Financial information

Tapani Kiiski's comments on the Interim Report published on April 29, 2021

Better days ahead

In the first quarter of 2021, our net sales were only slightly higher than they were in the comparison period. Although the result improved somewhat in relation to net sales, it was nevertheless negative. As we predicted, the timing of our confirmed order book did not increase net sales in the first quarter in a way that would have boosted our result to an acceptable level. 

The travel restrictions imposed due to the coronavirus pandemic continue to hinder the implementation of installation supervision and commissioning and maintenance services. However, the removal of these restrictions bit by bit as vaccinations progress is creating optimism that business activities will gradually begin to normalize this year. At the same time, I am pleased with the abilities demonstrated by our customers and our personnel to continue working using remote connections. The lessons learned will improve both our ability to serve our customers and our flexibility also in the future. 

Demand picked up in several market areas in the first quarter. Our first-quarter order intake, at EUR 30 million, was at least at a reasonable level, especially considering that no large mill-scale orders were received during the period. I am pleased that mid-sized line orders and modernization orders were at a good level. For the first time in a while, North America was our largest market area in terms of order intake. The order intake for technology services was also at a good level. 

A large order of nearly EUR 55 million that we received from Russia in early October 2020 puts our order book on a solid footing for this year. With the orders we have now received, our already strong order book grew, which strengthens our outlook for the rest of the year. At our main production facility in Lahti, we have been able to operate at near-normal capacity throughout the pandemic. Of course, the various precautionary measures are hindering development projects in particular. Of our operating areas, China is the only one where activity has returned to a somewhat normal level. Our facility there was operating normally and our customers’ projects continued to move forward. Travel to China is still restricted due to the pandemic. This hinders the collaboration of Raute’s experts from different locations in implementing projects in China, as well as in sales and development projects. At our North American facilities, the operating restrictions are currently being lifted thanks to the coronavirus vaccinations. 

The raw material market is now heating up, which is creating uncertainty. There is pressure to raise the prices of raw materials and components, not to mention uncertainty in their availability and delivery times. Our operational organization is addressing these challenges, and I believe that we will find solutions to this situation together with our partners. 

The pandemic’s impact on the development of our markets has been in line with our predictions. Accordingly, we will continue to invest in our stated strategic priorities, the emerging markets and the development of our technology services business and digitalization. Our strong financial position and market position, as well as our long-standing customer relationships are important competitive advantages and enablers of this type of long-term work.  

Our outlook for 2021 remains unchanged, and we expect our net sales to grow and our operating result to improve from last year.