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9.
14.
Income taxes.................................................
17.
19.
Subsidiaries..................................................
Report of the Board of Directors
January–December 2022
Governance
Current legislation, the company’s Articles of Association and the
rules and regulations of organizations regulating and supervising
the activities of listed companies are complied with in Valmet
Oyj and Valmet Group corporate governance. Valmet Oyj
complies without deviation with the Finnish Corporate
Governance Code for listed companies. The Code is publicly
available at www.cgfinland.fi.
Corporate Governance Statement and
Remuneration Report
Valmet has published a separate Corporate Governance
Statement and a Remuneration Report for 2022, which comply
with the recommendations of the Finnish Corporate Governance
Code for listed companies. The statements also cover other
central areas of corporate governance. The statements have
been published on Valmet’s website, separately from the Board
of Directors’ Report, at www.valmet.com/governance.
Annual General Meeting
The Annual General Meeting is the company’s highest decision-
making body, and its tasks are defined according to the Articles
of Association and the Finnish Limited Liability Companies Act.
The Annual General Meeting decides on the adoption of the
financial statements, the distribution of profit, discharging the
members of the Board of Directors and the President and CEO
from liability, appointing the members, Chairman and Vice-
Chairman of the Board as well as the auditor, their
remunerations, and other matters requiring a decision by the
Annual General Meeting according to the Finnish Limited Liability
Companies Act that are presented to the Annual General
Meeting. The General Meeting convenes at least once a year.
The Board of Directors convenes the Annual General Meeting.
The Board of Directors
The Board of Directors shall see to the administration of the
company and the appropriate organization of its operations, and
ensures that the monitoring of the company’s accounting and
asset management is arranged appropriately. The Board of
Directors monitors the Group’s activities, finances and risk
management, and its task is to promote the interests of
shareholders and the Group by ensuring the appropriate
organization of the entire Group’s governance and operations.
According to Valmet’s Articles of Association, the Board of
Directors shall include at least five (5) members and at most
eight (8) members. The term of office of Board members ends at
the end of the first Annual General Meeting following the
elections. The Annual General Meeting selects the Chairman,
Vice-Chairman, and other members of the Board.
President and CEO
The Board of Directors selects a President and CEO for the
company and decides on the salary and remuneration of the
President and CEO as well as other terms related to the position.
The Board of Directors monitors the work of the CEO.
The President and CEO is responsible for the company’s daily
administration according to the instructions and regulations of
the Board of Directors. The President and CEO is responsible for
ensuring the legality of the company’s accounting and for the
reliable organization of the company’s asset management.
Merger with Neles
On July 2, 2021, Valmet announced that the Boards of Directors
of Valmet Oyj and Neles Corporation had signed a combination
agreement and a merger plan to combine the two companies
through a merger. Both companies held an Extraordinary
General Meeting on September 22, 2021, and both EGMs
approved the merger. Valmet and Neles had received all
competition approvals for the merger of Neles into Valmet on
March 21, 2022. Valmet’s Annual General Meeting on March 22,
2022, resolved to pay a dividend of EUR 1.20 per share and the
Neles Annual General Meeting on March 22, 2022, resolved to
pay a dividend of EUR 0.266 per share in accordance with the
combination agreement. In addition, Neles’ Board of Directors
decided on March 22, 2022, on an extra distribution of funds in
total of EUR 2.00 per share in accordance with the combination
agreement. The dividends and Neles' extra distribution of funds
of EUR 2.00 per share were executed on March 31, 2022. The
merger of Valmet and Neles was registered with the Finnish
Trade Register on April 1, 2022.
On July 2, 2021, Valmet entered into EUR 350 million term
loan facilities agreement with Danske Bank A/S and Nordea Bank
Abp. The syndication of the term loan facilities was closed on
October 20, 2021. The loan was used for refinancing existing
indebtedness of Valmet and Neles in connection with the
merger. EUR 215 million (originally 301 million) bridge facility
agreement, originally entered into by Neles, was transferred to
Valmet in connection with the completion of the merger. The
bridge loan facility was used for financing of the extra
distribution to shareholders of Neles. The outstanding bridge
loan facility was repaid in December 2022.
On March 22, 2022, the Boards of Directors of Valmet and
Neles approved a loan agreement between the companies
concerning the part of the extra distribution of funds of EUR 2.00
per share payable to Valmet. According to the loan agreement,
the part of the extra distribution payable to Valmet as a
shareholder of Neles was not paid in cash to Valmet in
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
2
connection with payment of the extra distribution to other
shareholders of Neles, but the amount payable to Valmet was
recorded as debt owed by Neles to Valmet.
Valmet and Neles were separate listed companies prior to the
merger. On April 1, 2022, Valmet announced that the statutory
merger of Neles Corporation into Valmet had been registered
and the combination of Valmet’s and Neles’ business operations
had been completed. Neles is consolidated into Valmet as of
April 1, 2022, and forms Valmet’s fifth business line called Flow
Control. After the merger, Valmet’s business lines are Services,
Flow Control, Automation Systems, Paper, and Pulp and Energy.
Automation Systems business line was previously called
Automation.
The final Shareholders’ Meeting of Neles was held on June 22,
2022, in Vantaa. The Shareholders’ Meeting adopted the final
accounts of Neles in accordance with Chapter 16, Section 17 of
the Finnish Companies Act, consisting of the financial statements
and annual report for the financial period January 1, 2022–March
31, 2022. The Shareholders’ Meeting also resolved on
discharging the members of the Board of Directors and the
President and CEO of Neles from liability.
Update on the integration of Flow Control into
Valmet
The integration of Flow Control (former Neles) into Valmet is
proceeding according to the plan. Active sales and marketing of
Valmet's whole offering was started in the second quarter, and
several package orders were received in 2022. Most of the cost
synergy actions regarding function costs, common locations and
supply chain were implemented already during 2022. Valmet
expects to generate annual run rate synergies of approximately
EUR 25 million, of which approximately 60 percent are expected
to be achieved by the end of 2023 and approximately 90 percent
by the end of 2024. Valmet's orders received included
approximately EUR 10 million synergy impact in 2022.
Approximately EUR 12 million of annual run rate cost synergies
were achieved by the end of 2022. Roughly half of the achieved
run rate synergies were realized as cost savings in 2022.
Russia's invasion of Ukraine and sanctions on
Russia
Due to Russia's invasion of Ukraine, Valmet reviewed key
contractual obligations, project schedules, and identified risks for
projects that are delivered to Russia. Based on the review,
Valmet identified projects that it estimates no longer to meet the
criteria of a customer contract for revenue recognition purposes,
and consequently made a reversal of approximately EUR 80
million to its order backlog during 2022.
On June 3, 2022, Valmet announced that it has initiated
employee reductions, which will result in a 50 percent reduction
in the number of employees in Russia in the first implementation
phase. A second phase was implemented in autumn and resulted
in further employee reductions and the closure of one legal
entity. Consequently, Valmet recorded an expense of
approximately EUR 20 million during 2022 for estimated
restructuring costs, asset impairments and other exceptional
items triggered by Valmet's decision to withdraw from Russia.
These costs have been reported in cost of sales, in selling,
general and administrative expenses and in other operating
expenses, and have been reported as items affecting
comparability. Therefore, they do not impact Comparable EBITA.
At the end of 2022, Valmet had a total of approximately 30
employees in Russia, working primarily in administration,
engineering, and maintenance. Valmet does not have production
in Russia. Approximately 2 percent of Valmet's net sales came
from its Russian operations in 2021.
Valmet will withdraw from Russia completely and will continue
to implement the withdrawal in stages as the review of
implementation options is fully completed. Valmet complies with
all sanctions and export regulations impacting business with
Russia and Belarus and monitors the development actively.
Valmet's results in 2022
Figures in brackets, unless otherwise stated, refer to the
comparison period, i.e., the same period of the previous year.
Starting from January 1, 2022, Valmet has a new financial
reporting structure consisting of three reportable segments
(segments): Services, Automation and Process Technologies.
Services segment includes the Services business line.
Automation segment includes the Automation Systems business
line (previously called Automation), and as of April 1, 2022, also
the Flow Control business line. Process Technologies segment
includes the Pulp and Energy, and Paper business lines.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
3
Key figures1
EUR million
2022
2021
2020
Orders received
5,194
4,740
3,653
Order backlog2
4,403
4,096
3,257
Net sales
5,074
3,935
3,740
Comparable earnings before interest, taxes and amortization (Comparable EBITA)
533
429
365
% of net sales
10.5%
10.9%
9.8%
Earnings before interest, taxes and amortization (EBITA)
550
448
355
% of net sales
10.8%
11.4%
9.5%
Operating profit (EBIT)
436
399
319
% of net sales
8.6%
10.1%
8.5%
Profit before taxes
431
395
307
Profit for the period
338
296
231
Earnings per share, EUR
1.92
1.98
1.54
Earnings per share, diluted, EUR
1.92
1.98
1.54
Adjusted earnings per share, EUR3
2.37
2.09
1.64
Equity per share2, EUR
13.55
8.87
7.60
Dividend per share, EUR
1.304
1.20
0.90
Cash flow provided by operating activities
36
482
532
Cash flow after investments
56
382
-60
Return on equity (ROE)
18%
24%
21%
Return on capital employed (ROCE) before taxes
18%
24%
22%
Equity to assets ratio2
49%
42%
39%
Gearing2
20%
-7%
13%
1 The calculation of key figures is presented in the section ‘Formulas for calculation of indicators’.
2 At the end of period.
3 Adjusted earnings per share (Adjusted EPS) is a new alternative performance measure that excludes the impact of fair value adjustments arising from business combinations,
net of tax (2022: EUR 78 million, 2021: EUR 17 million, 2020: EUR 15 million). Adjusted EPS enables users of the financial information to prepare more meaningful analysis on
Valmet's performance.
4 Board of Directors’ proposal.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
4
Orders received increased 10 percent to
EUR 5,194 million in 2022
Orders received, EUR million
2022
2021
Change
Services
1,756
1,481
19%
Automation
1,081
467
>100%
Flow Control
576
Automation Systems
505
467
8%
Process Technologies
2,356
2,793
-16%
Pulp and Energy
1,072
1,160
-8%
Paper
1,285
1,634
-21%
Total
5,194
4,740
10%
Orders received, comparable
foreign exchange rates,
EUR million1
2022
2021
Change
Services
1,679
1,481
13%
Automation
1,021
467
>100%
Flow Control
530
Automation Systems
491
467
5%
Process Technologies
2,319
2,793
-17%
Pulp and Energy
1,072
1,160
-8%
Paper
1,247
1,634
-24%
Total
5,018
4,740
6%
1 Indicative only. January to December 2022 orders received in euro calculated by
applying January to December 2021 average exchange rates to the functional
currency orders received values reported by entities.
Orders received, EUR million
2022
2021
Change
North America
1,260
725
74%
South America
353
696
-49%
EMEA
2,098
2,022
4%
China
711
755
-6%
Asia-Pacific
771
544
42%
Total
5,194
4,740
10%
Orders received increased 10 percent to EUR 5,194 million (EUR
4,740 million) in 2022. The increase was largely due to Neles,
which has been consolidated to Valmet as of April 1, 2022.
Orders received increased in the Automation and Services
segments and decreased in the Process Technologies segment.
Stable business (Services and Automation segments) accounted
for 55 percent (41%) of Valmet’s orders received.
Orders received increased in North America and Asia-Pacific,
remained at the previous year's level in EMEA (Europe, Middle
East and Africa) and decreased in South America and China.
Measured by orders received, the top three countries were the
USA, China and Indonesia, which together accounted for 42
percent of total orders received. South America, China and Asia-
Pacific together accounted for 35 percent (42%) of orders
received.
Changes in foreign exchange rates compared to the exchange
rates in 2021 increased orders received by approximately EUR
175 million in 2022.
In 2022, Valmet received among others an order for OCC,
stock preparation and container board lines with a large scope of
automation systems, Industrial Internet solutions and services to
the United Kingdom (typically valued at around EUR 150–170
million), an order for a coated board making line with
automation and Industrial Internet solutions as well as spare
parts and consumables packages to Asia-Pacific (typically valued
at around EUR 140–180 million), an order for a paper machine
rebuild in the USA (typically worth between EUR 90 and 120
million), an order for a fine paper making line with an extensive
scope of automation to China (typically valued at EUR 80–100
million), an order for key pulp technology and automation
solutions to Finland (typically valued at around EUR 75–100
million), an order for a combined heat and power plant and a
pretreatment system with automation to Poland, an order for a
fiberline modernization to a pulp mill in Brazil (typically valued at
around EUR 25–40 million), and an order for a tissue production
line to Mexico.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
5
Order backlog amounted to EUR 4.4 billion
As at Dec 31,
Order backlog, EUR million
2022
2021
Change
Total
4,403
4,096
7%
Order backlog amounted to EUR 4,403 million at the end of year
2022 and was 7 percent higher than at the end of 2021.
Approximately 20 percent of the order backlog relates to the
Services segment, 15 percent to the Automation segment, and
65 percent to the Process Technologies segment (at the end of
December 2021, 20%, 5% and 75% respectively).
Approximately 75 percent of the order backlog is currently
expected to be realized as net sales during 2023 (at the end of
2021, approximately 70% was expected to be realized as net
sales during 2022).
Net sales increased 29 percent to EUR 5,074
million in 2022
Net sales, EUR million
2022
2021
Change
Services
1,606
1,360
18%
Automation
1,040
412
>100%
Flow Control
551
Automation Systems
489
412
19%
Process Technologies
2,428
2,163
12%
Pulp and Energy
1,081
1,022
6%
Paper
1,347
1,141
18%
Total
5,074
3,935
29%
Net sales, comparable
foreign exchange rates,
EUR million1
2022
2021
Change
Services
1,538
1,360
13%
Automation
983
412
>100%
Flow Control
510
Automation Systems
473
412
15%
Process Technologies
2,375
2,163
10%
Pulp and Energy
1,070
1,022
5%
Paper
1,305
1,141
14%
Total
4,897
3,935
24%
1Indicative only. January to December 2022 net sales in euro calculated by applying
January to December 2021 average exchange rates to the functional currency net
sales values reported by entities.
Net sales, EUR million
2022
2021
Change
North America
1,058
780
36%
South America
718
384
87%
EMEA
1,876
1,614
16%
China
829
780
6%
Asia-Pacific
593
377
57%
Total
5,074
3,935
29%
Net sales increased 29 percent to EUR 5,074 million (EUR 3,935
million) in year 2022. Stable business (Services and Automation
segments) accounted for 52 percent (45%) of Valmet’s net
sales. Net sales increased in all three segments.
Net sales increased in all areas. Measured by net sales, the top
three countries were the USA, China and Brazil, which together
accounted for 45 percent of net sales. South America, China,
and Asia-Pacific together accounted for 42 percent (39%) of net
sales.
Changes in foreign exchange rates compared to the exchange
rates in 2021 increased net sales by approximately EUR 177
million in 2022.
Comparable EBITA increased 24 percent,
but Comparable EBITA margin decreased
to 10.5 percent
Comparable EBITA, EUR
million
2022
2021
Change
Services
237
204
16%
Automation
190
79
>100%
Process Technologies
145
175
-17%
Other
-39
-30
30%
Total
533
429
24%
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
6
Comparable EBITA, % of net sales
2022
2021
Services
14.8%
15.0%
Automation
18.3%
19.2%
Process Technologies
6.0%
8.1%
Total
10.5%
10.9%
In 2022, Valmet's comparable earnings before interest, taxes
and amortization (Comparable EBITA) increased 24 percent to
EUR 533 million, i.e. 10.5 percent of net sales (EUR 429 million
and 10.9%). Items affecting comparability amounted to EUR 17
million (EUR 19 million), mainly including a gain of EUR 59
million from remeasurement of Valmet's previously held equity
interest in Neles and expenses from Valmet’s withdrawal from
Russia.
Comparable EBITA of the Services segment increased to EUR
237 million in 2022, corresponding to 14.8 percent of the
segment's net sales (EUR 204 million and 15.0%). Comparable
EBITA increased due to higher net sales, but the margin was
lower due to cost inflation.
Comparable EBITA of the Automation segment increased to
EUR 190 million in 2022, corresponding to 18.3 percent of the
segment's net sales (EUR 79 million and 19.2%). 
Comparable EBITA of the Process Technologies segment
decreased to EUR 145 million in 2022, corresponding to 6.0
percent of the segment's net sales (EUR 175 million and 8.1%).
Comparable EBITA decreased as margins in some Pulp and
Energy projects were impacted by cost inflation.
Operating profit
Operating profit (EBIT) in 2022 was EUR 436 million, i.e. 8.6
percent of net sales (EUR 399 million and 10.1%).
In the second quarter, Valmet recorded a gain of EUR 59
million under other operating income from remeasurement of
Valmet's previously held equity interest in Neles.
Net financial income and expenses
Net financial income and expenses amounted to EUR -5 million
(EUR -3 million) in 2022.
Profit before taxes and Earnings per share
Profit before taxes was EUR 431 million (EUR 395 million) in
2022. The profit attributable to owners of the parent was EUR
338 million (EUR 296 million), corresponding to earnings per
share (EPS) of EUR 1.92 (EUR 1.98). Adjusted EPS was EUR
2.37 (EUR 2.09).
Return on capital employed (ROCE) and return
on equity (ROE)
The return on capital employed (ROCE) before taxes was 18
percent (24%) and return on equity (ROE) 18 percent (24%) in
2022.
Segments and business lines
Services: Orders received totaled EUR 1,756 million in 2022
Services segment
2022
2021
Change
Orders received (EUR million)
1,756
1,481
19%
Net sales (EUR million)
1,606
1,360
18%
Comparable EBITA
(EUR million)
237
204
16%
Comparable EBITA, %
14.8%
15.0%
Personnel (end of period)
6,307
5,958
6%
Orders received by the Services segment increased 19 percent
to EUR 1,756 million (EUR 1,481 million) in 2022. Services
accounted for 34 percent (31%) of all orders received. Orders
received increased in all businesses and all geographical areas.
Changes in foreign exchange rates compared to the exchange
rates in 2021 increased orders received by approximately EUR
77 million.
Net sales for the Services segment amounted to EUR 1,606
million (EUR 1,360 million) in 2022, corresponding to 32 percent
(35%) of Valmet’s net sales. Changes in foreign exchange rates
compared to the exchange rates in 2021 increased net sales by
approximately EUR 68 million.
Comparable EBITA of the Services segment increased to EUR
237 million in 2022, corresponding to 14.8 percent of the
segment's net sales (EUR 204 million and 15.0%). Comparable
EBITA increased due to higher net sales, but the margin was
lower due to cost inflation.
The Services segment was affected by cost inflation, reduced
component availability and longer delivery times of certain
components in 2022.
Automation: Orders received totaled EUR 1,081 million in
2022
Automation segment
2022
2021
Change
Orders received (EUR million)
1,081
467
>100%
Net sales (EUR million)
1,040
412
>100%
Comparable EBITA
(EUR million)
190
79
>100%
Comparable EBITA, %
18.3%
19.2%
Personnel (end of period)
4,842
1,986
>100%
Orders received by the Automation segment increased more
than 100 percent to EUR 1,081 million (EUR 467 million) in
2022, due to the consolidation of Neles into Valmet as of April 1,
2022. Automation accounted for 21 percent (10%) of Valmet’s
orders received. Changes in foreign exchange rates compared to
the exchange rates in 2021 increased orders received by
approximately EUR 60 million.
Net sales for the Automation segment amounted to EUR 1,040
million (EUR 412 million) in 2022, corresponding to 20 percent
(10%) of Valmet’s net sales. Changes in foreign exchange rates
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
7
compared to the exchange rates in 2021 increased net sales by
approximately EUR 56 million.
Comparable EBITA of the Automation segment increased to
EUR 190 million in 2022, corresponding to 18.3 percent of the
segment's net sales (EUR 79 million and 19.2%). 
Flow Control business line
2022
2021
Change
Orders received (EUR million)
576
Net sales (EUR million)
551
Personnel (end of period)
2,792
The Flow Control business line was formed on April 1, 2022,
when Neles merged with Valmet. Orders received by the Flow
Control business line amounted to EUR 576 million in April–
December and accounted for 11 percent of Valmet's orders
received in 2022.
Net sales for the Flow Control business line amounted to EUR
551 million in April–December, corresponding to 11 percent of
Valmet’s net sales in 2022.
Reduced component availability and the lockdowns in China
earlier in 2022 caused longer lead times for Flow Control in
April–December.
Automation Systems
business line
2022
2021
Change
Orders received (EUR million)
505
467
8%
Net sales (EUR million)
489
412
19%
Personnel (end of period)
2,050
1,986
3%
Orders received by the Automation Systems business line
increased 8 percent to EUR 505 million (EUR 467 million) in
2022. Automation Systems accounted for 10 percent (10%) of
Valmet’s orders received. Orders received increased in North
America, remained at the previous year's level in Asia-Pacific,
EMEA and China, and decreased in South America. Orders
received increased in both Pulp and Paper, and Energy and
Process.
Net sales for the Automation Systems business line amounted
to EUR 489 million (EUR 412 million) in 2022, corresponding to
10 percent (10%) of Valmet’s net sales.
Component availability continued at a reduced level and
delivery times of certain components were longer during 2022.
Process Technologies: Orders received totaled EUR 2,356
million in 2022
Process Technologies
segment
2022
2021
Change
Orders received (EUR million)
2,356
2,793
-16%
Net sales (EUR million)
2,428
2,163
12%
Comparable EBITA
(EUR million)
145
175
-17%
Comparable EBITA, %
6.0%
8.1%
Personnel (end of period)
5,647
5,654
0%
Orders received by the Process Technologies segment decreased
16 percent to EUR 2,356 million (EUR 2,793 million) in 2022.
Process Technologies accounted for 45 percent (59%) of all
orders received. Changes in foreign exchange rates compared to
the exchange rates for the corresponding period in 2021
increased orders received by approximately EUR 38 million.
Net sales for the Process Technologies segment amounted to
EUR 2,428 million (EUR 2,163 million) in 2022, corresponding to
48 percent (55%) of Valmet’s net sales. Changes in foreign
exchange rates compared to the exchange rates for the
corresponding period in 2021 increased net sales by
approximately EUR 53 million.
Comparable EBITA of the Process Technologies segment
decreased to EUR 145 million in 2022, corresponding to 6.0
percent of the segment's net sales (EUR 175 million and 8.1%).
Comparable EBITA decreased as margins in some Pulp and
Energy projects were impacted by cost inflation.
Pulp and Energy
business line
2022
2021
Change
Orders received (EUR million)
1,072
1,160
-8%
Net sales (EUR million)
1,081
1,022
6%
Personnel (end of period)
1,892
1,946
-3%
Orders received by the Pulp and Energy business line decreased
8 percent to EUR 1,072 million (EUR 1,160 million) in 2022. Pulp
and Energy accounted for 21 percent (24%) of all orders
received. Orders received increased in North America, Asia-
Pacific and EMEA and decreased in South America and China.
Orders received increased in Energy and decreased in Pulp.
Net sales for the Pulp and Energy business line amounted to
EUR 1,081 million (EUR 1,022 million) in 2022, corresponding to
21 percent (26%) of Valmet’s net sales.
Cost inflation impacted Pulp and Energy’s business
environment during 2022. The Pulp and Energy business line has
managed the challenges caused by COVID-19 well, and the
pandemic did not cause major impacts on its operations during
2022.
Paper business line
2022
2021
Change
Orders received (EUR million)
1,285
1,634
-21%
Net sales (EUR million)
1,347
1,141
18%
Personnel (end of period)
3,755
3,708
1%
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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Orders received by the Paper business line decreased 21 percent
to EUR 1,285 million (EUR 1,634 million) in 2022. Paper
accounted for 25 percent (34%) of all orders received. Orders
received increased in North America and Asia-Pacific, remained
at the previous year's level in China, and decreased in South
America and EMEA. Orders received decreased in all businesses.
Net sales for the Paper business line amounted to EUR 1,347
million (EUR 1,141 million) in 2022, corresponding to 27 percent
(29%) of Valmet’s net sales.
The fire at Valmet's Rautpohja factory site in Jyväskylä,
Finland, in May, COVID-19 and lockdowns in China impacted
Paper business line’s operations during 2022. The Paper
business line has managed the challenges caused by the fire and
COVID-19 well.
Cash flow and financing
Cash flow provided by operating activities amounted to EUR 36
million (EUR 482 million) in 2022. Net working capital totaled
EUR -82 million (EUR -673 million) at the end of the year.
Change in net working capital in the statement of cash flows was
EUR -399 million (EUR 76 million) in 2022. Payment schedules of
large long-term projects have a significant impact on net
working capital development. Inventories have increased due to
the consolidation of Neles and higher stock levels in response to
component supply issues. Trade receivables increased and
advance payments received from customers were lower in 2022
compared with 2021.
Cash flow after investments totaled EUR 56 million (EUR 382
million) in 2022.
At the end of 2022, gearing was 20 percent (-7%) and equity
to assets ratio was 49 percent (42%). Interest-bearing liabilities
amounted to EUR 809 million (EUR 477 million), and net
interest-bearing liabilities totaled EUR 502 million (EUR -88
million) at the end of the reporting period. Interest-bearing
liabilities increased mainly due to consolidation of Neles.
The average maturity of Valmet’s non-current debt was 3.3
years, and average interest rate was 2.3 percent at the end of
2022. Lease liabilities have been excluded from calculation of
these two key performance indicators.
Valmet’s liquidity was strong at the end of the reporting
period, with cash and cash equivalents amounting to 277 million
(EUR 517 million) and interest-bearing current financial assets
totaling EUR 30 million (EUR 47 million).
Valmet’s liquidity was secured with a committed revolving
credit facility of EUR 300 million, which was undrawn at the end
of the reporting period. In October, Valmet utilized the first 1-
year extension option and the maturity of the revolving credit
facility was extended until October 2025 with 1-year extension
option left dependent on the approval of the banks concerned.
Liquidity was additionally secured by an uncommitted
commercial paper program worth of EUR 300 million, of which
EUR 95 million was outstanding at the end of the reporting
period. In December, Valmet increased its commercial paper
program, originally signed in 2013, from EUR 200 million to EUR
300 million.
In December, the outstanding bridge loan facility of EUR 215
million was repaid and a new term loan of EUR 50 million was
withdrawn. The new term loan matures in 2027 with 1-year
extension option dependent on the approval of the bank.
Capital expenditure
Gross capital expenditure (excluding business combinations and
right-of-use  assets) totaled EUR 112 million (EUR 97 million) in
2022, of which maintenance investments amounted to EUR 37
million (EUR 39 million).
Acquisitions and disposals
Acquisitions
On March 1, 2022, Valmet announced the acquisition of North
American-based Coldwater Seals, Inc., a global provider of
consumables and services to the pulp and paper industry.
Coldwater operates manufacturing facilities in the United States
and Sweden. It manufactures and supplies paper process parts,
including suction roll seal strips, ceramics, plastics, doctoring
products and other specialty products. Coldwater is the global
market leader for suction roll seals and plastic dewatering
elements. In the last twelve months preceding the acquisition,
the company had net sales of approximately EUR 15 million. The
value of the acquisition was not disclosed. The acquired
operations employ about 60 people. Coldwater operates globally
and has Technical Service Representatives in more than 70
countries.
Disposals
Valmet made no disposals in 2022.
Merger with Neles
On July 2, 2021, Valmet announced that the Boards of Directors
of Valmet Oyj and Neles Corporation had signed a combination
agreement and a merger plan to combine the two companies
through a merger. Both companies held an Extraordinary
General Meeting on September 22, 2021, and both EGMs
approved the merger. Valmet and Neles had received all
competition approvals for the merger of Neles into Valmet on
March 21, 2022. Valmet’s Annual General Meeting on March 22,
2022, resolved to pay a dividend of EUR 1.20 per share and the
Neles Annual General Meeting on March 22, 2022, resolved to
pay a dividend of EUR 0.266 per share in accordance with the
combination agreement. In addition, Neles’ Board of Directors
decided on March 22, 2022, on an extra distribution of funds in
total of EUR 2.00 per share in accordance with the combination
agreement. The dividends and Neles' extra distribution of funds
of EUR 2.00 per share were executed on March 31, 2022. The
merger of Valmet and Neles was registered with the Finnish
Trade Register on April 1, 2022.
On July 2, 2021, Valmet entered into EUR 350 million term
loan facilities agreement with Danske Bank A/S and Nordea Bank
Abp. The syndication of the term loan facilities was closed on
October 20, 2021. The loan was used for refinancing existing
indebtedness of Valmet and Neles in connection with the
merger. EUR 215 million (originally 301 million) bridge facility
agreement, originally entered into by Neles, was transferred to
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
9
Valmet in connection with the completion of the merger. The
bridge loan facility was used for financing of the extra
distribution to shareholders of Neles. The outstanding bridge
loan facility was repaid in December 2022.
On March 22, 2022, the Boards of Directors of Valmet and
Neles approved a loan agreement between the companies
concerning the part of the extra distribution of funds of EUR 2.00
per share payable to Valmet. According to the loan agreement,
the part of the extra distribution payable to Valmet as a
shareholder of Neles was not paid in cash to Valmet in
connection with payment of the extra distribution to other
shareholders of Neles, but the amount payable to Valmet was
recorded as debt owed by Neles to Valmet.
Valmet and Neles were separate listed companies prior to the
merger. On April 1, 2022, Valmet announced that the statutory
merger of Neles Corporation into Valmet had been registered
and the combination of Valmet’s and Neles’ business operations
had been completed. Neles is consolidated into Valmet as of
April 1, 2022, and forms Valmet’s fifth business line called Flow
Control. After the merger, Valmet’s business lines are Services,
Flow Control, Automation Systems, Paper, and Pulp and Energy.
Automation Systems business line was previously called
Automation.
The final Shareholders’ Meeting of Neles was held on June 22,
2022, in Vantaa. The Shareholders’ Meeting adopted the final
accounts of Neles in accordance with Chapter 16, Section 17 of
the Finnish Companies Act, consisting of the financial statements
and annual report for the financial period January 1, 2022–March
31, 2022. The Shareholders’ Meeting also resolved on
discharging the members of the Board of Directors and the
President and CEO of Neles from liability.
Research and development
Valmet’s research and development (R&D) expenses in 2022
amounted to EUR 95 million, i.e. 1.9 percent of net sales (EUR
82 million and 2.1%). Research and development work is carried
out predominantly in Finland and Sweden, within the business
lines’ R&D organizations and pilot facilities. In addition, research
and development takes place within a network of customers,
suppliers, research institutes and universities. In the end of
2022, R&D employed 471 people (457 people).
Valmet’s R&D work is based on customers’ needs, such as
improving production and resource efficiency, maximizing the
value of raw materials, providing new revenue streams, and
developing new innovations and technologies.
Valmet develops competitive, leading production and
automation technologies and services. To enhance raw material,
water and energy efficiency in its customers’ production
processes, Valmet combines digitalization, process technology,
flow control, automation systems and services. Valmet also
develops solutions for replacing fossil materials with renewable
ones and for producing new high-value end products.
Personnel
As at Dec 31,
Personnel by business line
2022
2021
Change
Services
6,307
5,958
6%
Automation
4,842
1,986
>100%
Flow Control
2,792
Automation Systems
2,050
1,986
3%
Process Technologies
5,647
5,654
0%
Pulp and Energy
1,892
1,946
-3%
Paper
3,755
3,708
1%
Other
752
648
16%
Total
17,548
14,246
23%
As at Dec 31,
Personnel by area
2022
2021
Change
North America
2,040
1,500
36%
South America
833
604
38%
EMEA
10,787
9,296
16%
China
2,323
1,911
22%
Asia-Pacific
1,565
935
67%
Total
17,548
14,246
23%
During 2022, Valmet employed an average of 16,554 (14,163)
people. The number of personnel at the end of December was
17,548 (14,246). Personnel expenses totaled EUR 1,171 million
(EUR 948 million) in 2022, of which wages, salaries and
remuneration amounted to EUR 920 million (EUR 750 million).
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
10
Changes in Valmet’s Executive team
Simo Sääskilahti (M.Sc. Eng., M.Sc. Econ.), started as Business
Line President, Flow Control, and member of Valmet's Executive
Team on April 1, 2022. Sääskilahti held the position of interim
President and CEO of Neles in January–March 2022. Prior to that
he was CFO of Neles. Valmet announced Sääskilahti's
appointment on October 26, 2021.
On April 11, 2022, Valmet announced that Kari Saarinen has
resigned from his position as CFO of Valmet. The employment
relationship ended in accordance with Saarinen’s executive
agreement on October 31, 2022, while his working obligation
ended at the end of April.
On April 27, 2022, Valmet announced that Katri Hokkanen
(M.Sc. Econ.) has been appointed interim CFO at Valmet as of
May 1, 2022. She reports to President and CEO Pasi Laine.
Hokkanen joined Valmet in 2006 and held the position of Vice
President, Finance in Valmet’s Pulp and Energy business line
prior to being appointed interim CFO. Earlier she has led the
finance operations in Valmet’s Asia-Pacific Area organization and
in the EMEA services business.
On July 27, 2022, Valmet announced that Katri Hokkanen has
been appointed CFO at Valmet as of August 1, 2022.
On September 8, 2022, Valmet announced that Sami Riekkola
(M.Sc. Eng.) has been appointed Business Line President, Pulp
and Energy, at Valmet as of October 1, 2022. Since 2018,
Riekkola held the position of Business Line President,
Automation Systems, at Valmet. Before this, he worked in
various automation positions at Valmet in Europe and Asia.
Riekkola will continue as a member of Valmet's Executive Team
reporting to President and CEO Pasi Laine. Bertel Karlstedt, who
was President of Valmet's Pulp and Energy business line until
September 30, 2022, will concentrate on leading ongoing, large
customer delivery projects within the Pulp and Energy business
line supporting the development of long-term customer
relationships as Senior Vice President reporting to Sami
Riekkola.
On October 31, 2022, Valmet announced that Emilia Torttila-
Miettinen (M.Sc. Eng.) has been appointed Business Line
President, Automation Systems at Valmet as of December 1,
2022. She became a member of Valmet’s Executive Team and
reports to President and CEO Pasi Laine. Torttila-Miettinen began
her career at Valmet in 2003 and her latest position was Vice
President, Operations of the Automation Systems business line.
During her career, she has gained wide experience in Valmet’s
automation business by working in different management
positions in automation services in 2014–2020 and in product
management and engineering positions in 2004–2014.
Russia's invasion of Ukraine and sanctions on
Russia
Due to Russia's invasion of Ukraine, Valmet reviewed key
contractual obligations, project schedules, and identified risks for
projects that are delivered to Russia. Based on the review,
Valmet identified projects that it estimates no longer to meet the
criteria of a customer contract for revenue recognition purposes,
and consequently made a reversal of approximately EUR 80
million to its order backlog during 2022.
On June 3, 2022, Valmet announced that it has initiated
employee reductions, which will result in a 50 percent reduction
in the number of employees in Russia in the first implementation
phase. A second phase was implemented in autumn and resulted
in further employee reductions and the closure of one legal
entity. Consequently, Valmet recorded an expense of
approximately EUR 20 million during 2022 for estimated
restructuring costs, asset impairments and other exceptional
items triggered by Valmet's decision to withdraw from Russia.
These costs have been reported in cost of sales, in selling,
general and administrative expenses and in other operating
expenses, and have been reported as items affecting
comparability. Therefore, they do not impact Comparable EBITA.
At the end of 2022, Valmet had a total of approximately 30
employees in Russia, working primarily in administration,
engineering and maintenance. Valmet does not have production
in Russia. Approximately 2 percent of Valmet's net sales came
from its Russian operations in 2021.
Valmet will withdraw from Russia completely and will continue
to implement the withdrawal in stages as the review of
implementation options is fully completed. Valmet complies with
all sanctions and export regulations impacting business with
Russia and Belarus and monitors the development actively.
Organizational changes
Valmet announced on May 23, 2022, that it is initiating
personnel negotiations on potential temporary layoffs to adjust
production capacity to match the reduced workload at the valve
factory in Helsinki. The war in Ukraine and the intensified
COVID-19 restrictions in China had reduced the orders at the
valve factory. The exceptional situation has particularly impacted
the factory’s oil and gas projects. The impact of the COVID-19
pandemic in China also continued to cause challenges related to
component availability and logistics.
The employees within the scope of the negotiations were those
in the Flow Control business line’s valve production and related
operations in Helsinki, excluding the positioner production unit.
The negotiations involved around 340 employees. The layoffs
were temporary and lasted a maximum of 90 days.
Fire at the Rautpohja site in Jyväskylä, Finland
A fire broke out at Valmet’s Rautpohja factory site in Jyväskylä,
Finland, on May 7, 2022. The fire, which started at a workshop
during a roll test, caused damages to parts of roll and headbox
manufacturing and preassembly. Operations resumed with some
special arrangements, like transferring some of the production to
temporary locations. Full production capacity has been reached.
Valmet maintains property damage and business interruption
insurance and expects to recover fire-related losses through
insurance.
Impacts of the COVID-19 pandemic on Valmet
The COVID-19 pandemic impacted Valmet’s operations during
2022. Travel restrictions in Asia and the lockdown in China
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
11
impacted Valmet's business environment especially during the
first half of the year. Services, Flow Control and Automation
Systems business lines were affected by reduced component
availability and longer delivery times of certain components.
The Pulp and Energy, and Paper business lines have managed
the challenges caused by COVID-19 well, and apart from cost
inflation, the pandemic has not caused major impacts on the
Process Technologies business. The organization has performed
well under the new circumstances and found new ways to
operate, which can be utilized to improve Valmet's and
customers' processes also after the pandemic.
Strategic goals and their implementation
On June 23, 2022, Valmet announced that it adjusts its strategy
to include Flow Control and aligns its financial targets with its
financial reporting structure.
Valmet’s strategy is: Valmet develops and supplies competitive
and reliable process technologies, services and automation to
the pulp, paper and energy industries. Our automation business
covers a wide base of global process industries. We are
committed to moving our customers’ performance forward with
our unique offering and way to serve.
Valmet's mission is converting renewable resources into
sustainable results. Valmet’s vision is to become the global
champion in serving its customers and in moving the industries
forward.
Valmet seeks to achieve its strategic targets by continuous
improvement and renewal. Valmet has the following Must-Win
initiatives: ‘Customer excellence’, ‘Leader in technology and
innovation’, ‘Excellence in processes’ and ‘Winning team’, as well
as selected Business Accelerators.
Valmet’s product and services offering consists of process
technologies that increase the value of the customers’ end
products, automation systems and flow control solutions,
productivity enhancing services, plant upgrades and rebuilds,
new cost-efficient equipment and solutions for optimizing raw
material and energy usage.
To improve operational excellence, Valmet is in the process of
renewing its ERP system. The aim is to improve Valmet’s
operational capability through process harmonization and
standardization, and through renewal and modernization of the
ERP platform.
Valmet has an annual strategy process, where, among others,
Valmet’s strategy, Must-Wins and financial targets are reviewed.
Due to the completion of the merger with Neles, on April 1,
2022, Valmet confirmed its new financial targets that were
preliminarily announced on July 2, 2021. Valmet’s new target for
Comparable EBITA margin is 12–14 percent (previously 10–
12%). The new target for Comparable return on capital
employed (ROCE) before taxes is at least 15 percent (previously
at least 20%). Valmet’s other financial targets remained
unchanged.
Valmet's financial targets are the following:
Financial targets
Net sales for Services and Automation segments to grow over two
times the market growth
Net sales for Process Technologies segment to exceed market growth
Comparable EBITA: 12–14%
Comparable return on capital employed (ROCE) before taxes: at least
15%
Dividend payout at least 50% of net profit
Continued focus on improving profitability
Valmet continues to focus on improving profitability through
various actions in e.g., sales process management, project
management and project execution, in procurement and quality,
as well as in technology and R&D.
To improve sales process management, Valmet is focusing on
key account management and analyzing the customers’ share of
wallet. Valmet is targeting market share improvement at key
customers and adding focus on sales training. Valmet has also
launched ‘Valmet's Way to Serve’ services concept – a shift
towards more unified and customer-oriented services.
Valmet is continuously improving its project management and
project execution by training personnel and implementing a
Valmet-wide project execution model. By focusing on improving
project management and execution, Valmet is targeting
continuous improvement of gross profit.
Valmet has set a long-term savings target for procurement. In
order to decrease procurement costs, Valmet is focusing on
design-to-cost and adding supplier involvement through supplier
relationship management. Valmet has also set a target for
quality cost savings and is adding focus on root cause analysis of
quality deviations. Furthermore, Valmet is continuing to adopt
the Lean principles and methodology.
Valmet is constantly focusing on new technologies and R&D to
improve product cost competitiveness and performance. The
renewal of Valmet’s ERP system will increase efficiency once
implemented.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
12
Disclosure of non-financial information
Valmet reports its non-financial information in accordance with
the Non-Financial Reporting Directive (NFRD), the Finnish
Accounting Act, the European Union (EU) Taxonomy Regulation,
and the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations.
Business model and value creation
Valmet is a leading global developer and supplier of process
technologies, automation and services for the pulp, paper, and
energy industries. With our automation systems and flow control
solutions we serve an even wider base of process industries.
Valmet’s mission is to convert renewable resources into
sustainable results.
Our strong technology offering includes pulp mills, tissue,
board and paper production lines, air emission control solutions,
and power plants for bioenergy production. Our services,
automation systems and flow control solutions improve
production performance and increase the environmental
efficiency and cost-effectiveness of Valmet’s customers’
production processes, while ensuring safe and reliable
operations. Our product and service portfolio consists of
productivity-enhancing services, plant upgrades and rebuilds,
cost-effective new equipment and solutions for optimizing
energy and raw material use, and technologies increasing the
value of our customers' end products. Valmet’s technologies
maximize the value of renewable raw materials, while
minimizing their environmental impact.
Valmet’s technologies and services enable customers to apply
and increase circularity in their operations to produce end
products with less energy and water, and significantly reduced
emissions, chemicals, and raw materials, and to further improve
flexibility in fuel source selection to replace fossil fuels with
renewable ones. Valmet sees the transition to a carbon neutral
economy as an opportunity and believes technology plays a key
role in mitigating the impacts of climate change. Valmet is
enabling the transition of the pulp and paper industry to carbon
neutrality.
In Valmet’s own operations, more efficient processes, energy
efficiency investments and purchasing CO2-free electricity and
district heat enable us to reduce CO2 emissions significantly, as
well as the use of natural resources. In our own operations, we
are constantly improving our processes to increase resource
efficiency by reducing the use of water, chemicals and various
waste streams and we aim to increase the use of recycled
materials, such as recycled steel in our technology offering.
Valmet strives to develop the transparency and traceability of
its entire value chain, from the sourcing of raw materials to the
recycling of its products. Valmet mainly purchases raw materials
(metals, minerals, and polymers), metal-based components,
energy and services from 30,000 suppliers in nearly 60
countries.
Valmet works closely with its customers throughout its key
processes – from product development to the commercialization
of new solutions. Valmet has the financial strength to invest in
innovation development and growth. In 2022, Valmet launched a
new R&D and innovation program called Beyond Circularity,
which improves Valmet’s readiness to support the green
transition in Valmet’s customer industries based on the
company’s technology vision 2030. The program aims to further
strengthen Valmet’s R&D work to develop process technologies,
automation, and services for utilizing renewable materials and
recycled waste and side streams. The program also allows
Valmet to further improve the energy efficiency of its process
technologies and enables a shift to the use of fossil-free energy
in its pulp and paper industry customers’ production processes.
In addition to value for its owners, Valmet creates economic
and social value as an employer, taxpayer, and customer for its
suppliers. Valmet provides employment and business
opportunities to a wide range of stakeholders and indirectly
builds wealth in local societies.
Sustainability, including climate-related matters, is at the core
of Valmet's business strategy, operations, and value creation.
Sustainability is integrated into our strategy and main processes
through Valmet´s comprehensive Sustainability360° Agenda,
which covers Valmet’s entire value chain including the supply
chain, Valmet’s own operations and the use phase of Valmet's
technologies.
One main material topic in Valmet's Sustainability360° Agenda
is our Climate Program, which supports the Paris Climate
Agreement’s 1.5-degree pathway and the United Nations
Sustainable Development Goals. Our Climate Program's CO2
emissions reduction targets have been approved by the Science
Based Targets initiative.
Materiality and management
Valmet’s Sustainability360° Agenda covers the most material
sustainability topics for Valmet. In 2022, the Agenda was
renewed with new material topics grouped around three focus
areas: Environment; Social; and Governance. Each focus area
has three main material topics with concrete targets and action
plans integrated into the company’s annual planning process as
a part of the strategy implementation. Valmet’s
Sustainability360° Agenda, its related targets, and all supporting
policies are owned, driven and monitored by Valmet’s Executive
Team.
Valmet’s Climate Program steering team drives and follows the
progress of the program towards the targets providing status
updates and guidance on implementation quarterly. The
progress of Valmet’s Climate Program is also monitored by the
Executive Team.
All Valmet’s corporate functions, business lines and areas are
responsible for ensuring that Groupwide initiatives are
implemented to meet Valmet’s sustainability goals. Valmet has
tied selected sustainability topics such as health, safety and
quality, as well as sustainable supply chain KPIs, to
remuneration. In 2022, Valmet's Board of Directors linked ESG
targets to Valmet’s Executive Team’s long-term share-based
incentive plan. The potential reward for the 2022–2024
performance period is based on an ESG Index with predefined
targets linked to implementing Valmet’s Climate Program and
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
13
Sustainability Agenda, as well as targets supporting the
company’s long-term strategic and financial development.
Valmet has a systematic company-wide risk management
process for regularly assessing the probability and impact of
risks and opportunities, in which sustainability, including
climate-related matters, is integrated. Valmet has several
Groupwide policies to mitigate these risks and promote
opportunities. The basis of Valmet’s operations is its Code of
Conduct, which creates a uniform ethical foundation for all our
business transactions and work assignments globally. It also
describes our approach to sustainable business operations,
people and society and environmental issues. Valmet strives for
globally consistent and transparent management practices to
ensure all its stakeholders can reliably assess the company’s
operations and development.
Valmet has a global supplier sustainability management
process which is fully integrated into its procurement processes
to assess potential risks related to human and labor rights,
ethical business practices, climate and environmental
management, and health and safety. All Valmet’s suppliers are
assessed for sustainability risks and required to commit to the
minimum requirements set by the Sustainable Supply Chain
Policy. Compliance is assessed through potential self-
assessments and audits.
Valmet’s global management system (GMS) supports an
efficient process-oriented way of working toward the satisfaction
of customer and other stakeholder expectations. Valmet’s global
management system provides a common platform for quality
and HSE management in all operations. Our main operations are
certified in accordance with the ISO 14001:2015
(environmental), ISO 45001:2018 (health and safety) and ISO
9001: 2015 (quality) management standards.
Material topics
Valmet has fully integrated environmental, social and employee
matters, respect for human rights, and anti-corruption and
bribery matters into Valmet’s Sustainability360° Agenda.
Environmental and climate-related matters
Valmet has estimated that around 4 percent of its environmental
impact arises from its supply chain, and around 1 percent from
its own operations. Most of Valmet’s value chain’s environmental
impact, i.e., 95 percent originates in the customer use of its
technologies.
Valmet is actively developing its offering and its new products
and services to reduce CO2 emissions, water, chemical and raw
material consumption, and waste, while increasing energy
efficiency. Valmet monitors the market demand for
environmentally efficient and carbon neutral technologies and
aims to maintain the orders received from new products and
services above 25 percent of total orders received annually.
Valmet has also set climate-related targets across the value
chain as part of its Climate Program. Today, Valmet already
provides bioenergy self-sufficient chemical pulp mills and
enables carbon neutral heat and power production with our
current biomass-based energy solution offering. By 2030,
Valmet’s target is to enable carbon neutral pulp and paper
production for all its customers by developing new process
technologies and to improve the energy efficiency of
our current offering by 20 percent. Valmet also targets a
reduction of 20 percent in CO2 emissions in its supply chain and
80 percent in its own operations by 2030. As part of its own
operations’ environmental program, Valmet has also defined
targets for reducing energy and water consumption and for
increasing the share of recycled or reused waste.
Valmet also has a comprehensive climate-related e-learning
course, available for its employees and suppliers through a
supplier portal.
Valmet has a stand-alone budget and action plan to improve
environmental efficiency at its production facilities. The company
also continuously develops the resource and energy efficiency of
its technology and solutions, based on R&D action plans and
through the Beyond Circularity program.
Social and employment-related matters
Valmet has more than 17,500 employees in over 40 countries
around the world. Valmet values active dialogue and teamwork
as an important part of its success and emphasizes respectful
behavior and a safe, healthy and well-managed working
environment in all locations. The company sets clear
expectations for managers and employees through its manager
and employee role descriptions, which focus on driving
performance, building engagement, supporting development,
and living the company's values. As an employer, Valmet is
committed to promoting equal opportunities for everyone and
respecting its employees’ right to freedom of association and
collective bargaining.
Valmet strives to protect the health, safety and wellbeing of its
own people and partners. We invest in a positive safety culture
collaborating with customers and partners and constantly
improving our processes and practices towards our common goal
of zero harm.
Valmet participates in public discussions of its operating
environment and regulations. Valmet builds trust and reputation
by operating both sustainably and profitably.
Respect for human rights
As a global process technology, automation and services
supplier, Valmet operates in a very multicultural environment.
Valmet recognizes its responsibility to respect human rights and
requires its business partners to do the same.
Valmet is committed to international frameworks related to
human rights, such as the UN Guiding Principles on Business and
Human Rights. Valmet’s commitment to respect human rights is
laid out in its Human Rights Statement.
Valmet has a comprehensive due diligence framework to
monitor and manage human rights in its own operations and
supply chain. Valmet has integrated human rights into company
policies and related processes to ensure human rights are
respected and promoted in all our operations.  Valmet also
provides human rights training to its employees through an e-
learning course that is globally available to all Valmeteers.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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Anti-corruption and bribery
Valmet’s Code of Conduct requires Valmet and its employees to
act with honesty and integrity. It sets Valmet’s commitment of
zero tolerance for corruption and bribery. It also defines
Valmet’s expectation that all its business partners fully comply
with applicable anti-bribery laws and regulations. Valmet’s Code
of Conduct is complemented by Valmet’s Sustainable Supply
Chain Policy, which also sets Valmet’s requirements for its
suppliers regarding business ethics and legal compliance,
including refusing to participate in any form of corruption,
bribery or money laundering. Valmet also has a global Anti-
Corruption Policy and other internal policies and guidelines
containing the rules, which ensure Valmet’s business or
employees are not involved in any form of corruption or bribery.
Valmet has a Code of Conduct and Anti-bribery Compliance e-
learning course for employees. Valmet also arranges regular
training for targeted groups on the Code of Conduct, anti-
corruption, and other ethics and compliance topics to enforce the
principles and rules set by the related policies and guidelines.
Non-financial indicators
CO2 emissions from energy
consumption in own operations1
Orders received from new
products and services2
Number of internal
audits performed
Sponsorships and
donations
     
New direct suppliers
screened over
sustainability3
Employees completed
Valmet's Code of Conduct
training4
Employees covered by
collective bargaining
agreements
Workforce represented in
formal management-worker
health and safety committees
                                   
1Direct emissions (Scope 1) from used fuels and indirect emissions (Scope 2, market based) from purchased electricity, district heat and steam in own operations. Valmet
merged with Neles on April 1, 2022. Data from the new Flow Control Business Line are included in the 2022 data from the merger date. Please check GRI Supplement 2022 for
the CO2 emission factors used.
2Valmet's new products and services reduce CO2 emissions, water and raw material consumption, and waste, while increasing energy efficiency. Valmet monitors the market
demand for more environmentally efficient technologies by monitoring the share of orders received from new products and services. Valmet’s target in 2022 was that at least
25 percent of orders received should come from new products and services.
3Supplier data from the new Flow Control Business Line is not included in the 2022 figures.
4Historical data from 2020 unavailable due to a system change. All active employees, including blue-collar workers, trained in the Code of Conduct. External workforce excluded.
Data from the 2022 acquisitions are included in the reported figure.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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Breakdown of employees by contract type, employment type, region and gender
Number of employees by employment contract and gender1
Female
Male
Total
2022
2021
2022
2021
2022
2021
Permanent
3,185
2,529
12,595
10,344
15,781
12,874
Temporary
508
414
1,259
958
1,767
1,372
Total
3,693
2,943
13,854
11,302
17,548
14,246
Number of permanent employees by employment type and gender1
Female
Male
Total
2022
2021
2022
2021
2022
2021
Full-time
3,066
2,427
12,441
10,227
15,508
12,655
Part-time
119
102
154
117
273
219
Total
3,185
2,529
12,595
10,344
15,781
12,874
Workforce by geography and gender1
Female
Male
Total
2022
2021
2022
2021
2022
2021
North America
338
204
1,701
1,296
2,040
1,500
South America
163
118
670
486
833
604
EMEA
2,443
2,068
8,344
7,227
10,787
9,296
China
551
442
1,772
1,469
2,323
1,911
Asia-Pacific
198
111
1,367
824
1,565
935
Total
3,693
2,943
13,854
11,302
17,548
14,246
Workforce by region and employee contract
Regular 2022
Fixed term 2022
Total 2022
North America
2,039
1
2,040
South America
764
69
833
EMEA
10,073
714
10,787
China
1,360
963
2,323
Asia-Pacific
1,545
20
1,565
Total
15,781
1,767
17,548
Lost time incident frequency, total recordable incident frequency, number of fatalities and absentee rate, own personnel
2022
2021
LTIF2
1.6
1.4
TRIF3
3.2
3.1
Fatalities
0
0
Absentee rate
2.9%
2.6%
Lost time incident frequency, total recordable incident frequency and number of fatalities, external workers
2022
2021
LTIF2
2.3
3.1
TRIF3
4.7
6.8
Fatalities
2
1
1The gender category includes the options Female, Male, Not Declared. In 2022, the number of individuals in the “Not Declared” category was not large enough to be included in
a separate column.
2LTIF reflects the number of injuries resulting in an absence of at least one workday per million hours worked.
3LTIF + medical treatment and restricted work cases. 2021 TRIF for external workers restated due to one incident investigated during 2022.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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Valmet’s management approach to non-financial impacts
ENVIRONMENTAL AND CLIMATE-RELATED MATTERS
SOCIAL AND EMPLOYMENT-RELATED MATTERS
Policies and
standards
International frameworks
and Valmet's policies
covering all topics:
UN Global Compact
UN Sustainable Development Goals
United Nations Universal Declaration of Human Rights
UN Guiding Principles on Business and Human Rights
Declaration on Fundamental Principles and Rights at Work of the International Labour Organization (ILO)
OECD’s Guidelines for Multinational Enterprises
approach to managing HSE performance in its own operations and in
customer industries
• Instructions for sustainable and responsible research, product
development, and design: Support the implementation of Valmet’s
HSE policy
Describes the management approach and provides instructions for
compliance with regulatory requirements regarding the prohibition
and reporting of materials found in Valmet’s products
approach to managing HSE performance in its own operations and
in customer industries
Human Resources Policy: Framework for the management of the
human resources function, which is committed to developing an
engaged and performance-driven community and continuously
driving the global development of Valmet employees’ capabilities
Equal Opportunity and Diversity Policy: Defines Valmet's approach
to promoting equal opportunities for all employees
Minimum Safety Standards: Defines minimum requirements for
safety at work for specific high-risk activities
Due diligence
processes
The HSE event reporting and management system is used to monitor
and prevent HSE-related incidents and hazards
Compliance with HSE-related laws and regulations is ensured by
complying with Valmet’s related processes
Internal and external audits executed globally to evaluate
compliance with internal, legal and other HSE requirements and to
correct non-conformities
The HSE event reporting and management system is used to
monitor and prevent HSE-related incidents and hazards
Compliance with laws and regulations is ensured by complying
with Valmet’s related processes
Internal and external audits executed globally to evaluate
compliance with internal, legal and other HSE requirements, and
to correct non-conformities
Risks and risk
management
Risks:
Non-compliance with environmental regulations may result in fines,
creating reputational and business risks
Climate-related regulation and initiatives may change the availability
and use of biomass and increase the cost of raw materials and
energy, result in new taxes and tariffs, and change our stakeholder’s
attitudes, which could impact Valmet’s and its customers’ operations
and business environments
EU Taxonomy regulation may diminish investors interest and
Valmet’s access to capital and increase the cost of capital in the long
term if Valmet’s technologies and services are not considered
environmentally sustainable
Climate-related physical risks; extreme weather events and
variability in weather patterns, water shortages and scarcity of raw
materials may cause production interruptions throughout Valmet’s
value chain
Risks related to Valmet’s suppliers may create significant
reputational or business risks
Risk management:
ISO 14001:2015 environmental management systems in all
operations
Risk management of environmental and climate-related matters is
integrated into all activities to ensure proactive risk identification and
mitigation
Climate scenario analysis to support strategy and risk management
Global supplier sustainability management process, including risk
assessments and audits
Risks:
Valmet’s own employees' and partners' health and safety risks are
related to the pandemic, work-related illnesses, injuries and work-
life integration
Non-compliance with occupational health and safety regulations
may result in fines, creating reputational and business risks
Retention and engagement of key employees and a slowing down
of the resourcing process due to the hot labor market and talent
shortage
Risks related to Valmet's suppliers may create significant
reputational or business risks
Risk management:
ISO 45001:2018 health and safety management systems in all
operations
HSE event management system
HSE committees covering all personnel
Clear Covid management principles in all locations, production
facilities and on project sites
Development of global training portfolio and ensuring necessary
competence is in place across regions
Development of engagement and retention through employee
survey action execution
Debottlenecking of resourcing process
Global supplier sustainability management process, including risk
assessments and audits
Outcomes of
policies and 
due diligence
processes
New products and services that meet environmental requirements
and help customers produce sustainable products which require less
water and energy, and fewer raw materials, enable the use of
renewable resources producing less waste and fewer emissions
Supplier sustainability audits and corrective actions in accordance
with Valmet’s global supplier sustainability risk management process
CO2 reduction and other environmental targets for renewable energy,
energy efficiency, water consumption and waste management
Climate training, including e-learning
Healthy and safe workplaces for Valmet’s own employees and
partners
Operations free of life-changing incidents, reduction in overall
incident frequencies
Training programs developed to enhance skills
Supplier sustainability audits and corrective actions in accordance
with Valmet’s global supplier sustainability risk management
process
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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RESPECT FOR HUMAN RIGHTS
ANTI-CORRUPTION AND BRIBERY
Policies and
standards
International frameworks
and Valmet's policies
covering all topics:
Equal Opportunity and Diversity Policy: Defines Valmet’s approach to
promoting equal opportunities for all employees
zero tolerance of discrimination or harassment in any form
Anti-Corruption Policy: Defines Valmet's zero tolerance approach
to bribery and corruption in more detail
Compliance reporting guideline: Defines how Valmet employees
can voice their concerns about potential violations of the Code of
Conduct, Anti-Corruption Policy, unethical behavior  and other
misconduct
Approval guideline for Agency agreements and Agent approval
process: Describes Valmet’s due diligence process and
requirements for agent approval
Due diligence
processes
Human rights due diligence framework executed through long-term
action plans, and based on UN Guiding Principles for Business and
Human Rights
External third-party supplier audits executed globally to evaluate
compliance and correct non-conformities
Risk management evaluations help Valmet find the best ways to
manage risks and train the unit’s personnel to use existing tools
and procedures
Internal audits executed globally to evaluate compliance with
anti-corruption and bribery-related rules and implement
necessary corrective actions
External third-party supplier audits executed globally to evaluate
compliance and correct non-conformities
Risks and risk
management
Risks:
Potential violations of human rights may impact Valmet’s reputation
and thus its financial position
Risk management:
Valmet’s human rights due diligence framework for identifying and
mitigating potential negative human rights impacts and risks
Global supplier sustainability management process, including risk
assessments and audits
Risks:
Unethical business practices may impact Valmet’s reputation and
thus its financial position
Risk management:
Internal risk management audits
Anti-Corruption Policy works as a tool to set the tone for
preventive misconduct and mitigate potential risks
Global supplier sustainability management process, including risk
assessments and audits
Outcomes of
policies and 
due diligence
processes
Reporting system in place for violations of Code of Conduct
Continuous human rights training to increase awareness of potential
negative impacts
Location-level social impact assessment and improvement actions, in
accordance with Valmet’s human rights due diligence framework
Supplier sustainability audits and corrective actions in accordance
with Valmet’s global supplier sustainability risk management process
Reporting system in place for violations of Code of Conduct,
including anti-corruption and bribery and other misconduct
Anti-corruption and bribery training, including e-learning
Supplier sustainability audits and corrective actions in accordance
with Valmet’s global supplier sustainability management process
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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EU taxonomy for sustainable finance
The European Union Sustainable Finance Taxonomy Regulation
(the EU taxonomy) requires large companies subject to the Non-
Financial Reporting Directive (NFRD) to disclose the extent to
which their economic activities have a substantial positive
environmental impact. The EU taxonomy is intended to
encourage financial markets to invest and finance more
sustainably. It sets the criteria for activities that the EU has
classified as environmentally sustainable. Activities that are
described in the taxonomy are referred to as eligible activities.
Eligible activities that also meet set criteria are referred to as
aligned activities in the taxonomy.
The currently available criteria allow companies to demonstrate
their contribution to two environmental objectives: climate
change mitigation and climate change adaptation. Valmet’s
economic activities contribute to both, but more substantially to
climate change mitigation. It is expected that the EU
Taxonomy’s remaining environmental objectives will increase the
eligibility of Valmet once the related activities and technical
criteria are published and reported.
In 2022, Valmet’s operations were reviewed against the
Taxonomy activities to reassess eligibility based on the eligible
economic activities listed in Annexes I and II of the delegated
regulation, complementary regulations such as the Natural Gas
and Nuclear Act, and FAQ documents published in 2022 by the
European Commission to expand and clarify the content of the
Taxonomy regulation.
In 2022, Valmet’s approach to identifying and reporting
sustainable economic activities consisted of:
1.Eligibility assessment: mapping of economic activities to
taxonomy activity descriptions and NACE codes.
2.Substantial contribution assessment: screening of activities
against technical screening criteria.
3.Do no significant harm (DNSH) assessment: screening of
Valmet’s procedures to ensure that our operations do not
cause significant harm to relevant environmental objectives.
Screening conducted at an appropriate level for each
environmental objective. Valmet's Group-level approach is in
line with the recommendations of the Task Force on Climate-
climate risks as part of its Groupwide risk management
system.
4.Minimum safeguards assessment: A review of Valmet’s
corporate social safeguards to ensure that our operating
instructions, company policies, and management system are
compliant with the UN Guiding Principles on Business and
Human Rights and the ILO Declaration on Fundamental
Principles and Rights at Work.
As a result of the 2022 assessment, the following economic
activities were identified as taxonomy eligible for Valmet:
3.1 Manufacture of renewable energy technologies
3.2 Manufacture of equipment for the production and use of
hydrogen
3.6 Manufacture of other low-carbon technologies
As a result of the re-assessment of Valmet’s 2021 eligibility,
related to the clarifying guidance by the EU in 2022, Valmet’s
taxonomy-eligibility categorized in activity 3.6 Manufacturing of
other low carbon technologies and in 8.2 Data-driven solutions
for GHG emissions reductions, decreased significantly compared
to 2021. The predominant purpose of these two activities is GHG
emissions reductions. Valmet offers solutions for the carbon-
neutral production of pulp and energy, and enables the
transition to carbon neutral paper, board, and tissue processes
by 2030 at the latest. However, the predominant purpose of
most solutions previously classified as activity 3.6 or 8.2 is the
production of pulp and paper solutions, not GHG emission
reduction.
The EU taxonomy currently covers the economic activities of
40 percent of listed companies1 in sectors that are responsible
for 80 percent of direct greenhouse gas emissions in Europe2.
Valmet expects its eligibility to increase as the Taxonomy
evolves to include more sectors relevant to Valmet´s operations.
For now, Valmet's taxonomy-eligible and aligned economic
activities are conducted predominantly in the energy segments
while other core businesses, consisting of mainly process
technology and automation solutions and services for the pulp
and paper sector, are currently not described in the Taxonomy
Regulation. Valmet continues to develop taxonomy-related
reporting and complies with new guidance when it is published
by the EU.
Key performance indicators
Valmet has made some estimations in the calculation of the key
performance indicators (KPIs), net sales3, capital expenditure
(Capex), and operating expenditure (Opex), due to our
interpretation of the Taxonomy regulation. Double counting has
been avoided by classifying external revenue streams into
taxonomy-eligible economic activities only once. The shares of
eligible and aligned net sales have been used as key to calculate
eligible and aligned Opex and Capex.
Taxonomy net sales4 are calculated according to the EU
Taxonomy definition of turnover, and in line with IFRS 15 which
are included in Valmet’s total net sales presented in the Valmet’s
consolidated financial statements. It includes the external sales
of taxonomy eligible activities. Net sales have been calculated
separately in each business line for eligible and aligned
activities.
1 Share of domiciled companies in the EU with more than 500 employees active in economic sectors covered by the EU Taxonomy Climate Delegated Act. (Source: Bloomberg,
2021)
2 Source: Eurostat, 2021.
3 Valmet uses the term net sales in its financial statements while the EU Taxonomy Regulation refers to the term Turnover.
4 Consolidated financial statements, note 3. Revenue recognition.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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Taxonomy Capex5 is presented and measured in line with the
Capex presented in the Group’s financial statements. It consists
of purchases of property, plant and equipment, and intangible
assets. Leases and equity investments at fair value through
other comprehensive income have been excluded from the
amount. Capex associated with taxonomy-eligible activities has
been considered eligible. Plans to expand taxonomy-aligned
economic activities or plans to allow the activities to become
taxonomy-aligned, have not been separately taken into
consideration.
The Taxonomy regulation's definition of Opex relates to assets
and economic activities that generate taxonomy eligible net
sales. It consists of expenses relating directly to maintenance
and servicing of assets including e.g., facility improvements, and
research and development projects supporting the transition
towards a low carbon economy and achieving the Science Based
Targets that Valmet has set and which have been validated by
the SBTi. Valmet has applied a conservative interpretation of the
Taxonomy OpEx definition. Raw materials, and salaries of
employees performing repairs, maintenance, and services of
eligible fixed assets, are excluded.
The following tables present Valmet's 2022 Taxonomy KPIs
associated with Valmet’s taxonomy-eligible economic activities:
Turnover6
Substantial
contribution criteria
'Does Not Significantly Harm' criteria
Economic activities
NACE codes
Absolute
turnover
(EUR
million)
Proportion
of
turnover
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
proportion
of turnover,
2022
Enabling
activity
Transitional
activity
A. TAXONOMY-ELIGIBLE ACTIVITIES
Taxonomy-aligned activities (A.1)
3.1 Manufacture of renewable
energy technologies
C27, C28, M71,
F42.22
215
4%
100%
Yes
Yes
Yes
Yes
Yes
Yes
4%
E
Turnover (A.1)
215
4%
100%
4%
Eligible, but not aligned activities (A.2)
3.1 Manufacture of renewable
energy technologies
C27
10
%
100%
3.2 Manufacture of equipment
for the production and use of
hydrogen
C28
4
%
100%
3.6 Manufacture of other low
carbon technologies
C28, C33
11
%
100%
Turnover (A.2)
25
%
100%
%
Total (A)
240
5%
100%
5%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover (B)
4,834
95%
Total (A + B)
5,074
100%
Capex
Substantial
contribution criteria
'Does Not Significantly Harm' criteria
Economic activities
NACE codes
Absolute
Capex
(EUR
millions)
Proportion
of Capex
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
proportion
of Capex,
2022
Enabling
activity
Transitional
activity
A. TAXONOMY-ELIGIBLE ACTIVITIES
Taxonomy-aligned activities (A.1)
3.1 Manufacture of renewable
energy technologies
C27, C28, M71,
F42.22
2
2%
100%
Yes
Yes
Yes
Yes
Yes
Yes
2%
E
Capex (A.1)
2
2%
100%
2%
Eligible, but not aligned activities (A.2)
3.1 Manufacture of renewable
energy technologies
C27
0
%
100%
3.2 Manufacture of equipment
for the production and use of
hydrogen
C28
0
%
100%
3.6 Manufacture of other low
carbon technologies
C28, C33
0
%
100%
Capex (A.2)
0
%
100%
%
Total (A)
3
2%
100%
2%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex (B)
109
98%
Total (A + B)
112
100%
5 Consolidated financial statements, note 4. Intangible assets and property, plant and equipment.
6 Net Sales is used in other parts of Valmet's financial statements, while the EU Taxonomy Regulation uses the term Turnover.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
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Opex
Substantial
contribution criteria
'Does Not Significantly Harm' criteria
Economic activities
NACE codes
Absolute
Opex
(EUR
millions)
Proportion
of Opex
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
proportion
of Opex,
2022
Enabling
activity
Transitional
activity
A. TAXONOMY-ELIGIBLE ACTIVITIES
Taxonomy-aligned activities (A.1)
3.1 Manufacture of renewable
energy technologies
C27, C28, M71,
F42.22
6
2%
100%
Yes
Yes
Yes
Yes
Yes
Yes
2%
E
Opex (A.1)
6
2%
100%
2%
Eligible, but not aligned activities (A.2)
3.1 Manufacture of renewable
energy technologies
C27
0
%
100%
3.2 Manufacture of equipment
for the production and use of
hydrogen
C28
1
%
100%
3.6 Manufacture of other low
carbon technologies
C28, C33
0
%
100%
Opex (A.2)
1
%
100%
%
Total (A)
7
2%
100%
2%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Opex (B)
303
98%
Total (A + B)
310
100%
Tables are based on the templates for KPIs presented in Annex II of the Commission Delegated Regulation (EU) 2020/852. Templates have been modified to include only
reportable information, excluding e.g. columns for substantial contribution criteria of environmental objectives 3-6.
  VALMET | FINANCIAL STATEMENTS 2022 AND INFORMATION FOR INVESTORS | REPORT OF THE BOARD OF DIRECTORS
21
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