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Valmet's Q1 2025 Performance Review

Valmet Oyj, a leading global developer and supplier of process technologies, automation, and services particularly for the pulp, paper, and energy industries, has released its interim review for the first quarter of 2025, showcasing a strong start to the year with notable progress particularly in the Services and Automation segments.

From January to March 2025, Valmet experienced a remarkable growth in orders received, totaling EUR 1,332 million, marking a 27% increase compared to EUR 1,050 million in the same period the previous year. This demand was observed across all three segments, particularly in North America, Asia-Pacific, and China, where orders saw significant upticks. Notably, the Automation segment showed organic growth of 12%, widely credited to a strategic focus on enhancing customer value through advanced technological solutions.

Financial Highlights

• - Net Sales: Valmet's net sales remained stable at EUR 1,184 million, albeit a slight decrease from EUR 1,212 million year-on-year. This stability is attributed to contrasting developments in business segments; while Automation and Services posted gains, the Process Technologies segment faced challenges hindering growth.
• - Comparable EBITA: The comparable EBITA for the company remained steady at EUR 121 million, with EBITA margin slightly improving to 10.2% from 10.0% the previous year. This stability in earnings reflects positive performance in the Services and Automation segments, which managed to increase their respective profitability, with Services achieving an impressive Q1 margin of 17.6%—the best in its history.
• - Earnings per Share (EPS): Valmet reported an EPS of EUR 0.33, marking an increase from EUR 0.30 in the previous year. The adjusted EPS also remained stable at EUR 0.41, demonstrating resilience amid varying market dynamics.
• - Cash Flow: Cash flow from operating activities saw a significant surge, totaling EUR 217 million, up from EUR 138 million in Q1 2024, enabling the company to invest in future growth.

Strategic Developments

Valmet’s CEO Thomas Hinnerskov underscored the importance of their strategic renewal, stating that ongoing changes within the operational model aim to enhance customer service through a lifecycle approach while increasing efficiency and accountability within the organization. The firm plans to transition towards five new strong business areas: Automation Solutions, Flow Control, Pulp, Energy and Circularity, Packaging and Paper, and Tissue while also establishing a Global Supply unit to further optimize procurement and production.

This transition is expected to streamline decision-making processes, promote responsibilities clarity, and enhance overall cost competitiveness. Valmet anticipates a potential global reduction of up to 1,150 white-collar positions, aiming for an annual cost saving target of around EUR 80 million, which should fully materialize by early 2026.

Despite some fluctuations in the Process Technologies segment, where customer activity has shown signs of subdued performance, Valmet remains poised to navigate the current market terrain effectively. The company is vigilantly monitoring the effects of international trade tariffs and is implementing proactive measures to safeguard its supply chain from potential disruptions.

Looking Ahead

Valmet's outlook for 2025 remains unchanged, forecasting that net sales will match the previous year's figures and expecting comparable EBITA to sustain at a similar level. With confidence in ongoing operational refinements and a focused strategy, Valmet is set to enhance its market position and ensure sustainable growth.

The upcoming Capital Markets Day on June 5 will offer deeper insights into Valmet's strategic direction and future objectives, particularly in how they intend to align growth initiatives with shareholding value maximization. Stakeholders are encouraged to stay connected for updates on these initiatives as Valmet strives to maintain its place as a leader in providing process technologies and automation solutions across various industries.

Overall, Valmet's first-quarter performance illustrates the company's strategic agility and commitment to creating long-term value for its customers and shareholders alike, reinforcing its status as a cornerstone in the global process industries landscape.