Q3/2024: Record-high third quarter margin

Valmet is navigating through a complex market landscape. Despite facing slower market activity than anticipated, Valmet has achieved record-high third quarter Comparable EBITA margin, showcasing its robust operational capabilities in Q3 2024.

Order Intake and Stable Sales

In the third quarter of 2024, Valmet’s orders received increased by 6% to EUR 1,041 million, driven by growth in the Services and Automation segments. This growth was particularly notable in South America, EMEA, and Asia-Pacific, although China saw a decline. Net sales remained stable at EUR 1,295 million, with an increase in Automation and Services offsetting a decrease in Process Technologies. Organically, Valmet's orders received decreased 1 percent and net sales decreased 8 percent in July–September.

Profitability and Margins

Valmet’s Comparable EBITA for Q3 2024 was EUR 156 million, maintaining the previous year’s level but with an improved margin of 12.0%, the highest third-quarter margin in the company’s history due to favorable sales mix. However, earnings per share (EPS) decreased to EUR 0.37 from EUR 0.47, primarily due to lower operating profit and higher financial expenses.

Segment Performance

Services: Orders received in the Services segment grew by 18%, reflecting demand across various regions except China. Net sales increased by 5% to EUR 453 million, with the segment contributing significantly to Valmet’s overall performance.

Automation: The Automation segment saw an 11% increase in orders received and a 14% rise in net sales, driven by the integration of new acquisitions and a favorable sales mix.

Process Technologies: This segment experienced a 10% decline in orders received and a 12% drop in net sales, highlighting the challenges in the market for process technology solutions.

Valmet announced that it will supply a complete pulp mill with full-scope automation and flow control solutions to Arauco in Brazil. The value of the order for Valmet is over EUR 1 billion, and it will be included in Valmet’s orders received for the fourth quarter 2024.

Strategic Acquisitions and Innovations

Valmet’s strategic acquisitions, including the Process Gas Chromatography business from Siemens and the Tissue Converting business from Körber, have bolstered its market position and expanded its technological capabilities. The launch of Valmet DNAe, a next-generation industrial automation system, marks a significant step in advancing the company’s automation business.

Outlook and Future Prospects

The company has reiterated its guidance for 2024 in conjunction with Q3 results announcement, expecting net sales and Comparable EBITA to remain at the previous year’s levels. The services market has developed somewhat slower in EMEA, China and Asia-Pacific than earlier expected. Furthermore, the market activity in board and paper process technologies has been slower than earlier expected and some customers have postponed their final investment decisions.

The short-term market outlook for services has been downgraded to satisfactory, while the outlook for board and paper has weakened. However, the outlook for flow control and automation systems remains positive.

Valmet’s workload is currently satisfactory in Pulp, even though the large Arauco order will improve capacity utilization gradually. Customers are planning several other mega mill projects in South America, but the timing is difficult to estimate.

New 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 in comparison with 2023 (EUR 619 million).

Previous guidance for 2024, issued on June 13, 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 increase in comparison with 2023 (EUR 619 million).

CEO’s review

Thomas Hinnerskov’s, Valmet’s President & CEO, has spent his first months in the company engaging with Valmet’s global teams and customers. Prior to Valmet, Hinnerskov worked at Mediq as a CEO and as an EVP at KONE. His vision for Valmet’s next chapter is built on the company’s strong legacy and customer relationships, aiming to drive success through innovation and sustainability.