ESPOO, Finland, July 27, 2022 /PRNewswire/ — Valmet Oyj’s stock exchange release on June 27, 2022 at 2:00 p.m. EEST
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e., the same period of the previous year.
Starting from January 1, 2022, Valmet has a new financial reporting structure consisting of three reportable segments (segments): Services, Automation and Process Technologies. Services segment includes the Services business line. Automation segment includes the Automation Systems business line (previously called Automation), and as of April 1, 2022, also the Flow Control business line. Process Technologies segment includes the Pulp and Energy, and Paper business lines.
Adjusted 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.
April–June 2022: Comparable EBITA increased but the Comparable EBITA margin decreased
• Orders received increased 6 percent to EUR 1,306 million (EUR 1,228 million).
– Orders received increased in the Automation and Services segments and decreased in the Process Technologies segment.
– Orders received increased in North America, Asia-Pacific and EMEA (Europe, Middle East and Africa), and decreased in South America and China.
• Net sales increased 36 percent to EUR 1,286 million (EUR 943 million).
– Net sales increased in the Automation, Services and Process Technologies segments.
• Comparable earnings before interest, taxes and amortization (Comparable EBITA) increased 29 percent to EUR 122 million (EUR 95 million).
– Comparable EBITA increased in the Automation and Services segments and decreased in the Process Technologies segment.
• Comparable EBITA margin was 9.5 percent (10.1%).
• Earnings per share were EUR 0.55(EUR 0.43). Adjusted earnings per share were EUR 0.68(EUR 0.45).
• Items affecting comparability amounted to EUR 32 million (EUR 2 million).
• Cash flow provided by operating activities was EUR -85 million (EUR 180 million).
• April–June was the first quarter with Flow Control as part of Valmet.
January–June 2022: Orders received remained at the previous year’s level and Comparable EBITA increased
• Orders received remained at the previous year’s level and amounted to EUR 2,631 million (EUR 2,540 million).
– Orders received increased in the Automation and Services segments and decreased in the Process Technologies segment.
– Orders received increased in North America, Asia-Pacific and EMEA and decreased in South America and China.
• Net sales increased 25 percent to EUR 2,246 million (EUR 1,801 million).
– Net sales increased in the Automation, Services and Process Technologies segments.
• Comparable earnings before interest, taxes and amortization (Comparable EBITA) increased 15 percent to EUR 202 million (EUR 175 million).
– Comparable EBITA increased in the Automation and Services segments and decreased in the Process Technologies segment.
• Comparable EBITA margin was 9.0 percent (9.7%).
• Earnings per share were EUR 0.87(EUR 0.81). Adjusted earnings per share were EUR 1.05(EUR 0.86).
• Items affecting comparability amounted to EUR 27 million (EUR 11 million).
• Cash flow provided by operating activities was EUR -65 million (EUR 328 million).
Guidance for 2022
Valmet reiterates its guidance issued on April 1, 2022, in which Valmet estimates that, including the merger with Neles, net sales in 2022 will increase in comparison with 2021 (EUR 3,935 million) and Comparable EBITA in 2022 will increase in comparison with 2021 (EUR 429 million).
Short-term market outlook
Valmet estimates that the short-term market outlook for pulp has decreased to good/satisfactory (previously good) and that the short-term market outlook for energy has improved to good (previously satisfactory). Valmet reiterates the good short-term market outlook for services, flow control, automation systems, and board and paper, and the satisfactory short-term market outlook for 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 Pasi Laine: Strong start for Flow Control as part of Valmet
«Valmet’s orders received increased to EUR 1,306 million in the second quarter of 2022. Orders received increased in Automation and Services segments, and decreased in the Process Technologies segment. Our order backlog increased to EUR 4,784 million, which is EUR 688 million higher than at the end of 2021.
Net sales increased in all business lines. This is a good achievement, as lockdowns in China, the war in Ukraine and a fire at one of our sites in Finland impacted the operations during the quarter. Comparable EBITA increased, but Comparable EBITA margin decreased. Comparable EBITA increased in Automation and Services, and decreased in Process Technologies. Cost inflation impacted Valmet’s margins during the quarter. Valmet’s goal is to offset the cost inflation at least partly through increased productivity, procurement savings and price increases.
The merger of Neles into Valmet was completed on April 1, 2022, and Neles became Valmet’s fifth business line called Flow Control. Flow Control is part of Valmet’s Automation segment. The integration of Flow Control into Valmet is proceeding according to the plan. Active sales and marketing of Valmet’s whole offering and implementation of several cost synergy actions were started during the quarter. Our customers appreciate Valmet’s unique offering, which combines process technologies, automation and services.»
Merger with Neles
On July 2, 2021, Valmet announced that the Boards of Directors of Valmet Oyj and Neles Corporation had signed a combination agreement and a merger plan to combine the two companies through a merger. Both companies held an Extraordinary General Meeting on September 22, 2021, and both EGMs approved the merger. Valmet and Neles had received all competition approvals for the merger of Neles into Valmet on March 21, 2022. Valmet’s Annual General Meeting on March 22, 2022, resolved to pay a dividend of EUR 1.20 per share and the Neles Annual General Meeting on March 22, 2022, resolved to pay a dividend of EUR 0.266 per share in accordance with the combination agreement. In addition, Neles’ Board of Directors decided on March 22, 2022, on an extra distribution of funds in total of EUR 2.00 per share in accordance with the combination agreement. The dividends and Neles’ extra distribution of funds of EUR 2.00 per share were executed on March 31, 2022. The merger of Valmet and Neles was registered with the Finnish Trade Register on April 1, 2022.
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.
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