The fourth quarter tends to be the strongest for Valmet, and this was the case also in 2018. Q4/2018 was historical even for a fourth quarter, as net sales, comparable EBITA and the respective margin all were highest ever. The 11.5 percent EBITA margin also exceeded Valmet’s long-term target margin (8–10%). Orders received were also very high, and order backlog now stands at a record of EUR 2,829 million.
However, one quarter is too short a period to evaluate Valmet’s performance, so let’s have a look at the full year. In 2018, Valmet’s orders received increased 14 percent to EUR 3,722 million. In the stable business, orders received increased 6 percent. As for capital business, the Paper business line had another exceptionally strong year, and also the Pulp and Energy business line received EUR 1 billion worth of orders in 2018. The Energy business had a very good year, boosted by approximately EUR 190 million worth of marine scrubber orders. In Pulp, Valmet got a large order for a new pulp line in Chile.
Net sales increased 9 percent in 2018 and amounted to EUR 3,325 billion. Net sales increased in the capital business and remained at the previous year’s level in the stable business. EMEA accounted for 46 percent of net sales and North America for 20 percent. China’s share increased to 16 percent and Asia-Pacific’s to 12 percent, while South America accounted for 5 percent of net sales. Emerging markets accounted for 42 percent of Valmet’s net sales.
Comparable EBITA increased 18 percent to EUR 257 million. Valmet’s trend of yearly margin improvement continued in 2018, as the comparable EBITA margin reached 7.7 percent. Comparable return on capital employed improved to 20 percent, which is at the top of Valmet’s target range of 15–20 percent.
Earnings per share increased 25 percent to EUR 1.01. The Board proposes a dividend of EUR 0.65, which is 10 cents and 18 percent more than for the year 2017.
The record-high backlog of EUR 2.8 billion gives Valmet a strong starting point for 2019. Approximately 70 percent of the order backlog is expected to be realized as net sales during 2019, and stable business accounts for approximately 25 percent of the backlog.
For 2019, Valmet expects net sales to remain at the 2018 level, and comparable EBITA to increase in comparison with 2018. For the first half of 2019, the market outlook remains good for board and paper, services and automation, and satisfactory for pulp, and energy. The outlook for tissue was downgraded from good to satisfactory.