Shares in Valmet, the Finnish forestry and energy technology group, rallied strongly on Friday after the company reported second-quarter earnings that comfortably beat market expectations and upgraded its financial guidance for the remainder of the year.
By midday in Helsinki, Valmet's stock had gained over 6%, making it one of the best performers on the OMX Helsinki index. The company posted adjusted operating profit of €185 million for the three months to June, up from €162 million a year earlier, while sales rose 9% to €1.42 billion. Analysts had pencilled in a lower figure of around €170 million.
Management attributed the outperformance to strong demand in its automation systems division and a steady recovery in orders for pulp and paper mill equipment. Valmet now expects full-year 2026 sales to grow 'significantly' and adjusted EBITA margins to improve, having previously guided for moderate growth. The upgraded outlook comes as industrial companies across Europe benefit from easing supply chains and sustained capital investment.
For UK investors and pension holders with exposure to European equities, the surge in Valmet is a welcome boost. The stock is held by several UK-focused investment trusts and pension funds that track the MSCI Europe index. The positive read-across also lifted other industrial names, with Siemens and ABB both edging higher in sympathy.
Analysts at Nordea noted that Valmet's results 'reinforce the narrative of a cyclical upswing in capital goods' and said the upgraded guidance could prompt further earnings revisions across the sector. However, they cautioned that rising raw material costs and geopolitical uncertainties remain headwinds. Valmet's order backlog stood at €4.1 billion at the end of June, providing solid visibility into near-term revenue.