Slide 1: Long-term maintenance agreements
Long-term maintenance agreements Ari Telama, VP, Mill Improvements June 14, 2016
Slide 2: Content
Content 1 Key elements of Valmet maintenance agreement business 2 Pricing and revenue recognition 3 Market information
Slide 3: Valmet UK operations
Valmet UK operations The operations in the UK consists of the following units: – Darwen (approximately 60 employees) The field services, sales, power and Engineering operations The Yankee-tissue operations – Haslingden (approximately 40 employees) Darwen Roll workshop Partington – Partington
Slide 4: Key elements of Valmet maintenance agreement business
Key elements of Valmet maintenance agreement business
Slide 5: Benefits for our customers business
Benefits for our customers business Improved production Lower maintenance, efficiency and end- energy, process product quality, consumable costs more saleable tons Reduced Better life-cycle revenue costs Freed Smaller assets risks Less capital Improved safety tied to spare and predictability of part
Slide 6: Mill maintenance outsourcing
Mill maintenance outsourcing Co-operation concept Customer • No in-house maintenance personnel • Low and sustainable maintenance cost level • Production personnel perform contractually • Focus on process upkeep and efficiency agreed preventive maintenance tasks One contract Common targets Valmet Ful
Slide 7: Combining best practices
Combining best practices Flexible use of all maintenance methods Best practices are chosen according to the criticality analysis Performance management Predictive “Combined maintenance financial and Preventive technical maintenance “Change the measures define bulb based on the time to Corrective
Slide 8: Maintenance efficiency over time
Maintenance efficiency over time Performance management compared to traditional concept Maintenance Hours / ton Traditional maintenance concept • Higher costs • More corrective maintenance • Lower technical availability Valmet maintenance concept • Long-term cost optimization • Fewer failures and re
Slide 9: Different tailor-made agreement levels available
Different tailor-made agreement levels available Partnership Agreement Valmet site presence & Maintenance Outsourcing (asset management) Common development programs Performance Agreement Guaranteed savings & value creation thru continuous improvement Remote support Service Agreement Bonus/
Slide 10: Value of long-term agreements to Valmet
Value of long-term agreements to Valmet • Stable and predictable business volume • Additional sales to agreement customer sites • Low investment needs • Deepening of the customer relationship • Deeper understanding of customer maintenance drivers 10 June 14, 2016 © Valmet | Ari Telama, VP, Mill Impr
Slide 11: Pricing and revenue recognition
Pricing and revenue recognition
Slide 12: Revenue recognition in long-term agreements
Revenue recognition in long-term agreements General way of treating long-term agreements Contract period is typically depending on the scope anywhere between 1–6 years, MMO minimum 3 years Orders booked for the next 6–12 months and updated monthly Revenue is recognized monthly This is the gene
Slide 13: Market information
Market information Valmet >
Slide 14: Valmet maintenance outsourcing locations
Valmet maintenance outsourcing locations Kauttua (Nippon Paper) Niagara Falls (Greenpac) Partington (Saica) Plattling (UPM) Zaragoza (Saica) Sydney (Orora) Ortigueira (Klabin) Maryvale (Australian Paper) 14 June 14, 2016 © Valmet | Ari Telama, VP, Mill Improvements
Slide 15: Total market for outsourced maintenance market EUR ~500 million
Total market for outsourced maintenance market EUR ~500 million Valmet’s market share in line with total Services business market share Examples of top companies Competitive position • Global presence Global OEM • Strong credible brand competitors • Broad offering Global Maintenance • Global/regiona
Slide 16: Summary
Summary Value proposition to customer Value to Valmet Improved production Lower maintenance, • Stable business volume efficiency and end- energy, process product quality, consumable costs more saleable • Additional sales tons Reduced Better revenue life-cycle • Low investment needs costs • Customer
Slide 17: Important notice
Important notice It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for growth, profitability and investment willingness, expectations fo
Slide 18: Forward
FORWARD
Slide 19: Valmet Key Account Management
Valmet Key Account Management Committed to moving our customers’ performance forward Sanna Röyskö Sales Director, EMEA June 14, 2016
Slide 20: 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 Converting renewable processes
Slide 21: Key Must-Win objectives to achieve our strategic goals
Key Must-Win objectives to achieve our strategic goals Must-Wins Must-Win implementation objectives for 2016 • Strengthen our presence close to customers and growth markets Customer • Strengthen Key Account Management to serve customers with our full offering excellence • Provide customer benefits b
Slide 22: Technology leader with unique offering
Technology leader with unique offering Acquisition of Automation strengthened Valmet’s offering Cost-competitive, focused Complete pulp mill delivery Comprehensive offering for solutions in Paper capability energy customers • 10 OptiConcept M • State-of-the-art technology for • Solutions for machine
Slide 23: Global key account management structures in place
Global key account management structures in place • Selection based on Valmet installed base, Several global business potential and strategic key accounts importance Team nominated • Corporate account manager for all key • Executive Sponsor accounts • Mill Sales Managers for each mill Clear roles an
Slide 24: Key account management targets long-term business relationship
Key account management targets long-term business relationship • Long term business relationship Target ‘win-win’ One main contact • Corporate account manager and Executive Sponsor at HQ level person for all levels • Mill Sales Managers at mill level Understanding • Understanding customer’s strategy
Slide 25: Key account management with full offering to move customer's performance forward
Key account management with full offering to move customer’s performance forward • Introducing Valmet offering and Serving with full capabilities to serve with full scope Valmet offering Benchmarking • Benchmarking with different mills Supporting • Early contribution to new investment projects inves
Slide 26: Agility through Sales
Agility through Sales Leveraging Valmet’s competitive advantages on global and local level Unique offering to customer’s needs: process technology, automation and services Largest installed base Global resources, in P&P industry local presence Agility through sales Shared Journey Mill team and sales
Slide 27: Important notice
Important notice It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for growth, profitability and investment willingness, expectations fo
Slide 28: Forward
FORWARD