Published:

2015-10-28 11:00:00 CET

Registered:

2015-10-28 11:00:53 CET

REGULATED INFORMATION

Finnish

English

Valmet Corporation - Interim report (Q1 and Q3)

Valmet's Interim Review January 1 - September 30, 2015: Strong development in orders received in China - profitability in the targeted range in Q3/2015

Valmet Corporation's stock exchange release on October 28, 2015 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. Automation has been consolidated into
Valmet's financials since April 1, 2015, when the acquisition of Automation was
completed.

July-September 2015: Orders received increased - solid performance in Automation

* Orders received increased to EUR 725 million (EUR 466 million).

* Orders received increased in the Pulp and Energy, and Paper business
lines and remained at the previous year's level in the Services business
line.
* Automation contributed to orders received with EUR 70 million.
* Orders received more than doubled in China.
* Net sales increased to EUR 734 million (EUR 590 million).

* Net sales increased in the Paper, and Services business lines and
decreased in the Pulp and Energy business line.
* Automation contributed to net sales with EUR 66 million.
* Earnings before interest, taxes and amortization (EBITA) and non-recurring
items were EUR 47 million (EUR 32 million), and the corresponding EBITA
margin was 6.4 percent (5.5%).

* Profitability improved due to the higher level of net sales, improved
gross profit, and the acquisition of Automation.
* Earnings per share were EUR 0.14 (EUR 0.11).
* Non-recurring items amounted to EUR -4 million (EUR -1 million).
* Cash flow provided by operating activities was EUR 16 million (EUR 117
million).

January-September 2015: EBITA more than doubled

* Orders received decreased to EUR 2,085 million (EUR 2,590 million).

* Orders received increased in the Services business line and decreased in
the Pulp and Energy, and Paper business lines.
* Automation contributed to orders received with EUR 156 million.
* Orders received increased in China and North America.
* Net sales increased to EUR 2,074 million (EUR 1,697 million).

* Net sales increased in the Paper, and Services business lines and
remained at the previous year's level in the Pulp and Energy business
line.
* Automation contributed to net sales with EUR 134 million.
* Earnings before interest, taxes and amortization (EBITA) and non-recurring
items were EUR 120 million (EUR 58 million), and the corresponding EBITA
margin was 5.8 percent (3.4%).

* Profitability improved due to the higher level of net sales, improved
gross profit, and the acquisition of Automation.
* Earnings per share were EUR 0.33 (EUR 0.14).
* Non-recurring items amounted to EUR -16 million (EUR -7 million), of which
costs related to acquisition of Automation amounted to approximately EUR 12
million.
* Cash flow provided by operating activities was EUR 14 million (EUR 206
million).

Valmet reiterates its guidance for 2015

Valmet is reiterating its guidance presented on February 6, 2015 in which Valmet
estimates that, including the acquisition of Process Automation Systems, net
sales in 2015 will increase in comparison with 2014 (EUR 2,473 million) and
EBITA before non-recurring items in 2015 will increase in comparison with 2014
(EUR 106 million).

Short-term outlook

General economic outlook

Global growth for 2015 is projected at 3.1 percent, 0.3 percentage point lower
than in 2014, and 0.2 percentage point below the forecasts in the July 2015
World Economic Outlook (WEO) Update. Prospects across the main countries and
regions remain uneven. Relative to last year, the recovery in advanced economies
is expected to pick up slightly, while activity in emerging market and
developing economies is projected to slow for the fifth year in a row, primarily
reflecting weaker prospects for some large emerging market economies and oil-
exporting countries. (International Monetary Fund, September 28, 2015)

Short-term market outlook

Valmet estimates that the short-term market outlook for board and paper has
decreased to a satisfactory level (previously good level).

Valmet reiterates the good short-term market outlook for pulp, the satisfactory
short-term market outlook for services, automation, and tissue, and the weak
short-term market outlook for energy.

President and CEO Pasi Laine: Profitability in the targeted range for the second
consecutive quarter

We have been working hard to improve our profitability and to reach our EBITA
margin target. In the third quarter of 2015, we reached this target - for the
second consecutive quarter. During the last four quarters, we have been in the
targeted range for three quarters.

The integration of the automation business has been a success. It has now been
six months since the acquisition was completed, and I still get a lot of
positive feedback from both customers and employees. By combining process know-
how, services and automation, we can serve our customers even better than
before. As a result of the acquisition, Valmet's stability and profitability
have increased. The share of stable business, meaning Automation and Services,
was about half of the net sales in the third quarter.

From a geographical point of view, Valmet's orders received developed especially
well in China. In the third quarter, orders received increased also in North
America and EMEA (Europe, Middle-East and Africa). A balanced geographical
exposure increases stability of the overall business.

Going forward, Valmet continues to develop new advanced and competitive
technologies and services. Good examples of the results of our research and
development process are the OptiConcept M board and paper production machine,
and the Advantage NTT tissue production machine. Both machines offer customers a
cost-efficient, energy-efficient and flexible way to produce high-quality
products, with significant raw material savings. The machines have been well
received by the markets - in total, Valmet has so far sold ten OptiConcept M
machines and five Advantage NTT tissue machines.

Key figures*
Q3/2015 Q3/2014 Change Q1-Q3/ Q1-Q3/ Change
EUR million 2015 2014
-------------------------------------------------------------------------------
Orders received 725 466 56% 2,085 2,590 -19%

Order backlog** 2,117 2,312 -8% 2,117 2,312 -8%

Net sales 734 590 25% 2,074 1,697 22%

Earnings before interest, taxes
and amortization (EBITA) and non- 47 32 45% 120 58 >100%
recurring items

% of net sales 6.4% 5.5% 5.8% 3.4%

Earnings before interest, taxes 43 31 37% 104 51 >100%
and amortization (EBITA)

% of net sales 5.9% 5.3% 5.0% 3.0%

Operating profit (EBIT) 33 26 25% 78 35 >100%

% of net sales 4.4% 4.4% 3.8% 2.1%

Profit before taxes 29 24 21% 71 31 >100%

Profit / loss 21 16 27% 50 21 >100%

Earnings per share, EUR 0.14 0.11 25% 0.33 0.14 >100%

Earnings per share, diluted, EUR 0.14 0.11 25% 0.33 0.14 >100%

Equity per share, EUR 5.40 5.32 2% 5.40 5.32 2%

Cash flow provided by operating 16 117 -86% 14 206 -93%
activities

Cash flow after investments 13 107 -87% -338 179

Return on equity (ROE) 8% 3%
(annualized)

Return on capital employed (ROCE) 11% 6%
before taxes (annualized)

*The calculation of key figures is presented in the Tables section of the
January-September 2015 Interim Review.
**At the end of period.

Equity to assets ratio As at September 30, 2015 As at September As at June
and gearing 30, 2014 30, 2015
-------------------------------------------------------------------------------
Equity to assets ratio 35% 41% 35%
at end of period

Gearing at end of 28% -20% 29%
period

Q3/2015 Q3/2014 Change Q1-Q3/ Q1-Q3/ Change
Orders received, EUR million 2015 2014
-------------------------------------------------------------------------
Services 252 242 4% 852 782 9%

Automation 70 - - 156 - -

Pulp and Energy 206 96 >100% 603 1,279 -53%

Paper 197 128 54% 474 530 -10%
-------------------------------------------------------------------------
Total 725 466 56% 2,085 2,590 -19%
-------------------------------------------------------------------------

Order backlog, As at September As at September Change As at June
EUR million 30, 2015 30, 2014 30, 2015
-------------------------------------------------------------------------------
Total 2,117 2,312 -8% 2,208
------------------------------------------------------------------------------- Q3/2015 Q3/2014 Change Q1-Q3/ Q1-Q3/ Change
Net sales, EUR million 2015 2014
-------------------------------------------------------------------
Services 268 235 14% 814 711 14%

Automation 66 - - 134 - -

Pulp and Energy 215 234 -8% 668 644 4%

Paper 185 120 54% 459 342 34%
-------------------------------------------------------------------
Total 734 590 25% 2,074 1,697 22%
-------------------------------------------------------------------

Webcast for analysts, investors and media

Valmet will arrange a news conference in English for investment analysts,
investors, and media on Wednesday, October 28, 2015 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 560304. The participants will be asked to provide the following
conference ID: 53459057.

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 in Twitter at www.twitter.com/valmetir.

Further information, please contact:
Hanna-Maria Heikkinen, Vice President, Investor Relations, Valmet, tel.
+358 10 672 0007
Markku Honkasalo, Chief Financial Officer, Valmet, tel. +358 10 672 0008

VALMET

Markku Honkasalo
CFO

Hanna-Maria Heikkinen
VP, Investor Relations

Valmet is the leading global developer and supplier of technologies, automation
and services for the pulp, paper and energy industries. Valmet's vision is to
become the global champion in serving its customers.

Valmet's services cover everything from maintenance outsourcing to mill and
plant improvements and spare parts. The strong technology offering includes pulp
mills, tissue, board and paper production lines, as well as power plants for
bio-energy production. Valmet's advanced automation solutions range from single
measurements to mill wide turnkey automation projects.

Valmet's net sales in 2014 were approximately EUR 2.5 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 OMX Helsinki Ltd.