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Contents |
Report of the Board of Directors 2024 ......................... | 2
Sustainability Statement .................................................... | 25
Financial indicators ............................................................ | 104
Formulas for calculation of indicators ......................... | 105
Consolidated financial statements ................................ | 107
Consolidated statement of income ................................. | 107
Consolidated statement of comprehensive income ...... | 108
Consolidated statement of financial position ................ | 109
Consolidated statement of cash flows ........................... | 110
Consolidated statement of changes in equity ................ | 111
Notes to the consolidated financial statements ........... | 112
Parent company financial statements .......................... | 170
Parent company statement of income, FAS .................. | 170
Parent company statement of financial position, FAS . | 171
Parent company statement of cash flows, FAS ............ | 172
Notes to parent company financial statements ............ | 173
Signatures of Board of Directors’ Report and Financial Statements ......................................................... | 186
Auditor's Report ................................................................. | 187
Assurance Report on ESEF Financial Statements ..... | 192
Assurance Report on the Sustainability report .......... | 193

Notes to the consolidated financial statements ......... | 112
1. | Basis of preparation ..................................................... | 112
2. | Reporting segments and geographic information .................................................................... | 114
3. | Revenue recognition .................................................... | 118
4. | Intangible assets and property, plant and equipment ...................................................................... | 121
5. | Leases ............................................................................. | 126
6. | Net working capital ...................................................... | 128
7. | Inventories ..................................................................... | 129
8. | Financial assets and liabilities .................................... | 129
9. | Derivative financial instruments ................................ | 134
10. | Financial income and expenses ................................. | 139
11. | Provisions ....................................................................... | 139
12. | Other current liabilities................................................ | 141
13. | Personnel expenses and number of personnel ...... | 141
1 4. | Share-based payments ................................................ | 142
15. | Employee benefit obligations ..................................... | 145
16. | Income taxes ................................................................. | 149
1 7. | Equity .............................................................................. | 152
18. | Selling, general and administrative expenses ......... | 153
19. | Other operating income and expenses .................... | 154
20. | Business combinations ................................................ | 154
21. | Financial risk management ......................................... | 157
22. | Investments in associated companies ...................... | 162
23. | Audit fees ....................................................................... | 164
24. | Contingencies and commitments .............................. | 164
25. | Related party information .......................................... | 165
26. | Subsidiaries .................................................................... | 167
27. | Events after the reporting period ............................. | 169
28. | New accounting standards ......................................... | 169

2
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Report of the Board of Directors
January–December 2024
Governance
Current legislation, the Company’s Articles of Association and the
rules and regulations of organizations regulating and supervising the
activities of listed companies are complied within Valmet Oyj and
Valmet Group corporate governance. Valmet Oyj complies without
deviation with the Finnish Corporate Governance Code for listed
companies. The Code is publicly available at www.cgfinland.fi.
Corporate Governance Statement and
Remuneration Report
Valmet has published a separate Corporate Governance Statement
and a Remuneration Report for 2024, which comply with the
recommendations of the Finnish Corporate Governance Code for
listed companies. The statements also cover other central areas of
corporate governance. The statements have been published on
Valmet’s website, separately from the Board of Directors’ Report, at
www.valmet.com/governance .
Annual General Meeting
The Annual General Meeting is the Company’s highest decision-
making body, and its tasks are defined according to the Articles of
Association and the Finnish Limited Liability Companies Act. The
Annual General Meeting decides on the adoption of the financial
statements, the distribution of profit, discharging the members of
the Board of Directors and the President and CEO from liability,
appointing the members, Chair and Vice Chair of the Board as well
as the auditor, their remunerations, and other matters requiring a
decision by the Annual General Meeting according to the Finnish
Limited Liability Companies Act that are presented to the Annual
General Meeting. The General Meeting convenes at least once a
year. The Board of Directors convenes the Annual General Meeting.
The Board of Directors
The Board of Directors shall see to the administration of the
Company and the appropriate organization of its operations, and
ensures that the monitoring of the Company’s accounting and asset
management is arranged appropriately. The Board of Directors
monitors the Group’s activities, finances and risk management, and
its task is to promote the interests of shareholders and the Group by
ensuring the appropriate organization of the entire Group’s
governance and operations.
According to Valmet’s Articles of Association, the Board of
Directors shall include at least five (5) members and at most eight
(8) members. The term of office of Board members ends at the end
of the first Annual General Meeting following the elections. The
Annual General Meeting selects the Chair, Vice Chair, and other
members of the Board.
President and CEO
The Board of Directors selects a President and CEO for the
Company and decides on the salary and remuneration of the
President and CEO as well as other terms related to the position.
The Board of Directors monitors the work of the CEO.
The President and CEO is responsible for the Company’s daily
administration according to the instructions and regulations of the
Board of Directors. The President and CEO is responsible for
ensuring the legality of the Company’s accounting and for the
reliable organization of the Company’s asset management.
Valmet's results in 2024
Figures in brackets, unless otherwise stated, refer to the comparison
period, i.e., the same period of the previous year.
3
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Key figures 1

EUR million | 2024 | 2023 | 2022
Orders received | 5,837 | 4,955 | 5,194
Order backlog 2 | 4,452 | 3,973 | 4,403
Net sales | 5,359 | 5,532 | 5,074
Comparable earnings before interest, taxes and amortization (Comparable EBITA) | 609 | 619 | 533
% of net sales | 11.4% | 11.2% | 10.5%
Earnings before interest, taxes and amortization (EBITA) | 557 | 605 | 550
% of net sales | 10.4% | 10.9% | 10.8%
Operating profit (EBIT) | 449 | 507 | 436
% of net sales | 8.4% | 9.2% | 8.6%
Profit before taxes | 383 | 473 | 431
Profit for the period | 281 | 359 | 338
Earnings per share, EUR | 1.52 | 1.94 | 1.92
Earnings per share, diluted, EUR | 1.52 | 1.94 | 1.92
Adjusted earnings per share, EUR | 1.93 | 2.28 | 2.37
Equity per share 2, EUR | 14.15 | 13.93 | 13.54
Dividend per share, EUR | 1.35 3 | 1.35 | 1.30
Cash flow provided by operating activities | 554 | 352 | 36
Cash flow after investing activities | 316 | -181 | 56
Comparable return on capital employed (Comparable ROCE) before taxes | 12.7% | 14.5% | 17.0%
Return on capital employed (ROCE) before taxes | 11.4% | 14.2% | 17.6%
Return on equity (ROE) | 10.8% | 14.1% | 17.6%
Net debt to EBITDA ratio | 1.55 | 1.46 | 0.78
Gearing 2 | 39% | 40% | 20%
Equity to assets ratio 2 | 44% | 43% | 49%

1 The calculation of key figures is presented in the section ‘Formulas for calculation of indicators’.
2 At the end of period.
3 Board of Directors’ proposal.
4
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Orders received increased 18 percent
to EUR 5,837 million in 2024

Orders received, EUR million | 2024 | 2023 | Change
Services | 1,915 | 1,760 | 9%
Automation | 1,446 | 1,340 | 8%
Flow Control | 763 | 789 | -3%
Automation Systems | 683 | 551 | 24%
Process Technologies | 2,477 | 1,856 | 33%
Pulp and Energy | 1,581 | 854 | 85%
Paper | 897 | 1,002 | -11%
Total | 5,837 | 4,955 | 18%

Orders received, comparable foreign exchange rates, EUR million 1 | 2024 | 2023 | Change
Services | 1,940 | 1,760 | 10%
Automation | 1,459 | 1,340 | 9%
Flow Control | 771 | 789 | -2%
Automation Systems | 689 | 551 | 25%
Process Technologies | 2,533 | 1,856 | 36%
Pulp and Energy | 1,632 | 854 | 91%
Paper | 901 | 1,002 | -10%
Total | 5,932 | 4,955 | 20%

1 Indicative only. January to December 2024 orders received in euro calculated by
applying January to December 2023 average exchange rates to the functional currency
orders received values reported by entities.

Orders received, EUR million | 2024 | 2023 | Change
North America | 1,364 | 1,271 | 7%
South America | 1,586 | 503 | >100%
EMEA | 1,735 | 1,846 | -6%
China | 418 | 638 | -35%
Asia-Pacific | 735 | 698 | 5%
Total | 5,837 | 4,955 | 18%

Orders received by segment, %
Orders received by area, %
Orders received increased 18 percent to EUR 5,837 million
(EUR 4,955 million) in 2024 . Orders received increased in all three
segments. The increase was mainly due to an order for a complete
pulp mill with full-scope automation and flow control solutions to
Brazil from Arauco, valued at over EUR 1 billion. Tissue Converting
(the acquired Körber's Business Area Tissue), which was integrated
into Valmet on November 2, 2023, increased orders received by
EUR 317 (EUR 61 million). Analyzer Products and Integration (the
acquired Process Gas Chromatography business from Siemens),
which was integrated into Valmet on April 2, 2024, increased orders
received by EUR 93 million. Stable business (Services and
Automation segments) accounted for 58 percent (63%) of Valmet’s
orders received.
Orders received increased in South America, North America and
Asia-Pacific and decreased in China and EMEA (Europe, Middle
East and Africa). Measured by orders received, the top three
countries were Brazil, the USA and Indonesia, which together
accounted for 52 percent of total orders received.
Changes in foreign exchange rates compared to the exchange rates
in 2023 decreased orders received by approximately EUR 95 million
in 2024.
In addition to the above-mentioned, in 2024 Valmet received among
others an order for a papermaking line, typically valued EUR 90–120
million, and a paper machine rebuild, typically valued EUR 20–40
million, to a customer in Asia-Pacific, an order for a complete
papermaking line to Asia-Pacific, typically valued EUR 90–120
million, an order for a recovery boiler and an ash crystallization
plant for a mill modernization project in Brazil, typically valued
above EUR 100 million, an order for modernization of a heating
plant in Czech Republic, an order for an Advantage ThruAir Drying
(TAD) tissue machine to the USA, an order to deliver the
automation system Valmet DNAe to Norway, an order for a pellet-
fired heating plant to Sweden, an order for an Advantage DCT 200
tissue line including an extensive automation package, flow control
valves and Industrial Internet solutions to Saudi Arabia, an order for
a high-speed off-machine coater with automation and services to
Asia-Pacific, an order for an OptiConcept M board making line with
automation and services to China, an order for an Advantage DCT
200 tissue production line to Poland, an order for two tissue
converting lines including packaging solutions to Sweden, an order
for a bleached chemi-thermomechanical pulp (BCTMP) line and a
related evaporator line to India, an order for tissue converting
equipment to Brazil, an order for a fiberline upgrade to Spain, an
order for a three-year Service Agreement and a one-year
Performance Agreement to Germany, an order for DNA
Automation technology to the world’s largest data center excess heat
recovery project in Finland, an order for Valmet DNA Turbine
Automation Systems with Valmet DNA User Interface to a
customer in Finland, and an order for Valmet IQ Quality Control
System to a customer in Thailand.
5
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Order backlog amounted to
EUR 4,452 million

| As at December 31, |
Order backlog, EUR million | 2024 | 2023 | Change
Total | 4,452 | 3,973 | 12%

Order backlog amounted to EUR 4,452 million at the end of year
2024 and was 12 percent higher than at the end of 2023.
Approximately 20 percent of the order backlog relates to the
Services segment, 15 percent to the Automation segment, and
65 percent to the Process Technologies segment (at the end of
December 2023, 25%, 15% and 60% respectively). Approximately
EUR 3.1 billion of the order backlog is currently expected to be
realized as net sales during 2025 (at the end of 2023, approximately
EUR 3.3 billion was expected to be realized during 2024).
Net sales remained at the previous year's
level and amounted to EUR 5,359 million in
2024

Net sales, EUR million | 2024 | 2023 | Change
Services | 1,900 | 1,784 | 7%
Automation | 1,437 | 1,328 | 8%
Flow Control | 791 | 777 | 2%
Automation Systems | 646 | 551 | 17%
Process Technologies | 2,023 | 2,420 | -16%
Pulp and Energy | 870 | 1,067 | -18%
Paper | 1,152 | 1,353 | -15%
Total | 5,359 | 5,532 | -3%

Net sales, comparable foreign exchange rates, EUR million 1 | 2024 | 2023 | Change
Services | 1,924 | 1,784 | 8%
Automation | 1,451 | 1,328 | 9%
Flow Control | 801 | 777 | 3%
Automation Systems | 650 | 551 | 18%
Process Technologies | 2,034 | 2,420 | -16%
Pulp and Energy | 875 | 1,067 | -18%
Paper | 1,160 | 1,353 | -14%
Total | 5,409 | 5,532 | -2%

1 Indicative only. January to December 2024 net sales in euro calculated by applying
January to December 2023 average exchange rates to the functional currency net sales
values reported by entities.

Net sales, EUR million | 2024 | 2023 | Change
North America | 1,459 | 1,275 | 14%
South America | 476 | 585 | -19%
EMEA | 2,033 | 2,219 | -8%
China | 723 | 609 | 19%
Asia-Pacific | 668 | 845 | -21%
Total | 5,359 | 5,532 | -3%

Net sales by segment, %
Net sales by area, %
Net sales remained at the previous year’s level and amounted to
EUR 5,359 million (EUR 5,532 million) in year 2024. Net sales
increased in the Automation and Services segments and decreased in
the Process Technologies segment. Tissue Converting (the acquired
Körber's Business Area Tissue), which was integrated into Valmet
on November 2, 2023, increased net sales by EUR 304 million (EUR
76 million). Analyzer Products and Integration (the acquired
Process Gas Chromatography business from Siemens), which was
integrated into Valmet on April 2, 2024, increased net sales by EUR
101 million. Stable business (Services and Automation segments)
accounted for 62 percent (56%) of Valmet’s net sales.
Net sales increased in China and North America, and decreased in
Asia-Pacific, South America and EMEA. Measured by net sales, the
top three countries were the USA, China and Finland, which
together accounted for 44 percent of net sales.
Changes in foreign exchange rates compared to the exchange rates
in 2023 decreased net sales by approximately EUR 50 million
in 2024.
Organic growth 1

| Orders received | Net sales
2023, EUR million | 4,955 | 5,532
Organic growth | 12% | -10%
Mergers and acquisitions | 8% | 8%
Changes in foreign exchange rates 2 | -2% | -1%
Total change | 18% | -3%
2024, EUR million | 5,837 | 5,359

1 Indicative only.
2 2024 orders received and net sales in euro calculated by applying 2023 average
exchange rates to the functional currency orders received and net sales values reported
by entities.
6
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
In 2024,Valmet's orders received increased organically by 12 percent
while net sales decreased organically by 10 percent.
Valmet completed the acquisition of Körber Group’s Business Area
Tissue (now Tissue Converting) on November 2, 2023, and the
acquisition of Process Gas Chromatography business from Siemens
(now Analyzer Products and Integration) on April 2, 2024. Valmet
has also closed the agreement to acquire majority shares in
FactoryPal, an undertaking of Körber, on August 1, 2024, and has
completed the acquisition of Demuth, a provider of wood handling
technology and services on August 2, 2024. In 2024, the acquisitions
increased Valmet's orders received and net sales by 8 percent.
Changes in foreign exchange rates compared to the exchange rates
in 2023 decreased Valmet's orders received by 2 percent, and net
sales by 1 percent in 2024. Foreign exchange rate impacts were
mainly due to the Brazilian Real, Chilean Peso and Chinese Yuan.
Comparable EBITA and Comparable EBITA
margin remained at previous year's level
and amounted to EUR 609 million and 11.4
percent in 2024

Comparable EBITA, EUR million | 2024 | 2023 | Change
Services | 331 | 312 | 6%
Automation | 255 | 248 | 3%
Process Technologies | 73 | 110 | -34%
Other | -49 | -50 | -2%
Total | 609 | 619 | -2%

Comparable EBITA, % of net sales | 2024 | 2023
Services | 17.4% | 17.5%
Automation | 17.7% | 18.6%
Process Technologies | 3.6% | 4.5%
Total | 11.4% | 11.2%

In 2024, Valmet's comparable earnings before interest, taxes and
amortization (Comparable EBITA) remained at previous year's level
and amounted to EUR 609 million, corresponding to 11.4 percent of
net sales (EUR 619 million and 11.2%). Items affecting
comparability amounted to EUR -53 million (EUR -14 million) and
were mainly related to Process Technologies segment.
Comparable EBITA of the Services segment increased to EUR 331
million in 2024, corresponding to 17.4 percent of the segment's net
sales (EUR 312 million and 17.5%). Comparable EBITA increased
mainly due to integration of Tissue Converting.
Comparable EBITA of the Automation segment remained at the
previous year’s level and amounted to EUR 255 million in 2024,
corresponding to 17.7 percent of the segment's net sales (EUR 248
million and 18.6%). The margin decreased mainly due to integration
of Analyzer Products and Integration.
Comparable EBITA of the Process Technologies segment decreased
to EUR 73 million in 2024, corresponding to 3.6 percent of the
segment's net sales (EUR 110 million and 4.5%). Comparable
EBITA was impacted by lower net sales.
Operating profit
Operating profit (EBIT) in 2024 was EUR 449 million, i.e. 8.4
percent of net sales (EUR 507 million and 9.2%). The decrease was
mainly due to items affecting comparability and higher depreciation
and amortization.
Net financial income and expenses
Net financial income and expenses amounted to EUR -65 million
(EUR -34 million) in 2024. Financial expenses increased due to
higher interest rates and increased average amount of debt in 2024.
Profit before taxes and Earnings per share
Profit before taxes was EUR 383 million (EUR 473 million) in 2024.
The profit attributable to owners of the parent was EUR 280 million
(EUR 357 million), corresponding to earnings per share (EPS) of
EUR 1.52 (EUR 1.94). EPS decreased mainly due to lower operating
profit and higher net financial expenses. Adjusted EPS was EUR 1.93
(EUR 2.28). Adjusted EPS decreased mainly due to lower operating
profit and higher net financial expenses.
Return on capital employed (ROCE) and
Return on equity (ROE)
The comparable return on capital employed (comparable ROCE)
before taxes was 12.7 percent (14.5%) and return on capital
employed (ROCE) before taxes was 11.4 percent (14.2%). Return on
equity (ROE) was 10.8 percent (14.1%) in 2024.
Segments and business lines
Services: Orders received totaled
EUR 1,915 million in 2024

Services segment | 2024 | 2023 | Change
Orders received (EUR million) | 1,915 | 1,760 | 9%
Net sales (EUR million) | 1,900 | 1,784 | 7%
Comparable EBITA (EUR million) | 331 | 312 | 6%
Comparable EBITA, % | 17.4% | 17.5% |
Personnel (end of period) | 6,714 | 6,493 | 3%

Orders received by the Services segment increased 9 percent to
EUR 1,915 million (EUR 1,760 million) in 2024. Services accounted
for 33 percent (36%) of Valmet's orders received. Orders received
increased in North America, South America, EMEA and Asia-
Pacific and remained at the previous year's level in China. Excluding
Tissue Converting, orders received increased in Fabrics, remained at
the previous year's level in Rolls, Performance Parts and Board,
Paper and Tissue Solutions and decreased in Pulp and Energy
Solutions. . Tissue Converting (the acquired Körber's Business Area
Tissue), which was integrated into Valmet on November 2, 2023,
7
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
increased Services' orders received by EUR 143 million (EUR 21
million). Changes in foreign exchange rates compared to the
exchange rates in 2023 decreased orders received by approximately
EUR 25 million.
Net sales for the Services segment increased 7 percent to EUR 1,900
million (EUR 1,784 million) in 2024, corresponding to 35 percent
(32%) of Valmet’s net sales. Tissue Converting increased Services'
net sales by EUR 143 million (EUR 26 million). Changes in foreign
exchange rates compared to the exchange rates in 2023 decreased
net sales by approximately EUR 24 million .
C omparable EBITA of the Services segment increased to EUR 331
million, corresponding to 17.4 percent of the segment's net sales
(EUR 312 million and 17.5%). Comparable EBITA increased mainly
due to integration of Tissue Converting.
The increase in Services' personnel is mainly due to the Demuth
acquisition.
Automation: Orders received totaled
EUR 1,446 million in 2024

Automation segment | 2024 | 2023 | Change
Orders received (EUR million) | 1,446 | 1,340 | 8%
Net sales (EUR million) | 1,437 | 1,328 | 8%
Comparable EBITA (EUR million) | 255 | 248 | 3%
Comparable EBITA, % | 17.7% | 18.6% |
Personnel (end of period) | 5,448 | 5,171 | 5%

Orders received by the Automation segment increased 8 percent to
EUR 1,446 million (EUR 1,340 million) in 2024. Automation
accounted for 25 percent (27%) of Valmet’s orders received.
Analyzer Products and Integration (the acquired Process Gas
Chromatography business from Siemens), which was integrated into
Valmet on April 2, 2024, increased Automation's orders received by
EUR 93 million. Changes in foreign exchange rates compared to the
exchange rates in 2023 decreased orders received by approximately
EUR 14 million.
Net sales for the Automation segment increased 8 percent to EUR
1,437 million (EUR 1,328 million) in 2024, corresponding to 27
percent (24%) of Valmet’s net sales. Analyzer Products and
Integration (the acquired Process Gas Chromatography business
from Siemens), which was integrated into Valmet on April 2, 2024,
increased Automation's net sales by EUR 101 million. Changes in
foreign exchange rates compared to the exchange rates in 2023
decreased net sales by approximately EUR 14 million.
C omparable EBITA of the Automation segment remained at the
previous year’s level and amounted to EUR 255 million,
corresponding to 17.7 percent of the segment's net sales (EUR 248
million and 18.6%).
The increase in Automation segment's personnel was mainly due to
the acquisition of Analyzer Products and Integration.

Flow Control business line | 2024 | 2023 | Change
Orders received (EUR million) | 763 | 789 | -3%
Net sales (EUR million) | 791 | 777 | 2%
Personnel (end of period) | 2,883 | 2,841 | 1%

Orders received by the Flow Control business line remained at the
previous year’s level and amounted to EUR 763 million (EUR 789
million) and accounted for 13 percent (16%) of Valmet's orders
received. Orders received increased in Asia-Pacific and North
America and decreased in South America, China and EMEA. Orders
received remained at the previous year's level in Valve controls &
Actuators and MRO (Maintenance and Repair Operations) &
Services and decreased in Projects.
Net sales for the Flow Control business line remained at the
previous year’s level and amounted to EUR 791 million (EUR 777
million), corresponding to 15 percent (14%) of Valmet’s net sales.

Automation Systems business line | 2024 | 2023 | Change
Orders received (EUR million) | 683 | 551 | 24%
Net sales (EUR million) | 646 | 551 | 17%
Personnel (end of period) | 2,565 | 2,330 | 10%

Orders received by the Automation Systems business line increased
24 percent to EUR 683 million (EUR 551 million) in 2024. Analyzer
Products and Integration (the acquired Process Gas
Chromatography business from Siemens), which was integrated into
Valmet on April 2, 2024, increased Automation Systems business
line's orders received by EUR 93 million. Automation Systems
accounted for 12 percent (11%) of Valmet’s orders received. Orders
received increased in South America, North America, Asia-Pacific
and China and remained at the previous year's level in EMEA.
Orders received increased in Energy and Process and remained at
the previous year's level in Pulp and Paper.
In April, 2024, Valmet launched its new DCS system, Valmet DNAe.
It represents a major milestone in process automation and increases
the competitiveness of Valmet’s DCS offering. Overall, Valmet
DNAe is a major step in Valmet’s strategy for growing automation
business further to a wide base of process industries globally.
Net sales for the Automation Systems business line increased 17
percent to EUR 646 million (EUR 551 million) in 2024,
corresponding to 12 percent (10%) of Valmet’s net sales. Analyzer
Products and Integration (the acquired Process Gas
Chromatography business from Siemens), which was integrated into
Valmet on April 2, 2024, increased Automation Systems business
line's net sales by EUR 101 million.
The increase in Automation Systems' personnel was mainly due to
the acquisition of Analyzer Products and Integration.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
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Process Technologies: Orders received totaled
EUR 2,477 million in 2024

Process Technologies segment | 2024 | 2023 | Change
Orders received (EUR million) | 2,477 | 1,856 | 33%
Net sales (EUR million) | 2,023 | 2,420 | -16%
Comparable EBITA (EUR million) | 73 | 110 | -34%
Comparable EBITA, % | 3.6% | 4.5% |
Personnel (end of period) | 6,356 | 6,707 | -5%

Orders received by the Process Technologies segment increased 33
percent to EUR 2,477 million (EUR 1,856 million) in 2024. The
increase was mainly due to an order for a complete pulp mill to
Brazil from Arauco, valued at over EUR 1 billion. Tissue
Converting (the acquired Körber's Business Area Tissue), which was
integrated into Valmet on November 2, 2023, increased Process
Technologies' orders received by EUR 174 million (EUR 40 million).
Process Technologies accounted for 42 percent (37%) of Valmet's
orders received. Changes in foreign exchange rates compared to the
exchange rates in 2023 decreased orders received by approximately
EUR 56 million.
Net sales for the Process Technologies segment decreased 16 percent
to EUR 2,023 million (EUR 2,420 million) in 2024, corresponding to
38 percent (44%) of Valmet’s net sales. Tissue Converting increased
Process Technologies' net sales by EUR 161 million (EUR 50
million). Changes in foreign exchange rates compared to the
exchange rates in 2023 decreased net sales by approximately EUR 12
million.
C omparable EBITA of the Process Technologies segment decreased
to EUR 73 million in 2024, corresponding to 3.6 percent of the
segment's net sales (EUR 110 million and 4.5%). Comparable
EBITA was impacted by lower net sales.
The decrease in Process Technologies' personnel is mainly due to
completed change negotiations in Finland in its Paper business line’s
Board and Paper Mills business unit.

Pulp and Energy business line | 2024 | 2023 | Change
Orders received (EUR million) | 1,581 | 854 | 85%
Net sales (EUR million) | 870 | 1,067 | -18%
Personnel (end of period) | 1,953 | 1,948 | 0%

Orders received by the Pulp and Energy business line increased 85
percent to EUR 1,581 million (EUR 854 million) in 2024. The
increase was mainly due to an order for a complete pulp mill to
Brazil from Arauco, valued at over EUR 1 billion. Pulp and Energy
accounted for 27 percent (17%) of Valmet's orders received. Orders
received increased in South America and decreased in North
America, Asia-Pacific, China and EMEA. Orders received increased
in Pulp and decreased in Energy.
Net sales for the Pulp and Energy business line decreased 18 percent
to EUR 870 million (EUR 1,067 million) in 2024, corresponding to
16 percent (19%) of Valmet’s net sales.
On September 25, 2024, Valmet announced that it will supply a
complete pulp mill with full-scope automation and flow control
solutions to Arauco in Brazil. The new pulp mill will be the world’s
largest single-phase pulp mill project with 3.5 million tonne per year
pulp production capacity. The new mill is estimated to start up in
the second half of 2027. The pulp mill will be built in Inocência, in
the state of Mato Grosso do Sul, Brazil. The value of the order for
Valmet is over EUR 1 billion, and it is included in Valmet’s orders
received for 2024.

Paper business line | 2024 | 2023 | Change
Orders received (EUR million) | 897 | 1,002 | -11%
Net sales (EUR million) | 1,152 | 1,353 | -15%
Personnel (end of period) | 4,402 | 4,759 | -7%

Orders received by the Paper business line decreased 11 percent to
EUR 897 million (EUR 1,002 million) in 2024. Paper accounted for
15 percent (20%) of Valmet's orders received. Orders received
increased in Asia-Pacific, remained at the previous year's level in
EMEA and decreased in China, South America and North America.
Orders received increased in Tissue and Stock preparation and
Recycled fiber and decreased in Small and Medium size Machines
and Board and Paper. Tissue Converting (the acquired Körber's
Business Area Tissue), which was integrated into Valmet on
November 2, 2023, increased Paper business line's orders received by
EUR 174 million (EUR 40 million).
Net sales for the Paper business line decreased 15 percent to EUR
1,152 million (EUR 1,353 million) in 2024 , corresponding to 22
percent (24%) of Valmet’s net sales. Tissue Converting increased
Paper business line's net sales by EUR 161 million (EUR 50 million).
The decrease in Paper business line's personnel is mainly due to
completed change negotiations in Finland in the Paper Mills
business unit.
Cash flow and financing
Cash flow provided by operating activities amounted to EUR 554
million (EUR 352 million) in 2024. Change in net working capital in
the statement of cash flows was EUR 43 million (EUR -180 million)
in 2024.
Net working capital decreased to EUR 134 million (EUR 191
million) at the end of the reporting period. In the recent years,
Valmet’s net working capital profile has changed due to increased
portion of stable business, which typically ties up more net working
capital than capital business. In addition, payment schedules of large
long-term projects have a significant impact on net working capital
development.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
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Cash flow after investing activities totaled EUR 316 million (EUR
-181 million) in 2024.
In compliance with the resolution of the Annual General Meeting,
on April 11, 2024, Valmet paid out the first installment of dividend
for year 2023, EUR 125 million, corresponding to EUR 0.68 per
share. The second installment, EUR 0.67 per share and in total EUR
123 million, was paid on October 10, 2024.
At the end of 2024, net debt to EBITDA ratio was 1.55 (1.46) and
gearing 39 percent (40%). Equity to assets ratio was 44 percent
(43%). Interest-bearing liabilities amounted to EUR 1,544 million
(EUR 1,484 million), and net interest-bearing liabilities totaled
EUR 1,032 million (EUR 1,027 million) at the end of the reporting
period.
The average interest rate of Valmet's total debt was 4.0 percent and
average maturity of non-current debt including current installments
was 3.4 years at the end of 2024. Lease liabilities have been excluded
from calculation of these two key performance indicators.
On March 6, 2024, Valmet issued a green bond (senior unsecured
green notes) of EUR 200 million. The maturity of the bond is five
years and it matures on March 13, 2029. The bond carries fixed
annual interest of 4.00 percent. The issue price of the bond is 99.871
percent. The net proceeds from the bond offering will be used in
accordance with the Green Finance Framework published by Valmet
on March 1, 2024. The Green Finance Framework is designated to
support financing and refinancing eligible assets and expenditures
that promote two environmental objectives: enabling transition to a
circular economy and mitigating climate change.
On March 14, 2024, Valmet announced that the Finnish Financial
Supervisory Authority has approved the listing prospectus of the
bond, and that Valmet has submitted an application for the bond to
be admitted to trading on the list of sustainable bonds of Nasdaq
Helsinki Ltd. Trading on the bond commenced on March 19, 2024.
In 2024, Valmet issued its second green debt transaction under the
Green Finance Framework, a green term loan of EUR 50 million
from Swedish Export Credit Corporation (SEK).
Valmet’s liquidity was strong at the end of the reporting period, with
cash and cash equivalents amounting to EUR 482 million (EUR 432
million) and other interest-bearing assets totaling EUR 30 million
(EUR 25 million). Valmet’s liquidity was secured with a committed
revolving credit facility of EUR 300 million, which was undrawn at
the end of the reporting period. Liquidity was additionally secured
by undrawn commercial paper program worth of EUR 300 million.
Capital expenditure
Gross capital expenditure (excluding business combinations and
right-of-use assets) totaled EUR 107 million (EUR 125 million) in
2024, of which maintenance investments amounted to EUR 38
million (EUR 57 million).
Rautpohja fire insurance compensation
A fire broke out at Valmet’s Rautpohja factory site in Jyväskylä,
Finland, on May 7, 2022. The fire, which started at a workshop
during a roll test, caused damages to parts of roll and headbox
manufacturing and preassembly. Operations resumed with some
special arrangements, like transferring some of the production to
temporary locations. Valmet maintains property damage and
business interruption insurance and expected to recover fire-related
losses through insurance.
The final settlement with the insurance provider was reached in
April–June 2024 and the final payment was received in June 2024.
Valmet has recorded an insurance compensation of EUR 19 million
in January–June 2024 related to the compensation of the costs
incurred. The outstanding receivable towards the insurance
company since 30 June 2024 has been nil (EUR 32 million as at 31
December 2023). In total, Valmet has received EUR 74 million as
cash payments in 2022, 2023 and 2024.
Acquisitions and disposals
Acquisitions
Process Gas Chromatography business of Siemens AG
On July 17, 2023, Valmet announced that it has entered into an
agreement to acquire the Process Gas Chromatography business of
Siemens AG. On April 2, 2024, Valmet announced that the
acquisition has been completed. The enterprise value of the
acquisition is EUR 102.5 million on a cash and debt-free basis
subject to customary adjustments.
The acquisition is in line with Valmet’s strategy and will further
strengthen Valmet’s automation segment and process automation
offering with process industry gas chromatograph and process
analyzer systems offering. It also strengthens Valmet’s Automation
Systems business footprint in North America, Asia-Pacific, and
Europe. The acquired business is integrated into Valmet’s
Automation Systems business line as a business unit called Analyzer
Products and Integration.
In 2022, the net sales of the acquired business amounted to
approximately EUR 120 million and pro-forma adjusted EBITDA
margin was approximately 10 percent. The business employs around
300 employees, and its main locations are in the USA, Germany, and
Singapore. It has been consolidated into Valmet’s financial reporting
since the second quarter of 2024.
FactoryPal
On May 30, 2024, Valmet announced that it has agreed with Körber
that Valmet will become the majority shareholder of FactoryPal, an
undertaking of Körber. On August 1, 2024, the company announced
it has closed the agreement to acquire majority shares in FactoryPal.
FactoryPal is a software developed for tissue converting operations
that improves shopfloor manufacturing performance and
productivity. The software empowers tissue mill teams to achieve
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
seamless operations by generating and utilizing high quality data
combined with state-of-the-art user experience and advanced
artificial intelligence (AI). FactoryPal will further strengthen
Valmet’s offering of advanced Industrial Internet solutions and
digital services to support customers in the tissue industry.
FactoryPal will continue operating as its own legal entity under the
existing FactoryPal brand. There are 55 employees working for
FactoryPal in Germany, Portugal, Italy, the USA and Brazil.
Demuth
On December 22, 2023, Valmet announced that it has entered into
an agreement to acquire Demuth, a Brazilian company specializing
in wood handling solutions for the pulp industry. On August 2, 2024
the company announced that it has completed the acquisition of
Demuth. This acquisition strengthens Valmet’s wood handling
technology offering and services presence in South America.
Demuth operates two manufacturing facilities in southern Brazil in
the state of Rio Grande do Sul. The net sales of Demuth are around
EUR 20–30 million annually, and the company employs around
400 people.
Disposals
Valmet made no disposals during 2024.
Research and development
Valmet’s research and development (R&D) expenses in 2024
amounted to EUR 123 million, i.e. 2.3 percent of net sales (EUR 114
million and 2.1%). Research and development work is carried out
predominantly in Finland and Sweden, within the business lines’
R&D organizations and pilot facilities. In addition, research and
development takes place within a network of customers, suppliers,
research institutes and universities. In the end of 2024, R&D
employed 564 (551) people. Valmet’s R&D headcount has increased
due to the R&D and innovation program Beyond Circularity, where
Valmet and its ecosystem come together to innovate, renew and
enable their customer industries to shift to carbon neutrality and to
facilitate green transition.
Valmet’s R&D work is based on customers’ needs, such as
improving production and resource efficiency, maximizing the value
of raw materials, providing new revenue streams, and developing
new innovations and technologies.
Valmet develops competitive, leading production and automation
technologies and services. To enhance raw material, water and
energy efficiency in its customers’ production processes, Valmet
combines digitalization, process technology, flow control,
automation systems and services. Valmet also develops solutions for
replacing fossil materials with renewable ones and for producing
new high-value end products.
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Personnel

| As at December 31, |
Personnel by business line | 2024 | 2023 | Change
Services | 6,714 | 6,493 | 3%
Automation | 5,448 | 5,171 | 5%
Flow Control | 2,883 | 2,841 | 1%
Automation Systems | 2,565 | 2,330 | 10%
Process Technologies | 6,356 | 6,707 | -5%
Pulp and Energy | 1,953 | 1,948 | 0%
Paper | 4,402 | 4,759 | -7%
Other | 792 | 789 | 0%
Total | 19,310 | 19,160 | 1%

| As at December 31, |
Personnel by area | 2024 | 2023 | Change
North America | 2,497 | 2,273 | 10%
South America | 1,519 | 1,164 | 30%
EMEA | 11,188 | 11,644 | -4%
China | 2,388 | 2,432 | -2%
Asia-Pacific | 1,718 | 1,647 | 4%
Total | 19,310 | 19,160 | 1%

Personnel by segment, %
Personnel by area, %
During 2024, Valmet employed an average of 19,297 (18,130)
people. The number of personnel at the end of the year was 19,310
(19,160). The increase in personnel is mainly due to the acquisitions
of Analyzer Products and Integration and Demuth. Personnel
expenses totaled EUR 1,393 million (EUR 1,292 million) in 2024, of
which wages, salaries and remuneration amounted to EUR 1,101
million (EUR 1,019 million).
Changes in Valmet’s Executive Team
On December 16, 2024, Valmet announced that Anu Salonsaari-
Posti, SVP Marketing, Communications, Sustainability and
Corporate Relations and a member of Valmet’s Executive Team
since 2013, leaves Valmet and continues her career outside the
company. Anu Salonsaari-Posti continued in her role until the end
of December 2024.
On November 21, 2024, Valmet announced that Jukka Tiitinen,
Area President, North America, has decided to retire. Jukka Tiitinen
continued in his role until the end of December 2024.
On September 24, 2024, Valmet announced that Olli Hänninen
(M.Sc. Industrial Management) has been appointed Senior Vice
President, Strategy, at Valmet as of October 1, 2024. In this position
he reports to the President and CEO Thomas Hinnerskov and is a
member of Valmet’s Executive Team. Olli Hänninen worked in
several different management positions in the services business of
KONE between 2014–2024, where his last position was Senior Vice
President, Service Business. Prior to his career at KONE, he worked
as an Associate Partner in McKinsey & Company in 2004–2014.
On June 7, 2024, Valmet announced that Anu Pires (M.Sc. Econ)
has been appointed SVP, Human Resources at Valmet as of
September 1, 2024. She became a member of Valmet’s Executive
Team and will report to President and CEO Thomas Hinnerskov.
Anu Pires joined Valmet from Paulig Group, where she worked as
SVP, Human Resources since 2018. Prior to her role at Paulig, Anu
Pires worked as VP of HR at Lumene from 2017 to 2018, in different
HR management positions at Outotec from 2016 to 2017, and as
Head of HR, APAC Mobile Device Sales, Nokia integration at
Microsoft from 2014 to 2015. Between 1998 and 2014, she held
HR management roles at Nokia, working in Brazil, China, and India.
Anu Pires began her career in human resources as HR trainee and
specialist at Valmet from 1996 to 1998. Anu Pires succeeds Julia
Macharey (SVP, Human Resources and Operational Development),
who left Valmet at the end of January 2024, as announced in
August 2023.
On February 19, 2024, Valmet announced that Valmet’s Board of
Directors has appointed Thomas Hinnerskov as the President and
CEO of Valmet. Thomas Hinnerskov started in the position on
August 12, 2024. He succeeds Pasi Laine, whose resignation was
announced on August 18, 2023.
Thomas Hinnerskov is a Danish citizen and was born in 1971. He
joined Valmet from Mediq B.V. where he was working as the CEO
since 2022. Prior to this, Thomas Hinnerskov was Executive Vice
President at KONE responsible for South Europe, Middle East and
Africa between 2021–2022 and Executive Vice President for Central
Europe between 2016–2021. Earlier in his career Thomas
Hinnerskov has had several leadership positions in ISS A/S between
2003–2016, and before that he worked in versatile management
positions in a private equity fund, in consulting and in investment
banking sector. He holds a Master’s degree in Economics (Finance
and Accounting) from Copenhagen Business School.
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On January 12, 2024, Valmet announced that Janne Pynnönen
(M.Sc. Eng.) has been appointed Senior Vice President, Operational
Development at Valmet as of February 1, 2024. Janne Pynnönen
became a member of Valmet’s Executive Team and reports to
President and CEO Thomas Hinnerskov. Until his nomination,
Janne Pynnönen was holding the position of Vice President, R&D at
Valmet. Before joining Valmet in 2020, he worked in versatile
business management and development roles and in R&D in Stora
Enso since 2003. Janne Pynnönen succeeds Julia Macharey (SVP,
Human Resources and Operational Development), who left Valmet
at the end of January 2024, as announced in August 2023.
Structural changes
Valmet announced on September 5, 2024, the start of change
negotiations in its Paper business line’s Board and Paper Mills
business unit including a plan to consider measures aimed at
improving the profitability and competitiveness of the business
operations. The scope of the negotiations covered all employees in
Board and Paper Mills business unit in Finland, totaling
approximately 1,300 employees. Other organizations or employees
in the Paper Business Line were not included in the scope of the
change negotiations.
On October 21, 2024, Valmet announced the completion of change
negotiations. As a result of the change negotiations the employment
of 112 people were ended. In addition, there were fi xed-term
position terminations, retirements, and internal transfers to other
positions within Valmet. At the beginning of the negotiations, the
need for employee reductions was estimated to be 200 positions.
Additionally, the Board and Paper Mills business unit will
implement temporary layoffs lasting up to 90 days during the first
half of 2025. Valmet supports the re-deployment of the laid-off
persons by offering i.e. personal career coaching.
On February 15, 2024, Valmet announced to start change
negotiations affecting certain parts of Services and Paper business
lines, EMEA area organization and corporate functions. The
negotiations included a plan to consider measures aimed at
improving the profitability and competitiveness of the business
operations, as well as adapting to the changing market situation. On
April 2, 2024, Valmet announced that the change negotiations had
been completed, and as a result 60 roles in Finland and 49 roles in
Sweden were reduced. Additionally, there were temporary lay-offs
with maximum length of 90 days in the Paper business line in
Finland. In a another change negotiation in June 2024, maximum
90-day temporary layoffs in Automation Systems were decided.
Investments in production and services
On September 3, 2024, Valmet announced that it has opened a new
service center in Beihai to serve and be close to its customers in the
fast-growing pulp and paper industry in the Guangxi Zhuang
Autonomous Region, West China. The Beihai Service Center serves
pulp, board, and paper customers close by, focusing on fiber
workshop services, roll maintenance, and field services, including
shutdown planning management.
On March 25, 2024, Valmet announced the decision to invest in
filter fabric manufacturing in Belo Horizonte, Brazil, in order to
better respond to the growing demand of high-performing filter
fabrics in both the mining and pulp and paper industries in South
America. The value of the investment will not be disclosed. The
investment includes the relocation of the current office and
manufacturing facility in Belo Horizonte, new machinery, and
improvements in the operations’ energy efficiency and emission
reduction. The new facility will be in operation during the first half
of 2025.
Business model and value creation
Valmet is a leading global developer and supplier of process
technologies, automation and services for the pulp, paper and
energy industries. With our automation systems and flow control
solutions we serve an even wider base of process industries.
Our strong technology offering includes pulp mills, tissue, board
and paper production lines, air emission control solutions, and
power plants for bioenergy production. Our services, automation
systems and flow control solutions improve production
performance and increase the environmental efficiency and cost-
effectiveness of Valmet’s customers’ production processes, while
ensuring safe and reliable operations. Our product and service
portfolio consists of productivity-enhancing services, plant upgrades
and rebuilds, cost-effective new equipment and solutions for
optimizing energy and raw material use, and technologies increasing
the value of our customers’ end products. Valmet’s technologies
maximize the value of renewable raw materials, while minimizing
their environmental impact.
Valmet’s business model relies on a range of key intangible
resources that enable long-term value creation for its stakeholders.
These include, for example, intellectual property, brand reputation,
technological expertise, and customer relationships and references.
Valmet holds a robust portfolio of intellectual assets, including
approximately 1,500 patented inventions. Valmet employs more
than 19,000 employees globally, whose expertise and experience play
a key role in value creation.
Strategic goals and their implementation
Valmet’s strategy is: Valmet develops and supplies competitive and
reliable process technologies, services and automation to the pulp,
paper and energy industries. Our automation business covers a wide
base of global process industries. We are committed to moving our
customers’ performance forward with our unique offering and way
to serve.
During the second quarter of 2024, Valmet's mission statement was
refined to reflect the changes in our business portfolio and customer
base. Valmet's refined mission is: We create sustainable results by
converting renewable resources and making industrial processes
reliable and efficient. Valmet’s vision is to become the global
champion in serving its customers and in moving the industries
forward.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Valmet seeks to achieve its strategic targets by continuous
improvement and renewal. Valmet has the following Must-Win
initiatives: ‘Customer excellence’, ‘Leader in technology and
innovation’, ‘Excellence in processes’ and ‘Winning team’, as well as
selected Business Accelerators.
Valmet has an annual strategy process, where Valmet’s strategy and
financial targets are reviewed.
Valmet's financial targets are the following:

Financial targets
• Net sales for Services and Automation segments to grow over two times the market growth
• Net sales for Process Technologies segment to exceed market growth
• Comparable EBITA: 12–14%
• Comparable return on capital employed (ROCE) before taxes: at least 15%
• Dividend payout at least 50% of net profit

Actions to reach Comparable EBITA target of
12–14%
Valmet continues to focus on improving profitability through
implementing its four Must-Win initiatives: ‘Customer excellence’,
‘Leader in technology and innovation’, ‘Excellence in processes’ and
‘Winning team’. Valmet targets to increase the comparable EBITA
margin in all three segments (Services, Automation and Process
Technologies).
Customer excellence
Valmet aims to strengthen its customer base by implementing
effective sales management practices and cultivating close
relationships with customers. Valmet is targeting to increase its
market share in Services and Automation segments by growing over
two times the market growth. In Process Technologies segment,
Valmet aims to maintain and improve its market share.
Leader in technology and innovation
Valmet is known for its world-class technology and is always
looking to bring advanced and innovative solutions to the market.
Furthermore, Valmet is placing a strong emphasis on product cost
competitiveness.
Excellence in processes
Valmet is continuously developing and improving its processes.
Valmet aims to ensure excellent project management and project
execution. Supply chain management and efficient procurement are
key for Valmet. Valmet is also streamlining its processes and
renewing the ERP system.
Winning team
Valmet has a strong home base in the Nordic region but has also
been increasing procurement, production, and engineering
resources in cost-competitive countries. The Company is investing
heavily in its people, particularly through the global training
portfolio, which supports the execution of the Must-Wins.
Towards the end of the year 2024, Valmet initiated work to renew its
strategy with the aim of defining Valmet's future growth areas,
accelerating growth, and simplifying ways of working.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Shares and shareholders
Share capital and share data 1

| 2024 | 2023 | 2022
Share capital, December 31, EUR million | 140 | 140 | 140
Number of shares, December 31: |  |  |
Number of outstanding shares | 184,165,347 | 184,161,105 | 184,184,830
Treasury shares held by the Parent Company | 364,258 | 368,500 | 344,775
Total number of shares | 184,529,605 | 184,529,605 | 184,529,605
Average number of outstanding shares | 184,159,071 | 184,151,827 | 175,617,981
Average number of diluted outstanding shares | 184,159,071 | 184,151,827 | 175,617,981
Trading volume on Nasdaq Helsinki Ltd.2 | 108,778,549 | 103,147,588 | 125,393,868
% of total shares for public trading | 59 | 56 | 68
Earnings per share, EUR | 1.52 | 1.94 | 1.92
Earnings per share, diluted, EUR | 1.52 | 1.94 | 1.92
Adjusted earnings per share, EUR | 1.93 | 2.28 | 2.37
Dividend per share, EUR | 1.35 3 | 1.35 | 1.30
Dividend, EUR million | 249 3 | 249 | 239
Dividend payout ratio | 89%3 | 70% | 68%
Effective dividend yield | 5.8%3 | 5.2% | 5.2%
Price to earnings ratio (P/E) | 15.4 | 13.5 | 13.1
Equity per share, EUR | 14.15 | 13.93 | 13.54
Highest share price, EUR | 30.11 | 32.99 | 38.59
Lowest share price, EUR | 21.37 | 19.64 | 19.95
Volume-weighted average share price, EUR | 25.04 | 26.35 | 26.90
Share price, December 31, EUR | 23.33 | 26.11 | 25.16
Market capitalization, December 31, EUR million | 4,305 | 4,818 | 4,643

1 The formulas for calculation of the figures are presented in the section ‘Formulas for Calculation of Indicators´.
2.In addition to Nasdaq Helsinki Ltd, Valmet’s shares are also traded on other marketplaces, such as CBOE DXE, BATS, Frankfurt, Chi-X and Turquoise. A total of approximately 50 million
Valmet shares were traded on these five alternative marketplaces in 2024. (Source: www.valmet.com/investors/valmet-share/trading-volumes/).
3 Board of Directors’ proposal.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Largest shareholders on December 31, 2024

|  | Shares | % of share capital
1 | Oras Invest Ltd | 19,200,000 | 10.40%
2 | Solidium Oy | 18,640,665 | 10.10%
3 | Varma Mutual Pension Insurance Company | 8,786,744 | 4.76%
4 | Ilmarinen Mutual Pension Insurance Company | 7,235,818 | 3.92%
5 | Elo Mutual Pension Insurance Company | 2,772,000 | 1.50%
6 | Finnish State Pension Fund | 2,300,000 | 1.25%
7 | Evli Finnish Small Cap Fund | 914,965 | 0.50%
8 | Sigrid Jusélius Foundation | 716,954 | 0.39%
9 | Samfundet Folkhälsan i Svenska Finland | 666,423 | 0.36%
10 | Aktia Capital Mutual Fund | 664,080 | 0.36%
11 | OP-Finland | 657,667 | 0.36%
12 | Danske Invest Finnish Equity Fund | 645,836 | 0.35%
13 | Finnish Cultural Foundation | 623,741 | 0.34%
14 | Nordea Pro Finland Fund | 526,775 | 0.29%
15 | The Finnish Social Insurance Institution | 526,188 | 0.29%

Source: Euroclear Finland
Number of shareholders
The number of registered shareholders at the end of year 2024 was
105,217 (100,752).
Shareholdings of the Board of Directors
in Valmet Oyj on December 31, 2024

|  | Shares
Mäkinen, Mikael | Chair of the Board | 11,906
Eskola, Jaakko | Vice Chair of the Board | 4,870
Kemppainen, Pekka | Member of the Board | 6,535
Maurer, Monika | Member of the Board | 6,535
Lumme-Timonen, Annareetta | Member of the Board | 1,582
Paasikivi, Annika | Member of the Board | 1,449
Hämäläinen, Anu | Member of the Board | 4,196
Lindberg, Per | Member of the Board | 3,591
Total |  | 40,664
% of outstanding shares | 0.02%

Distribution of shareholding by sector, %
Distribution of shareholders by number of shares held, %
Shareholdings of the Executive Team
in Valmet Oyj on December 31, 2024

|  | Shares
Hinnerskov, Thomas | President and CEO | 0 *
Hokkanen, Katri | CFO | 9,295
Kokko, Tero | Area President, EMEA | 4,104
Pires, Anu | SVP, Human Resources and Interim SVP Marketing, Communications, Sustainability and Corporate Relations | 0
Niemi, Aki | Business Line President, Services | 44,783
Paukkunen, Petri | Area President, Asia Pacific | 15,986
Rasinmäki, Petri | Business Line President, Paper | 2,929
Riekkola, Sami | Business Line President, Pulp and Energy | 23,187
Hänninen, Olli | SVP, Strategy | 1,400
Sääskilahti, Simo | Business Line President, Flow Control | 6,855
Tacla, Celso | Area President, South America | 78,512
Pynnönen, Janne | SVP, Operational Development | 1,087
Torttila-Miettinen, Emilia | Business Line President, Automation Systems | 2,884
Zhu, Xiangdong | Area President, China | 38,079
Salonsaari-Posti, Anu | Senior Vice President, Marketing, Communications, Sustainability and Corporate Relations | 37,300
Tiitinen, Jukka | Area President, North America | 45,040
Total |  | 311,441
% of outstanding shares | 0.17%

* Thomas Hinnerskov has an allocation of 61,037 shares in restricted share pool. A
precondition for the payment of the share reward based on the restricted pool is that the
employment relationship of Thomas Hinnerskov with Valmet continues until the payment
date of the reward, which is in March 2027. Shares in long-term incentive plan PSP
(Performance Share Plan) 2024-2026 have also been allocated to Thomas Hinnerskov in
2024, with rewards from these plans will be paid to participants in spring 2027.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Flagging notifications
During the review period, Valmet received the following flagging
notifications referred to in the Securities Market Act:

|  |  | % of shares and voting rights |
Transaction date | Shareholder | Threshold | Direct | Through financial instruments | Total, %
January 5, 2024 | The Goldman Sachs Group, Inc. | Below 5% | 0.03% | 2.62% | 2.65%
January 26, 2024 | Oras Invest Oy | Above 10% | 10.22% | - | 10.22%
March 8, 2024 | Swedbank Robur Fonder AB | Above 5% | 5.09% | - | 5.09%
August 7, 2024 | The Goldman Sachs Group, Inc | Above 5% | 0.07% | 4.95% | 5.02%
August 9, 2024 | The Goldman Sachs Group, Inc | Below 5% | 0.07% | 4.87% | 4.95%
October 21, 2024 | Swedbank Robur Fonder AB | Below 5% | 4.98% | - | 4.98%
December 3, 2024 | Swedbank Robur Fonder AB | Above 5% | 5.03% | - | 5.03%

Trading of shares

Trading of Valmet shares on Nasdaq Helsinki | 2024 | 2023
Number of shares traded | 108,778,549 | 103,147,588
Total value, EUR million | 2,723 | 2,718
High, EUR | 30.11 | 32.99
Low, EUR | 21.37 | 19.64
Volume-weighted average price, EUR | 25.04 | 26.35
Closing price on the final day of trading, EUR | 23.33 | 26.11

The closing price of Valmet’s share on the final day of trading for
the reporting period, December 30, 2024, was EUR 23.33, i.e., 11
percent lower than the closing price on the last day of trading in
2023 (EUR 26.11 on December 29, 2023).
In addition to Nasdaq Helsinki Ltd, Valmet’s shares are also traded
on other marketplaces, such as CBOE DXE, BATS, Frankfurt, Chi-X
and Turquoise. A total of approximately 50 m illion Valmet shares
were traded on these five alternative marketplaces in 2024 (Source:
www.valmet.com/investors/valmet-share/trading-volumes/).
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Board authorizations regarding shares
Valmet Oyj’s Annual General Meeting on March 21, 2024,
authorized Valmet’s Board of Directors to decide on the repurchase
of a maximum number of 9,200,000 of the Company’s own shares in
one or several tranches. This corresponds to approximately 5.0
percent of all the shares in the Company. The Company's own
shares may be repurchased otherwise than in proportion to the
shareholdings of the shareholders (directed repurchase). The
Company's own shares may be repurchased using the unrestricted
equity of the Company at a price formed on a regulated market on
the official list of Nasdaq Helsinki Ltd on the date of the repurchase
or at a price otherwise formed on the market.
The Company's own shares may be repurchased for reasons of
developing the Company's capital structure, financing or carrying
out acquisitions, investments or other business transactions, or for
the shares to be used in an incentive scheme, however so that a
maximum of 500,000 shares may be repurchased to be used in an
incentive scheme, which corresponds to approximately 0.3 percent
of all the shares in the Company. The Board of Directors resolves on
all other terms related to the repurchasing of the Company's own
shares.
Valmet Oyj’s Annual General Meeting 2024 also authorized
Valmet’s Board of Directors to decide on the issuance of shares and
the issuance of special rights entitling to shares in one or several
tranches. The issuance of shares may be carried out by offering new
shares or by transferring treasury shares held by Valmet. Based on
this authorization, the Board of Directors may also decide on a
directed share issue in deviation from the shareholders’ pre-emptive
rights and on the granting of special rights subject to the conditions
mentioned in the Finnish Companies Act. Based on this
authorization, a maximum number of 18,500,000 shares may be
issued, corresponding to approximately 10.0 percent of all the shares
in Valmet. The new shares and treasury shares may be issued for
consideration or without consideration.
The Board of Directors may decide on all other terms of the issuance
of shares and special rights entitling to shares pursuant to Chapter
10, Section 1 of the Finnish Companies Act. The Board of Directors
may use this authorization, for example, for reasons of developing
the Company’s capital structure, in financing or carrying out
acquisitions, investments or other business transactions, or for the
shares to be used in incentive schemes, however so that the Board of
Directors may issue a maximum of 500,000 shares to be used in
incentive schemes, which corresponds to approximately 0.3 percent
of all the shares in the Company.
The authorizations shall remain in force until the close of the next
Annual General Meeting, and they cancel the corresponding
authorizations granted by the Annual General Meeting 2023.
Based on the authorization granted by the Annual General Meeting
2024, Valmet’s Board of Directors decided on June 18, 2024, on a
directed share issue related to the reward payment of Valmet’s
share-based long-term incentive plans for the performance period
2023. In the share issue on June 20, 2024, a total of 736 Valmet’s
treasury shares were conveyed without consideration to the
participants of the plans, in accordance with the terms and
conditions of the plans.
The Board of Directors of Valmet decided in its meeting on
December 18, 2024, to use the authorization granted by the Annual
General Meeting held on 2024, to repurchase the Company's own
shares. Based on the authorization, the Board has decided to initiate
a fixed-term share buy-back program for the purpose of acquiring
the Company's own shares to meet part of the obligations arising
from the LTI Plans and the Restricted Pool incentive. The share
acquisitions will begin at the earliest on February 13, 2025 and will
end at the latest on March 7, 2025. The maximum number of shares
to be acquired is 115,000 corresponding to a value of approximately
EUR 2.6 million based on the closing share price on December 17,
2024. The shares will be acquired at market price in public trading
on Nasdaq Helsinki Ltd.
Share-based incentive plans
Valmet’s share-based incentive plans are part of the total
compensation offered for Valmet’s key personnel. The aim of the
plans is to align the interests of the shareholders and the key
employees to increase the value of Valmet in the long run, to steer
the key employees towards achieving the Company’s selected
strategic targets, to commit the key employees to the Company, and
to offer them a competitive reward plan based on holding the
Company's shares. Any shares to be potentially awarded are, or have
been, acquired through public trading, and therefore the incentive
plans have no diluting effect on the share value.
Long-term incentive plans – Performance
Share Plan and Deferred Share Plan
In its meeting on December 17, 2020, the Board of Directors of
Valmet Oyj decided on share-based long-term incentive plans, a
Performance Share Plan and a Deferred Share Plan, for Valmet's key
employees. The Board of Directors decided on a continuation of its
share-based long-term incentive plans (LTI plans) each year.
The Performance Share Plan is directed to the Executive Team
members. The Performance Share Plans include a three-year
performance period parallel to a one-year performance period.
Valmet's Board of Directors decides on the predefined performance
measures and targets in the beginning of each performance period.
The Deferred Share Plan is directed to other key employees in
management positions and management talents. It has a one-year
performance period. The predefined performance measures and
targets are decided by Valmet’s Board of Directors and are aligned
with the targets of the Performance Share Plan. The Deferred Share
Plan is directed to approximately 200 participants, of which
approximately 150 are key employees in management positions, and
approximately 50 are management talents.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
The Board of Directors of Valmet Oyj decided in December 2024 on
establishment of a new long-term share incentive plan, a
Performance Share Plan, for Valmet's executives and selected key
employees. The new Performance Share Plan consists of annually
commencing performance share plans, with a three-year
performance period, within which its participants have the
opportunity to earn shares of the Company based on achievement of
the performance measures. The performance measures and their
target ranges are set separately for each commencing plan.
Regarding all Valmet LTI plans, as a rule, no reward is paid if the
key employee’s employment or service at Valmet ends before the
reward payment. The earning under the Performance Share Plan is
limited by a pay cap determined by the Board of Directors in order
to avoid unexpectedly high pay-outs resulting from share price
volatility. Additionally, the Board has the right to re-collect paid
rewards after the plan has ended if the LTI plan participant has
caused a misstatement of the information based on which the
reward was paid.
The Performance Share Plan includes a recommendation for the
members of Valmet's Executive Team to own and hold an amount of
Company shares equaling their gross annual base salary (100
percent ownership recommendation). Further, each member of
Valmet’s Executive Team is expected to retain in their ownership at
least half of the shares received under the share-based incentive
plans of the Company, until the value of their share ownership
corresponds to at least their gross annual base salary. Management
shareholding is presented on Valmet's website at www.valmet.com/
investors/shareholders/management-shareholding.
Restricted Shares Pool
As part of total remuneration, for example for retention purposes,
the Board of Directors decided on an additional incentive element in
December 2018, the restricted shares pool, from which shares can be
granted to selected key employees. Restricted share pools are
intended to be annually commencing, and the annual restricted
shares pool is subject to separate approval by the Board of Directors.
In 2024, approximately 101,000 shares were allocated from the
restricted shares pool. In 2025, 100,000 shares and in addition the
shares unallocated from the Performance Share Plan 2025-2027 can
be allocated to possible participants of the restricted shares pool. As
a rule, the restriction period for these shares is three years. Plan
nominations as well as detailed terms of allocation will be proposed
by the President and CEO to the Chairman of the Board of Directors
for approval. A precondition for the payment of the share reward
based on the restricted shares pool is that a threshold Valmet
Comparable EBITA is exceeded and that the employment
relationship of the individual participant with Valmet continues
until the payment date of the reward.

| Long-term incentive plans 2021–2023 | Long-term incentive plans 2022–2024
Plan name | Performance Share Plan and Deferred Share Plan | Performance Share Plan | Performance Share Plan and Deferred Share Plan | Performance Share Plan
Performance period | 2021 | 2021–2023 | 2022 | 2022–2024
Incentive based on | Comparable EBITA as a percentage of net sales, and orders received growth in the stable business | Predefined strategic target | Comparable EBITA as a percentage of net sales, and orders received growth in the stable business | ESG Index, targets linked to implementing Valmet’s Climate Program and Sustainability Agenda
Reward payment | In spring 2022 | In spring 2024 | In spring 2023 | In spring 2025
Participants |  |  |  |
Performance Share Plan | 13 | 10 | 14 | 11
Deferred Share Plan | 101 |  | 114 |
Total gross number of shares earned | Approximately 355,000 shares | Approximately 42,000 shares | Approximately 176,000 shares | Approximately 29,000 shares

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS

| Long-term incentive plans 2023–2025 | Long-term incentive plans 2024–2026 | Long-term incentive plan 2025–2027
Plan name | Performance Share Plan and Deferred Share Plan | Performance Share Plan | Deferred share plan | Performance Share Plan | Performance Share Plan
Performance period | 2023 | 2023–2025 | 2024 | 2024, 2024–2026 | 2025–2027
Incentive based on | Comparable EBITA as a percentage of net sales, and orders received growth of the stable business | Development of a valuation multiple of Valmet’s share in comparison to peer group | Comparable EBITA as a percentage of net sales, and orders received growth of the stable business | Comparable EBITA as a percentage of net sales, and orders received growth of the stable business Development of a valuation multiple of Valmet’s share in comparison to peer group | Comparable EBITA, organic orders received growth (%) of the stable business, and ESG Index
Reward payment | In spring 2024 | In spring 2026 | In spring 2025 | In spring 2027 | In spring 2028
Participants |  |  |  |  |
Performance Share Plan | 15 | 13 |  | 17 | ~220
Deferred Share Plan | 120 |  | 193 |  |
Total gross number of shares earned | Approximately 153,000 shares. | Approximately 48,000 shares. | As at December 31, 2024, a total of approximately 359,000 shares were allotted to participants. | As at December 31, 2024 , a total of approximately 262,000 shares were allotted to participants. | The reward to be paid will correspond to a maximum total of approximately 653,000 shares.

Valmet announced on December 20, 2023, that the Board of
Directors of Valmet has decided to use the authorization granted by
the Annual General Meeting 2023 to repurchase the Company's own
shares. The Board decided to initiate a fixed-term share buy-back
program for the purpose of acquiring the Company's own shares to
meet part of the obligations arising from its share-based long-term
incentive plans (LTI Plans) and the Restricted Pool incentive. The
share acquisitions began on February 12, 2024, and ended on
February 16, 2024. The number of shares acquired totaled 100,000.
Based on the authorization granted to the Board of Directors by the
Annual General Meeting 2023, Valmet’s Board of Directors decided
in December 2023 on a directed share issue related to the reward
payment of Valmet’s share-based long-term incentive plans for the
performance periods 2021–2023 and 2023. In the share issue on
March 15, 2024, a total of 113,678 Valmet’s treasury shares were
conveyed without consideration to the participants of the plans, in
accordance with the terms and conditions of the plans.
Based on the authorization granted by the Annual General Meeting
2024, Valmet’s Board of Directors decided on June 18, 2024, on a
directed share issue related to the reward payment of Valmet’s
share-based long-term incentive plans for the performance period
2023. In the share issue on June 20, 2024, a total of 736 Valmet’s
treasury shares were conveyed without consideration to the
participants of the plans, in accordance with the terms and
conditions of the plans.
The Board of Directors of Valmet decided in its meeting on
December 18, 2024, to use the authorization granted by the Annual
General Meeting held on 2024, to repurchase the Company's own
shares. Based on the authorization, the Board has decided to initiate
a fixed-term share buy-back program for the purpose of acquiring
the Company's own shares to meet part of the obligations arising
from the LTI Plans and the Restricted Pool incentive. The share
acquisitions will begin at the earliest on February 13, 2025 and will
end at the latest on March 7, 2025. The maximum number of shares
to be acquired is 115,000, corresponding to a value of approximately
EUR 2.6 million based on the closing share price on December 17,
2024. The shares will be acquired at market price in public trading
on Nasdaq Helsinki Ltd.
At the end of the reporting period, the Company held 364,258
treasury shares related to the share-based incentive programs.
More information about share-based incentive plans can be found in
Valmet’s Remuneration Report, which is available at
www.valmet.com/governance.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Resolutions of Valmet Oyj’s
Annual General Meeting
Valmet's Annual General Meeting 2024 was held in Helsinki on
March 21, 2024. The Annual General Meeting adopted the Financial
Statements for 2023 and discharged the members of the Board of
Directors and the President and CEO from liability for the financial
year 2023. The Annual General Meeting adopted the remuneration
report for governing bodies, for which the decision is advisory, and
the remuneration policy of the Company. The Annual General
Meeting authorized the Board of Directors to decide on the
repurchase of the Company’s own shares and on the issuance of
shares and special rights entitling to shares.
The Annual General Meeting decided to pay a dividend of EUR 1.35
per share for the financial year which ended on December 31, 2023.
The dividend was paid in two installments. The first installment of
EUR 0.68 per share was paid on April 11, 2024 to shareholders who
on the dividend record date March 26, 2024, were registered in the
Company’s shareholders’ register held by Euroclear Finland Oy. The
second installment of EUR 0.67 per share was paid on October 10,
2024 to shareholders who on the dividend record date October 1,
2024 were registered in the Company’s shareholders’ register held by
Euroclear Finland Oy.
The Annual General Meeting confirmed the number of Board
members as eight and reappointed Mikael Mäkinen as Chair of
Valmet Oyj's Board and Jaakko Eskola as Vice Chair. Anu
Hämäläinen, Pekka Kemppainen, Per Lindberg and Monika Maurer
were re-elected as Board members, and Annareetta Lumme-
Timonen and Annika Paasikivi were elected as new Board members.
The term of office of the members of the Board of Directors expires
at the close of the Annual General Meeting 2025.
PricewaterhouseCoopers Oy was re-elected as the Company's
auditor for a term expiring at the end of the Annual General
Meeting 2025. Pasi Karppinen, Authorised Public Accountant
(KHT) will act as the responsible auditor. PricewaterhouseCoopers
Oy will also carry out the assurance of the Company’s sustainability
reporting.
Valmet published a stock exchange release on March 21, 2024,
concerning the resolutions of the Annual General Meeting and the
organizing meeting of the Board of Directors. The stock exchange
release and meeting materials can be viewed on Valmet’s website at
www.valmet.com/investors/governance/annual-general-
meeting/2023/.
Lawsuits and claims
On October 15, 2024, Valmet announced that Metsä Fibre Oy
has filed a request for arbitration against Valmet Technologies Oy,
which is a subsidiary of Valmet. The arbitration concerns
Metsä Fibre’s bioproduct mill in Kemi, Finland, which came
into operation as planned on September 20, 2023.
Valmet Technologies Oy disputes the claims brought by Metsä Fibre
and will also actively pursue claims of its own against Metsä Fibre.
Metsä Fibre’s preliminary monetary claims put forward amount to
approximately EUR 47 million. In addition, Metsä Fibre has
informed that it will claim that Valmet Technologies Oy would be
declared liable for certain potential costs which Metsä Fibre might
incur later based on contractual relationships between Metsä Fibre
and other parties. Metsä Fibre estimates that the current value of
such potential claims is approximately EUR 65 million, but estimates
that this amount is likely to decrease.
Valmet’s management does not expect to the best of its current
understanding any material adverse impacts on its operations or
financial position due to this arbitration. This assessment takes into
account the grounds currently presented, provisions made,
insurance coverage in force, and the extent of Valmet’s total business
activities.
Several lawsuits, claims and disputes based on various grounds are
pending against Valmet in various countries, including product
liability lawsuits and claims as well as legal disputes related to
Valmet’s deliveries. Valmet is also a plaintiff in several lawsuits.
Although some of the claims are substantial, Valmet’s management
does not expect to the best of its present understanding that the
outcome of these lawsuits, claims and disputes will have a material
adverse effect on Valmet in view of the grounds currently presented
for them, provisions made, insurance coverage in force and the
extent of Valmet’s total business activities.
Risks and business uncertainties
Valmet’s operations are affected by various strategic, financial,
operational and hazard risks. Valmet takes measures to exploit
emerging opportunities and to limit the adverse effects of potential
threats. In the annual risk assessment, Valmet's risk management
identified the most significant threats and opportunities being global
and key market area economic cycles, customer industry cycles and
project operations related risks. The assessment of risks related to
sustainable development holds an important role in risk
management. If such threats materialized, they could have material
adverse effects on Valmet’s business, financial situation and
operating result, or on the value of shares and other securities.
The objective of Valmet’s risk management is to ensure the
implementation of an effective and successful strategy for achieving
both long- and short-term goals. The task of Valmet’s management
is to regulate risk appetite. In assessing risks, Valmet takes into
consideration the probability of the risks and their estimated impact
on net sales or financial results. Valmet’s management estimates that
the Company’s overall risk level is currently manageable in
proportion to the scope of its operations and the practical measures
available for managing these risks.
Financial uncertainty in the global economy, coupled with
fluctuations in exchange rates, higher interest rates and tightening
financial market regulations may have an adverse effect on the
availability and price of financing from banks and capital markets
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
and could reduce the investment appetite of Valmet’s customers.
Valmet estimates that the high proportion of business derived from
stable business (Services and Automation segments) and the
geographical diversification will reduce the possible negative effects
that market uncertainties may have.
If global economic growth weakens, it might have adverse effects on
new projects under negotiation or on projects in the order backlog.
Some projects may be postponed, suspended, or canceled. In the
case of long-term delivery projects, initial customer advance
payments are typically 10–30 percent of the value of the project, and
customers make progress payments as the project is implemented.
This significantly decreases the risks and financing requirements
related to Valmet’s projects. Valmet continually assesses its
customers’ creditworthiness and their ability to meet their
obligations. As a rule, Valmet does not finance customer projects. If
economic growth slows down significantly, the markets for Valmet’s
products may shrink, which may lead to, for example, tougher price
competition.
Of the financial risks that affect Valmet’s profit, currency exchange
rate and interest rate risks are among the most substantial. Exchange
rate changes can affect Valmet’s business, although the wide
geographical scope of the Company’s operations reduces the impact
of any individual currency. Economic insecurity typically increases
exchange rate fluctuations and can impact interest rates as well.
Valmet hedges its currency exposures linked to firm delivery and
purchase agreements. The interest rate risks are managed through
balancing the ratio between fixed and floating interest rates and
duration of interest-bearing debt and interest-bearing financial
assets. Additionally, Valmet may use derivative instruments to
mitigate the risks.
Changes in legislation and the way authorities interpret regulation,
for example regarding taxation, can also have an impact on Valmet’s
financials.
The return of geopolitics and geoeconomics, changes in political
narratives, and the increase in protectionist and more political
regulatory measures, such as tariffs, can cause uncertainty in
customers’ willingness to invest and affect Valmet’s operations.
Changes in regulatory measures and legislation, along with the
associated uncertainty, can have impacts, particularly on trade
between major trade areas, the supply chain, and the use of data.
Large fluctuations in energy prices can affect the global economy.
These fluctuations can also affect Valmet and its customers.
Issues with component availability and logistics may have adverse
effects on Valmet's business.
Changes in labor costs and the prices of raw materials and
components can affect Valmet’s profitability. Valmet’s goal is to
offset inflation through increased productivity and price increases. It
is possible, however, that tough competition in some product
categories will make it difficult to pass on cost increases to product
prices. On the other hand, some of Valmet’s customers are raw
material producers and their ability to operate and invest may be
enhanced by strengthening commodity prices and hampered by
declining commodity prices.
There may be changes in the competitive situation of Valmet’s
individual businesses, such as the emergence of new, cost-effective
competition in the markets. Valmet can safeguard its market
position by developing its products and services, and through good
customer service and local presence.
To ensure high quality in both production and services, it is
important to sustain a high level of competence and talent
availability. This includes, for example, maintaining efficient
recruitment programs, utilization of existing talent and sharing
knowledge globally.
Through acquisitions, Valmet may become exposed to risks
associated with new markets and business environments. The actual
acquisition process also includes risks. Other risks associated with
acquisitions include, but are not limited to, integration of the
acquired business, increased financial risk exposure, retention of key
personnel and achieving the targets set for the acquired business.
Valmet’s operations, products and services rely largely on data
networks, software and digital solutions. Any malfunctions and
cybersecurity breaches in such networks, software and solutions as
well as potential failures in information system development
projects may adversely affect Valmet’s business and financial
position and lead to reputational damage.
Potential collective disputes and labor and union strikes remain a
risk to Valmet’s operations as they might have impact on the supply
chain, business operations and customer deliveries by increasing the
likelihood of interruptions. Valmet’s operations are dispersed all
around the world, Valmet has a global customer base and our
suppliers operate in several countries. This mitigates the overall
impacts of risks to Valmet, should there be any disruptions in some
isolated country or case.
Epidemic outbreaks and potential pandemics remain a risk to
Valmet’s operations. Pandemics might have an impact on customers'
investment activity, the supply chain and business operations by
increasing the likelihood of interruptions. Valmet’s operations are
dispersed all around the world, Valmet has a global customer base
and our suppliers operate in several countries. This mitigates the
overall impacts of risks to Valmet, should there be any disruptions in
some isolated country or case.
Management of project business risks
important
An important part of Valmet’s business consists of projects. Pulp
business projects in particular can be large, thus project-specific risk
management is crucial. Key risks related to projects are project cost
estimation, scheduling, project risk management, quality and
performance risks, and materials management risks. Risk analysis
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
shall, as a minimum, take place for all significant project quotations.
The work concerning threat and opportunity assessment continues
during the execution phase of the project. Risk management is based
on careful planning and continuous, systematic monitoring and
evaluation. Project risks are managed by improving and
continuously developing project management processes and the
related systems.
Availability of financing crucial
Securing the continuity of Valmet’s operations requires sufficient
available funding under all circumstances. Valmet estimates that its
liquid cash assets and committed credit limits are sufficient to secure
its immediate liquidity and to ensure the flexibility of financing. The
average maturity of Valmet’s non-current debt (including current
installments, excluding lease liabilities) is 3.4 years. Loan facilities
include customary covenants, and Valmet is in clear compliance
with the covenants at the balance sheet date.
Net working capital and capital expenditure levels have a key impact
on the adequacy of Valmet’s financing. Setting aside investments
into the renewal of the ERP system, Valmet does not expect any
significant increase in annual capital expenditure and estimates that
it is well-positioned to keep capital expenditure approximately at the
level of total depreciation.
As at December 31, 2024 , Valmet had EUR 1,808 million (EUR
1,735 million) of goodwill on its statement of financial position.
Valmet assesses the carrying value of its goodwill for impairment
annually, or more frequently if facts and circumstances indicate that
carrying value may not be recoverable. Valmet has not identified any
indications of impairment during the reporting period. The
principles used for impairment testing are presented in the financial
statements.
Valmet has a strong balance sheet and liquidity. In order to diversify
and mitigate the financial credit risk, funds are held with several
financially-sound banks. Valmet is carefully evaluating counterparty
risk and selecting only counterparties with high creditworthiness.
Valmet's project business is typically cash positive, as the customers
pay us advance and progress payments. Around half of Valmet's
business consists of services and automation, where single orders are
small. Furthermore, Valmet has hundreds of customers around the
globe, which gives us natural hedge.
Conflicts and geopolitical tensions
The war in Ukraine causes significant risks and uncertainties to the
markets affecting the entire global economic environment and
financial markets. The conflict in the Middle East causes supply
chain issues and can increase transport costs and durations. If the
conflicts are further prolonged or geopolitical tensions further
increase, there could be additional adverse impacts on Valmet’s
operations, customer investment activity, project deliveries,
availability and prices of components, supply chain and availability
of financing for both Valmet and its customers. Valmet monitors the
situation and manages the Company's response to the impacts of the
conflicts.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Events after the reporting period
There have been no subsequent events after the reporting period
that required recognition or disclosure.
Guidance for 2025
Valmet estimates that net sales in 2025 will remain at the previous
year's level in comparison with 2024 (EUR 5,359 million) and
Comparable EBITA in 2025 will remain at the previous year's level
in comparison with 2024 (EUR 609 million).
General economic outlook according to IMF
The IMF forecast for 2025 is broadly unchanged from October 2024,
with stable but underwhelming real global growth of 3.3 percent
projected for both 2025 and 2026. This is primarily due to an
upward revision in the United States offsetting downward revisions
in other major economies. Global headline inflation is expected to
decline to 4.2 percent in 2025 and to 3.5 percent in 2026, converging
back to target earlier in advanced economies than in emerging
market and developing economies. Policy-generated disruptions to
the ongoing disinflation process could interrupt the pivot to easing
monetary policy, with implications for fiscal sustainability and
financial stability. (IMF World Economic Outlook, January 2025)
Short-term market outlook
The short-term market outlook is given for January–June 2025
compared with October–December 2024. It is Valmet’s estimate of
the customer activity and should not be interpreted as guidance for
Valmet’s orders received.
Process Technologies
Valmet estimates that the customer activity will remain stable. It is
typical that customers’ large investment decisions can have a major
impact on the market activity.
Services
Valmet estimates that the customer activity is gradually improving,
but the capacity utilization rates and profitability levels of customers
cause uncertainty to the short-term market outlook.
Automation
Valmet estimates that the customer activity will remain stable.
Board of Directors' proposal for
the distribution of profit
Valmet Oyj’s distributable funds on December 31, 2024, totaled
EUR 1,584,868,527.03 of which the net profit for the year 2024 was
EUR 332,895,633.84 (according to Finnish Generally Accepted
Accounting Standards).
The Board of Directors proposes to the Annual General Meeting
that a dividend of EUR 1.35 per share be paid based on the
statement of financial position to be adopted for the financial year
which ended on December 31, 2024, and the remaining part of profit
be retained and carried further in the Company’s unrestricted
equity.
The dividend shall be paid in two installments. The first installment
of EUR 0.68 per share shall be paid to shareholders who on the
dividend record date of March 28, 2025, are registered in the
Company’s shareholders’ register held by Euroclear Finland Ltd.
The dividend shall be paid on April 8, 2025. The second installment
of EUR 0.67 per share shall be paid in October 2025. The second
installment shall be paid to shareholders who on the dividend record
date are registered in the Company’s shareholders’ register held by
Euroclear Finland Ltd. The payment date of the second installment
shall be resolved by the Board of Directors in its meeting
preliminarily scheduled for September 25, 2025. The dividend
record date for the second installment would then be September 29,
2025, and the dividend payment date October 7, 2025.
All the shares in the Company are entitled to a dividend except for
treasury shares held by the Company on the dividend record date.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Sustainability S tatement
General information
Basis for preparation
BP-1: General basis for preparation of sustainability
statements
BP-2: Disclosure in relation to specific
circumstances
V almet Oyj (the “Company” or the “parent company”), a public
limited liability company, and its subsidiaries (together “Valmet,”
“Valmet Group” or the “Group”) form a global developer and
supplier of process tec hnologies, automation and services for the
pulp, paper and energy industries. With its automation and flow
control solutions, Valmet also serves a wide base of other global
process industries.
The European Union (EU) Corporate Sustainability Reporting
Directive (CSRD) 2022/2464 applies to Valmet from 2024 onwards.
EU law requires companies subject to the CSRD to report social,
environmental and governance information according to European
Sustainability Reporting Standards (ESRS). This Sustainability
Statement was prepared in accordance with the ESRS standards as
adopted by the EU and the Finnish Accounting Act chapter 7 and
with Article 8 in the Taxonomy Regulation. For previous years until
the end of 2023, Valmet has reported its sustaina bility performance
in accordance with the Non-Financial Reporting Directive (NFRD)
and in the GRI supplement, in accordance with the global GRI
standards from the Global Reporting Initiative (GRI).
Valmet’s Sustainability S tatement covers the Valmet Group unless
otherwise stated. The reporting scope of Valmet’s own operations is
the same as in Valmet’s consolidated financial statements. In
addition to Valmet’s own operations, the information in this
Sustainability Statement has been extended to include information
about the material sustainability impacts and sustainability related
financial risks and opportunities connected with Valmet through its
direct and indirect business relationships in the upstream and
downstream value chain, where applicable. The extent of the
reported value chain information has been explained in more detail
under IRO-1.
The material sustainability matters, and related impacts, risks and
opportunities included in this Sustainability Statement are based on
the outcome of a double materiality assessment. The double
materiality assessment process is described in more detail under
IRO-1. Valmet has not used the option to omit a specific piece of
information corresponding to intellectual property, know-how or
the results of innovation. S pecific circumstances related to value
chain estimation have been disclosed under E1-6 and E5-4. Sources
of estimation and outcome uncertainty have been disclosed under
E5-4 and G1-6.
Use of phase-in pr ovisions
Valmet has decided to use the following phase-in provisions
according to Appendix C of ESRS 1 in 2024 reporting.
• SBM-1 - Strategy, business model and value chain: paragraphs
40b and 40c
• SBM-3 - Material impacts, risks and opportunities and their
interaction with strategy and business model: paragraph 48e
• E1-9 - Anticipated financial effects from material physical and
transition risks and potential climate-related opportunities
• E5-6 - Anticipated financial effects from resource use and circular
economy-related impacts, risks and opportunities
• S1-7 - Characteristics of non-employee workers in Valmet's
own workforce
• S1-14 - Health and safety: reporting of health and safety
information concerning non-employees in Valmet's own
workforce omitted
G overnance
GOV-1: The role of the administrative, management
and supervisory bodies
GOV-2: Information provided to and sustainability
matters addressed by the undertaking’s
administrative, management and supervisory
bodies
Valmet’s administrative, management, and supervisory bodies
consist of Valmet’s Board of Directors and its committees, President
and Chief Executive Officer, and Executive Team. Valmet’s Board of
Directors is responsible for the administration and proper
organization of operations. The Board also decides on significant
matters related to strategy, investments, organization, and financing,
ensuring that Valmet operates in accordance with its established
values in all its operations. Valmet’s Board of Directors oversees
Valmet’s sustainability reporting, and they sign on the information
in this Sustainability Statement as part of the Report of the Board of
Directors. Valmet’s Board of Directors consists of five to eight
members, whom the Annual General Meeting elects for a term that
lasts until the end of the next Annual General Meeting. In addition
to board members, a personnel representative participates as an
invited expert in meetings of the Board of Directors. In 2024, all
board members were non-executive and 75 percent of the board
members were independent of the significant shareholders.
Information about members’ experience, including competence
related to industry, sustainability and international experience, is
presented in the following table.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Valmet Board Competence Matrix

| Industry experience | Financial/ Accounting | Corporate risk management | Corporate governance | Corporate strategy development | Corporate acquisitions | Corporate HR | CEO experience | International experience | Sustaina- bility
Mikael Mäkinen | • | • | • | • | • | • | • | • | • | •
Jaakko Eskola | • |  | • | • | • | • | • | • | • |
Anu Hämäläinen | • | • | • | • | • | • | • |  | • |
Pekka Kemppainen | • | • | • | • | • | • | • |  | • |
Per Lindberg | • |  | • | • | • | • | • | • | • | •
Annareetta Lumme-Timonen | • | • | • | • | • | • |  |  |  | •
Monika Maurer |  | • | • | • | • | • | • | • | • | •
Annika Paasikivi |  |  | • | • | • | • |  | • |  |

Valmet recognizes the importance of diversity, including gender,
nationality, age, background, and education, at the board level and
all levels of the Group and is committed to increasing diversity
across all its operations. Valmet’s principles of board diversity
include the promotion of experience and a varied educational
background, relevant qualifications, balanced gender diversity, and
an adequate commitment regarding time contribution, availability,
and engagement. Board members should have sufficient expertise
and knowledge of and competence in Valmet's field of business
and industry.
Board diversity

Gender | % |
Male | 50.0% | 4/8
Female | 50.0% | 4/8

Nationality | % |
Finnish | 75.0% | 6/8
German | 12.5% | 1/8
Swedish | 12.5% | 1/8

Age | % |
41–50 years | 12.5% | 1/8
51–60 years | 25.0% | 2/8
61–70 years | 62.5% | 5/8

Tenure | % |
Less than 1 year | 25.0% | 2/8
1–2 years | 25.0% | 2/8
3–5 years | 25.0% | 2/8
Over 5 years | 25.0% | 2/8

Board committees
The Board of Directors has two permanent committees: the Audit
Committee and the Remuneration and Human Resources
Committee. The Board of Directors elects the members of the
committees from among its members at its annual organizing
meeting and monitors the activities of the committees. Both
committees have charters approved by the Board of Directors and
report to the Board on their activities after each meeting.
The Audit Committee monitors Valmet’s financial reporting and
CSRD reporting and prepares issues for the Board of Directors
related to the monitoring of Valmet’s financial position, financial
reporting, auditing, and risk management.
Chief Executive Officer and Executive Team
The President and Chief Executive Officer manages, guides, and
supervises the operations of Valmet and its businesses. The
President and Chief Executive Officer reports to the Board of
Directors and prepares the matters on the agenda of the Board of
Directors and its committees and implements their decisions. The
President and Chief Executive Officer and other members appointed
by the Board of Directors constitute the Executive Team of Valmet.
The Executive Team assists the President and Chief Executive
Officer in the preparation of matters such as Valmet’s business plan,
strategies, policies and other operative matters of joint importance.
The President and Chief Executive Officer acts as chair of Valmet’s
Executive Team, which on 31.12.2024 consisted of 16 executive
members. All members of Valmet’s Executive Team have a
combination of industry and international experience, and they are
experienced in overseeing Valmet’s sustainability work.
Executive Team diversity

Gender | % |
Male | 75.0% | 12/16
Female | 25.0% | 4/16

Nationality | % |
Brazilian | 6.3% | 1/16
Chinese | 6.3% | 1/16
Danish | 6.3% | 1/16
Finnish | 75.0% | 12/16
Finnish/USA | 6.3% | 1/16

Age | % |
41–50 years | 37.5% | 6/16
51–60 years | 62.5% | 10/16

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
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Sustainability matters addressed by the administrative,
management and supervisory bodies
Valmet’s Board of Directors is responsible for overseeing the
organization’s sustainability due diligence and other sustainability
processes to identify and manage the impacts on the environment
and people. The President and Chief Executive Officer and the
Executive Team lead Valmet’s sustainability work and related
material sustainability impacts, risks and opportunities. Valmet’s
Senior Vice President of Marketing, Communications, Sustainability
and Corporate Relations, member of Valmet's Executive team, is
responsible for sustainability at Valmet.
Publicly available policies and commitments approved by the Board
of Directors:
• Valmet’s Code of Conduct
• Valmet’s Health, Safety and Environment (HSE) Policy
• Valmet’s Disclosure Policy
• Valmet's Remuneration Policy
Publicly available policies and commitments approved by the
President and Chief Executive Officer:
• V almet’s Human Rights Statement
• Valmet’s Information Security Policy
• Valmet’s Supplier Code of Conduct
• Valmet’s Quality Policy
• Valmet's Anti-Corruption Policy
Publicly available policies and commitments approved by a member
of Valmet’s Executive Team:
• Valmet’s Equal Opportunity and Diversity Policy
• Valmet’s Non-Discrimination and Anti-Harassment Policy
The Executive Team has approved Valmet’s Sustainability360º
Agenda, which defines the focus themes and targets of Valmet's
sustainability work. The Agenda addresses Valmet’s material
sustainability impacts, risks and opportunities. The President and
Chief Executive Officer oversees the progress of actions to achieve
the targets set in the Agenda. Valmet’s sustainability performance,
with the progress of Valmet’s Sustainability360 º Agenda
implementation is reviewed annually by the Executive Team,
quarterly by the President and Chief Executive Officer, and one to
two times a year by the Board of Directors.
The Board of Directors and the Executive Team have approved
Valmet’s Climate Program, which includes CO₂ emissions reduction
targets and tangible actions for the whole value chain, and addresses
Valmet’s climate-related impacts, risks and opportunities. The
progress of Valmet’s Climate Program is reviewed annually by the
Board of Directors and biannually by the Executive Team. Valmet’s
Climate Program Steering Team includes three members of the
Executive Team. The Steering Team is responsible for the Climate
Program, follows the progress of the targets, and status updates
quarterly.
Valmet’s President and Chief Executive Officer and the Executive
Team were engaged in Valmet's double materiality assessment
process and the evaluation of Valmet's material sustainability
impacts and sustainability related financial risks and opportunities.
The results of the double materiality assessment have been approved
by Valmet's Board of Directors. In 2024, Valmet’s Chief Financial
Officer reported on the progress of CSRD reporting development
and external assurance in every meeting of the Board of Directors
and the Audit Committee. In 2024, Valmet’s CSRD Steering
Committee included two members of the Executive Team: Chief
Financial Officer and Senior Vice President of Marketing,
Communications, Sustainability, and Corporate Relations.
Sustainability impacts, risks and opportunities as a part
of Valmet enterprise risk management process
Valmet's Risk Management supports the achievement of the
strategic and business goals, compliance with legal and regulatory
requirements and also ensures the continuity of Valmet's operations
in changing circumstances. The assessment of risks related to
sustainability matters plays an important role in risk management. If
such threats materialized, they could have adverse effects on
Valmet’s reputation, business, financial situation and operating
result, or on the value of shares and other securities. The Board of
Directors and the Executive Team consider sustainability impacts,
risks and opportunities when overseeing Valmet’s strategy and its
decisions on major transactions.
G1 Business conduct, GOV-1: The role of the
administrative, management and supervisory
bodies
The Valmet Board Audit Committee oversees the development of
Valmet’s Ethics & Compliance Program, which targets the
maintaining of an ethical corporate culture at Valmet, and handling
of identified misconduct cases. Internal Audit and Ethics &
Compliance report the progress to the Board Audit Committee.
Valmet has a Compliance Committee structure to supervise the
implementation of the Ethics & Compliance Program and oversee
misconduct investigations. The Chief Financial Officer and Senior
Vice President of Human Resources are members of the global
Corporate Compliance Committee. Valmet Area organizations have
their own Area Compliance Committees for the Ethics &
Compliance work at an Area level and to decide on and supervise
local misconduct investigations. The Area Compliance Committees
report their work to the Corporate Compliance Committee. Area
Presidents are a member of their own Area’s Compliance
Committee. All Compliance Committees meet at least quarterly.
The expertise of the administrative, management, and supervisory
bodies in corporate governance, including business conduct, is
presented under GOV-1 Board Competence Matrix.
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GOV-3: Integration of sustainability related
performance in incentive schemes
E1 Climate change, GOV-3: Integration of sustainability related
performance in incentive schemes
Valmet’s remuneration principles are defined in the Remuneration
Policy, which is approved by the Annual General Meeting for a four-
year period. Remuneration at all levels of the organization is built on
the principles of Driving high performance, Competitive
remuneration to retain talent with the best fit, and Fairness and
sustainability. Valmet’s variable pay schemes (i.e., short-term and
long-term incentive plans) support sustainable business by linking
selected sustainability topics such as the Climate Program, health
and safety and supply chain sustainability to remuneration.
All remuneration-related decisions require grandparent approval. In
other words, the remuneration of an employee must always be
approved by the manager’s manager. The Annual General Meeting
decides on the remuneration of the members of the Board of
Directors and the Board’s Committees for one term of office at a
time. The Board of Directors decides on the remuneration, benefits,
and other terms of employment of the President and Chief
Executive Officer based on the preparatory work by the
Remuneration and Human Resources Committee and in accordance
with the guidelines in the Remuneration Policy presented to the
General Meeting. The Board’s Remuneration and Human Resources
Committee decides on the compensation and benefits of the
Executive Team members other than President and Chief Executive
Officer, based on the President and Chief Executive Officer’s
proposal and general principles approved by the Board.
Valmet’s Board of Directors decides on the short-term and long-
term incentive plans. Given the nature of the Board’s duties and
responsibilities, the members of the Board do not participate in the
short- and long-term incentive plans. Board members receive a fixed
remuneration (annual fee) only, which can be paid in cash or shares,
or a combination of cash and shares. Based on the decision of the
Annual General Mee ting, 40 percent of the Board’s annual fees were
reinvested to buy Valmet shares from the market in 2024.
The short-term incentive for the President and Chief Executive
Officer is an annual performance bonus for which the Board of
Directors sets the performance measures. The incentive includes
Group-level key financial targets and strategic individual targets.
The individual targets set for the President and Chief Executive
Officer are related to sustainability progress and other strategic
targets. The maximum annual performance bonus opportunity for
the President and Chief Executive Officer i s 100 percent of the
annual base salary, and the weight of the individual targets is
20 percent.
Valmet’s other Executive Team members besides the President and
Chief Executive Officer are eligible for an annual short-term
incentive plan, the Global Bonus Plan. The maximum Global Bonus
Plan opportunity for the Executive Team members is 60 percent of
the annual base salary.
The Board of Directors approves the comparable EBITA minimum
and maximum values used for the Global Bonus Plan. The Valmet-
level targets are cascaded to Business Line, Areas and Business Unit
levels. Financial and operational targets are predefined and assigned
to an individual according to the organization to which they belong.
The sustainability-related measure in the Global Bonus Plan is Total
recordable incident frequency (TRIF). As stated in our Health,
Safety and Environment (HSE) Policy, we believe all incidents can
be prevented, and we pursue the goal of zero harm to people which
is measured in TRIF. The weight of the TRIF measure is 5 percent of
the maximum bonus opportunity.
The long-term incentive is a share-based incentive plan with
performance targets decided by the Board of Directors for each plan
period. The performance targets for the long-term incentive plan
can be, for example, related to growth, profitability, and
sustainability, as determined and decided by the Board of Directors
annually. The predetermined performance targets are measurable,
and the achievement of these targets determines the payout level of
the share-based incentive pla n. Valmet has two share-based long-
term incentive plans, one of which is directed at the Executive Team
members, including the President and Chief Executive Officer.
The Performance Share Plan has predefined performance measures
for a three-year performance period, and the Board of Directors has
decided always to in clude a sustainability measure in one of the
ongoing plan periods. The 2022–2024 P erformance Share Plan has a
sustai nability index as a three-year strategic performance measure,
and it has a weight of 25 percent of the long-term incentive
maximum opportunity for all Executive Team members with half of
the sustainability index linked to climate-related topics. The
strategic performance measure is linked to the implementation of
Valmet’s Sustainability360º Agenda and Climate Program. The
long-term incentive maximum opportunity for the Executive Team
members in the 2022-2024 Performance Share Plan was 130 percent
of the annual base salary and converted to shares at grant. For the
President and Chief Executive Officer, it was 150 percent.
GOV-4: Statement of due diligence
Valmet is committed to carrying out sustainability due diligence to
identify, address, prevent, and limit negative impacts on the
environment and people connected with its business. Valmet’s
sustainability due diligence framework is based on the UN (United
Nations) Guiding Principles on Business and Human Rights and
OECD Guidelines for multinational enterprises.
Valmet has embedded environmental, human rights, and
governance due diligence into its management systems and in key
processes. The table below presents the main aspects of Valmet’s
sustainability due diligence process, and a mapping of the
information provided in this Sustainability Statement about the due
diligence process.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS

Sustainability due diligence process | Upstream – supply chain | Own operations | Downstream – use phase of technologies
Embedding due diligence in governance, strategy and business model | • Valmet’s Code of Conduct • Valmet Human Rights Statement • Valmet Health, Safety, and Environment Policy • Valmet Supplier Code of Conduct • Know Your Business Partner Policy | • Valmet’s Code of Conduct • Valmet Human Rights Statement • Valmet Health, Safety, and Environment Policy • Valmet Human Resources Policy • Valmet Equal Opportunities and Diversity Policy • Valmet Anti-corruption Policy • Valmet’s Non-Discrimination and Anti- Harassment Policy | • Valmet’s Code of Conduct • Valmet Human Rights Statement • Valmet Health, Safety, and Environment Policy • Valmet Guidelines for sustainable and responsible research, product development and design • Know Your Business Partner Policy
Paragraphs in the Sustainability Statement: E1-2, E2-1, E3-1, E4-2, E5-1, S1-1, S2-1, G1-1
Identifying and assessing adverse impacts Ongoing screening of salient sustainability risks throughout value chain | • Sustainable supply chain process: 1) Supplier Code of Conduct 2) Sustainability Risk Assessment 3) Supplier Sustainability Self- Assessment 4) Supplier Sustainability Audits conducted by external auditor 5) Social and Human Rights Impact Assessment for high-risk suppliers • Screening of suppliers' risk profiles (sanctions, adverse media) • Valmet's global Management System process for health and safety and quality performance monitoring | • Regular employee surveys • Health and safety hazard identification and risk assessment of locations and tasks • Environmental aspect and impact assessment of locations • Sustainability impact assessment when there is a significant change in market presence • Location-level Social and Human Rights Impact Assessment carried out by an independent 3rd party • Screening of Valmet industrial locations using the World Wide Fund for Nature (WWF) Water Risk Filter and the WWF Biodiversity Risk Filter • External Audits by ISO standard certification bodies and customers • Corporate Internal Audits | • Environmental aspect and impact assessments of products and services • Sustainability impact assessment for large customer projects with identified high impact on environment, people or local communities • Country & industry Sustainability Risk Assessment: – Business ethics – Human and labor rights – Environmental management – Health and safety. • Screening of customers’ risk profiles (sanctions, adverse media) • Product safety assessments
Paragraphs in the Sustainability Statement: E1 SBM-3, E1 IRO-1, E4 SBM-3, E4-1, S1 SBM-3, S1-2, S1-4, S1-14, S2 SBM-3, S2-2, S2-3, S2-4, G1-1, G1-3
Taking actions to address adverse impacts | • Training of suppliers • Supplier Engagement Program • Sourcing category-specific tools and guidelines • Sustainability requirements for suppliers and in supplier contracts • Strategic Must-Win initiative including sustainability in supply chain • Sustainability360º agenda and Valmet's Climate Program supplier engagement | • Training of employees on: – Valmet’s Code of Conduct – Health, Safety and Environment – Human Rights – Sustainability – Climate Program – Sustainable Supply Chain – Anti-Corruption • Action plans for mitigating identified Health, Safety and Environment and social risks and impacts • Sustainability impact assessment results monitoring and follow-up. • Multi-site certification to ISO 9001, 14001 and 45001 standards • Strategic Must-Win initiatives to Continue Health, Safety and Environment improvement and to Boost high performance and engagement • Sustainability360º agenda and Valmet's Climate Program | • Beyond Circularity research and development program and ecosystem (2022-2025) • Strategic Must-Win initiative to 'Develop new products and technologies to create new revenue and enable customers' carbon neutral operations' • Sustainability360º agenda and Valmet's Climate Program
Paragraphs in the Sustainability Statement: E1-1, E1-3, E1-4, E5-5, S1-4, S1-5, S2-4, S2-5, G1-1, G1-3
Engaging with affected stakeholders and access to remedy | • Valmet maintains active dialogue with employees and other workers as described in S1-2 • Valmet encourages its employees and stakeholders to speak up and voice their concerns. Valmet offers TrustLine channel maintained by external party for reporting suspected violations of our Code of Conduct. It provides Valmet employees and other stakeholders with the possibility to report concerns anonymously and in their native language. • As a part of Valmet’s due diligence framework, Valmet has a remediation process in place. If a serious violation occurs, an Incident Management Team is established to coordinate the remediation actions and to ensure their implementation. • Valmet’s Compliance Committee organization and it's committees oversees misconduct investigations • Valmet has following guidelines: – Remediation of serious sustainability violations in supplier operations – Health, Safety and Environment event reporting and management procedures – Guideline for reporting and handling misconduct
Paragraphs in the Sustainability Statement: S1-2, S1-3, S1-4, S2-3, S2-4, G1-1, G1-3
Tracking effectiveness and communication | • KPIs to follow up sustainable supply chain process (e.g. number of audits, number of suppliers engaged, corrective actions closed) • Regular internal reporting on strategic Must-Wins • Annual Global Management System (GMS) reviews in management teams • Annual sustainability reporting in the Sustainability Statement • Annual disclosures to sustainability indices and ratings • Internal and external communications channels (intranet and valmet.com) • Reporting based on UN Guiding Principles Reporting Framework and UN Global Compact
Paragraphs in the Sustainability Statement: E1, E2, E3, E4, E5, S1, S2, G1

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
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GOV-5: Risk management and internal controls
Valmet’s internal control processes follow the framework issued by
the Committee of Sponsoring Organizations (COSO) and comprises
five principal components of internal control: the control
environment; risk assessment; control activities; information and
communication; and monitoring. Valmet’s control environment is
based on Valmet’s corporate culture: the integrity, values, ethical
behavior, and competence of Valmet’s personnel, as well as the
direction provided to the personnel by the Board of Directors.
Valmet’s values and control environment provide the Board of
Directors and Valmet’s management with the basis for reasonable
assurance of Valmet achieving the objectives for internal control.
The President and Chief Executive Officer and the Executive Team
define Valmet’s values and ethical principles (reflected in the Code
of Conduct) and set the example for the corporate culture, which
creates the basis for the control environment. The same parties, with
the b usiness lines and Areas are responsible for communicating
Valmet’s values to the organization.
In Valmet, sustainability reporting is centrally managed by the
Marketing and Communications, Sustainability and Corporate
Relations function. The relevant experts in Valmet’s functions and
businesses are responsible for producing the required sustainability
reporting information on their areas of expertise, with the support of
the Sustainability Team and Group Finance.
In addition to a general assessment of risks related to sustainability
reporting, Valmet has conducted its risk assessment by a close
analysis of the disclosure requirements in the ESRS standards and of
the individual data points, as well as using prior experience of the
sustainability reporting requirements to evaluate the risks and
prioritization.
Risks related to sustainability reporting have been evaluated
following the guidelines and principles of internal controls and risk
assessment. Based on its assessment, Valmet has concluded that the
main risk areas are related to disclosures involving estimates,
significant judgments, and information derived from external
sources in its value chain. The main identified reporting risks
concern the availability, accuracy, completeness and timeliness
of reporting.
Based on the acknowledged control principles and methods, Valmet
mitigates these risks by sustainability reporting training and
instructions, with relevant system controls, defined responsibilities,
established review and approval processes and schedules, and by
segregation of duties. Valmet’s policies, guidelines, and working
instructions support the control processes and risk
mitigation efforts.
Risks related to sustainability reporting are assessed by relevant
business process owners together with the Sustainability function
and Group Finance. They are in charge of establishing an
appropriate internal control framework. Business lines and
functions are responsible for applying these controls as part of the
sustainability reporting process. Sustainability matters are subject to
regular reviews by Valmet’s Business line and function management.
The findings of risk assessment and internal controls are monitored
by the CSRD Steering C ommittee, and any significant findings are
reported to Valmet’s Executive Team and the Audit Committee of
the Board of Directors.
Strategy
SBM-1: Strategy, business model and value chain
Valmet supplies process technologies, automation systems, flow
control solutions, and services for the pulp, paper, and energy
industries, as well as municipal and industrial heat and power
producers. Valmet’s customer base also includes other process
industries and marine, where automation and flow control solutions
are widely used. In the process technologies business, the Group’s
revenue arises from projects, the scope of which ranges from the
delivery of complete mill facilities on a turnkey basis to single-
section machine rebuilds, which may or may not include process
automation solutions. Services business revenue includes revenue
from maintenance contracts, smaller improvement and
modification contracts, rebuilds, and the sale of spare parts and
consumables. Process technologies and services business revenue
largely arises from the same customers, with the services offering
focused on maintaining the installed base of equipment and
automation solutions. Valmet has no products or services banned in
any market.
Valmet’s Way Forward is the strategic roadmap, a guide for
achieving Valmet’s vision of becoming the global champion in
serving our customers and moving the industries forward. It
identifies megatrends and lays out Valmet's mission and strategic
goals, along with the initiatives undertaken to achieve them.
Valmet's mission is to help its customers convert renewable
resources into sustainable results and make industrial processes
reliable and efficient. This defines Valmet's core purpose and drives
solution development. With Valmet’s solutions, customers can
refine renewable raw materials into sustainable products and energy.
Valmet thus helps increase the utilization of renewable resources
and promote circularity. Valmet’s technologies and services ensure
that customers’ production processes run smoothly and safely
without interruptions. Valmet enables customers to improve their
environmental performance, product quality, and productivity over
the lifecycle with minimal wasted resources.
Valmet believes that technology plays a crucial role in mitigating
climate change and global warming, and protecting the
environment. The aim of Valmet’s research and development work
is to create new technologies, products, and services that help
enhance circularity and the efficient use of raw materials, water, and
energy, promote the use of renewable raw materials, and reduce
emissions. Valmet’s Beyond Circularity is a research and
development p rogram in which Valmet and its ecosystem come
together to innovate, renew, and enable their customer industries in
the shift to carbon neutrality and to facilitate the green transition.
The program targets are closely connected to Valmet’s Technology
vision 2035 and Climate Program – Forward to a carbon
neutral future.
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Valmet’s process technologies, new board, paper and tissue lines,
pulp mills, energy boilers and rebuilds of these technologies aim to
enhance the environmental performance of customers by enabling
improved raw material, energy, water, and chemical efficiency.
Valmet's automation solutions, distributed control systems (DCS),
industrial applications, quality management systems, analyzers and
measurements, Industrial Internet solutions and automation
services aim to help customers’ businesses by improving production
performance and cost-effectiveness, environmental performance
and efficient use of materials. Valmet’s valves, pumps, and valve
automation technologies improve the reliability, and safety of
customers’ production processes.
Valmet’s services aim to extend the lifetime of customers’ process
technologies with solutions for rebuilds, upgrades, conversions, and
maintenance services. Machine modernization and single-section
business improves the performance and extends the lifetime of
machines and equipment by replacing old or obsolete parts,
installing new technologies, optimizing process parameters, and
enhancing quality and efficiency, for example.
Value chain
Own operations
Valmet has operations globally in approximately 40 countrie s.
Valmet’s production operations cover Valmet’s own manufacturing,
foundries, and further processing of supplied components. Most of
Valmet’s production comprises machining and assembly. Valmet’s
service operations range from spare part deliveries to maintenance
of wear parts in Service workshops and complete outsourcing of
customer mill functions.
In 2024, Valmet had 19,310 employees. The largest countries in
terms of headcount are Finland, China, the USA, Sweden, Brazil and
India. The breakdown of Valmet’s employees by country is disclosed
under S1-6.
Valmet serves customers in more than 100 countries, and many of
Valmet’s workforce operate on customers’ project sites, mills, or
plants on a daily basis. Valmet’s strategic goal is to strengthen its
local presence close to customers and growth markets, which is an
important consideration when hiring new employees in
respective areas.
Upstream value chain
Valmet purchases components, products, materials, and services
from some 36,000 active suppliers in more than 60 countries.
Valmet’s strategic target is to increase procurement close to
customer projects and its own operations. All indirect purchases
supporting Valmet’s operations are procured locally. The ten largest
countries in terms of purchases (EUR million) are Finland, China,
the USA, Sweden, Germany, Brazil, Poland, Estonia, Canada
and India.
Downstream value chain – use phase of
the technologies
Valmet provides services, automation, and process technologies for
the pulp, paper, energy, and other process industries around the
world. Valmet’s technologies have a lifetime of between 10 to 100
years. In 2024 the biggest countries in terms of net sales are the USA,
China and Finland, and in terms of income taxes, the USA, Finland
and Brazil.
The potential impacts, risks and opportunities and their possible
relationship with Valmet’s business model and value chain are
disclosed under SBM-3.
SBM-2: Interest and views of stakeholders
S1 Own workforce and S2 workers in the value chain, SBM-2:
Interest and views of stakeholders
Valmet’s stakeholders are existing and potential customers, existing
and potential employees and workers in the value chain, suppliers
and subcontractors, Valmet’s existing and potential shareholders,
media, non-governmental organizations, the authorities, and local
communities, as well as research institutes, universities, colleges,
vocational schools and other existing and potential partners in
research, development and innovation.
The entities or individuals identified as stakeholders can reasonably
be expected to be significantly affected by Valmet’s activities,
products, and/or services, and their actions can reasonably be
expected to affect Valmet’s ability to successfully implement its
strategies and achieve its objectives.
Stakeholder dialogue
Valmet's own workforce is a key affected stakeholder. Valmet takes
into account the interests, views, and rights of people in its own
workforce, including respect for human rights, to inform its strategy
and business model through various mechanisms, including active
dialogue, surveys, feedback, and other inputs from employees, which
are carefully analyzed and utilized by Valmet management teams at
different levels with a direct impact on strategy, planning business
model considerations, and annual planning. Specific examples
include the employee survey, interactions with the European and
other employee representative bodies, and regular Social and
Human Rights Impact Assessments.
Valmet maintains active dialogue with customers through regular
meetings and other direct contact such as customer seminars and
events, fairs, reputation and customer satisfaction surveys, and
through specific industry organizations. In research and
development, Valmet collaborates closely with its customers to
collect information about their product development needs to
innovate solutions. In addition, Valmet asks for regular feedback
from the customers regarding how Valmet is perceived in the
market, how its products and services meet customer needs and
expectations, and how Valmet can improve its customer
relationships.
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Valmet has an external reporting portal for its stakeholders for
collecting information on and managing incidents and events
related to health, safety, environment, and continuous improvement
in all Valmet operations. The tool is also used by Valmet's own
workforce. With the tool, Valmet collects ideas for research and
development purposes as well.
Valmet engages and collaborates with its suppliers and supply-chain
workers through its Due diligence framework. These due diligence
activities encompass for example Valmet’s Supplier Engagement
Program, Social and Human Rights Impact Assessments, Supplier
Sustainability Audits, local health, safety and environment activities
at sites and tools for reporting. Valmet also meets suppliers regularly
to share Valmet’s vision, strategy, and expectations and discuss how
to improve collaboration and performance. In addition, Valmet
regularly organizes supplier health, safety and environment events
globally, at which Valmet's requirements are discussed and best
practices on health, safety and environment are shared among
supply chain partners.
Valmet has a long tradition of cooperating with customers and
universities to research sustainable production technologies and find
new solutions. Beyond Circularity, Valmet’s current Research and
Development program, improves Valmet’s readiness to support the
green transition in Valmet’s customer industries based on the
Group’s Technology vision 2035. To achieve the ambitious program
targets, Valmet has built an ecosystem and leads a multitude of
internal and external projects that involve customers, suppliers,
universities, research institutes, and other partners. Through this
ecosystem, participants contribute to the renewal of the pulp and
paper industry and the acceleration of the green transition. The
ecosystem already has more tha n 280 partners and 35 ecosystem
projects, exceeding the initial program partner target for 2025.
Valmet engages shareholders, investors and analysts in dialogue to
ensure that the capital markets have correct and sufficient
information to determine the value of Valmet shares and to increase
awareness of Valmet as an investment. The communication
channels include financial statements and interim reviews, stock
exchange releases and press releases, general meetings, investor
meetings, site visits, seminars, the company website, social media,
and webcasts. By reporting to selected third-party sustainability
ratings and assessments, Valmet seeks to help its stakeholders assess
its sustainability performance. The rankings also serve as a
management tool in helping continuously raise our sustainability
performance and define areas for improvement in our
sustainability strategy.
Valmet interacts with various media representatives through regular
meetings and interviews and direct contact. Valmet shares timely
information about its operations through press, stock and trade
press releases, information events, the company website, reports and
several publications, and social media channels.
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SBM-3: Material impacts, risks and opportunities and their interaction with strategy and business model
Valmet’s material topics, sub-topics, and sub-sub-topics

Material sustainability topic | Material sub-topic | Material sub-sub topic | Material from own operation’s perspective | Material from value chain’s perspective
E1 Climate change | Climate change mitigation | - | Yes | Yes
Energy | - | Yes | Yes
E2 Pollution | Pollution of air | - | No | Yes
Pollution of water | - | No | Yes
E3 Water and marine resources | Water | Water consumption | No | Yes
E4 Biodiversity and ecosystems | Direct impact drivers of biodiversity loss | Climate change | No | Yes
Pollution | No | Yes
E5 Resource use and circular economy | Resource inflows, including resource use | - | Yes | Yes
Resource outflows related to products and services | - | Yes | Yes
S1 Own workforce | Working conditions | Social dialogue | Yes | No
Freedom of association and collective bargaining | Yes | No
Health and safety | Yes | No
Equal treatment and opportunities for all | Gender equality and equal pay for work of equal value | Yes | No
Diversity | Yes | No
S2 Workers in the value chain | Working conditions | Working time | No | Yes
Adequate wage | No | Yes
Social dialogue | No | Yes
Freedom of association and collective bargaining | No | Yes
Health and safety | No | Yes
Other work-related rights | Child labor | No | Yes
Forced labor | No | Yes
G1 Business conduct | Corporate culture | - | Yes | No
Protection of whistleblowers | - | Yes | No
Management of relationships with suppliers including payment practices | - | Yes | No
Corruption and bribery | - | Yes | No

Valmet's material sustainability matters have been disclosed in the
table above. Related material sustainability impacts, risks and
opportunities have been described in the following pages. The
double materiality assessment process is described under IRO-1.
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E1 C limate change related impacts, risks and opportunities

Material sustainability matter | Climate change mitigation
Sustainability impacts * short- and medium-term | • Greenhouse gas (GHG) emissions are caused by the use of fuels and production of electricity, district heat, and steam consumed in Valmet locations (actual negative impact in own operations) • Significant upstream and downstream GHG emissions are caused by the production of raw materials and components used in Valmet's technologies, transportation, and distribution, and the use of installed technologies by Valmet's customers (actual negative impact in upstream and downstream value chain)
Financial opportunities * medium- and long-term | • Tightening climate-related regulation creates opportunities in the market for Valmet’s solutions due to increased demand for resource efficiency in processes and the use of renewable and recycled raw materials ( i n own operations and upstream and downstream value chain)
Financial risks * short-, medium-, and long-term | • Transition risk due to emerging climate-related regulation and carbon pricing mechanisms, which may affect Valmet’s technologies and cause financial risk (i n own operations and upstream and downstream value chain)

Material sustainability matter | Energy
Sustainability impacts * short- and medium-term | • Fuel, electricity, district heat, and steam consumption in Valmet locations (actual negative impact in own operations) • The primary material for Valmet’s solutions is steel. The production process of steel in Valmet's upstream value chain is energy intensive (actual negative impact in upstream and downstream value chain) • Valmet delivers technologies to the energy and energy-intensive pulp and paper industries (actual negative impact in upstream and downstream value chain)
Financial opportunities * medium- and long-term | • Opportunity for Valmet as i.a. regulation drives the demand for more energy-efficient technologies, as well as energy solutions using renewable energy (i n own operations and downstream value chain)
Financial risks * short-, medium-, and long-term | • Transition risk due to emerging energy-related regulation and carbon pricing mechanisms, which may affect Valmet’s own operations and technologies (i n own operations and upstream and downstream value chain)

E1 Climate change, SBM-3: Material impacts, risks and
opportunities and their interaction with strategy and business
model
The successful management of climate-related risks and
opportunities is a key element in the delivery of Valmet’s strategy.
Valmet has conducted a resilience analysis of its strategy and
business model in relation to climate change across the value chain,
including the supply chain, Valmet’s own operations, and
customers’ use phase of Valmet’s technologies. The potential long-
term impacts of climate change have been analyzed in 2021 through
two different scenarios: in the first, the global warming is limited to
1.5 °C; in the second, the global warming has reached 4 °C
(ESRS 2 E1 IRO-1).
The resilience analysis concluded that Valmet would probably
benefit from its energy- and water-efficient technologies and its
position as one of the enablers of climate change mitigation.
Demand for technologies enabling pulp, paper, and energy
production, with alternative energy sources such as biomass and
carbon-free electricity, is likely to increase rapidly. There are also
reputational opportunities for Valmet if pulp and paper and
bioenergy industries reach carbon neutrality enabled by Valmet’s
technologies.
The differences between the 1.5 °C and 4 °C climate scenarios are
expected to become more evident between 2030 and 2050 as
negative climate events become more frequent and severe, especially
in the 4 °C scenario. In the 1.5 °C scenario, emerging climate-related
regulation and carbon pricing mechanisms will play a bigger role
globally, and the related transition risk will become more significant.
In the 4 °C scenario, physical impacts such as floods, volatile forest
yield, storms, and drought dominate.
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E2 Pollution related impacts, risks and opportunities in value chain

Material sustainability matter | Pollution of air
Sustainability impacts * short- and medium-term | • Valmet’s upstream value chain includes manufacturing of components, which contributes to environmental impacts such as air pollution, including particulate matter and volatile organic compounds (actual negative impact in upstream and downstream value chain) • While using Valmet’s process technologies and automation in pulp, paper, energy, and other process industries, customers generate air emissions such as particulate matter, hazardous air pollutants, nitrogen oxides, sulfur oxides, carbon monoxide, and volatile organic compounds that require emission control (actual negative impact in upstream and downstream value chain)
Financial opportunities * short- and medium-term | • Customers increasingly need to reduce air emissions, which creates a business opportunity for Valmet’s air emission control solutions (i n own operations and downstream value chain)

Material sustainability matter | Pollution of water
Sustainability impacts * short- and medium-term | • While using Valmet’s process technologies and automation in pulp, paper, energy, and other process industries, customers generate water emissions such as biological and chemical demands (BOD and COD) and other pollutants that require wastewater treatment (actual negative impact in downstream value chain)
Financial opportunities * short- and medium-term | • Customers increasingly need to reduce water effluent, which creates a business opportunity for Valmet’s wastewater control solutions (i n own operations and downstream value chain )

E3 Water related impacts, risks and opportunities in value chain

Material sustainability matter | Water consumption
Sustainability impacts * short- and medium-term | • Valmet’s upstream value chain includes water consuming processes, such as steel manufacturing (actual negative impact in upstream and downstream value chain) • Valmet’s customers in the pulp, paper, tissue, and board industries operate water-intensive process technologies (actual negative impact in upstream and downstream value chain)
Financial opportunities * short- and medium-term | • Increasing customer demand for solutions that improve water management efficiency and closed loop water systems is a business opportunity for Valmet (i n own operations and downstream value chain)

E4 Biodiversity and ecosystems related impacts, risks and opportunities in value chain

Material sustainability matter | Direct impact drivers of biodiversity loss
Sustainability impacts * long-term | • Valmet's own operations and upstream and downstream value chain contribute to climate change, which is a driver of biodiversity loss (actual negative impact in upstream and downstream value chain) • Valmet's upstream and downstream value chain contribute to air and water pollution, which is a driver of biodiversity loss (actual negative impact in upstream and downstream value chain)

E4 Biodiversity and ecosystems, SBM-3: Material impacts, risks
and opportunities and their interaction with strategy and
business model
Biodiversity is intrinsically linked to climate change and is integral
to Valmet’s strategy and business model. Valmet’s strategic mission
is to create sustainable results by converting renewable resources
and making industrial processes reliable and efficient.Valmet’s own
operations and upstream and downstream value chain depend on
biodiversity for ecosystem services such as water, raw materials,
and energy.
Valmet's business model and strategy is centered around the
continuous improvement and research and development of its
technologies, which aim to improve environmental performance.
Valmet helps its customers optimize resource and energy use, utilize
recycled materials and bioenergy technologies as well as reduce
pollution with wastewater treatment and air emission control
solutions. Improving environmental performance can also reduce
pressures on biodiversity and ecosystems in the value chain. Valmet
requires its suppliers to account for their biodiversity impacts by
committing to its Supplier Code of Conduct.
Valmet performed an initial biodiversity assessment of its strategy
and business model between 2023-2024 using the ENCORE and
Science Based Targets for Nature (SBTN) sectoral materiality tools
and will continue with a comprehensive resilience analysis in
relation to biodiversity in 2025.
Valmet’s locations are situated on land zoned for commercial or
industrial use by the local authorities. The WWF Biodiversity Risk
Filter tool was used to identify the following Valmet locations near
protected or biodiversity-sensitive areas: workshops in Gorizia, Italy
and Swiecie, Poland. Valmet’s activities do not cau se s ignificant
direct environmental impacts to nearby biodiversity sensitive areas
and these sites are managed in compliance with environmental
permits and requirements. Nor do Valmet’s own operations directly
affect threatened species or directly negatively impact land
degradation, desertification, or soil sealing. Valmet has
environmental aspect and impact assessments for all industrial
locations. Mitigation measures for protecting the environment are
implemented in accordance with operating permits and Valmet’s
global management system (GMS) and ISO 14001:2015 standards
and certifications. These measures include operational controls for
hazardous substances, air emissions, noise, water effluent, and waste,
as well as emergency preparedness and response. Valmet also
conducts Sustainability impact assessments when changes in market
presence occur to ensure negative environmental impacts, including
biodiversity impacts, are identified.
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E5 Resource use and circular economy related impacts, risks and opportunities

Material sustainability matter | Resource inflows - Valmet's use of materials
Sustainability impacts * short- and medium-term | • The production of Valmet’s products requires large quantities of materials. The most material resource inflows are steel, polymers, electronic components, and packaging materials (actual negative impact in own operations and upstream value chain) • Valmet decreases resource use by aiming to design modular and lightweight products (actual positive impact in own operations) • Valmet uses recycled steel in its own foundries to reduce the impact from virgin raw materials (actual positive impact in own operations) • Valmet delivers process technologies, which enable customers to use and recover energy, water, and chemicals more efficiently or minimize waste by using production side streams from other applications, processes, or even industries. These technologies positively contribute to the material inflows in the industries Valmet services. (actual positive impact in downstream value chain)

Material sustainability matter | Resource outflows - Valmet's solutions
Sustainability impacts * short- and medium-term | • Valmet's solutions and services enable extension of the lifetime of technologies used by customers (actual positive impact in downstream value chain) • Valmet’s process technologies and automation enable the conversion of renewable and recycled resources into solutions in the pulp, paper, board, tissue, and energy industries and renewable resource use in the energy and other process industries (actual positive impact in downstream value chain) • Valmet's solutions enable circularity for customers through material recovery and conversion to same or other uses; longer circulation cycles; reduced use of virgin materials; and cascaded use across industries concerning process residuals (actual positive impact in downstream value chain)
Financial opportunities * short- and medium-term | • Increasing demand for process technology and automation that improve resource efficiency, and enable renewable resource use is a significant business opportunity for Valmet (in own operations and downstream value chain) • Valmet's services enabling life cycle extension of installed technology and automation is a significant business opportunity for Valmet (in own operations and downstream value chain)

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S1 Own workforce related impacts, risks and opportunities

Material sustainability matter | Working conditions
Sustainability impacts * short- and medium-term (positive impact) * short-, medium- and long-term (negative impact) | • Valmet has practices in place for social and other forms of dialogue with employees in all Valmet countries (actual positive impact in own operations) • Valmet has operations in countries where collective bargaining and/or freedom of association is either limited or not a common practice (actual negative impact in own operations) • Valmet’s workforce are exposed to health and safety risks during work activities which can cause injuries and illnesses (actual negative impact in own operations)

Material sustainability matter | Equal treatment and opportunities for all
Sustainability impacts * short- and medium-term (positive impact) * short-, medium- and long-term (negative impact) | • Proactive measures to address potential inequalities in hiring, career progression, and pay equity can lead to a more engaged and inclusive workplace (potential positive impact in own operations) • Gender imbalance poses a risk of unintentional discrimination and inequalities, e.g., in hiring, career progression, and pay equity (potential negative impact in own operations)

S1 Own workforce, SBM-3: Material impacts, risks and
opportunities and their interaction with strategy and business
model
Valmet’s strategy and business model include being close to its
customer base, its own production for key products, and providing
at-customer installation, installation, maintenance, and
modernization services. Some of Valmet's operations are in high-
risk countries with systemically limited possibility of freedom of
association and collective bargaining and social dialogue which are
identified negative impacts arising from this strategy and business
model. Valmet’s business model is also connected with negative
health and safety impacts from individual work-related incidents,
particularly in the production and service environments. The
connected positive impacts arising from the strategy and business
model occur through the execution of the Valmet’s Must-Wins,
which include specific initiatives to continuously improve health
and safety and to boost employee engagement which impact all
employees.
Valmet employees who could be materially impacted include the
following groups: permanent employees, temporary employees, and
trainees. The materially impacted non-employee workforce is leased
workers.
Analysis of work-related injury and illness data shows that Valmet’s
workforce in the operations and manufacturing, project
management, and service job families are more at risk of being
negatively affected by health and safety impacts. The main risks of
work-related injury and illness are associated with the unexpected
start-up of machinery, mechanical lifting, working at heights or in
confined spaces, the use of tools and equipment, manual handling,
hot work, exposure to hazardous substances and radiation, electrical
work, road travel, exposure to infectious diseases, and the social and
organizational work environment. These hazards can result in:
• Fatal injuries
• Severe injuries such as lacerations, fractures, burns, amputations,
loss of eyesight, concussion
• Minor injuries such as cuts, contusions, sprains
• Skin disease caused by physical, chemical, or biological agents
• Hearing impairment caused by noise from equipment
• Diseases caused by vibration from using handheld equipment
• Musculoskeletal disorders from manual handling (lifting, pulling,
pushing) and repetitive movements
• Respiratory diseases from dust and chemical exposure
• Infections from viruses, bacteria, and parasites
• Stress-related ill health.
Valmet does not have own operations which are at significant risk of
forced labor or child labor. Valmet frequently monitors and updates
its definition of high-risk regions and geographies by assessing the
country risks matrix, which is based of Zurich’s Risk Room and
contains country- and industry-level data to assess economic,
societal, technological, environmental, and geopolitical risks. Based
on the classification, many cost competitive countries (CCC),
especially in South East Asia, South America and Africa, are
classified as high-risk.
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S2 Workers in the value chain related impacts, risks and opportunities

Material sustainability matter | Working conditions
Sustainability impacts * short- and medium-term (positive impact) * short-, medium- and long-term (negative impacts) | • Valmet has operations in countries where collective bargaining and/or freedom of association are limited or not common practice. Value-chain workers in high-risk countries may lack legislated access to freedom of association, collective bargaining, adequate wages, and/or can be subject to excessive working hours (actual negative impact in upstream and downstream value chain) • Value-chain workers can be exposed to health and safety risks during work activities which can cause injuries and illnesses in the provision of products and services to Valmet (actual negative impact in upstream and downstream value chain) • Through supplier engagement processes, Valmet can improve working conditions and health and safety of value-chain workers (potential positive impact in upstream and downstream value chain)

Material sustainability matter | Other work-related rights
Sustainability impacts * short-, medium- and long-term | • Young workers and migrant workers are identified as vulnerable groups within value-chain workers. Migrant workers have an increased risk of forced or bonded labor, and young workers may be exposed to hazardous or harmful work (potential negative impact in upstream and downstream value chain)

S2 Workers in the value chain, SBM-3: Material impacts, risks
and opportunities and their interaction with strategy and
business model
Value chain workers who could be materially impacted by Valmet’s
operations include the following workers in Valmet’s value chain:
• Upstream: Valm et’s suppliers’ workers who are working mainly in
the suppliers’ own premises.
• Own operations: Valmet’s suppliers’ workers who are working as
service provider s in Valmet’s premises, and the supplier controls
the work. These include, for example, consultants, engineering
services workers, maintenance contractors, and workers from
outsourced services such as cleaning, security, and logistics.
• Downstream: Valm et’s sup plier’s workers who are working as a
Valmet site subcontractor for construction, installation, and
maintenance services in the customer’s premises, and the supplier
controls the work.
Valmet strives to develop ethical practices and ensure decent
working conditions throughout the value chain, as well as
opportunities for local employment and economic activity. As a part
of Valmet's due diligence -process Valmet conducts for example
human rights salient risk screening, Social and Human Rights
Impact Assessments in its own operations and upstream value chain
as well as, Health, Safety and Environment and Supplier
Sustainability Audits. Based on this Valmet has identified negative
impacts and potential positive impact related to working conditions
and other work-related rights in its value chain as outlined in the
table above.
The potential positive impact related to working conditions involves
improving the working conditions and health and safety of value-
chain workers through Valmet's supplier engagement processes.
The actual and potential negative impacts related to value-chain
workers involve working conditions and other work-related rights.
Valmet continuously screens potential negative social and human
rights impacts throughout its value chain. The most salient human
rights risks connected to Valmet’s value chain are related to
inadequate wages and excessive working hours, lack of freedom of
association and collective bargaining, the risk of bonded and forced
labor, the position of young workers and migrant workers, and
occupational health and safety. Possible migrant workers and young
workers are identified as vulnerable groups in the value chain, and
they have a heightened risk of being exposed to negative impacts. In
Valmet's value chain possible migrant workers are typically
employed by site sub-contractors in construction and installation of
projects.
Negative impacts related to lack of freedom of association and
collective bargaining, inadequate wages, and excessive working
hours remain a risk in all supplier categories in high-risk countries.
Value-chain workers are exposed to similar hazards in their work
activities as Valmet’s own workforce, as described in S1-4. Valmet’s
site subcontractors working in customer premises are at risk of
severe work-related injuries and illnesses associated with the
unexpected start-up of machinery, working at heights and in
confined spaces, and mechanical lifting. Young workers may be
especially exposed to hazardous or harmful work or unsafe working
conditions.
Valmet frequently monitors and updates its definition of high-risk
regions and geographies by assessing the country risks matrix, which
is based on Zurich’s Risk Room and contains country- and industry-
level data to assess economic, societal, technological, environmental,
and geopolitical risks. Based on the classification, many cost-
competitive countries (CCC), especially in South East Asia, South
America, and Africa, are classified as high-risk.
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G1 Business Conduct related impacts, risks and opportunities

Material sustainability matter | Corporate culture
Sustainability impacts * short-, medium- or long-term (positive impact) * medium- to long-term (negative impact) | • Valmet’s actions to promote corporate culture ensure that Valmet does business ethically and legally, that employees feel safe working for Valmet, and that stakeholders consider Valmet a trusted business partner (actual positive impact in own operations) • Failures in creating an ethical corporate culture can lead to unethical or illegal business conduct. It can subject employees to negative effects such as unfair treatment or discrimination (potential negative impact in own operations)

Material sustainability matter | Protection of whistleblowers
Sustainability impacts * short-, medium- or long-term (positive impact) * medium- to long-term (negative impact) | • Valmet’s actions to promote corporate culture ensure that employees and stakeholders feel comfortable raising concerns, and the whistleblowers are protected and any potential misconduct is caught before severe consequences (actual positive impact in own operations) • Failure to protect whistleblowers can lead to retaliation against the reporter (potential negative impact in own operations)

Material sustainability matter | Corruption and bribery
Sustainability impacts * short-, medium- or long-term (positive impact) * medium- to long-term (negative impact) | • Valmet's successful measures to prevent corruption and bribery promote the reputation as a reliable partner, with whom ethical business conduct principles are implemented (actual positive impact in own operations) • Valmet's inadequate measures to prevent corruption and bribery may lead to violation of the Code of Conduct and illegal behavior. Being involved in a corruption or bribery incident would have negative effects on people and society (potential positive impact in own operations)

Material sustainability matter | Management of relationships with suppliers
Sustainability impacts * short-, medium- or long-term (positive impact) * medium- to long-term (negative impact) | • Valmet’s purchases of goods and services contributes to the employment of value-chain workers. Valmet’s Supplier Code of Conduct promotes sustainable business practices in the supply chain (actual positive impact in upstream value chain) • Failure to comply with Valmet’s payment practices could cause negative impacts to suppliers (potential negative impact in upstream value chain)

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Impact, risk and opportunity management
IRO-1: Description of the process to identify and
assess material impacts, risks and opportunities
General
Valmet has conducted a double materiality assessment to identify
and assess actual and potential negative and positive impacts on the
environment and people, as well as sustainability related financial
risks and opportunities across the value chain in the short, medium,
and longer terms. The double materiality assessment determined the
disclosure requirements to be included in Valmet’s CSRD reporting
scope. Valmet will review the results of the double materiality
assessment annually as a part of the CSRD reporting process.
The double materiality assessment process was based on
comprehensive study, internal workshops, and interviews with
subject matter experts, as well as external and internal stakeholders.
The process comprised four steps:
1. Scoping of the assessment
2. Identification of impacts, risks, and opportunities
3. Double materiality assessment
4. Consolidation of the findings
Valmet assessed the impacts, risks and opportunities encompassing
own operations, the upstream and downstream value chain . Affected
internal and external stakeholders were engaged in the assessment
through interviews and workshops. Internal functions engaged in
the assessment were Sustainability, Human Resources, Health,
Safety and Environment, Research and Development, Investor
Relations, Ethics and Compliance, Risk Management, Internal
Audit, Group Accounting, and Supply Chain. In addition, external
stakeholder representatives from Valmet’s customers and business
partners participated in the assessment.
Scoping of the assessment
For the purposes of the double materiality assessment and
sustainability reporting, Valmet has defined its value chain to
include the following stages where it is causing or contributing to
impacts:
• Upstream value chain: suppliers’ manufacturing of components;
Valmet’s sourcing of raw materials; and transportation to Valmet
• Own operations: research and development; engineering; own
production; project deliveries; services; and maintenance of
customers’ technologies
• Downstream value chain: the use phase of Valmet’s technologies
Valmet has not included in the reporting boundary following
activities on which Valmet does not have a direct impact, or which
Valmet does not control:
• Upstream value chain: activities and sourcing by sub-suppliers or
sub-sub-suppliers who are not in a direct relationship with
Valmet.
• Downstream value chain: activities and sourcing of raw materials
by our customers and end-of-life treatment of the products.
The assessment dimensions follow guidance provided by the ESRS
standards. For impact materiality, the assessment thresholds were
based on the OECD Guidelines for Multinational Enterprises for
Responsible Business Conduct, the UN Guiding Principles, the
European Financial Reporting Advisory Group's (EFRAG) working
paper “[Draft] European Sustainability Reporting Guidelines 1 –
Double materiality conceptual guidelines for standard setting.” For
financial materiality, the thresholds followed Valmet’s enterprise
risk management process.
Identification of impacts, risks and opportunities
The impacts of Valmet’s operations and business relationships were
determined through a comprehensive desktop study that included
both internal and external sources. In a ddition, three ma pping
workshops were conducted with internal stakeholders and external
subject matter experts. These workshops were designed to identify
and analyze potential impacts, risks and opportunities, as well as to
pinpoint the specific areas of the value chain where these might
occur. Based on the results of the mapping workshops, the most
affected stakeholder groups were selected for interviews to capture
their overall opinion on the impacts that Valmet has on their
stakeholder group.
Double materiality assessment
The material impacts, risks and opportunities were identified
through a comprehensive double materiality assessment.
In Valmet’s impact assessment, both positive and negative impacts
and actual and potential impacts related to sustainability matters
were considered. Valmet prioritized negative impacts based on their
relative severity (scale, scope, irremediably) and likelihood, and
positive impacts on their relative benefit (scale, scope) and
likelihood.
The assessment scale used for determining the severity or benefit of
impacts was guided by the sustainability due diligence process
defined in the UN Guiding Principles and Business and Human
Rights and the OECD Guidelines for Multinational Enterprises for
Responsible Business Conduct, as well as the EFRAG
Implementation Guidance for Materiality Assessment.
In the process of assessing, identifying, and prioritizing risks and
opportunities that have or could potentially have financial impacts,
Valmet employed a scale measuring the size of the financial effect
and its likelihood. This scale was the same as in Valmet’s risk
assessment process. The estimations of the financial impact focused
on the scale of impacts, rather than on the precise valuation of the
financial effects. The estimated potential magnitude of financial
effects was based on EBITA. For financial effects that could not be
reliably quantified, the assessment relied on qualitative factors and
ranges, as outlined in the EFRAG Implementation Guidance for
Materiality Assessment.
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In the double materiality assessment process, Valmet utilized
following information sources: outcomes of workshops, feedback
from interviews with external stakeholders, prior impact
assessments and audits carried out by Valmet, expert knowledge of
the subject matter, research and articles from external sources.
Consolidation of the findings
The materiality of disclosure requirements and related data points
were determined based on the materiality assessment results at sub-
topic or sub-sub-topic level.
E1 Climate change, I RO-1: Description of the
processes to identify and assess material impacts,
risks and opportunities
Valmet has a continuous multidisciplinary enterprise risk
management process in which climate-related issues are integrated.
Valmet has a systematic method to regularly identify, assess, and
manage the probability and impact of climate-related risks at all
stages of the value chain at a Group level and within each business
line in the short, medium, and long terms.
Climate-related risks related to direct operations, as well as the
upstream and downstream are identified, assessed, and responded to
with the same risk assessment process as other types of risks in
Valmet Corporate Risk Management. Risk management covers
strategic, financial, operational, and hazard risks, including climate-
related physical and transition risks. The assessed risks are based on
Valmet’s risk profile, which lists the risks at the headline level and
covers all operations.
Valmet’s risk management p rocess promotes opportunities and
treats risks. Valmet aspires to manage the adverse impacts of
strategic, financial, and operational risks and to remove or mitigate
hazard risks. The line management of Valmet’s businesses is
accountable for managing risks as part of its daily activities. Climate
change and environmental risks are assessed once a year at a Group
level by Valmet’s Risk Management function.
Climate-related risks and opportunities
Valmet’s exposure to climate-related risks and opportunities has
been analyzed under the following risk categories: physical (acute
and chronic); regulatory; technological; market; reputational; and
social. Exposure refers to an organization’s vulnerability to negative
impacts or ability to realize positive impacts from the transition to a
low-carbon economy and the impacts of climate change itself.
Valmet has analyzed the potential impact of climate change on its
operations and business environment across the value chain,
including the supply chain, its own operations, and customers’ use
phase of Valmet’s technologies. The potential long-term impacts of
climate change have been analyzed through two different scenarios:
In the first, global warming is limited to 1.5 °C; in the second, global
warming has reached 4 °C. The scenarios are in line with the Task
Force on Climate-related Financial Disclosures (TCFD) reporting.
The scenario analysis has enabled Valmet to identify and quantify
climate-related risks and opportunities and assess its business
resilience in different climate scenarios. As part of its annual
reporting process, Valmet analyzes its GHG emissions inventory
across the value chain as reported in E1-6.
The scenarios are set for 2030, as it is far enough in the future to
analyze the potential business impacts when climate-related risks
have most likely materialized, and to analyze outcomes from
company strategy and risk management perspective. The two
scenarios have been chosen as they represent different climate states
of the future. Physical risks have been further analyzed until 2050.
In the analysis, short term is defined as one year, medium term as
two to five years, and long-term as more than five years. The
analysis considers the likelihood, magnitude, and duration of
physical hazards or transition events.
Physical risks
Physical risks and exposure to climate-related hazards have been
identified in the short, medium, and long terms in both 1.5 °C and
4 °C climate scenarios until 2030 and 2050.
Acute physical risks
Acute physical risks in the short and medium terms may be
increases in the frequency and severity of extreme weather events
such as floods and storms that may impact Valmet’s own production
sites in India, China, Europe, and North America by causing
production shutdowns and having a financial impact.
Chronic physical risks
Chronic physical risks include long-term shifts in climate patterns
causing sea level rise and posing a risk to Valmet’s operations in
China and Indonesia, for example. Access to raw materials in the
supply chain may also be impacted by chronic changes in the
environment. Forest yield volatility and regional differences are
likely to increase, impacting the supply chains of Valmet's customers
in the pulp and paper industries and consequently creating both
risks and opportunities for Valmet. Increasing drought increases the
risk of forest fires, and warmer winters are likely to increase the
impact of pests and diseases on forestry yield.
Transition risks and opportunities
Transition risks and opportunities have been identified in the short,
medium, and long terms in a 1.5 °C climate scenario until 2030.
Opportunities
Valmet benefits from its energy- and water-efficient technologies, as
well as its position as one of the enablers of climate change
mitigation. Valmet's technologies help customers in the pulp and
paper and energy industries in their decarbonization efforts bringing
market and reputational opportunities. Increasing regulation related
to energy transition, carbon capture and climate change mitigation
are expected to increase demand for Valmet’s solutions. Customer
demand and market opportunity are increasing for air emission
control systems, wastewater treatment and closed loop water
solutions. Demand for process technology and automation that
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increase resource efficiency and enable renewable and recycled
resource use is a significant business opportunity for Valmet. The
Services business line enables life cycle extension of installed
technology and automation creates a significant business
opportunity for Valmet. Valmet’s sustainable business may increase
its opportunities to reduce the cost of capital through better green
finance terms.
Transition risks
If Valmet’s adaptation to regulation and market changes is low,
there is a risk that competitiveness will be lost, and thus customers,
revenue, and profits. Carbon pricing is expected to increase the price
of Valmet’s key raw materials such as steel. High demand for bio-
based products, as well as the competition for bio-based and forest-
based raw materials, may increase costs for customers. An
increasing risk that forest utilization as raw material will be seen
more negatively may also increase reputational risks for Valmet as a
technology provider.
Details of climate-related scenario analysis
Physical risks and exposure to climate-related hazards have been
identified using Intergovernmental Panel on Climate Change's
(IPCC) RCP2.6 (1.5 °C) and RCP8.5 (4 °C) climate scenarios.
Transition scenarios were considered for the whole value chain
according to the International Energy Agency (IEA) (Sustainable
Development Scenario and World Energy Outlook 2020) and
International Renewable Energy Agency (IRENA) (Global
Renewables Outlook: Energy Transformation 2050) scenarios.
IIASA’s Shared Socioeconomic Pathways (SSPs) were used alongside
the RCPs to analyze the feedback between climate change and
socioeconomic factors such as world population growth, economic
development, and technological progress.
First scenario: The global warming is limited to 1.5 °C
Valmet is committed to the Paris Climate Agreement’s 1.5-degree
pathway. In this 1.5-degree scenario, where global warming is
limited to 1.5 °C, the Paris Climate Agreement goals have been met,
and the mitigation of climate change has been strong.
In this scenario, it is expected that regulations will be more
ambitious, globally consistent, and will aim for a low-carbon
economy. The demand for sustainable and climate-resilient
solutions will create opportunities for Valmet. Potential risks arise
from the high demand for bio-based products, which will increase
competition for forest-based raw material. The availability of forest-
based raw material for customers in the pulp and paper and energy
industries may face limitations also due to need for carbon sinks and
protecting biodiversity.
Second scenario: The global warming has reached 4 °C
The second scenario reflects a situation in which global warming has
reached 4 °C, which means that emissions have continued to rise at
current rates. In this scenario, the transition to a low-carbon
economy is disorganized, as climate policies are fragmented, carbon
markets are not integrated, and carbon leakage will increase due to
large differences in carbon regulations between countries. Demand
for energy- and water-efficient technologies will grow in advanced
economies, whereas in developing markets, demand is unlikely
to change.
Overall, Valmet’s offering in low-carbon and water-efficient
solutions will provide a limited competitive advantage. There is also
a risk that customers will be unwilling to pay for such solutions, and
that the expectations of customers between regions will
increasingly differ.
Results of the scenario analysis
The results of the scenario analysis are utilized to support Valmet’s
strategy and capacity to adapt to and mitigate climate change. The
analyzed drivers mobilize developments that in the short and
medium terms also affect the operating environment. In both
scenarios, Valmet is seen to benefit from its energy- and water-
efficient technologies and its position as one of the enablers of
climate change mitigation. Demand for technologies enabling
carbon neutral pulp, paper, and energy production with alternative
energy sources such as biomass and carbon-free electricity, is likely
to increase rapidly. There are also reputational opportunities for
Valmet if the pulp and paper and bioenergy industries reach carbon
neutrality enabled by Valmet’s technologies.
The differences between the 1.5 °C and 4 °C climate scenarios are
expected to become more evident between 2030 and 2050 as
negative climate events become more frequent and severe, especially
in the 4 °C scenario. In the 1.5 °C scenario, emerging climate-related
regulation and carbon pricing mechanisms will play a bigger role
globally, and the related transition risk will become more significant.
In the 4 °C scenario, physical impacts such as floods, volatile forest
yield, storms, and drought dominate.
E2 Pollution, IRO-1: Description of the processes to
identify and assess material impacts, risks and
opportunities
As part of the double materiality assessment, Valmet evaluated its
business activities to identify actual and potential pollution-related
impacts, risks, and opportunities, and mapped where in the value
chain these might occur. The sources of the screening included
Valmet’s Supplier Sustainability Audit reports and information
obtained from the analysis conducted with the WWF biodiversity
risk filter. Valmet has screened all its locations against the WWF
biodiversity risk filter, and the indicators of the assessment include
pollution. In assessing its pollution-related impacts, Valmet did not
conduct consultations with affected communities.
E3 Water and marine resources, IRO-1: Description
of the processes to identify and assess material
impacts, risks and opportunities
As part of the double materiality assessment, Valmet evaluated its
business activities to identify actual and potential water-related
impacts, risks, and opportunities, and to recognize the specific areas
of the value chain where these might occur. In the assessment,
Valmet utilized the results of the water risk analysis conducted for
its sites using the WWF Water Risk Filter in 2021. With the Water
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Risk Filter, Valmet assess ed three type s of water-related business
risks: physical; regulatory; and reputational. In assessing its water-
related impacts, Valmet did not conduct consultations with affected
communities.
E4 Biodiversity and ecosystems, IRO-1: Description
of the processes to identify and assess material
impacts, risks and opportunities
As part of the double materiality assessment, Valmet screened its
activities to identify the most material impacts, dependencies, risks,
and opportunities related to biodiversity and ecosystems. The WWF
biodiversity risk filter, ENCORE (Exploring Natural Capital
Opportunities, Risks and Exposure), and SBTN (Science Based
Targets Network) sectoral materiality tools, as well as local
environmental impact assessments, were used. In assessing its
biodiversity- and ecosystem-related impacts, Valmet did not
conduct consultations with affected communities.
Valmet locations in or nearby biodiversity-sensitive areas are listed
in E4 SBM3. Valmet's activities do not negatively impact these areas.
As part of due diligence practices, Valmet implements biodiversity
mitigation measures such as environmental impact assessments for
all its existing and planned industrial locations globally.
E5 Resource use and circular economy, IRO-1:
Description of the processes to identify and assess
material impacts, risks and opportunities
As part of the double materiality assessment, Valmet screened its
activities to identify the most material impacts, risks, and
opportunities related to resource use and the circular economy.
Valmet selected procurement spend as one factor in determining the
most material product categories and resource inflows in its value
chain. In addition to procurement spend, Valmet analyzed its own
product portfolio and the materials of which products consisted. For
this purpose, Valmet utilized information from a product’s Bill of
Materials (BOM) or the Life Cycle Assessment (LCA). The resource
outflows materiality assessment focused on Valmet’s product and
service offerings. In assessing its resource-use- and circular-
economy-related impacts, Valmet did not conduct consultations
with affected communities.
G1 Business conduct, IRO-1: Description of the
processes to identify and assess material impacts,
risks and opportunities
In the double materiality assessment process related to business
conduct matters, the main work was done in a desktop study
followed by a mapping workshop, which was held with relevant
functions for governance topics. The scope of the process was global,
covering all locations, actions, sectors, and activities. Valmet’s own
operations in the mapping process were divided into five operational
sections: sales; procurement; planning; production; and projects. In
addition, upstream and downstream value chains were reviewed as
entities without more granular steps. It was assessed per each
potential sub-topic what the activities with a potential impact were,
and where in the value chain the potential impact was.
IRO-2: Disclosure Requirements in ESRS covered by
the undertaking's Sustainability Statement
The materiality of disclosure requirements and related data points
was determined based on the double materiality assessment results
at sub-topic or sub-sub-topic level. The explanation of how Valmet
has determined the material information to be disclosed in relation
to the impacts, risks and opportunities, including the use of
thresholds, has been disclosed under ESRS 2 IRO-1.
According to the ESRS standards, cross-cutting standards ESRS 1
and ESRS 2 are mandatory for all companies, regardless of the
outcome of the materiality assessment. Further topical standards
E1–E5, S1–S4, and G1 are to be reported based on the results of the
double materiality assessment. Based on Valmet’s double materiality
assessment results all Environmental standards E1–E5, Social
standards S1–S2, and Governance standard G1 include material
disclosure requirements for Valmet.
All ESRS Disclosure Requirements complied with in preparing this
Sustainability Statement have been listed in the following table. In
addition, a list of data points derived from other EU legislation can
be found in the following pages.
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ESRS Disclosure Requirements complied with in preparing this Sustainability Statement

ESRS standard | Disclosure requirement | Disclosure requirement description | Page number
ESRS 2
Basis for preparation
| BP-1 | General basis for preparation of the Sustainability Statement | 24
| BP-2 | Disclosures in relation to specific circumstances | 24
Governance
| GOV-1 | The role of the administrative, management, and supervisory bodies | 24
| GOV-2 | Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies | 24
| GOV-3 | Integration of sustainability-related performance in incentive schemes | 27
| GOV-4 | Statement on due diligence | 27
| GOV-5 | Risk management and internal controls over sustainability reporting | 29
Strategy
| SBM-1 | Strategy, business model and value chain | 29
| SBM-2 | Interests and views of stakeholders | 30
| SBM-3 | Material impacts, risks and opportunities and their interaction with strategy and business model | 32
Impact, risk and opportunity management
| IRO-1 | Description of the process to identify and assess material impacts, risks and opportunities | 39
| IRO-2 | Disclosure Requirements in ESRS covered by the undertaking’s Sustainability Statement | 42
Topical Standards
E1 | Climate change | 56
| E1.GOV-3 | Integration of sustainability-related performance in incentive schemes | 56
| E1.SBM-3 | Material impacts, risks and opportunities and their interaction with strategy and business model | 56
| E1.IRO-1 | Description of the processes to identify and assess material climate-related impacts, risks and opportunities | 56
| E1-1 | Transition plan for climate change mitigation | 56
| E1-2 | Policies related to climate change mitigation and adaptation | 56
| E1-3 | Actions and resources in relation to climate change policies | 58
| E1-4 | Targets related to climate change mitigation and adaptation | 59
| E1-5 | Energy consumption and mix | 62
| E1-6 | Gross Scopes 1, 2, 3 and Total GHG emissions | 63
E2 | Pollution | 66
| E2.IRO-1 | Description of the processes to identify and assess material pollution-related impacts, risks and opportunities | 66
| E2-1 | Policies related to pollution | 66
| E2-2 | Actions and resources related to pollution | 67
| E2-3 | Targets related to pollution | 67
E3 | Water and marine sources | 67
| E3.IRO-1 | Description of the processes to identify and assess material water and marine resources-related impacts, risks and opportunities | 68
| E3-1 | Policies related to water and marine resources | 68
| E3-2 | Actions and resources related to water and marine resources | 69
| E3-3 | Targets related to water and marine resources | 70
E4 | Biodiversity and ecosystems | 71
| E4.SBM-3 | Material impacts, risks and opportunities related to biodiversity | 71
| E4.IRO-1 | Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks and opportunities | 71
| E4-1 | Transition plan and consideration of biodiversity and ecosystems in strategy and business model | 71
| E4-2 | Policies related to biodiversity and ecosystems | 71
| E4-3 | Actions and resources related to biodiversity and ecosystems | 72
| E4-4 | Targets related to biodiversity and ecosystems | 73
E5 | Resource use and circular economy | 74
| E5.IRO-1 | Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities | 74
| E5-1 | Policies related to resource use and circular economy | 74
| E5-2 | Actions and resources related to resource use and circular economy | 76
| E5-3 | Targets related to resource use and circular economy | 77
| E5-4 | Resource inflows | 78
| E5-5 | Resource outflows | 78

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ESRS standard | Disclosure requirement | Disclosure requirement description | Page number
S1 | Own workforce | 79
| S1.SBM-2 | Interests and views of stakeholders | 79
| S1.SBM-3 | Material impacts, risks and opportunities and their interaction with strategy and business model | 79
| S1-1 | Policies related to own workforce | 79
| S1-2 | Processes for engaging with own workers and workers’ representatives about impacts | 81
| S1-3 | Processes to remediate negative impacts and channels for own workers to raise concerns | 82
| S1-4 | Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions | 83
| S1-5 | Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities | 86
| S1-6 | Characteristics of the undertaking’s employees | 88
| S1-8 | Collective bargaining coverage and social dialogue | 89
| S1-9 | Diversity metrics | 89
| S1-14 | Health and safety metrics | 90
| S1-16 | Compensation metrics (pay gap and total compensation) | 90
| S1-17 | Incidents, complaints and severe human rights impacts | 91
S2 | Workers in the value chain | 92
| S2.SBM-2 | Interests and views of stakeholders |
| S2.SBM-3 | Material impacts, risks and opportunities and their interaction with strategy and business model | 92
| S2-1 | Policies related to value chain workers | 79
| S2-2 | Processes for engaging with value chain workers about impacts | 93
| S2-3 | Processes to remediate negative impacts and channels for value chain workers to raise concerns | 94
| S2-4 | Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action | 95
| S2-5 | Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities | 98
G1 | Business Conduct | 99
| G1.GOV-1 | The role of the administrative, supervisory and management bodies | 99
| G1.IRO-1 | Description of the processes to identify and assess material business conduct-related impacts, risks and opportunities | 99
| G1-1 | Business conduct policies and corporate culture | 99
| G1-2 | Management of relationships with suppliers | 101
| G1-3 | Prevention and detection of corruption and bribery | 102
| G1-4 | Confirmed incidents of corruption or bribery | 103
| G1-6 | Payment practices | 103

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Data points derived from other EU legislation

Disclosure Requirement and related datapoint | SFDR reference | Pillar 3 reference | Benchmark Regulation reference | EU Climate Law reference | Materiality based on Double materiality assessment | Location on Sustainability Statement (page number)
ESRS 2 GOV-1 Board's gender diversity, paragraph 21 (d) | Indicator number 13 of Table #1 of Annex 1 |  | Commission Delegated Regulation (EU) 2020/1816 (5, Annex II |  | Material | 25
ESRS 2 GOV-1 Percentage of board members who are independent, paragraph 21 (e) |  |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Material | 24
ESRS 2 GOV-4 Statement on due diligence, paragraph 30 | Indicator number 10 Table #3 of Annex 1 |  |  |  | Material | 27
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities, paragraph 40 (d) i | Indicators number 4 Table #1 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 (28) Table 1: Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk | Delegated Regulation (EU) 2020/1816, Annex II |  | Not material | N/A
ESRS 2 SBM-1 Involvement in activities related to chemical production, paragraph 40 (d) ii | Indicator number 9 Table #2 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Not material | N/A
ESRS 2 SBM-1 Involvement in activities related to controversial weapons, paragraph 40 (d) iii | Indicator number 14 Table #1 of Annex 1 |  | Delegated Regulation (EU) 2020/1818, Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II |  | Not material | N/A
ESRS 2 SBM-1 Involvement in activities related to cultivation and production of tobacco, paragraph 40 (d) iv |  |  | Delegated Regulation (EU) 2020/1818, Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II |  | Not material | N/A
ESRS E1-1 Transition plan to reach climate neutrality by 2050, paragraph 14 |  |  |  | Regulation (EU) 2021/1119, Article 2(1) | Material | 56
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks, paragraph 16 (g) |  | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book-Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity | Delegated Regulation (EU) 2020/1818, Article12.1 (d) to (g), and Article 12.2 |  | Material | 56
ESRS E1-4 GHG emission reduction target, paragraph 34 | Indicator number 4 Table #2 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics | Delegated Regulation (EU) 2020/1818, Article 6 |  | Material | 59

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Disclosure Requirement and related datapoint | SFDR reference | Pillar 3 reference | Benchmark Regulation reference | EU Climate Law reference | Materiality based on Double materiality assessment | Location on Sustainability Statement (page number)
ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors), paragraph 38 | Indicator number 5 Table #1 and Indicator n. 5 Table #2 of Annex 1 |  |  |  | Material | 62
ESRS E1-5 Energy consumption and mix, paragraph 37 | Indicator number 5 Table #1 of Annex 1 |  |  |  | Material | 62
ESRS E1-5 Energy intensity associated with activities in high climate impact sectors, paragraphs 40 to 43 | Indicator number 6 Table #1 of Annex 1 |  |  |  | Material | 62
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions, paragraph 44 | Indicators number 1 and 2 Table #1 of Annex 1 | Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions and residual maturity | Delegated Regulation (EU) 2020/1818, Article 5(1), 6 and 8(1) |  | Material | 63
ESRS E1-6 Gross GHG emissions intensity, paragraphs 53 to 55 | Indicators number 3 Table #1 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics | Delegated Regulation (EU) 2020/1818, Article 8(1) |  | Material | 63
ESRS E1-7 GHG removals and carbon credits, paragraph 56 |  |  |  | Regulation (EU)2021/1119 , Article 2(1) | Not material | N/A
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks, paragraph 66 |  |  | Delegated Regulation (EU) 2020/1818, Annex II Delegated Regulation (EU) 2020/1816, Annex II |  | Phased in 1-3 years | N/A
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk, paragraph 66(a) ESRS E1-9 Location of significant assets at material physical risk paragraph 66(c) |  | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453, paragraphs 46 and 47; Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk |  |  | Phased in 1-3 years | N/A
ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes, paragraph 67 (c) |  | Article 449a Regulation(EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34; Template 2: Banking book - Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral |  |  | Phased in 3 years | N/A
ESRS E1-9 Degree of exposure of the portfolio to climate-related opportunities, paragraph 69 |  |  | Delegated Regulation (EU) 2020/1818, Annex II |  | Phased in 3 years | N/A

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Disclosure Requirement and related datapoint | SFDR reference | Pillar 3 reference | Benchmark Regulation reference | EU Climate Law reference | Materiality based on Double materiality assessment | Location on Sustainability Statement (page number)
ESRS E2-4 Amount of each pollutant listed in Annex II of the E- PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, paragraph 28 | Indicator number 8 Table #1 of Annex 1; Indicator number 2 Table #2 of Annex 1; Indicator number 1 Table #2 of Annex 1; Indicator number 3 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS E3-1 Water and marine resources, paragraph 9 | Indicator number 7 Table #2 of Annex 1 |  |  |  | Material | 68
ESRS E3-1 Dedicated policy, paragraph 13 | Indicator number 8 Table 2 of Annex 1 |  |  |  | Not material | N/A
ESRS E3-1 Sustainable oceans and seas, paragraph 14 | Indicator number 12 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS E3-4 Total water recycled and reused, paragraph 28 (c) | Indicator number 6.2 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS E3-4 Total water, consumption in m3 per net revenue on own operations paragraph 29 | Indicator number 6.1 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS 2 IRO1-E4 paragraph 16 (a) i | Indicator number 7 Table #1 of Annex 1 |  |  |  | Material | 34
ESRS 2 IRO1-E4 paragraph 16 (b) | Indicator number 10 Table #2 of Annex 1 |  |  |  | Material | 34
ESRS 2 IRO1-E4 paragraph 16 (c) | Indicator number 14 Table #2 of Annex 1 |  |  |  | Material | 34
ESRS E4-2 Sustainable land / agriculture practices or policies, paragraph 24 (b) | Indicator number 11 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS E4-2 Sustainable oceans / seas practices or policies, paragraph 24 (c) | Indicator number 12 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS E4-2 Policies to address deforestation, paragraph 24 (d) | Indicator number 15 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS E5-5 Non-recycled waste, paragraph 37 (d) | Indicator number 13 Table #2 of Annex 1 |  |  |  | Not material | N/A
ESRS E5-5 Hazardous waste and radioactive waste, paragraph 39 | Indicator number 9 Table #1 of Annex 1 |  |  |  | Not material | N/A
ESRS 2 SBM3 - S1 Risk of incidents of forced labour, paragraph 14 (f) | Indicator number 13 Table #3 of Annex 1 |  |  |  | Material | 36
ESRS 2 SBM3 - S1 Risk of incidents of child labour, paragraph 14 (g) | Indicator number 12 Table #3 of Annex 1 |  |  |  | Material | 36
ESRS S1-1 Human rights policy commitments, paragraph 20 | Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1 |  |  |  | Material | 79
ESRS S1-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21 |  |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Material | 79

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Disclosure Requirement and related datapoint | SFDR reference | Pillar 3 reference | Benchmark Regulation reference | EU Climate Law reference | Materiality based on Double materiality assessment | Location on Sustainability Statement (page number)
ESRS S1-1 processes and measures for preventing trafficking in human beings, paragraph 22 | Indicator number 11 Table #3 of Annex 1 |  |  |  | Material | 79
ESRS S1-1 workplace accident prevention policy or management system, paragraph 23 | Indicator number 1 Table #3 of Annex 1 |  |  |  | Material | 79
ESRS S1-3 grievance/complaints handling mechanisms, paragraph 32 (c) | Indicator number 5 Table #3 of Annex 1 |  |  |  | Material | 82
ESRS S1-14 Number of fatalities and number and rate of work- related accidents, paragraph 88 (b) and (c) | Indicator number 2 Table #3 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Material | 90
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness, paragraph 88 (e) | Indicator number 3 Table #3 of Annex 1 |  |  |  | Phased in 1 year | N/A
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a) | Indicator number 12 Table #1 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Material | 91
ESRS S1-16 Excessive CEO pay ratio, paragraph 97 (b) | Indicator number 8 Table #3 of Annex 1 |  |  |  | Material | 91
ESRS S1-17 Incidents of discrimination paragraph 103 (a) | Indicator number 7 Table #3 of Annex 1 |  |  |  | Material | 91
ESRS S1-17 Non- respect of UNGPs on Business and Human Rights and OECD, paragraph 104 (a) | Indicator number 10 Table #1 and Indicator n. 14 Table #3 of Annex I 1 |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818 Art 12 (1) |  | Material | 91
ESRS 2 SBM3 – S2 Significant risk of child labour or forced labour in the value chain, paragraph 11 (b) | Indicators number 12 and n. 13 Table #3 of Annex 1 |  |  |  | Material | 37
ESRS S2-1 Human rights policy commitments, paragraph 17 | Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1 |  |  |  | Material | 92
ESRS S2-1 Policies related to value chain workers, paragraph 18 | Indicator number 11 and n. 4 Table #3 of Annex 1 |  |  |  | Material | 92
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights principles and OECD guideline, paragraph 19 | Indicator number 10 Table #1 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) |  | Material | 92
ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19 |  |  | Delegated Regulation (EU)2020/1816, Annex II |  | Material | 93

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Disclosure Requirement and related datapoint | SFDR reference | Pillar 3 reference | Benchmark Regulation reference | EU Climate Law reference | Materiality based on Double materiality assessment | Location on Sustainability Statement (page number)
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain, paragraph 36 | Indicator number 14 Table #3 of Annex 1 |  |  |  | Material | 96
ESRS S3-1 Human rights policy commitments, paragraph 16 | Indicator number 9 Table #3 of Annex 1 and Indicator number 11 Table #1 of Annex 1 |  |  |  | Not material | N/A
ESRS S3-1 Non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines, paragraph 17 | Indicator number 10 Table #1 Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) |  | Not material | N/A
ESRS S3-4 Human rights issues and incidents, paragraph 36 | Indicator number 14 Table #3 of Annex 1 |  |  |  | Not material | N/A
ESRS S4-1 Policies related to consumers and end-users, paragraph 16 | Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1 |  |  |  | Not material | N/A
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17 | Indicator number 10 Table #1 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) |  | Not material | N/A
ESRS S4-4 Human rights issues and incidents, paragraph 35 | Indicator number 14 Table #3 of Annex 1 |  |  |  | Not material | N/A
ESRS G1-1 United Nations Convention against Corruption, paragraph 10 (b) | Indicator number 15 Table #3 of Annex 1 |  |  |  | Not material | N/A
ESRS G1-1 Protection of whistle- blowers, paragraph 10 (d) | Indicator number 6 Table #3 of Annex 1 |  |  |  | Material | 100
ESRS G1-4 Fines for violation of anti- corruption and anti-bribery laws, paragraph 24 (a) | Indicator number 17 Table #3 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Material | 103
ESRS G1-4 Standards of anti-corruption and anti-bribery, paragraph 24 (b) | Indicator number 16 Table #3 of Annex 1 |  |  |  | Material | 103

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Environmental information
EU taxonomy for sustainable finance
The European Union Sustainable Finance Taxonomy Regulation
2020/852 (the EU taxonomy) requires large companies subject to the
European Union Corporate Sustainability Report Directive (CSRD)
2022/2464 to disclose the extent to which their economic activities
have a substantial positive environmental impact. The EU taxonomy
is intended to encourage financial markets to invest and finance
more sustainably. It sets the criteria for activities that the EU has
classified as environmentally sustainable. The activities described in
the taxonomy are referred to as eligible activities. Eligible activities
that also meet set criteria of (1) a substantial contribution to one of
the six environmental objectives, (2) do no significant harm to the
remaining five environmental objectives, and (3) meet minimum
safeguards, are referred to as taxonomy-aligned activities. Only with
the cumulative fulfillment of all three requirements is the economic
activity taxonomy-aligned.
The currently available criteria allow companies to demonstrate
their contribution to the following environmental objectives:
Climate change mitigation; Climate change adaptation; Sustainable
use and protection of water and marine resources; Transition to a
circular economy; Pollution prevention and control; and Protection
and restoration of biodiversity.
Eligibility and alignment assessment
Valmet is a supplier of process technologies, automation and
services for the pulp, paper and energy industries, and with the
automation and flow control solutions serves and even wider base of
process industries. Valmet has reviewed its offering against the
Taxonomy activities to assess eligibility based on the eligible
economic activities listed in the Climate and Environmental
Delegated Acts and related Annexes. It has also taken into
consideration the amendments to the Climate Delegated Act.
Valmet reports eligibility and alignment for the Climate change
mitigation and the T ransition to a circular economy objective in
accordance with the Taxonomy Regulation.
In 2024, Valmet’s approach to identifying and reporting sustainable
economic activities consisted of:
1. Eligibility assessment: Mapping of economic activities to
taxonomy activity descriptions and NACE codes.
2. Substantial contribution assessment: Screening of activities
against technical screening criteria.
3. Do no significant harm (DNSH) assessment: Screening of
Valmet’s procedures to ensure that our operations do not cause
significant harm to relevant environmental objectives.
4. Minimum safeguards assessment: A review of Valmet’s corporate
safeguards to ensure that our operating instructions, company
policies, and management system are compliant with the OECD
Guidelines for Multinational Enterprises (OECD), the UN
Guiding Principles on Business and Human Rights (UNGP) and
the International Labour Organization (ILO) Declaration on
Fundamental Principles and Rights at Work. The minimum
safeguards assessment covers the following social and governance
aspects: human and labour rights; taxation; corruption and
bribery; and fair competition.
As a result of the 2024 assessment, the following economic activities
in the taxonomy were identified where Valmet has taxonomy-
eligible activities:
• Climate change mitigation (CCM) 3.1 Manufacture of renewable
energy technologies
• Climate change mitigation (CCM) 3.2 Manufacture of equipment
for the production and use of hydrogen
• Climate change mitigation (CCM) 3.6 Manufacture of other low-
carbon technologies
• Circular economy (CE) 4.1 Provision of IT/OT data-driven
solutions
• Circular economy (CE) 5.1 Repair, refurbishment and
remanufacturing
Circular economy (CE)
According to the taxonomy, the Circular economy is a system in
which the value of products, materials and other resources in the
economy are maintained for as long as possible. When reporting its
contribution to Circular economy according to EU taxonomy
Valmet has identified activities under 5.1. “Repair, refurbishment
and remanufacturing” and 4.1. “Provision of IT/OT data-driven
solutions”.
5.1 Repair, refurbishment and remanufacturing
Valmet supplies services for the pulp, paper and energy industries
and reports its services and solutions aimed at extending the
lifecycle of machinery and equipment under 5.1. Valmet offers paper
machine modernization solutions and maintenance services that
cover the entire machine life cycle. Valmet’s solutions include
rebuilds, upgrades, conversions, and maintenance services for
various types of paper machines and industrial processes, such as
renewable energy plants.
Paper machine modernization and single section business are the
process of upgrading and improving the performance and extending
the lifetime of papermaking machines and equipment. It can involve
replacing old or obsolete parts, installing new technologies,
optimizing process parameters, and enhancing quality and
efficiency. The paper machine modernization business can help
paper manufacturers increase productivity, while improving product
quality, extending lifetime and meeting environmental standards.
Although spare parts, performance parts and consumables play a
key role in keeping machinery and equipment functional, they were
excluded in the analysis, which was conducted conservatively, based
on the argument that it might be difficult to prove their substantial
contribution to exclusively extending the lifetime of equipment.
4.1. Provision of IT/OT data-driven solutions
When defining activities under 4.1. “Provision of IT/OT data-driven
solutions” Valmet reports automation systems such as Condition
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monitoring solutions built for purpose of remote or on-site
monitoring and predictive maintenance systems for paper, pulp and
energy industry.
Climate change mitigation (CCM)
According to EU taxonomy climate change mitigation includes
activities that contribute to the reduction or prevention of
greenhouse gas emissions or enhance carbon sinks. An economic
activity that is eligible under the environmental objective of climate
change mitigation should contribute substantially to the
stabilization of greenhouse gas emissions by avoiding or reducing
them or by enhancing greenhouse gas removals. When reporting its
contribution to Climate change mitigation according to EU
taxonomy, Valmet has identified activities under 3.1. “Manufacture
of renewable energy technologies”, 3.2 “Manufacture of equipment
for the production and use of hydrogen” and 3.6. “Manufacture of
other low carbon technologies”.
3.1. Manufacture of renewable energy technologies
Valmet’s technologies under CCM 3.1. include energy solutions that
enable the use of biomass or biomass originating feedstocks and
technologies enabling use of biomass in installations with significant
greenhouse gas emission savings. These solutions include CFB
(circulating fluidized bed) boilers and BFB (bubbling fluidized bed)
boilers utilizing biomass, bark, wood chips and recycled wood.
Furthermore Valmet’s renewable energy technologies (3.1) include
Flow control solutions and Automation solutions such as
Combustion optimization, Network optimization, Emission
reporting and Energy management systems, as well as Distributed
control systems (DCS), for renewable energy production.
3.2. Manufacture of equipment for the production and
use of hydrogen
Valmet’s solutions under CCM 3.2. include automation solutions
including advanced process controls and energy management
systems for Power to X and green hydrogen projects to optimize e-
methane or methanol production.
3.6. Manufacture of other low carbon technologies
Valmet’s solutions under CCM 3.6. include pulp technologies such
as LignoBoost and BioTrac. LignoBoost is Valmet’s patented
technology for producing lignin from pulp mill black liquor.
BioTrac is a pre-treatment technology of biomass to produce fuels,
chemicals, pellets and other valuable end products.
Key performance indicators
Valmet has made some estimations in the calculation of the key
performance indicators (KPIs), net sales 1, capital expenditure
(CapEx), and operating expenditure (OpEx), due to our
interpretation of the Taxonomy Regulation. Double counting has
been avoided by classifying external revenue streams into
taxonomy-eligible economic activities only once. The shares of
eligible and aligned net sales have been used as a key for calculating
eligible and aligned OpEx and CapEx. Intangible and tangible assets
as well as right-of-use assets acquired in business combinations were
not included in the calculation of eligible and aligned CapEx based
on net sales key.
Taxonomy net sales 2 are calculated according to the EU Taxonomy
definition of turnover and in line with revenue recognition standard
IFRS 15, and are included in Valmet’s total net sales presented in
Valmet’s consolidated financial statements. It includes the external
sales of taxonomy eligible activities. Net sales have been calculated
separately in each business line for eligible and aligned activities.
Taxonomy CapEx 3 is presented and measured in line with the
CapEx presented in the Group’s financial statements. It consists of
additions to property, plant and equipment, and intangible assets as
well as investments in right-of-use assets. Total CapEx also covers
additions to tangible and intangible assets, as well as right-of-use
assets resulting from business combinations. Additions to goodwill
are not included in CapEx.
The Taxonomy Regulation’s definition of OpEx consists of expenses
related directly to the maintenance and servicing of assets, including
facility improvements and research and development projects
supporting the transition to a low-carbon economy. Valmet has
applied a conservative interpretation of the Taxonomy OpEx
definition. Raw materials and salaries of employees performing
repairs, maintenance and services of eligible fixed assets, are
excluded.
The following tables present Valmet’s 2024 Taxonomy KPIs
associated with Valmet’s taxonomy-eligible economic activities and
template 1 presents information on nuclear and fossil gas related
activities according to the Complementary Climate Delegated Act.
1 Valmet uses the term net sales in its financial statements, while the EU Taxonomy
Regulation refers to the term Turnover.
2 Consolidated financial statements, note 3. Revenue recognition.
3 Consolidated financial statements, note 4. Intangible assets and property, plant and
equipment and note 5. Leases.
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Turnover 4 | 2024 | Substantial Contribution Criteria | DNSH criteria ('Does Not Significantly Harm') |
Economic activities | Code | Turnover (EUR million) | Proportion of turnover 2024 | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proportion of taxonomy- aligned (A.1.) or -eligible (A.2.) turnover, 2023 | Category enabling activity | Category transitional activity
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
Manufacture of renewable energy technologies
Manufacture of renewable energy technologies | CCM 3.1 | 149 | 2.8% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | 5.3% | E |
Manufacture of equipment for the production and use of hydrogen | CCM 3.2 | 0 | —% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Manufacture of other low carbon technologies | CCM 3.6 | 5 | 0.1% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | 0.0% | E |
Provision of IT/OT data-driven solutions | CE 4.1 | 13 | 0.2% | N/EL | N/EL | N/EL | N/EL | Y | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Repair, refurbishment and remanufacturing | CE 5.1 | 1,065 | 19.9% | N/EL | N/EL | N/EL | N/EL | Y | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 1,232 | 23.0% | 2.9% | —% | —% | —% | 20.1% | —% | Y | Y | Y | Y | Y | Y | Y | 5.3% |
Of which Enabling | 1,232 | 23.0% | 2.9% | —% | —% | —% | 20.1% | —% | Y | Y | Y | Y | Y | Y | Y | 5.3% | E |
Of which Transitional | 0 | —% | —% |  |  |  |  |  |  |  |  | —% |  | T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Manufacture of renewable energy technologies | CCM 3.1 | 234 | 4.4% | EL | N/EL | N/EL | N/EL | N/EL | N/EL |  | 1.9% |
Manufacture of equipment for the production and use of hydrogen | CCM 3.2 | 1 | —% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | —%
Manufacture of other low carbon technologies | CCM 3.6 | 4 | 0.1% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 0.3%
Provision of IT/OT data-driven solutions | CE 4.1 | 0 | —% | N/EL | N/EL | N/EL | N/EL | EL | N/EL | 0.3%
Repair, refurbishment and remanufacturing | CE 5.1 | 0 | —% | N/EL | N/EL | N/EL | N/EL | EL | N/EL | 23.3%
Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 239 | 4.5% | 4.5% | —% | —% | —% | —% | —% | 25.8%
A. Turnover of Taxonomy-eligible activities (A.1 + A.2) | 1,470 | 27.4% | 7.3% | —% | —% | —% | 20.1% | —% | 31.1%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of taxonomy-non-eligible activities | 3,889 | 72.6% |
TOTAL | 5,359 | 100% |

4 Net Sales is used in other parts of Valmet's financial statements, while the EU Taxonomy Regulation uses the term Turnover.
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CapEx | 2024 | Substantial contribution criteria | DNSH criteria ('Does Not Significantly Harm') |
Economic activities | Code | CapEx (EUR millions) | Proportion of CapEx, 2024 | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular Economy | Biodiversity | Minimum safeguards | Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) CapEx, 2023 | Category enabling activity | Category transitional activity
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of renewable energy technologies | CCM 3.1 | 3 | 1.0% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | 0.6% | E |
Manufacture of equipment for the production and use of hydrogen | CCM 3.2 | 0 | —% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Manufacture of other low carbon technologies | CCM 3.6 | 0 | —% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Provision of IT/OT data-driven solutions | CE 4.1 | 0 | 0.1% | N/EL | N/EL | N/EL | N/EL | Y | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Repair, refurbishment and remanufacturing | CE 5.1 | 32 | 12.9% | N/EL | N/EL | N/EL | N/EL | Y | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 34 | 14.0% | 1.1% | —% | —% | —% | 12.9% | —% | Y | Y | Y | Y | Y | Y | Y | 0.6% |  |
Of which Enabling | 34 | 14.0% | 1.1% | —% | —% | —% | 12.9% | —% | Y | Y | Y | Y | Y | Y | Y | 0.6% | E |
Of which Transitional | 0 | —% | —% |  |  |  |  |  |  |  |  |  |  |  |  | —% |  | T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Manufacture of renewable energy technologies | CCM 3.1 | 4 | 1.8% | EL | N/EL | N/EL | N/EL | N/EL | N/EL |  | 0.2% |
Manufacture of equipment for the production and use of hydrogen | CCM 3.2 | 0 | —% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | —%
Manufacture of other low-carbon technologies | CCM 3.6 | 0 | —% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | —%
Provision of IT/OT data driven solutions | CE 4.1 | 0 | —% | N/EL | N/EL | N/EL | N/EL | EL | N/EL | 0.1%
Repair, refurbishment and remanufacturing | CE 5.1 | 0 | —% | N/EL | N/EL | N/EL | N/EL | EL | N/EL | 10.6%
CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 5 | 1.9% | 1.9% | —% | —% | —% | —% | —% | 11.0%
A. CapEx of Taxonomy eligible activities (A.1 + A.2) | 39 | 15.8% | 2.9% | —% | —% | —% | 12.9% | —% | 11.6%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities | 207 | 84.2% |
TOTAL | 246 | 100% |

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OpEx | 2024 | Substantial contribution criteria | DNSH criteria ( 'Does Not Significantly Harm') |
Economic activities | Code | OpEx (EUR millions) | Proportion of OpEx, 2024 | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proportion of Taxonomy- aligned (A.1) or eligible (A.2) OpEx, 2023 | Category enabling activity | Category transitional activity
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of renewable energy technologies | CCM 3.1 | 5 | 2.4% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | 0.7% | E |
Manufacture of equipment for the production and use of hydrogen | CCM 3.2 | 0 | —% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Manufacture of other low carbon technologies | CCM 3.6 | 1 | 0.3% | Y | N/EL | N/EL | N/EL | N/EL | N/EL | Y | Y | Y | Y | Y | Y | Y | 0.1% | E |
Provision of IT/OT data-driven solutions | CE 4.1 | 0 | 0.1% | N/EL | N/EL | N/EL | N/EL | Y | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
Repair, refurbishment and remanufacturing | CE 5.1 | 37 | 17.4% | N/EL | N/EL | N/EL | N/EL | Y | N/EL | Y | Y | Y | Y | Y | Y | Y | —% | E |
OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 43 | 20.1% | 2.6% | —% | —% | —% | 17.5% | —% | Y | Y | Y | Y | Y | Y | Y | 0.9% |  |
Of which Enabling | 43 | 20.1% | 2.6% | —% | —% | —% | 17.5% | —% | Y | Y | Y | Y | Y | Y | Y | 0.9% | E |
Of which Transitional | 0 | —% | —% |  |  |  |  |  |  |  |  |  |  |  |  | —% |  | T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Manufacture of renewable energy technologies | CCM 3.1 | 1 | 0.7% | EL | N/EL | N/EL | N/EL | N/EL | N/EL |  | 2.3% |
Manufacture of equipment for the production and use of hydrogen | CCM 3.2 | 0 | —% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | —%
Manufacture of other low- carbon technologies | CCM 3.6 | 0 | —% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 0.1%
Provision of IT/OT data driven solutions | CE 4.1 | 0 | —% | N/EL | N/EL | N/EL | N/EL | EL | N/EL | 0.1%
Repair, refurbishment and remanufacturing | CE 5.1 | 0 | —% | N/EL | N/EL | N/EL | N/EL | EL | N/EL | 23.4%
OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 2 | 0.7% | 0.7% | —% | —% | —% | —% | —% | 26.0%
A. OpEx Taxonomy eligible activities (A.1 + A.2) | 44 | 20.8% | 3.3% | —% | —% | —% | 17.5% | —% | 26.9%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities | 169 | 79.2% |
TOTAL | 214 | 100% |

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Template 1: Nuclear and fossil gas related activities

Row | Nuclear energy related activities |
1 | The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. | NO
2 | The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. | NO
3 | The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. | NO
| Fossil gas related activities
4 | The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. | NO
5 | The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. | NO
6 | The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. | NO

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E1: Climate change
Govern ance
ESRS 2 GOV-3: Integration of sustainability-related
performance in incentive schemes
This information is disclosed under ESRS 2 GOV-3.
Strategy
E1-1: Transition plan for climate change mitigatio n
Climate change and the transition to a carbon neutral economy are
among the key megatrends behind Valmet’s strategy and Must-Win
program. Valmet believes technology plays a key role in mitigating
climate change in the transition to a carbon neutral economy.
Valmet has created a comprehensive Climate Program with the goal
of mitigating climate change, adapting to global warming, and
driving the transition of the pulp and paper industry to carbon
neutrality by enabling energy- and resource-efficient pulp, paper,
and energy production with fossil-free energy sources for its
customers.
Valmet’s Climate Program includes Scope 1, 2, and 3 greenhouse gas
(GHG) emission reduction targets and action plans covering its own
operations and the value chain. Scope 1 emissions are direct GHG
emissions that occur from sources that are owned by Valmet, such
as fuels used at Valmet locations. Scope 2 emissions are indirect
GHG emissions associated with the consumption of purchased
electricity, steam, heat, or cooling. Scope 3 GHG emissions occur in
Valmet's value chain, such as in the supply chain and during
customers' use of Valmet's technologies.
Valmet’s Climate Program is approved by the Board of Directors
and the Executive Team. The Climate Program Steering team is
responsible for monitoring implementation of the Climate Program.
In 2024, the Steering team was chaired by the Senior Vice President
of Marketing, Communications, Sustainability and Corporate
Relations, who reported to the President and Chief Executive Officer
and was a member of the Executive Team.
The GHG emission reduction targets are in line with the Paris
Agreement’s 1.5-degree pathway (E1-4). Valmet has identified its
decarbonization levers (E1-4) and the related actions and
investments required (E1-3) to reach the targets. The action plans to
reach the Climate Program targets are embedded in the annual plans
and financial planning of the Su stainability; Health, Safety and
Environment; Supply Chain; Research and Development; and Risk
Management functions, as well as relevant business li nes. The action
plans are supported with EUR 158 million investments in
environmental management and improvement actions in own
operations and research and development expenses. In 2024,
Valmet's taxonomy-aligned capital expenditure was EUR 34 million
(with reference to KPI of taxonomy-aligned capital expenditure).
Progress towards reaching the targets of the Climate Program is
reported in E1-4.
Valmet has identified potential locked-in GHG emissions in its own
operations from natural gas consumption in the USA and fossil-fuel
based electricity consumption in India and China, but they will not
impact reaching the 2030 Scope 1 and 2 GHG emission reduction
target. GHG emissions from the use of sold products depend on the
source of energy the customer chooses. Valmet’s technologies
already enable fossil-free board, tissue, and paper production for
customers with access to fossil-free energy sources. Valmet’s
biomass-based energy solutions and energy conversions have long
enabled fossil-free heat and power production. Furthermore, many
customers’ chemical pulp mills using Valmet’s technologies are
bioenergy self-sufficient.
Valmet works continuously to align its taxonomy-eligible economic
activities, including revenues, capital expenditure, and operating
expenditure. Valmet is not excluded from the EU Paris-aligned
Benchmarks.
ESRS 2 SBM-3: Material impacts, risks and
opportunities and their interaction with strategy
and business model
This information is disclosed under ESRS 2 SBM-3.
Impact, risk and opportunity management
ESRS 2 IRO-1: Description of the processes to
identify and assess material climate-related
impacts, risks and opportunities
This information is disclosed under ESRS 2 IRO-1.
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E1-2 MDR-P: Policies related to climate change
mitigation and adaptation
Valmet has adopted the Valmet’s Code of Conduct; the Valmet
Health, Safety, and Environment (HSE) Policy; the Valmet Supplier
Code of Conduct; and the Valmet Guidelines for Sustainable and
Responsible Research, Product Development, and Design to manage
the following material impacts, risks, and opportunities related to
climate change mitigation and energy.
Related to climate change:
• GHG emissions from Valmet’s own operations: GHG emissions
are caused by the use of fuels and production of electricity, district
heat, and steam consumed at Valmet locations (actual negative
impact)
• GHG emissions in value chain: Significant upstream and
downstream GHG emissions are caused by the production of raw
materials and components used in Valmet’s technologies,
transportation and distribution, and the use of installed
technologies by Valmet's customers (actual negative impact)
• Tightening climate-related regulation creates opportunities in the
market for Valmet’s solutions due to increased demand for
resource efficiency in processes and the use of renewable and
recycled raw materials (opportunity)
• Transition risk due to emerging climate-related regulation and
carbon pricing mechanisms, which may affect Valmet’s
technologies and cause a financial risk (risk).
Related to energy:
• Fuel, electricity, district heat, and steam consumption at Valmet
locations (actual negative impact)
• The primary material for Valmet’s solutions is steel. The
production process of steel in Valmet's upstream value chain is
energy intensive. (actual negative impact)
• Valmet delivers technologies to the energy and energy-intensive
pulp and paper industries (actual negative impact)
• Opportunity for Valmet as regulation drives demand for more
energy-efficient technologies, as well as energy solutions using
renewable energy (opportunity)
• Transition risk due to emerging energy-related regulation and
carbon pricing mechanisms, which may affect Valmet’s own
operations and technologies (risk).
V almet’s Code of Conduct
Valmet’s Code of Conduct defines Valmet’s requirements and
expectations, for example, in terms of climate and circularity in
products and services, the environmental efficiency of its own
operations, and the sustainable supply chain. The content and
requirements set in the Code of Conduct are described in more
detail in section G1-1.
Valmet Health, Safety and Environment (HSE) Policy
The Health, Safety and Environment (HSE) Policy defines Valmet’s
commitments to constantly reduce the climate, biodiversity, and
water impacts of its value chain through efficient and circular use of
resources, use of carbon-free energy, waste minimization, and
pollution prevention. In addition, the policy emphasizes sustainable
design principles and the supply of products, services, and solutions
that enable our customers to improve their energy, environmental,
and safety performance. The content and requirements set in the
policy are described in more detail in section S1-1.
Valmet Supplier Code of Conduct
The Supplier Code of Conduct defines sustainability principles with
which suppliers are required to comply. The Supplier Code of
Conduct requires suppliers to strive for the continuous development
of environmental performance and the reduction of emissions and
any negative impacts on the environment. Suppliers are expected to
commit to mitigating climate change and to establish an appropriate
organizational structure or resources for the effective management
of climate and environmental risks and impacts. The content and
requirements set in the Supplier Code of Conduct are described in
more detail in section S2-1.
Valmet's Sustainable Supply Chain policy was renewed in 2024 and
the renewed policy is called the Supplier Code of Conduct.
Valmet Guidelines for Sustainable and Responsible
Research, Product Development and Design
The guidelines integrate sustainability into research and
development by aiming to minimize resource consumption and
reduce emissions. Improving environmental performance and
mitigating climate change through technology are important
objectives in the guidelines. The content and requirements set in the
guidelines are described in more detail in section E5-1.
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E1-3 MDR-A: Actions and resources in relation to climate change policies

Material sustainability topic | Related material impact in brief | Action | Decarboniza tion lever | Scope | Time horizon | Achieved and expected GHG emission reduction | Related target
Climate change | GHG emissions from own operations | Purchase of renewable fuels | Carbon-free and low- carbon energy | 1 | 2019- 2030 | Achieved: Biofuel in use in Valmet's Sundsvall facility in Sweden Expected: Scope 1 GHG emission reduction by 2030: -60% | Scope 1 and 2 emission reduction target
Purchase of carbon- free and low-carbon electricity and district heat | Carbon-free and low- carbon energy | 2 | 2019- 2030 | Achieved: Reduction of 58% in Scope 2 GHG emissions through purchase of carbon-free and low-carbon electricity and district heat. Expected: Scope 2 GHG emission reduction by 2030: -98%
Energy | Energy consumption in own operations | Continuous improvement in operational energy efficiency | Energy efficiency | 1 and 2 | 2019- 2030 | Calculated as reduction in energy consumption. Achieved: 7% reduction in energy consumption in Valmet’s own operations. Expected: Reduction of 10% in energy consumption by 2030. | Energy reduction target
Climate change | GHG emissions from upstream value chain | Supplier climate engagement | Supplier climate engagement | 3 | 2021- 2024 | Engaged suppliers have reduced their Scope 1 and 2 emissions by 13% between 2021-2023 based on Valmet's 2024 supplier survey | Supplier climate engagement target
Use of recycled steel | Recycled raw materials | 3 | 2019- 2030 | Using recycled steel in Valmet's own foundries reduced emissions 24 000 tCO 2 e in 2024 | Scope 3 supply chain emission reduction target
Freight planning and selection of suppliers offering low-carbon transportation | Logistics | 3 | 2019- 2030 | Achieved: Logistics emissions have reduced by 10% since the base year. Expected: Logistics GHG emission reduction by 2030: -20%
Climate change | GHG emissions from downstream value chain | Valmet’s pulp, paper and energy technologies enable fossil-free production for customers with access to fossil-free energy sources | Valmet’s technologies and solutions | 3 | 2019- 2030 | Valmet's customers can reduce their emissions by choosing to use Valmet's fossil-free technologies together with fossil-free energy sources | Valmet's technologies and solutions target
Energy | Energy consumption in downstream value chain | Improving energy efficiency of current offering | Energy efficiency in technologies | 3 | 2019- 2030 | Valmet measures energy efficiency in pulp, paper, board and tissue technologies. The average reduction in these technologies in 2024 is 10% compared to the 2019 baseline. | Target for improving energy efficiency in Valmet's pulp, paper, board, and tissue technologies

In 2024, Valmet invested EUR 35 million in environmental
management and improvement actions in own operations. The
downstream actions are related to research and development.
Valmet's research and development expenses for 2024 totaled
EUR 123 million (Consolidated financial statements, note 18.
Selling, general and administrative expenses).
Ability to implement the actions depends on the continuous
availability and allocation of resources into energy efficiency
improvements and low-carbon energy in own operations and
research and development.
In 2024, Valmet established a Green Finance Framework applicable
for the issuance of green debt instruments. The Green Finance
Framework is designed to support financing or refinancing eligible
assets and expenditures that promote two key environmental
objectives: enabling transition to a circular economy and mitigating
climate change. During 2024, Valmet issued a EUR 200 million
green bond and signed a EUR 50 million green term loan agreement
with Swedish Export Credit Corporation (SEK).
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Metrics and targets
E1-4, MDR-T: Target s related to climate change mitigation and adaptation
Targets related to climate change mitigation

Related material impact in brief | Decarboni- zation lever | KPI and scope | Target | Base year | Base year value | Share of respective scope covered by target | Progress towards target in 2024 | Related policy
GHG emissions from own operations | Carbon-free and low- carbon energy Energy efficiency | Reduction in Scope 1 and 2 (market-based) GHG emissions (%) | -80% by 2030 | 2019 | 130,000 tCO 2 e | 100% of Scope 1 and 2 | Since the base year, Scope 1 and 2 emissions have decreased by 49%. In 2024, emissions reduction actions included purchasing carbon-free and low-carbon energy and the production of renewable energy from solar installations. | Code of Conduct; Health, Safety and Environment Policy
GHG emissions from upstream value chain | Recycled raw materials Logistics | Reduction in Scope 3 GHG emissions from supply chain (Category 1 purchased goods and services, Category 4 transportation and distribution) (%) | -20% by 2030 | 2019 | 1,600,000 tCO 2 e | 4% of Scope 3 | Since the base year, Scope 3 category 1 and 4 emissions have remained at base year level. Actions to reduce emissions include increasing the use of recycled steel in products, redesigning lightweight steel products, introducing alternative raw materials and optimizing components’ manufacturing methods. Logistics emissions reduction actions include freight planning and the selection of suppliers offering low-carbon transportation. | Code of Conduct; Health, Safety and Environment Policy
GHG emissions from upstream value chain | Supplier climate engagement | Number of suppliers engaged in Valmet's Climate Program | 150 suppliers by the end of 2024 | 2022 | 0 suppliers | Not applicable | In 2024, 181 new suppliers were engaged in Valmet’s Climate Program. A total of 271 suppliers have been engaged since 2022, exceeding the target for 2024. | Code of Conduct, Supplier Code of Conduct
GHG emissions from downstream value chain | Valmet’s technologies and solutions | Technologies using fossil-free energy sources | Use of fossil- free energy sources possible for all of Valmet's Pulp, Paper, and Energy technologies and solutions by 2030 | 2019 | Use of fossil- free energy sources not possible for all of Valmet's Pulp, Paper, and Energy technologies and solutions in 2019 | 95% of Scope 3 | Valmet’s technologies enable fossil- free board, tissue, and paper production for customers with access to fossil-free energy sources. Valmet’s biomass-based energy solutions have long enabled fossil- free heat and power production. Furthermore, many customers’ chemical pulp mills using Valmet’s technologies are bioenergy self- sufficient. | Code of Conduct; Health, Safety and Environment Policy; Guidelines for sustainable and responsible research, product develop- ment and design

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Targets related to energy

Related material impact in brief | Decarboni- zation lever | KPI and scope | Target | Base year | Base year value | Share of respective scope covered by target | Progress towards target in 2024 | Related policy
Energy consumption in own operations | Energy efficiency | Reduction of energy consumption in own operations (%) | -10% by 2030 | 2019 | 457,284 MWh | Not applicable | Since the base year, energy consumption in Valmet’s own operations has reduced by 7%. In 2024, 15 significant energy- efficiency improvements were implemented in 11 locations. Energy efficiency improvement actions in Valmet facilities included machinery replacements; maintenance, renovation and repair; upgraded heating and ventilation systems including heat recovery; switches to energy efficient lighting; and process optimization. | Code of Conduct; Health, Safety and Environment Policy
Energy consumption in downstream value chain | Energy efficiency of technologies | Reduction of energy use intensity in Valmet's technologies (%) | -20% by 2030 | 2019 | 0% | Not applicable | Valmet measures energy efficiency (kWh/ton or GJ/air dried ton) in pulp, paper, board and tissue technologies. In 2024, the average reduction in these technologies was -10% compared to the 2019 baseline. | Code of Conduct, Health, Safety and Environment Policy, Guidelines for sustainable and responsible research, product development and design in Valmet

The targets listed in the table above address the objectives of the
Valmet’s Code of Conduct; the Health, Safety and Environment
(HSE) Policy; and the Supplier Code of Conduct to mitigate climate
change. The targets are part of Valmet’s Climate Program and have
been set to manage climate-related impacts, risks, and opportunities.
Internal stakeholders, including key experts and management from
relevant functions and business lines were included in the target-
setting process. Emissions reduction targets have been set to
mitigate the negative impacts of energy consumption in Valmet’s
own operations and the value chain. In addition, the Climate
Program targets to offer customers energy-efficient technologies
using fossil-free energy sources were set to mitigate the regulatory
transition risk, as well as to contribute to realizing the related
opportunities in developing Valmet’s technologies. The ta rgets are
absolute targets except for the downstream energy reduction target
which is a relative target.
In the overall combined Scope 1 and 2 emission reduction target,
Scope 1 represents 16 percent of the overall target, while Scope 2
represents 84 percent. The scopes’ boundaries are consistent with
the GHG inventory described in E1-6. Carbon removals, carbon
credits, and avoided emissions are not included in achieving the
emission reduction targets.
The emission reduction targets for Scopes 1, 2, and 3 are aligned
with the Paris Agreement’s 1.5-degree pathway and have been
validated by the Science Based Targets initiative. The targets were set
using an absolute contraction approach (ACA) using the Science-
based Target Setting Tool v1.2.1. and a 1.5-degree scenario. The
Sectoral Decarbonization Approach (SDA) was not used. The targets
were set during 2020-2021 and 2019 was chosen as the base year as
2020 operations were affected by the COVID-19 pandemic and were
not considered representative. The Scope 1 and 2 target was set
using a cross-sector (ACA) reductions pathway, with 2019 as the
base year and the following reference targets for the pathway: -46
percent by 2030; and -100 percent by 2043. Activities contributing to
Scope 1 and 2 emissions remain relatively stable, and the base year
value can be considered representative.
The critical assumptions used for setting the targets included the
increasing availability of carbon-free energy, especially in Asia and
North America, which impacts emissions from Valmet’s own
operations and value chain. The IEA Scenario for current policies
(STEPS) power sector emission intensity reduction (CAGR) was
utilized in projecting electricity and steam lifetime emissions. It was
assumed net sales would grow at a steady annual rate.
Valmet has identified its main decarbonization levers and estimated
their potential impact in reducing GHG emissions for Valmet’s own
operations and its value chain, presented in the tables below.
Climate scenario analysis was used to identify decarbonization levers
and related dependencies. The main dependencies include the global
transition away from fossil fuels in the steel, logistics, and energy
industries, as well as regulatory changes and carbon pricing
mechanisms which enable a just global transition to a carbon
neutral economy.
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The Climate Program Steering team is responsible for monitoring
implementation of the Climate Program. In 2024, the Steering team
was chaired by the Senior Vice President of Marketing,
Communications, Sustainability and Corporate Relations, who
reported to the President and Chief Executive Officer and was a
member of the Executive Team.

Own operations: Scope 1 and 2 |  | Base year | 2025 target | 2030 target
| GHG emissions (1,000 tCO 2 e) | 130 | 78 | 26
Decarbonization lever | Carbon-free and low-carbon energy | — | -45.5 | -91
Energy efficiency | — | -6.5 | -13

Value chain: Upstream Scope 3 |  | Base year |  | 2030 target
| GHG emissions (1,000 tCO 2 e) | 1,600 |  | 1,300
Decarbonization lever | Supplier engagement | — |  | -170
Recycled raw materials | — |  | -100
Logistics | — |  | -30

Value chain: Downstream Scope 3 |  | Base year |  | 2030 target
| GHG emissions (1,000 tCO 2 e) | 48,700 |  | 19,500
Decarbonization lever | Valmet’s technologies and solutions | — |  | -28,100
Energy efficiency of technologies | — |  | -1,100

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E1-5: En ergy consumption and mix

Energy consumption and mix | 2024
(1) Fuel consumption from coal and coal products (MWh) | 0
(2) Fuel consumption from crude oil and petroleum products (MWh) | 4,109
(3) Fuel consumption from natural gas (MWh) | 80,992
(4) Fuel consumption from other fossil sources (MWh) | 11,985
(5) Consumption of purchased or acquired electricity, heat, steam and cooling from fossil sources (MWh) | 116,100
(6) Total fossil energy consumption (MWh) (calculated as the sum of lines 1 to 5) | 213,186
Share of fossil sources in total energy consumption (%) | 50%
(7) Consumption from nuclear sources (MWh) | 128,585
Share of consumption from nuclear sources in total energy consumption (%) | 30%
(8) Fuel consumption from renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) (MWh) | 2,092
(9) Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh) | 81,963
(10) The consumption of self-generated non-fuel renewable energy (MWh) | 155
(11) Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to 10) | 84,210
Share of renewable sources in total energy consumption (%) | 20%
Total energy consumption (MWh) (calculated as the sum of lines 6, 7 and 11) | 425,981

Energy production | 2024
Non-renewable energy production (MWh) | 900
Renewable energy production (MWh) | 424
Total energy production (MWh) | 1,324

Valmet’s energy consumption data includes fuel use and purchased
electricity, heat, and steam from all locations with production
operations in 22 countries. These locations include six foundries,
seven fabrics production units, 32 service workshops, six research
and development pilot facilities, 10 supply centers, and 36 assembly
and manufacturing units, as well as the associated office facilities at
the locations. Electricity consumption at other office locations is
estimated based on an average consumption per employee resulting
in one percent of total energy consumption. Valmet produces solar
electricity at its Bologna, Italy facility and district heat at its research
and development center in Tampere, Finland.
Energy data is collected monthly in an environmental reporting
system based on local invoice, measurement, and consumption
records. In locations where the source of electricity or district heat is
unknown, the consumption is reported under fossil sources. Energy
data for December is estimated based on the previous year’s data.
All Valmet's operations are reported under high climate impact
sector Manufacturing (NACE C).

Energy intensity per net revenue 1 | 2024
Total energy consumption from activities in high climate impact sectors per net revenue from activities in high climate impact sectors (MWh/EUR million) | 79.5

1 Net revenue: Net Sales in Consolidated financial statements, note 3. Revenue
recognition
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E1-6: Gross Scopes 1, 2, 3 and Total GHG emissions

| Retrospective | Milestones and target years
| Base year 2019 | 2024 | 2025 | Target year 2030 | Annual % target / Base year
Scope 1 GHG emissions
Gross Scope 1 GHG emissions (tCO 2 e) | 21,522 | 20,395 | — | 8,609 | 7.0%
Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%) | 0.0% | 0.0% | — | 0.0% |
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions (tCO 2 e) | — | 74,812 | — | — |
Gross market-based Scope 2 GHG emissions (tCO 2 e) | 108,939 | 45,923 | — | 2,179 | 11.0%
Significant Scope 3 GHG emissions
Total Gross indirect (Scope 3) GHG emissions (tCO 2 e) | 50,349,000 | 39,559,000 | — | 20,815,000 |
1 Purchased goods and services | 1,441,000 | 1,462,000 | — | 1,153,000 | 1.8%
4 Upstream transportation and distribution | 161,000 | 144,000 | — | 129,000 | 1.8%
6 Business travel | 47,000 | 53,000 | — | 33,000 | 2.7%
11 Use of sold products | 48,700,000 | 37,900,000 | — | 19,500,000 | 5.5%
Total GHG emissions
Total GHG emissions (location-based) (tCO 2 e) | — | 39,654,207 | — | — |
Total GHG emissions (market-based) (tCO 2 e) | 50,479,461 | 39,625,318 | — | 20,825,788 |

Valmet’s GHG inventory is prepared in accordance with the GHG
Protocol Corporate Standard (Version 2004) and GHG Protocol
Corporate Value Chain (Scope 3) Accounting and Reporting
Standard (Version 2011). The GHG inventory is prepared as
described under ESRS Basis for preparation (BP) 1 and 2 and IRO-1,
under paragraphs concerning 'Scoping of the assessment'. All
subsidiaries are included in the GHG inventory. Valmet does not
have operational control of its associated companies, and they are
not included in Valmet’s GHG inventory.

GHG intensity per net revenue 1 | 2024
Total GHG emissions (location-based) per net revenue (tCO 2 e / EUR million) | 7,399
Total GHG emissions (market-based) per net revenue (tCO 2 e / EUR million) | 7,394

1 Net revenue: Net Sales in Consolidated financial statements, Note 3. Revenue
recognition.
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Scope | Inclusion in GHG inventory | Information about methodology, assumptions, and emission factors or justification for exclusion from GHG inventory | % calculated using primary data obtained from value chain partners
Scope 1 | Included | Scope 1 GHG emissions are calculated using fuel consumption data based on invoice and consumption records and relevant GHG emission factors. The emission factors are from "UK Government GHG Conversion Factors for Company Reporting" - Department for Environment, Food & Rural affairs (Defra) 2024. Supplier-specific GHG emission factors based on contractual instruments are applied to biofuel consumption in Sundsvall, Sweden. In 2024, the biogenic CO 2 emissions from the combustion of biomass were 18 tCO 2. | Not applicable
Scope 2 | Included | Scope 2 GHG emissions are calculated as CO 2 equivalents using electricity, district heat, and steam data based on local invoice, measurement, and consumption records. Emissions from office locations with no production are estimated based on electricity consumption per employee. For all locations except those in the United States, Scope 2 location-based GHG emissions are calculated with GHG emission factors from International Energy Agency (IEA) (2023). For locations in the United States, Scope 2 location-based GHG emissions are calculated with regional GHG emission factors from United States Environmental Protection Agency (eGRID 2022). Scope 2 market-based GHG emissions are calculated with GHG emission factors as follows: Contract-based GHG emission factors are applied for carbon-free electricity purchased with guarantees of origin (GO) in Sweden and Finland. Supplier-specific GHG emission factors are applied for documented renewable or carbon-free electricity and district heat in Brazil, Canada, China, Finland, France, Germany, Italy, Poland, Sweden, and the USA. Additionally, regional GHG emission factors from the following sources are applied: European Residual Mixes (Association of Issuing Bodies) for electricity and steam in Europe (2023); International Energy Agency (IEA) (2023) for district heat in Europe; Brazilian Science, Technology and Innovation Ministry for Brazil; Chile Ministry of Energy for Chile; China Ministry of Ecology and Environment for China (excluding Shanghai area); China Shanghai Ecological Environment Bureau for China Shanghai area; United States Environmental Protection Agency (eGRID 2022) for United States; International Energy Agency (IEA) (2023) for India, Indonesia, Saudi Arabia, Singapore, South Africa, South Korea and Thailand. For CH 4 and N 2 O, GHG emission factors from International Energy Agency (IEA) (2023) are applied. In 2024, Valmet made electricity and district heat purchases with contractual instruments such as Guarantees of Origin and contracts with suppliers (65%). The GHG emission factors applied in Scope 2 calculations do not separate the percentage of biomass or biogenic CO 2. | Not applicable
Scope 3 by Category |  |  |
1 Purchased goods and services | Included | GHG emissions are estimated using the spend-based method based on the monetary value of purchased goods and services by purchase category and supplier country. The emission flows are calculated based on environmentally extended input-output analysis and emission factors from Exiobase (3.8.2). The data includes direct purchase order spend on raw materials, casting and forging, fabrication and machining, components, electronics, and business services. For undefined spend data, Valmet’s average emission factor is applied. Purchase order spend data is based on Valmet's internal data systems. Spend data for December is estimated based on the previous year's data. The spend-based emissions calculation is an estimation with inherent uncertainty and used with the intent to indicate the scale of the category. | 0%
2 Capital goods | Excluded | Valmet’s spend-based emissions from capital goods in 2023 were 0.1 percent of total emissions, so the category is not significant and is excluded. | -
3 Fuel- and energy- related Activities (not included in Scope 1 or 2) | Excluded | GHG emissions from fuel- and energy-related activities have been calculated based on the breakdown of Valmet’s energy consumption by country and source. DEFRA emission factors have been utilized. The calculated emissions cover the same sources of energy as Scope 1 and 2 calculations. Valmet’s emissions from fuel- and energy-related activities in 2023 were estimated to be 0.02 percent of total emissions, so the category is not significant and is excluded. | -
4 Upstream transportation and distribution | Included | GHG emissions from upstream transportation and distribution are based on suppliers’ emission reports, and when unavailable, the monetary value of purchased transportation services following the same spend-based calculation methodology as for Category 1. Spend data for December is estimated based on the previous year's data. In 2024, suppliers’ emission reports covered 39 percent of reported emissions. The calculated transportation modes include air, rail, sea, and road transportation. | 39%
5 Waste generated in operations | Excluded | Valmet’s emissions from waste generated in operations in 2023 were estimated to be 0.0004 percent of total emissions, so the category is not significant and is excluded. | -
6 Business travel | Included | GHG emissions from business travel are based on emission, mileage, and spend data from travel agencies and internal systems. Travel agencies’ emission reports covered around 47 percent of reported emissions in 2024. The calculation includes air and rail travel, travel by rental cars, compensated mileages, and hotel nights. The data covered 99 percent of Valmet’s global workforce in 2024. | 47%
7 Employee commuting | Excluded | Valmet’s emissions from employee commuting in 2023 were estimated to be 0.1 percent of total emissions, so the category is not significant and is excluded. | -
8 Upstream leased assets | Excluded | Valmet’s emissions from upstream leased assets in 2023 were estimated to be 0.1 percent of total emissions, so the category is not significant and is excluded. | -
9 Downstream transportation | Excluded | Valmet’s emissions from downstream transportation in 2023 were estimated to be 0.03 percent of total emissions, so the category is not significant and is excluded. | -
10 Processing of sold products | Excluded | Valmet does not sell intermediate products to downstream companies, so the category is excluded. | -

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Scope | Inclusion in GHG inventory | Information about methodology, assumptions, and emission factors or justification for exclusion from GHG inventory | % calculated using primary data obtained from value chain partners
11 Use of sold products | Included | GHG emissions from the use of products sold in the reporting year includes Valmet’s Paper and Pulp and Energy business lines. For the purposes of estimating use of sold products emissions, Valmet uses orders received as an indicator for defining sold products in 2024. The calculation method based on orders received is aligned with Valmet’s previously reported emissions information on the use of sold products. In practice this means product lifetime emissions (25 future years) are reported in the year when the order has been received and most often not in the year of the delivery and start-up of the technology. Delivery times vary and can be up to around 3 years for large orders. For the Paper business line, the calculation includes major paper, board, and tissue machine orders received and excludes basic machine unit assembly groups and smaller equipment deliveries. For the Pulp and Energy business line, the calculation includes pulp mill, lime kiln and fluidized bed boiler orders received. Sold products from Valmet’s Automation Systems and Flow Control business lines are excluded from the calculation, because their impact on the total use phase emissions is estimated to be insignificant (below 0.2 percent). The Services business line is excluded, as it is assumed services and spare parts do not consume energy or cause emissions during the use phase. The assumed lifetime for all sold products is 25 years. The emission calculations are based on Valmet’s average product-specific energy consumption and product specifications, including delivered capacity and intended fuel mix. N 2 O and CH 4 are included from the biomass combustion of pulp and energy production. Emissions from electricity are calculated based on the IEA (2020) country-specific emission factors. Emissions from steam are calculated based on Fisher International installed base fuel mix data. Emission factors for fuels are based on IPCC, DEFRA, and Statistics Finland. The IEA Scenario for current policies (STEPS) power sector emission intensity reduction (CAGR) is utilized in projecting the lifetime emissions for electricity and steam. The annual fossil emissions of the sold products were around 1,800,000 tCO 2 e, whereas biogenic emissions were around 8,300,000 tCO2 in 2024. The calculation is an estimation based on assumptions and projections, and actual emissions will depend on the choices customers make during the lifetime of the technologies. Due to the long lifetimes of Valmet’s technologies (average 25 years) included in the annual use phase calculation, the magnitude of the category in relation to other categories of emissions is considerable. | 0%
12 End-of-life treatment of sold products | Excluded | Valmet’s products consist almost entirely of steel. It is assumed that customers recycle all materials, including steel, at the technologies’ end-of-life in 25 years. To avoid double counting, the recycled content method is used to calculate GHG emissions. Emissions from recycling materials are therefore included in the emission factors of recycled materials in Category 1. The emission factor for recycling materials at end of life is 0, and the related emissions are 0. The category is not significant and is excluded. | -
13 Downstream leased assets | Excluded | Valmet has no downstream leased assets, so the category is excluded. | -
14 Franchises | Excluded | Valmet has no franchises, so the category is excluded. | -
15 Investments | Excluded | Valmet's emissions from investments in 2023 were estimated to be 0.01 percent of total emissions, so the category is not significant and is excluded. | -

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E2: Pollution
Impacts, risks and opportunity management
ESRS 2 IRO-1: Description of the processes to
identify and assess material pollution-related
impacts, risks and opportunities
This information is disclosed under ESRS 2 IRO-1.
E2-1 MDR-P: Policies related to pollution in
value chain
Valmet has adopted the Valmet Health, Safety, and Environment
(HSE) Policy and Valmet Supplier Code of Conduct, and Valmet
Guidelines for Sustainable and Responsible Research, Product
Development, and Design to manage the following material impacts
and opportunities related to pollution of air and water in the
value chain.
Impacts and opportunities related to pollution of air in the
value chain:
• Valmet’s upstream value chain includes the manufacture of
components, which contributes to environmental impacts such as
air pollution, including particulate matter and volatile organic
compounds (actual negative impact)
• While using Valmet’s process technologies and automation in the
pulp, paper, energy, and other process industries, customers
generate air emissions such as particulate matter, hazardous air
pollutants, nitrogen oxides, sulfur oxides, carbon monoxide, and
volatile organic compounds that require emission control (actual
negative impact)
• Customers increasingly need to reduce air emissions, which
creates a business opportunity for Valmet’s air emission control
solutions in the short and medium term (opportunity).
Impacts and opportunities related to pollution of water in the
value chain:
• While using Valmet’s process technologies and automation in the
pulp, paper, energy, and other process industries, customers
generate water emissions such as biological and chemical
demands (BOD and COD) and other pollutants that require
wastewater treatment (actual negative impact)
• Customers increasingly need to reduce water effluent, which
creates a business opportunity for Valmet’s wastewater control
solutions in the short and medium terms (opportunity).
Valmet Health, Safety and Environment (HSE) Policy
The Health, Safety, and Environment (HSE) Policy defines Valmet’s
commitments to constantly reduce the climate, biodiversity, and
water impacts of our value chain through efficient and circular use
of resources, use of carbon-free energy, waste minimization, and
pollution prevention. In addition, the policy emphasizes sustainable
design principles and the supply of products, services, and solutions
that enable our customers to improve their energy, environmental,
and safety performance. The content and requirements set in the
Policy are described in more detail in section S1-1.
Valmet Supplier Code of Conduct
The Supplier Code of Conduct defines the sustainability principles
that suppliers must comply with. The requirements mandate that
suppliers establish an appropriate organizational structure or
resources for effective management of environmental risks and
impacts. This includes preventing pollution and environmental
incidents, maintaining emergency action plans to manage
environmental accidents and minimize their consequences, and
striving to continually reduce emissions to air and water. Suppliers
shall put in place effective control measures and targets to mitigate
these risks and reduce negative impacts. The content and
requirements of the Supplier Code of Conduct are described in more
detail in section S2-1.
Valmet's Sustainable Supply Chain policy was renewed in 2024 and
the renewed policy is called Supplier Code of Conduct.
Valmet Guidelines for Sustainable and Responsible
Research, Product Development and Design
Valmet Guidelines for Sustainable and Responsible Research,
Product Development, and Design integrate sustainability,
environmental and health and safety aspects into Valmet’s product
research and development process. The aim is to ensure Valmet
designs solutions that meet sustainability objectives, including the
elimination and minimization of emissions to water and air, set
quantitative performance targets for emission reduction, and
comply with already applicable and anticipated upcoming regulatory
developments related to emission control. The content and
requirements set in the guidelines are described in more detail in
section E5-1.
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E2-2 MDR-A: Actions and resources related to pollution

Material sustainability topic | Related material impacts in brief | Actions | Expected outcome | Scope | Time horizon | Related target
Pollution of air and water in value chain | Valmet’s upstream value chain contributes to environmental impacts such as air emissions | Commit suppliers to Valmet’s Sustainable Supply Chain policy, which addresses pollution prevention | Pollution prevention in suppliers' operations | Upstream and downstream value chain | 2024, continuous | 95% of suppliers by spend have signed Valmet’s Sustainable Supply Chain Policy by 2025
The use phase of Valmet’s process technologies and automation generate air emissions that require emission control in the downstream value chain | Continuous development of air emissions control technologies | Reduced air emissions, heat recovery and improved energy efficiency in the customers' processes | Own operations | 2024, continuous | Air emission control technology: 7.5% growth (over the cycle) of orders received by 2025

The actions listed in the table above address the material impacts
related to pollution of air and water in the value chain. The actions
address the objectives of the
Supplier Code of Conduct, and the Valmet Guidelines for
Sustainable and Responsible Research, Product Development,
and Design.
Metrics and targets
E2-3 MDR-T: Targets related to pollution

Material sustainability topic | Related material impact in brief | Targets | Key performance indicator | Base year | Base- line | Scope | Progress in 2024 | Target monitoring | Relevant policy
Pollution of air and water in value chain | Valmet’s upstream value chain contributes to environmental impacts such as air emissions | 95% of suppliers by spend have signed Valmet’s Sustainable Supply Chain policy by 2025, which addresses, inter alia, pollution prevention | % of suppliers by spend who have signed Valmet's Sustainable Supply Chain policy | 2022 | 82% | Upstream value chain | By the end of 2024, 94.3% of our existing suppliers had signed the policy | Monthly in Supply Chain management team | Supplier Code of Conduct (previously Sustainable Supply Chain policy)
The use phase of Valmet’s process technologies and automation generate air emissions that require emission control in the downstream value chain | Air emission control technology: 7.5% growth (over the cycle) of orders received by 2025 | Rolling 4-year compounded annual growth (CAGR) of orders received | 2024 | 1.8% | Own operations | Growth achieved despite challenging market conditions | Annually in Pulp and Energy business line management team | Valmet Guidelines for Sustainable and Responsible Research, Product Development and Design

Valmet has set the voluntary targets listed in the table above to
reduce negative impacts related to pollution of air and water in the
upstream and downstream value chain. The targets address the
objectives of the Supplier Code of Conduct and the Valmet
Guidelines for Sustainable and Responsible Research, Product
Development and Design.
The target related to the Sustainable Supply Chain policy is part of
Valmet’s Sustainability360° Agenda implementation and is being
executed jointly by Valmet’s Supply Chain and Sustainability
functions. The targets were set as part of a materiality assessment
process which included, for example, an analysis of the business
environment, benchmarks, market trends, future regulatory
requirements, and engagement with relevant stakeholders, including
employees and experts. Internal stakeholders, including key experts
and management from relevant functions and business lines, were
included in the target-setting process.
The target related to air emission control technology was set by the
Pulp and Energy business line management. The target progress is
monitored at least annually in the Pulp and Energy business line
management team. The target is based on conclusive measurable
scientific evidence and related to prevention and control of air
pollutants and respective specific loads.
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E3: Water and marine resources
Impacts, risks and opportunity management
ESRS 2 IRO-1: Description of the processes to
identify and assess material water and marine
resources -related impacts, risks and opportunities
This information is disclosed under ESRS 2 IRO-1.
E3-1 MDR-P: Policies related to water and marine
resources in value chain
Valmet has adopted the Valmet Health, Safety, and Environment
(HSE) Policy, Valmet Supplier Code of Conduct, and Valmet
Guidelines for Sustainable and Responsible Research, Product
Development and Design to manage the following material impacts
and opportunities related to water consumption in the value chain:
• Valmet’s upstream value chain includes water consuming
processes such as steel manufacturing (actual negative impact)
• Valmet’s customers in the pulp, paper, tissue, and board
industries operate water-intensive process technologies (actual
negative impact)
• Increasing customer demand for solutions that improve water
management efficiency and closed loop water systems is a
business opportunity for Valmet (opportunity).
Valmet Health, Safety and Environment (HSE) Policy
The Health, Safety, and Environment (HSE) Policy defines Valmet’s
commitments to constantly reduce the climate, biodiversity, and
water impacts of our value chain through efficient and circular use
of resources, use of carbon-free energy, waste minimization, and
pollution prevention. In addition, the policy emphasizes sustainable
design principles and the supply of products, services and solutions
that enable Valmet’s customers to improve their energy,
environmental and safety performance. The content and
requirements set in the policy are described in more detail in
section S1-1.
Valmet Supplier Code of Conduct
The Supplier Code of Conduct defines the sustainability principles
that suppliers must comply with. The requirements mandate that
suppliers establish an appropriate organizational structure or
resources for effective management of environmental risks and
impacts, i ncluding the degradation of water ecosystems. This
includes preventing pollution and environmental incidents and
striving to continually reduce emissions to water. Suppliers must put
in place effective control measures and targets to mitigate these risks
and reduce negative impacts. In addition, the supplier must track
and document relevant data and statistics on continuous
improvement of water consumption. The content and requirements
set in the Supplier Code of Conduct are described in more detail in
section S2-1. Valmet's Sustainable Supply Chain Policy was renewed
in 2024 and the renewed policy is called Supplier Code of Conduct.
Valmet Guidelines for Sustainable and Responsible
Research, Product Development and Design
Valmet Guidelines for Sustainable and Responsible Research,
Product Development, and Design integrate health, safety and
environment aspects into Valmet’s product research and
development process. The aim is to ensure Valmet designs solutions
that meet sustainability objectives, including minimizing water
consumption and using water efficiently. The guidelines aim to
ensure that designed solutions meet set quantitative performance
targets for water consumption and efficiency and comply with both
current and anticipated regulatory developments related to water
protection. The content and requirements set in the guidelines are
described in more detail in section E5-1.
Valmet's policies contain commitments to reduce water
consumption in the upstream and downstream value chain,
including both areas at water risk and other areas.
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E3-2 MDR-A: Actions and resources related to water and marine resources

Material sustainability topic | Related material impact in brief | Actions | Expected outcome | Scope | Time horizon | Related target
Water consumption in the value chain | Valmet’s upstream value chain includes water consuming processes such as steel manufacturing | Commit suppliers to Valmet’s Supplier Code of Conduct, which addresses efficient use of water | Improved water management and efficiency in supplier' processes | Upstream value chain | 2024, continuous | 95% of suppliers by spend have signed Valmet’s Sustainable Supply Chain Policy
Valmet’s downstream value chain includes water- intensive process technologies. | Beyond circularity research and development program and ecosystem: Closed water loops substream | Improved concepts and processes on water consumption, recovery and optimization | Own operations and downstream value chain | 2022-2025 | Development of water management concepts
Continuous development of board and tissue technologies to reduce and optimize fresh water consumption | Reduced and optimized fresh water consumption in customers' processes | Own operations and downstream value chain | 2024, continuous | Reduction of fresh water consumption in recycled board mills: -70% by 2030. Reduction of fresh water consumption in tissue technology: -70% by 2030.

The actions listed in the table above address the material impacts
related to water consumption in the value chain. The actions address
the objectives of the Valmet Supplier Code of Conduct, and Valmet
Guidelines for Sustainable and Responsible Research, Product
Development and Design.
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Metrics and targets
E3-3 MDR-T: Targets related to water and marine resources

Material sustainability topic | Related material impact | Targets | Key performance indicator | Base year | Base line | Scope | Progress in 2024 | Target monitoring | Relevant policy
Water consumption in the value chain | Valmet’s upstream value chain includes water consuming processes such as steel manu facturing | 95% of suppliers by spend have signed Valmet's Sustainable Supply Chain Policy by 2025, which, inter alia, addresses efficient use of water | % of suppliers by spend have signed Valmet’s Sustainable Supply Chain Policy | 2022 | 82% | Upstream and downstre am value chain | By the end of 2024, 94.3% of our existing suppliers had signed the policy | Monthly in Supply Chain management team | Sustainable Supply Chain policy
Valmet’s downstream value chain includes water- intensive process technologies | Reduction of fresh water consumption in recycled board mills: -70% by 2030 | Reduction in fresh water consumption intensity (m 3/t) | 2022 | 0% | Paper Business line - Board | Target towards year 2030 for reduction of fresh water consumption in recycled board mills was set at -70 % in 2024. Technology development actions on reducing fresh water consumption continued actively in 2024, although reduction in fresh water use remained at 0% compared to 2022 baseline. | Annually in Valmet’s Research and Development management team | Valmet Guidelines for Sustainable and Responsible Research, Product Development and Design
Reduction of fresh water consumption in tissue technology : -70% by 2030 | Reduction in fresh water consumption intensity (m 3/t) | 2019 | 0% | Paper Business line - Tissue | Target towards year 2030 for reduction of fresh water consumption in Tissue technology was set at -70% in 2024. Technology development actions on reducing fresh water consumption continued actively in 2024. Fresh water use has reduced 39% compared to 2019 baseline. | Annually in Valmet’s Research and Development management team | Valmet Guidelines for Sustainable and Responsible Research, Product Development and Design

Valmet has set the voluntary targets listed in the table above to
reduce negative impacts related to water consumption in the value
chain. The absolute supply chain related target and the relative
process technology related targets address the objectives of the
Valmet Supplier Sustainable Supply Chain policy and Valmet
Guidelines for Sustainable and Responsible Research, Product
Development and Design.
The target related to the Sustainable Supply Chain policy is part of
Valmet’s Sustainability360° Agenda implementation and is being
executed jointly by Valmet’s Supply Chain and Sustainability
functions. The targets of Valmet’s Sustainability360° Agenda were
set as part of a materiality assessment process which included an
analysis of the business environment, benchmarks market drivers,
future regulatory requirements, and engagement with relevant
stakeholders and experts. Internal stakeholders, including key
experts and management from relevant functions and business lines,
were included in the target-setting process.
Valmet's targets to reduce water consumption in the downstream
value chain impact both areas at water risk and other areas. The
targets are based on conclusive measurable scientific evidence.
Valmet’s Research and Development management team sets the
technology specific targets and follows up progress annually at
minimum. Targets are set together with key technology experts and
management from business lines and relevant functions. The targets
follow water use intensity in Valmet's key technologies and in terms
of significant assumptions, this target setting is based on best
available technology.
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E4: Biodiversity and ecosystem s
Strategy
E4-1: Transition plan and consideration of
biodiversity and ecosystems in strategy and
business model
Inform ation about the consideration of biodiversity and ecosystems
in the strategy and business model is disclosed under ESRS 2 SBM-3.
Valmet’s E1 Climate change and E2 Pollution impacts are direct
drivers of biodiversity loss and degradation and are material impacts
in Valmet’s value chain. Climate and biodiversity are intrinsically
linked. Climate change impacts such as droughts, wildfires, and
flooding accelerate biodiversity impacts, and loss of nature is in turn
a key driver of climate change.
Valmet is currently developing its transition plan to ensure the
alignment of its business model and strategy with the Kunming-
Montreal Global Biodiversity Framework. A working group was
established in 2024 to explore how the Valmet Climate Program
described in E1-1 could evolve into a Climate and Nature Program
that manages climate-nature synergies and trade-offs.
ESRS 2 SBM-3: Material impacts, risks and
opportunities related to biodiversity
This information is disclosed under ESRS 2 SBM-3.
Impact, risk and opportunity management
ESRS 2 IRO-1: Description of processes to identify
and assess material biodiversity and ecosystem-
related impacts, risks and opportunities
This information is disclosed under ESRS 2 IRO-1.
E4-2 MDR-P: Policies related to biodiversity and
ecosystems
Valmet has adopted the Valmet’s Code of Conduct; the Valmet
Health, Safety, and Environment (HSE) Policy; and the Valmet
Supplier Code of Conduct to manage the following material impacts
related to biodiversity in the value chain:
• Valmet's own operations and upstream and downstream value
chain contribute to climate change, which is a direct driver of
biodiversity loss (actual negative impact).
• Valmet's upstream and downstream value chain contribute to air
and water pollution, which is a direct driver of biodiversity loss
(actual negative impact).
Valmet has not adopted a sustainable land or agriculture policy,
sustainable oceans policy, deforestation policy, or an ecosystem
protection policy covering operational sites owned, leased, or
managed in or near biodiversity-sensitive areas. Valmet is currently
preparing a Climate and Nature Policy Statement that is expected to
be finalized during 2025.
Valmet’s Code of Conduct
Valmet’s Code of Conduct defines Valmet’s requirements and
expectations in terms of commitment to international conventions
and guidelines, laws and regulations, climate and circularity in
products and services, the environmental efficiency of Valmet’s own
operations, and a sustainable supply chain, for example. The content
and requirements set in the Code of Conduct are described in more
detail in section G1-1.
Valmet Health, Safety and Environment (HSE) Policy
The Health, Safety and Environment (HSE) Policy defines Valmet’s
approach to reducing the climate, biodiversity, and water impacts of
our value chain through the efficient and circular use of resources,
the use of carbon-free energy, waste minimization, and pollution
prevention. The content and requirements set in the policy are
described in more detail in section S1-1.
Valmet Supplier Code of Conduct
The Supplier Code of Conduct defines sustainability principles with
which suppliers are required to comply. The Supplier Code of
Conduct requires suppliers to establish an appropriate
organizational structure or resources for effective management of
climate and environmental risks and impacts, including but not
limited to air pollution, climate change, pollution and degradation
of land, water ecosystems, deforestation, and biodiversity loss.
Suppliers must put in place effective control measures and targets to
mitigate risks and reduce such impacts. In addition, suppliers must
be prepared to identify the sources of materials and to show the
tracking of the supply chain. The content and requirements set in
the Supplier Code of Conduct are described in more detail in section
S2-1.
Valmet's Sustainable Supply Chain policy was renewed in 2024 and
the renewed policy is called Supplier Code of Conduct.
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E4-3 MDR-A: Actions related to biodiversity and ecosystems

Material sustainability topic | Related material impact in brief | Actions | Expected outcome | Scope | Time horizon | Resources to manage | Related target if applicable
Direct impact drivers of biodiversity loss | Valmet's own operations and upstream and downstream value chains contribute to climate change and pollution, which are drivers of biodiversity loss | Initial Group biodiversity assessment | Prioritization of future biodiversity actions and understanding the current biodiversity impacts | Own operations and upstream and downstream value chain | 2024 | Sustainability, Health, Safety and Environment, Supply chain, Research and Development | Climate and Nature Program with targets and action plans by 2026
Preparing Valmet’s Climate and Nature Policy Statement | Climate and Nature Policy Statement | Own operations and upstream and downstream value chain | 2024–2025 | Sustainability, Health, Safety and Environment, Supply Chain, Research and Development | Climate and Nature Policy Statement during 2025

The actions listed in the table address the material impacts related to
biodiversity and ecosystems. In 2024, Valmet started to prepare its
Climate and Nature Policy Statement and plan the evolution of its
Climate Program described in E1-1 into a Climate and Nature
Program with an expectation to be finalized during 2025. In the
process of preparing the updated program, Valmet will decide on
the use of biodiversity offsets and aims to incorporate local and
indigenous knowledge and nature-based solutions into biodiversity
and ecosystems-related actions.
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Metrics and targets
E4-4 MDR-T: Targets related to biodiversity

Material sustainability topic | Related material impact in brief | Targets | Key performance indicator | Base year | Baseline | Scope | Progress in 2024 | Relevant policy
Direct impact drivers of biodiversity loss | Valmet's own operations and upstream and downstream value chains contribute to climate change and pollution, which are drivers of biodiversity loss | Climate and Nature Policy Statement during 2025 | Policy Statement published and nature aspect embedded in due diligence | 2024 | Not applicable | Own operations and upstream and downstream value chain | Climate and Nature Policy Statement under preparation | New Climate and Nature Policy Statement in 2025 Health, Safety and Environment policy
Climate and Nature Program with targets and action plans by 2026 | Climate and Nature Program published and implemented | 2024 | Not applicable | Own operations and upstream and downstream value chain | Nature work initiated in cross- functional working group | New Climate and Nature Policy Statement in 2025 Health, Safety and Environment policy
Training for employees on Climate and Nature Program during 2025-2026 | % of targeted employees participated in training | 2024 | 0% | Own operations and upstream and downstream value chain | Nature work initiated in cross- functional working group | Health, Safety and Environment Policy

Valmet has set the targets listed in the table to reduce negative
impacts related to biodiversity and ecosystems. The targets address
the objectives of Valmet’s Code of Conduct, the Valmet Health,
Safety, and Environment (HSE) Policy, and the Supplier Code
of Conduct.
Valmet is preparing a new Climate and Nature Policy Statement to
guide its nature work in the value chain and own operations. The
targets have been set as a result of the initial biodiversity assessment
conducted in 2024. These targets support the process of preparing
the Climate and Nature Program and gathering an in-depth
understanding of Valmet’s biodiversity impacts. In addition, the
targets relate to internal and external capacity building and
awareness raising of biodiversity and can be allocated to the
avoidance layer of the biodiversity mitigation hierarchy.
Valmet will set new biodiversity and ecosystem-related targets as
part of its ongoing Climate and Nature Program work. Application
of ecological thresholds and alignment of the targets with the
Kunming-Montreal Global Biodiversity Framework will be
considered. Valmet will also consider its position on using
biodiversity off sets in its Climate and Nature Program. Internal
stakeholders, including key experts and management from the
Sustainability and Health, Safety and Environment functions, will be
included in the target-setting process.
The Climate Program Steering team is responsible for monitoring
the development and implementation of the Climate and Nature
Program. The Steering team is chaired by the Senior Vice President
of Marketing, Communications, Sustainability and Corporate
Relations, who reports to the President and Chief Executive Officer
and is a member of the Executive Team.
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E5: Resource use and circular economy
Impact, risk and opportunity management
ESRS 2 IRO-1: Description of the processes to
identify and assess material resource use and
circular economy-related impacts, risks and
opportunities
This information is reported under ESRS 2 IRO-1.
Metrics and targets
E5-1 MDR-P: Policies related to r esource use and
circular economy
Valmet has adopted Valmet’s Code of Conduct; the Valmet Health,
Safety, and Environment (HSE) Policy; the Valmet Supplier Code of
Conduct; and the Valmet Guidelines for Sustainable and
Responsible Research, Product Development and Design to manage
the following material impacts and opportunities related to resource
inflows and resource outflows:
Impacts related to resource inflows:
• The production of Valmet’s products requires large quantities of
materials. The most significant material categories are steel,
polymers, electronic components, and packaging materials (actual
negative impact in the value chain and Valmet’s own operations)
• Valmet decreases resource use by aiming to design modular and
lightweight products (actual positive impact in Valmet’s own
operations)
• Valmet uses recycled steel in its own foundries to reduce the
impact from virgin raw materials (actual positive impact in
Valmet’s own operations)
• Valmet delivers process technologies, which enable customers to
use and recover energy, water, and chemicals more efficiently or
minimize waste by using production side streams from other
applications, processes, or even industries. These technologies
positively contribute to the material inflows in the industries
Valmet services (actual positive impact in the value chain)
Impacts and opportunities related to resource outflows:
• Valmet's solutions and services enable extension of the lifetime of
technologies used by customers (actual positive impact in
downstream value chain)
• Valmet’s process technologies and automation enable the
conversion of renewable and recycled resources into solutions in
the pulp, paper, board, tissue, and energy industries and
renewable resource use in the energy and other process industries
(actual positive impact in downstream value chain)
• Valmet's solutions enable circularity for customers through
material recovery and conversion to same or other uses; longer
circulation cycles; reduced use of virgin materials; and cascaded
use across industries concerning process residuals (actual positive
impact in downstream value chain)
• Increasing demand for process technology and automation that
improve resource efficiency, and enable renewable resource use is
a significant business opportunity for Valmet (opportunity)
• Valmet's services enabling life cycle extension of installed
technology and automation is a significant business opportunity
for Valmet (opportunity).
Valmet’s Code of Conduct
Valmet’s Code of Conduct defines Valmet’s requirements and
expectations in terms of circularity in products and services, the
environmental efficiency of its own operations, and the sustainable
supply chain, for example. The Code of Conduct addresses the use
of renewable resources. According to the Code of Conduct, Valmet
promotes circularity in our operations and enables its customers to
apply circularity through longer circulation, closed cycles and the
use of renewable and recycled raw materials. The content and
requirements set in the Code of Conduct are described in more
detail in section G1-1.
Valmet Health, Safety and Environment (HSE) Policy
Among other topics, the Health, Safety, and Environment (HSE)
Policy includes Valmet’s commitment t o constantly reduce the
climate, biodiversity, and water impacts of the value chain through
efficient and circular use of resources, use of carbon-free energy,
waste minimization, and pollution prevention. In addition, the
policy emphasizes sustainable design principles and the supply of
products, services, and solutions that enable customers to improve
their energy, environmental, and safety performance. The content
and requirements set in the policy are described in more detail in
section S1-1.
Valmet Supplier Code of Conduct
The Supplier Code of Conduct defines sustainability principles with
which suppliers are required to comply. The Supplier Code of
Conduct requires suppliers to strive for the continuous development
of environmental performance and the reduction of emissions and
any negative impacts on the environment. Supplier shall put in place
effective control measures and targets to mitigate climate and
environmental risks and reduce such impacts, supported by actions
such as transitioning to renewable energy, energy efficiency
improvements, responsible management of natural resources,
responsible disposal of waste and circularity actions. In addition,
suppliers must be prepared to identify the sources of materials and
to show the tracking of the supply chain. The content and
requirements set in the Code of Conduct are described in more
detail in section S2-1.
Valmet's Sustainable Supply Chain policy was renewed in 2024 and
the renewed policy is called Supplier Code of Conduct.
Valmet Guidelines for Sustainable and Responsible
Research, Product Development and Design
Valmet Guidelines for Sustainable and Responsible Research,
Product Development and Design integrate sustainability,
environmental, and health and safety aspects into research, product
development, and design. They are part of Valmet’s research and
development process and provide a systematic way to anticipate
challenges and develop new solutions throughout the product or
service life cycle. The guidelines highlight efficient resource use and
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the principles of a circular economy throughout the product life
cycle. It encourages the minimization of raw material consumption,
the use of renewable resources, and the implementation of practices
such as repair, disassembly, remanufacturing, reuse, and recycling to
promote sustainability and reduce waste.
The monitoring of this guideline is conducted through gate reviews
within the Valmet research and development process; project
monitoring within the research and development project portfolio
tool; annual follow up of research and development portfolio
development; and monthly, quarterly and/or annual reporting
practices at business line and corporate level. The Senior Vice
President of Operational Development is the most senior level
accountable for the implementation of the policy.
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E5-2 MDR-A: Actions and resources related to resource use and circular economy

Material sustainability topic | Related material impact in brief | Actions | Expected outcome | Scope | Time horizon | Related target (if applicable)
Resource inflows | The production of Valmet’s products requires large quantities of materials. The most significant material categories are steel, polymers, electronic components, and packaging materials | Improve data quality and visibility of the resource inflows in Valmet’s own operations and value chain | Improved data quality and reporting of resource inflows | Own operations | 2024 | Not applicable
Resource outflows | Valmet’s technologies and automation enable the use and conversion of renewable and recycled resources into solutions and help customers transition to circularity | Lead Beyond Circularity research and development program and ecosystem to transform waste and emissions into valuable resources for sustainable growth and accelerating the green transition. | Process technologies, automation and services that create value by utilizing renewable and recycled materials, industrial side stream rejects, and waste | Together with 280 ecosystem partners, Valmet works within 35 ecosystem projects | 2022–2025 | 35 ecosystem project applications by 2025

The action listed in the table address the material impacts related to
resource inflows and resource outflows in Valmet’s own operations
and in the value chain.The actions address the objectives of Valmet’s
Code of Conduct, Supplier Code of Conduct, and Valmet Guidelines
for Sustainable and Responsible Research, Product Development
and Design.
Research and development work is carried out mainly in Finland
and Sweden by the Research and Development organizations in our
bus iness lines. Valmet operates 34 Research and Development
centers that are also pilot facilities for customer projects and internal
testing. At the end of 2024, Valmet Research and Development
employed 564 people, while r esearch and development expenses for
the year totaled EUR 123 million. Between 2022 and 2025, Valmet
plans to invest EUR 40 million in the Beyond Circularity research
and development program. The program is partly funded
by Business Finland and is part of the “Veturi” initiative, which
invites international companies to solve some of society’s most
pressing challenges through increased research, development, and
innovation.
Valmet has in 2024 established a Green Finance Framework
applicable for the issuance of green debt instruments. The Green
Finance Framework is designed to support financing or refinancing
eligible assets and expenditures that promote two key environmental
objectives: enabling transition to a circular economy and mitigating
climate change. During 2024, Valmet issued a EUR 200 million
green bond and signed a EUR 50 million green term loan agreement
with Swedish Export Credit Corporation (SEK).
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E5-3 MDR-T: Targets related to resource use and circular economy

Material sustainability topic | Related material impact in brief | Targets | Key performance indicator | Base year | Base line | Scope | Progress in 2024 | Relevant policy
Resource inflows | The production of Valmet’s products requires large quantities of materials. The most significant material categories are steel, polymers, electronic components, and packaging materials | Increase the use of recycled steel in own foundries | Share of recycled steel in own foundries | 2020 | 54% | All Valmet foundries | The amount of recycled steel used in Valmet's foundries increased to 77% in 2024. | Health, Safety and Environment policy, Supplier Code of Conduct
Resource outflows | Valmet’s technologies and automation enable the use and conversion of renewable and recycled resources into solutions and help customers transition to circularity | Sustainability categorization done for 100% of all new Research and Development projects by 2025 | % of new research and development projects where sustainability categorization has been done | 2024 | 12% | All new research and development projects from 2025 onwards | Sustainability impact assessment implemented as a mandatory requirement for all new research and development projects in related tool | Valmet Guidelines for Sustainable and Responsible Research, Product Development and Design
Valmet's solutions and services enable extension of the lifetime of technologies used by customers | Increase the net sales of EU taxonomy aligned activities under criteria: Circular economy (CE) 5.1 Repair, refurbishment and remanufacturing by 2030 | Growth in net sales (%) | 2024 | EUR 1,065 million | Valmet's EU taxonomy aligned activities under criteria: Circular economy (CE) 5.1 Repair, refurbishment and remanufacturing | Target set in 2024. | Valmet Guidelines for Sustainable and Responsible Research, Product Development and Design

Valmet has set the targets listed in the table to reduce negative
impacts and to advance positive impacts related to resource inflows
and resource outflows in own operations and in the value chain. The
absolute resource inflow target addresses the objectives of Health,
Safety and Environment Policy and Supplier Code of Conduct. The
target relates to sustainable sourcing and the increase of circular
material use. The target has been set on a voluntary basis and is not
based on legislation. The target is part of Valmet’s Climate Program
and internal stakeholders, including key experts and management
from relevant functions and business lines were included in the
target-setting process. The progress of the target is monitored
annually in the Supply Chain and Health, Safety and Environment
function.
The absolute resource outflow targets address the objectives of the
Valmet Guidelines for Sustainable and Responsible Research,
Product Development and Design. The targets relate to sustainable
product design and are part of Valmet’s Technology vision and
roadmap, which has been prepared in the process led by Valmet’s
corporate Research and Development function in collaboration with
Business Lines’ Research and Development. Valmet's Research and
Development management team sets the technology specific targets
and follows up progress annually at minimum. Targets are set
together with key technology experts and management from
business lines and relevant functions.
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E5-4: Resource inflows
Resource use
Valmet has identified steel, electronics and electrical components,
polymers, and packaging materials as the most significant resource
inflows. The primary material for Valmet’s solutions is steel. Valmet
purchases steel assemblies, structures, and components globally,
using them at its own production and customers’ sites to deliver
customer solutions, particularly in process technologies. Polymers
are especially essential for the Services business line. They are used
to manufacture products such as press felts, shoe press belts, filter
fabrics, and forming fabrics for process technologies. Electronics
and electrical components are essential across all business lines.
They are integral to automation solutions and incorporated into
various process technology solutions. Packaging materials are used
in logistics to ensure the safe and efficient transportation of goods.
Resource inflows reporting for steel, polymers, and electronics and
electrical components is based on purchase order data compiled
from Valmet’s Enterprise Resource Planning systems. Purchase
orders have been allocated based on the receipt date and internal
purchases between Valmet’s companies have been excluded to avoid
double counting. Products lacking weight information have been
estimated by using weight-cost ratio and statistical analysis.
Information regarding packaging materials has been extracted by
conducting a supplier survey. The consumption of packaging
materials in 2024 has been estimated based on January-June 2024
data, as demand for packaging materials remains stable during the
year, with no significant variation.
The calculation for recycled steel is based on the volume of recycled
steel in own foundries, which represents 14 percent of the total steel
volume. In other material categories, data availability limits the
reporting of recycled material volume.
Resource inflows

Material category | Total volume (metric tons) | Recycled volume (metric tons) | Recycled volume (%)
Steel | 159,639 | 21,626 | 14%
Electronics and electrical components | 5,574 | — | —%
Polymers | 8,153 | — | —%
Packaging material | 15,477 | — | —%

E5-5: R esource outflows
Circular solutions
Valme t launches around 100 new products to the market every year.
These products are often created in close cooperation with our
customers or our network of leading universities, research institutes,
suppliers, and other research partners around the world.
The integration of sustainability topics in our Research and
Development operations is ensured through the sustainability
criteria that are an integral part of the innovation process. The
criteria ensure that an innovation increases resource efficiency,
reduces emissions, and improves safety. They also help ensure the
innovation’s compliance with product and process safety legislation.
Finally, they guarantee that sustainability benefits are integrated into
the final product or solution to be launched.
Valmet’s Technology Vision sets the long-term direction for
research, development and innovation activities. Valmet’s research
and development focus areas are:
• Enabling the circular economy
• Improving efficiency with digitalization
• Resource efficiency – more with less
• From fossil to renewable materials
• Toward carbon neutral production processes
The expected lifetime of Valmet’s technologies is between 10 and
100 years. The information about the industry average of the
expected durability of all t he products is difficult to obtain. One of
the aims in our research and development is maximizing the
operating time of our technologies for our customer. Our services
extend the lifetime of customer technologies through reuse, rebuilds,
and maintenance activities. Modular design enables efficient reuse
and replacement possibilities. Valmet products are in essence
recyclable but due to various sizes, complex product structures and
other variability it is not possible to disclose the rate of recyclable
content.
Beyond Circularity research and development program
and ecosystem
Beyond Circularity is Valmet’s research and development program
and ecosystem to transform waste and emissions into valuable
resources for sustainable growth and accelerating the green
transition. The Beyond Circularity program aims to develop process
technologies, automation solutions, and services to create value by
utilizing renewable and recycled materials, industrial side stream
rejects, and waste.
The program is implemented through seven streams: program
management; recycling technologies; bio-refining/value adding to
waste; resource-efficient industries; automated and digitalized
industry and services; service life cycle concepts; and emerging new
process concepts and disruptive business.
A new green transition ecosystem is being built as part of the
Beyond Circularity program to create value and business for the
participants and expand competences to new areas. More than 280
partners have joined the ecosystem to work withi n 35 e cosystem
projects. Internally, Valmet has almost 100 ongoing program-related
research and development projects. Valmet plans to invest EUR 40
million in the Beyond Circularity program between 2022 and 2025.
The program is partly funded by Business Finland and is part of the
“Veturi” initiative, which invites international companies to solve
some of society’s most pressing challenges through increased
research, development, and innovation.
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Social information
S1: Own workforce
Strategy
ESRS 2 SBM-2: Interests and views of stakeholders
This information is disclosed under ESRS 2 SBM-2.
ESRS 2 SBM-3: Ma terial impacts, risks and
opportunities and their interaction with strategy
and business model
This information is disclosed under ESRS 2 SBM-3.
Impacts, risk and opportunity management
S1-1 MDR-P: Policies related to own workforce
Policies adopted to manage working conditions
Valmet has adopted Valmet’s Code of Conduct, Valmet Human
Rights Statement, Health, Safety and Environment (HSE) Policy,
Health, Safety and Environment (HSE) Committee Guideline, and
Valmet Human Resource Policy to manage the following material
impacts related to working conditions in its own operations:
• Valmet has practices in place for social and other forms of
dialogue with employees in all Valmet countries (actual, positive
impact).
• Valmet has operations in countries where collective bargaining
and/or freedom of association is limited or not common practice
(actual, negative impact).
• Valmet’s workforce is exposed to health and safety risks during
work activities which can cause injuries and illnesses (actual,
negative impact).
Valmet’s Code of Conduct
Valmet’s Code of Conduct defines Valmet’s requirements and
expectations in terms of ethical business practices, human rights,
equal opportunities, diversity and inclusion, respectful work
environment and health, safety and wellbeing, for example. Valmet’s
Code of Conduct explicitly addresses human rights violations such
as forced labor and child labor. The content and requirements set in
the Code of Conduct are described in more detail in section G1-1.
Valmet Human Rights Statement
Valmet’s Human Rights Statement defines the Group’s commitment
to respecting and promoting human rights in compliance with
the UN Guiding Principles on Business and Human Rights, and it
acknowledges that promoting human rights is fundamental for
carrying out its business responsibly. The statement is applicable to
all employees and entities within Valmet and to all its stakeholder
relationships. Valmet works with and encourages its business
partners to uphold the principles in this statement within their
businesses. T he Senior Vice President of Marketing,
Communications, Sustainability and Corporate Relations is the most
senior level accountable for the policy’s implementation. The
p rocess for monitoring the implementation of the Valmet Human
Rights Statement includes reporting and following up on incidents
and complaints filed through a third-party-operated reporting
channel (TrustLine), Valmet’s Social and Human Rights Impact
Assessments, and Sustainable Supply Chain process.
Information about the measures to provide and enable remedy for
human rights impacts is disclosed under S1-3, S2-3, and S2-4 in this
Sustainability Statement. Valmet’s approach to engagement with
value chain workers can be found under S2-2.
In addition to the Valmet Human Rights Statement, Valmet has a
M odern Slavery Statement based on the Modern Slavery Act to
prevent modern slavery and human trafficking. It covers Valmet's
own operations and its supply chain.
Valmet Health, Safety and Environment (HSE) Policy
Valmet’s Workplace Accident Prevention Policy is defined in its
Health, Safety and Environment (HSE) Policy. This policy states
Valmet’s commitment to protecting the health and safety, of its
people, partners, suppliers, and customers, as well as the
environment and the communities where it operates. The policy is
applicable to Valmet’s own workforce, as well as partners, suppliers,
and business contacts. T he Senior Vice President of Operational
Development is the most senior level accountable for its
implementation. Policy monitoring is done through health, safety
and environment notification routines, weekly Health, Safety and
Environment function reviews, monthly health, safety and
environment reporting practices as part of business reviews, and
quarterly strategic initiative reviews at the Corporate Office, and
annual management reviews of the certified global management
system (GMS). Valmet maintains a multi-site certification of the
GMS to the international health and safety management system
standard, ISO 45001:2018 and the international environmental
management system standard, ISO 14001:2015. Currently 79
percent of all employees are covered by ISO 45001:2018 certification,
and 80 percent by ISO 14001:2015 certification.
Valmet Health, Safety and Environment (HSE)
Committee Guideline
Valmet’s Health, Safety and Environment (HSE) Committee
Guideline sets the framework for ensuring consultation and
participation of own workforce in health and safety management in
locations with 30 or more employees. Currently 95 percent of all
employees are represented by a local Health, Safety and
Environment Committee. The Senior Vice President of Operational
Development is the most senior level accountable for its
implementation. Monitoring of the guideline is done through
annual reporting and auditing programs.
Valmet Human Resource Policy
Valmet’s Human Resource Policy provides a framework for the
management of the Human Resources function, which is committed
to developing an engaged and performance-driven community and
continuously driving the global development of Valmet employees’
capabilities. The policy is applicable to all Valmet employees, and
t he Senior Vice President of Human Resources is the highest level
accountable for policy implementation. Human Resources
continuously assesses the impact of its processes and tools. Human
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Resources uses regular assessment and reporting tools, including the
employee survey, stakeholder survey, and a third-party-operated
reporting channel, TrustLine, to enhance the positive impacts and to
avoid, mitigate, and remediate negative impacts on key stakeholders.
Polices adopted to manage equal treatment and
opportunities for all
Valmet has adopted the Valmet Non-Discrimination and Anti-
Harassment Policy and the Valmet Equal Opportunity and Diversity
Policy to manage the following material impacts related to equal
treatment and opportunities for all in its own operations:
• Proactive measures to address potential inequalities in hiring,
career progression, and pay equity can lead to a more engaged and
inclusive workplace (potential positive impact).
• Gender imbalance poses a risk of unintentional discrimination
and inequalities, e.g., in hiring, career progression, and pay equity
(potential negative impact).
Valmet Non-Discrimination and Anti-Harassment Policy
This policy outlines the measures Valmet takes to ensure a respectful
and inclusive workplace free of discrimination and harassment. The
policy is applicable to all Valmet employees and the Senior Vice
President of Human Resources is the most senior level accountable
for the implementation of the policy. Policy monitoring happens
through the Valmet raising concerns process, which is described in
more detail in the Compliance Reporting Guideline.
Valmet’s Non-Discrimination and Anti-Harassment Policy includes
a provision for positive discrimination as provided for within local
legislation. However, the policy does not state specific vulnerability
groups or specific commitments to these groups.
Valmet Equal Opportunity and Diversity Policy
Valmet’s Equal Opportunity and Diversity Policy defines Valmet’s
approach to promoting equal opportunities for all employees. The
policy is applicable to all Valmet employees and the Senior Vice
President of Human Resources is the most senior level accountable
for the implementation of the policy. Policy monitoring happens
through the Valmet raising concerns process, which is described in
more detail in the Compliance Reporting Guideline.
The following grounds for discrimination are specifically covered in
Valmet’s policies: gender; age; race; religion; ethnic or national
origin; political opinion; family status; sexual orientation; gender
identity; disability; or other characteristics protected by law. Color,
sex, and national extraction or social origin are not specifically
covered.
Global and local policies, guidelines, and practices for non-
discrimination, anti-harassment and equal opportunities direct the
Valmet way of operating. The principles of these policies, guidelines,
and practices are built into people processes, such as recruitment
and salary planning processes. In addition, equal opportunities,
diversity and inclusion and respectful work environment are
covered as separate sections in the Code of Conduct training,
which is mandatory for all Valmet employees and is renewed and
updated regularly.
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S1-2: Processes for engaging with own workforce and workers representatives on impacts
Valmet utilizes the following channels to identify, assess, and inform decision making on actual and potential impacts.

| Engagement type | Stakeholder group | Frequency | Function responsible | Most senior role responsible | Outcomes
Dialogue | Management– employee dialogue | Select employee groups, e.g., town hall meetings | Varies | Management Teams | Respective Executive Team member | Information sharing and direct dialogue with employees
Health, Safety and Environment and Social Committees | Locations with >30 employees | At least annually | Health, Safety and Environment & Human Resources | Area Health, Safety and Environment and Human Resources heads | Consultation and communication with employees and their representatives on Health, Safety and Environment and wellbeing management
Works Councils and other similar forums | Select groups, for example, the European Works Council | Varies | Human Resources | Area Human Resources head | Information sharing and direct dialogue with workers and their representatives
Consultation and negotiation | National works councils and trade unions | Varies | Human Resources | Area Human Resources head | Expectations related to, e.g., local laws, regulations and market practices
Surveys | Employee survey | Own employees | Biennial | Human Resources | Vice President of Talent Management | Perspectives and trend data on, e.g., engagement, safety, fair pay; insights into employee groups who may be vulnerable to impacts
Pulse/ad-hoc surveys | Select employee groups, e.g., in conjunction with mergers and acquisitions, and with change negotiations | Varies | Human Resources & Health, Safety and Environment | Head of the business | Employee perspectives on, e.g., change impacts, workability, social and organizational work environment, safety culture
Reporting channels | Reporting on continuous improvement and Health, Safety and Environment events | Own employees | Ongoing | Health, Safety and Environment & Quality | Vice President of Health, Safety and Environment and Vice President of Quality | Inputs to support continuous improvement, especially in health, safety and environment topics and sustainability- related topics
Misconduct reporting (TrustLine) | Own employees | Ongoing | Ethics & Compliance | General Counsel | Complaints against Valmet and confirmed misconduct cases
Control mechanisms | Audits | Multi-site and/or certified locations | Ongoing | Multiple | Vice President of Quality | Process compliance and adherence to ISO standards (9001, 14001, 45001)
Social and Human Rights Impact Assessment | High-risk locations | Annually | Sustainability | Vice President of Sustainability | Identifying risks and impacts, especially amongst vulnerable groups

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S1-3: Processes to remediate negative impacts and
channels for own workers to raise concerns
Valmet encourages its own workforce to raise concerns about
possible violations of Valmet’s Code of Conduct, unethical business
behavior, or other misconduct. This includes grievances and
complaints related to employee matters.
Processes for providing or contributing remedies for material
negative impacts on own workforce depend on the nature of the
case. Valmet has an Incident Management Team process with
defined responsibilities for ensuring that the most severe cases are
handled appropriately, and the remedies are effective. For serious
health and safety incidents, Valmet has a Health and Safety incident
investigation guideline, which includes the approach for corrective
actions. Assessing the effectiveness of the remedy is built into the
health and safety incidents handling process.
Valmet employees are advised to report misconduct or grievances to
their own managers or other management, the Human Resources
function, or directly to the Legal and the Internal Audit functions.
Valmet also offers a third-party-operated reporting channel,
TrustLine, for reporting suspected breaches of our Code of Conduct
or other grievances. It provides Valmet employees the possibility of
reporting possible concerns confidentially in their native language,
and anonymously if desired. TrustLine is available for everyone 24/7
in Valmet’s intranet and on its external website, and it is designed to
guarantee anonymity. The reporter can make a report either online
or by calling a call center. Reported grievances and complaints are
handled in accordance with a process that is described in detail in
the Compliance Reporting Guideline. The content and requirements
set in the guideline are described in more detail in section G1-1.
The matters are handled in accordance with Valmet’s Compliance
Reporting Guideline. The process, and how individuals who use the
process are protected, is disclosed in G1-1.
Valmet Ethics & Compliance with Internal Audit monitors and
tracks the ongoing cases to ensure that all reported matters are
investigated in a timely manner, and follow-up actions are agreed.
Valmet has a Compliance Committee structure consisting of the
Corporate Compliance Committee and Area Compliance
Committees. All reported cases are handled in at least one of these
committees. The Compliance Committees are responsible for
making decisions on the results of cases, their corrective actions, and
follow-up. This includes ensuring that provided remedies are
effective. Valmet has defined by subject matter and outcome which
cases are reported to the Chief Executive Officer, and which are also
reported to the Valmet Board Audit Committee. Any human rights
issues in Valmet’s own workforce are reported to the Board Audit
Committee.
In 2024, Valmet trained employees on the availability of the
grievance reporting process through the Code of Conduct e-learning
course, which is mandatory for all Valmet employees. As a part of
Corporate I nternal Audit s, knowledge of the raising concerns
process and TrustLine is assessed. It is planned to include a Group-
wide assessment of whether Valmet’s employees are aware of and
trust the process in 2025.
Valmet does not tolerate any form of retaliation against individuals
who in good faith raise their concerns or assist in the investigations.
The protection of whistleblowers is described in detail in
section G1-1.
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S1-4 MDR-A: Tak ing action on material impac ts on own workforce, and effectiveness of those ac tion s
Actions and resources related to material sustainability matters

Material sustainability topic | Related material impact | Action | Expected outcome | Scope | Time horizon | Resources to manage | Related target if applicable
Working conditions | Valmet has practices in place for social and other forms of dialogue with employees in all Valmet countries. Valmet has operations in countries where collective bargaining and/or freedom of association is limited or not a common practice. Valmet’s workforce are exposed to health and safety risks during work activities which can cause injuries and illnesses. | Location-specific Social and Human Rights Impact Assessment | Identification and control of risks | Locations in high-risk countries | Assessment annually in own operations or in upstream value chain | Sustainability | At least one Social and Human Rights Impact Assessment in own operations and in the value chain based on the risks identified
Provide human rights training through e- learning | Awareness building | Line managers | Continuous | Sustainability, Human Resources |
Sustainability assessment when there is a significant change in the market presence | Identification and control of risks | Own operations | When significant change in the market presence | Sustainability |
Ensure clear practices to boost social dialogue and other types of dialogue throughout the organization | Dialogue on working conditions in all locations | Own employees | Continuous | Human Resources, Health, Safety and Environment, senior management, line managers | Increase employee engagement by 1 percentage point per employee survey
Increase the number of Valmet employees working in locations certified to ISO 45001:2018 | Effective global management system (GMS) and common standards in locations securing workplace conditions are as healthy and safe as possible | All locations with Valmet workforce | Continuous | Health, Safety and Environment, Quality, line managers, internal auditors, external certification partner | >90% of employees work in ISO 45001 certified locations by 2030
Implement and maintain Health, Safety and Environment committees in locations with 30 or more employees | Active joint workforce- management consultation and engagement on managing local health and safety impacts | All locations with Valmet workforce | Continuous | Worker health and safety representatives, Health, Safety and Environment, line managers, committee budgets | All locations with 30 or more employees have a Health, Safety and Environment committee
Targeted prevention programs based on injury and illness analysis | Reduction in high consequence and/or high frequency injuries and illnesses | Own workforce | Continuous | Health, Safety and Environment, Occupational health service providers, line managers | Reduction in injury and illness severity and frequency rates
Developing safety culture, leadership and mindset through training, communication and performance metrics | Promotion of a strong safety culture by leaders, and workforce engagement in it | Own workforce | Continuous | Line managers, Health, Safety and Environment, employees |
Equal treatment and opportunities for all | Proactive measures to address potential inequalities in hiring, career progression and pay equity can lead to a more engaged and inclusive workplace. Gender imbalance poses a risk of unintentional discrimination and inequalities e.g., in hiring, career progression and pay equity. | Adhere to common global Human Resources processes, e.g., related to recruitment | Consistent ways of working | Own employees | Continuous | Human Resources, line managers, employees |
Provide diversity, equity and inclusion training | Awareness building | Own employees | Continuous | Human Resources |
Continue with pay equity and transparency project | Ensure equal treatment and fair remuneration of employees at all levels of the organization | Own employees | 2024–2027 | Human Resources |

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Approach to managing material impacts
V a lmet recognizes and actively engages with employee
representation bodies and promotes practices that create
opportunities for active dialogue in the workplace. Working
conditions are determined by the employer (Valmet) for employees
who are not part of a collective agreement. When determining
working conditions, Valmet is committed to meeting or exceeding
all compliance obligations. Compliance with applicable local laws
and regulations is the foundation for all operations.
Collective bargaining and social dialogue
Valmet’s operations are partially located in regions where collective
bargaining is limited or not common practice, which places Valmet’s
employees in those countries at increased risk of lack of sufficient
opportunity to engage in freedom of association and collective
bargaining and social dialogue. Based on this identified impact,
Valmet continues to conduct Social and Human Rights Impact
Assessments in high-risk locations and provide human rights
training to its employees through a globally available e-learning
course. The effectiveness of these measures is tracked through the
number of significant findings in the assessments carried out and e-
learning completion. Valmet determines appropriate actions for
specific material negative impacts, e.g. reported confirmed cases in
TrustLine, on a case-by-case basis and relies on trend data to
identify the need for possible wider action.
Valmet understands the benefits of active dialogue with its
employees and therefore supports activities that foster different
forms of dialogue. Besides the types of engagement shown in table
S1-2, Valmet also recommends holding regular one-to-ones and
team meetings, site-specific town–halls, feedback surveys, info
sessions, and local management-employee forums such as Breakfast
with the President events and Dialogue with People sessions. Valmet
assesses the effectiveness of these measures by monitoring employee
engagement levels in different employee groups through Valmet’s
employee survey.
Health and safety
Valmet aims to ensure that a strong safety culture, excellent
processes, and effective practices are in place to identify and control
hazards before they cause harm. Everyone is expected to take
responsibility for healthy and safe behaviors as defined in the
Valmet senior manager, manager, and employee roles. To support a
fair, just, and caring safety culture Valmet continuously invests in
training and awareness activities to enhance safety leadership,
engagement and mindset. For example, the Safety Dialogue training
is part of everyone’s onboarding, and a global Health, Safety and
Environment awareness week is held in September each year.
Valmet promotes joint workforce-management Health, Safety and
Environment Committees in all locations and currently 95 percent
of the employees are represented by a committee that focuses on
local safety risk reduction and health promotion. In addition,
Valmet collaborates actively with customers and suppliers to
promote best practices and improve health, safety and environment
in common worksites in customer facilities.
Valmet’s Global Management System (GMS) ensures a strong health
and safety management is integrated into business processes. Valmet
has four Life Saving Rules and fifteen Minimum Safety Standards to
ensure the hierarchy of controls is implemented globally in all high-
risk activities. Locations with health, safety and environment risks
are certified according to the ISO 45001:2018 (health and safety)
management standard and are regularly audited. Valmet monitors
and openly communicates health and safety performance to enable
the continuous development of Valmet’s approach.
'Continue Health, Safety and Environment improvement' is one of
Valmet's S trategic Must-Win initiatives with action areas defined
each year and cascaded through annual planning and target setting
across the organization. As a key element in this initiative Valmet’s
operations implement annual injury and illness prevention actions.
During 2024, quarterly campaigns were implemented through
training, communications, inspections and procedure development
on four focus areas on reducing injuries related to working at
heights and confined spaces, mechanical lifting, and the unexpected
start up of machinery.
To drive and inform continuous improvement employees and other
stakeholders are encouraged to report health and safety incidents,
improvement ideas, and observations through our reporting portal,
including anonymously. All injuries and illness cases, as well as
near-miss cases, are thoroughly investigated, and actions are taken
to prevent similar incidents in the future. Employees are covered by
work-related injury and illness insurances in all our operations with
access to compensation and support mechanisms.
Effectiveness of initiatives and actions to protect health and safety is
tracked by following trends in injury and illness frequency and
severity as well as other proactive safety performance indicators as
part of business reporting and management.
Equal treatment and opportunities for all
As stated in the Equal Opportunity and Diversity Policy, Valmet is
committed to promoting equal opportunities for all employees,
regardless of gender, age, race, religion or beliefs, ethnic or national
origins, marital/civil partnership status, sexuality, or disability.
Valmet recognizes the business benefits of having a diverse
workforce and aims to create and sustain a work environment that
values diversity and provides equal opportunities to everyone.
Valmet has a gender imbalance in its workforce, partly due to the
industry in which it operates, which creates a risk of unintentional
bias and unfair treatment for the under-represented groups, e.g., in
recruitment and career progression. Valmet mitigates this risk
mainly by ensuring common ways of operating as outlined below:
• Global-level non-discrimination, anti-harassment and equal
opportunities policies direct how Valmet operates. The principles
of these policies are built into Valmet’s people processes such as
the recruitment and salary planning processes.
• Global procedures for compensation management, performance
management, and resourcing are documented in Valmet’s Global
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Management System and implemented vi a Valmet’s Human
Resources system.
• Communication and training on Valmet’s people processes is
provided to stakeholder groups.
• Reporting on process outcomes is used for continuous
improvement, to evaluate effectiveness, and to identify and
establish plans to correct gaps and inconsistent practices which
may exist in the organization. For example, a gap analysis for the
recruitment process was undertaken in 2024.
Effectiveness of actions is also tracked and assessed through the
complaints monitoring process and identifying significant
developments.
Valmet takes proactive measures to create a more equitable
workplace, for example, through an ongoing pay equity project,
activities to increase the share of women in science, technology,
engineering, and mathematics (STEM) positions, and the launch of
a new diversity, equity, and inclusion toolbox. Evidence of the
effectiveness of these actions will be visible in the characteristics of
Valmet’s workforce data, employee survey data, and certain
recruitment metrics.
Due diligence processes
Valmet has embedded human rights due diligence into its
management systems and in key processes. Valmet systematically
manages operational changes to ensure that potential negative social
impacts are identified in the planning stage and prevented or
mitigated during change execution. Risk assessments are conducted,
action plans created, and audits and other checks performed.
As part of due diligence processes, Valmet conducts Social and
Human Rights Impact Assessments in high-risk locations and in the
value chain. Valmet is committed to conducting at least one large
assessment annually. Assessments are carried out by an independent
third party. Impact assessment methodology is based on dialogue
with affected stakeholders and aims to engage with a wide range of
affected individuals, focusing on especially vulnerable groups. As a
part of the process, corrective action plans are drafted based on the
assessment findings, and the progress of the remediation plans are
followed up. More information about Valmet's due diligence process
is disclosed under ESRS 2 GOV-4.
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Metrics and targets
S1-5 MDR-T: Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities

Material sustain- ability topic | Related material impact | Target | Key performance indicator | Base year | Base- line | Scope | Progress and trends in 2024 | Target monitoring | Relevant policy
Working conditions | Valmet has practices in place for social and other forms of dialogue with employees in all Valmet countries. Valmet has operations in countries where collective bargaining and/or freedom of association is limited or not a common practice. Valmet's workforce are exposed to health and safety risks during work activities which can cause injuries and illnesses. | At least one Social and Human Rights Impact Assessment per year in own operations and in the upstream value chain based on the risks identified 1 | Number of assessments conducted | 2017 | 1 | Own operations and upstream value chain | Valmet conducted one Social and Human Rights Impact Assessment, including fieldwork in the value chain. | Annually in Sustainability function | Human Rights Statement
Increase employee engagement by 1 percentage point per employee survey | Valmet engagement index, % favorable responses to four survey questions, where % favorable scores equals % Agree plus % Strongly Agree on a five- point scale | 2021 | 69% | Own employees voluntarily responding to employee engagement survey. Response rate for the 2023 survey was 80 % | % engaged in 2023 was 70%; no survey in 2024. | Biennially in management teams |
>90% of employees work in ISO 45001 certified locations by 2030 | % employees in Valmet's Human Resources system working in a location listed on Valmet's multi-site ISO 45001 certificate | 2022 | 75% | Own employees | In 2024, 12 additional locations achieved certification. At the end of the year 79% of employees worked in an ISO 45001 certified location. | Annually in management teams and monthly in business management and review processes | Health, Safety and Environment Policy
Reduction in injury severity | Number of high consequence injuries leading to permanent disability, loss of life or more than 180 days absence reported in Spotlight | 2022 | 9 | Own employees | In 2024, there were 3 high consequence injuries. | Monthly in business management reporting and review processes. | Health, Safety and Environment Policy
Continuous reduction in injury frequency | Total recordable injury frequency (TRIF): calculated injuries reported in Spotlight and theoretical work hours of 160 hours per employee in Valmet's Human Resources system per month | 2022 | 3.2 | Own employees | In 2024, TRIF remained at 3.2. Integration of acquired operations to Valmet’s HSE culture, processes and practices remained a focus. | Monthly in business management reporting and review processes. | Health, Safety and Environment Policy
Four Health, Safety and Environment walks, inspections and conversations per manager per year in 2025 | Number of reports in Spotlight per line manager in Valmet's Human Resources system per year | 2022 | 4.7 | Line managers | The number of Health, Safety and Environment walks, inspections and conversations continued to increase to 8.4 per line manager in 2024. | Monthly in business management reporting and review processes. | Health, Safety and Environment Policy
Four Health, Safety and Environment event reports per employee in 2025 | Number of Health, Safety and Environment events reports in Spotlight per number of employees in Valmet's Human Resources system | 2022 | 2.6 | Own employees | The number of Health, Safety and Environment events reported increased during the year to 3.4 per employee. | Monthly in business management reporting and review processes. | Health, Safety and Environment Policy
Equal treatment and opportunities for all | Proactive measures to address potential inequalities in hiring, career progression and pay equity can lead to a more engaged and inclusive workplace. Gender imbalance poses a risk of unintentional discrimination and inequalities e.g. in hiring, career progression and pay equity. | Increase the share of women in science, technology, engineering and mathematics (STEM) positions to 12% by 2024 | % women with STEM- related education in Valmet's Human Resources system, with the assumption that individuals with STEM-related education work in STEM- related roles. | 2021 | 11.5% | Own employees with education data in Valmet's Human Resources system | In 2024, the share of women in STEM- related roles increased to 12.4%. | Annually in annual reporting | Equal Opportunity and Diversity Policy

1 Target scope related to Social and Human Rights Impact Assessment has been extended to cover value chain workers in 2024, and therefore, the KPI has also been updated.
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Valmet has set the targets listed in the table to reduce negative
impacts and advance positive impacts on its own workforce. All
metrics are calculated based on the data in Valmet's global Human
Resources system, and/or Valmet's global health, safety and
environmental management system, Spotlight, as of the end of
reporting year. More details on used calculation methods are
described below each table where necessary.
The targets are part of Valmet’s Sustainability360° Agenda
implementation 2022–2024. The targets were set as part of a
materiality assessment process which included, for example, an
analysis of the business environment, benchmarks and peer reviews,
industry and corporate sustainability trends, market drivers, future
regulatory requirements, UN Sustainable Development Goals and
engagement with relevant stakeholders including employees and
experts to understand their expectations. The topics were then
assessed based on their significance to Valmet and its stakeholders at
an internal workshop with key experts and management.
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S1-6: Characteristics of the undertaking’s
employe es

Employees by country (headcount for countries with >50 empl. representing >10% total empl. )
| 2024
Finland | 6,186
China | 2,388
US | 2,191
Total | 10,765

Employees by gender (headcount)1
| 2024
Male | 15,222
Female | 4,087
Not disclosed | 1
Total | 19,310

1 Consolidated financial statements, Note 13. Personnel expenses and number of
personnel.

Key employee figures end of period | Gender 1
2024 | Female | Male | Not disclosed | Total
Number of employees (headcount) | 4,087 | 15,222 | 1 | 19,310
Number of permanent employees (headcount) | 3,600 | 14,132 | 1 | 17,733
Number of temporary employees (headcount) | 487 | 1,090 | — | 1,577
Number of non-guaranteed hours employees (headcount) | 94 | 185 | — | 279
Number of full-time employees (headcount) | 3,842 | 14,831 | 1 | 18,674
Number of part-time employees (headcount) | 245 | 391 | — | 636

1 Gender as disclosed by employees themselves.

Turnover 1 in 2024 | Number of leavers | Rate
Employees | 1,709 | 8.8%

1 The number of leavers consists of all leavers during the reporting period as defined in AR
59 relating to DR S1-6 in the standard. However, the rate percentage is calculated
based on the number of leavers divided by the average headcount across the reporting
period, excluding employees from acquisitions and disposals during the reporting
period.

Key employee figures by region
2024 | North America | South America | EMEA | China | Asia- Pacific | Total
Number of employees (headcount) | 2,497 | 1,519 | 11,188 | 2,388 | 1,718 | 19,310
Number of permanent employees (headcount) | 2,496 | 1,470 | 10,594 | 1,489 | 1,684 | 17,733
Number of temporary employees (headcount) | 1 | 49 | 594 | 899 | 34 | 1,577
Number of non-guaranteed hours employees (headcount) | — | — | 279 | — | — | 279
Number of full-time employees (headcount) | 2,490 | 1,519 | 10,567 | 2,388 | 1,710 | 18,674
Number of part-time employees (headcount) | 7 | — | 621 | — | 8 | 636

The employee data is reported in headcount as of the end of the
reporting period and includes all active employees and employees
from the companies acquired during the year. The number of
employees excluded from the active employee data, namely,
employees on leave of absence, e.g., study-leave, long-term sick
leave, or parental leave, is minor, and amounting to less than
2 percent of the total number of employees.
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S1-8: Collective bargaining coverage and
social dialogue
Overall, 62 percent of Valmet employees are covered by collective
bargaining agreements, including multiple collective agreements
within the EEA countries in which Valmet has operations. Working
conditions are determined by the employer (Valmet) for employees
who are not part of a collective agreement.
Valmet has a European Works Council (EWC), which has
representatives from Valmet countries in the European Union (EU).
According to the Agreement on the European Works Council of
Valmet Corporation, the purpose of the group is to give employees
access to information and the opportunity to be heard in
multinational corporate-level matters, and to enhance dialogue
between the employer and personnel at the European level.

| Collective Bargaining Coverage | Social dialogue
Coverage rate | Employees – EEA (for countries with >50 empl. representing >10% total empl.) | Employees – Non-EEA (estimate for regions with >50 empl. representing >10% total empl.) | Workplace representation (EEA only) (for countries with >50 empl. representing >10% total empl.)
0-19% |  | North America | —
20-39% |  |  | —
40-59% |  | China 1 | —
60-79% |  |  | —
80-100% | Finland |  | Finland

1 China data is not stored in people management solution, but instead collected with a country-specific process.
S1-9: Diversity metrics

Employees by age group
| 2024 | %
Under 30 years old | 2,140 | 11.1%
Between 30 and 50 years old | 10,399 | 53.9%
Over 50 years old | 6,771 | 35.1%
Total | 19,310 |

Employees at top management 1 level
| 2024 | %
Female | 40 | 21.4%
Male | 147 | 78.6%
Not disclosed | — | —%
Total | 187 |

1 Executive team and Senior management (one and two levels below ET)
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S1-14: Health and safety indicators

The percentage of people in Valmet's own workforce who are covered by the ISO 45001 health and safety management system based on legal requirements and/or recognized standards or guidelines and certified by an external party
| 2024
ISO 45001:2018 (Occupational health and safety management) | 79%

The number of fatalities as a result of work-related injuries 1
| 2024
Employees | 0
Other workers 2 | 0
Total | 0

1 Valmet omits separate non-employee data reporting in 2024.
2 Contracted workforce whose work or workplace is controlled by Valmet (including non-
employees in 2024).

The number of fatalities as a result of work-related ill health 1
| 2024
Employees | 0
Other workers 2 | 0
Total | 0

1 Valmet omits separate non-employee data reporting in 2024.
2 Contracted workforce whose work or workplace is controlled by Valmet (including non-
employees in 2024).

The number of recordable work-related accidents 1
Employees | 2024
North America | 16
South America | 10
EMEA | 80
China | 11
Asia-Pacific | 1
Total | 118

1 A recordable work-related accident results in death, days away from work, restricted
work or transfer to another job, or medical treatment beyond first aid (first aid cases are
excluded). Valmet omits non-employee data reporting in 2024.

The rate of recordable work-related accidents (Total recordable incident frequency by region, TRIF)1
Employees | 2024
North America | 3.6
South America | 4.0
EMEA | 3.6
China | 2.4
Asia-Pacific | 0.3
Total | 3.2

1 A recordable work-related accident results in death, days away from work, restricted
work or transfer to another job, or medical treatment beyond first aid (first aid cases are
excluded). Valmet omits non-employee data reporting in 2024.

The number of cases of recordable work-related ill health subject to legal restrictions on the collection
Employees | 2024
North America | 3
South America | 0
EMEA | 17
China | 0
Asia-Pacific | 0
Total | 20

The number of days lost to work-related injuries and fatalities from work-related accidents
Employees | 2024
North America | 592
South America | 22
EMEA | 1,480
China | 624
Asia-Pacific | 17
Total | 2,735

The number of days lost to work-related ill health and fatalities from ill health
Employees | 2024
North America | 217
South America | 0
EMEA | 205
China | 0
Asia-Pacific | 0
Total | 422

'
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S1-16: Remuneration metrics (pay gap and total
remuneration)

Remuneration metrics
| 2024
Gender pay gap | 11.6%
Total remuneration ratio | 48.60

The gender pay gap is defined as the difference of average pay levels
between female and male employees, expressed as percentage of the
average pay level of male employees. The total remuneration ratio is
the ratio of the highest paid individual to the median annual total
remuneration for all employees. Valmet calculates the gender pay
gap and total remuneration ratio using the base salary data available
in V almet's Human Resources system and any short- and/or long-
term incentives paid out during the calendar year. The calculation
does not include any other pay elements, such as overtime payments
or benefits in kind, which is a potential limitation in the data.
S1-17: Incidents, complaints and severe human
rights impacts

The number of work-related incidents of discrimination, including harassment, and complaints filed through channel for own workforce
| 2024
Discrimination, including harassment | 8
Complaints filed through channel for own people to raise concerns | 12

A work-related incident of discrimination, including harassment is
considered confirmed behavior that is against Valmet’s Non-
Discrimination and Anti-Harassment Policy or Valmet’s Equal
Opportunity and Diversity Policy. The discrimination, including
harassment, cases are compiled from a monthly Human Resource
reporting process and the Compliance Reporting Guideline process.
Complaints filed through channels to raise concerns by own
workforce are defined as those cases that are handled in accordance
with the Compliance Reporting Guideline process that are related to
working conditions, equal treatment and opportunities for all, or
other work-related rights. The content of the process is disclosed in
more detail in G1-1. The number of complaints received from own
workforce is collected from a summary of all the cases that were
handled in accordance with the misconduct investigation process
that is described in detail in the Compliance Reporting Guideline.
Valmet has not received any fines, penalties, or paid compensation
in 2024 for damages as a result of the incidents and complaints
disclosed in S1-17.

The number of severe human rights incidents connected to own workforce
| 2024
Number of cases of severe human rights incidents | 0
Amount of fines, penalties and compensation issued/paid for damages for severe human rights incidents (EUR) | 0

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S2: Workers in the value chain
Strategy
ESRS 2 SBM-2: Interests and views of stakeholders
This information is disclosed under ESRS 2 SBM-2.
ESRS 2 SBM-3: Material impacts, risks and
opportunities and their interaction with strategy
and business model
This information is disclosed under ESRS 2 SBM-3.
Impact, risk and opportunity management
S2-1 MDR-P: Po licies related to value chain workers
Valmet has adopted Valmet’s Code of Conduct, Valmet Human
Rights Statement, Valmet Supplier Code of Conduct, and Valmet
Health, Safety, and Environment (HSE) Policy to manage, among
other impacts, the following material impacts related to working
conditions and other work-related rights of value-chain workers:
• Valmet has operations in countries where collective bargaining
and/or freedom of association is limited or not common practice.
Value-chain workers in high-risk countries may lack legislated
access to freedom of association, collective bargaining, adequate
wages, and/or can be subject to excessive working hours (actual,
negative impact).
• Value-chain workers can be exposed to health and safety risks
during work activities which can cause injuries and illnesses in the
provision of products and services to Valmet (actual, negative
impact).
• Through supplier engagement processes, Valmet can improve
working conditions and health and safety of value-chain workers
(potential, positive impact).
• Young workers and migrant workers are identified as vulnerable
groups within value chain workers. Migrant workers have an
increased risk of forced or bonded labor, and young workers may
be exposed to hazardous or harmful work (potential, negative
impact).
Valmet’s Code of Conduct
Valmet’s Code of Conduct defines Valmet’s requirements and
expectations in terms of ethical business practices, human rights,
equal opportunities, diversity and inclusion, a respectful work
environment, and health, safety, and wellbeing, for example.
Valmet’s Code of Conduct is applicable to all Valmet employees, as
well as external stakeholders, including value-chain workers. The
content and requirements set in the Code of Conduct are described
in more detail in section G1-1.
Valmet Supplier Code of Conduct
The Supplier Code of Conduct defines principles that suppliers are
required to comply with. The requirements are applicable to
Valmet’s suppliers. The supplier shall ensure that all its employees,
permanent and temporary, as well as its suppliers, and sub-
suppliers, recognize and comply with the requirements set out in the
Supplier Code of Conduct.
Valmet’s Supplier Code of Conduct covers Human Rights and
Valmet expects suppliers to respect internationally recognized
human rights and have a due diligence process in place to measure,
prevent, and mitigate negative human rights impacts and to avoid
causing, contributing, or being linked to negative human rights
impacts. Compliance with all applicable national and international
laws and regulations is the starting point of adhering to the Supplier
Code of Conduct. Following human rights topics are addressed in
the Supplier Code of Conduct: minimum wage, work contract, fair
compensation and living wage, freedom of association and collective
bargaining, child labor, special protection for young workers, forced
labor, modern slavery and trafficking in human beings, working
hours and rest periods, discrimination, harassment, occupational
health and safety, local communities and indigenous people and
business ethics.
Suppliers are expected to have effective grievance mechanisms in
place for concerns raised by workers within their operations and to
ensure that those who report suspected or actual violations are
protected from retaliation. Additionally, value-chain employees can
report their concerns anonymously 24/7 using the Valmet’s third-
party managed channel, TrustLine. The Senior Vice President of
Operational Development, member of Valmet's Executive team, is
responsible for implementation of the Supplier Code of Conduct.
The process for monitoring the implementation of the requirements
includes Supplier Sustainability Audits, Social and Human Rights
Impact Assessments and following up the cases reported through
TrustLine.
Valmet's Sustainable Supply Chain Policy was renewed in 2024 and
the renewed policy is called Supplier Code of Conduct.
Valmet Health, Safety, and Environment (HSE) Policy
This policy states Valmet’s commitment to protecting the health,
safety, and environment of its people, partners, suppliers, and
customers, as well as the communities where it operates. The
content and requirements set in the policy are described in more
detail in section S1-1.
Valmet Human Rights Statement
Valmet’s Human Rights Statement defines Valmet’s commitment to
respecting and promoting human rights in compliance with the UN
Guiding Principles on Business and Human Rights and
acknowledges that promoting human rights is fundamental for
carrying out its business responsibly. The statement is applicable to
all employees and entities within Valmet and to all the Group’s
stakeholder relationships. Valmet works with and encourages its
business partners to uphold the principles in this statement within
their businesses. The Senior Vice President, Marketing,
Communications, Sustainability and Corporate Relations, member
of Valmet's Executive team, is the most senior level accountable for
the implementation of the statement.
To ensure compliance with its Human Rights Statement, Valmet has
a process for sustainability due diligence. The process is based on the
UN Guiding Principles on Business and Human Rights and OECD
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Guidelines for Multinational Enterprises. More information about
Valmet’s due diligence process is disclosed under GOV-4 and S2-4
in this report.
As stated in Valmet’s Human Rights Statement, Valmet respects and
promotes the protection of human rights as expressed in all
internationally recognized human rights declarations and
conventions such as the UN Universal Declaration of Human
Rights, the UN Covenant on Civil and Political Rights, the UN
Covenant on Economic, Social and Cultural Rights and the
International Labour Organization’s (ILO) Declaration of
Fundamental Principles and Rights at Work. Valmet also operates
according to and promotes the principles described in the United
Nation’s (UN) Guiding Principles on Business and Human Rights
and the OECD Guidelines for Multinational Enterprises.
In addition to Valmet Human Rights Statement, Valmet’s
commitment to respecting and promoting human rights is fully
integrated into the Group’s operating policies such as Valmet’s Code
of Conduct and Valmet Supplier Code of Conduct. As a global
enterprise and employer, Valmet aims to operate in full compliance
with all applicable national and international laws, regulations, and
generally accepted practices and our own Code of Conduct,
whichever sets higher standards.
Information about the measures to provide and enable remedy for
human rights impacts is disclosed under S1-3, S2-3, and S2-4 in this
Sustainability Statement. Valmet’s approach to engagement with
value chain workers can be found under S2-2.
S2-2: Process for e ngaging with value chain
workers about impacts
Valmet engages and collaborates with its suppliers and supply-chain
workers and assesses the effectiveness of the engagement with
suppliers’ workers through its Due Diligence Framework,
sustainable supply chain process and health, safety and environment
activities. These activities encompass Valmet's Supplier Engagement
Program, Social and Human Rights Impact Assessments,
Sustainability impact assessment when there is a significant change
in market presence, Supplier Sustainability Audits, and local Health,
Safety and Environment activities on sites and reporting portals.
Valmet has implemented a Supplier Engagement Program based on
the principles of its Sustainable Supply Chain Policy. The program
supports and monitors suppliers’ performance and provides hands-
on tools and training for suppliers to take the most critical steps to
develop their sustainability practices. This program also serves as a
means to engage value-chain workers on both actual and potential
material impacts.
T he Supplier Engagement Program includes access to a capacity-
building library with tangible development tools, e-learning courses,
and practical handbooks, which aim to increase awareness and give
practical advice on how to develop more sustainable business
practices. As part of the program, supplier-specific targets and key
Performance Indicators are set, and related actions are followed up
for each participating supplier, aiming for visible improvements in
their operations.
Valmet encourages its suppliers and business partners to contribute
development ideas via an external reporting portal, Spotlight. This
portal is designed for Valmet’s customers, value-chain workers,
suppliers, contractors, and other stakeholders for managing events
related to health, safety, environment, and continuous improvement
in all Valmet operations. Spotlight is used for reporting all incidents,
non-conformities, near misses, observations, and improvement
ideas in Valmet workplaces, including at customer sites. Valmet
continually refines and enhances its processes based on the feedback
received through this portal.
Social and Human Rights Impact Assessments are specifically
designed to engage directly with affected stakeholders, value chain
workers and local stakeholders alike, and the methodology is based
on dialogue. The impact assessment aims to engage with a wide
range of affected individuals, focusing on especially vulnerable
groups. Valmet aims to conduct at least one in-depth impact
assessment in a year and the number of the interviews conducted
per impact assessment depends on the scope and location. Value-
chain workers are also always engaged in individual interviews
during the Supplier Sustainability Audits. A minimu m of 10 value
chain worker interviews is conducted in each audit. More
information about Supplier Audits and Human Rights Impact
Assessments is disclosed under S2-4. Valmet engages with value
chain workers also when conducting Sustainability impact
assessment when there is a significant change in the market
presence. More information about this assessment is disclosed under
S2-3.
Valmet's value-chain workers in Valmet and Customer premises are
continuously engaged in local Health, Safety and Environment
activities and events where feedback is actively sought and co llected,
including Health, Safety and Environment induction training before
starting work, daily toolbox talks, Injury Prevention Programs, and
Health, Safety and Environment days. In 2024, 27 Subcontractor
Health, Safety and Environment Days were held. In Valmet’s
premises, Health, Safety and Environment Committees interact with
location-based value-chain workers as part of their agenda
every day.
To support capacity building, Valmet offers employee e-learning
courses such as Valmet’s Code of Conduct e-learning course,
Human rights e-learning, and Sustainability at Valmet e-learning,
also freely available to value chain workers in the online
PartnerAcademy platform.
Vice President of Supply Chain, Vice President of Sustainability, and
Vice President of Health, Safety and Environment are the most
senior roles in the organization that have operational responsibility
for ensuring that the engagement with value chain workers happens.
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S2-3: Process to remediate negative impacts and
channels for value chain workers to raise concer ns
Valmet encourages its own workforce and all its stakeholders,
including value-chain workers, to raise concerns about possible
violations of Valmet’s Code of Conduct, unethical business
behavior, or other misconduct. Valmet also offers TrustLine channel
for reporting suspected violations of Valmet’s Code of Conduct.
TrustLine is available for everyone 24/7 in Valmet’s intranet and on
its external website, and it is designed to guarantee anonymity. It
provides Valmet employees and other stakeholders, including value-
chain workers, with the possibility to report concerns anonymously
and in their native language. The process of tracking and
monitoring issues raised, and how individuals who use the reporting
channel are protected, is described in more detail under G1-1.
As a part of Valmet’s human rights due diligence process, Valmet
has a remediation process in place. Actions to provide or contribute
to remedies for material negative impacts on value-chain workers
depend on the nature of the case. In the event of a serious human
rights violation occurring, an Incident Management Team is
established to coordinate the remediation actions and to ensure their
implementation. For serious health and safety incidents, Valmet has
a Health and Safety incident investigation guideline, which includes
the approach for corrective actions.
Valmet supports its business partners in continuous improvement
and does not terminate cooperation with a supplier that undertakes
to resolve the grievances identified in the Supplier Audits or Human
Rights Impact Assessments. The implementation of corrective
action plans and the follow-up of the remediation process are
integral components of both Supplier Audits and Social and Human
Rights Impact Assessments. Suppliers are excluded from contracting
if they cannot achieve a remediation plan within a set time frame, or
if suppliers are unwilling to comply with the corrective actions.
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S2-4, MDR-A: Taking action on material impacts on value chain workers, and approaches to managing
material risks and pursuing material opportunities related to value chain workers, and effectiveness of
those actions

Material sustainabili ty topic | Related material impact in brief | Action | Expected outcome | Scope | Time horizon | Resources to manage | Related target if applicable
Working conditions & other work- related rights | Value chain workers in high-risk countries 1 may lack legislated access to freedom of association, collective bargaining, adequate wages, and/or can be subject to excessive working hours. Value chain workers can be exposed to hazards in their work activities which can cause injuries and illnesses. Migrant workers have an increased risk of forced or bonded labor, and young workers may be exposed to hazardous or harmful work. Through supplier engagement processes, Valmet can improve working conditions and health and safety of value- chain workers. | Social and Human Rights Impact Assessment in value chain for suppliers with a heightened risk | Identification and control of risks | Upstream value chain | 2024 | Sustainability function | At least one Social and Human Rights Impact Assessment per year in own operations and in the value chain based on the risks identified
Preparation and publishing of Valmet's Supplier Code of Conduct | Publishing of Valmet's Supplier Code of Conduct to replace old Sustainable Supply Chain Policy | Upstream value chain | 2024 | Supply Chain function | No target, work completed
Sustainable Supply Chain process, including Supplier Sustainability Audits | Management of social and environmental sustainability risks and improvement of working conditions in the upstream value chain | Upstream value chain | 2024, continuous | Supply Chain function | 95 % of suppliers by spend have signed Valmet’s Sustainable Supply Chain Policy by 2025 Minimum of 40 Supplier Sustainability Audits conducted per year
Sustainability impact assessment when there is a significant change in market presence | Identification and control of risks | Own operations | 2024 | Sustainability function | No target, impact assessment performed always when there is a significant change in the market presence
Site sub- contracting and service supplier Health, Safety and Environment management process | Provision of safe and healthy workplaces for all | Own operations and Valmet's operations in customer premises | 2024, continuous | Health, Safety and Environment function | Continuous reduction in injury frequency to value chain workers (contracted workforce) whose work or workplace is controlled by Valmet
Social Responsibility Program | Contribute to additional positive impacts in the value chain | Value chain | 2024, continuous | Sustainability function, Areas | Continue implementing Social Responsibility Programs in all Valmet Areas through sponsorships and donations to local communities and affected stakeholders.

1 The definition of a high-risk country is disclosed in ESRS 2 S2 SBM-3
The key actions listed in the table address the material impacts
related to working conditions and other work-related rights of value
chain workers.
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Valmet's Sustainability Due Diligence Framework
Valmet’s due diligence process covers Valmet’s whole value chain
and includes actions and processes used to manage, i.a., material
impacts related to working conditions and other work-related rights
of value-chain workers. Valmet has embedded sustainability due
diligence into management systems and integrated it into Valmet
processes. More details about Valmet’s due diligence process can be
found under ESRS 2 GOV-4. The key actions listed in the table
above are part of Valmet’s Due Diligence Framework through which
Valmet mitigates and prevents negative material impacts on value
chain workers and aim to achieve positive impacts for value chain
workers.
Sustainable supply chain process
To identify, assess, and manage social and environmental
sustainability risks among its workers in the supply chain, Valmet
has a global supplier sustainability management process which is
integrated into Valmet's systems.
The sustainable supply chain process consists of:
1. Supplier Code of Conduct
2. Sustainability Risk Assessment
3. Supplier Sustainability Self-Assessment
4. Supplier Sustainability Audits conducted by external auditor
5. Social and Human Rights Impact Assessment for suppliers with a
heightened risk
Supplier Sustainability Risk Assessment and Self-
Assessment
Suppliers’ commitment to Valmet’s Supplier Code of Conduct is the
starting point for entering into a business relationship with Valmet.
In addition, from 2024, suppliers of manufactured goods must
follow Valmet’s minimum quality and health, safety and
environment requirements for suppliers.
Valmet screens all new direct suppliers from a sustainability risk
perspective, using environmental and social criteria based on the
country of purchase and the purchasing category. Based on this
assessment, Valmet’s suppliers have been categorized with
sustainability risk levels. Suppliers, depending on their risk category,
are obliged to carry out a Sustainability Self-Assessment. The results
of this assessment, in conjunction with risk factors, may subject
them to Sustainability Audits.
Supplier Sustainability Audits
To ensure compliance with the requirements of the Supplier Code of
Conduct and with related local and international laws, Valmet has a
systematic auditing framework in place. Valmet's Sustainability
Audits follow Valmet’s own auditing methodology based on
Valmet’s Supplier Code of Conduct and on SA8000 and SMETA
auditing frameworks, and the methodology covers human and labor
rights, environmental impacts, and governance-related topics. In
2024, Valmet conducted 45 Supplier Sustainability Audits in 15
countries with a certified third-party auditor. Audits are carried out
globally in all five areas where Valmet operates and are coordinated
by local area coordinators. Suppliers’ workers are always engaged
during the Sustainability Audits. In 2024, the findings of these audits
were mainly related to human and labor rights and health, safety
and environmental management.
Valmet focuses on ensuring the audit follow-up process and the
verification of agreed corrective actions. All the audited suppliers
have an agreed corrective action plan in place, and Valmet supports
suppliers with the implementation of identified corrective actions.
Of all corrective actions agreed with suppliers in 2024, 68 percent
had been completed and verified by the end of the year. Altogether,
94 percent of all actions agreed with suppliers as part of the auditing
process since 2015 had been completed and verified by the end
of 2024.
Valmet has identified increased sustainability risks at customers’
sites, where many subcontractors and their subcontractors operate.
Valmet has developed a specific auditing process for site works
suppliers to engage with the workers at sites, monitor sub-
contractors’ compliance more efficiently, and further increase the
visibility of the supply chain beyond tier 1 suppliers.
Social and Human Rights Impact Assessments
Valmet conducts Social and Human Rights Impact Assessments in
own locations and in its value chain. Valmet is committed to
conducting at least one large assessment annually. Assessments are
carried out by an independent third party. The assessments include
desktop research, extensive fieldwork and engagement with affected
stakeholders; employees, local communities, leased workforce, and
value chain workers such as service providers and suppliers'
workers. Impact assessment methodology is based on dialogue with
affected stakeholders and aims to engage with a wide range of
affected individuals, focusing on especially vulnerable groups.
Since 2017, Valmet has conducted assessments globally in China,
Indonesia, Thailand, India, Poland and Portugal. The majority of the
findings were related to the position of service providers and
subcontractors, collective bargaining, adequate wages, working
hours and rest periods. As a part of the process, corrective action
plans are drafted based on the assessment findings, and the progress
of the remediation plans are followed up.
Valmet started conducting supplier-specific Social and Human
Rights Impact Assessments in the supply chain conducted by third
party in 2024 to assess suppliers with an identified high
sustainability risk. The scope of the assessments covers value-chain
workers, and the methodology is based on dialogue with affected
stakeholders.
Sustainability assessment when there is a
significant change in market presence
Valmet carries out a comprehensive Sustainability Assessment
whenever there is a significant change in the market presence, such
as constructing a new site or service center, relocation of an existing
site, new market entry or large customer project with identified high
impact on environment, people or local communities. During the
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assessment, local stakeholders, local community representatives,
employees, and workers in the value chain are engaged. Assessment
findings are followed up and systematically mitigated, and the
results are taken for management review.
Health and safety management in Valmet and
Customer premises
Valmet works to provide safe and healthy workplaces for all and
actively collaborates with suppliers and customers to secure safety in
common work premises. Valmet's approach to health and safety
described in S1-4 includes processes for the management of supplier
workers in our own operations and in customer premises.
Valmet’s site sub-contracting and service supplier Health, Safety and
Environment management process includes the following steps:
• Health, Safety and Environment requirements are considered
when selecting suppliers and are then also included in purchasing
agreements.
• Supplier workers are required to complete an Health, Safety and
Environment induction to both Valmet and the specific
workplace before starting work.
• Risk assessment approval, safe work procedure review, and
permits-to-work are done during work execution.
• Regular inspections, and audits check supplier health, safety and
environment compliance and secure improvement actions if
required.
• Supplier workers are recognized and rewarded by Valmet for
good health, safety and environment performance and receive
direct feedback in the event of unsafe behavior or conditions.
• Supplier workers are encouraged to report health, safety and
environment observations and improvement ideas, and provide
health, safety and environment feedback to others in the
workplace.
• Supplier-related health, safety and environment near misses and
incidents are reported, investigated, and improvement actions
agreed.
• Supplier workers are involved in Health, Safety and Environment
activities such as toolbox talks.
• Every year, Valmet holds multiple Key Supplier Health, Safety and
Environment days where health, safety and environment
commitment and expectations are aligned, management practices
reviewed, and lessons and best practices shared.
S ocial Responsibility Program
Valmet’s global Social Responsibility Program, initiated in 2020, is
part of the Group’s Sustainability360° Agenda implementation. The
Social Responsibility Program aims to contribute positive impacts in
Valmet’s operating areas and enhance Valmet’s engagement in
communities through donations to local communities, affected
stakeholders, and non-profit organizations.
The program is based on three themes promoting science, nature,
and equal opportunities: “Towards the future with science,”
“Protecting the planet for the next generations,” and “Equal
opportunities for wellbeing.” Based on these themes, local projects
in all Valmet’s five operating areas around the world have been
selected for the program. In 2024, the global social responsibility
program continued with six projects. This year’s projects supported
local social and environmental development initiatives in Indonesia,
Poland, Brazil, Chile, China, and North America.
Management of material impacts
The Vice President of Supply Chain is responsible for managing
supply chain operations across Valmet's business lines and areas,
including the Sustainable Supply Chain Process. The Vice President
of Supply Chain reports to the Senior Vice President of Operational
Development. Resources include global category managers and the
sustainable supply chain manager. The Vice President of Health,
Safety and Environment is responsible for managing Health, Safety
and Environment operations across Valmet's business lines and
areas, including the Health, Safety and Environment management
process, and reports to the Senior Vice President of Operational
Development. The Vice President of Sustainability is responsible for
the Human Rights Statement, Sustainability360° Agenda, and
Sustainability Due Diligence process, and reports to the Senior Vice
President of Marketing, Communications, Sustainability, and
Corporate Relations.
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Metrics and targets
S2-5 MDR-T: Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunitie s

Material sustainability topic | Related material impact in brief | Target | Key performance indicator | Base year | Base line | Scope | Progress in 2024 | Target monitoring | Related policy
Working conditions & other work- related rights | Value-chain workers in high- risk countries 1 may lack legislated access to freedom of association, collective bargaining, adequate wages, and/or can be subject to excessive working hours. Value chain workers can be exposed to hazards in their work activities which can cause injuries and illnesses. Migrant workers have an increased risk of forced or bonded labor, and young workers may be exposed to hazardous or harmful work. Through supplier engagement processes, Valmet can improve working conditions and health and safety of value-chain workers. | At least one Social and Human Rights Impact Assessment per year in own operations and in the upstream value chain based on the risks identified 2 | Number of assessments conducted | 2017 | 1 | Own operations and upstream value chain | Valmet conducted one Social and Human Rights Impact Assessment including field work in value chain. | Annually in Sustainability function | Supplier Code of Conduct, Human Rights Statement
Reduction in number of recordable work- related injuries to non-employee workers and contracted workforce whose work or workplace is controlled by Valmet | The number of recordable work- related injuries | 2022 | 87 | Own operations in Valmet and Customer premises | North America 1 South America 13 EMEA 34 China 3 Asia-Pacific 0 TOTAL 51 | Monthly in business management reporting and review processes. | Health, Safety and Environment Policy
Reduction in injury frequency to non- employee workers and contracted workforce whose work or workplace is controlled by Valmet | Total recordable injury frequency (TRIF) | 2022 | 4.7 | Own operations in Valmet and Customer premises | In 2024, TRIF increased slightly to 4.8. Collaboration with sub-contractors on HSE improvement was ramped during the year. | Monthly in business management reporting and review processes. | Health, Safety and Environment Policy
Minimum 25 supplier Health, Safety and Environment events per year | Number of Supplier Health, Safety and Environment events | 2024 | 27 | Contracted workforce in our own operations in Valmet and Customer premises | In 2024, 27 Supplier Health, Safety and Environment events were held. | Monthly in Health, Safety and Environment management team | Health, Safety and Environment Policy, Supplier Code of Conduct
Minimum 40 Supplier Sustainability Audits conducted per year | Number of Supplier Sustainability Audits conducted | 2022 | 45 | Upstream value chain | Valmet conducted 45 Supplier Sustainability Audits with a third-party auditor | Monthly in Supply Chain management team | Supplier Code of Conduct (previously Sustainable Supply Chain policy)
95% of suppliers have signed Valmet’s Sustainable Supply Chain Policy by 2025 | % of suppliers by spend who have signed Valmet's Sustainable Supply Chain Policy | 2022 | 82% | Value chain | By the end of 2024, 94.3% of our existing suppliers had signed the policy. | Monthly in Supply Chain management team | Supplier Code of Conduct (previously Sustainable Supply Chain policy)

1 The definition of a high-risk country is disclosed in ESRS 2 S2 SBM-3
2 Target scope related to Social and Human Rights Impact Assessment has been extended to cover value chain workers in 2024 and therefore the KPI has also been updated.
Valmet has set the targets listed in the table to reduce negative
impacts and advance positive impacts on value chain workers. The
absolute targets address the objectives of Human Rights Statement,
Health, Safety and Environment (HSE) Policy, and Supplier Code
of Conduct.
The targets are part of Valmet’s Sustainability360° Agenda
implementation. The targets are being executed by Valmet’s Supply
Chain, Health, Safety and Environment, and Sustainability functions
and are cascaded through the organization in Strategic Must-Win
initiatives, Valmet's annual planning process and in personal target
setti ng. The targets of Valmet’s Sustainability360° Agenda were set
as part of a materiality assessment process which included an
analysis of the business environment, benchmarks market drivers,
future regulatory requirements, and engagement with relevant
stakeholders and experts. Progress on the targets is publicly available
on the Company website.
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Governance information
G1: Business conduct
Governance
ESRS 2 G OV-1: The role of the administrative,
supervisory and management bodies
This information is reported under ESRS 2 GOV-1.
Impact, risks, and opportunity management
E SRS 2 IRO-1: Description of the processes to
identify and assess material business conduct -
related impacts, risks and opportunities
This information is reported under ESRS 2 IRO-1.
G1-1, MDR-P: Corporate culture and business
conduc t policies
Valmet has adopted Valmet’s Code of Conduct, Anti-Corruption
Policy, Compliance Reporting Guideline and Supplier Code of
Conduct to manage the following material impacts related to
business conduct matters:
• Valmet's actions to promote corporate culture ensures that
Valmet does business ethically and legally (actual positive impact)
• Failures in creating an ethical corporate culture can lead to
unethical or illegal business conduct. (potential negative impact)
• Valmet’s actions to promote corporate culture ensure that
employees and stakeholders feel comfortable raising concerns,
and the whistleblowers are protected and any potential
misconduct is caught before severe consequences (actual positive
impact)
• Failure to protect whistleblowers can lead to retaliation against the
reporter (potential negative impact)
• Valmet's measures to prevent corruption and bribery promote the
reputation as a reliable partner, with whom ethical business
conduct principles are implemented (actual positive impact)
• Valmet's inadequate measures to prevent corruption a nd bribery
may lead to violation of the Code of Conduct and illegal behavior.
Being involved in a corruption or bribery incident would have
negative effects on people and society (potential negative impact)
• Valmet’s purchases of goo ds and services contributes to the
employment of value-chain workers. Valmet’s Supplier Code of
Conduct promotes sustainable business practices in the supply
chain (actual positive impact)
• Failures to comply with Valmet's payment practices could cause
negative impacts to suppliers (potential negative impact)
Valmet’s Code of Conduct
Valmet’s Code of Conduct defines Valmet’s requirements and
expectations for corporate culture and includes topics such as ethical
business practices, human rights, compliance with laws, protection
of Valmet's assets, anti-corruption compliance, respectful work
environment, health, safety, and wellbeing; and raising concerns.
Valmet’s Code of Conduct is applicable to all Valmet employees, as
well as external stakeholders. The Chief Executive Officer is the most
senior level accountable for the policy’s implementation.
Valmet Anti-Corruption Policy
Valmet's Anti-Corruption Policy contains the requirements, rules
and procedures that ensure all Valmet employees and those acting
on Valmet's behalf understand and comply with all applicable anti-
corruption laws in all of Valmet's business operations and are not
involved in any forms of bribery or corruption. It is applicable to all
Valmet employees and those who act on Valmet's behalf. The Chief
Financial Officer is the most senior level accountable for the policy’s
implementation.
Valmet Compliance Reporting Guideline
Valmet's Compliance Reporting Guideline describes the process for
raising concerns on potential misconduct within Valmet and
determines the investigation process. It also guarantees the
protection of whistleblowers and includes a details on how they are
protected. It is applicable to all Valmet employees. The Chief
Financial Officer and Senior Vice President of Human Resources are
the most senior level accountable for the implementation of the
guidelines.
Valmet's Supplier Code of Conduct
The Supplier Code of Conduct defines principles that suppliers are
required to comply with. The supplier shall ensure that all its
employees, permanent and temporary, as well as its suppliers, and
sub-suppli ers, recognize and comply with the requirements set out
in the policy. Valmet’s Supplier Code of Conduct covers human
rights and requires the suppliers to comply with all applicable
national laws and regulations regarding human and labor rights, as
well as acknowledge changes in them. The content and requirements
set in the Supplier Code of Conduct are described in more detail in
section S2-1.
V almet's Sustainable Supply Chain policy was renewed in 2024 and
the renewed policy is called Supplier Code of Conduct.
Corporate Culture and business conduct
Valmet’s daily operations are directed by our general operating
principles, which include Valmet’s Code of Conduct and related
policies. These principles form the basis of our ethical corporate
culture and sustainable business practices. Valmet policies, business
processes, procedures, guidelines, work instructions, and templates
are stored and managed in the Valmet Handbook, accessible to all
Valmet employees.
Valmet’s Code of Conduct guides the actions and decisions of both
Valmet’s employees and its business partners. It is approved by the
Valmet Board of Directors. Valmet’s Code of Conduct covers topics
such as Valmet’s commitment to integrity, compliance with
applicable laws, protection of Group property and personal data,
rejection of corruption, respect for human rights, health, safety and
wellbeing, quality, and environmental topics. The Code of Conduct
applies to everyone, everywhere, every day. The Code of Conduct
includes references to Valmet’s most important policies and other
guidance related to business conduct, which must be followed by
Valmet employees.
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Valmet’s Ethics & Compliance Program ensures that every employee
understands their responsibility to maintain a strong corporate
culture and conduct business ethically and legally. The program’s
purpose is to establish and develop an ethical corporate culture. This
is achieved by creating and implementing policies and processes that
support this goal. To ensure the Ethics & Compliance Program
reaches all Valmet Business Lines and Areas, Valmet has established
an Ethics & Compliance network. This network, representing all
Valmet businesses and areas, ensures that ethical business conduct
requirements and updates to the Ethics & Compliance Program are
communicated and promoted globally throughout Valmet.
Valmet has a Group-level risk assessments that covers all Valmet’s
operations. One tool for risk assessments is the FRIME Audits,
which cover five key units annually and account for about 80
percent of Valmet’s net sales within a five-year evaluation cycle.
Corruption risks are assessed as part of compliance and crime-
related risks, e.g., fraud and misconduct, in the FRIME Audits, and
in Valmet’s annual Group-level Risk Assessment Process, including
corporate Internal Audits. In 2024, four corporate Internal Audits
were conducted at Valmet’s locations, including an evaluation of the
effectiveness of anti-corruption and misconduct reporting.
Valmet provides Code of Conduct training and communications to
our employees on all our available internal channels to inform them
of the Group’s expectations and requirements related to corporate
culture and business conduct. A renewed Code of Conduct was
published at the end of 2023, and in 2024, the focus was on ensuring
all Valmet employees knew its requirements and were committed to
following them. The revised Code of Conduct e-learning course was
assigned in 2024 to all Valmet employees. It reached a completion
rate of 98 percent by year-end. 100 percent of the Executive Team
completed the e-learning course. In some locations, the training was
held as classroom training for blue-collar employees who lacked
access to laptops. The e-learning course includes sections on ethical
business practices, the content of the Code of Conduct, and how to
report potential concerns related to unethical behavior or
misconduct. It is mandatory for all Valmet employees, and it must
be completed by everyone every second year. All e-learning
completion percentages are extracted automatically from Valmet's
Human Resources system.
In 2024, Valmet completed a functions-at-risk assessment to identify
functions and business that were at a higher risk of being involved in
bribery and corruption. The result was that these functions included
Business Line and Area management, sales and procurement in
certain countries, and the logistics function.
P rotection of whistleblowers
Valmet encourages employees and stakeholders to voice concerns
about potential violations of our Code of Conduct, unethical
business behavior, or other misconduct. Employees are advised to
report suspected issues to their managers, other management, the
Human Resources function, or directly to the Legal and Internal
Audit functions. Additionally, Valmet offers TrustLine, a third-
party-operated reporting channel, for confidential and, if desired,
anonymous reporting of suspected breaches. TrustLine is available
24/7 in Valmet’s intranet and on its external website, allowing
reports to be made online or via a call center. Valmet welcomes
reports from both internal and external stakeholders.
Valmet does not tolerate retaliation against any person who reports
suspected misconduct in good faith or assists in investigations. If a
reporter feels that they are being subject to retaliation, they are
advised to contact Head of Internal Audit directly. All cases of
retaliation are also reported to Valmet’s Board Audit Committee.
To investigate potential misconduct, including allegations or
suspected incidents of corruption and bribery, Valmet follows its
Compliance Reporting Guideline. The process described in the
guideline ensures that all matters within the scope of the process are
investigated promptly, independently, and objectively. The guideline
states that the reporting system and the process of handling the
reports are managed by the Ethics & Compliance and Internal Audit
functions. The guideline requires investigations to be led by an
impartial person or department. Any persons who are or may be
involved in the alleged misconduct will not be allowed to perform
any investigative actions. The guideline contains details on how the
investigations are handled, how potential consequences and follow-
up are determined, and how the conclusions of the investigations are
communicated to the whistleblower. In addition to the Compliance
Reporting Guideline, Valmet has an Investigation documentation
template with instructions on how case investigations are planned,
conducted, and documented. They are both available to all
employees in Valmet’s intranet. The entire process has been
amended in accordance with the requirements of Directive (EU)
2019/1937 and its applicable national implementations.
Valmet’s Compliance Committee organization, which oversees
misconduct investigations, consists of several Compliance
Committees that meet quarterly. These committees ensure that
follow-up actions and remedies are effective based on the facts of
each case. Area Compliance Committees have the authority to
decide on and implement follow-up actions for locally investigated
cases. The Corporate Compliance Committee ensures that Areas
have appropriately investigated, handled, and concluded reported
cases, and that their follow-up actions align with corporate
standards. Matters that cannot be handled locally due to the nature
of the case or potential conflicts are escalated to be handled by the
Corporate Compliance Committee. It has been agreed which cases
are also reported to the Chief Executive Officer and/or Board Audit
Committee. In 2024, four cases were reported to the Board Audit
Committee.
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G1, MDR-A: Taking action on material impacts on business conduct, and effectiveness of those actions

Material sustainability topic | Related material impact in brief | Action | Expected outcome | Scope | Time horizon | Resources to manage | Related target if applicable
Corporate culture | Valmet’s actions to promote corporate culture ensure that Valmet does business ethically and legally. This enables employees to feel safe working for Valmet, and stakeholders to consider Valmet a trusted business partner | Employee Code of Conduct e-learning | Valmet's own workforce is committed to ethical and legal corporate culture | Own operations | 2024 | Ethics & Compliance, Human Resources, Valmet line managers | 100% of employees have completed Valmet’s renewed Code of Conduct e-learning course
Corruption and bribery | Successful measures to prevent corruption and bribery promote Valmet’s reputation as a reliable partner, with whom ethical business conduct principles are implemented | Assessment of functions at risk of being involved in bribery and corruption | Ability to target trainings to relevant functions | Own operations | 2024 | Ethics & Compliance | Not applicable

The actions listed in the table address the material impacts related to
Corporate culture and Corruption and bribery. The actions address
the objectives of Valmet’s Code of Conduct.
G1, MDR-T: Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities

Material sustainability topic | Related material impact in brief | Target | Key performance indicator | Base year | Base line | Scope | Progress in 2024 | Related policy
Corporate culture | Valmet’s actions to promote corporate culture ensure that Valmet does business ethically and legally. This enables employees to feel safe working for Valmet, and stakeholders to consider Valmet a trusted business partner | 100% of employees have completed Valmet’s renewed Code of Conduct e-learning course | % of employees having completed the Code of Conduct e- learning course | 2023 (previous version of Code of Conduct e- learning) | 89% | Own operations | 98% of employees completed Valmet's renewed Code of Conduct e-learning course | Valmet’s Code of Conduct

Valmet has set the targets listed in the table to reduce negative
impacts and advance positive impacts on Corporate culture. The
absolute targets address the objectives of Valmet’s Code of Conduct.
Targets are part of Valmet’s Sustainability360° Agenda
implementation 2022–2024, and are executed jointly by Ethics &
Compliance and Human Resources functions, and Valmet's line
managers. Targets were set by Valmet's Corporate Compliance
Committee, which also monitors their progress.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
G1-2: Management of relationships with suppliers
Valmet’s Supply Chain manages all Valmet’s direct and indirect
procurement and logistics sourcing through a network of teams in
Valmet’s b usiness lines and areas.
The Supplier Relationship Management Program is Valmet’s
systematic way of managing and developing Valmet’s supplier
relationships to optimize company value through proactive
interaction, two-way performance monitoring, and risk minimizing.
Valmet’s target is to develop mutually beneficial relationships with
suppliers.
Valmet develops and manages supplier relationships to ensure that
its supply meets demand expectations. Valmet’s Supply Chain aims
to prevent risks related to the supplier base as much as possible.
Risks are mitigated by systematic supplier relationship management
and clear communication. Such risks can include the business
continuity and financials of suppliers and their capacity, logistics,
late deliveries and poor quality, reputational risks due to non-
compliance of sustainability, legal and IPR risks, and profitability
risks due to cost inflation. In addition, risks are managed by
avoiding monopolistic suppliers, the early involvement of the supply
chain and suppliers, by making sound contracts with suppliers,
using suitable and reliable suppliers, order and quality follow-up,
and through audits and training.
Valmet’s global payment policies define uniform guidelines for its
supplier payment strategy and methods applicable in all Valmet
units. Valmet aims for payment no later than the due date. Valmet’s
payment practices are described in section G1-6 – Payment
practices.
Valmet screens all new direct suppliers from a sustainability risk
perspective, using environmental and social criteria. The screening
criteria are based on Valmet’s requirements in the Supplier Code of
Conduct, covering business ethics, compliance, human and labor
rights, health, safety, climate, and environmental management, and
product compliance and safety topics. Valmet has integrated both
environmental and social criteria into its policies and related
processes to ensure the environment and human rights are respected
and promoted throughout the value chain.
The applicable policies, processes and actions are further outlined in
sections S2-1 and S2-4.
G1-3: Pre vention and detection of corruption
and bribery
Valmet has zero tolerance of all forms of bribery and corruption.
Valmet is committed to conducting all activities in accordance with
applicable anti-bribery and corruption laws and preventing
corruption and bribery. Valmet’s anti-corruption approach is set out
in the Code of Conduct and related Anti-Corruption Policy, which
clearly prohibits bribery and corruption. Valmet’s Anti-Corruption
Policy contains the rules, and procedures that ensure all Valmet
employees and those acting on our behalf understand and comply
with applicable anti-corruption laws in all our business operations.
To have a more effective procedure for preventing and detecting
incidents of corruption and bribery, Valmet updated the Anti-
Corruption Policy in 2024 and issued a new Anti-Corruption
Guideline. The new Guideline contains more detailed requirements
and instructions for Valmet employees to ensure that they are not
involved in any form of corruption or bribery. Valmet's Anti-
Corruption Policy also contains the requirement to report any
detected potential incidents of corruption or bribery. Valmet’s Anti-
Corruption Policy is also available publicly on Valmet’s external
website, and the Anti-Corruption Guidelines are available in
Valmet’s intranet.
If a Valmet employee detects an allegation or incident of corruption,
they are required to report it to one of Valmet's misconduct
reporting channels. The process for raising concerns on unethical
behavior and misconduct (including incidents corruption or
bribery) is described in more detail in G1-1. In addition, identifying
possible incidents of corruption are part of Corporate Internal
Audits.
All cases of confirmed corruption or bribery are reported to the
President and Chief Executive Officer, Chief Financial Officer, and
Board's Audit Committee.
In addition to the Anti-Corruption Policy and Guideline being
available to Valmet employees, all Valmet employees need to
complete a mandatory training session on the Code of Conduct,
which includes a section on corruption and bribery. The e-learning
course was updated in 2024, and it was issued as mandatory tr aining
for all Valmet employees, reaching a completion percentage of 98 by
th e end of 2024. Valmet's Chief Executive Officer and Executive
Team completed Valmet’s Code of Conduct course in 2024.
Valmet also has a more detailed Anti-Corruption e-learning course,
which was updated in 2024. It goes through Valmet’s rules and
requirements related to corruption and bribery in more detail and
includes several example cases for employees to apply the rules in
practice. It was issued in November 2024 to management and
functions-at-risk of corruption and bribery. The completion
percentage by year-end was 72 percent, covering the equivalent
percent of the functions-at-risk. It is clearly stated in the policy and
training what the implications for being involved in corruption or
bribery are.
All e-learning completion percentages are extracted from Valmet's
Human Resources system.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
REPORT OF THE BOARD OF DIRECTORS
Metrics and targets
G1-4: Confirmed incidents of corruption and bribery

Confirmed violations of anti-corruption and anti-bribery laws
| 2024
Number of convictions | 0
Amount of fines (EUR) | 0

No actions were required to address breaches in anti-corruption and
anti-bribery procedures and standards in 2024. Improvements made
to the Anti-corruption Compliance Program in 2024, including the
launch of a new policy, guideline, and e-learning course, are detailed
in section G1-3.
The number of convictions and amount of fines are extracted from
Valmet's internal disputes register database.
G1-6: Payment practices
Valmet pays its suppliers on average 53 days after the date when the
contractual payment term starts to be calculated.
Valmet’s standard payment terms are 60 days for all suppliers and
geographies. Depending on the circumstances, the payment terms
may vary, and shortened payment terms can be acknowledged for
smaller suppliers. On average 98 percent of invoices received by
Valmet are aligned with payment terms of 60 days or less.
The above disclosures are based on data covering approximately 75
percent of Valmet’s direct and indirect purchases.
Valmet is not party to any legal proceedings due to late payments.
104
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
FINANCIAL INDICATORS
Financial indicators

| As at and for the twelve months ended December 31
EUR million | 2024 | 2023 | 2022 | 2021 | 2020
Orders received | 5,837 | 4,955 | 5,194 | 4,740 | 3,653
Order backlog at end of year | 4,452 | 3,973 | 4,403 | 4,096 | 3,257
Net sales | 5,359 | 5,532 | 5,074 | 3,935 | 3,740
Net sales change, % | -3% | 9% | 29% | 5% | 5%
Comparable EBITA | 609 | 619 | 533 | 429 | 365
% of net sales | 11.4% | 11.2% | 10.5% | 10.9% | 9.8%
EBITA | 557 | 605 | 550 | 448 | 355
% of net sales | 10.4% | 10.9% | 10.8% | 11.4% | 9.5%
Operating profit | 449 | 507 | 436 | 399 | 319
% of net sales | 8.4% | 9.2% | 8.6% | 10.1% | 8.5%
Profit before taxes | 383 | 473 | 431 | 395 | 307
% of net sales | 7.2% | 8.5% | 8.5% | 10.0% | 8.2%
Profit for the period | 281 | 359 | 338 | 296 | 231
% of net sales | 5.2% | 6.5% | 6.7% | 7.5% | 6.2%
Profit attributable to owners of the parent | 280 | 357 | 337 | 296 | 231
Amortization | -108 | -98 | -114 | -49 | -36
Depreciation, property, plant and equipment (excl. right-of-use assets) | -63 | -58 | -55 | -47 | -47
Depreciation, right-of-use assets | -48 | -41 | -34 | -24 | -24
Depreciation and amortization, total | -219 | -196 | -203 | -120 | -106
% of net sales | -4.1% | -3.6% | -4.0% | -3.0% | -2.8%
Cash flow provided by operating activities | 554 | 352 | 36 | 482 | 532
Cash flow after investing activities | 316 | -181 | 56 | 382 | -60
Gross capital expenditure (excl. business combinations and right-of-use assets) | -107 | -125 | -112 | -97 | -89
Business combinations, net of cash acquired and loans repaid | -135 | -415 | 117 | -15 | -48
Additions to investments in associated companies | — | — | — | — | -456
Comparable return on capital employed (ROCE) before taxes, % | 12.7% | 14.5% | 17.0% | 22.6% | 22.3%
Return on capital employed (ROCE) before taxes, % | 11.4% | 14.2% | 17.6% | 23.7% | 21.6%
Total assets | 6,832 | 7,064 | 6,271 | 4,420 | 3,959
Equity attributable to owners of the parent | 2,607 | 2,565 | 2,494 | 1,326 | 1,137
Total equity | 2,614 | 2,572 | 2,499 | 1,332 | 1,142
Interest-bearing liabilities | 1,544 | 1,484 | 809 | 477 | 497
Net interest-bearing liabilities | 1,032 | 1,027 | 502 | -88 | 149
Net working capital (NWC) | 134 | 191 | -82 | -673 | -595
Return on equity (ROE), % | 10.8% | 14.1% | 17.6% | 23.9% | 21.2%
Net debt to EBITDA ratio | 1.55 | 1.46 | 0.78 | -0.17 | 0.35
Gearing, % | 39% | 40% | 20% | -7% | 13%
Equity to assets ratio, % | 44% | 43% | 49% | 42% | 39%
Average number of personnel | 19,297 | 18,130 | 16,554 | 14,163 | 13,615
Personnel at end of year | 19,310 | 19,160 | 17,548 | 14,246 | 14,046

105
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
FORMULAS FOR CALCULATION OF INDICATORS
Formulas for calculation of indicators
In addition to financial performance indicators as defined by IFRS
Accounting Standards, Valmet publishes certain other widely used
measures of performance that can be derived from figures in the
Consolidated statement of income and financial position, as well as
notes thereto. The formulas for calculation of these alternative
performance measures are presented below.

EBITA: |  | Comparable return on capital employed (ROCE) before taxes, %: |
Operating profit + amortization |  | Profit before taxes + interest and other financial expenses +/- items affecting comparability | X 100
|  |  | Total equity + interest-bearing liabilities (average for the period)
Comparable EBITA: |  | Equity to assets ratio, %: |
Operating profit + amortization +/- items affecting comparability |  | Total equity | X 100
|  |  | Balance sheet total - amounts due to customers under revenue contracts
Earnings per share: |  | Gearing, %: |
Profit attributable to shareholders of the Company |  | Net interest-bearing liabilities | X 100
Average number of outstanding shares during period |  | Total equity
Diluted earnings per share: |  | Net interest-bearing liabilities: |
Profit attributable to shareholders of the Company |  | Non-current debt + non-current lease liabilities + current debt + current lease liabilities - cash and cash equivalents - other interest- bearing assets |
Average number of diluted shares during period |  |
Adjusted earnings per share: |  | Net debt to EBITDA ratio: |
Profit attributable to shareholders of the Company - expensing of fair value adjustments recognized in business combinations, net of tax |  | Net interest-bearing liabilities |
Average number of outstanding shares during period |  | Operating profit + amortization + depreciation |
Equity per share: |  | Dividend per share: |
Equity attributable to owners of the parent |  | Dividend for the financial period |
Number of outstanding shares at end of period |  | Number of shares at end of period |
Return on equity (ROE), %: |  | Dividend payout ratio, %: |
Profit for the period | X 100 | Dividend per share | X 100
Total equity (average for period) | Earnings per share
Return on capital employed (ROCE) before taxes, %: |  | Effective dividend yield, %: |
Profit before taxes + interest and other financial expenses | X 100 | Dividend per share | X 100
Total equity + interest-bearing liabilities (average for period) | Closing share price at end of period
|  |  | Price / earnings ratio: |
|  |  | Closing share price at end of period |
|  |  | Earnings per share |

106
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of income

EUR million | Note | 2024 | 2023
Net sales | 2, 3 | 5,359 | 5,532
Cost of goods sold | 4, 5, 7, 13 | -3,878 | -4,136
Gross profit |  | 1,481 | 1,396
Selling, general and administrative expenses | 4, 5, 13, 18 | -1,000 | -920
Other operating income | 19 | 25 | 64
Other operating expenses | 19 | -59 | -36
Share in profits and losses of associated companies, operative investments | 22 | 2 | 3
Operating profit |  | 449 | 507
Financial income | 10 | 24 | 17
Financial expenses | 10 | -90 | -52
Share in profits and losses of associated companies, financial investments | 22 | — | —
Profit before taxes |  | 383 | 473
Current tax expense |  | -119 | -135
Deferred taxes |  | 17 | 21
Income taxes, total | 16 | -103 | -114
Profit for the period |  | 281 | 359
Attributable to: |  |  |
Owners of the parent |  | 280 | 357
Non-controlling interests |  | 1 | 2
Profit for the period |  | 281 | 359
Earnings per share attributable to owners of the parent: |  |  |
Earnings per share, EUR |  | 1.52 | 1.94
Diluted earnings per share, EUR |  | 1.52 | 1.94

107
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of comprehensive i ncome

EUR million | Note | 2024 | 2023
Profit for the period |  | 281 | 359
Items that may be reclassified to profit or loss: |  |  |
Gains and losses on cash flow hedges | 8, 9, 17 | -8 | -12
Change in fair value reserve | 8 | 1 | —
Currency translation on subsidiary net investments | 17 | 2 | -21
Share of other comprehensive income of associated companies accounted for using equity method | 22 | — | —
Income tax relating to items that may be reclassified | 16 | 1 | 2
Total items that may be reclassified to profit or loss |  | -3 | -31
Items that will not be reclassified to profit or loss: |  |  |
Remeasurement of defined benefit plans | 15 | 13 | -18
Income tax relating to items that will not be reclassified | 16 | -3 | 3
Total items that will not be reclassified to profit or loss |  | 10 | -15
Other comprehensive income for the period |  | 6 | -46
Total comprehensive income for the period |  | 287 | 312
Attributable to: |  |  |
Owners of the parent |  | 286 | 311
Non-controlling interests |  | 1 | 1
Total comprehensive income for the period |  | 287 | 312

108
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
Assets

|  | As at December 31,
EUR million | Note | 2024 | 2023
Non-current assets |  |  |
Intangible assets |  |  |
Goodwill |  | 1,808 | 1,735
Other intangible assets |  | 1,127 | 1,142
Total intangible assets | 4 | 2,934 | 2,877
Property, plant and equipment |  |  |
Land and water areas |  | 40 | 40
Buildings and structures |  | 163 | 169
Machinery and equipment |  | 283 | 263
Right-of-use assets |  | 156 | 145
Assets under construction |  | 83 | 81
Total property, plant and equipment | 4, 5 | 726 | 698
Other non-current assets |  |  |
Investments in associated companies | 22 | 17 | 16
Non-current financial assets | 8, 9 | 40 | 31
Deferred tax assets | 16 | 94 | 90
Non-current income tax receivables | 16 | 39 | 41
Other non-current assets |  | 37 | 15
Total other non-current assets |  | 228 | 193
Total non-current assets |  | 3,888 | 3,768
Current assets |  |  |
Inventories |  |  |
Materials and supplies |  | 206 | 249
Work in progress |  | 396 | 472
Finished products |  | 301 | 327
Total inventories | 7 | 903 | 1,049
Receivables and other current assets |  |  |
Trade receivables | 8 | 862 | 973
Amounts due from customers under revenue contracts | 3 | 344 | 475
Other current financial assets | 8, 9 | 62 | 56
Income tax receivables |  | 64 | 56
Other current assets |  | 226 | 255
Cash and cash equivalents | 8 | 482 | 432
Total receivables and other current assets |  | 2,041 | 2,247
Total current assets |  | 2,944 | 3,296
Total assets |  | 6,832 | 7,064

109
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
Equity and liabilities

|  | As at December 31,
EUR million | Note | 2024 | 2023
Equity |  |  |
Share capital |  | 140 | 140
Reserve for invested unrestricted equity |  | 1,375 | 1,372
Cumulative translation adjustments |  | -40 | -42
Hedge and other reserves |  | -6 | -1
Retained earnings |  | 1,137 | 1,096
Equity attributable to owners of the parent | 17 | 2,607 | 2,565
Non-controlling interests |  | 7 | 6
Total equity |  | 2,614 | 2,572
Liabilities |  |  |
Non-current liabilities |  |  |
Non-current debt | 8 | 1,272 | 1,240
Non-current lease liabilities | 5, 8 | 107 | 98
Employee benefit liabilities | 15 | 157 | 154
Non-current provisions | 11 | 28 | 42
Other non-current liabilities | 8, 9 | 13 | 12
Deferred tax liabilities | 16 | 284 | 283
Total non-current liabilities |  | 1,862 | 1,828
Current liabilities |  |  |
Current debt | 8 | 115 | 103
Current lease liabilities | 5, 8 | 50 | 43
Trade payables | 8 | 460 | 520
Current provisions | 11 | 162 | 169
Amounts due to customers under revenue contracts | 3 | 904 | 1,151
Other current financial liabilities | 8, 9 | 31 | 34
Income tax liabilities |  | 75 | 85
Other current liabilities | 12 | 559 | 558
Total current liabilities |  | 2,356 | 2,664
Total liabilities |  | 4,218 | 4,492
Total equity and liabilities |  | 6,832 | 7,064

110
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows

EUR million | Note | 2024 | 2023
Cash flows from operating activities |  |  |
Profit for the period |  | 281 | 359
Adjustments |  |  |
Depreciation and amortization | 4, 5 | 219 | 196
Financial income and expenses | 10 | 65 | 34
Income taxes | 16 | 103 | 114
Other non-cash items |  | 31 | -11
Change in net working capital | 6 | 43 | -180
Interest paid |  | -74 | -31
Interest received |  | 21 | 13
Income taxes paid |  | -134 | -143
Net cash provided by (+) / used in (-) operating activities |  | 554 | 352
Cash flows from investing activities |  |  |
Capital expenditure on fixed assets | 4 | -107 | -125
Proceeds from sale of fixed assets |  | 2 | 6
Business combinations, net of cash acquired and loans repaid | 20 | -135 | -415
Investments in associated companies | 22 | 2 | 2
Net cash provided by (+) / used in (-) investing activities |  | -238 | -532
Cash flows from financing activities |  |  |
Repurchase of own shares |  | -3 | -4
Dividends paid | 17 | -249 | -240
Proceeds from non-current debt |  | 375 | 725
Repayments of current portion of non-current debt |  | -290 | -40
Repayments of lease liabilities | 8 | -52 | -44
Net proceeds from (+) / repayments of (-) current debt |  | -42 | -58
Financial investments |  | -7 | 7
Net cash provided by (+) / used in (-) financing activities |  | -268 | 346
Net increase (+) / decrease (-) in cash and cash equivalents |  | 48 | 165
Effect of changes in exchange rates on cash and cash equivalents |  | 3 | -10
Cash and cash equivalents at beginning of year | 8 | 432 | 277
Cash and cash equivalents at end of year |  | 482 | 432

111
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity

EUR million | Share capital | Reserve for invested unrestricted equity | Cumulative translation adjustments | Hedge and other reserves | Retained earnings | Equity attributable to owners of the parent | Non- controlling interests | Total equity
Balance at January 1, 2024 | 140 | 1,372 | -42 | -1 | 1,096 | 2,565 | 6 | 2,572
Profit for the period | — | — | — | — | 280 | 280 | 1 | 281
Other comprehensive income for the period |  |  |  |  |  |  |  |
Gains and losses on cash flow hedges |  |  |  |  |  |  |  |
Fair value gains and losses, net of tax | — | — | — | -10 | — | -10 | — | -10
Transferred to profit or loss, net of tax | — | — | — | 4 | — | 4 | — | 4
Change in fair value reserve, net of tax | — | — | — | 1 | — | 1 | — | 1
Currency translation on subsidiary net investments | — | — | 2 | — | — | 2 | — | 2
Remeasurement of defined benefit plans, net of tax | — | — | — | — | 10 | 10 | — | 10
Other comprehensive income for the period, total | — | — | 2 | -6 | 10 | 6 | — | 6
Total comprehensive income for the period | — | — | 2 | -6 | 290 | 286 | 1 | 287
Transactions with owners in their capacity as owners |  |  |  |  |  |  |  |
Dividends | — | — | — | — | -249 | -249 | -1 | -249
Repurchase of own shares | — | — | — | — | -3 | -3 | — | -3
Share-based payments, net of tax | — | 3 | — | — | 3 | 6 | — | 6
Non-controlling interest on acquisition of subsidiary | — | — | — | — | — | — | 1 | 1
Balance at December 31, 2024 | 140 | 1,375 | -40 | -6 | 1,137 | 2,607 | 7 | 2,614
Balance at January 1, 2023 | 140 | 1,369 | -20 | 8 | 997 | 2,494 | 5 | 2,499
Profit for the period | — | — | — | — | 357 | 357 | 2 | 359
Other comprehensive income for the period |  |  |  |  |  |  |  |
Gains and losses on cash flow hedges |  |  |  |  |  |  |  |
Fair value gains and losses, net of tax | — | — | — | — | — | — | — | —
Transferred to profit or loss, net of tax | — | — | — | -10 | — | -10 | — | -10
Change in fair value reserve, net of tax | — | — | — | — | — | — | — | —
Currency translation on subsidiary net investments | — | — | -21 | — | — | -21 | — | -21
Remeasurement of defined benefit plans, net of tax | — | — | — | — | -15 | -15 | — | -15
Other comprehensive income for the period, total | — | — | -21 | -10 | -15 | -46 | — | -46
Total comprehensive income for the period | — | — | -21 | -10 | 341 | 311 | 1 | 312
Transactions with owners in their capacity as owners |  |  |  |  |  |  |  |
Dividends | — | — | — | — | -239 | -239 | -1 | -240
Repurchase of own shares | — | — | — | — | -4 | -4 | — | -4
Share-based payments, net of tax | — | 3 | — | — | 1 | 4 | — | 4
Balance at December 31, 2023 | 140 | 1,372 | -42 | -1 | 1,096 | 2,565 | 6 | 2,572

112
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
1 | Basis of preparation
General information
Valmet Oyj (the “Company” or the “parent company”), a public
limited liability company , and its subsidiaries (together “ Valmet ,”
“Valmet Group” or the “Group”) form a global developer and
supplier of process technologies, automation and services for the
pulp, paper and energy industries. Valmet Oyj is domiciled in
Helsinki, and its registered address is Keilasatama 5, 02150 Espoo,
Finland. The Company’s shares are listed on the Nasdaq Helsinki
Ltd as of January 2, 2014. The copies of the consolidated financial
statements are available at www.valmet.com or the parent
company’s head office, Keilasatama 5, 02150 Espoo, Finland. The
consolidated financial statements were approved by Valmet’s Board
of Directors on February 12, 2025, after which, in accordance with
the Finnish Limited Liability Company Act, the financial statements
are approved, amended or rejected in the Annual General Meeting.
The consolidated financial statements for the year ended December
31, 2024, have been prepared in accordance with the basis of
presentation set out below and accounting policies described in
connection with each note.
These consolidated financial statements were prepared in
accordance with the IFRS Accounting Standards as adopted by the
European Union. The financial statements figures are presented
mainly in millions of euros subject to rounding, which may cause
some rounding inaccuracies in aggregate column and row totals.
Where necessary, comparative information has been reclassified to
achieve consistency in disclosure with current financial year
amounts.
Basis of presentation
Subsidiaries
Subsidiaries are all entities over which Valmet Group has control.
Control over an entity exists when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the
entity. When the Group has less than a majority of the voting or
similar rights of an entity, the Group considers all relevant facts and
circumstances in assessing whether it has control over an entity,
including the contractual arrangement with the other vote holders of
the entity, rights arising from other contractual arrangements, and
the Group’s voting rights and potential voting rights.
The Group reassesses whether it controls an entity if facts and
circumstances indicate that there are changes to one or more of the
three elements of control. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases. Intercompany
transactions, balances and unrealized gains and losses arising from
transactions between Group companies are eliminated.
Associated companies
The consolidated financial statements include associated companies
in which Valmet either holds between 20 percent to 50 percent of
the voting rights or in which Valmet otherwise has significant
influence but not control. Investments in associated companies are
accounted for using the equity method of accounting. Investments
in associated companies are initially recorded at cost, and the
carrying amount is increased or decreased to recognize Valmet’s
share of changes in net assets of the associated companies after the
date of the acquisition. The Group’s investment in associated
companies includes goodwill identified on acquisition. The Group
determines at each reporting date whether there is any objective
evidence that the investment in the associate is impaired.
Valmet’s share of post-acquisition profit or loss is recognized in
Consolidated statement of income and its share of post-acquisition
movements in other comprehensive income (OCI) is recognized in
Consolidated statement of comprehensive income with a
corresponding adjustment to the carrying amount of the investment.
The share of results of associated companies is presented in
Consolidated statement of income either included in Operating
profit or adjacent to Financial income and expenses below
Operating profit, depending on the nature of the investment.
Foreign currency translation
Items included in the financial statements of each of Valmet Group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
These consolidated financial statements are presented in euros,
which is the Group’s presentation currency. The statements of
income of foreign Group companies are translated into euros using
the average exchange rate for the reporting period. The statements
of financial position are translated at the closing exchange rate of the
reporting date. Translating the net income for the period using
different exchange rates in the Consolidated statement of income
and in the Consolidated statement of financial position results in a
translation difference, which is recognized in the Consolidated
statement of comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate. Exchange rate differences arising
are recognized in the Consolidated statement of comprehensive
income.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
When a subsidiary is disposed of or sold, exchange rate differences
that were recorded in equity are recognized in profit or loss as part
of the gain or loss on sale.
Foreign currency transactions
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing on the date of
transaction. Non-monetary items that are measured at fair value are
translated into functional currency using the exchange rate of the
transaction date.
Foreign exchange gains and losses resulting from the settlement of
such balances and from the translation of monetary assets and
liabilities denominated in foreign currencies at year-end exchange
rates, are recognized in Consolidated statement of income. Foreign
exchange gains and losses that relate to borrowings and cash and
cash equivalents are presented in Consolidated statement of income
within Financial income and expenses. All other foreign exchange
gains and losses are presented in Other operating income and
expenses, or in Net sales or Cost of goods sold.
Key exchange rates:

|  | Average rates | Year-end rates
|  | 2024 | 2023 | 2024 | 2023
USD | (US dollar) | 1.0826 | 1.0816 | 1.0389 | 1.1050
SEK | (Swedish krona) | 11.4226 | 11.4563 | 11.4590 | 11.0960
CNY | (Chinese yuan) | 7.7793 | 7.6589 | 7.5833 | 7.8509

Critical accounting estimates and
judgments
The preparation of financial statements in conformity with IFRS
Accounting Standards requires management to make estimates and
exercise judgment in the application of the accounting policies.
Estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. By definition, the resulting accounting estimates will
seldom equal the related actual results.
Material accounting policies applied, and critical accounting
estimates and judgments made are described adjacent to each note
as follows:

• Revenue recognition | Note 3
• Intangible assets and property, plant and equipment | Note 4
• Leases | Note 5
• Inventories | Note 7
• Financial assets and liabilities | Note 8
• Derivative financial instruments | Note 9
• Provisions | Note 11
• Employee benefit obligations | Note 15
• Income taxes | Note 16

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2 | Reporting segments and geographic
information
Accounting policies
The Group’s Chief Operating Decision Maker (CODM) is the
President and CEO of Valmet. Valmet has three operating segments
and three reportable segments for financial reporting purposes:
Services, Automation and Process Technologies. Corporate
functions are presented as Other.
The Services segment provides customers with flexible and fit-for-
purpose services throughout the lifecycle to improve process
performance, reliability and to extend product lifetime. The
Automation segment delivers automation solutions ranging from
single measurements to mill- or plant-wide process automation
systems, and mission-critical flow control technologies and services
for the process industries. The Process Technologies segment
provides technology solutions for pulp and energy production, as
well as for biomass conversion and emission control, and complete
production lines, machine rebuilds and process components for
board, tissue and paper production.
The financial reporting structure reflects Valmet’s operational
model, and is aligned with the way the CODM evaluates the
operational performance of the segments and allocates resources.
One key indicator of performance reviewed by the CODM is
Earnings before interest, taxes and amortization (EBITA).
Performance is also assessed through Comparable EBITA, i.e., with
EBITA excluding certain items of income and expense that reduce
the comparability of the Group’s performance from one period to
another. The alternative performance measures of EBITA and
Comparable EBITA, are published by Valmet as part of regulated
financial information to enable users of the financial information to
prepare more meaningful analysis on Valmet’s performance. Items
affecting comparability consist of income and expenses arising from
activities that amend the capacity of Valmet’s operations. Items
include restructuring costs, gains or losses on sale of businesses or
non-current assets, transaction costs related to business
combinations, and income and expenses incurred outside Valmet’s
normal course of business, such as impairment charges and income
and expenses recorded as a result of settlement payments to/from
third parties (e.g., penalties incurred as a result of tax audits or
settlements to closed lawsuits), share in profits and losses of
associated companies, as well as income and expenses arising from
changes in legislation expected to affect Valmet only temporarily
(e.g., customs or other tariffs imposed by authorities on Valmet’s
products).
Orders received:

EUR million | 2024 | 2023
Services | 1,915 | 1,760
Automation | 1,446 | 1,340
Process Technologies | 2,477 | 1,856
Total | 5,837 | 4,955

Net sales:

EUR million | 2024 | 2023
Services | 1,900 | 1,784
Automation | 1,437 | 1,328
Process Technologies | 2,023 | 2,420
Total | 5,359 | 5,532

Comparable EBITA:

EUR million | 2024 | 2023
Services | 331 | 312
Automation | 255 | 248
Process Technologies | 73 | 110
Other | -49 | -50
Total | 609 | 619

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Comparable EBITA, % of net sales:

| 2024 | 2023
Services | 17.4% | 17.5%
Automation | 17.7% | 18.6%
Process Technologies | 3.6% | 4.5%
Total | 11.4% | 11.2%

EBITA:

EUR million | 2024 | 2023
Services | 322 | 302
Automation | 248 | 245
Process Technologies | 42 | 116
Other | -56 | -58
Total | 557 | 605

EBITA, % of net sales:

| 2024 | 2023
Services | 17.0% | 16.9%
Automation | 17.2% | 18.5%
Process Technologies | 2.1% | 4.8%
Total | 10.4% | 10.9%

Items affecting comparability:

EUR million | 2024 | 2023
Services | -9 | -10
Automation | -7 | -2
Process Technologies | -30 | 6
Other | -7 | -8
Total | -53 | -14

Amortization:

EUR million | 2024 | 2023
Services | -22 | -10
Automation | -54 | -63
Process Technologies | -15 | -8
Other | -18 | -17
Total | -108 | -98

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation between Comparable EBITA, EBITA and Operating profit:

EUR million | 2024 | 2023
Comparable EBITA | 609 | 619
Items affecting comparability in cost of sales |  |
Expenses related to capacity adjustments | -11 | -8
Expensing of fair value adjustments recognized in business combinations | -16 | -8
Other items affecting comparability 1 | -4 | -17
Items affecting comparability in selling, general and administrative expenses |  |
Expenses related to capacity adjustments | -7 | —
Expenses related to acquisitions | -3 | -6
Other items affecting comparability 1 | -6 | -14
Items affecting comparability in other operating income and expenses |  |
Income and expenses related to capacity adjustments | -7 | 3
Expenses related to acquisitions | — | —
Other items affecting comparability 2 | — | 32
Items affecting comparability in share in profits and losses of associated companies, operative investments |  |
Other items affecting comparability | 2 | 3
EBITA | 557 | 605
Amortization included in cost of sales |  |
Other intangibles | -1 | -2
Amortization included in selling, general and administrative expenses |  |
Intangibles recognized in business combinations | -84 | -76
Other intangibles | -22 | -21
Amortization included in share in profits and losses of associated companies, operative investments |  |
Other intangibles | — | —
Operating profit | 449 | 507

1 2024 and 2023 figures include expenses related to the fire that happened in 2022 at Valmet’s Rautpohja factory site in Jyväskylä, Finland.
2 2024 and 2023 figures include income related to the fire that happened in 2022 at Valmet’s Rautpohja factory site in Jyväskylä, Finland.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Entity-wide information
Valmet has operations globally in approximately 40 countries.
Measured by net sales, the top three countries in 2024 were the USA,
China and Finland, which together accounted for 44 percent of total
net sales.
In 2023, the top three countries were the USA, China, and
Indonesia, which together accounted for 38 percent of total net sales.
Net sales from Finland (the country of domicile) amounted to EUR
417 million in 2024 (EUR 385 million).
N et sales by destina tion 2024, EUR 5,359 million
Net sales by destination 2023, EUR 5,532 million
Non-current assets by location:

EUR million | Finland | North America | South America | EMEA excluding Finland | China | Asia-Pacific | Non-allocated | Total
2024 | 352 | 219 | 39 | 222 | 105 | 72 | 2,707 | 3,717
2023 | 352 | 204 | 35 | 177 | 91 | 42 | 2,732 | 3,633

Non-current assets comprise intangible assets, property, plant and
equipment, investments in associated companies, and non-current
income tax receivables. Non-allocated assets include mainly
goodwill, investments in associated companies, non-current income
tax receivables and other fair value adjustments arising from
business combinations that have not been pushed down to adjust
the value of assets in the subsidiaries’ books.
Gross capital expenditure (excluding business combinations and right-of-use assets) by location:

EUR million | North America | South America | EMEA | China | Asia-Pacific | Total
2024 | 8 | 4 | 73 | 17 | 5 | 107
2023 | 16 | 7 | 82 | 15 | 4 | 125

Major customers
Valmet enters into large long-term projects which however
individually rarely contribute more than 10 percent of annual
revenue. In 2024 and 2023, there was no single customer with
revenue exceeding 10 percent of net sales.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3 | Revenue recognition
Accounting policies
Valmet supplies process technologies, automation systems, valves
and services primarily for the pulp, paper and energy industries, as
well as municipal and industrial heat and power producers. Valmet’s
customer base also includes other process industries and marine,
where automation solutions are widely used. In the process
technologies business, the Group’s revenue arises from projects, the
scope of which ranges from delivery of complete mill facilities on a
turnkey basis to single-section machine rebuilds, that may or may
not include process automation solutions. Service business revenue
includes revenue from short-term and long-term maintenance
contracts, smaller improvement and modification contracts,
rebuilds, as well as sale of spare parts and consumables. Process
technologies and service business revenue largely arises from the
same customers with service offering being focus ed on maintaining
installed base of equipment and automation solutions. Automation
business revenue arises from delivering automation solutions
ranging from single measurements to mill- or plant-wide process
automation systems, and mission-critical flow control technologies
and services for the process industrie s.
Revenue is recognized to depict the transfer of promised goods or
services to the customers in an amount that reflects the
consideration to which Valmet expects to be entitled, in exchange
for those goods or services. The timing and method as well as unit of
revenue recognition are determined in accordance with the five-step
model of IFRS 15 as follows:

Step 1: | Identification of the contract(s) with a customer
Step 2: | Identification of the performance obligations in the contract
Step 3: | Determination of the transaction price attached to the contract
Step 4: | Allocation of the transaction price to the performance obligations identified in the contract
Step 5: | Recognition of revenue when (or as) the entity satisfies a performance obligation

In long-term projects involving delivery of both equipment and
services, one or more performance obligations are identified. The
identification of performance obligations depends on the scope of
the project and terms of the contracts, and largely follows the level at
which quotes are being requested by the customers.
In short-term service contracts that involve delivery of a
combination of equipment and services, depending on the scope of
the contract and terms attached thereto, one or more performance
obligations are identified. When the scope of the contract involves
services provided at the customer site, such as installation,
maintenance, technical support or mechanical audits, these are
typically considered as a separate performance obligation from
delivery of significant equipment and services provided off-site. On
the other hand, when services in the scope of the contract are
performed at Valmet premises only, such as workshop services,
material and services typically cannot be identified separately, and
consistently only one performance obligation is identified.
In long-term service contracts where Valmet’s activities are largely
performed at the customer’s site, depending on the contract and
terms attached thereto, one or more performance obligations are
identified. When the scope of the contract involves various service
elements that are sold separately on a stand-alone basis, these
elements would typically be determined to consist of performance
obligations on their own.
Revenue is recognized when a customer obtains control of a good or
service. A customer obtains control when it has the ability to direct
the use of and obtain the benefits from the good or service, either
over time or at a point in time.
When Valmet determines that control of goods or services is
transferred over time, this is typically based either on that the
customer simultaneously receives and consumes benefits as Valmet
performs, or that Valmet’s performance creates an asset with no
alternative use throughout the duration of a contract and Valmet
has enforceable right to payment for performance completed
to date.
Deliverables within Valmet’s product offering that have the
characteristics of the first criterion include mill maintenance
services or other field services provided under long-term contracts,
in which the receipt and simultaneous consumption by the customer
of the benefits of Valmet’s performance can be readily identified.
Deliverables with the characteristics of the second criterion include
projects where the scope of the contract involves design and
construction of an asset according to customer specifications. The
assets created in these projects do not have alternative use because
the design is based on specific customer needs. When revenue is
recognized over time, progress towards complete satisfaction of the
performance obligation is measured using the cost-based input
method (cost-to-cost method). The cost-to-cost method is estimated
to result in a revenue profile that best depicts the transfer of control
of the deliverables to the customer.
Recognition of revenue at a point in time is applicable, among
others, in contracts where services are performed at Valmet’s
premises, and deliveries of spare parts, valves and consumables.
Control of deliverables typically transfers based on the delivery
terms used, at the takeover, or at a later point in time when
customer acceptance is received.
Valmet’s contracts often involve elements of variable consideration,
such as penalties, liquidated damages or performance bonus
arrangements. Variable consideration is estimated by using either
the expected value or the most likely amount -method, depending
on the type of variable element and related contractual terms and
conditions. The a mount of variable consideration is included in the
transaction price only to the extent that it is highly probable that a
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
significant reversal of revenue does not occur later. Transaction
prices are reassessed at each reporting date. Variable elements are
generally allocated proportionately to all performance obligations in
the contract, or when terms of the variable payments relate to
satisfying a specific performance obligation and the allocated
amount depicts the amount of consideration to which Valmet
expects to be entitled in exchange for transferring related goods or
services, variable consideration is allocated to that specific
performance obligation, and not all performance obligations in
the contract.
Valmet provides its customers with standard payment terms. If
extended payment terms exceeding one year are offered to
customers, the invoiced amount is discounted to its present value
and interest income is recognized over the credit term.
When Valmet incurs costs in fulfilling its contractual obligations,
these are expensed as incurred, unless costs can be capitalized as
inventory. The latter is typically the case in performance obligations
for which revenue is recognized at a point in time. Costs to obtain a
contract are expensed as incurred.

| Critical accounting estimates and judgments For performance obligations satisfied over time, the progress and the profitability are based on the management’s estimates, which require significant judgment concerning the stage of completion, the cost to complete, and the time of completion. Management regularly reviews the progress and execution of performance obligations. As part of the process, management reviews information including, but not limited to, key contractual obligations outstanding, project schedule, identified risks and opportunities, as well as changes in estimates of revenues and costs. A projected loss on a customer contract is recognized in full through profit or loss when it becomes known. |

| Valmet regularly enters into contracts where the consideration includes one or more variable elements. Variable consideration is estimated by using either the expected value or the most likely amount -method, depending on the type of the arrangement. In making judgments about variable consideration, Valmet considers historical, current and forecast information. The impact of changes in estimates is recognized in revenue in the period when the estimate is updated. |

Disaggregation of revenue
Valmet’s revenue is reported, and monitored by management, by
business line and area. Paper, and Pulp and Energy business lines’
revenue is derived from large long-term projects, for which revenue
is mostly recognized over time based on the cost-to-cost method.
For the projects that do not meet the over time revenue recognition
criteria, revenue is recognized at a point in time. Service business
line’s revenue is generated from a large volume of short-term
contracts with relatively low individual value, for which revenue is
mainly recognized at a point in time. Flow Control business line's
valves equipment sales are recognized at a point in time.
Automation business line’s revenue consists of long-term contracts
and short-term service contracts. The nature of long-term contracts,
and therefore also the revenue recognition method, is similar to
process technologies projects although with average contract values
being lower. Revenue for short-term service contracts is recognized
at a point in time. The n ature of revenue in each area in any given
reporting period is driven by volume and size of ongoing projects.
Net sales by business lines:

EUR million | 2024 | 2023
Services | 1,900 | 1,784
Flow Control | 791 | 777
Automation Systems | 646 | 551
Pulp and Energy | 870 | 1,067
Paper | 1,152 | 1,353
Total | 5,359 | 5,532

Timing of revenue recognition:

EUR million | 2024 | 2023
Performance obligations satisfied at a point in time | 3,006 | 2,670
Performance obligations satisfied over time | 2,353 | 2,862
Total | 5,359 | 5,532

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Contract balances
In order to mitigate credit risk and compensate for contract costs
incurred upfront, Valmet regularly requires advance payments from
its customers. During the reporting period Valmet had not entered
into any material contracts where the period between when Valmet
transfers a promised good or service to a customer and when the
customer pays for that good or service will be one year or more.
Neither were there any ongoing projects from previous reporting
periods for which the former would apply.
The creditworthiness of a customer is verified before entering into a
contract. However, if a risk of non-payment arises after contract
inception, the probability of collection of consideration is re-
evaluated and if assessed improbable, recognition of revenue is
discontinued. An allowance for non-collectability of open
receivables and contract assets is established as concluded
appropriate.
Valmet receives payments from customers based on invoicing
schedules as set out in the customer contracts. Changes in contract
assets and liabilities are due to Valmet’s performance under the
customer contracts. Amounts due from customers under revenue
contracts primarily relate to Valmet’s right to consideration for work
completed but not yet invoiced at the reporting date. These assets
are transferred to trade receivables when right to consideration
becomes unconditional, which is typically at the time when Valmet
has contractual right to issue an invoice. A significant part of
amounts due to customers is related to advance consideration
received from customers in long-term contracts for which revenue is
recognized over time. These amounts are recognized as revenue as
(or when) Valmet performs under the contracts.
The following tables show movements in amounts due from
customers under revenue contracts and amounts due to customers
under revenue contracts during the reporting period. Revenue
recognized in the period also includes revenue recognized related to
performance obligations satisfied in previous periods, the amount of
which however is insignificant.
Amounts due from customers under revenue contracts:

EUR million | 2024 | 2023
Balance at beginning of the period | 475 | 485
Translation differences | -3 | -1
Acquired in business combinations | 2 | —
Revenue recognized in the period | 733 | 1,148
Transfers to trade receivables | -864 | -1,157
Balance at end of the period | 344 | 475

Amounts due to customers under r eve nue contracts:

EUR million | 2024 | 2023
Balance at beginning of the period | 1,151 | 1,205
Translation differences | 18 | -18
Acquired in business combinations | 15 | 66
Revenue recognized in the period | -2,752 | -2,505
Consideration invoiced and/or received | 2,471 | 2,403
Balance at end of the period | 904 | 1,151

EUR million | 2024 | 2023
Amounts due to customers under revenue contracts for which revenue is recognized |  |
Point in time | 321 | 362
Over time | 583 | 789
Carrying value at end of the period | 904 | 1,151

Valmet typically issues contractual product warranties that
gu arantee the mechanical functioning of equipment delivered
during the agreed warranty period. Valmet does not issue service-
type warranties.
As at December 31, 2024, Valmet had no costs to obtain or fulfil
contracts capitalized under IFRS 15.
The aggregate amount of transaction price allocated to unsatisfied or
partially satisfied performance obligations as at December 31, 2024,
was EUR 4,452 million (EUR 3,973 million). Approximately EUR
3.1 billion of the order backlog is currently expected to be realized as
net sales during 2025 (at the end of December 2023, EUR ~3.3
billion was expected to be realized as net sales during 2024).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4 | Intangible assets and property, plant
and equipment
Accounting policies
Fixed assets consist of intangible assets and property, plant and
equipment. Intangible assets, which comprise goodwill, intangible
assets recognized in business combinations (such as technology and
customer relationships), capitalized software and other intangible
assets, are stated at historical cost less accumulated amortization and
impairment losses, if any. Goodwill is not amortized, but tested for
impairment.
Property, plant and equipment is stated at historical cost, less
accumulated depreciation and impairment l osse s, if any. Land and
water areas are not depreciated.
Subsequent improvement costs related to an asset are included in
the carrying value of such an asset or recognized as a separate asset,
as appropriate, only when the future economic benefits associated
with the costs are probable, and the related costs can be separated
from normal maintenance costs.
Depreciation and amortization
The a mortization of intangible assets with a definite useful life is
calculated on a straight-line basis over the expected economic lives
of the assets, being the following:

Patents and licenses | 5–10 years
Capitalized software | 3–10 years
Technology | 3–20 years
Customer relationships | 3–20 years
Other intangibles | 1–40 years

Depreciation of property, plant and equipment is calculated on a
straight-line basis over the expected useful lives of the assets, being
the following:

Buildings and structures | 15–40 years
Machinery and equipment | 3–20 years

Expected useful lives are reviewed at each balance sheet date, and if
they differ significantly from previous estimates, the remaining
depreciation periods are adjusted accordingly.
Impairment
The carrying value of fixed assets subject to amortization or
depreciation is reviewed for impairment whenever events and
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The recoverable amount of an asset is
the higher of its fair value and its value in use. An asset is impaired if
its carrying amount exceeds its recoverable amount, at which time
an impairment loss is recognized in the Consolidated statement of
income in Other operating expenses. The previously recognized
impairment loss may be reversed if, and only if, there is exceptional
and significant improvement in the circumstances having initially
caused the impairment.
The carrying value of goodwill is reviewed for impairment annually
or more frequently if facts and circumstances, such as decline in
sales, operating profit or cash flows, or material adverse changes in
the business environment, suggest that carrying value may not be
recoverable. Valmet has three cash generating units (CGUs) that
establish the first aggregation levels at which impairment testing can
be done. The testing of goodwill for impairment is performed at the
CGU level, as goodwill does not generate cash flows independently
of the CGUs. Valmet uses the value in use method to measure the
recoverable amount of goodwill subject to testing. Value in use is
estimated through the discounted cash flow method. A previously
recognized impairment loss on goodwill is not reversed even if there
is a significant improvement in circumstances, having initially
caused the impairment.

| Critical accounting estimates and judgments Impairment testing The preparation of impairment analysis requires use of numerous estimates. The valuation is inherently judgmental and highly susceptible to change from period to period because it requires management to make assumptions about future supply and demand related to its individual business units, future sales prices and achievable cost levels. The value of the benefits and savings expected from the efficiency improvement programs is inherently subjective. All outsized improvements are excluded from future cash inflows and outflows. The value in use of a cash-generating unit is determined by discounting estimated future cash flows with a discount rate approximating the weighted average cost of capital (WACC). The WACC is based on comparable peer industry betas and capital structure. Triggering events for impairment reviews at Valmet include the following: • A material permanent deterioration in the economic or political environment of the customers’ or Valmet's own activity • Businesses or asset’s significant under-performance relative to historical or projected future performance • Significant changes in Valmet’s strategic orientations affecting the business plans and previous investment policies. |

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Intangible assets:

EUR million | Goodwill | Intangible assets recognized in business combinations | Capitalized software | Other intangible assets | Total
2024 |  |  |  |  |
Acquisition cost at beginning of the period | 1,735 | 1,502 | 234 | 72 | 3,545
Translation differences | 9 | 4 | — | — | 13
Capital expenditure | — | — | — | 23 | 24
Acquired in business combinations | 63 | 69 | — | — | 133
Retirements | — | — | -7 | -10 | -16
Reclassifications | — | — | 18 | -18 | —
Other changes | — | — | — | 1 | 1
Acquisition cost at end of the period | 1,808 | 1,576 | 246 | 69 | 3,699
Accumulated amortization and impairment losses at beginning of the period | — | -483 | -130 | -55 | -668
Translation differences | — | -1 | — | — | —
Amortization | — | -84 | -20 | -3 | -108
Impairment losses | — | — | -3 | -2 | -5
Retirements | — | — | 7 | 10 | 16
Other changes | — | — | — | — | —
Accumulated amortization and impairment losses at end of the period | — | -568 | -146 | -51 | -764
Carrying value at end of the period | 1,808 | 1,008 | 100 | 18 | 2,934

EUR million | Goodwill | Intangible assets recognized in business combinations | Capitalized software | Other intangible assets | Total
2023 |  |  |  |  |
Acquisition cost at beginning of the period | 1,611 | 1,320 | 206 | 78 | 3,215
Translation differences | -3 | — | — | — | -3
Capital expenditure | — | — | — | 27 | 27
Acquired in business combinations | 128 | 182 | 1 | — | 311
Retirements | — | — | — | -2 | -2
Reclassifications | — | — | 28 | -28 | —
Other changes | — | — | — | -3 | -3
Acquisition cost at end of the period | 1,735 | 1,502 | 234 | 72 | 3,545
Accumulated amortization and impairment losses at beginning of the period | — | -407 | -111 | -56 | -575
Translation differences | — | — | — | — | —
Amortization | — | -76 | -19 | -4 | -98
Impairment losses | — | — | — | — | —
Retirements | — | — | — | 2 | 2
Other changes | — | — | — | 3 | 3
Accumulated amortization and impairment losses at end of the period | — | -483 | -130 | -55 | -668
Carrying value at end of the period | 1,735 | 1,020 | 105 | 17 | 2,877

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Property, plant and equipment (excluding right-of-use assets):

EUR million | Land and water areas | Buildings and structures | Machinery and equipment | Assets under construction | Total
2024 |  |  |  |  |
Acquisition cost at beginning of the period | 40 | 449 | 1,030 | 81 | 1,599
Translation differences | — | — | 6 | — | 6
Capital expenditure | — | 1 | 6 | 76 | 83
Acquired in business combinations | — | — | 6 | — | 6
Disposals | — | — | -10 | -1 | -11
Retirements | — | -3 | -14 | — | -17
Reclassifications | — | 14 | 59 | -74 | —
Other changes | — | — | — | — | —
Acquisition cost at end of the period | 41 | 461 | 1,083 | 83 | 1,667
Accumulated depreciation and impairment losses at beginning of the period | — | -280 | -767 | — | -1,046
Translation differences | — | -1 | -4 | — | -5
Depreciation | — | -15 | -48 | — | -63
Impairment losses | — | -6 | -2 | — | -8
Disposals | — | — | 9 | — | 9
Retirements | — | 3 | 14 | — | 17
Other changes | — | — | — | — | —
Accumulated depreciation and impairment losses at end of the period | — | -298 | -799 | — | -1,098
Carrying value at end of the period | 40 | 163 | 283 | 83 | 569

EUR million | Land and water areas | Buildings and structures | Machinery and equipment | Assets under construction | Total
2023 |  |  |  |  |
Acquisition cost at beginning of the period | 41 | 428 | 975 | 84 | 1,528
Translation differences | -1 | -6 | -13 | -1 | -21
Capital expenditure | — | 1 | 12 | 85 | 98
Acquired in business combinations | — | 12 | 16 | 1 | 29
Disposals | — | -7 | -18 | — | -25
Retirements | — | — | -8 | — | -9
Reclassifications | — | 21 | 67 | -87 | —
Other changes | — | — | — | -1 | -1
Acquisition cost at end of the period | 40 | 449 | 1,030 | 81 | 1,599
Accumulated depreciation and impairment losses at beginning of the period | — | -276 | -758 | — | -1,034
Translation differences | — | 3 | 10 | — | 13
Depreciation | — | -14 | -43 | — | -58
Impairment losses | — | — | — | — | —
Disposals | — | 7 | 16 | — | 23
Retirements | — | — | 8 | — | 9
Other changes | — | — | 1 | — | —
Accumulated depreciation and impairment losses at end of the period | — | -280 | -767 | — | -1,046
Carrying value at end of the period | 40 | 169 | 263 | 81 | 553

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Depreciation and amortization 2024,
EUR 219 million
Depreciation and amortization 2023,
EUR 196 million
Depreciation and amortization by function:

EUR million | 2024 | 2023
Cost of goods sold | -67 | -64
Selling, general and administrative expenses |  |
Marketing and selling | -8 | -7
Research and development | -6 | -5
Administrative | -138 | -120
Total | -219 | -196

Table does not include amortization included in share in profits and losses of associated companies, operative investments.
Goodwill impairment testing
On the acquisition date goodwill arising from business acquisitions
is allocated to the cash generating unit (CGU) or cash generating
units expected to benefit from the synergies of the combination,
irrespective of whether other assets and/or liabilities of the acquiree
are assigned to the CGU or CGUs. In 2024 and 2023, Valmet has
identified three CGUs, which are Services, Automation and Process
Technologies.
Valmet assesses the value of its goodwill for impairment annually or
more frequently if facts and circumstances indicate that a risk of
impairment exists. Testing is performed by comparing the carrying
value of the CGU to its recoverable amount, which is determined
based on a value in use calculation. This calculation uses pre-tax
cash flow projections based on financial budgets approved by
Valmet’s management and Board of Directors covering a five-year
period. The terminal values representing the cash flows beyond the
five-year period are calculated using the estimated long-term growth
rates stated below.
The following table sets out the allocation of goodwill as at
December 31, 2024 and 2023, and the key assumptions applied in
the value in use calculations. In both financial years, testing was
performed as at September 30.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Allocation of goodwill as at December 31:

EUR million | 2024 | 2023
Services | 891 | 643
Automation | 670 | 862
Process Technologies | 247 | 231
Total | 1,808 | 1,735

Key assumptions applied:

| 2024 | 2023
Long-term growth rate, (%) |  |
Services | 2.0% | 2.0%
Automation | 2.0% | 2.3%
Process Technologies | 2.0% | 2.1%
Pre-tax discount rate, (%)1 |  |
Services | 10.7% | 11.9%
Automation | 10.1% | 11.2%
Process Technologies | 11.9% | 16.8%

1 The parameters used in calculating the pre-tax discount rate, including the risk-free rate, were reviewed and updated in 2024 to enhance consistency and comparability over the years.
The provisional goodwill arising from the acquisition of Process Gas
Chromatography business from Siemens, EUR 27 million, has been
allocated to Automation CGU.
The key assumptions are based on past performance as well as
management’s and the Board of Directors’ expectations of market
development. Assumptions on product mix are in line with the
Group’s financial targets, with stable business growth exceeding that
of the process technologies business. Profitability margin
assumptions reflect improvements similarly in line with the Group’s
financial targets as communicated. External sources are also used to
obtain data on growth, demand, and price developments that is used
in establishing the assumptions. The discount rate used in testing is
derived from the weighted average cost of capital based on
comparable peer industry betas and capital structure. The long-term
growth rates used for calculating the terminal values are based on
Valmet's assessments for the market growth drivers and have been
corroborated against the long-term inflation expectations. The
assumptions requiring most judgment are the market development
and product mix.
As a result of the annual impairment tests, no impairment loss was
recognized on goodwill in 2024 or in 2023.
Sensitivity analysis
Valmet’s management has assessed that no reasonably possible
change in any of the key assumptions would cause any of the CGU’s
carrying amount to exceed its recoverable amount.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5 | Leases
Accounting policies
Valmet assesses at the inception of a contract whether it is or
contains a lease. A contract is considered to contain a lease if it
conveys the right to use an either explicitly or implicitly identified
asset for a period of time in exchange for consideration. In lease
contracts where Valmet is the lessee, a right-of-use asset and a lease
liability is recognized on the lease commencement date to reflect
Valmet’s right to use the underlying asset and the unpaid future
lease payments respectively.
The lease liability is initially measured at an amount equal to the
present value of the future lease payments that are not yet paid on
the commencement date. Lease payments are discounted using
Valmet’s incremental borrowing rate reflecting entity-specific
factors and the lease term. Incremental borrowing rates are
estimated based on market prices, adjusted with calculated margins
representing the entity-specific factors such as credit and
country risk.
In subsequent periods, the lease liability is measured using the
effective interest rate method, and the carrying amount of the lease
liability is increased with the interest on the lease liability, reduced
by the amount of lease payments made and adjusted to reflect any
reassessments or lease modifications made. When the lease liability
is remeasured, the corresponding adjustment is reflected in the
right-of-use asset. Variable lease payments not based on an index or
rate are not included in the liability but are expensed as incurred.
A right-of-use asset is initially measured at cost comprising the
amount of the initial measurement of the lease liability and any lease
payments made on or before the commencement date, any initial
direct costs incurred by Valmet, and restoration costs, less any lease
incentives received. Subsequently, the right-of-use asset is
depreciated on a straight-line basis over the shorter of the lease term
or the useful life of the asset.
Valmet applies exemptions provided by IFRS 16 not to recognize a
right-of-use asset and corresponding lease liability for leases with a
contract term of 12 months or less, and for leases of low-value assets.
The payments for these leases are recognized as an expense on a
straight-line basis over the lease term. Furthermore, Valmet
separates non-lease components from lease components only for
asset classes in which the amount of non-lease components is
significant.

| Critical accounting estimates and judgments Valmet has a significant volume of open-ended real estate lease contracts which carry a short notice period only, or which have an initial fixed term but carry extension or termination options. Estimating the likely lease term for these contracts and assessing if the options will be exercised requires significant judgment. When assessing the lease term for these contracts, management considers the relevant facts and circumstances. The likely lease term is typically assessed following the three- year financial forecasts established by management. If there are specific circumstances in place, such as beneficial market rates, significant leasehold improvements, or other significant direct or indirect costs associated with exiting the lease, the lease term can be more than three years. Considering other than real estate leases, the need for assets leased under open-ended contracts is commonly short-term in nature, and as such, open-ended contracts where the notice period is 12 months or less are accounted for as short-term leases. |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Valmet’s leasing activities
The majority of Valmet’s lease arrangements concern real estate,
vehicles, and machinery and equipment located primarily on
Valmet’s premises. The length of these lease arrangements is
typically three to five years, and contracts may include options to
extend the lease.
The tables below present the right-of-use assets recognized in the
Consolidated statement of financial position and the movements
during the period and the future minimum lease payments as at
December 31, 2024.

EUR million | Land and water areas | Buildings and structures | Machinery and equipment | Right-of-use assets total
2024 |  |  |  |
Carrying value at beginning of the period | 10 | 116 | 18 | 145
Translation differences | — | 1 | — | 2
Additions | — | 36 | 16 | 53
Acquired in business combinations | — | 11 | — | 11
Depreciation | -1 | -36 | -11 | -48
Other changes | — | -5 | — | -6
Carrying value at end of the period | 10 | 123 | 24 | 156

EUR million | Land and water areas | Buildings and structures | Machinery and equipment | Right-of-use assets total
2023 |  |  |  |
Carrying value at beginning of the period | 11 | 80 | 14 | 105
Translation differences | -1 | -1 | — | -2
Additions | — | 34 | 14 | 48
Acquired in business combinations | — | 36 | 1 | 37
Depreciation | -1 | -30 | -10 | -40
Other changes | — | -2 | -1 | -3
Carrying value at end of the period | 10 | 116 | 18 | 145

Maturity of future minimum lease payments as at December 31

EUR million | 2024 | 2023
Due within 1 year | 51 | 44
Due in 1–2 years | 38 | 37
Due in 2–3 years | 24 | 24
Due in 3–4 years | 18 | 14
Due in 4–5 years | 13 | 11
Due after 5 years | 42 | 39
Total | 187 | 169

Lease payments related to short-term leases and leases of low-value
assets, as well as variable lease payments that are not based on index
or rate, are not included in the lease liability but are recognized as an
expense as incurred in either Cost of goods sold or Selling, general
and administrative expenses. The table below presents lease
payments for such leases. The interest expense related to leases
included in Financial expenses is presented in Note 10.

EUR million | 2024 | 2023
Expenses related to short-term leases | -3 | -3
Expenses related to leases of low-value assets | -6 | -7
Expenses related to variable lease payments not included in lease liabilities | -2 | -1
Total | -12 | -11

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6 | Net working capital
Payment schedules of large long-term projects have a significant
impact on net working capital development.
Net working capital does not include non-operative items such as
taxes, interest-bearing assets and liabilities, or other items related to
the funding of the Group’s operations.

| As at December 31, | Impact to cash flows
EUR million | 2024 | 2023 | 2024
Assets included in net working capital |  |  |
Non-current trade receivables | 22 | 8 | -13
Other non-current assets | 37 | 15 | -22
Inventories | 903 | 1,049 | 145
Trade receivables | 862 | 973 | 111
Amounts due from customers under revenue contracts | 344 | 475 | 131
Derivative financial instruments (assets) | 31 | 40 | 9
Other receivables | 232 | 257 | 25
Liabilities included in net working capital |  |  |
Employee benefits | -157 | -154 | 3
Provisions | -190 | -211 | -21
Other non-current non-interest-bearing liabilities | -1 | -1 | —
Trade payables | -460 | -520 | -59
Amounts due to customers under revenue contracts | -904 | -1,151 | -247
Derivative financial instruments (liabilities) | -43 | -46 | -2
Other current liabilities | -542 | -544 | -2
Total net working capital | 134 | 191 | 57
Effect of changes in foreign exchange rates |  |  | -3
Remeasurement of defined benefit plans |  |  | 11
Change in allowance for doubtful receivables and inventory obsolescence provision |  |  | -23
Acquired in business combinations |  |  | —
Change in net working capital in the Consolidated statement of cash flows |  |  | 43

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7 | Inventories
Accounting policies
Inventories are valued at the lower of cost and net realizable value.
Net realizable value is the estimated selling price in the normal
course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
Materials and supplies and finished products are valued on a
weighted average cost basis or on a first in, first out (FIFO) basis.
Work in progress includes costs related to ongoing projects, for
which revenue is recognized at a point in time. Work in progress
typically includes costs for direct labor and material and allocated
overhead costs.

| Critical accounting estimates and judgments Provision for slow-moving and obsolete inventory is based on the best estimate of such amounts at the balance sheet date. The estimate is based on a systematic ongoing review and evaluation of inventory balances. As part of this evaluation, Valmet also considers the composition and age of the inventory compared to anticipated future needs. |

Specification of changes in inventory obsolescence provision:

EUR million | 2024 | 2023
Balance at beginning of the period | 67 | 55
Translation differences | — | -1
Additions charged to profit or loss | 31 | 24
Acquired in business combinations | 23 | 13
Provisions used | -12 | -12
Unused provisions reversed | -15 | -13
Balance at end of the period | 93 | 67

The cost of inventories recognized as expense was EUR 3,553
million and EUR 3,831 million for the years ended December 31,
2024, and 2023, respectively.
8 | Financial assets and liabilities
Accounting policies
Valmet classifies its financial assets into the following categories: at
amortized cost, at fair value through other comprehensive income
and at fair value through profit or loss. The m easurement category
of financial assets is determined based on the related business model
and contractual cash flow characteristics of a given instrument.
Financial assets are derecognized when the contractual rights to cash
flows have expired, or the rights to cash flows together with
substantially all risks and rewards of ownership, have transferred.
Financial liabilities are classified either at amortized cost or at fair
value through profit or loss. Financial liabilities are derecognized
when they are extinguished, that is when the obligation specified in
the contract is discharged, cancelled or expires.
Financial assets and liabilities are recognized when Valmet becomes
party to the contractual provisions of the instrument. Both financial
assets and liabilities are presented as non-current when their
maturity exceeds 12 months.
Financial assets at amortized cost
The Group’s financial assets measured at amortized cost include
trade, loan and other receivables together with cash and cash
equivalents. These assets are recognized initially at fair value
including transaction costs and trade receivables at their transaction
price. Subsequently the assets are recognized at amortized cost using
the effective interest rate method. Trade receivables are the most
significant of these assets, and for them the amortized cost equals to
the original amount invoiced to customers, net of allowance for
expected credit losses. If extended payment terms exceeding one
year are offered to a counterparty , the receivable is discounted to
present value and interest income is recognized over the credit term.
Valmet evaluates changes in credit risk associated with different
financial assets at each reporting date as required by general
impairment guidelines set out in IFRS 9. If credit risk has not
changed significantly since initial recognition, an allowance
amounting to expected credit losses for next 12 months is
recognized. However, if the credit risk has changed significantly, the
valuation of allowance is based on lifetime expected credit losses.
For trade receivables and contract assets arising from customer
contracts for which revenue is recognized over time, a simplified
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
impairment model is applied and valuation of allowance is based on
lifetime expected credit losses which are recognized at first reporting
date. Valmet’s application of the simplified impairment model
considers historical credit loss experience, time value of money and
forward-looking information relevant to estimate future credit
losses, and the inputs used in the model are updated on a regular
basis. The model applied includes a statistical model together with
an option to apply case-by-case analysis for significant trade
receivables overdue more than 90 days. Final bad debts are written
off when official announcement of receivership, liquidation or
bankruptcy is received confirming that the receivable will not be
honored by the customer. Changes in allowance together with final
bad debts are reported under Other operating income and expenses.
Financial assets at fair value through other
comprehensive income
The m ajority of Valmet’s financial assets measured at fair value
through other comprehensive income (OCI) are interest-bearing
financial assets managed centrally by Group treasury. The b usiness
model for these assets involves both holding until maturity and
selling before the maturity date approaches, depending on prevailing
market circumstances and Group treasury’s operational
requirements. Gains and losses from these assets are recognized in
the fair value reserve of Equity and at derecognition these are
recycled through OCI to Consolidated statement of income.
Valmet also applies fair value through other comprehensive income
option to certain publicly traded equity investments. Change in fair
value of the related shares is recognized in the fair value reserve of
Equity. Should the investments be divested in the future, any
cumulative gain or loss remains in Equity, and is not recycled
through OCI to the Consolidated statement of income. Fair value of
the equity investments classified at fair value through other
comprehensive income as at December 31, 2024, was
EUR 10 million (EUR 8 million).
Financial assets and liabilities at fair value
through profit or loss
The majority of the Group’s financial assets and liabilities measured
at fair value through profit or loss are derivative financial
instruments, for which the related accounting policies are presented
in Note 9. Valmet’s other equity holdings, excluding publicly traded
equity investments, include various industrial participations, shares
in real estate holdings and other shares which are measured at fair
value through profit or loss. For these other equity ownerships, if a
reliable market value does not exist, historical cost is considered the
best available estimate of fair value. Valmet has not voluntarily
assigned any financial assets or liabilities to be measured at fair value
in addition to items designated to this category mandatorily in
accordance with IFRS 9.
Financial liabilities at amortized cost
Valmet’s financial liabilities measured at amortized cost consist of
loans from financial institutions, bonds, lease liabilities and trade
payables. Loans from financial institutions are initially recognized at
fair value, net of transaction costs incurred. Subsequently these
liabilities are measured at amortized cost by using the effective
interest rate method. Loans from financial institutions are classified
as current liabilities unless Valmet has an unconditional right to
defer settlement of the liability for at least 12 months after the end of
the reporting period. Accounting policies for leases are presented in
Note 5.
Fair value estimation
For those financial assets and liabilities, which have been recognized
at fair value in the Consolidated statement of financial position, the
measurement hierarchy and valuation methods described below
have been applied. There have been no transfers between fair value
levels.
L evel 1
The fair value of financial instruments in Level 1 is based on quoted
unadjusted prices at reporting date in active markets. The market
prices are readily and regularly available from an exchange, dealer,
broker, market data provider, pricing service or regulatory agency.
The quoted market price used for financial assets is the current bid
price. Level 1 financial instruments include equity investments
classified as financial assets at fair value through other
comprehensive income.
Level 2
The fair value of financial instruments in Level 2 is determined using
valuation techniques. These techniques utilize observable market
data readily and regularly available from an exchange, dealer,
broker, market data provider, pricing service or regulatory agency.
Level 2 financial instruments include over-the-counter (OTC)
derivatives classified as financial assets and liabilities at fair value
through profit or loss or derivatives qualified for hedge accounting
and all other financial assets and liabilities except for equity
investments.
Level 3
A financial instrument is categorized into Level 3 if the calculation
of the fair value cannot be based on observable market data. Level 3
financial instruments include equity investments classified as
financial assets at fair value through profit or loss. There were no
change s in Level 3 instruments for the 12 months ended
December 31, 2024.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

| Critical accounting estimates and judgments Under the simplified impairment model applied to trade receivables and contract assets, an allowance amounting to lifetime expected credit losses is recognized at first reporting date. The amount of this allowance is estimated based on a model that considers historical credit loss experience, time value of money and forward-looking information relevant to estimate future credit losses. The inputs used in the model are updated on a regular basis. Application of the guidance for impairment of financial assets, in particular estimation of future expected credit losses and application of case-by-case analysis to significant trade receivables overdue more than 90 days, requires significant management judgment and includes consideration of available customer and market information. Resulting impairment of financial assets is the best estimate based on information available and may differ from the actual result. |

132
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Classification of financial assets and liabilities as at December 31:

EUR million | 2024 | 2023
Non-current financial assets |  |
Equity investments at fair value through other comprehensive income | 10 | 8
Equity investments at fair value through profit or loss | 2 | 2
Trade receivables at amortized cost | 22 | 8
Derivative financial instruments at fair value through profit or loss | — | —
Derivative financial instruments qualified for hedge accounting | 6 | 12
Carrying value at end of the period | 40 | 31
Current financial assets |  |
Interest-bearing financial assets at fair value through other comprehensive income | 30 | 25
Non-interest-bearing financial assets at amortized cost | 8 | 3
Trade receivables at amortized cost | 862 | 973
Derivative financial instruments at fair value through profit or loss | 9 | 8
Derivative financial instruments qualified for hedge accounting | 15 | 20
Cash and cash equivalents at amortized cost | 482 | 432
Carrying value at end of the period | 1,406 | 1,460

EUR million | 2024 | 2023
Non-current financial liabilities |  |
Loans from financial institutions at amortized cost | 1,071 | 1,240
Bonds at amortized cost 1 | 202 | —
Lease liabilities at amortized cost | 107 | 98
Derivative financial instruments at fair value through profit or loss 2 | — | —
Derivative financial instruments qualified for hedge accounting 2 | 12 | 11
Carrying value at end of the period | 1,392 | 1,349
Current financial liabilities |  |
Loans from financial institutions at amortized cost | 94 | 40
Lease liabilities at amortized cost | 50 | 43
Interest-bearing liabilities at amortized cost | 20 | 63
Trade payables at amortized cost | 460 | 520
Derivative financial instruments at fair value through profit or loss | 7 | 8
Derivative financial instruments qualified for hedge accounting | 24 | 26
Carrying value at end of the period | 656 | 700

1 The bonds have been measured at amortized cost, adjusted by the fair value to the extent that fair value hedge accounting is applied.
2 Included in Other non-current liabilities in the Consolidated statement of financial position.
Carrying values presented in the table above approximate fair values,
except for the loans from financial institutions where fair value
approximates to E UR 1,206 millio n (EUR 1,317 million).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Non-current equity investments comprised EUR 10 million listed
shares (EUR 8 million) and various industrial participations, shares
in real-estate holdings and other shares amounting to EUR 2 million
as at December 31, 2024 (EUR 2 million). Current interest-bearing
financial assets managed centrally by the Group treasury amounted
to EUR 30 million (EUR 25 million).
Valmet manages its cash by investing in financial assets with varying
maturities. Interest-bearing financial assets with maturities at the
date of acquisition exceeding three months are classified as Other
current financial assets and assets with maturities of three months or
less are classified as Cash and cash equivalents in the Consolidated
statement of financial position. Cash and cash equivalents
comprised cash at bank and in hand of EUR 460 million (EUR 421
million) and other short-term financial assets with maturities of
three months or less of EUR 23 million (EUR 11 million) mainly
comprising bank deposits and banker’s acceptance drafts. For more
information on derivative financial instruments, see Note 9.
Analysis of trade receivables by age as at December 31:

EUR million | 2024 | 2023
Trade receivables, not due | 615 | 625
Trade receivables 1–30 days overdue | 141 | 182
Trade receivables 31–60 days overdue | 53 | 93
Trade receivables 61–90 days overdue | 16 | 32
Trade receivables 91–180 days overdue | 32 | 22
Trade receivables more than 180 days overdue | 27 | 27
Total | 884 | 981

Movement in allowance for trade receivables and contract assets:

EUR million | 2024 | 2023
Balance at beginning of the period | 25 | 21
Translation differences | — | -1
Additions charged to profit or loss | 15 | 7
Acquired in business combinations | — | 4
Used reserve | -6 | -3
Reversals | -3 | -3
Balance at end of the period | 33 | 25

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Net debt reconciliation as at December 31:

EUR million | 2024 | 2023
- Cash and cash equivalents | 482 | 432
- Current interest-bearing financial assets | 30 | 25
+ Loans from financial institutions, bonds and other current debt | 1,387 | 1,343
+ Lease liabilities | 157 | 141
Net debt | 1,032 | 1,027

| 2024
| Liabilities from financing activities | Other assets |
EUR million | (+) Loans from financial institutions, bonds and other current debt | (+) Lease liabilities | (-) Cash and cash equivalents | (-) Current interest- bearing financial assets | Total net debt
Balance at beginning of the period | 1,343 | 141 | 432 | 25 | 1,027
Translation differences | — | 1 | 3 | -4 | 2
Cash flows | 42 | -52 | 48 | 7 | -64
Additions to lease liabilities | — | 62 | — | — | 62
Acquired in business combinations | — | 10 | — | 3 | 7
Other changes | 2 | -5 | — | — | -3
Balance at end the of period | 1,387 | 157 | 482 | 30 | 1,032

| 2023
| Liabilities from financing activities | Other assets |
EUR million | (+) Loans from financial institutions and other current debt | (+) Lease liabilities | (-) Cash and cash equivalents | (-) Current interest- bearing financial assets | Total net debt
Balance at beginning of the period | 710 | 99 | 277 | 30 | 502
Translation differences | — | -1 | -10 | 2 | 7
Cash flows | 633 | -44 | 165 | -7 | 431
Additions to lease liabilities | — | 54 | — | — | 54
Acquired in business combinations | — | 37 | — | — | 37
Other changes | — | -3 | — | — | -3
Balance at end of the period | 1,343 | 141 | 432 | 25 | 1,027

9 | Derivative financial instruments
Accounting policies
Derivative financial instruments
Derivative financial instruments are used to hedge the Group’s
exposure to foreign exchange rate, interest rate and commodity
price risks arising from operational, investment and financing
activities in accordance with Valmet’s treasury policy, which is
discussed further in Note 21.
Trade date accounting is applied to the Group’s derivative financial
instruments and these are measured at initial recognition and at
each reporting date at fair value in the balance sheet. Fair value of
open derivative contracts is calculated as present value of future cash
flows using currency, interest and commodity price quotations on
the reporting date. The instruments are classified as non-current
assets or liabilities when the remaining maturities exceed 12 months
and as current assets or liabilities when the remaining maturities are
12 months or less.
When hedge accounting is applied, derivatives are designated at
inception either as hedges of firm commitments or highly probable
forecasted sale and purchase transactions (cash flow hedge) or as
hedges of fixed-rate debt (fair value hedge). When hedge accounting
criteria are not met, derivatives are measured at fair value through
profit or loss.
Application of hedge accounting
Valmet has designated certain forward exchange contracts, interest
rate swaps, electricity forward contracts, and nickel average price
swaps to cash flow hedge accounting relationships. Further, interest
rate swaps not designated to cash flow hedge accounting, have been
designated to fair value hedge accounting. When hedge accounting
is applied, the relationship between hedging instrument and hedged
item is documented, including the related risk management strategy
and objectives. In cash flow hedge accounting, both at hedge
inception and at each reporting date, a forward-looking assessment
is performed to ensure that changes in cash flows of the hedging
instrument are expected to offset changes in cash flows from the
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
hedged item. In fair value hedge accounting, both at inception and
at each reporting date, the change in fair value of the derivatives is
compared against those of the underlying instruments. When
performing these assessments, if critical terms of hedging
instrument and hedged item match, and an economic relationship
between the hedged item and hedging instrument exists, hedge
accounting relationship is considered effective.
Cash flow hedge accounting
For derivatives that have been designated to a cash flow hedge
accounting relationship, the effective portion of change in fair value
is recognized through other comprehensive income (OCI) in the
hedge reserve under Equity and reclassified to profit or loss
concurrently with the underlying hedged transaction. The gains or
losses relating to the ineffective portion of derivatives hedging
operative items (e.g. foreign currency denominated sales and
purchase transactions) are reported in profit or loss. Both the
ineffective portion and the reclassification from Equity are reported
either in Net sales and Cost of goods sold or under Other operating
income and expenses on a case-by-case basis. N et loss from foreign
exchange related to operative items was EUR -21 million in 2024
(EUR -12 million). Respectively, the ineffective portions of
derivatives hedging non-operative items (e.g. interest-bearing
financial assets and liabilities, and other items related to the Group’s
funding) are reported under Financial income and expenses in profit
or loss. Ineffectiveness arising from application of hedge accounting
during the reporting period was insignificant. Should a hedged
transaction no longer be expected to occur, any cumulative gain or
loss previously recognized under Equity is reclassified through OCI
to profit or loss.
When hedging for changes in foreign currency denominated firm
commitments or highly probable forecasted sale and purchase
transactions, the currency component of forward exchange
contracts has been designated as hedging instrument in hedge
accounting relationships in every case. In addition, based on a case-
by-case designation, the interest component of forward exchange
contracts can also be designated as hedging instrument in hedge
accounting relationships. In cases where the interest component is
not designated as part of Valmet’s hedge accounting relationships, it
is recognized in profit or loss.
Valmet has designated interest rate swaps as hedging instruments to
hedge future changes in cash flows arising from Valmet’s floating
rate loans from financial institutions. Interest arising from interest
rate swaps is reported under Financial income and expenses
concurrently with interest expense arising from hedged floating rate
loans from financial institutions.
For highly probable forecasted purchases of electricity, the Group
has designated the system-price component of electricity purchases
as hedged risk and electricity forward contracts as hedging
instruments to hedge accounting relationships. The realized gains
and losses related to the effective portion of the electricity forward
contracts are recognized in the Consolidated statement of income
under Cost of goods sold.
Valmet has designated certain nickel commodity swaps as hedging
instruments in hedge accounting relationship to hedge risk of
changes in the nickel price component in highly probable forecasted
purchase transactions from its suppliers. The realized gains and
losses related to the effective portion of the nickel average price swap
contracts are recognized in the Consolidated statement of income
under Cost of goods sold concurrently with the underlying hedged
transaction.
Fair value hedge accounting
Valmet applies fair value hedge accounting to certain fixed-rate
loans. These fixed-rate loans create an exposure to fixed interest
payments and the hedging instruments, interest rate swaps, receives
fixed interest payments. There is an expectation that the value of the
hedging instrument and the underlying hedged risk move in
opposite direction. The change in fair value of the interest rate swap
hedging the loan is recognized in Financial income and expenses in
profit or loss concurrently with the change in value of the
underlying hedged fixed-rate loan.
Derivatives at fair value through profit or loss
Certain forward exchange contracts, foreign exchange options and
commodity derivatives do not qualify for hedge accounting and
change in fair value is recorded through profit or loss. Gains or
losses arising from derivatives hedging operative items are
recognized case-by-case either in Net sales and Cost of goods sold or
in Other operating income and expenses. When the forward
exchange contracts hedge exchange rate risk arising from foreign
currency denominated non-operative items, gains and losses are
recognized in Financial income and e xpenses in profit or loss.
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| Critical accounting estimates and judgments Financial instruments In accordance with the disclosure requirements on financial instruments, the management is obliged to make certain assumptions of the related future cash inflows and outflows associated with different financial assets and liabilities. Management assumes that the fair values of derivatives, especially fair values of forward exchange contracts, materially reflect the present values of future cash inflows or outflows to be realized from such instruments. Hedging of foreign currency denominated firm commitments or highly probable forecasted sale and purchase transactions Under Valmet’s treasury policy, all Valmet entities are required to hedge their foreign currency risk when they have become engaged in a firm commitment denominated in a currency different from their functional currency. The commitment can be between Valmet entities or external to Valmet Group. In addition, certain highly probable forecasted sales and purchases are hedged in co-operation with the Group treasury. When revenue for a customer contract is recognized over time, the entity applies cash flow hedge accounting to both foreign currency denominated sales and purchases and recognizes the effect from the hedging instruments in the OCI until the hedged sales and/or purchases are recognized in the Consolidated statement of income. Although the exposure hedged by Valmet entities has been clearly defined in Valmet treasury policy, the final realization of the hedged items depends also on factors beyond management’s control, which cannot be foreseen when initiating the hedge relationship. Such factors include change in the market environment causing the other party to postpone or cancel the commitment or highly probable forecasted sale or purchase. Management tries to the extent possible to include clauses in the related contracts to reduce the impact of such adverse events to the Consolidated statement of income. |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notional amounts and fair values of derivative financial instruments as at December 31:

EUR million | Notional amount | Fair value, assets | Fair value, liabilities | Fair value, net
2024 |  |  |  |
Forward exchange contracts 1 |  |  |  |
Under hedge accounting (cash flow hedge) | 2,416 | 17 | -28 | -11
Not designated for hedge accounting | 1,137 | 9 | -7 | 2
Total | 3,553 | 26 | -35 | -9
Foreign exchange options (bought)1 |  |  |  |
Not designated for hedge accounting | 150 | — | — | —
Electricity forward contracts 2 |  |  |  |
Under hedge accounting (cash flow hedge) | 160 | — | -1 | -1
Nickel commodity swaps 3 |  |  |  |
Under hedge accounting (cash flow hedge) | 371 | — | -1 | -1
Not designated for hedge accounting | 1,112 | — | — | —
Total | 1,483 | — | -1 | -1
Steel scrap commodity swaps 3 |  |  |  |
Not designated for hedge accounting | 1,303 | — | — | —
Interest rate swaps 1 |  |  |  |
Under hedge accounting (cash flow hedge) | 550 | 2 | -6 | -4
Under hedge accounting (fair value hedge) | 100 | 2 | — | 2
Total | 650 | 4 | -6 | -2
Total |  | 31 | -43 | -13
Netting fair values of derivative financial instruments subject to ISDAs 4 |  | -28 | 28 | —
Total, net |  | 2 | -15 | -13
2023 |  |  |  |
Forward exchange contracts 1 |  |  |  |
Under hedge accounting (cash flow hedge) | 2,263 | 26 | -31 | -5
Not designated for hedge accounting | 931 | 8 | -6 | 2
Total | 3,194 | 34 | -38 | -4
Electricity forward contracts 2 |  |  |  |
Under hedge accounting (cash flow hedge) | 153 | 1 | -1 | —
Nickel commodity swaps 3 |  |  |  |
Not designated for hedge accounting | 588 | — | -2 | -2
Steel scrap commodity swaps 3 |  |  |  |
Not designated for hedge accounting | 1,523 | — | — | —
Interest rate swaps 1 |  |  |  |
Under hedge accounting (cash flow hedge) | 510 | 5 | -5 | —
Total |  | 40 | -46 | -6
Netting fair values of derivative financial instruments subject to ISDAs 4 |  | -36 | 36 | —
Total, net |  | 4 | -10 | -6

1 Notional amount in EUR million.
2 Notional amount in GWh.
3 Notional amount in metric tons.
4 T he Group’s derivatives are carried out under International Swaps and Derivatives Association’s Master Agreements (ISDA). In case of an event of default under these Agreements the
non-defaulting party may request early termination and set-off of all outstanding transactions. These agreements do not meet the criteria for offsetting in the Statement of financial
position.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Maturities of financial derivatives as at December 31:

| 2025 | 2026 | 2027 | 2028 | 2029 and later | Total |
2024 |  |  |  |  |  |  |
Notional amounts |  |  |  |  |  |  |
Forward exchange contracts 1 | 3,033 | 519 | 1 | — | — | 3,553 |
Foreign exchange options 1 | 150 | — | — | — | — | 150 |
Electricity forward contracts 2 | 105 | 46 | 9 | — | — | 160 |
Nickel commodity swaps 3 | 1,375 | 108 | — | — | — | 1,483 |
Steel scrap commodity swaps 3 | 1,303 | — | — | — | — | 1,303 |
Interest rate swaps 1 | 120 | 200 | 170 | 60 | 100 | 650 |
Fair values, EUR million |  |  |  |  |  |  |
Forward exchange contracts | -5 | -4 | — | — | — | -9 |
Foreign exchange options | — | — | — | — | — | — |
Electricity forward contracts | — | — | — | — | — | -1 |
Nickel commodity swaps | -1 | — | — | — | — | -1 |
Steel scrap commodity swaps | — | — | — | — | — | — |
Interest rate swaps | — | -1 | -1 | -1 | 2 | -2 |

| 2024 | 2025 | 2026 | 2027 | 2028 and later | Total
2023 |  |  |  |  |  |
Notional amounts |  |  |  |  |  |
Forward exchange contracts 1 | 2,840 | 315 | 39 | — | — | 3,194
Electricity forward contracts 2 | 92 | 44 | 18 | — | — | 153
Nickel commodity swaps 3 | 588 | — | — | — | — | 588
Steel scrap commodity swaps 3 | 1,523 | — | — | — | — | 1,523
Interest rate swaps 1 | 65 | 95 | 160 | 150 | 40 | 510
Fair values, EUR million |  |  |  |  |  |
Forward exchange contracts | -4 | 1 | — | — | — | -4
Electricity forward contracts | — | — | — | — | — | —
Nickel commodity swaps | -2 | — | — | — | — | -2
Steel scrap commodity swaps | — | — | — | — | — | —
Interest rate swaps | — | — | — | — | — | —

1 Notional amount in EUR million.
2 Notional amount in GWh.
3 Notional amount in metric tons.
The notional amounts presented in the tables above give an
indication of the volume of derivative contracts entered into, but do
not provide an indication of the exposure to risk.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10 | Financial income and expenses

EUR million | 2024 | 2023
Dividends received | — | —
Interest income on financial assets (excl. derivatives) | 22 | 14
Net gain from foreign exchange | 2 | 3
Interest component from forward contracts | — | —
Financial income total | 24 | 17
Interest expenses on financial liabilities measured at amortized cost (excl. leases) | -69 | -36
Interest expenses on lease liabilities | -8 | -5
Net interest from defined benefit plans | -4 | -5
Interest component from forward contracts | -4 | -1
Other financial expenses | -4 | -5
Financial expenses total | -90 | -52
Financial income and expenses, net | -65 | -34

Exchange rate differences included in financial income and expenses:

EUR million | 2024 | 2023
Exchange rate differences from interest-bearing financial assets and liabilities, and other items related to Group’s funding | -3 | 16
Exchange rate differences from derivative financial instruments | 5 | -13
Net gain or loss from foreign exchange | 2 | 3

Interest expenses on financial liabilities at amortized cost (excl.
leases) includes interest expenses on interest-bearing loans and
interest rate swaps.
11 | Provisions
Accounting policies
A provision is recognized when Valmet has a present legal or
constructive obligation as a result of a past event, payment is
probable, and Valmet is able to estimate the amount of the
obligation reliably. Provisions are reviewed at the end of each
reporting period and adjusted to reflect the current best estimate or
reversed if they are no longer needed. Long-term provisions are
discounted to their present value based on the expected timing of
cash outflows when the effect of the time value of money is
significant.
Warranty provisions
The Group typically issues contractual product warranties under
which it generally guarantees the mechanical functioning of
equipment delivered during the agreed warranty periods, ranging
from 12 to 24 months. The main principle in measuring the
warranty provision is to book a certain percentage, based on past
experience, of total revenue of a deliverable as a provision for
expected warranty work. For sales involving new technology and
long-term delivery contracts, additional warranty provision may be
established on a case-by-case basis to take into account the
potentially increased risk. The actual warranty costs of each project
are booked against the warranty provision and thus the remaining
warranty provision of each project can be followed.
Actual warranty costs incurred on projects are monitored regularly
in order to assess the need for amending the percentage based on
which warranty provisions are recognized going forward.
Restructuring provisions
A provision for restructuring costs is recognized only when general
recognition criteria for provision are met and after management has
prepared and approved a formal plan to which it is committed, and
it has raised a valid expectation in those affected by the measures
that it will carry out the restructuring by starting to implement that
plan or announcing its main features.
The costs included in a provision for restructuring are those costs
that are either incremental or incurred as a direct result of the plan
or are the result of a continuing contractual obligation with no
continuing economic benefit to Valmet or a penalty incurred to
cancel the contractual obligation. Restructuring and capacity
adjustment expenses are recognized in either Cost of goods sold or
Selling, general and administrative expenses depending on the
nature of the expense. Restructuring costs may also include other
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
costs incurred as a result of a restructuring plan, which are recorded
under Other operating income and expenses, such as asset
impairment charges.
Provisions for onerous contracts
A provision for an onerous contract is recognized when the Group
has a contract in which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits
expected to be received under it. The unavoidable costs under a
contract reflect the least net cost of exiting from the contract, which
is either the cost of fulfilling contractual obligations or penalties
arising from the failure to fulfill those obligations.
Other provisions
Other provisions include provisions related to environment,
personnel, legal and tax related processes. These provisions are
recognized when general provision recognition criteria are met.

| Critical accounting estimates and judgments The amount recognized as a provision is the best estimate of the expenditure required to settle the obligation at the reporting day, taking into account related risks and uncertainties, management judgment supplemented by experience with similar transactions and future events when there is sufficient evidence that they will occur and affect the amount of payment. Under contractual warranty clauses, Valmet generally guarantees the performance of products delivered for a certain warranty period. The warranty provision is based on historical realized warranty costs for deliveries of standard products. The warranty period typically commences from the date of customer acceptance of the delivered equipment. For more complex contracts, including long-term projects, the warranty reserve is calculated contract by contract and updated regularly to ensure its appropriateness. Provisions for restructuring costs are recognized when the requirements for recognition are satisfied. For reasons beyond the control of management the final costs may differ from the initial amount for which the provision has been established. Valmet recognizes a provision for losses associated with environmental remediation obligations when such losses are probable, and a reliable estimate of amounts can be made. Following initial recognition, the amount of provision is adjusted later if further information is obtained or circumstances change. |

Specification of changes in provisions:

| 2024
EUR million | Warranty provisions | Restructuring provisions | Provisions for onerous contracts | Other provisions | Total
Balance at beginning of the period | 169 | 14 | 19 | 9 | 211
Translation differences | -3 | — | — | — | -3
Additions charged to profit or loss | 108 | 10 | 7 | 7 | 132
Acquired in business combinations | 2 | — | — | — | 2
Provisions used | -79 | -16 | -6 | -1 | -101
Unused provisions reversed | -43 | -1 | -5 | -2 | -50
Balance at end of the period | 153 | 7 | 15 | 14 | 190
Non-current | 27 | — | — | 2 | 28
Current | 127 | 7 | 15 | 13 | 162

Provisions for expected contract losses relate primarily to long-term
projects. The Group did not have material environmental or product
liabilities as at December 31, 2024, or December 31, 2023.
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12 | Other current liabilities

| As at December 31
EUR million | 2024 | 2023
Accrued personnel costs | 223 | 224
Accrued project costs | 110 | 115
Accrued interest | 17 | 14
Other payables | 210 | 206
Other current liabilities total | 559 | 558

The maturity of payables is largely determined by local trade
practices and individual agreements between Valmet and its
suppliers and rarely exceeds six months. Accrued personnel costs,
which include holiday pay, are settled in accordance with local laws
and stipulations.
13 | Personnel expenses and number of personnel
Personnel expenses:

EUR million | 2024 | 2023
Salaries and wages | -1,093 | -1,013
Pension costs, defined contribution plans | -110 | -98
Defined benefit plan costs 1 | -6 | -4
Other post-employment benefits | -12 | -11
Share-based payments 2 | -8 | -7
Other indirect employee costs | -164 | -159
Total | -1,393 | -1,292

1 For more information, see Note 15.
2 For more information, see Note 14.
Number of personnel:

| 2024 | 2023
Personnel at end of the period | 19,310 | 19,160
Average number of personnel during the period | 19,297 | 18,130

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14 | Share-based payments
Accounting policies
Valmet’s share-based incentive plans are part of the remuneration
and retention program for Valmet’s key personnel. In majority of
the jurisdictions where key employees participating in the Group’s
long-term incentive (LTI) plans reside, Valmet has an obligation to
withhold an amount for the key employee’s tax obligations
associated with the share-based payment rewards, and transfer that
amount directly to the tax authorities on the key employee’s behalf.
Thus, the arrangements carry a net settlement feature and both
equity and cash settled portions of the plans are accounted for
against equity.
Non-market vesting conditions, such as Comparable EBITA as a
percentage of net sales, and orders received growth in the stable
business, are used for calculating the number of shares related to the
Group’s LTI plans that are expected to vest. These estimates are
revised at the end of each reporting period and impact of the
revision to previous estimate is recognized through profit or loss
with corresponding adjustment to equity.
The compensation expense for the shares is recognized as an
employee benefit expense evenly during the required service period
whereas the compensation expense resulting from the cash portion
is recognized as an employee benefit expense on accrual basis
between grant and payment date. Valuation of the related expenses
is based on the number of shares expected to vest, remaining vesting
period at the reporting date and Valmet’s closing share price as at
the grant date.
Granted share amounts of the share-based incentive plans, as rounded to thousands:

| Plan 2021–2023 | Plan 2022–2024 | Plan 2023–2025 | Plan 2024–2026
2024 |  |  |  |
At beginning of the period | 42,000 | 31,000 | 203,000 | —
Maximum number of shares to be granted | — | -2,000 | -3,000 | 621,000
Changes due to achievement criteria | — | — | — | -180,000
Actual number of shares granted | — | — | -153,000 | —
Shares returned by plan participants | — | 7,000 | 3,000 | —
Shares transferred to treasury shares | — | -7,000 | -3,000 | —
At end of the period | 42,000 | 29,000 | 48,000 | 442,000

Long-term incentive plans – Performance
Share Plan and Deferred Share Plan
Long-term incentive plans commenced 2021–
2024
The Board of Directors of Valmet Oyj decided in December 2020 on
share-based long-term incentive plans; a Performance Share Plan
and a Deferred Share Plan for Valmet’s key employees. The
Performance Share Plan is directed to Valmet’s Executive Team and
the Deferred Share Plan is directed to other key employees in
management positions, and management talents.
The Performance Share Plan includes a three-year performance
period parallel to a one-year performance period. The Deferred
Share Plan includes a one-year performance period. Valmet’s Board
of Directors decides on the predefined performance measures and
targets in the beginning of each performance period.
In case the rewarded shares are paid after the one-year performance
period from both the Performance Share Plan and the Deferred
Share Plan those may not be transferred during a two-year
restriction period. Should a key employee’s employment or service
end during the restriction period, he or she must, as a rule,
gratuitously return the shares given as reward to the Company.
The Board has the right to cancel the reward or re-collect paid
rewards that are subject to the Transfer Restriction, fully or partly, if
the LTI plan participant has acted against the law or against the
ethical guidance of the Company or otherwise unethically.
Long-term incentive plans from 2025 onwards
The Board of Directors of Valmet Oyj decided in December 2024 on
establishment of a new long-term share incentive plan; a
Performance Share Plan, for Valmet's executives and selected key
employees. The Performance Share Plan consists of annually
commencing performance share plans, with a three-year
performance period, within which its participants have the
opportunity to earn shares of the Company based on achievement of
the performance measures. The performance measures and their
target ranges are set separately for each commencing plan.
Regarding all Valmet LTI plans, as a rule, no reward is paid if the
key employee’s employment or service at Valmet ends before the
reward payment. The earning under the Performance Share Plan is
limited by a pay cap determined by the Board of Directors in order
to avoid unexpectedly high pay-outs resulting from share price
volatility. Additionally, the Board has the right to re-collect paid
rewards after the plan has ended if the LTI plan participant has
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
caused a misstatement of the information based on which the
reward was paid.
The tables below summarize the key attributes of the long-term
incentive plans that existed during the current or previous period:
Performance Share Plans and Deferred Share Plans:

| Long-term incentive plans 2021–2023 | Long-term incentive plans 2022–2024
Plan name | Performance Share Plan and Deferred Share Plan | Performance Share Plan | Performance Share Plan and Deferred Share Plan | Performance Share Plan
Performance period | 2021 | 2021–2023 | 2022 | 2022–2024
Incentive based on | Comparable EBITA as a percentage of net sales, and orders received growth in the stable business | Predefined strategic target | Comparable EBITA as a percentage of net sales, and orders received growth in the stable business | ESG Index, targets linked to implementing Valmet’s Climate Program and Sustainability Agenda
Reward payment | In spring 2022 | In spring 2024 | In spring 2023 | In spring 2025
Participants |  |  |  |
Performance Share Plan | 13 | 10 | 14 | 11
Deferred Share Plan | 101 |  | 114 |
Total gross number of shares earned | Approximately 355,000 shares | Approximately 42,000 shares | Approximately 176,000 shares | Approximately 29,000 shares
Valmet’s closing share price as at the grant date | 26.51 | 26.51 | 33.63 | 33.63
Vesting period | February 2021 to March 2024 | February 2021 to March 2024 | February 2022 to March 2025 | February 2022 to March 2025

| Long-term incentive plans 2023–2025 | Long-term incentive plans 2024–2026 | Long-term incentive plan 2025–2027
Plan name | Performance Share Plan and Deferred Share Plan | Performance Share Plan | Deferred Share Plan | Performance Share Plan | Performance Share Plan
Performance period | 2023 | 2023–2025 | 2024 | 2024, 2024–2026 | 2025-2027
Incentive based on | Comparable EBITA as a percentage of net sales, and orders received growth in the stable business | Development of a valuation multiple of Valmet’s share in comparison to peer group | Comparable EBITA as a percentage of net sales, and orders received growth in the stable business | Comparable EBITA as a percentage of net sales, and orders received growth in the stable business Development of a valuation multiple of Valmet’s share in comparison to peer group | Comparable EBITA, organic orders received growth (%) of the stable business, and ESG Index
Reward payment | In spring 2024 | In spring 2026 | In spring 2025 | In spring 2027 | In spring 2028
Participants |  |  |  |  |
Performance Share Plan | 15 | 13 |  | 17 | ~220
Deferred Share Plan | 120 |  | 193 |  |
Total gross number of shares earned | Approximately 153,000 shares | Approximately 48,000 shares | As at December 31, 2024, approximately 359,000 shares were allotted to participants. | As at December 31, 2024, approximately 262,000 shares were allotted to participants. | The reward to be paid will correspond to a maximum total of approximately 653,000 shares.
Valmet’s closing share price as at the grant date | 28.77 | 28.77 | 25,65 | 25,65 |
Vesting period | February 2023 to March 2026 | February 2023 to March 2026 | February 2024 to March 2027 | February 2024 to March 2027 | February 2025 to March 2028

Restricted shares pool
A s part of total remuneration, for example for retention purposes,
the Board of Directors decided on an additional incentive element in
December 2018, the restricted shares pool, from which shares can be
granted to selected key employees. Restricted share pools are
intended to be annually commencing, and the annual restricted
shares pool is subject to separate approval by the Board of Directors.
In 2024, approximately 101,000 shares were allocated from the
restricted shares pool. In 2025, 100,000 Company shares and in
addition the shares unallocated from the Performance Share Plan
2025-2027 can be allocated to possible participants in the restricted
shares pool. As a rule, the restriction period for these shares is three
years. Plan nominations as well as detailed terms of allocation will be
proposed by the President and CEO to the Chairman of the Board of
Directors for approval. A precondition for the payment of the share
reward based on the restricted shares pool is that a threshold of
Valmet Comparable EBITA is exceeded and that the employment
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
relationship of the individual participant with Valmet continues
until the payment date of the reward.
Share ownership recommendation
To recognize and highlight the importance and value of the
members of Valmet’s Executive Team owning and holding
Company shares, the Board of Directors has approved in December
2024 a share ownership recommendation for Valmet’s Executive
Team members. All members of Valmet’s Executive Team are
recommended to own and hold Company shares equaling their
gross annual base salary (100 percent ownership recommendation).
Further, each member of Valmet’s Executive Team is expected to
retain in their ownership at least half of the shares received under
the share-based incentive plans of the Company, until the value of
their share ownership corresponds to at least their gross annual base
salary.
Costs recognized for the share
ownership plans
The compensation expense for the shares is recognized as an
employee benefit expense evenly during the required service period
with corresponding entry in equity. The compensation expense
resulting from the cash portion is recognized as an employee benefit
expense on an accrual basis between the grant and payment date
with a corresponding entry made to equity. The v aluation of the
related expenses is based on the number of shares expected to vest,
the remaining vesting period at the reporting date and Valmet’s
closing share price as at the grant date.
Costs arising from share-based payments plans:

EUR thousand | 2024 | 2023
Plan 2021–2023 | -409 | -1,973
Plan 2022–2024 | -1,065 | -1,915
Plan 2023–2025 | -1,543 | -2,770
Plan 2024-2026 | -4,723 | —
Total | -7,741 | -6,657

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15 | Employee benefit obligations
Accounting policies
Pensions and coverage of pension liabilities
Valmet has various employee benefit schemes in place in line with
local regulations and practices in the countries in which Valmet
operates. In certain countries, the schemes involve defined benefit
plans with retirement, disability, death, and other post-retirement
benefits such as health benefits and termination income benefits.
Defined benefit plans are post-employment benefit plans other than
defined contribution plans. In defined benefit plans, the benefits are
usually based on the number of service years and the salary levels of
the final service years. The schemes are generally funded through
payments to insurance companies or to trustee-administered funds
as determined by periodic actuarial calculations.
In addition, certain entities within Valmet Group have multi-
employer pension arrangements, classified as defined contribution
plans. The contributions to defined contribution plans and to multi-
employer and insured plans are charged to profit or loss
concurrently with the payment obligations. In defined contribution
plans, the Group pays fixed contributions into a separate entity, and
the Group has no legal or constructive obligation to pay further
contributions.
In the case of defined benefit plans, the net defined benefit liability
recognized from the plan is the present value of the defined benefit
obligation at the end of the reporting period, reduced by the fair
value of the plan assets. Independent actuaries calculate the defined
benefit obligation by applying the projected unit credit method
under which the estimated future cash flows are discounted to their
present value using a duration-specific discount rate. The cost of
providing pension and other employee benefits is charged to profit
or loss concurrently with the service rendered by the employees. The
service cost is recorded as part of personnel expenses in profit or
loss, and the net interest is recorded under financial income and
expenses. Actuarial gains and losses arising from experience
adjustments, changes in actuarial assumptions and actual return on
plan assets (excluding interest income on plan assets) are recognized
through OCI in equity.

| Critical accounting estimates and judgments The benefit expense and liabilities arising from defined benefit arrangements are calculated based on assumptions that include the following: • The discount rates used to discount employee benefit obligations (both funded and unfunded): These rates are determined by reference to market yields at the end of the reporting period on high-quality corporate bonds. In countries where there is no deep market in such bonds, the market yields (at the end of the reporting period) on government bonds have been used. The currency and term of the corporate bonds or government bonds are consistent with the currency and duration of the post-employment benefit obligations. • Estimated rates of future pay increases, which include general pay rise expectations, as well as merit increases. Actual increases may not reflect estimated future increases. Due to the significant uncertainty of the global economy, these estimates are difficult to project. |

Amounts recognized in the Consolidated statement of financial position as at December 31:

| 2024 | 2023
EUR million | Funded | Unfunded | Total | Funded | Unfunded | Total
Present value of funded obligation | 211 | — | 211 | 214 | — | 214
Fair value of plan assets | -236 | — | -236 | -220 | — | -220
Net surplus (-) / deficit (+) of funded plans | -25 | — | -25 | -6 | — | -6
Present value of unfunded obligation | — | 152 | 152 | — | 152 | 152
Asset (-) / liability (+) | -25 | 152 | 126 | -6 | 152 | 146
Amounts in the Consolidated statement of financial position |  |  |  |  |  |
Liabilities | 5 | 152 | 157 | 3 | 152 | 154
Assets | 31 | — | 31 | 9 | — | 9
Net liability | -25 | 152 | 126 | -6 | 152 | 146

146
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Amounts recognized in the Consolidated statement of income:

| 2024 | 2023
EUR million | Funded | Unfunded | Total | Funded | Unfunded | Total
Employer's current service cost | 2 | 4 | 6 | 2 | 2 | 4
Net interest on net surplus/deficit | -1 | 5 | 4 | — | 5 | 5
Settlements | — | — | — | — | — | —
Total expenses | 1 | 9 | 10 | 1 | 7 | 9

Changes in the present value of the defined benefit obligation during the period:

| 2024 | 2023
EUR million | Funded | Unfunded | Total | Funded | Unfunded | Total
Present value of obligation at beginning of the period | 214 | 152 | 366 | 216 | 124 | 340
Other adjustments | — | — | — | — | — | —
Acquired in business combinations | 2 | — | 2 | — | 5 | 5
Employer's current service cost | 2 | 4 | 6 | 2 | 2 | 4
Interest expense | 10 | 5 | 15 | 10 | 5 | 15
Liabilities extinguished on settlements | — | — | — | — | — | —
Actuarial gain (-) / loss (+) due to change in financial assumptions | -9 | -2 | -11 | 7 | 12 | 19
Actuarial gain (-) / loss (+) due to change in demographic assumptions | — | — | — | — | 1 | 1
Actuarial gain (-) / loss (+) due to experience | -3 | 2 | -1 | 1 | 7 | 8
Benefits paid from the arrangements | -14 | — | -14 | -14 | — | -15
Benefits paid directly by employer | — | -6 | -7 | — | -5 | -6
Translation differences | 10 | -3 | 7 | -7 | 1 | -6
Present value of defined benefit obligation at end of the period | 211 | 152 | 363 | 214 | 152 | 366
- of which related to active members |  |  | 130 |  |  | 127
- of which related to deferred members |  |  | 49 |  |  | 51
- of which related to pensioner members |  |  | 183 |  |  | 187

Changes in the fair value of the plan assets during the period:

| 2024 | 2023
EUR million | Funded | Unfunded | Total | Funded | Unfunded | Total
Fair value of plan assets at beginning of the period | 220 | — | 220 | 216 | — | 216
Other adjustments to the fair value of assets | — | — | — | -1 | — | —
Acquired in business combinations | 2 | — | 2 | — | — | —
Interest income on assets | 11 | — | 11 | 10 | — | 10
Return on plan assets excluding interest income | 1 | — | 1 | 9 | — | 9
Employer contributions | 5 | — | 5 | 6 | — | 6
Benefits paid from the arrangements | -14 | — | -14 | -14 | — | -15
Translation differences | 12 | — | 12 | -7 | — | -7
Fair value of plan assets at end of the period | 236 | — | 236 | 220 | — | 220

147
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Remeasurement of the net defined benefit liability/asset reported in other comprehensive income:

| 2024 | 2023
EUR million | Funded | Unfunded | Total | Funded | Unfunded | Total
Experience gain (-) / loss (+) on assets | -1 | — | -1 | -9 | — | -9
Actuarial gain (-) / loss (+) on liabilities due to change in financial assumptions | -9 | -2 | -11 | 7 | 12 | 19
Actuarial gain (-) / loss (+) on liabilities due to change in demographic assumptions | — | — | — | — | 1 | 1
Actuarial gain (-) / loss (+) on liabilities due to experience | -3 | 2 | -1 | 1 | 7 | 8
Translation differences | — | — | — | — | — | —
Total gain (-) / loss (+) | -14 | 1 | -13 | -2 | 20 | 18

The major categories of plan assets as a percentage of total plan assets of Valmet’s defined benefit plans:

| 2024 | 2023
As at Dec 31 | Quoted | Unquoted | Total | Quoted | Unquoted | Total
Equities | 10% | — | 10% | 20% | — | 20%
Bonds | 80% | — | 80% | 69% | — | 69%
Other | 1% | 8% | 10% | 1% | 10% | 11%
Total | 92% | 8% | 100% | 90% | 10% | 100%

On December 31, 2024, there were no plan assets invested in
affiliated companies or property occupied by affiliated companies.
The principal actuarial assumptions used to determine the defined benefit obligation (expressed as
weighted averages):

| 2024 | 2023
As at Dec 31 | Funded | Unfunded | All plans | Funded | Unfunded | All plans
Discount rate | 5.2% | 3.7% | 4.6% | 4.7% | 3.6% | 4.3%
Salary increase | 2.9% | 2.9% | 2.9% | 2.0% | 2.9% | 2.4%
Pension increase | 1.1% | 2.0% | 1.4% | 1.2% | 2.0% | 1.5%
Medical cost trend rates | — | 4.5% | 4.5% | — | 4.5% | 4.5%

The weighted average life expectancy used for the major defined benefit plans:

| Life expectancy at age 65 for a male participant currently aged 65 | Life expectancy at age 65 for a female participant currently aged 65
Expressed in years | 2024 | 2023 | 2024 | 2023
Sweden | 22 | 22 | 24 | 24
Canada | 22 | 22 | 24 | 24
USA | 21 | 21 | 23 | 23
Finland | 21 | 21 | 26 | 26

| Life expectancy at age 65 for a male participant currently aged 45 | Life expectancy at age 65 for a female participant currently aged 45
Expressed in years | 2024 | 2023 | 2024 | 2023
Sweden | 24 | 24 | 26 | 26
Canada | 23 | 23 | 25 | 25
USA | 23 | 22 | 24 | 24
Finland | 24 | 24 | 28 | 28

Life expectancy is allowed for in the assessment of the defined
benefit obligation using mortality tables, which are generally based
on experience within the country in which the arrangement is
located, with an allowance made for anticipated future
improvements in longevity in many cases.
148
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Sensitivity analysis of present value of the defined benefit obligation as at December 31:

| 2024 | 2023
EUR million | Funded | Unfunded | Total | Funded | Unfunded | Total
Discount rate |  |  |  |  |  |
Increase of 0.25% | -5 | -6 | -11 | -5 | -6 | -11
Decrease of 0.25% | 5 | 6 | 11 | 5 | 6 | 12
Salary increase rate |  |  |  |  |  |
Increase of 0.25% | — | 4 | 4 | — | 4 | 4
Decrease of 0.25% | — | -3 | -4 | — | -3 | -4
Pension increase rate |  |  |  |  |  |
Increase of 0.25% | — | 4 | 4 | 1 | 4 | 5
Decrease of 0.25% | — | -4 | -4 | -1 | -4 | -4
Medical cost trend |  |  |  |  |  |
Increase of 1% | — | — | — | — | — | —
Decrease of 1% | — | — | — | — | — | —
Life expectancy |  |  |  |  |  |
Increase of one year | 6 | 5 | 11 | 6 | 5 | 12
Decrease of one year | -6 | -5 | -11 | -6 | -5 | -12

The table above presents the changes in the value of the defined
benefit obligation when major assumptions are changed, while
holding the others constant.
Weighted average duration of the defined benefit obligation:

| 2024 | 2023
Expressed in years | Funded | Unfunded | All plans | Funded | Unfunded | All plans
As at December 31 | 9 | 18 | 13 | 10 | 18 | 13

Valmet sponsors both defined contribution and defined benefit
arrangements. Valmet operates various defined benefit pension and
other long-term employee benefit arrangements pursuant to local
conditions, practices and collective bargaining agreements in the
countries in which it operates. The majority of Valmet’s defined
benefit liabilities relate to arrangements that are funded through
payments to either insurance companies or to independently
administered funds based on periodic actuarial calculations. Other
arrangements are unfunded, with benefits being paid directly by
Valmet as they fall due. All arrangements are subject to local tax and
legal restrictions in their respective jurisdictions. Valmet’s defined
benefit arrangements in the USA, Canada and Sweden together
represent 85 percent of Valmet’s defined benefit obligation and 91
percent of its pension assets. These arrangements provide income in
retirement, which is substantially based on salary and service at or
near retirement.
In the USA and Canada, annual valuations are carried out to
determine whether cash funding contributions are required in
accordance with local legislation.
Defined benefit pension arrangements in Sweden are offered in
accordance with collective labor agreements and are unfunded. The
liability recorded on Valmet’s balance sheet and cash contributions
to funded arrangements are sensitive to the assumptions used to
measure the liabilities, the extent to which actual experience differs
from the assumptions made and the returns on plan assets.
Therefore, Valmet is exposed to the risk that balance sheet liabilities
and/or cash contributions will increase due to these impacts.
The assets of Valmet’s funded arrangements are managed by
external fund managers. The allocation of assets is reviewed
regularly by those responsible for managing Valmet’s arrangements
based on local legislation, professional advice and consultation with
Valmet, based on acceptable risk tolerances.
The expected contributions to defined benefit type arrangements in
2025 are EUR 0.2 million in respect of Finnish plans and EUR 5
million in respect of foreign plans. Valmet paid contributions of
EUR 110 million (EUR 98 million) to defined contribution
arrangements during 2024.
149
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16 | Income taxes
Accounting policies
Tax expense in the profit or loss comprises current and deferred
taxes. Taxes are recognized in profit or loss unless they are
associated with items recognized in the Consolidated statement of
comprehensive income or directly in equity.
Current taxes are calculated on the taxable income based on the tax
rates enacted or substantively enacted for each country as at the
balance sheet date. Additionally, non-recoverable foreign taxes on
financing transactions or transactions with shareholders that are not
based on taxable profits are reported in Current tax expenses. Non-
recoverable withholding taxes and foreign taxes on operative items
are reported in Other operating income and expenses. These non-
recoverable foreign taxes include taxes paid that are not creditable
based on the applicable Double Tax Treaty. Taxes are adjusted for
taxes of previous financial periods if applicable. Interest calculated
for the unpaid tax amounts is reported under Financial expenses.
Management evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to
interpretation. The tax provisions recognized in such situations are
based on evaluations by management of the probability that the
items subject to interpretation reported to the tax authorities can be
substantiated on examination.
Deferred taxes are calculated on temporary differences between the
tax bases of assets and liabilities and their carrying amounts in the
financial statements. Deferred taxes have been calculated using the
statutory tax rates or the tax rates enacted or substantively enacted
as at the reporting date. Deferred tax assets are only recognized to
the extent that it is probable that a future taxable profit will be
available against which the temporary differences can be utilized.
The most significan t temporary differences arise from differences in
revenue recognition methods applied for tax purposes, depreciation
differences relating to property, plant and equipment, treatment of
costs arising from defined benefit pension plans, provisions
deductible at a later date, fair value measurement of assets and
liabilities in connection with business combinations, and unused tax
losses. Deferred taxes are not recognized on initial recognition of an
asset or liability in a transaction other than a business combination
that does not affect accounting or tax profit and does not give rise to
equal taxable and deductible temporary differences. Deferred tax
assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities, and
when the deferred income tax assets and liabilities are related to
income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
The legislation implementing the OECD Pillar Two model rules was
enacted in Finland in 2023 and came into effect from January 1,
2024. Valmet applies the exception to recognizing and disclosing
information about deferred tax assets and liabilities related to Pillar
Two income taxes, as provided in the amendments to IAS 12 issued
in May 2023. There were no material current tax impacts in 2024
from Pillar Two taxes.

| Critical accounting estimates and judgments Deferred tax assets and liabilities are recognized for temporary differences. They are expected to be realized through the income statement over extended periods in the future. Valmet management has made certain assumptions regarding future tax consequences and has used certain estimates when calculating differences between carrying amounts of assets and liabilities and their tax bases. Key assumptions underlying tax calculations include the likelihood that recoverability periods for tax loss carryforwards will not change, and that existing tax laws and rates will remain unchanged for the foreseeable future. On each balance sheet date, deferred tax assets are assessed for recoverability, and when circumstances indicate that it is no longer probable that deferred tax assets can be recovered, balances are reduced to their recoverable amounts. Liabilities and assets are recognized with respect to the income tax amounts management is expecting to pay and recover respectively. Management has chosen not to discount non- current tax balances. Valmet entities are subject to tax audits on an ongoing basis. Complex and constantly changing regulations in multiple jurisdictions where Valmet operates create uncertainties related to tax obligations toward the authorities. Changes in the tax authorities’ interpretations could have unfavorable impact on Valmet’s financials. |

150
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The differences between income tax expense computed at the
Finnish statutory rate (20 percent in 2024 and 2023) and income tax
expense recognized in profit or loss are shown in the table below.

EUR million | 2024 | 2023
Profit before taxes | 383 | 473
Taxes calculated according to tax rate in Finland | -77 | -95
Impact of changes in tax rates | — | —
Income tax for previous years | 6 | 5
Effect of different tax rates in foreign subsidiaries | -15 | -14
Utilization of tax losses carried forward | -1 | —
Non-recoverable foreign taxes | -12 | -12
Effect of tax-free income and non-deductible expenses | -3 | -1
Other | -1 | 2
Income tax expense | -103 | -114
Effective tax rate, (%) | 26.8% | 24.2%
Effective tax rate (%), excluding income tax for previous years | 28.5% | 25.2%

Tax effects of components in other comprehensive income:

| 2024 | 2023
EUR million | Before taxes | Tax | After taxes | Before taxes | Tax | After taxes
Gains and losses on cash flow hedges | -8 | 2 | -6 | -12 | 2 | -10
Change in fair value reserve | 1 | — | 1 | — | — | —
Remeasurement of defined benefit plans | 13 | -3 | 10 | -18 | 3 | -15
Currency translation on subsidiary net investments | 2 | — | 2 | -21 | — | -21
Total comprehensive income for the period | 8 | -2 | 6 | -52 | 6 | -46
Deferred tax | — | -2 | — | — | 6 | —
Total | — | -2 | — | — | 6 | —

151
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation of deferred tax balances:

EUR million | Balance at beginning of the period | Translation differences | Charged to income statement | Charged to other compre- hensive income | Acquired in business combination | Balance at end of the period
2024 |  |  |  |  |  |
Deferred tax assets |  |  |  |  |  |
Tax losses carried forward | 5 | — | 2 | — | — | 8
Fixed assets | 8 | — | 1 | — | — | 9
Leases | 31 | — | — | — | 1 | 32
Inventory | 16 | — | -2 | — | 5 | 21
Provisions | 41 | -3 | -4 | — | — | 35
Accruals | 11 | — | -2 | — | — | 10
Employee benefits | 6 | — | -2 | -4 | 1 | 1
Other | 28 | — | 8 | 2 | 5 | 42
Total deferred tax assets | 148 | -3 | 2 | -2 | 13 | 158
Offset against deferred tax liabilities 1 | -59 |  |  |  |  | -64
Net deferred tax assets | 90 |  |  |  |  | 94
Deferred tax liabilities |  |  |  |  |  |
Purchase price allocations | 292 | 2 | -19 | — | 18 | 293
Fixed assets | 9 | — | 1 | — | — | 11
Leases | 33 | — | — | — | 1 | 34
Other | 7 | — | 3 | — | — | 11
Total deferred tax liabilities | 341 | 3 | -16 | 1 | 20 | 348
Offset against deferred tax assets 1 | -58 |  |  |  |  | -64
Net deferred tax liabilities | 283 |  |  |  |  | 284
2023 |  |  |  |  |  |
Deferred tax assets |  |  |  |  |  |
Tax losses carried forward | 6 | — | — | — | — | 5
Fixed assets | 11 | — | -2 | — | — | 8
Leases | 23 | — | -1 | — | 9 | 31
Inventory | 13 | — | — | — | 4 | 16
Provisions | 37 | — | 4 | — | 1 | 41
Accruals | 4 | — | 1 | — | 7 | 11
Employee benefits | 5 | — | -4 | 4 | 1 | 6
Other | 23 | — | 6 | -2 | 1 | 28
Total deferred tax assets | 121 | -1 | 3 | 3 | 23 | 148
Offset against deferred tax liabilities 1 | -60 |  |  |  |  | -59
Net deferred tax assets | 60 |  |  |  |  | 90
Deferred tax liabilities |  |  |  |  |  |
Purchase price allocations | 261 | -1 | -16 | — | 48 | 292
Fixed assets | 9 | — | — | — | 1 | 9
Leases | 24 | — | — | — | 9 | 33
Other | 5 | — | — | -3 | 5 | 7
Total deferred tax liabilities | 299 | -1 | -17 | -3 | 64 | 341
Offset against deferred tax assets 1 | -60 |  |  |  |  | -58
Net deferred tax liabilities | 238 |  |  |  |  | 283

1 Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset tax assets against tax liabilities, and when the deferred income taxes relate to the same
fiscal authority.
152
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A deferred tax liability on undistributed profits of Valmet’s legal
entities located in countries where distribution generates tax
consequences is recognized when it is likely that earnings will be
distributed in the near future. For the years ended December 31,
2024 and 2023, earnings of EUR 67 million a nd EUR 57 million
respectively would have been subject to recognition of a deferred tax
liability had Valmet regarded a distribution in the near future as
likely.
A deferred tax asset is recognized for tax loss carryforwards to the
extent that the realization of the related tax benefit through future
taxable profits is probable. There were no material tax loss
carryforwards for which a deferred tax asset had not been
recognized. Valmet has tax loss carryforwards of EUR 15 million
(EUR 9 million) that will expire within the next five years.
17 | Equity
Share capital and number of shares

| 2024 | 2023
Share capital at end of the period, EUR | 140,000,000 | 140,000,000
Number of shares at end of the period | 184,529,605 | 184,529,605
Treasury shares at end of the period | 364,258 | 368,500
Shares outstanding at end of the period | 184,165,347 | 184,161,105
Average number of shares outstanding during the financial year | 184,159,071 | 184,151,827

Valmet Oyj has one series of shares. The shares of Valmet Oyj do
not have a nominal value.
Board authorizations regarding shares
Valmet Oyj’s Annual General Meeting 2024 authorized Valmet’s
Board of Directors to decide on the repurchase of a maximum
number of 9,200,000 of the Company’s own shares in one or several
tranches. This corresponds to approximately 5.0 percent of all the
shares in the Company.
The Annual General Meeting 2024 also authorized Valmet’s Board
of Directors to decide on the issuance of shares and the issuance of
special rights entitling to shares in one or several tranches. Based on
this authorization, a maximum number of 18,500,000 shares may be
issued, corresponding to approximately 10.0 percent of all the shares
in Valmet.
Based on the authorizations granted by the Annual General Meeting
2024, Valmet's Board of Directors decided in 2024 on a directed
share issue of a total of 736 Valmet's treasury shares and on a fixed-
term share buy-back program for the purpose of acquiring the
Company's own shares in 2025.
Treasury shares
As at December 31, 2024, Valmet Oyj held 364,258 ( 368,500) of its
own shares. These shares have been acquired through purchase on
the Helsinki Stock Exchange (Nasdaq Helsinki Ltd). The total
amount paid to acquire Valmet’s own shares during the reporting
period, including transaction costs, was EUR 3 million (EUR 4
million ), and it has been deducted from Retained earnings in Equity.
Own shares have been acquired for the purposes of Valmet’s long-
term incentive plans.
Dividends
The Board of Directors proposes that a dividend of EUR 1.35 per
share be paid based on the Consolidated statement of financial
position to be adopted for the financial year ended December 31,
2024, and that the remaining part of the Retained earnings be
carried forward in Valmet Oyj’s unrestricted equity. These financial
statements do not reflect this dividend payable of EUR 249 million.
In compliance with the resolution of the Annual General Meeting,
Valmet paid out dividend of EUR 249 million for 2023,
corresponding to EUR 1.35 per share. The dividend was paid in two
installments, the first corresponding to EUR 0.68 per share and the
second corresponding to EUR 0.67 per share. The first installment,
EUR 125 million, was paid on April 11, 2024. The second
installment, EUR 123 million, was paid on October 10, 2024.
Reserve for invested unrestricted equity
The reserve for invested unrestricted equity includes other equity-
related investments and share subscription prices to the extent not
designated to be included in share capital. The reserve for invested
non-restricted equity fund in Valmet’s Consolidated statement of
financial position consists of the fund held by the parent company
Valmet Oyj.
Hedge and other reserves
The hedge reserve includes effective portion of fair value movements
related to derivative financial instruments, which qualify for hedge
accounting.
The fair value reserve includes changes in fair values of interest-
bearing financial assets classified as fair value through other
comprehensive income.
153
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The legal reserve consists of restricted equity, which has been
transferred from distributable funds under the Articles of
Association, local company law or by a decision of the shareholders.
Cumulative translation adjustments
Cumulative translation adjustments consist of currency translation
differences, which relate to the translation of foreign operations
from their functional currencies to Valmet Group’s reporting
currency euro.
18 | Selling, general and administrative expenses

Selling, general and administrative expenses 2024, EUR 1,000 million | Selling, general and administrative expenses 2023, EUR 920 million

Research and development expenses 2024,
EUR 140 million (EUR 131 million)
154
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19 | Other operating income and expenses

EUR million | 2024 | 2023
Gain on sale of fixed assets | 1 | 4
Reversal of allowance for doubtful receivables and contract assets | 4 | 4
Net gain from foreign exchange | — | 3
Interest component from forward contracts | — | 4
Commodity derivatives | — | —
Insurance compensation 1 | 6 | 34
Income related to tax and customs duty adjustments | 2 | 2
Other income | 13 | 12
Other operating income, total | 25 | 64
Loss on sale of fixed assets | — | -1
Impairment of fixed assets and right-of-use assets | -13 | -2
Net loss from foreign exchange | -10 | —
Interest component from forward contracts | -8 | —
Commodity derivatives | — | -5
Non-recoverable foreign taxes | -8 | -12
Allowance for doubtful receivables and contract assets | -10 | -7
Other expenses | -9 | -8
Other operating expenses, total | -59 | -36
Other operating income and expenses, net | -34 | 28

1 Insurance compensation mainly (EUR 6 million in 2024 and EUR 34 million in 2023) relates to income compensating the costs of a fire that happened in May 2022 at Valmet’s
Rautpohja factory site in Jyväskylä.
A fire broke out at Valmet’s Rautpohja factory site in Jyväskylä,
Finland, on May 7, 2022. The fire, which started at a workshop
during a roll test, caused damages to parts of roll and headbox
manufacturing and preassembly. Operations resumed with some
special arrangements, like transferring some of the production to
temporary locations. Valmet maintains property damage and
business interruption insurance and expected to recover fire-related
losses through insurance.
The final settlement with the insurance provider was reached and
the final payment was received in 2024. Valmet has recorded an
insurance compensation of EUR 19 million in 2024 related to the
compensation of the costs incurred. The insurance compensation
was recorded based on the type of insurance partly as a reduction of
cost of goods sold, EUR 13 million, and partly in other operating
income, EUR 6 million. The outstanding receivable towards the
insurance company is nil (EUR 32 million as at 31 December 2023).
In total, Valmet has received EUR 74 million as cash payments in
2022, 2023 and 2024.
Exchange rate differences included in Other operating income and expenses:

EUR million | 2024 | 2023
Exchange rate differences from trade receivables and payables | -14 | -15
Exchange rate differences from derivative financial instruments | 4 | 18
Net gain/loss from foreign exchange | -10 | 3

20 | Business combinations
Acquisition of Körber's
Business Area Tissue
The acquisition of Körber's Business Area Tissue, announced on
July 7, 2023, was completed on November 2, 2023. The business
combination accounting was finalized on October 31, 2024, and the
provisional amounts recognized as at December 31, 2023, were
adjusted to reflect the new information obtained and updated
valuations done during the measurement period. The final goodwill
recognized was EUR 151 million. Finalized fair values of assets
acquired, liabilities assumed, and goodwill recognized is
summarized in the following table.
155
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Acquisition of Process Gas
Chromatography business from Siemens
The acquisition of the Process Gas Chromatography & Integration
business from Siemens AG, announced on July 17, 2023, was
completed on April 2, 2024. The enterprise value of the acquisition
was EUR 102.5 million on a cash and debt-free basis.
The Process Gas Chromatography & Integration business of
Siemens AG is a market leader with its MAXUM II Gas
Chromatograph platform, Systems Integration, and Customer
Services offering. With deep customer process knowledge in
chemicals, liquefied natural gas, refining and biofuels, the business
provides critical process insights to support its customers in
ensuring and improving quality, sustainability, and safety
worldwide. Net sales of Process Gas Chromatography & Integration
business amounted to approximately EUR 120 million in 2022. The
business employs around 300 people, and its main locations are in
the USA, Germany, and Singapore.
The acquisition is in line with Valmet’s strategy and will further
strengthen Valmet’s automation segment and process automation
offering with process industry gas chromatograph and process
analyzer systems offering. It also strengthens Valmet’s Automation
Systems business footprint in North America, Asia-Pacific,
and Europe.
The acquired business is integrated into Valmet’s Automation
Systems business line and has been consolidated into the Group
financials from the acquisition date onwards. The assumed
accounting for the acquisition of the Process Gas Chromatography
& Integration business, including estimated purchase consideration,
is based on provisional amounts and the associated purchase
accounting is not final.
Fair values of assets acquired, liabilities assumed, and goodwill
recognized at the date of acquisition, together with net cash flow
impact is summarized in the following tables. The net assets
acquired are denominated in euro. Goodwill arising from the
business combination is attributable to assembled workforce,
geographic presence and market position, future customers,
technologies and products, and synergies expected to be derived
from the combined business. The goodwill arising from the
acquisition is not expected to be tax-deductible.
From the date of acquisition, the acquired business has contributed
EUR 101 million to net sales and EUR -2 million of profit to the
Group, including EUR 6 million amortization of intangibles and
inventory fair-value step-up recognized at acquisition.
If the acquisition had occurred on January 1, 2024, management
estimates that the combined statement of income would show net
sales of EUR 5,393 million and profit for the period amounting to
EUR 281 million, with the assumption that the fair value
adjustments as at the acquisition date would have been the same if
the acquisition had occurred on January 1, 2024.
Acquisition related costs of EUR 1 million are included in Selling,
general and administrative expenses in the Consolidated statement
of income in 2024.
156
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Fair values of assets acquired and liabilities assumed and goodwill at the date of acquisition:

EUR million | Körber's Business Area Tissue as at November 2, 2023 | Process Gas Chromatography as at April 2, 2024
Non-current assets |  |
Goodwill | 151 | 27
Other intangible assets | 173 | 68
Property, plant and equipment | 28 | 6
Right-of-use assets | 35 | 3
Deferred tax asset | 17 | 5
Other non-current assets | 6 | —
Total non-current assets | 409 | 109
Current assets |  |
Inventories | 146 | 37
Trade receivables | 71 | 18
Amounts due from customers under revenue contracts | — | 2
Other current assets | 15 | 4
Cash and cash equivalents | 39 | 6
Total current assets | 271 | 67
Non-current liabilities |  |
Non-current lease liabilities | 30 | 2
Non-current provisions | 3 | —
Deferred tax liabilities | 50 | 18
Total non-current liabilities | 84 | 20
Current liabilities |  |
Current debt | 53 | 51
Current lease liabilities | 4 | 1
Trade payables | 28 | 12
Current provisions | 4 | 2
Amounts due to customers under revenue contracts | 67 | 16
Other current liabilities | 50 | 8
Total current liabilities | 206 | 91
Net assets acquired | 390 | 66

Cash flows associated with the acquisitions:

EUR million | Körber's Business Area Tissue as at November 2, 2023 | Process Gas Chromatography as at April 2, 2024
Consideration transferred | -390 | -69
Cash and cash equivalents acquired | 39 | 6
Loan repayment at closing | -52 | -51
Net cash outflow | -403 | -114

Acquisitions of the FactoryPal and Demuth
Valmet and Körber have on August 1, 2024, closed the agreement
for Valmet to acquire majority shares in FactoryPal GmbH, an
undertaking of Körber. Following the transaction, Valmet owns
75.1 percent of the shares in the company. FactoryPal is a software
developed for tissue converting operations that improves shopfloor
manufacturing performance and productivity. FactoryPal will
further strengthen Valmet’s offering of advanced Industrial Internet
solutions and digital services to support customers in the tissue
industry. The acquired business has been consolidated into the
Group financials from the acquisition date onwards. The assumed
accounting is based on provisional amounts and the associated
purchase accounting is not final.
On August 2, 2024, Valmet completed the acquisition of Demuth in
Brazil. Demuth provides wood handling solutions for the pulp
industry. The net sales of Demuth are around EUR 20–30 million
annually, and Demuth employs around 400 people in Brazil. The
acquisition is in line with Valmet’s strategy to develop and supply
competitive and reliable process technologies, services and
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
automation to pulp, paper and energy customers. This acquisition
significantly strengthens Valmet’s wood handling technology
offering and services presence in South America. The acquired
business has been consolidated into the Group financials from the
acquisition date onwards. The assumed accounting is based on
provisional amounts and the associated purchase accounting is
not final.
The acquisitions of FactoryPal and Demuth did not, individually or
in aggregate, have a material impact on the results or financial
position of Valmet, or its financial reporting, in 2024.
21 | Financial risk management
As a global Group, Valmet is exposed to a variety of business and
financial risks. Financial risks are managed centrally by the Group
treasury (hereafter Treasury) under annually reviewed written
policies approved by Valmet’s Board of Directors. Treasury
identifies, evaluates and hedges financial risks in close co-operation
with the subsidiaries. Treasury functions as counterparty to the
subsidiaries, manages centrally external funding and is responsible
for the management of financial assets and appropriate hedging
measures. The objective of financial risk management is to mitigate
potential adverse effects of financial risks on Valmet’s financial
performance.
Lease liabilities recognized in the Consolidated statement of
financial position are part of Valmet’s interest-bearing liabilities. To
present information focused on the Group’s long-term funding and
related financial risks, figures presented in this note regarding
liquidity and refinancing risk, capital structure and interest rate risk
management, exclude the impact of lease liabilities. More
information regarding leases is presented in Note 5.
Sensitivity analysis
Sensitivity analysis presented in connection with various financial
risks is based on the risk exposures at the end of the reporting
period.
Sensitivities are calculated by assuming a change in one of the risk
factors of a financial instrument, such as interest or currency rate.
Sensitivity calculations are based on the changes in the relevant risk
variable that are reasonably possible. The reasonably possible
changes are assumed to be a variation of 1 percentage point
(100 basis points) in interest rates, and a 10 percent change in
foreign exchange rates and in commodity prices.
Liquidity and refinancing risk management
Liquidity or refinancing risk arises when a company is not able to
arrange funding at terms and conditions corresponding to its
creditworthiness. Cautious maturity distribution of interest-bearing
debt and sufficient cash, short-term investments and committed and
uncommitted credit facilities are maintained to protect short-term
liquidity and to manage refinancing risk. Diversification of funding
among different markets and an adequate number of financial
institutions are used to safeguard the availability of liquidity at all
times. Treasury monitors bank account structures, cash balances
and forecasts of the subsidiaries and manages the utilization of the
consolidated cash resources.
At the end of the reporting period Cash and cash equivalents
amounted to EUR 482 million (EUR 432 million) and c urrent
interest-bearing financial assets managed centrally by Treasury to
EUR 30 million (EUR 25 million). Due to the global nature of
operations, some of the Valmet subsidiaries are located in countries
in which currency is subject to limited exchangeability or capital
controls. Given Valmet’s total liquidity position, balances in such
countries are immaterial.
In 2024, Valmet issued a green bond (senior unsecured green notes)
of EUR 200 million. The maturity of the bond is five years and it
matures in 2029. The bond carries fixed annual interest of 4.00
percent. The issue price of the bond is 99.871 percent. The net
proceeds from the bond offering will be in accordance with the
Green Finance Framework published by Valmet on March 1, 2024.
The Green Finance Framework is designated to support financing
and refinancing eligible assets and expenditures that promote two
environmental objectives: enabling transition to a circular economy
and mitigating climate change.
In 2024, new term loans worth EUR 175 million were drawn of
which EUR 50 million was a green loan from Swedish Export Credit
Corporation (SEK) issued under Valmet's Green Finance
Framework and EUR 125 million was a term loan from the Nordic
Investment Bank.
Valmet’s liquidity was additionally secured by a committed and
undrawn revolving credit facility worth EUR 300 million, which
matures in 2026, uncommitted and undrawn overdraft limits of
EUR 16 million and a commercial paper program worth EUR 300
million which was undrawn at the end of the reporting period.
Net working capital management is an integral part of the liquidity
risk management. Treasury monitors and forecasts net working
capital fluctuations in close co-operation with the subsidiaries. Net
working capital decreased to EUR 134 million (EUR 191 million) as
at December 31, 2024. In the recent years, Valmet’s net working
capital profile has changed due to increased portion of stable
business, which typically ties up more net working capital than
capital business. In addition, payment schedules of large long-term
projects have a significant impact on net working capital
development.
158
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Group’s refinancing risk is managed by balancing the proportion of
current and non-current interest-bearing debt and average maturity
of non-current interest-bearing debt including committed undrawn
credit facility. The average maturity of non-current interest-bearing
debt, including current portion, as at December 31, 2024, was 3.4
years (3.0 years). The amount of current interest-bearing debt,
including current portion of non-current interest-bearing debt, was
8 percent (8%) of total debt portfolio. As at December 31, 2024,
Valmet’s interest-bearing liabilities consist of debt and lease
liabilities, and debt portfolio includes loans from financial
institutions, issued bonds and commercial papers.
The tables below present undiscounted cash flows on the
repayments and interests on Valmet’s financial liabilities (excl. lease
liabilities and derivatives) as at December 31, 2024 and 2023 by the
remaining maturities from the balance sheet date to the contractual
maturity date. The remaining maturities of lease liabilities are
presented in Note 5, and correspondingly remaining maturities of
derivatives in Note 9.

EUR million | 2025 | 2026 | 2027 | 2028 | 2029 and later |  |  |  |
2024 |  |  |  |  |  |  |  |  |
Loans from financial institutions |  |  |  |  |  |  |  |  |
Repayments | 94 | 49 | 349 | 377 | 296 |  |  |  |
Interests | 47 | 44 | 36 | 17 | 24 |  |  |  |
Bonds |  |  |  |  |  |  |  |  |
Repayments | — | — | — | — | 200 |  |  |  |
Interests | 8 | 8 | 8 | 8 | 8 |  |  |  |
Trade payables and other current financial liabilities | 481 | — | — | — | — |  |  |  |
Total | 630 | 101 | 393 | 402 | 528 |  |  |  |

EUR million | 2024 | 2025 | 2026 | 2027 | 2028 and later
2023 |  |  |  |  |
Loans from financial institutions |  |  |  |  |
Repayments | 40 | 344 | 299 | 99 | 498
Interests | 59 | 58 | 35 | 34 | 23
Trade payables and other current financial liabilities | 582 | — | — | — | —
Total | 681 | 402 | 334 | 133 | 521

The information presented in above tables excludes the impact of lease liabilities and derivatives.
Capital structure management
The capital structure management seeks to safeguard the ongoing
business operations, to ensure flexible access to capital markets and
to secure adequate funding at a competitive rate. Capital structure
management at Valmet comprises both equity and interest-bearing
debt. As at December 31, 2024, total equity was EUR 2,614 million
(EUR 2,572 million) and the amount of interest-bearing debt was
EUR 1,387 million (EUR 1,343 million).
Valmet has not disclosed any long-term financial ratio target for its
capital structure. However, the objective of Valmet is to maintain
strong capital structure in order to secure customers’, investors’,
creditors’ and market confidence. The capital structure is assessed
regularly by the Board of Directors and managed operationally by
Treasury. Loan facility agreements include customary covenants and
Valmet is in clear compliance with the covenants at the end of the
reporting period. Valmet had no credit rating at December 31, 2024.
Capital structure as at December 31

EUR million | 2024 | 2023
Interest-bearing debt | 1,387 | 1,343
Cash and cash equivalents | 482 | 432
Interest-bearing financial assets | 55 | 25
Interest-bearing net debt | 850 | 886
Total equity | 2,614 | 2,572

The information presented in above table excludes the impact of lease liabilities.
159
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Interest rate risk management
Interest rate risk arises when changes in market interest rates and
interest margins influence finance costs, returns on financial
investments and valuation of interest-bearing items. The interest
rate risk is managed and controlled by Treasury. The interest rate
risks are managed through balancing the ratio between fixed and
floating interest rates and duration of interest-bearing debt and
interest-bearing financial assets. Additionally, Valmet may use
derivative instruments such as forward rate agreements, swaps,
options and futures contracts to mitigate the risks arising from
interest-bearing assets and liabilities. The ratio of fixed rate debt of
the total debt portfolio is required to stay within the 10–60 percent
range including the interest rate derivatives. The duration of the
non-current interest-bearing debt, including the current portion,
and the interest rate derivatives is allowed to deviate between
6–42 months.
The fixed rate interest portion was 49 percent (37%), the duration
was 1.2 years (1.3 years) and the EUR denominated debt of the total
debt portfolio was 99 percent (100%) at the end of 2024. The basis
for the interest rate risk sensitivity analysis is an aggregate Group
level interest rate exposure, composed of interest-bearing financial
assets, interest-bearing liabilities (excl. leases) and interest rate
swaps, which are used to hedge the underlying exposures. The
sensitivity analysis does not include the interest component of
foreign exchange derivatives since the impact of a one percentage
point change in interest rates is not significant, assuming similar
change in all currency pairs at the same time. For all interest-bearing
debt, assets and interest rate derivatives to be fixed during the next
12 months a change of one percentage point upwards or downwards
in interest rates with all other variables held constant would have
following effect, net of taxes:

EUR million | 2024 | 2023
Profit for the period | -/+ 2.2 | -/+ 3.4
Equity | +/- 6.9 | +/- 9.0

The information presented in above table excludes the impact of lease liabilities.
Valmet has used interest rate derivatives to hedge the interest rate
risk of its debt portfolio. All interest rate swaps have been designated
to either cash flow or fair value hedge accounting relationships. The
nominal and fair values of the outstanding interest rate derivative
contracts are presented in Note 9.
Foreign exchange rate risk management
Valmet operates globally and is exposed to foreign exchange risk in
several currencies, although the geographical diversity of operations
decreases the significance of any individual currency. Substantial
proportion of Valmet’s net sales and costs are generated in euros
(EUR), US dollars (USD), Swedish kronas (SEK) and Chinese
yuans (CNY).
Transaction exposure
Foreign exchange transaction exposure arises when a subsidiary has
commercial or financial transactions and payments in another
currency than its own functional currency and when related cash
inflow and outflow amounts are not equal or concurrent.
In accordance with Valmet’s treasury policy, subsidiaries are
required to hedge in full the foreign currency exposures on the
Consolidated statement of financial position and other firm
commitments. Cash flows denominated in a currency other than the
functional currency of the subsidiary are hedged with internal
forward exchange contracts with Treasury for periods, which do not
usually exceed two years. Subsidiaries also carry out hedging directly
with the banks in countries where the regulation does not allow
corporate internal cross-border contracts. Treasury monitors the net
position of each currency and decides to what extent a currency
position is to be closed. Treasury is responsible for entering into
external forward transactions corresponding to the internal
forwards whenever a subsidiary applies hedge accounting. Valmet’s
treasury policy defines upper limits on the open currency exposures
managed by Treasury; limits have been calculated on the basis of
their potential profit or loss impact. To manage the foreign currency
exposure Treasury may use forward exchange contracts and foreign
exchange options. Valmet is exposed to foreign currency risk arising
from both on and off-balance sheet items. The foreign currency
exposure is composed of all assets and liabilities denominated in
foreign currencies and their counter values in local currencies.
Calculation includes external and internal short- and long-term
sales and purchase contracts, projected cash flows for unrecognized
firm commitments and financial items, net of respective hedges.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table illustrates Group’s outstanding foreign currency
risk as at December 31:

| 2024
EUR million | EUR | SEK | USD | CNY | Others
Operational items | 239 | -363 | 343 | -228 | 9
of which trade receivables and other current assets | -22 | -168 | 120 | 49 | 21
of which trade payables and other current liabilities | -8 | 49 | -16 | -45 | 19
Financial items | 101 | -92 | 13 | -153 | 131
Hedges | -326 | 449 | -330 | 357 | -151
under hedge accounting | -323 | 257 | -231 | 252 | 46
not qualifying for hedge accounting | -2 | 192 | -99 | 105 | -196
Total exposure | 14 | -6 | 26 | -24 | -10

| 2023
EUR million | EUR | SEK | USD | CNY | Others
Operational items | 53 | -351 | 437 | -178 | 39
of which trade receivables and other current assets | -45 | -165 | 108 | 61 | 40
of which trade payables and other current liabilities | 12 | 64 | -16 | -91 | 32
Financial items | 193 | -35 | -104 | -97 | 44
Hedges | -253 | 377 | -288 | 244 | -81
under hedge accounting | -177 | 283 | -285 | 138 | 39
not qualifying for hedge accounting | -76 | 95 | -2 | 105 | -120
Total exposure | -6 | -9 | 46 | -31 | 2

This Group level currency exposure is the basis for the sensitivity
analysis of foreign exchange risk. Assuming euro to appreciate or
depreciate 10 percent against all other currencies, the impact as at
December 31 on cash flows, net of taxes, would be:

| 2024
EUR million | SEK | USD | CNY | Others | Total
EUR +/- 10% change | +/- 0.5 | -/+ 2.1 | +/- 1.9 | +/- 0.8 | +/- 1.1

| 2023
EUR million | SEK | USD | CNY | Others | Total
EUR +/- 10% change | +/- 0.7 | -/+ 3.7 | +/- 2.5 | -/+ 0.2 | -/+ 0.6

The sensitivity analysis as required by IFRS 7, includes financial
instruments, such as trade and other receivables, trade and other
payables, interest-bearing liabilities, deposits, cash and cash
equivalents and derivative financial instruments.
The table below presents the effects, net of taxes, of a +/- 10 percent
change in EUR against all other currencies:

EUR million | 2024 | 2023
Profit for the period | +/- 5.4 | +/- 6.4
Equity | -/+ 25.9 | -/+ 14.0

Changes in fair value of derivative contracts that qualify for cash
flow hedge accounting are recorded in equity. The effect in profit or
loss is the change in fair value for all other financial instruments
exposed to foreign exchange risk.
The nominal and fair values of the outstanding forward exchange
contracts are presented in Note 9.
Translation or equity exposure
Foreign exchange translation exposure arises when goodwill or fair
value step-ups, or the equity of a subsidiary, is denominated in a
currency other than the functional currency of the parent company.
As at December 31, 2024, the total non-EUR denominated goodwill
and fair value step-ups, and equity of the subsidiaries, was EUR
1,073 million (EUR 1,141 million). The major translation exposures
were in 2024 EU R 428 million in USD and EUR 234 million in CNY,
and respectively in 2023 EUR 431 million in USD and EUR
220 million in CNY. Valmet is currently not hedging any equity
exposure.
161
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Commodity risk management
Valmet is exposed to risk in variations of the prices of raw materials
and of supplies, including energy. Subsidiaries have identified their
commodity price hedging needs and hedges have been executed
through Treasury using approved counterparties and instruments.
For commodity risks, separate overall hedging limits are defined and
approved. Hedging is done on a rolling basis with a declining
hedging level over time. Electricity exposure in the Nordic
subsidiaries has been hedged with electricity forwards and fixed
price physical contracts. Hedging is focused on the estimated energy
consumption for the next two-year period with some contracts
extended to approximately five years. The execution of electricity
hedging has been outsourced to an external broker. As at
December 31, 2024, Valmet had outstanding electricity forwards
amounting to 160 GWh (153 GWh) and 175 GWh (158 GWh)
under fixed price purchase agreements.
To reduce its exposure to the volatility caused by the surcharge for
certain metal alloys (Alloy Adjustment Factor) comprised in the
price of stainless steel charged by its suppliers, Valmet may enter
into average-price swap agreements for nickel. The Alloy
Adjustment Factor is based on monthly average prices of its
components of which nickel is the most significant. Also, to reduce
steel scrap price risk in Valmet's own foundry operations, Valmet
can hedge steel scrap prices using average price swap agreements. As
at December 31, 2024, Valmet had 1,483 metric tons outstanding
a verage price swap agreements for nickel (588 metric tons) and
1,303 metric tons for steel scrap (1,523 metric tons).
The following table presenting the sensitivity analysis of the
commodity prices comprises the net aggregate amount of
commodities bought through forward contracts and swaps but
excludes the anticipated future consumption of raw materials and
electricity.
A 10 percent change upwards or downwards in commodity prices
would have the following effects, net of taxes:

EUR million | 2024 | 2023
Electricity - effect in equity | +/- 0.4 | +/- 0.5
Nickel - effect in profit for the period | +/- 1.3 | +/- 0.7
Nickel - effect in equity | +/- 0.4 | +/- 0.0
Steel scrap - effect in profit for the period | +/- 0.0 | +/- 0.0

Cash flow hedge accounti ng has been applied to electricity forward
contracts and to certain nickel forward agreements and the change
in fair value is recognized in equity. Hedge accounting is not applied
to remaining nickel agreements nor any steel scrap agreements and
the change in the fair value is recorded through Consolidated
statement of income.
Credit and counterparty risk management
Credit or counterparty risk is defined as the possibility of a
customer, subcontractor or a financial counterparty not fulfilling its
commitments towards Valmet. Subsidiaries are primarily
responsible for credit risks pertaining to sales and procurement
activities. The subsidiaries assess the credit standing of their
customers, by taking into account their financial position, past
experience and other relevant factors. Advance payments, letters of
credit and third-party guarantees are actively used to mitigate credit
risks. Treasury provides centralized services related to trade, project
and customer financing and seeks to ensure that the principles of
Valmet’s treasury policy are adhered to with respect to terms of
payment and required collateral. Valmet has no significant
concentrations of credit risks due to the large number and
geographic dispersion of companies that comprise the Group’s
customer base.
The maximum credit risk equals the carrying value of trade and
other receivables, together with contract assets related to contracts
for which revenue is recognized over time. The credit risk quality is
evaluated both on the basis of aging of the trade receivables and also
on the basis of customer specific analysis. The aging structure of
trade receivables is presented in Note 8. Management considers
investments at fair value through other comprehensive income to
have low credit risk as they have a low risk of default and the issuer
has a strong capacity to meet its contractual cash flow obligations in
the near term. Counterparty risk arises also from financial
transactions agreed upon with banks, financial institutions and
corporations. The risk is managed by careful selection of banks and
other counterparties and by applying counterparty specific limits
and netting agreements such as ISDA (Master agreement of
International Swaps and Derivatives Association), see Note 9. All
financial institutions Valmet associates with have investment grade
status. When measuring the financial credit risk exposure, all open
exposures such as cash at bank accounts, investments, deposits and
other financial transactions, for example derivative contracts, are
included. The compliance with financial counterparty limits is
regularly monitored by the management.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22 | Investments in associated companies
Valmet Group has the following associated companies:

Company name |  | Share of ownership |
Place of incorporation and principal place of business | Dec 31, 2024 | Dec 31, 2023 | Measurement
Nanjing SAC Valmet Automation Co., Ltd. | China | 21.95% | 21.95% | Equity method
Valpro gerenciamento de obras Ltda | Brazil | 51.0% | 51.0% | Equity method

Nanjing SAC Valmet Automation Co., Ltd. (SAC) is a company
established in 2011 between Metso Automation Co., Ltd. and
Guodian Nanjing Automation Co., Ltd. Guodian Nanjing
Automation Co., Ltd is a public company, of which the majority is
owned by Huadian Power International Corporation Limited, part
of one of the five biggest power producing companies in China. The
ownership of Metso Automation Co., Ltd. was transferred to Valmet
when the Group completed its acquisition of Process Automation
Systems on April 1, 2015. Nanjing SAC Valmet Automation Co.,
Ltd. concentrates on developing new technology, products and
solutions for digital power plant concepts by combining the
resources of the parties. The associated company focuses especially
on the Chinese market.
Valpro gerenciamento de obras Ltda is classified as a joint venture,
because Valmet has, together with the other shareholder, joint
power to govern the company.
Nanjing SAC Valmet Automation Co., Ltd. and Valpro
gerenciamento de obras Ltda are private companies, and there are
no quoted market prices available for their shares. There are no
contingent liabilities related to Valmet’s interest in Nanjing SAC
Valmet Automation Co., Ltd or Valpro gerenciamento de
obras Ltda.
Summarized financial information for Nanjing SAC Valmet
Automation Co., Ltd. is presented below. The summarized financial
information below represents amounts shown in Nanjing SAC
Valmet Automation Co., Ltd.’s most recent financial statements.
The current and non-current assets and liabilities, revenues, and
results of Valpro gerenciamento de obras Ltda are not material and
are therefore not presented in the below tables.
Summarized financial information

| SAC
EUR million | 2024 | 2023
Balance sheet |  |
Non-current assets | 17 | 17
Current assets | 157 | 126
Non-current liabilities | 1 | 1
Current liabilities | 94 | 68
Net assets | 79 | 74
Valmet’s share of net assets | 17 | 16
Income statement |  |
Revenue | 132 | 121
Profit or loss | 11 | 13
Total comprehensive income | 11 | 13

Valmet had no material transactions with its associated companies
in 2024 or 2023, or material receivables or liabilities as at December
31, 2024, or December 31, 2023.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation to carrying values in Valmet Group:

| SAC
EUR million | 2024 | 2023
Net assets at beginning of the period | 74 | 71
Translation differences | 3 | -4
Profit for the period | 11 | 13
Other comprehensive income for the period | — | —
Dividends paid | -8 | -6
Net assets at end of the period | 79 | 74
Valmet's share of net assets | 17 | 16
Carrying value at end of the period | 17 | 16

Changes in investments in associated companies during the period:

EUR million | 2024 | 2023
Historical cost |  |
Historical cost at beginning of the period | 8 | 8
Historical cost at end of the period | 8 | 8
Equity adjustments |  |
Equity adjustments at beginning of the period | 9 | 7
Profit for the period | 2 | 3
Other comprehensive income for the period | — | —
Dividends received | -2 | -2
Expensing of fair value adjustments | — | —
Equity adjustments at end of the period | 10 | 9
Carrying value at end of the period | 17 | 16

164
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23 | Audit fees
In 2024, the Annual General Meeting of Valmet Oyj elected
Authorised Public Accountants PricewaterhouseCoopers Oy as
Valmet Oyj’s auditor. The table below presents fees for audit and
other services provided by PricewaterhouseCoopers Oy and its
affiliates (PwC) to Valmet Group.

EUR million | 2024 | 2023
Audit fees | -3.0 | -2.5
Audit-related assignments | -0.1 | —
Tax assignments | — | —
Other services 1 | -0.4 | -0.2
Total | -3.6 | -2.7

1 In 2024, Other services includes fees for assurance services regarding the Sustainability Statement.
24 | Contingencies and commitments
Valmet Oyj, with its subsidiaries, and financial institutions have
guaranteed commitments arising from the ordinary course of
business of Valmet Group up to a maximum of EUR 1,100 million
and EUR 1,127 million as at December 31, 2024, and 2023,
r espectively.
On October 15, 2024, Valmet announced that Metsä Fibre Oy has
filed a request for arbitration against Valmet Technologies Oy,
which is a subsidiary of Valmet. The arbitration concerns Metsä
Fibre’s bioproduct mill in Kemi, Finland, which came into operation
as planned on September 20, 2023.
Valmet Technologies Oy disputes the claims brought by Metsä Fibre
and will also actively pursue claims of its own against Metsä Fibre.
Metsä Fibre’s preliminary monetary claims put forward amount to
approximately EUR 47 million. In addition, Metsä Fibre has
informed that it will claim that Valmet Technologies Oy would be
declared liable for certain potential costs which Metsä Fibre might
incur later based on contractual relationships between Metsä Fibre
and other parties. Metsä Fibre estimates that the current value of
such potential claims is approximately EUR 65 million, but
estimates that this amount is likely to decrease.
Valmet’s management does not expect to the best of its current
understanding any material adverse impacts on its operations or
financial position due to this arbitration. This assessment takes into
account the grounds currently presented, provisions made,
insurance coverage in force, and the extent of Valmet’s total
business activities.
Several lawsuits, claims and disputes based on various grounds are
pending against Valmet in various countries, including product
liability lawsuits and claims as well as legal disputes related to
Valmet’s deliveries. Valmet is also a plaintiff in several lawsuits.
Although some of the claims are substantial, Valmet’s management
does not expect to the best of its present understanding that the
outcome of these lawsuits, claims and disputes will have a material
adverse effect on Valmet in view of the grounds currently presented
for them, provisions made, insurance coverage in force and the
extent of Valmet’s total business activities.
165
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25 | Related party information
Valmet’s related parties include Valmet Group companies (see Note
26) and associated companies and joint ventures (see Note 22) as
well as the members of Valmet’s Board of Directors and Executive
Team. Transactions with related parties have been conducted under
normal market terms and conditions and at market prices.
Remuneration of Chief Executive Officer
and other Executive Team members
The table below presents the expenses related to management
compensation that have been recognized in profit or loss. More
information about share-based payments is presented in Note 14.

EUR thousand | Salaries and other short-term benefits | Performance bonuses | Share-based payments | Post-retirement benefits | Resignation benefits | Total
2024 |  |  |  |  |  |
President and CEO from August 12, 2024 | -332 | -506 | -331 | -121 | — | -1,290
President and CEO until August 11, 2024 | -568 | -278 | -650 | -279 | — | -1,775
Other Executive Team members | -3,231 | -1,115 | -2,565 | -1,117 | -91 | -8,119
Total | -4,130 | -1,899 | -3,546 | -1,517 | -91 | -11,184
2023 |  |  |  |  |  |
President and CEO | -797 | -674 | -822 | -393 | -1,958 | -4,645
Other Executive Team members | -3,175 | -1,173 | -2,803 | -1,348 | -150 | -8,649
Total | -3,973 | -1,847 | -3,625 | -1,741 | -2,108 | -13,294

On February 19, 2024, Valmet announced that Valmet’s Board of
Directors has appointed Thomas Hinnerskov as the President and
CEO of Valmet. Thomas Hinnerskov started in the position on
August 12, 2024. He succeeded Pasi Laine, whose resignation was
announced on August 18, 2023. The remuneration of the former
President and CEO was decided in August 2023 in conjunction with
his resignation. The Board of Directors decided to continue salary
payments until July 2025 and make a severance payment of EUR
1,125 thousand to the President and CEO on July 1, 2025. These and
other benefits related to the resignation of the President and CEO
accrued in 2023 totaled to EUR 1,958 thousand. The President and
CEO is considered a Good leaver for the purposes of long- and
short-term incentives and retains rights to all earned incentives, as
well as future incentives for the 2024–2026 performance period.
Pension arrangements for the President and CEO follow local
market practice and legislation. Other Executive Team members
belong to the pension systems of their country of residence and have
a statutory retirement age. The President and CEO and members of
the Executive Team belong to supplementary defined contribution
pension plans.
Contributions to the plans are 15–20 percent of the employee’s
annual salary. Expenses are included in the post-retirement benefits
together with the statutory pension benefits presented in the table
above. The final benefit received by the employee depends on the
return on the plan’s investments.
166
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Remuneration paid to members of the Board of Directors

EUR thousand | 2024 | 2023
Mikael Mäkinen, Chair | -178 | -167
Jaakko Eskola, Vice Chair | -106 | -95
Aaro Cantell, Member (until March 21, 2024) | -4 | -82
Anu Hämäläinen, Member | -99 | -83
Pekka Kemppainen, Member | -91 | -82
Per Lindberg, Member | -87 | -72
Annareetta Lumme-Timonen, Member (from March 21, 2024) | -84 | —
Monika Maurer, Member | -95 | -92
Annika Paasikivi, Member (from March 21, 2024) | -83 | —
Eriikka Söderström, Member (until March 21, 2024) | -6 | -92
Juha Pöllänen, Personnel Representative | -8 | -7
Total | -840 | -771

As at December 31, 2024, the aggregate shareholding of the Board of
Directors, the President and CEO, and other Executive Team
members was 352,105 shares (647,065 shares as at December 31,
2023).
Valmet has no loan receivables from the Executive Team or the
members of the Board of Directors. No pledges or other
commitments have been given on behalf of management or
shareholders.
In 2024 and 2023, Valmet sold goods to entities controlled by a
member of the Board of Directors and purchased services from the
same entities. The value of these sales amounted to EUR 196
thousand and purchases to EUR 0 thousand (EUR 487 thousand of
sales and EUR 80 thousand of purchases in 2023). Valmet had no
outstanding receivables nor payables to entities controlled by a
member of the Board of Directors at the end of the reporting period
(EUR 45 thousand of receivables and EUR 14 thousand of current
payables at December 31, 2023).
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26 | Subsidiaries

Company name | Country of incorporation and place of business | Parent holding, % | Group ownership interest, %
Neles Australia Flow Control Pty Ltd 1 | Australia | — | 100.0
Valmet Pty Ltd | Australia | — | 100.0
Valmet GesmbH | Austria | — | 100.0
Valmet Belgium BV | Belgium | — | 100.0
Demuth Máquinas Industriais Ltda. | Brazil | — | 100.0
Estruturas Metálicas e Sistemas Construtivos Demuth Ltda. | Brazil | — | 100.0
Premium Participações Societárias S.A. | Brazil | — | 100.0
Valmet Celulose, Papel e Energia Ltda. | Brazil | — | 100.0
Valmet Engraving Solutions Ltda. | Brazil | — | 100.0
Valmet Fabrics Tecidos Técnicos Ltda. | Brazil | — | 100.0
Valmet Flow Control Ltda. | Brazil | — | 100.0
Valmet Tissue Converting Ltda. | Brazil | — | 100.0
Valmet Ltd. | Canada | — | 100.0
Valmet Flow Control SpA | Chile | — | 100.0
Valmet S.A. | Chile | — | 100.0
Neles (China) Investment Co., Ltd. | China | 100.0 | 100.0
Valmet (China) Co., Ltd. | China | — | 100.0
Valmet Automation (Shanghai) Co., Ltd. | China | — | 100.0
Valmet Fabrics (China) Co., Ltd. | China | — | 100.0
Valmet Flow Control (Jiaxing) Co., Ltd. | China | — | 100.0
Valmet Flow Control (Shanghai) Co., Ltd. | China | — | 100.0
Valmet Paper (Shanghai) Co., Ltd. | China | — | 100.0
Valmet Paper Machinery (Changzhou) Co., Ltd. | China | — | 100.0
Valmet Paper Technology (China) Co., Ltd. | China | — | 100.0
Valmet Paper Technology (Guangzhou) Co., Ltd. | China | — | 100.0
Valmet Paper Technology (Xi'an) Co., Ltd. | China | — | 75.0
Valmet Technologies Co., Ltd. | China | — | 100.0
Valmet Tissue Converting (Nantong) Co., Ltd. | China | — | 100.0
Valmet Tissue Converting (Shanghai) Co., Ltd. | China | — | 100.0
Valmet d.o.o. | Croatia | — | 100.0
Valmet s.r.o. | Czech Republic | — | 100.0
Valmet Automation Oy | Finland | 100.0 | 100.0
Valmet Flow Control Oy | Finland | 100.0 | 100.0
Valmet Kauttua Oy | Finland | — | 100.0
Valmet Technologies Oy | Finland | 100.0 | 100.0
Valmet Automation SAS | France | — | 100.0
Valmet Flow Control SAS | France | — | 100.0
Valmet SAS | France | — | 100.0
FactoryPal GmbH | Germany | — | 75.1
Gas Chromatography Systems MAXUM GmbH | Germany | — | 100.0
Valmet Deutschland GmbH | Germany | — | 100.0
Valmet Flow Control GmbH | Germany | — | 100.0
Valmet GmbH | Germany | — | 100.0
Valmet Flow Control Private Limited | India | — | 100.0
Valmet Technologies Private Limited | India | — | 100.0
PT Valmet | Indonesia | — | 100.0
PT Valmet Automation Indonesia | Indonesia | — | 100.0
PT Valmet Technology Center | Indonesia | — | 100.0
Valmet Engraving Solutions S.r.l. | Italy | — | 100.0

1 Under liquidation.
168
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Company name | Country of incorporation and place of business | Parent holding, % | Group ownership interest, %
Valmet Flow Control S.p.A. | Italy | — | 100.0
Valmet S.p.A. | Italy | — | 100.0
Valmet Tissue Converting S.p.A. | Italy | — | 100.0
Valmet Tissue Converting S.r.l. | Italy | — | 100.0
Valmet K.K. | Japan | — | 100.0
Valmet Tissue Converting Co., Ltd. | Japan | — | 100.0
Neles Flow Control Malaysia Sdn. Bhd.1 | Malaysia | — | 100.0
Valmet Sdn. Bhd. | Malaysia | — | 100.0
Valmet Flow Control SA de C.V. | Mexico | — | 100.0
Valmet Technologies S. de R.L. de C.V. | Mexico | — | 100.0
Valmet B.V. | Netherlands | — | 100.0
Valmet AS | Norway | — | 100.0
Valmet Flow Control S.A.C.1 | Peru | — | 100.0
Valmet Automation Sp. z o.o. | Poland | — | 100.0
Valmet Flow Control Sp. z o.o. | Poland | — | 100.0
Valmet Services Jelenia Góra Sp. z o.o. | Poland | — | 100.0
Valmet Services Sp. z o.o. | Poland | — | 100.0
Valmet Technologies and Services S.A. | Poland | — | 100.0
Valmet, Lda | Portugal | — | 100.0
Valmet Flow Control, Unipessoal Lda | Portugal | — | 100.0
Valmet Trading and Contracting W.L.L.2 | Qatar | — | 49.0
Valmet Flow Control Co., Ltd. | Republic of Korea | — | 100.0
Valmet Inc. | Republic of Korea | — | 100.0
Valmet Flow Control S.R.L. | Romania | — | 100.0
Valmet Flow Control Industrial LLC | Saudi Arabia | — | 70.0
Gas Chromatography Systems MAXUM Pte. Ltd. | Singapore | — | 100.0
Valmet Flow Control Pte. Ltd. | Singapore | — | 100.0
Valmet Pte. Ltd. | Singapore | — | 100.0
Valmet Flow Control South Africa Pty Ltd | South Africa | — | 100.0
Valmet South Africa (Pty) Ltd | South Africa | — | 100.0
Valmet Technologies, S.A.U. | Spain | — | 100.0
Valmet Technologies Zaragoza, S.L. | Spain | — | 81.0
Valmet AB | Sweden | 100.0 | 100.0
Valmet Co., Ltd. | Thailand | — | 100.0
Valmet Flow Control Co., Ltd.1 | Thailand | — | 100.0
Valmet Flow Control Turkey Dis Ticaret A.S. | Turkey | — | 100.0
Valmet Selüloz Kagit ve Enerji Teknolojileri A.S. | Turkey | — | 100.0
Valmet Flow Control LLC 2 | United Arab Emirates | — | 49.0
Valmet FZE | United Arab Emirates | — | 100.0
Valmet Process Technologies and Services LLC 2 | United Arab Emirates | — | 49.0
Neles UK Ltd 1 | United Kingdom | — | 100.0
Valmet Limited | United Kingdom | — | 100.0
Gas Chromatography Systems MAXUM LLC | USA | — | 100.0
Neles-Jamesbury, Inc. | USA | 100.0 | 100.0
Valmet, Inc. | USA | 48.7 | 100.0
Valmet Flow Control Inc. | USA | — | 100.0
Valmet Tissue Converting, Inc. | USA | — | 100.0
Valmet Co., Ltd. | Vietnam | — | 100.0

1 Under liquidation.
2 Based on contractual arrangement, the Group has full control of the company and is consolidating the entity 100%.
169
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27 | Events after the reporting period
There has been no subsequent events after the reporting period that
required recognition or disclosure.
28 | New accounting standards
New IFRS Accounting Standards adopted
Valmet Group has applied new standards, amendments and
interpretations published by IASB that are effective for the first time
for financial reporting periods commencing on January 1, 2024.
These standards, amendments and interpretations did not have a
material impact on the results or financial position of Valmet
Group, or the presentation of financial statements.
New IFRS Accounting Standards
not yet adopted
Valmet Group has not identified any new standards, amendments or
interpretations published by IASB that apply for the first time to
financial reporting periods commencing on or after January 1, 2025,
that are expected to have a material impact on the results or
financial position of Valmet Group, or the presentation of financial
statements, except for IFRS 18 Presentation and Disclosure in
Financial Statements published in April 2024.
IFRS 18 sets out requirements for the presentation and disclosure of
information in financial statements and it will replace IAS 1
Presentation of Financial Statements. IFRS 18 is effective for annual
reporting periods beginning on or after January 1, 2027, with earlier
application permitted. IFRS 18 is yet to be endorsed by the EU.
Valmet is assessing the impact of IFRS 18 on its consolidated
financial statements, but as it does not impact the recognition and
measurement requirements it is not expected to have any significant
impact other than on the presentation of financial information, and
mainly on the presentation of the Consolidated statement of
income, the Consolidated statement of cash flows and the notes to
the consolidated financial statements.
170
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
PARENT COMPANY FINANCIAL STATEMENTS
Parent company statement of income, FAS

EUR thousand | Note | 2024 | 2023
Net sales |  | 15,073 | 7,748
Personnel expenses | 2 | -23,795 | -22,702
Depreciation and amortization | 7 | -749 | -745
Other operating expenses | 3, 4 | -15,110 | -27,319
Operating profit |  | -24,580 | -43,018
Financial income and expenses, net | 5 | 265,881 | 169,060
Profit before appropriations and taxes |  | 241,301 | 126,042
Group contributions |  | 107,231 | 199,697
Income taxes | 6 | -15,637 | -28,952
Profit for the period |  | 332,896 | 296,788

171
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
PARENT COMPANY FINANCIAL STATEMENTS
Parent company statement of financial position, FAS
Assets

EUR thousand | Note | 2024 | 2023
Non-current assets |  |  |
Intangible assets | 7 | 360 | 844
Property, plant and equipment | 7 | 3,714 | 3,971
Equity investments | 8 | 2,270,938 | 2,270,938
Non-current receivables | 10, 11 | 532,660 | 451,433
Total non-current assets |  | 2,807,673 | 2,727,186
Current assets |  |  |
Current receivables | 10, 11 | 655,691 | 763,946
Cash and cash equivalents |  | 242,303 | 179,509
Total current assets |  | 897,994 | 943,455
Total assets |  | 3,705,666 | 3,670,641

Equity and liabilities

EUR thousand | Note | 2024 | 2023
Equity | 12 |  |
Share capital |  | 140,000 | 140,000
Reserve for invested unrestricted equity |  | 486,993 | 484,128
Hedge and other reserves |  | -2,670 | -290
Retained earnings |  | 767,650 | 722,052
Profit for the period |  | 332,896 | 296,788
Total equity |  | 1,724,869 | 1,642,677
Provisions |  |  |
Other provisions |  | — | 2,276
Liabilities |  |  |
Non-current liabilities | 11, 13 | 1,286,975 | 1,258,462
Current liabilities | 11, 14 | 693,823 | 767,227
Total liabilities |  | 1,980,798 | 2,025,689
Total equity and liabilities |  | 3,705,666 | 3,670,641

172
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
PARENT COMPANY FINANCIAL STATEMENTS
Parent company statement of cash flows, FAS

EUR thousand | 2024 | 2023
Cash flows from operating activities |  |
Profit before appropriations and taxes | 241,301 | 126,042
Adjustments |  |
Depreciation and amortization | 749 | 745
Financial income and expenses, net | -265,881 | -169,060
Other non-cash items | -3,289 | 9,097
Total adjustments | -268,421 | -159,218
Change in working capital | 10,584 | 16,106
Interest and other financial expenses paid | -96,659 | -58,604
Dividends received | 296,392 | 193,085
Interest and other financial income received | 64,513 | 32,726
Income taxes paid | -26,451 | -21,223
Net cash provided by (+) / used in (-) operating activities | 221,259 | 128,913
Cash flows from investing activities |  |
Investments in tangible and intangible assets | -8 | -80
Net increase (-) / decrease (+) in loan receivables from Group companies | -26,561 | -412,830
Net cash provided by (+) / used in (-) investing activities | -26,569 | -412,910
Cash flows from financing activities: |  |
Purchase of treasury shares | -2,560 | -3,987
Issue of treasury shares to Group companies | 2,102 | 2,354
Dividends paid | -248,630 | -239,403
Group contribution received | 199,594 | 164,620
Proceeds from non-current debt | 374,742 | 725,000
Repayments of current portion of non-current debt | -289,978 | -39,978
Net proceeds from (+) / repayments of (-) current debt | -44,219 | -50,521
Net proceeds from (+) / repayments of (-) debt from Group companies | -16,263 | -15,971
Net increase (+) / decrease (-) in Group pool accounts | -106,684 | -192,641
Net cash provided by (+) / used in (-) financing activities | -131,896 | 349,475
Net increase (+) / decrease (-) in cash and cash equivalents | 62,795 | 65,478
Cash and cash equivalents at beginning of the period | 179,509 | 114,031
Cash and cash equivalents at end of the period | 242,303 | 179,509

173
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
Notes to parent company financial statements
1 | Accounting principles
The parent company’s financial statements have been prepared in
accordance with the Finnish Accounting Standards (FAS).
Where necessary, comparative information has been reclassified to
achieve consistency in disclosure with current financial year
amounts.
Non-current assets
Tangible and intangible assets are measured at historical cost, less
accumulated depreciation according to plan. Land and water areas
are not depreciated.
Depreciation and amortization are calculated on a straight-line basis
over the expected useful lives of the assets as follows:

Intangible assets | 10 years
Buildings and structures | 12–30 years
Machinery and equipment | 5–10 years
Other tangible assets | 20 years

Investments in subsidiaries and other companies are measured at
cost less impairment loss.
F inancial instruments
Valmet’s financial risk management is carried out centrally by the
Group treasury (hereafter Treasury) under annually reviewed
written policies approved by Valmet’s Board of Directors. Treasury
functions in co-operation with the operating units to minimize
financial risks to both the parent company and the Group.
Forward exchange derivative contracts are used to hedge foreign
exchange rate risk, and these instruments are measured at fair value.
The change in the fair value of derivative instruments used to hedge
operative items (e.g., foreign currency denominated sales and
purchase transactions) is reported under Other operating income
and expenses in profit or loss. The change in the fair value of
derivatives used to hedge non-operative items (e.g., interest-bearing
financial assets and liabilities, and other items related to funding) are
reported under Financial income and expenses in profit or loss. The
fair value of forward exchange contracts is determined using
forward exchange market rates at the balance sheet date.
Cash flow hedge accounting is applied to interest rate swaps hedging
future changes in cash flows arising from floating rate debt. The fair
value of the interest rate swaps is calculated as the present value of
the estimated future cash flows arising from the contract. The gain
or loss related to the ineffective portion of hedging instruments is
expensed immediately and is reported under Financial income and
expenses. Interest arising from interest rate swaps is reported under
Financial income and expenses concurrently with interest expense
arising from hedged floating rate debt.
Fair value hedge accounting is applied to certain fixed-rate loans.
These fixed-rate loans create an exposure to fixed interest payments
and the hedging instruments, interest rate swaps, receives fixed
interest payments. There is an expectation that the value of the
hedging instrument and the underlying hedged risk move in
opposite direction. The change in fair value of the interest rate swap
hedging the loan is recognized in Financial income and expenses in
profit or loss concurrently with the change in value of the
underlying hedged fixed-rate loan.
The derivative contracts used to hedge the commodity risk related to
electricity and nickel are measured at fair value, and the changes in
fair values are recognized in Other operating income and expenses
in profit or loss. The fair value of commodity derivatives is based on
quoted market prices at the balance sheet date.
Interest-bearing financial investments managed centrally by the
Treasury are measured at fair value. The change in the fair value is
recognized in fair value reserve within Equity in the Statement of
financial position. The fair values of the interest-bearing financial
assets are determined using prevailing market rates at the balance
sheet date.
Further details on financial instruments are presented in Note 21 of
the Consolidated financial statements.
Pensions
An external pension insurance company manages the parent
company’s statutory and voluntary pension plans, which are all
defined contribution in nature. Contributions are expensed to the
Statement of income as incurred.
Deferred taxes
A deferred tax liability or asset has been calculated for all temporary
differences between tax bases of assets and liabilities and their
amounts in financial reporting, using the tax rates enacted or
substantially enacted by the balance sheet date. The deferred tax
liabilities are recognized in the Statement of financial position in
full, and the deferred tax assets are recognized when it is probable
that there will be sufficient taxable profit against which the asset can
be utilized.
Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the individual transaction. Foreign
currency denominated monetary items recognized in the Statement
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
of financial position have been translated into the functional
currency at the exchange rates prevailing at the balance sheet date.
Exchange rate gains and losses related to operative items are
reported under Other operating income and expenses in the
Statement of income, whereas exchange rate gains and losses related
to non-operative items are reported under Financial income and
expenses.
Receivables
Receivables are initially recognized at nominal amounts.
Subsequently, they are measured at amortized cost, less provision for
impairment.
Share-based incentive plan
Rewards arising from share-based incentive plans are settled partly
in shares and partly in cash. The shares to be transferred as part of
the plan are obtained in public trading. The acquisition of shares is
recognized as a decrease in Retained earnings and transfer of shares
as a n increase in Reserve for invested unrestricted equity and
Personnel expenses. The part settled in cash is recognized in the
Statement of income under Personnel expenses at the time of
payment.
Leasing
Lease payments have been recognized as rental expenses in the
Statement of income.
Related parties
The parent company's related parties include Valmet Group
companies, associated companies and joint ventures as well as the
members of Valmet’s Board of Directors and Executive Team.
Transactions with related parties have been conducted under
normal market terms and conditions and at market prices.
2 | Personnel expenses

EUR thousand | 2024 | 2023
Salaries and wages | -20,333 | -18,926
Pension costs | -3,118 | -3,200
Other indirect employee costs | -344 | -577
Total | -23,795 | -22,702

Remuneration to management:

EUR thousand | 2024 | 2023
President and CEO from 12 August 2024 | -1,290 | —
President and CEO until 11 August 2024 | -1,775 | -4,645
Members of the Board | -840 | -771
Total | -3,906 | -5,416

On February 19, 2024, Valmet announced that Valmet’s Board of
Directors has appointed Thomas Hinnerskov as the President and
CEO of Valmet. Thomas Hinnerskov started in the position on
August 12, 2024. He succeeded Pasi Laine, whose resignation was
announced on August 18, 2023.
Pension arrangements for the President and CEO follow local
market practice and legislation. The President and CEO belongs to a
supplementary defined contribution plan. The contribution to the
plan is 20 percent of his annual salary.
Expenses are included in the remuneration to management table
above. Additional information about management remuneration is
presented in Note 25 of the Consolidated financial statements.
175
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
Number of personnel:

| 2024 | 2023
Personnel at end of the period | 153 | 143
Average number of personnel during the period | 150 | 144

3 | Other operating income and expenses

EUR thousand | 2024 | 2023
Consulting and other services | -13,421 | -15,683
IT | -1,056 | -1,017
Change in fair value of derivatives | -232 | -8,428
Other | -401 | -2,191
Other operating expenses, total | -15,110 | -27,319

4 | Audit fees

EUR thousand | 2024 | 2023
Audit fees | -596 | -529
Audit-related assignments | -45 | -2
Tax assignments | — | —
Other services 1 | -369 | -129
Total | -1,009 | -660

1 In 2024, Other services Includes fees for assurance services regarding the Sustainability Statement.
5 | Financial income and expenses

| 2024 | 2023
EUR thousand | Group companies | Others | Total | Group companies | Others | Total
Dividends received | 296,100 | 291 | 296,392 | 192,668 | 416 | 193,085
Interest income | 51,952 | 11,420 | 63,372 | 27,783 | 7,182 | 34,965
Gain on sale of subsidiary | — | — | — | 5,575 | — | 5,575
Interest expenses | -22,410 | -66,836 | -89,246 | -28,848 | -33,888 | -62,737
Net gain/loss from foreign exchange | 506 | -100 | 406 | 4,275 | -3,783 | 492
Interest component from forward contracts | 1,626 | -3,920 | -2,294 | 994 | -1,375 | -381
Other financial expenses | — | -2,748 | -2,748 | — | -1,939 | -1,939
Total | 327,774 | -61,893 | 265,881 | 202,447 | -33,387 | 169,060

6 | Income taxes

EUR thousand | 2024 | 2023
Income tax for the financial period | -15,619 | -29,241
Income tax for previous periods | 6 | -3
Change in deferred taxes | -24 | 293
Total | -15,637 | -28,952

176
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
7 | Intangible assets and property, plant and equipment

EUR thousand | Intangible assets | Land areas | Buildings and structures | Machinery and equipment | Other tangible assets | Tangible assets total | Total
2024 |  |  |  |  |  |  |
Acquisition cost at beginning of the period | 2,739 | 809 | 9,526 | 632 | 603 | 11,570 | 14,308
Additions | — | — | 8 | — | — | 8 | 8
Acquisition cost at end of the period | 2,739 | 809 | 9,534 | 632 | 603 | 11,577 | 14,316
Accumulated depreciation at beginning of the period | -1,895 | — | -6,698 | -594 | -305 | -7,598 | -9,493
Depreciation | -484 | — | -230 | -8 | -27 | -265 | -749
Accumulated depreciation at end of the period | -2,379 | — | -6,928 | -602 | -332 | -7,863 | -10,241
Carrying value at end of the period | 360 | 809 | 2,605 | 29 | 271 | 3,714 | 4,075

EUR thousand | Intangible assets | Land areas | Buildings and structures | Machinery and equipment | Other tangible assets | Tangible assets total | Total
2023 |  |  |  |  |  |  |
Acquisition cost at beginning of the period | 2,757 | 809 | 9,476 | 592 | 596 | 11,472 | 14,229
Additions | — | — | 50 | 26 | 3 | 80 | 80
Reclassifications | -18 | — | — | 14 | 4 | 18 | —
Acquisition cost at end of the period | 2,739 | 809 | 9,526 | 632 | 603 | 11,570 | 14,308
Accumulated depreciation at beginning of the period | -1,411 | — | -6,466 | -592 | -279 | -7,337 | -8,747
Depreciation | -484 | — | -233 | -3 | -26 | -262 | -745
Accumulated depreciation at end of the period | -1,895 | — | -6,698 | -594 | -305 | -7,598 | -9,493
Carrying value at end of the period | 844 | 809 | 2,827 | 38 | 298 | 3,971 | 4,816

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
8 | Investments

EUR thousand | Shares in Group companies | Other shares | Investments total
2024 |  |  |
Acquisition cost at beginning of the period | 2,269,282 | 1,656 | 2,270,938
Acquisition cost at end of the period | 2,269,282 | 1,656 | 2,270,938
Carrying value at end of the period | 2,269,282 | 1,656 | 2,270,938

EUR thousand | Shares in Group companies | Other shares | Investments total
2023 |  |  |
Acquisition cost at beginning of the period | 2,279,833 | 1,657 | 2,281,489
Disposals | -10,551 | -1 | -10,552
Acquisition cost at end of the period | 2,269,282 | 1,656 | 2,270,938
Carrying value at end of the period | 2,269,282 | 1,656 | 2,270,938

9 | Subsidiaries

Company name | Domicile | Ownership %
Valmet Technologies Oy | Finland | 100.0
Valmet Automation Oy | Finland | 100.0
Valmet Flow Control Oy | Finland | 100.0
Valmet AB | Sweden | 100.0
Valmet, Inc. | USA | 48.7
Neles-Jamesbury Inc. | USA | 100.0
Neles (China) Investment Co., Ltd. | China | 100.0

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
10 | Specification of receivables
Non-current receivables as at December 31:

EUR thousand | 2024 | 2023
Loan receivables from Group companies | 518,397 | 432,445
Deferred tax assets | 1,576 | 1,005
Derivatives from Group companies | 6,422 | 6,262
Derivatives from others | 6,265 | 11,721
Non-current receivables total | 532,660 | 451,433

Current receivables as at December 31:

| 2024 | 2023
EUR thousand | From group companies | From others | Total | From group companies | From others | Total
Trade receivables | 13,784 | — | 13,784 | 10,295 | — | 10,295
Loan receivables | 133,012 | — | 133,012 | 187,931 | — | 187,931
Group pool accounts | 310,304 | — | 310,304 | 264,678 | — | 264,678
Prepaid expenses and accrued income | 149,169 | 47,819 | 196,989 | 243,275 | 39,103 | 282,378
Other receivables | — | 1,602 | 1,602 | — | 18,664 | 18,664
Current receivables total | 606,269 | 49,422 | 655,691 | 706,179 | 57,768 | 763,946

Specification of prepaid expenses and accrued income as at December 31 :

EUR thousand | 2024 | 2023
Prepaid expenses and accrued income from Group companies |  |
Group contribution receivables | 107,357 | 199,720
Accrued interest income | 11,427 | 8,884
Derivatives | 30,011 | 33,581
Other | 374 | 1,089
Total | 149,169 | 243,275
Other prepaid expenses and accrued income |  |
Derivatives | 23,797 | 27,977
Other | 24,022 | 11,126
Total | 47,819 | 39,103

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
11 | Financial assets and liabilities recognized at fair value
Notional amounts and fair values as at December 31:

EUR thousand | Notional amount | Fair value, assets | Fair value, liabilities | Fair value, net | Changes in fair value recognized in profit or loss | Changes in fair value recognized in hedge reserve
2024 |  |  |  |  |  |
Forward exchange contracts |  |  |  |  |  |
With Group companies | 3,267,809 | 35,497 | -23,522 | 11,975 | 30,933 | —
Others | 3,507,296 | 25,263 | -34,085 | -8,822 | -31,476 | —
Foreign exchange options |  |  |  |  |  |
With Group companies (sold) | 149,576 | — | -126 | -126 | 8 | —
Others (bought) | 149,576 | 126 | — | 126 | -8 | —
Interest rate swaps 1 |  |  |  |  |  |
Others | 650,000 | 4,235 | -6,463 | -2,228 | 477 | -3,980
Electricity forward contracts 2 |  |  |  |  |  |
Others | 160 | 415 | -1,019 | -604 | -592 | —
Nickel commodity swaps 3 |  |  |  |  |  |
With Group companies | 1,483 | 916 | -3 | 913 | 1,121 | —
Others | 1,483 | 3 | -916 | -913 | -1,121 | —
Steel scrap commodity swaps 3 |  |  |  |  |  |
With Group companies | 1,303 | 40 | — | 40 | 75 | —
Others | 1,303 | — | -40 | -40 | -75 | —

EUR thousand | Notional amount | Fair value, assets | Fair value, liabilities | Fair value, net | Changes in fair value recognized in profit or loss | Changes in fair value recognized in hedge reserve
2023 |  |  |  |  |  |
Forward exchange contracts |  |  |  |  |  |
With Group companies | 2,985,423 | 37,880 | -35,020 | 2,860 | 11,871 | —
Others | 3,148,645 | 34,229 | -37,534 | -3,306 | -18,419 | —
Interest rate swaps 1 |  |  |  |  |  |
Others | 510,000 | 4,681 | -5,044 | -363 | 982 | -363
Electricity forward contracts 2 |  |  |  |  |  |
Others | 153 | 790 | -800 | -10 | -8,728 | —
Nickel commodity swaps 3 |  |  |  |  |  |
With Group companies | 588 | 1,957 | — | 1,957 | 3,591 | —
Others | 588 | — | -1,957 | -1,957 | -3,591 | —
Steel scrap commodity swaps 3 |  |  |  |  |  |
With Group companies | 1,523 | 15 | -8 | 7 | -34 | —
Others | 1,523 | 8 | -15 | -7 | 34 | —

1 All interest rate swaps have been designated either to cash flow or fair value h edge accounting relationships.
2 Notional amount in GWh.
3 Notional amount in metric tons.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
Maturities of financial derivatives as at December 31:

| 2025 | 2026 | 2027 | 2028 | 2029 and later | Total
2024 |  |  |  |  |  |
Notional amounts |  |  |  |  |  |
Forward exchange contracts 1 | 5,724,819 | 1,047,581 | 2,706 | — | — | 6,775,106
Foreign exchange options 1 | 299,151 | — | — | — | — | 299,151
Electricity forward contracts 2 | 105 | 46 | 9 | — | — | 160
Nickel commodity swaps 3 | 2,750 | 216 | — | — | — | 2,966
Steel scrap commodity swaps 3 | 2,606 | — | — | — | — | 2,606
Interest rate swaps 1 | 120,000 | 200,000 | 170,000 | 60,000 | 100,000 | 650,000
Fair values, EUR thousand |  |  |  |  |  |
Forward exchange contracts | 3,050 | 103 | — | — | — | 3,153
Foreign exchange options | 126 | — | — | — | — | 126
Electricity forward contracts | -497 | -91 | -15 | — | — | -604
Nickel commodity swaps | — | — | — | — | — | —
Steel scrap commodity swaps | — | — | — | — | — | —
Interest rate swaps | -318 | -1,306 | -1,339 | -1,016 | 1,751 | -2,228

| 2024 | 2025 | 2026 | 2027 | 2028 and later | Total
2023 |  |  |  |  |  |
Notional amounts |  |  |  |  |  |
Forward exchange contracts 1 | 5,415,352 | 640,819 | 77,898 | — | — | 6,134,068
Electricity forward contracts 2 | 92 | 44 | 18 | — | — | 153
Nickel commodity swaps 3 | 1,176 | — | — | — | — | 1,176
Steel scrap commodity swaps 3 | 3,046 | — | — | — | — | 3,046
Interest rate swaps 1 | 65,000 | 95,000 | 160,000 | 150,000 | 40,000 | 510,000
Fair values, EUR thousand |  |  |  |  |  |
Forward exchange contracts | -544 | 94 | 3 | — | — | -446
Electricity forward contracts | 140 | -72 | -78 | — | — | -10
Nickel commodity swaps | — | — | — | — | — | —
Steel scrap commodity swaps | — | — | — | — | — | —
Interest rate swaps | -194 | 77 | -8 | -253 | 14 | -363

1 Notional amount in EUR thousand.
2 Notional amount in GWh.
3 Notional amount in metric tons.
181
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
Classification of financial assets and liabilities as at December 31:

EUR thousand 1 | 2024 | 2023
Non-current financial assets |  |
Equity investments at amortized cost | 2,269,282 | 2,269,282
Equity investments at fair value through profit or loss | 1,656 | 1,656
Loan receivables at amortized cost | 518,397 | 432,445
Derivative financial instruments at fair value through profit or loss | 8,774 | 13,302
Derivative financial instruments qualified for hedge accounting | 3,913 | 4,681
Carrying value at end of the period | 2,802,022 | 2,721,366
Current financial assets |  |
Loan receivables at amortized cost | 133,012 | 187,931
Group pool accounts | 310,304 | 264,678
Trade receivables at amortized cost | 13,784 | 10,295
Derivative financial instruments at fair value through profit or loss | 53,487 | 61,558
Derivative financial instruments qualified for hedge accounting | 322 | —
Cash and cash equivalents at amortized cost | 242,303 | 179,509
Carrying value at end of the period | 753,212 | 703,971

EUR thousand 1 | 2024 | 2023
Non-current financial liabilities |  |
Loans from financial institutions at amortized cost | 1,070,604 | 1,240,044
Bonds at amortized cost 2 | 201,557 | —
Derivative financial instruments at fair value through profit or loss | 8,776 | 13,354
Derivative financial instruments qualified for hedge accounting | 5,823 | 4,850
Carrying value at end of the period | 1,286,761 | 1,258,248
Current financial liabilities |  |
Loans from financial institutions at amortized cost | 94,440 | 39,978
Interest-bearing liabilities at amortized cost | 14,484 | 73,793
Group pool accounts | 501,490 | 562,548
Trade payables at amortized cost | 75,354 | 6,741
Derivative financial instruments at fair value through profit or loss | 50,961 | 61,920
Derivative financial instruments qualified for hedge accounting | 640 | 194
Carrying value at end of the period | 737,368 | 745,174

1 Carrying values presented in the table approximate fair values.
2 The bonds have been measured at amortized cost, adjusted by the fair value to the extent that fair value hedge accounting is applied.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
12 | Statement of changes in equity

EUR thousand | 2024 | 2023
Share capital at beginning of the period | 140,000 | 140,000
Share capital at end of the period | 140,000 | 140,000
Reserve for invested unrestricted equity at beginning of the period | 484,128 | 481,121
Share-based payments | 2,865 | 3,007
Reserve for invested unrestricted equity at end of the period | 486,993 | 484,128
Hedge and other reserves at beginning of the period | -290 | 6,944
Change in hedge and other reserves | -2,379 | -7,234
Hedge and other reserves at end of the period | -2,670 | -290
Retained earnings at beginning of the period | 1,018,839 | 965,442
Dividends paid | -248,630 | -239,403
Purchase of treasury shares | -2,560 | -3,987
Retained earnings at end of the period | 767,650 | 722,052
Profit for the period | 332,896 | 296,788
Total equity at end of the period | 1,724,869 | 1,642,677

Statement of distri butable funds as at December 31:

EUR | 2024 | 2023
Reserve for invested unrestricted equity | 486,992,527.44 | 484,127,812.29
Hedge and other reserves | -2,669,760.31 | -290,496.00
Retained earnings | 767,650,126.06 | 722,051,520.42
Profit for the period | 332,895,633.84 | 296,787,891.20
Total distributable funds | 1,584,868,527.03 | 1,502,676,727.91

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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
13 | Non-current liabilities

EUR thousand | 2024 | 2023
Loans from financial institutions | 1,070,604 | 1,240,044
Bonds | 201,557 | —
Derivatives from Group companies | 2,333 | 7,003
Derivatives from others | 12,267 | 11,202
Other non-current liabilities | 214 | 214
Non-current liabilities total | 1,286,975 | 1,258,462

Maturities of financial liabilities as at December 31:

EUR thousand | 2025 | 2026 | 2027 | 2028 | 2029 and later
Loans from financial institutions | 94,440 | 48,901 | 348,901 | 376,679 | 296,123
Bonds | — | — | — | — | 200,000
Trade payables and other financial liabilities | 19,848 | — | — | — | —
Total | 114,288 | 48,901 | 348,901 | 376,679 | 496,123

EUR thousand | 2024 | 2025 | 2026 | 2027 | 2028 and later
Loans from financial institutions | 39,978 | 344,440 | 298,901 | 98,901 | 497,802
Trade payables and other financial liabilities | 80,534 | — | — | — | —
Total | 120,512 | 344,440 | 298,901 | 98,901 | 497,802

The information presented in the above maturity tables excludes the impact of derivatives.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
14 | Current liabilities

| As at December 31, 2024 | As at December 31, 2023
EUR thousand | To group companies | To others | Total | To group companies | To others | Total
Current portion of non-current loans | — | 94,440 | 94,440 | — | 39,978 | 39,978
Trade payables | 2,387 | 2,977 | 5,364 | 2,736 | 4,004 | 6,741
Accrued expenses and deferred income | 21,747 | 53,607 | 75,354 | 29,161 | 54,430 | 83,591
Other current interest-bearing debt | 14,484 | — | 14,484 | 29,574 | 44,219 | 73,793
Group pool accounts | 501,490 | — | 501,490 | 562,548 | — | 562,548
Other liabilities and provisions | — | 2,691 | 2,691 | — | 576 | 576
Current liabilities total | 540,108 | 153,715 | 693,823 | 624,020 | 143,206 | 767,227

Specification of accrued expenses and deferred income as at December 31:

EUR thousand | 2024 | 2023
Accrued expenses and deferred income to Group companies |  |
Accrued interest expenses | 421 | 1,192
Derivatives | 21,326 | 27,957
Other | — | 12
Total | 21,747 | 29,161
Accrued expenses and deferred income to others |  |
Accrued interest expenses | 16,777 | 14,064
Derivatives | 30,275 | 34,157
Accrued salaries, wages and social costs | 5,806 | 5,502
Other | 749 | 706
Total | 53,607 | 54,430

15 | Contingencies and commitments
Guarantees as at December 31:

EUR thousand | 2024 | 2023
Guarantees on behalf of Group companies | 1,099,819 | 1,124,131
Guarantees on own behalf | 211 | 216
Total | 1,100,030 | 1,124,347

Lease commitments as at December 31:

EUR thousand | 2024 | 2023
Payments in the following year | 916 | 833
Payments later | 2,457 | 1,533
Total | 3,373 | 2,366

185
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
LIST OF ACCOUNT BOOKS USED IN PARENT COMPANY
List of account books used in parent company

Voucher description | Voucher class | Voucher format
General journal and general ledger |  | In electronic format
Specifications of accounts receivable and payable |  | In electronic format
Fixed assets transactions | 756, 770, 774, 778, 782, 783, 786, 905, 906 | In electronic format
Bank transactions | 424–426, 500–692, 694, 699, 950, 960, 970 | In electronic format
Sales invoices | 300, 305, 310, 320, 330, 350, 400, 410, 491–499, 802, 815, 825–827, 834, 841, 930, 935, 940 | In electronic format
Purchase invoices | 100–101, 110–111, 115, 120, 130, 140, 150, 160, 190, 191, 290, 291–294, 297–299, 737, 801, 814, 824, 830, 832, 854, 855, 860, 861, 895, 910, 915 | In electronic format
Travel invoices | 755 | In electronic format
Salary transactions | 750 | In electronic format
Journal vouchers | 700, 710, 715, 720, 725, 730, 737, 740, 766–767, 793, 865, 881, 900, 975, 980, 985, 990 | In electronic format
Financial transactions | 760, 765, 768 | In electronic format
Opening balance | 791, 792 | In electronic format

186
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
SIGNATURES OF BOARD OF DIRECTORS’ REPORT AND FINANCIAL STATEMENTS
Signatures of Board of Directors’ Report,
including Sustainability Statement, and
Financial Statements

Statements by the Board of Directors and President and CEO
The financial statements prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union give a true and fair view of the assets, liabilities, financial position and profit or loss of Valmet Oyj and the undertakings included in the consolidation taken as a whole. The Board of Directors' Report includes a fair review of the development and performance of the business and the position of Valmet Oyj and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. The Sustainability Statement included in the Board of Directors' Report has been prepared in accordance with the reporting standards mentioned in chapter 7 in the Finnish Accounting Act and with Article 8 in the Taxonomy Regulation.
|  | Espoo, February 12, 2025 |  |
| Mikael Mäkinen |  | Jaakko Eskola |
| Chair of the Board |  | Vice Chair of the Board |
Anu Hämäläinen |  | Pekka Kemppainen |  | Per Lindberg
Member of the Board |  | Member of the Board |  | Member of the Board
Annareetta Lumme- Timonen |  | Monika Maurer |  | Annika Paasikivi
Member of the Board |  | Member of the Board |  | Member of the Board
|  | Thomas Hinnerskov |  |
|  | President and CEO |  |
| The Auditor’s Note |
| Our auditor’s report has been issued today. |
| Helsinki, February 12, 2025 |
| PricewaterhouseCoopers Oy |
| Authorised Public Accountant Firm |
|  | Pasi Karppinen |  |
| Authorised Public Accountant |

187
VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
AUDITOR’S REPORT
Auditor’s Report (Translation of the Finnish Original)
To the Annual General Meeting of Valmet Oyj
Report on the Audit of the
Financial Statements
Opinion
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.
Our opinion is consistent with the additional report to the Audit
Committee.
What we have audited
We have audited the financial statements of Valmet Oyj (business
identity code 2553019-8) for the year ended 31 December 2024. The
financial statements comprise:
• consolidated statement of financial position, statement of income,
statement of comprehensive income, statement of changes in
equity, statement of cash flows and notes, which include material
accounting policy information and other explanatory information
• the parent company’s statement of financial position, statement of
income, statement of cash flows and notes.
Basis for Opinion
We conducted our audit in accordance with good auditing practice
in Finland. Our responsibilities under good auditing practice are
further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that are
applicable in Finland and are relevant to our audit, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
To the best of our knowledge and belief, the non-audit services that
we have provided to the parent company and group companies are
in accordance with the applicable law and regulations in Finland and
we have not provided non-audit services that are prohibited under
Article 5(1) of Regulation (EU) No 537/2014. The non-audit services
that we have provided are disclosed in note 23 to the Financial
Statements.
Our Audit Approach
Overview

| • Overall group materiality: EUR 19 million, which represents approximately 5% of profit before tax • We conducted audit work in all major countries covering all key reporting units. The focus of our work was on the most significant reporting units in Finland, Sweden, USA, Brazil, China and Italy. • Accounting for long-term projects and long-term service contracts • Timing of revenue recognition for Services and Automation segment related contracts • Goodwill valuation

As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we considered where management made
subjective judgements; for example, in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain.
Materiality
The scope of our audit was influenced by our application of
materiality. An audit is designed to obtain reasonable assurance
whether the financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They
are considered material if individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements.
Based on our professional judgement, we determined certain
quantitative thresholds for materiality, including the overall group
materiality for the consolidated financial statements as set out in the
table below. These, together with qualitative considerations, helped
us to determine the scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate the effect of
misstatements on the financial statements as a whole.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
AUDITOR’S REPORT

Overall group materiality | EUR 19 million (previous year EUR 22.5 million)
How we determined it | Approximately 5% of profit before tax
Rationale for the materiality benchmark applied | Profit before tax is a generally accepted benchmark. We chose 5%, which is within the range of acceptable quantitative materiality thresholds in auditing standards.

How we tailored our group audit scope
We tailored the scope of our audit, taking into account the structure
of the group, the accounting processes and controls, and the
industry in which the group operates.
We conducted audit work in all key countries covering all key
reporting units. The group audit scope was focused on the most
significant reporting units in Finland, Sweden, USA, Brazil, China
and Italy, where we performed an audit of the complete financial
information due to their size and their risk characteristics.
Additionally, we performed audits of one or more financial
statement line items or specified audit procedures at other reporting
components based on our overall risk assessment and materiality.
We also carried out specific audit procedures over group functions
and areas of significant judgement, including taxation, goodwill and
material litigations. For the remaining reporting units, we
performed other procedures to confirm there were no significant
risks of material misstatement in the group financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in
the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate
opinion on these matters.
As in all of our audits, we also addressed the risk of management
override of internal controls, including among other matters
consideration of whether there was evidence of bias that represented
a risk of material misstatement due to fraud.
Key audit matter in the audit of the group
Accounting for long-term projects and long-term
service contracts
Refer to note 3 to the consolidated financial statements for the related
disclosures.
Over time revenue recognition for long-term projects and long-term
service contracts is significant to the financial statements based on
the quantitative materiality and the degree of management
judgment required to account for revenue recognition. The
complexity and judgments are mainly related to the estimation of
project cost, which serves as a basis for the determination of the
percentage of completion, which the group applies for recognizing
revenues and for the assessment of provisions for projects and
potential loss-making contracts.
The total amount of revenue and profit to be recognized under long-
term projects and long-term service contracts can be affected by
changes in conditions and circumstances over time, such as:
• modifications and scope changes to the original contract due to
changes in client specifications
• uncertainties and risks relating to assumptions utilized in the
estimation of project cost, components delays, overruns or other
circumstances that impacts the project cost of completion.
This matter is a significant risk of material misstatement referred to
in Article 10(2c) of Regulation (EU) No 537/2014.
How our audit addressed the key audit matter
Our procedures included understanding of the end-to-end revenue
recognition process relating to long-term projects and long-term
service contracts. We identified and tested certain key internal
controls and IT systems supporting revenue recognition and project
management and accounting.
We have met and discussed regularly with business line and
corporate management to identify new significant and high-risk
projects, existing projects with significant fluctuations in gross
margins, and potentially loss-making projects, including those with
ongoing disputes and litigations.
We have performed detailed procedures on individually significant
and high-risk projects. This includes assessing the reasonableness of
estimated project cost of completion by obtaining an understanding
of the cost model and key assumptions utilized in the estimates, and
challenging management’s judgments and estimates. In addition,
we have also inspected pricing and sales forecasts, and other relevant
supporting evidences utilized in the development of cost estimates
such as historical data, price quotations, and engineering
specifications.
In addition, we have discussed the progress of projects with business
line management and certain project management representatives.
Further, we have performed a lookback analysis by comparing actual
project outcomes to their related cost estimates to obtain perspective
on the accuracy of the estimation process.
With the outcome of those discussions and the results of our audit
procedures, we assessed management’s assumptions in the
determination of the project cost estimate.
Timing of revenue recognition for Services and
Automation segment related contracts
Refer to note 3 to the consolidated financial statements for the related
disclosures.
The company has several revenue streams relating to Services and
Automation segments contracts where revenue is recognised at a
point in time.
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VALMET | FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS 2024
AUDITOR’S REPORT
We focused on this area because the significant portion of the group
net sales arises from these contracts and there is a risk that revenue
is recognised in the incorrect period.
How our audit addressed the key audit matter
Our procedures included understanding of the end-to-e nd revenue
recognition process.
Through this, we have identified the appropriate period before and
after year-end wherein risk of misstatement is likely to arise, and
tested revenue transactions in these periods and inspected
supporting evidences including customer contracts and sales orders,
invoices, delivery and freight documents, and collection supports.
We have also tested credit notes issued subsequent to year-end to
identify potential indicators of premature revenue recognition in
relation to billing goods or services that do not meet the agreed
delivery terms.
Goodwill valuation
Refer to notes 4 and 20 to the consolidated financial statements for the
related disclosures.
At 31 December 2024 the group’s goodwill balance is valued at EUR
1,808 million which includes EUR 63 million goodwill from the
business combinations in 2024.
Under IFRS the company is required to annually test goodwill for
impairment. Goodwill valuation was important to our audit due to
the size of the goodwill balance and because the assessment of the
value in use of the group’s Cash Generating Units is complex,
involving judgement about the future results of the business by
estimating future EBITDAs and inflation rates and determining the
discount rate for the calculations. We focused on the risk that
goodwill may be overstated.
Based on the annual goodwill impairment test management
concluded that no goodwill impairment was needed.
How our audit addressed the key audit matter
For the business combinations, we assessed the methodology
adopted by management for calculating the purchase price, fair
values of the acquired assets and liabilities, and the resulting
goodwill. We also tested the key assumptions in the valuation
models.
We evaluated management’s future cash flow forecasts and the
process by which they were drawn up, including comparing them to
the latest Boar d a pproved budgets, and testing the underlying
calculations. We evaluated and challenged the company’s future
cash flow forecasts in a discussion with management of the business
involved, and the process by which they were drawn up, and tested
the underlying value in use calculations. We compared the current
year actual results to the figures for the financial year ended 2024
included in the prior year impairment models to consider whether
any forecasts included assumptions that have proven to be
optimistic.
We evaluated and challenged the discount rate used.
We assessed the sensitivity analysis that had been performed by
management around the key drivers of the cash flow forecasts,
which were:
• the projected EBITDAs
• the discount rates
to identify how much each of these key drivers needed to change,
either individually or collectively, before the goodwill was impaired.
We also evaluated the likelihood of such a movement in those key
assumptions that would require for goodwill to be impaired.
We assessed the adequacy of the disclosures in note 4, by checking
that they were compliant with IFRS Accounting Standards and that
their presentation was consistent with our understanding of the key
issues and sensitivities in the valuation.
We have no key audit matters to report with respect to our audit of
the parent company financial statements.
There are no significant risks of material misstatement referred to in
Article 10(2c) of Regulation (EU) No 537/2014 with respect to the
parent company financial statements.
Responsibilities of the Board of
Directors and the Managing Director for
the Financial Statements
The Board of Directors and the Managing Director are responsible
for the preparation of consolidated financial statements that give a
true and fair view in accordance with IFRS Accounting Standards as
adopted by the EU, and of financial statements that give a true and
fair view in accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply with
statutory requirements. The Board of Directors and the Managing
Director are also responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Board of Directors and the
Managing Director are responsible for assessing the parent
company’s and the group’s ability to continue as a going concern,
disclosing, as applicable, matters relating to going concern and using
the going concern basis of accounting. The financial statements are
prepared using the going concern basis of accounting unless there is
an intention to liquidate the parent company or the group or to
cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
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includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with good auditing practice will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the parent company’s or the group’s
internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of the Board of Directors’ and
the Managing Director’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that
may cast significant doubt on the parent company’s or the group’s
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future
events or conditions may cause the parent company or the group
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and
events so that the financial statements give a true and fair view.
• Plan and perform the group audit to obtain sufficient appropriate
audit evidence regarding the financial information of the entities
or business units within the group as a basis for forming an
opinion on the group financial statements. We are responsible for
the direction, supervision and review of the audit work performed
for purposes of the group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Reporting Requirements
Appointment
We were first appointed as auditors by the annual general meeting
on 26 March 2014. Our appointment represents a total period of
uninterrupted engagement of 11 years.
Other Information
The Board of Directors and the Managing Director are responsible
for the other information. The other information comprises the
report of the Board of Directors and the information included in the
Financial Statements and Report of the Board of Directors 2024
report, but does not include the financial statements or our auditor’s
report thereon.
Our opinion on the financial statements does not cover the other
information.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. With respect to the report of the Board of Directors, our
responsibility also includes considering whether the report of the
Board of Directors has been prepared in compliance with the
applicable provisions, excluding the sustainability report
information on which there are provisions in Chapter 7 of the
Accounting Act and in the sustainability reporting standards.
In our opinion, the information in the report of the Board of
Directors is consistent with the information in the financial
statements and the report of the Board of Directors has been
prepared in compliance with the applicable provisions. Our opinion
does not cover the sustainability report information on which there
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are provisions in Chapter 7 of the Accounting Act and in the
sustainability reporting standards.
If, based on the work we have performed, we conclude that there is a
material misstatement of the other information, we are required to
report that fact. We have nothing to report in this regard.
Helsinki 12 February 2025
PricewaterhouseCoopers Oy
Authorised Public Accountants
Pasi Karppinen
Authorised Public Accountant (KHT)
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INDEPENDENT AUDITOR'S REASONABLE ASSURANCE REPORT ON VALMET OYJ'S ESEF FINANCIAL STATEMENTS
Independent Auditor’s Reasonable Assurance Report
on Valmet Oyj’s ESEF Financial Statements
(Translation of the Finnish Original)
To the Management of Valmet Oyj
We have been engaged by the Management of Valmet Oyj (business
identity code 2553019-8) (hereinafter also “the Company”) to
perform a reasonable assurance engagement on the Company’s
consolidated IFRS financial statements for the financial year 1
January - 31 December 2024 in European Single Electronic Format
(“ESEF financial statements”).
Management’s Responsibility for the ESEF
Financial Statements
The Management of Valmet Oyj is responsible for preparing the
ESEF financial statements so that they comply with the
requirements as specified in the Commission Delegated Regulation
(EU) 2019/815 of 17 December 2018 (“ESEF requirements”). This
responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation of ESEF financial
statements that are free from material noncompliance with the ESEF
requirements, whether due to fraud or error.
Our Independence and Quality Management
We have complied with the independence and other ethical
requirements of the International Code of Ethics for Professional
Accountants (including International Independence Standards)
issued by the International Ethics Standards Board for Accountants
(IESBA Code), which is founded on fundamental principles of
integrity, objectivity, professional competence and due care,
confidentiality and professional behaviour.
Our firm applies International Standard on Quality Management 1,
which requires the firm to design, implement and operate a system
of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Our Responsibility
Our responsibility is to express an opinion on the ESEF financial
statements based on the procedures we have performed and the
evidence we have obtained.
We conducted our reasonable assurance engagement in accordance
with the International Standard on Assurance Engagements (ISAE)
3000 (Revised) Assurance Engagements Other than Audits or
Reviews of Historical Financial Information. That standard requires
that we plan and perform this engagement to obtain reasonable
assurance about whether the ESEF financial statements are free from
material noncompliance with the ESEF requirements.
A reasonable assurance engagement in accordance with ISAE 3000
(Revised) involves performing procedures to obtain evidence about
the ESEF financial statements compliance with the ESEF
requirements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material
noncompliance of the ESEF financial statements with the ESEF
requirements, whether due to fraud or error. In making those risk
assessments, we considered internal control relevant to the
Company’s preparation of the ESEF financial statements.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Opinion
In our opinion, Valmet Oyj’s ESEF financial statements for the
financial year ended 31 December 2024 comply, in all material
respects, with the minimum requirements as set out in the ESEF
requirements.
Our reasonable assurance report has been prepared in accordance
with the terms of our engagement. We do not accept, or assume
responsibility to anyone else, except for Valmet Oyj for our work,
for this report, or for the opinion that we have formed.
Helsinki 12 February 2025
PricewaterhouseCoopers Oy
Authorised Public Accountants
Pasi Karppinen
Authorised Public Accountant (KHT)
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INDEPENDENT AUDITOR'S REASONABLE ASSURANCE REPORT ON VALMET OYJ'S ESEF FINANCIAL STATEMENTS
Assurance report on the Sustainability report (Translation of the
Finnish Original)
To the Annual General Meeting of
Valmet Oyj
We have performed a limited assurance engagement on the group
sustainability report of Valmet Oyj (business identity code
(2553019-8) that is referred to in Chapter 7 of the Accounting Act
and that is included in the report of the Board of Directors for the
reporting period 1.1.–31.12.2024.
Opinion
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
1) the requirements laid down in Chapter 7 of the Accounting Act
and the sustainability reporting standards (ESRS);
2) the requirements laid down in Article 8 of the Regulation (EU)
2020/852 of the European Parliament and of the Council on the
establishment of a framework to facilitate sustainable investment,
and amending Regulation (EU) 2019/2088 (EU Taxonomy).
Point 1 above also contains the process in which Valmet Oyj has
identified the information for reporting in accordance with the
sustainability reporting standards (double materiality assessment).
Our opinion does not cover the tagging of the group sustainability
report in accordance with Chapter 7, Section 22, of the Accounting
Act, because sustainability reporting companies have not had the
possibility to comply with that requirement in the absence of the
ESEF regulation or other European Union legislation.
Basis for Opinion
We performed the assurance of the group sustainability report as a
limited assurance engagement in compliance with good assurance
practice in Finland and with the International Standard on
Assurance Engagements (ISAE) 3000 (Revised) Assurance
Engagements Other than Audits or Reviews of Historical Financial
Information.
Our responsibilities under this standard are further described in the
Responsibilities of the Authorised Group Sustainability Auditor
section of our report.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Authorised Group Sustainability Auditor's
Independence and Quality Management
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that are
applicable in Finland and are relevant to our engagement, and we
have fulfilled our other ethical responsibilities in accordance with
these requirements.
Our firm applies International Standard on Quality Management
ISQM 1, which requires the firm to design, implement and operate a
system of quality management including policies or procedures
regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.
Responsibilities of the Board of Directors and
the Managing Director
The Board of Directors and the Managing Director of Valmet Oyj
are responsible for:
• the group sustainability report and for its preparation and
presentation in accordance with the provisions of Chapter 7 of the
Accounting Act, including the process that has been defined in
the sustainability reporting standards and in which the
information for reporting in accordance with the sustainability
reporting standards has been identified
• the compliance of the group sustainability report with the
requirements laid down in Article 8 of the Regulation (EU)
2020/852 of the European Parliament and of the Council on the
establishment of a framework to facilitate sustainable investment,
and amending Regulation (EU) 2019/2088;
• such internal control as the Board of Directors and the Managing
Director determines is necessary to enable the preparation of a
group sustainability report that is free from material
misstatement, whether due to fraud or error.
Inherent Limitations in the Preparation of
a Sustainability Report
In reporting forward-looking information in accordance with ESRS,
management of the Company is required to prepare the forward-
looking information on the basis of assumptions that have been
disclosed in the sustainability report about events that may occur in
the future and possible future actions by the Group. Actual
outcomes are likely to be different since anticipated events
frequently do not occur as expected.
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INDEPENDENT AUDITOR'S REASONABLE ASSURANCE REPORT ON VALMET OYJ'S ESEF FINANCIAL STATEMENTS
Responsibilities of the Authorised Group
Sustainability Auditor
Our responsibility is to perform an assurance engagement to obtain
limited assurance about whether the group sustainability report is
free from material misstatement, whether due to fraud or error, and
to issue a limited assurance report that includes our opinion.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be
expected to influence the decisions of users taken on the basis of the
group sustainability report.
Compliance with the International Standard on Assurance
Engagements (ISAE) 3000 (Revised) requires that we exercise
professional judgment and maintain professional skepticism
throughout the engagement. We also:
• Identify and assess the risks of material misstatement of the group
sustainability report, whether due to fraud or error, and obtain an
understanding of internal control relevant to the engagement in
order to design assurance procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the parent company’s or the group’s
internal control.
• Design and perform assurance procedures responsive to those
risks to obtain evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
Description of the Procedures That Have Been
Performed
The procedures performed in a limited assurance engagement vary
in nature and timing from, and are less in extent than for, a
reasonable assurance engagement. The nature, timing and extent of
assurance procedures selected depend on professional judgment,
including the assessment of risks of material misstatement, whether
due to fraud or error. Consequently, the level of assurance obtained
in a limited assurance engagement is substantially lower than the
assurance that would have been obtained had a reasonable assurance
engagement been performed.
Our procedures included for example the following:
• We interviewed the company's management and the individuals
responsible for collecting and reporting the information
contained in the group sustainability report at the group level and
in subsidiaries to gain an understanding of the sustainability
reporting process and the related internal controls and
information systems.
• We familiarised ourselves with the background documentation
and records prepared by the company where applicable, and
assessed whether they support the information contained in the
group sustainability report.
• We performed site visits at the company’s sites in Karlstad,
Sweden and Tampere, Finland.
• We assessed the company's double materiality assessment process
in relation to the requirements of the ESRS standards, as well as
whether the information provided about the assessment process
complies with the ESRS standards.
• We assessed whether the sustainability information contained in
the group sustainability report complies with the ESRS standards.
• Regarding the EU taxonomy information, we gained an
understanding of the process by which the company has identified
the group's taxonomy-eligible and taxonomy-aligned economic
activities, and we assessed the compliance of the information
provided with the regulations.
Helsinki 12 February 2025
PricewaterhouseCoopers Oy
Authorised Sustainability Auditors
Pasi Karppinen
Authorised Sustainability Auditor