Valmet Corp · OMXHEX:VALMT
Valmet — Q3 2020 Earnings Presentation
29 slides from Valmet's earnings presentation, Oct 27, 2020
Slide 1: Orders received decreased to EUR 700 million and Comparable EBITA increased to EUR 91 million in Q3
Orders received decreased to EUR 700 million and Comparable EBITA increased to EUR 91 million in the third quarter Interim Review, January–September 2020 October 27, 2020 Pasi Laine, President and CEO Kari Saarinen, CFO
Slide 2: Agenda
Agenda Interim Review, January–September 2020 1 Q3/2020 in brief 2 Development of the business lines 3 Ownership in Neles and the agreed acquisition of PMP Group 4 Financial development 5 Guidance and short-term market outlook 2 October 27, 2020 © Valmet | Interim Review, January–September 2020
Slide 3: Q3/2020 in brief
Q3/2020 in brief Valmet <>
Slide 4: Q3/2020 in brief
Q3/2020 in brief Orders received decreased to EUR 369 million in stable business1 Orders received decreased to EUR 347 million in capital business2 Net sales remained at the previous year’s level at EUR 832 million Order backlog amounted to EUR 3.3 billion Comparable EBITA increased to EUR 91 millio
Slide 5: Valmet in Q3/2020
Valmet in Q3/2020 Orders received by business line Orders received by area Orders received 9% EUR 700 million 16% Net sales EUR 832 million 41% 6% 42% 27% Comparable EBITA EUR 91 million Comparable EBITA margin 10.9% 7% 9% 42% Order backlog EUR 3,311 million Services North America Employees Automati
Slide 6: Orders received decreased to EUR 700 million in Q3/2020
Orders received decreased to EUR 700 million in Q3/2020 Orders received (EUR million) Orders received in Q1–Q3/2020 by area 1,800 4,500 Asia- North 1,600 4,000 Pacific America 10% 1,400 3,500 13% 1,200 3,000 South 1,000 2,500 America China 13% 800 2,000 24% 600 1,101 1,083 1,058 1,187 1,500 1,005 1,
Slide 7: Stable business orders received totaled EUR 1,816 million during the last four quarters
Stable business orders received totaled EUR 1,816 million during the last four quarters Orders received (EUR million) in stable business1 700 2,100 600 1,800 507 514 500 461 474 1,500 443 424 439 445 435 433 112 116 426 402 394 409 383 381 400 344 372 88 359 93 102 103 104 369 1,200 330 342 88 103 1
Slide 8: Order backlog EUR 3,311 million at the end of Q3/2020
Order backlog EUR 3,311 million at the end of Q3/2020 Order backlog (EUR million) Structure of order backlog 4,000 3,500 3,425 3,557 3,492 ~30% 3,333 3,311 3,000 3,216 3,001 2,791 2,829 2,500 2,704 2,714 2,720 2,583 2,621 2,406 2,458 2,312 2,283 2,000 2,208 2,117 2,074 2,207 2,106 2,192 ~70% 1,972 1
Slide 9: Development of the business lines
Development of the business lines
Slide 10: Services: Orders received and net sales decreased in Q3/2020
Services: Orders received and net sales decreased in Q3/2020 Orders received (EUR million) Net sales (EUR million) Q1–Q3/2019: Q1–Q3/2020: Q1–Q3/2019: Q1–Q3/2020: EUR 1,064 million EUR 1,014 million EUR 973 million EUR 924 million 400 371 395 398 1,600 400 400 1,600 358 366 361 355 346 344 335 340 3
Slide 11: Automation: Orders received decreased and net sales remained at the previous year's level
Automation1: Orders received decreased and net sales remained at the previous year’s level in Q3/2020 Orders received (EUR million) Net sales (EUR million) Q1–Q3/2019: Q1–Q3/2020: Q1–Q3/2019: Q1–Q3/2020: EUR 304 million EUR 295 million EUR 256 million EUR 261 million 140 480 140 124 137 420 109 1121
Slide 12: Pulp and Energy: Orders received and net sales decreased in Q3/2020
Pulp and Energy: Orders received and net sales decreased in Q3/2020 Orders received (EUR million) Net sales (EUR million) Q1–Q3/2019: Q1–Q3/2020: Q1–Q3/2019 : Q1–Q3/2020: EUR 805 million EUR 643 million EUR 604 million EUR 717 million 700 1,400 700 1,400 622 600 560 1,200 600 1,200 500 451 1,000 500
Slide 13: Paper: Orders received and net sales increased in Q3/2020
Paper: Orders received and net sales increased in Q3/2020 Orders received (EUR million) Net sales (EUR million) Q1–Q3/2019: Q1–Q3/2020: Q1–Q3/2019: Q1–Q3/2020: EUR 844 million EUR 818 million EUR 646 million EUR 713 million 450 419 1,200 450 1,200 400 1,050 400 1,050 353 350 314 321 900 350 304 900
Slide 14: Ownership in Neles and the agreed acquisition of PMP Group
Ownership in Neles and the agreed acquisition of PMP Group
Slide 15: Valmet's goal is to merge Valmet and Neles
Valmet’s goal is to merge Valmet and Neles Valmet acquired 29.5% of Neles’ shares during Q3 2020 On September 29, Valmet approached the Board of Directors of Neles with a proposal to start discussions on a potential statutory merger between the two companies A statutory merger between Valmet a
Slide 16: Valmet strengthened its business by acquiring PMP Group
Valmet strengthened its business by acquiring PMP Group Focus on small and medium-sized tissue machines and board and paper machine rebuilds Key information about the acquisition • PMP Group supplies process technologies and services for tissue, Net sales in 2019 EUR ~70 million board and paper mach
Slide 17: Financial development
Financial development Valmet <>
Slide 18: Key figures
Key figures EUR million Q3/2020 Q3/2019 Change Q1–Q3/2020 Q1–Q3/2019 Change Orders received 700 1,058 -34% 2,712 2,976 -9% Order backlog1 3,311 3,425 -3% 3,311 3,425 -3% Net sales 832 857 -3% 2,573 2,444 5% Comparable EBITA 91 81 11% 218 198 10% % of net sales 10.9% 9.5% 8.5% 8.1% EBITA 87 83 5% 208
Slide 19: Gross profit and SG&A development
Gross profit and SG&A development Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 300 30% 300 30% 25% 250 25% 250 25% 200 20% 200 20% 16% 150 15% 150 15% 100 10% 100 10% 50 5% 50 5% 0 0% 0 0% Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016
Slide 20: Comparable EBITA margin development
Comparable EBITA margin1 development Net sales and Comparable EBITA, rolling 12 months (EUR million and %)1 Target 10-12% 3,682 3,700 3,676 3,429 3,547 3,257 3,308 3,325 3,279 3,337 9.1% 8.9% 9.1% 3,145 8.7% 8.8% 3,019 3,044 2,995 3,058 8.6% 8.7% 2,851 2,928 2,926 2,919 2,846 2,876 7.7% 2,707 7.1% 2
Slide 21: Cash flow provided by operating activities
Cash flow provided by operating activities Cash flow provided by operating activities (EUR million) 2014: 2015: 2016: 2017: 2018: 2019: Q1–Q3/2020: EUR 236 million EUR 78 million EUR 246 million EUR 291 million EUR 284 million EUR 295 million EUR 418 million 200 150 182 173 143 151 100 117 122 119 1
Slide 22: Net working capital at -17% of rolling 12 months orders received
Net working capital at -17% of rolling 12 months orders received Net working capital1 and orders received (EUR million) 1,500 30% 1,000 1,101 1,187 20% 1,023 1,005 1,026 1,083 1,058 1,009 890 865 940 781 793 803 788 857 796 835 826 725 692 743 727 700 500 580 10% 466 480 0 0% -235 -249 -345 -353 -31
Slide 23: Net debt and gearing increased compared with Q3/2019
Net debt and gearing increased compared with Q3/2019 Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 300 30% 50% 21% 45% 42% 42% 43% 43% 41% 41% 41% 200 17% 18% 20% 39% 40% 36% 37% 37% 38% 38% 38% 38% 178 184 152 35% 100 6% 10% 6% 30% 0% 60 0 52 0% 25% -4 20% -100 -102 -98 -90 -100
Slide 24: Capital employed and Comparable ROCE
Capital employed and Comparable ROCE Capital employed (EUR million) and Comparable return on capital employed (ROCE), before taxes1 (%) 23% 24% 23% 23% 23% 1,541 22% 22% 20% 1,314 1,327 1,239 1,240 1,214 1,231 1,237 1,239 1,256 1,184 1,194 1,167 1,195 18% 1,195 1,112 1,138 1,141 1,137 17% 1,150 16%
Slide 25: Guidance and short-term market outlook
Guidance and short-term market outlook
Slide 26: Guidance and short-term market outlook
Guidance and short-term market outlook Guidance for 2020 (as announced on October 13, 2020) Guidance Valmet estimates that net sales in 2020 will remain at the previous year’s level in comparison with 2019 (EUR 3,547 million) and Comparable EBITA in 2020 will increase in comparison with 2019 (EUR 31
Slide 27: Financial Statements Review 2020 and Pulp & Energy Investor Day
Financial Statements Pulp & Energy Investor Day Review 2020 Webinar February 4, 2021 November 19, 2020 www.valmet.com/investors 27 October 27, 2020 © Valmet | Interim Review, January–September 2020
Slide 28: Important notice
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
Slide 29: FORWARD
FORWARD