Metso Corporation · OMXHEX:METSO
Metso — Investor Presentation (August 2024)
61 slides from Metso's investor presentation, August 2024
Slide 1: Investor presentation August 2024
Investor presentation August 2024
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 investment highlights
Metso investment highlights Leading offering in Committed to Industry leader in Strong aftermarket aggregates and further performance sustainability and presence & minerals processing improve technology capability 3
Slide 4: Enabling sustainable modern life
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 results –
Slide 5: Our businesses
Our businesses Aggregates Minerals Metals Services Consumables Crushing and Comprehensive Process Spare parts, Comprehensive screening equipment solutions for minerals technologies, refurbishments and offering of wear for aggregates processing, solutions, and professional services parts for mining h
Slide 6: Key numbers in 2023
Key numbers in 2023 Sales by geography Sales EUR 5.4 ~50 countries 16 % 20 % Europe billion North and Central America 21 % Asia Pacific 23 % South America Adjusted EBITA Africa, Middle- EUR 887 million 17,000+ 20 % East and India employees 16.5% Sales by segment 25% Planet Positive sales EUR 1.4 100
Slide 7: Strategy implemented via priority areas
Strategy implemented via priority areas Customer Sustainability Performance Financial success culture performance 7
Slide 8: Positive development in strategic priorities
eNPS Positive development in strategic priorities 54 Engaged people ➔ customer value ➔ business results Top 10%** 100 18% 16.5% 16.6% 16.0% 90 16% 14.4% 80 12.9% 13.1% 14% 70 12% 60 55 54 56 51 10% 50 43 8% 40 37 6% 30 4% 20 10 2% 0 0% Q4 2021 Q2 2022 Q4 2022 Q2 2023 Q4 2023 Q2 2024 *Indeksoitu eNPS
Slide 9: Financial targets support our value creation
Financial targets support our value creation Adjusted EBITA- margin of Maintaining Q2/24: Baa2/ >17% 16.9% Investment Grade BBB over the cycle credit rating Dividend payout of at least Progress in sustainability in 50% 2023: alignment with the On of earnings per share 55% 1.5°C track commitment 9
Slide 10: Profitability has strengthened after the merger
Profitability has strengthened after the merger EUR million Completion of merger Target over 17% 8,000 16.5% % 16 14.4% 7,000 12.9% 14 6,000 11.5% 11.2% 12 5,000 10 4,000 5,390 8 6.7% 4,970 3,000 4,159 4,132 4,236 6 3,897 2,000 4 1,000 2 0 0 2018 2019 2020 2021 2022 2023 Sales Adjusted EBITA % Note:
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: Low construction activity in Europe is reflected in aggregates production
Low construction activity in Europe is reflected in aggregates production 115 110 US Euro area France Germany Canada Construction 105 projects 100 volume 95 (2022=100) 90 85 01/2022 07/2022 01/2023 07/2023 09/2023 20 Euro area US 15 10 Aggregates 5 production 0 (y-o-y %) -5 -10 -15 01/2022 07/2022 0
Slide 15: Large aggregates producers' capex outlook has been stable
Large aggregates producers’ capex outlook has been stable, infrastructure projects driving construction demand Bn EUR Current year Next three years 14,4 14,2 Aggregates customers* 14,0 +1% Capex 13,8 estimates 4,4 +1% 4,2 4,0 02/2023 04/2023 06/2023 08/2023 10/2023 12/2023 02/2024 Bn EUR 40 Global 3
Slide 16: Copper price to increase, while iron ore and gold face volatility
Copper price to increase, while iron ore and gold face volatility Last 12 M price development Price forecast and market balance Prices slip on a stronger USD 15,000 01/24 Price Forecast 11/23 Price Forecast Market Balance 3,000 10 000 2,500 Mine production cuts 9,650 2,000 10,000 8,600 9,100 8,457 8
Slide 17: Battery metals: Tumbling prices dampen overall sentiment
Battery metals: Tumbling prices dampen overall sentiment, yet strong policy support and environmental measures to drive market activity Last 12 M price development Price forecast, market balance, EV sales 50,000 01/24 Price Forecast 11/23 Price Forecast Market Balance 200 60,000 100 50,000 40,000 40
Slide 18: Focus areas for acquired growth
Focus areas for acquired growth Products with Sustainable high aftermarket offering intensity Automation & Supply chain digitalization competitiveness 18
Slide 19: Becoming an industry leader
Becoming an industry leader Strong platform Leading position to grow and in technology and create value sustainability Business model Continuous supporting profitability achievement of improvement targets 19
Slide 20: Sustainability, R&D and people
Sustainability, R&D and people
Slide 21: 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 22: We are supporting our customers in their sustainable development
We are supporting our customers in their sustainable development Planet Positive offering Energy transition and Water and decarbonisation circularity Supply chain carbon footprint Biodiversity Safety Integrated in strategy 22
Slide 23: Making an environmental impact with our Planet Positive offering
Making an environmental impact with our Planet Positive offering Sales totaled EUR 1.4 billion in 2023 • Around 140 products • Demonstrably better than the industry benchmark • Growing faster than overall sales Customer benefits: • Energy efficiency • Carbon efficiency • Optimized for using renewabl
Slide 24: 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 25: 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 26: 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 • Deep understanding of customer process, product design, and technology • A world-class manufacturing network • Efficient logistic network in all main custom
Slide 27: Strong innovation and R&D power
Strong innovation and R&D power ~10 73 ~30 99.8% 7,800+ million euros New Planet Investment in Locations with R&D, R&D project Patents Positive launches research and testing or laboratory spend with in 2023 development in capabilities sustainability 2023 targets in 2022 27
Slide 28: Our industry leading diverse group of professionals
Our industry leading diverse group of professionals Key numbers in the end of 2023 Our people by geography Our people by employee category Countries People Finland 2,790 Chile 2,353 Brazil 1,696 14% 13% Europe India 1,659 31% 33% South America China 1,058 13% Blue collars Asia Pacific and United Sta
Slide 29: Extended Metso Leadership Team (EMLT)
Extended Metso Leadership Team (EMLT) The EMLT consists of the MLT and MA heads President and CEO Pekka Vauramo Metso Leadership CFO’s office Legal & Compliance HR Eeva Sipilä Nina Kiviranta Carita Himberg Team (MLT) Aggregates Minerals Metals Services Consumables Markku Simula Markku Teräsvasara Pi
Slide 30: Our offering
Our offering Metso
Slide 31: Aggregates to build modern societies
Aggregates to build modern societies Equipment and services for diverse customers Our customers • Large international and smaller local companies and contractors in the aggregates industry Customer benefits • Best cost, best availability, easy-to-buy, and easy-to-own solutions • Comprehensive range
Slide 32: Driven by electrification and digitalization
Driven by electrification 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 Electrifying our equipment Digital customer experience • Installati
Slide 33: Multi-brand: Serving our customers' different needs
Multi-brand: Serving our customers’ different needs Crushing, recycling & Aggregates Quarries Global brands demolition contractors OEM business Nordtrack Lokotrack High performance crushing & screening solutions Mobile crushing, screening & recycling Crushing, recycling & Aggregates Quarries Regiona
Slide 34: 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 example, of reliability modularity 34
Slide 35: Presence in the whole ore-to-metals value chain
Presence in the whole ore-to-metals value chain 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 U R C U S T O M E R S 35
Slide 36: 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 37: 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 38: 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 39: Generating value in battery minerals
Generating value in battery minerals
Slide 40: 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) 40
Slide 41: 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 42: 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 43: 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 44: Advanced solutions from ore or concentrate to metal
Advanced solutions from ore or concentrate to metal 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 industries for throughout
Slide 45: 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 46: 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 47: 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 48: 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 49: Q2/2024 results
01 | - Q2/2024 . results Metso
Slide 50: Q2/24 highlights
Q2/24 highlights Market activity in line Headwind in with expectations orders and sales Resilient adjusted Positive EBITA margin development of 16.9% in cash flow July 24, 2024
Slide 51: Group Q2/2024 key figures
Group Q2/2024 key figures Group orders, sales and adj. EBITA EUR million EUR million Q2/2024 Q2/2023 Change % Orders received 1,162 1,344 -14 Sales 1,214 1,396 -13 Adjusted EBITA 205 238 -14 % of sales 16.9 17.1 – Operating profit 195 222 -12 % of sales 16.1 15.9 – Earnings per share, continuing 0.1
Slide 52: Aggregates profitability remains solid
Aggregates profitability remains solid EUR million • Orders received EUR 314 million (EUR 330 million) ◦ Market activity on Q1 level; lower y-o-y ◦ North American mobile equipment market challenging ◦ Equipment orders -5%, services -3% • Sales EUR 331 million (EUR 386 million) ◦ Decline due to lower
Slide 53: Minerals showing resilient performance
Minerals showing resilient performance EUR million • Orders EUR 847 million (EUR 1,014 million) ◦ Unchanged market activity with delayed customer decision-making ◦ Equipment orders -34% ; services -6% • Sales EUR 883 million (EUR 1,010 million) ◦ Services -7%, equipment -22% ◦ Services share 66% (62
Slide 54: Group Income Statement
Group Income Statement EUR million Q2/2024 Q2/2023 Q1-Q2/2024 Q1-Q2/2023 2023 EUR Sales 1,214 1,396 2,431 2,729 5,390 Adj. EBITA 205 238 405 449 887 Adj. EBITA, % 16.9 17.1 16.7 16.5 16.5 Operating profit 195 222 383 416 805 Operating profit, % 16.1 15.9 15.8 15.2 14.9 Net financial expenses -16 -20
Slide 55: Group Balance Sheet
Group Balance Sheet EUR million Jun 30, 2024 Jun 30, 2023 Dec 31, 2023 EUR million Goodwill and intangible assets 1,873 1,947 1,886 Property, plant and equipment 511 435 472 Right-of-use assets 109 114 114 Other non-current assets 254 288 271 Inventories 1,978 2,008 1,951 Receivables (trade and othe
Slide 56: Operating cash flow improved
Operating cash flow improved EUR million Q2/2024 Q2/2023 Q1-Q2/2024 Q1-Q2/2023 2023 EUR million Profit for the period 129 152 250 286 546 Adjustments: Depreciation and amortization 40 39 82 78 158 Financial expenses, net 16 20 38 32 80 Income taxes 48 53 91 99 199 Other items 21 15 15 22 15 Total ad
Slide 57: Financial position
Financial position • Ratings: EUR million Jun 30, 2024 Jun 30, 2023 Dec 31, 2023 ◦ S&P Global: 'BBB' with stable outlook (June 17, 2024) Liquid funds 348 365 638 ◦ Moody’s: ‘Baa2’ long-term rating with stable outlook (May 13, 2024) Net debt 1,036 840 884 • Average interest rate of loans and derivati
Slide 58: Good progress in most sustainability KPIs
Good progress in most sustainability KPIs Logistics CO2 Spend from suppliers Planet Positive Net zero emissions with science-based sales to grow faster CO2 emissions in own emissions targets than overall operations** by -20% sales 2030 by 2025 30% by 2025 H1/2024*: H1/2024: H1/2024: H1/2024: EUR 1,4
Slide 59: Portfolio development
Portfolio development Market active for small M&A ◦ An agreement to acquire Jindex Pty Ltd, a privately owned Australian company specializing in valves and process flow control, signed in July 2024 59
Slide 60: Market Outlook
Market Outlook Metso expects the market activity in both Minerals and Aggregates will remain at the current level. In its previously published outlook, Metso expected the market activity in both Minerals and Aggregates to remain at the current level. According to the company's disclosure policy, Met
Slide 61: Partner for positive change
Partner for positive change metso.com