2010-10-28 08:00:00 CEST
2010-10-28 08:00:10 CEST
REGULATED INFORMATION
Raute - Interim report (Q1 and Q3)
RAUTE CORPORATION - INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2010
RAUTE CORPORATION INTERIM REPORT 28 OCTOBER 2010 AT 9:00 A.M. RAUTE CORPORATION - INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2010 - The Group's net sales, EUR 49.5 million (MEUR 29.0), increased 71% on the comparison period. - The operating profit was EUR +3.6 million (MEUR -6.4) and the result before taxes EUR +3.5 million (MEUR -6.4). The result benefited from a EUR 4.4 million profit from a real estate sale. - Earnings per share (undiluted) were EUR +0.76 (EUR -1.31). - The order intake was EUR 46 million (MEUR 16). The order book fell and stood at EUR 20 million (MEUR 11) at the end of the reporting period. - Net sales for the third quarter were EUR 19.5 million and the operating profit EUR 4.9 million. Excluding the profit from the real estate sale, the operating profit was EUR +0.5 million. - The outlook for net sales and profit remained unchanged. Net sales for the entire year 2010 will increase and the operating profit will be positive. The operating profit for the fourth quarter will be in the negative due to the weakened order book and the resulting lower net sales for 2010. MR. TAPANI KIISKI, PRESIDENT AND CEO: MORE CHALLENGES IN THE SHORT TERM In the third quarter, our order book enabled a reasonable level of net sales, and we achieved a positive operating result from our operative activities. The result shows that our operations are competitive and profitable if demand remains at least at a moderate level. In the third quarter, we completed the operational reorganization measures in North America involving the move to new premises and the sale of the old factory facility. We received a considerable profit from the sale of the real estate, thanks to which we achieved a positive operating profit for the first three quarters of the year. There have been no essential changes in the market situation. Several substantial projects are under negotiation, but our customers' investment decisions have been further delayed and the order intake remained low. Until now, we have adjusted to the reduced demand, regarding it as a temporary phenomenon. We have operated at this low level for two years now, but mainly by implementing temporary adjustment measures. We will now adapt our operations to the new, lower level of demand on a more permanent basis. Therefore, in early October we initiated employee negotiations in accordance with the Act on Co-operation within Undertakings on adapting the operations of our Finnish units. Our aim is to adjust our operational structure to ensure that our operations are competitive and profitable in the long term, even during periods of weakened demand. Our challenge for the remaining part of the year lies in the low order book. Our main goals for the fourth quarter are to strengthen the order book and implement the above-mentioned operational model aimed at lower overhead costs. However, our order book for the rest of the year is weak and any new orders received will not have a significant effect on net sales recorded for this year. RAUTE CORPORATION - INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2010 BUSINESS ENVIRONMENT Market situation in customer industries Raute's customers in the plywood and LVL industries are engaged in the manufacturing of wood products used in investment commodities and thus highly affected by fluctuations in the fields of construction, housing-related consumption, international trade, and transportation. The recovery of global economic growth is still slow and uncertain. The difficult situation faced by the construction and transport industries continues. The demand for wood products remained at a low level in all market areas that are important to Raute. However, the demand has picked up compared with the corresponding period last year. The most successful mills have improved their capacity utilization rates, whereas some mills are still adjusting their production volumes to the lower demand by shortening their workweek and implementing shutdowns of varied duration. Production is still shut down at the plywood mills with the poorest profitability and the lowest efficiency. Demand for wood products technology and technology services Due to the low demand for wood products and the uncertain market outlook, investment activity in the plywood industry has remained at a low level in all market areas. Investment decisions on projects under planning and negotiations have been further delayed. Investments in the LVL industry, which is dependent solely on construction industry activity, remain at a low level in all market areas. The challenges of the financing markets in the emerging markets that are important to Raute and the conditions of long-term financing continue to restrict the investments of Raute's customers. Demand for maintenance and spare parts services will not improve before long-term recovery of the capacity utilization rates in plywood production. ORDER INTAKE AND ORDER BOOK Raute's business consists of providing project deliveries and technology services to the wood products industry. Project deliveries encompass complete mills, production lines, and individual machines and equipment. Technology services include maintenance, spare parts services, equipment modernization, consulting, training, and reconditioned machinery. The order intake for the reporting period, EUR 46 million (MEUR 16), was at good level, considering the market situation. 49 percent of orders received came from the Asia-Pacific area, 26 from Europe, 14 percent from North America, 8 percent from Russia and 3 percent from other market areas. Technology services accounted for EUR 12 million (MEUR 11) of the order intake. The order intake in the third quarter amounted to EUR 12 million (MEUR 5). The most significant new orders were an LVL line in Malaysia and a peeling line in Romania. The low number of new orders was due to uncertainty concerning the development in the wood products market and the resulting postponement of investment decisions. The order book weakened during the reporting period due to lower order intake, amounting to EUR 20 million (MEUR 11) at the end of the period. COMPETITIVE POSITION There have been no essential changes in Raute's competitive position, and thus Raute will be competitive when demand recovers. Customers appreciate comprehensive competence and strong technology development in their strategic investments aimed at ensuring their ability to deliver and provide service and to improve their competitiveness. The competitive edge provided by Raute's technology plays an important role when customers select their suppliers. Raute's strong financial position also enhances its credibility and improves its competitive position as an executor of long-term investment projects. NET SALES Net sales for the reporting period totaled EUR 49.5 million (MEUR 29.0), up by 71 percent on the comparison period. The increase in net sales was mainly due to two large orders received in December 2009 and January 2010. Net sales were generated exclusively by project deliveries and technology services related to the wood products technology business. Technology services accounted for 28 percent (34%) of net sales for the reporting period. Russia's share of total net sales was 34 percent (25%), Asia-Pacific's 30 percent (6%), Europe's 16 percent (53%), North America's 16 percent (6%), and South America's 4 percent (9%). Third-quarter net sales were EUR 19.5 million (MEUR 8.1). RESULT AND PROFITABILITY The two large new orders received in December and January started to show in the production workload and net sales growth during March. The Group's profitability during the reporting period improved substantially over the comparison period thanks to increased net sales and operational reorganization measures. Operating profit for the reporting period was EUR 3.6 million in the positive (MEUR 6.4 negative) and accounted for +7 percent (-22%) of net sales. The operating profit benefited from a EUR 4.4 million profit from a real estate sale. The operating result from operative activities for the reporting period was EUR 0.8 million in the negative. The operating profit for the reporting period includes one-time costs totaling EUR 0.8 million from the transfer of production operations from Jyväskylä to the main production plant in Nastola and relocation of the Canadian unit. The result before taxes for the reporting period was EUR 3.5 million in the positive (MEUR 6.4 negative). The result for the reporting period was EUR 3.0 million in the positive (MEUR 5.3 negative). Earnings per share (undiluted) were EUR +0.76 (EUR -1.31). Operating profit for the third quarter was EUR 4.9 million in the positive (MEUR 2.3 negative). The operating profit included a profit before taxes of EUR 4.4 million realized from a real estate sale. The third-quarter result was EUR 4.1 million (MEUR -1.8), and undiluted earnings per share were EUR +1.02 (EUR -0.45), and diluted earnings per share EUR +1.00 (EUR -0.45). Operating result from operative activities for the third quarter was EUR 0.5 million in the positive (MEUR 2.3 negative) and accounted for +3 percent (-28%) of net sales. CASH FLOW AND BALANCE SHEET The Group's financial position is good. At the end of the reporting period, gearing was -19 percent (-25%) and the equity ratio 50 percent (59%). The fluctuation in balance sheet items and the key figures based on them is a result of differences in the timing of customer payments and the cost accumulation from project deliveries, which is typical of project business. Raute's liquid assets stood at EUR 21.3 million (MEUR 16.0) at the end of the reporting period. The price of the real estate sale was included in accounts receivables and other receivables in the balance sheet at the end of the reporting period. Operating cash flow in the reporting period was EUR -3.1 million (MEUR -0.8). Cash flow from investment activities totaled EUR -0.7 million (MEUR -0.5). Cash flow from financing activities was EUR -2.6 million (MEUR -3.9) including a TyEL loan installment of EUR 2.0 million. Interest-bearing liabilities amounted to EUR 16.5 million (MEUR 9.5) at the end of the reporting period, with TyEL loans accounting for EUR 16.0 million (MEUR 9.0) Unused long-term credit limits amounted to EUR 5 million (MEUR 14). The company additionally has a EUR 10 million (MEUR 10) commercial paper program. EVENTS DURING THE REPORTING PERIOD Raute Canada Ltd., a Raute Group company, sold its factory facility in the Vancouver area in Canada. Raute Group received other operating income of EUR 4.4 million from the real estate sale. DEVELOPMENT OF OPERATIONS Raute's Canadian unit moved to newly leased facilities in the Vancouver area that are better configured to serve the needs of the current operational model. In conjunction with the relocation, production investments were carried out to improve productivity and shorten delivery times. Raute Corporation's quality system was re-audited, and it was awarded an ISO 2001:2008 quality certificate in September. RESEARCH AND DEVELOPMENT COSTS AND CAPITAL EXPENDITURES Research and development costs totaled EUR 1.2 million (MEUR 1.9) in the reporting period, representing 2.3 percent (6.6%) of net sales. Investments totaled EUR 1.8 million (MEUR 0.6) during the reporting period and were mainly targeted at reorganization and developing production in the Canadian unit. The investments include capitalized development costs worth EUR 17 thousand (EUR 108 thousand). PERSONNEL The Group's headcount at the end of the reporting period was 511 (530). Group companies outside Finland accounted for 25 percent (23%) of employees. The number of personnel was adjusted during the reporting period by 15 percent (18%) and the Group's entire personnel was affected by temporary lay-offs of varied duration and other adjustment arrangements. Converted to full-time employees (“effective headcount”), the average number of employees was 439 (446). SHARES The number of Raute Corporation's shares at the end of the reporting period 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 two euros. Series K shares can be converted to series A shares under the terms described in section 3 of the Articles of Association. If a series K share is transferred to a new owner who does not previously hold series K shares, other shareholders of the K series have the right to redeem the share under the terms described in section 4 of the Articles of Association. Raute Corporation's series A shares are listed on NASDAQ OMX Helsinki Ltd. 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. The company's market capitalization at the end of the reporting period was EUR 32.8 million (MEUR 35.0), with series K shares valued at the closing price of series A shares on September 30, 2010, that is EUR 8.20 (EUR 8.75). The Annual General Meeting authorized the Board of Directors on March 31, 2010 to decide on the repurchase of the company's series A shares with the company's distributable assets and a directed issue of a maximum of 400,000 of these shares. The Board of Directors did not exercise this authorization during the reporting period. The company did not possess any company shares during the reporting period. STOCK OPTION SCHEME On March 31, 2010 the Annual General Meeting decided on the issuance of a maximum of 240,000 stock options. In compliance with this authorization by the Annual General Meeting, the Board of Directors issued a total of 80,000 stock options marked with the symbol 2010A to the Group's key personnel on May 5, 2010. The share subscription period for 2010A stock options will be from March 1, 2013 to March 31, 2016 and the exercise price EUR 7.64. The terms and conditions of the stock option scheme are available on the company's website. SHAREHOLDERS The number of shareholders totaled 1,820 at the beginning of the year and 1,759 at the end of the reporting period. Series K shares are held by 50 private individuals (46). Management held 7.0 percent (5.0%) of the company shares and 12.5 percent (9.1%) of the votes. Nominee-registered shares accounted for 2.1 percent (2.3%) of shares. The company gave no flagging notifications in the third quarter. ANNUAL GENERAL MEETING 2010 Raute Corporation's Annual General Meeting was held on March 31, 2010. Information on the decisions made by the Annual General Meeting can be found in the stock exchange release issued on March 31, 2010. DISTRIBUTION OF DIVIDEND FOR THE FINANCIAL YEAR 2009 No dividend was paid for 2009. CORPORATE GOVERNANCE Raute Corporation complies with the Finnish Corporate Governance Code 2010 for listed companies approved by the Board of the Securities Market Association in June 2010. Raute deviates from the recommendation 22 to elect members to the Appointments Committee in that one member to the Committee is elected from outside the Board of Directors, from among the major shareholders who have significant voting rights. The Board views this exception as justified, when 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. Raute Corporation's Corporate Governance Statement 2009 has been drawn up separately from the financial statements and is published on the company's website. BOARD OF DIRECTORS AND BOARD COMMITTEES At Raute Corporation's Annual General Meeting on March 31, 2010, Mr. Erkki Pehu-Lehtonen was elected Chairman of the Board for Raute Corporation, Ms. Sinikka Mustakallio Vice-Chair and Mr. Risto Hautamäki, Mr. Ilpo Helander, Mr. Mika Mustakallio and Mr. Pekka Suominen as Board members. Based on the evaluation of independence, Chairman Erkki Pehu-Lehtonen and members Risto Hautamäki, Ilpo Helander, Mika Mustakallio and Pekka Suominen are independent of the company. Vice-Chair Sinikka Mustakallio, who chaired Raute's Supervisory Board from 1996 to 1998 and has acted as a member of the Board since 1998, is dependent on the company. The Chairman of the Board (Erkki Pehu-Lehtonen) and two Board members (Ilpo Helander and Risto Hautamäki) are independent of major shareholders. Raute Corporation's Board of Directors has an Appointments Committee and a Working Committee. The Appointments Committee is chaired by Erkki Pehu-Lehtonen and its members are Sinikka Mustakallio and Ville Korhonen, who has been elected by the major shareholders from among themselves. The Working Committee is chaired by Erkki Pehu-Lehtonen and its members are Sinikka Mustakallio and Risto Hautamäki. The Audit Committee's tasks are handled by the Board of Directors. BUSINESS RISKS Risks in the near term continue to be driven by the global economic situation and the uncertainty concerning its development. During the reporting period, there have been no essential changes in the business risks described in the 2009 Board of Directors' report and financial statements. The most significant risks for Raute in the near term relate to the order intake and order book and the development of net sales and profitability as a result of them. EVENTS AFTER THE REPORTING PERIOD In its stock exchange release issued on October 1, 2010, Raute Corporation adjusted the profit outlook for 2010. Raute had previously estimated that net sales for 2010 would increase and that the operating profit would improve from 2009. The company had also announced that achieving a positive operating profit and its amount would depend on the order intake. In October, it was stated that the finalized real estate sale improved the Group's profit prospects. In addition, it was announced that net sales for the entire year 2010 would increase and the operating result would be positive. Raute Corporation will continue to adjust its operations to the continuing weak and uncertain market situation. On October 8, 2010, the company initiated negotiations in accordance with the Act on Co-operation within Undertakings on adaptation measures with the salaried and senior salaried employees of its units in Finland. The lower level of demand for investments and services in the wood products industry is estimated to have become a more long-term situation, in which efficient and competitive performance in operations requires also permanent adaptation where personnel is concerned. The objective of the measures is to adapt operations to the continuing weak market demand and the fluctuation of the order book, and to improve profitability. The employer's proposal for adjustment measures consists of temporary lay-offs and the termination of the employment of a maximum of 25 employees. The negotiations are estimated to last six weeks. OUTLOOK FOR 2010 Due to the uncertainty related to the development of the global economy and financial markets, the market situation of Raute's customer industries is expected to continue to be uncertain. No permanent improvement is expected in the demand for investments and services in the wood products industry in the near future. Individual mill-scale investment projects, which customers are already using as a means of preparing for the period following the present recession, are, however, in the planning phase in many market areas, but they involve uncertainties related to implementation and scheduling. In addition, restructuring resulting from the difficult situation in the customer industries may activate new investment projects. Thanks to its strong financial position, market position and the implemented development efforts, Raute's ability to survive the economic slowdown and to respond to growing demand as soon as the markets recover will be excellent. The objective of the current adjustment process is to improve the cost structure and profitability even at a lower level of net sales. The outlook for net sales and profit remained unchanged. Raute's net sales for the entire year 2010 will increase, and the operating result will be positive thanks to the real estate sale finalized in the third quarter. The operating profit for the fourth quarter will be in the negative due to the weakened order book and the resulting lower net sales for 2010. TABLES SECTION OF THE INTERIM REPORT CONSOLIDATED FINANCIAL STATEMENTS JANUARY 1 - SEPTEMBER 30, 2010 The figures presented in the Interim financial report have not been audited except the figures of the financial statements for 2009. -------------------------------------------------------------------------------- | CONSOLIDATED | | | | | | | | STATEMENT OF | | | | | | | -------------------------------------------------------------------------------- | COMPREHENSIVE INCOME | | | | | | | -------------------------------------------------------------------------------- | (EUR 1 000) | Note | 1.7. | 1.7. | 1.1.- | 1.1.- | 1.1.- | -------------------------------------------------------------------------------- | | | 30.9. | 30.9. | 30.9. | 30.9. | 31.12. | -------------------------------------------------------------------------------- | | | 2010 | 2009 | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- | NET SALES | 3,4,5 | 19 490 | 8 057 | 49 471 | 28 988 | 36 638 | -------------------------------------------------------------------------------- | Other operating | | | | | | | -------------------------------------------------------------------------------- | income | 10 | 4 431 | -10 | 4 570 | 130 | 153 | -------------------------------------------------------------------------------- | Increase (+) or | | | | | | | -------------------------------------------------------------------------------- | decrease (-) in | | | | | | | -------------------------------------------------------------------------------- | inventories of | | | | | | | -------------------------------------------------------------------------------- | finished goods and | | | | | | | -------------------------------------------------------------------------------- | work in progress | | -45 | 107 | -464 | 495 | 795 | -------------------------------------------------------------------------------- | Materials and | | | | | | | -------------------------------------------------------------------------------- | services | | 11 001 | 3 444 | 25 284 | 12 428 | 15 695 | -------------------------------------------------------------------------------- | Expenses from | | | | | | | -------------------------------------------------------------------------------- | employee benefits | 16 | 5 450 | 4 776 | 17 048 | 16 294 | 22 047 | -------------------------------------------------------------------------------- | Depreciation and | | | | | | | -------------------------------------------------------------------------------- | amortization | | 580 | 701 | 1 676 | 2 041 | 2 670 | -------------------------------------------------------------------------------- | Other operating | | | | | | | -------------------------------------------------------------------------------- | expenses | | 1 913 | 1 508 | 5 924 | 5 220 | 6 869 | -------------------------------------------------------------------------------- | Total operating | | | | | | | -------------------------------------------------------------------------------- | expenses | | 18 944 | 10 429 | 49 933 | 35 983 | 47 281 | -------------------------------------------------------------------------------- | OPERATING PROFIT | | 4 932 | -2 274 | 3 644 | -6 370 | -9 695 | -------------------------------------------------------------------------------- | % of net sales | | 25 | -28 | 7 | -22 | -26 | -------------------------------------------------------------------------------- | Financial income | | -98 | 46 | 463 | 286 | 356 | -------------------------------------------------------------------------------- | Financial expenses | | 21 | -101 | -579 | -342 | -551 | -------------------------------------------------------------------------------- | PROFIT (LOSS) BEFORE | | 4 855 | -2 330 | 3 528 | -6 426 | -9 890 | | TAX | | | | | | | -------------------------------------------------------------------------------- | % of net sales | | 25 | -29 | 7 | -22 | -27 | -------------------------------------------------------------------------------- | Income taxes | 7 | -755 | 514 | -502 | 1 174 | 1 749 | -------------------------------------------------------------------------------- | PROFIT (LOSS) FOR | | | | | | | -------------------------------------------------------------------------------- | THE PERIOD | | 4 100 | -1 816 | 3 026 | -5 252 | -8 141 | -------------------------------------------------------------------------------- | % of net sales | | 21 | -23 | 6 | -18 | -22 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other comprehensive | | | | | | | -------------------------------------------------------------------------------- | income items: | | | | | | | -------------------------------------------------------------------------------- | Exchange | | | | | | | -------------------------------------------------------------------------------- | differences | | | | | | | -------------------------------------------------------------------------------- | on translating | | | | | | | -------------------------------------------------------------------------------- | foreign operations | | -19 | -132 | -67 | -264 | -228 | -------------------------------------------------------------------------------- | Cash flow hedging | | 5 | 0 | 13 | 0 | 0 | -------------------------------------------------------------------------------- | Income tax related to | | | | | | | -------------------------------------------------------------------------------- | cash flow hedging | | -1 | 0 | -3 | 0 | 0 | -------------------------------------------------------------------------------- | Other comprehensive | | | | | | | -------------------------------------------------------------------------------- | income items for | | | | | | | -------------------------------------------------------------------------------- | the period, | | | | | | | -------------------------------------------------------------------------------- | net of tax | | -15 | -132 | -57 | -264 | -228 | -------------------------------------------------------------------------------- | COMPREHENSIVE PROFIT | | | | | | | | (LOSS) | | | | | | | -------------------------------------------------------------------------------- | FOR THE PERIOD | | 4 085 | -1 948 | 2 969 | -5 516 | -8 369 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit (loss) for the | | | | | | | -------------------------------------------------------------------------------- | period attributable | | | | | | | | to | | | | | | | -------------------------------------------------------------------------------- | Equity holders of the | | | | | | | -------------------------------------------------------------------------------- | Parent company | | 4 100 | -1 816 | 3 026 | -5 252 | -8 141 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Comprehensive profit | | | | | | | -------------------------------------------------------------------------------- | (loss) for the period | | | | | | | -------------------------------------------------------------------------------- | attributable to | | | | | | | -------------------------------------------------------------------------------- | Equity holders of | | | | | | | -------------------------------------------------------------------------------- | the Parent company | | 4 085 | -1 948 | 2 969 | -5 516 | -8 369 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share | | | | | | | -------------------------------------------------------------------------------- | for profit (loss) | | | | | | | -------------------------------------------------------------------------------- | attributable | | | | | | | -------------------------------------------------------------------------------- | to Equity holders of | | | | | | | -------------------------------------------------------------------------------- | the Parent company, | | | | | | | | EUR | | | | | | | -------------------------------------------------------------------------------- | Undiluted earnings | | | | | | | | per | | | | | | | -------------------------------------------------------------------------------- | share | | 1,02 | -0,45 | 0,76 | -1,31 | -2,03 | -------------------------------------------------------------------------------- | Diluted earnings | | | | | | | -------------------------------------------------------------------------------- | per share | | 1,00 | -0,45 | 0,75 | -1,31 | -2,03 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shares, 1 000 pcs | | | | | | | -------------------------------------------------------------------------------- | Adjusted average | | | | | | | -------------------------------------------------------------------------------- | number of shares | | 4 005 | 4 005 | 4 005 | 4 003 | 4 003 | -------------------------------------------------------------------------------- | Adjusted average | | | | | | | -------------------------------------------------------------------------------- | number of shares | | | | | | | -------------------------------------------------------------------------------- | diluted | | 4 085 | 4 005 | 4 048 | 4 003 | 4 003 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | | | | | -------------------------------------------------------------------------------- | (EUR 1 000) | Note | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | | -------------------------------------------------------------------------------- | Intangible assets | 9 | 1 637 | 1 856 | 1 831 | -------------------------------------------------------------------------------- | Tangible assets | 9 | 8 751 | 10 329 | 10 267 | -------------------------------------------------------------------------------- | Other financial assets | | 497 | 499 | 486 | -------------------------------------------------------------------------------- | Receivables | | 0 | 0 | 1 000 | -------------------------------------------------------------------------------- | Deferred tax assets | | 1 350 | 2 066 | 1 741 | -------------------------------------------------------------------------------- | Total | | 12 235 | 14 750 | 15 325 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | | -------------------------------------------------------------------------------- | Inventories | | 4 704 | 4 390 | 4 330 | -------------------------------------------------------------------------------- | Accounts receivables and | | | | | -------------------------------------------------------------------------------- | other receivables | 5 | 18 205 | 10 736 | 9 832 | -------------------------------------------------------------------------------- | Cash and | | | | | -------------------------------------------------------------------------------- | cash equivalents | | 21 307 | 16 007 | 27 900 | -------------------------------------------------------------------------------- | Total | | 44 215 | 31 134 | 42 062 | -------------------------------------------------------------------------------- | TOTAL ASSETS | | 56 450 | 45 884 | 57 387 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND | | | | | -------------------------------------------------------------------------------- | LIABILITIES | | | | | -------------------------------------------------------------------------------- | Equity attributable to | | | | | -------------------------------------------------------------------------------- | Equity holders of | | | | | -------------------------------------------------------------------------------- | the Parent company | | | | | -------------------------------------------------------------------------------- | Share capital | | 8 010 | 8 010 | 8 010 | -------------------------------------------------------------------------------- | Share premium | | 6 498 | 6 498 | 6 498 | -------------------------------------------------------------------------------- | Other funds | 16 | 335 | 294 | 294 | -------------------------------------------------------------------------------- | Exchange differences | | -12 | 19 | 55 | -------------------------------------------------------------------------------- | Retained earnings | | 8 196 | 16 337 | 16 337 | -------------------------------------------------------------------------------- | Profit (loss) for the | | 3 026 | -5 252 | -8 141 | | period | | | | | -------------------------------------------------------------------------------- | Share of shareholders' | | | | | -------------------------------------------------------------------------------- | equity that belongs | | | | | -------------------------------------------------------------------------------- | to owners of | | | | | -------------------------------------------------------------------------------- | the Parent company | | 26 053 | 25 906 | 23 053 | -------------------------------------------------------------------------------- | Total shareholders' equity | | 26 053 | 25 906 | 23 053 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Long-term liabilities | | | | | -------------------------------------------------------------------------------- | Provisions | | 45 | 240 | 182 | -------------------------------------------------------------------------------- | Deferred tax liabilities | | 257 | 561 | 271 | -------------------------------------------------------------------------------- | Long-term interest-bearing | | | | | -------------------------------------------------------------------------------- | liabilities | 12 | 12 245 | 7 231 | 14 318 | -------------------------------------------------------------------------------- | Total | | 12 547 | 8 032 | 14 771 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Short-term liabilities | | | | | -------------------------------------------------------------------------------- | Provisions | | 1 029 | 1 236 | 1 325 | -------------------------------------------------------------------------------- | Pension obligations | | 124 | 153 | 143 | -------------------------------------------------------------------------------- | Short-term interest-bearing | | | | | -------------------------------------------------------------------------------- | liabilities | 12 | 4 215 | 2 301 | 4 215 | -------------------------------------------------------------------------------- | Advance payments received | 5 | 4 532 | 1 638 | 7 222 | -------------------------------------------------------------------------------- | Current tax liabilities | | 134 | 0 | 0 | -------------------------------------------------------------------------------- | Trade and other payables | | 7 815 | 6 619 | 6 658 | -------------------------------------------------------------------------------- | Total | | 17 850 | 11 947 | 19 563 | -------------------------------------------------------------------------------- | Total liabilities | | 30 397 | 19 979 | 34 334 | -------------------------------------------------------------------------------- | TOTAL SHAREHOLDERS' EQUITY | | | | | -------------------------------------------------------------------------------- | AND LIABILITIES | | 56 450 | 45 884 | 57 387 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW STATEMENT | | | | -------------------------------------------------------------------------------- | (EUR 1 000) | 1.1.-30.9. | 1.1.-30.9. | 1.1.-31.12 | -------------------------------------------------------------------------------- | | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- | CASH FLOW FROM OPERATING | | | | -------------------------------------------------------------------------------- | ACTIVITIES | | | | -------------------------------------------------------------------------------- | Proceeds from sales | 45 385 | 34 821 | 50 988 | -------------------------------------------------------------------------------- | Proceeds from other | | | | -------------------------------------------------------------------------------- | operating income | 103 | 68 | 85 | -------------------------------------------------------------------------------- | Payments of operating expenses | -47 930 | -35 495 | -46 020 | -------------------------------------------------------------------------------- | Cash flow before financial | | | | -------------------------------------------------------------------------------- | items and taxes | -2 443 | -606 | 5 053 | -------------------------------------------------------------------------------- | Interests and other operating | | | | -------------------------------------------------------------------------------- | financial expenses paid | -869 | -326 | -486 | -------------------------------------------------------------------------------- | Interests and other income | | | | -------------------------------------------------------------------------------- | received | 131 | 146 | 423 | -------------------------------------------------------------------------------- | Dividends received | 87 | 79 | 79 | -------------------------------------------------------------------------------- | Income taxes paid | 11 | -58 | 550 | -------------------------------------------------------------------------------- | NET CASH FLOW FROM OPERATING | | | | -------------------------------------------------------------------------------- | ACTIVITIES (A) | -3 084 | -765 | 5 619 |-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH FLOW FROM INVESTING | | | | -------------------------------------------------------------------------------- | ACTIVITIES | | | | -------------------------------------------------------------------------------- | Capital expenditure in | | | | -------------------------------------------------------------------------------- | tangible and intangible | | | | -------------------------------------------------------------------------------- | assets | -1 721 | -528 | -1 034 | -------------------------------------------------------------------------------- | Purchases of assets-for-sale | | | | -------------------------------------------------------------------------------- | as investments | -11 | 0 | 0 | -------------------------------------------------------------------------------- | Proceeds from sale of tangible | | | | -------------------------------------------------------------------------------- | and intangible assets | 990 | 58 | 79 | -------------------------------------------------------------------------------- | NET CASH FLOW FROM INVESTING | | | | -------------------------------------------------------------------------------- | ACTIVITIES (B) | -741 | -471 | -955 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH FLOW FROM FINANCING | | | | -------------------------------------------------------------------------------- | ACTIVITIES | | | | -------------------------------------------------------------------------------- | Increase of long-term and | | | | -------------------------------------------------------------------------------- | short-term receivables | -500 | 0 | -3 000 | -------------------------------------------------------------------------------- | Increase of short-term | | | | -------------------------------------------------------------------------------- | liabilities | 0 | 201 | 0 | -------------------------------------------------------------------------------- | Repayments of short-term | | | | -------------------------------------------------------------------------------- | liabilities | -100 | -125 | -125 | -------------------------------------------------------------------------------- | Increase of long-term | | | | -------------------------------------------------------------------------------- | liabilities | 0 | 0 | 10 200 | -------------------------------------------------------------------------------- | Repayments of long-term | | | | -------------------------------------------------------------------------------- | liabilities | -2 000 | -1 000 | -2 000 | -------------------------------------------------------------------------------- | Repurchase of own shares | 0 | -138 | -138 | -------------------------------------------------------------------------------- | Dividends paid | 0 | -2 803 | -2 803 | -------------------------------------------------------------------------------- | NET CASH FLOW FROM FINANCING | | | | -------------------------------------------------------------------------------- | ACTIVITIES (C) | -2 599 | -3 866 | 2 134 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET CHANGE IN CASH | | | | -------------------------------------------------------------------------------- | AND CASH EQUIVALENTS (A+B+C) | | | | -------------------------------------------------------------------------------- | increase (+)/decrease (-) | -6 425 | -5 103 | 6 798 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH AND CASH EQUIVALENTS | | | | -------------------------------------------------------------------------------- | AT THE BEGINNING OF THE PERIOD* | 27 900 | 21 109 | 21 109 | -------------------------------------------------------------------------------- | EFFECTS OF EXCHANGE | | | | -------------------------------------------------------------------------------- | RATE CHANGES ON CASH | -168 | 0 | -7 | -------------------------------------------------------------------------------- | CASH AND CASH EQUIVALENTS | | | | -------------------------------------------------------------------------------- | AT THE END OF THE PERIOD* | 21 307 | 16 007 | 27 900 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH AND CASH EQUIVALENTS | | | | -------------------------------------------------------------------------------- | IN THE BALANCE SHEET | | | | -------------------------------------------------------------------------------- | AT THE END OF THE PERIOD | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 21 307 | 16 007 | 27 900 | -------------------------------------------------------------------------------- | TOTAL | 21 307 | 16 007 | 27 900 | -------------------------------------------------------------------------------- *Cash and cash equivalents comprise trading assets as well as cash and bank receivables, which will be due within the following three months' period. -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | -------------------------------------------------------------------------------- | (EUR 1 000) | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Share | Share | Other | Exchange | Retained | -------------------------------------------------------------------------------- | | capital | premium | funds | rate | earnings | -------------------------------------------------------------------------------- | | | | | diff. | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2010 | 8 010 | 6 498 | 294 | 55 | 8 196 | -------------------------------------------------------------------------------- | Profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | | | | | 3 026 | -------------------------------------------------------------------------------- | Comprehensive | | | | | | | profit | | | | | | -------------------------------------------------------------------------------- | (loss) for the period: | | | | | -------------------------------------------------------------------------------- | Exchange | | | | | | | differences | | | | | | -------------------------------------------------------------------------------- | on translating | | | | | | -------------------------------------------------------------------------------- | foreign | | | | -67 | | | operations | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedging, | | | | | | -------------------------------------------------------------------------------- | net of tax | | | 10 | | | -------------------------------------------------------------------------------- | Total | | | | | | | comprehensive | | | | | | -------------------------------------------------------------------------------- | profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | 0 | 0 | 10 | -67 | 3 026 | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares | | | | | | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares, | | | | | | -------------------------------------------------------------------------------- | tax effect | | | | | | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | | | 31 | | | -------------------------------------------------------------------------------- | Dividend paid | | | | | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Sept. 30, 2010 | 8 010 | 6 498 | 335 | -12 | 11 222 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (continue) | -------------------------------------------------------------------------------- | (EUR 1 000) | To the | | Minority | | EQUITY | -------------------------------------------------------------------------------- | | owners | | interest | | TOTAL | -------------------------------------------------------------------------------- | | of the | | | | | -------------------------------------------------------------------------------- | | Parent | | | | | -------------------------------------------------------------------------------- | | company | | | | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2010 | 23 053 | | 0 | | 23 053 | -------------------------------------------------------------------------------- | Profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | 3 026 | | | | 3 026 | -------------------------------------------------------------------------------- | Comprehensive | | | | | | | profit | | | | | | -------------------------------------------------------------------------------- | (loss) for the period: | | | | | -------------------------------------------------------------------------------- | Exchange | | | | | | | differences | | | | | | -------------------------------------------------------------------------------- | on translating | | | | | | -------------------------------------------------------------------------------- | foreign | -67 | | | | -67 | | operations | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedging, | | | | | | -------------------------------------------------------------------------------- | net of tax | 10 | | | | 10 | -------------------------------------------------------------------------------- | Total | | | | | | | comprehensive | | | | | | -------------------------------------------------------------------------------- | profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | 2 969 | | 0 | | 2 969 | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares | 0 | | | | 0 | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares, | | | | | | -------------------------------------------------------------------------------- | tax effect | 0 | | | | 0 | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | 31 | | | | 31 | -------------------------------------------------------------------------------- | Dividend paid | 0 | | | | 0 | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Sept. 30, 2010 | 26 053 | | 0 | | 26 053 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | -------------------------------------------------------------------------------- | (EUR 1 000) | | | | | | -------------------------------------------------------------------------------- | | Share | Share | Other | Exchange | Retained | -------------------------------------------------------------------------------- | | capital | premium | funds | rate | earnings | -------------------------------------------------------------------------------- | | | | | diff. | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2009 | 8 010 | 6 498 | 287 | 283 | 19 242 | -------------------------------------------------------------------------------- | Profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | | | | | -5 252 | -------------------------------------------------------------------------------- | Comprehensive | | | | | | | profit | | | | | | -------------------------------------------------------------------------------- | (loss) for the period: | | | | | -------------------------------------------------------------------------------- | Exchange | | | | | | | differences | | | | | | -------------------------------------------------------------------------------- | on translating | | | | | | -------------------------------------------------------------------------------- | foreign | | | | -264 | | | operations | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedging, | | | | | | -------------------------------------------------------------------------------- | net of tax | | | | | | -------------------------------------------------------------------------------- | Total | | | | | | | comprehensive | | | | | | -------------------------------------------------------------------------------- | profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | 0 | 0 | 0 | -264 | -5 252 | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares | | | | | -138 | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares, | | | | | | -------------------------------------------------------------------------------- | tax effect | | | | | 36 | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | | | 7 | | | -------------------------------------------------------------------------------- | Dividend paid | | | | | -2 803 | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Sept. 30, 2009 | 8 010 | 6 498 | 294 | 19 | 11 085 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (continue) | -------------------------------------------------------------------------------- | (EUR 1 000) | To the | | Minority | | EQUITY | -------------------------------------------------------------------------------- | | owners | | interest | | TOTAL | -------------------------------------------------------------------------------- | | of the | | | | | -------------------------------------------------------------------------------- | | Parent | | | | | -------------------------------------------------------------------------------- | | company | | | | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2009 | 34 321 | | 0 | | 34 321 | -------------------------------------------------------------------------------- | Profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | -5 252 | | | | -5 252 | -------------------------------------------------------------------------------- | Comprehensive | | | | | | | profit | | | | | | -------------------------------------------------------------------------------- | (loss) for the period: | | | | | -------------------------------------------------------------------------------- | Exchange | | | | | | | differences | | | | | | -------------------------------------------------------------------------------- | on translating | | | | | | -------------------------------------------------------------------------------- | foreign | -264 | | | | -264 | | operations | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedging, | | | | | | -------------------------------------------------------------------------------- | net of tax | 0 | | | | 0 | -------------------------------------------------------------------------------- | Total | | | | | | | comprehensive | | | | | | -------------------------------------------------------------------------------- | profit (loss) for | | | | | | -------------------------------------------------------------------------------- | the period | -5 516 | | 0 | | -5 516 | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares | -138 | | | | -138 | -------------------------------------------------------------------------------- | Repurchase of own | | | | | | -------------------------------------------------------------------------------- | shares, | | | | | | -------------------------------------------------------------------------------- | tax effect | 36 | | | | 36 | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | 7 | | | | 7 | -------------------------------------------------------------------------------- | Dividend paid | -2 803 | | | | -2 803 | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Sept. 30, 2009 | 25 906 | | 0 | | 25 906 | -------------------------------------------------------------------------------- NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. General information Raute Group is a globally operating technology corporation which manufactures complete mills, production lines and single machines for the veneer, plywood and LVL industries. Raute's technology offering covers the customers' entire production process, ranging from raw material processing to the finishing and packaging of end products. Additionally, Raute's total service concept includes technology services, such as maintenance, spare parts services, equipment modernization, consulting, training and sales of reconditioned machinery. The Group has production units in Finland, Canada and China. The company's sales network has a global reach. The Group's Parent company, Raute Corporation, is a Finnish public limited liability company 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 2009 are available online at www.raute.com or at the head office of the Parent company, Rautetie 2, FI-15550 Nastola, Finland. Raute Corporation's Board of Directors has on October 28, 2010 reviewed the Group's Interim financial report for January 1 - September 30, 2010, and approved the Interim financial report for January 1 - September 30, 2010 to be published in compliance with this release. 2. Accounting principles Raute Corporation's Interim financial report January 1 - September 30, 2010 has been prepared in accordance with standard IAS 34 Interim Financial Reporting. The Interim financial report does not contain full notes and other information presented in the financial statements. Therefore, the Interim financial report should be read in conjunction with the Financial statements published for 2009. Raute Group's Interim financial report January 1 - September 30, 2010 has been prepared applying the accounting principles described in the Annual financial statements for 2009 and the following new and amended standards and interpretations which have taken effect on January 1, 2010 or later: - IFRS 3 Business Combinations, amendment to standard - IFRS 5 Non-current assets held for sale and discontinued operations, amendment to standard - IAS 27 Consolidated Financial Statements and Separate Financial Statements, amendment to standard - IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items, amendment to standard - IFRS 2 Share-Based Payments. The following new standards, standard amendments, and interpretations are in effect for the financial year beginning January 1, 2010, but they did not significantly affect the result or the balance of the Group or the financial statement presentation: - IFRIC 9 Reassessment of Embedded Derivatives and IAS 39 Financial Instruments: Recognition and Measurement - Embedded Derivatives - IFRIC 18 Transfer of Assets from Customers. The figures presented in the Interim financial report have not been audited except the figures for the financial statements for 2009. Figures in parentheses refer to the corresponding figures in the comparison period. All the monetary figures presented in this interim report are in thousands 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. The preparation of Interim financial report according to IFRS-standards requires management to use estimates and assumptions when adopting accounting principles. In addition, the management must exercise its judgement in selecting and applying the accounting policies. These estimates and assumptions affect the assets and liabilities in the Group's balance sheet, the disclosure of commitments and possible assets in the consolidated financial statements, and income and expenses for the period. Actual results may differ from the estimates. 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. -------------------------------------------------------------------------------- | | 30.9. | | 30.9. | | 31.12. | | -------------------------------------------------------------------------------- | Wood products technology | 2010 | | 2009 | | 2009 | | -------------------------------------------------------------------------------- | Net sales | 49 471 | | 28 988 | | 36 638 | | -------------------------------------------------------------------------------- | Operating profit | 3 644 | | -6 370 | | -9 695 | | -------------------------------------------------------------------------------- | Assets | 56 450 | | 45 884 | | 57 387 | | -------------------------------------------------------------------------------- | Liabilities | 30 397 | | 19 979 | | 34 334 | | -------------------------------------------------------------------------------- | Capital expenditure | 1 785 | | 556 | | 1 095 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets of the wood | | | | | | | | products | | | | | | | -------------------------------------------------------------------------------- | technology segment by | 30.9. | | 30.9. | | 31.12. | | -------------------------------------------------------------------------------- | geographical location | 2010 | % | 2009 | % | 2009 | % | -------------------------------------------------------------------------------- | Finland | 46 497 | 83 | 41 402 | 90 | 53 448 | 94 | -------------------------------------------------------------------------------- | North America | 7 308 | 13 | 2 835 | 6 | 1 950 | 3 | -------------------------------------------------------------------------------- | China | 1 430 | 4 | 0 | 1 | 858 | 1 | -------------------------------------------------------------------------------- | Russia | 929 | 2 | 495 | 1 | 948 | 2 | -------------------------------------------------------------------------------- | South America | 146 | 0 | 77 | 0 | 88 | 0 | -------------------------------------------------------------------------------- | Others | 140 | 0 | 1 075 | 2 | 95 | 0 | -------------------------------------------------------------------------------- | TOTAL | 56 450 | 100 | 45 884 | 100 | 57 387 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital expenditure of the | | | | | | | -------------------------------------------------------------------------------- | wood products technology | 30.9. | | 30.9. | | 31.12. | | | segment | | | | | | | -------------------------------------------------------------------------------- | by geographical location | 2010 | % | 2009 | % | 2009 | % | -------------------------------------------------------------------------------- | Finland | 315 | 18 | 544 | 98 | 1 071 | 98 | -------------------------------------------------------------------------------- | North America | 1 444 | 81 | 5 | 1 | 18 | 2 | -------------------------------------------------------------------------------- | China | 6 | 0 | 1 | 0 | 3 | 0 | -------------------------------------------------------------------------------- | Russia | 0 | 0 | 2 | 0 | 2 | 0 | -------------------------------------------------------------------------------- | South America | 20 | 1 | 4 | 1 | 0 | 0 | -------------------------------------------------------------------------------- | Others | 0 | 0 | 0 | 0 | 1 | 0 | -------------------------------------------------------------------------------- | TOTAL | 1 785 | 100 | 556 | 100 | 1 095 | 100 | -------------------------------------------------------------------------------- 4. Net sales The main part of the net sales is comprised of project deliveries related to wood processing technology that are treated as long-term projects. The rest of the net sales is comprised of technology services provided to the wood products industry (spare parts, maintenance and modernization services as well as services provided to the development of customers' business). The significant part of the Group's net sales (project deliveries and modernization in technology services) includes both product and service sales. Breakdown of the Group's net sales into purely product and service sales cannot be presented reliably. -------------------------------------------------------------------------------- | 4. Net sales | | | | | | | -------------------------------------------------------------------------------- | | 1.1.- | | 1.1.- | | 1.1.- | | -------------------------------------------------------------------------------- | Net sales | 30.9. | | 30.9. | | 31.12. | | -------------------------------------------------------------------------------- | by market area | 2010 | % | 2009 | % | 2009 | % | -------------------------------------------------------------------------------- | Russia | 16 696 | 34 | 7 389 | 25 | 11 237 | 31 | -------------------------------------------------------------------------------- | Asia-Pacific | 14 676 | 30 | 1 796 | 6 | 2 241 | 6 | -------------------------------------------------------------------------------- | North America | 8 048 | 16 | 1 758 | 6 | 2 549 | 7 | -------------------------------------------------------------------------------- | Rest of Europe | 4 710 | 9 | 8 664 | 30 | 10 415 | 28 | -------------------------------------------------------------------------------- | Finland | 3 606 | 7 | 6 721 | 23 | 6 172 | 17 | -------------------------------------------------------------------------------- | South America | 1 735 | 4 | 2 530 | 9 | 3 853 | 11 | -------------------------------------------------------------------------------- | Others | 0 | 0 | 130 | 1 | 171 | 1 | -------------------------------------------------------------------------------- | TOTAL | 49 471 | 100 | 28 988 | 100 | 36 638 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 5. Long-term projects | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Net sales | | | | -------------------------------------------------------------------------------- | Net sales by percentage | | | | -------------------------------------------------------------------------------- | of completion | 41 388 | 22 207 | 26 990 | -------------------------------------------------------------------------------- | Other net sales | 8 084 | 6 781 | 9 648 | -------------------------------------------------------------------------------- | TOTAL | 49 471 | 28 988 | 36 638 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Project revenues entered | | | | -------------------------------------------------------------------------------- | as income from currently | | | | -------------------------------------------------------------------------------- | undelivered long-term | | | | -------------------------------------------------------------------------------- | projects recognized | | | | -------------------------------------------------------------------------------- | by percentage of completion | 48 638 | 45 932 | 27 184 | -------------------------------------------------------------------------------- | Amount of long-term project | | | | -------------------------------------------------------------------------------- | revenues not yet entered | | | | -------------------------------------------------------------------------------- | as income (order book) | 19 066 | 8 827 | 20 976 | -------------------------------------------------------------------------------- | Specification of combined | | | | -------------------------------------------------------------------------------- | asset and liability items: | | | | -------------------------------------------------------------------------------- | Advance payments paid | 223 | 57 | 389 | -------------------------------------------------------------------------------- | Advance payments received | | | | -------------------------------------------------------------------------------- | included in inventories | | | | -------------------------------------------------------------------------------- | in the balance sheet | 223 | 57 | 389 | -------------------------------------------------------------------------------- | Accrued income | | | | -------------------------------------------------------------------------------- | corresponding to revenues | | | | -------------------------------------------------------------------------------- | by percentage of completion | 48 595 | 46 117 | 27 306 | -------------------------------------------------------------------------------- | Advance payments received from | | | | -------------------------------------------------------------------------------- | project customers | -44 106 | -39 758 | -24 060 | -------------------------------------------------------------------------------- | Project receivables included | | | | -------------------------------------------------------------------------------- | in current assets in | | | | -------------------------------------------------------------------------------- | the balance sheet | 4 489 | 6 359 | 3 246 | -------------------------------------------------------------------------------- | Advance payments received | | | | -------------------------------------------------------------------------------- | in the balance sheet | 4 532 | 1 638 | 7 222 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 6. Number of personnel, persons | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Effective, on average | 439 | 446 | 419 | -------------------------------------------------------------------------------- | In books, on average | 516 | 547 | 542 | -------------------------------------------------------------------------------- | In books, at the end of period | 511 | 530 | 524 | -------------------------------------------------------------------------------- | - of which personnel working | | | | -------------------------------------------------------------------------------- | abroad | 128 | 124 | 120 | -------------------------------------------------------------------------------- 7. Income taxes The taxes in the consolidated income statement include the taxes corresponding to the Group companies' taxable profit for the financial period 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. Deferred tax receivables are recognized to the extent that it is probable that taxable profits will be available against which temporary differences can be utilized. -------------------------------------------------------------------------------- | 8. Research and development costs | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Research and development costs | | | | -------------------------------------------------------------------------------- | for the period | 1 152 | 1 901 | 2 470 | -------------------------------------------------------------------------------- | Amortization of previously | | | | -------------------------------------------------------------------------------- | capitalized development costs | 289 | 480 | 599 | -------------------------------------------------------------------------------- | Development costs recognized | | | | -------------------------------------------------------------------------------- | as an asset in the balance sheet | -17 | -108 | -125 | -------------------------------------------------------------------------------- | Research and development | | | | -------------------------------------------------------------------------------- | costs entered as expenses | | | | -------------------------------------------------------------------------------- | for the period | 1 424 | 2 273 | 2 943 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 9. Changes in Intangible assets | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | and in Property, plant and | | | | -------------------------------------------------------------------------------- | equipment | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Intangible assets | | | | -------------------------------------------------------------------------------- | Carrying amount at the | | | | -------------------------------------------------------------------------------- | beginning of the period | 11 462 | 11 575 | 11 575 | -------------------------------------------------------------------------------- | Exchange rate differences | 31 | -17 | -19 | -------------------------------------------------------------------------------- | Additions | 309 | 218 | 429 | -------------------------------------------------------------------------------- | Disposals | 0 | 0 | -495 | -------------------------------------------------------------------------------- | Other reclassifications | | | | -------------------------------------------------------------------------------- | between items | 57 | 0 | -28 | -------------------------------------------------------------------------------- | Carrying amount at the end | | | | -------------------------------------------------------------------------------- | of the period | 11 858 | 11 776 | 11 462 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Accumulated depreciation and | | | | -------------------------------------------------------------------------------- | amortization at the beginning | | | | -------------------------------------------------------------------------------- | of the period | -9 630 | -9 094 | -9 094 | -------------------------------------------------------------------------------- | Exchange rate differences | -16 | 6 | 34 | -------------------------------------------------------------------------------- | Accumulated depreciations | | | | -------------------------------------------------------------------------------- | on disposals | 0 | 0 | 495 | -------------------------------------------------------------------------------- | Depreciation for the | | | | -------------------------------------------------------------------------------- | financial period | -574 | -832 | -1 065 | -------------------------------------------------------------------------------- | Accumulated depreciation and | | | | -------------------------------------------------------------------------------- | amortization at the end | | | | -------------------------------------------------------------------------------- | of the period | -10 221 | -9 920 | -9 630 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Book value of intangible assets, | | | | -------------------------------------------------------------------------------- | at the beginning of the period | 1 831 | 2 482 | 2 482 | -------------------------------------------------------------------------------- | Book value of intangible assets, | | | | -------------------------------------------------------------------------------- | at the end of the period | 1 637 | 1 856 | 1 831 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Property, plant and equipment | | | | -------------------------------------------------------------------------------- | Carrying amount at the | | | | -------------------------------------------------------------------------------- | beginning of the period | 42 022 | 40 447 | 40 480 | -------------------------------------------------------------------------------- | Exchange rate differences | 773 | 651 | 901 | -------------------------------------------------------------------------------- | Additions | 1 465 | 337 | 666 | -------------------------------------------------------------------------------- | Disposals | -1 921 | -5 | -25 | -------------------------------------------------------------------------------- | Other reclassifications between | | | | -------------------------------------------------------------------------------- | items | -57 | 0 | 0 | -------------------------------------------------------------------------------- | Carrying amount at the end | | | | -------------------------------------------------------------------------------- | of the period | 42 282 | 41 430 | 42 022 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Accumulated depreciation and | | | | -------------------------------------------------------------------------------- | amortization at the beginning | | | | -------------------------------------------------------------------------------- | of the period | -31 755 | -29 272 | -29 304 | -------------------------------------------------------------------------------- | Exchange rate differences | -682 | -619 | -834 | -------------------------------------------------------------------------------- | Depreciation for the | | | | -------------------------------------------------------------------------------- | financial period | -1 094 | -1 210 | -1 617 | -------------------------------------------------------------------------------- | Accumulated depreciation and | | | | -------------------------------------------------------------------------------- | amortization at the end | | | | -------------------------------------------------------------------------------- | of the period | -33 530 | -31 101 | -31 755 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Book value of property, plant | | | | -------------------------------------------------------------------------------- | and equipment, at the beginning | | | | -------------------------------------------------------------------------------- | of the period | 10 267 | 11 175 | 11 175 | -------------------------------------------------------------------------------- | Book value of property, plant | | | | -------------------------------------------------------------------------------- | and equipment, at the end of | | | | -------------------------------------------------------------------------------- | the period | 8 751 | 10 329 | 10 267 | -------------------------------------------------------------------------------- 10. Non-current assets held for sale The assets in Jyväskylä classified as assets held for sale since March 31, 2010 were sold in April, and the premises of the unit operating in Canada were sold in September. The real estate sale in Canada brought the Group a EUR 4.4 million profit before taxes. At the end of the reporting period, Raute Corporation had no assets classified as assets held for sale. 11. Related party transactions Raute Group's related parties consist of Board members, President and CEO, Presidents of the subsidiaries 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 system and its effect on the profit or loss for the period have been presented in Note 16. Group management's other employee benefits are presented in the annual financial statement. -------------------------------------------------------------------------------- | 12. Interest-bearing liabilities | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Long-term interest-bearing | | | | -------------------------------------------------------------------------------- | liabilities recognized at | | | | -------------------------------------------------------------------------------- | amortized cost | 12 245 | 7 231 | 14 318 | -------------------------------------------------------------------------------- | Short-term interest-bearing | | | | -------------------------------------------------------------------------------- | liabilities | 4 215 | 2 301 | 4 215 | -------------------------------------------------------------------------------- | TOTAL | 16 461 | 9 532 | 18 533 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 13. Other leases and operating | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | lease liabilities | | | | -------------------------------------------------------------------------------- | Group as lessee | | | | -------------------------------------------------------------------------------- | Minimum rents paid on the basis of | | | | -------------------------------------------------------------------------------- | other non-cancellable leases: | | | | -------------------------------------------------------------------------------- | - Within one year | 535 | 251 | 551 | -------------------------------------------------------------------------------- | - After the period of more than | | | | -------------------------------------------------------------------------------- | one and less than five years | 1 081 | 425 | 1 013 | -------------------------------------------------------------------------------- | - More than five years | 741 | 0 | 782 | -------------------------------------------------------------------------------- | TOTAL | 2 357 | 676 | 2 346 | -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- | Minimum direct leasing rents | | | | -------------------------------------------------------------------------------- | paid on the basis of | | | | | non-cancellable | | | | -------------------------------------------------------------------------------- | direct leasing contracts: | | | | -------------------------------------------------------------------------------- | - Within one year | 35 | 32 | 25 | -------------------------------------------------------------------------------- | - After the period of more than | | | | -------------------------------------------------------------------------------- | one and less than five years | 88 | 64 | 67 | -------------------------------------------------------------------------------- | - More than five years | 8 | 0 | 0 | -------------------------------------------------------------------------------- | TOTAL | 131 | 96 | 92 | -------------------------------------------------------------------------------- 14. Pledged assets and contingent liabilities Raute Group has non-current credit regulation agreements worth EUR 5 million (MEUR 17) and current credit regulation agreements worth EUR 5 million (MEUR 0), of which EUR 5 million (MEUR 14) were unused on September 30, 2010. 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. -------------------------------------------------------------------------------- | Pledged assets | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Debts and other contingent | | | | -------------------------------------------------------------------------------- | liabilities have been secured by | | | | -------------------------------------------------------------------------------- | mortgages and contingencies | | | | -------------------------------------------------------------------------------- | Bank credit limits, | 10 000 | 17 000 | 10 000 | -------------------------------------------------------------------------------- | of which used | 5 000 | 3 000 | 2 400 | -------------------------------------------------------------------------------- | - Business mortgages (1) | 3 527 | 14 000 | 5 300 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Pension loans (TyEL) | 16 000 | 9 000 | 18 000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | - Bank guarantees as collateral | | | | -------------------------------------------------------------------------------- | given for the TyEL loan | 11 100 | 3 000 | 12 400 | -------------------------------------------------------------------------------- | Business mortgages (1) | 4 700 | 4 700 | 4 700 | -------------------------------------------------------------------------------- | Deposits of money (2) | 2 000 | 0 | 3 000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | - Credit insurance agreements as | | | | -------------------------------------------------------------------------------- | collateral for the TyEL loan | 4 900 | 7 000 | 5 600 | -------------------------------------------------------------------------------- | Right of recourse of the party | | | | -------------------------------------------------------------------------------- | providing collateral | 4 900 | 7 000 | 5 600 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial liability/Raute's | | | | -------------------------------------------------------------------------------- | Sickness Fund | 100 | 100 | 100 | -------------------------------------------------------------------------------- | - Real estate mortgages (1) | 134 | 134 | 134 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Commercial bank guarantees | | | | -------------------------------------------------------------------------------- | on behalf of the Parent | | | | -------------------------------------------------------------------------------- | company and subsidiaries | 20 841 | 5 149 | 7 125 | -------------------------------------------------------------------------------- | - Business mortgages (1) | 1 773 | 0 | 0 | -------------------------------------------------------------------------------- | - Deposits of money (2) | 1 500 | 0 | 0 | -------------------------------------------------------------------------------- | - Counter guarantees (3) | 17 568 | 5 149 | 7 125 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Mortgage agreements on behalf | | | | -------------------------------------------------------------------------------- | of subsidiaries | | | | -------------------------------------------------------------------------------- | - Counter guarantees (3) | 227 | 0 | 200 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Mortgages and contingencies total | | | | -------------------------------------------------------------------------------- | - Secured by mortgages total (1) | 10 134 | 18 834 | 10 134 | -------------------------------------------------------------------------------- | - Secured by deposits of | | | | -------------------------------------------------------------------------------- | money total (2) | 3 500 | 0 | 3 000 | -------------------------------------------------------------------------------- | - Counter guarantees total (3) | 17 795 | 5 149 | 7 325 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other own liabilities | | | | -------------------------------------------------------------------------------- | Leasing and rent liabilities | | | | -------------------------------------------------------------------------------- | - For the current accounting | | | | -------------------------------------------------------------------------------- | period | 427 | 213 | 576 | -------------------------------------------------------------------------------- | - For subsequent accounting | | | | -------------------------------------------------------------------------------- | periods | 1 918 | 489 | 1 862 | -------------------------------------------------------------------------------- Loans and guarantees on behalf of the related party No pledges or other commitments have been given on behalf of the company's management and shareholders. No loans are granted to the company's management and shareholders. -------------------------------------------------------------------------------- | 15. Currency derivatives and | | | | -------------------------------------------------------------------------------- | hedging instruments | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- Currency derivatives are used for hedging purposes. During the reporting period, Raute Corporation adopted hedge accounting as defined in the IAS 39 standard. The effective portion of changes in the fair value determined as cash flow hedging has been recognized in the items of the comprehensive income and presented in the equity hedge reserve, which is included in the item Other funds in the equity. Related to hedge accounting, an amount of EUR 10 thousand has been recognized in the comprehensive income statement during the period. During the reporting period, no ineffective portion has been connected to these items. The hedged items mature in less than 12 months. -------------------------------------------------------------------------------- | Nominal values of forward | | | | -------------------------------------------------------------------------------- | contracts in foreign currency | | | | -------------------------------------------------------------------------------- | Economic hedging | | | | -------------------------------------------------------------------------------- | - Related to financing | 2 398 | 4 115 | 661 | -------------------------------------------------------------------------------- | - Related to hedging of net sales | 0 | 882 | 1 615 | -------------------------------------------------------------------------------- | Hedge accounting | | | | -------------------------------------------------------------------------------- | - Related to the hedging of | | | | -------------------------------------------------------------------------------- | net sales | 737 | 0 | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fair values of forward contracts | | | | -------------------------------------------------------------------------------- | in foreign currency | | | | -------------------------------------------------------------------------------- | Economic hedging | | | | -------------------------------------------------------------------------------- | - Related to financing | 33 | -37 | -35 | -------------------------------------------------------------------------------- | - Related to the hedging | | | | -------------------------------------------------------------------------------- | of net sales | 0 | 66 | 98 | -------------------------------------------------------------------------------- | Hedge accounting | | | | -------------------------------------------------------------------------------- | - Related to the hedging of | | | | -------------------------------------------------------------------------------- | net sales | 13 | 0 | 0 | -------------------------------------------------------------------------------- 16. Share-based payments The Annual General Meeting resolved on March 31, 2010 to issue a maximum of 240,000 stock options. 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 the symbol 2010 A to the Group's key persons. The granted options have been valued at fair value upon the grant May 5, 2010. The fair value of the stock option is recognized as an expense in the comprehensive income statement during the earning period. During the reporting period an amount of EUR 31 thousand has been recognized as an expense in the comprehensive income statement related to stock options. -------------------------------------------------------------------------------- | The conditions of the option system | | | | | are: | | | | -------------------------------------------------------------------------------- | Arrangement | Stock option | | | -------------------------------------------------------------------------------- | Grant date | May 5, 2010 | | | -------------------------------------------------------------------------------- | Options granted | 80,000 pcs | | | -------------------------------------------------------------------------------- | Subscription price | EUR 7.64 | | | -------------------------------------------------------------------------------- | Share price at the date of grant | EUR 7.90 | | | -------------------------------------------------------------------------------- | Exercise period | 3 years | | | -------------------------------------------------------------------------------- | Subscription period | March 1, 2013 to March 31, 2016 | -------------------------------------------------------------------------------- | Settlement | Shares | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP KEY RATIOS | 1.1.-30.9. | 1.1.-30.9. | 1.1.-31.12. | -------------------------------------------------------------------------------- | | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on investment (ROI), % | 13,0 | -20,2 | -21,6 | -------------------------------------------------------------------------------- | Return on equity (ROE), % | 16,4 | -23,3 | -28,4 | -------------------------------------------------------------------------------- | Gearing, % | -18,6 | -25,0 | -40,6 | -------------------------------------------------------------------------------- | Equity ratio, % | 50,2 | 58,5 | 46,0 | -------------------------------------------------------------------------------- | Order book, EUR million | 20 | 11 | 22 | -------------------------------------------------------------------------------- | Order intake, EUR million | 46 | 16 | 35 | -------------------------------------------------------------------------------- | Exported portion of net sales, % | 92,7 | 76,8 | 83,2 | -------------------------------------------------------------------------------- | Change in net sales, % | 70,7 | -63,7 | -62,8 | -------------------------------------------------------------------------------- | Gross capital expenditure, | | | | -------------------------------------------------------------------------------- | EUR million | 1,8 | 0,6 | 1,1 | -------------------------------------------------------------------------------- | % of net sales | 3,6 | 1,9 | 3,0 | -------------------------------------------------------------------------------- | Research and development | | | | -------------------------------------------------------------------------------- | costs, EUR million | 1,2 | 1,9 | 2,5 | -------------------------------------------------------------------------------- | % of net sales | 2,3 | 6,6 | 6,7 | -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | | | | -------------------------------------------------------------------------------- | - undiluted | 0,76 | -1,31 | -2,03 | -------------------------------------------------------------------------------- | - diluted | 0,75 | -1,31 | -2,03 | -------------------------------------------------------------------------------- | Equity to share, EUR | 6,51 | 6,47 | 5,76 | -------------------------------------------------------------------------------- | Dividend per share | | | | -------------------------------------------------------------------------------- | series K shares, EUR | | | 0,00 | -------------------------------------------------------------------------------- | Dividend per share | | | | -------------------------------------------------------------------------------- | series A shares, EUR | | | 0,00 | -------------------------------------------------------------------------------- | Dividend per profit, % | | | 0,0 | -------------------------------------------------------------------------------- | Effective dividend return, % | | | 0,0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share price at the end of | | | | -------------------------------------------------------------------------------- | the period, EUR | 8,20 | 8,75 | 7,47 | -------------------------------------------------------------------------------- | Number of shares | | | | -------------------------------------------------------------------------------- | - weighted average, 1 000 pcs | 4 005 | 4 003 | 4 003 | -------------------------------------------------------------------------------- | - diluted, 1 000 pcs | 4 048 | 4 003 | 4 003 | -------------------------------------------------------------------------------- Calculation of key ratios Return on investment (ROI), % = Profit before tax + financial expenses ----------------------------------------------------------- x 100 Shareholders' equity + interest-bearing financial liabilities (average of the period) Return on equity (ROE), % = Profit/loss for the period ----------------------------------------------------------- x 100 Shareholders' equity (average of the period) Interest-bearing net liabilities = Interest-bearing liabilities ./. (cash and cash equivalents + financial assets at fair value through profit or loss) Equity ratio, % = Shareholders' equity ----------------------------------------------------------- x 100 Balance Sheet total ./. advances received Earnings per share, undiluted, euros = Profit for the period ----------------------------------------------------------- Equity issue-adjusted average number of shares during the period Earnings per share, diluted, euros = Diluted profit for the period ----------------------------------------------------------- Diluted equity issue-adjusted average number of shares Equity to share, euros = Share of shareholders' equity belonging to the owners of the Parent company ----------------------------------------------------------- Undiluted number of shares at the end of the period 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 share ----------------------------------------------------------- x 100 Earnings per share Effective dividend return, % = Dividend per share ----------------------------------------------------------- x 100 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 period. Market value of capital stock = Undiluted number of shares at the end of the period (series A + series K shares) x closing price of the share on the last day of the period Gearing, % = Interest-bearing net financial liabilities ---------------------------------------------------------- x 100 Shareholders' equity DEVELOPMENT OF QUARTERLY RESULTS -------------------------------------------------------------------------------- | | Q 3 | Q 2 | Q 1 | Q 4 | Rolling | Rolling | -------------------------------------------------------------------------------- | | 2010 | 2010 | 2010 | 2009 | 1.10.2009 | 1.10.2008 | -------------------------------------------------------------------------------- | | | | | | - | - | -------------------------------------------------------------------------------- | | | | | | 30.9.2010 | 30.9.2009 | -------------------------------------------------------------------------------- | NET SALES | 19 490 | 19 546 | 10 435 | 7 650 | 57 122 | 47 606 | -------------------------------------------------------------------------------- | Other | | | | | | | | operating | | | | | | | -------------------------------------------------------------------------------- | income | 4 431 | 120 | 18 | 23 | 4 593 | 144 | -------------------------------------------------------------------------------- | Increase (+) | | | | | | | | or | | | | | | | -------------------------------------------------------------------------------- | decrease (-) | | | | | | | | in | | | | | | | -------------------------------------------------------------------------------- | inventories of | | | | | | | -------------------------------------------------------------------------------- | finished goods | | | | | | | -------------------------------------------------------------------------------- | and work | | | | | | | -------------------------------------------------------------------------------- | in progress | -45 | -87 | -332 | 300 | -164 | 387 | -------------------------------------------------------------------------------- | Materials and | | | | | | | -------------------------------------------------------------------------------- | services | 11 001 | 10 612 | 3 671 | 3 267 | 28 551 | 20 646 | -------------------------------------------------------------------------------- | Expenses | | | | | | | -------------------------------------------------------------------------------- | from employee | | | | | | | -------------------------------------------------------------------------------- | benefits | 5 450 | 6 211 | 5 387 | 5 753 | 22 801 | 23 356 | -------------------------------------------------------------------------------- | Depreciation | | | | | | | | and | | | | | | | -------------------------------------------------------------------------------- | amortization | 580 | 459 | 637 | 629 | 2 305 | 2 732 | -------------------------------------------------------------------------------- | Other | | | | | | | | operating | | | | | | | -------------------------------------------------------------------------------- | expenses | 1 913 | 2 194 | 1 817 | 1 649 | 7 574 | 7 567 | -------------------------------------------------------------------------------- | Total | | | | | | | | operating | | | | | | | -------------------------------------------------------------------------------- | expenses | 18 944 | 19 476 | 11 512 | 11 298 | 61 231 | 54 301 | -------------------------------------------------------------------------------- | OPERATING | 4 932 | 103 | -1 391 | -3 325 | 319 | -6 164 | | PROFIT | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 25 | 1 | -13 | -43 | 1 | -13 | -------------------------------------------------------------------------------- | Financial | -98 | 185 | 376 | 70 | 532 | 837 | | income | | | | | | | -------------------------------------------------------------------------------- | Financial | 21 | -256 | -344 | -209 | -787 | -790 | | expenses | | | | | | | -------------------------------------------------------------------------------- | PROFIT (LOSS) | | | | | | | -------------------------------------------------------------------------------- | BEFORE TAX | 4 855 | 33 | -1 359 | -3 464 | 65 | -6 118 | -------------------------------------------------------------------------------- | % of net sales | 25 | 0 | -13 | -45 | 0 | -13 | -------------------------------------------------------------------------------- | Income taxes | -755 | -156 | 409 | 574 | 72 | 1 043 | -------------------------------------------------------------------------------- | PROFIT (LOSS) | | | | | | | -------------------------------------------------------------------------------- | FOR THE PERIOD | 4 100 | -123 | -950 | -2 889 | 137 | -5 075 | -------------------------------------------------------------------------------- | % of net sales | 21 | -1 | -9 | -38 | 0 | -11 | -------------------------------------------------------------------------------- | Attributable | | | | | | | | to | | | | | | | -------------------------------------------------------------------------------- | Equity holders | | | | | | | -------------------------------------------------------------------------------- | of the Parent | | | | | | | -------------------------------------------------------------------------------- | company | 4 100 | -123 | -950 | -2 889 | 137 | -5 075 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per | | | | | | | -------------------------------------------------------------------------------- | share, EUR | | | | | | | -------------------------------------------------------------------------------- | Undiluted | | | | | | | -------------------------------------------------------------------------------- | earnings | | | | | | | -------------------------------------------------------------------------------- | per share | 1,02 | -0,03 | -0,24 | -0,79 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Diluted | | | | | | | | earnings | | | | | | | -------------------------------------------------------------------------------- | per share | 1,00 | -0,03 | -0,24 | -0,79 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shares, | | | | | | | -------------------------------------------------------------------------------- | 1 000 pcs | | | | | | | -------------------------------------------------------------------------------- | Adjusted | | | | | | | -------------------------------------------------------------------------------- | average number | | | | | | | -------------------------------------------------------------------------------- | of shares | 4 005 | 4 005 | 4 005 | 4 003 | | | -------------------------------------------------------------------------------- | Adjusted | | | | | | | -------------------------------------------------------------------------------- | average number | | | | | | | -------------------------------------------------------------------------------- | of shares, | | | | | | | -------------------------------------------------------------------------------- | diluted | 4 085 | 4 055 | 4 005 | 4 003 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LARGEST SHAREHOLDERS AT | Number of | Number of | | -------------------------------------------------------------------------------- | 30 SEPTEMBER, 2010 | series K | series A | | -------------------------------------------------------------------------------- | | shares | shares | Total | -------------------------------------------------------------------------------- | | (20 votes | (1 vote | number | -------------------------------------------------------------------------------- | | per share) | per share) | of shares | -------------------------------------------------------------------------------- | 1. Sundholm Göran | | 601 433 | 601 433 | -------------------------------------------------------------------------------- | 2. Suominen Jussi Matias | 48 000 | 74 759 | 122 759 | -------------------------------------------------------------------------------- | 3. Mustakallio Kari Pauli | 60 480 | 60 009 | 120 489 | -------------------------------------------------------------------------------- | 4. Suominen Pekka | 48 000 | 62 429 | 110 429 | -------------------------------------------------------------------------------- | 5. Suominen Tiina Sini-Maria | 48 000 | 62 316 | 110 316 | -------------------------------------------------------------------------------- | 6. Siivonen Osku Pekka | 50 640 | 53 539 | 104 179 | -------------------------------------------------------------------------------- | 7. Mandatum Henkivakuutusosakeyhtiö | | 96 900 | 96 900 | -------------------------------------------------------------------------------- | 8. Kirmo Kaisa Marketta | 50 280 | 41 826 | 92 106 | -------------------------------------------------------------------------------- | 9. Lisboa De Castro Palacios Hietala | | 85 000 | 85 000 | | M | | | | -------------------------------------------------------------------------------- | 10. Keskiaho Kaija Leena | 33 600 | 51 116 | 84 716 | -------------------------------------------------------------------------------- | 11. Särkijärvi Anna Riitta | 60 480 | 22 009 | 82 489 | -------------------------------------------------------------------------------- | 12. Mustakallio Mika | 39 750 | 42 670 | 82 420 | -------------------------------------------------------------------------------- | 13. Mustakallio Risto Knut | 42 240 | 35 862 | 78 102 | | kuolinpesä | | | | -------------------------------------------------------------------------------- | 14. Mustakallio Ulla Sinikka | 47 240 | 30 862 | 78 102 | -------------------------------------------------------------------------------- | 15. Mustakallio Marja Helena | 43 240 | 20 162 | 63 402 | -------------------------------------------------------------------------------- | 16. Relander Harald Bertel | | 60 000 | 60 000 | -------------------------------------------------------------------------------- | 17. Kirmo Lasse | 30 000 | 26 200 | 56 200 | -------------------------------------------------------------------------------- | 18. Särkijärvi-Martinez Anu Riitta | 12 000 | 43 256 | 55 256 | -------------------------------------------------------------------------------- | 19. Särkijärvi Timo | 12 000 | 43 256 | 55 256 | -------------------------------------------------------------------------------- | 20. Suominen Jukka Matias | 24 960 | 27 964 | 52 924 | -------------------------------------------------------------------------------- | TOTAL | 650 910 | 1 541 568 | 2 192 478 | -------------------------------------------------------------------------------- | Share of total amount of shares, % | 65,7 | 51,2 | 54,7 | -------------------------------------------------------------------------------- | Share of total voting rights, % | 65,7 | 51,2 | 63,8 | -------------------------------------------------------------------------------- | Nominee-registered | | 84 794 | 84 794 | -------------------------------------------------------------------------------- | Other shareholders | 340 251 | 1 387 235 | 1 727 486 | -------------------------------------------------------------------------------- | TOTAL | 991 161 | 3 013 597 | 4 004 758 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | MANAGEMENT'S SHAREHOLDING | 134 990 | 146 049 | 281 039 | -------------------------------------------------------------------------------- | Share of total amount of shares, % | 13,6 | 4,8 | 7,0 | -------------------------------------------------------------------------------- | Share of total voting rights, % | 13,6 | 4,8 | 12,5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHARE INFORMATION | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Number of shares | | | | -------------------------------------------------------------------------------- | - Series K shares, ordinary shares | | | | -------------------------------------------------------------------------------- | (20 votes/share) | 991 161 | 991 161 | 991 161 | -------------------------------------------------------------------------------- | - Series A shares | | | | -------------------------------------------------------------------------------- | (1 vote/share) | 3 013 597 | 3 013 597 | 3 013 597 | -------------------------------------------------------------------------------- | Total | 4 004 758 | 4 004 758 | 4 004 758 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Trading in the company's shares (series A | | | | shares) | | | -------------------------------------------------------------------------------- | Trading of shares, pcs | 435 123 | 360 991 | 454 798 | -------------------------------------------------------------------------------- | Trading of shares, EUR million | 3,4 | 2,6 | 3,3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share price of the series A shares | | | | -------------------------------------------------------------------------------- | At the end of the reporting | | | | -------------------------------------------------------------------------------- | period, EUR | 8,20 | 8,75 | 7,47 | -------------------------------------------------------------------------------- | Highest price during | | | | -------------------------------------------------------------------------------- | the reporting period, EUR | 9,34 | 8,90 | 8,90 | -------------------------------------------------------------------------------- | Lowest price during | | | | -------------------------------------------------------------------------------- | the reporting period, EUR | 7,24 | 6,50 | 6,50 | -------------------------------------------------------------------------------- | Average price during | | | | -------------------------------------------------------------------------------- | the reporting period, EUR | 7,91 | 7,23 | 7,29 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Market value of capital stock | | | | -------------------------------------------------------------------------------- | - Series K shares, EUR million* | 8,1 | 8,7 | 7,4 | -------------------------------------------------------------------------------- | - Series A shares, EUR million | 24,7 | 26,4 | 22,5 | -------------------------------------------------------------------------------- | Total, EUR million | 32,8 | 35,0 | 29,9 | -------------------------------------------------------------------------------- *Series K shares valued at the value of series A shares at the end of reporting period. RAUTE CORPORATION Board of Directors PRESS CONFERENCE ON OCTOBER 28, 2010 AT 2 P.M.: A press conference will be organized for analysts and the media on October 28, 2010 at 2 p.m. at Scandic Simonkenttä Hotel, Roba cabinet, Simonkatu 9, Helsinki. The interim report will be presented by Mr. Tapani Kiiski, President and CEO, and Mrs. Arja Hakala, CFO. FINANCIAL RELEASES IN 2011: Raute Corporation will publish its financial statements for 2010 on Tuesday February 15, 2011. Raute's interim reports will be published as follows: - January-March on Wednesday May 4, 2011 - January-June on Tuesday August 9, 2011 - January-September on Tuesday November 1, 2011. Raute Corporation's Annual General Meeting is scheduled to be held in Lahti on Wednesday April 13, 2011. 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 company serving the wood products industry worldwide. Its most important customers are the plywood and LVL industries. Raute is one of the world's leading suppliers of mill-scale projects to these customer industries. The total service concept also includes technology services, with which Raute supports its customers throughout the entire life cycle of their investments. 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 declined significantly due to the difficult market situation in 2009 and equaled EUR 36.6 million. The number of personnel at the end of 2009 was 524. More information on the company can be found at: www.raute.com.
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