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Raute - Decent profitability, low orders

Raute’s Q3 revenue was meaningfully lower than we estimated, yet absolute profitability figures were still in line with our estimates as the company’s improvement program has produced results. Order intake was quite a bit lower than we estimated, but we believe Q4 orders should show at least some q/q improvement.
  • Raute Q3 revenue declined by 18.5% y/y to EUR 34.0m, compared to our EUR 39.2m estimate. Wood Processing came in at EUR 21.5m vs our EUR 24.7m estimate. Services amounted to EUR 8.0m, compared to our EUR 9.8m estimate, while Analyzers was EUR 4.6m vs our EUR 4.7m estimate. The new ERP system’s implementation affected Wood Processing and Services sales.
  • Comparable EBITDA was EUR 3.0m vs our EUR 3.0m estimate, whereas EBIT landed at EUR 1.4m vs our EUR 1.5m estimate. The profitability improvement program’s progress supported profitability. The program should achieve EUR 4-5m annual cost savings by the end of this year.
  • Q3 order intake amounted to EUR 19m, compared to our EUR 29m estimate. Order intake mainly consisted of after-sales services and modernization projects, while some orders were postponed to Q4. Increased short-term market uncertainty impacts the demand for single production lines and spare parts.
  • Order book was EUR 192m at the end of Q3 (EUR 94m a year ago). Raute has no more order book left to be delivered to Russia.
  • Raute guides FY ‘23 revenue to be in the range of EUR 140-150m and comparable EBITDA margin at above 6% (guidance updated on Oct 19).
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