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Orders received decreased to EUR 826 million and Comparable EBITA increased to EUR 76 million in the second quarter
Half Year Financial Review, January–June 2020
July 23, 2020
Pasi Laine, President and CEO
Kari Saarinen, CFO
Half Year Financial Review, January–June 2020
Agenda
July 23, 2020 © Valmet | Half Year Financial Review, January–June 20202
1
2
4
5
Q2/2020 in brief
Development of the business lines
Financial development
Guidance and short-term market outlook
3 Share acquisition in Neles
Q2/2020 in brief
Q2/2020 in brief
July 23, 2020 © Valmet | Half Year Financial Review, January–June 20204
Order backlog amounted to EUR 3.5 billion
Orders received decreased to EUR 416 million in capital business2
Gearing was -23%
Comparable EBITA increased to EUR 76 million and margin was 8.3%
Orders received decreased to EUR 426 million in stable business1
Net sales remained at the previous year’s level at EUR 919 million
1) Stable business = Services business line and Automation business line. For Automation, this figure includes internal orders received from other business lines.
2) Capital business = Pulp and Energy business line and Paper business line
Valmet agreed to acquire 14.9% of the shares in Neles
Valmet in Q2/2020
July 23, 2020 © Valmet | Half Year Financial Review, January–June 20205
Orders received by area Orders received by business lineOrders received
EUR 826 million
Net sales
EUR 919 million
Comparable EBITA
EUR 76 million
Comparable EBITA margin
8.3%
Order backlog
EUR 3,492 million
Employees
13,626
40%
10%
26%
24%
Services
Automation
Pulp and Energy
Paper
14%
7%
47%
26%
7%
North America
South America
EMEA
China
Asia-Pacific
Orders received decreased to EUR 826 million in Q2/2020
July 23, 2020 © Valmet | Half Year Financial Review, January–June 20206
• In stable business1, orders received decreased to EUR 426 million in Q2/2020
• In capital business, orders received decreased to EUR 416 million in Q2/2020
• Orders received decreased in developed markets and increased in emerging markets during the first half of the year
• South America, China and Asia-Pacific together accounted for 49% of orders received
Orders received (EUR million)
1) Including internal orders received for the Automation business line.
Orders received in Q1–Q2/2020
by area
North America
13%
South America
16%
EMEA39%
China23%
Asia-Pacific10%
1,101
1,023
466 480580
781 725793 803
692788
8571,005
796 743 727890 865
9401,026
835
1,083 1,058 1,009
1,187
826
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q1/1
4
Q2/1
4
Q3/1
4
Q4/1
4
Q1/1
5
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Orders received (LHS) Last 4 quarters (RHS)
Stable business orders received totaled EUR 1,880 million during the last four quarters
July 23, 2020 © Valmet | Half Year Financial Review, January–June 20207
• Total orders received in stable business decreased by EUR 49 million in Q2/2020
1) Including internal orders received for the Automation business line.
Orders received (EUR million) in stable business1
267 273 242 273 293 307252 267
313 321264 284
355 321 284 282346 344
300 325 358 371 335395 398
328
95
78 75
81 88
8087
88103
75 101
93 102
81109
103 10497
112 116
98
267 273242
273293
402
330 342
394 409
344372
443 424
359383
439 445
381
435461 474
433
507 514
426
0
300
600
900
1,200
1,500
1,800
2,100
0
100
200
300
400
500
600
700
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
Services (LHS) Automation, total (including internal) (LHS) Last 4 quarters (RHS)
Order backlog at EUR 3,492 million at the end of Q2/2020
July 23, 2020 © Valmet | Half Year Financial Review, January–June 20208
• Order backlog was EUR 64 million lower than at the end of Q1/2020
• Approximately 45% of the order backlog is currently expected to be realized as net sales during 2020
(at the end of Q2/2019, ~50% during 2019)
• Approximately 30% of the order backlog relates to stable business (~30% at the end of Q2/2019)
Order backlog (EUR million)
Stable business
Capital business
~70%
~30%
Structure of order backlog
1,972
2,4062,312
1,998 2,0642,208
2,117 2,0742,207
2,1062,192
2,283
2,704 2,714 2,720
2,4582,583 2,621
2,791 2,8293,001
3,216
3,4253,333
3,557 3,492
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q1/1
4
Q2/1
4
Q3/1
4
Q4/1
4
Q1/1
5
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Development of the business lines
Services: Orders received and net sales decreased in Q2/2020
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202010
Net sales (EUR million)Orders received (EUR million)
• Orders received decreased compared with Q2/2019
- Orders received increased China, remained at the previous year’s level in Asia-Pacific, and decreased in South
America, North America and EMEA
- Orders received decreased in Mill Improvements, Energy and Environmental, Fabrics, Performance Parts and Rolls
• Net sales decreased compared with Q2/2019
• COVID-19 had a negative impact on orders received and net sales in all service businesses
Q1–Q2/2020:
EUR 726 million
Q1–Q2/2020:
EUR 617 million
Q1–Q2/2019:
EUR 729 million
Q1–Q2/2019:
EUR 637 million
267273
242
273293
307
252267
313321
264284
355
321
284282
346344
300325
358371
335
395398
328
0
200
400
600
800
1,000
1,200
1,400
1,600
0
50
100
150
200
250
300
350
400
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
Orders received (LHS) Orders received, last 4 quarters (RHS)
224251
235
278
242
304
268
314
257
304286
316
252
302284
340
247
325
282
366
276
361336
400
295322
0
200
400
600
800
1,000
1,200
1,400
1,600
0
50
100
150
200
250
300
350
400
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
Net sales (LHS) Net sales, last 4 quarters (RHS)
Automation1: Orders received decreased and net sales remained at the previous year’s level in Q2/2020
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202011
1) Comments refer to orders received and net sales including also internal orders received and internal net sales.
Net sales (EUR million)Orders received (EUR million)
Q1–Q2/2020:
EUR 214 million
Q1–Q2/2020:
EUR 174 million
Q1–Q2/2019:
EUR 206 million
Q1–Q2/2019:
EUR 168 million
• Orders received decreased compared with Q2/2019
- Orders received increased in China and Asia-Pacific, and decreased in South America, North America and EMEA
- Orders received increased in Energy and Process, and decreased in Pulp and Paper
• Net sales remained at the previous year’s level compared with Q2/2019
• COVID-19 caused access restrictions to some customer sites
8570 67 66
82 72 78 7291
62
91 82 8470
94 9582 86 96 92 81
10
8 8 156
79 16
12
13
911 18
11
15 821 12
17 24
16
95
78 7581
8880
87 88
103
75
10193
102
81
109103104
97
112116
98
0
60
120
180
240
300
360
420
480
0
20
40
60
80
100
120
140
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Orders received, internal (from other business lines)Orders received, externalOrders received, total (including internal)Orders received, last 4 quarters (RHS)
68 66
95
5873 65
94
5973
60
104
5976
64
106
6482 75
120
69 77
11 6
6
9
84
5
128
8
11
10
14
9
18
9
1312
17
1117
7972
101
66
8169
99
7280
68
115
69
90
73
124
73
9588
137
80
94
0
60
120
180
240
300
360
420
0
20
40
60
80
100
120
140
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Net sales, internal (from other business lines)Net sales, externalNet sales, total (including internal)Net sales, last 4 quarters (RHS)
• Orders received remained at the previous year’s level compared with Q2/2019
- Orders received increased in EMEA, China and Asia-Pacific, and decreased in South America and North America
- Orders received increased in Energy and decreased in Pulp
• Net sales increased compared with Q2/2019
• COVID-19 caused progress delays in projects and led to some delays in the supply chain network
Pulp and Energy: Orders received remained at the previous year’s level and net sales increased in Q2/2020
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202012
Net sales (EUR million)Orders received (EUR million)
Q1–Q2/2020:
EUR 591 million
Q1–Q2/2020:
EUR 506 million
Q1–Q2/2019:
EUR 411 million
Q1–Q2/2019 :
EUR 372 million
622
560
9666
138
259
206
261238
180
275247265
141122151
192
85
272
451
201210
395
320
376
215
0
200
400
600
800
1,000
1,200
1,400
0
100
200
300
400
500
600
700
Q1/1
4
Q2/1
4
Q3/1
4
Q4/1
4
Q1/1
5
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Orders received (LHS) Orders received, last 4 quarters (RHS)
181229234
312
222231215245
181
262
196187189192200219203205223232
160
212231
315
240265
0
200
400
600
800
1,000
1,200
1,400
0
100
200
300
400
500
600
700
Q1/1
4
Q2/1
4
Q3/1
4
Q4/1
4
Q1/1
5
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Net sales (LHS) Net sales, last 4 quarters (RHS)
• Orders received decreased compared with Q2/2019
- Orders received increased in China and decreased in all other areas
- Orders received increased in Tissue and decreased in Board and Paper
• Net sales remained at the previous year’s level compared with Q2/2019
• COVID-19 caused access restrictions to some customer sites and led to some delays in the supply chain network
Paper: Orders received decreased and net sales remained at the previous year’s level in Q2/2020
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202013
Net sales (EUR million)Orders received (EUR million)
Q1–Q2/2020:
EUR 522 million
Q1–Q2/2020:
EUR 472 million
Q1–Q2/2019:
EUR 601 million
Q1–Q2/2019:
EUR 432 million
212190
128142149
129
197199186
109
176
246
314
243
275
203
270
353
299
156182
419
243
199
321
201
0
150
300
450
600
750
900
1,050
1,200
0
50
100
150
200
250
300
350
400
450
Q1/1
4
Q2/1
4
Q3/1
4
Q4/1
4
Q1/1
5
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Orders received (LHS) Orders received, last 4 quarters (RHS)
114108120
186
97
177185200
157165138
188
144165170
304
223237
196
280
186
246
214
267
217
255
0
150
300
450
600
750
900
1,050
1,200
0
50
100
150
200
250
300
350
400
450
Q1/1
4
Q2/1
4
Q3/1
4
Q4/1
4
Q1/1
5
Q2/1
5
Q3/1
5
Q4/1
5
Q1/1
6
Q2/1
6
Q3/1
6
Q4/1
6
Q1/1
7
Q2/1
7
Q3/1
7
Q4/1
7
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Net sales (LHS) Net sales, last 4 quarters (RHS)
Valmet’s share acquisition in Neles
Valmet’s share acquisition in Neles
Valmet’s acquisition of 14.9% ownership in Neles1
Valmet agreed to acquire approximately 22.4 million shares in Neles Corporation from Solidium Oy, representing 14.88% of all Neles’
shares and votes
Neles is a globally leading diversified valve, valve automation and service company
Neles is a good quality global company with a large share of recurring business and a strong position in the pulp and paper industry
Neles has demonstrated good growth and has potential to grow further
Valmet’s target is to increase ownership when Neles’ share price supports additional purchases
Valmet’s goal is to have an active long-term role in the development of Neles
Valmet’s comment on Alfa Laval’s tender offer for Neles’ shareholders2
Valmet and Neles have a common heritage, serve similar global industries and benefit from same global megatrends
Valmet sees a good amount of value in Neles
Valmet’s target is to participate in developing Neles further
As a Neles shareholder, Valmet does not consider Alfa Laval’s tender offer to be beneficial for Neles
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202015
1) Valmet Oyj’s stock exchange release on June 17, 20202) Valmet Oyj’s press release on July 13, 2020
Financial development
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202017
Key figures
EUR million Q2/2020 Q2/2019 Change Q1–Q2/2020 Q1–Q2/2019 Change
Orders received 826 1,083 -24% 2,013 1,918 5%
Order backlog1 3,492 3,216 9% 3,492 3,216 9%
Net sales 919 901 2% 1,740 1,587 10%
Comparable EBITA 76 69 10% 128 117 10%
% of net sales 8.3% 7.7% 7.4% 7.3%
EBITA 70 64 9% 121 113 6%
Operating profit (EBIT) 62 56 11% 104 99 6%
% of net sales 6.8% 6.2% 6.0% 6.2%
Earnings per share, EUR 0.29 0.26 15% 0.49 0.47 6%
Return on capital employed (ROCE) before taxes2 16% 17%
Cash flow provided by operating activities 151 -44 324 -14
Gearing1 -23% 17%
Items affecting comparability: EUR -6 million in Q2/2020 (EUR -5 million in Q2/2019), EUR -7 million in Q1–Q2/2020 (EUR -3 million in Q1–Q2/2019)
1) At end of period
2) Annualized
Gross profit and SG&A development
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202018
Gross profit (EUR million and % of net sales)
• Gross profit was 23% of net sales (23% in Q2/2019)
• Selling, general & administrative (SG&A) expenses decreased
− SG&A was 16% of net sales (17% in Q2/2019)
SG&A (EUR million and % of net sales)
23%
0%
5%
10%
15%
20%
25%
30%
0
50
100
150
200
250
300
Q1/2
014
Q2/2
014
Q3/2
014
Q4/2
014
Q1/2
015
Q2/2
015
Q3/2
015
Q4/2
015
Q1/2
016
Q2/2
016
Q3/2
016
Q4/2
016
Q1/2
017
Q2/2
017
Q3/2
017
Q4/2
017
Q1/2
018
Q2/2
018
Q3/2
018
Q4/2
018
Q1/2
019
Q2/2
019
Q3/2
019
Q4/2
019
Q1/2
020
Q2/2
020
EUR million (LHS) % of net sales (RHS)
16%
0%
5%
10%
15%
20%
25%
30%
0
50
100
150
200
250
300
Q1/2
014
Q2/2
014
Q3/2
014
Q4/2
014
Q1/2
015
Q2/2
015
Q3/2
015
Q4/2
015
Q1/2
016
Q2/2
016
Q3/2
016
Q4/2
016
Q1/2
017
Q2/2
017
Q3/2
017
Q4/2
017
Q1/2
018
Q2/2
018
Q3/2
018
Q4/2
018
Q1/2
019
Q2/2
019
Q3/2
019
Q4/2
019
Q1/2
020
Q2/2
020
EUR million (LHS) % of net sales (RHS)
Target 10-12%
Comparable EBITA margin1 development
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202019
Net sales and Comparable EBITA, rolling 12 months (EUR million and %)1
• In Q2/2020, Comparable EBITA increased compared with Q2/2019
- Comparable EBITA increased due to lower selling, general & administrative (SG&A) expenses
Comparable EBITA,
rolling 12 months
(EUR million)
121 153 167 182 19433 32 33 106 197 202 196 199 190 194 218 206 219 225 257
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.
282 291 311 316 320
1,010 1,005 984 989 1,0071,127
1,2261,357 1,429 1,434 1,451 1,453 1,450 1,447 1,441 1,474 1,469 1,496 1,497 1,525 1,559 1,601 1,666 1,715 1,739 1,695
1,490 1,369 1,378 1,484 1,5081,579
1,6251,572 1,591 1,610 1,544 1,473 1,469 1,399 1,435 1,584 1,676 1,762 1,811 1,799 1,720 1,736 1,762 1,832 1,942 2,005
2,5002,374 2,363
2,473 2,5152,707
2,851 2,9283,019 3,044 2,995 2,926 2,919 2,846 2,876
3,0583,145
3,257 3,308 3,325 3,279 3,3373,429
3,5473,682 3,700
1.3% 1.3% 1.4%
4.3%4.8%
5.6% 5.9%6.2% 6.4% 6.5%
6.8% 6.7% 6.8% 6.7% 6.7%7.1%
6.6% 6.7% 6.8%
7.7%
8.6% 8.7%9.1% 8.9% 8.7% 8.8%
Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q3/15Q4/15Q1/16Q2/16Q3/16Q4/16Q1/17Q2/17Q3/17Q4/17Q1/18Q2/18Q3/18Q4/18Q1/19Q2/19Q3/19Q4/19Q1/20Q2/20
Capital business, rolling12 months
Stable business, rolling12 months
Comparable EBITA %,rolling 12 months
327
Cash flow provided by operating activities
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202020
• Change in net working capital1 EUR 57 million in Q2/2020
• Cash flow provided by operating activities EUR 151 million in Q2/2020
• CAPEX2 EUR 27 million in Q2/2020
Cash flow provided by operating activities (EUR million)
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 business combinations and leased assets.
2014:
EUR 236 million
2016:
EUR 246 million
2015:
EUR 78 million
2017:
EUR 291 million2018:
EUR 284 million
2019:
EUR 295 million
Q1–Q2/2020:
EUR 324 million
43 46
117
30
-20
17 1664
3 33
122
88 94
31
7889
19 3
119143
30
-44
126
182 173151
-100
-50
0
50
100
150
200
Q1/2
01
4
Q2/2
01
4
Q3/2
01
4
Q4/2
01
4
Q1/2
01
5
Q2/2
01
5
Q3/2
01
5
Q4/2
01
5
Q1/2
01
6
Q2/2
01
6
Q3/2
01
6
Q4/2
01
6
Q1/2
01
7
Q2/2
01
7
Q3/2
01
7
Q4/2
01
7
Q1/2
01
8
Q2/2
01
8
Q3/2
01
8
Q4/2
01
8
Q1/2
01
9
Q2/2
01
9
Q3/2
01
9
Q4/2
01
9
Q1/2
02
0
Q2/2
02
0
Net working capital at -16% of rolling 12 months orders received
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202021
• Net working capital EUR -644 million, which equals -16% of rolling 12 months orders received
Net working capital1 and orders received (EUR million)
1) Net working capital excluding non-cash net working capital impact from dividend liability.
-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
1,1011,023
466 480580
781 725 793 803692
788 8571,005
796 743 727890 865
9401,026
835
1,083 1,058 1,0091,187
826
-20%
-10%
0%
10%
20%
30%
-1,000
-500
0
500
1,000
1,500
Q1/2
01
4
Q2/2
01
4
Q3/2
01
4
Q4/2
01
4
Q1/2
01
5
Q2/2
01
5
Q3/2
01
5
Q4/2
01
5
Q1/2
01
6
Q2/2
01
6
Q3/2
01
6
Q4/2
01
6
Q1/2
01
7
Q2/2
01
7
Q3/2
01
7
Q4/2
01
7
Q1/2
01
8
Q2/2
01
8
Q3/2
01
8
Q4/2
01
8
Q1/2
01
9
Q2/2
01
9
Q3/2
01
9
Q4/2
01
9
Q1/2
02
0
Q2/2
02
0
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 debt and gearing decreased compared with Q2/2019
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202022
Net debt (EUR million) and gearing (%) Equity to assets ratio (%)
• Gearing (-23%) and net debt (EUR -223 million) decreased compared with Q2/2019
• Equity to assets ratio remained at the previous year’s level compared with Q2/2019
• Valmet paid out 105 million in dividends in Q2/20201
Valmet implemented IFRS 16 – Leases as of January 1, 2019 by applying the simplified transition method and therefore 2018 figures are not restated.
1) The dividends paid do not include the cash flow impact from withholding tax of EUR 15 million, which will be paid in the third quarter 2020.
-166
178
52
-100 -102-4
-98
-219
-174
152
60
-90
-220 -223
-21%
21%
6%
-11%-12%
0%
-11%
-23%
-20%
17%
6%
-9%
-22% -23%
-30%
-20%
-10%
0%
10%
20%
30%
-300
-200
-100
0
100
200
300
20
14
20
15
20
16
20
17
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0Net debt Gearing
42%
36% 37%
42%39%
41%43% 43%
37% 38% 38%41% 41%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
20
14
20
15
20
16
20
17
Q1/1
8
Q2/1
8
Q3/1
8
Q4/1
8
Q1/1
9
Q2/1
9
Q3/1
9
Q4/1
9
Q1/2
0
Q2/2
0
Capital employed and Comparable ROCE
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202023
• Target for Comparable return on capital employed (ROCE): 15–20%
Capital employed (EUR million) and Comparable return on capital employed (ROCE), before taxes1 (%)
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.
985 967902 877
1,239 1,240 1,214 1,2311,184 1,194 1,167
1,195
1,112 1,138 1,141 1,137
1,033 1,0491,079
1,150
1,2371,195
1,239
1,3141,256
1,327
1%2% 2%
10% 10%
12%
14% 14%13%
12%
14%13%
14%13%
14%
16% 16%17%
18%
20%
22%
23%24%
23% 23% 23%
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
Capital employed Comparable ROCE (before taxes), rolling 12 months
Guidance and short-term market outlook
Guidance and short-term market outlook
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202025
GoodPulp and Energy
Paper
Good
Pulp
Energy
Board and Paper
Tissue
Guidance
Services
Short-term market outlook
Guidance for 2020
Good
Satisfactory
Good
Satisfactory
Good
Good
Satisfactory
Good
Satisfactory
Q3/2019 Q4/2019
Satisfactory / Weak
Good
Satisfactory
Good
Satisfactory
Q1/2020
Satisfactory / Weak
Satisfactory
Good
Satisfactory
Q2/2020
Valmet announced on April 16, 2020 that the company withdraws its guidance for 2020 due to increased
uncertainty related to the COVID-19 pandemic.
Good Good Good / Satisfactory Good / SatisfactoryAutomation
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’.
July 23, 2020 © Valmet | Half Year Financial Review, January–June 202026
Interim Review January–September 2020
October 27, 2020
www.valmet.com/investors
Important notice
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The Information is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would
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The Information does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase any securities, and nothing contained therein shall form the basis of or be
relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding any securities. Prospective investors are required to make their own independent investigations and
appraisals of the business and financial condition of the Company before taking any investment decision with respect to securities of the Company.
No securities of the Company are being offered or sold, directly or indirectly, in or into the United States and no shares in the Company have been, or will be, registered under the Securities Act of 1933, as amended (the
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The Information is directed solely at: (i) persons outside the United Kingdom, (ii) persons with professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act
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The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forward-looking statements give the Company’s
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by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar
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July 23, 2020 © Valmet | Half Year Financial Review, January–June 202027
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