2008-10-28 08:00:00 CET
2008-10-28 08:00:02 CET
REGULATED INFORMATION
Raute - Interim report (Q1 and Q3)
RAUTE CORPORATION - CONSOLIDATED FINANCIAL STATEMENTS JANUARY 1 - SEPTEMBER 30, 2008
RAUTE OYJ STOCK EXCHANGE RELEASE 28 October 2008 at 09.00 am RAUTE CORPORATION - CONSOLIDATED FINANCIAL STATEMENTS JANUARY 1 - SEPTEMBER 30, 2008 - Net sales for the reporting period totaled EUR 79.8 million (MEUR 85.1), down 6 percent on the comparison period. - Operating profit was EUR 6.1 million (MEUR 6.2) and profit before tax EUR 6.6 million (MEUR 6.5). - Earnings per share were EUR 1.14 (EUR 1.24). - Order intake amounted to EUR 58 million (MEUR 48). The order book at the end of the reporting period stood at EUR 32 million (MEUR 44). - The net sales and operating profit for 2008 are expected to remain below the previous year's level. MR. TAPANI KIISKI, PRESIDENT AND CEO: WEAKER MARKET OUTLOOK The good profitability development during the first half of the year continued in the third quarter thanks to our good order book and successful operations. We have a period of strong positive development behind us, but our outlook has rapidly become more uncertain due the recent financial crisis. The outlook for our most important customer industries, the plywood and LVL industries, has weakened considerably during the summer and fall period, also outside North America. This weakening is attributable to the slowing down of the construction and transportation vehicle industries, which use plywood and LVL. As the financial crisis has made it more difficult to receive financing and the rate of interest has increased, the willingness and ability of Raute's customers to make investments has clearly weakened during the past months. This development has also lowered Raute's order intake to a low level, and our order book has become alarmingly thinner during the early fall. For both the plywood and LVL industries, the demand for wood products technology covers three types of projects. Relatively small projects with a short payback time are being planned in normal or even in higher than normal numbers. Through these projects, the customers aim to achieve savings in raw material, energy, glue and labor costs. Established operators are also planning projects to strengthen their competitiveness and ability to deliver as soon as the demand returns to its normal level. In addition, some projects triggered by the wood export duties are being planned in Russia by both Russian and external operators. In this market situation, the last part of the year and the coming year will be challenging. We are now working towards strengthening the order book and are also preparing for adapting our operations to meet the demand. Also in this market situation our aim is to reach a positive operating profit also in the last quarter. In August we celebrated the company's 100-year journey in a main event with our various stakeholders. The speeches strongly highlighted the solid foundation of Raute's success and its will to build for the future. I would like to extend my warmest thanks to all who remembered Raute on our anniversary. MARKET SITUATION Market situation in customer industries The market situation for the plywood industry has weakened considerably since the summer in all market areas. Among the most important market areas, demand has remained at a moderate level in Russia and for some types of plywood also in Europe, Asia and North America, for example. The weaker demand for plywood used in the construction and transportation vehicle industries is a result of the global economic uncertainty that began in the USA and expanded to reach global proportions during the third quarter and the more difficult financing of investments. The plywood mills have adapted their production volume to correspond with the lower demand. However, according to publicly available statistics, the prices for plywood have remained at a normal level. The market situation for LVL (Laminated Veneer Lumber) is difficult due to the low level of activity in the construction industry. The production capacity of several LVL mills is underutilized, but the prices for LVL have remained at a normal level. Demand for wood products technology and technology services The weaker market situation has affected the investment decisions and maintenance needs in the plywood and LVL industries and reduced the demand for wood products technology and services. The recently increased uncertainty in the financial markets has made it more difficult for some customers to receive financing for their planned projects and has postponed the launch of the projects. The demand for technology services has remained at a good level for modernizations. However, the low capacity utilization rates due to the customers' market situation have reduced the demand for spare parts and maintenance services in all market areas. Order intake and order book Raute's business consists of project deliveries and technology services to the wood products industry. Project deliveries encompass complete mills, production lines, and individual machines and equipment units. Technology services include maintenance, spare parts services, modernizations, consulting, training, and sales of reconditioned machinery. The order intake amounted to EUR 58 million (MEUR 48) during the reporting period. The low volume of order intake was attributable to the postponement of projects in the negotiation phase. The postponements are evaluated to result from the lower demand for plywood and LVL, more difficult financing of investments and schedule changes typical of project business. New orders for project deliveries stood at EUR 40 million (MEUR 26), of which Europe accounted for 55 percent, Russia for 36 percent, North America for 4 percent and other market areas for 5 percent. The order intake for technology services stood at EUR 18 million (MEUR 22). The order intake in the third quarter amounted to EUR 9 million (MEUR 22). The order book declined by EUR 18 million during the third quarter, and stood at EUR 32 million (MEUR 44) at the end of the period. Competitive position There have been no essential changes in Raute's competitive position during the reporting period. Customers appreciate comprehensive competence and strong technology development in their strategic investments aimed at ensuring their ability to deliver and provide service. The competitive advantages provided by Raute's technology play an important role when customers select their suppliers. NET SALES AND RESULT Net sales for the reporting period totaled EUR 79.8 million (MEUR 85.1), down 6 percent on the comparison period. The decline in net sales was due to the scheduling of new project orders received and the low order intake during the first part of the year. Europe's share of net sales rose to 47 percent (26%), whereas Russia's share of net sales fell to 36 percent (38%). North America's share was 10 percent (24%) and the share of other market areas 7 percent (12%). Technology services accounted for 24 percent (25%) of net sales for the reporting period. The Group's operating profit was EUR 6.1 million (MEUR 6.2) and accounted for 7.7 percent (7.2%) of net sales. The higher profit margin resulted from the favorable order book in terms of product and geographical distribution as well as the successful cost management of projects compared to the comparison period. The result includes EUR 0.5 million in one-time costs relating to the adaptation to the continuing weak market situation in North America. Profit before tax for the reporting period was EUR 6.6 million (MEUR 6.5) and profit EUR 4.5 million (MEUR 5.0). Earnings per share were EUR 1.14 (EUR 1.24). There were no dilutive items. Third-quarter net sales were EUR 25.2 million (MEUR 26.5). Operating profit was EUR 2.2 million (MEUR 2.4) and accounted for 8.8 percent (9.2%) of net sales. Profit in the third quarter amounted to EUR 1.6 million (MEUR 1.8), and earnings per share were EUR 0.40 (EUR 0.46). FINANCING The Group's financial position is strong. At the end of the reporting period, gearing was -53.1 percent (-12.8%) and the equity ratio 67.4 percent (68.3%). The balance sheet total at the end of the reporting period was EUR 59.7 million (MEUR 54.1). The fluctuation in balance sheet items and the key figures based on them is a result of differences in the timing of customer payments and the cost accumulation from project deliveries, which is typical of project business. Liquid assets stood at EUR 18.7 million (MEUR 4.6), and the rise on the comparison year was mainly due to lower trade receivables. Operating cash flow was EUR 13.7 million (MEUR -16.6). Cash flow from investing activities totaled EUR -2.3 million (MEUR -1.1). Cash flow from financing activities totaled EUR -4.0 million (MEUR -1.7). Interest-bearing liabilities amounted to EUR 0.5 million (MEUR 0.6) at the end of the reporting period. Raute Corporation has a EUR 10 million commercial paper program. The company has renewed its financing limits during the summer and agreed on bilateral long-term credit arrangements with Nordea Bank Finland plc, Pohjola Bank plc and Svenska Handelsbanken AB. The commercial paper program and the credit limits have not been in use during the reporting period. RESEARCH AND DEVELOPMENT COSTS AND CAPITAL EXPENDITURES Research and development costs totaled EUR 3.9 million (MEUR 3.1), representing 4.9 percent (3.7%) of net sales. Investments totaled EUR 2.2 million (MEUR 1.1) and were mainly focused on the development of production in the Nastola and Shanghai units and on product development. PERSONNEL The Group's headcount at the end of the reporting period was 584 (572). The number of personnel increased in the units in China and Finland and was reduced by the adaptation measures implemented in North America. Group companies outside Finland accounted for 24 percent (25%) of employees. Converted to full-time employees, the average number was 564 (570). ORGANISATION Mr. Pasi Kenola, President of Mecano Group Oy, which is a wholly-owned subsidiary of Raute based in Kajaani and focusing on machine vision and analyzing applications, resigned on July 29, 2008. Ms. Arja Hakala, CFO, Raute Corporation, was appointed as the new President for the period July 30-December 31, 2008. OTHER EVENTS DURING THE REPORTING PERIOD In order to adapt to the drastically weakened market situation in North America, restructuring measures were taken in Raute's North American companies in April. The aim of the measures is to keep business operations in North America profitable also in a weak market situation. A total of EUR 0.5 million of one-time costs relating to the restructuring was recorded in the result for the first quarter. The registration process for Raute Corporation's representative office in Moscow was completed at the end of June, and the office started its operations during the third quarter. Through the local office Raute will further strengthen its presence in the significant Russian market. A process of merging Mecano Group Oy with Raute Corporation is underway in the Group, and the companies have made a decision on the implementation of the merger. The aim of the merger is to clarify the Group structure and improve the efficiency of operations. The merger will have no impact on Mecano's product offering, customer service or personnel. The planned date of merger is December 31, 2008. EVENTS AFTER THE REPORTING PERIOD A decision has been made to start preparations for adaptation measures in the Group's Finnish companies due to the reduced order book and weakening market and demand situation. These measures are expected to concern the Group's entire personnel in Finland. CORPORATE GOVERNANCE Raute Corporation's Annual General Meeting was held on April 2, 2008. It adopted the financial statements for 2007, granted discharge from liability to those accountable and decided to distribute a dividend of 1.00 euro per share. The Annual General Meeting on April 2, 2008 elected the company's Board of Directors for a term that expires at the end of the Annual General Meeting of 2009. Mr. Jarmo Rytilahti was elected Chairman of the Board, Ms. Sinikka Mustakallio Vice-Chairman and Mr. Ilpo Helander, Mr. Mika Mustakallio, Mr. Panu Mustakallio and Mr. Jorma Wiitakorpi as Board members. All of the Board members are independent of the company. Chairman Jarmo Rytilahti and two of the members (Ilpo Helander and Jorma Wiitakorpi) are independent of major shareholders. Mr. Jarmo Rytilahti continues as Chairman of the Appointment Committee, and Ms. Sinikka Mustakallio and Mr. Ville Korhonen - a representative of major shareholders - act as its members. The Working Committee continues to be chaired by Mr. Jarmo Rytilahti and its members are Ms. Sinikka Mustakallio and Mr. Jorma Wiitakorpi. In the Annual General Meeting, Authorized Public Accountants Anna-Maija Simola and Antti Unkuri were elected as auditors, and Ernst&Young Oy, an authorized public accounting company, as deputy auditor. The Annual General Meeting authorized the Board of Directors to decide on the repurchase of a maximum of 400,000 Raute Corporation series A shares with the company's distributable assets. The Annual General Meeting authorized the Board of Directors to decide on the directed issue of a maximum of 400,000 of the company's series A shares. DIVIDEND FOR THE YEAR 2007 The Annual General Meeting decided to distribute a dividend of EUR 1.00 per share for 2007. The total amount of dividends is EUR 4.0 million, series A shares accounting for EUR 3,013,597.00 (EUR 2,109,517.90) and series K shares for EUR 991,161.00 (EUR 693,812.70). The dividend payment date was April 14, 2008. SHARES The number of Raute Corporation's shares at the end of the reporting period totaled 4,004,758, of which 991,161 were series K shares (ordinary share, 20 votes/share) and 3,013,597 series A shares (1 vote/share). The shares have a nominal value of two euros. Series K shares can be converted to series A shares under the terms described in section 3 of the Articles of Association. If a series K share is transferred to a new owner who does not previously hold series K shares, other shareholders of the K series have the right to redeem the share under the terms described in section 4 of the Articles of Association. Raute Corporation's series A shares are listed on NASDAQ OMX Helsinki Ltd. The trading code is RUTAV. Raute Corporation has signed a market making agreement with Nordea Bank Finland plc in compliance with the Liquidity Providing (LP) requirements issued by the NASDAQ OMX Helsinki Ltd. The company's market capitalization at the end of the reporting period was EUR 46.0 million (MEUR 52.9), with series K shares valued at the closing price of series A shares on September 30, 2008, which was EUR 11.49 (EUR 13.20). The company's Board of Directors has been authorized by the Annual General Meeting to decide on the buyback and directed issue of a maximum of 400,000 of the company's series A shares. The Board of Directors has not exercised this authorization. Other share-related information is presented in the figures section of this report. SHAREHOLDERS The number of shareholders totaled 1,312 at the beginning of the year and 1,465 at the end of the reporting period. Series K shares are held by 46 private individuals (46). The management held 4.7 percent (4.7%) of company shares and 9.1 percent (9.1%) of votes. Nominee-registered shares accounted for 2.9 percent (2.8%) of shares. The company did not possess company shares during the reporting period or hold them as security. No flagging notifications were given to the company in the reporting period. SEASONAL FLUCTUATION IN BUSINESS The Group's net sales and working capital fluctuate every quarter due to different types of project deliveries and their schedules. Business does not involve systematic seasonal changes, with the exception of technology services delivered to Finland, many of which take place during service shutdowns in the summer. CHANGES IN BUSINESS RISKS The uncertainty in the development of the global economy will increase near-future risks, and it is difficult to predict all of its implications. However, the financial crisis, which has expanded to global proportions, will make business financing more difficult and increase financing costs which will affect investment demand and weaken the company's market outlook for the short term and affect the company's counterparty risk. The company has no interest-bearing bank credits and is thus not subject to interest rate risk. Raute's liquid assets are in Finnish and Swedish banks. During the reporting period, there have been no essential changes in the other business risks described in the Board of Directors' report and financial statements for 2007. OUTLOOK FOR 2008 The market situation and investment activity of Raute's clientele have weakened due to the weakening of the global economic situation and the financial market crisis. Mill-scale projects are, however, in the quotation and negotiation phase in different market areas. Raute's net sales for 2008 are expected to remain below the previous year's level. This is due to the postponement of decision making for projects in the negotiation phase from the earlier estimation. The operating profit for 2008 is expected to remain below the previous year's level due to the lower than estimated level of net sales in the last quarter. TABLES OF CONSOLIDATED FINANCIAL STATEMENTS AND NOTES -------------------------------------------------------------------------------- | CONSOLIDATED INCOME STATEMENT | | | | | | -------------------------------------------------------------------------------- | (EUR 1 000) | Note | 1.7.- | 1.7.- | 1.1.- | 1.1.- | 1.1.- | -------------------------------------------------------------------------------- | | | 30.9. | 30.9. | 30.9. | 30.9. | 31.12. | -------------------------------------------------------------------------------- | | | 2008 | 2007 | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | 2,3,4 | 25 227 | 26 466 | 79 847 | 85 116 | 110 799 | -------------------------------------------------------------------------------- | Other operating | | | | | | | -------------------------------------------------------------------------------- | income | | 29 | 17 | 82 | 75 | 461 | -------------------------------------------------------------------------------- | Increase (+) or | | | | | | | -------------------------------------------------------------------------------- | decrease (-) in | | | | | | | -------------------------------------------------------------------------------- | inventories of | | | | | | | -------------------------------------------------------------------------------- | finished goods and | | | | | | | -------------------------------------------------------------------------------- | work in progress | | -65 | 103 | 512 | 295 | 42 | -------------------------------------------------------------------------------- | Materials and | | | | | | | -------------------------------------------------------------------------------- | services | | 13 735 | 14 653 | 42 688 | 49 089 | 60 999 | -------------------------------------------------------------------------------- | Expenses from | | | | | | | -------------------------------------------------------------------------------- | employee benefits | 9 | 6 541 | 6 397 | 21 530 | 20 772 | 28 875 | -------------------------------------------------------------------------------- | Depreciation, | | | | | | | -------------------------------------------------------------------------------- | amortization and | | | | | | | -------------------------------------------------------------------------------- | impairment charges | | 699 | 684 | 2 060 | 2 000 | 2 654 | -------------------------------------------------------------------------------- | Other operating | | | | | | | -------------------------------------------------------------------------------- | expenses | | 1 988 | 2 412 | 8 028 | 7 457 | 10 166 | -------------------------------------------------------------------------------- | Total operating | | | | | | | -------------------------------------------------------------------------------- | expenses | 7 | 22 962 | 24 146 | 74 306 | 79 319 | 102 695 | -------------------------------------------------------------------------------- | OPERATING PROFIT | | 2 228 | 2 440 | 6 135 | 6 166 | 8 607 | -------------------------------------------------------------------------------- | % of net sales | | 9 | 9 | 8 | 7 | 8 | -------------------------------------------------------------------------------- | Financial income | | 75 | -1 | 718 | 501 | 660 | -------------------------------------------------------------------------------- | Financial expenses | | 26 | -57 | -281 | -162 | -291 | -------------------------------------------------------------------------------- | PROFIT BEFORE TAX | | 2 329 | 2 382 | 6 571 | 6 506 | 8 976 | -------------------------------------------------------------------------------- | % of net sales | | 9 | 9 | 8 | 8 | 8 | -------------------------------------------------------------------------------- | Income taxes | 6 | -733 | -536 | -2 025 | -1 531 | -2 375 | -------------------------------------------------------------------------------- | PROFIT FOR THE PERIOD | | 1 597 | 1 845 | 4 546 | 4 974 | 6 601 | -------------------------------------------------------------------------------- | % of net sales | | 6 | 7 | 6 | 6 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to | | | | | | | -------------------------------------------------------------------------------- | Equity holders of the | | | | | | | -------------------------------------------------------------------------------- | Parent company | | 1 597 | 1 845 | 4 546 | 4 974 | 6 601 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, | | | | | | | -------------------------------------------------------------------------------- | EUR | | | | | | | -------------------------------------------------------------------------------- | Undiluted earnings | | 0,40 | 0,46 | 1,14 | 1,24 | 1,65 | -------------------------------------------------------------------------------- | per share | | | | | | | -------------------------------------------------------------------------------- | Diluted earnings | | 0,40 | 0,46 | 1,14 | 1,24 | 1,65 | -------------------------------------------------------------------------------- | per share | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shares, 1 000 pcs | | | | | | | -------------------------------------------------------------------------------- | Adjusted average | | | | | | | -------------------------------------------------------------------------------- | number of shares | | 4 005 | 4 005 | 4 005 | 4 005 | 4 005 | -------------------------------------------------------------------------------- | Adjusted average | | | | | | | -------------------------------------------------------------------------------- | number of shares | | | | | | | -------------------------------------------------------------------------------- | diluted | | 4 005 | 4 005 | 4 005 | 4 005 | 4 005 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | | | | | -------------------------------------------------------------------------------- | (1 000 EUR) | Note | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | | -------------------------------------------------------------------------------- | Intangible assets | | 3 161 | 2 716 | 2 546 | -------------------------------------------------------------------------------- | Tangible assets | | 10 877 | 11 901 | 10 993 | -------------------------------------------------------------------------------- | Available-for-sale | | | | | -------------------------------------------------------------------------------- | investments | | 499 | 395 | 449 | -------------------------------------------------------------------------------- | Deferred tax assets | | 460 | 348 | 275 | -------------------------------------------------------------------------------- | Total | | 14 997 | 15 360 | 14 263 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | | -------------------------------------------------------------------------------- | Inventories | | 5 057 | 5 411 | 4 515 | -------------------------------------------------------------------------------- | Accounts receivables and | | | | | -------------------------------------------------------------------------------- | other receivables | 4 | 20 936 | 28 756 | 24 739 | -------------------------------------------------------------------------------- | Financial assets at | | | | | -------------------------------------------------------------------------------- | fair value through | | | | | -------------------------------------------------------------------------------- | profit or loss | | 2 100 | 2 653 | 2 144 | -------------------------------------------------------------------------------- | Cash and cash equivalents | | 16 588 | 1 926 | 9 140 | -------------------------------------------------------------------------------- | Total | | 44 682 | 38 746 | 40 537 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 2 | 59 678 | 54 107 | 54 800 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND | | | | | -------------------------------------------------------------------------------- | LIABILITIES | | | | | -------------------------------------------------------------------------------- | Shareholders' equity | | | | | -------------------------------------------------------------------------------- | Share capital | | 8 010 | 8 010 | 8 010 | -------------------------------------------------------------------------------- | Share premium | | 6 498 | 6 498 | 6 498 | -------------------------------------------------------------------------------- | Other funds | 9 | 171 | 218 | 161 | -------------------------------------------------------------------------------- | Retained earnings | | 15 097 | 11 824 | 11 924 | -------------------------------------------------------------------------------- | Net profit for period | | 4 546 | 4 974 | 6 601 | -------------------------------------------------------------------------------- | Share of shareholders' | | | | | -------------------------------------------------------------------------------- | equity that belongs | | | | | -------------------------------------------------------------------------------- | to the owners of | | | | | -------------------------------------------------------------------------------- | the Parent company | | 34 322 | 31 524 | 33 194 | -------------------------------------------------------------------------------- | Total shareholders' equity | | 34 322 | 31 524 | 33 194 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Long-term liabilities | | | | | -------------------------------------------------------------------------------- | Provisions | | 548 | 216 | 286 | -------------------------------------------------------------------------------- | Deferred tax liabilities | | 586 | 1 006 | 676 | -------------------------------------------------------------------------------- | Long-term interest-bearing | | 348 | 317 | 277 | -------------------------------------------------------------------------------- | liabilities | | 1 482 | 1 539 | 1 239 | -------------------------------------------------------------------------------- | Total | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | | -------------------------------------------------------------------------------- | Provisions | | 1 761 | 958 | 971 | -------------------------------------------------------------------------------- | Pension obligations | | 195 | 279 | 260 | -------------------------------------------------------------------------------- | Short-term interest-bearing | | | | | -------------------------------------------------------------------------------- | liabilities | | 110 | 238 | 213 | -------------------------------------------------------------------------------- | Advance payments received | 4 | 8 743 | 7 980 | 7 590 | -------------------------------------------------------------------------------- | Current tax liabilities | | 747 | 98 | 851 | -------------------------------------------------------------------------------- | Trade and other payables | | 12 319 | 11 489 | 10 481 | -------------------------------------------------------------------------------- | Total | | 23 875 | 21 043 | 20 367 | -------------------------------------------------------------------------------- | Total liabilities | | 25 356 | 22 582 | 21 605 | -------------------------------------------------------------------------------- | TOTAL SHAREHOLDERS' EQUITY | | | | | -------------------------------------------------------------------------------- | AND LIABILITIES | | 59 678 | 54 107 | 54 800 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW STATEMENT | | | | -------------------------------------------------------------------------------- | (1 000 EUR) | 1.1.-30.9. | 1.1.-30.9. | 1.1.-31.12 | -------------------------------------------------------------------------------- | | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- | CASH FLOW FROM OPERATING | | | | -------------------------------------------------------------------------------- | ACTIVITIES | | | | -------------------------------------------------------------------------------- | Proceeds from sales | 85 633 | 68 128 | 96 117 | -------------------------------------------------------------------------------- | Proceeds from other | | | | -------------------------------------------------------------------------------- | operating income | 77 | 75 | 114 | -------------------------------------------------------------------------------- | Payments of operating expenses | -70 344 | -83 794 | -104 963 | -------------------------------------------------------------------------------- | Cash flow before financial | | | | -------------------------------------------------------------------------------- | items and taxes | 15 365 | -15 591 | -8 732 | -------------------------------------------------------------------------------- | Interests and other operating | | | | -------------------------------------------------------------------------------- | financial expenses paid | -28 | -162 | -394 | -------------------------------------------------------------------------------- | Interests and other income | | | | -------------------------------------------------------------------------------- | received | 635 | 386 | 639 | -------------------------------------------------------------------------------- | Dividends received | 133 | 115 | 115 | -------------------------------------------------------------------------------- | Income taxes paid | -2 406 | -1 387 | -1 843 | -------------------------------------------------------------------------------- | NET CASH FLOW FROM OPERATING | | | | -------------------------------------------------------------------------------- | ACTIVITIES (A) | 13 699 | -16 639 | -10 214 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH FLOW FROM INVESTING | | | | -------------------------------------------------------------------------------- | ACTIVITIES | | | | -------------------------------------------------------------------------------- | Capital expenditure in | | | | -------------------------------------------------------------------------------- | tangible and intangible | | | | -------------------------------------------------------------------------------- | assets | -2 211 | -1 073 | -1 964 | -------------------------------------------------------------------------------- | Purchases of available-for-sale | | | | -------------------------------------------------------------------------------- | as investments | -50 | 0 | -74 | -------------------------------------------------------------------------------- | Proceeds from sale of tangible | | | | -------------------------------------------------------------------------------- | and intangible assets | 5 | 0 | 1 310 | -------------------------------------------------------------------------------- | NET CASH FLOW FROM INVESTING | | | | -------------------------------------------------------------------------------- | ACTIVITIES (B) | -2 256 | -1 073 | -728 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH FLOW FROM FINANCING | | | | -------------------------------------------------------------------------------- | ACTIVITIES | | | | -------------------------------------------------------------------------------- | Repayments of long-term and | | | | -------------------------------------------------------------------------------- | short-term loan receivables | -2 | 1 000 | 1 000 | -------------------------------------------------------------------------------- | Increase of short-term | | | | -------------------------------------------------------------------------------- | liabilities | -103 | 88 | 63 | -------------------------------------------------------------------------------- | Repayment of long-term | | | | -------------------------------------------------------------------------------- | liabilities | 71 | 0 | -40 | -------------------------------------------------------------------------------- | Dividends paid | -4 005 | -2 803 | -2 803 | -------------------------------------------------------------------------------- | NET CASH FROM FINANCING | | | | -------------------------------------------------------------------------------- | ACTIVITIES (C) | -4 038 | -1 715 | -1 780 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET CHANGE IN CASH | | | | -------------------------------------------------------------------------------- | AND CASH EQUIVALENTS (A+B+C) | | | | -------------------------------------------------------------------------------- | increase (+)/decrease (-) | 7 404 | -19 427 | -12 723 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH AND CASH EQUIVALENTS | | | | -------------------------------------------------------------------------------- | AT THE BEGINNING OF THE PERIOD* | 11 284 | 24 006 | 24 006 | -------------------------------------------------------------------------------- | CASH AND CASH EQUIVALENTS | | | | -------------------------------------------------------------------------------- | AT THE END OF THE PERIOD* | 18 688 | 4 580 | 11 284 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH AND CASH EQUIVALENTS | | | | -------------------------------------------------------------------------------- | IN THE BALANCE SHEET | | | | -------------------------------------------------------------------------------- | AT THE END OF THE PERIOD | | | | -------------------------------------------------------------------------------- | Financial assets at fair | | | | -------------------------------------------------------------------------------- | value through profit or loss | 2 100 | 2 653 | 2 144 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 16 588 | 1 926 | 9 140 | -------------------------------------------------------------------------------- | TOTAL | 18 688 | 4 580 | 11 284 | -------------------------------------------------------------------------------- * Cash and cash equivalents comprise trading assets as well as cash and bank receivables, which will be due within the following three months' period. -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | | -------------------------------------------------------------------------------- | (EUR 1 000) | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Share | Share | Other | Exchange | Retained | -------------------------------------------------------------------------------- | | capital | premium | funds | rate | earnings | -------------------------------------------------------------------------------- | | | | | diff. | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2008 | 8 010 | 6 498 | 125 | 36 | 18 524 | -------------------------------------------------------------------------------- | Exchange | | | | | | -------------------------------------------------------------------------------- | differences | | | | | | -------------------------------------------------------------------------------- | from net | | | | | | -------------------------------------------------------------------------------- | investments | | | 22 | | | -------------------------------------------------------------------------------- | Translation | | | | | | -------------------------------------------------------------------------------- | differences | | | | 541 | | -------------------------------------------------------------------------------- | Net income | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | directly in | | | | | | -------------------------------------------------------------------------------- | equity | 0 | 0 | 22 | 541 | 0 | -------------------------------------------------------------------------------- | Profit for | | | | | | -------------------------------------------------------------------------------- | the period | | | | | 4 546 | -------------------------------------------------------------------------------- | Total income and | | | | | | -------------------------------------------------------------------------------- | expenses | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | in the period | 0 | 0 | 22 | 541 | 4 546 | -------------------------------------------------------------------------------- | Dividend | | | | | -4 005 | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | | | 24 | | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | September 30, 2008| 8 010 | 6 498 | 171 | 577 | 19 065 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (continue) | -------------------------------------------------------------------------------- | | To owners | | Minority | | EQUITY | -------------------------------------------------------------------------------- | | of the | | interest | | TOTAL | -------------------------------------------------------------------------------- | | Parent | | | | | -------------------------------------------------------------------------------- | | company | | | | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2008 | 33 194 | | 0 | | 33 194 | -------------------------------------------------------------------------------- | Exchange | | | | | | -------------------------------------------------------------------------------- | differences | | | | | | -------------------------------------------------------------------------------- | from net | | | | | | -------------------------------------------------------------------------------- | investments | 22 | | | | 22 | -------------------------------------------------------------------------------- | Translation | | | | | | -------------------------------------------------------------------------------- | differences | 541 | | | | 541 | -------------------------------------------------------------------------------- | Net income | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | directly in | | | | | | -------------------------------------------------------------------------------- | equity | 563 | | 0 | | 563 | -------------------------------------------------------------------------------- | Profit for | | | | | | -------------------------------------------------------------------------------- | the period | 4 546 | | | | 4 546 | -------------------------------------------------------------------------------- | Total income and | | | | | | -------------------------------------------------------------------------------- | expenses | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | in the period | 5 109 | | 0 | | 5 109 | -------------------------------------------------------------------------------- | Dividend | -4 005 | | | | -4 005 | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | 24 | | | | 24 | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | September 30, 2008| 34 322 | | 0 | | 34 322 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | | -------------------------------------------------------------------------------- | (EUR 1 000) | | | | | | -------------------------------------------------------------------------------- | | Share | Share | Other | Exchange | Retained | -------------------------------------------------------------------------------- | | capital | premium | funds | rate | earnings | -------------------------------------------------------------------------------- | | | | | diff. | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2007 | 8 010 | 6 498 | -201 | 274 | 14 726 | -------------------------------------------------------------------------------- | Exchange | | | | | | -------------------------------------------------------------------------------- | differences | | | | | | -------------------------------------------------------------------------------- | from net | | | | | | -------------------------------------------------------------------------------- | investments | | | 376 | | | -------------------------------------------------------------------------------- | Translation | | | | | | -------------------------------------------------------------------------------- | differences | | | | -374 | | -------------------------------------------------------------------------------- | Net income | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | directly in | | | | | | -------------------------------------------------------------------------------- | equity | 0 | 0 | 376 | -374 | 0 | -------------------------------------------------------------------------------- | Profit for | | | | | | -------------------------------------------------------------------------------- | the period | | | | | 4 974 | -------------------------------------------------------------------------------- | Total income and | | | | | | -------------------------------------------------------------------------------- | expenses | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | in the period | 0 | 0 | 376 | -374 | 4 974 | -------------------------------------------------------------------------------- | Dividend | | | | | -2 803 | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | | | 43 | | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | September 30, 2007| 8 010 | 6 498 | 218 | -100 | 16 897 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (continue) | -------------------------------------------------------------------------------- | | To owners | | Minority | | EQUITY | -------------------------------------------------------------------------------- | | of the | | interest | | TOTAL | -------------------------------------------------------------------------------- | | Parent | | | | | -------------------------------------------------------------------------------- | | company | | | | | -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | Jan. 1, 2007 | 29 308 | | 0 | | 29 308 | -------------------------------------------------------------------------------- | Exchange | | | | | | -------------------------------------------------------------------------------- | differences | | | | | | -------------------------------------------------------------------------------- | from net | | | | | | -------------------------------------------------------------------------------- | investments | 376 | | | | 376 | -------------------------------------------------------------------------------- | Translation | | | | | | -------------------------------------------------------------------------------- | differences | -374 | | | | -374 | -------------------------------------------------------------------------------- | Net income | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | directly in | | | | | | -------------------------------------------------------------------------------- | equity | 2 | | 0 | | 2 | -------------------------------------------------------------------------------- | Profit for | | | | | | -------------------------------------------------------------------------------- | the period | 4 974 | | | | 4 974 | -------------------------------------------------------------------------------- | Total income and | | | | | | -------------------------------------------------------------------------------- | expenses | | | | | | -------------------------------------------------------------------------------- | recognized | | | | | | -------------------------------------------------------------------------------- | in the period | 4 976 | | 0 | | 4 976 | -------------------------------------------------------------------------------- | Dividend | -2 803 | | | | -2 803 | -------------------------------------------------------------------------------- | Equity-settled | | | | | | -------------------------------------------------------------------------------- | share-based | | | | | | -------------------------------------------------------------------------------- | transactions | 43 | | | | 43 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY | | | | | | -------------------------------------------------------------------------------- | September 30, 2007| 31 524 | | 0 | | 31 524 | -------------------------------------------------------------------------------- NOTES General information Raute Group (‘Group') is a globally operating technology corporation, whose core business consists of the production processes of veneer-based wood products. Project deliveries include complete mills, production lines, and single machines. Full-service technology services include spare part, maintenance, and modernization services, as well as services related to developing customers' businesses. The Group's Parent company, Raute Corporation, is a Finnish public limited liability company established in accordance with Finnish law (Business ID FI01490726). Its series A shares are quoted on NASDAQ OMX Helsinki Ltd., under Industrials. Raute Corporation is domiciled in Lahti, Finland. The address of its registered office is Rautetie 2, FI-15550 Nastola, Finland, and its postal address is P.O. Box 69, FI-15551 Nastola, Finland. A copy of the Consolidated financial statements 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 27 October 2008 reviewed the Group's Interim financial statements for January 1 - September 30, 2008, and decided to publish Raute Corporation's Interim financial reporting for January 1 - September 30, 2008, in compliance with this release. 1. Accounting principles Raute Corporation's Interim financial reporting has been prepared in compliance with IAS 34. Raute Group's Interim financial statements for January 1 - September 30, 2008, included in the Interim financial reporting do not contain full notes and other information presented in the financial statements. Therefore, the Interim financial reporting should be read in conjunction with the Financial statements published for 2007. The figures presented in the Interim financial reporting have not been audited. Figures in parentheses refer to the corresponding figures in the comparison year. All the monetary figures presented in this interim report are in thousands euros, unless otherwise stated. Due to the roundings of the figures in the interim financial statement tables, the sums of figures may deviate from the sum total presented in the table. The preparation of interim financial statements according to IFRS requires management to use estimates and assumptions that affect the assets and liabilities on the balance sheet date, as well as the income and expenses for the financial period. Because the forward-looking estimates and assumptions are based on management's best knowledge at the interim time, they comprise risks and uncertainties. The actual results may differ from these estimates. The following standards have taken effect during the interim period, but according to the management's view, they do not affect the performance, the financial condition or the notes of the Group: - IFRIC 11, IFRS 2: Group and Treasury Share Transactions - IFRIC 12, Service Concession Arrangements - IFRIC 14, IAS 19: The Limit and Defined Benefit Assets, Minimum Funding Requirements and their Interaction - IFRIC 16, Hedges of a Net Investment in a Foreign Operation - IFRIC 15, Agreements for the Construction of Real Estate In other respects, the Group has followed the accounting principles described in the Financial statements for 2007. 2. Segment information Primary reporting segment Raute's primary reporting segment is the business segment. Continuing operations belong to the wood products technology segment. Secondary reporting segment Raute's secondary reporting segment is geographical. The geographical segment consists of market areas accounting for over 10 percent of the Group's net sales. Geographical reporting segment information: -------------------------------------------------------------------------------- | Net sales to external | 1.1.- | | 1.1.- | | 1.1.- | | -------------------------------------------------------------------------------- | clients by | 30.9. | | 30.9. | | 31.12. | | -------------------------------------------------------------------------------- | clients geographical | 2008 | % | 2007 | % | 2007 | % | -------------------------------------------------------------------------------- | location | | | | | | | -------------------------------------------------------------------------------- | Europe | 37 587 | 47 | 22 181 | 26 | 34 117 | 31 | -------------------------------------------------------------------------------- | Russia | 29 065 | 36 | 32 508 | 38 | 38 314 | 35 | -------------------------------------------------------------------------------- | North America | 8 140 | 10 | 20 373 | 24 | 24 047 | 22 | -------------------------------------------------------------------------------- | South America | 3 561 | 5 | 7 787 | 9 | 11 485 | 10 | -------------------------------------------------------------------------------- | Others | 1 494 | 2 | 2 267 | 3 | 2 836 | 3 | -------------------------------------------------------------------------------- | TOTAL | 79 847 | 100 | 85 116 | 100 | 110 799 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets by geographical | | | | | | | -------------------------------------------------------------------------------- | location | | | | | | | -------------------------------------------------------------------------------- | Europe | 53 771 | 90 | 46 237 | 85 | 48 822 | 89 | -------------------------------------------------------------------------------- | Russia | 922 | 2 | 439 | 1 | 1 048 | 2 | -------------------------------------------------------------------------------- | North America | 3 703 | 6 | 6 164 | 11 | 3 275 | 6 | -------------------------------------------------------------------------------- | South America | 64 | 0 | 47 | 0 | 34 | 0 | -------------------------------------------------------------------------------- | Others | 1 218 | 2 | 1 220 | 2 | 1 621 | 3 | -------------------------------------------------------------------------------- | TOTAL | 59 678 | 100 | 54 107 | 100 | 54 800 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital expenditure by | | | | | | | -------------------------------------------------------------------------------- | geographical location | | | | | | | -------------------------------------------------------------------------------- | Europe | 1 818 | 82 | 712 | 66 | 1 411 | 75 | -------------------------------------------------------------------------------- | Russia | 1 | 0 | 0 | 0 | 0 | 0 | -------------------------------------------------------------------------------- | North America | 34 | 2 | 75 | 7 | 74 | 4 | -------------------------------------------------------------------------------- | South America | 21 | 1 | 0 | 0 | 4 | 0 | -------------------------------------------------------------------------------- | Others | 345 | 15 | 286 | 27 | 380 | 20 | -------------------------------------------------------------------------------- | TOTAL | 2 219 | 100 | 1 073 | 100 | 1 869 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 3. Proceeds from sales | | | | | | | -------------------------------------------------------------------------------- | | 1.1.- | | 1.1.- | | 1.1.- | | -------------------------------------------------------------------------------- | Net sales | 30.9. | | 30.9. | | 31.12. | | -------------------------------------------------------------------------------- | by market area | 2008 | % | 2007 | % | 2007 | % | -------------------------------------------------------------------------------- | Rest of Europe | 26 633 | 33 | 13 924 | 16 | 20 077 | 18 | -------------------------------------------------------------------------------- | Russia | 29 065 | 36 | 32 508 | 38 | 38 314 | 35 | -------------------------------------------------------------------------------- | Finland | 10 954 | 14 | 8 257 | 10 | 14 040 | 13 | -------------------------------------------------------------------------------- | North America | 8 140 | 10 | 20 373 | 24 | 24 047 | 22 | -------------------------------------------------------------------------------- | South America | 3 561 | 5 | 7 787 | 9 | 11 485 | 10 | -------------------------------------------------------------------------------- | Asia | 612 | 1 | 885 | 1 | 915 | 1 | -------------------------------------------------------------------------------- | Oceania | 633 | 1 | 597 | 1 | 979 | 1 | -------------------------------------------------------------------------------- | Others | 249 | 0 | 785 | 1 | 942 | 1 | -------------------------------------------------------------------------------- | TOTAL | 79 847 | 100 | 85 116 | 100 | 110 799 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 4. Long-term projects | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | Net sales | | | | -------------------------------------------------------------------------------- | Net sales by percentage | | | | -------------------------------------------------------------------------------- | of completion | 66 009 | 73 398 | 94 905 | -------------------------------------------------------------------------------- | Other net sales | 13 839 | 11 718 | 15 894 | -------------------------------------------------------------------------------- | TOTAL | 79 847 | 85 116 | 110 799 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Project revenues entered | | | | -------------------------------------------------------------------------------- | as income from currently | | | | -------------------------------------------------------------------------------- | undelivered long-term | | | | -------------------------------------------------------------------------------- | projects recognized | | | | -------------------------------------------------------------------------------- | by percentage of completion | 97 511 | 109 120 | 120 722 | -------------------------------------------------------------------------------- | Amount of long-term project | | | | -------------------------------------------------------------------------------- | revenues not yet | | | | -------------------------------------------------------------------------------- | entered as income | 30 535 | 40 718 | 53 474 | -------------------------------------------------------------------------------- | Specification of combined | | | | -------------------------------------------------------------------------------- | asset and liability items: | | | | -------------------------------------------------------------------------------- | Accrued income | | | | -------------------------------------------------------------------------------- | corresponding to revenues | | | | -------------------------------------------------------------------------------- | by percentage of completion | 97 587 | 110 024 | 120 942 | -------------------------------------------------------------------------------- | Advances received from | | | | -------------------------------------------------------------------------------- | project customers | -85 375 | -87 280 | -102 601 | -------------------------------------------------------------------------------- | Project receivables included | | | | -------------------------------------------------------------------------------- | in current assets | 12 212 | 22 744 | 18 341 | -------------------------------------------------------------------------------- | Advance payments received | | | | -------------------------------------------------------------------------------- | in the Balance Sheet | 8 743 | 7 980 | 7 590 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 5. Number of personnel, persons | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | - Effective, on average | 564 | 570 | 566 | -------------------------------------------------------------------------------- | - In books, on average | 586 | 576 | 575 | -------------------------------------------------------------------------------- | - In books, at the end of period, | 584 | 572 | 570 | -------------------------------------------------------------------------------- | - of which personnel working | | | | -------------------------------------------------------------------------------- | abroad | 141 | 140 | 140 | -------------------------------------------------------------------------------- 6. Income taxes Income taxes represent the tax corresponding to the period's result, based on the estimated full-year tax rate. The effective tax rate of the reporting period is 30.8 percent. -------------------------------------------------------------------------------- | 7. Research and development costs | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | Research and development costs | | | | -------------------------------------------------------------------------------- | for the period | 3 498 | 3 137 | 3 969 | -------------------------------------------------------------------------------- | Depreciation of capitalized | | | | -------------------------------------------------------------------------------- | development costs | 382 | 275 | 367 | -------------------------------------------------------------------------------- | Recognized as assets | | | | -------------------------------------------------------------------------------- | in balance sheet | -692 | -191 | -233 | -------------------------------------------------------------------------------- | Research and development | | | | -------------------------------------------------------------------------------- | costs entered as expenses | | | | -------------------------------------------------------------------------------- | for the period | 3 188 | 3 221 | 4 103 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 8. Changes in Property, plant and | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | equipment | | | | -------------------------------------------------------------------------------- | Carrying amount at the | | | | -------------------------------------------------------------------------------- | beginnig of the period | 40 008 | 40 411 | 40 411 | -------------------------------------------------------------------------------- | Exchange rate differences | -369 | -320 | 4 | -------------------------------------------------------------------------------- | Additions | 1 304 | 455 | 1 263 | -------------------------------------------------------------------------------- | Disposals | 0 | 0 | -1 558 | -------------------------------------------------------------------------------- | Other reclassifications between | | | | -------------------------------------------------------------------------------- | items | -163 | -145 | -112 | -------------------------------------------------------------------------------- | Carrying amount at the end | | | | -------------------------------------------------------------------------------- | of the period | 40 781 | 40 401 | 40 008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Accumulated depreciation and | | | | -------------------------------------------------------------------------------- | amortization at the beginning | | | | -------------------------------------------------------------------------------- | of the period | -29 014 | -27 868 | -27 868 | -------------------------------------------------------------------------------- | Exchange rate differences | 291 | 548 | 2 | -------------------------------------------------------------------------------- | Accumulated depreciations on | | | | -------------------------------------------------------------------------------- | disposals | 0 | 0 | -50 | -------------------------------------------------------------------------------- | Depreciation for the | | | | -------------------------------------------------------------------------------- | financial period | -1 180 | -1 180 | -1 574 | -------------------------------------------------------------------------------- | Impairments | 0 | 0 | 477 | -------------------------------------------------------------------------------- | Accumulated depreciation and | | | | -------------------------------------------------------------------------------- | amortization at the end | | | | -------------------------------------------------------------------------------- | of the period | -29 904 | -28 500 | -29 014 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Book value at the beginnig | | | | -------------------------------------------------------------------------------- | of the period | 10 993 | 12 542 | 12 542 | -------------------------------------------------------------------------------- | Book value at the end | | | | -------------------------------------------------------------------------------- | of the period | 10 877 | 11 901 | 10 993 | -------------------------------------------------------------------------------- 9. Share-based payments The effect of the share-based remunerations to the profit of Raute Group was EUR -52 thousand. At the end of the period the current value of the cash portion was EUR 11.49 per share. The fair value of granted share-based remunerations was EUR 0.3 million in total. -------------------------------------------------------------------------------- | 10. Other leases and operating | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | lease liabilities | | | | -------------------------------------------------------------------------------- | Group as lessee | | | | -------------------------------------------------------------------------------- | Minimum rents paid on the basis of | | | | -------------------------------------------------------------------------------- | other non-cancellable leases: | | | | -------------------------------------------------------------------------------- | - Within one year | 189 | 48 | 127 | -------------------------------------------------------------------------------- | - After the period of more than 1 | | | | -------------------------------------------------------------------------------- | and less than 5 years | 359 | 486 | 370 | -------------------------------------------------------------------------------- | TOTAL | 548 | 534 | 497 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | The Group has rented in a part of its business premises in use. | -------------------------------------------------------------------------------- | The rental agreements are made for fixed-term. The agreements include an | -------------------------------------------------------------------------------- | option to extend the rental period after the date of initial expiration. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minimum direct leasing rents | | | | -------------------------------------------------------------------------------- | paid on the basis of | | | | -------------------------------------------------------------------------------- | non-cancellable direct leasing | | | | -------------------------------------------------------------------------------- | contracts: | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | - Within one year | 59 | 25 | 60 | -------------------------------------------------------------------------------- | - After the period of more than 1 | | | | -------------------------------------------------------------------------------- | and less than 5 years | 19 | 55 | 60 | -------------------------------------------------------------------------------- | TOTAL | 78 | 80 | 120 | -------------------------------------------------------------------------------- 11. Pledged assets and contingent liabilities Pledged assets Debts secured by mortgages Raute Group has on September 30, 2008 long-term bilateral credit facilities worth EUR 17 million, which were unused during the period. Raute Corporation has a EUR 10 million domestic commercial paper program, which is arranged by Nordea Bank Finland plc. Within the limits of the program, the company can issue commercial papers maturing in less than one year. -------------------------------------------------------------------------------- | Contingent liabilities and | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | other liabilities | | | | -------------------------------------------------------------------------------- | For own debt | | | | -------------------------------------------------------------------------------- | - Mortgages on real property | 134 | 1 059 | 134 | -------------------------------------------------------------------------------- | - Business mortgages | 10 000 | 10 000 | 10 000 | -------------------------------------------------------------------------------- | Security for Group's liabilities | | | | -------------------------------------------------------------------------------- | - Bank guarantees | 16 340 | 17 150 | 17 584 | -------------------------------------------------------------------------------- | Other own liabilities | | | | -------------------------------------------------------------------------------- | Leasing and rent liabilities | | | | -------------------------------------------------------------------------------- | - For the current accounting | | | | -------------------------------------------------------------------------------- | period | 248 | 73 | 187 | -------------------------------------------------------------------------------- | - For subsequent accounting | | | | -------------------------------------------------------------------------------- | periods | 378 | 541 | 430 | -------------------------------------------------------------------------------- No loans or pledges have been given or other commitments made on behalf of the company's management or shareholders. -------------------------------------------------------------------------------- | 12. Currency derivatives | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Currency derivatives are used for hedging purposes. | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Nominal values of forward | | | | -------------------------------------------------------------------------------- | contracts in foreign currency | | | | -------------------------------------------------------------------------------- | Economic hedging | | | | -------------------------------------------------------------------------------- | - Related to financing | 4 288 | 3 650 | 3 277 | -------------------------------------------------------------------------------- | - Related to hedging of net sales | 1 759 | 6 568 | 2 481 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fair values of forward contracts | | | | -------------------------------------------------------------------------------- | in foreign currency | | | | -------------------------------------------------------------------------------- | Economic hedging | | | | -------------------------------------------------------------------------------- | - Related to financing | -26 | -4 | -30 | -------------------------------------------------------------------------------- | - Related to the hedging | | | | -------------------------------------------------------------------------------- | of net sales | -20 | 346 | 360 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP KEY RATIOS | | | | -------------------------------------------------------------------------------- | (1 000 EUR) | 1.1.-30.9. | 1.1.-30.9. | 1.1.-31.12. | -------------------------------------------------------------------------------- | | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on investment (ROI), % | 26,7 | 28,7 | 29,2 | -------------------------------------------------------------------------------- | Return on equity (ROE), % | 18,0 | 21,8 | 21,1 | -------------------------------------------------------------------------------- | Quick ratio | 2,6 | 2,6 | 2,8 | -------------------------------------------------------------------------------- | Gearing, % | -53,1 | -12,8 | -32,5 | -------------------------------------------------------------------------------- | Equity ratio, % | 67,4 | 68,3 | 70,3 | -------------------------------------------------------------------------------- | Order book, MEUR | 32 | 44 | 56 | -------------------------------------------------------------------------------- | Order intake, MEUR | 58 | 48 | 90 | -------------------------------------------------------------------------------- | Exported portion of net sales, % | 86,3 | 90,3 | 87,3 | -------------------------------------------------------------------------------- | Change in net sales, % | -6,2 | 15,5 | 4,3 | -------------------------------------------------------------------------------- | Gross capital expenditure, MEUR | 2,2 | 1,1 | 1,9 | -------------------------------------------------------------------------------- | % of net sales | 2,8 | 1,3 | 1,7 | -------------------------------------------------------------------------------- | Research and development, MEUR | 3,9 | 3,1 | 4,0 | -------------------------------------------------------------------------------- | % of net sales | 4,9 | 3,7 | 3,6 | -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | | | | -------------------------------------------------------------------------------- | - basic | 1,14 | 1,24 | 1,65 | -------------------------------------------------------------------------------- | - diluted | 1,14 | 1,24 | 1,65 | -------------------------------------------------------------------------------- | Equity to share, EUR | 8,57 | 7,87 | 8,29 | -------------------------------------------------------------------------------- | Dividend per share | | | | -------------------------------------------------------------------------------- | series K shares, EUR | | | 1,00 | -------------------------------------------------------------------------------- | Dividend per share | | | | -------------------------------------------------------------------------------- | series A shares, EUR | | | 1,00 | -------------------------------------------------------------------------------- | Dividend per profit, % | | | 60,7 | -------------------------------------------------------------------------------- | Effective dividend return, % | | | 7,0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share price at the end of | | | | -------------------------------------------------------------------------------- | the period, EUR | 11,49 | 13,20 | 14,35 | -------------------------------------------------------------------------------- | Number of shares | | | | -------------------------------------------------------------------------------- | - weighted average, 1 000 pcs | 4 005 | 4 005 | 4 005 | -------------------------------------------------------------------------------- | - diluted, 1 000 pcs | 4 005 | 4 005 | 4 005 | -------------------------------------------------------------------------------- The formulas used to calculate key ratios are described on page 72 of the Annual Report 2007. THE DEVELOPMENT OF QUARTERLY RESULTS -------------------------------------------------------------------------------- | | Q 3 | Q 2 | Q 1 | Q 4 | Rolling | Rolling | -------------------------------------------------------------------------------- | | 2008 | 2008 | 2008 | 2007 | 1.10.2007 | 1.10.2006 | -------------------------------------------------------------------------------- | | | | | | - | - | -------------------------------------------------------------------------------- | | | | | | 30.9.2008 | 30.9.2007 | -------------------------------------------------------------------------------- | NET SALES | 25 227 | 30 710 | 23 910 | 25 683 | 105 530 | 117 610 | -------------------------------------------------------------------------------- | Other operating | | | | | | | -------------------------------------------------------------------------------- | income | 29 | 26 | 27 | 386 | 468 | 147 | -------------------------------------------------------------------------------- | Increase (+) or | | | | | | | -------------------------------------------------------------------------------- | decrease (-) in | | | | | | | -------------------------------------------------------------------------------- | inventories of | | | | | | | -------------------------------------------------------------------------------- | finished goods | | | | | | | -------------------------------------------------------------------------------- | and work | | | | | | | -------------------------------------------------------------------------------- | in progress | -65 | 381 | 196 | -252 | 259 | 282 | -------------------------------------------------------------------------------- | Materials and | | | | | | | -------------------------------------------------------------------------------- | services | 13 735 | 17 293 | 11 661 | 11 910 | 54 598 | 68 579 | -------------------------------------------------------------------------------- | Expenses | | | | | | | -------------------------------------------------------------------------------- | from employee | | | | | | | -------------------------------------------------------------------------------- | benefits | 6 541 | 7 858 | 7 131 | 8 103 | 29 633 | 27 869 | -------------------------------------------------------------------------------- | Depreciation, | | | | | | | -------------------------------------------------------------------------------- | amortization | | | | | | | -------------------------------------------------------------------------------- | and impairment | | | | | | | -------------------------------------------------------------------------------- | charges | 699 | 720 | 641 | 654 | 2 714 | 2 871 | -------------------------------------------------------------------------------- | Other operating | | | | | | | -------------------------------------------------------------------------------- | expenses | 1 988 | 2 543 | 3 497 | 2 709 | 10 737 | 10 253 | -------------------------------------------------------------------------------- | Total operating | | | | | | | -------------------------------------------------------------------------------- | expenses | 22 962 | 28 413 | 22 931 | 23 376 | 97 681 | 109 573 | -------------------------------------------------------------------------------- | OPERATING PROFIT| 2 228 | 2 704 | 1 202 | 2 441 | 8 576 | 8 465 | -------------------------------------------------------------------------------- | % of net sales | 9 | 9 | 5 | 10 | 8 | 7 | -------------------------------------------------------------------------------- | Financial income| 75 | 190 | 453 | 159 | 876 | 700 | -------------------------------------------------------------------------------- | Financial | | | | | | | -------------------------------------------------------------------------------- | expenses | 26 | 22 | -330 | -129 | -411 | -247 | -------------------------------------------------------------------------------- | PROFIT BEFORE | | | | | | | -------------------------------------------------------------------------------- | TAX | 2 329 | 2 916 | 1 325 | 2 470 | 9 041 | 8918 | -------------------------------------------------------------------------------- | % of net sales | 9 | 9 | 6 | 10 | 9 | 8 | -------------------------------------------------------------------------------- | Income taxes | -733 | -920 | -373 | -844 | -2 869 | -2 248 | -------------------------------------------------------------------------------- | PROFIT FOR THE | | | | | | | -------------------------------------------------------------------------------- | PERIOD | 1 597 | 1 996 | 952 | 1 626 | 6 172 | 6 670 | -------------------------------------------------------------------------------- | % of net sales | 6 | 6 | 4 | 6 | 6 | 6 | -------------------------------------------------------------------------------- | Breakdown | | | | | | | -------------------------------------------------------------------------------- | Share of profit | | | | | | | -------------------------------------------------------------------------------- | that belongs | | | | | | | -------------------------------------------------------------------------------- | to owners of the| | | | | | | -------------------------------------------------------------------------------- | Parent company | 1 597 | 1 996 | 952 | 1 626 | 6 172 | 6 670 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per | | | | | | | -------------------------------------------------------------------------------- | share, EUR | | | | | | | -------------------------------------------------------------------------------- | Undiluted | | | | | | | -------------------------------------------------------------------------------- | earnings | | | | | | | -------------------------------------------------------------------------------- | per share | 0,40 | 0,50 | 0,24 | 0,41 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Diluted earnings| | | | | | | -------------------------------------------------------------------------------- | per share | 0,40 | 0,50 | 0,24 | 0,41 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shares, | | | | | | | -------------------------------------------------------------------------------- | 1 000 pcs | | | | | | | -------------------------------------------------------------------------------- | Adjusted | | | | | | | -------------------------------------------------------------------------------- | average number | | | | | | | -------------------------------------------------------------------------------- | of shares | 4 005 | 4 005 | 4 005 | 4 005 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Adjusted | | | | | | | -------------------------------------------------------------------------------- | average number | | | | | | | -------------------------------------------------------------------------------- | of shares, | | | | | | | -------------------------------------------------------------------------------- | diluted | 4 005 | 4 005 | 4 005 | 4 005 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 20 LARGEST SHAREHOLDERS AT | Number of | Number of | | -------------------------------------------------------------------------------- | 30 SEPTEMBER, 2008 | series K- | series A- | | -------------------------------------------------------------------------------- | | shares | shares | Total | -------------------------------------------------------------------------------- | | (20 votes | (1 vote | number | -------------------------------------------------------------------------------- | | per share) | per share) | of shares | -------------------------------------------------------------------------------- | 1. Sundholm Göran | | 525 000 | 525 000 | -------------------------------------------------------------------------------- | 2. Hietala Pekka Tapani | | 181 900 | 181 900 | -------------------------------------------------------------------------------- | 3. Suominen Jussi Matias | 48 000 | 74 759 | 122 759 | -------------------------------------------------------------------------------- | 4. Mustakallio Kari Pauli | 60 480 | 60 009 | 120 489 | -------------------------------------------------------------------------------- | 5. Kirmo Kaisa Marketta | 50 280 | 64 052 | 114 332 | -------------------------------------------------------------------------------- | 6. Suominen Pekka Matias | 48 000 | 64 159 | 112 159 | -------------------------------------------------------------------------------- | 7. Suominen Tiina Sini-Maria | 48 000 | 62 316 | 110 316 | -------------------------------------------------------------------------------- | 8. Siivonen Osku Pekka | 50 640 | 53 539 | 104 179 | -------------------------------------------------------------------------------- | 9. Keskiaho Kaija Leena | 33 600 | 51 116 | 84 716 | -------------------------------------------------------------------------------- | 10. Särkijärvi Riitta | 60 480 | 22 009 | 82 489 | -------------------------------------------------------------------------------- | 11. Mustakallio Mika | 39 750 | 42 670 | 82 420 | -------------------------------------------------------------------------------- | 12. Mustakallio Risto | 42 240 | 35 862 | 78 102 | -------------------------------------------------------------------------------- | 13. Mustakallio Ulla Sinikka | 47 240 | 30 862 | 78 102 | -------------------------------------------------------------------------------- | 14. Sr Arvo Finland Value | | 63 042 | 63 042 | -------------------------------------------------------------------------------- | 15. Mustakallio Marja Helena | 42 240 | 20 662 | 62 902 | -------------------------------------------------------------------------------- | 16. Kirmo Lasse Antti | 30 000 | 26 200 | 56 200 | -------------------------------------------------------------------------------- | 17. Särkijärvi Timo Juha | 12 000 | 43 256 | 55 256 | -------------------------------------------------------------------------------- | 18. Särkijärvi-Martinez Anu Riitta | 12 000 | 43 256 | 55 256 | -------------------------------------------------------------------------------- | 19. Mustakallio Kai Henrik | 47 420 | 6 994 | 54 414 | -------------------------------------------------------------------------------- | 20. Suominen Jukka Matias | 24 960 | 27 964 | 52 924 | -------------------------------------------------------------------------------- | TOTAL | 697 330 | 1 499 627 | 2 196 957 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share of total amount of shares, % | 70,4 | 49,8 | 54,9 | -------------------------------------------------------------------------------- | Share of total voting rights, % | 70,4 | 49,8 | 67,6 | -------------------------------------------------------------------------------- | Administrative registered | | 117 058 | 117 058 | -------------------------------------------------------------------------------- | Other shareholders | 293 831 | 1 396 912 | 1 690 743 | -------------------------------------------------------------------------------- | TOTAL | 991 161 | 3 013 597 | 4 004 758 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | MANAGEMENT'S SHAREHOLDING | 98 990 | 90 838 | 189 828 | -------------------------------------------------------------------------------- | Share of total amount of shares, % | 10,0 | 3,0 | 4,7 | -------------------------------------------------------------------------------- | Share of total voting rights, % | 10,0 | 3,0 | 9,1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHARE INFORMATION | 30.9.2008 | 30.9.2007 | 31.12.2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Number of shares | | | | -------------------------------------------------------------------------------- | - Series K shares, ordinary shares | | | | -------------------------------------------------------------------------------- | (20 votes/share) | 991 161 | 991 161 | 991 161 | -------------------------------------------------------------------------------- | - Series A shares | | | | -------------------------------------------------------------------------------- | (1 vote/share) | 3 013 597 | 3 013 597 | 3 013 597 | -------------------------------------------------------------------------------- | Total | 4 004 758 | 4 004 758 | 4 004 758 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Trading of series A shares | | | | -------------------------------------------------------------------------------- | Trading of shares, pcs | 295 111 | 805 203 | 981 095 | -------------------------------------------------------------------------------- | Trading of shares, MEUR | 4,1 | 11,3 | 13,7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Exchange rate of series A shares | | | | -------------------------------------------------------------------------------- | At the end of report period, EUR | 11,49 | 13,20 | 14,35 | -------------------------------------------------------------------------------- | Highest price during | | | | -------------------------------------------------------------------------------- | the report period, EUR | 15,20 | 15,45 | 15,45 | -------------------------------------------------------------------------------- | Lowest price during | | | | -------------------------------------------------------------------------------- | the report period, EUR | 11,49 | 12,40 | 12,40 | -------------------------------------------------------------------------------- | Average price during | | | | -------------------------------------------------------------------------------- | the report period, EUR | 13,77 | 13,88 | 13,85 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Market value of capital stock | | | | -------------------------------------------------------------------------------- | Series K shares valued at the | | | | -------------------------------------------------------------------------------- | value of series A shares | | | | -------------------------------------------------------------------------------- | at the end of reporting period. | | | | -------------------------------------------------------------------------------- | - Series K shares, MEUR | 11,4 | 13,1 | 14,2 | -------------------------------------------------------------------------------- | - Series A shares, MEUR | 34,6 | 39,8 | 43,2 | -------------------------------------------------------------------------------- | Total, MEUR | 46,0 | 52,9 | 57,5 | -------------------------------------------------------------------------------- RAUTE CORPORATION Board of Directors 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 RAUTE IN BRIEF: Raute is a technology company serving the wood products industry worldwide. Its most important customers are the plywood and LVL industries. The company is one of the world's leading suppliers of mill-scale projects to these customer industries. The total service concept also includes technology services, with which Raute supports its customers throughout the entire life cycle of their investments. Raute's head office and main production plant are in Nastola, Finland. Its other production plants are in the Vancouver area of Canada, in the Shanghai area of China, and in Jyväskylä and Kajaani, Finland. Net sales in 2007 were EUR 111 million and the number of personnel 570. More information on the company can be found at www.raute.com. DISTRIBUTION: NASDAQ OMX Helsinki Ltd., main media, www.raute.com
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