State Shareholdings in Finland 2005 16449_KTM PMS 418 PMS 547 16449_KTM PMS 418 PMS 547 State Shareholdings in Finland 2005 Review by the Minister of Trade and Industry 2 State-owned Companies and Associated Companies 3 Value and Yield of State Shareholdings 2001–2005 4 Publicly Quoted State-owned Companies Finnair Oyj 10 Fortum Corporation 12 Neste Oil Corporation 14 Other State-owned Companies Alko Inc 18 Altia Corporation 19 Kapiteeli Plc 20 Kemijoki Oy 21 Patria Plc 22 Finland Post Corporation 23 Vapo Oy 24 VR-Group Ltd 25 Associated Companies Kemira Oyj 28 Kemira GrowHow Oyj 29 Metso Corporation 30 Outokumpu Oyj 31 Rautaruukki Corporation 32 Sampo plc 33 Sponda Plc 34 Stora Enso Oyj 35 TeliaSonera AB 36 Appendix Major State-owned Companies and Associated Companies 38 Publisher Ministry of Trade and Industry, Helsinki 2006 Editing and Graphic Design E. Heikkinen Printed in Finland by Kirjapaino Markprint Oy Key figures refer to each company’s Annual Report. We do not guarantee the accuracy of the company-specific data presented in this publication. To order this publication, please refer to our contact information on page 40. Review by the Minister of Trade and Industry According to preliminary estimates, total pro- dividends) of the State’s portfolio of listed under the Prime Minister’s office. The prepara- duction volume increased by 2.1 per cent in shares by a remarkable 38 per cent. Factors tion of administrative measures required for 2005. Factors maintaining growth includ- contributing to this high yield included both such centralisation is underway. ed household consumption and residential favourable market trends and the robust com- Although ownership steering will trans- investments, whereas the expected revival petitiveness and excellent performance of the fer to the Prime Minister’s office, this func- of investment in production failed to mate- companies involved. tion is not within the Prime Minister’s area rialise. Counterbalancing the brisk increase in The State also aims to gain high dividends of responsibility on government level. It is exports, imports increased markedly, while from its investments, The goal is that the intended that the next Government will employment levels grew throughout the year. companies pay, on the basis of their finan- appoint a minister responsible for this from The annual rise in consumer prices averaged cial results, dividends roughly on a par with among its ranks, whose mandate will not 0.9 per cent. other companies in the same sector, whilst include any responsibilities for regulations The rise in share prices intensified in 2005, keeping variations in annual dividends mod- involving conflicts with ownership steering. with the OMXH price index rising by 31.1 per erate. Due to the good results enjoyed by In future, ownership steering will be clearly cent. Share prices for several state owned and state-owned and associated companies for separate from legislative and other regulatory associated companies increased by more than 2005, the State’s dividend yield rose to a duties related to business operations. this, for instance Rautaruukki booming by 135 record high, totalling EUR 1.3 billion. Publicly Centralisation of the state’s ownership percent, Finnair by 115 per cent and Metso quoted companies paid out the majority of steering has been under planning for several by 98 per cent. dividends. terms of government, resulting in the first The Government continued its policy of At the end of the year, the Government’s tangible measures in the summer of 2004, broadening the ownership base of state- Cabinet Committee on Economic Policy when Prime Minister Vanhanen’s Cabinet set owned and associated companies, based on approved a statement on the centralisation up an official working group, the management company-specific decisions to sell shares in of the State’s ownership steering. Ownership group for ownership steering, to coordinate accordance with the authority granted by steering of companies operating on mar- ownership steering projects between various Parliament. In 2005, the Government sold ket terms, currently distributed between five ministries. Once the ownership steering unit shares in Sampo, Fortum and Kemira for an ministries, will be centralised in a new State’s becomes operative next year, we will transfer aggregate value of EUR 1.3 billion. Regard- corporate ownership steering unit. In addition, to more uniform State ownership steering on less of shares sold, the value of the State’s activities related to the preparation of state a permanent basis. portfolio of listed shares increased from EUR ownership policy will be transferred to the new 15.0 billion at the end of 2004 to EUR 19.4 unit. Ownership steering of companies with Minister of Trade and Industry billion at the end of 2005. This outstanding special tasks will remain with six ministries. Mauri Pekkarinen increase in value of over 29 per cent increased Operative as of 1 May 2007, the new cor- May 2006 the total value (market value, shares sold and porate ownership steering unit will be placed 2 State-owned Companies and Associated Companies The State has major shareholdings in over 50 In January 2006, the Cabinet Commit- Key Figures companies (cf. the Annex on page 38). These tee on Economic Policy adopted a stand on Net sales for the 11 state-owned compa- include 29 state-owned companies, in which increasing the amount of information on nies presented in this publication totalled the State is the major shareholder, while oth- rewarding publicised by state-owned and EUR 20.8 billion in 2005 (EUR 15.8 billion ers are associated companies, in which the associated companies. More company-spe- in 2004). The companies’ profit after finan- State is a significant minor shareholder. 13 cific information will be made public than cial items amounted to EUR 2.6 billion (EUR companies are listed on the Main List and one previously, centralised on the website of the 1.9 billion). Average equity ratio was 51 per on the I List of the Helsinki Stock Exchange. Ministry of Trade and Industry. cent, having been 48 per cent in the previous In publicly listed companies, the value of the Following its stand on corporate reward- year. The number of clerical staff and other State’s holdings totalled EUR 19.4 billion at ing policies, adopted by the Cabinet Commit- employees came to 67,100, i.e. a little higher the end of 2005, with the highest sharehold- tee on Economic Policy in February 2004, the than the year before. ing by value being in Fortum Corporation, at State has not approved the introduction of Net sales for the associated compa- EUR 7.1 billion. any new option schemes in companies within nies presented herein, excluding Sampo plc, Administration of the State’s corporate its sphere of influence. The autumn of 2005 totalled EUR 39.2 billion (EUR 36.7 billion in assets is divided between eight ministries. The saw extensive debates in Parliament and the 2004). The companies’ profit after financial management group for ownership steering, media on the reasonableness of Fortum Cor- items was EUR 2.8 billion (EUR 3.7 billion). comprising leading ownership steering offi- poration’s management option schemes, due Staff totalled 129,800, slightly higher than cials from the Ministry of Trade and Industry, to which the Cabinet Committee intends to the previous year. the Ministry of Finance and the Ministry of further specify its stance on rewarding during Transport and Communications, is responsible the spring of 2006. for ensuring that the preparation and imple- The State’s dividend yield mentation of ownership steering measures is Based on the results of the previous finan- uniform throughout the public administra- Strategic arrangements cial year, all state-owned companies and the tion. The Ministry of Trade and Industry is in State’s associated companies paid a dividend charge of the development and general steer- related to ownership to the State for over EUR 739 million in 2005 ing of State ownership policy, and prepara- steering (cf. the Figure on page 7). tion of the related statements, decisions and In February 2005, the State sold shares worth Total dividends for state-owned compa- measures. EUR 430 million in Sampo plc on the inter- nies and the State’s associated companies national and Nordic markets, decreasing the presented herein, distributed on the basis of State’s holding in the company to 13.9 per the financial results for 2005, was EUR 4,356 Ownership policy cent of Sampos’ total share portfolio. million, of which state-owned companies measures and decisions Fortum Group divested its oil business in accounted for EUR 1,406 million and listed In December 2005 the Cabinet Committee the spring, and a new company, Neste Oil associated companies for EUR 2,950 million. on Economic Policy approved a statement Corporation, was listed, the State holding 50.1 Dividends paid to the State out of the total on centralising ownership steering of state- per cent of company shares. dividend amount came to EUR 1,304 million, owned companies operating on market terms In June, the State sold Fortum Corpora- EUR 811 million accruing from state-owned at the State’s corporate ownership steering tion shares worth EUR 770 million through an and 493 million from associated companies. unit, to be established under the Prime Min- accelerated equity offering to domestic and The 2005 dividend yield from the State’s ister’s Office. This unit, whose duties also international investors, decreasing the State’s portfolio of listed shares came to 5.7 per cent, comprise general preparation and coordina- holding from 58.9 to 51.7 per cent. clearly exceeding the average for companies tion of ownership policy, will begin operating In September, the State sold Kemira Oyj trading on the Helsinki Stock Exchange’s Main in May 2007.