Valmet Corp · OMXHEX:VALMT
Valmet — Q3 2018 Earnings Presentation
39 slides from Valmet's earnings presentation, Oct 23, 2018
Slide 1: Interim Review, January–September 2018
Orders received increased in all business lines – Comparable EBITA increased Interim Review, January–September 2018 October 23, 2018 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Interim Review, January–September 2018 1 Q3/2018 in brief 2 Development of the business lines 3 Moving the industry forward with Industrial Internet 4 Financial development 5 Guidance and short-term market outlook 6 Summary of Q3/2018 7 Appendix 2 October 23, 2018 © Valmet | Interim Review, J
Slide 3: Q3/2018 in brief
Q3/2018 in brief Valmet <>
Slide 4: Q3/2018 in brief
Q3/2018 in brief Orders received increased to EUR 381 million in stable business1 Orders received increased to EUR 570 million in capital business2 Net sales increased to EUR 765 million Order backlog remained at the previous year’s level at EUR 2.8 billion Comparable EBITA increased to EUR 61 milli
Slide 5: Valmet in Q3/2018
Valmet in Q3/2018 Orders received by business line Orders received by area Orders received EUR 940 million 12% 22% 32% 32% Net sales EUR 765 million 16% 6% Comparable EBITA EUR 61 million 7% Comparable EBITA margin 8.0% 29% 43% Employees Services North America 12,481 Automation South America Pulp an
Slide 6: Orders received increased to EUR 940 million in Q3/2018
Orders received increased to EUR 940 million in Q3/2018 Orders received (EUR million) Orders received in Q1–Q3/2018 by area 1,400 3,500 Asia-Pacific 10% North America 1,200 3,000 22% 1,000 2,500 China 17% 800 2,000 South 600 1,500 America 1,101 1,023 1,005 940 6% 857 890 865 400 781 725 793 803 788
Slide 7: Stable business orders received totaled EUR 1,649 million during the last four quarters
Stable business orders received totaled EUR 1,649 million during the last four quarters Orders received (EUR million) in stable business1 600 1,800 500 445 1,500 443 439 409 424 402 394 372 383 381 400 344 88 359 93 102 1,200 330 342 88 103 95 81 81 293 87 75 101 300 267 273 273 75 80 900 242 78 200
Slide 8: Order backlog at EUR 2,791 million at the end of Q3/2018
Order backlog at EUR 2,791 million at the end of Q3/2018 Order backlog (EUR million) Structure of order backlog 3,000 2,791 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 ~30% 1,500 1,000 ~70% 500 0 Stable business Capital busi
Slide 9: Development of the business lines
Development of the business lines
Slide 10: Services: Orders received increased and net sales remained at the previous years' level
Services: Orders received increased and net sales remained at the previous years’ level Orders received (EUR million) Net sales (EUR million) Q1–Q3/2017: Q1–Q3/2018: Q1–Q3/2017: Q1–Q3/2018: EUR 960 million EUR 990 million EUR 838 million EUR 854 million 400 1,600 400 1,600 355 346 344 340 350 313 32
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–Q3/2017: Q1–Q3/2018: Q1–Q3/2017: Q1–Q3/2018: EUR 267 million EUR 276 million EUR 220 million EUR 233 million 120 103 450 120 115 450 101 102 101 99 95 93 11 100 88 87 88 375 100 6 90 375 8
Slide 12: Pulp and Energy: Orders received and net sales increased
Pulp and Energy: Orders received and net sales increased Orders received (EUR million) Net sales (EUR million) Q1–Q3/2017: Q1–Q3/2018: Q1–Q3/2017: Q1–Q3/2018: EUR 527 million EUR 549 million EUR 581 million EUR 631 million 700 1,400 700 1,400 622 600 560 1,200 600 1,200 500 1,000 500 1,000 400 800 4
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–Q3/2017: Q1–Q3/2018: Q1–Q3/2017: Q1–Q3/2018: EUR 832 million EUR 921 million EUR 480 million EUR 657 million 400 1,200 400 1,200 353 350 314 1,050 350 1,050 299 304 300 275 270 900 300 900 246 243
Slide 14: Moving the industry forward with Industrial Internet
Moving the industry forward with Industrial Internet
Slide 15: Valmet transforms Industrial Internet and digitalization into peak performance and excellent customer experience
Valmet transforms Industrial Internet and digitalization into peak performance and excellent customer experience Industrial Internet applications and services Customer Portal Solution Ecosystem Data visualization, reporting and guidance Our expertise and on-line Leading industry players A
Slide 16: Today, customers are extensively utilizing Valmet's Industrial Internet capabilities
Today, customers are extensively utilizing Valmet’s Industrial Internet capabilities Examples of results: Energy savings with remote paper machine optimization Valmet’s competence network Customer’s Valmet Savings per prevented unplanned expert experts shutdown by using diagnostic tools and remote s
Slide 17: Financial development
Financial development Valmet <>
Slide 18: Key figures
Key figures EUR million Q3/2018 Q3/2017 Change Q1–Q3/2018 Q1–Q3/2017 Change Orders received 940 743 27% 2,696 2,544 6% Order backlog1 2,791 2,720 3% 2,791 2,720 3% Net sales 765 715 7% 2,340 2,091 12% Comparable EBITA 61 56 10% 144 138 5% % of net sales 8.0% 7.8% 6.2% 6.6% EBITA 55 49 12% 131 133 -1
Slide 19: 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) 250 23% 25% 250 25% 200 20% 200 20% 15% 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 Q2/2016 Q3/2016
Slide 20: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %) 967 8.0% Target 8–10% 854 7.8% 844 804 7.5% 777 779 785 8.4% 7.2% 765 734 732 715 732 6.1% 685 7.3% 652 7.1% 7.2% 645 588 590 6.9% 5.3% 561 6.4% 6.5% 519 4.8% Capital business 5.5% 523 3.7% 3.5% 445 375 442 Stable
Slide 21: Cash flow provided by operating activities
Cash flow provided by operating activities Cash flow provided by operating activities (EUR million) 2014: 2015: 2016: 2017: Q1–Q3/2018: EUR 236 million EUR 78 million EUR 246 million EUR 291 million EUR 141 million 140 120 117 122 119 100 80 88 94 89 60 78 64 40 43 46 20 30 33 31 17 16 3 19 3 0 -20
Slide 22: Net working capital at -12% of rolling 12 months orders received
Net working capital at -12% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 1,101 1,023 20% 1,005 940 857 890 865 781 725 793 803 788 796 743 727 500 692 10% 580 466 480 0 0% -235 -249 -345 -317 -265 -244 -238 -194 -181 -265 -294 -335 -353 -
Slide 23: Net debt and gearing decreased compared with Q3/2017
Net debt and gearing decreased compared with Q3/2017 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 300 27% 30% 50% 24% 21% 45% 43% 42% 41% 41% 42% 41% 200 231 15% 20% 38% 37% 39% 39% 40% 36% 35% 36% 178 192 35% 100 126 6% 10% 4% 30% 52 31 0% 0 -3% -3% 0% 25% -27 -30 -4 -100 -102
Slide 24: 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 18% 1,112 1,138 1,141 1,137 1,079 Target 16% 1,033 1,049 985 15–20% 967 17% 902 14% 14% 14% 14% 14% 877 13% 13% 13%
Slide 25: Guidance and short-term market outlook
Guidance and short-term market outlook
Slide 26: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2018 (as announced on July 17, 2018) Valmet estimates that net sales in 2018 will increase in comparison with 2017 (EUR 3,058 million) and Guidance Comparable EBITA in 2018 will increase in comparison with 2017 (EUR 218 million). Short-term market
Slide 27: Summary of Q3/2018
Summary of Q3/2018 Valmet <>
Slide 28: Q3/2018 in brief
Q3/2018 in brief Orders received increased to EUR 381 million in stable business1 Orders received increased to EUR 570 million in capital business2 Net sales increased to EUR 765 million Order backlog remained at the previous year’s level at EUR 2.8 billion Comparable EBITA increased to EUR 61 milli
Slide 29: Appendix
Appendix Valmet <>
Slide 30: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 201 million as at September 30, 2018 Amount of outstanding interest-bearing debt Main financing sources and facilities (EUR million) 250 Source Amount outstanding Loans from banks and EUR 201 million 200 financial institutions 150 EUR 200 m
Slide 31: Largest shareholders on September 30, 2018
Largest shareholders on September 30, 2018 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 3,600,000
Slide 32: Shareholder structure on September 30, 2018
Shareholder structure on September 30, 2018 Nominee registered and non-Finnish holders 51.3% Solidium Oy 11.1% Finnish private investors 13.1% Finnish institutions, companies and foundations 24.6% Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered a
Slide 33: Share of non-Finnish holders and number of shareholders
Share of non-Finnish holders and number of shareholders 56% 59,000 57,000 54% 55,000 52% 53,000 50% 51,000 48% 49,000 46% 47,000 44% 45,000 42% 43,000 01/2014 04/2014 07/2014 10/2014 01/2015 04/2015 07/2015 10/2015 01/2016 04/2016 07/2016 10/2016 01/2017 04/2017 07/2017 10/2017 01/2018 04/2018 07/20
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 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 CIF ARA steam coal (USD/t) Brent crude oil (USD/barrel) Natural gas spot price NBP (GBP/therm) 100 80 60 40 20 0 -20 Jan-13 Jul-13 J
Slide 35: Crude oil, steam coal, natural gas and electricity
Crude oil, steam coal, natural gas and electricity 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, PJM (USD/MWh) (LHS) Electricity spot
Slide 36: European Carbon Emission Allowance
36 10 15 20 25 30 0 5 Jan-13 Mar-13 October 23, 2018 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 © Valmet | Interim Review, January–September 2018 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 European Carbon Emission Allowance Sep-16 Source: Bloombe
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 2018
Financial Statements Review 2018 February 7, 2019 www.valmet.com/investors 38 October 23, 2018 © Valmet | Interim Review, January–September 2018
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