Slide 1: Half Year Financial Review, January–June 2017
Orders received increased – profitability at the previous year’s level Half Year Financial Review, January–June 2017 July 27, 2017 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Half Year Financial Review, January–June 2017 1 Q2/2017 in brief 2 Development of business lines 3 Valmet Industrial Internet: Dialogue with data 4 Financial development 5 Guidance and short-term market outlook 6 Summary of Q2/2017 7 Appendix 2 July 27, 2017 © Valmet | Half Year Financial Rev
Slide 3: Q2/2017 in brief
Q2/2017 in brief Valmet <>
Slide 4: Q2/2017 in brief
Q2/2017 in brief Orders received remained at the previous year’s level at EUR 412 million in stable business1 Orders received increased to EUR 384 million in capital business2 Net sales remained at the previous year’s level at EUR 803 million Order backlog increased to EUR 2.6 billion Profitability
Slide 5: Valmet in Q2/2017
Valmet in Q2/2017 Orders received by Orders received by Orders received business line area EUR 796 million 10% 17% 40% Net sales 31% EUR 803 million 5% 24% Comparable EBITA EUR 57 million Comparable EBITA 18% 11% 44% margin 7.1% Services North America Automation South America Employees Pulp and Ener
Slide 6: Orders received increased to EUR 796 million in Q2/2017
Orders received increased to EUR 796 million in Q2/2017 Orders received (EUR million) Orders received in Q1–Q2/2017 by area 1,400 3,500 Asia-Pacific North 12% America 1,200 3,000 21% 1,000 2,500 China 800 2,000 16% South America 600 1,500 4% 1,101 1,023 1,005 400 781 725 793 803 692 788 857 796 1,00
Slide 7: Stable business orders received totaled EUR 1,583 million during the last 4 quarters
Stable business orders received totaled EUR 1,583 million during the last 4 quarters Orders received (EUR million) in stable business1 600 1,800 500 443 1,500 409 424 402 394 400 371 88 1,200 330 342 344 103 95 81 88 273 273 293 87 300 267 75 80 900 242 78 200 600 321 355 321 273 273 293 307 313 284
Slide 8: Order backlog at EUR 2,551 million at the end of Q2/2017
Order backlog at EUR 2,551 million at the end of Q2/2017 Order backlog (EUR million) Structure of order backlog 3,000 2,500 2,613 2,551 2,406 ~25% 2,312 2,283 2,000 2,208 2,207 2,192 2,117 2,074 2,106 1,972 1,998 2,064 1,500 1,000 ~75% 500 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/1
Slide 9: Development of business lines
Development of business lines
Slide 10: Services: Orders received and net sales remained at the previous year's level
Services: Orders received and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) Q1–Q2/2016: Q1–Q2/2017: Q1–Q2/2016: Q1–Q2/2017: EUR 634 million EUR 676 million EUR 561 million EUR 554 million 400 355 1,600 400 1,600 350 313 321 321 1,400 350 314 30
Slide 11: Automation: Orders received increased and net sales remained at the previous year's level
Automation: Orders received increased and net sales remained at the previous year’s level Orders received1 (EUR million) Net sales1 (EUR million) Q1–Q2/2016: Q1–Q2/2017: Q1–Q2/2016: Q1–Q2/2017: EUR 170 million EUR 192 million EUR 148 million EUR 152 million 120 103 450 120 101 450 95 99 100 88 87 88
Slide 12: Pulp and Energy: Orders received and net sales decreased
Pulp and Energy: Orders received and net sales decreased Orders received (EUR million) Net sales (EUR million) Q1–Q2/2016: Q1–Q2/2017: Q1–Q2/2016: Q1–Q2/2017: EUR 417 million EUR 406 million EUR 443 million EUR 449 million 700 622 1,400 350 312 1,400 600 560 1,200 300 1,200 262 229 234 245 245 500 1
Slide 13: Paper: Orders received and net sales increased
Paper: Orders received and net sales increased Orders received (EUR million) Net sales (EUR million) Q1–Q2/2016: Q1–Q2/2017: Q1–Q2/2016: Q1–Q2/2017: EUR 295 million EUR 557 million EUR 321 million EUR 340 million 350 314 1,050 350 1,050 300 900 300 900 246 243 250 212 750 250 750 190 197 199 186 186
Slide 14: Valmet Industrial Internet: Dialogue with data
Valmet Industrial Internet Dialogue with data
Slide 15: We want to become the most desired Industrial Internet partner for our customers
We want to become the most desired Industrial Internet partner for our customers Valmet develops its Industrial Internet solutions building on the unique combination of process technology, services and automation. Industrial Internet solutions Valmet’s competence network Customer’s Valmet experts ex
Slide 16: Today, customers are extensively utilizing our Industrial Internet capabilities
Today, customers are extensively utilizing our Industrial Internet capabilities Valmet’s competence network Customer’s Valmet experts experts 400 Ongoing 780 78,000 350 520 90 Valmet-supplied 400 Condition Advanced Online Performance Co-creation of lines with Valmet Monitoring (CM) process control c
Slide 17: Valmet Industrial Internet
Valmet Industrial Internet Dialogue with data Building blocks Offering Reliability services Ecosystem • Component reliability monitoring and diagnostics • Sub-process reliability improvement • Mill and plant reliability optimization Applications and services Performance services • Process performanc
Slide 18: Financial development
Financial development Valmet <>
Slide 19: Key figures
Key figures EUR million Q2/2017 Q2/2016 Change Q1–Q2/2017 Q1–Q2/2016 Change Orders received 796 692 15% 1,802 1,495 21% Order backlog1 2,551 2,106 21% 2,551 2,106 21% Net sales 803 804 0% 1,475 1,456 1% Comparable EBITA 57 57 0% 91 88 4% % of net sales 7.1% 7.1% 6.2% 6.1% EBITA 56 55 1% 93 85 9% Ope
Slide 20: Gross profit margin and SG&A development
Gross profit margin and SG&A development Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 200 23% 25% 200 25% 160 20% 160 17% 20% 120 15% 120 15% 80 10% 80 10% 40 5% 40 5% 0 Q2/2017 0% 0 0% Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/
Slide 21: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %) 854 779 804 785 803 777 734 Target 8–10% 7.3% 685 671 652 7.1% 7.2% 7.1% 6.9% 588 590 6.4% 6.1% 561 7.5% 519 5.1% 4.8% 445 375 5.5% 408 427 429 Capital business 3.7% 3.5% 400 334 409 338 411 360 Stable business 49
Slide 22: Cash flow provided by operating activities
Cash flow provided by operating activities Cash flow provided by operating activities (EUR million) 2014: 2015: 2016: Q1–Q2/2017: EUR 236 million EUR 78 million EUR 246 million EUR 125 million 140 120 117 122 100 80 88 94 60 64 40 43 46 20 30 33 31 17 16 3 0 -20 -20 -40 Q1/2014 Q2/2014 Q3/2014 Q4/20
Slide 23: Net working capital at -9% of rolling 12 months orders received
Net working capital at -9% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 20% 1,101 1,023 1,005 781 793 803 788 857 796 500 725 692 10% 466 480 580 0 -181 0% -257 -249 -345 -353 -355 -265 -244 -238 -247 -265 -294 -428 -313 -500 -10% -1,000
Slide 24: Net debt decreased compared with Q2/2016
Net debt decreased compared with Q2/2016 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 29%28% 27% 300 24% 30% 45% 42% 21% 40%40%41% 40% 38%37%37%38% 36%35%36% 200 238 229 231 15% 20% 34%35%35% 35% 178 192 100 6% 4% 10% 30% 126 52 -3% 31 25% 0 -39 0% -54 -27 20% -100 -5% -134 -10%
Slide 25: Capital employed and Comparable ROCE
Capital employed and Comparable ROCE Capital employed (EUR million) and Comparable return on capital employed (ROCE), before taxes1 (%) 1,239 1,240 1,214 1,231 1,184 1,194 1,167 1,195 Target 1,122 1,154 15–20% 985 14% 14% 14% 14% 14% 967 13% 13% 902 877 12% 12% 10% 10% 2% 2% 1% Q1/14 Q2/14 Q3/14 Q4/
Slide 26: Guidance and short-term market outlook
Guidance and short-term market outlook
Slide 27: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2017 (as given on April 12, 2017) Valmet estimates that net sales in 2017 will increase in comparison with Guidance for 2016 (EUR 2,926 million) and Comparable EBITA in 2017 will increase in 2017 comparison with 2016 (EUR 196 million). Short-term m
Slide 28: Summary of Q2/2017
Summary of Q2/2017 Valmet <>
Slide 29: Q2/2017 in brief
Q2/2017 in brief Orders received remained at the previous year’s level at EUR 412 million in stable business1 Orders received increased to EUR 384 million in capital business2 Net sales remained at the previous year’s level at EUR 803 million Order backlog increased to EUR 2.6 billion Profitability
Slide 30: Appendix
Appendix Valmet <>
Slide 31: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 277 million as at June 30, 2017 Amount of outstanding interest-bearing debt Main financing sources and facilities (EUR million) 300 Source Amount outstanding 250 Loans from banks and EUR 277 million financial institutions 200 150 EUR 200 mi
Slide 32: Largest shareholders on June 30, 2017
Largest shareholders on June 30, 2017 Based on the information given by Euroclear Finland Ltd. Largest shareholders # Shareholder name Number of shares % of shares and votes 1 Solidium Oy1 16,695,287 11.14% 2 Varma Mutual Pension Insurance Company 4,165,465 2.78% 3 Elo Pension Company 3,810,000 2.54
Slide 33: Ownership structure on June 30, 2017
Ownership structure on June 30, 2017 13.3% 11.1% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations 50.4% Solidium Oy Finnish private investors 25.1% Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and non-
Slide 34: Share of non-Finnish holders and number of shareholders
34 42% 44% 46% 48% 50% 52% 54% 56% 12/2013 01/2014 July 27, 2017 02/2014 03/2014 04/2014 05/2014 06/2014 07/2014 08/2014 09/2014 shareholders 10/2014 11/2014 12/2014 01/2015 02/2015 03/2015 04/2015 Non-Finnish holders (LHS) 05/2015 06/2015 07/2015 08/2015 © Valmet | Half Year Financial Review, Janua
Slide 35: Pulp and paper price trends
35 1,000 1,100 200 300 400 500 600 700 900 800 Source: Bloomberg 1-Jan-12 July 27, 2017 1-Mar-12 1-May-12 1-Jul-12 1-Sep-12 1-Nov-12 1-Jan-13 1-Mar-13 1-May-13 1-Jul-13 1-Sep-13 1-Nov-13 1-Jan-14 Northern bleached softwood pulp (USD/t) 1-Mar-14 1-May-14 © Valmet | Half Year Financial Review, January
Slide 36: Crude oil, steam coal, natural gas and electricity
Crude oil, steam coal, natural gas and electricity Europe 140 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 1-Jul-15 1-Jan-16 1-Jul-16 1-Jan-17 1-Jul-17 CIF ARA steam coal (USD/t) (LHS) Brent crude oil (USD/barrel) (LHS) Natural gas sp
Slide 37: Crude oil, natural gas and electricity
Crude oil, natural gas and electricity United States 120 7 100 6 5 80 4 60 3 40 2 20 1 0 0 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 1-Jul-15 1-Jan-16 1-Jul-16 1-Jan-17 1-Jul-17 WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 250 100 200 90 150 80 100 70 50 0 60
Slide 38: European Carbon Emission Allowance
38 10 0 1 2 3 4 5 6 7 8 9 4-Jan-13 4-Mar-13 Source: Bloomberg July 27, 2017 4-May-13 4-Jul-13 4-Sep-13 4-Nov-13 4-Jan-14 4-Mar-14 4-May-14 4-Jul-14 4-Sep-14 4-Nov-14 4-Jan-15 © Valmet | Half Year Financial Review, January–June 2017 4-Mar-15 4-May-15 4-Jul-15 4-Sep-15 4-Nov-15 4-Jan-16 European Energ
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
Slide 40: January–September 2017 Interim Review
January–September 2017 Interim Review October 24, 2017 www.valmet.com/investors 40 July 27, 2017 © Valmet | Half Year Financial Review, January–June 2017
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