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ANNUAL REPORT 2001 RAKENTAJAIN KONEVUOKRAAMO OYJ 2001 ANNUAL REPORT “There seems to be no end to the growth in the TABLE OF CONTENTS machine rental business”, “A contraction in the construction industry may even stimulate the INFORMATION FOR SHAREHOLDERS……………………………………….. 4 THE GROUP IN BRIEF………………………………………………………………… 5 rental business” (Taloussanomat, 4 Sept. 2001) CEO’S REVIEW…………………………………………………………………………… 6 RK GROUP - THE MARKET LEADER…………………………………………… 8 ORGANISATION…………………………………………………..…………………….. 9 SERVICE ORGANISATION…………………………………………………………. 9 “Rakentajain Konevuokraamo’s results for the RK GROUP´S BUSINESS RK’s diversified range of products and services ………. 10 first quarter exceeded the expectations of equity Renting is a wise choice Light-weight machinery analysts” (Hufvudstadsbladet, 17 May 2001) Heavy machinery Service and repair……………………………………………………….. 10 Contracting………………………………………………………………….. 10 Diamond cutting and boring “Rakentajain Konevuokraamo have discovered Drying services Construction-site services and event services…………... 11 a tool to raise their image”, “An expanding and Floor smoothing profitable gem” (Taloussanomat, Star Scaffolding Heating appliances Companies, 16 Nov. 2001) Electrical installations Weather protection systems Increasing popularity of moveable buildings – Tilamarkkinat…………………………………………………………… 12 Latest production technology “Undervalued shares of the machine rental Schools and day-care centres business” (Arvopaperi, 2001/11) Offices and auxiliary industrial facilities Construction-site facilities Supermarkets Parmaco halls HUMAN-RESOURCE DEVELOPMENT AND “Rakentajain Konevuokraamo remained no. 1 ENVIRONMENTAL RESPONSIBILITY ………………………………………… 14 Ongoing employee training and innovative in Seppo Saario’s list of superleague listed product development companies, updated on the Internet pages of Quality, the environment and industrial safety BOARD REVIEW…………………………………………………………………………. 15 the Finnish Foundation for Share Promotion” PROFIT AND LOSS ACCOUNT………………………………………………….… 18 (Talouselämä 2001/39) BALANCE SHEET………………………………………………………………………… 18 FUNDS STATEMENTS…………………………………………………………………. 19 NOTES TO THE FINANCIAL STATEMENTS………………………………... 20 Financial statement preparation principles………………... 20 Notes to the profit and loss account………………………….. 22 “Rakentajain Konevuokraamo is a star performer Notes to the balance sheet………………………………………… 24 Other notes……………………………………………….…….………….. 28 despite the slowdown in the construction Calculation of key figures and ratios………………………….. 30 industry” (Helsingin Sanomat, 16 Nov. 2001) Key figures………………………………………………….…….………… 31 BOARD PROPOSAL TO THE ANNUAL GENERAL MEETING……….. 32 AUDITORS´REPORT…………………………………………………………………… 33 NATIONWIDE SERVICE NETWORK……………………………………………. 34 3 INFORMATION FOR SHAREHOLDERS Annual General Meeting Rakentajain Konevuokraamo Oyj’s Annual General Meeting will be held on Thursday, 4 April 2002 at 1.00 p.m. at the Group’s headquarters, Kalliosolantie 2, Vantaa. Those shareholders who have been entered in the list of shareholders maintained by Finnish Central Securities Depository Ltd. by 25 March 2002 shall be entitled to participate in the Annual General Meeting. A shareholder wishing to attend the meeting should notify by 4.00 p.m. on Monday, 25 March 2002 either in writing to the address Kalliosolantie 2, 01740 Vantaa, by telephone +358 9 894 81 (Sädekari, Syvälahti or Kuosmanen), by fax +358 9 894 8287 or by e-mail [email protected]. Dividend payment At Board proposal, dividend, adopted by the Annual General Meeting, will be paid to shareholders entered in the shareholders’ register maintained by the Finnish Central Securities Depository Ltd. on the record day, 9 April 2002. The dividend will be paid on 16 April 2002. Financial information schedule for 2002 Financial statement bulletin 2001 Thursday, 21 February 2002 Annual report week 12, 2002 Three months interim report Thursday, 16 May 2002 Six months interim report Thursday, 22 August 2002 Nine months interim report Thursday, 14 November 2002 Share performance analyses Rakentajain Konevuokraamo Oyj share performance is monitored and analysed e.g. the following analysts: Mr Jari Koskela Nordea Securities Oyj tel. +358 9 36949312 Mr Henri Parkkinen Pankkiiriliike Opstock Oy tel. +358 9 4044409 Mr Gorm Thomassen Cazenove & Co tel. +44 20 75882828 Mr Jari Westerberg FIM Pankkiiriliike Oy tel. +358 9 6134600 Mr Ronny Ruohomaa Deutsche Bank Ag tel. +44 20 75453934 Mr Henry Nurminen Mandatum Pankkiiriliike Oy tel. +358 01023610 B SERIES SHARE, TRADING VOLUME EARNINGS PER SHARE, € 900 000 0,8 800 000 700 000 0,7 600 000 0,6 500 000 0,5 400 000 0,4 300 000 0,3 200 000 100 000 0,2 0 0 -97 -98 -99 -00 -01 -97 -98 -99 -00 -01 B SERIES SHARE PRICE, € RETURN ON EQUITY RETURN ON INVESTMENT 6 4 % % 40 40 30 2 30 20 20 10 10 0 0 0 -97 -98 -99 -00 -01 -97 -98 -99 -00 -01 -97 -98 -99 -00 -01 4 THE GROUP IN BRIEF 2001 2000 Change % Turnover MEUR 67.97 53.96 +26.0 Operating profit MEUR 17.76 13.48 +31.7 % of turnover % 26.1 25.0 +4.4 Profit before extraordinary items MEUR 16.92 12.67 +33.5 % turnover % 24.9 23.5 +6.0 Balance sheet total MEUR 74.01 69.89 +5.9 Return on equity % 27.5 30.1 -8.6 Return on investment % 28.8 31.0 -7.1 Equity ratio % 63.1 60.0 +5.2 Average number of personnel 496 456 +8.8 A and B series shares Earnings per share EUR 0.83 0.64 +29.7 Shareholders’ equity per share EUR 3.27 2.85 +14.7 Dividend per share EUR 0.45*) 0.34 +32.4 Market capitalisation MEUR 66.96 52.97 +26.4 B series shares P/E ratio 5.84 5.92 -1.4 Lowest quotation EUR 3.58 3.20 +11.9 Highest quotation EUR 4.99 4.50 +10.9 Trading volume number 4,338,597 1,372,665 +216.1 There is no public quotation for A series shares. *) Board proposal EQUITY RATIO TURNOVER OPERATING PROFIT % MEUR 80 % 70 70 35 60 60 30 50 50 25 40 40 20 30 30 15 20 20 10 10 10 5 0 0 0 -97 -98 -99 -00 -01 -97 -98 -99 -00 -01 -97 -98 -99 -00 -01 PERSONNEL CAPITAL EXPENDITURE AND TURNOVER BY CUSTOMER GROUP DEPRECIATION 500 MEUR 450 14 CONSTRUCTION INDUSTRY 34 % 400 12 350 OTHER INDUSTRIES 9 % 10 300 250 8 PUBLIC ADMINISTRATION 38 % 200 6 150 4 100 TRADE 10 % 2 50 0 0 HOUSEHOLDS AND AGRICULTURE 9 % -97 -98 -99 -00 -01 -97 -98 -99 -00 -01 5 CEO´S REVIEW The financial year 2001 was characterised by a steady growth and development for Rakentajain Konevuokraamo Oyj Group. The decisions taken in recent years and the operational re-focusing proved successful, contributing to the company’s performance. The EUR 67.97 million turnover for 2001 exceeded the targeted figure, showing a year- on-year improvement of 26 per cent. Turnover of our sub-Group, Tilamarkkinat Oy (Tilamarkkinat- Yhtiöt Oyj), soared by 31.8 per cent, while that of the parent company climbed by 20 per cent on the previous year. The Group’s share of the total market in Finland is estimated to have risen to approximately 26–27 per cent. In addition to the parent company’s machinery and equipment rental business, the contracting services business, including diamond-tipped precision cutting and boring services, as well as drying services, provided on a nationwide basis, showed favourable development. Furthermore, the Group has branched out into smoothing of concrete floors. Construction Site Services will become an independent profit centre, in which the tent and event businesses will join. The Group’s profit was 33.5 per cent higher than in the previous year, totalling EUR 16.92 million (EUR 12.67 million). Earnings per share were EUR 0.83 (EUR 0.64). The trend in customer needs and demand for the Group’s services developed as expected during the financial year. The economic downturn that started in early autumn 2001 did not have a considerable effect on the Group’s operating environment during the year. However, as the slowdown has been quite persistent, it has affected companies’ investment decisions in our country. This will be reflected in the reduced number of construction projects towards the end of 2002. If the budding economic recovery speeds up, construction may resume and take off in early 2003. As matters stand, demand for machinery and equipment rental services and construction-site services may be hit by a transient slowdown at the end of the current year. 6 Approximately one-third of the Group’s turnover stems from the public sector, in which the municipal sector bulks large. The moveable schools and day-care centres manufactured, sold and rented by Tilamarkkinat Oy have become our main product in this sector. A moveable building rented for a few years would serve as an excellent solution by allowing municipalities with overall financial difficulties to fulfil their obligation for schools and day-care centres. Making this solution more widely known requires more dedicated marketing efforts, which has already started. Turnover for the current financial year is expected to increase by a few per cent, whereas profit is expected to be more modest than in the previous year. We will continue to make investments in future operations and adhere to the EUR 84 million (FIM 500 million) turnover target for 2003, which we set two years ago. The number of Rakentajain Konevuokraamo Oyj’s shareholders has more than trebled in the past 14 months. We gratefully interpret this as a token of appreciation of our strategic decisions and operational specifications implemented in recent years. In the rental business, interaction between customers and the company’s employees is process-like in nature and therefore closer than in other sectors of commerce. The Group’s personnel have been successful in meeting the needs of our growing and diversifying customer base. By reinforcing our human and materials resources according to varying needs, we aim to take in an increasingly larger share of the operations outsourced by companies and other organisations. Pleasant co-operation with all interested parties has also incentivised both the Group management and employees to strive for increasingly higher quality services.