Slide 1: Financial Statements Review 2016
~ > a “Financial Statements 2016 . . January 1 - December 31 Financial ; Statements Dy ce » ‘ | Review a 4a : We. ae? ; 206 ff. re oe See. Dmetso
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: Safety is an important driver for success
Safety is an important driver for success Improved safety performance supports productivity 14 400 Lost time incident frequency (LTIF) 2016 achievements 12 350 Total number of lost time incidents • Safety conversations by managers rolled 10 300 out corporate wide LTIF • Stronger focus on corrective
Slide 4: 2016 in brief
2016 in brief Fourth quarter 2016 • Challenging mining and oil & gas markets Orders received: EUR 672 million, -11% • Internally good progress in organic growth and development actions Sales: EUR 676 million, -10% • Restructuring continued to adapt to the market situation Adjusted EBITA margin: 9.4%
Slide 5: Strategic achievements in 2016
Strategic achievements in 2016 Distribution channels were developed and market was expanded New products were launched (MHC™ Hydrocyclones, UltraFine™ Screens, Life Cycle Services (LCS) package for the aggregates industry, N Series recycling equipment product range, Metso Metrics, NelesValvGuard, MD
Slide 6: Markets in Q4/16
Markets in Q4/16 Orders received totaled EUR 672 million, -11% • Mining (orders -11%): EUR million 500 - Services +1%, thanks to wears and spares Q4/2015 Q4/2016 - No large equipment orders 450 - Underlying demand for smaller equipment orders picked up slightly 400 343 346 • Aggregates (orders +20%)
Slide 7: Financial highlights in Q4/16
Financial highlights in Q4/16 % • Sales development EUR million 1,400 Adjusted EBITA margin 2016: 10.6% 14 - Minerals declined 9% due to mining - Flow Control declined 14% due to oil & gas 13.0 1,200 12.0 12 • Healthy services margins 1,000 10 • The lower adjusted EBITA resulted from 9.4 - lower vol
Slide 8: Board's dividend proposal EUR 1.05
Board’s dividend proposal EUR 1.05 EUR 3.0 2.5 2.0 1.5 1.00 1.05 1.05 1.05 1.0 0.5 0.0 2013 2014 2015 ** 2016 * EPS (Earnings per share) DPS (Dividend per share) • The proposed dividend totals EUR 157 million • 121% of earnings per share for 2017 8 © Metso * Board’s proposal for the AGM ** EUR 0.40
Slide 9: Financial performance
Financial performance Eeva Sipilä CFO
Slide 10: Minerals quarterly performance
Minerals quarterly performance • Aggregates and recycling sales stabilized EUR million 800 Adjusted EBITA margin 2016: 9.7% % 16 • Mining sales declined still 700 13.5 14 • Profitability weakened due to 600 12.1 12 - lower volumes and - project cost overruns and warranty costs of EUR 6 million. 500
Slide 11: Flow Control quarterly performance
Flow Control quarterly performance • Sales declined due to lower deliveries to oil & EUR million 250 Adjusted EBITA margin 2016: 15.1% % 25 gas and pulp & paper customers • Adjusted EBITA and adjusted EBITA margin 200 20 increased 16.6 • No notable restructuring costs booked for the 150 14.2 13.1 15
Slide 12: Volume decline biggest driver in profitability
Volume decline biggest driver in profitability EUR million 400 350 300 250 356 274 200 150 100 50 0 FY 2015 adjusted EBITA Volume Margin SG&A FX rates & Others FY 2016 adjusted EBITA Note: Graph is illustrative: Volume, margin and SG&A changes have been calculated with constant currencies. Currency
Slide 13: Q4 gross margin affected by adjustments and Minerals' overruns and warranties
Q4 gross margin affected by adjustments and Minerals’ overruns and warranties EUR million % EUR million % 350 32.9 35 250 25 30.0 30.3 31.2 28.4 28.3 29.2 29.2 29.2 28.4 20.1 19.4 20.9 300 27.9 27.2 30 18.6 19.8 19.4 19.6 20.0 200 18.4 18.1 20 17.0 17.7 250 25 252 240 261 150 15 200 211 222 235 224
Slide 14: Healthy cash flow and solid financial position
Healthy cash flow and solid financial position EUR million Q4/2016 Q4/2015 Change % 2016 2015 Change % Operating profit 44 67 -34 227 555* -59 Earnings per share, EUR 0.17 0.35 -53 0.87 2.95* -71 Free cash flow 97 59 64 339 341 -1 Dec 31, 2016 Dec 31, 2015 Return on equity (ROE), % 9.0 33.1* Return
Slide 15: Net working capital and capital employed
Net working capital and capital employed EUR million EUR Million 1,500 2,500 2,323 2,267 2,292 2,233 206 2,186 2,164 2,197 186 185 160 180 195 Other 577 193 1,000 486 476 2,000 482 450 459 464 Trade receivables 373 343 330 345 310 315 Tangible assets 331 645 598 609 592 588 550 500 487 Net working c
Slide 16: Outlook and backlog
Outlook and backlog Matti Kähkönen President and CEO
Slide 17: Order backlog
Order backlog EUR Million EUR million 2,000 1,400 1,780 1,735 1,672 Deliveries after 1,200 Deliveries after 2017 1,445 2016 1,500 1,402 1,411 1,399 1,290 1,268 1,300 1,305 1,320 1,000 1,000 800 Deliveries in 600 Deliveries in 2017 2016 500 400 0 200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016
Slide 18: Short-term market outlook for 2017
Short-term market outlook for 2017 Mining Aggregates Flow Control 45% of net sales of which 80% services* 25% of net sales of which 45% services* 25% of net sales of which 60% services* Equipment Services Equipment Services Equipment Services weak satisfactory good good satisfactory satisfactory Pre
Slide 19: Outlook for 2017
Outlook for 2017 Metso’s overall trading conditions are expected to be slightly better compared to 2016. Demand for our products and services is expected to develop as follows: • Remain weak for mining equipment and satisfactory for mining services, • Improve to good for aggregates equipment and ser
Slide 20: Save the date Metso Capital Markets Day
Save the date Metso Capital Markets Day Thursday, June 1, 2017 at Hilton Helsinki Airport Programme to include Presentations from CEO and CFO Business updates by business heads Breakout sessions with topical teams including extensive Q&A We will start with lunch and finish by 18:00 to allow fly in a
Slide 21: www.metso.com
www.metso.com company/metso metsoworld metsogroup metsoworld metsogroup
Slide 22: Appendix
Appendix
Slide 23: Sales by market area
Sales by market area EUR million EUR million 800 800 673 643 644 569 600 600 400 EUR million 400 800 667 200 608 200 600 0 0 400 Europe North 200 America EUR million EUR million 800 0 800 598 600 Asia-Pasific 600 521 400 339 400 246 200 200 0 0 Africa and South and Sales in 2015 Middle East Central
Slide 24: Orders by market area
Orders by market area EUR million 800 EUR million 641 800 670 701 600 556 600 400 400 200 200 EUR million 0 767 800 0 North 622 EUR million Europe 600 America 800 607 580 EUR million 400 600 800 200 400 600 0 200 400 278 264 Asia-Pasific 0 200 South and 0 Central Africa and Orders in 2015 America Mi
Slide 25: Key figures
Key figures EUR million Q4/2016 Q4/2015 Change % 2016 2015 Change % Orders received 672 758 -11 2,724 2,965 -8 Without currency effect -12 -6 Orders received, services business 442 441 0 1,741 1,879 -7 Without currency effect -1 -5 Sales 676 754 -10 2,586 2,923 -12 Without currency effect -11 -10 Sa