Raute - Only missing some new orders
Raute’s margins were again higher than we estimated, however orders were still soft relative to our expectations.
Strong margins but order intake remained on the low side
Raute’s EUR 36m Q4 revenue was lower than our EUR 44m estimate mostly due to Wood Processing, yet the segment’s record-high 16% EBITDA margin drove Raute’s EUR 5.7m comparable EBITDA a bit above our EUR 5.5m estimate. Wood Processing is unlikely to repeat such a margin performance at least for a while as there were exceptional items due to the reversal of cost provisions. Meanwhile Services EBITDA was also higher than we estimated, but Analyzers was clearly softer. The EUR 25m order intake remained on the soft side as Raute’s customers in Europe and North America are still mostly waiting to make their investment decisions. From this perspective LVL and birch plywood have strong outlooks, while softwood plywood is having more challenges.
We make some downward revisions to our estimates
Raute should still be as competitive in smaller equipment orders as it is in larger mill-scale projects, but the prolonged spell of low equipment orders might be one reason why the FY’26 comparable EBITDA guidance has a lower end of EUR 10m as pricing may need some dynamism. We consequently lower our FY’26 comparable EBITDA estimate by some EUR 2m to EUR 17.8m, implying 11.5% EBITDA margin on our EUR 155m estimated revenue. We trim our FY’26 Wood Processing EBITDA margin estimate slightly to 10.5% due to a bit lower revenue outlook as Q4’25 orders were softer than we expected.
Improving new orders could still drive upside later this year
Raute’s orders weren’t yet as high as we estimated, but we believe EBITDA should soon be able to start trending higher than the EUR 14.5m guidance midpoint (or 9.5% margin on the EUR 152.5m revenue midpoint) suggests as construction activity in Europe seems to be past its lowest point; Raute is also starting to be statistically due another mill-scale order soon as the last mill expansion project was booked in Q1’24. Raute is valued slightly above 5x EV/EBIT on our FY’26 estimates; the multiple could rise to close to 6x if new orders remain lower than we expect, but there’s also scope for the multiple to turn lower again next year. Our new TP is EUR 15.0 (17.0); our rating is now ACCUMULATE (BUY).