Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Q3 2020 Earnings Presentation
25 slides from Metso's earnings presentation, Oct 28, 2020
Slide 1: Q3/2020 interim report
October 28, 2020 Q3/2020 interim report Pekka Vauramo, President and CEO Eeva Sipilä, CFO
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: About this financial information
About this financial information • Under IFRS, the merger of Metso’s Minerals business and Outotec is treated as a reverse acquisition, where Metso Minerals is the accounting acquirer and Outotec the accounting acquiree. • In this interim report, the segment reporting is based on the new Metso Outot
Slide 4: Results in brief
Pekka Vauramo President and CEO Results in brief October 28, 2020
Slide 5: Q3/2020 highlights
Q3/2020 highlights • Market activity largely unchanged compared to the end of Q2 • Orders and sales affected by Covid-19 • Performance of the Aggregates and Minerals segments healthy • Integration has started quickly with good progress • EUR 31 million annual run rate of cost synergies achieved • Me
Slide 6: Group highlights in Q3, IFRS (comparison period illustrative combined)
Group highlights in Q3, IFRS (comparison period illustrative combined) • Orders received EUR 836 million (EUR 1,169 million) • Sales EUR 985 million (EUR 1,073 million) • Adjusted EBITA EUR 109 million, or 11.1% of sales (EUR 153 million or 14.3%) • EBIT EUR 47 million, or 4.8% of sales (EUR 126 mil
Slide 7: Covid-19 impacts in Q3
Covid-19 impacts in Q3 • Negative impact continued due to lockdowns affecting operations and widespread restrictions limiting travel and workforce mobility • Own operations have been running with additional health and safety measures without major disruptions since early June • Aggregates demand sta
Slide 8: Aggregates highlights
Aggregates highlights EUR million % 350 16 • Orders received EUR 232 million (EUR 211 million) 300 14 o Strong development in China 12 250 o Organic growth -14% due to Covid-19 10 o McCloskey impact on growth +29% 200 • Sales EUR 244 million (EUR 217 million) 8 150 o Organic growth -12% 6 o McCloske
Slide 9: Minerals highlights
Minerals highlights EUR million % 900 18 • Orders EUR 516 million (EUR 781 million) 800 16 o Major project orders in the comparison period o Project pipeline active but decision making slow 700 14 o Upgrades and modernization services orders low 600 12 o Currency impact -8% 500 10 • Sales EUR 634 mi
Slide 10: Metals & Recycling highlights
Metals & Recycling highlights EUR million % 250 25 • Orders received EUR 88 million (EUR 176 million) 20 200 o Slow decision-making on projects and 15 modernization services, pipeline unchanged o Large orders in the comparison period 150 10 • Sales EUR 107 million (EUR 152 million) 5 o Low order bac
Slide 11: Financials in detail
Eeva Sipilä CFO Financials in detail October 28, 2020
Slide 12: IFRS Income Statement
IFRS Income Statement EUR million Q3/2020 1-9/2020 1-9/2019 1-12/2019 Sales 985 2,432 2,179 2,976 Gross profit 243 676 644 858 Adj. EBITA 109 293 278 377 Adj. EBITA, % 11.1 12.0 12.8 12.7 Operating profit 47 193 247 325 Operating profit, % 4.8 7.9 11.3 10.9 Net financial expenses -9 -20 -23 -34 Prof
Slide 13: Income Statement (illustrative combined)
Income Statement (illustrative combined) EUR million Q3/2020 Q3/2019 1-9/2020 1-9/2019 Sales 985 1,073 3,011 3,054 Adjusted EBITA 109 153 344 378 % of sales 11.1 14.3 11.4 12.4 Operating profit 47 126 206 327 % of sales 4.8 11.7 6.9 10.7 Earnings per share*, EUR - - 0.15 - * based on the number of o
Slide 14: IFRS Balance Sheet
IFRS Balance Sheet EUR million September 30, 2020 June 30, 2020 December 31, 2019 Intangible assets 2,027 2,062 723 Total property, plant and equipment 353 357 315 Right-of-use assets 126 138 89 Other non-current assets 237 251 282 Inventories 1,098 1,106 975 Receivables (trade and other) 1,157 1,09
Slide 15: Analysis of Cash Flow
Analysis of Cash Flow EUR million 1-9/2020 1-12/2019 Profit for the period 123 223 Adjustments 175 166 Change in net working capital 112 -216 Financial income and expenses paid, net -21 -31 Income taxes paid -72 -100 Net cash flow from operating activities 317 43 Capital expenditure on fixed assets
Slide 16: Net working capital per September 30, 2020
Net working capital per September 30, 2020 EUR million October 28, 2020
Slide 17: Financial position
Financial position • Committed and undrawn EUR million September 30, 2020 revolving credit facilities totaled EUR 790 million at the end of Liquid funds 477 September Net debt 943 Gearing, % 47.0 • Outotec's EUR 150 million hybrid bond was repaid Equity-to-assets ratio, % 39.4 on July 31, refinanced
Slide 18: Integration, strategy and outlook
Pekka Vauramo President and CEO Integration, strategy and outlook October 28, 2020
Slide 19: Integration proceeding fast
Integration proceeding fast • Large majority of the nominations to the new organization had been made at the end of Q3 • Realization of the cost synergies is proceeding according to plan • At the end of Q3, an annual run rate of EUR 31 million had been reached • The main source of the synergies has
Slide 20: 10 November, 2020 RESTRICTED
10 November, 2020 RESTRICTED 20
Slide 21: Top priorities in strategy implementation
Top priorities in strategy implementation Performance culture Integration and financial performance Industry- leading company Sustainability Customer centricity October 28, 2020 21
Slide 22: New financial targets
New financial targets • Adjusted EBITA margin of >15% over the cycle • Maintaining investment grade rating • Dividend payout of at least 50% of earnings per share • Progress in sustainability in alignment with the 1.5 °C commitment October 28, 2020
Slide 23: Metals & Recycling update
Metals & Recycling update • Performance of Metals is unsatisfactory and disappointing • Metals businesses to focus on restructuring and turnaround during the next 12 months • Business scope and cost structure to be addressed • Recycling business to be divested as a result of portfolio assessment • T
Slide 24: Market outlook
Market outlook Metso Outotec expects the market activity to remain at the current level, subject to a possible worsening 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
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