Vuosikertomus Annual Report 2018 Plc Ponsse

VUOSIKERTOMUS PONSSE PLC PONSSE PLC 2018 ANNUAL REPORT Ponssentie 22, 74200 Vieremä FINLAND Tel. +358 20 768 800 | Fax +358 20 768 8690 www.ponsse.com A logger’s best friend ANNUAL REPORT www.ponsse.com PONSSE IN BRIEF Ponsse Plc is a company specialising in the sales, manufacture, servicing and technology of cut-to-length method forest machines and is driven by genuine interest in its customers and their business. Ponsse develops and manufactures sustainable and innovative harvesting solutions based on customers’ needs. The company was established by forest machine entrepreneur Einari Vidgrén in 1970, and it has been a leader in timber harvesting solutions based on the cut-to-length method ever since. With experience from over 14,000 cut-to-length forest machines, this family-owned company is today one of the world’s leading manufac- turers of forest machines. The sales and service network covers 40 countries and the share of exports is 78 per cent of net sales. Ponsse is headquartered in Vieremä, Finland. The company’s shares are quoted on the NASDAQ OMX Nordic List. NET SALES, M€ EMPLOYEES SHARE OF EXPORTS, % 612 1,635 78 2 PONSSE ANNUAL REPORT 2018 CONTENTS 2 Ponsse in brief 6 Mission, vision and values 8 Review by the Chairman of the Board and the President and CEO 10 Market review 12 Events in 2018 14 The most advanced forest machine factory in the world 16 Product family for responsible logging 20 First-rate servicing – the key to profitable machine operation 22 Board of Directors 24 Management team 25 Area directors and subsidiary managing directors CORPORATE SOCIAL RESPONSIBILITY 28 Corporate social responsibility (CSR) at Ponsse 33 Social responsibility 38 Environmental responsibility 41 Economic responsibility FINANCIAL STATEMENTS 49 Contents of financial statements PONSSE ANNUAL REPORT 2018 3 PONSSE IN 2018 In 2018, all Ponsse’s business areas continued to grow. New machine sales showed excellent development and our service and used machine businesses grew. We also launched a record number of new products. Our biggest project was the major expansion of the Vieremä factory. Continuous renewal of operations and products is the foundation of all our operations. 4 PONSSE ANNUAL REPORT 2018 PONSSE ANNUAL REPORT 2018 5 MISSION—–—– We will succeed together with our customers and partners through innovative harvesting solutions based on sustainable development. Ponsse ensures a high-quality customer service by focusing on harvesting solutions based on the cut-to-length method. It seeks solutions openly and innovatively together with its customers, while continuously reaching for something new and better. There can be no compromises over the high level of quality and reliability of products and services, under any circumstances. —–—–VISION We are the preferred partner in our industry. We are continuously and at an ever higher intensity working hard to develop Ponsse in order to become the leader in the field of forest machines based on the cut-to- length method. Continuous development and advancement are what make Ponsse the most desirable partner in its field. That is why Ponsse’s products and services are selected again and again, from one generation to the next. 6 PONSSE ANNUAL REPORT 2018 VALUES—–—– Determinedly on the way paved by Einari Vidgrén, the company’s founder, since 1970. CUSTOMER ORIENTATION • Assuming responsibility • A genuine interest towards the customer • Friendliness and fair play • Knowing the customer’s business • Listening to personnel and good communication • Availability and rapid response times • Helping co-workers and taking others into consideration • A readiness to serve and support the customer • Flat organisation “As we’re all part of the same company, everyone can call me Einari.” “Practice is the best teacher. And the best special- ists are machine operators. It is worthwhile pay- During decades, Ponsse and its employees have built their own ing close attention to what they say and to keep unique culture and spirit, following Einari’s ideas. The Ponsse their words well in mind.”(Einari Vidgrén, 1943–2010) spirit signifies friendliness and fair play. Ponsse serves its customers reliably and works hard without being overly serious. ”Every Ponsse employee is entrepreneurial and willing to Ponsse is driven by genuine interest in customers and their business operations. Ponsse knows its customers person- succeed. Everyone assumes and bears responsibility for the ” success of the company. That is why Ponsse makes no com- ally, allowing it to identify their needs. The flat organisational structure ensures that decision-makers are located close to promises over achieving its goals. Therefore, Ponsse employ- customers. ees have the capacity to make decisions and are humble and tenacious when it comes to work. INTEGRITY • Ethical operations and high morals INNOVATION • Reliability • Continuous improvement of products, services • Keeping our promises and processes • Openness • Initiative and broad-mindedness • Chance for change “If you want to succeed in this business, you need to Einari’s definition of the very first PONSSE harvester have honest and trustworthy relationships in both head in 1986: directions. Dishonesty takes you nowhere.” “Let’s make it ourselves!” It must grapple a tree like a bear, Ponsse’s operations are based on honesty, ethics and high and the log must pass through with a good speed.” morals. Ponsse is reliable, as are its employees. Ponsse keeps its promises, and does not give any empty promises to Ponsse is continuously improving its products, services and ”its customers, stakeholders or colleagues. The customer is processes. There must be initiative and broad-mindedness in never left alone. All activities are characterised by openness. R&D. This secures the company’s competitiveness. Ponsse employees are broad-minded and believe in what PONSSE SPIRIT ”they do. The search for new ideas is not limited to the company’s business field only but, regardless of the business area, • Constructive humility and a tenacious work ethic Ponsse wants to actively learn from the best operators and • Entrepreneurship and the will to succeed apply what it has learned to its industry. That is why Ponsse • Decision-making capacity sees that changes offer opportunities for development and • Refusing to compromise in achieving goals advancement. PONSSE ANNUAL REPORT 2018 7 REVIEW BY THE CHAIRMAN OF THE BOARD AND THE PRESIDENT AND CEO We are a value-oriented company with a clear focus on the future. The values based on our history – customer orientation, integrity, innovativeness and the Ponsse spirit – are genuinely important to us at Ponsse, and they illustrate our day-to-day operations. At the same time, we are continuously investing in the sustainable development of functions that take the ”natural environment, our personnel and the economic environment into account. 8 PONSSE ANNUAL REPORT 2018 he year 2018 will go down in the company’s history as The outcome of this bold investment project was exemplary. a very busy period due to high demand, major factory The adoption of an entirely new storage system proceeded Tinvestment and challenges in the availability of compo- as planned, and its automation system quickly reached stable nents. Ponsse had an excellent year: profitability reached 10 operations technologically as well as in the area of operator percent, and cash flow was at EUR 61 million. We were able to competence. Commissioning of the new assembly facilities continue on a growing path even with the commissioning of the took place after the summer holiday season and was success- Vieremä manufacturing facilities, which limited our production ful even beyond expectations despite the extensive scope of capacity. We manufactured nearly as many PONSSE forest changes required. Challenges in the availability of components machines as in our record year in 2017. and the instability caused by the new production system did not The forest machine industry is cyclical, and has seen strong prevent us from achieving normal production schedule by the growth since 2013. The positive changes that have taken end of the year. Under these conditions, the successful commis- place in the forest industry have also reflected on Ponsse’s sioning of the factory was of primary importance and proved operations. At the same time, we have carried out intensive our personnel’s extremely high competence, commitment and renewal projects and been able to challenge the markets ability. Once more, I wish to extend my warmest gratitude to all through the development of operations and products. The our employees. overall forest machine market continued to grow in 2018. The Our investments in technology and product development Russian market continued on a positive trend and retained its have increased annually. Rapid technological development and position as the world’s largest market area for cut-to-length digitalisation, in particular, open up new opportunities in the (CTL) forest machines. Sweden remained the second largest development of products and new services. We continue to do market for environmentally friendly CTL machines, with Finland our part to ensure that sustainable logging solutions and the re- close behind. Demand was high from the beginning of the year lated technology keep moving forward and producing additional and accelerated significantly in the second half of the year. The value for our customers. market situation remained good throughout the year in nearly We are a value-oriented company with a clear focus on the all of our market areas. future. The values based on our history – customer orientation, Since 2010, we have invested around EUR 100 million integrity, innovativeness and the Ponsse spirit – are genuinely in product development and around EUR 186 million in fixed important to us at Ponsse, and they illustrate our day-to-day assets. The continuous development of the company’s opera- operations. At the same time, we are continuously investing in tions is essential for us.

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