Valmet (VALMT) Q2 2024 earnings summary

Executive summary

• Orders received in Q2 2024 remained stable year-over-year at around EUR 1.3 billion, with net sales also at EUR 1.3 billion but down 7% year-over-year; order backlog decreased to EUR 3.8 billion.

• Comparable EBITA decreased to EUR 141 million (margin 10.6%), impacted by lower sales volume and integration costs.

• EPS dropped to EUR 0.31 from EUR 0.54, mainly due to lower operating profit and higher net financial expenses.

• Gearing increased to 45%, and net debt to EBITDA ratio rose to 1.63.

• CEO transition: Thomas Hinnerskov to start as President and CEO in August 2024.

Financial highlights

• Q2 2024 net sales: EUR 1,324 million, down 7% year-over-year; comparable EBITA: EUR 141 million, down 8%.

• Adjusted EPS for Q2: EUR 0.43, down 28% year-over-year; reported EPS: EUR 0.31, down 42%.

• Cash flow from operations in Q2: EUR 128 million; net working capital at EUR 150 million.

• H1 2024 order intake: EUR 2,333 million, down 17% year-over-year; H1 net sales: EUR 2,536 million, down 7%.

• Order backlog at end of June: EUR 3,828 million, down 13% year-over-year.

Outlook and guidance

• Net sales for 2024 expected to remain at previous year's level (EUR 5,532 million); comparable EBITA forecasted to increase versus 2023 (EUR 619 million).

• Market outlook upgraded to satisfactory for board, paper, and pulp; services and automation remain strong.

• Improved market activity and shorter delivery times support positive guidance for H2.