Valmet Corp · OMXHEX:VALMT
Valmet — Investor Day (November 2013)
22 slides from Valmet's investor day presentation, Nov 26, 2013
Slide 1: Financial update
Financial update Markku Honkasalo, CFO November 26, 2013
Slide 2: Agenda
Agenda Capital Markets Day 2013 1 Financial targets 2 Growth 3 Profitability 4 ROCE 5 Balance sheet and cash flow 6 Summary
Slide 3: Financial targets
Financial targets Valmet <>
Slide 4: 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 5: Growth
Growth Valmet <>
Slide 6: Global growth drivers
Global growth drivers Services opportunities Capital project opportunities North America Increased outsourcing Tissue and board South America Services growth potential Pulp, tissue, and bioenergy EMEA Increased outsourcing Pulp, tissue, and bioenergy Asia-Pacific Services growth potential Pulp, tiss
Slide 7: Growth drivers by business line
Growth drivers by business line • Customers are outsourcing non-core operations Services • Capacity increases in China, South America, and Asia-Pacific • Customer cost pressure and efficiency requirements are increasing demand for process improvements and maintenance services Pulp and • Growth in pa
Slide 8: Profitability
Profitability Valmet <>
Slide 9: Net sales and profitability development, annual
Net sales and profitability development, annual Net sales and EBITA before NRI (EUR million)1 2,925 3,014 2,735 2,703 2,453 EBITA 2,092 2,061 7.6% target 6-9% 7.1% 1,946 6.3% 6.5% 6.4% 5.5% 5.6% 5.3 % Services 4.1% Capital 834 847 877 974 1,011 809 636 715 EBITA-% 2006 2007 2008 2009 2010 2011 2012
Slide 10: Profitability improvement program
Profitability improvement program EUR 100 million savings program Impact of announced actions (EUR million) Announced in April, 2013 Capacity being adjusted Total 100 SG&A expense base is being reduced 25 100 Status of the program Two major negotiation processes completed – Total cost reduct
Slide 11: Profitability improvement actions
Profitability improvement actions Actions to reach target margin EBITA margin before NRI1 EUR 100 million savings program Efficiency improvement actions aimed at reaching historical gross margin levels 6-9% – Development of modularized and standardized solutions 6.4% – Procurement savings – Incr
Slide 12: ROCE
ROCE Valmet <>
Slide 13: Return on capital employed
Return on capital employed Return on capital employed (ROCE), before taxes and without NRI Financial target: 20% ROCE minimum of 15% 15% 10% 5% 0% 2010 2011 2012 Q3/2013 Carve-out ROCE (before taxes without NRI) Target 13 November 26, 2013 Markku Honkasalo, CMD 2013
Slide 14: Managing working capital to improve ROCE
Managing working capital to improve ROCE Components of capital employed • Not much can be affected in the short term Trade 1) Fixed CONTROL capital receivables • Amount owed by customers 2) Working • Can be affected in the short term Trade payables INCREASE capital • Amount owed to suppliers Invento
Slide 15: Balance sheet and cash flow
Balance sheet and cash flow Valmet <>
Slide 16: Strong balance sheet to support large orders
Strong balance sheet to support large orders Pro forma financial position as of September 30, 2013 (EUR million) 156 63 201 2,427 2,271 144 2 4 824 Long-term Short-term Cash and Other Net debt debt debt equivalents financial Total equity Balance sheet Advances Adj. balance assets total received shee
Slide 17: Strong underlying cash flow generation from operations
Strong underlying cash flow generation from operations Capex and Depreciation (EUR million)1 EBITDA (before NRI) less Capex (EUR million)1 186 188 140 77 77 64 -58 -58 -60 2010 2011 2012 2010 2011 2012 Capex 2 Depreciation EBITDA (bef ore NRI) – Capex 2 • Relatively low need for capex • Long-term av
Slide 18: Long-term liquidity in place
Long-term liquidity in place New financing facilities Other borrowings EUR 200 million syndicated EUR 139 million EIB loan revolving credit facility • Amount outstanding of Maturity: 5 years from the demerger two EIB loans: date – EUR 135 million loan entered into in May 2004, and International
Slide 19: Valmet's reporting policy
Valmet’s reporting policy Valmet will be one Reported numbers Comparable reporting segment as for business lines numbers will be of January 1, 2014 and areas prepared for 2012, 2011, and 2010 One set of Orders received Comparison consolidated Net sales figures on carve- numbers out basis 19
Slide 20: Summary
Summary Valmet <>
Slide 21: Summary – Key messages
Summary – Key messages Focus on profitability EBITA and ROCE Further improvement and targets are improvement efficiency ambitious but needed in working improvement actions reachable capital management 21 November 26, 2013 Markku Honkasalo, CMD 2013
Slide 22: Forward
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