2011-02-15 08:00:00 CET
2011-02-15 08:00:16 CET
REGULATED INFORMATION
Raute - Financial Statement Release
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1- DECEMBER 31, 2010
Nastola, Finland, 2011-02-15 08:00 CET (GLOBE NEWSWIRE) -- RAUTE CORPORATION
FINANCIAL STATEMENT RELEASE 15 FEBRUARY 2011 AT 9.00 A.M.
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1- DECEMBER 31, 2010
- The Group's net sales, EUR 62.9 million (MEUR 36.6), increased 72% on the
comparison year.
- Operating profit was EUR +1.3 million (MEUR -9.7 and profit before tax EUR
+1.1 million (MEUR -9.9). The result benefited from a EUR 4.4 million gain from
a real estate sale.
- Undiluted earnings per share were EUR 0.29 (EUR -2.03).
- Order intake was EUR 72 million (MEUR 35). Order book amounted to EUR 33
million (MEUR 22).
- Fourth quarter net sales were EUR 13.4 million and operating profit was EUR
-2.3 million.
- The Board of Directors will propose to the Annual General Meeting that a
dividend of EUR 0.30 per share be paid for the financial year 2010.
- Net sales for 2011 will increase from the previous year. The operating result
is expected to be positive.
TAPANI KIISKI, PRESIDENT AND CEO:
2011 STARTS OFF WITH A STRONGER ORDER BOOK
In 2010, the world economy clearly recovered from the previous year's deep
recession. Raute and its customers also started to recover. We managed to close
a few major deals that are significant in terms of both their size and
reference value. However, we were forced to continue adaptation measures due to
weak demand and low net sales. At the beginning of the year, we completed the
major restructuring of our North American operations. At the end of the year,
we had to implement the same arrangement in Finland, too. Now we are capable of
operating profitably even at a lower level of activity.
Our net sales increased clearly from the previous year, but we still clearly
fell short of the level preceding the recession. The recovery of the world
economy was not enough to put the production of our customer industry back to
the level preceding the recession in many markets important to Raute. The
capacity utilization rates of our customers remained low. Investments to
increase capacity were thus very few. The deals closed in the Asia-Pacific area
and the major deal we received at the end of 2009 from Russia were the main
contributors to the growth of our net sales.
Due to low utilization rates, demand for spare parts and maintenance services
also remained at a lower level than before the recession, picking up towards
year-end, however. Although the financial markets showed more stability in 2010
than in 2009, the availability and the conditions of financing continued to
restrict the implementation of our customers' projects aimed at streamlining
their production capacity and improving their competitiveness. Later on in the
year, however, demand strengthened for such small and medium-sized projects. I
believe this development will continue this year as the markets for our
customers and their capacity utilization rates improve.
We managed to improve our profitability compared to the disastrous year 2009,
even though we still failed to reach a satisfying level. Growth in net sales
and the adaptation measures carried out in 2009 and 2010 were the main factors
contributing to our improved result. In addition, we were able to free assets
and achieve a considerable capital gain from the sale of our property during
the reorganization of our North American operations.
Even in the difficult market situation we have not lost faith in the recovery
of demand for plywood, veneer and LVL and, consequently, in our customers'
success. Thus, we have continued to invest in product development and our
personnel. We have increasingly focused our product development on, on the one
hand, modernization and service solutions aimed at improving the efficiency of
existing production capacity in our traditional markets, and on the other hand,
products targeted at the emerging markets. Our priorities in the area of human
resources are developing along the same lines: improving the efficiency of
operations for our traditional customers and emerging market know-how will be
ever more important challenges for us.
I believe that the market will continue to improve in 2011, albeit slowly. New
projects to increase capacity will be launched in several market areas. In
particular, I believe that Russia, Eastern Europe and South America will this
year take their positions alongside Asia as growth areas in Raute's customer
base. The orders worth over EUR 12 million received by Raute in January show
that the Russian market is recovering. I also believe that the European and
North American markets will grow stronger, particularly through the start-up of
smaller projects.
Raute's strategic investments in processing plantation trees, energy savings
and reducing emissions in our customers' production processes put us in a
better position to achieve success in the improving markets. Armed with a
moderate order book and outlook, we have greater confidence than before as we
set out to pursue both growth in net sales and profit improvement in 2011.
However, we will do this with a humble attitude, keeping in mind the continued
uncertainty in the markets.
I extend my warmest thanks to our customers for excellent cooperation in trying
times, to our employees for their outstanding resilience during continuous
changes, and to our shareholders for the trust you have shown us.
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1- DECEMBER 31, 2010
BUSINESS ENVIRONMENT
Market situation in customer industries
Raute's customers in the veneer, 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.
During 2010, the world economy already emerged from the downturn, even though
permanent recovery from the economic crisis has been slow and burdened by
uncertainty. Demand for wood products used in investment commodities continued
to suffer from the weak situation and poor outlook for construction,
housing-related consumption, international trade and transportation. Demand for
veneer, plywood and LVL remained at a relatively low level in all market areas
that are important to Raute. However, demand picked up from the previous year.
The most successful mills managed to improve their capacity utilization rates,
whereas some mills were still adjusting their production volumes to the lower
demand, particularly during the early half of the year, by shortening their
workweek and implementing shutdowns of varied duration. The mills with the
poorest profitability and the lowest efficiency remained shut down.
Demand for wood products technology and technology services
Only after a delay will Raute see the effects of a recovering global economy on
the demand for Raute's products and the company's net sales. Due to the low
demand for wood products, uncertain market outlook and low utilization rate of
the existing capacity, investment activity in the plywood industry remained at
a low level in all market areas. Many investment decisions on projects under
planning and negotiation were further deferred. Investments in the LVL
industry, which is dependent on construction industry activity, remained at a
low level in all market areas, with the exception of Asia. The challenges of
the financing markets in the emerging markets that are important to Raute and
the conditions of long-term financing continued to restrict the investments of
Raute's customers.
Demand for technology services picked up towards the end of the year, but still
remained at a lower level than normal as a result of a decline in the
production capacity utilization ratio.
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 modernizations,
consulting, training, and reconditioned machinery.
The order intake during 2010, EUR 72 million (MEUR 35), was at a good level,
considering the market situation. 53 percent of orders received came from the
Asia-Pacific area, 25 percent from Europe, 12 percent from North America, 7
percent from Russia and 3 percent from other market areas. The proportion of
technology services in the order intake in 2010 was EUR 19 million (MEUR 16).
Raute received three orders for mill-scale deliveries during 2010: almost all
of the production lines of a plywood mill in the Asia-Pacific area, the
machinery of an LVL line in Malaysia and all of the production lines of an LVL
mill in China. Other significant orders received by Raute were a veneer dryer
to the United States, a peeling line to Russia, a veneer drying line to Latvia
and a peeling line to Romania.
The order book at the end of the year amounted to EUR 33 million (MEUR 22).
The order intake in the fourth quarter totaled EUR 26 million (MEUR 19) and the
order book grew by EUR 13 million.
COMPETITIVE POSITION
Raute's competitive position has remained good during 2010. Raute will be very
competitive when demand recovers. Customers appreciate the supplier's
comprehensive competence and strong technology development in their strategic
investments aimed at ensuring their ability to deliver and provide service. 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
The Group's net sales totaled EUR 62.9 million (MEUR 36.6), up by 72 percent
from 2009. The increase in net sales resulted from the improved outlook for the
customer industries. The net sales for the final quarter of the year, EUR 13.4
million (MEUR 7.7), were the second lowest of the year.
Net sales were generated exclusively by project deliveries and technology
services related to the wood products technology business.
Net sales for project deliveries totaled EUR 44 million (MEUR 22), up 100
percent from the previous year, accounting for 70 percent (60%) of total net
sales. The plywood industry's share of the net sales for project deliveries was
95 percent (98%), while the LVL industry's share was 5 percent (0%).
Net sales for technology services totaled EUR 19 million (MEUR 15), up 29
percent from the previous year, accounting for 30 percent (40%) of net sales.
The increase in net sales resulted from improved utilization rates in the
plywood and LVL industries.
Russia's share of total net sales in 2010 was 30 percent (31%), Asia-Pacific's
29 percent (7%), Europe's 22 percent (45%), North America's 15 percent (7%),
and South America's 4 percent (11%).
RESULT AND PROFITABILITY
The Group's operating profit for 2010 was EUR 1.3 million in the positive (MEUR
-9.7) and accounted for 2 percent (-26%) of net sales. Profitability improved
substantially from the previous year thanks to increased net sales and
operational reorganization measures. In addition, the result benefited from a
EUR 4.4 million gain from a real estate sale.
The operating result from operative activities for the financial year was EUR
3.1 million in the negative. The operating profit for the financial year
includes one-time costs totaling EUR 1.2 million from the transfer of
production operations from Jyväskylä to the main production plant in Nastola,
the relocation of the Canadian unit and the adaptation measures carried out in
the Finnish units.
The Group's financial income and expenses totaled EUR -0.2 million (MEUR -0.2).
The Group's profit before tax was EUR 1.1 million in the positive (MEUR 9.9
negative) and profit for the financial year EUR 1.2 million in the positive
(MEUR 8.1 negative). The Group's comprehensive income totaled EUR 1.1 million
in the positive (MEUR -8.4).
Undiluted earnings per share were EUR 0.29 (EUR -2.03) and diluted earnings per
share were EUR 0.29 (EUR -2.03). Return on investment was 5 percent (-22%) and
return on equity 5 percent (-28%).
The operating profit in the final quarter of 2010 remained EUR 2.3 million in
the negative (MEUR 3.3 in the negative) due to a low order book. In addition,
the result includes one-time costs totaling EUR 0.5 million from the adaptation
measures carried out in the Finnish units. Undiluted earnings per share were
EUR -0.47 (EUR -0.72), and diluted earnings per share EUR -0.47 (EUR -0.72).
CASH FLOW AND BALANCE SHEET
The Group's financial position remained good throughout the year. At the end of
the financial year, the Group's cash and cash equivalents exceeded
interest-bearing liabilities by EUR 9.7 million (MEUR 9.4). At the end of the
financial year, gearing was -40 percent (-41%) and equity ratio 51 percent
(46%).
The Group's cash and cash equivalents, including financial assets recognized at
fair value through profit or loss, stood at EUR 24.1 million (MEUR 27.9) at the
end of the financial year. The change in cash and cash equivalents in the
financial year was EUR 3.8 million negative (MEUR +6.8). Operating cash flow
was EUR 6.1 million in the negative (MEUR +5.6) due to the increase in net
working capital. Cash flow from investments was EUR 4.4 million positive (MEUR
-0.9), including the prices received from real estate sales in the amount of
EUR 6.0 million. Cash flow from financing activities was EUR 2.3 million
negative (MEUR +2.1), including TyEL loan instalments of EUR 4.0 million (MEUR
2.0).
The Group's balance sheet total at the end of the year stood at EUR 53.0
million (MEUR 57.4). Other fluctuations in balance sheet items and the key
figures based on them are the result of differences in the timing of customer
payments and the cost accumulation from project deliveries, which is typical of
the project business.
Interest-bearing liabilities amounted to EUR 14.4 million (MEUR 18.5) at the
end of the financial year, with TyEL loans accounting for EUR 14.0 million
(MEUR 18.0). The TyEL loans have fixed interest rates.
The Parent company Raute Corporation has a EUR 10 million commercial paper
program, which allows the company to issue commercial papers maturing in less
than one year. The company also has unused bilateral credit regulation
agreements worth EUR 10 million with two different Nordic banks.
LOANS TO RELATED PARTIES AND OTHER LIABILITIES
On December 31, 2010, the Parent company Raute Corporation had loan receivables
from its subsidiary Raute Service LLC in the amount of EUR 355 thousand. Raute
Corporation had EUR 100 thousand in liabilities to the Raute Sickness Fund.
Other liabilities are presented in the figures section of this report.
EVENTS DURING THE REPORTING PERIOD
In the fourth quarter, Raute permanently laid off 18 salaried and senior
salaried employees in its units in Nastola and Kajaani. The objective is to
adapt operations to the continuing weak demand and the fluctuations in the
order book, and to improve profitability. It was agreed that part of the cost
savings targets relating to the need to reduce personnel was to be achieved by
internal job changes. In addition, it was agreed during the negotiations that
the adaptation measures concerning the salaried and senior salaried employees
in the Finnish units will be continued in the form of fixed-term lay-offs
according to the financial and loading situation. The temporary lay-offs
concerning the production personnel at Nastola will be continued according to
the adaptation solutions adopted previously. Raute Corporation incurred an
expense of EUR 0.5 million following the decisions made during the final
quarter of 2010.
In December, Raute received an order totaling approximately EUR 15 million from
China. The LVL plant's machinery and equipment will be delivered during summer
2011. The plant will be commissioned in early 2012. In addition to Raute's
technological know-how and reference deliveries, the Shanghai unit's delivery
ability and local service and after-care ability in China were factors in
closing the deal.
RESEARCH AND DEVELOPMENT COSTS AND CAPITAL EXPENDITURE
Raute's goal is to be the leading technology supplier in its field, and to
invest strongly in the continuous research and development of plywood and LVL
manufacturing technology, in particular, and the supporting automation and
instrumentation applications, such as machine vision. In 2010, the Group's
research and development costs totaled EUR 1.8 million (MEUR 2.5) and 2.9
percent of net sales (6.7%). R&D focused on the development of a plywood
puttying line that utilizes machine vision and robot technology, the
improvement of the energy efficiency of machinery and equipment and
modernization solutions.
The Group's investments during the financial year totaled EUR 2.2 million (MEUR
1.1) and were mainly targeted at reorganization and developing production in
the Canadian unit. The investments include capitalized development costs worth
EUR 41 thousand (EUR 125 thousand).
DEVELOPMENT OF OPERATIONS
During the spring, the Jyväskylä unit's production operations were transferred
to Nastola. Other operations related to panel handling technology, such as
planning and local maintenance services, remain in Jyväskylä. The objective is
to increase the efficiency of operations and to improve profitability as the
difficult market situation drags on.
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.
The Group's Finnish units introduced a new version of the ERP system during the
second quarter, aiming mainly at more efficient project planning.
Raute Corporation's quality system was re-audited, and it was awarded the
latest ISO 2001:2008 quality certificate in September.
PERSONNEL
The Group's headcount at the end of 2010 was 495 (524). Finnish Group companies
accounted for 74 percent (77%) of employees, North American companies for 14
percent (14%), Chinese companies for 9 percent (6%), and other sales and
maintenance companies for 3 percent (3%).
The number of personnel was adjusted during the financial year by 15 percent
(23%) 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 during the
financial year was 438 (419). Wages and salaries paid by the Group totaled EUR
19.5 million (MEUR 18.6).
Despite weak profitability, the Group continued to develop the competence of
its personnel and increase their commitment to the company. 1 percent (2%) of
the payroll was invested in personnel training.
REMUNERATION
The Group has remuneration systems in place that cover the entire personnel.
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, dividend adjusted.
The terms and conditions of the stock option scheme are available on the
company's website.
SOCIETY AND THE ENVIRONMENT
The environment is one of the values that guide Raute's operations. Raute
strives to systematically develop the environmental soundness of its products
and services and to reduce the environmental impacts of its operations. The
Group abides by the principles of good corporate citizenship, taking into
consideration nature and its protection, and how society as a whole operates,
while respecting local cultures.
Raute's operations mainly affect the environment indirectly when the company's
technology is used in the production processes of the wood products industry.
Raute's technology enables the wood products industry to substantially reduce
the environmental load caused by its operations through, for example, more
efficient use of wood raw materials, additives and energy.
The Group's own operations do not involve considerable environmental risks that
might have a direct impact on the Group's business operations or financial
position. The Nastola main production units manage environmental matters in
compliance with a certified environmental system. The operations and ethical
principles of the partner and subcontractor network are also subjected to
systematic inspection.
Raute aims to continuously reduce energy consumption, decrease the volume of
waste, and develop the working environment.
SEASONAL FLUCTUATIONS IN BUSINESS
The Group's net sales and working capital fluctuate every quarter due to
different types of project deliveries and their schedules. Business operations
do not involve regular seasonal changes.
RISKS AND RISK MANAGEMENT
The Group's identified main risk areas relate to the nature of the business,
the business environment, financing, and damage or loss. The fluctuation in
demand resulting from economic cycles and delivery and technology risks have
been identified as the Group's most significant business risks. The pick-up of
economic activity increases the short-term risk arising from the sufficiency of
the subcontracting capacity and price level in Finland and neighbouring areas.
The Group has no ongoing legal proceedings or other disputes in progress that
might materially affect the continuity of business operations, nor is the Board
of Directors aware of any other legal risks related to the Group's operations
that might have such an effect.
Business risks
Impact of economic cycles on business operations
Raute's business operations are characterized by the sensitivity of investment
demand to fluctuations in the global economy and the financing markets, and the
cyclical nature of project business. The impact of changes in demand on the
Group's result is reduced by increasing the share of technology services,
increasing operations in market areas with a small current market share,
creating products for completely new customer groups and developing the
subcontracting network.
Deliveries and technology
The bulk of Raute's business operations consists of project deliveries, which
expose the company to risks caused by customized solutions related to each
customer's end product, production methods or raw materials. At the quotation
and negotiation phase, the company has to take risks relating to the promised
performance figures and make estimates of implementation costs. The
functionality and capacity of new solutions produced as a result of development
work cannot be fully verified until the solutions can be tested under
production conditions in conjunction with the customer deliveries.
Contract, product liability, implementation, cost and capacity risks are
managed using project management procedures that comply with the company's
ISO-certified quality system. Technology risks are reduced by the conditions of
delivery contracts and by restricting the number of simultaneous first
deliveries.
Emerging markets
Raute's objective is to increase its local business in China and Russia, among
others, where, besides opportunities, companies face risks typical for emerging
markets. Information security risks are managed according to a defined
information security policy.
Human resources
Competence retention and development and ensuring the sufficiency of human
resources are particularly important in cyclical business. Continuity is
ensured by monitoring the development of the age structure, implementing
systematic human resources management and investing in well-being at work.
Financing risks
The most significant financing risks in the Group's international business
operations are default risks and currency risks related to counterparties. The
Group is also exposed to liquidity, interest and price risks.
The default risk relating to customers' solvency is managed by covering the
unpaid sum with bank guarantees, letters of credit or other securities. The
Group's liquid assets are mainly held in banks in the Nordic countries.
The Group's main currency is the euro. The most significant currency risks
result from the Canadian dollar (CAD) and US dollar (USD). Other currencies
that are monitored are the Russian rouble (RUB) and the Chinese yuan (CNY). The
main hedging instruments used are foreign currency forward contracts. Currency
clauses are used to hedge against currency risks during the quotation period.
Depending on the case, currency risks related to preliminary sales contracts
are hedged with currency option contracts.
The Group has braced for fluctuations in the working capital tied up in project
operations and possible disturbances in the availability of money by taking out
a non-current TyEL loan. The company's loans have fixed interest rates. The
Group's interest risks are mainly related to the return on liquid assets.
Risks of damage or loss
Raute's most significant single risks concerning material damage and business
interruption loss are a fire or a serious machine or information system
breakdown in the Nastola main unit, where the production, planning, financial,
and ERP systems serving the Group's key technologies are centrally located.
Other risks of damage or loss include occupational safety risks, which are
managed by means of active risk-prevention measures, such as continuous
personnel training and investigation of all near-miss situations. Occupational
safety and ergonomics are under continuous development.
Raute's production operations do not involve significant environmental risks.
The main unit in Nastola has an ISO-certified environmental management program,
whose principles are also adhered to in other units.
The Group hedges against risks of damage or loss by assessing its facilities
and processes in terms of risk management and by maintaining emergency plans.
Global and local insurance programs are checked regularly as part of overall
risk management. The objective is to use insurance policies to sufficiently
hedge against all risks that are reasonable to handle through insurance due to
economical or other reasons.
Organizing risk management
Raute's risk management policy is approved by the Board of Directors. The Board
is responsible for organizing internal control and risk management, and for
monitoring their efficiency.
The Executive Team defines the Group's general risk management principles and
operating policies, and defines the boundaries of the organization's powers.
The President and CEO and the CFO regularly report significant risks to the
Board.
The Group's President and CEO controls the implementation of the risk
management principles in the entire Group, while the Presidents of the Group
companies are responsible for risk management in their respective companies.
The members of the Group's Executive Board are responsible for their own areas
of responsibility across company boundaries.
Raute has no separate internal auditing organization. The Controller function
oversees the annual internal control plan approved by the Board, develops
internal control and risk management procedures together with the operative
leadership, and monitors compliance with risk management principles,
operational policies and powers.
GROUP STRUCTURE
No changes took place in the Group's legal structure during 2010.
SHAREHOLDERS
The number of shareholders totaled 1,820 at the beginning of the year and 1,787
at the end of the year. Series K shares are held by 50 private individuals
(46). Management held 7.1 percent (4.9%) of the company shares and 13.3 percent
(9.1%) of the votes. Nominee-registered shares accounted for 2.1 percent (2.3%)
of shares.
On April 22, 2010, the company gave a flagging notification concerning the
increase of Göran Sundholm's ownership share to 15.02 percent of the total
number of the company' shares.
AUDITORS
At Raute Corporation's Annual General Meeting on March 31, 2010, the authorized
public accounting company PricewaterhouseCoopers was chosen as auditor with
Authorized Public Accountant Janne Rajalahti as the principal auditor.
CORPORATE GOVERNANCE
Raute Corporation complies with the Finnish Corporate Governance Code 2010 for
listed companies approved by the Board of the Securities Market Association in
June 2010. Raute deviates from the Code's recommendation 22 on appointing
members to the Appointments Committee in that one member to the Committee is
elected from outside the Board of Directors, from among the representatives of
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.
CORPORATE GOVERNANCE STATEMENT
Raute Corporation's Board of Directors has handled Raute Corporation's
Corporate Governance Statement for 2010 according to chapter 2, section 6 of
the Finnish Securities Markets Act and recommendation 54 of the Finnish
Corporate Governance Code 2010 for listed companies issued by the Securities
Market Association on June 15, 2010. The statement has been drawn up separately
from the financial statements and will be published on the company's website
together with the annual report and financial statements.
BOARD OF DIRECTORS AND PRESIDENT AND CEO
The Annual General Meeting elects the Chairman and Vice-Chairman for the Board
of Directors, and 3-5 Board members.
At Raute Corporation's Annual General Meeting on March 31, 2010, Mr. Erkki
Pehu-Lehtonen was elected Chairman of the Board, Ms. Sinikka Mustakallio
Vice-Chairman and Mr. Risto Hautamäki, Mr. Ilpo Helander, Mr. Mika Mustakallio
and Mr. Pekka Suominen as Board members.
The Board of Directors appoints the President and CEO and confirms the terms of
his or her employment, including fringe benefits.
Mr. Tapani Kiiski, Licentiate in Technology, continued as Raute Corporation's
President and CEO. He was appointed as Raute Corporation's President and CEO on
March 16, 2004. As agreed in the executive contract, the term of notice is six
months, and the severance pay equals six months salary.
Raute Corporation's Articles of Association do not grant any unusual
authorizations to the Board of Directors, or to the President and CEO.
Any decisions on changes to the Articles of Association or an increase in share
capital are made in compliance with the regulations of the effective Companies
Act.
EXECUTIVE BOARD
Mr. Tapani Kiiski continued as Chairman of the Group's Executive Board, and the
Executive Board also included Ms. Arja Hakala, CFO; Mr. Petri Strengell, Group
Vice President, Technology and Operations; Mr. Timo Kangas, Group Vice
President, Technology Services; and Mr. Bruce Alexander, Group Vice President,
North American Business Operations, and President of Raute's North American
companies.
SHARES
The number of Raute Corporations shares at the end of 2010 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 and A shares grant equal rights to dividends and company
assets.
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 has not previously held series K shares, the new owner shall
report this to the Board of Directors in writing and without delay. The other
shareholders of the K series have the right to redeem the share under the terms
described in Article 4 of the Articles of Association.
Raute Corporation's series A shares are listed on NASDAQ OMX Helsinki Ltd. The
trading code is RUTAV. A total of 646,052 shares (454,798) worth EUR 5,248
thousand (EUR 3,316 thousand) was traded in 2010. The number of shares traded
represents 21 percent (15%) of all listed series A shares. The average price of
a series A share was EUR 8.21 (EUR 7.29). The highest rate of the year was EUR
10.10 and the lowest EUR 7.24.
The company's market capitalization at the end of 2010 totaled EUR 38.8 million
(MEUR 29.9), with series K shares valued at the closing price of series A
shares, EUR 9.70 (EUR 7.47), on December 31, 2010.
Raute Corporation has signed a market making agreement with Nordea Bank Finland
Plc in compliance with the Liquidity Providing (LP) requirements issued by
NASDAQ OMX Helsinki Ltd.
Other share-related information is presented in the figures section of this
report.
DIVIDEND FOR THE YEAR 2009
Raute Corporation's Annual General Meeting held on March 31, 2010 decided that
no dividend be paid for 2009 and that the loss for the financial year be
transferred to retained earnings.
AUTHORIZATION OF REPURCHASE AND DISPOSAL OF OWN SHARES
On March 31, 2010, the Annual General Meeting authorized the Board of Directors
to decide on the repurchase of Raute Corporation's series A shares with the
company's distributable assets and to decide on a directed issue of a maximum
of 400,000 of the company's series A shares. The authorization was not
exercised in 2010.
The company did not possess company shares at the end of the financial period
or hold them as security.
EVENTS AFTER THE FINANCIAL YEAR
In January, Raute Corporation received orders worth over EUR 12 million from
OOO Ilim Bratsk DOK in Russia. The orders include, among others, two
state-of-the-art peeling lines and two drying lines to be delivered to the town
of Bratsk in Siberia by the end of 2011.
ANNUAL GENERAL MEETING 2011
Raute Corporation's Annual General Meeting will be held in Lahti, at Sibelius
Hall on Wednesday April 13, 2011 at 6:00 p.m. A shareholder who wishes to
include an issue in Raute Corporation's Annual General Meeting's agenda shall
notify the company thereof in writing no later than March 8, 2011.
PUBLISHING OF THE 2010 ANNUAL REPORT AND FINANCIAL STATEMENTS
Raute Corporation's Annual Report and consolidated financial statements 2010
will be published during the week of March 14th.
THE BOARD OF DIRECTORS' PROPOSAL FOR DIVIDEND DISTRIBUTION AND MEASURES
CONCERNING THE RESULT
According to the financial statements 2010, distributable assets total EUR 7
726 thousand.
The Board of Directors will propose to Raute Corporation's Annual General
Meeting, to be held on April 13, 2011, that a dividend of EUR 0.30 per share be
paid for series A and series K shares, and that the remainder of distributable
assets be transferred to equity. The proposed record date for dividend payments
is April 18, 2011 and the dividend payment date is April 27, 2011.
No essential changes have taken place in the company's financial position since
the end of the financial year. The company has good liquidity, and in the Board
of Directors' view, the proposed dividend does not pose a risk to solvency.
OTHER PROPOSALS BY THE BOARD TO THE ANNUAL GENERAL MEETING 2011
Issues to be decided by the Annual General Meeting according to the Articles of
Association
Raute Corporation's Appointments Committee proposes to the Annual General
Meeting, which will convene on April 13, 2011, that six be confirmed as the
number of Board members and that Mr. Erkki Pehu-Lehtonen (Chairman), Ms.
Sinikka Mustakallio (Vice-Chairman), Mr. Risto Hautamäki, Mr. Ilpo Helander,
Mr. Mika Mustakallio and Mr. Pekka Suominen be re-elected as members. The
Appointments Committee additionally proposes that the remuneration paid to the
Chairman of the Board will be EUR 40,000 and to the other Board members EUR
20,000 for the term of office, as before.
The Board of Directors proposes to the Annual General Meeting that authorized
public accounting company PricewaterhouseCoopers Oy be chosen as auditors with
Authorized Public Accountant Janne Rajalahti as the principal auditor. The
Board proposes that the auditors' remuneration be paid on the basis of
reasonable invoicing.
Authorization of repurchase and disposal of own shares
The Board of Directors proposes to the Annual General Meeting that the Meeting
continue the Board of Directors' existing authorization to decide on the
repurchase and directed issue of a maximum of 400,000 of the company's series A
shares until the Annual General Meeting 2012.
OUTLOOK FOR 2011
The uncertainty related to the development of the world economy and financial
markets still continues despite growth outlook in the emerging markets. The
market situation for Raute's customer industries is expected to remain
uncertain. There is no certainty of demand for wood products reaching the
pre-recession level on a permanent basis.
Demand for investments and services in the wood products industry are not
expected to reach their pre-recession level on a permanent basis in the near
future. However, upgrade investments in the plywood industry to ensure quality
and maintain market shares are likely to increase. Small players are investing
in the maintenance of necessary production facilities. Single mill-scale
investment projects are being planned in several market areas, but their
implementation and timing are uncertain.
Thanks to its strong financial position, market position and the implemented
development efforts, Raute's capacity to survive the economic slowdown and
respond to growing demand as markets recover is good. The implemented
adaptation measures have led to a lighter cost structure and business is more
profitable than before even in a difficult market situation.
Raute's business operations are characterized by the sensitivity of investment
demand to fluctuations in the global economy and the financing markets. Thanks
to a strengthened order book and projects under negotiation, net sales for 2011
will increase from the previous year. The operating result is expected to be
positive.
SUMMARY OF FINANCIAL STATEMENTS AND NOTES
CONSOLIDATED FINANCIAL STATEMENTS JANUARY 1 -
DECEMBER 31, 2010
The figures for the financial year 2009 and 2010 presented in the figures
section of the financial statements release have been audited.
The figures presented in the interim financial
report have not been audited.
CONSOLIDATED STATEMENT Note 1.10.-31.12. 1.10.-31.12. 1.1.-31 1.1.-31
OF .12. .12.
COMPREHESIVE INCOME 2010 2009 2010 2009
(EUR 1 000)
NET SALES 3, 4, 5 13 396 7 650 62 867 36 638
Other operating income 10 10 23 4 580 153
Change in inventories
of finished
goods and work in 815 300 351 795
progress
Materials and services -7 395 -3 267 -32 679 -15 695
Expenses from employee 16 -6 418 -5 753 -23 467 -22 047
benefits
Depreciation and -574 -629 -2 250 -2 670
amortization
Other operating -2 166 -1 649 -8 091 -6 869
expenses
Total operating -16 554 -11 298 -66 487 -47 281
expenses
OPERATING PROFIT -2 333 -3 325 1 311 -9 695
% of net sales -17 -43 2 -26
Financial income 266 70 728 356
Financial expenses -338 -209 -917 -551
PROFIT (LOSS) BEFORE -2 406 -3 464 1 122 -9 890
TAX
% of net sales -18 -45 2 -27
Income taxes 7 538 574 36 1 749
PROFIT (LOSS) FOR THE -1 868 -2 889 1 158 -8 141
PERIOD
% of net sales -14 -38 2 -22
Other comprehensive
income items:
Exchange differences on 28 36 -20 -228
translating foreign operations
Cash flow hedging -27 0 -19 0
Income tax related to 7 0 5 0
cash flow hedges
Comprehensive income
items for
the period, net of tax 8 36 -34 -228
COMPREHENSIVE PROFIT (LOSS) FOR -1 860 -2 853 1 124 -8 369
THE PERIOD
Profit (loss) for the
period attributable to
Equity holders of the -1 868 -2 889 1 158 -8 141
Parent company
Comprehensive profit
(loss) for the period
attributable to
Equity holders of the -1 860 -2 853 1 124 -8 369
Parent company
Earnings per share for profit
(loss) attributable
to Equity holders of
the Parent company,
EUR
Undiluted earnings per -0,47 -0,72 0,29 -2,03
share
Diluted earnings per -0,47 -0,72 0,29 -2,03
share
Shares, 1 000 pcs
Adjusted average 4 005 4 005 4 005 4 003
number of shares
Adjusted average 4 005 4 005 4 005 4 003
number of shares
diluted
CONSOLIDATED BALANCE Note 31.12. 31.12.
SHEET
(EUR 1 000) 2010 2009
ASSETS
Non-current assets
Intangible assets 9 1 341 1 831
Property, plant and 9 8 913 10 267
equipment
Other financial assets 497 486
Receivables 0 1 000
Deferred tax assets 1 849 1 741
Total 12 599 15 325
Current assets
Inventories 4 574 4 330
Accounts receivables 5 11 770 9 832
and other receivables
Cash and cash 24 090 27 900
equivalents
Total 40 435 42 062
TOTAL ASSETS 53 034 57 387
SHAREHOLDERS' EQUITY
AND LIABILITIES
Equity attributable to
Equity holders
of the Parent company
Share capital 8 010 8 010
Share premium 6 498 6 498
Other reserves 16 36 294
Exchange differences 35 55
Retained earnings 8 490 16 337
Profit (loss) for the 1 158 -8 141
period
Share of shareholders'
equity that belongs
to the owners of the 24 227 23 053
Parent company
Total shareholders' 24 227 23 053
equity
Non-current
liabilities
Provisions 57 182
Deferred tax 337 271
liabilities
Non-current 12 10 000 14 318
interest-bearing
liabilities
Total 10 394 14 771
Current liabilities
Provisions 612 1 325
Pension obligations 91 143
Current 12 4 439 4 215
interest-bearing
liabilities
Advance payments 5 5 243 7 222
received
Trade and other 8 028 6 658
payables
Total 18 413 19 563
Total liabilities 28 807 34 334
TOTAL SHAREHOLDERS' EQUITY AND 53 034 57 387
LIABILITIES
CONSOLIDATED STATEMENT 1.1.-31.12. 1.1.-31.12.
OF CASH FLOWS
(EUR 1 000) 2010 2009
CASH FLOW FROM
OPERATING ACTIVITIES
Proceeds from sales 57 338 50 988
Proceeds from other 121 85
operating income
Payments of operating -63 416 -46 020
expenses
Cash flow before -5 958 5 053
financial items and
taxes
Interests and other operating -650 -486
financial expenses paid
Interests and other 394 423
income received
Dividends received 118 79
Income taxes paid -18 550
NET CASH FLOW FROM OPERATING -6 114 5 619
ACTIVITIES (A)
CASH FLOW FROM
INVESTING ACTIVITIES
Capital expenditure in -2 067 -1 034
tangible and
intangible assets
Purchases of -11 0
assets-for-sale as
investments
Proceeds from sale of tangible and 6 448 79
intangible assets
NET CASH FLOW FROM INVESTING 4 370 -955
ACTIVITIES (B)
CASH FLOW FROM
FINANCING ACTIVITIES
Increase of 0 -3 000
non-current and
current receivables
Decrease of 2 000 0
non-current and
current receivables
Repayments of current -228 -125
borrowings
Increase of 0 10 200
non-current borrowings
Repayments of -4 088 -2 000
non-current borrowings
Repurchase of own 0 -138
shares
Dividends paid 0 -2 803
NET CASH FLOW FROM FINANCING -2 316 2 134
ACTIVITIES (C)
NET CHANGE IN CASH AND CASH -4 060 6 798
EQUIVALENTS (A+B+C)
increase (+)/decrease
(--)
CASH AND CASH EQUIVALENTS AT THE
BEGINNING
OF THE FINANCIAL YEAR* 27 900 21 109
EFFECTS OF EXCHANGE 251 -7
RATE CHANGES ON CASH
CASH AND CASH
EQUIVALENTS AT THE END
OF THE FINANCIAL YEAR* 24 090 27 900
CASH AND CASH EQUIVALENTS IN THE
BALANCE
SHEET AT THE END OF
THE FINANCIAL YEAR
Cash and cash 24 090 27 900
equivalents
TOTAL 24 090 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
Share Share Other Exchang Retaine
e d
(EUR 1 000) capital premium reserves rate earning
diff. s
EQUITY Jan. 1, 2010 8 010 6 498 294 55 8 196
Profit (loss) for the 1 158
period
Comprehensive profit
(loss) for the period:
Exchange differences
on translating
foreign operations -20
Cash flow hedging, net -14
of tax
Total comprehensive
profit (loss)
for the period 0 0 -14 -20 1 158
Repurchase of own
shares
Repurchase of own
shares, tax effect
Equity-settled 50
share-based
transactions
Reclassifications -294 294
between items
Dividend paid
EQUITY Dec. 31, 2010 8 010 6 498 36 35 9 648
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(continue)
To the owners
of the Parent EQUITY
(EUR 1 000) company TOTAL
EQUITY Jan. 1, 2010 23 053 23 053
Profit (loss) for the 1 158 1 158
period
Comprehensive profit
(loss) for the period:
Exchange differences
on translating
foreign operations -20 -20
Cash flow hedging, net -14 -14
of tax
Total comprehensive
profit (loss)
for the period 1 124 1 124
Repurchase of own 0 0
shares
Repurchase of own 0 0
shares, tax effect
Equity-settled 50 50
share-based
transactions
Reclassifications 0 0
between items
Dividend paid 0 0
EQUITY Dec. 31, 2010 24 227 24 227
CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
Share Share Other Exchang Retaine
e d
(EUR 1 000) capital premium reserves rate earning
diff. s
EQUITY Jan. 1, 2009 8 010 6 498 287 283 19 242
Profit (loss) for the -8 141
period
Comprehensive profit
(loss) for the period:
Exchange differences
on translating
foreign operations -228
Cash flow hedging, net
of tax
Total comprehensive
profit (loss)
for the period 0 0 0 -228 -8 141
Repurchase of own -138
shares
Repurchase of own 36
shares, tax effect
Equity-settled 7
share-based
transactions
Reclassifications
between items
Dividend paid -2 803
EQUITY Dec. 31, 2009 8 010 6 498 294 55 8 196
CONSOLIDATED STATEMENT
OF CHANGES IN
SHAREHOLDERS' EQUITY
(continue)
To the
owners
of the Parent EQUITY
(EUR 1 000) company TOTAL
EQUITY Jan. 1, 2009 34 321 34 321
Profit (loss) for the -8 141 -8 141
period
Comprehensive profit
(loss) for the period:
Exchange differences
on translating
foreign operations -228 -228
Cash flow hedging, net 0 0
of tax
Total comprehensive
profit (loss)
for the period -8 369 -8 369
Repurchase of own -138 -138
shares
Repurchase of own 36 36
shares, tax effect
Equity-settled 7 7
share-based
transactions
Reclassifications 0 0
between items
Dividend paid -2 803 -2 803
EQUITY Dec. 31, 2009 23 053 23 053
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 full 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.
Raute Group's Parent company is a Finnish public limited liability company,
Raute Corporation, established in accordance with Finnish law
(Business ID FI01490726). Its series A shares are quoted on NASDAQ OMX Helsinki
Ltd., under Industrials. Raute Corporation is domiciled
in Lahti, Finland. The address of its registered office is Rautetie 2, FI-15550
Nastola, Finland, and its postal address is P.O. Box 69,
FI-15551 Nastola,
Finland.
The consolidated financial statements are available online at www.raute.com or
at the head office of the Parent company,
Rautetie 2, FI-15550
Nastola, Finland.
Raute corporation's Board of Directors has on February 15, 2011 reviewed the
consolidated financial statements for January 1 --
December 31, 2010, and approved the consolidated financial statements for
January 1 - December 31, 2010 to be published in compliance
with this release.
2. Accounting
principles
Raute Corporation's financial statements release January 1 - December 31, 2010
has been prepared in accordance with standard IAS 34
Interim Financial Reporting. The financial statements release does not contain
full notes and other information presented
in the financial statements. Financial statements with full notes will be
presented in Annual report 2010, which will be published in week 11.
Raute Corporation's consolidated financial statements for January 1 - December
31, 2010 have been prepared in accordance with
international financial statement standards (International Financial Reporting
Standards, IFRS). Preparations have complied
with the IAS and IFRS standards, as well as SIC and IFRIC
interpretations, effective on December 31, 2010.
IFRS refers to the standards and their interpretations that have been approved
for application within the EU in the Finnish Accounting Act
and regulations issued under it in accordance with the procedures laid down in
EU regulation No 1606/2002. The notes to
the consolidated financial statements also comply with Finnish accounting
legislation complementing IFRS regulations.
The Group has applied the following new standards, interpretations and
amendments to existing standards on 1 January 2010:
- IFRS 3 Business Combinations,
amendment to standard
- IAS 27 Consolidated and Separate Financial Statements,
amendment to standard
- IFRIC 16 Net
Investment in a
Foreign Operation
- IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, amendment to standard
- IAS 39 Financial Instruments: Recognition and Measurement - Eligible
Hedged Items, amendment to standard
- IFRS 2 Share-Based Payment - Group Cash-settled Share-based Payment
Transactions, amendment to standard.
The following new standards, amendments to existing standards, and
interpretations are in effect for the financial year beginning
January 1, 2010, but they do not have a significant impact on the result or the
balance of the Group or the financial statement presentation:
- IFRIC 9 Reassessment of embedded derivatives on
reclassification, amendmend to standard
- IFRIC 12 Service
Concession
Arrangements
- IFRIC 15 Agreements for the
Construction of Real Estate
- IFRIC 17
Distribution of
non-cash asset to
owners
- IFRIC 18 Transfer of
Assets from Customers.
All the monetary figures presented in the financial statement release are in
thousand euros, unless otherwise stated.
Due to the rounding of the figures in the financial statement tables, the sums
of figures may deviate from the sum total presented
in the table. Figures in parentheses refer to the corresponding figures
in the comparison period.
The preparation of financial statements according to international financial
reporting standards requires management to use estimates
and assumptions. 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.
31.12. 31.12.
Wood products 2010 2009
technology
Net sales 62 867 36 638
Operating profit 1 311 -9 695
Assets 53 034 57 387
Liabilities 28 807 34 334
Capital expenditure 2 224 1 095
Assets of the wood 31.12. 31.12.
products technology
segment by 2010 % 2009 %
geographical location
Finland 44 006 83 53 448 94
China 4 129 8 858 1
North America 3 730 7 1 950 3
Russia 880 2 948 2
South America 160 0 88 0
Others 129 0 95 0
TOTAL 53 034 100 57 387 100
Capital expenditure of 31.12. 31.12.
the wood products
technology segment by 2010 % 2009 %
geographical location
Finland 590 27 1 071 98
China 7 0 3 0
North America 1 606 72 18 2
Russia 0 0 2 0
South America 21 1 0 0
Others 0 0 1 0
TOTAL 2 224 100 1 095 100
4. Net sales
The main part of the net sales is comprised of project deliveries and
modernizaton service related to wood products 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 and maintenance services as well as services provided to
the development of customers' business).
A 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.
At the end of the reporting year, the Group had two (2) customers, whose share
of the Group's net sales temporarily exceeded
10 percent due to the
nature of project
business.
Net sales 1.1.-31.12 1.1.-31.12.
.
by market area 2010 % 2009 %
Russia 18 627 30 11 237 31
Asia-Pacific 18 442 29 2 241 7
North America 9 551 15 2 549 7
Rest of Europe 8 805 14 10 415 28
Finland 5 094 8 6 172 17
South America 2 212 4 3 853 11
Others 136 0 171 1
TOTAL 62 867 100 36 638 100
5. Long-term projects 31.12. 31.12.
2010 2009
Net sales
Net sales by 51 860 26 990
percentage of
completion
Other net sales 11 007 9 648
TOTAL 62 867 36 638
Project revenues entered as income
from currently undelivered
long-term projects recognized by 50 784 27 184
percentage of completion
Amount of long-term project revenues not yet 31 799 20 976
entered as income (order book)
Specification of
combined asset and
liability items:
Advance payments paid 147 389
Advance payments included in 147 389
inventories in the balance sheet
Accrued income corresponding to revenues by 51 200 27 306
percentage of completion
Advance payments received from -46 490 -24 060
project customers
Project receivables included in 4 710 3 246
current assets in the balance
sheet
Advance payments received in the 5 243 7 222
balance sheet
6. Number of 31.12. 31.12.
personnel, persons
2010 2009
Effective, on average 438 419
In books, on average 512 542
In books, at the end 495 524
of period
- of which personnel 129 120
working abroad
7. Income taxes
The taxes in the consolidated income statement include the taxes corresponding
to the Group companies' taxable profit for the financial
year as well as tax adjustments for the previous years and the change in
deferred taxes. Current tax based on the taxable income is
calculated on taxable income using the tax rate in force in each country.
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 31.12. 31.12.
development costs
2010 2009
Research and development costs for 1 849 2 470
the financial year
Amortization of previously 395 599
capitalized development costs
Developments costs recognized as -41 -125
an asset in the balance sheet
Research and development costs entered as 2 203 2 943
expenses for the financial year
9. Changes in Intangible assets 31.12. 31.12.
and in Property,
plant and equipment 2010 2009
Intangible assets
Carrying amount at the beginning 11 462 11 575
of the financial year
Exchange rate 71 -19
differences
Additions 151 429
Disposals 0 -495
Other 75 -28
reclassifications
between items
Carrying amount at the end of the 11 759 11 462
financial year
Accumulated depreciation and amortization at the -9 631 -9 094
beginning of the financial year
Exchange rate -16 34
differences
Accumulated 0 495
depreciations on
disposals
Depreciation for the -771 -1 065
financial year
Accumulated depreciation and amortization at the end of the -10 418 -9 631
financial year
Book value of intangible assets, at the 1 831 2 481
beginning of the financial year
Book value of intangible assets, at the end of 1 341 1 831
the financial year
Property, plant and
equipment
Carrying amount at the beginning 42 022 40 480
of the financial year
Exchange rate 1 696 901
differences
Additions 2 060 666
Disposals -1 989 -25
Other -75 0
reclassifications
between items
Carrying amount at the end of the 43 714 42 022
financial year
Accumulated depreciation and amortization at the -31 755 -29 304
beginning of the financial year
Exchange rate -1 568 -834
differences
Accumulated 0 0
depreciations on
disposals
Depreciation for the -1 478 -1 617
financial year
Impairments 0 0
Accumulated depreciation and amortization at the end of the -34 801 -31 755
financial year
Book value of property, plant and equipment, at the beginning 10 267 11 175
of the financial year
Book value of property, plant and equipment, at the end of the 8 913 10 267
financial year
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 financial year, 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 financial year have been presented in Note 16. Group management's other
employee benefits are presented in the annual financial
statements.
12. Interest-bearing 31.12. 31.12.
liabilities
2010 2009
Non-current interest-bearing liabilities 10 000 14 318
recognized at amortized cost
Current 4 439 4 215
interest-bearing
liabilities
TOTAL 14 439 18 533
13. Other lease 31.12. 31.12.
liabilities
Group as lessee 2010 2009
Minimum rents paid on
the basis of other
non-cancellable
leases:
- Within one year 547 576
- After the period of more than 1 157 1 080
one and less than five years
- More than five years 701 782
TOTAL 2 406 2 438
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.
14. Pledged assets and
contingent liabilities
Raute Group has non-current credit regulation agreements worth EUR 10 million
(MEUR 10), of which EUR 10 million (MEUR 8)
were unused on December 31, 2010. The unused credit limit is secured by a EUR 3
million business mortgage.
Raute Corporation has a EUR 10 million (MEUR 10) domestic commercial paper
program, which allows it to issue commercial papers
maturing in less than one year. The program is arranged by
Nordea Bank Finland Plc.
31.12. 31.12.
2010 2009
Pledged assets on behalf of the
Parent company
Pension loans (TyEL) 14 000 18 000
- Business morgages 6 700 4 700
- Pledged assets 1 000 3 000
- Credit insurance 4 900 5 600
agreements
Other loans 100 100
- Real estate 134 134
mortgages
Commercial bank guarantees on
behalf of the Parent
company and 10 154 7 125
subsidiaries
Mortgage agreements on
behalf of subsidiaries
- Counter guarantees 3 327 200
Mortgages and
contingencies total
- Secured by mortgages 10 134 18 834
total (1)
- Secured by deposits 2 000 0
of money total (2)
- Counter guarantees 20 895 7 325
total (3)
Other lease
liabilities
- Within one year 547 576
- After the period of more than 1 157 1 080
one and less than five years
- More than five years 701 782
Loans and guarantees on behalf of
the related party
No loans are granted to the company's management. On December 31, 2010,
the Parent company
Raute Corporation had loan receivables from its subsidiary
Raute Service LLC EUR 355 thousand
(EUR 355 thousand). Raute Corporation had a EUR 100 thousand
(110 thousand) liability to
the Raute
Corporation's Sickness
Fund.
No pledges have been given or other commitments made on behalf of the company's
management and shareholders.
15. Currency derivatives and 31.12. 31.12.
hedging instruments
2010 2009
Currency derivatives are used for hedging purposes. During the
financial year, 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 reserves in the equity. Related
to hedge accounting, an amount of
EUR -14 thousand has been recognized in the comprehensive
income statement during the
financial year. During the financial year, no ineffective
portion has been connected to
these items. At the end of the financial year, Raute
Corporation had no financial assets
classified as hedge
accounting.
Nominal values of forward
contracts in foreign currency
Economic hedging
- Related to financing 189 661
- Related to hedging 283 1 615
of net sales
Fair values of forward contracts
in foreign currency
Economic hedging
- Related to financing 0 -35
- Related to the 2 98
hedging of net sales
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 financial year
an amount of EUR 50 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 EUR 7.90
date of grant
Exercise period 3 years
Subscription period March 1, 2013 to March 31, 2016
Settlement Shares
16. Events after the
balance sheet date
On January 20, 2011, Raute Corporation published a stock exchange release on
receiving over EUR 12 million in orders.
These orders are not included in the December
31, 2010 order book.
The Board of Directors will propose to Raute Corporation's Annual General
Meeting 2011, to be held on April 13, 2011, that
a dividend of EUR 0.30 per share be paid for the financial year 2010, that is, a
total of EUR 1 201 thousand, and that the
remainder, EUR 6 525 thousand be
transferred to equity.
GROUP KEY RATIOS 1.1.-31 1.1.-31
.12. .12.
2010 2009
Return on investment 5,1 -21,6
(ROI), %
Return on equity 4,9 -28,4
(ROE), %
Gearing, % -39,8 -40,6
Equity ratio, % 50,7 46,0
Order book, EUR 33 22
million
Order intake, EUR 72 35
million
Exported portion of 91,9 83,2
net sales, %
Change in net sales, % 71,6 -62,8
Gross capital 2,2 1,1
expenditure, EUR
million
% of net sales 3,5 3,0
Research and 1,8 2,5
development costs, EUR
million
% of net sales 2,9 6,7
Earnings per share
(EPS), EUR
- undiluted 0,29 -2,03
- diluted 0,29 -2,03
Equity to share, EUR 6,05 5,76
Dividend per share 0,30* 0,00
series K shares, EUR
Dividend per share 0,30* 0,00
series A shares, EUR
Dividend per profit, % 103,8 0,0
Effective dividend 3,1 0,0
return, %
Share price at the end 9,70 7,47
of the financial year,
EUR
Number of shares
- weighted average, 1 4 005 4 003
000 pcs
- diluted, 1 000 pcs 4 005 4 003
* Board of Directors' proposal to
the Annual General Meeting
Calculation of key
ratios Return on
investment (ROI), % =
Profit before tax +
financial expenses
----------------------
----------------------
--------------- x 100
Shareholders' equity +
interest-bearing
financial liabilities
(average of the
financial year)Return
on equity (ROE), % =
Profit/loss for the
period
----------------------
----------------------
--------------- x 100
Shareholders' equity
(average of the
financial year)
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
financial year
----------------------
----------------------
---------------
Equity issue-adjusted
average number of
shares during the
financial year
Earnings per share,
diluted, euros =
Diluted profit for the
financial year
----------------------
----------------------
---------------
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 financial year
Dividend per share,
euros =
Distributed dividend
for the financial year
----------------------
----------------------
---------------
Undiluted number of
shares at the end of
the financial year
Dividend per profit, %
=
Dividend per 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 financial
year.
Market value of
capital stock =
Undiluted number of
shares at the end of
the financial year
(series A + series K
shares) x closing
price of the share on
the last day of the
financial year
Gearing, % =
Interest-bearing net
financial liabilities
----------------------
----------------------
-------------- x 100
Shareholders' equity
DEVELOPMENT OF Q 4 Q 3 Q 2 Q 1 Rolling Rolling
QUARTERLY RESULTS 2010 2010 2010 2010 1.1.2010 1.1.2009
(EUR 1 000) - -
31.12.2010 31.12.2009
NET SALES 13 396 19 490 19 546 10 435 62 867 36 638
Other operating 10 4 431 120 18 4 580 153
income
Change in
inventories of
finished
goods and work in 815 -45 -87 -332 351 795
progress
Materials and -7 395 -11 001 -10 612 -3 671 -32 679 -15 695
services
Expenses from -6 418 -5 450 -6 211 -5 387 -23 467 -22 047
employee benefits
Depreciation and -574 -580 -459 -637 -2 250 -2 670
amortization
Other operating -2 166 -1 913 -2 194 -1 817 -8 091 -6 869
expenses
Total operating -16 554 -18 944 -19 476 -11 512 -66 487 -47 281
expenses
OPERATING PROFIT -2 333 4 932 103 -1 391 1 311 -9 695
% of net sales -17 25 1 -13 2 -26
Financial income 266 -98 185 376 728 356
Financial expenses -338 21 -256 -344 -917 -551
PROFIT (LOSS) -2 406 4 855 33 -1 359 1 122 -9 890
BEFORE TAX
% of net sales -18 25 0 -13 2 -27
Income taxes 538 -755 -156 409 36 1 749
PROFIT (LOSS) FOR -1 868 4 100 -123 -950 1 158 -8 141
THE PERIOD
% of net sales -14 21 -1 -9 2 -22
Attributable to
Equity holders of -1 868 4 100 -123 -950 1 158 -8 141
the Parent company
Earnings per
share, EUR
Undiluted earnings -0,47 1,02 -0,03 -0,24
per share
Diluted earnings -0,47 1,02 -0,03 -0,24
per share
Shares, 1 000 pcs
Adjusted average 4 005 4 005 4 005 4 005
number of shares
Adjusted average 4 005 4 005 4 005 4 005
number of shares,
diluted
LARGEST Number Number of
SHAREHOLDERS AT of
31 DECEMBER, 2010 series series A
K
shares shares Total
(20 (1 vote number
votes
per per of shares
share) share)
1. Sundholm Göran 601 433 601 433
2. Suominen Jussi 48 000 74 759 122 759
Matias
3. Mustakallio 60 480 60 009 120 489
Kari Pauli
4. Suominen Pekka 48 000 62 429 110 429
5. Suominen Tiina 48 000 62 316 110 316
Sini-Maria
6. Siivonen Osku 50 640 53 539 104 179
Pekka
7. Mandatum 96 900 96 900
Henkivakuutusosake
yhtiö
8. Kirmo Kaisa 50 280 41 826 92 106
Marketta
9. Lisboa De 85 000 85 000
Castro Palacios
Hietala M
10. Keskiaho Kaija 33 600 51 116 84 716
Leena
11. Mustakallio 49 180 34 670 83 850
Mika Tapani
12. Särkijärvi 60 480 22 009 82 489
Anna Riitta
13. Mustakallio 47 240 30 862 78 102
Ulla Sinikka
14. 76 000 76 000
Sijoitusrahasto
Alfred Berg Small
Cap Finland
15. Mustakallio 43 240 20 162 63 402
Marja Helena
16. Relander 61 350 61 350
Harald
17. Kirmo Lasse 30 000 26 200 56 200
18. 12 000 43 256 55 256
Särkijärvi-Martine
z Anu Riitta
19. Särkijärvi 12 000 43 256 55 256
Timo
20. Suominen Jukka 24 960 27 964 52 924
Matias
TOTAL 618 100 1 575 056 2 193 156
Share of total 62,4 52,3 54,8
amount of shares,
%
Share of total 62,4 52,3 61,0
voting rights, %
Nominee-registered 84 794 84 794
Other shareholders 373 061 1 353 747 1 726 808
TOTAL 991 161 3 013 597 4 004 758
MANAGEMENT'S 144 470 138 049 282 519
SHAREHOLDING
Share of total 14,6 4,6 7,1
amount of shares,
%
Share of total 14,6 4,6 13,3
voting rights, %
SHARE INFORMATION 31.12. 31.12.
2010 2009
Number of shares
- Series K shares, 991 161 991 161
ordinary shares
(20 votes/share)
- Series A shares 3 013 597 3 013 597
(1 vote/share)
Total 4 004 758 4 004 758
Trading in the company's
shares (series A shares)
Trading of shares, 646 052 454 798
pcs
Trading of shares, 5,2 3,3
EUR million
Share price of the
series A shares
At the end of the 9,70 7,47
financial year,
EUR
Highest price 10,10 8,90
during the
financial year,
EUR
Lowest price 7,24 6,50
during the
financial year,
EUR
Average price 8,21 7,29
during the
financial year,
EUR
Market value of
capital stock
- Series K shares, 9,6 7,4
EUR million*
- Series A shares, 29,2 22,5
EUR million
Total, EUR million 38,8 29,9
*Series K shares valued at the value of
series A shares at the end of financial year.
RAUTE CORPORATION
Board of Directors
PRESS CONFERENCE ON
FEBRUARY 15, 2011 AT 2
P.M.:
A press conference will be organized for analysts and the media on February 15,
2011 at 2 p.m. at Scandic Simonkenttä Hotel, Roba
cabinet, Simonkatu 9, Helsinki. The financial statement release will
be presented by Mr. Tapani Kiiski, President and CEO,
and Ms. Arja
Hakala, CFO.
FINANCIAL RELEASES
IN 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 consolidated financial statements
and Annual Report 2010 will be published in week 11.
Raute Corporation's Annual General Meeting will be held in Lahti, at
Sibelius Hall on Wednesday April 13, 2011 at 6 p.m
FURTHER
INFORMATION:
Mr. Tapani Kiiski, President and CEO, Raute Corporation,
tel. +358 3 829 3560, mobile +358 400 814 148
Ms. Arja Hakala, CFO, Raute Corporation, tel.
+358 3 829 3293, mobile +358 400 710 387
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd,
main media, www.raute.com
RAUTE IN BRIEF:
Raute is a technology and service company that operates worldwide. Raute's
customers are companies operating in the wood
products industry that manufacture veneer, plywood and LVL (Laminated Veneer
Lumber). The technology offering covers machinery and equipment for the entire
production process. As a supplier of mill-scale projects Raute is a global
market leader both in the plywood and LVL industries. Additionally, Raute's
full-service concept includes services ranging from repairs and spare parts
deliveries to regular maintenance and equipment modernizations. Raute's head
office is located in Nastola, Finland. Its other production plants are in the
Vancouver area of Canada, in the Shanghai area of China, and in Kajaani,
Finland. Raute's net sales in 2010 were EUR 62.9 million.The Group's headcount
at the end of 2010 was 495.
More information on the company can be found at: http://www.raute.com/.
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