Slide 1: Valmet – focus on profitability improvement
Valmet – focus on profitability improvement SEB Nordic Seminar 2015, Copenhagen Pasi Laine, President and CEO
Slide 2: Agenda
Agenda Valmet Roadshow 1 Valmet overview 2 Financial targets 3 Q3/2014 in brief 4 Conclusions
Slide 3: Valmet overview
Valmet overview Valmet <>
Slide 4: Key figures
Key figures Sales split by business Sales by geographic area > Net Sales 2,613 (2013)1 (2013)1 MEUR (1 > EBITA before NRI (2 11% 15% 54 MEUR 39% 26% > Gearing 0% 15% > Employees 10,500 17% > Global market leader with #1-2 market positions in all markets 35% 42% served North America South America Ser
Slide 5: Three business lines serving pulp, paper and energy industries
Three business lines serving pulp, paper and energy industries Services Pulp and Energy Paper • Mill and plant Technologies and solutions Technologies and solutions improvements for for • Roll and workshop • Pulp production • Board production services • Energy production • Tissue production • Parts
Slide 6: Strong global presence – good platform for growth
Strong global presence – good platform for growth North America 1,127 EMEA China • Large installed base employees • Large installed base to • Capital project opportunities to be serviced be serviced in board and tissue • Growth opportunity in • Growth opportunity in • Good services market increased
Slide 7: Global customer base
Global customer base Services Pulp and Energy Paper Key customers Key customers Key customers Yunnan Yun-Jing Forestry & Pulp Mill Valmet is a registered trademark of Valmet Corporation. Other trademarks appearing here are trademarks of their respective owners. 7 January, 2015 © Valmet | SEB Nordic
Slide 8: Valmet’s way forward
Valmet’s way forward Our Vision To become the global Our Must-Wins champion in serving our customers Our Strategy Customer excellence Valmet develops and Leader in technology supplies competitive and innovation Our Mission technology and services to Excellence in processes Converting renewable
Slide 9: Financial targets
Financial targets Valmet <>
Slide 10: Financial targets
Financial targets Growth Net sales growth to exceed market growth Profitability EBITA1 before non-recurring items: 6-9% ROCE Return on capital employed (pre-tax), ROCE 2: minimum of 15% Dividend Dividend payout at least 40% of net profit policy 1) EBITA before non-recurring items = operating profit
Slide 11: Q3/2014 in brief
Q3/2014 in brief Valmet <>
Slide 12: Q3/2014 in brief
Q3/2014 in brief Orders received on a par with Q3/2013 in services • Services orders on a par with Q3/2013 • Net sales decreased compared with Q3/2013 Orders received slowed down in capital business from high level in H1/2014 • Orders received increased in Paper, and Pulp and Energy compared with Q3
Slide 13: Key figures Q3/2014
Key figures Q3/2014 EUR million Q3/2014 Q3/2013 Change Q1-Q3/2014 Q1-Q3/2013 Change Orders received 466 382 22% 2,590 1,754 48% Order backlog1 2,312 1,658 39% 2,312 1,658 39% Net sales 590 601 -2% 1,697 1,946 -13% EBITA2 32 31 4% 58 79 -27% % of net sales 5.5% 5.1% 3.4% 4.1% EBIT3 26 -17 35 7 >100%
Slide 14: Orders received EUR 2.6 billion in Q1-Q3/2014
Orders received EUR 2.6 billion in Q1-Q3/2014 Orders received (EUR million), Orders received (EUR million), by business line by area 1,200 1,101 3,000 1,200 1,101 3,000 1,023 1,023 1,000 861 212 2,500 1,000 861 60 2,500 190 422 47 120 800 128 2,000 800 103 2,000 600 511 1,500 600 511 214 34 1,500 42
Slide 15: Customer activity increased in 2014
Customer activity increased in 2014 Date Description Business line Country Value Jan 27 Multi-fuel boiler Pulp and Energy Finland Not disclosed Jan 31 Upgrade of recovery boiler and power boiler Pulp and Energy Sweden and Bulgaria Not disclosed Feb 7 Key technology for pulp mill Pulp and Energy Indo
Slide 16: Order backlog at EUR 2.3 billion
Order backlog at EUR 2.3 billion Order backlog (EUR million) Structure of order backlog 3,000 2,500 ~20% +65% 2,406 2,312 2,000 1,883 1,972 1,807 1,500 1,658 1,398 1,000 ~80% 500 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Services business Capital business Cancelled Fibria order of EUR 331 million
Slide 17: Net sales and profitability development
Net sales and profitability development Net sales and EBITA before NRI (EUR million) 714 666 631 601 588 590 519 5.1% 5.5% EBITA target 6–9% 4.1% 3.7% 3.1% 0.7% -3.7% Services Capital 243 256 256 274 251 235 224 EBITA-% Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 EBITA before 26 22 31 -25 4 22 32 NRI
Slide 18: Good development in gross profit and SG&A expenses
Good development in gross profit and SG&A expenses Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 140 35% 140 35% 120 30% 120 30% 100 25% 100 25% 80 20% 80 20% 60 15% 60 15% 40 10% 40 10% 20 5% 20 5% 0 0% 0 0% Q2/2013 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/20
Slide 19: Key Must-Win objectives to improve profitability to the targeted level of 6–9%
Key Must-Win objectives to improve profitability to the targeted level of 6–9% Improve project Reduce quality Savings in Continue to Improve product and service costs and lead procurement improve cost cost margin times competitiveness competitiveness to increase gross profit • Harmonization of • Com
Slide 20: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2014 (as given on February 6, 2014) Guidance for Valmet estimates that net sales in 2014 will decline from the 2013 2014 level and EBITA before non-recurring items will increase in comparison with 2013 Short-term market outlook Q4/2013 Q1/2014 Q2/2
Slide 21: Conclusion
Conclusion Valmet <>
Slide 22: Valmet’s way forward
Valmet’s way forward Our Vision To become the global Our Must-Wins champion in serving our customers Our Strategy Customer excellence Valmet develops and Leader in technology supplies competitive and innovation Our Mission technology and services to Excellence in processes Converting renewable
Slide 23: Important notice
Important notice IMPORTANT: You must read the following before continuing. 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 pre
Slide 24: FORWARD
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