design and layout: mainostoimisto queens oy · mould castings. we expect mass production of 5g...

Design and layout: Mainostoimisto Queens OyPrint: Markprint OyPhoto of Board of Directors: Studio Skaala OyTranslation: Crockford Communications Oy

Review of Recycling and Foundry Operations .............................................................................. 4Report of the Board of Directors Kuusakoski Group .............................................................................................................................. 8 Recycling group .................................................................................................................................. 12 Foundry group ..................................................................................................................................... 16Proposal of the Board .............................................................................................................................. 20Corporate Responsibility ........................................................................................................................ 21Annual Highlights ....................................................................................................................................... 24Key Figures Consolidated Income Statement and Balance Sheet ...................................................... 30 Consolidated Statement of Changes in Financial Position ............................................ 31 Notes to the Consolidated Financial Statements............................................................... 31 Key Figures ............................................................................................................................................ 36 Parent Company Income Statement and Balance Sheet ............................................... 37Accounting Principles.............................................................................................................................. 38Auditor’s Report ......................................................................................................................................... 40Boards of Directors, Management and Auditor ............................................................................ 42Contact Information ................................................................................................................................. 44

A CHANGING WORLD DEMANDS CONTINUOUS DEVELOPMENT OF RECYCLING OPERATIONS

Review of Recycling Operations Kuusakoski Recycling

Mikko KuusilehtoCEO Kuusakoski Oy

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Recycling operations in 2018 were oversha-dowed by global political instability despite the positive outlook at the start of the year. The year was characterised by intensifying cyclical fluctuations and significant swings in global market prices. Signs of a stuttering global economy could be seen already in early spring, which in part impacted demand among our customers. The tighter import restrictions on recycled raw materials im-posed by China had a major impact on the business environment for the entire sector. This also created uncertainty in the recycling markets.

The result for the year was not satisfactory. Revenues of EUR 517.6 million and earnings (EBITDA) of 26.8 million euros were clearly below targets. Sweden and Finland conti-nued to be the main contributors, but overall the year left a lot to be desired.

Major investment projects introduced to develop our further processing capaci-ties progressed according to plan. These investments are expected to reduce the impact of market fluctuations on our ope-rations in the coming years. We will conti-

nue the implementation of our investment plans in 2019 in order to ensure Kuusa-koski’s capacity to process recycled raw materials with even higher quality, while at the same time responding to the needs of industry. We continued to work hard on occupatio-nal and fire safety in 2018. Our employees in Finland and Sweden were almost three times more active in terms of proactive action indicators compared to the previous year. Absences due to sick leave in both countries continued to decline (2.1% in Finland, 4.5% in Sweden) and were clear-ly below the industrial average for these countries. Kuusakoski aims to be a trend-setter in the industry also in terms of safety in the coming years.

The outlook for 2019 is ambivalent. On the one hand, the impact of geopolitical de-cisions on the global economic trend will create uncertainty. On the other hand, we see opportunities to develop our opera-tions through targeted investments and operational changes.

ELECTRIC VEHICLES AND 5G ARE ACCELERATING OUR INTERNATIONAL FOUNDRY OPERATIONS

Review of Foundry Operations | Alteams

Asko NevalaCEO Alteams Oy

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Alteams generated revenues of 96.3 million euros in 2018, which is 3% less than in the previous year. Profitability nevertheless imp-roved due to reduced quality costs and more cost-effective manufacturing. The foundry group’s operating result improved as a result and became positive.

The markets are awaiting for the introduc-tion of 5G networks, which combined with the tight competitive situation weakened sales within the communications network segment. Nevertheless, we received several new 5G-related projects and received our biggest number of orders to date for new mould castings. We expect mass production of 5G products to begin in 2019–2020, crea-ting growth opportunities especially for our plant in China.

Sales within the industrial applications seg-ment increased due especially to develop-ments in renewable energy and electric ve-hicles. We are introducing the automotive industry’s quality control standard at our plants in China and Poland. This will enable us to expand our customer base, for example as a supplier of components for electric ve-hicles.

The volumes and profitability of our plants in Finland improved significantly compared to the previous year. In addition, these plants have many new product projects in the start-up phase, which will support sales volumes in the coming years.

Deliveries from our plant in Poland to a major customer were discontinued in the first half of 2018, which generated unforeseen costs. In the last quarter of the year, the start-up of new product projects was reflected in in-creased sales. Nevertheless, the result fell short of our targets. A large number of new customer relationships and products will enable clear growth in the future.

In the second half of 2018, we launched an international employee development pro-gramme, the Alteams Academy. Twelve key employees from different countries were selected for the three-year programme. The objective of the training is to develop mul-tiskilled experts from different backgrounds and cultures, as well as to nurture commit-ment to Alteams.

Managing waste heat by developing new manufacturing techniques and materials continues to play an important role in our R&D activities. One of our most important projects aims to find new casting materials with very high heat conductivity. The results of this project are expected in 2019.

The outlook for 2019 is positive. The growing number of orders provides a good basis for developing our business operations also in the coming years.

SWEDEN

Kuusakoski Sverige AB has operated in the Kingdom of Sweden, population 10 million, since 1999. In Sweden, Kuusakoski recycles metals, precious metals, ve-hicles, waste electrical and electronic equipment, batteries, plastics, construc-tion waste and wood waste. The shredder plants in Skelleftehamn and Gävle recycle a total of 200,000 tonnes of materials each year. The Skelleftehamn plant is an important supplier of recycled copper to major local companies. Copper fractions from waste electrical and electronic equipment is supplied to Sweden by the entire Kuusakoski Group.

Kuusakoski’s northernmost location is in Kiruna, 145 kilometres north of the Arctic Circle.

99% of municipal waste in Sweden is recycled and reutilised in the produc-tion of heat, electricity and biofuels.

FINLANDThe Finnish family-owned company Kuusakoski Oy was founded in 1914. With a population of 5.5 million, Finland remains the most important operating area for the international recycling group. Kuusakoski’s own R&D centre in Finland produces valuable material data, supports idea and project work, and conducts research cooperation with companies, research institutes, authori-ties and other stakeholders. In Finland, Kuusakoski recycles metals, precious metals, vehicles, waste electrical and electronic equipment, tyres, batteries, plastics, and construction waste and wood waste. The head offices of Kuusa-koski and Alteams are also located in Finland.

The town of Heinola, population 19,000, is home to the biggest unit of the recycling group. The recycling plant began operations in 1972 and now processes around 220,000 tonnes of materials a year.

The aluminium smelter at the Heinola plant supplies materials to the automotive and electronics industries, for example, as well as to aluminium foundries.

In 2018, Kuusakoski’s laboratory analysed a record of over 550 samples, mostly from our own processes. The laboratory’s expertise was also utilised by Kuusakoski Group company Alteams and affiliated company Suomen Erityisjäte.

Kuusakoski22 sites, 452 employees

Alteams4 plants, 150 employees

Finland may be called the land ofa thousand lakes, but around 78% of the country is covered by forest.


Alteams1 plant, 4 employees

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The foundry operations of Alteams in Finland began in the 1940s. Today Alteams uses five different processes: high pressure die casting, low pres-sure die casting, gravity die casting, sand casting and shell mould casting.

Vehicles recycled by Kuusakoski, 2014-2018

2014 2015 2016 2017 2018

40 000

30 000

20 000

10 000

0

Lahti

Laihia

Loppi

Heinola

Espoo

Helsinki

Hyvinkää

Imatra

Joensuu

Jyväskylä

KajaaniKalajoki

Kotka

KuopioLapua

Oulu

Pori

Rauma

Tampere

TurkuVantaa

Ruovesi

Stockholm

Gällivare

Gävle

Kiruna

Luleå

Lycksele

Oxelösund

Skelleftehamn

Skellefteå

Sundsvall

Umeå

Vetlanda

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Skillingaryd

Kuusakoski Group comprises the recycling operations of

Kuusakoski Oy and its subsidiaries, the foundry operations of Alteams Oy

and its subsidiaries, and property companies, which are Jokirantakiinteistöt Oy

and Kiinteistö Oy Lahden Norokatu 5. The parent company of Kuusakoski Group

is Kuusakoski Group Oy, which is owned in its entirety by the Kuusakoski family.

Kuusakoski Oy and its subsidiaries form the recycling group and

Alteams Oy and its subsidiaries the foundry group.

KUUSAKOSKI GROUP

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Group’s operating environment and financial result

The operating environment of the recycling group, which is essential to the performance of the Group as a whole, varied in 2018. The market situation was stable in the first half of the year, but the general global economic and political uncertainty caused a sharp fall in the prices of commodities and basic me-tals in the middle of the year. The situation stabilised towards the end of the year.

Kuusakoski Group posted revenues in 2018 of EUR 610.8 million, which is 7% more than in 2017 (571.6 million in 2017, 494.4 million in 2016). The consolidated operating result was EUR 11.4 million (18.2 million in 2017, -4.1 million in 2016), which represents 2% of revenues (3% in 2017, -1% in 2016). The net result for the financial period after taxes was EUR 3.5 million (9.1 million in 2017, -10.8 million in 2016), which represents 0.6% of revenues (1.6% in 2017, -2.2% in 2016). The return on in-vestment (ROI) was 2.9% (3.7% in 2017, -1.0% in 2016).

Revenues from recycling operations ac-counted for approximately 84% of the Group’s revenues.

Financing and capital expenditure

Kuusakoski Group’s cash flow from operating activities before investments totalled EUR 37.6 million (39.8 million in 2017, 32.2 million in 2016) and after investments EUR 20.0 mil-lion (32.0 million in 2017, 27.5 million in 2016). The amount of working capital tied to Group activities decreased by approximately EUR 11 million compared to the previous year. The year under review saw a significant focus on investments by the recycling group.

The Group’s investments totalled EUR 17.5 million (7.8 million in 2017, 4.8 million in 2016), which represents 2.9% of revenues (1.4% in 2017, 1.0% in 2016). During the year un-der review, the recycling group introduced

an investment programme at the Heinola plant that represents a major commitment to the company’s future. With a total value of EUR 13-15 million, the investment pro-gramme aims to further develop recovery efficiency and processing, as well as reduce the amount of waste for final disposal. The investments will be made primarily in 2018-2019. Other group companies also invested in solutions supporting further processing. In-vestments within the foundry group focused on new production processes and machine-ry, as well as on basic repairs and moderni-sations of existing machinery and buildings.

The Group’s liquidity remained good. At the end of the year under review the Group had a total of EUR 55 million of unused revol-ving credit facilities issued by banks to co-ver long-term financing. In September 2018, Kuusakoski participated with seven other Finnish companies in a group bond issue. Short-term financing was managed prima-rily with commercial papers during the year under review.

The Group’s equity ratio at the end of the year under review was 42.8% (43.9% in 2017, 39.2% in 2016). The net gearing ratio was 30.8% at the end of the year (39.8% in 2017, 70.4% in 2016). The amount of net liabilities decreased during the year under review by approximately EUR 13 million.

The parent companies of the groups owned by Kuusakoski Group are responsible for their own financing in accordance with the finan-cing policy of Kuusakoski Group. The Finan-ce Department of Kuusakoski Oy monitors the implementation of the financing policy throughout the entire Group.

Personnel

The number of personnel employed by the Group decreased by five during the year un-der review. At the end of the year under re-view, the Group had 2,416 employees.

Number of personnel employed by Kuusakoski Group at the end of the year:

2018 2017 2016 In Finland 617 607 583Outside Finland 1,799 1,814 1,771 Total 2,416 2,421 2,354

The number of personnel increased by 4 in the recycling group and decreased by 11 in the foundry group.

The total sum of salaries, wages and rewards paid to personnel during the year under re-view in Kuusakoski Group was EUR 65.7 mil-lion (65.8 million in 2017, 67.4 million in 2016).

Risks and risk management

The purpose of the Group’s risk management is to identify any significant risk factors con-sidering the special characteristics of its bu-siness operations and business environment and to optimally manage them in such a way that the Group’s strategic and financial goals are achieved.

The main risks within the recycling business in the current market situation are risks con-nected to metal prices, changes in demand among customers, structural changes in the operating environment and fires.

The foundry business is relatively dependent on a few big customers. The development of new manufacturing technologies and mate-rials is actively monitored.

The Group regularly monitors its insurance cover as part of its risk management. Insu-rance is used to cover all the risks that are appropriate to manage for financial or other reasons through insurance policies.

A risk management policy has been defined for the Group and approved by the Board of Directors that is used to manage risks con-nected with the Group’s business operations, personnel and financing.

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INDIA

Ashley Alteams India, a joint venture between Alteams and Ashok Leyland Ltd in Cheyyar near Chennai in South India, has been part of the group since 2007. The plant serves customers in both the communications network and the industrial applications segments. Ashley Alteams India’s services include aluminium high pres-sure die castings, machining, assembly and gasketing with Form-In-Place technology.

Cheyyar Taluk

India has a population of approximately 1.34 billion. Hundreds of languages are spoken in the country, Hindi and English being official languages.


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The plant manufactures approximately 200,000 products a month.

Ashley Alteams has the biggest high pressure die casting unit in India with a capacity of 3300 tonnes.

Hong Kong

Suzhou

CHINA

Alteams began foundry operations in the most populous country in the world in 2001, when Alteams Suzhou was established to produce high pressure die castings. The plant serves customers in both the commu-nications network and the industrial applications segments. Alteams Hitech Tools was established in 2005 to design and manufacture va-rious casting moulds. The history of the city of Suzhou stretches back over 2500 years, and its economic growth in the past 20 years has been breathtaking. Suzhou has attracted major international investments and many of the world’s biggest companies.

Alteams Hitech Tools received a record number of tool orders in 2018.

Kuusakoski1 sales office, 2 employees

Alteams2 plants, 1050 employees

China is the world’s third largest country in terms of geographical area and shares borders with 14 countries.

Referred to as the Venice of the East, Suzhou is a fascinating historic city with a population today of approximately 10 million.

China has such an extensive rail network that its combined length would circle the globe twice.

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Kuusakoski Oy and its subsidiaries form the recycling group.

RECYCLING GROUP

Market situation and business performance

The market situation of the recycling group continued to be robust in the first half of 2018. The price levels of key metals remain-ed at the same level as at the end of 2017 or even strengthened slightly. In the middle of the year, the general uncertainty in the glo-bal economy and global politics resulted in a sudden decline in the prices of commodities and basic metals. The decline in prices con-tinued throughout the third quarter before beginning to level off towards the end of the year. Average price levels in 2018 remained clearly higher than in 2017. However, price levels at the end of 2018 were lower than for the corresponding period in 2017: the price of ferrous scrap was more than 20% lower and the prices of nickel, copper and aluminium approximately 15% lower.

The year under review saw a major change in the global market for recycled metals, as China introduced tighter import restrictions. In accordance with its key customer stra-tegy, Kuusakoski had already focused its deliveries to key customers in the Nordic and European markets, while also increasing the processing of its products, and was therefore prepared for the changes.

The revenues of the recycling group amount-ed to EUR 517.6 million, which is 8% more than in the previous year (475.4 million in 2017, 395.1 million in 2016). The growth in re-venues was positively affected by the avera-ge strengthening of market prices compared to the previous year.

The profitability of the recycling group wea-kened by EUR 7.1 million compared to the previous year. This was primarily due to the sudden and strong decline in prices in the middle of the year, which had a significant impact on results in the third quarter and for the entire year. However, strong performance at the start and end of the year combined with structural changes implemented in pre-vious years helped the recycling group post a clearly positive operating result in 2018 amounting to EUR 12.0 million (19.1 million in 2017, -1.5 million in 2016), which represents 2.4% of revenues (4.0% in 2017, -0.4% in 2016).

The return on investment (ROI) was 4.3% (8.9% in 2017, -3.1% in 2016). The net result was EUR 0.1 million (6.8 million in 2017, -12.1 million in 2016), which represents 0.0% of revenues (1.4% in 2017, -3.1% in 2016). The net result includes EUR 6.1 million in group contri-butions to other group companies.

In addition to the company’s traditional me-tal recycling operations, the focus areas for investments continued to be WEEE recycling (Waste Electrical and Electronic Equipment), sales of recycling services and solutions, and the construction waste business in ac-cordance with its strategy. In accordance with its revised strategy, the company aims to serve key customers even better through its global sourcing channels and by further increasing the processing of its products.

The profitability of recycling operations in Finland and Sweden remained clearly pro-fitable, although it fell short of the previous year’s level. Finland retained its central po-sition in terms of generating results in the recycling business in 2018.

In the UK, Kuusakoski Ltd, which specialises in processing stainless steel in Sheffield, continued to strengthen its collaboration with customers in accordance with its stra-tegy. As in previous years, the company post-ed a positive result.

The operating result of the WEEE joint ven-ture SWEEEP Kuusakoski Ltd in Kent was clearly positive, as in the previous year.

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In Russia, Kuusakoski focused on develo-ping WEEE operations and recycling complex metals. The operating result in Russia was positive.

In the USA, Kuusakoski focused on WEEE recycling. The business environment in the USA remained challenging. Work continued on improving operational efficiency and ad-justing operations to the prevailing market situation during the year under review. The crushing plant in Philadelphia was closed, generating significant non-recurring costs. The operating result in the USA remained ne-gative in 2018.

The recycling group’s Estonian subsidiary posted a positive result despite the business environment, which remained challenging.

R&D, environmental protection, and occupational health and safety

Kuusakoski’s research and development activities in 2018 continued to focus on the more efficient recovery of recycled materials and cleaner products. Progress was made in modernising the processes at the Heinola plant and construction of new plants follo-wing major research into material flows and successful test runs and process enginee-ring. In addition to these major investment projects, R&D work was carried out into the refining possibilities of tyre rubber and ma-naging harmful substances in recycled ma-terials.

Kuusakoski’s own laboratory plays a key role in conducting research into recycled mate-rials and producing reliable material data. Most of the work performed by the laboratory focuses on analysing metals. This analysis

work was expanded in 2018 to cover also research into recycled fuels and waste frac-tions. New research methods will also help monitor the properties of these fractions. The number of samples analysed by the la-boratory since it opened has risen steadily; over 550 different samples of recycled ma-terials were analysed in 2018, which marks a new record for the laboratory.

As in previous years, research collaboration was carried out with many different experts. Other actors in the value chain, producer organisations and customers, research ins-titutes in Finland and abroad, developers of recycling technologies and equipment ma-nufacturers are all important stakeholders in developing Kuusakoski’s operations.

A Best Available Techniques (BAT) Reference Document for Waste Treatment was publis-hed in August 2018 with the aim of harmoni-sing the level of environmental protection in waste treatment processes throughout the European Union. In response to the reference document, work began in autumn 2018 on preparing the required reports for Kuusakos-ki’s plants that are subject to the directive.

Kuusakoski continued its systematic and long-term work on improving occupational safety in 2018. Employees were increasing-ly active in reporting safety observations and helping to prevent accidents, but the accident frequency rate still did not match expectations. Continued efforts were made to improve fire safety, and fire safety training and evacuation exercises were organised for employees at all of the company’s locations.

Scheduled external audits were conducted in the autumn for Finland’s ISO 14001 envi-ronmental system, the OHSAS 18001 occu-

pational health and safety system, and the ISO 9001 quality system for the aluminium smelter in Heinola. The auditor confirmed that Kuusakoski Oy is systematically develo-ping its quality, environmental and occupa-tional health and safety activities, reflecting the company’s commitment to continuous development in these areas. Internal audits of environmental protection, occupational health and safety, and quality systems were conducted according to schedule. A special training event was also organised to further improve the quality of internal audits.

Changes in group structure

The decision was taken to discontinue the operations of the Polish subsidiary Kuusa-koski Sp. z o.o in December 2015. The com-pany was sold in the first half of 2018 to the Portmetal Limited Liability Company.

The Swedish subsidiary RivBorr Sverige AB was sold at the end of 2018. The company was formed in 2016 in connection with the sale of Borrkompaniet Sverige Ab and never conducted business operations at any stage.

The decision was taken to dissolve the Swe-dish joint venture KS Recycling Ab in Malmö during the year under review. Kuusakoski and the waste management company Sysav Ab, which is owned by local municipalities, each have a 50% holding in the company. The dis-solution of KS Recycling Ab will be completed during the course of 2019, and the company will no longer conduct business operations in 2019.

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USAWith a population of over 328 million, the USA offers many opportunities for the recycling business. Since 2010, Kuusakoski has focused on waste elect-rical and electronic equipment (WEEE) recycling in the USA. In 2011, Kuusa-koski acquired a share of Vintage Tech, which later merged wholly under Kuusakoski Group ownership. The main by-products of recycled electronics are copper, precious metals, steel, aluminium and secondary plastics.


Alteams1 sales office, 1 employee

Peoria is a city in central Illinois with a population of 112,000 set on the Illinois River, which stretches for 440 kilometres.

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The USA has 23 UNESCO World Heritage Sites, including the ancient Native American city of Cahokia in Illinois.

Plainfield

Peoria

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Langhorne

Alteams Oy and its subsidiaries form the foundry group.

FOUNDRY GROUP

Market situation and business performance

The foundry group’s revenues decreased by 3% in 2018 compared to the previous year and amounted to EUR 96.3 million (99.3 mil-lion in 2017, 100.9 million in 2016). Within the industrial applications segment, sales de-veloped positively and represented a larger share of the foundry group’s revenues. Sales in the communications network segment decreased due to the general contraction of the market and tough competition. On the other hand, the foundry group won several new 5G-related projects, and mass produc-tion of 5G products is expected to begin in 2019–2020.

The operating result of the foundry group improved compared to the previous year and became positive at EUR 0.2 million (-0.7 mil-lion in 2017, -2.5 million in 2016). Earnings be-fore appropriations and taxes amounted to EUR 3.9 million (2.6 million in 2017, 1.4 million in 2016). The net result was EUR 3.5 million (2.2 million in 2017, 1.3 million in 2016). The net result and earnings before appropriations and taxes include a Group contribution of EUR 5.3 million (4.2 million in 2017, 5.5 million in 2016).

Production efficiency has been successfully enhanced and quality costs reduced at the group’s plant in China, which had a signifi-cant positive impact on the company’s re-sult. Work began on introducing the automo-tive industry’s quality control standard at the plant. Introducing this standard will enable the company to expand its customer base, especially as a supplier of components for electric vehicles.

The volumes and profitability of the group’s plants in Finland improved significantly com-pared to the previous year. In addition, these plants have many new product projects in the start-up phase, which will support sales volumes in the coming years.

Deliveries from the group’s plant in Poland to one major customer were discontinued in the first half of 2018, generating additio-nal costs. In the last quarter of the year, the start-up of new product projects was reflect-ed in growing sales. Nevertheless, profitabi-lity for the entire year weakened compared to the previous year, and the operating result was clearly negative.

The revenues of the group’s joint venture in India remained at the same level as in the previous year, but profitability weakened slightly. The decision was taken in 2018 to

acquire the group’s largest high pressure die casting unit for the plant in India. This investment will enable the group to develop new product families and further expand its customer base.

Research and development

Managing waste heat continues to play an important role in the R&D activities of the foundry group. New manufacturing techni-ques and materials enable more efficient heat transfer, and this expertise has been utilised in attracting new customers. For example, robotic friction stir welding equip-ment was installed at the group’s plant in Lai-hia, Finland, which has enabled new product concepts to be sold to customers.

The foundry group’s management system is based on international quality standards (ISO 9001 and IATF 16949), and its environmental management system is based on the ISO 14001 standard.

Changes in group structure

No changes were made to the group structu-re during the year under review.

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UNITED KINGDOMKuusakoski’s operations in the United Kingdom are divided between two areas of expertise. Kuusakoski Ltd in Sheffield was formerly an affiliated company of the Kuusakoski Group but became a fully owned subsidiary in 2016. Kuusakoski Ltd specialises in processing stainless steel. Kuusakoski SWEEEP Ltd in Sittingbourne, Kent, is a joint venture founded in 2010 that recycles around 30 percent of all small electrical and electronics equip-ment in the UK, amounting to over 40,000 tonnes a year.

SWEEEP Kuusakoski extracts 32 different sales fractions from the electrical and electronic equipment it processes.

Sheffield

Kent


The white chalk cliffs of Dover are overa hundred metres tall and can be seenon a clear day all the way from France on the other side of the English Channel.

SWEEEP Kuusakoski Ltd demonstrates its social responsibility by offering full-time work to disadvantaged groups of society.

The UK is home to 66 million people – around four times the combined populations of Finland and Sweden, which in turn are four times bigger than the UK.

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WEEE

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POLAND

Alteams Poland Sp. z o.o. began operations in the town of Lebork in Poland, a country with a population of 38 million, in 2013. The plant supplies aluminium high pressure die castings, CNC machining, surface treatment, assembly and gasketing with Form-in-Place technology services to customers in both the communications network and the industrial applications segments.

The Polish plant has conside-rable growth potential and is actively expanding its expertise into new segments, including the electrical vehicle industry.

The Castle of the Teutonic Order in Malbork in Poland is the largest brick building in Europe and the largest castle in the world measured by land area.

ESTONIA

Kuusakoski has operated in Estonia since 1999. Kuusakoski AS is Estonia’s biggest metal recycler, as well as a respect-ed recycling expert. The company owns the only shredder plant in Estonia, as a result of which it also serves as the recycling partner of all major vehicle companies. In Estonia, Kuusakoski recycles, for example, vehicles, metals, electri-cal and electronic equipment, and tyres.

Kuusakoski has served as a recycling expert for theMinistry of the Environment in Estonia in preparing new laws and legislation.

Estonia has a population of 1.3 million. The capital Tallinn has the best preserved medieval old town in Northern Europe.

Lebork

Tallinn

Tartu

Paldiski

Vöru

Viljandi

Rakvere

Paide

NarvaJöhvi

Pärnu



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Alteams1 sales office, 2 employees

KUUSAKOSKI GROUP PROSPECTS FOR 2019

Regarding the recycling business, the market situation is expected to remain somewhat unstable due to slower growth in the global economy and unpredictability in global politics. Demand for recycled metals is expec-ted to remain at the same level in 2019 as it was in 2018, but the price level of commodities is expected to lower than average prices in 2018.

The company shall continue to take measu-res to improve operational efficiency in all its country areas and to focus on improving added value and customer satisfaction, as well as on risk management. The revenues of the recycling group are expected to decrease slightly compared to 2018 due to lower metal prices, but the operating result is expected to improve in line with the business plan.

The distributable funds of Kuusakoski Group Oy amount to EUR 104.6 million, of which the net profit for the financial year accounts for EUR 10.1 million.

The Board of Directors proposes to the Annual General Meeting that the distributable funds be used as follows:

For payment of a divided of EUR 50.00 per share EUR 3.0 million

To be retained in shareholders’ equity EUR 101.6 million Total EUR 104.6 million

No significant changes have occurred in the company’s financial position after the end of the financial year. The company’s liquidity is good, and in the view of the Board the proposed distribution of funds does not risk the company’s financial standing.

In addition, the Board of Directors proposes that the Annual General Mee-ting authorise the Board to decide in the second half of 2019 on an additio-nal dividend of up to EUR 50.00 per share should the development of the company’s earnings and cash flow, as well as future prospects, support such a decision.

PROPOSAL OF THE BOARD

Regarding the foundry business, both de-mand and profitability are expected to de-velop positively in 2019 compared to the previous year.

The Board expects Kuusakoski Group’s re-venues for 2019 to decrease from the level in 2018.

ORGANISATION, MANAGEMENT AND AUDITOR

The Members of the Board elected by the Annual General Meeting on 26 April 2018 comprise Olli Vaartimo, Veikko Kuusakoski, Mariella Kuusa-koski-Toivola, Lauri Peltonen and Johan Kron-berg. Tapio Kuusakoski and Tiina Orasaari have served as deputy members. Olli Vaartimo has served as Chairman of the Board.

Authorised Public Accountants KPMG Oy Ab has acted as the company’s regular auditor and Aut-horised Public Accountant Jukka Rajala as the responsible auditor. Veikko Kuusakoski has ser-ved as President of Kuusakoski Group Oy.

Espoo, 28 March 2019

Olli Vaartimo, Chairman of the BoardJohan Kronberg Veikko KuusakoskiMariella Kuusakoski-ToivolaLauri Peltonen

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Kuusakoski takes a balanced approach to financial, social and environmental responsibility in all its operations and defines targets and focus areas for sustainable development. Responsible operations are an inseparable part of Kuusakoski’s business. We report our corporate responsibility indicators for our two main recycling markets, Finland and Sweden.

CORPORATE RESPONSIBILITY

Environmental responsibility

The volume of Kuusakoski’s business operations is influenced strongly by general economic trends. All environmental responsibility indicators are presented per tonne of material collected.

These indicators were compiled and calcu-lated using Bionova Oy’s 360optimi online service and its emissions coefficients. The specific emissions for electricity have been calculated by residual distribution and an emissions coefficient after Kuusakoski swit-ched its electricity supply to source-spe-cific electricity. The district heating used in buildings has been calculated according to the specific emissions of the plants. Logis-tics emissions in this reporting cover road logistics.

Social responsibility

Kuusakoski has social responsibility targets for plant reliability, occupational safety and employee wellbeing. Kuusakoski has focu-sed a lot of attention on fire safety. Five fi-re-related incidents were reported in 2018. These did not result in any personal inju-ry, and property damage was minimal. The

construction waste and waste electrical and electronic equipment processed by Kuusa-koski contain large quantities of flammable materials, so systematic and preventative fire safety work is extremely important. Determined efforts are also being with regard to occupational accidents. The most important way of reducing accidents is through proactive steps taken by employees. A total of 526 reports were submitted in 2018 regarding safety observations and near misses, safety ideas and safety inspections, which is almost twice the number is in the previous year. The accident frequency rate in 2018 was 40.7 (34.8 in 2017) per million working hours in Finland and 17.0 (20.0 in 2017) per million working hours in Sweden. There were two serious occupational accidents in Finland and one in Sweden during the year under re-view. The percentage of absences due to sick leave in 2018 was 2.1% (2.2% in 2017) in Fin-

land and 4.1% (4.7% in 2017) in Sweden. In both countries, the percentage of absences due to sick leave was significantly lower than the industrial average for each country.

Financial responsibility

Kuusakoski requires its business partners to act responsibly and comply with Kuusakos-ki’s Code of Conduct. Kuusakoski audits its subcontractors and pays special attention to the responsibility of its logistics partners in terms of their operations and machine-ry. Kuusakoski operates transparently and complies with local legislation in paying, col-lecting and accounting for taxes. Kuusakoski Group Oy paid EUR 3.1 million in corporate income taxes in 2018. In addition to direct and indirect taxes, Kuusakoski’s tax footprint includes withholding taxes and social securi-ty contributions.

Standard Unit 2016 2017 2018 Change %

Energy intensity, all energy forms used in production GRI G4-EN5 kWh / tn 120 119 130 +9.2 %

Greenhouse gas emissions intensity, scopes 1-2 – production GRI G4-EN18 kg CO²e / tn 33 28 25 -10.7 %

Greenhouse gas emissions intensity, scope 3 – logistics GRI G4-EN18 kg CO²e / tn 91 89 84 -5.6 %

Utilisable materials as a share of material collected Unit 2017 2018 Change %

Utilisable materials are all fractions that Kuusakoski Oy directs to recycling processes, energy production or other forms of reutilisation. Other materials are fractions that Kuusakoski Oy sends for final disposal.

Finland % 93.7 % 94.0 % +0.3 %

Sweden % 95.5 % 97.9 % +2.5 %

INDICATORS

RUSSIARussia is the world’s largest country by landmass and has a population of 147 million. The growth opportunities for recycling in Russia are enormous, while environmental awareness is still only in its early stages. Kuusakoski subsidiary Petromax JSC was founded in 1993 at a time when it was one of many metal recycling operators in Moscow, which has a population of 12 mil-lion. Since 2009, Petromax has systematically developed its expertise and recycling services to cover also other materials.

Around 12 million tonnes of waste is produced each year in Moscow. Only a small percentage of this is reutilised, while the remainder ends up in landfills. Although there is still little public support for burning waste for energy in Russia, waste incineration plants would solve many processing and landfill challenges.

Russia covers no less than 11 of the world’s 24 time zones, which is more than any other country.

Lobnya, Moscow area

Kuusakoski1 site, 50 employees

Approximately a million tonnes of waste electrical and electronics equip-ment is created each year in Moscow, yet only 19% is currently recycled.

Saint Basil’s Cathedral in Moscow’s Red Squarewas built in the 16th century and is one of the most recognisable buildings in Russia.

22

19%

Yokohama

23

JAPAN

With a population of 127 million, Japan has developed rapidly into a major in-dustrial power and one of the global leaders in the communications techno-logy industry. The country’s main exports are cars and electronics. Alteams has several major customers in Japan, in response to which Alteams Japan K.K. was established in 2016. The sales office is situated close to our custo-mers and key partners in Yokohama, a city with a population of 3.7 million.

In the 19th century, Yokohama was among the first Japanese cities to begin trading internationally.

Japan is situated where five continental plates meet, causing over a thousand earthquakes a year.

Alteams1 sales office, 2 employees

Long cooperation with the Finnish Defence Forces continues

Kuusakoski Oy and the Finnish Defence For-ces agreed to extend their eight-year coope-ration by signing a new 3+1 agreement. The total value of the agreement is approxima-tely 6.2 million euros. The Finnish Defence Forces will supply Kuusakoski with scrap me-tal and WEEE material, as well as construc-tion and energy waste from troop units, for recycling. The scrap metal from the Finnish Defence Forces is generally very clean and therefore in very high demand as a raw ma-terial for steel mills, for example.

HIGHLIGHTS 2018

Innovation separates superconducting wires in magnetic resonance imaging equipment

Kuusakoski developed an electrochemical recycling technology that can separate the electrolytic copper and microscopic nio-bium-titanium superconducting wires found in magnetic resonance imaging (MRI) equip-ment. The new technology enables up to 400 kilos of electrolytic copper and niobium-tita-nium wires to be recycled from a single MRI unit. In addition to being used for supercon-ductors, niobium is used especially as an alloying agent for special steels. It is listed by the EU as a critical metal.

Investments in the Heinola plant improve recovery efficiency

Kuusakoski invested 13-15 million euros in an enrichment and rejection processing facili-ty at the Heinola plant. When completed in 2019, the new facilities will be able to recover and further process nearly all the metal that has previously been rejected and sent to the crushing plant as residual waste. The new investment will increase the amount of me-tals sent for recycling by approximately 2000 tonnes a year.

Excellent results in Finnish brand survey

Kuusakoski was found to be overwhelmingly the most recognised and highest regarded WEEE operator in an image and recognition survey to which 500 Finnish companies res-ponded. The survey was conducted by Inno-link Oy among companies that are potential customers for Kuusakoski. Altogether 87% of respondents rated Kuusakoski among three recycling service companies. Kuusakoski’s recognition factor was 61% higher than the second-place operator.

International Alteams Academy launched

Alteams launched a three-year employee development programme in August, and the first workshop was held in China in Janua-ry 2019. The objective of the training is to develop multiskilled experts from different backgrounds and cultures, as well as to build a culture of global collaboration within the foundry group. All participants are assigned a mentor from the management board of the Alteams Group or the local plant.

OHSAS 18001 certification granted for safety system

Kuusakoski’s Finnish operations were gran-ted occupational health and safety certifi-cation based on the OHSAS 18001 standard in January. In order to receive the certifica-tion, a company must demonstrate that it is systematically developing its safety culture, evaluate, monitor and manage risks, address risk factors, analyse dangerous situations and incidents, and draw up development plans.

24

Excellent results in Estonian customer survey

A survey was conducted among Kuusakos-ki’s customers in Estonia in September, the results of which were very encouraging. The quality of customer service was rated on a scale of 1–4 (4 = extremely satisfied), and the average score for Kuusakoski AS was 3.79. Among all respondents, 68.4% would defi-nitely recommend Kuusakoski to their col-leagues. The results of the employee survey that was conducted at the same time were also positive.

Recycling efficiency improves in Estonia

Kuusakoski AS introduced projects aimed at improving the further processing of crushing waste, i.e. rejects. New equipment allows re-jects to be processed into recycled fuel for incineration plants. In addition to improving cost efficiency, the new projects also imp-rove the profitability of Kuusakoski’s opera-tions in Estonia.

5G generates business for Alteams’ communications network operations

The introduction of 5G mobile networks is accelerating, and as a long-term techno-logy partner, Alteams is working with its big-gest communications network customers to solve the challenges posed by 5G. In 2018, Alteams’ communications network sector received its biggest number of orders to date for new mould castings. Mass production for the new product projects will begin in 2020.

Russia values recycling expertise

Petromax was invited by the Russian Ministry of Natural Resources and the Environment and the Federal Service for the Oversight of Consumer Protection and Welfare to ser-ve as an expert and advisor on developing the recycling sector in Russia. In addition, Petromax was invited to participate in waste management development cooperation with the City of St. Petersburg. A significant num-ber of industrial companies in Russia have also shown interest in Petromax’s expert as-sistance and new recycling solutions.

Major new customer relationships for Petromax in Russia

Kuusakoski’s Russian subsidiary Petromax JSC attracted significant new customers in 2018. One of the most important was gain-ed by winning a tender, in which one of the world’s leading car manufacturers sought a supplier of comprehensive recycling and waste management services for its new factory in Moscow. New agreements were also signed with major industrial and IT com-panies.

HIGHLIGHTS 2018

Fire safety work increases confidence in Sweden

A fire at Kuusakoski’s facilities in Gävlehamn in 2016 led to a verbal termination of the lease agreement. Following the accident, management and employees have taken significant steps to minimise fire risks and eliminate hazards together with other com-panies at the site. Kuusakoski managed to restore confidence and can now continue operations at the Gävlehamn facilities, the-reby avoiding the significant costs of having to move to another location.

WEEE recyclers in the UK join forces

Waste electrical and electronic equipment (WEEE) recyclers in the UK formed a new re-presentative body, the Approved Authorised Treatment Facility Forum (AATF), to provide a voice for the sector in discussions with the Government and other stakeholders. With its members accounting for over 80% of WEEE recycling in the UK, the AATF Forum is able to provide a focus for the WEEE treatment sector to improve industry standards, assist in the development of regulatory change and resolve common technical issues. The AATF was formed following an initial suggestion from Justin Greenaway, Commercial Manager of SWEEEP Kuusakoski.

29

EUR million 2018 2017<

REVENUES 1) 610.8 571.6

Other operating income 2) 2.0 2.8

Materials and services 3) 445.9 398.3

Personnel expences 4) 76.6 77.0

Depreciation and writedowns 6) 21.5 23.9

Other operating expenses 57.4 57.0

601.4 556.2

Operating profit 11.4 18.2

Financial income and expenses 7) -4.7 -6.6

Profit before taxes 6.7 11.6

Income taxes 8) -3.0 -2.1

Minority interest -0.1 -0.3

NET PROFIT FOR THE FINANCIAL YEAR 3.5 9.1

CONSOLIDATED INCOME STATEMENT

KEY FIGURES


ASSETS

Non-current assets 9)

Intangible assets 4.6 7.3

Tangible assets 115.5 117.2

Investments 4.9 4.3

125.0 128.7

Current assets

Inventories 10) 64.8 65.9

Long-term receivables 11) 0.1 0.4

Short-term receivables 11) 60.7 72.8

Cash and cash equivalents 51.6 35.4

177.2 174.5

302.2 303.2

SHAREHOLDERS´ EQUITY AND LIABILITIES

Equity and reserves 12)

Share capital 0.1 0.1

Share premium fund 0.2 0.2

Retained earnings 123.8 122.1

Net profit for the financial year 3.5 9.1

127.6 131.5

Minority interest 1.3 1.1

Obligatory provisions 13) 12.2 14.1

Liabilities 14)

Non-current liabilities 69.6 59.8

Current liabilities 91.5 96.7

161.1 156.5

302.2 303.2

CONSOLIDATED BALANCE SHEET

30

GUNILLA NORDEN • KUUSAKOSKI • SWEDENAdministrator in sales and sourcingKuusakoski Sverige AB, Gävle, Sweden7 years with Kuusakoski

”I like the variation in our country and of course the spring and summertime. It is delightful to work with people who are professional and that we have so much fun together. I like to work with customers and the variation that comes with it.”

IZABELA WOJCIECHOWSKA • ALTEAMS • POLANDAssembly DepartmentAlteams Poland Sp. z o.o., Lębork, Poland4 years with Alteams

”What I like about Poland is the diversity of my country and society. At work I like mostly the atmosphere at Alteams Po-land and the possibility of daily contact with my co-workers, which gives me a lot of motivation.”

GREETINGS FROM AROUND THE WORLD

The Kuusakoski Group is made up of an international and multiskilled team of recycling and foundry professionals. Over 2400 employees in 10 countries ensure on a daily basis that we are able to serve our customers in the best possible way and in accordance with our values.Here are some greetings from our employees around the world!

JUAN CORDOVA • KUUSAKOSKI • USARing Crusher Operator/LeadKuusakoski US, Plainfield, Illinois, USA8 years with Kuusakoski

”One of the best things at Kuusakoski US is the way we handle and overcome obstacles or situations. The things I like most about my job are the responsibility of running the Ring Crusher and the team members we have to make the operations be successful. ”

MIKAEL KOFFMAN • ALTEAMS • SWEDENSenior Global Project Manager, Tool & DesignAlteams Stilexo AB, Skillingaryd, Sweden14 years with Alteams

”I like travelling with my family and meeting people all over the world. It is delightful to work globally with people in all our factories, regardless of their culture, age and gender. The best thing in Sweden is a summer evening with very late sunshine - and Swedish home cooking.”

TYRONE ELLIOTT • KUUSAKOSKI • USAProduction SupervisorKuusakoski Vintage Tech, Langhorne, PA, USA5 years with Kuusakoski

”The best things about the United States and the Philadelphia area in particular are our professional sports teams and the variety of great food. What I like most about my job is motivating people in effort to get the best out of them.”

DOMINIK BLANK • ALTEAMS • POLANDDie Casting DepartmentAlteams Sp. z o.o., Lębork, Poland2 years with Alteams

”I am a young man, so in Poland I like best the good beer and the most beautiful girls in the world. The most interesting thing about our company is the continuous possibility of training and develop-ment. I like very much my work with robots and computers.”

NINO ORTEGA • KUUSAKOSKI • USALead HousekeeperKuusakoski Glass, Peoria, USA2 years with Kuusakoski

”I enjoy keeping the workplace clean; it shows that we’re proud to work for a great company.”

DAMIEN NOLAN • KUUSAKOSKI • UKAdministration & Accounts ManagerKuusakoski Ltd, Sheffield, UK12 years with Kuusakoski

”I enjoy working at Kuusakoski because of the challenging and varied tasks, as well as the tight work community.”

JUSTIN GREENAWAY • KUUSAKOSKI • UKCommercial ManagerSWEEEP Kuusakoski, Kent, UK12 years with SWEEEP Kuusakoski

”SWEEEP Kuusakoski is based in an area called the Garden of Eng-land. Any gardener will confirm you need a lot of rain for a healthy garden! The best part of my job is working hard for our customers, which gets repaid by long-term loyalty and mutual support.”

25

MARIA KONDRASHKINA • ALTEAMS • JAPANRepresentative DirectorAlteams Japan K.K., Yokohama, Japan11 years with Alteams

”Japan has unique culture and traditions, and each sea-son has its own speciality: hot springs, cherry blossoms, red leaves… Working for Alteams Japan gives me a chance to see different sides of Japan’s working culture, improve my language skills and participate in decision-making.”

LARISA SHAPOVALOVA • KUUSAKOSKI • RUSSIAAccount ManagerKuusakoski Russia, Moscow, Russia8 years with Kuusakoski

”I’ve been with Kuusakoski for over 8 years. I started as a scales operator and worked my way up to becoming an account manager. I was very happy to have an opportunity to meet my Finnish col-leagues during our visit to our Finnish production sites in 2018.”

R. MUTHUKUMAR • ALTEAMS • INDIAChief Financial Officer at Ashley Alteams India LtdCheyyar, Tamil Nadu, India7 years with Alteams

”I’m happy and proud of my country and its unity in diversity. I like my job for the continuous challenges, the related learning opportunities and experience. The best thing that my country and company share in common is the abundant freedom.”

KADI SEPP • ALTEAMS • ESTONIAFinancial/ Customer Service SpecialistAlteams Eesti OÜ, Tallinn, Estonia4 years with Alteams

”What I like most is how my job is challenging and international, with the chance to work with different nationalities and cultures. The best thing about Estonia is its open and innovative business environment.”

TIMO PERÄLÄ • ALTEAMS • FINLANDFoundry worker, quality controller and chief shop stewardAlteams Finland Oy, Loppi , Finland 20 years with Alteams

”The best things about my own work at Alteams are the challenging and varied tasks, plus the multinational work community. The best things about Finland are the summer and white nights.”

WENJUN ZHOU • ALTEAMS • CHINACNC Shift LeaderAlteams Suzhou, China13 years with Alteams

”In my work, there are many like-minded colleagues. We are very happy to work with each other and we grew up together in Alteams. ”

ROWENA ZHANG • KUUSAKOSKI • CHINAChief Representative Kuusakoski China Office, Shanghai, China15 years with Kuusakoski

”I’ve seen the market booming and declining in the past 15 years in the recycling business in China, just like our lives – up and down. I’ve learned we have to follow policy and seek the best opportunities and profit from the challenges.”

JIMI PETTILÄ • KUUSAKOSKI • FINLANDHead of Department, WEEEKuusakoski Oy, Heinola, Finland11 years with Kuusakoski

”Personally for me 2018 was in many ways a year of learning – a new hometown, a new site and new co-workers. One of the things I enjoy most in my work is figuring out new ways to best process the changing materials.”

KULDAR SUITS • KUUSAKOSKI • ESTONIAManagement Board Member of AS KuusakoskiKuusakoski AS, Tallinn, Estonia20 years with Kuusakoski

”Having been with Kuusakoski for such a long time, I have always found new challenges and tasks within our organisation. My experience at Kuusakoski has helped me modernise and promote especially metal scrap recycling in Estonia and the Baltics.”

28

Excellent results in Estonian customer survey

A survey was conducted among Kuusakos-ki’s customers in Estonia in September, the results of which were very encouraging. The quality of customer service was rated on a scale of 1–4 (4 = extremely satisfied), and the average score for Kuusakoski AS was 3.79. Among all respondents, 68.4% would defi-nitely recommend Kuusakoski to their col-leagues. The results of the employee survey that was conducted at the same time were also positive.

Recycling efficiency improves in Estonia

Kuusakoski AS introduced projects aimed at improving the further processing of crushing waste, i.e. rejects. New equipment allows re-jects to be processed into recycled fuel for incineration plants. In addition to improving cost efficiency, the new projects also imp-rove the profitability of Kuusakoski’s opera-tions in Estonia.

5G generates business for Alteams’ communications network operations

The introduction of 5G mobile networks is accelerating, and as a long-term techno-logy partner, Alteams is working with its big-gest communications network customers to solve the challenges posed by 5G. In 2018, Alteams’ communications network sector received its biggest number of orders to date for new mould castings. Mass production for the new product projects will begin in 2020.

Russia values recycling expertise

Petromax was invited by the Russian Ministry of Natural Resources and the Environment and the Federal Service for the Oversight of Consumer Protection and Welfare to ser-ve as an expert and advisor on developing the recycling sector in Russia. In addition, Petromax was invited to participate in waste management development cooperation with the City of St. Petersburg. A significant num-ber of industrial companies in Russia have also shown interest in Petromax’s expert as-sistance and new recycling solutions.

Major new customer relationships for Petromax in Russia

Kuusakoski’s Russian subsidiary Petromax JSC attracted significant new customers in 2018. One of the most important was gain-ed by winning a tender, in which one of the world’s leading car manufacturers sought a supplier of comprehensive recycling and waste management services for its new factory in Moscow. New agreements were also signed with major industrial and IT com-panies.

HIGHLIGHTS 2018

Fire safety work increases confidence in Sweden

A fire at Kuusakoski’s facilities in Gävlehamn in 2016 led to a verbal termination of the lease agreement. Following the accident, management and employees have taken significant steps to minimise fire risks and eliminate hazards together with other com-panies at the site. Kuusakoski managed to restore confidence and can now continue operations at the Gävlehamn facilities, the-reby avoiding the significant costs of having to move to another location.

WEEE recyclers in the UK join forces

Waste electrical and electronic equipment (WEEE) recyclers in the UK formed a new re-presentative body, the Approved Authorised Treatment Facility Forum (AATF), to provide a voice for the sector in discussions with the Government and other stakeholders. With its members accounting for over 80% of WEEE recycling in the UK, the AATF Forum is able to provide a focus for the WEEE treatment sector to improve industry standards, assist in the development of regulatory change and resolve common technical issues. The AATF was formed following an initial suggestion from Justin Greenaway, Commercial Manager of SWEEEP Kuusakoski.

29


REVENUES 1) 610.8 571.6

Other operating income 2) 2.0 2.8

Materials and services 3) 445.9 398.3

Personnel expences 4) 76.6 77.0

Depreciation and writedowns 6) 21.5 23.9


601.4 556.2

Operating profit 11.4 18.2

Financial income and expenses 7) -4.7 -6.6

Profit before taxes 6.7 11.6

Income taxes 8) -3.0 -2.1

Minority interest -0.1 -0.3


CONSOLIDATED INCOME STATEMENT

KEY FIGURES


ASSETS

Non-current assets 9)

Intangible assets 4.6 7.3


Investments 4.9 4.3

125.0 128.7

Current assets

Inventories 10) 64.8 65.9

Long-term receivables 11) 0.1 0.4

Short-term receivables 11) 60.7 72.8


177.2 174.5

302.2 303.2

SHAREHOLDERS´ EQUITY AND LIABILITIES

Equity and reserves 12)





127.6 131.5

Minority interest 1.3 1.1

Obligatory provisions 13) 12.2 14.1

Liabilities 14)

Non-current liabilities 69.6 59.8


161.1 156.5

302.2 303.2

CONSOLIDATED BALANCE SHEET

30


Income statement

1. REVENUES BY BUSINESS SECTOR AND MARKET AREA

Revenues by business sector

Recycling 514.5 472.3

Foundries 96.3 99.3

Total 610.8 571.6

Revenues by market area

Finland 132.3 131.2

Other Europe 315.1 279.3

Asia 141.0 141.9

Other areas 22.3 19.1

Total 610.8 571.6

2. OTHER OPERATING INCOME

Gains on sale of fixed assets 0.5 1.7

Other operating income 1.5 1.1

Total 2.0 2.8

3. MATERIALS AND SERVICES

Materials, goods and supplies

Purchased during the financial year 367.6 326.9

Increase(-),decrease (+) in inventories 0.0 -7.2

367.5 319.7

Outside services 78.4 78.5

Total 445.9 398.3

4. PERSONNEL EXPENCES

Wages and salaries 65.7 65.8

Pension expenses 6.3 6.3

Other personnel expences 4.6 4.9

Total 76.6 77.0

Salaries and remuneration to senior management Managing Directors and Members of the Board of Directors

3.4 3.3


CASH FLOW FROM OPERATIONS

Profit (loss) before appropriations and taxes 6.7 11.6

Adjustments:

Depreciation and write-downs 21.5 23.9

Gains (-) and losses (+) on fixed assets -0.1 -1.1

Share of results of associated companies -0.9 -1.2

Unrealised exchange rate profits and losses -0.5 5.4

Financial income and expenses 6.1 3.1

Cash flow before change in working capital 32.7 41.5

Change in working capital:

Increase (-), decrease (+) in inventories 0.5 -6,2 Increase (+), decrease (-) in non-interest-bearing trade receivables 11.2 1,0

Increase (+), decrease (-) in non-interest-bearing liabilities -0.4 7,8

Cash flow from operations before financial items and taxes 43.9 44,1

Interest paid and other financial expenses -5.0 -3.2

Dividends received 0.5 0.4

Interest received 0.2 0.3

Taxes -2.2 -1.8

Cash flow from operations 37.6 39.8

CASH FLOW FROM INVESTMENTS

Investments in tangible and intangible assets -17.5 -7.5

Associated companies acquired -0.2 -0.4

Increase (+), decrease (-) in other investments 0.1 0.0

Cash flow from investments -17.5 -7.8

CASH FLOW FROM FINANCING

Capital investment by the minority 0.0 0.5

Increase (+), decrease (-) in non-current liabilities 14.0 3.5

Increase (+), decrease (-) in current liabilities -11.6 -24.6

Dividend distribution -6.0 -3.6

Cash flow from financing -3.6 -24.2

Change in cash and cash equivalents 16.4 7.8

Cash and cash equivalents 1 Jan 35.4 28.0

Effect of exchange rate changes -0.3 -0.3

Cash and cash equivalents 31 Dec 51.6 35.4

CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31

EUR million

BALANCE SHEET, ASSETSAcquistion

cost1.1.2018

Translation difference

Increases DecreasesRe-classifi-

cations

Accumulated depreciation

1.1.2018

Translation adjustment

Accumulated depreciation

on decreases

Depreciation for the

financial yearWritedowns

Total31.12.2018

9. NON-CURRENT ASSETS

Intangible assets

Intangible rights 2.1 0.0 0.0 0.0 0.1 -1.1 0.0 0.0 -0.1 0.0 1.1

Goodwill 58.4 -0.1 0.0 -4.0 0.0 -55.1 0.1 4.0 -1.6 0.0 1.6

Other intangible assets 14.8 0.0 0.1 0.0 0.1 -12.0 0.0 0.0 -1.4 0.0 1.6

Capital work in progress 0.2 0.0 0.3 0.0 -0.2 0.0 0.0 0.0 0.0 0.0 0.4

Total intangible assets 75.5 -0.1 0.4 -4.1 0.0 -68.3 0.1 4.1 -3.1 0.0 4.6

Tangible assets

Land 7.9 0.0 0.0 -0.2 0.1 0.7 0.0 0.0 0.0 0.0 8.5

Buildings and structures 104.2 0.1 0.3 -3.8 0.6 -52.7 0.1 3.3 -4.9 0.0 47.3

Machinery and equipment 228.2 -2.4 3.5 -8.5 8.7 -176.5 1.9 7.4 -13.1 0.0 49.1

Other tangible assets 6.7 0.1 0.2 -0.6 0.1 -4.8 0.0 0.7 -0.5 0.0 2.0

Capital work in progress 3.4 0.0 15.0 0.0 -9.6 0.0 0.0 0.0 0.0 0.0 8.7

Total tangible assets 350.5 -2.4 19.0 -13.2 0.0 -233.3 1.9 11.3 -18.4 0.0 115.5

Investments

Shares in associated companies 4.1 0.2 0.7 0.0 0.0 0.0 0.0 0.0 0.0 -0.2 4.8

Other shares and shareholdings 0.2 0.0 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1

Total investments 4.3 0.2 0.7 0.0 0.0 0.0 0.0 0.0 0.0 -0.2 4.9

Total non-current assets 430.3 -2.3 20.1 -17.2 0.0 -301.5 2.0 15.4 -21.5 -0.2 125.0


The Group has a supplementary pension insurance affecting one person. Group management had no loans from the parent company.

Average number of personnel

Wage earners 1,816 1,798

Salaried employees 604 597

Total 2,420 2,395

5. AUDITOR’S FEES

Auditing 0.2 0.2

Other services 0.1 0.1

Total 0.3 0.3

6. DEPRECIATION AND WRITEDOWNS

Planned depreciation, intangible 1.5 1.5

Planned depreciation, goodwill 1.6 2.2

Planned depreciation, tangible 18.4 20.2

Writedowns 0.0 -0.1

Total 21.5 23.9

7. FINANCIAL INCOME AND EXPENCES

Income from associated companies 0.9 1.2

Other interest and financial income, from others 1.0 1.2

Other interest and financial expenses, to others 6.6 9.0

Total financial expenses and expenses -4.7 -6.6

Foreign currency exchange differences included in total

financial income and expenses -1.2 -4.7

8. INCOME TAXES

Income taxes payable from current and previous tax years 2.3 2.0

Change in deferred tax liability 0.5 -0.1

Other direct taxes 0.3 0.3

Total 3.0 2.1

32


10. INVENTORIES

Materials and supplies 38.6 39.1

Finished goods 26.0 26.5

Advance payments 0.1 0.2

64.8 65.9

11. CURRENT RECEIVABLES

Long-term receivables

Deferred tax liabilities 0.1 0.4

0.1 0.4

Short-term receivables


Trade receivables 50.4 59.1

Other receivables 2.4 4.1

Accured income 4.8 6.2

60.7 72.8

BALANCE SHEET, ASSETS

12. SHAREHOLDERS´ EQUITY



0.3 0.3

Retained earnings 1 Jan 2018 131.2 121.6

Dividends paid -6.0 -3.6

Translation adjustment -1.4 4.0

Retained earnings 31 Dec 2018 123.8 122.1


Total retained earnings 127.3 131.2

Total 127.6 131.5


13. PROVISIONS

Environmental provisions 7.3 6.1

Other provisions 4.9 8.0

Total 12.2 14.1

14. LIABILITIES

Non-current liabilities


Loans from financial institutions 65.6 55.3

Other non-current liabilities 0.3 0.9

Total non-current liabilities 69.6 59.8

Current liabilities

Loans from financial institutions 22.4 28.1

Advances received 0.9 1.1

Trade payables 47.2 44.0

Other current liabilities 4.3 5.8

Accrued expenses 16.6 17.7

Total current liabilities 91.5 96.7

Main items in accrued expenses

Accrued personnel expenses 7.6 9.0

Taxes 1.5 1.0

Accrued financial expenses 0.6 0.4

Other 6.8 7.4

16.6 17.7

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

33


OTHER NOTES

15. COLLATERAL GIVEN

Liabilities for which collateral given

Loans from financial intitutions 1.3 1.3

Mortgages given as collateral

Business mortgages 9.4 9.5

Book value of pledged shares 0.5 0.5

16. CONTINGENT LIABILITIES

Leasing and rental liabilities

Payable within one year 7.6 7.7

Payable after one year 18.7 19.7

Total leasing and rental liabilities 26.4 27.3

Guarantees given on behalf of companies belonging to the same group

11.2 7.7

Other guarantees 9.8 9.3

Total contingent liabilities 47.4 44.3

17. DERIVATIVE INSTRUMENTS

Open derivative intruments 31 Dec 2018

Forward foreign exchange contracts

Fair value 0.2 -0.1

Contract amounts 14.8 11.9

Change in value marked to the Income Statement 0.0 -0.1

Currency options

Written options

Fair value 0.0 0.0


Change in value marked to the Income Statement 0.0 0.0


Purchased options

Fair value 0.0 0.0



Metal options

Fair value 0.0 0.0



Electricity derivatives

Fair value 0.8 0.0


Forward foreign exchange contracts, currency options and metal options have been made for hedging purposes, and they have been booked for the most part as a gain or loss in the financial statements at their fair value. Exercised and terminated electricity derivatives have been booked in the income statement upon their termination. The values of open agreements are not booked in the balance sheet but are instead listed here. At the end of the financial year the Group had open currency options, forward foreign exchange contracts and electricity derivatives. All open forward foreign exchange contracts and metal options mature within 14 months. Most open electricity derivatives mature after more than 6 months.

34

18. GROUP HOLDINGS IN OTHER COMPANIES

Country Group

Share-holding %Parent Company Shareholding %

GROUP COMPANIES

Alteams Oy Finland 100 100

Alteams Finland Oy Finland 100

Jokirantakiinteistöt Oy Finland 100 100

Kivikolmio Oy Finland 100

Kuusakoski Oy Finland 100 100

Kiinteistö Oy Lahden Norokatu 5 Finland 100 100

Revanssi Oy Finland 51

Alteams Eesti Oü Estonia 100

Alteams Japan K.K. Japan 100

Alteams Poland Sp.zo.o Poland 100

Alteams Stilexo AB Sweden 100

Alteams Suzhou Co. Ltd. China 100

Crown Works Ltd Great Britain 100

KS Recycling AB Sweden 50

Kuusakoski AS Estonia 100

Kuusakoski Glass Recycling LLC USA 100

Kuusakoski Inc USA 100

Kuusakoski Ltd Great Britain 100

Kuusakoski Philadelphia LLC USA 100

Kuusakoski Sverige AB Sweden 100

Kuusakoski US LLC USA 100

Petromax JSC Russia 100

SWEEEP Kuusakoski Ltd Great Britain 61

Vintage Tech LLC USA 100

ASSOCIATED COMPANIES

Suomen Erityisjäte Oy Finland 49

Sähkö-Saarnikannas Oy Finland 20

Ashley Alteams India Private Limited India 50

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

35

EUR million 2018 2017 2016 2015 2014

Revenues, MEUR 610.8 571.6 494.4 568.1 655.5

Exports and sales outside Finland, MEUR 478.4 440.4 394.4 441.5 501.8

% of revenues 78.3 77.0 79.8 77.7 76.6

Operating profit, MEUR 11.4 18.2 -4.1 -37.9 6.9

% of revenues 1.9 3.2 -0.8 -6.7 1.0

Net financing expences (excluding exhange rate differences), MEUR 3.5 2.0 2.6 2.5 3.0

% of revenues 0.6 0.3 0.5 0.5 0.5

Profit berore taxes, MEUR 6.7 11.6 -7.1 -38.4 5.2

% of revenues 1.1 2.0 -1.4 -6.8 0.8

Return on equity (ROE), % 2.7 7.1 -8.4 -23.6 1.3

Return on investment (ROI), % 2.9 3.7 -1.0 -12.6 2.0

Equity ratio, % 42.8 43.9 39.2 41.4 48.0

Interest-bearing debt, MEUR 91.2 88.2 113.9 121.2 110.7

Net debt, MEUR 39.7 52.8 86.0 110.7 100.3

Net Gearing, % 30.8 39.8 70.4 83.9 53.0

Investments, MEUR 17.5 7.8 4.8 23.9 20.5

% of revenues 2.9 1.4 1.0 4.3 3.1

Number of personnel (average) 2,420 2,395 2,512 2,914 2,889

EUR million 2018 2017 2016 2015 2014

Number of shares 60,000 60,000 60,000 60,000 60,000

Net profit per share, EUR 58.8 151.7 -180.4 -632.9 46.6

Equity per share, EUR 2,127.2 2,191.1 2,031.0 2,265.6 3,102.1

Dividend per share, EUR 50.0 100.0 60.0 0.0 175.0

Dividend as % of net profit 85.0 65.9 -33.3 - 375.3

INFORMATION PER SHARE

KEY FIGURES

36


REVENUES 1.2 1.2

Other operating income 0.8 0.7

Personnel expenses 0.5 0.6

Depreciation and write-downs 0.1 0.1


Operating profit -0.4 -0.5

Financial income and expenses 10.3 10.7

Profit (loss) before appropriations and taxes 9.9 10.2

Group contributions 0.2 0.4

Income taxes 0.0 0.0



Specification of shareholders´ equity



Retained earnings on 1 Jan 2018 100.6 93.6

Dividends paid -6.0 -3.6

Retained earnings on 31 Dec 2018 94.6 90.0


Total retained earnings on 31 Dec 104.6 100.6

Total 104.9 100.9

Parent company´s distributable funds 104.6 100.6


ASSETS

Fixed assets and other long-term investments

Non-current assets 0.0 0.1


Investments 100.9 100.9

102.0 102.1

Current assets

Long-term receivables 8.3 8.5

Short-term receivables 2.7 1.2


45.4 24.4

147.4 126.5

SHAREHOLDERS´EQUITY AND LIABILITIES

Shareholders´equity




Netprofit for the year 10.1 10.6

104.9 100.9

Liabilities

Non-Current liabilities 3.6 4.1


42.5 25.6

147.4 126.5

PARENT COMPANY INCOME STATEMENT PARENT COMPANY BALANCE SHEET

NOTE TO PARENT COMPANY FINANCIAL STATEMENT

37

ACCOUNTING PRINCIPLES

The foundry group sells aluminium castings to its customers, as well as the tools used to manufacture their products. Income from product sales is recorded when the product is delivered to the customer under the terms of delivery. Income from tool projects is re-corded on a billing basis in accordance with the terms of the customer agreement. Speci-fic margins for projects are recognised at the end of each project. Anticipated losses from non-profitable projects are recognised as an expense in their entirety.

Foreign Currency Items

Foreign currency receivables, liabilities and commitments are valued according to the European Central Bank’s average exchange rates on the closing date. Currency derivati-ves are valued at market value on the closing date, and profits and losses are charged to the appropriate items in the income state-ment.

The balance sheets of non-Finnish sub-sidiaries are translated into euros at the average exchange rate on the closing date and their income statement at the average of the monthly average exchange rates for the financial year. Exchange rate differences arising from translating shareholders’ equity are presented in retained earnings.

Consolidated Financial Statements

The consolidated financial statements and those of the parent company Kuusakoski Group Oy have been prepared in accordance with the Finnish Accounting Act.

The consolidated financial statements inclu-de the parent company, as well as compa-nies in which the parent company directly or indirectly held more than 50 percent of the voting rights at the end of the financial year or in which the parent company has the po-wer to exercise control.

All inter-company receivables and liabilities, internal margins and the effects of other internal transactions have been eliminated. Share ownership has been eliminated using the acquisition cost method. The difference between the acquisition cost and the equity of subsidiary companies at the time of ac-quisition is presented as goodwill. Goodwill is depreciated on a straight-line basis over 5 years.

Minority interests are separated from the Group’s result and shareholders’ equity and presented as separate items in the consoli-dated income statement and balance sheet.

The financial information of associated com-panies is included in the consolidated finan-cial statements using the equity method. The Group’s share of the results in associat-ed companies is presented in the financial items. Similarly, the Group’s share of the sha-reholders’ equity of associated companies is presented in the balance sheet as the value of the shares and any possible goodwill. As-sociated companies are companies in which the parent company held 20 to 50 percent of the voting rights at the end of the financial year.

Revenue Recognition

Revenue from sales of products and services is reported as net sales adjusted for indirect taxes, discounts and exchange rate differen-ces on foreign currency sales. The recycling group sells recycled metal and other recy-cled materials and offers various recycling services to its customers. Income from ma-terial sales is recorded when the product is delivered to the customer under the terms of delivery and the risks and benefits associat-ed with it have been transferred to the reci-pient. Revenue from services is recognised when the service has been performed.

38

Research and Development Costs

Research and development costs are char-ged to the income statement as annual costs.

Inventories

Inventories are presented in the balance sheet at the lower of cost or net realisable value; they are calculated using the FIFO method as the amount of the variable costs arising from acquisition and manufacturing, or the probable sales price. In addition to variable costs, the value of inventories inclu-des fixed costs arising from acquisition and manufacturing.

Fixed Assets and Depreciation

The balance sheet values of tangible and intangible fixed assets are based on their original acquisition costs, less accumulated depreciation. The acquisition cost of assets manufactured by the company includes va-riable manufacturing costs.

Straight-line depreciation is made according to the plan for depreciation, which is based on the estimated useful economic life of the assets.

Estimated useful economic life of fixed assets:

Intangible assets 3 – 5 yearsGoodwill 5 – 10 yearsOther long-term expenditure 5 yearsBuildings and structures 10 – 30 yearsMachinery and equipment 5 – 12 yearsOther tangible assets 5 – 20 years

The reducing balance method according to the Finnish Business Income Tax Act is applied to the straight-line depreciation of Kivikolmio Oy.

Financial Assets

Financial assets are valued according to their acquisition cost or the probable sales price.

Pension Arrangements

Pension costs for Group companies outside Finland are calculated in accordance with local legislation and practice and recorded in the consolidated financial statements. Pension obligations for Group personnel in Finland are covered through payments to pension insurance institutions.

Deferred Taxes

Deferred tax liabilities and assets in the con-solidated financial statements are calculat-ed for temporary differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting pur-poses using the official tax rate confirmed on the balance sheet date for the following financial periods.

Taxation requirements in Finland and certain other countries allow companies to reduce or increase their taxable income through appropriations. Any increase or reduction in these is recorded in the income state-ment as a change in appropriations, with the counter-entry in the balance sheet appropri-ations. In the consolidated financial state-

ments, appropriations are divided between the result for the year, accumulated reserves and deferred tax liability.

Recognition and Measurement of Derivative Instruments

Derivative instruments include currency op-tions, forward foreign exchange contracts, interest rate swaps and commodity deriva-tives as part of an overall risk management policy. Currency options and forward foreign exchange contracts are used to reduce an-ticipated foreign currency risks related to sales and purchases. Derivatives are valued at market value on the closing date, and their changes in value are recorded in the income statement. The change in value of electricity derivatives is recorded only in the notes to the consolidated financial statements.

Environmental Provisions

When acquiring new areas of land, an envi-ronmental provision is recorded with man-datory provisions about any possible conta-minated soil of which the company is aware.

Kuusakoski Oy’s location-specific environ-mental permit regulations are complied with closely and monitored continuously throug-hout the financial year. Upcoming environ-mental investments and any possible soil cleaning provisions for land on which ope-rations are to be discontinued are recorded in the financial statements as mandatory provisions.

39

AUDITOR’S REPORT

To the Annual General Meeting of Kuusakoski Group Oy

Report on the Audit of Financial Statements

using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting un-less there is an intention to liquidate the parent company or the group or cease ope-rations, or there is no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of Financial Statements

Our objectives are to obtain reasonable as-surance on whether the financial statements as a whole are free from material misstate-ment, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high le-vel of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Missta-tements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expec-ted to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with good auditing practice, we exercise professional

Opinion

We have audited the financial statements of Kuusakoski Group Oy (business identi-ty code 0200662-5) for the year ended 31 December, 2018. The financial statements comprise the balance sheets, the income statements, cash flow statements and notes for the group as well as for the parent com-pany. In our opinion, the financial statements give a true and fair view of the group’s and the company’s financial performance and fi-nancial position in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements.

Basis for Opinion

We conducted our audit in accordance with good auditing practice in Finland. Our res-ponsibilities under good auditing practice are further described in the Auditor’s Responsi-bilities for the Audit of Financial Statements section of our report. We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have

fulfilled our other ethical responsibilities in accordance with these requirements. We be-lieve that the audit evidence we have obtain-ed is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements

The Board of Directors and the Managing Director are responsible for the preparation of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of fi-nancial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the prepa-ration of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors and the Managing Direc-tor are responsible for assessing the parent company’s and the group’s ability to conti-nue as a going concern, disclosing, as appli-cable, matters relating to going concern and

40

judgment and maintain professional skepti-cism throughout the audit. We also:

— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to tho-se risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, inten-tional omissions, misrepresentations, or the override of internal control.

— Obtain an understanding of internal cont-rol relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s inter-nal control.

— Evaluate the appropriateness of ac-counting policies used and the reasonable-ness of accounting estimates and related disclosures made by management.

— Conclude on the appropriateness of the Board of Directors’ and the Managing Direc-tor’s use of the going concern basis of ac-counting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial state-ments or, if such disclosures are inadequate,

to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

— Evaluate the overall presentation, structu-re and content of the financial statements, including the disclosures, and whether the fi-nancial statements represent the underlying transactions and events so that the financial statements give a true and fair view.

— Obtain sufficient appropriate audit evi-dence regarding the financial information of the entities or business activities within the group to express an opinion on the con-solidated financial statements. We are res-ponsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other Reporting Requirements

Other Information

The Board of Directors and the Managing Director are responsible for the other infor-mation. The other information comprises the report of the Board of Directors. Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or ot-herwise appears to be materially misstated. Our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.

In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the appli-cable laws and regulations.

If, based on the work we have performed, we conclude that there is a material miss-tatement in the information included in the report of the Board of Directors, we are re-quired to report this fact. We have nothing to report in this regard.

Other opinions

We support the adoption of the financial statements. The proposal by the Board of Directors regarding the treatment of distribu-table profit is in compliance with the Limited Liability Companies Act. We support that the Board of Directors of the parent company and the Managing Director be discharged from liability for the financial period audited by us.

Helsinki, 11 April 2019KPMG OY ABJukka Rajala, Authorised Public Accountant

41

BOARD OF DIRECTORS, MANAGEMENT AND AUDITOR

Auditor

KPMG OY ABJukka Rajala, APA

President and CEO of Alteams Oy

Asko Nevala, MSc (Eng)

Management Team of Foundry Operations

Asko Nevala, President and CEO (Chairman) Daniel Eklund, Executive Vice President, Global Accounts, NET CBU Mika Haapala, Executive Vice President, Operational Excellence Development Petteri Kiili, Chief Financial Officer Kimmo Pesonen, Executive Vice President, Global Accounts, NET CBU Timo Puska, Executive Vice President, Industrial Applications CBUHenri Riihimäki, Managing Director, Alteams Poland Sp. z.o.o. David Twomey, Executive Vice President, Group R&D and Region North America Juha Vatanen, President and CEO, Alteams (Suzhou) Ltd., Co.

Board of Directors of Alteams Oy

Arno Pelkonen, Chairman of the BoardMika HassinenRisto KuusakoskiTimo KuusakoskiPetteri Walldén

Board of Directors of Kuusakoski Oy

Veikko Kuusakoski, Chairman of the Board Pekka ErkkiläMikko KuusakoskiHarri NikunenJohan Viklund

President and CEO of Kuusakoski Oy

Mikko Kuusilehto, MSc (Eng)

Management Team of Recycling operations

Mikko Kuusilehto, CEO (Chairman)

Teuvo Kuusakoski, Business Director, Non-Ferrous

Timo Kuusakoski, Business Director, Metals

Tuomas Mantere, Director, Production

Martti Sinisalo, Business Director, Energy & Waste

Lauri Siukonen, CFO

Oskar Stavrén, Sales Director

Board of Directors of Kuusakoski Group Oy

Olli Vaartimo, Chairman of the BoardJohan KronbergVeikko KuusakoskiMariella Kuusakoski-ToivolaLauri Peltonen

Deputy members

Tapio KuusakoskiTiina Orasaari

President of Kuusakoski Group Oy

Veikko Kuusakoski, MSc (Law)

42

BOARD OF DIRECTORS OF KUUSAKOSKI GROUP OY

Mariella Kuusakoski-ToivolaCommercial College Graduate

Veikko KuusakoskiMSc (Law)

Olli VaartimoMSc (Econ), Chairman of the Board

Chairman of the Board ofBMH Technology Oy

Vice Chairman of the Board ofOutokumpu Oyj

Member of the Board ofSampo-Rosenlew OyBlack Bruin Oy

Lauri Peltonen MD, PhD

Vice Chairman of the Board ofMusic Institute Nurmijärvi

Johan KronbergMSc (Econ)

Member of the Board ofElomatic OyFoundation of Åbo Akademi UniversitySponsor Capital OyJaakko Taara OySilo AI OyNordic Business Group Oy

Tiina Orasaari BBA

Tapio Kuusakoski MSc (Econ)

Deputy members

Members

43

CONTACT INFORMATION

GROUP MANAGEMENT

Kuusakoski Group OyP.O. Box 25 / Metsänneidonkuja 12FI-02131 EspooT +358 20 781 [email protected]

RECYCLING OPERATIONS

Kuusakoski Oy Head OfficeP.O. Box 25 / Metsänneidonkuja 12FI-02131 EspooT +358 20 781 781 /switchboard

T +358 800 3 0880 /customer service

[email protected]

Finland

Espoo – KauklahtiP.O. Box 6 / Lasihytti 4FI- 02781 EspooT +358 20 781 7338

HeinolaP.O. Box 96 / Kuusakoskentie 2-5FI-18601 MyllyojaT +358 20 781 7441

Helsinki – KivikkoKivikonlaita 5FI-00941 HelsinkiT +358 20 781 7330

HyvinkääUudenkyläntie 28FI-05950 HyvinkääT +358 20 781 7077

ImatraPilarikuusenkatu 5FI-55610 ImatraT +358 20 781 7030

JoensuuLylykoskentie 35FI-80130 JoensuuT +358 20 781 7550

JyväskyläRuokomäentie 51FI-40530 JyväskyläT +358 20 781 7560

KajaaniNuaskatu 6FI-87400 KajaaniT +358 20 781 7580

KalajokiSatamatie 422FI-85180 RahjaT +358 20 781 7590

KotkaJänskäntie 9FI-48310 KotkaT +358 20 781 7622

Kuopio - AirakselaRomulantie 75FI-71490 AirakselaT +358 20 781 7500

Lahti - Ekopark LahtiNorokatu 5FI-15170 LahtiT +358 20 781 7144

Lahti - KujalaSapelikatu 8FI-15160 LahtiT/F +358 20 781 7699

LapuaKalliotie 1FI-62100 LapuaT +358 20 781 7718

OuluRuskonniityntie 4FI-90630 OuluT +358 20 781 7640

Pori - MäntyluotoMäntyluotoFI-28880 PoriT +358 20 781 7660

RaumaHitsaajantie 10FI-26820 RaumaT +358 20 781 7680

TampereLastikankatu 10FI-33730 TampereT +358 20 781 7700

TurkuRavurinkatu 32FI-20380 TurkuT +358 20 781 7720

Vantaa - SeutulaHanskalliontie 3FI-01760 VantaaT +358 20 781 7391

China

Office in Hong KongLevel 18, Wheelock House,20 Pedder Street,Central, Hong KongT +86 1350 180 [email protected]

Estonia

Kuusakoski ASHead OfficeBetooni 12EE-11415 TallinnT +372 6 258 600 /office

T +372 6 25 8666 /customer service

F +372 601 [email protected]

JõhviKaasiku 32Jõhvi valdEE-41541 Ida-VirumaaT +372 33 27 [email protected]

NarvaPuuvilla 21EE-20207 NarvaT +372 356 [email protected]

PaideMündi 49 (Paide jäätmejaam)EE-72719 PaideT +372 53 027 [email protected]

PaldiskiRae põik 14 Paldiski LõunasadamEE-76806 PaldiskiT +372 674 [email protected]

PärnuSavi 30EE-80010 PärnuT +372 443 [email protected]

RakvereRaua 2EE-44317 RakvereT +372 322 [email protected]

RaplaMäepere jäätmejaamÜlejõe küla, Rapla valdT +372 57 501 [email protected]

TartuTeguri 53EE-51013 TartuT +372 7 367 [email protected]

Viljandi Vaksali 44EE-71012 ViljandiT +372 43 49 [email protected]

VõruJaama 22EE-65604 VõruT + 372 78 200 [email protected]

Russia

Petromax JSCIndustrialnaya 9, LobnyaMoscow region, 141730T +7 (495) [email protected]

Sweden

Kuusakoski Sverige ABHead Office StockholmSpånga CenterStormbyvägen 2-4SE-163 29 SpångaT +46 20 566 566

Administrative OfficeSvedjevägen 6SE-931 36 SkellefteåT +46 20 566 566

GällivareExportvägen 8SE-982 38 GällivareT +46 970 137 61

GävleGävle hamn, FredriksskansSE-805 95 GävleT +46 26 123 702

44

KirunaLastvägen 39SE-981 38 KirunaT +46 980 144 60

LuleåCementvägen 3SE-973 45 LuleåT +46 920 248 240

LyckseleSandåsvägen 3SE-921 45 LyckseleT +46 950 104 75

OxelösundStegeluddenSE-613 31 OxelösundT +46 20 566 566

SkelleftehamnJärnvägsleden 91SE-932 33 SkelleftehamnT +46 020 566 566

Skellefteå Svedjevägen 6SE-931 36 SkellefteåT +46 910 711 788

Stockholm - SpångaBromstensvägen 176 SE-163 55 SpångaT +46 8 564 722 40

Sundsvall/TimråÅrvältsvägen 11SE-861 36 TimråT +46 60 515 580

UmeåTegelbruksvägen 5SE-907 42 UmeåT +46 90 708 890

Vetlanda/KorsbergaStockatorpSE-570 10 KorsbergaT +46 383 202 08

Taiwan

Mr. Alfred Huang 8F, No.5, Alley 93, Lane 189, Section 3,Kang Ning Road, Nei Hu, TW-11482, Taipei, Taiwan T +886 2 2632 8402 F +886 2 2632 8525 [email protected]

United Kingdom

Kuusakoski LtdCrown WorksFaraday RoadUK-S9 3XZ SheffieldT +44 1142 448 448F +44 1142 425 930

Sweeep Kuusakoski Ltd Gas RoadSittingbourneKentUK-ME10 2QBT +44 1795 434 125F +44 1795 479 [email protected]

USA

Kuusakoski US, LLC13543 S Route 30Plainfield, IL 60554, USAT +1 630 305 0922

Vintage Tech, LLC13543 S Route 30Plainfield, IL 60554, USAT +1 630 305 0922

900 Wheeler WayLanghorne, PA 19407, USAT +1 630 465 6818

Kuusakoski Glass Recycling, LLC2022 W. Townline RdPeoria, IL 60615, USAT +1 309 863 2457

FOUNDRY OPERATIONS

Alteams GroupHead Office/ Sales & Engineering OfficeP.O. Box 91 / Yritystie 1FI-40351 JyväskyläT +358 201 339 500F +358 201 339 [email protected]@alteams.com

Finland

Alteams Finland Oy, LaihiaLänsitie 61FI-66400 LaihiaT +358 201 339 500F +358 201 339 401

Alteams Finland Oy, Loppi Valutie 2FI-12701 LoppiT +358 201 339 500F +358 201 339 351

Alteams Finland Oy, RuovesiTeollisuuskuja 3FI-34600 RuovesiT +358 201 339 500F +358 201 339 381

China

Alteams (Suzhou) Co., Ltd.No. 388, Chao Hong RoadFengqiang Industrial ParkSuzhou New DistrictP.R. China 215129 T +86 512 6665 8400F +86 512 6665 8401

Alteams Hitech ToolsBuilding 12, 369 Lushan RoadSND NEPSuzhou, JiangsuP.R. China 215129T +86 512 6662 7500F +86 512 6662 7501

Estonia

Alteams Eesti OÜSales and Support OfficeVana-Lõuna 39/1-1210134 Tallinn, EstoniaT +372 6 209 570

India

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design and layout: mainostoimisto queens oy · mould castings. we expect mass production of 5g...

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