Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (December 2021)
69 slides from Metso's investor presentation, December 2021
Slide 1: Investor presentation December 2021
Investor presentation December 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, 3.9 50+ minerals processing, and metals billion euro countries with refining industries globally. sales presence • By improving our customers’ energy and water e
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 Reducing volatility Improving profitability Offering competitive Strengthening of dividend balance sheet
Slide 6: Our investment highlights
Our 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 sustainability Attra
Slide 7: Key financials in 2020
Key financials in 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: Our purpose – Enabling sustainable modern life
Our purpose – Enabling sustainable modern life MEGATRENDS VISION TOP PRIORITIES Urbanization To be customers’ number one choice for sustainable use of Financial performance Electrification Earth’s natural resources. Together we deliver service, Customer success Sustainability reliability, innovation
Slide 9: Strategy implementation continues through four top priorities
Strategy implementation continues through four top priorities Financial Customer Sustainability Performance performance success culture November 4, 2021
Slide 10: 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 11: 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 12: 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 13: 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%
Slide 14: 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 15: Metso Outotec growth areas
Metso Outotec growth areas Products with Sustainable Automation & China & high aftermarket offering digitalization Silk Road intensity
Slide 16: 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 17: 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 18: 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 19: Action taken in Metals & Recycling
Action taken in Metals & Recycling • Metals turnaround ongoing • Business scope and cost structure to be addressed • 15M annual savings implemented • Aluminium business divestment completed in April 2021 • Recycling business announced to be divested • Waste Recycling business divestment completed in
Slide 20: 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 21: …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 22: …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 23: …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 24: 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 25: 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: - Cutting CO2 emissions by 50% in own production by 2024 - Achieving net-zero by 2030 - Targeting 30% of the supplier spend by the end of 2025 with partners who have set Science-Based Targets • 100% of R&D wi
Slide 26: Enabling customers to reach their sustainability targets
Enabling customers to reach their sustainability targets Planet Positive product for every part of the value chain 100% of R&D Accelerating Partnering with Own operations Uncompromised projects with Planet Positive suppliers to CO2 reduced 50% safety sustainability sales decarbonize the supply by 2
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 32: Metso Outotec global team of professionals
Metso Outotec global team of professionals Our 15,000+ people by geography 11% 13% 37% 13% 26 Europe South America Asia-Pacific and Greater China North and Central America Africa, ME and India
Slide 33: 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 Aggregates Metals Services Consumables Markku Markku Si
Slide 34: Metso Outotec for the aggregates industry
Metso Outotec for the 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- • Statio
Slide 35: Unparalleled offering for crushing and screening
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 models that mak
Slide 36: Developing sustainable crushing solutions
Developing sustainable crushing solutions 50k+ Metso Outotec • Metso Outotec crushers are world leaders in crushers compressive crushing technology and hard delivered rock applications • They have unique combination of high crushing performance and reliability for the toughest conditions • In total,
Slide 37: Investing in growth
Investing in growth Increasing our production capacity Adding • Increasing mobile crushing and close to the another screening equipment production in customers 20,000 m2 in Alwar, Alwar, India India – Production in the new assembly line is planned to start in early 2023, making Alwar the largest Met
Slide 38: 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
Slide 39: Our product portfolio is ~50% electric today
Our product portfolio is ~50% electric today Stationary equipment Wheel mounted Track mounted Fully electric Fully electric ~15% electric Stationary equipment Wheel mounted equipment Diesel-hydraulic (traditional) 100 % electric powered. 100 % electric powered. Diesel-electric (dual-power) Annual so
Slide 40: 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 41: 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 42: 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 43: Industry-leading end-to-end solutions for minerals processing
Industry-leading end-to-end solutions for minerals processing • Strategy supporting growth and sustainable mining • Processes, expertise, and portfolio streamlined to meet customer needs • Over 20 portfolio and product launches have taken place since the merger – and R&D focus: we have a good amount
Slide 44: Unique maintenance and optimization capabilities and process expertise
Unique maintenance and optimization capabilities and process expertise • Services business is over 50% of our sales • Service solutions improve equipment and process efficiency sustainably. Customers’ • R&D focus is in sustainable and digital solutions. expectations • Global manufacturing footprint
Slide 45: There is a step change taking place
There is a step change taking place Customers are focusing on smarter and more sustainable mining: • Water stewardship • Energy consumption • Agility through, for example, modularity • New levels of reliability November 4, 2021
Slide 46: New Planet Positive solutions for minerals processing
New Planet Positive solutions for 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 water consum
Slide 47: Planet Positive solutions for aftermarket
Planet Positive solutions for aftermarket Optimized 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 consum
Slide 48: Supporting customers with Life Cycle Services
Supporting our customers to reach their full potential with Life Cycle Services Renewed LCS offering and packages Globally 400+ Life Cycle Services contracts • Inspections • Shutdown • Maintenance • Plant Solution Commitment • Technology specific LCS packages for on safety and sustainability Filtrat
Slide 49: 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 50: Advanced solutions from ore or concentrate to metal
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 operation
Slide 51: Unique global supplier
Unique global supplier • Industry-leading sustainable products and services portfolio for hydrometallurgy, pyrometallurgy, sulphuric acid, and agglomeration & heat transfer • Leading solutions for decreasing customers’ CO2 emissions, e.g. – Copper Flash Smelting – Alumina calcination – FeCr smelting
Slide 52: Metals processing equipment orders published since the merger
Metals processing equipment orders 1 published since the merger, examples EUR 100 million Zinc plant 1 EUR 90 million Nickel smelter modernization 1 1 Precious EUR 360 million metals Copper smelter to recycling plant Freeport Manyar 2 2 6 3 Battery Alumina Iron ore Copper chemicals processing pellet
Slide 53: Sustainable technologies in R&D focus
Sustainable technologies in R&D focus Modular plants & digital solutions 15 New sustainable Carbon-free technologies in Circular economy Battery metals Gold production 2021-2028 Introduction of New solutions for Technology Compact, relocatable hydrogen and bio- impurity management capabilities to pr
Slide 54: Q3/2021 results
Q3/2021 results Metso:Outotec
Slide 55: Q3 in short
Q3 in short • Strong market activity in all segments • Record-high order intake • Strong Planet Positive demand and orders • Sales growth affected by backlog timing and supply chain • Profitability improved in all segments • Net-zero emissions targeted by 2030 • Integration ahead of plan
Slide 56: Group Q3 key figures
Group Q3 key figures • Orders received more than doubled to EUR 1,649 million (EUR 809 million) • Sales grew by 7 percent to EUR 1,023 million (EUR 957 million) • Adjusted EBITA improved to EUR 139 million, or 13.6% of sales (EUR 111 million, or 11.6%) • Operating profit improved to EUR 107 million,
Slide 57: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights • Orders received EUR 325 million (EUR 232 EUR million % million) 400 16 • Supported by infrastructure spending • Growth driven by the European and North 350 14 American markets 300 12 • Customers placing orders well before next 250 10 construction season • Sa
Slide 58: Minerals segment quarterly highlights
Minerals segment quarterly highlights • Orders EUR 968 million (EUR 516 million) EUR million % • Strong demand for Planet Positive offering 1 200 18 and productivity solutions 16 • Two equipment orders > 50 million 1 000 14 • Services orders +22% 800 12 • Sales EUR 604 million (EUR 634 million) • Eq
Slide 59: Metals segment quarterly highlights
Metals segment quarterly highlights % • Orders received EUR 357 million (EUR 61 EUR million million) 400 20 • Demand continued to be good 350 15 • Large copper smelter order 300 • Sales EUR 126 million (EUR 79 million) 10 250 • Revenue recognition increased 5 • Adjusted EBITA EUR 6 million (EUR -8 2
Slide 60: IFRS Income Statement
IFRS Income Statement Q1- EUR million Q3/2021 Q3/2020 1-12/2020* Q3/2021 Sales 1,023 957 2,958 3,897 Earnings per share, EUR 0,14 Adj. EBITA 139 111 384 448 0,12 Adj. EBITA, % 13.6 11.6 13.0 11.5 0,10 0,10 Operating profit 107 51 295 253 0,09 0,09 0,08 0,08 Operating profit, % 10.5 5.4 10.0 6.5 0,07
Slide 61: IFRS Balance Sheet
IFRS Balance Sheet EUR million September 30, 2021 December 31, 2020 EUR million Net debt declining Intangible assets 2,013 2,060 1 000 70% 943 Total property, plant and equipment 366 356 915 65% 900 Right-of-use assets 131 132 60% Other non-current assets 248 215 799 800 Inventories 1,236 1,038 55%
Slide 62: Cash Flow
Cash Flow EUR million Q3/2021 Q1-Q3/2021 1-12/2020 Cash flow from operations EUR million Profit for the period, continuing 500 73 200 149 operations 444 450 Profit for the period, discontinued 3 22 -11 operations 400 Adjustments: 89 219 256 350 Depreciation and amortization 41 124 160 300 250 Financ
Slide 63: Net working capital on September 30, 2021
Net working capital on September 30, 2021 EUR million
Slide 64: Strengthened financial position
Strengthened financial position • Sustainability targets included in the EUR 600 EUR million September 30, 2021 Dec 31, 2020 million Revolving Credit Facility, maturing in 2026 Liquid funds 550 537 • EUR 100 million term loan repaid in two EUR Net debt 563 799 50 million payments in September and Oc
Slide 65: Integration proceeding ahead of plan
Integration proceeding ahead of plan • Annual run-rate of EUR 116 million reached in cost synergies • 60% 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 68 million and additiona
Slide 66: Strong demand for Planet Positive products
Strong demand for Planet Positive products Q3 order highlights Energy and emission Water efficient efficient solutions solutions Modular copper solvent Several energy-efficient New proprietary Concorde Raw water treatment plant extraction technology for a stirred mills to a greenfield Cell™ flotatio
Slide 67: Covid-19 impacts in Q3
Covid-19 impacts in Q3 • Local and regional restrictions and lockdowns continue limiting access to customer sites • Slowing down decision-making and overall cooperation with customers • Our own operations have been running without any significant disruptions
Slide 68: Market outlook
Market outlook Metso Outotec expects the market activity to remain at the current strong level, 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 followin
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Metso Outotec — Investor Presentation (December 2021) on 6ix