continuous development generates future success ANNUAL REPORT 2008 1 RAUTE 2008 contents raute in brief review by the president and ceo financial review market review strategy Business review products and services product development personnel environment Board of directors executive Board information to shareholders addresses 4 6 8 10 13 16 20 22 24 27 30 32 34 37 raute corporation's consolidated financial statements are published as an appendix to this annual report. raute's financial publications can be ordered in print or as printouts by email from ir@raute.com or by phone from +358 3 829 11. OUR high-TEch PROdUcTs ANd sERvicEs ENAbLE OUR cUsTOmERs TO AchiEvE A PROfiTAbLE ANd ENviRONmENTALLy sUsTAiNAbLE wOOd PROdUcTs PROcEss. visiON raute's vision is to be the world's leading supplier of technology and services in its field. 2 missiON raute generates added value for its customers' businesses by supplying state-of-the-art technology and services to facilitate the profitable and environmentally sustainable production of wood products. vALUEs · the customer · trust in people · continuous development · the environment 3 3 RAUTE iN bRiEf in 2008, raute celebrated its 100-year journey together with its customers and partners. the photo is taken at the main festivities in the sibelius Hall in lahti on 21 august 2008. 4 100 years today, raute, founded in 1908, is a global technology company. raute manufactures mills, production lines as well as individual machines and equipment for the veneer, plywood and lvl (laminated veneer lumber) industries. raute's technology offering covers the customer's entire production process, ranging from raw material processing to the finishing and packaging of end products. additionally, raute offers technology services, such as maintenance, spare parts, equipment modernization, consulting, training and machinery reconditioning services. of tecHnology and eXpertise OUR sTATE-Of-ThE-ART TEchNOLOgy ANd vERsATiLE sERvicEs wiLL cONTiNUE TO PROvidE OUR cUsTOmERs' bUsiNEssEs wiTh AddEd vALUE, ALsO fOR ThE NExT 100 yEARs. raute's strengths include its in-depth knowledge of the processes and operations of its customers, leading-edge technologies, and solid project skills. the group has production units in finland, canada and china. the company's sales and service network has a global reach. raute's net sales in 2008 totaled eur 98.5 million. the company had 573 employees in 8 countries. an average of 100 raute employees worked on long-term customer projects around the world. the company's shares have been listed on the nasdaQ omX Helsinki oy since 1994. 5 REviEw by ThE PREsidENT ANd cEO investments, sudden cHanges and centennial celeBrations 2008 wAs A yEAR Of UNcERTAiNTy ANd sUddEN chANgEs. This hELd TRUE fOR ThE gLObAL REAL EcONOmy, ThE fiNANciAL mARkETs, As wELL As fOR RAUTE's bUsiNEss OPERATiONs. mEANwhiLE, wE wERE LAyiNg ThE fOUNdATiONs fOR fUTURE sUccEss AT 100-yEAR-OLd RAUTE. A gOOd ORdER bOOk iN EARLy 2008 We began the year in a confident frame of mind. our order book was on a good level in terms of volume and quality. at the start of the year we received a fair number of new orders and several larger projects were under negotiation. our technology services were also in demand. due to the ongoing and completed development projects from the past few years, the quality and efficiency of our operations were better than before. in north america the plywood industry's market situation weakened dramatically already in 2007, and as a result, investment activity plummeted to an extremely low level. already during the first months of 2008, we began receiving some weak signals, especially in the form of a decrease in the volume of construction activity, indicating the spread of the downturn to other market areas. during the summer, the demand for both plywood and lvl (laminated veneer lumber) began to fade. the weakening situation continued for the rest of the year and the projects in the negotiation phase were postponed for the time being. at the same time, the production capacity utilization rates of our customers' mills decreased. our order book decreased to an alarmingly low level towards the end of the year due to this development. We adapted our capacity to correspond with the situation by utilizing the flexibility offered by our partner network. We were regrettably forced to temporarily lay off personnel and terminate contracts in all of our finnish units and in most of our overseas units. the most important means for adapting to the weakened demand were, however, the structural reorganization measures of our resources aimed at improving and optimizing our service offering at a lower level of business activity. sUbsTANTiAL iNvEsTmENTs iN PROdUcTiON ANd PROdUcT dEvELOPmENT during 2008, we worked hard to secure our success in the future. investments made in production and product development were exceptionally large. in addition, we focused significantly on our personnel, particularly in market areas in which we believe we can achieve growth in the future. on the part of our own production, we continued to focus on our core activities. at our main production unit in nastola we invested in, for example, heavy machining equipment. We have ascertained that our production work which requires specialized machinery and high quality is competitive also in finland. We also developed our shanghai unit into a procurement and production channel for parts and subassemblies for which the cost level is too high in finland. in fact, we dEmANd REdUcEd by fiNANciAL cRisis in september the global financial crisis began in earnest. many of our customers found it difficult to obtain financing for their projects. 6 have swum against today's outsourcing tide in shanghai. We have reintroduced into our production process some of the tasks and work stages which we had earlier outsourced. Besides achieving a lower cost level, we have been able to improve the quality and delivery accuracy of our products. during 2008 we invested a record-breaking eur 4.9 million, or five percent of our net sales in product development. this is the most powerful statement we can make to show our belief in the future of our industry and our commitment to achieving our business objectives: we aim to be the leading provider of technology and services in our field. We reinforced our presence in our most potential markets in russia, asia and south america by hiring and training new personnel. i believe that our investments will produce results in the years to come, despite the present somber outlook. continued participation in helping to make raute's success a reality. tapani Kiiski president and ceo RAUTE hEAds TOwARds ThE fUTURE raute turned hundred years during the past year. We celebrated this significant achievement in all of our units together with our personnel, customers, owners, suppliers and partners. the most important celebration was, however, the successful and high-quality work we performed during the year to serve our customers and to secure our own future. amidst our celebrations we stated together that raute's values ­ the customer, trust in people, the environment and continuous development ­ are the right ones for steering the development of our business operations in the future. 2009 began with an exceptionally low order book and under a cloud of uncertainty. the fact is, however, that this economic downturn will pass and be followed by a new period of growth. i am concerned that the present negative economic situation will affect raute's operations further into the future than just the ongoing year. 2009 is destined to be a difficult year for us and we will not be able to reach our strategic targets concerning growth and profitability. By utilizing the investments we have made and by working for the good of our customers, i believe that we will come through this situation stronger than ever before. i thank all of you, both raute employees and partners, for the past year and the 99 before that, and for your 7 fiNANciAL REviEw year 2008 · the financial crisis which expanded to global proportions, and the weakened market situation lowered demand for wood product technology and services. · the good profitability development in the first three quarters broke off due to the strong decrease in net sales in the fourth quarter. · net sales down 11% due to the weak market situation and the low amount of new orders. · operating profit down 27% due to the low net sales. · the order book decreased to a low level and year 2009 will be challenging. · thanks to its strong financial position, raute is key figures net sales, meur change, % exported portion of net sales, meur change, % operating profit, meur change, % profit before income taxes, meur roi, % roe, % equity ratio, % order book at dec. 31, meur order intake, meur earnings per share, eur equity per share, eur dividend per share, eur dividend per profit, % number of personnel at dec. 31 personnel average 2008 98.5 -11.1 82.7 -14.6 6.3 -26.7 6.9 19.4 14.0 60.5 24 67 1.18 8.57 0.70* 59.4 573 585 2007 110.8 4.3 96.8 1.0 8.6 90.7 9.0 29.2 21.1 70.3 56 90 1.65 8.29 1.00 60.7 570 575 well-equipped to cope with the economic recession. · the strong market position and development *The Board of Directors' proposal to the Annual General Meeting efforts made in operations and products ensure that raute's ability to respond to the growing demand is excellent when the markets recover. NET sALEs, EUR million 120 100 80 60 40 20 0 NET sALEs by PROdUcT AREA technology services 26% project deliveries 74% 2004 2005 2006 2007 2008 8 ORdER iNTAkE qUARTERLy, EUR million 35 30 25 20 15 10 5 0 Q1 Q2 project deliveries Q3 Q4 technology services 35 30 25 20 15 10 5 0 Q1 2007 NET sALEs qUARTERLy, EUR million Q2 2008 Q3 Q4 OPERATiNg PROfiT, EUR million 10 NET chANgE iN cAsh ANd cAsh EqUivALENTs, EUR million 15 12 8 9 6 6 3 0 4 -3 -6 2 -9 -12 0 2004 2005 2006 2007 2008 -15 2004 2005 2006 2007 2008 EARNiNgs / shARE, EUR 2.00 30 25 1.50 20 1.00 15 10 0.50 5 0.00 0 RETURN ON iNvEsTmENT, % 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 EqUiTy RATiO, % 80 70 60 50 40 30 20 10 0 2004 2005 2006 2007 2008 100 0 400 300 200 600 500 NUmbER Of PERsONNEL AT dEc. 31 2004 2005 2006 2007 2008 9 mARkET REviEw increased uncertainty in tHe marKets wE ARE A gLObAL LEAdER iN OUR fiELd. wE ARE PARTicULARLy cOmPETiTivE iN mAjOR PROjEcTs fOR ThE vENEER, PLywOOd, ANd LvL iNdUsTRiEs. 10 iNcREAsEd UNcERTAiNTy iN ThE mARkETs £ The growth of the global economy has slowed down considerably. £ The financial crisis has made it more difficult for customers in the plywood and LvL industries to make investments. £ demand for wood products technology and supporting services is most active in Russia. raute serves the veneer, plywood, and lvl (laminated veneer lumber) industries with a comprehensive, global technology and service offering. raute's customer industries manufacture wood-based panel products, which are mainly used in investment commodities. their most important customers are the construction, transport, furniture, and packaging industries. this makes raute's customers dependent on fluctuations in the fields of construction, housing-related consumption, international trade, and transportation. erations and maintain their competitiveness remained unchanged or was even higher than normal. wEAkENEd EcONOmic ANd fiNANciAL mARkET siTUATiON sLOwEd dOwN ThE mARkETs in 2008, business in the construction and transport industries slowed down on a global scale. the outlook of the economy weakened and the financial crisis made it more difficult to receive financing which in turn reduced the demand for wood products and was also reflected in the investment decisions made in the plywood and lvl industries. the prices for plywood remained at a normal level throughout the year, but the plywood mills were forced to adapt their production levels to correspond with the lowered demand. the demand for lvl is more strongly dependent on the volume of activity taking place in the construction industry. the market situation for lvl was difficult, and the production capacity of almost all lvl mills was underutilized, especially towards the end of 2008. the prices for lvl remained at a normal level throughout the year. dEmANd gUidEd by cUsTOmERs' ObjEcTivEs TO imPROvE OPERATiONAL EfficiENcy, PROdUcTiviTy ANd qUALiTy in addition to the demand for their end products, raute's customers' investments in new production capacity are governed by the availability and location of raw materials. customers seek to continuously increase the efficiency of their production and improve their productivity and the quality of their end products. tough competition and strict quality standards have resulted in increasingly higher demands on production technology. compared to new technology, old equipment and machinery are no longer competitive and their useful life becomes shorter. technological development in itself creates fresh demand for both new investments and modernizations. the customers' aim to enhance their operations is also reflected in the demand for technology services. in the wood products industry, service outsourcing is only now getting started, and maintenance outsourcing, for example, is expected to increase in the future. due to the weakened market situation for plywood and lvl, the need to build new production capacity was low in 2008. customers' need to enhance their op- RAUTE cOmPETiTivE iN miLL-scALE dELivERiEs raute's position is strongest as a supplier of mill-scale projects to the veneer, plywood, and lvl industries. raute's competitors are mainly small or medium-sized companies that operate locally or regionally and mainly focus on only one or a few processes and technologies. raute's competitive advantage lies in its clear focus on serving the wood products industry exclusively, which enables the company to offer customers unique competence in enhancing processes and generating added value. raute's comprehensive product and service offering and extensive experience help customers to improve their productivity, profitability, and competitiveness. 11 mARkET REviEw in its biggest customer industry, the plywood industry, raute holds a 15­20 percent market share, which makes it the global market leader. the plywood industry machinery market is estimated to amount to some eur 500 million. raute also has a strong position as a supplier to the lvl industry. approximately half of the lvl manufactured in the world is produced on machines supplied by raute. mAiN fAcTORs AffEcTiNg ThE dEmANd · changes in the demand for customers' products · customers' need to increase production efficiency and improve quality · location and quality of wood raw gROwTh POTENTiAL iN RUssiA ANd ThE sOUThERN hEmisPhERE the strongest production capacity increase for raute's customers is taking place in areas with abundant underutilized wood resources. raute sees its greatest market potential in the emerging markets of russia, asia and south america. Russia is a strong market area for raute. russian plywood production has doubled over the last five years. the extensive installed equipment base is also paving the way for the growth of raute's technology services in the area. Europe has seen an exceptionally high increase in new production capacity in recent years. plywood manufacturers have ensured their competitiveness by developing new products and improving product quality. in addition, the structural change in the mechanical wood processing industry is creating new opportunities for development in the field. investments aimed at improved production efficiency and veneer quality provide opportunities for raute. in addition to new investments, raute has focused on the improvement of production efficiency and systematic maintenance. south America is one of the biggest growth areas in plywood production. opportunities are offered by the structure of the local forest industry, abundant forest plantation wood resources and investments made in products with a high degree of processing. raute has a strong position in chile and promising deliveries to Brazil. growth is expected to continue in the area. North America is the world's second largest plywood producing area. the equipment market is mainly con- material · technological development · outsourcing of technology services trolled by local players. the market has been slow due to the low level of construction activity, and for several years now, the weak market situation has caused investments to be focused on smaller modernization projects. raute sees growth potential in comprehensive, strategic investments and technology services, such as modernizations and spare parts sales. china is a major plywood producing area, where up to one-third of the world's plywood is produced. its production is based on old and manual labor intensive technology. small, local machinery manufacturers hold a strong position. However, more stringent requirements set for end products offer raute opportunities. in south-East Asia, Australia and New Zealand, the growth of plywood production is based on plantation forests. companies in these countries are expected to invest more in the future, especially in products with a high degree of processing. the lvl industry is a relatively new field. lvl was developed in North America in the 1970s. north america still accounts for 90 percent of worldwide lvl production. other producers include finland, Japan, australia, new Zealand and russia. further information on raute's strategy on pages 13­15. 12 sTRATEgy industry leader tHrougH state-of-tHe-art tecHnology and service £ continuous improvement of profitability maintains competitiveness. £ growth through the emerging markets. £ challenge of adapting to cyclicality. 13 sTRATEgy iNdUsTRy-LEAdER ThROUgh sTATE-Of-ThE-ART TEchNOLOgy ANd cUsTOmER-ORiENTEd sERvicE raute's objective is to be the world's leading supplier of technology and services in its field. raute is the global market leader in its largest customer sector, the plywood industry, with a 15­20 percent market share. raute's position in the lvl (laminated veneer lumber) industry is especially strong, as approximately half of the lvl manufactured in the world is produced on machines supplied by raute. well managed growth according to raute's estimate, the total markets the company serves are growing at a rate of 3­4 percent annually, viewed over the economic cycle. By increasing its market share with the help of properly targeted investments, the company tries to achieve a faster growth rate than this. the key to its growth potential lies in raute's strategic choices. raute's objective is to achieve growth in the customer industries of its choice. raute has a proven track record in its mill-scale projects for the plywood industry and its leading position in deliveries within the lvl industry. raute is looking towards russia, south america and asia in its aim to achieve regional growth. raute also aims to increase its business operations by introducing to the market innovations that will improve customers' competitiveness and by developing its technology services offering. the added value that raute's technology solutions offer customers has a direct impact on the company's volume of demand. TEchNOLOgicAL ExPERTisE ANd LOcAL PREsENcE AT ThE cORE Of RAUTE's sTRATEgy the customers' needs are the starting point for product development. raute supports its customers in achieving a profitable and environmentally sustainable wood products process. the company's operations are based on high technology, local services and presence, as well as substantial expertise and high-quality work. raute is committed to upholding its customer-orientation throughout its operations. ObjEcTivEs AssisT iN AchiEviNg sTRATEgic iNTENT the company has defined three key strategic objectives for achieving its strategic intent. fiNANciAL TARgETs sUPPORT sTRATEgic ObjEcTivEs raute's financial target is to: · Improve profitability and retain a good level over the entire economic cycle. · Increase sales faster than the market growth rate. · Maintain good financial solidity and offer investors a competitive return. raute exercises an active dividend policy. its aim is to ensure competitive returns for its investors. dividend payment takes into account future investment needs and the goal of maintaining a solid equity ratio. due to the nature of the project business, the dividend is not directly tied to the annual result. continuous improvement of profitability raute has focused on its core competencies, i.e. the production technologies for veneer, plywood and lvl. profitable operations are based on correctly priced products which significantly benefit the customer. the timing of large individual projects can have a significant impact on the company's profitability in the short term. the company's objective is to increase the efficiency of its operations by investing in quality and persistently developing its partner network. profitability is also being developed by deepening customer relationships and creating new contract partnerships. Enhanced adaptation to cyclical economic fluctuations raute's goal is to adapt to cyclical economic fluctuations by developing its partner network, as well as by increasing the efficiency of its own operations and improving its internal expertise. the partner network enables the company to adapt its cost-efficiency and production capacity to fluctuations in demand and the order book. the technology services offered by the company also balance the seasonal fluctuations in its project operations. wE Aim TO AchiEvE PROfiTAbiLiTy ANd gROwTh ThROUgh OUR sTRONg ExPERTisE iN TEchNOLOgy, OUR LOcAL sERvicEs ANd cUsTOmER ORiENTATiON. 14 imPLEmENTiNg ThE sTRATEgy iN 2008 PROfiTAbiLiTy dEvELOPmENT cONTiNUEd profitability remained on a good level during the first three quarters of 2008. this resulted mainly from a favorable product mix in the order book and the success of the company's efficiency and work quality. profitability was also improved by earlier investments in the partner network. the operations at the plant in china were expanded during the year. in addition, the company succeeded in developing its customer relationships and customer satisfaction, as well as reducing quality costs. during the last quarter, net sales decreased from the level attained earlier during the year and profitability weakened. this was caused by the sudden decline in the market since the summer. due to the slowing down which took place during the latter part of the year, the company did not meet its profitability objectives for the whole year. ket, as well as the uncertain situation in the financial markets, complicated the financing situations of many customers and they postponed the decisions to initiate their planned projects. due to the weakened demand, raute did not meet its growth objectives for the whole year. AdAPTATiON mEAsUREs fOR fLUcTUATiONs iN ThE EcONOmic cycLE due to the financial crisis and the weakening of the global economy, the main strategic theme for the end of 2008 became adapting to cyclicality. despite raute's improved ability to react to fluctuations in the economic cycle due to the development of its partner network and investment in its technology services, the lowering of the demand was so strong, that the improved flexibility wasn't enough. in the last part of the year the company was forced to resort to short-term adaptation measures in its finnish units. already during the spring, operations in the north american units were adapted to the market situation, which is expected to remain weak at least until 2010. gROwTh ObjEcTivEs wERE NOT mET the key focus area at the start of 2008 was growth. especially the emerging markets, for example russia, were seen as having potential. at the beginning of 2008, the order book was on a good level but weakened alarmingly towards the end of the year. the sudden, clear downturn in the mar- AdAPTiNg TO cycLicALiTy As mAiN ThEmE fOR ThE NEAR fUTURE the weakening of the market situation will not alter raute's strategy. challenging in 2009 is adapting to the significantly weakened investment demand. the willingness of raute's customers to make large investments has decreased. the demand for spare parts and maintenance services is also lower due to the low utilization rates of the customers' production facilities. the demand for the continued improvement and developmental maintenance of machines and equipment, on the other hand, is expected to remain on a good level even in the present market situation. recovery, quality and productivity are important factors for customers, whatever the circumstances. in 2009, raute will continue to invest in improving its competitiveness by developing and increasing the efficiency of its operations. product development will also have a central role to play in the tightening competition. sTRATEgy Profitable and environmentally sustainable manufacture of wood products PROfiTAbiLiTy Leading supplier of technology and services gROwTh AdAPTATiON TO cycLicAL EcONOmic fLUcTUATiONs global technology, local services customer orientation full-service concept Product development quality Expertise further information on raute's financial development on pages 8­9 and business operations on pages 16­19. 15 bUsiNEss REviEw groWtH tHrougH tHe emerging marKets OUR bUsiNEss cONsisTs Of PROjEcT dELivERiEs ANd TEchNOLOgy sERvicEs. 16 gROwTh ThROUgh ThE EmERgiNg mARkETs £ demand for line-scale and modernization projects is good. £ No significant changes took place in the development of sales prices. £ Raute's profitability was improved by developing the partner network and investing in product development. raute's business consists of providing project deliveries and technology services to the wood products industry. project deliveries form the foundation of raute's business. project deliveries encompass complete mills, production lines, and individual machines and equipment. in the form of installed equipment bases, they create potential for technology services sales and thus for the creation of long-term partnerships. technology services include maintenance, spare parts services, modernization, consulting, training, and machinery reconditioning services. raute's net sales in 2008 were eur 98.5 million (meur 110.8). project deliveries accounted for 74 percent (74%) and technology services for 26 percent (26%) of net sales. vestments, and the order book decreased to an alarmingly low level towards the end of the year. although the willingness to make large investments has decreased among customers, the need and willingness to invest in the continuous development and preventive maintenance of machinery and equipment is expected to continue also in the future. this will create demand for raute's products and services. demand in north america slowed down already in 2007, and this resulted in the adaptation of operations there in spring 2008. likewise, the units in finland had to carry out some short-term adaptation measures towards the end of the year. NET sALEs, EUR million 120 sTRENgThENEd PREsENcE iN ThE EmERgiNg mARkETs raute strengthened its global presence during the year, especially in the emerging markets. operations were expanded at the company's chinese plant. the service center in chile started its operations in early 2008. through the representative office established in moscow, raute further strengthened its presence in the significant russian market. the development and expansion of the partner network continued in russia, china and india, in particular. during the year, raute introduced to the market new innovations and service concepts that support lower energy and raw material consumption. 100 80 60 40 20 0 2004 2005 2006 2007 2008 project deliveries technology services yEAR-ENd ORdER bOOk, EUR million 80 70 dEcLiNiNg wiLLiNgNEss TO iNvEsT measured in net sales, the most important market areas in 2008 were europe and russia. demand was highest for line-scale and modernization projects. several larger-scale projects were also delivered to russia. the order book was good at the beginning of 2008. the increased global economic uncertainty reduced the willingness of raute's customers to make large in- 60 50 40 30 20 10 0 2004 2005 2006 2007 2008 17 bUsiNEss REviEw ORdER iNTAkE, EUR million 150 the company's global presence was strengthened by expanding operations at the plant in china. the investment doubled the production facilities and capacity of the plant. 120 iNvEsTmENTs iN OwN PROdUcTiON cAPAciTy raute developed its own production by increasing automation over the course of the year. production capacity at the nastola plant was developed by acquiring an automatic machining center for large components. the investment secures speedy spare parts deliveries and the availability of critical parts. in addition, an automatic welding unit was acquired for the plant for welding hot plates and frames. 2004 2005 2006 2007 2008 project deliveries technology services 90 60 30 0 vARiOUs-siZEd PROjEcTs bEiNg PLANNEd at the start of 2009, the order book for project deliveries stands at an exceptionally low level. several millscale projects are being planned in various market areas, but their scheduling is still uncertain. the weakened market situation is forecasted to result in a situation where the demand for technology in both the plywood and lvl industries covers the following types of projects: · Relatively small projects with a short payback time, through which the customers aim to achieve savings in raw material, energy, glue and labor costs, are being planned in normal numbers. · Established operators are also planning projects to strengthen their competitiveness and ability to deliver as soon as demand returns to its normal level. · In addition, some projects triggered by the wood export duties are being planned in russia by both russian and external operators. PROjEcT dELivERiEs ­ ThE fOUNdATiON Of RAUTE's bUsiNEss net sales for project deliveries in 2008 totaled eur 73 million (meur 82). the most important market areas for raute's project deliveries in 2008 were europe and russia. the deliveries included projects aimed at both developing existing capacity and building completely new capacity. several large-scale projects were delivered to russia, in particular. the deliveries mainly consisted of manufacturing technology for birch plywood. in europe, there was demand for technology for manufacturing poplar, softwood and birch plywood, in particular, whereas in south america, the emphasis was on manufacturing technology for softwood plywood. during the year, no significant changes took place in the development of sales prices. new orders for project deliveries stood at eur 44 million (meur 61). the low order intake was attributable to the rapid weakening of the market situation during the second half of the year and the resulting postponement of projects in the negotiation phase. the postponements are evaluated to result from the lower demand for plywood and lvl (laminated veneer lumber), more difficult financing of investments and schedule changes typical of project business. TEchNOLOgy sERvicEs TARgET EmERgiNg mARkETs net sales for technology services in 2008 totaled eur 25 million (meur 29). demand remained at a good level in all of the market areas, except for north america. the good demand in the first half of the year weakened in other market areas towards the end of the year due to the low capacity utilization rates of customers' mills. demand targeted training services and modernization projects that improve equipment and operations. demand for maintenance and spare parts services remained at the same level as in 2007. chiNEsE OPERATiONs sTRENgThENEd one of the key focal areas for 2008 was the development, expansion and training of the partner network. measures focused especially on further developing partnerships in russia, china and india. the results of the development work were already apparent in the improved profitability and quality of deliveries during the year. 18 the order intake for technology services in 2008 amounted to eur 23 million (meur 29). several significant group-level contracts were signed during the year. the number of production lines covered by maintenance contracts increased by 19%. dEvELOPiNg cUsTOmER RELATiONshiPs ANd ThE sERvicE NETwORk during the year, raute extended and intensified existing customer relationships. the aim is to further increase the share of close cooperation based on continuous contracts. in 2008, planned cooperation based on contracts accounted for more than 50 percent of maintenance sales. operations based on contracts enable more efficient resource allocation than earlier. raute's presence was strengthened in the emerging markets, in particular. the investment to start up and develop operations at the service center in chile resulted in local service contracts. in russia, the operations of the st. petersburg unit were strengthened by recruiting new people. cONTiNUOUs cUsTOmER RELATiONshiPs cREATE A sOLid fOUNdATiON raute has customer contracts based on continuous cooperation which creates a solid foundation for 2009. although the uncertainty in the global economy continues, some customers will make the most of the slower market situation and develop their own operations. this is forecasted to create demand for raute's technology services, such as training and modernization. the lower uptimes of customers' mills will decrease the demand for both spare parts and maintenance services. the focus of raute's product development is now on services relating to the improvement of energy efficiency and safety, environmental sustainability and the optimization of personnel and production expenses. further information on raute's financial development on pages 8­9. further information on raute's products, services and product development on pages 20­23. 19 PROdUcTs ANd sERvicEs products and services tHrougH tHe life-cycle wE OffER OUR cUsTOmERs TEchNOLOgy ANd ExPERTisE ThAT iNcREAsE ThEiR PROdUcTiON EfficiENcy, RELiAbiLiTy ANd PROfiTAbiLiTy. 20 PROdUcTs ANd sERvicEs ThROUgh ThE LifE-cycLE Raute's core competence encompasses the manufacturing processes of selected wood products. £ The £ company's strengths are its comprehensive technology offering and versatile service offering. £ Raute is involved in the planning stages of the customer's production investment to close cooperation in the form of contract-based maintenance and modernizations. the versatility of the service offering enables a close, long-term cooperation between raute and the customer. the aim of the cooperation is to constantly develop customers' production processes and end products. raute's significant experience, expertise and global reference deliveries form a strong foundation for the development process. the longest customer relationships have began with raw material and market research and continued after the project phase with maintenance and modernization services for the entire life-cycles of the production equipment. this is a definite competitive advantage in comparison to other operators in the field. raute's technology offering covers the customer's entire production process, ranging from raw material processing to the finishing and packaging of end products. a high level of automation, machine vision applications and measurement technology bring added value. the main benefits to customers are a better raw material recovery, improved labor productivity, reduced energy and chemical consumption, higher quality end products, and reduced environmental loading. POTENTiAL fOR TEchNOLOgy sERvicEs ThROUgh PROjEcT dELivERiEs raute's project deliveries include: · complete mills for the veneer, plywood and lvl (laminated veneer lumber) industries · production lines for the above-mentioned mills, such as peeling, drying, lay-up and pressing lines as well as various panel handling and processing lines · individual machines and equipment. raute's goal is to provide customers with added value by offering them production technology that is superior to that offered by competitors. project deliveries also create markets for technology services and thus for building up productive partnerships. raute is able to deliver mill-scale, highly automated projects for the veneer, plywood and lvl industries. TEchNOLOgy sERvicEs iNcREAsE PROdUcTiON EfficiENcy raute's technology services include: · · · · · · maintenance spare parts services modernizations consulting training reconditioned machinery. raute's technology services comprise basic services, value-added services which improve the equipment base or operations, as well as partnership services based on close cooperation. during 2008, new service concepts were actively created within the technology services, especially aimed at improving energy conservation and safety. the latest technological innovations can also be utilized in the equipment base through modernizations. vENEER is a thin, sheet-like wood product, peeled or sliced from a block. LvL (laminated veneer lumber) is a bar-like structural wood product, created by gluing veneers together, laid one on top of and after the other with the grain running in the same direction. PLywOOd is a wood panel product, manufactured by cross-bonding at least three veneers, each laid with its grain at right angles to adjacent layers. 21 PROdUcT dEvELOPmENT added value for customers tHrougH tecHnological innovations ENERgy EfficiENcy is ONE Of ThE kEy fOcUs AREAs fOR OUR PROdUcT dEvELOPmENT. £ Raute is investing heavily in research and product development. £ The objective of the development work is to improve the competitiveness of customers. £ The key focus point in 2008 was on developing solutions which reduce energy and glue consumption and improve yield. raute aims to be the leading supplier of technology and services in its selected wood products technology sectors. the company is investing heavily in research and product development. in recent years, product development has accounted for 3­4 percent of raute's net sales. in 2008, product development accounted for 5.0 percent (3.9%) of the company's net sales. production lines operate and to present various options already at the development phase. When developing technology, focus is placed on the factors in the customers' production process which will lead to improvements in the customers' competitiveness and profitability. By helping its customers succeed and by enhancing the competitiveness of veneer-based products compared to other panel materials, raute also improves its own competitiveness on the market and increases the size of its potential markets. PROdUcT dEvELOPmENT iN cLOsE cOOPERATiON wiTh ThE cUsTOmER the need for developing technology and services arises in the customer base. the best end results are achieved when the customer's expertise in the raw materials and operational environment is combined with raute's knowledge of the necessary processes and equipment. new products and production processes are developed, simulated, and tested in close cooperation with customers to ensure optimum results. in order to improve design quality and to speed up the design process, raute uses three-dimensional product models and animations of the production lines and machines. they help to simulate how the customers' AUTOmATiON imPROvEs wORkiNg cONdiTiONs raute's products also play a role in improving working conditions in customers' mills. automating processes has removed work stages which were difficult, unergonomic and high-risk for employees. in practice this means moving from work stages that were done by hand to process monitoring tasks, thus increasing the well-being and safety of employees. safety aspects, ergonomic solutions and the easy and safe maintenance of production lines play an important role in production process planning. 22 ObjEcTivE: imPROvEmENTs iN PROdUcTiON ANd qUALiTy the most significant cost factors in a plywood mill are wood, labor, glue and energy. in order to improve the customers' prerequisites for achieving profitable production levels, raute is developing solutions for improving raw material recovery and work productivity, energy efficiency, reduced use of chemicals and a higher quality of end product. the development work also aims to reduce the environmental impacts resulting from the customer's operations. research and product development at raute involves designing new products, improving existing products, as well as developing technology services, such as maintenance and modernization products. product improvements made at different life-cycle stages, as well as regular maintenance, are important ways to maintain the profitability of production. modernizing the machine base with the most up-to-date technology helps to achieve significant improvements in production and quality. RAUTE's fORmULA fOR sUccEss REcOvERy + + qUALiTy PROdUcTiviTy x cAPAciTy = PROfiTAbLE PROdUcTiON terial use and increases work productivity. the aim of reducing glue consumption is targeted through a new liquid extruder gluing method. using machine vision and robots for different work stages offers new process development possibilities. raute has implemented robot technology in, for example, lay-up, and the patching and grading of veneer. during 2008, raute also presented a new peeling line concept which was designed for peeling small-diameter hardwood, especially for the russian markets. the concept can also be applied in the installed base as a modernization. in 2009, the focus areas of product development will be, for example, the optimization of raw materials use, solutions for reducing labor costs, as well as reducing glue and energy consumption in the plywood production process. mORE widE-sPREAd UsE Of RObOT TEchNOLOgy important development areas in 2008 included reducing the drying line's energy consumption, the secondary processing of veneer, and measurement and grading methods. new random handling (randoms are pieces of veneer which are smaller than a full veneer sheet and vary in size) and veneer jointing concepts enable the use of smaller pieces of veneer in plywood production, which improves the efficiency of raw ma- further information on raute's environmental technology on pages 27­29. TyPicAL mANUfAcTURiNg cOsTs Of PLywOOd, western cost level meur 5.0 PROdUcT dEvELOPmENT % 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 2004 2005 2006 2007 2008 0.0 Heat 4% electricity 4% glue 11% Wood 64% 4.5 4.0 3.5 3.0 2.5 2.0 labor 17% 1.5 1.0 0.5 0.0 eur million % of net sales 23 PERsONNEL reQuires eXpertise wE wiLL AchiEvE OUR ObjEcTivEs by APPLyiNg ThE bEsT mEThOds fOR mANAgiNg OUR skiLLEd PERsONNEL ANd by ENsURiNg ThEiR wELL-bEiNg. success 24 sUccEss REqUiREs ExPERTisE £ The constant development of expertise is necessary for achieving objectives. £ The Raute Leader program enhances the leadership skills of managers. £ Tacit knowledge is transferred through mentoring. investing in human resources management supports raute's goal of becoming the leading technology and service providing company in its field. a competent and efficient personnel is essential for reaching this goal. the objective of Hr management is to ensure the development of the personnel's competence and that the company has enough professionals in the future. Key focus areas in 2008 were the strengthening of the company's employer image, committing personnel, developing competence and occupational well-being. raute offers its employees interesting and challenging work and excellent development prospects in finland and abroad. retaining a positive employer image is important for raute in the ever-tightening competition for the best professionals. cooperation with schools and universities plays a central role in enhancing the company's employer image. in 2008, a number of school visits and an open day were organized at raute's nastola unit in finland in connection with the company's centennial celebrations. during the course of the year, a number of new professionals were recruited for, among others, production, engineering and project management, as well as technology services jobs at the company's finnish, chinese and russian units. new professionals for production were also sought through apprenticeship training. PERsONNEL iN EighT cOUNTRiEs in 2008, raute employed an average of 585 persons (575). 362 employees worked in project deliveries, 137 in technology services, 43 in management and administration and 43 in sales and marketing. 77 percent of raute's personnel worked in finland, 13 percent in north america, 7 percent in china, and 3 percent in other sales and maintenance companies. 96 percent of personnel had permanent employment contracts. the employment relationships are on average 13.8 years long (14.3 years). the personnel turnover was 10.7 percent (13.1%). the decrease in the order book also caused raute to take adaptation measures in its north american operations during the spring and in the finnish companies towards the end of 2008. ExPERTisE REqUiREs dEvELOPmENT raute develops its personnel's expertise mainly through learning at work, training and networking. additionally, raute supports independent education, such as postgraduate degrees and various further education options. training took up one percent of the company's working hours in 2008. in 2008, the focus points for developing expertise were management and technological expertise. the company's project which aims at strengthening the management skills of supervisors and experts, as well as promoting good management at raute, was continued. the two-year program started in 2007 with the aim of discovering new thought and operating models for managing people. the raute leader program, which consisted of four training sessions, was completed as part of the project. the training included the management of individuals, groups as well as of change. in the fall of 2008, a new future raute leader program was begun, based on the interest and positive RETAiNiNg A POsiTivE EmPLOyER imAgE is EssENTiAL in order for the company to achieve its strategic objectives and to ensure its future competitiveness, it will need new professionals also in the future: wood products and wood technology professionals who understand the needs of customers. succeeding at work requires employees to have good social and language skills as well as technical knowledge. 25 PERsONNEL feedback that the previous program had generated. the program is aimed at future managers and experts whose job description will include management duties. the program includes training and operational models for managing people, business and oneself. supervisory work was also supported through other supervisor training programs. in 2008, focus was placed on the improvement of employees' physical well-being using fitness tests, for example, followed up through fitness programs and by supporting individual exercise. in addition, raute supports recreational activities that maintain the ability to work. these include different kinds of events, as well as sports and exercise courses and clubs. at raute, absences due to illness correspond to the average in the technology industries. absences due to accidents at work are slightly lower than average. the work safety risks assessment project was completed in 2008. its objective was to identify the risks and determine the measures to be taken in risk situations and thus to achieve further improvements in work safety. PERsONNEL by cOUNTRy others 3% china 7% north america 13% finland 77% TEchNOLOgicAL kNOwLEdgE fROm mENTORs another focus point for development was technology. a future challenge for raute is securing expertise and the transfer of tacit knowledge from experienced professionals to their younger counterparts. mentoring was continued during 2008, in which new employees were given the opportunity to work together with more experienced professionals and to make use of their expertise. the technological expertise of the personnel was also developed by organizing internal and external training, for example in peeling technology, automation, hydraulics and design systems. dEvELOPiNg ThE REwARd sysTEm raute's performance-based pay system covers the whole personnel, in addition to which employees can also be rewarded for achieving their personal targets. reforms to the company's reward systems were implemented during 2008 and new models will be introduced during 2009. raute has implemented a sharebased incentive plan during 2006­2008, aimed at the executive Board and key employees, to ensure their commitment to the company. EdUcATiON Of PERsONNEL Basic education 15% university 11% university of applied sciences 16% PRE-EmPTivE OccUPATiONAL hEALTh cARE ANd Ohs the personnel's well-being and ability to work are maintained through occupational health care (oHs), as well as through occupational well-being and occupational health and safety measures according to a plan which is drawn up annually. the occupational health care emphasizes preventive measures that maintain the ability to work. college 30% vocational school 28% AgE disTRibUTiON Of PERsONNEL > 60 years 9% < 30 years 14% 31­40 years 22% Personnel* 2008 personnel 550 average age 45 Women, % 12 years of experience at raute 14 new employment contracts 53 personnel turnover, % 11 training days / employee 2 *Current employment contracts at Dec. 31 2007 548 47 12 14 71 13 3 2006 522 45 12 14 44 8 2 51­60 years 27% 41­50 years 28% 26 ENviRONmENT environmental tecHnology creates competitive edge ThE EfficiENT UsE Of ENERgy ANd RAw mATERiALs, As wELL As miNimiZiNg ThE imPAcT ON ThE ENviRONmENT, ARE ObjEcTivEs shAREd by Us ANd OUR cUsTOmERs. 27 ENviRONmENT ENviRONmENTAL TEchNOLOgy cREATEs cOmPETiTivE EdgE £ The environment is one of the values that guide Raute's operations. £ Raute focuses especially on developing solutions which save raw materials, energy and chemicals. £ Environmentally sustainable technologies are economically profitable for both Raute and its customers. raute has two separate viewpoints from which environmental issues are developed. the company's objective is to reduce its own environmental impact as well as to help customers improve the environmental sustainability of their operations. the environmental impact of the operations can be minimized by monitoring customers' processes and by focusing on the areas which hold the greatest significance for the environment. dures were created that can be adapted to different sites. safety aspects are taken into account when working with the customer, partners and within raute itself. the project was carried out jointly with the tampere university of technology. raute's objective is to continue to develop its working environment both from a production and safety standpoint. environmental impact of raute's operations the environmental impact of raute's operations mainly involves waste management, energy use, chemical management and safety. an environmental management program has been drawn up based on these, which takes into account any potential risks. it defines on a yearly basis the environmental aspects of the company's operations, as well as the objectives and measures concerning the reduction of environmental impacts. the nastola and Jyväskylä production units have isocertified quality and environmental management systems. field surveys are organized at the industrial sites twice a year, the focus being on environmental and safety aspects. the operations and ethical principles of raute's broad, international network of partners and subcontractors are assessed according to standardized criteria. the aim is to ensure the ethical functioning of the entire production chain. AimiNg fOR iNcREAsEd ENERgy EfficiENcy in 2009, raute will be focusing on energy efficiency through various programs and evaluations. raute has extended the voluntary energy efficiency agreement for the technology industry up until 2016. cooperation with other companies will be increased under the agreement. special focus will be placed on energy procurement tenders which will increase long-term cost savings. in addition, raute will increase the efficiency of its raw material sorting and operations linked to quality control. constantly increasing energy prices have necessitated an active search for measures to reduce energy consumption. environmental impact of raute's customers raute takes into account the central environmental impacts of the wood products industry from the customers' point of view. raute helps its customers to function in a more environmentally sustainable way by improving recovery, reducing energy consumption and reducing the use of chemicals, especially glue. tightening environmental standards mean that also the plywood production process will be monitored more closely from the environmental viewpoint. controlling the entire production process creates an advantage for raute in reducing the environmental load. many of raute's new product innovations are classified as environmental technology, and for good reason. cONTiNUOUs wORk fOR ThE ENviRONmENT during 2008, the work towards improving raute's environmental and safety issues was continued. the proportion of recycled waste from the total waste volume remained at approximately 90 percent, the target level. the objective is to reduce the ratio of waste volume and net sales by two percent per year. cost savings were achieved in waste management also by calling tenders for the reception of recycled material. the safety management project begun in 2007 was completed in 2008. new safety management proce- 28 in the plywood production process, most of the energy is used up by the veneer drying process. in 2008, several assessments and development measures took place for reducing energy consumption in both the drying process and other stages. ENviRONmENTAL TEchNOLOgy sOLUTiONs fOR cUsTOmERs the most significant environmental technology results achieved by raute's product development in 2008 were the reduction in energy consumption in the veneer drying process, the jointing and random handling solutions (randoms are pieces of veneer which are smaller than a full veneer sheet and vary in size) improving recovery, as well as a new liquid extruder gluing concept which reduces the amount of glue used. the objective for raute's customers is to continually improve the productivity of their processes. improvements can be achieved, for example, by increasing the life-cycle of a production line by modernizing it, i.e. adding new technology to the existing machinery. modernizations make it possible to increase productivity, improve the quality of end products and minimize the environmental impacts of processes. to ensure their future competitiveness, raute and its customers wish to promote ecological wood construction and the utilization of wood panels in various end-uses. the use of plywood can be increased by, for example, developing new products for projects requiring visual qualities. correspondingly, lvl (laminated veneer lumber) can be used instead of non-renewable materials such as metal or concrete for supporting structures in construction projects. in 2008 raute introduced a new liquid extruder gluing concept which reduces the amount of glue used. 29 gROUP mANAgEmENT Board of directors jarmo Rytilahti b. 1944, m.sc. (econ.& Bus. adm.) chairman of the Board 2004­ member of the Board 2003­ Principal occupation: president of uponor oyj (former asko oyj) 1991­2003 main simultaneous position of trust: member of the Board: Kemppi oy 2003­ renor oy 2004­ polttimo companies ltd 2005­ Raute shares: no holding of shares Remuneration in 2008: eur 39.2 thousand share-based remunerations: no share-based remunerations sinikka mustakallio b. 1952 vice-chairman of the Board 2004­ member of the Board 1998­ chairman of raute corporation's supervisory Board 1996­1998 Principal occupation: president, Wom oy 2001­ main simultaneous position of trust: none Raute shares: 47 240 pcs series K shares 30 862 pcs series a shares Remuneration in 2008: eur 19.5 thousand share-based remunerations: no share-based remunerations ilpo helander b. 1942, m.sc. (eng.) member of the Board 2008­ Principal occupation: president of oy electrolux ab 1991­2004 main simultaneous position of trust: member of the Board: neomarkka oyj 2007­ reka Kumi oy 2007­ teknos oy 2007­ ct-logistics oy 2008­ Raute shares: no holding of shares Remuneration in 2008: eur 15.0 thousand share-based remunerations: no share-based remunerations Holdings of Raute shares on 31 December 2008. The figures include holdings of their own, minor children and control entities. mika mustakallio b. 1964, m.sc. (econ. & Bus. adm.), cefa member of the Board 2004­ Principal occupation: president, mors software oy 2006­ main simultaneous position of trust: none Raute shares: 39 750 pcs series K shares 42 670 pcs series a shares Remuneration in 2008: eur 19.5 thousand share-based remunerations: no share-based remunerations Panu mustakallio b. 1971, m.sc. (eng.) member of the Board 2003­ Principal occupation: specialist, indoor climate technology, Halton oy 2005­ innovation specialist, oy Halton group ltd., 2008­ main simultaneous position of trust: none Raute shares: 12 000 pcs series K shares 15 256 pcs series a shares Remuneration in 2008: eur 19.5 thousand share-based remunerations: no share-based remunerations jorma wiitakorpi b. 1957, m.sc. (eng.) member of the Board 2006­ Principal occupation: president and ceo, patria oyj 2001­2008 main simultaneous position of trust: chairman of the Board: suomen laatuyhdistys ry. 2006­ neomarkka oyj 2007­ member of the Board: Kemppi oy 2008­ teknologiateollisuus ry 2008Raute shares: 1 050 pcs series a shares Remuneration in 2008: eur 16.5 thousand share-based remunerations: no share-based remunerations Auditors anna-maija simola, apa antti unkuri, apa deputy Auditor ernst & young oy 30 Jarmo rytilahti sinikka mustakallio ilpo Helander mika mustakallio panu mustakallio Jorma Wiitakorpi 31 gROUP mANAgEmENT eXecutive Board Tapani kiiski b. 1962, licentiate in technology, m.sc. (eng.) president and ceo, march 16, 2004­ with the company since: 2002­ member of the Executive board: march 16, 2004 Employment history: raute corporation 2002­2004: various positions such as technology director, sales director; Kci Konecranes international plc 1994­2002: various positions, such as cio; Kone corporation, Kone cranes 1985­1994: various positions, such as r&d manager, r&d director Raute shares: 1 000 pcs series a shares Arja hakala b. 1957, m.sc. (econ.), mBa chief financial officer, deputy to president and ceo, october 8, 2003­ with the company since: 1990­ member of the Executive board: January 1, 2001 Employment history: raute corporation 1990­2003: administrative director; luhta oy 1985­1990: controller Raute shares: no holding of shares Petri strengell b. 1962, m.sc. (eng.) vice president, technology and operations, october 11, 2004­ with the company since: 1987­ member of the Executive board: June 1, 2004 Employment history: raute corporation 1987­2004: various positions such as engineering manager, production director Raute shares: no holding of shares Timo kangas b. 1965, engineer vice president, technology services, october 1, 2004 with the company since: 2004­ member of the Executive board: september 22, 2004 Employment history: raute corporation 2004: maintenance service manager; yit corporation, 1999­2004: various positions such as Key account manager, area manager Raute shares: no holding of shares bruce Alexander b. 1959, B.sc. (for.), mBa vice president, north american Business operations president, raute's north american companies, march 6, 2000­ with the company since: 2000­ member of the Executive board: June 1, 2004 Employment history: international forest products ltd. 1988­2000: various positions, such as corporate development manager, divisional manager Raute shares: no holding of shares petri strengell Holdings of Raute shares on 31 December 2008. The figures include holdings of their own, minor children and control entities. 32 tapani Kiiski timo Kangas arja Hakala Bruce alexander 33 iNfORmATiON TO shAREhOLdERs information to sHareHolders raute corporation's series a shares are listed on the nasdaQ omX Helsinki ltd. share quotations can be followed online at www.raute.com. series A share trading code: rutav number of shares: 3 013 597 · votes/share: 1 vote · · by sending a fax to +358 3 829 3582 or by calling +358 3 829 3302 / ms. eija salminen. any proxies should be supplied at the time of registration. raute corporation's articles of association do not specify special procedures for presenting initiatives to the annual general meeting. dividENd the Board of directors will propose to the annual general meeting that a dividend of eur 0.70 per share paid for both series a and K shares. the date of payment is april 16, 2009 and the respective record date is april 7, 2009. dividends will be paid to shareholders who are registered in the shareholders' register maintained by euroclear finland ltd on the record date. series k share number of shares: 991 161 · votes/share: 20 votes · investor relations tapani Kiiski, president and ceo arja Hakala, cfo tel. +358 3 829 11 email: ir@raute.com fiNANciAL iNfORmATiON ANNUAL gENERAL mEETiNg raute corporation's annual general meeting will be held on thursday, april 2, 2009 starting at 6:00 p.m. at congress center fellmanni, Kirkkokatu 27, lahti, finland. to be entitled to attend the annual general meeting, shareholders must be registered in the shareholders' register maintained by euroclear finland ltd at the latest on march 23, 2009. shareholders who wish to attend the meeting must register for it by 4:00 p.m. on friday, march 27, 2009 by writing to raute corporation, p.o. Box 69, fi-15551 nastola, finland, by email to eija.salminen@raute.com, this annual report is published in finnish and english. raute corporation will publish three interim reports, in finnish and english, in 2009: april 29 august 4 october 27 January­march 2009 January­June 2009 January­september 2009 the annual report, the consolidated financial statements, interim reports, stock exchange releases and other information on raute corporation are available in finnish and english at www.raute.com. raute's financial publications can be ordered in print or as printouts by phone from +358 3 829 11 or by email from ir@raute.com. 34 RAUTE is A LEAdiNg TEchNOLOgy cOmPANy iN iTs sEcTOR, sERviNg ThE wOOd PROdUcTs iNdUsTRy wORLdwidE. 35 raute is proud of its over 500 experts who work internationally and develop the best products and services in the sector for its customers. 36 AddREssEs addresses Raute corporation head office and main production plant p.o. Box 69 (rautetie 2) fi-15551 nastola finland tel. +358 3 829 11 fax +358 3 829 3200 www.raute.com Raute corporation jyväskylä plant Hakkutie 3 fi-40320 Jyväskylä finland tel. +358 3 829 11 fax +358 14 445 4429 Raute corporation mecano business syväojankatu 8 fi-87700 Kajaani finland tel. +358 3 829 11 fax +358 8 612 1982 Rws-Engineering Oy tuhkamäentie 2 fi-15540 villähde finland tel. +358 3 829 11 fax +358 3 762 2378 Raute canada Ltd. 5 capilano Way new Westminster, B.c. canada v3l 5g3 tel. +1 604 524 6611 fax: +1 604 521 4035 Raute Us, inc. 50 commercial loop Way suite a, rossville, tn usa 38066 tel. +1 901 853 7290 fax +1 901 853 4765 Raute chile Ltda. Hernando de aguirre 162 of. 704 providencia santiago chile tel. +56 2 233 4812 fax +56 2 233 4748 Raute group Asia Pte Ltd. 35 Jalan pemimpin # 06­02 Wedge mount industrial Building singapore 577 176 tel. +65 625 043 22 fax +65 625 053 22 Raute (shanghai) machinery co., Ltd 18 Building, no. 399, yuan Zhong road nan Hui district, shanghai city, china p.c. 201300 tel. +86 21 5818 6330 fax +86 21 5818 6322 Raute (shanghai) Trading co., Ltd 17 Building, no. 399, yuan Zhong road nan Hui district, shanghai city, china p.c. 201300 tel. +86 21 5818 6330 fax +86 21 5818 6322 Raute corporation moscow Representative Office pyzhevskyi pereulok 6, office 303. 119017 moscow russia tel. +7 495 646 3607 fax +7 495 646 3607 Raute service LLc v.o. srednii prospect, 48 199178 st. petersburg russia tel. +7 812 740 5386 fax +7 812 740 5387 Annual Report 2008 Graphic design and layout: Onnion Ltd Content: Pohjoisranta Oy and Raute Photos: Raute Translation from Finnish to English: Traduct Oy Printing house: Esa Print Oy 37 www.raute.com 38