Annual Report 2008
2 year 2008
C o p y r i g h t : o n n i n e n o y 2 0 0 9
03year 2008
Group events in 2008 04
Group prospects for 2009 05
Review by the Chair of the Board and the President and CEO 06
Onninen customer segments: Contractors 08
Onninen customer segments: Industry 14
Onninen customer segments: Infra 20
Onninen customer segments: Retailers 26
Onninen by country 32
Long-term partnership 34
Personnel 36
Responsibility report 40
Report by the Board of Directors and Financial Accounts 60
Board of Directors 88
Group Management Team 89
Contact information 90
Onninen AnnuAl RepORt 2008
cOntent
04 year 2008
group eventsin 2008
• WecontinuedbuildinganewERPsystemfortheGroupandgroup-widerenewalofnetworkconnectionsandequipment.
• WestartedbuildingNorwegianheadquartersandDC.InPolandnewpartofDCwastakenintouseandHQwasmovedtoTeolin.WestartedbuildingHattulasteelservicecenter.KalugalogisticcenterprojectnearMoscowwasputforwardandpreparationswerecontinued.
• Weopened6newoutletsalltogetherinFinlandandPoland.Weclosedtotalof8outletsinFinland,SwedenandRussia.
• OrganizationandoperationsrenewalwasmadeinSweden.
• WeopenedsourcingofficeinShanghai,China.
KeY FiGuReS 2008 change % 2007Turnover,EURmillion 1,748 1.7 1,719Operatingprofit(EBIT),EURmillion 29 -33.4 43Returnoninvestment(ROI),% 11.4 16.5EquityRatio,% 37.1 35.3Personnelatyear-end 3,210 3,304
05year 2008
group prospeCtsfor 2009
• Globaleconomyisclosingrecessionanditwilleffectin-creasinglyonourbusinessinallouroperatingcountries.
• Wewilladjustouractionsandimproveefficiencyinordertomeetthedemand.
• Themostimportantdevelopmentprograms,thedevelop-mentofcustomerservicesandICTsystemsrenewal,willbecontinuedforthefuture.
• Weforecasttheturnovertodecreaseincomparisontothelevelin2008.
• Wewillcontinueinvestmentsinourbusinessdevelop-ment.During2009wewillopenthenewsteelservicecenterinHattula,Finland.NewERPprogramwillbebuilttobereadyforuse.
VAlueS
• Workingtogether
• Respectingpeople
• Betterthanbefore
MiSSiOn
• Providetechnicalgoodsandservicestoimproveourcustomers’business.Oursuppliersarealsoourcustomers.
StRAteGY
• Unify,Improve,Differentiate,Renew,Boost
OuR lOnG-teRM GOAlS
• Turnoverannualgrowthover10%
• EBITA5%
• Marketposition1or2
ViSiOn
• FIRSTCHOICE
07year 2008
The woRld economyhasgonefromuncertaintytoglobalrecessionanditisinfluencingallbusinesssectorsaswellaspeople’severydaylives.Almostallcompaniesarebeingforcedtodownsizetheiroperationstoadjusttothenewdemandlevel,whichwillbelowerthanlastyear.Wearelivingthroughoneofthemostdifficultperiodsinourindustry.
AtOnninenwearefocusingallourresourcesoncontinuingtodeliverourcorepromisestoourcustomerswithgoodquality.Webelievethatourlong-termthinkingwillbehighlyvaluabletoourcustomersinthesetimes–wewanttobeareliablepartnertoourloyalcustomersandsuppliers.
Thegoodnewsisthatanup-turninthemarketsisgettingclosereveryday.Evenduringthesedifficulttimeswehavetotrustandbuildforthefuture.Wearecontinuingselectedprogramstoimproveourofferingandoperationsfurther.Themostimportantoftheseareourproductandserviceconceptdevelopmentforcustomers,continuingourrenewalofinformationsystemsandfinalizingourlogisticalnetworkdevelopment.
Inmanywaysthiseconomiceraishelpingtofocusouroperationsontheirmostessentialaspects,andinourcasealltheseactionsaimtoimproveourcustomers’businessinthelongtermandhelpthemtocontinuetheirbusinessinthebestpossibleway.
Theyear2009willbeverychallenginganddemanding,butworkingtogetherandlookingtothefuturewillguideusthroughthisturbulenttime.
Wewanttoexpressourwarmandsincerethankstoallstakeholdersandtoourownsteadfastpersonnelforthepastyearandwishallthebestfor2009.
Weguaranteetokeepgoingforyou!
AtOnninen,February10,2009
MaaritToivanen-Koivisto HarriSivulaChairoftheBoard PresidentandCEO
guaranteed to keepgoing for you
working together and looking to the
future will guide us through this turbulent time.
b e s e C k e
a i n a r s p e l n a
s i a b e s e C k e i s o n e o f t h e l e a d i n g m e d i u m - s i z e d C o m p a n i e s i n t h e a r e a o f s w i t C h b o a r d a n d i n d u s t r i a l e q u i p m e n t C o n s t r u C t i o n , i n s t a l l a t i o n , s y s t e m e n g i n e e r i n g a n d a u t o m a t i o n t e C h n o l o g y i n l a t v i a .
Contractors
10 year 2008
electrical contractorsThroughoutthegroup,electricalproductsaccountforthelargestshareofproductsales.Weserveelectricalcontractorsinallcountrieswithacomprehensiverangeofproducts.Ourcustomersareoftenspecializedcontractorswhomayhavesomewhatdifferentneedsintermsofproductsandservices.
Electricalinstallationcompaniescomprisethelargestindividualseg-mentgroup.AsmallentrepreneurwithafewemployeesandinstallationexpertsisaverytypicalcustomeroftheOnninenExpresschainofself-serviceoutlets.Installersfromlargercontractingcompaniesarealsoaregularsightatourdensenetworkofoutlets.
InNorwayandFinland,manyelectricalcontractingcompaniesoperateundertheElfagandElfinchainbrandswhichareaimedatOnninenconsumers.With200companies,ElfagisthemarketleaderinNorway.InFinland,Elfinsellsandmarketselectricalinstallationsandrelatedproductswith22companies.Thechainoutletscombinetheresourcesofthechainthroughjointmarketingandacquisi-tions.
HepAc and refrigeration contractorsHEPACandrefrigerationcontractorsincludeabroadgroupofprofes-sionalsworkinginspecializedfields.Onninen’srangeofproductsandservicescanmeetalltheirneeds,re-gardlessofwhethertheworkinvolvesplumbingorventilationinstallationprofessionals,oilburnercontractors,orthegrowinggroupofrefrigerationtechnicians.
Thelargestindividualcustomergroupcomprisesheatingandplumbingprofessionals,towhomOnninenhasprovidedservicefordecades.Likeourelectricalcontractors,allHEPACandrefrigerationcontractorsareactivecustomersofOnninenExpresschaininadditiontonormalphoneandonlinesalesservices.
ManyHEPACentrepreneursinFin-landoperateunderanOnninenchainbrandaimedatconsumers.HanakatsellsandmarketsinstallationservicesandHEPACproductsthroughitsnationwidenetworkof83outlets.Forseveraldecades,Hanakathasbeenrecognizedasasignofqualitywork,particularlyoutsidelargecities.During2008,Hanakatstillcontinuedtogrow.
The majority of Onninen’s customers are building technology contractors. We serve contractors in different sectors by supporting their daily work in different countries throughout the Group. According to the Onninen definition, these customers are part of the Contractors customer segment.
ContraCtors
national construction and contracting businessesServiceforlarger,mainlynational,construction,contractingandpropertymanagementcompaniesdifferssomewhatfromtheserviceforlocalcompanies.AlthoughthebasicprincipleofprovidingeverycustomercompanywitharesponsibleOnninensalespersonremainsthesame,asinglesalespersonisnotenoughtohandlesuchextensiveactivities.
Akeycustomermanagementmodelhasbeenestablishedtosupportlargecustomers,andthisisusedtoagreeongeneralguidelines.However,localsalespeoplelinkedtothekeycustomermodelhandlethepracticallocalfunctions.Intermsoflargeprojects,servicesareadaptedtotheneedsofthesituationonacase-specificbasis.
TheOnninenExpresschainalsosupportsthistypeofsub-segmentactivityinlocaloperations.Duringtheyear,largeelectricalinstallationandHEPACinstallationcompanycustomerswereagainaparticularfo-cusinFinland.Thesesub-segmentsexperiencedoncemorealargerthanaveragegrowthinsales.
cOntRActORS
11year 2008
product rangeWesellproductsfromleadingsuppliersthatareproventobehighqualityandfunctional.Inpractice,ourcustomerscanbuyeverythingtheyneedfromus.Weconcentratetoworkwiththesamebrandsonagroup-widebasis,whiletakinglocalmattersintocon-sideration.Wedevelopourextensiveproductrangeaccordingtothelatesttechnologicalandenvironmentallyfriendlytrends.
Weunderstandthatweareresponsibletothecustomersforourproducts.Itisclearthatthequalityofproductsusedininstallationworkcannevercomeintoquestionunderanycondi-tions.Theexcessinconvenienceandcostcausedbyaqualityfaultinaproductisalwaysunnecessary.Thisiswhyweworkwithinternationalsuppliersthatarecontinuouslydevel-opingtheirproductsandquality.Thedevelopmentworkshouldsupportnewtechnicalinnovationsthatmakeinstallationworkeasierandmoreef-ficientinanenvironmentallyfriendlymanner.Intermsofenvironmentalresponsibility,wewanttobeanexampletoothersintheindustryandprovideourcustomerswiththegreat-estpossibleassistanceinfulfillingenvironmentalregulations.
we provide contractors quality value added products
and services from small to big, local to international,
from single products to total partnerships.
Onninen brandsWeuseourownbrandsinproductareaswhereweseetheneedtosupplementthemarketoffering.Foryears,ourqualitybrandforprofes-sionalshasbeenOnnline.
Onnlineisalwaysanenvironmentallysafeandreliablechoiceforprofes-sionals.Onnline’shighrequirementsforqualityandfunctionalitymakesitpartofourcorporatebrandandprovidethecompanyguaranteeforeachindividualproduct.Ourcustom-ershaverecognizedthehighqualityofOnnlineforyears,andtheyarealsowellawareofthecompetitivenessoftheproductsaswell.
Onnlineproductsareavailableinal-mosteveryproductarea.TheOnnlineofferingincludesqualityoptionsforallHEPACandrefrigerationcontrac-tors.TherenewedOnnlinelookwasintroducedin2008inallOnninencountries.
OPALisasecondOnninenbrand,designedtosupportthedisplayandmarketingofproductsinretailchainsthatserveconsumers.Thebrandrangeincludesproductsthatdonotrequireprofessionalinstallationorincludeallthefeaturesneededforprofessionaldailyuse.Productselec-tionandplanningofthepackageshas
cOntRActORS
12 year 2008
particularlyemphasizedsimplicityofinstallationanduse,which,inturn,providessafetyanduserconvenience.OPALproductsarehighquality,andthelevelofqualitycanbeseenintheexceptionallysmallnumberofclaims.OPALisprimarilysoldtoconsumersbytheRetailerssegmentthroughlargeretailchains,butcertainap-plicableproductareasarenaturallyavailabletocontractorsaswell.
Onninen expressTheOnninenExpressgivescontrac-torsquickavailabilityclosetotheirowncustomers.Itiseasytopickupthesuppliesneededforanewdayfromtheoutletonthewaytotheinstallationsite.Anorderplacedthedaybeforewillalsobecollectedandreadyforpickingup.TheoutletchainservesallOnninencustomers,andtheproductrangecoversalltheneedsofelectrical,heating,ventila-tion,airconditioningandrefrigerationcontractors.
ThesizeandproductrangeoftheOnninenExpressoutletsvariesbylocation.Thesmallestoutletshaveafewthousanditemswhilethelargesthavenearlytenthousand.Theextentanddetailsoftherangearedeter-minedaccordingtodemandinthearea,andourcustomerscaninflu-encethismatter.
OnninenExpressoperatesontheprincipleofself-service.Whenar-rivingatanoutlet,thecustomerreceivesabarcodereaderthatal-lowshim/hertogetproductinforma-tionfromtheshelf.Thecustomerenterstheproductcodeandnumberofproductsintothereaderand,afteralltheproductshavebeencollected,proceedstothecheckout,wherethepurchasesareretrieveddirectlyintothedatasystemandanitemizedlistiscompiledasapartofinvoicing.
Theoutletalsoservesasapick-uppointforproductsorderedinadvance.Adeliveryorderedfromthecentralwarehousemaybereadyonthesamedayorsomeotheragreedtimeattheoutletwarehouse,whereit’seasytopickupthedelivery.DeliveriesintheNordiccountries,BalticcountriesandPolandarequickandgoodsareusuallysentfromthecentralwarehousethefollowingday.Insomecases,particularlyinRus-sia,longdistancesresultinalongerdeliverytime.
AtotalofsixnewExpressoutletswereestablishedand4wereclosedlastyear.Therearenowatotalof115OnninenExpressoutletsintheGroupcountries.
logistics servicesThemostimportantfactorintermsofcontractors’workistonothavetowaitforproductswheninstallationworkshouldalreadybeinprogress.Availabilityofproductsanddeliveriesattherighttimeintherightplaceareessentialtogettheworkdone.
Onninenofferscontractorcustomersseveraloptionsfordeliveries.On-ninenExpressworksasapick-uplo-cationforindividualproductsandforordersplacedinadvance.Thepick-uppracticeforadvanceordersvariesalittlebycountry,butforthemostpart,alltheproductsinthewarehouseareavailableforpickingup.
BasicdeliveryiscalledOnniDeliveryinmanycountries.OnniDeliveryde-liversproductseveryweekdaytotheaddressrequestedbythecustomer.Themostcommondestinationsfordeliveryareaworksiteorcompanywarehouse.Contractorcustomersusuallyhavefairlysmallcompanywarehouses,sothisisusuallyamatterofatemporarywarehouseforsparepartproducts.Propertimingofdeliveriestotheworksiteisparticu-larlyimportant.
cOntRActORS
Onninen Express gives quick availability close to contractor’s own customers. The product range covers all the needs of electrical, heating, ventilation, air conditioning and refrigeration contractors.
Electrical products account for the largest share of product sales comprise. Our customers are often specialized electrical contractors who may have somewhat different needs in terms of products and services.
The largest individual customer group comprises heating and plumbing professionals. Onninen provides every customer company a responsible Onninen salesperson.
13year 2008
ManylargeinstallationbusinessesuseOnninen’sservicewarehouse,whichisautomaticallyrestockedonthebasisofelectronicmonitor-ingorbynormalorders.Containerwarehousesattheworksitecanalsobedeliverypoints.Inthiscase,theworksitehasacontainerwhereanagreedproductrangeismaintained.UpdatingsystemsthatoperateonGSMtechnologyensurethatreplace-mentproductsareautomaticallyaddedtothefollowingday’sdeliverywheneverthestockdropsbelowadefinedlimit.
Otherdeliverymethodsincludefac-torydeliveryand24-houremergencydelivery.Factorydeliveryinvolvessendingtheproducttothecustomerdirectfromthefactory.In24-houremergencydeliverytheproductisdeliveredatanytimeofthedaytoanyplaceinthefastestpossibleway.
Therearecountry-specificdifferencesindeliverymethodsregardingdeliverytimesandthecontentoftheservices.Thestartingpointistoadaptthede-liverymethodsandschedulestothecustomerneedsineachcountry.
customer relations and organizationMaintainingcustomerrelationsisakeypartofsales.Themostimportantindividualfactorinthisareaisacom-petentandmotivatedstaff.Ourstaffaimstobeservice-orientedandcom-petent,andtosystematicallydeveloplong-termcustomerrelations.Forus,competencemeansunderstandingthecustomer’sbusinessandneeds,andproductknowledge.
During2008wehelddozensofcustomereventsonagroup-widebasis.Theseinvolvedpresentingnewproductstocustomers,discussingthemarketsituationandchangesinlegislation,aswellasexaminingchangesinthecustomers’operatingenvironments.Theeventsvariedinsizefromafewdozencustomerstoafewthousand.
ProfitresponsibilityfortheContrac-torssegmentlieswiththecountrycompanies.EachOnninencountryhasaContractorssegmentdirectorwhoreportsdirectlytothemanagingdirectorforthecountry.Thesalesorganizationrunbythesegmentdirectorsisorganizedaccordingtolocalneeds.ThecustomerbaseinallcountriesexceptNorwayincludeselectrical,HEPACandrefrigera-tioncontractors.InNorwayweonlyoperateintheelectricalcontractorsmarket.
AttheGrouplevel,developmentofsalesissteeredthroughtheseg-mentgroups.Thegroup’staskistodevelopcooperation,lookforthebestoperatingmethodsandpromotesalesdevelopmentintheContractorscustomerbase.MattiWetterstrandistheGroupSegmentDirectorforContractors.
cOntRActORS
2008
2009
SeGMent deVelOpMent 2008DevelopmentintheContrac-torssegmentwasunsatisfactorythroughouttheGroupin2008.Salessloweddownlatestbytheendoftheyearinallcountries.However,inseveralcountriesandproductareaswegainedmoremarketshare.
OutlOOK FOR tHe upcOMinG YeARIn2009,demandisgenerallyexpectedtoweaken.Therearestilllargeregionaldifferencesindevelopmentbutmaintrendisstronglydownwards.
m o n d i s y k t y v k a r m i l l d e v e l o p m e n t
f r a n z s t e b e g g
m o n d i i s a l e a d i n g i n t e r n a t i o n a l p a p e r a n d p a C k a g i n g g r o u p w i t h o p e r a t i o n s a C r o s s 3 5 C o u n t r i e s a n d a n a v e r a g e o f 3 5 , 0 0 0 e m p l o y e e s .
Industry
16 year 2008
OeM customersTheequipmentmanufacturerscus-tomergroupincludesmanufacturersofproductsandsystems.Therangeofdifferentindustrialfieldsisexten-sive.Theshipyardindustryincludesshipandboatmanufacturers,andtheforestryandpowerequipmentbuild-ersincludeverywellknowncompa-niesfromabroadsector.
Valveandboilermanufacturersaswellaspanelbuildersproduceessentialproductsforuseinotherindustries.Subcontractormachineshopsalsoworklikeequipmentmanufacturersbyproducingpartsorworkforothercompanies.Producersofrawmaterialsandmetalstruc-turesfortheconstructionindustryarealsoclassifiedasOnninenequip-mentmanufacturercustomers.Themechanicalengineeringindustryandmetalfurnituremanufacturersarethefinalmembersofthisgroup.
Ourofferingforequipmentmanu-facturersincludescomprehensiveprocurementofrawmaterialsandmanufacturing-relatedproducts,optimizationofsupplychains,andprefabrication.
MRO customersThesecondmaingroupofindustrycustomers,theprocessindustryandmaintenanceandrepaircompaniesoperatinginit,makeupasignificantportionofthecustomersthatutilizeourproductrangeandservices.Thewoodprocessingindustryisrepre-sentedbypaperandpulpproductionplants,sawsandplywoodmanu-facturers.Thechemicalindustry,pharmaceuticalplants,paintandcoatingplants,andtheplasticsandoilindustryallneedourservicestomaintaintheirproductions.
Theenergyindustry,manufactur-ersofsteelandothermetals,andcompaniesdoingindustrialelectrical,instrumentationandprocesspipecontractingaswellasmaintenancecompaniesutilizetheservicesthatwehavedevelopedtomeetindustrialneeds.Furthermore,breweries,dair-ies,slaughterhouses,conveniencefoodplants,andindustrialretailingcompanieshavetraditionallybeenMROcustomers.
Industry divides purchases traditionally by process differences into two parts: direct purchases - in other words, those that go directly into the product being manufactured (OEM industry) - and indirect purchases that include all other purchases (MRO industry). The commonly used abbreviations stand for original equipment manufacturer (OEM) and material resource operations or maintenance and repair operations (MRO).
industry
Inadditiontothenormalproductrange,theprocessindustryandmaintenanceandrepaircompaniesmakeparticularuseofourwarehous-ingandproductavailabilityservices.Thefunctionalityofmaterialservicesisimportanttoourindustrialcustom-ers,whoseproductionhastocontinueuninterrupted.Agoodunderstandingofthecustomer’sprocessesispar-ticularlyimportantinthisarea.
Ourcustomersproduceuniqueproductsandservicesforwhichthemanufacturingisoftenwellprotectedrightfromtheproductdevelopmentstage.Aconfidentialcustomerrelationshipisthestartingpointforenduring,long-termcooperation.
Offering for industrial customersWeofferindustrialprofessionalsourcompetenceandcomprehensiveservices,technicalsolutions,andproductranges.Competencereferstospecificexpertiseindifferentfieldsandtheabilityanddesiretolearnabouteachcustomer’sspecialcharacteristicsandrequirements.OurserviceistailoredtotheneedsofIndustrycustomers,andourtechni-calsolutionsareintegratedintothecustomer’ssystems.
induStRY
17year 2008
Ourrangeofproductsisextensive.ThecustomerhasaccesstotheentireOnninenproductrange,andespeciallytotheproductsdesignedtomeetindustrialneeds.Thisisconstantlyunderdevelopmentinac-cordancewiththelatesttechnologicaldevelopmentandcustomerneeds.
Ourproductrangeincludesrawmaterials,components,industrialconsumables,andmaintenanceandinvestmentproducts.Inordertoachievethedesiredlevelofserviceinindustry,wearepreparedincertaincasestostorecustomer-specificproducts.
Weunderstandthatwearere-sponsibletothecustomersforourproducts.Itisclearthatthequalityofproductsusedinindustrymustbeextremelyhigh.Theinternationalsuppliersweworkwithgenuinelywanttodeveloptheirproductsandensuretop-levelqualitycontrol.Intermsofenvironmentalresponsibil-ity,wewanttodoourbesttohelpcustomersfulfilltheenvironmentalregulations.
we help our industrial customers to concentrate
to their core business by providing best integrated
technical material services.
Thestartingpointforourserviceisoptimizationofthesupplychain.Afterperformingareviewwiththecustomer,wepresenttheareasinwhichOnninencanbeofthemostbenefitwithregardtothecustomer’sprocesses.Thefinalcooperationformismainlydeterminedonthebasisofthiscustomer-specificreview.Insomecaseswedeliverproducts,whileinotherswetakeresponsibilityforthecustomer’slogisticsarrange-ments,andthushandlethelogisticsfortheentirefactoryorproductionarea.
Ouraimistomaximizetheefficiencyofcustomerproductioninthemostenvironmentallyfriendlywaypossible.Weseethisgoalasbeingthemostimportantstartingpointforlong-termcooperationinmaterialservices.
Ourindustrialcustomersarealmostallinternational,andourentireinter-nationalorganizationissubsequentlyavailabletothem.
induStRY
18 year 2008
Onninen brandsWeuseourownbrandsinproductareaswhereweseetheneedtosupplementthemarketoffering.Foryears,ourqualitybrandforprofes-sionalshasbeenOnnline.
Onnlineisalwaysanenvironmentallysafeandreliablechoiceforprofes-sionals.Onnline’shighrequirementsforqualityandfunctionalitymakeitpartofourcorporatebrandandpro-videthecompanyguaranteeforeachindividualproduct.
Onnlineproductsareavailableinal-mosteveryproductarea.Thelargestproductgroupsintheindustrialoffer-ingaredifferenttypesofvalves.TherenewedOnnlinelookwasintroducedin2008inallOnninencountries.
Onninen expressTheOnninenExpresschainservesourindustrialcustomersonagroup-widebasis.ExpressservicesarecloseathandwhencustomersneedtopickupsuppliesquicklyorwhenExpressisamoreconvenientdeliverysitethancustomer’sownsite.
Forourindustrialcustomers,OnninenExpresscanserveasaconvenientplacetopurchaseinstallationtoolsandothersmallsuppliesneededonadailybasis.
logistics servicesBasicdeliveryiscalledOnniDeliveryinmanycountries.OnniDeliveryde-liversproductseveryweekdaytotheaddressrequestedbythecustomer.Themostcommondestinationsfordeliveryareproductionplantsoracompanywarehouse.Servicewarehousesatproductionplantsareaprerequisiteforyear-roundopera-tion.TheservicewarehousescanbetemporarywarehousesequippedwithbarcodereadersforwhichbalanceinformationiselectronicallysenttotheOnninensystematregularintervals.Anyproductsthatreachthealarmlimitareautomaticallypackedfordeliverythenextday.
Materialdeliveriesofproductsgoingdirectlytotheproductionprocessesareproperlytimedintermsofmanu-facturing.Theentiredeliverychainfortheproductdependsonwhichstageoftheproductionprocesstheproductisdeliveredto,andonthesizeofOnninen’sshareofprefabrica-tion.Thealternativesrangefromba-sicrawmaterialdeliverytomachinedpartsdeliveredtothefinalstageofproduction.
Onninen’soutsourcedlogisticssolutionsareacompleteserviceinwhichwetakeresponsibilityfortheavailabilityofgoodsintheproductionplantwarehouseandforlogisticsarrangementsthroughoutthearea.
Otherdeliverymethodsincludeship-mentsdirectlyfrommanufacturersand24-houremergencydelivery.In24-houremergencydeliverytheproductisdeliveredatanytimeofthedaytoanyplaceinthefastestpossibleway.
Therearecountry-specificdiffer-encesindeliverymethodsregardingdeliverytimesandthecontentoftheservices.Thestartingpointistoadaptthedeliverymethodsandschedulestothecustomerneedsineachcountry.
Subcontractor machine shops produce parts for other companies. Our product range includes raw materials, components, industrial consumables, and maintenance and investment products.
The process industry makes particular use of our warehousing and product availability services. The functionality of material services is important, since their production has to continue uninterrupted.
Our offering for equipment manufacturers includes comprehensive procurement of raw materials and manufacturing-related products, optimization of supply chains, and prefabrication.
induStRY
19year 2008
customer relations and organizationDuring2008weheldnumerouscus-tomereventsinwhichnewsolutionswerepresentedtothecustomers,andchangesinthecustomers’oper-atingenvironmentswerediscussed.
ProfitresponsibilityfortheIndustrysegmentlieswiththecountrycompa-nies.EachOnninencountryhasanIn-dustrysegmentdirectorwhoreportsdirectlytothemanagingdirectorforthecountry.Thesalesorganizationrunbythesegmentdirectorsisorga-nizedaccordingtolocalneeds.
AttheGrouplevel,developmentofsalesissteeredthroughthesegmentgroups.Thegroup’staskistodevelopcooperation,lookforthebestoperat-ingmethods,andpromotesalesdevelopmentintheIndustrycustomerbase.TomGrönmarkistheGroupSegmentDirectorforIndustry.
The starting point for our service is optimization of the supply chain. A good understanding of the customer’s processes is important and the cooperation is determined on the basis of customer-specific review.
SeGMent deVelOpMent 2008DevelopmentintheIndustryseg-mentwasgoodthroughouttheGroupin2008.InFinland,salesofsteelandelectricalproductsde-velopedparticularlywell,andweincreasedourmarketshareintheentiresegment.Again,thestrong-estgrowthwasinthemechanicalengineeringindustryandsubcon-tractingworkshops.Weincreasedourmarketshareintheshipbuild-ingandoilindustryinNorway.
InFinland,wearebuildinganewsteelservicecenterinthemunici-palityofHattula.Thecenterwillbeinfulloperationduring2009.
OutlOOK FOR tHe upcOMinG YeAREventhoughtheeconomicout-lookforIndustryin2009isdizzy,westilldoexpectthesegmenttogrowonagroup-widebasis.
2008
2009
induStRY
v a t t e n f a l l
m a g n u s k a i s ä t e r
v a t t e n f a l l i s o n e o f t h e l e a d i n g e n e r g y C o m p a n i e s i n s C a n d i n a v i a a n d o n n i n e n g r o u p ’ s l a r g e s t i n f r a C u s t o m e r .
Infra
22 year 2008
customersWaterandenergyareresourcesthatreallyreflecttheprinciplesofoperationthroughoutOnninen.Inparticular,companiesandorganiza-tionsthatworkintheareaofwatermanagementandenergysupplyandtransferformthecoreofourInfracustomerbase.
Waterandsewageplantsareoftenrunbymunicipalities,butinruralareascooperativesformedbyprivatehouseholdshavebecomemorecom-moninrecentyears,astheimpor-tanceofcleanwaterbecomesevenmoreremarkableandtheregulationsgoverningsewagehandlingbecomestricterinallcountriesOnninenoper-atesin.
Infracustomersincludeenergyplantswithelectricnetworkactivi-tiesanddistrictheatingplants.Theuninterruptedyear-roundoperationoftheseactorsissomethingthatallofushavecometoexpect,andthisisthestartingpointforthecompaniesasserviceproviders.
Manyspecializedcompaniesareresponsibleforbuildingthetransfernetworksfortheabove-mentionedplantsandthecommoditytheysupply.Thisincludescontractorsontheelectricitynetworkanddatacommu-nications,districtheatingcontractors,aswellaswaterandsoilengineeringcontractors.
Intermsofpublicservices,theInfracustomerbaseincludesvariousstateinstitutions.Airlines,railwayandpro-curementcompaniesareexamplesofsuchcompaniesandinstitutes.Postal,educationalandresearchinstitutesarepartofthisgroupthatproducesabroadrangeofsupportservicesforsociety.
Long-termcustomersinourInfrasegmentincludehospitals,prisons,parishes,municipalities,cities,andharboursaswellaswastemanage-mentandothercompaniesworkingwithenvironmentalconstruction.
The companies that maintain the infrastructure of our society make up the customer base for our Infra segment. Without these companies we wouldn’t have clean water, electricity or heat. Infra customers also include non-profit organizations that maintain our healthcare services, road network, waste management.
infra
Datacommunicationscompaniesserveasagoodexampleofactivitiesthathavebecomeanordinaryservicethatisexpectedtoworkinanuninter-ruptedway.Infrasegmentactivitiescoverthesupportofthesekindsoftasks.Modernofficeworkisnearlyasdependentondatanetworksasitisonelectricity.
Offering for infra customersWeofferinfrastructureprofessionalsourextensiveexpertise,comprehen-siveservices,andtechnicalsolutionsforallcustomersinthesegment.Expertisereferstospecificcom-petenceindifferentfieldsandtheabilityanddesiretolearnabouteachcustomer’sspecialcharacteristicsandrequirements.OurserviceistailoredtotheneedsofInfracus-tomers,andourtechnicalsolutionsareintegratedintothecustomer’ssystems.
Thecustomerhasaccesstotheproductrangeespeciallydesignedtomeetinfrastructureneeds.Thisisconstantlyunderdevelopmentinaccordancewiththelatesttechno-logicaldevelopmentandcustomerneeds.
inFRA
23year 2008
Ourassortmentincludesproductsforthewater,gas,electricity,heat-ing,cooling,transport,outdoorlight-inganddatacommunicationsareas.Togetherwiththecustomers,wetakeresponsibilityforensuringthatbothproductandfunctionalsolu-tionsareenvironmentallyfriendly.Environmentalfriendlinesscoversthedesign,manufactureandinstal-lationoftheproducts.
Weunderstandourproductrespon-sibilitytowardsourcustomers.Itisclearthatthequalityofproductsusedmustbeextremelyhigh.Theinternationalsuppliersweworkwithgenuinelystrivefordevelopingtheirproductsandensuretop-levelqual-itycontrol.
Ouraimistoensuretheefficiencyofcustomerproductioninthemostenvironmentallyfriendlywayaspos-sible.Long-termmaterialservicecooperationisatitsbestwhenbothpartiestrulywanttodevelopcon-tinuously.
we help infrastructure customers to run modern
sustainable society by securing their everyday material
services.
Weserveourcustomersinternation-ally.Inparticular,ourcustomersinthedatacommunicationsfieldarealmostallinternational,andourentiregrouporganizationisavailabletosuchcustomers.Ifdesired,wealsoco-operatewithourcustomersoutsideouroperationcountries.
Onninen brandsWeuseourownbrandsinproductareaswhereweseetheneedtosupplementthemarketoffering.Foryears,ourqualitybrandforprofes-sionalshasbeenOnnline.
Onnlineisalwaysanenvironmentallysafeandreliablechoiceforprofes-sionals.Onnline’shighrequirementsforqualityandfunctionalitymakeitpartofourcorporatebrandandprovidethecompanyguaranteeforeachindividualproduct.
Onnlineproductsareavailableinal-mosteveryproductarea.Thelargestproductgroupsintheinfrastructurerangearesuppliesrelatedtowatersupplyandpumpingstations.There-newedOnnlinelookwasintroducedin2008inallOnninencountries.
inFRA
24 year 2008
Onninen expressTheOnninenExpresschainservesallourcustomersonagroup-widebasis.ExpressservicesarecloseathandwhencustomerneedstopickupsuppliesquicklyorwhentheExpressshopisamoreconvenientdeliverysitethancustomer’sownsite.
logistics servicesBasicdeliveryiscalledOnniDeliveryinmanycountries.OnniDeliveryde-liversproductseveryweekdaytotheaddressrequestedbythecustomer.Themostcommondestinationsfordeliveriesareconstructionsitesaswellasproductionplantsoracom-panywarehouse.
Servicewarehousesatproductionplantsareaprerequisiteforyear-roundoperation.Theserviceware-housescanbeVMI(VendorManagedInventories)equippedwithbarcodereadersforwhichbalanceinforma-tionissenttotheOnninensystematregularintervals.Anyproductsthatreachthealarmlimitareautomati-callypackedforthenextdelivery.ThenumberofVMI’shasincreasedinre-centyears.Companieshaveadoptedthisserviceandthusthenumberofservicewarehouseitemsandoverallsolutionshasincreasedaccordingly.
Otherdeliverymethodsincludedirectdeliveryand24-houremergencydelivery.Directdeliveryinvolvestrans-portingtheproducttothecustomerdirectlyfromthefactory.In24-houremergencyservice,theorderisdeliveredatanytimeofthedaytoanyplaceinthefastestpossibleway.
Therearecountry-specificdiffer-encesindeliverymethodsregardingdeliverytimesandthecontentoftheservices.Thestartingpointistoadaptthedeliverymethodsandschedulestothecustomerneedsineachcountry.
customer relations and organizationWehavestartedprogressinservicesandproductdevelopmentincludingbusinessconceptdevelopmentforallsub-segments(Water&Sewage,DistrictHeating,SoilConstruction,Telecom,ElectricalNetwork).
During2008,weheldnumerouscus-tomereventsinwhichnewproductsandsolutionswerepresentedtocustomers,andchangesincustom-ers’operatingenvironmentswerediscussed.
ProfitresponsibilityfortheInfraseg-mentlieswiththecountrycompanies.EachOnninencountryhasanInfrasegmentdirectorwhoreportsdirectlytothemanagingdirectorforthecountry.Thesalesorganizationrunbythesegmentdirectorsisorganizedaccordingtolocalneeds.
AttheGrouplevel,developmentofsalesissteeredthroughthesegmentgroups.Thegroup’staskistodevelopcooperation,lookforthebestoperat-ingmethodsandpromotesalesdevelopmentintheInfracustomerbase.RistoPasanenistheGroupSegmentDirectorforInfra.
Energy plants and district heating plants are among the most important infra customers. The uninterrupted year-round operation is particularly important when providing services to these actors.
Water and sewage plants are often run by municipalities, but in rural areas cooperatives of private households have become more common. Water and soil engineering contractors are responsible for building the networks.
Data communications companies serve as an example of activities that modern office work is dependent on and are expected to work in an uninterrupted way. Our Infra segment supports these tasks.
inFRA
25year 2008
SeGMent deVelOpMent 2008ThedevelopmentwithintheInfrasegmentwasquitegood.ThestronggrowthintheinfrastructureconstructioncontinuedinFinland,wherewearethemarketleaderintheentiresegment.InSweden,wearethemarketleaderintheener-gysectorandsalesdevelopedviamajorcustomers.Marketgrowthwas,however,notasstrongasexpected.InNorwayweincreasedourmarketshareinelectricalutil-itymarketbutdevelopmentwaslowerthanexpected.Westartedtostrengthenourmarketposi-tioninRussiaandBalticcountriesespeciallyinWater&SewageandTelecomcustomersegments.
OutlOOK FOR tHe upcOMinG YeARTheeconomicoutlookforInfracustomersseemstobequitepromisingin2009despiteofseriousconcernesinfinancingactivitiesglobally.StillweexpectmoderategrowthonGrouplevel–businessdevelopmentbetweencountriesmayvaryalot.Severalnewprojectsarestartingupinallofourcountriesofoperation.
2008
2009
We take responsibility for ensuring that both product and functional solutions are environmentally friendly. Environmental friendliness covers the design, manufacture and installation of the products.
inFRA
n o m i
m a C i e j k u r p i n s k i´
n o m i s . a . i s a C h a i n o f s u p e r m a r k e t s i n p o l a n d o f f e r i n g b u i l d i n g a n d d e C o r a t i v e m a t e r i a l s , b a t h r o o m a n d k i t C h e n f i t t i n g s , e l e C t r i C a l a n d l i g h t i n g p r o d u C t s , a s w e l l a s m e t a l a n d g a r d e n i n g a r t i C l e s .
Retailers
28 year 2008
customers and partnersHardwarestorechainsmakeupasignificantshareofourretailercus-tomers.Weclassifybothinternationalchainsandthehardwareunitsanddepartmentsofnationalchainsashardwarechains.Wealsoservelocaloutletssellinghardwareitemsandretailchainsthatdonothavesepa-ratehardwarestoresordepartments.
Othercustomersthatpurchasefit-tingsandsuppliesfromourRetailersunitincludeinteriordecoratingstores,kitchenfittingoutletsandmanufac-turersandbuildingplants.Theprod-uctscanrangefromabathroomsinkplugandtaptocompletesolutions.Alsohousemanufacturesandpre-fabricantedhouseretailers,whoaresellinghousesandaccessoriestoendcustomeraresignifigantcustomergroupforretailsegment.
Retailchainshavethreemaintargets:valuecreation,efficiencyandgrowth.Theyarealsofocusedontheircus-tomer’ssatisfaction.Theyaremoreandmorefull-servicesuppliersinthehomeimprovementandDIYmarketofferingproductsforconstructions,renovation,workshops,living,gardenandleisureactivities.
Retailchain’splansregardingassort-mentdevelopmentistohavebroadofferingtoservetheneedsofbothprofessionalandDIYcustomers.Theirstrategicobjectivesaretomanagegrowthandleverageincreasedpur-chasingpoweracrossgeographies.Theyalsotrytoclarifytheroleofthechainorganizationbyfocusingoncoreactivitiesandfindingrightpart-nersforoutsourcingsomeactivities.
Supply chainTraditionalmarketsarebeingreplacedbynetworksinthefuture.Networkvisioningisanessentialstrategiccapability.Acompany’sper-formanceisincreasinglyinfluencedbytheeffectivenessofitssupplychain,particularlybyworkingwiththebestsuppliersandcustomers.Thus,workingeffectivelywiththebestpartnerscompanyensuresthattheoverallvaluechainwillbeverycompetitive.
Consumers’ desire to influence their own product choices in building construction and renovation is growing steadily. Builders and renovators are comparing technical products and making purchasing decisions to an increasing extent. The growing product ranges offered by different retail sales channels provide them with a good opportunity to do this. The Onninen Retailers customer segment supplies products and services for a variety of retailers of technical products, who in turn offer their services to consumers.
retailers
Companyhastodecidewhichpro-cessshouldbelinkedwitheachofthesupplychainmembersandwithwhatkindoflinks.Thismeansthatfirmscannotindividuallycontroltheirownactivitiesorfutures.Thebetterthenetworkvisionafirmhasthebetteritschancesofforeseeingthestrategicchanges.Onninen´stargetistohelpretailchainsmaximizetheirsalesandprofitandsametimehelpsuppliertooptimizenetworkanddeliverycost.
products and servicesIntoday’shighlycompetitive,globalmarketplacethepressureonorgani-zationstofindnewwaystocreateanddelivervaluetocustomersgrowseverstronger.Customerservicebecomesakeydifferentiatorasthesophisti-cationanddemandsofcustomerscontinuallyincrease.
Atthesametime,marketmaturitycombinedwithnewsourcesofglobalcompetitionhasledtoover-capacityinmanybusinessareasleadingtoaninevitablepressureonprice.
RetAileRS
29year 2008
Onninencanprovidethewholeproductgrouprangeasacompletesolution.Thesesolutionsareadaptedtomeettheneedsofeachcustomer.Intoday’sbusiness,agoodproductrangeisnotenough.Thecompleteshop-in-shopsolutionincludesele-mentswhichincreaseeffectivenessinthedifferentoperationfromorderingtofloorspacemanagement.
Weunderstandthatwearere-sponsibletothecustomersforourproducts.Thisiswhyweworkwithinternationalsuppliersthatgenuinelywanttodeveloptheirproducts.
Thedevelopmentworkshouldsup-portnewtechnicalinnovationsthatmakeinstallationworkeasierandmoreefficientinanenvironmentallyfriendlymanner.
Intermsofenvironmentalrespon-sibility,wewanttobeanexampletoothersintheindustryandprovideourcustomerswiththegreatestpossibleassistanceinfulfillingenvironmen-talregulations.Thelevelofproductqualitymustbesuchthattheretailerisnotburdenedwithunnecessaryclaims.
we provide retailer customers category solutions to maximize
sales and profit.
Onninen brandsTheOPALbrandhasbeendevelopedtomeettheneedsofourcustomerswhodealwithconsumers.Productselectionandpackagingemphasizesvisibility,cleardisplay,andsimplicityofuse.Theuserfriendlinessoftheproductsisanotherimportantfactorinproductselectionthatprovidesaddedsafetyaswell.
OPALproductsareofhighquality,andthiscanalsobeseenintheex-ceptionallysmallnumberofclaims.OPALisareliableproductforwhichthetwo-yearguaranteeislongerthannormalinthissector.OurproductexpertsaredevelopingtheOPALline,andtheyhaveanexcel-lentunderstandingoftherequire-mentsforprofessionalproductsandutilizethisinformationforthebenefitofconsumercustomers.
WefurtherincreasedtheOPALproductrangein2008.Combiningthebrandswealsoimproveddeliveryreliabilityasoverlappingproductswerephasedoutandvolumefocusedononlyonebrand.
RetAileRS
30 year 2008
Onninen expressTheOnninenExpressserviceconceptgivesretailersquickavailabilityclosetotheirowncustomers.TheExpressconceptprovidesquickservicetomeetlocalneeds,butnormalre-placementofbasicrangesishandledbymeansofOnniDistributionaccord-ingtoadeliveryandorderrhythmagreeduponwiththecustomer.
logistics servicesDeliveryreliabilityisthemostim-portantbuyingcriteriaofcustomers.ForRetailers,itisimportantthattheproductsinthebasicrangeareavail-abletogetheraccordingtoanagreedplan.Furthermore,theproductsshouldbedeliveredtotherightplaceaccordingtotheagreeddeliveryplan.Recently,theaimofRetailershasbeentocentralizethenumberofsuppliersandthusreducetrafficatthesite.Theopportunitytocentralizealargepartofallpurchasesisaclearbenefitthecustomer.Ourextensiverangeallowsustorespondtothischallenge.
OnniDeliverydeliversproductstotheaddressrequestedbythecustomereveryweekday.TheRetailercustom-ers’informationsystemsandperson-nelensurethatanyproductthatfallsbelowthealarmlimitisautomati-callyorderedfromOnninen.Normalwarehouseproductsaredeliveredtotheoutletaccordingtotheagreedschedule.
customer relations and organizationFromthepartnershipcustomerswishopenandnaturalconversation,cooperativeproblemsolvinganddevelopingbusinessesonbothsides.Partnershiphastoalsosupportcustomer’sbusinessandcompeti-tivenesssothatcustomerisn’tonaworsepositioncomparedtoitscompetitors.
Customersexpectactivity,com-petitivepricingandwideproductassortment.Thebiggerthesupplierthehigheraretheexpectationsofcustomers.Allofthecustomersaimtoreducethenumberoftheirsup-pliersinthefuture.Accordingthecustomersproductsaremainlythesame,that’swhythecapabilitiesandoperationalqualityaredecisive.
Maintainingcustomerrelationsisakeypartofsales.Themostimpor-tantindividualfactorinthisareaisacompetentandmotivatedstaff.Ourpersonnelthatserveretailersareagroupofinnovativeprofessionalsthatareabletoofferthecustomercontinuouslydevelopingservices,thebestavailability,andoptimizedspaceutilization.
Duringthepastyearweincreasedourcooperationwithpartnersandsuppliers.Ourtargetistofurtherincreasetheefficiencyandtranspar-encyoftheentireservicechain.
Therearemanyadvantagesforretailchainsthatenterintoproductiverela-tionshipswithOnninensuchaslowerrisk,accesstotechnology,increasedknowledge,andinformationsharing.
Retailchainscansavecost,reducepurchasingnetworkcomplexityandoutsourcenon-coreactivitiesandatthesametimetheycanconcen-trateontheircorebusinessareas.Suppliersgetalsobenefitsfromthecooperation.Theycanincreasetheirbrandawarenessandimprovecost-efficiencybyofferinglogisticsolutionsthroughOnninentoretailchains.
Interior decorating stores, kitchen fitting outlets and building plants purchase fittings and supplies. We sell products from leading suppliers that are proven to be functional and of high quality.
Hardware store chains make up a significant share of our retailer customers. They are more and more full-service suppliers offering products for constructions, renovation, workshops, living, garden and leisure activities.
Retail chains are focused on their customer’s satisfaction. Onninen can provide the whole product group range as a complete solution. These solutions are adapted to meet the needs of each customer.
RetAileRS
31year 2008
Key account operation AkeycustomermanagementmodelisusedwithinternationalcustomersintheRetailerssegment,andthisisusedtoagreeongeneralguidelines.However,theactualdailyworkishandledinaverylocalmanner.Thetaskofthecustomer-specifickeycustomermanageristotrainsales-peopleregardingthespecialneedsofthosecustomersinallcompaniesinwhichthecompanyoperates.
ProfitresponsibilityfortheRetailerssegmentlieswiththecountrycompa-nies.EachOnninencountryhasaRe-tailerssegmentdirectorwhoreportsdirectlytothemanagingdirectorforthecountry.Thesalesorganizationrunbythesegmentdirectorsisorga-nizedaccordingtolocalneeds.
AttheGrouplevel,developmentofsalesissteeredthroughthesegmentgroups.Thegroup’staskistodevelopcooperation,lookforthebestoperat-ingmethods,andpromotesalesdevelopmentintheRetailercustomerbase.HeikkiPusaistheGroupSegmentDirectorforRetailers.
The OPAL brand has been developed to meet the needs of our customers who deal with consumers. Product selection and packaging emphasizes visibility, clear display, and simplicity of use.
SeGMent deVelOpMent 2008DevelopmentintheRetailersseg-mentwasgoodthroughouttheGroupin2008.Salesdevelopedwelldespitethefactthatcom-petitioninthemarketwaseventougher,particularlyinFinland,Sweden,andPoland.
Theslowdowninthemarketto-wardstheendoftheyearwasonefactorinfluencingthetoughercom-petition.Hardwareandretailchaincustomersshowedthestrongestgrowth.InFinlandwestrengthenedourmarketpositioninallproductareas–andespeciallyinelectricalandsteelproducts.
OutlOOK FOR tHe upcOMinG YeARWeexpectdemandtostayonpre-viousyear´slevel.Theretailbusi-nessfollowsthegeneraleconomicdevelopment.
2008
2009
RetAileRS
32 year 2008
onninen by Country
Onninen bY cOuntRY
33year 2008
Finland > turnover grew by 4.5 percent to eur 864.2 million (eur 826.9 million in 2007)
> operating profit eur 39.3 million (eur 41.8 million) > sites 43 > personnel 1,184 (1,179) > first executive vice president tuomo väänänen
Sweden > turnover decreased by 10.7 percent to eur 268.3 million (eur 300.3 million in 2007), turnover in swedish kronas decreased by 7.2 percent
> operating profit eur 0.2 million (eur 0.4 million) > sites 19 > personnel 351 (458) > managing director peter isaksson
Norway > turnover decreased by 2.9 percent to eur 310.2 million (eur 319.4 million in 2007), turnover in norwegian krones decreased by 0.4 percent
> operating profit eur 6.1 million (eur 14.5 million) > sites 32 > personnel 420 (433) > managing director kurt farstad
Poland > turnover grew by 18.2 percent to eur 162.7 million (eur 137.6 million in 2007), turnover in polish zlotys increased by 10.0 percent
> operating profit eur -0.5 million (eur 1.1 million) > sites 35 > personnel 740 (635) > managing director tomasz boruc
Russia > turnover grew by 17.8 percent to eur 67.3 million (eur 57.1 million in 2007)
> operating profit eur -3.4 million (eur -2.1 million) > sites 6 > personnel 253 (307) > managing director maxim zakhariev
The Baltic countries > turnover decreased by 2.2 percent to eur 75.4 million (eur 77.1 million in 2007)
> operating profit eur -0.9 million (eur 0.4 million) > sites 17 > personnel 262 (292) > area director peeter matt
Turnover in Finland, EUR million
Turnover in Sweden, EUR million
Turnover in Poland, EUR million
Turnover in the Baltic countries, EUR million
Turnover in Norway, EUR million
Turnover in Russia, EUR million
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34 year 2008
productivity and long-term thinking ensures continuityThedrivingforcebehindOnninen’sop-erationsistoensurethatthecompanyiscompetitiveyearafteryear.Productivityandlong-termdevelopmentarethebesttoolstoguaranteethis.Keepingupwithcustomerneedsandsystematicdevelop-mentofthecompanyistheonlywaytosurviveinincreasinglytoughcompetition.Asalocalemployer,Onninenalsotakesitsshareofsocialresponsibility.
employees, customers and suppliers as partnersOnninen’svaluesare“Workingtogether”,“Respectingpeople”and“Betterthanbefore”.Patienceandtheoperationalpre-requisitesaremeasuredbyhowwellthecompanyisabletodevelopitsactivities.
Onninenhasdevelopeditsactivitiesinre-sponsetochangingcustomerneeds.Thecompanyhistorydatesbackto1913,whenaplumbingbusinesswasestablished.To-day,Onninenoperatesineightcountriesandhasoperationsinvarioussegmentsoftechnicalwholesaleindustry.
Partnershiphasalwaysbeenanimpor-tantpartofOnninen’sactivities.Accordingtoitsvision,OnninenwantstobetheFirstChoiceinmaterialservicesforourcus-tomersandsuppliers.
Althoughthegenerationshavechanged,theimportanceoftherelationshipscreat-edwithsuppliersandcustomersremainsthesame.
Onninen operates locallyOnninenisclosetothecustomer.Weserveourcustomerswiththegroup-widenetworkof153sites.Itiseasiertoservewhenmatterscanbehandledwithafa-miliarOnninenemployeeinthecustomer’sownlanguageatanearbyoutlet.
Beingapartofthecustomer’severydayactivitiesandoperatinglocallyarebasicprerequisitesforOnninen’sbusiness.Es-tablishingcompaniesineachcountryofoperationisproofofourcommitmenttolocalactivities;Onninenwantstobeseenunderitsownnameineverycountry.Thecountrycompaniesplayakeyroleinidentifyinglocalcustomerneeds.Inaddi-tiontoitsGroup-levelservices,Onninenofferscountry-specificproductsandser-vices.Adaptingtocountry-specificcus-tomerneedsisalocalservicethatallowsthecustomertobenefitfromtheadvan-tagesofaninternationalorganization.
Onninenissystematicallylookingfornewwaystorespondtotoday’sdemands.RenewalisoneofthefivethemesofOnninen’sGroupstrategy.Theaimistorenewandimprovecompetenceaswellasensurethesharingofknowledge.
The same family has owned Onninen since it was established in 1913, with the fourth generation now running the company. Onninen strives for continuity and longevity in its operations. Success in a family-owned company is calculated in longer periods than a few years of value increase or quarterly stock market development.
long-term partnership
Onninen stands out solidlyOnninenisafamily-ownedcompanythatoperatesinternationally.Keepingowner-shipinthefamilyhasbeenseenasagoodmeansofmaintaininganddevelopingbusiness.
AnotheroneofthefivethemesofOn-ninen’sstrategyisdifferentiation.Differ-entiationreferstorenewingthebusinessconceptsandbrands.Onninenofferscus-tomerssolutionsintheformofproductbrandsandservicebrands.Inadditiontoourownbrands,wedeliverthebestinter-nationalproductsforourcustomers.Ourproductrangeincludesmorethan200,000productsfromtheleadingsuppliers.TheOPALandOnnlinebrandsrepresentOn-ninen’sownproductrange.
Investingtoownproductandservicebrandsarewaystoensurethatwearebuildinglong-termrelationshipswithourpartners.Keepingupowndevelopmentandbuildingupourofferingwithourcus-tomersandsuppliersshowsthesepart-nersthatOnninenisheretostay.Reliabil-ityandendurancearesometimescrucial,especiallywhentimesarehard.Weareguaranteedtokeepgoingforyou.
v u o r i n e u v o s
m a a r i t t o i v a n e n - k o i v i s t o
i n j u n e 2 0 0 8 , m a a r i t t o i v a n e n - k o i v i s t o w a s a p p o i n t e d t o v u o r i n e u v o s , a n h o n o r a r y t i t l e g r a n t e d t o l e a d i n g i n d u s t r y f i g u r e s . s h e i s t h e s e C o n d w o m a n i n t h e h i s t o r y o f f i n l a n d t o r e C e i v e t h i s t i t l e . v u o r i n e u v o s b e l o n g s w i t h t h e C o u n C i l l o r o f s t a t e – t i t l e t o t h e h i g h e s t C l a s s o f h o n o r a r y t i t l e s i n f i n l a n d . t h e t i t l e C a n o n l y b e g r a n t e d b y t h e p r e s i d e n t o f f i n l a n d .
s e n i o r v i C e p r e s i d e n t
u l l a r e h n s t r ö m
u l l a r e h n s t r ö m i s r e s p o n s i b l e o f h u m a n r e s o u r C e s d e v e l o p m e n t f o r o n n i n e n g r o u p ’ s 3 , 2 0 0 e m p l o y e e s .
Personnel
38 year 2008
onninen hAsaCompetenceMan-agementsysteminplacetomeasureexistingcompetence.Thesystemcontainsdefinedworkrolesandre-latedcompetencerequirements,bothofwhicharederivedfromthestrategyandextendthroughouttheGroup.Thesystemallowsformanagingcompe-tenceandsupportingcompetencede-velopment:comparingexistingcom-petenciestothoseneededenablesustoidentifydevelopmentneeds.TheCompetenceManagementsystemisinplaceinallOnninencountries.
Theperformancemanagementpor-tionoftheCompetenceManagementsystemprovidesacomprehensivetoolforsupervisors.Performanceappraisalsreviewanemployee’scompetenciesbasedontheemployeeself-appraisalsandroledescriptionsavailableinthesystem.Inaddition,thesystemoffersawaytoreviewthestrategicobjectivesandkeyindica-torslinkedtotheemployeeaswellastoupdatetheirjobdescriptionandcreateapersonaldevelopmentplan.
Work atmosphere matters Improvingtheworkatmosphereisoneofthemostimportantprocesseswerepeateveryyear.Thebestresultsareachievedwhentheworkatmo-sphereisgood.Wecollecttheper-sonnel’sviewsonworkorganization,supervisoryworkandotheraspectsaffectingworkatmosphereinallGroupcountriesonanannualbasis.Thedevelopmentprojectsidentifiedthroughtheworkatmospheresurveyhavebeenenteredintheoperationalplans.
towards better results Developmentofleadershipandsu-pervisoryskillssupportsachievementofourstrategicobjectives.Severaltrainingeventsonthistopicwereheldin2008bothattheGrouplevelandinOnninencountries.
Inthespring,allFinnishsupervi-sorsattendedatwo-daysupervisorcoachingclass,whichisorganizedeveryyear.
TheGroupSummitfortopmanage-mentwasheldinApril2008.
Long-term development of competence guarantees that business objectives can be reached. Results are produced by action, and action requires competence. Our key areas of concentration are efficient processes combined with ensuring competence that best serves our future.
personnel
new issue of Onninen’s working principlesTheOnninenWayguidesourworkthroughouttheGroup.TheOnninenWayreferstoourGroupvalues,ourcompetenceandallcommonobjec-tivesthathelpusachieveourgoals.TheOnninenWayisdemonstratedinallouractionsbothwithinthecompa-nyandwithcustomers,suppliersandotherinterestgroups.
ThethirdOnninenWaybrochure,describingtheOnninenwayofworking,waspublishedanddistrib-utedtothepersonnelinJanuary–February2008.ThenewOnninenWaybrochurehighlightsOnninen’sfourcustomersegmentsandourcus-tomerpromise.
peRSOnnel
39year 2008
continued development and new challenges in 2009Process-orientedoperationswillbestrengthenedintheGroupin2009.
Processstandardizationaimstoreinforceourbusinessfunctionsandimprovecompetitiveness.Improvingaprocess-orientedoperatingmethodrequiressolidprocessmanagementcompetence.ProcessmanagementistheonlywaytoachievetheGroup-levelcommonpractices.
Wewillcontinuetodevelopourcompetenceandperformancemanagementsystemfurtherin2009.TheSAPHRmanagementsystemwillbeimplementedintheGroupinFinlandandtheBalticcountries.Thedevelopmentofothergroup-wideHRprocesseswillcontinueaswell.
competence builds competitiveness
peRSOnnel
b u b o b u b o
responsibility
report 2008
The Onninen vision of responsibility 43
Expert article by Seppo Knuuttila:
Emissions reductions not yet seen in the state of the Baltic Sea 44
Responsibility is guided by Operating Systems 50
Financial Responsibility 52
Environmental Responsibility 53
Social Responsibility 58
Onninen RespOnsibility RepORt 2008
cOntent42 year 2008
43year 2008
In environmental issues, On-ninen wants to be a pioneer. Onninen has the prerequi-sites and will to bring up and promote the environmental aspects of products and services in a sustained man-ner. We seek new solutions actively and strive for innova-tions.
For Onninen, social responsi-bility means, above all, taking responsibility for its employees, their competence and well-being. Onninen should be a good place to work, with an atmosphere that is en-couraging and cultivating.
The Onninen Vision of Responsibility
The purpose of the respon-sibility report is to provide information on Onninen’s operations regarding financial, environmental and social responsibility in accordance with general practices. We publish our responsibility information openly as part of our Annual Report so that it is accessible for all our interest groups.
Onninen is expecTed to act responsibly in all its operations. We understand our respon-sibility towards our interest groups, and strive to meet their expectations through our actions. An interest group analysis is part of our re-sponsibility reporting. Three areas of responsibility are central at Onninen: economic, environmental and social responsibility.
As far as financial responsi-bility is concerned, Onninen considers profitable growth as the best practical form of bearing responsibility. Profit-able operations allow us to maintain and create jobs for both our own personnel and our commercial interest groups. We want to provide a picture of the company’s financial condition and the results of its financial opera-tions transparently.
44 year 2008
emissions Reductions not Yet seen in the state of The Baltic sea Seppo Knuuttila
iT has Been knOwn for decades already that there is an excessive nutrient load in the Baltic Sea. However, measures taken in the coastal states have not achieved the intended outcome, since the state of the Baltic Sea has not improved as ex-pected even though the load has already been clearly reduced. In November 2007, the ministers of the environ-ment of all Baltic Sea coastal countries accepted a new Baltic Sea Action Plan aimed at improving the state of the Baltic Sea by reducing eutro-phication and threats caused by hazardous substances and ship traffic. At the same time, the Plan will promote the biodiversity of the Baltic Sea environment. The Plan sets well-defined objectives for coastal countries of the Baltic Sea and determines those measures with which problems can be addressed and objectives met.
characteristics of the Baltic seaThe Baltic Sea is the second largest brackish water basin in the world. Its average salinity is approximately only 20% of the salinity of the oceans. In river deltas, the water is almost fresh. The Baltic Sea is shallow. Its average depth is approximately 55 meters and its maximum depth is 459 meters. In contrast, the average depth of the Mediterranean is 1,430 meters. The water in the Baltic Sea changes once in approximately 30 years, since the narrow and shallow Danish straits is the only connection the Baltic Sea has to the North Sea and the Atlantic Ocean. The water in the Baltic Sea is stratified ac-cording to the water salinity. Saline water from the North Sea is heavier, so it sinks to the bottom and flows into the depths. Close to the surface, there is less saline water that has been diluted by rainwater
• Was approved in a ministerial meeting on 15 November 2007.
• Covers the worst environmental problems of the Baltic Sea: eutrophication, chemical pollution of the marine environment, loss of biodiversity and threats caused by ship traffic.
• The objective is to restore the Baltic Sea to good ecological condition by 2021.
• Determines maximum limits for nutrient emissions into the Baltic Sea, and reduction obligations for the coastal countries.
• The computational load limit
for phosphorus is 21,000 tons, and 600,000 tons for nitrogen.
• Each Baltic Sea coastal country has maximum limits for nitrogen and phosphorus emissions, the review of country-specific reduction shares commences in 2009.
• Measures have to be taken before 2016 in order to achieve the reduction objectives by 2021.
• The present contracting parties to HELCOM are Finland, Sweden, Denmark, Germany, Poland, Lithuania, Latvia, Estonia, Russia and the EU.
HelcOM baltic sea actiOn plan (bsap)
and catchment water. The halocline located at the depth of approximately 80 meters separates water bodies with different salinity from one another and prevents efficient vertical mixing of the water. The water near the bottom can change only when saline water flows to the Baltic Sea from the North Sea, and this heavier water flows into the depths of the Baltic Sea. These events are called the major Baltic inflow. The major Baltic inflow is irregular and cannot be forecasted.
eutrophication is the most severe issueEutrophication is regarded as the worst problem of the Baltic Sea. This is basically due to the high nitrogen and phosphorus load from the catchment area. Nitrogen and phosphorus are the most important factors that have an impact on the eutrophy of the Baltic Sea. Adding these substances into the water
increases the number of primary producers in the sea (phytoplankton, macroalgae, and macrophytes). However, the blue-green algae blooms typical for the Baltic Sea are not an entirely new phenom-enon. Scientific literature includes descriptions of extensive blooms already in the late 19th century. Ac-cording to sediment observa-tions, blue-green algae have bloomed in the Baltic Sea in prehistoric times. The eu-trophication of the Baltic Sea actually commenced in the 20th century due to urbaniza-tion, industrialization, and the extensive use of chemical fertilizers in agriculture. As a result of human activi-ties, the nitrogen load of the Baltic Sea is estimated to have quadrupled in the 20th century, while the phospho-rus load multiplied eight-fold. Nowadays, approximately 85 million people live in the catchment area of the Baltic Sea.
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45year 2008
Picture 1: Blue-green algal blooms in the Baltic Sea in July 2005, captured by a NASA satellite (picture: NASA and Martin Hansson/SMHI).
Due to an increased nutrient load, algae production in the Baltic Sea has become more extensive. Once the algae mass has died, it sinks to the bottom of the sea and consumes all the oxygen while decomposing there. In oxygen-free conditions, the phosphorus bound to the bottom sediment is released, and it triggers new algae production. This leads to a self-feeding chain of events, known as internal loading, which causes eutrophication to progress at a faster pace.
Baltic sea oxygen-free bottom area in 1905 and 2005
Pictures 2 and 3: The Baltic Sea’s oxygen-free bottom areas in August 2006 (picture: Finnish Institute of Marine Research) and the surface area change of oxygen-free bottoms during the last 100 years (picture: Seppo Knuuttila).
Bottom oxygen concentration, august 2006
70.000
60.000
50.000
40.000
30.000
10.000
0
1905
km2
2005
ml/l
0 2
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46 year 2008
has there occurred a permanent change to the worse in the Baltic sea?It has been suggested that the Baltic Sea is already incurably ill, or that mending its condition requires efforts that would be financially and technically near impos-sible. Is it possible that the nutrient load and other use of the Baltic Sea have been so intensive for too long that the Baltic Sea has ended up in an unrecoverable vicious circle? According to a report published by the Swedish Environmental Management Council in February 2005, the ecosystem of the Baltic Sea might have entered a new balance state and remain in that “dead-bolt”. According to this dead-bolt hypoth-esis, reducing the nutrient emissions to the levels that existed 50 years earlier, for example, will not restore the Baltic Sea to the state it was in at that time. Achiev-
ing changes may require in addition to quick reductions in the nutrient emission levels methods that have an impact on the basic features of the Baltic Sea, such as artificial deep water oxida-tion. According to Finnish specialists, it is not certain that the hypothesis would be fully accurate. The slowness of the recovery in itself is not necessarily proof of a dead-bolt, but of the fact that most biological parameters react to environmental factors only after some time. In addition, the Baltic Sea also recovers naturally at a very slow pace due to its water body lag of almost 30 years.
where does the nutrient load of the Baltic sea come from?Yet in the early 21st cen-tury, approximately 900,000 tons of nitrogen and 31,000 tons of phosphorus have still ended up in the Baltic Sea each year. The largest
Blue-green algae benefits from phosphorusSome blue-green algae are able to replace the nitrogen nutrient that has run out of the water, by gaseous nitro-gen which has been dissolved from the atmosphere to the water. This means that the availability of phosphorus is the only chemical regulator for their growth. In com-parison to nitrogen, particu-larly in the main basin of the Baltic Sea and in the Gulf of Finland, the phosphorus levels in the water exceed the needs of the algae forming the spring bloom. Later in the summer, this surplus phos-phorus is an essential driving force for the formation of blue-green algae blooms.
The intensity of blue-green algae blooms has increased in the Gulf of Finland and in the main basin of the Baltic Sea since the late 1990s. The main reason for the bloom increase is the phosphorus
released from the oxygen-free bottoms of the Baltic Sea. Warm summers have boosted the occurrence of blooms as well. In the blue-green algae blooms in the Baltic Sea, there are both poisonous and non-poisonous blue-green algae species. The Nodularia spumigena blue-green alga (see picture 4), the dominant bloom species in the open seas, is always poisonous.
Picture 4: Blue-green algal bloom in eastern Gulf of Finland in August 2003, captured from the deck of Muikku, a SYKE research vessel (picture: Seppo Knuuttila).
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Germany
Sweden
Russia
Denmark
Finland
Estonia
Latvia
Lithuania
Poland
Picture 5: Country-specific annual average distribution of phosphorus and nitrogen loads from the catchment area into the Baltic Sea in 2001-2006 (pictures: Seppo Knuuttila).
Pictures 6 and 7: Direct riverine and point-source loads of phosphorus and nitrogen to the Baltic Sea. The maximum allowable loads sensu the Baltic Sea Action Plan are indicated in white (pictures: Seppo Knuuttila).
60,000
40,000
20,000
0
1,000,000
800,000
600,000
400,000
200,000
0
1990
19900 5 10 15 20% 25 30 35
2000
2000
2001- 2006
2001- 2006
1995
1995
1997- 2003
1997- 2003
2005
2005
2006
2006
2021- BSAP
2021- BSAP
Tons
Tons
Total phosphorusphosphorus and nitrogen loads by country
Total nitrogen
Phosphorus
Nitrogen
47year 2008
individual source is Poland, responsible for 34% of the phosphorus and 27% of the nitrogen entering the Baltic Sea. Approximately 25% of the entire Baltic Sea nitrogen load enters the sea as a de-posit from the air. This mainly comes from traffic, energy production, and agriculture. The currently rapidly grow-ing ship traffic on the Baltic Sea is the largest individual source of nitrogen from the air. The majority of nitrogen entering the Baltic Sea from land, along with rivers and direct emissions, comes from scattered loading, of which the proportion of agriculture is approximately 80%. Point load caused by wastewater is the largest source of phosphorus, and the majority, 90%, of the load comes from communities.
Picture 8: Chemical phosphorus removal at the largest wastewater treatment plants in St. Petersburg reduces the phosphorus load to the Gulf of Finland in a visible, quick and cost-efficient way. In the picture, the Central wastewater treatment plant, the largest in St. Petersburg. (picture: The John Nurminen Foundation)
Picture 10: Phosphorus load of St. Petersburg and the estimated change until 2012 once the wastewater treatment becomes more effective (picture: Seppo Knuuttila).
clamping down the largest emission sources would provide the best help to the Baltic seaIn the Gulf of Finland and the entire Baltic Sea, the City of St. Petersburg is clearly the largest individual source of phosphorus and nitrogen. Wastewater from St. Petersburg constitutes approximately 40% of the phosphorus load in the Gulf of Finland. Chemical phos-phorus removal currently
Picture 9: HELCOM’s Baltic Sea Action Plan, initial country-specific phosphorus (P) and nitrogen load (N) reduction objectives in tons, and percentages of the country’s total load for areas which the reduction requirement concerns (picture: HELCOM).
being implemented at the city’s three largest treat-ment plants as a cooperation project between the Finnish John Nurminen Foundation, the Finnish Ministry of the Environment, and the St. Petersburg waterworks, Vo-dokanal, is the most signifi-cant individual project with regard to the condition of the Baltic Sea. Once the project has been completed, the phosphorus load usable for algae in the Gulf of Finland
will be reduced by almost 30%. According to the Finnish Environment Institute (SYKE), this is the most cost-efficient and quick way to improve the condition of the open sea in the Gulf of Finland when comparing all possible water protection measures in Fin-land and Russia.
In May 2008, the John Nurminen Foundation and the Swedish Björn Carlson Baltic Sea 2020 foundation
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2,500
2,000
1,500
1,000
500
0
2004 2007 20092005 2008 2010 2012
Tons
Finlandp 150 (25%)n 1,200 (8%)
Swedenp 290 (34%)n 20,780 (29%)
Polandp 8,760 (64%)n 62,400 (29%)
Lithuaniap 880 (66%)n 11,750 (26%)
bot
hnia
n b
ay
bothnian sea
Gulf of Finland
Gulf of riga
bal
tic p
rope
r
Danish straits
Kattegat
Latviap 300 (19%)n 2,560 (25%)
Russiap 2,500 (37%)n 6,970 (8%)
Estoniap 220 (18%)n 900 (5%)
Germanyp 240 (45%)n 5,620 (27%)
Denmarkp 16 (31%)n 17,210 (30%)
phosphorus st. petersburgReduction objectives (tons/year)
48 year 2008
tHe baltic MaRine enviROnMent pROtectiOn cOMMissiOn, alsO knOwn as tHe Helsinki cOMMissiOn (HelcOM)
launched a joint project to boost and accelerate phos-phorus removal in Polish cities as well. The purpose of the project is to help selected Polish cities to reduce their annual phosphorus emission by a total of 1,000 tons. The measures implemented in Poland play a key role in the protection of the Baltic Sea, as almost half of the 85 mil-lion residents in the catch-ment area of the Baltic Sea live in Poland.
climate changeBaltic Sea researchers have carried out a BALTEX As-sessment of Climate Change (BACC) corresponding to the International Panel on Climate Change (IPCC) re-port. According to the BACC assessment, the climate in the Baltic Sea region will warm by 3–5 degrees Celsius during the next 100 years. It is estimated that sea water surface temperature will increase by 2–4 degrees
Celsius by the end of the cen-tury. In the decades to come, higher winter temperatures and increased rainfall will boost nutrient leaching into the Baltic Sea. In particular, this may result in more intensive eutrophication of coastal waters.
In addition to the nutrient leaching, more extensive winter floods might reduce the incidence of major Baltic inflow. This would dete-riorate the bottom oxygen conditions and harm the bottom communities. The increasing fresh water runoff might decrease the salinity of the surface layer of the Baltic Sea and intensify the natural stratification of the sea area, and this also promotes oxygen-free depths. Eutro-phication and blue-green algae blooms might intensify as a result of warmer sum-mers.
The futurePreventing eutrophication in the Baltic Sea is not pos-sible without substantial reductions in the major nutrient sources in the entire catchment area of the Baltic Sea. The quickest and most cost-efficient way of reducing the Baltic Sea nutrient load
would be to enforce stricter requirements in all coastal countries for city wastewa-ter treatment. If HELCOM’s Baltic Sea Action Plan recommendation concerning the wastewater treatment re-moval of 90% of the phospho-rus from communities with more than 10,000 residents
Picture 11: Climate change boosts nutrient leach from fields in particular. The picture shows the Vantaanjoki river in Finland in late fall in 2008 (picture: Seppo Knuuttila).
To implement the Helsinki Convention, the signing countries established the Baltic Marine Environment Protection Commission, that is, the Helsinki Commission (HELCOM). The present contracting parties to HELCOM are Finland, Sweden, Denmark, Germany, Poland, Lithuania, Latvia, Estonia, Russia and the EU. HELCOM is an intergovernmental organization for cooperation between all parties to the Convention and the European Community. In addition, a group of international intergovernmental organizations and voluntary civic organization participate in the Commission’s work as observers.
The Commission monitors how the Helsinki Convention is applied. The Commission unanimously adopts recommendations for the governments of the contracting parties. The application of the recommendations is reported on a regular basis. The Commission’s international Secretariat is based in Helsinki.
HELCOM has a protection plan that the countries in the catchment area of the Baltic Sea accepted as the Baltic Sea Joint Comprehensive Environmental Action Programme in 1992. The objective of the Programme is to restore the ecological balance of the Baltic Sea. The Programme
includes a 20-year investment scheme to restore the hot spots that pollute the Baltic Sea. By 2007, half of the hot spots had been restored and removed from the list. In addition, HELCOM accepted the Baltic Sea Action Plan in November 2007, the aim of which is to restore the Baltic Sea to good ecological condition by 2021.
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49year 2008
is achieved, the phosphorus load of the Baltic Sea would be reduced by almost 20%.
In the future, the EU’s ag-ricultural policy decisions will play a major role in the development of the condi-tion of the Baltic Sea. One such case includes the fact that Poland and the Baltic countries are now covered by the EU’s farming subsidy system will clearly increase the profitability of agriculture in aforementioned countries. This will clearly increase the volume of fertilizer used in comparison to the time be-fore their membership. The worst-case-scenario is that nitrogen and phosphorus vol-umes leaching into the Baltic Sea will increase. Around the Baltic Sea, the rise in the living standards of the new EU member countries and in Russia will increase the proportion of animal-sourced food in people’s diets. The increasing domestic animal
production requires culti-vated area expansion, which increases the leaching of nutrients, unless particular attention is paid to agriculture-related water protection measures at the same time.
Finnish marine researchers agree that the Baltic Sea has changed and that there can be no return to the “original” state it was in over a hundred years ago. They also agree that the progress of eutrophi-cation of the Baltic Sea can be stopped, but measures should be taken quickly. Joint actions by all of the coastal countries are required to change the condition of the Baltic Sea. In carrying them out, HELCOM’s Baltic Sea Action Plan (BSAP) plays a crucial role.
The Baltic Sea reacts to water protection measures after a lag, and recovering from the consequences of the decades-long intensive load
might be very slow. Local changes might take place quickly, but the recovery of the areas in the Baltic Proper and within the sphere of the largest sources of load might take decades.
The author of this article, Seppo Knuuttila, limnologist, works at the Marine Centre of the Finnish Environment Institute (SYKE). Marine research conducted by SYKE addresses the following topics: open seas and coastal waters, catchment areas, climate change, and socioeconomic issues. The Marine Centre is SYKE’s marine research unit, which produces new information about the sea and its condition, and which also uses research to estimate the efficiency of protection measures. Knuuttila is also responsible for HELCOM’s international-level Baltic Sea load reporting.
Picture 12: The Baltic Sea is not lost yet. Clear water and healthy bladderwrack (Fucus vesiculosus) growth in the outer archipelago of the Gulf of Finland off the City of Helsinki in autumn 2008 (picture: Seppo Knuuttila).
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50 year 2008
Responsibility is guided by Operating systems
The GROup Values, strategy, personnel, environmental, and risk management policies as well as Onninen Excellence quality thinking guide Onninen’s responsi-bility. In 2008, the Onninen vision of responsibility speci-fying the upcoming emphasis areas of responsibility was prepared. In 2008, the essen-tials were created according to the GRI (Global Reporting Initiative) recommendations, but reporting has not yet adopted the GRI model.
The Group Management Team has a key role also in terms of corporate respon-sibility. It leads the com-pany and is responsible for issues that include strategic planning, business develop-ment, finance, ICT systems, personnel development, communications, and legal matters. The Group Manage-ment Team has established a steering group for the corporate responsibil-
ity development program, which includes the President and CEO, CFO, Senior Vice President, Group Commu-nications, and Development Director.
Values and strategyThree values direct Onninen’s operations: “Working together”, “Respecting people”, and “Better than before”. Respon-sible activity is emphasized in each Onninen value.
“Working together” high-lights responsibility in relation to customers and suppliers. In accordance with this value, we work with the customer, take responsibility, and keep our promises. Mutual respect and openness to new ideas – responsibility towards employees and col-leagues – can be seen in the “Respecting people” value. The “Better than before” value emphasizes the need for responsible development. According to this value, we
commit to doing things better than before and commit to develop both ourselves and professional skills continu-ously.
The strategy identifies key issues as unify, improve, dif-ferentiate, renew, and boost. According to the strategy, we unify the group-wide way of working and establish a com-mon corporate culture. Im-provement involves increas-
ing productivity by using the Group’s core processes and functions. The strategy also emphasizes differentiation by renewing business concepts and brands. We renew and improve competences and ensure knowledge sharing. Boost refers to increasing growth through geographic expansion and acquisitions.
OpeRating systeMs
Personnel policy, Environmental policy, Risk management, Onninen Excellence,
Process and Function guidelines
Corporate Governance
Values and
strategy
OpeRating systeMs guide RespOnsibility
51year 2008
personnel policyThe core of our personnel policy is Onninen Way – the Onninen way of working. The Onninen way of working means Onninen values, the competence of the entire organization, and the com-mon operating methods and processes that help us achieve the business targets.
Personnel policy also includes employment issues, ethical guidelines, personnel devel-opment principles, leader-ship, reward, and induction. Personnel policy is supple-mented by local regulations and practices. The Social Responsibility section of this report addresses personnel issues in more detail.
environmental policyEnvironmental policy sets guidelines for responsible activities related to the envi-ronment. The aim of On-ninen’s environmental policy is to produce benefit for the
environment, customers, and suppliers. At this time, On-ninen’s functions in Finland, Sweden and Norway have the ISO 14001 environmental certificate. The Environmen-tal Responsibility section of this report has more infor-mation on the environmental policy and systems.
Risk managementOnninen Board of Directors approves Risk Management Policy and objectives of risk management and monitors planning and execution of risk management. Onninen Group’s risk management is based on the risk manage-ment principles of Onvest Group and Onninen Group’s Corporate Governance. The objectives of risk manage-ment are to ensure the fulfilment of Onninen Group’s customer promises, the improvement of shareholder value, sustainable profit-ability and the continuation of business. The ERM (Enter-
prise Risk Management) model has been implemented in risk management at the Group Management Team level since 2007. In 2008, the model was also introduced for the Management Teams in the operating countries so that the model is part of the regular management process. Risks will be evalu-ated by each Management Team twice a year.
Quality thinkingOnninen Excellence quality thinking directs the Group’s development work. The aim is to continuously improve the strategy, operations, and efficiency. In this way we strive to ensure the smooth flow of business, the ability to respond to market needs, and to provide our customers and suppliers with the best possible quality. Onninen Excellence combines the aspects of strategy, quality and continuous improve-ment: doing the right things
in the right way, and better than before. Onninen has an ISO 9001 quality certificate that covers all its operating countries and all functions. An annual self-evaluation by the management, based on the European Quality Award criteria (EFQM), is part of the management system.
OpeRating systeMs
52 year 2008
Financial Responsibility
pROFiTaBle OpeRaTiOns and growth are the best forms of bearing responsibility. Key figures from 2006–2008 describe the company’s abil-ity to operate in a financially efficient manner, handle re-sponsibilities to various inter-est groups, and secure the future. Other financial figures are available in the financial accounts.
distribution of well-beingDistribution of well-being pro-duced by Onninen is described according to interest group at the Group level. The major-ity goes to goods and service suppliers. The second largest share is for personnel.
Origin of purchasesThe countries of origin of On-ninen purchases can only be analyzed in terms of Finnish functions. Statistics have been compiled for warehouse and factory sales and on the basis of product weight and value.
Warehouse sales describe the flow of goods through On-ninen’s warehouse. In terms of weight, 44% of warehouse sales purchases are from Finland, while the corre-sponding figure for value is 55%. In terms of value, products produced in Europe account for 43%, with the corresponding figure for the rest of the world being 2%. There are approximately 50
countries of import, the larg-est of which are Germany, Sweden, and Italy.
In factory sales, goods are sent directly from the sup-plier to the customer without going through the Onninen warehouse. In terms of weight, 84% of factory sales purchases are from Finland, while the corresponding figure for value is 93%. The
Basic FiGuRes TO descRiBe Onninen Finances
(Onninen Group) 2008 2007 2006
Turnover (EUR million) 1,748.0 1,718.5 1,444.8
Profit before taxes (EUR million) 22.1 37.3 35.6
Profit before taxes (as % of turnover) 1.3 2.2 2.5
Return on investment (ROI) (%) 11.4 16.5 16.1
Equity ratio (%) 37.1 35.3 32.6
Turnover per employee (EUR thousand) 530 523 501
Profit per employee (EUR thousand) 3.9 8.1 9.1
disTRiBuTiOn OF well-BeinG aT Onninen GROupEUR million 2008 2007 2006
Owners 13 13 8
Goods and service suppliers 1,577 1,533 1,288
Suppliers of investment goods and corporate acquisitions
14 19 8
Personnel 99 100 86
Social security (pension expenses and other personnel costs)
24 25 21
Tax authorities (income tax) 9 11 10
ORIGIN OF PURCHASES IN FINNISH FUNCTIONS IN 2008(according to weight)
According to delivery country, %
According to production country, % (declared by the supplier)
Estimate converted to full trucks (trucks per year)
Estimate converted to full trucks (trucks per day)
warehouse sales
Asia, Oceania and America
2 2 80
Europe 54 54 3,417
Finland 44 44 2,788
Total volume in tons 157,100 6,285 25
Factory sales
Asia and Oceania 0 0
Europe 13 16
Finland 87 84
Total volume in tons 620,000 24,807 99
Total volume in tons 777,100 31,092 124
other 7% of value comes from Europe.
All in all, 70% of total pur-chases for Finnish functions came from Finland. However, there is always an element of uncertainty involved in speci-fying the origin of products, and therefore calculation methods of the degree of domestic origin have to be considered indicative.
Financial RespOnsibility
53year 2008
Onninen Takes caRe of the environment. Onninen’s environmental responsibility is divided into direct and indirect responsibility. Direct responsibility refers to the environmental impact caused by the Group’s functions. Indirect responsibility is related to the environmental impacts resulting from the lifecycle of the products sold.
Actions towards environmen-tal responsibility are primar-ily aimed at minimizing the impacts of the company’s operations. However, the goal in the future is to take a more in-depth approach to reducing the environmental impacts caused by various phases of the product chain, including product manufac-turing, purchase deliveries, and product use. Onninen’s target is to offer customers more solutions that support sustainable development.
environmental policy and environmental systemThe aim of Onninen’s environmental policy is to produce benefit for the environment, customers, and suppliers. The starting point for environmental policy is compliance with envi-ronmental legislation and regulations.
Onninen has signed the In-ternational Chamber of Com-merce’s Business Charter for Sustainable Development. This is used as the basis for developing environmental functions. Environmental policy emphasizes con-tinuous improvement in environmental issues and the important role that environ-mental management plays in the operating system.
Onninen’s functions in Fin-land, Sweden and Norway have a certified ISO 14001 environmental manage-ment system that covers
approximately 61% of Group personnel and 82,5% of turn-over. The goal is to certify all Onninen countries by the end of 2009.
Two important environmental aspects have been defined on a group-wide basis. These are areas that are very likely to have a negative impact on the environment. The focus is on reducing the landfill waste produced by Onninen to a minimum and minimizing the energy consumption of properties. In the future, the country units can choose 1–3 local environmental aspects to focus on if waste and energy issues are handled well. In 2008, all countries of operation adopted the Facility Guidelines that guide facility operations and reforms in a way that the environmental objectives can be achieved.
property functionsIn Finland Onninen has 42 properties in use, compris-
ing a total area of approxi-mately 131,300 m². Some of the properties are owned by Onvest Oy and leased to Onninen Oy, while others are leased from outside parties.
Consumption information for electricity and gas in 2008 is reported only for the Hyvinkää logistics center, the area of which totals 33,000 m² (in 2005–2006 the area was approximately 29,000 m²). The Hyvinkää logistics center utilized approximately 327,000 m³ of natural gas, which cor-responds to 3.27 GWh. Elec-tricity consumption was 3.70 GWh. Specific consumption was 99 kWh/m2 for gas and 112 kWh/ m2 for electricity.
Hyvinkää’s share of the total property area is too small to allow estimation of the total energy consumption of Onninen Finland’s functions. Consumption information for electricity in 2008 in Onninen Finland’s sites was 11,740 MWh.
environmental Responsibility
taking caRe OF enviROnMent at Onninen(Environmental Policy / ISO 14001)
Advantages to environment, customers and suppliers
• We support and advise customers to select environmentally sustainable solutions.
Development of environmental issues at Onninen Group
• We have subscribed International Chamber of Commerce’s Business Charter for Sustainable Development and use it as a basis of improvement.
• We are committed to continuous improvement in environmental performance.
• We want to raise Environmental management among the highest corporate priorities.
• We integrate Environmental management as a part of Operational Management System.
• We train and motivate continuously all the employees to conduct their activities in an environmentally responsible manner.
• We want to minimize emissions and waste in own activities and services.
• We want to take environmental aspects into account when selecting and evaluating suppliers and managing product assortment
Environmental laws and regulations
• We meet and exceed the requirements of environmental laws and regulations.
enviROnMental RespOnsibility
54 year 2008
This is approximately 3,7% lower than in previous year. The goal is to expand the compilation of statistics in 2009–2010 to cover all Group properties in Finland and other countries of operation.
Water consumption is not addressed in the report, because it is not considered to be a key figure in terms of Onninen’s operations.
TransportsAs a wholesaler, Onninen combines material flows. Some of the material flows come from the suppliers to Onninen’s distribution center, after which Onninen sends them on to the customer. Others are sent directly from the supplier to the customer under the guidance of Onninen but without going through the Onninen warehouse.
Each Onninen country has at least one distribution center. Transportation in all coun-
tries is mainly handled as road transports – in Finland train transport is used to a certain degree for regular deliveries between Helsinki and Oulu.
Onninen’s material flow in Finland comprises distribu-tion center, factory, and transit deliveries as well as deliveries to Onninen Express outlets and customer warehouses.
Factory deliveries mean that Onninen orders the goods directly from a supplier, who then sends them directly to the customer through own channels. The supplier packs the goods according to its standards and invoices On-ninen, who in turn invoices the end customer. Factory deliveries account for about 620,000 tons, or 80%, of the 777,100 ton total material
flow controlled by Onninen Finland. The total volume of factory deliveries, and thus all deliveries, is based on an estimate because accurate statistics concerning the tonnage of factory sales are not available. Large part of factory deliveries is mainly due to sales of raw material, like steel.
cOnsuMpTiOn OF elecTRiciTY and Gas aT hYVinkÄÄ lOGisTics cenTeR
Consumption 2008 2007 2006
Gas (m3) 327,000 344,000 365,000
Gas (GWh) 3.27 3.44 3.65
Specific consumption (kWh/m2) 99 104 126
Electricity (GWh) 3.70 3.49 3.15
Specific consumption (kWh/m2) 112 106 109
TRanspORTs FROM hYVinkÄÄ disTRiBuTiOn cenTeR and VanTaa waRehOuse and sTeel deliVeRies
2008 2007
160,650 tons 153,000 tons
463,050 m3 441,000 m3
10,539,500 km 9,850,000 km
65.6 km/tons 64.4 km/tons
22.8 km/m3 22.3 km/m3
caRBOn diOxide (cO2) eMissiOns OF caRsAverage CO2 emission* Finland (%) Sweden (%) Norway (%)
Less than 150 g/km 13,8 2,2 27,5
150–175 g/km 31,1 14,1 64,7
175–200 g/km 39,5 35,9 7,8
200–225 g/km 10,2 42,4
225–250 g/km 3,6 2,2
Over 250 g/km 1,8 3,2* Based on model-specific details supplied by the car manufacturers.
enviROnMental RespOnsibility
55year 2008
The Onninen Finland distri-bution center is located in Hyvinkää. The distribution center is the collection point for goods purchased by On-ninen from Finland and other countries. Either Onninen or the supplier handles pur-chase deliveries. Piece goods in the Contracting, Infra, and Industry customer segments are mainly concentrated in the Hyvinkää distribution cen-ter. Retailer products are in the Vantaa warehouse and in the Hyvinkää distribution cen-ter. Deliveries go to distribu-tion in a centralized manner from Hyvinkää. Onninen does not have its own distribution fleet; instead, distribution is handled by outside transpor-tation companies.
Onninen’s steel warehousing is concentrated in Finland. The Hyvinkää steel warehouse handles special steels that are mainly used for mechani-cal engineering. The Espoo Kilo steel warehouse handles
structural steel that is often used as parts for buildings and structures. These steel services will be concertrated to new Hattula steel service center during 2009.
These statistics describe the transports delivered from the Hyvinkää distribution center and the Vantaa warehouse and steel warehousing deliveries. Corresponding statistics for factory sales and purchase deliveries are not available at this time.
Onninen is involved in the European Commission’s Interaction project, which is aimed at reducing transport costs, energy consumption, and carbon dioxide emissions.
emissions to the airOnninen’s activities cause greenhouse gas emissions that affect climate change mainly as a result of the electricity and heat energy produced for properties and
fuel consumption used for transports.
Onninen is reporting on its energy consumption for the second time, and monitoring of consumption only covers some of the Finnish proper-ties and no international properties. For this reason, estimates have not been done for the emissions resulting from energy consumption of properties.
The emission calculation for transportation has com-menced. According to the calculation, carbon dioxide emissions in 2006 totaled 63kg of carbon dioxide per trans-ported metric ton-kilometer, 58kg of carbon dioxide per metric ton-kilometer in 2007, and 59kg of carbon diox-ide per transported metric ton-kilometer in 2008. This concerns transports from the Hyvinkää distribution center and the Vantaa warehouse and steel transportation. The
objective is to reduce carbon dioxide emissions through more effective transportation planning and cooperation with transport companies.
Compilation of emission data related to transportation has been started in Sweden and Norway, but there is no comprehensive information available yet to base calcula-tions on.
In Norway, Schenker and Tollpost Globe have compiled the required emissions cal-culations. Onninen Norway is in addition evaluating environmental performance of the suppliers. Onninen Norway is continuously trying to optimize transport network and increase usage of standard transportation systems if filling grade of trucks are low.
Regarding Finland, Sweden, Norway and Poland, data compilation for carrying out
packinG MaTeRial usaGe (kG)
Finland 2006 Finland 2007 Finland 2008 Sweden 2006* Sweden 2007* Sweden 2008* Norway 2006 Norway 2007* Norway 2008*
Wood fibers (cardboard boxes, paperboard etc.)
184,200 257,500 208,200 128,900 141,800 116,200 n/a 187,734 176,739
Plastic packages 68,300 71,600 73,400 8,900 9,570 5,300 n/a 12,3536 12,950
Metals 31,600 35,000 34,500 13,500 15,800 14,600 n/a n/a n/a
Glass 0 0 0 n/r n/r n/r n/a n/a n/a
Wood packages 58,800 66,300 55,200 n/r n/r n/r n/a n/r n/r
Other packages 0 0 0 n/r n/r n/r n/a n/a n/a
Total 342,900 430,400 371,300 n/a n/a n/a n/a n/a n/a
* Distribution center only n/a = not available n/r = not reported
enviROnMental RespOnsibility
56 year 2008
an emission calculation re-lated to passenger car com-muting has been launched. So far, detailed data in order to be able to implement a comprehensive calculation are unavailable. In Finland, Onninen Group has 167 cars, the average carbon dioxide emission level of which is 180g/km. There are 92 cars in Sweden, the average car-bon dioxide emission level of which is 199g/km. In Norway, there 51 cars, the average carbon dioxide emission level of which is 154g/km. The in-formation is based on model-specific details supplied by the car manufacturers.
Materials use and waste managementStatistics related to materials use and waste management focus on Onninen’s opera-tions in Finland, Sweden and Norway. Finland accounts for 49% of the Group’s turnover Sweden for 15% and Norway for 18% of the Group’s turnover.
The EU packaging directive and the corresponding Finn-ish legislation require that companies take responsibil-ity for recovery of packaging delivered to the domestic market. Onninen belongs to the Environmental Register of Packaging PYR Ltd and reports to this organization annually regarding the packaging materials and amounts of packaging used
by the company. Packaging material-specific recovery fees are charged on the basis of amount. Table below de-scribes weight of packaging and wrapping for products imported, packed, and pack-aged by Onninen Finland in 2006–2008.
The table also describes the use of materials by Onninen Sweden and Norway. The
table only covers the infor-mation of the distribution centers. Because the material amount used by Express outlets is relatively small, it can be said that these figures represent the overall use of materials. The information in Norway is based on the pack-aging material information supplied to the Grønt Punkt Norge company. Like PYR Oy in Finland, Grønt Punkt
GeneRaTed wasTe in disTRiBuTiOn cenTeRs (kG)Finland 2006 Finland 2007 Finland 2008 Sweden 2006 Sweden 2007 Sweden 2008 Norway 2006 Norway 2007 Norway 2008
Hazardous waste: 4,400 2,600 5,600 n/a n/a 6,500* n/a n/a 7,043*
Non-hazardous waste: 1,674,000 1,974,700 1,368,900 n/a n/a 377,170 n/a n/a 231,013
Mixed waste (= dumped waste)
153,800 165,600 172,400 n/a n/a 66,220 n/a n/a 4,118
Cardboard 86,400 91,100 101,100 n/a n/a 29,650 n/a n/a 78,050
Plastic see energy fraction
see energy fraction
see energy fraction
n/a n/a 4,600 n/a n/a 13,900
Wood 1,275,000 1,531,600 872,400 n/a n/a 224,000 n/a n/a 105,572
Metal 94,900 86,000 75,400 n/a n/a n/a n/a n/a 28,920
Paper 13,200 30,000 36,800 n/a n/a n/a n/a n/a 453
Energy fraction (waste that has been burned)
50,700 70,400 110,800 n/a n/a 52,700 n/a n/a 0
Total 1,678,400 1,977,300 1,374,500 n/a n/a n/a n/a n/a 238,056*The figure includes mainly electronic waste. It is treated by an external company so that after the treathment it is not hazardous waste. n/a = not available
enviROnMental RespOnsibility
57year 2008
Norge takes care of the utili-sation of packaging materi-als and the arrangement of recycling.
Onninen Finland handles its producer obligation to recov-er electrical and electronic waste through membership in the SELT Association. Onninen’s producer obliga-tion applies to products sold under its own brand names and to products imported by Onninen. Onninen pays SELT Association a recovery fee for products within the scope of the EU Directive (WEEE). This fee goes toward maintaining the recovery system for elec-tric and electronic waste.
Onninen Finland fulfills the producer responsibility of portable batteries and accu-mulators by being a member of the Recser Oy producer organization. Pursuant to the law enforced on September 2008, customers can now bring their portable batter-
ies and small accumulators to Onninen Express outlets. Recser Oy carries out the final processing.
The majority of Onninen’s waste results from ware-housing and distribution. The statistics describe the amounts of waste for the distribution centers in Finland, Sweden and Norway in 2006–2008. The statistics do not include the amount of waste from Express outlets, because not all of the infor-mation is available or clas-sification by different waste fraction is missing.
The waste statistics have been divided into the mixed waste, cardboard, plastics, wood, metal, paper, hazard-ous waste and energy frac-tion categories.
Waste volumes in Finland have increased in 2006–2007, but decreased in 2007–2008. The measurement method
for wood waste was fur-ther specified in 2008. This partially explains the fact that wood waste volumes have significantly decreased in comparison to previous years. With the exception of mixed waste, all other waste is recycled or recovered. The majority of wood waste is used for energy. Mixed waste accounts for 12.5% of waste and thus the waste utilization rate is 87.5%.
The table illustrates the amounts of scrap metal in the Hyvinkää and Espoo steel warehouses and the Hyvinkää delivery center in 2006–2008. In steel opera-tions and in delivery center scrap metal results from wastage that occurs when long goods are sawed into specific lengths for the cus-tomer and when downgraded pieces are rejected. Scrap metal is recycled.
aMOunTs OF scRap MeTal (TOns) aT hYVinkÄÄ and espOO sTeel waRehOuses and aT hYVinkÄÄ disTRiBuTiOn cenTeR
(Recycled) 2006 2007 2008
Espoo steel warehouse 45.7 81.8 48.7
Hyvinkää steel warehouse 558.5 740.6 841.3
Hyvinkää distribution center n/a n/a 99.8
Total 604.2 822.4 989.8n/a = not available
enviROnMental RespOnsibility
58 year 2008
Onninen wanTs to ensure the well-being of its personnel. Onninen’s social responsibil-ity is divided into direct and indirect responsibility. Direct responsibility is related to the company personnel and indi-rect responsibility to person-nel working elsewhere in the product chain.
Onninen Way – the Onninen way of working – guides all ac-tivities at Onninen. The Group’s personnel policy is part of the Onninen Way documentation.
The purpose of the Onninen Group’s personnel policy is that the company can find and keep competent and committed personnel. One of the goals is for personnel to implement the business strategy according to Onninen way of working. The foundation of company success is the Group’s combination of competence, operating meth-od, and efficient processes.
The principles of Onninen’s personnel policy include, for example, development-related issues.
Every Onninen employee is responsible for active self-development. Supervisors are responsible for making self-development possible. The company’s part is to offer opportunities for development.
Supervisors play an essential role in ensuring development work. Supervisors are respon-sible for creating, maintain-ing, and developing efficiency and a target-oriented attitude amongst their personnel. For example, this means opportuni-ties for study, wellbeing, and incentives. Goal and develop-ment discussions are a key part of communication between employees and supervisors.
social Responsibility
nuMBeR OF peRsOnnel aT The end OF The YeaR2008 2007 2006
Number of personnel 3,210 3,304 2,984
Management 82 (3%) 87 (3%) 60 (2%)
White collar 2,252 (70%) 2,365 (71%) 2,178 (73%)
Blue collar 876 (27%) 852 (26%) 746 (25%)
peRsOnnel expenses, euR MilliOn2008 2007 2006
Wages and salaries 99.2 99.7 85.6
Pension expenses 12.0 11.5 10.1
Other personnel costs 12.2 13.2 11.2
GendeR disTRiBuTiOn OF peRsOnnel aT The end OF The YeaR (%)Male 75
Female 25
Men in management 83
Women in management 17
aVeRaGe YeaRs OF seRVice OF peRsOnnel and aVeRaGe aGe
Finland Sweden Norway Poland Russia Estonia Latvia Lithuania Group functions
Average years of service 10 8 8 3 3 4 4 3 8
Average age 44 44 45 33 32 35 38 30 43
peRsOnnel BY ORGanizaTiOn aT The end OF The YeaR2008 2007 2006
Finland 1,139 1,179 1,036
Sweden 351 458 447
Norway 418 433 401
Poland 740 635 555
Russia 262 307 310
Estonia 105 142 115
Latvia 66 76 61
Lithuania 68 74 59
Group functions 61 n/a n/a
Total 3,210 3,304 2,984
n/a = not available
sOcial RespOnsibility
JOB saTisFacTiOn in JOB saTisFacTiOn suRVeYscale 1–5
Satisfaction with internal communications
Satisfaction with management
2006 2007 2008
Overall satisfaction
3
3,5
4
59year 2008
educaTiOnal BackGROund OF peRsOnnel2008 % 2007 % 2006 %
Primary 615 19 498 15 567 19
Secondary 1,881 59 2,092 63 1,731 58
Higher education 714 22 714 22 686 23
educaTiOnal BackGROund OF peRsOnnel BY ORGanizaTiOn (2008)Finland Sweden Norway Poland Russia Estonia Latvia Lithuania Group functions Total
Primary 430 0 50 115 0 7 7 3 3 615
Secondary 643 309 309 413 113 25 27 9 33 1,881
Higher education 66 42 59 212 149 73 32 56 25 714
Total 1,139 351 418 740 262 105 66 68 61 3,210
disTRiBuTiOn OF eMplOYMenT (peRManenT and TeMpORaRY) Finland Sweden Norway Poland Russia Estonia Latvia Lithuania Group functions Total
Permanent employment positions
1,055 335 388 530 262 105 66 68 59 2,868
Temporary employment positions
84 16 30 210 0 0 0 0 2 342
Total 1,139 351 418 740 262 105 66 68 61 3,210
peRsOnnel TuRnOVeR (%) in cOMpaRisOn wiTh nuMBeR OF peRsOnnel Jan. 1, 2008Finland Sweden* Norway Poland Russia Estonia Latvia Lithuania Group functions Total
Personnel turnover 21.4 29.7 14.1 23.5 71.1 20.7 26.4 30.4 11.4 27.0
* in comparison with number of personnel Dec. 31, 2007
Job satisfactionOnninen measures personnel satisfaction on a group-wide basis annually. The score for overall satisfaction in 2006–2008 has been approxi-mately 3.5 (on a scale of 1–5). In addition to overall satisfac-tion, separate indicators are used to measure manage-ment and internal communi-cations. All indicators have
developed in a similar direc-tion in 2006–2008.
In 2008 overall satisfaction in the countries of operation varied between 3.54 (Finland) and 3.95 (Sweden). Overall satisfaction improved in nearly all the countries from 2007 to 2008. Satisfaction with management was higher than satisfaction with internal
communications in all the countries. The best individual areas were satisfaction with management (4.30) in Nor-way, Poland, Estonia, Latvia and Lithuania. The greatest need for development was in satisfaction with internal communications in Finland (3.45) and Latvia (3.52).
employmentAs of December 31, 2008 On-ninen employed 3,210 people.The largest employer was Finland, followed by Poland. The number of personnel decreased from 2007.
The majority of employment relationships were permanent. The percentage of temporary employment relationships was highest in Poland, 72%.
All employment relationships in Russia, Estonia, Latvia and Lithuania were permanent.
Employee turnover was 27% in 2008. Employee turnover was calculated by compar-ing the number of people that left the company in 2008 with the number of personnel on January 1, 2008.
The incidence of sickness is described on a general level.The average weighted value for sick leave in the Group was 5.21% (hours of absence/ all working hours).
aGe disTRiBuTiOn OF peRsOnnel dec. 31, 2008 (YeaRs)
0
200
400
600
800
65- 60-6450-5940-4930-3920-29-20
sOcial RespOnsibility
61year 2008
REPORT BY THE BOARD OF DIRECTORSOperating environment and market trendsThe international financial crisis expanded into an economic crisis with a significant impact on the operations of businesses. Financing became more difficult and the price of money increased significantly. The confidence indicators of companies and consumers went down, consumers’ behavior changed, and the volume of the housing market declined. The negative impacts were clearly visible in the businesses’ operations during the last months of the year. At the same time, the outlook for 2009 became very uncertain as the overall willingness and ability to invest fell sharply.
The operations were also strongly affected by the development of exchange rates. The Swedish krona and Norwegian krone weakened significantly during the last months of the year. The Polish zloty also weakened rapidly after experiencing significant strengthening during the first half of the year. The Russian ruble was significantly devalued during the last months of the year as the Russian Central Bank widened the trading band of the ruble several times. As the economies in the Baltic countries weakened, their currencies experienced notable weakening pressure but they managed to retain their values against the euro.
In Finland, new building volume decreased slightly in 2008 from the previous year. The market for construction-related heating and plumbing, ventilation, and electrical installation supplies had a total value of approximately EUR 1.9 billion. The market grew by 10%. Within the market, the wholesale market for heating and plumbing grew by 3%, the wholesale market for ventilation products by nearly 6%, and the wholesale market for electrical supplies by 4%. The goods export in Finland was at the 2007 level and the growth in investments was minor. Demand for industrial and infrastructure products, especially steel and electrical products, remained satisfactory. Onninen Finland’s operations showed satisfactory growth in the first half of the year. Onninen’s market shares remained practically at the same level as the previous year.
In Sweden, economic development was modest. Demand in the heating and plumbing sector declined slightly but grew somewhat in the electrical wholesale sector. In the electrical sector in Sweden, Onninen sells electrical grid products. The market share in electrical grid products increased.
In Norway, economic development was the best among the Nordic countries, but still below the previous years’ figures. Demand for electrical installation products grew by nearly 5% from the previous year. Onninen’s market position remained approximately the same.
In Poland, the growth of national economy was still at a high level in 2008 and demand for installation products was good. However, demand fell sharply at the end of the year. Demand for electrical products did not increase much, and the growth in heating and plumbing products was approximately 10%.
In Russia, economic growth continued, construction was brisk, and demand for building technology products remained high all the way to the third quarter. According to estimates, the market growth of heating, plumbing, ventilation and electrical products was in the range of 10%. The economic situation and operating environment for businesses in Russia became dramatically more difficult towards the end of the year due to the 20% devaluation of the ruble. Consequently, planned projects were canceled and construction projects already underway were suspended during the last months of the year.
The markets in the construction sector practically came to a standstill in all Baltic countries and then turned downward. The market for heating, plumbing, ventilation and electrical products shrank by 10–20%, depending on product areas.
Jan. 1–Dec. 31, 2008
62 year 2008
Events in the financial year The Group’s ERP implementation plan was changed and the schedule delayed during the financial year. The plan is to implement a new ERP system first in the Baltic countries early in the fall of 2009 and in Finland at the beginning of 2010. The development of a Group-wide ICT infrastructure was nearly completed and rolling it out to the Onninen countries began.
Onninen’s own product brands, Onnline and OPAL, which are key to the business operations, were developed further; the Express chain serving the company’s customer base was developed; and chain brands aimed at the company’s own customers were strengthened. These include the Elfin and Elfag electricity chains in Finland and Norway and the Hanakat chain in Finland.
The structure of the new steel warehousing and delivery center of Onninen Finland in Hattula was finished in the autumn of 2008. The building, owned by Onvest Oy, will be completed in the summer of 2009. New Express outlets were opened in Porvoo and Konala during the financial year. The Express outlets in Herttoniemi in Helsinki and Petikko in Vantaa were closed. At the end of the financial year, Onninen had 43 outlets in Finland. As part of the result improvement program, the organization of Onninen Sweden was significantly reduced. After the closing of two outlets during the financial year, Onninen has 19 outlets in Sweden.
The planning of a new distribution center and headquarters to replace the current one in Oslo Gjelleråsen was started during the year. The new distribution center, located in the Berger industrial area in Oslo, will be opened during 2010. Onninen Norway has 32 outlets.
The expansion of the Lodz distribution center was opened in Poland, nearly doubling the capacity of the distribution center. Four new outlets were opened in Poland, bringing the number of outlets there to 35 at the end of the year.
The operations in Russia were extremely challenging, in particular during the latter half of the year. As part of an operations adjustment, four outlets were closed, bringing the number of Onninen outlets in Russia to six. A new logistics center is being planned in Kaluga near Moscow, and Onvest Oy acquired a lot for it.
In the Baltic countries, the previously launched plans to develop distribution centers were delayed due to the changed market situation. A new Express was opened in Siauliai, Lithuania, where Onninen already had a sales office; and the Johvi Express in Estonia relocated to a new facility. The number of outlets in the Baltic countries is 17.
A sourcing office was established in Shanghai, China. The purpose of the office is to seek new supply sources and to carry out supplier audits and delivery monitoring. At the end of the year, the office employed four people.
REPORT BY THE BOARD OF DIRECTORS
63year 2008
Turnover, EUR million2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
02004 20062005 2007 2008
1,1501,259
1,445
1,719 1,748
Group structureOnninen Oy’s wholly owned subsidiaries are Onninen AB in Sweden, Onninen AS in Norway, Onninen Sp. z o.o. in Poland, OOO Onninen in Russia, AS Onninen and Teletekno Balti AS in Estonia, SIA Onninen in Latvia, and UAB Onninen in Lithuania. Onninen AS owns the Norwegian company Teletekno AS.
TurnoverThe Group’s turnover was EUR 1,748.0 million, showing growth of 1.7%.
Distribution of turnover (EUR million):
2008 2007
Change %
2007 - 2008 2006
Onninen Finland 864.2 826.9 4.5 705.8
Onninen Sweden 268.3 300.3 -10.7 249.7Onninen Norway 310.2 319.4 -2.9 266.6
Onninen Poland 162.7 137.6 18.2 112.2
Onninen Russia 67.3 57.1 17.8 48.9
Onninen Baltics 75.4 77.1 -2.2 61.6
Total 1,748.0 1,718.5 1.7 1,444.8
Onninen Finland’s growth in turnover concentrated on the Industry and Infra segments, where volume increased by 25% over the previous year. The turnover of the Contractors segment decreased slightly.
Onninen Sweden’s turnover in the Industry and Infra segments increased slightly. The turnover in the Contractors segment decreased by about a quarter. In Norway, the Industry segment grew markedly, but the turnover of the Contractors segment decreased slightly.
The turnover in euros of both Onninen Sweden and Onninen Norway was reduced due to the significant decrease in the value of the currencies during the last months of the year. The turnover in Swedish kronas decreased by 7.2%, and the turnover in Norwegian krones decreased by 0.4%. The growth in turnover in Poland was boosted by the increased value of the zloty during the first half of the year. The turnover in zlotys increased by 10.0%.
International operations accounted for 50.6% of the Group’s turnover.
Distribution of turnover, %
Finland
Sweden
Norway
Poland
RussiaBaltics
49
15
18
9
44
REPORT BY THE BOARD OF DIRECTORS
64 year 2008
Operating profit before amortization of goodwill (EBITA), EUR million
60
50
40
30
20
10
02004 20062005 2007 2008
38
34
44
50
36
Distribution of operating profit according to Group’s management accounting (EUR million):
2008 2007 2006
Onninen Finland 39.3 41.8 39.6
Onninen Sweden 0.2 0.4 2.0Onninen Norway 6.1 14.5 6.6Onninen Poland -0.5 1.1 0.6Onninen Russia -3.4 -2.1 0.2Onninen Baltics -0.9 0.4 1.3Group items * -11.9 -12.7 -10.3Total 28.9 43.4 40.0
* the item includes undivided expenses, amortization of goodwill, and capital gains and losses
Profitability indicators:2008 2007 2006
Operating profit before amortization of goodwill (EBITA), EUR million 35.8 50.4 44.2
- as percentage of turnover, % 2.0 2.9 3.1Operating profit, EUR million 28.9 43.4 40.0- as percentage of turnover, % 1.7 2.5 2.8Profit before taxes, EUR million 22.1 37.3 35.6Profit for the financial year, EUR million 12.8 26.5 26.2Return on investment, % 11.4 16.5 16.1Return on equity, % 8.0 16.9 18.6
Financial result The Group’s operating profit amounted to EUR 28.9 million. Operating profit relative to turnover was 1.7%. The Group’s operating profit before amortization of goodwill (EBITA) was EUR 35.8 million, or 2.0% relative to turnover.
Profit before taxes totaled EUR 22.1 million. The profit for the financial year was EUR 12.8 million. Return on investment was 11.4%, and return on equity was 8.0%.
Operating profit (EBIT), EUR million50
40
30
20
10
02004 20062005 2007 2008
33
29
40
43
29
Onninen Finland’s operating profit remained at a moderate level despite the weakening of the market situation during the year.
Onninen Sweden’s operating profit stayed at the previous year’s level. Measures taken at the beginning of the year, however, had a positive impact and the latter half of the year was essentially better than the previous year.
Onninen Norway’s operating profit weakened but still stayed at a satisfactory level.
Onninen Poland’s operating profit decreased from the previous year and was slightly negative. Expenses were increased by, among other things, the opening of the distribution center expansion and start-up costs of new outlets.
Onninen Russia’s operating profit weakened and remained negative. The result was burdened by the closing of outlets and the extensive exchange rate losses due to accounts payable at the end of the year. The corrective measures taken at the end of the previous year did not manage to turn result positive.
Onninen Baltics’ operating profit decreased from the previous year and was slightly negative. Considering the rapid changes in the market situation, the result was nevertheless moderate.
REPORT BY THE BOARD OF DIRECTORS
65year 2008
FinancingThe Group’s equity ratio was 37.1%. Net financing expenses amounted to EUR 6.8 million.
The total of interest-bearing liabilities was EUR 99.3 million, which represented a decrease of EUR 17.2 million during the year. Loans taken from Onvest Group companies increased by EUR 3.0 million. Other loans decreased by EUR 20.2 million during the year. The effect of exchange rates’ changes to the decrease of the loan volume was EUR 9.9 million and installment of the loans was EUR 7.3 million. The amount of loans decreased essentially in Norway and Sweden.
Of the Group’s interest-bearing liabilities, EUR 54.8 million consists of internal financing by the Onvest Group, and EUR 44.5 million consists of non-Group financing. The terms of the Onvest Group’s financing are market-based. The interest rate of Group loans is based on the reference rate for the currency in question, plus an agreed margin. Correspondingly, the interest paid on Onvest Oy’s Group deposits has been agreed on.
Onninen Oy’s loans are denominated in the euro. The foreign subsidiaries’ loans have mostly been taken out in the local currency. Of the Group’s loans, 31.5% are in the euro, 26.5% in the Norwegian krone, 17.7% in the Polish zloty, 7.7% in the Swedish krona, and 7.2% in the Russian ruble.
Each of the eight Group countries uses a different currency. Due to the nature of the business, the operations of the Group companies are mainly local. A currency risk may arise from the mutual debts of the Group companies and from currency payments from goods imports. Currency payments for imports are quite moderate as a considerable amount of the imports is paid for in the local currency of the company in question.
InvestmentsThe Group’s investments totaled EUR 14.3 million. The majority of this amount, or EUR 8.2 million, was used for the acquisition of a new ERP system. Other investments, amounting to EUR 6.1 million, consisted primarily of purchases of equipment furnishings for the distribution centers and sales outlets. Furthermore, EUR 2.5 million was used to lease machinery and equipment to the steel center in Hattula.
Premises The Group companies operate in leased premises. Most of the premises used by Onninen Finland have been leased from Onvest Oy. The distribution center property located in Örebro, Sweden, is owned by Onvest Sverige. In Poland, Onninen has leased the distribution center property located in Lodz from Onvest Polska. The lease agreements with Onvest are market-based and 3–10 years in duration.
Other premises in Finland and abroad have been leased from non-Group parties by normal lease agreements of varying duration.
Financing indicators:2008 2007 2006
Equity ratio, % 37.1 35.3 32.6
Net financing expenses, EUR million 6.8 6.0 4.3 - as percentage of turnover, % -0.4 -0.4 -0.3
Equity ratio, %40
35
30
25
20
15
10
5
02004 20062005 2007 2008
33.4
32.0 32.6
35.337.1
Return on investment (ROI), %18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.02004 20062005 2007 2008
15.4
12.8
16.1 16.5
11.4
REPORT BY THE BOARD OF DIRECTORS
66 year 2008
Research and developmentOnninen is a service company with Sales, Sourcing, and Logistics as the core processes of business well as efficient ICT to support these processes. Development projects are in progress in all these areas in the Group. Research and development projects focus on the development of ICT, centralizing of sourcing, and bringing chain and service brands into commercial production.
In accordance with the nature of wholesale business, i.e., supplying products and related information, the products Onninen sells to its customers are, as a rule, manufactured by its suppliers or by their subcontractors. Research or development activities related to the products sold do not have a central role in the company’s operations.
Quality and the environmentThe standardization of the Group’s operational systems proceeded on schedule, and Norway adopted the ISO 14001 environmental system. Lloyd’s Register of Quality Assurance (LRQA) certified the system at the end of the year. In Poland, the Baltic countries, and Russia, the setting up of the environmental system proceeded systematically. The plan is to bring these countries under the coverage of the ISO 14001 certificate during 2009 as well. Reporting on corporate responsibility was developed in accordance with the international Global Reporting Initiative (GRI) model. Management self-evaluation continued as part of the strategy process. A customized evaluation model derived from the criteria provided by the European Foundation for Quality Management was developed for Onninen, and it was applied in the self-evaluation of the Group’s management team and country management teams. Risk management was expanded, and a risk assessment was carried out in all countries as part of the operations planning for 2009.
Key risks and risk managementRisk management is a systematic procedure for ensuring the comprehensive and appropriate identification, assessment, management, and monitoring of risks throughout the Group. It is an integral part of Onninen’s planning and management system, decision-making, and daily management, as well as monitoring and reporting.
The risk management system at Onninen generates information on the identified risks, their possible financial impacts, and the status of preventive and mitigating measures.The Group has a Risk Management Policy in place, approved by the Onninen Oy Board of Directors. The Board supervises and monitors the planning and execution of risk management. In accordance with the ERM (Enterprise Risk Management) used by Onninen, the Onninen management team evaluates the risks on a regular basis.
The sharp decline of demand in several sectors that started with the international finance crisis will affect Onninen’s business operations significantly as well. Onninen has launched measures to gain cost savings in all countries in order to adjust the operations to the declining level of demand.
Onninen’s business operations are based on reliable ICT that supports the operations. Risks related to the functioning and availability of ICT are managed by planning the continuity of the existing ICT solutions and by applying backup solutions. Risks are also controlled by efficient testing and quality control of new solutions and by the selection of ICT partners who develop and supply
REPORT BY THE BOARD OF DIRECTORS
67year 2008
the solutions, as well as effective management of cooperation. In the further development of the Group’s new ERP system, special attention is given to the applicability, reliability, and continuity of the system in both the short term and long term.
Typical risks in the industry include potential malfunctions due to changes in the logistical systems. These risks are managed by utilizing the company’s operational models and experience in logistical change management such as opening new distribution centers.
Raw material price changes and availability of products may also have a negative effect on the sector by weakening the results of companies. Customer and supplier agreements are often long-term and thus form their own risk component.
Due to the nature of Onninen’s business operations, the biggest balance sheet items are accounts receivable and inventories. Credit loss risk related to accounts receivable is managed by means of a standardized credit policy and efficient collection procedures. The management of credit loss risk has been intensified due to the change in the economic climate.
PersonnelThe Group’s average number of personnel in 2008 was 3,298.
The country organizations with business responsibility employed an average of 3,240 people during the year, and the Group functions employed a total of 58 people.
Personnel development and distribution by country (as an annual average):
2008 2007 2006
Finland 1,193 1,190 1,050
Sweden 400 458 424Norway 404 423 376
Poland 711 600 540
Russia 307 325 271
Baltic countries 283 287 220
Total 3,298 3,283 2,881
Wages and salaries (EUR million):2008 2007 2006
Wages and salaries 99.2 99.7 85.6
Personnel at end of year3,500
3,000
2,500
2,000
1,500
1,000
500
02004 20062005 2007 2008
2,6522,750
2,984
3,304 3,210
Personnel by country at end of year 20081,400
1,200
1,000
800
600
400
200
0
Fin
land
Sw
eden
Nor
way
Pol
and
Rus
sia
Est
onia
Lat
via
Lith
uani
a
68
1,184
351420
740
253
12866
The key tasks of the personnel function during the financial year included the maintenance and development of a competence management system. The system allows for managing competence and supporting competence development: comparing existing competencies to those needed enables us to identify development needs. The competence management system is in place in all Onninen countries.
Improving the work atmosphere is an ongoing task at Onninen. A survey mapping work atmosphere was conducted during the year, and improvement measures by company and by unit were implemented on the basis of the survey.
The third Onninen Way brochure, describing the Onninen way of working for 2008–2010, was published and distributed to the personnel at the beginning of 2008.
REPORT BY THE BOARD OF DIRECTORS
68 year 2008
AdministrationMaarit Toivanen-Koivisto, Vuorineuvos, served as the Chair of the Board of Directors of the company. The Members of the Board were Eero Eloranta, Professor; Karsten Slotte, CEO; and Juha Järvinen, M.Sc. (Econ.).
Harri Sivula, M.Sc. (Admin.) served as President and CEO, and Tuomo Väänänen, M.Sc. (Eng.) as First Executive Vice President.
The company’s auditor is Ernst & Young Oy, a KHT Audit Firm, with Pekka Luoma, Authorized Public Accountant, as the designated auditor.
Share capital and shareholdersOnninen Oy’s share capital is EUR 20.0 million. The company has 10,000,000 shares, all of which are owned by Onvest Oy.
Outlook for 2009The economic outlook for 2009 is very uncertain. Demand in the Onninen product areas in all Onninen markets will be markedly lower than in 2008. It is forecast that a turn towards a more positive outlook will take place in 2010 at the earliest.
The situation is very similar in all Onninen countries. The operations are particularly challenging in Russia where the lowered price of oil intensifies the impact of the economic crisis, as well as in the Baltic countries where construction activities in particular have crashed. The uncertainty in exchange rates will also continue in 2009.
Of the construction sectors, the Infra sector has a slightly more positive outlook than the others. Governments in different countries will launch various economic stimulus packages to alleviate the impacts of recession.
Due to the weak economic outlook, Onninen’s turnover for 2009 is expected to decrease in all Onninen countries. Turnover in euros is also reduced by the estimated exchange rate level of Onninen’s central currencies compared to 2008.
Adjustment measures have been launched in all Onninen countries, reducing the number of employees and closing unprofitable outlets. Cost savings will be realized gradually during the year.
The Group’s net profit is estimated to remain below the 2008 level.
REPORT BY THE BOARD OF DIRECTORS
69year 2008 COnSOlIDATED PROFIT AnD lOSS ACCOunT
EuR million note Jan. 1-Dec. 31, 2008 % Jan. 1-Dec. 31, 2007 %
Turnover 2.1. 1,748.0 100.0 1,718.5 100.0
Other operating income 2.2. 0.2 1.9
Materials and services 2.3. 1,427.2 1,397.8
Personnel expenses 2.4. 123.5 124.4Depreciation 19.1 19.8Other operating expenses 2.5. 149.6 135.0Operating profit 28.9 1.7 43.4 2.5 Financial income and expenses 2.7.
Interest and similar incomeFrom Group companies 0.0 0.0From others 1.6 1.6
Interest and similar expensesTo Group companies -3.5 -3.6
To others -4.9 -6.8 -4.1 -6.1
Profit before taxes 22.1 1.3 37.3 2.2
Direct taxes 2.9. -9.3 -10.8
Group profit for the year 12.8 0.7 26.5 1.5
70 year 2008COnSOlIDATED BAlAnCE SHEET
EuR million note Dec. 31, 2008 Dec. 31, 2007
ASSETS
Fixed and other long-term assets 3.1.Intangible assets
Intangible rights 1.6 2.5Goodwill 0.0 0.3Group goodwill 18.8 27.5Other long-term assets 1.6 7.3Advance payments 8.8 30.8 0.7 38.3
Tangible assetsBuildings 0.4 0.5Machinery and equipment 14.1 16.5Advance payments and construction in progress 1.4 15.9 0.1 17.1
Financial investmentsShares in affiliated companies 0.3 0.4
Other shares and holdings 0.2 0.4 0.2 0.6
Current assetsInventories 3.2. 201.9 203.2Receivables 3.3.
Long-termLoans receivable 0.3 0.8
Deferred tax receivable 1.9 2.8
Short-term
Accounts receivable 137.0 170.8Receivables from Group companies 1.3 1.1Loans receivable 0.0 0.0Other receivables 3.1 4.3Deferred receivables 23.5 165.0 26.5 202.7
Cash and bank deposits 2.6 1.9
418.8 467.4
71year 2008
EuR million note Dec. 31, 2008 Dec. 31, 2007
ASSETS
Fixed and other long-term assets 3.1.Intangible assets
Intangible rights 1.6 2.5Goodwill 0.0 0.3Group goodwill 18.8 27.5Other long-term assets 1.6 7.3Advance payments 8.8 30.8 0.7 38.3
Tangible assetsBuildings 0.4 0.5Machinery and equipment 14.1 16.5Advance payments and construction in progress 1.4 15.9 0.1 17.1
Financial investmentsShares in affiliated companies 0.3 0.4
Other shares and holdings 0.2 0.4 0.2 0.6
Current assetsInventories 3.2. 201.9 203.2Receivables 3.3.
Long-termLoans receivable 0.3 0.8
Deferred tax receivable 1.9 2.8
Short-term
Accounts receivable 137.0 170.8Receivables from Group companies 1.3 1.1Loans receivable 0.0 0.0Other receivables 3.1 4.3Deferred receivables 23.5 165.0 26.5 202.7
Cash and bank deposits 2.6 1.9
418.8 467.4
COnSOlIDATED BAlAnCE SHEET
EuR million note Dec. 31, 2008 Dec. 31, 2007
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 3.4.Share capital 20.0 20.0Share premium account 35.1 35.1Other reserves 0.1 0.1Retained earnings 86.8 82.7Profit for the year 12.8 154.8 26.5 164.4
Statutory provisions 3.5. 2.2 2.5
LiablitiesDeferred tax liability 0.6 1.1Long-term liabilities 3.6.
Loans from financial institutions 17.9 32.5Payables to Group companies 36.2 14.6Other long-term liabilities 0.1 54.2 0.1 47.2
Short-term liabilities 3.7.Loans from financial institutions 26.5 31.7Advances received 1.7 1.8Accounts payable 113.9 124.4Payables to Group companies 18.6 37.3Other short-term liabilities 17.0 24.9Deferred payables 29.2 207.0 32.1 252.2
418.8 467.4
72 year 2008CASH FlOw STATEmEnTS
GROuP PAREnT COmPAnY
EuR million 2008 2007 2008 2007
Cash flow from operations
Operating profit 28.9 43.4 31.6 31.8Depreciation 19.1 19.8 9.3 8.7Other adjustments -0.3 -0.5 0.0 -0.5Cash flow before change in working capital 47.7 62.7 40.9 40.0
Change in working capital:
Change in non-interest-bearing receivables 16.9 9.4 7.3 1.9Change in inventories -15.5 -11.7 -17.4 -9.4Change in non-interest-bearing liabilities -2.1 -13.2 5.6 -9.4Cash flow before financial items and taxes 47.0 47.1 36.3 23.1
Cash flow from financial expenses -8.9 -7.8 -2.7 -1.9Dividends received 0.0 0.0 0.9 0.0Cash flow from financial income 1.6 1.7 0.9 0.7Tax payments -8.4 -12.6 -7.8 -9.6
Total cash flow from operations (A) 31.4 28.5 27.5 12.3
Cash flow from investments
Fixed and other long-term asset investments -14.3 -9.2 -10.9 -4.6Sales of fixed and other long-term assets 0.4 2.9 0.0 2.6Other financial investments 0.0 -9.6 -2.6 -13.7Change in loans receivable 0.3 6.2 0.5 6.5
Total cash flow from investments (B) -13.5 -9.7 -13.0 -9.2
Cash flow from financing
Change in short-term loans -17.6 32.6 -24.3 32.2Change in long-term loans 13.6 -38.4 23.0 -23.0Dividends paid -13.0 -13.0 -13.0 -13.0Others 0.0 0.0
Total cash flow from financing (C) -17.0 -18.8 -14.3 -3.8
Change in liquid funds (A+B+C) 0.9 0.0 0.3 -0.7
Liquid funds Jan. 1 1.9 1.9 0.1 0.8Influence of exchange rate changes on liquid funds -0.2 0.0Liquid funds Dec. 31 2.6 1.9 0.4 0.1
73year 2008 PAREnT COmPAnY PROFIT AnD lOSS ACCOunT
EuR million note Jan. 1-Dec. 31, 2008 % Jan. 1-Dec. 31, 2007 %
Turnover 2.1. 886.0 100.0 823.8 100.0Other operating income 2.2. 4.7 5.3
Materials and services 2.3. 730.8 679.9Personnel expenses 2.4. 54.9 51.0Depreciation 9.3 8.7Other operating expenses 2.5. 64.1 57.7Operating profit 31.6 3.6 31.8 3.9
Financial income and expenses 2.7.Income from dividends
From Group companies 0.9Interest and similar income
From Group companies 0.3 0.1
From others 0.6 0.7
Write-down of financial investments 0.0 -5.7
Interest and similar expenses
To Group companies -2.4 -1.9
To others -0.1 -0.7 -0.0 -6.9
Profit before appropriations and taxes 31.0 3.5 24.9 3.0
Appropriations 2.8. 0.0 -1.2Direct taxes 2.9. -8.0 -7.8
Profit for the year 23.0 2.6 15.9 1.9
74 year 2008PAREnT COmPAnY BAlAnCE SHEET
EuR million note Dec. 31, 2008 Dec. 31, 2007
ASSETS
Fixed and other long-term assets 3.1.Intangible assets
Intangible rights 0.3 0.2Goodwill 5.7 7.4Other long-term assets 1.1 6.6Advance payments 8.8 15.8 0.6 14.8
Tangible assetsBuildings 0.3 0.5Machinery and equipment 6.4 7.0Advance payments and construction in progress 1.4 8.1 7.5
Financial investmentsShares in Group companies 67.0 64.4Shares in affiliated companies 0.0 0.0Other shares and holdings 0.2 67.2 0.2 64.6
Current assetsInventories 3.2. 110.9 93.5Receivables 3.3.
Short-termAccounts receivable 54.9 59.9Receivables from Group companies 5.8 9.1Loans receivable 0.7 0.0Other receivables 0.9 1.6Deferred receivables 8.4 70.6 8.0 78.6
Cash and bank deposits 0.4 0.1
273.1 259.1
75year 2008 PAREnT COmPAnY BAlAnCE SHEET
EuR million note Dec. 31, 2008 Dec. 31, 2007
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 3.4.
Share capital 20.0 20.0
Share premium account 35.1 35.1 Retained earnings 76.9 73.9 Profit for the year 23.0 155.0 15.9 145.0
Accumulated excess depreciation 2.2 2.2
Statutory provisions 3.5. 0.2 0.2
LiabilitiesLong-term liabilities 3.6.
Loans from financial institutions 0.1 0.1Payables to Group companies 27.0 27.1 4.0 4.1
Short-term liabilities 3.7.Advances received 0.7 0.3Accounts payable 58.5 47.5Payables to Group companies 10.1 34.4Other short-term liabilities 8.9 12.6Deferred payables 10.5 88.7 12.8 107.6
273.1 259.0
76 year 2008
1.1. IntroductionThe company belongs to the Onvest Group. The Onvest Group’s parent company is Onvest Oy, which is domiciled in Helsinki. A copy of the Onvest Group’s consolidated financial statements is available at the Onvest Group’s head office, Mittalinja 1, FI-01260 Vantaa.
1.2. Valuation principles
1.2.1. Valuation of fixed assetsFixed assets have been capitalized at the immediate acquisition cost. Planned depreciation is based on the economic life of the asset and has been calculated using the straight-line method.
Depreciation periods:Intangible rights 5 yearsGoodwill 5 yearsGroup goodwill 5-10 yearsOther long-term expenditures 3-5 yearsBuildings 10-25 yearsMachinery and equipment 3-12 years
Group goodwill arises from corporate acquisitions that have provided significant market shares and markets in new product areas. For this reason, the majority of Group goodwill is allocated to 10 years.
Advance payments and acquisitions in progress have been recorded in the balance sheet in accordance with the acquisition cost.
1.2.2. Valuation of inventoriesInventories have been valued according to the FIFO principle at the acquisition cost or the repurchase price or probable selling price, whichever is the lower.
An obsolescence provision has been deducted from the value of the inventories, and this is recorded as an expense in the period when the need for the provision has been identified on the basis of technical obsolescence and other factors.
1.2.3. Accrual of pension expensesPension expenses have been presented in accordance with local legislation in each country. Insurance has been arranged with pension insurance companies. Direct liabilities for pensions are included in the statutory provisions in the balance sheet.
1.3. ComparativesWhen necessary, comparative figures for the previous year have been adjusted to conform to changes in presentation for the current year.
The deferred tax assets relating to previous years have been corrected, and the amount has been increased by EUR 736,000. The effect of the item on shareholders’ equity is included in the breakdown “Conversions and other adjustments” found in Section 3.4 of the Notes to the Balance Sheet. The deferred tax assets have been corrected accordingly. The changes were also introduced in the comparative balance sheet on December 31, 2007.
1.4. Consolidated financial statementsThe consolidated financial statements have been prepared according to the acquisition cost method. The consolidated financial statements include the parent company and all of its subsidiaries. The difference between the acquisition cost of the subsidiaries and the acquired holding in shareholders’ equity is presented as Group goodwill.
Internal Group transactions, margins, receivables, and debts have been eliminated, as has internal distribution of profits.
The financial statements of the foreign subsidiaries have been adjusted and grouped to meet the requirements of Finnish accounting legislation. The profit and loss statements of the foreign subsidiaries have been changed into euros at the average rate for the financial year. The balance sheets have been changed into euros at the year-end rate. The adjustments arising from this process, and the adjustments arising from shareholders’ equity, are presented in the item for retained profits from previous years.
1.5. Deferred tax assets and liabilitiesIn the consolidated financial statements, the accumulated depreciation difference has been divided into deferred tax liabilities and shareholders’ equity. There are no deferred tax liabilities due to matching differences.
Tax assets arising from matching differences have been included as deferred tax assets. Those tax assets arising from tax losses that are not considered likely to fall due in the next few years have not been included.
1.6. Group’s cash flow statementExchange differences arising from the exchange of each cash flow statement item are included in the respective item.
nOTES TO THE PREPARATIOn OF THE FInAnCIAl STATEmEnTS
77year 2008 nOTES TO THE PROFIT AnD lOSS ACCOunT
GROuP PAREnT COmPAnY
EuR million 2008 2007 2008 2007
2.1. Turnover
Turnover total 1,748.0 1,718.5 886.0 823.8
Sales to Group companies 15.3 15.9 34.5 32.8
Distribution of turnover
Finland 864.1 826.9 862.3 803.9
Sweden 268.3 300.3
Norway 310.2 319.4
Poland 162.7 137.6
Russia 67.3 57.1 2.4 1.8
Baltic countries 75.4 77.1 1.6
Intra-Group sales 19.7 18.1
1,748.0 1,718.5 886.0 823.8
2.2. Other operating incomeService invoicing from subsidiaries 4.7 5.1
Profit from real estate sales 0.0 1.6
Other operating income 0.2 0.3 0.0 0.2
0.2 1.9 4.7 5.3
2.3. Materials and servicesMaterials
Purchases during the year 1,440.4 1,413.7 748.3 691.4
Change in inventories -13.2 -15.9 -17.5 -11.5
1,427.2 1,397.8 730.8 679.9
2.4. Personnel expenses and average personnelPersonnel expenses
Wages and salaries 99.2 99.7 45.0 42.2
Pension expenses 12.0 11.5 7.4 6.2
Other personnel expenses 12.2 13.2 2.6 2.5
123.5 124.4 54.9 51.0
Salaries and bonuses to the Managing Directors
and Board Members 2.2 2.0 0.7 0.4
Average personnel
Finland 1,193 1,190 1,193 1,190
Sweden 400 458
Norway 404 423
Poland 711 600
Russia 307 325
Baltic countries 283 287
3,298 3,283 1,193 1,190
Personnel at year-end
Finland 1,184 1,179 1,184 1,179
Sweden 351 458
Norway 420 433
Poland 740 635
Russia 253 307
Baltic countries 262 292
3,210 3,304 1,184 1,179
78 year 2008nOTES TO THE PROFIT AnD lOSS ACCOunT
GROuP PAREnT COmPAnY
EuR million 2008 2007 2008 2007
2.5. Other operating expensesProperty-related costs 37.5 33.5 14.5 13.0Delivery and transport costs 51.1 43.3 22.0 18.3Administrative expenses 43.4 40.9 18.4 18.5Other operating expenses 17.6 17.3 9.2 7.9
149.6 135.0 64.1 57.7
2.6. Auditors' feesAuditing assignments 0.3 0.3 0.1 0.1
2.7. Financial income and expensesInterest and similar income from others 0.1 0.2 0.0 0.1includes exchange rate gains (net)
Interest and similar expenses to othersincludes exchange rate losses (net) -0.2 -0.1 0.0
2.8. AppropriationsDifference between tax-based andplanned depreciation 0.0 -1.2
2.9. Direct taxesCorporate income tax -9.0 -10.8 -8.0 -7.8Change in deferred tax liability -0.3 -0.0
-9.3 -10.8 -8.0 -7.8
79year 2008
3.1. Fixed and other long-term assets
GROuP Intangible assets
EuR million
Intangible
rights Goodwill
Group
goodwill
Other long
term assets
Advance
payments Total
Acquisition cost Jan. 1. 2008 8.5 4.5 61.3 17.8 0.7 92.8Currency-related conversions -0.9 -0.4 -5.9 0.0 -0.0 -7.1Increase 0.4 0.2 8.2 8.8Decrease -0.0 -0.6 -0.1 -0.7Transfers between items 0.0 0.0Acquisition cost Dec. 31, 2008 7.9 4.1 55.5 17.5 8.8 93.8
Accumulated depreciation Jan. 1, 2008Currency-related conversions 6.0 4.1 33.9 10.5 54.5Accumulated depreciation on deductions -0.4 -0.4 -3.3 0.2 -3.9and transfers -0.2 -0.6 -0.8Depreciation from the period 0.9 0.4 6.1 5.8 13.2Accumulated depreciation Dec. 31, 2008 6.3 4.1 36.7 15.9 63.0
Book value Dec. 31, 2008 1.6 0.0 18.8 1.6 8.8 30.8
GROuP Tangible assets
EuR million Buildings
machinery
and
equipment
Advance payments
and construction
in progress Total
Acquisition cost Jan. 1. 2008 1.2 45.7 0.1 47.0
Currency-related conversions -0.0 -0.9 -0.0 -0.9
Increase 0.0 3.5 1.5 5.0
Decrease -2.6 -0.1 -2.7
Transfers between items 0.2 0.2
Acquisition cost Dec. 31, 2008 1.2 45.9 1.4 48.6
Accumulated depreciation Jan. 1, 2008
Currency-related conversions 0.7 29.2 29.9
Accumulated depreciation on deductions 0.0 0.1 0.1
and transfers -2.3 -2.3
Depreciation from the period 0.2 4.8 4.9
Accumulated depreciation Dec. 31, 2008 0.9 31.8 32.6
Book value Dec. 31, 2008 0.4 14.1 1.4 15.9
nOTES TO THE BAlAnCE SHEET
80 year 2008
EuR million
PAREnT COmPAnY Intangible assets
Intangible
rightsGoodwill
Other long-
term assets
Advance
payments Total
Acquisition cost Jan. 1. 2008 1.4 9.0 14.1 0.6 25.2Increase 0.2 0.1 8.2 8.4Decrease -0.0 -0.6 -0.6Transfers between items 0.0Acquisition cost Dec. 31, 2008 1.6 9.0 13.6 8.8 32.9
Accumulated depreciation Jan. 1, 2008 1.3 1.5 7.6 10.3Accumulated depreciation on deductions and transfers -0.0 -0.6 -0.6Depreciation from the period 0.1 1.8 5.5 7.4Accumulated depreciation Dec. 31, 2008 1.3 3.3 12.5 17.1
Book value Dec. 31, 2008 0.3 5.7 1.1 8.8 15.8
PAREnT COmPAnY Tangible assets
Buildings
machinery
and equipment
Advance
payments and
construction in
progress Total
Acquisition cost Jan. 1. 2008 1.1 19.9 0.0 21.0Increase 1.2 1.4 2.5Decrease -1.3 -1.3Transfers between items 0.0Acquisition cost Dec. 31, 2008 1.1 19.8 1.4 22.2
Accumulated depreciation Jan. 1, 2008 0.6 12.9 13.5Accumulated depreciation on deductions and transfers -1.3 -1.3Depreciation from the period 0.2 1.7 1.9Accumulated depreciation Dec. 31, 2008 0.8 13.4 14.2
Book value Dec. 31, 2008 0.3 6.4 1.4 8.1
FINANCIAL INVESTMENTS
GROuP
Shares in
affiliated
companies
Other
shares and
holdings Total
Acquisition cost Jan. 1. 2008 0.4 0.2 0.6Currency-related conversions -0.1 -0.1Increase 0.0 0.0Decrease -0.1 -0.0 -0.1Acquisition cost Dec. 31, 2008 0.3 0.2 0.4
Book value Dec. 31, 2008 0.3 0.2 0.4
PAREnT COmPAnY
Shares in
Group
companies
Shares in
affiliated
companies
Other
shares and
holdings Total
Acquisition cost Jan. 1. 2008 64.4 0.0 0.2 64.6Increase 2.6 0.0 2.6Write-down -0.0 0.0Acquisition cost Dec. 31, 2008 67.0 0.0 0.2 67.2
Book value Dec. 31, 2008 67.0 0.0 0.2 67.2
nOTES TO THE BAlAnCE SHEET
81year 2008
GROuP COmPAnIES
Group's
Holdings %
Parent company's
Holdings %
Onninen AB, Solna 100.0 100.0Onninen AS, Nittedal 100.0 100.0Onninen Sp. z o.o., Warsaw 100.0 100.0OOO Onninen, St Petersburg 100.0 100.0AS Onninen, Tallinn 100.0 100.0SIA Onninen, Riga 100.0 100.0UAB Onninen, Vilnius 100.0 100.0Teletekno AS, Oslo 100.0Teletekno Balti AS, Tallinn 100.0 100.0Dormant companies 100.0 100.0
Affiliated companiesSuomen LVIS-Tietoverkko Oy, Vantaa 20.0 20.0Eltron AS, Tynset 34.0
All associated companies outside Finland have been consolidated using the equity method.The share of associated companies’ profits is included in financial income.The effect of the associated companies owned by the parent company on the Group’s net profit and shareholders’ equity is so small that it has not been included in the consolidated profit and loss account and balance sheet.
GROuP PAREnT COmPAnY
EuR million 2008 2007 2008 2007
3.2. InventoriesGoods in stock 215.9 217.4 117.1 98.5Obsolescence deduction -14.3 -14.9 -6.3 -5.2Advances paid 0.3 0.6 0.2 0.2
201.9 203.2 110.9 93.5
The value of inventories has been reduced due to obsolescent property by EUR 14.3 million in the Group(2007: EUR 14.9 million) and by EUR 6.3 million in the parent company (2007: EUR 5.2 million).
3.3. Receivables
Deferred tax receivable
From allocations 1.9 2.8
Short-term receivablesReceivables from Group companies
Accounts receivable 1.3 1.1 5.4 8.2Loans receivable 0.4 0.9
1.3 1.1 5.8 9.1
Deferred receivablesAnnual discount receivables 19.7 19.6 7.9 6.9Others 3.9 6.9 0.5 1.1
23.5 26.5 8.4 8.0
nOTES TO THE BAlAnCE SHEET
82 year 2008
EuR million GROuP PAREnT COmPAnY
2008 2007 2008 2007
3.4. Shareholders' equity
Share capital Jan. 1 20.0 20.0 20.0 20.0
Share capital Dec. 31 20.0 20.0 20.0 20.0
Share premium account Jan. 1 35.1 35.1 35.1 35.1
Share premium account Dec. 31 35.1 35.1 35.1 35.1
Other reserves Jan. 1 0.1 0.1
Exchange difference -0.0 -0.0
Other reserves Dec. 31 0.1 0.1
Retained earnings Jan. 1 109.2 94.8 89.9 86.9
Dividends paid -13.0 -13.0 -13.0 -13.0
Conversions and other adjustments -9.5 1.0
Retained earnings Dec. 31 86.8 82.7 76.9 73.9
Profit for the year 12.8 26.5 23.0 15.9
Shareholders' equity total 154.8 164.5 155.0 145.0
Distributable earnings
Retained earnings 76.9 73.9
Profit for the year 23.0 15.9
99.9 89.9
3.5. Statutory provisions
Pension liability provision 1.6 2.1 0.2 0.2
Other provisions 0.5 0.4
2.2 2.5 0.2 0.2
3.6. Long-term liabilities
Deferred tax liability
From appropriations 0.6 1.1
Payables to Group companies
Long-term liabilities 36.2 14.6 27.0 4.0
nOTES TO THE BAlAnCE SHEET
83year 2008
EuR million GROuP PAREnT COmPAnY
2008 2007 2008 2007
3.7. Short-term liabilities
Payables to Group companies
Accounts payable 0.0 0.1 0.2 0.2
Other short-term liabilities 18.6 37.2 9.9 34.2
18.6 37.3 10.1 34.4
Deferred payables
Personnel-related expenses 15.3 22.9 9.5 12.1
Others 13.9 9.2 1.0 0.7
29.2 32.1 10.5 12.8
3.8. Leasing liabilities and contingent liabilities
Leasing liabilities
Due in current period 5.6 3.9 3.2 1.2
Due later 4.8 5.4 1.8 1.4
10.4 9.3 4.9 2.6
Contingent liabilitiesGuarantees and securities given on behalf of Group companies 73.3 78.3
Guarantees and securities given on behalf of others 1.1 0.4 1.1 0.4
Rental liabilities 62.9 61.3 28.1 21.5
An amount equivalent to a maximum of three years’ rent has been included as rental liabilities. This is based on the assumption that if the premises are left vacant, the maximum expense to the Group will be this amount.
Pension liability on behalf of related party, EUR 0.5 million, is included in statutory provisions
nOTES TO THE BAlAnCE SHEET
84 year 2008
The parent company’s distributable earnings are EUR 99.9 million of which the profit of the year is EUR 23.0 million.
The Board of Directors propose to the Annual General meeting that of the distributable earnings be allocated as follows: - a dividend of EUR 0.65 per share be paid, being a total of EUR 6.5 million. - EUR 93.4 million will be left to retained earnings account.
No significant changes have occurred in the company’s financial position after the end of the financial year. The company’s liquidity is good and the Board of Directors’ view the proposed distribution of dividend does not risk the company’s financial standing.
Vantaa, February 10, 2009
Maarit Toivanen-Koivisto Eero Eloranta Chair of the Board
Juha Järvinen Karsten Slotte
Harri Sivula President & CEO
THE BOARD’S PROPOSAl FOR THE DISPOSAl OF PROFIT
85year 2008
AUDITOR’S REPORT
To the Annual General Meeting of Onninen OyWe have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Onninen Oy for the year ended on 31 December, 2008. The financial statements comprise the consolidated and parent company balance sheets, income statements, cash flow statements and notes to the financial statements.
The responsibility of the Board of Directors and the Managing DirectorThe Board of Directors and the Managing Director are responsible for the preparation and fair presentation of the financial statements and the report of the Board of Directors in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company’s accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Auditor’s ResponsibilityOur responsibility is to perform an audit in accordance with good auditing practice in Finland, and to express an opinion on these financial statements and on the report of the Board of Directors based on our audit. Good auditing practice requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements and the report of the Board of Directors are free from material misstatement and whether the members of the Board of Directors and the Managing Director have complied with the Limited Liability Companies Act.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.
The audit was performed in accordance with good auditing practice in Finland. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the financial statements and the report of the Board of Directors give a true and fair view of the financial performance and financial position of the group and the parent company in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
Vantaa, February 10, 2009
Ernst & Young OyAuthorized Public Accountant Firm
Pekka LuomaAuthorized Public Accountant
AuDITInG
86 year 2008
2008 2007 2006 2005 2004
Turnover. EUR million 1,748 1,719 1,445 1,259 1,150growth, % 1.7 18.9 14.8 9.4 7.9
Turnover of international operations, EUR million 884 892 739 637 580growth, % -0.9 20.6 16.1 9.8 4.6percentage of turnover, % 50.6 51.9 51.1 50.6 50.4
Operating profit before amortization of goodwill (EBITA), EUR million 36 50 44 34 38
percentage of turnover, % 2.0 2.9 3.1 2.7 3.3Operating profit (EBIT), EUR million 29 43 40 29 33
percentage of turnover, % 1.7 2.5 2.8 2.3 2.9Net from financing, EUR million -7 -6 -4 -4 -3
percentage of turnover, % -0.4 -0.4 -0.3 -0.3 -0.3Profit before taxes (EBT), EUR million 22 37 36 26 30
percentage of turnover, % 1.3 2.2 2.5 2.1 2.6Group profit for the year, EUR million 13 27 26 21 16
percentage of turnover, % 0.8 1.5 1.8 1.7 1.4Return on investment (ROI), % 11.4 16.5 16.1 12.8 15.4Return on equity (ROE), % 8.0 16.9 18.6 17.1 14.6Equity ratio, % 37.1 35.3 32.6 32.0 33.4Interest-bearing net liabilities, EUR million 97 115 113 120 109Balance sheet total, EUR million 419 467 461 412 352Investments, EUR million 14 19 9 18 15Average personnel 3,298 3,283 2,881 2,707 2,652Personnel at year-end 3,210 3,304 2,984 2,750 2,652
FIVE-YEAR REVIEw
87year 2008
Return on investment (ROI), % (Profit before extraordinary items + interest and similar expenses) x 100
Total assets - interest-free liabilities (average for the beginning and end of the financial year)
Return on equity (ROE), % (Profit before extraordinary items - taxes) x 100
Shareholders’ equity (average for the beginning and end of financial year)
Equity ratio, % Shareholders’ equity x 100
Total assets - advances received
Interest-bearing net liabilities Interest-bearing liabilities - cash and bank deposits
FORmulAS FOR THE InDICATORS
88 year 2008
Juha JärvinenBorn 1946, M.Sc. (Econ.)Member of the Board since 2006
Karsten slotteBorn 1953, M.Sc. (Econ.)Oy Karl Fazer Ab, President and CEOMember of the Board since 2001
ChairMaarit toivanen-KoivistoBorn 1954, Vuorineuvos, M.Sc. (Econ.)Managing Director of Onvest OyMember of the Board since 1998Has chaired the Board since 2000
eero elorantaBorn 1950, D.Sc. (Tech.)Professor at Helsinki University of TechnologyMember of the Board since 2000
board of directors
89year 2008
Kai PuustinenBorn 1968, M.Soc.Sc. (Pol.)Senior Vice PresidentGroup CommunicationsHas served Onninen since 2003
harri sivulaBorn 1962, M.Sc. (Admin.)President and CEOHas served Onninen since 2006
tuoMo väänänenBorn 1956, M.Sc. (Eng.)First Executive Vice PresidentOnninen FinlandHas served Onninen since 1997
heiKKi ala-ilKKaBorn 1952, M.Sc. (Econ.)CFOGroup FinanceHas served Onninen since 1996
helge Messelt sÆthershagenBorn 1955, M.Sc. (Econ.)Group Executive Vice PresidentOnninen Sweden and NorwayHas served Onninen since 2002
Panu hannulaBorn 1967, M.Sc. (Eng.)CIOGroup ICTHas served Onninen since 2006
ulla rehnströMBorn 1958, Qualification in Business and AdministrationSenior Vice PresidentGroup HRHas served Onninen since 2004
group management team
90 year 2008
finlandOnninen OyMittalinja 1FI-01260 VANTAAPL 109FI-01301 VANTAATel. +358 204 85 5111Fax +358 204 85 [email protected]
swedenOnninen ABStubbengatan 2SE-703 44 ÖREBROBox 1602SE-701 16 ÖREBROTel. +46 19 603 3000Fax +46 19 603 [email protected]
norwayOnninen ASStamveien 1Gjelleråsen NæringsparkPostbox 70N-1483 SKYTTATel. +47 06 706Fax +47 67 06 44 17 [email protected]
ContaCtInformatIon
polandOnninen Sp. z o.o.ul. Emaliowa 2802-295 WARSAWPolandTel. +48 22 56 79 000Fax +48 22 56 79 [email protected]
russiaOOO OnninenZanevka, ST. PETERSBURGRussiaP.O.B.121195298 ST. PETERSBURGRussiaTel. +7 812 703 0123Fax +7 812 448 [email protected]
estoniaAS OnninenBetooni 6EE-11415 TALLINNTel. +372 6 105 500 Fax +372 6 105 [email protected]
LatviaSIA OnninenDzelzavas iela 124LV-1021 RIGATel. +371 678 196 00Fax +371 678 196 [email protected]
LithuaniaUAB OnninenSavanoriu pr. 187LT-02300 VILNIUSTel. +370 5 23 22 240Fax +370 5 23 22 [email protected]
Layout: Viisikko-Communica VCA OyPrint: Erweko Painotuote Oy 3/2009Photos: Okko Oinonen (pages 6, 8, 14, 20, 26, 39, 40, 84, 85), Pentti Hokkanen (page 12, 2nd photo and 24, 2nd photo), Are Oy (page 12, 3rd
photo), Sandvik Mining and Construction (page19, 3rd photo), Winwind Oy, (page 18 first photo, page 25), Tampereen sähkölaitos Oy / Sami Helenius (page 24, first photo), Shutterstock, (page 24, 3rd photo, page 39), S-Ryhmä (page 30, first photo), Kesko / Tuomo Manninen (page 30, 2nd photo), Antti Verkasalo (page 60), others: Onninen Oy
onninen oyMittalinja 1
FI-01260 Vantaa
Tel. +358 (0)204 85 5111
Fax +358 (0)204 85 5500
www.onninen.com
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