Slide 1: Interim Review, January–March 2022
Orders received amounted to EUR 1.3 billion and Comparable EBITA to EUR 79 million in the first quarter Interim Review, January–March 2022 April 27, 2022 Pasi Laine, President and CEO Simo Sääskilahti, Business Line President, Flow Control
Slide 2: Agenda
Agenda Interim Review, January–March 2022 1 Q1/2022 in brief 2 Merger with Neles 3 Development of the segments and business lines 4 Financial development 5 Neles’ Q1/2022 in brief 6 New financial targets, guidance and short-term market outlook 2 April 27, 2022 © Valmet | Interim Review, January–Marc
Slide 3: Q1/2022 in brief
Q1/2022 in brief Valmet <>
Slide 4: Q1/2022 in brief
Q1/2022 in brief Orders received remained at previous year’s level at EUR 1,324 million Net sales increased to EUR 960 million Order backlog amounted to EUR 4,459 million Comparable EBITA remained at previous year’s level at EUR 79 million and margin was 8.3% Gearing was 0% 4 April 27, 2022 © Valmet
Slide 5: Valmet in Q1/2022
Valmet in Q1/2022 Net sales by segment Net sales by area Net sales 10% EUR 960 million 18% Comparable EBITA 33% EUR 79 million 20% Comparable EBITA margin 13% 8.3% 58% Orders received EUR 1,324 million 9% Order backlog 39% EUR 4,459 million Services North America Employees South America Automation 1
Slide 6: Orders received remained at the previous year's level at EUR 1,324 million
Orders received remained at the previous year’s level at EUR 1,324 million in Q1/2022 Orders received in Q1/2022 by area Orders received (EUR million) Asia- 2,000 5,000 Pacific North 9% America 1,800 4,500 19% 1,600 4,000 1,400 3,500 China South 1,200 3,000 24% America 1,000 2,500 6% 800 2,000 1,312
Slide 7: Stable business orders received totaled EUR 2,040 million during the last four quarters
Stable business orders received totaled EUR 2,040 million during the last four quarters Orders received (EUR million) in stable business 2500 2,040 2000 1,947 1,875 1,701 1,772 1,609 490 416 467 1,519 1500 386 415 1,367 368 337 248 1,035 1,055 1000 1,459 1,481 1,549 1,242 1,315 1,356 1,055 1,119 1,1
Slide 8: Order backlog EUR 4,459 million at the end of Q1/2022
Order backlog EUR 4,459 million at the end of Q1/2022 Order backlog (EUR million) Structure of order backlog by segment 5,000 4,459 ~5% 4,500 4,096 4,000 ~20% 3,500 3,333 3,257 ~75% 3,000 2,829 2,458 2,500 2,283 1,998 2,074 2,000 1,500 1,000 Process Technologies 500 Services Automation 0 2014 2015 2
Slide 9: Merger with Neles
Merger with Neles Valmet <>
Slide 10: Merger of Valmet and Neles created a leading company
Merger of Valmet and Neles created a leading company with a unique offering for process industries globally Merger of Valmet and Neles was registered and the combination of Valmet’s and Neles’ business operations completed on April 1, 2022 Valmet acquired 29.5% of Neles shares in 2020 for EUR 45
Slide 11: Unique, competitive and balanced total offering for process industries
Unique, competitive and balanced total offering for process industries Paper Pulp Energy • Board, paper and tissue production lines • Wood and pulp handling • Heat and power generation • Rebuilds • Fiber processing • Air emission control • Stand-alone products • Recovery • Biofuels Process technolog
Slide 12: EUR 2.7 billion recurring and steadily growing stable business
EUR 2.7 billion recurring and steadily growing stable business • Valmet’s stable business has grown Orders received (EUR million) steadily since 2014 3,000 2,707 • Future growth possibilities are supported 667 by favorable megatrends 2,500 • Stable business provides resilience to 1,947 2,000 1,875 1
Slide 13: Strong industrial logic through combination of flow control and automation systems
Strong industrial logic through the combination of flow control and automation systems Valmet’s Automation business offering Valves Valve automation Valve controls Distributed Quality Analyzers and control systems management measurements • Control valves • High-performing • Automatic valve • Highly
Slide 14: Development of the segments and business lines
Development of the segments and business lines
Slide 15: Valmet's new financial reporting structure
Valmet’s new financial reporting structure Starting from January 1, 2022, Valmet changes its financial reporting structure to better highlight the performance of its businesses Items Orders Comparable Comparable affecting received Net sales EBITA EBITA-% comparability EBITA EBITA-% Amortization Se
Slide 16: Development of the segments
Development of the segments Services segment Orders received (EUR million) Net sales (EUR million) Comparable EBITA (EUR million and % of net sales) 250 20% 1,500 15.0 % 14.3 % 1,500 200 15% 1,549 1,374 1,327 1,360 1,389 1,459 1,481 1,000 1,219 204 198 1,315 1,356 1,128 1,163 1,178 150 1,000 1,182 1
Slide 17: Services: Orders received increased to EUR 451 million
Services: Orders received increased to EUR 451 million in Q1/2022 Orders received (EUR million) Net sales (EUR million) Comparable EBITA (EUR million and % of net sales) Q1/2021: Q1/2022: Q1/2021 : Q1/2022 : Q1/2021 : Q1/2022 : EUR 383 million EUR 451 million EUR 288 million EUR 317 million EUR 36 m
Slide 18: Automation: Orders received increased to EUR 147 million
Automation: Orders received increased to EUR 147 million in Q1/2022 Automation segment includes only Automation Systems business line in Q1/2022 Orders received (EUR million) Net sales (EUR million) Comparable EBITA (EUR million and % of net sales) Q1/2021: Q1/2022: Q1/2021: Q1/2022: Q1/2021: Q1/202
Slide 19: Process Technologies: Orders received decreased to EUR 727 million
Process Technologies: Orders received decreased to EUR 727 million in Q1/2022 Orders received (EUR million) Net sales (EUR million) Comparable EBITA (EUR million and % of net sales) Q1/2021: Q1/2022: Q1/2021: Q1/2022: Q1/2021: Q1/2022: EUR 807 million EUR 727 million EUR 503 million EUR 555 million
Slide 20: Pulp and Energy business line: Orders received decreased to EUR 327 million
Pulp and Energy business line: Orders received decreased to EUR 327 million in Q1/2022 Orders received (EUR million) Net sales (EUR million) Q1/2021: Q1/2022: Q1/2021: Q1/2022: EUR 458 million EUR 327 million EUR 227 million EUR 276 million 1,600 1,600 1,344 1,400 1,400 1,125 1,160 1,200 1,029 1,200
Slide 21: Paper business line: Orders received increased to EUR 400 million
Paper business line: Orders received increased to EUR 400 million in Q1/2022 Orders received (EUR million) Net sales (EUR million) Q1/2021: Q1/2022: Q1/2021: Q1/2022: EUR 349 million EUR 400 million EUR 275 million EUR 279 million 1,800 1,634 1,684 1,800 1,600 1,600 1,400 1,400 1,077 1,076 1,141 1,1
Slide 22: Russian invasion of Ukraine is permanently changing world trade
Russian government’s invasion of Ukraine is permanently changing world trade and operational models The war in Ukraine touches and upsets us all. Valmet supports our employees and partners in the crisis area in all possible ways. Valmet’s net sales in Russia was around 2 percent of the company’s
Slide 23: Financial development
Financial development Valmet <>
Slide 24: Key figures
Key figures EUR million Q1/2022 Q1/2021 Change 2021 Orders received 1,324 1,312 1% 4,740 Order backlog1 4,459 3,709 20% 4,096 Net sales 960 858 12% 3,935 Comparable EBITA 79 80 -1% 429 % of net sales 8.3% 9.4% 10.9% EBITA 74 89 -16% 448 Operating profit (EBIT) 63 76 -17% 399 % of net sales 6.5% 8.9%
Slide 25: Segment key figures
Segment key figures Orders received, EUR million Q1/2022 Q1/2021 Change 2021 Services 451 383 18% 1,481 Automation 147 123 19% 467 Process Technologies 727 807 -10% 2,793 Total 1,324 1,312 1% 4,740 Net sales, EUR million Q1/2022 Q1/2021 Change 2021 Services 317 288 10% 1,360 Automation 88 67 31% 412
Slide 26: Gross profit and SG&A development
Gross profit and SG&A development Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 1,200 30% 1,200 30% 25% 1,000 25% 1,000 25% 995 800 20% 800 20% 15% 600 15% 600 15% 617 400 10% 400 10% 200 5% 200 5% 0 0% 0 0% 2014 2015 2016 2017 2018 2019 2020 2021 Q1/2022 2014 2
Slide 27: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %)1 3,935 4,037 3,740 Target 12–14% 3,547 10.9% 3,325 10.6% 3,058 9.8% 2,928 2,926 8.9% 2,473 7.7% 7.1% Capital Business 6.7% 6.2% 1,832 2,163 2,215 Stable business 2,079 4.3% 1,473 1,584 1,799 1,572 1,715 1,773 1,82
Slide 28: Cash flow provided by operating activities and net working capital
Cash flow provided by operating activities and net working capital Cash flow provided by operating activities (EUR million) Net working capital and orders received (EUR million) 600 5,000 50% 4,740 4,753 4,000 40% 500 532 3,986 482 3,722 3,653 3,000 3,272 30% 400 3,071 3,139 2,878 2,000 20% 300 353
Slide 29: Net debt and gearing decreased compared with Q1/2021
Net debt and gearing decreased compared with Q1/2021 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 300 30% 50% 21% 45% 42% 42% 43% 41% 41% 41% 42% 40% 200 20% 38% 38% 39% 39% 18% 40% 184 13% 36% 37% 37% 178 149 35% 100 6% 10% 3% 30% 30 3 0 52 -17 0% 0% 25% -9 -1% -100 -90 -1% -88
Slide 30: Capital employed, Comparable ROCE and EPS
Capital employed, Comparable ROCE and EPS Capital employed (EUR million) and Earnings per share, EUR Comparable return on capital employed (ROCE), before taxes (%) 24% 1.98 23% 23% 1.90 22% 20% 1.54 16% 1,808 1.35 1,639 1,698 14% 13% 1,314 1.01 1,231 1,195 10% 1,137 1,150 0.81 877 0.51 0.55 0.31 201
Slide 31: Neles' Q1/2022 in brief
Neles’ Q1/2022 in brief Valmet <>
Slide 32: Neles: Orders received increased to EUR 196 million
Neles: Orders received increased to EUR 196 million in Q1/2022 Orders received (EUR million) Sales (EUR million) Q1/2021: Q1/2022: Q1/2021: Q1/2022: EUR 154 million EUR 196 million EUR 129 million EUR 166 million 800 800 681 667 660 648 700 628 625 700 611 590 593 576 600 555 600 528 522 504 500 500
Slide 33: Neles key figures
Neles key figures EUR million Q1/2022 Q1/2021 Change, % 2021 Orders received 196 154 27% 625 Order backlog1 331 298 11% 294 Sales 166 129 28% 611 Adjusted EBITA 27 16 68% 87 % of sales 16.1% 12.3% 14.2% EBITA 27 16 68% 80 Operating profit 25 15 66% 76 % of sales 15.2% 11.7% 12.4% Earnings per share,
Slide 34: New financial targets, guidance and short-term market outlook
New financial targets, guidance and short- term market outlook
Slide 35: New financial targets as of April 1, 2022
New financial targets as of April 1, 2022 Growth Profitability ROCE Dividend policy Net sales for stable Comparable EBITA: Comparable return on Dividend payout at least business1 to grow over two 12–14% capital employed (ROCE) 50% of net profit times the market growth before taxes2 at least 15% Net
Slide 36: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2022 (Published on April 1, 2022) Guidance Valmet estimates that, including the merger with Neles, net sales in 2022 will increase in comparison with 2021 (EUR 3,935 million) and Comparable EBITA in 2022 will increase in comparison with 2021 (EUR 4
Slide 37: Q&A
Q&A 37 April 27, 2022 © Valmet | Interim Review, January–March 2022
Slide 38: Half-year Financial Review January–June 2022
Half-year Financial Review January–June 2022 July 27, 2022 www.valmet.com/investors 38 April 27, 2022 © Valmet | Interim Review, January–March 2022
Slide 39: Important notice
Important notice IMPORTANT: The following applies to this document, the oral presentation of the information in this document by Valmet (the “Company”) or any person on behalf of the Company, and any question-and-answer session that follows the oral presentation (collectively, the “Information”). In
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