Financial Statements Review Jan-Dec

2021

Neles will publish its Financial Statements Review for January-December 2021 on Friday, February 4, 2022. Highlights of the review will be available on this page. Neles' Interim Review for January-September 2021 is available in our report library.

Financial Statements Review for January-December 2021

Neles will publish its Financial Statements Review for January-December 2021 on Friday, February 4, 2022, approximately at 9:00 AM EET.

Teleconference

A teleconference hosted by Interim President and CEO Simo Sääskilahti will be held on the same day at 2:00 PM EET.

To register as a participant for the teleconference and Q&A session, please dial in 5 to 10 minutes before the beginning of the event using the confirmation code and numbers below. The teleconference will be recorded and published on Neles’ website. The contact information is gathered for registration purposes only and it is not used for commercial purposes.

Dial in numbers:

PIN: 38640935#

Finland Toll: +358 9 81710310

Sweden Toll: +46 856642651

United Kingdom Toll: +44 3333000804

United States Toll: +1 6319131422

Join the audiocast

For more information, please contact:

Rita Uotila, Vice President, Investor Relations, Tel. +358 400 954141, E-mail: rita.uotila@neles.com 

President and CEO Olli Isotalo comments on Neles' Q3 Interim Review 2021:

"Pulp, paper and bioproducts project business continued to be strong, and services demand also continued on a good level. In Chemicals and Oil & Gas and projects, the market was slow. We were able again to achieve more than 15% adjusted EBITA in the third quarter and our sales were up by 12%."

The market situation in the third quarter stayed mainly the same as in the second quarter of 2021. Pulp, Paper and Bioproducts project business continued to be strong, and we continued to win new projects, as well as additions to the existing projects. In Chemicals and Oil & Gas and projects, the market was slow. The decisions of the projects in the funnel are being postponed to the fourth quarter or early 2022.

The Services and MRO-driven businesses’ orders received were slightly down from the second quarter of 2021, but 20% up compared to the comparison period. The Services market situation continues to be good; the decline in services orders sequentially was mainly due to seasonality. The MRO-driven business developed positively in the third quarter and orders were 22% higher than in the 2020 comparison period. However, the MRO-driven business is still clearly below pre-Covid levels. This is due to persistent Covid-19-related issues and tight customer demand in APAC and EMEIA, while in North and South America demand is already at pre-Covid levels.

Thanks to good sales volumes, we were able again to achieve more than 15% adjusted EBITA in the third quarter. This was despite the continuing challenges in logistics and availability of electronics components. These challenges create risks also for fourth quarter deliveries.

Diversification to growing new industries is a cornerstone of our strategy. The acquisition of the valve and pump businesses of Flowrox is an important milestone in strengthening our position in the growing Metals and Mining markets. Neles has been providing solutions in these markets, but we have lacked certain important products from our own portfolio. With the acquisition, we not only incorporate these missing products in our offering, but also strengthen our knowledge of the metals and mining applications, broaden our sales channels for these sectors and get a brand that is well known and respected in Metals and Mining flow control. Integration planning is progressing well, and we will close the transaction in November.

The global logistics situation continued to be challenging during the third quarter of 2021. The availability of transportation and difficulties in arranging logistics by Neles or its customers has caused delays in Neles’ deliveries. In addition, delays have occurred due to a shortage of electronic components. These challenges are also expected to continue in the fourth quarter of 2021.

During 2021, Neles’ Brazilian supply center was temporarily closed due to Covid-19 cases. The supply center reopened more quickly than initially expected due to the attentive management of the situation. There were similar challenges in Neles’ Indian factories at the beginning of the second quarter, leading to temporary closures.  

Neles has operations in several regions where the Covid-19 pandemic continues to cause disruptions. There continue to be risks of similar temporary closures of local Neles operations as those experienced earlier. Currently, all Neles factories are operational, and the Covid-19 situation is being followed closely by management, prioritizing the health and safety of Neles’ employees and partners.

In 2020, the Services and other MRO-driven businesses were negatively impacted by pandemic-related mobility restrictions and our customers’ tight cash management. Especially large maintenance shutdowns were postponed. The global situation in the Services and MRO-driven businesses has been improving clearly in 2021, but uncertainties and risks in certain regions are expected to continue.

Since the second quarter of 2020, Neles has taken proactive measures to ensure the safety of employees, control costs and preserve cash flow to protect the company’s financial position. The measures have included a variety of enforced safety procedures at manufacturing sites, remote working, travel restrictions, cuts to external spending across the organization, as well as cost-saving and optimization activities. Travel restrictions, cuts to external spending across the organization, as well as cost-saving and optimization activities have continued in 2021. Covid-19-related personnel cost-saving actions were mostly discontinued at the end of 2020.

Increased attention has also been paid to managing net working capital. There have been no material credit losses or order cancellations.

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