FIGURES FOR PERFORMANCE Increase in net sales 45.6% 8.1% 21.8% 19.8% 14.2% * Operating profit before depreciation, % of net sales 33.8% 34.4% 36.2% 35.7% 29.1% Operating profit, % of net sales 22.5% 22.7% 24.7% 24.1% 15.2% Profit before extraordinary items, % of net sales 21.2% 21.0% 22.2% 19.5% 8.7% Profit before appropriations and taxes, % of net sales 21.9% 21.0% 20.8% 23.4% 8.7% Net profit for the year, % of net sales 15.4% 13.8% 10.4% 11.1% 3.6% Return on investment 32.4% 29.2% 32.2% 28.3% 13.9% Return on equity 34.5% 32.5% 49.3% 73.4% 42.6% Net debt (FIM million) Gearing 55.9% 45.1% 64.9% 172.0% 421% Equity ratio 50.1% 54.6% 49.2% 29.5% 16.6% Personnel (average) Personnel (at the end of year) Gross investment in fixed assets (FIM million) , Gross investment, % of net sales 40.7% 19.1% 27.9% 14.3% 7.8% 38

39 KEY FIGURES PER SHARE Earnings per share, FIM 1) Shareholders equity per share, FIM 1) Dividend per share, FIM 1) Payout ratio 1) 43.0% 46.8% 44.1% 34.2% 38.3% Effective dividend yield 1) 6.0% 4.5% 5.3% Price / earnings (P/E) 1) Highest share price, FIM Lowest share price, FIM Average share price, FIM Share price on Dec 31, FIM Market capitalization on Dec 31, FIM million No. of shares traded 581,000 1,100,000 2,200,000 No. of shares traded, % of total no. of shares 1) 13.9% 25.9% 52.5% 1) The figure used for total number of shares on Dec 31, 2000 is 4,187,904, and in earlier years 4,130,000, i.e. the number of shares on the balance sheet date. Options have been disregarded, as they have no material significance. * comparison figure pro forma 1995 CALCULATION OF KEY FIGURES Return on equity (ROE),%: (Profit or loss before extraordinary items - taxes) x 100 Shareholders equity + minority interest (average over the year) Shareholders equity per share, FIM: Shareholders equity Number of shares, adjusted for share issues, on balance sheet date Return on investment (ROI),%: (Profit or loss before extraordinary items + interest and other financial expences) Balance sheet total - non-interest bearing debts (average over the year) x 100 Payout ratio, %: Dividend per share Earnings per share x 100 Net debt: Interest-bearing debt - cash and bank receivables, and financial securites Equity ratio: Gearing: (Shareholders equity + minority interest) Balance sheet total - advances received x 100 Net debt Shareholders equity + minority interest x 100 Earnings per share (EPS), FIM: Dividend per share: Profit before extraordinary items - taxes ± minority interest Average number of shares, adjusted for share issues, during the year The change on deferred tax liability is not included in taxes. Dividend paid Number of shares The key ratios were calculated in accordance with the general instructions of the Finnish Accounting Standards Board of Dec 17, 1999, except for the Earnings per share ratio, where the change in deferred tax liability is not included in taxes. 39

40 BOARD OF DIRECTORS PROPOSAL PROPOSAL OF THE BOARD ON THE DISTRIBUTION OF PROFIT The Group s distributable funds amount to FIM 67.4 million. The distributable retained earnings of the parent company are FIM 70.5 million, of which the net profit for the year accounts for FIM 40.8 million. The Board of Directors proposes to the Annual General Meeting that a dividend of FIM 5.00 per share, or FIM 20,939,520 in total, be distributed. Helsinki, 27 February 2001 Raimo Taivalkoski Thomas Tallberg Chairman Vice Chairman Erkki Norvio Tuire Mannila CEO, Member of the Board Member of the Board AUDITOR S NOTE The financial statements have been prepared in accordance with the Finnish Standards on Accounting. We have today issued a report on the audit performed by us. Helsinki, 27 February 2001 KPMG WIDERI OY AB Firm of authorized public accountants 40 Solveig Törnroos-Huhtamäki APA

41 AUDITORS REPORT TO THE SHAREHOLDERS OF A-RAKENNUSMIES OYJ We have audited the accounting records and the financial statements, as well as the administration by the Board of Directors and the Managing Director of A-Rakennusmies Oyj for the year ended 31 December The financial statements prepared by the Board of Directors and the Managing Director include the report of the Board of Directors, consolidated and parent company income statements, balance sheets, cash flow statements and notes to the financial statements. Based on our audit we express an opinion on these financial statements and the company s administration. We have conducted our audit in accordance with Finnish Generally Accepted Auditing Standards. Those standards require that we plan and perform the audit in order 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 the administration has been to examine that the Board of Directors and the Managing Director have complied with the rules of the Finnish Companies Act. In our opinion, the financial statements, showing a profit of FIM 49,105,068 in the consolidated income statement and a profit of FIM 40,787, in the parent company income statement, 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 both the consolidated and parent company result of operations, as well as 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 financial year audited by us. The proposal made by the Board of Directors on how to deal with the result is in compliance with the Finnish Companies Act. Helsinki, 27 February 2001 KPMG WIDERI OY AB Solveig Törnroos-Huhtamäki Authorized Public Accountant 41

42 CORPORATE GOVERNANCE Members of the management group from the left. In back Jorma Nyyssölä, Petri Söderholm, Kauko Hirvinen, Kari Aulasmaa, Mika Riikonen. In front: Tuire Mannila, Erkki Norvio, Reijo Fernelius. 42 ELECTION OF BOARD OF DIRECTORS AND PRESIDENT & CEO The Annual General Meeting elects the members of the Board of Directors. The Board of Directors elects one of its members as Chairman. Members of the Board of Directors are elected until further notice. There is no resignation rotation system. The Board of Directors appoints the President & CEO. POSITION OF PRESIDENT & CEO The company s Board of Directors has drawn up a written contract defining the main terms and conditions of employment of the President & CEO. MANAGEMENT SALARIES AND OTHER BENEFITS The Board of Directors decides on the salary and other benefits of the President & CEO. The President & CEO decides on Management salaries and other benefits.

43 BOARD OF DIRECTORS Raimo Taivalkoski (born 1940), MSc in Engineering, has served as Chairman of the Board of the company and its predecessors since He is President of Rakennustuoteteollisuus RTT ry. Thomas Tallberg (born 1934), Doctor of Medicine, has been a member of the Board of Directors since He is a docent in immunology. He has also served as Chairman of the Board of Julius Tallberg Ab since 1967, and a member of the Board of Oy Fiskars Ab since Erkki Norvio (born 1945), MSc in Engineering and Economics, has been a member of the Board of the company and its predecessors since He is the President & CEO of A-Rakennusmies Oyj. He is also a member of the Board of the Federation of Finnish Commerce and Trade, and Vice Chairman of the Board of the Association of Finnish Technical Traders. Tuire Mannila (born 1956), MSc in Economics, has been a member of the Board of Directors since She is the Chief Financial Officer of A- Rakennusmies Oyj. AUDITORS The company s shareholders appoint at least one and at most two auditors each year. At least one of the auditors must be a firm of public accountants certified by the Central Chamber of Commerce. The company s present auditor is the certified public accounting firm of KPMG Wideri Oy Ab, with Solveig Törnroos-Huhtamäki APA as the main auditor. MANAGEMENT GROUP Scaffolding & Weather Covers. He has served the company since Jorma Nyyssölä (born 1946), is responsible for Small Machines and Equipment Rental Operations and the following product lines Portable Spacial Units & Containers, Personal Hoists, Rami Sales and the Technical Trade. He has served the company since From 1988 to 1991 he was deputy CEO of A-Rendmash (Moscow). Kari Aulasmaa (born 1968), civil engineer, is the Management s representative in quality matters. He has served the company since Petri Söderholm (born 1957), Engineer, MBA, B.Sc., has been a member of the Management Group since February 1, 2001, and is responsible for the network of outlets in Finland. He joined the company in The personnel are represented on the Management Group by Kauko Hirvinen and Mika Riikonen. Kauko Hirvinen (born 1953), is an area manager and has served the company since Mika Riikonen (born 1970), is a sales negotiator and has served the company since GUIDELINES FOR INSIDERS The Board of Directors of A-Rakennusmies Oyj has approved its own insider rules, which are in compliance with the insider guidelines issued by the Helsinki Exchanges, the Central Chamber of Commerce and the Confederation of Finnish Industry and Employers. Erkki Norvio is the President & CEO of the company and Chairman of the Management Group. He was appointed President & CEO in Tuire Mannila is the company s Chief Financial Officer. She has served the company since Reijo Fernelius (born 1942), Engineer, is responsible for the company s regional sales and the following product lines Formwork & Support, and 43

44 SHARE TURNOVER AND PERFORMANCE (MONTHLY) SHARE PERFORMANCE 4/ /2000 (average monthly share price, euros) SHARE TURNOVER, NUMBER 4/ /