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2016-10-27

Valmet's Interim Review January 1 - September 30, 2016: Orders received increased and profitability improved

Valmet Oyj's stock exchange release on October 27, 2016 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. Automation has been consolidated
into Valmet's financials since April 1, 2015, when the acquisition of
Automation was completed.

July-September 2016:
Comparable EBITA margin at 7.5 percent

* Orders received increased to EUR 788 million (EUR 725 million). * Orders
received increased in the Pulp and Energy business line, remained at the
previous year's level in the Services and Automation business lines and
decreased in the Paper business line. * Orders received increased in EMEA
(Europe, Middle East and Africa), South America and Asia-Pacific and
decreased in China and North America.
* Net sales decreased to EUR 685 million (EUR 734 million). * Net sales
increased in the Services business line, remained at the previous year's
level in the Automation business line and decreased in the Paper and Pulp
and Energy business lines.
* Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 52 million (EUR 47 million) and the corresponding
Comparable EBITA margin was 7.5 percent (6.4%). * Profitability improved
due to the higher level of net sales in the Services business line.
* Earnings per share were EUR 0.17 (EUR 0.14).
* Items affecting comparability amounted to EUR -2 million (EUR -4 million).
* Cash flow provided by operating activities was EUR 122 million (EUR 16
million).

January-September 2016: Orders received increased and profitability improved

* Orders received increased to EUR 2,282 million (EUR 2,085 million). *
Orders received increased in the Pulp and Energy and Services business
lines and remained at the previous year's level in the Paper business line.
* The Automation business line contributed to orders received with EUR 221
million. * Orders received increased in South America and EMEA, remained at
the previous year's level in Asia-Pacific and decreased in China and North
America.
* Net sales remained at the previous year's level at EUR 2,141 million (EUR
2,074 million). * Net sales remained at the previous year's level in the
Services, Paper and Pulp and Energy business lines. * The Automation
business line contributed to net sales with EUR 196 million.
* Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 140 million (EUR 120 million) and the corresponding
Comparable EBITA margin was 6.5 percent (5.8%). * Profitability improved
due to improved gross profit and the acquisition of Automation.
* Earnings per share were EUR 0.46 (EUR 0.33).
* Items affecting comparability amounted to EUR -5 million (EUR -16 million).

* Cash flow provided by operating activities was EUR 158 million (EUR 14
million).

Valmet reiterates its guidance for 2016

Valmet is reiterating its guidance presented on February 9, 2016 in which
Valmet estimates that net sales in 2016 will remain at the same level with
2015 (EUR 2,928 million) and Comparable EBITA in 2016 will increase in
comparison with 2015 (EUR 182 million).

Short-term outlook

General economic outlook

Global growth is projected to slow to 3.1 percent in 2016 before recovering to
3.4 percent in 2017. The forecast, revised down by 0.1 percentage point for
2016 and 2017 relative to April, reflects a more subdued outlook for advanced
economies following the June U.K. vote in favor of leaving the European Union
(Brexit) and weaker-than-expected growth in the United States. These
developments have put further downward pressure on global interest rates, as
monetary policy is now expected to remain accommodative for longer.
(International Monetary Fund, October 4, 2016)

Short-term market outlook

Valmet estimates that the short-term market outlook has increased to a good
level (previously satisfactory) in tissue and in energy and decreased to a
satisfactory level (previously good level) in board and paper.

Valmet reiterates the satisfactory short-term market outlook for services,
automation and pulp.

President and CEO Pasi Laine:
Orders received increased and profitability continued to improve

Orders received has increased 9 percent since the beginning of the year,
supported by the stable business but also by the good progress in our energy
business. In 2016, orders received in the Services business line has
increased 5 percent and the Automation business line has contributed with
over EUR 220 million in orders. In energy, orders received has more than
doubled. We have received several large energy orders and also expanded to
new geographical areas. For example, we have received our first order for a
waste to energy boiler plant delivery to China.

In the third quarter of 2016, Valmet reached a Comparable EBITA margin of 7.5
percent, which is the highest figure since becoming an independent company.
For the last twelve months, the margin stands at 6.8 percent. The improvement
in profitability is the result of the systematic work that we have put into,
for example, procurement costs. We will continue to focus on improving
profitability also going forward.

Valmet has been included in the Dow Jones Sustainability Index (DJSI) for the
third consecutive year. This means that we maintain our position among the
world's sustainability leaders, which is an excellent achievement. It shows
that we have been able to improve our sustainability performance year by
year, which is a key criteria for inclusion in the index. Sustainability is
very important for us and sustainability is at the core of Valmet's business
strategy and operations.

Key figures
1

------------------------------------------------------------------------------------------------------------------------------------
| EUR million Q3/2016 Q3/2015 Change Q1-Q3/ Q1-Q3/ Change |
| |
| 2016 2015 |
| Orders received 788 725 9% 2,282 2,085 9% |
| Order backlog2 2,192 2,117 4% 2,192 2,117 4% |
| Net sales 685 734 -7% 2,141 2,074 3% |
| Comparable earnings before interest, taxes and amortization (Comparable EBITA) 52 47 10% 140 120 17% |
| % of net sales 7.5% 6.4% 6.5% 5.8% |
| Earnings before interest, taxes and amortization (EBITA) 49 43 15% 135 104 29% |
| % of net sales 7.2% 5.9% 6.3% 5.0% |
| Operating profit (EBIT) 41 33 26% 107 78 37% |
| % of net sales 6.0% 4.4% 5.0% 3.8% |
| Profit before taxes 38 29 29% 98 71 38% |
| Profit / loss 26 21 25% 69 50 37% |
| Earnings per share, EUR 0.17 0.14 28% 0.46 0.33 37% |
| Earnings per share, diluted, EUR 0.17 0.14 28% 0.46 0.33 37% |
| Equity per share, EUR 5.68 5.40 5% 5.68 5.40 5% |
| Cash flow provided by operating activities 122 16 >100% 158 14 >100% |
| Cash flow after investments 108 13 >100% 116 -338 |
| Return on equity (ROE) (annualized) 11% 8% |
| Return on capital employed (ROCE) before taxes (annualized) 12% 11% |
------------------------------------------------------------------------------------------------------------------------------------
1
The calculation of key figures is presented on page 37.
2
At the end of period.

------------------------------------------------------------------------------------------------------
| Equity to assets ratio and gearing As at September As at September As at June 30, 2016 |
| |
| 30, 2016 30, 2015 |
| Equity to assets ratio at end of period 38% 35% 36% |
| Gearing at end of period 15% 28% 27% |
------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------
| Orders received, EUR million Q3/2016 Q3/2015 Change Q1-Q3/ Q1-Q3/ Change |
| |
| 2016 2015 |
| Services 264 252 5% 898 852 5% |
| Automation 72 70 3% 221 156 - |
| Pulp and Energy 275 206 33% 692 603 15% |
| Paper 176 197 -10% 472 474 -1% |
| Total 788 725 9% 2,282 2,085 9% |
----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------
| Order backlog, EUR million As at September As at September Change As at June 30, 2016 |
| |
| 30, 2016 30, 2015 |
| Total 2,192 2,117 4% 2,106 |
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