Automation – Taking Customers' Performance Forward

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Automation – Taking Customers' Performance Forward Automation – taking customers’ performance forward Tampere site visit November 26, 2015 Sakari Ruotsalainen, Business Line President, Automation History of Automation in Tampere 1920’s An aircraft repair 1936 1944 1968 Workshop Division is opened in Tampere Measurement and control instruments Valmet Oy Instrument founded in for the process industry begin to develop Works established in Helsinki to repair Rantaperkiö aircraft instrumentation 1940’s 1953 The first black box ”Mata Hari” invented Precision mechanics division established, and produced in the State aircraft factory introduction of pneumatic measurement and in Tampere control system 2 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation History of Automation in Tampere 1980’s 2000’s Damatic, the first Distributed Control IQInsight IQProfilers (IQSteam Pro) 2015 1960 System (DCS) The Airmatic, a IQCaliper-L Metso Process Automation PaperIQ Plus Systems to Valmet pneumatic Acquisition of Sentrol Systems (QCS) Multivariable Model Predictive measurement and Controls (MPC) Valmet DNA control system Damatic XD, modular second generation metsoDNA CR DCS 24/7 ProCenter for DCS 24/7 ProCenter for QCS PaperIQ Select IQCaliper-L IQFiber 2015 Valmet IQ 2010’s 1990’s Metso PQV, web inspection system PaperIQ, QualityControl System (QCS) Metso DNA 1970 Metso IQ Elmatic-100 Metso Incorporated (the merger of Valmet Metso IQ for corrugators system, electronic Automation Inc. and Neles Controls) Metso condition analysis services instrumentation Vapo, peat and water monitoring service metsoDNA, Dynamic Network of Applications 3 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Valmet today at Lentokentänkatu Automation • R&D • Project operations >480 • Sales and Services employees • Management and support functions Pulp & Energy • Product and technology >540 • Delivery operations employees • Management and support functions 4 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Automation business line Contents 1 Automation is a strong business with great positions 2 Automation market drivers 3 We take our Customers’ performance forward 4 Strategy implementation through Must-Wins 5 Summary Automation is a strong business with great positions Automation business line overview Extensive range of process Global network of expertise Strong R&D investments automation and information close to our Customers across the automation management solutions to offering take our customers’ business performance forward Global market leader 2014 figures with #1 market position in pulp and paper Net sales EUR 297 million Orders received EUR 336 million Industry-leading product portfolio Employees 1,600 Comprehensive services Niche leader in Bio and Waste-to-Energy power plant automation 7 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Automation business line overview Net sales (2014) 9% 9% 19% 33% ~45 % 7% ~55 % 67% 56% North America South America EMEA Services business China Pulp & Paper Capital business Asia-Pacific Energy & Process 8 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Orders received in Automation totaled EUR 78 million in Q3/2015 Orders received1 (EUR million) Net sales (EUR million) 160 160 140 140 120 95 120 100 100 79 10 78 72 80 62 80 8 55 11 6 60 60 40 85 40 70 68 66 20 20 0 0 Q1/15 Q2/15 Q3/15 Q1/15 Q2/15 Q3/15 Orders received, internal (from other business lines) Net sales, internal (from other business lines) Orders received, reported Net sales, reported Orders received, total (including internal) Net sales, total (including internal) • Orders received EUR 78 million in Q3/2015 - Internal orders received amounted to EUR 8 million - EMEA accounted for ~50% and North America for ~30% of orders received - Pulp and Paper accounted for ~70% and Energy and Process for ~30% of orders received • Net sales EUR 72 million in Q3/2015 - Internal net sales amounted to EUR 6 million 1) Q1/2015 orders received is calculated from Metso’s reported figures and pro forma figures excluding Process Automation Systems and are therefore indicative only. Q2/2015 and Q3/2015 figures are Automation business line figures. 9 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Customer base Pulp Paper Energy Process & Marine 90% of business directly with Customers Valmet is a registered trademark of Valmet Corporation. Other trademarks appearing here are trademarks of their respective owners. 10 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Automation has a history of modest growth but high and resilient profitability Modest growth in net sales High and resilient profitability Relative stable margins during the last 10 years, EBITA margin 10– 12% Strong service business, based on large installed base and captive business model Net sales High-level technology and know- ~2% how business with high barriers to CAGR entry 2006 2014 Since 2006, Automation’s EBITA margin has exceeded 10% every year but two 11 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Automation’s service business has grown steadily Indexed: (2006 = 100) 160 Valmet’s installed base grows constantly 140 120 100 Customers have less own maintenance 80 resources 60 Customers need to 40 take process quality and performance 20 forward 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 12 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Automation serves it’s customers across plant life cycle Process plant life cycle Process Up to 30 years plant Design, construct and Operate, maintain and Refurbish and commission optimize reconfigure • Initial process • Process availability • Change processes and investments • Process performance technology 1 Automation Projects Services Projects • new mills, plants and • Performance services • Major system business production lines • Agreement services reconfigurations • Field services • Automation rebuilds • Spare parts & factory maintenance 20% Projects of net sales • Augment automation level • Automation renewal 1) Considered as new installed base projects in this illustration 80% of net sales 13 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Our automation offering Pulp and paper Energy Process Marine Advanced automation and process monitoring solutions and services: Distributed Control System (DCS) – Industrial internet solutions Valmet DNA Automation services Performance solutions Process simulators Quality Control System (QCS) Safety systems and solutions Profilers Analyzers and measurements Industry’s widest offering in pulp & paper Valmet DNA DCS delivered to other industries as well 14 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Proven performance Valmet has delivered more than 4,500 automation systems 40,000 analyzers and measurements Over 1,000 power plants worldwide utilize Valmet’s process automation Valmet is #1 in QCS, analyzers and measurements #1 in pulp performance optimization using advanced controls. #2 in pulp & paper control systems Niche leader in Bio and Waste-to-Energy power plant automation 15 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Customer results in pulp and paper markets 2010–2014 More than 60 new tissue and board lines automated More than 600 new QCS and Profiler system deliveries More than 200 QCS and Profilers competitor system replacements More than 100 competitor DCS/PLC replacements Market leader in analyzers 16 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation 1,000 power plants worldwide utilize Valmet’s process automation North America EMEA >110 Asia-Pacific and China >370 >500 Power plant installed base Includes Valmet’s systems delivered by partners 17 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation Automation market drivers Market drivers and opportunities Anticipated long-term market growth Estimated market size for the current Pulp & Paper Energy, Process and Marine offering (EUR) Valmet’s market ~1% 1.0 ~20% ~2% 1.0 ~10% share p.a. bn p.a. bn Market • World trade, e-commerce and emerging • Urbanization and growing middle class drivers markets growth especially in emerging markets • Rise in purchasing power and living • Growing share of renewable energy standards generation in the energy mix • Ageing production assets Competitors • ABB, Honeywell, BTG • ABB, Emerson, Siemens, Yokogawa Implications forAutomation’s Valmet • Short term opportunities • Softness in short term opportunities, short-term - Very large ageing competitor installed especially in new power generation opportunities base of systems projects - Valmet synergies in new mills and - Power plant retrofit market active lines as well as rebuilds - Healthy services demand • Marine: cruise market active • Healthy services demand 19 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line President, Automation We take our Customers’ performance forward We take our Customers’ performance forward 1 Expertise close to our Customers Business model with flexibility and 2 intimacy 3 Continuous innovation & renewal Combining process technology, 4 automation and services Industrial internet delivered – 5 every day 21 November 26, 2015 © Valmet | Sakari Ruotsalainen, Business Line
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