Valmet's Interim Review: Orders received amounted to EUR 835 million

Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period of the previous year. As of January 1, 2019, Valmet has adopted IFRS 16 without restating the figures for the comparison period.

January-March 2019: Profitability improved

 ◆Orders received decreased 6 percent to EUR 835 million (EUR 890 million).
    •Orders received increased in the Automation business line, remained at the previous year's level in the Pulp and Energy, and Services business lines and decreased in the Paper business line.

    •Orders received increased in Asia-Pacific and decreased in other areas.

 ◆Net sales decreased 6 percent to EUR 686 million (EUR 732 million).

    •Net sales increased in the Services and Automation business lines and decreased in the Pulp and Energy, and Paper business lines.

 ◆Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 47 million (EUR 22 million), and the corresponding Comparable EBITA margin was 6.9 percent (3.0%).

    •Profitability improved due to improved sales mix, higher gross profit and unchanged level of SG&A costs.

 Earnings per share were EUR 0.21 (EUR 0.05).
 ◆Items affecting comparability amounted to EUR 2 million (EUR -3 million).
 ◆Cash flow provided by operating activities was EUR 30 million (EUR 19 million).

Guidance for 2019 unchanged

Valmet reiterates its guidance presented on February 26, 2019 and confirmed on April 1, 2019, in which Valmet estimates that net sales in 2019 will increase in comparison with 2018 (EUR 3,325 million) and Comparable EBITA in 2019 will increase in comparison with 2018 (EUR 257 million).

Short-term outlook
General economic outlook
Global growth is now projected to slow from 3.6 percent in 2018 to 3.3 percent in 2019, before returning to 3.6 percent in 2020. Conditions have eased in 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance and markets became more optimistic about a US-China trade deal. The projected pickup in the second half of 2019 is predicated on an ongoing buildup of policy stimulus in China, recent improvements in global financial market sentiment, the waning of some temporary drags on growth in the euro area, and a gradual stabilization of conditions in stressed emerging market economies.

While global growth could surprise favorably if trade differences are resolved quickly, the balance of risks to the outlook remains on the downside. A further escalation of trade tensions and the associated increases in policy uncertainty could further weaken growth. (International Monetary Fund, April 9, 2019)

Short-term market outlook
Valmet estimates that the short-term market outlook in pulp has improved to a good level (previously satisfactory level).

Valmet reiterates the good short-term market outlook for services, automation, and board and paper, and the satisfactory short-term market outlook for energy, and tissue.

President and CEO Pasi Laine: Profitability improved and order backlog increased to EUR 3 billion
"In the first quarter of 2019, Valmet's orders received amounted to EUR 835 million. Orders received increased in the Automation business line, remained at the previous year's level in the Pulp and Energy, and Services business lines, and decreased from the high levels of 2018 in the Paper business line. Valmet's order backlog increased to a record-high of EUR 3,001 million. Net sales decreased in the first quarter of the year, but Comparable EBITA increased. The corresponding margin was 6.9 percent.

During the quarter we announced the acquisition of GL&V, a North American-based global provider of technologies and services to the pulp and paper industry. The acquisition is an excellent strategic fit as it strengthens Valmet's global services business, complements our technology offering and builds further our local presence and capabilities especially in North America. The combination of Valmet's global reach and GL&V's product and services offering for chemical pulping, stock preparation, papermaking and finishing create a good basis for new business opportunities and for serving our customers even better. The 630 experts from GL&V are a great reinforcement to the global Valmet team."