Valmet targets to grow with improved profitability

Valmet Oyj's stock exchange release on June 21, 2016 at 3:30 p.m. EET

Valmet's Board of Directors has confirmed Valmet's strategy and higher financial targets. The strategy is a continuation of the previous strategy, which was reconfirmed on June 24, 2015.

Strategy

Valmet's mission is to convert renewable resources into sustainable results. The company develops and supplies competitive process technology, services and automation to the pulp, paper and energy industries. Valmet is committed to moving its customers' performance forward with its unique offering.

Valmet's vision is to become the global champion in serving its customers. Valmet seeks growth with improved profitability in pulp, paper and energy industries.

Financial targets increased

Valmet's financial targets are the following (previous targets in brackets):

Net sales for stable business to grow over two times the market growth (net sales growth to exceed market growth)
Net sales for capital business to exceed market growth (net sales growth to exceed market growth)
Comparable EBITA: 8-10% (6-9%)
Comparable return on capital employed (pre-tax), ROCE: 15-20% (minimum of 15%)
Dividend payout at least 50% of net profit (40%)

Stable business means Services and Automation business lines. Capital business means Paper, and Pulp and Energy business lines.

Strategy implementation through Must-Win initiatives

Valmet implements its strategy through four Must-Win initiatives: customer excellence, leader in technology and innovation, excellence in processes, and winning team.

In customer excellence Valmet has launched its new service concept, Valmet Way to Serve. Further it targets to grow with new customers and regions and strengthens ongoing sales management initiatives. In leader in technology, Valmet continues to develop leading technology and to reduce product costs.

Valmet's comprehensive industrial internet solutions and focused R&D work enhance its technological leadership. Valmet invests in a new ERP (Enterprise resource planning) system to support process improvements aiming at operational excellence. Nurturing shared values and continuing globalization of its capabilities are important factors in building winning team.

Comment from Pasi Laine, President and CEO of Valmet:

"Since the demerger, we have strengthened our offering and market position. We have also succeeded to reach good results in our internal efficiency programs. As a result of our actions, we reached our EBITA-margin target range in 2015 and we have decided to set higher, more demanding financial targets.

We will continue to implement our strategy with our four Must-Win initiatives. We are focusing on improving our customer excellence further with our new service concept. We also continue to concentrate on process improvement, and our ongoing ERP investment is a good example of that. We are aiming at becoming the global champion in serving our customers," says Pasi Laine, President and CEO of Valmet.

Further information, please contact:
Pasi Laine, President and CEO, Valmet, tel. +358 10 672 0001
Kari Saarinen, CFO, Valmet, tel. +358 10 672 0031

Valmet Capital Markets Day for institutional investors and analysts will take place in Helsinki on Tuesday, September 20, 2016. The aim of the Capital Markets Day is to provide information of Valmet's strategy. More information: www.valmet.com/cmd

VALMET

Kari Saarinen
CFO

Hanna-Maria Heikkinen
VP, Investor Relations

Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.

Valmet's strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers' processes and enhance the effective utilization of raw materials and energy.

Valmet's net sales in 2015 were approximately EUR 2.9 billion. Our 12,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward - every day. Valmet's head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.

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