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  • Valmet’s Interim Review January 1 – September 30, 2023: Orders received amounted to EUR 980 million and Comparable EBITA increased to EUR 150 million in the third quarter

Valmet’s Interim Review January 1 – September 30, 2023: Orders received amounted to EUR 980 million and Comparable EBITA increased to EUR 150 million in the third quarter

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Valmet’s Interim Review January 1 – September 30, 2023: Orders received amounted to EUR 980 million and Comparable EBITA increased to EUR 150 million in the third quarter

Valmet Oyj’s stock exchange release on October 25, 2023 at 1:00 p.m. EEST

 

Figures in brackets, unless otherwise stated, refer to the comparison period, i.e., the same period of the previous year.

July–September 2023: Net sales remained at the previous year's level, Comparable EBITA margin increased

         Orders received decreased 17 percent to EUR 980 million (EUR 1,178 million).

        Orders received decreased in all three segments.

        Orders received increased in China and North America, and decreased in Asia-Pacific, EMEA (Europe, Middle East and Africa) and South America.

         Net sales remained at the previous year’s level and amounted to EUR 1,295 million (EUR 1,288 million).

        Net sales increased in the Services and Automation segments and decreased in the Process Technologies segment.

         Comparable earnings before interest, taxes and amortization (Comparable EBITA) increased 11 percent to EUR 150 million (EUR 136 million).

        Comparable EBITA increased in the Services and Automation segments and decreased in the Process Technologies segment.

         Comparable EBITA margin was 11.6 percent (10.5%).

         Earnings per share (EPS) were EUR 0.47 (EUR 0.38). Adjusted EPS was EUR 0.52 (EUR 0.51).

         Items affecting comparability amounted to EUR -4 million (EUR -4 million).

         Cash flow provided by operating activities totaled EUR 57 million (EUR 115 million).

January–September 2023: Net sales, Comparable EBITA and Comparable EBITA margin increased

         Orders received remained at the previous year’s level and amounted to EUR 3,801 million (EUR 3,809 million).

        Orders received increased in the Automation segment, remained at the previous year's level in the Services segment, and decreased in the Process Technologies segment.

        Orders received increased in South America and North America, remained at the previous year's level in China and Asia-Pacific and decreased in EMEA.

         Net sales increased 14 percent to EUR 4,033 million (EUR 3,534 million).

        Net sales increased in the Automation and Services segments and remained at the previous year's level in the Process Technologies segment.

         Comparable earnings before interest, taxes and amortization (Comparable EBITA) increased 29 percent to EUR 437 million (EUR 337 million).

        Comparable EBITA increased in the Services and Automation segments and decreased in the Process Technologies segment.

         Comparable EBITA margin was 10.8 percent (9.5%).

         EPS was EUR 1.38 (EUR 1.25). Adjusted EPS was EUR 1.63 (EUR 1.56).

         Items affecting comparability amounted to EUR -4 million (EUR 23 million).

         Cash flow provided by operating activities totaled EUR 229 million (EUR 49 million).

Guidance for 2023
Valmet reiterates its guidance issued on February 2, 2023, in which Valmet estimates that net sales in 2023 will increase in comparison with 2022 (EUR 5,074 million) and Comparable EBITA in 2023 will increase in comparison with 2022 (EUR 533 million).

Short-term market outlook

Valmet reiterates the good/satisfactory short-term market outlook for services (capacity utilization good, customer activity satisfactory), the good short-term market outlook for flow control, automation systems and energy, and the satisfactory short-term market outlook for pulp, board and paper, and tissue.

The short-term market outlook is given for the next six months from the end of the reported period. It is based on customer activity (50%) and Valmet’s capacity utilization (50%), and the scale is ‘weak–satisfactory–good’.

President and CEO Pasi Laine: Comparable EBITA increased in the third quarter

"During the first nine months of 2023 Valmet’s orders received remained at the previous year's level. Orders increased in Automation, remained at the previous year's level in Services and decreased in Process Technologies. Automation’s orders grew well and the market activity was good. In Services, the market activity was at a very good level at the start of the year, and order intake in the first quarter was record breaking. The market activity in Services decreased during the second and third quarter. Even though there are projects in the pipeline and customers are discussing investments, we have seen some delays in project decision schedules in the Process Technologies segment. In the third quarter of 2023 Valmet’s orders received amounted to EUR 980 million.

Orders received in Valmet’s stable business totaled EUR 3.1 billion during the last four quarters. During this period, stable business represented 60% of Valmet’s orders received. This is a clear change in the company compared to 2014, when stable business represented 34% of orders received. Our order backlog amounted to EUR 4.1 billion.

During the third quarter, Valmet’s net sales remained at the previous year’s level and Comparable EBITA increased. Net sales increased in the Services and Automation segments, and decreased in Process Technologies. Comparable EBITA margin was 18.4% in Services, 18.7% in Automation and 4.5% in Process Technologies. Valmet’s Comparable EBITA increased to EUR 150 million and margin to 11.6%.

Valmet’s Climate Program is progressing well. I am very pleased to announce that we have already reached the first target in the program: Valmet can now enable carbon neutral production for all pulp and paper industry customers. We achieved this target well ahead of schedule, as the initial target year was 2030. In addition to this achievement, we’re on track with our three other Climate Program goals. By 2030, Valmet aims to enhance the energy efficiency of its existing technology offering by 20%. We are also committed to reducing our own operations’ CO₂ emissions by 80% and decreasing our supply chain’s CO₂ emissions by 20%.

On August 18, 2023, Valmet’s Board of Directors accepted my resignation as President and CEO and initiated the search for my successor. After a decade as CEO and 33 years as a Valmeteer, it is time for a new leader to continue the work alongside our renewed Executive Team. Until my successor is appointed and ready to step in as Valmet’s new CEO, I will remain fully committed to enhancing Valmet’s financial performance and serving our customers."

Update on the integration of Flow Control into Valmet

The merger of Neles into Valmet was completed on April 1, 2022. The integration of Flow Control (former Neles) into Valmet is proceeding according to the plan. Most of the cost synergy actions regarding function costs, common locations and supply chain were implemented already during 2022. Sales synergies have developed well. Valmet expects to generate annual run rate synergies of approximately EUR 25 million, of which approximately 60 percent are expected to be achieved by the end of 2023 and approximately 90 percent by the end of 2024.

 

Key figures1

EUR million

Q3/2023

Q3/2022

Change

Q1–Q3/
2023

Q1–Q3/
2022

Change

Orders received

 980

1,178

 -17 %

 3,801

3,809

 0 %

Order backlog2

 4,133

4,672

 -12 %

 4,133

4,672

 -12 %

Net sales

 1,295

1,288

 1 %

 4,033

3,534

 14 %

Comparable EBITA

 150

136

 11 %

 437

337

 29 %

% of net sales

 11.6 %

 10.5 %

 

 10.8 %

 9.5 %

 

EBITA

 147

132

 11 %

 433

360

 20 %

% of net sales

 11.3 %

 10.2 %

 

 10.7 %

 10.2 %

 

Operating profit (EBIT)

 127

97

 30 %

 359

280

 28 %

% of net sales

 9.8 %

 7.6%

 

 8.9 %

 7.9 %

 

Profit before taxes

 120

98

 23 %

 340

279

 22 %

Profit for the period

 86

71

 21 %

 256

217

 18 %

Earnings per share, EUR

 0.47

0.38

 21 %

 1.38

1.25

 10 %

Adjusted earnings per share, EUR

 0.52

0.51

 3 %

 1.63

1.56

 5 %

Equity per share, EUR2

 13.49

13.21

 2 %

 13.49

13.21

 2 %

Cash flow provided by operating activities

 57

115

 -50 %

 229

49

>100%

Cash flow after investments

 31

88

 -65 %

 135

100

 34 %

Comparable return on capital employed (Comparable ROCE) before taxes (LTM)

 

 

 

 16 %

 16 %

 

Return on capital employed (ROCE) before taxes (LTM)

 

 

 

 15 %

 17 %

 

Return on equity (ROE) (LTM)

 

 

 

 15 %

 17 %

 

Net debt to EBITDA4 ratio3

 

 

 

 0.74

 0.71

 

Gearing2

 

 

 

 21 %

 18 %

 

Equity to assets ratio2

 

 

 

 46 %

 47 %

 

1   The calculation of key figures is presented on page 55.

2   At end of period.

3   Net debt to EBITDA ratio is a new alternative performance measure. It enables users of the financial information to prepare more meaningful analysis on Valmet's performance and is presented with comparatives from Q1/2023 onwards.

4   Last twelve months' EBITDA

 LTM = Last twelve months

 

 

Segment key figures

Orders received, EUR million

Q3/2023

Q3/2022

Change

Q1–Q3/
2023

Q1–Q3/
2022

Change

Services

 349

 427

 -18%

 1,356

 1,338

 1%

Automation

 289

 306

 -6%

 1,021

 758

 35%

Flow Control

 185

 189

 -2%

 613

 387

 58%

Automation Systems

 104

 117

 -12%

 408

 371

 10%

Process Technologies

 343

 444

 -23%

 1,424

 1,713

 -17%

Pulp and Energy

 138

 211

 -35%

 626

 792

 -21%

Paper

 205

 233

 -12%

 798

 921

 -13%

Total

 980

 1,178

 -17%

 3,801

 3,809

 0%

 

Net sales, EUR million

Q3/2023

Q3/2022

Change

Q1–Q3/
2023

Q1–Q3/
2022

Change

Services

 429

 381

 13%

 1,275

 1,101

 16%

Automation

 312

 296

 5%

 953

 676

 41%

Flow Control

 192

 183

 5%

 581

 360

 62%

Automation Systems

 120

 114

 5%

 372

 317

 17%

Process Technologies

 554

 610

 -9%

 1,805

 1,757

 3%

Pulp and Energy

 250

 256

 -2%

 799

 798

 0%

Paper

 304

 355

 -14%

 1,006

 959

 5%

Total

 1,295

 1,288

 1%

 4,033

 3,534

 14%

 

Comparable EBITA, EUR million

Q3/2023

Q3/2022

Change

Q1–Q3/
2023

Q1–Q3/
2022

Change

Services

 79

 55

 45%

 221

 142

 55%

Automation

 58

 52

 12%

 169

 112

 50%

Process Technologies

 25

 36

 -31%

 84

 107

 -21%

Other

 -12

 -7

 72%

 -37

 -25

 52%

Total

 150

 136

 11%

 437

 337

 29%

 

Comparable EBITA, % of net sales

Q3/2023

Q3/2022

 

Q1–Q3/
2023

Q1–Q3/
2022

 

Services

 18.4 %

 14.3 %

 

 17.3 %

 12.9 %

 

Automation

 18.7 %

 17.6 %

 

 17.7 %

 16.6 %

 

Process Technologies

 4.5 %

 5.8 %

 

 4.7 %

 6.1 %

 

Total

 11.6 %

 10.5 %

 

 10.8 %

 9.5 %

 

 

EBITA, EUR million

Q3/2023

Q3/2022

Change

Q1–Q3/
2023

Q1–Q3/
2022

Change

Services

 79

 55

 44%

 222

 134

 65%

Automation

 58

 48

 21%

 165

 99

 67%

Process Technologies

 25

 36

 -30%

 86

 98

 -12%

Other

 -15

 -7

>100%

 -40

 29

 

Total

 147

 132

 11%

 433

 360

 20%

News conference and webcast for analysts, investors and media

Valmet will arrange a news conference in English as a live webcast at https://valmet.videosync.fi/q3-2023 on Wednesday, October 25, 2023, at 2:00 p.m. Finnish time (EEST). President and CEO Pasi Laine and CFO Katri Hokkanen will be presenting the results.

Recording of the webcast will be available shortly after the event at the same address.

It is possible to take part in the news conference through a conference call by registering through the link below:

http://palvelu.flik.fi/teleconference/?id=1009890

After the registration you will be provided phone numbers and a conference ID to access the conference. If you wish to ask a question during the conference, please dial *5 on your telephone keypad to enter the question queue.

All questions should be presented in English.

The event can also be followed on social media platform X at http://www.x.com/valmetir.

 

 

Further information, please contact:

Pekka Rouhiainen, VP, Investor Relations, Valmet, tel. +358 10 672 0020

 

 

VALMET

 

Katri Hokkanen

CFO

 

Pekka Rouhiainen

VP, Investor Relations

 

 

DISTRIBUTION:

Nasdaq Helsinki

Major media

www.valmet.com

 

Valmet is a leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. With our automation systems and flow control solutions, we serve an even wider base of process industries. Our 17,500 professionals around the world work close to our customers and are committed to moving our customers’ performance forward – every day.

 

The company has over 220 years of industrial history and a strong track record in continuous improvement and renewal. In 2022, a major milestone was achieved when the flow control company Neles was merged into Valmet. Valmet’s net sales in 2022 were approximately EUR 5.1 billion.
 

Valmet’s shares are listed on the Nasdaq Helsinki, and the head office is in Espoo, Finland.

 

Follow us on valmet.com | X | X (IR) | LinkedIn | Facebook | YouTube | Instagram |

 

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