Slide 1: Orders received continued on a good level in Paper – Comparable EBITA was low
Orders received continued on a good level in Paper – Comparable EBITA was low Interim Review, January–March 2018 April 27, 2018 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Interim Review, January–March 2018 1 Q1/2018 in brief 2 Development of the business lines 3 Financial development 4 Guidance and short-term market outlook 5 Summary of Interim Review Q1/2018 6 Appendix 2 April 27, 2018 © Valmet | Interim Review, January–March 2018
Slide 3: Q1/2018 in brief
Q1/2018 in brief Valmet <>
Slide 4: Q1/2018 in brief
Q1/2018 in brief Orders received remained at the previous year’s level at EUR 439 million in stable business1 Orders received decreased to EUR 462 million in capital business2 Net sales increased to EUR 732 million Order backlog remained at the previous year’s level at EUR 2.6 billion Comparable EBI
Slide 5: Valmet in Q1/2018
Valmet in Q1/2018 Net sales by business line Net sales by area Orders received 11% EUR 890 million 17% 31% Net sales 34% EUR 732 million 19% 6% Comparable EBITA EUR 22 million Comparable EBITA margin 8% 3.0% 28% 48% Employees Services North America 12,310 Automation South America Pulp and Energy EME
Slide 6: Orders received decreased to EUR 890 million in Q1/2018
Orders received decreased to EUR 890 million in Q1/2018 Orders received (EUR million) Orders received in Q1/2018 by area 1,400 3,500 Asia-Pacific 12% 1,200 3,000 North America 1,000 2,500 China 30% 12% 800 2,000 600 1,500 1,101 1,023 1,005 857 890 400 781 725 793 803 788 796 743 727 1,000 692 580 So
Slide 7: Stable business orders received totaled EUR 1,605 million during the last 4 quarters
Stable business orders received totaled EUR 1,605 million during the last 4 quarters Orders received (EUR million) in stable business1 600 1,800 500 1,500 443 439 409 424 402 394 372 383 400 344 88 359 93 1,200 330 342 88 103 95 81 293 87 75 101 300 267 273 273 75 80 900 242 78 200 600 321 355 321 3
Slide 8: Order backlog at EUR 2,583 million at the end of Q1/2018
Order backlog at EUR 2,583 million at the end of Q1/2018 Order backlog (EUR million) Structure of order backlog 3,000 2,500 2,704 2,714 2,720 2,583 2,406 2,458 2,312 2,283 2,000 2,208 2,207 2,192 2,117 2,074 2,106 1,972 1,998 2,064 ~30% 1,500 1,000 ~70% 500 0 Stable business Capital business Q1/14 Q
Slide 9: Development of the business lines
Development of the business lines
Slide 10: Services: Orders received and net sales remained at the previous year's level
Services: Orders received and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) 2016: 2017: 2016: 2017: EUR 1,182 million EUR 1,242 million EUR 1,163 million EUR 1,178 million 400 1,600 400 1,600 355 346 340 350 313 321 321 1,400 350 314 316 1,400
Slide 11: Automation: Orders received increased and net sales remained at the previous year's level
Automation1: Orders received increased and net sales remained at the previous year’s level Orders received2 (EUR million) Net sales2 (EUR million) 2016: 2017: 2016: 2017: EUR 337 million EUR 368 million EUR 316 million EUR 335 million 120 103 450 120 115 450 101 101 99 95 93 11 100 88 87 88 12 375 1
Slide 12: Pulp and Energy: Orders received decreased and net sales increased
Pulp and Energy: Orders received decreased and net sales increased Orders received (EUR million) Net sales (EUR million) 2016: 2017: 2016: 2017: EUR 939 million EUR 678 million EUR 826 million EUR 800 million 700 1,400 700 1,400 622 600 560 1,200 600 1,200 500 1,000 500 1,000 400 800 400 800 312 275
Slide 13: Paper: Orders received decreased and net sales increased
Paper: Orders received decreased and net sales increased Orders received (EUR million) Net sales (EUR million) 2016: 2017: 2016: 2017: EUR 718 million EUR 1,035 million EUR 647 million EUR 784 million 400 1,200 400 1,200 350 314 1,050 350 1,050 304 300 275 270 900 300 900 246 243 250 212 750 250 223
Slide 14: Financial development
Financial development Valmet <>
Slide 15: Key figures
Key figures EUR million Q1/2018 Q1/2017 Change 2017 Orders received 890 1,005 -11% 3,272 Order backlog1 2,583 2,704 -4% 2,458 Net sales 732 645 13% 3,058 Comparable EBITA 22 34 -36% 218 % of net sales 3.0% 5.3% 7.1% EBITA 19 37 -49% 202 Operating profit (EBIT) 12 29 -60% 170 % of net sales 1.6% 4.5%
Slide 16: 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) 250 25% 250 25% 20% 200 20% 200 18% 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 Q2/2016 Q3/2016
Slide 17: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA (EUR million and %) 967 Target 8–10% 854 7.8% 804 7.5% 777 779 785 8.4% 734 732 715 732 6.1% 685 7.3% 652 7.1% 7.2% 645 588 590 6.9% 5.3% 561 6.4% 6.5% 519 4.8% Capital business 5.5% 523 3.7% 3.5% 445 375 Stable business 408 427 334
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: 2017: EUR 236 million EUR 78 million EUR 246 million EUR 291 million 140 120 117 122 100 80 88 94 89 60 78 64 40 43 46 20 30 33 31 17 16 3 19 0 -20 -20 -40 Q1/2014 Q2/2014 Q3/2014 Q4
Slide 19: Net working capital at -12% of rolling 12 months orders received
Net working capital at -12% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 1,101 20% 1,023 1,005 857 890 781 725 793 803 788 796 743 727 500 692 10% 580 466 480 0 0% -235 -249 -317 -265 -244 -238 -194 -181 -265 -294 -335 -345 -353 -378 -370
Slide 20: Net debt lower compared with both Q1/2017 and Q4/2017
Net debt lower compared with both Q1/2017 and Q4/2017 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 300 27% 30% 45% 24% 42% 41% 41% 42% 21% 38% 39% 39% 40% 37% 200 231 20% 36% 35% 36% 15% 35% 178 192 100 126 6% 10% 30% 4% 52 31 25% 0 -3% -3% 0% -27 -30 20% -100 -102 -100 -10% 15%
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 1,112 1,138 1,141 1,137 Target 16% 1,033 985 15–20% 967 902 14% 14% 14% 14% 14% 877 13% 13% 13% 16% 12% 12% 10% 10%
Slide 22: Guidance and short-term market outlook
Guidance and short-term market outlook
Slide 23: Guidance and short-term market outlook unchanged
Guidance and short-term market outlook unchanged Guidance for 2018 (as announced on March 21, 2018) Valmet estimates that net sales in 2018 will remain at the same level as in 2017 (EUR 3,058 million) and Guidance Comparable EBITA in 2018 will increase in comparison with 2017 (EUR 218 million). Shor
Slide 24: Summary of Interim Review Q1/2018
Summary of Interim Review Q1/2018
Slide 25: Q1/2018 in brief
Q1/2018 in brief Orders received remained at the previous year’s level at EUR 439 million in stable business1 Orders received decreased to EUR 462 million in capital business2 Net sales increased to EUR 732 million Order backlog remained at the previous year’s level at EUR 2.6 billion Comparable EBI
Slide 26: Appendix
Appendix Valmet <>
Slide 27: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 201 million as at March 31, 2018 Amount of outstanding interest-bearing debt (EUR million) Main financing sources and facilities 200 Source Amount outstanding Loans from banks and EUR 201 million 150 financial institutions 100 EUR 200 milli
Slide 28: Largest shareholders on March 31, 2018
Largest shareholders on March 31, 2018 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 Elo Pension Company 4,210,000 2.81% 3 Varma Mutual Pension Insurance Company 4,165,465 2.7
Slide 29: Shareholder structure on March 31, 2018
Shareholder structure on March 31, 2018 13.4% 11.1% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations 50.1% Solidium Oy Finnish private investors 25.4% Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and n
Slide 30: 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 12/2013 03/2014 06/2014 09/2014 12/2014 03/2015 06/2015 09/2015 12/2015 03/2016 06/2016 09/2016 12/2016 03/2017 06/2017 09/2017 12/2017 03/2018 Non-F
Slide 31: Pulp and paper price trends
Pulp and paper price trends 1,200 1,100 1,000 900 800 700 600 500 400 300 200 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 May-13 May-14 May-15 May-16 May-17 Jul-13 Jul-14 Jul-17 Jul-15 Jul-16 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Sep-15 Sep-16 Sep-13 Sep-14 Sep-17 Mar-16 Mar-17 Mar-13 Mar-14 Mar-15 Mar-1
Slide 32: 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 CIF ARA steam coal (USD/t) Brent crude oil (USD/barrel) Natural gas spot price NBP (GBP/therm) 100 80 60 40 20 0 Jan-13 Jul-13 Jan-14 Jul-1
Slide 33: 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 0 0 FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 250 90 200 85 150 80 100 75 50 70 0 65 Electricity spot price, PJM (USD/MWh) (LHS) Electrici
Slide 34: European Carbon Emission Allowance
34 10 12 14 16 6 0 2 4 8 Jan-13 Mar-13 April 27, 2018 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 © Valmet | Interim Review, January–March 2018 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 European Carbon Emission Allowance Jul-16 Sep-16 European Energy Ex
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: Save the date
January–June 2018 Interim Review July 25, 2018 www.valmet.com/investors Save the date Valmet’s Capital Markets Day September 18, 2018 Helsinki, Finland 36 April 27, 2018 © Valmet | Interim Review, January–March 2018
Slide 37: FORWARD
FORWARD