Slide 1: Orders received were over EUR 1 billion and profitability continued to increase
Orders received were over EUR 1 billion and profitability continued to increase Interim Review, January–September 2019 October 24, 2019 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Interim Review, January–September 2019 1 Q3/2019 in brief 2 Development of the business lines 3 Recent achievements in sustainability 4 Financial development 5 Guidance and short-term market outlook 6 Appendix 2 October 24, 2019 © Valmet | Interim Review, January–September 2019
Slide 3: Q3/2019 in brief
Q3/2019 in brief Valmet <>
Slide 4: Q3/2019 in brief
Q3/2019 in brief Orders received increased to EUR 433 million in stable business1 Orders received increased to EUR 637 million in capital business2 Net sales increased to EUR 857 million Order backlog increased to EUR 3.4 billion Comparable EBITA increased to EUR 81 million and margin was 9.5% Geari
Slide 5: Valmet in Q3/2019
Valmet in Q3/2019 Orders received by business line Orders received by area Orders received 11% EUR 1,058 million 23% 23% 5% Net sales 32% EUR 857 million Comparable EBITA EUR 81 million Comparable EBITA margin 37% 24% 8% 9.5% 37% Order backlog EUR 3,425 million Services North America Employees Autom
Slide 6: Orders received increased to EUR 1,058 million in Q3/2019
Orders received increased to EUR 1,058 million in Q3/2019 Orders received (EUR million) Orders received in Q1–Q3/2019 by area 1,800 4,500 Asia- 1,600 4,000 Pacific North 13% America 1,400 3,500 19% 1,200 3,000 China 1,000 2,500 7% 800 2,000 600 1,101 1,500 1,005 1,026 1,083 1,058 South 400 1,023 781
Slide 7: Stable business orders received totaled EUR 1,802 million during last four quarters
Stable business orders received totaled EUR 1,802 million during last four quarters1 Orders received (EUR million) in stable business1 700 2,100 600 1,800 500 461 474 1,500 443 439 445 435 433 409 424 402 394 383 372 381 103 104 400 342 344 88 359 93 102 1,200 330 88 103 109 97 293 95 81 81 267 273
Slide 8: Order backlog at EUR 3,425 million at the end of Q3/2019
Order backlog at EUR 3,425 million at the end of Q3/2019 Order backlog (EUR million) Structure of order backlog 3,500 3,425 3,000 3,216 3,001 2,791 2,829 ~30% 2,500 2,704 2,714 2,720 2,583 2,621 2,406 2,458 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 ~70% 1,000 500
Slide 9: Development of the business lines
Development of the business lines
Slide 10: Services: Orders received and net sales increased
Services: Orders received and net sales increased Orders received (EUR million) Net sales (EUR million) Q1–Q3/2018: Q1–Q3/2019: Q1–Q3/2018: Q1–Q3/2019: EUR 990 million EUR 1,064 million EUR 854 million EUR 973 million 400 358 371 1,600 400 366 361 1,600 355 346 344 335 1,400 340 336 350 313 321 321
Slide 11: Automation: Orders received and net sales increased
Automation1: Orders received and net sales increased Orders received2 (EUR million) Net sales2 (EUR million) Q1–Q3/2018: Q1–Q3/2019: Q1–Q3/2018: Q1–Q3/2019: EUR 276 million EUR 304 million EUR 233 million EUR 256 million 140 420 140 124 420 115 120 109 360 120 360 103 101 102 103 104 101 99 18 95 93
Slide 12: Pulp and Energy: Orders received increased and net sales remained at the previous year's level
Pulp and Energy: Orders received increased and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) Q1–Q3/2018: Q1–Q3/2019: Q1–Q3/2018: Q1–Q3/2019: EUR 549 million EUR 805 million EUR 631 million EUR 604 million 700 1,400 700 1,400 622 600 560 1,200 6
Slide 13: Paper: Orders received decreased and net sales increased
Paper: Orders received decreased and net sales increased Orders received (EUR million) Net sales (EUR million) Q1–Q3/2018: Q1–Q3/2019: Q1–Q3/2018: Q1–Q3/2019: EUR 921 million EUR 844 million EUR 657 million EUR 646 million 450 419 1,200 450 1,200 400 1,050 400 1,050 353 350 314 900 350 304 900 299 3
Slide 14: Recent achievements in sustainability
Recent achievements in sustainability
Slide 15: Valmet's recent achievements in sustainability
Valmet’s recent achievements in sustainability • Inclusion in the Dow Jones Sustainability Index for the sixth consecutive year • Achieved A rating in CDP’s climate program ranking • Received RobecoSAM Bronze Class Sustainability Award • Reselected in Ethibel Sustainability Index Excellence Europe 3
Slide 16: Financial development
Financial development Valmet <>
Slide 17: Key figures
Key figures EUR million Q3/2019 Q3/2018 Change Q1–Q3/2019 Q1–Q3/2018 Change Orders received 1,058 940 13% 2,976 2,696 10% Order backlog1 3,425 2,791 23% 3,425 2,791 23% Net sales 857 765 12% 2,444 2,340 4% Comparable EBITA 81 61 32% 198 144 38% % of net sales 9.5% 8.0% 8.1% 6.2% EBITA 83 55 49% 196
Slide 18: 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) 300 30% 300 30% 25% 250 25% 250 25% 200 20% 200 20% 16% 150 15% 150 15% 100 10% 100 10% 50 5% 50 5% 0 0% 0 0% Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016
Slide 19: Comparable EBITA margin within the target range
Comparable EBITA margin within the target range Net sales and Comparable EBITA, rolling 12 months (EUR million and %)1 3,257 3,308 3,325 3,279 3,337 3,429 3,019 3,044 2,995 3,058 3,145 Target 8–10% 2,851 2,928 2,926 2,919 2,846 2,876 9.1% 2,707 8.7% 7.1% 8.6% 2,500 2,473 2,515 6.8% 6.7% 6.8% 6.7% 6.
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: 2017: 2018: Q1–Q3/2019: EUR 236 million EUR 78 million EUR 246 million EUR 291 million EUR 284 million EUR 113 million 200 150 143 100 117 122 119 126 88 94 89 50 78 64 43 46 30 17 1
Slide 21: Net working capital at -11% of rolling 12 months orders received
Net working capital at -11% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 1,101 1,023 20% 1,005 1,026 1,083 1,058 857 890 865 940 781 793 803 788 796 835 500 725 692 743 727 10% 580 466 480 0 0% -235 -249 -345 -353 -317 -265 -244 -238 -194
Slide 22: Net debt and gearing increased compared with Q3/2018
Net debt and gearing increased compared with Q3/2018 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 300 30% 50% 21% 45% 42% 43% 43% 200 17% 20% 41% 41% 42% 41% 39% 39% 40% 36% 37% 37% 38% 38% 178 100 6% 152 10% 35% 4% 6% 0% 60 30% 0 52 -3% -3% 0% 31 25% -27 -30 -4 -100 -102 -98 20
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 1,237 1,239 1,184 1,194 1,167 1,195 1,195 1,138 1,141 1,137 1,150 22% 1,112 1,079 24% 1,033 1,049 20% 985 23% 967 902 18% 877 17% Target 16%
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 2019 (confirmed on April 1, 2019 following the completion of the acquisition of GL&V) Valmet estimates that net sales in 2019 will increase in comparison with 2018 (EUR 3,325 million) and Guidance Comparable EBITA in 2019 will increase in compariso
Slide 26: Appendix
Appendix Valmet <>
Slide 27: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 257 million as at September 30, 2019 Maturity profile of outstanding interest-bearing debt Main financing sources and facilities (EUR million) Source Amount outstanding 300 Loans from banks and 250 EUR 207 million financial institutions 200
Slide 28: Largest shareholders on September 30, 2019
Largest shareholders on September 30, 2019 Based on information given by Euroclear Finland Ltd # Shareholder name Number of shares % of shares and votes 1 Solidium Oy1 16,695,287 11.14% 2 Ilmarinen Mutual Pension Insurance Company 4,740,000 3.16% 3 Elo Mutual Pension Insurance Company 3,700,000 2.47
Slide 29: Shareholder structure on September 30, 2019
Shareholder structure on September 30, 2019 The shareholder structure is based on the classification of sectors determined by Statistics Finland 12.6% 11.1% 53.1% 23.1% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations Solidium Oy* Finnish private investors S
Slide 30: Share of non-Finnish holders and number of shareholders
Share of non-Finnish holders and number of shareholders 58% 64,000 56% 61,000 54% 58,000 52% 55,000 50% 52,000 48% 49,000 46% 46,000 44% 43,000 42% 40,000 12/2013 03/2014 06/2014 09/2014 12/2014 03/2015 06/2015 09/2015 12/2015 03/2016 06/2016 09/2016 12/2016 03/2017 06/2017 09/2017 12/2017 03/2018 0
Slide 31: Crude oil, steam coal, natural gas and electricity prices: Europe
Crude oil, steam coal, natural gas and electricity prices Europe 140 14 120 12 100 10 80 8 60 6 40 4 20 2 0 0 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 O
Slide 32: Crude oil, steam coal, natural gas and electricity prices: United States
Crude oil, steam coal, natural gas and electricity prices United States 120 6 100 5 80 4 60 3 40 2 20 1 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 Electricity spot price, NEPOOL (USD/MWh) (LHS) US uti
Slide 33: European Carbon Emission Allowance price
European Carbon Emission Allowance price 35 30 25 20 15 10 5 0 Apr-13 Jul-13 Apr-14 Jul-14 Apr-15 Jul-15 Apr-16 Jul-16 Apr-17 Jul-17 Apr-18 Jul-18 Apr-19 Jul-19 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 European Energy Exchange (EEX) spot price
Slide 34: 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 35: Financial Statements Review 2019
Financial Statements Review 2019 February 5, 2020 www.valmet.com/investors 35 October 24, 2019 © Valmet | Interim Review, January–September 2019
Slide 36: FORWARD
FORWARD