Slide 1: Orders received EUR 835 million and Comparable EBITA EUR 47 million in Q1/2019
Orders received amounted to EUR 835 million and Comparable EBITA to EUR 47 million in Q1/2019 Interim Review, January–March 2019 April 26, 2019 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Interim Review, January–March 2019 1 Q1/2019 in brief 2 Development of the business lines 3 Financial development 4 Guidance and short-term market outlook 5 Summary of Interim Review Q1/2019 6 Appendix 2 April 26, 2019 © Valmet | Interim Review, January–March 2019
Slide 3: Q1/2019 in brief
Q1/2019 in brief Valmet <>
Slide 4: Q1/2019 in brief
Q1/2019 in brief Orders received remained at the previous year’s level at EUR 461 million in stable business1 Orders received decreased to EUR 382 million in capital business2 Net sales decreased to EUR 686 million Order backlog increased to EUR 3.0 billion Comparable EBITA increased to EUR 47 milli
Slide 5: Valmet in Q1/2019
Valmet in Q1/2019 Orders received by business line Orders received by area Orders received EUR 835 million 22% 20% 26% Net sales EUR 686 million 43% 5% Comparable EBITA EUR 47 million 11% Comparable EBITA margin 24% 6.9% 11% 39% Order backlog EUR 3,001 million Services North America Employees Automa
Slide 6: Orders received decreased to EUR 835 million in Q1/2019
Orders received decreased to EUR 835 million in Q1/2019 Orders received (EUR million) 1,600 4,000 1,400 3,500 1,200 3,000 1,000 2,500 800 2,000 600 1,101 1,500 1,005 940 1,026 1,023 857 890 865 835 400 781 725 793 803 692 788 796 743 727 1,000 480 580 200 466 500 0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2
Slide 7: Stable business orders received totaled EUR 1,722 million during last four quarters
Stable business orders received totaled EUR 1,722 million during last four quarters Orders received (EUR million) in stable business1 600 1,800 500 445 461 1,500 443 439 435 409 424 402 394 372 383 381 103 400 344 88 359 93 102 1,200 330 342 103 109 95 81 88 293 87 101 81 267 273 273 75 80 75 300 78
Slide 8: Order backlog at EUR 3,001 million at the end of Q1/2019
Order backlog at EUR 3,001 million at the end of Q1/2019 Order backlog (EUR million) Structure of order backlog 3,500 3,000 3,001 2,791 2,829 2,500 2,704 2,714 2,720 2,583 2,621 2,406 2,458 ~30% 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 0 Stable bus
Slide 9: Development of the business lines
Development of the business lines
Slide 10: Services: Orders received remained at previous year's level and net sales increased
Services: Orders received remained at the previous year’s level and net sales increased Orders received (EUR million) Net sales (EUR million) 2017: 2018: 2017: 2018: EUR 1,242 million EUR 1,315 million EUR 1,178 million EUR 1,219 million 400 355 358 1,600 400 366 1,600 346 344 340 350 313 321 321 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) 2017: 2018: 2017: 2018: EUR 368 million EUR 386 million EUR 335 million EUR 357 million 140 420 140 124 420 109 103 115 120 103 101 102 360 120 101 99 18 360 95 93 11 90 100 88 87 88 15 8 300
Slide 12: Pulp and Energy: Orders received remained at previous year's level and net sales decreased
Pulp and Energy: Orders received remained at the previous year’s level and net sales decreased Orders received (EUR million) Net sales (EUR million) 2017: 2018: 2017: 2018: EUR 678 million EUR 1,000 million EUR 800 million EUR 863 million 700 622 1,400 700 1,400 600 560 1,200 600 1,200 500 451 1,000
Slide 13: Paper: Orders received and net sales decreased
Paper: Orders received and net sales decreased Orders received (EUR million) Net sales (EUR million) 2017: 2018: 2017: 2018: EUR 1,035 million EUR 1,077 million EUR 784 million EUR 937 million 400 1,200 400 1,200 353 350 314 1,050 350 1,050 299 304 300 275 270 900 300 280 900 246 243 250 212 750 250
Slide 14: Valmet strengthens its stable business by acquiring GL&V
Valmet strengthens its stable business by acquiring GL&V The acquisition was announced on February 26, 2019 and completed on April 1, 2019 Key information about the acquired operations Net sales in 2018 EUR ~160 million • GL&V is a supplier of technologies, upgrade and process optimization services,
Slide 15: Financial development
Financial development Valmet <>
Slide 16: Key figures
Key figures EUR million Q1/20191 Q1/2018 Change 2018 Orders received 835 890 -6% 3,722 Order backlog2 3,001 2,583 16% 2,829 Net sales 686 732 -6% 3,325 Comparable EBITA 47 22 >100% 257 % of net sales 6.9% 3.0% 7.7% EBITA 49 19 >100% 241 Operating profit (EBIT) 43 12 >100% 211 % of net sales 6.2% 1.6
Slide 17: 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% 26% 250 25% 250 25% 19% 200 20% 200 20% 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 18: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA, rolling 12 months (EUR million and %)1 3,257 3,308 3,325 3,279 3,145 3,019 3,044 2,995 3,058 2,851 2,928 2,926 2,919 2,846 2,876 2,707 8.6% Target 8–10% 2,500 2,473 2,515 7.7% 2,374 2,363 7.1% 6.8% 6.7% 6.8% 6.7% 6.7% 6.7% 6.8% 6.4%
Slide 19: 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: EUR 236 million EUR 78 million EUR 246 million EUR 291 million EUR 284 million 160 140 143 120 100 117 122 119 80 88 94 89 60 78 64 40 43 46 20 30 17 16 3 33 31 19 3 30 0
Slide 20: Net working capital at -13% of rolling 12 months orders received
Net working capital at -13% 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 1,026 857 890 865 940 781 793 803 788 796 835 500 725 692 743 727 10% 580 466 480 0 0% -235 -249 -345 -317 -265 -244 -238 -194 -181 -265 -294 -
Slide 21: Net debt and gearing decreased compared with Q1/2018
Net debt and gearing decreased compared with Q1/2018 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 300 30% 50% 21% 45% 43% 43% 42% 41% 41% 42% 41% 200 20% 39% 39% 40% 37% 37% 36% 178 35% 100 6% 10% 4% 30% 0% 0 52 -3% -3% 0% 25% 31 -27 -30 -4 -100 -102 -98 20% -100 -10% -166 15% -
Slide 22: 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 1,184 1,194 1,167 1,195 1,138 1,141 1,137 1,150 22% 1,112 1,079 1,033 1,049 20% 985 967 902 18% 877 17% Target 16% 16% 15–20% 14% 14%
Slide 23: Effects of IFRS 16
Effects of IFRS 16 IFRS 16, effective as of January 1, 2019, requires to recognize almost all lease contracts as an asset and liability Approximate effects of IFRS 16 for 20191 Depreciation Increases (approx. EUR 20 million) EBITA Increases (approx. EUR 2 million) Net debt Increases (approx. EUR 5
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: Summary of Interim Review Q1/2019
Summary of Interim Review Q1/2019
Slide 27: Q1/2019 in brief
Q1/2019 in brief Orders received remained at the previous year’s level at EUR 461 million in stable business1 Orders received decreased to EUR 382 million in capital business2 Net sales decreased to EUR 686 million Order backlog increased to EUR 3.0 billion Comparable EBITA increased to EUR 47 milli
Slide 28: Appendix
Appendix Valmet <>
Slide 29: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 307 million as at March 31, 2019 Amount of outstanding interest-bearing debt Main financing sources and facilities (EUR million) Source Amount outstanding 350 300 Loans from banks and EUR 307 million financial institutions 250 200 EUR 200 m
Slide 30: Largest shareholders on March 31, 2019
Largest shareholders on March 31, 2019 Based on information given by Euroclear Finland Ltd # Shareholder name Number of shares % of shares 1 Solidium Oy1 16,695,287 11.14% 2 Elo Pension Company 3,600,000 2.40% 3 Ilmarinen Mutual Pension Insurance Company 3,160,000 2.11% 4 Varma Mutual Pension Insura
Slide 31: Shareholder structure on March 31, 2019
Shareholder structure on March 31, 2019 Nominee registered and non-Finnish holders 56.2% Solidium Oy 11.1% Finnish private investors 12.5% Finnish institutions, companies and foundations 20.2% Sector Number of shareholders % of total shareholders Number of shares % of shares 1 Nominee registered and
Slide 32: 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 33: Pulp and paper price trends
33 1,000 1,100 1,200 1,300 200 300 400 500 600 700 800 900 April 26, 2019 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 © Valmet | Interim Review, January–March 2019 Jan-15 Northern bleached softwood pulp (USD/t) Mar-15 May-15 Jul-15 Pulp and paper price trends
Slide 34: Crude oil, steam coal, natural gas and electricity: Europe
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 Jan-19 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 J
Slide 35: Crude oil, steam coal, natural gas and electricity: United States
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 May-13 April 26, 2019 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 © Valmet | Interim Review, January–March 2019 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Source: Bloomberg European Energy Exchange
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: Interim Review January–June 2019
Interim Review January–June 2019 July 23, 2019 www.valmet.com/investors 38 April 26, 2019 © Valmet | Interim Review, January–March 2019
Slide 39: FORWARD
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