Oil and Gas Field Machinery in Denmark: A Strategic Reference, 2007

Oil and Gas Field Machinery in Denmark: A Strategic Reference, 2007 Edited by Philip M. Parker, Ph.D. Eli Lilly Chair ...

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Oil and Gas Field Machinery in Denmark: A Strategic Reference, 2007

Edited by

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

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Neither ICON Group International, Inc. nor its employees can be held accountable for the use and subsequent actions of the user of the information provided in this publication. Great efforts have been made to ensure the accuracy of the data, but we cannot guarantee, given the volume of information, accuracy. Since the information given in this report is forward-looking, the reader should read the disclaimer statement and user agreement provisions at the end of this report.

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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 Denmark

1

1.3

Latent Demand and Accessibility in Denmark

3

2

OIL AND GAS FIELD MACHINERY IN DENMARK......................................................5

2.1

Latent Demand and Accessibility: Background

5

2.2

Latent Demand: Market Composition

5

2.3

Latent Demand: Market Data

7

2.4

Latent Demand: Leading Segments

7

2.5

Key Suppliers

8

2.6

Prospective Buyers

8

2.7

Accessibility: Market Entry

10

2.8

Accessibility: Trade Event

10

2.9

Key Contacts

10

3 FINANCIAL INDICATORS: OIL AND GAS FIELD MACHINERY AND EQUIPMENT ...............................................................................................................................12 3.1 Overview 12 3.1.1 Financial Returns and Gaps in Denmark.................................................................................................. 13 3.1.2 Labor Productivity Gaps in Denmark....................................................................................................... 16 3.1.3 Limitations and Extensions ...................................................................................................................... 16 3.2 Financial Returns in Denmark: Asset Structure Ratios 17 3.2.1 Overview .................................................................................................................................................. 17 3.2.2 Assets – Definitions of Terms .................................................................................................................. 17 3.2.3 Asset Structure: Outlook .......................................................................................................................... 20 3.2.4 Large Variances: Assets ........................................................................................................................... 21 3.2.5 Key Percentiles and Rankings .................................................................................................................. 24 3.3 Financial Returns in Denmark: Liability Structure Ratios 39 3.3.1 Overview .................................................................................................................................................. 39 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 39 3.3.3 Liability Structure: Outlook ..................................................................................................................... 41 3.3.4 Large Variances: Liabilities ..................................................................................................................... 42 3.3.5 Key Percentiles and Rankings .................................................................................................................. 45 3.4 Financial Returns in Denmark: Income Structure Ratios 58 3.4.1 Overview .................................................................................................................................................. 58 3.4.2 Income Statements – Definitions of Terms .............................................................................................. 58 www.icongrouponline.com

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Income Structure: Outlook ....................................................................................................................... 61 Large Variances: Income.......................................................................................................................... 62 Key Percentiles and Rankings .................................................................................................................. 65

3.5 Financial Returns in Denmark: Profitability Ratios 80 3.5.1 Overview .................................................................................................................................................. 80 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 80 3.5.3 Ratio Structure: Outlook .......................................................................................................................... 82 3.5.4 Large Variances: Ratios ........................................................................................................................... 83 3.5.5 Key Percentiles and Rankings .................................................................................................................. 86 3.6 Productivity in Denmark: Asset-Labor Ratios 101 3.6.1 Overview ................................................................................................................................................ 101 3.6.2 Asset to Labor: Outlook ......................................................................................................................... 102 3.6.3 Asset to Labor: International Gaps......................................................................................................... 103 3.6.4 Key Percentiles and Rankings ................................................................................................................ 106 3.7 Productivity in Denmark: Liability-Labor Ratios 121 3.7.1 Overview ................................................................................................................................................ 121 3.7.2 Liability to Labor: Outlook .................................................................................................................... 122 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 123 3.7.4 Key Percentiles and Rankings ................................................................................................................ 126 3.8 Productivity in Denmark: Income-Labor Ratios 139 3.8.1 Overview ................................................................................................................................................ 139 3.8.2 Income to Labor: Outlook ...................................................................................................................... 140 3.8.3 Income to Labor: Gaps ........................................................................................................................... 141 3.8.4 Key Percentiles and Rankings ................................................................................................................ 144

4 4.1

MACRO-ACCESSIBILITY IN DENMARK....................................................................159 Executive Summary

159

4.2 Economic Fundamentals and Dynamics 159 4.2.1 Government Intervention Risks.............................................................................................................. 159 4.2.2 Infrastructure Development.................................................................................................................... 160 4.3 Political Risks 160 4.3.1 Economic Relationship with the United States ...................................................................................... 160 4.3.2 Politics and the Business Environment .................................................................................................. 161 4.3.3 The Political System............................................................................................................................... 161 4.4 Marketing Strategies 163 4.4.1 Distribution and Sales Channels............................................................................................................. 163 4.4.2 Agents and Distributors.......................................................................................................................... 163 4.4.3 Franchising ............................................................................................................................................. 163 4.4.4 Direct Marketing .................................................................................................................................... 163 4.4.5 Joint Ventures and Licensing Options.................................................................................................... 164 4.4.6 Creating a Sales Office........................................................................................................................... 164 4.4.7 Selling Strategies.................................................................................................................................... 164 4.4.8 Advertising and Trade Promotion .......................................................................................................... 165 4.4.9 Broadcasting........................................................................................................................................... 167 4.4.10 Pricing Issues.......................................................................................................................................... 168 4.4.11 Public Sector Marketing......................................................................................................................... 168

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Intellectual Property Risks ..................................................................................................................... 169 Hiring Local Counsel ............................................................................................................................. 169

4.5 Import and Export Regulation Risks 169 4.5.1 Trade Barrier Risks ................................................................................................................................ 169 4.5.2 Valuations on Imports ............................................................................................................................ 169 4.5.3 Licenses Required for Imports ............................................................................................................... 170 4.5.4 Controls on Exports................................................................................................................................ 170 4.5.5 Documentation Required for Trade........................................................................................................ 170 4.5.6 Temporary Entry of Goods..................................................................................................................... 170 4.5.7 Labeling Issues....................................................................................................................................... 170 4.5.8 Adherence to Free Trade Agreements .................................................................................................... 172 4.6 Investment Climate 172 4.6.1 Conversion and Transfer Policies........................................................................................................... 172 4.6.2 Expropriation and Compensation ........................................................................................................... 173 4.6.3 Dispute Settlement ................................................................................................................................. 173 4.6.4 Investment Incentives and Performance Requirements.......................................................................... 173 4.6.5 Right to Private Ownership and Establishment ...................................................................................... 174 4.6.6 Protection of Property Rights ................................................................................................................. 174 4.7 Transparency of the Regulatory System 175 4.7.1 Capital Market Risks .............................................................................................................................. 175 4.7.2 Political Violence ................................................................................................................................... 176 4.7.3 Corruption .............................................................................................................................................. 176 4.7.4 Bilateral Investment Agreements ........................................................................................................... 176 4.7.5 OPIC and Other Investment Insurance Programs................................................................................... 176 4.7.6 Labor ...................................................................................................................................................... 177 4.7.7 Free Trade Zones and Free Ports............................................................................................................ 177 4.7.8 Country Data .......................................................................................................................................... 178 4.8 Trade and Project Financing 178 4.8.1 Foreign Exchange Control Risks............................................................................................................ 178 4.8.2 General Financing Availability .............................................................................................................. 178 4.8.3 Financing Export Strategies ................................................................................................................... 178 4.8.4 Types of Available Export Financing..................................................................................................... 179 4.8.5 Financing Projects .................................................................................................................................. 179 4.8.6 Banks with Corresponding U.S. Banking Arrangements ....................................................................... 179 4.9 Travel Risks 179 4.9.1 Local Business Practices ........................................................................................................................ 179 4.9.2 Travel Advisory and Visas ..................................................................................................................... 180 4.9.3 Infrastructure for Conducting Business.................................................................................................. 180 4.9.4 Housing .................................................................................................................................................. 181 4.10 Key Contacts 181 4.10.1 Danish Government Agencies................................................................................................................ 181 4.10.2 Trade Associations and Chambers of Commerce................................................................................... 182 4.10.3 Commercial Banks ................................................................................................................................. 183 4.10.4 U.S. Embassy Contacts .......................................................................................................................... 184 4.10.5 Contacts in Washington D.C. ................................................................................................................. 184 4.10.6 U.S.-Based Multipliers ........................................................................................................................... 185

5

DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........187

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5.1

Disclaimers & Safe Harbor

187

5.2

Icon Group International, Inc. User Agreement Provisions

188

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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 oil and gas field machinery in Denmark. 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 oil and gas field machinery, the methodology decomposes a country’s strategic potential along four key dimensions: (1) latent demand, (2) micro-accessibility, (3) proxy operating pro-forma 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 oil and gas field machinery in Denmark. 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 Denmark can quickly understand where Denmark fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for oil and gas field machinery in Denmark. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macro-accessibility in Denmark. Macro-accessibility is a general evaluation of investment and business conditions in Denmark.

1.2

HOW TO STRATEGICALLY EVALUATE DENMARK

Perhaps the most efficient way of evaluating Denmark 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 oil and gas field machinery 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 DENMARK

This report provides a detailed overview of factors driving latent demand and accessibility for oil and gas field machinery in Denmark. Latent demand is largely driven by economic fundamentals specific to oil and gas field machinery. This topic is discussed in Chapter 2 using work carried out in Denmark 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 oil and gas field machinery in Denmark. I use the term “micro” since the discussion is focused specifically on oil and gas field machinery. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Denmark. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Denmark. The numbers are only indicative of an average firm whose primary activity is in Denmark. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Denmark. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “oil and gas field machinery and equipment”, as defined in Chapter 3. Again, while “oil and gas field machinery and equipment” does not exactly equate to “oil and gas field machinery”, it nevertheless gives an indicator of how Denmark compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond oil and gas field machinery. 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 Denmark: •

Openness to Trade in Denmark

•

Openness to Direct Investment in Denmark

•

Local Marketing and Entry Strategy Alternatives

•

Local Human Resources

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Introduction & Methodology •

4

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 Denmark. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Denmark. 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

OIL AND GAS FIELD MACHINERY IN DENMARK LATENT DEMAND AND ACCESSIBILITY: BACKGROUND

In 2005, Oil production in Denmark reached a total of 21.9 billion m3 whereas Gas sales reached 9.21 billion Nm3. Denmark has 19 producing fields in the North Sea with numerous platforms, wells and pipelines, a total of 378 wells contributing to production. According to the Danish Energy Agency’s new assessment, oil reserves were estimated at 257 million m3 and gas reserves at 122 billion Nm3 as of January 1, 2006. Denmark has been self-sufficient in energy since 1997. In 2005, the total production of oil, gas and renewable energy was 56% higher than total energy consumption.

2.2

LATENT DEMAND: MARKET COMPOSITION

The oil and gas industry has been an area of international focus in the last year with oil prices rising and the UN summit on climate making the headlines. This interest has been reflected in the activities taking place in Denmark with the publication of the government’s long-term goals in ‘Energy Strategy 2025’, which calls for measures to combat global warming and the need for greater competition within the industry. In December (2005), a new law replacing over 25 years of Acts was passed, laying the groundwork for a more simplified and transparent set of rules. In May 2006, the 6th Danish licensing round awarded 14 new licenses; evidence that the various oil companies will continue their explorations; ensuring that the Danish state remains self-sufficient for the near future. The state retains a 20% share of the licenses through the newly created Danish North Sea Partner, which will also become responsible, in 2012, for the stakes in DUC (Danish Underground Consortium), currently held by DONG A/S. In 2005, Oil production in Denmark reached a total of 21.9 billion m3, a drop of 3% from the previous year’s record level. The large production figure and high oil price level mean that the state is expected to receive a record-high amount in taxes and fees. With the slow down in production, it is believed that the existing, developed fields are reaching their stagnation point, highlighting the need for, and the interest in, the new exploration licenses. Gas sales also reached an unprecedented level in 2005 reaching 9.21 billion Nm3. This is attributed to the first full year of operation of the new export pipeline connecting the field ‘Tyra west’ and the Dutch ‘NOGAT’ pipeline. Due to the large production volume and high oil prices, the Danish state received record-high taxes and fees in excess of DKK 24 billion (USD 4 billion) from the activities in the North Sea—2.5 times that received in 2003. In 2005, the Danish sector of the North Sea had 19 producing fields with numerous platforms, wells and pipelines, a total of 378 wells contributing to production. According to the Danish Energy Agency’s new assessment, oil reserves were estimated at 257 million m3 and gas reserves at 122 billion Nm3 as of January 1, 2006. This corresponds to a decline in oil and gas reserves of about 4% and 8% respectively compared to the assessment made in January 2005. The decline is attributable to production exceeding the growth in reserves in 2005 but also to the moderate exploration activity undertaken in that year. Over the last five years, Danish oil production has grown by more than 65%. This remarkable growth means that the total volume of oil produced in the last six years equals the combined output from the first 25 years of oil production in Denmark. The vast majority of the oil produced came from the following six fields: Dan, Gorm, Halfdan, Siri, Skjold and South Arne. Collectively, these fields accounted for 86% of Danish oil production. The oil produced in the 15 fields operated by Mærsk Olie og Gas AS is conveyed through a pipeline to receiving facilities in Fredericia. The oil from the South Arne and Siri Fields, operated by Amerada Hess ApS and DONG E&P A/S, respectively, is loaded into tankers at the fields. Danish oil and gas deposits are found in the Danish sector of the North Sea, and the exploration of these deposits has always been subject to American interests and involvement. Historically, the adventure began on shore in 1935, when the first Danish concession was awarded—and several exploration holes were drilled onshore—by the American, F. Ravlin. This concession was later transferred to first Gulf and later Esso both of which gave it up after numerous dry wells in the 1950’s. Modern exploration can be traced back to 1962, when the Danish shipping www.icongrouponline.com

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magnate, A.P. Møller, was granted the concession—originally for 50 years—on the condition that actual production could start within 10 years. The concession granted to A.P. Møller in 1962 led to the establishment of DUC (Danish Underground Consortium) that same year as a joint venture with Gulf Oil and Shell. Over the years, the partners in this joint venture have changed, but there were always American interests, including such companies as Chevron and Texaco. To this day, DUC is still the key player in the North Sea and it currently consists of the three partners A.P. Møller/Maersk, Shell and Texaco. The A.P. Møller owned Maersk Olie and Gas A/S acts as operator for DUC, and all DUC offshore activities are coordinated through the Maersk Olie and Gas office in Esbjerg. Where DUC is the giant in the Danish oil and gas venture on the supply side, the Danish Government owned oil and gas purchasing and distribution company DONG is the giant on the demand side (operating with a monopoly on all gas trade). DONG too, is expected to invest several billion DKK over the next few years. DUC did its first offshore drillings in 1965 and in 1972; the first oil was produced from the Dan-field. Already during the late 1970’s, the Danish Government found that the terms of the concession were far too favorable for the concessionaire. As a result they were changed substantially in 1981 in preparation for today’s multiple concession system. Today, A.P. Møller holds only 2.0% of its original sole concession. In October 2003, a new deal was struck on the concession. Under the terms of a formal agreement made between the Danish state and A.P. Møller, the state will be granted a 20% stake in A.P. Møller’s profits on North Sea oil and natural gas, until the company’s drilling license expires in 2012. The license will be extended by 30 years to the year 2042, granting the Danish state a free pass as a 20% shareholder in the Danish Underground Consortium (DUC). Development activity was lower in 2005 than in any of the last five years. Total investments in field developments were DKK 4 billion (USD 667 million) for 2005. In 2004, the DUC companies’ share of total investments in field developments accounted for 59%, while their share of total production accounted for about 80%. The Halfdan, Dan and South Arne Fields and the NOGAT pipeline represented more than 66% of total investments in field developments in 2004. The largest single investment in 2004 was the continued development of the Halfdan Field, involving the installation of new processing facilities and the drilling of six additional wells. The estimate of possible investments in field developments is based on the Danish Energy Authority’s assessment of the potential for initiating further production beyond the production for which development plans have already been submitted. The Danish Energy Authority has written up estimated investments in field developments for 2005, due mainly to additional investments in the Dan, Halfdan and Gorm Fields. Estimated investments for the rest of the period is largely unchanged. Operating and administration costs reached DKK 3.8 billion (USD 633 million) for 2005—a slight increase on the previous year. Total crude oil transportation costs consist of the operating costs and capital cost associated with the use of the oil pipeline from the Gorm Field to shore, as well as a 5% profit element, which is payable on the basis of the production value of the crude oil transported. The Siri, South Arne, Nini and Cecilie Fields are exempt from the obligation to use the oil pipeline, but must instead pay a compensatory fee constituting 5% of the production value of the crude oil. The Halfdan and South Arne Fields were brought on-stream in 1999 and are not yet fully developed. The reserves of the Dan, Gorm, Skjold, Halfdan and South Arne Fields are estimated to represent about 80% of total Danish oil reserves. The remaining 20% of reserves derive from more than 30 fields and discoveries. The downward plunge of oil production that is estimated in the Danish Energy Agency’s forecasts can possibly be curbed as a result of new discoveries made, e.g. in connection with the exploration activity initiated in the Fifth Licensing Round, as well as by advances in technological research and development. The natural gas production figure of 11.52 billion Nm3 for 2005 was somewhat above the previous year’s level and beat the previous record of 11.31 billion Nm3, set in 2000. Natural gas sales soared to an unprecedented 9.21 billion Nm3 in 2005; attributable to a new pipeline for gas export, connecting Tyra West to the F/3 platform on the Dutch NOGAT pipeline; see the section Development. The pipeline was commissioned on 18 July 2004 and has a capacity of 15 million Nm3 per day. In 2004, about 10% of all gas sold was exported through the NOGAT pipeline. The increased amount of sales gas means a drop in the amount of gas re-injected into the fields. In 2005, 1.43 billion Nm3 of gas was re-injected against 1.73 billion Nm3 in 2004. The amount of gas used as fuel in offshore oil and gas production increased to 0.69 billion Nm3 in 2005 and 0.19 billion Nm3 of gas was flared for technical and safety reasons. As opposed to the production of oil, which can always be sold at the current market price, the production of natural gas requires that long-term sales contracts have been concluded. Since the start of gas sales in 1984, natural gas produced under A.P. Møller’s Sole Concession has been supplied under gas sales contracts concluded between the DUC companies and DONG Naturgas A/S. The present gas sales contracts do not stipulate a fixed total volume, www.icongrouponline.com

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but rather an annual volume that will be supplied for as long as DUC considers it technically and financially feasible to carry on production at this level. In 1997, a contract was concluded between the Amerada Hess group and DONG Naturgas A/S for the sale of gas from the South Arne Field, and, in 1998, a contract was concluded with DONG Naturgas A/S for the sale of the DONG group’s share of gas produced from the Lulita Field. The Danish Energy Authority’s forecast for the planned course of production is based on the contracts with DUC providing for total gas supplies of approx. 140 billion Nm3 until the year 2012. In addition, the planned course of production for the South Arne Field accounts for 5 billion Nm3.

2.3

LATENT DEMAND: MARKET DATA

Statistical data on equipment, broken down on total market, import markets shares, growth rates, etc., as normally seen in ISA report, are not included in this ISA. There are no statistical sources available. Also, market shares vary considerably, depending on the type of equipment in question. Average figures, even if established, would therefore be meaningless.

Gas and Oil Production, 2005 Field Cecilie Dagmar Dan Gorm Halfdan (Inc. Sif and Igor) Harald Kraka Lulita Nini Regnar Roar Rolf Siri Skjold South Arne Svend Tyra Tyra SE Valdemar

2.4

Gas (Billion NM3) 0.02 0.00 0.66 0.22 2.58 1.09 0.02 0.01 0.05 0.00 0.86 0.00 0.03 0.09 0.48 0.03 2.46 1.34 0.21

Oil (Million M3) 0.18 0.00 5.74 1.99 6.17 0.24 0.22 0.04 0.62 0.02 0.09 0.08 0.70 1.30 2.34 0.32 0.77 0.61 0.42

LATENT DEMAND: LEADING SEGMENTS

Being international by nature and by location in the middle of the North Sea, the Danish offshore industry has an excellent knowledge of and access to all types of equipment available on the world market. Even so, companies are always on the lookout for equipment representing the latest technology, and equipment, which will further enhance the overall safety and security of personnel and protect the environment. www.icongrouponline.com

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Oil and Gas Field Machinery

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8

KEY SUPPLIERS

In the early days, Danish offshore domestic suppliers enjoyed a more prominent position than today, and in fact, supplied the majority of platforms used. This is no longer the case, although some smaller platforms are still made in Denmark. Today, Danish companies dominate in the provision of services. On the equipment side, they are likely to be either suppliers of medium-sized metal structures such as tanks and pipes or act as value adding importers supplying complete systems, for instance process controls and monitoring systems, based on imported components. In any case, they will probably be located in the vicinity of the town of Esbjerg. Excluding larger structures, the U.S. has always had a strong position in the Danish offshore industry and is known to supply the vast majority of the equipment used in this sector. In this segment, industry sources do not hesitate to talk about 80-90% market shares for U.S. technology. Not only is the U.S. a strong supplier nation to this industry for historical reasons, but the key player from the beginning, A.P. Møller, was always very favorably inclined towards the U.S. and has very substantial business interests in North America. Over the years, this has undoubtedly reinforced the already strong position that the U.S. enjoys in this market. There is no reason to expect a weakening of the strong U.S. market position, as the majority of newcomers to the Danish offshore industry are American companies.

2.6

PROSPECTIVE BUYERS

The ultimate end-users of equipment are the oil companies, active in the Danish North Sea. In 2005, ten companies received and sold oil from the Danish fields. The following table shows each company’s percentage contribution to total oil production in 2005. As in preceding years, production continued to be dominated by the Shell, A.P. Møller and Texaco companies in DUC, which accounted for a combined 80% of Danish oil production in 2005.

Oil Production (%) Company Shell A. P. Møller Chevron Texaco DONG Amerada Hess Denerco Oil RWE-DEA Paladin Denerco P Danoil

Market Share 37.8 32.1 12.3 6.7 6.2 2.8 1.0 0.9 0.2 0.2

Source: The Danish Energy Authority Please find the following description of the ongoing developments in the largest field—the Dan Field.

The Dan Field •

Prospect: Abby.

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Oil and Gas Field Machinery •

Location: Block 5505/17.

•

Licence: Sole Concession.

•

Operator: Mærsk Olie og Gas AS.

•

Discovered: 1971.

•

Year on Stream: 1972.

•

Producing Wells: 58.

•

Water-Injection Wells: 48.

•

Water Depth: 40 m.

•

Field Delineation: 121 km2.

•

Reservoir Depth: 1,850 m.

•

Reservoir Rock: Chalk.

•

Geological Age: Danian and Upper Cretaceous.

•

Reserves at January 1, 2006 of Oil: 64.0 Million m3.

•

Gas: 7.3 Billion Nm3.

•

Cum. Production at January1, 2006 of Oil: 81.36 Million m3.

•

Gas: 20.52 Billion Nm3.

•

Water: 58.24 Million m3.

•

Cum. Injection at January 1, 2006 of Water: 166.38 Million m3.

•

Injection in 2005 of Water: 20.30 Million m3.

•

Total Investments at January 1, 2005: DKK 25.2 billion (USD 4.2 billion).

9

Review of Geology: Dan is an anticlinal structure partly induced through salt tectonics. A major fault divides the field into two reservoir blocks, which, in turn, are intersected by a number of minor faults. The chalk reservoir has high porosity, although low permeability. There is a gas cap in the field. Production Strategy: Recovery from the field is based on the simultaneous production of oil and injection of water. Water injection was initiated in 1989, and later high-rate water injection was introduced in large sections of the field. The high pressure involved causes the injected water to fracture the chalk, ensuring the rapid distribution of water throughout the reservoir. Injecting large amounts of water quickly stabilizes and builds up the reservoir pressure in the oil zone. The recovery of oil is optimized by flooding the largest possible reservoir volume with water. In addition, production takes place in the western flank of the Dan Field. Recovery is also based on water injection in this part of the field. Production facilities: The Dan Field comprises six wellhead platforms, DA, DD, DE, DFA, DFB and DFE, a combined wellhead and processing platform, DFF, two processing and accommodation platforms, DB and DFC, and two gas flare stacks, DC and DFD. The Dan DA, DB, DC and DD platform complex is located about 3 km from the Dan F platforms, while Dan E is an unmanned satellite platform with a helideck. In 2002, the Danish Energy Authority approved the establishment of an additional processing platform, DFG, installed in 2005 and bridgeconnected to DFF. At the Dan Field, there are receiving facilities for the production from the adjacent Kraka and Regnar satellite fields. The Dan installations supply the Halfdan Field with injection water. After final processing, the oil is transported to shore via the riser platform, Gorm E. The gas is pre-processed and transported to Tyra East for final processing. Treated production water from Dan and its satellite fields is discharged into the sea. In the Dan www.icongrouponline.com

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Oil and Gas Field Machinery

10

Field, there are accommodation facilities for 86 persons on the DFC platform and five persons on the DB platform. The DFC facilities have recently been expanded to accommodate 97 persons.

2.7

ACCESSIBILITY: MARKET ENTRY

Denmark is among the most open and transparent markets in the world for an American exporter to enter. Virtually all Danish business people have at least a good working knowledge of English and are generally neutral or favorably inclined towards Americans and American products. If anything, this particular industry has an even more positive attitude towards the U.S., as this is where the industry was “born” and where many of the industry standards were created. Much of the activity relating to Danish offshore activities is centered around the Port of Esbjerg, which is also home to many of the equipment suppliers. Whether located in Esbjerg or elsewhere in Denmark, these can be either individual importers and supply houses or U.S. and other foreign companies, which have established their own sales organizations in the country. The latter is often the case when a company has, or expects substantial sales. For major contracts, financing is negotiable. For equipment used on a day-to-day basis, 30-60 days credit in an open account is not unusual between companies with a satisfactory, ongoing business relationship.

2.8

ACCESSIBILITY: TRADE EVENT

Offshore Northern Sea (ONS), 2008 Stavanger, Norway www.ons.no ONS is among the largest trade shows and conferences in the world for the oil and gas industry. This bi-annual event which registered 1,241 exhibitors and more than 34,000 visitors when it was held in August 2006. In 2004, the American Embassy in Norway organized a successful American Pavilion at the show. The next event is scheduled for 2008.

2.9

KEY CONTACTS

Transport og Energi Ministeriet (Ministry of Transport and Energy) Address: Frederiksholms Kanal 27 F DK-1220 Copenhagen K Tel: +45 3392 3355 Fax: +45 3312 3893 E-mail: [email protected] Web site: www.trm.dk Energistyrelsen (The Danish Energy Authority) Address: Amaliegade 44 DK 1256 Copenhagen K Tel: +45 3392 6700 Fax: +45 3311 4743 E-mail: [email protected] Web site: www.ens.dk www.icongrouponline.com

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Oil and Gas Field Machinery

11

Energiindustrien (Danish Energy Industries Federation) Address: H.C. Andersens Boulevard 18 DK-1787 Copenhagen V Tel: +45 3377 3377 Fax: +45 3377 3300 E-mail: [email protected] Web site: www.ei.di.dk Dansk Energi (Association of Danish Energy Companies) Address: Rosenoerns Allé 9 DK-1970 Frederiksberg C Tel: +45 3530 0400 Fax: +45 3530 0401 E-mail: [email protected] Web site: www.danskenergi.dk Energinet.dk Address: Fjordvejen 1-11 DK-7000 Fredericia Tel: +45 7010 2244 Fax: +45 7624 5180 E-mail: [email protected] Web site: www.energinet.dk

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12

3 3.1

FINANCIAL INDICATORS: OIL AND GAS FIELD MACHINERY AND EQUIPMENT OVERVIEW

Is Denmark 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: oil and gas field machinery and equipment. We are essentially interested in the degree to which firms operating in Denmark 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 Denmark, 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 Denmark, 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 Denmark 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 Denmark 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 Denmark? 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 Denmark. Again, we are particularly interested in oil and gas field machinery and equipment, 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 Denmark differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Denmark and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in oil and gas field machinery and equipment 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 Denmark compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Denmark at the global level for oil and gas field machinery and equipment. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Denmark 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 oil and gas field machinery and equipment in Denmark. 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

13

Financial Returns and Gaps in Denmark

The approach used in this report to evaluate operating performance for oil and gas field machinery and equipment in Denmark 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. 42-43), 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 Denmark) for a particular sector (in this case oil and gas field machinery and equipment). 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

•

Datastream (Thomson Financial) - www.datastream.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

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Financial Indicators •

14

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: 3533 which is defined as “oil and gas field machinery and equipment”. 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 Denmark, for those that report financials (balance sheet and income statements) and that are involved in oil and gas field machinery and equipment. It should be noted that the public-domain 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 oil and gas field machinery and equipment (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 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

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Financial Indicators

15

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 Denmark 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 Austria, and Norway. 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 Denmark whose primary activity is oil and gas field machinery and equipment. 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 Denmark. 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 Denmark 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 oil and gas field machinery and equipment. 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

16

Labor Productivity Gaps in Denmark

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 Denmark has vis-à-vis the worldwide average (for oil and gas field machinery and equipment). 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 Denmark 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

17

FINANCIAL RETURNS IN DENMARK: ASSET STRUCTURE RATIOS Overview

In this chapter we consider the asset structure of companies involved in oil and gas field machinery and equipment operating in Denmark 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 Denmark and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Denmark 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 -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.

•

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.

•

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

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Financial Indicators

18

•

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.

•

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.

•

Prepaid Expenses. Prepaid expenses are typically defined as those supplies and/or services (not inventory) acquired or purchased but not consumed or used at the end of the accounting period.

•

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 & Equipment Under Capitalized Leases. Property plant & equipment under capitalized leases 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 (under capitalized leases).

•

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.

•

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.

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Financial Indicators

19

•

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

20

Asset Structure: Outlook

Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in oil and gas field machinery and equipment in Denmark. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Denmark based on latest financial results available. Asset Structure Denmark 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 Prepaid Expenses 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 Buildings Machinery & Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Tangible Other Assets Intangible Other Assets Total Assets

5.03 4.57 0.49 28.75 31.72 12.83 10.72 10.84 1.15 1.12 3.02 69.08 0.19 0.12 2.85 23.31 43.32 19.08 14.01 11.86 0.53 21.05 5.84 8.06 7.22 5.41 0.47 4.97 100.00

9.00 6.65 4.67 28.55 17.79 4.76 5.79 7.09 0.79 0.74 0.99 56.47 1.17 1.64 6.53 24.97 42.67 11.49 22.16 6.61 3.49 21.48 4.02 14.56 4.16 5.54 0.36 4.31 100.00

11.41 5.50 5.35 27.15 16.97 5.25 3.51 5.61 0.54 1.33 1.23 57.46 0.66 1.56 4.78 25.30 51.05 8.80 31.90 5.20 2.11 27.21 3.05 19.93 2.34 4.21 0.61 2.24 100.00

_________________________________________________________________________________________________________

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

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Financial Indicators

3.2.4

21

Large Variances: Assets

The following graphics summarize for oil and gas field machinery and equipment the large asset structure gaps between firms operating in Denmark 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 & Short Term Investments 15 10 5

9

11.41

5.03

0 -5 -10

-6.38 Denmark

Europe

World Average

Gap

Gap: Total Inventories 40

31.72

30 17.79

20

16.97

14.75

10 0

Denmark

Europe

World Average

Gap

Gap: Raw Materials 15

12.83

10

7.58 4.76

5 0

Denmark

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Europe

5.25

World Average

Gap

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Financial Indicators

22

Gap: Work in Process 12

10.72

10 7.21

8

5.79

6

3.51

4 2 0

Denmark

Europe

World Average

Gap

Gap: Current Assets - Total 80

69.08 56.47

60

57.46

40 11.62

20 0

Denmark

Europe

World Average

Gap

Gap: Property Plant and Equipment - Gross 60 50 40 30 20 10 0 -10

51.05

43.32

42.67

Denmark

Europe

World Average

-7.73 Gap

Gap: Buildings 20

19.08

15

11.49 8.8

10

10.28

5 0

Denmark

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

23

Gap: Machinery & Equipment 40

31.9

30 20

22.16 14.01

10 0 -10 -20

Denmark

Europe

-17.89 Gap

World Average

Gap: Other Property Plant & Equipment 12

11.86

10 8

6.66

6.61 5.2

6 4 2 0

Denmark

Europe

World Average

Gap

Gap: Accumulated Depreciation - Total 27.21

30 21.05

21.48

20 10 0 -10

-6.16 Denmark

Europe

World Average

Gap

Gap: Accumulated Depreciation -Machinery & Equipment 19.93

20 10

14.56 8.06

0 -10 -20

-11.87 Denmark

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.2.5

24

Key Percentiles and Rankings

We now consider the distribution of asset ratios for oil and gas field machinery and equipment using ranks and percentiles. What percent of countries have a value lower or higher than Denmark (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

Denmark

Rank of Total

Percentile

5.03 4.57 0.49 28.75 31.72 12.83 10.72 10.84 1.15 1.12 3.02 69.08 0.19 0.12 2.85 23.31 43.32 19.08 14.01 11.86 0.53 21.05 5.84 8.06 7.22 5.41 0.47 4.97 100.00

41 of 53 28 of 46 36 of 42 22 of 53 4 of 53 7 of 46 5 of 46 6 of 46 11 of 44 15 of 32 7 of 47 11 of 53 28 of 40 42 of 43 15 of 39 33 of 53 33 of 49 4 of 44 38 of 46 6 of 45 18 of 21 27 of 49 10 of 39 39 of 43 7 of 42 24 of 53 19 of 35 18 of 43

22.64 39.13 14.29 58.49 92.45 84.78 89.13 86.96 75.00 53.13 85.11 79.25 30.00 2.33 61.54 37.74 32.65 90.91 17.39 86.67 14.29 44.90 74.36 9.30 83.33 54.72 45.71 58.14

_________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Prepaid Expenses 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 Buildings Machinery & Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets 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

25

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

26

Cash & Short Term Investments (Oil and Gas Field Machinery and Equipment) 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

27

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

28

Receivables (Net) (Oil and Gas Field Machinery and Equipment) 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

29

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

30

Total Inventories (Oil and Gas Field Machinery and Equipment) 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

31

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

32

Current Assets - Total (Oil and Gas Field Machinery and Equipment) 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

33

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

34

Property Plant and Equipment - Net (Oil and Gas Field Machinery and Equipment) 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

35

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

36

Accumulated Depreciation - Total (Oil and Gas Field Machinery and Equipment) 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

37

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

38

Intangible Other Assets (Oil and Gas Field Machinery and Equipment) 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

39

FINANCIAL RETURNS IN DENMARK: LIABILITY STRUCTURE RATIOS Overview

In this chapter we consider the liability structure of firms operating in Denmark 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 Denmark and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in oil and gas field machinery and equipment in Denmark. For ratios where there are large deviations between Denmark 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.

•

Capitalized Lease Obligations. A capitalized lease obligation is commonly defined as an ownership arrangement in which the item under lease is typically a long-term asset. Capital leases are generally recorded as assets with liability at the current value of the lease payment.

•

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.

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Financial Indicators

40

•

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.

•

Deferred Income. Deferred income is commonly defined as the amount for services rendered that has not yet been received.

•

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

•

Dividends Payable. Dividends payable typically include the declared dividend dollar amount that a company is obligated to pay. The dividend payment eliminates dividends payable and reduces cash.

•

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.

•

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

©2007 Icon Group International, Inc.

Financial Indicators

3.3.3

41

Liability Structure: Outlook

Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in oil and gas field machinery and equipment in Denmark. 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 Denmark based on latest financial results available. Liability Structure Denmark Europe World Avg. _________________________________________________________________________________________________________

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

13.18 14.41 7.06 0.52 1.13 13.16 41.02 13.29 12.88 0.51 3.54 0.13 2.52 1.31 60.17 0.02 39.82 12.45 6.46 20.40 12.51 -0.90 100.00

12.07 12.07 2.96 1.81 1.20 12.86 36.78 9.95 9.81 0.14 4.50 0.20 0.24 0.94 50.49 0.91 41.30 12.32 13.95 7.07 9.93 -0.38 100.00

12.85 10.39 0.93 1.08 1.38 11.64 36.82 6.27 6.20 0.07 1.50 0.08 0.48 0.63 45.11 1.39 46.61 12.23 12.32 4.64 7.24 -0.05 100.00

_________________________________________________________________________________________________________

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

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.3.4

42

Large Variances: Liabilities

The following graphics summarize for oil and gas field machinery and equipment the large liability structure gaps between firms operating in Denmark 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 15

14.41 12.07 10.39

10 4.02

5 0

Denmark

Europe

World Average

Gap

Gap: Accrued Payroll 8

7.06 6.13

6 4

2.96

2 0

0.93 Denmark

Europe

World Average

Gap

Gap: Current Liabilities - Total 50

41.02

40

36.78

36.82

30 20 10 0

4.2 Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

43

Gap: Long Term Debt 15

13.29 9.95

10

6.27

7.02

5 0

Denmark

Europe

World Average

Gap

Gap: Long Term Debt Excluding Capitalized Leases 15

12.88 9.81

10

6.2

6.68

5 0

Denmark

Europe

World Average

Gap

Gap: Deferred Taxes 3

2.52

2.5

2.04

2 1.5 1 0.24

0.5 0

Denmark

Europe

0.48

World Average

Gap

Gap: Total Liabilities 80 60

60.17 50.49

45.11

40 15.06

20 0

Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

44

Gap: Common Equity 50 40

39.82

41.3

Denmark

Europe

46.61

30 20 10 0 -10

-6.79 World Average

Gap

Gap: Capital Surplus 13.95

15 10

12.32

6.46

5 0 -5 -10

-5.86 Denmark

Europe

World Average

Gap

Gap: Other Appropriated Reserves 25

20.4

20

15.76

15 10

7.07

5 0

Denmark

Europe

4.64

World Average

Gap

Gap: Retained Earnings 15

12.51 9.93

10

7.24 5.27

5 0

Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.3.5

45

Key Percentiles and Rankings

We now consider the distribution of liability ratios for oil and gas field machinery and equipment using ranks and percentiles. What percent of countries have a value lower or higher than Denmark (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

Denmark

Rank of Total

Percentile

13.18 14.41 7.06 0.52 1.13 13.16 41.02 13.29 12.88 0.51 3.54 0.13 2.52 1.31 60.17 0.02 39.82 12.45 6.46 20.40 12.51 -0.90 100.00

22 of 50 14 of 53 1 of 26 39 of 43 16 of 27 21 of 53 16 of 53 15 of 48 15 of 48 8 of 30 16 of 39 13 of 21 1 of 39 12 of 43 11 of 53 41 of 41 36 of 53 22 of 46 32 of 41 4 of 49 26 of 48 30 of 34

56.00 73.58 96.15 9.30 40.74 60.38 69.81 68.75 68.75 73.33 58.97 38.10 97.44 72.09 79.25 0.00 32.08 52.17 21.95 91.84 45.83 11.76

_________________________________________________________________________________________________________

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

_________________________________________________________________________________________________________

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

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

46

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

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

47

Accounts Payable (Oil and Gas Field Machinery and Equipment) 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

48

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

49

Current Liabilities - Total (Oil and Gas Field Machinery and Equipment) 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

50

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

51

Long Term Debt (Oil and Gas Field Machinery and Equipment) 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

52

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

©2007 Icon Group International, Inc.

Financial Indicators

53

Total Liabilities (Oil and Gas Field Machinery and Equipment) 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

54

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

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55

Common Equity (Oil and Gas Field Machinery and Equipment) 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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56

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 (Oil and Gas Field Machinery and Equipment) 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

58

FINANCIAL RETURNS IN DENMARK: INCOME STRUCTURE RATIOS Overview

In this chapter we consider the income structure of companies operating in Denmark 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 oil and gas field machinery and equipment operating in Denmark and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Denmark 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.

•

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 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

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59

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.

•

Equity in Earnings. Equity in earnings is defined as a company's proportional share (based on ownership) of the net earnings or losses of an unconsolidated company.

•

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.

•

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

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60

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

61

Income Structure: Outlook

Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in oil and gas field machinery and equipment in Denmark. 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 Denmark based on latest financial results available. Income Structure Denmark 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 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 Deferred Domestic Income Tax Minority Interest Equity in Earnings Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

100.00 85.34 4.00 10.84 10.21 96.36 0.12 2.78 0.54 0.51 0.00 0.40 3.16 1.76 1.39 0.79 0.46 0.33 0.00 0.01 0.56 0.56 0.56

100.00 70.09 4.68 18.16 13.76 88.65 2.71 5.46 0.63 2.85 0.03 0.83 8.40 4.33 4.14 1.59 1.39 -0.03 0.20 0.01 2.61 2.62 2.61

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

_________________________________________________________________________________________________________

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

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©2007 Icon Group International, Inc.

Financial Indicators

3.4.4

62

Large Variances: Income

The following graphics summarize for oil and gas field machinery and equipment the large income structure gaps between firms operating in Denmark 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) 100

85.34 70.09

80

69.36

60 40 15.98

20 0

Denmark

Europe

World Average

Gap

Gap: Gross Income 18.16

20 15

16.64

10.84

10 5 0 -5 -10

-5.8 Denmark

Europe

World Average

Gap

Gap: Other Operating Expenses 100

96.36

88.65

80

78.12

60 40

18.24

20 0

Denmark

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Europe

World Average

Gap

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63

Gap: Operating Income 8

5.46

6 4

6.55

2.78

2 0 -2 -4

Denmark

Europe

-3.77 Gap

World Average

Gap: Non-Operating Interest Income 2.85

3

1.97

2 1

0.51

0 -1 -2

-1.46 Denmark

Europe

World Average

Gap

Gap: Earnings Before Interest and Taxes (EBIT) 8.4

10 5

9.61

3.16

0 -5 -10

-6.45 Denmark

Europe

World Average

Gap

Gap: Interest Expense on Debt 6

4.33

4 2

3.64

1.76

0 -2

Denmark

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Europe

World Average

-1.88 Gap

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64

Gap: Pretax Income 6

6 4 2

4.14 1.39

0 -2 -4 -6

-4.61 Denmark

Europe

World Average

Gap

Gap: Net Income Before Extra Items/Prefer Dividends 6

4.29

4 2

2.61 0.56

0 -2 -4

Denmark

Europe

-3.73 Gap

World Average

Gap: Net Income Before Preferred Dividends 6

4.43

4 2

2.62 0.56

0 -2 -4

Denmark

Europe

-3.87 Gap

World Average

Gap: Net Income Available to Common 6

4.29

4 2

2.61 0.56

0 -2 -4

Denmark

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Europe

World Average

-3.73 Gap

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Financial Indicators

3.4.5

65

Key Percentiles and Rankings

We now consider the distribution of income ratios for oil and gas field machinery and equipment using ranks and percentiles. What percent of countries have a value lower or higher than Denmark (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

Denmark

Rank of Total

Percentile

100.00 85.34 4.00 10.84 10.21 96.36 0.12 2.78 0.54 0.51 0.00 0.40 3.16 1.76 1.39 0.79 0.46 0.33 0.00 0.01 0.56 0.56 0.56

6 of 52 34 of 53 44 of 52 31 of 46 7 of 46 34 of 40 43 of 53 21 of 29 32 of 41 21 of 27 35 of 53 44 of 53 20 of 53 44 of 53 38 of 47 32 of 35 3 of 30 33 of 40 12 of 22 45 of 53 45 of 53 45 of 53

88.46 35.85 15.38 32.61 84.78 15.00 18.87 27.59 21.95 22.22 33.96 16.98 62.26 16.98 19.15 8.57 90.00 17.50 45.45 15.09 15.09 15.09

_________________________________________________________________________________________________________

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 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 Deferred Domestic Income Tax Minority Interest Equity in Earnings Net Income Before Extra Items/Prefer Dividends 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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67

Cost of Goods Sold (Excluding Depreciation) (Oil and Gas Field Machinery and Equipment) 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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68

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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Selling, General & Administrative Expenses (Oil and Gas Field Machinery and Equipment) 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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70

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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71

Operating Expenses - Total (Oil and Gas Field Machinery and Equipment) 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

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

73

Operating Income (Oil and Gas Field Machinery and Equipment) 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

74

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

75

Earnings Before Interest and Taxes (EBIT) (Oil and Gas Field Machinery and Equipment) 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

76

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

77

Pretax Income (Oil and Gas Field Machinery and Equipment) 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

78

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

79

Income Taxes (Oil and Gas Field Machinery and Equipment) 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

80

FINANCIAL RETURNS IN DENMARK: PROFITABILITY RATIOS Overview

In this chapter we consider additional financial ratios estimated for firms involved in oil and gas field machinery and equipment operating in Denmark benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Denmark compared to average global benchmarks. For ratios where there are large deviations between the average firm in Denmark 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

81

•

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

82

Ratio Structure: Outlook

Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in oil and gas field machinery and equipment in Denmark. All figures are current-year projections for companies operating in Denmark based on latest financial results available. Ratios Denmark 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

0.97 -1.81 2.47 4.15 18.56 4.55 85.34 10.84 9.65 1.96 2.78 8.47 1.39 24.67 0.56 1.23

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

3.50 3.31 12.15 4.62 4.08 47.16

5.77 7.78 23.69 6.00 8.77 46.43

5.42 0.95 13.04 4.74 7.07 43.04

40.55 24.55 75.40 6.83 5.88 67.24 36.90

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

1.01 2.07 46.27 82.99 114.02

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

83

Large Variances: Ratios

The following graphics summarize for oil and gas field machinery and equipment the large ratio structure gaps between firms operating in Denmark 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: Return on Equity - Total (%) 15 8.41

10 5

11.23

0.97

0 -5 -10 -15

-10.26 Denmark

Europe

World Average

Gap

Gap: Reinvestment Rate - Total (%) 6

4.31

4 2

1.81 0.54

0 -2 -4

-2.5 Denmark

Europe

World Average

Gap

Gap: Return on Invested Capital (%) 15 8.99

10 5

11.23

4.15

0 -5 -10

-7.08 Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

84

Gap: Cost Goods Sold / Sales (%) 100

85.34 70.09

80

69.36

60 40 15.98

20 0

Denmark

Europe

World Average

Gap

Gap: Total Debt % Total Capital 50

40.55

40

31.57

30

23.33 17.22

20 10 0

Denmark

Europe

World Average

Gap

Gap: Long Term Debt % Total Capital 25

24.55 17.99

20 15

13.3

11.25

10 5 0

Denmark

Europe

World Average

Gap

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

61.22

6.83

Denmark

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16.5

Europe

World Average

-54.39 Gap

©2007 Icon Group International, Inc.

Financial Indicators

85

Gap: Dividend Payout (% Earnings) - Total Dividends 30

22.31

27.6

20 10

5.88

0 -10 -20 -30

-21.72 Denmark

Europe

World Average

Gap

Gap: Inventories % Total Current Assets 50

46.27

40

29.19

30

27.67 18.6

20 10 0

Denmark

Europe

World Average

Gap

Gap: Accounts Receivables Days 150 100

108.3

110.57

82.99

50 0 -27.58 -50

Denmark

Europe

World Average

Gap

Gap: Inventories (# of Days) Held 120

114.02 99.11

100

80.22

80 60 40

14.91

20 0

Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.5.5

86

Key Percentiles and Rankings

We now consider the distribution of financial ratios for oil and gas field machinery and equipment using ranks and percentiles. What percent of countries have a value lower or higher than Denmark (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

Denmark

Rank of Total

Percentile

0.97 -1.81 2.47 4.15 18.56 4.55 85.34 10.84 9.65 1.96 2.78 8.47 1.39 24.67 0.56 1.23

48 of 53 46 of 53 45 of 53 44 of 53 26 of 53 45 of 53 6 of 52 44 of 52 31 of 46 17 of 30 43 of 53 33 of 53 44 of 53 34 of 47 45 of 53 15 of 53

9.43 13.21 15.09 16.98 50.94 15.09 88.46 15.38 32.61 43.33 18.87 37.74 16.98 27.66 15.09 71.70

3.50 3.31 12.15 4.62 4.08 47.16

48 of 53 42 of 53 21 of 49 27 of 53 33 of 53 29 of 49

9.43 20.75 57.14 49.06 37.74 40.82

40.55 24.55 75.40 6.83 5.88 67.24 36.90

7 of 53 12 of 48 32 of 53 32 of 53 44 of 46 23 of 53 31 of 53

86.79 75.00 39.62 39.62 4.35 56.60 41.51

1.01 2.07 46.27 82.99 114.02

38 of 53 16 of 53 6 of 53 28 of 53 7 of 53

28.30 69.81 88.68 47.17 86.79

_________________________________________________________________________________________________________

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

87

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

88

Gross Profit Margin (%) (Oil and Gas Field Machinery and Equipment) 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

89

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

90

Pretax Margin (%) (Oil and Gas Field Machinery and Equipment) 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

91

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

92

Quick Ratio (Oil and Gas Field Machinery and Equipment) 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

93

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

94

Current Ratio (Oil and Gas Field Machinery and Equipment) 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

95

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

96

Inventories % Total Current Assets (Oil and Gas Field Machinery and Equipment) 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 Guernsey Jersey 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

97

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

98

Accounts Receivables Days (Oil and Gas Field Machinery and Equipment) 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

99

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

100

Inventories (# of Days) Held (Oil and Gas Field Machinery and Equipment) 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

101

PRODUCTIVITY IN DENMARK: ASSET-LABOR RATIOS Overview

In this chapter, we consider numerous asset-labor ratios for oil and gas field machinery and equipment in Denmark benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Denmark and the average global benchmarks for oil and gas field machinery and equipment. For ratios where there are large deviations between Denmark 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 oil and gas field machinery and equipment that Denmark has visà-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

102

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 oil and gas field machinery and equipment in Denmark based on latest financial results available. Labor-asset Ratios ($k/employee) Denmark 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 Prepaid Expenses 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 Buildings Machinery & Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Tangible Other Assets Intangible Other Assets Total Assets

8.08 7.54 0.72 49.54 53.05 18.85 29.10 13.99 -0.62 2.38 4.36 116.22 0.51 0.24 5.31 34.02 65.85 27.35 23.12 17.99 0.44 31.23 8.20 12.47 10.58 9.62 0.88 8.82 164.08

19.81 15.66 10.70 80.12 37.20 9.64 13.45 17.85 2.00 1.60 2.58 140.04 2.40 4.27 55.91 45.86 99.44 26.90 60.84 13.15 3.96 45.30 7.93 27.12 6.96 11.38 0.91 8.54 244.38

21.26 10.74 10.51 46.74 23.18 6.13 5.45 9.24 0.71 2.15 1.74 93.95 1.10 3.90 26.34 31.94 58.92 13.01 34.23 7.05 1.36 27.74 3.77 15.72 2.50 6.15 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

103

Asset to Labor: International Gaps

The following graphics summarize for oil and gas field machinery and equipment the large labor-asset gaps between firms operating in Denmark 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 & Short Term Investments ($k/employee) 30

19.81

20 10

21.26

8.08

0 -10 -20

-13.18 Denmark

Europe

World Average

Gap

Gap: Short Term Investments ($k/employee) 15

10.7

10.51

10 5

0.72

0 -5 -10

Denmark

Europe

-9.79 Gap

World Average

Gap: Total Inventories ($k/employee) 60

53.05

50

37.2

40

29.87

30

23.18

20 10 0

Denmark

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

104

Gap: Raw Materials ($k/employee) 20

18.85

15

12.72 9.64

10

6.13

5 0

Denmark

Europe

World Average

Gap

Gap: Work in Process ($k/employee) 30

29.1 23.65

25 20 13.45

15 10

5.45

5 0

Denmark

Europe

World Average

Gap

Gap: Current Assets - Total ($k/employee) 140.04

150 116.22

93.95

100 50 0

22.27

Denmark

Europe

World Average

Gap

Gap: Other Investments ($k/employee) 55.91

60 40 20

26.34 5.31

0 -20 -40

-21.03 Denmark

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

105

Gap: Buildings ($k/employee) 30

27.35

26.9

25 20 13.01

15

14.34

10 5 0

Denmark

Europe

World Average

Gap

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

60.84

60 40

34.23 23.12

20 0 -20

-11.11 Denmark

Europe

World Average

Gap

Gap: Other Property Plant & Equipment ($k/employee) 20

17.99 13.15

15 10

10.94 7.05

5 0

Denmark

Europe

World Average

Gap

Gap: Accumulated Depreciation - Other Prop & Equip ($k/employee) 12

10.58

10

8.08

6.96

8 6 4

2.5

2 0

Denmark

www.icongrouponline.com

Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.6.4

106

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 Denmark (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)

Denmark

Rank of Total

Percentile

8.08 7.54 0.72 49.54 53.05 18.85 29.10 13.99 -0.62 2.38 4.36 116.22 0.51 0.24 5.31 34.02 65.85 27.35 23.12 17.99 0.44 31.23 8.20 12.47 10.58 9.62 0.88 8.82 164.08

35 of 53 26 of 46 35 of 42 21 of 53 10 of 53 4 of 46 2 of 46 15 of 46 42 of 44 8 of 32 14 of 47 19 of 53 23 of 40 39 of 43 11 of 39 24 of 53 27 of 49 14 of 44 33 of 46 8 of 45 17 of 21 25 of 49 12 of 39 31 of 43 4 of 42 26 of 53 15 of 35 16 of 43 21 of 53

33.96 43.48 16.67 60.38 81.13 91.30 95.65 67.39 4.55 75.00 70.21 64.15 42.50 9.30 71.79 54.72 44.90 68.18 28.26 82.22 19.05 48.98 69.23 27.91 90.48 50.94 57.14 62.79 60.38

_________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Prepaid Expenses 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 Buildings Machinery & Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Other Prop & Equip Other Assets 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

107

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

108

Cash & Short Term Investments (Oil and Gas Field Machinery and Equipment) 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

109

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

110

Receivables (Net) (Oil and Gas Field Machinery and Equipment) 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

111

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

112

Total Inventories (Oil and Gas Field Machinery and Equipment) 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

113

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

114

Current Assets - Total (Oil and Gas Field Machinery and Equipment) 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

115

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

116

Property Plant and Equipment - Net (Oil and Gas Field Machinery and Equipment) 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

117

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

118

Accumulated Depreciation - Total (Oil and Gas Field Machinery and Equipment) 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

119

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

120

Intangible Other Assets (Oil and Gas Field Machinery and Equipment) 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

121

PRODUCTIVITY IN DENMARK: LIABILITY-LABOR RATIOS Overview

In this chapter we consider the liability-labor ratios of companies operating in Denmark benchmarked against global averages for oil and gas field machinery and equipment. For ratios where there are large deviations between Denmark 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 liability-labor ratios are highlighted for oil and gas field machinery and equipment 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 oil and gas field machinery and equipment that Denmark has visà-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

122

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 oil and gas field machinery and equipment in Denmark based on latest financial results available. Labor-liability Ratios ($k/employee) Denmark Europe World Avg. _________________________________________________________________________________________________________

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

25.93 25.69 5.80 1.10 1.55 21.15 72.19 16.90 16.24 0.83 8.87 0.51 4.12 1.73 100.53 0.07 63.47 16.63 22.49 30.16 19.79 -1.70 164.08

27.47 35.70 4.02 5.26 7.61 30.01 97.10 27.04 26.83 0.21 9.18 0.62 0.42 1.59 131.49 1.80 108.59 61.21 35.60 10.89 16.85 -0.57 244.38

17.12 22.43 1.06 1.96 3.72 19.46 63.27 12.60 12.51 0.09 2.91 0.17 0.15 0.97 78.99 3.67 79.02 32.29 21.27 5.85 9.29 -0.06 162.19

_________________________________________________________________________________________________________

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

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.7.3

123

Liability and Equity to Labor: International Gaps

The following graphics summarize for oil and gas field machinery and equipment the large labor-liability gaps between firms operating in Denmark 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 ($k/employee) 30

25.93

27.47

25 17.12

20 15

8.81

10 5 0

Denmark

Europe

World Average

Gap

Gap: Accrued Payroll ($k/employee) 6

5.8 4.74

5

4.02

4 3 2

1.06

1 0

Denmark

Europe

World Average

Gap

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

100 80

72.19

63.27

60 40 20 0

8.92 Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

124

Gap: Long Term Debt ($k/employee) 27.04

30 25 20

16.9 12.6

15 10

4.3

5 0

Denmark

Europe

World Average

Gap

Gap: Provision For Risks and Charges ($k/employee) 10

8.87

9.18

8

5.96

6 4

2.91

2 0

Denmark

Europe

World Average

Gap

Gap: Deferred Taxes ($k/employee) 5

4.12

3.97

4 3 2 1 0

0.42 Denmark

Europe

0.15 World Average

Gap

Gap: Total Liabilities ($k/employee) 150 100

131.49 100.53 78.99

50 0

21.54 Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

125

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

108.59 79.02

63.47

50 0 -50

-15.55 Denmark

Europe

World Average

Gap

Gap: Common Stock ($k/employee) 80

61.21

60 32.29

40 20

16.63

0 -20

-15.66 Denmark

Europe

World Average

Gap

Gap: Other Appropriated Reserves ($k/employee) 40 30.16 30

24.31

20 10.89 5.85

10 0

Denmark

Europe

World Average

Gap

Gap: Retained Earnings ($k/employee) 20

19.79 16.85

15 9.29

10

10.5

5 0

Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.7.4

126

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 Denmark (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)

Denmark

Rank of Total

Percentile

25.93 25.69 5.80 1.10 1.55 21.15 72.19 16.90 16.24 0.83 8.87 0.51 4.12 1.73 100.53 0.07 63.47 16.63 22.49 30.16 19.79 -1.70 164.08

13 of 50 13 of 53 6 of 26 34 of 43 15 of 27 25 of 53 15 of 53 24 of 48 24 of 48 5 of 30 13 of 39 7 of 21 1 of 39 14 of 43 15 of 53 38 of 41 29 of 53 19 of 46 20 of 41 4 of 49 22 of 48 31 of 34 21 of 53

74.00 75.47 76.92 20.93 44.44 52.83 71.70 50.00 50.00 83.33 66.67 66.67 97.44 67.44 71.70 7.32 45.28 58.70 51.22 91.84 54.17 8.82 60.38

_________________________________________________________________________________________________________

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

_________________________________________________________________________________________________________

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

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

127

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

128

Accounts Payable (Oil and Gas Field Machinery and Equipment) 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

129

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

130

Current Liabilities - Total (Oil and Gas Field Machinery and Equipment) 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

131

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

132

Long Term Debt (Oil and Gas Field Machinery and Equipment) 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

133

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

134

Total Liabilities (Oil and Gas Field Machinery and Equipment) 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

135

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

136

Common Equity (Oil and Gas Field Machinery and Equipment) 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

137

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

138

Retained Earnings (Oil and Gas Field Machinery and Equipment) 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

139

PRODUCTIVITY IN DENMARK: INCOME-LABOR RATIOS Overview

In this chapter we consider the income-labor ratios for oil and gas field machinery and equipment in Denmark benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Denmark 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 oil and gas field machinery and equipment that Denmark 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

140

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 oil and gas field machinery and equipment in Denmark based on latest financial results available. Labor-income Ratios ($k/employee) Denmark 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 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 Deferred Domestic Income Tax Minority Interest Equity in Earnings Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

189.26 166.87 7.20 22.39 20.61 189.03 0.16 6.24 1.10 0.81 0.00 0.54 6.55 3.19 3.35 1.70 1.45 0.54 0.01 0.05 1.71 1.71 1.71

198.08 151.12 8.63 39.60 27.93 203.23 4.60 13.28 1.23 11.66 0.07 1.20 23.43 16.42 7.04 3.00 2.98 -0.10 0.38 0.01 4.00 4.02 3.99

128.08 93.24 5.06 25.62 15.38 106.07 1.37 9.69 0.64 5.54 -0.20 1.13 15.79 9.49 6.36 1.98 1.74 -0.10 0.74 0.23 3.98 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

141

Income to Labor: Gaps

The following graphics summarize for oil and gas field machinery and equipment the large labor-income gaps between firms operating in Denmark 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

189.26

198.08

150

128.08

100

61.18

50 0

Denmark

Europe

World Average

Gap

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

166.87

151.12

150 93.24

100

73.63

50 0

Denmark

Europe

World Average

Gap

Gap: Gross Income ($k/employee) 39.6

40 30

25.62

22.39

20 10 0 -10

-3.23 Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

142

Gap: Selling, General & Administrative Expenses ($k/employee) 27.93

30 25

20.61

20

15.38

15 10

5.23

5 0

Denmark

Europe

World Average

Gap

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

189.03

203.23

150

106.07

82.96

100 50 0

Denmark

Europe

World Average

Gap

Gap: Operating Income ($k/employee) 13.28

15 10

9.69 6.24

5 0 -5

-3.45 Denmark

Europe

World Average

Gap

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

11.66

10 5.54 5

0.81

0 -5

Denmark

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Europe

World Average

-4.73 Gap

©2007 Icon Group International, Inc.

Financial Indicators

143

Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 30

23.43 15.79

20 10

6.55

0 -10

Denmark

Europe

-9.24 Gap

World Average

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

16.42

15

9.49

10 5

3.19

0 -5 -10

-6.3 Denmark

Europe

World Average

Gap

Gap: Pretax Income ($k/employee) 7.04

8

6.36

6 4

3.35

2 0 -2 -4

-3.01 Denmark

Europe

World Average

Gap

Gap: Net Income Before Preferred Dividends ($k/employee) 6

4.02

4 2

4.14

1.71

0 -2 -4

-2.43 Denmark

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Europe

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.8.4

144

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 Denmark (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)

Denmark

Rank of Total

Percentile

189.26 166.87 7.20 22.39 20.61 189.03 0.16 6.24 1.10 0.81 0.00 0.54 6.55 3.19 3.35 1.70 1.45 0.54 0.01 0.05 1.71 1.71 1.71

19 of 53 16 of 52 22 of 53 34 of 52 24 of 46 17 of 46 31 of 40 37 of 53 17 of 29 26 of 41 21 of 27 30 of 53 40 of 53 16 of 53 37 of 53 32 of 47 23 of 35 3 of 30 33 of 40 9 of 22 38 of 53 41 of 53 38 of 53

64.15 69.23 58.49 34.62 47.83 63.04 22.50 30.19 41.38 36.59 22.22 43.40 24.53 69.81 30.19 31.91 34.29 90.00 17.50 59.09 28.30 22.64 28.30

_________________________________________________________________________________________________________

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 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 Deferred Domestic Income Tax Minority Interest Equity in Earnings Net Income Before Extra Items/Prefer Dividends 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

145

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

146

Cost of Goods Sold (Excluding Depreciation) (Oil and Gas Field Machinery and Equipment) 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

147

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

148

Selling, General & Administrative Expenses (Oil and Gas Field Machinery and Equipment) 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

149

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

150

Operating Expenses - Total (Oil and Gas Field Machinery and Equipment) 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

151

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

152

Operating Income (Oil and Gas Field Machinery and Equipment) 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

153

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

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Earnings Before Interest and Taxes (EBIT) (Oil and Gas Field Machinery and Equipment) 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 (Oil and Gas Field Machinery and Equipment) 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 (Oil and Gas Field Machinery and Equipment) 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 DENMARK EXECUTIVE SUMMARY

Denmark is a constitutional monarchy which shares a southern border with Germany and which is connected by bridge to southern Sweden. Its total area of 43,093 square kilometers is slightly larger than that of Massachusetts and New Hampshire combined. The country offers a home market of 5.38 million people. Its modern infrastructure and distribution system, a highly skilled labor force and its central location make it an excellent distribution point for the Scandinavian, Northern Europe and Baltic markets, which, together, amount to over 50 million people. Denmark’s standard of living is among the highest in the world. Denmark is a member of the EU. Its economy is heavily export oriented and is, therefore, a firm advocate of liberal trade and investment policies. It actively encourages foreign investment. There are 350 American subsidiaries established in Denmark. Foreign investors in Denmark face very few ownership restrictions. Denmark has a well-established system of commercial law. Expropriation is almost entirely limited to public construction purposes for which compensation is paid. Denmark has no restrictions on capital transfers and no foreign exchange restrictions. Worker productivity is high, on a pace with other E.U. countries, and corporate taxation is among the lowest in the EU. Danish wages are high, but employer contributions to social welfare are very low, which results in lower total labor costs than in most northern E.U. member countries. Intellectual property rights are well protected. The United States is Denmark’s largest trading partner outside the European Union (EU) and has a share of 5.2% of total Danish trade in goods. Political and commercial relations with the United States are excellent. Denmark buys the following from the United States: industrial machinery and capital equipment, including computers and telecom products, software, aircraft, and scientific instruments. Other important U.S. exports to Denmark are military equipment, chemicals and pharmaceuticals, tobacco, wine, fresh vegetables, nuts, and forest products. American owned firms in Denmark are prominent in information technology (IT) and telecommunications products and services, and in offshore oil and gas exploration and production.

4.2

ECONOMIC FUNDAMENTALS AND DYNAMICS

Despite the general economic success and the strong underlying economy, a number of problems have not been fully resolved, e.g. a large number of government “transfer income” recipients, an excessively large public sector, and a continuing large government debt. Nearly 20% of the working age population lives on some type of public transfer income. Although this number is falling, it remains a chronic problem for the Danish economy and burdens the main pillars of Denmark’s standard-of-living model; free public education, health care from cradle to grave, subsidized daycare for children, and eldercare. Two-thirds of Danish trade is within the EU.

4.2.1

Government Intervention Risks

The public sector, with its 845,000 employees (31% of the labor force), plays a crucial role in the Danish economy. The Danish income distribution model is based upon the public sector providing essentially all basic services: health, social security, welfare and education. Created in the booming 1960s with full employment and far fewer women participating in the work force, the income distribution model’s validity and high cost are important issues on the

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political agenda. It remains politically difficult to introduce any major changes. Some vital government services are now suffering under the high cost of financing transfer income payments and servicing the large public debt, which together consume nearly 40% of total public revenues or 21% of GDP. Public hospitals are not up to the highest international standards and waiting lists for non-emergency treatment remain long. This has led to the increased use of private hospitals by wealthier Danes and Danes holding private health insurance.

4.2.2

Infrastructure Development

Physical Infrastructure Denmark has a long-standing tradition trade, transport and distribution, which combined with governmental investments and private business initiatives, have developed the Danish transport, distribution and logistics system into one of the most efficient in Europe. The strengths behind Denmark’s top-ranked infrastructure in regard to central distribution are: •

Two international airports

•

Ten international ports with free port and trade zone facilities

•

Extensive road and rail network

•

International forwarders and integrators with bonded warehouse facilities and

•

Multi-modal distribution solutions.

Virtual Infrastructure Denmark’s “virtual” infrastructure is also quite advanced with a government dedicated to making Denmark “The world’s most advanced IT nation.” the goal set by the Prime Minister is that Denmark should have the most modern and “future-proof” infrastructure, which would offer inexpensive broadband access to as many users as possible. Most Danish companies are fully computerized. A recent survey by the Green’s Institute shows that 98% of all Danish companies have access to the Internet. In addition, more than 60% of the population has access to the Internet. The present telecommunication infrastructure consists of copper, co-axial, optical fiber and also various radio based techniques through which PSTN, ISDN, xDSL, ADSL, and GSM services are offered. Cable TV companies are also beginning to offer broadband services via their cables. Denmark’s infrastructure is based on the infrastructure of the original national telephone companies which later became TDC (Tele Danmark, controlled by U.S.-based SBC Communications). Since the liberalization of the market, new cable and systems have been added to the present TDC infrastructure.

4.3 4.3.1

POLITICAL RISKS Economic Relationship with the United States

Bilateral relations are excellent. NATO, the cornerstone of the American national security relationship with Western Europe, is popular in Denmark, perhaps more so than in any other country in Europe. An overwhelming number of Danes favor Danish membership in NATO, and the Danes are also adamant that progress toward European integration should not come at the expense of transatlantic ties.

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161

Politics and the Business Environment

While political issues rarely affect the Danish business climate, the business sector believes that the high income taxes and the series of environmental taxes imposed on business, can jeopardize Danish competitiveness and incentives to work.

4.3.3

The Political System

Denmark is a constitutional monarchy and is among the world’s most politically stable democracies. The Constitution dates from 1849, when the King renounced absolutism. The latest and most comprehensive amendments to the Constitution date from 1953. The monarch nominally rules through the Prime Minister and his Cabinet. The Prime Minister is accountable to the Folketing, Denmark’s unicameral parliament. The monarch “chooses” the Prime Minister based on recommendations from the leaders of the political parties. The monarch can, on rare occasions, grant pardons; judicial power rests solely with the courts. Denmark has a history of minority coalition governments. The Parliament is elected for a four-year term and has 179 members. Greenland and the Faeroe Islands, home rule territories of the Danish realm, have two Members of Parliament each among the total 179 members. Parliamentary elections are often held before the full four-year terms are up, either because the Government is toppled in a vote of no-confidence or because the Prime Minister calls an election to improve the ruling coalition’s parliamentary position. Voter participation in general and municipal elections frequently exceeds 80%. The Prime Minister works through cabinet ministers and their ministries. Cabinet ministers need not be members of Parliament. Ministers have no political Deputy Ministers or Secretaries of State as in other parliamentary democracies. Rather, they have a Permanent Under Secretary (in some instances more than one), who is the highestranking civil servant within the ministry. There are very few political appointees among the civil servants, who remain largely unaffected by changes of government.

Major Political Parties Four Danish political parties have a parliamentary history of 80 years or longer. Political parties play a much greater role in Danish politics than they do in the United States. Parliamentary seats are allocated following elections based on proportional representation. Members of Parliament strongly represent their political party’s policies and are supported by their constituents based on the party platform. Members of Parliament do not have staffs provided by the state (nor, for that matter, do parliamentary committees), only secretarial assistance. As a result, Danish parliamentarians must rely on their parties for support and technical expertise on legislative issues. Party discipline, as a consequence, is very tight. Social Democrats 2 Thorvaldsensvej DK-1780 Copenhagen V Tel: 45/31-391522 Fax: 45/31-394030 E-mail: [email protected] www.socialdemokratiet.dk Liberals 30 Sollerodvej DK-2840 Holte Tel: 45/45-802233

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Fax: 45/45-803830 E-mail: [email protected] www.venstre.dk Conservatives Press Service Christiansborg DK-1240 Copenhagen K Tel: 45/33-374388 or 45/33-120266 Fax: 45/33-931431 E-mail: [email protected] www.konservative.dk Socialist People’s Party Christiansborg DK-1240 Copenhagen K Tel: 45/33-374491 Fax: 45/33-147010 E-mail: [email protected] www.sf.dk Danish People’s Party Christiansborg DK-1240 Copenhagen K Tel: 45/33-375199 Fax: 45/33-375191 E-mail: [email protected] www.danskfolkeparti.dk Social Liberals Christiansborg DK-1240 Copenhagen K Tel: 45/33-374747 Fax: 45/33-137251 E-mail: [email protected] www.radikale.dk Unity List - Red-Green Alliance 24 Studiestraede DK-1455 Copenhagen K Tel: 45/33-933324 or 45/33-375050 Fax: 45/33-320372 E-mail: [email protected] www.enhedslisten.dk Christian People’s Party Christiansborg DK-1240 Copenhagen K Tel: 45/33-374999 Fax: 45/33-374998 E-mail: [email protected] www.krf.dk

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4.4 4.4.1

163

MARKETING STRATEGIES Distribution and Sales Channels

Methods of distribution in Denmark vary with the type of product. Capital goods, commodities and industrial raw materials are most often handled by non-stocking sales agents. Specialized and high-technology products are frequently sold through fully-owned subsidiaries of which there are about 350. These represent a substantial portion of U.S. corporate sales of products and services in Denmark. Consumer goods are usually sold through importing agents and distributors, but are increasingly being imported directly by major retail and department stores. The nonfood retail trade is increasingly being dominated by chain stores. The Danish food retail sector is dominated by two large retail chains (FDB and Dansk Supermarked) which account for over 50% of the total food retail market. These have substantial in-house wholesale and import divisions. There are about 30 significant independent food product importers in Denmark.

4.4.2

Agents and Distributors

Today’s modern communications media have eliminated numerous barriers, but many Danish companies still prefer to deal with an established local agent or distributor, rather than buying directly from abroad. In many cases, this is based on a preference for, or even a requirement to have, a responsible, legal entity in Denmark supplying the product. The Danish agent/distributor community has developed over centuries and is today a select and competitive group of businesses. Many sectors are dominated by a few powerful and quite conservative companies, which have spent decades establishing lasting relationships with their clients. There is now some slow movement toward direct purchasing, especially from European suppliers. This trend is especially evident in the food business, where the larger retail chains maintain in-house import divisions. At the same time, there is an increasing trend for foreign companies to establish branch offices in Denmark. In some cases, the competitive environment may even necessitate such a step. Where a U.S. company does not wish to establish its own sales office in Denmark, it is advisable to seek a local agent or distributor.

4.4.3

Franchising

Although franchising is not as widespread as in the United States, it is a well-known form of business, and more Danes are becoming interested in investing in franchising businesses. However, the bulk of franchise-operated businesses are still of Danish or Scandinavian origin. American franchising companies also operate in Denmark. The longest established are McDonalds and KFC. Franchising is also common outside the fast food trade. Shoerepair services, convenience stores, car rental, health clubs, and indoor tanning salons are examples. There is no specific franchising legislation in Denmark. Franchising is subject to legal framework governing all business enterprises. U.S. companies are therefore strongly advised to consult a Danish attorney and the Danish Franchising Association before entering into any form of franchising agreement with a local company or individual. The Danish Franchising Association was established in 1984 and is a member of the International Franchising Association headquartered in the United States.

4.4.4

Direct Marketing

Danes are conservative consumers and, because of the small size of the country, used to easy and fast access to retail outlets. Door-to-door sales are generally considered an intrusion on privacy and are, with a few exceptions, www.icongrouponline.com

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prohibited by law. Other forms of direct marketing prevail: telephone marketing is permitted, but its success rate with the conservative Danish consumer has been disappointing. The direct marketing type which has most piqued consumer curiosity are combination mail-order catalogs and TV-Shop sales. Direct marketing, including Internet sales, still plays an insignificant role in relation to total retail sales.

4.4.5

Joint Ventures and Licensing Options

Licensing and joint venture arrangements are common in Denmark. Danish firms are fully familiar with both licensing foreign products for manufacture and sale in Denmark and licensing their own products for sale abroad. There is no requirement to register licensing agreements with Danish authorities, and there are no Danish government restrictions on remittance of royalties or fees. Joint ventures may be established as corporations, general partnerships, or in any other legal format. Danish law does not discriminate against joint ventures with foreign participation. The central Government of Denmark, through the Ministry of Trade and Industry, actively encourages foreign companies to manufacture high-technology products in Denmark. In addition, several Danish local government authorities and non-profit organizations have established offices and programs to attract foreign investment and joint ventures.

4.4.6

Creating a Sales Office

Setting up a branch office in Denmark requires a relatively simple registration procedure with the Danish Trade and Companies Agency. The filing requirement is for general information on the U.S. parent company and the activities of its Danish branch. This includes place of business, accounting periods, memorandum and articles, and the power of attorney granted to the branch manager. For tax purposes, branches of foreign companies are treated as incorporated companies. As in many other countries, numerous rules and regulations apply to establishing a Danish corporation. Danish business legislation does not discriminate against foreign subsidiaries or foreign-owned companies. Foreign companies need only meet the requirements applicable to national companies. As in the United States, it is advisable to secure the services of an attorney and a CPA when establishing a business. There are an estimated 350 subsidiaries of American companies in Denmark.

4.4.7

Selling Strategies

The factors that determine where importers place their orders are almost entirely commercial, although cultural and historical or social ties with a long-standing trade partner may play a role. General competitive factors such as price, quality, promptness of delivery and availability of service determine the success of a supplier in Denmark. Patience and commitment count. Danes do not change suppliers easily, and many commercial relationships have been maintained over decades. Export companies seeking only a fast return have very little chance of success in Denmark. Most exporters introducing a “new” product in Denmark should expect fierce competition from domestic, third country, and often U.S. companies already well established in the market. In many cases, local distributors or agents will either decline taking on the representation of a new product line, or alternatively, request a substantial financial contribution towards market entry costs. Consequently, the best, or sometimes even the only way for a new-tomarket company to enter the Danish market can be through establishing its own sales office.

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165

Advertising and Trade Promotion

Introducing a new product or company into the Danish market is often a costly affair. U.S. and foreign parent companies are expected by their Danish agents to cover, in full or in part, advertising and promotion expenses. Several, large, American and international advertising agencies maintain offices in Denmark. Companies in Denmark spend about USD1.0 billion, annually, on advertising. Television is the largest medium. The code of conduct for advertising in Denmark is, in some areas, more conservative and consumer protection oriented than that of the United States. In other areas it is even more liberal. For example, nudity, per se, is not considered obscene, and it is seen in some Danish advertising. On the other hand, TV commercials for tobacco and medicine are not allowed. Commercials appealing directly to children are subject to legislative restrictions. The rules and regulations for advertising and marketing are determined in the “Markedsforingsloven” (the Act on Marketing). In July 2000, Denmark introduced ‘opt-in’ requirements for unsolicited commercial electronic mailings. The Consumer Ombudsman oversees compliance with the Act on Marketing. He may take action on his own initiative or based on complaints by third parties. However, he will not be consulted for prior approval or rulings on planned campaigns. Examples of typical cases for Consumer Ombudsman action are those involving misleading statements and unfounded claims of a product’s qualities. Generally, the types of advertising media that exist in the United States also exist in Denmark. Television commercials, however, are more restricted. Under Danish rules, they cannot interrupt a program and may be shown only in assigned blocks between programs. Only one of the two national stations, TV-2, carries commercials. The other, Danmarks Radio, is a public service station and does not carry commercials although it does allow certain restricted types of program sponsorship. A recent de-regulation provides for networking of local TV stations. A number of such local stations have merged into “TV-Danmark”, which carries commercials under the same regulations as TV-2. One, Danish-language TV station (TV3), broadcasting via satellite from the U.K. and receivable only via microwave dish or cable, reaches almost as many viewers as the three Danish nationwide stations. Because it broadcasts from the U.K. and has foreign ownership, it operates outside Danish rules and places commercials within programs. Another popular form of audio-visual advertising is the showing of commercials in movie theaters prior to the main feature film. Printed media advertising is widely used. Advertising on the Internet is increasing.

Major Newspapers Berlingske Tidende Pilestraede 34 DK-1147 Copenhagen K Tel: 45/33-757575 Fax: 45/33-752020 E-mail: [email protected] Web site: www.berlingske.dk (Contains separate business section) Circulation: 141,593/Weekdays, 167,515/Sundays Jyllandsposten Bladhuset i Viby Grondalsvej 3 DK-8260 Viby J Tel: 45/87-383838 Fax: 45/87-383199 E-mail: [email protected] Web site: www.jp.dk (Contains separate business section) Circulation: 177,080/Weekdays, 235,924/Sundays www.icongrouponline.com

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Politiken Raadhuspladsen 37 DK-1785 Copenhagen V Tel: 45/33-118511 Fax: 45/33-154117 E-mail: [email protected] Web site: www.politiken.dk Circulation: 136,470/Weekdays, 170,475/Sundays Borsen Montergade 19 DK-1140 Copenhagen K Tel: 45/33-320102 Fax: 45/33-911050 E-mail: [email protected] Web site: www.borsen.dk (The Danish “Wall Street Journal”) Circulation: 61,246/Weekdays only ErhvervsBladet Vesterbrogade 12 DK-1780 Copenhagen V Tel: 45/33-267200 Fax: 45/33-267272 E-mail: [email protected] Web site: www.erhvervsbladet.dk Circulation: 102,585/Weekdays only Berlingske Tidendes Nyhedsmagasin Pilestræde 34 Postbox 2128 DK-1015 København K Tel: 45/33-75 7400 E-mail: [email protected] Web site: www.bny.dk Circulation: 16,500/Weekly Computerworld Carl Jacobsensvej 25 DK-2500 Valby Tel: 45/73-00300 Fax: 45/77-300303 Web site: www.computerworld.dk Circulation: 23,966/Weekly Ingenioren Skelbaekgade 4 DK-1503 Copenhagen V Tel: 45/33-265300 Fax: 45/33-265301 Web site: www.ing.dk Circulation: 75,321/Weekly

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There are numerous advertising agencies in Denmark. For information, contact: Association of Danish Advertising Agencies (DRB, Danske Reklamebureauers Brancheforening) Reklamens Hus Badstuestraede 20 DK-1103 Copenhagen K Tel: 45/33-134444 Fax: 45/33-116303 E-mail: [email protected] Web site: www.drb.dk (The above Web site includes contact information and links for all members.)

4.4.9

Broadcasting

Broadcasting in Denmark is organized on three levels; national, regional and local coverage. National coverage consists of DR’s (Denmark’s Radio) radio and TV transmissions and TV2’s TV transmissions. DR and TV2 have certain public service responsibilities. Their programming must strive for quality, versatility and diversity and must aim for objectivity and impartiality in their dissemination of information to the public. Both stations are further obligated to program for and broadcast to the entire population, including the transmission of programs aimed at smaller target groups. Consequently, the executives and board of managers of the two stations are solely responsible for programming. DR and TV2 are each responsible for two television channels, one terrestrial and one satellite. DR has 4 radio channels. DR is financed almost exclusively by licence fees, while TV2 is financed by advertising revenue (approx. 70 %), license fee revenue, and other income. In addition to DR and TV2, a number of private tv- or radio companies also broadcast nationwide through satellite or cable TV. In June 2003, the Ministry of Culture held an auction for two new nationwide radio channels, called P5 and P6. The highest bidders were Sky Radio (Owned by News Corp. International) and Dutch-based Talpa Radio who paid a total of DKR 612 million (USD90 million) for the 8-year licenses. Regional coverage consists of eight TV2 companies along with DR’s nine regional radio stations. Local coverage consists of about 100 local TV stations and 250 local radio stations. The local TV and radio stations are private enterprises. Local stations are financed by membership and subscriptions and, to some extent, by municipal subsidies, sale of transmission time, and by similar means. Companies, associations and others intending to establish a local broadcasting company must first apply for a license from local boards organized at the municipal level. An average Dane watches at least 17 1/2 hours of television each week and listens to approximately 23 hours of radio. In a given week, almost 98% of the population listens to the radio and, of this figure, about 83% tune into Danmarks Radio (DR).

Market Shares (2001)

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Macro-Accessibility TV DR TV TV2 TV3 TV Denmark Other stations Total Radio DR Radio Private local radio Foreign radio Other stations Total

4.4.10

% 31 37 12 9 11 100

Financial situation 100% public 33% public and 66% commercial 100% commercial 100% commercial

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Ownership Danish State Danish State Viasat/Modern Times Group SBS Broadcasting SA

% 66 16 12 6 100

Pricing Issues

Exporters usually quote c.i.f. Copenhagen prices to Danish importers. The c.i.f. price includes all U.S. domestic freight costs, ocean/air freight and insurance but not Danish import duty or VAT. The rate of import duty typically ranges from 5-14% on industrial products. Additionally, the importer must pay a 25% Value Added Tax (VAT) calculated on the sum of the landed (c.i.f.) cost plus the duty. VAT is levied on a non-discriminatory basis to all products and most services sold in Denmark, whether imported or produced locally. There are also heavy surcharges/taxes on a number of “luxury” consumer items, such as cigarettes and tobacco, alcoholic beverages, energy, including oil and gasoline, and automobiles. Despite a 180% automobile levy, there are almost two million passenger cars on the Danish roads (roughly one for each household). The appropriate price for a product in the Danish market is often best determined through market research. In Denmark, a number of private companies also perform market research. The Commercial Service, Copenhagen can supply contact information on these companies. Supplying This requirement varies with the type of product. In general, Danish importers demand, and get from European competitors, a high degree of sales and after-sales service and customer support. The extent of the service and support requirement is directly proportional to the technical complexity of the product. Sound commercial judgment dictates after-sales service at least equal to that supplied by European competitors. An immediate response to customers’ questions and requests is essential, as is the use of modern communication methods. This means fax or email for routine communications and a readiness to employ overnight courier service when necessary.

4.4.11

Public Sector Marketing

Government procurement practices in Denmark are generally transparent. Denmark is a signatory to the WTO Government Procurement Code and also adheres to E.U. procurement regulations. U.S. firms are eligible to bid on an equal basis with Danish and other bidders for contracts valued over approximately USD200,000. Announcements of public tenders are published in the “Supplement to the Official Journal of the European Communities.” the text of the invitation to bid is in English, but the tender documents are normally in Danish. For major projects, documents

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may be available both in Danish and English. Bid notifications are available on the following Web site: www.europa.eu.int. Supplier qualifications are established on a contract-by-contract basis. While a local agent is not required in order for a U.S. firm to bid, it is usually wise to employ one to establish service capability equivalent to that available from resident firms. U.S. companies are also eligible to bid for major NATO military projects in Denmark and for major public works engineering and construction projects such as ocean bridges and tunnels.

4.4.12

Intellectual Property Risks

In general, Denmark offers adequate protection for intellectual property rights.

4.4.13

Hiring Local Counsel

The need for a local attorney typically arises in connection with establishing a corporation in Denmark, or in connection with trade disputes. Also, it is advisable to seek local legal assistance in matters involving complicated government concessions such as applications for oil or gas exploration.

4.5 4.5.1

IMPORT AND EXPORT REGULATION RISKS Trade Barrier Risks

Denmark has historically maintained a no-barrier policy and is often in the lead in the international combat against non-tariff barriers. Denmark has the best record of all E.U. countries regarding implementation of Single Market directives. Denmark applies no unilateral trade barriers against the U.S.A. Denmark is a member of the European Union, and the common external duty tariffs therefore apply to all products entering from non-E.U. countries, including the United States. Duties typically vary from 5.0% to 14% on industrial goods. Once goods have cleared customs in one E.U. country, they may circulate freely within the Union. A Value-Added-Tax (VAT) of 25% is applied on a non-discriminatory basis to all goods (and almost all services) sold in Denmark, whether imported or locally-produced. As a consequence of Denmark’s membership in the E.U., certain agricultural products imported from non-E.U. countries are governed by the Common Agricultural Policy (CAP). Duties on these items -- which include cereal grains, rice, milk and milk products, beef and veal, olive oil and sugar -- are supplemented with a system of variable levies or other charges. The purpose of these is to equalize prices of imported commodities with those produced within the E.U.

4.5.2

Valuations on Imports

Customs procedures, including the classification and valuation of imported goods entering Denmark, are governed by E.U. rules. For information on import duties and tariffs, U.S. exporters may contact the Danish Customs Office listed below: Central Customs and Tax Administration Customs Center Copenhagen www.icongrouponline.com

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Snorresgade 15 DK-2300 Copenhagen S Tel: 45/32-887300 Fax: 45/32-951874

4.5.3

Licenses Required for Imports

With very few exceptions (alcoholic beverages, weapons and arms, certain drugs and chemicals, and certain food products), Denmark requires no import licenses. There are no special import restrictions or license requirements which constitute problems for U.S. industrial product exporters.

4.5.4

Controls on Exports

Denmark’s export controls comply with E.U. regulations covering the four regimes: Nuclear Suppliers Group; Wassenaar (general products), Missile Technology Control Regime and the Australian Group (chemicals). In early 2001, Denmark implemented a new export control system for dual-use products modeled on the U.K. export control compliance code.

4.5.5

Documentation Required for Trade

The clearance of goods through customs and payment of duties in Denmark and other E.U. countries are the responsibility of the importer or his appointed customs broker. A commercial invoice from the U.S. exporter is always required for the importer or his agent to clear goods through customs. Additional documentation requirements exist for agricultural products, chemical substances and other selected goods. U.S. exporters are advised to follow the documentation requirements of their local importers. Once goods have been cleared and duty paid in one E.U. country, these goods may move freely within all E.U. member states.

4.5.6

Temporary Entry of Goods

Most foreign businesses needing to export temporarily into Denmark chose to do so by using an ATA Carnet. The United States Council for International Business (USCIB) is the National Guaranteeing Association for ATA and TECRO/AIT Carnets in the U.S. In Denmark the National Guaranteeing Association is the Danish Chamber of Commerce, Borsen, DK 1217 Copenhagen K, Denmark. Tel: 45/33-950500 or 45/33-950536 Fax: 45/33-325216, email: [email protected].

4.5.7

Labeling Issues

The marking and labeling requirements for products sold in Denmark are numerous and vary from product to product. The requirements may stem from either Danish or E.U. laws and regulations. For the exporter to comply, the assistance of the Danish importer is essential. As a general rule, consumer products must be labeled in Danish or in a language that differs from Danish only slightly in spelling. As a practical matter, this means Norwegian and in some instances, Swedish. Certain products must be marked clearly with the country of origin. In some cases, the importer may do the marking following arrival of the goods in Denmark. Weights and measures must be stated in the metric system. Labels and marking must accurately describe the contents of packages. The responsibility for www.icongrouponline.com

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compliance with Denmark’s marking and labeling regulations falls on the importer. Exporters, however, should carefully follow importer’s instructions. Failure to do so can cause customs delays and extra expenses which may harm future business. A substantial number of products must now be CE-marked prior to sale in Denmark and the rest of the E.U. CE marking (CE = Communite Europeen or European Community) is a statement by the manufacturer of a finished product, or his authorized representative in the E.U., that the product meets the essential requirements for that product as stipulated in all relevant E.U. directives. The purpose of the directives is to replace various national laws and requirements with harmonized European requirements, thus ensuring free movement of goods within the EU. There are currently 21 product directives, which require CE marking, but these directives cover a large number of sub-sectors and product ranges. Examples of these are: industrial machinery products, the electrical sector and medical products - these product directives have certain requirements stating which products are to be covered under their directive. Thus, each product directive will state, within its regulations, which products within that particular directive will require CE marking. Currently the following 21 product directives require CE marking by the manufacturer: 73/23/EEC 87/404/EEC 88/378/EEC 89/106/EEC 89/336/EEC 89/686/EEC 90/384/EEC 90/385/EEC 90/386/EEC 92/42/EEC 93/15/EEC 93/42/EEC 94/9/EC 94/25/EC 95/16/EC 96/57/EC 97/23/EC 98/37/EC 98/79/EC 1999/5/EC 2000/9/EC

Low voltage (electrical equipment for specific voltage measuring) Simple pressure vessels Children’s toys Building materials EMC (electro-magnetic compatibility) Personal protection equipment Non-automatic weight devices Active medical implants Gas Equipment New hot-water boilers - fluid/gaseous fuels Explosives for civilian use Medical equipment Materials suitable for explosive atmospheric environments Leisure boats Elevators Refrigerators & freezers for household use (energy efficient requirements) Pressure vessels / equipment Machines (formerly directive 89/392/EEC) In-vitro medical diagnostic equipment Radio and telecommunications equipment Aerial Ropeway for transport of persons

Labeling of Food Products Most foods are covered by the general regulation on labeling of foods, but certain foods are covered by specific regulations as well, e.g. fish products, chocolate, fruit juice, marmalade products and food supplements. Labeling of food additives (as such or in foods) is covered by a specific regulation on food additives.

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All foods sold in Denmark must be marked with a batch-identifying code (a lot-number or a date of production). This is true for “bulk packed” products as well as pre-packed products - and is the only requirement for “bulk packed” products. All other information may be handed over to the importer in document form. Normally, all pre-packed foods intended for the final consumer or catering establishments must be labeled according to the general rules prior to retail sale or catering service: •

Name and address

•

Product designation

•

Net weight

•

Durability

The labeling language must be Danish. Certain words from other languages, which are very similar to Danish in spelling, may be used. In practice though, most of the labeling will have to be in Danish. Products may not be sold with a standard U.S. label only. Stick-on labels can be used in addition to a U.S. label, or to cover certain text on the original label, which is not in conformity with Danish labeling requirements (e.g., nutritional information which does not appear in Danish). Food additives must be declared in the ingredients, listed by functional class, followed by specific name or Enumber, as defined in the food additives regulation and positive additive list. Flavors must be declared merely as “aroma,” and it is possible to state “natural, nature identical or artificial” in accordance with the definitions in the flavor regulation. Nutrients may be added after permission is granted from the authorities. The allowed usage is very limited. Added nutrients may not be claimed on the label, but may only be declared in the ingredients list and in nutritional information. Further details are described in the report: Food and Agricultural Import Regulations and Standards (FAIRS). The report, which is updated yearly, is available on the Internet: www.fas.usda.gov. The report includes sections on food laws, labeling requirements, food additive regulations, pesticide and other contaminants, copyright and trademark laws and import procedures.

4.5.8

Adherence to Free Trade Agreements

Denmark is a full member of the E.U. and the W.T.O.

4.6 4.6.1

INVESTMENT CLIMATE Conversion and Transfer Policies

Denmark has no restrictions on capital transfers. Denmark adheres to OECD and EU rules on the liberalization of capital movements, and has no foreign exchange restrictions, only reporting requirements. Foreign exchange is readily available. Profits may be freely repatriated.

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Expropriation and Compensation

Public expropriation of private property is almost entirely limited to public construction purposes, such as bridge and highway projects, and then only against compensation. There have been no cases of Danish or foreign companies being expropriated for other purposes since World War II.

4.6.3

Dispute Settlement

The Embassy has no knowledge or record of any disputes involving foreign (including U.S.) direct investors in Denmark. The Danish legal system belongs to the “Nordic family” which is based on continuity through centuries, in contrast with the Anglo Saxon Common Law. In fact, a few Danish laws from the 17th century, which have their roots dating back to the 13th century, are still in force. The Danish legal system includes written laws covering practically all commercial issues. Denmark has a written and consistently applied bankruptcy law (Consolidated Act No. 118 of February 4, 1997, as amended). Monetary judgments under the bankruptcy law are made in freely convertible Danish Kroner (DKK). Creditors’ claims against a bankruptcy are met in the following order: •

Costs and debt accrued during the treatment of the bankruptcy

•

Other costs, including the court tax, relating to attempts to find a solution other than bankruptcy

•

Wage claims and holiday pay

•

Excise taxes owed to the government

•

All other claims

Financing of real estate, both private and business, is for the most part done through the well-established Danish mortgage bond credit system, the security of which compares to that of government bonds. All mortgage credits in real estate are recorded in local public registers of mortgages. Except for interests in cars and commercial ships, which are also publicly recorded, other property interests are generally unrecorded. Denmark is a party to the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of other States and to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Subsequent Danish legislation makes international arbitration of investment disputes binding in Denmark. In addition, Denmark is a party to the 1961 European Convention in International Commercial Arbitration and to the 1962 agreement relating to the application of this convention.

4.6.4

Investment Incentives and Performance Requirements

Denmark adheres to the WTO TRIMS Agreement, and the Embassy has no record of any Danish non-compliance with that agreement. Monetary or other incentives to invest in Denmark are limited, which may be one of the reasons for the limited foreign “greenfield” investments in Denmark. On the other hand, the Danish Government imposes practically no restrictions on foreign investments which all receive national treatment. Performance requirements are applied only in connection with investment in hydrocarbon exploration, where concession terms normally require a fixed work program, including seismic surveys, and in some cases exploratory drillings, consistent with applicable EU directives. Performance incentives are mostly designed to protect the environment, mainly through reduced energy and water use. A large number of environmental and energy taxes are imposed and ultimately paid by households. Denmark was the first of the EU countries, in January 1993, to introduce a carbon dioxide (CO2) tax on business and industry www.icongrouponline.com

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covering a variety of energy use. However, companies with production dependent on large energy consumption, e.g., steel plants, glass and brick producers, and greenhouses, are reimbursed 75% of the tax. In addition, a SO2 tax is imposed on all fuels. Offsetting part of the CO2 tax on industry are a number of subsidy measures to promote renewable energy and natural gas use and other measures to reduce costs to business thereby safeguarding Danish competitiveness.

4.6.5

Right to Private Ownership and Establishment

As a general rule, any foreign or domestic private entity may freely establish, own, and dispose of a business enterprise in Denmark. The capital requirement for establishing a corporation (aktieselskab) is DKK500,000 (USD63,440) and for establishing a private limited liability company (anpartsselskab) DKK125,000. Registration fees are nominal. Capital can take the form of goods, equipment and/or cash on hand. There is a general requirement that managers and at least half of the Board of Directors must be Danish or E.U. residents. Denmark, like most other countries, has restrictions on establishing companies engaged in legal, accounting, auditing, and medical services. Danish (or EU or Nordic) professional certification and/or local Danish experience to practice in Denmark are required. Establishment of new large department stores outside city centers is on a nondiscriminatory economic needs test basis. Ownership restrictions are applied in a few sectors, including: •

Hydrocarbon exploration - 20% Government participation, but on a “non-carried interest” basis.

•

Arms production - Maximum 40% of equity and 20% of voting rights may be held by foreigners.

•

Aircraft - Unless a waiver is granted, non-EU physical and legal persons may not directly own or exercise control over aircraft registered in Denmark.

•

Ships registered in the Danish International Ships Register (DIS) - a Danish legal entity or physical person must own a significant share and exercise significant control (some 20-25%) over such ship. In addition, ships under bareboat charter to a Danish company may be registered in the DIS. EU physical and legal persons may register a ship in Denmark provided it is administered and controlled from Denmark.

4.6.6

Protection of Property Rights

Denmark is a party to, and enforces, a large number of international conventions and treaties concerning protection of intellectual property rights. Denmark and the EU are also parties to and have ratified the WTO TRIPS Agreement. Denmark appears to offer adequate protection of property rights.

Patents Denmark is a member of the World Intellectual Property Organization (WIPO). It adheres to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty (PCT) and the Strasbourg and Budapest conventions. Denmark has ratified the European Patent Convention and the EC Patent Convention.

Copyrights Denmark is a party to the 1886 Bern Convention and its subsequent revisions, the 1952 Universal Copyright Convention and its 1971 revision, the 1961 International Convention for the Protection of Performers, etc., and the 1971 Convention for the Producers of Phonograms, etc. Denmark has been active in improving protection for software and other forms of intellectual property and is in compliance with its obligations under TRIPS. www.icongrouponline.com

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Trademarks Denmark is a party to the 1957 Nice Arrangement and to this arrangement’s 1967 revision. A new Danish trademark act entered into force January 1, 1992 that also implements the EU trademark directive harmonizing EU member countries’ trademark legislation. Denmark, which formerly applied the “global exhaustion” principle on parallel imports, is now responding to a 1998 European Court ruling upholding “regional or community exhaustion.” Nevertheless, Denmark (and a few other EU countries) would like to see “global exhaustion” applied. Denmark strongly supports an EU-wide trademark system.

Trade Secrets Trade secrets appear adequately protected in Denmark.

Semiconductor Chip Layout Design Denmark has legislation implementing EU regulations for the protection of the topography of semiconductor products that also extends protection to legal U.S. persons.

4.7

TRANSPARENCY OF THE REGULATORY SYSTEM

As an industrialized country based on a free market economy, Danish economic policy and laws foster competition. The Danish Competition Law was revised in 1997 (Act No. 384, June 10, 1997) in order to reflect (in large part, anyway) the “prohibition” principle used in most other EU and OECD countries. Another revision in 2000 (Act No. 416 of May 31, 2000 amending the Competition Act) added merger control into the legislation. As Denmark would like to see increasing foreign direct investments, its laws and policies, which grant “national treatment” to foreign investment, support that goal. Denmark applies high standards with regard to environment, health and safety and labor. Bureaucratic procedures appear streamlined and transparent.

4.7.1

Capital Market Risks

Denmark has fully liberalized foreign exchange flows, including those for direct and portfolio investment purposes. Credit is allocated on market terms and is freely available (depending of course on collateral offered). A large variety of credit instruments are available, including, but are not limited to, commercial bank overdraft facilities for operational purposes, investment loans, export credits and financial loans in foreign currencies. There are 99 commercial banks and 86 small, local, savings and co-operative banks in Denmark. The assets of the two largest banks, Danske Bank and Unibank (now Nordea), amounted to USD212 billion. Those two banks also operate as large financial supermarkets, each offering a broad variety of financial services in Denmark and abroad. There are no representative offices or branches of U.S. banks in Denmark, but a number of U.S. financial entities operate in Denmark, cross-border, from or through offices/branches in Denmark of their European headquarters, including Citicorp, GE Capital, Ford Credit Europe, and GMAC. The Danish banking system is sound and under strict control by the Financial Supervisory Authority. Danish legal, regulatory, and accounting systems for the business sector are transparent and largely consistent with EU directives and regulations. Danish company law and regulations, except in relation to the sectors mentioned above, do not authorize companies to specifically limit or prohibit foreign investment. Also the Embassy has no record of any efforts, by the private

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sector or from the Government, to restrict foreign participation in standards setting consortia or organizations, or of practices used by private firms, to restrict foreign investment.

4.7.2

Political Violence

Political violence does not occur in Denmark.

4.7.3

Corruption

Corruption is not a big problem in Denmark. Corruption is covered under the Danish Penal Code (Ministry of Justice Consolidated Act. No. 648 of August 12, 1997) which was amended in March 2000 in order to implement the OECD Anti-Bribery Code (and the E.U.’s and the Council of Europe’s anti-bribery conventions) which makes bribery of a foreign official a criminal act. Penalties for violations range from fine to imprisonment of up to four years for a private individual(s) involvement and up to six years for a Danish public employee(s) involvement. In 1998, the Danish Ministry of Taxation repealed the right to deduct from taxes, bribes paid by business to officials abroad. The Transparency International, which is also represented in Denmark, shows Denmark as the country in the world with second to the least corruption. The Embassy has no record of commercial-type corruption cases in Denmark or of U.S. firms seeing corruption as an obstacle to investment in Denmark. The few corruption cases that have surfaced in recent years include mostly minor briberies of police officials.

4.7.4

Bilateral Investment Agreements

Denmark’s bilateral investment agreements are generally with countries where Danish investments involve participation of the government-funded investment funds (see below). Investment agreements have been entered with the following countries: Argentina (1995); Bolivia (2000); Bulgaria (1996); Czech Republic (1993/94); Chile (1996); China, People’s Republic of (1985); Egypt (2000); Estonia (1993); Ghana (2000); Hong Kong (1995); Hungary (1989); India (1997); Indonesia (1970); Korea, South (1988); Korea, North (1999); Latvia (1995); Lithuania (1994); Malaysia (1993); Mongolia (1997); Nicaragua (1998); Pakistan (1997); Peru (1997); Poland (1991); Romania (1996); Russia (1997); Slovak Republic (1993); Sri Lanka (1985); South Africa (1997/99); Tunisia (2000); Turkey (1993); Ukraine (1995); Venezuela (1997); Vietnam (1995); and Zimbabwe (1999). A new U.S.-Danish double taxation agreement was entered into force March 31, 2000.

4.7.5

OPIC and Other Investment Insurance Programs

OPIC programs are not applicable to U.S. investments in Denmark, but may be used by at least 95% U.S.-owned subsidiaries in Denmark to support their investments in qualifying countries. Investments in developing countries and in east and central European countries with a per capita GNP not exceeding USD5,225 and in emerging markets are promoted through the Danish government-funded Industrialization Fund for the Developing Countries (IFU), the Investment Fund for East and Central Europe (IO), and the Investment Fund for Emerging Markets (IFV), all under the same administration. The funds offer assistance in identifying projects, with feasibility studies, and with establishing joint ventures, which are also available to foreign-owned companies located in Denmark. In the project identification phase, the funds provide loans at preferential rates to finance feasibility studies which may be converted to a non-repayable grant if the project is established. In the active investment phase, the funds participate with share capital (up to 30% and with participation on the Board of Directors) and loans. The funds’ total

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engagement in a project will usually not exceed 25% of the total investment. Once a project is financially consolidated and running smoothly, the funds are withdrawn from it. Denmark is a member of the Multilateral Investment Guarantee Agency (MIGA).

4.7.6

Labor

The Danish labor force amounts to a little over 2.8 million persons. The participation rate for women in the workforce is among the highest in the world (about 80% for women aged between 16 and 60 years). The labor force is highly organized with more than two million trade union members accounting for about 80% of all wage and salary earners. Labor disputes and strikes occur sporadically in connection with new labor contract negotiations. As a general rule, labor/management relations are excellent, based on democratic management principles and thus on dialogue and/or consensus rather than confrontation. Labor market conditions and wages are set in a number of national labor contracts, which run between two and four years each and thus are out-of-step. Employers are concerned that the out-of-step contracts may cause a spiral effect in unions’ claims, with a negative impact for the economy, but so far this has not happened. The contractual workweek for most wage earners is 37 hours. Employees are entitled to at least five weeks of paid annual leave. Denmark has well functioning unemployment insurance and sick pay schemes. Danish wages are high by international standards, but employer contributions to social security are very low. Thus, total employee costs per hour worked are lower in Denmark than in Germany, Japan, Norway, and Switzerland. Indirect and/or variable employer costs, including overtime, sick pay, holiday and vacation pay, social contributions, and fringe benefits add some 30% to the basic cost. Denmark adheres to ILO conventions protecting worker rights. In a modern industrialized society like Denmark, with an expensive, highly skilled labor force, labor cost factors have impacted significantly on the country’s technological development. Most Danish firms, even the smallest ones, use state-ofthe-art computers and equipment.

4.7.7

Free Trade Zones and Free Ports

The only free port in Denmark is the Copenhagen Free Port, which is operated by the Port of Copenhagen. The facilities in the free port are mostly used for tax-free warehousing of goods imported, for exports, in transit trade and for distribution distributed. Tax and duties are not payable until cargo leaves the Free Port. Also, the processing of cargo, for example, and the preparation and finishing of imported automobiles for sale, can freely be set up in the Free Port. Manufacturing operations can be established with the permission of the customs authorities, which is granted if special reasons exist for having the facility in the Free Port area. The Copenhagen Free Port welcomes foreign companies establishing warehouse and storage facilities, whether for servicing Denmark only, Scandinavia, part or all of the E.U., East European and the Baltic countries, including Russia. The Port of Copenhagen and the Port of Malmo (Sweden) have merged their commercial operations, including the free port activities, in a joint company named CMP.

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Country Data Population (Jan. 1, 2003): Denmark Proper: Faeroe Islands: Greenland: Population Growth Rate: Religion: Government System: Language: Work Week:

5.38 million 47,946 (May/2003) 56,676 0.3% Membership National Church (Evangelical Lutheran): 84% Constitutional Monarchy Danish (most business people speak English) 37 hours, Monday through Friday

4.8

TRADE AND PROJECT FINANCING

4.8.1

Foreign Exchange Control Risks

There are no foreign exchange controls in Denmark.

4.8.2

General Financing Availability

The vast majority of small-to-medium-sized Danish firms are financed by commercial bank lines of credit. The credit line is typically extended on a continuous, revolving basis and is not subject to an annual settlement. Such credit lines are usually established to finance day-to-day operations, including inventory financing. Larger corporations may obtain capital through stock offerings on the Copenhagen Stock Exchange. In some cases, Danish companies also make use of U.S. stock exchanges. Institutional investors, such as pension funds, also play a major role in financing Danish companies, and such investments are usually carried out following individual negotiations. Financing is often a problem for small-to medium-sized companies with high growth, or growth potential. Frequently, such companies choose to or are forced to solve their financing problems by selling out to foreign, including U.S., corporations. During the last decade, the concept of venture capital has also caught on in Denmark and can now be described as an established method of financing. However, venture capital funding applies primarily to IT and bio-technology companies.

4.8.3

Financing Export Strategies

U.S. exports to Denmark are usually financed by the importer or the importer’s bank. Eximbank financing is available but rarely, if ever, used. The most common method of payment for an importer in the early phases of a business relationship is by Irrevocable Letter of Credit opened through a commercial bank. This is a recognized procedure, well-known and acceptable to Danish banks and importers. When a business relationship has reached a stage of mutual trust, payment credits are often extended by the exporter for periods varying from 30-90 days. In some cases, payment by credit card may prove to be the simplest and most effective means of payment. There are no local credit facilities available specifically to finance imports from the United States, or from any other country.

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Types of Available Export Financing

Most exports to Denmark are financed by Danish commercial banks. Exim-bank financing is available but rarely, if ever, used.

4.8.5

Financing Projects

The Danish Government arranges its own financing for infrastructure projects. Private projects are financed through a well-established local capital market. Multilateral institutions which make project finance available include the European Investment Bank and the Nordic Investment Bank.

4.8.6

Banks with Corresponding U.S. Banking Arrangements

All major Danish banks have correspondent bank relationships in the United States. Most of them have such relationships with more than one American bank. The two largest Danish banks have branches in New York as listed below: Danske Bank 299 Park Avenue, 14th floor New York, NY 10171 Phone (212) 984-8400 Fax (212) 984-9573 Nordea (formerly Unibank) Merita Bank Plc New York Branch 437 Madison Avenue New York, NY 10022 Phone (212) 318-9300 Fax (212) 318-9318

4.9 4.9.1

TRAVEL RISKS Local Business Practices

Danish businesspeople may appear somewhat formal at first, but are likely to quickly show a more informal side of themselves, just as the dress code sometimes may seem a little too relaxed to an American businessperson. However, they are likely to get down to business right away and are generally conservative and efficient in their approach to business meetings. Handshakes (with men and women) are the accepted form of greeting. Danes shake hands both for greetings upon arrival and departure from a meeting. Unlike in the United States, men do not stand when a woman enters or leaves a room. Virtually all Danish businesspeople have a good working knowledge of English, and interpreters are rarely required. Business gifts are not a normal custom in Denmark. Business entertaining is usually done at lunch, and more rarely at dinner in a restaurant. Even more rarely is a businessperson invited for dinner at the home of a business acquaintance in the early stages of their relationship.

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Business Appointments Advance appointments are always required, and punctuality is a must; it is considered rude to be late. Danes work shorter hours than Americans. The standard workweek is 37 hours. Mandatory vacation is five weeks plus up to five more days per year (a sixth week will be fully phased in all labor contracts by 2004), plus local holidays (see below). At least three weeks are taken during summer. School summer vacation is from about June 20th to about August 8th, and generally, business is slow in that period as many executives are out of the office. Some companies (and especially manufacturing plants) are even completely closed. It is not advisable to schedule business meetings or other business activities in Denmark from late June to early August, from December 20th - January 5th, or in the week of Easter. Danes treasure their leisure time, most of which is spent with their families. Businesspersons should not routinely expect to meet with their Danish counterparts after 4:00pm on weekdays. On Fridays, many Danes leave early, generally between 2-3:00pm. Do not plan meetings for Saturdays, Sundays, or on national holidays. Not all Danes appreciate breakfast meetings, which should be scheduled only with due consideration to the situation.

4.9.2

Travel Advisory and Visas

American business visitors and tourists do not need visas if staying in Denmark for less than three months as Denmark is part of the U.S.’ visa waiver program. The national carrier, Scandinavian Airlines System (SAS) provides non-stop service from Copenhagen to New York, Chicago, Washington D.C. and Seattle with United Airlines as a U.S. code-share partner. Major U.S. credit cards are accepted in Denmark (in hotels, restaurants and major department stores, but not in smaller stores), and all major U.S. car rental companies have offices at airports and major cities. A number of Danish hotels are affiliated with U.S. hotel management companies. Consequently, a U.S. business visitor may plan his entire trip to Denmark through his local travel agent, including overseas and local transportation and lodging. Denmark is known as one of the safest places in the world. It has been spared natural disasters and crime rates are low. Even so, Denmark still has its share of pick-pockets and other potential unpleasantries, so common sense and a certain caution are always good traveling companions. If an American visitor plans to stay in Denmark for a period of more than three months, or if they have already been resident in Denmark or one of the other Scandinavian countries for the last nine months, he or she must apply for both residence and work permits before arriving in Denmark. This rule applies to all non-E.U. citizens. In the United States, applications may be submitted to the Royal Danish Embassy or one of its diplomatic missions located in a few larger U.S. cities.

4.9.3

Infrastructure for Conducting Business

Denmark (not including Greenland and the Faeroe Islands) has a population of 5.3 million people and covers an area of 43,000 sq.km of which the Jutland peninsula accounts for 29,776 sq.km. Denmark is an island country, but this fact does not restrict the ease of traveling within the country. The infrastructure is excellent everywhere, and all major islands and the peninsula of Jutland are inter-connected by a network of tunnels and bridges. The capital of Denmark is Copenhagen (1.3 million), which is also the center of government and business. It is located on the island of Zealand only 15 miles from Southern Sweden. In July 2000, Copenhagen became connected to Sweden by a ten-mile bridge/tunnel fixed link. Denmark’s second largest city, Aarhus, is located on the Jutland peninsula, about three hour’s drive by car from Copenhagen. Business visitors can also move easily from one part of the country to another by train or domestic airlines. There are 70,000 km of fine roads in Denmark (including 1000 km of freeway) and a 3000 km railway network. There are twelve civilian airports, plus the Copenhagen International Airport (Kastrup), which is a major international airport and serves as the Scandinavian hub for SAS (Scandinavian Airline System), consolidating travelers to the U.S. from other Scandinavian countries. Kastrup Airport was voted the world’s second best airport in 2003 by the international airline organization IATA (Singapore was no. 1.) Copenhagen also has a modern seaport catering to freight vessels as well as ocean cruise www.icongrouponline.com

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liners. A new metro underground system was inaugurated in May 2003. Copenhagen has also become one of the most popular points of departure for cruise liners in Europe. The Port of Copenhagen includes a free port. Other major ports are at Esbjerg, Aalborg, Aarhus, and Fredericia. The port of Esbjerg is the center for off-shore oil and gas activities in Denmark. Telecommunication services are also highly developed. Its telephone systems provide first- class digital service, and several cellular system providers offer excellent European and worldwide mobile communications. Virtually all Danes have a good working knowledge of English, and most Danish businesspeople speak English as their second language. Many also speak German and some French. Interpreters are rarely required.

4.9.4

Housing

For expatriates working in Denmark, the rental of a house or an apartment is the most common arrangement. Housing costs are well above those in major American cities. Denmark has a high standard of living. Public and private health services are generally good. The price level for food and durable consumer goods is considerably higher than that of the United States and among the highest in Western Europe. Automobiles are more heavily taxed than in other European countries and cost about three times what they would in the United States. The Danish sales tax is 25% and is applied on most items including food. Americans will recognize many U.S. food and other consumer item brands in Danish stores.

4.10

KEY CONTACTS

Note: Telephone country code for all of Denmark is 45. There are no city codes as such. All phone and fax numbers are 8-digit numbers.

4.10.1

Danish Government Agencies

Ministry of Foreign Affairs Asiatisk Plads 2 DK-1448 Copenhagen K Tel: 45/33-920000 Fax: 45/31-540533 Web site: www.um.dk Ministry of Economic and Business Affairs Slotsholmsgade 12 DK-1216 Copenhagen K Tel: 45/33-923350 Fax: 45/33-123778 Web site: www.oem.dk Ministry of Food, Agriculture and Fisheries Veterinary and Food Directorate Moerkhoj Bygade 19 DK-2860 Soborg Tel: 45/33-956000 Fax: 45/33-956001 Web site: www.foedevaredirektoratet.dk

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Central Customs and Tax Administration Customs Center Copenhagen Snorresgade 15 DK-2300 Copenhagen S Tel: 45/32-887300 Fax: 45/32-951874 Miljostyrelsen (Danish Environmental Protection Agency) Strandgade 29 DK-1401 Copenhagen K Tel: 45/32-660100 Fax: 45/32-660479 Web site: Ww.mst.dk Patent- og Varemaerkestyrelsen (The Danish Patent Office) Helgeshoj Alle 81 DK-2630 Taastrup Tel: 45/43-508000 Fax: 45/43-508001 Web site: www.dkpto.dk Sundhedsstyrelsen (National Board of Health) Amaliegade 13 DK-1256 Copenhagen K Tel: 45/33-961601 Fax: 45/33-931636 Web site: www.sst.dk Laegemiddelstyrelsen (The Danish Medicines Agency) Frederikssundvej 378 DK-2700 Bronshoj Tel: 45/44-88-9111 FAX: 45/44-917373 Web site: www.laegemiddelstyrelsen.dk; www.dkma.dk Telestyrelsen (National Telecom Agency) Holsteinsgade 63 DK-2100 Copenhagen O Tel: 45/35-430333 FAX: 45/35-431434 Web site: www.tst.dk

4.10.2

Trade Associations and Chambers of Commerce

The American Chamber of Commerce in Denmark Christians Brygge 28 DK-1559 Copenhagen V Tel: 45/33-932932 Fax: 45/33-130517 Web site: www.amcham.dk

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The Danish Chamber of Commerce Borsen DK-1217 Copenhagen K Tel: 45/33-950500 Fax: 45/33-325216 Web site: www.commerce.dk Confederation of Danish Industries H.C. Andersens Boulevard 18 DK-1787 Copenhagen V Tel: 45/33-773377 Fax: 45/33-773300 Web site: www.di.dk The Agricultural Council Axeltorv 3 DK-1609 Copenhagen V Tel: 45/33-145672 Fax: 45/33-149574 Web site: www.landbrugsraadet.dk Danish Franchise Association Lyngbyvej 20 DK-2100 Copenhagen O Tel: 45/39-158282 Fax: 45/39-158010 Web site: www.dk-franchise.dk

4.10.3

Commercial Banks

Citibank International plc, Denmark Branch Dagmarhus H.C. Andersens Boulevard 12 DK-1553 Copenhagen V Tel: 45/33-638383 Fax: 45/33-338333 Web site: www.citigroup.com Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen K Tel: 45/39-440000 Fax: 45/39-185873 Web site: www.danskebank.com Nordea Bank A/S (former Unibank) Torvegade 2 DK-1786 Copenhagen V Tel: 45/33-333333 Fax: 45/33-331212 Web site: www.nordea.com www.icongrouponline.com

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Jyske Bank A/S Vestergade 8-16 DK-8600 Silkeborg Tel: 45/89-222222 Fax: 45/89-222496 Web site: www.jyskebank.dk

4.10.4

U.S. Embassy Contacts

Stephan Helgesen Senior Commercial Officer American Embassy Dag Hammarskjolds Alle 24 DK-2100 Copenhagen O Tel: 45/35-553144 Fax: 45/35-420175 (Resident in Denmark with responsibility for Denmark, Iceland and Norway) American Embassy Office of Agricultural Affairs (FAS) Dag Hammarskjolds Alle 24 DK-2100 Copenhagen O Denmark Tel: 45/35-553144 (Embassy switchboard) Tel: 45/35-261081 (FAS direct line) FAX: 45/35-430278 (FAS) Mailing address for mail from the U.S.A.: Agricultural Affairs (FAS) PSC 73 American Embassy APO AE 09716-5000

4.10.5

Contacts in Washington D.C.

TPCC Trade Information Center Washington DC Tel: 1-800-USA-TRADE Agricultural Export Services Div. Foreign Agricultural Service (FAS) U.S. Department of Agriculture 14th and Independence Ave, SW Washington DC 20250-1000 Tel: (202)720-7420 Fax: (202)690-4374 U.S. Department of Commerce Denmark Desk www.icongrouponline.com

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Room H-3043 14th and Constitution Ave., NW Washington, DC 20230 Tel: (202) 482-4414 Fax: (202) 482-2897

4.10.6

U.S.-Based Multipliers

Royal Danish Embassy in Washington 3200 Whitehaven Street, N.W. Washington, D.C, 20008-3683 Tel.: (202) 234-4300 Fax: (202) 328-1470 E-mail: [email protected] Web site: www.denmarkemb.org Royal Danish Consulate General in Los Angeles 10877 Wilshire Blvd., Ste. 1105 Los Angeles, CA 90024 Tel: (310) 443-2090 Fax: (310) 443-2099 E-mail: [email protected] Web site: www.danishconsulate.org Royal Danish Consulate General in Chicago Trade Commission of Denmark 211 East Ontario, Suite 1800 Chicago, Illinois 60611-3242 Tel: (312) 787-8780 Fax: (312) 787-8744 E-mail: [email protected] Web site: www.consulatedk.org Royal Danish Consulate General New York 825 Third Avenue New York, NY 10022-7519 Tel: (212) 223-4545 Fax: (212) 754-1904 Web site: www.denmark.org Danish American Chamber of Commerce 825 Third Avenue, 32nd Fl. New York, NY 10022 Tel: (212) 980-6240 Danish Mission to the UN One Dag Hammerskjold Plaza 885 Second Avenue, 18th Floor New York, NY 10017 Tel: (212) 308-7009 Fax: (212) 308-3384 www.icongrouponline.com

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Email: [email protected] Web site: www.un.int/denmark Danish-American Chamber of Commerce in New York One Dag Hammerskjold Plaza 885 Second Avenue, 18th Floor New York, NY 10017 Tel: (212) 980-6240 Email: [email protected] Web site: www.daccny.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. 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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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END

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