Nammo Annual Report 2008 10 Year Anniversary C6bbd &%N:6G6Cc>K:Gh6gn

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Nammo Annual Report 2008 10 Year Anniversary C6bbd &%N:6G6Cc>K:Gh6gn NAMMO ANNUAL REPORT 2008 10 YEAR ANNIVERSARY C6BBD &%N:6G6CC>K:GH6GN 8ZaZWgVi^dcY^ccZg^c <_©k^`Danbe^X8VkZgc=Vaa# -%%ZbeadnZZh[gdbVaa i]ZCVbbdH^iZhlZgZ \Vi]ZgZY# CVbbdBVcV\ZbZciid\Zi]Zgl^i]\jZhihdcWdVgY i]ZeVYYaZhiZVbZg»H`^WaVYcZg¼dci]ZAV`ZB_©hV# Dc6j\jhi'.i]'%%-CVbbdXZaZWgViZY^ihiZci]Vcc^kZghVgn \jZhihlZgZ^ck^iZYWnBVcV\ZbZciidVig^edci]ZAV`ZB_³hV 6aak^h^idgh]VYV\j^YZY h^cXZ^ih[dgbVi^dc^c&..-#I]ZXZaZWgVi^dcidd`eaVXZVi l^i]i]ZdkZg&*%nZVgdaYeVYYaZhiZVbZgH`^WaVYcZg#I]Z idjgVii]ZCVbbdGVj[dhh CVbbdÉh=ZVYfjVgiZg!GVj[dhh#-%%CVbbdZbeadnZZh[gdb lZVi]ZglVhZmXZei^dcVaanc^XZYjg^c\i]Zl]daZYVnVcY [VX^a^inVhlZaaVhVegdYjXi YZbdchigVi^dcVii]ZIZhi Vaah^mCVbbdXdjcig^ZhlZgZegZhZci# ]ZaeZYbV`Zi]ZZkZciV\gZVihjXXZhh GVc\Z# I]ZVcc^kZghVgnhiVgiZYl^i]VegZhZciVi^dcd[i]ZCVbbd I]ZXZaZWgVi^dcgZVX]ZY^iheZV`l]Zc-%%\jZhihZciZgZYi]Z GVj[dhh[VX^a^inVii]ZGVj[dhh8^in=Vaa#I]ZgZV[iZgi]Z <_³k^`Danbe^XBdjciV^c=Vaa^ci]ZZkZc^c\[dgVkZgnc^XZ \jZhihlZgZ\^kZcVlZaadg\Vc^oZY\j^YZYidjgi]Vi^cXajYZY Y^ccZg#6WgZVi]iV`^c\ZciZgiV^cbZcigdjcYZYi]ZXZaZWgVi^dc ZciZgiV^cbZcid[i]ZCVbbdGVj[dhh[VX^a^inl]ZgZegdYjXih d[[l^i]YVcX^c\lVn^cidi]Zc^\]i# VcYegdYjXi^dcegdXZhhZhlZgZegZhZciZY#I]Z\j^YZYidjg Vahd^cXajYZYVk^h^iVii]ZIZhi8ZciZgXadhZidGVj[dhhl]ZgZ LZYd]deZlZXVcgZa^kZVcdi]ZgYVna^`Zi]^h[dgCVbbdÉh'% Vc»DeZcV^g¼ajcX]lVhhZgkZY#ÄHdbZiZhi^c\d[djgbdhi NZVg6cc^kZghVgn `cdlcegdYjXih!VcYVh]ddi^c\XdbeZi^i^dcWZilZZci]ZÒkZ CVbbd9^k^h^dchlVhdci]ZV\ZcYV# I]ZCVbbdDlcZghVcYi]Z7dVgYid\Zi]Zgl^i]VYY^i^dcVa I]Vc`ndj MMMCXXX CCCXC THE TURN OVER REACHED 3130 MNOK XIITHE RETURN ON SALES WAS 12% IN 2008 DLXIX NAMMO ANNUAL REPORT 2008 569 WOMEN WORK IN THE NAMMO GROUP (31,2%) VNAMMO IS DIVIDED INTO FIVE DIVISIONS DCCXI XCVII MCXLVII THE NUMBER OF BLUE- COLLAR IS 1147 CLXXIX 10 YEAR ANNIVERSARY LAPUA GMBH, 179 YEARS OLD, IS THE OLDEST COMPANY IN THE NAMMO GROUP MC DCLXXIXTHE NUMBER OF WHITE- COLLAR IS 679 XVIIINAMMO HAS 18 PRODUCTION FACILITIES MMVII MDCCCXXVI THE NUMBER OF EMPLOYEES IV THE LEVEL OF SICKNESS AT YEAR END WAS 1826 ABSENCE WAS 4%, BEST RESULT EVER! IT IS 10 YEARS SINCE NAMMO III XWAS ESTABLISHED CONTENTS PEOPLE “If you are planning for one year, grow rice. If you are planning for 20 years grow trees. If you are planning for centuries, grow people“ Chinese Proverb LOOKING BACK AT 1998-2008 4 CEO REFLECTIONS 6 PEOPLE are Nammo’s most valuable asset. HIGHLIGHTS 2008 8 NAMMO IN BRIEF 10 KEY FIGURES NAMMO GROUP 11 HUMAN RESOURCES 12 FINANCE 14 DIRECTORS’ REPORT 2008 16 PRECISION DIRECTORS PRESENTATION 22 NAMMO GROUP 26 “Fast is fine, but Precision is everything“ INCOME STATEMENT 27 Wyatt Earp BALANCE SHEET 28 CASH FLOW 30 GENERAL PRINCIPLES 31 PRECISION is the key word at all levels of Nammo’s operations. NOTES TO THE ACCOUNTS 32 NAMMO AS 38 INCOME STATEMENT 39 BALANCE SHEET 40 CASH FLOW 42 GENERAL PRINCIPLES 43 TECHNOLOGY NOTES TO THE ACCOUNTS 44 AUDITORS REPORT 48 “Once a new technology rolls over you, if you’re not a part of the steamroller, you’re part of the road“ GROUP MANAGEMENT PRESENTATION 50 CORPORATE GOVERNANCE 52 Stewart Brand SMALL CALIBER DIVISION 53 MEDIUM & LARGE CALIBER DIVISION 54 TECHNOLOGY at an advanced level is Nammo’s driving force. NAMMO TALLEY 55 MISSILE PRODUCTS DIVISION 56 We always seek to be on the cutting edge. DEMIL DIVISION 57 CORPORATE SOCIAL RESPONSIBILITY 58 DEMILITARIZATION 60 RETROSPECTIVE ON HESS 62 R&D,10 YEARS AND INTO THE FUTURE 64 ACQUISITIONS IN 2008 66 OWNERSHIP STRUCTURE 67 COMPANY ORGANIZATIONAL STRUCTURE 68 ADDRESSES 70 LAWS & REGULATIONS 72 IMPORTANT NOTICE: If there are any diverging information between the English translation of Nammo’s Annual Report and the Norwegian edition, the Norwegian edition will be the pre-vailing and legal version. III (3) LOOKING BACK AT 1998-2008 3000 500 Sales 2500 400 Net Income Before Tax Before Net Income 2000 300 Employees 1500 200 1000 100 500 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2006 Merger of the Medium & Large Caliber Divisions. 1998 Nammo Raufoss Test 2007 07/98: Start of Nammo 2000 Center receives its first Acquisition of DN Press fiscal year. Demonstrations and strike 2003 2005 qualification as NATO Test Tec – 60% ownership and at Raufoss against the Nammo enters the Polish Contract signed with Diehl Center for 7.62mm, 12.7mm renamed ND PressTec 10/98: Official merger of 1999 planned move of the small defense market. BGT Defence for IRIS-T and 30mm ammunition. GmbH. the ammunition activity Buck GmbH was acquired caliber production line to 2001 Series Production. by Raufoss ASA (45%), and became 100% part Sweden and Finland in 2002 Multiproduct contract – Changes in ownership; Acquisition of Talley Celsius AB (27,5%), Patria of Nammo AS and was January and February – Official MoU signed Saab AB acquires Celsius STALVA – signed with Vihtavuori starts the new Saab AB sells their shares Defense Systems Inc. Industries Oyj (27,5%). renamed Nammo Buck The final decision was between the three Nordic AB in March. Finnish Defence Forces. production line for Charges to Patria Oyj and the – 100% ownership, renamed GmbH. postponed until March. Governments for cross in June. Norwegian State represent- Nammo Talley Inc. and 3 Legal Subsidiaries boarder cooperation within Reorganization and ed by the Ministry of Trade organized as the 5th were formed Nammo acquires NAD New President & CEO was ammunition products. establishment of the Demil Acquisition of Nammo and Industry, who now own Nammo Division. (Nammo Raufoss AS, at Løkken Verk, Norway – 2008 appointed in April. Division and Large Caliber 2004 Bakelittfabrikken AS. 50% of the shares each. Nammo Sweden AB, 33% ownership and Decision was made Division. Seven-year NAMSA Launch of Lapua X-ACT Nammo Lapua Oy). renamed Nammo NAD AS. Raufoss ASA sold their to move Hansson SK Jagd und Sportmunition Small Caliber break- Funding received from contract for demilitari- premium ammunition. Later ownership has been 45% shares to the PyroTech from Göteborg Launch of new Dim Tracer celebrates its 175 year through in the US for the Norwegian MoD zation of MLRS. 5 Divisions were estab- increased to 50%. Norwegian Ministry of to Lindesberg. Cartridge. Anniversary and is Military Special for development of new Acquisition of lished (Small Caliber, Trade and Industry in June. renamed Laupa GmbH. Ammunition. aircraft ammunition. Acquisition on M72 Microtechnologie Medium Caliber, Revision PB Nammo Demil LLC Acquisition of the Full scale serial production Launcher Business at Hérémence (MTH), Demilitarization & was formed – A five year Intensified work to property and the Nammo of the multinational Opening of Lapua .22 Rocket Motor contract Torino Olympics; 18 out of Norris Industries in Switzerland – 100% Pyrotechnics, Propulsion, contract was signed with strengthen Nammo’s Raufoss Test Center at program Evolved Sea Service Center in with MBDA for Exocet 24 biathlon medals won with December – integrated ownership and renamed Components). the US Government. technological platform. Bradalsmyra. Sparrow Missile (ESSM). Schönebeck, Germany. Block 3 Missile. Nammo Lapua cartrige. into Nammo Talley Inc. Nammo MTH SA. FACTS ABOUT US • Health Environment Safety & Security has highest priority • A niche producer of small and medium caliber ammunition products • A unique competence within engineering, analysis and manufacturing of high performance missile propulsion systems including thrust vector control • A world-leader within environmental friendly demilitarization • An industry leader in the development and production of direct-fire, V (5) shoulder launched weapon systems CEO SO WHAT HAVE WE ACHIEVED REFLECTIONS IN THOSE TEN YEARS? In 2008 Nammo celebrated its tenth anniversary since its • We have learned to better recognize Through organic growth and acquisiti- formation in 1998. It is with great satisfaction I can conclude and take into account the cultural ons, Nammo has developed a balanced that these have been ten successful years, last year in particular. differences between the countries we presence with approximately 1/3 of sales I would also like to congratulate all our employees, who can be operate in. At the same time, we have in the Nordic countries, Europe and the proud of their contribution to the successful development of also become better at working toget- US, respectively, and a small but important her across borders and building presence in the Far East. As we look forward the company. teams that focus on our business to Nammo’s further development, I am from an overall Nammo perspective. confident we have developed a company During these ten years, Nammo has gradually developed from a company aspiring to • We have also become more customer with an excellent technological platform be recognized as the Nordic supplier of ammunition, missile products and related focused to better understand the and a solid market position. That, along services, to an internationally recognized supplier with around 70 percent of customers’ needs in order to provide quality, with highly competent people, makes a sales to customers outside the Nordic region. This has changed the corporate high performance and specialty products strong competitive platform. Although the development perspective, although our Nordic customers remain vital and customized to their requirements. world has been hit by the biggest financial very important to Nammo's further development. • We have increasingly recognized the crisis and recession in a long time, we still need for local presence in a global expect 2009 to be a good year for Nammo. market through various partnerships In the longer run we are also facing uncer- and actual presence in key countries. tainty along with the economy in general. • We have learned to gradually make the However, the best way to deal with an necessary organizational adjustments uncertain future is to maintain and utilize in time to accommodate the develop- what we have learned these years: coope- ment of the market and maintain an rate and build teams across borders, be efficient and competitive organization.
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