One quarter is too short of a time period for evaluating Valmet’s financial performance, but the last quarter of 2017 does deserve a few remarks: the quarter set records in terms of net sales and comparable EBITA. Net sales in October–December was the highest so far for one quarter, EUR 936 million. For the first time, comparable EBITA margin reached the range of our long-term margin target (8–10%) and was 8.1%. Net sales increased in all business lines compared to the last quarter of 2016, and all in all, net sales increased by 19%.
The whole year 2017, too, was a good one for Valmet. Like every year after the demerger, also in 2017 Valmet’s absolute comparable EBITA and the comparable EBITA margin increased compared to the preceding year. Orders received were at the same level as in 2016 (+4%) and net sales increased 8%. Especially the Paper business line had growth in orders received and net sales, as both the board and paper as well as the tissue business increased clearly. While the Paper business line accounted for 22% of orders received in 2016, in 2017 the share was 32%. Orders received increased also in the stable business, i.e. Automation and Services. Orders received of the Pulp and energy business line, in turn, decreased.
Geographically, China’s share of Valmet’s orders received increased compared to the previous year, and was now 17%. During the year Valmet received, among others, orders for several containerboard machines to China. EMEA (Europe, Middle East and Africa) together with North America accounted for 67% of Valmet’s orders received in 2017.
Comparable return on capital employed was 16% in 2017, and it too reached Valmet’s long-term target range (15–20%). Earnings per share increased 53% and was EUR 0.84. The Board proposes to the AGM a dividend of EUR 0.55 per share.
Valmet’s order backlog at the end of 2017 amounted to 2.3 billion euro, which is the same level as a year earlier. Of the order backlog, Services and Automation business lines account approximately for 1/4, while the project business accounts for approximately 3/4, similarly to the situation in the end of 2016. Some 80% of the order backlog is expected to be recognized as revenue in 2018.
In the financial statements release, Valmet did not give a guidance for 2018 due to the changes to revenue recognition caused by the IFRS 15 accounting standard. Valmet will publish restated figures for 2017 in March 2018 at the latest, and the guidance will be given in this context. The short-term market outlook for the first half-year is good for most of the markets Valmet operates in (services, automation, board and paper, tissue). The market outlook for energy is still satisfactory, and weak for pulp.