Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (October 2021)
58 slides from Metso's investor presentation, October 2021
Slide 1: Investor presentation October 2021
Investor presentation October 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 Reduction of volatility Improving profitability Offering competitive Strengthening of dividend balance sheet 5
Slide 6: Metso Outotec investment highlights
Metso Outotec 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 sustainabi
Slide 7: Metso Outotec key financials – year 2020
Metso Outotec key financials – year 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 7
Slide 8: Enabling sustainable modern life
Our purpose Enabling sustainable modern life 8
Slide 9: Our vision
Our vision To be customers’ number-one choice for sustainable use of earth’s natural resources. Together we deliver service, reliability, innovation and results – safely. 9
Slide 10: Our purpose - Enabling sustainable modern life
Our purpose - Enabling sustainable modern life 10
Slide 11: Tier One Priorities
Tier One Priorities Strategy implementation Integration and financial performance Customer centricity Sustainability Performance culture 11
Slide 12: 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 12
Slide 13: 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 13
Slide 14: ...supported by 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 15: 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% Note: sales split year-to-date 2020, excluding Recyc
Slide 16: 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 17: 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 18: 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 19: 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 20: Action taken in Metals & Recycling
Action taken in Metals & Recycling • Metals turnaround ongoing • Business scope and cost structure to be addressed • 15M annual savings announced in early March • Aluminium business divestment completed in April 2021 • Recycling business announced to be divested 20
Slide 21: 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 22: …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 22
Slide 23: …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 24: …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 25: 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 26: 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 with Science Based Targets (SBT): - Cut CO2 emissions by 50% in own production by 2030 - 20% lower CO2 emissions in logistics by 2025 - 20% lower CO2 emissions in product use by 2025 - 30% of the supplier spen
Slide 27: 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 28: 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 29: 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 30: 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 30
Slide 31: 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 31
Slide 32: 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 33: 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 33
Slide 34: 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 BL Waste Aggregates Metals Services Consumables Markku
Slide 35: Metso Outotec for aggregates industry
Metso Outotec for 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- • Stationary
Slide 36: Aggregates: unparalleled offering for crushing and screening
Aggregates: 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 mod
Slide 37: 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 38: 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 39: 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 40: Metals: advanced solutions from ore or concentrate to metal
Metals: 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 o
Slide 41: Q2/2021 and Half-year results
Q2/2021 and Half-year results
Slide 42: Q2 in short
Q2 in short • Strong market activity and order intake in all segments • Strong sales and profitability in Aggregates • Low sales affected Minerals • Metals turnaround progressing • Integration ahead of plan • Good development in sustainability 42
Slide 43: Group Q2 key figures, IFRS
Group Q2 key figures, IFRS (comparison period illustrative combined) • Orders received grew by 43 percent to EUR 1,360 million (EUR 953 million) • Sales EUR 1,010 million (EUR 1,016 million) • Adjusted EBITA EUR 131 million, or 12.9% of sales (EUR 139 million, or 13.7%) • Operating profit EUR 97 mil
Slide 44: Covid-19 impacts in Q2
Covid-19 impacts in Q2 • Workforce mobility and access to sites still limited in several countries • In North America and Australia, the domestic travel has recovered, and increased customer activity related to on-site work • Our own operations have been running with additional health and safety mea
Slide 45: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights • Orders received EUR 363 million (EUR 222 EUR million % million) 400 16 • Organic growth +68% 350 14 • Strong recovery in infrastructure spending 300 12 • Robust H1 season 250 10 • Sales EUR 320 million (EUR 253 million) • Organic growth +29% 200 8 • Driven b
Slide 46: Minerals segment quarterly highlights
Minerals segment quarterly highlights % • Orders EUR 755 million (EUR 645 million) EUR million 900 18 • Focus on sustainability and productivity 800 16 • On-site services still affected by Covid-19 700 14 • Currency impact -6% • Sales EUR 578 million (EUR 653 million) 600 12 • Organic growth -7% 500
Slide 47: Metals segment quarterly highlights
Metals segment quarterly highlights % • Orders received EUR 243 million (EUR 87 EUR million million) 300 25 • Improved market activity 20 250 • Strongest growth in pelletizing 15 • Sales EUR 112 million (EUR 110 million) 200 10 • Low due to timing of deliveries from backlog 150 5 • Adjusted EBITA EU
Slide 48: Income Statement (illustrative combined)
Income Statement (illustrative combined) EUR million Q2/2021 Q2/2020 Q1-Q2/2021 Q1-Q2/2020 1-12/2020 Sales 1,010 1,016 1,935 1,963 3,897 Gross profit 291 294 554 564 1,035 % of sales 28.9 29.0 28.7 28.8 26.6 SG&A expenses -194 -182 -363 -368 -748 Adjusted EBITA 131 139 245 234 448 % of sales 12.9 13
Slide 49: IFRS Income Statement
IFRS Income Statement EUR million Q2/2021 Q1-Q2/2021 1-12/2020 Sales 1,010 1,935 3,319 Adj. EBITA 131 245 397 Adj. EBITA, % 12.9 12.7 11.9 Operating profit 97 188 239 Operating profit, % 9.6 9.7 7.2 Net financial expenses -11 -18 -38 Profit before taxes 86 170 201 Income taxes -22 -43 -52 Profit for
Slide 50: IFRS Balance Sheet
IFRS Balance Sheet EUR million June 30, 2021 December 31, 2020 Intangible assets 2,041 2,060 Total property, plant and equipment 372 356 Right-of-use assets 132 132 Other non-current assets 250 215 Inventories 1,154 1,038 Receivables (trade and other) 1,112 1,083 Liquid funds 469 537 Assets held for
Slide 51: Analysis of Cash Flow
Analysis of Cash Flow EUR million Q2/2021 Q1-Q2/2021 1-12/2020 Profit for the period, continuing 64 127 149 operations Profit for the period, discontinued 22 19 -11 operations Adjustments: 55 131 256 Depreciation and amortization 44 83 160 Financial expenses, net 11 18 38 Income taxes 23 43 58 Other
Slide 52: Net working capital on June 30, 2021
Net working capital on June 30, 2021 EUR million 52
Slide 53: Financial position
Financial position • Committed and undrawn revolving credit EUR million June 30, 2021 Dec 31, 2020 facilities totaled EUR 600 million on June 30 • Two bilateral revolving credit facilities Liquid funds 469 537 cancelled, totaling EUR 90 million (maturity in Net debt 686 799 2022) Gearing, % 33.5 39.
Slide 54: Integration proceeding ahead of plan
Integration proceeding ahead of plan • Run-rate of EUR 105 million reached in cost synergies • 65% 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 40 million and additional EUR 9
Slide 55: Planet Positive well presented in Q2 orders
Planet Positive well presented in Q2 orders Top picks • Four pellet plant orders from • First Metso Outotec Truck • Process technology to a China within 10 months Body to Americas precious metals recycling plant • The first integrated • Lithium hydroxide process for beneficiation and pelletizing pro
Slide 56: Highlights after the reporting period
Highlights after the reporting period • EUR 360 million order for the design and engineering of a copper smelter to Freeport Indonesia Manyar Project • Waste Recycling agreed to be divested to Ahlström Capital – Metals Recycling divestment process on-going 56
Slide 57: 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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