Valmet's general presentation 2016 including Valmet in general, strategy, offering, R&D, customer highlights,

1. Valmet
Leading global developer and supplier
of process technologies, automation
and services for the pulp, paper and
energy industries

2. Contents
Valmet today
Offering
Financial performance
1
2
3
4 Strategy and Must-Wins
5 Summary

3. Valmet today
Strong global company with 12,000
employees

4. 2016 © Valmet4
Over 200 years of industrial history
1942
Rauma-
Raahe
1951
Valmet
1968-1996
Several M&As i.e.
1986 KMW
1987 Wärtsilä paper finishing machinery
1992 Tampella Papertech
1999
Metso created
through merger of
Valmet and Rauma
Key acquisitions
2000 Beloit Technology
2006 Kvaerner Pulping
Kvaerner Power
2009 Tamfelt
End of 2013
Demerger to
Valmet and Metso
1797 Tamfelt
1841 Götaverken
1856 Tampella
1858 Beloit
1860 KMW
1868 Sunds
Defibrator
2015
Metso Process
Automation Systems
to Valmet

5. Key figures
2016 © Valmet5
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

6. 20166 © Valmet
Strong, global presence - 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
• 3 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
Calculated number of personnel on December 31, 2015

7. 12,000 professionals serving customers globally
2016 © Valmet7
44 %
13 %
14 %
25 %
4 %
Systematic development
with global training
portfolio:
 Champions in Services
 Networking in
Procurement
 Leading through Lean
 Agility through Sales
 Excellence in Project
Management
 Fast Forward
 Forward Strategy
Personnel by business
line:
Other
Services
Pulp and Energy
Paper
Automation

8. One of the world’s sustainability leaders
2016 © Valmet8
• Valmet’s values, Code of Conduct and selected globally
acknowledged principles guide our operations
• Our Sustainability Agenda has concrete targets and actions
• We are included in Dow Jones World Sustainability Index already
for the second consecutive year
Sustainable
supply chain
Health,
safety and
environment
People and
performance
Sustainable
solutions
Corporate
citizenship
Sustainability Agenda focus areas

9. Significant, customer focused reasearch and
development work
2016 © Valmet9
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 year
2015
1,500
Protected
inventions

10. Four business lines and five areas
2016 © Valmet10
North America
South America
EMEA
China
Asia-Pacific
Services
business line
Pulp and Energy
business line
Paper
business line
Automation
business line
Finance Strategy and Operational Development
Marketing, Communications and SustainabilityHuman Resources

11. Business
lines
Executive Team
11
Pasi Laine
President and CEO
Kari Saarinen
CFO
Julia Macharey
SVP, Human Resources
Anu Salonsaari-Posti
SVP, Marketing, Communications
and Sustainability
Jukka Tiitinen
Business Line President,
Services
Bertel Karlstedt
Business Line President,
Pulp and Energy
Jari Vähäpesola
Business Line President,
Paper
William Bohn
Area President, North
America
Celso Tacla
Area President, South
America
Vesa Simola
Area President, EMEA
Aki Niemi
Area President, China
Hannu T. Pietilä
Area President, Asia-Pacific
2016 © Valmet
Sakari Ruotsalainen
Business Line President,
Automation
Areas
Juha Lappalainen
SVP, Strategy and
Operational Development

12. Offering
Unique offering to global customer
base

13. Global customer base
2016 © Valmet13
Pulp Paper Energy Process
Valmet is a registered trademark of Valmet Corporation. Other trademarks appearing here are trademarks of their respective owners.

14. 2016
Process technology, services and automation
Valmet’s unique offering differentiates the company from its competitors
© Valmet14
Customer
Process-
technology
Services Automation

15. Valmet has the widest offering and leading
market position in all markets
2016 © Valmet15
Services #1-2 Automation #1-3
Pulp #1-2 Energy #1-3 Board #1 Tissue #1 Paper #1

16. 2016
Our offering by business line
© Valmet16
Paper
• Recycled fiber lines
• Tailor-made board and paper machines
• Modularized board and paper machines
• Tissue production lines
• Modernizations and grade conversions
• Standalone products
Focus in customer benefits
Customer
Pulp and Energy
• Complete pulp mills
• Sections and solutions for pulp production
• Multifuel boilers
• Biomass and waste gasification
• Emission control systems
• Biotechnology solutions e.g. for
producing bio fuels
Automation
• Distributed control systems
• Quality control systems
• Analyzers and measurements
• Performance solutions
• Process simulators
• Safety solutions
• Industrial Internet solutions
Services
• Spare parts and consumables
• Paper machine clothing and
filter fabrics
• Rolls and workshop services
• Mill and plant improvements
• Maintenance outsourcing
• Services energy and
environmental solutions

17. Financial performance
Profitability improved in 2015

18. Financial targets
Revised in June, 2016
2016 © Valmet18
1) ROCE (pre-tax) = ( profit before taxes + interests and other financial expenses ) / ( balance sheet total - non-interest-bearing liabilities )
Dividend
policy
Profitability
Growth
ROCE
• Net sales for stable business to grow two times the
market growth
• Net sales for capital business to exceed market
growth
• Comparable EBITA: 8–10%
• Comparable return on capital employed (pre-tax),
ROCE1: 15–20%
• Dividend payout at least 50% of net profit

19. Summary of the year 2015
2016 © Valmet19
1) At the end of the period
2) Before non-recurring items
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 the net sales 6.2 % 4.3 %
Earnings per share, EUR 0.51 0.31 67 %
Dividend per share 0.35 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

20. 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
2016 © Valmet20
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)

21. Strategy and Must-Wins
Good results in Must-Win focus
areas

22. Megatrends – impacting our business
environment
2016 © Valmet22
 Climate change,
environmental awareness and
resource scarcity drive the
need to improve resource
efficiency and lower emissions
Resource efficient and
clean world
Digitalization and new
technologies
Aware, urban and global
customer
 Digitalization, automatization
and new high impact
technologies drive efficiency
and new business models
 Urbanization, increasing living
standards, changing
demographics, and
globalization drive changes in
consumer behavior

23. Valmet’s Way Forward
23
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
process technology,
services and automation to
the pulp, paper and energy
industries.
We are committed to
moving our customers’
performance forward with
our unique offering.
Our Mission
Converting renewable
resources into sustainable
results
Our Values
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
• Resource efficient and clean world
• Digitalization and new technologies
• Aware, urban and global consumer
Megatrends
2016 © Valmet

24. Key Must-Win objectives to achieve our strategic
goals
2016 © Valmet24
• Nurture shared values
• Drive high performance
• Continue globalization of our capabilities
• Strengthen our presence close to customers and growth markets
• Strengthen Key Account Management to serve customers with our full offering
• Provide customer benefits by combining process technology, automation and services
• Develop Valmet service concept, remote services and drive growth through service agreements
• Improve product cost competitiveness to increase gross profit and reduce customer investment
and operational costs
• Develop new products and technologies to create new revenue
• Sales and project management process to improve product margin
• Implement Lean to reduce quality costs and lead times
• Save in procurement and ensure sustainable supply chain
• Improve health and safety
• Continue to improve cost competitiveness
Must-Win implementation objectives for 2016Must-Wins
Leader in
technology and
innovation
Excellence
in processes
Customer
excellence
Winning
team

25. We provide our customers with the benefits of
Industrial Internet already today
2016 © Valmet25
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

26. Our new technologies have been successful in
the markets
2016 © Valmet26
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 for Metsä
Fibre’s Äänekoski
bioproductmill project
Renewed product
family launched
autumn 2015

27. Occupational safety, quality and procurement
savings has developed well
2016 © Valmet27
• Occupational safety has improved – year 2015 was safest ever
• Savings in procurement are ahead of targets
• Quality costs have decreased according to plan
10,1
8,3
6,4 5,5
3,3
2011 2012 2013 2014 2015
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

28. Our personnel’s engagement has developed positively and the
new training portfolio supports our strategic targets
2016 © Valmet28
• 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
56%
65%
2014 2015
Personnel
engagement
index
Results: Winning team
68 %
81 %
2014 2015

29. Summary

30. Valmet - Summary
 A leading process technology, automation and
services provider for pulp, paper, energy industries
– Unique and market’s widest offering including process
technology, automation and services
 12,000 professionals serving global customer base
 One of the world’s 300 sustainability leaders
 Net sales EUR 2.9 billion
– Almost half of the sales from stable Services and
Automation businesses
– Increasing global demand of tissue, board, pulp and
energy creates long-term growth possibilities
 Vision to become the global champion in serving our
customers
2016 © Valmet30