Valmet Corp · OMXHEX:VALMT
Valmet — Merger or Acquisition (September 2020)
24 slides from Valmet's merger presentation, Sep 29, 2020
Slide 1: Valmet's proposal to start discussions on a statutory merger between Valmet and Neles
Valmet’s proposal to start discussions on a statutory merger between Valmet and Neles Pasi Laine, President and CEO, Valmet Kari Saarinen, CFO, Valmet
Slide 2: Valmet has approached the Board of Directors of Neles with a merger proposal
Valmet has approached the Board of Directors of Neles with a proposal to start discussions on a potential statutory merger between Valmet and Neles Valmet announced 14.88 percent share acquisition of Neles’ shares from Solidium Oy on June 17, 2020 and has gradually increased its ownership further
Slide 3: Contents
Contents 1 Valmet’s strategy and development 2 Valmet today 3 Neles today and its strategy Valmet and Neles together - a winning combination creating 4 future success 3 29 September, 2020 © Valmet
Slide 4: Valmet's way forward
Valmet’s way forward Our Vision Our Must-Wins To become the global champion Customer excellence in serving our customers Our Strategy Leader in technology and Valmet develops and supplies innovation competitive process technology, Excellence in processes services and automation to the pulp, pa
Slide 5: Valmet's financial targets
Valmet’s financial targets Growth • Net sales for stable business to grow over two times the market growth • Net sales for capital business to exceed market growth Profitability • Comparable EBITA: 10–12% ROCE • Comparable return on capital employed (ROCE) before taxes1: >20% Dividend policy • Divid
Slide 6: Valmet's development since 2013
Valmet’s development since 2013 Orders received Comparable EBITA Comparable EBITA margin 10-12% (EUR billion) (EUR million) (%) Comparable EBITA target 4.5 350 10% 4.0 9% 300 3.5 8% 250 7% 328% 3.0 Total Shareholder 6% Return since 2.5 200 demerger 5% 2.0 150 4% 1.5 100 3% 1.0 2% 50 24% 0.5 1% Annua
Slide 7: Valmet's acquisition strategy
Valmet’s acquisition strategy Well considered acquisitions with clear industrial logic Several successful acquisitions • Focus on organic growth Process Automation Systems 2015 • Selective acquisitions done to support growth MC machinery 2015 Enertechnix 2018 GL&V 2019 J&L Fiber Services 2
Slide 8: Contents
Contents 1 Valmet’s strategy and development 2 Valmet today 3 Neles today and its strategy Valmet and Neles together - a winning combination creating 4 future success 8 29 September, 2020 © Valmet
Slide 9: Valmet today
Valmet today A leading provider of process technologies, services and automation to pulp, paper and energy industries Paper Pulp and Services Automation Energy Market position Market position Market position Market position #1 #1–3 #1–2 #1–2 Pulp and paper Energy and Market share Market share Market
Slide 10: Valmet's key figures in 2019
Valmet’s key figures in 2019 Orders received EUR 3,986 million Orders received by business line Orders received by area 12% Net sales 22% EUR 3,547 million 26% 7% 37% Comparable EBITA EUR 316 million Comparable EBITA margin 17% 8.9% 9% 42% 28% Gearing -23% (on June 2020) Net debt (on June 2020) Serv
Slide 11: Contents
Contents 1 Valmet’s strategy and development 2 Valmet today 3 Neles today and its strategy Valmet and Neles together - a winning combination creating 4 future success 11 29 September, 2020 © Valmet
Slide 12: Neles today
Neles today A strong niche player with especially solid position in certain segments of the valves market Diversified valves offering Good market position Balanced global presence Focus on safety and reliability Flow control equipment and • Pulp and paper #1 2,900 employees Valves have a cruci
Slide 13: Neles' key figures
Neles’ key figures Orders received EUR 681 million Net sales by customer industry Net sales by area Net sales 16% EUR 660 million 24% 37% 36% Comparable EBITA EUR 97 million 26% Comparable EBITA margin 14.6% 21% 40% Employees O&G, industrial gas Petrochem & chemical ~2,900 Pulp and Paper Other EMEA
Slide 14: Neles has a good track record for growth and potential to grow further
Neles has a good track record for growth and potential to grow further Net sales, EUR million Neles’ strategic actions to grow organically Growth 700 7.8% 660 and through acquisitions: CAGR 600 593 • Gain market share by expanding in selected 528 522 markets and broadening product offering 500 • Acc
Slide 15: Contents
Contents 1 Valmet’s strategy and development 2 Valmet today 3 Neles today and its strategy Valmet and Neles together - a winning combination creating 4 future success 15 29 September, 2020 © Valmet
Slide 16: Valmet and Neles together
Valmet and Neles together A Nordic based global leader with a unique offering for process industries Services Process technologies Automation Paper Pulp and Automation Valves Energy systems Market Market position Market position Market position Market position Leadership position #1–3 #1–2 #1–2 posi
Slide 17: A unique and competitive offering
A unique and competitive offering Paper Pulp and Energy • Board, tissue and paper machines • Pulp mills • Modernizations and grade • Multifuel boilers conversions • Environmental systems Process technology Services Customer • Spare and process parts Automation • Production consumables • Automation s
Slide 18: Stronger margin profile and globally balanced operations
Stronger margin profile and globally balanced operations Services ~32%, automation ~24% and process technologies ~44% of net sales (illustrative, based on 2019 figures) Orders received Net sales by segment Net sales by area EUR 4,667 million 32% 22% Net sales Services Paper APAC 24% EUR 4,207 millio
Slide 19: Increased share of high-margin and growing stable business
Increased share of high-margin and growing stable business Stable business includes services, automation systems and valves Valmet’s stable business orders received +7.9% Combined stable business orders received2 1,818 1,558 1,645 1,481 1,341 +37% 2.5 2015 2016 2017 2018 2019 1.8 Services and Automa
Slide 20: Leading in automation
Leading in automation A platform for further growth in automation business Automation Automation Valves products and systems software • Leading market • Leading position in • Platform for further position in valves Pulp and Paper growth through and valve automation automation acquisitions in the pro
Slide 21: Tangible revenue, technology development and cost synergy potential
Tangible revenue, technology development and cost synergy potential Easy and low-risk integration Combination would provide multiple benefits for both companies • Improved package sales to pulp & paper customers Sales and • Cross-sales to energy and process industry customers offering • More compreh
Slide 22: Value to all shareholders
Value to all shareholders Large overlapping shareholder base1 between Valmet and Neles The potential merger would create Not overlapping value to all shareholders through shareholders 21% Retail 29% (including Cevian) – Enhanced strategic positioning A large share of stable, recurring and profitab
Slide 23: Summary
Summary A statutory merger between Valmet and Neles would create a solid and strong, Nordic based global leader We believe that a merger provides the best potential for long-term value creation for shareholders 23 29 September, 2020 © Valmet
Slide 24: FORWARD
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