orders received increased in paper and ... - valmet.com · orders received increased in paper and...

Orders received increased in Paper and Services –Comparable EBITA increased

Half Year Financial Review,

January–June 2018

July 25, 2018

Pasi Laine, President and CEO

Kari Saarinen, CFO

Half Year Financial Review, January–June 2018

Agenda

July 25, 2018 © Valmet | Half Year Financial Review, January–June 20182

1

2

3

5

6

4

Q2/2018 in brief

Development of the business lines

Financial development

Summary of Q2/2018

Appendix

Guidance and short-term market outlook

Q2/2018 in brief

Q2/2018 in brief


Order backlog remained at the previous year’s level at EUR 2.6 billion

Orders received increased to EUR 438 million in capital business2

2017 financials have been restated following the adoption of IFRS 15.

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

Gearing was 0%

Comparable EBITA increased to EUR 61 million and margin was 7.2%

Orders received increased to EUR 445 million in stable business1

Net sales increased to EUR 844 million

Valmet in Q2/2018


Orders received by area Orders received by business lineOrders received

EUR 865 million

Net sales

EUR 844 million

Comparable EBITA

EUR 61 million

Comparable EBITA margin

7.2%

Employees

12,668

40%

10%10%

41%

Services

Automation

Pulp and Energy

Paper

15%

7%

49%

23%

6%

North America

South America

EMEA

China

Asia-Pacific

1,1011,023

466 480580

781 725 793 803692

788 8571,005

796 743 727890 865

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

200

400

600

800

1,000

1,200

1,400

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

Orders received (LHS) Last 4 quarters (RHS)

Orders received increased to EUR 865 million in Q2/2018


• In stable business, orders received increased to EUR 445 million in Q2/2018

• In capital business, orders received increased to EUR 438 million in Q2/2018

• EMEA and North America accounted for 67% of orders received during first half of the year

Orders received (EUR million) Orders received in Q1–Q2/2018 by area

North America

23%

South America

6%

EMEA45%

China17%

Asia-Pacific9%

267 273 242 273 293 307252 267

313 321264 284

355321

284 282346 344

95

78 75

81 88

8087

88103

75 101

93 102

267 273242

273293

402

330 342

394 409

344372

443424

359383

439 445

0

300

600

900

1,200

1,500

1,800

0

100

200

300

400

500

600

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

Services (LHS) Automation, total (including internal) (LHS) Last 4 quarters (RHS)

Stable business orders received totaled EUR 1,626 million during the last four quarters


• In Q2/2018, total orders received in stable business increased

1) Including internal orders received for the Automation business line.

Orders received (EUR million) in stable business1

1,972

2,4062,312

1,9982,064

2,2082,117 2,074

2,2072,106

2,1922,283

2,704 2,714 2,720

2,4582,583 2,621

0

500

1,000

1,500

2,000

2,500

3,000

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

Order backlog at EUR 2,621 million at the end of Q2/2018


• Order backlog was EUR 37 million higher than at the end of Q1/2018

• Approximately 55% of the order backlog is currently expected to be recognized as net sales during 2018

• Approximately 30% of the order backlog relates to stable business

Order backlog (EUR million)

~30%

~70%

Stable business Capital business

Structure of order backlog

Development of the business lines

267 273242

273293

307

252267

313 321

264284

355321

284 282

346 344

0

200

400

600

800

1,000

1,200

1,400

1,600

0

50

100

150

200

250

300

350

400

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

Orders received (LHS) Orders received, last 4 quarters (RHS)

224251

235

278

242

304

268

314

257

304286

316

252

302284

340

247

325

0

200

400

600

800

1,000

1,200

1,400

1,600

0

50

100

150

200

250

300

350

400

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

Net sales (LHS) Net sales, last 4 quarters (RHS)

Services: Orders received and net sales increased


Net sales (EUR million)Orders received (EUR million)

• Orders received increased compared with Q2/2017

- Orders received increased in EMEA and China, remained at the previous year’s level in North America and decreased

in South America and Asia-Pacific

- Orders received increased in Performance Parts, Rolls, and Energy and Environmental, and remained at the previous

year’s level in Mill Improvements, and Fabrics

• Net sales increased compared with Q2/2017

Q1–Q2/2018:

EUR 690 million

Q1–Q2/2018:

EUR 572 million

Q1–Q2/2017:

EUR 676 million

Q1–Q2/2017:

EUR 554 million

Automation1: Orders received remained at the previous years level and net sales increased


1) Comments refer to orders received and net sales including also internal orders received and net sales.2) Q1/2015 orders received and the underlying figures for ‘Orders received, last 4 quarters’ and ‘Net sales, last 4 quarters’ are calculated based on Metso’s reported figures and pro forma figures excluding Process Automation Systems and are

therefore indicative only.

Net sales2 (EUR million)Orders received2 (EUR million)

Q1–Q2/2018:

EUR 195 million

Q1–Q2/2018:

EUR 159 million

Q1–Q2/2017:

EUR 192 million

Q1–Q2/2017:

EUR 152 million

• Orders received remained at the previous year’s level

- Orders received increased in South America, remained at the previous year’s level in EMEA and Asia-Pacific, and

decreased in China and North America

- Orders received increased in Energy and Process and decreased in Pulp and Paper


6285

70 67 6682

72 78 7291

62

91 82 84

10

8 8 156

79 16

12

13

911

18

62

95

78 7581

8880

87 88

103

75

10193

102

0

75

150

225

300

375

450

0

20

40

60

80

100

120

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

Orders received, internal (from other business lines)Orders received, externalOrders received, total (including internal)Orders received, last 4 quarters (RHS)

5568 66

95

5873 65

94

5973

60

104

5976

11 6

6

9

84

5

12

8

8

11

10

14

55

7972

101

66

81

69

99

7280

68

115

69

90

0

75

150

225

300

375

450

0

20

40

60

80

100

120

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

Net sales, internal (from other business lines)Net sales, externalNet sales, total (including internal)Net sales, last 4 quarters (RHS)

622

560

9666

138

259206

261 238180

275247 265

141 122151

192

85

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


181229 234

312

222 231 215245

181

262

196 187 189 192 200 219 203 205

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


• Orders received decreased compared with Q2/2017

- Orders received increased in North America, and decreased in the other regions

- Orders received increased in Pulp and decreased in Energy


Pulp and Energy: Orders received decreased and net sales increased



Q1–Q2/2018:

EUR 278 million

Q1–Q2/2018:

EUR 408 million

Q1–Q2/2017:

EUR 406 million

Q1–Q2/2017:

EUR 381 million

212190

128142 149

129

197 199 186

109

176

246

314

243275

203

270

353

0

150

300

450

600

750

900

1,050

1,200

0

50

100

150

200

250

300

350

400

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


114 108 120

186

97

177 185200

157 165138

188

144165 170

304

223237

0

150

300

450

600

750

900

1,050

1,200

0

50

100

150

200

250

300

350

400

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


• Orders received increased compared with Q2/2017

- Orders received increased in South America, EMEA and China, remained at the previous year’s level in North

America, and decreased in Asia-Pacific

- Orders received increased in Board and Paper, and decreased in Tissue


Paper: Orders received and net sales increased



Q1–Q2/2018:

EUR 623 million

Q1–Q2/2018:

EUR 460 million

Q1–Q2/2017:

EUR 557 million

Q1–Q2/2017:

EUR 310 million

Financial development


Key figures

EUR million Q2/2018 Q2/2017 Change Q1–Q2/2018 Q1–Q2/2017 Change

Orders received 865 796 9% 1,756 1,802 -3%

Order backlog1 2,621 2,714 -3% 2,621 2,714 -3%

Net sales 844 732 15% 1,575 1,376 14%

Comparable EBITA 61 48 27% 82 82 1%

% of net sales 7.2% 6.5% 5.2% 5.9%

EBITA 57 47 22% 76 84 -10%

Operating profit (EBIT) 49 39 27% 61 68 -10%

% of net sales 5.9% 5.3% 3.9% 4.9%

Earnings per share, EUR 0.23 0.18 32% 0.29 0.30 -4%

Return on capital employed (ROCE) before taxes2 11% 11%

Cash flow provided by operating activities 3 31 -91% 22 125 -83%

Gearing1 0% 4%

Items affecting comparability: EUR -4 million in Q2/2018 (EUR -1 million in Q2/2017), EUR -7 million in Q1–Q2/2018 (EUR 2 million in Q1–Q2/2017)

1) At the end of period

2) Annualized. In the calculation of 2017 figures, data points from 2016 that have not been restated have been used.

23%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

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

EUR million (LHS) % of net sales (RHS)

16%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

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

EUR million (LHS) % of net sales (RHS)

Gross profit and SG&A development


Gross profit (EUR million and % of net sales)

• Gross profit was 23% of net sales (24% in Q2/2017)

− Capital business had a higher share of net sales in Q2/2018

• Selling, general & administrative (SG&A) expenses increased by EUR 1 million

− SG&A was 16% of net sales (19% in Q2/2017)

SG&A (EUR million and % of net sales)

224251 235

278242

371334

409

314377

351411

311374

345

444

306

401

295337 354

498319

408400

445

338427

334375

333357

370

523

426

442

519

588 590

777

561

779734

854

652

804

685

785

645

732 715

967

732

844

0.7%

3.7%5.5%

6.1%

3.5%

6.9%6.4%

7.3%

4.8%

7.1%

7.5%

7.2%5.3% 6.5%

7.8%

8.4%

3.0%

7.2%


Capital business

Stable business

Comparable EBITA %

Target 8–10%

Comparable EBITA margin development


Net sales and Comparable EBITA (EUR million and %)

• Net sales and Comparable EBITA increased compared with Q2/2017

- Profitability improved due to higher net sales

Comparable EBITA

(EUR million)19 54 47 63 314 22 32 48 57 52 56 34 48 56 81 22 61

43 46

117

30

-20

17 16

64

333

122

88 94

31

7889

19 3

-40

-20

0

20

40

60

80

100

120

140

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

Cash flow provided by operating activities


• Change in net working capital1 EUR -27 million in Q2/2018

• Cash flow provided by operating activities EUR 3 million in Q2/2018

• CAPEX EUR 20 million in Q2/2018

Cash flow provided by operating activities (EUR million)

1) Change in net working capital in the consolidated statement of cash flows.

2016:

EUR 246 million

2014:

EUR 236 million

2015:

EUR 78 million

2017:

EUR 291 million

Q1–Q2/2018:

EUR 22 million

-235 -249 -345 -353 -317 -265 -244 -238 -194 -181 -265 -294 -378 -335 -370 -387 -384 -362

1,1011,023

466 480580

781 725 793 803692

788 8571,005

796 743 727890 865

-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

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 at -11% of rolling 12 months orders received


• Net working capital EUR -362 million, which equals -11% of rolling 12 months orders received

Net working capital and orders received (EUR million)

Net working capital excluding non-cash net working capital impact from dividend liability.

-166

178 192

231

126

52

-27

31

-30-100 -102

-4

-21%

21%24%

27%

15%

6%

-3%

4%

-3%

-11% -12%

0%

-30%

-20%

-10%

0%

10%

20%

30%

-300

-200

-100

0

100

200

300

20

14

20

15

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

Net debt Gearing

42%

36% 35% 36%38% 37%

39%41% 41% 42%

39%41%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

20

14

20

15

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

Net debt decreased compared with Q2/2017


Net debt (EUR million) and gearing (%) Equity to assets ratio (%)

• Gearing (0%) and net debt (EUR -4 million) increased compared with Q1/2018 due to dividend payout of EUR 82 million

• Equity to assets ratio remained at the same level as in Q2/2017

Automation acquisition was completed on April 1, 2015.

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 1,049

1%2% 2%

10% 10%

12%

14% 14%13%

12%

14%13%

14%13%

14%

16%

16%17%


Capital employed Comparable ROCE (before taxes), rolling 12 months

Target

15–20%

Capital employed and Comparable ROCE


• Target for Comparable return on capital employed (ROCE): 15–20%

Capital employed (EUR million) and Comparable return on capital employed (ROCE), before taxes1 (%)

1) Rolling 12 months. Carve-out figures for 2013 have been used in the calculation of Q1–Q3/2014 figures. In the calculation of 2017 figures, data points from 2016 that have not been restated have been used.



WeakPulp and Energy

Paper

Good

Pulp

Energy

Board and Paper

Tissue

Guidance

Services

Short-term market outlook

Guidance for 2018 (as announced on July 17, 2018)

Weak

Satisfactory

Good

Good

Good

Weak

Satisfactory

Good

Good

Q3/2017 Q4/2017

Good

Weak

Satisfactory

Good

Good

Q1/2018

Good

Satisfactory

Good

Good

Q2/2018

Valmet estimates that net sales in 2018 will increase in comparison with 2017 (EUR 3,058 million) and

Comparable EBITA in 2018 will increase in comparison with 2017 (EUR 218 million).

Satisfactory Good Good GoodAutomation

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’.

Summary of Q2/2018

Q2/2018 in brief


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

Order backlog remained at the previous year’s level at EUR 2.6 billion

Orders received increased to EUR 438 million in capital business2

Gearing was 0%

Comparable EBITA increased to EUR 61 million and margin was 7.2%

Orders received increased to EUR 445 million in stable business1

Net sales increased to EUR 844 million

Appendix

Interest-bearing debt EUR 201 million as at June 30, 2018

Structure of loans and borrowings


Amount of outstanding interest-bearing debt

(EUR million)

• Average maturity of long-term loans is 3.7 years- Average interest rate is 1.3%

Loans from banks and

financial institutions

EUR 200 millioncommitted syndicated revolving

credit facility1

EUR 201 million

None outstanding

None outstanding

Source Amount outstanding

EUR 200 milliondomestic commercial

paper program

1) EUR 200 million syndicated revolving credit facility agreement matures on

January 14, 2023 with a 1-year extension option.

Main financing sources and facilities

0

50

100

150

200

250

2017 2018 2019 2020 2021 2022 2023 2024 2025

Based on the information given by Euroclear Finland Ltd.

Largest shareholders on June 30, 2018


# Shareholder name Number of shares % of shares and votes

1 Solidium Oy1 16,695,287 11.14%

2 Varma Mutual Pension Insurance Company 4,165,465 2.78%

3 Elo Pension Company 3,600,000 2.40%

4 Ilmarinen Mutual Pension Insurance Company 3,416,000 2.28%

5 OP Funds 2,305,691 1.54%

6 The State Pension Fund 1,545,000 1.03%

7 Keva 1,502,166 1.00%

8 Nordea Funds 1,181,077 0.79%

9 Evli Funds 1,147,326 0.77%

10 Mandatum Life Insurance Company Limited 1,022,537 0.68%

10 largest shareholders, total 36,580,549 24.41%

Other shareholders 113,284, 070 75.59%

Total 149,864,619 100%

Largest shareholders

1) A holding company that is wholly owned by the Finnish State

Shareholder structure on June 30, 2018


1) Of which 71,699,313 nominee registered shares

2) A holding company that is wholly owned by the Finnish State

The shareholder structure is based on the classification of sectors determined by Statistics Finland.

Sector Number of shareholders % of total shareholders Number of shares % of shares

Nominee registered and non-Finnish holders1 329 0.7% 74,166,597 49.5%

Finnish institutions, companies and foundations 2,414 5.3% 38,846,778 25.9%

Solidium Oy2 0 0.0% 16,695,287 11.1%

Finnish private investors 43,085 94.0% 20,147,877 13.4%

On the issuer account 0 0.0% 8,080 0.0%

Total 45,828 100.0 % 149,864,619 100.0%

Nominee registered and non-Finnish holders 49.5%

Solidium Oy 11.1%

Finnish private investors 13.4%

Finnish institutions, companies and foundations 25.9%

Share of non-Finnish holders and number of shareholders


43,000

45,000

47,000

49,000

51,000

53,000

55,000

57,000

59,000

42%

44%

46%

48%

50%

52%

54%

56%

01/2

01

4

04/2

01

4

07/2

01

4

10/2

01

4

01/2

01

5

04/2

01

5

07/2

01

5

10/2

01

5

01/2

01

6

04/2

01

6

07/2

01

6

10/2

01

6

01/2

01

7

04/2

01

7

07/2

01

7

10/2

01

7

01/2

01

8

04/2

01

8

Non-Finnish holders (LHS) Total number of shareholders (RHS)

Pulp and paper price trends

Source: Bloomberg


200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300Ja

n-1

3

Mar-

13

May-1

3

Jul-

13

Sep-1

3

Nov-

13

Jan

-14

Mar-

14

May-1

4

Jul-

14

Sep-1

4

Nov-

14

Jan

-15

Mar-

15

May-1

5

Jul-

15

Sep-1

5

Nov-

15

Jan

-16

Mar-

16

May-1

6

Jul-

16

Sep-1

6

Nov-

16

Jan

-17

Mar-

17

May-1

7

Jul-

17

Sep-1

7

Nov-

17

Jan

-18

Mar-

18

May-1

8

Jul-

18

Northern bleached softwood pulp (USD/t) Copy paper (EUR/t) Testliner (EUR/t)

Europe

Crude oil, steam coal, natural gas and electricity


0

20

40

60

80

100

120

140

Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18

CIF ARA steam coal (USD/t) Brent crude oil (USD/barrel) Natural gas spot price NBP (GBP/therm)

-20

0

20

40

60

80

100

Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18

European Energy Exchange, Phelix (EUR/MWh) Nordpool Power (EUR/MWh) UK Baseload (GBP/MWh)

United States

Crude oil, steam coal, natural gas and electricity


1

2

3

4

5

6

20

40

60

80

100

120

FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS)

65

70

75

80

85

0

50

100

150

200

250

Electricity spot price, PJM (USD/MWh) (LHS) Electricity spot price, NEPOOL (USD/MWh) (LHS) US utility capacity utilization rate, % (RHS)

European Carbon Emission Allowance


0

2

4

6

8

10

12

14

16

18

Jan-1

3

Ma

r-1

3

Ma

y-13

Jul-1

3

Sep

-13

Nov-1

3

Jan-1

4

Ma

r-1

4

Ma

y-14

Jul-1

4

Sep

-14

Nov-1

4

Jan-1

5

Ma

r-1

5

Ma

y-15

Jul-1

5

Sep

-15

Nov-1

5

Jan-1

6

Ma

r-1

6

Ma

y-16

Jul-1

6

Sep

-16

Nov-1

6

Jan-1

7

Ma

r-1

7

Ma

y-17

Jul-1

7

Sep

-17

Nov-1

7

Jan-1

8

Ma

r-1

8

Ma

y-18

Jul-1

8

European Energy Exchange (EEX) spot price (EUR/t)

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 accessing the Information, you agree to be bound by the following terms and conditions.

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

be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Information is not for publication, release or distribution in the United States, the United Kingdom, Australia,

Canada or Japan.

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

“Securities Act”), or under the securities laws of any state of the United States and, accordingly, may not be offered or sold, directly or indirectly, in or into the United States (as defined in Regulation S under the Securities

Act), unless registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable state securities laws of the United States.

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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any member of its group may otherwise lawfully be communicated or caused to be communicated (all such persons in (i)-(iv) above being “Relevant Persons”). Any investment activity to which the Information relates will

only be available to and will only be engaged with Relevant Persons. Any person who is not a Relevant Person should not act or rely on the Information. By accessing the Information, you represent that you are a Relevant

Person.

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

current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded

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

meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results,

performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on

numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future.

No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Information or the opinions contained therein.

The Information has not been independently verified and will not be updated. The Information, including but not limited to forward-looking statements, applies only as of the date of this document and is not intended to give

any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Information, including any financial data or forward-looking statements,

and will not publicly release any revisions it may make to the Information that may result from any change in the Company’s expectations, any change in events, conditions or circumstances on which these forward-looking

statements are based, or other events or circumstances arising after the date of this document. Market data used in the Information not attributed to a specific source are estimates of the Company and have not been

independently verified.


January–September 2018 Interim Review

October 23, 2018

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