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President and CEO's review in Annual General Meeting 2016

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President and CEO's review in Annual General Meeting 2016

  1. 1. Successful Automation acquisition and strong development forward in 2015 Annual General Meeting March 22, 2016 Pasi Laine, President and CEO
  2. 2. Contents Valmet today 2015 in brief Strategy and progress in Must-Wins 1 2 3 4 Guidance and short-term market outlook
  3. 3. Valmet today Leading global developer and supplier of process technology, automation and services
  4. 4. Key figures March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 20164 Net sales by areaNet sales by business lineOrders received EUR 2,878 million Net sales EUR 2,928 million EBITA1 EUR 182 million EBITA1 margin 6.2% Employees 12,306 39% 8% 31% 23% Services Automation Pulp and Energy Paper 21% 11% 45% 10% 13% North America South America EMEA China Asia-Pacific 1) Before non-recurring items (NRI) Stable business = Services and Automation business lines Capital business = Pulp and Energy, and Paper business lines
  5. 5. The widest offering and leading market position in all markets March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 20165 Services #1-2 Automation #1-3 Pulp #1-2 Energy #1-3 Board #1 Tissue #1 Paper #1
  6. 6. March 22, 2016 Process technology, services and automation Valmet’s unique offering differentiates the company from its competitors © Valmet | Pasi Laine, President and CEO | Annual General Meeting 20166 Customer Process- technology Services Automation
  7. 7. March 22, 20167 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 2016 Strong, global presence is a good platform for growth North America 1,367 • 17 service centers • 7 production units • 8 sales offices EMEA 7,747 • 16 R&D centers • 63 service centers • 21 production units • 54 sales offices South America 531 • 2 service centers • 2 production units • 5 sales offices Asia-Pacific 706 • 10 service centers • 16 sales offices 100 service centers, 86 sales offices, 34 production units, 16 R&D centers China 1,955 • 8 service centers • 6 production units • 3 sales offices
  8. 8. One of the world’s sustainability leaders March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 20168 • Included in Dow Jones World Sustainability Index already for the second consecutive year • Systematic Sustainability Agenda Sustainable supply chain Health, safety and environment People and performance Responsible solutions Corporate citizenship
  9. 9. Significant, customer focused research and development work March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 20169 Focus areas • Advanced and competitive technologies and services • Raw material, water and energy efficiency • Promotion of renewable materials 16 research and development centers EUR 59 million investment in R&D in 2015 1,800 protected inventions
  10. 10. Global customer base March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201610 Pulp Paper Energy Process Valmet is a registered trademark of Valmet Corporation. Other trademarks appearing here are trademarks of their respective owners.
  11. 11. Dividend policy Financial targets March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201611 Profitability Growth ROCE Net sales growth to exceed market growth EBITA1 before non-recurring items: 6–9% Return on capital employed (pre-tax), ROCE 2: minimum of 15% Dividend payout at least 40% of net profit 1) EBITA before non-recurring items = operating profit + amortization + non-recurring items 2) ROCE (pre-tax) = ( profit before taxes + interests and other financial expenses ) / ( balance sheet total - non-interest-bearing liabilities )
  12. 12. 2015 in brief Successful Automation acquisition and profitability improvement
  13. 13. Summary of the year 2015 March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201613 1) At the end of the period 2) Before non-recurring items 3) Proposal of the Board of Directors EUR million 2015 2014 Change Orders received 2,878 3,071 -6% Order backlog1 2,074 1,998 4% Net sales 2,928 2,473 18% EBITA2 182 106 73% % of net sales 6.2% 4.3% Earnings per share, EUR 0.51 0.31 67% Dividend per share, EUR 0.353 0.25 40% Cash flow provided by operating activities 78 236 -67% Gearing at the end of the period 21% -21% Net debt 178 -166
  14. 14. 2.1% 4.3% 6.2% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 2013 2014 2015 EBITA (bef. NRI) margin Valmet’s development March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201614 Orders received (EUR million)1 1) 2013 figures on carve-out basis 2) Before non-recurring items Net sales (EUR million)1 EBITA1,2 EBITA margin1,2 Target 6–9% 1,035 1,055 1,341 1,147 2,016 1,537 2,182 3,071 2,878 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2013 2014 2015 Capital business Stable business 1,032 989 1,357 1,581 1,484 1,572 2,613 2,473 2,928 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2013 2014 2015 Capital business Stable business 54 106 182 0 20 40 60 80 100 120 140 160 180 200 2013 2014 2015 EBITA (bef. NRI)
  15. 15. Strategy and Must-Wins Good results in Must-Win focus areas
  16. 16. Valmet’s way forward Our Must-Wins  Customer excellence  Leader in technology and innovation  Excellence in processes  Winning team Our Vision To become the global champion in serving our customers Our Strategy Valmet develops and supplies competitive technology and services to the pulp, paper and energy industries. We are committed to moving our customers’ performance forward. Our Mission Converting renewable resources into sustainable results Our Values create and strengthen our culture Customers - We move our customers’ performance forward Renewal – We promote new ideas to create the future Excellence – We improve every day to deliver results People – We work together to make a difference Megatrends  Need for renewable solutions  Bio-economy and climate change  Increase in standards of living March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201616
  17. 17. We provide our customers with the benefits of Industrial Internet already today March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201617 Customer’s process Online connections Performance agreements with remote connections Co-creation of advanced analytics with customers Valmet-supplied lines with Valmet DCS 440 350 Condition Monitoring (CM) references with over 70,000 I/O tags 350 70,000 80 Advanced process control installations 320740 Ongoing Valmet’s remote center Valmet’s competence network Results: Customer Excellence
  18. 18. Our new technologies have been successful in the markets March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201618 Results: Leader in technology and innovation Advantage NTT tissue machineOptiConcept M board and paper machine 11 sold OptiConcept M machines 6 sold Advantage NTT machines Valmet IQ quality management solutionHigh Power RECOX recovery boiler First delivery to Metsä Fibre’s Äänekoski bioproduct mill project Renewed product family launched autumn 2015
  19. 19. Occupational safety, quality and procurement savings have developed well March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201619 • Occupational safety has improved – year 2015 was safest ever • Savings in procurement are ahead of targets • Quality costs have decreased according to plan Lost time incident frequency (LTIF) Quality costs Results: Excellence in processes Procurement savings 2014 2015 2016 Savings target Actual savings 2012 2013 2014 2015 2016 target EUR million % of net sales 10.1 8.3 6.4 5.5 3.3 2011 2012 2013 2014 2015
  20. 20. Our personnel’s engagement has developed positively and the new training portfolio supports our strategic targets March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201620 • 81% of employees responded to the engagement survey in 2015 • Personnel engagement increased by 9 percentage points • We launched a global training portfolio with 6 new training programs Participation in personnel engagement survey 68% 81% 2014 2015 56% 65% 2014 2015 Personnel engagement index Results: Winning team
  21. 21. Guidance and short term market outlook
  22. 22. Guidance and short-term market outlook 22 March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 2016 Satisfactory Pulp and Energy Paper Satisfactory Pulp Energy Board and Paper Tissue Guidance for 2016 Services Short-term market outlook Guidance for 2016 Good Weak Good Satisfactory Satisfactory Good Weak Good Satisfactory Q1/2015 Q2/2015 Satisfactory Good Weak Satisfactory Satisfactory Q3/2015 Satisfactory Satisfactory Good Satisfactory Q4/2015 Valmet estimates that net sales in 2016 will remain at the same level with 2015 (EUR 2,928 million) and EBITA before non-recurring items in 2016 will increase in comparison with 2015 (EUR 182 million). Satisfactory Satisfactory Satisfactory SatisfactoryAutomation The short-term market outlook is given for the next six months from the ending of the respective quarter.
  23. 23. Summary  Valmet is a global leader in its field  One of the world’s sustainability leaders for a second consecutive year  Process technology, services and automation - Unique product and service offering that differentiates from competitors  Systematic development of the company and profitability March 22, 2016 © Valmet | Pasi Laine, President and CEO | Annual General Meeting 201623

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