Valmet's Financial Statements Review January 1 - December 31, 2023: Orders
received amounted close to EUR 5.0 billion and Comparable EBITA increased to EUR
619 million in 2023
Valmet Oyj's stock exchange release onFebruary 7, 2024 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.
October-December 2023: Net sales remained at the previous year's level,
Comparable EBITA decreased
• Orders received decreased 17 percent to EUR 1,155 million (EUR 1,385
million).
- Orders received remained at the previous year's level in the Automation
and Services segments and decreased in the Process Technologies segment.
- Orders received increased in South America, remained at the previous
year's level in EMEA (Europe, Middle East and Africa), and decreased in China,
North America and Asia-Pacific.
• Net sales remained at the previous year's level and amounted to EUR
1,499 million (EUR 1,540 million).
- Net sales remained at the previous year's level in the Automation and
Services segments and decreased in the Process Technologies segment.
• Comparable earnings before interest, taxes and amortization
(Comparable EBITA) decreased 7 percent to EUR183 million (EUR 196 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 12.2 percent (12.7%).
• Earnings per share (EPS) were EUR 0.56 (EUR 0.66). Adjusted EPS was
EUR 0.65 (EUR 0.80).
• Items affecting comparability amounted to EUR -10 million (EUR -6
million).
• Cash flow provided by operating activities totaled EUR 123 million
(EUR -13 million).
January-December 2023: Net sales, Comparable EBITA and Comparable EBITA margin
increased
• Orders received remained at the previous year's level and amounted to
EUR 4,955 million (EUR 5,194 million).
- Orders received increased in the Automation segment, remained at the
previous year's level in the Services segment, and decreased in the Process
Technologies segment.
- Orders received increased in South America, remained at the previous
year's level in North America and decreased in EMEA, China and Asia-Pacific.
• Net sales increased 9 percent to EUR 5,532 million (EUR 5,074
million).
- Net sales increased in the Automation and Services segments and
remained at the previous year's level in the Process Technologies segment.
• Comparable earnings before interest, taxes and amortization
(Comparable EBITA) increased 16 percent to EUR619 million (EUR 533 million).
- Comparable EBITA increased in the Services and Automation segments and
decreased in the Process Technologies segment.
• Comparable EBITA margin was 11.2 percent (10.5%).
• EPS was EUR 1.94 (EUR 1.92). Adjusted EPS was EUR 2.28 (EUR 2.37).
• Items affecting comparability amounted to EUR -14 million (EUR 17
million).
• Cash flow provided by operating activities totaled EUR 352 million
(EUR 36 million).
Dividend proposal
The Board of Directors proposes to the Annual General Meeting, which is planned
to be held on March 21, 2024, a dividend of EUR 1.35 per share for 2023. The
proposed dividend equals 70 percent of the net result and it would be paid in
two installments.
Guidance for 2024
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 or increase in comparison with 2023 (EUR 619
million).
Short-term market outlook
Valmet reiterates the good/satisfactory short-term market outlook for services
(capacity utilization good, customer activity satisfactory), the good short-term
market outlook for flow control, automation systems and energy, and the
satisfactory short-term market outlook for pulp, board and paper, 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 Pasi Laine: Net sales and Comparable EBITA increased in 2023
"Valmet's orders received amounted close to EUR 5.0 billion in 2023. Orders
received increased in the Automation segment, remained at the previous year's
level in the Services segment, and decreased in the Process Technologies
segment. Orders received in Valmet's stable business totaled EUR 3.1 billion
during 2023. During this period, stable business represented 63% of Valmet's
orders received. This is a clear change in the company compared to 2014, when
stable business represented 34% of orders received. Valmet's order backlog
amounted close to EUR 4.0 billion at the end of 2023.
In 2023, Valmet's net sales increased to EUR 5.5 billion. Comparable EBITA
increased to EUR 619 million, meaning that we have been able to increase
Valmet's Comparable EBITA ten years in a row as an independent company. Valmet's
Comparable EBITA margin increased to 11.2 percent in 2023. Over the past ten
years, we have continuously raised the bar for our performance and focused on
growing the company organically with improved profitability. At the same time,
we have also moved systematically forward with mergers and acquisitions that
have complemented our unique offering and significantly increased the amount of
recurring, profitable and stable business in Valmet's business portfolio. In
2023, Comparable EBITA increased in the Services and Automation segments and
decreased in the Process Technologies segment.
The execution of Valmet's acquisition strategy took important steps forward in
2023. The acquisition of Tissue Converting business from Körber was completed
during the fourth quarter, strengthening our Process Technologies and Services
segments. During the third quarter we entered into an agreement to acquire the
Process Gas Chromatography business of Siemens AG to strengthen our Automation
segment. These acquisitions strengthen all of Valmet's three segments,
complement Valmet's offering and enable us to serve our customers even better in
the future. We are happy and proud to warmly welcome all the new colleagues to
Valmet. Furthermore, the integration of Flow Control has now been completed and
the targeted annual run rate synergies of EUR 25 million have been achieved, one
year ahead of the originally communicated schedule.
In 2023, Valmet continued its systematic sustainability work based on its
Sustainability360° Agenda. We placed significant emphasis on our Climate
Program, which progressed well over the year. Valmet achieved one of the
program's four targets well ahead of schedule and can now enable carbon neutral
production for its pulp, paper and energy industry customers. In 2023, Valmet
was included in the DJSI World and Europe indices for the tenth consecutive
year. Furthermore, we received the best ranking in the MSCI ESG Ratings, and a
gold medal in the EcoVadis sustainability assessment."
Update on the integration of Flow Control into Valmet
The merger of Neles into Valmet was completed on April 1, 2022. The integration
of Flow Control (former Neles) is completed and the targeted annual run rate
synergies of EUR 25 million have been achieved.
Key figures1
EUR million Q4/202 Q4/202 Change 2023 2022 Change
3 2
Orders received 1,155 1,385 -17% 4,955 5,194 -5%
Order backlog2 3,973 4,403 -10% 3,973 4,403 -10%
Net sales 1,499 1,540 -3% 5,532 5,074 9%
Comparable EBITA 183 196 -7% 619 533 16%
% of net sales 12.2% 12.7% 11.2% 10.5%
EBITA 172 190 -9% 605 550 10%
% of net sales 11.5% 12.3% 10.9% 10.8%
Operating profit (EBIT) 148 156 -5% 507 436 16%
% of net sales 9.9% 10.1% 9.2% 8.6%
Profit before taxes 133 152 -13% 473 431 10%
Profit for the period 103 121 -15% 359 338 6%
Earnings per share, EUR 0.56 0.66 -15% 1.94 1.92 1%
Adjusted earnings per share, EUR 0.65 0.80 -19% 2.28 2.37 -4%
Equity per share, EUR2 13.93 13.54 3% 13.93 13.54 3%
Cash flow provided by operating 123 -13 352 36 >100%
activities
Cash flow after investing -316 -45 >100% -181 56
activities
Comparable return on capital 15% 17%
employed (Comparable ROCE) before
taxes
Return on capital employed (ROCE) 14% 18%
before taxes
Return on equity (ROE) 14% 18%
Net debt to EBITDA ratio3 1.46 0.78
Gearing2 40% 20%
Equity to assets ratio2 43% 49%
1 The calculation of key figures is presented on page 60.
2 At end of period.
3 Net debt to EBITDA ratio is a new alternative performance measure. It
enables users of the financial information to prepare more meaningful analysis
on Valmet's performance and is presented with comparatives from Q1/2023 onwards.
Segment key figures
Orders received, EUR million Q4/2023 Q4/2022 Change 2023 2022 Change
Services 404 418 -3% 1,760 1,756 0%
Automation 319 324 -1% 1,340 1,081 24%
Flow Control 176 189 -7% 789 576 37%
Automation Systems 143 135 6% 551 505 9%
Process Technologies 432 644 -33% 1,856 2,356 -21%
Pulp and Energy 227 280 -19% 854 1,072 -20%
Paper 204 364 -44% 1,002 1,285 -22%
Total 1,155 1,385 -17% 4,955 5,194 -5%
Net sales, EUR million Q4/2023 Q4/2022 Change 2023 2022 Change
Services 508 505 1% 1,784 1,606 11%
Automation 375 363 3% 1,328 1,040 28%
Flow Control 196 191 2% 777 551 41%
Automation Systems 180 172 4% 551 489 13%
Process Technologies 615 672 -8% 2,420 2,428 0%
Pulp and Energy 268 284 -5% 1,067 1,081 -1%
Paper 347 388 -11% 1,353 1,347 0%
Total 1,499 1,540 -3% 5,532 5,074 9%
Comparable EBITA, EUR million Q4/2023 Q4/2022 Change 2023 2022 Change
Services 91 95 -4% 312 237 32%
Automation 79 78 2% 248 190 30%
Process Technologies 25 38 -33% 110 145 -24%
Other -13 -14 -10% -50 -39 29%
Total 183 196 -7% 619 533 16%
Comparable EBITA, % of net sales Q4/2023 Q4/2022 2023 2022
Services 17.9% 18.7% 17.5% 14.8%
Automation 21.1% 21.4% 18.6% 18.3%
Process Technologies 4.1% 5.6% 4.5% 6.0%
Total 12.2% 12.7% 11.2% 10.5%
EBITA, EUR million Q4/2023 Q4/2022 Change 2023 2022 Change
Services 80 94 -15% 302 228 32%
Automation 80 71 13% 245 170 45%
Process Technologies 29 36 -19% 116 134 -14%
Other -18 -11 58% -58 18
Total 172 190 -9% 605 550 10%
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/q4-2023 on Wednesday, February 7, 2024, 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:
https://palvelu.flik.fi/teleconference/?id=50048299
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 www.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 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 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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