Valmet (VALMT) Investor update summary

Strategic rationale

• Strategy renewal seeks future growth and expansion of existing businesses, with operating-model redesign as its first action.

• Organic growth, EBITA and return on capital have plateaued; overhead costs rising faster than sales and low pulp and paper market activity reinforce the need for efficiency and competitiveness.

• Simplifying post-M&A complexity, removing overlaps and empowering employees aim to improve accountability, responsiveness and customer focus.

Proposed operating model

• Four fundamentals: accountability, customer success, lifecycle commitment and global competitiveness.

• Five business areas: Automation Solutions; Flow Control; Pulp, Energy and Circularity; Packaging and Paper; and Tissue, each responsible for capital equipment and related aftermarket growth and profitability.

• Geographical areas would be integrated into business areas; a separate Latin America unit would support the Arauco project, with a China Chair for senior local presence.

• Global Supply would leverage global procurement and production scale; corporate functions include People, Communications and Culture, Finance, Strategy and Transformation, and Legal.

• Combining service and equipment businesses aims to accelerate growth and simplify strategy execution, not reduce service's importance.

Workforce and financial impact

• Proposed changes could reduce up to 1,150 of more than 19,000 roles, affecting white-collar employees only: up to 395 in Finland and 755 elsewhere; proposals are subject to negotiations in several countries.

• Estimated annual cost savings are ~EUR 80 million, with full run-rate expected by early 2026.

• Savings are net and front-loaded, with a restructuring provision planned for Q2.

• Executive Leadership Team to be reduced by three positions.