Raute Corporation’s half-year financial report January 1–June 30, 2024: All-time high quarterly net sales with good profitability development

RAUTE CORPORATION, HALF-YEAR FINANCIAL REPORT, AUGUST 8, 2024, AT 08:45 A.M.

Raute Corporation’s half-year financial report January 1–June 30, 2024: All-time high quarterly net sales with good profitability development

This is a summary of Raute’s half-year financial report January 1–June 30, 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 – HALF-YEAR FINANCIAL REPORT JANUARY 1–JUNE 30, 2024

April−June 2024

-          Order intake was EUR 20 million (112)

-          Order book was EUR 223 million (202) at the end of the reporting period

-          Net sales were EUR 57.1 million (29.3)

-          Comparable EBITDA was EUR 5.4 million (0.7), representing 9.4% (2.5%) of net sales

-          Operating profit was EUR 3.9 million (-1.0)

-          Earnings per share were EUR 0.56 (-0.15)

-          Equity ratio was 48.5% (57.0%)

January−June 2024

-          Order intake was EUR 56 million (179)

-          Net sales were EUR 101.7 million (66.2)

-          Comparable EBITDA was EUR 8.4 million (3.6), representing 8.2% (5.4%) of net sales

-          Operating profit was EUR 5.4 million (-0.2)

-          Earnings per share were EUR 0.76 (-0.07)

President and CEO Mika Saariaho: Continued solid progress in project deliveries and services

I’m pleased with our performance in the second quarter. Raute's project deliveries and Services business have progressed well, which has led to all-time high net sales realization and good profitability development. 

The market environment remained challenging as many of our customers continued to be in a wait-and-see mode in relation to making firm investment decisions. As a result, our order intake was still rather modest, with the exception of the Services business as a bright spot. However, our strong order book provides a good buffer in the current uncertain business environment.

In the second quarter, comparable EBITDA developed above our expectations and was EUR 5.4 million, representing a margin of 9.4%. The result highlights the improved efficiency of our operations as we made solid progress in project deliveries and achieved all-time high quarterly net sales. Consequently, in June we raised our guidance for net sales and comparable EBITDA for 2024. 

The Wood Processing business continued to improve its performance by making good progress in the project deliveries of mill-sized orders won last year. The Services business also performed well, supported by relatively good order intake. In addition, our performance-based service concept, where we take full maintenance responsibility for the customer’s production machinery, is gaining traction. The Analyzers business managed to return to a profit after a loss-making first quarter. We continue to believe in the potential of our Analyzers business supported by new innovations coming to market.

The recent performance demonstrates that we are making good progress towards our long-term financial targets. The profitability of our existing orderbook is improving and we have the capabilities to deliver large projects successfully. Digitalization and increasing sustainability and resource efficiency focus continues to create new opportunities for Raute in the wider engineered wood products segments. Overall, we are in a good position to continue implementing Raute’s growth strategy.

BUSINESS ENVIRONMENT

The end-user market uncertainty in engineered wood products continued in the first half of 2024. Some weak signals of a slowly improving market sentiment can be seen. The demand for both hardwood and softwood plywood has stabilized or even somewhat improved during the period. However, the pricing of the end products continues to be under pressure. The demand for LVL has remained more stable over the cycles.

While inflation has stabilized, the high interest rates, the overall economic uncertainty and geopolitical instability have slowed down the demand for the traditional end-product consuming industries such as construction and commercial vehicle production. The EU actions to stop the import of illegal Russian birch plywood with clearly lower prices to European market have helped the European birch plywood producers.

The impact of the low end-product demand is clearly visible in Raute’s customers’ investment activity, which is geared towards improving their production efficiency by preventive maintenance activities supported by our expert services and site audits. We have also seen increasing interest among our customers to invest in those manufacturing technologies which enable higher automation levels and savings in manpower. In addition, there continues to be interest among our customers in strategic investments to increase their production capacity over the economic cycles.

The highlight of the first half for Raute was the EUR 20 million order for a greenfield veneer mill machinery from AmberBirch in Latvia. Apart from the AmberBirch order, Raute’s order intake mainly comprised service and modernization projects.

GUIDANCE STATEMENT FOR 2024 (updated on June 19, 2024)

Raute’s 2024 net sales are expected to be between EUR 185–210 million and comparable EBITDA between EUR 13–17 million.

Rationale for the new guidance

Raute’s strong order backlog has supported the positive business development despite the continued challenging market environment. Raute's project deliveries and Services business have progressed better than anticipated, which led to positive net sales and profit development during the second quarter. Therefore, Raute raised its guidance for both net sales and profit for the full year.

Previous guidance statement

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 August 8, 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 August 12, 2024, at the latest.

NEXT INTERIM REPORT:
Raute Corporation’s interim report January 1-September 30, 2024, will be published on Thursday, October 31, 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.