HONKARAKENNE OYJ HALF YEAR FINANCIAL REPORT, 1 JANUARY – 30 JUNE 2021

HONKARAKENNE OYJ                   HALF YEAR FINANCIAL REPORT 26 August 2021   at 9:00 a.m.

HONKARAKENNE OYJ HALF YEAR FINANCIAL REPORT, 1 JANUARY – 30 JUNE 2021

SIGNIFICANT INCREASES IN NET SALES AND OPERATING PROFIT, ORDER BOOK HISTORICALLY LARGE

Net sales for the first half of 2021 increased by 31 per cent to EUR 29.6 million (H1 2020: EUR 22.6 million). Both operating profit and profit before taxes improved significantly from the previous year. Operating profit increased by 70 per cent to EUR 1.7 million (EUR 1.0 million). Profit before taxes increased by 69 per cent to EUR 1.7 million (EUR 1.0 million).

January–June 2021

• Honkarakenne Group’s net sales for the January–June period were EUR 29.6 million
  (H1 2020: EUR 22.6 million). Net sales increased by 31 per cent compared to the corresponding period of the previous year.
• The operating profit and adjusted operating profit were EUR 1.7 million (1.0).
• Profit before taxes was EUR 1.7 million (1.0).
• Earnings per share were EUR 0.25 (0.12).

Honkarakenne’s performance guidance for 2021 remains unchanged.

Honkarakenne forecasts that net sales will increase in 2021 and profit before taxes will be higher than in 2020.

At the end of June, the group’s order book was historically high, at EUR 60.5 million, compared to EUR 29.2 million in the corresponding period of the previous year. At the end of June, the order book was 107 per cent higher than the previous year.

Since the Covid-19 pandemic began, the group has taken special measures in all its operations to ensure the safety of its personnel and the continuity of production and services. Despite the pandemic, Honka’s operational and customer service capabilities have remained at almost normal levels.

Unless otherwise stated, figures in brackets refer to the corresponding period in the previous year.

KEY INDICATORS	1.1.-30.6.2021	1.1.-30.6.2020	1.1.-31.12.2020
Revenue, MEUR	29.6	22.6	52.9
Operating profit/loss, MEUR	1.7	1.0	3.1
Adjusted operating profit/loss, MEUR	1.7	1.0	3.4
Profit/loss before taxes, MEUR	1.7	1.0	2.9
Adjusted profit/loss before taxes, MEUR	1.7	1.0	3.2
Average number of personnel	176	166	168
Personnel in person-years, average	168	145	153
Earnings/share (EPS), EUR	0.25	0.12	0.48
Equity ratio, %	53	52	56
Return on equity, %	10	5	21
Equity/share, EUR	2.56	2.15	2.49
Gearing, %	-64	10	-23

Marko Saarelainen, President and CEO of Honkarakenne Oyj, in connection with the half year financial report:

“Despite the pandemic, Honkarakenne’s sales have developed very well. This is particularly evident in the historically high order book. As a building material, logs are a popular choice not only for cabins and other leisure facilities and detached houses, but also in the construction of nursing homes, daycare centres and schools. They are also a popular choice for larger residential and regional construction projects. The order book at the end of the period under review was excellent, at over EUR 60 million. This is 107 per cent higher than in the corresponding period in the previous year, and more than EUR 20 million higher than at the turn of the year.

The global commodity market has experienced exceptional times during the period under review. There are beginning to be significant difficulties with the availability of raw materials in more and more industries. There has been an undersupply of wood raw material and other building materials in Finland also. The shortage of raw materials caused by the pandemic has caused problems for production, and led to the postponement of some deliveries for several weeks during the spring and summer of this year. The continuing shortage of wood raw materials will also partly affect deliveries for the rest of the year. The sharp rise in the prices of raw materials is lessening profitability in the sector.

Net sales increased significantly in Finland, and were 36 per cent above the corresponding period in the previous year. Sales of detached houses have increased, and the renovated leisure collections in particular have been in demand. Honka’s sales network has been strengthened in Finland, leading to improved regional reach.

Honka’s range has been renewed to reflect international trends and market-specific customer understanding. The new models in the range include modern detached houses, summer cabins with a nostalgic feel, and eye-catching second homes. Some of the models have all the modern conveniences, large landscape windows and offer a close connection to nature, and the range also includes traditional summer cabins updated with modern features.

In exports, net sales were positive for the period, being 18 per cent above the previous year. The difficulties with availability in the global raw material market during the period under review also affected export deliveries and have led to longer delivery times. Logistics problems, such as the availability of sea containers and turbulence in freight prices, have also contributed to making sales work more difficult and delaying the start of customer projects. The negative effects of the pandemic continued, especially in Asia, where intermittent lockdowns and restrictions on mobility severely hampered trade. In Russia, sales have developed positively and demand has clearly increased. Deliveries of a few export projects were also well underway at the end of the first half of the year. Overall, demand in the export markets has been active despite the pandemic, and the order book was increasing markedly at the end of June.

In Japan, we completed the reorganisation of the local subsidiary during the period under review and held sales days for the distribution network at the end of June. The organisation of the rest of Asia will continue during the remainder of 2021.

During the period under review, we have sought several new recruits to strengthen the organisation and gain further expertise for Honka’s various activities. These include design, human resources, ICT, construction services, project operations and sales management. The final searches will be completed during the autumn, and the organisation as a whole will be confirmed by the end of this year.”

NET SALES

The group’s net sales in the second half of 2021 increased by 31 per cent, to EUR 29.6 million (22.6).

Honkarakenne presents its set sales data in two parts: Finland and exports. The net sales data for the first half of 2021 and the comparison year are presented below.

Geographical distribution of revenue:
Distribution of revenue, %	1.1.-30.6.2021	1.1.-30.6.2020	1.1.-31.12.2020
Finland	74	71	70
Export	26	29	30
Total	100	100	100
Revenue, MEUR	1.1.-30.6.2021	1.1.-30.6.2020	change %
Finland	21.9	16.1	36
Export	7.7	6.5	18
Total	29.6	22.6	31
Revenue, MEUR	1.7.-31.12.2020	1.1.-31.12.2020
Finland	20.8	36.9
Export	9.5	16.0
Total	30.3	52,9

Finland also includes billet sales and the sale of process byproducts for recycling.

Exports include all other countries except Finland.

ORDER BOOK

At the end of June, the group’s order book was historically high, at EUR 60.5 million, compared to EUR 29.2 million in the corresponding period of the previous year. At the end of June, the order book was 107 per cent higher than the previous year. Order book means orders with a delivery date within the next 24 months. Some orders may include a financing or building permit condition.

TRENDS IN PROFIT AND PROFITABILITY

The group’s operating profit and profit before taxes improved significantly compared to the previous year. The operating profit for the July–December period was EUR 1.7 million (1.0), and the profit before taxes was EUR 1.7 million (1.0). There were no adjustment items during this period under review or in the previous year. Profit development and profitability have improved due to the increase in net sales in Finland and Russia. At the end of the review period, profitability began to be affected by rising raw material prices and disruptions due to problems with the availability of raw materials.

FINANCING AND INVESTMENTS

Honkarakenne’s financial position at the end of the period under review was strong, with the group’s equity ratio being 53% (52%). Gearing was negative, at -64% (-10%). The group’s total net financial liabilities were EUR -9.6 (-1.2) million – that is, the group’s liquid assets exceeded its financial liabilities. The group’s liquid assets were EUR 13.0 million (3.7). In addition, the group has an overdraft facility of EUR 3.0 million (4.5), which was not in use at the end of the period under review nor in the previous year.

The group’s gross investments were EUR 0.9 million (2.2), excluding right-of-use assets in accordance with the IFRS 16 standard. Investments during the period under review mainly focussed on completion of the commissioning of the Karstula mill’s log line and production transport equipment.

PRODUCTS AND MARKET AREAS

In Finland, net sales developed excellently and were 36 per cent higher than in the corresponding period in the previous year. Sales growth and demand remained particularly strong in leisure building construction. Growth in the sale of detached houses has been positive, and there is growing demand for the new range. In project construction, there is especially high demand for nursing home and daycare centre construction, and also in residential and regional construction demand is particularly high in the construction of leisure centres.

Honka’s product range was renewed on the basis of international trends and market-specific customer understanding. The new models in the range include modern detached houses, summer cabins with a nostalgic feel, and eye-catching second homes. Some customers are looking for modern buildings with all the modern conveniences, large landscape windows and a close connection to nature as part of the lifestyle that Honka’s Lux range represents. Others are nostalgic for the summer cabin landscapes of their childhood and a different kind of closeness to nature. They are more interested in revivalist styles and in tradition.”

Due to intense demand and partly also to supply chain difficulties, delivery times are longer than normal. In the future, the increase in demand may also be slowed by higher raw material costs for larger leisure buildings, detached houses and project construction.

In exports, net sales developed positively and were 18 per cent higher than last year. Availability problems in the global raw material market in the second half of the period under review also affected export deliveries and contributed to longer delivery times. In terms of sales, the Covid-19 pandemic continued to have a negative impact, especially in Asia, where intermittent lockdowns and restrictions on mobility severely hampered trade. Demand in Europe and partly in Asia began to show signs of recovery towards the end of the period under review. In Russia, sales have developed positively and demand has clearly increased. A number of project site deliveries got off to a good start at the end of the first half of the year. In general, there has been active demand in the export markets despite the pandemic. In exports, the order book at the end of June was significantly higher than in the previous year.

THE SEASONAL NATURE OF OUR BUSINESS

Honkarakenne operates in a business that is seasonal by nature. Especially in Finland, construction mostly takes place during summer, so there are more deliveries in summer and autumn than during the winter. Taking into account the existing market and demand conditions, the company aims to even out this seasonality with various marketing measures.

RESEARCH AND DEVELOPMENT

The group’s research and development expenses totalled EUR 0.2 million in January–June (0.1), corresponding to 0.7% (0.5%) of net sales. Research and development continued to focus on log structures suitable for larger buildings in particular. One of the objectives of Honkarakenne’s project for public and large buildings is to increase the use of wood in construction to reach environmental targets. Wood construction is part of sustainable use of forests. The group has not activated development expenses during the review period.

PERSONNEL

Thanks to recruiting, the number of personnel increased during the first half of the year, especially within production and support personnel. The group has been and is still recruiting people to strengthen the organisation in terms of design, human resources, ICT, construction services, project work and sales. The group’s average number of personnel, measured in terms of person-workyears, totalled 168 (145). The group’s average number of personnel, measured in terms of the number of employment relationships, totalled 176 (166).

EXECUTIVE GROUP

There was a change in the Executive Group as Leena Aalto left the company. There were no other changes to the Executive Group. The Honkarakenne Executive Group consists of the following: CEO Marko Saarelainen; CFO Leena Aalto (until 28 February 2021); Juha-Matti Hanhikoski, Vice President, Production; Sanna Huovinen, Vice President, Marketing; and CFO Maarit Jylhä (as of 1 June 2021).

HONKARAKENNE OYJ’S ANNUAL GENERAL MEETING, BOARD OF DIRECTORS, AND AUDITORS

Honkarakenne Ltd’s annual general meeting was held at the company’s Tuusula office on 16 April 2021. The AGM adopted the financial statements of the parent company and group, and discharged the Board members and CEO from liability regarding 2020. The AGM decided that no dividend will be paid for the financial year that ended on 31 December 2020. The AGM also decided that a repayment of capital of EUR 0.18 per share be distributed from the unrestricted equity fund.

Timo Kohtamäki, Kari Saarelainen and Kyösti Saarimäki were re-elected as Board members, with Arto Halonen and Maria Ristola as new members. The Board’s organising meeting elected Kyösti Saarimäki as the chair. At the same meeting, the Board decided that no committees will be established.

Audit firm Ernst & Young Oy was re-elected as the company's auditor, with Elina Laitinen, APA, as the principal auditor.

AUTHORISATIONS OF THE BOARD OF DIRECTORS

The AGM decided on 16 April 2021that the Board is authorised to buy a total of 400,000 of the company’s class B shares with its unrestricted equity capital. The Annual General Meeting also authorised the Board of Directors to decide on a share issue, either against payment or free of charge, and the issuance of special rights entitling to shares referred to in Chapter 10, Section 1 of the Limited Liability Companies Act, in one or more instalments. Pursuant to the authorisation, the Board of Directors may issue new shares and/or dispose of a maximum of 1,500,000 of the old class B held by the company, including those shares that may be issued under special rights. Both authorisations shall be valid until the next Annual General Meeting, but expire on 30 June 2022 at the latest.

SHARES, SHARE CAPITAL AND OWN SHARES

During the review period, Honkarakenne Ltd’s shares numbered 6,211,419, of which 300,096 were class A shares and 5,911,323 class B shares. The company’s share capital has not changed, remaining at EUR 9,897,936.00. Each class B share entitles to one vote and a class A share to 20 votes, bringing to total number of votes conferred by the shares during the review period to 11,913,243.

Honkarakenne’s class B shares are listed on NASDAQ OMX Helsinki Oy’s Small Cap list with the ticker symbol HONBS. The highest price of the listed class B share was EUR 8.48, lowest EUR 4.11, and the closing price at the end of the review period was EUR 7.02. The trading value of class B shares was EUR 17.4 million and the trading volume 2.7 million shares.

Honkarakenne transferred 10,000 class B shares to the CEO in June as part of the 2020 bonus. At the end of the review period, the group held 339,385 of its own class B shares, with a purchase price of EUR 1,264,758.66. The Group owns 5.46% of its own shares, and 2.85% of the votes. The acquisition price of its own shares is entered in the consolidated financial statements to reduce the equity.

FLAGGINGS

During the review period, Honkarakenne received a notification, pursuant to chapter 9, section 5 of the Securities Markets Act, stating that on 26 March 2021 the number of votes conferred by shares owned by Saarelainen Oy had risen to 25.75%.

CORPORATE GOVERNANCE

Honkarakenne Ltd adheres to the Corporate Governance of listed Finnish companies issued by the Suomen Arvopaperimarkkinayhdistys ry in 2020. For more information about the corporate governance matters, go to www.honka.fi.

NEAR-TERM RISKS AND UNCERTAINTIES

Demand for Honkarakenne’s products is closely linked to general economic developments, exchange rates, consumer confidence, and competition in the industry. If demand falls sharply, it may have significant effects on the company’s profit performance.

The Covid pandemic continues to cause uncertainty in all of the company’s market areas. The duration and various effects of uncertainty caused by the pandemic is difficult to estimate. If prolonged, the pandemic may affect Honkarakenne’s business operations significantly in the form of high raw material prices and possible disruptions in the distribution chain.

The valuation of items in the balance sheet are based on current estimates. Any changes to these may affect the company’s financial performance.

EVENTS AFTER THE REVIEW PERIOD

Honkarakenne does not have any significant events after the review period to report on.

REPORTING

This report contains statements that relate to the future, and these statements are based on hypotheses that the company's management hold currently as well as on the decisions and plans that are currently in place. Although the management believes that the hypotheses relating to the future are well-founded, there is no guarantee that the said hypotheses will prove to be correct.

This half-year financial report has been drafted in accordance with IAS 34. The half-year financial report should be read together with the 2020 financial statements. This half-year financial report has been drafted in accordance with the same accounting principles applied in the 2020 financial statements, with the exception of standards and interpretations that have come into force on 1 January 2021 or thereafter. The new standards or interpretations effective as of 1 January 2021 did not have a material impact on the figures presented for the review period.

The half-year financial report has not been audited and the figures have not been examined by the auditor.

Figures in parentheses refer to the corresponding period of the previous year, unless stated otherwise.

Honkarakenne complies with the Guidelines on Alternative Performance Measures (APM) issued by the European Securities and Markets Authority (ESMA).  An APM is a financial measure of performance other than a financial measure defined or specified in IFRS. For this reason, the term “adjusted” is used instead of “without non-recurring items”. As adjustment items, the company classifies significant business transactions that are considered to affect comparisons between different reporting periods. Such transactions include significant reorganisation expenses, significant impairment losses or reversals thereof, significant capital gains and losses on assets, and other significant non-customary income or expenses.

OUTLOOK FOR 2021

Honkarakenne’s performance guidance for 2021 remains unchanged.

Honkarakenne’s outlook is that revenue (net sales) will increase in 2021 and profit before taxes will be higher than in the previous year.

GROUNDS FOR THE OUTLOOK

The company's view of developments in 2021 is based on the existing order book and its view of production costs development, as well as the development measures taken in the company.

HONKARAKENNE OYJ

Board of Directors

Further information:
Marko Saarelainen, President and CEO, tel. +358 (0)40 542 0254, [email protected] or
Maarit Jylhä, Vice President - Finance, CFO, tel. +358 (0)40 594 4099, [email protected]

This and previous releases are available for viewing on the company’s website at www.honka.com.

DISTRIBUTION
NASDAQ OMX Helsinki
Key media
Financial Supervisory Authority
www.honka.com

detached houses, holiday homes and public buildings using Finnish solid wood. The company has delivered 85,000 buildings to more than 50 countries. House packages are made in Finland, the companys’s own factory is located in Karstula, Finland. In 2019, the Honkarakenne Group had revenue (net sales) of MEUR 52.9, of which exports accounted for 30%. www.honka.com

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited	1.1.-30.6.2021	1.1.-30.6.2020	1.1.-31.12.2020
MEUR
Revenue	29.6	22.6	52.9
Other operating income	0.3	0.2	0.5
Change in inventories	1.8	0.9	0.1
Materials and services	-21.4	-14.9	-34.6
Employee benefit expenses	-5.0	-4.3	-9.3
Depreciations, amortisation and impairment	-1.1	-0.9	-1.8
Other operating expenses	-2.5	-2.6	-4.7
Operating profit/loss	1.7	1.0	3.1
Financial income	0.1	0.1	0.1
Financial expenses	-0.2	-0.1	-0.3
Share of associated companies' result	0.1	0.0	0.0
Profit/loss before taxes	1.7	1.0	2.9
Taxes	-0.2	-0.3	-0.1
Profit/loss for the period	1.5	0.7	2.8
Other comprehensive income
Translation differences	0.0	0.0	-0.1
Total comprehensive income for the period	1.4	0.7	2.8
Result for the period attributable to
Equity holders of the parent	1.5	0.7	2.8
Non-controlling interest	0.0	0.0	0.0
	1.5	0.7	2.8
Comprehensive income attributable to
Equity holders of the parent	1.5	0.7	2.8
Non-controlling interest	0.0	0.0	0.0
	1.5	0.7	2.8
Calculated from the result for the period attributable to equity holders of parent Earnings/share (EPS):
Basic, EUR	0.25	0.12	0.48
Diluted, EUR	0.25	0.12	0.48

Honkarakenne Oyj has two series of shares: A shares and B shares, which have different right to dividend. Profit distribution of 0.20 EUR per share will be paid first for B shares, then 0.20 EUR per share for A shares, followed by equal distribution of remaining profit distribution between all shares.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited	30.6.2021	30.6.2020	31.12.2020
MEUR
Assets
Non-current assets
Property, plant and equipment	13.5	13.0	13.7
Goodwill	0.1	0.1	0.1
Other intangible assets	0.5	0.4	0.5
Investments in associated companies	0.4	0.3	0.3
Receivables	0.1	0.1	0.1
Deferred tax assets	1.7	1.5	1.7
	16.3	15.4	16.3
Current assets
Inventories	6.5	5.4	4.6
Trade and other receivables	7.7	4.8	4.3
Income tax receivables	0.4		0.4
Cash and cash equivalents	13.0	3.7	7.0
	27.5	13.9	16.3
Total assets	43.8	29.3	32.6
Equity and liabilities	30.6.2021	30.6.2020	31.12.2020
Equity attributable to owners of the parent
Share capital	9.9	9.9	9.9
Share premium account	0.5	0.5	0.5
Invested unrestricted equity fund	6.3	7.4	7.3
Own shares	-1.3	-1.3	-1.3
Translation differences	0.1	0.2	0.1
Retained earnings	-0.5	-4.1	-1.9
	15.0	12.6	14.6
Non-controlling interests
Total equity	15.0	12.6	14.6
Non-current liabilities
Deferred tax liability	0.2	0.1	0.2
Provisions	0.3	0.2	0.3
Financial liabilities	2.7	4.1	3.0
	3.2	4.4	3.4
Current liabilities
Trade and other payables	24.6	11.3	13.5
Current tax liabilities	0.1	0.1
Provisions	0.1	0.1	0.4
Current financial liabilities	0.7	0.8	0.8
	25.6	12.3	14.6
Total liabilities	28.7	16.7	18.0
Total equity and liabilities	43.8	29.3	32.6

STATEMENT OF CHANGES IN EQUITY
Abridged
Unaudited
TEUR
	Equity attributable to owners of the parent
	a)	b)	c)	d)	e)	f)	Total	g)	Total equity
Total equity 1.1.2020	9 898	520	8 034	165	-1 382	-4 696	12 539	0	12 539
Profit/loss for the period						673	673	0	673
Translation differences				6			6		6
Return of capital			-611				-611	0	-611
Share based incentive scheme					72	-61	12	0	12
Total equity 30.6.2020	9 898	520	7 424	171	-1 309	-4 083	12 620	0	12 620
	Equity attributable to owners of the parent
	a)	b)	c)	d)	e)	f)	Total	g)	Total equity
Total equity 1.1.2021	9 898	520	7 331	110	-1 309	-1 927	14 623	0	14 623
Profit/loss for the period						1 479	1 479	0	1 479
Translation differences				-33			-33	0	-33
Return of capital			-1 055				-1 055	0	-1 055
Share based incentive scheme					45	-29	16	0	16
Total equity 30.6.2021	9 898	520	6 275	78	-1 265	-477	15 029	0	15 029

a)   Share capital

b)   Share premium account

c)   Invested unrestricted equity fund

d)   Translation differences

e)   Own shares

f)   Retained earnings

g)   Non-controlling interests

CONSOLIDATED STATEMENT OF CASH FLOWS
Abridged
Unaudited	1.1.-30.6.2021	1.1.-30.6.2020	1.1.-31.12.2020
MEUR
Cash flow from operating activities	8.2	-0.1	6.0
Cash flow from investing activities, net	-0.7	-2.2	-3.7
Total cash flows from financing activities	-1.4	-1.0	-2.4
Repayment of borrowings	-0.2	-0.2	-1.3
Repayment of lease liabilities	-0.2	-0.2	-0.4
Return of capital	-1.1	-0.6	-0.7
Change in cash and cash equivalents	6.0	-3.3	-0.1
Effect of exchange rate changes	-0.1		0.1
Cash and cash equivalents at the beginning of period	7.0	7.1	7.1
Cash and cash equivalents at the close of period	13.0	3.7	7.0

NOTES TO THE REPORT

Accounting policies

This half-year financial report has been drafted in accordance with IAS 34. The half-year financial report should be read together with the 2020 financial statements. This half-year financial report has been drafted in accordance with the same accounting principles applied in the 2020 financial statements, with the exception of standards and interpretations that have come into force on 1 January 2021 or thereafter.

The half-year financial report has not been audited and the figures have not been examined by the auditor. The figures in the release are rounded, so the sum of individual figures may differ from the amount shown.

New standards and interpretations

The new standards or interpretations effective as of 1 January 2021 did not have a material impact on the figures presented for the review period.

Alternative Performance Measures

Honkarakenne complies with the Guidelines on Alternative Performance Measures (APM) issued by the European Securities and Markets Authority (ESMA).  An APM is a financial measure of performance other than a financial measure defined or specified in IFRS. For this reason, the term “adjusted” is used instead of “without non-recurring items”. As adjustment items, the company classifies significant business transactions that are considered to affect comparisons between different reporting periods. Such transactions include significant reorganisation expenses, significant impairment losses or reversals thereof, significant capital gains and losses on assets, and other significant non-customary income or expenses.

In Honkarakenne’s view, Alternative Performance Measures provide significant additional information to management, investors, securities analysts and other parties on Honkarakenne’s result of operations, financial position and cash flows, and are frequently used by analysts, investors and other parties. Return on equity, equity ratio, net financial liabilities and gearing are presented as supplementary key figures, as in the company’s view they are useful indicators for assessing Honkarakenne’s ability to acquire financing and pay its debts. In addition, gross investments and R&D expenditure provide additional information on needs related to Honkarakenne’s cash flow from operating activities.

Segments

Since the beginning of 2020, Honkarakenne has had two geographical operating segments that have been combined into one segment for reporting purposes. Geographically, sales are divided as follows: Finland and Exports. As management’s internal reporting complies with IFRS reporting, separate reconciliations are not presented.

PROPERTY, PLANT AND EQUIPMENT
Unaudited	30.6.2021		30.6.2020	31.12.2020
MEUR
Cost at the beginning of the period	51.0		47.5	47.5
Additions	0.9		2.2	3.8
Disposals	-0.1		-0.1	-0.3
Cost at the end of the period	51.8		49.7	51.0
Accumulated depreciation at the beginning of the period	-37.3		-35.9	-35.9
Accumulated depreciation of disposals	0.0		0.1	0.2
Depreciation for the period	-1.0		-0.8	-1.6
Accumulated depreciation at the end of period	-38.3		-36.6	-37.3
Carrying amount at the beginning of the period	13.7		11.6	11.6
Carrying amount at the end of the period	13.5		13.0	13.7
CONTINGENT LIABILITIES
Unaudited	30.6.2021	30.6.2020		31.12.2020
MEUR
For own loans
Mortgages	6.0	8.1		6.0
Other quarantees	7.9	2.5		4.7
Off-balance sheet lease contracts	0.1	0.1		0.1

Events with related parties

The Group’s related parties consist of subsidiaries and associated companies; the company's management and any companies in which they exert influence; and those involved in the Saarelainen shareholder agreement and any companies controlled by them. The management personnel considered to be related parties comprise the Board of Directors, President & CEO, and the company's Executive Group. The pricing of goods and services in transactions with related parties conforms to market-based pricing.

During the report period, ordinary business transactions with related parties were made as follows: sales of goods and services to related parties amounted to MEUR 0.2 (0.1) and purchases from related parties to MEUR 0.3 (0.2). At the end of the review period, receivables from related parties amounted to MEUR 0.0 (0.0) and liabilities to related parties to MEUR 0.0 (0.0).

KEY INDICATORS
Unaudited		1.1.-30.6.2021	1.1.-30.6.2020	1.1.-31.12.2020
Earnings/share (EPS)	EUR	0.25	0.12	0.48
Return on equity	%	10	5	21
Equity ratio	%	53	52	56
Equity/share	EUR	2.56	2.15	2.49
Net financial liabilities	MEUR	-9.6	1.2	-3.3
Gearing	%	-64	10	-23
Gross investments	MEUR	0.9	2.2	4.1
	% of revenue (net sales)	3	10	8
Order book	MEUR	60.5	29.2	39.8
Average number of personnel	White-collar	109	94	97
	Blue-collar	67	72	71
	Total	176	166	168
Personnel in person-years, average	White-collar	105	90	93
	Blue-collar	63	56	60
	Total	168	145	153
Adjusted number of shares (’000)	At period-end	5872	5862	5862
	Average during period	5872	5850	5856

Gross investments are presented without IFRS 16 right-of-use assets.

Own shares held by the Group are excluded from the number of shares.

Calculation of key indicators
	Profit / loss for the period attributable to owners of parent
Earnings/share (EPS):	----------------------------------------------------------------
	Average number of outstanding shares
	Profit / loss before taxes – taxes
Return on equity %:	----------------------------------------------------------------	x 100
	Total equity, average
	Equity attributable to the owners of the parent at the end of reporting period
Equity/share:	----------------------------------------------------------------
	Number of outstanding shares at the end of the reporting period
	Total equity
Equity ratio, %:	----------------------------------------------------------------	x 100
	Balance sheet total - advances received
Net financial liabilities	Financial liabilities – cash and cash equivalents
	Financial liabilities – cash and cash equivalents
Gearing, %:	----------------------------------------------------------------	x 100
	Total equity