January 29, 2018

Valmet Automotive strategy and leadership transition

In 2017 Valmet Automotive took significant steps in transforming from a Finland-based vehicle manufacturing business to a service provider with a broad offering to the automotive industry: a company with a special focus on electric vehicles and a strong presence in Central Europe, close to its key customers. While vehicle manufacturing continues to be a core element in Valmet Automotive's strategy, the company is putting more emphasis on growth from new areas such as automotive engineering and battery pack supply. This complements its vehicle and roof manufacturing businesses.

In January 2017 Valmet Automotive entered into a partnership focused on electronic automotive solutions with Contemporary Amperex Technology Limited (CATL), a leading global provider of battery and energy storage solutions. This was followed in February 2017 by the acquisition of an automotive engineering company in Germany employing approximately 800 people in locations next to the leading OEMs. Following this expansion Valmet Automotive now employs circa 1,000 engineers in Europe.

The aim of building up a strong engineering team and the CATL partnership is to move Valmet Automotive closer to its key customers and become a significant European player in the rapidly evolving and fast growing electric vehicle domain. Our goal is to support the European automotive OEMs, their suppliers and selected industrial customers by engineering electric vehicle drive train solutions, integrating them into vehicles and supplying batteries. The unique assets of Valmet Automotive also offer the capability to support complete vehicle engineering, the manufacturing of vehicles and automotive roof solutions.

In vehicle manufacturing Valmet Automotive has successfully built a strong relationship with Daimler through manufacturing both the A-class car and GLC SUV in high volumes in Uusikaupunki, Finland. During 2017 Valmet Automotive manufactured a record number of vehicles. This followed the successful completion of our biggest ever recruitment campaign and extensive development of the Uusikaupunki plant. It is now the largest single site factory operation in Finland, employing over 4,000 people. Such a steep ramp-up of operations in Uusikaupunki did not produce, due to operational issues, the financial results expected. However, Valmet Automotive did manage to deliver more cars to Daimler than they had initially expected. The partnership with Daimler sets a new milestone during 2018 as Valmet Automotive starts manufacturing an as yet unrevealed new Daimler car.

In order to realize the full potential of the Valmet Automotive's updated strategy and new assets, the Board of Directors has decided to initiate a leadership transition. CEO Ilpo Korhonen steps down from his position January 29, 2018 and leaves the company February 28, 2018. The search for the new CEO is ongoing and in the interim the General Counsel, Ms. Minna Huhtaniska, will take on the Managing Director responsibilities of Valmet Automotive's parent company.

– Valmet Automotive has gone through a significant transformation during the recent past. While the 2017 financial results are not satisfactory, the company has grown into a meaningful European player with expanded business scope and strong capabilities not only in Finland but also in Germany and Poland. We have the keys to the future in our own hands. In order to ensure successful execution of the strategy the Board has concluded that it is the right time to make a leadership transition, says Mr. Jarkko Sairanen, Chairman of the Board, Valmet Automotive.

– I am very proud what we have done over the decades at Valmet Automotive. The company has great talent and it has been a true honor to be part of our journey. I wish Valmet Automotive all the best in realizing its strategy and building the company into a true international player with a significant role in transforming the industry towards electric vehicles, says Mr. Ilpo Korhonen, departing CEO, Valmet Automotive.

– The entire Board and the employees of Valmet Automotive want to thank Ilpo Korhonen very warmly for his 30-years contribution through several roles and in particular for his very strong dedication to the company throughout the years, continues Mr. Jarkko Sairanen.

The owners of the company, Pontos, Tesi and CATL support Valmet Automotive's measures in implementing the strategy.

– Valmet Automotive is in excellent position to become an increasingly important part of the European automotive industry through the electrification of mobility, says Mr. Timo Kokkila, CEO, Pontos.

Further information:

Jarkko Sairanen, Chairman of the Board
Requests for interviews through assistant Terhi Toivari +358 40 733 6929

Timo Kokkila, CEO, Pontos Oy
+358 10 239 6359

Jussi Hattula, Director, Growth & Industrial Investments, Tesi
+358 40 066 9955
@TesiFII / @jussiha

Valmet Automotive is an experienced provider of automotive engineering, vehicle manufacturing, battery systems and convertible roof systems. Our special areas of expertise are premium cars, electric vehicles and convertibles. We employ 5500 professionals in Finland, Germany, Poland and Spain.

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