Valmet's Interim Review January 1 - March 31, 2017: Orders received increased - especially in the Paper business line
Valmet Oyj's stock exchange release on April 25, 2017 at 12:00 noon EET
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period of the previous year.
January-March 2017: Order backlog at a record-high level following the increase in orders received
- Orders received increased to EUR 1,005 million (EUR 803 million).
- Orders received increased in all business lines.
- Orders received increased in Asia-Pacific, North America and EMEA, remained at the previous year's level in China and decreased in South America.
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- Net sales remained at the previous year's level at EUR 671 million (EUR 652 million).
- Net sales increased in the Pulp and Energy business line and remained at the previous year's level in the Automation, Paper, and Services business lines.
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- Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 35 million (EUR 31 million) and the corresponding Comparable EBITA margin was 5.1 percent (4.8%).
- Profitability improved due to higher gross profit and lower selling, general and administrative expenses.
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- Earnings per share were EUR 0.12 (EUR 0.08).
- Items affecting comparability amounted to EUR 3 million (EUR -2 million).
- Cash flow provided by operating activities was EUR 94 million (EUR 3 million).
Guidance for 2017
On April 12, 2017, Valmet revised upwards its net sales guidance for 2017. According to the revised guidance, Valmet estimates that net sales in 2017 will increase in comparison with 2016 (EUR 2,926 million) and Comparable EBITA in 2017 will increase in comparison with 2016 (EUR 196 million).
Short-term outlook
General economic outlook
Global economic activity is picking up with a cyclical recovery in investment, manufacturing, and trade. World growth is expected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018. Stronger activity, expectations of more robust global demand, reduced deflationary pressures, and optimistic financial markets are all upside developments. However, structural impediments to a stronger recovery and a balance of risks that remains tilted to the downside remain important challenges. (International Monetary Fund, April 18, 2017)
Short-term market outlook
Valmet estimates that the short-term market outlook has increased to a good level in services (previously satisfactory level) and decreased to a weak level in pulp (previously satisfactory level).
Valmet reiterates the good short-term market outlook for energy, board and paper, and tissue, and the satisfactory short-term market outlook for automation.
President and CEO Pasi Laine: Strong start to the year due to high order activity
The high customer activity in the last quarter of 2016 continued through the first quarter of 2017. Both the Services and Paper business lines had a record-high quarter in orders received, while also the Automation and Pulp and Energy business lines were able to increase orders received compared to last year. In Pulp and Energy, especially the energy market has been active.
Due to the positive development in all business lines, Valmet's orders received for the last twelve months now stand at EUR 3.3 billion, which is an all-time high level for the company. Following the high order activity, the order backlog has increased 18 percent from a year ago. The record-high order backlog of EUR 2.6 billion gives Valmet a strong start to the year.
Key figures1
| EUR million | Q1/2017 | Q1/2016 | Change | 2016 |
| Orders received | 1,005 | 803 | 25% | 3,139 |
| Order backlog2 | 2,613 | 2,207 | 18% | 2,283 |
| Net sales | 671 | 652 | 3% | 2,926 |
| Comparable earnings before interest, taxes and amortization (Comparable EBITA) | 35 | 31 | 10% | 196 |
| % of net sales | 5.1% | 4.8% | 6.7% | |
| Earnings before interest, taxes and amortization (EBITA) | 37 | 30 | 26% | 183 |
| % of net sales | 5.6% | 4.6% | 6.2% | |
| Operating profit (EBIT) | 30 | 19 | 55% | 147 |
| % of net sales | 4.4% | 2.9% | 5.0% | |
| Profit before taxes | 26 | 17 | 60% | 136 |
| Profit / loss | 18 | 12 | 58% | 82 |
| Earnings per share, EUR | 0.12 | 0.08 | 61% | 0.55 |
| Earnings per share, diluted, EUR | 0.12 | 0.08 | 61% | 0.55 |
| Equity per share, EUR | 5.60 | 5.38 | 4% | 5.88 |
| Cash flow provided by operating activities | 94 | 3 | >100% | 246 |
| Cash flow after investments | 80 | -8 | 188 | |
| Return on equity (ROE) (annualized) | 8% | 6% | 9% | |
| Return on capital employed (ROCE) before taxes (annualized) | 10% | 7% | 12% |
1 The calculation of key figures is presented on page 33.
2 At the end of period.
| Equity to assets ratio and gearing | As at March 31, 2017 | As at March 31, 2016 | As at December 31, 2016 | |
| Equity to assets ratio at end of period | 37% | 35% | 37% | |
| Gearing at end of period | -3% | 24% | 6% |
| Orders received, EUR million | Q1/2017 | Q1/2016 | Change | 2016 |
| Services | 355 | 313 | 14% | 1,182 |
| Automation | 72 | 66 | 9% | 299 |
| Pulp and Energy | 265 | 238 | 11% | 939 |
| Paper | 314 | 186 | 68% | 718 |
| Total | 1,005 | 803 | 25% | 3,139 |
| Order backlog, EUR million | As at March 31, 2017 | As at March 31, 2016 | Change | As at December 31, 2016 |
| Total | 2,613 | 2,207 | 18% | 2,283 |
| Net sales, EUR million | Q1/2017 | Q1/2016 | Change | 2016 |
| Services | 252 | 257 | -2% | 1,163 |
| Automation | 59 | 58 | 3% | 290 |
| Pulp and Energy | 204 | 181 | 13% | 826 |
| Paper | 156 | 157 | -1% | 647 |
| Total | 671 | 652 | 3% | 2,926 |
News conference and webcast for analysts, investors and media
Valmet will arrange a news conference in English for analysts, investors, and media on Tuesday, April 25, 2017 at 2:00 p.m. Finnish time (EET). The news conference will be held at Valmet Head Office in Keilaniemi, Keilasatama 5, 02150 Espoo, Finland. The news conference can also be followed through a live webcast at www.valmet.com/webcasts.
It is also possible to take part in the news conference through a conference call. Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at 1:55 p.m. (EET), at +44 1452 560304. The participants will be asked to provide the following conference ID: 6695370.
During the webcast and the conference call, all questions should be presented in English. After the webcast and the conference call, media has a possibility to interview the management in Finnish.
The event can also be followed on Twitter at www.twitter.com/valmetir
Further information, please contact:
Calle Loikkanen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
Kari Saarinen, CFO, Valmet, tel. +358 10 672 9603
VALMET
Kari Saarinen
CFO
Calle Loikkanen
Director, Investor Relations
Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.
Valmet's strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers' processes and enhance the effective utilization of raw materials and energy.
Valmet's net sales in 2016 were approximately EUR 2.9 billion. Our 12,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward - every day. Valmet's head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.
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