Patria’s Financial Review for 2010
In 2010, Patria's order stock grew markedly and the balance sheet strengthened, thanks to a solid cash flow. Despite the tightening market situation, the company’s most important new projects progressed according to plan. The stronger balance sheet enhances the company’s financial stability while providing added manoeuvrability for future planning. The competitive situation within Patria’s industry is expected to remain intense.
New orders and order stock in 2010
The value of new orders received during the 2010 financial year was EUR 1,017.6 million (EUR 624.4 million in 2009). Defence material and maintenance accounted for 91% (89%) and civilian products for 9% (11%) of the new orders. At the end of December, the volume of the Group’s order stock was EUR 1,787.2 million (EUR 1,315.6 million), for year-on-year growth of 34 per cent.
In 2010, Patria’s most important deal was the contract for 113 Patria AMVs to be delivered to the Swedish Defence Materiel Administration. Another major Nordic co-operation project was the order placed by the Finnish Defence Forces for AMOS mortar vehicles with Patria Hägglunds AB, a company 50% owned by Patria.
Net sales and profitability
Patria Group’s net sales for 2010 totalled EUR 564.3 million (EUR 539.5 million in 2009 and EUR 534.6 million in 2008). Defence material and maintenance accounted for 88% (88%) and civilian products for 12% (12%) of net sales. Sales outside Finland accounted for 63% (62%) of the net sales.
The Group’s operating profit for January–December was EUR 10.5 million, representing 1.9% of net sales (2009: EUR 20.0 million, 3.7%). The consolidated income before taxes amounted to EUR 7.2 million (EUR 17.0 million). The profits were burdened by non-recurring items relating to ongoing delivery projects. The Group’s return on equity was 1.7% (5.8%).
Patria’s subsidiaries, Millog and Nammo, had a major impact on Group results.
Millog provides system life-cycle support for the Finnish Defence Forces in various areas, including electronics, weapons and weapon systems, vehicles, and material supplies. In its second year of operation, Millog further improved its efficiency and expects to see continued growth in 2011.
Nammo Group, a joint venture of Patria and the state of Norway, develops and manufactures high-technology ammunition equipment and rocket motors for missiles, including life-cycle support for their offering. In 2010, Nammo achieved its best ever financial result and recorded net sales of over EUR 400 million.
In addition to vehicle orders, the most important projects for Patria Group included the contract signed with the Finnish Navy for the upgrade of Rauma-class fast attack craft and the deal of Patria Nemo mortar systems that is a part of a delivery programme related to a United States Foreign Military Sales (FMS) project.
Outlook
On the basis of the new orders secured in 2010, the company expects additional year-on-year improvement in its net sales and operating profit, provided that the world economy continues to show accelerating growth. However, the Slovenian vehicle project involves risks that, should they be actualised, could have a negative impact on Patria’s consolidated net sales and profitability.
‘Our strong order stock provides a solid basis for the years to come and will significantly strengthen our financial position in the next few years. We are delighted to report one of the strongest order stocks in our history. Meanwhile, continuously intensifying competition and major budget cuts across the defence industry are common trends worldwide, calling for constant development of operations,’ says President and CEO of Patria Group Heikki Allonen.
The Annual Review 2010 will be available on Patria’s website on week 17.
Further information:
Birgitta Selonen, Vice President, Corporate Communications, tel. +358 40 869 2043 , [email protected]
Patria is a globally operating defence, security, and aviation group providing customers with competitive solutions based on strong expertise and collaboration with trusted partners. Patria is owned by the State of Finland and the European Aeronautic Defence and Space Company (EADS N.V.).
