Success in the market requires the ability to adapt and evolve both as a company and as a producer of products and services in tough competition.

The company must be able to identify trends steering the development of the industry as well as new trends. It is essential for us to have a real-time understanding of customers´ needs and to rapidly find competitive solutions. This is also a mark of competence.

Patria´s success is based on reliable services, a strong portfolio, experienced specialists and a customer-oriented MO. The new ownership structure of the company will strengthen our success factors. We have obtained alongside the state-owner a familiar industrial partner, the Norwegian company Kongsberg, which will open up new opportunities to develop our operations and undoubtedly also influence our future strategy choices. Our affiliate Nammo will fit in well with this joint future with Kongsberg. Our position as a significant part of the new Nordic partnership in the defence industry is strong.

In the light of the figures, our Group achieved a result that exceeded budget targets with net sales remaining on a par with the previous review period. The Company's balance sheet continues in rude health. However, with regard to our goals, too much capital remained tied to business operations. Negotiations and agreements regarding new orders have given confidence that this year will be a year of growth for Patria.

Many of the projects already under way related to equipment life-cycle management, and the new maintenance activities transferred to Millog, progressed as planned. The Finnish Defence Forces are kick-starting a number of large-scale projects that are of great interest to Patria. In terms of value and strategic importance the HX project, which aims to replace the Hornet fighter jet, is paramount. The impact of the project on Patria´s aviation business will be significant. Another source of great interest to Patria are the Squadron 2000 and Squadron 2020 projects, which aim to replace the outdated fighting vessels of the Finnish Navy. Other topical projects include the order for the modernisation of seven Hawk fighter planes received at the end of 2015.

Our domestic projects are linked by the production of post-procurement phase, cost-efficient life cycle support services – a speciality of Patria. The strategic partnership established between Patria and the Finnish Defence Forces regarding life-cycle support services for military aviation systems is a good example of this. In the international project market, we have once again made promising progress following a brief pause, and we have recently obtained couple of exceedingly interesting new orders. In addition I believe that Patria could be moving forward in certain major projects to the next bidding round in the very near future. Time will show whether our faith is justified.

It has taken a great deal of patient and responsible work, inside and outside our organisation, to get here. This is a good springboard from which to continue.

Heikki Allonen

President and CEO