Valmet's Financial Statements Review, January 1 - December 31, 2015: Net sales increased to EUR 2.9 billion and EBITA to EUR 182 million in 2015
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period of the previous year. Automation has been consolidated into Valmet's financials since April 1, 2015, when the acquisition of Automation was completed.
October-December 2015: EBITA margin in the targeted range
- Orders received increased to EUR 793 million (EUR 480 million).
- Orders received increased in the Pulp and Energy, and Paper business lines and remained at the previous year's level in the Services business line.
- Automation contributed to orders received with EUR 67 million.
- Orders received tripled in China.
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- Net sales increased to EUR 854 million (EUR 777 million).
- Net sales increased in the Services, and Paper business lines and decreased in the Pulp and Energy business line.
- Automation contributed to net sales with EUR 95 million.
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- Earnings before interest, taxes and amortization (EBITA) and non-recurring items were EUR 63 million (EUR 48 million), and the corresponding EBITA margin was 7.3 percent (6.1%).
- Profitability improved due to increased net sales in Services and Paper business lines, improved gross profit, and the acquisition of Automation.
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- Earnings per share were EUR 0.18 (EUR 0.17).
- Non-recurring items amounted to EUR -10 million (EUR -5 million), of which EUR -5 million impairment related to fixed assets.
- Cash flow provided by operating activities was EUR 64 million (EUR 30 million).
January-December 2015: Profitability in the targeted range
- Orders received decreased to EUR 2,878 million (EUR 3,071 million).
- Orders received increased in the Services business line, remained at the previous year's level in the Paper business line, and decreased in the Pulp and Energy business line.
- Automation contributed to orders received with EUR 222 million.
- Orders received increased in China and North America.
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- Net sales increased to EUR 2,928 million (EUR 2,473 million).
- Net sales increased in the Paper, and Services business lines and remained at the previous year's level in the Pulp and Energy business line.
- Automation contributed to net sales with EUR 229 million.
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- Earnings before interest, taxes and amortization (EBITA) and non-recurring items were EUR 182 million (EUR 106 million), and the corresponding EBITA margin was 6.2 percent (4.3%).
- Profitability improved due to increased net sales in Services and Paper business lines, improved gross profit, and the acquisition of Automation.
- Earnings per share were EUR 0.51 (EUR 0.31).
- Non-recurring items amounted to EUR -26 million (EUR -12 million), of which EUR -14 million related to the acquisition of Automation and EUR -5 million to impairment of fixed assets.
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- Cash flow provided by operating activities was EUR 78 million (EUR 236 million).
Dividend proposal
The Board of Directors proposes for the Annual General Meeting that a dividend of EUR 0.35 per share be paid. The proposed dividend equals to 68 percent of the net result.
Guidance for 2016
Valmet estimates that net sales in 2016 will remain at the same level with 2015 (EUR 2,928 million) and EBITA before non-recurring items in 2016 will increase in comparison with 2015 (EUR 182 million).
Short-term outlook
General economic outlook
Global growth, currently estimated at 3.1 percent in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017. The pickup in global activity is projected to be more gradual than in the October 2015 World Economic Outlook (WEO), especially in emerging market and developing economies. In advanced economies, a modest and uneven recovery is expected to continue, with a gradual further narrowing of output gaps. The picture for emerging market and developing economies is diverse but in many cases challenging. The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth prospects in 2016-17. (International Monetary Fund, January 19, 2016)
Short-term market outlook
Valmet estimates that the short-term market outlook has improved for Board and Paper to good level (previously satisfactory level) and for Energy to satisfactory level (previously weak level). Valmet also estimates that the short-term market outlook for Pulp has decreased to satisfactory level (previously good level).
Valmet reiterates the satisfactory short-term market outlook for services, automation, and tissue.
President and CEO Pasi Laine: Acquisition of Automation and profitability improvement the main successes of 2015
The year 2015, Valmet's second year as an independent company, was successful in many ways. We acquired and integrated the Automation business, we were able to improve profitability and to reach our targeted profitability range for the full year, and we retained our position among the world's sustainability leaders for the second consecutive year. The role of our stable business, meaning services and automation, has increased, which offers us resilience and visibility. We succeeded in strengthening our position in the paper industry, and we are now the market leader in paper, board and tissue technologies.
One of the highlights of the year was the acquisition of Automation. With our unique offering, we are now capable of serving our customers better than ever and move our customers' performance forward. Having process technology, automation and services within the same company clearly differentiates us from our competitors.
The acquisition of Automation has also strengthened Valmet's position as the forerunner in Industrial Internet. This plays an important role in enhancing our leadership in technology and innovation. Another key element is our renewal capability. Going forward, the focus areas of our research and development work are to ensure advanced and competitive technologies and services, to enhance raw material, water and energy efficiency, and to promote renewable materials.
For the last couple of years, we have worked very hard to reach our profitability target. I am very pleased to see that Valmet's profitability in 2015 reached the targeted level. Every Valmet employee around the world has made a valuable contribution to this. The significant improvement in profitability over a rather short time has required a lot of team work, commitment and determination.
Key figures*
| EUR million | Q4/2015 | Q4/2014 | Change | 2015 | 2014 | Change |
| Orders received | 793 | 480 | 65% | 2,878 | 3,071 | -6% |
| Order backlog** | 2,074 | 1,998 | 4% | 2,074 | 1,998 | 4% |
| Net sales | 854 | 777 | 10% | 2,928 | 2,473 | 18% |
| Earnings before interest, taxes and amortization (EBITA) and non-recurring items | 63 | 48 | 31% | 182 | 106 | 73% |
| % of net sales | 7.3% | 6.1% | 6.2% | 4.3% | ||
| Earnings before interest, taxes and amortization (EBITA) | 52 | 43 | 22% | 157 | 94 | 67% |
| % of net sales | 6.1% | 5.5% | 5.3% | 3.8% | ||
| Operating profit (EBIT) | 41 | 38 | 11% | 120 | 72 | 65% |
| % of net sales | 4.9% | 4.8% | 4.1% | 2.9% | ||
| Profit before taxes | 37 | 36 | 2% | 108 | 67 | 61% |
| Profit / loss | 28 | 25 | 10% | 78 | 46 | 69% |
| Earnings per share, EUR | 0.18 | 0.17 | 9% | 0.51 | 0.31 | 67% |
| Earnings per share, diluted, EUR | 0.18 | 0.17 | 9% | 0.51 | 0.31 | 67% |
| Equity per share**, EUR | 5.70 | 5.36 | 6% | 5.70 | 5.36 | 6% |
| Dividend per share, EUR | 0.35*** | 0.25 | 40% | |||
| Cash flow provided by operating activities | 64 | 30 | >100% | 78 | 236 | -67% |
| Cash flow after investments | 51 | 15 | >100% | -287 | 194 | |
| Return on equity (ROE) | 9% | 6% | ||||
| Return on capital employed (ROCE) before taxes | 12% | 9% |
* The calculation of key figures is presented in the Tables section of the Financial Statements Review 2015.
** At the end of period.
*** Board of Directors' proposal.
| Equity to assets ratio and gearing | As at December 31, 2015 | As at December 31, 2014 | As at September 30, 2015 | ||
| Equity to assets ratio at end of period | 36% | 42% | 35% | ||
| Gearing at end of period | 21% | -21% | 28% |
| Orders received, EUR million | Q4/2015 | Q4/2014 | Change | 2015 | 2014 | Change |
| Services | 267 | 273 | -2% | 1,119 | 1,055 | 6% |
| Automation | 67 | - | - | 222 | - | - |
| Pulp and Energy | 261 | 66 | >100% | 864 | 1,344 | -36% |
| Paper | 199 | 142 | 40% | 673 | 671 | 0% |
| Total | 793 | 480 | 65% | 2,878 | 3,071 | -6% |
| Order backlog, EUR million | As at December 31, 2015 | As at December 31, 2014 | Change | As at September 30, 2015 | |
| Total | 2,074 | 1,998 | 4% | 2,117 |
| Net sales, EUR million | Q4/2015 | Q4/2014 | Change | 2015 | 2014 | Change |
| Services | 314 | 278 | 13% | 1,128 | 989 | 14% |
| Automation | 95 | - | - | 229 | - | - |
| Pulp and Energy | 245 | 312 | -22% | 913 | 956 | -5% |
| Paper | 200 | 186 | 8% | 659 | 528 | 25% |
| Total | 854 | 777 | 10% | 2,928 | 2,473 | 18% |
Webcast for analysts, investors and media
Valmet will arrange a news conference in English for investment analysts, investors, and media on Tuesday, February 9, 2016 at 2:00 p.m. Finnish time (EET). The news conference will be held at Valmet Head Office in Keilaniemi, Keilasatama 5, 02150 Espoo, Finland. The news conference can also be followed through a live webcast at www.valmet.com/webcasts.
It is also possible to take part in the news conference through a conference call. Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at 1:55 p.m. (EET), at +44 1452 560304. The participants will be asked to provide the following conference ID: 25632403.
During the webcast and the conference call, all questions should be presented in English. After the webcast and the conference call, media has a possibility to interview the management in Finnish.
The event can also be followed in Twitter at www.twitter.com/valmetir.
Further information, please contact:
Hanna-Maria Heikkinen, Vice President, Investor Relations, Valmet, tel. +358 10 672 0007
Kari Saarinen, Chief Financial Officer, Valmet, tel. +358 10 672 0031
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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