Technology solutions for veneer, plywood and LVL industries globally

Transcription

1 Technology solutions for veneer, plywood and LVL industries globally May 18, 2016 Tapani Kiiski, President and CEO

2 Raute s business today Wood products industry Raute s customers Plywood consumption 2014 Plywood and LVL industry s market is some 40 billion a year Investments in veneer, plywood and LVL production technology are some EUR 600 (-750) million a year in normal market and financial situation For Raute scale there is unlimited market potential for after sales services Veneer industry Plywood industry LVL industry Raute adds value to its customers business by supplying solutions for manufacturing wood products in a profitable and environmentally sustainable way. Total 94.1 million m3 Building 38% Furniture 26% Flooring 5% Total 69% Packaging 9% Transport vehicles 7% Total 16% Others 15% Raute is a technology and services company that serves the wood products industry globally. Raute s solutions 67% of net sales (2015) Project deliveries: Mill-scale projects, separate production lines, machinery and equipment Automation, machine vision, measuring technology Technology services: Modernizations Maintenance and spare parts Production support services 33% of net sales (2015) 2

3 Raute is a part in the wood-processing value chain Added value (raw material) EUR/m 3 Sawn timber 35 Plywood 120 Paper 345 3

4 Raute s full-service concept 4

5 Plywood Plywood is a panel in which the veneer plies are glued, cross-banded and hot pressed to form a solid panel Applications: construction furniture transportation materials handling

6 Plywood production technology Dry veneer processing Green veneer processing Panel lay-up and pressing Panel processing Automation: Machine automation Machine vision Measuring and grading technology Production and quality control data management

7 LVL LVL (Laminated Veneer Lumber) is a structural wood product made of veneer sheets in which the plies are glued with the grain running in the same direction and hot pressed. Applications: load-bearing structures, beams, studs, I-beam flanges, etc. furniture, frames, stairs, etc.

8 LVL production technology LVL = Laminated Veneer Lumber Dry veneer processing Green veneer processing Billet handling Lay-up and pre-pressing Hot pressing Automation: Machine automation Machine vision Measuring and grading technology Production and quality control data management

9 Local presence globally 434 persons (68%) Finland: Nastola, Kajaani North America: Vancouver, Memphis 78 persons (12%) Estonia, Raplamaa 2 persons 2 persons Latvia, Riga Russia, Moscow, St. Petersburg 10 persons 100 persons (16%) China, Shanghai Singapore 6 persons Raute, production facility Raute, other Sales representative Chile, Santiago 5 persons Australia, Myrtleford Headcount at March 31, 2016

10 Raute s customers Typical Raute customers are veneer, plywood or LVL mills. Majority of them are private family businesses, while some are part of large consolidated forest groups manufacturing not only plywood and LVL, but also e.g. pulp, paper and sawn timber. Plywood industry Internationalization and integration between markets to start in the plywood industry. New companies are attracted to the industry typically by unused, to harvesting height grown forest resources for which the owners are looking a profitable use. Raute is a market leader Raute is a global market leader as a machinery supplier for new capacity projects in the plywood and LVL industries. Raute s market share Raute s market share on all machinery investments in the plywood industry is estimated to be percent. Raute has an especially strong market position in the LVL industry. More than half of the world s LVL is produced with machines supplied by Raute. 10

11 Raute s competitors are typically Business environment operating locally or regionally small or medium-sized companies focusing on only one or few of the sub processes Demand for wood products is driven by General increase of living standards Construction regulations Increased environmental awareness Availability and price of wood Economic cycles Wood products industry From large consolidated forest groups to small private family businesses New mills tend to be larger than the traditional ones Internationalization and integration not very developped New companies are attracted to the industry by suitable forest resources Emerging markets to play a greater role Challenges and opportunities of wood products industry Cost-efficient and ecological production methods Increasing use of plantation wood Quality requirements and standardization of end products 11

12 State-of-the-art technologies and innovations Comprehensive understanding of the entire plywood and LVL production process Long-term experience in project deliveries to all market areas Full range of technologies and services Unique supply of maintenance and spare parts services Global and local presence Raute is the only public listed company in its sector Raute s competitive advantages Raute s global full-service concept in several dimensions: The entire production process The entire investment life cycle Equipment and services

13 Raute s market 13

14 Plywood production and consumption Plywood production and consumption 2000, 2005, 2010, and 2014 (million m 3 ) 120,0 100,0 80,0 60,0 40,0 20,0 CAGR : 3,8% Year Production (million m3) Consumption (million m3) ,4 59, ,3 72, ,5 79, ,9 94, Plywood production by market area 2000, 2005, 2010, and 2014 (1,000 m 3 ) Production Consumption Plywood consumption by end-use category 2014 Total 94.1 million m 3 Other 15 % 100,0 90,0 80,0 70,0 60, Transport 7 % Packaging 9 % Construction 38 % 50,0 40,0 30,0 20,0 Flooring 5 % Furniture 26 % 10,0 0,0 NAM EMEA Russia LAM China Rest of APAC Total Source: Indufor 14

15 By market areas North America Europe Russia Replacement investments and modernizations. 11% Developing current capacity 3% Upgrading production technology Exploiting forest resources Export products 4% Africa 2% South America Local further processing of wood Asia-Pacific area Plantation forest resources 5% 5% Plantation forest resources In China, increased quality requirements and industrialization 74% Market area s share of Raute s new orders % Plywood production by market area in

16 Changes as opportunities 16

17 Trends Renewable wood as raw material on rise Environmental awareness to increase and regulations to tighten More cost-efficient manufacturing methods necessary to face ever tightening competition Energy prices will go up Emerging markets to play a greater role General uncertainty slows down plywood industry s investments. 17

18 From Raute s perspective Increasing use of wood boosts demand for wood products technology. Emerging markets to play a greater role. Raute has expanded its offering to this market. Raute is competitive in serving as well markets with state-of-the-art technology as emerging markets where the industry is getting modernized. Technology services to increase their share, especially in traditional markets. 18

19 To invest in Raute stock 19

20 Number of shareholders Market cap, MEUR Share price, EUR Ownership as of March 31, 2016 Earnings per share and profit distribution Persons responsible for investor relations Tapani Kiiski, President and CEO Arja Hakala, CFO Raute as an investment Two series of shares Series A share trading code RUTAV number of shares (May 9, 2016) 3,171,417 pcs votes/share 1 vote/share Series K share, not publicly traded number of shares pcs votes/share 20 votes/share conversion to series A sahres Article 3 redemption right Article 4 of the Articles of Association Higher shareholder value Clearly defined strategy and regular evaluation of it Reaction and adaptation to changing market conditions Solid and committed long-term ownership Impeccable corporate governance and communication Predictability Stock exchange listing Long-term dividend policy Dividend policy Raute exercises an active dividend policy. Its aim is to ensure competitive returns for its investors. Dividend payment takes into account future investment needs and the goal of maintaining a solid equity ratio. Due to the nature of the project business, the dividend is not directly tied to the annual result. Analysts reporting on Raute Inderes Oy. In addition, other analysis companies occasionally draw up reports on the company. Raute is not liable for the estimates presented in the analysis. Liquidity Providing Agreement Nordea Pankki Suomi Oyj 20

21 Interim Report 1 January 31 March April 2016 Tapani Kiiski, President and CEO

22 in brief Business environment No major change with respect to Raute or Raute s customer base. Demand for Raute s technology and services conflicting during the period under review Invitations to tender and even active negotiations relatively high in number Investment decisions further postponed Demand for spare parts and services at a good level. Raute Order intake at a low level Spare parts and services at a good level Net sales up 7% from the comparison period Profitability at the comparison year s level operating result 5% of net sales. MEUR Q Q Net sales 26,4 24,6 EBIT 1,4 1,2 Order intake - Project deliveries - Technology services Order book - Change

23 Income statement, Balance sheet and Key figures Income statement, MEUR Net sales 26,4 24,6 127,3 EBIT 1,4 1,2 8,1 Financial income and expenses -0,1 0,2-0,0 Profit before tax 1,3 1,4 8,1 Income tax -0,4-0,3-1,4 Profit for the period 0,9 1,1 6,7 Key figures Earnings per share (EPS), EUR 0,22 0,27 1,65 Operating cash flow, MEUR 1,9 9,0 7,5 Return on investment (ROI), % 19,0 19,4 28,5 Gearing, % -21,4-44,1-16,8 Equity ratio, % 56,5 52,6 58,5 Personnel in books Balance sheet, MEUR Intangible assets 1,5 3,5 1,6 Property, plant and equipment 9,0 8,0 8,5 Other non-current assets 0,7 0,7 0,7 Inventories 10,0 8,5 9,6 Accounts receivables and other receivables 27,7 19,8 34,8 Cash and cash equivalents 9,2 13,1 6,5 Total assets 58,1 53,7 61,8 Equity 27,9 23,3 29,7 Non-current liabilities 0,6 1,6 0,7 Advance payments received 8,7 9,3 11,0 Current liabilities 20,9 19,5 20,3 Total equity and liabilities 58,1 53,7 61,8 23

24 Order intake MEUR Q1 Q2 Q3 Q4 Project deliveries 27 % Technology services 73 % North America 18 % South America 11 % Asia- Pacific 6 % Europe 53 % Russia 12 % 24

25 MEUR Order book Q1 Q2 Q3 Q

26 Net sales MEUR Q1 Q2 Q3 Q Project deliveries 67 % North America 16 % South America 3% Asia- Pacific 6 % Technology services 33 % Europe 61 % Russia 14 % 26

27 EBIT Earnings per share EBIT MEUR 10,0 Earnings per share EUR 2,00 Earnings per share Dividend Return of equity 8,0 6,0 4,0 2,0 0,0 1,50 1,00 0,50 0,00-2, ,

28 Investing in the future MEUR 6,0 Capital expenditure R&D capital expenditure R&D costs Capital expenditure of net sales, % R&D spending of net sales, % 6% 5,0 5% 4,0 4% 3,0 3% 2,0 2% 1,0 1% 0, % 29

29 Return on investment (ROI) Return on equity (ROE) Return on investment (ROI) Return on equity (ROE) 30% 25% 20% 15% 10% 5% 30% 25% 20% 15% 10% 5% 0% 0% %

30 Equity ratio Gearing Equity ratio 60% 50% 40% 30% 20% 10% Gearing 0% -10% -20% -30% -40% -50% 0% %

31 Personnel 700 Personnel, average Effective headcount, average

32 Shareholders Number of shareholders Ownership on March 31, Companies 3,1 % Management 5,8 % Institutions 8,2 % Nominee-registered 3,2 % Foreign 0,1 % Households 79,8 %

33 Market cap Market cap, MEUR Share price, EUR 18,0 Closing price of the period Average price ,1 62,9 16,0 14,0 14,12 15, , ,0 27,8 29,3 10,0 8,0 9,00 6,95 7,30 6,0 20 4,0 10 2, , Series K shares valued at the value of series A shares. 34

34 Outlook 2016 Business environment Uncertainty continues in the global economy and financing markets Maintains uncertainty in the development of the market situation of plywood and LVL industries However, several mill-scale and production line investment projects in planning phase. Raute estimates improvement investments in plywood and LVL industries to be at a reasonable level in 2016 Demand for technology services continues strong. Raute Raute s net sales and operating profit for 2016 are expected to remain at the same level as in 2015 Good opening order book Forecasted development of market situation. 35

35 Thank you for your interest! Contact: Tapani Kiiski, President and CEO tel Follow us LinkedIn: Raute Oyj Youtube: Facebook: Raute Corporation 36