Half Year 2026 Raute Oyj Earnings Call

August 12, 2026

Speaker #1: Good afternoon, and welcome to Raute's half-year financial report session. My name is Mika Saario, and I'm Raute's CEO. Together with our CFO, Ville Halttunen, we will go through the highlights of our second quarter and first half of 2026.

Mika Saariaho: Good afternoon, and welcome to Raute's H1 financial report session. My name is Mika Saariaho, I am Raute's CEO, together with our CFO, Ville Halttunen. We will go through the highlights of our Q2 and H1 of 2026. We also will reserve some time at the end for questions and answers. The audience online, you can post your questions in the chat box, and the audience here can also then use the microphone at the end of this presentation. Very good. Let's get started. If I start with some of the highlights of our Q2 events, I would maybe describe that there was no major change in the operating environment where we have been now operating already for some time, which is characterized by quite big uncertainty and turbulence in the market. Really the uncertainty remained elevated during Q2 as well.

Speaker #1: We will also reserve some time at the end for questions and answers. For the online audience, you can post your questions in the chat box, and the audience here can also use the microphone at the end of this presentation.

Speaker #1: Okay, very good. Let's get started. So if I'll start with some of the highlights of our second quarter events. I would maybe describe that there was no major change in the operating environment where we've been, and our operating for already for some time, which is characterized quite by quite big uncertainty and turbulence in the in the market.

Speaker #1: So really, the uncertainty remained elevated during the second quarter as well. And when I say elevated, I really mean what it means to our customers.

Mika Saariaho: When I say elevated, I really mean what it means to our customers. If you look at the customers, industries they operate and their offering is very much to the construction industry, somewhat to transportation, furniture industry. Especially construction industry has remained very uncertain and volatile, and we have been now waiting for the recovery of that industry for some time already as an industry. This is really, let us say, impacting quite a lot in our customers' decisions in terms of the new investments into technology, also services and other things that Raute can offer to this industry. This uncertainty really resulted in us having not really great order intake. It was EUR 18 million. It was higher than a year ago, but a year ago also, H1 of the year was very low in terms of the order intake.

Speaker #1: So if you look at the customers' industries they operate in, their offering is very much to the construction industry, somewhat to transportation, furniture industry—especially the construction industry has remained very uncertain and volatile. We've been now waiting for the recovery of that industry for some time already.

Speaker #1: As an industry—and this is really, let's say, impacting quite a lot in our customers' decisions in terms of the new investments into technology, also services and other things that Raute can offer to this industry.

Speaker #1: So, this uncertainty really resulted in us having not really great order intake. It was €18 million. It was higher than a year ago.

Speaker #1: But a year ago, also, the first half of the year was very low in terms of the order intake. So this was the challenge coming from the market environment.

Mika Saariaho: This was the challenging coming from the market environment. If you look at then our own operations, I am actually very pleased what we achieved in this environment. Despite the low order intake and also quite low net sales, which was EUR 33 million, it was similar to what we had in the Q1 of this year, which is low for us, and it is much lower than a year earlier. Our profitability still was on a good level. I would describe as actually very good level considering the level of operations, level of net sales that we achieved. So we had 12% relative profitability in terms of the comparable EBITDA, EUR 4 million of comparable EBITDA.

Speaker #1: If you look at then our own operations, I'm actually very pleased with what we achieved in this environment. So despite the low order intake, and also quite low net sales, which was €33 million—it was similar to what we had in the first quarter of this year, which is low for us, and it's much lower than a year earlier.

Speaker #1: Our profitability still was on a good level. I would describe it as actually a very good level, considering the level of operations and the level of net sales that we achieved.

Speaker #1: So we had 12% relative profitability in terms of the comparable EBITDA 4 million euros of comparable EBITDA and this was thanks to very much the continued good work in our customer delivery projects and savings we also achieved throughout our own operations and then also in this these projects with the with the prudent project management.

Mika Saariaho: This was thanks to very much the continued good work in our customer delivery projects and savings we also received throughout our own operations, and then also in these projects with the prudent project management. So very happy with that development and continued good performance in our operations. To me, this also demonstrates that also in this low volume environment, we are able to maintain quite good profitability, and that is thanks to a lot of effort and work we have been putting to our operational excellence work during the last and past years. In wood processing, which is the biggest unit responsible for this project deliveries to our customers, big projects, especially we can see the profitability on a good level despite the reduced top line, thanks to this project execution and some project provisions also that we were able to release during the Q2.

Speaker #1: So, we are very happy with that development and the continued good performance in our operations. To me, this also demonstrates that, even in this low volume environment, we are able to maintain quite good profitability, and that's thanks to a lot of effort and work we've put into our operational excellence initiatives during the last few years.

Speaker #1: In wood processing, which is the biggest unit responsible for this project, deliveries to our customers' big projects—especially—we can see the profitability on a good level despite the reduced top line, thanks to this project execution and some project provisions also that we were able to release during the second quarter.

Speaker #1: We also were able to release some reservations in the first quarter of the year, so this same good level of work has continued now. This, of course, is an operational achievement.

Mika Saariaho: We also were able to release some reservations in the first quarter of the year. This same good level of work continued now. This, of course, is an operational achievement. It now is visible in these Q2 numbers, but thanks to good work that I am very pleased during the Q2. In terms of service business, we were a little bit behind our own plans also in terms of the top line. We saw that still our customers in this environment, they are trying to protect their cash flow, so they are even saving on some quite critical small investment services, maintenance, this type of work, which then has impacted our service business top line.

Speaker #1: It it now is visible in this second quarter numbers but thanks to good good work that I'm very pleased during the second quarter. In terms of service business, we we were a little bit behind our own plans also in terms of the top line we saw that still our customers in this environment they are trying to protect their cash flow so they are even saving on some quite critical small investment services maintenance this type of work which then has impacted our service business top line and and due to the lower top line the profitability although it was positive it was not on the level that we expect from our service business in in the future in a in a more normal operating environment.

Mika Saariaho: Due to the lower top line, the profitability, although it was positive, it was not on the level that we expect from our service business in the future in a more normal operating environment. As a positive thing, Analyzers business, which is very important for whole Raute, providing really the technology edge into our offering. We saw good, I would say, turnaround during the Q2. Actually, Analyzers business did increase from the previous quarters in terms of top line. When there was an increase, we immediately saw also profitability improvement on the bottom line. This really to me, demonstrates the underlying potential we have in the Analyzers business and its importance for Raute in the future.

Speaker #1: And then, as a positive thing on the Analyzers business, which is very important for the whole Raute, providing really the technology edge into our offering, we saw a good, I would say, turnaround during the second quarter. Actually, Analyzers business did increase from the previous quarters in terms of top line, and when there was an increase, we immediately saw also profitability improvement on the bottom line.

Speaker #1: So this really to me demonstrates the underlying potential we have in the analyzers business and and it's importance for Raute in the future. So we continued of course in this difficult environment focusing on our own things things that we can impact which of course is a customer work which is our own delivery operations cost control efficiency improvements and and we obviously this is this is fully in our hands.

Mika Saariaho: We continued, of course, in this difficult environment, focusing on our own things that we can impact, which of course is a customer work, which is our own delivery operations, cost control, efficiency improvements. We obviously this is fully in our hands. Some of the things happening on the global industry environment are a little bit outside of our hands, so we need to focus on things that we can impact, which is a good customer work. Of course, trying to realize those new orders also, but then really the internal operations. I am happy with that performance and that development during this year as well. In terms of the market, we have to be a little bit cautious, but in any statements, but I could say and we are saying that we have observed some signs of improving customer sentiment.

Speaker #1: Some of the things happening in the global industry environment are a little bit outside of our hands. So we need to focus on things that we can impact, which is good customer work.

Speaker #1: Of course, trying to realize those new orders as well, but then really the internal operations. And I'm happy with that performance and that development during this year as well.

Speaker #1: Now, in terms of the market, we have to be a little bit cautious in any statements. But I could say, and we are saying, that we have observed some signs of improving customer sentiment.

Mika Saariaho: It was not realized in Q2 as a new order intake, but this sentiment is clearly there. Why I am saying this is, of course, some of these projects which we are following and negotiating with customers, they have different gates in the sales funnel, and we see real progress towards completion phase in some of these decisions from customer point of view. Nevertheless, the uncertainty, turbulence clearly remains in the market, and we still have to see when really the sustained recovery on a broader way is taking place. But some good signs we see there in the market. Okay. Here we see some of the same messages in numbers. Net sales we saw clear dip from a year ago figures, but it was on the same level as Q1 this year. Comparable EBITDA, I described this EUR 4.0 million as a very good result.

Speaker #1: It was not realized in Q2 as a new order intake, but this sentiment is clearly there. And why I'm saying this is, of course, some of these projects which we are following and negotiating with customers, they have different gates in the sales funnel, and we see real progress towards the completion phase in some of these decisions from the customer point of view.

Speaker #1: Nevertheless, the uncertainty and turbulence clearly remain in the market, and we still have to see when the really sustained recovery, in a broader way, is taking place.

Speaker #1: But we do see some good signs there in the market. Okay, and here we see some of the same messages in numbers.

Speaker #1: So net sales—we saw a clear dip from a year ago figures, but it was on the same level as the first quarter this year.

Speaker #1: Comparable EBITDA I described this 4.0 million euros as a as a very good result. It's 12% of the of the net sales our long-term ambition is to achieve 12% over business cycle.

Mika Saariaho: It's 12% of the net sales. Our long-term ambition is to achieve 12% over business cycle. Assuming this is some kind of a lower cycle at least that we are now experiencing, this is actually a very good achievement indeed. Order intake on a low level, as I said, the same is true now for the order book. It's going down. I will share soon how the development has been over the past years. Equity ratio is good, so we have a strong balance sheet. Obviously, we have generated profit now during the past year, so we have a strong balance sheet. We are in good position in this turbulent market environment to manage this situation from that point of view. This, of course, provides also good basis to go forward when the market recovers.

Speaker #1: So, and then assuming that this is some kind of a lower cycle, at least, that we are now experiencing, this is actually a very good achievement indeed.

Speaker #1: Order intake is on a low level, as I said. The same is true now for the order book—it's going down. I will share soon how the development has been over the past years.

Speaker #1: The equity ratio is good, so we have a strong balance sheet. Obviously, we have generated profit during the past years, so we have a strong balance sheet.

Speaker #1: So we are in a good position in this turbulent market environment to manage this situation from that point of view. And this, of course, also provides a good basis to go forward when the market recovers.

Speaker #1: Personnel is roughly on the same level as in the previous quarter, with about 700 people working directly at Raute. Order intake—here we see some comparison also to previous years.

Mika Saariaho: Personnel, roughly on the same level than in the previous quarter, and about 700 people working directly at Raute. Order intake, here we see the comparison also to previous years. Obviously, low figure, although this EUR 35 million is more than a year ago for H1, it still is a very low figure. We can see from this picture also that there is a huge variation between different quarters in terms of Raute's order intake. We have to admit, the order intake volatility is big for our type of a business. Of course, if we book any bigger orders for wood processing, that would have an immediately bigger impact.

Speaker #1: So, obviously, it's a low figure, although this €35 million is more than a year ago for the first half. It still is a very low figure, but we can see from this picture also that there is a huge variation between different quarters in terms of Raute's order intake.

Speaker #1: So so we have to admit the order intake volatility is is big for our type of a business and and of course if we book any bigger bigger orders for wood processing that would have an immediately a bigger impact.

Speaker #1: But this is where we are now, and if we look at the second quarter events, North America actually played an important role on this quite low number. But still, North America is an important strategic focus area for us, and very important for the whole industry as well.

Mika Saariaho: This is where we are now. If we look at the Q2 events, North America actually played important role on this quite low number, but still North America is an important strategic focus area for us and very important for the whole industry as well. In terms of order book, we see here the development over the last six years or so. Obviously, we had this huge peak at the end of 2023 and beginning of 2024, and there has been a more difficult time for the whole industry since that. This downturn in construction industry and now customers' end industries has really continued now for prolonged time. Obviously during these years, I should say, there has been expectation not only from us but for many parties that the recovery would be starting.

Speaker #1: And in terms of order book, we see here the development over the last six years or so. Obviously, we had this huge peak at the end of 2023 and the beginning of 2024, and there has been a more difficult time for the whole industry since then.

Speaker #1: So this downturn in the construction industry and now customers, customers' end industries, has really continued now for a prolonged time. So obviously, during these years, I should say there has been expectation, not only from us but from many, many parties, that the recovery would be starting.

Speaker #1: So we still haven't seen that, and there still is this uncertainty in the market. But I believe strongly that the recovery will take place.

Mika Saariaho: We still haven't seen that, and there still is this uncertainty in the market. I believe strongly that the recovery will take place. We can also see from this figure that when the recovery takes place, it can also be quite fast. We'll see what happens this time when we move to that phase. Net sales came down from a year ago figure, EUR 66 million in total in the H1, both quarters quite similar. Europe still playing quite big role. We still have these quite big projects which are now towards the end of those project deliveries. From the accounting point of view, we are recognizing revenue from those projects. Very much Europe dominating there, but North America coming second and then the other regions.

Speaker #1: We can also see from this figure that when the recovery takes place, it can also be quite fast. So, we'll see what happens this time when we move to that phase.

Speaker #1: Net sales came down from the year-ago figure, totaling €66 million in the first half. Both quarters were quite similar. Europe is still playing quite a big role.

Speaker #1: We still have these quite big projects, which are now towards the end of those projects. Deliveries, and from the accounting point of view, we are recognizing revenue from those projects.

Speaker #1: So, very much Europe dominating there, but North America coming in second, and then the other regions. And comparable EBITDA—I'm happy, as I said, at this level of €4 million with this volume that we have now achieved on top line.

Mika Saariaho: Comparable EBITDA, I am happy, as I said, on this level of EUR 4 million with this volume that we now received on top line. We can see here the development over the past years as well. I would say the quite nice recovery from the very challenging years we had, 2021 and 2022 in particular. So happy with that development and we have taken Raute operations, I think, to a better level during this time. This is even more visible in the operating profit where the huge losses are visible from the inflation and the war in Ukraine that Russia started. Since that, we have had a nice recovery and operating now on a positive territory also with this lower business volumes. Personnel, about 700 people.

Speaker #1: We can see here the development over the past years as well. And I would say the quite nice recovery from the very challenging years we had in 2021 and 2022 in particular.

Speaker #1: So happy with that development and and taking we have taken Raute operations I think to a better level during these this time. This is even more visible in the operating profit where where the huge losses are visible from the inflation and and the war in war in Ukraine that Russia started.

Speaker #1: So, since that, we have had a nice recovery and are now operating in positive territory, also with these lower business volumes.

Speaker #1: Personnel about 700 people as I said the drop from year ago figure is is due to the fact that we had close we closed the China operations a year a year ago in in during Q2.

Mika Saariaho: As I said, the drop from year ago figure is due to the fact that we closed the China operations a year ago during Q2. There was a reduction in the personnel, and that is impacting these numbers. Most of our people work in Europe, but we have important workshop in North America, in USA and Canada operations there, and those are important global footprint for us from production point of view. Then we have the sales representatives and sales offices, service centers all around the world. Okay, couple of more words about the different segments. Wood processing, I already said this is the most important business unit for us in terms of the overall volumes. This represents major part of the whole Raute volume. I am so happy to see the overall development from a loss-making to profit-making unit.

Speaker #1: So there was a reduction in the personnel, and that's impacting these numbers. Most of our people are working in Europe, but we have important workshops in North America, in the USA and Canada—operations there—and those are an important global footprint for us from a production point of view. And then we have the sales representatives and sales offices, service centers all around the world.

Speaker #1: Okay, a couple more words about the different segments. Wood processing, I already said, is the most important business unit for us in terms of overall volume.

Speaker #1: This represents major part of the the whole Raute volume. And I'm so happy to see the overall development from from loss making to profit making unit and actually this second quarter profit margin which was close to 13% I would describe this still as a little little bit extraordinary so it was due to the release of some cost provisions which of course might happen in the future but you can't count on that.

Mika Saariaho: Actually, this Q2 profit margin, which was close to 13%, I would describe this still as a little bit extraordinary. It was due to the release of some cost provisions, which of course might happen in the future, but you cannot count on that. We aim to do the accounting so that it takes into account the whole project to the completion. Then this kind of provision release is required that then there is something better happening in the quarter than what we even expected. But good development in the wood processing. Happy with this 13% margin from this business unit. Services, there was close to 20% drop in the top line, and this was now then quite clearly visible in the profitability as well. Obviously, other business as well, there is a quite big net sales to EBITDA lever there.

Speaker #1: We we we we aim to do the accounting so that you know it takes into account the whole projects to the completion and then this kind of provision releases require that then there's something better happening in the quarter than what we even expected.

Speaker #1: But good development in the wood processing; happy with this 13% margin from this business unit. Services saw close to a 20% drop in the top line.

Speaker #1: And this was now then quite clearly visible in the profitability as well. So, obviously, in services as in other business as well, there is quite a big net sales to EBITDA lever there.

Speaker #1: So, when the top line drops, we can see this unfortunately in the profitability as well. And I think services, which is now close to an 8% comparable EBITDA margin, is clearly not where we want to be on the service business.

Mika Saariaho: When the top line drops, we see this unfortunately in the profitability as well. I think services, which is now close to 8% comparable EBITDA margin, is clearly not where we want to be on the service business. I would, if in wood processing this was exceptionally high, this is a little bit exceptionally low for services. It should be much higher percentage-wise. The reason also for this is that we have not stopped really the development initiatives in services, so there has been quite high fixed cost on services. We want to develop the new offering types, which are very important for us in the future, different type of performance contracts and new models serving our customers. This development work we have continued despite this challenging environment. Analyzers has had experienced quite tough times last quarter of last year and then Q1 2026.

Speaker #1: So, I would—I would say if, in wood processing, this was exceptionally high, this is a little bit exceptionally low for services. It should be much higher, percentage-wise.

Speaker #1: The reason also for this is that we haven't really stopped the development initiatives in services. So there's been quite high fixed costs on services.

Speaker #1: We want to develop the new offering types, which are very important for us in the future—different types of performance contracts and new models serving our customers.

Speaker #1: And this development work we have continued despite this challenging environment. Analyzers has experienced quite tough times in the last quarter of last year and then the first quarter of 2026.

Speaker #1: We actually had a loss-making business, which is obviously not where we should be. We see that this was also due to the very low volumes that we had in the fourth and third quarters.

Mika Saariaho: We actually had a loss-making business, which is obviously not where we should be. We see that this was also due to very low volumes that we had in Q4 and Q3, if you see from this graph. Now, when the volume is up, we can quite directly see the impact on the profitability. This should be a very high profitable business for us. It is obvious, and everybody knows that in this sort of business, the product margins are on a good level, as they should be, because we are putting a lot of R&D effort into this. It means that when the top line increases, it is visible on the bottom line as well. This was, to us, a good proof again that this is a good profitable business, which we want to grow in the future as we go forward.

Speaker #1: If you see from this draft, and now when the volume is up, we can quite directly then see the impact on the profitability. This should be a very high-profitable business for us.

Speaker #1: It's it's obvious and and everybody knows that in this sort of business the product margins are on a good level as they should be because we are putting a lot of R&D effort into this but then it means that when the top line increases it it is visible in the on the bottom line as well.

Speaker #1: So this was to us a good proof, again, that this is a good, profitable business which we want to grow in the future as we go forward.

Speaker #1: Okay, and then I will hand it over to Ville for some more words on the numbers. All right, thank you, Mika. So, hello and good afternoon also on my behalf.

Mika Saariaho: Okay, I will hand it over to Ville. Some more words on the numbers.

Ville Halttunen: All right. Thank you, Mika. Hello, and good afternoon also on my behalf. My name is Ville Halttunen, I am CFO for Raute. As usual, I will start from the EPS development. We delivered EUR 0.36 of EPS in the quarter, nearly half from a year ago comparables, where we were at the record high level. This is primarily volume driven, as our net sales came down by 25%. Also, the operating profit came down, and as a result, EPS came down. Despite the good margins, we relatively kept the absolutes came down. No big surprises in the financial items below operating profit. Slightly positive financial net items and tax rate of 20%. In the comparable period, we had relatively high one-offs related to the China closure, which are visible in the reported EPS numbers.

Speaker #1: My name is Ville Haltonen. I'm CFO for Raute. So, as usual, I'll start from the earnings per share development. We delivered 306 euro cents of EPS in the quarter.

Speaker #1: Nearly half in from a year ago comparables, when we were at the record high level. This is primarily volume driven, as our net sales came down by 25%.

Speaker #1: Also, the operating profit came down, and as a result, the EPS came down. So, these are quite good margins. We relatively kept; the absolutes came down.

Speaker #1: And no no big surprises in the in the financial items. Below operating profit slightly positive financial net items. And tax rate of 20%. In the comparable period we had a relatively high one offs related to the China closer which which are then visible in the reported EPS numbers and and also the effective tax rate was higher than normally.

Ville Halttunen: Also, the effective tax rate was higher than normally. Looking into our cash flow performance in the quarter. Our cash flow was -EUR 8 million in the quarter. This was now second consecutive negative operating cash flow in this picture. At the same time, we are delivering positive EBITDA. This is an outcome of our business model, basically, where the revenue recognition is much more stable, and the EBITDA performance is showing that. The cash flow cycles are different as primarily our customer payments cycles are very different than the revenue recognition cycles. The net working capital change was quite negative now in the quarter. When we look at the net working capital development there, we ended now the quarter at EUR 18.5 million, which is a relatively high number in our business. Actually, it is the highest level since 2019.

Speaker #1: Then, looking into our cash flow performance in the quarter, our cash flow was negative eight million in the quarter. This was now the second consecutive negative operating cash flow in, in this picture.

Speaker #1: At the same time, we are delivering positive EBITDA, and this is an outcome of our business model, basically, where the revenue recognition is much more stable, and the EBITDA performance is showing that.

Speaker #1: And then the cash flow cycles are different, as primarily our customer payment cycles are very different than the revenue recognition cycles.

Speaker #1: So the net working capital change was quite negative now in the quarter. When we look at the net working capital development, we ended the quarter at €18.5 million.

Speaker #1: Which is a relatively high number in our business. And actually, it's the highest level since 2019. I also brought here a picture of its longer-term history.

Ville Halttunen: I also brought here a picture of it, longer-term history, which is this smaller picture here, where you can see also that we have been historically also on these levels. Over the long-term period, we are roughly at the zero level. There are large swings around this one, depending on the cycles of our projects, where they are. At the moment, we have had very low order intake of new incoming orders, which typically have upfront payments, which are then impacting this kind of positively. On the other hand, there has been some postponements of payments in our existing customer projects. Expect this to now come actually down as we look into H2 of this year. Our balance sheet remains strong. Equity ratio 65%. During the quarter, we have paid dividends.

Speaker #1: Which is this smaller picture here, where you can see also that we have been historically also on these levels. And over the long, long term period, we are roughly at the zero level.

Speaker #1: But there are large swings around this one, depending on the cycles of our projects and where they are. At the moment, we have had very low intake of new incoming orders, which typically have upfront payments that are then impacting this kind of positively.

Speaker #1: And then, on the other hand, there have been some postponements of payments in our existing customer projects. But we expect this to now come down as we look into the second half of this year.

Speaker #1: Our balance sheet remains strong. Equity ratio: 65%. During the quarter, we have paid dividends. Also, we repaid the junior loan of €3 million, and then we have also had the share buyback program ongoing.

Ville Halttunen: Also, we repaid the junior loan of EUR 3 million, and we have had also the share buyback program ongoing. Liquidity, we still have a strong liquidity of EUR 17 million. On top of this, we have also EUR 15 million revolving credit facility available, which gives us flexibility. One should also remember now that we have this net working capital now tying the cash quite a lot compared to the history. That is good to keep in mind. Investment level is same as last year, so no big news here. EUR 1.7 million after first six months, a similar level as last year. We continue to do some reinvestments in our operations and some R&Ds also into these numbers, which is being capitalized. Those are the primary CapEx items there.

Speaker #1: And liquidity—we still have strong liquidity of €17 million. On top of this, we also have a €15 million revolving credit facility available.

Speaker #1: So, which gives us flexibility. And one should also remember, now that we have this networking capital being, now tying the history.

Speaker #1: So that's good to keep in mind. Investment level is the same as last year, so no big news here. So, €1.7 million after the first six months, similar level as last year.

Speaker #1: So we continue to continue to do some reinvestments in in our operations and and some some R&Ds also. Into these these numbers which is being capitalized.

Speaker #1: So those those are the primary capex items. There. And still the R&D as a as a what what comes to P&L. We have a here also similar level of R&D efforts.

Ville Halttunen: Still the R&D, as what comes to P&L, we have here also similar level of R&D efforts that we had last year. Minor decrease compared to last year, but this is also somewhat now increasing in relation to sales as the sales is coming down more fast. This is all from my side. I will hand back to Mika to close with the outlook and guidance.

Speaker #1: That that we had last year. Minor, minor decrease compared to last year. But this is also somewhat now increasing in relation to sales, as the sales is coming down more fast.

Speaker #1: So this is all from my side, and then I'll hand back to Mika to close with the outlook and guidance. Okay, thank you, Ville.

Mika Saariaho: Okay. Thank you, Ville. By the way, I forgot to say in the beginning, if you want to post questions in Finnish, that is also okay in the chat box. We will look at those after I say something about the outlook for 2026. I actually already spoke about this, the operating environment. It has been a challenging environment for the industry overall. When I say industry, I mean our customers in particular. Of course, we are here to serve our customers, and we live and breathe together with our customers, and their investments, of course, in a market where they are struggling with cash flows and profits, is impacting some of the decisions on the investments as well. We still have this sustained global geopolitical uncertainty as well. All these are impacting our industry.

Speaker #1: So by the way I forgot to say in the beginning if you want to post questions in Finnish that's also okay in the in the in the chat box.

Speaker #1: So, we'll look at those after I say something about the outlook for '26. I actually already spoke about this—the operating environment. It's been a challenging environment for the industry overall.

Speaker #1: And when I say industry, I mean our customers in particular. Of course, we are here to serve our customers, and we live and breathe together with our customers.

Speaker #1: And their investments, of course, in a market where they are struggling with cash flows and profits, is impacting some of the decisions on the investments as well.

Speaker #1: And we still have this sustained global geopolitical uncertainty as well. So all these are impacting our industry. We've seen also during the second quarter, again, changes in the tariffs which are impacting our customers in North America in particular.

Mika Saariaho: We have seen also during the Q2, again, changes in the tariffs, which are impacting our customers in North America in particular. There was again, discussions, and I was visiting myself, some of the customers there, and they are impacted quite differently. A little bit arbitrary also, I would even say, in some of these cases. That is making very difficult then to make investments in this environment. I would say again, that despite this uncertainty, we are seeing our customers in Europe, North America, and I would also say in Asia and Oceania now, which was a little bit maybe new thing, that they have continued preparations for future investments, and especially such that then improve the production efficiently and their competitiveness. What they are really looking for is something where I think we as a Raute, we have a good fit.

Speaker #1: There were again discussions, and I was visiting myself some of the customers there, and they are impacted quite differently—a little bit arbitrary also, I would even say, in some of these cases.

Speaker #1: So that is making it very difficult then to make investments in this environment. But then I would say again that despite this uncertainty, we are seeing our customers in Europe and North America.

Speaker #1: And I would also say, in Asia and Oceania now—which was maybe a little bit of a new thing—they have continued preparations for future investments.

Speaker #1: And especially such that, you know, can improve the production efficiency and their competitiveness. And what they are really looking for is something where I think we, as Raute, have a good fit.

Speaker #1: I mean our customers are looking for sustainable technologies, automation levels, and really efficiency overall for the whole process, which is something where we can support.

Mika Saariaho: I mean, our customers are looking sustainable technologies, automation levels, and really efficiency overall for the whole process, which is something where we can support. Maybe also versus some of our competitors who are more focused on particular equipment when we have the overall process expertise in-house, we can serve our customers with these cases. Of course, the major industries which are impacting us are the construction industry. Some of our customers are then working in niche areas, and it might be something on the furnace or transportation and maybe even LNG vessels or something like that. Then they have a little bit different dynamics from their point of view. Not all customers are suffering. There are also customers who are actually having a good, profitable business, and they are planning at least for the future investments.

Speaker #1: Maybe also, versus some of our competitors who are more focused on particular equipment, we have the overall process expertise in-house. So we can serve our customers in these cases.

Speaker #1: And of course, the major industries which are impacting us are the construction industry. But, of course, some of our customers are then working in niche areas.

Speaker #1: And it might be something on the furniture or transportation, and maybe even LNG vessels or something like that. And then they have a little bit different dynamics from their point of view.

Speaker #1: So not all customers are suffering suffering. There are also customers who actually having a good profitable business. And they are they are planning at least for the future future investments.

Speaker #1: And and of course all we are waiting that you know some of these signs from the overall geopolitical tensions and and and those to ease out.

Mika Saariaho: Of course, all we are waiting that some of these signs from the overall geopolitical tensions and those to ease out, this would make it easier for the decisions to take place. Overall, I think that we are well-positioned to capture these opportunities when the recovery really, in a wider way, takes place. Of course, service Analyzers play a very important role in that business. Service was now down, but it is very important our field service people and personnel who are meeting our customers literally daily, so they really know what is happening in the customer operations and makes it then possible for us to help with the investments as well. Same is true with Analyzers, digital services, where we capture also with the help of AI, we capture information and manage that and provide insights to our customers.

Speaker #1: So this would make it easier for the decisions to take place. Overall, I think that we are well positioned to capture these opportunities when the recovery really, in a wider way, takes place.

Speaker #1: And, of course, service analysis plays a very important role in that business. Service was now down, but it's very important in our field. Service people and personnel are meeting our customers literally daily.

Speaker #1: So they really know what is happening in the customer operations, and it makes it possible for us to help with the investments as well.

Speaker #1: The same is true with analyzers. Digital services, where we capture information also with the help of AI, we capture information and manage that, and provide insights to our customers.

Speaker #1: So this is where we are as an industry. And I cannot promise when exactly the order intake will start to recover.

Mika Saariaho: This is where we are as an industry. I cannot promise when exactly the order intake will start to recover, but I remain confident that it will recover, and there are good signs, and someday it will happen. This of course, has proven now that we are living in quite cyclical environment as Raute. Because of that, we have really seriously focused on our own internal operations and on that development, I am very happy, and that is bearing fruit now in this challenging environment as well. In terms of the guidance for this 2026, we have communicated in the beginning of the year that we gave actually quite a wide range for our guidance. The idea is also that we now narrow it when we move forward. Now in the Q2, what we did was that we narrowed the net sales expectation.

Speaker #1: But I remain confident that it will recover, and there are good signs, and someday it will happen. But this, of course, has proven now that we are living in quite a cyclical environment as Raute.

Speaker #1: And because of that, we have really seriously focused on our own internal operations and on that development. I'm very happy that is bearing fruit now, even in this challenging environment as well.

Speaker #1: In terms of the guidance for 2026, we have communicated at the beginning of the year that we gave actually quite a wide range for our guidance.

Speaker #1: And the idea is also that we now narrow it as we move forward. In the second quarter, what we did was that we narrowed the net sales expectation.

Speaker #1: We did take down somewhat the upper limit of this range, so now we are saying it's going to be €125 to €145 million for the full year.

Mika Saariaho: We did take down somewhat the upper limit of this range. Now we are saying it is going to be EUR 125 to 145 million for the full year. In terms of the comparable EBITDA, although we took down net sales guidance, at least we did not change the midpoint of the guidance for the EBITDA. So we took a little bit up the lower limit and then a little bit down the upper limit. We expect now EUR 11 to 18 million comparable EBITDA for 2026. You can see here the figures for 2025, which is demonstrating how cyclical the industry is and the business is. It was 175. A year earlier, it was more than EUR 200 million. We need to live in this kind of environment.

Speaker #1: And then in terms of the comparable EBITDA although we took down net sales guidance we did not at least we did not change the midpoint of the guidance for the for the for the EBITDA.

Speaker #1: So we took the lower limit up a little bit, and then the upper limit down a little bit. So we expect now €11 to €18 million comparable EBITDA for 2026.

Speaker #1: And you can see here the figures for '25, which demonstrate how cyclical the industry is. And the business—as it was 175 years earlier—it was more than €200 million.

Speaker #1: So we need to live in this kind of environment. We want to increase the share of services, recurring revenue analyzers, and I think we are on the right path to that.

Mika Saariaho: We want to increase the sale of services, recurring revenue, Analyzers, and I think we are on the right path to that. But still we are experiencing this prolonged downturn in the top line, but ready to capture new opportunities when those emerge. Okay. Very good. So that was the key messages, highlights of Q2, H1. Maybe I invite Ville on stage. Are there any questions? Questions, or maybe we start from the audience here. Is there any questions here?

Speaker #1: But still, we are experiencing this prolonged downturn in the top line, and we are ready to capture new opportunities when those emerge.

Speaker #1: Okay, very good. So that was the key messages and highlights of the second quarter and first half of the year. Maybe I invite Ville on stage.

Speaker #1: So are there any questions? Or maybe we start from the audience here. Is there any questions here?

Speaker #2: Yes, of course. It's Antti Villekanen from Inres. First, could you please elaborate a bit on what is the status of these five projects that you sold in '23 and '24?

Antti Viljakainen: Yes, of course. It is Antti Viljakainen from Inderes. First, could you please elaborate a bit, what is the status of these 5 projects that you sold in 2023 and 2024? Metsä Group is not yet in production, but how about the other 4 factories, and do you still expect payments from these projects?

Speaker #2: Metsa is not yet in production, but how about the other four factories? And do you still expect payments from these projects?

Speaker #1: Yes. Actually not not going into into any any secrets of any of any customer. But Metsa is actually already producing. So so we have we have some stages have have been passed already from that point of view.

Mika Saariaho: Yes. Actually, not going into any secrets of any customer, but Metsä Group is actually already producing, so some stages have been passed already from that point of view. Of course, the full production is only coming online then later this year and in line of the timeline that we have agreed with them. Things are progressing very well there. No worries. Then we have a couple of other projects we announced in 2023. That was in Baltics area, in France, and then there was in Uruguay. Those also progressing, I would say, in line within the normal variations of those projects in terms of timeline. Some things are happening a little bit faster, some a little bit slower. But in terms of our performance, which we can see also in the financial figures, we are very happy with that, and things are progressing okay.

Speaker #1: Of course, the full production is only coming online then—later this year and in line with the timeline that we have agreed with them.

Speaker #1: Things are progressing very well there. No, no, no worries. Then we have a couple of other projects we announced in 2023. That was in the Baltics area, in France.

Speaker #1: And then there was Uruguay. Those are also progressing, I would say, in line with the normal variations of those projects in terms of timeline.

Speaker #1: Some things are happening a little bit faster, some a little bit slower. But in terms of our performance, which we can also see in the financial figures, we are very happy with that.

Speaker #1: And things are progressing okay. In terms of the payment, which is more than—well, it's both the POC question, but also maybe more of a cash flow question.

Mika Saariaho: In terms of the payment, it is both a POC question, but also maybe more cash flow question. There will be still payments coming from those projects, and it is very typical for projects. The last payments are at quite end than when really everything has been accepted and the site is really up and running. I do not know, Ville, you want to comment? That was more the cash flow-

Speaker #1: There will still be payments coming from those projects. And it's very typical for projects that the last payments are at the very end, when really everything has been accepted.

Speaker #1: And the site is really up and running. I don't know, Ville, if you want to comment. That was more the cash flow projection we have, which we are not giving.

Mika Saariaho: projection we have, which we are not giving, but I think you said we probably see some-

Speaker #1: But I think you said we would probably see some improvement in the situation.

Antti Viljakainen: Yeah

Mika Saariaho: improvement in the situation.

Speaker #2: I think that, yeah, you can draw the same conclusions—that also now, in these big projects, we have now recognized more revenue than what we have received in cash.

Ville Halttunen: I think, yeah, you can draw the same conclusions that also now in these big projects, we have now recognized more revenue than what we have received cash in, so still we expect the material payments from them. But I think it is within the normal cycles, as you said, the payments.

Speaker #2: So so still we expect the material payments from from them. But I I think it's within the normal normal cycles as you said. The the the payments.

Speaker #1: Yeah.

Mika Saariaho: Yeah.

Speaker #2: Okay, that's clear. You said that orders were postponed, but they were moved to the completion phase. So does it basically mean that you have won some meaningful amount of projects from competitors, but the final investment decision is pending on the customer?

Antti Viljakainen: Okay. That is clear. Then you said that orders were postponed, but they were moved to completion phase. Does this basically mean that you have won some meaningful amount of projects from competition, but the final investment decision is pending on customer?

Speaker #1: Well, if we look at the market, of course I would say in the competitive landscape, maybe it would be too much to say that we have won something significant from competitors.

Mika Saariaho: Well, if we look at the market, of course, I would say in the competitive landscape, maybe it would be too much to say that we have won something significant from competitors. But I wouldn't say the other way around also that we would have lost something. I would say the competitive landscape remains quite similar to what it has been. Then in terms of the moving to completion stage, where I was maybe a little bit fuzzy what I said, I maybe remain fuzzy, which is to say that it is more like, of course, these are long negotiations with customers, and you need to understand the dynamics, and particular customers have certain gates in their process. Some things have become even closer to their final decisions. Maybe they are pending board decisions or some financing bank decisions or things like that.

Speaker #1: But I wouldn't say the other way around either, that we would have lost something. I would say the competitive landscape remains quite similar to what it has been.

Speaker #1: Then, in terms of moving to the completion stage, where I was maybe a little bit fussy in what I said, I maybe remain fussy. Which is to say that, you know, it's more like—of course, these are long negotiations with customers, and you need to understand the dynamics, and particular customers have certain gates in their process.

Speaker #1: So some things are have become even closer to their final decisions. Maybe they have they are pending board decisions or they or some financing bank decisions or things like that.

Speaker #1: So I would say from our funnel more things have moved to those those stages which is very close to getting orders in. And and and yeah whether then and when we get get anything bigger I it really is like I can't say I can't promise.

Mika Saariaho: I would say from our funnel, more things have moved to those stages, which is very close to getting orders in. Yeah, whether then and when we get anything bigger, it really is like I can't say, I can't promise. It can be any quarter or it can still take a while.

Speaker #1: It can be any quarter, or it can still take a while.

Speaker #2: And is there any kind of rule of thumb for how often your customers review these decisions? Is it monthly, quarterly, biannually, or...?

Antti Viljakainen: Is there any kind of rule of thumb how often your customers review these decisions? Is it like a monthly or quarterly or biannually or?

Speaker #1: I would say it's it's maybe maybe if we need to separate into into at least two things. So so the kind of this this maintenance type of a budget which is normally very low local for the local mill personnel and mill managers to decide whether they buy service and whether they buy spare parts and things like that.

Mika Saariaho: I would say maybe we need to separate into at least two things. There is this maintenance type of a budget, which is normally very local for the local mill personnel and mill managers to decide whether they buy service or whether they buy spare parts and things like that. That is not requiring really any high-level decisions. Same is true maybe for small upgrades as well. But of course, if in our customer company, those people have gotten advice from the top that, "Be safe on everything." That will impact on how they operate. But they can make the decisions without any big reviews. But then on a bigger projects, that varies between the customer. But I would say normally, it is their board meetings. Normally any bigger company has monthly board meetings and things like that. That is typically somehow the cycle.

Speaker #1: So, that doesn't really require any high-level decisions. The same is true, maybe, for small upgrades as well. But, of course, if we now look at customer companies, those people have gotten advice from the top that, you know, be safe—save on everything.

Speaker #1: So that will impact how they operate. But they can make the decisions without any big reviews. But then on bigger, bigger projects, I would say that varies between the customer.

Speaker #1: But I would say normally, you know, it's their board meetings. So normally any bigger company has monthly board meetings and things like that.

Speaker #1: That typically is somehow the cycle. Some customers are then saying that they only decide on big things like four times a year or something like that.

Mika Saariaho: Some customers are then saying that they only decide on big things like four times a year or something like that, but the board is meeting every month. We are talking about kind of monthly cycles, very typically. This has happened also if I look at the past when we see that maybe something could happen and maybe the recovery is that maybe we have considered that the next month there is a decision again. But so far the decisions have been that let us wait still for a while before we do something. Hopefully this is improving and we see some signs on that, but I can't promise that this will. It is so much dependent on these very big moves in the world, geopolitical environment and trade politics and so forth. Difficult to predict.

Speaker #1: But the Board is meeting every year, every month. So we are talking about kind of monthly cycles, very typically. And this has happened also if I look at the past, when we see that maybe something could happen.

Speaker #1: And maybe the recovery is that, you know, maybe we have considered that next month there is a decision again. But so far, the decisions have been that let's wait still for a while.

Speaker #1: Before we do something. So so hopefully hopefully this is improving and and we see some signs on that. But I can't promise that this will it's so so much dependent on this very big big moves in the world geopolitical environment and trade politics and so forth.

Antti Viljakainen: Okay. Your order book is quite clearly down year and year and from the end of the last year as well. How is your workload in different units as we speak?

Speaker #2: Okay. And then your order book is quite clearly down year on year and from the end of last year as well. How is your workload in different units as we speak?

Speaker #1: Yeah, that varies also. And this is, of course, part of the unfortunate measures as well, which have had to be taken, which is that we have temporary layoffs ongoing now.

Mika Saariaho: Yeah, that varies also, and this is of course part of the unfortunate measures as well we have had to take, which is that we have temporary layoffs ongoing now. The whole Finland operations are subject to that consideration, so that impacts different departments differently. There is quite a lot of temporary layoffs which are taking place for us to manage this cost side, because we cannot afford as a company, obviously, that those variable costs become fixed costs. There is no other way. Workload is varying, I can say. Then there are locations or other departments where actually it is fully loaded. We still are getting some orders in, so this EUR 18 million also was good orders for some part of the operations which we got in Q2. So they might be fully occupied to work on those orders. So it really varies.

Speaker #1: The whole Finland operations are subject to that that consideration. So that impacts different department differently. So there is quite a lot of temporary layoffs which are taking place for us to manage this cost cost side.

Speaker #1: Because we cannot afford, as a company, obviously, that those, let's say, variable costs become fixed costs. So there's no other way. So workload is varying, I can say.

Speaker #1: There's and and then there are locations or other departments where actually it's fully loaded. We we still are getting some orders in. So so this 18 million also was good orders for some some part of the operations which we got in in second quarter.

Speaker #1: So they might be fully, fully, fully occupied to work on those orders. So it really varies. The message we can give, and that's the message—we are managing this very proactively.

Mika Saariaho: The message we can give, and that is the message, we are managing this very proactively. So that is the approach we have taken, and it also requires some tough management from that point of view.

Speaker #1: So that's the that's the approach we are taken. And it it also requires some some tough tough management from that point of view.

Speaker #2: I'm going to look at your personnel cost figures in Q2. I see about a €1 million increase in staff costs year over year. What is the reason for that?

Antti Viljakainen: But when I look at your personal cost figures in Q2, I see like a EUR 1 million increase in staff cost year-over-year. What is the reason for that?

Speaker #1: Okay that's a good question. Maybe I don't know if if we lays able to explain this. I think it's primarily related to the accruals and I think that comparables in the prior year were a bit like abnormally like on abnormal level because of those and and primarily the bonuses and such what we accrue on a yearly yearly basis.

Mika Saariaho: Okay, that is a good question. Maybe, I do not know if Ville is able to explain this.

Ville Halttunen: I think it is primarily related to the accruals, and I think that comparables in the prior year were a bit on abnormal level because of those, and primarily the bonuses and such what we accrue on a yearly basis. So the underlying development is not such what you see in the P&L.

Speaker #1: So the underlying development is is not not such what what you see in the P&L. So we don't so I I guess and you can see that also in the personnel numbers.

Mika Saariaho: You can see that also in the personnel numbers. So at least that part of fixed cost, it has been very flat now. The same number of people working, and they have their salaries and travels and other things. I do not see that. Also we have continued to invest into other operations and development work in a pretty similar way, which you can see both on the R&D investment and some of the other things that we are disclosing. I do not see a big difference there. Overall, that level is, I think we want to maintain the focus on the R&D and development work because we believe that for sure this market will recover at some point, and we want to be strong in this at that moment.

Speaker #1: So at least that part of the fixed cost—there's no, no, it's been very flat now. The same number of people are working, and they have their salaries and travel and other things.

Speaker #1: So, I don’t see that. And also, we have continued to invest into other kinds of operations and development work in a pretty similar way, which you can see both in the R&D investment and some of the other things that we are disclosing.

Speaker #1: So I don't see a big difference there. And overall, at that level, I think we want to maintain the focus on the R&D and development work, because we believe that, for sure, this market will recover at some point, and we want to be strong in this at that moment.

Speaker #2: Okay, thank you. That's all from me.

Antti Viljakainen: Okay, thank you. That is all from me.

Speaker #1: Thank you, Auntie. Any questions from...

Mika Saariaho: Thank you, Antti. Any questions from-

Speaker #2: Yes, we have two questions, so let me read them here. Could you give us some more color on the development of order intake during the second quarter?

Ville Halttunen: Yes, we have two questions. Let me read here. Could you give us some more color on the development of order intake during Q2? Have you seen meaningful improvement in the customer activity or decision-making, particularly in the wood processing? Do you feel that the recovery is now becoming more visible?

Speaker #2: Have you seen meaningful improvement in the customer activity or decision-making, particularly in the wood processing, and do you feel that the recovery is now becoming more visible?

Speaker #1: Okay maybe maybe it's it's a bit of the same question which I fully understand that this is this is the every everybody's interested on on on that one and but maybe if I if I once again repeat 18 million of orders in the second quarter things were pushed from second quarter further to to to the other quarters.

Mika Saariaho: Okay. Maybe it is a bit of the same question, which I fully understand that everybody is interested on that one. But maybe if I once again repeat EUR 18 million of orders in Q2, things were pushed from Q2 further to the other quarter. So let us see when we start realizing those. But we did see improving activity, as I said, and activity is not necessarily just the order intake, but us knowing that they have moved in our sales funnel that we have further in the process, closer to the decision point. So we clearly see that happening, and we hope that that is a sign of realizing some of these things. As I said, we see this happening in Europe, which has been some time already the case, but also in North America.

Speaker #1: So let's see when we start realizing those. But we did see improving activity, as I said, and activity is not necessarily just the order intake, but us knowing that they have moved in our sales funnel further into the process, closer to the decision point.

Speaker #1: So we we clearly see that happening and and we hope that that is that is a sign of of realizing some of these things.

Speaker #1: And as I said, we see this happening in Europe—which has been the case for some time already—but also in North America. And I would say, as a new thing, there's been good discussions in Asia Oceania.

Mika Saariaho: I would say as a new thing also, there has been good discussions in Asia, Oceania now in that sense. So overall, I would say some encouraging signs in the activity among our customers.

Speaker #1: Now, in that sense, my overall view is that there are some encouraging signs in the activity among our customers.

Speaker #2: Then there's another question still. Your profitability has held up quite well despite the lower sales volume. How confident are you that this level of profitability can be maintained going forward?

Ville Halttunen: Then there is another question still. Your profitability has held up quite well despite the lower sales volume. How confident are you that this level of profitability can be maintained going forward?

Speaker #1: Well going forward we we hope of course that the the top line is not as low as it is now. So that that will help of course because we have still this profitability lever in in in the top line development.

Mika Saariaho: Well, going forward, we hope of course that the top line is not as low as it is now. So that will help, of course, because we have still this profitability lever in the top-line development. I would need to say, and we are saying that the current level of EUR 33 million of net sales in a quarter, normal expectations maybe shouldn't be quite that we get 12% comparable EBITDA, because 12% is the target over the cycle, which means that there are good times and not so good times. I would still describe, and hopefully we can confirm it in hindsight in a couple of years' time, that this was the downtime and the difficult time, and we maintained the 12%.

Speaker #1: I would need to say and we are saying that that the current level of with 33 million euros of net sales in a quarter normal expectations maybe shouldn't be quite that we get 12% comparable EBITDA because 12% is the target over the cycle which means that there are good times and and and not so good times.

Speaker #1: And I would still describe and hopefully we can confirm it in hindsight in a couple of years time that this was the downtime and and the the difficult time and and we maintained the 12%.

Speaker #1: So, the project releases that we've been able to do are a sign of the operational excellence and efficiency that we have. But one can't count on that happening every quarter or so.

Mika Saariaho: The project releases that we have been able to do are a sign of operational excellence and efficiency that we have, but one cannot count on that happening every quarter or so. Probably this is a little bit too high profitability with the current top line.

Speaker #1: So probably, this is a little bit too high profitability with the current top line.

Speaker #2: All right, that's all from the chat.

Ville Halttunen: All right. That is all from the chat.

Speaker #1: Okay, thank you very much. Thanks to the audience online and the audience here. I will see you again at the third quarter release, at the latest.

Mika Saariaho: Okay, thank you very much. Thanks to the audience online and audience here, and I will see you again in the Q3 release at the latest. Thank you very much.

Speaker #1: Thank you very much.

Ville Halttunen: Thank you.

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