Valmet: Strong start for the year in the Services and Automation segments

President and CEO Thomas Hinnerskov: “Valmet’s first quarter performance was strong in our two most profitable segments, Services and Automation. We saw organic growth of 12% in Automation and 8% in Services orders received. Comparable EBITA in both segments increased, with Services starting the year with the best ever Q1 margin of 17.6%.

The highlight of the quarter in Process Technologies was a large recovery boiler order, which our Pulp and Energy team successfully secured. However, the market activity in Process Technologies overall remained subdued, with orders received falling below our earlier expectations.

Despite the strong performance in the stable business, Valmet’s first quarter net sales and Comparable EBITA remained at the previous year’s level. This was due to a decrease in Process Technologies’ net sales, which negatively impacted the segment’s Comparable EBITA.

This highlights the importance of our strategic renewal. During the quarter, we announced plans to change our operating model as the first concrete action to support the planned strategy. The proposed operating model is designed to deliver more value to our customers throughout the lifecycle and to empower our employees with clear accountability leading to faster decision-making, clearer responsibilities and an improved way-to-operate. Furthermore, as the market activity in Process Technologies remains low, we need to make sure we have the right efficient set-up to perform also in a challenging market.

We are closely monitoring the impact and development of the U.S. tariffs and potential retaliatory tariffs from other countries. We are taking proactive measures to mitigate any potential disruptions to our supply chain and cost structure, ensuring we remain competitive in a dynamic market environment. Valmet has global operations and a large footprint also in the USA, which partly mitigates any potential direct impacts from tariffs. Going forward, our Global Supply unit would play a key role in optimizing procurement and production to maintain our competitiveness.

As we move forward, we remain confident in our ability to navigate the current dynamic market conditions and drive sustainable growth in the long term. Our renewed strategy and operating model will position us better for the future, ensuring we continue to create value for our customers and shareholders.

We look forward to sharing more details about our strategy and the next steps on our journey at our Capital Markets Day on June 5. The event will provide further insights into how we plan to achieve our long-term goals and enhance shareholder value.”

Plans to renew the operating model

Valmet announced on March 31, 2025, that as part of the ongoing strategy renewal, Valmet plans to change its operating model to better serve customers with a lifecycle approach and to increase efficiency. The planned model would introduce five strong business areas: Automation Solutions; Flow Control; Pulp, Energy and Circularity; Packaging and Paper; and Tissue. Valmet also plans to establish a Global Supply unit and renew its corporate functions. These changes aim to speed up decision making, clarify responsibilities, and enhance cost competitiveness. Subject to country-specific processes, the changes could lead to a global reduction of up to 1,150 white-collar roles and annual cost savings of approximately EUR 80 million, with full run-rate achieved by the beginning of 2026. The new operating model is planned to take effect on July 1, 2025.

January–March 2025: Orders received, profitability and cash flow increased

Orders received increased to EUR 1,332 (EUR 1,050 million)

• Orders received increased in all three segments.
• Orders received increased in North America, Asia-Pacific and China, remained at the previous year’s level in EMEA (Europe, Middle East and Africa), and decreased in South America.

Net sales remained at the previous year’s level and amounted to EUR 1,184 million (EUR 1,212 million)

• Net sales increased in the Automation and Services segments and decreased in the Process Technologies segment.

Comparable earnings before interest, taxes and amortization (Comparable EBITA) remained at the previous year’s level and amounted to EUR 121 million (EUR 121 million)

• Comparable EBITA increased in the Services and Automation segments and decreased in the Process Technologies segment.

Comparable EBITA margin was 10.2 percent (10.0%)

Earnings per share (EPS) was EUR 0.33 (EUR 0.30). Adjusted EPS was EUR 0.41 (EUR 0.41)

Items affecting comparability amounted to EUR -8 million (EUR -7 million)

Cash flow provided by operating activities totaled EUR 217 million (EUR 138 million)