Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Q2 2020 Earnings Presentation
22 slides from Metso's earnings presentation, Aug 5, 2020
Slide 1: Q2 and half-year review 2020
August 5, 2020 Q2 and half-year review 2020 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. • The consolidated Metso Outotec balance sheet is reported as at the transactio
Slide 4: Results in brief
Pekka Vauramo President and CEO Results in brief August 5, 2020 4
Slide 5: Q2/2020 highlights
Q2/2020 highlights • Good overall performance during an exceptional quarter • Fast and comprehensive cost actions to mitigate the Covid-19 impact • Customer service continued through virtual and digital dialogue, such as webinars and in digital marketing channels. • Metso's partial demerger and Mets
Slide 6: Group highlights in Q2, pro forma
Group highlights in Q2, pro forma • Orders received EUR 976 million • Sales EUR 1,047 million • Adjusted EBITA EUR 143 million, or 13.5% of sales • Metso Minerals’ adjusted EBITA was EUR 110 million, or 14.6% of sales, and Outotec’s adjusted EBITA was EUR 31 million, or 10.5% of sales. • Net debt EU
Slide 7: Covid-19 impacts in Q2
Covid-19 impacts in Q2 • Negative impact continued due to lockdowns affecting operations and widespread restrictions limiting travel and workforce mobility • Aggregates equipment business most affected, except in China, with demand globally improving towards the end of June to about 75% compared to
Slide 8: Metso Minerals highlights
Metso Minerals highlights EUR million % 1 000 18 • Orders up 8% y-o-y to EUR 762 million 900 16 o McCloskey contributed 11%-points 800 14 o Services increased 1% 700 12 • Sales up 2% y-o-y to EUR 751 million 600 10 o McCloskey impact 10%-points 500 o Services increased 2% 400 8 6 • Adjusted EBITA im
Slide 9: Outotec Minerals Processing highlights
Outotec Minerals Processing highlights EUR million % 350 16 • Orders received EUR 159 million (255 million) 300 14 o No large mining equipment and service orders 12 o Spare part orders at healthy level 250 • Sales up 9% to EUR 214 million 200 10 o Strong backlog supported equipment deliveries 8 150
Slide 10: Outotec Metals Refining highlights
Outotec Metals Refining highlights EUR million % 180 40 • Orders received EUR 55 million (145 million) 160 20 o Customers postponed decision-making on projects and modernization services 140 0 • Sales EUR 80 million (122 million) 120 -20 o Decline due to lower backlog 100 -40 • Adjusted EBIT EUR 1 m
Slide 11: Financials in detail
Eeva Sipilä CFO Financials in detail August 5, 2020 11
Slide 12: IFRS Income Statement
IFRS Income Statement EUR million H1/2020 H1/2019 2019 Sales 1,447 1,416 2,976 Gross profit 433 415 858 Operating profit 145 166 325 Net financial expenses -10 -17 -34 Profit before taxes 135 149 292 Income taxes -36 -28 -69 Profit for the period 99 121 223 August 5, 2020 12
Slide 13: Income Statement, pro forma
Income Statement, pro forma Metso Minerals Outotec Metso Outotec Pro forma Metso Outotec carve-out historical Metso Outotec pro EUR million combined adjustments pro forma historical reclassified forma 1-12/2019 1-6/2020 1-6/2020 1-6/2020 1-6/2020 1-6/2020 Sales 1,447 579 2,026 1 2,027 4,132 Adjusted
Slide 14: IFRS Balance Sheet
IFRS Balance Sheet EUR million June 30, 2020 December 31, 2019 Intangible assets 2,062 723 Total property, plant and equipment 357 315 Right-of-use assets 138 89 Other non-current assets 251 282 Inventories 1,106 975 Receivables (trade and other) 1,094 916 Liquid funds 528 156 Assets, discontinued o
Slide 15: Analysis of Cash Flow
Analysis of Cash Flow Metso Minerals Metso Minerals Metso Minerals Outotec Outotec Outotec carve-out carve-out carve-out historical EUR million historical historical historical historical historical 1-12/2019 1-6/2020 1-6/2019 1-6/2020 1-6/2019 1-12/2019 Profit for the period 99 0 121 14 223 27 Adju
Slide 16: Net working capital per June 30, 2020
Net working capital per June 30, 2020 EUR million August 5, 2020 16
Slide 17: Financial position
Financial position • Committed and undrawn EUR million June 30, 2020 revolving credit facilities totaled EUR 790 million at the end of Liquid funds 528 June Net debt 913 Gearing, % 45.5 • Outotec's EUR 150 million hybrid bond was repaid Equity-to-assets ratio, % 38.9 on July 31, refinanced by a bank
Slide 18: Integration and outlook
Pekka Vauramo President and CEO Integration and outlook August 5, 2020 18
Slide 19: Synergies from the merger updated
Synergies from the merger updated • Cost synergy target increased to EUR 120 million (initially EUR 100 million). Annual run rate expected to fully materialize in the end of 2021 (initially in three years). EUR 50 million annual run rate expected already by the end of 2020. • Revenue synergy target
Slide 20: Integration work has started fast
Integration work has started fast • Minimum of 4 layers of organization in place, enough to execute the integration • 8 market area organizations in place compared to 23 in Metso Minerals and Outotec earlier • Office locations to decrease to around 150 from 190 previously • Strategy work ongoing Aug
Slide 21: Market outlook
Market outlook Metso Outotec expects the market activity to remain at the current level, being 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 foll
Slide 22: Partner for positive change
fe OO © CO Partner for positive change