Valmet’s Financial Statements Review January 1 – December 31, 2019: Orders received increased to EUR 4.0 billion and Comparable EBITA to EUR 316 million in 2019

Valmet Oyj’s stock exchange release on February 5, 2020 at 1:00 p.m. EET

Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period of the previous year. As of January 1, 2019, Valmet has adopted IFRS 16 without restating the figures for the comparison period.

October–December 2019: Orders received amounted to EUR 1.0 billion

  • Orders received remained at the previous year’s level at EUR 1,009 million (EUR 1,026 million).
    • Orders received increased in the Paper and Services business lines, remained at the previous year’s level in Automation and decreased in the Pulp and Energy business line.
    • Orders received increased in North America and EMEA (Europe, Middle East and Africa), and decreased in South America, Asia-Pacific and China.
  • Net sales increased 12 percent to EUR 1,103 million (EUR 984 million).
    • Net sales increased in the Pulp and Energy, Automation and Services business lines and remained at the previous year’s level in the Paper business line.
  • Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 118 million (EUR 113 million), and the corresponding Comparable EBITA margin was 10.7 percent (11.5%).
    • Profitability remained at the previous year’s level.
  • Earnings per share were EUR 0.54 (EUR 0.49).
  • Items affecting comparability amounted to EUR 1 million (EUR -3 million).
  • Cash flow provided by operating activities was EUR 182 million (EUR 143 million).

January–December 2019: Orders received increased and profitability improved

  • Orders received increased 7 percent to EUR 3,986 million (EUR 3,722 million).
    • Orders received increased in the Pulp and Energy, Services and Automation business lines and remained at the previous year’s level in the Paper business line.
    • Orders received increased in South America, Asia-Pacific, North America and EMEA and decreased in China.
  • Net sales increased 7 percent to EUR 3,547 million (EUR 3,325 million).
    • Net sales increased in the Services, Automation, and Pulp and Energy business lines and remained at the previous year’s level in the Paper business line.
  • Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 316 million (EUR 257 million), and the corresponding Comparable EBITA margin was 8.9 percent (7.7%).
    • Profitability improved due to higher net sales and gross profit.
  • Earnings per share were EUR 1.35 (EUR 1.01).
  • Items affecting comparability amounted to EUR -1 million (EUR -16 million).
  • Cash flow provided by operating activities was EUR 295 million (EUR 284 million).

Dividend proposal

The Board of Directors proposes for the Annual General Meeting that a dividend of EUR 0.80 per share be paid. The proposed dividend equals to 59 percent of the net result.

Guidance for 2020

Valmet estimates that net sales in 2020 will increase in comparison with 2019 (EUR 3,547 million) and Comparable EBITA in 2020 will increase in comparison with 2019 (EUR 316 million).

Short-term outlook

General economic outlook

Global growth is projected to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021. Market sentiment has been boosted by tentative signs that manufacturing activity and global trade are bottoming out, a broad-based shift toward accommodative monetary policy, intermittent favorable news on US-China trade negotiations, and diminished fears of a no-deal Brexit. Downside risks, however, remain prominent, including rising geopolitical tensions, notably between the United States and Iran, intensifying social unrest, further worsening of relations between the United States and its trading partners, and deepening economic frictions between other countries. A materialization of these risks could lead to rapidly deteriorating sentiment, causing global growth to fall below the projected baseline.
(International Monetary Fund, January 2020)

Short-term market outlook

Valmet reiterates the good short-term market outlook for services, automation, pulp, and board and paper, and the satisfactory short-term market outlook for energy, and tissue.  

President and CEO Pasi Laine: Orders received increased and profitability improved in 2019

“In 2019, our orders received increased 7 percent to EUR 4.0 billion. Orders received in the stable business, i.e. the Services and Automation business lines, increased by 10 percent and accounted for 46 percent of total orders. Service orders were supported by the acquisitions of GL&V and J&L, which were finalized during the second quarter. The orders received in Automation increased as well. In the capital business, orders received increased in Pulp and Energy, and remained at last year’s high level in the Paper business line.

Valmet’s net sales increased 7 percent in 2019. Net sales increased in the stable business and remained at previous year’s level in the capital business. Comparable EBITA increased 23 percent to EUR 316 million, representing 8.9 percent of net sales. This means that we have been able to improve our profitability six years in a row and every year since the demerger at the end of 2013.

Valmet is starting the year 2020 as a strong, continuously developing company. Our orders received, net sales and Comparable EBITA were at a record high level at the end of 2019. Valmet’s technology is world leading, our brand is strong and a professional and highly engaged team of more than 13,000 Valmeteers serves our customers around the world. With the solid order backlog and improved profitability level, we can move into 2020 with confidence.”

Key figures1

EUR millionQ4/2019Q4/2018Change20192018Change
Orders received1,0091,026-2%3,9863,7227%
Order backlog23,3332,82918%3,3332,82918%
Net sales1,10398412%3,5473,3257%
Comparable earnings before interest, taxes and amortization (Comparable EBITA)1181134%31625723%
% of net sales10.7%11.5% 8.9%7.7% 
Earnings before interest, taxes and amortization (EBITA)1191108%31524131%
% of net sales10.8%11.2% 8.9%7.2% 
Operating profit (EBIT) 1101027%28121133%
% of net sales9.9%10.4% 7.9%6.4% 
Profit before taxes1051006%26920532%
Profit for the period817410%20215233%
Earnings per share, EUR0.540.4910%1.351.0133%
Earnings per share, diluted, EUR0.540.4910%1.351.0133%
Equity per share, EUR26.956.3110%6.956.3110%
Cash flow provided by operating activities18214328%2952844%
Cash flow after investments16111935%58208-72%
Return on equity (ROE) (annualized)   20%16% 
Return on capital employed (ROCE) before taxes (annualized)   23%19% 
Equity to assets ratio2   41%43% 
Gearing2   -9%-23% 

Valmet implemented IFRS 16 – Leases as of January 1, 2019 by applying the simplified transition method and therefore 2018 figures are not restated.

1 The calculation of key figures is presented on page 47.
2 At the end of period.

Orders received, EUR millionQ4/2019Q4/2018Change20192018Change
Services39532521%1,4591,31511%
Automation96941%3593309%
Pulp and Energy 320451-29%1,1251,00013%
Paper19915628%1,0431,077-3%
Total1,0091,026-2%3,9863,7227%


Order backlog, EUR millionAs at
Dec 31,
 2019
As at
 Dec 31,
 2018
ChangeAs at
Sep 30,
 2019
Total3,3332,82918%3,425


Net sales, EUR millionQ4/2019Q4/2018Change20192018Change
Services4003669%1,3741,21913%
Automation12010613%34130612%
Pulp and Energy31523236%9198637%
Paper267280-5%913937-3%
Total1,10398412%3,5473,3257%

News conference and webcast for analysts, investors and media

Valmet will arrange a news conference in English for analysts, investors, and media on Wednesday, February 5, 2020 at 3:00 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
+44 (0) 2071 928000. The participants will be asked to provide the following conference ID: 2158826.

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:
Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
Kari Saarinen, CFO, Valmet, tel. +358 50 317 1830

VALMET

Kari Saarinen
CFO

Pekka Rouhiainen
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 2019 were approximately EUR 3.5 billion. Our more than 13,000 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.

Read more www.valmet.com, www.twitter.com/valmetglobal

Follow Valmet IR on Twitter www.twitter.com/valmetir

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