Valmet: Record-high third quarter margin, but slower market activity than expected
Valmet reiterates its guidance issued on October 11, 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 remain at the previous year’s level in comparison with 2023 (EUR 619 million).
Short-term market outlook
Valmet estimates that the short-term market outlook for services has decreased to satisfactory (previously good) and that the short-term market outlook for board and paper has decreased to weak (previously satisfactory). Valmet reiterates the good short-term market outlook for flow control and automation systems, and the satisfactory short-term market outlook for pulp, energy and 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 Thomas Hinnerskov: “I had the honor to join Valmet as President and CEO in mid-August. I have spent my first months meeting Valmet’s people and customers across different continents. Valmet’s strong relationship with customers, committed people and the amazing legacy of more than 225 years creates a solid foundation for Valmet’s next chapter. I am fully committed to making Valmet a success for our customers, shareholders, employees, and society.
The third quarter was two-sided. On one hand, Comparable EBITA margin was 12.0%, the best third quarter margin for Valmet ever. On the other hand, the market activity in Services and board and paper process technologies was slower than we earlier expected, and some customers postponed their final investment decisions. As a result, Valmet’s Comparable EBITA guidance for 2024 was changed in October.
Looking ahead, we are excited about the opportunities ahead of us. We have recently launched Valmet DNAe, Valmet’s next-generation industrial automation system, which is an important step in our strategy for growing the automation business further to a wide base of process industries globally. In Services, we continue to provide unique value to customers and service the growing global installed base.
We are proud to have been selected to supply the world’s largest single-phase pulp mill. This project, valued at over a billion euros, will be included in our fourth quarter orders and will feature full-scope automation and flow control solutions. Importantly, it will serve as a showcase for Valmet’s sustainable technologies, reinforcing our commitment to moving our customers’ performance forward and environmental stewardship.”
January–September 2024: Orders received amounted to EUR 3,374 million
- Orders received decreased 11 percent to EUR 3,374 million (EUR 3,801 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 remained at the previous year’s level in South America and EMEA and decreased in China, Asia-Pacific and North America. - Net sales decreased 5 percent to EUR 3,831 million (EUR 4,033 million).
Net sales increased in the Automation segment, remained at the previous year’s level in the Services segment, and decreased in the Process Technologies segment. - Comparable EBITA remained at the previous year’s level and amounted to EUR 417 million (EUR 437 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 10.9 percent (10.8%).
- EPS was EUR 0.99 (EUR 1.38). EPS decreased mainly due to lower operating profit and higher net financial expenses. Adjusted EPS was EUR 1.33 (EUR 1.63).
- Items affecting comparability amounted to EUR -33 million (EUR -4 million) and were mainly related to Process Technologies and Services segments.
- Cash flow provided by operating activities totaled EUR 376 million (EUR 229 million).
