Raute Corporation, Stock exchange release, May 7, 2025, at 8:30 a.m. EEST

Raute Corporation’s Business Review January 1–March 31, 2025: Continued strong profitability and operational execution

This is a summary of Raute’s Business Review January 1–March 31, 2025. The full review is as a PDF file attachment in this release and is also available on the company's website at www.raute.com.

RAUTE CORPORATION – BUSINESS REVIEW JANUARY 1–MARCH 31, 2025

Figures in brackets refer to the same period a year earlier. Figures are unaudited and rounded to the nearest whole number.

January−March 2025 in brief

-          Order intake was EUR 15 million (36)

-          Order book was EUR 146 million (259) at the end of the reporting period

-          Net sales were EUR 51.9 million (44.7)

-          Comparable EBITDA was EUR 7.4 million (3.0), representing 14.3% (6.7) of net sales

-          Operating profit was EUR 5.9 million (1.5)

-          Earnings per share were EUR 0.69 (0.20)

-          Equity ratio was 53.7% (49.7)

Review from Mika Saariaho, President and CEO

Raute had a strong start to the year as our comparable EBITDA reached an all-time high in the first quarter of 2025. This was once again driven by excellent operational execution, demonstrating that we have the capabilities to operate in a high-volume business environment and deliver large projects successfully.

In the first quarter of 2025, Raute’s comparable EBITDA reached EUR 7.4 million, representing a margin of 14.3%, and net sales were EUR 52 million. This quarter was also the second time we exceeded our long-term target of 12% comparable EBITDA margin since setting the targets in March 2023. The Wood Processing business continued its strong operational execution and efficiency, while performance in the Services business remained at a reasonable level. The Analyzers business showed a profit compared to a loss in the comparison period despite the exceptionally challenging market environment.

Our order intake slowed in the first quarter after a more promising fourth quarter. This, unfortunately, confirms our earlier prediction that a sustained market recovery has not yet taken place. The recent turbulence in global trade, imposed tariffs, and subsequent counter-tariffs have increased uncertainty and indeed pushed the market recovery even further ahead.

Nevertheless, Raute still has a reasonable order book. While the challenging market environment and related uncertainty are universal in our industry, I am confident we can capture new business opportunities in the engineered wood segments given our strong and long-term relationships with customers once the market recovers.

Looking into the rest of this year, we raised our comparable EBITDA guidance for 2025 in April. This reaffirms the message that Raute has the building blocks in place for another good year and we are making good progress towards our strategic targets. In addition, we have demonstrated that we have enhanced our operational and commercial capabilities as well as the ability to offer digitalized and AI-based solutions.

BUSINESS ENVIRONMENT

The demand for end-user products of Raute’s customers increased slightly in the first quarter of 2025 from last year despite the uncertainty in construction markets. However, at the same time, the prices of the end-user products have been declining mainly due to the increasing export of cheaper end-user products from China and Brazil. The demand for softwood plywood continues to suffer from the slow construction market, and the declining interest rates have not yet created an upward turn in the housing market.

The demand for hardwood plywood and LVL (laminated veneer lumber) has remained more stable, and the demand for special applications in niche market segments like LNG (liquid natural gas) vessels has strengthened the demand for birch plywood. The market demand for European birch plywood is also supported by EU sanctions against the entry of Russian birch plywood into the European market.

The global investment sentiment has become increasingly uncertain during the first quarter due to the turbulence in global trade and tariffs. The North American market, in particular, was paralyzed towards the end of the review period and many of Raute’s customers postponed their investment decisions. The war in Ukraine continues to impact the market sentiment in Europe, and the increased geopolitical tension is causing turbulence in the Asia-Pacific region and China.

Overall, the recent developments have had a negative impact on the investment activity of Raute’s customers worldwide. Our customers continue to be in wait-and-see mode in terms of making firm investment decisions. A wider recovery in Raute’s markets seems to be postponed well into the latter part of 2025.

GUIDANCE STATEMENT FOR 2025 (updated April 25, 2025)

Raute’s 2025 net sales are expected to be between EUR 190–220 million and comparable EBITDA between EUR 20–27 million.

The rationale for the new guidance:
Raute’s project deliveries have progressed better than anticipated, which has led to positive profit development during the first quarter. Therefore, Raute raises its guidance on profit for the full year. The order backlog previously received by Raute has supported positive business development despite the low new order intake in the first quarter due to the exceptionally challenging market environment.

Previous guidance statement (published February 13, 2025):
Raute’s 2025 net sales are expected to be between EUR 190–220 million and comparable EBITDA between EUR 17-24 million.

RAUTE CORPORATION
Board of Directors

BRIEFING

A result briefing for analysts, investors and the media will be organized at Eliel studio in Sanomatalo, Töölönlahdenkatu 2, Helsinki on the same day May 7, 2025, at 2:00 p.m. The business review will be presented by President and CEO Mika Saariaho and CFO Ville Halttunen. The presentation material will be available at www.raute.com > Investors > Financial information > Result center after the briefing.

The event will be held in English, and it can also be followed by a live webcast at https://raute.videosync.fi/q1-2025. After the presentation, it is possible to ask questions via chat. The recording of the event will be available on the company’s website later the same day.

NEXT REPORT:
Raute Corporation’s half-year financial report January 1-June 30, 2025, will be published on Tuesday, August 12, 2025.

FURTHER INFORMATION:
Mr. Mika Saariaho, President and CEO, tel. +358 40 154 9393
Mr. Ville Halttunen, CFO, mobile phone +358 50 346 0868

DISTRIBUTION:
Nasdaq Helsinki Ltd, Main media, www.raute.com

RAUTE IN BRIEF - Making Wood Matter
Raute is the partner to future-proof the wood industry. Our technologies cover different production processes with supporting digital and analytics solutions for engineered wood products. Additionally, we offer a full-scale service concept ranging from spare parts to regular maintenance and modernizations. Our innovative hardware and software solutions are designed to support our customers’ efficient consumption of natural resources. In mill-scale projects, Raute is a global market leader both in the plywood and LVL industries. Raute’s head office and main production plant are located in Lahti, Finland. The company’s other production plants are located in Kajaani, Finland, the Vancouver area of Canada, Changzhou, China, and in Pullman, WA, USA. Raute’s net sales in 2024 were EUR 204.6 million. The Group’s headcount at the end of 2024 was 783. More information about the company can be found at www.raute.com