Neles’ Financial Statements Review January 1 – December 31, 2021

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Neles Corporation, Stock exchange release, February 4, 2022, at 09:00 a.m. EET

This Financial Statements Review is not an offer of merger consideration shares in the United States. The merger consideration shares have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may not be offered, sold, or delivered within or into the United States, except pursuant to an applicable exemption of, or in a transaction not subject to, the Securities Act. There will be no public offering of securities in the United States. This Financial Statements Review does not constitute an offer of or an invitation by or on behalf of, Neles, Valmet, or any other person, to purchase any securities.

This is a summary of Neles’ Financial Statements Review for January 1 - December 31, 2021. The complete review is attached to this release and is also available at

January-December 2021 in brief: Strong order intake and sales volume supporting solid profitability

  • Positive situation in Pulp, Paper and Bioproducts projects, as well as Services, continued in the fourth quarter. Maintenance, repair and operations (MRO) business continued to recover
  • Chemical and Oil & Gas projects’ market situation remained weak, with clear signs of improvement at the end of the year  
  • Solid profitability supported by good sales volumes in the fourth quarter
  • Good free cash flow in 2021, especially in the fourth quarter
  • The acquisition of Flowrox valves and pumps businesses was completed in November. The acquisition strengthens Neles’ position in the metals and mining markets
  • Board of Directors dividend proposal: EUR 0.266 per share

In this Financial Statements Review, a comparable cash flow statement is disclosed in addition to IFRS financial information. Figures in parentheses refer to the corresponding period of the continuing operations in 2020 unless otherwise stated. Neles Group has been reported as one segment since June 30, 2020.

Summary of key figures

Operative key figures,
EUR million
10–12/21 10–12/20 Change, % 1–12/21 1–12/20 Change, %
Orders received1 170.4 134.5 27 625.2 590.1 6
Order backlog at end of period 294.4 270.3 9 294.4 270.3 9
Sales2 174.2 154.9 12 610.9 576.3 6
Adjusted EBITA 26.8 22.7 18 86.8 85.0 2
% of sales 15.4 14.6 14.2 14.8
Adjustment items3 1.9 3.3 7.2 11.3
Operating profit 23.6 18.5 27 75.8 70.3 8
% of sales 13.6 12.0 12.4 12.2
Earnings per share, continuing operations, EUR 0.14 0.08 60 0.38 0.32 17
Free cash flow, continuing operations 34.8 36.8 -5 77.5 68.7 13

Balance sheet key figures 12/21 12/20
Balance sheet total, EUR million 700.2 643.8
Net debt, EUR million 81.4 81.4
Net debt / EBITDA, rolling 12 months 0.8 0.9
Gearing, % 26.8 30.9
Personnel at end of period 2,934 2,840

1 Of which EUR 120.6 (88.3) million in 1012/21 and EUR 442.0 (357.8) million in 112/21 were for the Services and MRO-driven businesses including EUR 35.9 (35.0) million in 1012/21 and EUR 153.5 (133.5) million in 112/21 for Services orders received. Orders received in comparable currencies increased by 20% in 1012/21 and by 7% in 112/21.
 2 Of which EUR 112.0 (96.7) million in 10–12/21 and EUR 403.8 (368.7) million in 112/21 were for the Services and MRO-driven businesses including EUR 38.5 (35.4) million in 1012/21 and EUR 148.1 (128.6) million in 112/21 for Services sales. Sales in comparable currencies increased by 8% in 10–12/21 and by 7% in 1–12/21.
3 Adjustment items amounted to EUR 1.9 (3.3) million in 10–12/21 and EUR 7.2 (11.3) million in 1–12/21. See note 5.

Interim President and CEO Simo Sääskilahti: Positive ending to a challenging year – 20% organic growth in orders received in the fourth quarter

The market situation in the fourth quarter remained mainly the same for the project business as in the second and third quarters of 2021. The Pulp, Paper and Bioproducts project business continued to be strong, and we continued to win new projects, as well as additions to the existing projects. In Chemicals and Oil & Gas projects, the market was slow, but towards the end of the year, projects in sales phase started progressing. Most of these projects are expected to be awarded during the first half of 2022.

The Services business remained at a good level, and the MRO-driven business continued to recover during the fourth quarter. Overall, our fourth quarter orders received for the Services and MRO-driven businesses were 37% higher than a year ago, and 16% higher than in 2019. Business momentum in the North and South America was particularly strong, and business has also developed positively in most of our other market areas. The current Covid-19 situation is creating uncertainties, but so far, there are no clear indications that the positive development direction in businesses would be reversed. We were again able to achieve 15% adjusted EBITA in the fourth quarter thanks to good sales volumes, although we continued to face challenges in logistics and the availability of electronics components. These challenges also continue to create delivery risks for 2022 first half deliveries.  

Diversification to growing new industries is a cornerstone of our strategy. We have seen promising progress in our business development efforts to create opportunities in the renewable energy and decarbonization areas. A tangible example of our efforts’ results is that we published in the fourth quarter an agreement to provide solutions for green hydrogen applications.  

In the beginning of November, we welcomed 101 new Neles professionals when we closed the acquisition of the Flowrox valves and pumps businesses. This acquisition will greatly strengthen our offering, channels and understanding of the growing metals and mining markets.

I was honored to start as the interim President and CEO of Neles at the start of 2022. I am grateful to have had the opportunity to work for more than two years alongside Olli Isotalo, who retired as President and CEO at the end of 2021. Despite market challenges, Olli was able to lead the business with a clear vision and positive attitude, and Neles was able to be agile and successful in managing the challenging environment. I want to thank Olli for his vision and strategic clarity in navigating Neles through these uncertain times.

I would also like to thank all Neles employees for delivering good results in a challenging environment. In addition to delivering the financial results, we have during the year been able to achieve and report several important milestones in building the strategic foundation for Neles business’ long-term success.

Mergers and acquisitions

Acquisition of Flowrox valve and pump businesses

On November 1, 2021, Neles completed the acquisition of the valve and pump businesses of the technology company Flowrox in Finland, the USA, South-Africa, Australia, China, Russia and Peru, through an asset deal. The acquisition complements Neles' offering and improves its market positioning in the mining and metals industry. It enables Neles to better leverage growth opportunities in minerals processing applications. In 2020, the sales of the acquired businesses amounted to approximately EUR 30 million. As a result of the acquisition, 101 employees transferred to Neles.

On November 1, 2021, a EUR 40.3 million cash consideration was paid for the acquired businesses. Additionally, an earn-out of up to EUR 3 million will be paid as a cash consideration, subject to set orders received criteria for a one-year period after closing. The acquisition generated a goodwill of EUR 25.1 million. For additional details of the acquisition, see note 10.

Merger of Neles and Valmet

On July 2, 2021, Neles announced that the Board of Directors of Neles Corporation and Valmet Oyj have signed a combination agreement and a merger plan to combine the two companies through a merger. Both companies held an Extraordinary General Meeting (EGM) on September 22, 2021, and both EGMs approved the merger. The completion of the merger was expected to occur on January 1, 2022, subject to all conditions for completion being fulfilled.

On November 5, 2021, Valmet announced that due to the regulatory review processes taking longer than previously estimated, the completion of the merger was targeted to occur on or before April 1, 2022. As the completion has not yet taken place, the next possible date under the Combination Agreement for the completion to take place is April 1, 2022. The planned closing date may be delayed due to the regulatory processes ongoing. Should the closing be delayed from April 1, 2022, Valmet will issue a stock exchange release on the matter and the merger prospectus will be supplemented once there is more clarity on the timetable of the regulatory processes. Until the completion of the merger Neles and Valmet will carry out their respective businesses as separate and independent companies.

As a merger consideration, Neles shareholders will receive 0.3277 new shares in Valmet for each share they hold in Neles. Among other conditions, the combination is subject to, the obtaining of merger control and other regulatory approvals, and an extra distribution of funds in the amount of a maximum of EUR 2.00 per share to the Neles shareholders prior to the merger’s completion.

On July 2, 2021, Neles signed a EUR 301 million bridge-to-bond facility, the purpose of which is to finance the extraordinary distribution of funds prior to the completion of the merger. If executed, the facility term is 12 months, with two 6-month extension options.

For more information, please see

Market outlook

Market activity in Pulp and Paper projects is expected to continue at a good level.

Market activity in the Chemicals and Oil & Gas project business was weak during 2021. The market activity is expected to return to a satisfactory level during the next 6 months.

Market activity was satisfactory/good for the Services and the Maintenance, Repair and Operations-driven (MRO) businesses during the fourth quarter of 2021. Positive development is expected to continue in these markets and reach a good level in the first half of 2022.

The ongoing challenges in global logistics, availability of electronic components and the Covid-19 pandemic continues to create uncertainty and risks of abrupt changes in all markets important to Neles.

The market outlook reflects the management’s expectation for the next six months unless otherwise stated.

Covid-19 pandemic update

In the first quarter of 2021, Neles’ Brazilian supply center was temporarily closed. At the beginning of the second quarter, there were also temporary closures in Neles’ Indian factories. The Covid-19 pandemic situation is being followed closely by management, prioritizing the health and safety of Neles’ employees and partners. At the end of 2021, all Neles factories were operational.

The global logistics situation continued to be challenging during the fourth quarter of 2021. The availability of transportation and difficulties in arranging logistics by Neles or its customers has caused delays in Neles’ deliveries. In addition, delays have occurred due to a shortage of electronic components.

Neles has operations in several regions where the Covid-19 pandemic continues to cause disruptions. There continue to be risks of similar temporary closures of local Neles operations, challenges in global logistics and availability of electronic components. These above challenges are expected to continue at least in the first half of 2022.

Travel restrictions, cuts to external spending across the organization, and cost-saving and optimization activities have continued in 2021. Ever more attention has also been paid to managing net working capital. There have been no material credit losses or order cancellations.

Audiocast and conference call details

Neles’ Interim President and CEO Simo Sääskilahti will present the financial results in an audiocast and a conference call for analysts and investors today at 2:00 p.m. EET. The audiocast can be followed at A recording will be available at the same webpage after the event has finished.

Conference call participants are requested to dial in five minutes before the event on:

Finland Toll: +358 981710310
Sweden Toll: +46 856642651
United Kingdom Toll: +44 3333000804
United States Toll: +1 6319131422

PIN: 38640935#

Neles Corporation

Simo Sääskilahti, Interim President & CEO
Rita Uotila, VP, Investor Relations

For more information, please contact:

Rita Uotila, Vice President, Investor Relations, Tel. +358 400 954141, E-mail:

Neles is one of the leading providers of mission-critical flow control solutions and services for process industries. With our global team of experts and innovative solutions, we help our customers to improve their process performance and ensure the safe flow of materials. Neles is listed on the Nasdaq Helsinki in Finland and had sales of about EUR 611 million in 2021. Neles employs about 2,950 people in approximately 40 countries.,