Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (April 2021)
56 slides from Metso's investor presentation, April 2021
Slide 1: Investor presentation April 2021
Investor presentation April 2021
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, 3.9 50+ and metals refining industries billion euro countries with globally. sales presence By improving our customers’ energy and water effi
Slide 4: Metso Outotec key financials – year 2020
Metso Outotec key financials – year 2020 Sales EUR million Sales by industry Sales by geography 3,897 11% 11% 20% 26% Services 26% share of sales 41% 52% Adjusted EBITA 63% 39% EUR million / % 448 / 11.5% Aggregates EMEA Minerals Americas Metals APAC
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 purpose - Enabling sustainable modern life
Our purpose - Enabling sustainable modern life
Slide 8: Tier One Priorities
Tier One Priorities Strategy implementation Integration and financial performance Customer centricity Sustainability Performance culture
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: 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 ongoing Supply footprint Customer centricity R&D • Ensuring scale and competitiveness • Improving on-time delivery • E
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 turnaround ongoing • Business scope and cost structure to be addressed • 15M annual savings announced in early March • Recycling business announced to be divested • Aluminium business divestment completed in April 2021
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 markets
…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 15,000+ people by geography 11% 13% 37% 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 Business development Carita Himberg Piia Karhu Services Aggregates Minerals Metals Recycling Consumables Markku Markku Simula Stepha
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: Q4/2020 results
Mme OOOO ¢ Q4/2020 results
Slide 39: Q4 in short
Q4 in short • Strong order intake in all segments • Performance of the Aggregates and Minerals segments healthy • Metals restructuring and turnaround actions started • Integration proceeded fast with EUR 65 million annual run rate of cost synergies achieved • New strategy and financial targets publi
Slide 40: Group Q4 key figures, IFRS
Group Q4 key figures, IFRS (comparison period illustrative combined) • Orders received EUR 1,304 million (EUR 1,045 million) • Sales EUR 977 million (EUR 1,087 million) • Adjusted EBITA EUR 103 million, or 10.6% of sales (EUR 138 million or 12.7%) • EBIT EUR 44 million, or 4.5% of sales (EUR 103 mil
Slide 41: Covid-19 impacts in Q4
Covid-19 impacts in Q4 • Overall negative impact continued due to lockdowns and widespread restrictions limiting travel and workforce mobility • The aggregates business, which faced the most rapid and negative impacts earlier, saw market activity normalizing • Good underlying activity in the mineral
Slide 42: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights EUR million % • Orders received EUR 363 million (EUR 274 million) o Activity improved in equipment business o Organic growth +38% o Strong contribution from McCloskey • Sales EUR 251 million (EUR 271 million) o Organic growth -2% o Low orders in previous quart
Slide 43: Minerals segment quarterly highlights
Minerals segment quarterly highlights EUR million % • Orders EUR 730 million (EUR 716 million) o Strong equipment orders o Services affected by Covid-19 o Currency impact -9% • Sales EUR 640 million (EUR 696 million) o Organically flat in constant currencies o Currency impact -8% o Services share 62
Slide 44: Metals segment quarterly highlights
Metals segment* quarterly highlights EUR million % • Orders received EUR 212 million (EUR 55 million) o Market activity improved towards the end of Q4 • Sales EUR 86 million (EUR 121 million) o Low order backlog from previous quarters • Adjusted EBITA EUR -9 million (EUR 21 million) o Too high fixed
Slide 45: IFRS Income Statement
IFRS Income Statement EUR million Q4/2020 1-12/2020 1-12/2019 Sales 977 3,319 2,819 Gross profit 232 889 821 Adj. EBITA 103 397 368 Adj. EBITA, % 10.6 11.9 13.0 Operating profit 44 239 316 Operating profit, % 4.5 7.2 11.2 Net financial expenses -19 -38 -33 Profit before taxes 26 201 282 Income taxes
Slide 46: Income Statement (illustrative combined)
Income Statement (illustrative combined) EUR million Q4/2020 Q4/2019 1-12/2020 1-12/2019 Sales 977 1,087 3,897 4,030 Adjusted EBITA 103 138 448 509 % of sales 10.6 12.7 11.5 12.6 Adjustments -22 -24 -97 -46 Operating profit 44 103 253 423 % of sales 4.5 9.4 6.5 10.5
Slide 47: Earnings per share, IFRS
Earnings per share, IFRS EUR million 2020 Profit for the period, continuing operations 149 Profit for the period 138 Adjustments 97 Earnings per share, continuing operations, EUR 1) 0.20 Earnings per share, EUR 1) 0.19 Earnings per share, EUR 2) 0.17 Number of shares on June 30, 2020 (thousand) 183,
Slide 48: IFRS Balance Sheet
IFRS Balance Sheet EUR million December 31, 2020 June 30, 2020 December 31, 2019 Intangible assets 1,994 2,062 723 Total property, plant and equipment 356 357 315 Right-of-use assets 132 138 89 Other non-current assets 223 251 282 Inventories 1,038 1,106 975 Receivables (trade and other) 1,083 1,094
Slide 49: Analysis of Cash Flow
Analysis of Cash Flow Metso Mnerals Metso Outotec, Metso Outotec, combined, EUR million Q4/2020 1-12/2020 1-12/2019 Profit for the period 15 138 223 Adjustments: 82 256 166 Depreciation and amortization 61 160 71 Financial expenses, net 19 38 34 Income taxes 5 58 69 Other items -2 0 -7 Change in net
Slide 50: Net working capital on December 31, 2020
Net working capital on December 31, 2020 EUR million
Slide 51: Financial position
Financial position • Committed and undrawn EUR million December 31, 2020 revolving credit facilities totaled EUR 790 million at the year end Liquid funds 537 Net debt 799 • EUR 300 million bond with a maturity of 7.5 years was issued in Gearing, % 39.2 November. The proceeds were Equity-to-assets ra
Slide 52: Integration proceeding fast and according to plan
Integration proceeding fast and according to plan • At the year end, an annual run rate of EUR 65 million had been reached, exceeding the earlier estimate of EUR 50 million • The main source of the synergies has been the restructuring of the organization • Run rate of EUR 120 million to be achieved
Slide 53: Market outlook
Market outlook Metso Outotec expects the market activity to improve, subject to the development 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 six-month period using th
Slide 54: 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 55: 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 56: Partner for positive change
fe OO © CO Partner for positive change