Annual Report 2020 ANNUAL REPORT 2020 ANNUAL REVIEW Content BUSINESS UNITS PATRIA'S CORPORATE ANNUAL REVIEW 40 PATRIA’S CORPORATE RESPONSIBILITY FINANCIAL RESPONSIBILITY 3 Patria in brief 44 Year 2020 75 Board of Directors’ Report PATRIA AS PART OF SOCIETY 4 Our values 45 Responsibility programme and objectives Consolidated Financial Statements (IFRS) A RESPONSIBLE EMPLOYER 5 Patria 100 years 47 Stakeholder collaboration 79 Consolidated balance sheet ENVIRONMENTAL RESPONSIBILITY 6 Year 2020 80 Consolidated income statement 52 PATRIA AS PART OF SOCIETY 7 Key figures 81 Consolidated cash flow statement GRI INDEX 53 Responsible exports 8 Review by the President and CEO 82 Consolidated Statement of Changes in Equity FINANCIAL 54 Ethical conduct 11 Operating environment 83 Notes to the Consolidated Financial Statements 56 Developing supply chains GOVERNANCE 13 Strategy Financial Statements of the Parent company (FAS) 57 Security of operations 14 Digitalisation 101 Balance Sheet, Parent company 59 Financial responsibility and tax footprint 102 Income Statement, Parent company 16 BUSINESS UNITS 60 A RESPONSIBLE EMPLOYER 102 Cash Flow Statement, Parent company 17 Aviation 103 Notes to the Financial Statements, Parent company 20 Systems 65 ENVIRONMENTAL RESPONSIBILITY 23 International Support Partnerships GOVERNANCE 72 GRI INDEX 26 Land 110 Corporate governance 29 Aerostructures 113 Industrial participation 32 Millog 114 Risk Management 36 Nammo 116 Board of Directors 117 Consultative Committee 118 Group Management Team PATRIA ANNUAL REPORT 2020 | 2 ANNUAL REPORT 2020 Business units and net sales as share of group net sales ANNUAL REVIEW Patria PATRIA IN BRIEF OUR VALUES 17% Aviation 3% Aerostructures provides life cycle support services for aircraft and helicopters, Designs and manufactures demanding aerospace composite PATRIA 100 YEARS in brief covering maintenance, repair and modification of fuselages, structures and is actively involved in the development YEAR 2020 engines and equipment as well as pilot training. programmes of the new composite technologies. The core KEY FIGURES Patria is an international provider of defence, competences are the design of composite structures and efficient manufacturing processes. REVIEW BY THE PRESIDENT AND CEO security and aviation life cycle support services, OPERATING ENVIRONMENT pilot training and technology solutions. Patria 16% Systems STRATEGY provides its aerospace and military customers with delivers comprehensive systems and equipment to defence forces DIGITALISATION equipment availability, continuous performance and other security authorities. Its areas of special expertise are 43% Millog development as well as selected intelligence, reconnaissance, surveillance and command systems, as well as Provides defence materiel life cycle support services to its BUSINESS UNITS their integration and life cycle support. strategic partner, the Finnish Defence Forces and to other surveillance and management system products security-critical actors. Patria owns 61.8% of Millog. PATRIA’S CORPORATE and services. Patria’s mission is to give its RESPONSIBILITY customers confidence in all conditions, and the Nammo vision is to be the #1 partner for critical operations 15% International Focuses on developing and producing ammunition and missile PATRIA AS PART OF SOCIETY products, as well as environmentally sound demilitarization on land, sea and air. Patria has several locations Support Partnerships services. Nammo is equally owned by Patria and the State of provides life cycle support services for aircraft and helicopters A RESPONSIBLE EMPLOYER including Finland, Sweden, Norway, Belgium, Norway. internationally. The business unit’s core functions are Estonia and Spain. Patria employs approximately ENVIRONMENTAL RESPONSIBILITY maintenance and overhaul, modifications, spare parts and 3,000 professionals. Patria is owned by the State technical support. GRI INDEX of Finland (50.1%) and Norwegian Kongsberg Defence & Aerospace AS (49.9%). Patria owns FINANCIAL 50% of Norwegian Nammo, and together these Land three companies form a leading Nordic defence 7% GOVERNANCE The key products and services include cutting-edge armoured partnership. wheeled vehicles, mortar systems and related life cycle support services. Patria AMV product family and Patria Nemo mortar system are the highest-profile products in this range. www.patriagroup.com PATRIA ANNUAL REPORT 2020 | 3 ANNUAL REPORT 2020 ANNUAL REVIEW PATRIA IN BRIEF OUR VALUES PATRIA 100 YEARS Mission: YEAR 2020 We are proud of our WE GIVE OUR KEY FIGURES WE WANT work, and we want to CUSTOMERS CONFIDENCE REVIEW BY THE PRESIDENT AND CEO TO SUCCEED show it. IN ALL CONDITIONS. OPERATING ENVIRONMENT STRATEGY DIGITALISATION Customer promise: BUSINESS UNITS WHEN IF IS NOT AN OPTION. PATRIA’S CORPORATE OUR OPERATIONS Cooperation guarantees RESPONSIBILITY the success of all parties. ARE CUSTOMER PATRIA AS PART OF SOCIETY ORIENTED Employer promise: A RESPONSIBLE EMPLOYER YOU MAKE THE ENVIRONMENTAL RESPONSIBILITY DIFFERENCE. GRI INDEX OUR VALUES OUR We give constructing FINANCIAL TOGETHER WE Vision: feedback. We enjoy GOVERNANCE THE #1 PARTNER CREATE SUCCESS succeeding together. FOR CRITICAL OPERATIONS. PATRIA ANNUAL REPORT 2020 | 4 ANNUAL REPORT 2020 Patria 100 ANNUAL REVIEW PATRIA IN BRIEF OUR VALUES PATRIA 100 YEARS YEAR 2020 KEY FIGURES REVIEW BY THE PRESIDENT AND CEO OPERATING ENVIRONMENT The Finnish Air Force Aircraft STRATEGY Factory is established at 1924–1927 1959 The Finnish aviation industry Suomenlinna under the command Mortar production Yhteissisu Oy is enters the jet engine era with DIGITALISATION The first results of Finnish The 122 K/60, the begins at Tampella. the Fouga Magister. of Major Arne Somersalo. aircraft design, the test fighters established. first field gun fully BUSINESS UNITS I.V.L.C24, I.V.L.C25, Haukka and developed in Finland, 1921 Kurki are completed. 1932 1943 is completed. 1960 PATRIA’S CORPORATE RESPONSIBILITY PATRIA AS PART OF SOCIETY 1997 2016 2020 -luvulla 1965 1980 1996 Vammas Oy, Lapua Oy, 2004 The State of A contract was signed with A RESPONSIBLE EMPLOYER The first Proto-Sisus The serial production of the The first single- Sisu Defence Oy, The serial production of the Finland sells Saab, selected as the combat are handed over to Pasi XA-180 and Nasu NA-140 seat Hornet F-18C Vihtavuori Oy and Patria AMV begins. Patria 49.9% of Patria system contractor for the ENVIRONMENTAL RESPONSIBILITY the Finnish Defence begins. is completed on the Finavitec Oy are merged AMV 8x8 vehicles are sold to to Kongsberg Squadron 2020 project, for the Forces. Patria starts production line. and the current Patria is Poland and Sweden, among Defence & delivery of an anti-submarine GRI INDEX the manufacturing of established. others. Aerospace AS. warfare sonar system for military vehicles. Pohjanmaa class vessels. FINANCIAL GOVERNANCE PATRIA ANNUAL REPORT 2020 | 5 ANNUAL REPORT 2020 Year 2020 ANNUAL REVIEW PATRIA IN BRIEF FEBRUARY MARCH MAY Patria prepared to operate in OUR VALUES Patria and SIA Unitruck Patria and the U.S. Army entered into established a joint venture in exceptional conditions due to agreement for a feasibility study of Patria PATRIA 100 YEARS Latvia. corona pandemic. Nemo mortar system. YEAR 2020 KEY FIGURES REVIEW BY THE PRESIDENT AND CEO OPERATING ENVIRONMENT JANUARY APRIL Patria’s 6x6 platform was selected as part of a joint Milrem LCM is now Milworks, an Estonian STRATEGY Finnish-Latvian vehicle development programme. based company focused on the maintenance, DIGITALISATION Patria will supply the Squadron 2020 project with a repair and overhaul of defence materiel and is a trusted partner for the Estonian Defence Sonac DTS sonar system for detecting submarines. JUNE BUSINESS UNITS Forces. Patria delivered AMV 8x8 System Platform PATRIA’S CORPORATE JULY vehicle to Saab for RESPONSIBILITY AUGUST Demonstration of the remote-controlled Patria joined AeroSpace and Defence Association Patria AMV 8x8 vehicle in cooperation with test purposes. PATRIA AS PART OF SOCIETY of Europe (ASD) as a Company Member. the University of Tampere. A RESPONSIBLE EMPLOYER ENVIRONMENTAL RESPONSIBILITY GRI INDEX SEPTEMBER Millog was preparing FINANCIAL the purchase of the entire share capital GOVERNANCE of Oy Western Shipyard Ltd, which was announced on 1 OCTOBER NOVEMBER DECEMBER October 2020. Finland, Latvia and Patria signed a Patria and SIA EMJ Metāls signed The Finnish Defence Forces’ Logistics R&D agreement on developing a joint a contract for vehicle parts Command was authorized to sign an armoured vehicle system. manufacturing in Latvia. updated Strategic Partnership Agreement with Millog. PATRIA ANNUAL REPORT 2020 | 6 ANNUAL REPORT 2020 Key figures ANNUAL REVIEW PATRIA IN BRIEF 1 / Avainluvut 2 / Avainluvut 3 / Avainluvut OUR VALUES Net sales, EUR million Operating profit,EUR million Gross investments in fixed assets,EUR million PATRIA 100 YEARS YEAR 2020 534.1 MEUR 534.1 74.6 15.1 KEY FIGURES 507.5 NET SALES 489.9 467.2 476.1 12.6 REVIEW BY THE PRESIDENT AND CEO 12.1 OPERATING ENVIRONMENT MEUR STRATEGY 40.3 40.3 35.9 7.3 DIGITALISATION OPERATING PROFIT 34.6 6.8 BUSINESS UNITS 2,973 7.8 PATRIA’S CORPORATE PERSONNEL 16 17 18 19 20 16 17 18 19 20 16 17 18 19 20 RESPONSIBILITY 4 / Avainluvut 5 / Avainluvut 6 / Avainluvut 7 / Avainluvut PATRIA AS PART OF SOCIETY Personnel, end of period (FTE) Order stock, EUR million Equity ratio, % Net sales outside Finland, % A RESPONSIBLE EMPLOYER 3,055 2,973 1,508.2 58.3 ENVIRONMENTAL RESPONSIBILITY 2,765 2,792 2,815 53.7 54.4 GRI INDEX 39.1 38.8 857.7 FINANCIAL 691.4 687.1 649.2 41 33 GOVERNANCE 27 26 25 16 17 18 19 20 16 17 18 19 20 16 17 18 19 20 16 17 18 19 20 As of 2018 figure personnel, end of period PATRIA ANNUAL REPORT 2020 | 7 ANNUAL REPORT 2020 ANNUAL REVIEW PATRIA IN BRIEF OUR VALUES PRESIDENT AND CEO’S REVIEW PATRIA 100 YEARS YEAR 2020 KEY FIGURES Developing partnerships REVIEW BY THE PRESIDENT AND CEO OPERATING ENVIRONMENT and paving the way for STRATEGY DIGITALISATION future growth BUSINESS UNITS PATRIA’S CORPORATE RESPONSIBILITY For Patria, 2020 was a year of strong put to the test by the COVID-19 pandemic.