Valmet Corp · OMXHEX:VALMT
Valmet — Finnish Capital Goods Companies: Services Operations (Danske Bank seminar, Helsinki) (August 2015)
31 slides from Valmet's conference presentation, Aug 26, 2015
Slide 1: Valmet – unique offering with process technology, automation and services
Valmet – unique offering with process technology, automation and services Finnish Capital Goods Companies: Services Operations August 26, 2015 Pasi Laine President and CEO
Slide 2: Agenda
Agenda Finnish Capital Goods Companies: Services Operations 1 Valmet overview 2 Investment highlights 3 Services business line 4 Automation business line 5 Conclusions
Slide 3: Valmet overview
Valmet overview Valmet <>
Slide 4: Key figures 2014
Key figures 2014 Excluding Automation business line Net sales split by Net sales split by business line geographic area Orders received EUR 3,071 million 15% 18% Net Sales 21% 40% EUR 2,473 million EBITA before NRI1 11% EUR 106 million 13% Employees 10,464 39% Market position 43% #1-2 Services North
Slide 5: Our four business lines serve the same customer base
Our four business lines serve the same customer base Services Automation Pulp and Energy Paper Net sales1 1.0 bn Net sales2 0.3 bn Net sales1 1.0 bn Net sales1 0.5 bn • Mill and plant Process automation Technologies and Technologies and improvements solutions for solutions for solutions for • Roll a
Slide 6: Strong global presence provides a good platform for growth
Strong global presence provides a good platform for growth North America EMEA China • Large installed base to be served • Large installed base to be served • Services growth potential through • Capital project • Machine closures in growing installed base opportunities in pulp, printing and writing •
Slide 7: Investment highlights
Investment highlights Valmet <>
Slide 8: Investment highlight summary
Investment highlight summary 1 Strong market position in growing markets Growing, profitable and stable service and 2 automation business with EUR 1.3 billion sales Strong in cyclical capital business with long-term growth 3 potential and increased flexibility in cost structure Unique offering with
Slide 9: Strong market position in growing markets
1 2 3 4 5 Strong market position in growing markets Services Pulp Energy Board Tissue Paper Automation #1-2 #1-2 #1-3 #1-2 #1 #1-2 #1-3 ~2% 7.5 ~1% 1.4 ~1% 2.0 ~3% 1.0 ~3% 0.6 ~-1% 0.6 ~1% 2.0 p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn p.a. bn • Customers • Growth in • Growth in • World trade,
Slide 10: Growing, profitable and stable service and automation business with EUR 1.3 billion sales
1 2 3 4 5 Growing, profitable and stable service and automation business with EUR 1.3 billion sales Growing Services net sales growth on average over 3% p.a. during the last 5 years Slight growth in Automation net sales over the last 10 years Profitable Relatively stable margins in Automation
Slide 11: Strong in cyclical capital business with long-term growth potential and increased flexibility in cost structure
1 2 3 4 5 Strong in cyclical capital business with long-term growth potential and increased flexibility in cost structure Pulp and Energy Paper Market position: Market position: #1-3 #1-2 Headcount reduction1: Headcount reduction1: ~500 ~800 Capacity cost reduction: Capacity cost reduction: 10% 20%
Slide 12: Unique offering with process technology, automation and services
1 2 3 4 5 Unique offering with process technology, automation and services Process technology • Valmet is a technology and service company with full automation offering • Strengthened competitiveness from combination of paper, pulp and power plant technology, process know-how and automation Customer
Slide 13: Continued focus on profitability, more effort into renewal
1 2 3 4 5 Continued focus on profitability, more effort into renewal Continued focus on • Improve project and service margin profitability • Reduce quality costs and lead times improvement • Savings in procurement measures • Continue to improve cost competitiveness • Improve cost competitiveness to
Slide 14: Services business line
Services business line Valmet <>
Slide 15: Services business line in brief
Services business line in brief Net sales (2014) Sustainable services for energy production, fiber processing, paper, 11% 12% board and tissue production lines 19% 7% 28% Committed to sustainability, customers’ profitability, optimized 15% production and maintenance, long- term partnership 7% 2014 f
Slide 16: Services offering
Services offering Comprehensive life-cycle services offering PressRhino composite roll cover for press rolls Greenpac board mill Valmet’s eServices online application Filter fabrics Evaporation plant in Metsä Board’s mill in Kaskinen Rolls and Mill Performance Fabrics Energy and Workshop Improvement
Slide 17: Services market position
Services market position Target market size is approximately EUR 7.5 billion Valmet’s market share Market position1 Valmet ~EUR 1 bn • Competitors vary from global companies #1-2 to local niche suppliers • Broadest and competitive offering with strong process and machinery know-how close to the cust
Slide 18: Growth possibilities
Growth possibilities Services Growth • Agreement based business possibilities • Continuous flow of new products and solutions • New concepts to integrate Valmet with its customers’ operations • Key account management • Existing local network for Energy and Environmental Services • Presence in growth
Slide 19: Growth in orders received and net sales in Services
Growth in orders received and net sales in Services Orders received (EUR million) Net sales (EUR million) Q1–Q2/2014: Q1–Q2/2015: Q1–Q2/2014: Q1–Q2/2015: EUR 540 million EUR 600 million EUR 475 million EUR 546 million 350 307 1,400 350 304 1,400 293 278 300 267 273 273 1,200 300 1,200 242 251 235 24
Slide 20: Automation business line
Automation business line Valmet <>
Slide 21: Automation in brief
Automation in brief Supplies and develops automation and information management systems, applications and services Net sales (2014) Global market leader with #1 market position in pulp and 9% paper 19% 9% Industry-leading product portfolio Comprehensive services High barriers to entry and a limited
Slide 22: Automation offering
Automation offering Distributed Quality Management Analyzers and Control System measurements System (DCS) • QCS (Quality Control • Paper analyzers • DCS for process and machines Systems) • Pulp analyzers controls • Profilers • Pulp consistency • Condition monitoring • Web inspection and web measurem
Slide 23: Automation market position
Automation market position Target market size is approximately EUR 2 billion Valmet’s market share Market position1 Valmet • Global market leader with #1 market ~EUR 0.3 bn #1-3 position in pulp and paper • Industry-leading product portfolio • Comprehensive services Others #1 Analyzers • High barrie
Slide 24: Growth possibilities
Growth possibilities Automation Pulp and Paper Power and Process Market • World trade, e-commerce and emerging • Urbanization and growing middle class drivers markets growth especially in emerging markets • Rise in purchasing power and living • Growing share of renewable energy standards generation
Slide 25: Strong start for Automation as part of Valmet
Strong start for Automation as part of Valmet Orders received1, 2 (EUR million) Net sales2 (EUR million) 160 160 140 140 120 95 120 100 84 100 79 10 74 80 62 80 55 11 60 60 40 85 40 68 20 20 0 0 Average quarter Q1/15 Q2/15 Average quarter Q1/15 Q2/15 in 2014 in 2014 Orders received, internal (from o
Slide 26: Conclusion
Conclusion Valmet <>
Slide 27: Investment highlight summary
Investment highlight summary 1 Strong market position in growing markets Growing, profitable and stable service and 2 automation business with EUR 1.3 billion sales Strong in cyclical capital business with long-term growth 3 potential and increased flexibility in cost structure Unique offering with
Slide 28: Appendix
Appendix Valmet <>
Slide 29: Key figures Q2/2015
Key figures Q2/2015 EUR million Q2/2015 Q2/2014 Change Q1–Q2/2015 Q1–Q2/2014 Change Orders received 781 1,023 -24% 1,360 2,124 -36% Order backlog1 2,208 2,406 -8% 2,208 2,406 -8% Net sales 779 588 33% 1,340 1,107 21% EBITA2 54 22 >100% 73 26 >100% % of net sales 6.9% 3.7% 5.5% 2.3% EBIT3 32 16 96% 4
Slide 30: 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 31: FORWARD
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