Valmet's Interim Review January 1 - September 30, 2024: Record-high third quarter margin, but slower market activity than expected

ESPOO, Finland, Oct. 30, 2024 /PRNewswire/ -- 

Figures in brackets, unless otherwise stated, refer to the comparison period, i.e., the same period of the previous year. 

July–September 2024: Orders received increased to EUR 1,041 million

• Orders received increased 6 percent to EUR 1,041 million (EUR 980 million).
  • Orders received increased in the Services and Automation segments and decreased in the Process Technologies segment.
  • Orders received increased in South America, EMEA (Europe, Middle East and Africa) and Asia-Pacific, remained at the previous year's level in North America, and decreased in China.
• Net sales remained at the previous year's level and amounted to EUR 1,295 million (EUR 1,295 million).
  • Net sales increased in the Automation and Services segments and decreased in the Process Technologies segment.
• Comparable earnings before interest, taxes and amortization (Comparable EBITA) remained at the previous year's level and amounted to EUR 156 million (EUR 150 million).
  • Comparable EBITA increased in the Automation segment, remained at the previous year's level in the Services segment, and decreased in the Process Technologies segment.
• Comparable EBITA margin was 12.0 percent (11.6%).
• Earnings per share (EPS) were EUR 0.37 (EUR 0.47). EPS decreased mainly due to lower operating profit and higher net financial expenses. Adjusted EPS was EUR 0.49 (EUR 0.52).
• Items affecting comparability amounted to EUR -17 million (EUR -4 million) and were  mainly related to Process Technologies and Services segments.
• Cash flow provided by operating activities totaled EUR 110 million (EUR 57 million).

January–September 2024: Orders received amounted to EUR 3,374 million

• Orders received decreased 11 percent to EUR 3,374 million (EUR 3,801 million).
  • Orders received increased in the Services segment, remained at the previous year's level in the Automation segment, and decreased in the Process Technologies segment.
  • Orders received remained at the previous year's level in South America and EMEA and decreased in China, Asia-Pacific and North America.
• Net sales decreased 5 percent to EUR 3,831 million (EUR 4,033 million).
  • Net sales increased in the Automation segment, remained at the previous year's level in the Services segment, and decreased in the Process Technologies segment.
• Comparable EBITA remained at the previous year's level and amounted to EUR 417 million (EUR 437 million).
  • Comparable EBITA remained at the previous year's level in the Automation and Services segments and decreased in the Process Technologies segment.
• Comparable EBITA margin was 10.9 percent (10.8%).
• EPS was EUR 0.99 (EUR 1.38). EPS decreased mainly due to lower operating profit and higher net financial expenses. Adjusted EPS was EUR 1.33 (EUR 1.63).
• Items affecting comparability amounted to EUR -33 million (EUR -4 million) and were mainly related to Process Technologies and Services segments.
• Cash flow provided by operating activities totaled EUR 376 million (EUR 229 million).

Guidance for 2024

Valmet reiterates its guidance issued on October 11, 2024, in which Valmet estimates that net sales in 2024 will remain at the previous year's level in comparison with 2023 (EUR 5,532 million) and Comparable EBITA in 2024 will remain at the previous year's level in comparison with 2023 (EUR 619 million).

Short-term market outlook

Valmet estimates that the short-term market outlook for services has decreased to satisfactory (previously good) and that the short-term market outlook for board and paper has decreased to weak (previously satisfactory). Valmet reiterates the good short-term market outlook for flow control and automation systems, and the satisfactory short-term market outlook for pulp, energy and tissue.

The short-term market outlook is given for the next six months from the end of the reported period. It is based on customer activity (50%) and Valmet's capacity utilization (50%), and the scale is 'weak–satisfactory–good'.

President and CEO Thomas Hinnerskov: A new chapter for Valmet

"I had the honor to join Valmet as President and CEO in mid-August. I have spent my first months meeting Valmet's people and customers across different continents. Valmet's strong relationship with customers, committed people and the amazing legacy of more than 225 years creates a solid foundation for Valmet's next chapter. I am fully committed to making Valmet a success for our customers, shareholders, employees, and society.

The third quarter was two-sided. On one hand, Comparable EBITA margin was 12.0%, the best third quarter margin for Valmet ever. On the other hand, the market activity in Services and board and paper process technologies was slower than we earlier expected, and some customers postponed their final investment decisions. As a result, Valmet's Comparable EBITA guidance for 2024 was changed in October.

Looking ahead, we are excited about the opportunities ahead of us. We have recently launched Valmet DNAe, Valmet's next-generation industrial automation system, which is an important step in our strategy for growing the automation business further to a wide base of process industries globally. In Services, we continue to provide unique value to customers and service the growing global installed base.

We are proud to have been selected to supply the world's largest single-phase pulp mill. This project, valued at over a billion euros, will be included in our fourth quarter orders and will feature full-scope automation and flow control solutions. Importantly, it will serve as a showcase for Valmet's sustainable technologies, reinforcing our commitment to moving our customers' performance forward and environmental stewardship."

Key figures¹

¹  The calculation of key figures is presented on page 62

²  At end of period

³  Last twelve months' EBITDA

LTM = Last twelve months

Segment key figures

News conference and webcast for analysts, investors and media

Valmet will arrange a news conference in English as a live webcast at https://valmet.videosync.fi/q3-2024 on Wednesday, October 30, 2024, at 3:00 p.m. Finnish time (EEST). President and CEO Thomas Hinnerskov and CFO Katri Hokkanen will be presenting the results.

Recording of the webcast will be available shortly after the event at the same address.

It is possible to take part in the news conference through a conference call by registering through the link below:

https://palvelu.flik.fi/teleconference/?id=50048302

After the registration you will be provided phone numbers and a conference ID to access the conference. If you wish to ask a question during the conference, please dial *5 to enter the question queue.

All questions should be presented in English.

The event can also be followed on social media platform X at x.com/valmetir.

Further information, please contact:
Pekka Rouhiainen, VP, Investor Relations, Valmet, tel. +358 10 672 0020

VALMET

Katri Hokkanen
CFO
Pekka Rouhiainen
VP, Investor Relations

DISTRIBUTION:
Nasdaq Helsinki
Major media
www.valmet.com

Valmet has a global customer base across various process industries. We are a leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries, and with our automation and flow control solutions we serve an even wider base of process industries. Our more than 19,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward – every day.

The company has over 220 years of industrial history and a strong track record in continuous improvement and renewal. Valmet's net sales in 2023 were approximately EUR 5.5 billion.

Valmet's shares are listed on the Nasdaq Helsinki and the head office is in Espoo, Finland.  

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