Slide 1: Interim Review January-September 2016
Interim Review « January 1 - September sas
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 safety leads to results 14 400 • Safe working environment for all employees 12 Lost time incident frequency (LTIF) 350 • Improved safety performance supports Total number of lost time incidents productivity 10 300 • Demand from customers:
Slide 4: Third quarter 2016 in brief
Third quarter 2016 in brief • Market environment continued to be challenging Orders received: EUR 628 million, -3% • Minerals equipment orders increased 19% • Flow Control saw weakening in the oil and gas sector Net sales: EUR 638 million, -6% • Profitability at a healthy level Adjusted EBITA margin
Slide 5: Markets in Q3/16
Markets in Q3/16 Orders received totaled EUR 628 million, -3% EUR million • Mining (orders +5%): 500 - Equipment order increase supported by small and medium sized orders; unchanged demand 450 compared to the previous quarters 400 - Book-to-bill for the equipment business has been positive for the l
Slide 6: Orders received by market area
Orders received by market area Europe North America Q3/ EUR 134 million, -4% Q3/ EUR 179 million, +16% Q1-Q3/ EUR 420 million, -13% Q1-Q3/ EUR 522 million, +3% China Q3/ EUR 34 million, -4% Q1-Q3/ EUR 119 million, -31% Africa and Middle East South and Central America Q3/ EUR 61 million, +2% Q1-Q3/ E
Slide 7: Financial highlights
Financial highlights EUR million % 13.7 13.6 • Healthy profitability in the current market 1,400 13.0 14 situation 12.4 12.4 12.0 12.1 - 12.1% adjusted EBITA margin 1,200 11.4 11.5 12 10.6 • Services margins remain good 1,000 885 921 9.3 10 791 834 800 823 758 761 • Cost control measures have delive
Slide 8: Financial performance
Financial performance Eeva Sipilä CFO
Slide 9: Minerals quarterly performance
Minerals quarterly performance • Equipment orders increased 19 percent while EUR million % 800 16 services orders decreased 3 percent 13.6 13.5 700 14 • EBITA remained at a good level even with 11.9 12.1 11.3 lower volumes, thanks to sales mix and cost 600 10.8 11.2 10.8 10.8 12 control 9.9 500 10 8
Slide 10: Flow Control quarterly performance
Flow Control quarterly performance • Order intake was low in the quarter driven by EUR million % oil & gas, both projects and day-to-day 250 25 business were affected 20.7 20.2 200 18.6 20 • Service orders stable 17.3 16.7 17.5 • Net sales down 10 percent y-o-y reflecting 150 14.2 14.2 13.1 12.8 13.
Slide 11: Volume decline biggest single factor in profitability
Volume decline biggest single factor in profitability EUR million 300 250 200 262 210 150 100 50 0 Q1-Q3/2015 Adjusted Volume Margin S, G & A FX rates & Others Q1-Q3/2016 Adjusted EBITA EBITA Note: Graph is illustrative: Volume, margin and SG&A changes have been calculated with constant currencies.
Slide 12: Gross margin is holding up despite lower volume
Gross margin is holding up despite lower volume EUR million % 350 32.9 35 30.3 31.2 • Healthy product margins in all businesses 30.0 29.2 29.2 29.2 28.4 despite lower volume indicate successful cost 300 27.9 28.4 28.3 30 and pricing management in challenging 250 261 25 markets 252 240 235 200 211 22
Slide 13: SG&A costs flat in proportion to sales
SG&A costs flat in proportion to sales EUR million % 250 25 • Efficiency measures have reduced SG&A 20.9 headcount by over 300 persons year-to-date 20.1 19.8 19.4 19.4 19.6 200 18.4 18.6 20 2016 17.7 18.1 17.0 - over 900 reduction since the beginning of 150 167 15 2015 151 147 147 149 139 142 • Acti
Slide 14: Healthy cash flow and solid financial position
Healthy cash flow and solid financial position EUR million Q3/2016 Q3/2015 Change % Q1-Q3/ 2016 Q1-Q3/ 2015 Change % 2015 EBIT 63 76 -17 183 488* -63 555* Earnings per share, EUR 0.24 0.29 -17 0.70 2.60* -73 2.95* Free cash flow 106 117 -9 242 282 -14 341 Sep 30, 2016 Dec 31, 2015 Return on equity (
Slide 15: Capital employed and net working capital
Capital employed and net working capital EUR Million EUR million 2,500 1,500 2,267 2,292 2,207 2,164 2,197 186 185 181 193 180 Other 2,000 1,000 486 482 476 343 330 450 459 Trade receivables 345 310 Tangible assets 331 592 598 609 588 Net working capital 1,500 542 500 550 550 537 Intangible assets 5
Slide 16: Outlook and backlog
Outlook and backlog Matti Kähkönen President and CEO
Slide 17: Short-term market outlook largely unchanged
Short-term market outlook largely unchanged Mining Aggregates Flow Control 50% of net sales of which 70% services* 23% of net sales of which 45% services* 24% of net sales of which 60% services* Outlook: Outlook: Outlook: • Weakness to continue in the • Satisfactory for both equipment and • Satisfac
Slide 18: Order backlog
Order backlog EUR Million EUR million 2,000 1,400 1,780 1,735 1,672 1,200 1,500 1,402 1,445 1,411 1,399 1,300 1,305 Deliveries after 1,289 1,268 Deliveries after 1,000 2015 2016 1,000 800 600 500 Deliveries in Deliveries in 400 2015 2016 0 200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2015 2016 0 Order
Slide 19: Outlook for 2016
Outlook for 2016 Metso’s overall trading conditions will be somewhat weaker in 2016 compared to 2015. Demand for our products and services is expected to develop as follows: • remain weak for mining equipment and satisfactory for mining services • remain satisfactory for aggregates equipment and ser
Slide 20: www.metso.com
www.metso.com company/metso metsoworld metsogroup metsoworld metsogroup
Slide 21: Appendix
Scat y 4 aac Hite |) img te 4 i Ties © Te; Dmetso
Slide 22: Key figures
Key figures EUR million Q3/2016 Q3/2015 Change % Q1-Q3/2016 Q1-Q3/2015 Change % 2015 Orders received 628 647 -3 2,052 2,207 -7 2,965 Without currency effect -3 -4 Orders received, services business 422 436 -3 1,299 1,438 -10 1,879 Without currency effect -3 -6 Net sales 638 680 -6 1,910 2,169 -12 2,