Metso Corporation · OMXHEX:METSO
Metso — Investor Presentation (March 2024)
69 slides from Metso's investor presentation, March 2024
Slide 1: Investor presentation March 2024
Investor presentation March 2024
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 – Enabling sustainable modern life
Metso – Enabling sustainable modern life Megatrends Vision Top priorities Urbanization To be customers’ number one choice for sustainable Financial performance Electrification use of Earth’s natural resources. Together we deliver Customer success Sustainability service, reliability, innovation and r
Slide 4: Enabling sustainable modern life
Enabling sustainable modern life 5.4 ~50 VISION: To be customers’ number one billion euro countries we choice for sustainable use of sales in 2023 operate in Earth’s natural resources. Together we deliver service, reliability, innovation and results – safely. 17,000+ 100+ employees nationalities ~30
Slide 5: Our businesses
Our businesses Aggregates Minerals Service Consumables Metals Largest global Comprehensive Spare parts and Widest range of Smelting supplier of offer covering the professional products on the business part crushers whole process services market of the core; two other businesses will be sold 5
Slide 6: Metso investment highlights
Metso investment highlights Leading offering in Committed to aggregates and Industry leader in Strong aftermarket further mining with full sustainability and presence & improvement of flowsheet technology capability profitability 6
Slide 7: Metso key financials 2023
Metso key financials 2023 Sales Sales by segment* Sales by geography EUR 5.4 billion Aggregates 16 % Europe 20 % 25% Minerals North and Central America 21 % Asia Pacific Planet Positive sales 23 % South America 75% Middle-East, India EUR 1.4 billion 20 % and Africa Services share of sales Adjusted E
Slide 8: Strategy implementation continues via TOP priorities
Strategy implementation continues via TOP priorities 8
Slide 9: Financial targets support our value creation
Financial targets support our value creation Adjusted EBITA- margin of Maintaining Q4/23: Baa2/ >17% 16.5% Investment Grade BBB over the cycle credit rating Dividend payout of at least Progress in sustainability in 50% 2023: alignment with the On of earnings per share 55% 1.5°C track commitment 9
Slide 10: Our margin journey after the merger
Our margin journey after the merger EUR million Target of >17% % Completion of merger Note: 2018 and 2019 figures are Metso Outotec pro forma and H1/2020 illustrative combined. The merger was completed on July 1, 2020, after which the data is based on IFRS. 10
Slide 11: 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 Forend process best knowledge result, use businesses an image that is 16:9 • Standardized and pre- • Prof
Slide 12: Broad range of sustainability initiatives
Broad range of sustainability initiatives EQUIPMENT AFTERMARKET CAPABILITIES • Planet Positive products • Recycling of consumables • Industry-leading metallurgical expertise Examples: Concorde Cell, • Significant increase of product Geminex and digital, hydro, lifetime • Supply chain battery chemica
Slide 13: Digitalization drives growth and aftermarket captivity
Digitalization drives growth and aftermarket captivity Focusing on Enabling creating Digital and Growth of automation Higher equipment and technologies customer aftermarket and value business capabilities Customer segment specific offerings Intelligent Fleet Process & operations equipment management
Slide 14: Construction activity muted in Europe, which is reflected in aggregates production
Construction activity muted in Europe, which is reflected in aggregates production 115 110 US Euro area France Germany Canada Construction 105 projects 100 volume 95 (2022=100) 90 85 01/2022 07/2022 01/2023 07/2023 09/2023 20 Euro area US 15 10 Aggregates 5 production 0 (y-o-y %) -5 -10 -15 01/2022
Slide 15: Large aggregates producers' capex outlook has been stable
Large aggregates producers’ capex outlook has been stable, infrastructure projects driving construction demand Bn EUR Current year Next three years 14,4 14,2 Aggregates customers* 14,0 +1% Capex 13,8 estimates 4,4 +1% 4,2 4,0 02/2023 04/2023 06/2023 08/2023 10/2023 12/2023 02/2024 Bn EUR 40 Global 3
Slide 16: Copper price increases, while iron ore and gold face volatility
Copper price increases, while iron ore and gold face volatility Last 12 M price development Price forecast and market balance Prices slip on a stronger USD 15,000 01/24 Price Forecast 11/23 Price Forecast Market Balance 3,000 10 000 2,500 Mine production cuts 9,650 2,000 10,000 8,600 9,100 8,457 8,3
Slide 17: Battery metals: Tumbling prices dampen overall sentiment
Battery metals: Tumbling prices dampen overall sentiment, yet strong policy support and environmental measures to drive market activity Last 12 M price development Price forecast, market balance, EV-sales 50,000 01/24 Price Forecast 11/23 Price Forecast Market Balance 200 60,000 100 50,000 40,000 40
Slide 18: Focus areas for acquired growth
Focus areas for acquired growth Products with Sustainable high aftermarket offering intensity Automation & Supply chain digitalization competitiveness 18
Slide 19: Becoming an industry leader
Becoming an industry leader Strong platform Leading position to grow and in technology and create value sustainability Business model Self-help reducing volatility improving profitability 19
Slide 20: Sustainability, R&D and people
Sustainability, R&D and people
Slide 21: Mining industry and equipment suppliers play an important role in addressing the climate challenge
Mining industry and equipment suppliers play an important role in addressing the climate challenge About 3-5% of the world’s power is used in comminution Around 1% of the worlds power • We must improve our sustainability performance throughout the value chain. runs through our • Our customers need o
Slide 22: Helping our customers to solve their sustainability challenges
Helping our customers to solve their sustainability challenges Planet Positive offering Climate Water change Footprint Net zero by 2030 Circular Biodiversity economy Integrated in strategy 22
Slide 23: Making an environmental impact with our Planet Positive offering
Making an environmental impact with our Planet Positive offering Sales totaled EUR 1.5 billion in 2023 • Around 140 products • Demonstrably better than the industry benchmark • Growing faster than overall sales Customer benefits: • Energy efficiency • Carbon efficiency • Optimized for using renewabl
Slide 24: Examples of our Planet Positive solutions
Examples of our Planet Positive solutions 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 wate
Slide 25: Examples of our Planet Positive solutions
Examples of our Planet Positive solutions 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 consumption redu
Slide 26: Industry-leading service expertise with global network
Industry-leading service expertise with global network • Comprehensive service portfolio from spares and wears to advanced lifecycle services • Deep understanding of customer process, product design, and technology • A world-class manufacturing network • Efficient logistic network in all main custom
Slide 27: Strong innovation and R&D power
Strong innovation and R&D power ~10 73 ~30 99.8% 7,800+ million euros New Planet Investment in Locations with R&D, R&D project Patents Positive launches research and testing or laboratory spend with in 2023 development in capabilities sustainability 2023 targets in 2022 27
Slide 28: Uncompromised safety in offering and operations
Uncompromised safety in offering and operations Safe and responsible supply chain LTIFR* (2023) 1.2 Long-term target Zero harm TRIFR** (2023) Health and safety Safe products Safe and responsible 3.0 of people and services supply chain Long-term target Zero harm • Safe and secure • Products designed
Slide 29: Diversity & inclusion is the basis of everything we do
Diversity & inclusion is the basis of everything we do • We are committed to developing a workplace where diversity and inclusion are embedded and celebrated in our culture. • We believe that an inclusive environment where everyone can be their genuine selves makes our teams and our business stronge
Slide 30: Our industry leading diverse group of professionals
Our industry leading diverse group of professionals Key numbers in the end of 2023 Our people by geography Our people by employee category Countries People Finland 2,790 Chile 2,353 Brazil 1,696 14% 13% Europe India 1,659 31% 33% South America China 1,058 13% Blue collars Asia Pacific and United Sta
Slide 31: Performance culture drives success
eNPS Performance culture drives success 54 Engaged people → customer value → business results Top 10%** 100 18% 16.5% 16.0% 90 16% 14.4% 80 13.1% 14% 12.9% 70 11.9% 12% 60 55 54 51 10% 50 43 8% 40 37 34 6% 30 4% 20 10 2% 0 0% Q2 2021 Q4 2021 Q2 2022 Q4 2022 Q2 2023 Q4 2023 eNPS NPS Planet Positive S
Slide 32: Metso Leadership Team
Metso Leadership Team Extended Metso Leadership Team CEO Pekka Vauramo Metso CFO’s office Legal & Compliance HR Leadership Eeva Sipilä Nina Kiviranta Carita Himberg Team Aggregates Minerals Metals Services Consumables Markku Simula Markku Teräsvasara Piia Karhu Sami Takaluoma Heikki Metsälä Market A
Slide 33: Our offering
Our offering Metso
Slide 34: Aggregates to build modern societies
Aggregates to build modern societies Equipment and services for diverse customers Our customers • Large international and smaller local companies and contractors in the aggregates industry Customer benefits • Best cost, best availability, easy-to-buy, and easy-to-own solutions • Comprehensive range
Slide 35: Driven by electrification and digitalization
Driven by electrification and digitalization Crushers and screens • Mobile and portable machines and plants • Stationary crushing and screening plant systems Spares and wears • Spare and wear parts and upgrades Professional services Electrifying our equipment Digital customer experience • Installati
Slide 36: Multi-brand: Serving our customers' different needs
Multi-brand: Serving our customers’ different needs Crushing, recycling & Aggregates Quarries Global brands demolition contractors OEM business Nordtrack Lokotrack High performance crushing & screening solutions Mobile crushing, screening & recycling Crushing, recycling & Aggregates Quarries Regiona
Slide 37: Minerals processing
Minerals processing Focus on smarter and more sustainable mining processes Faster speed of innovation Our customers Energy Water Agility New levels are focusing on: consumption stewardship through, for example, of reliability modularity 37
Slide 38: Presence in the whole ore-to-metals value chain
Presence in the whole ore-to-metals value chain Exploration and mine planning Tailings management Metal product Hauling and Crushing and Grinding Refining conveying screening Separation Dewatering W E C R E A T E T H E B I G G E S T I M P A C T T H R O U G H O U R C U S T O M E R S 38
Slide 39: Capturing the value of ore, responsibly
Capturing the value of ore, responsibly Leading offering for mining and minerals processing Broad offering Driving sustainable ranging from pre-feasibility flowsheets studies, engineering and An extensive range of Planet process equipment to complete Positive products continuously process islands an
Slide 40: Comprehensive expertise with a full portfolio of sustainable solutions
Comprehensive expertise with a full portfolio of sustainable solutions for all ore types and processes Grinding Separation Materials handling Plant Solutions Industry’s most comprehensive Maximizing recovery throughout Less maintenance, safer Unmatched performance and portfolio minerals’ processing
Slide 41: Innovation leader across the entire mining value chain
Innovation leader across the entire mining value chain Equipment and process performance with intelligent Planet Positive solutions Superior performance Optimal comminution process in beneficiation Reduced downtime Reduced energy costs Improved availability Unrivaled recovery Smart dewatering Proces
Slide 42: Generating value in battery minerals
Generating value in battery minerals
Slide 43: Batteries require multiple minerals
Batteries require multiple minerals Typical sourcing processes Typical battery minerals Hard rock Copper Cobalt Graphite Brines Lithium Nickel Manganese Battery Recycling (Black mass) 43
Slide 44: Lithium is the new gasoline!
Lithium is the new gasoline! Demand Scenario by 2040 (kt LCE*) Source - International Energy Agency 6,178 518 Other Sectors Estimates say that by EVs and Storage 2040 demand for Lithium CAGR 10% CAGR 15% may grow by over 5 660 1,287 414 1,988 518 2,453 414 2 039 1,500% 391 1 470 391 873 276 115 115
Slide 45: Our unique position in the industry
Our unique position in the industry Metso covers over 90% of the value chain From battery minerals extraction to refinement and recycling Mining & Chemical production Precursor Battery EVs Battery concentrates & metallurgy manufacturing production recycling Recycling: Towards a closed loop Circular
Slide 46: Segment's widest technology offering
Segment’s widest technology offering High-performance solutions throughout the value chain Improving the efficiency New exploration and Developing efficient and of existing brownfield new greenfield sites responsible processes mining and extraction with state-of-the-art for recycling and sites, plan
Slide 47: Our competitive advantage…
Our competitive advantage… … amidst fast-moving market expectations Strategic Valuable Resilient Sustainable • 90% coverage of • Ability to maximize • Resilient tools make • Environmental processes across the value of present for more resilient performance such the value chain operations plants as r
Slide 48: Advanced solutions from ore or concentrate to metal
Advanced solutions from ore or concentrate to metal Metso for metals Global leader in process Unique portfolio with best-in- Leading solutions for R&D focus on carbon-free technologies for metal and class technology and expertise decreasing customers’ CO2 production with innovative chemical industri
Slide 49: Leading process technology for metals producers
Leading process technology for metals producers Plants, equipment, and services Agglomeration Industries served Process solutions for • Base metals • Pelletizing • Iron & steel • Sintering • Precious metals • Light metals • Fertilizers Pyrometallurgy Sulphuric acid Process solutions for Process solu
Slide 50: Strong portfolio of metals processing technologies
Strong portfolio of metals processing technologies Acid plant process Calcining >650 completed acid plant >1,500 Rotary Kiln installations deliveries for minerals and metals calcining • High-efficiency gas cleaning & roasting solutions Iron ore agglomeration • Largest Metallurgical Acid >400 Sinter
Slide 51: Life Cycle Services - unique maintenance and optimization capabilities
Life Cycle Services - unique maintenance and optimization capabilities and process expertise A market leader: Globally 500+ Life Cycle Services contracts Long-term solutions to help Common objectives: our customers exceed their performance targets through partnership Improved Highest safety, lowest
Slide 52: Our service solutions improve customers' equipment and process efficiency
Our service solutions improve customers’ equipment and process efficiency sustainably • Spare and wear parts Life Cycle Services • We produce solutions built to perform for the entire market, • Modernizations, not just for the upgrades Metso installed base and retrofits • Process optimization and co
Slide 53: Optimal wear solutions for the entire value chain
Optimal wear solutions for the entire value chain Crusher wear parts Loading and hauling Designed to the same Wide range of wear linings specifications and exacting covering chute, conveyor and standards as our crushing loading and hauling solutions equipment, ensuring equipment designed to optimize
Slide 54: Not all spare parts are created equal
Not all spare parts are created equal Screening Metso screen and feeder parts boast a strong design to suit tough operating conditions. Crushing Grinding Filtration Wide-ranging parts offering for A proven history of designing, Readily available parts, enabling gyratory, cone and jaw crushers, manuf
Slide 55: Q4/2023 and full-year results
01 Q4/2023 and full-year results
Slide 56: Q4/23 highlights
Q4/23 highlights Sequentially stable Services orders market activity and sales grew Adj. EBITA margin Strongest cash improved to 16.8% flow quarter 56 February 16, 2024
Slide 57: Q4/23: Strong margin in mixed market environment
Q4/23: Strong margin in mixed market environment Group orders, sales and adj. EBITA EUR million EUR million Q4/2023 Q4/2022 Change % Orders received 1,232 1,437 -14 Sales 1,342 1,356 -1 Adjusted EBITA 225 210 7 % of sales 16.8 15.5 – Operating profit 200 183 9 % of sales 14.9 13.5 – Earnings per sha
Slide 58: Full-year 2023: Continued performance improvement
Full-year 2023: Continued performance improvement EUR million 2023 2022 Change % Orders received 5,252 5,623 -7 Sales 5,390 4,970 8 Adjusted EBITA 887 715 24 % of sales 16.5 14.4 – Operating profit 805 490 64 % of sales 14.9 9.9 – Earnings per share, continuing * 0.65 0.39 67 operations, EUR Cash fl
Slide 59: Q4/23: Aggregates resilient despite softer markets
Q4/23: Aggregates resilient despite softer markets EUR million • Orders received EUR 297 million (EUR 364 million) ◦ Market activity improved in late Q4 ◦ Equipment orders -28%, services 3% • Sales EUR 289 million (EUR 387 million) ◦ Decrease in both equipment and services ◦ Services share 35% (30%)
Slide 60: Q4/23: Minerals continued solid execution
Q4/23: Minerals continued solid execution EUR million • Orders EUR 935 million (EUR 1,073 million) ◦ Equipment market similar to previous quarter ◦ Services orders grew 4% • Sales EUR 1,052 million (EUR 968 million) ◦ Equipment +4% ◦ Services +12% ◦ Services share 62% (61%) • Adjusted EBITA EUR 179
Slide 61: Group Income Statement
Group Income Statement EUR million Q4/2023 Q4/2022 Q1-Q4/2023 Q1-Q4/2022 EUR Sales 1,342 1,356 5,390 4,970 Adj. EBITA 225 210 887 715 Adj. EBITA, % 16.8 15.5 16.5 14.4 Operating profit* 200 183 805 490 Operating profit, % 14.9 13.5 14.9 9.9 Net financial expenses -25 -16 -80 -63 Profit before taxes
Slide 62: Group Balance Sheet
Group Balance Sheet EUR million Dec 31, 2023 Dec 31, 2022 EUR million Total goodwill and intangible 1,886 1,972 assets Total property, plant and 472 407 equipment Right-of-use assets 114 115 Other non-current assets 271 262 Inventories 1,951 1,846 Receivables (trade and other) 1,585 1,551 Liquid fun
Slide 63: Cash flow
Cash flow EUR million Q4/2023 Q4/2022 Q1-Q4/2023 Q1-Q4/2022 EUR million Profit for the period 136 106 546 301 Adjustments: Depreciation and amortization 41 40 158 156 Financial expenses, net 25 16 80 63 Income taxes 54 40 199 113 Other items 39 45 15 65 Total adjustments 160 142 453 398 Change in ne
Slide 64: Net working capital
Net working capital EUR million EUR million 64 February 16, 2024
Slide 65: Financial position
Financial position • Q4/2023 events: EUR million Dec 31, 2023 Dec 31, 2022 ◦ EUR 300 million Sustainability Linked Bond Liquid funds 638 601 ◦ EUR 50 million research, development, and innovation (RDI) loan from EIB drawn Net debt 884 684 • Average interest rate of loans and derivatives 4.3% • Ratin
Slide 66: Good progress in most sustainability KPIs in 2023
Good progress in most sustainability KPIs in 2023 Logistics CO2 Spend from suppliers Planet Positive Net zero emissions with science-based sales to grow faster CO2 emissions in own emissions targets than overall operations* by -20% sales 2030 by 2025 30% by 2025 End of 2023: End of 2023: End of 2023
Slide 67: Increase in dividend highlights improved performance
Increase in dividend highlights improved performance EUR * • Proposed dividend 55% of EPS • Two equally sized payments • Total payout EUR 297.5 million * Board's proposal to the AGM 67 February 16, 2024
Slide 68: Market Outlook
Market Outlook Metso expects the market activity to remain at the current level in Minerals and improve in Aggregates. In its previously published outlook, Metso expected the market activity to remain at the current level in both Minerals and Aggregates. According to the company's disclosure policy,
Slide 69: Partner for positive change
Partner for positive change metso.com