Metso Corporation · OMXHEX:METSO

Metso — Outotec — FY2012 Earnings Presentation

29 slides from Metso's earnings presentation, Feb 7, 2013

  1. Slide 1: FY 2012 Financial Statements Review

    FY 2012 Financial Statements Review Pertti Korhonen President and CEO February 7, 2013 © Outotec - All rights reserved

  2. Slide 2: 2012 – passing the EUR 2bn milestone - focus areas progressed well

    2012 – passing the EUR 2bn milestone - focus areas progressed well Objective Status Order intake, scalability and execution excellence to ensure continuous growth Value based pricing, supply savings and scalability to ensure profitability improvement Solution offering and services to strengthen earn

  3. Slide 3: Financial Statements Review 2012

    Financial Statements Review 2012 © Outotec - All rights reserved

  4. Slide 4: Demand for Outotec's solutions continued on a good level

    Demand for Outotec’s solutions continued on a good level, because of our competitive offering and good market position  The long term outlook for metals demand continued positive and metal prices recover toward year-end  New capacity investments in non-ferrous metals and ilmenite, customers seekin

  5. Slide 5: Q4 orders received included new breakthroughs in environmental solutions

    Q4 orders received included new breakthroughs in environmental solutions Order intake in 2012 totaled EUR 2,084.4 million (2011: EUR 2,005.4 million), up 4%. Largest order in Outotec’s history, over EUR 350 million, was received in the second quarter of 2012. Americas 26% EMEA 59% Asia Pacific 15% P

  6. Slide 6: Solid order intake despite uncertain macroeconomic environment, strong year end backlog

    Solid order intake despite of the uncertain global macroeconomic environment, strong year end backlog EUR million 2 400 2 200 2 000 1 800  Order backlog at the end of 2012 was EUR 1,947.1 1 600 (1,985.1) million, 1 400 decrease of 2% from 1 200 2011 1 000  38 projects with value in excess of EUR 1

  7. Slide 7: Strong profitable growth

    Strong profitable growth Chg Q4 Q4 EUR million 2012 2011 % 2012 2011 Sales 2,087.4 1,385.6 +51 649.8 496.8 Gross margin, % 20.8 24.0 - 21.8 23.9 Operating profit from business 193.8 121.5 +60 74.0 54.9 operations - one-time costs +3.0** -4.7* - +4.3 -4.7 - PPA amortization -12.5 -4.9 - -3.3 -1.3 Rep

  8. Slide 8: Sales growth +51% was achieved mainly organically

    Sales growth +51% was achieved mainly organically EUR million 2 200 2,087 2 000 1 800 1 600 1,386 1 400 1 200 1 000 2011 Sales Capex organic Services organic Growth through 2012 Sales growth growth acquisitions* *) Acquisitions between Dec 2011-Dec 2012: Kiln Services, Energy Products of Idaho, Numc

  9. Slide 9: Operating profit from business operations improved by +60% y-o-y

    Operating profit from business operations* improved by +60% y-o-y mainly due to higher sales volume Note: one-time income in 2012 EUR 3.0 million includes EUR million EUR 6.3 million positive impact from the reduction of 300 EPI earn-out payment liability 280 of EUR 8.8 million (2011 one- time cost:

  10. Slide 10: Diversified sales split in terms of geography and materials

    Diversified sales split in terms of geography and materials - roughly 2/3 coming from emerging markets Sales by destination Sales by end product 2012 (2011) 2012 (2011) Others Americas Energy & 2% (4%) EMEA (incl. CIS) environmental solutions *) 36% (31%) 46% (44%) 14% (11%) Copper Other metals 33%

  11. Slide 11: Sales and profitability developed in line with long term targets

    Sales and profitability developed during last twelve months (LTM) in line with long term targets 2 500,0 10 % 9% 2 000,0 8% 7% 1 500,0 6% EUR million 5% 1 000,0 4% 3% 500,0 2% 1% 0,0 0% 12/2009 3/2010 6/2010 9/2010 12/2010 3/2011 6/2011 9/2011 12/2011 3/2012 6/2012 9/2012 12/2012 Sales LTM Operating

  12. Slide 12: Non-ferrous Solutions: Strong performance with all metrics

    Non-ferrous Solutions: Strong performance with all metrics Non-ferrous Solutions 2012 highlights EUR million 1400,0 14,0 %  Success in winning larger scope 1200,0 12,0 orders 1000,0 10,0 800,0 8,0  Strong service growth 600,0 6,0  Solid project execution 400,0 4,0  Improved profitability due to

  13. Slide 13: Ferrous Solutions: Good project execution and profitability improvement

    Ferrous Solutions: Good project execution and profitability improvement Ferrous Solutions 2012 highlights EUR million 400,0 9,0 %  Received the largest order in Outotec’s 350,0 8,0 300,0 7,0 history 6,0 250,0  Solid project execution 5,0 200,0 4,0  Improved profitability 150,0 3,0 100,0 2,0  Dem

  14. Slide 14: Energy, Light Metals and Environmental Solutions: Strong sales growth

    Energy, Light Metals and Environmental Solutions: Strong sales growth, profitability impacted by two customer projects Energy, Light Metals and Environmental Solutions 2012 highlights 450,0 EUR million 15,0 %  Good progress in expanding 400,0 alternative & waste-to-energy solution 350,0 300,0 10,0

  15. Slide 15: Services: Strong growth, almost hitting 2015 sales target

    Services: Strong growth, almost hitting 2015 sales target  Services 2012 highlights EUR million 200 40 %  39% growth from 2011, 23% (Q4: 28%) of 180 Outotec sales (2011: 25%) 160 30 140  Acquisitions (TME Group, Demil) accounted 120 100 20 for approximately 9% of the sales growth 80 (2011: no imp

  16. Slide 16: Financing structure continued to be strong and liquidity was good

    Financing structure continued to be strong and liquidity was good Net interest-bearing debt Working capital 0 0 -100 -100 -200 -200 -300 -400 -300 Net cash flow from operating activities, quarterly 150 120 90 60 30 0 -30 16 Feb 7, 2013 FY 2012 Financial Statements Review © Outotec - All rights reser

  17. Slide 17: Significant improvement in ROI and ROE due to strong financial result

    Significant improvement in ROI and ROE due to strong financial result ROI%, quarterly 70 60 50 40 30 20 10 0 ROE%, quarterly 50 40 30 20 10 0 17 Feb 7, 2013 FY 2012 Financial Statements Review © Outotec - All rights reserved

  18. Slide 18: Record-high number of patent applications due to strong innovation activity

    Record-high number of patent applications due to strong innovation activity and increased R&D investments = Outotec R&D and competence centers (18)  R&D expenses totaled EUR 41.6 million (2011: EUR 33.5 million), up 24% from 2011 and 2.0% of sales (2011: 2.4%)  Outotec filed 70 new priority patent

  19. Slide 19: Personnel increased due to acquisitions and recruitments

    Personnel increased due to acquisitions and recruitments to services and project delivery Personnel by region at the end of the period Personnel at the end of the period 5 500 5 000 4 805 EMEA 4 500 4 000 3 883 3 500 Americas 3 128 3 130 3 000 2 674 2 500 2 144 Asia Pacific 1 831 1 802 1 797 2 000 1

  20. Slide 20: Events after the reporting period

    Events after the reporting period  Design and delivery of a renewable energy solution for a major cellulosic ethanol producer on the in USA. Value not disclosed. (Jan 30)  Operation and maintenance contract (6 years plus) with ZAO Mikheevsky copper concentrator, Russia. Value exceeds EUR 140 milli

  21. Slide 21: High participation in Employee Share Savings Plan

    High participation in Employee Share Savings Plan  New Employee Share Shavings Plan launched in 2012 for Outotec employees globally.  The first savings period is calendar year 2013. Following periods are subject to Board decision.  For each share purchased in 2013, Outotec gives one free share af

  22. Slide 22: Focus in 2013

    Focus in 2013 © Outotec - All rights reserved

  23. Slide 23: Outotec's focus areas in 2013

    Outotec’s focus areas in 2013 ★ Focus area Status Ensure continuous sales growth through order intake and services growth as well as earnings logic enhancement Improve profitability through value based pricing, supply savings and sales mix improvement Continue making acquisitions to strengthen the o

  24. Slide 24: Market outlook and financial guidance for 2013

    Market outlook and financial guidance for 2013 © Outotec - All rights reserved

  25. Slide 25: Constantly increasing demand for sustainable technologies drives Outotec's business

    Constantly increasing demand for sustainable technologies drives Outotec’s business Ore grade Ore grades are declining and ores We have a deep knowledge of minerals and are becoming more complex. metals processing technologies for low-grade and complex ores. Energy We provide the most energy-efficie

  26. Slide 26: Market outlook - emerging markets GDP growth is driving metals demand

    Market outlook - emerging markets GDP growth is driving metals demand  Strengthening of macroeconomic indicators • metal prices • interest rate levels are expected to stay low  Positive market outlook for minerals and metals as well as alternative energy and industrial water treatment  Growth in

  27. Slide 27: Revised financial guidance for 2013

    Revised financial guidance for 2013 (earlier guidance in parenthesis) Based on the strong order backlog, current market outlook and the customer tendering activity, the management expects that in 2013:  Sales will be approximately EUR 2.1-2.3 billion (grow from 2012), and  Operating profit margin

  28. Slide 28: Outotec has been distributing dividends in line with the dividend policy

    Outotec has been distributing dividends in line with the dividend policy while executing the growth strategy 1,40 140 % 1,20 120 % 1,00 100 % 0,80 80 % EUR 0,60 60 % 0,40 40 % 0,20 20 % 0,00 0% 2006 2007 2008 2009 2010 2011 2012* Dividend Payout Ratio % *Board of Directors dividend proposal for the

  29. Slide 29: Our mission: Sustainable use of Earth's natural resources

    Our mission Sustainable use of Earth's natural resources. 29 Feb 7, 2013 FY 2012 Financial Statements Review © Outotec - All rights reserved

Outotec — FY2012 Earnings Presentation on 6ix