Valmet Automotive continued its strategic transformation in electromobility and sustainability within challenging business environment in 2023. While component shortages eased in all business lines, economic and geopolitical uncertainties continued to exist.
Gross sales* of EUR 2.2 billion, net sales of EUR 531 million and operating profit 3.7% of net sales
During the financial year, Valmet Automotive’s gross sales amounted to EUR 2,221.4 (2,841.9) million, a decrease of 21.8% compared to the year earlier. The net sales were EUR 531.2 (603.5) million, which was 12.0% lower than the year earlier. In Vehicle Contract Manufacturing (VCM) business line, gross and net sales decreased due to lower volumes and the planned ending of Mercedes-Benz GLC production in June 2022. In Electric Vehicle Systems (EVS) and Roof & Kinematic Systems (RKS) business lines, gross and net sales increased significantly because of volume increases of existing products and new customer programs in production.
The Group's operating profit amounted to EUR 19.5 (31.3) million, a decrease of 37.6% compared to the previous year, or 3.7% (5.2%) of net sales. Underlying profitability was negatively affected by the volume decline in VCM, partially offset by contractual compensations, while profitability in EVS and RKS improved compared to the previous year.
Investments and cash flow
Investments related mainly to a new customer program in VCM, growth in EVS, group-wide ERP project as well as replacement, productivity, and flexibility investments in all business lines.
Valmet Automotive’s cash flow after investments amounted to EUR -49.7 (-56.8) million. The slight improvement in cash flow was mainly due to favorable net working capital change which more than offset the impact from lower profitability and higher cash flow used for investment activities.
Sustainability
Valmet Automotive has been committed to carbon neutrality in its own operations since the beginning of 2022. The commitment is validated by DNV granting Valmet Automotive a PAS 2060 certificate. In 2023, the company’s climate work was awarded with an A- rating by the CDP organization, regarded globally as the gold standard of environmental reporting. The top rating reflects Valmet Automotive’s strong commitment to sustainability and ranks the company among the leading industrial corporations in climate strategy and sustainable development.
Valmet Automotive has defined its activities according to the EU Taxonomy reporting regulations and is in the process of identifying the taxonomy eligibility and alignment of the activities, assessing impacts and consequences for the business. At the same time, the company is preparing for the EU Corporate Sustainability Reporting Directive (CSRD) reporting, starting from the financial year 2025. Until then Valmet Automotive will publish the annual Sustainability Report based on GRI Standards.
Continued strategic transformation
- Valmet Automotive has become a major international player in the automotive and battery systems industries, with significant steps particularly in e-mobility solutions, battery systems and sustainability. In 2023, we made the decision to increase the independent role of the business lines in Valmet Automotive's strategy and operational model to strengthen our competitive position. With this change, we aim to increase the efficiency and agility of our operations, enabling the business units to best respond to the challenges and opportunities of the business environment. The more independent business lines will be able to seek solutions for their operations and develop their offerings more clearly based on their own starting points and customer needs, even beyond the traditional automotive industry, says Jarkko Sairanen, Chairman of the Board, Valmet Automotive.
Successful new launches
- Growth continued in EVS and RKS during 2023. In Uusikaupunki, Finland, battery plant, new products were launched during the year and Valmet Automotive started the series production of battery systems in Kirchardt, Germany. VCM started the series production of the prestigious Mercedes-AMG GT 4-Door Coupé at the Uusikaupunki, Finland, car plant. RKS started production of new active spoiler and charging flap systems and was nominated for further programs. The RKS Zary plant in Poland will be expanded due to increasing production volumes of electromobility solutions in the next few years. For all the achievements of Valmet Automotive in 2023 I wish to thank our committed people, says Pasi Rannus, CEO, Valmet Automotive.
Petra Teräsaho was succeeded as the Group CFO by Juha Torniainen as of January 10, 2024.
Financial statements
The company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS).
* Gross sales are presented as an alternative performance measure. It is defined as total (gross) sales including both net sales and sales of customer-directed materials and parts. Customer-directed materials and parts are materials that are purchased from the principal or from suppliers selected by the principal at prices negotiated by the principal.
Valmet Automotive’s consolidated financial statements are available on the Group’s website.
Additional Information:
Mikael Mäki, Manager, Corporate Communications, Valmet Automotive
+358 50 317 4308
mikael.maki@valmet-automotive.com