Raute Corporation Annual General Meeting2013

Transcription

1 Sibelius Hall, Lahti, 8 April, 2013 Tapani Kiiski, President and CEO Raute Corporation Annual General Meeting2013

2 Raute 2012: Solid proof of delivery and performance capabilities Business environment2012 Strategy Financial statements 2012 Outlook Raute as an investment

3 Raute s business environment 2012

4 Raute and the market Raute is a technology and services company that serves the wood products sector globally Plywood consumption by market area in 2011 (Total 81.6 million m 3 ) EMEA 13% NAM 18% LAM 4% Rest of APAC 16% CIS 3% China 47% Wood products industry Markets estimated at some EUR 150 billion a year Plywood industry s market some 30 billion a year Investments in veneer, plywood and LVL production technology are some EUR million a year in normal market and financial situation Plywood production by market area in 2011 (Total 84.2 million m 3 ) NAM 13% LAM 5% CIS 4% EMEA 6% Rest of APAC 18 % China 54 % 4

5 Plywood production and consumption Plywood production and consumption in 2000, 2005, 2010 and 2011 (million m 3 ) Production Consumption Plywood consumption by end use category 2011 Total 81.6 million m 3 Flooring 5 % Transport 6 % 5 Packaging 11 % Other 14 % Furniture 28 % Construction 36 % Plywood production by market area in 2000, 2005, 2010 and NAM EMEA CIS LAM China APAC (excl. China) Total

6 Plywood quality and process management 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. 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. 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. PRESSING The laid-up stacks are cold pressed in a prepress. 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. 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. 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. 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. PLYWOOD Plywood is a panel made of glued veneers, laid-up cross-wise and hot pressed. Plywood has a strong position in applications where structural strength and resistance to moisture, impact resistance and an attractive appearance are required. Plywood is used especially in construction, furniture and in the transport and packaging industries. 6

7 Project deliveries: Mill-scale projects, separate production lines, machinery and equipment Automation, machine vision, measuring technology Raute as a part of the woodprocessing value chain Raute s solutions Technology services: Consultation and business support services Maintenance and spare parts Modernizations Raute adds value to its customers business by supplying solutions for manufacturing wood products in a profitable and environmentally sustainable way. Raute s customers Veneer industry Plywood industry LVL industry Veneer, plywood and LVL are mainly used in construction and furniture and also in transport vehicle and packaging industries 7

8 Raute as part of the wood-processing value chain The value of the global wood products industry market is approximately EUR 150 billion. Demand and profitability are influenced by the general increase in the standard of living, construction regulations, availability and price of wood and economic cycles. The industry is experiencing growth particularly in the emerging markets. The wood products industry is investing in production technology in order to boost production efficiency and improve end-product quality. Investment activity is at its highest level at the end of a business cycle. New production capacity is being constructed especially in the emerging markets and for LVL. Customers use Raute s solutions to produce veneer, plywood and LVL (Laminated Veneer Lumber), which are used mainly in construction and furniture and in the transport vehicle and packaging industries. Demand for veneer-based products is on the increase worldwide. Sustainable and environmentally friendly, wood is a significant renewable raw material which is constantly gaining popularity in construction, for example. Raute supplies the wood products industry with machinery and equipment for the profitable and environmentally sustainable production of wood products. With Raute s solutions, the customer can improve the efficiency of raw material use and labor productivity, reduce the consumption of energy and chemicals, enhance end-product quality and minimize the environmental load throughout the entire life cycle of the production machinery. 8

9 Plywood production by market area Raute s position Growth opportunities 13% Focus on emerging markets EMEA (Europe and Africa) Europe is a developed market with a generally high level of production technology The biggest operator. The objective is to maintain the leading position and to deepen cooperation with customers in order to boost their production processes in the long term. Production efficiency and quality improvements. 6% 4% 54% CIS (Venäjä) Large raw material reserves and developing economy. Large raw material reserves and developing economy. The market leader-. Extensive forest resources and developing economy. Technology services. NAM (North America) The world s largest LVL producing area and the world's second largest plywood manufacturing area Investments mainly consist of modernization projects to boost efficiency and replacement investments. To strengthen its position through automation expertise. Comprehensive strategic investments of customer industries and technology services.. 5% LAM (South America) One of the biggest growth areas in plywood production. Strong position in Chile and deliveries to Brazil. Structure of local forest industry, abundant plantation wood resources and investments in products with a high degree of processing. CHINA The world s largest producer of plywood Production highly based on manual labor, simple technology and local manufacturers. To become a significant operator. Higher quality requirements. 18% APAC (REST OF THE ASIA-PACIFIC AREA) Strong shift from naturl forests to plantations. The strength: Processing of raw material from small-diameter plantation trees. New growth ofp lywood production enagled by plantation forests.. 9

10 Customer needs We ascertain the customer s objectives. We assist the customer in profitability calculations and support them in their investment decisions, for example through market research. If necessary, we perform tests using the customer s raw materials. We offer customers solutions that best suit their needs. The negotiation phase can take from a few months up to several years. New order The order becomes effective according to the terms of the sales contract, typically from the transfer of the advance payment and letter of credit. Delivery period begins. Selection of the project manager and the project team leaders: chief mechanic. engineer chief automation engineer manufacturing designer purchaser person in charge of install. and commissioning. Confirmation of budget and timetable for the execution. Drawing up of the production plan for the entire project execution. Implementation of a large project Planning Drawing up of the line s operational description, which provides important data for the design phase. Definition of customerspecific change requirements for machines and equipment. Drawings and parts lists, automation plans and programs and operating and maintenance instructions drawn up for the machines and equipment contained in the delivery. Drawing up of material required for the customer s training Production Purchasing of the materials required in the machines and equipment. Raute manufactures part of the delivery itself and commissions part of it through its partners Raute is responsible for the assembly and electrification of the machines and equipment. 2-5 months Testing The key machinery is tested using the customer s raw material. The machines are presented to the customer s personnel, followed by training 1-2 months Maintenance Raute is responsible for the maintenance and spare parts for the machines and equipment. Machines and equipment included in the maintenance contract are serviced regularly. 1-3 monts 1-2 montsh 2 months 2 months 2-4 months Transportation and istallation The machines and equipment are packed in in freight containers for transportation. The containers are shipped and transported to the installation site. The customer s installers install the machines under the supervision of Raute s experts. Raute oversees the installation.. Start-up The machines are started up under production conditions, using local raw materials. The customer s personnel receive training. A safety inspection is carried out, in addition to capacity and quality testing. The warranty period begins.. 10

11 Strategy

12 Profitable solutions for all customer needs The preferred solution provider with attractive offerings to meet different customer segment needs globally The trusted local life cycle partner for production process optimization Among three leading suppliers in selected emerging markets through targeted product range Cost-efficient and agile processes with good quality across the global network Preferred company for competent people to achieve together 12

13 Customer needs: Strategy implementation 2012 Product development focused on RautePro and RauteSelect product families Technology services: Strengthened service business organization Maintenance center established in Latvia Resources of St. Petersburg maintenance center strengthened Operating methods and organization developed in North America Emerging markets: Investments made in developing products aimed at emerging markets Cost-efficiency Organization-wide Särmä (Edge) quality development project initiated Expansion of partnership networks to new areas Increased production capacity in China Hunger for success Work environment and personnel management developed through the Great Place to Work project New intranet launched to improve the sharing of information within the organization 13

14 Särmä gives working culture an edge Raute s objective is continuous learning and development. During 2012, a comprehensive change project was launched for developing Raute s working methods and culture and for achieving the commitment of the entire personnel to the customer promise and to the quality of products, services and operations. The aim is to develop operations according to five priorities. Projects concerning personnel management included the development of supervisory work and work community skills. Other areas include customer work, project work and communications. Raute s entire personnel are involved in the Särmä project. The project will continue in CUSTOMER WORK COMMUNICATIONS WORK COMMUNITY SKILLS PROJECT WORK SUPERVISORY WORK 14

15 Financial statements 1 January 31 December 2012

16 Markets Business environment: Uncertainty with the development of the financial markets and the global economy continued throughout the year. Market outlook for wood products industry uncertain in several market areas. Utilization rates in the wood products industry remained at a good level. Several large projects pending; Implementation conditional to: confidence on the development of demand to remain and strengthen success in arranging the financing. Raute: Order intake up 51%. Two significant orders in February, a MEUR 50 order for the machinery and equipment for a plywood mill in Chile in July, a MEUR 14 order for the machinery for an LVL mill in Germany. Technology services at the same level as in the previous year amount of modernizations down, especially in Russia. spare parts and maintenance services increased 10%. 16

17 Year 2012 in brief MEUR Net sales Operating result Order intake: project deliveries technology services Order book Net sales grew significantly, 36% Mill scale projects had a big contribution on net sales growth Operating profit 5%. Profitability improved by increased net sales lighter cost structure. Order book at a good level. 17

18 Income statement and key figures MEUR Net sales Operating result Financial income and expenses Result before taxes Income taxes Result for the period Earnings per share, EUR Operating cash flow Return on investment (ROI), % Gearing, % Equity ratio, % Personnel (in books)

19 Balance sheet MEUR Intangible assets Property, plant and equipment Other non-current assets Inventories Accounts receivables and other receivables Cash and cash equivalents Total assets Equity Non-current liabilities Advance payments received Current liabilities Total equity and liabilities

20 Year 2012 by market area Order intake Net sales South America 48% Russia 12% Asia-Pacific 3 % North America 6% Sourth America 52% Russia 14 % Asia-Pacific 4 % North America 8% Europe 31% Europe 22% 20

21 Order intake MEUR Q1 Q2 Q3 Q

22 MEUR Order book Q1 Q2 Q3 Q

23 Net sales MEUR Q1 Q2 Q3 Q

24 MEUR Net sales development, Project deliveries and technology services Project deliveries/industry Plywood LVL Technology services

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

26 Operating result MEUR ,0 6,0 4,0 2,0 0,0-2, ,0-6,0-8,0-10,0-12,0 26

27 Investing in the future MEUR 9,0 Capital expenditure Capital expenditure of net sales, % R&D expenditure R&D costs R&D expenditure of net sales, % 9% 8,0 8% 7,0 7% 6,0 6% 5,0 5% 4,0 4% 3,0 3% 2,0 2% 1,0 1% 0, %

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

29 Equity ratio and Gearing Equity ratio Gearing 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% -60% -70% -80%

30 Number of personnel 700 Personnel, average Effective, average

31 Outlook

32 Outlook 2013 Business environment: Uncertanty still continues with the development of the global economy and financial markets. Uncertainty concerning the market situation of Raute s customers is reflected in investment decisions. Improvement investments at a reasonable level, provided that the economic uncertainty does not spiral into a new crisis. Production line and mill-scale projects are being planned; however, their implementation and timing is uncertain. Raute: Heading into 2013, order book at a good level. Uncertainty with the markets of Raute s customer industries is reflected in the volume of new orders. Growth targets in the volume of new orders in Technology services Russia Asia. Based on a strong opening order book and projects in the negotiation phase, Raute s net sales and operating profit for 2013 are expected to remain at the same level as in

33 Raute as an investment

34 Clearly defined strategy and regular evaluation and adjustment of it according to changes in the business environment 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 Higher shareholder value 34

35 IR relations Stock exchange releases in : Raute received orders valued at over MEUR 50 from Chile : Financial statements bulletin : Decisions of the Annual General Meeting : Interim report : Raute received a MEUR 14 order from Germany : Interim report : Change in Raute s Executive Board : Interim report Total 21 IR events Participation in SijoitusInvest 12 event Nearly 300 participants Share price (EUR) March May July September Novermber Turnover (shares) March May July September Novermber Share price development (RUTAV) and share turnover

36 Shareholders Number of shareholders Ownership at Dec. 31, Management 5.8 % Companies 5.1 % Institutions 10.7 % Nominee-registered 3.3 % Foreign 0.2 % Households 74.9 %

37 Market value Market value, MEUR Share price, EUR 14,0 Closing price at Dec. 31 Average price ,0 10,0 8,0 6, , , ,0 15 4, , , Series K shares valued at the value of series A shares. 37

38 Earnings per share EUR 1,50 Earnings per share Dividend 1,00 0,50 0,00-0,50 *) -1,00-1,50-2,00-2, *Board of Directors proposal to the Annual General Meeting on 8 April

39 With Särmä attitude to 2013!

40 Thank you for your interest!