Metso Corporation · OMXHEX:METSO
Metso — Investor Presentation (October 2023)
69 slides from Metso's investor presentation, October 2023
Slide 1: Investor presentation October 2023
Investor presentation October 2023
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 – Enabling sustainable modern life
Metso – Enabling sustainable modern life Megatrends Vision Top priorities Urbanization To be customers’ number one choice for sustainable Financial performance Electrification use of Earth’s natural resources. Together we deliver Customer success Sustainability service, reliability, innovation and r
Slide 4: Enabling sustainable modern life
Enabling sustainable modern life 5.3 45+ VISION: To be customers’ number one billion euro countries we choice for sustainable use of sales in 2022 operate in Earth’s natural resources. Together we deliver service, reliability, innovation and results – safely. 16,000+ 90+ employees nationalities 30 l
Slide 5: Our businesses
Our businesses Aggregates Minerals Service Consumables Metals Largest global Comprehensive Spare parts and Widest range of Smelting supplier of offer covering the professional products on the business part crushers whole process services market of the core; two other businesses will be sold 5
Slide 6: We will deliver shareholder value through various means
We will deliver shareholder value through various means Growth Delivery of synergies Reducing volatility Improving profitability Offering competitive Strengthening of dividend balance sheet 6
Slide 7: Metso investment highlights
Metso investment highlights Leading offering in Committed to aggregates and Industry leader in Strong aftermarket further mining with full sustainability and presence & improvement of flowsheet technology capability profitability 7
Slide 8: Metso key financials 2022
Metso key financials 2022 Sales Sales by segment Sales by geography EUR 5.3 billion 9% Aggregates 15% Europe 27% Minerals 23% North and Central Metals America 17% Asia Pacific Planet Positive sales South America 23% and Africa EUR 1,338 64% 22% Middle-East and India million Services share of sales A
Slide 9: Strategy implemented via TOP Priorities
Performance culture Financial performance Progress: 80 % Progress: 95 % Strategy implemented via TOP Priorities Industry leader Sustainability Customer success Progress: 80 % Progress: 60 % 9
Slide 10: Financial targets support our value creation
Financial targets support our value creation Adjusted EBITA- margin of Maintaining Q2/23: Baa2/ >15% 16.6% Investment Grade BBB over the cycle credit rating Dividend payout of at least Progress in sustainability in 50% 2022: alignment with the On of earnings per share 83% 1.5°C track commitment 10
Slide 11: 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 12: Broad range of sustainability initiatives
Broad range of sustainability initiatives EQUIPMENT AFTERMARKET CAPABILITIES • Planet Positive products • Recycling of consumables • Industry-leading metallurgical expertise Examples: Concorde Cell, • Significant increase of product Geminex and digital, hydro, lifetime • Supply chain battery chemica
Slide 13: Digitalization drives growth and aftermarket captivity
Digitalization drives growth and aftermarket captivity Focusing on Enabling creating Digital and Growth of automation Higher equipment and technologies customer aftermarket and value business capabilities Customer segment specific offerings Intelligent Fleet Process & operations equipment management
Slide 14: Aggregates market driven by the US
Aggregates market driven by the US Crushed stone price and production Aggregates capex expectations US production - 12m rolling (Mt) Japan price (index 2020=100) US price (index 2020=100) India price (index 2020=100) Index Mt 120 1 650 MEUR 115 1 500 12 000 +4% 110 1 350 10 000 +28% 8 000 105 1 200
Slide 15: Market outlook for key commodities remains healthy
Market outlook for key commodities remains healthy COMMODITY SUPPLY AND DEMAND PRICE DEVELOPMENT Mined Copper Supply LTM US$/t 12 000 Mined Copper Demand Mt Latest 4% Forecast 10 000 07/2022 24 8 000 4% Previous COPPER 22 Forecast 6 000 20 05/2022 4 000 18 2 000 16 0 2021 2022 2023 2024 2025 2026 20
Slide 16: Demand forecast for battery metals remains robust
Demand forecast for battery metals remains robust COMMODITY SUPPLY AND DEMAND EV BY UNIT SALES (M) Refined supply including secondary Penetration rate fct 05/22 (%) 350 kt Penetration rate fct 07/22 (%) Refined consumption +11% 300 +10% 250 EV share in total car sales, % (lhs) mn EV vehicles sold (r
Slide 17: Focus areas for acquired growth
Focus areas for acquired growth Products with Sustainable high aftermarket offering intensity Automation & Supply chain digitalization competitiveness 17
Slide 18: Becoming an industry leader
Becoming an industry leader Strong platform Leading position to grow and in technology and create value sustainability Business model Self-help reducing volatility improving profitability 18
Slide 19: Sustainability, R&D and people
Sustainability, R&D and people
Slide 20: Mining industry and equipment suppliers play an important role in addressing the climate challenge
Mining industry and equipment suppliers play an important role in addressing the climate challenge About 3-5% of the world’s power is used in comminution Around 1% of the worlds power • We must improve our sustainability performance throughout the value chain. runs through our • Our customers need o
Slide 21: We target limiting global warming to 1.5 degrees
We target limiting global warming to 1.5 degrees We are committed to Science-Based Targets • CDP ratings: A - for climate change leadership, B - for tackling water security • CDP Supplier Engagement Leaderboard 21
Slide 22: Helping our customers to solve their sustainability challenges
Helping our customers to solve their sustainability challenges Planet Positive offering Climate Water change Footprint Net zero by 2030 Circular Biodiversity economy Integrated in strategy 22
Slide 23: Our environmental footprint: Net-zero
Our environmental footprint CO2 emissions Logistics CO2 Spend from suppliers with in own operations emissions Science-Based emissions targets Net-zero –20% 30 % by 2030* by 2025* by 2025 – 60% in 2022 – 12% in 2022 19.8% in 2022 (compared to 2019) (compared to 2019) 23
Slide 24: Making an environmental impact with our Planet Positive offering
Making an environmental impact with our Planet Positive offering Sales totaled EUR 1.3 billion in 2022 (+51%) • Around 140 products • Demonstrably better than the industry benchmark • Growing faster than overall sales Customer benefits: • Energy efficiency • Carbon efficiency • Optimized for using r
Slide 25: Examples of our Planet Positive solutions
Examples of our Planet Positive solutions Minerals processing Energy- Energy efficient Concorde CellTM efficient Horizontal Mill for recovering fine modular In-pit Plant units for and ultra-fine crush and optimized particles with convey grinding minimized energy solutions circuit throughput and wate
Slide 26: Examples of our Planet Positive solutions
Examples of our Planet Positive solutions Spare and wear parts, upgrades and modernizations Truck body Optimized wear parts Repairs Lighter, more More efficient Extending payload & less processes the lifetime fuel per hauled Long lasting wears of customer ton Lower energy assets for consumption redu
Slide 27: Industry-leading service expertise with global network
Industry-leading service expertise with 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 des
Slide 28: Continuous product development for the benefit of customers
Continuous product development for the benefit of customers Close to 30 70 98 % 7 400+ Million euros New Planet Investment in R&D project Patents Positive launches R&D in 2022 spend with in 2022 sustainability targets in 2022 28
Slide 29: Uncompromised safety in offering and operations
Uncompromised safety in offering and operations Safe and responsible supply chain LTIFR* (2022) 1.1 Long-term target Zero harm TRIFR** (2022) Health and safety Safe products Safe and responsible 2.8 of people and services supply chain Long-term target Zero harm • Safe and secure • Products designed
Slide 30: Our industry leading diverse group of professionals
Our industry leading diverse group of professionals Our largest countries People Our people Our people Chile 2,800 by geography by employee category Finland 2,400 Brazil 1,600 Europe India 1,400 South America Blue collars China 1,000 Asia Pacific and Greater Professionals United States 960 China Man
Slide 31: Diversity & inclusion is the basis of everything we do
Diversity & inclusion is the basis of everything we do • We are committed to developing a workplace where diversity and inclusion is embedded and celebrated in our culture. • We believe that an inclusive environment where everyone can be their genuine selves makes our teams and our business stronger
Slide 32: Metso Leadership Team
Metso Leadership Team Extended Metso Leadership Team CEO Pekka Vauramo Metso CFO’s office Legal & Compliance HR Leadership Eeva Sipilä Nina Kiviranta Carita Himberg Team Aggregates Minerals Metals Services Consumables Markku Simula Markku Teräsvasara Piia Karhu Sami Takaluoma Heikki Metsälä Market A
Slide 33: Our offering
Our offering Metso
Slide 34: Aggregates to build modern societies
Aggregates to build modern societies Supplying equipment and services for a diverse customer base Customer benefits • Best cost, best availability, easy- to-buy, and easy-to-own solutions • Comprehensive range of brands and solutions • Less noise and dust in urban environments • Timely and reliable
Slide 35: Driven by sustainability and digitalization
Driven by sustainability and digitalization Crushers and screens • Mobile and portable machines and plants • Stationary crushing and screening plant systems Spares and wears • Spare and wear parts and upgrades Professional services Our equipment is Digital customer • Installation, inspections, plant
Slide 36: Multi-brand: Serving our customers' different needs
Multi-brand: Serving our customers’ different needs Aggregates recycling Aggregates Quarries Global brands & demolition contractors OEM business Nordtrack Lokotrack High performance crushing & screening solutions Mobile crushing, screening & recycling Aggregates recycling Aggregates Quarries Regiona
Slide 37: Minerals processing
Minerals processing Focus on smarter and more sustainable mining processes Faster speed of innovation Our customers Energy Water Agility New levels are focusing on: consumption stewardship through, for of reliability example, modularity 37
Slide 38: Presence in the whole ore to metals value chain
Presence in the whole ore to metals value chain Energy Water and circularity Emissions Exploration and mine planning Tailings management Metal product Hauling and Crushing and Grinding Refining conveying screening Separation Dewatering W E C R E A T E T H E B I G G E S T I M P A C T T H R O U G H O
Slide 39: Capturing the value of ore, responsibly
Capturing the value of ore, responsibly Leading offering for mining and minerals processing Broad offering Driving sustainable ranging from pre-feasibility flowsheets studies, engineering and An extensive range of Planet process equipment to complete Positive products continuously process islands an
Slide 40: Comprehensive expertise with a full portfolio of sustainable solutions
Comprehensive expertise with a full portfolio of sustainable solutions for all ore types and processes Grinding Separation Materials handling Plant Solutions Industry’s most comprehensive Maximizing recovery throughout Less maintenance, safer Unmatched performance and portfolio minerals’ processing
Slide 41: Innovation leader across the entire mining value chain
Innovation leader across the entire mining value chain Equipment and process performance with intelligent Planet Positive solutions Superior performance Optimal comminution process in beneficiation Reduced downtime Reduced energy costs Improved availability Unrivaled recovery Smart dewatering Proces
Slide 42: Generating value in battery minerals
Generating value in battery minerals 42
Slide 43: Batteries require multiple minerals
Batteries require multiple minerals Typical sourcing processes Typical battery minerals Hard rock Copper Cobalt Graphite Brines Lithium Nickel Manganese Battery Recycling (Black mass) 43
Slide 44: Lithium is the new gasoline!
Lithium is the new gasoline! Demand Scenario by 2040 (kt LCE*) Source - International Energy Agency 6,178 518 Other Sectors Estimates say that by EVs and Storage 2040 demand for Lithium CAGR 10% CAGR 15% may grow by over 5 660 1,287 414 1,988 518 2,453 414 2 039 1,500% 391 1 470 391 873 276 115 115
Slide 45: Our unique position in the industry
Our unique position in the industry Metso covers over 90% of the value chain From battery minerals extraction to refinement and recycling Mining & Chemical production Precursor Battery EVs Battery concentrates & metallurgy manufacturing production recycling Recycling: Towards a closed loop Circular
Slide 46: Segment's widest technology offering
Segment’s widest technology offering High-performance solutions throughout the value chain Improving the efficiency New exploration and Developing efficient and of existing brownfield new greenfield sites responsible processes mining and extraction with state-of-the-art for recycling and sites, plan
Slide 47: Our competitive advantage…
Our competitive advantage… … amidst fast-moving market expectations Strategic Valuable Resilient Sustainable • 90% coverage of • Ability to maximize • Resilient tools make • Environmental processes across the value of present for more resilient performance such the value chain operations plants as r
Slide 48: Advanced solutions from ore or concentrate to metal
Advanced solutions from ore or concentrate to metal Metso for metals Global leader in process Unique portfolio with best-in- Leading solutions for R&D focus on carbon-free technologies for metal and class technology and expertise decreasing customers’ CO2 production with innovative chemical industri
Slide 49: Leading process technology for metals producers
Leading process technology for metals producers Plants, equipment, and services Agglomeration Industries served Process solutions for • Base metals • Pelletizing • Iron & steel • Sintering • Precious metals • Light metals • Fertilizers Pyrometallurgy Sulphuric acid Process solutions for Process solu
Slide 50: Strong portfolio of metals processing technologies
Strong portfolio of metals processing technologies Acid plant process Calcining >650 completed acid plant >1,500 Rotary Kiln Installations deliveries for Minerals and Metals • High-efficiency gas cleaning Calcining & Roasting solutions Iron ore agglomeration • Largest Metallurgical Acid >400 Sinter
Slide 51: Life Cycle Services - unique maintenance and optimization capabilities
Life Cycle Services - unique maintenance and optimization capabilities and process expertise A market leader: Globally 500+ Life Cycle Services contracts Long-term solutions to help Common objectives: our customers exceed their performance targets through partnership Improved Highest safety, lowest
Slide 52: Our service solutions improve customers' equipment and process efficiency
Our service solutions improve customers’ equipment and process efficiency sustainably • Spare and wear parts Life Cycle Services • We produce solutions built to perform for the entire market, • Modernizations, not just for the upgrades Metso installed base and retrofits • Process optimization and co
Slide 53: Optimal wear solutions for the entire value chain
Optimal wear solutions for the entire value chain Crusher wear parts Loading and hauling Designed to the same Wide range of wear linings specifications and exacting covering chute, conveyor and standards as our crushing loading and hauling solutions equipment, ensuring equipment designed to optimize
Slide 54: Not all spare parts are created equal
Not all spare parts are created equal Screening Metso screen and feeder parts boast a strong design to suit tough operating conditions. Crushing Grinding Filtration Wide-ranging parts offering for A proven history of designing, Readily available parts, enabling gyratory, cone and jaw crushers, manuf
Slide 55: Q2 and Half-Year 2023 results
01 Q2 and Half- Year 2023 results
Slide 56: Q2/23 highlights
Q2/23 highlights Healthy market High sales growth activity New solutions and Record-high partnerships in profitability energy transition 56 July 20, 2023
Slide 57: Group key figures in Q2/23
Group key figures in Q2/23 Orders, sales and adj. EBITA EUR million % EUR million Q2/2023 Q2/2022 Change % Orders received 1,398 1,610 -13 Sales 1,483 1,295 15 Adjusted EBITA 246 155 59 % of sales 16.6 12.0 – Operating profit* 230 -13 – % of sales 15.5 -1.0 – Earnings per share, continuing 0.18 -0.0
Slide 58: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights EUR million % • Orders received EUR 330 million (EUR 363 million) ◦ Demand soft in Europe ◦ North America stable ◦ Equipment -8%, services -11% • Sales EUR 386 million (EUR 368 million) ◦ Healthy sales growth thanks to backlog ◦ Services share 28% (35%) • Adju
Slide 59: Minerals segment quarterly highlights
Minerals segment quarterly highlights EUR million % • Orders EUR 983 million (EUR 1,176 million) ◦ Healthy market activity ◦ Equipment orders -35% against a high comparison ◦ Services orders flat with growth in spare parts and consumables and lower orders for upgrades • Sales EUR 979 million (EUR 81
Slide 60: Metals segment quarterly highlights
Metals segment quarterly highlights EUR million % • Orders received EUR 85 million (EUR 71 million) ◦ Healthy customer activity; no large orders • Sales EUR 118 million (EUR 117 million) ◦ Increased deliveries from backlog ◦ Services share 12% (12%) • Adjusted EBITA EUR 14 million (EUR 11 million) ◦
Slide 61: Group Income Statement
Group Income Statement EUR million Q2/2023 Q2/2022 Q1-Q2/2023 Q1-Q2/2022 2022 EUR Sales 1,483 1,295 2,901 2,459 5,295 Adj. EBITA 246 155 461 312 731 Adj. EBITA, % 16.6 12.0 15.9 12.7 13.8 Operating profit* 230 -13 426 127 504 Operating profit, % 15.5 -1.0 14.7 5.1 9.5 Net financial expenses -20 -11
Slide 62: Group Balance Sheet
Group Balance Sheet EUR million Jun 30, 2023 Dec 31, 2022 EUR million Intangible assets 1,947 1,972 Total property, plant and 435 407 equipment Right-of-use assets 114 115 Other non-current assets 288 262 Inventories 2,008 1,846 Receivables (trade and other) 1,755 1,551 Liquid funds 365 601 TOTAL AS
Slide 63: Working capital
Working capital EUR million EUR million 63 July 20, 2023
Slide 64: Cash flow
Cash flow EUR million Q2/2023 Q2/2022 Q1-Q2/2023 Q1-Q2/2022 2022 EUR million Profit for the period 152 -24 286 64 301 Adjustments: Depreciation and amortization 39 39 78 77 156 Financial expenses, net 20 11 32 31 63 Income taxes 53 -5 99 26 113 Other items 15 11 22 14 65 Total adjustments 127 56 231
Slide 65: Financial position
Financial position EUR million Jun 30, 2023 Jun 30, 2022 Dec 31, 2022 • Ratings: ◦ S&P Global upgraded its credit rating to 'BBB' with Liquid funds 365 451 601 stable outlook on April 24, 2023 ◦ Moody’s (April 2021; confirmed on May 2, 2023): Net debt 840 617 684 ‘Baa2’ long-term rating with stable
Slide 66: ESG highlights in Q2/2023
ESG highlights in Q2/2023 Planet Positive sales grew 43% y-o-y EUR million • Good order pipeline of generally small and medium-sized orders Supplier engagement program progressed well • 23% of supplier spend is with suppliers that have committed to SBT's or similar climate targets Positive trend con
Slide 67: Market Outlook
Market Outlook Metso expects the market activity to remain at the current level in Minerals and to slightly decline in Aggregates. In its previously published outlook Metso expected the overall market activity to remain at the current level, including the normal seasonality in the aggregates market.
Slide 68: Events after Q3
Events after Q3 Segment reporting update and restated information publishing based on the new structure Tedd Engineering acquisition EUR 85 million contract for delivery of a copper concentrator to Kazakhstan 68
Slide 69: Partner for positive change
Partner for positive change metso.com