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1. Company Snapshot

1.a. Company Description

Valmet Oyj develops and supplies process technologies, automation, and services for the pulp, paper, and energy industries.The company offers solutions and services for the pulping industry, including chemical pulping, wood handling, cooking and fiber line, pulp drying, chemical recovery, air emission control, other value-adding processes, dissolving pulping, mechanical pulping, recycled fiber, and automation for pulp.It also provides technologies, automation products, and services for board and paper production, such as recycled fiber, stock preparation, board and paper machines, services for board and paper, and automation for board and paper; and technologies, automation products, and services for tissue production.


In addition, the company offers energy solutions, BFB and CFB boilers, gasifiers, power and heating plants, air emission control, industrial internet solutions, and services and automation for energy.It serves alternative fuels, biofuels and biomaterials, chemical, fiberboard, filtration, food, laundry, marine, minerals and metals, nonwovens, paper converting, petrochemical, and pharmaceuticals industries.Valmet Oyj is headquartered in Espoo, Finland.

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1.b. Last Insights on VALMT

Valmet Oyj's recent performance faced challenges due to a mixed European market landscape. Despite landmark wins, the company's growth prospects are impacted by global economic uncertainties. Valmet's dividend payout of EUR 0.67 per share on October 7, 2025, may provide stability for investors. However, rising competition, as seen in European stock picks trading below estimated fair value, may pressure Valmet's market position. Additionally, the company's reliance on large projects, such as the evaporation line delivery to Altri in Portugal, poses execution risks.

1.c. Company Highlights

2. Valmet's Q3 Earnings: A Strong Performance Amidst Challenging Market Conditions

Valmet reported a stable net sales of EUR 1.3 billion for Q3, with a comparable EBITA of EUR 159 million and a margin of 12.3%. The company's EPS came in at EUR 0.54, below analyst estimates of EUR 0.782. The cash flow from operating activities was EUR 94 million in Q3, and EUR 569 million over the last 12 months, demonstrating the strength of its business model. The company's backlog stood at EUR 4.5 billion, EUR 74 million higher than at the end of 2024.

Publication Date: Nov -03

📋 Highlights
  • Record Tissue Order & Segment Growth: Valmet secured a record-breaking tissue order in the U.S., contributing to 11% organic growth in Process Performance segment orders.
  • Strong Q3 EBITDA Performance: Achieved EUR 159M comparable EBITDA (12.3% margin), the highest Q3 ever, advancing toward the 2030 15% margin target.
  • Operational Efficiency Gains: Generated EUR 15M quarterly savings from the renewed operating model, with EUR 80M full run rate expected by 2026 (80% to boost results, 20% for reinvestment).
  • Healthy Backlog & Liquidity: Backlog rose to EUR 4.5B (+EUR 74M YoY), while liquidity remained robust with EUR 479M cash and gearing below target.
  • Biomaterials Challenges: Segment faced softer demand, with lower margins due to a broader product portfolio and declining consumables/services, though cost savings offset some pressures.

Segment Performance

The Process Performance segment achieved an 11% organic growth in orders received, driven by a record-breaking tissue order from the US. The Biomaterials segment faced softer market conditions, but the diversified portfolio helped balance the headwinds. Thomas Hinnerskov noted that "customers are committed to the future despite challenging market conditions, with some investing in CapEx to drive efficiency." The company's Lead the Way strategy is yielding concrete benefits, particularly through the savings from its renewed operating model, with EUR 15 million in savings in Q3.

Guidance and Outlook

Valmet's guidance for 2025 remains unchanged, with net sales and comparable EBITDA expected to remain at the previous year's level. The company's healthy backlog, cost savings, and favorable environment in Process Performance support this outlook. However, the Biomaterials market remains challenging, with a risk of further softening. Analysts estimate next year's revenue growth at 6.9%.

Valuation Metrics

To understand what's priced in, we can look at Valmet's valuation metrics. The company's P/E Ratio is 20.3, P/B Ratio is 2.18, and EV/EBITDA is 10.03. The Dividend Yield is 4.8%, and the Free Cash Flow Yield is 9.27%. The ROIC is 6.99%, and ROE is 10.34%. These metrics indicate that the market is pricing in a certain level of growth and profitability.

Conclusion on Valuation

Given the current valuation metrics and the expected revenue growth, it's essential to assess whether Valmet's stock is fairly valued. The P/E Ratio of 20.3 may indicate that the stock is slightly overvalued, but the Dividend Yield of 4.8% and the Free Cash Flow Yield of 9.27% provide a relatively attractive return. The Net Debt / EBITDA ratio of 1.64 is manageable, indicating that the company's leverage is under control.

3. NewsRoom

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Is Valmet (HLSE:VALMT) Still Undervalued After Its Recent Share Price Climb?

Dec -04

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Valmet in key role to decarbonize Fortum's Zabrze combined heat and power plant in Poland

Dec -03

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Valmet to rebuild Wuzhou Special Paper’s recycled board machine

Nov -27

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Valmet supports Wuzhou Special Paper's transition to recycled board grades with a complete paper machine conversion rebuild

Nov -26

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Valmet's new waste-to-energy boiler to help Cheng Loong Corporation in Taiwan to decarbonize Houli mill's energy production

Nov -17

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Valmet Oyj (HLSE:VALMT): Exploring Current Valuation Following Recent Share Price Fluctuations

Nov -10

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Valmet plans temporary layoffs in Finland amid capacity adjustments

Nov -06

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Valmet awarded with a Gold Medal in the EcoVadis sustainability assessment

Nov -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.07%)

6. Segments

Services

Expected Growth: 2.5%

Valmet Oyj's 2.5% growth in services is driven by increasing demand for sustainable paper and pulp production, growing need for maintenance and repair services, and expansion into new geographies. Additionally, the company's focus on digitalization and automation solutions, as well as its strong aftermarket presence, contribute to the growth.

Paper

Expected Growth: 1.8%

Valmet Oyj's 1.8% growth in paper segment is driven by increasing demand for sustainable packaging, growing e-commerce, and rising need for hygiene products. Additionally, the company's focus on innovation, cost savings, and strategic acquisitions have contributed to its growth. Furthermore, the shift towards digitalization and automation in the pulp and paper industry has also supported Valmet's growth.

Pulp and Energy

Expected Growth: 1.2%

Valmet Oyj's Pulp and Energy segment growth of 1.2% is driven by increasing demand for sustainable packaging, growing pulp prices, and rising energy production from biomass. Additionally, the company's focus on innovation, digitalization, and customer services has improved operational efficiency, leading to higher profitability and growth.

Flow Control

Expected Growth: 2.2%

Valmet Oyj's Flow Control segment growth of 2.2% is driven by increasing demand for industrial automation, digitalization, and sustainability in the pulp, paper, and energy industries. Additionally, the company's strategic acquisitions, investments in R&D, and expansion into emerging markets contribute to its growth momentum.

Automation Systems

Expected Growth: 2.8%

Valmet Oyj's Automation Systems segment growth of 2.8% is driven by increasing demand for industrial automation and digitalization in the pulp, paper, and energy industries. Growing need for process optimization, efficiency, and sustainability, coupled with investments in Industry 4.0 technologies, are key growth drivers. Additionally, Valmet's strong market position, innovative solutions, and expanding customer base contribute to the segment's growth.

7. Detailed Products

Pulp and Paper Mill Equipment

Valmet Oyj provides a wide range of equipment and solutions for pulp and paper mills, including pulp drying, paper machines, and converting equipment.

Automation and Quality Control Systems

Valmet's automation and quality control systems help pulp and paper mills optimize their production processes, improve product quality, and reduce waste.

Services and Maintenance

Valmet Oyj offers a range of services and maintenance solutions to help pulp and paper mills optimize their operations, improve efficiency, and reduce costs.

Biorefinery and Biomass Solutions

Valmet's biorefinery and biomass solutions enable the production of bioenergy, biochemicals, and biomaterials from renewable biomass sources.

Recycling and Waste Management Solutions

Valmet Oyj provides solutions for recycling and waste management, enabling the efficient processing and utilization of waste materials.

8. Valmet Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

Valmet Oyj's products are specialized and customized, making it difficult for customers to find substitutes. However, the company operates in a competitive industry, and customers may still find alternative solutions.

Bargaining Power Of Customers

Valmet Oyj's customers are largely industrial companies, which have limited bargaining power due to their dependence on the company's specialized products and services.

Bargaining Power Of Suppliers

Valmet Oyj relies on a diverse supplier base, which reduces the bargaining power of individual suppliers. However, some suppliers may still have significant negotiating power due to their size or specialized products.

Threat Of New Entrants

The capital-intensive nature of Valmet Oyj's industry, combined with the need for specialized expertise and technology, creates significant barriers to entry for new competitors.

Intensity Of Rivalry

Valmet Oyj operates in a highly competitive industry, with several established players competing for market share. The company must continually innovate and improve its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 35.08%
Debt Cost 3.95%
Equity Weight 64.92%
Equity Cost 9.30%
WACC 7.42%
Leverage 54.04%

11. Quality Control: Valmet Oyj passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Smiths

A-Score: 6.0/10

Value: 2.7

Growth: 5.1

Quality: 6.7

Yield: 3.1

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
GEA

A-Score: 6.0/10

Value: 2.7

Growth: 5.1

Quality: 6.6

Yield: 3.8

Momentum: 9.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Valmet

A-Score: 5.7/10

Value: 5.1

Growth: 4.8

Quality: 5.1

Yield: 7.5

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
IMI

A-Score: 5.4/10

Value: 1.8

Growth: 5.1

Quality: 6.0

Yield: 2.5

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Mycronic

A-Score: 5.2/10

Value: 1.6

Growth: 8.1

Quality: 8.5

Yield: 3.1

Momentum: 6.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Fluidra

A-Score: 4.8/10

Value: 3.1

Growth: 6.2

Quality: 5.3

Yield: 4.4

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.86$

Current Price

28.86$

Potential

-0.00%

Expected Cash-Flows