Energy Production and Services in Finland: A Strategic Reference, 2006

Energy Production and Services in Finland: A Strategic Reference, 2006

Edited by

Philip M. Parker, Ph.D. Eli Lilly Chair Professor of Innovation, Business and Society INSEAD (Fontainebleau & Singapore)

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About Icon Group International, Inc. Icon Group International, Inc.’s primary mission is to assist managers with their international information needs. U.S.-owned and operated, Icon Group has field offices in Paris, Hong Kong, and Lomé, Togo (West Africa). Created in 1994, Icon Group has published hundreds of multi-client databases, and global/regional market data, industry and country publications. Global/Regional Management Studies: Summarizing over 190 countries, management studies are generally organized into regional volumes and cover key management functions. The human resource series covers minimum wages, child labor, unionization and collective bargaining. The international law series covers media control and censorship, search and seizure, and trial justice and punishment. The diversity management series covers a variety of environmental context drivers that effect global operations. These include women’s rights, children’s rights, discrimination/racism, and religious forces and risks. Global strategic planning studies cover economic risk assessments, political risk assessments, foreign direct investment strategy, intellectual property strategy, and export strategies. Financial management studies cover taxes and tariffs. Global marketing studies focus on target segments (e.g. seniors, children, women) and strategic marketing planning. Country Studies: Often managers need an in-depth, yet broad and up-to-date understanding of a country’s strategic market potential and situation before the first field trip or investment proposal. There are over 190 country studies available. Each study consists of analysis, statistics, forecasts, and information of relevance to managers. The studies are continually updated to insure that the reports have the most relevant information available. In addition to raw information, the reports provide relevant analyses which put a more general perspective on a country (seen in the context of relative performance vis-à-vis benchmarks). Industry Studies: Companies are racing to become more international, if not global in their strategies. For over 2000 product/industry categories, these reports give the reader a concise summary of latent market forecasts, pro-forma financials, import competition profiles, contacts, key references and trends across 200 countries of the world. Some reports focus on a particular product and region (up to four regions per product), while others focus on a product within a particular country.

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Table of Contents 1

INTRODUCTION & METHODOLOGY.............................................................................1

1.1

What Does This Report Cover?

1

1.2

How to Strategically Evaluate Finland

1

1.3

Latent Demand and Accessibility in Finland

3

2 2.1

ENERGY PRODUCTION AND SERVICES IN FINLAND...............................................5 Latent Demand and Accessibility: Background

5

2.2 Latent Demand: Market Composition 5 2.2.1 Vapo Energy............................................................................................................................................... 5 2.2.2 International Energy Cooperation .............................................................................................................. 6 2.2.3 Nord Pool ................................................................................................................................................... 6 2.3 Energy Sources 6 2.3.1 Nuclear Power ............................................................................................................................................ 6 2.3.2 Oil and Gas................................................................................................................................................. 6 2.3.3 Oil Imports and Exports ............................................................................................................................. 7 2.3.4 Natural Gas................................................................................................................................................. 7 2.3.5 Coal ............................................................................................................................................................ 7 2.3.6 Renewable Energy...................................................................................................................................... 7 2.4

Latent Demand: Leading Segments

9

2.5

Key Players

9

2.6

Key Contacts

9

3 FINANCIAL INDICATORS: STEAM, GAS AND HYDRAULIC TURBINES AND TURBINE GENERATOR SET UNITS .....................................................................................10 3.1 Overview 10 3.1.1 Financial Returns and Gaps in Finland..................................................................................................... 11 3.1.2 Labor Productivity Gaps in Finland ......................................................................................................... 14 3.1.3 Limitations and Extensions ...................................................................................................................... 14 3.2 Financial Returns in Finland: Asset Structure Ratios 15 3.2.1 Overview .................................................................................................................................................. 15 3.2.2 Assets – Definitions of Terms .................................................................................................................. 15 3.2.3 Asset Structure: Outlook .......................................................................................................................... 18 3.2.4 Large Variances: Assets ........................................................................................................................... 19 3.2.5 Key Percentiles and Rankings .................................................................................................................. 22 3.3 Financial Returns in Finland: Liability Structure Ratios 37 3.3.1 Overview .................................................................................................................................................. 37 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 37 3.3.3 Liability Structure: Outlook ..................................................................................................................... 39 3.3.4 Large Variances: Liabilities ..................................................................................................................... 40 3.3.5 Key Percentiles and Rankings .................................................................................................................. 43 www.icongrouponline.com

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3.4 Financial Returns in Finland: Income Structure Ratios 56 3.4.1 Overview .................................................................................................................................................. 56 3.4.2 Income Statements – Definitions of Terms .............................................................................................. 56 3.4.3 Income Structure: Outlook ....................................................................................................................... 59 3.4.4 Large Variances: Income.......................................................................................................................... 60 3.4.5 Key Percentiles and Rankings .................................................................................................................. 63 3.5 Financial Returns in Finland: Profitability Ratios 78 3.5.1 Overview .................................................................................................................................................. 78 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 78 3.5.3 Ratio Structure: Outlook .......................................................................................................................... 80 3.5.4 Large Variances: Ratios ........................................................................................................................... 81 3.5.5 Key Percentiles and Rankings .................................................................................................................. 84 3.6 Productivity in Finland: Asset-Labor Ratios 99 3.6.1 Overview .................................................................................................................................................. 99 3.6.2 Asset to Labor: Outlook ......................................................................................................................... 100 3.6.3 Asset to Labor: International Gaps......................................................................................................... 101 3.6.4 Key Percentiles and Rankings ................................................................................................................ 104 3.7 Productivity in Finland: Liability-Labor Ratios 119 3.7.1 Overview ................................................................................................................................................ 119 3.7.2 Liability to Labor: Outlook .................................................................................................................... 120 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 121 3.7.4 Key Percentiles and Rankings ................................................................................................................ 124 3.8 Productivity in Finland: Income-Labor Ratios 137 3.8.1 Overview ................................................................................................................................................ 137 3.8.2 Income to Labor: Outlook ...................................................................................................................... 138 3.8.3 Income to Labor: Gaps ........................................................................................................................... 139 3.8.4 Key Percentiles and Rankings ................................................................................................................ 142

4

MACRO-ACCESSIBILITY IN FINLAND ......................................................................157

4.1 Executive Summary 157 4.1.1 Nokia – A Big Company in a Small Country......................................................................................... 157 4.1.2 Finnish-U.S. Trade ................................................................................................................................. 157 4.1.3 Finland: A Springboard to Russia and the Baltic States......................................................................... 157 4.2 Economic Fundamentals and Dynamics 158 4.2.1 Government Intervention Risks.............................................................................................................. 158 4.2.2 Balance of Payments Issues ................................................................................................................... 158 4.2.3 Infrastructure Development.................................................................................................................... 159 4.3 Political Risks 159 4.3.1 Economic Relationship with the United States ...................................................................................... 159 4.3.2 The Political System............................................................................................................................... 160 4.4 Marketing Strategies 160 4.4.1 Creating a Sales Office........................................................................................................................... 160 4.4.2 Creating a Joint Venture......................................................................................................................... 160 4.4.3 Agents and Distributors.......................................................................................................................... 160 4.4.4 Checking Bona Fides.............................................................................................................................. 161 4.4.5 Distribution Channel Options................................................................................................................. 161 www.icongrouponline.com

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Selling Strategies.................................................................................................................................... 162 Pricing and Licensing............................................................................................................................. 162 Advertising Options ............................................................................................................................... 162 Trade Promotion..................................................................................................................................... 163 Public Sector Marketing......................................................................................................................... 164

4.5 Import and Export Regulation Risks 165 4.5.1 Adherence to Free Trade Agreements .................................................................................................... 165 4.5.2 Trade Barrier Risks ................................................................................................................................ 165 4.5.3 Tariff Rates............................................................................................................................................. 165 4.5.4 Restrictions on Imports .......................................................................................................................... 166 4.5.5 Local Standards ...................................................................................................................................... 166 4.5.6 Labeling Issues....................................................................................................................................... 168 4.5.7 Controls on Exports................................................................................................................................ 169 4.5.8 Import Tariffs and License Requirements .............................................................................................. 169 4.5.9 Customs Regulations and Contact Information...................................................................................... 170 4.5.10 Entering Temporary Imports .................................................................................................................. 170 4.5.11 Additional Trade Issues.......................................................................................................................... 170 4.5.12 Free Trade Zones and Warehouses......................................................................................................... 171 4.6 Investment Climate 171 4.6.1 Openness to Foreign Investment ............................................................................................................ 171 4.6.2 Conversion and Transfer Policies........................................................................................................... 172 4.6.3 Expropriation and Compensation ........................................................................................................... 172 4.6.4 Dispute Settlement ................................................................................................................................. 172 4.6.5 Performance Requirements and Incentives ............................................................................................ 172 4.6.6 Right to Private Ownership and Establishment ...................................................................................... 173 4.6.7 Intellectual Property Risks ..................................................................................................................... 173 4.6.8 Transparency of the Regulatory System................................................................................................. 174 4.6.9 Capital Market Risks .............................................................................................................................. 174 4.6.10 Political Violence ................................................................................................................................... 174 4.6.11 Corruption .............................................................................................................................................. 174 4.6.12 Bilateral Investment Agreements ........................................................................................................... 175 4.6.13 OPIC and Other Investment Insurance................................................................................................... 175 4.6.14 Labor ...................................................................................................................................................... 176 4.7 Trade and Project Financing 176 4.7.1 The Banking System .............................................................................................................................. 176 4.7.2 Foreign Exchange Control Risks............................................................................................................ 176 4.7.3 General Financing Availability .............................................................................................................. 177 4.7.4 Financing Export Strategies ................................................................................................................... 177 4.7.5 Types of Available Export Financing and Insurance ............................................................................. 177 4.7.6 Financing Projects .................................................................................................................................. 179 4.7.7 Banks with Correspondent Banking Arrangements ............................................................................... 179 4.8 Travel Risks 179 4.8.1 Local Business Practices ........................................................................................................................ 179 4.8.2 Visa Requirements and Travel Information ........................................................................................... 179 4.8.3 Infrastructure for Conducting Business.................................................................................................. 180 4.8.4 Country Data .......................................................................................................................................... 181 4.9 Key Contacts 181 4.9.1 U.S. Embassy Trade Personnel .............................................................................................................. 181 4.9.2 Washington-Based U.S. Government Contacts...................................................................................... 182 www.icongrouponline.com

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Chambers of Commerce......................................................................................................................... 183 World Trade Center in Helsinki ............................................................................................................. 184 Trade Associations ................................................................................................................................. 184 Finnish Government Agencies ............................................................................................................... 186 Market Research Firms .......................................................................................................................... 188 Commercial Banks ................................................................................................................................. 188

DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........190

5.1

Disclaimers & Safe Harbor

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5.2

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1 1.1

INTRODUCTION & METHODOLOGY WHAT DOES THIS REPORT COVER?

The primary audience for this report is managers involved with the highest levels of the strategic planning process and consultants who help their clients with this task. The user will not only benefit from the hundreds of hours that went into the methodology and its application, but also from its alternative perspective on strategic planning relating to energy production and services in Finland. As the editor of this report, I am drawing on a methodology developed at INSEAD, an international business school (www.insead.edu). For any given industry or sector, including energy production and services, the methodology decomposes a country’s strategic potential along four key dimensions: (1) latent demand, (2) micro-accessibility, (3) proxy operating proforma financials, and (4) macro-accessibility. A country may have very high latent demand, yet have low accessibility, making it a less attractive market than many smaller potential countries having higher levels of accessibility. With this perspective, this report provides both a micro and a macro strategic profile of energy production and services in Finland. It does so by compiling published information that directly relates to latent demand and accessibility, either at the micro or macro level. The reader new to Finland can quickly understand where Finland fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for energy production and services in Finland. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macro-accessibility in Finland. Macro-accessibility is a general evaluation of investment and business conditions in Finland.

1.2

HOW TO STRATEGICALLY EVALUATE FINLAND

Perhaps the most efficient way of evaluating Finland is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to energy production and services are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).

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Introduction & Methodology

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Framework for Prioritizing Countries Demand/Market Potential Driven Firm

High

Highest Priority

High Priority Latent Demand

Moderate Priority Low Priority

Low

Lowest Priority Low

High Relative Accessibility

Accessibility/Supply Averse Firm High Highest Priority High Priority Latent Demand

Moderate Priority Low Priority Lowest Priority

Low High

Low Relative Accessibility

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Introduction & Methodology

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In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market – neither a market-driven nor a costdriven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).

1.3

LATENT DEMAND AND ACCESSIBILITY IN FINLAND

This report provides a detailed overview of factors driving latent demand and accessibility for energy production and services in Finland. Latent demand is largely driven by economic fundamentals specific to energy production and services. This topic is discussed in Chapter 2 using work carried out in Finland on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for energy production and services in Finland. I use the term “micro” since the discussion is focused specifically on energy production and services. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Finland. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Finland. The numbers are only indicative of an average firm whose primary activity is in Finland. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Finland. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “steam, gas and hydraulic turbines and turbine generator set units”, as defined in Chapter 3. Again, while “steam, gas and hydraulic turbines and turbine generator set units” does not exactly equate to “energy production and services”, it nevertheless gives an indicator of how Finland compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond energy production and services. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Finland: •

Openness to Trade in Finland

•

Openness to Direct Investment in Finland

•

Local Marketing and Entry Strategy Alternatives

•

Local Human Resources

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Introduction & Methodology •

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Local Risks

Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Finland. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Finland. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.

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2 2.1

ENERGY PRODUCTION AND SERVICES IN FINLAND LATENT DEMAND AND ACCESSIBILITY: BACKGROUND

This market brief provides information on Finland’s energy sources and major players in the energy market. It describes Finland’s international cooperation, provides statistical data on use of different forms of energy, and highlights best prospects for U.S. companies.

2.2

LATENT DEMAND: MARKET COMPOSITION

A Nordic country, Finland shares a long border with Russia. In Finland, the world’s northern-most industrialized nation, energy consumption per capita is high. This is due to the severe climate, long distances, high standard of living, and structure of Finnish industry. The Electricity Market Act and the point-access tariff of 1995 opened the Finnish electricity market to competition. A modification of the law in 1998 allowed customers to choose a supplier freely and at no additional cost. Finland’s energy consumption has increased more than 50% since the early 1970s. During the same period, industrial output and the total volume of construction have more than doubled. On an international scale, energy production and usage in Finland are quite efficient, due to resource availability, production infrastructure and geographical location. According to Statistic Finland, total energy consumption was 1,360 petajoule and electricity consumption was 85 terawatt hours (TWH) in 2005. Finland is the fifth largest country in Europe, but has a population of only 5.2 million, mostly concentrated in urban areas. In Finland, the share of forestland is the highest in Europe (about 70%). More than two-thirds of Finns live in urban areas; only 1.6% north of the Arctic Circle. Finland’s energy needs are high due to its energy-intensive industry, cold climate, and long distances. Finland does not have its own fossil fuels—coal, oil or natural gas—but does have bio fuels, rich reserves of peat, and extensive wood resources.

2.2.1

Vapo Energy

Vapo Energy (see www.vapo.fi) is the leading producer and supplier of bio fuels – peat, wood fuels, and pellets in the Nordic and Baltic regions. The company is also a leading supplier of energy crops, briquettes, potting soil, and growth and environmental peat. The company’s long-term research efforts have produced a number of innovative technologies for harnessing renewable energy sources. Energy-intensive industries play a large role in the Finnish economy, which has spurred the development of efficient energy systems. The pulp and paper industry supplies over two-fifths of heat and electricity needs by utilizing solid and liquid wood residues. In Finland, peat has been defined as slowly renewing biomass fuel. It has a substantial share, about 7%, of Finland’s energy balance. As indigenous fuel, peat has considerable effect on regional policy. It increases employment and security of the energy supply.

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Energy Production and Services

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International Energy Cooperation

Nordic energy cooperation is carried out as part of the activities of the Nordic Council of Ministers, with a view toward promoting efficient and environmentally acceptable energy in the Nordic countries, the Baltic Sea region, and neighboring areas. The most significant outcome of such cooperation has been the development of the Nordic electricity market. The Nordic electricity trading system has been used as a model for market reform in other countries. Finland participates in the energy-related work of the Council of the Baltic Sea States and Barents Council and supports the strengthening of the EU’s Northern Dimension in the energy sector. Finland is also active in OECD (Organization for Economic Cooperation and Development), IEA (International Energy Agency), and NEA (Nuclear Energy Agency) energy discussions. Among the UN agencies, the IAEA (International Atomic Energy Agency) and the Sustainable Energy Committee of UNECE (UN Economic Commission for Europe) are important forums for cooperation in the energy field. Finland participates in these forums and also cooperates on energy and environment with several countries outside of Europe (see www.ktm.fi).

2.2.3

Nord Pool

During the 1990s, the Nordic countries created a framework for a common electric power market based on open competition. The Nordic countries are the leaders in deregulating the electric power sector and in conducting international trade in electricity. In 1996, Nord Pool became the first international commodity exchange for trading electric power (see www.nordpool.com).

2.3 2.3.1

ENERGY SOURCES Nuclear Power

Finland has four nuclear power plants and is currently building a fifth. In December 2003, the power utility Teollisuuden Voima Oy (see www.tvo.fi) placed an order for a new nuclear power plant—Finland’s fifth commercial reactor—from the French-German company Framatome ANP and a turbine plant from German Siemens. The Framatome ANP–Siemens consortium will supply the nuclear power plant unit as a turnkey delivery. The new nuclear power plant will cost about 3 billion euros, which makes it the largest single investment ever in Finland. The location of the power plant is in Olkiluoto, located at Eurajoki, Some 150 miles northwest of Helsinki. The new plant will start up in 2009, and its power output will be about 1,600 megawatts (MW). Building of the plant begun in the beginning of 2004. Additional nuclear capacity will be used to meet increased electricity demand, to replace aging and decommissioned production capacity, and to accommodate growing electricity imports.

2.3.2

Oil and Gas

Construction of the gas turbine plant of Fingrid Oyj (see www.fingrid.fi) started in April 2006 in Olkiluoto in western Finland. Fingrid is responsible for the main electricity transmission grid in Finland, and will build the plant in cooperation with Teollisuuden Voima Oy (TVO). The new gas turbine plant of 100 MW will be needed for the management of power reserve obligations imposed on Fingrid. The total value of the gas turbine plant will be about 50 ($62) million euros and will be ready in the summer of 2007.

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Energy Production and Services

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Oil Imports and Exports

Neste Oil Corporation, a leading independent northern European oil refining and marketing company, is the market leader in its field in Finland. It markets and sells oil products through its service stations and network of automated stations and directly to consumers. At the moment, Neste’s network covers a total of nearly one thousand Neste service stations, unmanned A24stations, D-stations, and sales outlets. Most of the oil products are sold in the domestic market. Exports of oil products amounted to 5.3 million tons, of which gasoline accounted for 2.7 million tons and diesel fuels for 1.8 million tons. The Nordic countries and North America are Neste’s largest export markets (see www.nesteoil.com).

2.3.4

Natural Gas

The structure of the Finnish natural gas market is different than the common European market, where the supply of natural gas to private households and other small consumers plays an important role. In Finland, the bulk of natural gas is supplied to major natural gas users, i.e., industrial enterprises, power plants, and district heating plants. Local supply of natural gas accounts for only 5% of the total supply. The network of natural gas pipelines covers the southeastern and southern parts of Finland. In this area, natural gas accounts for about 30% of the fuels used in the production of electricity and heat. Natural gas accounts for about 10% of the country’s use of primary energy. The natural gas used in Finland is imported from Russia. The importer and wholesaler of natural gas is Gasum Oy. For more information, please see www.energiamarkkinavirasto.fi.

2.3.5

Coal

In the early 1980, the share of coal in electricity generation fell sharply, when nuclear power plant units replaced production of coal-fired power plants. In 2005, coal and coke accounted for 8.2% of Finland’s energy consumption. Meri Pori Coal-Fired Power Plant—The 560 MW Meri-Pori coal-fired power plant is owned and operated by Fortum Power and Heat Oy (see www.fortum.fi). Teollisuuden Voima (TVO) invested a 45% share in the construction of the plant and is entitled to a corresponding share of the electricity generated by the plant. Operation of the power plant started in 1994.

2.3.6

Renewable Energy

Hydro Power Pohjolan Voima (PVO) will renovate the machinery of its hydropower plants on the Iijoki River and boost energy production. By employing new technology it is possible to increase the power of the plants by about 50 MW. The first phase of the work will be carried out at the Kierikki hydropower plant in 2006 and 2007 (see www.pvo.fi).

Bio Energy and Fuels Pohjolan Voima’s bio fuel program has involved investments of some 700 million euros ($870) in new power plants and an extensive research and development program to increase the use of forestry wood fuel and energy crops. The www.icongrouponline.com

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objective is to utilize biomass resources available from the forests and fields in the vicinity of power plants as efficiently as possible. Neste Oil (see www.neste.fi) has developed a new technology capable of producing high-quality diesel fuel from a variety of renewable raw materials. Known as NExBTL, this bio-to-liquid technology is one of the most promising innovations in the search for solutions to increase use of bio fuels on the road. The use of wood-based bio fuels accounts for 20% and the total use of biomass over 25% of Finland’s primary energy consumption. Combined heat and electricity production (CHP) based on local fuels accounts for the bulk of bio energy production in Finland. The main user of wood-based bio fuels is the forest industry, but a lot of bio fuels are also used in smaller municipal heating and power plants. Besides wood fuels, the role of recovered bio fuels, biogas, and bio liquors have grown substantially in recent years. Use of bio fuels in transport in Finland is negligible. A report by the Ministry of Trade and Industry set the target for the minimum use of bio fuel by the year 2005 at just 0.1%, well below the reference value of 2% given for EU member countries. The low target was attributed to the low starting point and limited national resources for the production of bio fuels from biomass. Unsurprisingly, the European Commission criticized Finland on this issue. According to the Ministry of Trade and Industry, Finland aims to develop, produce and market ethanol fuel drawing on Swedish model. The Ministry of Transport and Communications has also called for an increase in the use of bio fuels in transport.

Solar Power Due to Finland’s geographical location, the amount of solar radiation varies greatly throughout the year. In the summer, Finland usually receives more radiation energy from the sun than Central Europe does, but significantly less in the winter. Currently, solar power does not play a significant role in the Finnish energy market. Finland is in the first stages of exploiting of solar energy and the industrial activity associated with it. The theoretical potential of solar energy is huge, but the market segments for it in Finland are still small. The target set in the national climate program is to increase the annual production of solar energy to 100 gigawatt hours (GWh) by the year 2010. This is equivalent to the use of solar energy in 10,000-20,000 single-family homes.

Wind Power The Olkiluoto wind power plant was inaugurated in November 2004, and commercial operation started in 2005. TVO constructed the wind power plant to gain experience in the operation of a wind power plant in the climatic conditions of Olkiluoto. The wind power plant delivered to Olkiluoto is the first one in the product series and contains technology never previously used in a wind power plant. The wind power plant is manufactured by the Finnish company, WinWind Oy, and the domestic content of the plant is about 85% (see www.tuulivoimayhdistys.fi for on going wind energy projects, statistics, and location of wind power plants in Finland).

Wood Fuels Vapo (see www.vapo.fi) is a major supplier of wood fuels in Finland, with over 100 points of supply. In Sweden, Vapo’s subsidiary, Råsjö Torv, is also a leading supplier of wood fuels. In Finland, Vapo has supplied approximately 1.7 TWh in wood fuels to customers, 0.7 TWh of which was in forest chips.

Peat In Finland, peat is often used as a fuel for heat and power production together with wood fuels. Annual peat production amounts to about 20-25 million cubic meters. Peat is produced in summer, and the depth of rainfall affects it. Mainly milled peat, but also sod peat to some extent, is produced for energy use in Finland. In addition, 1-2 million cubic meters of garden peat are annually produced for both exports and domestic use. In Finland, peat has

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been defined as slowly renewing biomass fuel. It has a substantial share (6%) of Finland’s energy balance. As indigenous fuel, it has a considerable effect on regional policy, increases employment and security of energy supply. The National Climate Strategy aims to maintain peat as a competitive fuel for cogeneration of heat and power.

2.4

LATENT DEMAND: LEADING SEGMENTS

Finnish energy companies use open tenders according to EU regulations. The development of renewable energy is expected to offer opportunities for U.S. companies in introduction of innovative renewable energy source equipment technology. U.S. companies can also participate, in cooperation with Finnish companies, in TEKES (National Technology Agency) funded projects (www.tekes.fi). The U.S. Department of Energy and Finland’s Ministry of Trade and Industry have an implementing arrangement for cooperation in energy research and development.

2.5

KEY PLAYERS

•

Fortum Oyj: One of the Nordic countries’ leading energy companies. Its business covers generation, distribution, and sale of electricity and heat; operation and maintenance of power plants; and energy-related services. The company is present in more than 30 countries. In 2005, the company’s net sales totaled $4.7 billion, and it employed 8,950 people. Fortum’s shares are quoted on the Helsinki Stock Exchange (see www.fortum.com).

•

Pohjolan Voima Oy: A privately owned group of companies in the energy sector and produces electricity and heat for its shareholders in Finland. The Group also develops and maintains technology and services in its sector (see www.pvo.fi).

•

Teollisuuden Voima Oy (TVO): A privately-owned electricity generation company, owned by Finnish industrial and power companies. The company supplies electricity to its shareholders at cost price. The company owns and operates two nuclear power plant units on the west coast of Finland at Olkiluoto, in the municipality of Eurajoki. In addition to the nuclear power plant, TVO is also a shareholder in the Meri-Pori coal fired power plant (see www.tvo.fi).

•

Fingrid Oyj: Established in 1997, is the national grid operator in Finland. It is responsible for ensuring the technical reliability of the electricity transmission system in Finland. The company sells main grid services to all electricity market parties by applying equal terms. Fingrid maintains technical functionality and operational reliability of the Finnish power system as well as national power balance management. It is responsible for planning and supervision of operation of the main electricity transmission grid (see www.fingrid.fi).

2.6

KEY CONTACTS

•

Finnish Energy Industries: www.energia.fi

•

Energy Market Authority: www.energiamarkkinvirasto.fi

•

Ministry of Trade and Industry: www.ktm.fi

•

Finnish Wind Power Association: www.tuulivoimayhdistys.fi

•

Invest in Finland: www.investinfinland.fi

•

National Technology Agency (TEKES): www.tekes.fi

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10

3

3.1

FINANCIAL INDICATORS: STEAM, GAS AND HYDRAULIC TURBINES AND TURBINE GENERATOR SET UNITS OVERVIEW

Is Finland competitive? With the globalization of markets, the increased mobility of corporate assets, and the need for productive human resources, this question has become all the more complex to answer. The financial indicators section was prepared to tackle this question by focusing on certain fundamentals: financial performance and labor productivity. Rather than focus on the economy as a whole, the analysis presented here considers only one sector: steam, gas and hydraulic turbines and turbine generator set units. We are essentially interested in the degree to which firms operating in Finland have fundamentally different financial structures and performance compared to firms located elsewhere. With respect to this view of competitiveness, if one were to invest or operate in Finland, how would the firm’s asset structure likely vary compared to a firm operating in some other country in Europe or average location in the world? In Finland, do firms typically hold more cash and other short term assets, or do they concentrate their assets in physical plant and equipment? On the liability side, do firms operating in Finland have a higher percent of payables compared to other firms operating in Europe, or do they hold a higher concentration of long term debt? The structure of the income statement is also telling. Do firms operating in Finland have relatively higher costs of goods sold, operating costs, or income taxes compared to firms located elsewhere in the region or the world in general? Are returns on equity higher in Finland? Are profit margins greater? Are inventories held longer? The financial indicators section was designed to answer these and similar questions that naturally affect one’s decision to invest or operate in Finland. Again, we are particularly interested in steam, gas and hydraulic turbines and turbine generator set units, and not the economy as a whole. In many instances, people make all the difference. In addition to financial competitiveness, we consider the extent to which labor deployment and productivity in Finland differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Finland and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in steam, gas and hydraulic turbines and turbine generator set units operations)? What are typical capital-labor ratios? How different are these ratios to those in Europe in general and the world as a whole? What are the average sales and net profits per employee in Finland compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Finland at the global level for steam, gas and hydraulic turbines and turbine generator set units. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Finland against other countries on a worldwide basis. Doing so, however, is not an obvious task. This report generates international benchmarks and measures gaps that might be revealed from such an exercise. First, data is collected from companies across all regions of the world. For each of these firms, data are standardized into comparable categories (assets, liabilities, income and ratios), by country, region and on a worldwide basis. From there, we eliminate all currency effects by standardizing within each category. Global benchmarks are then compared to those estimated for steam, gas and hydraulic turbines and turbine generator set units in Finland. Though we heavily rely on historical performance, the figures reported are not historical but are forecasts and projections for the coming fiscal year.

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Financial Indicators

3.1.1

11

Financial Returns and Gaps in Finland

The approach used in this report to evaluate operating performance for steam, gas and hydraulic turbines and turbine generator set units in Finland is called "vertical analysis." For those unfamiliar with this type of analysis, frequently taught in graduate schools of business, the reader is recommended Jae K. Shim and Joel G. Siegel’s recent book titled Financial Management.1 In their discussion of financial statement analysis and ratios, Skim and Siegel (p. 4243), describe common-size statement (vertical analysis) as follows: A common-size statement is one that shows each item in percentage terms. Preparation of common-size statements is known as vertical analysis, in which a material financial statement item is used as a base value and all other accounts on the financial statement are compared to it. In the balance sheet, for example, total assets equal 100 percent, and each individual asset is stated as a percentage of total assets. Similarly, total liabilities and stockholders’ equity are assigned a value of 100 percent and each liability or equity account is then stated as a percentage of total liabilities and stockholders’ equity, respectively. … For the income statement, a value of 100 percent is assigned to net sales, and all other revenues and expense accounts are related to it. It is possible to see at a glance how each dollar of sales is distributed among various costs, expenses, and profits. The authors suggest that vertical analyses involve industry-based comparisons. Such a comparison “allows you to answer the question, ‘How does a business fare in the industry?’ You must compare the company’s ratios to… industry norms.” (p. 43-44) This approach is extended to country competitiveness (in this case Finland) for a particular sector (in this case steam, gas and hydraulic turbines and turbine generator set units). This involves calculating country, regional and global norms. This introduction will describe the seven-stage methodology used to perform this analysis. Each stage should be seen as a working assumption behind the numbers presented in later chapters. Stage 1. Industry Classification. This stage begins by classifying the company into an industry. For this, we have relied on a combination of the North American Industry Classification System (NAICS pronounced “Nakes”), a relatively new system for classifying business establishments, and the older Standard Industrial Classification (SIC) system. Adopted in 1997, NAICS codes are the new industry classification codes used by statistical agencies of the United States. NAICS was developed jointly by the U.S., Canada, and Mexico to provide comparability in statistics about business activity across North America. After 60 years of service, the outdated SIC system was retired on October 1, 2000, leaving only the NAICS codes for official use. The NAICS classification system adds some 350 new industries and represents a revision to over 60% of the previous SIC industries. Despite its official retirement, the SIC system is still commonly used (and often reported in firm’s financial statements). For most companies in the world, classification within either the new NAICS or older SIC systems is a rather straight forward exercise. For some, however, it can be problematic. This is true for several reasons. The first being that the SIC or NAICS classification systems are rather broad for many product and industry categories (a firm’s products or services may be only a minor aspect of the classification’s definition). The second is that some firms’ activities span multiple codes. Finally, it is possible that a firm is classified by one source using its SIC code, and by another using its NAICS code, and by a third using both. Furthermore, some sources do not report either code, but instead use qualitative statements of the firm’s activities. Nevertheless, if one wishes to pursue a vertical analysis, some classification needs to take place which selects a peer group. In making this classification, one can rely on a number of sources. In some countries, firms must “self” classify in official periodic reports (e.g. annular reports, 10Ks, etc.) to public authorities (such as the Securities and Exchange Commission). These reports are then open for public scrutiny (e.g. EDGAR filings). In other cases, commercial data vendors or private research firms provide SIC/NAICS codes for specific companies. These include: •

Bloomberg - www.bloomberg.com

1

Skim and Siegel (2000), Financial Management published by Barron’s Educational Series, Inc. (BARON’S BUSINESS LIBRARY Series), ISBN: 0-7641-1402-6. www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators •

12

Datastream (Thomson Financial) - www.datastream.com

•

Dun & Bradstreet - www.dnb.com

•

Hoovers - www.hoovers.com

•

HarrisInfoSource - www.HarrisInfo.com

•

InfoUSA - www.infousa.com

•

Investext (Thomson Financial) - www.investext.com

•

Kompass International Neuenschwander SA. – www.kompass.com

•

Moody's Investors Service - www.moodys.com

•

Primark (Thomson Financial) - www.primark.com

•

Profound (The Dialog Corporation – A Thomson Company) - www.profound.com

•

Reuters - www.reuters.com

•

Standard & Poor's - www.standardandpoors.com

It is interesting to note that commercial vendors often report different qualitative descriptions and industrial classifications from one to another. These descriptions and classifications may also be different from those reported by the firm itself. Anyone hoping to perform a benchmarking study, therefore, has to make a judgment call across these various sources in order to determine a reasonable classification. In this report, we have decided a metaanalytic process, by combining various sources (including linking a classification’s keywords to qualitative descriptions of the firm’s product line). In cases of inconsistency, the most recent or globally comparable available is chosen. Again, the overall goal is to classify firms, which either produce similar products, offer similar services, or are in the same stage of the value chain for a particular industrial classification. In the case of this report, the SIC code selected is: 3511 which is defined as “steam, gas and hydraulic turbines and turbine generator set units”. This classification should be seen as a working assumption. In order to obtain a more detailed discussion of this classification, the reader is referred to the Web sites developed by the U.S. Census Bureau: http://www.census.gov/epcd/www/naics.html. Basic definitions and descriptions are provided at: http://www.census.gov/epcd/www/drnaics.htm#q1. A full correspondence table between SIC and NAICS codes, and detailed definitions are given at http://www.census.gov/epcd/www/naicstab.htm. Stage 2. Firm-Level Data Collection. A global search was conducted across over 20,000 companies in over 40 major economies, including Finland, for those that report financials (balance sheet and income statements) and that are involved in steam, gas and hydraulic turbines and turbine generator set units. It should be noted that the publicdomain financials can be either historic or projections. It should also be noted that even historic figures can be modified in the future and often represent “estimates” of performance. Stage 3. Standardization. Once collected, public domain financial figures of firms identified in Stage 2 are standardize into comparable categories (assets, liabilities, and income). Again, these are limited to firms involved in some aspect of steam, gas and hydraulic turbines and turbine generator set units (i.e. are members of the value chain). From there, we eliminate all currency effects by standardizing within each category (creating ratios). In order to maintain comparability over time and across countries, vertical analysis is used. In the case of a firm’s assets, we treat the total assets as equaling 100, irrespective of the value of the local currency. All other assets are then calculated as a percent of total assets. In this way, the structure of the firm’s assets can be easily interpreted and compared with international benchmarks. For liabilities, total liabilities and equity are indexed to equal to 100. For the income statement, total revenue is indexed to equal 100, and all other figures are calculated as a percent of these figures. Stage 4. Filtering. Not all the firms selected in Stage 2 or the ratios calculated in Stage 3 are used for the country, regional or global benchmarks, as a number of companies are purposely dropped from the analysis. This is justified by the “outlier” phenomenon that plagues such analysis. The problem lies in that any given company in the benchmarking pool may be facing some exceptional event or may be organized in an exceptional way so as to make

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Financial Indicators

13

its ratios vastly different from the norm. By including such firms, the global benchmarks can be overly skewed. In many countries, firms are organized into holding groups. These groups nominally have very few employees (e.g. 4 to 25 employees), but have extremely large assets, liabilities, or revenues. As such, the inclusion or exclusion of firms having this form of management can affect the ratios and benchmarks reported. Likewise, some firms have no net sales, no assets, no liabilities, or ratios. Others have ratios that appear implausible for a normal or viable company. In order to not allow these firms to affect the global benchmarks, only those firms with reasonable financials have been chosen. Finally, in some countries, detailed financials are not available or are not comparable to either the company in question or the global norm (e.g. various forms of depreciation). In this case, only those which exist and are comparable are reported. The details, therefore, that comprise a given ratio or set of ratios may not be reported. This may lead to the addition of several ratios, not summing to the whole. Stage 5. Calculation of Global Norms. Once the filtering process has eliminated outliers, a final list of companies included is compiled. Based on this list, the ratios discussed in Stage 3 are calculated for every firm, and then averaged to create country, regional and global benchmarks. The world average is calculated using each country’s population as a weight. Stage 6. Projection of Deviations. The goal of this report is not only to estimate raw ratios or averages, but also to present the difference between Finland and projected global averages for that same ratio. Furthermore, it can be insightful to know the location of each ratio within the distribution of the countries represented in Stage 5. These deviations, in fact, can be seen as projections or likely scenarios for the future. This is often true for two reasons. First, while a company’s financials change from year to year, its ratios are often stable. This is especially true for the country, regional and global benchmarks which represent averages across companies. From a purely Bayesian sense, the difference between the company’s recent ratios and the benchmarks are a reasonable prior for future deviations. This is true, even if the entire industry is hit by an external or exogenous shock, such as an oil crisis or economic slowdown. In other words, we assume that the structure of the variance in the industry’s financials remains stable. Second, many of the data are based on preliminary reports that might be changed in future filings. As forecasts, therefore, the numbers derived from these are also forecasts of past and future performance (with associated uncertainties). The calculation of the difference between a country’s ratios and the global benchmarks is meant to yield roughly approximate forecasts, or "useful measures". Within Europe, the reliability of estimates varies from one country to another for those ratios given in tables that report national averages. This is true because reliable source statistics are not available for all countries in Europe. Countries with the highest reliability, or sample sizes after filtering in Stage 4, include Denmark, France, Germany, and Netherlands. Others are generally econometrically extrapolated using models that use country characteristics (e.g. income per capita) as independent variables (i.e. countries having similar economic structures are assumed to have similar operating ratios). Again, the forecasts are based on the assumption of relative stability. This assumption has proven extremely robust in previous applications of this methodology (i.e. today’s weather is a good predictor of tomorrow’s weather, but not the weather three years from now). The results reported should be viewed as those for a “proto-typical” firm operating in Finland whose primary activity is steam, gas and hydraulic turbines and turbine generator set units. Stage 7. Projection of Ranks and Percentiles. Based on the calculation of deviations, relative ranks and percentiles are calculated across the firms used in the benchmarks. The percentile estimates the percent of a representative sample of countries in the world having values of the ratio lower than Finland. It is important to note that a percentile being high (or low) does not mean good (or bad) past, present or future financial performance. The reader must draw this conclusion on their own. The estimates provided were created to provide managerial insight, and not a recommendation with respect to particular investments within any country. We graphically report, for each part of the financial statement, the larger structural differences between Finland and the regional and global benchmarks, and provide a summary table of ranks and percentiles. These are estimates for firm which would be involved in steam, gas and hydraulic turbines and turbine generator set units. A deviation from the global norm need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or perhaps signal a country's relative strength or weakness for the coming fiscal year.

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Financial Indicators

3.1.2

14

Labor Productivity Gaps in Finland

In the case of labor productivity measures, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. The seven stage approach given above is used in a similar manner. We then report, for each part of the financial statement, the larger labor productivity gaps that Finland has vis-à-vis the worldwide average (for steam, gas and hydraulic turbines and turbine generator set units). Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

3.1.3

Limitations and Extensions

Shim and Siegal (p. 60) stress that “while ratio analysis is an effective tool for assessing a company’s financial condition,” operating Finland or any other country, “its limitations must be recognized.” They find that (p. 59) “no single ratio or group of ratios is adequate for assessing all aspects of a company’s financial condition” operating in a particular country. The authors note the following limitations associated with ratio analyses which apply to the global benchmarking and vertical analysis presented here (p.60): •

Accounting standards or policies may limit useful comparisons across companies

•

Management accounting practices across companies and countries may not be performed in the same style

•

Ratios are static and do not reveal future trends

•

Ratios do not indicate the quality of the components used to calculate the ratios (i.e. ratios have ambiguous interpretations)

•

Reported ratios may not reflect real values

•

Companies may be highly diversified, limiting the comparability of their ratios to others

•

Industry averages or norms are approximate; finer industry definitions may be required for certain interpretations or comparisons

•

Financial statements and resulting ratios often mean different things to different people depending on their points of view or motivations.

Again, all figures reported here are estimates, so due caution is required. The above caveats, and the fact that statements made in this report are forward-looking, requires that this point be emphasized. A number of intervening factors can have material effect on the ratios and variances forecasted. These include changes in a company's management style, exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, and similar factors.

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Financial Indicators

3.2 3.2.1

15

FINANCIAL RETURNS IN FINLAND: ASSET STRUCTURE RATIOS Overview

In this chapter we consider the asset structure of companies involved in steam, gas and hydraulic turbines and turbine generator set units operating in Finland benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of assets is then presented for companies operating in Finland and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Finland and the benchmarks, graphics are provided (sometimes referred to as a financial “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis asset ratios are highlighted across countries in the comparison group.

3.2.2

Assets – Definitions of Terms

The following definitions are provided for those less familiar with the asset-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of assets, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accumulated Depreciation - Buildings. Accumulated depreciation is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of a fixed asset. Buildings are fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures typically include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and airconditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it generally does not include furniture, fixtures, or other equipment which are not an integral part of the building.

•

Accumulated Depreciation - Land. Accumulated depreciation of land is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of land as a fixed asset. If land is purchased, its capitalized value typically includes the purchase price plus costs such as legal fees, filling and excavation costs which are incurred to put the land in condition for its intended use. If land is acquired by gift, its capitalized value typically reflects its appraised value at time of acquisition. Land does not typically include depletable resources.

•

Accumulated Depreciation -Machinery & Equipment. Accumulated depreciation of machinery and equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of machinery and equipment.

•

Buildings. Buildings are defined as fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and air-conditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it does not include furniture, fixtures, or other equipment which are not an integral part of the building.

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Financial Indicators

16

•

Cash. Cash is typically defined as money on hand, on deposit with chartered bank, or held in the form of eligible securities.

•

Current Assets. Current assets are generally defined to be resources which are available, or can readily be made available, to meet the cost of operations or to pay current liabilities.

•

Deferred Charges. Deferred charges are generally understood to represent the amount which has been paid for services already received by the company but has not been charged to operations.

•

Finished Goods. Finished goods generally comprise the ready-for-sale inventory.

•

Intangible Other Assets. Intangible assets are generally understood to be nonphysical assets such as legal rights (patents and trademarks) recorded at their historical cost then reduced by systematic amortization.

•

Investments in Unconsolidated Subsidiaries. Investments in unconsolidated subsidiaries are typically defined as investments for the purpose of generating revenue in subsidiaries whose financial statements are not combined with the company's.

•

land. Land is generally considered to be a fixed asset. If land is purchased, its capitalized value typically includes the purchase price plus costs such as legal fees, filling and excavation costs which are incurred to put the land in condition for its intended use. If land is acquired by gift, its capitalized value typically reflects its appraised value at the time of acquisition. Land typically does not include depletable resources.

•

long Term Receivables. Long-term receivables are commonly defined as amounts due within a period exceeding one year from private persons, businesses, agencies, funds, or governmental units which are expected to be collected in the form of moneys, goods, and/or services.

•

Machinery & Equipment. Machinery and equipment is commonly defined as a fixed asset classification which typically includes tangible property (other than land, buildings, and improvements other than buildings) with a life of more than one year. Such assets typically include office equipment, furniture, machine tools, and motor vehicles. Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to an integral part of the building or structure, it will generally be classified as equipment and not buildings. Equipment is generally defined as tangible property other than land, buildings, or improvements other than buildings, which is used in operations. Examples include machinery, tools, trucks, cars, furniture, and furnishings.

•

Progress Payments. Progress payments are commonly defined as periodic payments to a supplier, contractor, or subcontractor for work as it is completed as desired, in order to reduce working capital requirements.

•

Property Plant and Equipment - Gross. Gross property, plant and equipment generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others.

•

Property Plant and Equipment - Net. Net PP&E equals the original cost of property, plant, and equipment (PP&E), less accumulated depreciation, depletion and amortization (DD&A).

•

Raw Materials. Raw materials are materials which will be converted by a manufacturer into a finished product.

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Financial Indicators

17

•

Receivables (Net). Net receivables are defined as the net amount due to the company from private persons, businesses, agencies, funds, or governmental units which is expected to be collected in the form of moneys, goods, and/or services.

•

Short Term Investments. Short-term investments are investments which can be typically liquidated in less than one year.

•

Tangible Other Assets. Other tangible assets are commonly understood to be something substantial or real that is capable of being given an actual or approximate value (market or estimated), not classified elsewhere.

•

Total Assets. Total assets are defined as the financial representation of economic resources, the beneficial interest in which is legally or equitably secured to a particular organization as a result of a past transaction or event.

•

Total Inventories. Total inventories are defined as the total amount of goods on hand.

•

Work in Process. Work in progress includes goods which have been started but are not yet ready for sale.

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Financial Indicators

3.2.3

18

Asset Structure: Outlook

Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Finland. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Finland based on latest financial results available. Asset Structure Finland Europe World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

11.85 11.34 2.08 26.16 24.51 8.28 4.76 6.34 2.94 1.94 64.46 1.73 0.98 2.59 23.18 41.95 1.76 12.92 25.13 2.13 20.55 0.16 4.17 15.66 0.66 8.51 0.35 0.07 7.83 100.00

9.00 6.65 4.67 28.55 17.79 4.76 5.79 7.09 0.79 0.99 56.47 1.17 1.64 6.53 24.97 42.67 3.49 11.49 22.16 6.61 21.48 0.08 4.02 14.56 4.16 5.54 0.96 0.36 4.31 100.00

11.41 5.50 5.35 27.15 16.97 5.25 3.51 5.61 0.54 1.23 57.46 0.66 1.56 4.78 25.30 51.05 1.79 8.80 31.90 5.20 27.21 0.08 3.05 19.93 2.34 4.21 0.65 0.61 2.24 100.00

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Financial Indicators

3.2.4

19

Large Variances: Assets

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large asset structure gaps between firms operating in Finland and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cash 12

11.34

10 8

6.65

6

5.5

5.84

4 2 0 Finland

Europe

World Average

Gap

Gap: Short Term Investments 6 4 2

4.67

5.35

2.08

0 -2 -3.27

-4 Finland

Europe

World Average

Gap

Gap: Total Inventories 25

24.51 17.79

20

16.97

15 7.54

10 5 0 Finland

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Europe

World Average

Gap

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Financial Indicators

20

Gap: Current Assets - Total 80

64.46

60

56.47

57.46

40 20

7

0 Finland

Europe

World Average

Gap

Gap: Property Plant and Equipment - Gross 60 41.95

42.67

51.05

40 20 0

-9.1

-20 Finland

Europe

World Average

Gap

Gap: Buildings 15

12.92

11.49 8.8

10

4.12

5 0 Finland

Europe

World Average

Gap

Gap: Machinery & Equipment 40 30

31.9 25.13

22.16

20 10 0 -6.77

-10 Finland

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Europe

World Average

Gap

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Financial Indicators

21

Gap: Accumulated Depreciation - Total 27.21

30 20

20.55

21.48

10 0 -6.66

-10 Finland

Europe

World Average

Gap

Gap: Accumulated Depreciation -Machinery & Equipment 20

19.93 15.66

14.56

Finland

Europe

15 10 5 0 -5

World Average

-4.27 Gap

Gap: Other Assets 10

8.51

8 5.54

6

4.21

4.3

4 2 0 Finland

Europe

World Average

Gap

Gap: Intangible Other Assets 8

7.83 5.59

6

4.31

4

2.24

2 0 Finland

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Europe

World Average

Gap

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Financial Indicators

3.2.5

22

Key Percentiles and Rankings

We now consider the distribution of asset ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Finland (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of asset structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical asset ratios are highlighted in additional tables. Asset Structure

Finland

Rank of Total

Percentile

11.85 11.34 2.08 26.16 24.51 8.28 4.76 6.34 2.94 1.94 64.46 1.73 0.98 2.59 23.18 41.95 1.76 12.92 25.13 2.13 20.55 0.16 4.17 15.66 0.66 8.51 0.35 0.07 7.83 100.00

24 of 53 7 of 46 32 of 42 29 of 53 15 of 53 12 of 46 14 of 46 23 of 46 3 of 44 12 of 47 16 of 53 9 of 40 27 of 43 16 of 39 34 of 53 34 of 49 26 of 37 15 of 44 25 of 46 40 of 45 28 of 49 6 of 10 20 of 39 24 of 43 41 of 42 13 of 53 16 of 36 30 of 35 12 of 43

54.72 84.78 23.81 45.28 71.70 73.91 69.57 50.00 93.18 74.47 69.81 77.50 37.21 58.97 35.85 30.61 29.73 65.91 45.65 11.11 42.86 40.00 48.72 44.19 2.38 75.47 55.56 14.29 72.09

_________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

23

Cash & Short Term Investments Countries

Value (total assets = 100)

Rank

Percentile

22.46 22.29 22.10 20.17 19.72 19.10 18.47 17.20 16.72 16.48 16.28 15.53 15.50 14.82 14.36 14.17 12.80 12.66 12.64 12.39 11.85 11.41 11.40 11.25 10.76 10.72 10.48 9.83 9.66 9.45 9.31 8.53 6.36 6.27 5.03 4.50 4.42 3.68 3.02 2.94 0.74 0.70 0.50 0.50 0.40

1 2 3 4 5 6 8 9 10 11 12 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 37 38 39 41 43 44 45 46 47 48 49 50 51 53

98.11 96.23 94.34 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 30.19 28.30 26.42 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Hong Kong Israel Ireland South Africa Indonesia Australia China South Korea Norway Singapore Japan USA Russia Canada Spain France Malaysia Taiwan Greece Switzerland Finland the United Kingdom Pakistan Czech Republic Philippines Luxembourg Argentina Belgium Italy Germany India Sweden Austria Thailand Denmark Hungary Netherlands Poland Peru New Zealand Brazil Chile Turkey Mexico Portugal

Asia the Middle East Europe Africa Asia Oceana Asia Asia Europe Asia Asia North America Europe North America Europe Europe Asia Asia Europe Europe Europe Europe the Middle East Europe Asia Europe Latin America Europe Europe Europe Asia Europe Europe Asia Europe Europe Europe Europe Latin America Oceana Latin America Latin America the Middle East Latin America Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

24

Cash & Short Term Investments (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total assets = 100)

Rank

Percentile

22.10 21.53 16.72 16.58 15.98 15.83 15.79 15.69 15.50 15.46 14.36 14.17 13.48 12.64 12.39 11.85 11.71 11.57 11.56 11.41 11.25 10.72 10.68 10.67 9.83 9.74 9.66 9.45 8.53 6.36 6.30 6.14 6.14 5.03 4.50 4.42 4.05 3.85 3.79 3.68 3.31 3.19 3.18 3.05 2.64 0.47 0.43 0.42 0.41 0.40 0.38

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Ireland Faroe Islands Norway Estonia Monaco Belarus Slovakia Iceland Russia Lithuania Spain France Slovenia Greece Switzerland Finland Malta Liechtenstein Isle of Man the United Kingdom Czech Republic Luxembourg Latvia Croatia Belgium Vatican City Italy Germany Sweden Austria San Marino Jersey Guernsey Denmark Hungary Netherlands Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Andorra Albania Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Portugal Cyprus

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

25

Receivables (Net) Countries

Value (total assets = 100)

Rank

Percentile

48.48 47.07 40.55 39.45 37.74 37.64 37.09 36.10 35.58 34.41 33.62 33.54 32.87 32.60 31.81 30.71 30.57 30.43 30.27 28.75 28.25 28.08 27.97 27.45 27.38 27.24 26.16 26.11 25.65 25.20 25.08 25.07 24.40 24.35 22.74 22.62 22.21 21.94 21.69 21.23 21.15 19.07 18.76 18.35 15.60

1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 45 46 47 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 3.77

Region

_________________________________________________________________________________________________________

Spain Portugal Greece India Turkey Mexico France Czech Republic Italy Philippines Argentina Netherlands Israel Ireland Malaysia Pakistan Austria the United Kingdom South Africa Denmark Sweden Norway Germany Japan Belgium Peru Finland New Zealand Brazil Singapore Switzerland Taiwan Chile South Korea Canada Hong Kong USA Russia Luxembourg China Thailand Hungary Indonesia Australia Poland

Europe Europe Europe Asia the Middle East Latin America Europe Europe Europe Asia Latin America Europe the Middle East Europe Asia the Middle East Europe Europe Africa Europe Europe Europe Europe Asia Europe Latin America Europe Oceana Latin America Asia Europe Asia Latin America Asia North America Asia North America Europe Europe Asia Asia Europe Asia Oceana Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

26

Receivables (Net) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total assets = 100)

Rank

Percentile

48.48 47.07 45.51 45.06 40.55 37.58 37.09 37.08 36.10 35.87 35.86 35.58 34.26 34.25 33.54 32.91 32.60 31.98 30.85 30.57 30.43 30.28 29.52 29.52 28.75 28.25 28.08 27.97 27.38 27.04 26.16 25.08 24.44 23.78 23.48 23.40 22.44 22.41 22.36 21.94 21.89 21.69 21.69 19.07 17.15 16.31 16.05 15.60 14.02 13.49 13.47

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Spain Portugal Slovenia Cyprus Greece Malta France Isle of Man Czech Republic Vatican City Romania Italy Latvia Croatia Netherlands Bosnia & Herzegovina Ireland Macedonia Serbia & Montenegro Austria the United Kingdom San Marino Jersey Guernsey Denmark Sweden Norway Germany Belgium Andorra Finland Switzerland Monaco Albania Estonia Liechtenstein Iceland Belarus Slovakia Russia Lithuania Faroe Islands Luxembourg Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

27

Total Inventories Countries

Value (total assets = 100)

Rank

Percentile

39.81 39.65 36.42 31.72 29.43 29.36 28.95 27.32 26.04 25.68 25.57 25.46 25.35 24.70 24.51 24.33 21.52 21.50 21.05 20.66 18.50 18.26 18.25 17.67 17.52 17.47 16.81 16.23 15.53 15.46 15.31 15.28 15.27 14.91 14.52 14.45 14.00 13.99 13.88 13.46 12.49 9.94 8.25 7.20 7.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 29 31 32 33 34 35 36 37 38 40 41 42 43 45 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 15.09 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Pakistan Peru South Africa Denmark Australia Portugal Italy New Zealand Germany Israel Brazil Ireland Netherlands France Finland Chile Sweden the United Kingdom Norway Thailand China USA Austria Switzerland Hong Kong Spain Belgium Greece South Korea Singapore Japan Luxembourg Hungary India Canada Czech Republic Philippines Russia Indonesia Argentina Poland Malaysia Taiwan Turkey Mexico

the Middle East Latin America Africa Europe Oceana Europe Europe Oceana Europe the Middle East Latin America Europe Europe Europe Europe Latin America Europe Europe Europe Asia Asia North America Europe Europe Asia Europe Europe Europe Asia Asia Asia Europe Europe Asia North America Europe Asia Europe Asia Latin America Europe Asia Asia the Middle East Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

28

Total Inventories (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total assets = 100)

Rank

Percentile

34.61 31.72 29.36 29.18 28.95 28.29 28.11 26.04 25.46 25.35 24.70 24.51 21.52 21.50 21.05 18.44 18.25 18.08 17.67 17.63 17.63 17.47 16.81 16.80 16.49 16.40 16.23 15.28 15.27 15.05 14.99 14.97 14.85 14.45 14.28 14.25 13.99 13.96 13.74 13.72 13.71 13.06 12.86 12.49 11.23 10.81 10.79 6.84 6.28 6.10 5.88

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Albania Denmark Portugal Vatican City Italy Andorra Cyprus Germany Ireland Netherlands France Finland Sweden the United Kingdom Norway Iceland Austria San Marino Switzerland Jersey Guernsey Spain Belgium Faroe Islands Liechtenstein Slovenia Greece Luxembourg Hungary Malta Monaco Estonia Isle of Man Czech Republic Belarus Slovakia Russia Lithuania Ukraine Latvia Croatia Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

29

Current Assets - Total Countries

Value (total assets = 100)

Rank

Percentile

86.90 83.62 82.93 82.17 80.55 76.94 76.42 75.70 71.16 70.76 69.08 67.43 66.94 65.90 65.79 64.46 64.18 63.35 62.69 62.23 62.21 60.13 60.12 60.06 59.39 59.01 58.46 58.29 57.88 57.61 56.81 56.68 56.05 55.66 54.70 54.01 53.99 53.70 52.68 51.37 49.83 45.44 45.32 38.85 31.77

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 41 42 44 45 46 51 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 22.64 20.75 16.98 15.09 13.21 3.77 0.00

Region

_________________________________________________________________________________________________________

South Africa Israel Ireland Pakistan Spain Portugal France Italy Greece Peru Denmark Norway Germany the United Kingdom India Finland Netherlands Czech Republic Hong Kong Japan Australia USA China Sweden Philippines Argentina South Korea Singapore Taiwan Switzerland New Zealand Austria Indonesia Canada Malaysia Belgium Brazil Thailand Russia Chile Luxembourg Turkey Mexico Hungary Poland

Africa the Middle East Europe the Middle East Europe Europe Europe Europe Europe Latin America Europe Europe Europe Europe Asia Europe Europe Europe Asia Asia Oceana North America Asia Europe Asia Latin America Asia Asia Asia Europe Oceana Europe Asia North America Asia Europe Latin America Asia Europe Latin America Europe the Middle East Latin America Europe Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

30

Current Assets - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total assets = 100)

Rank

Percentile

82.93 80.55 76.94 76.42 76.31 75.70 75.62 73.65 71.16 69.08 67.43 66.94 65.95 65.90 65.08 64.46 64.18 63.35 61.77 60.75 60.13 60.12 60.10 60.06 58.83 57.61 56.68 56.53 56.36 56.14 54.74 54.74 54.01 53.79 53.76 53.66 52.68 52.55 49.83 43.17 39.62 38.85 38.51 37.14 34.93 33.22 32.70 31.77 28.57 27.49 27.44

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Ireland Spain Portugal France Vatican City Italy Slovenia Cyprus Greece Denmark Norway Germany Malta the United Kingdom Isle of Man Finland Netherlands Czech Republic Albania Iceland Latvia Faroe Islands Croatia Sweden Andorra Switzerland Austria Monaco Estonia San Marino Guernsey Jersey Belgium Belarus Liechtenstein Slovakia Russia Lithuania Luxembourg Romania Bosnia & Herzegovina Hungary Macedonia Serbia & Montenegro Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

31

Property Plant and Equipment - Net Countries

Value (total assets = 100)

Rank

Percentile

60.82 49.74 42.66 40.91 40.59 40.39 35.78 35.48 33.50 32.37 30.55 29.91 29.40 29.17 28.69 28.27 28.01 27.84 27.32 27.30 26.60 25.17 24.64 24.45 24.30 23.31 23.18 22.56 22.36 21.41 20.81 17.57 16.34 15.64 15.45 14.57 14.37 11.74 11.73 9.11 9.04 7.99 6.76 5.72 5.71

1 2 3 4 5 6 7 8 11 13 15 16 18 19 20 21 22 23 24 25 26 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 79.25 75.47 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Hungary Poland Brazil Thailand Chile Philippines Singapore Indonesia Malaysia South Korea China Canada New Zealand Russia Netherlands Switzerland Taiwan Peru Australia Japan Austria the United Kingdom Sweden Luxembourg Hong Kong Denmark Finland Germany India USA Portugal Greece Norway Czech Republic Spain Argentina Italy Pakistan France Israel Ireland Belgium South Africa Turkey Mexico

Europe Europe Latin America Asia Latin America Asia Asia Asia Asia Asia Asia North America Oceana Europe Europe Europe Asia Latin America Oceana Asia Europe Europe Europe Europe Asia Europe Europe Europe Asia North America Europe Europe Europe Europe Europe Latin America Europe the Middle East Europe the Middle East Europe Europe Africa the Middle East Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

32

Property Plant and Equipment - Net (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total assets = 100)

Rank

Percentile

60.82 54.69 52.00 51.20 49.74 44.72 43.04 42.96 34.70 31.21 30.44 29.78 29.72 29.17 29.10 28.69 28.27 26.60 26.38 26.35 25.69 25.69 25.17 24.64 24.45 24.30 23.31 23.30 23.18 22.56 21.63 20.81 19.92 17.57 16.34 16.28 16.07 15.64 15.45 14.85 14.84 14.51 14.49 14.37 11.73 9.04 7.99 5.44 4.99 4.85 4.68

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Monaco Estonia Andorra Belarus Slovakia Russia Lithuania Netherlands Switzerland Austria Liechtenstein San Marino Jersey Guernsey the United Kingdom Sweden Luxembourg Albania Denmark Faroe Islands Finland Germany Iceland Portugal Cyprus Greece Norway Malta Isle of Man Czech Republic Spain Latvia Croatia Slovenia Vatican City Italy France Ireland Belgium Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

33

Accumulated Depreciation - Total Countries

Value (total assets = 100)

Rank

Percentile

81.92 76.67 72.95 58.66 47.42 43.93 38.09 38.01 34.66 32.91 30.96 29.08 27.56 27.56 27.13 26.77 26.47 25.42 25.31 23.44 21.19 21.05 20.55 20.05 20.00 18.90 18.66 18.44 16.87 16.81 16.22 15.85 15.72 15.15 9.65 9.63 9.02 7.19 6.40 5.96 5.29

1 2 3 4 5 6 8 9 11 13 14 16 17 18 19 20 21 23 24 25 26 27 28 29 30 32 33 34 36 37 38 39 40 41 42 43 44 46 47 48 49

97.96 95.92 93.88 91.84 89.80 87.76 83.67 81.63 77.55 73.47 71.43 67.35 65.31 63.27 61.22 59.18 57.14 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 34.69 32.65 30.61 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 6.12 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Peru Brazil Chile Belgium Philippines Thailand Japan Germany India Austria Switzerland Netherlands New Zealand Indonesia Australia Luxembourg Sweden USA the United Kingdom France China Denmark Finland Canada Singapore Norway South Korea Spain Italy Russia Malaysia Israel Ireland Hong Kong Turkey Mexico South Africa Greece Czech Republic Argentina Taiwan

Latin America Latin America Latin America Europe Asia Asia Asia Europe Asia Europe Europe Europe Oceana Asia Oceana Europe Europe North America Europe Europe Asia Europe Europe North America Asia Europe Asia Europe Europe Europe Asia the Middle East Europe Asia the Middle East Latin America Africa Europe Europe Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

34

Accumulated Depreciation - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total assets = 100)

Rank

Percentile

71.51 58.66 38.01 32.91 32.59 31.78 31.78 30.96 29.08 28.89 28.54 26.77 26.47 25.68 25.31 23.44 21.05 20.55 19.39 18.90 18.44 17.99 17.32 17.17 17.13 17.00 16.87 16.81 16.77 15.72 14.53 9.17 8.42 8.18 7.89 7.19 6.66 6.58 6.40 6.07 6.07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

97.56 95.12 92.68 90.24 87.80 85.37 82.93 80.49 78.05 75.61 73.17 70.73 68.29 65.85 63.41 60.98 58.54 56.10 53.66 51.22 48.78 46.34 43.90 41.46 39.02 36.59 34.15 31.71 29.27 26.83 24.39 21.95 19.51 17.07 14.63 12.20 9.76 7.32 4.88 2.44 0.00

_________________________________________________________________________________________________________

Albania Belgium Germany Austria San Marino Guernsey Jersey Switzerland Netherlands Liechtenstein Andorra Luxembourg Sweden Iceland the United Kingdom France Denmark Finland Monaco Norway Spain Estonia Slovenia Belarus Slovakia Vatican City Italy Russia Lithuania Ireland Faroe Islands Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Czech Republic Latvia Croatia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

35

Intangible Other Assets Countries

Value (total assets = 100)

Rank

Percentile

29.27 14.53 12.58 12.03 10.07 9.91 9.72 8.97 8.70 8.28 7.83 7.20 6.94 6.74 6.71 6.10 4.97 3.59 2.56 2.34 2.19 2.17 2.08 2.01 2.01 1.98 1.94 1.50 1.35 1.15 1.04 0.89 0.54 0.33 0.31 0.31 0.27 0.27

1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 40 41

97.67 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 6.98 4.65

Region

_________________________________________________________________________________________________________

Belgium USA Canada Norway Switzerland Australia Sweden France Luxembourg Austria Finland Malaysia New Zealand Germany Italy the United Kingdom Denmark Singapore Spain Greece Israel Ireland Czech Republic Hong Kong Netherlands China Argentina South Korea Russia India Japan Peru South Africa Hungary Turkey Mexico Poland Thailand

Europe North America North America Europe Europe Oceana Europe Europe Europe Europe Europe Asia Oceana Europe Europe Europe Europe Asia Europe Europe the Middle East Europe Europe Asia Europe Asia Latin America Asia Europe Asia Asia Latin America Africa Europe the Middle East Latin America Europe Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

36

Intangible Other Assets (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total assets = 100)

Rank

Percentile

29.27 14.68 12.03 10.07 9.72 9.39 8.97 8.70 8.28 8.20 8.00 8.00 7.83 7.19 6.77 6.74 6.71 6.10 4.97 3.48 2.56 2.40 2.34 2.17 2.17 2.14 2.08 2.01 1.98 1.98 1.93 1.44 1.38 1.37 1.35 1.35 0.77 0.33 0.30 0.30 0.29 0.28 0.27 0.27 0.26 0.25 0.25 0.24 0.24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

97.96 95.92 93.88 91.84 89.80 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 65.31 63.27 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00

_________________________________________________________________________________________________________

Belgium Iceland Norway Switzerland Sweden Liechtenstein France Luxembourg Austria San Marino Jersey Guernsey Finland Andorra Vatican City Germany Italy the United Kingdom Denmark Monaco Spain Slovenia Greece Ireland Malta Isle of Man Czech Republic Netherlands Latvia Croatia Faroe Islands Estonia Belarus Slovakia Russia Lithuania Albania Hungary Ukraine Romania Gibraltar Georgia Poland Bosnia & Herzegovina Macedonia Serbia & Montenegro Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.3 3.3.1

37

FINANCIAL RETURNS IN FINLAND: LIABILITY STRUCTURE RATIOS Overview

In this chapter we consider the liability structure of firms operating in Finland benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of liabilities and shareholder equity is then presented for the proto-typical firm operating in Finland and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in steam, gas and hydraulic turbines and turbine generator set units in Finland. For ratios where there are large deviations between Finland and the benchmarks, graphics are provided (total liabilities and equity = 100 percent). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis liability ratios are highlighted.

3.3.2

Liabilities and Equity – Definitions of Terms

The following definitions are provided for those less familiar with the liability-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of liabilities and equity, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Payable. Accounts payable are defined as amounts owed on open account to private persons or organizations for goods or services received.

•

Accrued Payroll. Accrued payroll is defined as the cost of payroll that has been incurred but has not yet been paid. Payroll is typically defined as comprising records detailing the salaries, wages, allowances and deductions for each employee for a specific period of time.

•

Capital Surplus. Capital surplus is commonly defined as an amount of equity which is directly contributed capital in excess of the par value.

•

Common Equity. Common equity is defined to equal the company's net worth. It typically comprises capital stock, capital surplus, retained earnings, and, in some cases, net worth reserves. Common equity is the portion of total net worth belonging to the common stockholders. Synonyms which are often used for common equity are “common stock” and “net worth”.

•

Common Stock. Common stock is defined as the securities which represent the company's ownership interest. Common stockholders typically assume greater risk than preferred stockholders; although common stockholders maintain greater control and generally greater dividends and capital appreciation. Common stock can be used interchangeably with the term capital stock when the company has no preferred stock.

•

Current Liabilities - Total. Total current liabilities are defined as the total amount of obligations which would require the use of current assets or other current liabilities to pay.

•

Current Portion of Long Term Debt. The current proportion of long term debt is typically defined as debt which is payable in more than one year.

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Financial Indicators

38

•

Deferred Taxes. Deferred taxes are compulsory charges from a previous accounting period which are yet unpaid.

•

Deferred Taxes - Credit. Deferred tax credits are defined as credits against compulsory charges from a previous accounting period which are yet unpaid.

•

Income Taxes Payable. Income taxes payable are understood to mean taxes which are levied by state, federal, and local governments on the company's reported accounting profit. Income taxes payable are those which are due in the current accounting period.

•

Long Term Debt. Long-term debt is defined to be due in a period exceeding one year or one operating cycle, whichever is longer. Long-term debt can have an extended repayment period such as a many-year mortgage on land and buildings, or debt that's intended to be permanent such as bonds issued to investors.

•

Long Term Debt Excluding Capitalized Leases. Long term debt excluding capitalized leases is defined as debt which is typically due in a period exceeding one year or one operating cycle, whichever is longer, less capitalized leases (see Long Term Debt for exceptions). Capital leases are generally recorded as assets with liability at the current value of the lease payment.

•

Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.

•

Non-Equity Reserves. Non-equity reserves are the amount set aside for losses or liabilities which are certain to arise but cannot be quantified with certainty, and are not part of the firm’s equity.

•

Retained Earnings. proprietary funds.

•

Shareholders Equity. Shareholders equity is commonly defined to be the amount of total equity reserved for common and preferred shareholders.

•

Short Term Debt. Short term debt is generally defined as debt payable within one year.

•

Total Liabilities. Total liabilities are generally defined to include all the claims against a corporation. Liabilities include accounts and wages and salaries payable, dividends declared payable, accrued taxes payable, fixed or long-term liabilities such as mortgage bonds, debentures, and bank loans.

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Retained earnings is an equity account reflecting the accumulated earnings of

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Financial Indicators

3.3.3

39

Liability Structure: Outlook

Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Finland. To allow comparable benchmarking, a common index of Total Liabilities & Shareholders Equity = 100 is used. All figures are current-year projections for companies operating in Finland based on latest financial results available. Liability Structure Finland Europe World Avg. _________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Income Taxes Payable Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Provision For Risks and Charges Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Unappropriated Reserves Retained Earnings Unrealized Foreign Exchange Gain/Loss Treasury Stock Total Liabilities & Shareholders Equity

8.18 10.04 3.62 1.13 15.45 36.11 19.13 19.13 1.45 0.77 0.76 1.07 1.02 57.68 2.21 0.74 39.57 7.76 15.31 0.14 4.29 -0.04 18.96 -1.36 0.80 100.00

12.07 12.07 2.96 1.81 12.86 36.78 9.95 9.81 4.50 0.24 1.08 1.00 0.94 50.49 0.63 0.91 41.30 12.32 13.95 1.42 7.07 7.03 9.93 -0.38 0.57 100.00

12.85 10.39 0.93 1.08 11.64 36.82 6.27 6.20 1.50 0.48 1.11 0.71 0.63 45.11 0.08 1.39 46.61 12.23 12.32 0.77 4.64 11.54 7.24 -0.05 0.34 100.00

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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©2007 Icon Group International, Inc.

Financial Indicators

3.3.4

40

Large Variances: Liabilities

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large liability structure gaps between firms operating in Finland and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Accounts Payable 15 10

12.07

12.85

8.18

5 0 -5 Finland

Europe

World Average

-4.67 Gap

Gap: Accrued Payroll 4

3.62 2.96

3

2.69

2 0.93

1 0 Finland

Europe

World Average

Gap

Gap: Other Current Liabilities 20 15.45 12.86

15

11.64

10 3.81

5 0 Finland

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

41

Gap: Long Term Debt 20

19.13 12.86

15 9.95

10

6.27

5 0 Finland

Europe

World Average

Gap

Gap: Long Term Debt Excluding Capitalized Leases 20

19.13 12.93

15 9.81

10

6.2

5 0 Finland

Europe

World Average

Gap

Gap: Total Liabilities 60

57.68 50.49

50

45.11

40 30 20

12.57

10 0 Finland

Europe

World Average

Gap

Gap: Common Equity 50 40

39.57

41.3

Finland

Europe

46.61

30 20 10 0

-7.04

-10

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World Average

Gap

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Financial Indicators

42

Gap: Common Stock 15 10

12.32

12.23

7.76

5 0 -4.47 Gap

-5 Finland

Europe

World Average

Gap: Capital Surplus 20 15

15.31

13.95

12.32

10 2.99

5 0 Finland

Europe

World Average

Gap

Gap: Unappropriated Reserves 15

11.54 7.03

10 5 0

0.04

-5 -10

-11.5

-15 Finland

Europe

World Average

Gap

Gap: Retained Earnings 20

18.96

15

11.72

9.93

10

7.24

5 0 Finland

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.3.5

43

Key Percentiles and Rankings

We now consider the distribution of liability ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Finland (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of liability structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical liability ratios are highlighted in additional tables. Liability Structure

Finland

Rank of Total

Percentile

8.18 10.04 3.62 1.13 15.45 36.11 19.13 19.13 1.45 0.77 0.76 1.07 1.02 57.68 2.21 0.74 39.57 7.76 15.31 0.14 4.29 -0.04 18.96 -1.36 0.80 100.00

44 of 50 24 of 53 6 of 26 23 of 43 17 of 53 26 of 53 4 of 48 4 of 48 22 of 39 15 of 39 15 of 26 16 of 27 14 of 43 14 of 53 4 of 26 29 of 41 37 of 53 34 of 46 17 of 41 26 of 33 16 of 49 33 of 37 15 of 48 32 of 34 10 of 21

12.00 54.72 76.92 46.51 67.92 50.94 91.67 91.67 43.59 61.54 42.31 40.74 67.44 73.58 84.62 29.27 30.19 26.09 58.54 21.21 67.35 10.81 68.75 5.88 52.38

_________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Income Taxes Payable Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Provision For Risks and Charges Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Unappropriated Reserves Retained Earnings Unrealized Foreign Exchange Gain/Loss Treasury Stock Total Liabilities & Shareholders Equity

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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©2007 Icon Group International, Inc.

Financial Indicators

44

Accounts Payable Countries

Value (total liabilities & equity = 100)

Rank

Percentile

31.84 24.17 22.32 20.60 20.15 19.56 18.99 18.07 15.66 15.51 15.18 14.89 14.85 14.78 14.52 13.84 13.66 13.56 13.26 13.18 13.15 12.44 12.35 11.85 11.72 11.53 11.19 10.99 10.84 10.30 9.38 9.10 9.02 8.97 8.95 8.78 8.71 8.18 7.33 7.01 7.00 2.06

1 2 3 4 5 6 7 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 34 36 37 38 39 40 42 43 44 46 47 48 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 82.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 46.00 44.00 42.00 40.00 38.00 36.00 32.00 28.00 26.00 24.00 22.00 20.00 16.00 14.00 12.00 8.00 6.00 4.00 0.00

Region

_________________________________________________________________________________________________________

Belgium Italy Spain Philippines India France Brazil Chile Japan Hong Kong Singapore Greece Taiwan Netherlands the United Kingdom New Zealand Canada Norway Czech Republic Denmark South Korea Sweden Argentina Russia Australia Thailand Austria Indonesia Switzerland China Luxembourg Germany USA Hungary Malaysia Israel Ireland Finland Poland Turkey Mexico Peru

Europe Europe Europe Asia Asia Europe Latin America Latin America Asia Asia Asia Europe Asia Europe Europe Oceana North America Europe Europe Europe Asia Europe Latin America Europe Oceana Asia Europe Asia Europe Asia Europe Europe North America Europe Asia the Middle East Europe Europe Europe the Middle East Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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©2007 Icon Group International, Inc.

Financial Indicators

45

Accounts Payable (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total liabilities & equity = 100)

Rank

Percentile

31.84 24.37 24.17 22.32 20.95 19.56 14.89 14.87 14.78 14.72 14.52 14.33 13.80 13.62 13.56 13.26 13.18 12.68 12.58 12.58 12.44 12.10 12.07 11.85 11.82 11.19 11.08 10.84 10.80 10.80 10.12 9.38 9.11 9.10 8.97 8.71 8.18 8.06 7.67 7.55 7.33 6.66 6.59 6.34 6.33 6.12 5.94 5.73 1.80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

97.96 95.92 93.88 91.84 89.80 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 65.31 63.27 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00

_________________________________________________________________________________________________________

Belgium Vatican City Italy Spain Slovenia France Greece Faroe Islands Netherlands Monaco the United Kingdom Andorra Malta Isle of Man Norway Czech Republic Denmark Estonia Latvia Croatia Sweden Belarus Slovakia Russia Lithuania Austria San Marino Switzerland Guernsey Jersey Liechtenstein Luxembourg Iceland Germany Hungary Ireland Finland Ukraine Gibraltar Georgia Poland Romania Moldova Kazakhstan Bulgaria Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

46

Current Liabilities - Total Countries

Value (total liabilities & equity = 100)

Rank

Percentile

60.54 58.44 57.60 52.51 52.20 49.47 48.47 47.78 45.62 44.98 42.99 42.62 41.74 41.66 41.58 41.02 40.85 40.74 40.61 40.11 39.05 37.83 37.20 36.79 36.11 35.29 34.60 33.26 33.15 33.01 32.94 31.08 31.01 30.90 30.83 29.13 28.86 28.55 27.30 26.03 25.68 25.51 25.28 23.73 23.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 30 31 32 33 34 35 36 37 38 39 40 41 42 45 46 47 50 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 15.09 13.21 11.32 5.66 3.77

Region

_________________________________________________________________________________________________________

Brazil Spain Chile South Africa Pakistan Italy Portugal Taiwan Greece France Norway the United Kingdom Austria China India Denmark Turkey Mexico Czech Republic Belgium Netherlands Argentina Japan South Korea Finland Hungary Hong Kong Sweden Russia Switzerland Germany Israel Thailand Singapore Ireland Philippines Poland Luxembourg Peru USA Malaysia Australia Canada New Zealand Indonesia

Latin America Europe Latin America Africa the Middle East Europe Europe Asia Europe Europe Europe Europe Europe Asia Asia Europe the Middle East Latin America Europe Europe Europe Latin America Asia Asia Europe Europe Asia Europe Europe Europe Europe the Middle East Asia Asia Europe Asia Europe Europe Latin America North America Asia Oceana North America Oceana Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

47

Current Liabilities - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total liabilities & equity = 100)

Rank

Percentile

58.44 54.86 49.87 49.47 48.47 46.40 45.62 44.98 42.99 42.62 42.28 41.74 41.73 41.34 41.02 40.61 40.31 40.31 40.11 39.05 38.81 38.55 38.53 36.11 35.62 35.47 35.29 34.61 33.85 33.77 33.39 33.26 33.18 33.15 33.07 33.01 32.94 31.73 30.83 30.80 30.17 29.96 29.71 28.86 28.55 26.30 25.95 24.97 24.93 24.58 23.83

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Spain Slovenia Vatican City Italy Portugal Cyprus Greece France Norway the United Kingdom Malta Austria Isle of Man San Marino Denmark Czech Republic Guernsey Jersey Belgium Netherlands Romania Latvia Croatia Finland Bosnia & Herzegovina Estonia Hungary Macedonia Belarus Slovakia Serbia & Montenegro Sweden Faroe Islands Russia Lithuania Switzerland Germany Ukraine Ireland Liechtenstein Gibraltar Monaco Georgia Poland Luxembourg Iceland Moldova Kazakhstan Bulgaria Andorra Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

48

Long Term Debt Countries

Value (total liabilities & equity = 100)

Rank

Percentile

32.68 21.19 19.31 19.13 19.04 18.79 18.33 16.39 16.33 14.29 14.18 13.29 13.18 11.75 10.94 10.59 10.56 10.49 10.03 9.83 9.49 8.50 8.45 8.32 8.20 7.99 7.66 7.48 7.35 6.23 5.50 4.53 3.69 3.63 3.09 2.75 2.56 2.32 1.69 1.55 1.53

1 2 3 4 5 6 7 8 9 12 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 32 33 34 35 37 38 40 41 42 43 44 45 46 47 48

97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 75.00 70.83 68.75 66.67 64.58 62.50 60.42 58.33 56.25 54.17 52.08 47.92 45.83 43.75 41.67 39.58 37.50 33.33 31.25 29.17 27.08 22.92 20.83 16.67 14.58 12.50 10.42 8.33 6.25 4.17 2.08 0.00

Region

_________________________________________________________________________________________________________

New Zealand Belgium Portugal Finland Thailand Netherlands Sweden Switzerland Norway USA Luxembourg Denmark Australia Canada Taiwan Turkey Mexico Austria Hungary Germany the United Kingdom South Korea Japan France Poland India Russia Italy Spain Indonesia Singapore South Africa Hong Kong China Greece Czech Republic Argentina Malaysia Peru Israel Ireland

Oceana Europe Europe Europe Asia Europe Europe Europe Europe North America Europe Europe Oceana North America Asia the Middle East Latin America Europe Europe Europe Europe Asia Asia Europe Europe Asia Europe Europe Europe Asia Asia Africa Asia Asia Europe Europe Latin America Asia Latin America the Middle East Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

49

Long Term Debt (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total liabilities & equity = 100)

Rank

Percentile

33.84 21.19 19.31 19.13 18.79 18.48 18.33 16.39 16.33 15.30 14.44 14.18 13.29 10.49 10.39 10.13 10.13 10.06 10.03 9.83 9.49 9.23 9.02 8.97 8.66 8.58 8.44 8.32 8.20 8.19 7.82 7.80 7.66 7.64 7.54 7.48 7.38 7.35 7.10 7.09 6.90 5.33 3.54 3.09 2.86 2.82 2.75 2.61 2.61 1.53 1.47

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Andorra Belgium Portugal Finland Netherlands Cyprus Sweden Switzerland Norway Liechtenstein Iceland Luxembourg Denmark Austria San Marino Jersey Guernsey Romania Hungary Germany the United Kingdom Bosnia & Herzegovina Ukraine Macedonia Serbia & Montenegro Gibraltar Georgia France Poland Estonia Belarus Slovakia Russia Lithuania Vatican City Italy Moldova Spain Kazakhstan Bulgaria Slovenia Monaco Faroe Islands Greece Malta Isle of Man Czech Republic Latvia Croatia Ireland Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

50

Total Liabilities Countries

Value (total liabilities & equity = 100)

Rank

Percentile

67.94 67.25 67.09 66.15 64.53 64.47 63.76 63.36 61.47 60.67 60.17 60.05 58.24 57.68 57.21 57.04 56.88 56.64 56.35 53.05 52.06 51.92 51.65 50.71 50.38 49.75 49.19 48.53 45.83 45.42 45.32 44.29 43.73 41.26 40.01 39.43 38.81 37.78 37.07 35.30 35.01 31.52 30.75 29.75 29.13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 34 35 38 39 40 42 43 44 45 46 47 48 49 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 35.85 33.96 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77

Region

_________________________________________________________________________________________________________

Portugal Belgium Austria Spain Italy Germany Brazil Netherlands Sweden Chile Denmark Norway France Finland Taiwan New Zealand Switzerland South Africa the United Kingdom Pakistan Turkey Mexico India Thailand Japan Greece Luxembourg South Korea China USA Hungary Czech Republic Russia Argentina Australia Canada Hong Kong Singapore Poland Israel Ireland Indonesia Peru Malaysia Philippines

Europe Europe Europe Europe Europe Europe Latin America Europe Europe Latin America Europe Europe Europe Europe Asia Oceana Europe Africa Europe the Middle East the Middle East Latin America Asia Asia Asia Europe Europe Asia Asia North America Europe Europe Europe Latin America Oceana North America Asia Asia Europe the Middle East Europe Asia Latin America Asia Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

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Financial Indicators

51

Total Liabilities (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total liabilities & equity = 100)

Rank

Percentile

67.94 67.25 67.09 66.45 66.15 65.05 65.03 64.79 64.79 64.53 64.47 63.36 62.10 61.47 60.17 60.05 59.07 58.24 57.68 56.88 56.35 53.08 49.75 49.47 49.19 46.78 46.11 45.88 45.51 45.39 45.32 44.65 44.55 44.29 44.12 43.73 43.63 42.56 42.04 42.02 40.76 38.75 38.15 37.22 37.07 36.63 35.01 33.33 32.07 32.01 26.84

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Portugal Belgium Austria San Marino Spain Vatican City Cyprus Jersey Guernsey Italy Germany Netherlands Slovenia Sweden Denmark Norway Andorra France Finland Switzerland the United Kingdom Liechtenstein Greece Romania Luxembourg Estonia Malta Iceland Isle of Man Bosnia & Herzegovina Hungary Belarus Slovakia Czech Republic Macedonia Russia Lithuania Serbia & Montenegro Latvia Croatia Ukraine Gibraltar Georgia Faroe Islands Poland Monaco Ireland Moldova Kazakhstan Bulgaria Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

52

Common Equity Countries

Value (total liabilities & equity = 100)

Rank

Percentile

70.87 69.29 69.25 64.70 64.69 64.17 60.19 59.97 59.11 56.07 54.68 53.58 50.89 50.04 49.10 48.70 48.32 47.94 47.81 46.95 45.09 44.72 44.36 42.27 42.12 42.01 41.92 41.54 40.96 39.82 39.57 39.49 38.36 36.79 36.37 36.33 34.89 34.43 34.23 34.03 32.76 32.56 32.09 32.06 31.17

1 2 3 4 5 6 8 10 11 12 13 14 15 16 17 18 19 20 21 22 25 26 28 29 30 31 32 33 35 36 37 38 39 41 42 43 44 45 46 47 48 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Philippines Malaysia Peru Israel Indonesia Ireland Singapore Australia Hong Kong Canada Hungary USA China South Korea Thailand Japan India Turkey Mexico Pakistan Russia Poland Greece South Africa the United Kingdom Switzerland Taiwan New Zealand France Denmark Finland Czech Republic Norway Argentina Sweden Luxembourg Italy Brazil Germany Netherlands Chile Belgium Spain Portugal Austria

Asia Asia Latin America the Middle East Asia Europe Asia Oceana Asia North America Europe North America Asia Asia Asia Asia Asia the Middle East Latin America the Middle East Europe Europe Europe Africa Europe Europe Asia Oceana Europe Europe Europe Europe Europe Latin America Europe Europe Europe Latin America Europe Europe Latin America Europe Europe Europe Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

53

Common Equity (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total liabilities & equity = 100)

Rank

Percentile

64.17 60.45 58.37 56.68 54.68 54.13 49.17 48.24 46.75 46.04 46.03 45.94 45.55 45.09 44.99 44.72 44.36 43.01 42.12 42.01 41.80 41.12 40.96 40.62 40.58 40.21 39.82 39.57 39.49 39.20 39.19 38.69 38.62 38.36 37.49 37.47 36.37 36.33 35.17 34.89 34.23 34.03 32.56 32.09 32.06 31.17 30.88 30.69 30.13 30.10 30.10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Ireland Albania Monaco Faroe Islands Hungary Iceland Ukraine Estonia Gibraltar Belarus Georgia Slovakia Romania Russia Lithuania Poland Greece Andorra the United Kingdom Switzerland Bosnia & Herzegovina Malta France Macedonia Isle of Man Moldova Denmark Finland Czech Republic Liechtenstein Serbia & Montenegro Kazakhstan Bulgaria Norway Latvia Croatia Sweden Luxembourg Vatican City Italy Germany Netherlands Belgium Spain Portugal Austria San Marino Cyprus Slovenia Guernsey Jersey

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

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54

Retained Earnings Countries

Value (total liabilities & equity = 100)

Rank

Percentile

37.15 36.85 31.67 29.75 28.68 26.69 26.15 24.75 22.61 21.44 20.02 19.99 19.49 18.96 18.27 18.13 17.25 15.74 14.98 14.58 14.41 13.06 12.51 11.18 10.38 9.45 8.36 7.53 6.84 6.54 5.97 3.83 3.71 2.72 0.92 -1.89 -2.03 -2.28 -2.46 -2.47

1 2 3 4 5 6 7 8 10 11 12 13 14 15 17 18 19 20 21 22 23 25 26 28 30 31 32 34 35 36 37 38 39 40 41 43 44 45 47 48

97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 79.17 77.08 75.00 72.92 70.83 68.75 64.58 62.50 60.42 58.33 56.25 54.17 52.08 47.92 45.83 41.67 37.50 35.42 33.33 29.17 27.08 25.00 22.92 20.83 18.75 16.67 14.58 10.42 8.33 6.25 2.08 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland South Africa USA Philippines Hong Kong Switzerland Japan Luxembourg Malaysia Canada Indonesia the United Kingdom Finland Singapore Brazil Chile Austria Norway Australia Thailand New Zealand Denmark Spain Germany Netherlands South Korea Russia France Sweden Italy Portugal Taiwan China Peru Argentina Czech Republic Greece Mexico Turkey

the Middle East Europe Africa North America Asia Asia Europe Asia Europe Asia North America Asia Europe Europe Asia Latin America Latin America Europe Europe Oceana Asia Oceana Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia Asia Latin America Latin America Europe Europe Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Retained Earnings (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total liabilities & equity = 100)

Rank

Percentile

36.85 30.06 26.15 25.59 24.40 22.61 19.49 18.96 17.72 15.74 15.59 15.20 15.20 14.98 13.52 12.51 11.18 10.50 10.38 9.45 8.06 7.69 7.67 7.53 7.52 6.84 6.54 6.02 5.97 3.83 3.66 0.80 -1.93 -1.93 -2.02 -2.03 -2.09 -2.09 -2.12 -2.15 -2.28 -2.34

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

97.62 95.24 92.86 90.48 88.10 85.71 83.33 80.95 78.57 76.19 73.81 71.43 69.05 66.67 64.29 61.90 59.52 57.14 54.76 52.38 50.00 47.62 45.24 42.86 40.48 38.10 35.71 33.33 30.95 28.57 26.19 23.81 21.43 19.05 16.67 14.29 11.90 9.52 7.14 4.76 2.38 0.00

_________________________________________________________________________________________________________

Ireland Iceland Switzerland Faroe Islands Liechtenstein Luxembourg the United Kingdom Finland Monaco Austria San Marino Guernsey Jersey Norway Andorra Denmark Spain Slovenia Germany Netherlands Estonia Belarus Slovakia Russia Lithuania France Sweden Vatican City Italy Portugal Cyprus Albania Croatia Latvia Serbia & Montenegro Czech Republic Isle of Man Macedonia Malta Bosnia & Herzegovina Greece Romania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.4 3.4.1

56

FINANCIAL RETURNS IN FINLAND: INCOME STRUCTURE RATIOS Overview

In this chapter we consider the income structure of companies operating in Finland benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of income is then presented for the proto-typical firm involved in steam, gas and hydraulic turbines and turbine generator set units operating in Finland and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Finland and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis income ratios are highlighted across countries in the comparison group.

3.4.2

Income Statements – Definitions of Terms

The following definitions are provided for those less familiar with the income-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of income, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Amortization. Amortization generally refers to the depreciation, depletion, or charge-off to expense of intangible and tangible assets over a period of time. Amortization is commonly understood to be the taking as an expense (writing off) of the loss of value of an intangible asset such as a copyright, a patent, or a mailing list, in an accounting period.

•

Cost of Goods Sold (excluding depreciation). For retail companies, cost of goods sold is generally defined as the equivalent of starting inventory plus purchases minus ending inventory. In manufacturing, cost of goods sold is defined to equal the starting inventory plus the cost of goods manufactured minus ending inventory. Most pure service firms do not generally have cost of goods sold.

•

Current Domestic Income Tax. Current domestic income taxes are commonly defined as compulsory charges levied by the government where the company is located on current income.

•

Current Foreign Income Tax. Current foreign income taxes are commonly defined as compulsory charges levied by foreign governments on current income.

•

Deferred Domestic Income Tax. Deferred domestic income tax is defined as a compulsory charge from a previous accounting period which is yet unpaid to the government where the company is located on current income.

•

Depletion. Depletion is commonly defined to be included as one of the elements of amortization, and is understood to be the portion of the carrying value (other than the portion associated with tangible assets) prorated in each accounting period for financial reporting purposes.

•

Depreciation. Depreciation generally is defined as the expiration in the service life of fixed assets, other than depletable assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence. Depreciation is commonly defined as the portion of the cost of a fixed asset

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57

charged as an expense during a particular period. In accounting for depreciation, the cost of a fixed asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost. Through this process, the cost of the asset is ultimately charged off as an expense. •

Earnings Before Interest and Taxes (EBIT). EBIT is a financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.

•

Extraordinary Items. Extraordinary items are defined to include income and expense items associated with events and transactions that possess a high degree of abnormality and are of a type that would not reasonably be expected to recur in the foreseeable future.

•

Gain/Loss Sale of Assets. Gains or losses associated with the sale of assets are defined as increases or decreases in equity (net assets) resulting from the sale of assets.

•

Gross Income. Gross income is commonly defined as all the money, goods, and property received by the company that must be included as taxable income.

•

Income Taxes. Income taxes are defined to include those taxes levied by state, federal, and local governments on the company's reported accounting profit. Income taxes generally include both deferred and paid taxes. They are generally determined after the interest expense has been deducted.

•

Interest Expense on Debt. Interest expenses on debt are those which are spent on current debt and added to the net income so avoid underestimating interest coverage.

•

Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.

•

Net Income Available to Common. Net income available to common is defined as the net income available to common stockholders.

•

Net Income Before Preferred Dividends. Net income before preferred dividends is generally calculated as the difference between total revenues and total expense prior to the granting of preferred dividends.

•

Net Sales or Revenues. Revenues or net sales are defined as payments made to and received by an entity. May take the form of taxes, user fees, fines, fees for service, and so on.

•

Non-Operating Interest Income. Non-operating interest income is generally understood to be any interest received (e.g., royalty, production payment, net profits interest) that does not involve the operation of the company.

•

Operating Expenses. Operating expenses are generally defined as those incurred in paying for the company’s day-to-day activities.

•

Operating Income. Operating income is generally defined to equal operating revenues less operating expenses. It typically excludes items of other revenue and expense such as equity in earnings of unconsolidated companies, dividends, interest income and expense, income taxes, extraordinary items, and cumulative effect of accounting changes.

•

Pretax Equity In Earnings. Pretax equity in earnings is generally defined to equal a company's proportional share (based on ownership) of the gross earnings or losses of an unconsolidated company.

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58

•

Pretax Income. Pretax income is generally defined as income before tax deductions.

•

Selling, General & Administrative Expenses. Selling, general and administrative expenses are expenses independent from cost of sales for the purpose of illustrating the amount of the company's selling and administrative costs. Generally included in this figure are the costs of employees' salaries, commissions, and travel expenses; company payroll and office costs; and advertising and promotion.

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Financial Indicators

3.4.3

59

Income Structure: Outlook

Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Finland. To allow comparable benchmarking, a common index of Net Sales or Revenues = 100 is used. All figures are current-year projections for companies operating in Finland based on latest financial results available. Income Structure Finland Europe World Avg. _________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Current Foreign Income Tax Deferred Domestic Income Tax Income Tax Credits Minority Interest Net Income Before Extra Items/Prefer Dividends Extraordinary Items & Gain/Loss Sale Of Assets Net Income Before Preferred Dividends Net Income Available to Common

100.00 76.48 4.09 19.31 17.85 96.16 8.83 3.86 0.00 0.04 1.19 0.08 1.61 6.36 2.02 4.34 1.29 2.00 1.10 -0.18 -0.07 0.15 3.04 -0.01 3.02 3.04

100.00 70.09 4.68 18.16 13.76 88.65 2.71 5.46 0.86 0.63 2.85 0.03 0.83 8.40 4.33 4.14 1.59 1.39 0.29 -0.03 0.00 0.20 2.61 0.00 2.62 2.61

100.00 69.36 4.50 16.64 9.33 78.12 1.47 6.55 0.17 0.51 1.97 -0.02 1.48 9.61 3.64 6.00 1.70 1.56 0.07 -0.09 0.00 0.32 4.29 0.14 4.43 4.29

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Financial Indicators

3.4.4

60

Large Variances: Income

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large income structure gaps between firms operating in Finland and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cost of Goods Sold (Excluding Depreciation) 80

76.48

70.09

69.36

60 40 20

7.12

0 Finland

Europe

World Average

Gap

Gap: Gross Income 20

19.31

18.16

16.64

15 10 5

2.67

0 Finland

Europe

World Average

Gap

Gap: Selling, General & Administrative Expenses 20

17.85 13.76

15

9.33

10

8.52

5 0 Finland

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Europe

World Average

Gap

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Gap: Other Operating Expenses 100

96.16

88.65

80

78.12

60 40

18.04

20 0 Finland

Europe

World Average

Gap

Gap: Operating Expenses - Total 10

8.83 7.36

8 6 4

2.71 1.47

2 0 Finland

Europe

World Average

Gap

Gap: Operating Income 8 6 4

5.46

6.55

3.86

2 0 -2

-2.69

-4 Finland

Europe

World Average

Gap

Gap: Earnings Before Interest and Taxes (EBIT) 10

8.4

9.61

6.36 5 0 -3.25

-5 Finland

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Europe

World Average

Gap

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Gap: Interest Expense on Debt 5 4 3 2 1 0 -1 -2

4.33

3.64

2.02

-1.62 Finland

Europe

World Average

Gap

Gap: Pretax Income 6

6 4.34

4.14

Finland

Europe

4 2 0 -1.66

-2 World Average

Gap

Gap: Net Income Before Extra Items/Prefer Dividends 5 4 3 2 1 0 -1 -2

4.29 3.04

2.61

-1.25 Finland

Europe

World Average

Gap

Gap: Net Income Before Preferred Dividends 5 4 3 2 1 0 -1 -2

4.43 3.02

2.62

-1.41 Finland

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Europe

World Average

Gap

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Financial Indicators

3.4.5

63

Key Percentiles and Rankings

We now consider the distribution of income ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Finland (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of income structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical income ratios are highlighted in additional tables. Income Structure

Finland

Rank of Total

Percentile

100.00 76.48 4.09 19.31 17.85 96.16 8.83 3.86 0.00 0.04 1.19 0.08 1.61 6.36 2.02 4.34 1.29 2.00 1.10 -0.18 -0.07 0.15 3.04 -0.01 3.02 3.04

17 of 52 31 of 53 26 of 52 14 of 46 10 of 46 3 of 40 36 of 53 30 of 31 28 of 29 8 of 41 8 of 27 18 of 53 35 of 53 14 of 53 33 of 53 27 of 47 8 of 35 2 of 21 21 of 30 7 of 7 13 of 40 32 of 53 8 of 14 31 of 53 32 of 53

67.31 41.51 50.00 69.57 78.26 92.50 32.08 3.23 3.45 80.49 70.37 66.04 33.96 73.58 37.74 42.55 77.14 90.48 30.00 0.00 67.50 39.62 42.86 41.51 39.62

_________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Current Foreign Income Tax Deferred Domestic Income Tax Income Tax Credits Minority Interest Net Income Before Extra Items/Prefer Dividends Extraordinary Items & Gain/Loss Sale Of Assets Net Income Before Preferred Dividends Net Income Available to Common

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Cost of Goods Sold (Excluding Depreciation) Countries

Value (total revenue = 100)

Rank

Percentile

90.62 89.40 88.70 88.31 87.88 85.34 83.94 82.83 80.14 79.88 78.96 77.69 77.62 76.49 76.48 76.47 75.55 74.93 74.02 73.34 73.18 73.11 72.79 72.53 72.22 71.69 70.30 70.28 70.19 69.67 69.56 69.10 68.44 68.41 67.89 67.33 67.16 64.58 63.43 63.25 62.95 62.88 62.58 58.30

1 2 3 4 5 6 7 8 10 11 12 13 14 16 17 18 19 20 21 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 50

98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 80.77 78.85 76.92 75.00 73.08 69.23 67.31 65.38 63.46 61.54 59.62 55.77 53.85 51.92 50.00 48.08 46.15 44.23 40.38 38.46 36.54 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 15.38 13.46 11.54 9.62 3.85

Region

_________________________________________________________________________________________________________

Philippines Belgium New Zealand Portugal Taiwan Denmark India France South Korea Spain Hungary South Africa Norway Austria Finland Australia Singapore Indonesia Canada Germany China Brazil Switzerland Peru Russia Japan Greece Netherlands Thailand Sweden Chile the United Kingdom Hong Kong Malaysia Israel Ireland Italy Poland Turkey Mexico Luxembourg USA Czech Republic Argentina

Asia Europe Oceana Europe Asia Europe Asia Europe Asia Europe Europe Africa Europe Europe Europe Oceana Asia Asia North America Europe Asia Latin America Europe Latin America Europe Asia Europe Europe Asia Europe Latin America Europe Asia Asia the Middle East Europe Europe Europe the Middle East Latin America Europe North America Europe Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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65

Cost of Goods Sold (Excluding Depreciation) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total revenue = 100)

Rank

Percentile

91.86 89.40 88.31 85.34 84.53 82.83 79.88 78.96 77.62 77.26 76.49 76.48 75.76 74.99 73.87 73.87 73.74 73.57 73.34 73.26 72.79 72.22 72.05 71.01 70.30 70.28 69.67 69.10 67.92 67.70 67.51 67.33 67.16 66.47 65.63 65.15 64.58 64.30 63.53 63.31 62.95 62.58 60.26 59.40 59.38 58.06 55.87 55.77 55.30 53.75 51.85

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Andorra Belgium Portugal Denmark Cyprus France Spain Hungary Norway Estonia Austria Finland San Marino Slovenia Jersey Guernsey Belarus Slovakia Germany Monaco Switzerland Russia Lithuania Ukraine Greece Netherlands Sweden the United Kingdom Liechtenstein Vatican City Gibraltar Ireland Italy Georgia Faroe Islands Malta Poland Isle of Man Iceland Albania Luxembourg Czech Republic Romania Latvia Croatia Moldova Kazakhstan Bulgaria Bosnia & Herzegovina Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

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Selling, General & Administrative Expenses Countries

Value (total revenue = 100)

Rank

Percentile

28.49 28.26 26.51 26.27 25.90 25.12 22.54 21.79 20.82 19.42 18.12 18.08 17.87 17.85 17.15 16.96 16.58 16.50 15.50 14.65 14.27 13.83 12.73 12.54 11.16 10.41 10.40 10.21 9.92 9.39 9.27 8.72 8.51 8.37 8.35 8.29 7.97 6.46 0.93

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 22 23 24 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 45

97.83 95.65 93.48 91.30 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 60.87 58.70 56.52 52.17 50.00 47.83 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 17.39 15.22 13.04 10.87 8.70 2.17

Region

_________________________________________________________________________________________________________

Israel Ireland Netherlands Peru USA the United Kingdom Sweden Italy Japan South Africa Turkey Mexico Thailand Finland Germany Canada Hong Kong Switzerland China France Luxembourg Malaysia Norway Greece Czech Republic Hungary Argentina Denmark Austria Australia South Korea Taiwan Poland Brazil Russia Singapore Chile Indonesia Philippines

the Middle East Europe Europe Latin America North America Europe Europe Europe Asia Africa the Middle East Latin America Asia Europe Europe North America Asia Europe Asia Europe Europe Asia Europe Europe Europe Europe Latin America Europe Europe Oceana Asia Asia Europe Latin America Europe Asia Latin America Asia Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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67

Selling, General & Administrative Expenses (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total revenue = 100)

Rank

Percentile

28.26 26.51 26.17 25.12 22.93 22.54 21.97 21.79 17.85 17.22 17.15 16.50 15.90 15.80 15.39 15.36 14.82 14.65 14.27 12.73 12.54 11.62 11.47 11.16 10.60 10.59 10.41 10.21 9.92 9.82 9.58 9.58 9.36 8.94 8.90 8.76 8.53 8.51 8.51 8.35 8.33 8.04 7.65 7.36 7.35

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

97.78 95.56 93.33 91.11 88.89 86.67 84.44 82.22 80.00 77.78 75.56 73.33 71.11 68.89 66.67 64.44 62.22 60.00 57.78 55.56 53.33 51.11 48.89 46.67 44.44 42.22 40.00 37.78 35.56 33.33 31.11 28.89 26.67 24.44 22.22 20.00 17.78 15.56 13.33 11.11 8.89 6.67 4.44 2.22 0.00

_________________________________________________________________________________________________________

Ireland Netherlands Iceland the United Kingdom Albania Sweden Vatican City Italy Finland Romania Germany Switzerland Faroe Islands Bosnia & Herzegovina Liechtenstein Macedonia Serbia & Montenegro France Luxembourg Norway Greece Malta Isle of Man Czech Republic Latvia Croatia Hungary Denmark Austria San Marino Jersey Guernsey Ukraine Estonia Gibraltar Georgia Belarus Poland Slovakia Russia Lithuania Monaco Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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68

Operating Expenses - Total Countries

Value (total revenue = 100)

Rank

Percentile

14.48 9.69 8.83 8.44 6.61 5.45 4.97 4.71 4.24 4.15 4.14 3.73 2.66 2.62 2.48 2.46 1.80 1.34 1.25 1.23 0.92 0.55 0.29 0.23 0.21 0.19 0.19 0.18 0.17 0.15 0.12 0.12 0.11 0.07 -0.04

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 23 24 25 26 28 29 30 31 32 33 34 35 36 37 40

97.50 95.00 92.50 90.00 87.50 85.00 82.50 80.00 77.50 75.00 72.50 70.00 67.50 65.00 62.50 60.00 57.50 55.00 50.00 47.50 42.50 40.00 37.50 35.00 30.00 27.50 25.00 22.50 20.00 17.50 15.00 12.50 10.00 7.50 0.00

Region

_________________________________________________________________________________________________________

Australia Austria Finland Germany Netherlands Switzerland Italy Luxembourg France Malaysia Norway India Belgium Taiwan Israel Ireland Singapore Indonesia the United Kingdom Sweden Hong Kong China Spain South Korea Russia Brazil Greece Chile Czech Republic Argentina Denmark Japan USA Canada Thailand

Oceana Europe Europe Europe Europe Europe Europe Europe Europe Asia Europe Asia Europe Asia the Middle East Europe Asia Asia Europe Europe Asia Asia Europe Asia Europe Latin America Europe Latin America Europe Latin America Europe Asia North America North America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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69

Operating Expenses - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total revenue = 100)

Rank

Percentile

9.69 9.60 9.36 9.36 8.83 8.44 6.61 5.45 5.09 5.01 4.97 4.71 4.24 4.14 2.66 2.46 1.75 1.25 1.23 0.88 0.29 0.27 0.22 0.21 0.21 0.21 0.21 0.19 0.17 0.17 0.17 0.16 0.16 0.12 0.11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

97.14 94.29 91.43 88.57 85.71 82.86 80.00 77.14 74.29 71.43 68.57 65.71 62.86 60.00 57.14 54.29 51.43 48.57 45.71 42.86 40.00 37.14 34.29 31.43 28.57 25.71 22.86 20.00 17.14 14.29 11.43 8.57 5.71 2.86 0.00

_________________________________________________________________________________________________________

Austria San Marino Jersey Guernsey Finland Germany Netherlands Switzerland Liechtenstein Vatican City Italy Luxembourg France Norway Belgium Ireland Monaco the United Kingdom Sweden Faroe Islands Spain Slovenia Estonia Belarus Slovakia Russia Lithuania Greece Malta Isle of Man Czech Republic Latvia Croatia Denmark Iceland

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Operating Income Countries

Value (total revenue = 100)

Rank

Percentile

13.67 11.79 11.49 11.22 11.15 11.12 11.05 9.82 8.69 8.64 8.46 7.86 7.83 7.64 7.42 7.41 7.00 6.96 6.87 6.52 6.45 6.40 6.27 6.10 5.94 5.61 5.30 5.16 4.51 3.95 3.86 3.72 3.67 3.52 3.17 2.78 2.54 2.12 1.73 1.50 1.39 0.95 0.69 -2.29 -2.31

1 2 3 4 5 6 7 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 34 35 36 38 39 40 42 43 44 45 46 47 48 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 81.13 79.25 77.36 75.47 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Spain Brazil Indonesia Chile Turkey Mexico Hong Kong Singapore South Africa India Malaysia Greece Netherlands New Zealand USA Canada Czech Republic South Korea Pakistan Argentina the United Kingdom Italy Russia France Belgium Sweden China Norway Thailand Japan Finland Portugal Switzerland Austria Luxembourg Denmark Germany Hungary Poland Philippines Taiwan Australia Peru Ireland Israel

Europe Latin America Asia Latin America the Middle East Latin America Asia Asia Africa Asia Asia Europe Europe Oceana North America North America Europe Asia the Middle East Latin America Europe Europe Europe Europe Europe Europe Asia Europe Asia Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Asia Oceana Latin America Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Operating Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total revenue = 100)

Rank

Percentile

13.67 12.83 10.60 10.60 9.73 9.52 9.45 9.12 7.92 7.86 7.83 7.50 7.28 7.19 7.00 6.71 6.64 6.64 6.45 6.45 6.40 6.40 6.39 6.27 6.25 6.10 5.94 5.61 5.16 3.86 3.72 3.67 3.56 3.52 3.48 3.42 3.39 3.39 3.17 2.78 2.54 2.12 1.91 1.81 1.79 1.73 1.56 1.50 1.50 0.60 -2.29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Spain Slovenia Faroe Islands Romania Bosnia & Herzegovina Monaco Macedonia Serbia & Montenegro Andorra Greece Netherlands Iceland Malta Isle of Man Czech Republic Estonia Latvia Croatia Vatican City the United Kingdom Belarus Italy Slovakia Russia Lithuania France Belgium Sweden Norway Finland Portugal Switzerland Cyprus Austria San Marino Liechtenstein Guernsey Jersey Luxembourg Denmark Germany Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Albania Ireland

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

72

Earnings Before Interest and Taxes (EBIT) Countries

Value (total revenue = 100)

Rank

Percentile

35.95 35.85 27.11 25.79 13.70 13.08 11.65 11.48 10.85 10.78 10.66 9.91 9.81 9.08 8.82 7.99 7.82 7.73 7.59 7.56 7.53 7.39 7.34 7.32 6.82 6.68 6.66 6.61 6.36 6.06 5.61 5.49 4.89 4.71 4.07 3.73 3.16 3.04 3.00 2.78 2.71 2.45 2.04 -1.63 -1.65

1 2 4 5 6 7 8 9 10 11 12 14 15 16 18 19 20 22 23 24 25 26 27 28 29 31 32 33 35 36 38 39 40 41 42 43 44 45 46 47 48 49 50 52 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Brazil Chile Spain Greece Czech Republic India Argentina Indonesia Malaysia Singapore Hong Kong New Zealand South Africa Italy Netherlands Thailand USA Canada France China South Korea Norway the United Kingdom Pakistan Sweden Russia Finland Taiwan Germany Austria Portugal Switzerland Luxembourg Belgium Denmark Australia Hungary Japan Peru Poland Philippines Ireland Israel

the Middle East Latin America Latin America Latin America Europe Europe Europe Asia Latin America Asia Asia Asia Asia Oceana Africa Europe Europe Asia North America North America Europe Asia Asia Europe Europe the Middle East Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Oceana Europe Asia Latin America Europe Asia Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

73

Earnings Before Interest and Taxes (EBIT) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total revenue = 100)

Rank

Percentile

34.16 31.35 30.47 29.39 13.70 13.08 12.86 12.13 11.97 11.65 11.05 11.05 9.61 9.41 9.40 8.05 7.99 7.82 7.67 7.53 7.32 7.07 6.82 6.75 6.73 6.66 6.61 6.59 6.36 5.61 5.49 5.44 5.30 5.30 4.89 4.71 4.68 4.39 4.07 3.73 3.16 3.00 2.70 2.57 2.53 2.45 2.36 2.21 2.12 2.12 -1.63

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Spain Greece Slovenia Malta Isle of Man Czech Republic Latvia Croatia Monaco Faroe Islands Andorra Vatican City Italy Netherlands Iceland France Norway Estonia the United Kingdom Belarus Slovakia Sweden Russia Lithuania Finland Germany Austria San Marino Guernsey Jersey Portugal Switzerland Cyprus Liechtenstein Luxembourg Belgium Denmark Hungary Ukraine Gibraltar Georgia Poland Albania Moldova Kazakhstan Bulgaria Ireland

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

74

Pretax Income Countries

Value (total revenue = 100)

Rank

Percentile

15.44 14.69 13.06 11.91 10.76 9.67 9.58 9.47 9.21 9.11 8.92 7.87 7.25 6.56 6.43 6.27 6.02 5.99 5.76 5.73 5.72 5.45 5.07 5.04 4.74 4.57 4.34 4.29 4.15 3.43 3.39 3.35 2.97 2.46 2.14 1.83 1.39 1.30 1.29 1.25 1.05 -1.98 -1.99 -6.48 -6.50

1 2 3 4 5 6 7 8 9 10 11 14 15 16 18 19 20 21 22 23 24 25 27 28 30 32 33 34 35 36 37 38 39 40 41 42 44 45 46 47 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Brazil Chile Spain Hong Kong Greece India Czech Republic Malaysia Singapore Indonesia Argentina South Africa New Zealand Canada USA Thailand France Italy Netherlands Norway the United Kingdom Pakistan South Korea China Sweden Russia Finland Germany Austria Switzerland Portugal Taiwan Luxembourg Belgium Japan Philippines Denmark Australia Hungary Peru Poland Ireland Israel Mexico Turkey

Latin America Latin America Europe Asia Europe Asia Europe Asia Asia Asia Latin America Africa Oceana North America North America Asia Europe Europe Europe Europe Europe the Middle East Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Asia Europe Oceana Europe Latin America Europe Europe the Middle East Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

75

Pretax Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total revenue = 100)

Rank

Percentile

13.06 12.26 11.42 10.76 9.97 9.84 9.58 9.09 9.09 8.93 7.51 6.50 6.04 6.02 5.99 5.76 5.73 5.72 4.89 4.74 4.67 4.66 4.57 4.56 4.34 4.29 4.15 4.11 4.00 4.00 3.43 3.39 3.25 3.20 2.97 2.46 1.39 1.29 1.16 1.10 1.09 1.08 1.05 0.95 0.91 0.91 -1.98 -5.31 -5.51 -5.67 -6.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Spain Slovenia Faroe Islands Greece Malta Isle of Man Czech Republic Latvia Croatia Monaco Andorra Iceland Vatican City France Italy Netherlands Norway the United Kingdom Estonia Sweden Belarus Slovakia Russia Lithuania Finland Germany Austria San Marino Guernsey Jersey Switzerland Portugal Cyprus Liechtenstein Luxembourg Belgium Denmark Hungary Ukraine Gibraltar Albania Georgia Poland Moldova Kazakhstan Bulgaria Ireland Serbia & Montenegro Macedonia Bosnia & Herzegovina Romania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

76

Income Taxes Countries

Value (total revenue = 100)

Rank

Percentile

5.16 4.60 4.28 4.19 4.09 3.89 3.09 3.05 2.82 2.81 2.51 2.23 2.12 2.09 2.01 1.90 1.85 1.76 1.72 1.50 1.39 1.38 1.35 1.29 1.24 1.24 1.23 1.08 1.08 1.06 0.91 0.87 0.83 0.79 0.74 0.42 0.42 0.26 0.17 0.01

1 2 3 4 5 6 8 9 10 11 13 14 15 16 18 19 20 21 22 23 24 25 26 27 29 30 31 32 33 34 35 36 37 38 39 42 43 44 45 46

97.87 95.74 93.62 91.49 89.36 87.23 82.98 80.85 78.72 76.60 72.34 70.21 68.09 65.96 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 19.15 17.02 10.64 8.51 6.38 4.26 2.13

Region

_________________________________________________________________________________________________________

Greece Czech Republic Argentina Spain Brazil Chile Italy India Malaysia Indonesia South Africa Belgium France USA Norway the United Kingdom Sweden Canada Netherlands Austria Singapore South Korea Germany Finland New Zealand Russia Japan Hong Kong Portugal Switzerland Luxembourg Australia Thailand Denmark China Israel Ireland Taiwan Peru Philippines

Europe Europe Latin America Europe Latin America Latin America Europe Asia Asia Asia Africa Europe Europe North America Europe Europe Europe North America Europe Europe Asia Asia Europe Europe Oceana Europe Asia Asia Europe Europe Europe Oceana Asia Europe Asia the Middle East Europe Asia Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

77

Income Taxes (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value (total revenue = 100)

Rank

Percentile

5.16 4.79 4.72 4.60 4.36 4.36 4.19 3.94 3.11 3.09 2.23 2.12 2.11 2.01 1.90 1.85 1.72 1.50 1.49 1.45 1.45 1.35 1.35 1.33 1.29 1.29 1.27 1.27 1.24 1.24 1.08 1.06 1.04 1.03 0.99 0.91 0.79 0.42 0.15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

97.44 94.87 92.31 89.74 87.18 84.62 82.05 79.49 76.92 74.36 71.79 69.23 66.67 64.10 61.54 58.97 56.41 53.85 51.28 48.72 46.15 43.59 41.03 38.46 35.90 33.33 30.77 28.21 25.64 23.08 20.51 17.95 15.38 12.82 10.26 7.69 5.13 2.56 0.00

_________________________________________________________________________________________________________

Greece Malta Isle of Man Czech Republic Latvia Croatia Spain Slovenia Vatican City Italy Belgium France Iceland Norway the United Kingdom Sweden Netherlands Austria San Marino Guernsey Jersey Germany Monaco Estonia Finland Andorra Belarus Slovakia Russia Lithuania Portugal Switzerland Faroe Islands Cyprus Liechtenstein Luxembourg Denmark Ireland Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.5 3.5.1

78

FINANCIAL RETURNS IN FINLAND: PROFITABILITY RATIOS Overview

In this chapter we consider additional financial ratios estimated for firms involved in steam, gas and hydraulic turbines and turbine generator set units operating in Finland benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Finland compared to average global benchmarks. For ratios where there are large deviations between the average firm in Finland and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key ratios are highlighted across countries in the comparison group.

3.5.2

Ratios – Definitions of Terms

The following definitions are provided for those less familiar with financial ratio analysis. As this chapter deals with the global benchmarking of ratios, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Receivables Days. The number of days' receivable sales generally correlates to the amount of the accounts receivables to the average daily sales on account. Accounts receivables days is often determined by dividing the gross receivables by (net sales/365).

•

Cash Earnings Return On Equity (%). Cash earnings return on equity generally measures the return of revenues to the shareholders. This ratio is generally calculated by dividing (net income before nonrecurring items minus preferred dividends) by the average common equity.

•

Cash Flow. Cash flow is generally defined as being equal to the company's net income plus the charge-off amounts for depreciation, depletion, amortization, extraordinary charges to reserves. These are bookkeeping deductions which are not paid out as cash.

•

Current Ratio. The current ratio is generally defined as a ratio of liquidity measuring the ability of a business to pay its current obligations when due. The current ratio is generally calculated by dividing total current assets by total current liabilities. Managers and lenders often want the current ratio to be 2.00 or greater. This ratio is often seen as an indication of short-term debt-paying ability. The higher the ratio, the more liquid the company.

•

Dividend Payout (% Earnings) - Total Dividends (%). The dividend payout ratio is generally used to measure the amount of current earnings per common share which are paid out in dividends. This ratio is generally determined by dividing dividends per common share by diluted earnings per share.

•

Fixed Charge Coverage Ratio. The fixed charge coverage ratio is generally seen as an indication of the company's ability to cover its fixed charges. This ratio is typically determined by dividing recurring earnings excluding interest expense, tax expense, equity earnings, and minority earnings plus interest from rentals by interest expense including capitalized interest and interest from rentals.

•

Gross Profit Margin (%). The gross profit margin is typically defined to equals the difference, in percent, between net sales revenue and the cost of goods sold.

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Financial Indicators

79

•

Inventories (# of Days) Held. Inventory days held is generally determined by dividing the ending inventory by (the cost of goods held/365). The number of days held results in the average daily cost of goods held.

•

Inventory Turnover (%). Inventory turnover is used as a measure of the balance of inventory. It generally compares the amount of inventory with the total sales for the year. The ratio can reflect both on the quality of the inventory and the efficiency of management. Typically, the higher the turnover rate, the greater the likelihood that profits would be larger and less working capital bound up in inventory.

•

Net Margin (%). The net margin is the ratio of net income dollars generated by each dollar of sales.

•

Operating Profit Margin (%). Operating profit margin percent is the ratio of operating profit to net sales. Operating profit (loss) is income or loss before taxes calculated by the difference between total revenues and total expense disregarding the effects of any extraordinary transactions.

•

Quick Ratio. The quick ratio, also commonly known as the “acid test ratio”, is a refined current ratio and is often seen as a more conservative measure of liquidity. The quick ratio is generally determined by dividing cash and equivalents plus trade receivables by total current liabilities. The ratio shows the degree to which a company's current liabilities can be covered by the most liquid current assets. Financial management texts generally conclude that any value of less than 1 to 1 implies a reciprocal dependency on inventory or other current assets to liquidate short-term debt.

•

Reinvestment Rate - Total (%). The reinvestment rate is typically defined as the rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.

•

Return on Assets (%). Return on assets is generally used to measure a company's ability to use assets to create profit.

•

Return on Equity - Total (%). The return on total equity ratio is often seen to reflect the profitability of the company's operations after income taxes. Return on equity is often considered to be a good measure of the company's profitability. Tax laws and tax loss carryovers can affect the net income and therefore can also affect the return on equity.

•

Return on Invested Capital (%). The ratio of return on invested capital is typically defined as an evaluation of earnings performance without regard to the method of financing. This ratio measures the earnings on investment and is an indication of how well the company utilizes its asset base. Return on investment is a type of return on capital, therefore this ratio can be an indication of the company’s ability to reward investors who provide long-term funds and to attract future investors.

•

Tax Rate (%). The tax rate is typically defined as the average rate of domestic tax owed to government by the company.

•

Working Capital. Net working capital equals the difference between total current assets and total current liabilities. Working capital often reflects a company's ability to expand volume and meet obligations. Since growth is usually one goal, the amount of working capital on this year's balance sheet should be greater than that of the previous year's. This is an efficiency, or turnover, ratio which benchmarks the rate at which current assets less current liabilities are used by the company in making sales. A low ratio can indicate a less profitable use of working capital in making sales. On the other hand, a very high ratio can indicate the company is wasting current assets which could be more efficiently deployed in production and in increasing sales and profits; or that the company my be undercapitalized, and thus vulnerable to liquidity problems in a period of weak business conditions.

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Financial Indicators

3.5.3

80

Ratio Structure: Outlook

Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Finland. All figures are current-year projections for companies operating in Finland based on latest financial results available. Ratios Finland Europe World Avg. _________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Selling, General & Administrative Expense/Net Sales (%) Research & Development / Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

7.77 2.51 5.32 7.72 23.85 6.34 76.48 19.31 15.51 3.25 3.86 6.23 4.34 31.68 3.02 1.21

8.41 0.54 5.54 8.99 19.12 7.04 70.09 18.16 12.56 2.44 5.46 11.46 4.14 31.19 2.62 1.00

11.23 4.31 7.52 11.23 13.86 8.76 69.36 16.64 8.76 0.97 6.55 13.01 6.00 22.52 4.43 0.97

5.50 5.74 21.66 6.21 6.28 47.50

5.77 7.78 23.69 6.00 8.77 46.43

5.42 0.95 13.04 4.74 7.07 43.04

40.11 31.53 67.07 5.90 25.69 60.68 44.76

31.57 17.99 72.70 16.50 22.31 67.92 36.06

23.33 11.25 79.34 61.22 27.60 67.16 33.69

1.15 1.92 37.10 78.40 85.48

1.13 1.67 29.19 108.30 80.22

1.20 1.75 27.67 110.57 99.11

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.5.4

81

Large Variances: Ratios

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large ratio structure gaps between firms operating in Finland and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cash Earnings Return On Equity (%) 25

23.85 19.12

20

13.86

15

9.99

10 5 0 Finland

Europe

World Average

Gap

Gap: Tax Rate (%) 40

31.68

31.19

30

22.52

20 9.16

10 0 Finland

Europe

World Average

Gap

Gap: Capital Expenditure % Gross Fixed Assets 25

21.66

23.69

20 13.04

15

8.62

10 5 0 Finland

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

82

Gap: Total Debt % Total Capital 50 40

40.11 31.57

30

23.33 16.78

20 10 0 Finland

Europe

World Average

Gap

Gap: Long Term Debt % Total Capital 40

31.53

30 20.28

17.99

20

11.25

10 0 Finland

Europe

World Average

Gap

Gap: Equity % Total Capital 80

67.07

72.7

79.34

60 40 20 0 -12.27

-20 Finland

Europe

World Average

Gap

Gap: Fixed Charge Coverage Ratio 80 60 40 20 0 -20 -40 -60

61.22

5.9

16.5

-55.32 Finland

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Europe

World Average

Gap

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Financial Indicators

83

Gap: Working Capital % Total Capital 50

44.76 36.06

40

33.69

30 20

11.07

10 0 Finland

Europe

World Average

Gap

Gap: Inventories % Total Current Assets 40

37.1 29.19

30

27.67

20 9.43

10 0 Finland

Europe

World Average

Gap

Gap: Accounts Receivables Days 150

108.3

110.57

78.4

100 50 0

-32.17

-50 Finland

Europe

World Average

Gap

Gap: Inventories (# of Days) Held 100

85.48

80

99.11 80.22

60 40 20 0

-13.63

-20 Finland

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.5.5

84

Key Percentiles and Rankings

We now consider the distribution of financial ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Finland (what is the ratio's rank or percentile)? The table below answers this question with respect to financial ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key financial ratios are highlighted in additional tables. Ratios

Finland

Rank of Total

Percentile

7.77 2.51 5.32 7.72 23.85 6.34 76.48 19.31 15.51 3.25 3.86 6.23 4.34 31.68 3.02 1.21

32 of 53 36 of 53 32 of 53 32 of 53 17 of 53 40 of 53 17 of 52 26 of 52 17 of 46 7 of 30 36 of 53 39 of 53 33 of 53 24 of 47 31 of 53 17 of 53

39.62 32.08 39.62 39.62 67.92 24.53 67.31 50.00 63.04 76.67 32.08 26.42 37.74 48.94 41.51 67.92

5.50 5.74 21.66 6.21 6.28 47.50

25 of 53 22 of 53 8 of 49 17 of 53 22 of 53 28 of 49

52.83 58.49 83.67 67.92 58.49 42.86

40.11 31.53 67.07 5.90 25.69 60.68 44.76

8 of 53 5 of 48 44 of 53 34 of 53 21 of 46 27 of 53 16 of 53

84.91 89.58 16.98 35.85 54.35 49.06 69.81

1.15 1.92 37.10 78.40 85.48

29 of 53 22 of 53 14 of 53 36 of 53 24 of 53

45.28 58.49 73.58 32.08 54.72

_________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Selling, General & Administrative Expense/Net Sales (%) Research & Development / Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

85

Gross Profit Margin (%) Countries

Value

Rank

Percentile

USA Turkey Italy Mexico Israel Ireland the United Kingdom Hong Kong Sweden Netherlands Malaysia Japan Peru Germany Thailand Switzerland South Africa China Canada Brazil Greece Singapore Luxembourg Chile Finland Australia Austria Norway Indonesia Czech Republic Spain South Korea Argentina Russia France India Hungary Denmark Poland Portugal Taiwan Belgium New Zealand Philippines

32.95 29.28 29.27 29.20 28.66 28.43 27.60 27.47 26.24 25.80 25.29 24.37 24.36 22.73 22.57 22.47 21.38 21.33 21.30 20.35 19.74 19.63 19.43 19.37 19.31 19.19 19.14 18.87 17.67 17.57 17.29 16.48 16.37 14.85 13.40 12.57 12.50 10.84 10.22 10.08 9.82 8.31 7.64 2.42

1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 34 36 37 39 40 42 43 44 45 46 47 48 50 51

98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 42.31 40.38 38.46 34.62 30.77 28.85 25.00 23.08 19.23 17.31 15.38 13.46 11.54 9.62 7.69 3.85 1.92

Region

_________________________________________________________________________________________________________

North America the Middle East Europe Latin America the Middle East Europe Europe Asia Europe Europe Asia Asia Latin America Europe Asia Europe Africa Asia North America Latin America Europe Asia Europe Latin America Europe Oceana Europe Europe Asia Europe Europe Asia Latin America Europe Europe Asia Europe Europe Europe Europe Asia Europe Oceana Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

86

Gross Profit Margin (%) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value

Rank

Percentile

Iceland Vatican City Italy Ireland Romania the United Kingdom Faroe Islands Sweden Netherlands Bosnia & Herzegovina Macedonia Serbia & Montenegro Germany Switzerland Albania Liechtenstein Greece Luxembourg Finland Austria Monaco San Marino Norway Guernsey Jersey Malta Isle of Man Czech Republic Spain Latvia Croatia Slovenia Estonia Belarus Slovakia Russia Lithuania France Hungary Ukraine Denmark Gibraltar Georgia Poland Portugal Cyprus Moldova Kazakhstan Bulgaria Belgium Andorra

33.29 29.51 29.27 28.43 27.82 27.60 26.34 26.24 25.80 25.53 24.81 23.93 22.73 22.47 21.27 20.97 19.74 19.43 19.31 19.14 19.03 18.96 18.87 18.49 18.49 18.29 18.05 17.57 17.29 16.68 16.67 16.23 15.89 15.16 15.13 14.85 14.82 13.40 12.50 11.24 10.84 10.68 10.52 10.22 10.08 9.65 9.19 8.84 8.83 8.31 7.92

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

87

Pretax Margin (%) Countries

Value

Rank

Percentile

Brazil Chile Spain Hong Kong Greece India Czech Republic Malaysia Singapore Indonesia Argentina South Africa New Zealand Canada USA Thailand France Italy Netherlands Norway the United Kingdom Pakistan South Korea China Sweden Russia Finland Germany Austria Switzerland Portugal Taiwan Luxembourg Belgium Japan Philippines Denmark Australia Hungary Peru Poland Ireland Israel Mexico Turkey

15.44 14.69 13.06 11.91 10.76 9.67 9.58 9.47 9.21 9.11 8.92 7.87 7.25 6.56 6.43 6.27 6.02 5.99 5.76 5.73 5.72 5.45 5.07 5.04 4.74 4.57 4.34 4.29 4.15 3.43 3.39 3.35 2.97 2.46 2.14 1.83 1.39 1.30 1.29 1.25 1.05 -1.98 -1.99 -6.48 -6.50

1 2 3 4 5 6 7 8 9 10 11 14 15 16 18 19 20 21 22 23 24 25 27 28 30 32 33 34 35 36 37 38 39 40 41 42 44 45 46 47 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Latin America Latin America Europe Asia Europe Asia Europe Asia Asia Asia Latin America Africa Oceana North America North America Asia Europe Europe Europe Europe Europe the Middle East Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Asia Europe Oceana Europe Latin America Europe Europe the Middle East Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

88

Pretax Margin (%) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value

Rank

Percentile

Spain Slovenia Faroe Islands Greece Malta Isle of Man Czech Republic Latvia Croatia Monaco Andorra Iceland Vatican City France Italy Netherlands Norway the United Kingdom Estonia Sweden Belarus Slovakia Russia Lithuania Finland Germany Austria San Marino Guernsey Jersey Switzerland Portugal Cyprus Liechtenstein Luxembourg Belgium Denmark Hungary Ukraine Gibraltar Albania Georgia Poland Moldova Kazakhstan Bulgaria Ireland Serbia & Montenegro Macedonia Bosnia & Herzegovina Romania

13.06 12.26 11.42 10.76 9.97 9.84 9.58 9.09 9.09 8.93 7.51 6.50 6.04 6.02 5.99 5.76 5.73 5.72 4.89 4.74 4.67 4.66 4.57 4.56 4.34 4.29 4.15 4.11 4.00 4.00 3.43 3.39 3.25 3.20 2.97 2.46 1.39 1.29 1.16 1.10 1.09 1.08 1.05 0.95 0.91 0.91 -1.98 -5.31 -5.51 -5.67 -6.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

89

Quick Ratio Countries

Value

Rank

Percentile

Australia Hong Kong Malaysia Israel Ireland Indonesia Canada USA Singapore Japan Philippines South Korea Greece Germany Switzerland Norway France Russia Czech Republic India New Zealand Thailand Sweden Peru Finland Argentina Luxembourg Spain the United Kingdom Italy China Netherlands Denmark Portugal South Africa Belgium Turkey Mexico Austria Taiwan Pakistan Hungary Poland Brazil Chile

12.75 3.86 3.62 2.46 2.44 2.25 2.22 2.17 1.59 1.59 1.55 1.41 1.39 1.36 1.33 1.32 1.29 1.27 1.23 1.22 1.22 1.22 1.19 1.18 1.15 1.15 1.15 1.09 1.06 1.05 1.05 1.04 1.01 0.98 0.97 0.95 0.94 0.93 0.92 0.87 0.81 0.67 0.55 0.44 0.41

1 2 3 4 5 6 7 8 11 12 13 14 15 16 17 18 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 43 44 45 46 48 49 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 18.87 16.98 15.09 13.21 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Oceana Asia Asia the Middle East Europe Asia North America North America Asia Asia Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Oceana Asia Europe Latin America Europe Latin America Europe Europe Europe Europe Asia Europe Europe Europe Africa Europe the Middle East Latin America Europe Asia the Middle East Europe Europe Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

90

Quick Ratio (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value

Rank

Percentile

3.70 2.44 2.19 1.54 1.39 1.36 1.36 1.33 1.32 1.30 1.30 1.29 1.29 1.27 1.27 1.27 1.27 1.24 1.23 1.19 1.17 1.17 1.15 1.15 1.09 1.06 1.06 1.05 1.04 1.03 1.02 1.01 0.98 0.95 0.94 0.92 0.91 0.89 0.89 0.89 0.82 0.79 0.77 0.67 0.60 0.57 0.56 0.55 0.49 0.47 0.47

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Faroe Islands Ireland Iceland Monaco Greece Estonia Germany Switzerland Norway Belarus Slovakia France Malta Russia Lithuania Isle of Man Andorra Liechtenstein Czech Republic Sweden Latvia Croatia Finland Luxembourg Spain Vatican City the United Kingdom Italy Netherlands Albania Slovenia Denmark Portugal Belgium Cyprus Austria San Marino Jersey Guernsey Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

91

Current Ratio Countries

Value

Rank

Percentile

Australia Hong Kong Malaysia Israel Ireland Indonesia USA Canada Peru New Zealand Germany Japan Singapore Denmark Switzerland Philippines Thailand Sweden France Finland Norway South Korea Greece Luxembourg Netherlands Russia the United Kingdom Italy South Africa India Czech Republic Portugal China Pakistan Argentina Spain Austria Belgium Taiwan Turkey Mexico Hungary Poland Brazil Chile

13.84 4.39 4.29 3.49 3.46 3.24 3.18 3.02 2.88 2.39 2.34 2.22 2.15 2.07 2.04 2.04 1.98 1.97 1.93 1.92 1.91 1.91 1.84 1.77 1.74 1.72 1.70 1.69 1.67 1.67 1.64 1.59 1.58 1.57 1.53 1.43 1.40 1.36 1.28 1.11 1.11 1.10 0.90 0.89 0.85

1 2 3 4 5 6 7 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 28 30 31 32 33 34 36 37 38 39 41 43 44 45 46 47 48 49 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 43.40 41.51 39.62 37.74 35.85 32.08 30.19 28.30 26.42 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Oceana Asia Asia the Middle East Europe Asia North America North America Latin America Oceana Europe Asia Asia Europe Europe Asia Asia Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Africa Asia Europe Europe Asia the Middle East Latin America Europe Europe Europe Asia the Middle East Latin America Europe Europe Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

92

Current Ratio (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value

Rank

Percentile

4.21 3.46 3.22 2.52 2.48 2.34 2.08 2.07 2.04 1.97 1.93 1.92 1.91 1.91 1.84 1.84 1.77 1.76 1.75 1.74 1.72 1.72 1.71 1.71 1.70 1.69 1.69 1.64 1.59 1.56 1.56 1.52 1.43 1.40 1.38 1.36 1.35 1.35 1.34 1.10 1.06 0.99 0.97 0.94 0.94 0.93 0.91 0.90 0.81 0.78 0.78

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Faroe Islands Ireland Iceland Albania Andorra Germany Monaco Denmark Switzerland Sweden France Finland Norway Liechtenstein Greece Estonia Luxembourg Belarus Slovakia Netherlands Russia Lithuania Vatican City Malta the United Kingdom Italy Isle of Man Czech Republic Portugal Latvia Croatia Cyprus Spain Austria San Marino Belgium Jersey Guernsey Slovenia Hungary Romania Ukraine Bosnia & Herzegovina Macedonia Gibraltar Georgia Serbia & Montenegro Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

93

Inventories % Total Current Assets Countries

Value

Rank

Percentile

Peru Australia Pakistan New Zealand Brazil Denmark Chile South Africa Hungary Germany Netherlands Portugal Italy Finland Sweden Thailand the United Kingdom Poland Austria France Switzerland China USA Israel Belgium Ireland Norway Canada Luxembourg South Korea Hong Kong Singapore Indonesia Japan India Russia Philippines Spain Greece Czech Republic Malaysia Argentina Turkey Mexico Taiwan

56.44 49.39 48.44 48.09 47.35 46.27 45.06 42.47 39.32 39.11 38.32 38.16 37.62 37.10 36.08 34.00 33.43 32.16 32.15 31.98 31.03 30.92 30.79 30.38 30.35 30.13 30.07 27.49 26.84 26.48 26.38 25.75 24.80 24.75 24.10 23.86 23.58 22.32 21.05 18.74 18.69 17.46 15.84 15.80 14.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 30 31 32 33 35 36 37 39 40 41 43 44 46 47 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 33.96 32.08 30.19 26.42 24.53 22.64 18.87 16.98 13.21 11.32 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Latin America Oceana the Middle East Oceana Latin America Europe Latin America Africa Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia North America the Middle East Europe Europe Europe North America Europe Asia Asia Asia Asia Asia Asia Europe Asia Europe Europe Europe Asia Latin America the Middle East Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

94

Inventories % Total Current Assets (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value

Rank

Percentile

Andorra Albania Denmark Hungary Germany Netherlands Portugal Vatican City Italy Finland Cyprus Sweden Ukraine Gibraltar the United Kingdom Georgia Poland Austria France San Marino Iceland Jersey Guernsey Switzerland Belgium Ireland Norway Liechtenstein Moldova Kazakhstan Bulgaria Luxembourg Estonia Faroe Islands Monaco Belarus Slovakia Russia Lithuania Spain Greece Slovenia Malta Isle of Man Czech Republic Latvia Croatia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

49.80 49.26 46.27 39.32 39.11 38.32 38.16 37.92 37.62 37.10 36.53 36.08 35.36 33.62 33.43 33.10 32.16 32.15 31.98 31.84 31.11 31.05 31.05 31.03 30.35 30.13 30.07 28.96 28.91 27.82 27.77 26.84 25.52 25.30 24.97 24.36 24.30 23.86 23.80 22.32 21.05 20.96 19.51 19.25 18.74 17.79 17.78 15.05 13.81 13.42 12.95

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

95

Accounts Receivables Days Countries

Value

Rank

Percentile

Turkey Mexico Malaysia China Italy Greece Japan India Spain Israel Ireland Czech Republic France Argentina Portugal Peru Austria South Korea Singapore Netherlands Switzerland Norway Russia Germany Taiwan Denmark Sweden Hungary Hong Kong the United Kingdom Brazil Thailand Canada Finland Luxembourg Chile Philippines USA Belgium Poland Australia Indonesia New Zealand South Africa Pakistan

357.98 357.00 174.24 140.37 139.34 133.01 132.06 129.31 123.36 121.19 120.18 118.41 111.00 110.30 97.52 95.11 93.62 93.59 92.69 92.30 87.80 87.10 84.34 84.28 83.15 82.99 82.85 81.65 80.25 79.96 79.39 79.18 79.10 78.40 75.93 75.53 71.26 70.09 70.01 66.78 65.78 53.09 52.84 50.69 48.79

1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 47 48 49 51

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 11.32 9.43 7.55 3.77

Region

_________________________________________________________________________________________________________

the Middle East Latin America Asia Asia Europe Europe Asia Asia Europe the Middle East Europe Europe Europe Latin America Europe Latin America Europe Asia Asia Europe Europe Europe Europe Europe Asia Europe Europe Europe Asia Europe Latin America Asia North America Europe Europe Latin America Asia North America Europe Europe Oceana Asia Oceana Africa the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

96

Accounts Receivables Days (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value

Rank

Percentile

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Vatican City Italy Greece Spain Malta Isle of Man Ireland Czech Republic Slovenia Latvia Croatia France Portugal Austria Cyprus San Marino Netherlands Guernsey Jersey Estonia Monaco Switzerland Norway Belarus Slovakia Russia Germany Lithuania Albania Denmark Sweden Liechtenstein Hungary the United Kingdom Finland Faroe Islands Luxembourg Ukraine Iceland Belgium Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Andorra

340.13 312.13 303.36 292.63 140.47 139.34 133.01 123.36 123.28 121.66 120.18 118.41 115.80 112.40 112.35 111.00 97.52 93.62 93.35 92.73 92.30 90.41 90.41 90.22 89.88 87.80 87.10 86.11 85.91 84.34 84.28 84.14 83.02 82.99 82.85 81.93 81.65 79.96 78.40 76.95 75.93 73.43 70.80 70.01 69.81 68.74 66.78 60.04 57.78 57.67 54.72

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

97

Inventories (# of Days) Held Countries

Value

Rank

Percentile

Italy China Peru Israel Ireland Thailand Denmark Netherlands Australia Germany Japan Hong Kong Sweden France Brazil USA Malaysia the United Kingdom Chile Turkey Mexico Finland Switzerland Norway Austria South Korea South Africa Luxembourg Singapore Russia Hungary Spain New Zealand Indonesia Portugal India Pakistan Canada Poland Greece Czech Republic Argentina Taiwan Belgium Philippines

200.12 198.98 166.34 146.42 145.21 133.49 114.02 110.88 110.72 109.81 107.97 96.49 95.10 94.96 93.99 93.46 91.97 90.97 89.43 89.04 88.80 85.48 83.67 80.42 79.31 78.82 76.82 72.36 71.18 71.03 70.60 69.83 68.57 68.04 67.74 66.69 66.27 60.38 57.74 55.27 49.21 45.84 45.15 40.74 32.19

1 2 3 4 5 6 7 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 33 34 35 37 38 39 40 41 42 44 45 46 47 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Europe Asia Latin America the Middle East Europe Asia Europe Europe Oceana Europe Asia Asia Europe Europe Latin America North America Asia Europe Latin America the Middle East Latin America Europe Europe Europe Europe Asia Africa Europe Asia Europe Europe Europe Oceana Asia Europe Asia the Middle East North America Europe Europe Europe Latin America Asia Europe Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

98

Inventories (# of Days) Held (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value

Rank

Percentile

Vatican City Italy Ireland Albania Denmark Netherlands Germany Sweden France Iceland Faroe Islands the United Kingdom Finland Romania Switzerland Norway Austria San Marino Liechtenstein Bosnia & Herzegovina Guernsey Jersey Estonia Macedonia Serbia & Montenegro Belarus Luxembourg Slovakia Russia Andorra Lithuania Hungary Spain Monaco Portugal Slovenia Cyprus Ukraine Gibraltar Georgia Poland Greece Moldova Malta Isle of Man Kazakhstan Bulgaria Czech Republic Latvia Croatia Belgium

201.74 200.12 145.21 145.20 114.02 110.88 109.81 95.10 94.96 94.42 92.53 90.97 85.48 84.60 83.67 80.42 79.31 78.56 78.08 77.64 76.60 76.60 75.99 75.45 72.79 72.52 72.36 72.36 71.03 71.01 70.86 70.60 69.83 69.02 67.74 65.56 64.84 63.49 60.37 59.44 57.74 55.27 51.92 51.23 50.55 49.96 49.87 49.21 46.71 46.69 40.74

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.6 3.6.1

99

PRODUCTIVITY IN FINLAND: ASSET-LABOR RATIOS Overview

In this chapter, we consider numerous asset-labor ratios for steam, gas and hydraulic turbines and turbine generator set units in Finland benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Finland and the average global benchmarks for steam, gas and hydraulic turbines and turbine generator set units. For ratios where there are large deviations between Finland and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain asset-labor ratios are highlighted across countries in the comparison group. In the case of asset-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger asset-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Finland has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.6.2

100

Asset to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for steam, gas and hydraulic turbines and turbine generator set units in Finland based on latest financial results available. Labor-asset Ratios ($k/employee) Finland Europe World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

22.10 23.96 4.24 39.14 34.00 13.79 9.34 9.51 4.30 3.02 98.25 2.87 1.49 4.66 35.49 77.26 3.25 23.52 46.14 4.35 36.85 0.24 7.94 27.48 1.33 13.44 0.70 0.11 12.49 153.74

19.81 15.66 10.70 80.12 37.20 9.64 13.45 17.85 2.00 2.58 140.04 2.40 4.27 55.91 45.86 99.44 9.87 26.90 60.84 13.15 45.30 0.12 7.93 27.12 6.96 11.38 2.24 0.91 8.54 244.38

21.26 10.74 10.51 46.74 23.18 6.13 5.45 9.24 0.71 1.74 93.95 1.10 3.90 26.34 31.94 58.92 4.15 13.01 34.23 7.05 27.74 0.04 3.77 15.72 2.50 6.15 0.85 0.96 3.80 162.19

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.6.3

101

Asset to Labor: International Gaps

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-asset gaps between firms operating in Finland and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cash ($k/employee) 25

23.96

20

15.66

15

13.22

10.74

10 5 0 Finland

Europe

World Average

Gap

Gap: Total Inventories ($k/employee) 40

34

37.2

30

23.18

20

10.82

10 0 Finland

Europe

World Average

Gap

Gap: Raw Materials ($k/employee) 15

13.79 9.64

10

6.13

7.66

5 0 Finland

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

102

Gap: Other Investments ($k/employee) 55.91

60 40

26.34

20

4.66

0 -20

-21.68

-40 Finland

Europe

World Average

Gap

Gap: Property Plant and Equipment - Gross ($k/employee) 99.44

100 80

77.26 58.92

60 40

18.34

20 0 Finland

Europe

World Average

Gap

Gap: Buildings ($k/employee) 30 25

23.52

26.9

20 13.01

15

10.51

10 5 0 Finland

Europe

World Average

Gap

Gap: Machinery & Equipment ($k/employee) 80 60

60.84 46.14 34.23

40

11.91

20 0 Finland

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

103

Gap: Accumulated Depreciation - Total ($k/employee) 45.3

50 40

36.85 27.74

30 20

9.11

10 0 Finland

Europe

World Average

Gap

Gap: Accumulated Depreciation -Machinery & Equipment ($k/employee) 30

27.48

27.12

25 20

15.72

15

11.76

10 5 0 Finland

Europe

World Average

Gap

Gap: Intangible Other Assets ($k/employee) 15

12.49 8.69

8.54

10

3.8

5 0 Finland

Europe

World Average

Gap

Gap: Total Assets ($k/employee) 244.38

250 200 150

162.19

153.74

100 50 0

-8.45

-50 Finland

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.6.4

104

Key Percentiles and Rankings

We now consider the distribution of asset-labor ratios using ranks and percentiles across . What percent of countries have a productivity indicator lower or higher than Finland (what is the indicator's rank or percentile)? The table below answers this question with respect to asset-labor structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key asset-labor ratios are highlighted in additional tables. Asset Structure ($k/employee)

Finland

Rank of Total

Percentile

22.10 23.96 4.24 39.14 34.00 13.79 9.34 9.51 4.30 3.02 98.25 2.87 1.49 4.66 35.49 77.26 3.25 23.52 46.14 4.35 36.85 0.24 7.94 27.48 1.33 13.44 0.70 0.11 12.49 153.74

19 of 53 11 of 46 28 of 42 28 of 53 20 of 53 10 of 46 14 of 46 27 of 46 7 of 44 15 of 47 24 of 53 7 of 40 28 of 43 13 of 39 23 of 53 19 of 49 14 of 37 16 of 44 17 of 46 35 of 45 20 of 49 5 of 10 13 of 39 12 of 43 32 of 42 22 of 53 12 of 36 28 of 35 14 of 43 26 of 53

64.15 76.09 33.33 47.17 62.26 78.26 69.57 41.30 84.09 68.09 54.72 82.50 34.88 66.67 56.60 61.22 62.16 63.64 63.04 22.22 59.18 50.00 66.67 72.09 23.81 58.49 66.67 20.00 67.44 50.94

_________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

105

Cash & Short Term Investments Countries

Value ($K/employee)

Rank

Percentile

75.14 70.27 66.82 65.96 59.44 53.76 51.33 50.91 45.09 41.62 31.76 30.89 25.36 25.22 23.91 23.54 23.26 22.10 21.82 21.32 21.29 20.61 19.83 18.87 15.55 14.68 13.42 12.33 10.82 10.73 8.87 8.08 7.34 6.19 6.17 5.53 3.39 3.31 2.47 2.46 2.01 1.75 1.06 0.46 0.44

1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 29 30 31 32 34 35 37 38 39 41 42 43 46 47 48 49 51 52 53

98.11 96.23 94.34 92.45 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 45.28 43.40 41.51 39.62 35.85 33.96 30.19 28.30 26.42 22.64 20.75 18.87 13.21 11.32 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Taiwan Australia USA South Korea Russia Japan Israel Ireland Norway China Canada Hong Kong Singapore France Greece Italy Germany Finland Switzerland South Africa Czech Republic the United Kingdom Argentina Luxembourg Spain Belgium Malaysia Sweden Indonesia Austria Pakistan Denmark Netherlands Turkey Mexico India Peru Thailand New Zealand Hungary Poland Philippines Portugal Brazil Chile

Asia Oceana North America Asia Europe Asia the Middle East Europe Europe Asia North America Asia Asia Europe Europe Europe Europe Europe Europe Africa Europe Europe Latin America Europe Europe Europe Asia Europe Asia Europe the Middle East Europe Europe the Middle East Latin America Asia Latin America Asia Oceana Europe Europe Asia Europe Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

106

Cash & Short Term Investments (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

67.50 63.59 60.69 60.55 59.44 59.30 50.91 45.09 29.62 25.22 24.59 23.91 23.73 23.54 23.26 22.16 22.10 21.87 21.82 21.29 20.61 20.37 20.21 20.20 18.87 15.55 14.68 14.60 12.33 10.73 10.63 10.36 10.36 8.08 7.34 5.88 5.39 5.24 5.06 2.96 2.56 2.46 2.21 2.10 2.07 2.01 1.81 1.74 1.73 1.06 1.01

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Iceland Estonia Belarus Slovakia Russia Lithuania Ireland Norway Faroe Islands France Monaco Greece Vatican City Italy Germany Malta Finland Isle of Man Switzerland Czech Republic the United Kingdom Liechtenstein Latvia Croatia Luxembourg Spain Belgium Slovenia Sweden Austria San Marino Guernsey Jersey Denmark Netherlands Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania Andorra Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Portugal Cyprus

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

107

Receivables (Net) Countries

Value ($K/employee)

Rank

Percentile

468.24 466.96 178.16 125.28 102.56 99.19 92.42 90.46 77.51 69.00 64.27 63.99 61.36 59.42 57.06 53.96 53.58 53.51 49.54 45.46 44.90 41.38 41.25 40.51 39.32 39.14 38.94 31.36 31.27 30.96 28.85 27.96 26.99 26.67 23.89 23.42 21.95 17.22 15.96 15.18 10.40 8.53 8.50 7.31 5.60

1 2 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 50

98.11 96.23 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 5.66

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan Portugal South Korea Italy Russia Japan Greece Czech Republic Argentina France Norway Germany Netherlands Israel Spain Ireland Denmark Switzerland Austria USA Sweden Malaysia Luxembourg Finland Belgium South Africa the United Kingdom Singapore Hong Kong Canada Peru China Pakistan India New Zealand Australia Brazil Chile Hungary Thailand Poland Indonesia Philippines

the Middle East Latin America Asia Europe Asia Europe Europe Asia Europe Europe Latin America Europe Europe Europe Europe the Middle East Europe Europe Europe Europe Europe North America Europe Asia Europe Europe Europe Africa Europe Asia Asia North America Latin America Asia the Middle East Asia Oceana Oceana Latin America Latin America Europe Asia Europe Asia Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

108

Receivables (Net) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

444.89 408.27 396.79 382.76 125.28 119.92 99.99 99.19 98.87 94.37 94.15 92.42 92.21 77.51 71.83 70.89 69.00 65.49 65.46 63.99 61.36 59.42 57.06 53.58 53.51 50.30 49.54 45.46 44.90 44.47 43.36 43.36 42.42 41.80 41.25 39.32 39.14 38.94 31.27 30.02 27.66 23.56 22.73 10.40 9.35 8.89 8.75 8.50 7.65 7.36 7.35

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Portugal Cyprus Vatican City Italy Estonia Belarus Slovakia Russia Lithuania Greece Malta Isle of Man Czech Republic Latvia Croatia France Norway Germany Netherlands Spain Ireland Slovenia Denmark Switzerland Austria San Marino Guernsey Jersey Liechtenstein Iceland Sweden Luxembourg Finland Belgium the United Kingdom Monaco Faroe Islands Albania Andorra Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

109

Total Inventories Countries

Value ($K/employee)

Rank

Percentile

89.29 89.04 80.46 78.14 77.12 69.50 63.82 53.05 49.54 45.66 41.73 41.73 39.46 39.14 38.80 38.38 36.62 34.00 31.28 30.97 30.78 30.56 27.27 27.05 26.11 25.85 23.91 23.43 23.25 22.96 21.66 20.54 20.40 19.71 18.28 15.90 15.35 15.13 10.77 8.33 8.03 7.95 6.81 6.20 2.28

1 2 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 41 42 43 44 45 46 49 52

98.11 96.23 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89

Region

_________________________________________________________________________________________________________

Turkey Mexico Italy Portugal South Korea Russia Taiwan Denmark Japan France Netherlands Germany Israel Ireland Norway South Africa Peru Finland Switzerland Pakistan Sweden USA Austria Luxembourg Greece Australia Belgium China Czech Republic New Zealand Argentina the United Kingdom Singapore Canada Spain Brazil Hong Kong Chile Malaysia Hungary Thailand India Poland Indonesia Philippines

the Middle East Latin America Europe Europe Asia Europe Asia Europe Asia Europe Europe Europe the Middle East Europe Europe Africa Latin America Europe Europe the Middle East Europe North America Europe Europe Europe Oceana Europe Asia Europe Oceana Latin America Europe Asia North America Europe Latin America Asia Latin America Asia Europe Asia Asia Europe Asia Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

110

Total Inventories (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

84.84 81.11 80.46 78.14 77.85 75.66 74.80 74.35 72.99 70.96 70.80 69.50 69.33 53.05 45.66 41.73 41.73 39.14 38.80 34.00 31.96 31.28 30.88 30.78 29.19 27.27 27.05 27.01 26.33 26.33 26.11 24.20 23.91 23.88 23.78 23.25 22.07 22.06 20.54 19.78 18.28 17.16 14.72 8.33 7.49 7.12 7.01 6.81 6.12 5.89 5.88

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Vatican City Italy Portugal Bosnia & Herzegovina Macedonia Cyprus Estonia Serbia & Montenegro Belarus Slovakia Russia Lithuania Denmark France Netherlands Germany Ireland Norway Finland Albania Switzerland Iceland Sweden Liechtenstein Austria Luxembourg San Marino Jersey Guernsey Greece Malta Belgium Isle of Man Andorra Czech Republic Latvia Croatia the United Kingdom Monaco Spain Slovenia Faroe Islands Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

111

Current Assets - Total Countries

Value ($K/employee)

Rank

Percentile

563.71 562.18 355.71 251.30 226.46 207.87 204.76 203.78 149.02 147.79 147.63 147.02 137.06 136.69 131.62 121.69 116.22 113.35 109.84 107.82 103.26 98.25 95.65 91.09 89.30 87.67 86.83 84.74 84.64 77.72 77.53 75.30 75.23 67.61 64.85 63.92 47.75 37.98 33.59 31.96 25.65 21.87 21.18 17.33 9.67

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 46 47 50 52

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 16.98 13.21 11.32 5.66 1.89

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Israel Ireland USA Norway France Greece Germany Czech Republic Denmark Argentina Australia Netherlands Switzerland Finland China South Africa Luxembourg Spain Sweden Austria Canada Singapore Belgium the United Kingdom Hong Kong Peru Malaysia Pakistan New Zealand India Brazil Chile Indonesia Thailand Hungary Poland Philippines

the Middle East Latin America Asia Asia Europe Europe Europe Asia the Middle East Europe North America Europe Europe Europe Europe Europe Europe Latin America Oceana Europe Europe Europe Asia Africa Europe Europe Europe Europe North America Asia Europe Europe Asia Latin America Asia the Middle East Oceana Asia Latin America Latin America Asia Asia Europe Europe Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

112

Current Assets - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

535.60 491.52 477.70 460.80 242.26 231.22 230.69 226.46 225.93 209.55 207.87 204.76 196.00 149.14 147.79 147.02 137.06 136.69 131.62 126.69 125.02 121.69 116.22 115.50 115.45 107.82 103.26 98.25 96.36 89.30 87.67 86.83 84.74 83.94 82.31 81.84 81.84 77.53 75.37 75.30 72.14 59.02 49.45 21.18 19.05 18.11 17.83 17.33 15.58 14.99 14.96

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Estonia Belarus Slovakia Russia Lithuania Vatican City Italy Portugal Cyprus Iceland Ireland Norway France Greece Germany Malta Isle of Man Czech Republic Denmark Latvia Croatia Netherlands Switzerland Finland Liechtenstein Luxembourg Spain Sweden Austria San Marino Slovenia Guernsey Jersey Belgium Monaco the United Kingdom Faroe Islands Albania Andorra Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

113

Property Plant and Equipment - Net Countries

Value ($K/employee)

Rank

Percentile

149.59 128.39 115.70 81.21 70.98 70.79 66.34 59.06 55.39 55.01 54.74 47.34 44.97 43.98 41.51 40.65 40.57 38.07 37.53 35.70 35.49 34.02 33.99 33.16 33.00 31.76 29.73 27.12 26.54 26.10 25.25 24.71 22.51 20.39 18.60 16.22 14.54 14.19 13.41 13.30 11.91 10.38 9.13 6.58 6.27

1 2 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 33 34 35 36 37 38 40 42 43 44 46 47 48 50 51 52

98.11 96.23 92.45 90.57 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 20.75 18.87 16.98 13.21 11.32 9.43 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Taiwan South Korea Russia Japan Turkey Mexico Greece Czech Republic Portugal Argentina Switzerland Luxembourg China Germany Australia Malaysia Netherlands Austria USA Canada Finland Denmark Sweden Hungary Norway Italy Singapore Poland Brazil the United Kingdom Chile New Zealand Peru Thailand France Spain Hong Kong Indonesia Israel Ireland Belgium India Pakistan Philippines South Africa

Asia Asia Europe Asia the Middle East Latin America Europe Europe Europe Latin America Europe Europe Asia Europe Oceana Asia Europe Europe North America North America Europe Europe Europe Europe Europe Europe Asia Europe Latin America Europe Latin America Oceana Latin America Asia Europe Europe Asia Asia the Middle East Europe Europe Asia the Middle East Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

114

Property Plant and Equipment - Net (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

123.77 118.13 117.86 115.70 115.43 67.44 66.34 61.89 61.48 60.68 60.15 59.06 58.02 56.06 56.03 55.39 54.74 53.02 51.08 47.34 43.98 40.57 38.07 37.92 37.71 36.76 36.76 35.49 34.02 33.99 33.16 33.00 32.02 31.76 29.82 28.83 28.36 27.92 27.12 26.10 25.59 24.39 23.47 23.42 19.65 18.60 16.22 15.23 13.94 13.30 11.91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia Belarus Slovakia Russia Lithuania Romania Greece Bosnia & Herzegovina Malta Isle of Man Macedonia Czech Republic Serbia & Montenegro Latvia Croatia Portugal Switzerland Cyprus Liechtenstein Luxembourg Germany Netherlands Austria Iceland San Marino Jersey Guernsey Finland Denmark Sweden Hungary Norway Vatican City Italy Ukraine Monaco Gibraltar Georgia Poland the United Kingdom Andorra Moldova Kazakhstan Bulgaria Albania France Spain Slovenia Faroe Islands Ireland Belgium

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

115

Accumulated Depreciation - Total Countries

Value ($K/employee)

Rank

Percentile

119.75 119.42 105.74 76.76 76.62 64.68 58.28 55.99 48.42 47.70 45.96 45.38 40.98 39.83 38.47 36.98 36.85 35.70 33.64 33.43 32.33 31.23 30.95 27.55 26.53 26.31 25.66 24.26 23.17 23.14 21.37 19.10 18.02 16.43 14.99 14.39 14.29 13.90 9.30 7.72 6.63

1 2 4 5 6 7 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 46 47 48

97.96 95.92 91.84 89.80 87.76 85.71 81.63 79.59 77.55 75.51 73.47 71.43 67.35 65.31 63.27 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 6.12 4.08 2.04

Region

_________________________________________________________________________________________________________

Turkey Mexico Japan Germany Belgium South Korea Russia Switzerland Luxembourg Brazil Austria Chile USA Peru Australia Norway Finland Sweden France Netherlands Italy Denmark Greece Czech Republic Israel Ireland Argentina the United Kingdom New Zealand China Canada Spain Malaysia Taiwan Singapore India Indonesia Thailand Hong Kong Philippines South Africa

the Middle East Latin America Asia Europe Europe Asia Europe Europe Europe Latin America Europe Latin America North America Latin America Oceana Europe Europe Europe Europe Europe Europe Europe Europe Europe the Middle East Europe Latin America Europe Oceana Asia North America Europe Asia Asia Asia Asia Asia Asia Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

116

Accumulated Depreciation - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

113.78 104.41 101.47 97.89 76.76 76.62 62.35 59.51 59.37 58.28 58.15 55.99 52.25 48.42 45.96 45.52 44.38 44.38 41.40 36.98 36.85 35.70 34.77 33.64 33.43 32.59 32.33 31.23 30.95 28.68 28.30 27.55 26.31 26.15 26.14 24.26 23.99 19.10 17.93 14.54 8.91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

97.56 95.12 92.68 90.24 87.80 85.37 82.93 80.49 78.05 75.61 73.17 70.73 68.29 65.85 63.41 60.98 58.54 56.10 53.66 51.22 48.78 46.34 43.90 41.46 39.02 36.59 34.15 31.71 29.27 26.83 24.39 21.95 19.51 17.07 14.63 12.20 9.76 7.32 4.88 2.44 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Germany Belgium Estonia Belarus Slovakia Russia Lithuania Switzerland Liechtenstein Luxembourg Austria San Marino Jersey Guernsey Iceland Norway Finland Sweden Albania France Netherlands Vatican City Italy Denmark Greece Malta Isle of Man Czech Republic Ireland Latvia Croatia the United Kingdom Andorra Spain Slovenia Monaco Faroe Islands

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

117

Intangible Other Assets Countries

Value ($K/employee)

Rank

Percentile

48.49 29.65 29.55 19.59 18.57 18.47 16.88 15.30 15.07 14.60 14.10 13.21 12.49 10.50 8.82 8.76 7.26 6.46 6.02 5.84 5.81 5.80 5.76 5.22 4.27 3.87 3.86 3.77 3.23 2.97 2.83 2.35 0.68 0.57 0.46 0.18 0.15 0.12

1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 26 27 28 29 30 32 33 34 35 36 37 38 39 40 41

97.67 95.35 93.02 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 39.53 37.21 34.88 32.56 30.23 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65

Region

_________________________________________________________________________________________________________

Belgium USA Norway France Italy Canada Switzerland Malaysia Sweden Luxembourg Austria Germany Finland Australia Denmark the United Kingdom Greece Czech Republic Argentina New Zealand Israel South Korea Ireland Russia Singapore Turkey Mexico Hong Kong Netherlands Japan Spain China Peru South Africa India Hungary Poland Thailand

Europe North America Europe Europe Europe North America Europe Asia Europe Europe Europe Europe Europe Oceana Europe Europe Europe Europe Latin America Oceana the Middle East Asia Europe Europe Asia the Middle East Latin America Asia Europe Asia Europe Asia Latin America Africa Asia Europe Europe Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

118

Intangible Other Assets (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

48.49 29.96 29.55 19.59 18.72 18.57 16.88 15.75 15.07 14.60 14.10 13.97 13.62 13.62 13.21 12.49 8.82 8.76 7.26 6.73 6.64 6.46 6.13 6.13 6.05 5.76 5.59 5.33 5.32 5.22 5.21 4.14 3.67 3.61 3.37 3.28 3.23 3.16 2.83 2.65 0.59 0.18 0.16 0.16 0.15 0.15 0.13 0.13 0.13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

97.96 95.92 93.88 91.84 89.80 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 65.31 63.27 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00

_________________________________________________________________________________________________________

Belgium Iceland Norway France Vatican City Italy Switzerland Liechtenstein Sweden Luxembourg Austria San Marino Jersey Guernsey Germany Finland Denmark the United Kingdom Greece Malta Isle of Man Czech Republic Latvia Croatia Andorra Ireland Estonia Belarus Slovakia Russia Lithuania Monaco Romania Faroe Islands Bosnia & Herzegovina Macedonia Netherlands Serbia & Montenegro Spain Slovenia Albania Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.7 3.7.1

119

PRODUCTIVITY IN FINLAND: LIABILITY-LABOR RATIOS Overview

In this chapter we consider the liability-labor ratios of companies operating in Finland benchmarked against global averages for steam, gas and hydraulic turbines and turbine generator set units. For ratios where there are large deviations between Finland and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of productivity ratios is presented in the form of ranks and percentiles. Certain key liabilitylabor ratios are highlighted for steam, gas and hydraulic turbines and turbine generator set units across countries in the comparison group. Definitions of liability statement terms are given in Chapter 3. In the case of liability-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. I then report the larger liability-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Finland has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

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©2007 Icon Group International, Inc.

Financial Indicators

3.7.2

120

Liability to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for steam, gas and hydraulic turbines and turbine generator set units in Finland based on latest financial results available. Labor-liability Ratios ($k/employee) Finland Europe World Avg. _________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Income Taxes Payable Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Provision For Risks and Charges Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Unappropriated Reserves Retained Earnings Unrealized Foreign Exchange Gain/Loss Treasury Stock Total Liabilities & Shareholders Equity

13.03 14.43 6.29 1.55 24.23 53.70 25.46 25.46 2.86 1.95 1.66 2.35 1.02 83.27 2.49 0.93 67.27 13.05 27.06 0.22 7.51 0.14 36.18 -1.91 2.79 153.74

27.47 35.70 4.02 5.26 30.01 97.10 27.04 26.83 9.18 0.42 2.19 2.16 1.59 131.49 3.11 1.80 108.59 61.21 35.60 8.11 10.89 13.79 16.85 -0.57 1.27 244.38

17.12 22.43 1.06 1.96 19.46 63.27 12.60 12.51 2.91 0.15 1.22 1.10 0.97 78.99 0.38 3.67 79.02 32.29 21.27 3.32 5.85 11.20 9.29 -0.06 0.74 162.19

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.7.3

121

Liability and Equity to Labor: International Gaps

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-liability gaps between firms operating in Finland and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Short Term Debt & Current Portion of Long Term Debt ($k/employee) 35.7

40 30 20

22.43 14.43

10 0 -8

-10 Finland

Europe

World Average

Gap

Gap: Accrued Payroll ($k/employee) 8

6.29 5.23

6 4.02

4 2

1.06

0 Finland

Europe

World Average

Gap

Gap: Current Liabilities - Total ($k/employee) 97.1

100 80

63.27

53.7

60 40 20 0

-9.57

-20 Finland

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

122

Gap: Long Term Debt ($k/employee) 30

25.46

27.04

25 20 12.86

12.6

15 10 5 0 Finland

Europe

World Average

Gap

Gap: Long Term Debt Excluding Capitalized Leases ($k/employee) 30

25.46

26.83

25 20 12.95

12.51

15 10 5 0 Finland

Europe

World Average

Gap

Gap: Common Equity ($k/employee) 150 100

108.59 79.02

67.27

50 0

-11.75

-50 Finland

Europe

World Average

Gap

Gap: Common Stock ($k/employee) 80

61.21

60

32.29

40 20

13.05

0 -20 Finland

www.icongrouponline.com

Europe

World Average

-19.24 Gap

©2007 Icon Group International, Inc.

Financial Indicators

123

Gap: Capital Surplus ($k/employee) 40 30

35.6 27.06 21.27

20 5.79

10 0 Finland

Europe

World Average

Gap

Gap: Unappropriated Reserves ($k/employee) 13.79

15

11.2

10 5 0

0.14

-5 -10

-11.06

-15 Finland

Europe

World Average

Gap

Gap: Retained Earnings ($k/employee) 40

36.18 26.89

30 16.85

20

9.29

10 0 Finland

Europe

World Average

Gap

Gap: Total Liabilities & Shareholders Equity ($k/employee) 244.38

250 200 150

162.19

153.74

100 50 0

-8.45

-50 Finland

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.7.4

124

Key Percentiles and Rankings

We now consider the distribution of liability-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Finland (what is the indicator's rank or percentile)? The table below answers this question with respect to liability-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key liabilitylabor ratios are highlighted in additional tables. Liability Structure ($k/employee)

Finland

Rank of Total

Percentile

13.03 14.43 6.29 1.55 24.23 53.70 25.46 25.46 2.86 1.95 1.66 2.35 1.02 83.27 2.49 0.93 67.27 13.05 27.06 0.22 7.51 0.14 36.18 -1.91 2.79 153.74

30 of 50 23 of 53 5 of 26 29 of 43 18 of 53 25 of 53 18 of 48 17 of 48 23 of 39 7 of 39 12 of 26 14 of 27 21 of 43 25 of 53 4 of 26 30 of 41 27 of 53 22 of 46 17 of 41 23 of 33 22 of 49 30 of 37 8 of 48 32 of 34 7 of 21 26 of 53

40.00 56.60 80.77 32.56 66.04 52.83 62.50 64.58 41.03 82.05 53.85 48.15 51.16 52.83 84.62 26.83 49.06 52.17 58.54 30.30 55.10 18.92 83.33 5.88 66.67 50.94

_________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Income Taxes Payable Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Provision For Risks and Charges Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Unappropriated Reserves Retained Earnings Unrealized Foreign Exchange Gain/Loss Treasury Stock Total Liabilities & Shareholders Equity

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

125

Accounts Payable Countries

Value ($K/employee)

Rank

Percentile

87.40 87.02 86.79 71.13 57.18 52.99 51.53 41.59 32.27 30.19 25.93 25.15 25.00 23.85 22.39 21.64 21.11 20.86 19.28 18.81 18.61 18.34 16.74 16.67 15.82 15.07 13.03 12.19 11.82 11.64 11.56 11.47 11.24 11.22 10.99 8.68 4.89 4.58 4.36 4.00 3.36 1.00

1 2 3 5 6 7 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 47 50

98.00 96.00 94.00 90.00 88.00 86.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 12.00 6.00 0.00

Region

_________________________________________________________________________________________________________

Taiwan Turkey Mexico Italy South Korea Japan Russia Belgium France Norway Denmark Greece Spain Netherlands Czech Republic Sweden Singapore Argentina Switzerland Germany Hong Kong USA Canada Luxembourg Austria the United Kingdom Finland China Brazil New Zealand Israel Ireland Chile India Australia Malaysia Hungary Indonesia Thailand Poland Philippines Peru

Asia the Middle East Latin America Europe Asia Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Latin America Europe Europe Asia North America North America Europe Europe Europe Europe Asia Latin America Oceana the Middle East Europe Latin America Asia Oceana Asia Europe Asia Asia Europe Asia Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

126

Accounts Payable (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

82.68 75.88 73.74 71.71 71.14 71.13 55.12 52.61 52.49 51.53 51.41 41.59 32.27 30.19 25.93 25.15 25.00 23.85 23.47 23.31 23.00 22.39 21.64 21.25 21.24 20.47 19.28 18.81 18.53 17.99 17.84 16.67 15.82 15.67 15.28 15.28 15.07 13.03 12.05 11.47 4.89 4.40 4.18 4.12 4.00 3.59 3.46 3.45 0.87

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

97.96 95.92 93.88 91.84 89.80 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 65.31 63.27 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Vatican City Serbia & Montenegro Italy Estonia Belarus Slovakia Russia Lithuania Belgium France Norway Denmark Greece Spain Netherlands Slovenia Malta Isle of Man Czech Republic Sweden Latvia Croatia Monaco Switzerland Germany Iceland Liechtenstein Faroe Islands Luxembourg Austria San Marino Guernsey Jersey the United Kingdom Finland Andorra Ireland Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

127

Current Liabilities - Total Countries

Value ($K/employee)

Rank

Percentile

506.75 505.36 226.98 166.02 149.61 141.55 129.00 118.68 87.93 82.29 77.84 73.25 72.19 68.24 65.14 63.90 63.87 61.93 61.10 57.37 57.14 55.81 53.70 51.60 50.72 49.41 48.51 42.51 42.16 40.61 38.86 37.71 37.66 35.84 31.31 30.41 29.23 25.11 21.73 19.95 19.24 15.74 12.06 9.20 4.74

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 43 44 45 46 49 52

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Norway Greece France Czech Republic Denmark Argentina China Spain Germany Netherlands Austria Belgium Switzerland South Africa Finland Sweden USA Luxembourg the United Kingdom Israel Ireland Pakistan Singapore Hong Kong Brazil Chile Canada Malaysia Peru Australia India New Zealand Hungary Poland Thailand Indonesia Philippines

the Middle East Latin America Asia Asia Europe Europe Europe Asia Europe Europe Europe Europe Europe Latin America Asia Europe Europe Europe Europe Europe Europe Africa Europe Europe North America Europe Europe the Middle East Europe the Middle East Asia Asia Latin America Latin America North America Asia Latin America Oceana Asia Oceana Europe Europe Asia Asia Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

128

Current Liabilities - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

481.48 441.85 429.42 414.23 160.05 152.76 152.41 149.61 149.26 142.70 141.55 129.00 123.49 87.93 82.29 77.84 76.27 75.26 73.25 72.19 69.53 69.50 63.90 63.87 61.93 61.10 60.52 59.98 59.00 59.00 57.37 57.14 53.70 53.32 51.60 51.24 49.41 48.51 42.16 37.69 36.16 25.52 20.66 19.24 17.31 16.45 16.20 15.74 14.15 13.62 13.59

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Estonia Belarus Slovakia Russia Lithuania Vatican City Italy Portugal Cyprus Norway Greece France Malta Isle of Man Czech Republic Denmark Latvia Croatia Spain Germany Netherlands Austria San Marino Slovenia Jersey Guernsey Belgium Switzerland Finland Liechtenstein Sweden Iceland Luxembourg the United Kingdom Ireland Monaco Faroe Islands Albania Andorra Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

129

Long Term Debt Countries

Value ($K/employee)

Rank

Percentile

131.37 131.02 93.29 51.38 42.58 38.37 32.88 31.75 29.79 27.66 27.47 26.88 26.22 25.89 25.76 25.46 21.50 21.03 18.72 17.44 16.90 16.06 15.56 14.71 14.38 11.39 9.59 8.36 7.00 5.47 5.36 4.50 4.47 4.22 4.19 3.52 3.29 3.26 3.01 2.10 1.07

1 2 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 34 36 37 38 39 40 41 42 43 44 45 48

97.92 95.83 91.67 89.58 87.50 83.33 81.25 79.17 77.08 75.00 72.92 70.83 68.75 66.67 64.58 62.50 60.42 58.33 54.17 52.08 50.00 47.92 45.83 43.75 41.67 39.58 37.50 35.42 33.33 29.17 25.00 22.92 20.83 18.75 16.67 14.58 12.50 10.42 8.33 6.25 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan Portugal South Korea Russia Belgium Norway Switzerland Netherlands New Zealand USA Japan Sweden Luxembourg Finland Italy Greece Czech Republic Argentina Denmark Austria France Germany Canada Australia the United Kingdom Spain Thailand Hungary South Africa Singapore Poland Israel Ireland Malaysia Hong Kong China India Indonesia Peru

the Middle East Latin America Asia Europe Asia Europe Europe Europe Europe Europe Oceana North America Asia Europe Europe Europe Europe Europe Europe Latin America Europe Europe Europe Europe North America Oceana Europe Europe Asia Europe Africa Asia Europe the Middle East Europe Asia Asia Asia Asia Asia Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

130

Long Term Debt (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

124.82 114.55 111.33 107.39 51.38 49.18 41.05 39.18 39.09 38.37 38.28 32.88 31.75 29.79 28.45 27.80 27.66 27.15 25.89 25.76 25.46 21.67 21.50 21.03 19.49 19.23 18.72 17.77 17.76 16.90 16.06 15.90 15.56 15.51 15.51 14.71 9.59 8.36 7.85 5.47 4.92 4.68 4.60 4.47 4.36 4.19 4.02 3.87 3.86 3.15 0.94

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Portugal Cyprus Estonia Belarus Slovakia Russia Lithuania Belgium Norway Switzerland Andorra Liechtenstein Netherlands Iceland Sweden Luxembourg Finland Vatican City Italy Greece Malta Isle of Man Czech Republic Latvia Croatia Denmark Austria San Marino France Guernsey Jersey Germany the United Kingdom Spain Slovenia Hungary Ukraine Gibraltar Georgia Poland Monaco Ireland Moldova Kazakhstan Bulgaria Faroe Islands Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

131

Total Liabilities Countries

Value ($K/employee)

Rank

Percentile

645.86 644.10 320.58 219.98 198.23 181.11 180.80 159.41 123.30 120.24 104.91 102.02 100.53 100.09 99.65 98.31 97.45 93.39 90.99 87.00 86.46 86.18 83.27 72.79 68.71 64.07 60.67 53.22 52.78 49.13 47.95 44.43 41.53 41.27 39.67 37.74 37.64 36.21 31.56 25.72 24.71 20.21 19.36 11.90 4.74

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 49 52

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Germany Norway Greece France Denmark Austria Switzerland Belgium Netherlands Czech Republic Sweden Argentina USA Luxembourg Finland Spain China the United Kingdom South Africa Israel Ireland Canada New Zealand Singapore Hong Kong Pakistan Brazil Chile Australia Malaysia Peru India Hungary Poland Thailand Indonesia Philippines

the Middle East Latin America Asia Asia Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Latin America North America Europe Europe Europe Asia Europe Africa the Middle East Europe North America Oceana Asia Asia the Middle East Latin America Latin America Oceana Asia Latin America Asia Europe Europe Asia Asia Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

132

Total Liabilities (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

613.66 563.15 547.31 527.95 212.07 202.40 201.94 198.23 197.77 182.57 181.11 180.80 173.07 123.30 120.24 104.91 102.02 100.53 100.09 99.65 99.14 98.31 97.45 97.23 96.66 96.66 95.95 93.39 92.98 90.99 88.65 88.61 87.35 86.18 83.27 72.79 68.33 64.07 52.78 49.66 43.08 39.82 27.55 24.71 22.22 21.13 20.80 20.21 18.17 17.49 17.46

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Estonia Belarus Slovakia Russia Lithuania Vatican City Italy Portugal Cyprus Germany Norway Greece France Denmark Austria Switzerland San Marino Belgium Netherlands Malta Jersey Guernsey Isle of Man Czech Republic Liechtenstein Sweden Latvia Croatia Iceland Luxembourg Finland Spain Slovenia the United Kingdom Ireland Andorra Monaco Faroe Islands Albania Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

133

Common Equity Countries

Value ($K/employee)

Rank

Percentile

594.71 593.09 283.20 188.26 169.65 158.60 138.81 128.58 127.52 124.76 95.17 94.48 88.58 86.69 86.29 85.33 84.11 82.29 79.71 78.35 77.17 71.16 69.51 68.57 67.27 66.78 63.47 60.03 59.93 52.54 51.16 49.32 46.42 42.59 36.53 34.91 33.55 31.09 29.82 27.55 25.21 24.39 21.42 20.38 11.54

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 44 45 46 48 50 52

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 9.43 5.66 1.89

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Japan USA Israel Ireland Australia Norway Greece Malaysia Canada Italy Portugal Czech Republic Switzerland China Argentina France Luxembourg Germany Singapore Finland Hong Kong Denmark Netherlands Peru Sweden Belgium the United Kingdom Austria South Africa Pakistan New Zealand Spain Indonesia Hungary India Thailand Poland Brazil Chile Philippines

the Middle East Latin America Asia Asia Europe Asia North America the Middle East Europe Oceana Europe Europe Asia North America Europe Europe Europe Europe Asia Latin America Europe Europe Europe Asia Europe Asia Europe Europe Latin America Europe Europe Europe Europe Africa the Middle East Oceana Europe Asia Europe Asia Asia Europe Latin America Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

134

Common Equity (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

565.06 518.55 503.97 486.14 181.49 173.22 172.82 169.65 169.25 140.23 127.52 95.17 94.48 87.57 86.99 86.41 86.29 85.33 84.11 82.29 81.68 79.83 79.80 77.17 76.78 71.16 69.51 67.27 66.50 64.03 63.47 60.03 52.54 52.31 51.16 49.32 46.42 45.98 44.83 44.83 36.16 33.55 31.50 29.82 26.81 25.49 25.10 24.39 21.92 21.10 21.06

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Estonia Belarus Slovakia Russia Lithuania Iceland Ireland Norway Greece Malta Vatican City Isle of Man Italy Portugal Czech Republic Switzerland Cyprus Latvia Croatia France Liechtenstein Luxembourg Germany Finland Monaco Faroe Islands Denmark Netherlands Sweden Albania Belgium the United Kingdom Austria San Marino Jersey Guernsey Andorra Spain Slovenia Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

135

Retained Earnings Countries

Value ($K/employee)

Rank

Percentile

86.03 85.32 81.05 61.59 50.09 43.32 37.45 36.18 32.75 31.66 30.41 28.36 27.94 27.55 25.26 25.18 24.59 23.99 23.78 23.04 19.79 18.17 16.10 13.72 11.38 11.28 10.98 10.73 10.18 9.12 8.59 6.57 6.18 4.67 0.61 -1.93 -2.07 -2.33 -30.51 -30.60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 34 36 39 41 43 44 45 47 48

97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 70.83 66.67 64.58 62.50 60.42 58.33 56.25 54.17 52.08 50.00 47.92 45.83 43.75 41.67 39.58 37.50 35.42 33.33 29.17 25.00 18.75 14.58 10.42 8.33 6.25 2.08 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland Japan USA Switzerland Luxembourg Australia Finland Taiwan South Africa Norway Netherlands South Korea Hong Kong Malaysia Russia Austria Canada Singapore the United Kingdom Denmark Germany Italy France Spain Brazil New Zealand Chile Portugal Sweden Indonesia China Thailand Philippines Peru Argentina Czech Republic Greece Mexico Turkey

the Middle East Europe Asia North America Europe Europe Oceana Europe Asia Africa Europe Europe Asia Asia Asia Europe Europe North America Asia Europe Europe Europe Europe Europe Europe Latin America Oceana Latin America Europe Europe Asia Asia Asia Asia Latin America Latin America Europe Europe Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

136

Retained Earnings (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

85.32 62.22 50.09 46.74 43.32 36.18 30.41 28.36 26.93 26.42 25.71 25.65 25.18 25.12 24.59 24.36 23.75 23.75 23.06 23.04 19.79 18.17 16.23 16.10 13.72 11.38 11.37 10.68 10.18 9.75 9.12 0.54 -1.97 -1.97 -2.07 -2.13 -2.16 -2.33 -25.01 -25.93 -26.68 -29.07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

97.62 95.24 92.86 90.48 88.10 85.71 83.33 80.95 78.57 76.19 73.81 71.43 69.05 66.67 64.29 61.90 59.52 57.14 54.76 52.38 50.00 47.62 45.24 42.86 40.48 38.10 35.71 33.33 30.95 28.57 26.19 23.81 21.43 19.05 16.67 14.29 11.90 9.52 7.14 4.76 2.38 0.00

_________________________________________________________________________________________________________

Ireland Iceland Switzerland Liechtenstein Luxembourg Finland Norway Netherlands Estonia Faroe Islands Belarus Slovakia Russia Lithuania Austria San Marino Guernsey Jersey Monaco the United Kingdom Denmark Germany Vatican City Italy France Spain Andorra Slovenia Portugal Cyprus Sweden Albania Croatia Latvia Czech Republic Isle of Man Malta Greece Serbia & Montenegro Macedonia Bosnia & Herzegovina Romania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.8 3.8.1

137

PRODUCTIVITY IN FINLAND: INCOME-LABOR RATIOS Overview

In this chapter we consider the income-labor ratios for steam, gas and hydraulic turbines and turbine generator set units in Finland benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Finland and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key income-labor ratios are highlighted across countries in the comparison group. In the case of income-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger income-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Finland has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

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©2007 Icon Group International, Inc.

Financial Indicators

3.8.2

138

Income to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for steam, gas and hydraulic turbines and turbine generator set units in Finland based on latest financial results available. Labor-income Ratios ($k/employee) Finland Europe World Avg. _________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Current Foreign Income Tax Deferred Domestic Income Tax Income Tax Credits Minority Interest Net Income Before Extra Items/Prefer Dividends Extraordinary Items & Gain/Loss Sale Of Assets Net Income Before Preferred Dividends Net Income Available to Common

174.41 144.11 6.70 37.85 33.88 189.30 17.04 8.61 0.01 0.07 2.07 0.15 2.47 12.62 2.92 9.70 3.31 4.76 2.15 -0.39 -0.13 0.32 6.62 -0.03 6.60 6.62

198.08 151.12 8.63 39.60 27.93 203.23 4.60 13.28 1.58 1.23 11.66 0.07 1.20 23.43 16.42 7.04 3.00 2.98 0.50 -0.10 0.00 0.38 4.00 0.02 4.02 3.99

128.08 93.24 5.06 25.62 15.38 106.07 1.37 9.69 0.26 0.64 5.54 -0.20 1.13 15.79 9.49 6.36 1.98 1.74 0.12 -0.10 0.00 0.74 3.98 0.16 4.14 3.98

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.8.3

139

Income to Labor: Gaps

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-income gaps between firms operating in Finland and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Net Sales or Revenues ($k/employee) 200

174.41

198.08

150

128.08

100 46.33

50 0 Finland

Europe

World Average

Gap

Gap: Cost of Goods Sold (Excluding Depreciation) ($k/employee) 200 150

144.11

151.12 93.24

100

50.87

50 0 Finland

Europe

World Average

Gap

Gap: Gross Income ($k/employee) 40

37.85

39.6

30

25.62

20

12.23

10 0 Finland

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

140

Gap: Selling, General & Administrative Expenses ($k/employee) 40

33.88 27.93

30

15.38

20

18.5

10 0 Finland

Europe

World Average

Gap

Gap: Other Operating Expenses ($k/employee) 250 200

189.3

203.23

150

106.07

100

83.23

50 0 Finland

Europe

World Average

Gap

Gap: Operating Expenses - Total ($k/employee) 20

17.04

15.67

15 10 4.6

5

1.37

0 Finland

Europe

World Average

Gap

Gap: Non-Operating Interest Income ($k/employee) 15

11.66

10 5.54 5

2.07

0 -3.47

-5 Finland

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

141

Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 23.43

25 20 15

15.79

12.62

10 5 0

-3.17

-5 Finland

Europe

World Average

Gap

Gap: Interest Expense on Debt ($k/employee) 20

16.42

15

9.49

10 5

2.92

0 -5

-6.57

-10 Finland

Europe

World Average

Gap

Gap: Pretax Income ($k/employee) 9.7

10

7.04

8

6.36

6 3.34

4 2 0 Finland

Europe

World Average

Gap

Gap: Current Domestic Income Tax ($k/employee) 5

4.76

4

3.02

2.98

3

1.74

2 1 0 Finland

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.8.4

142

Key Percentiles and Rankings

We now consider the distribution of income-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Finland (what is the ratio's rank or percentile)? The table below answers this question with respect to income-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key income-labor ratios are highlighted in additional tables. Income Structure ($k/employee)

Finland

Rank of Total

Percentile

174.41 144.11 6.70 37.85 33.88 189.30 17.04 8.61 0.01 0.07 2.07 0.15 2.47 12.62 2.92 9.70 3.31 4.76 2.15 -0.39 -0.13 0.32 6.62 -0.03 6.60 6.62

23 of 53 20 of 52 25 of 53 21 of 52 14 of 46 16 of 46 3 of 40 28 of 53 29 of 31 28 of 29 13 of 41 6 of 27 14 of 53 22 of 53 19 of 53 19 of 53 19 of 47 4 of 35 2 of 21 24 of 30 7 of 7 16 of 40 23 of 53 8 of 14 23 of 53 23 of 53

56.60 61.54 52.83 59.62 69.57 65.22 92.50 47.17 6.45 3.45 68.29 77.78 73.58 58.49 64.15 64.15 59.57 88.57 90.48 20.00 0.00 60.00 56.60 42.86 56.60 56.60

_________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Current Foreign Income Tax Deferred Domestic Income Tax Income Tax Credits Minority Interest Net Income Before Extra Items/Prefer Dividends Extraordinary Items & Gain/Loss Sale Of Assets Net Income Before Preferred Dividends Net Income Available to Common

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

143

Cost of Goods Sold (Excluding Depreciation) Countries

Value ($K/employee)

Rank

Percentile

853.22 388.78 306.09 298.54 297.72 275.82 226.16 205.13 195.15 192.75 183.90 181.64 173.87 166.87 154.77 148.01 147.81 144.11 142.21 138.02 130.19 125.85 122.99 121.96 117.95 113.63 108.57 106.86 101.13 100.45 99.62 97.70 90.30 90.09 85.39 58.03 47.81 45.74 45.49 44.83 39.22 37.34 33.69 32.08

1 2 3 4 5 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 41 42 43 45 46 47 49

98.08 96.15 94.23 92.31 90.38 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 28.85 25.00 23.08 21.15 19.23 17.31 13.46 11.54 9.62 5.77

Region

_________________________________________________________________________________________________________

Taiwan Portugal South Korea Turkey Mexico Russia South Africa Belgium Japan Norway Australia Italy France Denmark Singapore Germany Sweden Finland Switzerland USA Austria Peru Luxembourg Greece Netherlands New Zealand Czech Republic Spain Argentina Israel Ireland the United Kingdom Canada Hong Kong China Malaysia Brazil India Chile Indonesia Hungary Thailand Philippines Poland

Asia Europe Asia the Middle East Latin America Europe Africa Europe Asia Europe Oceana Europe Europe Europe Asia Europe Europe Europe Europe North America Europe Latin America Europe Europe Europe Oceana Europe Europe Latin America the Middle East Europe Europe North America Asia Asia Asia Latin America Asia Latin America Asia Europe Asia Asia Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

144

Cost of Goods Sold (Excluding Depreciation) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

388.78 372.15 295.08 283.65 281.63 280.98 275.82 275.18 260.30 252.98 244.04 205.13 192.75 183.11 181.64 173.87 166.87 150.08 148.01 147.81 144.11 142.21 139.43 132.71 130.19 128.96 125.73 125.73 122.99 121.96 117.95 117.67 113.03 111.55 109.86 108.57 106.86 103.05 103.01 100.32 99.62 97.70 86.39 39.22 35.27 33.53 33.02 32.08 28.84 27.75 27.70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Portugal Cyprus Estonia Romania Belarus Slovakia Russia Lithuania Bosnia & Herzegovina Macedonia Serbia & Montenegro Belgium Norway Vatican City Italy France Denmark Monaco Germany Sweden Finland Switzerland Iceland Liechtenstein Austria San Marino Guernsey Jersey Luxembourg Greece Netherlands Andorra Malta Isle of Man Albania Czech Republic Spain Latvia Croatia Slovenia Ireland the United Kingdom Faroe Islands Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

145

Selling, General & Administrative Expenses Countries

Value ($K/employee)

Rank

Percentile

85.31 85.08 80.20 60.93 55.92 50.19 46.12 43.04 42.68 37.87 35.50 34.27 33.88 33.19 32.31 30.88 30.70 26.55 26.43 26.40 26.26 20.61 20.42 19.08 17.66 17.22 16.99 15.82 15.22 12.28 10.88 9.72 5.47 5.21 5.17 4.25 4.23 3.31 0.34

1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 41 45

97.83 95.65 93.48 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 60.87 58.70 56.52 54.35 52.17 50.00 47.83 45.65 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 19.57 17.39 15.22 10.87 2.17

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan Netherlands USA Japan Italy Israel Ireland Norway Sweden South Korea Finland the United Kingdom Germany Russia Switzerland Luxembourg South Africa France Australia Denmark Canada Greece Austria Hong Kong Czech Republic Argentina China Peru Malaysia Singapore Brazil Chile Hungary Thailand Poland Indonesia Philippines

the Middle East Latin America Asia Europe North America Asia Europe the Middle East Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Africa Europe Oceana Europe North America Europe Europe Asia Europe Latin America Asia Latin America Asia Asia Latin America Latin America Europe Asia Europe Asia Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

146

Selling, General & Administrative Expenses (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

81.05 74.38 72.29 69.73 60.93 56.49 46.50 46.12 42.68 37.87 35.50 33.88 33.19 33.03 32.31 31.53 31.46 30.88 30.81 30.70 28.65 26.55 26.40 20.61 19.08 17.68 17.66 17.49 17.45 17.05 17.05 16.99 16.51 16.12 16.12 10.72 9.42 5.17 4.65 4.42 4.35 4.23 3.80 3.66 3.65

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

97.78 95.56 93.33 91.11 88.89 86.67 84.44 82.22 80.00 77.78 75.56 73.33 71.11 68.89 66.67 64.44 62.22 60.00 57.78 55.56 53.33 51.11 48.89 46.67 44.44 42.22 40.00 37.78 35.56 33.33 31.11 28.89 26.67 24.44 22.22 20.00 17.78 15.56 13.33 11.11 8.89 6.67 4.44 2.22 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Netherlands Iceland Vatican City Italy Ireland Norway Sweden Finland the United Kingdom Estonia Germany Belarus Slovakia Russia Lithuania Switzerland Liechtenstein Luxembourg France Denmark Greece Malta Austria San Marino Isle of Man Guernsey Jersey Czech Republic Faroe Islands Latvia Croatia Albania Monaco Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

147

Operating Expenses - Total Countries

Value ($K/employee)

Rank

Percentile

35.83 17.39 17.04 14.94 10.25 8.95 8.86 8.31 7.98 7.94 6.86 6.11 3.80 3.77 2.50 2.21 1.91 1.77 1.64 0.82 0.73 0.66 0.42 0.37 0.36 0.35 0.29 0.16 0.12 0.12 0.11 0.11 0.10 0.09 -0.02

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 29 31 32 33 34 35 36 37 40

97.50 95.00 92.50 90.00 87.50 85.00 82.50 80.00 77.50 75.00 72.50 70.00 67.50 65.00 62.50 60.00 57.50 55.00 52.50 50.00 47.50 42.50 40.00 37.50 35.00 32.50 27.50 22.50 20.00 17.50 15.00 12.50 10.00 7.50 0.00

Region

_________________________________________________________________________________________________________

Australia Germany Finland Austria Switzerland Norway Luxembourg Netherlands France Italy Taiwan Belgium Israel Ireland Malaysia India the United Kingdom Sweden Singapore Hong Kong South Korea Russia China USA Spain Indonesia Japan Denmark Brazil Chile Greece Canada Czech Republic Argentina Thailand

Oceana Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Europe the Middle East Europe Asia Asia Europe Europe Asia Asia Asia Europe Asia North America Europe Asia Asia Europe Latin America Latin America Europe North America Europe Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

148

Operating Expenses - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

17.39 17.04 14.94 14.80 14.43 14.43 10.25 9.56 8.95 8.86 8.31 8.01 7.98 7.94 6.11 3.77 1.91 1.77 1.59 0.78 0.71 0.68 0.67 0.66 0.66 0.38 0.36 0.34 0.16 0.11 0.11 0.10 0.10 0.10 0.10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

97.14 94.29 91.43 88.57 85.71 82.86 80.00 77.14 74.29 71.43 68.57 65.71 62.86 60.00 57.14 54.29 51.43 48.57 45.71 42.86 40.00 37.14 34.29 31.43 28.57 25.71 22.86 20.00 17.14 14.29 11.43 8.57 5.71 2.86 0.00

_________________________________________________________________________________________________________

Germany Finland Austria San Marino Jersey Guernsey Switzerland Liechtenstein Norway Luxembourg Netherlands Vatican City France Italy Belgium Ireland the United Kingdom Sweden Monaco Faroe Islands Estonia Belarus Slovakia Russia Lithuania Iceland Spain Slovenia Denmark Greece Malta Isle of Man Czech Republic Latvia Croatia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

149

Operating Income Countries

Value ($K/employee)

Rank

Percentile

52.50 52.36 28.13 25.37 25.35 22.09 18.71 17.95 17.23 16.36 15.88 14.98 13.40 12.72 11.93 11.74 11.12 11.08 10.83 10.17 10.16 9.79 9.52 8.80 8.67 8.61 8.13 7.79 7.71 7.41 7.34 6.99 6.76 6.41 6.24 5.37 3.63 2.69 1.05 0.86 0.56 0.54 -2.21 -3.72 -3.75

1 2 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 42 46 47 48 49 51 52 53

98.11 96.23 92.45 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 20.75 13.21 11.32 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico South Korea Taiwan Russia Netherlands South Africa USA Spain Portugal Norway Italy Greece France Czech Republic Pakistan Argentina Belgium Canada Japan Singapore New Zealand the United Kingdom Hong Kong China Finland Sweden Malaysia Brazil Switzerland Chile Germany Austria Luxembourg Denmark India Indonesia Thailand Hungary Poland Philippines Australia Peru Ireland Israel

the Middle East Latin America Asia Asia Europe Europe Africa North America Europe Europe Europe Europe Europe Europe Europe the Middle East Latin America Europe North America Asia Asia Oceana Europe Asia Asia Europe Europe Asia Latin America Europe Latin America Europe Europe Europe Europe Asia Asia Asia Europe Europe Asia Oceana Latin America Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

150

Operating Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

49.88 45.78 44.49 42.92 27.12 25.88 25.82 25.35 25.29 22.09 18.13 17.23 16.36 16.18 15.88 15.66 15.10 14.98 13.40 12.72 12.42 12.26 11.93 11.33 11.32 11.08 10.14 9.86 9.52 8.61 8.44 8.13 7.41 6.99 6.91 6.76 6.69 6.53 6.53 6.41 6.24 1.05 0.95 0.90 0.89 0.86 0.77 0.75 0.74 -1.93 -3.72

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Estonia Belarus Slovakia Russia Lithuania Netherlands Iceland Spain Portugal Slovenia Norway Cyprus Vatican City Italy Greece France Malta Isle of Man Czech Republic Latvia Croatia Belgium Andorra Monaco the United Kingdom Finland Faroe Islands Sweden Switzerland Germany Liechtenstein Austria San Marino Jersey Guernsey Luxembourg Denmark Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Albania Ireland

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

151

Earnings Before Interest and Taxes (EBIT) Countries

Value ($K/employee)

Rank

Percentile

169.22 168.76 44.85 29.31 26.41 22.51 21.53 20.45 20.42 20.00 19.28 18.96 18.18 17.73 17.18 16.94 16.87 15.00 13.89 12.62 11.63 11.41 11.29 10.92 10.22 9.79 9.78 9.76 9.74 9.68 9.46 9.18 8.30 8.18 7.52 6.98 6.55 3.48 3.28 2.97 1.49 1.22 0.76 -2.68 -2.70

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 36 37 38 39 40 41 42 43 48 49 50 52 53

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Netherlands Portugal Norway Greece USA Italy South Africa Czech Republic Brazil Spain Argentina Chile France Germany Finland New Zealand Pakistan Canada Australia Singapore the United Kingdom Austria Sweden Hong Kong China Switzerland Malaysia Belgium Luxembourg Japan India Denmark Thailand Peru Indonesia Hungary Poland Philippines Ireland Israel

the Middle East Latin America Asia Asia Europe Europe Europe Europe Europe North America Europe Africa Europe Latin America Europe Latin America Latin America Europe Europe Europe Oceana the Middle East North America Oceana Asia Europe Europe Europe Asia Asia Europe Asia Europe Europe Asia Asia Europe Asia Latin America Asia Europe Europe Asia Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

152

Earnings Before Interest and Taxes (EBIT) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

160.78 147.55 143.40 138.33 28.26 26.97 26.91 26.41 26.35 22.51 21.53 20.61 20.45 20.42 20.20 19.44 19.28 18.93 18.68 18.18 17.26 17.25 17.18 16.13 15.00 13.89 12.62 12.04 9.91 9.79 9.78 9.76 9.68 9.46 9.44 9.44 9.34 8.82 8.30 8.18 6.55 2.86 1.49 1.34 1.27 1.25 1.22 1.10 1.05 1.05 -2.68

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Estonia Belarus Slovakia Russia Lithuania Netherlands Portugal Cyprus Norway Greece Iceland Vatican City Italy Malta Isle of Man Czech Republic Latvia Croatia Spain Slovenia France Germany Finland Andorra Monaco the United Kingdom Austria Sweden San Marino Switzerland Jersey Guernsey Faroe Islands Liechtenstein Belgium Luxembourg Denmark Albania Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Ireland

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

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Pretax Income Countries

Value ($K/employee)

Rank

Percentile

34.08 20.39 18.65 18.38 18.09 17.50 16.49 16.47 16.31 14.94 14.68 14.61 13.67 12.10 11.65 10.11 10.09 9.70 9.60 9.54 9.32 9.29 8.98 8.57 8.40 8.23 8.23 7.64 7.12 6.72 6.35 6.26 6.16 6.04 3.35 3.00 2.39 1.24 0.68 0.64 0.52 -3.20 -3.23 -30.51 -30.60

1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 33 34 35 36 37 38 40 44 45 46 48 49 50 52 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 16.98 15.09 13.21 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Taiwan South Korea Netherlands Russia USA Norway Greece South Africa Spain Portugal Czech Republic Italy Argentina France Germany Canada Brazil Finland Chile Singapore Pakistan New Zealand the United Kingdom Australia Hong Kong Malaysia China Austria Switzerland Sweden Belgium India Luxembourg Japan Denmark Thailand Indonesia Peru Philippines Hungary Poland Ireland Israel Mexico Turkey

Asia Asia Europe Europe North America Europe Europe Africa Europe Europe Europe Europe Latin America Europe Europe North America Latin America Europe Latin America Asia the Middle East Oceana Europe Oceana Asia Asia Asia Europe Europe Europe Europe Asia Europe Asia Europe Asia Asia Latin America Asia Europe Europe Europe the Middle East Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Pretax Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

19.66 18.76 18.72 18.65 18.38 18.33 18.28 17.50 16.49 16.31 15.31 15.28 15.08 14.94 14.73 14.68 14.61 14.30 13.93 13.93 12.10 11.65 9.70 9.62 9.25 8.98 8.06 7.64 7.57 7.38 7.38 7.12 6.72 6.64 6.35 6.16 3.35 1.08 0.64 0.58 0.55 0.54 0.52 0.47 0.45 0.45 -3.20 -25.01 -25.93 -26.68 -29.07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia Belarus Slovakia Netherlands Russia Lithuania Iceland Norway Greece Spain Slovenia Malta Isle of Man Portugal Vatican City Czech Republic Italy Cyprus Latvia Croatia France Germany Finland Andorra Monaco the United Kingdom Faroe Islands Austria San Marino Guernsey Jersey Switzerland Sweden Liechtenstein Belgium Luxembourg Denmark Albania Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Ireland Serbia & Montenegro Macedonia Bosnia & Herzegovina Romania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

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Income Taxes Countries

Value ($K/employee)

Rank

Percentile

6.83 6.74 6.08 6.07 5.66 5.66 5.64 5.58 5.27 5.19 5.12 5.09 4.75 4.48 4.17 3.36 3.31 3.28 3.21 2.90 2.69 2.67 2.54 2.52 2.41 2.23 2.12 1.90 1.83 1.70 1.61 1.59 1.29 0.95 0.71 0.59 0.58 0.22 0.01 0.00

1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 42 45 46

97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 74.47 72.34 70.21 68.09 65.96 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 40.43 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 17.02 14.89 10.64 4.26 2.13

Region

_________________________________________________________________________________________________________

Greece Australia Czech Republic Norway Argentina Italy South Korea South Africa Netherlands Spain Belgium Russia Portugal USA France Taiwan Finland Japan Germany the United Kingdom Sweden Brazil Chile Austria Canada Malaysia Switzerland India Luxembourg Denmark China New Zealand Singapore Hong Kong Indonesia Israel Ireland Thailand Peru Philippines

Europe Oceana Europe Europe Latin America Europe Asia Africa Europe Europe Europe Europe Europe North America Europe Asia Europe Asia Europe Europe Europe Latin America Latin America Europe North America Asia Europe Asia Europe Europe Asia Oceana Asia Asia Asia the Middle East Europe Asia Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Income Taxes (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Europe

Value ($K/employee)

Rank

Percentile

6.83 6.33 6.24 6.08 6.07 5.77 5.76 5.70 5.66 5.44 5.27 5.19 5.19 5.18 5.12 5.09 5.07 4.87 4.75 4.55 4.53 4.17 3.31 3.21 2.90 2.69 2.52 2.49 2.43 2.43 2.12 1.98 1.83 1.70 1.65 1.25 0.92 0.58 0.01

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

97.44 94.87 92.31 89.74 87.18 84.62 82.05 79.49 76.92 74.36 71.79 69.23 66.67 64.10 61.54 58.97 56.41 53.85 51.28 48.72 46.15 43.59 41.03 38.46 35.90 33.33 30.77 28.21 25.64 23.08 20.51 17.95 15.38 12.82 10.26 7.69 5.13 2.56 0.00

_________________________________________________________________________________________________________

Greece Malta Isle of Man Czech Republic Norway Latvia Croatia Vatican City Italy Estonia Netherlands Belarus Spain Slovakia Belgium Russia Lithuania Slovenia Portugal Cyprus Iceland France Finland Germany the United Kingdom Sweden Austria San Marino Guernsey Jersey Switzerland Liechtenstein Luxembourg Denmark Andorra Monaco Faroe Islands Ireland Albania

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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4 4.1

MACRO-ACCESSIBILITY IN FINLAND EXECUTIVE SUMMARY

Since joining the European Union (EU) in 1995, Finland with its population of 5.2 million and once viewed as a remote northern outpost, has become a robust market for a variety of international businesses. A Nordic country, Finland shares a long border with Russia. Finland has a unique position as the center of a rapidly developing marketplace formed by northwestern Russia, Scandinavia and the Baltic States, with about 80 million prospective consumers. Finland’s business attitude towards the United States is very positive. Commercial relations between Finnish and U.S. companies are often based on many years of mutual experience. New companies, with innovative and competitively priced products, will find a welcoming market – with new partners often willing to go the extra mile to ensure success. Finland’s import climate is open and receptive to U.S. products and investments. There are no significant trade barriers or regulations that U.S. firms need to take into consideration.

4.1.1

Nokia – A Big Company in a Small Country

No guide about Finland would be complete without mentioning Nokia. Headquartered in Finland, this mobile phone maker has grown to become a multi-national giant in a small country. Its contribution to the Finnish economy is significant. Nokia remains the major player in the ICT cluster. But it is not alone. There are thousands of small and medium-sized companies in the cluster. Hundreds are direct first-tier suppliers to Nokia, known in Finland as the “Nokia network”. Finland’s mobile communications standard-bearer, Nokia, has established itself as one of the World’s most valuable and prominent brands. However, Finnish high-tech is much more than just mobile phones and telecommunications technology. The technology spill off from the electronics area can also be seen in other market sectors, such as environmental products, biotech and the medical industries.

4.1.2

Finnish-U.S. Trade

The United States is Finland’s most important trading partner outside of Europe. Major exports from the United States to Finland continue to be machinery, telecommunications equipment and parts, aircraft and aircraft parts, computers, peripherals and software, electronic components, electric machinery, chemicals, medical equipment and some agricultural products. The primary competition for American companies comes from European suppliers, especially German, Swedish, and British. The main export items from Finland to the United States are ships and boats, paper and paperboard, refined petroleum products, telecommunications equipment and parts.

4.1.3

Finland: A Springboard to Russia and the Baltic States

The value of Finland’s gateway position between east and west was also noted when Finland became a member of the EU; this position was strengthened during Finland’s EU Presidency (July-December 1999). As an EU member state bordering Russia, Finland remains vital as a trans-shipment channel to Russian markets, especially the

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northwestern regions. About 40 percent of the EU’s road shipments to Russia are shipped from Finland or arrive via Finland. Finns know how to do business in Russia and the Baltic States. Finland’s excellent infrastructure and its geographical proximity to Russia and the Baltic countries, especially Estonia, give Finland an advantage as a gateway to these burgeoning markets. Many foreign and U.S. companies are using Finland as a base for opening their transportation and marketing activities to the former Soviet Union, taking advantage of established logistics and distribution networks.

4.2

ECONOMIC FUNDAMENTALS AND DYNAMICS

On January 1, 1999, eleven EU member countries including Finland joined the third stage of the European Monetary Union (EMU). This third and final stage of EMU commenced with the irrevocable locking of the exchange rates of the eleven currencies participating in the Euro area and with the conduct of a single monetary policy under the responsibility of the European Central Bank (ECB). The Finnmark (FIM) was pegged to the Euro at 5.9457. on January 1, 2002, the Finnmark was replaced by the Euro, and the Finnmark ceased to be legal tender as of March 1, 2002.

4.2.1

Government Intervention Risks

During the severe recession of the early 1990s, the Finnish government’s financial position deteriorated rapidly. The government became deeply indebted because, as tax revenues fell, transfer payments under the country’s extensive social welfare programs rose dramatically. At the same time, the government was forced to bail out several major banks whose failure would have prompted a collapse of the banking system. Since then, the major aim of the government’s fiscal policy, in addition to curbing unemployment, has been to curb the growth of debt. The Finnish government has traditionally played a dominant role in the economy. In the decades since World War II, state-owned companies have held a dominant position in Finland’s national economy. The basic strategy for the privatization process has been to treat each company as an individual case. The aim of the new government is to be an active shareowner, to develop the companies concerned and to increase the value of the holding. Incomes from any sale of state-owned companies are channeled into R&D financing or into capital finance for Finnish Industry Investment Ltd, a government-owned investment company. It engages in equity capital investment and invests in venture capital funds, private equity funds and directly in selected target companies. Finnish Industry Investment Ltd is administered by the Ministry of Trade and Industry.

4.2.2

Balance of Payments Issues

With the onset of Stage Three of EMU on January 1, 1999, Finland’s balance of payments lost its importance for monetary and exchange rate policy. In the future, the European Central Bank will aggregate all of the EMU member states’ balance of payments and report them quarterly. Only the current account for the whole Euro area can affect the Euro´s exchange rate against other major currencies. Investment outflows continue to exceed direct investment in Finland. Some tax changes, the promotion of Finland as a gateway for Russian markets and Finnish membership in the EU encourage foreigners to invest more in Finland.

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159

Infrastructure Development

Finland has a well-developed infrastructure. Finland’s transportation system is based on an efficient rail and road network, supported by a wide network of freight forwarders and trucking companies. Finland’s domestic distribution system for goods and services is efficient. Finland has over 50 merchant shipping ports, of which more than 10 are located on inland waterways connected to the Baltic Sea by the Saimaa Canal. Twenty-three seaports are open year round. Finnish ports, 15 of which deal with transit traffic through Finland, can handle a wide range of cargo. The 10 biggest ports handle more than 75 percent of all sea-borne cargo traffic. The ports near the Russian border (Hamina, Kotka and Mustola) concentrate on forestry goods, bulk cargo and free zone activities. Ports are secure and automated; loading and unloading operations are consistently quick and trouble-free. The well-functioning transportation system and the fact that Finland’s rail gauge is the same as Russia’s make the country a good transshipment point for Russian trade. The E18 road, from Kristiansand, Norway, through Sweden and Finland, to St. Petersburg, Russia, is part of the European Union Trans European Road Network system, connecting EU-member Nordic capitals with efficient roads. Finland’s international telecom set-up began to admit limited competition in 1993, with further deregulation on July 1, 1994. on the domestic telecommunications front, competition entered the picture at the beginning of 1994. Finland’s telecommunications environment is one of the most advanced in Europe and the growth of international telecom is of significant importance to the Finnish economy. The number of mobile telephones exceeded the number of fixed line connections already in 1998 in Finland. The number of Internet hosts per 1000 inhabitants amounts to 183; Internet penetration in Finland is the second highest in the world, right after the U.S. Finland was the first country to grant licenses for third generation mobile networks. Four telecommunications companies have received licenses to construct a third generation (3G) mobile network. Almost every Finn has access to broadband networks. Fiber optic cables cover 95 percent of Finnish municipalities and 99 percent of the population live in these municipalities. Altogether 98 percent of Finns live within a few kilometers of high-speed fiber optic cable networks. The large number of connections in educational institutions and workplaces compensate for the relative lack of household connections. The change in household structures in the direction of single-person households is slowing down the spread of IT through the population. In 1999, significant steps were taken to establish a digital television system in Finland, when the Ministry of Transport and Communications granted licenses for digital television channels. The licenses were granted for 10 years, from September 2000 to August 2010. The government also granted licenses for three special digital channels and a television channel that broadcasts regional programs. Digital transmissions began on August 27, 2001.

4.3 4.3.1

POLITICAL RISKS Economic Relationship with the United States

Relations between the United States and Finland are excellent and free from bilateral disputes except for occasional trade disputes, now largely covered by the broader U.S. - EU trade relationship. The U.S. cooperates with Finland in various international organizations such as the UN, OSCE and OECD. Finland’s 1995 accession to the European Union (EU) has added a new dimension to U.S.-Finnish relations. Both countries share a deep interest in the stable political and economic development of Russia and the Baltic States. This interest is reflected in the U.S. Enhanced Partnership in Northern Europe initiative (ePINE) and the Finnish-inspired EU Northern Dimension program. Finland remains militarily non-aligned; it is an active member in NATO’s Partnership for Peace (PfP) program.

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The Political System

Finland is a parliamentary democracy headed by a president, although presidential power has been somewhat reduced by the country’s new constitution, which took effect on March 1, 2000. The president is elected for a sixyear term and has primary responsibility for bilateral relations and national security issues. The Prime Minister, on the other hand, is the head of government and has responsibility for domestic and EU affairs. Parliamentary elections are normally held every four years.

4.4 4.4.1

MARKETING STRATEGIES Creating a Sales Office

If a foreign organization intends to establish an office in Finland, the following steps should be taken: 1)

Drafting the Memorandum of Association

2)

Drafting the Articles of Association

3)

Subscription of the shares

4)

Constituent meeting of the shareholders

5)

Adoption of the Articles of Association

6)

Payment of the capital share

7)

Registration of a limited company

For further information, please contact the Employment and Economic Development Center (www.te-keskus.fi) and/or Invest in Finland Bureau (www.investinfinland.fi).

4.4.2

Creating a Joint Venture

Several U.S. companies have established themselves in the Finnish market with subsidiaries or joint ventures, with particular interest in access to Finnish-Russian joint ventures. A number of Finnish firms are interested in using their long-established contacts in the former Soviet Union and the Baltic countries to market U.S. goods. Due to its physical proximity and Finland’s network of railroad and air connections, there are many strong selling features regarding access to Russia. As a full member of the European Union, Finland has its feet firmly planted in the West but possesses unique access to and expertise about the Russian market.

4.4.3

Agents and Distributors

One exclusive agent/distributor is usually appointed to cover the entire country, mainly due to the relatively small size of the Finnish market. Finnish importers often represent several different product lines. In selecting a representative, the exporter should check whether that company handles competing products. Consumer goods and similar merchandise requiring maintenance of stock are often imported through wholesalers or trading houses. Such products may also be sold directly to retail chains, department stores, and other retail outlets.

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Contacting local trade associations for a list of importers is a good way of finding a distributor in Finland. Finnish importers attend major trade fairs in Europe and in the United States in order to find new products and ideas, but also to find new representation.

4.4.4

Checking Bona Fides

Dun & Bradstreet Finland Oy and Suomen Asiakastieto Oy offer a variety of business and credit information services. For further information, please contact: Dun & Bradstreet Finland Oy Vattuniemenkatu 21 A FIN-00210 Helsinki, Finland Tel: +358-9-2534 4400 Fax: +358-9-502 2940 E-mail: [email protected] www.dnb.com Or any Dun & Bradstreet office in the U.S. Suomen Asiakastieto Oy P.O. Box 16 FIN-00581 Helsinki, Finland Tel: +358-9-148 861 Fax: +358-9-753 3231 E-mail: [email protected] www.asiakastieto.fi Suomen Asiakastieto Oy’s partner in the U.S.: Veritas 121 Whitney Avenue New Haven, CT 06510 Tel: (203) 503-6700 Fax: 781-3833 E-mail: [email protected] www.veritas-usa.com

4.4.5

Distribution Channel Options

Distribution channels in Finland are similar to those in the United States. Goods may be sold through an agent, distributor, established wholesaler, or selling directly to retail organizations. Most of the larger importers, wholesalers and trading houses are members of the Federation of Finnish Commerce and Trade (FFCT), which is a central organization of 41 trade associations covering the bulk of foreign goods sold to Finnish trade and industry. The members of FFCT are particularly strong in certain specialized sectors, such as electronics, electric components and instruments, pharmaceutical and health care products, technical products and machinery, raw materials and chemicals. The majority of Finnish commission agents are members of the Finnish Foreign Trade Agents’ Federation, which has 18 divisions for different products. These commission agents are relatively small, private companies, most of them operating in sectors such as textiles, apparel, furnishings and raw materials.

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162

Selling Strategies

Selling factors and techniques are very similar in Finland to those in the United States. Terms generally applied to international trade with industrialized countries apply to selling in Finland. When selling to the Finnish market, it is recommended that a local agent/distributor who has a sales network covering the whole of Finland be appointed. Only one local distributor is needed to cover the whole country, since Finland is a small market, but distances are long and therefore a distributor with a countrywide network is most desirable. Consumer goods and similar merchandise requiring maintenance of stock are often imported through wholesalers or trading houses. These products can also be sold directly to retail chains, department stores and other retail outlets. U.S. suppliers should provide the local distributor with English language product literature and export prices. Strong promotion efforts are very important to introduce new products into the Finnish market.

4.4.7

Pricing and Licensing

Product Licensing agreements are quite common in Finland because of the good quality of Finnish manufacturing, the small size of the market and the relatively high cost of transporting goods to the country. Royalties and licensing fees may be freely transferred out of Finland. All goods and services are subject to VAT, which ranges from 8 percent on books, drugs and pharmaceuticals, 17 percent on foodstuffs and feeds, to 22 percent on industrial goods. Excise taxes are levied on fuel, alcohol, beer, tobacco, soft drinks and mineral water. Finland is an EU (European Union) country. Imports from the other EU (European Union) countries enter Finland duty-free and without customs formalities. The EU also has free trade agreements with a large number of non-EU countries (e.g. countries that belong to the PAN-European cumulation and EFTA (European Free Trade Association) countries. Imports from these countries, with some exceptions, enter Finland duty-free if the products have been manufactured in one of these countries. However, import duties are levied on imports from countries such as the United States, Australia, Japan and Canada, depending on specific product lines.

4.4.8

Advertising Options

All media in Finland is open for advertising. There are two regulatory structures in place concerning marketing, the Consumer Protection Act and the Act on Unfair Business Practice. The Consumer Ombudsman and the Marketing Court control advertising. The general rule is that advertisements may not contain claims which cannot be substantiated or which are offensive to minorities (race, sex, etc.). There are also restrictions concerning the use of children in advertising. Advertising of tobacco products and spirits is completely prohibited in Finland’s mass media. However, advertising of beer, wines, and low alcohol level beverages (less than 22%) has been allowed since 1995.

Major Newspapers Helsingin Sanomat P.O. Box 77 FIN-00089 Sanomat, Finland Tel: 358-9-1221 Fax: 358-9-605 709 www.helsinginsanomat.fi

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Aamulehti P.O. Box 327 FIN-33101 Tampere, Finland Tel: 358-3-266 6111 Fax: 358-3-266 6259 www.aamulehti.fi

Business Magazines and Journals Kauppalehti (Business Daily) P.O. Box 189 FIN-00101 Helsinki, Finland Tel: 358-9-507 81 Fax: 358-9-660 383 www.Kauppalehti.fi Taloussanomat (Business daily) P.O. Box 35 FIN-00089 Sanomat, Finland Tel: 358-9-1221 Fax: 358-9-122 4179 www.taloussanomat.fi Talouselama (Business weekly) P.O. Box 920 FIN-00101 Helsinki, Finland Tel: 358-20 442 40 Fax: 358-20 442 4130 www.talentum.com

E-Commerce Web Sites •

SoneraPlaza: http://plaza.fi/

•

Elisa Communications: www.elisa.com

•

Jippii Group: www.jippii.fi

4.4.9

Trade Promotion

The main fair centers in Finland are located in the cities of Helsinki, Jyvaskyla, Turku, Tampere and Lahti. For further information, please contact: The Finnish Fair Corporation P.O. Box 21 FIN-00521 Helsinki, Finland Tel: 358-9-150 91 Fax: 358-9-142 358 http://www.suomenmessut.fi Jyvaskyla Fair Ltd. www.icongrouponline.com

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P.O. Box 127 FIN-40101 Jyvaskyla, Finland Tel: 358-14-334 0000 Fax: 358-14-610 272 www.jklfairs.fi/ Lahti Fair Ltd. P.O. Box 106 FIN-15141 Lahti, Finland Tel: 358-3-525 820 Fax: 358-3-525 8225 www.lahdenmessut.fi/ Turku Fair Center Ltd. P.O. Box 57 FIN-20201 Turku, Finland Tel: 358-2-337 111 Fax: 358-2-2401 440 http://www.turunmessukeskus.fi Tampere Trade Fairs Ltd. P.O. Box 163 FIN-33201 Tampere, Finland Tel: 358-3-2516 111 Fax: 358-3-2123 888 www.tampereenmessut.fi/html/indeng.html Supplying As a rule, one exclusive agent/distributor is appointed to cover the entire country. Finnish importers often represent several different product lines. Importers may serve large customers themselves while dealers work with smaller customers, often located outside the Helsinki metropolitan area. Dealers are often specialized in supplying a specific industry area. Training, usually organized and carried out by dealers, is an important aspect. Service points should cover the whole country rather than just the southern parts.

4.4.10

Public Sector Marketing

Finnish procurement agencies follow the procurement procedures of the EU and the World Trade Organization (WTO). The EU rules of procurement and the WTO’s GPA agreement only apply to procurements of or above the threshold value. National legislation requires procurement units to submit competitive tenders for procurements that fall below the threshold value. This is done by sending requests for tenders to a number of potential suppliers or by publishing an announcement. The main principles of procurement are that purchases should be made on an open and competitive basis, and that suppliers should be treated equally. The principle of openness stipulates that the procurement unit announce, on a sufficiently large scale, that it is making a purchase. The principle of equality and non-discrimination entails that the decision to buy must be made in accordance with established criteria. Of the offers received, the lowest offer or the one which is the most affordable in terms of overall economy, has to be selected. Information on threshold values can be found at www.vn.fi/ktm/2/julha/english/index.html.

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165

IMPORT AND EXPORT REGULATION RISKS Adherence to Free Trade Agreements

Finland joined the EU on January 1, 1995, which means that Finland complies with trade agreements that the EU has made with third countries. Finland is also a member of the European Free Trade Association and the European Economic Area.

4.5.2

Trade Barrier Risks

Finland’s adoption of EU internal market practices in 1995 defines Finland’s trade relations both inside the EU and with non-EU countries. Finland replaced its turnover tax with a value-added tax in June 1994. While the change has had little effect on overall revenues, several areas not previously taxed or taxed at a lower rate, including many corporate and consumer services and construction, are now subject to the new VAT in conformity with EU practices. The government has kept the basic VAT rate at the same level as the old turnover tax, which is 22 percent. Food products are taxed at 17 percent. Sport facilities usage, medicines, books, cinemas, passenger transport services, hotel and other accommodation, entertainment performances, sporting events, zoos, museums, and other such events or institutions are taxed at 8 percent. Other services, including health care, education, insurance, newspaper & periodical subscriptions and rentals are not subject to VAT. Agricultural and forestry products continue to be subject to different forms of taxation outside the VAT. A uniform tax rate of 28 percent on capital gains took effect in 1996, which includes dividends, rental income, insurance, savings, forestry income, and corporate profits. The tax rate on capital income and corporate income was raised from 28 percent to 29 percent from the beginning of year 2000. In March 1997 EU commitments required the establishment of a tax border between the autonomously governed, but territorially Finnish, Aland Islands and the rest of Finland. As a result, the trade of goods and services between the rest of Finland and Aland Islands is now treated as if it were trade with a non-EU area. Even though the Aland Islands are part of the EU, just as Finland is, Aland does not belong to the Union’s tax area. This exception was drafted in order to protect the important shipping traffic and the tax-free sales when EU countries abandoned dutyfree sales. The trade effect of this treatment is minimal since the Aland Islands are part of the EFTA tariff area. Finland has also introduced EU practices on imports of agricultural products. Some agricultural goods are subject to the standard import-licensing system, EU-wide quotas, import taxes or other provisions. In mid-1996 the Finnish government’s inter-ministerial licensing authority began, within the EU, selectively to oppose American company applications for commercialization of genetically modified organisms (GMOs) such as insect-resistant corn. Finland’s attitude towards biotechnology is markedly more open than in many other EU Member States and Embassy Helsinki has been working actively with Finnish partners to distribute accurate and scientific information on this issue.

4.5.3

Tariff Rates

Duties and other import taxes are levied on the customs value of the goods at the point of importation. The customs value is based on the transaction value of the goods imported. In practice, the C.I.F. value is commonly used as the customs value. To assess customs value, the place of importation must be indicated. In the case of sea and air cargo, the place of importation is the unloading location. In surface transportation, it is the Customs Office at the frontier. The customs value is determined according to the GATT Valuation Agreement and the Community Customs Code www.icongrouponline.com

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(Council regulation 2913/92) and the Regulation Laying down Provisions for Implementation of the Customs Code (Commission regulation 2454/93).

4.5.4

Restrictions on Imports

Finnish law prohibits the import of the following products: •

PCB and PCT chemicals used in transformers and condensers causing problem waste products

•

Whale meat

4.5.5

Local Standards

Finland uses the metric system. Products for sale in Finland should be adapted to the metric system whenever possible. It is also highly recommended that U.S. products imported into Finland meet international or European standards. Examples of products where conformity to directives is mandatory are electric equipment, machines, toys, pressure vessels, construction products and personal protective equipment. In these cases CE-marking acquired in any EU/EEA country is also valid in Finland. There are several Notified Bodies in Finland participating in the CEmarking procedures. The central body for standardization in Finland is the Finnish Standards Association - SFS (www.sfs.fi). SFS and its standards writing bodies, SESKO Standardization in Finland (www.sesko.fi) and Finnish Communications Regulatory Authority (www.ficora.fi) are members of the European standards organizations CEN, CENELEC and ETSI. National SFS Standards are sold in Finland only by SFS. National ISO member bodies abroad handle distribution of SFS standards. SFS and SESKO are the Finnish sources for all international standards and drafts of the International Organization for Standardization (ISO), for European standards and drafts of CEN and for publications of ISO member bodies. SFS also distributes other foreign standards and technical regulations. The only organization that develops standards in Finland is the Finnish Standards Association (www.sfs.fi).

List of Finland’s Main National Testing or Conformity Assessment Bodies Low voltage (LVD): •

SGS Fimko Oy (www.fimko.fi)

Simple pressure vessels (SPVD): •

Inspecta Oy (www.inspecta.fi)

Construction products: •

VTT Building and Transport (www.vtt.fi/rte)

•

SFS-Inspecta Sertifiointi Oy (www.sfs-sertifionti.fi)

•

Sahkotarkastus Fimtekno Oy (www.fimtekno.fi)

•

Contesta Oy (www.contesta.fi)

•

Oy DNV Certification Ab (www.dnv.fi)

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Electromagnetic compatibility (EMC): •

Competent Bodies - SGS Fimko Oy (www.fimko.fi), Nemko Oy (www.nemko.fi), TCC Salo (www.finas.fi), NATLABS Oy - Nordic Accredited Testing Laboratories (www.natlabs.fi)

•

Competent Administrative Authority – Turvatekniikan keskus – Safety Technology Authority (www.tukes.fi)

Personal protective equipment (PPE): •

Tyoterveyslaitos – Finnish Institute of Occupational Health (www.ttl.fi)

Explosives for civil use: •

Finnish Defense Forces Technical Research Center (PvTT) (www.mil.fi)

Medical devices: •

VTT Industrial Systems (www.vtt.fi)

Equipment explosive atmospheres (ATEX): •

VTT Industrial Systems (www.vtt.fi)

Recreational craft: •

VTT Industrial Systems (www.vtt.fi)

Lifts: •

Sähkötarkastus Fimtekno Oy (www.fimtekno.fi)

•

Oy Elspecta Ab (www.hissiproffat.fi)

•

Suomen Hissitarkastus Oy

Pressure equipment (PED) •

Inspecta Oy (www.inspecta.fi)

•

Polartest Oy (www.polartest.fi)

Machinery: •

VTT Industrial Systems (www.vtt.fi)

•

SGS Fimko Oy (www.fimko.fi)

Diagnostic medical devices: •

VTT Industrial Systems (www.vtt.fi)

Radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity: •

Finnish Communications Regulatory Authority: Viestintävirasto (www.ficora.fi)

Transportable pressure equipment •

Polartest Oy (www.polartest.fi)

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Noise emission in the environment by equipment for use outdoors: •

Maa- ja elintarviketalouden tutkimuskeskus – Agrifood Research Finland (www.mtt.fi)

Product Certification Product certification is voluntary.

Accreditation Please contact the Finnish Accreditation Service, FINAS (www.mikes.fi).

Technical Regulations EU member states have to inform and consult each other and the Commission before they adopt new national technical regulations for products or services of the Information Society. The information procedure is based on Directive 98/34/EC of the European Parliament and the Council, as amended by Directive 98/48/EC. The above Directives have been implemented in Finland through a Government Decision. The Decision obliges all parties drafting technical regulations to notify the Ministry of Trade and Industry of the drafts. The Ministry is the National Contact Point in contacts with both the Commission and with national authorities, industrial associations and other stakeholders. Further details, and draft technical regulations and the final texts of regulations of all member states which are public documents, are available on the TRIS (Technical Regulation Information System) Web pages of the Commission Directorate-General for Enterprise: http://europa.eu.int/comm/enterprise/tris/about/index_en.htm.

4.5.6

Labeling Issues

Labeling and marking requirements in Finland are based on the Act on Product Safety, which was enacted in accordance with the EU directive on general product safety. The following information should be included in retail packaging, or otherwise marked on the product (a sticker, label, etc.): •

Name of the product (indicating clearly the contents of the package)

•

Name of the manufacturer or the name of the company that had the product manufactured

•

Amount of contents (weight or volume of the contents to be specified, measures in metric system).

If warranted by safety considerations or economic security of the consumer, the following information should also be included on the retail packaging or otherwise clearly identified on the product: contents of the product, care instructions, operating instructions, and a warning of possible danger related to the use or disposal of the product. Finland has precise labeling requirements for foodstuff. A retail-size food package must show the name of the manufacturer, packer or importer, commercial name of the product, net metric weight or volume, ingredients in descending order of weight, last recommended date of sale, and storage instructions if perishable or intended for infants. Mandatory information described above must be provided in Finnish and Swedish.

The Swan Label Besides the CE Mark, which is required across the European Union, the Swan Label is a neutral and reliable Nordic Environmental Label. It directs products, their production and consumption into a more environmentally friendly direction. The Swan Label indicates that the products burden the environment less than other corresponding products - without compromising performance characteristics.

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The European Eco-Label The purpose of the European Eco-Label is to promote the development, manufacture, marketing, and use of products that least burden the environment. To consumer, the Eco-Label gives better and more reliable information on the environmental friendliness of the product (http://europa.eu.int/ecolabel). Key contact: SFS-Standardisointi (Finnish Standards Association) Maistraatinportti 2 FIN-00240 Helsinki Finland Tel: 358-9-149 9331 Fax: 358-9-146 4925 E-mail: [email protected] www.sfs.fi

4.5.7

Controls on Exports

Finland is an active participant in all export control regimes, notably the Nuclear Suppliers Group (NSG), the NPT Exporters Committee (Zangger Committee), the Missile Technology Control Regime (MTCR), the Australia Group (AG) and the Wassenaar Arrangement (WA). Finland chaired the Zangger Committee in 1989-93 and the NSG in 1995-96 and was the chair of the MTCR until fall 2001. A basic principle of Finland’s export control policy is that there is no published or unpublished “black list” of undesired destinations except those subject to sanctions by the UN or the EU. All license applications are considered on a case-by-case basis, taking into account the information exchanged within the relevant export control regime.

Ministry for Foreign Affairs The Ministry for Foreign Affairs (MFA) is in charge of Finnish non-proliferation policy as well as the security and trade policy aspects of export controls. In the MFA, the Political Department and its Division for Non-Proliferation, Arms Control and Disarmament, coordinates Finland’s participation in the international cooperation concerned, for example in the export control regimes. The MFA’s Department of External Economic Relations monitors export controls from the trade policy point of view. Ministry for Foreign Affairs Division for Non-Proliferation, Arms Control and Disarmament Tel: +358-9-16005 Fax: +358-9-16056066 http://formin.finland.fi/english

4.5.8

Import Tariffs and License Requirements

Most goods can be imported into or exported from Finland without a special permit. Some restrictions apply, however. Finland follows the import-licensing procedures of the EU. Licenses can be applied for from the National Board of Customs. Certain agricultural products are subject to import duties and/or fees imposed in accordance with EU rules and regulations. Among the products subject to these duties and fees are cereals, flour, certain fats and oils, fish products, butter, cheese, eggs, poultry, meat, cattle and hogs. The transitional period that allowed Finland to

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maintain its stricter (than EU) import regulations on certain agricultural products (primarily meat and livestock) expired in 1998.

4.5.9

Customs Regulations and Contact Information

Customs duties are levied on goods imported to Finland. As a member of the EU, Finland is part of the EU-wide Customs Territory and applies EU Custom’s legislation. You can consult Customs Information for customs related matters. Suomen Tulli (Finnish Customs) PL 512 FIN-00101 Helsinki, Finland Tel: +358 20 391 100 Fax: +358 20 492 1812 (See also www.tulli.fi)

4.5.10

Entering Temporary Imports

Temporary exemption from duty can be granted, for instance, to the following: •

Goods intended for public displays at exhibitions and fairs

•

Commercial samples

•

Professional tools and equipment

If the goods are put to unauthorized use or are not exported within the prescribed time they must go through normal customs clearance and become liable for relevant duties and taxes. In Finland, the ATA-Carnet, the international customs documentation for temporary duty-free admission is issued by the Chamber of Commerce. The ATA-Carnets are frequently used for temporary imports e.g. samples, exhibition materials, and professional equipment (laptop computers, software), and are valid for one year.

4.5.11

Additional Trade Issues

Certain import/export items need to meet with special requirements and certifications set by the EU or national standards. These are mostly articles that might damage health, welfare or country’s economy, or result in the spread of animal and plant diseases. The following items, among others, are subject to restrictions: •

Foodstuffs

•

Fodder and fertilizers

•

Alcoholic beverages and other products containing alcohol

•

Pharmaceuticals

•

Narcotics and dangerous drugs

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Some chemicals

•

Nuclear and radioactive substances

•

Explosives

•

Blade knives firearms and ammunition

•

Obscene publications

•

Pressure vessels

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Free Trade Zones and Warehouses

Finland has one free port in Hanko, located at the southernmost tip of the country. The port has a year-round railwayferry link with Turku. In addition, there are 20 storage areas in other locations in the country. The duty-free storage areas, which are usually run by municipal corporations, are available to domestic and foreign-owned companies. Warehousing, assembly and manufacturing are allowed in these areas, with permission from the Board of Customs.

4.6 4.6.1

INVESTMENT CLIMATE Openness to Foreign Investment

The Finnish Government maintains a favorable attitude toward direct foreign investment. In 1993, laws restricting foreign ownership were abolished to support the already commonly accepted liberal treatment of foreign investments in Finland. Because of liberalization, Finland’s EU entry, the opening of former Soviet markets - creating opportunities for Finland to act as a gateway - and the economic recovery, foreign investment in Finland has accelerated in recent years. Unlike many other countries, however, Finland does not “positively” discriminate in favor of foreign-owned firms by giving them tax holidays or other subsidies not available to other firms in the economy. Instead, Finland relies on “condition-providing policies” which means pursuing policies that offer all firms in the economy appropriate conditions and sufficient pools of advanced factors of production, including an educated labor force and well-functioning infrastructure. There are some legal requirements for non-European Area residents (persons or companies) to conduct business in Finland. In certain areas involving specific safety or health hazards or financial risks, specific conditions must be met to conduct trade. These regulated forms of trade are governed by section 3 of the Trade Act as well as by specific legislation. A non-European Economic Area resident (person or company) operating in Finland must refer to the authorities to obtain a license or a notification when starting a business in the “regulated” forms of trade, including: banking and insurance, nuclear energy-related activities, mining, manufacturing and sale of medicinal substances, dangerous chemicals and explosives, private security services, travel agencies, restaurant and catering services. Supply of mandatory labor pension insurance and workers’ compensation is possible only through a company established in Finland. This provision is designed to ensure compliance with social security legislation. The Aland Islands are an exception to common Finnish practice. Based on international agreements dating from 1921, property ownership and the right to conduct business are limited to only those individuals with right of domicile in the Aland Islands. The “Invest in Finland” Bureau operates within the government-sponsored Finpro (formerly Finnish Foreign Trade Association). Its purpose is to provide potential investors with detailed information on investing in Finland (www.finpro.fi).

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Conversion and Transfer Policies

Finland does not have any exchange controls. There are no restrictions on transferring investment capital or profits abroad in freely convertible currencies at a legal market rate. There is no limit on dividend distributions, as long as they correspond to a company’s official earnings records. Foreign investors are not required to pay tax on capital gains or investment income derived from Finland. The stamp duty on transactions conducted on the Stock Exchange and on the OTC market has been abolished. The Bank of Finland compiles the country’s balance of payments data in accordance with International Monetary Fund (IMF) standards. To this end, the main details of all single payment items exceeding EUR 8,000 (USD 8,480) are to be submitted on a form either to the Finnish bank effecting the payment or directly to the Bank of Finland.

4.6.3

Expropriation and Compensation

Private property rights are well protected in Finland. There have been no cases of expropriation or nationalization since the Second World War.

4.6.4

Dispute Settlement

In 1969, Finland became a member of the International Center for the Settlement of Investment Disputes (ICSID). There is no record of any significant investment dispute in the last three decades.

4.6.5

Performance Requirements and Incentives

There are no performance requirements or commitments imposed on foreign investment in Finland. However, to conduct business in Finland, some residency requirements must be met to ensure that persons liable for the company’s acts can be brought to court if necessary. At least half of the founders (natural or legal persons) of a company to be established in Finland must reside within the EEA. Otherwise, a special permit issued by the Ministry of Trade and Industry is needed. The residence requirement can, in most cases, be fulfilled by appointing a legal representative with residence in Finland to be in charge of the business. The nationality of the founder is thus irrelevant. The extensively revised Companies Act came into force in September 1997. In line with common Western European practices, the law divides limited liability companies into public (Oyj) and private limited (Oy) companies. New financing instruments, such as capital loan and preference shares, were made available to companies. All companies registered in Finland have access to government assistance under special development programs. Foreign-owned companies are eligible for government incentives on an equal footing with Finnish-owned companies. Assistance and subsidies are granted by the Ministry of Trade and Industry (MTI) or other ministries depending on the field of business activity, the Technology Development Center (TEKES), the Parliament-managed venture capital fund, and the Finnish National Fund for Research and Development (SITRA). Companies operating in Finland have access to EU structural funds through national programs. EU funding may cover half the total costs of a program provided that the other half comes from national private and/or public sources. Finnish policy on business aid has sought to reduce sectoral aid and channel aid into intangible investments and development of the operating environment. The business support system has been simplified and supervision www.icongrouponline.com

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intensified. Support is provided in the form of tax benefits, loans, guarantees, cash grants and investment in equity, as well as in supply of expertise and employee training, and most of the support is for SMEs. Small firms can also get start-up aid to help with their first 12 months of operation. This subsidy can amount to as much as 45 percent of the project’s wage costs. Subsidies may be given for manufacturing, tourism and business services. MTI provides subsidies for investments in the form of regional investment aid, aid for small businesses or development aid for small and medium size enterprises (SMEs) and aid for improvement of the operational environment of the undertaking. SITRA’s corporate funding operations comprise venture capital, which is divided between seed funding and growth funding, fund investment and the commercialization of trading technology. TEKES is the main financing organization for applied and industrial R&D in Finland. Its funds are awarded from the state budget. The Foundation for Finnish Innovations provides risk financing for developing the innovations of private investors and small entrepreneurs. Firms established in development regions may receive subsidies for the transportation costs of products. MTI provides grants to promote internationalization. Aid for export promotion projects to be undertaken in EU/EEA territory is available only to SMEs as defined by EU/EEA state aid regulations. MTI grants energy subsidies to companies and organizations for investments promoting energy conservation and the use of domestic energy sources. To promote venture capital investments in Finnish SMEs, Finnvera grants venture capital guarantees.

4.6.6

Right to Private Ownership and Establishment

Private ownership and entrepreneurship is the norm in Finland. In most fields of business activity, participation by foreign companies or individuals is unrestricted. As the government pursues privatization of state-owned companies, both private and foreign participation is welcome except in some enterprises operating in sectors related to national security. Competitive equality is the official standard applied to private enterprises in competition with public enterprises. Private companies do not face discrimination. With the end of the Restriction Act in January 1993, Finland removed most restrictions on foreign ownership of property in Finland. Restrictions, such as requirements to obtain permission of the local government in order to purchase a vacation home in Finland were abolished January 1, 2000, bringing Finland fully in line with EU norms.

4.6.7

Intellectual Property Risks

The Finnish legal system protects property rights, including intellectual property, and Finland adheres to numerous international agreements concerning intellectual property. Finland has joined the most important copyright agreements. Patent rights are consistent with international standards. In Finland a granted patent applies for 20 years. In 1996, Finland joined the European Patent Convention (EPC) and the European Patent Organization (EPO). Finland is clearly the leader when the number of so-called high-tech patent applications (8 applications/ 1 million Finns) is compared in proportion to the population of different countries. Finland is a member of WIPO, and participates primarily through its membership in the EU. The idea of protection of intellectual property is well developed. Information on copying and copyright infringement is provided by several copyright holder interest organizations such as the Copyright Information and Anti-Piracy Center. The Business Software Alliance (BSA), a worldwide software anti-piracy organization, began operations in Finland in January 1994. Finland has been a member of the Paris Convention for the Protection of Industrial Property since 1921, the Berne Convention for the Protection of Literary and Artistic works since 1928 and the Rome International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations since 1983.

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The Finnish Copyright Act, which traditionally also grants protection to authors, performing artists, record producers, broadcasting organizations and catalog producers, has been adjusted to comply with EU directives. As part of this harmonization, the period of copyright protection was extended from 50 years to 70 years. Protection for database producers (currently a part of catalog producer rights) has been defined consistent with EU practice. National transition period procedures are defined in Parliament. The Finnish Copyright Act provides for sanctions ranging from fines to imprisonment for up to two years. Search and seizure are authorized in the case of criminal piracy, as is the forfeiture of financial gains. The Copyright Act has covered computer software since 1991.

4.6.8

Transparency of the Regulatory System

The Trade Act, as well as specific legislation referred to in it, provides more detailed information on trade practices in Finland. Section V of the Trade Act names “regulated forms of trade” in which a non-EEA resident needs permission from the Ministry of Trade and Industry. Also, according to the Trade Act, everyone launching a business in Finland is obliged to submit a notice to the Trade Register, which is maintained by the National Board of Patents and Registration. The Securities Market Act contains regulations on corporate disclosure procedures and requirements, responsibility for flagging share ownership, insider regulations and offenses, the issuing and marketing of securities, and trading. The law defines and takes into account new instruments, which have become common in financial markets, such as securities lending and repurchase agreements. Finnish legislation recognizes the same internationally common financial market contractual arrangements as legislation elsewhere in EU. Regulations concerning clearing of securities trades have been incorporated in the law since 1998. Clearing has become subject to licensing, and is supervised by the Financial Supervision Authority, which oversees the financial markets. The law defines the requirements of clearing parties and their mutual responsibilities. Finnish tax, labor, health and safety, and related laws and policies are largely neutral towards the efficient mobilization and allocation of investment. Finnish legislation does not normally influence regional distribution of investments except when specifically designed to do so, such as through regional incentive programs.

4.6.9

Capital Market Risks

Credit is allocated on market terms and is made available to foreign investors in a non-discriminatory manner. The private sector has access to a variety of credit instruments. Legal, regulatory, and accounting systems are transparent and consistent with international norms.

4.6.10

Political Violence

There have been no instances of political violence since the struggle for independence in 1918.

4.6.11

Corruption

Corruption in Finland is covered by the Criminal Code (R1 101/19.12.89) and provides for sanctions ranging from fines to imprisonment for up to four years, depending on the seriousness of the crime. Both giving and accepting a bribe is considered a criminal act under the Criminal Code. Finland does not have statutory rules concerning bribes paid to foreign officials. The Finnish Parliament has started to review amendments to the criminal code with a view to eliminating the current dual criminality provision relating to the offence of bribing of a foreign public official. www.icongrouponline.com

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Corresponding payments to domestic public officials are non-deductible on the basis of case law and practice of the tax authorities. In case law, the same rule applies to bribes paid to foreign public officials and the same rule is applied by tax authorities. Finnish authorities declare that the non-deductibility of bribes is self-evident, and that the issue has never been raised in Finland. In June, 2002 the Finnish Parliament passed a government bill implementing the European Council’s Criminal Law Convention on Corruption which, when in force, would make it possible to prosecute also Members of Parliament (MPs), as well as MP candidates, and Members of the European Parliament for unlawful conduct in office, including corruption. In October 2002, Parliament gave the final formal approval to the new legislation. Previously, corruption of MPs had not been a criminal offense in Finland, and Finland had been one of the few European countries where MP’s still had immunity. Only a few persons are convicted of bribery each year in Finland. The high moral standard of Finnish civil servants, the independence in the exercise of their duties, the monitoring systems built into public administration and the transparency of Finnish society and institutions promotes an almost corruption-free environment in Finland. Transparency International has rated Finland the least corrupt country in terms of business practices (August 2002). Finland scored almost the maximum possible score, 9.7 of 10 (=highly clean). Finland ratified the 1959 European Convention on Mutual Legal Assistance in Criminal Matters and its 1978 Additional Protocol. The U.S and Finland have an extradition treaty, signed in June 1976; it entered into force in May,1980. Finland is a party to the 1957 European Convention on Extradition. Finland is a signatory to the OECD Convention on Combating Bribery. The instruments of ratification of the convention were deposited in December 1998. The amended Penal Code entered into force on 1 January 1999. The convention entered into force on 15 February 1999.

4.6.12

Bilateral Investment Agreements

Finland has concluded bilateral investment agreements with the following 45 countries: Albania, Argentina, Belarus, Bosnia-Herzegovina, Bulgaria, Chile, China, the Czech Republic, Egypt, El Salvador, Estonia, Ecuador, Hungary, India, Indonesia, Kazakhstan, Croatia, Kuwait, Latvia, Lithuania, Macedonia, Malaysia, Morocco, Mexico, Oman, Peru, Philippines, Poland, Qatar, Republic of Korea, Republic of Lebanon, Republic of Moldova, Republic of Slovenia, Romania, Russia, Slovakia, South Africa, Sri Lanka, Tanzania, Thailand, Turkey, Ukraine, United Arab Emirates, Uzbekistan, and Vietnam. In September 1989, Finland and the U.S. signed a convention (TIAS 12101) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital. The convention entered into force December 30, 1990.

4.6.13

OPIC and Other Investment Insurance

In January 1996, OPIC and Finnvera (former Finnish Guarantee Board FGB) signed an agreement to encourage joint U.S. - Finnish private investments in Russia and the Baltic States. Under the agreement, OPIC and Finnvera will work together to enhance the development of joint ventures by promoting private investment, encouraging cooperative efforts in specific target sectors, and working jointly with appropriate authorities in the host country to promote foreign investment. OPIC is the U.S. Government agency that assists U.S. investors with project financing, political risk insurance, and privately managed equity investment funds in developing markets and emerging economies. Finnvera is a Finnish government-operated export credit guarantee agency.

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The 1996 agreement was preceded, in 1992, by a Principles of Cooperation Agreement between OPIC and the Finnish Fund for Industrial Cooperation (Finnfund). The two organizations agreed to share information concerning opportunities for private investment, exchange knowledge of techniques for the encouragement and sustenance of investment, including approaches to risk mitigation and management, and encourage cooperative enterprises among their nationals to finance private investment in developing economies. The former Soviet Union and Eastern Europe were targeted as areas of focus. Finland has been a member of the Multilateral Investment Guarantee Agency (MIGA) since 1988.

4.6.14

Labor

The Finnish labor force is highly skilled and well educated. The Act on Employment Contracts is the main regulating act applied to employment relationships. It includes the minimum conditions regarding working hours, annual leave, safety conditions etc. In addition, in most industrial sectors the employer and employee organization have concluded collective agreements on payment and working conditions. High costs have led much of Finnish industry to use labor-saving high technology whenever possible. High unemployment has made trade unions somewhat more open to discuss increased labor flexibility. Finland adheres to most ILO conventions; enforcement of worker rights is effective.

4.7 4.7.1

TRADE AND PROJECT FINANCING The Banking System

In the last few years, the Finnish banking system has undergone rapid change. The initial impetus for this process was the step-by-step deregulation of financial markets and capital movements in the 1980s as part of the overall financial integration in Europe. Then the recession in the early 1990s and a severe banking and financial sector crisis, aggravated by bad lending practices in the late 1980s, touched off a consolidation of excess banking capacity. Tighter competition ensued from Finland’s EU entry, accelerating cost cutting in the sector. Financial consolidation has been accomplished by reducing personnel, closing branch offices and introducing modern banking technology. The Finnish banking system is dominated by three major groups of deposit banks: Nordea as well as OKO Bank (the Cooperative Bank Group) and the Sampo Group. Most Finnish banks offer banking services through WAP (wireless application protocol). Customers are able to handle bank transfers, pay bills, ask for accounting info, send/receive customer mail, shop and even buy shares on the Finnish stock market using a WAP phone. The first bank in the world to offer WAP banking services was Merita Nordbanken (now Nordea). The service has been available since October 1999.

4.7.2

Foreign Exchange Control Risks

All Finnish foreign exchange controls have been abolished.

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General Financing Availability

The Finnish financial market is typical of European countries where banks and financing institutions have the dominant role, although insurance institutions play a major role in credit supply. Insurance companies, through their management of compulsory insurance schemes of the public social security system, lend a substantial part of the money back to the companies that pay the compulsory premiums. Financing is also available through the stock exchange and the government’s financing systems.

4.7.4

Financing Export Strategies

Government-owned companies or agencies provide financing and guarantees for exports. Depending on the nature of the goods exported and on the risks connected to trading partners, a portion of the export costs must be provided by the company in question. Finland prefers that, in subsidized export financing, (where Finland adheres to OECD principles), international arrangements be made with a minimum of government involvement. In addition to government activities, commercial banks provide financing, with guarantees when possible, for exports. The banks advise their customers on bank loans as well as on loans granted by other credit institutions.

4.7.5

Types of Available Export Financing and Insurance

Financing and guarantees for exports are provided for by the Sampo Group and Finnvera. Major Finnish government and other programs are detailed below.

Sampo Sampo is Finland’s first full service financial group, providing financial, investment and insurance services to its customers. The insurance company Sampo and the banking group Leonia merged at the beginning of 2001 to Sampo-Leonia and in April 2001 the name was shortened to Sampo. Sampo provides medium- and long-term financing for the export of capital goods and services from Finland to markets throughout the world. Credit structures applied by Sampo bank in export and project finance transactions are divided into buyer-credit, credit line and project finance. Credits extended by Sampo can be divided to three major groups according to the level of official support; market-term credits, OECD term-export credits and concessional credits. Sampo has in-depth expertise in structuring, arranging and financing international projects, especially in the following defined industry sectors; pulp and paper, energy and infrastructure, and telecommunications (www address: www.sampo.fi)

Finnfund: The Finnish Fund for Industrial Cooperation Similar to the U.S. government-sponsored OPIC, Finnfund promotes investments in developing countries. Finnfund acts as an agent in Finland for EU programs for the financing of investment in emerging continents. Finnfund provides equity capital as well as long-term investment loans and also participates in guarantee arrangements. In addition to financing, the corporation offers a broad range of fund-management and advisory services. Finnfund is owned by the State of Finland, Finnvera, the Confederation of Finnish Industry and Employers, and the state-owned company Solidium (Web site: www.finnfund.fi).

NIB: Nordic Investment Bank NIB is a multilateral financial institution owned by the five Nordic countries. Its head office is located in Helsinki. NIB extends loans and provides guarantees on normal banking terms for export and investment projects in line with Nordic interests. Loans and guarantees are given to investments that assure energy supply, improve infrastructure or

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support research and development. The core of NIB’s international lending consists of project investment loans, which are granted to projects with Nordic participation, usually with a government guarantee. Outside the Nordic area, NIB finances a variety of international projects, both in emerging market and the OECD countries. The bank extends credits for projects supporting economic development in the Nordic countries’ neighboring areas and for investments in parts of the world which are of mutual interest to the recipient country and the Nordic countries. (Web site: www.nib.fi).

Finnvera Finnvera is a specialized finance company promoting Finnish exports by offering export-credit guarantees and supporting domestic operations of small and medium-sized companies by offering risk financing and guarantees. Owned entirely by the Finnish State, Finnvera was formed by merging the activities of Kera Corporation and the Finnish Guarantee Board (FGB) on January 1, 1999. Finnvera’s domestic development and financing solutions are particularly geared towards small and medium- sized companies, and thus Finnvera also helps to promote the government’s regional policy objectives. Finnvera is the official Finnish export-credit agency (ECA), in addition to FIDE, providing export guarantees and insurance. Finnvera also acts as an Intermediary for financing by the EU Joint European Venture Initiative (JEV) and by the European Investment Fund. It is involved in cooperation in the OECD, EU and Berne Union. It represents Finland at meetings of the Paris Club and works in cooperation with the European Mutual Guarantee Association (EMGA). Finnvera’s export credit guarantee and insurance commitments are fully guaranteed by the state of Finland (Web site: www.finnvera.fi).

FIDE Ltd. FIDE Ltd. is a state-owned limited liability company that began operations on January 1, 1997. The Company was set up by virtue of the Act on an Interest Equalisation Company for Officially Supported Export Credits and its activities are governed by the Act on the Interest Equalisation of Officially Supported Export Credits. The Company has been accorded the Export Credit Agency (ECA) status based on international agreements. From January 1, 1999 FIDE is a subsidiary of Finnvera. FIDE Ltd. offers companies and financial institutions an internationally competitive possibility to utilize OECD-term export credits by administrating the interest equalization system and by developing the Finnish export finance system. FIDE provides companies and financial institutions with interest equalization offers and concludes interest equalization agreements with Finnish and foreign financial institutions. FIDE advises companies on the financing of exports and participates in the international co-operation of export financing, particularly in the OECD and the EU. FIDE is an internationally notified official Export Credit Agency (ECA) (Web site: www.fide.fi)

SITRA and TEKES SITRA (the Finnish National Fund for Research and Development) and TEKES (the Technology Development Center) are public financing institutions with the purpose of strengthening the role of research in economic life and promoting new products with the aim of introducing internationally competitive high-technology products and production methods. SITRA makes equity-related investments in high-tech companies during their start up and growth stages and finances management buy-outs and spin-offs from large and medium-sized companies (corporate venturing) and the incorporation of these new businesses. It is a shareholder in about 100 different technology enterprises. TEKES stimulates and coordinates research and development projects between Finnish companies, universities and research institutes and their foreign counterparts. Activities should diversify production structures, increase production and exports, and create a foundation for employment and well-being (Web site: www.sitra.fi & www.tekes.fi)

Ministry of Trade and Industry The Ministry and its regional Employment and Economic Development centers offer subsidies for investment in the form of regional investment aid, aid for small businesses or development aid for small and medium-size enterprises

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(SMEs). Special investment and start-up aid is available for small companies in the whole country, especially in rural areas and structural adjustment areas. This subsidy can be up to 45 percent of the investment in development areas and up to 15 percent elsewhere in the country. SMEs can obtain special development aid for improving their competitiveness in the long run or operations increasing internationalization. The ceiling of aid for product development projects is 35 percent which, however, can be exceeded by 5 percentage points inside the development area. (Web site: www.ktm.fi)

4.7.6

Financing Projects

Sampo Group and Finnfund provide financing for overseas projects. The participation of third-country firms in projects is possible. The Nordic Investment Bank (NIB) can help finance projects presenting adequate security and good risk classification, both within and outside the Nordic area.

4.7.7

Banks with Correspondent Banking Arrangements

All principal Finnish banks have extensive correspondent relationships with U.S. banks, maintaining relationships with banks in every state as well as with all of the larger financial center banks. Further information on correspondent relationships can be obtained from the Finnish Bankers’ Association, P.O. Box 1009, FIN-00101 Helsinki; Tel: 358-9-4056 120, Fax: 358-9-40561-291(Web site: www.pankkiyhdistys.fi).

4.8

TRAVEL RISKS

4.8.1

Local Business Practices

Finland is a modern, commercially mature country that enjoys close relations with its Nordic neighbors. Social and business protocol is similar to that in the United States and requires no special mentions of taboos. It is worth noting that relationships are important within the social and business world, as Finns prefer to deal with people they know and trust.

Workweek The average Finnish workweek is 40 hours per week, with annual leave of 25 days, 12.5 free days, and 9 paid holidays. Part-time employment averages to 17.8 hours per week.

4.8.2

Visa Requirements and Travel Information

With the exception of Nordic (Sweden, Norway, Denmark, Iceland) citizens, citizens of EU countries (except Greece), and citizens of Switzerland, San Marino and Liechtenstein, foreigners entering Finland must have a valid passport. A tourist or business visa is not required for stays of up to three months. For non-EU citizens a visa is needed for stays exceeding 90 days. Visa applications should be submitted to a Finnish diplomatic mission before entry into Finland. A foreigner needs a residence permit in order to stay in Finland for a longer period of time. However, residence permits are also needed for short stays of less than three months if the purpose of the stay is to work in Finland. Residence permits require either a valid passport or a travel document. Foreigners must have work permits if they www.icongrouponline.com

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intend to work in Finland. Exceptions are citizens of the Nordic countries or citizens of EU/EEA countries. EUcitizens outside the Nordic countries need to apply for an EEA-card from the local police for stays exceeding 90 days. An EEA-card is a combined work and residence permit. For more travel information please go to www.travel.state.gov.

4.8.3

Infrastructure for Conducting Business

Language The two official languages in Finland are Finnish and Swedish. About 92 percent of the population speak Finnish and 5.5 percent speak Swedish. Both languages are compulsory at school. English is widely spoken in Finland, especially among younger people and in major cities.

Education and Training Services Finland invests more in education than the EU countries on average. All children aged 7-15 – even disabled – attend school in Finland. Comprehensive school is a nine-year compulsory general schooling for all children aged 7-16. The municipalities pay for teachers’ salaries, books, health care, and school meals. After completing comprehensive school, students may attend high school for three years or receive vocational education. High school prepares students for university studies. Tuition at universities is minimal. Helsinki has international, English, German, Russian, French, and Jewish schools in which classes are taught partly in foreign languages and partly in Finnish. The International, English, German and Jewish schools are private and charge tuition. University level education is mainly in Finnish, with exception of English language BBA and MBA programs in certain universities and polytechnics.

Medical Services Medical facilities are widely available. The public hospital system will not honor foreign credit cards and/or U.S. insurance coverage. However, private hospitals and clinics that accept major credit cards are widely available. Travelers have found that, in some cases, a letter from their carrier describing supplemental medical insurance with specific overseas coverage has proved useful. A foreigner is usually covered by the Finnish social security after moving to Finland, with health care as one of the benefits. Services are provided within each municipality. The quality of public health care is equivalent to care given by private doctors. In addition, the employers subsidize occupational health care.

Housing Most people in Finland own their own housing. The cost to rent an apartment varies depending on the size, age, condition and location. Rents are generally quite high, especially within the Helsinki area, and most places come unfurnished.

Food Despite prices converging with other EU levels, Finland’s price structure regarding food and household needs is the lowest of the Nordic countries and only slightly above the OECD average. Finnish food is consistent to produce that is in season, which provides an array of berries, mushrooms, seafood etc. Potatoes are a main staple and accompany most evening dishes. www.icongrouponline.com

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Country Data

Population: 5.200.000 Population growth rate: 0.2% Religions: •

Lutheran (84.6%)

•

Orthodox (1.1%)

•

No denomination (13.1%)

•

Other (1.1%)

Government system: Republic Languages: •

Finnish (92.14%)

•

Swedish (5.58%)

•

Lappish (0.03%)

•

Russian (0.64%)

•

Other (1.61%)

Length of workweek: •

38.1 h (employed full time)

•

20.1 h (part time employees)

Employment rate (persons aged 15-64): 67.7% Source: Statistics Finland

4.9 4.9.1

KEY CONTACTS U.S. Embassy Trade Personnel

Commercial Service of the United States Itainen Puistotie 14 B FIN-00140 Helsinki, Finland or PSC 78, Box H APO AE 09723 Tel: (358-9) 616 250 Fax: (358-9) 6162 5130 E-mail: [email protected]

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Economic Section Itainen Puistotie 14 B FIN-00140 Helsinki, Finland Tel: (358-9) 616 250 Fax: (358-9) 6162 5766 Defense Attache Office Itainen Puistotie 14 B FIN-00140 Helsinki, Finland Tel: (358-9) 616 250 Fax: (358-9) 6162 5808 Foreign Agricultural Service Dag Hammarskjolds Vag 31 S-115 89 Stockholm, Sweden Tel: (46-8) 783 5390 Fax: (46-8) 662 8495 E-mail: [email protected]

4.9.2

Washington-Based U.S. Government Contacts

Ms. Leah Markowitz Desk Officer for Scandinavia U.S. Department of Commerce MAC EU Office Washington, D.C. 20230 Tel: (202) 482-4414 Fax: (202) 482-2897 E-mail: [email protected] Mr. Scott Bleggi Area Director – Western Europe Foreign Agricultural Affairs U.S. Department of Agriculture Washington, D.C. 20250 Tel: (202) 690-3412 Fax: (202) 690-2909 E-mail:[email protected] U.S. Department of Agriculture Foreign Agricultural Service Trade Assistance and Promotion Office Tel: (202) 720-7420 Fax: (202) 690-4374 www.fas.usda.gov E-mail: [email protected] / [email protected] TIC Trade Information Center in Washington Tel: 1-800-USA-TRADE www.trade.gov/td/tic E-mail: [email protected] www.icongrouponline.com

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U.S. Department of State Commercial and Business Affairs (E/CBA) 2201 C Street NW, Room 2318 Washington, D.C. 20520 Tel: (202) 647-1625 Fax: (202) 647-3953 www.state.gov/www/about_state/business/index.html E-mail: [email protected] Overseas Private Investment Corporation (OPIC) 1100 New York Avenue, NW Washington, D.C. 20527 Tel: (202) 336-8400 Fax: (202) 408-9859 www.opic.gov E-mail: [email protected]

4.9.3

Chambers of Commerce

Mr. Kari Jalas Managing Director Central Chamber of Commerce P.O. Box 1000 (Aleksanterinkatu 17, WTC Helsinki) FIN-00101 Helsinki, Finland Tel: (358-9) 696 969 Fax: (358-9) 650 303 www.keskuskauppakamari.fi E-mail: [email protected] Mr. Timo Vuori Secretary General International Chamber of Commerce (ICC) Aleksanterinkatu 17, WTC Helsinki FIN-00101 Helsinki, Finland Tel: (358-9) 669 459 Fax: (358-9) 6969 6647 www.iccfin.fi E-mail: [email protected] Mr. Heikki J. Perala Managing Director Helsinki Chamber of Commerce Kalevankatu 12 FIN-00100 Helsinki, Finland Tel: (358-9) 228 601 Fax: (358-9) 2286 0228 www.helsinki.chamber.fi E-mail: [email protected] Mr. Matti Sundberg President and Chairman www.icongrouponline.com

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Finnish-American Chamber of Commerce* P.O. Box 50 00441 Helsinki, Finland Tel: (358-9) 228 28 311 Fax: (358-9) 228 28 328 www.finlandtrade.com E-mail: [email protected]

4.9.4

World Trade Center in Helsinki

Ms. Sirpa Rissa-Anttilainen Managing Director World Trade Center Helsinki P.O. Box 800 (Aleksanterinkatu 17) FIN-00100 Helsinki, Finland Tel: (358-9) 6969 2020 (358-9) 6969 2121 (trade information) Fax: (358-9) 6969 2027 www.wtc.fi E-mail: [email protected]

4.9.5

Trade Associations

Mr. Guy Wires Managing Director Federation of Finnish Commerce and Trade Mannerheimintie 76 A FIN-00251 Helsinki, Finland Tel: (358-9) 431 560 Fax: (358-9) 4315 6302 www.kaupankl.fi E-mail: [email protected] Central organization for 40 branch associations Ms. Airi Vaaranto Head of Secretariat Finnish Foreign Trade Agents’ Federation Elimaenkatu 29 FIN-00510 Helsinki, Finland Tel: (358-9) 8683 1650 Fax: (358-9) 8683 1651 www.agenttiliitto.fi E-mail: [email protected] Mr. Jari Perko Managing Director Finnish Direct Marketing Association Lonnrotinkatu 11 A FIN-00120 Helsinki, Finland

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Tel: (358-9) 2287 7400 Fax: (358-9) 6121 039 www.ssml-fdma.fi E-mail: [email protected] Mr. Leif Fagernäs Managing Director Confederation of Finnish Industry and Employers P.O. Box 30 (Etelaranta 10) FIN-00130 Helsinki, Finland Tel: (358-9) 686 81 Fax: (358-9) 6868 2316 www.tt.fi E-mail: [email protected] Mr. Martti Maenpaa Director General Technology Industries of Finland P.O. Box 10 (Etelaranta 10) FIN-00130 Helsinki, Finland Tel: (358-9) 192 31 Fax: (358-9) 624 462 www.teknologiateollisuus.fi E-mail: [email protected] Mr. Timo Poranen President Finnish Forest Industries’ Federation P.O. Box 336 (Snellmaninkatu 13) FIN-00170 Helsinki, Finland Tel: (358-9) 132 61 Fax: (358-9) 1324 445 www.forestindustries.fi E-mail: [email protected] Mr. Tapani Kaskeala President Finpro P.O. Box 358 (Porkkalankatu 1) FIN-00181 Helsinki, Finland Tel: (358-204) 6951 Fax: (358-204) 695 200 www.finpro.fi E-mail: [email protected] Ms. Sirkka Aura Chief Executive Invest in Finland Bureau Aleksanterinkatu 17, WTC Helsinki FIN-00101 Helsinki, Finland Tel: (358-9) 6969 125 Fax: (358-9) 6969 2530 www.investinfinland.fi www.icongrouponline.com

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E-mail: [email protected]

4.9.6

Finnish Government Agencies

Dr. Jaana Husu-Kallio Director, Department of Food and Health Ministry of Agriculture and Forestry Hallituskatu 3 A, P.O. Box 30 FIN-00023 Government, Finland Tel: (358-9) 160 3385 Fax: (358-9) 160 3338 www.mmm.fi E-mail: [email protected] Mr. Hannu Paju Director Employment and Economic Development Center P.O. Box 15 (Maistraatinportti 2) FIN-00240 Helsinki, Finland Tel: (358-9) 2534 2111 Fax: (358-9) 2534 2000 www.te-keskus.fi E-mail: [email protected] Dr. Osmo Maki-Petays Head of Meat Hygiene Unit National Food Agency P.O. Box 28 FIN-00581 Helsinki, Finland Tel: (358-9) 3931 5516 Fax: (358-9) 3931 590 www.elintarvikevirasto.fi/english/ E-mail: [email protected] Mr. Veikko Koskela Senior Inspector The National Board of Customs P.O. Box 512 (Erottajankatu 2) FIN-00120 Helsinki, Finland Tel: (358-9) 614 3804 (358) 20 391 100 (Customs Information) Fax: (358-9) 20 492 2852 (358) 20 492 1812 (Customs Information) www.tulli.fi E-mail: [email protected] Ms. Heli Jeskanen-Sundstrom Director General Statistics Finland Tyopajankatu 13 FIN-00022 Statistics Finland www.icongrouponline.com

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Tel: (358-9) 173 41 Fax: (358-9) 1734 2750 www.stat.fi E-mail: [email protected] Mr. Reijo Aarnio Data Protection Ombudsman Office of Data Protection Ombudsman Ministry of Justice P.O. Box 315 (Albertinkatu 25 A, 3rd fl.) FIN-00180 Helsinki, Finland Tel: (358-9) 259 8771 Fax: (358-9) 259 87735 www.tietosuoja.fi E-mail: [email protected] Mr. Pekka Järvinen Manager, Information Services Finnish Standardization Association (SFS) Maistraatinportti 2 A, 3rd fl. FIN-00240 Helsinki, Finland Tel: (358-9) 1499 3366 Fax: (358-9) 1464 925 www.sfs.fi E-mail: [email protected] or [email protected] Mr. Tuomo Ilomaki Managing Director Finnish Electrotechnical Standard Association (SESKO) P.O. Box 134 (Sarkiniementie 3) FIN-00210 Helsinki, Finland Tel: (358-9) 696 391 Fax: (358-9) 677 059 www.sesko.fi E-mail: [email protected] or [email protected] Mr. Martti Enajarvi Director General National Board of Patents and Registration of Finland Arkadiankatu 6 A FIN-00100 Helsinki, Finland Tel: (358-9) 6939 500 Fax: (358-9) 6939 5328 www.prh.fi/engl.html E-mail: [email protected] Ms. Marita Wilska Director General National Consumer Administration P.O. Box 5 (Haapaniemenkatu 4 A, 7th fl.) FIN-00530 Helsinki, Finland Tel: (358-9) 772 61 Fax: (358-9) 7726 7586 www.icongrouponline.com

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www.kuluttajavirasto.fi E-mail: [email protected]

4.9.7

Market Research Firms

Mr. Ari Heino Managing Director Research International Finland Oy Lapinlahdenkatu 3 A 14 FIN-00180 Helsinki, Finland Tel: (358-9) 6859 930 Fax: (358-9) 6859 9333 www.research-int.fi Mr. Risto Seppälä Managing Director A.C. Nielsen Finland Oy Tietajantie 14 FIN-02130 Espoo, Finland Tel: (358-9) 430 030 Fax: (358-9) 463 628 www.acnielsen.fi E-mail: [email protected] Mr. Kyosti Pietola Director of Economic Research (Professor) MTT Economic Research Luutnantintie 13 FIN-00410 Helsinki, Finland Tel: (358-9) 5608 6300 Fax: (358-9) 563 1164 www.mtt.fi/mttl/ E-mail: [email protected] Mr. Andrew Cannon Managing Director Marketing Radar LTD Lauttasaarentie 28-30 FIN-00200 Helsinki, Finland Tel: (358-9) 615 4511 Fax: (358-9) 6154 5200 www.radar.fi E-mail: [email protected]

4.9.8

Commercial Banks

Mr. Markku Pohjola Managing Director Nordea Bank Finland

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Aleksanterinkatu 36 B FIN-00020 Nordea, Finland Tel: (358-9) 1651 Fax: (358-9) 165 54500 www.nordea.com or www.nordea.fi Mr. Mikael Silvennoinen President Osuuspankkien Keskuspankki Oyj (OKO Bank) Teollisuuskatu 1 B FIN-00510 Helsinki, Finland Tel: (358-9) 4041 Fax: (358-9) 4043 703 www.okobank.com Mr. Mika Ihamuotila EVP, Head of Distribution & Banking Sampo Pankki Oyj. (Sampo Bank Plc.) Unioninkatu 22 FIN-00075 SAMPO, Finland Tel: (358-10) 5151s Fax: (358-10) 516 0051 www.sampo.com Mr. Kari Laukkanen Managing Director Citibank International Plc. Finland Branch Aleksanterinkatu 48 A FIN-00100 Helsinki, Finland Tel: (358-9) 348 87200 Fax: (358-9) 3488 7388 www.citibank.com

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5 5.1

DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS DISCLAIMERS & SAFE HARBOR

Summary Disclaimer. This publication ("Report") does not constitute legal, valuation, tax, or financial consulting advice. Nor is it a statement on the performance, management capability or future potential (good or bad) of the company(ies), industry(ies), product(s), region(s), city(ies) or country(ies) discussed. It is offered as an information service to clients, associates, and academicians. Those interested in specific guidance for legal, strategic, and/or financial or accounting matters should seek competent professional assistance from their own advisors. Information was furnished to Icon Group International, Inc. ("Icon Group"), and its subsidiaries, by its internal researchers and/or extracted from public filings, or sources available within the public domain, including other information providers (e.g. EDGAR filings, national organizations and international organizations). Icon Group does not promise or warrant that we will obtain information from any particular independent source. Published regularly by Icon Group, this and similar reports provide analysis on cities, countries, industries, and/or foreign and domestic companies which may or may not be publicly traded. Icon Group reports are used by various companies and persons including consulting firms, investment officers, pension fund managers, registered representatives, and other financial service professionals. Any commentary, observations or discussion by Icon Group about a country, city, region, industry or company does not constitute a recommendation to buy or sell company shares or make investment decisions. Further, the financial condition or outlook for each industry, city, country, or company may change after the date of the publication, and Icon Group does not warrant, promise or represent that it will provide report users with notice of that change, nor will Icon Group promise updates on the information presented. Safe Harbor for Forward-Looking Statements. Icon Group reports, including the present report, make numerous forward-looking statements which should be treated as such. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995, and similar local laws. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's, city's, country's or industry's actual results or outlook in future periods to differ materially from those forecasted. These risks and uncertainties include, among other things, product price volatility, exchange rate volatility, regulation volatility, product demand volatility, data inaccuracies, computer- or software-generated calculation inaccuracies, market competition, changes in management style, changes in corporate strategy, and risks inherent in international and corporate operations. Forward-looking statements can be identified in statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate,'' "estimate," "expect,'' "project,'' "intend,'' "plan,'' "feel", "think", "hear," "guess," "forecast," "believe," and other words and terms of similar meaning in connection with any discussion of future operating, economic or financial performance. This equally applies to all statements relating to an industry, city, country, region, economic variable, or company financial situation. Icon Group recommends that the reader follow the advice of Nancy M. Smith, Director of SEC's Office of Investor Education and Assistance, who has been quoted to say, "Never, ever, make an investment based solely on what you read in an online newsletter or Internet bulletin board, especially if the investment involves a small, thinly-traded company that isn't well known … Assume that the information about these companies is not trustworthy unless you can prove otherwise through your own independent research." Similar recommendations apply to decisions relating to industry studies, product category studies, corporate strategies discussions and country evaluations. In the case of Icon Group reports, many factors can affect the actual outcome of the period discussed, including exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, changes in reported data quality, changes in methodology and similar factors. Information Accuracy. Although the statements in this report are derived from or based upon various information sources and/or econometric models that Icon Group believes to be reliable, we do not guarantee their accuracy, reliability, quality, and any such information, or resulting analyses, may be incomplete, rounded, inaccurate or condensed. All estimates included in this report are subject to change without notice. This report is for informational purposes only and is not intended as a recommendation to invest in a city, country, industry or product area, or an offer or solicitation with respect to the purchase or sale of a security, stock, or financial instrument. This report does not take into account the investment

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objectives, financial situation or particular needs of any particular person or legal entity. With respect to any specific company, city, country, region, or industry that might be discussed in this report, investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the information in this report. Investing in either U.S. or non-U.S. securities or markets entails inherent risks. In addition, exchange rate movements may have an effect on the reliability of the estimates provided in this report. Icon Group is not a registered Investment Adviser or a Broker/Dealer.

5.2

ICON GROUP INTERNATIONAL, INC. USER AGREEMENT PROVISIONS

Ownership. User agrees that Icon Group International, Inc. ("Icon Group") and its subsidiaries retain all rights, title and interests, including copyright and other proprietary rights, in this report and all material, including but not limited to text, images, and other multimedia data, provided or made available as part of this report ("Report"). Restrictions on Use. User agrees that it will not copy nor license, sell, transfer, make available or otherwise distribute the Report to any entity or person, except that User may (a) make available to its employees electronic copies of Report, (b) allow its employees to store, manipulate, and reformat Report, and (c) allow its employees to make paper copies of Report, provided that such electronic and paper copies are used solely internally and are not distributed to any third parties. In all cases the User agrees to fully inform and distribute to other internal users all discussions covering the methodology of this Report and the disclaimers and caveats associated with this Report. User shall use its best efforts to stop any unauthorized copying or distribution immediately after such unauthorized use becomes known. The provisions of this paragraph are for the benefit of Icon Group and its information resellers, each of which shall have the right to enforce its rights hereunder directly and on its own behalf. No Warranty. The Report is provided on an "AS IS" basis. ICON GROUP DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RELATING TO THIS AGREEMENT, PERFORMANCE UNDER THIS AGREEMENT, THE REPORT. Icon Group makes no warranties regarding the completeness, accuracy or availability of the Report. Limitation of Liability. In no event shall Icon Group, its employees or its agent, resellers and distributors be liable to User or any other person or entity for any direct, indirect, special, exemplary, punitive, or consequential damages, including lost profits, based on breach of warranty, contract, negligence, strict liability or otherwise, arising from the use of the report or under this Agreement or any performance under this Agreement, whether or not they or it had any knowledge, actual or constructive, that such damages might be incurred. Indemnification. User shall indemnify and hold harmless Icon Group and its resellers, distributors and information providers against any claim, damages, loss, liability or expense arising out of User's use of the Report in any way contrary to this Agreement. © Icon Group International, Inc., 2007. All rights reserved. Any unauthorized use, duplication or disclosure is prohibited by law and will result in prosecution. Text, graphics, and HTML or other computer code are protected by U.S. and International Copyright Laws, and may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit permission. Permission is granted to quote small portions of this report with proper attribution. Media quotations with source attributions are encouraged. Reporters requesting additional information or editorial comments should contact Icon Group via email at [email protected]. Sources: This report was prepared from a variety of sources including excerpts from documents and official reports or databases published by the World Bank, the U.S. Department of Commerce, the U.S. State Department, various national agencies, the International Monetary Fund, the Central Intelligence Agency, and Icon Group International, Inc.

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