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IR - Valmet's Half Year Financial Review January 1 - June 30, 2025: Strong organic growth in orders received and the new ‘Lead the Way' strategy launched in the second quarter

Company: ADVANTEST CORPORATION Date: 2025-07-23 Language: English Register to download
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 Valmet's Half Year Financial Review January 1 - June 30, 2025: Strong organic growth in orders received and the new ‘Lead the Way' strategy launched in the second quarter

# Valmet's Half Year Financial Review January 1 - June 30, 2025: Strong organic growth in orders received and the new ‘Lead the Way' strategy launched in the second quarter

Valmet's Half Year Financial Review January 1 - June 30, 2025: Strong organic
growth in orders received and the new ‘Lead the Way' strategy launched in the
second quarter

Valmet Oyj's stock exchange release onJuly 23, 2025 at 09:00 a.m. EEST

Figures in brackets, unless otherwise stated, refer to the comparison period,
i.e., the same period of the previous year.

April-June 2025: Orders received increased

•         Orders received increased to EUR 1,520 million (EUR 1,283 million).

-        Orders received increased in all three segments.

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

•         Net sales decreased 6 percent to EUR 1,241 million (EUR 1,324
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 earnings before interest, taxes and amortization
(Comparable EBITA) remained at the previous year's level and amounted to EUR143
million (EUR 141 million).

-        Comparable EBITA 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 margin was 11.5 percent (10.6%).

•         Earnings per share (EPS) was EUR 0.15 (EUR 0.31). Adjusted EPS was EUR
0.23 (EUR 0.43). The decrease in both EPS and adjusted EPS was mainly related to
restructuring expenses of the operating model renewal.

•         Items affecting comparability amounted to EUR -62 million (EUR -9
million) and were mainly related to restructuring expenses of the operating
model renewal.

•         Cash flow provided by operating activities totaled EUR 79 million (EUR
128 million).

January-June 2025: Comparable EBITA margin increased, while net sales remained
at the previous year's level

•         Orders received increased 22 percent to EUR 2,852 million (EUR 2,333
million).

-        Orders received increased in all three segments.

-        Orders received increased in China and North America, remained at the
previous year's level in EMEA and decreased in Asia-Pacific and South America.

•         Net sales remained at the previous year's level and amounted to EUR
2,426 million (EUR 2,536 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
EUR265 million (EUR 262 million).

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

•         Comparable EBITA margin was 10.9 percent (10.3%).

•         EPS was EUR 0.48 (EUR 0.62). Adjusted EPS was EUR 0.64 (EUR 0.84). The
decrease in both EPS and adjusted EPS was mainly related to restructuring
expenses of the operating model renewal.

•         Items affecting comparability amounted to EUR -70 million (EUR -16
million) and were mainly related to restructuring expenses of the operating
model renewal.

•         Cash flow provided by operating activities totaled EUR 297 million
(EUR 267 million).

Guidance for 2025 unchanged

Valmet reiterates its guidance issued on February 13, 2025, in which Valmet
estimates that net sales in 2025 will remain at the previous year's level in
comparison with 2024 (EUR 5,359 million) and Comparable EBITA in 2025 will
remain at the previous year's level in comparison with 2024 (EUR 609 million).

Short-term market outlook

The short-term market outlook is given for July-December 2025 compared with
April-June 2025. It is Valmet's estimate of the customer activity and should not
be interpreted as guidance for Valmet's orders received.

The short-term market outlook is presented in accordance with Valmet's new
financial reporting structure, that came to effect on July 1, 2025. Valmet will
change its financial reporting structure in its January-September 2025 Interim
Review. In the new financial reporting structure, Valmet consists of two
reportable segments: Biomaterial Solutions and Services, and Process Performance
Solutions.

Biomaterial Solutions and Services

Uncertainty related to global economic outlook remains high and may impact
customers' decision making, capacity utilization rates and profitability levels.

Valmet estimates that the customer activity in biomaterial services will
decrease slightly.

It is typical that customers' large investment decisions can have a significant
impact on the overall market activity in the short-term.

Process Performance Solutions

Valmet estimates that the customer activity will remain stable. However,
uncertainty related to global economic outlook remains high.

President and CEO Thomas Hinnerskov: New 'Lead the Way' strategy launched and
strong growth in orders received

"In the second quarter, we made a confident move toward our next phase of growth
by launching our new strategy, ‘Lead the Way', and setting ambitious 2030
financial targets. This strategy is designed to accelerate growth, sharpen our
cost competitiveness, and build a culture of accountability and high
performance. Our new financial targets reflect a clear step change in ambition,
and we now have a focused strategy to reach them.

A major milestone was the implementation of our new operating model on July 1.
It simplifies our structure, reinforces local accountability, and enables faster
decision-making. Going forward, we will operate through two segments - each with
a distinct strategic mission and aligned financial reporting. The segments are
Biomaterial Solutions and Services; and Process Performance Solutions.

I've had the opportunity to meet with customers since the strategy launch, and
the feedback has been encouraging. Our purpose to transform industries towards a
regenerative tomorrow and our lifecycle approach have resonated well.

Operationally, the second quarter was strong in terms of orders received.
Automation segment (Process Performance Solutions) delivered across the board,
with growth in orders, net sales, and profitability. Process Technologies and
Services segments (Biomaterial Solutions and Services) also achieved strong
order growth, including a 10 percent organic increase in Services orders,
although profitability in Process Technologies declined due to lower net sales.

While net sales and Comparable EBITA remained at the previous year's level
during H1/25, we are confident that the actions we are taking - including the
new operating model - will support our performance and competitiveness going
forward. We remain committed to executing our strategy with discipline and
creating long-term value for our customers and shareholders."

New strategy ‘Lead the Way' and 2030 financial targets

On June 4, 2025, in connection with its Capital Markets Day, we announced our
new strategy, ‘Lead the Way', and published our new 2030 financial targets.

The new strategy is designed to create an accountable high-performance culture
and accelerate the growth trajectory towards bolder targets with increased cost
competitiveness. During the strategy renewal we defined our purpose as
‘Transforming industries towards a regenerative tomorrow'. Valmet's new Strategy
‘Lead the Way' is based on four strategic fundamentals: Customer success,
Lifecycle commitment, Global competitiveness, and Accountability.

These strategic fundamentals are being reinforced by Valmet's operating model
renewal, announced on March 31, 2025, and effective since July 1, 2025. The new
operating model allows us to operate with strong business areas close to
customers, providing integrated expertise in services and technology with a
lifecycle approach. A newly formed Global Supply unit for manufacturing and
procurement will centrally drive operational excellence and ensure cost
competitiveness.

Valmet's new 2030 financial targets reflect a step change in ambition. Valmet's
financial targets are the following (previous targets in brackets):

•         Organic net sales growth (CAGR) over the cycle of 5% (previously: over
two times the market growth or exceed market growth)

•         Comparable EBITA margin of 15% (previously: 12-14%)

•         Comparable return on capital employed before taxes (Comparable ROCE)
of 20% (previously: at least 15%)

•         Gearing below 50% (new target)

New reporting structure

On June 4, 2025, Valmet announced that to reflect the new strategy and operating
model, Valmet changes its reporting structure, effective since July 1, 2025.
Valmet will change its financial reporting structure to correspond to the new
operating model in its January-September 2025 Interim Review.
In the new financial reporting structure, Valmet consists of two reportable
segments: Biomaterial Solutions and Services, and Process Performance Solutions.
The two segments are comprised of business areas as follows:

Biomaterial Solutions and Services segment consists of three business areas:

•         Pulp, Energy and Circularity

•         Packaging and Paper

•         Tissue

Process Performance Solutions segment consists of two business areas:

•         Flow Control

•         Automation Solutions

For both reportable segments, Valmet will report orders received, net sales and
profitability (EBITA and comparable EBITA), as well as amortization and items
affecting comparability. Valmet will also report orders received and net sales
for services included in the Biomaterial Solutions and Services segment to
maintain visibility to this strategically important part of the business. For
each business area, Valmet will report orders received, net sales and personnel.

Valmet will continue to report orders received, net sales and personnel for the
five geographical areas: North America, Latin America (previously South
America), EMEA, China and Asia-Pacific.

Key figures1

EUR million, or as  Q2/202  Q2/202  Change  Q1-Q2/  Q1-Q2/  Change
indicated           5       4
                                            2025    2024
Orders received     1,520   1,283   19%     2,852   2,333   22%
Order backlog2                              4,711   3,828   23%
Net sales           1,241   1,324   -6%     2,426   2,536   -4%
Comparable EBITA    143     141     2%      265     262     1%
% of net sales      11.5%   10.6%           10.9%   10.3%
EBITA               81      132     -39%    194     245     -21%
% of net sales      6.5%    9.9%            8.0%    9.7%
Operating profit    57      103     -45%    146     189     -23%
(EBIT)
% of net sales      4.6%    7.8%            6.0%    7.5%
Profit before       41      84      -52%    115     157     -27%
taxes
Profit for the      28      58      -52%    89      114     -22%
period
Earnings per        0.15    0.31    -51%    0.48    0.62    -22%
share, EUR
Adjusted earnings   0.23    0.43    -47%    0.64    0.84    -24%
per share, EUR
Equity per share,                           12.87   13.21   -3%
EUR2
Cash flow provided  79      128     -38%    297     267     11%
by operating
activities
Cash flow after     48      -14             243     95      >100%
investing
activities
Comparable return                           13.1%   13.6%
on capital
employed
(Comparable ROCE)
before taxes (LTM)
Return on capital                           10.4%   12.8%
employed (ROCE)
before taxes (LTM)
Return on equity                            10.6%   12.5%
(ROE) (LTM)
Net debt to                                 1.60    1.63
EBITDA3 ratio
Gearing2                                    42%     45%
Equity to assets                            41%     40%
ratio2

1  The calculation of key figures is presented on section ‘Formulas for
calculation of indicators'.

2  At end of period.

3  Last twelve months' EBITDA

LTM = Last twelve months.

Segment key figures

Orders received, EUR million  Q2/2025  Q2/2024  Change  Q1-Q2/  Q1-Q2/  Change
                                                        2025    2024
Services                      534      497      7%      1,102   1,024   8%
Automation                    376      352      7%      782     681     15%
Flow Control                  206      195      5%      421     389     8%
Automation Systems            170      157      9%      362     291     24%
Process Technologies          611      434      41%     968     628     54%
Pulp and Energy               240      187      28%     475     243     95%
Paper                         371      247      50%     493     385     28%
Total                         1,520    1,283    19%     2,852   2,333   22%

Net sales, EUR million  Q2/2025  Q2/2024  Change  Q1-Q2/  Q1-Q2/  Change
                                                  2025    2024
Services                460      473      -3%     893     880     1%
Automation              372      351      6%      711     659     8%
Flow Control            196      201      -2%     388     389     0%
Automation Systems      176      150      17%     323     271     19%
Process Technologies    409      500      -18%    822     997     -18%
Pulp and Energy         228      221      3%      406     447     -9%
Paper                   181      279      -35%    416     550     -24%
Total                   1,241    1,324    -6%     2,426   2,536   -4%

Comparable EBITA, EUR million  Q2/2025  Q2/2024  Change  Q1-Q2/  Q1-Q2/  Change
                                                         2025    2024
Services                       83       80       4%      159     140     14%
Automation                     66       58       15%     121     109     11%
Process Technologies           4        15       -74%    10      36      -72%
Other                          -10      -12      -17%    -26     -23     13%
Total                          143      141      2%      265     262     1%

Comparable EBITA, % of net sales  Q2/2025  Q2/2024    Q1-Q2/  Q1-Q2/
                                                      2025    2024
Services                          18.1%    16.9%      17.8%   15.9%
Automation                        17.8%    16.5%      17.0%   16.5%
Process Technologies              1.0%     3.0%       1.2%    3.6%
Total                             11.5%    10.6%      10.9%   10.3%

EBITA, EUR million    Q2/2025  Q2/2024  Change  Q1-Q2/  Q1-Q2/  Change
                                                2025    2024
Services              63       78       -19%    139     134     4%
Automation            53       58       -8%     107     107     -1%
Process Technologies  -13      9                -8      31
Other                 -22      -13      69%     -43     -27     60%
Total                 81       132      -39%    194     245     -21%



News conference and webcast for analysts, investors and media

Valmet will arrange a news conference in English as a live webcast at
https://valmet.videosync.fi/q (https://valmet.videosync.fi/q1
-2025)2 (https://valmet.videosync.fi/q1-2025)
-2025 (https://valmet.videosync.fi/q1-2025) on Wednesday, July 23, 2025, at
10:00 a.m. Finnish time (EEST). President and CEO Thomas Hinnerskov and CFO
Katri Hokkanen will be presenting the results.

Recording of the webcast will be available shortly after the event on the same
website.

It is possible to take part in the news conference through a conference call by
registering through the link below:

https://player.videosync.fi/valmet/q (https://player.videosync.fi/valmet/q1
-2025/dial-in)2 (https://player.videosync.fi/valmet/q1-2025/dial-in)-2025/dial
-in (https://player.videosync.fi/valmet/q1-2025/dial-in)

After the registration you will be provided phone numbers and a conference ID to
access the conference. If you wish to ask a question during the conference,
please dial \*5 to enter the question queue.

The event is held in English.

Further information, please contact:

Pekka Rouhiainen, VP, Investor Relations, Valmet, tel. +358 10 672 0020

VALMET

Katri Hokkanen

CFO

Pekka Rouhiainen

VP, Investor Relations

DISTRIBUTION:

Nasdaq Helsinki

Major media

www.valmet.com

Valmet has a global customer base across various process industries. We are a
leading global developer and supplier of process technologies, automation, and
services for the pulp, paper, and energy industries. With our automation and
flow control solutions, we serve an even wider base of process industries. Our
more than 19,000 professionals around the world work close to our customers and
are committed to moving our customers' performance forward - every day.

The company has more than 225 years of industrial history and a strong track
record in continuous improvement, sustainability, and renewal. Valmet's net
sales in 2024 were approximately EUR 5.4 billion.

Valmet's shares are listed on the Nasdaq Helsinki, and the head office is in
Espoo, Finland.

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