Order book empty? Negotiations concern a total of approximately 400 people…
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No need to panic, just normal Raute operations; similar negotiations have been conducted in at least the two previous years:
Raute initiates change negotiations concerning temporary layoffs - Raute 2023
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I mainly wonder if Raute’s stock price got a head start, if and when the same trend continues. Time will tell.
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The order book is still at a good level, but not enough new business is coming in. Q1 was very poor, and this latest news regarding the analysts is also a disappointment. In a year, the stock will be at 10 euros again if new business doesn’t start coming in soon.
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I’m waiting for @Antti_Viljakainen’s comments on the matter. Will the view change?
I personally feel that the company’s recent (0-6 months) communication has not been in line with this news.
Here are Viljakainen’s comments as Raute begins change negotiations.
The reason for potential layoffs is the weak order intake at the beginning of the year. Raute’s order book is still at a fairly good level, so in our estimation, workload challenges are primarily directed at the early stages of the delivery pipeline, i.e., engineering work such as design. This phase, while very important in projects, generates only a small amount of revenue, which is why we do not currently see a need to change our forecasts for Raute. However, forecast risks related to 2026 are increasing, as next year’s order book should be built during the end of this year and the beginning of next year in an environment where uncertainty and customer caution remain high.
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It can be found from the rookie’s link. In my opinion, it was quite expected that there would be layoffs in at least some parts of the supply chain, as the order flow has been sluggish for over a year, with the exception of Q4. Of course, if order flows do not pick up at all from recent levels, especially during Q4 and early next year (Q2 and Q3 are unlikely to bring any miracles), the pressure for layoffs would spread more widely across the organization (including production). Thus, forecast risks for 2026 are high, even though forecasts already show a downward trend in both revenue and profit.
Could you elaborate a bit on how you reached this conclusion? I haven’t experienced it that way, and Wednesday’s news was not particularly surprising to me.
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These can be pinpointed chronologically based on news that crosses the threshold of stock exchange announcements. The order book is practically melting away. Pressure on planning and even production should also be evident.
From the news below, numbers can be deducted from the order book balance.
Then an excerpt from the CEO’s comment, taken from the Q1 report.
Overall, recent developments have negatively impacted Raute’s customers’ investment decisions globally. Our customers remain in a waiting state regarding new investment decisions. A broader recovery of Raute’s markets appears to be shifting well into the second half of 2025.
Summary:
- Raute plans to close its Changzhou factory in China
- The Changzhou factory has focused on manufacturing the company’s R3 product category, which consists of Raute’s most affordable technology-level products
- Reasons for the closure include weak demand in China, profitability challenges of the unit, and Raute’s aim to strengthen operational efficiency by concentrating production resources more cost-effectively and increasing production flexibility
- Demand in China has shifted towards simpler and more affordable solutions than the R3 product category, which Raute neither offers nor has a strategic desire to invest in. Outside of China, there appears to still be reasonable interest in R3 products.
- As a result of the decision, write-downs and provisions affecting comparability, estimated at 3.8 million euros, will be recorded
- Following the closure, fixed costs will decrease by approximately 2 million euros annually
- The Chinese market will continue to be served in the future, but local production will cease.
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Daniel already excellently summarized the main points from Raute’s latest announcement, and here are also Chief Analyst Antti’s comments on it 
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This probably won’t hurt Raute, at least:
According to the FT, the EU has imposed tariffs of up to 62.4% on hardwood plywood from China to protect EU production. Imports of softwood plywood will also be monitored more closely. The tariffs are only temporary, and EU producers are pushing for them to remain in force permanently. The EU Commission will decide on this later this year.
EU producers’ sales, production, and profits have declined during 2021-2023, while China’s share of sales has grown to almost a third in the EU region. Perhaps the recent plywood tariffs will support the sales and profitability of domestic producers, from which Raute could indirectly benefit. After all, Europe has been Raute’s largest market, where Raute has held a strong market position.
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Here are Viljakainen’s pre-report thoughts as Raute publishes its Q2 report next week on Tuesday.
We expect the company’s operational earnings improvement to have continued in Q2 as well, even though revenue has likely encountered a growth impediment created by a tough comparable figure and a declining order book. The company reiterates its guidance for the current year. However, the most interesting part of the report is new orders, which we estimate remained at a low level in Q2. Due to the clearly declining order book, concern related to tomorrow (i.e., especially next year) also, in our view, dominates the stock and its valuation (2026e EV/EBIT 6x) for now.
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Tässä on Viljakainen’s quick comments on the morning’s results.
The company’s revenue turned into a steeper decline than we expected, but very strong operational profitability raised the operating result above our expectations. However, the overall picture of the report remained sour in our opinion initially, as new orders clearly fell to a level even lower than our low expectations, with equipment sales likely remaining almost completely stuck. Raute reiterated its guidance as expected, and the development in the early part of the year creates a strong foundation for achieving the targets.
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Antti also interviewed Raute’s CEO Mika Saariaho
Topics:
00:00 Introduction
00:08 Past quarter through the CEO’s eyes
01:05 Flexibility of the cost structure
03:21 What is a good service margin for Raute?
04:16 Order intake
05:32 Potential pent-up demand
06:32 Customers’ investment decisions
07:24 Closure of the China factory
08:52 Reorganization of the international production network
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Viljakainen has made a new company report on Raute right after Q2.
We reiterate our Add recommendation for Raute, but lower our target price in line with forecasts to EUR 17.00 (previously EUR 19.00). In our opinion, the overall picture of the report remained somewhat negative, as the weak order intake kept concerns about next year’s revenue level alive, and the promising profitability improvement from a cyclical resilience perspective did not fully compensate for this. Raute’s valuation is, in our opinion, inexpensive when viewed by all key valuation metrics, even if earnings are expected to decrease next year. Therefore, we see the stock’s expected return, formed by upside potential and dividend, as higher than the required rate of return.
Quoted from the report:
This year’s multiples are very low, but due to earnings likely turning downwards with revenue, they cannot be given much weight. Next year’s multiples, which receive the main emphasis, are around the lower end of the ranges we accept for the company. In the comprehensive spring report, we estimated Raute’s acceptable valuation multiples to be P/E 10x-14x, EV/EBIT 7x-10x. Therefore, we see the stock’s valuation becoming attractive, and in our opinion, a larger and unnecessarily large earnings drop than we estimated has been priced into the stock. Relatively, the stock is also valued several tens of percentage points below its peer group. This is too much, even though a certain discount is certainly justified due to Raute’s business being more volatile than the peer group for now (the peer group is also starting to be expensive).
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Aki has written interestingly about Raute. 
*Raute is likely at a cyclical bottom right now. Yet it is able to make a profit. And it is priced at €14.20 with a 2025 P/E (Price-to-Earnings) of 6 and EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization) of 2.5. Up until writing this, I tried to pull my hair out. When I couldn’t find any, I settled for
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Raute’s positive earnings surprise in terms of comparable operating profit, revenue falls slightly short of guidance. Order intake also improved during Q3 compared to the beginning of the year. Regards, P/E 6.
2025-10-20 14:40:00
Raute Corporation, Stock Exchange Release, Inside Information 20 October 2025 at 3:40 p.m.
Inside Information, Profit Warning: Raute updates its guidance - comparable operating profit remains strong as revenue falls short of earlier estimates
New guidance for 2025:
Raute’s revenue for 2025 is estimated to be EUR 175-190 million and comparable operating profit to be EUR 22-27 million.
Previous guidance for 2025 (published 25 April 2025):
Raute’s revenue for 2025 was estimated to be EUR 190-220 million and comparable operating profit to be EUR 20-27 million.
Reasons for the new guidance:
Raute’s project deliveries have continued successfully, but a larger portion of the order book than previously expected is anticipated to be recognized as revenue only in the following year. New orders improved in the third quarter compared to the beginning of the year, but this is not expected to offset the impact of the revenue shift. At the same time, Raute’s continued strong operational performance enables the lower end of the comparable operating profit guidance to be revised upwards.
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Antti has had time to write a report after the profit warning.
We reiterate our target price of 17.00 euros and our Add recommendation for Raute, which issued a profit warning yesterday. Raute’s revenue guidance decreased, but this was due to a shift in the timing of project deliveries, and the company also confirmed that its order flow had recovered from the low H1 levels in Q3. We did not make any changes to our forecasts. In our opinion, the stock’s valuation is still quite moderate (2026e: EV/EBIT 6x), even though the order book, which has likely remained significantly low, still raises concerns about tomorrow (i.e., next year). However, in our view, the expected return, consisting of the upside potential from the stock’s low valuation and the dividend, is still higher than the required rate of return.
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July-September 2025 in brief
New orders totaled 38 MEUR (15)
Order book at the end of the review period was 108 MEUR (188)
Net sales were 43.7 MEUR (46.4)
Comparable EBITDA was 6.5 MEUR (6.3) and 15.0% (13.5) of net sales
Comparable operating profit was 5.4 MEUR (4.9)
Operating profit was 5.1 MEUR (4.8)
Comparable earnings per share were 0.69 euros (0.74)
Earnings per share were 0.65 euros (0.73)
Equity ratio at the end of the review period was 64.9% (54.3)
January-September 2025 in brief
New orders totaled 66 MEUR (72)
Net sales were 139.3 MEUR (148.1)
Comparable EBITDA was 20.4 MEUR (14.7) and 14.6% (9.9) of net sales
Comparable operating profit was 16.2 MEUR (10.6)
Items affecting comparability amounted to 3.4 million euros, of which items affecting EBITDA were -2.4 million euros and impairments affecting operating profit were 1.0 million euros. These were mainly related to the closure of the China factory.
Operating profit was 12.9 MEUR (10.2)
Comparable earnings per share were 2.08 euros (1.53)
Earnings per share were 1.53 euros (1.48)
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Raute is also initiating change negotiations regarding possible temporary layoffs, with no dismissals in sight.
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