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2014-04-25

Valmet's Interim Review January 1 - March 31, 2014: Strong development in orders received - profitability improvement continues to be in focus

Valmet Corporation's stock exchange release on April 25, 2014 at 09:00 a.m.
EET

Valmet has formed a separate legal group as of December 31, 2013. The
financial information presented in this Interim Review is based on actual
figures as an independent group after the consummation of the demerger and
carve-out figures prior to the consummation of the demerger. The carve-out
financial information presented in this Interim Review reflects the
performance and financial position of the entities that have historically
formed the Pulp, Paper and Power segment within Metso Group. Figures in
brackets, unless otherwise stated, refer to the comparison period, i.e. the
same period of the previous year.

January-March 2014: Orders received more than doubled

* Orders received amounted to EUR 1,101 million (EUR 511 million). * Orders
received increased in Pulp and Energy, and Paper business lines.
* Net sales declined by 18 percent to EUR 519 million (EUR 631 million). *
Net sales declined in all the business lines, particularly in the capital
business.
* Earnings before interest, taxes and amortization (EBITA) and non-recurring
items were EUR 4 million (EUR 26 million), and the corresponding EBITA
margin was 0.7 percent (4.1%). * Profitability increased compared to the
last quarter of 2013. * Cost accrual of approximately EUR 10 million linked
to an individual major pulp project had negative impact on the Q1/2014
result.
* Earnings per share were EUR -0.04 (EUR 0.08).
* Non-recurring items related to the profitability improvement program
amounted to EUR -6 million (EUR 0 million).
* Cash flow provided by operating activities was EUR 43 million (EUR -5
million).

Valmet reiterates its guidance for 2014

Valmet is reiterating its guidance presented on February 6, 2014 in which
Valmet estimates that net sales in 2014 will decline from the 2013 level and
EBITA before non-recurring items will increase in comparison with 2013.

Short-term outlook

General economic outlook

Global activity has broadly strengthened and is expected to improve further in
2014-15, with much of the impetus coming from advanced economies. Global
growth is projected to strengthen from 3 percent in 2013 to 3.6 percent in
2014 and 3.9 percent in 2015. The global recovery is still fragile despite
improved prospects, and significant downside risks - both old and new -
remain. Recently, some new geopolitical risks have emerged. (International
Monetary Fund, April 8, 2014)

Short-term market outlook

Valmet is reiterating its short-term market outlook presented on February 6,
2014. Valmet estimates that activity in the services, pulp, energy, board and
paper, and tissue markets will remain satisfactory.

President and CEO Pasi Laine: Customer activity has revived during the early
part of the year

Valmet's first quarter as an independent company commenced well in terms of
orders received. Customer activity has revived during the early part of the
year and in addition to a major pulp project order we received several other
orders as well. It is gratifying to see that our business lines have received
orders from different customer industries and geographical areas. Orders
received increased in relation to the comparison period in both Pulp and
Energy, and Paper business lines.

Although we have received a number of new orders, we expect net sales to
decline during 2014 as the orders received during the first quarter will
start to be recognized as net sales towards the end of 2014.

Our profitability improved compared to the last quarter of 2013, but it is
still below the targeted level. Therefore our key focus in 2014 will be on
improving profitability. The profitability improvement program initiated in
2013 has proceeded according to plan. Additionally, we continue to improve
our processes and, at the same time, we aim to achieve additional savings in,
for example, procurement and quality costs.

Key figures*

----------------------------------------------------------------------------------------------------------------
| Q1/2014 Q1/2013 Change 2013 |
|EUR million Carve-out Carve-out |
|Orders received 1,101 511 116% 2,182 |
|Order backlog 1,972 2,138** -8% 1,398 |
|Net sales 519 631 -18% 2,613 |
|Earnings before interest, taxes and amortization (EBITA) and non-recurring 4 26 -85% 54 |
|items |
|% of net sales 0.7% 4.1% 2.1% |
|Earnings before interest, taxes and amortization (EBITA) -2 26 -32 |
|% of net sales -0.4% 4.1% -1.2% |
|Operating profit (EBIT) -8 19 -59 |
|% of net sales -1.5% 3.0% -2.2% |
|Profit before taxes -9 19 -64 |
|Profit -6 12 -62 |
|Earnings per share, EUR -0.04 0.08*** -0.42 |
|Diluted earnings per share, EUR -0.04 0.08*** - |
|Equity per share, EUR 5.12 5.82 5.39 |
|Cash flow provided by operating activities 43 -5 -43 |
|Cash flow after investments 35 -13 -97 |
|Return on capital employed (ROCE) before taxes -2% 8% -4% |
----------------------------------------------------------------------------------------------------------------
*The calculation of key figures is presented in the Tables section of the
Q1/2014 Interim Review
.

**Includes cancelled Fibria order (EUR 331 million).
*** The earnings per share information was computed as if the shares issued in
conjunction with the Demerger had been outstanding for the comparison period.

------------------------------------------------------------------------
| As at As at As at |
| |
| March 31, 2013 December |
| March 31, 2014 31, 2013 |
|Equity ratio and gearing Carve-out Carve-out |
|Equity ratio at end of period 40% 40% 41% |
|Gearing at end of period -5% 3% 0% |
------------------------------------------------------------------------

------------------------------------------------------------------
| Q1/2014 Q1/2013 Change 2013 |
|Orders received, EUR million Carve-out Carve-out |
|Services 267 282 -5% 1,035 |
|Pulp and Energy 622 61 923% 680 |
|Paper 212 168 26% 467 |
|Total 1,101 511 116% 2,182 |
------------------------------------------------------------------

------------------------------------------------------------------------------------
| As at As at Change As at |
| |
| March 31, 2013 December 31, 2013 |
| March 31, 2014 |
|Order backlog, EUR million Carve-out Carve-out |
|Total 1,972 2,138* -8% 1,398 |
------------------------------------------------------------------------------------
* Includes cancelled Fibria order (EUR 331 million).

------------------------------------------------------------
| Q1/2014 Q1/2013 Change 2013 |
|Net sales, EUR million Carve-out Carve-out |
|Services 224 243 -8% 1,032 |
|Pulp and Energy 181 221 -18% 907 |
|Paper 114 167 -32% 674 |
|Total 519 631 -18% 2,613 |
------------------------------------------------------------
News conference for analysts, investors and the media

Valmet will arrange a news conference in English for investment analysts,
portfolio managers, and the media on Friday, April 25, 2014 at 1:00 p.m.
Finnish time (EET). The news conference will be held at Valmet's Head Office
in Keilaniemi, Keilasatama 5, 02150 Espoo, Finland. The conference can also
be followed through a live webcast atwww.valmet.com/webcasts.

The news conference can be participated also through a conference call.
Conference call participants are requested to dial in at least five minutes
prior to the start of the conference, at 12:55 p.m. (EET), at +44 1452
555566. The participants will be asked to provide the following conference
ID: 25116176.

During the webcast and conference call, all questions should be presented in
English. At the end of the event the media has the possibility to ask
questions also in Finnish.

Further information, please contact:
Hanna-Maria Heikkinen, Vice President, Investor relations, Valmet Corporation,
+358 10 672 0007
Markku Honkasalo, Chief Financial Officer, Valmet Corporation, +358 10 672
0008

VALMET CORPORATION

Markku Honkasalo
CFO

Hanna-Maria Heikkinen
VP, Investor Relations

Valmet Corporation is a leading global developer and supplier of services and
technologies for the pulp, paper and energy industries. Our 11,000
professionals around the world work close to our customers and are committed
to moving our customers' performance forward - every day.

Valmet's services cover everything from maintenance outsourcing to mill and
plant improvements and spare parts. Our strong technology offering includes
entire pulp mills, tissue, board and paper...

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