Raute Oyj: Raute Corporation's interim report January 1-March 31, 2024: Good progress in project deliveries in challenging market environment
RAUTE CORPORATION, INTERIM REPORT, MAY 3, 2024, AT 09:00 A.M.
Raute Corporation's interim report January 1-March 31, 2024: Good progress in project deliveries in challenging market environment
This is a summary of Raute's Interim financial report January 1-March 31, 2024. The complete report is attached to this release as a pdf file and is also available on the company's' website at www.raute.com.
RAUTE CORPORATION - INTERIM REPORT JANUARY 1-MARCH 31, 2024
January−March 2024
- Order intake was EUR 36 million (67)
- Order book was EUR 259 million (121) at the end of the reporting period
- Net sales were EUR 44.7 million (36.8)
- Comparable EBITDA was EUR 3.0 million (2.8), representing 6.7% (7.7) of net sales
- Operating profit was EUR 1.5 million (0.9)
- Earnings per share were EUR 0.20 (0.10)
- Equity ratio was 49.7% (41.4)
KEY FIGURES 1.1.-31.3.2024 1.1.-31.3.2023 1.1. -31.12.2023
Net sales, MEUR 44.7 36.8 145.4
Change in net 21.4 -4.5 -8.2
sales, %
Comparable EBITDA, 3.0 2.8 9.3
MEUR
Comparable EBITDA, 6.7 7.7 6.4
%
Operating profit, 1.5 0.9 1.9
MEUR
Operating profit, 3.3 2.3 1.3
% of net sales
Profit for the 1.3 0.8 1.4
period, MEUR
Profit for the 2.8 2.2 0.9
period, % of net
sales
Gross capital 0.4 0.9 4.5
expenditure, MEUR
% of net sales 0.9 2.4 3.1
Research and 1.4 1.3 5.2
development costs,
MEUR
% of net sales 3.2 3.5 3.6
Order book, MEUR 259 121 266
Order intake, MEUR 36 67 315
Personnel, at the 775 733 754
end of the period
Personnel, 772 707 749
effective, on
average
Personnel, on 770 751 754
average
President and CEO Mika Saariaho: Solid start for the year in Wood Processing and Services business units
We had a good start to the year with solid progress in project deliveries supported by our all-time high order book. However, the market environment remained uncertain as many of our customers were in a wait-and-see mode in relation to making firm investment decisions.
In the first quarter, comparable EBITDA developed in line with our expectations and was EUR 3.0 million, representing a margin of 6.7%. The result indicates improved efficiency of the underlying operations while considering that the comparison figure was positively impacted by the release of provisions related to the wind-down of the Russian operations.
I am particularly pleased with the performance of the Services business unit, where we have also developed a concept for performance-based maintenance offering. In the first quarter, we announced an agreement with Paged Group of Estonia. It is an excellent example of this concept, where we take full maintenance responsibility for the customer's production machinery, including spare parts, small upgrades, and process improvement work, to support the customer in ensuring optimized production.
The Wood Processing business also improved its performance by making good progress in the project deliveries of the mill-sized orders won last year. Meanwhile, Analyzers had a disappointing quarter due to the timing and delays of some deliveries. On the Group level, our costs were at a more normalized level after being elevated in the last quarter of 2023.
The political strikes in Finland had an impact on the operations of our main production site in Lahti. With good preparations we were able to mitigate the impacts of the strikes for the most part. However, there still was some negative impact on net sales and profitability.
Order intake in the first quarter was rather modest, excluding the mill-sized order received from Latvia's AmberBirch, and mainly consisted of service and modernization projects. Nevertheless, we can be very happy to have received yet another complete mill-sized order. This continues to demonstrate our strong offering and the continuous customer interest in these solutions over the business cycle, driven by sustainability needs.
Given our nearly record-high order book, we are in a good position to continue implementing Raute's growth strategy. We believe that Raute has a unique opportunity to capture new business opportunities in engineered wood product segments by combining our offering into innovative production solutions, powered by data and digital tools. In line with our newly announced values, we aim to Show the Way - Drive Change for positive development in our industry together with our customers. We will do this together as one team with our dedicated and skilled personnel.
BUSINESS ENVIRONMENT
The market uncertainty continued in January-March 2024. Although some weak signals of a slowly improving market sentiment might be seen, especially the demand for both hardwood and softwood plywood was at a modest level and pricing under pressure. The demand for LVL has remained more stable. This was reflected in the demand for Raute's customers' products.
While inflation has stabilized, the high interest rates and the overall economic uncertainty have slowed down the demand for the traditional end-product consuming industries such as construction and commercial vehicle production. Also, illegal Russian birch plywood with clearly lower prices entering the European market despite the sanctions affects the European birch plywood producers.
The impact of the lower end-product demand is clearly visible in Raute's customers' investment activity, which is mainly focusing on keeping the existing production facilities running. While this supports Raute's after-sales business, it clearly has a negative impact on the demand for new production lines and modernizations.
The highlight of the first quarter for Raute was the EUR 20 million order for a greenfield veneer mill machinery from AmberBirch in Latvia. This is again a good example of a long-term Raute customer investing in increasing their production capacity over the economic cycles.
GUIDANCE STATEMENT FOR 2024
Raute reiterates its guidance statement for 2024. Raute's 2024 net sales are expected to be between EUR 170-195 million and comparable EBITDA between EUR 10-14 million.
RAUTE CORPORATION
Board of Directors
BRIEFING
A briefing is organized for analysts, investors, and the media on May 3, 2024, at 2:00 p.m. at Scandic Simonkenttä Hotel, Simonkatu 9, Helsinki, Finland. The report is presented by President and CEO Mika Saariaho and CFO Ville Halttunen. The presentation language is Finnish. The event can also be followed online via Teams. Link will be sent 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 at www.raute.com on May 7, 2024, at the latest.
NEXT INTERIM REPORT:
Raute Corporation's half-year financial report January 1-June 30, 2024, will be published on Thursday August 8, 2024.
FURTHER INFORMATION:
Mr. Mika Saariaho, President and CEO, tel. +358 40 154 9393
Mr. Ville Halttunen, CFO, tel. +358 50 3460868
DISTRIBUTION:
Nasdaq Helsinki Ltd, Main media, www.raute.com
RAUTE IN BRIEF - Making Wood Matter
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 a 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 plant are 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.