ANNUAL REVIEW Annual Report 2020 ANNUAL REPORT 2020 ANNUAL REVIEW Content ANNUAL REVIEW PATRIA IN BRIEF Patria’s Annual Report consists ANNUAL REVIEW OUR VALUES of the Business Units’ Review, ANNUAL REVIEW PATRIA 100 YEARS the Corporate Responsibility ANNUAL REVIEW 3 Patria in brief YEAR 2020 Progress Report and the Financial Annual Report 2020 4 Our values KEY FIGURES Statements Report. Patria’s 5 Patria 100 years REVIEW BY THE PRESIDENT AND CEO Annual Report is published 6 Year 2020 OPERATING ENVIRONMENT on the company’s website at 7 Key figures STRATEGY www.patriagroup.com. 8 Review by the President and CEO DIGITALISATION RESPONSIBILITY Annual Report 11 Operating environment 2020 13 Strategy BUSINESS UNITS 14 Digitalisation AVIATION SYSTEMS 16 BUSINESS UNITS INTERNATIONAL SUPPORT PARTNERSHIPS FINANCIAL AND GOVERNANCE 17 Aviation LAND Annual Report 20 Systems AEROSTRUCTURES 2020 23 International Support Partnerships MILLOG 26 Land NAMMO 29 Aerostructures 32 Millog 36 Nammo PATRIA ANNUAL REPORT 2020 | 2 ANNUAL REPORT 2020 Business units and net sales as share of group net sales ANNUAL REVIEW Patria 17% Aviation 3% Aerostructures ANNUAL REVIEW in brief provides life cycle support services for aircraft and helicopters, Designs and manufactures demanding aerospace composite covering maintenance, repair and modification of fuselages, structures and is actively involved in the development PATRIA IN BRIEF engines and equipment as well as pilot training. programmes of the new composite technologies. The core OUR VALUES Patria is an international provider of defence, competences are the design of composite structures and efficient manufacturing processes. PATRIA 100 YEARS security and aviation life cycle support services, pilot training and technology solutions. Patria YEAR 2020 16% Systems provides its aerospace and military customers with delivers comprehensive systems and equipment to defence forces KEY FIGURES equipment availability, continuous performance and other security authorities. Its areas of special expertise are 43% Millog REVIEW BY THE PRESIDENT AND CEO development as well as selected intelligence, reconnaissance, surveillance and command systems, as well as Provides defence materiel life cycle support services to its their integration and life cycle support. strategic partner, the Finnish Defence Forces and to other surveillance and management system products OPERATING ENVIRONMENT security-critical actors. Patria owns 61.8% of Millog. and services. Patria’s mission is to give its STRATEGY customers confidence in all conditions, and the Nammo DIGITALISATION vision is to be the #1 partner for critical operations 15% International Focuses on developing and producing ammunition and missile 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 BUSINESS UNITS including Finland, Sweden, Norway, Belgium, Norway. internationally. The business unit’s core functions are Estonia and Spain. Patria employs approximately AVIATION maintenance and overhaul, modifications, spare parts and 3,000 professionals. Patria is owned by the State technical support. SYSTEMS of Finland (50.1%) and Norwegian Kongsberg INTERNATIONAL SUPPORT PARTNERSHIPS Defence & Aerospace AS (49.9%). Patria owns 50% of Norwegian Nammo, and together these LAND Land three companies form a leading Nordic defence 7% AEROSTRUCTURES The key products and services include cutting-edge armoured partnership. wheeled vehicles, mortar systems and related life cycle support MILLOG services. Patria AMV product family and Patria Nemo mortar system are the highest-profile products in this range. NAMMO www.patriagroup.com PATRIA ANNUAL REPORT 2020 | 3 ANNUAL REPORT 2020 ANNUAL REVIEW ANNUAL REVIEW Mission: PATRIA IN BRIEF We are proud of our WE GIVE OUR WE WANT OUR VALUES work, and we want to CUSTOMERS CONFIDENCE PATRIA 100 YEARS TO SUCCEED show it. IN ALL CONDITIONS. YEAR 2020 KEY FIGURES Customer promise: REVIEW BY THE PRESIDENT AND CEO WHEN IF IS NOT OPERATING ENVIRONMENT Cooperation guarantees AN OPTION. STRATEGY OUR OPERATIONS the success of all parties. DIGITALISATION ARE CUSTOMER ORIENTED Employer promise: BUSINESS UNITS YOU MAKE THE AVIATION DIFFERENCE. SYSTEMS OUR VALUES OUR INTERNATIONAL SUPPORT PARTNERSHIPS We give constructing TOGETHER WE Vision: LAND feedback. We enjoy THE #1 PARTNER AEROSTRUCTURES CREATE SUCCESS succeeding together. FOR CRITICAL MILLOG OPERATIONS. NAMMO PATRIA ANNUAL REPORT 2020 | 4 ANNUAL REPORT 2020 Patria 100 ANNUAL REVIEW ANNUAL REVIEW PATRIA IN BRIEF OUR VALUES PATRIA 100 YEARS The Finnish Air Force Aircraft YEAR 2020 Factory is established at 1924–1927 1959 The Finnish aviation industry Mortar production enters the jet engine era with KEY FIGURES Suomenlinna under the command The first results of Finnish Yhteissisu Oy is 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 REVIEW BY THE PRESIDENT AND CEO I.V.L.C24, I.V.L.C25, Haukka and developed in Finland, OPERATING ENVIRONMENT 1921 Kurki are completed. 1932 1943 is completed. 1960 STRATEGY DIGITALISATION 1997 2016 2020 -luvulla 1965 1980 1996 Vammas Oy, Lapua Oy, 2004 The State of A contract was signed with BUSINESS UNITS 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 AVIATION 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 SYSTEMS Forces. Patria starts production line. and the current Patria is Poland and Sweden, among Defence & delivery of an anti-submarine the manufacturing of established. others. Aerospace AS. warfare sonar system for INTERNATIONAL SUPPORT PARTNERSHIPS military vehicles. Pohjanmaa class vessels. LAND AEROSTRUCTURES MILLOG NAMMO PATRIA ANNUAL REPORT 2020 | 5 ANNUAL REPORT 2020 Year 2020 ANNUAL REVIEW FEBRUARY MARCH MAY Patria and SIA Unitruck Patria prepared to operate in Patria and the U.S. Army entered into ANNUAL REVIEW established a joint venture in exceptional conditions due to agreement for a feasibility study of Patria Latvia. corona pandemic. Nemo mortar system. PATRIA IN BRIEF OUR VALUES PATRIA 100 YEARS JANUARY APRIL YEAR 2020 Patria’s 6x6 platform was selected as part of a joint Milrem LCM is now Milworks, an Estonian Finnish-Latvian vehicle development programme. based company focused on the maintenance, KEY FIGURES Patria will supply the Squadron 2020 project with a repair and overhaul of defence materiel and is a trusted partner for the Estonian Defence REVIEW BY THE PRESIDENT AND CEO Sonac DTS sonar system for detecting submarines. JUNE Forces. Patria delivered AMV OPERATING ENVIRONMENT JULY 8x8 System Platform STRATEGY AUGUST Demonstration of the remote-controlled vehicle to Saab for test purposes. DIGITALISATION Patria joined AeroSpace and Defence Association Patria AMV 8x8 vehicle in cooperation with of Europe (ASD) as a Company Member. the University of Tampere. BUSINESS UNITS AVIATION SYSTEMS SEPTEMBER INTERNATIONAL SUPPORT PARTNERSHIPS Millog was preparing the purchase of the LAND entire share capital AEROSTRUCTURES of Oy Western Shipyard Ltd, which MILLOG 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 NAMMO 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 1 / Avainluvut 2 / Avainluvut 3 / Avainluvut ANNUAL REVIEW Net sales, EUR million Operating profit,EUR million Gross investments in fixed assets,EUR million PATRIA IN BRIEF 534.1 MEUR 534.1 74.6 15.1 OUR VALUES 507.5 NET SALES 489.9 467.2 476.1 12.6 PATRIA 100 YEARS 12.1 YEAR 2020 40.3 MEUR 40.3 7.3 KEY FIGURES OPERATING PROFIT 34.6 35.9 6.8 REVIEW BY THE PRESIDENT AND CEO OPERATING ENVIRONMENT 2,973 7.8 STRATEGY PERSONNEL 16 17 18 19 20 16 17 18 19 20 16 17 18 19 20 4 / Avainluvut 5 / Avainluvut 6 / Avainluvut 7 / Avainluvut DIGITALISATION Personnel, end of period (FTE) Order stock, EUR million Equity ratio, % Net sales outside Finland, % BUSINESS UNITS 3,055 2,973 1,508.2 58.3 AVIATION 2,765 2,792 2,815 53.7 54.4 SYSTEMS 39.1 38.8 INTERNATIONAL SUPPORT PARTNERSHIPS 857.7 691.4 687.1 649.2 LAND 41 33 AEROSTRUCTURES 27 26 25 MILLOG NAMMO 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 ANNUAL REVIEW PRESIDENT AND CEO’S REVIEW PATRIA IN BRIEF OUR VALUES Developing partnerships PATRIA 100 YEARS YEAR 2020 and paving the way for KEY FIGURES REVIEW BY THE PRESIDENT AND CEO future growth OPERATING ENVIRONMENT STRATEGY For Patria, 2020 was a year of strong put to the test by the COVID-19 pandemic. However, Global interest in Patria’s products DIGITALISATION development in terms of partnerships we still managed to provide our customers with good and services and our own operations in both service