Metso Corporation · OMXHEX:METSO
Metso — Metso Outotec — Investor Presentation (August 2022)
66 slides from Metso's investor presentation, August 2022
Slide 1: Investor presentation August 2022
Investor presentation August 2022
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: Enabling sustainable modern life
Enabling sustainable modern life 4.2 50+ VISION: To be customers’ number one billion euro countries we choice for sustainable use of sales in 2021 operate in Earth’s natural resources. Together we deliver service, reliability, innovation and results – safely. 15,600+ 90+ employees nationalities 30 l
Slide 4: Our businesses
Our businesses Aggregates Minerals Metals Services Consumables Crushing and Equipment, process Process Spare parts, Comprehensive screening equipment islands, and plants for technologies, refurbishments and offering of wear for the production of minerals processing solutions, and professional servic
Slide 5: 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 5
Slide 6: Our investment highlights
Our investment highlights Comprehensive Strong Aftermarket Industry leader in Industry leader offering Presence & technology and Capability R&D We have created a stronger platform in an industry that is transforming through consolidation, digitalization and an increased focus on sustainability Attra
Slide 7: Metso Outotec key financials 2021
Metso Outotec key financials 2021 Sales Sales by segment Sales by geography EUR 4.2 billion 12% Aggregates 15% Europe 28% Minerals 28% North and Central Metals America 16% Asia Pacific Planet Positive sales South America 20% and Africa EUR 592 million 60% 21% Middle-East and India Services share of
Slide 8: Metso Outotec – Enabling sustainable modern life
Metso Outotec – 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, innovati
Slide 9: Strategy implementation continues through four top priorities
Strategy implementation continues through four top priorities Financial Customer Sustainability Performance performance success culture 9
Slide 10: Target to be industry leading company with strong financial performance
Target to be industry leading company with strong financial performance Adjusted EBITA Maintaining margin of investment >15% grade credit over the cycle rating Dividend payout of Progress in sustainability at least in alignment with the 50% 1.5°C of earnings per share commitment 10
Slide 11: 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 For best end result, process use knowledge businesses an image that is 16:9 • Standardized and pre- • Pro
Slide 12: Metso Outotec growth areas
Metso Outotec growth areas Products with Sustainable Automation & China & high aftermarket offering digitalization Silk Road intensity 12 12
Slide 13: Integration synergy targets achieved ahead of plan
Integration synergy targets achieved ahead of plan July End 2019 2021 Targets exceeded, integration Original synergy targets period has ended Cost synergies by end 2022 Cost synergies EUR 100 million EUR 142 million Revenue synergies by end 2022 Revenue synergies EUR 150 million EUR 110 million in s
Slide 14: Action taken in Metals & Recycling
Action taken in Metals & Recycling • Metals strategic review started in January 2022 • Hydrometallurgy moved to Minerals • Waste Recycling business divestment completed in Dec 2021 • Metals Recycling business divestment completed in June 2022 14
Slide 15: Our core industries have a solid growth outlook…
Our core industries have a solid growth outlook… AGGREGATES MINERALS PROCESSING METAL REFINING – equipment market growth – equipment market growth – equipment market growth EUR billion EUR billion EUR billion 10 4 ~6 6 ~8-10 8 ~3 5 ~7 CAGR CAGR ~2-3 CAGR 19-23F 6 19E-23F 19E-23F 4 4-6% 2 3-6% 3-6% 4
Slide 16: …and our exposure is balanced…
…and our exposure is balanced… ~80% of sales spread across 4 major applications 9% 10% 30% Copper Aggregates Iron Gold Battery metals 13% Other metals 24% 14% Excluding recycling and other industries 16
Slide 17: …between three major growing metals…
…between three major growing metals… MINING CAPEX PRODUCTION 2019-2023 Current market Share of M:O sales M:O addressable market, EUR billion balance COPPER (total committed) 24 21 Slight oversupply Mt +4% Deficit expected >2023 30% 2019 2023 ~8-10 ~7 CAGR IRON ORE 2.534 3-6% 2.423 Mt Slight oversupp
Slide 18: …and a good position in fast-emerging battery metal processing and recycling markets
…and a good position in fast-emerging battery metal processing and recycling markets GLOBAL LI-ION DEMAND 2019-30, Mt Current market Future market BATTERY CELL balance balance NICKEL DEMAND (battery-grade / +23% p.a. HPAL route) GWh 1.19 Slight oversupply Shortage of battery-grade is expected after
Slide 19: Sustainability, R&D and people
Sustainability, R&D and people
Slide 20: 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 Up to 5% of the world's energy consumption is used in comminution Around 1% of the worlds power • We must improve our sustainability performance throughout the value chain. runs through our • Our custo
Slide 21: 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 • Corporate Knights 100 most sustainable companies list • CDP ratings: A - for climate change leadership, B - for tackling water security • CDP Supplier Engagement Leaderboard 21
Slide 22: Enabling customers to reach their sustainability targets
Enabling customers to reach their sustainability targets Planet Positive product for every part of the value chain All R&D with Accelerating Partnering with Own operations Zero harm sustainability Planet Positive suppliers to CO2 emissions targets sales decarbonize the net zero by 2030 supply chain
Slide 23: Our handprint is significantly bigger than our footprint
Our handprint is significantly bigger than our footprint CO2 Handprint** in 2021 CO2 Footprint* in 2021 10.3 million <1 million tonnes tonnes *Footprint = emissions generated in production, logistics, **Handprint = emissions avoided in customer operations across purchased goods and services as well
Slide 24: Our environmental footprint
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 2025 * by 20
Slide 25: Making an environmental impact with our sustainable offering
Making an environmental impact with our sustainable offering Planet Positive criteria: • Energy efficiency • Over 100 Planet Positive products and services • Carbon efficiency • • Optimized for using renewable energy Water efficiency – Demonstrably better than the industry benchmark • Less pollution
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 15+ 70 30 95% 6,800+ million euros New Planet Investment in R&D centers, R&D project Patents Positive launches research and co-creating spend with in 2021 development in and customizing sustainability 2021 solutions to targets in 2021 customers 29
Slide 30: Uncompromised safety in offering and operations
Uncompromised safety in offering and operations Safe and responsible supply chain LTIFR* (2021) 1.1 Long-term target Zero harm TRIFR** (2021) Health and safety Safe products Safe and responsible 3.2 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 2,300 by geography by employee category Finland 2,300 Brazil 1,600 India 1,200 United States 1,000 Europe Blue collars China 970 South America Professionals Australia 870 Asia-Pacific Managem
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 Outotec leadership team
Metso Outotec leadership team Extended Metso Outotec Executive Team President & CEO Pekka Vauramo Metso Outotec CFO’s office Legal & Compliance HR Executive Eeva Sipilä Nina Kiviranta Carita Himberg Team Aggregates Minerals Metals Services Consumables Markku Simula Markku Teräsvasara Piia Karhu Sami
Slide 34: Our offering
Our offering Metso:Outotec
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: Customers benefit from a global network of over 200 distributors
Customers benefit from a global network of over 200 distributors Nordics 11 Canada Russia & CIS 8 Europe 5 China 47 36 USA New distributors 56 Middle East in 2021 Mexico & Central America 6 Asia Pacific 12 Africa 18 42 Pacific Rim 11 Australasia 15 9 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: 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 40
Slide 41: 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 42: Comprehensive expertise with a full portfolio of sustainable solutions for all ore types and processes
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 43: Examples of our recent innovations for minerals processing
Examples of our recent innovations for minerals processing Foresight™ & Activated Carbon (AC) filter Geminex™ digital twin Concorde Cell™ FIT™ crushing stations HRC™e HPGR Courier™ 6G SL analyzer Metso Outotec Linear Reactorwell™ CycloneSense™ Premier™ & Metallurgical Select™ horizontal Sampler (LMS
Slide 44: Advanced solutions from ore or concentrate to metal
Advanced solutions from ore or concentrate to metal Metso Outotec for metals >7 million tonnes of CO2 emissions avoided in 2021 by using Metso Outotec technologies Global leader in process Unique portfolio with best-in- Leading solutions for R&D focus on carbon-free technologies for metal and class
Slide 45: 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 46: 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 47: Life Cycle Services - unique maintenance and optimization capabilities and process expertise
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 48: 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 Outotec and retrofits installed base • Process optimizatio
Slide 49: 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 50: Not all spare parts are created equal
Not all spare parts are created equal Screening Metso Outotec 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 crusher
Slide 51: Q2/2022 and Half-year results
Q2/2022 and Half-year results
Slide 52: Q2/22 in short
Q2/22 in short Strong activity in the mining market Solid sales growth Profitability improved; Good progress affected by in sustainability currencies Wind-down of the business in Russia resulted in a EUR 150 million non-recurring charge
Slide 53: Group key figures
Group key figures EUR million % EUR million Q2/2022 Q2/2021 Change % Orders received 1,610 1,360 18 Sales 1,295 1,010 28 Adjusted EBITA 155 131 19 % of sales 12.0 12.9 – Operating profit* -13 97 -113 % of sales -1.0 9.6 – Earnings per share, continuing -0.02 0.07 – operations, EUR Cash flow from ope
Slide 54: Aggregates segment quarterly highlights
Aggregates segment quarterly highlights • Orders received EUR 363 million (EUR 363 EUR million % million) ◦ North America strongest market ◦ Equipment -6%, services +17% • Sales EUR 368 million (EUR 320 million) ◦ Growth supported by backlog ◦ Services share 35% (31%) • Adjusted EBITA EUR 48 million
Slide 55: Minerals segment quarterly highlights
Minerals segment quarterly highlights • Orders EUR 1,176 million (EUR 789 million) EUR million % ◦ Strong market activity and order growth ◦ Equipment orders +80% ◦ Services orders +29% • Sales EUR 810 million (EUR 622 million) ◦ Equipment +63% ◦ Services +14% ◦ Services share 59% (67%) • Adjusted E
Slide 56: Metals segment quarterly highlights
Metals segment quarterly highlights • Orders received EUR 71 million (EUR 208 EUR million % million) ◦ No large orders booked during the quarter due to timing • Sales EUR 117 million (EUR 68 million) ◦ Supported by increased deliveries from backlog ◦ Services share 12% (16%) • Adjusted EBITA EUR 11
Slide 57: Russia business update
Russia business update • Wind-down continued in the second quarter • Deliveries totaled EUR 67 million in the second quarter • Provision of EUR 150 million expected to cover the remaining exposure • Group’s order backlog reduced by EUR 380 million at the end of June
Slide 58: Income Statement
Income Statement EUR million Q2/2022 Q2/2021 Q1-Q2/2022 Q1-Q2/2021 2021 Sales 1,295 1,010 2,459 1,935 4,236 EUR Adj. EBITA 155 131 312 245 547 Adj. EBITA, % 12.0 12.9 12.7 12.7 12.9 Operating profit* -13 97 127 188 425 Operating profit, % -1.0 9.6 5.1 9.7 10.0 Net financial expenses -11 -11 -31 -18
Slide 59: Balance Sheet
Balance Sheet EUR million Jun 30, 2022 Jun 30, 2021 Dec 31, 2021 EUR million Intangible assets 2,007 2,041 2,002 Total property, plant and equipment 394 372 373 Right-of-use assets 125 132 127 Other non-current assets 313 250 234 Inventories 1,665 1,154 1,269 Receivables (trade and other) 1,460 1,11
Slide 60: Cash Flow
Cash Flow EUR million Q2/2022 Q2/2021 Q1-Q2/2022 Q1-Q2/2021 2021 EUR million Profit for the period -24 86 64 145 342 Adjustments: Depreciation and amortization 39 44 77 83 167 Financial expenses, net 11 11 31 18 39 Income taxes -5 23 26 43 92 Other items 11 -23 14 -14 -2 Total adjustments 56 55 148
Slide 61: Financial position
Financial position • Repayment of matured EUR 100 million EUR million Jun 30, 2022 Jun 30, 2021 Dec 31, 2021 private placements Liquid funds 451 469 473 • EUR 100 million loan drawn from the Nordic Net debt 617 686 470 Investment Bank Gearing, % 28.5 33.5 20.9 • EUR 99 million dividend paid in May •
Slide 62: Portfolio development
Portfolio development Review of the Metals businesses under way Market active for small M&A ◦ Tesab Engineering acquired in April Divestment of Metal Recycling completed
Slide 63: Sustainability highlights in Q2/22
Sustainability highlights in Q2/22 Strong order flow of Planet Actions completed to Sustainability-Linked Positive technologies reduce footprint CO2 Finance Framework emissions published
Slide 64: New products
Planet Positive highlights First fully Planet Positive comminution circuit order (incl. HPGRs and Vertimills) Metrics for real-time 24/7 monitoring of screens and Lokotrack mobile crushers Tailings Management Solutions for tailings thickening and dewatering and tailings handling New products through
Slide 65: Market Outlook
Market Outlook Market activity is expected to remain at the current level with the minerals market remaining strong and aggregates market declining slightly. According to its disclosure policy, Metso Outotec’s market outlook describes the expected sequential development of market activity during the
Slide 66: Partner for positive change
Partner for positive change mogroup.com