Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (October 2022)
65 slides from Metso's investor presentation, October 2022
Slide 1: Investor presentation October 2022
Investor presentation October 2022
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 – Enabling sustainable modern life
Metso Outotec – 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, innovati
Slide 4: Enabling sustainable modern life
Enabling sustainable modern life 4.2 50+ VISION: To be customers’ number one billion euro countries we choice for sustainable use of sales in 2021 operate in Earth’s natural resources. Together we deliver service, reliability, innovation and results – safely. 15,600+ 90+ employees nationalities 30 l
Slide 5: Our businesses
Our businesses Aggregates Minerals Metals Services Consumables Crushing and Equipment, process Process Spare parts, Comprehensive screening equipment islands, and plants for technologies, refurbishments and offering of wear for the production of minerals processing solutions, and professional servic
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 Outotec investment highlights
Metso Outotec 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 Outotec key financials 2021
Metso Outotec key financials 2021 Sales Sales by segment Sales by geography EUR 4.2 billion 12% Aggregates 15% Europe 28% Minerals 28% North and Central Metals America 16% Asia Pacific Planet Positive sales South America 20% and Africa EUR 592 million 60% 21% Middle-East and India Services share of
Slide 9: Strategy implementation via TOP Priorities
Performance culture Financial performance Progress: 70 % Progress: 60 % Strategy implementation via TOP Priorities Tier-1 company Sustainability Customer success Progress: 80 % Progress: 50 % 9
Slide 10: Meeting our financial targets
Meeting our financial targets Q3/22: Baa2/ 14.8% BBB- Adjusted EBITA Maintaining margin of investment- >15% grade credit over the cycle rating 2021: On 68% track Dividend payout of Progress in sustainability at least in alignment with the 50% 1.5°C of earnings per share 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 For best end result, process use knowledge businesses an image that is 16:9 • Standardized and pre- • Pro
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: Action taken in Metals & Recycling
Action taken in Metals & Recycling • Metals strategic review expected to complete in Q1/23 • Hydrometallurgy moved to Minerals • Waste Recycling business divestment completed in Dec 2021 • Metals Recycling business divestment completed in June 2022 14
Slide 15: 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 16: 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 17: 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 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: Building an industry leader
Building an industry leader Strong platform Leading position to grow and in technology and create value sustainability Business model Self-help reducing volatility improving profitability 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 Up to 5% of the world's energy consumption is used in comminution Around 1% of the worlds power • We must improve our sustainability performance throughout the value chain runs through our • Our custom
Slide 22: We have ambitious goals that target limiting global warming to 1.5 degrees
We have ambitious goals that target limiting global warming to 1.5 degrees We are committed to Science-Based Targets • Corporate Knights 100 most sustainable companies list • CDP ratings: A - for climate change leadership, B - for tackling water security • CDP Supplier Engagement Leaderboard 22
Slide 23: Helping our customers to solve their sustainability challenges
Helping our customers to solve their sustainability challenges Climate change Planet Positive offering Water Footprint Net zero by 2030 Circular economy Integrated Policies and in strategy regulations 23
Slide 24: Our handprint is significantly bigger than our footprint
Our handprint is significantly bigger than our footprint CO2 Handprint** in 2021 CO2 Footprint* in 2021 10.3 million <1 million tonnes tonnes *Footprint = emissions generated in production, logistics, **Handprint = emissions avoided in customer operations across purchased goods and services as well
Slide 25: Targeting a net-zero footprint
Targeting a net-zero footprint CO2 emissions in own Logistics CO2 Spend from suppliers with operations emissions Science-Based emissions targets Net-zero -20% 30% by 2030* by 2025 * by 2025 -58% in 2021 -18% in 2021 10.1% in 2021 * Baseline 2019. 2021 figures as published in the Half-year 2022 repor
Slide 26: Making an environmental impact with our Planet Positive offering
Making an environmental impact with our Planet Positive offering Customer benefits: • Energy efficiency • Carbon efficiency Over 100 Planet Positive Planet Positive is a • Optimized for using renewable energy products competitive advantage • Water efficiency • Less pollution • Reduced embedded carbo
Slide 27: 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 28: 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 29: 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 30: Strong innovation and R&D power
Strong innovation and R&D power 15+ 70 30 95% 6,800+ million euros New Planet Investment in R&D centers, R&D project Patents Positive launches research and co-creating spend with in 2021 development in and customizing sustainability 2021 solutions to targets in 2021 customers 30
Slide 31: Uncompromised safety in offering and operations
Uncompromised safety in offering and operations Safe and responsible supply chain LTIFR* (2021) 1.1 Long-term target Zero harm TRIFR** (2021) Health and safety Safe products Safe and responsible 3.2 of people and services supply chain Long-term target Zero harm • Safe and secure • Products designed
Slide 32: Our industry leading diverse group of professionals
Our industry leading diverse group of professionals Our largest countries People Our people Our people Chile 2,300 by geography by employee category Finland 2,300 Brazil 1,600 India 1,200 United States 1,000 Europe Blue collars China 970 South America Professionals Australia 870 Asia-Pacific Managem
Slide 33: 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 34: Metso Outotec leadership team
Metso Outotec leadership team Extended Metso Outotec Executive Team President & CEO Pekka Vauramo Metso Outotec CFO’s office Legal & Compliance HR Executive Eeva Sipilä Nina Kiviranta Carita Himberg Team Aggregates Minerals Metals Services Consumables Markku Simula Markku Teräsvasara Piia Karhu Sami
Slide 35: Our offering
Our offering Metso:Outotec
Slide 36: 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 37: 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 38: 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 39: Customers benefit from a global network of over 200 distributors
Customers benefit from a global network of over 200 distributors Nordics 11 Canada Russia & CIS 8 Europe 5 China 47 36 USA New distributors 56 Middle East in 2021 Mexico & Central America 6 Asia Pacific 12 Africa 18 42 Pacific Rim 11 Australasia 15 9 39
Slide 40: 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 40
Slide 41: 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 42: 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 43: Unparalleled expertise and unique portfolio of sustainable and intelligent solutions
Unparalleled expertise and unique portfolio of sustainable and intelligent solutions Global leader with combined offering portfolio; fragmented competition #1 #1 Grinding Separation Materials handling Plant Solutions Industry’s most comprehensive Maximized operations recovery. Transporting materials
Slide 44: 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 45: Advanced solutions from ore or concentrate to metal
Advanced solutions from ore or concentrate to metal Metso Outotec for metals >7 million tons of CO2 emissions avoided in 2021 by using Metso Outotec technologies Global leader in process Unique portfolio with best-in- Leading solutions for R&D focus on carbon-free technologies for metal and class te
Slide 46: 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 47: 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 48: Life Cycle Services - unique maintenance and optimization capabilities and process expertise
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 49: Our service solutions improve customers’ equipment and process efficiency sustainably
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 Outotec and retrofits installed base • Process optimizatio
Slide 50: 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 51: Not all spare parts are created equal
Not all spare parts are created equal Screening Metso Outotec 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 crusher
Slide 52: Q3/2022 Results
Q3/2022 Results Metso:Outotec
Slide 53: Record result in Q3/22
Record result in Q3/22 Strong market activity High sales growth Highest adjusted Continued EBITA margin progress in to date sustainability Cash flow affected by an increase in working capital 53
Slide 54: Group key figures
Group key figures EUR million % EUR million Q3/2022 Q3/2021 Change % Orders received* 1,401 1,649 -15 Sales 1,402 1,023 37 Adjusted EBITA 207 139 49 % of sales 14.8 13.6 – Operating profit 192 107 80 % of sales 13.7 10.5 – Earnings per share, continuing 0.16 0.09 78 operations, EUR Cash flow from op
Slide 55: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights • Orders received EUR 351 million (EUR 325 EUR million % million) ◦ Strong activity in North America ◦ Equipment +8%, services +8% • Sales EUR 362 million (EUR 293 million) ◦ Strong execution of the backlog ◦ Services share 33% (37%) • Adjusted EBITA EUR 57 mi
Slide 56: Minerals segment quarterly highlights
Minerals segment quarterly highlights • Orders EUR 907 million (EUR 1,121 million) EUR million % ◦ Solid market activity ◦ Comparable equipment orders +14% (adjusted for one large order and Russia) ◦ Services orders +26% • Sales EUR 896 million (EUR 650 million) ◦ Equipment +36% ◦ Services +39% ◦ Se
Slide 57: Metals segment quarterly highlights
Metals segment quarterly highlights • Orders received EUR 143 million (EUR 204 EUR million % million) ◦ Comparable order intake more than doubled (adjusted for one large order) • Sales EUR 144 million (EUR 81 million) ◦ Increased deliveries from backlog ◦ Services share 14% (12%) • Adjusted EBITA EU
Slide 58: Income Statement
Income Statement EUR million Q3/2022 Q3/2021 Q1-Q3/2022 Q1-Q3/2021 2021 Sales 1,402 1,023 3,861 2,958 4,236 EUR Adj. EBITA 207 139 519 384 547 Adj. EBITA, % 14.8 13.6 13.4 13.0 12.9 Operating profit* 192 107 319 295 425 Operating profit, % 13.7 10.5 8.3 10.0 10.0 Net financial expenses -16 -8 -47 -2
Slide 59: Balance Sheet
Balance Sheet EUR million Sep 30, 2022 Sep 30, 2021 Dec 31, 2021 EUR million Intangible assets 2,004 2,013 2,002 Total property, plant and equipment 410 366 373 Right-of-use assets 118 131 127 Other non-current assets 301 248 234 Inventories 1,887 1,236 1,269 Receivables (trade and other) 1,625 1,11
Slide 60: Cash flow affected by increase in working capital
Cash flow affected by increase in working capital EUR million Q3/2022 Q3/2021 Q1-Q3/2022 Q1-Q3/2021 2021 EUR million Profit for the period 131 76 195 222 342 Adjustments: Depreciation and amortization 39 41 116 124 167 Financial expenses, net 16 8 47 26 39 Income taxes 47 27 73 70 92 Other items 6 1
Slide 61: Financial position
Financial position • New two-year EUR 100 million term loan EUR million Sep 30, 2022 Sep 30, 2021 Dec 31, 2021 agreement Liquid funds 467 550 473 • Average interest rate of total loans and Net debt 690 563 470 derivatives 1.37% • Ratings: Gearing, % 30.1 26.5 20.9 ◦ S&P (February 2022): 'BBB-' long-
Slide 62: Portfolio development
Portfolio development Review of the Metals businesses expected to complete in Q1/23 Market active for small M&A ◦ Global Physical Asset Management acquired in September 62
Slide 63: Sustainability highlights in Q3/22
Sustainability highlights in Q3/22 Planet Positive launches during the quarter included: EUR million ◦ Next generation OKTOP® CIL Reactor for gold leaching and recovery ◦ NextGen Pelletizing™ concept supporting transition to green steel Recycling service of worn-out mill liners introduced: ◦ Reduces
Slide 64: Market Outlook
Market Outlook Market activity is expected to remain at the current level, with the mining market remaining strong and the aggregates market declining due to the expected softening of the European market. According to its disclosure policy, Metso Outotec’s market outlook describes the expected seque
Slide 65: Partner for positive change
Partner for positive change mogroup.com