Slide 1: Half-Year Financial Review 2017
January 1 – June 30, 2017 H1 Half-Year Financial Review 2017
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 a key driver throughout our value chain
Safety is a key driver throughout our value chain 14 750 People Productivity Partnership 12 650 Encourages Improves Improves 10 550 employee productivity and stakeholder 8 commitment lowers quality recognition as LTIF 450 6 and motivation costs a sustainable 2.5 * 350 partner 4 250 2 150 0 50 Lost t
Slide 4: Quarterly highlights
Quarterly highlights Matti Kähkönen President and CEO 4 © Metso Half-Year Financial Review 2017
Slide 5: Q2/2017 in brief
Q2/2017 in brief Healthy market activity continued with improvement in mining equipment Sales are not yet reflecting the growth in orders Profitability was affected mainly by low sales and mix Good progress in strategic initiatives 5 © Metso Half-Year Financial Review 2017
Slide 6: Q2/2017 financial highlights
Q2/2017 financial highlights Good order intake without large orders Services orders grew 8%; positive book-to-bill continued EUR million EUR million 761 496 480 800 733 749 1.6 1.6 433 444 423 441 663 672 628 1.17 1.13 1.13 1.11 400 1.06 1.08 600 1.10 0.99 1.2 1.01 1.02 1.00 1.2 0.98 400 0.8 0.8 200
Slide 7: Short-term market outlook for 2017
Short-term market outlook for 2017 Mining Aggregates Flow Control 45% of sales 25% of sales 25% of sales 80% services * 45% services * 60% services * Equipment Services Equipment Services Equipment Services satisfactory good good good good good Previously: weak 7 © Metso Half-Year Financial Review 2
Slide 8: Current topics in the second quarter
Current topics in the second quarter Good progress in growth initiatives − Investments in assembly capacity of Lokotracks in Finland, and in the manufacturing of crusher wear parts in South Africa totaling EUR 4.5 million − Continued expansion of distribution network in Flow Control and Aggregates D
Slide 9: Financial performance
Financial performance Eeva Sipilä CFO 9 © Metso Half-Year Financial Review 2017
Slide 10: Orders were healthy in both segments
Orders were healthy in both segments Orders increased 12%, adjusting for the big order in the comparison period Mining supported by customers’ focus on productivity Aggregates equipment orders increased Pump orders up in Flow Control Minerals: Productivity focus of customers supports growth Flow Con
Slide 11: Minerals: Aggregates' improvement offset by mining
Minerals: Aggregates’ improvement offset by mining Sales driven by double-digit growth in aggregates equipment; other businesses flat Mining services margins affected by higher raw material prices and sales mix EUR million % EUR million % 600 523 20 60 54 55 20 504 522 52 477 489 15 47 453 43 10 15
Slide 12: Flow Control: H1 performance flat with positive book-to-bill
Flow Control: H1 performance flat with positive book-to-bill Sales reflecting H2/16 order intake Low sales and related under-absorption as well as sales mix impacted profitability EUR million % EUR million % 200 20 30 28 25 167 26 25 161 155 159 15 148 152 22 17.5 20 150 10 16.6 15.6 19 20 13.2 16 -
Slide 13: Differing trending in Q2 margins
Differing trending in Q2 margins Gross margin in the second quarter reflected : - the mix in both segments, - raw material pressure in Minerals and - under-absorption in Flow Control. SG&A costs were stable and as % of sales trending downwards EUR million EUR million 29.2 % % 29.2 28.4 27.2 28.4 27.
Slide 14: Balance sheet continues to be strong
Balance sheet continues to be strong Free cash flow affected mainly by EUR 56 million increase of net working capital Paid income taxes totaled EUR 37 million Dividend of EUR 157 million paid in April Maturity structure of debt was extended - New EUR 300 million bond issued - EUR 205 million of the
Slide 15: Order backlog increased
Order backlog increased Our backlog at end of June for 2017 deliveries totaled approximately EUR 1 billion Deliveries for the remainder of the year higher compared to the end of June 2016 - We continue to expect some postponements to planned delivery timetables Order backlog Delivery timetable EUR M
Slide 16: www.metso.com
www.metso.com company/metso metsoworld metsogroup metsoworld metsogroup
Slide 17: Appendix
Appendix 17 © Metso Half-Year Financial Review 2017
Slide 18: Key figures
Key figures EUR million Q2/2017 Q2/2016 Change % H1/2017 H1/2016 Change % 2016 Orders received 749 761 -2 1,482 1,424 4 2,724 without currency effect -3 1 Orders received, services business 480 444 8 976 877 11 1,741 without currency effect 7 8 Sales 675 671 1 1,323 1,272 4 2,586 without currency ef
Slide 19: Cash flow and financial position
Cash flow and financial position June 30, 2017 Dec 31, 2016 Return on equity (ROE), annualized, % 10.2 9.0 Return on capital employed (ROCE) before taxes, annualized, % 11.1 10.4 Gearing at the end of the period, % 7.5 -1.8 Cash conversion, % 61 261 Equity to assets ratio at the end of the period, %
Slide 20: Geographical figures in Q2/2017
Geographical figures in Q2/2017 EMEA North America Asia-Pacific South and Central America 35% of sales 23% of sales 24% of sales 18% of sales Minerals sales +6% Minerals sales flat Minerals sales +16% Minerals sales flat Flow Control sales -2% Flow Control sales -1% Flow Control sales -3% Flow Contr