Valmet Oyj (VALMT) Earnings Call Transcript & Summary

Welcome to Tampere, Home of Valmet's Automation, and welcome also to Valmet's Capital Markets Day 2025. The main themes of today's presentations will, of course, touch upon Valmet's new strategy that was published yesterday and also the new financial targets published yesterday. We will have key management of Valmet presenting here today and also they are available for Q&A sessions. After their presentations, we will take questions, of course, here in the live audience. Excellent to see such a big crowd here. And then also from the digital platform, so the webcast viewers, please be active also and post the questions through the digital platforms. After the presentations, there will be a dedicated breakout session where you can get to know the people here on site at Tampere get to know a little bit more about Valmet's Automation Solutions offering. But with that, I hand over to Thomas.

Also a very warm welcome from me. I'm very happy that you have taken the time to actually spend your afternoon with us here in Tampere. And I know my team and I, we've been very excited of actually sharing some of the thoughts that we've had, and we've spent a lot of time in the last couple of months and really sort of the insight into that. So really hope we'll have a great discussions and great afternoon together. I started middle of August last year. The first 6 months, I really traveled extensively throughout the Valmet world to one end of the what of the world to another end, really to visit as many sites and as many Valmet employees and as many customers as possible really to sort of to get the feeling of the business, get the feeling of the culture, get the feeling of what Valmet is really all about. And I want to share one story for some of those travels. End of last year, we're meeting a very large and important customer of ours. And me and the CEO were having sort of a casual conversation over coffee before sort of the actual or was it after the actual meeting. And then he said to me, "You know what, Thomas, one thing you should know is you guys actually come across as 2." You saw the equipment capital part of Valmet and then sort of there is the service part of Valmet." Okay. Tell me more. It really is a little bit of an issue because you should know when we make our CapEx or investment decisions, we don't think of it as a project or this is it. We think about this is you're in our core business. This is a manufacturing equipment for us. This is our core business that I'm investing in and that need to deliver an outcome over the next 25, 30 years, right? So your service performance, your ability to make sure that, that equipment runs in an optimal way, giving the optimal output actually impacts our decision, our buying decision upfront, right? Later on, several other customers that I've met really have sort of confirmed that thinking, which is, of course, when you think about it, quite obvious, but that's also what you're going to hear today that full life cycle thinking about we're in the core business of our customers. We deliver -- our equipment delivers an outcome from them that they're actually eventually going to sell to their customers, right? So that you're going to hear a lot about today. So you might have noticed, we're really raising the bar in terms of our ambition, right? We want to deliver 5% organic growth. We want to deliver 15% comparable EBITDA margin. We want to deliver then 5% plus 15% equals 20% comparable ROCE. And we're very confident that we're going to do that. And there's basically 3 things that makes us confident about that. First, we're launching the new strategy, lead the way, more focused, more bold, more executable than before. We are base hitting on strong fundamentals. You're going to see some of that fundamentals today when you're here in Tampere. And we're basing it also being supported by a new operating model that we've already are implementing as we speak. We launched that or we announced that back in the end of March this year and will go-live 1st of July. Let's first look at the strategy and the strategic direction that we are traveling in. So Lead the Way, what is it all about? We are going to transform industries towards a more regenerative tomorrow. That's our purpose. That's why we exist as a company, that's why we get up in the morning as Valmet employees, that's why we are excited, that's why we are engaged. This is why we are here. You can then ask what do you really mean with regenerative? For us, it's quite simple. It basically means reuse raw material and use less raw material. We live in a world where raw materials are scarce, so we really need to reuse them, we really need to use less of them. That's why we're going to deliver that purpose with 2 missions: one for our Biomaterial Solutions and Services, which is about reuse, so advance circularity. The other one is Process Performance Solutions, which is about unlocking resource efficiency, so use less. Simo and Emilia are going to talk about the Process Performance Solutions; and Petri and Sami are going to talk more about our Biomaterial business. Some of the fundamentals in these 2 different parts of our business, these 2 missions are actually a bit the same. This life cycle that I talked about, that we need to take good care of our customers all the way through, right? We are in their core business. We are the reason why they produce and sell. If we can do it more, help them be more effective, they can have a better business, right? That's why this life cycle is so important across right? We also, when it comes to our Process Performance Solution, we might not be the actual manufacturing equipment that they get an outcome, but we are part of it, and we are, for sure, mission-critical, right? That's also why if we can help our customers solve problems in a better, more effective way than anyone else, we have an advantage. So this innovation using technology to solve customers' problems is really important. That's why also why in the future we're going to try to do more co-creation together with customers. We're already doing it, to a large extent today, but we want to do more together, partner with our customers figuring out what is really that would add the most value to you that we can help you solve. Then we have an opportunity in the biomaterial and Aki is going to talk more about that, which is really about driving cost competitiveness, consolidating our whole footprint, using our scale to a larger extent and be more cost competitive, which, of course, also can expand the margin. We've done that consolidation already in our Process Performance Solutions. They are together as one, and they are actually driving that in a similar way as we want to do on the biomaterial. However, then with -- and you're going to see more of that today. This thing if you really want to optimize the resource use, you really want to sort of be resource efficient, you need to use technology. That's also why we took you here today because here, we're actually doing that, and we need to do more of that, have more innovations around that, that is going to drive the future. So that's where we're going. This is the strategic direction. Let's just talk briefly about where are we starting from? We have a 225 years of amazing Finnish industrial legacy. We've basically done everything you can possibly think of or come across of with steel, right? We've done ships, we've done metro cars, we've done elevators. There was an [indiscernible] elevator in this town, I know from not that long ago. We've done all sorts of things, right? And it's pretty amazing. And we've always, during those 225 years, been able to stay relevant to our customers in the market, right? You don't have a successful business for that long if you are not really on your toes, right? That's also why we're confident that we can continue doing that. The business we have today, we are still technology leader in it. We are still one of #2 or #1 in it. So we've got a good platform that we're starting from. It's also clear that our performance from our financial perspective have plateaued the last couple of years, and we're not happy with that. So the question, of course, is can we do better than what we've done in the last couple of years? And the answer is, absolutely. There's no doubt that we can do better. Now let's talk a little bit about how we're going to do that. So we have this starting point. We have a world-leading technology. We've got a big installed base. We're out with the customers. We need to help them. We've got an opportunity to help them to be more successful in their markets, right? We've got great people with a lot of capabilities. When I've traveled around the world meeting all these developments, having all these town halls, all these meetings, these fireside chats, et cetera, I have to say that I've been impressed with the functional expertise, the passion for it, and I'm sure if we redirect that a little bit more, we can really get a lot out of it. So standing on that, we're going to pull 3 levers to really up our game: more focused, more bold strategy, that's what we're here to hear more about today; renewed operating model, we launched it in March, we're implementing as we speak, it goes live 1st of July; and then we're going to evolve our culture a bit to be bolder and more fast in the execution, and we'll talk more about that as well. So let's look at these 3 individually and go a little bit more into the depth of this. So the strategy, customer success, right? We have technology. We are greater technology and the purpose of that is to drive or help the customer be successful, right? Solve their problems with technology. That's what it's all about. And we need to do it over the life cycle. That's why we say life cycle commitment and then comes the global competitiveness. You need to be competitive from a global perspective. We need to utilize our global footprint. We need to utilize our scale in a better and more effective way than we've ever done before, and that's what we're going to do when we consolidate all that manufacturing supply chain parts into our global supply when it comes to the biomaterial. Aki will talk more about that today. Really exciting what we think we sort of the opportunity that lies there. And then accountability. Someone has talked about in the lunch, we live in a very dynamic world, right? The only way to really run a business in an effective way in such a dynamic world is to solve the problems, the challenges, the issues, whatever comes up, close to where they are, right? There, you have the context, you have the knowledge to solve them, let's solve them there. That's why we need this operating model to get role clarity so that we can fully empower and saying, you figure it out, right? And you're fully accountable for the outcome of it, and that's why our accountability becomes such a big thing for us. Then you can really act in the most dynamic world. Things can happen. But when we have capable engaged team who are willing to take that accountability and that empowerment and run with it, then you solve problems. And that's also how we get the clock speed up in an organization that is so big, so diverse, so distributed as ours. Let's talk a little bit more about that operating model as well, right? So we've got 1 purpose, transform industries to a more regenerative tomorrow. That will be delivered by 2 focused missions. One for biomaterial, which is about advancing circularity; one for process performance solutions which is about unlocking resource efficiency. That will be delivered by 5 strong business areas. With some additional investment into customer proximity when it comes to Latin America and China. We'll have great cost competitiveness with our global supply, where we really will utilize our size and our strength and our footprint around the world. And then finally, we're taking that overlaps out of our global functions and really making them true global and integrated so that they can support the business as best as possible with the right data, the right information, the right people, the right capabilities, the right talent management, et cetera. One reflection maybe as well in the latest travels that I made the late after we announced new operating model end of March. I've done some town halls some very large, important sites just to sort of, first of all, being transparent, tell people about what we really are trying to achieve, create more clarity around the change and also just get the feeling of how do people really feel about this. Because, of course, when you say that you're going to take out 1,000 people, it does sort of creates some touch and emotions within the employees that we have, right, clear enough. One of the thing I really was actually very positively surprised about and I understand as a CEO, you don't get all the truth, right? You do get a bit of a tented picture, but still a lot of people on these town halls really came up to me and say, "Finally, Thomas, someone is taking this, it has been so complex. We have too many people that I need to align with. So it's taking me too long to really act, right?" And especially the service people have come up with that, right? Which is even more concerning because we are going to double the service growth going forward. That's our target. We're not happy with the market share development in our service. We want to drive it further. We're going to make 3 strategic shifts. First one is this one team that takes care of the customer, making sure we convert from the equipment sales to the service sales to the modernization or whatever comes in the future so that we help the customer in an optimal state all the time with their manufacturing equipment in their core business. We're going to stay close to our customers with end-to-end accountability, fewer people to align with, fewer people to ask, let's just go and do it. You know the business, you know how to what to do, you're fully empowered to do it, let's solve the problems for the customer. And then with these 5 business areas, we're taking a more customer segmented approach. So you really need to start to understand to a larger or we are able to understand the customers' real true pain points in this segment and help solve and develop together with them maybe digital solutions that unlock value for them so they can be more successful in their markets, right? And that's why we believe that we can deliver those double the organic growth than what we've seen so far. If you really think about -- let's talk about the mindset, the essence of a lot of this and a lot of these discussions that we've had so far, the essence really is about 6 strategic mind shift that we're going to do, we're going to make in the organization. One is, I talked about this, passion for technology. We love technology. I mean there's nothing more cool than technology. And if you go here, if you could go a little bit behind the scenes, you would feel that it's just like, wow, right? And Thomas, I need to show you this way. So they really have this, which is amazing, right, which is -- but I have to give it to the fins, right? They are just amazing engineers. They just really love their technology, they created it. We just need to sort of think about the purpose of having great technologies to solve real difficult customer problems, right? Because then you can commercialize and you help your customer, you sell it. And that's why we go from this sort of technology-first to customer success-first, right? We still are passionate and should be passionate about technology. And then it's about back to the CEO, I met there, where we talked about that I met and saying, you are 2, you're separate, your projects, your service. We need to have one Valmet. We need to have one -- the customer need to think of us as a key partner no matter where they are in that chain of life cycle ring. Matrix and complex, that's what we are addressing with the new operating model. We're taking complexity out for the sake of the organization, too many people to align with when you're 3 in a box, it just becomes a very difficult and very challenging, right? That's why we need to simplify. We need to go this fully empowered, fully accountable, capable person who just solves the problem where the problem is. That's also some of our employee engagement survey shows that we really have an opportunity there to simplify our internal processes, simplify how we work together and just speed up. Continuous improvement to bold multiyear targets. There might be a question later on also on R&D and investment and so on. And it's much easier when you have a multiyear target than if you think sort of 12 months at a time, right? Because 12 months at a time, it's hard to make really bold move that moves the needle and saying, okay, I might not get the return this year, but I for sure, will it next year or the year after, right? And it's the right thing to do. Then you might ask, "But continuous improvement, Thomas, isn't that a great thing, isn't that a wonderful thing, isn't that something that a lot of companies talk about?" It's an amazing thing. It's so powerful, right, super powerful. It's in our DNA. It's something we do every day, day in and day out, everybody should think about how do I improve the role or the function, what I do? How can I take waste out of that, right? But it's not strategic. It's not the choices, the big strategic needle-moving things that, wow, right? It's just something that's in our DNA and blood that we do day in and day out. That's also why we're going from this must-win balance with a 100-plus initiative on a global scale to much more target saying these 20 initiatives they are going to deliver big time. They are strategic. All the other stuff is just operational, right? So we're going to focus it down to stop doing certain things because then you really get traction on the things you really know, they are strategic. And it's actually great to see that. During the strategy process, we've run some different work streams, we've had CEO challenged sessions. And you can sort of see the movement from the first time we had it to the last time we had it, right? So the first time we came up much more with this continuous mindset improvement, lots of things, small impact, right, great stuff, yes, go and do it, but let's not have it as a strategic things. Think about things that really are making the difference for Valmet in your area of responsibility, right? So it's good to see that we are already on this mindset journey of changing the culture, setting the bar higher for ourselves and being willing to also communicate it externally to say, we will, right? And then last thing, some of you we've talked about it before, we need -- I mean accounting focus is great. We need to grow the EBITA, no doubt about it. But we also need to think about what's the return on capital employed. That's why we are putting more financial performance metrics into how we do our performance management within the company. So ROCE, for example, Katri will talk about this. That's the reason why it's also up in the targets, right? I need to be able to go to the organization and say, "Great, super good idea. How is that going to help us on our 5, 15, 20, right?" And then they say, "But you need to choose 1 choice." No, I want them all, right? So this thing is that sort of -- that's a really good way. So that's why we're going to lead the way, we're going to take -- we'll be more ambitious than anyone else in the industry. We're going to really take charge over our own destiny. We're basing it on strong fundamentals. We're standing on solid ground, great technology, technology leader in all our or most of our areas of expertise. We're going to support that with a new operating model, clear roles, full empowerment, full accountability for what you do and it's going to be delivered by passionate, engaged, capable and empowered team, what we call Valmeteers. And with that, we will get to 5, 15, 20. And you're going to hear much more about that. Thank you very much.

Thank you, Thomas. And now it's time to go to the Q&A session, and please raise your hand and indicate if you have a question and we will then deliver the microphones. We start here with Antti Kansanen.

Antti Kansanen, SEB. Two questions from me. First, Thomas, on the ambition to get higher growth on services. And I fully understand the cultural change, and it appears that when you're selling new equipment, you want to get the aftermarket guys more involved. But if you look at your installed base currently, where I would assume your clients face mainly your aftermarket guys anyways, what kind of a potential do you see kind of tapping into the existing installed base? Do you need more resources? Do you need to invest more in local presence in certain areas? How do you look upon that?

Good question, Antti. I think we need to think about it in 2 ways. One is there's a very large installed base, absolutely right. There's also a very large aging installed base, so there's also a modernization part to that, right? So that's also where then historically, capital have been come more into play and it's a bit more 2 teams again. And that's where one of the unlocks actually so that we get more both conversion from new, but also new modernization and therefore, conversion from that, right? And then it is really about this thing about speeding things up, both in terms of the development of service, let's just call it, stuff here, but solutions that can actually help the customer even more, so that will speed up also with this simple organization and the go-to-market will be simpler.

And the investments do you think you need to kind of strengthen your local presence on any certain areas to kind of gain that market share growth on services?

It depends a bit on where you're, what you're talking -- if you're talking Biomaterial, talking Process Performance Solutions, right? So Biomaterial, I generally think we cover the market. Process Performance Solutions they would actually need to invest into certain pockets of capturing growth there, where we think we've got a good opportunity.

Okay. And then the second question was on the complexity. And are you kind of -- I understand the organizational complexity, and you've been talking about that for some time already. But if you look upon your offering, do you have too many technologies, too many products? You've gone through in the past 10 months kind of what you have in your hand after making a lot of acquisitions in the past 10 years. How do you look at the portfolio that you have? Are we going to see divestments?

It's always -- it's a good question. It's always -- as business leaders, you always need to think about complexity and because like we talked about as well, the growth creates complexity, create complex -- or growth -- from the top. Growth creates complexity, complexity kills growth, right? So of course, all the time you need to think about have you got complexity in your organization. We're clearly taking that out now. Then, of course, there can be in a step we're saying, have we complexity in our offering. I think it's hard to say that there's no slam dunks in that regard, right? We've done a few smaller things very much under the radar, I would say, just recently.

All right. Then there was a question Panu Laitinmäki here then.

It's Panu Laitinmäki from Danske Bank. I have 1 question on capital allocation. So those were organic targets, but how do you see potential for M&A and also for example, for share buybacks going forward?

Maybe let's take that under Katri's point, so that we're not getting ahead of the curve now in the whole presentation, but good question.

Okay.

Then question here in the in the middle. Sindre Sørbye from Arctic Asset Management. I was a little surprised that you did not mention something specific about R&D at all? Should we expect more targeted R&D nominal increase in R&D or more focused? Do you have any -- of course, you have any ideas, but can you disclose them?

I think it's important to think about R&D. Let's think about the shifts we are making. I think that's an easier way to talk about it. And that's sort of the real question is when we internally as well. So then the focus in terms of R&D, what do we focus on back to are we solving a big problem for our customers or is it just core technology, right? And that's also where we will have more if we see opportunities, there could be more this co-creation opportunities where we really together with this customer, solve their problems and sort of invest R&D money into that, right? Third part, obviously, in terms of the change in mindset on the R&D is that we go from this more annual planning cycle to a multiyear strategy, where then it is actually easier to say we're going to invest in this part, it will pay off in 2 years when it comes to R&D, right? So we'll have certain things. You can say our mindset changes to be more focused customers' problem, co-creation, but also being able to make longer-term investments, right? You're going to see one where we've actually made a very long-term investment. So if you think about DNAe, that's been a very long journey in terms of actually investing into that over the years to get to where we are. And last week, we even launched the DNAe for the Marine business as well, so... But maybe just to be another just a further clarification for you. I don't -- I clearly see R&D investment or spend, let's call it that, as a way to generate future income and return, right, not a cost. And that's why we need to sort of look at it. But we need to, of course, have a focus on it, but also being able to kill projects, they said, okay, this is actually going into a dead end. Let's not throw good money after it anymore. So we need to have a good thorough process when we actually look at the milestones in our whole R&D system, if you like.

I was a bit surprised that you don't have a separate margin target for services and given your background that you have run the service businesses so well. And of course, I mean, you have a target for the whole business segment. And in a way, it's included. But where you see the service margin in 5 years?

I think if you do that, I know you've done the math, Timo, I'm sure you've done the math. So you can probably -- there's probably an indirect service margin there as well because otherwise, the math just doesn't stack up, right? So, but I think...

It means that the business line will be at that 40%...

But if you think about it, I think the important thing is also this thing about someone will probably have the question why are we not showing the service margins as well, right? It really boils down to that operating model wise, we have to look at it from a customer perspective outside in saying they are looking at the life cycle. Of course, then we also have to look at it as from a life cycle perspective, right? So that's one. That's why we are also not -- that's why we are showing the bottom line for the whole life cycle, not for individual parts of it. So that's one. That's actually also what we've done in the Process Performance Solutions business in Automation and Flow Control. We've shown the whole thing, right? We've shown the life cycle margin, and that's the same approach that we're taking now.

All right. Let's take also from the digital platforms question, so this is coming from Sven Weier. So there's an 8% target to grow in the biomaterials services. How does the kind of bridge work to go into group growth of 5%?

Yes, that's a good question, a good question, Sven and thanks, nice that you're joining. I'm sure you're watching as we speak. There's, of course, a couple of things to that. We do see the growth over the cycle, but we are also saying CAGR as well. I think it's also another thing that we much rather internally rely on service growth that we are sort of the installed base is there. So let's actually take that share that we should have when we look at our installed base market share as well, right? And that's something that you can much more drive, whereas the overall growth will be impacted by cyclicality in the business and, therefore, for -- and can be actually quite sort of binary from 1 year to the other because of large projects as well. And I guess, I assume he's looking -- thinking about the biomaterial business, not the overall or does that say...

Yes, the overall group 5% target.

Yes.

Then another one here on the online platform is about customer relationships. So how will you as a new CEO ensure that Valmet has strong customer relationships?

Yes. Of course, as CEO, you are sort of the -- you're also a very high key account manager at the end of the day. I've been visiting a lot of customers throughout these first 10 months, continue doing that. I'm actually having a customer meeting next week, quite far away from here. Like I talked about talked with a lot of different customers. And it is, of course, important that I have the relationship on the right level with these customers, and that's also what is happening, and I really enjoy doing it. So it's a fun thing as well.

Good. Do we still have questions here on the live audience? There seems to be here by Antti.

Yes. I'll ask a follow-up. I mean, on the life cycle approach and not really looking at aftermarket or OE margin separately, do you think it will approach -- change your approach on pricing on the OE side? Do you think growth and expanding our installed base becomes even more critical for you? Or do you think you will be more conscious on the margins that you are booking on the OE side, even if it's not separately reported?

I think we've become more strategic about it in the overall because it is about driving the overall margin up. It's also why we're also boiling down on sort of the cost competitiveness is, of course, also that improvement in cost competitiveness is not going to go to us all of it. It will also have to throw some of that into actually winning market share in that. So we need to think it sort of overall strategically and be cognizant also about the individual projects as well. So where do you -- where is the price point for this project in the margin -- or in the market for this kind of solution in this part of the world, and then be cognizant about do we want to bid for it or would we rather avoid it, right? Or. But of course, overall, pricing is also a topic, right?

You're not going to subsidize loss making [indiscernible].

We'll try not to. I think the real answer is Antti, I think the purpose of reporting it as 1 is actually that's how we should manage it. And that is how we are managing it and we'll be managing from 1st of July, right? So that's the real answer, right? That's not about going into a lot of negative margin projects to then later on, recoup from that, right?

Thank you, Thomas. Thank you for the good questions. And we now move on to the Biomaterials Solutions and Services part. Thank you.

Good afternoon from my behalf as well. We need some extra support for the next topic as we have something more new and important to tell about. The new things will be anyways delivered with a lot of expertise. We have together, with Petri and Aki over, 80 years of Valmet experience. So whatever news will be delivered, it's anyway is coming with the expertise. We will be now talking about the Biomaterials Solutions and Services business segment. And we will be talking a lot about the life cycle, installed base, technology and co-creation and co-innovation with our customers. And we are then happy to receive your questions and comments, particularly on those service parts and the targets related to growing the services. That's essentially what we are now going to be talking about. Biomaterials Solutions and Services business segment. So having 3 business area organizations with full life cycle accountability being the pulp, energy and circularity, packaging and paper and our tissue business areas. All together, the segment is about EUR 4 billion business segment delivering 10.5% of EBITA margin. As you can see, already 50% is basically services. And we have been growing. The growth across the past 10 years have been approximately 3%. And targets are to grow that. And we're going to be looking at these growth elements, what the position in the market is, what we are going to be doing with our installed base, with our technologies and how we will be then innovating with our customers. And most -- maybe most importantly, looking at how we are driving the cost competitiveness, basically then boosting and serving us to win the market share and be more competitive. So strategic priorities. As Thomas already mentioned, we aim to grow our services by more than double of our track record, being the 8% target. And we are in the past and in the mission to grow our profitability to be 14% of EBITA margin. We are doing that with a new operating model, which is supporting the life cycle approach tying in the services offering to what we do in capital projects and then working with the life cycle towards our customers' benefit and also organizing our troops in a way of fast possible -- fastest possible service level to the customers. We are driving the cost competitiveness and innovating together with our customers. Then let's look at the starting points where we are in terms of different parts of the market, being pulp and energy and circularity, packaging and paper and the tissue. Pulp, energy and circularity as one of the business segments, we are either 1 or 2 in our markets. In packaging and paper and also in tissue, Petri has a pretty good starting point of being the #1 in the technology segment throughout the world. So in fact, those of you who are not influencers and having the phones in your hands are probably holding our booklets. There is a 50% chance that the booklet is being manufactured on Valmet's made technology. Actually, Petri and the team has been secured that it is actually made on Valmet technology. And in the services, we are the #1 or #2 depending on the market segment. And we do consider these to be good market segments in which we are co-innovating with our customers and developing the technology forward. But there still is room to grow both in the technology parts and in the services. And then as I already said, that it's a good market to be in, that we believe in, and we can even still serve our customers better. The -- how the market then is developing? Let's look at the market space. Over here, the global pulp market -- pulp market is growing about 2% in annual terms. The growth is coming and driven by the growth in hygienic products, mainly tissue and then also packaging. Then the global board demand also is growing. However, there is currently market areas where particularly -- which are particularly suffering from the overcapacity, but also this market space will be gradually filled up with the demand increase. And whether they are efficiency-related improvements or new capacity that is being built, our customers need our support in both of that. And then including the services, the demand growth is providing and driving the further growth on the service demand. And then tissue, where our market position is already very strong from the manufacturing to the converting line down to the customer-backed role of the issue. Growth is strong and driven by the standard of living increases in urbanization as well. So we are in good markets with strong positions. And our market position has already shown, is good, but we see a lot of potential still through the integrated life cycle offering and focus to grow further. And then we're going to be looking further about the life cycle. What do we mean by that and what the targets are, Petri, you are on.

Thanks, Sami. Yes, the life cycle, like Thomas started, it's extremely important. It's important for our customers, simply because they are making sizable investments in our equipment, and they want to make sure that it's not just started up, but it's ramped up to full capacity as efficiently as fast as possible. And so that the asset continues to remain current and at high capacity also for the years and decades to come. It's very important -- actually, it's one of the main value drivers why the customers are actually buying the capital technology from us. It's very important for us. It's one of the main areas in our path towards the Biomaterial service growth of 8% and the comparable EBITA margin of 14%. So it's important, clearly. For this life cycle services, by definition, it is the entire life cycle of the customer value creation. So from the initial capital sales quotation to the start-up to the actual end life of the equipment. So it is long. And actually, I'm going to talk a little bit more on -- of the initial phase of our life cycle potential and Sami is going to continue on the installed base opportunities. But this life cycle thing concept, it's not the new thing. Valmet has been talking about it also in the past. So what's actually changing? That's a good question. To put it short, we have identified additional growth areas, and we are changing our operational model to grasp it, and that's it. So with our new operational model, we are actually increasing the focus on services. In the new business areas, we have the capital process equipment and the services organized next to each other, very close to each other. So that will amplify the service focus on the initial capital delivery phase. And indeed, we have identified great potential there. Our best projects deliver twice the service value than the average ones. So there's opportunities there. We're going to grasp it. Another benefit -- clear benefit is that we are more flexibly able to cross utilize our resources. No matter for R&D or product management or delivery operations. Also, in the new operational model, the business areas are organized by the customer industries. And that brings a significant value for us so that the customer is the same for everybody in the organization, and that's very valuable and important. We are better able to focus on the customer industry-specific value creation and delivery and the service and support needs, they vary between the customer industry. So we will have a better focus on that. And we will also be better able to utilize our existing customer or segment-specific offering. So those will be improved. So we have a great market position, we have the widest offering in the market, we are operating in the demand growth areas, we have identified growth opportunities and we are changing our operational model to grasp it. That's great. What about the customer? What do the customers think about our value creation from a life cycle perspective? Let's hear it. So yes, Francisco Razzolini and Mr. Cardoso from Klabin. [Presentation]

So they were clearly quite content about the additional value Valmet has brought over the life cycle. But Klabin is about board making, Klabin is about pulp making. What about tissue then? Didn't Valmet acquire additional technology with tissue converting added to the portfolio? Yes, we did 1.5 years ago. And now the tissue converting has been fully integrated into our portfolio. And we have a full middle scale end-to-end portfolio available for our customers from stock preparation to the tissue machine, tissue making to the tissue converting and its packaging. And that's unique in the market, nobody else has it, which is great from a capital business perspective. As the customers have, we are very positive and happy how the customers even positively surprised how well they have understood the synergy of the full mill scale project from 1 supplier. But it's also benefiting the life cycle support and approach, and it has a big impact to that. With the mill scale possibilities that we have and the understanding, we are able to better support the customer already from the planning phase. So when they are planning the investment regarding the layouts, the calculations for the capacities, et cetera. So we have now that capability. Of course, we are able to also develop their products if they require the maintenance establishment, et cetera. So that's a great way to start the relationship for a new project, especially with the new customer. For the tissue machine, we already have a good support concepts where the startups, the important ramp-ups are done as fast as possible, we've reached 20% faster ramp-up up compared to some of the competitors and the speed level with our machines are the highest in the world. The biggest probably new thing is on the converting side. So especially after last year's acquisition of the FactoryPal, which is an artificial intelligence-based copilot for the operator's help, it will actually assist the operator to run the machines more efficiently. And I think the results have been quite remarkable. So 3% to 8% overall equipment efficiency improvements and the customers have been very happy. That's unique. But maybe the most unique is the possibility for us now to combine the full mill level efficiency. So now that we have the full technology offering. And as we know, traditionally, the tissue mills have been run like 2 islands. So the paper machine is one island and they're converting another one and they are not really connected. One produces the best stuff for the other and possibly can. But with our full technology approach, we are actually able to utilize the data from the paper machine for the benefit of the converting efficiency. So that's really new and unique. In fact, if we look at our key capabilities in the tissue making, and compared to really, there's no comparison in the market with our competition, especially if you look at the service offering and the digital solutions area. So that's, I think, a great opportunity. That is one part of our journey going towards 8% service growth, 14% EBITA. But Sami, what about the installed base opportunities?

Yes. Not only that the booklets in your hands at the 50% probability are manufactured, sorry, with our equipment, our installed base is truly providing us a unique opportunity of increasing and improving our services, sales and services collaboration with the customers. Now then how to unlock these opportunities and potential further for going to 4% services growth to 8%? So we are seeing this installed base of being the #1 driver over there. However, it has been enabled with the new operating model of unifying the troops addressing the customer industry segments. Then further utilizing the data that we have of our installed base. And as you know, we have made in Tampere automation systems with most of our installed base, which is now producing at our customer base. So we have a rather unique opportunity of also providing the customers, the insight of the condition of their goods and the installed base that we have. And then, of course, we have been looking at our offering, we have been looking at our markets. Compared that with the market share of the others, we have been identifying the growth pockets. With targeted investments, we are able to address, for example, spare parts, consumables and then certain market areas, which we are not yet fully tapping the potential provided already with the existing installed base, but then taking the full life cycle offering and delivering that in the upcoming and new delivery projects then to the customers in the form of agreements, spare parts, consumables and the shutdown services going forward. Then our targets. Ultimately, 8% services growth, but the real long time -- long-term target towards 2030 is to own 25% of the market we are presently serving. And take that 21%, which is already after a good growth in the past 10 years, we have been growing our services to be EUR 2 billion as it is presently. Taking that then into the new level and new market share level as well, and increasing that by being better serving our customers faster in terms of speed to react, utilizing the installed base data, utilizing digital tools, for example, e-commerce better on. And then those growth pockets that have been identified. So there is a plan. And the plan is heavily also based on further improving our cost competitiveness. And it is the base on which we have now decided to implement this global supply organization and Aki will then be telling more about the cost competitiveness and how our global supply organization will be driving that forward.

Thank you, Sami. I started our China operations roughly 14 years ago. Now I'm taking to the global level. Like Thomas said, it's a big change for Valmet. What does this global supply mean in Valmet context? So It signals a step change in our ambition for cost competitiveness. For Biomaterial Solutions and Services, we deliver direct procurement, most production activities, logistics and warehousing. And for Valmet, we deliver indirect procurement, health, safety, environment, quality management and facilities access. So what is the potential upside if we and when we succeed in this initiative? It will be EUR 100 million by 2030. And it comes through cost competitive sourcing. We have plenty of opportunity to increase cost competitiveness through sourcing in outside Nordics. We can further consolidate our supply base and get volume benefits, and we can also optimize our production footprint over 37 production facilities. So what will change? Today, we are organized around business lines. Each business line having their own supply organization and own manufacturing facilities. And that has led to, a certain degree, fragmented supply base and also partly suboptimized production footprint. So therefore, when we move now into the single centrally managed global supply organization, it will enable us to, first, consolidate our global volumes and seek benefits through the volumes, but also through selecting our partners globally. Then it also enables us to share production assets. Then we can optimize the loading and the footprint and the needs for different kind of capability around the globe. And by having central teams, we have naturally much stronger category teams, much stronger competence pools to execute needed actions. And we have heard already today that we have a very volatile world. So this kind of central capability it is very necessary to react fast on changing environment. And of course, this centralized organization will give us faster decision-making and execution. We have roughly 4,500 employees working in global supply and like I said, 37 facilities in 9 countries. What are the benefits? So we will, like I said, target step improvement in our competitiveness. And it comes through cost competitiveness and resiliency. And we drive it, like I said, through cost-competitive country sourcing, we have a potential to improve that significantly. We can consolidate our supply base and get this global volume benefits. And we will also, for the resiliency, implement minimum dual-sourcing strategy. So we have resiliency when the types of global trade will change. So we have seen in the past 5 years that, that is really necessary. Then also through this global organization, we can optimize our production footprint. We have 5 different kind of businesses that we serve. But still, we have capability to optimize inside those businesses. And we have also a very clear plan how we optimize our inventories and how we improve our logistic efficiency. And through the central capability, we have actually then faster capability to move and develop our capability for instance, in India for delivering cost-competitive supplies. And I think that it's very relevant also to think about how we protect our intellectual property rights when you go to cost competitive countries because the protection is not necessarily so good. So then you have to have a strategy how you manage it in company's benefit. So we are after this EUR 100 million benefits. But I think cost competitiveness alone is not going to be enough. We want to be the technology leader. Right, Petri?

Absolutely. As we know, another big value driver for our customers to buy not just our capital equipment but also the service products such as consumables, spare parts, et cetera, is price to performance. And global supply certainly will support with that equation, but so will our innovation and R&D. So obviously, we will be doing the R&D with our customers, to our customers to address their problems often doing more with less raw materials, et cetera, improving the efficiency and production capacity and output all that, but also reducing the cost. That's a part of our R&D. So we are actually doing cost competitiveness work there as well. So that's a big part of our DNA. That's what we are known for, and we will nurture that in our work and doing also in the future. There are also additional opportunities, addressing bigger problems, not maybe tackling our target market, but more adjacent new growth opportunities and heavily related to the circularity. And I'll give you a couple of examples. The other one aimed to reduce the use of plastics and the other one is targeting to handle the actual plastic waste problem. So I'll start from molded fiber, which is actually a very interesting segment. It's the fastest-growing packaging segment at the moment in absolute terms. It's -- of course, the main target for us is to address the food serving market, replacing plastic there. Our concept is with our technology, high capacity, less resources, operators with high automation good quality and thus good cost competitiveness for the end product. And we are doing that work at the moment with Metsä. And we have a demo plant in Äänekoski and Metsä has announced already the feasibility study for the first mill scale investment. The market segment in general going further in the future, of course, looks very good. And we have the full possibility for the fully circular approach as well. So recycled fiber can be used in the process. Sami, what about the plastic waste?

Yes, thanks, Petri. So Petri is working and we are working to gets rid of the plastic in as many value streams as possible. So removing and replacing with regenerative alternatives. For example, the molded fiber. Then we have been developing, and as already stated in the previous CMD as well on the Pyrolyzer technology adjacent to our fluidized bed technology. We then spoke of biomass to bio oil and biomass to chemicals. But we have been further developing the pyrolysis technology actually here in Tampere, in our research center and have now been developing the pyrolysis to be the platform for providing a scale-efficient alternative for recycling the plastic waste. One of the most significant problems in the current society is to recycle plastic waste efficiently. One alternative naturally is to incinerate that as waste-to-energy, where we have solutions as well. But providing this circular economy directed alternative. This is now going forward. We are ready with the commercial scale pilots and trials with our partner and are working next to provide the solution then for the mixed plastic waste; waste, which we think that will be significant opportunity. So we are working to develop the technology. And it's always good that we are addressing the technology questions. And here, it's not only our ROCE, but really focusing on the technologies, which are then helping us to proceed with the ROCE and the relevant KPIs as well. Working with customers. That continues to be very essential for us going forward with the technology development and co-innovating and really solving those problems, focusing on our pilot facilities, which continue to be unique in the scale that we are having to demonstrate the applications, building the concepts together with the clients and helping us to remain in the technology leadership position. Since that is vital like going to be one of the core of the elements of the competitiveness. So we are aiming to double the services growth and reached a comparable EBITA of 14% by 2030. And the elements over there, utilizing better the unique installed base we are having, utilizing the growth -- organic growth opportunities in the services and investing in those pockets as well that have been identified to increase that market share. And importantly, driving costs out of the entire life cycle chain and maintaining the technology leadership position. So with that, thank you. We are ready for the Q&A.

Fantastic. Thank you, guys, and let's go to Q&A. We have about 10 minutes reserved for it. First here from the front, Mikael.

Yes. Mikael Doepel with Nordea. Still on the organic growth target in service of 8%. So you're talking about tapping into the own installed base. You're talking about market share gains. But what are the underlying market growth that you're expecting for the years and you also target to do bolt-on acquisitions, which you have done in the past?

Looking at each other. Thank you for the question. 8% comes naturally with the organic growth, which is then the partly also related to the pricing. And the elements of growing the services are, as said, better tapping into the entire life cycle and into customer's life cycle and the entire use phase of the technologies from the design to the services phase. And with that, come services, come spare parts, consumables and so on. We intend to use better the existing installed base and the data we have in there to get better solutions in a faster time. And utilizing the potential, which clearly is there with our rather unique position related to the installed base.

So the underlying growth 2%, then the inflation impact to that and the rest of roughly with our targeted actions to boost the growth buckets.

Okay. And then just a second one. In terms of your installed base, how much of that do you cover today with your own service offering. So out of the total mills you have out there, how much do you cover? And where could that go in the next 5 to 10 years?

On the Board side, or roughly 40% of the installed base is Valmet legacy based. So that's roughly the installed base in the world. Thus Sami referred to, it's almost 50-50 chance. But anyway, you go, you get the Valmet machine produced paper. Whereas our market share on the services is half of that or a little bit more than half. So that's the -- those are the dimensions.

But do you see that you could actually bring that gap to zero?

Zero is -- our target now is to increase that to 25% overall market share. But of course, we will continue towards the zero gap, that's the ultimate goal I suppose in a little bit more longer term.

All right here. We have 2 questions here. Let's take first Panu from the...

It's Panu Laitinmäki, Danske Bank. I have 2 questions on the EUR 100 million cost savings. So firstly, on the timing. So how do you expect them to kind of come through? Is it like you will get some easy gains quite soon or is it like more back-end loaded or EUR 20 million in 5 years?

Like we stated, we have a target to achieve them by 2030. And it's true that there are items that are faster to execute and then there are items that take more time. And I would say, in general, that I see that procurement-related actions are typically more faster to execute. Then what comes to actions, for instance, optimizing our production footprint. It typically requires more effort, possibly some investments or other development type of activities. So therefore, they normally take more time than a quarter or 2, they tend to take some years to grow up some capability. So that's why we need both and they will impact. But I think that probably in the beginning, more procurement heavy. And then later on, we will get also more benefits out of this other actions.

Okay. And the second question was on how do you think this will roughly be split into procurement and production in 37 units? Do you expect that to be a much lower number by 2030?

Well, first of all, I would like to remind that we have been doing actions throughout the years. So if you look at our past, we have been constantly working with our footprint. So we have been investing -- and then we have been also reducing the capacity. And as an example, today, we are investing in India to grow our facility there. And of course, once we optimize the kind of the capability and the need together with the businesses, then there might be some decisions regarding some units, but those decisions we will make by financial means of financial criteria, and they come one by one. So we have not pre-decided anything for instance now. We have a plan how we develop that footprint.

And then here in the front, in the middle, sorry, Antti. .

Antti Kansanen, SEB. Just a question on the reorganization that you're doing right now. I mean Valmet has historically always targeted higher growth on the services than on the OE side, but you've been a little bit siloed into OE people differently and aftermarket people on the other side. So there must be a reason for it. I just wanted to understand is that the industry standard, how your clients are set up? I mean are you talking with the same people when you are quoting for an equipment delivery versus when you are agreeing on the aftermarket? And is this some kind of a different way to operate and let's say, the industry standard on pulp and paper has been?

Very good question, Antti. We have been, of course, looking at how customers are buying, how customers are doing business and how essentially customers are also valuing and comparing the vendors. Very often, the judgment is based on total cost of ownership and the full life cycle of the cost, at least 10-plus years. And then, of course, based on that, we've been already looking to ways to further collaborate. And we've been doing that in the previous organizational set up, but we do see potential of further aligning the troops working throughout this life cycle targets of the customer and truly also optimizing the customers' life cycle costs and in fact, the value that they get. And very often, this life cycle value is the main driver. CapEx is one component in that and then the overall equipment efficiency and the output and the quality and the safety and all the other aspects are then following. So maybe not in this industry yet, but we intend to be the one who is taking the benefit of that first. .

Okay. And then the second question was on the production footprint. And I mean -- do you think is there any way to kind of get more flexibility and shared resources? I mean you have a different business cycles, sometimes paper is doing fine, pulp not. Is there any way to share resources between the business units more going forward?

Yes. If I little bit elaborate more, so we have different kind of products that we manufacture for businesses. So we have this pulp and paper related production, which is very much a similar type of capabilities, structure, machining, a lot of engineering, et cetera. Then we will have tissue converting type of production, which is more mechanical assembly, electromechanical structures, et cetera, then we will have this pressure parts for boilers which is more like welded tube structures. Then we have this consumables manufacturing, which is different kind of consumables for paper and pulp industry. . So amongst those similar type of capabilities we can optimize and there we can find synergies. And of course, some common development themes. But of course, when you have for instance fabrics, which is totally different kind of product, it's very difficult to fight synergies with the pulp and paper equipment. So within those boundaries, you can optimize.

Thank you for the good questions. And as a reminder, there will be a joint Q&A session also towards the end. But now it's time to take a break. So we'll go into a break for 20 minutes, and stay tuned, we'll continue in 20 minutes. [Break]

Let's now start to continue on the agenda. And next up is the Process Performance Solutions, so I invite Emilia and Simo here at the stage.

So good afternoon, ladies and gentlemen, and warm welcome to Tampere. I'm so happy you are all here in the home of automation. I'm here today with my colleague, Simo, to tell you all about the Process Performance Solutions great growth segment, which is all about unlocking resource efficiency for our customers with our intelligent solutions. This is the former Valmet's Automation segment, and this name is more describing our mission, as Thomas was describing towards our customers. But let's take a look at how we have earned our right to grow and how we plan to accelerate the growth further. So this segment is formed of 2 business areas, Automation Solutions and Flow Control. And during the past years, we have grown to be EUR 1.5 billion business almost with a reasonably good profitability, a bit less than 18% in the last 12 months. We have been growing organically 6% in market that has been growing 2% to 3%, inorganically 8%. We have been very systematically focusing on developing our offering and technology. Latest releases we have done with our technology investments in DCS market, distributed control systems, with Valmet DNAe, which is the most modern web-based technology there is in the world. Before that, we have announced this mill-wide optimization to the world for pulp mills first. And with this, of course, offering has been expanded also with acquisitions. For that -- those have been very strategically carefully thought. So they are either expanding our technology or our geographical exposure to customers in different areas as well as getting domain expertise in different customer segments. And Flowrox has been that for Flow Control in -- especially in mining. And for Automation Solutions, it has been Siemens Gas Chromatography last year. And this is, of course, exposing us more to chemical, refining and industrial gases. But those are definitely not the only reasons for our growth. Let's take a look at our fundamentals in our growth. There's basically 3 factors: our unique leadership position in pulp and paper is a great base to grow. Development environment for most demanding process technologies in automation wide. So those are excellent basis, but we have very diversified and attractive portfolio for a wide range of industries and really strong positions in those as well. And last, but definitely most importantly, all our solutions are mission-critical to our customers, which creates very attractive business mix and sustainability advantage to our businesses. Before going to these last 2, let's talk about -- a little bit about pulp and paper and excellent position in that. We have the broadest offering in automation and flow control in the segment. On the left-hand side, you can see an integrated pulp mill and how our segments offering is truly integrated in all the areas. We are measuring, we are analyzing. We are actually controlling with the all the process. That all data is coming into the DCS control system, which is actually controlling everything in the plant. And with our latest releases, we have integrated also this AI-based mill-wide optimization tools so that customers can truly optimize their full production, open their bottlenecks in production, but also get to their sustainability targets. And with this kind of offering, also combined to our biomaterials services, we are truly a companion for our customers to really get good success throughout the life cycle with the equipment they have purchased. Let's go secondly to diversified industries. And Simo, you can continue further. .

Yes. Thank you, Emilia. So of course, pulp and paper is very important for us, and we are pretty unique in that. But if you look at our position, it's only about 40% of our story, actually touch less than that. The strategy of this segment and both of the businesses is really to provide efficiency and reliability across process industries. Already in Automation Solutions, you can see that half of the business, almost half of the business is coming outside of pulp and paper, for example, energy and marine being areas of particular strength. In Flow Control, we have defined 4 core industries, 4 global growing core industries that we focus on. And for example, if you look at the Refining & Chemicals, and Renewable Energy & Gases, they together are over half of Flow Control business. Pulp & Paper is a bit over 1/4 and then our newest core industry, Metals & Mining, touch less than 10%. And then, of course, we have then a long tail of other industries where our products are -- or we are selling our product to customers like food and bev and even pharmaceuticals. Let's talk a bit about our markets that we serve. I think the first thing to note is that we are actually quite happy about the markets that we have decided to focus on and also very happy and proud about the positions that we have created in them. The market potential is about EUR 16 billion for Automation Solutions and EUR 15 billion-or-so for Flow Control. So you can note that we are not really -- our growth is not really constrained about the market shares or the size of the market. Despite being very large markets, we have a very strong position in these core markets. You can see that -- I mean, in Pulp & Paper, of course, no doubt, we are the leader. But like I mentioned, in the cruise ship automation systems, we are the market leader. And another area where our systems are very well positioned and leading in the market is in bioenergy-type of solutions. But important to note that in addition to that, there's a long list of industries where our DNA has strong references. And then interestingly, when you look at the where the acquisition of the gas chromatography business takes us, it creates us a leadership position in that product area in refining and chemicals and industrial gas markets. In Flow Control, we are a top 10 player in our core industries. We are 5 to 7 in refining and chemicals, where we have been working for decades to establish this position. Industrial Gas, we are #1 or #2 and then also Metals & Mining with the support of Flowrox acquisition, but not only that, it has actually put us on the radar in the mining, and we are able to combine our also the Neles offering there to have a really broader offering for our customers. When we talk about the growth opportunities in these industries, I want to make 3 points here. First, the beauty of having strong positions in multiple industries is giving us a diversified platform of growth opportunities, different cycles for different industries, slightly different drivers even, and we are in a good position to capture them. Secondly, in all of these areas, the demand for the end product or energy is growing, and hence, the production volumes. And then thirdly, all of the customers here are working hard in making their processes more sustainable, more safe. They're launching new products. And that, of course, means that they need to touch the processes, they need to touch the controls, valves. And for a player like us that really works over the life cycle, these 3 dynamics and our position gives us very good growth opportunities in all of these industries. Mission criticality has been mentioned. So let's talk a little bit about that, what that really means. And let me take the example of valves. Valves are not the biggest part of the investment. Maybe in a big process facility 2% or even less. But of course, they can be critical in controlling the flows and ensuring the process safety and efficiency. And of course, the same applies for control systems. So customers don't want to take risks here. They want to work, play -- they want to trust their processes, the mission-critical parts to somebody that they can trust. Successful players here have very strong technologies, a lot of references and capabilities to work over the life cycle close to the customer service capabilities. And nowadays, of course, we are seeing more and more talk about digitalization capabilities. All of these assets are -- take time and effort to build and maintain. But when you have them, it creates you license to play and it creates you sustainable advantage. For example, in Flow Control, we are well known and respected for the quality of our products and the knowledge of our people about the applications and the processes and the support they can provide over the life cycle for our customers. We have, of course, long list of references, customer approvals, industry approvals in these industries, which gives us the license to play. And then I will actually talk in a while more about our service capabilities which I feel, and I see, is really something that gives us a differentiating edge in this industry.

Good. For mission criticality in automation solutions is something that is really in the core. So basically, the ECS system is the heart of every process. So nothing works without the controlling system actually telling that something has to move, some valve or something else has to happen. So it has to be reliable, it has to be available every time. And of course, there is a lot of other things in addition that our customers are requiring from operating systems today. Many of the operating and other operating systems are based on '90s, beginning of 2000's technologies. And we felt that it is extremely important that we support our customers with not only reliable technology, which is mandatory anyways, but also putting the persons in the center so that we are supporting our customers, for example, with their resource efficiency, helping customers to operate these systems so that they actually understand what is critical and where they have to focus on and how they will proceed further. In addition to that, we can build different kind of optimizations with the addition to with our, for example, analyzers and measurements, we can guide our customers to really understand what they need to do with their processes. And that is the value-adding that also Thomas was talking about earlier. So it is really, really important for our customers and that is the technology we are investing in. But this availability, these references, these are extremely important when we are talking about whether it's an energy plant, whether it's wastewater treatment or whether it is pulp mill, but whether it is actually a cruise ship with 5,000 people in the middle of Caribbean. Nothing can fail. Everything has to work. And with this kind of references, we have extremely good position globally to expand to whatever industries we are dealing with. In Finland, we have a huge variety of almost all the industries where we are serving, globally also from India to Europe to South America. And that's why actually we have to have excellent project offices nearby the customers because these are big projects done with EPCs or with the final customers and we have to have excellent resources technically to support those lifetime. Also, what we are investing in our technology development is always this backwards compatibility. You don't have to invest into totally new system, but you can actually upgrade it very gradually and take all the advantages of new technologies, bit by bit, whatever is benefiting your process controls, for example. So that is actually very -- also making this very sticky business with our customers as well. But let's go next to a little bit more into this technology, which you will both from our greatest, our most modern in the world, the only web-based fully cyber-secured, which is built-in cybersecurity and certified DCS system in the world, you will hear more in the breakout session and how we are actually integrating different kind of applications, even the mill-wide production optimization, which is also in the other breakout session later on. This is a really unique way to actually operate and also combine data from outside resources, for example, to optimize, let's say, hydrogen plant based on electricity prices. All of these things can be done in this one system, which is guiding our customers to operate most efficiently. And for that, we have already presence in 37 countries for a wide range of industries specialists. And that is fairly good coverage already, but Simo has a bit more still. .

Yes. Over that time, we built a pretty wide coverage of our service capabilities close to customers. We cover 40 countries, not all of them ourselves, but with our partners, you may have remember earlier, we talked about also working with distributor partners. But anyways, the service experience is there, this lifetime support is there. The interesting thing is that how do we kind of -- or the investment in the digital capabilities. And I'll take the example of the installed base data. We have systematically, over the years, recorded where our valves are being installed and gathered that data. We know over 50% of the current active valves where they are, what are they doing. And now -- so what does that mean for customers? Let's take the example that when a customer is planning a shutdown, which is a huge project, and there are many valves and a lot of valves in the plant. Some are critical, some are even more critical, some are moving a lot of times, somebody -- some of them may not be moving that often, but they really need to move when they need to move. So how do the customers really figure out where to focus? And this is where it comes that we have the data about their valves. We have the expertise being decades in this industry. We have the closeness. So we work close with them to really help them choose where to put the efforts to ensure efficiency, reliability of the processes. And I think that adds a lot of value. One -- I mean, there are many things that we talked about, the mission criticality. But of course, one of the important outcomes is that is what you can see here in our business mix. About 2/3 of the segment revenues is related to services or more broadly speaking, kind of OpEx spending. So it may be services, it maybe upgrades or et cetera. Already also in Automation Solutions, that's about half of the business is coming from installed base and in Flow Control, the number is actually even larger. 2/3 of Flow Control business is spare parts, field services, upgrades, et cetera. And then we have an additionally a little bit less than 20% of business selling valve automation components, which is also mainly OpEx-driven. So of course, among other things, this mix of business gives us good solid growth opportunities like we talked about earlier. Now which leads me to talk a bit about the way forward. So I hope we kind of established that we have a pretty good track record of growth, profitable growth, value-adding growth. We have position -- leading positions in a number of industries. We have the technologies, the service capabilities, the expertise to be the trusted reliability provider in mission-critical solutions. So I think we have a mandate to grow, and our target is to accelerate the growth and beat the market growth by -- or be over 2x the market growth, which we estimate that it's going to be somewhere around 3%. These businesses that we have, have also a pretty good operating leverage. So volumes normally improve margins. So our target is that, of course, with the growth and the -- our strategic competitive actions, we will hit the 20% EBITA target by 2030. Emilia, would you open a little bit about Automation Solutions plans?

Sure. Thank you, Simo. So accelerating organic growth over double the market is really focusing on accelerating the growth in Energy, Process & Marine. We have currently a better offering stack than ever into this market. We have the new released Valmet DNAe, which is very suitable for small processes, but also extremely large ones. As you know, that it was sold also to Arauco Mill. So definitely, that's one of the advances, then we have also acquired new analyzer business, which is opening very much doors for us combining also this DCS technology, but also with this analyzer technology, our optimization capabilities, what we have built in other industries, energy as well as then in pulp and paper are really helping us to really grow in that area as well. There, we are, of course, looking for example, especially chemicals and other segments in Marine, for example, to state a couple of those. Of course, hydrogen is in generally very active as well. But we are also investing into expanding our offering via partner network, especially to broader geographies as well as 2 subsegments where our domain expertise is not yet that strong. In Pulp & Paper, we extend to be #1 with all the product areas. And of course, with this kind of digital enablement to unlock the process bottlenecks as well as improving the efficiencies in both maintenance and operations are really critical for us. And there, with this kind of superior technology offering, we also see -- and we have already seen in those growth numbers, a really good growth in the competitor replacements. Last, but definitely not least, Services as such are very strong growth factors. As you can see from the first slides, we have been very heavily growing during the past years, and our installed base has been growing. Our new technology, also with this value-adding AI-based solutions, are really driving also the Services growth, while we are together all the time with all our customers really looking as a road mapping, how they get most out of the new technology out. So those are the means to accelerate the growth in Automation Solutions. Please tell more about Flow Control?

Sure. The target, of course, is the same: Accelerated growth, achieve 2x market growth at least. Portfolio is something where we can work on. I mean the 4 core industries we talked about, we have opportunities organically, but also maybe with acquisitions grown our portfolio, provide more or bigger solution scopes. But it's not only about the products and technologies here. It's also looking at the business mix portfolio. And for example, we are at the moment investing in capabilities to add larger valve automation solution opportunities in our components business, building capabilities to broaden the business portfolio. Services continues to be a theme. I talked about the understanding of the installed base and the value that we can provide to customers with that. It also works for us. We have pretty good understanding of where the installed base is and where we are kind of serving our customers excellently and where we could do even better. So we can do targeted growth, smart growth on services, accelerate that growth. We go to market directly, selling direct to customers with distribution and with the EPCs. And this is the way that we will continue to do, and we will strengthen our channel capabilities, generally speaking, our capabilities close to customers to provide the expertise and work with them over the life cycle. And finally, we will, of course, work with our supply chains, our manufacturing fleet, looking at ways to improve competitiveness, but also ensure resilience in different scenarios. Another theme there, which is important, is to be close to customers. For example, we made an investment some years ago, and we have a facility in Saudi Arabia, which gives us a very strong position to grow in that very interesting Middle Eastern market. There are other places we can look at like South America, et cetera, where we want to improve these capabilities. We're coming to the end of the presentation. So I just want to summarize that what we've been talking about: Strong track record of profitable growth, attractive leadership positions in a number of process industries, capability -- hard to develop capabilities to play in the mission-critical segment and attractive business mix is the basis that we will continue to grow, and we target to accelerate that, making sure we grow twice the market and reach 20% EBITA by 2030. Thank you.

Thank you, Simo and Emilia. Let's go to the Q&A. We have 10 minutes reserved for the Q&A session. So we'll start again here from the live audience, so raise your hand if you want to ask a question. And while waiting for the questions here, let's take from the digital platforms. Firstly, about the launch of Valmet DNAe, the next-generation industrial automation system, how does Valmet plan to leverage this innovation to drive growth across its segments?

Good question. Thank you, Pekka. And of course, as I was mentioning, this is a totally new technology in the market and already within several industries, we have a lot of deliveries ongoing already. And also the interest is really there and really what we are seeing is that this is one of the drivers across the customer segments we are serving because this really has all the facilities that we can provide to actually help all our customers to work with their processes or energy production or ships. And of course, we are leveraging this with targeting that 20% EBITA with the market double -- over double the market growth.

Thank you. Let's take a question here from the audience. Antti, please? .

Thank you. This is a question on Automation Systems and the industries excluding Pulp & Paper and Marine, the ones that are sort of like a niche positions. So I think previous CMD a couple of years ago, you identified a couple of different target industries that you want to grow into. So how has that progressed? And could you highlight any kind of customer wins, new exciting reference cases or certain industries that you see the most potential from here onwards?

Yes. Thank you. Very good question. Of course, with the chemical industries, we were highlighting at that time as well. We have acquired batch technology, which was the earlier acquisition as well. And together with them, we have significant, of course, further with that installed base worked on and also working on getting that technology inside our technology. And of course, with this customer references, we have always to agree what we are telling, but we are having good traction on that side as well. Then, of course, with alternative fuels, we have been working on those ones that have been proceeding quite nicely. And of course, with the -- I think we were discussing also a little bit more about Marine at that time and now as Thomas was mentioning, we just released this Valmet DNAe to further growth in Marine also now looking outside the cruise.

Then the second question is on, how do you collaborate with the Pulp & Paper side of things? Do you share any R&D resources? Are you totally independent?

So of course, we collaborate quite a lot because they also have a significant process knowledge and domain expertise, but we have our own R&D resources. And of course, the cooperation is with this certain projects together what we do, but we have own resources.

All right, some other questions here in the middle.

Yes. Mikael Doepel, Nordea. So in the Automation Solutions, you talk about accelerating growth and you talk about the Energy, Process and Marine as one. And then you mentioned expanding the partner network. Just wondering if you could elaborate a bit on that? What kind of a partner networks do you have? How do you work with partners? And the second question is also on the point of aligning capabilities with customer needs. So if you can elaborate a bit on that as well?

Thank you for good question. We do have technological partnerships with technology providers, which is not Valmet technologies, that's what one part. And we look into working with also expanding that a bit more. But then it's also about the partners for certain areas where, for example, we have let's say, in India, we have had a long-term partner in energy, where we actually have supplied quite a lot of energy production for example, optimizations lately through our partner who are very -- who are in the core of energy production business in India. So this type of things we have and of course, where we want to grow is also to expand in -- for example, in, let's say, for example, South America, Middle East working together with similar kind of partners as well. And then the other question was regarding -- just can you...

Yes. No, just you mentioned aligning capabilities with customer needs. What does that mean in practice?

Technology for example, that our customers are really -- in all of our customer industries, they are having difficulties to find, for example, capable new operators. And for what we do in our technology, we build on kind of guiding capabilities so that customer, new operators can really concentrate on the right things, do the right choices in order to either increase the production or keep it as high as it can mathematically be or then it, for example, highlights that, that now you need to take concentration on this one. And if you, for example, combine different processes into one person's control, you can actually, with this new design, have only 1 person to control several different operations. And that's one example of how to support our customers to operate.

Then here a question from Timo?

Yes. What is the typical order size in Marine?

Very good question. And there are, of course, very different sizes of orders...

Yes, that the Cruise is the biggest potential, right?

There are different sizes. And of course, typically, many orders are in a series of ships. So it can very much vary of...

But if we think the value per vessel?

Of course, there is a very large scale of when we are controlling everything from air conditioning to, well, water slides and everything in between energy productions and wastewater treatment, yes, it's, of course, the largest one. But yes, we are talking millions.

Yes. If I can ask another question. I mean, I understand that you have a good position in cruise given that Finland is just the land for all cruise ships. But how do you aim to address the other vessel categories?

Well, we also have maybe a little bit elaborating on -- still on this partnership as well. For example, this LNG type of carriers and what we have as a ferries as well, we do have also partnerships, how we operate in China, where, for example, at the moment, the biggest ferries and those productions are currently in, so we have a way to work in that one as well and look into growing that as well.

Thank you. Then a question here from the online platform regarding the Flow Control's M&A opportunities, so can you discuss those a little bit?

Well, like I mentioned that it's a big industry. It's a fragmented industry. We are a top 10 player. We have the global reach, global service capabilities. So both when I talked about our portfolio development, as there are clearly opportunities to widen our portfolio, serving our customers in the 4 core industries. I think -- for example, Rotex acquisition 2018 is a good example. We acquired an actuation company giving us new technologies, but also it gave us a very good position in India to build on. They were very strong in that area, and now we are scaling them globally. Flowrox, they had a good brand in mining, but of course, smaller company not able to address the markets. We have now combined the offerings. It makes us much stronger. And in certain areas, we have made very good progress. So that's the kind of logics we want to create, and we see opportunities there.

All right. Thanks, Simo. And I think Sindre here indicated a question.

Yes. Just a question on, you have had DCS systems for a long time now. And I guess you must have a lot of data from those systems. And obviously, they are helping, for instance, with preventive maintenance and so forth both local and maybe also from your side. But are you getting the -- let's say, are you getting so much out of those data as you can? I mean those data for, let's say, hundreds of paper machines and so forth, there must be a valuable source of knowledge, both for, let's say, product development for other players in the pulp and paper industry. Could that be either a source of, let's say, revenue or that you do more centrally and get, let's say, the benefit of the data back to your customers?

Of course, that's a very good question as such. And with this data, it's always something that we have to agree with customers, how do we utilize the data because it's something that we focus, of course, on -- to get clear signals that how it can be utilized. But we are very effectively using it already. And as Petri and Simo were mentioning, we are aiming to even better utilize the data when it's kind of complementing both sides, customer benefits and of course, that we can leverage that as well.

Could we see in like 10 years' time that you actually, let's say, half the way run the mill for instance, small tissue producer with 2 machines, I mean you have the capability to basically run that operation from here or from a center?

Well, this is an excellent topic that you will be discussing even more if you can go to the breakout session because there, we are telling more about, for example, how we can mill-wide optimize and maybe also talk a little bit about how we are targeting, of course, with all this technology towards more autonomous operations even for customers so that we support them and of course, with this kind of autonomous operations supported by the technology as such is, of course, in the very -- a bit longer future, not really tomorrow, but there.

Thank you. That wraps up the Q&A session here. And for the technical staff, please, the monitors are now blank. So if you could fix this. And while waiting for that, thank you, guys, and we move next to the CFO presentation, Katri Hokkanen.

I actually want to go back to what Thomas said in the very beginning of this afternoon about Valmet shifting gears. We do want to go from this continuous improvement more towards bold long-term ambition. And actually, that shift is already visible in our new financial targets. I will today summarize the key business levers, talk a little bit about capital allocation priorities, cash flow and then how we intend to create value as a company. But first, let's take a look at our new financial targets. For net sales, target is to grow 5% organically. And if you look at our track record, actually, the CAGR for the last 10 years has been 4%. And so we want to go from 4% to 5%. And that actually means that we need to double the growth in Biomaterial Services and then also accelerate the growth in Process Performance Solutions. For comparable EBITA, our target is to be at 15%, and I will come back shortly how we are planning to do this. Then for comparable ROCE target is to be at 20%. And actually, for us in Valmet, this is a very important target. When we talk about the mindset shifts, we want to go towards financial performance and allocate our capital very efficiently. Then as a new target, we are introducing gearing to be below 50%. And the question might be that, okay, what does this mean? And at the end of Q1, our gearing was 36%. And it means that we do have some firepower to execute M&A. And if we would find something interesting strategic that we would like to execute, we can actually go higher than 50%. But then it means that we target to go back to this below 50% again. What does then this all mean to our segments. As we announced actually yesterday, starting from July onwards, we will have 2 new reporting segments. They are driving both growth and profitability. Biomaterial Solutions and Services is combining the previous Process Technologies and Services segments together and then Process Performance Solutions is the former Automation segment. And even if this might look to you just as a change in the reporting structure, actually, this is much bigger transformation we are having inside of Valmet. And from the numbers, net sales for Biomaterials Solutions & Services is roughly EUR 3.9 billion. And out of that, 50% is related to services. Then in Process Performance Solutions, net sales is about EUR 1.5 billion. And when it comes to profitability, Biomaterials Solutions & Services is at 10.5% and then Process Performance Solutions significantly higher at 17.6%. Then how do we get to this 15% comparable EBITA target? And actually, we do have key actions, targets for both of these segments. In Biomaterials Solutions & Services, our target is to go from 10.5% to 14%. And as you can also see from the bridge, it's actually quite significant improvement. And here, the main thing is doubling the services growth to 8%. Then secondly, delivering the EUR 100 million savings from global supply. And then third, also the renewed operating model is supporting this target. Then in Process Performance Solutions, our target is to go from 17.6% to 20%. And that is coming mainly through accelerated growth in net sales to over double the market rate. And then also operating model is supporting this target as well. And for the operating model, as we have announced, it will deliver roughly EUR 80 million savings with the full run rate from next year -- beginning of next year. Then I also want to introduce, first time ever, capital allocation priorities and also segment mandates. And we are introducing this to support the long-term value creation in the company. The #1 thing here is, of course, the organic growth. And we want to allocate the capital to fund the organic growth. We are focusing on ROCE and competitiveness. And we have also defined mandates for our segments. For Biomaterials Solutions & Services, its growth services and drive cost competitiveness. Then on the Process Performance Solutions, it's to accelerate the growth. Then secondly, strategic M&A, very important thing for us. And there, on the Biomaterials Solutions & Services, the potential is quite limited, mainly on the services side. However, then on Process Performance Solutions, there are a lot of opportunities in the pipeline. It's very self-evident that Valmet has to be the natural owner and also that the price has to be right. And in Process Performance Solutions, as said, high potential there. And we are mainly focusing on bolt-on acquisitions outside of pulp and paper industry. And a very good recent example is this API or gas chromatography business, which we acquired a year ago, and it's a very good proof of our execution and integration capabilities. So it was a very complex carve-out, global business, market-leading position. And now after 1 year, it's actually operating as a business unit. And it's a very good platform for future acquisitions also in the analyzer business. Then thirdly, we are continuing with the existing dividend policy, targeting to pay out at least 50% of the profit. And then we can also use share buybacks if balance sheet and capital allocation priorities will allow; of course, this is then also subject to Board's decision. Then the next question is that how do we fund all of this. and actually, if you look at our cash conversion, it's been actually pretty strong for the last 10 years at 92% when we compare it against comparable EBITA, which is one of our key KPIs. However, we have had challenges with the net working capital. It has been increasing and also, it's visible here. And the question here is that why is that? And actually, between the years 2020-'24, there were a lot of external factors that were impacting our business. There were the post COVID times, war in Ukraine, price peak in 2022 and of course, also our inventories increased, we did suffer from challenging -- some challenging projects. And at the same time, also the business mix changed. So we doubled the net sales in the Process Performance Solutions and Biomaterial Services part. But actually, the situation has been improving, and cash conversion is much stronger now. . And when we go forward, there are 3 things that we will be focusing on. First is to have cash flow-positive project business also in the future. Then the business model is very clear and it's unchanged. Secondly, it's to continue to grow both Process Performance Solutions and Biomaterial Services. And then the business model is very efficient. It converts a lot of cash. And then thirdly, we need to keep eye on the inventories. And there, we do see some improvement potential, especially in Biomaterial Services, and that will be actually in the global supply scope in the future. . Then how do we stack against our peers? We actually selected these high-quality European industrials. And as you can see, our cash conversion is also strong compared to other industries. And our intention is to keep it that way. So we want to have a strong cash conversion, and that is also a thing that I will internally very much have a focus on. We have presented you today our new strategy. And it's built on top of this fundamental shift in our mindset and in our culture. And we are not afraid to set ourselves very ambitious tough targets. And I personally believe that we have what it takes to actually deliver these targets. And in 2030, Valmet will be a totally different company, and I'm super excited to be part of that journey. Thank you.

Thank you, Katri. Now I invite all the presenters here to the stage for a joint Q&A session where we have 25 minutes of time, roughly 25 minutes time prepared. And as a reminder, you can utilize the digital platform to ask questions, and we'll take some questions also through that channel. But let's start here from the in-person audience. So please raise your hand if you want to pose question and of course, great, if you can directly indicate who you want to ask that question from. Here in the middle.

Mikael Doepel, Nordea. I have a question still on the cost takeout measures that you have announced. So late March, as you Thomas said, EUR 80 million from streamlining. Now it's EUR 100 million on top of that from various sourcing, procurement, logistics, various production platforms, so on and so forth. But could you maybe give a bit more details around this? I mean, what are the costs going to be associated with this? When are we going to see some sort of an impact and to what extent? Maybe it would be great to get a bit more color, I guess, on this. Not sure who would like to answer, but, yes.

Thanks, Mikael. There's, of course, like we said end of March, we said we're going to simplify the organization. We're going to reduce with up to 1,150 people that could -- we're also going to invest in some capabilities as well coming into the business. That will sort of have a net impact of EUR 80 million run rate. There's a -- most of it is in SG&A, but there's also a little bit of sort of engineering COGS part of that as part of the simplification. We haven't said yet what that actually cost to do to make that kind of. We will, of course, I'm sure we're going to talk about it in almost a little more than a month ago from now or sort of at the Q2, we will book -- we'll make a booking a provision for that cost in Q2. So there will be fully visible. Then as you talk about the EUR 100 million when it really comes to footprint and other, say, consolidations of our supply chain, then that will also have a price tag on it, of course, but it's about making the right choices, even though they might be difficult for the future, right, and making sure that you get a return on that investment. I don't know if you want to add a little bit, Katri or...

Yes. So definitely a topic that we can then further discuss this after the Q2 results are published.

Okay. Let's then take a question from the digital platforms about the ROCE target and the M&A potential. So how do those 2 fit together with a target of going to 20% ROCE and then also doing M&A?

A very good question from the audience. As we talked about, we clearly intend to do strategic M&A, build our business foundation even further. That's, I think, where it's also very helpful that we actually split the business into the Biomaterial and the Process Performance Technology or Solutions because they're sort of generally a bit too different price points on these kind of assets, right? So of course, we need to evaluate how does that actually fit into our business, what synergies can we drive also from a top line synergy perspective, right? I mean take the Gas Chromatography business we bought from -- out of Siemens. Yes, it was a good acquisition. We're very happy about it, but it's also about driving top line synergies for other projects that we already have all the solutions as well. So we really have to sort of split up into Biomaterial and Process Performance Technologies or Solutions.

All right. Let's take an in-person question here in the middle. .

I guess this goes for Thomas. In the new organizational structures, what responsibilities are at the headquarter level, which are the functions that are not within the divisions or the businesses, what are kind of a general functions. For example, M&A is kind of within the divisions? Or do you have a shared resource on that?

Yes. So the overall, if you take M&A that lies with Katri. So that's, of course, from a group perspective. we will drive on any process that can be coming from the business that should be coming pipeline up and saying we really like this particular competitor or a company as a potential add-on acquisition, so there can be targets coming up. But process-wise, we run it essentially. Same thing we see HR as a global process, talent management as a global process, finance as a global process.

Okay. And then the second one, either for Thomas or then maybe the division heads can comment as well. So what is the benefit of having the automation business and the traditional pulp and paper business under the same roof. How do you guys help each other? How do you benefit versus being an independent 2 companies?

Maybe I take the first. Let me -- I think there are 2 questions in that or 2 answers in it that are important. So the one of the answers is actually historically, until today, we've had an organizational structure that sort of forces collaboration, right? And that's what we're trying to release and saying structure is not a collaboration. It doesn't come from structure. Collaboration is really a culture thing. Good leaders or good employees collaborate if it adds value to them and their business and therefore also the customer. So that's one piece. Then if you think about -- let's go back to autumn last year when we won the ARAUCO case. Would we have won that without automation and flow for that matter, together? I actually don't think so. I'm pretty certain that we would not have won it. Because what was the thing there, it was really about back to what we talked about a lot of times today, really about optimizing the outcome and the return on the invested capital for the customer, right? How do you do that? You have the right pulp technology. You have the right valves for the insert. You have the right automation system. You have the mill-wide optimization. You're going to see that later today, it's really about back to this resource efficiency, process optimization thing. There, we had sort of -- and then we had the in-house technology and owners on site, 1 big room, 50 people. And then so I say, okay, how do we really get this, right? How do we optimize this? For the sake of the customers that they actually get the best return on invested capital and can go to their capital market because they need to borrow money for the investors saying, listen, we got the best in town. They say they can do it. Thank you.

Thank you. Then a question for the biomaterial solutions and services relating to the services market share growth where the ambition is to go from 21% to 25%. So is this an organic target firstly? And then secondly, can you remind the audience about the key levers on how to capture the market share from 21% to 25%?

Yes, the growth is organic based certainly. And we have identified growth elements, mainly coming from the installed base, but also from the -- together with the initial capital sales opportunity that we will be grasping in the future by developing and delivering new customer value and utilizing better the existing one with the new operational model that we have.

Thank you. Then maybe a related question, but on the life cycle approach. So what are the key benefits to the customer from the life cycle approach that we are now focusing on?

Well, as already explained earlier, customers are not only buying equipment. They're not only acquiring technology. They are buying reliable high-performing, high-efficiency production assets that are fulfilling their own market and the business need. And when going back to the ARAUCO project as well. It is all about dimension in the solution, feeding that to the customer need and then putting that technology services, automation part together to solve the customer need for a long time. So it has essentially been changing the language into the customers' tone or the language so that having the total cost of ownership as a kind of a key component of the offering.

Thank you, Sami. And then a similar one to the Post Performance Solutions. So how do you accelerate growth further. Your track record is showing a decent 6% organic growth. What are the key things you are planning to do to accelerate even further? And also, there's actually another part here that doesn't come on the expense of your margins.

Good question. Again, maybe highlighting again, first, automation solution. So excellent offering stack, what we have built and willingness to still invest into developing so that we are expanding the great offering already to new subsegments, what we are happy discussing. And then of course, the strong basis in Pulp & Paper and really the service is a growing is installed based, which is really something that customers typically don't themselves or no one else can serve our system. So basically, that's installed base is growing our business and with the new technology really accelerating that as well.

Yes. We talked about the portfolio. We talk about the 4 core industries which all give us opportunities to grow. We can enlarge the portfolio, both in terms of technologies but also looking at new ways to serve customers in new kind of commercial segments, I would say. I talked about the smart services growth, really leveraging our existing capabilities, leveraging the data to make smart decisions where to invest and accelerate. And I talked about working even closer to end customers, but also our EPC partners and distributors. And that way, driving the channel-based growth. And of course, supported then by having a resilient, efficient supply chains, also investing in capabilities close to customers so that we can make sure that they get good turnaround times, et cetera, availability, and they see that we are kind of working with them long haul.

That's maybe a good point to sort of availability theme in this dynamic world that we are living in is actually getting also becoming, I think, a competitive advantage of ours.

Good. Please indicate if you want to -- well, there's a question here in the audience as well.

I wanted to ask a question on the services side of things. And I guess Europe is -- or EMEA is the biggest kind of a market for your Pulp & Paper services. Have you kind of analyzed kind of the installed base that you have there or your client base that is there a risk of closures or shutdowns that could perhaps impact negatively on your growth in the next coming years, thinking, for example, the containerboard overcapacity in Europe?

Yes. Basically an overcapacity situation in Europe on the containerboard side that's clear. The demand is growing at the same time, and it will catch up with a certain amount of time they need. They will be most probably one could assume need for closures as well. We have seen that happening. That trend probably will continue, and it will have, of course, an effect. Typically, the closures happen on the oldest side of the assets, smallest months, maybe not so often even Valmet-based OEM machine side. But certainly, that is an expectation also for the future that it will continue. However, we expect the overall market, the demand growth to catch up the overcapacity within a reasonable time horizon. And when considering our new technology and capital sales, it's good to remember that today, when we discuss with the customer, we are talking about '27 start-ups and '28 full capacity. Next year, we're going to sell '29 full capacity. That's the delivery delay. That's good to remember. That's also why it's important that when you think service is also -- the real driver here is also -- it's not so much about new equipment coming in, it's also about the utilization rate.

Yes. Sure. Maybe a follow-up on the services as well. Can you talk a little bit about kind of examples on aftermarket intensities in various regions or products like a board machine in Europe versus a tissue machine somewhere else from your perspective, where is the best lifetime potential to sell your aftermarket offering and which has historically been the best business for you?

Historically, the best area has been the kind of mature markets like North America, Europe, that's traditionally been the best life cycle service market for us. In Asia it's more concentrated on new machine support and ramping up the new capacity, et cetera, because there's been so much new capacity buildup in Asia. So the overall life cycle potential for the installed base traditionally has been in the mature markets.

Now that you're maybe going after the installed base with a little bit new approach, where do you think we'll see the sales coming up most regions, product categories?

No, that is an excellent excellent question. And of course, we come back to this identified growth levers as a part of this whole life cycle strategy and the concept. So there are the long-term agreement components and there are parts and consumables and then, of course, areas which we consider that we can better serve -- and actually, these activities will be implemented shortly. But then we are also as a strategic KPs following the execution of these selected priorities. But by 2030, we have a certain target setting, but we are gradually improving every day. So that doesn't disappear anyway.

Thank you, Sami. And then since the Automation Solutions related question here, the digital platform. So about the gas chromatography business that was acquired quite recently, what's the strategic benefit in driving the organic sales growth?

Very good question. And it is, as maybe also Thomas was here mentioning really driving also the top line growth for our full offering. We are working on several cases together for optimizations, DCSs, gas [ chrome ] grafts have already current deliveries ongoing to the same customers. So I would say that, that has been starting well and we are going to accelerate also that.

Yes. And I would add that it's also you may have noticed that we have similar customers there. And that's something that also our teams are working together. So there's an additional benefit here.

Good kind of question on CEO, what are the key risks with the new strategy and how you plan to mitigate those?

Yes. I think what I have been sort of -- there's, of course, the whole environment that we are living in, it's so dynamic, we have to just manage that on a day-to-day basis. That's also why this empowerment and dealing with the problems close to where the problem is really comes into play. I think the biggest risk I've seen sort of short-term wise or have been cognizant about, and that's also why we actually trying to travel quite a bit even in this quite intense strategy period is our operating model implementation where we're really changing and there's lots of moving pieces to get that new organizational design through, figure out who is actually in all of the boxes all the way through. And then my biggest concern have actually been how will the organization deal with the uncertainty that they actually have is that we're doing this big shift. I might be 100% behind. I think it's a great idea. However, I'm also personally in play. So that risk from an individual perspective of them saying, start focusing too much on yourself rather than doing your job, serving your customers that's been probably my big short-term concern. I think so far, I think the organization has done a stunning job really keeping their eyes on the ball and make sure the best thing you can do is actually do your job really well and then we'll go from there. So that's been the sort of the -- I think we're so far so good. Really happy with it.

Thanks, Thomas. Then we have a question here by Mikael.

Thank you. I know this is very much about strategy and looking further out in time, but I just have to ask also about the short-term market environment. I mean we've seen tariffs going back and forth. You also have a big business in the U.S. Maybe you could talk a bit about what you're seeing in the markets currently across the business segments?

Maybe just, Mikael, overall, first and foremost, I'd say the U.S. business to start with. We're actually in a relatively fortunate situation with roughly 2,400 employees in the U.S. or in North America. So we are in a very good position to serve our customers. We have local sourcing or local manufacturing production of a lot of the service things or solutions that we service with. So there, we're actually in a pretty good position when it comes to the big capital things, There, I would say it's an even playing field. So there's no one who then produce certain big ticket ices in the U.S. that we don't, and we then compete sort of where there's a tariff fairness or unfairness between. That's not what we see. So U.S. market for me is more about how does that whole tariff situation impact the overall economy. And therefore, the overall consumption of the consumers, are you going to buy less toilet paper, et cetera. I say that has been more it. And I think that grows globally, right? Then it's been such a dynamic ride, as we all know, since second of April. And that goes back to then this simplified clear roles and responsibility, empowered organization, empowered individuals with responsibility and accountability comes so much into play because then Kyle in the U.S. when it comes to Flow Control, he can manage the situation with his team, and he can sort of on a very dynamic real time, if he has to go all the way up, all of that, it just takes too long time. So that, I think, is -- and that's where the additional benefit of the new structure is as well. Then another maybe comment overall is when we talked a bit like with customers on a very high strategic level it's always sort of -- you can't really predict and we can't sit on our hands, so let's move on, right kind of thing. Mindset was, with all the uncertainty that there is in all the markets, not just our market but in every market, I guess, basically I don't know if you want to put a bit more segment flavor to it.

Yes, of course, related to Biomaterials Solutions and Services now Pulp Energy and circularity. For sure, that is impacting particularly our end customers' decisions. And that is then the uncertainty we are living with. But currently, we haven't seen any kind of major issues going forward. And as said, it is mostly services that we are doing in North America through our local assets and the capabilities.

The services are made in U.S.A. by and large, on the capital side, I think from our perspective, the customers are making the investments for the next 2 or 3 decades. That's the horizon, there they are thinking about how to move forward for such a long time horizon. I don't believe or based on the activity, the customers are still very keen on discussing with us. And so no matter, where they are located in the U.S. or somewhere else.

Also think about the time from decision to delivery is pretty. The war can change a couple of times between them.

Even the tariffs?

Yes.

Thank you for the lively Q&A and time is running. So we start to -- time to start to wrap things up. So Thomas, I'm now handing over to you for closing remarks.

Thanks, Pekka. First and foremost, really big thanks to all of you who have listened engaged, you have participated with good questions, really been a pleasure. And there's so many of you who actually also came to Tampere to be with us today. We're also having some very exciting stuff in store for you right after this. But I really want to thank you all for spending your time and day with us.