Slide 1: Interim Review January–September 2017
Growth continued in the Paper business line – Valmet’s profitability improved Interim Review January–September 2017 October 24, 2017 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Interim Review, January–September 2017 1 Q3/2017 in brief 2 Development of business lines 3 Recent achievements in sustainability 4 Financial development 5 Guidance and short-term market outlook 6 Summary of Interim Review Q3/2017 7 Appendix 2 October 24, 2017 © Valmet | Interim Review, Janua
Slide 3: Q3/2017 in brief
Q3/2017 in brief Valmet <>
Slide 4: Q3/2017 in brief
Q3/2017 in brief Orders received remained at the previous year’s level at EUR 346 million in stable business1 Orders received decreased to EUR 397 million in capital business2 Net sales increased to EUR 748 million Order backlog increased to EUR 2.5 billion Profitability improved – Comparable EBITA
Slide 5: Valmet in Q3/2017
Valmet in Q3/2017 Orders received by Orders received by Orders received business line area EUR 743 million 7% 13% 38% Net sales 21% 37% 10% EUR 748 million Comparable EBITA EUR 59 million Comparable EBITA 8% margin 16% 47% 7.9% Services North America Automation South America Employees Pulp and Energ
Slide 6: Orders received decreased to EUR 743 million in Q3/2017
Orders received decreased to EUR 743 million in Q3/2017 Orders received (EUR million) Orders received in Q1–Q3/2017 by area 1,400 3,500 Asia-Pacific North 10% America 1,200 3,000 19% 1,000 2,500 China 800 2,000 17% South America 600 1,500 6% 1,101 1,023 1,005 400 781 725 793 803 692 788 857 796 743
Slide 7: Stable business orders received totaled EUR 1,598 million during the last 4 quarters
Stable business orders received totaled EUR 1,598 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 88 359 1,200 330 342 344 103 95 81 88 273 273 293 87 75 300 267 75 80 900 242 78 200 600 321 355 321 273 273 293 307
Slide 8: Order backlog at EUR 2,523 million at the end of Q3/2017
Order backlog at EUR 2,523 million at the end of Q3/2017 Order backlog (EUR million) Structure of order backlog 3,000 2,500 2,613 2,551 2,406 2,523 ~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 Q1/1
Slide 9: Development of business lines
Development of business lines
Slide 10: Services: Orders received increased and net sales remained at previous year's level
Services: Orders received increased and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) Q1–Q3/2016: Q1–Q3/2017: Q1–Q3/2016: Q1–Q3/2017: EUR 898 million EUR 960 million EUR 846 million EUR 838 million 400 355 1,600 400 1,600 350 313321 321 1,400 3
Slide 11: Automation: Orders received decreased and net sales remained at previous year's level
Automation1: Orders received decreased and net sales remained at the previous year’s level Orders received2 (EUR million) Net sales2 (EUR million) Q1–Q3/2016: Q1–Q3/2017: Q1–Q3/2016: Q1–Q3/2017: EUR 250 million EUR 267 million EUR 217 million EUR 220 million 120 103 450 120 101 450 95 99 100 88 87 8
Slide 12: Pulp and Energy: Orders received decreased and net sales increased
Pulp and Energy: Orders received decreased and net sales increased Orders received (EUR million) Net sales (EUR million) Q1–Q3/2016: Q1–Q3/2017: Q1–Q3/2016: Q1–Q3/2017: EUR 692 million EUR 527 million EUR 640 million EUR 669 million 700 622 1,400 350 312 1,400 600 560 1,200 300 1,200 262 229234 245
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–Q3/2016: Q1–Q3/2017: Q1–Q3/2016: Q1–Q3/2017: EUR 472 million EUR 832 million EUR 459 million EUR 523 million 400 1,200 400 1,200 350 314 1,050 350 1,050 300 275 900 300 900 246 243 250 212 750 250
Slide 14: Recent achievements in sustainability
Recent achievements in sustainability
Slide 15: Valmet's recent achievements in sustainability
Valmet’s recent achievements in sustainability Sustainability contributing to business growth Recent achievements Valmet’s Sustainability360º agenda • Inclusion in the Dow Jones World Sustainability Index (DJSI) for the fourth consecutive year Corporate Sustainable • Valmet reconfirmed as a constitu
Slide 16: Financial development
Financial development Valmet <>
Slide 17: Key figures
Key figures EUR million Q3/2017 Q3/2016 Change Q1–Q3/2017 Q1–Q3/2016 Change Orders received 743 788 -6% 2,544 2,282 11% Order backlog1 2,523 2,192 15% 2,523 2,192 15% Net sales 748 685 9% 2,223 2,141 4% Comparable EBITA 59 52 15% 150 140 8% % of net sales 7.9% 7.5% 6.8% 6.5% EBITA 53 49 7% 146 135 8
Slide 18: 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 22% 25% 200 25% 160 20% 160 20% 15% 120 15% 120 15% 80 10% 80 10% 40 5% 40 5% 0 Q3/2017 0% 0 0% Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/
Slide 19: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %) 854 779 804 785 803 777 734 748 Target 8–10% 7.3% 685 671 652 7.1% 7.2% 7.1% 6.9% 588 590 6.4% 7.9% 6.1% 561 7.5% 519 5.1% 4.8% 445 375 5.5% 408 427 429 Capital business 3.7% 3.5% 400 334 404 409 338 411 360 Stabl
Slide 20: Cash flow provided by operating activities
Cash flow provided by operating activities Cash flow provided by operating activities (EUR million) 2014: 2015: 2016: Q1–Q3/2017: EUR 236 million EUR 78 million EUR 246 million EUR 203 million 140 120 117 122 100 80 88 94 60 78 64 40 43 46 20 30 33 31 17 16 3 0 -20 -20 -40 Q1/2014 Q2/2014 Q3/2014 Q4
Slide 21: Net working capital at -10% of rolling 12 months orders received
Net working capital at -10% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 20% 1,101 1,023 1,005 781 793 803 788 857 796 743 500 725 692 10% 466 480 580 0 0% -257 -249 -345 -353 -355 -265 -244 -238 -247 -181 -265 -294 -428 -313 -344 -500 -1
Slide 22: Net debt decreased compared with both Q3/2016 and Q2/2017
Net debt decreased compared with both Q3/2016 and Q2/2017 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 27% 42% 300 24% 30% 45% 21% 38% 38% 38% 40% 36% 36% 37% 37% 200 15% 20% 35% 231 35% 178 192 100 126 6% 4% 10% 30% 52 -3% 31 -3% 25% 0 0% -27 -30 20% -100 -10% 15% -166 10% -200
Slide 23: 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 1,159 Target 1,122 1,154 15% 15–20% 985 14% 14% 14% 14% 14% 967 13% 13% 902 877 12% 12% 10% 10% 2% 2% 1% Q1/14 Q2/14
Slide 24: Guidance and short-term market outlook
Guidance and short-term market outlook
Slide 25: 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 26: Summary of Interim Review Q3/2017
Summary of Interim Review Q3/2017
Slide 27: Summary of Interim Review Q3/2017
Summary of Interim Review Q3/2017 Orders received remained at the previous year’s level at EUR 346 million in stable business1 Orders received decreased to EUR 397 million in capital business2 Net sales increased to EUR 748 million Order backlog increased to EUR 2.5 billion Profitability improved –
Slide 28: Appendix
Appendix Valmet <>
Slide 29: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 262 million as at September 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 262 million financial institutions 200 150 EUR 2
Slide 30: Largest shareholders on September 30, 2017
Largest shareholders on September 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 Elo Pension Company 4,210,000 2.81% 3 Varma Mutual Pension Insurance Company 4,165,465
Slide 31: Shareholder structure on September 30, 2017
Shareholder structure on September 30, 2017 13.6% 11.1% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations 49.3% Solidium Oy Finnish private investors 25.9% Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered a
Slide 32: Share of non-Finnish holders and number of shareholders
32 44% 46% 48% 50% 52% 54% 56% 42% 12/2013 01/2014 October 24, 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 05/2015 06/2015 Non-Finnish holders (LHS) 07/2015 © Valmet | Interim Review, January–September 2017
Slide 33: Pulp and paper price trends
Pulp and paper price trends 1,100 1,000 900 800 700 600 500 400 300 200 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Jul-13 Nov-13 Jul-14 Nov-14 Jul-15 Nov-15 Jul-16 Nov-16 Jul-17 May-13 May-14 May-15 May-16 May-17 Mar-16 Jan-13 Mar-13 Jan-14 Mar-14 Jan-15 Mar-15 Jan-16 Jan-17 Mar-17 Northern bleached softwoo
Slide 34: Crude oil, steam coal, natural gas and electricity
Crude oil, steam coal, natural gas and electricity Europe 140 120 100 80 60 40 20 0 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 CIF ARA steam coal (USD/t) Brent crude oil (USD/barrel) Natural gas spot price NBP (GBP/therm) 80 60 40 20 0 Ja
Slide 35: Crude oil, natural gas and electricity
Crude oil, natural gas and electricity United States 120 6 100 5 80 4 60 3 40 2 20 1 0 0 FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 250 85 200 80 150 75 100 70 50 0 65 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-1
Slide 36: European Carbon Emission Allowance
European Carbon Emission Allowance 10 9 8 7 6 5 4 3 2 1 0 May-17 May-13 May-14 May-15 May-16 Jul-16 Mar-13 Jul-13 Mar-14 Jul-14 Mar-15 Jul-15 Mar-16 Mar-17 Jul-17 Nov-13 Nov-14 Nov-15 Nov-16 Sep-15 Jan-13 Sep-13 Jan-14 Sep-14 Jan-15 Jan-16 Sep-16 Jan-17 Sep-17 European Energy Exchange (EEX) spot pri
Slide 37: 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 38: Financial Statements Review 2017
Financial Statements Review 2017 February 6, 2018 www.valmet.com/investors 38 October 24, 2017 © Valmet | Interim Review, January–September 2017
Slide 39: FORWARD
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