Valmet - unique offering with process technology, automation and services - Roadshow presentation
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Valmet – unique offering with process technology, automation and services Roadshow presentation June 2021
Agenda
Valmet roadshow presentation
1 Valmet in brief
2 Investment highlights
3 Financials
4 Conclusion
2 June 2021 © Valmet | Roadshow presentation
Valmet in brief
We have strong market shares, unique offering and over 220 years
of history
Paper Pulp and Automation Services
Energy
Market position Market position Market position Market position
#1 #1–3 #1–3 #1–2
Market share Market share Market share Market share
~50% ~20–45% ~25% ~17–18%
Valmet’s road to becoming a global market leader
1797 onwards 1951 1968–1996 1999 Key acquisitions End of 2013 Acquisitions
Tamfelt, Beloit, KMW, Valmet Several M&As, e.g. Metso created Beloit Technology (2000), Demerger to create Automation (2015)
Sunds Defibrator KMW (1986), through the merger of Kvaerner Pulping & Valmet and Metso GL&V (2019)
Wärtsilä paper finishing machinery (1987), Valmet and Rauma Kvaerner Power (2006), J&L (2019)
Tampella Papertech (1992) Tamfelt (2009) PMP (2020)
4 June 2021 © Valmet | Roadshow presentation
Valmet’s development since 2013
Orders received Net sales Comparable EBITA Comparable EBITA margin
(EUR billion) (EUR billion) (EUR million) (%)
4.5 4.5 450 11%
4.0 400 10%
4.0
9%
3.5 3.5 350
8%
3.0 3.0 300
7%
2.5 2.5 250 6%
2.0 2.0 200 5%
1.5 4%
1.5 150
3%
1.0 1.0 100
2%
0.5 0.5 50 1%
0.0 0.0 0 0%
2013 2014 2015 2016 2017 2018 2019 2020 LTM 2013 2014 2015 2016 2017 2018 2019 2020 LTM 2013 2014 2015 2016 2017 2018 2019 2020 LTM 2013 2014 2015 2016 2017 2018 2019 2020 LTM
Business lines Business lines
Services and Automation Services and Automation Comparable Comparable
Pulp, Energy and Paper Pulp, Energy and Paper EBITA EBITA margin
5 June 2021 © Valmet | Roadshow presentation 2013 figures on carve-out basis
Key figures 2020
Net sales by business line Net sales by area
Orders received
EUR 3,653 million 12%
18%
29%
Net sales
35% 13%
EUR 3,740 million
Comparable EBITA 16%
EUR 365 million
Comparable EBITA margin
9.8% 9%
27% 41%
Order backlog
EUR 3,257 million
Services North America
Employees Automation South America
14,046 Pulp and Energy EMEA
Paper China
Asia-Pacific
6 June 2021 © Valmet | Roadshow presentation
Strong, global presence is a good platform for growth
EMEA
~100 98
9,187 employees service centers sales offices
China
1,878 employees
North America
1,523 employees
43 16
production units R&D centers
Asia-Pacific
893 employees 8
South America Performance Centers
545 employees
Personnel as at March 31, 2021
7 June 2021 © Valmet | Roadshow presentation
Process technology, services and automation
Valmet’s unique offering differentiates the company from its competitors
Process
technology
Customer
Services Automation
8 June 2021 © Valmet | Roadshow presentation
Significant, customer focused research and development work
R&D focus areas
• Advanced and competitive technologies and services
• Raw material, water and energy efficiency
• Promotion of renewable materials
16 EUR 75 million ~1,300
research and R&D spending protected
development in 2020 inventions
centers
9 June 2021 © Valmet | Roadshow presentation
Acknowledged leader in sustainability
360° approach to sustainability
Good sustainability ratings
In Dow Jones Sustainability
Corporate Sustainable
Index for the seventh citizenship supply chain
consecutive year We are a trusted We develop sustainable
partner and respected supply chain practices
Achieved A- rating in CDP’s corporate citizen
climate program and reached
the leadership level for the
fifth consecutive year
AAA rating in the MSCI ESG Sustainable
solutions
360° Health, safety
and environment
Ratings assessment 2020
We develop and provide We protect the safety
of our people and
Bronze Class 2021 solutions that support
sustainability partners and minimize
Sustainability Award our environmental
impact
In Ethibel Sustainability Index People and
performance
Excellence Europe
We are a responsible
employer and promote
diversity
10 June 2021 © Valmet | Roadshow presentationValmet´s Climate Program: Forward to a carbon neutral future
Targets by 2030 for the entire value chain
SUPPLY CHAIN OWN OPERATIONS USE PHASE OF VALMET’S TECHNOLOGIES
-20% -80% -20% 100%
CO2 emission reduction CO2 emission reduction Further reduced energy use Carbon neutral production
of Valmet’s current technologies
Valmet´s new Climate Program sets credible targets and concrete actions for 2030 for the entire value chain
Program is aligned with the Paris Climate Agreement´s 1.5-degree pathway and UN Sustainable Development Goals and Valmet is
in process to send its climate targets for the Science Based Targets Initiative for validation
Main actions to reach targets by 2030
Target CO2 emission reductions from supply chain
Reduce energy usage and use renewable fuels and CO2 free electricity and district heating in own locations
Improve energy efficiency of our existing process technology offering by 20%
Develop existing and new technologies to enable carbon neutral production for our customers
11 June 2021 © Valmet | Roadshow presentationFinancial targets
Growth Profitability ROCE Dividend policy
Net sales for stable Comparable EBITA: Comparable return on Dividend payout at least
business to grow over 10–12% capital employed (ROCE) 50% of net profit
two times the market before taxes1: >20%
growth
Net sales for capital
business to exceed
market growth
1) Comparable ROCE before taxes = (profit before taxes + interests and other financial expenses +/- items affecting comparability) / (balance sheet total - non-interest-bearing liabilities (average for the period))
12 June 2021 © Valmet | Roadshow presentationInvestment highlights
Investment highlights
1 Strong position in the growing market of converting renewables
2 Widest technology and services offering combined with automation excellence
3 Services: The widest offering and strong geographical presence
4 Automation: Maximizing efficiency and safety of our customers
5 Paper: World-class technology for packaging and hygiene needs
Pulp and Energy: Strong business with high market share and flexible cost
6
structure
7 Systematically building the future
14 June 2021 © Valmet | Roadshow presentationStrong position in the growing market of converting renewables 1
Paper Board Tissue Pulp Energy Automation Services
#1 0.4 ~ -2% #1 1.0 ~ 2-3% #1 0.7 ~ 3-4% #1-2 1.5 ~ 1% #1-3 2.0 ~ 1% #1-3 2.1 ~ 1% #1-2 8.0 ~ 1-2%
EUR bn p.a. EUR bn p.a. EUR bn p.a. EUR bn p.a. EUR bn p.a. EUR bn p.a. EUR bn p.a.
Increasing role of digital World trade, e-commerce Rise in purchasing power Growing demand for Decarbonization in energy Aging machines and Increasing pulp, tissue,
media decreases demand for and emerging markets and living standards sustainable packaging, production installed automation board and energy
print papers growth drive packaging Urbanization and improved tissue, hygiene products Biomass and residual systems production
Demand for technology Demand for light weight hygiene and textiles waste used in heat and Investments in new pulp Customer demand for
driven efficiency board Fast economic growth in Increasing environmental process steam production and paper production lines resource efficiency,
improvements Shift from plastic packaging emerging markets awareness and stricter Tightening air emissions and industrial productivity, end-product
Need for specialty papers to renewable materials regulations legislation and stricter decarbonization quality, industrial internet
Demand for higher quality services and reduced
Conversions from paper to Fiber-based plastic directives Demand for raw material
Consumers’ higher hygiene replacement savings, process environmental impact
board habits
Demand for second efficiencies and Customer focus on core,
generation bioethanol sustainability decreasing own resources
Demand for Industrial and outsourcing of non-
Internet based solutions core operations
driven by customer Size and gradual aging of
digitalization installed base and capacity
increases
Closures and conversions
of non-competitive
production lines
3% of net sales 20% of net sales 6% of net sales 18% of net sales 9% of net sales 9% of net sales 35% of net sales
# Market positon | Estimated market size for current offering (EUR) | Anticipated long-term market growth For paper, board and tissue market position and estimated market size calculated as average during 2018-2020.
For pulp, energy and automation the market position and estimated market size calculated based on 2020 figures.
For services, the market position calculated from 2020 and estimated market size once the market recovers from the
15 June 2021 © Valmet | Roadshow presentation temporary negative impact of COVID on customer operations and services demandWidest technology and services offering combined with 2
automation excellence
Paper Pulp Energy
• Board, paper and tissue production lines • Wood and pulp handling • Heat and power generation
• Rebuilds • Fiber processing • Air emission control
• Stand-alone products • Recovery • Biofuels
Process
technology
Services Customer Automation
• Spare parts and components • Distributed Control Systems (DCS)
• Maintenance and shutdown services • Quality Management Systems (QMS)
Services Automation
• Outsourcing services • Analyzers and measurements
• Production consumables • Industrial Internet solutions
• Process support and optimization
16 June 2021 © Valmet | Roadshow presentationServices: The widest offering and strong geographical presence 3
Services business line
Widest offering to support customers’ all service needs Services business line
Orders received (EUR million)
Benefits from growing installed base
Strong geographical presence close to customers 1,459 Organic
1,315 1,356 1,343 growth
Steady increase in market share from 13% in 2014 to 1,182
1,242 ~4%
17-18% in 2020 1,119 CAGR in
1,055 2014-2019
Targeting to grow with the market and by winning further
market share
Opportunities to win new customers and increase share
of wallet with existing customers
2014 2015 2016 2017 2018 2019 2020 LTM
17 June 2021 © Valmet | Roadshow presentationAutomation: Maximizing efficiency and safety of our customers 4
Automation business line
Solutions range from single measurements to plant-wide Automation business line
process automation systems Orders received (EUR million)
Designed to maximize safety, sustainability and efficiency
Organic
of customers’ businesses 416 415 422 growth
386 ~5%
Securing future competitiveness with R&D 368 57 81 77 CAGR
337 56
51
Strong track record since acquired to Valmet in 2015 38
Several drivers for future growth
– Increasing direct sales to customers
– Package sales with Valmet’s capital equipment 359 334 345
317 330
299
– Replacing competitors’ installed base and entering new industries
– Growing in automation services
2016 2017 2018 2019 2020 LTM
18 June 2021 © Valmet | Roadshow presentationPaper: World-class technology for packaging and hygiene needs 5
Paper business line
Offering includes world-leading technology and products Paper business line
for board, tissue and paper making Orders received (EUR million) Net sales (EUR million)
Long-term growth supported by favorable 1,035 1,077 1,043 1,029 1,071 1,076
1,148
937 913
megatrends 784
718
– Growing e-commerce and packaging needs 671 673 659 647
528
– Increasing demand for hygiene products
High market share
Technological advantage and excellent
2014 2015 2016 2017 2018 2019 2020 LTM 2014 2015 2016 2017 2018 2019 2020 LTM
references
R&D targeted to introduce new products and improve the Capacity
2015 2020
Market Market
costs share position
existing offering
EUR million 270 301 Board ~50% #1
Flexible organization and low capacity cost % of net sales 41% 28% Tissue ~35% #1
provides resilience to market fluctuations Paper ~50% #1
19 June 2021 © Valmet | Roadshow presentationPulp and Energy: Strong business with high market share and 6
flexible cost structure
Pulp and Energy business line
Offering includes full pulp mills and energy solutions for Pulp and Energy business line
biomass and emission control Orders received (EUR million) Net sales (EUR million)
Long-term growth supported by favorable 1,344
1,125
megatrends 939
1,000
934
1,019
956 913 919
1,003 993
864 826 800 863
– Growing demand for sustainable packaging and hygiene products and
678
textiles
– Replacing plastic with fiber-based materials
High market share
Technological advantage by focusing on R&D 2014 2015 2016 2017 2018 2019 2020 LTM 2014 2015 2016 2017 2018 2019 2020 LTM
Flexible organization and low capacity cost provides
Capacity Market Market
resilience to market fluctuations costs
2015 2020
share position
Yearly variations in orders received are typical due to EUR million 218 196 Pulp ~45% #1-2
% of net sales 24% 20% Energy ~20% #1-3
timing of large orders
20 June 2021 © Valmet | Roadshow presentationSystematically building the future 7
Customer Technology Process People
Valmet’s way to serve: Develop new products Continue to improve Continuous development
Lifecycle collaboration and technologies project management of employees through
between the customer and project execution training programs
and Valmet Improve product cost
competitiveness Valmet’s climate Building capabilities
Add value to customers program targeting to globally
through Industrial Increase material and reduce emissions in the Continue to improve
Internet solutions energy efficiency and whole value chain safety and lower LTIF
further develop solutions
Ensure strong market to reduce carbon
position in capital footprint
business
Continue to increase
market share in the
stable business
21 June 2021 © Valmet | Roadshow presentation LTIF = Lost time incident frequencyFinancials
Key figures
EUR million Q1/2021 Q1/2020 Change 2020
Orders received 1,312 1,187 11% 3,653
Order backlog1 3,709 3,557 4% 3,257
Net sales 858 821 5% 3,740
Comparable EBITA 80 52 55% 365
% of net sales 9.4% 6.3% 9.8%
EBITA 89 51 75% 355
Operating profit (EBIT) 76 42 81% 319
% of net sales 8.9% 5.1% 8.5%
Earnings per share, EUR 0.38 0.20 92% 1.54
Return on capital employed (ROCE) before taxes2 20% 13% 22%
Cash flow provided by operating activities 148 173 -14% 532
Gearing1 3% -22% 13%
Items affecting comparability: EUR 8 million in Q1/2021 (EUR -1 million in Q1/2020)
Valmet’s investment in Neles had a positive impact on EBITA of EUR 3.7 million in Q1/2021
Valmet’s investment in Neles had a positive impact on operating profit of EUR 0.2 million in Q1/2021
1) At end of period
2) Annualized
23 June 2021 © Valmet | Roadshow presentationComparable EBITA margin1 target level reached for the first time
Net sales and Comparable EBITA, rolling 12 months (EUR million and %)1
3,777 Target 10–12%
3,682 3,700 3,676 3,740
3,547 10.4%
3,429 9.8%
3,308 3,325 3,279 3,337 9.1% 9.1%
3,257 8.9%
3,145 8.6% 8.7% 8.7% 8.8%
3,019 3,044 2,995 3,058
2,928 2,926 2,919
2,851 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 2,363
6.4% 6.5% 6.6% 6.7%
6.2%
5.9% Capital business, rolling 12
5.6% months
4.8% 1,832 1,942 2,005 2,013 2,079 Stable business, rolling 12
1,720 1,736 1,762 2,141
4.3% 1,799 months
1,591 1,610 1,544 1,473 1,469 1,399 1,435 1,584 1,676 1,762 1,811 1,715 1,739 1,695 1,663 1,661 1,636
1,572
1,601 1,666
1,625 1,525 1,559
1,579 1,429 1,434 1,451 1,453 1,450 1,447 1,441 1,474 1,469 1,496 1,497 Comparable EBITA %, rolling
1,490 1,369 1,378 1,484 1,508 1,357 12 months
1,226
1,127
1,010 1,005 984 989 1,007
1.3% 1.3% 1.4%
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21
Comparable EBITA,
33 32 33 106 121 153 167 182 194 197 202 196 199 190 194 218 206 219 225 257 282 291 311 316 320 327 336 365 393 rolling 12 months
(EUR million)
• In Q1/2021, net sales remained at the previous year's level and Comparable EBITA increased compared with
Q1/2020
1) Rolling 12 months. Carve-out figures for 2013 have been used in the calculation of Q1–Q3/2014 figures. Valmet implemented IFRS 15 – Revenue from Contracts with Customers as of
January 1, 2018 by applying full retrospective method. Thus, figures presented are not fully comparable.
24 June 2021 © Valmet | Roadshow presentationGuidance and short-term market outlook
Guidance for 2021 (as announced on April 16, 2021)
Valmet estimates that net sales in 2021 will increase in comparison with 2020 (EUR 3,740 million) and
Guidance
Comparable EBITA in 2021 will increase in comparison with 2020 (EUR 365 million).
Short-term market outlook
Q2/2020 Q3/2020 Q4/2020 Q1/2021
Services Satisfactory / Weak Satisfactory / Weak Satisfactory / Weak Satisfactory
Automation Good / Satisfactory Good / Satisfactory Good Good
Pulp Good Good Good Good
Pulp and Energy
Energy Satisfactory Satisfactory Weak Weak
Board and Paper Good Good Good Good
Paper
Tissue Satisfactory Satisfactory Good Good
The short-term market outlook is based on customer activity (50%) and Valmet’s capacity utilization (50%) and is given for the next six months from the end of the respective quarter. The scale is ‘weak–satisfactory–good’.
25 June 2021 © Valmet | Roadshow presentationConclusion
Conclusion
1 Strong position in the growing market of converting renewables
2 Widest technology and services offering combined with automation excellence
3 Services: The widest offering and strong geographical presence
4 Automation: Maximizing efficiency and safety of our customers
5 Paper: World-class technology for packaging and hygiene needs
Pulp and Energy: Strong business with high market share and flexible cost
6
structure
7 Systematically building the future
27 June 2021 © Valmet | Roadshow presentationImportant 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 for company development, growth and profitability and the realization of synergy benefits and cost savings, and statements preceded by “anticipates”, “believes”, ”estimates”, “expects”, ”foresees” or similar expressions, are forward-looking statements. Since these statements are based on current decisions and plans, estimates and projections, they involve risks and uncertainties which may cause the actual results to materially differ from the results currently expressed. Such factors include, but are not limited to: 1) general economic conditions, including fluctuations in exchange rates and interest levels which influence the operating environment and profitability of customers of the company or economic growth in the company’s principal geographic markets. 2) industry conditions, intensity of competition situation, especially potential introduction of significant technological solutions developed by competitors, financial condition of the customers and the competitors of the company, 3) the company’s own operating factors, such as the success of production, product development and project management and the efficiencies therein including continuous development and improvement 4) the success of pending and future acquisitions and restructuring. 28 June 2021 © Valmet | Roadshow presentation
Appendix
1 Financials
2 Growth and profitability improvement
3 Shareholders and share price development
4 Strategy and offering
5 Management and remuneration
29 June 2021 © Valmet | Roadshow presentationAppendix Financials
Quarterly Comparable EBITA margin development
Net sales and Comparable EBITA (EUR million and %) 11.5%
12.5%
10.7% 10.9% 1,167
Target 10–12%
1,103
9.4%
967 984 9.5%
901 919
8.4% 858
854
804 7.5% 785
844 7.7% 857 821 832
777 779 7.3% 7.8% 7.2% 765 8.3%
734 732 715 732
6.1% 7.1% 685 8.0% 686 6.3%
6.9% 6.4% 652 7.2% 645 6.5%
588 590 561 5.3% 6.9% Capital business
519 4.8% 583 649
5.5% 512 Stable business
3.7% 458 523
3.5% 408 445 375 442 445 521 520 453 519
427 334 357 370 419 472 346 457 Comparable EBITA %
400 338 333 444 426 443 412 519
337 498 409 411 401 399 380
295 354 319 371 377 351 374 345 346 364
334 314 311 340 339
278 3.0%
224 251 235 242
306
0.7%
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21
4 22 32 48 19 54 47 63 31 57 52 56 34 48 56 81 22 61 61 113 47 69 81 118 52 76 91 146 80 Comparable EBITA
(EUR million)
31 June 2021 © Valmet | Roadshow presentationServices: Orders received remained at the previous year’s level at
EUR 385 million in Q1/2021
Orders received (EUR million) Net sales (EUR million)
2019: 2020: 2019: 2020:
EUR 1,459 million EUR 1,356 million EUR 1,374 million EUR 1,327 million
400 371 395 398 385 1,600 450 1,800
355 358 400 402
346 344 342
335 400 1,600
350 313 321 321 325 328 1,400 366 361
307 300 340 336
293 284 284 282 288 350 325 322 1,400
300 1,200 314 316
267 273 273 267 264 304 304 302 295
307
290
252 278 286 284 282 276
242 300 268 1,200
250 1,000 251 242
257 252 247
235
250 224 1,000
200 800
200 800
150 600
150 600
100 400 100 400
50 200 50 200
0 0 0 0
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Orders received (LHS) Orders received, last 4 quarters (RHS) Net sales (LHS) Net sales, last 4 quarters (RHS)
• Orders received remained at the previous year's level compared with Q1/2020
- Orders received increased in China, remained at the previous year's level in North America and Asia-Pacific, and decreased in South America
and EMEA
- Orders received increased in Rolls, remained at the previous year’s level in Performance Parts, and Board, Paper and Tissue Solutions, and
decreased Pulp and Energy Solutions and Fabrics
• Net sales remained at the previous year’s level compared with Q1/2020
• Despite COVID-19 related travel restrictions and lower capacity utilization in graphical paper mills, Services’ orders received and net
sales remained at the previous year’s level compared with Q1/2020
32 June 2021 © Valmet | Roadshow presentationAutomation1: Orders received increased to EUR 123 million in
Q1/2021
Orders received (EUR million) Net sales (EUR million)
2019: 2020: 2019: 2020:
EUR 416 million EUR 415 million EUR 393 million EUR 402 million
160 480 160 137 141 480
140 120 123 420 140 124 420
109 112 116 115 17 24
120 103 101 102 103 104
97 98 360 120 101 99 18 360
95
88 87 88 93 17 24 24 20 11 90 95
88 87
94
100 81 80 12 75 9 81 15 8 81 300 100 79 6 81 5 80 80 300
10 78 75 11 18 21 12 16 72 72 73 73 13
80 6 9 16 240 80 66 8 69 8
68 69 14 12 17 15 67 240
8 8 15 7 11 16 11 6 11
13 9 4 12 8 10 9 9
60 180 60 120 117 18 180
94 95 82 86 96 92 96 103 95 94 104 106
40 85 82 91 91 82 84 81 120 40 82 75 120
70 67 66 72 78 72 70 68 66 73 65 73 76 64 69 77 72
62 65 58 59 60 59 64
20 60 20 49 60
0 0 0 0
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Orders received, internal (from other business lines) Net sales, internal (from other business lines)
Orders received, external Net sales, external
Orders received, total (including internal) Net sales, total (including internal)
Orders received, last 4 quarters (RHS) Net sales, last 4 quarters (RHS)
• Orders received increased compared with Q1/2020
- Orders received increased in EMEA and decreased in South America, North America, Asia-Pacific and China
• Net sales decreased compared with Q1/2020
• COVID-19 caused access restrictions to some customer sites
1) Comments refer to orders received and net sales including also internal orders received and internal net sales.
33 June 2021 © Valmet | Roadshow presentationPulp and Energy: Orders received increased to EUR 461 million in
Q1/2021
Orders received (EUR million) Net sales (EUR million)
2019: 2020: 2019 : 2020:
EUR 1,125 million EUR 934 million EUR 919 million EUR 1,003 million
700 1,400 700 1,400
622
600 560 1,200 600 1,200
500 451 461 1,000 500 1,000
395
376
400 800 400 800
320
275 291 312 315
265 272
300 259 261
238 247 600 300 262 265
286
600
215 245 240
206 192 201 210 229 234 222 231 215 219 203 205 223 232 212
231
211
230
180 196 187 189 192 200
200 138 141 151 400 200
181 181
160 400
122
96 85
100 66 52 200 100 200
0 0 0 0
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Orders received (LHS) Orders received, last 4 quarters (RHS) Net sales (LHS) Net sales, last 4 quarters (RHS)
• Orders received increased compared with Q1/2020
- Orders received increased in North America, EMEA and China, and decreased in South America and Asia-Pacific
- Orders received increased in Pulp and decreased in Energy
• Net sales remained at the previous year’s level compared with Q1/2020
• Pulp and Energy business line has managed challenges caused by COVID-19 well, and therefore the pandemic did not
cause major impacts on its operations in Q1/2021
34 June 2021 © Valmet | Roadshow presentationPaper: Orders received increased to EUR 363 million in Q1/2021
Orders received (EUR million) Net sales (EUR million)
2019: 2020: 2019: 2020:
EUR 1,043 million EUR 1,029 million EUR 913 million EUR 1,076 million
450 419 1,200 450 1,200
400 363 1,050 400 362 1,050
353
350 314 321 350 304 900
299 295 900 289
300 280 267
300 275 270
246 750 237 246 255242 750
243 243
250 212 250 223 214 217
203 201 211 200 196 600
190 197199186 199 600 186 177185 188 186
200 176 182 200 157165 165170
156 138 144 450
142149129 450 150 114108120
150 128
109 97
300 100 300
100
50 150 50 150
0 0 0 0
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Orders received (LHS) Orders received, last 4 quarters (RHS) Net sales (LHS) Net sales, last 4 quarters (RHS)
• Orders received increased compared with Q1/2020
- Orders received increased in all areas except Asia-Pacific, where orders received decreased
- Orders received increased in Stock Preparation and Recycled Fiber, as well as in Tissue and remained at the previous year's level in Board and Paper
- Small and Medium size Machines (the acquired PMP Group) contributed EUR 10 million to orders received
• Net sales increased compared with Q1/2020
- Small and Medium size Machines (the acquired PMP Group) contributed EUR 21 million to net sales
• Paper business line has managed challenges caused by COVID-19 well, and therefore the pandemic did not cause major impacts on its
operations in Q1/2021
35 June 2021 © Valmet | Roadshow presentationOrders received and net sales split in 2020
Orders received (EUR million and % of total) Net sales (EUR million and % of total)
1,029 1,076
28% 29% 1,327
1,356
37% 35%
Services Services
Automation Automation
Pulp and Energy Pulp and Energy
Paper Paper
934 334 1,003 335
26% 9% 27% 9%
349 440
621 676
10% 12%
17% 18%
489
885 13%
378 North America North America
24% 10%
South America 595 South America
16%
EMEA EMEA
China China
Asia-Pacific Asia-Pacific
1,420 1,540
39% 41%
36 June 2021 © Valmet | Roadshow presentationBusiness lines in 2020: Stable business
Services business line Automation business line
11% 17% 10% 8% 18%
6%
10% 28% 29%
13%
Orders received
Orders received
7%
25%
9%
71%
34% 43% 61%
Rolls North America Pulp and Paper North America
Mill Improvements South America Energy and Process South America
Performance Parts EMEA EMEA
Fabrics China China
Energy and Environment Asia-Pacific Asia-Pacific
10% 17% 11% 8%
7% 21%
8% 29% 28%
12%
Net sales
Net sales
5%
25%
8%
72%
36% 44% 60%
Rolls North America Pulp and Paper North America
Mill Improvements South America Energy and Process South America
Performance Parts EMEA EMEA
Fabrics China China
Energy and Environment Asia-Pacific Asia-Pacific
Split to Pulp and Paper / Energy and Process includes internal orders received and net sales.
37 June 2021 © Valmet | Roadshow presentationBusiness lines in 2020: Capital business
Pulp and Energy business line Paper business line
12% 1% 7% 17%
24% 21%
28% 26%
1%
Orders received
Orders received
23%
25%
50%
72%
40% 53%
Pulp North America Tissue North America
Energy South America Board South America
EMEA Paper EMEA
China China
Asia-Pacific Asia-Pacific
14% 3% 9% 12% 18%
22%
34% 9%
Net sales
Net sales
35%
24% 11%
66%
39% 69% 35%
Pulp North America Tissue North America
Energy South America Board South America
EMEA Paper EMEA
China China
Asia-Pacific Asia-Pacific
38 June 2021 © Valmet | Roadshow presentationAreas: Orders received and net sales development
North America South America EMEA China Asia-Pacific
1,594 1,6061,690
(EUR million and % of total)
1,470 1,508
1,420
Orders received
1,320
880 885
804
717 686 730 670
588 621 572 523 586
490 533 480 48% 46% 51% 46% 479
414 378 43% 42% 428 381 323 383
37% 39% 342 349
24% 281 235 183 244 244 267 24% 247
166 17% 17% 14% 187 19%
25% 13% 15%
19% 16% 19% 21% 20% 22% 17% 9% 6% 7% 6% 10% 11% 8% 11%
7% 9% 9% 12% 10% 10% 12% 10%
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
(EUR million and % of total)
1,5071,5451,5661,540
1,369
1,304
1,0961,053
Net sales
774
679 676
615 644 603 595
47% 49% 46% 44% 535
465 489
422 449 421 368 42% 43% 45% 41% 392 362 402 378 372 346 396 375 440
325 335 268 303 282 299
205 247 169
16% 13% 16% 15% 16% 13% 13% 15% 13% 12%
18% 21%
22% 20% 20% 22% 11% 11% 10% 12% 13% 11% 10% 12% 11% 12%
16% 18% 7% 8% 5% 10%
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
2013
2014
2015
2016
2017
2018
2019
2020
2013 figures on a carve-out basis. Automation business line figures included as of Q2/2015.
39 June 2021 © Valmet | Roadshow presentationAreas: Business line split in 2020
North America South America EMEA China Asia-Pacific
4%
Orders received
18% 16%
22%
29% 2%
32%
41% 38%
60% 58% 24%
1% 58% 27%
10%
33%
6% 8%
14%
Services Automation Services Automation Services Automation Services Automation Services Automation
Pulp and Energy Paper Pulp and Energy Paper Pulp and Energy Paper Pulp and Energy Paper Pulp and Energy Paper
20% 18%
24% 24%
29% 3% 30% 33%
Net sales
37%
56% 52% 4%
5% 25% 6%
10% 19%
59% 13% 31%
Services Automation Services Automation Services Automation Services Automation Services Automation
Pulp and Energy Paper Pulp and Energy Paper Pulp and Energy Paper Pulp and Energy Paper Pulp and Energy Paper
40 June 2021 © Valmet | Roadshow presentationAnnounced orders booked in H1/2021 Booked Date Description Business line Country Value quarter Q1 Jan 15 Extensive tissue machine rebuild Paper Finland Not disclosed Q1 Jan 29 Textile recycling plant´s main equipment Pulp and Energy Sweden Around EUR 25 million Q1 Feb 19 All main process islands and automation for a bioproduct mill Pulp and Energy Finland About EUR 350-400 million Q1 Mar 2 A coated board line and a fine paper making line Paper China Not disclosed. An order of this scope typically adds up to around EUR 190–220 million Q1 Mar 25 Tissue line Paper Turkey Not disclosed Q1 Apr 29 Multifuel boiler plant Pulp and Energy Czech Republic Typically, the value of this kind of order is EUR 35-40 million. Q1 May 11 Two tissue lines Paper China Not disclosed. Typically, the value of this kind of order is around EUR 20-30 million Q1 May 12 Tissue making line Paper China Not disclosed. A project of this size and scope is typically valued at around EUR 5-10 million. Q2 Apr 14 Evaporation plant Pulp and Energy Sweden Not disclosed. A project of this size and scope is typically valued at around EUR 30 million Q2 May 17 Drying technology Paper Finland Not disclosed. 41 June 2021 © Valmet | Roadshow presentation
Announced orders booked in H2/2020
Booked Date Description Business line Country Value
quarter
Q3 Aug 27 New bleach plant and upgrade of batch cooking Pulp and Energy India Not disclosed. An order of this scope is typically around EUR 20-30 million.
and fiberline
Q3 Oct 14 Extensive paper machine grade conversion rebuild Paper Turkey Not disclosed. An order of this scope is typically around EUR 40-50 million.
Q3 Oct 19 OptiConcept M container board making line Paper China Not disclosed.
Q3 Oct 21 Tissue line Paper United Kingdom Not disclosed.
Q3 Oct 22 Fine paper making line Paper China Not disclosed. An order of this scope is typically around EUR 80-100 million.
Q4 Dec 14 Extensive paper machine grade conversion rebuild Paper United States Not disclosed.
Q4 Dec 15 New flash drying and baling line and CTMP rebuild Pulp and Energy Sweden Not disclosed. An order of this scope is typically around EUR 40-50 million.
Q4 Jan 18 OptiConcept M container board making line Paper China Not disclosed.
Q4 Jan 21 Boiler plant for district heat production Pulp and Energy Finland Not disclosed.
Q4 Mar 2 A line for chemi thermo mechanical pulp production Pulp and Energy China Not disclosed. An order similar to the delivery scope is typically around EUR 10-20 million.
Q4 Mar 9 Key pulp technology Pulp and Energy China Not disclosed. A project of this size and scope is typically valued at around EUR 100 million.
42 June 2021 © Valmet | Roadshow presentationAnnounced orders booked in H1/2020
Booked Date Description Business line Country Value
quarter
Q1 Jan 23 Key pulp mill technology and automation (Lenzing & Pulp and Energy Brazil Not disclosed. The value of a delivery of this size and scope is typically around EUR 200-250
Duratex) million.
Q1 Feb 18 Flue gas condensing plant Pulp and Energy Finland Not disclosed. The value of these types of orders is approximately between EUR 20–30 million.
Q1 Feb 26 Final stage of forming section rebuild Paper Sweden Not disclosed.
Q1 Feb 27 Waste-to-energy boiler Pulp and Energy Sweden Typically above EUR 10 million.
Q1 Mar 16 Coated board making line Paper China Not disclosed. The value of an order of this type and scope is typically around EUR 150-200
million.
Q1 Mar 24 Key containerboard machine technologies Paper India Not disclosed. The value of a project of this type and scope is typically around EUR 12-15 million.
Mar 25 Mill Maintenance Outsourcing agreement Services Australia Not disclosed.
Q1 Mar 26 Hard nip sizer Paper Rep. of Korea Not disclosed. The total value of an order of this type is typically around EUR 5-10 million.
Q1,Q2 Apr 27 Fine paper making line with an extensive scope and a Paper (Q2), Pulp and China Not disclosed. The total value of orders of this type and scope is typically around EUR 130-150
recovery boiler Energy (Q1) million.
Q1 May 7 Tissue line including an extensive automation package Paper Turkey Not disclosed.
Q1 May 12 Ash treatment system Pulp and Energy Brazil Not disclosed. The total value of an order of this type is typically around EUR 10-15 million.
Q1 Jun 8 Complete steam boiler plant Pulp and Energy Austria The value of the order is approximately EUR 40 million.
.
Q2 Apr 16 Reel and winding technology Paper Finland Not disclosed. The total value of an order of this type is typically around EUR 10-20 million.
Q2 Apr 24 Biomass-fired boiler plant Pulp and Energy Finland The value of the order is approximately EUR 70 million.
Q2 Apr 29 Converting boiler plant into biomass combustion Pulp and Energy Poland The value of the order is approximately EUR 20 million.
Q2 Jun 10 Cooking and fiberline Pulp and Energy China Not disclosed.
Q2 Jun 25 Off-machine coater Paper Brazil Not disclosed. The value of an order of this type is typically around EUR 25-35 million.
Q2 Jun 29 Hot water plant Pulp and Energy Sweden The value of an order of this size and delivery scope is typically above EUR 40 million.
Q2 Jul 9 Pulp production upgrade technology Pulp and Energy Indonesia Not disclosed. An order with this scope of supply is usually in the range of EUR 10-12 million.
Q2 Jul 20 Bleached chemi thermo mechanical pulp line Pulp and Energy China Not disclosed.
Q2 Jul 22 Tissue line Paper Russia Not disclosed.
43 June 2021 © Valmet | Roadshow presentationOrders received increased to EUR 1,312 million in Q1/2021
Orders received (EUR million)
1,800 4,500
1,600 4,000
1,400 3,500
1,200 3,000
1,000 2,500
800 2,000
1,312
600 1,101 1,187 1,500
1,083 1,058 1,009
1,023 857
1,005
890 865 940 1,026 940
400 781 793 803 788 796 743 835 826 1,000
725 692 727 700
580
200 466 480 500
0 0
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Orders received (LHS) Last 4 quarters (RHS)
• In stable business1, orders received remained at the previous year's level at EUR 508 million in Q1/2021
• In capital business, orders received increased to EUR 825 million in Q1/2021
• Orders received increased in developed markets and decreased in emerging markets during Q1/2021
• South America, China and Asia-Pacific together accounted for 32% of orders received
1) Including internal orders received for the Automation business line.
44 June 2021 © Valmet | Roadshow presentationStable business orders received totaled EUR 1,765 million during
the last four quarters
Orders received (EUR million) in stable business1
700 2,100
600 1,800
507 514 508
500 461 474 463 1,500
443 424 439 445 435 433 112 116 426
402 394 409 383 381 123
400 344
372 88 359 93 102 103 104 369 120 1,200
330 342 88 103 109 97 98
95 81 81
300 267 273 273 293 75 80
87 75 101 81
900
242 78
200 600
321 355 321 346 344 325 358 371 335 395 398 328 342
385
307 313 300
267 273 242 273 293 252 267 264 284 284 282 288
100 300
0 0
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21
Services (LHS) Automation, total (including internal) (LHS) Last 4 quarters (RHS)
• Total orders received in stable business were EUR 7 million lower compared with Q1/2020
1) Including internal orders received for the Automation business line.
45 June 2021 © Valmet | Roadshow presentationOrder backlog EUR 3,709 million at the end of Q1/2021
Order backlog (EUR million) Structure of order backlog
4,000
3,500 3,709
3,425
3,333
3,557 3,492
~30%
3,311 3,257
3,000 3,216
3,001
2,791 2,829
2,500 2,704 2,714 2,720
2,583 2,621
2,406 2,458
2,312 2,283
2,000 2,208 2,207 2,192
1,972 1,998 2,064
2,117 2,074 2,106 ~70%
1,500
1,000
500 Stable business
0 Capital business
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
• Order backlog was EUR 452 million higher than at the end of Q4/2020
• Approximately 65% of the order backlog is currently expected to be realized as net sales during 2021 (at the end of
Q1/2020, ~60% during 2020)
• Approximately 30% of the order backlog relates to stable business (~30% at the end of Q1/2020)
46 June 2021 © Valmet | Roadshow presentationGross 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%
25%
250 25% 250 25%
200 20% 200 20%
17%
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
Q4/2016
Q1/2017
Q2/2017
Q3/2017
Q4/2017
Q1/2018
Q2/2018
Q3/2018
Q4/2018
Q1/2019
Q2/2019
Q3/2019
Q4/2019
Q1/2020
Q2/2020
Q3/2020
Q4/2020
Q1/2021
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
Q2/2015
Q3/2015
Q4/2015
Q1/2016
Q2/2016
Q3/2016
Q4/2016
Q1/2017
Q2/2017
Q3/2017
Q4/2017
Q1/2018
Q2/2018
Q3/2018
Q4/2018
Q1/2019
Q2/2019
Q3/2019
Q4/2019
Q1/2020
Q2/2020
Q3/2020
Q4/2020
Q1/2021
EUR million (LHS) % of net sales (RHS) EUR million (LHS) % of net sales (RHS)
• Gross profit was 25% of net sales (25% in Q1/2020)
− Stable business represented 40% of net sales (44% in Q1/2020)
• Selling, general & administrative (SG&A) expenses decreased 5%
− SG&A was 17% of net sales (18% in Q1/2020)
47 June 2021 © Valmet | Roadshow presentationCash flow provided by operating activities and CAPEX
Cash flow provided by operating activities (EUR million)
2014: 2015: 2016: 2017: 2018: 2019: 2020:
EUR 236 million EUR 78 million EUR 246 million EUR 291 million EUR 284 million EUR 295 million EUR 532 million
200
150 182 173
143 151 148
100 117 122 119 126
114
88 94 89 94
50 78
64
43 46 30 17 16 3 33 31 19 3 30
0
-20 -44
-50
-100
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
Q2/2015
Q3/2015
Q4/2015
Q1/2016
Q2/2016
Q3/2016
Q4/2016
Q1/2017
Q2/2017
Q3/2017
Q4/2017
Q1/2018
Q2/2018
Q3/2018
Q4/2018
Q1/2019
Q2/2019
Q3/2019
Q4/2019
Q1/2020
Q2/2020
Q3/2020
Q4/2020
Q1/2021
• Change in net working capital1 EUR 104 million in Q1/2021
• Cash flow provided by operating activities EUR 148 million in Q1/2021
• CAPEX2 EUR 24 million in Q1/2021
Valmet implemented IFRS 16 – Leases as of January 1, 2019 by applying the simplified transition method and therefore 2018 figures are not restated.
1) Change in net working capital in the consolidated statement of cash flows.
2) Excluding leased assets.
48 June 2021 © Valmet | Roadshow presentationNet working capital at -18% of rolling 12 months orders received
Net working capital1 and orders received (EUR million)
1,500 30%
1,312
1,000 1,101 1,187 20%
1,023 1,026 1,083 1,058 1,009
1,005 940
890 865 940
781 725 793 803 788 857 796 743 727 835 826
500 692 700 10%
580
466 480
0 0%
-235 -249 -345 -353 -317 -265 -244 -238 -194 -181 -265 -294 -378 -335 -370
-387 -384 -362 -427 -474 -459 -342 -421 -426
-614 -644 -629 -588 -662
-500 -10%
-1,000 -20%
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
Q2/2015
Q3/2015
Q4/2015
Q1/2016
Q2/2016
Q3/2016
Q4/2016
Q1/2017
Q2/2017
Q3/2017
Q4/2017
Q1/2018
Q2/2018
Q3/2018
Q4/2018
Q1/2019
Q2/2019
Q3/2019
Q4/2019
Q1/2020
Q2/2020
Q3/2020
Q4/2020
Q1/2021
Net working capital (LHS) Orders received (LHS)
Average net working capital/rolling 12 months orders received (RHS) Net working capital/rolling 12 months orders received (RHS)
• Net working capital EUR -662 million, which equals -18% of rolling 12 months orders received
1) Net working capital excluding non-cash net working capital impact from dividend liability.
49 June 2021 © Valmet | Roadshow presentationCapital employed and Comparable ROCE
Capital employed (EUR million) and Comparable return on capital employed (ROCE), before taxes1 (%)
1,639 25%
1,541
23% 23% 23%
22% 22% 22% 1,557
24%
20% 23% 1,314 1,327
1,239 1,240 1,214 1,231 1,237 1,239 1,256
1,184 1,194 1,167 1,195 18% 1,195
1,112 1,138 1,141 1,137 17% 1,150
16% 16%
985 967
902 14% 14% 14% 14% 14% 1,049 1,079
877 13% 13% 13% 1,033
12% 12%
10% 10%
2% 2%
1%
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21
Capital employed Comparable ROCE (before taxes), rolling 12 months
Valmet implemented IFRS 16 – Leases as of January 1, 2019 by applying the simplified transition method, and IFRS 15 – Revenue from Contracts with Customers as of January 1, 2018 by applying full retrospective method.
Thus, figures presented are not fully comparable.
1) Rolling 12 months. Carve-out figures for 2013 have been used in the calculation of Q1–Q3/2014 figures.
50 June 2021 © Valmet | Roadshow presentationDividend and balance sheet
Dividend payout at least 50% of net profit
Track record Balance sheet and cash flow
Dividend per share (EUR) and payout ratio (%) Net debt (EUR million) Cash flow provided by operating activities
Net debt / EBITDA ratio Net working capital
Target 200 2 600
>50% 150 178 1.5
of net 400
149
profit 0.8
100 1 532
0.4 200
50 52 0.5 291 284 295
236 246
81%
76% 0.90 -0.2 0 78
0 0.2 0
-0.4
68% 68% 0.80 -238 -294
64% -50 -0.8 -0.5 -353
-200 -387
59% 58% -100 -90 -474 -426
0.65 -100 -1
-588
-1.1 -400
0.55 -150 -1.5
-166 -600
0.42 -200 -219 -2
0.35
-250 -2.5 -800
0.25 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020
0.15
Net debt Net debt / EBITDA Cash flow Net working capital
2013 2014 2015 2016 2017 2018 2019 2020
51 June 2021 © Valmet | Roadshow presentationOrders received and profitability development, annual
Orders received (EUR million)1 Net sales and Comparable EBITA (EUR million)1
3,740
3,986 3,547 Pulp and
3,722 3,653 3,325 Energy, and
3,014 3,058 Paper business
3,225 3,272 2,928 2,926
9.8%
3,071 3,139 2,703 8.9% lines
2,878 2,613
2,453 7.6% 2,473 7.7%
2,584 2,445 2,168 6.4% 6.2% 6.7% 7.1% Services and
2,182
2,077 1,962 2,061 6.5%
1,713 4.3% Automation
1,999 1,658 1,832 2,079 business lines
2,080 2,0161,537 5.6% 2.1% 1,473 1,584 1,799
1,585 1,390 1,572 1,715 1,661
1,147
1,729 2,003 1,581 1,484 1,453 1,474 1,525 Comparable
1,362 1,576 1,357
1,346 EBITA-%
1,645 1,818 1,691 877 974
1,011 1,032 989
1,145 1,341 1,481 1,558
999 1,0551,0351,055 715
637
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Comparable EBITA
116 159 205 192 54 106 182 196 218 257 316 365 (EUR million)
Pulp and Energy, and Paper business lines
Services and Automation business lines
1) Carve-out figures for 2010-2013; as reported for Metso’s Pulp, Paper and Power segment for 2006-2009. Automation has been consolidated into Valmet’s financials since April 1, 2015, when the acquisition of Automation was completed.
52 June 2021 © Valmet | Roadshow presentationAppendix Growth and profitability improvement
Recent development at Valmet
Customer Technology Process People
Valmet acquired Collaboration project with Good development in Staying safe, operational
PMP Group Metsä Spring to produce project management and efficient during
fossil free 3D fiber challenging times in 2020
Valmet’s way to serve products Capacity cost reductions
concept launched for Record-low LTIF for own
globally-unified services Valmet DNA User Remote commissioning employees (1.5) reached
approach Interface received well: and start-up of new in 2020 and in Q1/2021
dozens of projects sold tissue and board Several internal training
Stronger utilization of and delivered with new machine installations programs established and
Valmet’s local presence technology continuing
in areas in sales and ERP renewal
projects Wider utilization of proceeding
Industrial Internet
applications and remote
connections
54 June 2021 © Valmet | Roadshow presentation LTIF = Lost time incident frequency rateActions to keep growing faster than the market
Net sales growth
Stable business Capital business
• Win new customers and increase share of • Benefit from strong favorable megatrends in
wallet with existing customers Board, Tissue, Pulp and Energy
• Grow service sales and multi-year service • Continue to bring advanced
agreements with project sales technology to the market
• Add customer value with on-site and • Leverage strong R&D for new product
remote services innovations
• Continue to develop Field services as a • Continued focus on product cost
differentiator competitiveness
• Competitor replacements in Automation • Create customer value with digitalization
• Grow through new industries in Automation and Industrial Internet
• Leverage the new Valmet DNA User
Interface to win new business in Automation
55 June 2021 © Valmet | Roadshow presentationActions to reach Comparable EBITA target of 10–12%
Comparable EBITA: 10–12%
Actions to reach Comparable EBITA target: Track record
• Grow the stable business Stable business net sales (EUR million)
Comparable EBITA margin (%)
• Focus on improving project management
and execution
1,767 1,728
• Positive margin deviation in capital projects 1,577 Target
1,514 9.8%
• Continue to identify savings opportunities in 1,380
1,479 10–12%
8.9%
procurement through design-to-cost and
7.7%
supplier relationship management 7.1%
1,032 989
6.7%
• Increase flexibility in operations through 6.2%
global footprint development
4.3%
• R&D and new product launches
• Internal efficiencies through digitalization 2.1%
• ERP project (from 2023 onwards)
2013 2014 2015 2016 2017 2018 2019 2020
56 June 2021 © Valmet | Roadshow presentation Including internal net sales for the Automation business line.Actions to maintain ROCE at target level
Comparable return on capital employed (pre-tax): >20%
Main drivers for ROCE: Track record
• Improvement in Comparable EBITA is Capital employed (EUR million)
the biggest driver for ROCE Comparable ROCE (%, before taxes)
• Capital employed has increased due
to acquisitions Equity Interest-bearing liabilities ROCE
1,639
ROCE at target level in 2020
497
• Valmet’s ROCE of 22% is clearly 1,314
higher than 2020 peer average of 11% 1,231 1,195
1,137 1,150
268
• Strong balance sheet needed for big 371 310
219 201
22% Target
877 >20%
projects and swings in market activity 23%
68 16% 20%
14% 13%
10%
809 860 886 918 949 1,046 1,142
2014 2015 2016 2017 2018 2019 2020
57 June 2021 © Valmet | Roadshow presentationSystematically building the future
Continuous renewal and improvement of operational capability
ERP renewal Operational development
• ERP renewal was started in 2016 and • Procurement transformation towards
will be completed in 2023 world-class performance continues
• Project proceeding well • Adding focus on global processes to
• Benefits are based on digitalization, decrease quality costs
process efficiency and IT platform • IT continues modernizing the core platforms
simplification to drive business transformation and to
• Enabler for several other platform accelerate digitalization
renewals • Continue the work on project management
• Savings expected from 2023 onwards culture and effective processes & practices
• New project portfolio management tool for
R&D implemented Valmet wide
58 June 2021 © Valmet | Roadshow presentationProcurement and quality cost development
Implemented procurement savings of annual direct spend Quality costs (% of net sales)
4.3% 4.4% 4.3% 4.0%
3.8% 3.9% 3.7% 3.8% 3.6%
2.9% 3.0% 3.1%
2.6% 2.8%
2.4% 2.2% 2.2%
< 1.3%
2013 2014 2015 2016 2017 2018 2019 2020 Annual
goal 2013 2014 2015 2016 2017 2018 2019 2020 Long-term goal
Targeting >3% of procurement savings annually Long-term quality costs goalAcquisitions
• Valmet’s acquisition strategy is to make
Track record of successful acquisitions
selective acquisitions with a clear industrial
logic to support organic growth
2015 2018 2019 2020
‒ Focus on strengthening services and Automation Enertechnix J&L Fiber 29.5% share
Services in Neles
automation and expanding business in the
pulp, paper and energy value chain
• Approximately 50 cases evaluated annually
• Seven acquisitions made since becoming
independent company in 2014
2015 2019 2020
• Total investment in acquisitions about Tissue rewinder
business
GL&V PMP Group
EUR 1 billion
60 June 2021 © Valmet | Roadshow presentationValmet strengthened its business by acquiring PMP Group
Focus on small and medium-sized tissue machines and board and paper machine rebuilds
Key information about the acquisition
• PMP Group supplies process technologies and services for tissue,
Net sales in 2019 EUR ~70 million
board and paper machines globally
Number of employees ~650
- New tissue machines
- Rebuilds and machine sections for paper and board machines Value of acquisition EUR ~64 million1
- Spare parts and services 1) plus a conditional and capped earn-out component
• Focus on small and medium-sized tissue machines and board and Operations in Poland, China, USA and Italy
paper machine rebuilds
• The acquisition complements Valmet’s offering and builds further our
local presence especially in Central Europe and China
• Widens Valmet’s portfolio to small and medium-sized tissue machines
• Access to new customer and product segments
• Operations in four countries: Poland, China, USA and Italy
• The acquisition was announced on September 11, 2020 and was
completed on October 1, 2020
61 June 2021 © Valmet | Roadshow presentationValmet strengthened its stable business through acquisitions
Valmet completed the acquisitions of GL&V and J&L Fiber Services in Q2/2019
• GL&V is a supplier of technologies, upgrade and process • J&L Fiber Services is a manufacturer and provider of refiner
optimization services, rebuilds and spare parts for the pulp segments to the pulp, paper and fiberboard industry
and paper industry globally - Most of the employees are located in Wisconsin, U.S, with global
- Focus in chemical pulping, stock preparation, papermaking and operations through a sales representative and distribution network.
finishing
- Key locations in the US and Canada, operations also in Europe, • The acquired business became a part of Valmet's Services
India and South America business line
• Majority of the business is reported in the Services business
line
Key information Approximate split of net sales Key information Approximate split of net sales
4% 3%1% 4% 3%
Net sales in 2018 EUR ~160 million Net sales in 2018 EUR ~30 million 8%
North America North America
21% EMEA 8% EMEA
EBITA margin in 2018 ~11% Asia-Pacific EBITA margin in 2018 ~15% Asia-Pacific
South America South America
Number of employees ~630 China Number of employees ~100 China
71%
77%
Value of acquisition1 EUR ~113 million Value of acquisition1 EUR ~51 million
1) Value on a cash and debt free basis subject to ordinary post-closing adjustments 1) Value on a cash and debt free basis subject to ordinary post-closing adjustments
62 June 2021 © Valmet | Roadshow presentationValmet’s 29.5% ownership in Neles Valmet acquired 29.5% of Neles in 2020 Valmet’s goal is to have an active long-term role in the development of Neles In the long term, combination of Valmet and Neles would create a Nordic based global leader with a unique offering for process industries Valmet and Neles together Stronger margin profile and globally balanced operations Increased share of high-margin and growing stable business including services, automation systems and valves A platform for further growth in automation business Tangible revenue, technology development and cost synergy potential 63 June 2021 © Valmet | Roadshow presentation
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