Valmet's Financial Statements Review 2017

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Orders received amounted to EUR 3.3 billion and Comparable EBITA to EUR 226 million in 2017 Financial Statements Review 2017 February 6, 2018

Pasi Laine, President and CEO Kari Saarinen, CFO Agenda Financial Statements Review 2017

1 2017 in brief

2 Development of business lines

3 Financial development

4 Dividend proposal, guidance and short-term market outlook

5 Summary of Financial Statements Review 2017

6 Appendix

2 February 6, 2018 © Valmet | Financial Statements Review 2017 2017 in brief 2017 in brief

Orders received increased to EUR 1,609 million in stable business1

Orders received remained at the previous year’s level at EUR 1,713 million in capital business2

Net sales increased to EUR 3,159 million

Order backlog remained at the previous year’s level at EUR 2.3 billion

Comparable EBITA increased to EUR 226 million (margin 7.2%)

Gearing was -11%

1) Stable business = Services business line and Automation business line. For Automation, this figure includes internal orders received from other business lines. 2) Capital business = Pulp and Energy business line and Paper business line

4 February 6, 2018 © Valmet | Financial Statements Review 2017 Valmet in 2017

Orders received by Orders received by Orders received business line area EUR 3,272 million 10% 21% 38% Net sales 32% EUR 3,159 million 17% 6% Comparable EBITA EUR 226 million

Comparable EBITA 10% margin 21% 46% 7.2% Services North America Employees Automation South America Pulp and Energy EMEA 12,268 Paper China Asia-Pacific

5 February 6, 2018 © Valmet | Financial Statements Review 2017 Valmet’s development

Orders received Net sales Comparable EBITA Comp. EBITA margin (EUR million)1 (EUR million)1 (EUR million)1 (%)1

3,272 3,071 3,139 3,159 2,878 2,928 2,926 2,613 2,473 1,713 2,182 1,658 1,684 1,473 2,016 1,537 1,572 1,581 1,484 226 1,147 7.2% 196 6.7% 182 6.2%

4.3% 1,558 106 1,341 1,481 1,357 1,453 1,474 1,035 1,055 1,032 989 54 2.1%

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Pulp and Energy, and Paper business lines Pulp and Energy, and Paper business lines Comparable EBITA Comparable EBITA margin Services and Automation business lines Services and Automation business lines

1) 2013 figures on carve-out basis

6 February 6, 2018 © Valmet | Financial Statements Review 2017 Orders received increased to EUR 3,272 million in 2017

Orders received (EUR million) Orders received in 2017 by area

1,400 3,500 Asia-Pacific North 10% America 1,200 3,000 21% 1,000 2,500 China 800 2,000 17% South 600 1,500 America 1,101 6% 1,023 1,005 400 793 803 788 857 796 1,000 781 725 692 743 727 580 200 466 480 500

0 0

EMEA

Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/14 46% Orders received (LHS) Last 4 quarters (RHS)

• In stable business, orders received increased to EUR 1.6 billion in 2017 • In capital business, orders received remained at the previous year’s level at EUR 1.7 billion in 2017 • EMEA and North America accounted for 67% of orders received in 2017

7 February 6, 2018 © Valmet | Financial Statements Review 2017 Stable business orders received amounted to EUR 1,609 million in 2017

Orders received (EUR million) in stable business1

600 1,800

500 1,500 443 424 402 394 409 372 383 400 342 344 88 359 1,200 330 88 103 293 95 81 267 273 273 87 75 101 300 242 78 75 80 900

200 600 355 307 313 321 321 267 273 273 293 252 267 264 284 284 282 100 242 300

0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

Services (LHS) Automation, total (including internal) (LHS) Last 4 quarters (RHS)

• Orders received in stable business increased by EUR 90 million in 2017

1) Stable business = Services business line and Automation business line. For Automation, this figure includes internal orders received from other business lines.

8 February 6, 2018 © Valmet | Financial Statements Review 2017 Order backlog was EUR 2,292 million at the end of 2017

Order backlog (EUR million) Structure of order backlog

3,000

2,500 2,613 2,5512,523 2,406 ~25% 2,312 2,283 2,292 2,000 2,208 2,207 2,192 2,064 2,1172,074 2,106 1,972 1,998 1,500

1,000 ~75%

500

Stable business Capital business

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

• Order backlog was EUR 231 million lower than at the end of Q3/2017 • Approximately 80% of the order backlog is currently expected to be realized as net sales during 2018 • Approximately 25% of the order backlog relates to stable business

9 February 6, 2018 © Valmet | Financial Statements Review 2017 Development of business lines Services: Orders received increased to EUR 1,242 million in 2017 Orders received (EUR million) Net sales (EUR million)

2016: 2017: 2016: 2017: EUR 1,182 million EUR 1,242 million EUR 1,163 million EUR 1,178 million

400 355 1,600 400 1,600 321 321 340 350 307 313 1,400 350 304 314 304 316 302 1,400 293 284 284 282 278 286 284 300 267273 273 267 264 1,200 300 268 257 1,200 242 252 251235 242 252 250 1,000 250 224 1,000 200 800 200 800 150 600 150 600 100 400 100 400 50 200 50 200

0 0 0 0

Q3/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

Q3/17 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q4/17 Orders received (LHS) Net sales (LHS) Orders received, last 4 quarters (RHS) Net sales, last 4 quarters (RHS)

• Orders received remained at the same level as in Q4/2016 - Orders received increased in Asia-Pacific, remained at the previous year’s level in EMEA and decreased in North America, China and South America - Orders received increased in Performance Parts, and Energy and Environmental, remained at the previous year’s level in Mill Improvements and decreased in Rolls, and Fabrics • Net sales increased compared with Q4/2016

11 February 6, 2018 © Valmet | Financial Statements Review 2017 Services business line in 2017

Orders received Orders received Orders received by business by area EUR 1,242 million 11% 12% 18% 25% Net sales 9% 14% EUR 1,178 million

Employees 9% 5,472 28%

Market position 29% #1–2 Services 45%

Rolls North America Mill Improvements South America Performance Parts Fabrics EMEA Energy and Environment China Asia-Pacific

12 February 6, 2018 © Valmet | Financial Statements Review 2017 Automation1: Orders received increased to EUR 368 million in 2017 Orders received2 (EUR million) Net sales2 (EUR million)

2016: 2017: 2016: 2017: EUR 337 million EUR 368 million EUR 316 million EUR 335 million 115 120 103 101 450 120 101 450 95 99 11 100 88 87 88 375 100 375 78 81 80 12 9 79 6 81 5 80 10 75 75 72 72 80 6 9 16 300 80 66 69 68 300 62 8 15 7 11 8 8 8 13 55 6 4 60 225 60 9 12 8 225 95 94 104 85 82 91 91 40 70 72 78 72 150 40 73 73 150 67 66 62 68 66 58 65 59 60 20 75 20 75

0 0 0 0

Q1/16 Q1/15 Q2/15 Q3/15 Q4/15 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Orders received, internal (from other business lines) Net sales, internal (from other business lines) Orders received, external Net sales, external Orders received, total (including internal) Net sales, total (including internal) Orders received, last 4 quarters (RHS) Net sales, last 4 quarters (RHS)

• Orders received increased compared with Q4/2016 - Orders received increased in China, North America and EMEA and decreased in Asia-Pacific and South America - Orders received increased in both Pulp and Paper, and Energy and Process • Net sales increased compared with Q4/2016

1) Comments refer to orders received and net sales including also internal orders received and net sales. 2) Q1/2015 orders received and the underlying figures for ‘Orders received, last 4 quarters’ and ‘Net sales, last 4 quarters’ are calculated based on Metso’s reported figures and pro forma figures excluding Process Automation Systems and are therefore indicative only. 13 February 6, 2018 © Valmet | Financial Statements Review 2017 Automation business line in 2017

Orders received Orders received Orders received by business by area EUR 368 million 8% 26% 8% 24% Net sales EUR 335 million

Employees 3% 1,708

Market position 74% #1–3 Pulp and paper 57%

Pulp and Paper North America Energy and Process South America EMEA China Asia-Pacific

Orders received EUR 368 million includes internal orders received and net sales EUR 335 million includes internal net sales.

14 February 6, 2018 © Valmet | Financial Statements Review 2017 Pulp and Energy: Orders received decreased to EUR 678 million in 2017 Orders received (EUR million) Net sales (EUR million)

2016: 2017: 2016: 2017: EUR 939 million EUR 678 million EUR 826 million EUR 929 million

700 622 1,400 350 312 1,400 560 600 1,200 300 262 1,200 245 245 260 229234 222231 500 1,000 250 215 204 220 1,000 196187 400 800 200 181 181 800 275 300 259 261238 247265 600 150 600 206 180 200 138 141122151 400 100 400 96 66 100 200 50 200

0 0 0 0

Q3/16 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Orders received (LHS) Net sales (LHS) Orders received, last 4 quarters (RHS) Net sales, last 4 quarters (RHS)

• Orders received decreased compared with Q4/2016 - Orders received increased in North America, EMEA and China and decreased in Asia-Pacific and South America - Orders received decreased in both Pulp and Energy • Net sales increased compared with Q4/2016

15 February 6, 2018 © Valmet | Financial Statements Review 2017 Pulp and Energy business line in 2017

Orders received Orders received Orders received by business by area EUR 678 million 2% 18% 9% Net sales EUR 929 million 5% 48% Employees 52% 1,727

Market position #1–2 Pulp 66% #1–3 Energy Pulp North America Energy South America EMEA China Asia-Pacific

16 February 6, 2018 © Valmet | Financial Statements Review 2017 Paper: Orders received increased to EUR 1,035 million in 2017 Orders received (EUR million) Net sales (EUR million)

2016: 2017: 2016: 2017: EUR 718 million EUR 1,035 million EUR 647 million EUR 755 million 400 1,200 400 1,200 350 314 1,050 350 1,050 300 275 900 300 900 246 243 232 250 212 203 750 250 750 190 197199186 186 185200 188 184 200 176 600 200 177 165 184 600 142149 157 156 128 129 120 138 150 109 450 150 114108 97 450 100 300 100 300 50 150 50 150

0 0 0 0

Q3/16 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

• Orders received decreased compared with Q4/2016 - Orders received increased in North America and decreased in all other areas - Orders received remained at the previous year’s level in Tissue and decreased in Board and Paper • Net sales increased compared with Q4/2016

17 February 6, 2018 © Valmet | Financial Statements Review 2017 Paper business line in 2017

Orders received Orders received Orders received by business by area EUR 1,035 million 3% 21% 27% Net sales 35% EUR 755 million 38%

Employees 0% 2,822

Market position 43% 31% #1 Tissue #1 Board #1 Paper Tissue North America Board South America Paper EMEA China Asia-Pacific

18 February 6, 2018 © Valmet | Financial Statements Review 2017 Financial development Q4/2017 in brief

Orders received remained at the previous year’s level at EUR 383 million in stable business1

Orders received decreased to EUR 354 million in capital business2

Net sales increased to EUR 936 million

Order backlog remained at the previous year’s level at EUR 2.3 billion

Comparable EBITA increased to EUR 76 million (margin 8.1%)

Gearing was -11%

20 February 6, 2018 © Valmet | Financial Statements Review 2017 Key figures

EUR million Q4/2017 Q4/2016 Change 2017 2016 Change Orders received 727 857 -15% 3,272 3,139 4%

Order backlog1 2,292 2,283 0% 2,292 2,283 0%

Net sales 936 785 19% 3,159 2,926 8%

Comparable EBITA 76 56 34% 226 196 15%

% of net sales 8.1% 7.2% 7.2% 6.7%

EBITA 63 48 31% 209 183 14%

Operating profit (EBIT) 56 40 38% 178 147 21%

% of net sales 5.9% 5.1% 5.6% 5.0%

Earnings per share, EUR 0.30 0.10 >100% 0.84 0.55 53%

Return on capital employed (ROCE) before taxes2 15% 12%

Cash flow provided by operating activities 89 88 0% 291 246 18%

Gearing1 -11% 6%

Items affecting comparability: EUR -12 million in Q4/2017 (EUR -8 million in Q4/2016), EUR -17 million in 2017 (EUR -13 million in 2016)

1) At the end of period 2) Annualized

21 February 6, 2018 © Valmet | Financial Statements Review 2017 Gross profit and SG&A development

Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales)

250 22% 25% 250 25%

200 20% 200 20% 15% 150 15% 150 15%

100 10% 100 10%

50 5% 50 5%

0 0% 0 0%

Q2/2017 Q3/2017 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q4/2017 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017

EUR million (LHS) % of net sales (RHS) EUR million (LHS) % of net sales (RHS)

• Gross profit percentage decreased compared with Q4/2016 − Capital business had a higher share of net sales in Q4/2017 • Selling, general & administrative (SG&A) expenses to net sales decreased compared with Q4/2016 • Actions to improve gross profit through Must-Win implementation

22 February 6, 2018 © Valmet | Financial Statements Review 2017 Comparable EBITA margin development

Net sales and Comparable EBITA (EUR million and %)

936 854 8.1% Target 8–10% 777 779 804 785 803 748 734 7.3% 7.1% 7.2% 7.1% 6.9% 685 671 6.4% 652 7.9% 6.1% 7.5% 588 590 561 519 5.1% 4.8% 492 5.5% 445 375 Capital business 3.7% 3.5% 408 427 429 400 334 404 444 Stable business 409 338 411 360 498 377 374 295 337 354 319 371 351 345 Comparable EBITA % 334 314 311 278 224 251 235 242

0.7% Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

Comparable EBITA 4 22 32 48 19 54 47 63 31 57 52 56 35 57 59 76 (EUR million)

• Net sales and Comparable EBITA increased compared with Q4/2016 − Profitability improved due to higher net sales

23 February 6, 2018 © Valmet | Financial Statements Review 2017 Cash flow provided by operating activities

Cash flow provided by operating activities (EUR million)

2014: 2015: 2016: 2017: EUR 236 million EUR 78 million EUR 246 million EUR 291 million 140 120 122 100 117 80 88 94 89 60 78 64 40 43 46 20 33 30 17 16 3 31 0 -20 -20

-40

Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017

• Change in net working capital1 EUR 18 million in Q4/2017 • Cash flow provided by operating activities EUR 89 million in Q4/2017 • CAPEX EUR 20 million in Q4/2017

1) Change in net working capital in the consolidated statement of cash flows.

24 February 6, 2018 © Valmet | Financial Statements Review 2017 Net working capital at -11% of rolling 12 months orders received

Net working capital and orders received (EUR million)

1,500 30%

1,000 20% 1,101 1,023 1,005 857 500 781 725 793 803 692 788 796 743 727 10% 466 480 580 0 -181 0% -257 -249 -345 -353 -355 -265 -244 -238 -247 -265 -294 -428 -313 -344 -366 -500 -10%

-1,000 -20%

Q2/2017 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q3/2017 Q4/2017

Orders received (LHS) Net working capital (LHS) Average net working capital/rolling 12 months orders received (RHS) Net working capital/rolling 12 months orders received (RHS)

• Net working capital EUR -366 million, which equals -11% of rolling 12 months orders received

25 February 6, 2018 © Valmet | Financial Statements Review 2017 Net debt decreased compared with both Q4/2016 and Q3/2017

Net debt (EUR million) and gearing (%) Equity to assets ratio (%)

27% 300 24% 30% 45% 42% 21% 38% 38% 38% 39% 40% 36% 36% 37% 37% 200 15% 20% 35% 231 35% 178 192 100 126 6% 4% 10% 30% 52 -3% 31 -3% 25% 0 0% 20% -27 -30 -100 -100 -10% 15% -166 -11% 10% -200 -20% 5% -21%

-300 -30% 0%

2014 2015

Q1/16 Q4/16 Q2/16 Q3/16 Q1/17 Q2/17 Q3/17 Q4/17

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

Net debt Gearing

• Gearing (-11%) and net debt (EUR -100 million) decreased compared with both Q4/2016 and Q3/2017 • Equity to assets ratio increased compared with both Q4/2016 and Q3/2017

Automation acquisition was completed on April 1, 2015.

26 February 6, 2018 © Valmet | Financial Statements Review 2017 Capital employed and Comparable ROCE

Capital employed (EUR million) and Comparable return on capital employed (ROCE), before taxes1 (%)

1,239 1,240 1,231 1,214 1,194 1,195 1,184 1,167 1,154 1,159 1,152 1,122 Target 16% 985 967 15% 15–20% 902 14% 14% 14% 14% 14% 877 13% 13% 12% 12% 10% 10%

2% 2% 1%

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17

Capital employed Comparable ROCE (before taxes), rolling 12 months

• Target for Comparable return on capital employed (ROCE): 15–20%

1) Rolling 12 months. Carve-out figures for 2013 have been used in the calculation of Q1–Q3/2014 figures.

27 February 6, 2018 © Valmet | Financial Statements Review 2017 Dividend proposal, guidance and short-term market outlook Dividend proposal

Dividend policy Dividend payout at least 50% of net profit

Board of Directors’ dividend proposal to the Annual General Meeting

EUR 0.55 per share

Dividend per share (euro)

0.55 0.35 0.42 0.25 0.15

2013 2014 2015 2016 2017 (proposal by the BoD)

29 February 6, 2018 © Valmet | Financial Statements Review 2017 Guidance and short-term market outlook

Guidance for 2018 to be announced in March 2018 at the latest

Guidance Following the adoption of the new principles of IFRS 15, effective as of January 1, 2018, Valmet’s revenue recognition will change in 2018. As a result, Valmet will publish restated figures for 2017 in March 2018 at the latest. Valmet will announce its financial guidance for 2018 in conjunction with the restated figures.

Short-term market outlook

Q1/2017 Q2/2017 Q3/2017 Q4/2017

Services Good Good Good Good

Automation Satisfactory Satisfactory Satisfactory Good

Pulp Weak Weak Weak Weak Pulp and Energy Energy Good Good Satisfactory Satisfactory

Board and Paper Good Good Good Good Paper Tissue Good Good Good Good

The short-term market outlook is given for the next six months from the end of the respective quarter. The scale is ‘weak–satisfactory–good’.

30 February 6, 2018 © Valmet | Financial Statements Review 2017 Summary of Financial Statements Review 2017 2017 in brief

Orders received increased to EUR 1,609 million in stable business1

Orders received remained at the previous year’s level at EUR 1,713 million in capital business2

Net sales increased to EUR 3,159 million

Order backlog remained at the previous year’s level at EUR 2.3 billion

Comparable EBITA increased to EUR 226 million (margin 7.2%)

Gearing was -11%

32 February 6, 2018 © Valmet | Financial Statements Review 2017 Appendix Business lines in 2017: Stable business

Services business line Automation business line

11% 18% 12% 8% 25% 26% 8% 24% 9% 14%

3% 9% 28% 74% 29%

45% 57%

Orders received Orders received Orders Rolls North America Pulp and Paper North America Mill Improvements South America Energy and Process South America Performance Parts EMEA EMEA Fabrics China China Energy and Environment Asia-Pacific Asia-Pacific 11% 11% 8% 18% 6% 23% 25% 27% 10% 14%

4% 9%

28%

Net sales Net sales Net 73% 28% 45% 59%

Rolls North America Pulp and Paper North America Mill Improvements South America Energy and Process South America Performance Parts EMEA EMEA Fabrics China China Energy and Environment Asia-Pacific Asia-Pacific

34 February 6, 2018 © Valmet | Financial Statements Review 2017 Business lines in 2017: Capital business

Pulp and Energy business line Paper business line

2% 9% 3% 18% 21% 27% 35% 5% 38% 48% 52% 0%

66% 43% 31%

Orders received Orders received Orders Pulp North America Tissue North America Energy South America Board South America EMEA Paper EMEA China China Asia-Pacific Asia-Pacific 4% 7% 15% 12% 21% 26% 38% 7% 37% 29% 1%

62%

Net sales Net sales Net

42% 62% 38%

Pulp North America Tissue North America Energy South America Board South America EMEA Paper EMEA China China Asia-Pacific Asia-Pacific

35 February 6, 2018 © Valmet | Financial Statements Review 2017 Structure of loans and borrowings Interest-bearing debt EUR 219 million as at December 31, 2017

Amount of outstanding interest-bearing debt Main financing sources and facilities (EUR million)

250 Source Amount outstanding

200 Loans from banks and EUR 219 million financial institutions 150

EUR 200 million 100 committed syndicated revolving None outstanding credit facility1

50 EUR 200 million domestic commercial None outstanding 0 paper program 2017 2018 2019 2020 2021 2022 2023 2024 2025

1) EUR 200 million syndicated revolving credit facility agreement matures on January 14, 2023 with a 1-year extension option.

• Average maturity of long-term loans is 4.0 years - Average interest rate is 1.3%

36 February 6, 2018 © Valmet | Financial Statements Review 2017 Largest shareholders on December 31, 2017 Based on the information given by Euroclear Finland Ltd.

Largest shareholders

# Shareholder name Number of shares % of shares and votes

1 Solidium Oy1 16,695,287 11.14%

2 Elo Mutual Pension Insurance Company 4,210,000 2.81%

3 Varma Mutual Pension Insurance Company 4,165,465 2.78%

4 Ilmarinen Mutual Pension Insurance Company 3,103,000 2.07%

5 OP Funds 2,862,937 1.91%

6 The State Pension Fund 1,545,000 1.03%

7 Keva 1,502,166 1.00%

8 Mandatum Life Insurance Company Limited 922,537 0.62%

9 Nordea funds 888,210 0.59%

10 Odin Funds 883,115 0.59%

10 largest shareholders, total 36,777,717 24.54%

Other shareholders 113,086,902 75.46%

Total 149,864,619 100%

1) A holding company that is wholly owned by the Finnish State

13.6%

11.1% Nominee registered and non-Finnish holders Finnish institutions, companies and foundations 50.1% Solidium Oy Finnish private investors 25.2%

Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and non-Finnish holders1 312 0.7% 75,094,795 50.1% Finnish institutions, companies and foundations 2,390 5.2% 37,751,535 25.2% Solidium Oy2 0 0.0% 16,695,287 11.1% Finnish private investors 43,188 94.1% 20,314,922 13.6% In the issuer account 0 0.0% 8,080 0.0%

Total 45,890 100% 149,864,619 100%

The shareholder structure is based on the classification of sectors determined by Statistics Finland.

1) Of which 73,152,725 nominee registered shares 2) A holding company that is wholly owned by the Finnish State

56% 59,000

57,000 54%

55,000 52% 53,000 50% 51,000 48% 49,000 46% 47,000

44% 45,000

42% 43,000

05/2015 05/2016 12/2013 01/2014 02/2014 03/2014 04/2014 05/2014 06/2014 07/2014 08/2014 09/2014 10/2014 11/2014 12/2014 01/2015 02/2015 03/2015 04/2015 06/2015 07/2015 08/2015 09/2015 10/2015 11/2015 12/2015 01/2016 02/2016 03/2016 04/2016 06/2016 07/2016 08/2016 09/2016 10/2016 11/2016 12/2016 01/2017 02/2017 03/2017 04/2017 05/2017 06/2017 07/2017 08/2017 09/2017 10/2017 11/2017 12/2017 Non-Finnish holders (LHS) Total number of shareholders (RHS)

1,100

1,000

900

800

700

600

500

400

300

200

Jul-13 Jul-15 Jul-17 Jul-14 Jul-16

Jan-13 Jan-15 Jan-16 Jan-18 Jan-14 Jan-17

Mar-13 Mar-15 Mar-14 Mar-16 Mar-17

Sep-13 Sep-15 Nov-15 Sep-17 Nov-17 Nov-13 Sep-14 Nov-14 Sep-16 Nov-16

May-13 May-15 May-17 May-14 May-16

Northern bleached softwood pulp (USD/t) Copy paper (EUR/t) Testliner (EUR/t)

40 February 6, 2018 © Valmet | Financial Statements Review 2017 Source: Bloomberg Crude oil, steam coal, natural gas and electricity Europe

140 120 100 80 60 40 20 0 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 CIF ARA steam coal (USD/t) Brent crude oil (USD/barrel) Natural gas spot price NBP (GBP/therm)

0 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 European Energy Exchange, Phelix (EUR/MWh) Nordpool Power (EUR/MWh) UK Baseload (GBP/MWh)

41 February 6, 2018 © Valmet | Financial Statements Review 2017 Source: Bloomberg Crude oil, steam coal, natural gas and electricity United States

120 6

100 5

80 4

60 3

40 2

20 1

0 0

FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS)

250 85

200 80 150 75 100 70 50

0 65 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Electricity spot price, PJM (USD/MWh) (LHS) Electricity spot price, NEPOOL (USD/MWh) (LHS) US utility capacity utilization rate, % (RHS)

10 9 8 7 6 5 4 3 2 1

Jul-13 Jul-14 Jul-15 Jul-16 Jul-17

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

Mar-15 Mar-13 Mar-14 Mar-16 Mar-17

Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Sep-13 Sep-14 Sep-15 Sep-16 Sep-17

May-13 May-14 May-15 May-16 May-17

European Energy Exchange (EEX) spot price (EUR/t)

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No securities of the Company are being offered or sold, directly or indirectly, in or into the United States and no shares in the Company have been, or will be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any state of the United States and, accordingly, may not be offered or sold, directly or indirectly, in or into the United States (as defined in Regulation S under the Securities Act), unless registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable state securities laws of the United States. The Information is directed solely at: (i) persons outside the United Kingdom, (ii) persons with professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”), (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order and (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities of the Company or any member of its group may otherwise lawfully be communicated or caused to be communicated (all such persons in (i)-(iv) above being “Relevant Persons”). Any investment activity to which the Information relates will only be available to and will only be engaged with Relevant Persons. Any person who is not a Relevant Person should not act or rely on the Information. By accessing the Information, you represent that you are a Relevant Person. The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forward- looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward- looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Information or the opinions contained therein. The Information has not been independently verified and will not be updated. The Information, including but not limited to forward- looking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company’s expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document. Market data used in the Information not attributed to a specific source are estimates of the Company and have not been independently verified.

April 27, 2018

www.valmet.com/investors

Save the date Valmet’s Capital Markets Day September 18, 2018 Helsinki, Finland