HLSE:VALMT

Stock Analysis Report

Executive Summary

Valmet Oyj, together with its subsidiaries, develops and supplies process technologies, automation, and services for the pulp, paper, and energy industries in Finland, North America, South America, Europe, the Middle East, Africa, China, and the Asia-Pacific.

Rewards

Trading at 3.6% below its fair value

Earnings are forecast to grow 5.24% per year

Earnings grew by 54% over the past year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Outstanding track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Valmet Oyj's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VALMT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.8%

VALMT

3.9%

FI Machinery

3.1%

FI Market


1 Year Return

11.7%

VALMT

19.8%

FI Machinery

11.7%

FI Market

Return vs Industry: VALMT underperformed the Finnish Machinery industry which returned 21.5% over the past year.

Return vs Market: VALMT matched the Finnish Market which returned 12.3% over the past year.


Shareholder returns

VALMTIndustryMarket
7 Day1.8%3.9%3.1%
30 Day4.3%4.9%5.7%
90 Day24.5%12.8%7.8%
1 Year14.8%11.7%24.4%19.8%16.8%11.7%
3 Year66.8%52.8%30.2%17.6%33.5%17.4%
5 Year123.3%93.0%52.1%28.7%50.2%21.4%

Price Volatility Vs. Market

How volatile is Valmet Oyj's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Valmet Oyj undervalued compared to its fair value and its price relative to the market?

2.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VALMT (€21.72) is trading below our estimate of fair value (€22.52)

Significantly Below Fair Value: VALMT is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: VALMT is good value based on its PE Ratio (16.7x) compared to the Machinery industry average (17.7x).

PE vs Market: VALMT is good value based on its PE Ratio (16.7x) compared to the Finnish market (20.8x).


Price to Earnings Growth Ratio

PEG Ratio: VALMT is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: VALMT is overvalued based on its PB Ratio (3.5x) compared to the FI Machinery industry average (2.1x).


Next Steps

Future Growth

How is Valmet Oyj forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

5.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VALMT's forecast earnings growth (5.2% per year) is above the savings rate (-0.1%).

Earnings vs Market: VALMT's earnings (5.2% per year) are forecast to grow slower than the Finnish market (14.6% per year).

High Growth Earnings: VALMT's earnings are forecast to grow, but not significantly.

Revenue vs Market: VALMT's revenue (3.3% per year) is forecast to grow faster than the Finnish market (1.9% per year).

High Growth Revenue: VALMT's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VALMT's Return on Equity is forecast to be high in 3 years time (20.6%)


Next Steps

Past Performance

How has Valmet Oyj performed over the past 5 years?

29.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VALMT has high quality earnings.

Growing Profit Margin: VALMT's current net profit margins (5.7%) are higher than last year (3.8%).


Past Earnings Growth Analysis

Earnings Trend: VALMT has become profitable over the past 5 years, growing earnings by 29% per year.

Accelerating Growth: VALMT's earnings growth over the past year (54%) exceeds its 5-year average (29% per year).

Earnings vs Industry: VALMT earnings growth over the past year (54%) exceeded the Machinery industry 4.5%.


Return on Equity

High ROE: VALMT's Return on Equity (21%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Valmet Oyj's financial position?


Financial Position Analysis

Short Term Liabilities: VALMT's short term assets (€1.8B) do not cover its short term liabilities (€1.9B).

Long Term Liabilities: VALMT's short term assets (€1.8B) exceed its long term liabilities (€522.0M).


Debt to Equity History and Analysis

Debt Level: VALMT's debt to equity ratio (27.8%) is considered satisfactory.

Reducing Debt: VALMT's debt to equity ratio has increased from 12.5% to 27.8% over the past 5 years.

Debt Coverage: VALMT's debt is well covered by operating cash flow (99.6%).

Interest Coverage: VALMT's interest payments on its debt are well covered by EBIT (139x coverage).


Balance Sheet

Inventory Level: VALMT has a high level of physical assets or inventory.

Debt Coverage by Assets: VALMT's debt is covered by short term assets (assets are 7.1x debt).


Next Steps

Dividend

What is Valmet Oyj's current dividend yield, its reliability and sustainability?

2.94%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%2.1%markettop25%4.7%industryaverage3.1%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: VALMT's dividend (2.99%) is higher than the bottom 25% of dividend payers in the Finnish market (2.13%).

High Dividend: VALMT's dividend (2.99%) is low compared to the top 25% of dividend payers in the Finnish market (4.68%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, VALMT has been paying a dividend for less than 10 years.

Growing Dividend: VALMT's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (50.1%), VALMT's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VALMT's dividends in 3 years are forecast to be covered by earnings (58.8% payout ratio).


Next Steps

Management

What is the CEO of Valmet Oyj's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Pasi Laine (56yo)

0yrs

Tenure

0

Mr. Pasi Kalevi Laine, MSc (El Eng) has been the Chief Executive Officer and President of Valmet Oyj since 2013. Mr. Laine serves as Managing Director at Suncom Systems Oy. He serves as the President at Va ...


Management Age and Tenure

2.3yrs

Average Tenure

54.5yo

Average Age

Experienced Management: VALMT's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

1.8yrs

Average Tenure

59yo

Average Age

Experienced Board: VALMT's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Pasi Laine (56yo)

    President & CEO

    • Anu Salonsaari-Posti (51yo)

      Senior Vice President of Marketing

      • Celso Tacla (55yo)

        Area President of South America

        • Pekka Rouhiainen

          Director of Investor Relations

          • Tenure: 0.3yrs
        • Aki Niemi (50yo)

          Business Line President of Services

          • Tenure: 2.3yrs
        • Jari Vähäpesola (60yo)

          Business Line President of Paper

          • Jukka Tiitinen (54yo)

            Area President of Asia Pacific

            • Tenure: 2.3yrs
          • Julia Macharey (42yo)

            Senior Vice President of Human Resources & Operational Development

            • Kari Saarinen (58yo)

              Chief Financial Officer

              • Tenure: 4.2yrs
            • Rasmus Oksala

              General Counsel & Secretary


              Board Members

              • Aaro Cantell (55yo)

                Vice-Chairman of the Board

                • Tenure: 1.8yrs
                • Compensation: €72.78k
              • Pekka Kemppainen (65yo)

                Independent Director

                • Tenure: 1.8yrs
                • Compensation: €61.61k
              • Rogério Ziviani (63yo)

                Independent Director

                • Tenure: 7yrs
                • Compensation: €67.91k
              • Eriikka Söderström (51yo)

                Independent Director

                • Tenure: 3yrs
                • Compensation: €70.01k
              • Tarja Tyni (55yo)

                Independent Director

                • Tenure: 3.8yrs
                • Compensation: €63.71k
              • Monika Maurer (63yo)

                Independent Director

                • Tenure: 1.8yrs
                • Compensation: €64.91k
              • Riina Vilander (41yo)

                Personnel Representative

                • Tenure: 1.8yrs
                • Compensation: €4.20k
              • Mikael Mäkinen (63yo)

                Chairman

                • Tenure: 0.8yrs

              Company Information

              Valmet Oyj's company bio, employee growth, exchange listings and data sources


              Key Information

              • Name: Valmet Oyj
              • Ticker: VALMT
              • Exchange: HLSE
              • Founded:
              • Industry: Industrial Machinery
              • Sector: Capital Goods
              • Market Cap: €3.304b
              • Shares outstanding: 149.62m
              • Website: https://www.valmet.com

              Number of Employees


              Location

              • Valmet Oyj
              • Keilasatama 5
              • PO Box 11
              • Espoo
              • Uusimaa
              • 2150
              • Finland

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              VALMTHLSE (OMX Nordic Exchange Helsinki)YesShare CapitalFIEURJan 2014
              VALMTHBATS-CHIXE (BATS 'Chi-X Europe')YesShare CapitalGBEURJan 2014
              2VODB (Deutsche Boerse AG)YesShare CapitalDEEURJan 2014
              0QIWLSE (London Stock Exchange)YesShare CapitalGBEURJan 2014
              VOYJ.FOTCPK (Pink Sheets LLC)YesShare CapitalUSUSDJan 2014
              VALMT NBMV (Bolsa Mexicana de Valores)YesShare CapitalMXMXNJan 2014
              VLMT.YOTCPK (Pink Sheets LLC)UNSPONSRED ADSUSUSDAug 2019

              Biography

              Valmet Oyj, together with its subsidiaries, develops and supplies process technologies, automation, and services for the pulp, paper, and energy industries in Finland, North America, South America, Europe, the Middle East, Africa, China, and the Asia-Pacific. It offers pulping and fiber products, including wood handling, cooking and fiber line, chemical recovery, pulp drying, mechanical pulping, recycled fiber, stock preparation, and automation for pulp; and board and paper mill products, such as recycled fiber, stock preparation, headbox, forming, pressing, drying, process ventilation, sizing, coating, coating drying, chemical systems, calendering, reeling, and winders and roll handling systems, as well as tissue mill products. The company also provides energy production equipment, including bubbling fluidized bed and circulating fluidized bed boilers, gasification, power plants, heating plants, air emission control products, and other services; filter fabrics for mining and chemical industry; inline conductivity measurements for pharmaceutical and industrial applications; biofuels and biomaterials; and automation services. In addition, it offers spare parts and components, maintenance and shutdown management, outsourcing, production consumables, process support and optimization, process and automation upgrades, and industrial Internet and remote solutions. The company also serves paper converting, food and biotechnology, and pharmaceuticals industries, as well as commercial laundries. Valmet Oyj is headquartered in Espoo, Finland. Valmet Oyj(HLSE:VALMT) operates independently of Metso Corporation as of December 31, 2013. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/17 21:33
              End of Day Share Price2020/01/17 00:00
              Earnings2019/09/30
              Annual Earnings2018/12/31


              Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.