Valmet Corp · OMXHEX:VALMT
Valmet — Non-Deal Roadshow (February 2016)
97 slides from Valmet's roadshow presentation, February 2016
Slide 1: Valmet – unique offering with process technology, automation and services
Valmet – unique offering with process technology, automation and services Roadshow presentation February 2016
Slide 2: Agenda
Agenda Valmet roadshow presentation 1 Valmet overview 2 Investment highlights 3 Financials 4 Conclusion 5 Appendix 2 February 2016 © Valmet | Roadshow presentation
Slide 3: Valmet overview
Valmet overview Valmet <>
Slide 4: Net sales split in 2015
Net sales split in 2015 Stable business net sales EUR 1.4 billion Orders received Net sales by business line Net sales by area EUR 2,878 million 13% 23% 21% Net sales 10% EUR 2,928 million 39% EBITA before NRI1 11% EUR 182 million EBITA margin (before NRI1) 31% 8% 45% 6.2% Employees Services North A
Slide 5: Our four business lines serve the same customer base
Our four business lines serve the same customer base Services Automation Pulp and Energy Paper Net sales 1.1 bn, 39% Net sales 0.2 bn, 8% Net sales 0.9 bn, 31% Net sales 0.7 bn, 23% • Mill and plant Supplies and develops Technologies and Technologies and improvements automation and information solut
Slide 6: Strong global presence provides a good platform for growth
Strong global presence provides a good platform for growth North America EMEA China • Large installed base to be served • Large installed base to be served • Services growth potential through • Capital project and automation • Machine closures in growing installed base opportunities in pulp, printin
Slide 7: Valmet’s way forward
Valmet’s way forward Our Vision To become the global Our Must-Wins champion in serving our customers Our Strategy Customer excellence Valmet develops and Leader in technology supplies competitive and innovation Our Mission technology and services Excellence in Converting renewable processes to
Slide 8: Financial targets
Financial targets Growth Net sales growth to exceed market growth Profitability EBITA1 before non-recurring items: 6-9% ROCE Return on capital employed (pre-tax), ROCE 2: minimum of 15% Dividend Dividend payout at least 40% of net profit policy 1) EBITA before non-recurring items = operating profit
Slide 9: Investment highlights
Investment highlights Valmet <>
Slide 10: Investment highlight summary
Investment highlight summary 1 Strong market position in growing markets Stable business, with EUR 1.4 billion of net sales, 2 offering stability, growth and profitability Strong market position in capital business, with cost 3 structure to meet business requirements 4 Technology leader with unique
Slide 11: Strong market position in growing markets
1 2 3 4 5 Strong market position in growing markets Services Automation Pulp Energy Board Tissue Paper #1-2 #1-3 #1-2 #1-3 #1 #1 #1 ~2% 7.5 ~1% 2.0 ~1% 1.4 ~1% 2.0 ~3% 1.0 ~3% 0.6 ~-1% 0.6 p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn • Customers • Investments in • Growth in • Growth in •
Slide 12: Stable business offering stability, growth and profitability
1 2 3 4 5 Stable business, with EUR 1.4 billion of net sales, offering stability, growth and profitability Services Automation Orders received1 (EUR million) Orders received2 (illustrative, EUR million) 1,035 1,055 1,119 ~0% CAGR3 ~3% 309 296 309 CAGR3 2013 2014 2015 2013 2014 2015 Target to conti
Slide 13: Strong market position in capital business
1 2 3 4 5 Strong market position in capital business, with cost structure to meet business requirements Market position Market position #1 #1-3 Paper Pulp and Energy Orders received1 Net sales1 Orders received1 Net sales1 (EUR million) (EUR million) (EUR million) (EUR million) 1,344 907 956 913 864
Slide 14: Technology leader with unique offering
1 2 3 4 5 Technology leader with unique offering Acquisition of Automation strengthened Valmet’s offering Cost-competitive, focused Complete pulp mill delivery Comprehensive offering for solutions in Paper capability energy customers • 10 OptiConcept M • State-of-the-art technology for • Solutions f
Slide 15: Systematically developing the company and profitability with Must-Wins
1 2 3 4 5 Systematically developing the company and profitability with Must-Wins Must-Wins Must-Win implementation objectives for 2016 • Strengthen our presence close to customers and growth markets Customer • Strengthen Key Account Management to serve customers with our full offering excellence • P
Slide 16: Customers extensively utilizing our Industrial Internet capabilities
Today, customers are extensively utilizing our Industrial Internet capabilities Valmet’s competence network Customer’s Valmet’s process remote center 350 Ongoing 740 70,000 320 440 80 Valmet-supplied 350 Condition Advanced Online Performance Co-creation of lines with Valmet Monitoring (CM) process c
Slide 17: Enhancing mobility and introducing even more advanced technologies
Enhancing mobility and introducing even more advanced technologies Today 2016–2018 We serve our customers with intelligent We enhance mobility and introduce even technology, automation and services locally more advanced automation technologies and and remotely embedded diagnostics Fully automated,
Slide 18: Financials
Financials Valmet <>
Slide 19: Key figures
Key figures EUR million Q4/2015 Q4/2014 Change 2015 2014 Change Orders received 793 480 65% 2,878 3,071 -6% Order backlog1 2,074 1,998 4% 2,074 1,998 4% Net sales 854 777 10% 2,928 2,473 18% EBITA2 63 48 31% 182 106 73% % of net sales 7.3% 6.1% 6.2% 4.3% EBIT3 41 38 11% 120 72 65% % of net sales 4.9
Slide 20: EBITA margin in the targeted range
EBITA margin in the targeted range Net sales and EBITA before NRI (EUR million) 854 777 779 734 EBITA (bef. NRI) 6.1% target 6–9% 7.3% 588 590 6.9% 561 6.4% 519 3.7% 5.5% 3.5% 445 408 Capital business 295 400 498 409 0.7% 337 319 371 Stable business 354 334 278 251 235 242 EBITA-% 224 (before NRI) Q
Slide 21: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2016 Valmet estimates that net sales in 2016 will remain at the same level with Guidance for 2015 (EUR 2,928 million) and EBITA before non-recurring items in 2016 2016 will increase in comparison with 2015 (EUR 182 million). Short-term market outlo
Slide 22: Conclusion
Conclusion Valmet <>
Slide 23: Conclusion
Conclusion Strong market position in growing markets Stable business, with EUR 1.4 billion of net sales, offering stability, growth and profitability Strong market position in capital business, with cost structure to meet business requirements Technology leader with unique offering Systema
Slide 24: Important notice
Important notice It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for growth, profitability and investment willingness, expectations fo
Slide 25: Appendix
Appendix 1 Shareholders and share price development 2 Announced orders 3 Offering 4 Financials 5 Market statistics 6 Management 25 February 2016 © Valmet | Roadshow presentation
Slide 26: Appendix: Shareholders and share price development
Appendix Shareholders and share price development
Slide 27: Largest shareholders on January 31, 2016
Largest shareholders on January 31, 2016 Based on the information given by Euroclear Finland Ltd. # Shareholder name Number of shares % of shares and votes 1 Solidium Oy1 16,695,287 11.14% 2 Varma Mutual Pension Insurance Company 4,208,465 2.81% 3 Nordea Funds 3,130,892 2.09% 4 Ilmarinen Mutual Pens
Slide 28: Ownership structure on January 31, 2016
Ownership structure on January 31, 2016 14.6% Nominee registered and non-Finnish holders 11.1% Finnish institutions, companies and foundations 51.0% Solidium Oy Finnish private investors 23.2% Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and n
Slide 29: Share of non-Finnish holders and number of shareholders
Share of non-Finnish holders and number of shareholders 56% 59,000 54% 57,000 52% 55,000 50% 53,000 48% 51,000 46% 49,000 44% 47,000 12/2013 01/2014 02/2014 03/2014 04/2014 05/2014 06/2014 07/2014 08/2014 09/2014 10/2014 11/2014 12/2014 01/2015 02/2015 03/2015 04/2015 05/2015 06/2015 07/2015 08/2015
Slide 30: Share price development and trading volume
30 Million shares 6.00 7.00 8.00 9.00 11.00 12.00 10.00 0 1 2 3 4 5 6 7 8 01/14 01/14 02/14 02/14 February 2016 03/14 03/14 04/14 04/14 05/14 05/14 06/14 06/14 07/14 07/14 08/14 08/14 09/14 09/14 © Valmet | Roadshow presentation Valmet 10/14 10/14 11/14 11/14 12/14 12/14 01/15 01/15 02/15 02/15 03/1
Slide 31: Appendix: Announced orders
Appendix Announced orders Valmet <>
Slide 32: Announced orders in 2016
Announced orders in 2016 Date Booked Description Business line Country Value quarter Jan 15 Q4 Grade conversion rebuild Paper Canada Not disclosed Jan 26 Q4 Flue gas desulphurization plant Pulp and Energy Poland Around EUR 20 million Jan 28 Q4 New high consistency bleaching system Pulp and Energy Sw
Slide 33: Announced orders in H1/2015
Announced orders in H1/2015 Date Booked Description Business line Country Value quarter Jan 23 Q4 Key board machine solutions Paper China Not disclosed Feb 4 Q4 Flue-gas cleaning and condensation plant Pulp and Energy Finland Around EUR 8 million Feb 17 Q1 Equipment for fluff conversion project Pulp
Slide 34: Announced orders in H2/2015
Announced orders in H2/2015 Date Booked Description Business line Country Value quarter Jul 6 Q2 Winding technology for paper machine grade Paper Netherlands Not disclosed conversion rebuild Jul 7 Q2 White liquor handling system Pulp and Energy Sweden Not disclosed Aug 18 Q3 Main equipment to a pulp
Slide 35: Appendix: Offering
Appendix Offering Valmet <>
Slide 36: Comprehensive life-cycle services offering and large customer base
Comprehensive life-cycle services offering and large customer base with significant potential Comprehensive life-cycle services offering Over 2,000 customer mills and plants served globally Spare and wear parts Fabrics Mill and plant Roll and workshop Energy and • All OEM spare parts and • Paper mac
Slide 37: Our automation offering
Our automation offering Pulp and paper Energy Oil and gas Marine Advanced automation and process monitoring solutions and services: Distributed Control System (DCS) – Industrial internet solutions Valmet DNA Automation services Performance solutions Process simulators Quality Control Sys
Slide 38: Automation offering and market overview
Automation offering and market overview Scope/product Market size Market position in Main competitors pulp and paper Distributed • DCS for process and Pulp and paper DCS market: • ABB Control System (DCS) machines controls • Condition monitoring • EUR 900 million #3 • • Honeywell Emerson • Informati
Slide 39: Full scope offering for the pulp and paper industry
Full scope offering for the pulp and paper industry Technologies Automation Services 1 Wood handling 6 Recycled fiber • Distributed Control System • Mill and plat improvements (DCS) • Spare and wear parts 2 Heat and power 7 Mechanical fiber • Performance solutions • Paper machine clothing production
Slide 40: Our offering for energy industry and biotechnologies
Our offering for energy industry and biotechnologies Technologies Automation Services 1 Fuel handling 5 Modularized • Distributed Control System • Plant improvements power plants (DCS) • Rebuilds 2 Gasification • Performance solutions • Performance services 6 Prehydrolysis 3 Boiler and flue For biof
Slide 41: Our pulp and energy technology offering
Our pulp and energy technology offering Pulp Recovery Energy Biotechnologies • Wood handling • Evaporation systems • Circulating fluidized • Pyrolysis solutions for systems • Recovery islands bed boilers (CYMIC) bio-oil production • Cooking systems • Bubbling fluidized • LignoBoost for lignin • Comp
Slide 42: Our paper technology offering
Our paper technology offering Board and paper Tissue Board and paper production lines Tissue production lines – Recycled fiber lines – Advantage DCT – Tailor made OptiConcept machines – Advantage NTT – OptiConcept M modularized machines – Advantage Thru Air (TAD) Rebuilds Rebuilds – Moderniz
Slide 43: Continuous investment in research and development
Continuous investment in research and development to improve customers’ processes Customers’ needs Valmet’s R&D focus Valmet’s R&D resources • Increase production • Modularized and • Own R&D centers and efficiency standardized products pilot facilities • Improve competitiveness • Energy, water and r
Slide 44: Example of our R&D work - OptiConcept M
Example of our R&D work - OptiConcept M board and paper machine Cost-efficient, high-quality, safe and flexible board making concept Significant savings in energy, water and raw material use – Energy efficiency improvement up to 30% Modular and compact size – Short delivery times, quick start-
Slide 45: Appendix: Financials
Appendix Financials Valmet <>
Slide 46: Our four business lines serve the same customer base
Our four business lines serve the same customer base Services Automation Pulp and Energy Paper Description Mill and plant improvements, Supplies and develops Technologies and solutions for Technologies and solutions for roll and workshop services, automation and information pulp production, power bo
Slide 47: 2015 orders received split
2015 orders received split EUR million and % of total 247 673 9% 717 23% 25% 428 15% 1,119 39% 166 6% 864 1,320 30% 222 46% 8% Services North America South America Automation EMEA Pulp and Energy China Paper Asia-Pacific 47 February 2016 © Valmet | Roadshow presentation
Slide 48: Net sales split, by business unit
Net sales split, by business unit Net sales split, business units (2015) Net sales split, Valmet (2015) Services Automation Stable business 12% 19% 15% 33% Paper Rolls 28% 67% Tissue Mill 26% Improvements 3% 7% Board 8% Rolls Pulp and Paper 11% Mill Improvements Energy and Process Performance Parts
Slide 49: Services business line in 2015
Services business line in 2015 Net sales by business unit Net sales by area Orders received EUR 1,119 million 12% 10% 19% 8% 29% Net sales EUR 1,128 million 15% Employees 5,363 28% 7% Market position 26% 45% #1–2 Services Rolls North America Mill Improvements South America Performance Parts EMEA Fab
Slide 50: Automation business line in 2015
Automation business line in 2015 Acquisition of Automation was completed on April 1, 2015 Net sales by business unit Net sales by area Orders received EUR 222 million 8% 6% 22% Net sales 33% EUR 229 million 5% Employees 1,637 67% Market position 59% #1–3 Pulp and paper Pulp and Paper North America E
Slide 51: Pulp and Energy business line in 2015
Pulp and Energy business line in 2015 Net sales by business unit Net sales by area Orders received EUR 864 million 9% 18% Net sales 34% 3% EUR 913 million 25% Employees 1,750 66% Market position 46% #1–2 Pulp #1–3 Energy Pulp North America Energy South America EMEA China Asia-Pacific 51 February 201
Slide 52: Paper business line in 2015
Paper business line in 2015 Net sales by Net sales by area Net sales by type Orders received business unit EUR 673 million 12% 24% 12% Net sales EUR 659 million 26% 45% 55% 2% 33% 55% Employees 3,036 36% Market position #1 Board Board North America New lines Tissue South America #1 Tissue Paper EMEA
Slide 53: Q4/2015 in brief
Q4/2015 in brief Orders received and net sales increased in stable business1 • Orders received remained at the previous year’s level in Services business line, orders received EUR 67 million in Automation business line in Q4/2015 • Net sales increased in Services compared with Q4/2014, net sales EUR
Slide 54: Orders received EUR 2.9 billion in 2015
Orders received EUR 2.9 billion in 2015, stable business orders received EUR 1.3 billion Orders received (EUR million), Orders received in 2015 (EUR million), split by stable and capital business by area 1,400 3,500 Asia-Pacific 9% North 1,200 1,101 3,000 America 1,023 25% China 1,000 2,500 781 793
Slide 55: Order backlog at EUR 2.1 billion
Order backlog at EUR 2.1 billion Order backlog (EUR million) Structure of order backlog 3,000 2,500 2,406 2,312 ~25% 2,000 2,208 2,117 1,998 2,064 2,074 1,972 1,500 1,000 ~75% 500 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Stable business Capital business • Order backlog EUR 44 million lower
Slide 56: Orders received EUR 1.1 billion in Services in 2015
Orders received EUR 1.1 billion in Services in 2015 Orders received (EUR million) Net sales (EUR million) 2014: 2015: 2014: 2015: EUR 1,055 million EUR 1,119 million EUR 989 million EUR 1,128 million 350 307 1,400 350 304 314 1,400 293 278 300 267 273 273 267 1,200 300 268 1,200 242 252 251 242 224
Slide 57: Orders received in Automation in 2015
1 Orders received in Automation totaled to about EUR 250 million in 2015 Orders received2, 3 (EUR million) Net sales3 (EUR million) Q2–Q4/2015: Q2–Q4/2015: EUR 222 million (external) EUR 229 million (external) 160 160 140 140 120 95 120 101 100 78 75 100 79 6 10 72 80 62 8 80 55 8 11 6 60 60 40 85 4
Slide 58: Orders received in Pulp and Energy in 2015
Orders received about EUR 860 million in Pulp and Energy in 2015 Orders received (EUR million) Net sales (EUR million) 2014: 2015: 2014: 2015: EUR 1,344 million EUR 864 million EUR 956 million EUR 913 million 800 1,600 400 1,600 700 622 1,400 350 312 1,400 600 560 1,200 300 1,200 229 234 231 245 500
Slide 59: Orders received in Paper in 2015
Orders received about EUR 670 million in Paper in 2015 Orders received (EUR million) Net sales (EUR million) 2014: 2015: 2014: 2015: EUR 671 million EUR 673 million EUR 528 million EUR 659 million 300 900 300 900 250 212 750 250 750 190 197 199 186 200 200 600 200 177 185 600 142 149 150 128 129 450
Slide 60: Good development in gross profit compared with Q4/2014
Good development in gross profit compared with Q4/2014 Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 200 22% 25% 200 25% 160 20% 160 20% 17% 120 15% 120 15% 80 10% 80 10% 40 5% 40 5% 0 0% 0 0% Q2/2014 Q3/2015 Q4/2015 Q1/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/20
Slide 61: Cash flow, net debt, gearing and equity ratio
Cash flow, net debt, gearing and equity ratio Cash flow provided by operating Net debt (EUR million) and Equity to assets ratio (%) activities (EUR million) gearing (%) 29% 28% 42% 40% 40% 41% 21% 36% 117 34% 35% 35% 238 229 178 64 -39 46 -54 43 30 -5% -7% -158 -166 -134 17 16 -20 -17% -20%-21% Q1/1
Slide 62: Net working capital -8% of rolling 12 months orders received
Net working capital -8% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 20% 1,101 1,023 500 781 725 793 10% 480 580 466 0 0% -257 -249 -345 -353 -355 -265 -244 -238 -500 -10% -1,000 -20% Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q2/2015 Q3/2015 Q4/201
Slide 63: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 371 million as at December 31, 2015 Amount of outstanding interest-bearing debt Main financing sources (EUR millions) Amount Lender 400 350 EUR 104 million European Investment Bank 300 EUR 100 million Skandinaviska Enskilda Banken 250 200 E
Slide 64: Strong balance sheet to support large orders
Strong balance sheet to support large orders Financial position as of December 31, 2015 (EUR million) 248 62 276 165 28 2,894 309 2,370 178 860 Non-current Current debt Cash and Other Net debt Total equity Balance Advances Amounts due Adj. balance debt equivalents financial sheet total received to c
Slide 65: Net sales and profitability development, annual
Net sales and profitability development, annual Net sales and EBITA before NRI (EUR million)1 2,925 3,014 2,928 2,735 2,703 2,613 2,453 2,473 6.2% 2,092 2,061 EBITA target 6–9% 7.1% 7.6% 6.3% 6.5% 6.4% 2.1% 5.5% 5.6% 4.3% 1,572 2,003 1,581 Services 1,576 1,729 1,484 1,357 2,091 1,888 1,456 1,346 Cap
Slide 66: High volatility in market activity
High volatility in market activity Orders received1 (EUR million) 3,225 3,071 2,878 • Volatility in market 2,584 2,445 activity is high in the 2,182 capital business 1,999 2,080 1,537 2,016 1,585 1,390 1,147 1,362 Capital Services 1,341 999 1,145 1,055 1,035 1,055 637 2009 2010 2011 2012 2013 2014 2
Slide 67: Development of procurement and quality costs
Development of procurement and quality costs Procurement Results in 2015 Target to save 2015 target exceeded 10% in procurement by Procurement activity has increased in all main cost- the end of 2016 competitive areas: China, India, Eastern Europe and 2014 2015 2016 Mexico (baseline 2013) Saving
Slide 68: Sustainability
Sustainability Achievements • Systematic execution of Valmet’s sustainability agenda with five focus areas in 2015 • Year’s focus in Sustainable supply chain program to ensure compliance, reduce negative impacts and support key suppliers towards more sustainable business operations - 100% of global
Slide 69: Currency exposure and foreign exchange risk management
Currency exposure and foreign exchange risk management Currency exposure Foreign exchange risk management All operating units are required to hedge in The exposure is a net of all assets and full their foreign currency exposures liabilities denominated in foreign currencies derived from sales an
Slide 70: North America
North America Mature services focused market with recurring opportunities in paper, tissue and automation Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015) line (2015) 71
Slide 71: South America
South America Cyclical capital business relies on new pulp projects. Services, board and tissue provide growth opportunities Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2
Slide 72: EMEA
EMEA Valmet’s largest and most important area with significant services and technology markets in all Valmet’s businesses Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015
Slide 73: China
China Capital business at new normal level, growth opportunities in Services Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015) line (2015) 428 2,061 392 1,927 1,955 24% 3
Slide 74: Asia-Pacific
Asia-Pacific Developing services market with growth potential Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015) line (2015) 586 706 625 588 21% 378 31% 32% 372 282 48% 24
Slide 75: Key ratios
Key ratios Q1–Q4/ Q1–Q4/ 2015 2014 Earnings per share, EUR 0.51 0.31 Diluted earnings per share, EUR 0.51 0.31 Equity per share at end of period, EUR 5.70 5.36 Return on equity (ROE), % (annualized) 9% 6% Return on capital employed (ROCE) before taxes, % (annualized) 12% 9% Equity to assets ratio at
Slide 76: Consolidated statement of income
Consolidated statement of income Q4/2015 Q4/2014 Q1–Q4/ Q1–Q4/ EUR million 2015 2014 Profit / loss 28 25 78 46 Items that may be reclassified to profit or loss in subsequent periods: Cash flow hedges - -1 -2 -11 Currency translation on subsidiary net investments 7 -2 10 7 Income tax relating to item
Slide 77: Balance sheet as at December 31, 2015 (assets)
Balance sheet as at December 31, 2015 As at December As at December Assets 31, 2015 31, 2014 EUR million Non-current assets Intangible assets Goodwill 624 446 Other intangible assets 235 91 Total intangible assets 859 537 Property, plant and equipment Land and water areas 26 22 Buildings and structu
Slide 78: Balance sheet as at December 31, 2015 (equity and liabilities)
Balance sheet as at December 31, 2015 Equity and liabilities As at December As at December EUR million 31, 2015 31, 2014 Equity Share capital 100 100 Reserve for invested unrestricted equity 404 403 Cumulative translation adjustments 18 9 Fair value and other reserves -4 -3 Treasury shares -7 - Reta
Slide 79: Condensed Consolidated Statement of Cash Flows
Condensed Consolidated Statement of Cash Flows Q4/2015 Q4/2014 Q1–Q4/2015 Q1–Q4/2014 EUR million Cash flows from operating activities Profit / loss 28 25 78 46 Adjustments Depreciation and amortization 25 18 92 72 Dividend income and net interests 2 - 6 2 Income taxes 9 11 30 21 Other non-cash items
Slide 80: Appendix: Market statistics
Appendix Market statistics Valmet <>
Slide 81: Pulp mill market is cyclical and characterized by large orders
Pulp mill market is cyclical and characterized by large orders Market fluctuates from year to year Valmet is well prepared for the cyclical nature of the business Market size1 (EUR million) Own capacity has been reduced during the last few years Valmet Others Capacity cost to net sales was 24% i
Slide 82: Consumption development
Consumption development Growth in board and tissue consumption is expected to continue while newsprint is declining Paper consumption1 (Mton) 220 CAGR 2001-2014 2014-2018F 200 180 Containerboard +3.7% +2.4% 160 140 120 Printing & Writing +0.4% -0.8% 100 80 Cartonboard +2.8% +2.6% 60 40 20 Tissue +3.
Slide 83: Paper and board consumption growth trends
Paper and board consumption growth trends Paper and board consumption per capita vs. population1 250 2,500 Population growth in emerging markets is 200 2,000 larger than in 150 1,500 developed markets 100 1,000 Level of 50 500 consumption per capita in emerging 0 0 markets clearly Eastern Europe Chi
Slide 84: Demand has shifted more towards smaller paper and board machines
Demand has shifted more towards smaller paper and board machines • We are focusing more on modularized and standardized solutions • Competition is higher in smaller machines Capacity of start-ups1, by machine Valmet’s market share1, size by machine size 47 Mton 35 Mton XL 40-60% Competition is lower
Slide 85: Tissue consumption growth trends
Tissue consumption growth trends Tissue consumption per capita vs. population1 New products and 2,500 25 consumption models based on tissue are 2,000 20 helping increase 1,500 15 consumption in developed markets 1,000 10 500 5 0 0 Consumption in emerging markets is China Rest of Asia Oceania Africa
Slide 86: Tissue market growing long term
Tissue market growing long term • Recent market reduction due to heavy Chinese investments • Competition is high in all areas, Valmet is strongest in North America Capacity of start-ups1, by area Valmet’s market share1, by area 7 Mton 6 Mton South 20-40% America Number of competitors 5 Mton APAC ex.
Slide 87: Paper, board, and tissue production trends
Paper, board, and tissue production trends North America (million tonnes) Europe (million tonnes) 10 40 15 40 13 35 8 30 30 11 25 9 6 20 20 7 15 4 10 5 10 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Tissue (LHS) Newsprint (LHS) Tissue
Slide 88: Paper, board, and tissue operating rates
Paper, board, and tissue operating rates North America Europe 100% 100% 95% 95% 90% 90% 85% 80% 85% 75% 80% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Tissue Newsprint Printing & Writing Tissue Newsprint Printing & Writing Containerb
Slide 89: Pulp and paper price trends
89 1,000 1,200 200 400 600 800 0 Source: Bloomberg 1-Dec-07 February 2016 1-Mar-08 1-Jun-08 1-Sep-08 1-Dec-08 1-Mar-09 Testliner (EUR/t) Uncoated (USD/t) 1-Jun-09 1-Sep-09 Eucalyptus pulp (USD/t) 1-Dec-09 1-Mar-10 © Valmet | Roadshow presentation 1-Jun-10 1-Sep-10 1-Dec-10 1-Mar-11 1-Jun-11 1-Sep-11
Slide 90: Pulp price spread
Pulp price spread NBSK Pulp prices, Europe: NBSK and BHKP (USD/ton) Northern bleached 1,100 350 softwood kraft pulp is produced mainly in 1,000 300 Canada and the Nordic 900 250 countries. NBSK is based on long fibre wood 800 200 species. It adds strength 700 150 to the final product. 600 100 BHKP 5
Slide 91: Crude oil, steam coal, natural gas and electricity: Europe
Crude oil, steam coal, natural gas and electricity Europe 180 100 160 90 140 80 120 70 60 100 50 80 40 60 30 40 20 20 10 0 0 1-Jan-10 1-Jul-10 1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 1-Jul-15 CIF ARA steam coal (USD/t) (LHS) Brent crude oil (USD/barrel) (LHS)
Slide 92: Crude oil, steam coal, natural gas and electricity: United States
Crude oil, steam coal, natural gas and electricity United States 140 7 120 6 100 5 80 4 60 3 40 2 20 1 0 0 1-Jan-10 1-Jul-10 1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 1-Jul-15 FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub
Slide 93: European Carbon Emission Allowance price
93 10 0 1 2 3 4 5 6 7 8 9 2-Nov-12 2-Dec-12 2-Jan-13 Source: Bloomberg February 2016 2-Feb-13 2-Mar-13 2-Apr-13 2-May-13 2-Jun-13 2-Jul-13 2-Aug-13 2-Sep-13 2-Oct-13 2-Nov-13 2-Dec-13 © Valmet | Roadshow presentation 2-Jan-14 2-Feb-14 2-Mar-14 2-Apr-14 2-May-14 2-Jun-14 2-Jul-14 2-Aug-14 2-Sep-14 2-
Slide 94: Appendix: Management
Appendix Management Valmet <>
Slide 95: Experienced Executive Team
Experienced Executive Team Corporate Pasi Laine Kari Saarinen Julia Macharey Juha Lappalainen Anu Salonsaari-Posti President and CEO CFO SVP, Human Resources SVP, Strategy and SVP, Marketing & Share ownership: 49,021 Share ownership: 6,325 Share ownership: 3,455 Operational Development Communication
Slide 96: Board of Directors
Board of Directors Bo Risberg Mikael Von Frenckell Friederike Helfer (b. 1956) (b. 1947) (b. 1976) Chairman of Vice Chairman of Board member the Board the Board Austrian citizen Swedish citizen Finnish citizen • BSc in Mech. Engineering, MBA • MSc in Social Sciences • MSc in Real Estate Development,
Slide 97: FORWARD
FORWARD