Financial Result for 2000

15.02.2001

January-December 2000

Net sales increased 18 % to EUR 2,543 (1999: 2,153) million. The engineering business grew by 28 % to EUR 2,260 million.
Strong organic growth and major acquisitions were the foundation for the record sales.
The operating profit rose 31 % to EUR 161 (123) million and the operating margin was 6.3 (5.7) percent. In the engineering business the operating margin increased to 7.7 (5.4) percent.
Profit after financial items rose by a third to EUR 130 (98) million.
Orders received rose 36 % to EUR 2,383 (1,758) million and the order book at end-December was EUR 453 (end-1999: 287) million, an increase of 58 %.
Earnings per share were EUR 1.63 (1.24).
CEO Christoffer Taxell: "Year 2000 was a record year for Partek."

"Year 2000 was a record year for Partek. Both sales and profits increased strongly.

We were favoured by good demand, but we also acquired market shares. We aim to continue increasing our market shares. Our organic growth was 14 percent, and total growth was even higher.

Based on year 2000 all Partek"s business areas fare better than well in comparison with our best competitors in terms of profitability."

Annual Report of the Board of Directors 2000

In 2000 Partek grew substantially and the profit improved by a third. Good demand, an increase in market share in several areas and major corporate acquisitions contributed to the growth. The profit after financial items increased to EUR 130 (1999:98) million.

Partek supplies mobile logistical solutions for customers in the transportation sector, industry and primary production. Partek’s businesses hold the leading position in their market segments. Partek is the worlds leading supplier of logistical solutions for ports and freight terminals and of chassis-mounted load-handling equipment. Forest Machines is the strongest-growing supplier in its field and is increasing its market share in the cut-to-length harvesting method, which is spreading throughout the world. Tractors is the market leader in the Nordic countries and holds second place in Latin American.

Increased sales and orders received

Consolidated net sales rose 18 percent to EUR 2,543 (2,153) million. In the comparison period the insulation operations are included in the consolidated figures up to the date of divestment on August 31, 1999, and subsequently in the associated companies’ result.

The order book in the engineering operations totalled EUR 453 (287) million at the end of December, and orders received during the year were EUR 2,383 (1,758) million. Net sales rose 28 percent to EUR 2,260 (1,759) million. All business areas increased their net sales.

Net sales in Container Handling grew by 20 percent. Deliveries to ports and terminals showed the biggest increase. Growth was strongest in Asia Pacific, particularly in China, Singapore and Korea. Sales of terminal tractors also increased in the United States.

Net sales in Load Handling grew by 60 percent. In this annual report Zeteco AB is included in Load Handling’s figures from March 1, 2000. Demand for load-handling equipment increased in Asia and North America, and in Europe it was stable.

Forest Machines’ net sales rose by 30 percent. Demand continued strong, especially in Europe.

There was an upswing in the demand for tractors in Brazil and net sales increased. Net sales on the shrinking European market remained at the previous year’s level. Tractors’ net sales rose by 13 percent.

Investment and acquisitions support Partek"s strategy

The Group’s gross investment amounted to EUR 581 (159) million, EUR 495 (64) million of which was spent on acquisitions. A major part of investments was in information systems. The extension to the forest machine plant at Umeå, Sweden was completed in the spring. In the autumn, a new customer service centre was opened at the tractor plant in Suolahti, Finland. Construction of a new paint shop was started at Kalmar"s plant in Lidhult, Sweden.

The U.S. forest machine company Timbco was acquired in July. Timbco is a pioneer in tracked forest machines and is one of the leading companies in its sector in North America. Timbco"s value in the deal was EUR 52 million.

Partek"s holding in Kalmar Industries AB increased during the year from 68 to 99 percent. The investment amounted to EUR 113 million. Partek has started redemption of the remaining shares, and Kalmar was delisted from the OM Stockholm Exchange in November 2000.

Zeteco AB became a Partek subsidiary in March. Partek’s holding in Zeteco increased from 23 percent to 99 percent during the year. The investment amounted to EUR 145 million. Redemption of the remaining shares in Zeteco has started and Zeteco was delisted from the OM Stockholm Exchange in December 2000.

In October Partek acquired the truck-mounted forklift truck operations of U.S. Terex Corporation. The agreement covers Moffett Ltd in Ireland, Kooi BV in the Netherlands and Princeton Piggy Back operations in the United States. The price was EUR 155 million. Demand for truck-mounted forklifts has increased substantially during the past ten years and the trend is expected to continue. Truck-mounted forklifts have been developed for installation on the back of trucks and trailers. They give a vehicle more uses and make it possible to flexibly transfer goods from the vehicle to the destination point. The acquisitions of the truck-mounted forklift operations and of Zeteco, the world’s foremost producer of tailgate lifts for trucks, make Partek the undisputed leader in chassis-mounted load-handling equipment.

In December an agreement was signed for the acquisition of the Dutch companies Nelcon BV, a producer of container cranes and straddle carriers, and Groot-Hensen B.V., a maintenance service company. The net sales of the Rotterdam-based companies are EUR 80 million and they employ 260 people. Nelcon has a wide product range that includes ship-to-shore container gantry cranes (STS), rail-mounted yard gantry cranes (RMG) and diesel-electric straddle carriers. The Groot-Hensen operations strengthen Kalmar’s maintenance network on the north coast of continental Europe. The transaction is subject to customary regulatory approvals.

Klaus Eger GmbH, a sales and maintenance company operating at the ports of Hamburg and Bremerhaven, was also acquired in December.

An independent electronic marketplace for pre-used machines, Mascus, was opened in January 2001. Several dealers market earth-moving machines, agricultural machines and transportation vehicles on the marketplace. The product range will later be expanded to forklift trucks, load-handling equipment and forest machines. Mascus Oy Ab’s aim is to achieve a significant share of Europe’s EUR 14 billion pre-used machine market inside three years. Partek owns 80 percent of the company, but the intention is to widen the ownership base.

The truck sales and service company RS Hansa Auto Oy became a fully-owned subsidiary of Partek as Renault V.I."s 50-percent holding in the company was acquired at the end of the year.

Moving closer to the customer in the value chain

Partek is seeking growth by moving closer to the customer in the value chain by developing value-adding maintenance and spare parts services and customer financing. In 2000 after-sales increased by 30 percent to EUR 341 (263) million.

The share of products made to customer-order is high and is continuously increasing. By manufacturing module-based products, the flexibility, speed and efficiency of the business is increased.

Partek utilises e-business as part of the business processes to improve customer service and make operations more efficient. Internet-based solutions make the entire value chain integrated and transparent.

Consolidated research and development expenditure was EUR 43 (39) million. The engineering business accounted for EUR 40 (31) million, which is 1.8 (1.8) percent of net sales. Partek effectively combines hydraulics, electronics and information technology as well as measuring and steering systems. These components are key in all product development, in order for Partek to answer to prevailing and future demands relating to efficiency, the environment and ergonomics. Partek broadens its pool of knowledge through an extensive co-operation network, which includes universities, research institutes and industrial partners.

Personnel increases through acquisitions

During the year the Group employed an average of 11,752 (11,168) people. At the beginning of the year the number of employees was 9,751 and at the end 12,893. Corporate acquisitions increased the number of personnel by 2,333. The divestment of Norba reduced the personnel by 192.

In Finland Group companies employed 4,659 (4,085) people at the end of the year, of which 81 (79) in the parent company.

Tables:

Net sales

Meuro 2000
1999
10-12/00
10-12/99

Container handling 643.2
537.3
216.6
157.6

Load handling 671.4
419.2
200.7
120.7

Forest machines 317.2
243.8
100.8
76.3

Tractors 671.1
592.5
182.3
167.4

Eliminations -43.3
-33.7
-14.1
-9.3

Total 2,259.6
1,759.1
686.3
512.7

Nordkalk 202.8
187.4
54.2
46.3

Insulation -
144.1
-
-

Others and eliminations 80.4
62.3
19.3
17.5

Group 2,542.8
2,152.9
759.8
576.5

Operating profit and profit after financial items

Meuro 2000
1999
10-12/00
10-12/99

Container handling 49.3
27.8
21.9
10.1

Load handling 58.0
23.0
22.3
8.2

Forest machines 31.6
14.2
11.1
5.2

Tractors 34.4
29.7
6.6
5.8

Total 173.3
94.7
61.9
29.3

% 7.7 %
5.4 %
9.0 %
5.7 %

Nordkalk 20.8
25.5
4.9
4.6

Insulation -
8.9
-
-

Other units and eliminations -5.5
6.7
1.6
-6.6

Bonshare -6.0
-
-6.0
-

Goodwill depreciation on group level -22.0
-13.2
-7.6
-3.3

Operating profit, Group 160.6
122.6
54.8
24.0

% 6.3 %
5.7 %
7.2 %
4.2 %

Share of results of associated companies 9.7
9.3
3.0
4.0

Net financial costs -40.1
-33.8
-12.4
-8.7

Profit after financial items, Group 130.2
98.1
45.4
19.3

% 5.1 %
4.6 %
6.0 %
3.3 %

Financial ratios for business areas

Operating profit %
ROC % CTR

2000
1999
2000
1999
2000
1999

Container handling 7.7
5.2
23
13
2.9
2.4

Load handling 8.6
5.5
25
18
2.8
3.1

Forest machines 10.0
5.8
33
18
3.2
2.9

Tractors 5.1
5.0
19
16
3.6
3.0

Total 7.7
5.4
24
15
3.0
2.7

Personnel

Average
End of period

2000
1999
Dec.31,00
Dec.31,99

Container handling 3,107
3,141
3,255
2,944

Load handling 3,468
2,100
3,912
2,016

Forest machines 1,131
1,010
1,180
1,030

Tractors 2,358
2,375
2,358
2,375

Total 10,064
8,626
10,705
8,365

Nordkalk 1,302
1,060
1,435
1,029

Insulation -
1,124
-
-

Others 386
358
753
357

Group 11,752
11,168
12,893
9,751

of which:
outside Finland 7,431
6,272
8,234
5,666

 

 

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