Valmet Stock

Good morning, everyone, and welcome to Valmet's Second Quarter 2026 Results Webcast. I'm Pekka Rouhiainen from Investor Relations. And with me today are Valmet's President and CEO, Thomas Hinnerskov; and our CFO, Katri Hokkanen.

Before we begin, I would like to briefly mention the separate stock exchange release we published this morning. Valmet's Board of Directors has initiated a strategic review regarding a potential separation of the company's 2 business segments: Biomaterials Solutions and Services; and Process Performance Solutions, into 2 stand-alone publicly listed companies. We are pleased to be able to share this important strategic step with you today.

Next, Thomas will start by discussing the continued strategic development of Valmet, including the recently completed Severn acquisition and the strengthening of our Process Performance Solutions business. He'll explain how these developments have led to the strategic review we announced today. He will then move on to review the key highlights and operational performance for the second quarter and Katri will cover the financial development in more detail, after which Thomas will return to discuss our guidance and market outlook.

As usual, you may submit written questions through the webcast platform at any time, and we will then also open up the lines for Q&A.

But with that, Thomas, the floor is yours.

Thank you, Pekka. As mentioned, I'll start by discussing the recent Severn acquisition and how we are continuously strategically developing Valmet's portfolio.

Before turning to those topics, however, let me just make one comment shortly on our Q2 performance. For me, the second quarter, which was relatively strong in terms of net sales and comparable EBITA and also order intake showed that Valmet continues to move in the right direction.

Our strategic actions are delivering results. Our competitiveness remains strong, and we continue to strengthen the company for the long term. While I'll come back to our Q2 performance in more detail shortly, the strength of those results provides an important context for the strategic step that we announced earlier this morning.

Now with that, let me begin with Severn. As you well know, on July 1, we successfully completed the acquisition of Severn and welcomed approximately 950 new colleagues to Valmet. It was really great to be in Houston on the day, meeting colleagues there, having the opportunity to talk to many of them in person and also walking the shop floor there.

Severn is a well-established industrial valve company specializing in severe service flow control solution. Severn generated approximately EUR 205 million of net sales in 2025, with an EBITA margin of around 16%. The business has an excellent strategic fit and also cultural fit with Valmet and brings valuable technology expertise and customer relationships to Valmet. So we're extremely happy to be able to start working with our new colleagues and customers.

It's important to highlight how Severn acquisition strengthen our Process Performance Solutions segment and accelerates Valmet's growth beyond the traditional Biomaterial markets. Severn expand our addressable market, increase our installed base, create new opportunities in life cycle services and aftermarket business. With the acquired business included our Process Performance Solutions segment, annual net sales will now be approximately EUR 1.7 billion on an annual basis.

At this scale, we can respond faster to customers wherever they operate and invest more or invest with more conviction in the technology and service capabilities they need. In fact, during the first week since the closing, we've already seen significant interest from new kinds of customers towards the Process Performance portfolio. And not just towards flow control, but also towards our broader portfolio, including automation solutions.

That leads us today and today's strategic announcement with Pekka mentioned earlier.

As highlighted by the Severn acquisition, Process Performance Solutions has indeed developed into a large, highly profitable business. Together with the strong Biomaterial Solutions and Services, this has led us to ask ourselves the important strategic question. Could these 2 businesses create even more value for shareholders as independent companies than they can together?

To really look into this question, we have decided to initiate a strategic review to evaluate a potential separation of Biomaterial Solutions and Services and Process Performance Solutions into 2 stand-alone publicly listed companies.

Let me emphasize one point immediately. Today's announcement is about initiating a review. No decision has been made to implement a separation. There's no certainty that the review will lead or result in a transaction or a structural change. The purpose of the review is solely to assess where that separation could create additional long-term shareholder value compared to with the current combined structure. We expect to provide an update no later than in connection with the publication of our full year 2026 results.

Now let me explain further why we believe this is the right time to start this review. The automation business we acquired in 2015 was highly complementary to Valmet's core biomaterial business at the time. Back then, around 80% of the business came from Valmet's traditional customer industries, making the industrial logic and customer synergies very strong. Over the past decade, through successful execution, organic growth, and strategic acquisitions, we've transformed that business substantially.

Today, Process Performance Solutions is no longer primarily an automation business, servicing pulp and paper customers, but instead includes equally strong automation and flow control businesses servicing a versatile group of customers. In fact, currently, up to 70% of the segment's order intake come from industries outside pulp and paper. Many of them linked to long-term trends such as energy transition, industrial efficiency, and digitalization. This is a significant shift, and as discussed, the acquisition of Severn further strengthened these characteristics.

At the same time, the Process Performance Solutions segment has developed into a major earnings engine in its own right. Today, this segment generates more than EUR 300 million of comparable EBITA on an annualized basis and contributed nearly half of Valmet's total comparable EBITA.

In other words, what started as a highly complementary business supporting Valmet's core biomaterial offering has evolved into a scaled high-margin growth platform with its own attractive end markets, growth drivers and value creation opportunities. As a result, Valmet today consists of 2 large profitable businesses with strong market position and the scale to succeed independently.

On the left, Process Performance Solutions. As discussed earlier, this business has grown significantly in scale, profitability and strategic importance. It serves a diversified base of industries with mission-critical automation and flow control solutions. And close to 70% of order intake already comes from outside the pulp and paper industry.

Then on the right, Biomaterial Solutions and Services. This traditional part of Valmet's business has also created substantial value over time. Since Valmet was formed in 2014, it's net sales has grown from EUR 2.5 billion to nearly EUR 4 billion. And the share of services has increased to 55%. This marks a clear shift towards a more resilient service-led business with a high level of recurring revenue.

At the same time, our margins have improved from around 2% to close to 10%. Importantly, we're not standing still in today's softer market environment. In fact, periods like this are often the best time to drive meaningful change. Through the operating model renewal and the global supply transformation, we are strengthening customer proximity, increasing our focus on aftermarket opportunities, improving in procurement and optimizing our manufacturing footprint. These actions are already visible in the steps we've taken, including the facility closures announced earlier this year in both Europe and China. They position us to emerge stronger, gain market share in service and continue improving profitability as market conditions recover.

Today, Biomaterial Solutions and Services is a global technology leader, life cycle service leader servicing customers across pulp, board, paper, tissue as well as energy. We are at the core of our customers' operation. From the initial technology investments to decades of life cycle services, we help keep their production running safely, efficiently and competitively every day. That gives us the confidence in the future is that we are building on an already strong foundation. We've strengthened the business significantly over the last decade, and we are taking further actions today to increase customer proximity, grow service, and improve profitability. We believe the next chapter is still ahead of us.

In conclusion, this review reflects the fact that both businesses have developed into a strong and successful operations with distinct business model, growth opportunities and capital allocation profiles. This naturally leads to the question of where additional value creation might come from.

At this stage, we see 3 potential areas where a separation could add and create additional shareholder value. First, more focused strategies. Each business operates in different competitive environment, serve different customer needs and pursues somewhat different growth opportunities. Greater independence may allow each businesses to make their own decision entirely based on its own priorities and market dynamics.

Second, more tailored capital allocation. The business has different investment requirements and different opportunities for both organic and inorganic growth. Also, as we highlighted in our Capital Market Day last year, the M&A potential is clearly high in PPS with focus on opportunities outside of the pulp and paper industry. A separation may allow each company to allocate capital in a more targeted way aligned with its own economics and strategic priorities.

Third, clear accountability and investment propositions. Separate management teams, Boards and capital allocation frameworks could improve transparency and allow investors to assess each company against the performance drivers most relevant to that business.

At the same time, we do recognize that a potential separation would also involve costs and other impacts. That is exactly why we are conducting a comprehensive review rather than making a decision today. We'll only proceed if the review demonstrates that the long-term benefits clearly outweigh the cost, complexity and execution risk associated with such a separation.

Finally, one more important note around today's announcement. Nothing changes for our customers, our employees or our day-to-day operation. Business continues as normal. The review does not change our strategy. Customer commitments, deliveries, projects and services remain unchanged, and our teams remain fully focused on executing and servicing our customers.

In a separation, where if a separation were eventually pursued, one of the key objectives would be to preserve that customer value. This will remain an important consideration throughout the review process. The strategic, financial and operational implications of a potential separation will now be assessed carefully. The Board will only move forward if there's a clear evidence of an enhanced shareholder value creation.

With that background, we can now turn to our second quarter performance. We will get back to the strategic review in due time.

Now the first part of the presentation focused on strategic development of Valmet. The quarter in itself clearly demonstrates the benefits of the strategic actions we have already taken over the past year.

First of all, the decisive action we took last year to strengthen Valmet's competitiveness have continued to deliver during the quarter. Net sales increased 6% organically and comparable EBITA increased to EUR 152 million. Comparable EBITA margin remained stable at 11.5%, supported by higher net sales and cost savings. On a year-to-date basis, comparable EBITA is now slightly ahead of last year, demonstrating the resilience of our full year trajectory, despite the softer start to 2026.

Orders received totaled close to EUR 1.4 billion, while orders did decrease 9% from the comparison period, which was mainly driven by our capital project order intake in the Biomaterial Solutions and Services segment, orders increased sequentially from Q1 and were at a solid level.

While uncertainty remains in the market, we saw some early signs of stabilization in the Biomaterial Solutions and Services during the quarter. Capital project activity improved sequentially from an unusual low level seen in Q1, while the service market remains soft, but did show signs of stabilization. While this is a positive development, it's important to note that the timing of large customer investment decisions continues to have a significant impact on quarterly activity. And we would not yet characterize this as a sort of definitive market turning point.

Process Performance Solutions continued to perform well, continues to deliver resilient growth and strong profitability. And as I just briefly explained, the successful completion of the Severn acquisition marked another important step forward in strengthening our Process Performance Solutions business and long-term earnings profile. Based on our first half performance and current visibility, we reiterate our guidance for 2026.

Looking then at the orders received, orders amounted to EUR 1.4 billion, decreased 9% organically compared to a strong comparison period last year. Despite the year-on-year decline, EUR 1.4 billion do represent a solid level of order intake in the current market environment.

While orders included one single triple-digit order, overall order intake was quite broad-based. Orders include several midsized capital orders across geographies, across customer industries, demonstrating the breadth of our offering and customer base.

With that, let's take a closer look at the segment performance. Turning to Process Performance Solutions, which delivered another solid quarter. Orders increased organically by 1%, with similar development in both Automation Solutions and Flow Control. This reflects the resilience of the business and the benefits of our broad industry exposure.

With Flow Control, demand remained healthy across several customer segments and Automation Solutions continue to see especially good activity in the marine segment with notable new wins.

Net sales remained at previous year's level. Flow Control continues to grow, while Automation Solutions was lower than the comparison period. Comparable EBITA increased to EUR 69 million, and the margin improved to 18.7%. Profitability remained at a high level and was supported by strong operational execution.

While we're very pleased with the current performance, our focus is not on maximizing short-term margins. We continue to invest selectively in growth opportunities within Process Performance Solutions. The recent acquisition of Severn is a good example of this approach. The transaction is primarily a growth and strategic position opportunity and not a cost synergy case. Our focus is on expanding our market reach, installed base and long-term growth opportunities while maintaining attractive profitability in the business.

Turning then to Biomaterials Solutions and Services. Orders decreased 13% compared to with a strong comparison period last year, but there were some positive sequential signs that capital projects. Large project orders increased to EUR 501 million from the first quarter, supporting our view that Q1 represented an unusual low level of capital project activity.

However, while Q2 was a clear improvement, as I noted earlier, the timing of customer investment decision continues to have a significant impact on individual quarters going forward. As Biomaterial Services orders declined 8%, the overall market remains soft, but consumables and performance parts held up relatively well in our largest markets, North America and EMEA.

Mill improvements and field service decreased from the comparison period, which was strong in those categories last year. Overall, I would say that we do see some encouraging signs in customer activity, also in services. One element was the stabilization of consumable orders after several weaker quarters. There are indications that some customers are now gradually shifting focus from cost containment back towards operational performance and maintenance needs.

However, it is still too early to characterize this as a broader market recovery. Net sales increased 8% organically, supported by a higher share of large projects and smaller mill improvement projects. Comparable EBITA improved to EUR 98 million, and the margin increased to 10.4%, supported by the higher net sales. We continue to see benefits from the actions taken during the past year, the operating renewal, ongoing footprint optimization and broader cost discipline measures are improving competitiveness and supporting profitability even as market conditions remains mixed.

With that, let me hand over to Katri to take a closer look at the financial development.

Thank you, Thomas, and good morning, everyone, also from my behalf. Happy to be here today.

I will start with the group level development of net sales and profitability. Net sales increased 6% year-on-year to EUR 1.3 billion. Currencies or M&A did not have impact in the figures materially, and organic growth was also 6%. The increase was driven by Biomaterial Solutions and Services, where net sales grew due to higher activity in large projects, including a good development in the Landmark Arauco project.

Process Performance Solutions net sales remained at the previous year's level. Comparable EBITA increased by EUR 9 million to EUR 152 million, from the EUR 143 million in the comparison period. The comparable EBITA margin remained at 11.5%. Higher net sales together with continued cost savings from the operating model renewal supported the earnings development during the quarter.

And like visible in the graphs, Q2 followed a rather typical seasonal pattern and sequentially, both net sales and comparable EBITA increased from the first quarter. Overall, the quarter demonstrates that the actions taken over the past year continue to support the profitability even in a market environment where customer decision-making remains cautious.

Let's then take a look at how our cost base has developed in recent years. The benefits from the operating model renewal continue to be clearly visible in our cost base. On a last 12-month basis, comparable SG&A expenses have decreased to EUR 905 million. Compared with the 2024 baseline year, SG&A expenses are now EUR 79 million lower. As a share of net sales, SG&A has improved from 18.4% to 17%.

Importantly, these results reflect more than just cost reductions. The operating model renewal was designed to simplify the organization, improve accountability and bring us closer to customers through a stronger life cycle focus. The lower cost base is, therefore, a result of structural improvements in how we operate the business rather than just short-term cost cutting.

Order backlog amounted to EUR 4.3 billion at the end of the second quarter. Compared with year-end 2025, the backlog was EUR 47 million lower, but remained at a healthy level. Approximately EUR 2.2 billion of the current backlog is expected to be recognized as net sales during 2026 based on our current delivery schedules.

The backlog continues to provide good visibility for deliveries and supports our execution plans for the remainder of the year. As always, our focus remains on disciplined project execution, profitability and cash generation.

With that, let's now turn to cash flow development. Cash flow from operating activities was EUR 65 million in the second quarter compared with EUR 79 million in the comparison period. The decrease was mainly related to higher net working capital.

Reported net working capital included a EUR 123 million dividend liability that has no cash flow impact. Excluding this liability, net working capital was EUR 154 million higher than at the end of 2025. The development was mainly driven by project timing and phasing effects, which are typical in our business.

Comparable cash conversion on a last 12 months basis was 62%. While below our historical average, it is important to remember that quarterly fluctuation in working capital and cash flow are normal in Valmet, due to the project-driven nature of the business.

We continue to expect cash conversion to improve during the year, supported by normal project phasing and disciplined working capital management, while quarterly fluctuation can remain significant.

The balance sheet remains strong. At the end of the quarter, net debt was EUR 965 million and gearing stood at 39% compared with the 42% a year earlier. Net debt-to-EBITDA improved further to 1.42 billion from 1.60 in the comparison period.

The average interest rate of our debt remained stable at 3.6% and liquidity was strong with EUR 584 million in cash and cash equivalents at quarter end. In addition, our EUR 450 million revolving credit facility was fully undrawn. This balance sheet strength provided the financial flexibility needed to complete the Severn acquisition immediately after the reporting period, and this will have approximately 15 percentage point impact to the gearing. We are comfortable with that level given the strong cash conversion ratio our business inherently has.

Comparable ROCE improved to 13.5% from 13.1% in the comparison period and 12.7% in 2024. As shown in the graph, capital employed decreased by around EUR 79 million compared with 2024. While we remain below our long-term ROCE target, the direction of development continues to be positive.

Adjusted earnings per share increased to EUR 0.47 from EUR 0.23 in the comparison period. The increase in both reported and adjusted earnings per share mainly reflects the restructuring expenses related to the operating model renewal that impacted the comparison period.

This slide summarizes the main financial figures for the quarter, and most of these items have already been covered, but I would like to highlight two additional observations.

First, items affecting comparability amounted to minus EUR 1 million during the quarter compared with minus EUR 62 million in the comparison period. And last year's figure was mainly related to restructuring expenses of the operating model renewal.

Secondly, the effective tax rate was 34.7% in the second quarter, which is above our long-term average level. Valmet's tax rate typically fluctuates between quarters due to profit mix and timing effects. And as a result, the second quarter level should not be considered indicative of a normal quarterly tax rate going forward. Our long-term average effective tax rate is approximately 25% which we expect also going forward.

In summary, the second quarter demonstrated continued benefits from our operating model renewal, supported by higher net sales and solid operational execution.

With that, I hand it back to Thomas to go through the guidance and short-term market outlook.

Thanks, Katri. Let me now move to our guidance and short-term market outlook. We reiterate our guidance for 2026, like I said earlier, Valmet continues to estimate that net sales in 2026 will remain at the previous year's level, and then comparable EBITA will remain at previous year's level or increase compared to 2025.

Turning then to our market outlook. For Process Performance Solutions, we continue to expect the market will remain at low year-on-year growth. The segment has demonstrated good resilience throughout the first half of the year. At the same time, uncertainty related to the geopolitical situation and global economic outlook remains elevated and continues to reduce short-term visibility.

For Biomaterial Solutions and Services, we estimate that market activity will remain similar to the second quarter. We were encouraged by the improvement in capital project activity compared to the first quarter. However, timing of large customer investment decisions continue to have a significant impact on activity levels in individual quarters.

The Biomaterial Services market is expected to remain soft in the coming quarters, while the overall market appears to be stabilizing compared to the beginning of the year. Overall, the external environment remains uncertain with low visibility.

As we look at the remainder of the year, it's worth noting that year-to-date comparable EBITA is already slightly ahead of last year. In addition, Severn will provide a modest contribution following the closing of the acquisition. At the same time, profitability continues to depend heavily on service activity where market uncertainty remains.

Overall, our large installed base, strong life cycle offering, disciplined execution and the addition of Severn provides a solid foundation as we move into the second half of the year.

Before I conclude, let me comment on another important announcement we made this morning. As you know, we announced earlier that -- earlier this year that Katri would be leaving Valmet. And since then, we've conducted a thorough search process with a number of strong candidates.

I'm very pleased that the process has resulted in the appointment of Pia Aaltonen-Forsell as Valmet's next CFO. Pia clearly brings demonstrated, broad financial experience, and experience from leading complex global organizations. We believe she is an excellent fit for Valmet and for the next phase of our development.

Pia is expected to join Valmet no later than the end of January 2027. We look very much forward to welcome Pia to Valmet and to introducing her to many of you next year. Until Pia joins, we are naturally in the process of appointing an interim CFO, and we expect to be able to announce that during August.

With that, let me conclude today with 3 key messages. First, our performance in the second quarter demonstrates that the action we have taken continues to deliver. Our competitiveness remains strong, profitability improved, and we continue to strengthen Valmet for the long term.

Second, both our businesses have developed into strong, increasingly distinct platforms. Process Performance Solutions have evolved into a scale business of approximately EUR 1.7 billion in net sales with growing exposure to industry is critical for the energy transition while Biomaterial and Services continue to hold a leading position in its markets and also offer significant long-term value potential or value creation potential.

Thirdly, today's announcement reflects the significant progress both businesses have made. The strategic view is tended to assess how that progress and future potential can best be translated into long-term shareholder value, and we'll get back to this. At the same time, our day-to-day priorities remained unchanged, servicing our customers, executing our strategy and delivering profitable growth.

So with that, Pekka, I'm going to hand back to you.

Thank you, Thomas and Katri for the presentations, and we now move to the Q&A session. And as usual, you may ask questions either through the webcast platform in the written format or through the conference call line. So we have a question here from -- 2 questions here. First, from [ Christian Nucord. ] Thank you, Christian, for the question. So I'll read it here.

At the Q1 call, you signaled that the expected Process Performance Solutions margins will decline in order to invest back into growth. However, the Q1 margin increased. Do you still expect lower margin for the rest of the year?

Yes. A very good question, Christian. I mean, overall, we are very happy with the PPS performance, and they continue to deliver strong operational performance. During the first half, profitability has also been supported by sort of elevated product margins. What really is important in that business is, we're happy with the level of profitability, and we really want to sort of make sure that we push the growth accelerator on that one, and that's why we want to sort of keep always looking for potential investment into organic growth. This year has maybe been sort of some of these growth investments may be been, I'd say, set back slightly due to some of the geopolitical tension that was created early on in the year.

Thank you, Thomas. Then another one, anonymous question. Is the main reason behind leading up the splitting up the persistent low multiples of the group?

Yes. Good question. I mean, like we said in -- also in this presentation, we've developed over the years, two very strong segments. We introduced them the segments last year on our Capital Market. Now it really is about how can we position these structurally to be in the best position to development.

Important to note is, now they're actually so that they are servicing different customer segments to a very large extent. Only 30% of the customer segments are overlapping, right? It's also clear that both or the 2 different platforms have different growth agendas. One is much more, which is the PPS business from -- for that's where we're looking into M&A inorganic growth. Severn is a good example of that. So that means that the capital allocation for these 2 segments is going to be different going forward.

Then as a third point, there can also be a point in this, would a separation make it a simpler equity story with dedicated KPIs for these 2 different segments in order to actually follow and evaluate are they executing the strategy as communicated.

Great. Thank you, Thomas. Now that's all from the written format. Operator, handing over to you.

[Operator Instructions] The next question comes from Antti Kansanen from SEB.

A couple of questions from me. I'll take them one-by-one. And I will start one regarding the potential separation of the 2 divisions. So Thomas, could you maybe talk a little bit about the synergies between the Automation Systems business and the Flow business within the PPS in terms of shared client base, R&D and then contrast to kind of what type of synergies the automation business and the pulp and paper equipment business actually have had historically in terms of, if these businesses end up under a separate company going forward?

Yes. Great. Great, thanks for having -- great to have you on the call, Antti. Let me just write down. So synergies. So the synergies within PPS between Automation Solutions and Flow Control, that's the clear customer overlap in that. And also even since we launched the strategy in the new structure last year at the Capital Market Day in June last year, we've even sort of gone further into that as part of also our commercial excellence efforts and looking into it and there's a greater actually customer overlap than probably what we initially thought. So that's clearly sort of a top line synergy between the 2 within the PPS.

Then between PPS and Bio, I think it's important to note that just like I also said earlier today is that we started out to have a very, very strong industrial logic to actually put automation into the Bio business. The fact is now that the overall PPS business have been gone from actually being 80-plus percent, Biomaterial customers to now be less than 1/3 of the Biomaterial customers.

It is, of course, important also to note that, and I guess maybe that's a little bit what you allude to is that, there is -- there's also a strength in some of that automation into the Bio. And that's, of course, one of the things that this strategic review needs to assess is, what is the dissynergy there, and how do we actually preserve that strength from a customer value proposition perspective.

I know that it's early days in regarding kind of the strategic review, but how should we think about in terms of the structure? Would an outcome where you would separate only the flow control business out of the remainder? Or would that be a possibility? Or is it just a binary of PPS, Bio or just remaining as a with the current structure?

Yes. What we clearly are looking into is looking -- taking the 2 segments which are very strong individual in itself, and they are based close to 50%, 50% of the bottom line and looking into would it make more sense to have them as 2 separate listed public companies. So the purpose is to keep flow and automation together if such a separation should occur. That's the hypothesis.

All right. That's very clear. Then a couple of questions on the actual Q2 performance. And maybe on the Biomaterial Service demand, I mean you're flagging what stable parts and the transactional parts and consumables demand, but reduction on the field and mill improvement side. So is this just a function of certain Q2 comps? Or how would you comment on the market outlook for a different type of service elements within the Bio?

Yes. I think that's a great reflection, Antti. This is -- how I would think about is basically twofold. First of all, we've had a number of quarters with soft or particularly soft and even declining parts and consumables. Great to see that, that's coming back on a more normalized levels. I think it also shows that customers are getting back to sort of we need to operate efficiently. That is the only way to really stay competitive in the market.

Then on the improvement or mill improvement projects, it's also clear that the first half last year was particularly strong in those. We really had a year where there was lots of customer focus on this. Now in particular, maybe in China and Latin America, we see very little activity on the sort of the large mill improvement and a strong focus instead on the capital of bigger capital projects. So I would sort of interpret market wise, there's a little of preservation of CapEx going into -- in these 2 areas going into large capital projects rather than the larger improvement projects.

All right. And then the last one for me is regarding kind of the earnings outlook on the second half where you are essentially guiding flat to growing earnings. And could you maybe talk a little bit about on the contribution of Severn in terms of any seasonality on the business? And any kind of integration, let's say, headwinds that maybe would kind of curtail the earnings contribution in third and fourth quarter?

Yes. Severn, as you said, we're very happy with the Severn acquisition. It will give us a slight tailwind going into the second half. It's hard to talk at this stage. We're very early in the integration. So far, we don't see sort of bigger seasonality in that business. It's also important to remember, it actually consists of 3 businesses with different industrial focuses. Then also -- they are also impacted of the geopolitical situation, particularly in the Middle East currently. But some slight tailwind there going into the second half, but difficult to talk about the actual seasonality in that business at current.

The next question comes from Panu Laitinmaki from Danske Bank.

I have two. Firstly, on the strategic review. I understand you have only just announced it, but can I ask about the potential kind of negative synergies in terms of group costs? So if you separate that 2, what kind of additional costs should we assume for the new business? Like is the kind of current group sales-to-sales percentage you guide for that? Or any comments around that?

Yes, Panu, as you sort of also alluded to in the beginning of your question, it is very early days on that. So far, we said we are initiating the strategic review. Part of that is, of course, also to look in what are potential dissynergies on that, including a group cost structure. But I think just like we've, what to say, we've shown the last 12 months at least, we are going into a much leaner or sort of committed to driving a very lean organization. You saw from Katri's presentation, EUR 79 million less SG&A cost versus '24. So it's a focus area. How much it will be, that's -- if we should come back and say, this is what we're going to do, there'll of course be more information on that topic.

Okay. Secondly, on Q2 performance in the Biomaterial. So it was quite a bit better than Q1. So could you kind of describe what drove the delta? Was it positive growth in services compared to Q1? Or was it more cost savings coming through or something with the equipment projects?

Yes. Generally, strong execution. Of course, services came out stronger, especially in parts and consumables which drive good bottom line. So a little bit better service mix than in Q1 this year. So that, of course, helped. Also some of the cost measures also coming through on that.

We also executed quite, what to say, an accelerate on some of the capital projects, Arauco being one of them, making sure that we're actually getting ahead of the curve there to finalize that next year. So strong delivery on project side, a slightly better mix and on the service side and some growth on the consumables, and then a cost containment, I would say, as well. You also will know that we said in June that we would be doing some temp layoffs here in Finland, in particular. And that also given a little bit of tailwinds in June, but the main part of that will actually be coming in the second half.

Okay. Can I just ask as a follow-up. Was there something unusual in the Arauco kind of deliveries between Q1 and Q2 that Q1 was a bit weaker and then Q2 stronger. So just thinking like is the run rate something in between of those or? We're thinking of what...

No, no, not really. We've just been very, sort of, keen on constantly staying ahead of the curve on that one.

The next question comes from Sven Weier from UBS.

The first two are also on the potential breakup. I was just wondering what drove the timing of the announcement, because typically, these processes go become a bit of more an active shareholder who asked for these things and then this happens, but you guys seem to be more proactive. And did you also sense more shareholder pressure in the last couple of months to do this? Or what really drove the timing and the general decision to do the strategic review?

Yes. Thanks, Sven. I mean clearly, like I said, it -- last year, we came out with the Capital Market Day. We sort of split the business into 2 different segments, the Biomaterial segment, and Process Performance segment. We then executed this -- we've looked more into inorganic growth as well and we now executed the Severn acquisition. So it's sort of a very natural point in saying, we have 2 very strong segments, both on their own, of course, also together.

So now just to go take time to sort of take a step back in the whole and ask the strategic question to yourself is, would these 2 segments be stronger and easier and better developed as stand-alone? Or is the current structure actually a good setup for developing these 2 segments? So it's just a natural progression of the strategic thinking from management and the Board.

So it was not really that during investor meetings in the last couple of months that there was an increasing kind of shareholder pressure to do this?

No. I mean, we're hired to make sure we run the business in the best possible way, and that's where we need to take care of our develop the shareholder value, but also deliver to our customers the best, strongest value proposition, right? So that's -- that's what it's all about.

And I also had a similar question to Antti, regarding the synergies between the automation business and the pulp and paper machinery business, because when you guys bought the business more than 10 years ago, I thought there was a strong business logic to do this. We could probably argue Metso should have never spun this -- spun-off Valmet without. And also given that Andritz has this as an integral part of their offering. So -- but I did understand you correctly that having a spin-off of Neles alone is not an option. So either they go together or you keep the structure as it is.

Yes, I think that that's -- there's 2 ways of looking at it, Sven, that's what, of course, goes into the review. One is, how to preserve that offering in the Biomaterial Solutions and Services with the automation, how do we actually -- can we create that and preserve that at an arm's length basis. That's one part.

The other part is also that to your second part, which is that there are also synergies between flow control and automation. And there's a much stronger overlap there in the customer segments or customer industries that they're serving than into the biomaterial, which is now less than 1/3 of the overall PPS business.

A final question I have is just on the competitive environment on the board machine side because, obviously, we saw now for the first time that Andritz won a huge project in Africa. I mean, are you generally seeing more competition on those board projects? I mean, you won 1 in the quarter, obviously, but what's the competitive intensity that you see? Has this gone up quite a bit this year? Or what do you observe?

I think the competitive situation is unchanged, and I think we've taken our fair share of the market this year so far on board machines.

The next question comes from Tom Skogman from DNB Carnegie.

This is Tom Skogman from DNB Carnegie. I would like to start with a question about the cash flow outlook as we are approaching the end of the Arauco delivery.

Yes. I mean, I think, Tom, from an Arauco perspective, I think there's still a bit over 12 months left on that delivery. But Katri, I'll let you comment a bit more specifically on the cash flow.

Yes, I think in general, as you saw from the presentation and from the numbers, the cash conversion for the last 12 months was below our average. And it's good to remember that there are these quarterly fluctuations typically in net working capital, and that then has an impact on the cash flow.

But when we look towards the future, we continue to expect cash conversion to improve during the year and it's supported by normal project phasing and working capital being very, very disciplined and still good to remember that the quarters can fluctuate.

The reason for really asking this is that Valmet without Neles used to have more or less kind of a net cash situation. And now after paying for Severn, you will have a quite big debt position. So I just -- I understand it's early days, but is there kind of a risk that you need to raise money to make sure both companies have strong enough balance sheet and that Process Performance don't start with a too heavy debt burden holding back acquisitions?

Good question, Tom. I think -- but to take, I think, about 2 things. One is when we did the Neles acquisition, the proportion of projects in the biomaterial business versus the proportion of service was much higher. So therefore, there was a much higher proportion of prepayment into these projects. So that, of course, impacted the net working capital positively.

Then on the debt leverage, I would say, even when we add the Severn, we have a debt leverage that is actually lower than last year. So I don't see any challenges on that.

And could you open up a bit on the M&A pipeline?

That will improve over the year with the strong -- Sorry, go ahead.

Yes. Could you open up a bit about the M&A pipeline in Process performance? You have done some very good acquisitions. And I'm not now talking about the next 6 months, rather like 5 years ahead? I mean, should we expect that business as a stand-alone to continue on this kind of path of finding a lot of acquisitions? What is the big picture in the M&A funnel there?

Yes. I think what you can expect is twofold. One is we put more emphasis on scanning the market for suitable acquisition targets where the strategic fit is strong and where we are good owners of the asset. So that's -- that will just -- that has sort of strengthened, and we have put more effort and resources behind that. So if we find suitable targets, expect us to continue doing good value-accretive deals on that one.

And then on the profile of the Biomaterial business, could you somehow turn that business into more of a service business and less of a project business? Would it be possible to kind of change how you sell, for instance, large pulp mill projects and really market the business as a service business model?

I think -- first of all, I think we have turned it already into a much more aftermarket business. And that's really also when we talked about in the Capital Market Day last year, we said what we look at is, yes, we do the projects. How we deliver those, I don't think that will actually change much over the years. I don't see sort of a big path for that. However, we do see that the growth opportunity really is in the aftermarket. That comes, of course, when I say aftermarket, I mean sort of everything from the consumable, the parts, but also to the mill improvement projects, large improvement projects, bigger rebuilds and brownfield.

We know -- if we think about the technology age of the 2 very mature markets, Europe and North America, there are quite big opportunities in terms of helping our customers there driving or having a more efficient equipment so that they can actually be more competitive in the market. So we are pushing sort of -- this is how we see the growth. This is really about the aftermarket. The projects are sort of cream on the cake.

Okay. And then finally, on the Automation Solutions orders. I think they were slightly soft this quarter. Is there any reason to that?

Sorry, I couldn't hear what you say, Tom.

The Automation Solution orders, I mean, I think they were a bit soft this quarter. Is there any reason to that? And is it just temporary or any structural change?

No. I think this is just sort of between the quarters that it might varies a bit. We had also a strong Q2 last year as well. But we had some good wins, particularly in the marine business, which we're very happy about that also sort of fuel this thing about -- we have such a strong value proposition outside of the pulp and paper business as well with these with these technologies, both in Automation Solutions, but also in Flow Control.

Yes, we are a market leader in those two areas in the pulp and paper, but it's also 2/3 of the business or -- yes, 2/3 of the business is supporting other industries in a very strong way.

The next question comes from Christoph Blieffert from BNP Paribas.

I would like to start with the potential separation, and this is now a technical one. If we would like to allocate the group level, the group net debt to the divisional level, what would be a suitable approach to do that?

Yes. Thanks for the question, Christoph. I mean, this is, of course, very, very early days, and this is way too technical to be answering now. I think what's important to note on the net debt is that we are better than last year despite the Severn acquisition. So that's a positive thing. If it works for 2 entities, should we split it up, it will also work for -- well, it works for 1 entity in the sum, if it should be split it up, it would also work for 2.

Of course, these 2 entities would have different cash requirement or different requirements, and that will be taken into account should we get to that stage in terms of the balance sheet.

Okay. And the second question is more strategically on your -- on the trends we have been seeing in Service revenues and Biomaterial. Do you think the change in the operational model has negatively impacted the operating performance and has contributed to the revenue decline you have faced in the first 6 months of the year? Or has this been simply driven by the adverse market conditions?

Clear, we have had some quite challenging market conditions in the last 12 years. What I would also pay attention to is the operating model have been driving EUR 79 million bottom line SG&A impact for the last 12 months. So that's, of course, a major contribution to the profitability levels that we are seeing now, despite the softer market that we're also experiencing in the Biomaterial.

And also, you should also think about that the big change on some of these servicing is actually on the mill improvement projects.

The next question comes from Mikael Doepel from Nordea.

Mikael Doepel from Nordea. Two questions, please. Firstly, on the project business pipeline, how would you describe that now? I mean, I think you've got 1 order from China in the quarter. You've been talking about the good pipeline over there, we've seen the CMPC project being a bit delayed. Could you talk a bit about what you're seeing out there when it comes to the big projects and what your expectations are?

And then secondly, on the service outlook overall. So I think you're guiding for a soft market. At the same time, you're saying that you're seeing some signs of improvement. I was wondering, how we should read this? I mean, as you pointed out, we have seen multiple quarters of weakness already in this business. Is it fair to assume that slight improvement, perhaps coupled with weak comps should actually mean that this business should turn back to growth in the second half? Or how do you view the situation?

Yes. Good observation, Mikael. If you just take on the project pipeline first, like I said, we do see better activity in terms of discussions with customers than what we saw maybe 6 months ago. So that's, I think, is a positive. Of course, difficult to predict sort of between the quarters. But I would also emphasize that this quarter, which I see as a positive as well was that, yes, there was 1 bigger order that was sort of triple millions. However, the rest of it was very broad-based, both in terms of geographies where they're coming from, but also in terms of the business area that they were coming from.

So both tissue, both boards, both pulp, all gotten large and sizable orders and across different geographies. I think that's a positive that is not sort of a 1 punch and then it looked good, but actually that it was a good foundational about that. But also that the conversation we have with customers is also fairly broad-based as well.

Then, as I said also, it is a little bit hard to predict between the quarters. On the service side, yes, good to see that parts, consumables, stabilizing, coming back up, customers being more focused on operational efficiency and actually maintaining the equipment rather than sort of really maybe sweating the assets a little bit, which have had -- we've seen in the past maybe 12 months also that sharing of spare parts between sites has also maybe been reduced now or has come to sort of a natural low level.

Then -- but I do want to -- and that's what we're emphasizing a little bit, the visibility is and has been lower the last 12 months than what we've actually seen historically.

[Operator Instructions] The next question comes from Antti Kansanen from SEB.

Yes. My question is on, let's say, cost inflation and backlog and order margins. How do you see kind of pressure coming from your suppliers and obviously, freight costs as well compared to the open kind of project backlog that you have and the new orders that you have taken on the quarter, going into kind of next year's kind of the margin forecast? Is there pressure on margins? Or can you price them accordingly?

Yes. Clearly, this is an important area for us also as management constantly sort of having visibility to the inflation, as you're very right so that freight has gone up quite substantially lately. And that is, of course, something that we have both been, I would say, successfully been on our whole sourcing side, but also on the pricing actually passing it the cost inflation on.

And maybe I should also emphasize that the, I'd say, the strategic initiative we made last year with forming our global supply function and recruiting also people from the outside, really setting a very, very -- the strongest team you can -- you can think of have paid off. So even though they might start a little bit late in terms of end of last year and getting the team together, they have actually delivered in an accelerated way for this year.

So we've seen double-digit impact sort of low teens in this first half, and we'll see the same thing in the next half. We also have the bold action we took on some of the sites, both in Europe and in China that will have a EUR 200 million impact starting in '27 as well. So that is an important part of us staying competitive, both in terms of being competitive, but also making sure that we preserve the margins.

All right. And then regarding kind of the time lines, revenue contributions from the Arauco project, is there anything you would want to guide in terms of second half and how much is still left for next year in terms of the project revenues?

Antti, Katri here. We have been saying in the call earlier that we are expecting roughly EUR 400 million for this year, but actually now due to the things that we have already discussed today, we are estimating that the revenue recognition would be around EUR 500 million this year and then the remainder goes to next year. But now it's very, very active.

And how much was it last year? Just a reminder.

It was roughly EUR 400 million.

There are no more questions at this time, so I hand the conference back to the speakers.

Okay. There are still a few questions here on the platform that were and already addressed. So first of all, does the guidance now include the Severn acquisition, could you please confirm?

Yes. Like I said, I mean, we will get a slight tailwind from the Severn acquisition. We also will get some tailwind from the cost saving actions we've taken, not just the sort of the cost control action we've taken over the year, but also the temporary layoff that we announced earlier in the second quarter will give us some benefit into the second half of the year. So year-to-date, we're slight ahead. We had a good trend in Q2 versus Q1. And then Severn gives a little bit of a tailwind. The big swing factor is the service, especially on the parts and consumables and how we can get that through the order book and into net sales.

And then a follow-up from Christian here. So could you consider selling one of the segments rather than listing?

I think, yes, we're more or less -- I mean, I addressed that a little bit earlier today in the call. I think -- so what this review is about is really about sort of would it make position us -- making us in a better position to really develop these 2 segments if they're stand-alone rather than together. So then, yes, that's why we come out and say 2 potential listed companies. Of course, the Board will support all shareholders and make the best decision for the shareholders and how to actually develop the company going forward, which means that there can be -- there can, of course, be other ideas coming to the table, and then we'll have to look at those.

Sure. Thank you, Thomas. That's all also from the webcast. So now handing over back to you, Thomas, for final remarks.

Thank you very much, Pekka, and thanks, everyone, for joining us today. I would like to thank all our customers for their trust and but also all the Valmet employees for their commitment and hard work throughout the quarter. It's definitely been a challenging quarter.

Let's just look -- open the news, and you will know that lots of curve balls are coming when you run a global company. So really well done by the 20,000 Valmet employees. And as you've heard today, we have an important period ahead of us. What gives me sort of real confidence, our confidence is the strength of the business that we built at 2 different segments. The commitment of our people and the opportunities that we see ahead of us.

Regardless of the outcome of the review, those fundamentals do really remain unchanged. We have strong value propositions. We have a strong offering, great committed employees. So we continue running the business with full speed ahead.

Before we close, I do want to hand a special thanks to Katri. This is your final earnings call. I think #17th as CFO and actually the 8th together with me. I do want to thank you for a very strong support, great discussions in terms of, yes, everything from how to run the business, strategic decisions, but also preparing for these kind of calls and going through everything that -- all the details that comes with that. So huge thanks.

And to those ones on the call who may be also are following where Katri is going, do make sure you ask some really challenging questions, particularly in Q3 this year when Katri has just joined and is very new. On that happy note, I do thank you very much for joining, and enjoy your summer, and see you soon after the summer holidays. Take really good care and all the best.

Good morning, everyone, and welcome to Valmet's Q1 results webcast. Before we start, a short practical note, today's webcast is audio only due to a flu in the team. Thanks for your understanding. I'm Pekka Rouhiainen from Investor Relations, and with me today are Valmet's President and CEO, Thomas Hinnerskov; as well as CFO, Katri Hokkanen.

Today, Thomas will start with an overview of Valmet from the customer and investor viewpoint and go through the first quarter performance. Katri will then discuss the financials in more detail. After that, Thomas will return to cover the guidance and short-term market outlook before we open the lines for the questions. And as usual, you can submit written questions through the webcast platform at any time.

But with that, let's get started. Thomas, the floor is yours.

Thank you, Pekka, and good morning, everyone, from me as well. The headline message for this first quarter is that we continue to execute our strategy in an overall demanding market environment, while sales mix had a clear impact on our profitability. Customer decision-making remained cautious and the geopolitical situation decreased visibility. Against that backdrop, our Process Performance business continued to deliver strong margins, while Biomaterials business was impacted by project phasing and the mix. Importantly, the benefits from the early and decisive operating model actions we took last year are clearly and continue to be clearly visible, supporting earnings quality also in a softer market.

Before we go into the quarter in detail, let me briefly remind you what Valmet is fundamentally about. Our strategy is built on improving the performance of industrial assets across their life cycle. We help customers run their operations reliably, produce more efficiently with fewer resources and operate with less manual effort. We do this through services, upgrades and automation, often in operations that are critical to our customers every day, but also critical to a lot of us in society. For shareholders, this is important because it means recurring demand from our large global installed base and less dependency on capital projects. So while quarterly results matters, the overall direction of the company is perhaps even more important. We are building a stronger, more resilient Valmet by creating measurable customer value every day.

In short, Valmet today is far more than a project company. We're a life cycle performance partner for our customers. This case is a good example of how our strategy translates into real business opportunities beyond our traditional markets. Today, more than 500 advanced vessels globally rely on Valmet's automation solution in mission-critical operations every day. For customers, these systems help save cost, reduce risk and support increasingly complex vessel operation.

For Valmet, this expands our installed base into another attractive life cycle market with long asset lives and recurring revenue potential over decades. It also demonstrates the strength and the scalability of our automation business, I think, something we all as shareholders, but also us here in Finland can be truly proud of. With that said, let me turn to the first quarter highlights.

Orders received amounted to EUR 1.1 billion. Orders decreased 15% organically, mainly due to the timing of large capital project orders, which can vary significantly between quarters. This also reflects the current overcapacity in the global pulp and paper markets where customers remain selective with large investment decisions. At the same time, our business is supported by a large global installed base built over decades. So every day, customers rely on Valmet to improve reliability, efficiency and performance through our services, our upgrades and our automation. Large projects remain an important part of our offering, but they are only one part of many ways that we create value for our customers on a daily basis.

Net sales increased to EUR 1.2 billion, 9% up organically. Growth was driven by a higher share of capital projects revenue. That sales mix towards capital projects and smaller mill improvement projects did impact our margins. The comparable EBITDA declined to EUR 114 million with a margin of 9.2%. Important to note that the negative FX impact was also visible in the comparable EBITDA, and Katri will come back to this in more detail. At the same time, Process Performance Solutions performed strongly. The orders grew faster than the overall market and comparable EBITA margin increased to 18.5%, very strong execution by the team in the Process Performance Solutions.

Our strategy is progressing. Last year, we renewed our operating model and made a number of difficult decisions early on, and I'm really pleased to see how these actions continue to deliver tangible benefits to us. Cost savings supported performance across both segments during the quarter. Our comparable SG&A costs are now EUR 66 million lower than in 2024, reflecting the impact of these significant measures that we've taken. In parallel, we continue to advance strategic plans to optimize and simplify our footprint. These actions improved our speed, our responsiveness to customers while also strengthening cost competitiveness and deliver reliability to our customers.

Like you can see on the graph, this one -- it was one of the slower quarters in recent years in terms of orders received. The main driver was low capital project intake. Furthermore, the comparison period included a large pulp mill rebuild from North America last year. Biomaterial Services orders declined 7% organically. The service market overall remains soft as customers continue to defer purchases, reduce inventories and prioritize minimal maintenance. In contrast, Process Performance Solutions orders increased 4% organically, reflecting a return to low year-on-year growth after a weaker conditions seen in late 2025. This clearly demonstrates the strength of our life cycle offering and the value that we bring to customers.

Next, let's take a closer look at the segments. Starting with Process Performance Solutions. This segment serves a broad global customer base across a range of industries. In the first quarter, around 63% of orders came from customers outside pulp and paper. A good example is marine automation, where more than 500 advanced vessels globally rely on Valmet solutions every day. Process Performance is also a highly important earning contributor, representing around half of Valmet's comparable EBITDA in the quarter. This demonstrates both the diversification of our business model and the growing importance of Automation and Flow Control within Valmet.

First quarter orders increased 4% organically, while similar development in Flow and Automation Solutions. This is a solid result in the current market environment and reflects growth above some of our key peers. Net sales grew 7% organically. Comparable EBITA increased to EUR 63 million and the margin improved to 18.5%. While the improvements were driven by cost savings from operating renewal and supported by elevated product margins during the quarter, it is nonetheless a very strong execution by the team. As communicated earlier, we do expect margins to ease somewhat from these record levels as we invest back into growth, but overall, profitability remains very solid.

Turning to Biomaterials Solutions and Services. Orders decreased mainly due to capital project timing, especially in pulp, where the comparison period included a large modernization order. Biomaterials Services orders declined 7% organically as the soft markets continued. Net sales increased 10% organically, driven by higher revenue recognition in large projects and smaller mill improvements. The Arauco project is proceeding according to schedule and budget, and we're very pleased with the progress so far with roughly 50% of the project's net sales already booked. So this mix shift was reflected in the margins and the comparable EBITA margin decreased to 7.1%. Importantly, execution on projects remained solid. Cost savings from the operating model renewal did partially offset the mix impact.

With that, I'll give the floor to Katri to hear more in detail about our finance for the quarter.

Thank you, Thomas, and good morning, everyone. I will cover the group level development of key financials in my part, and let's start with the net sales and comparable EBITA. Net sales increased 5% year-on-year or 9% organically and net sales grew in both of the segments. FX had a big negative impact of approximately EUR 44 million, and the biggest factor was the weakening of U.S. dollar to euro compared with the first quarter last year. Comparable EBITA was EUR 114 million with a margin of 9.2%.

Sales mix shifted towards large projects and smaller mill improvements. Despite higher net sales and cost savings, profitability declined due to a lower gross margin. Furthermore, FX had a significant negative impact on the comparable EBITA. And it is good to note that with current FX rates, we estimate that the impact will be smaller during the remainder of the year. The sequential decrease in both net sales and profits from Q4 follows a normal seasonal pattern and was as expected.

Let's then look at how our cost base has developed in the recent years. The operating model renewal implemented last year is clearly visible in the cost base. And on a last 12-month basis, comparable SG&A expenses are now EUR 66 million lower than what they were in 2024, and that is almost 1 percentage point compared with net sales. While the operating model renewal brings savings, it is fundamentally aimed to improve the customer experience through the life cycle focus, which is particularly important in the current market environment.

Order backlog stood at EUR 4.2 billion at the end of the first quarter, and this provides good visibility for deliveries and net sales going forward with around EUR 2.8 billion expected to convert into revenue during 2026 based on current schedules. While slightly lower than year-end, the backlog remains at a healthy level, and our focus is on disciplined execution, profitability and cash flow.

Let's now turn to our cash flow development. Cash flow from operating activities decreased to EUR 35 million in the first quarter, and this decrease was mainly related to an increase in the net working capital. The reported net working capital of minus EUR 131 million includes a EUR 249 million dividend liability, which doesn't have a cash flow impact. Excluding the dividend liability, net working capital increased by EUR 89 million from year-end, and this was mainly driven by project phasing and timing effects. It is important to bear in mind that quarterly fluctuations in cash flow are typical for Valmet, and we continue to expect cash conversion this year to be in line with our historical average of over 90%.

Balance sheet remains strong. Gearing was 37% at the end of the first quarter and well below our 50% target. Net debt-to-EBITDA stood at 1.45 and liquidity remains healthy. We expect to close the Severn acquisition towards the end of the second quarter, and this will have an approximately 15 percentage point impact to gearing. And we are comfortable with that level given the strong cash conversion ratio our business inherently has.

Comparable ROCE improved to 13.4%. And as shown in the graph, capital employed decreased by around EUR 230 million compared with 2024, which supported the returns. Our long-term target is 20% by 2030 to be driven by profitable growth, higher comparable EBITA margins and disciplined value creation creating capital allocation. Adjusted EPS declined, and this was primarily due to items affecting comparability, which were related to planned strategic footprint measures.

This slide gives you a snapshot of all of our figures at once, many of which we have already covered in detail. From this table, I would like to highlight the items affecting comparability, which amounted to minus EUR 32 million, again, related to strategic footprint measures in Sweden and in Poland. The effective tax rate was 23.6%, and this is below our long-term average of 25%, which we expect also going forward. The deviation in the tax rate in the first quarter from the 25% was due to timing effects.

In summary, net sales increased, but the mix impacted our results. Furthermore, we had further headwinds from FX, which we do not expect to burden our Q2 results to the same extent given the current FX rates. We expect the cash conversion ratio to remain at a solid level, also full year 2026 and look forward to starting the integration of Severn into Valmet towards the end of the second quarter.

With that, I hand it over to Thomas to go over the guidance.

Thank you very much, Katri. We reiterate our guidance for 2026 issued on February 6 this year. So net sales are expected to remain at previous year's level and comparable EBITDA is expected to remain at previous year's level or increase. The guidance is supported by our further cost actions announced this morning as well as smaller negative impact from FX, assuming the rates remain at the current levels. In terms of the short-term market outlook, we were pleased that the Process Performance Solutions markets have returned to low year-on-year growth. This development was in line with our expectations communicated in the Q4 call as well. Biomaterials Solutions and Services should improve slightly as a whole. However, this reflects the very low project activities in Q1, which serves as the baseline for this outlook. The market for Biomaterial Services is expected to remain soft in the next 2 quarters and customers are likely to remain selective in their investment decisions. At the same time, geopolitical uncertainty has increased. Direct impacts on Valmet are limited, a bit over 1% of our net sales come from the affected Middle East region last year and very little own footprint, personnel or suppliers. The main impact relates to logistics costs and general economic sentiment and how that impacts our customers' demand. These are industry-wide and managed also through commercial actions to mitigate the inflationary impact.

So to wrap up things before opening the lines for questions and answering. First of all, strategy execution progressed and our early cost action continued to support our performance also here in Q1. Sales mix did impact Q1 margins, but our guidance remain unchanged. The guidance is supported by further cost actions, including the EUR 8 million additional short-term savings we announced today. Also, assuming current FX rates, the impact from currencies during the rest of the year, as Katri alluded to, is expected to be smaller than during Q1. I do remain confident and also excited about the path that we are taking Valmet on and have full confidence in the Valmet team to deliver the 5% plus 15% equals 20% by 2030 by bringing long-lasting life cycle value to our customers globally.

So with that, I will hand over to Pekka.

Thank you, Thomas. We'll now move to the Q&A. [Operator Instructions]. So we have now received a few questions here in the platform. So I suggest we take them first. The first one being on the Middle East crisis. So how does the Middle East crisis impact Valmet?

Yes. Thanks, Pekka. Clearly, you need to sort of look at the Middle East crisis from 2 angles. There's like I just alluded to the direct part, roughly 1% of sales last year, similar levels on our OR, not that many people there, less than 100. So that impact is, of course, relatively limited. However, the indirect impact, which is also hard to measure, is there, right? We see supply chain impacts in terms of the energy costs, the logistic costs, the overall inflationary pressure coming out of that conflict, then the whole economic uncertainty, which drive both consumer confidence and therefore, the consumer spending, our customers' demand -- or the demand for our customers' product, which then lead to sort of deferred investments and also savings programs with some of our customers. So the indirect is bigger than the direct, but harder to measure.

Thank you. Then a question on the Biomaterial Solutions and Services segment. Why did the margin in Q1 decrease?

Yes. Like we said, a lot of mix impact, both in terms of the split between projects, which actually proceeded really well. I'm very happy with the Arauco project, how that is progressing. More than 50% of the sales is recognized now that also gave a bit of a spike in Q1. So that mix between projects and service is off or has changed, but also the mix within services towards more improvement projects has impacted them. And then as Katri alluded to, there's also a little bit of FX impact.

All right. Good. Then those were the questions at my iPad so far and use that also going forward if you want to use that platform. But we'll now go to the telephone lines. So please.

[Operator Instructions] The next question comes from Antti Kansanen from SEB.

A few questions from me, please. I'll take them one by one. And I will follow up on the margin questions on the Biomaterials side. And I mean -- I think looking sequentially versus Q4, there's a bit of a step down in terms of margins. And just a question that I guess you guided that the Arauco contribution run rate would be fairly similar, let's say, start of this year versus last year or at least on a full year basis. So was there a big change on the revenue recognition from that project? And do I understand correctly that in a sense, it's a normal profitability considering the mix? And from here onwards, the mix improvement would be the primary driver for any margin change? Just a little bit more color on that one.

Good question, Antti. Yes, Arauco continue, as we said in Q4. However, we did fast forward some of the things in order to also mitigate some of the impact from the Middle East crisis to make sure that we actually have things on site. So that was just sort of us speeding up certain things, which then led to a bit more revenue recognition than originally fully planned for Q1. Then you're absolutely right. I mean if you think -- it really is back to 2 parts to it on the bio margin is that we have more project sales with lower margin. That means also proportionately less service sales. In the service sales, there was a proportion -- bigger proportion of improvement projects, which you also remember back in Q3 and Q4, that's actually where a lot of the orders were coming in on, which we talked about back then. So that gave a bit of a mix swing within the service side of things.

What I'm very happy about is that the customers are coming to us. I mean, given the whole situation, actually continue to invest into these improvement projects to be more competitive in their markets. And that's what we're trying to help them with, even though if that impacts our margin negatively overall.

And may I still have one comment regarding the Arauco. So the revenue recognition for the first quarter was about EUR 170 million. And for the full year, we are expecting roughly this EUR 400 million. So no changes in that. It was a bit more tilted towards the Q1.

Exactly.

All right. That makes sense. But a bit of a follow-up on that one and regarding kind of the Arauco deal and kind of where you would be exposed to any cost inflation regarding logistics or anything else? So kind of risks going forward, how well do you think you are mitigated by those factors that are not necessarily covered by clauses or agreements with the customer or suppliers? I mean logistics comes to mind first.

Yes. We've been very upfront early on, on securing both the freight cost and the actually freight capacity as well. So overall and doing all the procurement up very early on in the project, also what's going to be delivered later during this year. So I'm quite confident of the overall delivery of this and also that we should not see, as we see it now, any negative margin impact compared to what we -- or any -- compared to plan.

All right. And then the second follow-up was then on the services side going forward. I mean you kind of repeat the demand guidance that you have on the previous quarter, so it remains soft. Is there any kind of incremental change that you see in the pace of recovery? And how should we then think about the mix within services going forward regarding kind of this impact that you had on Q1?

Yes. It's, of course, that's sort of a little bit of -- as we said, softer market. Clearly, we've seen some of our -- a lot of our customers are struggling in this lower demand situation that also the Middle East is impacting on. So they're taking short-term savings actions, which means they're reducing inventories. They do minimal maintenance, right. They're deferring investments unless they have very short payback times. So that's what we are sort of trying to help them with to do the right things given the difficult situation they are in. And then there's -- for us, of course, there's a volume and mix impact. So that also means that the mix impact we talked about, but also the volume -- the last euro sold in the service business have already been covering all the costs and the fixed cost. So there's a high drop-down rate to the bottom line, right?

Okay. And then lastly, on the full year sales guidance. If you look at the backlog, I guess you had it on the presentation that it's a little bit lower deliveries for this year versus where we were a year ago and then a bit muted service market still and low growth for automation. So where are the opportunities to grow sales and kind of offset the negative factors that you are facing for the full year?

Yes. So that's -- of course, there's a lot of focus on the wholesale side right now, making sure that we do get a good -- or deliver our book-to-build so that we can actually invoice that in the second -- particularly in the second half of this year.

Okay.

So Antti, to add the kind of impact from the net sales that Q1 impacted, minus EUR 44 million in the net sales side. And if the FX rates stay at the current levels, then that impact will be smaller going forward.

The next question comes from Mikael Doepel from Nordea.

Maybe I could just start with a brief follow-up on the question about the service or the aftermarket business for pulp and paper, if you could get a bit more granularity in terms of the regions, what you see out there? I think the operating rates are -- for example, the U.S. looks a bit stronger than Europe. What about Asia? If you could talk a bit about that. And also, I mean, if you look at this business historically and in the historic cycles, it doesn't tend to decline for that many quarters in a row usually. Just wondering if there's anything in this cycle that you would point to that should make us think different at this time around.

Thanks, Mikael. Yes, clearly, there are regional differences, as you alluded to, also coming a bit from the operating rates, which means that we've actually -- I say, North America is actually not doing too bad. Of course, we have the FX impact in the Q1 from the U.S. dollar there. But that market is progressing quite well, high operating rates as well, strong focus on improving the relatively old asset base that is there. So also on the improvement projects, that is an important market where we help our customers a lot. And then clearly lower operating rates in China, where also the overcapacity mainly is to be found, right? So that's, of course, on the other end of the spectrum in terms of demand.

Then a bit on the future, it is clear that this Middle East crisis are throwing sort of clouds over how -- what's the economic development in the world, how does consumers start -- how are they buying or spending and how does that then impact the packaging market and therefore, our customers there, which is a little bit hard to really sort of predict going forward.

Okay. It's clear. If I then can just ask on the project business going forward. I mean, yes, you mentioned that Q1 was fairly thin on the project overall, you expect to see a bit of a pickup there. Maybe you could talk a bit about the pipeline you see out there. And in particular, if there's anything you could say about the bigger greenfield projects, especially in Latin America, but also what you're seeing in China. I think you have mentioned, for example, in China, having multiple projects in the pipeline previously. Are those still there? Are they being postponed? If you talk a bit about the project pipeline would be great.

Yes. As we also alluded to when we reiterate our guidance and the short-term market outlook is that we do expect the project business to pick a little bit up after this quite slow quarter. Of course, as you know, China is one of the markets where this is happening despite that's also where the biggest overcapacity actually is, but there is some room for more efficient capacity and, therefore, also taking less efficient local capacity out in the Chinese market. I think the important part here is how we're actually also using that project resource, that capability, technical capability, both in bio, but also in our PPS business to really help our customers in their old installed base to be more effective and more efficient in that and therefore, more competitive in their market. So we saw that also in the PPS, there was more service than project this quarter, which also helps improve -- or impacted positively on our margin actually in that segment. So a lot of efforts shifting from the greenfield to actually the brownfield, small or larger, right, modernization or improvement projects.

So that's also why this...

A brief follow-up on that.

Yes, go ahead, Mikael.

Just conceptually, I mean, how do you look at the market currently? Because what we have seen here is that there's been a lot of investments in China. They continue to invest. It's more integrated capacity on the pulp side of things. Do you see that sustained going forward as well, discussing with your customers and their plans? And how do you see that impacting the planned investments in Latin America? Should we expect those to kind of fade now given the trend here? Maybe just some thoughts around that.

Yes. I think -- clearly, I think this year, we'll see a lot of integrated or say new projects that develops integrated mills in China, where it really is about driving that integration efficiency out of an overall mill and production within the China market. So that, I think, will continue throughout this year. And that's also what we say a little bit about this improved capital business.

Then when it comes to Latin America, it's clear that they are still the lowest cost producer of pulp. So they still have a competitive advantage there across all markets, I would say. However, of course, the world is not as predictable as it used to be. So that's, of course, putting a little bit of additional decision-making time on the individual projects. So it's very hard to predict when a project will be decided or not decided, right? But I think it goes back to Latin America is still the lowest cost producer of pulp or at least Brazil is, and that will give them an advantage also going forward.

[Operator Instructions] The next question comes from Tom Skogman from DNB Carnegie.

Yes, this is Tom from DNB Carnegie. I would like to focus a bit on your profitability guidance. Does this kind of include a pickup in the service business as you now have had like 3 slow quarters in orders there.

Thanks or [Foreign Language]. I'm not sure, but I think just on the guidance, just if we get back to that. I think as we said, we continue to expect that the service market will be soft for the next 2 quarters. We also said the outlook is more cloudy than it was when we actually gave out the original guidance back on the February 6. Hence, we are taking actions to further support that guidance, which, of course, a lot of that impact will come in the third quarter. So it really is about that we make sure that we take the right actions to create a stronger Valmet going forward, making sure that we balance the cost savings, but also making sure that we continuously have the capabilities that can actually deliver the demand that our customers are coming up with also a little bit on the longer scale. But clearly, we do expect that the second half will be better than -- a stronger second half than what we saw last year.

Yes. I understand that because I mean, customers cannot take production rates forever, of course.

Of course, they cannot reduce inventories either forever.

Yes. And then if you look at the Biomaterials margins, so I'm still a bit puzzled here because actually equipment deliveries were very strong, which should mean good operating leverage. So this low margin, I mean, service used to be, when you reported, quite stable. It could go down 1 or 2 percentage points when it was bad time. But now it looks like either the equipment margins and the orders you have taken in the last years are on a very, very low margin, even loss-making or badly loss-making even -- or then the service margin has collapsed. And I just wonder what's going on? I mean, you should be able to take out costs in service as well if it's just relating to low sales in service.

Yes. I think I understand your question, Tom. There really is 3 parts you need to think about. One is, we're happy with how the projects are performing, albeit, a lot of it comes from Arauco. Katri also just alluded to how much sales actually coming from that project as well. That's tracking very well. But that also means that the project part of the overall biomaterial business has increased. Then the overall service -- or when you then look at the mix within the service, then improvement projects are a much higher part of that, which also impacts the margins negatively as well. And then that overall gives this low bio margin. Then on top of that, there's a volume impact. And it's back to -- you alluded to a little bit -- we still want to have the sales force out there talking to the customers. We don't want to cut those because then we're sort of shooting ourselves in the foot. So we want to keep that. That also means that if you get the volumes up, then the drop-down rate of that additional volume is pretty big. So the swing factor of the last EUR 50 million of service sales is pretty big on that one.

Yes. I understand. And perhaps just a bit more short term about the biomaterials equipment sales funnel. What do you see? I guess -- I mean, you have a funnel, but how do you see things moving ahead?

Yes. So I mean, we do -- of course, we see the funnel. Some of that has also been a little bit delayed, which we expected to happen here in Q1, but now being pushed into Q2. As Mikael also alluded to from -- clearly, there's quite some activity in the Chinese market as well. So I think we'll we do it, as we said, expect a better next 6 months versus what we saw in Q1, right? However, I think we also need to see this as the real important part is, and that's why we should not be sad about even though it impacts the margin, the service mix that we have more improvement projects, it is super important that we do help our customers with improving the efficiency of their older assets so that they can compete in the market and also be -- have better margins themselves, and therefore, they have better cash flow to invest as well. So it really is important. That's also why we're keeping the capabilities on the engineering and so on to be able to support our customers with the improvements, the rebuilds, the modernizations.

And perhaps you could just continue then finally a bit about kind of the strategy for biomaterials because I think just from our kind of financial perspective, you can start to question whether it makes sense to book large pulp mill orders. Of course, long term, it's good for service, et cetera. But it's just when you look at the valuation, it really seems to hold down the valuation of Valmet that you still try to win orders in a very, very slow market. I mean could we see Valmet making more radical changes to its strategy somehow? And just tell customers that, yes, we can perhaps deliver some board machines and some pulp in the future, but the scope will be smaller and we will have a very limited capacity for the foreseeable future basically or something like that or could you divest some parts, do business differently in pulp to just deliver core components and not take EPC responsibility? I mean, are there things you are working on to change the scope to get up your valuation multiple?

I don't think we have a scope issue as such, Tom. I mean we see the Arauco that's an EPC goes really well. We are progressing well with that project. But of course, it is about making sure that we have a supply chain that is geared towards a -- or have a capacity that is leveraged more towards doing more improvement projects, more rebuilds, more brownfields and less greenfields because the important part, as you alluded to, really is about how do we help our customers optimize their installed base. That's where we bring value to the table, but that's also where the valuation is, right?

So clearly, I mean, a more aftermarket focus is where we are taking the company. That's also why you see that we took these supply chain actions of actually closing some of the capacity in Sweden and Poland. Of course, it takes a little bit of time to ramp it down and also the existing production that is actually there, potentially move some equipment to other places so that we can continue performing certain tasks. But that is -- I think that's what you can see part of the strategy, making sure we have a much more resilient supply chain that is also more geared towards service, including improvements and modernization, brownfield stuff. But I like your thinking.

There are no more questions at this time. So I hand the conference back to the speakers.

I guess there -- we are indicating there is one more question. So we'll take that question still, please?

The next question comes from Mikael Doepel from Nordea.

Yes. It's Mikael here again. Just a brief follow-up. I was just wondering, in terms of the Severn acquisition, I think you said back in Q4, it's not included in the guidance. Is that still the case, just to make sure.

Yes. That's the short answer. It's not included in the guidance. Yes.

Okay. Thank you. So I guess it's now time to conclude today's event. So Valmet's Q2 report will be published on 24th of July. But now handing over to Thomas for the closing remarks.

Thank you, Pekka, and thank you, everyone, for joining us today for a good discussion. I do actually really want to also thank our customers and shareholders for your continued trust. I mean, at Valmet, we remain focused on improving the performance of our customers' initial assets across the life cycle, which we just talked a lot about, especially in the Q&A. We are also taking decisive action to build a stronger and more resilient company. We believe we're well positioned despite the current market backdrop and the sort of overall challenging situation. But thank you all again, and I'm looking forward to speaking with many of you over the coming weeks, and have a very good day. Thanks.

Shareholders, a warm welcome to the Annual General Meeting of Valmet 2026. My name is Pekka Rouhiainen. I have acted as the Chairman of the Board since the Annual General Meeting of last year. I would first like to introduce the Board of Directors. And as I mention your name, I ask each member to stand up so that the meeting attendance can see you. We'll start with Annika Paasikivi, the Vice Chair of the Board and also the Remuneration Committee Chair, Bernd Eikens, the member of the Board; Jonas Gustavsson, member Anu Hamalainen and she's also been the Chair of the Audit Committee last year. Pekka Kemppainen, Annareetta Lumme-Timonen and Monika Maurer. Also, Juha Pollanen as a representative of the personnel has participated in the Board's meetings.

Furthermore, members of the Board until the Annual General Meeting, there was Mikael Makinen as the Chairman of the Board, Jako Eskola as the Vice Chair and Berlin Bar as a member. So until last year's Annual General Meeting.

So as you can see from here, there were lots of changes taking place in the Board last year. And I think that's one reason why the committee hasn't proposed new members to the Board. We'll hear more about it later. And the composition of the Board is built so that the Board can support the company and its management in strategic questions and in many other topical issues. where the members with their experience and competence can bring insight and value to. And it is important that the Board has sufficient diversity from many perspectives as to nationality, gender and many other aspects.

And of course, the members of the Board need to have thorough competence both on Board work as well as on the business. The Board convened 13 times last year. The members' attendance rate was on a high level. And we didn't have conflicts with schedules with any of the members. So if there were any absences, they were most likely due to normal codes and such. And our attendance rate was almost 95%, which is a very good level. The Board in its work focused on renewing the long-term strategy or actually on initiating it since last year's general meeting because the strategy itself was already approved during the previous Board composition.

Also, the operating model of the company was renewed at the same time, and we started to develop a new kind of a corporate culture. Last year, we also announced of a midsized acquisition of Severn Group. That has not been completed yet. We expect it to be finalized later this year. And it is an indication of the willingness and ability to invest in growing businesses.

The Board also annually visits the different sites of Valmet. Last year, we traveled in June, if I recall, to Luka in Italy, which is halfway between Florence and PSA and Luka is known for -- as a capital for soft paper production globally. So it has many important clients of Valmet as well. So we visited them in connection to this journey. And we also got to know the factory, the staff and operations there. And these visits give a lot of depth to the Board's insight and work so that when we had the opportunity to get to know other colleagues also during the trip in this Board. And that helps in collaboration and taking things forward.

Looking at the responsibilities of the Board of Directors, the key duties, of course, include ensuring that the company has the right leadership to execute the company's strategy. And it is the Board's job, of course, to support the CEO in his or her role. At the same time, however, the Board needs to be able to challenge constructively the management so that it can reach higher results and also to question perhaps the means to get there, while all the time bearing in mind that the Board is a representative of shareholders in the company administration, and therefore, it is our key duty indeed to make sure that your interests distinguished shareholders will be looked after during these terms.

Thomas, the CEO of the company, started about 19 months ago at Valmet. According to the Board's understanding, he has done a very good job with lots of energy and taken action also with operations as well as with the corporate culture and the changes taking place, and I'm sure you're going to hear more about these things in the CEO's review as well as on the financial performance of the year 2025. And I should mention that as an indication of us being on the right track is that last year, despite a difficult market situation that continues to be challenging, we could improve our EBITDA margin to almost 12% last year. And considering the market situation, I consider this a very good performance.

The Board has 2 committees in the Board, the Audit Committee that takes care of reporting on sustainability issues, risk management and overseeing critical projects for Valmet. Another key committee is the People and Remuneration Committee with the duties last year being a short-term incentive plan renewal as well as developing the long-term incentive plan further. And these different systems have been taken forward and Ms. Annika Paasikivi, I assume will mention them in her presentation. The objectives of the committee work, of course, is to strengthen the balance between company performance, sustainability targets and value creation for shareholders and to ensure that incentive structures remain competitive and support the company's strategic priorities.

In this connection, we would like to thank all the Board members and committees and committees members and their work for the fruitful cooperation and development of Valmet over the course of last year. Last year, was really all about the renewal in 2025 for Valmet. And from the Board's perspective, this is an area that has been dominant in the Board work and their discussions. The CEO will get back to this in his review. We have focused on the strategy renewal and starting the Lead the Way strategy. With the new strategy, we want to strengthen the customer relations and improve our competitiveness.

And in the inofficial session, the CEO already gave some of his own insights and thoughts on these things. And the company operating model has been streamlined so that it is actually more customer-focused. And the leadership team, management and the culture is constantly being renewed so that it will be in line with the new strategy. And this is also something the CEO commented on in the inofficial session, and I'm sure he'll continue on that in his review in this meeting.

During the year, we also made progress in some strategic projects. One of them was the acquisition of Severn Group that I already mentioned, and it will reinforce our business essentially. And the good performance level is also reflected in its financial success when we talk about Valmet. The market situation has been challenging, but also dynamic. And it feels that we're going from one crisis to another. And the resilience of companies and the whole market has grown over time, was improved over time, which doesn't mean that this crisis wouldn't have had an impact on us.

These events that we are currently reading about every day, every hour naturally has an impact on Valmet as I'm sure on many other companies' operations. But the decisions taken early last year gave a good foundation for the strong financial performance of the company last year. And as I already mentioned, the comparable EBITDA grew to 11.9% last year. At the end of my presentation, I would particularly like to thank the executive leadership team and the CEO for the work they've carried out for the success of Valmet and for their strong commitment to the company.

And I would also like to thank all the personnel of Valmet around the world for their good work for the benefit of the company's customers and the company's success. And I'd like to thank you, shareholders, for our journey together. Thank you. We then move on to Item 2 on the agenda of the meeting, calling the meeting to order. And we need to find a Chairman for this meeting, and I propose that Klaus Iilmen, attorney at law be elected to Chair of the meeting. I can't see any other proposals.

So I consider that Mr. Klaus Iilmonen has been elected to chair this meeting. Thank you.

Thank you. I invite Rasmus Oksala, the company's General Counsel, to act as Secretary of the meeting. And first, a few technical instructions on the meeting arrangements. The language of the meeting is Finnish apart from the CEO review that will be given in English. Therefore, we have simultaneous interpretation in Finnish and English in the meeting, and you can ask questions in either of the languages. [Operator Instructions] The meeting area is this hall. When leaving the meeting venue before the end of the meeting, we kindly ask you to hand out the voting tickets to meeting officials so that the list of votes can be kept up to date.

If I'm leaving, you wish to authorize someone else to represent you, this can be done by handing over the voting tickets and the proxy to the authorized person who must present them to the meeting officials. The right to speak is reserved to a person holding a voting ticket and speakers are asked at first to state their name, the person they represent or the organization they represent and the number of their voting slip at the beginning of their speech. [Operator Instructions] And I would also like to point out that this is a private event.

So any recording of it so that you can identify other people is forbidden without the permission. And we do have a company's own photographer here and that recording will be kept in the company's own use. We should also state that the meeting representatives, the members of the Board of Directors, the CEO, the auditor and sustainability reporting fire are present and also meeting officials, whereas there are no other persons present. And we shall discuss the issues of this meeting in the order they are presented in the agenda unless otherwise indicated.

Shareholders have had the opportunity to exercise their voting rights by voting in advance. The proposal subject to advanced voting is considered to have been presented without amendments at the general meeting. The general meeting can also be followed by video transmission. However, this is not considered as actual participation in the meeting. And with these words, we can actually move on to Item 3, election of persons to scrutinize the minutes and to verify the counting of the votes. According to the Companies Act, the minutes of the meetings are signed by the Chair and at least 1 person elected as scrutinizer of the minutes and the scrutinizer must therefore be elected at the meeting.

I propose that 2 scrutinizers be elected who would also act as the persons to supervise the counting of votes. And now I invite suggestions. Please can you give us your name and number of your voting slip and please wait for the microphone.

Martin Kidron, 280. I propose Demuttaken be elected as verifi and as of the minutes and scrutinizers of the counting of votes. Thank you.

Any other proposals? I can't see any requests for the floor. I take it. We can, therefore, adopt this proposal. So Dutta and Morken have been elected as scrutinizers of the minutes and supervisors of the counting of votes.

We move on to Item 4 regarding the legality of the meeting. The invitation to the general meeting has been published on the company website and in the stock exchange release on February 6, 2026. The proposals for the Annual General Meeting have been included in the invitation to the meeting. published in the stock exchange release, and they were also published on the company website. The documents are also available at the meeting and a notice of the publication of the notice of the meeting was published in Helsingin Sanomat on February 13 this year. The notice of the general meeting and the aforementioned notices of the meeting will be annexed to the minutes. The financial statements and the remuneration report have been available for inspection on the company website since February 24. So the documents have been available for inspection as required by the Companies Act.

I note that the meeting has been convened in accordance with the Companies Act and the Articles of Association, so it is legal and has a quorum. Are there any requests for the floor on this matter? I can't see any requests. Recording the attendance at the meeting and adoption of the list of votes, Item 5, A voting list has been drawn up of the shareholders present, their advisers and proxies indicating the number of shares and the number of votes held by each shareholder at the beginning of the meeting. There are [ 116,210,283 ] shares and votes representing approximately 62.8% of all the votes and shares of the company and 1,075 shareholders are represented at the meeting. And the list of votes will be annexed to the minutes.

And shareholders have had the opportunity to vote in advance on certain items on the agenda of the general meeting and the advanced votes will be counted in the voting result if a full count of votes is carried out on that item. And based on the votes cast in advance show that the majority of shareholders are in favor of the proposals made to the general meeting. So the list of votes is confirmed and will be annexed to the minutes. And should there be an actual vote taking place, we will then separately verify the number of votes and shares present.

And of the people present at the meeting, it's been stated that we have, in addition to shareholders, the Board members, the Chairman of the Board, the Vice Chairman and other members of the Board, the President and CEO and the auditor and also officers. I think we can now adopt the list of votes. No requests for the floor.

We then move on to the most important part of this meeting, presentation of the financial statements, the consolidated financial statements, the report of the Board of Directors, the auditor's report and the sustainability reporting, assurance report of the year 2025. The financial statements 2025, including the aforementioned documents as well as the remuneration report of the governing bodies have been available to the participants on the company website as of the 24th of February when they were published in the stock exchange release. These documents are also available here at the meeting venue.

We can start this item with the CEO's review. The presentation by CEO, Thomas Hinnerskov. Please, Thomas, the floor is yours.

Good afternoon, everyone. It's a true pleasure to see you all here today at the Annual General Meeting 2026. Before I start to present, I just really want to thank, first and foremost, my Valmet executive team, but actually all Valmeteers for all the hard work that's been doing and been carrying through the commitment, 365 days last year has been truly remarkable in a market that has not according also to the Chair's presentation, been that easy. It's been a challenging year, but I think we walked through it in a very good way. I also want to thank the Board for support during a lot of strategy discussion, a lot of operating model discussion and for all the challenges that they have given us in order to make sure we perform at our very, very best.

A year ago, I was standing here and I was talking about that Valmet was about to renew its strategy, renew the growth focus where we actually find the pockets for growth we're going to grow into the future. I talked about taking complexity out, simplifying the operations, simplifying Valmet. I also talked about these 229 years now of industrial legacy that is just a truly remarkable and amazing foundation that Valmet is standing on and make it such a strong company also for all the changes that we're driving in order to take it into the future.

That also means that 2025 was a transformative year, a real year where we did a lot of change preparing us and preparing the company for the future. We had a new strategy. We changed operating model. We really sort of embarked on this transformation journey, which also includes certain cultural changes that we really want to drive into the organization in order to be able to drive and run a better business.

But let's walk through the business, our performance for 2025, dividend proposal, financial targets and also the future outlook. First, let's take a look at Valmet today. Let me just start to introduce my leadership team. If I can just please ask you all to stand up all in one go. We have 2 new members. We have Jon, who's coming from the outside Valmet. And then we have Rasmus, who is also a new member of the ELT, but is a long-standing member of the Valmeteers Group. Thank you very much. Unfortunately, Shandong and Celso could not be with us today. They are in respective areas of responsibility, taking good care of our customers and our business there.

Valmet is a true global technology leader. We have 18,500 professionals around the world in more than 100 countries. We have production units worldwide. We are really sort of a true global company, but we are centered and headquartered here in Finland with almost 6,000 employees here in Finland. So almost 1/3 of every employee is in the Finnish -- within the Finnish borders.

Let's take a look at the world that our customers are living in. This is really a world that needs renewable materials, cleaner energy, more efficient processes, and this is really where we come and play a major role in helping them doing that. Every day, we're at the core business or at least in the mission-critical part of these processes that our customers run. Here, you see a glimpse of some of the customers that we have a privilege to work with across pulp, paper, packaging, tissue, energy and many other industries like marine, mining, chemicals as well. It's an amazing examples of customers, world-leading companies that run a lot of the critical processes that our society, our modern society actually relies on day in and day out.

The best part is they trust Valmet to help them run safer, cleaner and more efficiently every day. Let me just maybe highlight a couple of examples that really illustrate the strength and the versatility of the offering that Valmet has to bring to our customers. Last year, we were trusted to deliver the automation system for the next-generation Polar Stern Polar research vessel. This is a mission-critical platform that operates in some of the most extreme environments in the world. It really showcases how our automation business have come far beyond process industries and how far it reaches into very challenging processes.

Also, we -- in the third quarter, we booked a really landmark order, the largest tissue order in the history of Valmet, a true milestone within our biomaterial business. This landmark U.S. orders expand our North America presence, increase our installed base and really strengthen our leadership, both technology-wise, but also installed base-wise in this ultra-premium tissue segment that is primarily and very strongly in the U.S. market. So it also sort of, I want to say, deepens and shows the strong relationship and partnership we have with [ Sofidel ], who's actually our customer in this case. So these are just 2 cases from last year, but I think not only Oval Materials, but actually all shareholders, and I would basically say all Finns can be really proud of that there is a company here in Finland with more than 6,000 employees that can deliver this kind of solutions to our customers.

So let's take a closer look at the financials for 2025. Orders received decreased 11% to [ EUR 5.216 billion ] in the financial year of 2025. Orders received did remain at previous level on the Process Performance Solutions, but it did decrease in our biomaterial business. We do have to remember, though, that in the biomaterial business for 2024, which was the comparison year, we had this very large Arauco order in Brazil. So that is a very tough comparison period. Net sales held steady.

Our full year comparable EBITDA margin increased to a record of 11.9%, which the Chair also alluded to, 60 basis points up from 2024. This performance was, to a large extent, driven by this sort of new strategy, very bold move in terms of the operating model that really helped us when the headwind came, especially in the second half of the year, then we had created our own tailwind, and that's led to this sort of record results that we were ahead of the curve and then could book the 11.9% margin.

The impact, if you look at it just in specifics from that operating model and that strategic change was [ EUR 35 million ] of bottom line cost saving that came through in '25 in the second half of the year. Overall, we expect that [ EUR 80 million ] of these operating model change will come to the P&L in total. So even though the market was going through a softer patch last year, especially at the end of last year, we do remain very confident that the strategic choices we've made, they are the right ones, and that will take us to the right performance level that we're aiming at in 2030.

Cash flow was good, very strong, EUR 581 million. Our balance sheet is also very solid. So good foundation from doing acquisitions, just like the Severn acquisition that we announced late last year. Gearing is 35%. If we double-click on the orders and the net sales comparable EBITDA, we can actually see that the PPS business, our Automation and Flow Control business account for roughly 28% of sales, but approximately 43% of EBITDA. So from a margin perspective, Process Performance Solutions delivered a strong year, a very strong year, 19.6% margin for the full year. Biomaterial Solutions & Services, they maintained a stable margin last year of 10.3% comparable to the year before.

So overall, we are quite happy with that end result. This translates into the official income statement. It looks like this, [ EUR 5.2 billion ] of net sales, 11.9% EBITDA margin, solid performance driven by new strategy. Also, the balance sheet from a detailed perspective, EUR 6.6 billion, very strong financial position, which actually gives -- driven by a strong cash flow, good business, and that gives the flexibility for continued investment into the business, into R&D, into CapEx, into M&A and therefore, a robust foundation for the future strategy execution.

The Chair talked a little bit about it, but I still want to mention it again. We're very happy with this acquisition. Severin, it is really spot on in terms of us executing our Lead the Way strategy. We were very excited about announcing it back in December last year, and it fits perfectly strategically for us. The good synergies, good growth opportunities when we put these 2 companies together. So -- and with Seven coming in with strong severe service valve technologies, strong installation base, deep customer relationship, it really fits to what Valmet is all about. So it's going to be a -- we're going to be very happy when it closes.

We expect -- still expect that to happen in Q2 this year. We had one question before on sustainability. So let's just go a little bit more through it. I mean, climate targets, which we actually updated in 2025. We're reducing our emissions in our own operations. We're working closely with suppliers to lower their impact. And most importantly, we are working with and enabling our customers to achieve major carbon or greenhouse gas reductions through our technologies and services.

So now also another update is actually we have a new robust science-based climate transition plan that drives our net zero ambition by 2040. And I can see Retta is smiling because he's a big driver behind that and keeping the road map updated all the time. Then to our dividend proposal. Our dividend policy states that we pay out at least 50% of the profit for the period. The Board proposes that we pay out EUR 1.35 per share, translating into an 89% payout ratio and EUR 249 million in total dividend, unchanged from last year. The dividend will be paid or shall be paid in 2 installments, one in April and one in October. Overall, the proposed dividend is fully consistent with our policy, and it reflects our confidence in Valmet's cash flow generating ability and learn long-term financial position.

Now let's have a little bit of a look -- now we've had a look at the 2025 results. Let's talk a little bit about how we take Valmet into the future in terms of driving the growth, the profitability that we launched when we launched the strategy in 2025, the Lead the Way strategy. We launched it in June -- 5th of June at the Capital Market Day last year, and it really was sort of the defining moment for us and a new beginning, a new chapter we're going to write in the history books of Valmet.

Let's take a closer look at it. This strategy is a result of a lot of engagement with customers, employees around the world, getting input and actually sort of saying, okay, what can we do to make this sort of what are we all about? It also resulted us in redefining our purpose. Our purpose is to transform industries towards a regenerative tomorrow. So what do we mean with that? What do we mean with regenerative? We really mean reuse raw materials and use less raw materials. We live in a world where raw materials are finite. So we do need to become much better as a company, as a society to reuse and use less of these resources.

We're going to deliver that purpose on that purpose, by focusing on 2 missions that is being driven by our 2 strategic segments. The Biomaterials Solutions and Services are at the core of our customer with a mission to advance circularity, reuse resources. Process Performance Solutions deliver critical solutions to our customers with a mission to unlock resource efficiency with high-quality technologies, digital capabilities and other customer-centric innovation that we actually do, we co-create some of these together with our customers.

The strategy is built overall on 4 or 4 fundamentals: customer success, which really is about solving the customers' problems in a better way than anyone else can do and more effectively, help them be successful in their markets. It's about life cycle commitment. Like I talked about earlier today, it's about when our customers buy something from us, they don't buy a piece of equipment. They buy a production capability. It might be bigger or smaller, but it's critical in all the things we sell and they buy for a long period of time, which can easily be 30-plus years. And therefore, how do we help our customers achieve the most efficiency out of that equipment that they bought from us, that's what life cycle commitment is all about.

Then global competitiveness really is to use the size of Valmet, our global scale and driving efficiency, the cost competitiveness and therefore, being in a more competitive -- better competitive situation towards our customers and therefore, having better growth.

Then fourthly, talk a bit about this culture sense, the accountability. We live in a world that has -- it is just more dynamic than it's been for a very long period of time. It is just every day something happens, and it really is hard to stay on top of things if you have to do it from the top. So we need to have a fully empowered organization that makes the decisions, solve the problems where the problems are close to the problem as possible rather than they come up the chain and then we come down the chain with a decision on what they should do. They need to be fully impact, but also accountable for taking on and driving the solution of all the problems that we account with.

So in short, lead the way is about focus, simplicity, customer success and competitiveness. In order to drive those 3 things and execute the strategy, we have changed our operating model. We're delivering, as I said, the purpose with 2 missions, advancing circularity and unlocking resource efficiency. We're driving the cost competitiveness with our global supply unit, where we're sort of consolidating all our biomaterial business, all the footprint that we have, all our suppliers, all sourcing go via this unit. They have a target of seeking EUR 100 million of efficiency via sourcing and footprint actions. You might have noticed that Monday, we actually did announce that we will reduce some of that footprint in Sweden and in Poland. Some will move here to Finland and some will actually move to China, which is part of that driving that relentless cost competitiveness throughout the business.

Finally, we had some overlaps in our functions. And overall, this meant that we, unfortunately, had to say goodbye to 1,000 people, 1,000 roles across the globe. So we went from this 19,500 to 18,500 roughly. That gave us a structural savings of EUR 80 million, of which the EUR 35 million we realized last year. So simplified new structure, taking complexity out, taking cost out, driving cost competitiveness and that is part of delivering the strategy, which then should give better returns to shareholders. That also meant that we were setting bold new financial targets. We want to grow 5% organically. We want to deliver a 15% EBITA margin -- comparable EBITA margin over the cycle, and that delivers then if you do the math, 20% return on capital employed.

So with all this, we believe that Valby is now in a stronger position to create long-term sustainable value for you, our shareholders, for the coming period. Finally, let's move to our guidance for 2026. Valmet estimates that net sales in 2026 will remain at previous year's level in comparison to 2025, roughly EUR 5.197 billion was 2025. Comparable EBITDA in 2026 will remain at previous year's level or increase in comparison to 2025, where we delivered EUR 620 million of comparable EBITDA. So with that, I have full confidence in the strategy. I have full confidence in the team. I have full confidence in all the Valmeteers around the world, and I'm really energized about leading Valmet and lead the way in the new strategy for now and also for the future.

So thank you very much for coming, and thank you very much for the trust in the past year.

Thank you, CEO, Thomas H. We can open for questions.

The CEO has presented the company management and the strategy, operations and the financial performance of 2025 and the CEO also presented the group financial statements and the key figures in that. Are there any requests for the floor on the CEO's review? I can see one here in the middle. Please wait for the microphone. And please tell us your name and the number of your voting slip.

Speaker 2

Management and shareholders.

My name is Nika, and I am representing Teo, voting ticket #84. I am here in the capacity of -- just Shift's Steel specialist. Just Shift is a climate organization dedicated to accelerating the decarbonization of heavy industry by influencing Nordic steel buyers such as Valmet, institutional investors and public infrastructure projects.

To begin, I would like to congratulate Valmet for its bold initiative to take the step from sustainability to regenerativity in its new strategy. It is excellent to see the concept of a regenerative economy integrated into the corporate strategy. Circularity is one aspect of regenerativity and Valmet has set a target to use 85% lower emission recycled steel by 2030 in its own foundries. While this is a positive step, the company remains vague on targets regarding the remaining 15% as well as the steel sourced from suppliers. The majority of greenhouse gas emissions originate from corporate supply chains and Valmet is no exception.

Steel, an extremely emissions-intensive material responsible for approximately 11% of global CO2 emissions is a central material in Valmet's value chain, making up 66% of Valmet's emissions due to purchased goods and services. Valmet is, by the way, the first and so far the only Finnish company that we analyze in our annual Sustainable Steel scoreboard, which disaggregates its emissions from steel in its new climate transition plan. So congratulations on that. Near zero emission steel, however, the production is already technically feasible.

However, the emergence of a lead market is a bottleneck, slowing the shift in demand from carbon-based iron and steel production to low emission or eventually near zero emission steel. The creation of this lead market and investments in near zero emission steel production are fostered by clear demand signals and such signals can be strengthened by joining buyer coalitions such as Steel Zero or first movers coalition.

I have come here to the AGM to ask what concrete measures has Valmet taken to ensure the future availability of near zero emission steel? Last year, you referred to the project nature of Valmet's business model as an obstacle or at least a restrainer for procuring low-emission steel. therefore, my question this year is more precise. For example, does Valmet intend to collaborate with or perhaps even invest in companies manufacturing low emission and eventually near zero emission steel or join a buyer coalition to help drive the emergence of lead market?

Thank you for the question very briefly in Finnish. So this is about the manufacturing of low-emission steel or net zero emission zero, and what kind of collaborations Valmet is engaged in so that it can support emission -- low emission or emissionless steel production.

Thank you very much, Ana. You were here last year as well, which I think shows the consistency. And that's, of course, also what is needed in this push. And I'm very happy that you are recognizing that our new purpose really drives very well with what you're also trying to do within your organization. Clearly, you mentioned actually a lot of the good data. We had 82% last year in our own foundries in terms of low-emission steel and have the ambition to go to 85%, it doesn't maybe sound very much. And then what is the remaining 15% and what we're going to do with that.

On top of then, there is the suppliers as well as I read. As you know, there's sort of -- there are 3 parts to the equation that makes it challenging, and that's why it is not just a sort of a switch, but actually something we need to work with and are working with and continue to work with. One is low-emission steel, the availability in terms of the specification that we actually need is challenging. That's why the 15% is sort of pushing the barriers as it stands today in terms of the supply, really challenging in itself or the 85%. So that's one part.

The other part is sort of then the overall availability of low-emission steel for the remaining -- our total footprint from the biomaterial is 65%, as you said, in terms of what we buy. And that -- and then -- so that availability. And then, of course, the last part, which is the additional cost and getting customers to actually buy into that this makes a lot of sense.

We then have a further challenge, which is the whole -- the Project business, which then means that we -- 1 year, we buy this much and the other year, we buy that much. If we have an Arauco project that goes on, then we buy a lot of steel. So I think the answer -- the short version to your answer is, I don't think really it is in the shareholders' interest nor sort of overall or our business to invest into producing low-emission steels, but we're very happy to go into a dialogue on how can we actually increase the availability of low-emission steel because that we would like to have.

Thank you. Then do we have further questions?

Further questions?

I can't see any other questions. So thank you to Thomas Hinnerskov. And we will then move on to the presentation of the auditor's report. And therefore, I will next ask Mr. Basiarpin, an auditor and sustainability reporting auditor, to give his review and to read the opinion part of his auditor's report.

Chairman, shareholders, it is very nice for me to be back here presenting the auditor's report and the assurance report on sustainability statement. And I am [indiscernible] from PricewaterhouseCoopers. And with the mandate you gave me last year, I have been taking care of these things. Thank you for that again. And we have carried out the audit according to plan and reported on it during the financial period to the Audit Committee of the Board as well as to the shareholders. And our auditor's report is included in the annual report on 11 through 105 pages, and the audit has been carried out so that it has covered the majority of the group's turnover assets and liabilities, and it included 12 group companies in 7 countries.

And these countries were Finland, Sweden, the United States, Canada, Brazil, China and Italy. Globally, there were approximately 150 PricewaterhouseCoopers specialists in the audit and the audits were either carried through our group or the local companies in line with the instructions from the group. And the auditor's report extensively reports the audit procedure and also raises the key audit matters. These were this year, the accounting for long-term projects and long-term service contracts as well as goodwill valuation.

I will finally read the opinion part of the auditor's report. In our opinion, the consolidated financial statements give a true and fair view of the group's financial position, financial performance and cash flows in accordance with IFRS accounting standards as adopted by the EU. The financial statements give a true and fair view of the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements.

We then move on to the other business, so the sustainability report and its assurance, and this report can be found in the annual review on Page 18 onwards, and it is part of the company's annual report. And the company for the second time now has drawn up this sustainability statement, but has reported on sustainability issues extensively before that, too. And we at PwC have carried out limited procedures, and I will now read the suitable parts of our opinion on this. So it is the following. Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the group sustainability report does not comply in all material respects with the requirements laid down to it. Thank you.

This was the presentation of the auditor's report and the sustainability reporting assurance report. Thank you, Pasi Garpinen. Any questions for Mr. Karpinen on auditing? I can't see any requests for the floor. Thank you, Pasi.

The CEO's review and the financial statements are attached to the minutes, and I declare that the financial statements, the consolidated financial statements, the report of the Board of Directors, the auditor's report and the sustainability reporting assurance report have been presented to the general meeting.

And we move on to Item 7, adoption of the financial statements and the consolidated financial statements. Can the annual accounts and the consolidated financial statements be adopted as presented and taking into account the votes cast in advance, the financial statements and the consolidated financial statements can be approved in the form they were presented.

Any request for the floor? Hence, now adopted approved. Hence, the financial statements, the consolidated financial statements for 2025 are approved.

At Item 8, we shall discuss the resolution on the use of the profit shown on the balance sheet and the distribution of funds. In the previous presentation, it was already mentioned briefly what the dividend proposal is. So the Board is proposing that for the financial period that ended on the 31st of January 2025, EUR 1.35 per share be given out as dividends and the rest will stay in the equity of the company, and this will be given out in 2 installments so that the first installment of EUR 0.68 per share be paid to shareholders who on the dividend record date of March 27, 2026, are registered in the company's shareholders' register and the payment date would be the 26th of March. And the second installment would be paid out in October 2026, as you can see on the screen in more detail. Now any requests for the floor on this dividend proposal? I can't see any requests. So I take it, we can approve the Board's proposal.

We then move on to Item 9, resolution on the discharge of the members of the Board of Directors and the President and CEO from liability. According to the Companies Act and the company's Articles of Association, the general meeting is responsible for granting discharge. This concerns all persons who acted as members of the Board or as the President and CEO. So Pekka Rouhiainen as Chairman; Annika Paasikivi, the Vice Chair, Anu Hamalainen, [indiscernible] Monika Maurer, Bernd Eikens, Jonas Gustafsson, as well as Per Lindberg, who acted as the member until March 26, 2025, and Mikael Mcinenter as Chairman of the Board until the aforementioned date; and [ Jaakko Eskola ] as the Vice Chairman until the 26th of March. And Thomas Hinnerskov, the President and CEO, can this charge be granted? Any requests for the floor? This charge, I believe, is since granted granted.

And then Item 10, adoption of the remuneration report for governing bodies. According to the Companies Act, the general meeting of a listed company must decide on the approval of the remuneration report. The remuneration report for 2025 has been available to the participants of the meeting on the company website since February 24 when it was published as a stock exchange release. And I note that -- the resolution of -- on the remuneration report is advisory and will be annexed to the minutes.

Next, I invite the Chair of the Board's People and Remuneration Committee to present the main points of the remuneration report, Annika Paasikivi.

Thank you, Chair. Distinguished shareholders of Valmet, I have been acting as the Chairperson of Valmet's People and Remuneration Committee since the Annual General Meeting last year. And therefore, I will present to you the key principles and results of the remuneration report. The remuneration report gives a transparent view on how the remuneration practices of the company support the execution of Valmet's strategy, long-term performance and the growth of shareholder value.

The remuneration of the CEO also complies with these principles. A significant part of the CEO remuneration is based on variable pay components, short- and long-term incentives through which his remuneration is closely tied to Valmet's financial result and value creation. In addition, the CEO is required to hold a number of shares to ensure that his interests align with those of the shareholders. The company CEO does not yet own any or hold any shares of Valmet, but this will be corrected at the latest in March 2027.

A key point to note regarding the 2025 total compensation is that no long-term incentive payments were made due to a change in the performance period of the incentive plan. Valmet transitioned its long-term incentive bonuses to a 3-year performance period, which is, of course, in line with the expectations of shareholders of the long-term nature of the compensation. Consequently, the only variable pay component was the short-term bonus based on the results and targets for 2024.

The CEO's total compensation last year consisted of a fixed annual salary, a short-term bonus and a supplementary pension. The remuneration report as a whole depicts how Valmet's remuneration system supports the long-term success of the company. It guides the management and personnel to reach the key strategic goals and ensures that remuneration is transparent and reasonable. Last year, as we have heard, was a time of significant changes to Valmet.

In July, we completed the largest renewal of operating model in the history of the company. I want to thank all the personnel of Valmet for a good collaboration during this exceptional year. And I also want to thank the 980 persons who at that -- in that connection left the company. There were also changes in the executive leadership team. [indiscernible] and Petri Paukunen stepped down. I want to thank them for their significant contribution to Valmet's success.

And of course, in this connection, I also want to welcome the new executive leadership team members, Rasmus Oksala and Jon Jested-Rask. Finally, I want to thank you, shareholders, for your consistent support to Valmet's success. Thank you.

Thank you. The Chair of Board's People and Remuneration Committee, Annika Paasikivi, are there any questions or comments on the remuneration report? I can't see any requests for the floor. I take it. We can approve the remuneration report.

The Shareholders' Nomination Board has proposed resolutions on these agenda items, which have been published in the stock exchange release on December 19, 2025. And I now ask Markus Milo from Oras Invest, Chairman of the Nomination Board to report on the work of the Nomination Board and present the Nomination Board's proposals. Markus, the floor is yours.

Thank you, Chair. Distinguished shareholders. My name is Markus Melkko. I'm the CEO of Oras Invest, and I have chaired the Shareholders' Nomination Board of Valmet during the past financial year. The Nomination Board consists of representatives of the 4 largest shareholders, their appointed representatives as well as Chair -- the Chairman of the Board. So in addition to myself, there is Markus A, who is the Investment Director of Mutual Pension Insurance company, Varma; Mikko Morula, the CEO of Mutual Pension Insurance company, [indiscernible] And Investment Director of [indiscernible]. The Nomination Board convened 3 times and the attendance rate was a full 100%.

I will now move on to the proposal regarding the remuneration of the Board of Directors. The Nomination Board proposes that the annual remuneration for the members of the Board to be elected in this meeting will be increased as follows: EUR 163,000 for the Chair of the Board. It used to be EUR 155,000, EUR 90,000 for the Vice Chair of the Board, it used to be EUR 85,500 and EUR 71,000 for other Board members, it used to be EUR 68,000.

Furthermore, the Nomination Board proposes that as a condition for the annual remuneration, the members of the Board of Directors are obliged directly based on the Annual General Meeting's resolution to use 40% of the fixed annual remuneration for purchasing Valmet shares at a price formed on the regulated market on the official list of NASDAQ Helsinki Limited Stock Exchange and that the purchase can be carried out within 2 weeks from the publication of the interim review for the period from January 1 to March 31, 2026.

The Nomination Board also proposes that a base fee of EUR 7,800 shall be paid for each member of the Audit Committee and EUR 17,800 for the Chair of the Audit Committee and a base fee of EUR 4,500 to each member of the Remuneration and HR Committee and EUR 9,000 to the Chair of the Remuneration and HR Committee. In addition, the Nomination Board proposes that a meeting fee in the amount of a meeting fee for each meeting of the Board or the Board committees. And this -- the amount is based on the place of residence of those members, EUR 1,000 for those whose place of residence is in the Nordic countries, EUR 1,800 to those members whose place of residence is elsewhere in Europe and EUR 3,500 per meeting for those members whose place of residence is outside of Europe.

And for meetings in which a Board member participates via remote connection, including the meetings of the committees, the Nomination Board proposes that a meeting fee of EUR 1,000 be paid to Board members. And on go to the proposal regarding the composition of the Board.

I will now discuss the proposals concerning the number of members in the Board of Directors and the composition of the Board. So the Nomination Board proposes to the Annual General Meeting that the number of members of the Board of Directors for the term expiring at the close of the Annual General Meeting 2028 be 8 and that for the term -- the same term, Anu Hamalainen, [indiscernible] , Monika Maurer, Anika Paasikivi, [indiscernible] and Jonas Gustavsson be reelected as Board members and that Pekka Rouhiainen be reelected as the Chair of the Board and Anika Paaskivi be reelected as Vice Chair of the Board.

If any nominee becomes unavailable, the Board size would be reduced accordingly and the remaining nominees would be elected as proposed. And the Nomination Board can also update its proposal for the composition of the Board of Directors. And the Nomination Board recommends that shareholders vote on the proposal as a whole at the Annual General Meeting.

The Nomination Board has assessed that the -- in addition to the competencies of the individual members, the Board as a whole would have a suitable competency and competence for the benefits of the company. The Board has assessed and concluded that all proposed members are independent of the company at the time of the proposal and all proposed members are also independent of significant shareholders with the exception of Annareetta Lumme-Timonen, who is the Investment Director of Solidium Oai and Anika Paaskivi, who is the Executive Chair of the Board at Oras Invest Hawaii. And the Nomination Board notes that the Board elected by the Annual General Meeting will separately evaluate the independence of the Board members in compliance with the Finnish Corporate Governance Code.

Thank you, Chairman of the Shareholders' Nomination Board. Are there any questions or comments regarding Markus presentation. I don't see any requests for the floor. So thank you, Markus Melko, and we will start to formally handle each of these agenda items.

We are now at Item 11, resolution on the remuneration of the members of the Board of Directors. Mr. Melco just presented the proposal. Are there any requests for the floor concerning that proposal? I don't see any. So we will adopt the proposal by the shareholders, the Nomination Board and the Board of Directors.

Item 12 is about resolution resolving on the number of members on the Board of Directors. And the Nomination Board has proposed that the Board of Directors should consist of 8 members. Are there any requests for the floor? Apparently not. So we have adopted this proposal.

On we go to item 13, which is the election of the members of the Board of Directors and the Nomination Board proposes that the former Board members be reelected and that Pekka Vauramo be reelected the Chair and Annica Baskivi be reelected as the Vice Chair of the Board. Are there any requests for the floor? I don't see any requests for the floor. So I assume we can adopt this proposal adopted.

On we go to Item 14, which is about resolving on the remuneration of the auditor. Based on the proposal of the Audit Committee of the Board of Directors, the Board proposes that the auditor's fee be paid in accordance with the auditor's invoice and the principles approved by the Audit Committee. Are there any requests for the floor? I don't see any. So I assume we can adopt this proposal adopted.

Item 15, election of the auditor. According to Article 7 of the Articles of Association, the term of the current auditor expires at the end of this Annual General Meeting. The company must have one auditor who must be an auditing firm approved by the Finnish Patent and registration office. The auditor so far has been PricewaterhouseCoopers and the principal auditor has been Pasiarpin, authorized public accountant. So the Board is proposing that PricewaterhouseCoopers LY be reelected as the auditor of the company and the PricewaterhouseCoopers has announced that Pasikpinen, who has given his consent to this task would act as the principal auditor. Can we adopt this proposal? There is a request for the floor. Can please state your name and voting slip.

[indiscernible] And voting slip numbers 100. I have nothing against the Board's proposal, but I would like to see voluntary statements voluntary opinions from the auditor that they are in favor of the dividend proposal and that the financial statements have been correctly prepared.

Thank you. And these will certainly be taken into consideration by the auditor. Any other requests for the floor? I see one in the middle. Can I have a microphone there? And please state your name and the number of your voting slip.

Distinguished Chair, ladies and gentlemen, my name is Pekka Jakkola, and my voting slip is 79. Is it the case that PricewaterhouseCoopers and the principal auditor have only been in this function for a short time in Valmet. Yes. According to my notes, the company organized a selection procedure for the auditor regarding the audit for 2024 and Pricewaterhouse was reelected to continue as the auditor. Does [indiscernible] Want to complement this answer on behalf of the auditor?

Now Pasi Karpinen is not speaking in the microphone, so the interpreter is not able to hear what he's saying. Thank you, Pasi. Any other requests for the floor? I don't see any. So I assume we can adopt the proposal regarding the election of the auditor adopted.

In Item 16, we shall resolve on the remuneration of the sustainability reporting assurance provider. And based on the proposal of the Audit Committee of the Board, the Board proposes that the sustainability reporting assurance provider be paid a fee in accordance with the sustainability reporting assurance providers invoice and the principles approved by the Audit Committee. Are there any requests for the floor? Apparently not. The proposal has been adopted.

Item 17 is about electing the sustainability reporting assurance provider. A general meeting must elect an insurance provider of sustainability reporting. His term of office expires at the end of the Annual General Meeting following the election. And the authorized sustainability audit firm, PricewaterhouseCoopers, LY with authorized sustainability auditor, Pasikarpinen as the responsible sustainability auditor has acted as the sustainability reporting assurance provider and the Board proposes that authorized sustainability audit firm, PricewaterhouseCoopers LY be reelected as the sustainability reporting insurance provider of the company, and they have informed us that Pasi Karpinen would continue as the responsible sustainability auditor. I don't see any requests for the floor, so I assume we can adopt the proposal adopted.

That brings us to item 18 authorizing the Board of Directors to resolve on the repurchase of the company's own shares. The Board of Directors has proposed that it be authorized to decide on the acquisition of the company's own shares. And the proposal is shown on the screen. The authorization concerns a maximum of 9,200,000 shares, which corresponds to approximately 5% of all the shares. And it is proposed that a maximum of 500,000 shares may be repurchased to be used as a part of the company's incentive schemes. Are there any requests for the floor? I don't see any. So I assume we can adopt this proposal.

Item 19 is about another authorization, namely authorizing the Board of Directors to resolve on the issuance of shares as well as the issuance of special rights entitling to shares. You can see the proposal on the screens. So the Board is proposing that the Annual General Meeting authorized the Board of Directors to resolve on the repurchase of the company's own shares in one or several tranches. And this authorization would concern a maximum of 5000 shares, which corresponds to approximately 10% of all shares in Valmet and a maximum of 500,000 shares could be used as a part of the company's incentive schemes, which corresponds to approximately 0.3% of all the shares in the company, and this would be -- this authorization would be enforced until the close of the next Annual General Meeting and cancel the previous corresponding authorization. Are there any requests for the floor? I don't see any. So I assume we can adopt this proposal adopted.

The last actual agenda item is the proposal for -- by the Nomination Board for amending the charter of the Nomination Board that was shown already earlier, the Nomination Board has proposed that according -- that the charter of the Nomination Board be amended. The current charter of the Nomination Board provides that the date for determining the shareholders qualified to appoint members for the Nomination Board is July 1.

The Nomination Board has concluded that to improve the nomination process, it is advantageous to set an earlier date for such determination and proposes to change the charter of the Nomination Board to set such date for June 1 with other relevant dates to be changed accordingly. Are there any requests for the floor? I don't see any. So I assume we can adopt this proposal. It has been adopted. So we have thus reached the end of the meeting. The items listed in the notice of the meeting have been dealt with and no further matters will be handled at the meeting. And the minutes of this Annual General Meeting will be available for inspection by shareholders on the company's website no later than 2 weeks after the meeting. In other words, on April 8, 2026. I would like to thank all the participants and declare the meeting closed at 15:22.

Thank you for my part, and this marks the closure of the meeting, and please exit the room on -- through the doors on my left. Thank you.

Good morning, everyone, and welcome to Valmet's Fourth Quarter Results Webcast. My name is Pekka Rouhiainen. I'm the Vice President of Investor Relations at Valmet. And with me today are Valmet's President and CEO, Thomas Hinnerskov; and our CFO, Katri Hokkanen.

Today, we will walk you through Valmet's fourth quarter and also highlighting some of the full year highlights, the most notable one being the full year margin, increasing to a new record of 11.9% as our strategy, delivered its first results during the second half.

The agenda for today is straightforward. First, Thomas will present the Q4 and full year highlights, including the acquisition of Severn. Next, Katri will walk us through the financial development in detail, and then Thomas will return to discuss the dividend proposal, the guidance for 2026 and the short-term market outlook for the next 6 months. And after the presentations, we'll open the lines for your questions. So thank you for joining us today and your interest in Valmet.

And with that, let's get started, Thomas.

Thank you, Pekka. 2025 was my full first year as CEO at Valmet, and it's been a true transformative year. We've been driving many changes and initiatives, and I'll get back to some of those later in the presentation. Therefore, firstly, I want to be thanking the Valmet team for all the hard work and commitment throughout the whole year. I also would like to sort of thank everyone at Valmet personally for being very open and welcoming me to Valmet and being open for the behavioral and cultural aspects we've been working on in order to speed up our execution and being bolder in our thinking.

Let me start by setting the overall frame for today. We operate in a softer market in the second half of the year. But even though the market is going through a softer patch in the short term, we do remain confident that our strategic choices are the correct ones, and they will take us to the next level of performance by 2030. So with that, let's start with the full year highlights.

For the full year, we delivered a resilient performance. Net sales held steady and our comparable EBITA margin reached, as Pekka said, a record of 11.9%, up 0.6 percentage points from previous years. This was driven by the bold operating model changes we decided already in the first quarter when the market was still largely in a better shape. That timing really mattered, and we were ahead of the curve. It gave us the efficiency benefits when the environment turned softer later in the year without us having to react defensively at a challenging moment.

Process Performance Solutions performed exceptionally well and Biomaterial Solutions and Services remained stable or remained -- maintained stable margins despite our customers' low operating rates and overall weaker global economy.

Cash flow stayed strong at EUR 581 million and orders remained solid against a very demanding comparison period.

The Board of Valmet proposes a EUR 1.35 dividend per share, unchanged from last year. Overall, Lead the Way is now being embedded across the organization and the benefit becomes visible already in the second half of last year. With that, let's have a look at the fourth quarter.

The overall fourth quarter picture is quite similar to the full year. The market was subdued in biomaterial services like we anticipated. And unfortunately, we saw a more muted demand also in the parts of our Process Performance Solutions, especially in the pulp and paper automation market was slower than expected. Also some of the packages in automation actually got postponed in the end of the year.

When we exclude the exceptionally large Arauco order and the FX from the comparison point, orders were very close to last year's level, so which is a solid achievement, I think, in this environment.

Profitability was clearly a highlight. Our comparable EBITA margin reached an all-time high of 13.3% for the quarter, driven by the operating model improvements implemented earlier in the year. Those actions decided when the market was still better, gave us an efficiency that we needed in the second half. We secured several important wins, including our largest ever energy order for a biomass power plant in Berlin. So these kind of projects add to our installed base and create long-term life cycle opportunities for us.

Process Performance Solutions delivered another excellent quarter with a margin of 21.9%, very good execution from the team and a strong starting point as we invest back into growth going into '26, like we've talked about earlier as well.

And finally, we announced the acquisition of Severn Group just before Christmas. Severn brings leading severe-service valve technologies, a high-quality installed base, truly strengthening our flow control in several key process industries, so a very strong strategic fit for us.

One important clarification. Our 2026 guidance does not include this acquisition. We will include Severn in our guidance once the transaction is fully finalized, which we expect will happen in Q2. So overall, a strong quarter operationally, supported by disciplined execution and the benefit of the choices we made earlier in the year, even though the market didn't support us with tailwinds.

Let's take a closer look at the order development behind the quarter. As expected, orders for the quarter decreased year-on-year in both segments, mainly because of the comparison period including the exceptionally large pulp mill order from Arauco in Q4 2024. Like earlier said, this order impacted also biomaterials services and Automation Solutions orders intake in Q4 last year. That single project alone create a very demanding benchmark for this quarter, obviously.

Against that backdrop, our performance was solid. We secured our largest ever energy order for the Berlin biomass power plant, which also came with extensive service agreement, highlighting our life cycle approach that we have launched early in the year at our strategy. This is an important long-term value driver for us. Overall, our energy business had a good year and was able to close some key wins.

In biomaterial services, the market remains subdued, and we saw a decrease in service orders compared to Q4 last year. This is fully in line with what we communicated earlier, operating rates, investment activity has been under pressure, and we saw the impact in our Q4 financials.

In Process Performance Solutions, the environment softened, particularly in the pulp and paper automation. The difficult end market of our customers showed also in automation's demand during the quarter and furthermore, some package deals did not materialize and were postponed for later. Going forward, we see the market now stabilizing from the weaker Q4 level. So overall, while the headline year-on-year comparison shows a clear decline, we had a decent quarter in a soft market and continue to capture some strategically important wins that strengthen our installed base for the long-term service opportunities.

Let me then highlight one example that illustrates the strength and the versatility of our automation technology. We secured the automation delivery for the next-generation Polarstern, polar research vessel. This is a mission-critical platform for a vessel operating in some of the most extreme environments on earth. The order showcase how far beyond the traditional process industries our automation offering today reaches.

When a customer like this chooses Valmet to run a vessel like this, it is a strong testament or a statement of trust in the reliability, safety and sophistication of our systems. It also builds long-term value. These vessels have multi-decade life cycle and the automation is central to their operation. That creates recurring life cycle revenue and further strengthen our installed base in a segment where we already hold a leading global position in cruise and marine arbitration. So while the quarter was soft in pulp and paper automation, this kind of win demonstrates the underlying competitiveness of our technology and our ability to grow in diverse markets.

Let's look at another concrete example of our strategy to further strengthen our Process Performance business and diversify outside our traditional biomaterial business. We are -- yes, we are very excited, I have to say, to be able to announce the acquisition of Severn in the fourth quarter. This is a strategically important step for Valmet in the mission-critical flow control business.

Severn brings leading severe service valve technologies, a strong installed base and deep customer relationship in industries that are complementary to ours, to our biomaterial business and businesses as refining, chemicals, energy and gases as well as metal and mining. So the strategic fit is excellent.

Severn has a proven track record in demanding applications where reliability is key and this strength in our Flow Control business, both technology-wise, but also commercially. It clearly expands our addressable market and increase our presence in segments where we see long-term growth potential beyond our traditional biomaterial business. It also takes us to top 5 globally in the valves business. The combination also brings clear synergy opportunities, broader market reach, complementary offering and the ability to increase service presentation or penetration in a large, high-quality installed base.

Severn generated around EUR 250 million of revenue in 2025 with an EBITDA margin of about 16%, reflecting a solid operating foundation. We expect the acquisition to close during the second quarter of this year. And overall, very good strategic fit. In addition, it strengthened Flow Control, broaden our portfolio and improves our growth profile over the long term.

Now let's turn to Process Performance Solutions. Process Performance Solutions delivered a record year in comparable EBITDA. Orders came in at EUR 372 million, decreasing as anticipated due to the very strong comparison period, which include the landmark automation order from Arauco last year.

Net sales remained at last year's level. Flow Control continued to grow organically while Automation Solutions saw a decline, particularly or partly, I would say, reflecting the softer demand condition we already discussed on the previous slides.

The clear highlight is profitability. Comparable EBITDA reached a new record of EUR 90 million, and the margin increased to 21.9%. The margin was supported by solid commercial execution, operating model efficiencies and overall disciplined cost control. So even with a softer automation market and a tough comparison on orders, PPS continued to show strength and resilience. However, we do want to be mindful of the fact that we don't expect the margins to continue at this record level into 2026 as we will be investing back into long-term growth by hiring key personnel, both in the sales but also in R&D.

Now let's move to the Biomaterials Solutions and Services. Starting with orders. The highlight win in the quarter was the Berlin biomass power plant order, which I mentioned earlier, but compared to last year, exceptionally strong fourth quarter, orders were clearly lower as the comparison period included the very large Arauco pulp mill order. Full year services orders were up 4% organically and represented 52% of the orders received.

Looking at the market environment, the biomaterial services market continued to be soft, very much in line with what we saw already in the third quarter. In fact, the year was divided into sort of 2 parts, a good active first half, followed by a clearly softer second half as customer operating rates were visible in the market.

On the net sales side, development was as expected. Capital net sales came in at a solid level in the quarter, and we saw the Aramco project progressing well. In total, we booked roughly EUR 400 million of Aramco as net sales during 2025, and we estimate that roughly another EUR 400 million will be booked as net sales in 2026 as the project continues to advance according to plans.

In Services, net sales decreased organically by about 7%. This reflects the order mix in the recent quarters, which have been more tilted towards longer lead time mill improvement projects. Also along with the FX impact, that mix effect was clearly visible in the net sales for the fourth quarter as well. Comparable EBITA amounted to EUR 123 million with a margin of 11.6%, unchanged from last year.

Biomaterial services net sales were lower, but the operating model efficiency we implemented early in the year supported the segment's margin development, and I'm very pleased that we made those decisions when we did. Without them, the year-end would have been significantly tougher for this segment in terms of delivering the margin.

This covers the operational and market development for our segment this quarter. To give you a deeper look at our financial development, I'll now hand over to Katri, our CFO. Katri, the floor is yours. Thank you.

Thank you, Thomas. And actually, before I begin, I want to sincerely thank the Valmet Finance team and our Investor Relations team for a very strong year-end reporting effort. This was the first annual closing under our new renewed operating model and reporting structure. We introduced several improvements to our quarterly and annual reporting during the year. So delivering these changes while maintaining excellent accuracy and clarity required significant teamwork. And I want to thank everyone involved for their dedication in this.

I'll now take you through Valmet's financial development, focusing in the fourth quarter. I will cover our profitability, cash flow, balance sheet and other key financials. And as always, my aim is to provide a clear and transparent view of our financial position and the drivers behind our performance.

Let's start with an overview of our net sales and comparable EBITA for the fourth quarter. Net sales amounted to EUR 1.5 billion in Q4, and this was EUR 51 million lower than in the comparison period, and this was mainly due to a negative currency impact of approximately EUR 42 million as the euro strengthened against U.S. dollar and some other key currencies.

Organically, net sales were only 1% lower than Q4 last year, showing steady development in both segments. Comparable EBITA reached EUR 196 million, and the margin rose to 13.3%, which is the highest quarterly margin in Valmet's history. The increase was driven by the cost savings from our own operating model renewal, which continued to support profitability in the second half. And by the end of the year, we realized approximately EUR 35 million in cost savings related to the operating model renewal. And this includes approximately EUR 20 million in the fourth quarter and the targeted EUR 80 million annual cost savings run rate has been reached now.

Like I said earlier, we will be investing part of those savings back into growth. So the incremental net savings impact will be roughly EUR 30 million in the first half this year. I'm pleased to note that even with the weaker market and currency headwinds, our operating model and disciplined execution allowed us to deliver another quarter of strong financial performance.

Let's move next to our order backlog. At the end of 2025, Valmet's order backlog amounted to EUR 4.3 billion, which is EUR 146 million lower than at the end of 2024. Based on the current delivery schedules, we expect approximately EUR 3.1 billion of the backlog to convert into net sales during this year. And this is in line with the level we guided last year when a similar amount of backlog was expected to be recognized as net sales during 2025. And our book-to-bill ratio for the full year was 1, reflecting the softer market in the second half of the year. Even so, the absolute backlog continues to provide a very solid visibility for this year.

Overall, the backlog remains at a healthy level, supporting stable deliveries for the year ahead. And as always, our teams are working hard to create a solid amount of book and bill during the year on top of the order backlog.

Moving on to our cash flow and working capital next. Cash flow from operating activities amounted to EUR 189 million for the fourth quarter, bringing the full year operating cash flow to EUR 581 million. Our comparable cash conversion ratio for 2025 was 94%, which is in line with our long-term average and demonstrate the strength of our cash generation capability.

Net working capital decreased to EUR 29 million at year-end compared with EUR 134 million a year ago. And I'm very pleased to see over EUR 100 million released during the year. CapEx for the year totaled EUR 103 million, representing about 2% of net sales, and this is broadly in line with previous years. And we expect this to increase a bit this year. Efficient cash generation, together with disciplined capital allocation, remain the key priorities for us, and they both support and enable both operational flexibility and also our long-term growth ambitions.

Let's move on to our balance sheet and leverage position. At the end of 2025, Valmet's net debt amounted to EUR 904 million, and our gearing decreased to 35%, down from 38% in the third quarter. Net debt decreased by EUR 41 million from Q3, even though we paid the second dividend installment of EUR 0.67 per share, which totaled EUR 123 million in Q4. Our net debt-to-EBITDA ratio improved sequentially to 1.40 compared with 1.50 at the end of the third quarter. We are well within our target of under 50% gearing, which means we are in a good position for the upcoming Severn acquisition as well.

It is estimated to increase Valmet's gearing by approximately 15 percentage points once completed. The average interest rate of our total debt was 3.4% at year-end, decreasing from 4% a year earlier. During Q4, we also completed our first Schuldschein loan transaction, which amounted to EUR 375 million. And this transaction strengthens our long-term debt structure, diversifies funding sources and broadens our debt investor base. So big congratulations once more to the team who made this transaction happen.

Net financial expenses decreased slightly to EUR 62 million for the year. And overall, the balance sheet remained strong, which gives us flexibility as we continue to execute our strategy even in a softer market.

Moving on to our capital efficiency and EPS. Our comparable ROCE for the full year was 13%, and this is a solid level and slightly higher than a year ago. However, our long-term financial target is to reach a 20% comparable ROCE by 2030, so we still have work ahead of us. Main driver behind the lower ROCE compared to 2022 is the series of acquisitions we have made in recent years. These have increased our capital employed. We remain confident that these investments will support stronger returns over time, and they fit well with our strategy and long-term financial ambition and increase shareholder value.

Adjusted earnings per share for the year was EUR 1.82. The year-on-year decrease is mainly related to changes in the expensing of fair value adjustments from acquisitions. And just as a reminder, adjusted EPS excludes acquisition-related impacts, but it does include items affecting comparability, which is sometimes misunderstood.

Looking at the key financial figures for the fourth quarter, I'm pleased to note that almost all the numbers are in the black for Q4, with the exceptions of orders for reasons we have already discussed and net sales, which decreased mainly due to currency impacts. Comparable EBITA increased to EUR 196 million, up 2% from the previous year, and the margin improved to 13.3%. EBITA and operating profit also increased from last year's levels.

Cash flow from operating activities was EUR 189 million, up 7% year-on-year in Q4 and 5% in 2025. For the full year, items affecting comparability amounted to minus EUR 85 million compared to minus EUR 53 million in 2024. The increase in these costs was mainly driven by restructuring expenses related to the operating model renewal.

On a full year basis, our tax rate was 25.7%, which is in line with Valmet's historical ETR level, which has been around 25%. You will also notice that our effective tax rate in Q4 was higher than usual as there were some one-off impacts in the taxes.

That concludes my review of the key financials. Thomas, over to you, please.

Thank you very much, Katri. Very clear, very transparent, very good. Thanks. So let's start with the dividend. So we laid out our capital allocation priorities back at the Capital Market Day last year in June.

First, organic growth. We are reinvesting part of the operating model savings back into growth, particularly into strengthen commercial execution. This is a deliberate choice to support our long-term profitability.

Secondly, strategic M&A. We expect to close the approximately EUR 410 million acquisition of Severn in 2026, a significant strategic step aligned with our portfolio ambition.

Thirdly, dividends. Our policy is to pay out 50% of profit for the period or minimum 50% for the period. The Board's proposal is a EUR 1.35 dividend translating into 89% payout ratios and EUR 249 million in total dividends, unchanged from last year.

Fourth, share buybacks, which remain a flexible tool depending on the balance sheet strength and other capital allocation needs of the previous authorities. Overall, the proposed dividend is consistent with our policy. It reflects confidence in Valmet's cash flow and long-term financial position.

Let me start with the short-term market outlook for the first half of 2026 compared with the fourth quarter. In PPS, the market softened in Q4, particularly in pulp and paper automation, but also in Flow Control, where earlier tariff cost prebuying turned into a temporary headwind. From here, we do not expect further softening. We see the PPS market stabilizing at the Q4 level and improving modestly during the first half of 2026.

In Biomaterials Solutions and Services, the market environment in pulp, packaging and paper remained soft and highly dependent on the timing of any possible individual customer decision. Biomaterials services are also expected to remain soft, but not to worsen from current levels, which is why we've adjusted the wording. Capacity utilization, especially in Europe and China remains low and continues to pressure our customers' profitability. From our perspective, the market is flattening, not deteriorating further.

Turning then to our 2026 guidance, which we published today. First, we expect net sales to remain at previous year's level. This reflects the flat order backlog and the short-term market environment I just described. Second, we expect comparable EBITDA to remain at previous year's level or increase.

The drivers are clear. On the positive side, we'll have additional net savings of roughly EUR 30 million from the operating model renewal as well as the first benefits from the new global supply unit. On the more cautious side, general market uncertainty remains high and for that reason, we guide for flat or increase.

Our long-term ambition remains unchanged. Our 2020 target is a 15% comparable EBITDA margin, a clear step up from the 11.9% in 2025. And we continue working with determination to progress also in 2026.

Despite the market challenges, our simplified operating model, our focused strategy position us well to navigate near-term volatility and to continue creating long-term value for both our customers and our shareholders.

With that, I'll hand over to Pekka for instructions on the Q&A.

Thank you, Thomas and Katri, and let's now go to the Q&A part here. [Operator Instructions] But we start with the questions here from the platform since we have a few. So first of all, Thomas, can you discuss the Services market in 2025 and the outlook for 2026 for biomaterial services as it's one of the important factors for the guidance?

Yes. Clearly, that is one of the swing factors for the guidance. Looking back 2025, I think divide the year in 2 parts. The first half, clearly strong, especially in the beginning of it with parts, but then also sort of over the summer period, good mill improvement projects coming off, some prebuying ahead of the tariffs as well. We also saw that in the first half. Then turning into a softer second half that really reflect our customers' operating rates and the challenges that they are going through.

Going then into '26, which I think is what we are most sort of interested and passionate about how that will turn out. Clearly, softness continues. We don't think -- we don't see that it's going to be more soft than what we experienced now, but it is going to be soft. It is a bit foggy in terms of looking sort of further out how it will. But then I think it's -- I think we -- what we are doing as well ourselves is we're investing in commercial capabilities. We strengthened our life cycle concepts to actually help our customers. There's still a lot they can do in terms of the mill improvement projects to drive up their efficiency so they become more competitive in their market. And I see that as a positive thing, but it's in our hands that we can actually drive that ourselves.

Thank you, Thomas. Thank you for that clarification. And then about the guidance, it was already reflected here, but we received also a few questions before the call started. So does the guidance include Severn acquisition? And what kind of financial impact? So 2 questions here. Do you expect from Severn in 2026?

Yes, good point. I think it is very important to clarify that Severn is not included in our guidance. It's too early to do that. We will, of course, include it once we close it in the second quarter. That is clear. Severn had a 2025 estimate of roughly EUR 250 million of sales. That will, of course, come into Valmet at the time we close the deal from a run rate perspective.

Yes. Thank you. And then a question on the Services net sales, maybe going to Katri here. So what's the Services net sales decreased in Q4, so were there some specific drivers for that decrease?

Good question. Thank you. First of all, organically, it went down by 7%. So FX played a role there. But Thomas discussed or told in his presentation that as you remember, in Q3, our orders were a bit more tilted towards these mill improvement projects, and they take longer time to recognize as revenue. So that was the main reason.

All right. Thank you. Thank you for those. And please use the platform. We'll address those questions also later if there are any more. But now we go to the conference call. So operator, I hand over to you.

[Operator Instructions] The next question comes from. Panu Laitinmaki from Danske Bank.

I have 2. Firstly, on the biomaterials. So the margin trend was better in Q4 than in Q3, if we look at the year-on-year development and the absolute level. The question is what was behind that improvement? I mean you said that you got a bit more cost savings in Q4 than Q3, but was that the reason? Or was there something else in the underlying business?

Basically, if you think about -- I think we also said it in part that a large part of that margin improvement in Q4 for buyer was that they had part of the operating model changes that they actually received or that impacted them positively. And as you probably remember, Panu, we said roughly 2/3 of the savings from the operating model comes into the biomaterial business.

Okay. Then secondly, on the process performance, you said in your comments that you don't expect the margin to remain at the record high '25 level. Were you referring to the Q4, not continuing at the '22 level or on a kind of full year basis, what you reported for that division?

I think we specifically are commenting on that it will not stay on what sort of Q4 level going forward. So as you recall from the Capital Market Day, this is one of the areas where we want to invest into driving more organic growth with investing into sales resources and further R&D resources that we started executing right after the Capital Market Day and the strategy was launched. Some of these recruitments are coming online late last year and early this year, and that put -- we can say, increase the cost level and therefore, take the margins down. Then it's also clear when you drive sales in this area, we will not see the bottom line impact as fast because it takes a bit of while before it really gets into the service mode of these solution.

And may I build on top of that. So if you look at the PPS margin, so it was actually really strong on the second half of last year. And we expect it to ease a bit, but still remain on a solid level.

And you also remember, Panu, we said it in Q3 as well, we were commercially ahead of the curve in terms of anticipating some of the cost challenges that now comes online from a tariff perspective, et cetera.

The next question comes from Mikael Doepel from Nordea.

So I have a couple of questions or 2 basically. I'll take them one by one. So firstly, on the Service segment, I appreciate the comments earlier. But if you could give a bit more comment there, you say it's still a tough or a soft market, you could say. Is there any region that stands out in terms of consumables demand, for example? And how do you see the rebuilds and other projects if you look at the current environment? And also if you think about the trajectory for the business in the midterm, do you see any pent-up demand building up currently? And also, is there something in this cycle that is different from the past? In other words, do you see any reason why demand would stay weak beyond a few quarters?

Michael, thanks for joining and thanks for the call -- thanks for the question, even though you are calling in. Good question. I think let me elaborate a little bit because I think it is an important driver. There's probably 3 elements I'm sort of looking into when we think about it. You asked a little bit about are the areas geographically where there's differences. I think it's clear that North America took some capacity out end of Q2, Q3. Now they're running at very good operating rates. That's great to see that, that actually also impacts our business also going now into this year. On the other hand, we had some quite low operating rates, in particular, in the China Asia market, which then, of course, also have impacted the Service business.

Do we see that continue? I think with the -- can we get into a global economy where there's a little bit less uncertainty that will also drive consumer behavior and confidence up, which will then, of course, will be helpful for our customers, which will then create more demand and therefore, the operating rates will go up. I think that's -- I think it's harder to see that it should go further down from here. I think that is a pretty stressed or pretty low end of the market range that we're in.

Then what also I think is going to help us in the sort of going forward is if you look at our capital business in this area for '25, then I would say just sort of give you a little bit of more flavor to this. Pulp business, we probably have a 50% market share there last year. Packaging business on the capital side, I'm not talking about, capital on the packaging business, definitely leading for sure in terms of capturing a very strong position there last year. And then on tissue, we also had a hit rate that was well above the 50% last year. So that builds also the installed base, even though it was a relatively soft market also on the capital side, but it does help us going forward.

Okay. And then another question on the project or the capital business you just mentioned. So if we think about the larger potential greenfield projects out there, how would you describe the current market environment and the pipeline? I mean, do you see the increased geopolitical uncertainties pushing projects out in time or even some cancellations? Or are things actually progressing as planned? Any color there would be helpful.

Yes. No problem. I think -- not a big change from when we talked last. I think that sort of situation basically is the same. They are the same projects in Latin America, as everybody knows about. There's some -- still some activity across other parts of the world. I think our pipeline generally looks the same as what it did a year ago when we look at sort of our sales pipeline. So with that, I don't think there's bigger changes. Maybe a bit of further color, I would say, I think North America, with the old installed base, there is good opportunities for our customers to actually improve their current operation by doing larger mill improvement projects. It's always difficult to sort of predict when it actually happens, right?

Sure. Absolutely. And then just a brief follow-up on that and related to Arauco. I think you mentioned that you expect revenues of about EUR 400 million from that project in '26. What was that in '25? You might have said this, but I missed it, sorry.

Roughly the same. So it's roughly evenly distributed. So if you think from a run rate perspective, you're going to see the same net sales in '26 as you saw in '25. We've been happy with the progress in the fourth quarter as well, progressing really well on all the different install islands, so -- and very pleased with how the team is managing and operating that.

The next question comes from Tom Skogman from DNB Carnegie.

This is Tom Skogman from DNB Carnegie. I would like to get a bit more clarity on the savings program. So if you first start with this EUR 80 million program for white collars, I think you said the incremental savings in the P&L in '26 will be around EUR 30 million. But is this kind of the total impact also adjusting for the growth plans that you have? Or should I take away some of this EUR 30 million kind of build the bridge?

Yes. Good question, Tom. And that's like we said before, you need -- we had roughly EUR 30 million in '25. We'll have another EUR 30 million in '26. The EUR 30 million in '26, that is sort of net of investment into growth.

Okay. So that's the total impact. And then I'm a bit surprised that you don't give out any information at all about this EUR 100 million savings program or kind of supply chain savings and manufacturing footprint. Should I estimate some savings at all this year? Or is this kind of not the thing for '26 or for '27 and beyond? Or what should I think?

Yes. That's a good question, Tom. There are a couple of parts to the whole global supply savings, right? The EUR 100 million we talked about back in June. Clearly, there's some that we are driving sort of relentlessly sort of get short-term impact from -- particularly from a procurement perspective. Then we're also looking overall footprint, how does that actually -- where should we focus our manufacturing capabilities, so how to think about, and of course, we will throw more color to that and information about that as we progress throughout '26, and there will be sort of -- yes, so you'll know more about that. I would probably think about having something similar to the operating model savings in your spreadsheet.

So around EUR 30 million savings this year and nothing in '25 basically?

Yes. I would have said double-digit millions. So very much in line with what the Boss just said.

But there were no savings here in '25, right?

They really start to materialize in 2026. So that's the thing.

And when you have to think about why did we say no savings in '25, Tom, is sort of like we think compared to what we have seen earlier, right? So we talk about where -- how are we cranking up the machine to deliver more, right? And that...

But can you just give some thoughts about where you will get this kind of half the supply chain and then the rest is kind of factory closures and what of this will be reinvested also so we don't plug in too much into our models?

Yes. It's clear that some of these savings in terms of driving our global competitiveness are very, very important from a competitiveness perspective, of course, also from a margin expansion perspective. So some of it will be or will have to be in particular in today's environment, be reinvested into actually winning the projects. That is clear.

Yes, I understand that. Okay. And then finally, the Severn order trend in '25, you just said the sales what it was, but can you give some indication on the order trend there?

For Severn?

Yes.

Yes, let's come back to that when we close.

The next question comes from Sven Weier from UBS.

The first one is a follow-up on Michael's regarding the greenfield project pipeline and your position in the Chinese market because obviously, we've seen a few projects there last year. I think there's another one coming this year, at least one. So we always talk about South America, but there's quite a few things happening in China. So how do you see your chances of winning something there in 2026? That's the first one.

Yes. Thanks, Sven, and thanks for joining. China market, important market for us. We're well established. We delivered the first machine there back 90 years ago, I think. So we've been a long-standing supplier into the Chinese market. It is clear, as you said, some of the dynamics we see in the China market is that they are going -- they have aggressive generally investment philosophy, but they're also going more integrated, which we have sort of not seen to the same extent before. So they're going more backwards into actually having their own pulp supply, and that will drive demand for pulp projects in the Chinese market over the next couple of years.

But you also see that going ahead in your current pipeline for this year?

Yes. Yes. It's always difficult to say sort of when does things really pan out. I have to sort of say that as well. But yes, we do see it in the pipeline.

And the second question I had is just around the guidance because obviously, with flat sales, you give a bit of a point guidance on revenues, which I appreciate. But on EBIT, right, you say flat, but could also increase. I just wonder about the moving parts, right? Because, I mean, operating leverage is not going to have an impact if your revenues are flat. I mean what are the -- and you talked about the savings. I mean, should we expect a big mix impact on the bridge? And I mean, what kind of range are we talking here? Could it be a significant increase? Or are we talking about a relatively narrow range here also for EBIT?

Yes. So good question. So what's really the sort of the swing factors here? I think as we've shown in last year, especially second half, we've taken sort of our own destination really in our own hands, right? We sort of -- with having been early on, on the operational savings, which then hit the bottom line already second half. Swing factors going into '26, I would say, to a very large extent, 2 things: service growth and then growth in our PPS business. Lots of -- Katri talked about our order backlog, but still a lot of book-to-bill going into or have to be happened this year in '26, right? And that's mainly thinking about PPS and the service, especially maybe on PPS, which may be especially on the automation systems.

The upside is not limited by the EUR 30 million net savings, but there could be also a positive mix effect on top of that if things go well.

Yes. Back to how does the growth come in Service and in particular and in PPS, yes.

Which would then be more, I guess, back-end loaded on Service, given that short term, the Service market is still difficult, as you said, right?

Exactly. Exactly. And that, of course, as you're saying, that creates the mix impact as well, which then drives up our margin.

[Operator Instructions] The next question comes from Timo Heinonen from Handelsbanken Markets.

It's Timo from Handelsbanken. I mean I'm sorry if you already commented this, but the Service profitability very strong in fourth quarter. And of course, I know that the cost savings, but at the same time, the sales are down quite a bit. I think it must have been some underlying improvement. I mean that the margin is up only because of the cost savings?

First of all, thanks for joining, Timo. And did you mean -- are you talking just about the Bioservice or did you talk about the whole thing?

Bioservices, of course.

Sorry, once again, I couldn't hear you.

I mean if we look at what the margin could have been and then, of course, you have had some cost savings, but then the revenue being down. So it seems that you have been able to kind of improve the underlying margin as well, yes profitability improving, excluding the cost savings.

Timo, as you know, we cannot give comments on the Services profitability overall. But if you look at the buyer side, the main driver for -- because the volume was dropping, then margin was kept was actually the operating model savings. So that was the #1 thing.

Okay. But no kind of underlying improving, I mean, pricing or anything like that?

Not significant, I wouldn't say. [Technical Difficulty] getting ahead of the curve from the softness in the market, and that's what we are quite pleased with that, that decision really proved out to be the right one.

The next question comes from Tom Skogman from DNB Carnegie.

I would just like to understand the dynamics a bit better in China because to me, it seems like you have other competition there than you have in the Western world, and it's very hard to understand what is kind of happening to your market shares in China in board machines and in pulp mills. I mean we see so few order announcements from you regarding Chinese customers, especially on the pulp side, but there seems to be a lot of things happening there. So I would like to understand it a bit better.

Yes. I think -- I mean, I'm not sure I fully get your question, Tom. So forgive me. So ask a follow-up if I'm not answering you on that one. I think China market, yes, it is a different market than some of the others. There's some different competition. But clearly, our large Chinese customers, they do look at total cost of ownership or cost per tonne or being the most efficient. They understand probably very, very well that it is about having the lowest operating cost, especially in that market where there also is overcapacity. So how do you actually get to be able to compete effectively and profitable in that market as well. And that's where I think our technology comes really into play because we can deliver that with the most -- or the lowest total cost of ownership to our customers, right?

But if you look at pulp mills in China, I mean, what is your market share there the last 5 years or so? And is there any kind of change going on?

Yes. I don't think we disclose sort of regional market shares. But I think, as I said, I think it was to Michael's question, that we had a good year in our pulp business as well with sort of a 50% -- taking 50% of market share from a global perspective.

But are there other competitors in China in pulp mills? I mean this is really what I want to understand, how are you doing against them in kind of midsized projects, et cetera, if that's kind of one of the hopes that there will be things happening this year?

I think our advantage also in the Chinese market or maybe in particular in the Chinese market even more so is back to most efficient equipment, but also this thing about being able to support the customers in the start-up, in the process and start-up of the equipment, and that's where other competitors, especially sort of local competitors don't have the capability at all.

There are no more questions at this time. So I hand the conference back to the speakers.

Thank you, operator, and thank you for the good Q&A session. There are no more questions in the digital platform either. So I think it's time to start to wrap up. So the Q1 report for Valmet will be published on April 28. I hope to see many of you in the roadshows and seminars we are planning to attend in Q1. But now I'd like to hand over to Thomas for you for any closing remarks.

Thank you, Pekka. And thanks, everyone, who joined us today for a good discussion here on this webcast and other venues as well. First and foremost, I just really want to thank the Valmet team for the hard work and commitment during the past year. Thanks to the finance team for delivering another great transparent report all at the right time and had all the deadlines.

To sum up or maybe also maybe even more importantly, I want to have send a big thanks to our customers for the trust that you have shown us throughout the year and for a lot of you, very challenging year. And I sincerely think that we've also played it back and try to deliver as much value and make you as competitive as you possibly can in your markets as well. But thank you very much for the trust.

To sum up, we achieved a record high EBITA margin in Q4, thanks to the early action we took last year. 2025 was a true transformative year for Valmet with new strategy, new operating model, a lot of initiatives. Next strategic milestone is the Severn acquisition, which makes us even better positioned for growth in the Process Performance Solutions and outside our biomaterial core.

So with this and despite some market headwinds, we are starting the year 2026 from a position of strength. See you out there. Have a great weekend when you get there. Thank you.

Good morning, everyone, and welcome to Valmet's third quarter result webcast. My name is Pekka Rouhiainen. I'm Vice President of Investor Relations. And with me today are President and CEO, Thomas Hinnerskov; and CFO, Katri Hokkanen.

Thank you for taking the time to join us today. We will walk you through Valmet's third quarter. We will highlight our improving performance, key order wins and how we are navigating a market that continues to present both challenges and opportunities.

Agenda is straightforward and the usual. So first, Thomas will present the Q3 highlights and discuss our strategy execution, and then Katri will go through the financials, and Thomas then conclude with the guidance and market outlook. And after the presentations, we'll open the lines for your questions, and there's also the possibility to post the questions through the digital platform.

So thank you again for joining us and your interest in Valmet. But with that, Thomas, the floor is yours.

Thank you very much, Pekka. And also a warm welcome and good morning from my side.

Before we start, I do want to highlight that we've updated the interim report and this presentation to reflect our 2-segment structure in the new strategy, but also even more so making it more investor-friendly and easier to read. So, I hope you appreciate that and actually have noticed the change from last time.

Let's start with the key highlights for Valmet's third quarter, a period that truly demanded our best as the market was challenging in some of our key areas. It's important to be clear while the process performance continued to benefit from a favorable market, Biomaterials faced real headwinds, and that's why I'm pleased with the achievements in this quarter overall. This quarter was defined by improving performance and some landmark wins achieved in a very challenging market.

Next, I'll walk you through 7 highlights that together paint the picture of how Valmet is not just navigating, but actually leading in this environment. First, our Process Performance segment continued its strong growth track, delivering 11% organic growth in orders received. This is a clear signal of market trust and our team's ability to execute. The market environment was sort of a tale of 2 realities: continued good demand in Process Performance, but weaker conditions in Biomaterial. Our diversified portfolio helped us balance these forces.

Despite the headwinds, we increased orders organically by 7%, reaching EUR 1.1 billion. That's a solid achievement in today's environment. A real milestone was the win of a record large tissue order from the U.S. that sets sort of a new benchmark for Valmet and it opens up for robust lifecycle opportunities going forward.

Financially, we delivered our best third quarter ever comparable EBITDA of EUR 159 million and margin of 12.3%, slightly higher than last year and one step closer towards our 2030 financial target of delivering 15% comparable EBITDA margin.

We've also started executing our Lead the Way strategy. And already we're seeing concrete benefits, especially through the savings from our renewed operating model coming through also here in Q3. Finally, our guidance for 2025 remains unchanged, both in terms of net sales and comparable EBITDA, are expected to stay on last year's level. That stability is a sign of solid execution and the strength of our lifecycle approach.

With those highlights in mind, let's look at how our strategy is coming to life. When we launched our Lead the Way strategy in June, we set out more than just to change our operating model. It's a route to overall higher performance, more integrated customer service and increased shareholder returns.

Since then, we've put the new operating model and reporting structure in place. Our teams are now aligning around lifecycle, value creation and supply chain excellence. Lead the Way isn't just a slogan. It's showing up in how we work together, how we serve our customers and how we deliver better results.

Already, we're seeing concrete benefits. We are targeting, as you know, EUR 80 million in annual savings from the operating model renewal. And in Q3 alone, we realized EUR 15 million of those. We expect the full run rate from early 2026. However, it is good to note that partly we will reinvest some of that savings into growth and to capture future growth.

Also we are strengthening our leadership team, especially in tissue business, where Jon joined us in August, and we made other key hires to support our execution. What's most encouraging is the feedback, however, from our customers. They're responding positively to our lifecycle approach and our regenerative purpose.

It's clear that our strategy supports long-term value creation and performance. So, the Lead the Way strategy isn't just underway. It's already making a difference. We are building momentum and we are committed to delivering on our promise.

And as we move forward with our new strategy, it's encouraging to see that our core strength and ongoing execution are already delivering results. While the full impact of our new strategy will unfold over time, the momentum we are seeing in orders received this quarter shows that Valmet is well positioned to capture opportunities in both favorable but also in challenging markets.

In Q3, our orders received increased organically by 7%. This was the fourth consecutive quarter of organic growth. This achievement is a reflection of our team's ability to win business and deliver value even when the market conditions vary across segments.

Process Performance continued its strong growth with 11% organic growth in orders received. At the same time, Biomaterial was faced with softer market condition. Our record-breaking tissue order from the U.S., however, demonstrates our capability to secure major wins in this segment. These results support a strong order backlog, provide a solid foundation as we move into the final quarter of the year and look ahead into 2026.

Let's bring these numbers to life with a concrete example of how our solutions are making an impact in the market. Today, I want to show our automation platform wins outside of the pulp and paper space, which many people associate us with.

We've been selected to automate a hydrogen fuel cell facility in Naepo in South Korea. The point here really is the versatility of the Valmet platform, solving problems in surprising areas even such as clean energy and fuel cells.

Every new automation site expands our installed base and our opportunity for delivering this lifecycle software and services over time, delivering recurring revenue opportunities for us as Valmet. It is repeat business with Lotte Engineering & Construction, and it does introduce us to Naepo Green Energy alongside their existing LNG plant in South Korea. To sum up, this is a small win today, but a strong proof that Valmet automation platform is relevant far beyond pulp and paper.

Let's now zoom in on the Process Performance segment, where our momentum has been especially strong. In Q3, Process Performance delivered another standout performance, building on the momentum we've seen throughout the year. Orders received increased to EUR 345 million with organic growth of 11%. That's, again, the fourth consecutive quarter of double-digit growth, driven by strong performance in a robust market. These figures do suggest that our market share has grown through acquisition, but definitely also organically.

Net sales also grew organically, reaching EUR 361 million, but that's truly remarkable is actually our profitability. Comparable EBITDA climbed to EUR 79 million and the margin hit a record high at 21.9%. This does reflect our disciplined commercial execution, the benefit of our operating model renewal, but also improved performance in API, the acquisition or the business we acquired last year, as you will remember. With this level of performance, Process Performance is setting sort of the pace for Valmet overall.

This quarter, we secured the largest tissue order in Valmet's history, a true milestone for our biomaterial business. This landmark U.S. orders expands our North American installed base, strengthening our leadership in the ultra-premium tissue segment and deepens our long-standing partnership with Sofidel.

Financially, it's a record high order included in our Q3 results. Revenue will be recognized over the period of 2026 to 2028 with additional long-term growth expected from lifecycle services after the start-up. The project covers the tissue line, automation, flow control, digital solution, delivering efficiency and reliability for our customer. I would say wins like this set the stage for future growth and innovation in this segment.

Moving on to the broader performance of Biomaterials segment beyond the landmark win we just discussed. This quarter, the segment operated in a notably softer market. The environment for larger projects has been subdued for some time. What's new is that the service market slowed down compared to Q1 and Q2 when our service orders grew at double-digit rates organically.

Importantly, we saw the first sign of the softening already back in Q2 and communicated it also clearly at our previous webcast. We noted a more cautious environment emerging with customer activity expected to decrease throughout the year.

In Q3, service orders were essentially flat 1% plus. We saw a slowdown in especially consumables and performance parts. Net sales remained at last year's level, but margin pressure was evident. Our comparable EBITA margin declined to 9.5% despite the cost benefit coming in from our operating model renewal.

The margin was lower across the product portfolio, I would say. This does highlight the need for even tighter cost control. We're addressing this head-on through our new global supply unit, which is a key part of a broader strategy to strengthen cost competitiveness in the segment.

This covers the operational and market development for our segment this quarter. To give you a bit more deeper look into the financial development, I'll now hand over to Katri, our CFO. The floor is yours.

Thank you, Thomas. I will now take you through Valmet's financial development for the third quarter. I will cover profitability, cash flow, balance sheet and other key financials in my presentation. And as always, my aim is to provide a clear and transparent view of our financial position, and the drivers that are there behind our performance.

Let's start with an overview of our net sales and comparable EBITA for the third quarter. Net sales for Q3 remained stable at EUR 1.3 billion. And organically, net sales were 2% higher than in Q3 last year, and this was due to currency headwinds of roughly EUR 31 million as euro strengthened against the U.S. dollar and other key currencies.

Comparable EBITA reached EUR 159 million with a margin of 12.3%, as said, a record high for the third quarter. This increase was driven by a very strong performance in Process Performance Solutions and approximately EUR 15 million in cost savings from our operating model renewal.

Our last 12 months comparable EBITA margin remained at 11.7%. Sequentially, it's flat, but still at record level. And actually these results show that we have ability to deliver a consistent financial performance even as market conditions fluctuate.

Having covered our net sales and profitability, let's now look at our order backlog and what it means for Valmet's outlook. At the end of the third quarter, our backlog stood at EUR 4.5 billion, which is EUR 74 million higher than what we had at the end of 2024. And this solid backlog, together with healthy book-to-bill ratio this year, creates a good foundation as we move into the final quarter of this year and also to 2026.

And based on our current delivery schedules, we expect that roughly EUR 3.6 billion of the backlog will be recognized as net sales in the fourth quarter as well as in 2026. And this provides us with good visibility and also supports our confidence in delivering it in line with our full year guidance.

Next, I'll walk you through our cash flow and working capital development for the quarter. Cash flow from operating activities amounted to EUR 94 million in Q3 and EUR 569 million over the last 12 months. And our comparable cash conversion ratio was 92% for the last 12 months, and this is right in line with Valmet's long-term historical average.

Strong cash conversion demonstrates the strength of our business model and also our ability to turn profits into cash even as market conditions fluctuate.

Net working capital amounted to minus EUR 76 million or minus 1% of last 12 months' orders. Sequentially, from Q2 to Q3, we tied up EUR 63 million more working capital, but this was mainly due to timing effects, which reflect normal variation between the quarters.

But to put this into perspective, if we compare with Q3 last year, we have actually released roughly EUR 100 million in net working capital. And this improvement comes from reductions in our inventories and also in our contract assets, which is a good achievement in the current environment.

And if we zoom out even further at its lowest level about 5 years ago, our net working capital was EUR 0.5 billion lower than what it is today. However, it's very important to understand the underlying dynamics. So this shift reflects the growth of our Process Performance Solutions and Biomaterials Services business, which typically require more net working capital than CapEx-driven project business.

As these segments have grown, while then the Biomaterial project business has been in a low cycle, our working capital profile has also evolved accordingly. And as always, payment schedule in our long-duration projects have a significant impact on net working capital development.

Then year-to-date CapEx was EUR 81 million. This is representing 2.2% of net sales and it's also in line with our long-term average. I have to say that efficient cash generation, disciplined capital allocation remain our key priorities. It's supporting by both operational flexibility and also our long-term growth ambitions.

Next, I will walk you through our balance sheet development and gearing. At the end of Q3, our net debt stood at EUR 945 million, and we reduced our gearing to 38%. This is a clear improvement from the previous quarter and well within our target of under 50% gearing.

Our net debt-to-EBITDA ratio also improved now at 1.5. And the net average interest rate on our total debt remained stable at 3.6%. And net financial expenses fell to EUR 13 million in third quarter, and this is down from the EUR 17 million we had a year ago. And this improvement is driven by both a lower average interest rate and also a reduction of our total debt. For a context, a year ago, our average interest rate was 4.4%.

It's also worth noting that the second dividend installment, EUR 0.67 per share totaling EUR 123 million, was paid in early October and it's not yet reflected in these figures. Our liquidity remains robust with a cash and cash equivalent of EUR 479 million at quarter end.

So in summary, balance sheet is strong. Our gearing is comfortably below our target and our liquidity gives us the flexibility to invest in growth, support our long-term strategy even in a challenging market environment.

Moving on to capital efficiency and EPS. Our comparable ROCE for the last 12 months was 13.1%. This is a solid level, but I want to be transparent. So our financial target is to reach 20% comparable ROCE by 2030 and we still have some way to go.

The decrease in ROCE in recent years is mainly due to the acquisitions we have made. So these have increased our capital base and it takes time for the full earnings impact to come through. We are confident that these investments will support stronger returns over time and we have a clear plan how to get there.

Then our last 12 months adjusted earnings per share was EUR 1.77, down 8% from full year 2024. And it's important to clarify that this is adjusted EPS, which excludes the acquisition-related adjustments, but includes items affecting comparability. It's sometimes assumed that these items affecting comparability are excluded from adjusted EPS, but in our reporting they are included.

Even though our comparable EBITA is EUR 6 million higher year-to-date than last year, the decrease in adjusted EPS was mainly related to restructuring expenses from our operating model renewal. And these are, of course, one-off costs that support our long-term competitiveness. So we are taking the right steps to ensure stronger returns and sustainable value for our shareholders.

Moving on to key figures to conclude my presentation. Most of these figures have already been presented today, but I'd like to highlight a few important topics. First, almost all key indicators have developed favorably in the third quarter. And this is a clear sign that our performance was strong even in a challenging market environment. Year-to-date net sales down 3%. This is still in line with our guidance of flat net sales for the year, so we remain on track.

Items affecting comparability were minus EUR 10 million, and these are mainly related to a settlement agreement in the Biomaterial Solutions and Services segment following a delivery made 2 years ago. And the delivery required corrective actions led to a commercial dispute, which has now been resolved. And while unfortunate, incidents like this are rare but they do sometimes happen in the project business.

Lastly, the effective tax rate was roughly 3 percent points lower in the third quarter and 4 percentage points lower year-to-date. While this change is rather large, it's important to note that the tax rate always reflects the geographical mix of our business. And last year, the tax rate was higher than typical. This year, it's lower. So going forward, we continue to expect a tax rate of roughly 25%.

That concludes my review of the key financials. Thomas, over to you to go through guidance and our view of market outlook.

Thank you very much, Katri. Let's look at the guidance and the short-term market outlook.

Our 2025 guidance remains unchanged. We expect both net sales and comparable EBITDA to remain on previous year's level. This outlook is supported by our healthy backlog, our cost savings and that we are realizing from our renewed operating model.

Looking ahead, our short-term market condition remains mixed. We continue to see a favorable environment in Process Performance, even though the dynamic tariff situation and the overall economic outlook does create uncertainty.

The Biomaterials market overall remains challenging. The Biomaterials services markets softened clearly in Q3, and there is a risk of further softening there. One specific area of concern is consumables and performance parts, where orders have been trending down since Q1. This part of business reflects a more day-to-day customer activity and likely mirrors our customers' reduced production rates and to some extent, lower financial results.

On a positive note, the tissue market stands out. We won a landmark order from the U.S. in Q3 and the pipeline looks healthy also going forward. The pipeline in our other capex-driven businesses is relatively stable. There are some mega projects in the pipeline, but as always, the timing is difficult to predict. We do remain open to work with our customers if some of these large projects move on to decision phase in 2026.

For Q3, it's important to remember -- or Q4, it's important to remember that the comparison period includes in Q4 2024, a mega pulp mill order from Arauco, impacting the comparison figures, clearly also in the Process Performance and the Biomaterial Services.

Despite the market challenge, I'm confident that our simplified operating model and focused strategy or strategic position as well will enable us to navigate near-term volatility, creating at the same time long-term value for both our customers and our shareholders.

With that, I'll hand over to Pekka for instructions for the Q&A. Thank you, Pekka.

Thank you, Thomas and Katri, for the presentations. And we'll start from the digital platform here before opening the phone lines. So please remember that you have the chance to post the questions also through this platform. But there are a couple of questions here.

First of all, strong margins in Process Performance during Q3. So are there some one-off items or something like that explaining the good result?

Yes, great results in Process Performance in Q3 in terms of margin. Overall, I would say they did -- the margin was supported by the savings in the operating model. They were also ahead of the curve commercially on some of the costs that are coming in. So that will impact them later on in Q4, but we're happy to take that extra result in Q3.

On top of that, I would also mention that we did acquire API last year, and that performance has really come up and also showing really good results. We are very happy with that acquisition.

Good. Thank you, Thomas. And then another one here regarding the savings, so EUR 15 million saved in Q3 from the operating model related things, I guess. And how much are the savings that you're expecting going to Q4 and 2026?

We expect roughly the same level of savings into Q4. No, it's not going to change much. I think maybe just important to note going into '26, we will -- and that's also what we communicated at the Capital Market Day back in June 5 when we launched the strategy. Part of this operating model is also to free up resources so we can invest part of that back into future growth and therefore, actually getting into a better trajectory in '26.

Good. Thank you, Thomas. That's it for the platform right now. So now operator, handing over to you.

[Operator Instructions] The next question comes from Panu Laitinmaki from Danske Bank.

I would have a few. Firstly, starting on services and the outlook that you now gave. Could you kind of talk a bit more like where is this coming from, the weakness in services? And what is the magnitude of the kind of potential further weakening if you had orders declining 2% in Q3? Is this like 5% plus decline going forward or any indications of this one? And maybe on services, if the spare parts and consumables are down, is this the highest margin part of services that is declining currently?

Yes. Good question. If we look at the services and Biomaterials throughout the year, Q1 consumable spare parts really, really strong. Q2, consumer spare parts came down, mill improvements came up, and we'd still have a good growth overall in Q2. Here in Q3, you can say that that trend has sort of continued consumables and spare parts down, particularly, I would say, in Europe and North America. And then where then mill improvement projects has gone up in China and in North America, in particular, where we've seen the biggest growth.

I think it's important to note that the mill improvements really are important projects for us because that's where we really help the customer as well in improving their efficiency and their cost competitiveness. And we're very happy that we have seen a good track record of that. Clearly, of course, that's slower moving in the backlog or in the order portfolio, so that the sales comes out a bit later than if it was spare parts or consumables.

Okay. Then on the cost savings, how did the EUR 15 million split into the 2 divisions? And maybe on '26, so should we expect EUR 15 million to impact your EBIT if you kind of get EUR 30 million for this year? Or did you indicate that you aim to invest part of that to the business, so it will be like less than EUR 15 million support to the earnings or margins?

Now you had 2 questions there. What was the first part? Just I couldn't really hear you coming through. Sorry.

It was how did it split, the EUR 15 million, into the 2 divisions?

Okay. Yes. The split between Bio and Performance Solutions, think about it like 2/3 bio and 1/3 in the process performance because you also have to think about where we took the most complexity out was actually in the Biomaterial business.

And then Thomas, about 2026.

Yes, 2026, we will sort of have full run rate early 2026 of these EUR 80 million. We will reinvest some of that into growth, that I said. I would think of it like 80-20, where 80% goes into supporting the results and 20% maybe in the reinvestment. And of course, you also need to think about, I think we've also communicated that earlier, that it's split between white-collar COGS and white-collar SG&A.

My final one is on the Process Performance. So, you answered that there was maybe some commercial, they were ahead of the curve in -- so does it mean that prices were increased before the costs increased due to tariffs or so on, and that this will kind of go away or turn in Q4?

Yes. Clearly, I mean, as you also have seen, the market has been very dynamic and also in particular in terms of the tariff situation. So we have needed to adjust our pricing according to that. And then some of that tariff has come through a bit later than was originally expected.

Can you quantify what is the magnitude of that in the margins?

Not -- I don't think we supply that kind of level of information. But there was -- there was a good impact. But you also have to consider into that API was doing better, cost savings were coming through without the reinvestment into future growth. So lots of things sort of pointed or gave some tailwind into the margin development for PPS.

The next question comes from Sven Weier from UBS.

The first one I got is just coming back on the services outlook. I was just wondering, obviously, after Q2, you already gave a slightly weaker outlook for services into the coming quarters. I just wonder the outlook that you give today on the coming quarters, is that incrementally weaker than what you had in mind in Q2? Or is it the kind of same softness? That's the first one.

Sven, thanks for joining. Overall, we've seen, as you can see, that the daily operating rates, consumables and spare parts has come down. We've seen in Q2 and Q3 roughly 9 million of tons of capacity coming out of the market where we roughly have 4 of those. So that's, of course, impact the overall consumption of these spare parts and consumables. So that has impacted.

Now it is -- you can say that the situation is quite dynamic, can change positive-negative quite fast with our customers and depending on how their situation is with their customers. So it's a bit hard to say, but we do see a risk of further softening, I would say, going into Q4.

And is it that customers can still actually destock? Was there maybe also a prebuy ahead of the tariffs, and that's also weighing on the spare parts demand?

That was probably back to Q1 where we saw spare parts and consumables coming up quite a lot and not happening really in Q2 and not in Q3 either. So I think it's more about prolonged shutdowns to actually manage the overall capacity, which then drive the consumables.

The other question I have was just on the Biomaterial margins and the -- which were a bit weaker than we expected. I mean, is it also that Arauco is a bit to blame here in terms of margin dilution? And is the project going according to plan?

So Arauco is really going according to plan. I was actually visiting on-site there a few weeks ago. So I'm super happy that you're asking. I was there together with the CEO of Arauco, and we made a joint review of the whole project together. And it's great to see how it's progressing according to plan, and the team are really playing together to make this a success for Arauco as a customer. So very happy with the progress there, I have to say.

Then just maybe to give you a little bit more flavor on the Biomaterial overall margin. We have seen -- we are seeing that sort of the overall product portfolio margin is lower than what it has been historically. But that we see more or less throughout sort of the year, and that will also go into Q4.

Understood. And the final question from my side, if I may, is just on the -- coming back to the cost saving bit. I mean, did you say there is an incremental EUR 15 million in Q4? Or is the run rate staying at EUR 15 million in Q4?

So we've achieved -- so I'm more saying the run rate will continue like this. You can also see that in the number of people that have actually left if you sort of click on that, you will see that we have achieved actually most of the savings from a run rate perspective. Some will come during Q4, Q1, right? But most of it…

But you will be an EUR 80 million annualized in Q1, beginning of next year, you said, right?

Yes, sometime early 2026. So sometime during Q1.

And did you use some of these savings then to win this major tissue project? Or do you need to invest these savings in other end markets?

No. So these savings are not related to the tissue win at all. So these -- when we talk about these EUR 15 million, they are solely related to the operating model change. And that's why we're also saying in order to actually deliver on the strategy, we will reinvest some of that very sort of focused and tailored in certain markets to win more share.

And then if you think about our global supply, the EUR 100 million that we talked about back in June, that's going into sort of 2 buckets. One is overall cost improvement and then, of course, also cost competitiveness. The cost competitiveness piece is a little bit of a longer game than just sort of a few quarters.

And then I guess tissue is not a market where you need to invest into market share gains because you are already strong.

Yes. Exactly.

[Operator Instructions] The next question comes from Mikael Doepel from Nordea.

I have 2, if I may. Firstly, again, coming back to the service market. Just to be very clear here in terms of how to read your guidance. So should we see it, as you know, the market being down perhaps sequentially seasonally adjusted in absolute terms over the next 6 months? Or are you referring to kind of a year-over-year market trend, which might weaken from what we have seen now, for example, in Q2 -- sorry, Q3 with your orders being down by 2%? So just trying to get full clarity in a way on that so we don't misinterpret it how to read the guidance, please.

Thanks, Mikael. I'm not sure -- I wasn't sure I understand the question, but the question is that when you -- when we say the guidance, it's -- are we comparing versus Q3 now for Q4? Or are we comparing with Q4 last year? Is that the question or?

Exactly. That's more or less the question. Yes. So trying to understand should we expect accelerating declines in demand year-over-year for the next couple of quarters? Or are you kind of looking at Q3 as a run rate and seasonal adjustment?

Yes. Of course, I mean there's always seasonality in it. So we always think about sort of comparing versus the last year, not from sort of the starting point or the ending point coming out of the quarter. So I think you should think about it versus Q4, but you have to, in Q4, think about that that was impacted by the Arauco order in Q4. Not just in the capital side, but also in the Process Performance Solutions, but also in the Biomaterial Services as the service package comes through there as well.

Yes. That makes sense. Okay. And then secondly, on the U.S. market very briefly on the pulp market, in particular. Now I remember you have been talking about opportunities in that market. So you have a fairly old installed base on the pulp side, recovery boilers and all of that kind of expecting good opportunities there. I guess we haven't seen that much flowing through yet, at least in your orders. So I'm just wondering if you would like to give a bit of an update on how you see that market now. I mean, is the overall tariff or uncertainties putting things on hold? Or any color on that trend would be great.

Yes. I mean North America market, a very good market. Overall, as you also alluded to, old installed base will eventually need to be upgraded and a lot of improvement projects will need to come through there. They are currently -- I would say, they've taken some capacity out during Q2, early Q3 as well to support sort of the overall situation there. However, they are running, I would say, close to optimal operating rates as we speak, right?

And they are actually sort of being -- what can I say, they benefit from the current tariff situation, I would say, overall, but they still struggle with what sort of -- what's the direction when they're looking into the coming quarters and years. And therefore, I think that's also one of the reasons why you've seen quite silent CapEx market, not just in North America, but overall.

The next question comes from Panu Laitinmaki from Danske Bank.

I wanted to ask about the EUR 10 million one-off costs. So if I understood correctly, this was a project settlement. So is this like the way you always treat this and so as an item affecting comparability? And how do you kind of define when it's a project loss test reported as part of normal business and when it's something that's taken out from the adjusted or comparable EBIT?

Yes. Thank you, Panu, for the question. Actually, this was a delivery that we have done already 2 years ago. So in that sense, it has been delivered. And there has been a dispute with the customer, which required then corrective actions, and now we have settled it. So these are very rare, I have to say.

Okay. And if I may, another question. What about these large projects in pulp? So -- or the potential ones, what is like the timeline? When do you think the customers are making decisions? Is it '26? Any color on those ones?

I mean, as usual, it is very, very difficult to predict when these comes out. They are very binary by nature. Of course, as you know, there are some of them in the pipeline, but question is when that decision is made. It's a bit about how the customers see actually the market for pulp developing into the future. And then -- so hard to give you sort of more insight on that one.

But of course, we are working with the customers having to sort of help them out doing the solution engineering, figuring out how would actually the payback and the return on investment look like for them.

The next question comes from Xin Wang from Barclays.

So my first question is on automation and flow control orders, which came at a very good level. Can you maybe talk about what's driving the demand, either by region or by customer groups? I think you mentioned hydrogen fuel and power in the release. And then you also talked about good pricing level being a driver. Is this across the sector or unique to Valmet?

Very good question. I think if you look at our Process Performance Solutions, they actually also have customers that are in challenging situation with some overcapacity and some tough pricing in their markets. However, we do see that they are very committed to the future. They have done some CapEx investments in actually to driving their efficiency going forward or into the future. So we've seen, especially in automation, maybe we see more CapEx orders than what we've -- and then service orders or that mix have actually been a bit more heavy on the CapEx, which is great to sort of in terms of installed base and future businesses, right?

Same go a bit with Flow Control. I think the pricing is more a Valmet specific thing than necessarily a sector thing.

Very good to hear. So maybe just a follow-up on this bit because when I look at your customer base in Flow Control, for example, I think there is 26% given out of your CMD slides being pulp and paper. For the other industries, what was the secret to gain pricing power in there in, I don't know, chemicals, renewable energy, metals and mining, et cetera?

Yes. I think taking Flow Control is really about having a very strong solution offering that adds value to the customer more uniquely than any of the other competitor, having a very focused and specific commercial plan on how you're actually going to get this to market, what segments are you focusing on, not trying to go too broad, but actually being very specific on where does your solution offer a uniqueness into the market and then really pushing that. And that is actually quite a number of industries where we have -- as part of the solution where we have a uniqueness that -- where we can actually serve the customer better.

Okay. Great. Maybe if I can ask one more question. I think in Q3, you continued to benefit from China orders, although presumably at a far lower scale than Q2. Can you maybe comment on your expectations over there, please?

Yes. So, what I also just said is that we saw several mill improvement projects in the Bio business in China, but we also had a -- also on the Process Performance Solutions, we also had some good orders coming in there.

I mean I think you know the Chinese situation. It is, of course, a challenging market like it is also some other places. And you just need to be very, very focused in your commercial strategy when it comes to China in order to be successful. Otherwise, you end up getting lost and you end up getting marginalized because you're trying to do too many things for too many kind of customer segments.

The next question comes from Antti Kansanen from SEB.

It's Antti from SEB. A couple of questions from me as well. I'll start with a clarification on the savings comment. So the EUR 15 million that you are flagging, am I correct to understand that this is the impact on quarterly EBIT and not any kind of an annual run rate number? So that would be the first one.

That's correct.

So it's safe to assume that if -- and then I wanted to come back to the comment on reinvesting part of the savings next year. Was this originally the plan when you announced the EUR 80 million cost savings during the Capital Markets Day? Or has something changed since then?

No, this was a clear part of the plan at the Capital Market Day.

Okay. Fair enough. Then the second question is on the outlook for…

Antti, just to be clear, of course, we're not just flooding in resources, right? It is very tail -- it's back to the plan and the road maps we created for the strategy implementation and execution back, I mean, before the June 5, and that's where the investments are going into, in particular when it comes to certain sales forces where we do see that there are opportunities, but they're not necessarily done historically because the payback time is not within the year.

Okay. I mean that's very clear. But I'm kind of correct, assuming that this is basically the quarterly run rate of net savings that we should assume. I mean the EUR 5 million is roughly already close to 80% of, let's say, the gross number that you are talking about. So --

Not too far away.

-- repeated in terms of --yes. Okay. Good to have it correctly. But then I guess the bigger question that I had was on the service demand and on the consumables and parts side, obviously driven, as you mentioned, by the client production rates. So how do you look at it? Is this just a business cycle that you kind of have to suffer right now? Or are you seeing something more permanent happening within your existing service base that would maybe require actions that were not part of the ones that you outlined on the strategy and the CMD in June in terms of, let's say, permanent closures of shrinkening of installed base in some of your key service areas?

No, I think it's driven by the moment. Of course, as I said earlier, the 9 million tonnes of capacity coming out. 4 million of those roughly is Valmet capacity or original Valmet equipment. That's, of course, a lot of it is quite old equipment, but anyhow it does, of course, drive demand.

But then the lower operating -- I mean, as I also said, we're seeing very good operating rates in North America now. If they closed a few sites in Q2, in particular. Very good operating rates right now. Europe, I mean, struggling as you probably would imagine and know, and also in terms of the operating rates, right. So, it's basically sort of say demand side driven right here and now for the customer.

The next question comes from Christoph Blieffert from BNP Paribas Exane.

I have 2, please. Can you help me better understanding the margin profile of spare parts and consumables versus mill improvement projects and services, please?

I think the right way to really think about it is that point one, we have a -- we set out an ambition for 2030 of having a 14% margin in our Bio business, right. That's sort of the aiming point. Secondly, that is then really about making sure we drive the lifecycle value for our customers, optimizing their outcome because we are the manufacturing equipment for the customer. In order to make them competitive, especially when it comes to older equipment, then these mill improvement projects becomes really important. And that then generates also then future service and consumable sales or parts and consumable sales.

So I wouldn't try to sort of see it in isolation or the mix. I think that just clouds the bigger picture in terms of the direction of travel. I think the only thing is that it's more important to think about that it's slower turning in terms of the order book backlog that it doesn't come out tomorrow necessarily, right, with like a spare part would do.

Okay. Understood. The second question is on 2026. Consensus expects some EUR 706 million of comparable EBITA for next year. I'm just wondering if you feel comfortable with the EUR 19 million year-on-year increase.

I think -- I mean, a good question. And as you know, we do come out with our guidance for 2026 in connection with the Q4 results. I think we are standing on good grounds in terms of going into next year. We've got a good order backlog. We've got savings that helps us improve our profitability. So in that sense -- we've got PPS also having had some good growth during this year. So we are going into with some good things in the bag, but let's see back in after Q4, how that would play out and more specifically.

The next question comes from Mikael Doepel from Nordea.

I just have a very small detailed follow-up on the 9 million tonnes of capacity that you're talking about taking out from the market. Are you referring to containable, consumable, pulp or everything together, just to be clear on that number?

Yes, it's mainly in the paper and board segment.

Okay. But also pulp then or just that…

Yes. No, I think that is -- I think you have sort of think about it as mainly a board thing.

There are no more questions at this time. So I hand the conference back to the speakers.

All right. Thank you. There seems to be no questions from the digital platform at this stage either. So it's time to start to conclude the event. And the Q4 report will be due on February 6 next year. And yes, I hope to see many of you in the various roadshows and seminars we are planning to participate still this year.

But now I'd like to hand over to Thomas for any final remarks.

Thank you, Pekka, and thanks to everyone who joined us today. To sum up, Valmet delivered a good performance and an improving performance in the third quarter, even as market conditions remain challenging. Our healthy order backlog and ongoing cost savings, like we also just talked a lot about from the operating model renewal, gives us confidence in our outlook. We remain fully committed to our strategy and to create long-term value for our shareholders and stakeholders.

So on behalf of the entire Valmet team, thank you, and thanks for their continued trust and support. We are looking very much forward to keeping you updated on our progress. And then have a great and wonderful day. Thank you.