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Valmet's Interim Review January-September 2014

Valmet's Q3 2014 interim review shows improved profitability and a strong balance sheet, with net debt at EUR -158 million and cash flow from operating activities at EUR 117 million. Orders received increased in pulp, energy, and paper sectors, despite slower growth in capital business, leading to an order backlog of EUR 2.3 billion. The company aims for further profitability improvements and forecasts a decline in net sales for 2014 compared to 2013, while expecting an increase in EBITDA before non-recurring items.

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Profitability continued to improve and is moving towards the targeted level Interim Review, January–September 2014 October 24, 2014 Pasi Laine, President and CEO Markku Honkasalo, CFO
Agenda Q3/2014 in brief Business lines’ development Financial development Summary of Interim Review Q3/2014 Appendix 1 2 3 5 6 Interim Review, January–September 2014 Guidance and short-term market outlook4 October 24, 2014 © Valmet2
Q3/2014 in brief
• Orders received increased in Paper, and Pulp and Energy compared with Q3/2013 • Net sales increased in Pulp and Energy and decreased in Paper compared with Q3/2013 Orders received slowed down in capital business from high level in H1/2014 • Services orders on a par with Q3/2013 • Net sales decreased compared with Q3/2013 Orders received on a par with Q3/2013 in services October 24, 2014 © Valmet4 Q3/2014 in brief • EBITA margin improved compared with Q3/2013 and Q2/2014 • EBITA increased compared with Q2/2014 • SG&A expenses decreased by EUR 17 million compared with Q3/2013 • Gross profit increased by EUR 9 million compared with Q3/2013 • Further profitability improvement potential through savings in procurement and quality, by actions to improve project and service margin, by continuing to improve cost competitiveness, and by improving product cost competitiveness to increase gross profit Profitability continued to improve according to plan Strong balance sheet and good cash flow • Net debt EUR -158 million, and gearing -20% • Cash flow provided by operating activities EUR 117 million • Order backlog EUR 914 million higher than at the beginning of the year Order backlog at EUR 2.3 billion EBITA = Earnings before interest, taxes and amortization and non-recurring items
Key figures Q3/2014 October 24, 2014 © Valmet5 EUR million Q3/2014 Q3/2013 Change Q1-Q3/2014 Q1-Q3/2013 Change Orders received 466 382 22% 2,590 1,754 48% Order backlog1 2,312 1,658 39% 2,312 1,658 39% Net sales 590 601 -2% 1,697 1,946 -13% EBITA2 32 31 4% 58 79 -27% % of net sales 5.5% 5.1% 3.4% 4.1% EBIT3 26 -17 35 7 >100% % of net sales 4.4% -2.8% 2.1% 0.4% Earnings per share, EUR 0.11 -0.105 0.14 -0.015 Return on capital employed (ROCE), before taxes4 6% 1% Cash flow provided by operating activities 117 12 >100% 206 -5 Gearing1 -20% 0% Non-recurring items: EUR -1 million in Q3/2014 (EUR -41 million in Q3/2013), EUR -7 million in Q1-Q3/2014 (EUR -52 million in Q1-Q3/2013) 1) At the end of period 2) Before non-recurring items 3) After non-recurring items 4) Annualized 5) The earnings per share information was computed as if the shares issued in conjunction with the Demerger had been outstanding for the comparison period. The comparison figures are based on financial carve-out data. The balance sheet and its related key figures as at December 31, 2013 are based on actual figures.
282 281 237 233 267 273 242 61 452 66 102 622 560 96 168 128 80 93 212 190 128 511 861 382 428 1,101 1,023 466 0 500 1,000 1,500 2,000 2,500 3,000 0 200 400 600 800 1,000 1,200 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Services (LHS) Pulp and Energy (LHS) Paper (LHS) Last 4 quarters (RHS) 121 94 104 92 185 82 135 69 402 20 45 24 194 23 212 214 201 178 437 567 189 33 103 31 74 34 120 53 76 47 27 39 422 60 66 511 861 382 428 1,101 1,023 466 0 500 1,000 1,500 2,000 2,500 3,000 0 200 400 600 800 1,000 1,200 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 North America (LHS) South America (LHS) EMEA (LHS) China (LHS) Asia-Pacific (LHS) Last 4 quarters (RHS) Orders received EUR 2.6 billion in Q1-Q3/2014 • Orders received at the previous year’s level in Services • Orders received increased in Pulp and Energy • Orders received increased in Paper • Orders received increased in North America, Asia-Pacific, and China October 24, 2014 © Valmet6 Orders received (EUR million), by business line Orders received (EUR million), by area
1,807 1,883 1,658 1,398 1,972 2,406 2,312 0 500 1,000 1,500 2,000 2,500 3,000 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Order backlog at EUR 2.3 billion • Order backlog EUR 914 million higher that at the end of 2013 • Approximately 20% of the order backlog relates to the Services business line October 24, 2014 © Valmet7 Order backlog (EUR million) ~20% ~80% Services business Capital business Structure of order backlog Cancelled Fibria order of EUR 331 million excluded from Q1/2013 figures +65%
EBITA target 6–9% Net sales and profitability development October 24, 2014 © Valmet8 Net sales and EBITA before NRI (EUR million) • Net sales stable compared with Q3/2013 • Profitability on an improving trend since Q4/2013 EBITA before NRI (MEUR) 22 31 -25 4 2226 32 243 256 256 274 224 251 235 631 714 601 666 519 588 590 4.1% 3.1% 5.1% -3.7% 0.7% 3.7% 5.5% Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Services Capital EBITA-%
0% 5% 10% 15% 20% 25% 30% 35% 0 20 40 60 80 100 120 140 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 EUR million (LHS) % of net sales (RHS) 0% 5% 10% 15% 20% 25% 30% 35% 0 20 40 60 80 100 120 140 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 EUR million (LHS) % of net sales (RHS) Good development in gross profit and SG&A expenses October 24, 2014 © Valmet9 Gross profit (EUR million and % of net sales) • Selling, general and administrative expenses (SG&A) declined further • Gross profit improved • Further actions to improve gross profit through Must-Win implementation SG&A (EUR million and % of net sales)
Key Must-Win objectives to improve profitability to the targeted level of 6–9% October 24, 2014 © Valmet10 Improve project and service margin  Harmonization of processes  Localization of competencies  Better selection of sales cases  Development in project management  Common quality development approach  Quality tools and processes  Highlight the importance of quality initiatives and accountability Reduce quality costs and lead times  Increase sourcing from cost competitive countries  Increase use of sub-contracting  Consolidation of shipment and warehouse network Savings in procurement Continue to improve cost competitiveness  Focus on cost competitiveness also after the EUR 100 million program Improve product cost competitiveness to increase gross profit  Focus on cost efficient design  Modularity and standardization
Business lines’ development
282 281 237 233 267 273 242 0 200 400 600 800 1,000 1,200 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Orders received (LHS) Orders received, last 4 quarters (RHS) 243 256 256 274 224 251 235 0 200 400 600 800 1,000 1,200 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net sales (LHS) Net sales, last 4 quarters (RHS) Stable development in Services October 24, 2014 © Valmet12 Net sales (EUR million)Orders received (EUR million) • Services orders received stable compared with Q3/2013 - Orders received increased in South America, Asia-Pacific and China, and remained stable in other areas - Orders received increased in Mill Improvements, and Rolls business units, and declined in Fabrics • Orders received stable in Q1-Q3/2014 compared with Q1-Q3/2013 • Net sales decreased compared with Q3/2013 Q1-Q3/2014: EUR 782 million Q1-Q3/2013: EUR 799 million Q1-Q3/2014: EUR 711 million Q1-Q3/2013: EUR 756 million
61 452 66 102 622 560 96 0 200 400 600 800 1,000 1,200 1,400 1,600 0 100 200 300 400 500 600 700 800 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Orders received (LHS) Orders received, last 4 quarters (RHS) 221 240 206 240 181 229 234 0 200 400 600 800 1,000 1,200 1,400 1,600 0 50 100 150 200 250 300 350 400 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net sales (LHS) Net sales, last 4 quarters (RHS) Orders received about EUR 1.3 bn in Q1-Q3/2014 in Pulp and Energy October 24, 2014 © Valmet13 Net sales (EUR million)Orders received (EUR million) • Orders received increased compared with Q3/2013 - Orders received increased in EMEA and Asia-Pacific, and declined in North America - Orders received increased in Pulp, and remained stable compared with Q3/2013 in Energy • Orders received more than doubled in Q1-Q3/2014 compared with Q1-Q3/2013 • Net sales increased compared with Q3/2013 Q1-Q3/2013: EUR 667 million Q1-Q3/2013: EUR 579 million Q1-Q3/2014: EUR 644 million Q1-Q3/2014: EUR 1,279 million
168 128 80 93 212 190 128 0 150 300 450 600 750 900 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Orders received (LHS) Orders received, last 4 quarters (RHS) 167 218 139 152 114 108 120 0 150 300 450 600 750 900 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net sales (LHS) Net sales, last 4 quarters (RHS) Orders received exceeded EUR 500 million in Q1-Q3/2014 in Paper October 24, 2014 © Valmet14 Net sales (EUR million)Orders received (EUR million) Q1-Q3/2013: EUR 524 million Q1-Q3/2013: EUR 376 million • Orders received increased compared with Q3/2013 - Orders received increased in North America, Asia-Pacific, and China, and declined in EMEA - Orders received increased in Board and Paper, and declined in Tissue • Orders received increased in Q1-Q3/2014 compared with Q1-Q3/2013 • Net sales decreased compared with Q3/2013 Q1-Q3/2014: EUR 342 million Q1-Q3/2014: EUR 530 million
Latest development in sustainability  Valmet has defined a sustainability agenda as part of the implementation of its business strategy  Valmet has been selected for the world’s leading Dow Jones Sustainability Index among three (3) other Finnish companies  Valmet scored high points in CDP climate change index and was included in the Nordic Climate Disclosure Leadership Index (CDLI)  Join the discussion to develop Valmet’s sustainability performance further at Valmet’s website October 24, 2014 © Valmet15
Financial development
-5 -12 12 -38 43 46 117 -60 -40 -20 0 20 40 60 80 100 120 140 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Good cash flow October 24, 2014 © Valmet17 • At the end of September 2014, net working capital was EUR -345 million • CAPEX less than depreciation Cash flow provided by operating activities (EUR million)
30 71 0 -1 -39 -54 -158 3% 8% 0% 0% -5% -7% -20% -20% -15% -10% -5% 0% 5% 10% 15% 20% -200 -150 -100 -50 0 50 100 150 200 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net debt (EUR million) Gearing (%) 40% 39% 39% 41% 40% 40% 41% 30% 35% 40% 45% Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net debt, gearing and equity to assets ratio October 24, 2014 © Valmet18 • Negative gearing (-20%) and net debt EUR -158 million Net debt (EUR million) and gearing (%) Equity to assets ratio (%)
200* 24 60 15 1 0 50 100 150 200 250 2014 2015 2016 2017 2018 Structure of loans and borrowings October 24, 2014 © Valmet19 Maturity profile of interest-bearing debt (EUR millions) *) EUR 200 million syndicated revolving credit facility, of which none is outstanding as of September 30, 2014. • Average maturity of long-term loans is 2.8 years EUR 82 million EIB loan  Maturing in: H2/2016 EUR 18 million other financing sources EUR 200 million domestic commercial paper program • None outstanding EUR 200 million syndicated revolving credit facility • None outstanding • Maturity: December 2018 Main financing sources Back-up facilities Amount of outstanding interest-bearing debt: EUR 100 million (Sep 30, 2014)
Guidance and short- term market outlook
Guidance and short-term market outlook 21 October 24, 2014 © Valmet Valmet estimates that net sales in 2014 will decline from the 2013 level and EBITA before non-recurring items will increase in comparison with 2013 Pulp and Energy Paper Satisfactory Pulp Energy Board and Paper Tissue Guidance for 2014 Services Short-term market outlook Guidance for 2014 (as given on February 6, 2014) Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Q4/2013 Q1/2014 Satisfactory Satisfactory Satisfactory Good Satisfactory Q2/2014 Satisfactory Satisfactory Satisfactory Good Satisfactory Q3/2014
Summary of Interim Review Q3/2014
Summary of Interim Review Q3/2014 October 24, 2014 © Valmet23 Orders received stable in services and slowed down in capital business from high level in H1/2014 Net sales on previous year’s level in Q3/2014 Order backlog at EUR 2.3 billion Profitability improved according to plan Strong balance sheet and good cash flow
Capital Markets Day 2015 March 19, London Questions & Answers Financial Statements Review for 2014 will be published on February 6, 2015 October 24, 2014 © Valmet24
Appendix
© Valmet26 October 24, 2014 Largest shareholders on September 30, 2014 Based on the information given by Euroclear Finland Ltd. # Shareholder name Number of shares % of shares and votes 1 Solidium Oy1 16,695,287 11.14% 2 Nordea Funds 7,400,342 4.94% 3 Solero Luxco Sarl 5,349,756 3.57% 4 Ilmarinen Mutual Pension Insurance Company 3,092,126 2.06% 5 Varma Mutual Pension Insurance Company 2,908,465 1.94% 6 The State Pension Fund 1,720,000 1.15% 7 Keva 1,543,015 1.03% 8 Mandatum Life Insurance Company Limited 1,500,307 1.00% 9 Skagen Global Verdipapirfond 999,190 0.67% 10 OP Funds 841,911 0.56% 10 largest shareholders, total 42,050,399 28.06% Other shareholders 107,814,220 71.94% Total 149,864,619 100.00% 1) A holding company that is wholly owned by the Finnish State Date Shareholder name Number of shares % of shares and votes October 15, 2014 Franklin Templeton Institutional, LLC 7,517,629 5.02% September 4, 2014 Nordea Funds Oy 7,513,864 5.01% March 10, 2014 Cevian Capital Partners Ltd. 20,813,714 13.89% Flagging notifications
52.0% 21.9% 11.1% 14.9% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations Solidium Oy Finnish private investors © Valmet27 October 24, 2014 1) A holding company that is wholly owned by the Finnish State Ownership structure on September 30, 2014 Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and non-Finnish holders 315 0.6% 77,935,075 52.0% Finnish institutions, companies and foundations 3,107 6.0% 32,835,062 21.9% Solidium Oy1 0 0.0% 16,695,287 11.1% Finnish private investors 48,360 93.4% 22,399,195 14.9% Total 51,782 100.0% 149,864,619 100.0% The ownership structure is based on the classification of sectors determined by Statistics Finland.
50,000 51,000 52,000 53,000 54,000 55,000 56,000 57,000 58,000 59,000 60,000 45% 46% 47% 48% 49% 50% 51% 52% 53% 54% 55% 12/2013 01/2014 02/2014 03/2014 04/2014 05/2014 06/2014 07/2014 08/2014 09/2014 Non-Finnish holders (LHS) Total number of shareholders (RHS) © Valmet28 October 24, 2014 Share of non-Finnish holders and number of shareholders
10 20 30 40 50 4 5 6 7 8 9 10 11 12 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint (LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) 10 15 20 25 30 35 40 5 7 9 11 13 15 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint (LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) 5 15 25 35 45 55 2 4 6 8 10 12 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint (LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) 5 10 15 20 25 30 35 3 4 5 6 7 8 9 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint (LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) Paper, board, and tissue production trends October 24, 2014 © Valmet29 Source: RISI North America (million tonnes) Europe (million tonnes) China (million tonnes) Asia-Pacific (million tonnes)
Paper, board, and tissue operating rates October 24, 2014 © Valmet30 Source: RISI North America Europe China Asia-Pacific 75% 80% 85% 90% 95% 100% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard 80% 85% 90% 95% 100% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard 70% 75% 80% 85% 90% 95% 100% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard 80% 82% 84% 86% 88% 90% 92% 94% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard
Paper and board consumption growth trends October 24, 2014 © Valmet31 Population growth in emerging markets is larger than in developed markets Level of consumption per capita in emerging markets clearly below that in developed markets This offers us long- term growth potential Paper and board consumption per capita vs. population Average global consumption: 53 kg per capita Source: RISI 0 500 1,000 1,500 2,000 2,500 0 50 100 150 200 250 EasternEurope WesternEurope NorthAmerica LatinAmerica Japan China RestofAsia Oceania Africa MiddleEast Consumption per capita, kg (LHS) Population, million (RHS)
0 5 10 15 20 25 0 500 1,000 1,500 2,000 2,500 EasternEurope WesternEurope NorthAmerica LatinAmerica Japan China RestofAsia Oceania Africa MiddleEast Population, million (LHS) Consumption per capita, kg (RHS) Tissue consumption growth trends October 24, 2014 © Valmet32 New products and consumption models based on tissue are helping increase consumption in developed markets Consumption in emerging markets is still low, but growing Offers us long-term growth potential in both developed and emerging markets Tissue consumption per capita vs. population Average global consumption: 4.5 kg per capita Source: RISI
0 200 400 600 800 1,000 1,200 1-Dec-07 1-Mar-08 1-Jun-08 1-Sep-08 1-Dec-08 1-Mar-09 1-Jun-09 1-Sep-09 1-Dec-09 1-Mar-10 1-Jun-10 1-Sep-10 1-Dec-10 1-Mar-11 1-Jun-11 1-Sep-11 1-Dec-11 1-Mar-12 1-Jun-12 1-Sep-12 1-Dec-12 1-Mar-13 1-Jun-13 1-Sep-13 1-Dec-13 1-Mar-14 1-Jun-14 1-Sep-14 Eucalyptus pulp (USD/t) Northern bleached softwood pulp (USD/t) Uncoated (USD/t) Copy paper (EUR/t) Testliner (EUR/t) Pulp and paper price trends October 24, 2014 © Valmet33 Source: Bloomberg
0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140 160 180 1-Jan-10 1-Jun-10 1-Nov-10 1-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 CIF ARA steam coal (USD/t) (LHS) Brent crude oil (USD/barrel) (LHS) Natural gas spot price NBP (GBP/therm) (RHS) 0 20 40 60 80 100 120 0 20 40 60 80 100 1-Jan-10 1-Jun-10 1-Nov-10 1-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 European Energy Exchange, Phelix (EUR/MWh) (LHS) Nordpool Power (EUR/MWh) (LHS) UK Baseload (GBP/MWh) (RHS) Crude oil, steam coal, natural gas and electricity October 24, 2014 © Valmet34 Source: Bloomberg Europe
0 1 2 3 4 5 6 7 0 20 40 60 80 100 120 140 1-Jan-10 1-Jun-10 1-Nov-10 1-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 70 75 80 85 90 0 50 100 150 200 1-Jan-10 1-Jun-10 1-Nov-10 1-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 Electricity spot price, PJM (USD/MWh) (LHS) Electricity spot price, NEPOOL (USD/MWh) (LHS) US utility capacity utilization rate (RHS) Crude oil, steam coal, natural gas and electricity October 24, 2014 © Valmet35 Source: Bloomberg United States
0 1 2 3 4 5 6 7 8 9 2-Nov-12 23-Nov-12 14-Dec-12 4-Jan-13 25-Jan-13 15-Feb-13 8-Mar-13 29-Mar-13 19-Apr-13 10-May-13 31-May-13 21-Jun-13 12-Jul-13 2-Aug-13 23-Aug-13 13-Sep-13 4-Oct-13 25-Oct-13 15-Nov-13 6-Dec-13 27-Dec-13 17-Jan-14 7-Feb-14 28-Feb-14 21-Mar-14 11-Apr-14 2-May-14 23-May-14 13-Jun-14 4-Jul-14 25-Jul-14 15-Aug-14 5-Sep-14 26-Sep-14 European Energy Exchange (EEX) spot price (EUR/t) European Carbon Emission Allowance October 24, 2014 © Valmet36 Source: Bloomberg
Important notice IMPORTANT: You must read the following before continuing. 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 accessing the Information, you agree to be bound by the following terms and conditions. The Information is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Information is not for publication, release or distribution in the United States, the United Kingdom, Australia, Canada or Japan. The Information does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase any securities, and nothing contained therein shall form the basis of or be relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding any securities. Prospective investors are required to make their own independent investigations and appraisals of the business and financial condition of the Company before taking any investment decision with respect to securities of the Company. Prospective investors should make any investment decision solely on the basis of the information contained in the demerger prospectus published on September 23, 2013 and any stock exchange releases regarding the Company following the publication of the demerger prospectus. No securities of the Company are being offered or sold, directly or indirectly, in or into the United States and no shares in the Company have been, or will be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any state of the United States and, accordingly, may not be offered or sold, directly or indirectly, in or into the United States (as defined in Regulation S under the Securities Act), unless registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable state securities laws of the United States. The Information is directed solely at: (i) persons outside the United Kingdom, (ii) persons with professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”), (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order and (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities of the Company or any member of its group may otherwise lawfully be communicated or caused to be communicated (all such persons in (i)-(iv) above being “Relevant Persons”). Any investment activity to which the Information relates will only be available to and will only be engaged with Relevant Persons. Any person who is not a Relevant Person should not act or rely on the Information. By accessing the Information, you represent that you are a Relevant Person. The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forward- looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward- looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Information or the opinions contained therein. The Information has not been independently verified and will not be updated. The Information, including but not limited to forward- looking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company’s expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document. Market data used in the Information not attributed to a specific source are estimates of the Company and have not been independently verified. October 24, 2014 © Valmet37
Valmet's Interim Review January-September 2014

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Valmet's Interim Review January-September 2014

  • 1.
    Profitability continued to improveand is moving towards the targeted level Interim Review, January–September 2014 October 24, 2014 Pasi Laine, President and CEO Markku Honkasalo, CFO
  • 2.
    Agenda Q3/2014 in brief Businesslines’ development Financial development Summary of Interim Review Q3/2014 Appendix 1 2 3 5 6 Interim Review, January–September 2014 Guidance and short-term market outlook4 October 24, 2014 © Valmet2
  • 3.
  • 4.
    • Orders receivedincreased in Paper, and Pulp and Energy compared with Q3/2013 • Net sales increased in Pulp and Energy and decreased in Paper compared with Q3/2013 Orders received slowed down in capital business from high level in H1/2014 • Services orders on a par with Q3/2013 • Net sales decreased compared with Q3/2013 Orders received on a par with Q3/2013 in services October 24, 2014 © Valmet4 Q3/2014 in brief • EBITA margin improved compared with Q3/2013 and Q2/2014 • EBITA increased compared with Q2/2014 • SG&A expenses decreased by EUR 17 million compared with Q3/2013 • Gross profit increased by EUR 9 million compared with Q3/2013 • Further profitability improvement potential through savings in procurement and quality, by actions to improve project and service margin, by continuing to improve cost competitiveness, and by improving product cost competitiveness to increase gross profit Profitability continued to improve according to plan Strong balance sheet and good cash flow • Net debt EUR -158 million, and gearing -20% • Cash flow provided by operating activities EUR 117 million • Order backlog EUR 914 million higher than at the beginning of the year Order backlog at EUR 2.3 billion EBITA = Earnings before interest, taxes and amortization and non-recurring items
  • 5.
    Key figures Q3/2014 October24, 2014 © Valmet5 EUR million Q3/2014 Q3/2013 Change Q1-Q3/2014 Q1-Q3/2013 Change Orders received 466 382 22% 2,590 1,754 48% Order backlog1 2,312 1,658 39% 2,312 1,658 39% Net sales 590 601 -2% 1,697 1,946 -13% EBITA2 32 31 4% 58 79 -27% % of net sales 5.5% 5.1% 3.4% 4.1% EBIT3 26 -17 35 7 >100% % of net sales 4.4% -2.8% 2.1% 0.4% Earnings per share, EUR 0.11 -0.105 0.14 -0.015 Return on capital employed (ROCE), before taxes4 6% 1% Cash flow provided by operating activities 117 12 >100% 206 -5 Gearing1 -20% 0% Non-recurring items: EUR -1 million in Q3/2014 (EUR -41 million in Q3/2013), EUR -7 million in Q1-Q3/2014 (EUR -52 million in Q1-Q3/2013) 1) At the end of period 2) Before non-recurring items 3) After non-recurring items 4) Annualized 5) The earnings per share information was computed as if the shares issued in conjunction with the Demerger had been outstanding for the comparison period. The comparison figures are based on financial carve-out data. The balance sheet and its related key figures as at December 31, 2013 are based on actual figures.
  • 6.
    282 281 237233 267 273 242 61 452 66 102 622 560 96 168 128 80 93 212 190 128 511 861 382 428 1,101 1,023 466 0 500 1,000 1,500 2,000 2,500 3,000 0 200 400 600 800 1,000 1,200 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Services (LHS) Pulp and Energy (LHS) Paper (LHS) Last 4 quarters (RHS) 121 94 104 92 185 82 135 69 402 20 45 24 194 23 212 214 201 178 437 567 189 33 103 31 74 34 120 53 76 47 27 39 422 60 66 511 861 382 428 1,101 1,023 466 0 500 1,000 1,500 2,000 2,500 3,000 0 200 400 600 800 1,000 1,200 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 North America (LHS) South America (LHS) EMEA (LHS) China (LHS) Asia-Pacific (LHS) Last 4 quarters (RHS) Orders received EUR 2.6 billion in Q1-Q3/2014 • Orders received at the previous year’s level in Services • Orders received increased in Pulp and Energy • Orders received increased in Paper • Orders received increased in North America, Asia-Pacific, and China October 24, 2014 © Valmet6 Orders received (EUR million), by business line Orders received (EUR million), by area
  • 7.
    1,807 1,883 1,658 1,398 1,972 2,406 2,312 0 500 1,000 1,500 2,000 2,500 3,000 Q1/13Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Order backlog at EUR 2.3 billion • Order backlog EUR 914 million higher that at the end of 2013 • Approximately 20% of the order backlog relates to the Services business line October 24, 2014 © Valmet7 Order backlog (EUR million) ~20% ~80% Services business Capital business Structure of order backlog Cancelled Fibria order of EUR 331 million excluded from Q1/2013 figures +65%
  • 8.
    EBITA target 6–9% Netsales and profitability development October 24, 2014 © Valmet8 Net sales and EBITA before NRI (EUR million) • Net sales stable compared with Q3/2013 • Profitability on an improving trend since Q4/2013 EBITA before NRI (MEUR) 22 31 -25 4 2226 32 243 256 256 274 224 251 235 631 714 601 666 519 588 590 4.1% 3.1% 5.1% -3.7% 0.7% 3.7% 5.5% Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Services Capital EBITA-%
  • 9.
    0% 5% 10% 15% 20% 25% 30% 35% 0 20 40 60 80 100 120 140 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 EUR million (LHS)% of net sales (RHS) 0% 5% 10% 15% 20% 25% 30% 35% 0 20 40 60 80 100 120 140 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 EUR million (LHS) % of net sales (RHS) Good development in gross profit and SG&A expenses October 24, 2014 © Valmet9 Gross profit (EUR million and % of net sales) • Selling, general and administrative expenses (SG&A) declined further • Gross profit improved • Further actions to improve gross profit through Must-Win implementation SG&A (EUR million and % of net sales)
  • 10.
    Key Must-Win objectivesto improve profitability to the targeted level of 6–9% October 24, 2014 © Valmet10 Improve project and service margin  Harmonization of processes  Localization of competencies  Better selection of sales cases  Development in project management  Common quality development approach  Quality tools and processes  Highlight the importance of quality initiatives and accountability Reduce quality costs and lead times  Increase sourcing from cost competitive countries  Increase use of sub-contracting  Consolidation of shipment and warehouse network Savings in procurement Continue to improve cost competitiveness  Focus on cost competitiveness also after the EUR 100 million program Improve product cost competitiveness to increase gross profit  Focus on cost efficient design  Modularity and standardization
  • 11.
  • 12.
    282 281 237 233 267273 242 0 200 400 600 800 1,000 1,200 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Orders received (LHS) Orders received, last 4 quarters (RHS) 243 256 256 274 224 251 235 0 200 400 600 800 1,000 1,200 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net sales (LHS) Net sales, last 4 quarters (RHS) Stable development in Services October 24, 2014 © Valmet12 Net sales (EUR million)Orders received (EUR million) • Services orders received stable compared with Q3/2013 - Orders received increased in South America, Asia-Pacific and China, and remained stable in other areas - Orders received increased in Mill Improvements, and Rolls business units, and declined in Fabrics • Orders received stable in Q1-Q3/2014 compared with Q1-Q3/2013 • Net sales decreased compared with Q3/2013 Q1-Q3/2014: EUR 782 million Q1-Q3/2013: EUR 799 million Q1-Q3/2014: EUR 711 million Q1-Q3/2013: EUR 756 million
  • 13.
    61 452 66 102 622 560 96 0 200 400 600 800 1,000 1,200 1,400 1,600 0 100 200 300 400 500 600 700 800 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Orders received(LHS) Orders received, last 4 quarters (RHS) 221 240 206 240 181 229 234 0 200 400 600 800 1,000 1,200 1,400 1,600 0 50 100 150 200 250 300 350 400 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net sales (LHS) Net sales, last 4 quarters (RHS) Orders received about EUR 1.3 bn in Q1-Q3/2014 in Pulp and Energy October 24, 2014 © Valmet13 Net sales (EUR million)Orders received (EUR million) • Orders received increased compared with Q3/2013 - Orders received increased in EMEA and Asia-Pacific, and declined in North America - Orders received increased in Pulp, and remained stable compared with Q3/2013 in Energy • Orders received more than doubled in Q1-Q3/2014 compared with Q1-Q3/2013 • Net sales increased compared with Q3/2013 Q1-Q3/2013: EUR 667 million Q1-Q3/2013: EUR 579 million Q1-Q3/2014: EUR 644 million Q1-Q3/2014: EUR 1,279 million
  • 14.
    168 128 80 93 212 190 128 0 150 300 450 600 750 900 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Orders received(LHS) Orders received, last 4 quarters (RHS) 167 218 139 152 114 108 120 0 150 300 450 600 750 900 0 50 100 150 200 250 300 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net sales (LHS) Net sales, last 4 quarters (RHS) Orders received exceeded EUR 500 million in Q1-Q3/2014 in Paper October 24, 2014 © Valmet14 Net sales (EUR million)Orders received (EUR million) Q1-Q3/2013: EUR 524 million Q1-Q3/2013: EUR 376 million • Orders received increased compared with Q3/2013 - Orders received increased in North America, Asia-Pacific, and China, and declined in EMEA - Orders received increased in Board and Paper, and declined in Tissue • Orders received increased in Q1-Q3/2014 compared with Q1-Q3/2013 • Net sales decreased compared with Q3/2013 Q1-Q3/2014: EUR 342 million Q1-Q3/2014: EUR 530 million
  • 15.
    Latest development insustainability  Valmet has defined a sustainability agenda as part of the implementation of its business strategy  Valmet has been selected for the world’s leading Dow Jones Sustainability Index among three (3) other Finnish companies  Valmet scored high points in CDP climate change index and was included in the Nordic Climate Disclosure Leadership Index (CDLI)  Join the discussion to develop Valmet’s sustainability performance further at Valmet’s website October 24, 2014 © Valmet15
  • 16.
  • 17.
    -5 -12 12 -38 43 46 117 -60 -40 -20 0 20 40 60 80 100 120 140 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Goodcash flow October 24, 2014 © Valmet17 • At the end of September 2014, net working capital was EUR -345 million • CAPEX less than depreciation Cash flow provided by operating activities (EUR million)
  • 18.
    30 71 0 -1 -39-54 -158 3% 8% 0% 0% -5% -7% -20% -20% -15% -10% -5% 0% 5% 10% 15% 20% -200 -150 -100 -50 0 50 100 150 200 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net debt (EUR million) Gearing (%) 40% 39% 39% 41% 40% 40% 41% 30% 35% 40% 45% Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net debt, gearing and equity to assets ratio October 24, 2014 © Valmet18 • Negative gearing (-20%) and net debt EUR -158 million Net debt (EUR million) and gearing (%) Equity to assets ratio (%)
  • 19.
    200* 24 60 15 1 0 50 100 150 200 250 2014 2015 20162017 2018 Structure of loans and borrowings October 24, 2014 © Valmet19 Maturity profile of interest-bearing debt (EUR millions) *) EUR 200 million syndicated revolving credit facility, of which none is outstanding as of September 30, 2014. • Average maturity of long-term loans is 2.8 years EUR 82 million EIB loan  Maturing in: H2/2016 EUR 18 million other financing sources EUR 200 million domestic commercial paper program • None outstanding EUR 200 million syndicated revolving credit facility • None outstanding • Maturity: December 2018 Main financing sources Back-up facilities Amount of outstanding interest-bearing debt: EUR 100 million (Sep 30, 2014)
  • 20.
  • 21.
    Guidance and short-termmarket outlook 21 October 24, 2014 © Valmet Valmet estimates that net sales in 2014 will decline from the 2013 level and EBITA before non-recurring items will increase in comparison with 2013 Pulp and Energy Paper Satisfactory Pulp Energy Board and Paper Tissue Guidance for 2014 Services Short-term market outlook Guidance for 2014 (as given on February 6, 2014) Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Q4/2013 Q1/2014 Satisfactory Satisfactory Satisfactory Good Satisfactory Q2/2014 Satisfactory Satisfactory Satisfactory Good Satisfactory Q3/2014
  • 22.
  • 23.
    Summary of InterimReview Q3/2014 October 24, 2014 © Valmet23 Orders received stable in services and slowed down in capital business from high level in H1/2014 Net sales on previous year’s level in Q3/2014 Order backlog at EUR 2.3 billion Profitability improved according to plan Strong balance sheet and good cash flow
  • 24.
    Capital Markets Day 2015 March19, London Questions & Answers Financial Statements Review for 2014 will be published on February 6, 2015 October 24, 2014 © Valmet24
  • 25.
  • 26.
    © Valmet26 October24, 2014 Largest shareholders on September 30, 2014 Based on the information given by Euroclear Finland Ltd. # Shareholder name Number of shares % of shares and votes 1 Solidium Oy1 16,695,287 11.14% 2 Nordea Funds 7,400,342 4.94% 3 Solero Luxco Sarl 5,349,756 3.57% 4 Ilmarinen Mutual Pension Insurance Company 3,092,126 2.06% 5 Varma Mutual Pension Insurance Company 2,908,465 1.94% 6 The State Pension Fund 1,720,000 1.15% 7 Keva 1,543,015 1.03% 8 Mandatum Life Insurance Company Limited 1,500,307 1.00% 9 Skagen Global Verdipapirfond 999,190 0.67% 10 OP Funds 841,911 0.56% 10 largest shareholders, total 42,050,399 28.06% Other shareholders 107,814,220 71.94% Total 149,864,619 100.00% 1) A holding company that is wholly owned by the Finnish State Date Shareholder name Number of shares % of shares and votes October 15, 2014 Franklin Templeton Institutional, LLC 7,517,629 5.02% September 4, 2014 Nordea Funds Oy 7,513,864 5.01% March 10, 2014 Cevian Capital Partners Ltd. 20,813,714 13.89% Flagging notifications
  • 27.
    52.0% 21.9% 11.1% 14.9% Nominee registered andnon-Finnish holders Finnish institutions, companies and foundations Solidium Oy Finnish private investors © Valmet27 October 24, 2014 1) A holding company that is wholly owned by the Finnish State Ownership structure on September 30, 2014 Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and non-Finnish holders 315 0.6% 77,935,075 52.0% Finnish institutions, companies and foundations 3,107 6.0% 32,835,062 21.9% Solidium Oy1 0 0.0% 16,695,287 11.1% Finnish private investors 48,360 93.4% 22,399,195 14.9% Total 51,782 100.0% 149,864,619 100.0% The ownership structure is based on the classification of sectors determined by Statistics Finland.
  • 28.
    50,000 51,000 52,000 53,000 54,000 55,000 56,000 57,000 58,000 59,000 60,000 45% 46% 47% 48% 49% 50% 51% 52% 53% 54% 55% 12/2013 01/2014 02/201403/2014 04/2014 05/2014 06/2014 07/2014 08/2014 09/2014 Non-Finnish holders (LHS) Total number of shareholders (RHS) © Valmet28 October 24, 2014 Share of non-Finnish holders and number of shareholders
  • 29.
    10 20 30 40 50 4 5 6 7 8 9 10 11 12 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint(LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) 10 15 20 25 30 35 40 5 7 9 11 13 15 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint (LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) 5 15 25 35 45 55 2 4 6 8 10 12 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint (LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) 5 10 15 20 25 30 35 3 4 5 6 7 8 9 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tissue (LHS) Newsprint (LHS) Printing & Writing (RHS) Containerboard (RHS) Cartonboard (RHS) Paper, board, and tissue production trends October 24, 2014 © Valmet29 Source: RISI North America (million tonnes) Europe (million tonnes) China (million tonnes) Asia-Pacific (million tonnes)
  • 30.
    Paper, board, andtissue operating rates October 24, 2014 © Valmet30 Source: RISI North America Europe China Asia-Pacific 75% 80% 85% 90% 95% 100% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard 80% 85% 90% 95% 100% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard 70% 75% 80% 85% 90% 95% 100% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard 80% 82% 84% 86% 88% 90% 92% 94% 2008 2009 2010 2011 2012 2013 2014 2015 Tissue Newsprint Printing & Writing Containerboard Cartonboard
  • 31.
    Paper and boardconsumption growth trends October 24, 2014 © Valmet31 Population growth in emerging markets is larger than in developed markets Level of consumption per capita in emerging markets clearly below that in developed markets This offers us long- term growth potential Paper and board consumption per capita vs. population Average global consumption: 53 kg per capita Source: RISI 0 500 1,000 1,500 2,000 2,500 0 50 100 150 200 250 EasternEurope WesternEurope NorthAmerica LatinAmerica Japan China RestofAsia Oceania Africa MiddleEast Consumption per capita, kg (LHS) Population, million (RHS)
  • 32.
    0 5 10 15 20 25 0 500 1,000 1,500 2,000 2,500 EasternEurope WesternEurope NorthAmerica LatinAmerica Japan China RestofAsia Oceania Africa MiddleEast Population, million (LHS)Consumption per capita, kg (RHS) Tissue consumption growth trends October 24, 2014 © Valmet32 New products and consumption models based on tissue are helping increase consumption in developed markets Consumption in emerging markets is still low, but growing Offers us long-term growth potential in both developed and emerging markets Tissue consumption per capita vs. population Average global consumption: 4.5 kg per capita Source: RISI
  • 33.
  • 34.
    0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 140 160 180 1-Jan-10 1-Jun-10 1-Nov-101-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 CIF ARA steam coal (USD/t) (LHS) Brent crude oil (USD/barrel) (LHS) Natural gas spot price NBP (GBP/therm) (RHS) 0 20 40 60 80 100 120 0 20 40 60 80 100 1-Jan-10 1-Jun-10 1-Nov-10 1-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 European Energy Exchange, Phelix (EUR/MWh) (LHS) Nordpool Power (EUR/MWh) (LHS) UK Baseload (GBP/MWh) (RHS) Crude oil, steam coal, natural gas and electricity October 24, 2014 © Valmet34 Source: Bloomberg Europe
  • 35.
    0 1 2 3 4 5 6 7 0 20 40 60 80 100 120 140 1-Jan-10 1-Jun-10 1-Nov-101-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 70 75 80 85 90 0 50 100 150 200 1-Jan-10 1-Jun-10 1-Nov-10 1-Apr-11 1-Sep-11 1-Feb-12 1-Jul-12 1-Dec-12 1-May-13 1-Oct-13 1-Mar-14 1-Aug-14 Electricity spot price, PJM (USD/MWh) (LHS) Electricity spot price, NEPOOL (USD/MWh) (LHS) US utility capacity utilization rate (RHS) Crude oil, steam coal, natural gas and electricity October 24, 2014 © Valmet35 Source: Bloomberg United States
  • 36.
  • 37.
    Important notice IMPORTANT: Youmust read the following before continuing. 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 accessing the Information, you agree to be bound by the following terms and conditions. The Information is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Information is not for publication, release or distribution in the United States, the United Kingdom, Australia, Canada or Japan. 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Any person who is not a Relevant Person should not act or rely on the Information. By accessing the Information, you represent that you are a Relevant Person. The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forward- looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward- looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Information or the opinions contained therein. The Information has not been independently verified and will not be updated. The Information, including but not limited to forward- looking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company’s expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document. Market data used in the Information not attributed to a specific source are estimates of the Company and have not been independently verified. October 24, 2014 © Valmet37