Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (September 2020)
44 slides from Metso's investor presentation, September 2020
Slide 1: Investor presentation September 2020
Investor presentation September 2020
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, minerals processing, 4.2 50+ metals refining and recycling billion euro countries with industries globally. sales* presence By improving our customers’ energy and
Slide 4: Metso Outotec's businesses
Metso Outotec’s businesses Aggregates Minerals Metals Recycling Services Consumables Crushing and Equipment and Processing Equipment and Spare parts, Comprehensive screening full plant solutions and services for refurbishments offering of wear equipment for solutions for equipment for metal and wast
Slide 5: Full offering from ore to metal
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 / Slurr
Slide 6: Metso Outotec key financials – illustrative 2019 combined
Metso Outotec key financials – illustrative 2019 combined Sales EUR million Sales by industry1 Sales by geography1 4,186 13% Services 23% 26% Share of sales 56% 42% 35% Adjusted EBITA2 61% EUR million / % 525 / 12.5% Aggregates EMEA 1. Illustrative combined figures of Metso Minerals business carve-o
Slide 7: Providing unmatched benefits to stakeholders
Providing unmatched benefits to stakeholders • Comprehensive offering from • New opportunities due to larger ore body to metal business scope and scale • Broad global service network • Unique opportunity to be part of Customers close to customers Employees building a new industry leader • Industry-l
Slide 8: The world around us is changing
The world around us is changing Urbanization Scarcity of natural Climate change Circular economy Digitalization resources Brings requirements Sets the imperative Calls for energy and Drives recycling of Advances new for more aggregates, for responsible water efficiency and minerals, metals, business
Slide 9: Unique strengths for our customers' benefit
Unique strengths for our customers' benefit Sustainable Innovation and Responsible Full offering Service technologies R&D partner Offering from ore Technologies that Industry-leading Strong combined Uncompromising to metal to improve reduce emissions service expertise innovation and safety in offeri
Slide 10: 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 11: 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 11
Slide 12: 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 12
Slide 13: 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 14: 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 15: Metso Outotec global team of professionals
Metso Outotec global team of professionals Our 15,000+ people by geography 7% 12% 37% 20% 24% Europe South and Central America Asia-Pacific North America Africa and ME 15
Slide 16: 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 HR Carita Himberg * Business development Interim Hannele Järvistö Piia Karhu Services Aggregates Minerals Metals Recycling Consumables
Slide 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: Metso Outotec for recycling
Metso Outotec for recycling Our offering Customer benefits • Crushers and shredders for high-volume • Comprehensive offering meets a lighter scrap, shears for heavier scrap wide range of industry demand • Balers and briquetters for compacting • Reliable and durable design, scrap at high density ensu
Slide 24: Recycling: broad offering for metal and waste recycling
Recycling: broad offering for metal and waste recycling EtaRip™ Services Pre-Shredder Global service setup allows for For safe and reliable pre- high availability of parts and local fragmenting of metal scrap and service support optimizing material infeed into the main shredder Metso M&J™ MetsoMetri
Slide 25: Q2 and half-year 2020 results
Q2 and half-year 2020 results
Slide 26: About this financial information
About this financial information • Under IFRS, the merger of Metso’s Minerals business and Outotec is treated as a reverse acquisition, where Metso Minerals is the accounting acquirer and Outotec the accounting acquiree. • The consolidated Metso Outotec balance sheet is reported as at the transactio
Slide 27: Results in brief
Results in brief 27
Slide 28: Q2/2020 highlights
Q2/2020 highlights • Good overall performance during an exceptional quarter • Fast and comprehensive cost actions to mitigate the Covid-19 impact • Customer service continued through virtual and digital dialogue, such as webinars and in digital marketing channels. • Metso's partial demerger and Mets
Slide 29: Group highlights in Q2, pro forma
Group highlights in Q2, pro forma • Orders received EUR 976 million • Sales EUR 1,047 million • Adjusted EBITA EUR 143 million, or 13.5% of sales • Metso Minerals’ adjusted EBITA was EUR 110 million, or 14.6% of sales, and Outotec’s adjusted EBITA was EUR 31 million, or 10.5% of sales. • Net debt EU
Slide 30: Covid-19 impacts in Q2
Covid-19 impacts in Q2 • Negative impact continued due to lockdowns affecting operations and widespread restrictions limiting travel and workforce mobility • Aggregates equipment business most affected, except in China, with demand globally improving towards the end of June to about 75% compared to
Slide 31: Metso Minerals highlights
Metso Minerals highlights EUR million % 1 000 18 • Orders up 8% y-o-y to EUR 762 million 900 16 o McCloskey contributed 11%-points 800 14 o Services increased 1% 700 12 • Sales up 2% y-o-y to EUR 751 million 600 10 o McCloskey impact 10%-points 500 o Services increased 2% 400 8 • Adjusted EBITA impr
Slide 32: Outotec Minerals Processing highlights
Outotec Minerals Processing highlights EUR million % 350 16 • Orders received EUR 159 million (255 million) 300 14 o No large mining equipment and service orders o Spare part orders at healthy level 250 12 • Sales up 9% to EUR 214 million 200 10 o Strong backlog supported equipment deliveries 8 150
Slide 33: Outotec Metals Refining highlights
Outotec Metals Refining highlights EUR million % 180 40 • Orders received EUR 55 million (145 million) 160 20 o Customers postponed decision-making on projects and modernization services 140 0 • Sales EUR 80 million (122 million) 120 -20 o Decline due to lower backlog 100 -40 • Adjusted EBIT EUR 1 m
Slide 34: IFRS Income Statement
IFRS Income Statement EUR million H1/2020 H1/2019 2019 Sales 1,447 1,416 2,976 Gross profit 433 415 858 Operating profit 145 166 325 Net financial expenses -10 -17 -34 Profit before taxes 135 149 292 Income taxes -36 -28 -69 Profit for the period 99 121 223 34
Slide 35: Income Statement, pro forma
Income Statement, pro forma Metso Minerals Outotec Metso Outotec Pro forma Metso Outotec carve-out historical Metso Outotec pro EUR million combined adjustments pro forma historical reclassified forma 1-12/2019 1-6/2020 1-6/2020 1-6/2020 1-6/2020 1-6/2020 Sales 1,447 579 2,026 1 2,027 4,132 Adjusted
Slide 36: IFRS Balance Sheet
IFRS Balance Sheet EUR million June 30, 2020 December 31, 2019 Intangible assets 2,062 723 Total property, plant and equipment 357 315 Right-of-use assets 138 89 Other non-current assets 251 282 Inventories 1,106 975 Receivables (trade and other) 1,094 916 Liquid funds 528 156 Assets, discontinued o
Slide 37: Analysis of Cash Flow
Analysis of Cash Flow Metso Minerals Metso Minerals Metso Minerals Outotec Outotec Outotec carve-out carve-out carve-out historical EUR million historical historical historical historical historical 1-12/2019 1-6/2020 1-6/2019 1-6/2020 1-6/2019 1-12/2019 Profit for the period 99 0 121 14 223 27 Adju
Slide 38: Net working capital per June 30, 2020
Net working capital per June 30, 2020 EUR million 38
Slide 39: Financial position
Financial position • Committed and undrawn EUR million June 30, 2020 revolving credit facilities totaled EUR 790 million at the end of Liquid funds 528 June Net debt 913 Gearing, % 45.5 • Outotec's EUR 150 million hybrid bond was repaid Equity-to-assets ratio, % 38.9 on July 31, refinanced by a bank
Slide 40: Integration and outlook
Integration and outlook 40
Slide 41: Synergies from the merger updated
Synergies from the merger updated • Cost synergy target increased to EUR 120 million (initially EUR 100 million). Annual run rate expected to fully materialize in the end of 2021 (initially in three years). EUR 50 million annual run rate expected already by the end of 2020. • Revenue synergy target
Slide 42: Integration work has started fast
Integration work has started fast • Minimum of 4 layers of organization in place, enough to execute the integration • 8 market area organizations in place compared to 23 in Metso Minerals and Outotec earlier • Office locations to decrease to around 150 from 190 previously • Strategy work ongoing 42
Slide 43: Market outlook
Market outlook Metso Outotec expects the market activity to remain at the current level, being subject to a possible worsening 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 foll
Slide 44: Partner for positive change
fe OO © CO Partner for positive change
Metso Outotec — Investor Presentation (September 2020) on 6ix