Valmet’s Interim Review January 1 – March 31, 2023: Orders received increased to EUR 1.55 billion and Comparable EBITA to EUR 133 million in the first quarter
Valmet’s Interim Review January 1 – March 31, 2023: Orders received increased to EUR 1.55 billion and Comparable EBITA to EUR 133 million in the first quarter
Valmet Oyj’s stock exchange release on April 26, 2023 at 1:00 p.m. EEST
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e., the same period of the previous year.
Net debt to EBITDA ratio, Comparable gross profit, and Comparable selling, general and administrative expenses (Comparable SG&A expenses) are new alternative performance measures. They enable users of the financial information to prepare more meaningful analysis on Valmet's performance and are presented with comparatives from Q1/2023 onwards.
January–March 2023: Orders received, Net sales, Comparable EBITA and Comparable EBITA margin increased
• Orders received increased 17 percent to EUR 1,552 million (EUR 1,324 million).
– Orders received increased in the Automation and Services segments and decreased in the Process Technologies segment.
– Orders received increased in South America, North America and EMEA (Europe, Middle East and Africa), remained at the previous year's level in Asia-Pacific, and decreased in China.
• Net sales increased 38 percent to EUR 1,321 million (EUR 960 million).
– Net sales increased in all three segments.
• Comparable earnings before interest, taxes and amortization (Comparable EBITA) increased 68 percent to EUR 133 million (EUR 79 million).
– Comparable EBITA increased in the Automation and Services segments and decreased in the Process Technologies segment.
• Comparable EBITA margin was 10.1 percent (8.3%).
• Earnings per share were EUR 0.38 (EUR 0.30). Adjusted earnings per share were EUR 0.51 (EUR 0.33).
• Items affecting comparability amounted to EUR -2 million (EUR -5 million).
• Cash flow provided by operating activities was EUR 208 million (EUR 19 million).
Guidance for 2023
Valmet estimates that net sales in 2023 will increase in comparison with 2022 (EUR 5,074 million) and Comparable EBITA in 2023 will increase in comparison with 2022 (EUR 533 million).
Short-term market outlook
Valmet reiterates the good short-term market outlook for services, flow control, automation systems, energy, and board and paper, the good/satisfactory short-term market outlook for pulp, 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 quarter in order intake and profitability
“Valmet’s orders received increased to EUR 1.55 billion in the first quarter of 2023. This is a record-high quarterly order intake for us. Orders received increased in the Services and Automation segments and decreased in the Process Technologies segment. Orders received in Valmet’s stable business totaled EUR 3.2 billion during the last four quarters. Valmet has a strong order backlog amounting to EUR 4.6 billion at the end of the quarter.
The first quarter was good also in terms of net sales and Comparable EBITA, which both increased. Net sales increased in all segments. Comparable EBITA margin was 16.1% in Services, 16.3% in Automation and 4.7% in Process Technologies. Valmet’s Comparable EBITA increased to EUR 133 million and margin to 10.1%.”
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) into Valmet is proceeding according to the plan. Most of the cost synergy actions regarding function costs, common locations and supply chain were implemented already during 2022. Sales synergies have developed well. 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.
Russia's invasion of Ukraine and sanctions on Russia
Valmet's withdrawal from Russia is proceeding according to plan, and the liquidation of the two legal entities is expected to be completed by the end of the third quarter 2023. At the end of March 2023, Valmet’s number of personnel in Russia was 7 (approximately 30 at the end of 2022).
Key figures1
|
EUR million |
Q1/2023 |
Q1/2022 |
Change |
2022 |
|
Orders received |
1,552 |
1,324 |
17 % |
5,194 |
|
Order backlog2 |
4,595 |
4,459 |
3 % |
4,403 |
|
Net sales |
1,321 |
960 |
38 % |
5,074 |
|
Comparable EBITA |
133 |
79 |
68 % |
533 |
|
% of net sales |
10.1 % |
8.3 % |
|
10.5% |
|
EBITA |
131 |
74 |
76 % |
550 |
|
% of net sales |
9.9 % |
7.7 % |
|
10.8% |
|
Operating profit (EBIT) |
97 |
63 |
54 % |
436 |
|
% of net sales |
7.3 % |
6.5 % |
|
8.6% |
|
Profit before taxes |
91 |
62 |
47 % |
431 |
|
Profit for the period |
71 |
45 |
57 % |
338 |
|
Earnings per share, EUR |
0.38 |
0.30 |
25 % |
1.92 |
|
Adjusted earnings per share, EUR |
0.51 |
0.33 |
56 % |
2.37 |
|
Equity per share, EUR2 |
12.50 |
8.32 |
50 % |
13.54 |
|
Cash flow provided by operating activities |
208 |
19 |
>100% |
36 |
|
Cash flow after investments |
175 |
-6 |
|
56 |
|
Comparable return on capital employed (Comparable ROCE) before taxes (LTM) |
19 % |
24 % |
|
17% |
|
Return on capital employed (ROCE) before taxes (LTM) |
20 % |
24 % |
|
18% |
|
Return on equity (ROE) (LTM) |
20 % |
24 % |
|
18% |
|
Net debt to EBITDA ratio3 |
0.49 |
0.01 |
|
0.78 |
|
Gearing2 |
15 % |
0 % |
|
20% |
|
Equity to assets ratio2 |
45 % |
40 % |
|
49% |
1 The calculation of key figures is presented on page 48.
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.
LTM = Last twelve months
Segment key figures
|
Orders received, EUR million |
Q1/2023 |
Q1/2022 |
Change |
2022 |
|
Services |
577 |
451 |
28% |
1,756 |
|
Automation |
391 |
147 |
>100% |
1,081 |
|
Flow Control |
217 |
— |
|
576 |
|
Automation Systems |
175 |
147 |
19% |
505 |
|
Process Technologies |
584 |
727 |
-20% |
2,356 |
|
Pulp and Energy |
212 |
327 |
-35% |
1,072 |
|
Paper |
372 |
400 |
-7% |
1,285 |
|
Total |
1,552 |
1,324 |
17% |
5,194 |
|
Net sales, EUR million |
Q1/2023 |
Q1/2022 |
Change |
2022 |
|
Services |
389 |
317 |
23% |
1,606 |
|
Automation |
304 |
88 |
>100% |
1,040 |
|
Flow Control |
188 |
— |
|
551 |
|
Automation Systems |
116 |
88 |
32% |
489 |
|
Process Technologies |
628 |
555 |
13% |
2,428 |
|
Pulp and Energy |
286 |
276 |
4% |
1,081 |
|
Paper |
342 |
279 |
22% |
1,347 |
|
Total |
1,321 |
960 |
38% |
5,074 |
|
Comparable EBITA, EUR million |
Q1/2023 |
Q1/2022 |
Change |
2022 |
|
Services |
63 |
30 |
>100% |
237 |
|
Automation |
50 |
11 |
>100% |
190 |
|
Process Technologies |
30 |
41 |
-27% |
145 |
|
Other |
-9 |
-3 |
>100% |
-39 |
|
Total |
133 |
79 |
68% |
533 |
|
Comparable EBITA, % of net sales |
Q1/2023 |
Q1/2022 |
|
2022 |
|
Services |
16.1 % |
9.6 % |
|
14.8 % |
|
Automation |
16.3 % |
12.1 % |
|
18.3 % |
|
Process Technologies |
4.7 % |
7.3 % |
|
6.0 % |
|
Total |
10.1 % |
8.3 % |
|
10.5 % |
|
EBITA, EUR million |
Q1/2023 |
Q1/2022 |
Change |
2022 |
|
Services |
62 |
30 |
>100% |
228 |
|
Automation |
44 |
10 |
>100% |
170 |
|
Process Technologies |
33 |
38 |
-14% |
134 |
|
Other |
-9 |
-4 |
>100% |
18 |
|
Total |
131 |
74 |
76% |
550 |
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/q1-2023 on Wednesday, April 26, 2023, at 2:00 p.m. Finnish time (EEST). 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=1009888
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
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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