Highlights of the site visit to Tampere in 2015

Valmet arranged a site visit to Tampere, Finland for investor and analysts on November 26, 2015. The theme of the visit was Valmet’s newly acquired Automation business. Tampere is the center of Valmet’s automation operations and employs almost 500 automation professionals.

The day started with a presentation by Sakari Ruotsalainen, Business Line President, Automation. Valmet is a global market leader in pulp and paper automation, and a niche leader in bio and waste-to-energy power plant automation. Automation services are part of Automation business line and account for approximately 45 percent of Automation business line’s net sales. Service business has grown steadily over the past years, as customers have reduced their own maintenance resources and at the same time they need to take process quality and performance forward.

In order to continue to be the global leader, Automation business line has increased its research and development investments by 50 percent in the last 5 years, being currently approximately 8 percent of net sales. The profitability of the Automation business has been stable, and the EBITA margin has been between 10 and 12 percent.

Jukka T. Pulkkinen, VP, Energy and Process Systems, continued by introducing energy and process automation, which account for approximately 35 percent of Automation business line’s net sales. Valmet has a strong position in bio and waste-to-energy market, UK currently being very strong market for the latter.  Some of the visitors were seemingly surprised of Valmet’s strong position in the marine industry, where Valmet has the leading position in cruise vessel automation. Over 600 ships are sailing with Valmet’s technology onboard. Growth drivers for energy and process automation are demand for renewable energy. The power generation capacity increases in China and India and also in other parts of Asia-Pacific. Valmet’s growing installed automation base also increases the demand for Valmet’s automation services.

The day ended with a presentation by Juha Koistinen, VP, Control & Measurement Systems, about Valmet’s pulp and paper automation, which accounts for approximately 65 percent of Automation business line’s net sales. Valmet is a strong player in the market, as it is the only supplier with process technology, services and automation. In this market, barriers to entry are very high. The largest growth driver is that as mill capacity is ageing worldwide, automation replacement market is expected to be active. During 2010–2014 Valmet replaced some 200 Quality Control Systems (QCS) and profiler systems, originally delivered by competitors. During the same time, competitors replaced under 10 systems that were originally delivered by Valmet.

We thank all participants for an interesting visit. Remember to watch also our summary video of the day.