Valmet Pulp & Energy Investor Day Kick-Off Meeting

Valmet Pulp & Energy Investor Day November 19, 2020 Agenda

2:00 pm Valmet`s Pulp and Energy business today Bertel Karlstedt, Business Line President, Pulp and Energy

2:05 pm Valmet`s Energy business - Long-term demand driven by the move to a carbon neutral world Presentation followed by Q&A Kai Janhunen, VP, Energy Business Unit

2:30 pm Future growth in pulp driven by favorable megatrends Presentation followed by Q&A Jussi Mäntyniemi, VP, Recovery Business Unit

2:55 pm The new normal - opportunities through digitalization and Valmet`s industrial internet Tuomas Petänen, Head of Industrial Internet, Energy segment

3:10 pm Summary of key messages Presentation slides can be found at Presentation followed by Q&A https://www.valmet.com/investors/ Bertel Karlstedt, Business Line President, Pulp and Energy reports-and-presentations/ 3:30 pm other-presentations/ Ending of the event

2 19 November 2020 © Valmet | Pulp and Energy Investor Day Q&A Please participate by asking questions!

 You can submit questions throughout the event using the question form

 Three Q&A sessions  After the Energy presentation  After the Pulp presentation  In the end of the event

 Questions are visible only to the moderator, who will address them to the presenter

3 19 November 2020 © Valmet | Pulp and Energy Investor Day INTERNAL

Valmet’s Pulp and Energy business today

Bertel Karlstedt, Business Line President Pulp and Energy at a glance

• World-class pulp mill offering and complete Orders received Net sales (EUR million) (EUR million) delivery capability 1,125 1,000 939 963 1,032 864 913 919 826 800 863 • Global technology and know-how leader in 678 biomass and multifuel based energy production • A natural growth platform for environmental systems and biomass conversion technologies 2015 2016 2017 2018 2019 LTM 2015 2016 2017 2018 2019 LTM Pulp Energy Pulp Energy • Over 1,500 pulp and energy experts serving our customers globally Net sales by area Net sales by business (last 12 months) 4% (last 12 months) • Finland 840 people 15% • Sweden 450 people 9% 38% • India 160 people 35% • China 40 people

• Denmark 30 people 62% 37% • Close cooperation with Automation and Services North America South America business lines in all projects. Including industrial Pulp Energy EMEA China internet offering and digitalization. Asia Pacific

5 19 November 2020 © Valmet | Pulp and Energy Investor Day We are committed to moving our customers’ performance forward

Bio and environmental Pulp Energy technologies • Chemical Pulp Mills • Municipalities • Marine • Dissolving Pulp Mills • Utilities • Ethanol industry • Mechanical Pulp Mills • Independent power producers • Chemical industry • Fiberboard plants • Pulp mills • Pellet producers • Process industries • Pulp and paper industry • Utilities

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6 19 November 2020 © Valmet | Pulp and Energy Investor Day

INTERNAL

Valmet’sValmet energy as business:a partner Long-termin energy demand projects driven by the

move to a carbon neutral world Sähkölaitos Tampereen / Arkkitehdit -

Kai Janhunen

Vice President, Energy business unit Illustration by BST by Illustration Contents

1 Energy business unit

2 Global market drivers

3 Order backlog

4 Key references

5 Summary

9 19 November 2020 © Valmet | Pulp and Energy Investor Day Energy business unit

Energy business unit Solution offering Customer segments

• Orders received (period 2017-2019)  Biomass to Energy plants • Industrial • 32%-52% of P&E OR  Industrial residues and Waste to Energy • Power generation • Average ~400 MEUR, ~40% of P&E OR (RDF) plants • Waste management • Personnel (Oct 30, 2020): 620  Air Emission Control technologies • Marine • White / blue collars: 481 / 139  Automation • Main locations are in Finland:  Life-cycle services • Offices in Tampere, Vantaa, Raisio – Reliability services • Production facilities in Tampere, Lapua – Performance services • R&D Center in Tampere – Performance centers • Valmet Performance Center in Tampere • Industrial Internet solutions

10 19 November 2020 © Valmet | Pulp and Energy Investor Day Global market drivers – Climate actions Japan

Resource efficiency

• Waste widely recognised as valuable resource • Increased recovery and recycling Japan's PM Yoshihide Suga: • Residual waste > Energy recovery Climate change policy of EU carbon neutrality by 2050 • Higher efficiencies

Environmental awareness China

• Carbon neutral power supply by 2050 (Power generation, Industrial)

– Coal phaseout EU Commission President – From fossil to renewables Ursula von der Leyen: • Tightening emissions legislation and stricter European Green Deal; No net emissions of directives & norms greenhouse gases by 2050 President Xi Jinping: China will be carbon neutral by 2060

11 19 November 2020 © Valmet | Pulp and Energy Investor Day Ongoing energy projects / Order backlog

EMEA

• Kilpilahti Power Plant, Finland • Zespol Elektrowni Patnow-Adamow- China Konin, Poland 145 MWth asphaltene fired CFB+AEC • Beijing Environment Sanitation Start-up 2019 Conversion to biomass fired BFB+AEC Start-up 2021 Engineering Group • Borås Energi och Miljö, Sweden 123 MWth, 2xCFB, WtoE • Göteborg Energi, Sweden 120 MW biomass BFB+AEC Start-up 2020 th 130 MW hot water plant+AEC, wood Start-up 2019 th, pellet • Shanying Zhejiang 107 MW CFB, sludge, reject • HOFOR, Denmark Start-up 2021 th, Start-up 2020 459 MWth biomass CFB • Stora Enso, Finland Start-up 2019 Flue gas scrubber • Shanying Anhui Start-up 2021 92 MWth, CFB, reject • Mondi Syktyvkar, Russia Start-up 2021 184 MW biomass BFB, ESP • Norske Skog Bruck, Austria th • Confidential customer Start-up 2019 50 MWth RDF fired BFB+AEC Start-up 2022 100 MWth, sludge, reject • Maren Maras, Turkey Start-up 2020 185 MW multifuel CFB+AEC • BS Energy, Braunschweig, Germany th, • Aituo Eco-Energy Co., Ltd, Start-up 2020 78 MWth, CFB+AEC, waste wood, Start-up 2022 Zhejiang China, 142 MWth CFB, • Greenalia, Spain reject • Tampereen Sähkölaitos, Finland 130 MWe biomass BFB Start-up 2020 Start-up 2020 191 MWth, biomass CFB+AEC Start-up 2022 • Asia Symbol (Shandong) Pulp & • Loimua, Finland Paper, Rizhao • Helen, Vuosaari, Finland 35 MWe BFB, Flue gas condenser, ESP DeNOx scrubber Flue gas condensing plant Start-up 2020 Start-up 2020 Start-up 2022 • Oulun Energia • Confidential customers, Marine • Confidential customers: several marine 194 MWth, biomass CFB+AEC scrubber projects South America Start-up 2020 scrubber projects • Weig, Germany • Arauco MAPA, Chile 49 MW BFB+AEC 160 MW biomass fired BFB th th Start-up 2020 Start-up 2021 Asia-Pacific • Kokkola Energia, Finland • Star Bracell, FGC • JFEE, Kushiro Japan 2 x biomass gasifier 112 MW multifuel CFB+AEC Start-up 2020 e Start-up 2021 Start-up 2019 • Double A Alizay, France Conversion from RB to BFB • JFEE, Onahama Japan 75 MWe multifuel CFB+AEC 163 MWth biomass start-up 2020 Start-up 2019 • JSC Ilim , Ust-Ilimsk, Russia • PT Cikarang Listrindo, Indonesia Biomass fuel feeding system 2x72 MWth, biomass BFB Start-up 2021 Start-up 2020

12 19 November 2020 © Valmet | Pulp and Energy Investor Day

Key references 2020

Photo by customer Photoby

Photo by customer Photoby Photo by customer Photoby TKS Naistenlahti 3, Tampere, Finland Norske Skog, Bruck, Austria Zespół Elektrowni, Konin, Poland Helen, Vuosaari plant, Finland

Energy turnaround towards Coal phaseout, reduce carbon Coal phaseout, the first Polish Reduce carbon footprint renewables footprint as part of green city that is heated with energy diversification initiative originating exclusively from renewable sources Valmet scope: Valmet scope: Valmet scope: Valmet scope:  Valmet CFB boiler plant: • Valmet BFB boiler plant  Conversion of a lignite-fired • Valmet Flue Gas Condensing extends from the boiler silos to • Valmet Flue Gas Cleaning boiler into a biomass- Plant: increases district heat the existing Valmet Flue Gas • Valmet DNA Automation fired Valmet BFB Boiler production by an additional Heat Recovery System System  Valmet Selective Non- 69 MW  Valmet Bag House Filter • Valmet Industrial Internet catalytic Reduction Solution • Value: The value of these  Value: EUR ~70 million • Value: EUR ~40 million (SNCR) types of orders is  Value: EUR ~20 million EUR ~20–30 million

13 19 November 2020 © Valmet | Pulp and Energy Investor Day Summary

Valmet in Energy - Reliable technology partner in changing energy markets

• Resource efficient, flexible and clean solutions for energy and industrial customers  Global trends and changing energy markets drive renewal and adaptation  Our project portfolio shows global market coverage and strong offering (technology, automation, services)  Innovative solutions created in collaboration with our customers  Our solutions enable our customers’ initiatives for energy turnaround

14 19 November 2020 © Valmet | Pulp and Energy Investor Day

Q&A Energy

Submit questions using the question form

Questions are visible only to the moderator, who will address them to the presenter INTERNAL

Future growth in pulp - driven by favorable megatrends

Jussi Mäntyniemi Vice President, Recovery business unit Contents

1 Our offering for pulp production

2 Project execution in a pulp mill project

3 Megatrends and pulp market

4 Future possibilities

5 Summary

18 19 November 2020 © Valmet | Pulp and Energy Investor Day Valmet has leading technology for all pulp mill islands and processes

Woodhandling Cooking and fiberline Pulp drying

Evaporation Recovery boiler White liquor plant

Heat and power production Air emission control Process controls and simulators

19 19 November 2020 © Valmet | Pulp and Energy Investor Day Our unified project execution model ensures successful project delivery Project length depends on the scope and size of the project, typically 1-3 years

Sales Project delivery Service

Construction and Commissioning Performance Establishment Engineering Procurement Production Logistics Warranty installation and start-up testing

Right things done Risks managed and On-time delivery at the right time quality ensured and fast start-up

20 19 November 2020 © Valmet | Pulp and Energy Investor Day INTERNAL

Example: Mondi Steti New recovery boiler to an existing mill

14-month site works in 14 seconds Global megatrends impact also pulp production

Resource efficient and clean Digitalization and new technologies Urban, responsible and global world consumers

Climate change, environmental Digitalization, automatization and new Urbanization, increasing living awareness and resource scarcity high impact technologies drive standards, changing demographics, drive the need to improve resource efficiency and new business models. and globalization drive changes in efficiency and reduce emissions. consumer behavior.

Implications to pulp production Implications to pulp production Implications to pulp production  Need for best available  Asset optimization and drive for  Increasing demand for fiber- technologies and advanced air autonomous mills based products e.g. tissue and emission control packaging

22 19 November 2020 © Valmet | Pulp and Energy Investor Day Paper demand and fiber consumption by grade 2017-2030

Long-term Paper Demand Growth by Product Area 2017-2030 Papermaking Fibre Consumption by Grade 2017-2030

23 19 November 2020 © Valmet | Pulp and Energy Investor Day Source: Pöyry Management Consulting World Fibre Outlook 2018 Chemical pulp capacity by area and announced large projects

21 18

35 22 Avg. tech. 45 36 8 age EMEA 18 Avg. tech. 7 age China Avg. tech. age NA

11 29 27 16 32 6 AP Avg. tech. Avg. tech. age SA Capacity, million tonnes per annum age Market pulp Ongoing projects (over 0.5 Mt/a) Integrated pulp Announced projects (over 0.5 Mt/a)

24 19 November 2020 © Valmet | Pulp and Energy Investor Day Projects officially announced. Source: FisherSolve Next Drivers and future possibilities

Improved safety and New value-adding Cost and production Product environmental products and efficiency differentiation performance platforms for growth

25 19 November 2020 © Valmet | Pulp and Energy Investor Day New value adding processes – integrated to pulp mills

Sulfuric acid plant Biomass gasifier

• Integrated sulfuric • Bark, sawdust and acid production of forest residue mill’s NCG gasified to produce (odorous gases) biogas for e.g. lime-kiln

LignoBoost Sugar extraction

• Lignin extraction • Extraction of from black liquor to hemicellulose produce biobased sugars to produce chemicals and biobased materials chemicals

26 19 November 2020 © Valmet | Pulp and Energy Investor Day Unrivalled combination of technology, services and automation for pulp customers

Chemical pulp mills Additional technologies • Complete mills and technology islands • Mechanical pulping - Wood handling • Heat and power boilers - Cooking and fiber line • CFB gasification - Recovery • Lignin extraction – LignoBoost - Drying and baling Process • Sulfuric acid production - Air emission control technology • Biomass prehydrolysis

Services • Spare and process parts Customer Automation • Workshop and roll services • Distributed Control Systems (DCS) • Fabrics • Industrial applications • Maintenance development • Quality management & outsourcing • Analyzers and measurements • Field services • Industrial Internet solutions • Process upgrades • Automation Services • Industrial Internet solutions Services Automation

27 19 November 2020 © Valmet | Pulp and Energy Investor Day

Q&A Pulp

Submit questions using the question form

Questions are visible only to the moderator, who will address them to the presenter INTERNAL

The new normal - opportunities through digitalization and Valmet’s industrial internet

Tuomas Petänen Head of Energy Segment, Industrial Internet Profitability can be improved with real-time data and analytics Energy

● Is your plant running in optimal capacity right Revenue: Maximize now? • Electricity revenue • Heat ● What are the upcoming risks for production downtime?

Costs: ● Is the fuel economy on an optimal level? Minimize • Fuels costs • Emissions ● Own electricity consumption? • Additives • Maintenance ● Consumption of additives?

Profit

Every minute counts in plant profitability

31 19 November 2020 © Valmet | Pulp and Energy Investor Day Profitability can be improved with real-time data and analytics Pulp

● Does your mill have capacity limitations right now? Revenue: Maximize • Pulp production revenue ● What are the upcoming risks for production • Other streams downtime?

● Is performance for each process area optimized? Costs: Minimize • Raw material costs ● Own electricity consumption? • Chemicals • Electricity • Maintenance ● Consumption of steam and chemicals?

Profit

Every minute counts in mill profitability

 Move our customers’ performance forward - Improved operation and maintenance Process  New insight with real-time process data technology - Deep insight on performance of our deliveries  Digitalization improves our competitiveness - Performance optimization - Asset reliability  Improved efficiency of our services - Remote start-up support

Service Automation

Demo

Valmet Industrial Internet Demo

Industrial Internet applications Valmet Performance Center Valmet Customer Portal

Contact experts • Solve problems • Benchmark performance • Build capabilities • Innovate together From analytical applications for reliability and Provides remote support, monitoring and data A digital, personalized collaboration space performance to Advanced Process Controls, analysis and access to Valmet’s expert network between you and Valmet information management and process simulators

Intelligent machines and automation Solution ecosystem

Brings leading industry players and innovative A solid data source for Industrial Internet solutions start-ups together to co-create new value-adding data driven services

37 19 November 2020 © Valmet | Pulp and Energy Investor Day Opportunities through digitalization and Valmet’s Industrial Internet

Fleet performance CO2 Emissions 100% Year to date 8 900 tons/MWe 50%

1 1 1 1 1 1

Process Process Process Process Process Process

Predictive maintenance Autonomous mills Fleet management Corporation level transparency Opportunity Opportunity Opportunity Opportunity Improve plant availability and - Optimization of entire Continuous benchmarking of Real time follow-up of critical manage production limitations production processes performance in similar performance parameters and by predicting upcoming - Reduced manual work processes enables targets on plant level and failures - Fast recognition of failures corporation level - Insight to improvement opportunities

INTERNAL

Summary of key messages

Bertel Karlstedt, Business Line President Pulp and Energy key messages

Pulp and Energy in good position Industrial Internet and digitalization

 Good order backlog for the coming years  Combination of technology, automation and services knowhow  Global technology and know-how leader  Solution offering meeting customer  A natural growth platform for environmental demands systems and biomass conversion technologies  Sustainable way to operate, share knowledge and utilize our experts globally

Global opportunities in pulp business Sustainability driving energy business  Global demand for tissue and packaging is  Emission reduction targets and EU Green supporting pulp production growth Deal impact national policies  Performance and sustainability strong  Resource efficiency and clean solutions drivers in pulp production driving forces for customer investments  Valmet has the full scope offering  Europe remains our main market with growth opportunities in Asia

Q&A

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