2015-02-12 08:00:04 CET
2015-02-12 08:00:18 CET
REGULATED INFORMATION
Raute - Financial Statement Release
Raute Corporation - Financial statements January 1 - December 31, 2014
Nastola, Finland, 2015-02-12 08:00 CET (GLOBE NEWSWIRE) -- RAUTE CORPORATION
FINANCIAL STATEMENTS RELEASE FEBRUARY 12, 2015 AT 9:00 A.M.
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1-DECEMBER 31, 2014
- The Group's net sales amounted to EUR 94.0 million (MEUR 83.3), up 13% on the
comparison period. Order intake, at EUR 112 million (MEUR 63), increased 77%.
Order book rose to EUR 44 million (MEUR 28).
- Operating profit, at EUR +2.6 million (MEUR +1.8), grew 43 percent from the
comparison period. Result before taxes was EUR +2.8 million (MEUR +1.6).
- Undiluted earnings per share were EUR 0.59 (EUR +0.30) and diluted earnings
per share were EUR 0.59 (EUR +0.30).
- Fourth-quarter net sales and operating profit were record-high, at EUR 34.0
million and EUR 3.6 million, respectively. Order intake was EUR 23 million.
- The Board of Directors will propose to the Annual General Meeting that a
dividend of EUR 0.40 (EUR 0.20) per share be paid for the financial year 2014.
- The Board of Directors will propose to the Annual General Meeting that EUR
0.20 (EUR 0.30) per share be paid from the non-restricted equity reserve as
repayment of equity.
- Raute's net sales are expected to grow in 2015 and operating profit is
anticipated to improve from the previous year 2014.
TAPANI KIISKI, PRESIDENT AND CEO: HEADING INTO 2015 WITH STRONG TARGETS
Despite expectations, the global economy and financial market did not recover
their balance in 2014. On the contrary, partly due to political crises,
economic development took a turn for the worse during the year. Construction
activity remained at a low level.
Although the North American economy experienced strong growth compared to the
rest of the world, even there construction failed to grow at the same rate as
the economy. Uncertainty regarding the Russian market increased further, on
account of both the sanctions resulting from the crisis in Ukraine and the
strong decline in the price of oil and the exchange rate of the rouble.
Economic growth also slowed down in Asia, including China, towards the end of
the year, which meant we were also left with no assistance from the Asian
markets. As expected, our customers in South America concentrated on digesting
the large investments they had carried out a few years earlier. Europe, on the
other hand, was a strong market for us. However, the brisk demand for spare
parts, minor improvement projects and services indicates that our customer
companies have been successful and been able to keep their production capacity
utilization rates at a high level.
As the projects that we had expected to take place already in late 2013 were
postponed, we had to start 2014 with a thin order book and our net sales in the
early part of the year were low. However, we received a high number of orders
in the course of the year, particularly in the second quarter. Our net sales
grew 13 percent, something we can be proud of in the current market situation.
The strong development of our technology services continued, even though this
time their proportional share of total net sales did not increase on account of
the strong growth in project deliveries. Our North American unit substantially
improved its result, thanks both to our internal measures and an increase in
demand. The market launch and first deliveries of our Dragon peeling lines that
we developed for the emerging markets and particularly China proved to be
successful. In this light, my expectations for the Dragon products are high.
The large variations in the workload during the year - fourth-quarter net sales
were more than double compared to the first-quarter - made it substantially
more difficult for us to use our resources efficiently and control our costs. A
few individual projects also made us incur unforeseen costs. We improved our
result on the previous year, in keeping with our forecasts, but fell short of
our target. During the current year, we will place particular emphasis on the
flexible and efficient execution of our deliveries as well as the related
costs.
We are heading into 2015 with strong expectations and an initial order book
that is stronger than a year ago. Uncertainty seems to have established itself
as the status quo in the economy and the markets, and we need to know how to
operate in this type of an environment. Our order book is strong, and we are
currently conducting negotiations on some concrete projects of a significant
size. I believe that one or even several of them will start up during the early
part of the year. Raute enjoys a strong competitive position in these projects.
Our technology services will continue to grow. Our R&D will also provide us
with new reinforcements to support our growth along with the Dragon product
family. Based on this setup, I am confident that our positive development in
terms of both net sales and profit will continue and gain momentum during 2015.
I would like to send out a heartfelt thank you to Raute's customers for their
invaluable cooperation and trust, to our personnel for their outstanding work
and flexibility in the face of ever-changing challenges, to our shareholders
for their continued confidence in us, and to all our other partners for their
role in furthering Raute's development and success.
FOURTH QUARTER OF 2014
Order intake and order book
Raute's customers have several large-scale projects in the planning phase, none
of which led to an actual investment decision during the fourth quarter.
Several individual production line and modernization projects were also further
postponed. The uncertainty caused by the crisis in Ukraine and the weakening of
the economy as a result of the decline in the price of oil and the exchange
rate of the rouble have obviously caused investment decisions to be postponed
in the Russian markets, although preparations for many investments have been
actively continued. The order intake, EUR 23 million (MEUR 22), were at a good
level in the fourth quarter without any new major individual orders being
placed. Technology services accounted for EUR 10 million (MEUR 11) of the order
intake.
The order book weakened during the fourth quarter by EUR 12 million, amounting
to EUR 44 million at the end of 2014 (MEUR 28).
Net sales
Fourth-quarter net sales amounted to EUR 34.0 million (MEUR 24.5). Technology
services accounted for 28 percent of the Group's total net sales (35%). Net
sales increased 38 percent from the third quarter in line with the order book's
timing.
Result and profitability
Operating profit in the fourth quarter was EUR 3.6 million positive (MEUR 1.5
positive) and accounted for 11 percent (6%) of net sales. The result was EUR
3.2 million positive (MEUR 0.9 positive), and earnings per share were EUR 0.80
(EUR +0.23). Profitability improved in comparison with the previous quarters,
which mainly resulted from increased net sales.
RAUTE CORPORATION - FINANCIAL STATEMENTS JANUARY 1- DECEMBER 31, 2014
BUSINESS ENVIRONMENT
Market situation in customer industries
Raute's customers in the veneer, plywood and LVL (Laminated Veneer Lumber)
industries are engaged in the manufacture of wood products used in investment
commodities and are thus highly affected by fluctuations in construction,
housing-related consumption, international trade, and transportation.
The situation in the global economy and the financial markets during 2014 did
not change considerably with respect to Raute or Raute's customer base.
In part due to political crises, economic development even partly took a turn
for the worse during the year in Russia and Europe. Also in Asia, including
China, economic growth slowed down towards year-end.
Construction activity remained at a low level in all market areas, including
North America, where the economy already took a promising upward trend. As a
result of the uncertainty, however, the order books of Raute's customers are
often short, which meant the situation was not conducive to realizing
significant investments. A sign of this has been the slow progress of major
projects that are under negotiation.
Demand for maintenance and spare parts services continued at a good level. This
bears testimony to the fact that the utilization rates of Raute's customers'
production facilities mainly remained good.
Demand for wood products technology and technology services
In 2014, two major capacity-generating projects were started up: the
construction of softwood plywood and LVL mills in Poland. In addition to these,
several large projects were in the planning and negotiation phase but the
requirements for making the investment decisions, i.e. trust in the permanence
of demand and the availability of funding, did not yet materialize.
Even though the North American economy experienced strong growth compared to
the rest of the world, construction activity failed to embark on a similar
growth trajectory. Among Raute's customers, demand focused on smaller
modernization projects and technology services.
The uncertainty resulting from the crisis in Ukraine obviously caused
investment decisions to be postponed in the Russian markets, although
preparations for many investments have been actively continued. It is difficult
to estimate when the situation in Russia will normalize, but it is not expected
to happen anytime soon.
In South America, Raute's customers focused, as expected, on ramping up the
capacity of the large plywood mill investments they have made a few years ago
and no major new investment projects were started up.
ORDER INTAKE AND ORDER BOOK
Raute serves the wood products industry with a full-service concept based on
service that encompasses the entire life cycle of the delivered equipment.
Raute's business consists of project deliveries and technology services.
Project deliveries comprise complete production machinery for new mills,
production lines and individual machines and equipment. Additionally, Raute's
full-service concept includes comprehensive technology services ranging from
spare parts deliveries to regular maintenance and equipment modernizations, as
well as consulting, training and reconditioned machinery.
The order intake for 2014 stood at EUR 112 million (MEUR 63). Of new orders, 63
percent came from Europe (35%), 15 percent from Russia (23%), 10 percent from
North America (25%), 7 percent from South America (13%) and 5 percent from
Asia-Pacific (4%). The strong fluctuations in the distribution of new orders
between the various market areas are typical for project-focused business.
The order intake for project deliveries stood at EUR 73 million (MEUR 29) and
increased on the previous year by 154 percent. The new orders received included
two capacity-generating projects in Poland, which accounted for EUR 38 million
of the order intake. Excluding these capacity-generating projects, the order
intake for project deliveries increased 21 percent.
The order intake for technology services stood at EUR 39 million (MEUR 34). The
increase in order intake, 12 percent, resulted from modernizations and spare
parts.
The order book grew in 2014 by EUR 16 million, amounting to EUR 44 million at
the end of the financial year (MEUR 28).
COMPETITIVE POSITION
Raute's competitive position has remained good. Raute's solutions help
customers in securing their delivery and service capabilities throughout the
life cycle of the production process or part thereof supplied by Raute. In such
investments, the supplier's overall expertise and extensive and diverse
technology offering play a key role. The competitive edge provided by Raute is
also a major draw when customers select their cooperation partners. Raute's
strong financial position and its long-term dedication to serving selected
customer industries also enhance its credibility and improve its competitive
position as a company that carries out long-term investment projects.
NET SALES
The Group's net sales amounted to EUR 94.0 million (MEUR 83.3). Net sales grew
by 13 percent on 2013. The increase resulted from the high order intake
particularly in project deliveries and from the scheduling of our order book.
Net sales were generated by project deliveries related to the wood products
technology business and by technology services.
Net sales for project deliveries totaled EUR 58 million (MEUR 51), up 12
percent from the previous year. Project deliveries accounted for 62 percent of
total net sales (62%). The plywood industry's share of the net sales of project
deliveries was 75 percent (77%), while the LVL industry's share was 25 percent
(23%).
Altogether three major capacity-generating projects were at the installation
and commissioning phase during the year, and they have proceeded according to
the timetable set by the customer. The expansion of a South American plywood
mill, initiated in 2011, and the rebuilding of a mill destroyed in a fire in
early 2012 have been completed. The order received in July 2012 for the
delivery of LVL mill machinery to Germany lags behind its initial schedule due
to the need of modifications on account of the properties of the raw material
which has not been used much in the past. The acceptance test for the last
production line was carried out in January 2015. Two large orders received
during the year 2014 to Poland proceeded from the planning phase to equipment
deliveries.
Net sales for technology services totaled EUR 36 million (MEUR 32). Net sales
grew 14 percent from the previous year and accounted for 38 percent (38%) of
total net sales. The increase in net sales came primarily from modernizations
and spare parts.
Of the total net sales in 2014, Europe accounted for 52 percent (40%), Russia
for 18 percent (19%), North America for 14 percent (14%), South America for 13
percent (22%), and Asia-Pacific for 3 percent (5%).
RESULT AND PROFITABILITY
The Group's operating profit for 2014 was EUR 2.6 million positive (MEUR 1.8
positive) and accounted for 3 percent of net sales (2%). The profit developed
primarily during the latter half of the year due to the order intake and timing
of the order book. The fourth quarter accounted for a record EUR 34.0 million
of net sales and operating profit for EUR 3.6 million.
The operating profit improved 43 percent on the previous year as a result of an
increase in net sales. However, the Group failed to reach the profitability
level in line with the actual net sales. Large variations in the workload
during the year substantially impeded the efficient use of resources and cost
control. In addition, the result was burdened by non-recurring, unforeseen
additional costs incurred in two projects, totaling EUR 1.7 million. In one of
these projects, the behavior of a new wood species in industrially tried and
tested processes made it necessary to carry out modifications to the equipment,
thus delaying the acceptance of the delivery. The other project is a pilot
delivery involving the development of new technology and generating significant
new business in future.
The Group's financial income and expenses totaled EUR +0.2 million (MEUR -0.2).
The Group's profit before tax was EUR 2.8 million positive (MEUR +1.6) and
profit for the financial year was EUR 2.4 million positive (MEUR +1.2).
Comprehensive income for the Group was EUR 2.6 million positive (MEUR +1.2).
Undiluted earnings per share were EUR 0.59 (EUR 0.30) and diluted earnings per
share were EUR 0.59 (EUR 0.30). Return on investment was 11 percent (7%) and
return on equity 10 percent (+5%).
CASH FLOW AND BALANCE SHEET
The Group's financial position remained good throughout the year. At the end of
the financial year, the Group's cash and cash equivalents exceeded
interest-bearing liabilities by EUR 1.7 million (MEUR 6.7). At the end of the
financial year gearing was -7 percent (-28%). The change in gearing was
affected by the high amount of accounts receivables at the end of the financial
year. Equity ratio was 56 percent (57%).
The Group's cash and cash equivalents amounted to EUR 4.4 million (MEUR 12.7)
at the end of the financial year. The change in cash and cash equivalents
during the financial year was EUR 8.1 million negative (MEUR 6.8 negative).
Operating cash flow was EUR 1.9 million negative (MEUR 3.7 positive). Cash flow
from investment activities was EUR 1.1 million negative (MEUR 3.2 negative).
Cash flow from financing activities was EUR 5.2 million negative (MEUR 7.4
negative), including EUR 2.0 million (MEUR 2.0) in dividend payment and
repayment of equity from the non-restricted equity reserve and EUR 3.3 million
(MEUR 5.4) in debt repayments.
The Group's balance sheet total at the end of the year stood at EUR 52.6
million (MEUR 48.8). Fluctuations in balance sheet working capital items and
the key figures based on them are due to differences in the timing of customer
payments and the cost accumulation from project deliveries, which is typical of
the project business.
Interest-bearing liabilities amounted to EUR 2.8 million (MEUR 6.0) at the end
of the financial year, with current interest-bearing liabilities accounting for
EUR 1.5 million (MEUR 3.5).
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 parent company Raute Corporation is prepared for future working capital
needs and has concluded long-term credit facility agreements with three Nordic
banks totaling EUR 23.0 million. The main covenants for the credit facility are
an equity ratio of >30% and gearing of <100%. Of the credit facility, EUR 20.0
million remained unused at the end of the financial year.
LOANS TO RELATED PARTIES AND OTHER LIABILITIES
On December 31, 2014, the Parent company Raute Corporation did not have any
loan receivables from its subsidiaries. Other liabilities are presented in the
figures section of this report.
EVENTS DURING THE REPORTING PERIOD
Raute Corporation published stock exchange releases on the following events in
2014:
February 12, 2014 Long-term share-based incentive plan for Raute's upper
management for the years 2014-2018
February 25, 2014 Share subscription with Raute Corporation's 2010 A stock
options
March 31, 2014 Decisions by Raute's Annual General Meeting 2014.
June 6, 2014 Raute received an order valued at more than EUR 8 million from
Poland
June 26, 2014 Raute received an order valued at EUR 23 million from engineered
wood products company Steico
November 10, 2014 Share subscription with Raute Corporation's 2010 A stock
options.
RESEARCH AND DEVELOPMENT COSTS AND CAPITAL EXPENDITURE
Raute is a leading technology supplier for the plywood and LVL industries and
focuses strongly on the development of increasingly efficient, productive and
environmentally friendly manufacturing technology and supporting measurement
and machine vision applications.
In 2014, the Group's research and development costs totaled EUR 1.8 million
(MEUR 2.5) and 1.9 percent of net sales (3.0%). In 2014, new technologies were
developed for China's developing plywood manufacturing markets, research was
carried out on new wood processing methods, and the extensive program aimed at
developing automation, measurement systems and machine vision to produce new,
more advanced applications for process optimization in the plywood and LVL
industries was continued.
The Group's investments during the financial year totaled EUR 1.7 million (MEUR
3.2). The investments essentially consisted of replacement investments related
to fixed assets.
The Group's investments include EUR 0.3 million in capitalized development
costs (MEUR 0.6).
DEVELOPMENT OF OPERATIONS
The “Särmä” (Edge) change project, which was started in 2012, was completed in
2014, and the identified practices were integrated into Raute's working
culture. The objective of the “Särmä” project, which spanned the entire year,
was to get Raute's entire personnel to commit even more strongly to Raute's
customer promise and the better quality of products, services and operations.
Raute's entire personnel were involved in the project.
PERSONNEL
The Group's headcount at the end of 2014 was 587 (534). Finnish Group companies
accounted for 67 percent (73%) of employees, Chinese companies for 18 percent
(14%), North American companies for 11 percent (10%), and other sales and
maintenance companies for 4 percent (3%).
Converted to full-time employees (“effective headcount”), the average number of
employees during the financial year was 530 (515). These numbers are affected
by the adjustment measures carried out during the first quarter in the Nastola
and Jyväskylä units in Finland as well as the outsourcing of the Jyväskylä
unit's engineering functions through a business transaction at the beginning of
April. Salaries and remunerations paid by the Group totaled EUR 24.1 million
(MEUR 22.7).
The Group continued to develop the competence of its personnel and increase
their commitment to the company. Two percent (3%) of the payroll was invested
in personnel training. The “Great Place to Work” project was used to develop
Raute as a work community and work environment.
REMUNERATION
The Group has remuneration systems in place that cover the entire personnel.
Option-based incentive plan 2010
The Annual General Meeting held on March 31, 2010 resolved to issue a maximum
of 240,000 stock options. Of the stock options transferred, 5,000 stock options
marked with the symbol 2010 C were returned to the company during 2014. During
2014, a total of 10,470 new series A shares were subscribed for by key persons
under the 2010 series A stock option rights.
The Group's key personnel held on December 31, 2014 a total of 69,530 stock
options marked with the symbol 2010 A, 80,000 stock options marked 2010 B and
75,000 stock options marked 2010 C. The subscription period for series A stock
options began on March 1, 2013 and for series B stock options on April 1, 2014.
The terms and conditions of the stock option incentive plan 2010 are available
on the company's website.
Share-based incentive program 2014-2018
The Group has a valid long-term share-based incentive plan based on
performance. The plan includes three separate share plans commencing in 2014,
2015 and 2016. Each plan will span three years. Each share plan includes a
one-year performance period (years 2014, 2015 and 2016), the payment of the
possible share reward in the form of the company's series A shares in the
spring following the performance period (2015, 2016 and 2017) and a two-year
vesting period following the performance period, during which the reward's
value development is based on the development of the value of the share. The
share plans will commence in 2014, 2015 and 2016. The terms and conditions of
the share-based incentive plan 2014-2018 are available on the company's
website. No share reward will be paid for the performance period 2014.
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 key risk areas relate to the nature of the business, the
business environment, financing, and damage or loss. The fluctuations in demand
resulting from economic cycles and delivery and technology risks have been
identified as the Group's most significant business risks.
Risks in the near term continue to be driven by the uncertainty relating to the
global economic situation and the development of the financial markets, as well
as by international political instability. The most significant risks for Raute
are related to the development of net sales and profitability resulting from
changes in demand.
The Group has no ongoing legal proceedings or other disputes in progress that
might materially affect the continuity of business operations, nor is the Board
of Directors aware of any other legal risks related to the Group's operations
that might have such an effect.
Business risks
Impact of economic cycles on business operations
Raute's business operations are characterized by the sensitivity of investment
demand to fluctuations in the global economy and the financing markets, and the
cyclical nature of project business. The impact of changes in demand on the
Group's result is reduced by increasing the share of technology services,
increasing operations in market areas with a small current market share,
creating products for completely new customer groups and developing the partner
network.
Deliveries and technology
The bulk of Raute's business operations consists of project deliveries, which
expose the company to risks caused by customer-specific solutions related to
each customer's end product, production methods or raw materials. At the
quotation and negotiation phase, the company has to take risks relating to the
promised performance figures and make estimates of implementation costs.
Raute invests heavily in product development. The developmental phase for new
technologies involves the risk that the project will not lead to a
technologically or commercially acceptable solution. The functionality and
capacity of new solutions produced as a result of development work cannot be
fully verified until the solutions can be tested under production conditions in
conjunction with the customer deliveries.
Contract, product liability, implementation, cost and capacity risks are
managed using project management procedures that comply with the company's
ISO-certified quality system. Technology risks are reduced by the conditions of
delivery contracts and by restricting the number of simultaneous first
deliveries.
Emerging markets
Raute's objective is to increase its local business in China and Russia, among
others, where, besides opportunities, companies face risks typical for emerging
markets. Information security risks are managed according to a defined
information security policy.
Human resources
Competence retention and development and ensuring the sufficiency of human
resources are particularly important in cyclical business. Continuity is
ensured by monitoring the development of the age structure, implementing
systematic human resources management and investing in well-being at work.
Financing risks
The most significant financing risks in the Group's international business
operations are default risks and currency risks related to counterparties. The
Group is also exposed to liquidity, refinancing, interest rate and price risks.
The default risk relating to customers' solvency is managed by covering the
unpaid sum with bank guarantees, letters of credit or other securities and with
accelerated payment terms. The Group's liquid assets are mainly held in banks
in the Nordic countries.
The Group's main currency is the euro. The most significant currency risks
result from the following currencies: Chinese yuan (CNY), Russian ruble (RUB),
Canadian dollar (CAD) and US dollar (USD). The main hedging instruments used
are foreign currency forward contracts. Currency clauses are included in
quotations to hedge against currency risks during the quotation period.
Depending on the case, currency risks related to preliminary sales contracts
are hedged with currency option contracts.
The Group has made preparations for fluctuating working capital requirements
and possible disturbances in the availability of money through long-term credit
facility agreements with three Nordic banks. The interest rate risk related to
the company's variable interest rate loans is hedged with interest rate swaps.
The Group's interest risks are mainly related to the return on liquid assets.
Risks of damage or loss
Raute's most significant single risks concerning material damage and business
interruption loss are a fire or a serious machine or information system
breakdown at the Nastola main unit, where the production, planning, financial,
and ERP systems serving the Group's key technologies are centrally located.
Other risks of damage or loss include occupational safety risks, which are
managed by means of active risk-prevention measures, such as continuous
personnel training and investigation of all near-miss situations. Occupational
safety and ergonomics are under continuous development.
Raute's production operations do not involve significant environmental risks.
The main unit in Nastola has an ISO-certified environmental management program,
whose principles are also adhered to in other units.
The Group hedges against risks of damage or loss by assessing its facilities
and processes in terms of risk management and by maintaining emergency plans.
Global and local insurance programs are checked regularly as part of overall
risk management. The objective is to use insurance policies to sufficiently
hedge against all risks that are reasonable to handle through insurance due to
economical or other reasons.
Organizing risk management
Raute's risk management policy is approved by the Board of Directors. The Board
is responsible for organizing internal control and risk management, and for
monitoring their efficiency.
The Executive Board defines the Group's general risk management principles and
operating policies, and defines the boundaries of the organization's powers.
The President and CEO and the CFO regularly report significant risks to the
Board.
The Group's President and CEO controls the implementation of the risk
management principles in the entire Group, while the Presidents of the Group
companies are responsible for risk management in their respective companies.
The members of the Group's Executive Board are responsible for their own areas
of responsibility across company boundaries.
Raute has no separate internal auditing organization. The Controller function
oversees the annual internal control plan approved by the Board, develops
internal control and risk management procedures together with the operative
leadership, and monitors compliance with risk management principles,
operational policies and powers.
GROUP STRUCTURE
No changes took place in the Group's legal structure during 2014.
SHAREHOLDERS
The number of shareholders totaled 1,915 at the beginning of the year and 1,991
at the end of the financial year. Series K shares were held by 50 private
individuals (49) at the end of the financial year. Nominee-registered shares
accounted for 3.1 percent (3.1%) of shares. No flagging notifications were
given to the company in 2014.
On December 31, 2014, the Board of Directors and the Group's President and CEO
held altogether 228,479 company shares, totaling 5.7 percent (5.7%) of the
company shares and 11.2 percent (11.2%) of the votes. The figures include the
holdings of their own, minor children and control entities.
AUDITORS
At Raute Corporation's Annual General Meeting on March 31, 2014, the authorized
public accounting company PricewaterhouseCoopers was chosen as auditor with
Authorized Public Accountant Janne Rajalahti as the principal auditor.
CORPORATE GOVERNANCE
Raute Corporation complies with the Finnish Corporate Governance Code 2010 for
listed companies issued by the Securities Market Association on June 15, 2010.
Raute deviates from the Code's recommendation 22 on appointing members to the
Appointments Committee in that one member to the Committee is elected from
outside the Board of Directors, as per the company's Administrative
Instructions, from among the representatives of major shareholders who have
significant voting rights. The Board views this exception as justified, taking
into consideration the company's ownership structure and the possibility to
consider the expectations of major shareholders as early as in the preparation
phase of selecting members of the Board of Directors.
An outline of Raute Corporation's corporate governance principles and the
company's remuneration statement will be published at the same time with the
financial statements.
CORPORATE GOVERNANCE STATEMENT
Raute Corporation's Board of Directors has handled Raute Corporation's
Corporate Governance Statement for 2014 according to chapter 7, section 7 of
the Finnish Securities Markets Act and recommendation 54 of the Finnish
Corporate Governance Code 2010 for listed companies issued by the Securities
Market Association on June 15, 2010. The statement has been drawn up separately
from the Report of the Board of Directors and will be published at the same
time with the financial statements.
BOARD OF DIRECTORS AND PRESIDENT AND CEO
The Annual General Meeting elects the Chairman and Vice-Chairman for the Board
of Directors, and 3-5 Board members.
At Raute Corporation's Annual General Meeting on March 31, 2014, Mr. Erkki
Pehu-Lehtonen was elected Chairman of the Board, Mr. Mika Mustakallio
Vice-Chairman and Mr. Joni Bask, Mr. Risto Hautamäki, Ms. Päivi Leiwo 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 twelve 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
Raute Group's Executive Board and the members' areas of responsibility:
Tapani Kiiski, President and CEO, Chairman - Sales
Arja Hakala, Group Vice President, Finance, CFO - Finance and administration
Marko Hjelt, Group Vice President, Human Resources - Human resources and
competence development
Mika Hyysti, Group Vice President, Technology - Technology, products and R&D
Timo Kangas, Group Vice President, Customer Care - Customer relationships and
marketing, market area EMEA
Petri Lakka, Group Vice President, Technology Services - Technology services
Petri Strengell, Group Vice President, Supply Chain - Sourcing and production.
SHARES
The number of Raute Corporations shares at the end of 2014 totaled 4,015,228
(4,004,758), of which 991,161 (991,161) were series K shares (ordinary share,
20 votes/share) and 3,024,067 (3,013,597) series A shares (1 vote/share). The
shares have a nominal value of two euros. Series K and A shares confer equal
rights to dividends and company assets.
Series K shares can be converted to series A shares under the terms set out in
section 3 of the Articles of Association. If an ordinary share is transferred
to a new owner who has not previously held series K shares, the new owner must
notify the Board of Directors of this in writing and without delay. Other
holders of series K shares have the right to redeem the share under the terms
specified in Article 4 of the Articles of Association.
Raute Corporation's series A shares are listed on NASDAQ OMX Helsinki Ltd. The
trading code is RUTAV. During 2014, 593,682 shares were traded (513,699) worth
altogether EUR 4.6 million (MEUR 4.4). The number of shares traded represents
20 percent (17%) of all listed series A shares. The average price of a series A
share was EUR 7.69 (EUR 8.49). The highest closing price of the year was EUR
8.60 and the lowest EUR 6.90.
During 2014, a total of 10,470 new series A shares were subscribed for under
the 2010 series A stock option rights.
The company's market capitalization at the end of 2014 totaled EUR 29.3 million
(MEUR 27.8), with series K shares valued at the closing price of series A
shares, EUR 7.30 (EUR 6.95), on December 31, 2014.
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.
RAUTE'S DIVIDEND POLICY
Raute exercises an active dividend policy. Its aim is to ensure competitive
returns for its investors. Dividend payment takes into account future
investment needs and the goal of maintaining a solid equity ratio. Due to the
nature of the project business, the dividend is not directly tied to the annual
result.
DISTRIBUTION OF PROFITS FOR THE 2013 FINANCIAL YEAR
The Annual General Meeting held on March 31, 2014 decided to pay a dividend of
EUR 0.20 per share for the financial year 2013. The dividends amounted to a
total of EUR 0.8 million, of which series A shares accounted for EUR 603,133.40
and series K shares for EUR 198,232.20. The dividend payment date was April 10,
2014.
The Annual General Meeting on March 31, 2014 resolved, on the basis of the
balance sheet adopted in respect of the financial year ended on 31 December
2013, on the repayment of assets from the invested non-restricted equity
reserve in the amount of EUR 0.30 per share, i.e. a total of EUR 1,202,048.40
and the remainder, EUR 5,296,293.53, to be retained in equity. The date of
repayment of equity was April 10, 2014.
AUTHORIZATION OF REPURCHASE AND DISPOSAL OF OWN SHARES
The Annual General Meeting held on March 31, 2014 authorized the company's
Board of Directors to decide on the repurchase of Raute Corporation series A
shares with assets from the company's non-restricted equity and to decide on a
directed issue of a maximum of 400,000 shares. The Board of Directors did not
exercise the authorization in 2014.
The company did not possess company shares at the end of the financial year or
hold them as security.
PUBLICATION OF THE FINANCIAL STATEMENTS AND ANNUAL REPORT 2014
Raute Corporation's consolidated financial statements 2014 will be published on
February 12, 2015. Raute Corporation's Annual Report 2014 will be published
during week 9.
ANNUAL GENERAL MEETING 2015
Raute Corporation's Annual General Meeting will be held at Lahti's Sibelius
Hall on Tuesday March 24, 2015 at 6:00 p.m. A shareholder who wishes to include
an issue in Raute Corporation's Annual General Meeting's agenda shall notify
the company thereof in writing no later than February 25, 2015.
BOARD OF DIRECTORS' PROPOSAL CONCERNING PROFIT DISTRIBUTION, DIVIDEND EUR 0.40
PER SHARE
On December 31, 2014, the Parent Company's distributable assets totaled EUR
12,752 thousand, of which EUR 908 thousand stand for the profit for the
financial year 2014.
The Board of Directors will propose to Raute Corporation's Annual General
Meeting, to be held on March 24, 2015, that a dividend of EUR 0.40 per share be
paid to holders of series A and series K shares for the financial year 2014,
and that the remainder of distributable assets be transferred to equity.
On the date of the profit distribution proposal, the number of shares entitled
to a dividend is 4,015,228 shares, which would amount to total dividends of EUR
1,606 thousand. Shareholders who are registered in the shareholders' register
maintained by Euroclear Finland Ltd on the record date for dividend
distribution, March 26, 2015, would be entitled to dividends. The dividend
payment date would be April 2, 2015.
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.
BOARD OF DIRECTORS' PROPOSAL CONCERNING REPAYMENT OF EQUITY FROM INVESTED
NON-RESTRICTED EQUITY RESERVE, EUR 0.20 PER SHARE
The Board of Directors will propose to Raute Corporation's Annual General
Meeting, to be held on March 24, 2015, that the Annual General Meeting decide
to distribute non-restricted equity as repayment of equity from the invested
non-restricted equity reserve in the amount of EUR 0.20 per share. The
non-restricted equity repayment would be paid to a shareholder who, on the
record date for dividend distribution, March 26, 2015, is registered as a
shareholder in the Company's share register maintained by Euroclear Finland
Ltd. The payment date would be April 2, 2015.
OUTLOOK FOR 2015
Raute's business operations are characterized by the sensitivity of investment
commodity demand to cyclical fluctuations in the global economy and financial
markets.
The development of the global economy and financial markets is still facing
major uncertainty, which reflects on the market situation for Raute's customer
industries.
However, improvement investments in the plywood industry to ensure quality and
cost competitiveness and to maintain market shares are expected to be at a
reasonable level in the near future, provided that the economic uncertainty
does not spiral into a new crisis. Several large projects encompassing single
production lines and mill-scale deliveries that are in the planning and
negotiation phase are also pending.
Thanks to its strong financial and market position and the development measures
carried out, Raute is well positioned to respond to demand.
In the prevailing global economic and financial market situation, Raute will
have opportunities in 2015 to achieve growth in project deliveries in Europe
and Asia. The growth in technology services is expected to continue. Based on
the order book, offers and ongoing negotiations, Raute's net sales are expected
to grow in 2015 and its operating profit is anticipated to improve over the
previous year 2014.
SUMMARY OF FINANCIAL STATEMENTS AND NOTES
The figures for the financial years 2014 and 2013 presented in the tables
section of the financial statement bulletin have been audited.
The presented interim financial report
figures have not been audited.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE 1.10.-31.1 1.10.-3 1.1.-31 1.1.-31
INCOME 2. 1.12. .12. .12.
(EUR 1 000) Note 2014 2013 2014 2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET SALES 3,4,5 33 978 24 512 94 021 83 274
--------------------------------------------------------------------------------
Change in inventories of 710 -672 1 672 -954
finished goods and work in
progress
Other operating income -28 158 72 295
Materials and services -19 574 -11 521 -51 775 -40 711
Employee benefits expense 13 -8 023 -7 387 -29 304 -27 417
Depreciation and amortization -524 -479 -2 018 -2 174
Other operating expenses -2 953 -3 098 -10 062 -10 485
--------------------------------------------------------------------------------
Total operative expenses -31 075 -22 486 -93 160 -80 787
--------------------------------------------------------------------------------
OPERATING PROFIT (LOSS) 3 585 1 513 2 605 1 828
--------------------------------------------------------------------------------
% of net sales 11 6 3 2
Financial income 244 210 605 735
Financial expenses -2 -513 -400 -974
--------------------------------------------------------------------------------
PROFIT (LOSS) BEFORE TAX 3 826 1 210 2 810 1 589
--------------------------------------------------------------------------------
% of net sales 11 5 3 2
Income taxes -633 -294 -449 -394
--------------------------------------------------------------------------------
PROFIT (LOSS) FOR THE PERIOD 3 193 916 2 361 1 196
--------------------------------------------------------------------------------
% of net sales 9 4 3 1
Other comprehensive income
items:
Items that will not be reclassified to
profit or loss
Remeasurement of defined benefit 0 84 2 84
obligations
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translating 158 -101 201 -83
foreign operations
--------------------------------------------------------------------------------
Comprehensive income items for the 158 -17 203 1
period, net of tax
--------------------------------------------------------------------------------
COMPREHENSIVE PROFIT (LOSS) FOR THE 3 352 898 2 564 1 196
PERIOD
--------------------------------------------------------------------------------
Profit (loss) for the period
attributable to
Equity holders of the Parent 3 193 916 2 361 1 196
company
Comprehensive profit (loss) for the
period attributable to
Equity holders of the Parent 3 352 898 2 564 1 196
company
Earnings per share for profit (loss)
attributable
to Equity holders of the Parent company,
EUR
Undiluted earnings per share 0,80 0,23 0,59 0,30
Diluted earnings per share 0,80 0,23 0,59 0,30
Shares, 1 000 pcs
Adjusted average number of 4 015 4 005 4 010 4 005
shares
Adjusted average number of 4 017 4 013 4 011 4 013
shares diluted
------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET 31.12. 31.12.
(EUR 1 000) Note 2014 2013
------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets 8 3 492 3 574
Property, plant and equipment 8 7 930 8 396
Other financial assets 500 500
Deferred tax assets 185 96
------------------------------------------------------------------------
Total non-current assets 12 107 12 565
Current assets
Inventories 7 855 5 047
Accounts receivables and other 5 27 568 18 329
receivables
Income tax receivable 684 183
Cash and cash equivalents 4 431 12 658
------------------------------------------------------------------------
Total current assets 40 539 36 218
------------------------------------------------------------------------
TOTAL ASSETS 52 646 48 783
------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to Equity
holders of the Parent company
Share capital 8 031 8 010
Fair value reserve and other 6 001 7 061
reserves
Exchange differences 220 20
Retained earnings 7 722 7 327
Profit for the period 2 361 1 196
------------------------------------------------------------------------
Share of shareholders' equity 24 334 23 613
that belongs to the owners of
the Parent company
------------------------------------------------------------------------
Total equity 24 334 23 613
Non-current liabilities
Non-current provisions 314 460
Deferred tax liability 238 423
Non-current interest-bearing 9 1 250 2 500
liabilities
Pension obligations 2 4
------------------------------------------------------------------------
Total non-current liabilities 1 804 3 387
Current liabilities
Current provisions 2 201 775
Current interest-bearing 9 1 512 3 481
liabilities
Current advance payments 5 9 072 7 099
received
Income tax liability 67 5
Trade payables and other 13 656 10 423
liabilities
------------------------------------------------------------------------
Total current liabilities 26 508 21 783
Total liabilities 28 312 25 170
------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 52 646 48 783
------------------------------------------------------------------------
------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH 1.1.-31 1.1.-31
FLOWS .12. .12.
(EUR 1 000) 2014 2013
------------------------------------------------------------------------
CASH FLOW FROM OPERATING
ACTIVITIES
Proceeds from customer 89 032 76 836
Other operating income 95 295
Payments to suppliers and -90 193 -73 187
employees
------------------------------------------------------------------------
Cash flow before financial items -1 066 3 944
and taxes
Interest paid from operating -217 -364
activities
Dividends received from 100 180
operating activities
Interests received from 35 122
operating activities
Other financing items from 260 153
operating activities
Income taxes paid from operating -969 -329
activities
------------------------------------------------------------------------
NET CASH FLOW FROM OPERATING ACTIVITIES -1 858 3 704
(A)
------------------------------------------------------------------------
CASH FLOW FROM INVESTING
ACTIVITIES
Purchase of property, plant and equipment -1 461 -3 226
and intangible assets
Proceeds from sale of property, plant and equipment 361 53
and intangible assets
Purchase of investments - -3
------------------------------------------------------------------------
NET CASH FLOW FROM INVESTING ACTIVITIES -1 101 -3 176
(B)
------------------------------------------------------------------------
CASH FLOW FROM FINANCING
ACTIVITIES
Proceeds from issue of share 64 -
capital
Repayments of current borrowings -2 000 -2 100
Repayments of non-current -1 250 -3 250
borrowings
Dividends paid and repayment of -2 003 -2 002
equity
------------------------------------------------------------------------
NET CASH FLOW FROM FINANCING ACTIVITIES -5 189 -7 352
(C)
------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS -8 148 -6 825
(A+B+C)
------------------------------------------------------------------------
increase (+)/decrease (-)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE 12 658 19 548
PERIOD*
NET CHANGE IN CASH AND CASH EQUIVALENTS -8 148 -6 825
EFFECTS OF EXCHANGE RATE CHANGES ON CASH -79 -66
------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT THE END OF 4 431 12 658
THE PERIOD*
------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS IN THE BALANCE
SHEET AT THE END OF THE PERIOD*
Cash and cash equivalents 4 431 12 658
------------------------------------------------------------------------
TOTAL 4 431 12 658
------------------------------------------------------------------------
*Cash and cash equivalents comprise cash and bank receivables, which
will be due within the following three months' period.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
--------------------------------------------------------------------------------
Share Invested Other Exchang Retaine
non-restri e d
cted
(EUR 1 000) capital equity reserve differe earning
reserve s nces s
--------------------------------------------------------------------------------
EQUITY at Jan. 1, 2014 8 010 6 498 563 20 8 522
--------------------------------------------------------------------------------
Comprehensive profit (loss) for
the period
Profit (loss) for the period - - - - 2 361
Other comprehensive income
items:
Remeasurement of defined benefit - - - - -
net liability
Exchange differences on - - - 201 -
translating foreign operations
--------------------------------------------------------------------------------
Total comprehensive profit 0 0 0 201 2 361
(loss) for the period
--------------------------------------------------------------------------------
Transactions with owners
Share-options exercised 21 43
Equity-settled share-based
transactions - - 99 - -
Dividends and repayment of - -1 202 - - -801
equity
--------------------------------------------------------------------------------
Total transactions with owners 21 -1 159 99 0 -801
--------------------------------------------------------------------------------
EQUITY at Dec. 31, 2014 8 031 5 339 662 220 10 083
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(CONTINUE)
--------------------------------------------------------------------------------
To the
owners
(EUR 1 000) of the Parent TOTAL
company
--------------------------------------------------------------------------------
EQUITY at Jan. 1, 2014 23 613 23 613
--------------------------------------------------------------------------------
Comprehensive profit (loss) for
the period
Profit (loss) for the period 2 361 2 361
Other comprehensive income
items:
Remeasurement of defined benefit - -
net liability
Exchange differences on 201 201
translating foreign operations
--------------------------------------------------------------------------------
Total comprehensive profit 2 562 2 562
(loss) for the period
--------------------------------------------------------------------------------
Transactions with owners
Share-options exercised 64 64
Equity-settled share-based
transactions 99 99
Dividends and repayment of -2 003 -2 003
equity
--------------------------------------------------------------------------------
Total transactions with owners -1 841 -1 841
--------------------------------------------------------------------------------
EQUITY at Dec. 31, 2014 24 334 24 334
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
--------------------------------------------------------------------------------
Share Invested Other Exchang Retaine
non-restri e d
cted
(EUR 1 000) capital equity reserve differe earning
reserve s nces s
--------------------------------------------------------------------------------
EQUITY at Jan. 1, 2013 8 010 6 498 364 103 9 245
(adjusted)
--------------------------------------------------------------------------------
Comprehensive profit (loss) for
the period
Profit (loss) for the period - - - - 1 196
Other comprehensive income
items:
Remeasurement of defined benefit - - - - 84
net liability
Exchange differences on - - - -83 -
translating foreign operations
--------------------------------------------------------------------------------
Total comprehensive profit 0 0 0 -83 1 280
(loss) for the period
--------------------------------------------------------------------------------
Transactions with owners
Share-options exercised
Equity-settled share-based - - 199 - -
transactions
Dividends and repayment of - - - - -2 002
equity
--------------------------------------------------------------------------------
Total transactions with owners 0 0 199 0 -2 002
--------------------------------------------------------------------------------
EQUITY at Dec. 31, 2013 8 010 6 498 563 20 8 522
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(CONTINUE)
--------------------------------------------------------------------------------
To the
owners
(1 000 EUR) of the Parent TOTAL
company
--------------------------------------------------------------------------------
EQUITY at Jan. 1, 2013 24 220 24 220
(adjusted)
--------------------------------------------------------------------------------
Comprehensive profit (loss) for
the period
Profit (loss) for the period 1 196 1 196
Other comprehensive income 84 84
items:
Remeasurement of defined benefit
net liability
Exchange differences on -83 -83
translating foreign operations
--------------------------------------------------------------------------------
Total comprehensive profit 1 196 1 196
(loss) for the period
--------------------------------------------------------------------------------
Transactions with owners
Share-options exercised
Equity-settled share-based 199 199
transactions
Dividends and repayment of -2 002 -2 002
equity
--------------------------------------------------------------------------------
Total transactions with owners -1 803 -1 803
--------------------------------------------------------------------------------
EQUITY at Dec. 31, 2013 23 613 23 613
--------------------------------------------------------------------------------
1. General information
Raute Group is a globally operating technology and service company. Raute's
customers are companies operating in the wood products industry that
manufacture veneer, plywood and LVL. Raute's technology offering covers
machinery and equipment for the entire production process. Raute's full-service
concept is based on product life-cycle management. In addition to a broad range
of machines and equipment, our solutions cover technology services ranging from
spare parts deliveries to regular maintenance and equipment modernizations.
Raute's head office is located in Nastola, Finland. Its other production plants
are in the Vancouver area in Canada, in the Shanghai area in China, and in
Kajaani, Finland. The company's sales network has a global reach.
Raute Group's Parent company, 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. The address of its
registered office is Rautetie 2, FI-15550 Nastola, and its postal address is
P.O. Box 69, FI-15551 Nastola.
Raute Corporation's consolidated financial statement information is 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 12, 2015 reviewed the
consolidated financial statements for January 1 - December 31, 2014, and
approved it to be published in compliance with this release.
2. Accounting principles
Raute Corporation's financial statements bulletin has been prepared in
accordance with standard IAS 34 Interim Financial Reporting. The financial
statements bulletin does not contain full notes and other information presented
in the financial statements. Raute Corporations's financial statements with
full notes will be published on February 12, 2015.
Raute Corporation's financial statements bulletin for January 1 - December 31,
2014 has been prepared in accordance with the International Financial Reporting
Standards, IFRS, accepted for application in the EU. Preparations have complied
with the IAS and IFRS standards, as well as SIC and IFRIC interpretations,
effective on December 31, 2014. The notes to the financial statements bulletin
also comply with Finnish accounting legislation.
The financial statements bulletin has been prepared according to the same
accounting principles as those applied in the Annual financial statement for
2013, with the exception of certain new or revised standards, interpretations
and amendments to existing standards applied as of January 1, 2014. The impact
of the new and revised standards has been presented in the Annual financial
statements for 2013. The adoption of these standards has not had an essential
impact on the financial statements bulletin.
All of the figures presented in the financial statements bulletin are in
thousand euro, unless otherwise stated. Due to the rounding of the figures in
the 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 bulletin in conformity with IFRS
standards requires management to make certain critical accounting estimates and
to exercise its judgment in applying the Group's accounting policies. Because
the forward-looking estimates and assumptions are based on management's best
knowledge at the reporting date, they comprise risks and uncertainties. The
actual results may differ from these 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. Segment reporting follows the principles of
presentation of the consolidated financial statements.
-----------------------------------------------------------------
31.12. 31.12.
Wood products technology 2014 2013
-----------------------------------------------------------------
Net sales 94 021 83 274
Operating profit 2 605 1 828
Assets 52 646 48 783
Liabilities 28 312 25 170
Capital expenditure 1 675 3 188
---------------------------------------------------------------------
Assets of the wood products technology 31.12. 31.12.
segment by geographical location 2014 % 2013 %
---------------------------------------------------------------------
Finland 41 532 79 40 492 83
North America 5 222 10 3 914 8
China 4 672 9 2 925 6
Russia 886 2 1 114 2
South America 192 0 198 0
Other 141 0 140 0
---------------------------------------------------------------------
TOTAL 52 646 100 48 783 100
---------------------------------------------------------------------
---------------------------------------------------------------------
Capital expenditure of the wood products 31.12. 31.12.
technology segment by geographical location 2014 % 2013 %
---------------------------------------------------------------------
Finland 1 402 84 2 324 73
China 139 8 837 26
North America 118 7 15 0
Russia 2 0 3 0
South America 3 0 1 0
Other 12 1 8 0
---------------------------------------------------------------------
TOTAL 1 675 100 3 188 100
---------------------------------------------------------------------
4. Net sales
The main part of the net sales is comprised of project deliveries related to
wood products technology and modernizations in technology services, which are
treated as long-term projects. The rest of the net sales is comprised of
technology services provided to the wood products industry such as spare parts
and maintenance services as well as individual machinery deliveries.
Project deliveries and modernizations related to technology services include
both product and service sales, making it impossible to give a reliable
presentation of the breakdown of the Group's net sales into purely product and
service sales.
Large project deliveries can temporarily increase the shares of various
customers of the Group's net sales to more than ten percent. At the end of the
period, the Group had two customers (2), whose customized share of the Group's
net sales exceeded 10 percent. The total share of these customers was 28
percent.
--------------------------------------------------------------------------------
1.1.-31 1.1.-31
.12. .12.
Net sales by market area 2014 % 2013 %
--------------------------------------------------------------------------------
EMEA (Europe and Africa) 48 737 52 33 697 40
CIS (Russia) 16 813 18 16 291 19
NAM (North America) 13 167 14 11 432 14
LAM (South America) 12 689 13 18 020 22
APAC (Asia-Pacific) 2 616 3 3 834 5
--------------------------------------------------------------------------------
TOTAL 94 021 100 83 274 100
--------------------------------------------------------------------------------
Finland accounted for 6 percent (6 %) of net sales.
--------------------------------------------------------------------------------
31.12. 31.12.
5. Long-term projects 2014 2013
--------------------------------------------------------------------------------
Net sales
Net sales by percentage of completion 74 413 66 214
Other net sales 19 608 17 060
--------------------------------------------------------------------------------
TOTAL 94 021 83 274
--------------------------------------------------------------------------------
Project revenues entered as income from currently
undelivered
long-term projects recognized by percentage of 71 178 86 534
completion
Amount of long-term project revenues not yet entered as income 42 001 27 770
(order book)
Projects for which the value by percentage of
completion exceeds
advance payments invoiced
- aggregate amount of costs incurred and recognized profits 51 832 65 872
less recognized losses
- advance payments received 33 709 53 619
--------------------------------------------------------------------------------Gross amount due from customers 18 123 12 253
--------------------------------------------------------------------------------
Projects for which advance payments invoiced exceed
the value by
percentage of completion
- aggregate amount of costs incurred and recognized profits 19 233 20 467
less recognized losses
- advance payments received 27 153 26 953
--------------------------------------------------------------------------------
Gross amount due to customers 7 920 6 486
--------------------------------------------------------------------------------
Advance payments included in the current liabilities in the
balance sheet
Gross amount due to customers 7 920 6 486
Other advance payments received, not under percentage of 1 152 613
completion
--------------------------------------------------------------------------------
Total 9 072 7 099
--------------------------------------------------------------------------------
Specification of combined asset and liability items
Advance payments paid 891 101
--------------------------------------------------------------------------------
Advance payments received included in inventories in the 891 101
balance sheet
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
31.12. 31.12.
6. Number of personnel, persons 2014 2013
--------------------------------------------------------------------------------
Effective, on average 530 515
In books, on average 545 522
In books, at the end of the period 587 534
- of which personnel working abroad 193 148
--------------------------------------------------------------------------------
31.12. 31.12.
7. Research and development costs 2014 2013
--------------------------------------------------------------------------------
Research and development costs for the period -1 767 -2 523
Amortization of previously capitalized development -239 -405
costs
Development costs recognized as an asset in the 292 615
balance sheet
--------------------------------------------------------------------------------
Research and development costs entered as expense for -1 714 -2 313
the period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
8. Changes in Intangible assets and in Property, 31.12. 31.12.
plant and equipment 2014 2013
--------------------------------------------------------------------------------
Intangible assets
Carrying amount at the beginning of the 13 372 14 019
period
Exchange rate differences 65 -10
Additions 497 1 552
Reclassification between items -109 -2 188
--------------------------------------------------------------------------------
Carrying amount at the end of the period 13 826 13 372
--------------------------------------------------------------------------------
Accumulated depreciation and amortization at the beginning of -9 799 -10 815
the period
Exchange rate differences -34 7
Accumulated depreciation and amortization of disposals and 129 1 791
reclassifications
Depreciation and amortization for the period -630 -782
--------------------------------------------------------------------------------
Accumulated depreciation and amortization at the end of the -10 334 -9 799
period
--------------------------------------------------------------------------------
Book value of Intangible assets, at the beginning of 3 574 3 204
the period
Book value of Intangible assets, at the end of the 3 492 3 574
period
Property, plant and equipment
Carrying amount at the beginning of the 42 670 41 673
period
Exchange rate differences 451 -947
Additions 1 178 1 634
Disposals -324 -44
Reclassification between items -31 354
--------------------------------------------------------------------------------
Carrying amount at the end of the period 43 944 42 670
--------------------------------------------------------------------------------
Accumulated depreciation and amortization at the beginning of -34 274 -33 782
the period
Exchange rate differences -356 857
Accumulated depreciation and amortization of disposals and 9 44
reclassifications
Depreciation and amortization for the period -1 394 -1 392
--------------------------------------------------------------------------------
Accumulated depreciation and amortization at the end of the -36 014 -34 274
period
--------------------------------------------------------------------------------
Book value of Property, plant and equipment, at the beginning 8 396 7 892
of the period
Book value of Property, plant and equipment, at the end of the 7 930 8 396
period
--------------------------------------------------------------------------------
31.12. 31.12.
9. Interest-bearing liabilities 2014 2013
--------------------------------------------------------------------------------
Non-current interest-bearing liabilities recognized at 1 250 2 500
amortized cost
Current interest-bearing liabilities 1 512 3 481
--------------------------------------------------------------------------------
TOTAL 2 762 5 981
--------------------------------------------------------------------------------
Maturities of the interest-bearing financial liabilities at
Dec. 31, 2014
Financial liability Curren Non-cur Total
t rent
--------------------------------------------------------------------------------
Loans from financial institutions 1 512 1 250 2 762
--------------------------------------------------------------------------------
Total 1 512 1 250 2 762
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
31.12. 31.12.
10. Pledged assets and contingent liabilities 2014 2013
--------------------------------------------------------------------------------
On behalf of the Parent company
Business mortgages 7 011 3 946
Loans from financial institutions 2 500 5 741
Business mortgages 2 500 5 750
Mortgage agreements on behalf of subsidiaries
Loans from financial institutions 262 240
Other obligations 227 64
Business mortgages 489 304
Commercial bank guarantees on behalf of the 13 999 1 484
Parent company and subsidiaries
Other own obligations
Rental liabilities maturing within one year 717 845
Rental liabilities maturing in one to five 1 674 2 398
years
Rental liabilities maturing later 13 185
Total 2 404 3 428
--------------------------------------------------------------------------------
11. Related party transactions
No loans has been granted to the company's management. On December 31, 2014, the
Parent Company Raute Corporation
had no loan receivables from its
subsidiaries.
No pledges have been given or other commitments made on behalf of the company's
management and shareholders.
--------------------------------------------------------------------------------
31.12. 31.12.
12. Derivatives 2014 2013
--------------------------------------------------------------------------------
Nominal values of forward contracts in
foreign currency
Economic hedging
- Related to financing 348 1 311
- Related to the hedging of net sales 2 785 2 967
Fair values of forward contracts in foreign currency
Economic hedging
- Related to financing -7 -3
- Related to the hedging of net sales -136 24
Interest rate and currency swap agreements
- Nominal value - 1 991
- Fair value - -42
13. Share-based payments
An expense of EUR 99 thousand (EUR 199 thousand) was recognized for the options
to the income statement during the reporting period. During the period a total
of 10 thousand series A shares were subscribed for under the stock options
rights. The share capital of Raute Corporation, as a result of the share
subscription made with stock options, increased EUR 21 thousand.
14. Financial assets and liabilities that are measured at fair value
At the end of the reporting period December 31, 2014, the fair value of the
financial assets categorized at fair value on hierarchy level 3 was EUR 500
thousand. The methods of fair value determination correspond the valuation
principles presented in the Annual financial statements for 2013. There were no
transfers between the hierarchy levels 1 and 2 during the reporting period.
15. Exchange rates used
-------------------------------------------------
1.1.-31.12. 1.1.-31.12.
Income statement, euros 2014 2013
-------------------------------------------------
CNY (Chinese juan) 8,1883 8,1655
RUB (Russian rouble) 51,0113 42,3248
CAD (Canadian dollar) 1,4669 1,3685
USD (US dollar) 1,3288 1,3282
SGD (Singapore dollar) 1,6831 1,6618
CLP (Chilean peso) 756,9608 658,1306
-------------------------------------------------
31.12. 31.12.
Balance sheet, euros 2014 2013
-------------------------------------------------
CNY (Chinese juan) 7,6330 8,3248
RUB (Russian rouble) 72,3370 45,3246
CAD (Canadian dollar) 1,4063 1,4671
USD (US dollar) 1,2141 1,3791
SGD (Singapore dollar) 1,6058 1,7414
CLP (Chilean peso) 756,4665 725,0943
16. The Board of Directors' proposal for dividend distribution and measures
concerning the result of 2014
The Board of Directors' will propose to Raute Corporation's Annual General
Meeting, to be held on March 24, 2015 that a dividend of EUR 0.40 per share be
paid for the financial year 2014, and that the remainder of distributable funds
be transferred to equity. At the date of the proposal for profit distribution,
there are a total of 4,015,228 shares entitled for the dividend, i.e. the total
amount of dividends would be EUR 1 606 thousand.
The Board of Directors will propose to the Annual General Meeting that the
Annual General Meeting would resolve to distribute EUR 0.20 per share from the
invested non-restricted equity reserve as repayment of equity.
--------------------------------------------------------------------------------
FINANCIAL DEVELOPMENT 31.12. 31.12.
2014 2013
--------------------------------------------------------------------------------
Change in net sales, % 12,9 -17,8
Exported portion of net sales, % 94,3 94,2
Return on investment (ROI), % 10,9 7,3
Return on equity, ROE, % 9,8 5,0
Interest-bearing net liabilities, EUR million -1,7 -6,7
Gearing, % -6,9 -28,3
Equity ratio, % 55,8 56,6
Gross capital expenditure, EUR million 1,7 3,2
% of net sales 1,8 3,8
Research and development costs, EUR million 1,8 2,5
% of net sales 1,9 3,0
Order book, EUR million 44 28
Order intake, EUR million 112 63
--------------------------------------------------------------------------------
SHARE-RELATED DATA 31.12. 31.12.
2014 2013
--------------------------------------------------------------------------------
Earnings per share, (EPS), undiluted, EUR 0,59 0,30
Earnings per share, (EPS), diluted, EUR 0,59 0,30
Equity to share, EUR 6,06 5,91
Dividend per share, EUR 0,40* 0,20
Dividend per profit, % 68,0* 66,7
Effective dividend return, % 5,5* 2,9
Repayment of equity from invested non-restricted equity 0,20* 0,30
reserve, EUR
*The Board of Directors' proposal to the Annual General
Meeting.
Development in share price (series A shares)
Lowest share price for the period, EUR 6,90 6,88
Highest share price for the period, EUR 8,60 9,33
Average share price for the period, EUR 7,69 8,49
Share price at the end of the period, EUR 7,30 6,95
Market value of capital stock
- Series K shares, EUR million* 7,2 6,9
- Series A shares, EUR million 22,1 20,9
--------------------------------------------------------------------------------
Total, EUR million 29,3 27,8
--------------------------------------------------------------------------------
*Series K shares valued at the value of series A shares.
Trading of the company's shares (series A shares)
Trading of shares, pcs 593 682 513 699
Trading of shares, EUR million 4,6 4,4
Number of shares
- Series K shares, ordinary shares (20 votes, share) 991 161 991 161
- Series A shares (1 vote/share) 3 024 067 3 013 597
--------------------------------------------------------------------------------
Total 4 015 228 4 004 758
--------------------------------------------------------------------------------
Number of shares, weighted average, 1 000 pcs 4 010 4 005
Number of shares, diluted, 1 000 pcs 4 017 4 013
Number of shareholders at Dec. 31 1 991 1 915
--------------------------------------------------------------------------------
DEVELOPMENT OF Q 1 Q 2 Q 3 Q 4 Rolling Rolling
QUARTERLY 2014 2014 2014 2014 1.1.2014 1.1.2013
RESULTS
(EUR 1 000) - -
31.12.2014 31.12.2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET SALES 15 020 20 329 24 693 33 978 94 021 83 274
--------------------------------------------------------------------------------
Change in
inventories of
finished goods
and
work in progress 69 263 631 710 1 672 -954
Other operating 25 7 67 -28 72 295
income
Materials and -7 197 -10 154 -14 850 -19 574 -51 775 -40 711
services
Employee -7 164 -7 000 -7 117 -8 023 -29 304 -27 417
benefits
expense
Depreciation and -465 -476 -554 -524 -2 018 -2 174
amortization
Other operating -2 209 -2 338 -2 562 -2 953 -10 062 -10 485
expenses
--------------------------------------------------------------------------------
Total operating -17 035 -19 967 -25 083 -31 075 -93 160 -80 787
expenses
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPERATING PROFIT -1 920 632 308 3 585 2 605 1 828
(LOSS)
--------------------------------------------------------------------------------
% of net sales -13 3 1 11 3 2
Financial income 205 65 92 244 605 735
Financial -213 -58 -128 -2 -400 -974
expenses
--------------------------------------------------------------------------------
PROFIT (LOSS) -1 928 639 273 3 826 2 810 1 589
BEFORE TAX
--------------------------------------------------------------------------------
% of net sales -13 3 1 11 3 2
Income taxes 345 -139 -22 -633 -449 -394
--------------------------------------------------------------------------------
PROFIT (LOSS) -1 583 500 251 3 193 2 361 1 196
FOR THE PERIOD
--------------------------------------------------------------------------------
% of net sales -11 2 1 9 3 1
Attributable to
Equity holders -1 583 500 251 3 193 2 361 1 196
of the Parent
company
Earnings per
share, EUR
Undiluted -0,40 0,12 0,06 0,80 0,59 0,30
earnings per
share
Diluted earnings -0,40 0,12 0,06 0,80 0,59 0,30
per share
Shares, 1 000
pcs
Adjusted average 4 005 4 007 4 007 4 015 4 010 4 005
number of
shares
Adjusted average
number of
shares
diluted 4 008 4 008 4 008 4 017 4 011 4 013
--------------------------------------------------------------------------------
FINANCIAL Q 1 Q 2 Q 3 Q 4 Rolling Rolling
DEVELOPMENT
QUARTERLY
2014 2014 2014 2014 1.1.2014 1.1.2013
- -
31.12.2014 31.12.2013
--------------------------------------------------------------------------------
Order intake 16 51 22 23 112 63
during the
period, EUR
million
Order book at 28 59 56 44 44 28
the end of the
period, EUR
million
--------------------------------------------------------------------------------
20 LARGEST Number Number of Total % of Total % of
SHAREHOLDERS AT of number total number voting
DEC. 31, 2014
By number of series series A of shares shares of votes rights
shares K shares
shares
--------------------------------------------------------------------------------
1. Sundholm - 624 398 624 398 15,6 624 398 2,7
Göran Wilhelm
2. Mandatum Life - 181 900 181 900 4,5 181 900 0,8
Unit-Linked
3. Laakkonen - 119 919 119 919 3,0 119 919 0,5
Mikko
4. Suominen 48 000 62 429 110 429 2,8 1 022 429 4,5
Pekka
5. Suominen 48 000 62 316 110 316 2,7 1 022 316 4,5
Tiina
Sini-Maria
6. Siivonen Osku 50 640 53 539 104 179 2,6 1 066 339 4,7
Pekka
7. Kirmo Kaisa 55 680 48 341 104 021 2,6 1 161 941 5,1
Marketta
8. Mustakallio 57 580 29 270 86 850 2,2 1 180 870 5,2
Mika Tapani
9. Relander - 85 000 85 000 2,1 85 000 0,4
Harald
10. Keskiaho 33 600 51 116 84 716 2,1 723 116 3,2
Kaija Leena
11. Särkijärvi 60 480 22 009 82 489 2,1 1 231 609 5,4
Riitta
12. Mustakallio 60 480 500 60 980 1,5 1 210 100 5,3
Kari Pauli
13. Mustakallio 43 240 16 047 59 287 1,5 880 847 3,9
Marja Helena
14. Särkijärvi 12 000 43 256 55 256 1,4 283 256 1,2
Timo
15. 12 000 43 256 55 256 1,4 283 256 1,2
Särkijärvi-Mart
inez Anu Riitta
16. Mustakallio 53 240 - 53 240 1,3 1 064 800 4,7
Ulla Sinikka
17. Suominen 24 960 27 964 52 924 1,3 527 164 2,3
Jukka Matias
18. Keskinäinen - 51 950 51 950 1,3 51 950 0,2
työeläkevakuutu
syhtiö Varma
19. Suominen 48 000 - 48 000 1,2 960 000 4,2
Jussi
20. Keskiaho 24 780 21 500 46 280 1,2 517 100 2,3
Marjaana
--------------------------------------------------------------------------------
Total 632 680 1 544 710 2 177 390 54,2 14 198 310 62,1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number Number of Total % of Total % of
of number total number voting
By number of series series A of shares shares of votes rights
votes K shares
shares
--------------------------------------------------------------------------------
1. Särkijärvi 60 480 22 009 82 489 2,1 1 231 609 5,4
Riitta
2. Mustakallio 60 480 500 60 980 1,5 1 210 100 5,3
Kari Pauli
3. Mustakallio 57 580 29 270 86 850 2,2 1 180 870 5,2
Mika Tapani
4. Kirmo Kaisa 55 680 48 341 104 021 2,6 1 161 941 5,1
Marketta
5. Siivonen Osku 50 640 53 539 104 179 2,6 1 066 339 4,7
Pekka
6. Mustakallio 53 240 - 53 240 1,3 1 064 800 4,7
Ulla Sinikka
7. Suominen 48 000 62 429 110 429 2,8 1 022 429 4,5
Pekka
8. Suominen 48 000 62 316 110 316 2,7 1 022 316 4,5
Tiina
Sini-Maria
9. Suominen 48 000 - 48 000 1,2 960 000 4,2
Jussi
10. Mustakallio 43 240 16 047 59 287 1,5 880 847 3,9
Kai Henrik
kuolinpesä
11. Mustakallio 42 240 - 42 240 1,1 844 800 3,7
Marja Helena
12. Mustakallio 33 600 51 116 84 716 2,1 723 116 3,2
Risto Knut
kuolinpesä
13. Keskiaho - 624 398 624 398 15,6 624 398 2,7
Kaija Leena
14. Sundholm 29 680 - 29 680 0,7 593 600 2,6
Göran Wilhelm
15. Keskiaho 27 880 6 991 34 871 0,9 564 591 2,5
Vesa Heikki
16. Keskiaho 27 645 9 621 37 266 0,9 562 521 2,5
Juha-Pekka
17. Kirmo Lasse 24 960 27 964 52 924 1,3 527 164 2,3
18. Suominen 24 780 21 500 46 280 1,2 517 100 2,3
Jukka Matias
19. Keskiaho 22 405 8 031 30 436 0,8 456 131 2,0
Marjaana
20. Kultanen 20 160 - 20 160 0,5 403 200 1,8
Leea Annikka
--------------------------------------------------------------------------------
Total 778 690 1 044 072 1 822 762 45,4 16 617 872 72,7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MANAGEMENTS' AND PUBLIC INSIDERS' SHAREHOLDING AND
NOMINEE-REGISTERED SHARES
Number Number Total % of Total % of
of of number total number of total
series K series A of shares votes voting
shares shares shares rights
--------------------------------------------------------------------------------
Management's and Public
insiders' holding at Dec. 31,
2014
The Board of 122 830 111 849 234 679 5,8 2 568 449 11,2
Directors, The
Group's President and
CEO and Executive
Board*
--------------------------------------------------------------------------------
Total 122 830 111 849 234 679 5,8 2 568 449 11,2
--------------------------------------------------------------------------------
*The figures include
the holdings of their
own, minor children
and control entities.
--------------------------------------------------------------------------------
Nominee-registered - 125 504 125 504 3,1 125 504 0,5
shares at Dec. 31,
2014
--------------------------------------------------------------------------------
RAUTE CORPORATION
Board of Directors
PRESS CONFERENCE ON FEBRUARY 12, 2015 AT 2 P.M.:
A briefing will be organized for analysts, investors and the media on February
12, 2015 at 2 p.m. at Scandic Simonkenttä Hotel, Roba cabinet, Simonkatu 9,
Helsinki. The financial statements will be presented by Mr. Tapani Kiiski,
President and CEO, and Ms. Arja Hakala, CFO.
FINANCIAL RELEASES IN 2015:
Raute's interim reports will be published as follows:
- January-March on Friday, April 24, 2015
- January-June on Tuesday, July 28, 2015
- January-September on Friday, October 30, 2015
Raute Corporation's consolidated financial statements will be published on
February 12, 2015. Raute Corporation's Annual Report 2014 will be published
during week 9.
Raute Corporation's Annual General Meeting will be held in Lahti, at Sibelius
Hall on Tuesday, March 24, 2015 at 6:00 p.m.
FURTHER INFORMATION:
Mr. Tapani Kiiski, President and CEO, Raute Corporation, mobile phone +358 400
814 148
Ms. Arja Hakala, CFO, Raute Corporation, mobile phone +358 400 710 387
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd, main media, www.raute.com
RAUTE IN BRIEF:
Raute is a technology and service company that operates worldwide. Raute's
customers are companies operating in the wood products industry that
manufacture veneer, plywood and LVL (Laminated Veneer Lumber). The technology
offering covers machinery and equipment for the entire production process. As a
supplier of mill-scale projects, Raute is a global market leader both in the
plywood and LVL industries. Additionally, Raute's full-service concept includes
technology services ranging from spare parts deliveries to regular maintenance
and equipment modernizations. Raute's head office is located in Nastola,
Finland. Its other production plants are in the Vancouver area of Canada, in
the Shanghai area of China, and in Kajaani, Finland. Raute's net sales in 2014
were EUR 94.0 million. The Group's headcount at the end of 2014 was 587.
More information about the company can be found at www.raute.com.
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