RAUTE CORPORATION FINANCIAL STATEMENTS RELEASE FEBRUARY 15, 2024, AT 9:00 A.M.
RAUTE CORPORATION FINANCIAL STATEMENTS RELEASE JANUARY 1-DECEMBER 31, 2023
This is a summary of Raute's Financial statements release January 1 - December 31, 2023. The full report is a PDF file attachment to this stock exchange release and is also available on the company's website at www.raute.com.
October-December 2023
- Order intake was EUR 118 million (28)
- Order book was EUR 266 million (84) at the end of the reporting period
- Net sales were EUR 45.2 million (45.7)
- Comparable EBITDA was EUR 2.7 million (2.7), representing 5.9% (5.8) of net sales
- Operating profit was EUR 0.7 million (0.5)
- Earnings per share were EUR 0.09 (0.32)
- Equity ratio was 50.2% (36.6)
January-December 2023
- Order intake was EUR 315 million (138)
- Net sales ware EUR 145.4 million (158.3)
- Comparable EBITDA was EUR 9.3 million (-2.3), representing 6.4% (-1.4) of net sales
- Operating profit was EUR 1.9 million (-14.6)
- Earnings per share were EUR 0.22 (-2.56)
- The Board of Directors' dividend proposal is EUR 0.10 per share.
Guidance statement for 2024:
Raute's 2024 net sales are expected to be between EUR 170 - 195 million and comparable EBITDA to be between EUR 10 - 14 million.
The Board's dividend proposal:
The Board of Directors of Raute Corporation proposes to the Annual General Meeting that EUR 0.10 per share be paid dividend.
1.10.-31.12. | 1.10.-31.12. | 1.1.-31.12. | 1.1.-31.12. | |
KEY FIGURES | 2023 | 2022 | 2023 | 2022 |
Net sales, MEUR | 45.2 | 45.7 | 145.4 | 158.3 |
Change in net sales, % | -1.1 | 3.6 | -8.2 | 11.3 |
Exported portion of net sales, % | 91.2 | 87.0 | 91.0 | 89.6 |
Comparable EBITDA M€ | 2.7 | 2.7 | 9.3 | -2.3 |
Comparable EBITDA % | 5.9 | 5.8 | 6.4 | -1.4 |
Operating profit, MEUR | 0.7 | 0.5 | 1.9 | -14.6 |
Operating profit, % of net sales | 1.5 | 1.3 | 1.3 | -9.2 |
Profit before taxes, MEUR | 0.5 | 1.3 | 1.8 | -13.8 |
Profit before taxes, % of net sales | 1.2 | 2.9 | 1.2 | -8.7 |
Profit for the period, MEUR | 0.7 | 1.4 | 1.4 | -11.5 |
Profit for the period, % of net sales | 1.5 | 3.1 | 0.9 | -7.3 |
Gross capital expenditure, MEUR | 1.1 | 0.9 | 4.5 | 6.6 |
% of net sales | 2.4 | 2.0 | 3.1 | 4.2 |
Research and development costs, MEUR | 1.4 | 1.8 | 5.2 | 6.3 |
% of net sales | 3.1 | 3.9 | 3.6 | 4.0 |
Order book, MEUR | 266 | 84 | 266 | 84 |
Order intake, MEUR | 118 | 28 | 315 | 138 |
Personnel, at the end of the period | 754 | 778 | ||
Personnel, effective, on average | 749 | 774 | ||
Personnel, on average | 754 | 829 |
Mika Saariaho, President and CEO: A year of significant changes ending with a record-high order book and exit from Russia
In 2023, Raute had a record-high order intake and order book in a challenging market environment. This great achievement underlines our position as a leading end-to-end partner in veneer, plywood and LVL production technologies. In 2023, we received four mill-sized orders in total and proceeded with the delivery of our first line to the solid wood production segment. Comparable EBITDA reached EUR 9.3 million, representing a margin of 6.4%. Profitability improved in line with our expectations from the exceptionally low level in the comparison year, partly thanks to the profitability improvement program.
In the fourth quarter, comparable EBITDA was EUR 2.7 million, representing a margin of 5.9%. The Analyzers and Services business units were able to increase their comparable EBITDA, driven by higher sales. Meanwhile, the Wood Processing business unit's comparable EBITDA was slightly below our expectations. During the quarter, costs were elevated due to development projects to implement our growth strategy, including initiatives to drive our ESG agenda.
Order intake in the fourth quarter reached a record-high EUR 118 million, including Raute's single biggest order in its history, a EUR 93 million contract from Metsä Wood's new LVL mill in Finland. The order intake also included after-sales services and modernization projects.
In the fourth quarter net sales amounted to EUR 45.2 million and were in line with the comparison figure of Q4/2022. Comparison period still included a relatively high share of sales from Russia. In addition, the structure of the order book is more weighted towards mill-sized projects that have longer delivery times and slower revenue recognition. We are pleased about the sales growth in the Analyzers and Services businesses.
Our new ERP system is now operational at our main unit in Nastola, and we have moved to a continuous development phase. The new ERP system is expected to bring improved efficiency in the coming years.
The fundamental demand for Raute's solutions excluding mill-sized projects remained at a reasonable level in 2023, even though the short-term market uncertainty has increased, impacting the demand for single production lines and spare parts. We have a strong position in complete mill-sized projects and there is continuous customer interest in these solutions over the business cycle, driven by sustainability needs.
The profitability improvement program was concluded as planned and we achieved the previously announced annual cost savings of EUR 4-5 million by the end of 2023. In addition, we terminated all the remaining Russian project agreements and decided to terminate our remaining service operations in Russia.
We will continue to implement our growth strategy with determination, including driving our ESG agenda and expanding our portfolio into new engineered wood product segments. We have also made changes to our Executive Board to ensure a strong focus on the deliveries of large projects and to boost our offering across businesses.
Our record high order book puts Raute in a good position to further develop our business and drive our growth strategy forward. I am confident that together with the Executive Board and our dedicated and skilled personnel we have a good year ahead of us.
BUSINESS ENVIRONMENT
Market situation in customer industries
The market remained uncertain in 2023. While inflation stabilized and slowed down during the year, increased interest rates and overall uncertainty in the global economy impacted on the market outlook, which was reflected in the demand for Raute's customers' products. The raw material availability started to limit customers' production volumes, especially due to the lack of Russian birch logs, which used to be an important raw material source before 2022. However, the fundamental demand for Raute's solutions was still at a reasonable level.
The slowdown of the construction market and elevated uncertainty in the global economy reduced the demand for softwood plywood, especially in the European and North American markets, and from the second half of the year onwards, also for hardwood plywood. Customer activity and interest in Raute's technology for mill-sized projects, modernizations and after-sales services have remained high. This trend is supported by customers' long-term capacity planning horizon, regardless of the current market situation. However, the demand for individual product lines slowed down, and the market slowdown was also visible in the demand for spare parts. During 2023, Raute received four major mill-sized orders worth about EUR 216 million in total.
The activity level of Raute's customers varied depending on the geographical location. The demand for other than mill-sized projects was modest in Europe (EMEA) and Latin America, relatively good in North America, and low in Asia-Pacific and China, which still suffered from a significantly weaker investment activity.
Customers' declining production volumes have impacted on the demand for spare parts. Also, demand for single-machine replacements or enhancements was low.
Order intake and order book
The order intake in 2023 amounted to EUR 315 million (138) including four mill-sized orders from Lumin, Latvijas Finieris, Thebault and Metsä Wood.
The order intake is composed of 65% (47%) from Europe, 15% (37%) from North America, 2% (8%) from Asia-Pacific and 19% (6%) from South America. Order intake in Wood Processing increased strongly against the previous year thanks to the mill-sized orders and has taken a significant relative share of the total in January-December 2023. Services and Analyzers also had a good order intake during the reporting period.
Net sales
Net sales in 2023 totaled EUR 145.4 million (158.3), showing a decrease of 8.2 percent from the comparison period with a higher share of sales from Russia. The decline was also driven by the structure of the order book being more weighted towards mill-sized projects that have longer delivery times and slower revenue recognition. In addition, inefficiencies caused by the implementation of the new ERP system had a negative impact on net sales.
Sales increased by 37.7% in Analyzers, while decreased 14.5% in Wood Processing and 7.7% in Services. Net sales included EUR 13.4 (32.6) million from the remaining Russian order book.
Europe accounted for 40% (43) of net sales, North America for 30% (24), South America for 15% (6), Asia-Pacific for 6% (6) and Russia for 9% (21). Russia's share of sales is based on the adjustments from renegotiations with customers and the limits set by the sanctions.
Result and profitability
Comparable EBITDA was EUR 9.3 million (-2.3), representing 6.4% (-1.4%) of net sales. The result was supported by the profitability improvement program. The comparison figure includes provisions related to the winding down of the Russian operations.
Comparable EBITDA improved in Analyzers and Wood Processing, while declined in Services.
EBITDA was EUR 6.8 million (-9.7). Items affecting comparability (IACs) in EBITDA totaled EUR 2.5 million (7.4) and mainly included costs related to the implementation of the new ERP system, the controlled wind-down of Russian operations, and changing factory location in China. IACs stemming from the ERP implementation are expected to be lower in the coming quarters as the system is now operational and has shifted to a continuous development phase at Raute's main Nastola site.
The operating profit was EUR 1.9 million (-14.6).
The result before taxes was EUR 1.8 million (-13.8). The result for the reporting period was EUR 1.4 million (-11.5). Earnings per share were EUR 0.22 (-2.56).
BOARD OF DIRECTORS' PROPOSAL CONCERNING PROFIT DISTRIBUTION
On December 31, 2023, the parent company Raute Corporation's distributable funds amounted to EUR 31,806,472.02.
The Board of Directors proposes to the Annual General Meeting, to be held on April 4, 2024, that a dividend of EUR 0.10 per share be paid for the financial year January 1 - December 31, 2023.
GUIDANCE STATEMENT FOR 2024
Raute's 2024 net sales are expected to be between EUR 170 - 195 million and comparable EBITDA to be between EUR 10 - 14 million.
RAUTE CORPORATION
Board of Directors
BRIEFING ON FEBRUARY 15, 2024, AT 2 P.M.:
A briefing will be organized for analysts, investors and the media on February 15, 2024, at 2 p.m. at Scandic Simonkenttä Hotel, Simonkatu 9, Helsinki. The financial statements release will be presented by President and CEO Mika Saariaho and CFO Ville Halttunen. The presentation will be in Finnish. The event can also be followed online via Teams. We will send a Teams link to those who have registered by email; registrations at ir@raute.com. The event will be recorded, and the recording can be viewed on Raute's website www.raute.com on February 19, 2024, at the latest.
FINANCIAL CALENDAR IN 2024
Raute will publish financial results in 2024 as follows:
- Interim report January - March on Friday May 3, 2024
- Half-year financial report January - June on Thursday August 8, 2024
- Interim report January - September on Thursday October 31, 2024.
Raute will publish the financial statements 2023 during week 8.
The annual report 2023 will be published on the company's website at www.raute.com no later than in the week beginning on March 4, 2024 (week 10).
The Annual General Meeting is planned to be held in Lahti on Thursday April 4, 2024, at 6 p.m. Raute's Board of Directors will convene the Meeting at a later date.
FURTHER INFORMATION:
Mr. Mika Saariaho, President and CEO, tel. +358 40 154 9393
Mr. Ville Halttunen, CFO, tel. +358 50 346 0868
DISTRIBUTION:
Nasdaq Helsinki Ltd, main media, www.raute.com
RAUTE IN BRIEF:
Raute is the partner to future-proof the wood industry. Our technologies cover different production processes with supporting digital and analytics solutions for engineered wood products. Additionally, we offer full-scale service concept ranging from spare parts to regular maintenance and modernizations. Our innovative hardware and software solutions are designed to support our customers' efficient consumption of natural resources. In mill-scale projects, Raute is a global market leader both in the plywood and LVL industries. Raute's head office and main production is located in Lahti, Finland. The company's other production plants are located in Kajaani, Finland, the Vancouver area of Canada, Changzhou, China, and in Pullman, WA, USA. Raute's net sales in 2023 were EUR 145.4 million. The Group's headcount at the end of 2023 was 754. More information about the company can be found at www.raute.com.
