Valmet Corp · OMXHEX:VALMT

Valmet — H1 2022 Earnings Presentation

39 slides from Valmet's earnings presentation, Jul 27, 2022

  1. Slide 1: Orders received increased to EUR 1.3 billion and Comparable EBITA to EUR 122 million

    Orders received increased to EUR 1.3 billion and Comparable EBITA to EUR 122 million in the second quarter Half Year Financial Review, January–June 2022 July 27, 2022 Pasi Laine, President and CEO

  2. Slide 2: Agenda

    Agenda Half Year Financial Review, January–June 2022 1 Q2/2022 in brief 2 Development of the segments and the business lines 3 Integration of Flow Control into Valmet 4 Katri Hokkanen appointed CFO of Valmet as of August 1, 2022 5 Financial development 6 Valmet’s Way Forward for the new Valmet and f

  3. Slide 3: Q2/2022 in brief

    Q2/2022 in brief Valmet <>

  4. Slide 4: Q2/2022 in brief

    Q2/2022 in brief Orders received increased to EUR 1.31 billion Net sales increased to EUR 1.29 billion Order backlog amounted to EUR 4.78 billion Comparable EBITA increased to EUR 122 million and margin was 9.5% Gearing was 22% 4 July 27, 2022 © Valmet | Half Year Financial Review, January–June 2022

  5. Slide 5: Valmet in Q2/2022

    Valmet in Q2/2022 Net sales by segment Net sales by area Orders received EUR 1,306 million 12% 22% Net sales 31% EUR 1,286 million 15% 46% Comparable EBITA EUR 122 million 14% Comparable EBITA margin 9.5% 23% 36% Order backlog EUR 4,784 million Services North America Employees South America 17,670 A

  6. Slide 6: Orders received increased to EUR 1,306 million in Q2/2022

    Orders received increased to EUR 1,306 million in Q2/2022 Orders received in H1/2022 by area Orders received (EUR million) Asia- 2,000 5,000 Pacific North 11% America 1,800 4,500 22% 1,600 4,000 1,400 3,500 China 16% 1,200 3,000 South 1,000 2,500 America 800 2,000 7% 1,312 1,324 1,306 600 1,101 1,08

  7. Slide 7: Stable business orders received totaled EUR 2,319 million during the last twelve months

    Stable business orders received totaled EUR 2,319 million during the last twelve months Orders received (EUR million) in stable business 2,500 2,319 2,000 1,947 1,875 680 1,701 1,772 1,609 467 1,519 416 1,500 386 415 1,367 368 337 248 1,055 1,000 1,639 1,459 1,356 1,481 1,242 1,315 1,055 1,119 1,182

  8. Slide 8: Order backlog EUR 4,784 million at the end of Q2/2022

    Order backlog EUR 4,784 million at the end of Q2/2022 Order backlog (EUR million) Structure of order backlog by segment 6,000 ~15% 5,000 4,784 4,096 ~65% 4,000 ~20% 3,333 3,257 3,000 2,829 2,458 2,283 1,998 2,074 2,000 1,000 Process Technologies Services Automation 0 2014 2015 2016 2017 2018 2019 20

  9. Slide 9: Development of the segments and the business lines

    Development of the segments and the business lines

  10. Slide 10: Services: Orders received increased to EUR 911 million in H1/2022

    Services: Orders received increased to EUR 911 million in H1/2022 Orders received (EUR million) Net sales (EUR million) Comparable EBITA (EUR million and % of net sales) H1/2021: H1/2022: H1/2021 : H1/2022 : H1/2021 : H1/2022 : EUR 752 million EUR 911 million EUR 625 million EUR 720 million EUR 83 m

  11. Slide 11: Automation: Orders received increased to EUR 452 million in H1/2022

    Automation: Orders received increased to EUR 452 million in H1/2022 Automation segment includes Automation Systems and starting from Q2/2022 also Flow Control Orders received (EUR million) Net sales (EUR million) Comparable EBITA (EUR million and % of net sales) H1/2021: H1/2022: H1/2021: H1/2022: H

  12. Slide 12: Flow Control: Strong start as part of Valmet

    Flow Control: Strong start as part of Valmet Orders received (EUR million)* Net sales (EUR million)* Q2/2021: Q2/2022: Q2/2021: Q2/2022: EUR 151 million* EUR 198 million EUR 146 million* EUR 177 million 800 714 800 681 660 678 700 628 625 700 611 590 593 576 600 555 600 528 522 504 500 500 400 400 3

  13. Slide 13: Automation Systems: Orders received increased to EUR 253 million in H1/2022

    Automation Systems: Orders received increased to EUR 253 million in H1/2022 Orders received (EUR million) Net sales (EUR million) H1/2021: H1/2022: H1/2021: H1/2022: EUR 239 million EUR 253 million EUR 161 million EUR 203 million 600 600 467 481 500 500 454 416 415 402 412 368 386 393 400 337 400 33

  14. Slide 14: Process Technologies: Orders received decreased to EUR 1,268 million in H1/2022

    Process Technologies: Orders received decreased to EUR 1,268 million in H1/2022 Orders received (EUR million) Net sales (EUR million) Comparable EBITA (EUR million and % of net sales) H1/2021: H1/2022: H1/2021: H1/2022: H1/2021: H1/2022: EUR 1,549 million EUR 1,268 million EUR 1,015 million EUR 1,14

  15. Slide 15: Pulp and Energy business line: Orders received decreased to EUR 581 million in H1/2022

    Pulp and Energy business line: Orders received decreased to EUR 581 million in H1/2022 Orders received (EUR million) Net sales (EUR million) H1/2021: H1/2022: H1/2021: H1/2022: EUR 778 million EUR 581 million EUR 463 million EUR 542 million 1,600 1,600 1,344 1,400 1,400 1,125 1,160 1,200 1,200 1,101

  16. Slide 16: Paper business line: Orders received decreased to EUR 688 million in H1/2022

    Paper business line: Orders received decreased to EUR 688 million in H1/2022 Orders received (EUR million) Net sales (EUR million) H1/2021: H1/2022: H1/2021: H1/2022: EUR 772 million EUR 688 million EUR 552 million EUR 604 million 1,800 1,634 1,800 1,550 1,600 1,600 1,400 1,400 1,194 1,076 1,141 1,2

  17. Slide 17: Update on the war in Ukraine

    Update on the war in Ukraine  Direct impacts to Valmet are limited – At the end of June 2022, Valmet had approximately 80 (140 at the end of Q1/22) employees in Russia, working primarily in sales, engineering, maintenance and financial administration – Valmet does not have production in Russia – Ap

  18. Slide 18: Integration of Flow Control into Valmet

    Integration of Flow Control into Valmet

  19. Slide 19: Integration of Flow Control into Valmet

    Integration of Flow Control into Valmet  Integration proceeding according to plan  Active sales and marketing of Valmet’s whole offering started  Implementation of several cost synergy actions regarding function costs, common locations and supply chain started during Q2  Valmet expects EUR 25 mi

  20. Slide 20: Balance sheet impact of the merger

    Balance sheet impact of the merger  The merger between Valmet and Neles had a significant impact on Valmet’s balance sheet on April 1, 2022 – Total merger consideration amounted to EUR 1,476 million – Goodwill increased by EUR 879 million and Other intangible assets by EUR 830 million – Quarterly a

  21. Slide 21: Katri Hokkanen appointed CFO of Valmet as of August 1, 2022

    Katri Hokkanen appointed CFO of Valmet as of August 1, 2022

  22. Slide 22: Katri Hokkanen appointed CFO of Valmet as of August 1, 2022

    Katri Hokkanen appointed CFO of Valmet as of August 1, 2022  Ms. Katri Hokkanen (M.Sc. Econ) has been appointed CFO at Valmet as of August 1, 2022. In this position she will report to President and CEO Pasi Laine. Katri Hokkanen has worked as Valmet’s interim CFO since May 1, 2022.  Katri is a str

  23. Slide 23: Financial development

    Financial development Valmet <>

  24. Slide 24: Key figures

    Key figures EUR million Q2/2022 Q2/2021 Change Q1–Q2/2022 Q1–Q2/2021 Change Orders received 1,306 1,228 6% 2,631 2,540 4% Order backlog1 4,784 4,019 19% 4,784 4,019 19% Net sales 1,286 943 36% 2,246 1,801 25% Comparable EBITA 122 95 29% 202 175 15% % of net sales 9.5% 10.1% -0.5 pp 9.0% 9.7% -0.7 pp

  25. Slide 25: Segment key figures

    Segment key figures Orders received, EUR million Q2/2022 Q2/2021 Change Q1–Q2/2022 Q1–Q2/2021 Change Services 460 370 24% 911 752 21% Automation 305 116 >100% 452 239 89% Process Technologies 542 742 -27% 1,268 1,549 -18% Total 1,306 1,228 6% 2,631 2,540 4% Net sales, EUR million Q2/2022 Q2/2021 Cha

  26. 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% 1,062 1,000 25% 1,000 25% 24% 800 20% 800 20% 697 600 15% 600 15% 16% 400 10% 400 10% 200 5% 200 5% 0 0% 0 0% 2014 2015 2016 2017 2018 2019 2020 2021 Q2/2022 2014

  27. Slide 27: Comparable EBITA margin development

    Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %)1 4,380 Target 12–14% 3,935 3,740 10.4% 3,547 3,325 10.9% 2,928 2,926 3,058 7.7% 9.8% Capital Business 2,473 7.1% 8.9% 6.7% 6.2% 2,294 Stable business 1,832 2,079 2,163 4.3% 1,584 1,799 2,086 1,572 1,473 Comparable

  28. 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 4,831 500 532 4,000 40% 482 3,986 3,722 3,653 400 3,000 3,272 30% 3,071 3,139 2,878 2,000 20% 300 291

  29. Slide 29: Net debt and gearing increased compared with Q2/2021

    Net debt and gearing increased compared with Q2/2021 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 600 30% 510 50% 500 46% 21% 22% 45% 42% 42% 43% 41% 41% 400 20% 41% 42% 40% 18% 300 40% 38% 38% 39% 37% 39% 13% 36% 37% 200 6% 10% 35% 100 178 184 3% 52 149 30 3 30% 0 -1% -1% 0% 0%

  30. Slide 30: Capital employed, Comparable ROCE and EPS

    Capital employed, Comparable ROCE and EPS Capital employed (EUR million) and Comparable return on capital Earnings per share (EPS) and Adjusted EPS, EUR employed (ROCE), before taxes (%) 2.24 3,244 2.09 23% 23% 22% 20% 1.54 16% 16% 1.35 14% 1,808 13% 1,639 1.01 10% 1,231 1,314 1,195 1,137 0.81 1,150

  31. Slide 31: Valmet’s Way Forward for the new Valmet and financial targets

    Valmet’s Way Forward for the new Valmet and financial targets

  32. Slide 32: Valmet’s Way Forward

    Valmet’s Way Forward Vision Continuous improvement To become the global champion in serving our customers and in Strategy and renewal moving the industries forward. Valmet develops and supplies competitive and Must-Wins reliable process technologies, services and automation to the pulp, paper and en

  33. Slide 33: Financial targets aligned with Valmet’s financial reporting structure

    Financial targets aligned with Valmet’s financial reporting structure Growth Profitability ROCE Dividend policy Net sales for Services and Comparable EBITA: Comparable return on Dividend payout at least Automation segments to 12–14% capital employed (ROCE) 50% of net profit grow over two times the b

  34. Slide 34: Guidance and short-term market outlook

    Guidance and short-term market outlook

  35. Slide 35: 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

  36. Slide 36: Q&A

    Q&A 36 July 27, 2022 © Valmet | Half Year Financial Review, January–June 2022

  37. Slide 37: Interim Review January–September 2022

    Interim Review January–September 2022 October 26, 2022 www.valmet.com/investors 37 July 27, 2022 © Valmet | Half Year Financial Review, January–June 2022

  38. Slide 38: 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

  39. Slide 39: Forward-looking statements

    FORWARD

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