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Raute Oyj — Annual Report 2011
Feb 14, 2012
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Annual Report
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RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1–DECEMBER 31, 2011
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1–DECEMBER 31, 2011
Nastola, Finland, 2012-02-14 08:00 CET (GLOBE NEWSWIRE) --
RAUTE CORPORATION FINANCIAL STATEMENT RELEASE FEBRUARY 14, 2012 at 9:00 a.m.
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1-DECEMBER 31, 2011
- The Group's net sales, EUR 74.3 million (MEUR 62.9), increased 18% on the
comparison year. Order intake was EUR 77 million (MEUR 72). - Operating result amounted to EUR -0.7 million (MEUR -3.1, excluding the MEUR
4.4 gain from a real estate sale). Result before taxes was EUR -1.1 million
(MEUR +1.1). - Undiluted earnings per share were EUR -0.27 (EUR +0.29).
- Fourth quarter net sales were EUR 14.9 million and operating result was EUR
-1.1 million. Order intake was EUR 31 million and the order book stood at EUR
36 million (MEUR 33) at the end of the reporting period. - The Board of Directors will propose to the Annual General Meeting that a
dividend of EUR 0.30 per share be paid for the financial year 2011. - In 2012 net sales will increase significantly on the comparison year and the
operating profit will be clearly positive.
TAPANI KIISKI, PRESIDENT AND CEO: 2012 STARTS OFF WITH SATISFACTORY ORDER BOOK
The year 2011 began with expectations of continued recovery from the economic
downturn of 2008 and 2009. As the year progressed, however, the outlook turned
decidedly bleaker, above all due to the uncertainty caused by the debt problems
of a few eurozone countries.
2011 began well for Raute also. The order book was satisfactory at the
beginning of the year and we received more new orders. Following the positive
start to the year, the economic outlook began to grow more uncertain and our
customers started to defer their investment decisions. After a six month wait,
we finally received our first significant new orders in November from Estonia
and in December from Chile. In terms of new orders, Russia became our largest
market area in 2011.
Our fourth quarter was challenging. The continued low order intake resulted in
low net sales, bringing down the positive operating result achieved by the end
of September into the negative for the whole of 2011.
The development of our technology services was positive throughout the year
which reflects the improved utilization rates of our customer industries. Our
order intake and net sales grew dramatically. Modernization products tapped
into significant markets in Russia.
The profitability of our operations excluding non-recurring items improved in
2011 from the previous year, however we fell short of our targets. Our
profitability during the first part of the year was weakened by additional
costs resulting from delays in the start-ups of certain project deliveries. Our
profitability also suffered due to strong fluctuations in demand. Therefore,
there is still a need for us to enhance our operations and further their
flexibility.
All of us here at Raute have worked hard to implement our strategy and we are
already beginning to see results. In addition to the significant growth in
technology services, the emerging markets now account for a larger share of our
sales. Raute's traditional high technology solutions are still a significant
part of our operations, however the highest relative growth was seen in our
solutions directed at the emerging markets. We also started up new projects in
order to serve this market segment. Both 2010 statistics concerning the wood
product industry, and our own observations of our customer base from last year,
support our perception that the shift in the markets' focus towards new
production countries is continuing and accelerating. Within the space of five
years, China's plywood production has grown by a volume that equals the
production of the world's second largest production area, North America, at its
height.
This year commenced with a satisfactory order book. With market demand
development resting on an uncertain foundation, the new EUR 50 million order
for plywood mill machinery to Chile which was received last week will have a
significant effect on our outlook for the year. Our continual efforts to
understand our customers' needs and strengthen the factors affecting the
success of their operations, as well as the development of our own operations
and personnel, will bring us results regardless of the development of the
market outlook. My strongest expectations for the rest of the year are focused
on the emerging markets in Russia and Asia, as well as the continuation of the
positive development in technical services.
A heartfelt thank you to Raute's customers for their continued confidence in us
and invaluable cooperation, to the personnel for their outstanding work in the
face of growing challenges and to our shareholders and all our other partners
for their role in furthering Raute's development.
FOURTH QUARTER OF 2011
Order intake and order book
The order intake during the fourth quarter amounted to EUR 31 million (MEUR
26), of which technology services accounted for EUR 8 million (MEUR 7). The
most significant new orders were the more than EUR 6 million in orders for
machinery and equipment for a veneer mill in Estonia and more than EUR 16
million in orders for machinery for a plywood mill in Chile. These orders did
not have a significant effect on net sales in 2011.
The order book increased in the fourth quarter of the year by EUR 15 million
and stood at EUR 36 million (MEUR 33) at year-end.
Net sales
Fourth-quarter net sales were EUR 14.9 million (MEUR 13.4). The low level of
net sales can be attributed to the low order intake during the third and fourth
quarters.
Technology services accounted for 36 percent (30%) of the company's net sales.
Result and profitability
The operating profit for the final quarter was EUR 1.1 million in the negative
(MEUR 2.3 negative) and accounted for -8 percent (-17%) of net sales. The
negative operating profit was caused by low net sales. The result was EUR 1.0
million negative (MEUR 1.9 negative), and earnings per share were EUR -0.25
(EUR -0.47).
Financing
In December the company took out a non-current fixed-interest bank loan of EUR
5 million in order to prepare for future working capital requirements in an
uncertain money market situation. The loan will be repaid in equal installments
every six months starting in June 2013 and ending in December 2016. The
measures did not affect covenant levels.
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1- DECEMBER 31, 2011
BUSINESS ENVIRONMENT
Market situation in customer industries
Raute's customers in the veneer, plywood and LVL (Laminated Veneer Lumber)
industries are engaged in the manufacture of wood products used in investment
commodities and are thus highly affected by fluctuations in construction,
housing-related consumption, international trade, and transportation.
The global markets in early 2011 promisingly continued the previous year's
recovery from the economic downturn of 2008 and 2009. As the year progressed,
however, the outlook turned decidedly bleaker, above all due to the uncertainty
caused by the debt problems of a few eurozone countries.
The slow improvement taking place in Raute's customer industries during 2010
and early 2011 leveled off and declined somewhat towards the end of the year.
Most of the plywood and LVL manufacturers still, however, operated at normal
utilization rates.
The total volume of plywood production is expected to have continued its growth
during 2011, but at a slower pace than the ten percent total growth achieved in
2010. The growth is largely attributable to plywood produced in emerging
markets, mainly in China. Demand for wood products in North America continued
to be very sluggish during the whole of 2011 as a result of the weak situation
in the housing market and construction.
Demand for wood products technology and technology services
Demand for wood products technology and technology services reflected the
changes taking place in the market situation of customer industries. The
upswing in demand seen early in the year leveled out during the summer and in a
few market areas demand fell again due to the risks relating to growing debt
among European countries and in the United States. Demand focused on smaller
projects and modernizations. The demand for spare parts and maintenance
services was increased by capacity utilization rates which had improved from
the previous year.
Several large projects encompassing single production lines and mill-scale
deliveries under planning and negotiation were deferred. Customers will decide
on and realize these projects only once they are confident that demand has
recovered permanently and once financing for the projects can be arranged.
Production capacity has diminished in the European and North American markets
and the focus was on developing the competitiveness of the remaining production
capacity. China's plywood production growth was achieved through local, largely
manual production. An investment decision was made in South America for
doubling the capacity of a large plywood mill. In Russia, demand focused on
development projects and modernizations for existing capacity.
ORDER INTAKE AND ORDER BOOK
Raute serves the wood products industry with a full-service concept based on
service which encompasses the entire life-cycle of the installed machine base.
Raute's business consists of project deliveries and technology services.
Project deliveries encompass complete production machinery for new mills,
production lines and individual machines and equipment. Additionally, Raute's
full-service concept includes comprehensive technology services ranging spare
parts deliveries to regular maintenance and equipment modernizations as well as
consulting, training and reconditioned machinery.
The order intake for 2011 was EUR 77 million (MEUR 72), up 7 percent from the
previous year. 38 percent of the new orders came from Russia (7%), 26 percent
from South America (3%), 26 percent from Europe (25%), 8 percent from North
America (12%) and 2 percent from Asia-Pacific (53%). The strong fluctuations in
the shares of the different areas reflect the nature of project business.
The order intake for project deliveries declined by 5 percent, with the
majority of orders being placed during the first and final quarters of the
year. The most significant orders received in 2011 were a EUR 12 million order
for plywood mill machinery to Russia received in January, a EUR 6 million order
for machinery and equipment for a veneer mill in Estonia received in November
and a EUR 16 million order for machinery for a plywood mill in Chile received
in December. Other significant orders received were peeling and drying lines to
Lithuania.
The order intake in technology services increased by more than a third
amounting to EUR 27 million (MEUR 19). Modernization products tapped into
significant markets in Russia.
The order book at the end of 2011 amounted to EUR 36 million (MEUR 33).
COMPETITIVE POSITION
Raute's competitive position is good. Raute's solutions help customers in
securing their ability to deliver and provide service throughout the life-cycle
of the product. In such investments, the supplier's overall expertise and
extensive and diverse technology offering play a key role. The competitive edge
provided by Raute is also a major draw when customers select their cooperation
partners. Raute's strong financial position also enhances its credibility and
improves its competitive position as an executor of long-term investment
projects.
NET SALES
The Group's net sales totaled EUR 74.3 million (MEUR 62.9), up by 18 percent
from 2010. The growth in net sales resulted from the improved market outlook
for customer industries and from investments in developing technology services.
Strong fluctuations in the order intake resulted in low net sales at the
beginning and end of the year.
Net sales were generated exclusively by project deliveries and technology
services related to the wood products technology business.
Net sales for project deliveries totaled EUR 47 million (MEUR 44), up 7 percent
from the previous year, accounting for 63 percent (70%) of total net sales. The
plywood industry's share of the net sales for project deliveries was 68 percent
(95%), while the LVL industry's share was 32 percent (5%).
Net sales for technology services totaled EUR 27 million (MEUR 19), up 42
percent from the previous year, accounting for 37 percent (30%) of net sales.
The increase in net sales resulted from improved utilization rates in the
plywood and LVL industries as well as the efforts to develop technology
services.
Of the total net sales for 2011, Russia accounted for 35 percent (30%), Europe
for 26 percent (22%), Asia-Pacific for 25 percent (29%), North America for 8
percent (15%), and South America for 6 percent (4%).
RESULT AND PROFITABILITY
The Group's operating profit for 2011 was EUR 0.7 million in the negative (MEUR
1.3 in the negative excluding a MEUR 4.4 gain from a real estate sale) and -1
percent of net sales (+2%). The profitability of operations excluding
non-recurring items improved from the previous year due to the growth in net
sales and a lighter cost structure resulting from earlier operational
reorganization measures. The operating result remained negative largely due to
additional costs incurred during the first quarter from the drawn-out
implementation of some projects that were in the installation phase.
Profitability was further weakened due to strong fluctuations in demand.
The Group's financial income and expenses totaled EUR -0.4 million (MEUR -0.2).
The Group's result before tax was EUR 1.1 million in the negative (MEUR 1.1
positive) and the result for the financial year was EUR 1.1 million in the
negative (MEUR 1.2 positive). The Group's comprehensive income totaled EUR 1.1
million in the negative (MEUR 1.1 positive).
Undiluted earnings per share were EUR -0.27 (EUR +0.29, including gain from a
real estate sale) and diluted earnings per share were EUR -0.27 (EUR +0.29).
Return on investment was 0 percent (+5%) and return on equity -5 percent (+5%).
CASH FLOW AND BALANCE SHEET
The Group's financial position remained good throughout the year. At the end of
the financial year, the Group's cash and cash equivalents exceeded
interest-bearing liabilities by EUR 10.4 million (MEUR 9.7). At the end of the
financial year gearing was -47 percent (-40%) and equity ratio 47 percent
(51%).
The Group's cash and cash equivalents, including financial assets recognized at
fair value through profit or loss, stood at EUR 25.7 million (MEUR 24.1) at the
end of the financial year. The change in cash and cash equivalents in the
financial year was EUR 1.6 million positive (MEUR -4.1). Operating cash flow
was EUR 2.5 million positive due to the increase in working capital (MEUR
-6.1). Cash flow from investments was EUR 1.7 million negative (MEUR +4.4,
including the gain received from real estate sales in the amount of MEUR 6.0).
Cash flow from financing activities was EUR 0.8 million positive (MEUR -2.3),
including dividend payments of EUR 1.2 million (MEUR 0.0).
The Group's balance sheet total at the end of the year stood at EUR 52.7
million (MEUR 53.0). Other fluctuations in balance sheet working capital items
and the key figures based on them are due to differences in the timing of
customer payments and the cost accumulation from project deliveries, which is
typical of project business.
Interest-bearing liabilities amounted to EUR 15.2 million (MEUR 14.4) at the
end of the financial year, with current interest-bearing liabilities accounting
for EUR 4.3 million (MEUR 4.4).
Raute Corporation rearranged its financing during 2011. In February, the
company replaced part of TyEL loans with a SEK 52.9 million bank loan which is
hedged with an interest rate and currency swap agreement. Repayment will begin
in May 2012 and end in November 2014. In December the company took out a
non-current fixed-interest bank loan of EUR 5 million in order to prepare for
future working capital requirements in an uncertain money market situation.
Repayment will begin in June 2013 and end in December 2016. The measures did
not affect covenant levels.
The Parent company Raute Corporation has a EUR 10 million commercial paper
program, which allows the company to issue commercial papers maturing in less
than one year. The company also has unused bilateral credit facilities totaling
EUR 5 million with a Nordic bank.
LOANS TO RELATED PARTIES AND OTHER LIABILITIES
On December 31, 2011, the Parent company Raute Corporation had loan receivables
from its subsidiaries Raute Service LLC in the amount of EUR 355 thousand and
Raute Canada Ltd. in the amount of EUR 1,211 thousand. Raute Corporation had
EUR 100 thousand in liabilities to the Raute Sickness Fund. Other liabilities
are presented in the figures section of this report.
EVENTS DURING THE REPORTING PERIOD
Raute Corporation published stock exchange releases on the following events:
January 20, 2011 Raute to have over EUR 12 million in orders from Russia.
April 13, 2011 Raute Corporation's 2011 Annual General Meeting was held in
April.
September 26, 2011 Petri Lakka appointed member of Raute Group's Executive
Board.
October 25, 2011 Raute's profit outlook for the full year 2011 weakened.
November 16, 2011 Raute to have over EUR 6 million in orders from Estonia.
December 16, 2011 Raute to have over EUR 16 million in orders from Chile.
RESEARCH AND DEVELOPMENT COSTS AND CAPITAL EXPENDITURE
Raute's goal is to be the leading technology supplier in its field, and to
invest strongly in continuous research and development, particularly in plywood
and LVL manufacturing technology and the supporting automation and
instrumentation applications, especially machine vision.
In 2011, the Group's research and development costs totaled EUR 2.0 million
(MEUR 1.8) and 2.7 percent of net sales (2.9%) In 2011, Raute continued to
invest strongly in continuous research and development, particularly in plywood
and LVL manufacturing technology and the supporting automation and
instrumentation applications, especially machine vision. A new focus was on
developing products aimed primarily at the emerging markets for the RautePro
product family and the Chinese markets. New technology was also introduced in
modernization products.
The Group's investments during the financial year totaled EUR 1.9 million (MEUR
2.2). The majority of investments in 2011 were focused on the development and
maintenance of IT systems. The investments include capitalized development
costs worth EUR 209 thousand (EUR 41 thousand).
DEVELOPMENT OF OPERATIONS
The development of operations has been steered by the strategy. The
account-based operating model was developed further and the know-how related to
it was extended through comprehensive training. IT systems were developed in
order to support reporting within the organization. The entire organization's
resources were put to use in order to meet the growth in project deliveries and
technology services. Local service ability was strengthened in Russia, Chile
and Australia.
The majority of investments centered on the development and modernization of IT
systems. Production operations at the Nastola main unit were further developed
in order to boost productivity by taking into use the modernized key production
machine and automatizing certain work stages.
Operating methods and tools for implementing projects were developed at the
Chinese unit. New features were taken into use within the ERP system and the
same version as in the Finnish unit was taken into use throughout the company.
PERSONNEL
The Group's headcount at the end of 2011 was 464 (495). Finnish Group companies
accounted for 75 percent (84%) of employees, North American companies for 11
percent (14%), Chinese companies for 10 percent (9%), and other sales and
maintenance companies for 4 percent (3%).
Converted to full-time employees (“effective headcount”), the average number of
employees during the financial year was 457 (438). Salaries and remunerations
paid by the Group totaled EUR 20.9 million (MEUR 19.5).
The Group has continued to develop the competence of its personnel and increase
their commitment to the company. 2 percent (1%) of the payroll was invested in
personnel training.
REMUNERATION
The Group has remuneration systems in place that cover the entire personnel.
The Annual General Meeting held on March 31, 2010 resolved to issue a maximum
of 240,000 stock options. In compliance with the authorization granted by the
Annual General Meeting, the Board of Directors issued a total of 80,000 stock
options marked with the symbol 2010 B to the Group's key personnel on May 31,
2011 and September 26, 2011. The share subscription period for stock options
2010 B will be from March 1, 2014 to March 31, 2017 and the exercise price will
be EUR 9.83. Earlier, on May 5, 2010, 80,000 stock options 2010 A were granted
to key employees of the Group under this stock option scheme. The terms and
conditions of the stock option scheme are available on the company's website.
SOCIETY AND THE ENVIRONMENT
The environment is one of the values that guide Raute's operations. Raute
strives to systematically develop the environmental soundness of its products
and services and to reduce the environmental impacts of its operations. The
Group abides by the principles of good corporate citizenship, taking into
consideration nature and its protection, and how society as a whole operates,
while respecting local cultures.
Raute's operations mainly affect the environment indirectly when the company's
technology is used in the production processes of the wood products industry.
Raute's technology enables the wood products industry to substantially reduce
the environmental load caused by its operations through, for example, more
efficient use of wood raw materials, additives and energy.
The Group's own operations do not involve considerable environmental risks that
might have a direct impact on the Group's business operations or financial
position. The Nastola main production units manage environmental matters in
compliance with a certified environmental system. The operations and ethical
principles of the partner and subcontractor network are also subjected to
systematic inspection.
Raute aims to continuously reduce energy consumption, decrease the volume of
waste, and develop the working environment.
SEASONAL FLUCTUATIONS IN BUSINESS
The Group's net sales and working capital fluctuate every quarter due to
different types of project deliveries and their schedules. Business operations
do not involve regular seasonal changes.
RISKS AND RISK MANAGEMENT
The Group's identified main risk areas relate to the nature of the business,
the business environment, financing, and damage or loss. The fluctuation in
demand resulting from economic cycles and delivery and technology risks have
been identified as the Group's most significant business risks.
Risks in the near term continue to be driven by the global economic situation
and the uncertainty concerning its development. Hazards related to the growing
debt of some eurozone countries and the United States have led to mounting
uncertainty about the development of the global economy and financial markets.
The most significant risks for Raute are related to the development of net
sales and profitability.
The Group has no ongoing legal proceedings or other disputes in progress that
might materially affect the continuity of business operations, nor is the Board
of Directors aware of any other legal risks related to the Group's operations
that might have such an effect.
BUSINESS RISKS
Impact of economic cycles on business operations
Raute's business operations are characterized by the sensitivity of investment
demand to fluctuations in the global economy and the financing markets, and the
cyclical nature of project business. The impact of changes in demand on the
Group's result is reduced by increasing the share of technology services,
increasing operations in market areas with a small current market share,
creating products for completely new customer groups and developing the
subcontracting network.
Deliveries and technology
The bulk of Raute's business operations consists of project deliveries, which
expose the company to risks caused by customized solutions related to each
customer's end product, production methods or raw materials. At the quotation
and negotiation phase, the company has to take risks relating to the promised
performance figures and make estimates of implementation costs.
Raute invests heavily in product development. The developmental phase for new
technologies involves the risk that the project will not lead to a
technologically or commercially acceptable solution. The functionality and
capacity of new solutions produced as a result of development work cannot be
fully verified until the solutions can be tested under production conditions in
conjunction with the customer deliveries.
Contract, product liability, implementation, cost and capacity risks are
managed using project management procedures that comply with the company's
ISO-certified quality system. Technology risks are reduced by the conditions of
delivery contracts and by restricting the number of simultaneous first
deliveries.
Emerging markets
Raute's objective is to increase its local business in China and Russia, among
others, where, besides opportunities, companies face risks typical for emerging
markets. Information security risks are managed according to a defined
information security policy.
Human resources
Competence retention and development and ensuring the sufficiency of human
resources are particularly important in cyclical business. Continuity is
ensured by monitoring the development of the age structure, implementing
systematic human resources management and investing in wellbeing at work.
Financing risks
The most significant financing risks in the Group's international business
operations are default risks and currency risks related to counterparties. The
Group is also exposed to liquidity, interest and price risks.
The default risk relating to customers' solvency is managed by covering the
unpaid sum with bank guarantees, letters of credit or other securities. The
Group's liquid assets are mainly held in banks in the Nordic countries.
The Group's main currency is the euro. The most significant currency risks
result from the following currencies: Canadian dollar (CAD), US dollar (USD),
Russian ruble (RUB) and Chinese yuan (CNY). The main hedging instruments used
are foreign currency forward contracts. Currency clauses are used to hedge
against currency risks during the quotation period. Depending on the case,
currency risks related to preliminary sales contracts are hedged with currency
option contracts.
The Group has braced for fluctuations in the working capital tied up in project
operations and possible disturbances in the availability of money by taking out
a long-term loan. The interest rate risk related to the company's variable
interest rate loans is hedged with interest rate swaps. The Group's interest
risks are mainly related to the return on liquid assets.
Risks of damage or loss
Raute's most significant single risks concerning material damage and business
interruption loss are a fire or a serious machine or information system
breakdown at the Nastola main unit, where the production, planning, financial,
and ERP systems serving the Group's key technologies are centrally located.
Other risks of damage or loss include occupational safety risks, which are
managed by means of active risk-prevention measures, such as continuous
personnel training and investigation of all near-miss situations. Occupational
safety and ergonomics are under continuous development.
Raute's production operations do not involve significant environmental risks.
The main unit in Nastola has an ISO-certified environmental management program,
whose principles are also adhered to in other units.
The Group hedges against risks of damage or loss by assessing its facilities
and processes in terms of risk management and by maintaining emergency plans.
Global and local insurance programs are checked regularly as part of overall
risk management. The objective is to use insurance policies to sufficiently
hedge against all risks that are reasonable to handle through insurance due to
economical or other reasons.
Organizing risk management
Raute's risk management policy is approved by the Board of Directors. The Board
is responsible for organizing internal control and risk management, and for
monitoring their efficiency.
The Executive Board defines the Group's general risk management principles and
operating policies, and defines the boundaries of the organization's powers.
The President and CEO and the CFO regularly report significant risks to the
Board.
The Group's President and CEO controls the implementation of the risk
management principles in the entire Group, while the Presidents of the Group
companies are responsible for risk management in their respective companies.
The members of the Group's Executive Board are responsible for their own areas
of responsibility across company boundaries.
Raute has no separate internal auditing organization. The Controller function
oversees the annual internal control plan approved by the Board, develops
internal control and risk management procedures together with the operative
leadership, and monitors compliance with risk management principles,
operational policies and powers.
GROUP STRUCTURE
No changes took place in the Group's legal structure during 2011.
SHAREHOLDERS
The number of shareholders totaled 1,787 at the beginning of the year and 1,667
at the end of the reporting period. Series K shares are held by 49 private
individuals (50). Management (the Board of Directors, the Group's President and
CEO, and Presidents of subsidiaries) held 7.2 percent (7.1%) of the company
shares and 13.9 percent (13.3%) of the votes. Nominee-registered shares
accounted for 1.5 percent (2.1%) of shares.
No flagging notifications were given to the company in 2011.
AUDITORS
At Raute Corporation's Annual General Meeting on April 13, 2011, the authorized
public accounting company PricewaterhouseCoopers was chosen as auditor with
Authorized Public Accountant Janne Rajalahti as the principal auditor.
CORPORATE GOVERNANCE
Raute Corporation complies with the Finnish Corporate Governance Code 2010 for
listed companies issued by the Securities Market Association on June 15, 2010.
Raute deviates from the Code's recommendation 22 on appointing members to the
Appointments Committee in that one member to the Committee is elected from
outside the Board of Directors, as per the company's Administrative
Instructions, from among the representatives of major shareholders who have
significant voting rights. The Board views this exception as justified, taking
into consideration the company's ownership structure and the possibility to
consider the expectations of major shareholders as early as in the preparation
phase of selecting members of the Board of Directors. An outline of Raute
Corporation's corporate governance principles and the company's remuneration
statement are presented on the company's website at www.raute.com.
CORPORATE GOVERNANCE STATEMENT
Raute Corporation's Board of Directors has handled Raute Corporation's
Corporate Governance Statement for 2011 according to chapter 2, section 6 of
the Finnish Securities Markets Act and recommendation 54 of the Finnish
Corporate Governance Code 2010 for listed companies issued by the Securities
Market Association on June 15, 2010. The statement has been drawn up separately
from the financial statements and is published on the company's website
together with the Annual Report and financial statements.
BOARD OF DIRECTORS AND PRESIDENT AND CEO
The Annual General Meeting elects the Chairman and Vice-Chairman for the Board
of Directors, and 3-5 Board members.
At Raute Corporation's Annual General Meeting on April 13, 2011, Mr. Erkki
Pehu-Lehtonen, M.Sc. (Eng.), was elected as Chairman of the Board of Directors,
Ms. Sinikka Mustakallio, Researcher, as Vice-Chairman, and Mr. Risto Hautamäki,
M.Sc. (Eng.), Mr. Ilpo Helander, M.Sc. (Eng.), Mr. Mika Mustakallio, M.Sc.
(Econ.), and Mr. Pekka Suominen, M.Sc. (Econ.) as members of the Board.
The Board of Directors appoints the President and CEO and confirms the terms of
his or her employment, including fringe benefits.
Mr. Tapani Kiiski, Licentiate in Technology, continued as Raute Corporation's
President and CEO. He was appointed as Raute Corporation's President and CEO on
March 16, 2004. As agreed in the executive contract, the term of notice is six
months, and the severance pay equals six months' salary.
Raute Corporation's Articles of Association do not grant any unusual
authorizations to the Board of Directors, or to the President and CEO.
Any decisions on changes to the Articles of Association or an increase in share
capital are made in compliance with the regulations of the effective Companies
Act.
EXECUTIVE BOARD
The Group's Executive Board consists of Mr. Tapani Kiiski, President and CEO
(Chairman); Ms. Arja Hakala, CFO; Mr. Timo Kangas, Group Vice President,
Technology Services; Mr. Petri Strengell, Group Vice President, Technology and
Operations; Mr. Bruce Alexander, Group Vice President, North American
Operations and, as of September 26, 2011, Mr. Petri Lakka, Group Vice
President, Business Development.
Areas of responsibility within the Executive Board were changed on January 1,
2012, as of which date Timo Kangas functions as Group Vice President, EMEA and
Petri Lakka as Group Vice President, Technology Services.
SHARES
The number of Raute Corporations shares at the end of 2011 totaled 4,004,758,
of which 991,161 were series K shares (ordinary share, 20 votes/share) and
3,013,597 series A shares (1 vote/share). The shares have a nominal value of 2
euros. Series K and A shares confer equal rights to dividends and company
assets.
Series K shares can be converted to series A shares under the terms set out in
section 3 of the Articles of Association. If an ordinary share is transferred
to a new owner who has not previously held series K shares, the new owner must
notify the Board of Directors of this in writing and without delay. Other
holders of series K shares have the right to redeem the share under the terms
specified in Article 4 of the Articles of Association.
Raute Corporation's series A shares are listed on NASDAQ OMX Helsinki Ltd. The
trading code is RUTAV. A total of 522,287 shares (646,052) worth EUR 4,289
thousand (EUR 5,248 thousand) was traded in 2011. The number of shares traded
represents 17 percent (21%) of all listed series A shares. The average price of
a series A share was EUR 8.57 (EUR 8.21). The highest rate of the year was EUR
11.55 and the lowest EUR 6.05.
The company's market capitalization at the end of 2011 totaled EUR 24.8 million
(MEUR 38.8), with series K shares valued at the closing price of series A
shares, EUR 6.20 (EUR 9.70), on December 31, 2011.
Raute Corporation has signed a market making agreement with Nordea Bank Finland
Plc in compliance with the Liquidity Providing (LP) requirements issued by
NASDAQ OMX Helsinki Ltd.
Other share-related information is presented in the figures section of this
report.
DIVIDENDS FOR THE 2010 FINANCIAL YEAR
The Annual General Meeting held on April 13, 2011 decided to pay a dividend of
EUR 0.30 per share for the financial year 2010. The dividends amounted to a
total of EUR 1.2 million, of which series A shares accounted for EUR 904,079.10
and series K shares for EUR 297,348.30.
AUTHORIZATION OF REPURCHASE AND DISPOSAL OF OWN SHARES
The Annual General Meeting held on April 13, 2011 authorized the company's
Board of Directors to decide on the repurchase of Raute Corporation series A
shares with the company's distributable assets and to decide on a directed
issue of a maximum of 400,000 shares. The Board of Directors did not exercise
the authorization in 2011.
The company did not possess company shares at the end of the financial period
or hold them as security.
EVENTS AFTER THE FINANCIAL YEAR
On February 10, 2012, Raute Corporation received orders valued at over EUR 50
million from Paneles Arauco S.A. in Chile for plywood mill machinery and
equipment. The machinery and equipment will be delivered mainly during the last
part of the year 2012 for rebuilding the Nueva Aldea plywood mill which was
destroyed in a fire in the beginning of January.
ANNUAL GENERAL MEETING 2012
Raute Corporation's Annual General Meeting will be held at Lahti's Sibelius
Hall on Monday April 16, 2012 at 6:00 p.m. A shareholder who wishes to include
an issue in Raute Corporation's Annual General Meeting's agenda shall notify
the company thereof in writing no later than March 9, 2012.
PUBLISHING OF THE 2011 ANNUAL REPORT AND FINANCIAL STATEMENTS
Raute Corporation's Annual Report and consolidated financial statements 2011
will be published during week 11.
THE BOARD OF DIRECTORS' PROPOSAL FOR DIVIDEND DISTRIBUTION AND MEASURES
CONCERNING THE RESULT
According to the financial statements 2011, distributable assets total EUR
6,379 thousand.
The Board of Directors will propose to Raute Corporation's Annual General
Meeting, to be held on April 16, 2012, that a dividend of EUR 0.30 per share be
paid for series A shares and series K shares, and that the remainder of
distributable assets be transferred to equity. The proposed record date for
dividend payments is April 19, 2012 and the dividend payment date is April 26,
2012. No essential changes have taken place in the company's financial position
since the end of the financial year. The company has good liquidity, and in the
Board of Directors' view, the proposed dividend does not pose a risk to
solvency.
OUTLOOK FOR 2012
Raute's business operations are characterized by the sensitivity of investment
demand to cyclical fluctuations in the global economy and the financial
markets.
Significant uncertainty is still associated with the development of the global
economy and financial markets due to the hazards of growing debt among European
countries and in the United States. The market situation for Raute's customer
industries is expected to remain uncertain. However, upgrade investments in the
plywood industry to ensure quality and maintain market shares will remain at a
reasonable level in the near future, provided that the economic uncertainty
does not spiral into a new crisis.
Production line and mill-scale investment projects are being planned in several
market areas. The implementation and timing of the projects will depend on
investors' confidence that the market for wood products will remain at a
reasonable level and on the arrangement of financing for customer projects in
some market areas.
Thanks to its strong financial and market position and the development measures
it has carried out, Raute is well positioned to respond to growing demand once
the markets recover. The implemented adaptation measures have led to a lighter
cost structure and business is more profitable than before, even in a difficult
market situation.
Due to a strong order book and projects in the negotiation phase, net sales in
2012 will increase significantly on the comparison year and the operating
profit will be clearly positive.
SUMMARY OF FINANCIAL STATEMENTS AND NOTES
The figures for the financial years 2010 and 2011 presented in the figures
section of the financial statement release have been
audited. The presented interim financial report
figures have not been audited.
CONSOLIDATED STATEMENT OF Note 1.10.-31.12. 1.10.-31.12. 1.1.-31 1.1.-31
.12. .12.
COMPREHESIVE INCOME (EUR 2011 2010 2011 2010
1 000)
NET SALES 3, 4, 5 14 934 13 396 74 323 62 867
Change in inventories of
finished
goods and work in -1 225 815 -184 351
progress
Other operating income 23 10 168 4 580
Materials and services -5 561 -7 395 -39 404 -32 679
Expenses from employee 15 -6 437 -6 418 -24 019 -23 467
benefits
Depreciation and -518 -574 -2 128 -2 250
amortization
Other operating expenses -2 336 -2 166 -9 494 -8 091
Total operating expenses -14 853 -16 554 -75 045 -66 487
OPERATING PROFIT -1 121 -2 333 -738 1 311
% of net sales -8 -17 -1 2
Financial income -60 266 705 728
Financial expenses -10 -338 -1 093 -917
PROFIT (LOSS) BEFORE TAX -1 190 -2 406 -1 126 1 122
% of net sales -8 -18 -2 2
Income taxes 7 170 538 30 36
PROFIT (LOSS) FOR THE -1 020 -1 868 -1 095 1 158
PERIOD
% of net sales -7 -14 -1 2
Other comprehensive
income items:
Exchange differences on 57 28 23 -20
translating foreign
operations
Cash flow hedging 19 -27 19 -19
Income tax related to -5 7 -5 5
cash flow hedges
---------------------------- --------
----------------------------------- ---------
Comprehensive income
items for
the period, net of tax 71 8 37 -34
COMPREHENSIVE PROFIT -949 -1 860 -1 058 1 124
(LOSS) FOR THE PERIOD
Profit (loss) for the
period attributable to
Equity holders of the -1 020 -1 868 -1 095 1 158
Parent company
Comprehensive profit
(loss) for the period
attributable to
Equity holders of the -949 -1 860 -1 058 1 124
Parent company
Earnings per share for
profit (loss)
attributable
to Equity holders of the
Parent company, EUR
Undiluted earnings per -0,25 -0,47 -0,27 0,29
share
Diluted earnings per -0,25 -0,47 -0,27 0,29
share
Shares, 1 000 pcs
Adjusted average number 4 005 4 005 4 005 4 005
of shares
Adjusted average number 4 005 4 005 4 005 4 005
of shares diluted
CONSOLIDATED BALANCE SHEET Note 31.12. 31.12.
(EUR 1 000) 2011 2010
ASSETS
Non-current assets
Intangible assets 9 1 433 1 341
Property, plant and equipment 9 8 226 8 913
Other financial assets 789 497
Receivables 549 -
Deferred tax assets 1 601 1 849
Total 12 598 12 599
Current assets
Inventories 5 059 4 574
Accounts receivables and other receivables 5 9 298 11 770
Income tax receivable 37 -
Cash and cash equivalents 25 674 24 090
Total 40 067 40 435
TOTAL ASSETS 52 666 53 034
SHAREHOLDERS' EQUITY AND LIABILITIES
Equity attributable to Equity holders
of the Parent company
Share capital 8 010 8 010
Share premium 6 498 6 498
Other reserves 15 187 36
Exchange differences 23 35
Retained earnings 8 447 8 490
Profit (loss) for the period -1 095 1 158
Share of shareholders' equity that belongs
to the owners of the Parent company 22 069 24 227
Total shareholders' equity 22 069 24 227
Non-current liabilities
Provisions 123 57
Deferred tax liabilities - 337
Non-current interest-bearing liabilities 11 10 937 10 000
Total 11 060 10 394
Current liabilities
Provisions 697 612
Pension obligations 98 91
Current interest-bearing liabilities 11 4 340 4 439
Advance payments received 5 5 589 5 243
Current tax liabilities 416 -
Trade and other payables 8 399 8 028
Total 19 537 18 413
Total liabilities 30 597 28 807
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 52 666 53 034
CONSOLIDATED STATEMENT OF CASH FLOWS 1.1.-31.12. 1.1.-31.12.
(EUR 1 000) 2011 2010
CASH FLOW FROM OPERATING ACTIVITIES
Proceeds from sales 64 268 57 338
Proceeds from other operating income 168 121
Payments of operating expenses -62 322 -63 416
Cash flow before financial items and taxes 2 113 -5 957
Interests and other operating financial expenses paid -346 -650
Interests and other income received 357 394
Dividends received 108 118
Income taxes paid 298 -18
NET CASH FLOW FROM OPERATING ACTIVITIES (A) 2 531 -6 114
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure in tangible and intangible assets -1 589 -2 067
Purchases of assets-for-sale as investments -293 -11
Proceeds from sale of tangible and intangible assets 133 6 448
NET CASH FLOW FROM INVESTING ACTIVITIES (B) -1 748 4 370
CASH FLOW FROM FINANCING ACTIVITIES
Decrease of non-current and current receivables 1 000 2 000
Increase of current liabilities 163 -
Repayments of current borrowings -115 -228
Increase of non-current borrowings 11 000 -
Repayments of non-current borrowings -10 000 -4 088
Dividends paid -1 201 -
NET CASH FLOW FROM FINANCING ACTIVITIES (C) 846 -2 316
NET CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C) 1 629 -4 060
increase (+)/decrease (-)
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE FINANCIAL YEAR* 24 090 27 900
EFFECTS OF EXCHANGE RATE CHANGES ON CASH -45 251
CASH AND CASH EQUIVALENTS AT THE END
OF THE FINANCIAL YEAR* 25 674 24 090
CASH AND CASH EQUIVALENTS IN THE BALANCE
SHEET AT THE END OF THE FINANCIAL YEAR
Cash and cash equivalents 25 674 24 090
TOTAL 25 674 24 090
*Cash and cash equivalents comprise assets at fair value through profit and
loss, as well as cash
and bank receivables, which will be due within the following three
months' period.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
Share Share Other Exchange Retaine
d
(EUR 1 000) capital premiu reserve rate earning
m s diff. s
EQUITY Jan. 1, 2011 8 010 6 498 36 35 9 648
Profit (loss) for the period - - - - -1 095
Other comprehensive income
items:
Exchange differences on
translating
foreign operations - - - -12 -
Cash flow hedging, net of tax - - 14 - -
Total comprehensive profit
(loss)
for the period - - 14 -12 -1 095
Dividend paid - - - - -1 201
Equity-settled share-based - - 137 - -
transactions
Reclassifications between items - - - - -
EQUITY Dec. 31, 2011 8 010 6 498 187 23 7 351
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(continue)
To the owners
of the EQUITY
Parent
(EUR 1 000) company TOTAL
EQUITY Jan. 1, 2011 24 227 24 227
Profit (loss) for the period -1 095 -1 095
Other comprehensive income
items:
Exchange differences on
translating
foreign operations -12 -12
Cash flow hedging, net of tax 14 14
Total comprehensive profit
(loss)
for the period -1 093 -1 093
Dividend paid -1 201 -1 201
Equity-settled share-based 137 137
transactions
Reclassifications between items - -
EQUITY Dec. 31, 2011 22 069 22 069
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
Share Share Other Exchange Retaine
d
(EUR 1 000) capital premiu funds rate earning
m diff. s
EQUITY Jan. 1, 2010 8 010 6 498 294 55 8 196
Profit (loss) for the period - - - - 1 158
Other comprehensive income
items:
Exchange differences on
translating
foreign operations - - - -20 -
Cash flow hedging, net of tax - - -14 - -
Total comprehensive profit
(loss)
for the period - - -14 -20 1 158
Dividend paid - - - - -
Equity-settled share-based - - 50 - -
transactions
Reclassifications between items - - -294 - 294
EQUITY Dec. 31, 2010 8 010 6 498 36 35 9 648
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(continue)
To the owners
of the EQUITY
Parent
(EUR 1 000) company TOTAL
EQUITY Jan. 1, 2010 23 053 23 053
Profit (loss) for the period 1 158 1 158
Other comprehensive income
items:
Exchange differences on
translating
foreign operations -20 -20
Cash flow hedging, net of tax -14 -14
Total comprehensive profit
(loss)
for the period 1 124 1 124
Dividend paid - -
Equity-settled share-based 50 50
transactions
Reclassifications between items - -
EQUITY Dec. 31, 2010 24 227 24 227
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Raute is a technology and service company that operates worldwide. Raute's
customers are companies operating in the
wood products industry that manufacture veneer, plywood and LVL (Laminated
Veneer Lumber). Raute's technology offering
covers machinery and equipment for the entire production process. Raute's
full-service concept is based on product
life-cycle management. In addition to a broad range of machines and equipment,
our solutions cover technology services
ranging from spare parts deliveries to regular maintenance and equipment
modernizations. Raute's head office is
located in Nastola, Finland. Its other production plants are in the Vancouver
area in Canada, in the Shanghai area in China,
and in Kajaani, Finland. The company's sales network has a global reach.
Raute Group's Parent company is a Finnish public limited liability company,
Raute Corporation, established in accordance with
Finnish law (Business ID FI01490726). Its series A shares are quoted on NASDAQ
OMX Helsinki Ltd., under Industrials.
Raute Corporation is domiciled in Lahti, Finland. The address of its registered
office is Rautetie 2, FI-15550 Nastola, Finland,
and its postal address is P.O. Box 69, FI-15551 Nastola, Finland.
The consolidated financial statements are available online at www.raute.com and
at the head office of the Parent company,
Rautetie 2, FI-15550 Nastola, Finland.
Raute Corporation's Board of Directors has on February 14, 2012 reviewed the
consolidated financial statement for January 1 -
December 31, 2011, and approved it to be published in compliance with this
release.
2. Accounting principles
Raute Corporation's financial statement release January 1 - December 31, 2011
has been prepared in accordance with standard
IAS 34 Interim Financial Reporting. The financial statement release does not
contain full notes and other information presented
in the financial statements. Financial statements with full notes will be
published in compliance with Annual report 2011, which
will be published in week 11.
Raute Corporation's consolidated financial statements for January 1 - December
31, 2011 have been prepared in accordance
with international financial statement standards (International Financial
Reporting Standards, IFRS) as adopted by the European
Union, and preparations have complied with the IAS and IFRS standards, as well
as SIC and IFRIC interpretations, effective on
December 31, 2011. The notes to the consolidated financial statements also
comply with Finnish accounting legislation
complementing IFRS regulations.
The consolidated financial statements have been prepared according to the same
accounting principles as those applied in 2010,
except for the following standards, amended standards and interpretations which
the Group has applied as of January 1, 2011:
- IAS 24 Related Party Disclosures, revised
- IAS 32 Classification of Rights Issues, amendment
- IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
- IFRIC 14 Prepayments of a Minimum Funding Requirement, amendment
- Annual Improvements to standards and interpretations.
The new standards, amendments and interpretations do not have any impact on the
consolidated financial statements.
All the monetary figures presented in the financial statement release are in
thousand euros, unless otherwise stated.
Due to the rounding of the figures in the financial statement tables, the sums
of figures may deviate from the sum total presented
in the table. Figures in parentheses refer to the corresponding figures in the
comparison period.
The preparation of financial statements according to IFRS standards requires
management to use estimates and assumptions
in the process of applying the accounting principles. Because estimates and
assumptions are based on management's best
knowledge at the reporting date, they comprise risks and uncertainties. The
actual results may therefore differ from these
estimates.
- Segment information
Operational segment
Continuing operations of Raute Group belong to the wood products technology
segment. Raute Corporation's Board of
Directors is the chief operating decision maker that is responsible for
assigning resources to the operating segment and
assessing its result. The Board monitors profitability through the
operating profit key figure.
Due to Raute's business model, operational nature and administrative structure,
the operational segment to be reported as
wood products technology segment is comprised of the whole Group and the
information on the segment is consistent with
that of the Group.
The division into operating segments is based on the Group's internal
decision-making order and is consistent with the
financial reports submitted to the chief operating decision maker. Segment
reporting follows the principles of
presentation of the consolidated financial statements.
31.12. 31.12.
Wood products technology 2011 2010
Net sales 74 323 62 867
Operating profit (loss) -738 1 311
Assets 52 666 53 034
Liabilities 30 597 28 807
Capital expenditure 1 885 2 224
Assets of the wood products technology 31.12. 31.12.
segment by geographical location 2011 % 2010 %
Finland 46 196 88 44 006 83
North America 3 305 6 3 730 7
China 1 550 3 4 129 8
Russia 1 302 2 880 2
South America 170 0 160 0
Others 143 0 129 0
TOTAL 52 666 100 53 034 100
-----------------------------------
Capital expenditure of the wood products 31.12. 31.12.
technology segment by geographical location 2011 % 2010 %
Finland 1 824 97 590 27
North America 22 1 1 606 72
China 36 2 7 0
Russia - - - -
South America 2 0 21 1
Others 1 0 - -
TOTAL 1 885 100 2 224 100
- Net sales
The main part of the net sales is comprised of project deliveries related to
wood products technology and modernizations
in technology services, which are treated as long-term projects. The rest of the
net sales is comprised of technology
services provided to the wood products industry such as spare parts and
maintenance services as well as services provided
to the development of customers' business.
Project deliveries and modernization related to technology services include both
product and service sales, making
it impossible to give a reliable presentation of the breakdown of the Group's
net sales into purely product and service sales.
Large delivery projects can temporarily increase the shares of various customers
of the Group's net sales to more than
ten percent. At the end of the financial year 2011, the Group had two (2)
customers, whose share of the Group's net
sales temporarily exceeded 10 percent. The share of the other customer was 16
percent and the other's 15 percent.
Net sales 1.1.-31.12. 1.1.-31.12.
by market area 2011 % 2010 %
Russia 26 026 35 18 627 30
Asia-Pacific 18 299 25 18 442 29
Rest of Europe 10 593 14 8 805 14
Finland 8 891 12 5 094 8
North America 6 090 8 9 551 15
South America 4 301 6 2 212 4
Others 124 0 136 0
TOTAL 74 323 100 62 867 100
- Long-term projects 31.12. 31.12.
2011 2010
Net sales
Net sales by percentage of completion 58 760 51 860
Other net sales 15 563 11 007
TOTAL 74 323 62 867
Project revenues entered as income from currently
undelivered
long-term projects recognized by percentage of completion 45 250 50 784
Amount of long-term project revenues not yet entered as 35 034 31 799
income (order book)
Projects for which the value by percentage of completion
exceeds advance payments invoiced
- aggregate amount of costs incurred and recognized 16 805 31 848
profits less recognized losses
- advance payments received 13 431 27 137
Gross amount due from customers 3 374 4 711
Projects for which advance payments invoiced exceeds the
value by percentage of completion
- aggregate amount of costs incurred and recognized 28 445 18 936
profits less recognized losses
- advance payments received 33 704 23 315
Gross amount due to customers 5 259 4 379
Specification of combined asset and liability items
Advance payments paid 101 147
Advance payments received included in inventories in the 101 147
balance sheet
- Number of personnel, persons 31.12. 31.12.
2011 2010
Effective, on average 457 438
In books, on average 475 512
In books, at the end of period 464 495
- of which personnel working abroad 117 129
7. Income taxes
The taxes in the consolidated income statement include the taxes corresponding
to the Group companies' taxable profit for the
financial year as well as tax adjustments for the previous years and the change
in deferred taxes. Current tax based on the taxable
income is calculated on taxable income using the tax rate in force in each
country. Taxes are recognized in the income statement,
except to the extent that it relates to the items recognized in other
comprehensive income or directly in equity. In that case, the tax
is also recognized in other comprehensive income or
directly in equity, respectively.
Deferred taxes have been calculated for all temporary differences in accounting
and taxation using the tax rates enacted by the
reporting date. The principal temporary differences arise from the amortization
of tangible fixed assets. Deferred tax liabilities
have been presented in full in the balance sheet. Deferred tax receivables have
been recognized to the extent that it is probable
that taxable profits will be available against which
temporary differences can be utilized.
- Research and development costs 31.12. 31.12.
2011 2010
Research and development costs for the financial year 2 020 1 849
Amortization of previously capitalized development costs 262 395
Development costs recognized as an asset in the balance -209 -41
sheet
Research and development costs entered as expenses for 2 072 2 203
the financial year
- Changes in Intangible assets and in Property, 31.12. 31.12.
plant and equipment 2011 2010
Intangible assets
Carrying amount at the beginning of the financial 11 759 11 462
year
Exchange rate differences 16 71
Additions 609 151
Other reclassifications between items 63 75
Carrying amount at the end of the financial year 12 447 11 759
Accumulated depreciation and amortization at the -10 420 -9 631
beginning of the financial year
Exchange rate differences -8 -16
Other reclassifications between items 18 -
Depreciation for the financial year -604 -771
Accumulated depreciation and amortization at the -11 013 -10 420
end of the financial year
Book value of intangible assets, at the beginning 1 341 1 831
of the financial year
Book value of intangible assets, at the end of 1 433 1 341
the financial year
Property, plant and equipment
Carrying amount at the beginning of the financial 43 714 42 022
year
Exchange rate differences 117 1 696
Additions 983 2 060
Disposals -67 -1 989
Other reclassifications between items -285 -75
Carrying amount at the end of the financial year 44 463 43 714
Accumulated depreciation and amortization at the -34 801 -31 755
beginning of the financial year
Exchange rate differences -96 -1 568
Other reclassifications between items 202 -
Depreciation for the financial year -1 541 -1 478
Accumulated depreciation and amortization at the end of -36 236 -34 801
the financial year
Book value of Property, plant and equipment, at the 8 913 10 267
beginning of the financial year
Book value of Property, plant and equipment, at the end of 8 226 8 913
the financial year
10. Related party transactions
Raute Group's related parties consist of Board members, President and CEO,
Executive Board and Raute Corporation's Sickness
Fund. Based on the authorization given by the Annual General Meeting, the Board
of Directors of Raute Corporation has granted
stock options to the management. The main items of the terms and conditions of
the stock option plan 2010 and the effect
of issued options on the profit (loss) for the financial year have been
presented in Note 15. Group management's other employee
benefits are published in compliance with Annual
report 2011 in week 11.
- Interest-bearing liabilities 31.12. 31.12.
2011 2010
Non-current interest-bearing liabilities 10 937 10 000
recognized at amortized cost
Current interest-bearing liabilities 4 340 4 439
TOTAL 15 277 14 439
Maturities of the interest-bearing financial
liabilities
Financial liability Current Non-current Total
Pension loans (TyEL) 2 000 2 000 4 000
Loans from financial institutions 2 240 8 937 11 177
Other loans 100 - 100
Total 4 340 10 937 15 277
During the financial year, Raute Corporation drew out a financial institution
loan in the amount of SEK 52.9 million and
a financial institution loan in the amount of EUR 5.0 million. The interest rate
and currency risks of the interest-bearing
currency-denominated loan are hedged with an interest rate and currency swap
agreement. The euro-base financial loan
has a fixed interest rate.
- Other lease liabilities 31.12. 31.12.
Group as lessee 2011 2010
Minimum rents paid on the basis of other
non-cancellable leases:
- Within one year 546 547
- After the period of more than one and less than five 1 358 1 157
years
- More than five years 523 701
TOTAL 2 426 2 406
The Group has rented in a part of office and production premises. The rental
agreements are made for the time being or for the
fixed-term. The agreements made for the fixed-term include an option to extend
the rental period after the date of initial expiration.
13. Pledged assets and contingent liabilities
Raute Group has non-current credit regulation agreements worth EUR 5 million
(MEUR 10) of which EUR 5 million (MEUR 10)
were unused on December 31, 2011. The unused credit limit is secured
by a EUR 3 million business mortgage.
Raute Corporation has a EUR 10 million (MEUR 10) domestic commercial paper
program, which allows it to issue commercial
papers maturing in less than one year. The program is
arranged by Nordea Bank Finland Plc.
------------------------
31.12. 31.12.
2011 2010
Pledged assets on behalf of the Parent company
Loans from financial institutions 11 177 -
- Business mortgages 6 700 -
Pension loans (TyEL) 4 000 14 000
- Business mortgages 1 200 6 700
- Pledged assets - 1 000
- Credit insurance agreements 2 800 4 900
Other loans 100 100
- Real estate mortgages 101 134
Commercial bank guarantees on behalf of the Parent
company and subsidiaries 18 472 10 154
Mortgage agreements on behalf of subsidiaries
Loans from financial institutions 240 227
- Business mortgages 240 200
- Counter guarantees - 3 100
Other lease liabilities 2 426 2 406
Loans and guarantees on behalf of the related party
No loans are granted to the company's management. On December 31, 2011, the
Parent Company Raute Corporation had
loan receivables from its subsidiary Raute Service LLC EUR 355 thousand (EUR 355
thousand) and from Raute Canada Ltd.
EUR 1 152 thousand (EUR 0 thousand). Raute Corporation had a EUR 100 thousand
(EUR 100 thousand) liability to Raute
Sickness Fund.
No pledges have been given or other commitments made on behalf of the company's
management and shareholders.
- Currency derivatives and hedging instruments 31.12. 31.12.
2011 2010
Currency derivatives are used for hedging
purposes.
Nominal values of forward contracts in foreign currency
Economic hedging
- Related to financing 1 211 189
- Related to hedging of net sales 637 283
Fair values of forward contracts in foreign currency
Economic hedging
- Related to financing -32 -
- Related to the hedging of net sales 4 2
Interest rate and currency swap agreements
- Nominal value 5 937 -
- Fair value -285 -
15. Share-based payments
The fair value of the options granted according to the 2010 stock option plan is
recognized as an expense in the income
statement during the earning period of the options. The options granted during
the financial year 2010 are measured at fair
value at their grant date. Based on the authorization given by the Annual
General Meeting the Board of Directors
of Raute Corporation has granted 80,000 stock options marked with symbol 2010 B
to the Group's key persons during the
financial year 2011. The granted options have been
valued at fair value upon the grant date.
The conditions of the option systems granted during the
financial period are:
Arrangement Stock
option
Grant date May 31,
2011
Options granted 75,000 pcs
Subscription price EUR 9.83
Share price at the grant date EUR 10.50
Exercise period 3 years
Subscription period March 1,
2014 to
March 31,
2017
Settlement Shares
Arrangement Stock
option
Grant date September
26, 2011
Options granted 5,000 pcs
Subscription price EUR 9.83
Share price at the grant date EUR 7.33
Exercise period 3 years
Subscription period March 1,
2014 to
March 31,
2017
Settlement Shares
An expense of EUR 137 thousand was recognized for the options in the
income statement during the financial year.
16. Exchange rates used
1.1.-31.12 1.1.-31.12
. .
Income statement, euros 2011 2010
USD (US dollar) 1,3917 1,3268
CAD (Canadian dollar) 1,3756 1,3665
SGD (Singapore dollar) 1,7491 1,8080
CLP (Chilean peso) 672,0723 675,8537
RUB (Russian rouble) 40,8797 40,2780
CNY (Chinese juan) 8,9958 8,9805
31.12. 31.12.
Balance sheet, euros 2011 2010
USD (US dollar) 1,2939 1,3362
CAD (Canadian dollar) 1,3215 1,3322
SGD (Singapore dollar) 1,6819 1,7136
CLP (Chilean peso) 680,1710 626,1104
RUB (Russian rouble) 41,7650 40,8200
CNY (Chinese juan) 8,3499 8,7873
17. The Board of Directors' proposal for dividend distribution and measures
concerning the result
The Board of Directors' will propose to Raute Corporations's Annual General
Meeting 2012, to be held on April 16, 2012, that a
dividend of EUR 0.30 per share be paid for series A and series K shares for the
financial year 2011, that is, a total of EUR 1 201
thousand, and that the remainder, EUR 5 178 thousand, be retained to the equity.
18. Events after the balance sheet date
On February 10, 2012, Raute Corporation published a stock exchange release on
receiving over 50 million in orders. These
orders are not included in the December 31, 2011 order book.
GROUP KEY RATIOS 1.1.-31.12 1.1.-31.12
. .
2011 2010
Return on investment (ROI), % -0,1 5,1
Return on equity (ROE), % -4,7 4,9
Gearing, % -47,1 -39,8
Equity ratio, % 46,9 50,7
Order book, EUR million 36 33
Order intake, EUR million 77 72
Exported portion of net sales, % 88,0 91,9
Change in net sales, % 18,2 71,6
Gross capital expenditure, EUR million 1,9 2,2
% of net sales 2,5 3,5
Research and development costs, EUR 2,0 1,8
million
% of net sales 2,7 2,9
Earnings per share (EPS), EUR
- undiluted -0,27 0,29
- diluted -0,27 0,29
Equity to share, EUR 5,51 6,05
Dividend per share series K shares, EUR 0,30* 0,30
Dividend per share series A shares, EUR 0,30* 0,30
Dividend per profit, % -109,7* 103,8
Effective dividend return, % 4,8* 3,1
Share price at the end of the financial 6,20 9,70
year, EUR
Number of shares
- weighted average, 1 000 pcs 4 005 4 005
- diluted, 1 000 pcs 4 005 4 005
*Board of Directors' proposal to the Annual General
Meeting.
Calculation of key ratios
Return on investment (ROI), % = Profit before x 100 tax +
financial
expenses
---------------------------
Shareholders' equity +
interest-bearing
financial liabilities
(average of
the
financial
year)
Profit/loss x 100
for the
financial
year
---------------------------
Return on equity (ROE), % = Shareholders' equity
(average of the
financial year)
Interest-bearing
liabilities ./. (cash
and cash equivalents +
Interest-bearing net liabilities = financial assets at fair value through profit or
loss)
Gearing, % = Interest-bear x 100
ing net
financial
liabilities
---------------------------
Shareholders'
equity
Equity ratio, % = Shareholders' x 100
equity
---------------------------
Balance sheet
total ./.
advances
received
Earnings per share, undiluted, Profit for
the
financial
year
---------------------------
euros = Equity issue-adjusted
average number of shares
during the
financial
year
Earnings per share, diluted, Diluted
profit for
the
financial
year
---------------------------
euros = Diluted equity
issue-adjusted average
number of shares
Share of shareholders'
equity belonging to the
owners
Equity to share, euros = of the Parent
company
---------------------------
Undiluted number of
shares at the end of the
financial year
Dividend per share, euros = Distributed
dividend for
the
financial
year
---------------------------
Undiluted number of
shares at the end of the
financial year
Dividend per profit, % = Dividend per x 100
share
---------------------------
Earnings per
share
Effective dividend return, % = Dividend per x 100
share
---------------------------
Closing share price at
the end of the financial
year
Price/earnings ratio (P/E ratio) = Closing share price at
the end of the financial
year ---------------------------
Earnings per
share
Trend in share turnover, in volume and percentage
figures (series A shares)=
The trend in turnover of shares is
given as the number of shares
traded during the financial year and
as the percentage of the average
undiluted number of traded shares
relative to issued share stock
during the
financial
year.
Market value of capital stock = Undiluted number of
shares at the end of the
financila year
(series A +
series K
shares)
x closing price of the share on the
last day of the financial year
DEVELOPMENT OF Q 1 Q 2 Q 3 Q 4 Rolling Rolling
QUARTERLY RESULTS 2011 2011 2011 2011 1.1.2011 1.1.2010
(EUR 1 000) - -
31.12.2011 31.12.2010
NET SALES 14 627 23 136 21 626 14 934 74 323 62 867
Change in
inventories of
finished
goods and work in 95 723 223 -1 225 -184 351
progress
Other operating 32 68 45 23 168 4 580
income
Materials and -7 067 -13 891 -12 885 -5 561 -39 404 -32 679
services
Expenses from -6 047 -6 137 -5 397 -6 437 -24 019 -23 467
employee benefits
Depreciation and -542 -538 -530 -518 -2 128 -2 250
amortization
Other operating -2 540 -2 547 -2 071 -2 336 -9 494 -8 091
expenses
-----------
Total operating -16 196 -23 113 -20 883 -14 853 -75 045 -66 487
expenses
OPERATING PROFIT -1 442 814 1 011 -1 121 -738 1 311
% of net sales -10 4 5 -8 -1 2
Financial income 211 313 242 -60 705 728
Financial expenses -318 -362 -403 -10 -1 093 -917
PROFIT (LOSS) BEFORE -1 550 764 850 -1 190 -1 126 1 122
TAX
% of net sales -11 3 4 -8 -2 2
Income taxes 285 -244 -180 170 30 36
PROFIT (LOSS) FOR -1 265 520 670 -1 020 -1 095 1 158
THE PERIOD
% of net sales -9 2 3 -7 -1 2
Attributable to
Equity holders of -1 265 520 670 -1 020 -1 095 1 158
the Parent company
Earnings per share,
EUR
Undiluted earnings -0,32 0,13 0,17 -0,25 -0,27 0,29
per share
Diluted earnings per -0,32 0,13 0,17 -0,25 -0,27 0,29
share
Shares, 1 000 pcs
Adjusted average 4 005 4 005 4 005 4 005 4 005 4 005
number of shares
Adjusted average 4 014 4 012 4 005 4 005 4 005 4 005
number of shares,
diluted
----------------------------------
LARGEST SHAREHOLDERS AT Number of Number of
DECEMBER 31, 2011 series K series A
shares shares Total
(20 votes (1 vote number
per share) per share) of shares
- Sundholm Göran - 624 798 624 798
- Mandatum Henkivakuutusosakeyhtiö - 181 900 181 900
- Sijoitusrahasto Alfred Berg Small Cap - 142 628 142 628
Finland - Suominen Jussi Matias 48 000 74 759 122 759
- Mustakallio Kari Pauli 60 480 58 000 118 480
- Suominen Pekka 48 000 62 429 110 429
- Suominen Tiina Sini-Maria 48 000 62 316 110 316
- Siivonen Osku Pekka 50 640 53 539 104 179
- Kirmo Kaisa Marketta 50 280 41 826 92 106
- Mustakallio Mika Tapani 56 180 29 670 85 850
- Keskiaho Kaija Leena 33 600 51 116 84 716
- Särkijärvi Anna Riitta 60 480 22 009 82 489
- Mustakallio Ulla Sinikka 47 240 30 862 78 102
- Relander Harald Bertel - 65 000 65 000
- Sijoitusrahasto Nordea Suomi Small Cap - 63 489 63 489
- Mustakallio Marja Helena 43 240 18 162 61 402
- Särkijärvi-Martinez Anu Riitta 12 000 43 256 55 256
- Särkijärvi Timo 12 000 43 256 55 256
- Kirmo Lasse 30 000 24 110 54 110
- Suominen Jukka Matias 24 960 27 964 52 924
TOTAL 625 100 1 721 089 2 346 189
Share of total amount of shares, % 63,1 57,1 58,6
Share of total voting rights, % 63,1 57,1 62,3
Nominee-registered 59 202 59 202
Other shareholders 366 061 1 233 306 1 599 367
TOTAL 991 161 3 013 597 4 004 758
MANAGEMENT'S SHAREHOLDING 151 470 136 049 287 519
Share of total amount of shares, % 15,3 4,5 7,2
Share of total voting rights, % 15,3 4,5 13,9
SHARE INFORMATION 31.12. 31.12. 2011 2010
Number of shares
- Series K shares, ordinary shares (20 votes/share) 991 161 991 161
- Series A shares (1 vote/share) 3 013 597 3 013 597
Total 4 004 758 4 004 758
Trading of the company's shares (series A shares)
Trading of shares, pcs 522 287 646 052
Trading of shares, EUR million 4,3 5,2
Share price of the series A shares
At the end of the financial year, EUR 6,20 9,70
Highest price during the financial year, EUR 11,55 10,10
Lowest price during the financial year, EUR 6,05 7,24
Average price during the financial year, EUR 8,57 8,21
Market value of capital stock
- Series K shares, EUR million* 6,1 9,6
- Series A shares, EUR million 18,7 29,2
Total, EUR million 24,8 38,8
*Series K shares valued at the value of series A shares
at the end of the financial year.
RAUTE CORPORATION
Board of Directors
PRESS CONFERENCE ON FEBRUARY 14, 2012 AT 2 P.M.:
A press conference will be organized for analysts, investors and the media on
February 14, 2012 at 2 p.m. at Scandic
Simonkenttä Hotel, Roba cabinet, Simonkatu 9, Helsinki. The financial statements
will be presented by Mr. Tapani Kiiski,
President and CEO, and Ms. Arja Hakala, CFO.
FINANCIAL RELEASES IN 2012:
Raute's interim reports will be published as follows:
- January-March on Friday May 4, 2012
- January-June on Tuesday July 31, 2012
- January-September on Tuesday October 30, 2012.
Raute Corporation's consolidated financial statements and Annual
Report 2011 will be published during week 11.
Raute Corporation's Annual General Meeting will be held in Lahti, at Sibelius
Hall on Monday, April 16, 2012 at 6:00 p.m.
FURTHER INFORMATION:
Mr. Tapani Kiiski, President and CEO, Raute Corporation, tel. +358 3
829 3560, mobile +358 400 814 148
Ms. Arja Hakala, CFO, Raute Corporation, tel. +358 3
829 3293, mobile +358 400 710 387
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd, main media, www.raute.com
RAUTE IN BRIEF:
Raute is a technology and service company that operates worldwide. Raute's
customers are companies operating in the
wood products industry that manufacture veneer, plywood and LVL (Laminated
Veneer Lumber). The technology offering
covers machinery and equipment for the entire production process. As a supplier
of mill-scale projects Raute is a global
market leader both in the plywood and LVL industries. Additionally, Raute's
full-service concept includes services ranging from
spare parts deliveries to regular maintenance and equipment modernizations.
Raute's head office is located in Nastola, Finland.
Its other production plants are in the Vancouver area in Canada, in the Shanghai
area in China, and in Kajaani, Finland.
Raute's net sales in 2011 were EUR 74.3 million. The Group's
headcount at the end of 2011 was 464.
More information about the company can be found at
www.raute.com.
Attachments: