(Información remitida por la empresa firmante)
On July 2, 2021, Valmet entered into EUR 350 million term loan facilities agreement with Danske Bank A/S and Nordea Bank Abp. The syndication of the term loan facilities was closed on October 20, 2021. The loan was used for refinancing existing indebtedness of Valmet and Neles in connection with the merger. EUR 215 million (originally 301 million) bridge facility agreement originally entered into by Neles was transferred to Valmet in connection with the completion of the merger. The bridge loan facility was used for financing of the extra distribution to shareholders of Neles. The outstanding bridge loan facility was repaid in December 2022. On March 22, 2022, the Boards of Directors of Valmet and Neles approved a loan agreement between the companies concerning the part of the extra distribution of funds of EUR 2.00 per share payable to Valmet. According to the loan agreement, the part of the extra distribution payable to Valmet as a shareholder of Neles was not paid in cash to Valmet in connection with payment of the extra distribution to other shareholders of Neles, but the amount payable to Valmet was recorded as debt owed by Neles to Valmet.
Valmet and Neles were separate listed companies prior to the merger. On April 1, 2022, Valmet announced that the statutory merger of Neles Corporation into Valmet had been registered and the combination of Valmet’s and Neles’ business operations had been completed. Neles is consolidated into Valmet as of April 1, 2022, and forms Valmet’s fifth business line called Flow Control. After the merger, Valmet’s business lines are Services, Flow Control, Automation Systems, Paper, and Pulp and Energy. Automation Systems business line was previously called Automation.
The final Shareholders’ Meeting of Neles was held on June 22, 2022, in Vantaa. The Shareholders’ Meeting adopted the final accounts of Neles in accordance with Chapter 16, Section 17 of the Finnish Companies Act, consisting of the financial statements and annual report for the financial period January 1, 2022–March 31, 2022. The Shareholders’ Meeting also resolved on discharging the members of the Board of Directors and the President and CEO of Neles from liability.
Update on the integration of Flow Control into Valmet
The integration of Flow Control (former Neles) into Valmet is proceeding according to the plan. Active sales and marketing of Valmet’s whole offering was started in the second quarter, and several package orders were received in 2022. Most of the cost synergy actions regarding function costs, common locations and supply chain were implemented already during 2022. Valmet expects to generate annual run rate synergies of approximately EUR 25 million, of which approximately 60 percent are expected to be achieved by the end of 2023 and approximately 90 percent by the end of 2024. Valmet’s orders received included approximately EUR 10 million synergy impact in 2022. Approximately EUR 12 million of annual run rate cost synergies were achieved by the end of 2022. Roughly half of the achieved run rate synergies were realized as cost savings in 2022.
Russia’s invasion of Ukraine and sanctions on Russia
Due to Russia’s invasion of Ukraine, Valmet reviewed key contractual obligations, project schedules, and identified risks for projects that are delivered to Russia. Based on the review, Valmet identified projects that it estimates no longer to meet the criteria of a customer contract for revenue recognition purposes, and consequently made a reversal of approximately EUR 80 million to its order backlog during 2022.
On June 3, 2022, Valmet announced that it has initiated employee reductions, which will result in a 50 percent reduction in the number of employees in Russia in the first implementation phase. A second phase was implemented in autumn and resulted in further employee reductions and the closure of one legal entity. Consequently, Valmet recorded an expense of approximately EUR 20 million during 2022 for estimated restructuring costs, asset impairments and other exceptional items triggered by Valmet’s decision to withdraw from Russia. These costs have been reported in cost of sales, in selling, general and administrative expenses and in other operating expenses, and have been reported as items affecting comparability. Therefore they do not impact Comparable EBITA. At the end of 2022, Valmet had a total of approximately 30 employees in Russia, working primarily in administration, engineering and maintenance. Valmet does not have production in Russia. Approximately 2 percent of Valmet’s net sales came from its Russian operations in 2021.
Valmet will withdraw from Russia completely and will continue to implement the withdrawal in stages as the review of implementation options is fully completed. Valmet complies with all sanctions and export regulations impacting business with Russia and Belarus and monitors the development actively.
Key figures1
1The calculation of key figures is presented on page 62.
2At end of period.
3Adjusted earnings per share (Adjusted EPS) is a new alternative performance measure that excludes the impact of fair value adjustments arising from business combinations, net of tax. Adjusted EPS enables users of the financial information to prepare more meaningful analysis on Valmet’s performance and is presented with comparatives from Q2/2022 onwards.
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/2022-q4 on Thursday, February 2, 2023, at 2:00 p.m. Finnish time (EET). President and CEO Pasi Laine 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:
http://palvelu.flik.fi/teleconference/?id=1009887
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 on your telephone keypad to enter the question queue.
All questions should be presented in English.
The event can also be followed on Twitter at www.twitter.com/valmetir.
Further information, please contact:
Pekka Rouhiainen, Vice President, Investor Relations, Valmet, tel. +358 10 672 0020
VALMET
Katri Hokkanen
CFO
Pekka Rouhiainen
Vice President, Investor Relations
DISTRIBUTION:
Nasdaq Helsinki
Major media
www.valmet.com
Valmet is a leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries.With our automation systems and flow control solutions, we serve an even wider base of process industries. Our 17,500 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. In 2022, a major milestone was achieved when the flow control company Neles was merged into Valmet. Valmet’s net sales in 2022 were approximately EUR 5.1 billion.
Valmet’s shares are listed on the Nasdaq Helsinki, and the head office is in Espoo, Finland.
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