Metso Corporation · OMXHEX:METSO
Metso — Investor Presentation (November 2023)
70 slides from Metso's investor presentation, November 2023
Slide 1: Investor presentation
Investor presentation November 2023
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 5.3 45+ VISION: To be customers’ number one billion euro countries we choice for sustainable use of sales in 2022 operate in Earth’s natural resources. Together we deliver service, reliability, innovation and results – safely. 16,000+ 90+ employees nationalities 30 l
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: We will deliver shareholder value through various means
We will deliver shareholder value through various means Growth Delivery of synergies Reducing volatility Improving profitability Offering competitive Strengthening of dividend balance sheet 6
Slide 7: 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 7
Slide 8: Metso key financials 10/2022-9/2023
Metso key financials 10/2022-9/2023 Sales Sales by segment Sales by geography EUR 5.4 billion Aggregates 15 % Europe 27 % Minerals 23 % North and Central America 17 % Asia Pacific Planet Positive -sales* South America 23 % and Africa EUR 1.5 73 % 22 % Middle-East and India million Services share of
Slide 9: Strategy implementation continues via top priorities
Strategy implementation continues via TOP priorities Progress: 80% Progress: 70% • More focus on customer success • Upgraded financial targets Progress: 90% Progress: 100% 9
Slide 10: Financial targets support our value creation
Financial targets support our value creation Adjusted EBITA- margin of Maintaining Q3/23: Baa2/ >17% 16.1% Investment Grade BBB over the cycle credit rating Dividend payout of at least Progress in sustainability in 50% 2022: alignment with the On of earnings per share 83% 1.5°C track commitment 10
Slide 11: 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. 11
Slide 12: 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 13: 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 14: 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 15: Global infrastructure growth is expected to accelerate
Global infrastructure growth is expected to accelerate in 2025 Crushed stone price and production Aggregates capex expectations US production - 12m rolling (Mt) US price (index 2020=100) Japan price (index 2020=100) Index BEUR 2020=100 India price (index 2020=100) Mt 8 +15% -2% +5% 135 1,650 130 7 1
Slide 16: Metal prices remain at attractive levels
Metal prices remain at attractive levels. Tight monetary policy and uneven China recovery weigh on the outlook COMMODITY SUPPLY AND DEMAND PRICE DEVELOPMENT Mined Copper Supply US$/t Mined Copper Demand 12 000 kt 4% 24 10 000 LME-Copper Grade A Cash 5% 22 LTM 8 000 COPPER 20 Latest Forecast 10/2023
Slide 17: EV sales continue to grow despite macroeconomic headwinds
EV sales continue to grow despite macroeconomic headwinds COMMODITY SUPPLY AND DEMAND EV BY UNIT SALES (M) Refined supply including secondary Refined consumption +12% kt EV share in total car sales, % (lhs) 350 mn EV vehicles sold (rhs) +12% 300 40 40 COBALT 250 38 38 200 36 36 150 34 34 100 32 32 2
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: We have ambitious goals that target limiting global warming to 1.5 degrees
We have ambitious goals that target limiting global warming to 1.5 degrees We are committed to Science-Based Targets • CDP ratings: A - for climate change leadership, B - for tackling water security • CDP Supplier Engagement Leaderboard 22
Slide 23: 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 23
Slide 24: Reducing our environmental footprint
Reducing our environmental footprint We aim to minimize our footprint by reducing environmental impact in our own operations, logistics and procurement. CO2 emissions in own Logistics CO2 Spend from suppliers with operations emissions Science-Based emissions targets Net-zero -20% 30% by 2030* by 202
Slide 25: Making an environmental impact with our Planet Positive offering
Making an environmental impact with our Planet Positive offering Sales totaled EUR 1.3 billion in 2022 (+51%) • Around 140 products • Demonstrably better than the industry benchmark • Growing faster than overall sales Customer benefits: • Energy efficiency • Carbon efficiency • Optimized for using r
Slide 26: 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 27: 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 28: 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 • World-class team of experts • Efficient service processes to enable our experts to get it right – fast • Deep understanding of customer process, product des
Slide 29: Strong innovation and R&D power
Strong innovation and R&D power Close 70 30 98% 7,400+ to 30 million euros New Planet Investment in R&D centers, R&D project Patents Positive launches research and co-creating spend with in 2022 development in and customizing sustainability 2022 solutions to targets in 2022 customers 29
Slide 30: Uncompromised safety in offering and operations
Uncompromised safety in offering and operations Safe and responsible supply chain LTIFR* (2022) 1.1 Long-term target Zero harm TRIFR** (2022) Health and safety Safe products Safe and responsible 2.8 of people and services supply chain Long-term target Zero harm • Safe and secure • Products designed
Slide 31: Our industry leading diverse group of professionals
Our industry leading diverse group of professionals Our largest countries People Our people Our people Chile 2,800 by geography by employee category Finland 2,400 Brazil 1,600 Europe India 1,400 South America Blue collars China 1,000 Asia Pacific and Greater Professionals United States 960 China Man
Slide 32: 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 is 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 stronger
Slide 33: 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 34: Our offering
Our offering Metso
Slide 35: Aggregates to build modern societies
Aggregates to build modern societies Supplying equipment and services for a diverse customer base Customer benefits • Best cost, best availability, easy- to-buy, and easy-to-own solutions • Comprehensive range of brands and solutions • Less noise and dust in urban environments • Timely and reliable
Slide 36: Driven by sustainability and digitalization
Driven by sustainability 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 Our equipment is Digital customer • Installation, inspections, plant
Slide 37: Multi-brand: Serving our customers' different needs
Multi-brand: Serving our customers’ different needs Aggregates recycling Aggregates Quarries Global brands & demolition contractors OEM business Nordtrack Lokotrack High performance crushing & screening solutions Mobile crushing, screening & recycling Aggregates recycling Aggregates Quarries Regiona
Slide 38: 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 of reliability example, modularity 38
Slide 39: Presence in the whole ore to metals value chain
Presence in the whole ore to metals value chain Energy Water and circularity Emissions 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
Slide 40: 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 41: 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 42: 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 43: Generating value in battery minerals
Generating value in battery minerals
Slide 44: 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) 44
Slide 45: 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 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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 • High-efficiency gas cleaning Calcining & Roasting solutions Iron ore agglomeration • Largest Metallurgical Acid >400 Sinter
Slide 52: 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 53: Our service solutions improve customers' equipment and process efficiency sustainably
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 54: 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 55: 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 56: Q3/2023 results
01 | - Q3/2023 . results Metso
Slide 57: Q3/23 highlights
Q3/23 highlights Stable activity in mining; soft in Flat sales aggregates development Group's profitability Adj. EBITA margin target upgraded improved to 16.1% 57 October 27, 2023
Slide 58: Group key figures in Q3/23
Group key figures in Q3/23 Orders, sales and adj. EBITA EUR million % EUR million Q3/2023 Q3/2022 Change % Orders received 1,191 1,318 -10 Sales 1,319 1,305 1 Adjusted EBITA 213 202 5 % of sales 16.1 15.5 – Operating profit 189 187 1 % of sales 14.3 14.4 – Earnings per share, continuing 0.14 0.15 -7
Slide 59: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights EUR million % • Orders received EUR 269 million (EUR 351 million) ◦ Soft market activity in North America and Europe ◦ India and China improved ◦ Equipment orders -30%, services -9% • Sales EUR 308 million (EUR 362 million) ◦ Lower backlog ◦ Services share 35%
Slide 60: Minerals segment quarterly highlights
Minerals segment quarterly highlights EUR million % • Orders EUR 922 million (EUR 967 million) ◦ Stable market with continued strong proposal activity ◦ Equipment orders impacted by slow decision- making ◦ Services activity supported by continued strive for productivity improvements • Sales EUR 1,01
Slide 61: Group Income Statement
Group Income Statement EUR million Q3/2023 Q3/2022 Q1-Q3/2023 Q1-Q3/2022 2022 EUR Sales 1,319 1,305 4,049 3,614 4,970 Adj. EBITA 213 202 662 505 715 Adj. EBITA, % 16.1 15.5 16.4 14.0 14.4 Operating profit* 189 187 604 306 490 Operating profit, % 14.3 14.4 14.9 8.5 9.9 Net financial expenses -23 -16
Slide 62: Group Balance Sheet
Group Balance Sheet EUR million Sep 30, 2023 Dec 31, 2022 EUR million Total goodwill and intangible 1,882 1,972 assets Total property, plant and 458 407 equipment Right-of-use assets 115 115 Other non-current assets 294 262 Inventories 1,998 1,846 Receivables (trade and other) 1,589 1,551 Liquid fun
Slide 63: Cash flow
Cash flow EUR million Q3/2023 Q3/2022 Q1-Q3/2023 Q1-Q3/2022 2022 EUR million Profit for the period 124 131 410 195 301 Adjustments: Depreciation and amortization 39 39 117 116 156 Financial expenses, net 23 16 55 47 63 Income taxes 47 47 145 73 113 Other items -47 6 -25 20 65 Total adjustments 62 10
Slide 64: Working capital
Working capital EUR million EUR million 64 October 27, 2023
Slide 65: Financial position
Financial position • Ratings: EUR million Sep 30, 2023 Sep 30, 2022 Dec 31, 2022 ◦ S&P Global: 'BBB' with stable outlook (April 24, 2023) Liquid funds 359 467 601 ◦ Moody’s: ‘Baa2’ long-term rating with stable outlook (April 2021; confirmed on May 2, 2023) Net debt 815 690 684 • Average interest rat
Slide 66: Group profitability target upgraded
Group profitability target upgraded • New adjusted EBITA target: exceeding 17% over the cycle • Upgrade is based on - focused segments - services growth - further performance improvements • Other financial targets unchanged 66 October 27, 2023
Slide 67: ESG highlights in Q3/2023
ESG highlights in Q3/2023 EUR million Planet Positive sales grew 34% y-o-y to EUR 1.5 billion • One large EUR 85 million copper project order • Good pipeline of small and medium-sized orders Supplier engagement program progressed well • 24% of supplier spend is with suppliers that have committed to
Slide 68: Market Outlook
Market Outlook Metso expects the market activity to remain at the current level in both Minerals and Aggregates. In its previously published outlook, Metso expected the overall market activity to remain at the current level in Minerals and to slightly decline in Aggregates. According to the company'
Slide 69: Events after Q3
Events after Q3 Segment reporting update and restated information publishing based on the new structure Tedd Engineering acquisition closed EUR 85 million contract for delivery of a copper concentrator to Kazakhstan 69
Slide 70: Partner for positive change
Partner for positive change metso.com