From the CEO

July 31,  2018

The second quarter was good, in line with our expectations, both for net sales and the operating profit. Net sales came to approximately EUR eight million more than in the first quarter. Our result also improved thanks to net sales, as we predicted. A strong order book and its timing played a part in this development. Even large quarter-on-quarter fluctuations are normal for Raute's project business and we will continue to experience similar movements over the second half of the year. 
Demand for our technology and services continues to be strong. Demand is still focused on the traditional industrialized markets and especially on Europe. On the emerging markets, demand is looking up but still clearly leans towards more simple and inexpensive technology.
Our order intake in Q2 was lower than in the first quarter. The EUR 28 million order intake is still quite an achievement considering the lack of mill projects. Our order intake in technology services fell short of our target due to the postponement of some major modernization projects. The good market situation is causing some of our customers to invest in new equipment rather than modernizing their old equipment.
Due to high net sales and a normal order intake level, our order book fell to EUR 127 million. Despite the decline, this is a good level and our order book remains strong. A major proportion of it is scheduled for next year and a small fraction for 2020. We have succeeded in further increasing our production capacity and are able to serve our customers with reasonable delivery times. Strong economic growth in Finland is beginning to manifest itself as cost pressure and increasing challenges in terms of the availability of resources. Our goal is to preemptively minimize any harm that could result for our customers and our business. The uncertainty that has recently spread to global trade policies has not, so far, made its mark on our customers' operations. Even during this period of heavy workload and brisk demand, we will continue to invest in developing new technologies, our service business and our presence and offering on the emerging markets. 
H1's realized net sales and operating profit, strong order book and continued active demand reinforce our outlook for the whole year and provide insight into the next year also. We are well on the way to reaching our goals for this year. Raute's net sales and operating profit for 2018 are expected to be at the previous year's level. 

Tapani Kiiski
President and CEO