Slide 1: Interim Review, January–March 2017
Orders received increased – especially in the Paper business line Interim Review, January–March 2017 April 25, 2017 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Interim Review, January–March 2017 1 Q1/2017 in brief 2 Business lines’ development 3 Financial development 4 Guidance and short-term market outlook 5 Summary of Interim Review Q1/2017 6 Appendix
Slide 3: Q1/2017 in brief
Q1/2017 in brief Valmet <>
Slide 4: Q1/2017 in brief
Q1/2017 in brief Orders received increased to EUR 427 million in stable business1 Orders received increased to EUR 578 million in capital business2 Net sales remained at the previous year’s level at EUR 671 million Order backlog increased to EUR 2.6 billion Profitability improved – Comparable EBITA
Slide 5: Valmet in Q1/2017
Valmet in Q1/2017 Orders received by Orders received by Orders received business line area EUR 1,005 million 13% 24% Net sales 31% 35% 9% EUR 671 million 3% Comparable EBITA EUR 35 million Comparable EBITA 7% 26% 50% margin 5.1% Services North America Automation South America Employees Pulp and Ener
Slide 6: Orders received increased to EUR 1,005 million in Q1/2017
Orders received increased to EUR 1,005 million in Q1/2017 Orders received (EUR million) Orders received in Q1/2017 by area 1,400 3,500 Asia-Pacific North 13% 1,200 3,000 America 24% 1,000 2,500 China 9% 800 2,000 600 1,500 South 1,101 America 1,023 1,005 400 781 725 793 803 692 788 857 1,000 3% 580
Slide 7: Stable business orders received totaled EUR 1,567 million during the last 4 quarters
Stable business orders received totaled EUR 1,567 million during the last 4 quarters Orders received (EUR million) in stable business1 500 1,750 443 402 394 409 400 371 88 1,400 330 342 344 95 81 88 293 87 300 267 273 273 75 80 1,050 242 78 200 700 321 355 293 307 313 284 267 273 242 273 252 267 264
Slide 8: Order backlog at EUR 2,613 million at the end of Q1/2017
Order backlog at EUR 2,613 million at the end of Q1/2017 Order backlog (EUR million) Structure of order backlog 3,000 2,500 2,613 2,406 ~25% 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 1,000 ~75% 500 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/1
Slide 9: Business lines’ development
Business lines’ development
Slide 10: Services: Orders received increased and net sales remained at the previous year’s level
Services: Orders received increased and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) 2015: 2016: 2015: 2016: EUR 1,119 million EUR 1,182 million EUR 1,128 million EUR 1,163 million 400 355 1,600 400 1,600 350 313 321 1,400 350 314 304 286 316
Slide 11: Automation: Orders received increased and net sales remained at the previous year’s level
Automation: Orders received increased and net sales remained at the previous year’s level Orders received1 (EUR million) Net sales1 (EUR million) 2015: 2016: 2015: 2016: EUR 310 million EUR 337 million EUR 308 million EUR 316 million 120 450 95 120 101 450 88 87 88 99 100 81 375 10 78 75 80 100 6 81
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) 2015: 2016: 2015: 2016: EUR 864 million EUR 939 million EUR 913 million EUR 826 million 700 622 1,400 350 312 1,400 600 560 1,200 300 1,200 262 229 234 245 500 1,000 250 222 231 215 1,000 1
Slide 13: Paper: Orders received increased and net sales remained at the previous year’s level
Paper: Orders received increased and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) 2015: 2016: 2015: 2016: EUR 673 million EUR 718 million EUR 659 million EUR 647 million 350 314 1,050 350 1,050 300 900 300 900 246 250 212 750 250 750 190 197 1
Slide 14: Financial development
Financial development Valmet <>
Slide 15: Key figures
Key figures EUR million Q1/2017 Q1/2016 Change 2016 Orders received 1,005 803 25% 3,139 Order backlog1 2,613 2,207 18% 2,283 Net sales 671 652 3% 2,926 Comparable EBITA 35 31 10% 196 % of net sales 5.1% 4.8% 6.7% EBITA 37 30 26% 183 Operating profit (EBIT) 30 19 55% 147 % of net sales 4.4% 2.9% 5.0%
Slide 16: Gross profit margin and SG&A development
Gross profit margin and SG&A development Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 200 23% 25% 200 25% 19% 160 20% 160 20% 120 15% 120 15% 80 10% 80 10% 40 5% 40 5% 0 0% 0 0% Q2/2016 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q3/
Slide 17: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %) 854 779 804 785 777 734 Target 8–10% 7.3% 685 652 7.1% 7.2% 6.9% 671 588 590 6.4% 6.1% 561 7.5% 519 5.1% 4.8% 445 375 5.5% 408 427 Capital business 3.7% 3.5% 400 334 409 338 411 360 Stable business 498 371 377 337
Slide 18: Cash flow provided by operating activities
Cash flow provided by operating activities Cash flow provided by operating activities (EUR million) 2014: 2015: 2016: EUR 236 million EUR 78 million EUR 246 million 140 120 117 122 100 80 88 94 60 64 40 43 46 20 30 33 17 16 3 0 -20 -20 -40 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2
Slide 19: 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 20% 1,101 1,023 1,005 781 793 803 788 857 500 725 692 10% 466 480 580 0 -181 0% -257 -249 -345 -353 -355 -265 -244 -238 -247 -265 -294 -428 -500 -10% -1,000 -20% Q1/
Slide 20: Net debt decreased compared with both Q1/2016 and Q4/2016
Net debt decreased compared with both Q1/2016 and Q4/2016 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 29% 28% 45% 42% 300 27% 30% 40%40%41% 24% 40% 38%37%37% 21% 36%35%36% 34%35%35% 200 238 229 231 15% 20% 35% 178 192 6% 30% 100 126 10% 52 -3% 25% 0 -39 0% 20% -54 -27 -100 -5%
Slide 21: 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 Target 1,122 15%–20% 985 14% 14% 14% 14% 967 13% 13% 902 877 12% 12% 10% 10% 2% 2% 1% Q1/14 Q2/14 Q3/14 Q4/14 Q1/15
Slide 22: Guidance and short-term market outlook
Guidance and and short-term market outlook
Slide 23: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2017 (net sales guidance revised upwards on April 12, 2017) Valmet estimates that net sales in 2017 will increase in comparison with Guidance for 2016 (EUR 2,926 million) and Comparable EBITA in 2017 will increase in 2017 comparison with 2016 (EUR
Slide 24: Summary of Interim Review Q1/2017
Summary of Interim Review Q1/2017
Slide 25: Q1/2017 in brief
Q1/2017 in brief Orders received increased to EUR 427 million in stable business1 Orders received increased to EUR 578 million in capital business2 Net sales remained at the previous year’s level at EUR 671 million Order backlog increased to EUR 2.6 billion Profitability improved – Comparable EBITA
Slide 26: Appendix
Appendix Valmet <>
Slide 27: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 277 million as at March 31, 2017 Amount of outstanding interest-bearing debt Main financing sources and facilities (EUR million) 300 Source Amount outstanding 250 Loans from banks and EUR 277 million financial institutions 200 150 EUR 200 m
Slide 28: Largest shareholders on March 31, 2017
Largest shareholders on March 31, 2017 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 5,065,465 3.38% 3 Elo Pension Company 3,810,000 2.5
Slide 29: Ownership structure on March 31, 2017
Ownership structure on March 31, 2017 13.5% 11.1% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations 49.5% Solidium Oy Finnish private investors 25.9% Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and non
Slide 30: Share of non-Finnish holders and number of shareholders
30 42% 44% 46% 48% 50% 52% 54% 56% 12/2013 April 25, 2017 01/2014 02/2014 03/2014 04/2014 05/2014 06/2014 07/2014 08/2014 shareholders 09/2014 10/2014 11/2014 12/2014 01/2015 02/2015 03/2015 Non-Finnish holders (LHS) 04/2015 © Valmet | Interim Review, January–March 2017 05/2015 06/2015 07/2015 08/20
Slide 31: Pulp and paper price trends
31 1,000 1,200 0 200 400 600 800 Source: Bloomberg 1-Dec-07 April 25, 2017 1-Mar-08 1-Jun-08 1-Sep-08 1-Dec-08 1-Mar-09 1-Jun-09 1-Sep-09 1-Dec-09 1-Mar-10 1-Jun-10 1-Sep-10 1-Dec-10 1-Mar-11 1-Jun-11 Northern bleached softwood pulp (USD/t) © Valmet | Interim Review, January–March 2017 1-Sep-11 1-De
Slide 32: Crude oil, steam coal, natural gas and electricity
Crude oil, steam coal, natural gas and electricity Europe 140 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 1-Jan-10 1-Sep-10 1-May-11 1-Jan-12 1-Sep-12 1-May-13 1-Jan-14 1-Sep-14 1-May-15 1-Jan-16 1-Sep-16 CIF ARA steam coal (USD/t) (LHS) Brent crude oil (USD/barrel) (LHS) Natural gas spot price
Slide 33: Crude oil, natural gas and electricity
Crude oil, natural gas and electricity United States 120 7 100 6 5 80 4 60 3 40 2 20 1 0 0 1-Jan-10 1-Sep-10 1-May-11 1-Jan-12 1-Sep-12 1-May-13 1-Jan-14 1-Sep-14 1-May-15 1-Jan-16 1-Sep-16 WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 200 100 150 90 100 80 50 70 0 60 1-Jan-10 1-S
Slide 34: European Carbon Emission Allowance
34 10 0 1 2 3 4 5 7 8 9 6 4-Jan-13 Source: Bloomberg 4-Mar-13 April 25, 2017 4-May-13 4-Jul-13 4-Sep-13 4-Nov-13 4-Jan-14 4-Mar-14 4-May-14 4-Jul-14 4-Sep-14 © Valmet | Interim Review, January–March 2017 4-Nov-14 4-Jan-15 4-Mar-15 4-May-15 4-Jul-15 4-Sep-15 4-Nov-15 European Energy Exchange (EEX) sp
Slide 35: 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 36: January–June 2017 Half Year Financial Review
January–June 2017 Half Year Financial Review July 27, 2017 www.valmet.com/investors
Slide 37: FORWARD
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