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Raute Oyj Interim / Quarterly Report 2012
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Interim / Quarterly Report
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RAUTE
Financial statements 2012
February 12, 2013
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
1 (21)
RAUTE CORPORATION — FINANCIAL STATEMENTS JANUARY 1–DECEMBER 31, 2012
- The Group's net sales, EUR 101.3 million (MEUR 74.3), increased 36% on the comparison year. Order intake was EUR 116 million (MEUR 77).
- Operating profit was EUR +5.0 million (MEUR -0.7). The result before tax was EUR +4.8 million (MEUR -1.1).
- Undiluted and diluted earnings per share were EUR +0.75 (EUR -0.27).
- Fourth quarter net sales were EUR 33.9 million and operating profit was EUR +3.1 million. Order intake was EUR 12 million and the order book stood at EUR 50 million (MEUR 36) at the end of the reporting period.
- Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.50 per share be paid for the financial year 2012.
- Raute's net sales and operating profit for 2013 are expected to remain at the same level as in 2012.
TAPANI KIISKI, PRESIDENT AND CEO: 2012 IS SOLID PROOF OF RAUTE'S DELIVERY CAPABILITIES
In 2012, we operated in a highly uncertain market environment. The insecurity related to the global economic and money-market trend was upheld by the risks associated with the growing debts of certain European countries and by the fears of a slowdown in economic growth in Asian countries. For Raute's customers, the uncertain market situation persisted in several market areas.
Despite the general market situation in the wood panel industry, 2012 was a clear improvement on the past few years for Raute. We kicked off the year with a satisfactory order book. In February, we received new orders worth more than EUR 50 million for machinery and equipment for the reconstruction of a plywood mill that had burned down in Chile in early January. In July, we received a significant machinery order valued at EUR 14 million for an LVL mill in Germany. In technology services, growth slowed down following the robust growth of the previous year. This was partly due to the allocation of both customers' and our own resources to large new construction projects.
Our biggest challenge in 2012 was an order book with a clear emphasis on the second part of the year. After a fairly modest EUR 15 million in the first quarter, our net sales gained momentum towards the end of the year, achieving a record high of nearly EUR 34 million in the final quarter. During the summer and the final part of the year, our personnel displayed their commitment to our customer promise involving delivery times. Of all of the working hours during the year, around one fifth were generated by our partners. Profitability improved towards the end of the year, hand in hand with growing net sales. We were thus able to prove that our ability to deliver has remained good despite the recession.
Heading into 2013, we still face a rather uncertain market situation. The economic outlook is not expected to improve
in the near future. In this situation, construction activity, demand for our customers' products and thus our customers' need to make capacity-increasing investments will remain low. Various projects are, however, in the planning and preparation phase, but the uncertain money-market and demand situation makes the implementation of new investments and the timing of their start-up uncertain. My strongest expectations this year are focused on the emerging markets in Russia and Asia. The outlook for North America has also improved from the extremely low level of the previous few years, and new projects are being planned in Europe. We believe that demand for technology services will take off on a growth trajectory.
I believe that Raute can look forward to strong competitiveness once our customers' faith in the future is restored and they begin to implement their planned investments. The escalation of the eurozone debt crisis into a full-scale recession still presents a potential threat to the positive development. A strong initial order book provides Raute with a good foundation for achieving the same level of net sales and operating profit this year as in 2012.
We will continue to focus our efforts on the implementation of our strategy and on development projects. Our development projects will put us in a better position to meet the challenges of the shifting markets and allow us to take advantage of the opportunities presented by the improving markets once the global economy regains its stability.
I would like to send out a heartfelt thank you to Raute's customers for their invaluable cooperation, to our personnel for their outstanding work in the face of ever-changing challenges, to our shareholders for their continued confidence in us, and to all our other partners for their role in furthering Raute's development.
RAUTE
Fourth Quarter of 2012
Order intake and order book
The order intake in the fourth quarter remained at a low level, amounting to EUR 12 million (MEUR 31). Technology services accounted for EUR 8 million (MEUR 8) of the order intake.
The order book weakened during the fourth quarter by EUR 22 million, amounting to EUR 50 million at the end of 2012 (MEUR 36).
Net sales
Fourth-quarter net sales were in line with the timing of the order book, equaling a record EUR 33.9 million (MEUR 14.9). Technology services accounted for 28 percent (36%) of net sales.
Result and profitability
Operating profit for the fourth quarter was EUR 3.1 million positive (MEUR 1.1 negative) and accounted for 9 percent (-8%) of net sales. The result was EUR 2.0 million positive (MEUR 1.0 negative), and earnings per share were EUR +0.50 (EUR -0.25).
Raute Corporation -- Financial statements January 1--December 31, 2012
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.
In 2012, the insecurity related to the development of the global economy and money markets was maintained by the threats connected to the indebtness of certain European countries and fears of a slowdown of economic growth in Asian countries. For Raute's customer industries, the market situation continued to be uncertain in several market areas.
Demand for wood products technology and technology services
In 2012, two significant new projects were launched among Raute's customers. A plywood mill that was destroyed in a fire in Chile at the beginning of January will be reconstructed and a new LVL mill, which will use beech as its raw material, will be constructed in Germany. Raute will be supplying the main machinery for both projects. The plywood and LVL industries' upgrade investments to ensure quality and cost competitiveness and to maintain market shares remained at a low level.
Several large projects encompassing single production lines and mill-scale deliveries that are in the planning and negotiation phase are pending. Customers will decide on and realize these projects only once they are more confident that demand has recovered permanently and once financing for the projects can be arranged.
The demand for maintenance and spare parts services remained at a good level throughout the year. This bears testimony to the fact that the utilization rates of Raute's customers' production facilities were mostly at a good level. Demand for technology services developed positively in North America, which is suffering from a difficult market situation.
Order intake and order book
Raute serves the wood products industry with a full-service concept based on service that encompasses the entire life cycle of the delivered equipment. Raute's business consists of project deliveries and technology services. Project deliveries comprise complete production machinery for new mills, production lines and individual machines and equipment. Additionally, Raute's full-service concept includes comprehensive technology services ranging from spare parts deliveries to regular maintenance and equipment modernizations as well as consulting, training and reconditioned machinery.
The order intake amounted to EUR 116 million (MEUR 77) during 2012. The order intake increased by 51 percent on the previous year. 48 percent of the new orders came from South America (26%), 31 percent from Europe (26%), 12 percent from Russia (38%), 6 percent from North America (8%) and 3 percent from Asia-Pacific (2%). The strong fluctuation in the distribution of new orders between the various market areas is typical for project business.
The order intake for project deliveries stood at EUR 89 million (MEUR 50) and increased on the previous year by 77 percent. The most significant transactions during 2012 consisted of an order that came into effect in February, amounting to more than EUR 50 million, for machinery and equipment for a plywood mill in Chile, and an order that came into effect in July, totaling EUR 14 million, for machinery for an LVL mill in Germany.
The order intake for technology services stood at EUR 27 million (MEUR 27). A decline in modernization projects, especially in Russia, led the order intake to remain on the previous year's level. Maintenance and spare parts services increased by 10 percent on the previous year.
Competitive position
Raute's competitive position is good. Raute's solutions help customers to secure 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 and its long-term dedication to serving selected customer industries also enhance its credibility and improve its competitive position as a company that carries out long-term investment projects.
Net sales
The Group's net sales were EUR 101.3 million (MEUR 74.3). Net sales grew by 36 percent on 2011. The growth in net sales was boosted by large individual orders. A large proportion of
the net sales were generated during the third and fourth quarters.
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 73 million (MEUR 47), up 55 percent from the previous year. Project deliveries accounted for 72 percent of total net sales (63%). The plywood industry's share of the net sales of project deliveries was 93 percent (68%), while the LVL industry's share was 7 percent (32%).
Net sales for technology services totaled EUR 28 million (MEUR 27). Net sales grew 4 percent from the previous year and accounted for 28 percent (37%) of total net sales. The growth of net sales remained low due to the decline in net sales from modernization projects.
South America's share of total net sales in 2012 was 52 percent (6%), Europe's 22 percent (26%), Russia's 14 percent (35%), North America's 8 percent (8%), and Asia-Pacific's 4 percent (25%).
Result and Profitability
The Group's operating profit for 2012 was EUR 5.0 million positive (MEUR 0.7 negative) and accounted for 5 percent (-1%) of net sales. The profitability of operations improved from the previous year due to the growth in net sales and a lighter cost structure resulting from earlier operational reorganization measures.
The Group's financial income and expenses totaled EUR -0.3 million (MEUR -0.4). The Group's result before tax was EUR 4.8 million positive (MEUR -1.1) and the result for the financial year was EUR 3.0 million positive (MEUR -1.1). The Group's comprehensive income totaled EUR 3.1 million positive (MEUR -1.1).
Undiluted and diluted earnings per share were EUR +0.75 (EUR -0.27). Return on investment was 15 percent (-0%) and return on equity +13 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 8.1 million (MEUR 10.4). At the end of the financial year gearing was -34 percent (-47%) and equity ratio 48 percent (47%).
The Group's cash and cash equivalents, including financial assets recognized at fair value through profit or loss, stood at EUR 19.5 million (MEUR 25.7) at the end of the financial year. The change in cash and cash equivalents in the financial year was EUR 6.2 million negative (MEUR 1.6 positive). Operating cash flow was EUR 1.9 million positive (MEUR 2.5 positive). Cash flow from investment activities totaled EUR 2.9 million negative (MEUR 1.7 negative). Cash flow from financing activities was EUR 5.2 million negative (MEUR 0.8 positive), including dividend payments of EUR 1.2 million (MEUR 1.2).
The Group's balance sheet total at the end of the year stood at EUR 63.1 million (MEUR 52.7). 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 the project business.
Interest-bearing liabilities amounted to EUR 11.5 million (MEUR 15.2) at the end of the reporting period, with current interest-bearing liabilities accounting for EUR 5.6 million (MEUR 4.3).
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 short-term credit facilities totaling EUR 5 million with a Nordic bank.
Loans to Related Parties and Other Liabilities
On December 31, 2012, 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 391 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 in 2012:
- February 10, 2012 Raute received orders valued at over EUR 50 million from Chile.
- April 16, 2012 Decisions by Raute's Annual General Meeting 2012.
- July 30, 2012 Raute received an order valued at over EUR 14 million from Germany.
- October 25, 2012 Change in Raute's Executive Board. The President of Raute's North American companies, Bruce Alexander, resigned from the Raute Group on October 24, 2012. The North American operations have been integrated with the Technology Services business segment, headed by Group Vice President Petri Lakka.
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 2012, the Group's research and development costs totaled EUR 2.5 million (MEUR 2.0) and 2.5 percent of net sales (2.7%). In 2012, 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. Additionally, the development of products designed for the emerging markets was continued.
The Group's investments during the financial year totaled EUR 3.5 million (MEUR 1.9). The largest single investments focused on technology acquisitions and product development in addition to acquisitions related to the new production plant in China. The investments include capitalized development costs worth EUR 1.0 (MEUR 0.2).
Development of Operations
The largest project in terms of developing production and delivery capabilities was the transfer of the Chinese plant into larger facilities at the end of the year. Increasing the company's own production capacity enables better control over the quality and delivery times of the components and equipment manufactured in China.
A maintenance service center was established in Latvia, a key customer region, in order to improve the service capabilities of technology services.
Personnel
The Group's headcount at the end of 2012 was 503 (464). Finnish Group companies accounted for 74 percent (75%) of employees, Chinese companies for 11 percent (10%), North American companies for 11 percent (11%), and other sales and maintenance companies for 4 percent (4%).
Converted to full-time employees (“effective headcount”), the average number of employees during the financial year was 480 (457). Salaries and remunerations paid by the Group totaled EUR 23.7 million (MEUR 19.9).
The Group continued to develop the competence of its personnel and increase their commitment to the company. 2 percent (2%) of the payroll was invested in personnel training. The “Great Place to Work” project was used to develop Raute as a work community and work environment. The objective of the Särmä (Edge) project, started at the end of the year, is to get Raute's entire personnel to commit even more strongly to Raute's customer promise and the better quality of products, services and operations.
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 73,000 stock options marked with the symbol 2010C to the Group's key employees on June 21, 2012. The share subscription period for 2010C stock options will be from March 1, 2015 to March 31, 2018 and the exercise price EUR 8.40. On December 31, 2012, the Group's key employees held a total of 70,500 previously granted series A stock options and 75,000 series B stock options. 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 the development of the 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 partner network.
Deliveries and technology
The bulk of Raute's business operations consists of project deliveries, which expose the company to risks caused by customer-specific 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 well-being 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, refinancing, interest rate 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: Chinese yuan (CNY), Russian ruble (RUB), Canadian dollar (CAD) and US dollar (USD). The main hedging instruments used are foreign currency forward contracts. Currency clauses are included in quotations 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 economic 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 Team 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 2012.
Shareholders
The number of shareholders totaled 1,667 at the beginning of the year and 1,682 at the end of the reporting period. Series K shares were held by 49 private individuals (49) at the end of the reporting period. Nominee-registered shares accounted for 3.3 percent (1.5%) of shares. No flagging notifications were given to the company in 2012.
The Board of Directors and the Group's President and CEO held altogether 226,529 company shares, equaling 5.7 percent (7.0%) of the company shares and 11.2 percent (13.8%) of the votes. The figures include the holdings of their own, minor children and control entities.
Auditors
At Raute Corporation's Annual General Meeting on April 16, 2012, 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.
Raute deviates from recommendation 9 on the number, composition and competence of the directors in that the company does not have both genders represented on the Board. On April 16, 2012 the shareholders proposed and the Annual General Meeting elected as Board members a group of persons consisting only of men.
An outline of Raute Corporation's corporate governance principles and the company's remuneration statement will be published together with the financial statements.
Corporate Governance Statement
Raute Corporation's Board of Directors has handled Raute Corporation's Corporate Governance Statement for 2012 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 Report of the Board of Directors and will be published together with the 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 16, 2012, Mr. Erkki Pehu-Lehtonen was elected Chairman of the Board, Mr. Mika Mustakallio Vice-Chairman and Mr. Joni Bask, Mr. Risto Hautamäki, Mr. Ilpo Helander and Mr. Pekka Suominen as Board members.
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, EMEA; Mr. Petri Lakka, Group Vice President, Technology Services; Mr. Petri Strengell, Group Vice President, Technology and Operations and, up to October 24, 2012, Mr. Bruce Alexander, Group Vice President, North American Operations.
Shares
The number of Raute Corporations shares at the end of 2012 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. During 2012, 302,096 shares were traded (522,287) worth altogether EUR 2.4 million (MEUR 4.3). The number of shares traded represents 10 percent (17%) of all listed series A shares. The average price of a series A share was EUR 8.22 (EUR 8.57). The highest closing price of the year was EUR 9.24 and the lowest EUR 6.18.
The company's market capitalization at the end of 2012 totaled EUR 36.0 million (MEUR 24.8), with series K shares valued at the closing price of series A shares, EUR 9.00 (EUR 6.20), on December 31, 2012.
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 2011 financial year
The Annual General Meeting held on April 16, 2012 decided to pay a dividend of EUR 0.30 per share for the financial year 2011. 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 16, 2012 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 2012.
The company did not possess company shares at the end of the financial period or hold them as security.
Annual general meeting 2013
Raute Corporation's Annual General Meeting will be held at Lahti's Sibelius Hall on Monday April 8, 2013 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 February 28, 2013.
Publication of the financial statements and annual report 2012
Raute Corporation's consolidated financial statements 2012 will be published on February 13, 2013. Raute Corporation's Annual Report 2012 will be published during week 9.
The Board of Directors' proposal for dividend distribution and measures concerning the result
According to the financial statements 2012, distributable assets total EUR 14,495 thousand. The Board of Directors will propose to Raute Corporation's Annual General Meeting, to be held on April 8, 2013, that a dividend of EUR 0.50 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 11, 2013 and the dividend payment date is April 18, 2013. 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 2013
Raute's business operations are characterized by the sensitivity of investment demand to cyclical fluctuations in the global economy and the financial markets.
Major uncertainty still overshadows the development of the global economy and financial markets due to the hazards of growing debt among a few European countries and the threats associated with the recovery of the US economy. Reports signaling a slowdown in economic growth in Asia, and in particular China, also add to the uncertainty. The market situation for Raute's customer industries is expected to remain uncertain.
However, improvement investments in the plywood industry to ensure quality and cost competitiveness and to maintain market shares are expected to be at a reasonable level in the near future, provided that the economic uncertainty does not spiral into a new crisis. In addition, several production line and mill-scale investment projects are being planned. The implementation and timing of these projects will depend on prospective investors' confidence that the market for wood products will remain at a reasonable level. The availability of financing for customer projects in some market areas will also be an important factor.
Thanks to its strong financial and market position and the development measures it has carried out, Raute is well positioned to respond to demand once the markets recover.
Uncertainty concerning the development of the economy in 2013 will be reflected in the investment decisions of Raute's customers and in the volume of new orders. Based on a strong initial order book and projects in the negotiation phase, Raute's net sales and operating profit for 2013 are expected to remain at the same level as in 2012.
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
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SUMMARY OF FINANCIAL STATEMENTS AND NOTES
The figures for the financial years 2011 and 2012 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
COMPREHENSIVE INCOME (EUR 1 000) | 1.10.-31.12. | | 1.10.-31.12. | | 1.1.-31.12. | |
| --- | --- | --- | --- | --- | --- | --- |
| | Note | 2012 | 2011 | 2012 | 2011 | |
| NET SALES | 3,4,5 | 33 914 | 14 934 | 101 273 | 74 323 | |
| Change in inventories of finished goods
and work in progress | | 551 | -1 225 | 500 | -184 | |
| Other operating income | | 1 256 | 23 | 1 423 | 168 | |
| Materials and services | | -19 388 | -5 561 | -55 725 | -39 404 | |
| Employee benefits expense | 12 | -8 038 | -6 437 | -28 752 | -24 019 | |
| Depreciation and amortization | | -491 | -518 | -1 968 | -2 128 | |
| Other operating expenses | | -4 680 | -2 336 | -11 720 | -9 494 | |
| Total operating expenses | | -32 597 | -14 853 | -98 165 | -75 045 | |
| OPERATING PROFIT (LOSS) | | 3 125 | -1 121 | 5 031 | -738 | |
| % of net sales | | 9,2 | -8 | 5 | -1 | |
| Financial income | | -37 | -60 | 482 | 705 | |
| Financial expenses | | -126 | -10 | -738 | -1 093 | |
| PROFIT (LOSS) BEFORE TAX | | 2 962 | -1 190 | 4 775 | -1 126 | |
| % of net sales | | 8,7 | -8 | 5 | -2 | |
| Income taxes | | -973 | 170 | -1 759 | 30 | |
| PROFIT (LOSS) FOR THE PERIOD | | 1 989 | -1 020 | 3 016 | -1 095 | |
| % of net sales | | 5,9 | -7 | 3 | -1 | |
| Other comprehensive income items: | | | | | | |
| Exchange differences on translating foreign operations | | 50 | 57 | 80 | 23 | |
| Cash flow hedging | | - | 19 | - | 19 | |
| Income tax related to cash flow hedges | | - | -5 | - | -5 | |
| Comprehensive income items for
the period, net of tax | | 50 | 71 | 80 | 37 | |
| COMPREHENSIVE PROFIT (LOSS) FOR THE PERIOD | | 2 038 | -949 | 3 096 | -1 058 | |
| Profit (loss) for the period attributable to | | | | | | |
| Equity holders of the Parent company | | 1 989 | -1 020 | 3 016 | -1 095 | |
| Comprehensive profit (loss) for the period
attributable to | | | | | | |
| Equity holders of the Parent company | | 2 038 | -949 | 3 096 | -1 058 | |
| Earnings per share for profit (loss) attributable
to Equity holders of the Parent company, EUR | | | | | | |
| Undiluted earnings per share | | 0,50 | -0,25 | 0,75 | -0,27 | |
| Diluted earnings per share | | 0,50 | -0,25 | 0,75 | -0,27 | |
| Shares, 1 000 pcs | | | | | | |
| Adjusted average number of shares | | 4 005 | 4 005 | 4 005 | 4 005 | |
| Adjusted average number of shares diluted | | 4 008 | 4 005 | 4 008 | 4 005 | |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
9 (21)
| CONSOLIDATED BALANCE SHEET
(EUR 1 000) | | Note | 31.12. 2012 | 31.12. 2011 |
| --- | --- | --- | --- | --- |
| ASSETS | | | | |
| Non-current assets | | | | |
| Intangible assets | | 8 | 3 204 | 1 433 |
| Property, plant and equipment | | 8 | 7 892 | 8 226 |
| Other financial assets | | | 789 | 789 |
| Receivables | | | - | 549 |
| Deferred tax assets | | | 60 | 1 601 |
| Non-current assets | | | 11 944 | 12 598 |
| Current assets | | | | |
| Inventories | | | 7 130 | 5 059 |
| Accounts receivables and other receivables | | 5 | 24 427 | 9 298 |
| Income tax receivable | | | 37 | 37 |
| Cash and cash equivalents | | | 19 548 | 25 674 |
| Current assets | | | 51 143 | 40 067 |
| TOTAL ASSETS | | | 63 087 | 52 666 |
| EQUITY AND LIABILITIES | | | | |
| Equity attributable to Equity holders of
the Parent company | | | | |
| Share capital | | | 8 010 | 8 010 |
| Share premium account | | | - | 6 498 |
| Other reserves | | | 6 862 | 187 |
| Exchange differences | | | 103 | 23 |
| Retained earnings | | | 6 150 | 8 447 |
| Profit (loss) for the period | | | 3 016 | -1 095 |
| Share of shareholders' equity that belongs
to the owners of the Parent company | | | 24 141 | 22 069 |
| Equity | | | 24 141 | 22 069 |
| Non-current liabilities | | | | |
| Provisions | | | 56 | 123 |
| Deferred tax liabilities | | | 174 | 0 |
| Non-current interest-bearing liabilities | | 9 | 5 866 | 10 937 |
| Pension obligations | | | 90 | - |
| Non-current liabilities | | | 6 186 | 11 060 |
| Current liabilities | | | | |
| Provisions | | | 1 134 | 697 |
| Pension obligations | | | - | 98 |
| Current interest-bearing liabilities | | 9 | 5 594 | 4 340 |
| Advance payments received | | 5 | 12 776 | 5 589 |
| Income tax liability | | | - | 416 |
| Trade payables and other liabilities | | | 13 255 | 8 399 |
| Current liabilities | | | 32 759 | 19 537 |
| Total liabilities | | | 38 946 | 30 597 |
| TOTAL EQUITY AND LIABILITIES | | | 63 087 | 52 666 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
10 (21)
| CONSOLIDATED STATEMENT OF CASH FLOWS
(EUR 1 000) | 1.1.–31.12.
2012 | 1.1.–31.12.
2011 |
| --- | --- | --- |
| CASH FLOW FROM OPERATING ACTIVITIES | | |
| Proceeds from sales | 90 385 | 64 268 |
| Proceeds from other operating income | 1 423 | 168 |
| Payments of operating expenses | -89 379 | -62 322 |
| Cash flow before financial items and taxes | 2 429 | 2 113 |
| Interest paid from operating activities | -529 | -163 |
| Dividends received from operating activities | 118 | 108 |
| Interests received from operating activities | 269 | 357 |
| Other financing items from operating activities | -275 | -183 |
| Income taxes paid | -75 | 298 |
| NET CASH FLOW FROM OPERATING ACTIVITIES (A) | 1 938 | 2 531 |
| | | |
| CASH FLOW FROM INVESTING ACTIVITIES | | |
| Purchase of property, plant and equipment and intangible assets | -3 055 | -1 589 |
| Proceeds from sale of property, plant and equipment and intangible assets | 160 | 133 |
| Purchase of assets-for-sale as investments | - | -293 |
| NET CASH FLOW FROM INVESTING ACTIVITIES (B) | -2 895 | -1 748 |
| | | |
| ACTIVITIES | | |
| Decrease of non-current and current receivables | - | 1 000 |
| Increase of current borrowings | - | 163 |
| Repayments of current borrowings | - | -115 |
| Increase of non-current borrowings | - | 11 000 |
| Repayments of non-current borrowings | -4 000 | -10 000 |
| Dividends paid | -1 201 | -1 201 |
| NET CASH FLOW FROM FINANCING ACTIVITIES (C) | -5 201 | 846 |
| | | |
| NET CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C) | -6 159 | 1 629 |
| increase (+)/decrease (-) | | |
| | | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 25 674 | 24 090 |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | -6 159 | 1 629 |
| EFFECTS OF EXCHANGE RATE CHANGES ON CASH | 33 | -45 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 19 548 | 25 674 |
| | | |
| CASH AND CASH EQUIVALENTS IN THE BALANCE SHEET AT THE END OF THE PERIOD | | |
| Cash and cash equivalents | 19 548 | 25 674 |
| TOTAL | 19 548 | 25 674** |
*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.
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
11 (21)
| CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | ||||||
|---|---|---|---|---|---|---|
| (EUR 1 000) | Share capital | Share premium | Invested non-restricted equity reserve | Other reserves | Exchange rate diff. | Retained earnings |
| EQUITY at Jan. 1, 2012 | 8 010 | 6 498 | 0 | 187 | 23 | 7 351 |
| Comprehensive profit (loss) for the period | ||||||
| Profit (loss) for the period | - | - | - | - | - | 3 016 |
| Other comprehensive income items: | ||||||
| Exchange differences on translating foreign operations | - | - | - | - | 80 | - |
| Cash flow hedging, net of tax | - | - | - | - | - | - |
| Total comprehensive profit (loss) for the period | 0 | 0 | 0 | 0 | 80 | 3 016 |
| Transactions with owners | ||||||
| Equity-settled share-based transactions | - | - | - | 177 | - | - |
| Reclassification between items | - | -6 498 | 6 498 | - | - | - |
| Dividends paid | - | - | - | - | - | -1 201 |
| EQUITY at Dec. 31, 2012 | 8 010 | 0 | 6 498 | 364 | 103 | 9 166 |
| CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (continue) | ||||||
| --- | --- | --- | ||||
| (1 000 EUR) | To the owners of the Parent Company | TOTAL | ||||
| EQUITY at Jan. 1, 2012 | 22 069 | 22 069 | ||||
| Comprehensive profit (loss) for the period | ||||||
| Profit (loss) for the period | 3 016 | 3 016 | ||||
| Other comprehensive income items: | ||||||
| Exchange differences on translating foreign operations | 80 | 80 | ||||
| Cash flow hedging, net of tax | - | - | ||||
| Total comprehensive profit (loss) for the period | 3 096 | 3 096 | ||||
| Transactions with owners | ||||||
| Equity-settled share-based transactions | 177 | 177 | ||||
| Reclassification between items | - | - | ||||
| Dividends paid | -1 201 | -1 201 | ||||
| EQUITY at Dec. 31, 2012 | 24 141 | 24 141 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
| (1 000 EUR) | Share capital | Share premium | Other reserves | Exchange rate diff. | Retained earnings | TOTAL |
|---|---|---|---|---|---|---|
| EQUITY at Jan. 1, 2011 | 8 010 | 6 498 | 36 | 35 | 9 648 | 24 227 |
| Comprehensive profit (loss) for the period | ||||||
| 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 | 0 | 0 | 14 | -12 | -1 095 | -1 093 |
| Transactions with owners | ||||||
| Equity-settled share-based transactions | - | - | 137 | - | - | 137 |
| Reclassification between items | - | - | - | - | - | - |
| Dividend paid | - | - | - | - | -1 201 | -1 201 |
| EQUITY at Dec. 31, 2011 | 8 010 | 6 498 | 187 | 23 | 7 351 | 22 069 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
12 (21)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Raute Group 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 12, 2013 reviewed the consolidated financial statement for January 1 - December 31, 2012, and approved it to be published in compliance with this release.
2. Accounting principles
Raute Corporation's financial statement release January 1 – December 31, 2012 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. Raute Corporation's financial statements with full notes will be published on February 13, 2013.
Raute Corporation's financial statement release for January 1 – December 31, 2012 has 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, 2012. The notes to the financial statements also comply with Finnish accounting legislation.
The financial statement release has been prepared according to the same accounting principles as those applied in the Annual financial statements for 2011 except for the certain new or revised standards, interpretations and amendments which the Group has applied as of January 1, 2012. The impact of the new and revised standards has been presented in the Annual 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.
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
13 (21)
3. Segment information
Operational segment
Continuing operations of Raute Group belong to the wood products technology segment.
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. Segment reporting follows the principles of presentation of the consolidated financial statements.
| 31.12. | 31.12. | |||
|---|---|---|---|---|
| Wood products technology | 2012 | 2011 | ||
| Net sales | 101 273 | 74 323 | ||
| Operating profit (loss) | 5 031 | -738 | ||
| Assets | 63 087 | 52 666 | ||
| Liabilities | 38 946 | 30 597 | ||
| Capital expenditure | 3 529 | 1 885 | ||
| Assets of the wood products technology segment by geographical location | 31.12. | 31.12. | ||
| 2012 | % | 2011 | % | |
| Finland | 53 631 | 85 | 46 196 | 88 |
| China | 4 406 | 7 | 1 550 | 3 |
| North America | 3 437 | 5 | 3 305 | 6 |
| Russia | 1 257 | 2 | 1 302 | 2 |
| South America | 199 | 0 | 170 | 0 |
| Others | 158 | 0 | 143 | 0 |
| TOTAL | 63 087 | 100 | 52 666 | 100 |
| Capital expenditure of the wood products technology segment by geographical location | 31.12. | 31.12. | ||
| 2012 | % | 2011 | % | |
| Finland | 2 980 | 84 | 1 824 | 97 |
| China | 517 | 15 | 36 | 2 |
| North America | 6 | 0 | 22 | 1 |
| Russia | 1 | 0 | 0 | 0 |
| South America | 22 | 1 | 2 | 0 |
| Others | 2 | 0 | 1 | 0 |
| TOTAL | 3 529 | 100 | 1 885 | 100 |
4. 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 modernizations 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 period, the Group had two customers (2), whose share of the Group's net sales temporarily exceeded ten percent. The share of the other customer was 36 percent and the other's 14 percent.
| Net sales by market area | 1.1.-31.12. | 1.1.-31.12. | ||
|---|---|---|---|---|
| 2012 | % | 2011 | % | |
| LAM (South America) | 52 588 | 52 | 4 301 | 6 |
| EMEA (Europe) | 22 179 | 22 | 19 608 | 26 |
| CIS (Russia) | 14 454 | 14 | 26 026 | 35 |
| NAM (North America) | 8 469 | 8 | 6 090 | 8 |
| APAC (Asia-Pasific) | 3 583 | 4 | 18 299 | 25 |
| TOTAL | 101 273 | 100 | 74 323 | 100 |
Finland accounted for 6 percent (12%) of net sales.
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
14 (21)
| 5. Long-term projects | 31.12. 2012 | 31.12. 2011 |
|---|---|---|
| Net sales | ||
| Net sales by percentage of completion | 85 267 | 58 760 |
| Other net sales | 16 006 | 15 563 |
| TOTAL | 101 273 | 74 323 |
| Project revenues entered as income from currently undelivered long-term projects recognized by percentage of completion | 89 601 | 45 250 |
| Amount of long-term project revenues not yet entered as income (order book) | 49 040 | 35 034 |
| Projects for which the value by percentage of completion exceeds advance payments invoiced | ||
| - aggregate amount of costs incurred and recognized profits less recognized losses | 64 872 | 16 805 |
| - advance payments received | 48 372 | 13 431 |
| Gross amount due from customers | 16 499 | 3 374 |
| Projects for which advance payments invoiced exceed the value by percentage of completion | ||
| - aggregate amount of costs incurred and recognized profits less recognized losses | 27 890 | 28 445 |
| - advance payments received | 40 394 | 33 704 |
| Gross amount due to customers | 12 504 | 5 259 |
| Specification of combined asset and liability items | ||
| Advance payments paid | 1 021 | 101 |
| Advance payments received included in inventories in the balance sheet | 1 021 | 101 |
| Advance payments in the balance sheet | 12 776 | 5 589 |
| 6. Number of personnel, persons | 31.12. 2012 | 31.12. 2011 |
| Effective, on average | 480 | 457 |
| In books, on average | 488 | 475 |
| In books, at the end of period | 503 | 464 |
| - of which personnel working abroad | 132 | 117 |
| 7. Research and development costs | 31.12. 2012 | 31.12. 2011 |
| Research and development costs for the period | 2 516 | 2 020 |
| Amortization of previously capitalized development costs | 126 | 262 |
| Development costs recognized as an asset in the balance sheet | -1 024 | -209 |
| Research and development costs entered as expense for the period | 1 618 | 2 072 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
15 (21)
| 8. Changes in Intangible assets and in Property, plant and equipment | 31.12. 2012 | 31.12. 2011 |
|---|---|---|
| Intangible assets | ||
| Carrying amount at the beginning of the period | 12 447 | 11 759 |
| Exchange rate differences | 7 | 16 |
| Additions | 2 198 | 609 |
| Reclassifications between items | -634 | 63 |
| Carrying amount at the end of the period | 14 019 | 12 447 |
| Accumulated depreciation and amortization at the beginning of the period | -11 013 | -10 420 |
| Exchange rate differences | -5 | -8 |
| Accumulated depreciation and amortization of disposals and reclassifications | 679 | 18 |
| Depreciation and amortization for the period | -474 | -604 |
| Accumulated depreciation and amortization at the end of the period | -10 815 | -11 013 |
| Book value of Intangible assets, at the beginning of the period | 1 433 | 1 341 |
| Book value of Intangible assets, at the end of the period | 3 204 | 1 433 |
| Property, plant and equipment | ||
| Carrying amount at the beginning of the period | 44 463 | 43 714 |
| Exchange rate differences | 88 | 117 |
| Additions | 1 331 | 983 |
| Disposals | -370 | -67 |
| Reclassifications between items | -3 839 | -285 |
| Carrying amount at the end of the period | 41 673 | 44 463 |
| Accumulated depreciation and amortization at the beginning of the period | -36 236 | -34 801 |
| Exchange rate differences | -70 | -96 |
| Accumulated depreciation and amortization of disposals and reclassifications | 4 019 | 202 |
| Depreciation and amortization for the period | -1 494 | -1 541 |
| Accumulated depreciation and amortization at the end of the period | -33 782 | -36 236 |
| Book value of Property, plant and equipment, at the beginning of the period | 8 226 | 8 913 |
| Book value of Property, plant and equipment, at the end of the period | 7 892 | 8 226 |
| 9. Interest-bearing liabilities | 31.12. 2012 | 31.12. 2011 |
| Non-current interest-bearing liabilities recognized at amortized cost | 5 866 | 10 937 |
| Current interest-bearing liabilities | 5 594 | 4 340 |
| TOTAL | 11 461 | 15 277 |
| Financial liability | Current | Non-current |
| --- | --- | --- |
| Pension loans (TyEL) | 2 000 | - |
| Loans from financial institutions | 3 494 | 5 866 |
| Other loans | 100 | - |
| Total | 5 594 | 5 866 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
16 (21)
| 10. Pledged assets and contingent liabilities | 31.12.
2012 | 31.12.
2011 |
| --- | --- | --- |
| On behalf of the Parent company | | |
| Loans from financial institutions | 9 117 | 11 177 |
| Business mortgages | 6 700 | 6 700 |
| Pension loans (TyEL) | 2 000 | 4 000 |
| Business mortgages | 600 | 1 200 |
| Credit insurance agreements | 1 400 | 2 800 |
| Other liabilities | 100 | 100 |
| Real estate mortgages | 101 | 101 |
| Mortgage agreements on behalf of subsidiaries | | |
| Loans from financial institutions | 244 | 240 |
| Business mortgages | 244 | 240 |
| Commercial bank guarantees on behalf of the Parent company and subsidiaries | 39 600 | 18 472 |
| Other own obligations | | |
| Rental liabilities maturing within one year | 868 | 546 |
| Rental liabilities maturing in one to five years | 2 682 | 1 358 |
| Rental liabilities maturing more than five years | 519 | 523 |
| Total | 4 069 | 2 426 |
Loans and guarantees on behalf of the related party
No loans are granted to the company's management. On December 31, 2012, 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 391 thousand (EUR 1 774 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.
| 11. Derivatives | 31.12.
2012 | 31.12.
2011 |
| --- | --- | --- |
| Nominal values of forward contracts in foreign currency | | |
| Economic hedging | | |
| - Related to financing | 2 093 | 1 211 |
| - Related to the hedging of net sales | 1 763 | 637 |
| Fair values of forward contracts in foreign currency | | |
| Economic hedging | -8 | -32 |
| - Related to financing | 18 | 4 |
| - Related to the hedging of net sales | | |
| Interest rate and currency swap agreements | | |
| - Nominal value | 4 117 | 5 937 |
| - Fair value | -4 | -285 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
17 (21)
12. 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. An expense of EUR 177 thousand (EUR 137 thousand) was recognized for the options in the income statement during the period. On June 21, 2012, Raute Corporation's Board of Directors issued, in compliance with the authorization by the Annual General Meeting, a total of 73 000 option rights marked with the symbol 2010 C to the Group's key personnel.
Key terms and conditions of the granted option arrangements are:
| Nature of arrangement | stock options |
|---|---|
| Grant date | 21.6.2012 |
| Number of stock options granted | 73 000 |
| Price, EUR | 8,40 |
| Share market value at grant date, EUR | 7,55 |
| Term, years | 3 |
| Subscription period | 1.3.2015-31.3.2018 |
| Realization | in shares |
13. Dividend distribution
Raute Corporations' Annual General Meeting decided to distribute a dividend of EUR 0,30 per share to be paid for series A and K shares. A total amount of dividends to be paid was EUR 1 201 427,40. The dividend payment date was April 26, 2012.
14. Exchange rates used
| 1.1.–31.12. | 1.1.–31.12. | |
|---|---|---|
| Income statement, euros | 2012 | 2011 |
| CNY (Chinese juan) | 8,1096 | 8,9958 |
| RUB (Russian rouble) | 39,9238 | 40,8797 |
| CAD (Canadian dollar) | 1,2848 | 1,3756 |
| USD (US dollar) | 1,2856 | 1,3917 |
| SGD (Singapore dollar) | 1,6062 | 1,7491 |
| CLP (Chilean peso) | 624,7032 | 672,0723 |
| 31.12. | 31.12. | |
| Balance sheet, euros | 2012 | 2011 |
| CNY (Chinese juan) | 8,1809 | 8,3499 |
| RUB (Russian rouble) | 40,3295 | 41,7650 |
| CAD (Canadian dollar) | 1,3137 | 1,3215 |
| USD (US dollar) | 1,3194 | 1,2939 |
| SGD (Singapore dollar) | 1,6111 | 1,6819 |
| CLP (Chilean peso) | 625,1146 | 680,171 |
15. The Board of Directors' proposal for dividend distribution and measures concerning the result of 2012
The Board of Directors will propose to Raute Corporation's Annual General Meeting, to be held on April 8, 2013, that a dividend of EUR 0.50 per share be paid for series A shares and series K shares for the financial year 2012, that is, a total of EUR 2 002 thousand, and that the remainder, EUR 12 492 thousand, be retained to the equity.
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
18 (21)
| FINANCIAL DEVELOPMENT | 31.12. 2012 | 31.12. 2011 |
|---|---|---|
| Change in net sales, % | 36,3 | 18,2 |
| Exported portion of net sales, % | 93,9 | 88,0 |
| Return on investment (ROI), % | 15,0 | -0,1 |
| Return on equity (ROE), % | 13,1 | -4,7 |
| Interest-bearing net liabilities, EUR million | -8,1 | -10,4 |
| Gearing, % | -33,5 | -47,1 |
| Equity ratio, % | 48,0 | 46,9 |
| Gross capital expenditure, EUR million | 3,5 | 1,9 |
| % of net sales | 3,5 | 2,5 |
| Research and development costs, EUR million | 2,5 | 2,0 |
| % of net sales | 2,5 | 2,7 |
| Order book, EUR million | 50 | 36 |
| Order intake, EUR million | 116 | 77 |
| SHARE-RELATED DATA | 31.12. 2012 | 31.12. 2011 |
| Earnings per share, (EPS), undiluted, EUR | 0,75 | -0,27 |
| Earnings per share, (EPS), diluted, EUR | 0,75 | -0,27 |
| Equity to share, EUR | 6,03 | 5,51 |
| Dividend per share, EUR | 0,50* | 0,30 |
| Dividend per profit, % | 66,4* | -109,7 |
| Effective dividend return, % | 5,6* | 4,8 |
| * Board of Directors' proposal to the Annual General Meeting. | ||
| Development in share price (series A shares) | ||
| Lowest share price for the period, EUR | 6,18 | 6,05 |
| Highest share price for the period, EUR | 9,24 | 11,55 |
| Average share price for the period, EUR | 8,22 | 8,57 |
| Share price at the end of the period, EUR | 9,00 | 6,20 |
| Market value of capital stock | ||
| - Series K shares, EUR million** | 8,9 | 6,1 |
| - Series A shares, EUR million | 27,1 | 18,7 |
| Total, EUR million | 36,0 | 24,8 |
| **Series K shares valued at the value of series A shares. | ||
| Trading of the company's shares (series A shares) | ||
| Trading of shares, pcs | 302 096 | 522 287 |
| Trading of shares, EUR million | 2,4 | 4,3 |
| 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 |
| Number of shares, weighted average, 1 000 pcs | 4 005 | 4 005 |
| Number of shares diluted, 1 000 pcs | 4 008 | 4 005 |
| The number of shareholders | 1 682 | 1 667 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
19 (21)
| DEVELOPMENT OF
QUARTERLY RESULTS
(EUR 1 000) | Q 1
2012 | Q 2
2012 | Q 3
2012 | Q 4
2012 | Rolling
1.1.2012
-
31.12.2012 | Rolling
1.1.2011
-
31.12.2011 |
| --- | --- | --- | --- | --- | --- | --- |
| NET SALES | 15 109 | 22 365 | 29 886 | 33 914 | 101 273 | 74 323 |
| Change in inventories of finished goods and
work in progress | 464 | 226 | -742 | 551 | 500 | -184 |
| Other operating income | 46 | 60 | 61 | 1 256 | 1 423 | 168 |
| Materials and services | -6 806 | -12 055 | -17 475 | -19 388 | -55 725 | -39 404 |
| Employee benefits expense | -6 635 | -6 997 | -7 083 | -8 038 | -28 752 | -24 019 |
| Depreciation and amortisation | -501 | -495 | -482 | -491 | -1 968 | -2 128 |
| Other operating expenses | -2 227 | -2 467 | -2 346 | -4 680 | -11 720 | -9 494 |
| Total operating expenses | -16 168 | -22 014 | -27 386 | -32 597 | -98 165 | -75 045 |
| OPERATING PROFIT (LOSS) | -549 | 637 | 1 818 | 3 125 | 5 031 | -738 |
| % of net sales | -4 | 3 | 6 | 9 | 5 | -1 |
| Financing income | 208 | 181 | 130 | -37 | 482 | 705 |
| Financing expenses | -195 | -150 | -267 | -126 | -738 | -1 093 |
| PROFIT (LOSS) BEFORE TAX | -536 | 669 | 1 680 | 2 962 | 4 775 | -1 126 |
| % of net sales | -4 | 3 | 6 | 9 | 5 | -2 |
| Income taxes | 72 | -406 | -451 | -973 | -1 759 | 30 |
| PROFIT (LOSS) FOR THE PERIOD | -464 | 263 | 1 229 | 1 989 | 3 016 | -1 095 |
| % of net sales | -3 | 1 | 4 | 6 | 3 | -1 |
| Attributable to equity holders of the Parent | -464 | 263 | 1 229 | 1 989 | 3 016 | -1 095 |
| Earnings per share, EUR | | | | | | |
| Undiluted earnings per share | -0,12 | 0,07 | 0,31 | 0,50 | 0,75 | -0,27 |
| Diluted earnings per share | -0,12 | 0,07 | 0,31 | 0,50 | 0,75 | -0,27 |
| Shares, 1 000 pcs | | | | | | |
| Adjusted average number of shares | 4 005 | 4 005 | 4 005 | 4 005 | 4 005 | 4 005 |
| Adjusted average number of shares diluted | 4 005 | 4 005 | 4 005 | 4 008 | 4 008 | 4 005 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
20 (21)
| LARGEST SHAREHOLDERS AT December 31, 2012 | Number of series K shares (20 votes per share) | Number of series A shares (1 vote per share) | Total number of shares |
|---|---|---|---|
| 1. Sundholm Göran | - | 624 398 | 624 398 |
| 2. Mandatum Henkivakuutusosakeyhtiö | - | 181 900 | 181 900 |
| 3. Mustakallio Kari Pauli | 60 480 | 56 900 | 117 380 |
| 4. Sijoitusrahasto Alfred Berg Small Cap Finland | - | 116 671 | 116 671 |
| 5. Suominen Pekka | 48 000 | 62 429 | 110 429 |
| 6. Suominen Tiina Sini-Maria | 48 000 | 62 316 | 110 316 |
| 7. Siivonen Osku Pekka | 50 640 | 53 539 | 104 179 |
| 8. Kirmo Kaisa Marketta | 50 280 | 41 826 | 92 106 |
| 9. Mustakallio Mika Tapani | 57 580 | 29 270 | 86 850 |
| 10. Keskiaho Kaija Leena | 33 600 | 51 116 | 84 716 |
| 11. Särkijärvi Anna Riitta | 60 480 | 22 009 | 82 489 |
| 12. Laakkosen Arvopaperi Oy | - | 71 849 | 71 849 |
| 13. Relander Harald Bertel | - | 70 900 | 70 900 |
| 14. Mustakallio Ulla Sinikka | 53 240 | 15 862 | 69 102 |
| 15. Mustakallio Marja Helena | 43 240 | 16 047 | 59 287 |
| 16. Särkijärvi Timo | 12 000 | 43 256 | 55 256 |
| 17. Särkijärvi-Martinez Anu Riitta | 12 000 | 43 256 | 55 256 |
| 18. Kirmo Lasse | 30 000 | 24 110 | 54 110 |
| 19. Suominen Jukka Matias | 24 960 | 27 964 | 52 924 |
| 20. Mustakallio Kai Henrik | 47 420 | 4 594 | 52 014 |
| TOTAL | 631 920 | 1 620 212 | 2 252 132 |
| Share of total amount of shares, % | 63,8 | 53,8 | 56,2 |
| Share of total voting rights, % | 63,8 | 53,8 | 62,4 |
| Nominee-registered | 132 984 | 132 984 | |
| Other shareholders | 359 241 | 1 260 401 | 1 619 642 |
| TOTAL | 991 161 | 3 013 597 | 4 004 758 |
| MANAGEMENT'S SHAREHOLDING | 122 880 | 108 899 | 231 779 |
| Share of total amount of shares, % | 12,4 | 3,6 | 5,8 |
| Share of total voting rights, % | 12,4 | 3,6 | 11,2 |
RAUTE
RAUTE CORPORATION
FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2012
February 12, 2013
21 (21)
RAUTE CORPORATION
Board of Directors
BRIEFING ON FEBRUARY 12, 2013 AT 2 P.M.:
A briefing will be organized for analysts, investors and the media on February 12, 2013 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 Mrs. Arja Hakala, CFO.
FINANCIAL RELEASES IN 2013:
Raute’s interim reports will be published as follows:
- January–March on Friday, April 26, 2013
- January–June on Tuesday, July 30, 2013
- January–September on Wednesday, October 30, 2013
Raute Corporation’s consolidated financial statements will be published on February 13, 2013. Raute Corporation’s Annual Report 2012 will be published during week 9.
Raute Corporation’s Annual General Meeting will be held in Lahti, at Sibelius Hall on Monday, April 8, 2013 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 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 of Canada, in the Shanghai area of China, and in Kajaani, Finland. Raute’s net sales in 2012 were EUR 101.3 million. The Group’s headcount at the end of 2012 was 503.
More information about the company can be found at www.raute.com.
RAUTE
RAUTE
RAUTE CORPORATION
Rautetie 2, P. O. Box 69
FI-15551 Nastola, Finland
Tel. +358 3 829 11
Fax +358 3 829 3200
[email protected]