Questions and answers related to Q2 report

Why did profitability increase y-o-y? (Compared to Q2/2013)

• Due to executed cost savings

Why did profitability increase q-o-q? (Compared to Q1/2014)

• Due to executed cost savings

Orders received was strong – is this a bigger or a long-term change in the market, or more related to postponements from Q4/H2?

• Some orders were postponed in H2, and have now been seen as orders in 2014 
• Pulp order intake is always lumpy with large single orders and large impact on quarterly figures 
• Activity improved in the beginning of 2014 in Board and Paper, and Energy, like we said in the Financial Statements Bulletin (published on February 6)

Have you won new orders at discounted prices?

• Starting point for 2014 was weak, as the order backlog was on a low level, only EUR 1.4 billion
• We have won the orders at market prices, pricing environment has remained challenging
• Our aim is to be selective in new orders, especially when it is possible in situations with reasonable workload

Has the margin on the order backlog improved?

• We have now better possibilities to be selective on new orders
• Pricing environment has remained challenging

How has the pricing been in new orders?

• No change in pricing environment
• New orders sold at market prices

Are further cost cuts needed?

• Good orders received in 2014 certainly helps the situation: reasonable workload in most of the units
• However, Valmet will focus on cost competitiveness also after EUR 100 million program
• We have the possibility to continue temporary layoffs in Finland if needed

How much of the EUR 100 million cost savings was seen in Q2/H1?

• SG&As declined in H1/2014 EUR 34 million y-o-y (in Q2/2014 EUR 23 million y-o-y) 
• Full impact of savings related to SG&A is already visible

To which year’s cost base are the savings compared to?

• To H1/2013

Capacity utilization rate is now improving, as a result of orders booked in 2014. As the short-term market outlook is satisfactory for most of the businesses, is it fair to assume that you expect customer activity to weaken?

• Orders received have been very good in H1, and we believe that it cannot continue on the same level forever
• However, there are still several active negotiations with customers in all business areas

Why did you now upgrade the short-term outlook for Board and Paper to good?

• Mainly due to Valmet’s improved utilization of adjusted capacity: Valmet’s capacity utilization rate has improved as we have cut the capacity, and also the order intake has been good in 2014
• Secondly, based on our expectations for customer activity

What are the assumptions for the guidance for 2014?

• Guidance is based on our order backlog and internal estimates for 2014.