Valmet's New Strategic Outlook
Valmet has announced a transformative strategy titled 'Lead the Way', which reflects the company's deep-seated commitment to enhancing its financial performance and adapting to industry changes. This strategic announcement comes as Valmet prepares to showcase its initiatives at the upcoming Capital Markets Day. The company aims to sustainably grow and innovate while maintaining robust relationships with its customers and stakeholders.
Chairman's Vision for Growth
According to Valmet's President and CEO, Thomas Hinnerskov, the past months spent interacting with customers, employees, and investors have underscored the importance of Valmet's rich legacy and the critical need for change. He highlighted that unlocking Valmet's potential calls for a cultural shift that emphasizes high performance, enhanced accountability, and creative value creation.
Core Fundamentals of the New Strategy
The 'Lead the Way' strategy is centered around four fundamental pillars that will guide Valmet's operations:
- Customer Success - Fostering deep relationships with clients to drive mutual growth.
- Lifecycle Commitment - Offering long-term support and engagement with products and services.
- Global Competitiveness - Enhancing the company's stature in the global market.
- Accountability - Ensuring clarity of roles and responsibility within the organization.
This strategic approach aims to create a high-performance culture that not only accelerates growth but also enhances value creation across all areas of the business.
Enhanced Financial Objectives for 2030
Valmet has set ambitious financial targets aimed at positioning itself for significant growth by 2030. The newly defined targets include:
- Achieving organic net sales growth of 5% CAGR over the business cycle.
- Attaining a comparable EBITA margin of 15%, up from the previous 12-14%.
- Establishing a comparable return on capital employed before taxes (ROCE) of 20%, which is an increase from the prior minimum of 15%.
- Setting a gearing ratio of below 50% as a new strategic target.
These targets emphasize Valmet's commitment to maintaining strong capital allocation and supporting long-term value generation.
Segment-Specific Strategic Focus
Valmet has identified two key segments within its operations, each with its unique strategic missions aimed at fostering growth and efficiency:
Biomaterial Solutions and Services
This segment encompasses business areas such as Pulp, Energy and Circularity; Packaging and Paper; and Tissue. Its strategic mission revolves around advancing circularity with the following priorities:
- Implementing a seamless lifecycle approach to enhance service and technology.
- Driving continuous innovation together with customers toward circular practices.
- Pursuing relentless product cost competitiveness.
The organization anticipates achieving a 14% Comparable EBITA margin by 2030, doubling its growth in biomaterial services to reach 8%.
Process Performance Solutions
Focuses on Automation Solutions and Flow Control, aiming to unlock resource efficiency. Strategic priorities include:
- Enhancing customer experience and lifecycle value.
- Fostering innovation and expanding the strategic portfolio tailored to customer needs.
- Expanding capabilities in high-quality technology and digital solutions for mission-critical operations.
This segment targets to exceed the market growth rate and achieve a 20% Comparable EBITA margin by 2030.
Overview of Guidance and Future Expectations
Valmet has maintained its guidance for net sales in 2025, expecting it to remain consistent with the previous year's performance. The anticipated sales are projected at approximately EUR 5,359 million, with comparable EBITA expected to match last year's figure.
Invitation to the Capital Markets Day
On the 5th, Valmet will host its Capital Markets Day to reveal further details about its strategy and answer questions from stakeholders. The presentation will be accessible through a live webcast, and materials will be made available for public viewing afterward.
Contact Information
For more information about the upcoming Capital Markets Day, inquiries can be directed to Pekka Rouhiainen, VP of Investor Relations at Valmet, or Antti Ylitalo, Director of External Communications.
About Valmet
Valmet is a leading global provider of process technologies, automation, and services for the pulp, paper, and energy sectors. With over two centuries of industrial history, the company is dedicated to fostering innovation and continuous improvement. With more than 19,000 employees globally, Valmet is committed to enhancing customer performance on a daily basis, generating substantial economic output while focusing on sustainability.
Frequently Asked Questions
What is Valmet's new strategy called?
The new strategy is called 'Lead the Way'.
What are the key areas of focus in the new strategy?
The key areas include customer success, lifecycle commitment, global competitiveness, and accountability.
What are Valmet's financial targets for 2030?
Targets include a 5% CAGR in organic net sales, a 15% EBITA margin, a 20% ROCE, and a gearing below 50%.
What segments does Valmet operate in?
Valmet operates in two segments: Biomaterial Solutions and Services, and Process Performance Solutions.
When is the Capital Markets Day event scheduled?
The Capital Markets Day is scheduled for June 5, 2025, and will be available via a live webcast.
