Valmet Oyj — Earnings Release 2020

Feb 4, 2021

Valmet’s Financial Statements Review January 1 – December 31, 2020: Net sales amounted to EUR 3,740 million and Comparable EBITA increased to EUR 365 million in 2020

Valmet’s Financial Statements Review January 1 – December 31, 2020: Net sales amounted to EUR 3,740 million and Comparable EBITA increased to EUR 365 million in 2020

Valmet’s Financial Statements Review January 1 – December 31, 2020: Net sales
amounted to EUR 3,740 million and Comparable EBITA increased to EUR 365 million
in 2020

Valmet Oyj’s stock exchange release on February 4, 2021 at 1:00 p.m. EET

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

October–December 2020: Orders received decreased and Comparable EBITA increased

· Orders received decreased 7 percent to EUR 940 million (EUR 1,009 million).

· Orders received increased in the Paper business line, remained at the
previous year's level in the Automation business line, and decreased in the
Services, and Pulp and Energy business lines.
· Orders received increased in China and Asia-Pacific, and decreased in South
America, EMEA (Europe, Middle East and Africa) and North America.

· Net sales increased 6 percent to EUR 1,167 million (EUR 1,103 million).

· Net sales increased in the Paper business line, remained at the previous
year's level in the Services, and Automation business lines, and decreased in
the Pulp and Energy business line.

· Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 146 million (EUR 118 million), and the corresponding Comparable
EBITA margin was 12.5 percent (10.7%).
· Comparable EBITA increased due to higher net sales and lower selling,
general and administration (SG&A) expenses.

· Earnings per share were EUR 0.67 (EUR 0.54).
· Items affecting comparability amounted to EUR 0 million (EUR 1 million).
· Cash flow provided by operating activities was EUR 114 million (EUR 182
million).

January–December 2020: Comparable EBITA increased

· Orders received decreased 8 percent to EUR 3,653 million (EUR 3,986
million).

· Orders received remained at the previous year's level in the Paper business
line, and decreased in the Pulp and Energy, Services, and Automation business
lines.
· Orders received increased in China and decreased in South America, North
America, Asia-Pacific and EMEA.

· Net sales amounted to EUR 3,740 million (EUR 3,547 million).

· Net sales increased in the Paper, and Pulp and Energy business lines, and
remained at the previous year's level in the Automation and Services business
lines.

· Comparable earnings before interest, taxes and amortization (Comparable
EBITA) were EUR 365 million (EUR 316 million), and the corresponding Comparable
EBITA margin was 9.8 percent (8.9%).

· Comparable EBITA increased due to higher net sales and lower SG&A expenses.

· Earnings per share were EUR 1.54 (EUR 1.35).
· Items affecting comparability amounted to EUR -10 million (EUR -1 million).
· Cash flow provided by operating activities was EUR 532 million (EUR 295
million).

Dividend proposal

The Board of Directors proposes for the Annual General Meeting that a dividend
of EUR 0.90 per share be paid. The proposed dividend equals to 58 percent of the
net result.

Guidance for 2021

Valmet estimates that net sales in 2021 will remain at the previous year’s level
in comparison with 2020 (EUR 3,740 million) and Comparable EBITA in 2021 will
remain at the previous year’s level in comparison with 2020 (EUR 365 million).

Short-term market outlook

Valmet estimates that the short-term market outlook in automation has improved
to good (previously good/satisfactory), the short-term market outlook in tissue
has improved to good (previously satisfactory), and the short-term market
outlook in energy has decreased to weak (previously satisfactory). Valmet
reiterates the good short-term market outlook for pulp, and board and paper, and
the satisfactory/weak short-term market outlook for services.

President and CEO Pasi Laine: Comparable EBITA increased for the seventh
consecutive year

"Valmet’s orders received amounted to EUR 3.65 billion in 2020. Orders received
remained at the previous year’s level of over EUR 1 billion in Paper, and
decreased in the Pulp and Energy and Services business lines. Automation orders
received, including package sales to capital projects, remained at the previous
year's level. While the COVID-19 related travel restrictions and lower capacity
utilization in graphical paper mills had a negative impact on Services order
intake, the pandemic did not cause major impacts on Valmet’s capital business.
In 2020, the market activity was especially strong in China, where 2020 was a
record year for Valmet.

Our net sales amounted to EUR 3.74 billion in 2020. Net sales increased in the
capital business and remained at previous year’s level in the stable business.
Comparable EBITA increased 16 percent to EUR 365 million. This represents 9.8
percent of net sales, close to our new target range of 10–12 percent. Our whole
organization performed well during this exceptional year and found new ways to
operate. Many new digital tools and solutions to do business and serve our
customers were introduced, and they can be utilized to improve Valmet's and
customers' processes also after the pandemic.

In recent years, Valmet has followed its acquisition strategy of making well
-considered acquisitions with a clear industrial logic. In 2020, Valmet
strengthened its board and tissue technology offering by acquiring PMP Group in
Poland. The former PMP’s offering of small and medium-sized tissue machines and
board and paper machine rebuilds complements Valmet’s offering for wide and fast
machines and rebuilds. In June 2020, Valmet acquired a 14.9 percent ownership in
Neles and gradually increased its ownership to 29.5 percent of the company. The
potential merger of Valmet and Neles would create a Nordic-based global leader
with a unique offering for global process industries and with excellent
potential for long-term shareholder value creation.

Valmet's business is supported by favorable megatrends, we have a solid order
backlog and have been able to improve our profitability every year since the
demerger at the end of 2013. Valmet is starting the year 2021 from a good
position."

Key figures[1]

[][][][]
EUR million Q4/2020 Q4/201 Change 2020 2019 Change
9
Orders received 940  1,009 -7  % 3,653  3,986 -8  %
Order backlog[2] 3,257  3,333 -2  % 3,257  3,333 -2  %
Net sales 1,167  1,103 6  % 3,740  3,547 5  %
Comparable 146  118 24  % 365  316 16  %
earnings before
interest,
taxes and
amortization
(Comparable
EBITA)
% of net sales 12.5  % 10.7  % 9.8  % 8.9  %
Earnings before 147  119 23  % 355  315 13  %
interest, taxes
and
amortization
(EBITA)
% of net sales 12.6  % 10.8  % 9.5  % 8.9  %
Operating profit 135  110 23  % 319  281 13  %
(EBIT)
% of net sales 11.6  % 9.9  % 8.5  % 7.9  %
Profit before 133  105 26  % 307  269 14  %
taxes
Profit for the 100  81 24  % 231  202 15  %
period
Earnings per 0.67  0.54 24  % 1.54  1.35 15  %
share, EUR
Earnings per 0.67  0.54 24  % 1.54  1.35 15  %
share, diluted,
EUR
Equity per share, 7.60  6.95 9  % 7.60  6.95 9  %
EUR[2 ]
Cash flow provided 114  182 -37  % 532  295 81  %
by operating
activities
Cash flow after 40  161 -75  % -60  58
investments
Return on equity 21  % 20  %
(ROE) (annualized)
Return on capital 22  % 23  %
employed (ROCE)
before taxes
(annualized)
Equity to assets 39  % 41  %
ratio[2]
Gearing[2] 13  % -9  %

1. The calculation of key figures is presented on page 49.
2. At end of period.

Orders Q4/2020 Q4/2019 Change 2020 2019 Change
received, EUR
million
Services 342  395  -13  % 1,356  1,459  -7  %
Automation 96  96  1  % 334  359  -7  %
Pulp and 291  320  -9  % 934  1,125  -17  %
Energy
Paper 211  199  6  % 1,029  1,043  -1  %
Total 940  1,009  -7  % 3,653  3,986  -8  %

Order As at As at Change As at
backlog, EUR Dec 31,2020 Dec 31,2019 Sep 30,2020
million
Total 3,257  3,333  -2  % 3,311

Net sales, EUR million Q4/2020 Q4/2019 Change 2020 2019 Change
Services 402  400  0  % 1,327  1,374  -3  %
Automation 117  120  -3  % 335  341  -2  %
Pulp and Energy 286  315  -9  % 1,003  919  9  %
Paper 362  267  36  % 1,076  913  18  %
Total 1,167  1,103  6  % 3,740  3,547  5  %

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/2020-q4 on Thursday, February 4, 2021 at 2:00 p.m.
Finnish time (EET). President and CEO Pasi Laine and CFO Kari Saarinen will be
presenting the results.

Recording of the webcast will be available shortly after the event at the same
address.

It is 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

United Kingdom +44 3333000804
France +33 170750711
Germany +49 6913803430
Norway +47 23500243
Sweden +46 856642651
United States +1 6319131422

The participants will be asked to provide the following conference PIN:
86044798#. All questions should be presented in English.

The event can also be followed on Twitter at www.twitter.com/valmetir.

Due to COVID-19 pandemic, the news conference cannot be attended in person.

Further information, please contact:

Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
Kari Saarinen, CFO, Valmet, tel. +358 50 317 1830

VALMET

Kari Saarinen
CFO

Pekka Rouhiainen
Director, 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 2020 were approximately EUR 3.7 billion. Our 14,000
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.

Read more www.valmet.com, www.twitter.com/valmetglobal

Follow Valmet IR on Twitter www.twitter.com/valmetir

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