2016-10-27 12:00:34 CEST
2016-10-27 12:00:34 CEST
REGULATED INFORMATION
Valmet Corporation - Interim report (Q1 and Q3)
Valmet's Interim Review January 1 - September 30, 2016: Orders received increased and profitability improved
Valmet Oyj's stock exchange release on October 27, 2016 at 1:00 p.m. 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 2016: Comparable EBITA margin at 7.5 percent
* Orders received increased to EUR 788 million (EUR 725 million).
* Orders received increased in the Pulp and Energy business line, remained
at the previous year's level in the Services and Automation business
lines and decreased in the Paper business line.
* Orders received increased in EMEA (Europe, Middle East and Africa),
South America and Asia-Pacific and decreased in China and North America.
* Net sales decreased to EUR 685 million (EUR 734 million).
* Net sales increased in the Services business line, remained at the
previous year's level in the Automation business line and decreased in
the Paper and Pulp and Energy business lines.
* Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 52 million (EUR 47 million) and the corresponding Comparable
EBITA margin was 7.5 percent (6.4%).
* Profitability improved due to the higher level of net sales in the
Services business line.
* Earnings per share were EUR 0.17 (EUR 0.14).
* Items affecting comparability amounted to EUR -2 million (EUR -4 million).
* Cash flow provided by operating activities was EUR 122 million (EUR 16
million).
January-September 2016: Orders received increased and profitability improved
* Orders received increased to EUR 2,282 million (EUR 2,085 million).
* Orders received increased in the Pulp and Energy and Services business
lines and remained at the previous year's level in the Paper business
line.
* The Automation business line contributed to orders received with EUR
221 million.
* Orders received increased in South America and EMEA, remained at the
previous year's level in Asia-Pacific and decreased in China and North
America.
* Net sales remained at the previous year's level at EUR 2,141 million (EUR
2,074 million).
* Net sales remained at the previous year's level in the Services, Paper
and Pulp and Energy business lines.
* The Automation business line contributed to net sales with EUR 196
million.
* Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 140 million (EUR 120 million) and the corresponding
Comparable EBITA margin was 6.5 percent (5.8%).
* Profitability improved due to improved gross profit and the acquisition
of Automation.
* Earnings per share were EUR 0.46 (EUR 0.33).
* Items affecting comparability amounted to EUR -5 million (EUR -16 million).
* Cash flow provided by operating activities was EUR 158 million (EUR 14
million).
Valmet reiterates its guidance for 2016
Valmet is reiterating its guidance presented on February 9, 2016 in which Valmet
estimates that net sales in 2016 will remain at the same level with 2015 (EUR
2,928 million) and Comparable EBITA in 2016 will increase in comparison with
2015 (EUR 182 million).
Short-term outlook
General economic outlook
Global growth is projected to slow to 3.1 percent in 2016 before recovering to
3.4 percent in 2017. The forecast, revised down by 0.1 percentage point for
2016 and 2017 relative to April, reflects a more subdued outlook for advanced
economies following the June U.K. vote in favor of leaving the European Union
(Brexit) and weaker-than-expected growth in the United States. These
developments have put further downward pressure on global interest rates, as
monetary policy is now expected to remain accommodative for longer.
(International Monetary Fund, October 4, 2016)
Short-term market outlook
Valmet estimates that the short-term market outlook has increased to a good
level (previously satisfactory) in tissue and in energy and decreased to a
satisfactory level (previously good level) in board and paper.
Valmet reiterates the satisfactory short-term market outlook for services,
automation and pulp.
President and CEO Pasi Laine: Orders received increased and profitability
continued to improve
Orders received has increased 9 percent since the beginning of the year,
supported by the stable business but also by the good progress in our energy
business. In 2016, orders received in the Services business line has increased
5 percent and the Automation business line has contributed with over EUR 220
million in orders. In energy, orders received has more than doubled. We have
received several large energy orders and also expanded to new geographical
areas. For example, we have received our first order for a waste to energy
boiler plant delivery to China.
In the third quarter of 2016, Valmet reached a Comparable EBITA margin of 7.5
percent, which is the highest figure since becoming an independent company. For
the last twelve months, the margin stands at 6.8 percent. The improvement in
profitability is the result of the systematic work that we have put into, for
example, procurement costs. We will continue to focus on improving profitability
also going forward.
Valmet has been included in the Dow Jones Sustainability Index (DJSI) for the
third consecutive year. This means that we maintain our position among the
world's sustainability leaders, which is an excellent achievement. It shows that
we have been able to improve our sustainability performance year by year, which
is a key criteria for inclusion in the index. Sustainability is very important
for us and sustainability is at the core of Valmet's business strategy and
operations.
Key figures(1)
Q3/2016 Q3/2015 Change Q1-Q3/ Q1-Q3/ Change
EUR million 2016 2015
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Orders received 788 725 9% 2,282 2,085 9%
Order backlog(2) 2,192 2,117 4% 2,192 2,117 4%
Net sales 685 734 -7% 2,141 2,074 3%
Comparable earnings before
interest, taxes and amortization 52 47 10% 140 120 17%
(Comparable EBITA)
% of net sales 7.5% 6.4% 6.5% 5.8%
Earnings before interest, taxes 49 43 15% 135 104 29%
and amortization (EBITA)
% of net sales 7.2% 5.9% 6.3% 5.0%
Operating profit (EBIT) 41 33 26% 107 78 37%
% of net sales 6.0% 4.4% 5.0% 3.8%
Profit before taxes 38 29 29% 98 71 38%
Profit / loss 26 21 25% 69 50 37%
Earnings per share, EUR 0.17 0.14 28% 0.46 0.33 37%
Earnings per share, diluted, EUR 0.17 0.14 28% 0.46 0.33 37%
Equity per share, EUR 5.68 5.40 5% 5.68 5.40 5%
Cash flow provided by operating 122 16 >100% 158 14 >100%
activities
Cash flow after investments 108 13 >100% 116 -338
Return on equity (ROE) 11% 8%
(annualized)
Return on capital employed (ROCE) 12% 11%
before taxes (annualized)
(1) The calculation of key figures is presented on page 37.
(2 )At the end of period.
Equity to assets ratio As at September As at September As at June 30, 2016
and gearing 30, 2016 30, 2015
-------------------------------------------------------------------------------
Equity to assets ratio 38% 35% 36%
at end of period
Gearing at end of 15% 28% 27%
period
Q3/2016 Q3/2015 Change Q1-Q3/ Q1-Q3/ Change
Orders received, EUR million 2016 2015
-------------------------------------------------------------------------
Services 264 252 5% 898 852 5%
Automation 72 70 3% 221 156 -
Pulp and Energy 275 206 33% 692 603 15%
Paper 176 197 -10% 472 474 -1%
-------------------------------------------------------------------------
Total 788 725 9% 2,282 2,085 9%
-------------------------------------------------------------------------
Order backlog, EUR As at September As at September Change As at June
million 30, 2016 30, 2015 30, 2016
-------------------------------------------------------------------------------
Total 2,192 2,117 4% 2,106
-------------------------------------------------------------------------------
Q3/2016 Q3/2015 Change Q1-Q3/ Q1-Q3/ Change
Net sales, EUR million 2016 2015
-------------------------------------------------------------------
Services 286 268 7% 846 814 4%
Automation 65 66 -2% 196 134 -
Pulp and Energy 196 215 -9% 640 668 -4%
Paper 138 185 -26% 459 459 0%
-------------------------------------------------------------------
Total 685 734 -7% 2,141 2,074 3%
-------------------------------------------------------------------
News conference and webcast for analysts, investors and media
Valmet will arrange a news conference in English for analysts, investors, and
media on Thursday, October 27, 2016 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 2071 928000. The participants will be asked to provide the following
conference ID: 93428439.
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, Chief Financial Officer, 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 2015 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 in Twitter www.twitter.com/valmetir
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