Valmet Corp · OMXHEX:VALMT
Valmet — Investor Day (November 2015)
73 slides from Valmet's investor day presentation, Nov 26, 2015
Slide 1: Automation – taking customers' performance forward
Automation – taking customers’ performance forward Tampere site visit November 26, 2015 Sakari Ruotsalainen, Business Line President, Automation
Slide 2: History of Automation in Tampere
History of Automation in Tampere 1920’s An aircraft repair 1936 1944 1968 Workshop Division is opened in Tampere Measurement and control instruments Valmet Oy Instrument founded in for the process industry begin to develop Works established in Helsinki to repair Rantaperkiö aircraft instrumentation
Slide 3: History of Automation in Tampere
History of Automation in Tampere 1980’s 2000’s IQInsight Damatic, the first Distributed Control 1960 System (DCS) IQProfilers (IQSteam Pro) 2015 IQCaliper-L Metso Process Automation The Airmatic, a PaperIQ Plus Systems to Valmet pneumatic Acquisition of Sentrol Systems (QCS) Multivariable Model Pred
Slide 4: Valmet today at Lentokentänkatu
Valmet today at Lentokentänkatu Automation • R&D • Project operations >480 • Sales and Services employees • Management and support functions Pulp & Energy • Product and technology >540 • Delivery operations employees • Management and support functions 4 November 26, 2015 © Valmet | Sakari Ruotsalain
Slide 5: Automation business line
Automation business line Contents 1 Automation is a strong business with great positions 2 Automation market drivers 3 We take our Customers’ performance forward 4 Strategy implementation through Must-Wins 5 Summary
Slide 6: Automation is a strong business with great positions
Automation is a strong business with great positions
Slide 7: Automation business line overview
Automation business line overview Extensive range of process Global network of expertise Strong R&D investments automation and information close to our Customers across the automation management solutions to offering take our customers’ business performance forward Global market leader 2014 figures
Slide 8: Automation business line overview
Automation business line overview Net sales (2014) 9% 9% 19% 33% ~45 % 7% ~55 % 67% 56% North America South America EMEA Services business China Pulp & Paper Capital business Asia-Pacific Energy & Process 8 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation
Slide 9: Orders received in Automation totaled EUR 78 million in Q3/2015
Orders received in Automation totaled EUR 78 million in Q3/2015 Orders received1 (EUR million) Net sales (EUR million) 160 160 140 140 120 95 120 100 78 100 79 10 72 80 62 8 80 55 11 6 60 60 40 85 70 40 68 66 20 20 0 0 Q1/15 Q2/15 Q3/15 Q1/15 Q2/15 Q3/15 Orders received, internal (from other busines
Slide 10: Customer base
Customer base Pulp Paper Energy Process & Marine 90% of business directly with Customers Valmet is a registered trademark of Valmet Corporation. Other trademarks appearing here are trademarks of their respective owners. 10 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Au
Slide 11: Automation has a history of modest growth but high and resilient profitability
Automation has a history of modest growth but high and resilient profitability Modest growth in net sales High and resilient profitability Relative stable margins during the last 10 years, EBITA margin 10– 12% Strong service business, based on large installed base and captive business model Net
Slide 12: Automation's service business has grown steadily
Automation’s service business has grown steadily Indexed: (2006 = 100) 160 Valmet’s installed base grows constantly 140 120 100 Customers have less own maintenance 80 resources 60 40 Customers need to take process quality and performance 20 forward 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 12 N
Slide 13: Automation serves its customers across plant life cycle
Automation serves it’s customers across plant life cycle Process plant life cycle Process Up to 30 years plant Design, construct and Operate, maintain and Refurbish and commission optimize reconfigure • Initial process • Process availability • Change processes and investments • Process performance t
Slide 14: Our automation offering
Our automation offering Pulp and paper Energy Process 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 System
Slide 15: Proven performance
Proven performance Valmet has delivered more than 4,500 automation systems 40,000 analyzers and measurements Over 1,000 power plants worldwide utilize Valmet’s process automation Valmet is #1 in QCS, analyzers and measurements #1 in pulp performance optimization using advanced controls. #2 in pulp &
Slide 16: Customer results in pulp and paper markets
Customer results in pulp and paper markets 2010–2014 More than 60 new tissue and board lines automated More than 600 new QCS and Profiler system deliveries More than 200 QCS and Profilers competitor system replacements More than 100 competitor DCS/PLC replacements Market leader in analyzers 16 Novem
Slide 17: 1,000 power plants worldwide utilize Valmet's process automation
1,000 power plants worldwide utilize Valmet’s process automation North America EMEA >110 Asia-Pacific and China >370 >500 Power plant installed base Includes Valmet’s systems delivered by partners 17 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation
Slide 18: Automation market drivers
Automation market drivers Valmet <>
Slide 19: Market drivers and opportunities
Market drivers and opportunities Anticipated long-term market growth Estimated market size for the current Pulp & Paper Energy, Process and Marine offering (EUR) Valmet’s market ~1% 1.0 ~20% ~2% 1.0 ~10% share p.a. bn p.a. bn Market • World trade, e-commerce and emerging • Urbanization and growing m
Slide 20: We take our Customers' performance forward
We take our Customers’ performance forward
Slide 21: We take our Customers' performance forward
We take our Customers’ performance forward 1 Expertise close to our Customers Business model with flexibility and 2 intimacy 3 Continuous innovation & renewal Combining process technology, 4 automation and services Industrial internet delivered – 5 every day 21 November 26, 2015 © Valmet | Sakari Ru
Slide 22: Strong global presence close to our customers
1 2 3 4 5 Strong global presence close to our customers Over 100 locations in 33 countries • Over 100 service centers • 80 sales offices • 15 project centers Automation 1,600 automation professionals Including 700 services engineers 22 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line
Slide 23: Our business model is based on high customer intimacy with a flexible delivery system
1 2 3 4 5 Our business model is based on high customer intimacy with a flexible delivery system Flexible Customer intimate Project execution Sales & Service Product supply Engineering 60% Project management and lead >90% Direct sales and service network engineering in-house 40% Project engineering b
Slide 24: Continuous technology innovation & renewal
1 2 3 4 5 Continuous technology innovation & renewal to move our customers’ performance forward 1980s 1990s 2010 2014 2015 2016 Automation foundation Industry leading offering Introducing the next level • Damatic ”Classic” • Metso DNA (now • New MD & CD in automation • Damatic XD Valmet DNA) Control
Slide 25: Valmet's unique offering combines process technology, automation and services
1 2 3 4 5 Valmet’s unique offering combines process technology, automation and services Process technology Customer Services Automation 25 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation
Slide 26: Valmet's key capabilities combined to take customers' performance forward
1 2 3 4 5 Valmet’s key capabilities combined to take customers’ performance forward Challenging fuels Boiler type: Additives in use Occuring super in use or plan to CFB, BFB or plan to use heater corrosion change fuel diet & grate boiler Liquid sulphate Solid sulphur Process conditions with challeng
Slide 27: Valmet has a solid foundation for Industrial Internet
1 2 3 4 5 Valmet has a solid foundation for Industrial Internet Valmet’s competence network Customer’s Valmet’s process remote center 350 Ongoing 738 70,000 320 440 78 Valmet-supplied 350 Condition Advanced Online Performance Co-creation of lines with Valmet Monitoring (CM) process control connectio
Slide 28: Our unique offering can be fully integrated into Industrial Internet
1 2 3 4 5 Our unique offering can be fully integrated into Industrial Internet • Advanced Analytics • Maintenance planning Remote • Performance optimization • Remote condition monitoring Services • Remote Support On-site • Process visualization • Energy management visualization • Information and his
Slide 29: Centralized control room
1 2 3 4 5 Centralized control room Undisclosed energy customer Background and Customer’s target • Energy customer with 26 plants • Target to centralize operation control to one location to achieve cost savings in the plants and securing best operating competence to all plants Our Solution • Centrali
Slide 30: Predictive component lifetime modelling
1 2 3 4 5 Predictive component lifetime modelling Undisclosed paper mill Background Results: • Paper Mill with Valmet Paper Machine Accurate lifetime Challenge predictions to Mill • To reduce total cost of ownership (TCO) for several significant Enables fast learning of components new component beha
Slide 31: Strategy implementation through Must-Wins
Strategy implementation through Must-Wins
Slide 32: Strategy implementation via Must-Win initiatives
Strategy implementation via Must-Win initiatives Must-Wins Must-Win initiatives for Automation business line • Further strengthen our capabilities close to customers Customer Customer • Win market share through competitor replacements excellence excellence • Grow partner business • Provide customer
Slide 33: Summary
Summary Valmet <>
Slide 34: Summary
Summary We have Delivered strong and stable business performance Great market positions Strong footprint of experts close to our Customers Market leading technology solutions Strategy to continue winning market share We are Committed to taking our Customers’ performance forward 34 Novemb
Slide 35: FORWARD
FORWARD
Slide 36: Energy and process automation – well positioned for long term growth
Energy and process automation – well positioned for long term growth Tampere site visit November 26, 2015 Jukka T. Pulkkinen, VP, Energy & Process Systems
Slide 37: Energy and process automation
Energy and process automation Contents 1 Our market focus and our position 2 Technology and services offering 3 Well positioned for long term growth 4 Valmet takes Customers’ performance forward in energy 5 Summary
Slide 38: Our market focus and our position
Our market focus and our position
Slide 39: Valmet has a good position in energy and process industries, including marine
Valmet has a good position in energy and process industries, including marine Energy and process industries We have consistently developed the energy automation system business for over 20 years Strong market position in bio and waste-to-energy Blue-chip partnerships based on our technology ~3
Slide 40: Technology and services offering
Technology and services offering
Slide 41: Automation offering for energy and other process industries
Automation offering for energy and other process industries Distributed Control System Performance solutions (DCS) • Advanced process controls • Process simulators • Process controls • Plant management applications • Safety systems and solutions • Information management • Energy management solutions
Slide 42: Well positioned for long term growth
Well positioned for long term growth
Slide 43: Well positioned for long-term growth
Well positioned for long-term growth Target market Automation’s proven opportunity Biomass and multifuel power plants Valmet is a market leader in solutions for biomass industry. Use of biomass for power generation has it’s place in the global energy mix. Waste-to-energy plants Valmet is a market le
Slide 44: Market leader in European waste-to-energy automation
Market leader in European waste-to-energy automation UK Finland • Ineos Runcorn, Manchester phase 1 Norway • Westenergy Oy Ab, Vaasa • Ineos Runcorn, Manchester phase 2 • BIR Avallsenergi, Bergen • MES Environmental, Dudley • MES Environmental, Wolverhampton Estonia • Waste Recycling Group, Lincolns
Slide 45: We have automated world's largest multifuel FBB plants
We have automated world’s largest multifuel FBB plants Nacogdoches 100MW – Largest biomass boiler in US Alholmens 240MW – World’s largest multifuel boiler Neyveli Lignite 250MW – India’s Sha Lang Tan 300MW – Lagisza 460MW – World’s largest largest FBB China’s largest FBB FBB – OT CFB 45 November 26,
Slide 46: India's leading power plant EPC trusts Valmet's automation technology
India’s leading power plant EPC trusts Valmet’s automation technology India’s leading power plant EPC and equipment manufacturer BHEL trusts Valmet automation technology (>360 deliveries) State-owned and largest power plant equipment manufacturer in the closed Indian power market operating as an e
Slide 47: JV with SAC Guodian Nanjing Automation to address Chinese thermal power market
JV with SAC Guodian Nanjing Automation to address Chinese thermal power market China Huadian Corp, China’s second biggest power producing company with 130GW installed base trusts Valmet’s technology JV between Valmet and SAC Guodian Nanjing Automation Co. Ltd SAC Guodian Nanjing Automation Co. L
Slide 48: Valmet DNA automation system on board flagship cruise liners
Valmet DNA automation system on board flagship cruise liners Valmet DNA systems sold to 31 vessels including flagship cruise liners since 2011 >600 ships sailing with Valmet’s technology on board Automation system for a cruise liner is the same size as for a big pulp mill 48 November 26, 2015 ©
Slide 49: Valmet takes Customers' performance forward in energy
Valmet takes Customers’ performance forward in energy
Slide 50: Minimizing safely our customer's fuel costs with Valmet combined capabilities
Minimizing safely our customer’s fuel costs with Valmet combined capabilities for biomass use Kuopion Energia Oy, Finland Background • Kuopion Energia Oy produces electricity and district heat for the residents of the city of Kuopio, thus production reliability is in high priority • Long term partne
Slide 51: Summary
Summary Valmet <>
Slide 52: Summary
Summary Solid energy, process industry and marine business with good long-term growth opportunities Market leader position in biomass & multifuel market – can strengthen further in Valmet Leverage strong position in Waste-to-Energy market in Europe to new geographic areas Marine cruise market
Slide 53: FORWARD
FORWARD
Slide 54: Valmet – world leader in pulp and paper automation
Valmet – world leader in pulp and paper automation Tampere site visit November 26, 2015 Juha Koistinen, VP, Control & Measurement Systems
Slide 55: Pulp and paper automation
Pulp and paper automation Contents 1 Strong market position 2 Technology and services offering 3 Pulp and paper market is a growth market 4 We take our pulp and paper customers’ performance forward 5 Summary
Slide 56: Strong market position
Strong market position Valmet <>
Slide 57: Automation has a strong position in pulp and paper
Automation has a strong position in pulp and paper Pulp and paper is globally a niche segment, where Valmet is the #1 player Very high entry barriers limits number of potential new entrants Competitors have been losing focus ~65% Very strong offering due to continued R&D investments Global
Slide 58: Technology and services offering
Technology and services offering
Slide 59: Unique and market leading automation offering
Unique and market leading automation offering Market position Main Scope/product in pulp and paper competitors Distributed • DCS for process and • ABB machines controls • Honeywell Control • Condition monitoring • Emerson Systems (DCS) • Information management #2 • Siemens • Yokogawa • APC (Advanced
Slide 60: Completely renewed market leading Quality Management System product family launched
Completely renewed market leading Quality Management System product family launched 2015 Valmet IQ 2015 2015 New IQ Quality Vision 2012 Metso WMS and WIS 2012 Metso IQ system 2008 PaperIQ Select – intelligent scanning 2004 One Source IQ Profilers 2004 PaperIQ Plus – fast scanners, MPC controls 2001
Slide 61: Pulp and paper market is a growth market
Pulp and paper market is a growth market
Slide 62: Pulp and paper is a growth market for Automation
Pulp and paper is a growth market for Automation Driver Automation’s proven opportunity Growing paper demand in emerging Greenfield production lines markets • Emerging markets (APAC) • Tissue & board • Pulp Growing demand for tissue and packaging board globally 1 A lot of ageing mill capacity Automa
Slide 63: Global paper demand expected to grow
1 2 3 4 Global paper demand expected to grow Paper consumption by area Paper consumption by paper grade (thousand metric tonnes) (thousand metric tonnes) 2015–2025 CAGR 1,000,000 1,000,000 Forecast Forecast +2.0% 900,000 900,000 +2.9% 800,000 Emerging 800,000 markets +2.9% 700,000 +3.1% 700,000 2015
Slide 64: Pulp and paper automation replacement market expected to be active
1 2 3 4 Pulp and paper automation replacement market expected to be active Papermaking lines in developed markets are Large ageing competitor installed base is a getting old major opportunity Weighted average PM capacity, 1,000 t/a Number of pulp and paper DCS systems installed before year 2000 300
Slide 65: We address pulp and paper makers' challenges
1 2 3 4 We address pulp and paper makers’ challenges Energy • High energy utilization per ton of production • Maximize tonnage by eliminating process downtime and increasing speed Production • Brain-drain Quality • Ever stricter end-customer requirements for product quality • Commodity grades compet
Slide 66: How can improvements in production efficiency and cost savings be achieved
1 2 3 4 How can improvements in production efficiency and cost savings be achieved Time available Time not available UNUSED MACHINE SPEED POTENTIAL Design/max speed 15% Increased Minimized Monthly average production rate costs E speed A X R I T E Decreased rejects E D S R A L H N U P SALEABLE E T A
Slide 67: Earning model: Fiber savings via improved stability
1 2 3 4 Earning model: Fiber savings via improved stability - target level shift in MD or CD “Good product” acceptance high limit ( dry weight) Target shift= benefit “ Good product” acceptance low limit (dry weight) 67 November 26, 2015 © Valmet | Juha Koistinen, VP, Control & Measurement Systems
Slide 68: Continuously growing installed base turns to service business
1 2 3 4 Continuously growing installed base turns to service business 300 to 400 >70% new systems installed project to service every year agreement conversion 68 November 26, 2015 © Valmet | Juha Koistinen, VP, Control & Measurement Systems
Slide 69: We take our pulp and paper customers' performance forward
We take our pulp and paper customers’ performance forward
Slide 70: Combining Valmet's strengths to take Customers performance forward
Combining Valmet’s strengths to take Customers performance forward Background Path to the solution • Stora Enso Heinola mill’s target was to • Customer’s inquiry included refiner refit and automation improve broke refining with a refiner rebuild elements • Re-fitted refiner from Varkaus mill to • Co
Slide 71: Summary
Summary Valmet <>
Slide 72: Summary
Summary Market leader in pulp and paper automation Pulp and paper is a growth market for us Committed to taking our customers’ performance forward 72 November 26, 2015 © Valmet | Juha Koistinen, VP, Control & Measurement Systems
Slide 73: FORWARD
FORWARD