Slide 1: Metso Q2 2014 Interim Review
Matti Kähkönen, President and CEO Harri Nikunen, CFO July 31, 2014 © Metso
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: Solid performance with improved profitability
Solid performance with improved profitability Quarterly highlights • Good performance continued in unchanged market conditions • Total orders increased 5% and services orders 10% with constant currencies • Total net sales increased 4% and services net sales 8% with constant currencies • EBITA before
Slide 4: Record-high orders in Automation; stability seen in Mining and Construction
Record-high orders in Automation; stability seen in Mining and Construction Metso EUR million Metso EUR million 1,600 1,466 5,000 4,466 1,400 4,215 1,168 4,000 3,709 1,200 1,117 1,100 1,055 1,031 3,281 965 982 968 947 1,000 885 875 826 850 838 828 825 3,000 767 2,307 800 637 558 550 563 2,000 600 40
Slide 5: Services sales are growing again
Services sales are growing again Metso EUR million Metso EUR million 1,400 5,000 4,282 1,156 1,132 1,200 1,116 1,075 3,858 1,018 4,000 3,672 959 988 962 1,000 915 937 898 871 901 3,018 817 2,902 800 735 746 685 736 726 748 744 3,000 647 600 2,000 400 1,000 200 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 6: Improved profitability shows resilience to lower volumes
Improved profitability shows resilience to lower volumes EUR million % % 200 16 600 13.2 14 14.4 12.8 13.7 13.6 13.0 12.9 14 11.4 12 12.2 12.0 12.2 500 10.9 10.9 11.6 11.9 11.9 11.9 11.2 10.1 150 10.8 12 10.2 10 9.4 400 9.1 10.7 10 8.7 8.7 8 100 8.7 8 300 8.0 496 494 6 486 149 147 6 136 129 138 129
Slide 7: Financial performance
Financial performance Harri Nikunen, CFO
Slide 8: Services and lower costs drive profitability
Services and lower costs drive profitability Group key figures EUR million Q2/2014 Q2/2013 Change% Q1-Q2/2014 Q1-Q2/2013 Change% 2013 Orders received 947 968 -2 1,822 1,999 -9 3,709 without currency impact 951 5 1,950 -2 Services orders received 534 522 2 1,079 1,111 -3 2,038 without currency impact
Slide 9: Cost savings continue to make an impact
Cost savings continue to make an impact EUR million 140 7 131 120 19 118 -10 -3 100 80 60 40 20 0 Q2/2013 Volume Margin S, G & A Others Q2/2014 EBITA* EBITA* 9 © Metso * Before non-recurring items
Slide 10: Our balance sheet remains strong
Our balance sheet remains strong Q1-Q2/2014 Q1-Q2/2013 2013 Return on equity (ROE), % 16,4 17,5 19,0 Return on capital employed (ROCE) before taxes, % 16,6 16,7 18,6 Gearing at the end of the period, % 53,4 46,7 41,6 Cash conversion, % 100 75 105 Debt to capital, % 45,6 38,4 47,0 Net debt / EBITDA 1
Slide 11: Dividend payment has temporarily increased gearing
Dividend payment has temporarily increased gearing Net debt and gearing % Net working capital EUR Million % EUR Million 700 60 800 20 686 603 702 700 651 18.4 600 53.4 50 649 555 16.9 16 16.4 46.7 600 15.7 491 500 40 41.6 500 12 400 377 30 400 300 28.4 8 300 20 200 200 4 10 100 100 0 0 0 0 Q4/2012 Q
Slide 12: Good result, despite lower volumes
Good result, despite lower volumes Mining and construction key figures EUR million Q2/2014 Q2/2013 Change% Q1-Q2/2014 Q1-Q2/2013 Change% 2013 Orders received 685 743 -8 1,309 1,529 -14 2855 without currency impact 729 0 1,487 -6 Services orders received 423 412 3 836 883 -5 1616 Net sales 730 800 -9
Slide 13: Strong EBITA margin in demanding environment
Strong EBITA* margin in demanding environment Mining and construction rolling 12-month net sales and EBITA%* % EUR million 4,000 16% 3,500 14% 3,000 12% 2,500 10% 2,000 8% 1,500 6% 1,000 4% 500 2% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2009 2010 2011
Slide 14: Record high orders and strong performance
Record high orders and strong performance Automation key figures EUR million Q2/2014 Q2/2013 Change% Q1-Q2/2014 Q1-Q2/2013 Change% 2013 Orders received 263 239 10 515 493 4 902 without currency impact 236 14 486 9 Services orders received 111 110 1 243 228 7 422 Net sales 232 207 12 418 391 7 854 wi
Slide 15: Strong volumes and healthy margins
Strong volumes and healthy margins Automation rolling 12-month net sales and EBITA%* % EUR Million 1,000 20% 900 18% 800 16% 700 14% 600 12% 500 10% 400 8% 300 6% 200 4% 100 2% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2009 2010 2011 2012 2013 2013 2014
Slide 16: Profit improvement program proceeding according to plan
Profit improvement program proceeding according to plan • The current scope encompasses gross headcount reduction of 1,300-1,400 • Targeted gross savings are EUR 120-130 million • Completion rate is 70%, targeting full completion by the end of 2014 • Net personnel cost savings in H1/2014 vs. H1/2013
Slide 17: Outlook and guidance
Outlook and guidance Matti Kähkönen President and CEO
Slide 18: Market outlook remains roughly unchanged
Market outlook remains roughly unchanged Mining Construction Automation 55% of net sales 20% of net sales 22% of net sales of which 55% services of which 40% services of which 45% services Current demand: Current demand: Current demand: • Weak for the equipment and • Satisfactory for the equipment a
Slide 19: Automation backlog supports continuing growth
Automation backlog supports continuing growth EUR Million EUR million 3,000 2,500 2,506 2,324 2,306 2,000 Deliveries after 2013 1,927 1,938 2,000 Deliveries after 1,730 1,500 2014 1,364 1,000 Deliveries in 1,000 2013 Deliveries in 2014 500 0 0 Q4 Q4 Q4 Q4 Q2 Q4 Q2 Order backlog Jun 30, 2013 Order ba
Slide 20: Guidance for 2014
Guidance for 2014 Guidance remains unchanged Based on our market outlook, backlog for 2014, current exchange rates and ongoing cost-efficiency actions, we estimate that • our net sales in 2014 will be somewhat below 2013 and • EBITA margin before non recurring items for 2014 will be around 12% 20 ©
Slide 21: www.metso.com
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