Orders received increased in Services focus continues to be on profitability improvement

Orders received increased in Services focus continues to be on profitability improvement Interim Review, January March 215 April 29, 215 Pasi Laine, President and CEO Markku Honkasalo, CFO

Agenda Interim Review, January March 215 1 2 3 4 5 6 Q1/215 in brief Business lines development Financial development Guidance and short-term market outlook Summary of Interim Review Q1/215 Appendix 2 April 29, 215

Q1/215 in brief

Q1/215 in brief Orders received and net sales increased in services Services orders received increased compared with Q1/214 Net sales increased compared with Q1/214 in Services Orders received decreased and net sales increased in capital business Orders received decreased in Pulp and Energy, and Paper business lines from the high levels in Q1/214 Net sales increased in Pulp and Energy and decreased in Paper compared with Q1/214 Order backlog at EUR 2.1 billion Order backlog EUR 66 million higher than at year-end 214 Focus on profitability improvement Gross profit increased by EUR 16 million compared with Q1/214 SG&A 1 expenses increased by EUR 3 million compared with Q1/214 EBITA 2 -margin improved but is below targeted level Strong balance sheet, negative cash flow provided by operating activities Net debt EUR -134 million, and gearing -17% Cash flow provided by operating activities EUR -2 million 1) Selling, general and administrative expenses before non-recurring items 2) EBITA = Earnings before interest, taxes and amortization and non-recurring items 4 April 29, 215

Key figures Q1/215 EUR million Q1/215 Q1/214 Change Orders received 58 1,11-47% Order backlog 1 2,64 1,972 5% Net sales 561 519 8% EBITA 2 19 4 >1% % of net sales 3.5%.7% EBIT 3 13-8 % of net sales 2.4% -1.5% Earnings per share, EUR.5 -.4 Return on capital employed (ROCE), before taxes 4 6% -2% Cash flow provided by operating activities -2 43 Gearing 1-17% -5% Non-recurring items: EUR million in Q1/215 (EUR -6 million in Q1/214) 1) At the end of period 2) Before non-recurring items 3) After non-recurring items 4) Annualized 5 April 29, 215

Orders received declined from the high level in Q1/214 Orders received (EUR million), by business line Orders received (EUR million), by area 1,4 3,5 1,4 3,5 1,2 1, 8 6 4 2 1,11 1,23 212 19 58 622 56 466 48 149 128 142 96 66 138 267 273 242 273 293 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Services (LHS) Pulp and Energy (LHS) Paper (LHS) Last 4 quarters (RHS) 3, 2,5 2, 1,5 1, 5 1,2 1, 8 6 4 2 1,11 1,23 3, 59 2,5 42 121 2, 35 466 48 58 567 1,5 66 41 85 437 35 54 1, 54 24 194 189 277 22 5 5 23 185 4 82 135 189 88 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 North America (LHS) South America (LHS) EMEA (LHS) China (LHS) Asia-Pacific (LHS) Last 4 quarters (RHS) Orders received increased in Services Orders received decreased in Pulp and Energy Orders received decreased in Paper Orders received increased in South America and China 6 April 29, 215

Order backlog at EUR 2.1 billion Order backlog (EUR million) Structure of order backlog 3, 2,5 2, 1,5 1,972 2,46 2,312 1,998 2,64 ~25% 1, ~75% 5 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Services business Capital business About 75% of the order backlog is currently expected to be realized as sales during 215 Approximately 25% of the order backlog relates to the Services business line 7 April 29, 215

EBITA-margin increased compared with Q1/214 Net sales and EBITA before NRI (EUR million) 519 588 59 3.7% 5.5% 777 6.1% 561 3.5% EBITA target 6 9%.7% 224 251 235 278 242 Services Capital EBITA-% Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 4 22 32 48 19 EBITA before NRI (MEUR) Net sales and profitability increased compared with Q1/214 - Changes in foreign exchange rates 1 increased net sales by EUR 2 million and EBITA by EUR 1 million Exceptionally many POC 2 milestones in Q4/214, while less in Q1/215 8 1) Compared with the exchange rates for January March, 214 2) POC = Percentage of completion April 29, 215

Q1/214 Q2/214 Q3/214 Q4/214 Q1/215 Q1/214 Q2/214 Q3/214 Q4/214 Q1/215 Good development in gross profit Gross profit (EUR million and % of net sales) SG&A (EUR million and % of net sales) 16 4% 16 4% 14 35% 14 35% 12 3% 12 3% 1 25% 1 25% 8 2% 8 2% 6 15% 6 15% 4 1% 4 1% 2 5% 2 5% % % EUR million (LHS) % of net sales (RHS) EUR million (LHS) % of net sales (RHS) Gross profit increased Selling, general and administrative expenses (SG&A) increased EUR 3 million, due to changes in foreign exchange rates 1 Further actions to improve gross profit through Must-Win implementation and renewal 1) Compared with the exchange rates for January March, 214 9 April 29, 215

Key Must-Win objectives to improve profitability to the targeted level of 6 9% Improve project and service margin Reduce quality costs and lead times Savings in procurement Improve product cost competitiveness to increase gross profit Harmonization of processes Localization of competencies Better selection of sales cases Development in project management Common quality development approach Quality tools and processes Highlight the importance of quality initiatives and accountability Increase sourcing from cost competitive countries Increase use of sub-contracting Consolidation of shipment and warehouse network Focus on cost efficient design Modularity and standardization 1 April 29, 215

Automation is Valmet s fourth business line The acquisition was announced on January 15, 215 and completed on April 1, 215 Enterprise value of acquisition EUR 34 million 1 Automation is Valmet s fourth business line January June Interim Review will include Automation 1) Refers to the debt-free enterprise value of the acquisition. 11 April 29, 215

Business lines development

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Growth in orders received and net sales in Services Orders received (EUR million) Net sales (EUR million) 3 25 267 273 214: EUR 1,55 million 242 273 293 1,2 1, 3 25 224 214: EUR 989 million 251 235 278 242 1,2 1, 2 8 2 8 15 6 15 6 1 4 1 4 5 2 5 2 Orders received (LHS) Orders received, last 4 quarters (RHS) Net sales (LHS) Net sales, last 4 quarters (RHS) Services orders received increased compared with Q1/214 - Orders received increased in North America, South America, EMEA and Asia- Pacific, and decreased in China - Orders received remained stable compared with Q1/214 in Fabrics and increased in all other business units - Changes in foreign exchange rates 1 increased orders received by approximately EUR 16 million Net sales increased compared with Q1/214 1) Compared with the exchange rates for January March, 214 13 April 29, 215

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Orders received decreased and net sales increased in Pulp and Energy Orders received (EUR million) Net sales (EUR million) 214: EUR 1,344 million 214: EUR 956 million 8 7 6 5 4 3 2 1 622 56 96 66 138 1,6 1,4 1,2 1, 8 6 4 2 4 35 3 25 2 15 1 5 181 229 234 312 222 1,6 1,4 1,2 1, 8 6 4 2 Orders received (LHS) Orders received, last 4 quarters (RHS) Net sales (LHS) Net sales, last 4 quarters (RHS) Orders received decreased compared with Q1/214 - Orders received increased in South America and North America, and decreased in other areas - Orders received decreased in both Pulp and Energy Net sales increased compared with Q1/214 14 April 29, 215

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Orders received and net sales decreased in Paper Orders received (EUR million) Net sales (EUR million) 214: EUR 671 million 214: EUR 528 million 3 9 3 9 25 2 15 1 212 19 128 142 149 75 6 45 3 25 2 15 1 114 18 12 186 97 75 6 45 3 5 15 5 15 Orders received (LHS) Orders received, last 4 quarters (RHS) Net sales (LHS) Net sales, last 4 quarters (RHS) Orders received decreased compared with Q1/214 - Orders received increased in China and South America and decreased in other areas - Orders received increased in Board and Paper, and decreased in Tissue Net sales decreased compared with Q1/214 Timing of POC 1 milestones had a negative impact on net sales in Q1/215 1) POC = Percentage of completion 15 April 29, 215

Financial development

Q1/214 Q2/214 Q3/214 Q4/214 Q1/215 Cash flow provided by operating activities negative due to net working capital development Cash flow provided by operating activities (EUR million) 14 12 1 117 8 6 4 2-2 43 46 3-2 -4 Change in net working capital was EUR -49 million 1 CAPEX less than depreciation 1) Change in net working capital in the condensed consolidated statement of cash flows 17 April 29, 215

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Strong balance sheet and negative gearing Net debt (EUR million) and gearing (%) Equity to assets ratio (%) 2 15 1 2% 15% 1% 45% 4% 35% 4% 4% 41% 42% 34% 5 5% 3% -5-1 -15-2 -25-39 -54-5% -7% -158-166 -2% -21% -134-17% % -5% -1% -15% -2% -25% 25% 2% 15% 1% 5% % Net debt (EUR million) Gearing (%) Negative gearing (-17%) and net debt EUR -134 million Equity to assets ratio was negatively affected by drawn bank loans to finance the acquisition of Process Automation Systems, and by dividend payout decision of Annual General Meeting 18 April 29, 215

Structure of loans and borrowings Interest-bearing debt EUR 445 million as at March 31, 215 Amount of outstanding interest-bearing debt (EUR millions) 4 35 Main financing sources Amount Lender EUR 147 million European Investment Bank 3 25 2 15 1 5 EUR 1 million EUR 7 million EUR 95 million Skandinaviska Enskilda Banken Swedish Export Kredit Nordic Investment Bank 215 216 217 218 219 22 221 222 223 224 225 Average maturity of long-term loans is 4.1 years Back-up facilities Amount EUR 2 million syndicated revolving credit facility EUR 2 million domestic commercial paper program Outstanding EUR million EUR 3 million 19 April 29, 215

Guidance and shortterm market outlook

Guidance and short-term market outlook Guidance for 215 (as given on February 6, 215) Guidance for 215 Valmet estimates that, including the acquisition of Process Automation Systems, net sales in 215 will increase in comparison with 214 (EUR 2,473 million) and EBITA before non-recurring items in 215 will increase in comparison with 214 (EUR 16 million). Short-term market outlook Q2/214 Q3/214 Q4/214 Q1/215 Services Satisfactory Satisfactory Satisfactory Satisfactory Pulp and Energy Pulp Energy Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Good Weak Paper Board and Paper Good Good Good Good Tissue Satisfactory Satisfactory Satisfactory Satisfactory Automation - - - Satisfactory 21 April 29, 215

Summary of Interim Review Q1/215

Summary of Interim Review Q1/215 Orders received and net sales increased in services Services orders received increased compared with Q1/214 Net sales increased compared with Q1/214 in Services Orders received decreased and net sales increased in capital business Orders received decreased in Pulp and Energy, and Paper business lines from the high levels in Q1/214 Net sales increased in Pulp and Energy and decreased in Paper compared with Q1/214 Order backlog at EUR 2.1 billion Order backlog EUR 66 million higher than at year-end 214 Focus on profitability improvement Gross profit increased by EUR 16 million compared with Q1/214 SG&A 1 expenses increased by EUR 3 million compared with Q1/214 EBITA 2 -margin improved but is below targeted level Strong balance sheet, negative cash flow provided by operating activities Net debt EUR -134 million, and gearing -17% Cash flow provided by operating activities EUR -2 million 1) Selling, general and administrative expenses before non-recurring items 2) EBITA = Earnings before interest, taxes and amortization and non-recurring items 23 April 29, 215

Interim Review January June 215 July 3, 215 www.valmet.com/investors

Appendix

Largest shareholders on March 31, 215 Based on the information given by Euroclear Finland Ltd. Largest shareholders # Shareholder name Number of shares % of shares and votes 1 Solidium Oy 1 16,695,287 11.14% 2 Cevian Capital Partners Ltd. 1,323,191 6.89% 3 Nordea Funds 4,61,779 3.8% 4 Skagen Global Verdipapirfond 3,22,627 2.14% 5 Ilmarinen Mutual Pension Insurance Company 3,92,126 2.6% 6 Varma Mutual Pension Insurance Company 2,98,465 1.94% 7 The State Pension Fund 1,52, 1.1% 8 Keva 1,52,166 1.% 9 Mandatum Life Insurance Company Limited 1,237,37.83% 1 Skagen Global II Verdipapirfond 947,963.63% 1 largest shareholders, total 46,39,911 3.72% Other shareholders 13,824,78 69.28% Total 149,864,619 1.% The holding of Capital Partners Ltd. decreased on February 13, 215 to 1,323,191 shares (previously 2,813,714 shares), corresponding to an ownership of 6.89% (previously 13.89%) of Valmet s shares. 1) A holding company that is wholly owned by the Finnish State 26 April 29, 215

Ownership structure on March 31, 215 14.2% 11.1% 2.2% 54.5% Nominee registered and non-finnish holders Finnish institutions, companies and foundations Solidium Oy Finnish private investors Sector Number of shareholders % of total shareholders Number of shares % of shares Nominee registered and non-finnish holders 38.6% 81,573,996 54.4% Finnish institutions, companies and foundations 2,782 5.7% 3,453,836 2.2% Solidium Oy 1.% 16,695,287 11.1% Finnish private investors 46,44 93.7% 21,141,5 14.2% Total 49,134 1.% 149,864,619 1.% The ownership structure is based on the classification of sectors determined by Statistics Finland. 1) A holding company that is wholly owned by the Finnish State 27 April 29, 215

12/213 1/214 2/214 3/214 4/214 5/214 6/214 7/214 8/214 9/214 1/214 11/214 12/214 1/215 2/215 3/215 Share of non-finnish holders and number of shareholders 57% 6, 55% 58, 53% 56, 51% 54, 49% 52, 47% 5, 45% 48, Non-Finnish holders (LHS) Total number of shareholders (RHS) 28 April 29, 215

29 21 211 212 213 214 215 216 217 218 219 29 21 211 212 213 214 215 216 217 218 219 29 21 211 212 213 214 215 216 217 218 219 29 21 211 212 213 214 215 216 217 218 219 Paper, board, and tissue production trends North America (million tonnes) 1 4 Europe (million tonnes) 15 4 8 6 3 2 13 11 9 7 35 3 25 2 15 4 1 5 1 Tissue (LHS) Printing & Writing (RHS) Cartonboard (RHS) Newsprint (LHS) Containerboard (RHS) Tissue (LHS) Printing & Writing (RHS) Cartonboard (RHS) Newsprint (LHS) Containerboard (RHS) China (million tonnes) 12 1 8 6 4 2 55 45 35 25 15 5 Asia-Pacific (million tonnes) 1 9 8 7 6 5 4 3 4 35 3 25 2 15 1 5 Source: RISI Tissue (LHS) Printing & Writing (RHS) Cartonboard (RHS) Newsprint (LHS) Containerboard (RHS) Tissue (LHS) Printing & Writing (RHS) Cartonboard (RHS) Newsprint (LHS) Containerboard (RHS) 29 April 29, 215

29 21 211 212 213 214 215 216 217 218 219 29 21 211 212 213 214 215 216 217 218 219 29 21 211 212 213 214 215 216 217 218 219 29 21 211 212 213 214 215 216 217 218 219 Paper, board, and tissue operating rates North America 1% 95% 9% 85% 8% Europe 1% 95% 9% 85% 75% 8% Tissue Newsprint Printing & Writing Containerboard Cartonboard Tissue Newsprint Printing & Writing Containerboard Cartonboard China 1% 9% 8% Asia-Pacific 1% 95% 9% 85% 8% 7% 75% Tissue Newsprint Printing & Writing Containerboard Cartonboard Tissue Newsprint Printing & Writing Containerboard Cartonboard Source: RISI 3 April 29, 215

Eastern Europe Western Europe North America Latin America Japan China Rest of Asia Oceania Africa Middle East Paper and board consumption growth trends Paper and board consumption per capita vs. population 25 2,5 2 2, 15 1,5 Population growth in emerging markets is larger than in developed markets 1 5 1, 5 Level of consumption per capita in emerging markets clearly below that in developed markets Consumption per capita, kg (LHS) Population, million (RHS) This offers us longterm growth potential Average global consumption: 53 kg per capita Source: RISI 31 April 29, 215

Eastern Europe Western Europe North America Latin America Japan China Rest of Asia Oceania Africa Middle East Tissue consumption growth trends Tissue consumption per capita vs. population 2,5 2, 1,5 1, 25 2 15 1 New products and consumption models based on tissue are helping increase consumption in developed markets 5 5 Consumption in emerging markets is still low, but growing Population, million (LHS) Average global consumption: 4.5 kg per capita Consumption per capita, kg (RHS) Offers us long-term growth potential in both developed and emerging markets Source: RISI 32 April 29, 215

1-Dec-7 1-Mar-8 1-Jun-8 1-Sep-8 1-Dec-8 1-Mar-9 1-Jun-9 1-Sep-9 1-Dec-9 1-Mar-1 1-Jun-1 1-Sep-1 1-Dec-1 1-Mar-11 1-Jun-11 1-Sep-11 1-Dec-11 1-Mar-12 1-Jun-12 1-Sep-12 1-Dec-12 1-Mar-13 1-Jun-13 1-Sep-13 1-Dec-13 1-Mar-14 1-Jun-14 1-Sep-14 1-Dec-14 1-Mar-15 Pulp and paper price trends 1,2 1, 8 6 4 2 Eucalyptus pulp (USD/t) Uncoated (USD/t) Testliner (EUR/t) Northern bleached softwood pulp (USD/t) Copy paper (EUR/t) Source: Bloomberg 33 April 29, 215

Crude oil, steam coal, natural gas and electricity Europe 18 16 14 12 1 8 6 4 2 1-Jan-1 1-Jul-1 1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 CIF ARA steam coal (USD/t) (LHS) Brent crude oil (USD/barrel) (LHS) Natural gas spot price NBP (GBP/therm) (RHS) 1 9 8 7 6 5 4 3 2 1 1 8 6 4 2 1-Jan-1 1-Jul-1 1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 European Energy Exchange, Phelix (EUR/MWh) (LHS) Nordpool Power (EUR/MWh) (LHS) UK Baseload (GBP/MWh) (RHS) 12 1 8 6 4 2 Source: Bloomberg 34 April 29, 215

Crude oil, steam coal, natural gas and electricity United States 14 7 12 6 1 5 8 4 6 3 4 2 2 1 1-Jan-1 1-Jul-1 1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 FOB steam coal Richards Bay (USD/t) (LHS) WTI crude oil (USD/barrel) (LHS) Henry Hub gas (USD/MMBtu) (RHS) 2 9 15 85 1 8 5 75 1-Jan-1 1-Jul-1 1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14 1-Jan-15 Electricity spot price, PJM (USD/MWh) (LHS) Electricity spot price, NEPOOL (USD/MWh) (LHS) US utility capacity utilization rate (RHS) 7 Source: Bloomberg 35 April 29, 215

2-Nov-12 2-Dec-12 2-Jan-13 2-Feb-13 2-Mar-13 2-Apr-13 2-May-13 2-Jun-13 2-Jul-13 2-Aug-13 2-Sep-13 2-Oct-13 2-Nov-13 2-Dec-13 2-Jan-14 2-Feb-14 2-Mar-14 2-Apr-14 2-May-14 2-Jun-14 2-Jul-14 2-Aug-14 2-Sep-14 2-Oct-14 2-Nov-14 2-Dec-14 2-Jan-15 2-Feb-15 2-Mar-15 European Carbon Emission Allowance 9 8 7 6 5 4 3 2 1 European Energy Exchange (EEX) spot price (EUR/t) Source: Bloomberg 36 April 29, 215

Important notice IMPORTANT: The following applies to this document, the oral presentation of the information in this document by Valmet (the Company ) or any person on behalf of the Company, and any question-and-answer session that follows the oral presentation (collectively, the Information ). In accessing the Information, you agree to be bound by the following terms and conditions. The Information is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Information is not for publication, release or distribution in the United States, the United Kingdom, Australia, Canada or Japan. The Information does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase any securities, and nothing contained therein shall form the basis of or be relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding any securities. Prospective investors are required to make their own independent investigations and appraisals of the business and financial condition of the Company before taking any investment decision with respect to securities of the Company. No securities of the Company are being offered or sold, directly or indirectly, in or into the United States and no shares in the Company have been, or will be, registered under the Securities Act of 1933, as amended (the Securities Act ), or under the securities laws of any state of the United States and, accordingly, may not be offered or sold, directly or indirectly, in or into the United States (as defined in Regulation S under the Securities Act), unless registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable state securities laws of the United States. The Information is directed solely at: (i) persons outside the United Kingdom, (ii) persons with professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2 (Financial Promotion) Order 25 as amended (the Order ), (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order and (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2) in connection with the issue or sale of any securities of the Company or any member of its group may otherwise lawfully be communicated or caused to be communicated (all such persons in (i)-(iv) above being Relevant Persons ). Any investment activity to which the Information relates will only be available to and will only be engaged with Relevant Persons. Any person who is not a Relevant Person should not act or rely on the Information. By accessing the Information, you represent that you are a Relevant Person. The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forwardlooking statements give the Company s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as target, believe, expect, aim, intend, may, anticipate, estimate, plan, project, will, can have, likely, should, would, could and other words and terms of similar meaning or the negative thereof. Such forwardlooking statements involve known and unknown risks, uncertainties and other important factors beyond the Company s control that could cause the Company s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which it will operate in the future. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Information or the opinions contained therein. The Information has not been independently verified and will not be updated. The Information, including but not limited to forwardlooking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company s expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document. Market data used in the Information not attributed to a specific source are estimates of the Company and have not been independently verified. 37 April 29, 215