Liquidity and refinancing risk management

Liquidity or refinancing risk arises when a company is not able to arrange funding at terms and conditions corresponding to its creditworthiness. Cautious maturity distribution of interest-bearing debt and sufficient cash, short-term investments and committed and uncommitted credit facilities are maintained to protect short-term liquidity and to manage refinancing risk. Diversification of funding among different markets and an adequate number of financial institutions are used to safeguard the availability of liquidity at all times. Treasury monitors bank account structures, cash balances and forecasts of the subsidiaries and manages the utilization of the consolidated cash resources.

At end of the reporting period Cash and cash equivalents amounted to EUR 482 million (EUR 432 million) and current interest-bearing financial assets managed centrally by Treasury to EUR 30 million (EUR 25 million). Due to the global nature of operations, some of the Valmet subsidiaries are located in countries in which currency is subject to limited exchangeability or capital controls. Given Valmet’s total liquidity position, balances in such countries are immaterial. 

In 2024, new term loans worth EUR 175 million were drawn of which EUR 50 million was a green loan from Swedish Export Credit Corporation (SEK) issued under Valmet's Green Finance Framework and EUR 125 million was a term loan from the Nordic Investment Bank.

Valmet’s liquidity was additionally secured by a committed and undrawn revolving credit facility worth EUR 300 million, which matures in 2026, uncommitted and undrawn overdraft limits of EUR 16 million and a commercial paper program worth EUR 300 million which was undrawn at the end of the reporting period.

Net working capital management is an integral part of the liquidity risk management. Treasury monitors and forecasts net working capital fluctuations in close co-operation with the subsidiaries. Net working capital decreased to EUR 134 million (EUR 191 million) as at December 31, 2024. In the recent years, Valmet’s net working capital profile has changed due to increased portion of stable business, which typically ties up more net working capital than capital business. In addition, payment schedules of large long-term projects have a significant impact on net working capital development.

Group’s refinancing risk is managed by balancing the proportion of current and non-current interest-bearing debt and average maturity of non-current interest-bearing debt including committed undrawn credit facility. The average maturity of non-current interest-bearing debt, including current portion, as at December 31, 2024, was 3.4years (3.0 years). The amount of current interest-bearing debt, including current portion of non-current interest-bearing debt, was 8 percent (8%) of total debt portfolio. As at December 31, 2024,Valmet’s interest-bearing liabilities consist of debt and lease liabilities, and debt portfolio includes loans from financial institutions, issued bonds and commercial papers.

The tables below present undiscounted cash flows on the repayments and interests on Valmet’s financial liabilities (excl. lease liabilities and derivatives) by the remaining maturities from the balance sheet date to the contractual maturity date. The remaining maturities of lease liabilities are presented in Note 5, and correspondingly remaining maturities of derivatives in Note 9 to the Financial Statements 2024.