Slide 1: Orders received increased to EUR 1.1 billion and Comparable EBITA to EUR 69 million
Orders received increased to EUR 1.1 billion and Comparable EBITA to EUR 69 million Half Year Financial Review, January–June 2019 July 23, 2019 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Half Year Financial Review, January–June 2019 1 Q2/2019 in brief 2 Development of the business lines 3 Financial development 4 Guidance and short-term market outlook 5 Summary of Half Year Financial Review 2019 6 Appendix 2 July 23, 2019 © Valmet | Half Year Financial Review, January–June 201
Slide 3: Q2/2019 in brief
Q2/2019 in brief Valmet <>
Slide 4: Q2/2019 in brief
Q2/2019 in brief Orders received increased to EUR 474 million in stable business1 Orders received increased to EUR 629 million in capital business2 Net sales increased to EUR 901 million Order backlog increased to EUR 3.2 billion Comparable EBITA increased to EUR 69 million and margin was 7.7% Geari
Slide 5: Valmet in Q2/2019
Valmet in Q2/2019 Orders received by business line Orders received by area Orders received 6% EUR 1,083 million 6% 14% Net sales 34% EUR 901 million 39% Comparable EBITA EUR 69 million 29% Comparable EBITA margin 45% 7.7% 8% 19% Order backlog EUR 3,216 million Services North America Employees Automa
Slide 6: Orders received increased to EUR 1,083 million in Q2/2019
Orders received increased to EUR 1,083 million in Q2/2019 Orders received (EUR million) Orders received in Q1–Q2/2019 by area 1,600 4,000 Asia- North 1,400 3,500 Pacific America 14% 17% 1,200 3,000 1,000 2,500 China 8% 800 2,000 South 600 1,500 1,101 1,026 1,083 America 1,005 1,023 890 865 940 19% 4
Slide 7: Stable business orders received totaled EUR 1,751 million during last four quarters
Stable business orders received totaled EUR 1,751 million during last four quarters Orders received (EUR million) in stable business1 600 1,800 500 461 474 1,500 443 439 445 435 409 424 402 394 372 383 381 103 104 400 344 88 359 93 102 1,200 330 342 103 109 95 81 88 293 87 101 81 267 273 273 75 75 3
Slide 8: Order backlog at EUR 3,216 million at the end of Q2/2019
Order backlog at EUR 3,216 million at the end of Q2/2019 Order backlog (EUR million) Structure of order backlog 3,500 3,000 3,216 3,001 2,791 2,829 2,500 2,704 2,714 2,720 2,583 2,621 ~30% 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 1,500 ~70% 1,000 500 0 Stab
Slide 9: Development of the business lines
Development of the business lines
Slide 10: Services: Orders received and net sales increased
Services: Orders received and net sales increased Orders received (EUR million) Net sales (EUR million) Q1–Q2/2018: Q1–Q2/2019: Q1–Q2/2018: Q1–Q2/2019: EUR 690 million EUR 729 million EUR 572 million EUR 637 million 400 400 366 361 1,600 355 346344 358371 1,600 340 350 325 1,400 350 314 316 325 1,40
Slide 11: Automation: Orders received remained at the previous year's level and net sales increased
Automation1: Orders received remained at the previous year’s level and net sales increased Orders received2 (EUR million) Net sales2 (EUR million) Q1–Q2/2018: Q1–Q2/2019: Q1–Q2/2018: Q1–Q2/2019: EUR 195 million EUR 206 million EUR 159 million EUR 168 million 140 420 140 124 420 115 120 109 360 120 3
Slide 12: Pulp and Energy: Orders received increased and net sales remained at the previous year's level
Pulp and Energy: Orders received increased and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) Q1–Q2/2018: Q1–Q2/2019: Q1–Q2/2018: Q1–Q2/2019: EUR 278 million EUR 411 million EUR 408 million EUR 372 million 700 1,400 700 1,400 622 600 560 1,200 6
Slide 13: Paper: Orders received increased and net sales remained at the previous year's level
Paper: Orders received increased and net sales remained at the previous year’s level Orders received (EUR million) Net sales (EUR million) Q1–Q2/2018: Q1–Q2/2019: Q1–Q2/2018: Q1–Q2/2019: EUR 623 million EUR 601 million EUR 460 million EUR 432 million 450 419 1,200 450 1,200 400 353 1,050 400 1,050 3
Slide 14: Financial development
Financial development Valmet <>
Slide 15: Key figures
Key figures EUR million Q2/20191 Q2/2018 Change Q1–Q2/20191 Q1–Q2/2018 Change Orders received 1,083 865 25% 1,918 1,756 9% Order backlog2 3,216 2,621 23% 3,216 2,621 23% Net sales 901 844 7% 1,587 1,575 1% Comparable EBITA 69 61 14% 117 82 41% % of net sales 7.7% 7.2% 7.3% 5.2% EBITA 64 57 13% 113 7
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) 300 30% 300 30% 250 23% 25% 250 25% 200 20% 200 17% 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
Slide 17: Comparable EBITA margin development
Comparable EBITA margin development Net sales and Comparable EBITA, rolling 12 months (EUR million and %)1 3,257 3,308 3,325 3,279 3,337 3,058 3,145 8.6% 8.7% 3,019 3,044 2,995 Target 8–10% 2,851 2,928 2,926 2,919 2,846 2,876 7.7% 2,707 7.1% 2,500 2,473 2,515 6.8% 6.7% 6.8% 6.7% 6.7% 6.8% 2,374 2,36
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: 2018: Q1–Q2/2019: EUR 236 million EUR 78 million EUR 246 million EUR 291 million EUR 284 million EUR -14 million 200 150 143 100 117 122 119 88 94 89 50 78 64 43 46 30 17 16 3
Slide 19: Net working capital at -9% of rolling 12 months orders received
Net working capital at -9% of rolling 12 months orders received Net working capital and orders received (EUR million) 1,500 30% 1,000 1,101 1,023 20% 1,005 1,026 1,083 857 890 865 940 781 793 803 788 796 835 500 725 692 743 727 10% 580 466 480 0 0% -235 -249 -345 -317 -265 -244 -238 -194 -181 -265 -
Slide 20: Net debt and gearing increased compared with Q2/2018
Net debt and gearing increased compared with Q2/2018 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 300 30% 50% 21% 45% 42% 43% 43% 200 17% 20% 41% 41% 42% 41% 39% 39% 178 40% 36% 37% 37% 38% 100 6% 152 10% 35% 4% 0% 30% 0 52 -3% -3% 0% 31 25% -27 -30 -4 -100 -102 -98 20% -100 -10
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 1,237 1,184 1,194 1,167 1,195 1,195 1,138 1,141 1,137 1,150 22% 1,112 1,079 1,033 1,049 20% 985 23% 967 902 18% 877 17% Target 16% 16% 15–20
Slide 22: Guidance and short-term market outlook
Guidance and short-term market outlook
Slide 23: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2019 (confirmed on April 1, 2019 following the completion of the acquisition of GL&V) Valmet estimates that net sales in 2019 will increase in comparison with 2018 (EUR 3,325 million) and Guidance Comparable EBITA in 2019 will increase in compariso
Slide 24: Summary of Half Year Financial Review
Summary of Half Year Financial Review 2019
Slide 25: Q2/2019 in brief
Q2/2019 in brief Orders received increased to EUR 474 million in stable business1 Orders received increased to EUR 629 million in capital business2 Net sales increased to EUR 901 million Order backlog increased to EUR 3.2 billion Comparable EBITA increased to EUR 69 million and margin was 7.7% Geari
Slide 26: Appendix
Appendix Valmet <>
Slide 27: Structure of loans and borrowings
Structure of loans and borrowings Interest-bearing debt EUR 242 million as at June 30, 2019 Amount of outstanding interest-bearing debt Main financing sources and facilities (EUR million) Source Amount outstanding 300 Loans from banks and 250 EUR 242 million financial institutions 200 EUR 200 millio
Slide 28: Largest shareholders on June 30, 2019
Largest shareholders on June 30, 2019 Based on information given by Euroclear Finland Ltd # Shareholder name Number of shares % of shares and votes 1 Solidium Oy1 16,695,287 11.14% 2 Ilmarinen Mutual Pension Insurance Company 3,827,500 2.55% 3 Elo Pension Company 3,700,000 2.47% 4 Varma Mutual Pensi
Slide 29: Shareholder structure on June 30, 2019
Shareholder structure on June 30, 2019 0.0% 12.3% 11.1% 57.0% 19.5% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations Solidium Oy* Finnish private investors On issuer account Sector Number of shareholders % of total shareholders Number of shares % of shares 1
Slide 30: Share of non-Finnish holders and number of shareholders
Share of non-Finnish holders and number of shareholders 58% 64,000 56% 61,000 54% 58,000 52% 55,000 50% 52,000 48% 49,000 46% 46,000 44% 43,000 42% 40,000 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 0
Slide 31: Pulp and paper price trends
Pulp and paper price trends 1 300 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 Jan-19 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Northern bleached softwood
Slide 32: Crude oil, steam coal, natural gas and electricity
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 Jul-18 Jan-19 Jul-19 CIF ARA steam coal (USD/t) Brent crude oil (USD/barrel) Natural gas spot price NBP (GBP/therm) 100 80 60 40 20 0 -20 J
Slide 33: Crude oil, steam coal, natural gas and electricity
Crude oil, steam coal, natural gas and electricity United States 120 6 100 5 80 4 60 3 40 2 20 1 FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 250 85 200 80 150 75 100 70 50 0 65 Electricity spot price, PJM (USD/MWh) (LHS) Electricity spot
Slide 34: European Carbon Emission Allowance
34 0 5 10 15 20 25 30 Jan-13 Mar-13 July 23, 2019 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 © Valmet | Half Year Financial Review, January–June 2019 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Source: Bloomberg European Carbo
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: Interim Review January–September 2019
Interim Review January–September 2019 October 24, 2019 www.valmet.com/investors 36 July 23, 2019 © Valmet | Half Year Financial Review, January–June 2019
Slide 37: FORWARD
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