Raute Oyj — Interim / Quarterly Report 2021

Apr 29, 2021

Raute Corporation - Interim Report January 1-March 31, 2021

Raute Corporation - Interim Report January 1-March 31, 2021

RAUTE CORPORATION INTERIM REPORT APRIL 29, 2021 AT 9:00 a.m.

This is a summary of Raute’s Interim financial report January 1-March 31, 2021.
The complete report is attached to this release as a pdf file and is also
available on the company’s’ website at www.raute.com.

RAUTE CORPORATION - INTERIM REPORT JANUARY 1–MARCH 31, 2021

• The Group’s first-quarter net sales, EUR 24.8 million (MEUR 23.8), increased
  4% on the comparison period.
• Operating profit amounted to EUR -2.5 million (MEUR -3.0), up 17%. The result
  before taxes was EUR -2.5 million (MEUR -2.9).
• Earnings per share were EUR -0.58 (EUR -0.52), and diluted earnings per share
  EUR -0.58 (EUR -0.52).
• Order intake, at EUR 30 million (MEUR 25), was at a reasonable level. The
  order book at the end of the reporting period stood at EUR 98 million (MEUR 92).
• Raute’s net sales are expected to grow in 2021 and operating profit to improve
  from 2020.

KEY FIGURES 1.1.-31.3.2021 1.1.-31.3.2020 1.1.-31.12.2020
Net sales, MEUR 24,8 23,8 115,0
Change in net 4,1 -42,4 -24,0
sales, %
Exported portion 92,4 95,2 94,2
of net sales, %
Operating profit, -2,5 -3,0 -1,9
MEUR
Operating profit, -10,1 -12,6 -1,6
% of net sales
Profit before -2,5 -2,9 -1,5
taxes, MEUR
Profit before -9,9 -12,1 -1,3
taxes, % of net
sales
Profit for the -2,5 -2,2 -0,9
period, MEUR
Profit for the -10,0 -9,4 -0,8
period, % of net
sales

Gross capital 1,1 0,9 5,2
expenditure, MEUR
% of net sales 4,6 3,9 4,5

Research and 1,2 1,4 4,6
development costs,
MEUR
% of net sales 4,9 5,9 4,0

Order book, MEUR 98 92 94
Order intake, MEUR 30 25 119

Personnel, at the 781 767 751
end of the period
Personnel, 757 754 743
effective, on
average
Personnel, on 765 776 760
average

TAPANI KIISKI, PRESIDENT AND CEO: BETTER DAYS AHEAD

In the first quarter of 2021, our net sales were only slightly higher than they
were in the comparison period. Although the result improved somewhat in relation
to net sales, it was nevertheless negative. As we predicted, the timing of our
confirmed order book did not increase net sales in the first quarter in a way
that would have boosted our result to an acceptable level.

The travel restrictions imposed due to the coronavirus pandemic continue to
hinder the implementation of installation supervision and commissioning and
maintenance services. However, the removal of these restrictions bit by bit as
vaccinations progress is creating optimism that business activities will
gradually begin to normalize this year. At the same time, I am pleased with the
abilities demonstrated by our customers and our personnel to continue working
using remote connections. The lessons learned will improve both our ability to
serve our customers and our flexibility also in the future.Demand picked up in
several market areas in the first quarter. Our first-quarter order intake, at
EUR 30 million, was at least at a reasonable level, especially considering that
no large mill-scale orders were received during the period. I am pleased that
mid-sized line orders and modernization orders were at a good level. For the
first time in a while, North America was our largest market area in terms of
order intake. The order intake for technology services was also at a good level.

A large order of nearly EUR 55 million that we received from Russia in early
October 2020 puts our order book on a solid footing for this year. With the
orders we have now received, our already strong order book grew, which
strengthens our outlook for the rest of the year. At our main production
facility in Lahti, we have been able to operate at near-normal capacity
throughout the pandemic. Of course, the various precautionary measures are
hindering development projects in particular. Of our operating areas, China is
the only one where activity has returned to a somewhat normal level. Our
facility there was operating normally and our customers’ projects continued to
move forward. Travel to China is still restricted due to the pandemic. This
hinders the collaboration of Raute’s experts from different locations in
implementing projects in China, as well as in sales and development projects. At
our North American facilities, the operating restrictions are currently being
lifted thanks to the coronavirus vaccinations.

The raw material market is now heating up, which is creating uncertainty. There
is pressure to raise the prices of raw materials and components, not to mention
uncertainty in their availability and delivery times. Our operational
organization is addressing these challenges, and I believe that we will find
solutions to this situation together with our partners.

The pandemic’s impact on the development of our markets has been in line with
our predictions. Accordingly, we will continue to invest in our stated strategic
priorities, the emerging markets and the development of our technology services
business and digitalization. Our strong financial position and market position,
as well as our long-standing customer relationships are important competitive
advantages and enablers of this type of long-term work.

Our outlook for 2021 remains unchanged, and we expect our net sales to grow and
our operating result to improve from last year.
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
projects and are thus highly affected by fluctuations in construction, housing
-related consumption, international trade, and transportation. We expect that
the trend-like growth in wood construction will create demand for our customers
and indirectly for Raute, strengthening our long-term growth opportunities.

In the first quarter, the situation and outlook in the global economy and the
financial markets picked up to some degree. Information about the start of
vaccinations has created positive expectations, and demand has remained strong
or strengthened. This year, we expect the market situation of our customer
industries to remain favorable and for things to get better also in areas that
have not yet experienced an upturn.

Demand for wood products technology and technology services
Many of Raute’s established and traditional customers have invested heavily in
recent years. In 2020, this traditional customer base of ours mostly returned to
traditional, lower investment volumes. The measures to contain the coronavirus
crisis further slowed the implementation and decision-making involved in the
investments of this traditional customer base in particular. As a result, the
focus of demand for our technology shifted towards new customer accounts. A
significant exception to this is the Russian market, where demand remained good.
Demand picked up in several market areas in the first quarter. At the same time,
the focus has shifted to smaller projects and modernizations. Decision-making on
such projects is faster than it is in larger new capacity projects. This is
evident when examining the first-quarter order intake. Mill projects are also
under way, but they have not yet reached the phase of ordering production
machinery.

Investment activity among Raute’s customers strengthened in the first quarter
compared to last year. We consider our order intake during the reporting period
to be reasonable, especially considering it does not include large mill
projects.

In Russia, demand remained active, although decisions were few and far between.
Forecasting the realization and timing of projects remains difficult. The
coronavirus pandemic continued to have a major impact on the emerging markets of
Asia and South America, and the markets practically came to a halt. The only
exception to this was China, where the planning of projects remained active and
from where we also received a medium-sized order. Demand resumed in Europe and
North America, and the order intake was at a reasonable level. North America
proved to be our largest market area for new orders during the first quarter.

Demand for maintenance and spare parts services remained good, which is an
indication of the generally good capacity utilization rates of Raute’s
customers’ production plants.

Outlook for 2021

Due to the strong order book and presumed alleviated impacts of the pandemic, we
expect that Raute’s net sales will increase in 2021 compared to the level of the
previous year. We expect the operating result to improve on the previous year
mostly due to growth in net sales.
RAUTE CORPORATION
Board of Directors
PRESENTATION OF THE INTERIM REPORT ONLINE ON APRIL 29, 2021, AT 2:00 PM:
Analysts, investors and the media can watch the presentation of the Interim
Report online on April 29, 2021, starting at 2 p.m. via MS Teams. The Teams link
will be sent to registered participants by email. The event will take place in
Finnish. Registrations to ir@raute.com.

The Interim Report will be presented by Mr. Tapani Kiiski, President and CEO,
and Ms. Tarja Järvinen, CFO. Analysists, investors and the media can send
questions related to the Interim Report in advance to the email address
ir@raute.com on April 29, 2021, until 2.30 p.m., after which President and CEO
Tapani Kiiski and Group Vice President, CFO Tarja Järvinen will answer the sent
questions in a live Interim Report presentation up until around 3 p.m. There
will also be an opportunity to present questions in Teams and through the Teams
chat channel.

President and CEO Tapani Kiiski has also reserved time for answering questions
over the phone after the Interim Report presentation, starting at 3 p.m. The
phone number is +358 400 814 148.
NEXT INTERIM REPORT:
Raute Corporation’s half-year report for January 1–June 30, 2021 will be
published on Friday, July 23, 2021.

FURTHER INFORMATION:
Mr. Tapani Kiiski, President and CEO, Raute Corporation, mobile phone +358 400
814 148
Ms. Tarja Järvinen, Group Vice President, Finance, CFO, Raute Corporation,
mobile phone +358 40 658 3562
DISTRIBUTION:
Nasdaq 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, LVL (Laminated Veneer Lumber) and sawn timber. Its technology
offering covers the entire production process for veneer, plywood and LVL and
special measurement equipment for sawn timber. 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 Lahti, Finland. The
company’s other production plants are located in Kajaani, Finland, the Vancouver
area of Canada, the Shanghai area of China and in Pullman, Washington, USA.
Raute’s net sales in 2020 were EUR 115.0 million. The Group’s headcount at the
end of 2020 was 751. More information about the company can be found at
www.raute.com.

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