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Investors

PONSSE’S FINANCIAL STATEMENTS FOR 1 JANUARY – 31 DECEMBER 2018

Juho Nummela, President and CEO (February 19, 2019):

Juho Nummela 2019 (2)

The year 2018 was a busy one as a result of high demand, the significant factory investment and challenges in the availability of components. For Ponsse, the year was an excellent success and, despite the highly challenging situation, our profitability was more than 10 per cent and our cash flow was high at EUR 61 million. We were able to continue our growth, even though the ramp-up of the Vieremä factory limited the use of our capacity. We manufactured nearly the same number of PONSSE forest machines as in the record year of 2017.

Our order flow reached a new record in 2018. High demand during the second half of the year had a significant impact on our delivery times, as the order book reached a new record level. At the end of the year, our order book totalled EUR 294.9 (124.6) million, being 136.7 per cent higher than in the year before.

Russia, Finland and Sweden were our fastest growing market areas. Russia held its place as the world’s largest market for cut-to-length forest machines, followed by Sweden, with Finland being the third largest market. The market situation was excellent in most parts of our market areas throughout the year.

All our business areas grew steadily throughout the year. Sales of new machines developed well, while our service and trade-in machine businesses grew faster than our other operations. Cumulative net sales rose to a historical level of EUR 612.4 (576.6) million and the operating profit amounted to EUR 61.7 (67.4). From the beginning of the year, the company’s net sales increased by 6.2 per cent and operating profit decreased by 8.5 per cent year-on-year. Operating profit accounted for 10.1 (11.7) per cent of net sales during the period under review. Our operating profit during the second half of the year was affected by the significant factory ramp-up, which increased operating costs.

Our sales teams did an excellent job throughout the year, and the rotation of our trade-in machine stock reached a good level. Cash flow from business operations amounted to EUR 61.3 (56.5) million during the period under review. Stocks of both new machines and trade-in machines were at a good level at the end of the year.

We are developing Ponsse with a long-term focus in order to support our customers’ businesses. The continuous renewal of our operations and our products is important. Since 2010, we have increasingly invested around EUR 100 million in product development and around EUR 186 million in fixed assets.

During 2018, we launched a breath-taking number of new products. At the FinnMETKO exhibition, we demonstrated ten new products and significant product features. Our R&D, sales and marketing teams succeeded well, and our new products have received an enthusiastic welcome in the markets. We are investing in harvesting solutions and technologies related to them in accordance with sustainable development.

The investment in the Vieremä factory exceeded all our expectations. The deployment of the storage system during week 10 was a success, and the storage automation system stabilised quickly both in terms of technology and our employees. The ramp-up of the new assembly factory took place after the summer holidays, and it succeeded well, considering the size of the project. Despite any problems in the availability of components and in the new production system, the factory was running on schedule by the end of the year. In this situation, the success of the factory was vital to us and showed that our employees are very skilled, capable and persistent. Our factory is going strong, for which I would like to thank all people at Ponsse’s factory in Vieremä.

The year 2018 was an excellent success for all Ponsse employees and our distribution network.

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