Year 2018


Sales revenue, net and operating profits

Sales revenue

2018 - EVENTS, ACKNOWLEDGEMENTS AND AWARDS

Harju Elekter celebrated its 50th anniversary of operation throughout 2018. On 1 February, AS Harju Elekter Elektrotehnika opened its new modern factory in Keila Industrial Park. In the new factory, nearly 3,000 substations and distribution devices were assembled in the financial year, of which over 80% were exported. In May, the company's sporty clients and partners were invited to Energiagolf, which took place for the tenth time. The Group's Finnish companies also celebrated their anniversaries, gathering in Pori Jazz in July: Telesilta Oy turned 40, Satmatic Oy 30 and Finnkumu Oy 15 years old. AS Harju Elekter Teletehnika celebrated its twentieth year of operation as a Group’s subsidiary by launching an innovative robot line in September and the Lithuanian subsidiary RIFAS UAB, which has been operating in the Group for 25 years, placed a cornerstone in the autumn for a factory expansion that will be completed by mid-2019. A festive closing of the jubilee year took place on 14 December at the Tallinn University of Technology.

Acknowledgements and awards
The Estonian Chamber of Commerce and Industry recognised the most competitive companies of Estonia, ranking AS Harju Elekter first in the field of industry and energy and second in the large enterprises category. The awards have been given out since 2003 to recognise the best companies in Estonia, to value their role in society and to promote entrepreneurship. The calculation is based on two years of economic activity indicators: sales revenue, net profit, labour costs, investments in non-current assets, equity, number of employees.

At the end of November, business magazine Äripäev presented Estonia's top-ranking companies, including the best in counties, where AS Harju Elekter was ranked first among Harju County’s most successful companies and the runner-up in the Äripäev TOP100 among all Estonian companies. The ranking is compiled on the basis of the economic results of the previous year published in the commercial register. In 25 years, a total of 17 companies have had the pleasure of being ranked the most successful company in Estonia.

At the Estonian Association of Electrical Enterprises (EAEE) autumn conference, the Association’s best were announced and for the first time in the history of the Association two companies out of EAEE’s TOP3 belonged in the same group. First place was awarded to AS Harju Elekter Elektrotehnika, while AS Harju Elekter was the runner-up. The ranking was compiled on the basis of the previous year’s annual report and results.

In 2018, AS Harju Elekter Elektrotehnika was declared by Elenia Oy to be worthy of the title "Best Quality Products".

At the beginning of the year, Keila Industrial Park quality managers gathered for the first quality management development round table, which became a regular meeting of quality managers pursuing a common goal. Together they keep the importance of quality, environmental and occupational safety issues in the forefront, while a common approach to similar issues provides a better overview of the opportunities and threats. The Estonian Quality Association conferred upon Keila Industrial City’s quality managers venture the “Quality Deed 2018” award.

In November, Harju Business and Development Centre Competition revealed Harju County's 2018 performers in different categories, and AS Harju Elekter was awarded by the Harju County Health Council the title of Health Promoter of the Year for organising the walking competition Energialaks (Eng. Energy Boost).

Events
In 2018, AS Harju Elekter Elektrotehnika signed several supply contracts with Finnish, Swedish and Estonian electricity network companies. With Finland’s largest electricity network company Caruna Oy, an agreement was signed with an approximate volume of 5 million euros for low voltage metering cabinets and metering cabinets supply for 2+1+1 years and the supply contract for substations concluded in 2016 was renewed by two years to 2020. With Sweden’s largest distribution network operator E.ON Energidistribution AB, a 3-year framework contract was signed for more than 2,000 substations supply to Sweden and with Elektrilevi OÜ a 5-year contract with a total volume of 2.25 million euros for 250 kVA substations supply to Estonia was made. In addition, the subsidiary also won the procurement of the Ellevio substations in Sweden, where the total volume of the 3-year contract is approximately 3 million euros.

Year-long active investment in the production and technology modernisation in the Group was culminated by the festive opening of an FMS automatic line in the subsidiary AS Harju Elekter Teletehnika in September 2018. The launch of the robotic production line will help to increase the capacity of the factory to produce a steady flow of small and large batches, thus steeply increasing the factory's productivity and bringing the Group's production to the level of a smart factory or Industry 4.0. Together with the renovation work, which increased the production area of the subsidiary to around 9,000 m2, the investments totalled 3 million euros.

AS Harju Elekter purchased in the third quarter 2,7 ha commercial and industrial land on the land plot adjacent to Keila Industrial Park for the development of industrial real estate and business expansion.

In August 2017, AS Stera Saue opened a new factory in the Allika Industrial Park, owned by AS Harju Elekter, with a production area of 3,400 m2. In 2018, Harju Elekter continued the second and third stage building for Stera, and new production areas of 4,000 m2 and 3,000 m2 accordingly were accounted for. Total production space rented to Stera increased to 10,400 m2.

In August, the Lithuanian subsidiary of Harju Elekter - RIFAS UAB concluded a contract to expand its production building in Panevežys. Construction work began in September and after completion of the works in 2019, the office and production area of the Lithuanian subsidiary will increase from current
3,500 m2 to 9,000 m2. Investments in expanding production facilities and technology upgrades will allow to significantly increase production capacity to secure supply to the subsidiary's customers in shipbuilding and industry segment. The investments total volume is 3.5 million euros.

AS Harju Elekter constructed a solar power plant in Haapsalu, and this is the first of its kind for the company. The solar power plant is located on a few hectares of land. In total, over 2,700 panels were installed at Haapsalu Station, capacity of the plant at 794 kilowatts.

AS Harju Elekter Elektrotehnika opened its new factory in Keila Industrial Park in February. Due to several large orders, the Group’s subsidiary, manufacturer of LV/MV distribution and automation devices, experienced significant growth in its production volume during the year, which resulted in the need to expand the working premises. In comparison with the previous 10,400 m2, the new factory has 16,715 m2 of space. The increase in production capacity, along with the growth in the number of employees to 251, including 40 sales, production and product development engineers, is initially sufficient to fulfil orders.

On January 8, 2018, the transaction entered into force for the acquisition of all the shares of the Swedish company SEBAB AB, a provider of sales and technical solutions, and its sister company Grytek AB, a manufacturer of pre-fabricated technical buildings, by AS Harju Elekter. SEBAB AB specializes in the development and supply of medium and low voltage solutions for power distribution to the infrastructure, construction and renewable energy sectors. The acquired companies will continue as the Group's 100% subsidiaries.

On May 3, 2018, the annual general meeting of the shareholders of AS Harju Elekter approved the annual report of 2017 and the profit distribution proposal, appointed company’s auditor for years 2018-2020 as AS PricewaterhouseCoopers and approved the key persons stock option program for AS Harju Elekter and its group companies.

During the reporting year, the Group's subsidiaries participated actively in trade fairs in Finland, Sweden and Estonia: electricity fair Sähkö Tele Valo AV 2018 in Jyväskylä, Alihankinta fair in Tampere, EBR fair in Falun, international construction fair in Estonia Builds in Tallinn and Maamess in Tartu.

Events after the reporting date
AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, received an order for 54 special purpose substations to be supplied to Konecranes during the year. Supplies are sent to the United Arab Emirates.