valmt-2022-12-31-en

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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
	• Health, Safety and Environment (HSE) Policy: Defines Valmet’s 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 • Guidance on hazardous substances and restricted materials: Describes the management approach and provides instructions for compliance with regulatory requirements regarding the prohibition and reporting of materials found in Valmet’s products		•Health, Safety and Environment (HSE) Policy: Defines Valmet’s 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


	RESPECT FOR HUMAN RIGHTS		ANTI-CORRUPTION AND BRIBERY
Policies and standards	International frameworks and Valmet's policies covering all topics:	•Valmet's Code of Conduct •Valmet's Human Rights Statement •Valmet's Sustainable Supply Chain Policy •ISO 9001:2015 Quality management system •ISO 14001:2015 Environmental management system •ISO 45001:2018 Occupational health and safety management system
	•Equal Opportunity and Diversity Policy: Defines Valmet’s approach to promoting equal opportunities for all employees •Non-Discrimination and Anti-Harassment Policy: Defines Valmet’s 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

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-

Related Financial Disclosures (TCFD), and Valmet assesses

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

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


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


Contents
Report of the Board of Directors 2022 ...........................	2
Financial indicators .............................................................	30
Formulas for calculation of indicators ..........................	31

Consolidated financial statements ..................................	32
Consolidated statement of income .................................	32
Consolidated statement of comprehensive income .....	33
Consolidated statement of financial position ................	34
Consolidated statement of cash flows ............................	36
Consolidated statement of changes in equity ...............	37
Notes to the consolidated financial statements ............	38

Parent company financial statements ...........................	92
Parent company statement of income, FAS ...................	92
Parent company statement of financial position, FAS	93
Parent company statement of cash flows, FAS .............	94
Notes to parent company financial statements ............	95
Signatures of Board of Directors’ report and financial statements ..............................................................................	108


Notes to the consolidated financial statements.........		38
1.	Basis of preparation........................................	38
2.	Reporting segments and geographic information..	40
3.	Revenue recognition.......................................	44
4.	Intangible assets and property, plant and equipment....................................................	47
5.	Leases..........................................................	52
6.	Net working capital........................................	54
7.	Inventories....................................................	55
8.	Financial assets and liabilities...........................	55
9.	Derivative financial instruments........................	60
10.	Financial income and expenses.........................	64
11.	Provisions.....................................................	64
12.	Other current liabilities...................................	66
13.	Personnel expenses and number of personnel......	66
14.	Share-based payments....................................	67
15.	Employee benefit obligations...........................	70
16.	Income taxes.................................................	74
17.	Equity..........................................................	77
18.	Selling, general and administrative expenses.......	78
19.	Other operating income and expenses................	78
20.	Business combinations....................................	79
21.	Financial risk management..............................	80
22.	Investments in associated companies.................	84
23.	Audit fees.....................................................	87
24.	Contingencies and commitments.......................	87
25.	Related party information................................	88
26.	Subsidiaries..................................................	89
27.	Events after the reporting period.......................	91
28.	New accounting standards...............................	91