Slide 1: Valmet – unique offering with process technology, automation and services
Valmet – unique offering with process technology, automation and services Investor Lunch March 17, 2016 Kari Saarinen, CFO
Slide 2: Agenda
Agenda Investor lunch 1 Valmet’s 2015 in brief 2 Investment highlights 3 Area development 4 Conclusions 2 March 17, 2016 © Valmet | Kari Saarinen, CFO
Slide 3: Valmet’s 2015 in brief
Valmet’s 2015 in brief Valmet <>
Slide 4: Valmet’s development
Valmet’s development Net sales, EBITA (before non-recurring Net sales by Net sales by area items), EBITA margin (EUR million and %) business line (2015) (2015) 2,928 13% 23% 21% 2,613 2,473 6.2% 39% 10% 4.3% 11% 2.1% 31% 8% 45% 54 106 182 Services North America Automation South America 2013 2014 201
Slide 5: Valmet’s development
Valmet’s development Orders received Net sales EBITA EBITA margin (EUR million)1 (EUR million)1 (before non-recurring (before non-recurring items, EUR million)1 items, %)1 3,500 3,500 200 9% 3,071 2,928 180 8% 3,000 2,878 3,000 EBITA (bef. NRI) 2,613 160 7% target 6–9% 2,473 2,500 2,500 140 2,182 6%
Slide 6: Setting the stage for future growth
Setting the stage for future growth Employees in stable business has increased Number of employees and percent of Valmet total 8,000 80% 7,000 70% 6,000 1,637 60% 5,000 50% 4,000 40% 3,000 30% 4,904 5,295 5,230 5,363 2,000 20% 1,000 10% 0 0% 2012 2013 2014 2015 Services Automation Stable business em
Slide 7: Orders received EUR 2.9 billion in 2015, stable business orders received EUR 1.3 billion
Orders received EUR 2.9 billion in 2015, stable business orders received EUR 1.3 billion Orders received (EUR million), Orders received in 2015 (EUR million), split by stable and capital business by area 1,400 3,500 Asia-Pacific 9% North 1,200 1,101 3,000 America 1,023 25% China 1,000 2,500 781 793
Slide 8: EBITA margin in the targeted range
EBITA margin in the targeted range Net sales and EBITA before NRI (EUR million) 854 777 779 734 EBITA (bef. NRI) 6.1% target 6–9% 7.3% 588 590 6.9% 561 6.4% 519 3.7% 5.5% 3.5% 445 408 Capital business 295 400 498 409 0.7% 337 319 371 Stable business 354 334 278 251 235 242 EBITA % 224 (before NRI) Q
Slide 9: Results in ‘Excellence in processes’
Results in ‘Excellence in processes’ Procurement Results in 2015 Target to save 2015 target exceeded 10% in procurement by Procurement activity has increased in all main cost- the end of 2016 competitive areas: China, India, Eastern Europe and 2014 2015 2016 Mexico (baseline 2013) Savings target
Slide 10: Results in ‘Customer excellence’
Results in ‘Customer excellence’ Services sales from long-term agreements (indexed) 131 135 120 100 Results in 2015 Sales from long- Sales from long-term agreements increased 3 percent in term agreements 2015 have increased by 35% in 3 2012 2013 2014 2015 years North America South America EMEA Chi
Slide 11: Sustainability
Sustainability Achievements • Systematic execution of Valmet’s sustainability agenda with five focus areas in 2015 • Year’s focus in Sustainable supply chain program to ensure compliance, reduce negative impacts and support key suppliers towards more sustainable business operations - 100% of global
Slide 12: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2016 Valmet estimates that net sales in 2016 will remain at the same level with Guidance for 2015 (EUR 2,928 million) and EBITA before non-recurring items in 2016 2016 will increase in comparison with 2015 (EUR 182 million). Short-term market outlo
Slide 13: Investment highlights
Investment highlights Valmet <>
Slide 14: Investment highlight summary
Investment highlight summary 1 Strong market position in growing markets Stable business, with EUR 1.4 billion of net sales, 2 offering stability, growth and profitability Strong market position in capital business, with cost 3 structure to meet business requirements 4 Technology leader with unique
Slide 15: Strong market position in growing markets
1 2 3 4 5 Strong market position in growing markets Services Automation Pulp Energy Board Tissue Paper #1-2 #1-3 #1-2 #1-3 #1 #1 #1 ~2% 7.5 ~1% 2.0 ~1% 1.4 ~1% 2.0 ~3% 1.0 ~3% 0.6 ~-1% 0.6 p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn • Customers • Investments in • Growth in • Growth in •
Slide 16: Stable business, with EUR 1.4 billion of net sales, offering stability, growth and profitability
1 2 3 4 5 Stable business, with EUR 1.4 billion of net sales, offering stability, growth and profitability Services Automation Orders received1 (EUR million) Orders received2 (illustrative, EUR million) 1,035 1,055 1,119 ~0% CAGR3 ~3% 309 296 309 CAGR3 2013 2014 2015 2013 2014 2015 Target to conti
Slide 17: Strong market position in capital business, with cost structure to meet business requirements
1 2 3 4 5 Strong market position in capital business, with cost structure to meet business requirements Market position Market position #1 #1-3 Paper Pulp and Energy Orders received1 Net sales1 Orders received1 Net sales1 (EUR million) (EUR million) (EUR million) (EUR million) 1,344 907 956 913 864
Slide 18: Technology leader with unique offering
1 2 3 4 5 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 f
Slide 19: Systematically developing the company and profitability with Must-Wins
1 2 3 4 5 Systematically developing the company and profitability with Must-Wins 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 • P
Slide 20: Today, customers are extensively utilizing our Industrial Internet capabilities
Today, customers are extensively utilizing our Industrial Internet capabilities Valmet’s competence network Customer’s Valmet’s process remote center 350 Ongoing 740 70,000 320 440 80 Valmet-supplied 350 Condition Advanced Online Performance Co-creation of lines with Valmet Monitoring (CM) process c
Slide 21: Enhancing mobility and introducing even more advanced technologies
Enhancing mobility and introducing even more advanced technologies Today 2016–2018 We serve our customers with intelligent We enhance mobility and introduce even technology, automation and services locally more advanced automation technologies and and remotely embedded diagnostics Fully automated,
Slide 22: Area development
Area development Valmet <>
Slide 23: North America
North America Mature services focused market with recurring opportunities in paper, tissue and automation Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015) line (2015) 71
Slide 24: South America
South America Cyclical capital business relies on new pulp projects. Services, board and tissue provide growth opportunities Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2
Slide 25: EMEA
EMEA Valmet’s largest and most important area with significant services and technology markets in all Valmet’s businesses Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015
Slide 26: China
China Capital business at new normal level, growth opportunities in Services Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015) line (2015) 428 2,061 392 1,927 1,955 24% 3
Slide 27: Asia-Pacific
Asia-Pacific Developing services market with growth potential Orders received Net sales Employees Orders received by Net sales by business (EUR million and % of total) (EUR million and % of total) (number and % of total) business line (2015) line (2015) 586 706 625 588 21% 378 31% 32% 372 282 48% 24
Slide 28: Conclusions
Conclusions Valmet <>
Slide 29: Conclusion
Conclusion Strong market position in growing markets Stable business, with EUR 1.4 billion of net sales, offering stability, growth and profitability Strong market position in capital business, with cost structure to meet business requirements Technology leader with unique offering Systema
Slide 30: 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
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