Tapani Kiiski's comments on the financial statements release published on February 12, 2021
Improvements seen towards the end of the year as the pandemic continued
Our fourth-quarter net sales were the highest during the year under review. The result fell short of our target, however, and was not enough to make up for the losses of the first half of the year and bring the full year into positive territory. Our net sales were lower than our targets, due largely to the more difficult delivery of installation supervision and commissioning and maintenance services caused by the travel restrictions, which are still in effect. In our North American locations, we were forced to continue our adaptation measures for several weeks. In this respect, the situation in our locations in Finland and China was better.
Since spring, the uncertainty caused by the coronavirus pandemic continued to have a strong impact on our customers’ investment decisions and thus on our order intake. Q1’s relatively good order intake included orders that had, for the most part, been negotiated almost fully before the start of the coronavirus crisis. In Q2 and Q3, many of our customers put off their plans and orders, based on the uncertainty of their market situations. The number of actual cancellations was low, however, so when the situation settles, I anticipate that the postponed projects may restart, perhaps even at short notice.
In early October, we successfully concluded long and, due to the circumstances, exceptional negotiations and confirmed an order worth almost EUR 55 million to Russia. As a result, our outlook for 2021 became much clearer and our order book is still strong. In Russia, demand and project planning is even more active. China was the only market area in which activity has returned to a somewhat normal level. Our mill in China was operating normally and our customers’ projects continued to move forward. Project preparation is also active in Europe and North America, but decision-making is exceptionally uncertain.
As we have consolidated in our main locations the kind of expertise that is often required for special maintenance, project installation supervision and commissioning, the travel restrictions inconvenienced us and our customers globally. In spite of this, we successfully carried out a variety of these services with the help of remote work arrangements. I expect that these restrictions will unfortunately persist, which is why we will increase our local resources. We will furthermore increase our focus on providing these services remotely, and this applies to both tools and expertise. The overall impact of the coronavirus pandemic on our net sales and especially our operating profit can still be described as substantial.
Due to the pandemic, our markets have developed more and more in a direction that we have anticipated. This underscores the importance of our strategic goals – growing the emerging market share, developing the technology service business and investing in digitalization. We will thus continue to focus on these areas. Our strong balance sheet, market position and long-standing customer accounts are important competitive advantages and enablers of this type of long-term work. We will succeed in this together with our personnel, customers and other partners, and we will come out of this crisis even stronger as the leading company in our industry.
I would like to express my sincerest thanks for the past year to Raute’s customers for their invaluable cooperation and trust, to our personnel for their good work and strong commitment in extraordinary circumstances, to our shareholders for their continued confidence in us, and to all our other partners for their contribution to helping Raute adapt to a rapidly changing operating environment.