2017-10-24 11:00:19 CEST
2017-10-24 11:00:19 CEST
SÄÄNNELTY TIETO
Valmet Corporation - Interim report (Q1 and Q3)
Valmet's Interim Review January 1 - September 30, 2017: Growth continued in the Paper business line - Valmet's profitability improved
Valmet Oyj's stock exchange release on October 24, 2017 at 12:00 noon EET
Figures in brackets, unless otherwise stated, refer to the comparison period,
i.e. the same period of the previous year.
July-September 2017: Comparable EBITA margin increased to 7.9 percent
* Orders received decreased to EUR 743 million (EUR 788 million).
* Orders received increased in the Paper and Services business lines and
decreased in the Pulp and Energy, and Automation business lines.
* Orders received increased in China and South America and decreased in
North America, Asia-Pacific and EMEA (Europe, Middle East and Africa).
* Net sales increased to EUR 748 million (EUR 685 million).
* Net sales increased in the Paper, and Pulp and Energy business lines,
remained at the previous year's level in the Services business line and
decreased in the Automation business line.
* Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 59 million (EUR 52 million) and the corresponding Comparable
EBITA margin was 7.9 percent (7.5%).
* Profitability improved due to higher net sales and lower selling,
general and administrative expenses.
* Earnings per share were EUR 0.20 (EUR 0.17).
* Items affecting comparability amounted to EUR -6 million (EUR -2 million).
* Cash flow provided by operating activities was EUR 78 million (EUR 122
million).
January-September 2017: Orders received increased 11 percent
* Orders received increased to EUR 2,544 million (EUR 2,282 million).
* Orders received increased in the Paper and Services business lines,
remained at the previous year's level in the Automation business line
and decreased in the Pulp and Energy business line.
* Orders received increased in China, Asia-Pacific and North America and
decreased in South America and EMEA.
* Net sales remained at the previous year's level at EUR 2,223 million (EUR
2,141 million).
* Net sales increased in the Paper business line and remained at the
previous year's level in the other business lines.
* Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 150 million (EUR 140 million), and the corresponding
Comparable EBITA margin was 6.8 percent (6.5%).
* Profitability improved due to higher gross profit and lower selling,
general and administrative expenses.
* Earnings per share were EUR 0.54 (EUR 0.46).
* Items affecting comparability amounted to EUR -5 million (EUR -5 million).
* Cash flow provided by operating activities was EUR 203 million (EUR 158
million).
Valmet reiterates its guidance for 2017
Valmet reiterates its guidance presented on April 12, 2017, in which Valmet
estimates that net sales in 2017 will increase in comparison with 2016 (EUR
2,926 million) and Comparable EBITA in 2017 will increase in comparison with
2016 (EUR 196 million).
Short-term outlook
General economic outlook
The global upswing in economic activity is strengthening, with global growth
projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018. Broad-based
upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and
Russia more than offset downward revisions for the United States and the United
Kingdom. While the baseline outlook is strengthening, growth remains weak in
many countries, and inflation is below target in most advanced economies. And
while short-term risks are broadly balanced, medium-term risks are still tilted
to the downside. (International Monetary Fund, October 10, 2017)
Short-term market outlook
Valmet estimates that the short-term market outlook has decreased to a
satisfactory level in energy (previously good level).
Valmet reiterates the good short-term market outlook for services, board and
paper, and tissue, the satisfactory short-term market outlook for automation,
and the weak short-term market outlook for pulp.
President and CEO Pasi Laine: Continued growth in the Paper business line and
improvement in profitability
"The market activity has been high especially in the Paper business line, where
orders received for the last 12 months exceed EUR 1 billion. Both Board and
Paper, and Tissue have enjoyed exceptionally high levels of activity, and
particularly China, followed by North America and EMEA, have been good markets
for us. In addition to the Paper business line, we have been able to grow orders
received in our stable business, meaning Services and Automation business lines.
In January-September, Valmet's orders received have increased by 11 percent.
In the third quarter of 2017, Valmet's Comparable EBITA margin was 7.9 percent.
This is the highest quarterly margin since becoming an independent company, and
close to the lower end of our long-term margin target of 8-10 percent. However,
the 6.8 percent margin for the first nine months of the year shows that there is
still room for improvement.
Valmet was included in the Dow Jones Sustainability Index (DJSI) for the fourth
consecutive year and reconfirmed as a constituent of the Ethibel Sustainability
Index Excellence Europe. These achievements indicate Valmet's strong focus and
consistent progress in sustainability. Inclusion in these indices is an
acknowledgement to our 12,000 employees globally, as our world-leading
sustainability performance is the result of their daily work. Sustainability is
at the core of Valmet's business, and we will continue the systematic work
through our sustainability agenda."
Key figures(1)
Q3/2017 Q3/2016 Change Q1-Q3/ Q1-Q3/ Change
EUR million 2017 2016
-------------------------------------------------------------------------------
Orders received 743 788 -6% 2,544 2,282 11%
Order backlog(2) 2,523 2,192 15% 2,523 2,192 15%
Net sales 748 685 9% 2,223 2,141 4%
Comparable earnings before
interest, taxes and amortization 59 52 15% 150 140 8%
(Comparable EBITA)
% of net sales 7.9% 7.5% 6.8% 6.5%
Earnings before interest, taxes 53 49 7% 146 135 8%
and amortization (EBITA)
% of net sales 7.0% 7.2% 6.6% 6.3%
Operating profit (EBIT) 45 41 9% 122 107 14%
% of net sales 6.0% 6.0% 5.5% 5.0%
Profit before taxes 41 38 10% 113 98 15%
Profit / loss 30 26 15% 81 69 19%
Earnings per share, EUR 0.20 0.17 14% 0.54 0.46 19%
Earnings per share, diluted, EUR 0.20 0.17 14% 0.54 0.46 19%
Equity per share, EUR 5.95 5.68 5% 5.95 5.68 5%
Cash flow provided by operating 78 122 -36% 203 158 29%
activities
Cash flow after investments 62 108 -42% 157 116 36%
Return on equity (ROE) 12% 11%
(annualized)
Return on capital employed (ROCE) 14% 12%
before taxes (annualized)
(1) The calculation of key figures is presented on page 39.
(2 )At the end of period.
Equity to assets ratio and As at As at As at June 30, 2017
gearing Sep 30, 2017 Sep 30, 2016
-------------------------------------------------------------------------------
Equity to assets ratio at end 38% 38% 38%
of period
Gearing at end of period -3% 15% 4%
Q3/2017 Q3/2016 Change Q1-Q3/ Q1-Q3/ Change
Orders received, EUR million 2017 2016
-------------------------------------------------------------------------
Services 284 264 7% 960 898 7%
Automation 62 72 -14% 225 221 2%
Pulp and Energy 122 275 -56% 527 692 -24%
Paper 275 176 56% 832 472 76%
-------------------------------------------------------------------------
Total 743 788 -6% 2,544 2,282 11%
-------------------------------------------------------------------------
As at As at Change As at
Sep 30, 2017 Sep 30, 2016 June 30,
Order backlog, EUR million 2017
---------------------------------------------------------------------
Total 2,523 2,192 15% 2,551
---------------------------------------------------------------------
Q3/2017 Q3/2016 Change Q1-Q3/ Q1-Q3/ Change
Net sales, EUR million 2017 2016
-------------------------------------------------------------------
Services 284 286 0% 838 846 -1%
Automation 60 65 -7% 192 196 -2%
Pulp and Energy 220 196 12% 669 640 5%
Paper 184 138 33% 523 459 14%
-------------------------------------------------------------------
Total 748 685 9% 2,223 2,141 4%
-------------------------------------------------------------------
News conference and webcast for analysts, investors and media
Valmet will arrange a news conference in English for analysts, investors, and
media on Tuesday, October 24, 2017 at 2:00 p.m. Finnish time (EET). The news
conference will be held at Valmet Head Office in Keilaniemi, Keilasatama
5, 02150 Espoo, Finland. The news conference can also be followed through a live
webcast at www.valmet.com/webcasts.
It is also possible to take part in the news conference through a conference
call. Conference call participants are requested to dial in at least five
minutes prior to the start of the conference, at 1:55 p.m. (EET), at
+44 1452 555566. The participants will be asked to provide the following
conference ID: 97157167.
During the webcast and the conference call, all questions should be presented in
English. After the webcast and the conference call, media has a possibility to
interview the management in Finnish.
The event can also be followed on Twitter at www.twitter.com/valmetir.
Further information, please contact:
Calle Loikkanen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
Kari Saarinen, CFO, Valmet, tel. +358 10 672 9603
VALMET
Kari Saarinen
CFO
Calle Loikkanen
Director, Investor Relations
Valmet is the leading global developer and supplier of process technologies,
automation and services for the pulp, paper and energy industries. We aim to
become the global champion in serving our customers.
Valmet's strong technology offering includes pulp mills, tissue, board and paper
production lines, as well as power plants for bioenergy production. Our advanced
services and automation solutions improve the reliability and performance of our
customers' processes and enhance the effective utilization of raw materials and
energy.
Valmet's net sales in 2016 were approximately EUR 2.9 billion. Our 12,000
professionals around the world work close to our customers and are committed to
moving our customers' performance forward - every day. Valmet's head office is
in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.
Read more www.valmet.com, www.twitter.com/valmetglobal
Follow Valmet IR on Twitter www.twitter.com/valmetir
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