Valmet Corp · OMXHEX:VALMT
Valmet — Non-Deal Roadshow (July 2016)
94 slides from Valmet's roadshow presentation, July 2016
Slide 1: Valmet – unique offering with process technology, automation and services
Valmet – unique offering with process technology, automation and services Roadshow presentation July 2016
Slide 2: Agenda
Agenda Valmet roadshow presentation 1 Valmet overview 2 Investment highlights 3 Financials 4 Sustainability 5 Conclusion 6 Appendix 2 July 2016 © Valmet | Roadshow presentation
Slide 3: Valmet overview
Valmet overview Valmet <>
Slide 4: Valmet – over 200 years of industrial history
Valmet – over 200 years of industrial history 1797 Tamfelt 1951 1968-1996 End of 2013 1841 Götaverken Valmet Several M&As i.e. Demerger to 1856 Tampella 1986 KMW Valmet and Metso 1987 Wärtsilä paper finishing machinery 1858 Beloit 1992 Tampella Papertech 1860 KMW 1868 Sunds Defibrator 2015 Metso Pro
Slide 5: Valmet in 2015
Valmet 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% Comparable EBITA1 11% EUR 182 million Comparable EBITA1 31% 8% 45% margin 6.2% Services North America Automation Sou
Slide 6: 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 7: Strong, global presence is a good platform for growth
Strong, global presence is a good platform for growth 100 service centers, 86 sales offices, 34 production units, 16 R&D centers North America China • 8 service centers • 17 service centers • 6 production units • 7 production units • 3 sales offices • 8 sales offices 1,887 1,334 EMEA • 16 R&D center
Slide 8: Global customer base
Global customer base Pulp Paper Energy Process 80% of Process Automation Systems’ sales to Valmet’s current customer industries Valmet is a registered trademark of Valmet Corporation. Other trademarks appearing here are trademarks of their respective owners. 8 July 2016 © Valmet | Roadshow presentat
Slide 9: Financial targets
Financial targets Financial targets have been increased from 2017 onwards Growth Net sales growth to exceed market growth Profitability EBITA1 before non-recurring items: 6-9% ROCE Return on capital employed (pre-tax), ROCE2: minimum of 15% Dividend Dividend payout at least 40% of net profit policy
Slide 10: Investment highlights
Investment highlights Valmet <>
Slide 11: 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 12: 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 13: Stable business, with EUR 1.4 billion of net sales
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 14: Strong market position in capital business, with cost structure to meet business requirements
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 15: 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 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: 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 18: Financials
Financials Valmet <>
Slide 19: Valmet’s development
Valmet’s development New EBITA target 8–10% from 2017 onwards Orders received Net sales Comparable EBITA EBITA margin (EUR million)1 (EUR million)1 (EUR million)1 (%)1 3,500 3,500 200 10% 3,071 2,928 180 9% 3,000 2,878 3,000 2,613 160 8% 2,473 EBITA target 6–9% 2,500 2,500 140 7% 2,182 2,016 1,537 1
Slide 20: Key figures
Key figures EUR million Q2/2016 Q2/2015 Change Q1–Q2/2016 Q1–Q2/2015 Change Orders received 692 781 -11% 1,495 1,360 10% Order backlog1 2,106 2,208 -5% 2,106 2,208 -5% Net sales 804 779 3% 1,456 1,340 9% Comparable EBITA2 57 54 6% 88 73 21% % of net sales 7.1% 6.9% 6.1% 5.5% EBITA 55 42 32% 85 61 39
Slide 21: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %) New target 8–10% from 2017 onwards 854 779 804 777 734 7.3% 652 7.1% 6.9% Target 6–9% 588 590 6.4% 6.1% 561 519 4.8% 445 5.5% 408 427 Capital business 3.7% 3.5% 400 409 338 Stable business 498 371 377 337 354 319
Slide 22: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2016 (as given on February 9, 2016) Valmet estimates that net sales in 2016 will remain at the same level with Guidance for 2015 (EUR 2,928 million) and Comparable EBITA in 2016 will increase in 2016 comparison with 2015 (EUR 182 million). Due to n
Slide 23: Sustainability
Sustainability Valmet <>
Slide 24: 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 25: Conclusion
Conclusion Valmet <>
Slide 26: 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 27: 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 28: Appendix
Appendix 1 Financials 2 Area development 3 Market statistics 4 Shareholders and share price development 5 Offering 6 Management 7 Financial figures 28 July 2016 © Valmet | Roadshow presentation
Slide 29: Appendix – Financials
Appendix Financials Valmet <>
Slide 30: Orders received and net sales at previous year’s level in Services
Orders received and net sales at the previous year’s level in Services in Q2/2016 Orders received (EUR million) Net sales (EUR million) Q1–Q2/2015: Q1–Q2/2016: Q1–Q2/2015: Q1–Q2/2016: EUR 600 million EUR 634 million EUR 546 million EUR 561 million 350 313 321 1,400 350 314 1,400 293 307 278 304 304
Slide 31: Orders received at previous year’s level and net sales increased in Automation
Orders received at the previous year’s level and net sales increased in Automation in Q2/2016 Orders received1 (EUR million) Net sales1 (EUR million) 120 450 120 101 450 95 100 88 375 100 6 375 10 78 81 79 81 75 6 72 80 62 300 80 66 8 300 8 8 15 55 11 6 60 225 60 9 225 85 95 40 82 150 40 73 150 70 6
Slide 32: Orders received decreased and net sales increased in Pulp and Energy
Orders received decreased and net sales increased in Pulp and Energy in Q2/2016 Orders received (EUR million) Net sales (EUR million) Q1–Q2/2015: Q1–Q2/2016: Q1–Q2/2015: Q1–Q2/2016: EUR 397 million EUR 417 million EUR 453 million EUR 443 million 700 622 1,400 350 312 1,400 600 560 1,200 300 1,200 26
Slide 33: Orders received and net sales decreased in Paper
Orders received and net sales decreased in Paper in Q2/2016 Orders received (EUR million) Net sales (EUR million) Q1–Q2/2015: Q1–Q2/2016: Q1–Q2/2015: Q1–Q2/2016: EUR 278 million EUR 295 million EUR 273 million EUR 321 million 250 750 250 750 212 190 197 199 186 200 200 600 200 186 177 185 600 157 16
Slide 34: 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 34 July 2016 © Valmet | Roadshow presentation
Slide 35: 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 36: Net sales split, by area
Net sales split, by area Net sales split, areas (2015) Net sales split, Valmet (2015) Services Automation Stable business 10% 6% 8% 22% 8% 29% 5% 13% 21% 7% 45% 59% 10% North America North America South America South America EMEA EMEA 11% China China Asia-Pacific Asia-Pacific Pulp and Energy Paper C
Slide 37: Announced orders in H1/2016
Announced orders in H1/2016 Date Booked quarter Description Business line Country Value 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
Slide 38: Announced orders in H2/2016
Announced orders in H2/2016 Date Booked Description Business line Country Value quarter Jul 1 Q1 Automation technology Automation Malaysia Not disclosed1 Jul 4 Q2 Biomass-fired boiler plant and related Pulp and Energy Russia Not disclosed automation and environmental systems Jul 12 Q1 Advanced proce
Slide 39: 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 40: 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 41: Orders received decreased to EUR 692 million in Q2/2016
Orders received decreased to EUR 692 million in Q2/2016 Orders received (EUR million) Orders received in Q2/2016, by area 1,400 3,500 Asia-Pacific North 12% America 1,200 3,000 22% China 1,000 2,500 9% 800 2,000 South 600 1,500 America 1,101 1,023 5% 400 781 725 793 803 692 1,000 580 200 466 480 500
Slide 42: Stable business orders received totaled EUR 1,475 million during last 4 quarters
Stable business orders received totaled EUR 1,475 million during the last 4 quarters Orders received (EUR million) in stable business1 500 1,500 450 402 409 1,350 394 400 1,200 330 342 88 350 95 81 1,050 293 300 267 273 273 75 900 242 78 250 750 200 600 150 293 307 313 321 450 267 273 242 273 252 26
Slide 43: Order backlog at EUR 2.1 billion at end of Q2/2016
Order backlog at EUR 2.1 billion at the end of Q2/2016 Order backlog (EUR million) Structure of order backlog 3,000 2,500 2,406 2,312 ~30% 2,000 2,208 2,207 2,117 2,074 2,106 1,972 1,998 2,064 1,500 ~70% 1,000 500 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Stable business Capital
Slide 44: Gross profit at the previous year’s level
Gross profit at the previous year’s level Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 200 23% 25% 200 25% 160 20% 160 20% 17% 120 15% 120 15% 80 10% 80 10% 40 5% 40 5% 0 0% 0 0% Q2/2015 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q1
Slide 45: 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% 24% 27% 40%40%41% 21% 36%35%36% 117 34%35%35% 238 229 231 178 192 64 -39 -54 43 46 30 33 -5% -7%-158-166-134 17 16 3 -20
Slide 46: Net working capital -6% of rolling 12 months orders received
Net working capital -6% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 20% 1,101 1,023 500 781 725 793 803 10% 692 480 580 466 0 -181 0% -257 -249 -345 -353 -355 -265 -244 -238 -247 -500 -10% -1,000 -20% Q1/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2
Slide 47: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 351 million as at June 30, 2016 Amount of outstanding interest-bearing debt Main financing sources (EUR millions) Amount Lender 350 300 EUR 88 million European Investment Bank 250 EUR 86 million Skandinaviska Enskilda Banken 200 EUR 61 mill
Slide 48: Strong balance sheet to support large orders
Strong balance sheet to support large orders Financial position as of June 30, 2016 (EUR million) 224 75 103 296 17 2,874 276 2,352 231 843 Non-current Current debt Cash and Other Net debt Total equity Balance Advances Amounts due Adj. balance debt equivalents financial sheet total received to custo
Slide 49: 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 50: 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 51: Appendix – Area development
Appendix Area development Valmet <>
Slide 52: 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 53: 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 54: 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 55: 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 56: 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 57: Appendix – Market statistics
Appendix Market statistics Valmet <>
Slide 58: 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 59: 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 60: 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 61: 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 62: 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 63: 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 64: 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 65: 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 66: Pulp and paper price trends
66 1,000 1,200 200 400 600 800 0 July 2016 Source: Bloomberg 1-Dec-07 1-Mar-08 1-Jun-08 1-Sep-08 1-Dec-08 1-Mar-09 Testliner (EUR/t) 1-Jun-09 Uncoated (USD/t) 1-Sep-09 Eucalyptus pulp (USD/t) 1-Dec-09 1-Mar-10 1-Jun-10 © Valmet | Roadshow presentation 1-Sep-10 1-Dec-10 1-Mar-11 1-Jun-11 1-Sep-11 1-D
Slide 67: Pulp price spread
Pulp price spread NBSK Pulp prices, Europe: NBSK and BHKP (USD/ton) Northern bleached 1,100 350 softwood kraft pulp is Spread at the end of produced mainly in 1,000 January, 2016: $14 300 Canada and the Nordic 900 250 countries. NBSK is based on long fibre wood 800 200 species. It adds strength 700
Slide 68: Appendix – Shareholders and share price development
Appendix Shareholders and share price development
Slide 69: Largest shareholders on June 30, 2016
Largest shareholders on June 30, 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 6,108,465 4.08% 3 Ilmarinen Mutual Pension Insurance Company 3,388,055 2.
Slide 70: Ownership structure on June 30, 2016
Ownership structure on June 30, 2016 14.0% Nominee registered and non-Finnish holders 11.1% Finnish institutions, companies and foundations 47.8% Solidium Oy Finnish private investors 27.1% Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and non-
Slide 71: Share of non-Finnish holders and area split of shareholders
Share of non-Finnish holders and area split of shareholders Share of non-Finnish holders Approximate area split of and number of shareholders shareholders 60,000 1% 0% 56% 3% 2% 4% 58,000 54% 11% 56,000 52% 54,000 51% 50% 13% 52,000 48% 50,000 15% 46% 48,000 Finland United States Sweden United Kingd
Slide 72: Share price development and trading volume
72 Million shares 0 2 4 6 8 10 12 6.00 7.00 8.00 9.00 10.00 11.00 12.00 01/14 01/14 July 2016 02/14 02/14 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 10/14 10/14 11/14 © Valmet | Roadshow presentation 11/14 Valmet 12/14 12/14 01/15 01/15 02/15 02/15 03/15 03/1
Slide 73: Appendix – Offering
Appendix Offering Valmet <>
Slide 74: 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 75: 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 76: 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 77: 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 78: 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 79: 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 80: 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 81: Continuous investment in research and development to improve customers’ processes
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 82: Example of our R&D work - OptiConcept M board and paper machine
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 83: Appendix – Management
Appendix Management Valmet <>
Slide 84: 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: 70,031 Share ownership: 13,357 Share ownership: 8,779 Operational Development Communicatio
Slide 85: Board of Directors
Board of Directors Bo Risberg Mikael Von Aaro Cantell Lone Fønss (b. 1956) Frenckell (b. 1964) Schrøder Chairman of (b. 1947) Board member (b. 1960) the Board Vice Chairman of Finnish citizen Board member Swedish citizen the Board Danish citizen Finnish citizen • BSc (Mech. Eng), MBA • M.Sc. (Soc.)
Slide 86: Appendix – Financial figures
Appendix Financial figures Valmet <>
Slide 87: Net sales and profitability development, annual
Net sales and profitability development, annual New target as of Net sales and Comparable EBITA (EUR million)1 June 21, 2016 2,925 3,014 2,928 2,735 2,703 EBITA target 8–10% 2,613 2,453 2,473 6.2% 2,092 2,061 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
Slide 88: 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 89: Key ratios
Key ratios Q1–Q2/2016 Q1–Q2/2015 Earnings per share, EUR 0.28 0.19 Diluted earnings per share, EUR 0.28 0.19 Equity per share at end of period, EUR 5.58 5.38 Return on equity (ROE), % (annualized) 10% 7% Return on capital employed (ROCE) before taxes, % (annualized) 11% 9% Equity to assets ratio at
Slide 90: Consolidated statement of income
Consolidated statement of income EUR million Q2/2016 Q2/2015 Q1–Q2/ 2016 Q1–Q2/ 2015 Net sales 804 779 1,456 1,340 Cost of goods sold -621 -599 -1,124 -1,047 Gross profit 183 180 332 293 Selling, general and administrative expenses -133 -136 -263 -239 Other operating income and expenses, net -3 -12
Slide 91: Balance sheet as at June 30, 2016
Balance sheet as at June 30, 2016 Assets As at June As at June As at December EUR million 30, 2016 30, 2015 31, 2015 Non-current assets Intangible assets Goodwill 622 624 624 Other intangible assets 224 245 235 Total intangible assets 846 869 859 Property, plant and equipment Land and water areas 26
Slide 92: Balance sheet as at June 30, 2016
Balance sheet as at June 30, 2016 Equity and liabilities As at June As at June As at December 31, EUR million 30, 2016 30, 2015 2015 Equity Share capital 100 100 100 Reserve for invested unrestricted equity 407 404 404 Cumulative translation adjustments 12 24 18 Fair value and other reserves -5 - -4
Slide 93: Condensed Consolidated Statement of Cash Flows
Condensed Consolidated Statement of Cash Flows EUR million Q2/2016 Q2/2015 Q1–Q2/2016 Q1–Q2/2015 Cash flows from operating activities Profit / loss 31 21 43 29 Adjustments Depreciation and amortization 21 25 45 43 Financial income and expenses 3 1 6 2 Income taxes 13 9 18 13 Other non-cash items -6
Slide 94: FORWARD
FORWARD