Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (December 2020)
55 slides from Metso's investor presentation, December 2020
Slide 1: Investor presentation December 2020
Investor presentation December 2020
Slide 2: Forward looking statements
Forward looking statements It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for customer industry profitability and investment willingn
Slide 3: Metso Outotec in brief
Metso Outotec in brief Metso Outotec is a frontrunner in sustainable technologies, end-to- end solutions and services for the aggregates, minerals processing, 4.2 50+ and metals refining industries billion euro countries with globally. sales* presence By improving our customers’ energy and water eff
Slide 4: Metso Outotec key financials – illustrative 2019 combined
Metso Outotec key financials – illustrative 2019 combined Sales EUR million Sales by industry1 Sales by geography1 4,186 13% Services 23% 26% share of sales 56% 42% 35% Adjusted EBITA2 61% EUR million / % 525 / 12.5% Aggregates EMEA 1. Illustrative combined figures of Metso Minerals business carve-o
Slide 5: Enabling sustainable modern life
Our purpose Enabling sustainable modern life
Slide 6: Our vision
Our vision To be customers’ number-one choice for sustainable use of earth’s natural resources. Together we deliver service, reliability, innovation and results – safely.
Slide 7: Our strategy
DOOO000 Our strategy MEGATRENDS Urbanization Electrification Sustainability Resource scarcity VISION To be customers’ number one choice for sustainable use of Earth's natural resources. Together we deliver service, reliability, innovation and results — safely. BRAND PROMISE We are the partner for po
Slide 8: Strategy will be implemented via TOP Priorities
Strategy will be implemented via Performance Integration and TOP Priorities culture financial performance Tier-1 company Sustainability Customer centricity
Slide 9: Target to be industry leading company with strong financial performance
Target to be industry leading company with strong financial performance Adjusted EBITA Maintaining margin of investment >15% grade credit over the cycle rating Dividend payout of Progress in sustainability at least in alignment with the 50% 1.5°C of earnings per share commitment
Slide 10: Our key strengths provide a strong base…
Our key strengths provide a strong base… Widest offering Leading services Customer base Strong technology Scale & financial and capabilities expertise and strong brand and R&D power position
Slide 11: ...which is supported by focused organization with clear roles and responsibilities
...which is supported by focused organization with clear roles and responsibilities Business areas Market • P&L responsibility • Offering • Go-to-market models • R&D 5 areas • Customer service • Sales & account management 8 • Local operations • Scale benefits Global functions • Best practices • Glob
Slide 12: Our strong portfolio with aftermarket opportunities
Our strong portfolio with aftermarket opportunities Aggregates Minerals processing Metals 25% of sales 63% of sales 8% of sales Global #1 Global #1 Global #1 Aftermarket potential Aftermarket potential Aftermarket potential ~35-45% ~60-70% ~30-40% Note: sales split year-to-date 2020, excluding Recyc
Slide 13: Emphasizing services and product development
Emphasizing services and product development CONTINUOUSLY FOCUS ON PRODUCT GROW SERVICES DEVELOPMENT • Reinforce presence in Insert Background Picture • Building on our end-to- service-intensive Forend process best knowledge result, use businesses an image that is 16:9 • Standardized and pre- • Prof
Slide 14: We are on track in delivering the integration synergies
We are on track in delivering the integration synergies Synergies at announcement of transaction (July 4, 2019): • EUR 100 million cost synergies • EUR 150 million revenue Synergies confirmed after synergies merger (August 4, 2020): • In three years • EUR 120 million cost synergies by end of 2021 Cu
Slide 15: Business specific profitability improvement actions continue
Business specific profitability improvement actions continue Earlier initiated actions continue uninterrupted in Minerals and Aggregates, Metals restructuring and turnaround actions under planning Supply footprint Customer centricity R&D • Ensuring scale and competitiveness • Improving on-time deliv
Slide 16: Strategy execution will result in measurable financial improvement
Strategy execution will result in measurable financial improvement Building blocks of adj. EBITA % improvement Financial targets Adjusted EBITA >15% over the cycle 11.2 Maintaining an ‘investment- grade’ credit rating Dividend pay-out of at least 50% of earnings per share Progress in sustainability
Slide 17: Action taken in Metals & Recycling
Action taken in Metals & Recycling • Metals’ performance has been unsatisfactory • Restructuring and turnaround initiated • Business scope and cost structure to be addressed • Recycling business to be divested as a result of portfolio assessment • Target to find a new owner to leverage the full pote
Slide 18: Our core industries have a solid growth outlook…
Our core industries have a solid growth outlook… AGGREGATES MINERALS PROCESSING METAL REFINING – equipment market growth – equipment market growth – equipment market growth EUR billion EUR billion EUR billion 10 4 ~6 6 ~8-10 8 ~3 5 ~7 CAGR CAGR ~2-3 CAGR 19-23F 6 19E-23F 19E-23F 4 4-6% 2 3-6% 3-6% 4
Slide 19: …and our exposure is balanced…
…and our exposure is balanced… ~80% of sales spread across 4 major applications 9% 10% 30% Copper Aggregates Iron Gold Battery metals 13% Other metals 24% 14% Excluding recycling and other industries
Slide 20: …between three major growing metals…
…between three major growing metals… MINING CAPEX PRODUCTION 2019-2023 Current market Share of M:O sales M:O addressable market, EUR billion balance COPPER (total committed) 24 21 Slight oversupply Mt +4% Deficit expected >2023 30% 2019 2023 ~8-10 ~7 CAGR IRON ORE 2.534 3-6% 2.423 Mt Slight oversupp
Slide 21: …and a good position in fast-emerging battery metal
…and a good position in fast-emerging battery metal processing and recycling markets GLOBAL LI-ION DEMAND 2019-30, Mt Current market Future market BATTERY CELL balance balance NICKEL DEMAND (battery-grade / +23% p.a. HPAL route) GWh 1.19 Slight oversupply Shortage of battery-grade is expected after
Slide 22: Our commitment to the 1.5 °C journey
Our commitment to the 1.5 °C journey Handprint: Sustainable offering and innovations Energy Water Offering in Safe efficiency and efficiency circularity operations emissions Footprint: Responsible and trusted partner Environmental Responsible Engaged Health and efficiency in procurement and diverse
Slide 23: Our business areas
Our business areas Aggregates Minerals Metals Services Consumables Crushing and Equipment and Processing Spare parts, Comprehensive screening full plant solutions and refurbishments offering of wear equipment for solutions for equipment for and parts for mining the production minerals metals refinin
Slide 24: Our full offering from ore to metal
Our full offering from ore to metal Minerals processing Metallurgy Aggregates processing Prospecting, exploration, Comminution: Comminution: Separation: Separation: From ore Metals refining To development, extraction dry wet beneficiation dewatering body metal Classification / Materials handling / S
Slide 25: Industry-leading service expertise and global network
Industry-leading service expertise and global network • Comprehensive service portfolio from spares and wears to advanced lifecycle services • World-class team of experts • Efficient service processes to enable our experts to get it right – fast • Deep understanding of customer process, product desi
Slide 26: Sustainable technologies to help customers
Sustainable technologies to help customers Examples of technologies with higher energy, water, emissions and resource efficiency Lower energy consumption with Vertimills® 25-35% in grinding Lower water consumption at copper concentrator with 65% Pretium Water Advisor & Process Water Recycling Plant
Slide 27: Strong innovation and R&D power
Strong innovation and R&D power New series of 15+ innovative products launched each year 100 Investment in research and million euros development annually R&D centers, co-creating 30 with and customizing solutions to customers 8,200+ Patents
Slide 28: Metso Outotec R&D and operations footprint
Metso Outotec R&D and operations footprint Country with direct presence HQ Factory Research center Test center and lab Note: Excluding service locations
Slide 29: Uncompromising safety in offering and operations
Uncompromising safety in offering and operations Safe products and services • Products designed for safety • Safe and professional # of injuries per million hours of work service teams 8 Safe and responsible 6 supply chain Total Recordable Injury • Rigorous supplier screening Frequency (TRIF)2 • Sup
Slide 30: Metso Outotec global team of professionals
Metso Outotec global team of professionals Our 16,000+ people by geography 11% 14% 36% 13% 26% Europe South America Asia-Pacific North and Central America Africa, ME and India
Slide 31: Metso Outotec leadership team
Metso Outotec leadership team Extended Metso Outotec Executive Team Metso Outotec Executive Team CEO Pekka Vauramo CFO Legal & Compliance Eeva Sipilä Nina Kiviranta HR Carita Himberg * Business development Interim Hannele Järvistö Piia Karhu Services Aggregates Minerals Metals Recycling Consumables
Slide 32: Metso Outotec for aggregates industry
Metso Outotec for aggregates industry Our offering Customer benefits • Crushers, screens and feeders • Best cost, best availability, easy-to- buy, and easy-to-own solutions • Mobile and portable machines and plants • Range of brands and solutions that cover needs from essential to high- • Stationary
Slide 33: Aggregates: unparalleled offering for crushing and screening
Aggregates: unparalleled offering for crushing and screening Lokotrack ® Cone and jaw crushers World-leading offering in Urban™ series crushing Community-friendly crushing plants with advanced noise and dust protection – incl electric and hybrid Life Cycle Services and financing services Service mod
Slide 34: Metso Outotec for minerals processing
Metso Outotec for minerals processing Our offering Customer benefits • Equipment for comminution, • Most technologically advanced beneficiation, dewatering, equipment and solutions with classification, material handling, and - Highest recovery rate and throughput slurry handling - Lowest total cost
Slide 35: Minerals: full offering from ore to concentrate
Minerals: full offering from ore to concentrate Vertimill® HIGmill® Industry benchmark in stirred Advanced and energy-efficient fine milling technology and ultra-fine grinding solution HRC™ Nordberg MP Series™ cone High pressure grinding rolls for crushers efficient size reduction in mining Maximum
Slide 36: Metso Outotec for metals refining
Metso Outotec for metals refining Our offering Customer benefits • Pre-engineered products and solutions • Full solutions for processing almost for process islands and full plants any ore or concentrate to refined metal, incl sulfuric acid production • Tailored EP, EPS and EPC plant deliveries • In-
Slide 37: Metals: advanced solutions from ore or concentrate to metal
Metals: advanced solutions from ore or concentrate to metal Iron Ore Agglomeration World-class smelting World leader with more than 400 technologies Sinter Plants and more than 100 Operated by world’s largest -incl. the world’s biggest-Pellet Plants copper, nickel and ferrochrome supplied globally o
Slide 38: Q3/2020 results
Mme OOOO ¢ Q3/2020 results
Slide 39: Q3/2020 highlights
Q3/2020 highlights • Market activity largely unchanged compared to the end of Q2 • Orders and sales affected by Covid-19 • Performance of the Aggregates and Minerals segments healthy • Integration has started quickly with good progress • EUR 31 million annual run rate of cost synergies achieved • Me
Slide 40: Group highlights in Q3, IFRS
Group highlights in Q3, IFRS (comparison period illustrative combined) • Orders received EUR 836 million (EUR 1,169 million) • Sales EUR 985 million (EUR 1,073 million) • Adjusted EBITA EUR 109 million, or 11.1% of sales (EUR 153 million or 14.3%) • EBIT EUR 47 million, or 4.8% of sales (EUR 126 mil
Slide 41: Covid-19 impacts in Q3
Covid-19 impacts in Q3 • Negative impact continued due to lockdowns affecting operations and widespread restrictions limiting travel and workforce mobility • Own operations have been running with additional health and safety measures without major disruptions since early June • Aggregates demand sta
Slide 42: Aggregates highlights
Aggregates highlights EUR million % 350 16 • Orders received EUR 232 million (EUR 211 million) 300 14 o Strong development in China 12 250 o Organic growth -14% due to Covid-19 10 o McCloskey impact on growth +29% 200 • Sales EUR 244 million (EUR 217 million) 8 150 o Organic growth -12% 6 o McCloske
Slide 43: Minerals highlights
Minerals highlights EUR million % 900 18 • Orders EUR 516 million (EUR 781 million) 800 16 o Major project orders in the comparison period o Project pipeline active but decision making slow 700 14 o Upgrades and modernization services orders low 600 12 o Currency impact -8% 500 10 • Sales EUR 634 mi
Slide 44: Metals & Recycling highlights
Metals & Recycling highlights EUR million % 250 25 • Orders received EUR 88 million (EUR 176 million) 20 200 o Slow decision-making on projects and 15 modernization services, pipeline unchanged o Large orders in the comparison period 150 10 • Sales EUR 107 million (EUR 152 million) 5 o Low order bac
Slide 45: IFRS Income Statement
IFRS Income Statement EUR million Q3/2020 1-9/2020 1-9/2019 1-12/2019 Sales 985 2,432 2,179 2,976 Gross profit 243 676 644 858 Adj. EBITA 109 293 278 377 Adj. EBITA, % 11.1 12.0 12.8 12.7 Operating profit 47 193 247 325 Operating profit, % 4.8 7.9 11.3 10.9 Net financial expenses -9 -20 -23 -34 Prof
Slide 46: Income Statement (illustrative combined)
Income Statement (illustrative combined) EUR million Q3/2020 Q3/2019 1-9/2020 1-9/2019 Sales 985 1,073 3,011 3,054 Adjusted EBITA 109 153 344 378 % of sales 11.1 14.3 11.4 12.4 Operating profit 47 126 206 327 % of sales 4.8 11.7 6.9 10.7 Earnings per share*, EUR - - 0.15 - * based on the number of o
Slide 47: IFRS Balance Sheet
IFRS Balance Sheet EUR million September 30, 2020 June 30, 2020 December 31, 2019 Intangible assets 2,027 2,062 723 Total property, plant and equipment 353 357 315 Right-of-use assets 126 138 89 Other non-current assets 237 251 282 Inventories 1,098 1,106 975 Receivables (trade and other) 1,157 1,09
Slide 48: Analysis of Cash Flow
Analysis of Cash Flow EUR million 1-9/2020 1-12/2019 Profit for the period 123 223 Adjustments 175 166 Change in net working capital 112 -216 Financial income and expenses paid, net -21 -31 Income taxes paid -72 -100 Net cash flow from operating activities 317 43 Capital expenditure on fixed assets
Slide 49: Net working capital per September 30, 2020
Net working capital per September 30, 2020 EUR million
Slide 50: Financial position
Financial position • Committed and undrawn EUR million September 30, 2020 revolving credit facilities totaled EUR 790 million at the end of Liquid funds 477 September Net debt 943 Gearing, % 47.0 • Outotec's EUR 150 million hybrid bond was repaid Equity-to-assets ratio, % 39.4 on July 31, refinanced
Slide 51: Integration proceeding fast
Integration proceeding fast • Large majority of the nominations to the new organization had been made at the end of Q3 • Realization of the cost synergies is proceeding according to plan • At the end of Q3, an annual run rate of EUR 31 million had been reached • The main source of the synergies has
Slide 52: Market outlook
Market outlook Metso Outotec expects the market activity to remain at the current level, subject to a possible worsening of the Covid-19 pandemic. According to its disclosure policy, Metso Outotec’s market outlook describes the expected sequential development of market activity during the following
Slide 53: We will deliver shareholder value through various means
We will deliver shareholder value through various means Growth Delivery of synergies Reduction of volatility Improving profitability Offering competitive Strengthening of dividend balance sheet
Slide 54: Metso Outotec investment highlights
Metso Outotec investment highlights Comprehensive Strong Aftermarket Industry leader in Industry Leader Offering Presence & technology and Capability R&D We have created a stronger platform in an industry that is transforming through consolidation, digitalization and an increased focus on sustainabi
Slide 55: mogroup.com
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