Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (June 2021)
56 slides from Metso's investor presentation, June 2021
Slide 1: Investor Presentation June 2021
Investor Presentation June 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: 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 5: 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 6: 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 7: 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 8: Enabling sustainable modern life
Our purpose Enabling sustainable modern life
Slide 9: 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 10: Our purpose - Enabling sustainable modern life
Our purpose - Enabling sustainable modern life
Slide 11: Tier One Priorities
Tier One Priorities Strategy implementation Integration and financial performance Customer centricity Sustainability Performance culture
Slide 12: 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 13: 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 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 • Aluminium business divestment completed in April 2021 • Recycling business announced to be divested
Slide 21: 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 22: …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 23: …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 24: …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 25: 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 26: Planet Positive – our 1.5°C journey
Planet Positive – our 1.5°C journey • We are committed to limiting global warming to 1.5°C with Science Based Targets • Our ecological handprint is significantly bigger than our footprint • Planet Positive portfolio focuses on the most impactful technologies (>100) in our current offering • Sustaina
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 32: 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 33: Metso Outotec global team of professionals
Metso Outotec global team of professionals Our 15,000+ people by geography 11% 13% 36% 13% 27% Europe South America Asia-Pacific and Greater China North and Central America Africa, ME and India
Slide 34: 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 Business HR development, Carita Himberg BL Metals Recycling Piia Karhu Minerals BL Waste Aggregates Metals Services Consumables Markku
Slide 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: Q1/2021 results
Memo OO0O00 ¢ Q1/2021 results
Slide 42: Q1 in short
Q1 in short • Market activity increased • Improved profitability in Aggregates and Minerals • Metals reorganization completed • EUR 83 million run rate of integration cost synergies achieved • Planet Positive is our new all-encompassing sustainability approach April 23, 2021
Slide 43: Group Q1 key figures, IFRS
Group Q1 key figures, IFRS (comparison period illustrative combined) • Orders received EUR 1,102 million (EUR 1,084 million) • Sales EUR 925 million (EUR 947 million) • Adjusted EBITA EUR 115 million, or 12.4% of sales (EUR 95 million or 10.0%) • EBIT EUR 91 million, or 9.8% of sales (EUR 68 million
Slide 44: Covid-19 impacts in Q1
Covid-19 impacts in Q1 • Restrictions on workforce mobility and limited access to customer sites have affected especially the services business • Some impact also on the decision-making and commissioning related to customers’ large investments • Our own operations have been running with additional h
Slide 45: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights EUR million % • Orders received EUR 356 million (EUR 290 million) o Organic growth +27% o Driven by equipment o Strongest markets Europe and North America • Sales EUR 265 million (EUR 244 million) o Organic growth +13% o Order growth gradually visible • Adjust
Slide 46: Minerals segment quarterly highlights
Minerals segment quarterly highlights EUR million % • Orders EUR 645 million (EUR 710 million) o Improved market activity, no large orders o Services affected by Covid-19 o Currency impact -6% • Sales EUR 566 million (EUR 596 million) o Organic growth +1% o Services share 68% (65%) o Some logistical
Slide 47: Metals segment quarterly highlights
Metals segment quarterly highlights EUR million % • Orders received EUR 101 million (EUR 84 million) o Improved market activity • Sales EUR 95 million (EUR 107 million) o Timing of deliveries from backlog • Adjusted EBITA EUR -1 million (EUR 7 million) o Low volume • Turnaround actions visible in co
Slide 48: Income Statement (illustrative combined)
Income Statement (illustrative combined) EUR million Q1/2021 Q1/2020 1-12/2020 Sales 925 947 3,897 Gross profit 263 270 1,035 % of sales 28.4 28.5 26.6 SG&A expenses -170 -186 -748 Adjusted EBITA 115 95 448 % of sales 12.4 10.0 11.5 Adjustments -6 -15 -97 Operating profit 91 68 253 % of sales 9.8 7.
Slide 49: IFRS Income Statement
IFRS Income Statement EUR million Q1/2021 1-12/2020 Sales 925 3,319 Adj. EBITA 115 397 Adj. EBITA, % 12.4 11.9 Operating profit 91 239 Operating profit, % 9.8 7.2 Net financial expenses -7 -38 Profit before taxes 84 201 Income taxes -21 -52 Profit for the period, continuing operations 63 149 Profit
Slide 50: IFRS Balance Sheet
IFRS Balance Sheet EUR million March 31, 2021 December 31, 2020 Intangible assets 1,994 1,994 Total property, plant and equipment 361 356 Right-of-use assets 136 132 Other non-current assets 252 223 Inventories 1,113 1,038 Receivables (trade and other) 1,079 1,083 Liquid funds 516 537 Assets held fo
Slide 51: Analysis of Cash Flow
Analysis of Cash Flow EUR million Q1/2021 1-12/2020 Profit for the period 59 138 Adjustments: 76 256 Depreciation and amortization 39 160 Financial expenses, net 7 38 Income taxes 20 58 Other items 10 0 Change in net working capital 30 193 Net cash flow from operating activities before 165 587 finan
Slide 52: Net working capital on March 31, 2021
Net working capital on March 31, 2021 EUR million April 23, 2021
Slide 53: Financial position
Financial position • Committed and undrawn EUR million March 31, 2021 December 31, 2020 revolving credit facilities totaled EUR 790 million at the end of Liquid funds 516 537 March Net debt 675 799 • EUR 100 million term loan, with Gearing, % 31.7 39.2 maturity in 2022, was repaid Equity-to-assets r
Slide 54: Integration and synergies proceeding according to plan
Integration and synergies proceeding according to plan • In cost synergies, a run rate of EUR 83 million was reached • 75% of realized synergies come from the restructuring of the organization and the rest from facilities, IT, and procurement • Realized revenue synergies as sales totaled EUR 11 mill
Slide 55: 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 56: mogroup.com
Partner for positive change r+) (y) (in) €_smogroup.com