Valmet Q3 2026 Results: Orders Jump 30% to €1.41 Billion as Comparable EBITA Rises 6%

Valmet reported a strong increase in orders received and higher comparable earnings in the third quarter of 2026, supported by robust demand for biomaterial technologies, continued growth in Process Performance Solutions and the consolidation of Engineered Severe Service following its acquisition of Severn Group.

Orders received increased 30% year on year to €1.408 billion, compared with €1.083 billion in the third quarter of 2025. Organic order growth reached 25%, reflecting stronger demand across both of Valmet’s business segments.

Net sales rose 5% to €1.360 billion from €1.295 billion, while comparable earnings before interest, taxes and amortization (EBITA) increased 6% to €169 million from €159 million. The comparable EBITA margin remained broadly stable at 12.4%, compared with 12.3% a year earlier.

However, reported EBITA declined 4% to €144 million, while profit for the period fell 18% to €70 million. Earnings per share decreased to €0.38 from €0.46, reflecting lower operating profit and higher financing expenses.

For the first nine months of 2026, Valmet recorded higher sales and comparable EBITA than in the corresponding period last year, although order intake remained slightly lower and cash flow declined.

Key financial results

Valmet’s third-quarter performance showed stronger demand and improved comparable earnings, alongside pressure on reported profitability.

For January–September 2026, net sales increased 5% to €3.920 billion from €3.720 billion. Comparable EBITA rose 3% to €434 million from €423 million, while the comparable EBITA margin declined to 11.1% from 11.4%.

Orders received for the nine-month period amounted to €3.874 billion, compared with €3.936 billion a year earlier, a decrease of 2%.

Profit for the period increased slightly to €179 million from €175 million, while earnings per share rose to €0.97 from €0.95. Adjusted earnings per share increased to €1.21 from €1.18.

Order intake strengthens across both business segments

Valmet’s order intake accelerated in the third quarter, with orders increasing in both Process Performance Solutions and Biomaterial Solutions and Services.

The company attributed the improvement to strong demand for biomaterial services, continued growth in Process Performance Solutions and a strong quarter for biomaterial capital projects.

Orders received in Biomaterial Solutions and Services increased 37% to €1.009 billion from €738 million. Organic growth in the segment reached 35%.

Process Performance Solutions recorded a 16% increase in orders to €399 million from €345 million, representing organic growth of 3%.

Biomaterial services orders rose 13% to €457 million from €404 million, with organic growth of 12%. Valmet also received €552 million in biomaterial capital orders, including major project wins in China and Asia-Pacific.

The company highlighted orders for board-making lines, modernization services for recovery boilers and evaporation plants, and its first commercial-scale 3D Fiber line for Metsä Group.

At September 30, 2026, Valmet’s order backlog stood at €4.470 billion, down 1% from €4.526 billion a year earlier but €211 million higher than at the end of June.

The order intake provides a stronger near-term workload, although the timing of large customer investment decisions remains an important factor in quarterly demand.

Process Performance Solutions benefits from Flow Control

Valmet’s Process Performance Solutions segment delivered higher sales and comparable EBITA, supported by Flow Control and the integration of Engineered Severe Service.

Third-quarter segment net sales increased 13% to €408 million from €361 million. Comparable EBITA rose 5% to €82 million from €79 million.

The comparable EBITA margin declined to 20.2% from 21.9%, reflecting changes in the segment’s performance mix and the consolidation of the acquired business.

Within the segment, Flow Control orders increased 26% to €247 million, while net sales rose 27% to €248 million. Automation Solutions orders were broadly stable at €152 million, while sales declined 3% to €160 million.

Engineered Severe Service contributed €44 million in orders and €46 million in net sales during the quarter.

For the first nine months of 2026, Process Performance Solutions generated €1.119 billion in net sales, up 4%, and €215 million in comparable EBITA, up 7%. Its comparable EBITA margin improved to 19.2% from 18.7%.

Valmet completed the acquisition of Severn Group, now operating as Engineered Severe Service, on July 1, 2026. The acquisition expands the company’s industrial flow-control offering, strengthens its installed base and increases aftermarket opportunities.

Biomaterial Solutions and Services improves profitability

Valmet’s Biomaterial Solutions and Services segment recorded higher third-quarter comparable EBITA, supported by increased sales and efficiency and cost-reduction measures under the company’s Lead the Way strategy.

Segment net sales increased 2% to €952 million from €934 million. Comparable EBITA rose 15% to €102 million from €89 million, lifting the segment’s comparable EBITA margin to 10.7% from 9.5%.

Biomaterial services continued to provide a meaningful contribution. Sales in the business area increased 5% to €471 million, while orders received rose 13% to €457 million.

Performance varied across the segment’s business areas:

• Pulp, Energy and Circularity: Orders increased 14% to €226 million, while sales rose 4% to €416 million.

• Packaging and Paper: Orders more than doubled to €630 million, compared with €306 million a year earlier. Sales increased 3% to €356 million.

• Tissue: Orders declined 34% to €153 million, while sales fell 4% to €180 million.

For the first nine months, the segment recorded €2.801 billion in sales, up 6%, and €264 million in comparable EBITA, compared with €258 million a year earlier. The comparable EBITA margin declined to 9.4% from 9.7%.

Valmet said the segment’s nine-month order intake decreased 4% to €2.696 billion, reflecting weaker orders in Tissue and Pulp, Energy and Circularity, partly offset by growth in Packaging and Paper.

The third-quarter improvement in comparable profitability indicates progress in operational efficiency, although the different demand trends across business areas continue to shape the segment’s overall performance.

Operating profit and reported earnings face cost pressure

Despite the increase in comparable EBITA, Valmet’s reported operating profit and net earnings declined during the third quarter.

Operating profit fell to €115 million from €125 million, and the operating margin declined to 8.5% from 9.7%.

The company attributed the lower operating profit to higher costs associated with actions under the Lead the Way strategy, despite higher gross profit.

Items affecting comparability amounted to a negative €25 million during the quarter, compared with a negative €10 million in the third quarter of 2025. These costs were mainly related to efficiency and cost-reduction measures.

Net financial expenses increased to €21 million from €13 million, primarily due to higher debt levels and certain financial costs associated with the Severn acquisition.

Profit before taxes consequently declined to €94 million from €112 million. Profit attributable to owners of the parent fell to €70 million from €86 million.

The distinction between comparable EBITA and reported earnings is important when assessing Valmet’s results: underlying comparable profitability improved, while restructuring-related costs and financing expenses weighed on reported earnings.

Cash flow improves in the quarter, but nine-month generation declines

Cash flow provided by operating activities increased to €210 million in the third quarter from €94 million a year earlier. Free cash flow rose to €183 million from €70 million.

For the first nine months of 2026, however, operating cash flow declined to €310 million from €391 million, while free cash flow fell to €251 million from €310 million.

Valmet said the nine-month decline was mainly related to changes in net working capital. Net working capital stood at €45 million at September 30, compared with negative €76 million a year earlier.

The company’s financial position also reflected the acquisition of Severn Group. At the end of September, net debt to EBITDA stood at 1.78 times, compared with 1.50 times a year earlier, while gearing increased to 47% from 38%.

Cash and cash equivalents totalled €618 million, and Valmet had an undrawn committed revolving credit facility of €450 million.

The company’s improved quarterly cash generation provides support, although working-capital movements and acquisition-related financing remain important factors for the full-year financial performance.

Strategic review progresses as potential separation is assessed

Valmet’s strategic review, announced on July 24, 2026, is progressing according to plan.

The company is evaluating whether separating Biomaterial Solutions and Services from Process Performance Solutions into two independently listed companies on Nasdaq Helsinki could create additional shareholder value compared with the current combined structure.

Valmet has not made a final decision on a potential separation. However, it plans to begin activities in the fourth quarter to strengthen both segments’ readiness to operate independently.

Costs directly related to the strategic review will be reported as items affecting comparability and will not affect comparable EBITA. The company expects approximately €10 million in related costs during the fourth quarter.

Valmet plans to provide a further update no later than the publication of its full-year 2026 results.

Full-year 2026 guidance remains unchanged

Valmet reiterated its financial guidance for 2026.

The company expects net sales to remain at the previous year’s level, compared with €5.197 billion in 2025. Comparable EBITA is expected to remain at the previous year’s level or increase from the €620 million reported in 2025.

The short-term market outlook for October 2026 to March 2027 remains cautious. Valmet expects low year-on-year growth in Process Performance Solutions, while the market for Biomaterial Solutions and Services is expected to remain broadly unchanged.

The company also noted that geopolitical developments and uncertainty in the global economic outlook continue to limit short-term market visibility.

Outlook: Stronger orders support demand visibility

Valmet’s third-quarter results point to stronger demand and improving comparable profitability, supported by biomaterial capital projects, lifecycle services, Flow Control and operational efficiency initiatives.

The 30% increase in quarterly orders and the €4.470 billion order backlog provide a foundation for future activity. However, the company continues to face cost pressures, higher financing expenses and uneven demand across its business areas.

The outlook will depend on the conversion of orders into sales, the integration of Engineered Severe Service, the effectiveness of cost-reduction measures and the evolution of customer investment decisions.

For the pulp, paper, packaging and bioenergy industries, Valmet’s results provide an indication of investment activity in production technology, automation and lifecycle services. Stronger order intake is encouraging, but the company’s unchanged full-year guidance highlights the importance of continued execution in the final quarter of 2026.