Metso Corporation · OMXHEX:METSO

Metso — Outotec — Q3 2018 Earnings Presentation

18 slides from Metso's earnings presentation, Oct 31, 2018

  1. Slide 1: Good growth in order intake and sales, profitability improved and solid cashflow

    Good growth in order intake and sales, profitability improved and solid cashflow Interim Report Q1-Q3 2018 Sustainable use of Earth’s natural resources

  2. Slide 2: Market development

    Market development CEO Markku Teräsvasara 2 October 31 Interim Report Q1-Q3 2018 © Outotec – All rights reserved

  3. Slide 3: Min & Met market continued to develop positively, major investments slow

    Min & Met market continued to develop positively, major investments slow Demand Growth - Brownfield In both Major investments investments -Modernizations Capex & - Services - Energy Services opportunities - Decisions Metals+ slow - Copper, gold, lithium, iron, tin - Sulfuric acid 3 October 31 Interi

  4. Slide 4: Order intake and sales up, some impacts from supplier constraints

    Order intake and sales up, some impacts from supplier constraints MEUR MEUR MEUR MEUR 4 October 31 Interim Report Q1-Q3 2018 © Outotec – All rights reserved

  5. Slide 5: Q3: Order intake up 16%, service orders decreased by 4%, lack of large service orders

    Q3: Order intake up 16%, service orders decreased by 4%, lack of large service orders Americas 29 (32) % EMEA 49 (49) % APAC 22 (19) % M€ Order intake QoQ 400 300 Minerals processing technology to South America ~25 M€ 200 118 COPPER 124 100 153 111 0 Q3/2017 Q3/2018 Capex orders Service orders MEW M

  6. Slide 6: Key financials

    Key financials CFO Jari Ålgars 6 October 31 Interim Report Q1-Q3 2018 © Outotec – All rights reserved

  7. Slide 7: Sales grew 17%, profitability improved

    Sales grew 17%, profitability improved Q3 Q3 Q1-Q3 Q1-Q3 Change, In comparable EUR million 2018 2017 2018 2017 % currency, % Sales 320 274 939 803 17 22 Service sales 121 125 333 334 -0 6 Share of services in sales, % 38 46 36 42 Gross margin, % 23 24 23 23 * Adjusted EBIT 18 14 33 15 * Adjusted EBI

  8. Slide 8: Positive impacts from higher volumes and lower fixed costs; negative impacts from high impact cases and lower share of service

    Positive impacts from higher volumes and lower fixed costs; negative impacts from high impact cases and lower share of service 33 Negative margin impacts in 2018: • GM erosion in some projects 15 • Sales mix, lower service share aEBIT Q1-Q3/2017 Volume Margin and FX Fixed Costs aEBIT Q1-Q3/2018 8 10

  9. Slide 9: Continued good progress in Minerals Processing

    Continued good progress in Minerals Processing In comp. Minerals Processing Q1-Q3 Q1-Q3 Change, currency, EUR million 2018 2017 % % Order intake 535 487 10 16 Sales 540 467 16 23 Service sales 234 214 9 17 Sales and adjusted EBIT development by quarter Adjusted EBIT*) 55 41 350 Sales aEBIT*, % 20% 3

  10. Slide 10: Order intake and sales developed well, increased provisions impacted profitability in Metals, Energy & Water

    Order intake and sales developed well, increased provisions impacted profitability in Metals, Energy & Water In comp. Metals, Energy & Water Q1-Q3 Q1-Q3 Change, currency, EUR million 2018 2017 % % Order intake 417 351 19 23 Sales 398 336 19 22 Service sales 99 120 -18 -14 Sales and adjusted EBIT dev

  11. Slide 11: Financial situation stable, solid cashflow

    Financial situation stable, solid cashflow Q3 Q3 2018 2017 Net cash from operation activities 88 -7 Net interest-bearing debt*, EUR million -64 37 Gearing*, % -14 8 Equity-to-assets ratio*, % 39 40 Return on investment, %, LTM 4 -7 Return on equity, %, LTM 2 -10 Net working capital at the end of the

  12. Slide 12: Market outlook and guidance

    Market outlook and guidance CEO Markku Teräsvasara 12 October 31 Interim Report Q1-Q3 2018 © Outotec – All rights reserved

  13. Slide 13: Simplifying our organization and way of working – progressing as planned

    Simplifying our organization and way of working – progressing as planned • Simplified structure and streamlined global functions (July 1) • Reduction of 200 persons • Simplifying selected business processes continue • Some non-profitable operations discontinued • EUR 25 million savings, full impact

  14. Slide 14: Market outlook positive

    Market outlook positive New uses such as EVs support long-term view - Copper - Lithium - Cobalt - Nickel Solid market and complex ores offer attractive opportunities - New technology - Tailings Prospects in reprocessing several metals and energy Service - Copper, gold, opportunities in aluminum, zin

  15. Slide 15: Financial guidance for 2018 sales reiterated, aEBIT guidance narrowed

    Financial guidance for 2018 sales reiterated, aEBIT guidance narrowed The guidance for 2018 is based on the current order backlog as well as expected order intake excluding possible material additional costs related to the ilmenite smelter project as announced on October 26, 2018. • Sales are expect

  16. Slide 16: Achievements in our focus areas in Q1-Q3

    Achievements in our focus areas in Q1-Q3 Product Customer focus Service business Project excellence Our people competitiveness - Significant - Productization - Supply costs ‐ New partnerships for ‐ >300 service people improvement in advanced decreased for several large EPC deliveries trained and cer

  17. Slide 17: Status of the ilmenite smelter project, October 26

    Status of the ilmenite smelter project, October 26 • What is the problem in the project? • We have delivered our first ilmenite smelter with two large electric furnaces. • Process was not starting up as planned so the start-up of the furnace was safely discontinued • What does this mean for Outotec?

  18. Slide 18: OuUtotec Freese coe

    OuUtotec Freese coe

Outotec — Q3 2018 Earnings Presentation on 6ix