Raute Corporation’s interim report January 1–September 30, 2024: Strong profitability in the third quarter

RAUTE CORPORATION, INTERIM REPORT, OCTOBER 31, 2024, AT 8:45 AM EET

Raute Corporation’s interim report January 1–September 30, 2024: Strong profitability in the third quarter

This is a summary of Raute’s interim report January 1–September 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 – INTERIM REPORT JANUARY 1–SEPTEMBER 30, 2024

July−September 2024

• Order intake was EUR 15 million (19)
• Order book was EUR 186 million (192) at the end of the reporting period
• Net sales were EUR 46.4 million (34.0)
• Comparable EBITDA was EUR 6.3 million (3.0), representing 13.5% (8.8%) of net sales
• Operating profit was EUR 4.8 million (1.4)
• Earnings per share were EUR 0.73 (0.16)
• Equity ratio was 54.3% (55.4%)

 

January−September 2024

• Order intake was EUR 72 million (197)
• Net sales were EUR 148.1 million (100.2)
• Comparable EBITDA was EUR 14.7 million (6.6), representing 9.9% (6.6%) of net sales
• Operating profit was EUR 10.2 million (1.2)
• Earnings per share were EUR 1.48 (0.11)

 

KEY FIGURES	1.7.-30.9. 2024	1.7.-30.9. 2023	1.1.-30.9. 2024	1.1.-30.9. 2023	1.1.-31.12. 2023
Net sales, MEUR	46.4	34.0	148.1	100.2	145.4
Change in net sales, %	36.4	-18.5	47.8	-11.0	-8.2
Comparable EBITDA, MEUR	6.3	3.0	14.7	6.6	9.3
Comparable EBITDA, %	13.5	8.8	9.9	6.6	6.4
Operating profit, MEUR	4.8	1.4	10.2	1.2	1.9
Operating profit, % of net sales	10.4	4.1	6.9	1.2	1.3
Profit for the period, MEUR	4.5	1.0	9.3	0.7	1.4
Profit for the period, % of net sales	9.6	3.0	6.0	0.7	0.9
Gross capital expenditure, MEUR	0.4	1.1	1.5	3.4	4.5
% of net sales	1.0	3.2	1.0	3.4	3.1
Research and development costs, MEUR	1.2	0.8	4.0	3.8	5.2
% of net sales	2.7	2.4	2.7	3.8	3.6
Order book, MEUR			186	192	266
Order intake, MEUR	15	19	72	197	315
Personnel, at the end of the period			789	745	754
Personnel, effective, on average			782	695	749
Personnel, on average			785	748	754

 

President and CEO Mika Saariaho: Solid operational execution in Wood Processing and yet another good quarter in Services

Raute reached strong profitability in the third quarter as we continued solid operational execution in Wood Processing and our Services business had yet another good quarter. In the past couple of years, we have put great emphasis on developing our operational and commercial capabilities, and this is clearly paying off now.

The market environment remained challenging, and consequently our order intake was still at a modest level. Although there were some weak signals of market recovery earlier this year, it now seems that customers have postponed their investment plans well into 2025. Nevertheless, we have strong and long-term relationships with our customers, and I am convinced we are able to capture new business opportunities when the cycle turns. Our solid order book, which remains nearly at last year's level, offers a buffer against the current uncertain business environment.

In terms of new order intake, the Services business was once again a bright spot, while the Wood Processing and Analyzers businesses suffered from the challenging market environment. To adjust capacity and achieve cost savings we have conducted change negotiations on possible temporary layoffs in certain parts of our delivery organization in those two units in Finland. The extent and duration of temporary layoffs depend on the development of new order intake and its impact on the workload.

In the third quarter, Raute’s net sales increased by 36.2% to EUR 46.4 million and comparable EBITDA reached a quarterly record of EUR 6.3 million, representing a margin of 13.5%. This was the first time we exceeded our long-term target of a 12% margin over the cycle since the introduction of our strategy in March 2023. We achieved this seasonally strong profitability through improved operational efficiency and solid progress in project deliveries. Consequently, earlier in October we raised our 2024 guidance for comparable EBITDA. 

Our performance in the reporting period was yet another proof point that we are on track to reach our long-term financial targets. We have the capabilities to deliver large mill-sized projects successfully and utilize digitalization to create new opportunities in engineered wood products segments. We will continue the implementation of Raute’s growth strategy with determination.

GUIDANCE STATEMENT FOR 2024 (updated on October 22, 2024)

Raute’s 2024 net sales are expected to be between EUR 190–210 million and comparable EBITDA between EUR 17–21 million.

Rationale for the new guidance on October 22, 2024

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 has led to positive profit development during the third quarter. Therefore, Raute raises its guidance for profit and updates its guidance on net sales for the full year.

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

BUSINESS ENVIRONMENT

The global demand for the end-user products of Raute’s customers remained low due to the downturn in the construction markets. This has especially impacted the demand for softwood plywood in the third quarter. Lower interest rates have not yet had a positive impact on the housing market. While there were some weak signals of market recovery earlier this year, the market consensus now seems to be that a wider market recovery will be postponed well into 2025.

The demand for hardwood plywood and LVL (laminated veneer lumber) has remained more stable, and the demand for special applications in niche market segments like vehicle manufacturing or LNG (liquid natural gas) vessels has strengthened the demand for birch plywood. The European birch plywood market demand is also supported by the EU sanctions against the entry of Russian birch plywood into the European market.

Raute’s customers have actively requested technical support for their investment plans, which may indicate increasing investment activity next year. These plans are focusing on higher automation levels, enabling savings in manpower as well as an increase in production capacity in the longer run.

RAUTE CORPORATION
Board of Directors

BRIEFING

A briefing is organized for analysts, investors, and the media on October 31, 2024, at 2:00 p.m. at Scandic Simonkenttä Hotel, Simonkatu 9, Helsinki, Finland. The interim report is presented by President and CEO Mika Saariaho and CFO Ville Halttunen. The presentation language is English. The event can also be followed online via Teams. Link will be sent to those who have registered by email; registrations at [email protected]. The event will be recorded, and the recording can be viewed on Raute’s website at www.raute.com on November 4, 2024, at the latest.

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.