Valmet has published its Half Year Financial Review January 1 – June 30, 2024. Orders received remained at the previous year's level and amounted close to EUR 1.3 billion and Comparable EBITA decreased to EUR 141 million in the second quarter
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e., the same period of the previous year.
April–June 2024: Orders received remained at the previous year's level
• Orders received remained at the previous year’s level and amounted to EUR 1,283 million (EUR 1,268 million).
– Orders received increased in the Services segment, remained at the previous year's level in the Automation segment, and decreased in the Process Technologies segment.
– Orders received increased in EMEA (Europe, Middle East and Africa), North America and China, and decreased in Asia-Pacific and South America.
• Net sales decreased 7 percent to EUR 1,324 million (EUR 1,417 million).
– Net sales remained at the previous year's level in the Automation and Services segments and decreased in the Process Technologies segment.
• Comparable earnings before interest, taxes and amortization (Comparable EBITA) decreased 8 percent to EUR 141 million (EUR 153 million).
– Comparable EBITA remained at the previous year's level in the Services and Automation segments and decreased in the Process Technologies segment.
• Comparable EBITA margin was 10.6 percent (10.8%).
• Earnings per share (EPS) were EUR 0.31 (EUR 0.54). EPS decreased mainly due to lower operating profit and higher net financial expenses. Adjusted EPS was EUR 0.43 (EUR 0.60). Adjusted EPS decreased mainly due to lower EBITA and higher net financial expenses.
• Items affecting comparability amounted to EUR -9 million (EUR 2 million).
• Cash flow provided by operating activities totaled EUR 128 million (EUR -37 million).
January–June 2024: Orders received amounted to EUR 2,333 million
• Orders received decreased 17 percent to EUR 2,333 million (EUR 2,821 million).
– Orders received remained at the previous year's level in the Services segment and decreased in the Process Technologies and Automation segments.
– Orders received remained at the previous year's level in EMEA and decreased in China, South America, Asia-Pacific and North America.
• Net sales decreased 7 percent to EUR 2,536 million (EUR 2,738 million).
– Net sales remained at the previous year's level in the Services and Automation segments and decreased in the Process Technologies segment.
• Comparable EBITA decreased 9 percent to EUR 262 million (EUR 286 million).
– Comparable EBITA remained at the previous year's level in the Automation and Services segments and decreased in the Process Technologies segment.
• Comparable EBITA margin was 10.3 percent (10.5%).
• EPS was EUR 0.62 (EUR 0.92). Adjusted EPS was EUR 0.84 (EUR 1.11).
• Items affecting comparability amounted to EUR -16 million (EUR 0 million).
• Cash flow provided by operating activities totaled EUR 267 million (EUR 172 million).
Guidance for 2024
Valmet reiterates its guidance issued on June 13, 2024, in which 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).
Short-term market outlook
Valmet estimates that the short-term market outlook for pulp has increased to satisfactory (previously weak) and that the short-term market outlook for board and paper has increased to satisfactory (previously weak/satisfactory, in which weak referred to customer activity and satisfactory to Valmet's capacity utilization). Furthermore, Valmet estimates that the short-term market outlook for energy has decreased to satisfactory (previously good). Valmet reiterates the good short-term market outlook for services, flow control and automation systems, and the satisfactory short-term market outlook for tissue.
The short-term market outlook is given for the next six months from the end of the reported period. It is based on customer activity (50%) and Valmet’s capacity utilization (50%), and the scale is ‘weak–satisfactory–good’.
President and CEO Pasi Laine: Orders received remained at the previous year's level and amounted close to EUR 1.3 billion in the second quarter
"Valmet’s orders received remained at the previous year’s level and amounted close to EUR 1.3 billion in the second quarter. Orders received increased in Services, remained at the previous year’s level in Automation and decreased in Process Technologies. Orders received in Valmet’s stable business totaled close to EUR 3.1 billion during the last four quarters, representing 69% of Valmet’s orders received. This is a clear change in the company compared to 2014, when stable business represented 34% of orders received. Valmet’s order backlog amounted to EUR 3.8 billion at the end of the quarter.
Valmet’s net sales amounted to EUR 1.3 billion. Net sales remained at the previous year’s level in Services and Automation, and decreased in Process Technologies. Comparable EBITA margin was 16.9% in Services, 16.5% in Automation and 3.0% in Process Technologies. Comparable EBITA totaled to EUR 141 million and amounted to EUR 80 million in Services, EUR 58 million in Automation and EUR 15 million in Process Technologies.
Valmet’s short-term market outlook remains good for Services and Automation segments. Today, we have increased Process Technologies' short-term market outlook for pulp, and for board and paper to satisfactory. The short-term market outlook for energy was decreased to satisfactory. The market activity overall has improved compared to the end of Q1/2024 and we have a good starting point in terms of market activity going into the second half of the year. During the quarter, Valmet revised upwards its Comparable EBITA guidance for 2024. In the new guidance, Valmet estimates that net sales in 2024 will remain at the previous year's level in comparison with 2023 and Comparable EBITA in 2024 will increase in comparison with 2023.
I have been working in different positions at Valmet and its predecessors for several decades and as Valmet’s President and CEO since Valmet became an independent company in 2013. Since 2013, Valmet has created approximately EUR 5 billion in total shareholder value, taking the full dividend for 2023 into account. I am extremely proud of this and many other important milestones that we have achieved together as Valmeteers during these years.
As I prepare to step down from my role, I am confident that the foundation we have built positions Valmet well for continued success in the future. I wish to extend my deepest thanks to our customers and partners for the good cooperation we have enjoyed over the years, to our shareholders for your trust, and to all my colleagues at Valmet for your hard work, dedication and passion."