Slide 1: Q3 2015 Interim Review
Matti Kähkönen, President and CEO Harri Nikunen, CFO October 22, 2015
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: Safety is an important driver for success
Safety is an important driver for success Continuous focus on our LTIF target of less than 1 leads to results 14 400 • Demand from customers: license to play Lost time incident frequency (LTIF) 350 • Safe working environment for the whole 12 Total number of lost time incidents personnel 300 10 • Imp
Slide 4: Markets in brief
Markets in brief Orders received totaled EUR 647 million Excluding PAS • Mining: 500 EUR million - weak demand for new equipment -9% - demand for services satisfactory, affected by 450 miners’ cost cutting with large regional 400 372 339 differencies 350 300 • Aggregates: 250 -27% - both equipment a
Slide 5: Orders received by market area
Orders received by market area Order intake in Q3/15 and change year-on-year (excluding PAS) North America Europe EUR 140 million, -3 % EUR 154 million, -11 % China EUR 36 million, -41% South and Central Africa and Middle America East EUR 125 million, -16 % EUR 60 million, -34 % Asia-Pacific EUR 132
Slide 6: Financial highlights
Financial highlights Current structure Quarterly orders received, net sales and EBITA%* • Good performance in a challenging market EUR million % situation 1 600 16 13.7 13.6 13.0 • Net sales declined largely due to lower equipment 1 400 12.4 12.4 14 sales in Minerals 1 200 11.4 10.6 12 • Minerals’ p
Slide 7: Services development
Services development Services orders and net sales Current structure Excluding PAS • Our offering and competitiveness remain strong 600 EUR million • Significant differences in market activity between 500 500 525 507 495 483 500 476 463 regions 459 446 440 436 435 410 • Minerals 400 - Performance se
Slide 8: Financial performance
Financial performance Harri Nikunen CFO
Slide 9: Group key figures
Group key figures Current structure except when noted Q1-Q3/ Q1-Q3/ EUR million Q3/2015 Q3/2014 Change % 2015 2014 Change % 2014 Orders received 647 727 -11 2,207 2,353 -6 3,074 without currency impact -11 -11 Service orders received 436 464 -6 1,434 1,459 -2 1,905 without currency impact -5 -6 Net
Slide 10: Positive margin and SG&A impact on EBITA
Positive margin and SG&A impact on EBITA Current structure, illustrative EUR million 350 300 250 200 306 265 150 100 50 0 Q3/2014 Volume Margin S, G & A FX rates & Others Q3/2015 EBITA* EBITA* Note: Volume, margin and SG&A changes calculated with constant currencies. Currency impact is included in ’
Slide 11: Gross margins remain healthy
Gross margins remain healthy Current structure EUR million 400 30.3 31.2 32.9 35 • The mix has improved (services vs. equipment) 30.0 350 28.4 28.3 27.9 30 300 252 240 261 235 25 • Margins in all businesses at a good level 250 222 224 211 20 200 15 150 10 100 50 5 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2014
Slide 12: Actions to reduce SG&A continue
Actions to reduce SG&A continue Current structure EUR million 250 25 • People costs and spend down year-on-year 20.1 18.1 19.4 18.6 200 20 18.4 17.0 17.7 167 • Total y-t-d 7% down in constant currencies 150 15 151 147 147 139 142 127 100 10 • Biggest decline in the mining equipment business 50 5 0 0
Slide 13: Minerals quarterly performance
Minerals quarterly performance EUR million % • Good profitability despite declining topline 800 16 13.6 13.5 700 14 11.9 11.3 11.2 • Net sales of new equipment declined close to 600 9.9 10.8 12 40% 500 10 400 608 706 8 743 597 662 544 563 642 300 619 6 • Gross margins held up well and SG&A declined
Slide 14: Flow Control quarterly performance
Flow Control quarterly performance Current structure EUR million % • Strong performance continued 250 25 20.2 20.7 200 18.6 20 17.3 16.7 • Good gross margins and lower SG&A 14.2 14.2 150 15 • Strong cash flow 100 194 172 177 172 185 178 179 181 194 172 179 10 149 173 170 50 5 • Operational ROCE of 4
Slide 15: Strong cash generation
Strong cash generation EUR million Q1-Q3/15 Q1-Q3/14 Comments EBITDA 538 305 Adjustments -235 54 Change in net working capital 70 -54 Lower inventories and receivables Financial items and taxes, paid -79 -137 NET CASH FROM OPERATIONS 294 168 Capex on fixed assets -31 -46 FY 2015 well below FY 2014 A
Slide 16: Capital employed and net working capital
Capital employed and net working capital Larger cash position increased capital employed NWC declined thanks to lower inventories and receivables EUR million Sep 30, Dec 31, Change EUR million Sep 30, Dec 31, Change 2015 2014 2015 2014 Net working capital 592 681 -89 Inventories 752 842 -90 Tangible
Slide 17: Solid balance sheet and financial position
Solid balance sheet and financial position EUR million Sep 30, 2015 Sep 30, 2014 Dec 31, 2014 Return on equity (ROE), % * 33.3 15.0 15.7 Return on capital employed (ROCE) before taxes, %* 26.5 / 17.1** 15.5 16.4 Gearing at the end of the period, % 15.0 49.6 45.6 Cash conversion, % 206 105 108 Debt t
Slide 18: Outlook and guidance
Outlook and guidance Matti Kähkönen President and CEO
Slide 19: Short-term market outlook
Short-term market outlook Mining Aggregates Flow Control 46% of net sales* of which 75% services 23% of net sales* of which 45% services 27% of net sales* of which 55% services Outlook: Outlook: Outlook: • Weakness to continue in the • Lower demand in the emerging • Oil & gas-related project pipelin
Slide 20: Order backlog
Order backlog Current structure EUR Million EUR million 2 000 1 800 1 780 1 735 1 600 1 672 1 445 1 400 Deliveries 1 500 1 402 1 411 after 2014 1 289 1 200 1 000 Deliveries 1 000 after 2015 800 600 Deliveries in 2014 Deliveries in 500 2015 400 200 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Order backlog Sep 30, Order
Slide 21: Confirming the guidance for 2015
Confirming the guidance for 2015 • Our net sales in 2015 will be between EUR 3,000 and 3,200 million • Our EBITA margin before non-recurring items for 2015 will be around 12.5% (12.0-13.0%) The guidance takes into account the current market activity in our customer industries and current exchange ra
Slide 22: www.metso.com
www.metso.com company/metso metsoworld metsogroup metsoworld metsogroup