Annual General Meeting 2012

Transcription

1 Annual General Meeting 2012 Sibelius Hall, Lahti, 16 April, 2012 Raute Corporation Tapani Kiiski, President and CEO

2 Future success in our own hands Raute s business environment 2011 Strategy Financial statements 2011 Outlook Raute as an investment

3 Raute s business environment 2011

4 Raute adds value to its customers business by supplying solutions for manufacturing wood products in a profitable and environmentally sustainable way. Project deliveries: Raute and the market Raute s customers are plywood, veneer and LVL mills, the smallest of which are private family businesses, while the largest are a part of large consolidated forest groups producing not only plywood and LVL, but also e.g. pulp, papger and sawn timber. Investments in veneer, plywood and LVL production technology are some EUR million a year. Mill-scale projects, separate production lines, machinery and equipment Automation, machine vision, measuring technology Technology services: Consultation and business support services Maintenance and spare parts Modernizations Raute is a global market leader as a supplier for new capacity in the plywood and LVL industry Raute s market share of all machine investments in the plywood industry is estimated at percent. Raute has a particularly strong market position in the LVL industry, as approximately half ot the LVL manfucactured in the world is produced with machines supplied by Raute. 4

5 Plywood market Plywood production and consumption 2000, 2005 and 2010 (million m 3 ) Plywood production by market area in 2000, 2005, 2009 and Pohjois-Amerikka Eurooppa ja Afrikka Venäjä Etelä-Amerikka Kiina Muut APAC maat 5

6 Raute part of the wood processing values chain PEELING The blocks are peeled into a veneer ribbon on the peeling line. The veneer ribbon is clipped into sheets and randoms, i.e. pieces of veneer smaller than a full sheet. The sheets are sorted according to size and moisture content in order to speed up the drying process. DRYING The veneers are dried on the drying line and sorted according to size, technical and visual quality, moisture and strength. Some of the dried veneers are ready for lay-up, but some, usually around half, require further processing before they can be utilized for plywood. LAY-UP The veneers are fed through the glue applicator in an order based on the plywood structure and then laid up in stacks. The volume of glue used significantly affects the quality of the plywood as well as the costs involved. PRESSING The laid-up stacks are cold pressed in a pre-press. The pre-pressed panels are fed into a multi-daylight hot press where the glue cures. One panel is fed into each daylight and they are pressed into plywood panels under high pressure and heat. LOG HANDLING On the log handling line, the logs are soaked, debarked and cut into blocks which are transferred onto the peeling line. The soaking temperature affects the quality of the veneer which is to be peeled. VENEER HANDLING Short veneers are jointed if necessary into longer sheets. Narrow or defective veneers are composed into wider sheets according to the dimensions required for the plywood being produced. The appearance of knotted sheets is improved through patching, allowing them to be used as surface veneers. Knot-free and unblemished veneers can also be used as surface veneers when they are composed into large sheets Raute s technology for wood product production PANEL HANDLING The pressed panels are finished by puttying any defects, trimming the edges, and by sanding the surfaces to achieve smoothness and the required panel thickness tolerances. Following this, the panels are graded and packaged for transportation. In further processing, overlays can be pressed onto the panels surface, depending on their end use, or the plywood can be sawn into specialty-sized panels. Furniture Construction, interior decoration Transport, packaging 6

7 Changes offer opportunities Europe Developing current capacity Africa Local further processing of wood Russia Upgrading production technology Exploiting forest resources Export products Trends Renewable wood as raw material on rise Environmental awareness to increase and regulations to tighten More cost-efficient manufacturing methods necessary to face tightening competition Energy prices up Emerging markets to play a greater role Asia-Pacific area Plantation forest resources In China, increased quality requirements and industrialization South America Plantation forest resources Modernization North America Replacement investments, when economy recovers From Raute s perspective Increasing use of wood boosts for demand for wood proucts technology Emerging markets to play a greater role Raute must identify individual customer needs and be able to offer, in addition to state-of-the-art technology, solutions where automation is not a decisive factor creating a competitive edge. Technology services to increase their share, especially in traditional markets 7

8 Strategy

9 Raute s objectives Strategic objectives Continuous improvement of profitability Better adaptation to cyclical economic fluctuations Controlled growth Adaptation to cyclical economic fluctuations Growth Profitability Financial goals Good profitability over the entire economic cycle Growth faster than the market Good financial solvency Competitive return toe investors Profitable solutions for all customer needs. 9

10 The preferred solution provider with attractive offerings to meet different customer segment needs globally Adaptation to cyclical economic fluctutation Strategy The trusted local life cycle partner for production process optimization Growth Among three leading suppliers in selected emerging markets through targeted product range Profitability Profitable solutions for all customer needs Cost-efficient and agile processes with good quality across the global network Preferred company for competent people to achieve together 10

11 Strategy implementation Customer focus Account-based operating model was developed and extended through training Technology services New modernization products were developed Local service ability was strengthened in Russia, Chile and Australia Emerging markets Products aimed at the emerging markets to the RautePro product family and the Chinese market Cost efficiency Productivity improvement thoroughly modernized key production machine and automatization of work stages Efficiency and internal communication through renewed IT systems Hunger for success Remuneration and competence development 11

12 Financial statements 1 January 31 December February 2012 Tapani Kiiski President and CEO

13 Market Business environment: The upswing in demand for plywood seen early in the year leveled out during the summer and in a few market areas demand fell again at the end of the year Utilization rates of customer mills mainly at a good level Market situation continued difficult in North America Investment decisions on large projects under preparation deferred schedule changes typical of investment projects general uncertainty in economy financing terms became more difficult Raute: Demand at the normal level considering the market situation Order intake up 7% Majority placed at the beginning and end of the year Focus on smaller pojects, modernizations and other technology services Demand for spare parts and maintenance services increased Competitive situation is good 13

14 Market areas 2011 Production capacity diminished in the European and North American markets focus on developing the competitiveness of the remaining production capacity. China s plywood production growth achieved through local machinery and manual production method. Investment decision made in South America for doubling the capacity of a large plywood mill. Russia to become Raute s largest market area focus on development projects and modernizations for existing capacity. 14

15 2011 in brief MEUR Net sales 74,3 62,9 Operating result -0,7 1,3 Operating profit excl. non-recurring items Order intake: project deliveries technology services , Net sales grew 18% Technology services +42% Operating result excluding nonrecurring items improved 2,4 MEUR remained however in the negative Additional costs of some projects, mainly in Q1 Strong fluctuations in demand Order book

16 Income statement and key figures MEUR Net sales 74,3 62,9 Operating result -0,7 1,3 Financial income and expenses -0,4-0,2 Profit before taxes -1,1 1,1 Income taxes 0,0 0,0 Profit for the period -1,1 1,2 Earnings per share, EUR -0,27 0,29 Operating cash flow 2,5-6,1 Return on investment (ROI), % -0,1 5,1 Gearing, % -47,1-39,8 Equity ratio, % 46,9 50,7 Personnel (in books)

17 Balance sheet MEUR Intangible assets 1,4 1,3 Property, plant and equipment 8,2 8,9 Other non-current assets 2,9 2,3 Inventories 5,1 4,6 Accounts receivables and other receivables 9,3 11,8 Cash and cash equivalents 25,7 24,1 Total assets 52,7 53,0 Equity 22,1 24,2 Non-current liabilities 11,1 10,4 Advance payments received 5,6 5,2 Current liabilities 13,9 13,2 Total equity and liabilities 52,7 53,0 17

18 Order intake MEUR Q1 Q2 Q3 Q

19 MEUR Order book Q1 Q2 Q3 Q

20 Net sales MEUR Q1 Q2 Q3 Q

21 MEUR Net sales development, Technology and services Projecect devlieries/industry Technology services Plywood LVL

22 Net sales development, Market areas MEUR EMEA CIS APAC NAM LAM

23 Year 2011 by market area Order intake Net sales South America 6% South America 26% Russia 38% Europe 26% Russia 35 % Europe 26% North America 8% Asia-Pacific 2 % North America 8% Asia-Pacific 25 % 23

24 Operating result MEUR ,0 5,0 0, ,0-10,0-15,0 24

25 Investing in the future MEUR 8,0 Capital expenditure Capital expenditure of net sales, % R&D expenditure R&D costs R&D expenditure of net sales, % 8% 7,0 7% 6,0 6% 5,0 5% 4,0 4% 3,0 3% 2,0 2% 1,0 1% 0, %

26 Return on investment (ROI) Return on equity (ROE) 40% 1-12 ROI 1-12 ROE 30% 20% 10% 0% -10% -20% -30% -40%

27 Equity ratio and gearing 80% Equity ratio Gearing 60% 40% 20% 0% -20% -40% -60% -80%

28 Number of personnel 700 Personnel, average Effective, average

29 Outlook

30 Outlook for 2012 Business environment: Uncertainty related to the development of world economy and financing markets Demand for investments and services of the wood products industry is not expected to recover in the near future Improvement investments to maintain quality and keep market shares will remain at a reasonable level Production line and mill scale investment projects under planning, implementation and schedule uncertain Raute: Satisfactory order book at the beginning of the year Uncertainty related to implementation and schedule of projects under negotiation Changes typical of project business Uncertainty related to market trend Availability of financing An order of more that 50 million euros to Chile improves outlook significantly Profit outlook for 2012 Net sales will increase significantly Operating result will be clearly positive 30

31 2012 situation and outlook Order book and net sales generation dominated by large orders order received in November to Latvijas Finieris mill in Kohila, Estonia order received in December to CMPC mill in Mininco, Chile order received in February to Arauco s Nueva Aldea mil, Chile 31

32 Large mill-scale project Order effective Deliveries At the beginning, work empasizes in engineering, the importance of which is high, however, low generation of costs and net sales according to the percentage of completion Purchases, production and subcontracting generate most of the net sales Every large project has its own special features Installation and supervision Guarantee to start > 32

33 Quarterly order intake High fluctuations typical In near history: strong fluctuation in order intake in periods of two quarters delay from a period of good order intake to a period of high net sales also approximaltey two quarters Quarterly net sales 33

34 Raute as in investment

35 Higher shareholder value Reaction and adaptation to changing market conditions and trends of the industry and the environing world Solid and long-term ownership Impeccable corporate governance and communication Predictability Stock exchange quotation Long-term dividend policy 35

36 Shareholders Number of shareholders Ownership at Dec. 31, Institutions 11,8 % Nominee-registered 1,5 % Foreign 0,1 % Companies 4,3 % Management 7,2 % Households 75,1 % 0 36

37 Market value Market value, MEUR Share price, EUR 16,0 Closing price at Dec. 31 Average price 14,0 14,35 12,0 10,0 9,70 8,0 6,0 6,40 7,47 6,20 4,0 2,0 0, Series K shares valued at the value of series A shares. 37

38 Earnings per share EUR 2,00 Earnings per share Dividend 1,50 1,00 0,50 0,00 *) -0,50-1,00-1,50-2,00-2, *) Board of Directors proposal to the AGM to be held on 16 April

39 Thank you for your interest!