Slide 1: Q1 2014 Interim Review
Matti Kähkönen, President and CEO Harri Nikunen, CFO April 24, 2014
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: Content
Content 1. Quarterly highlights 2. Metso value creation 3. Financial performance 4. Outlook and guidance 3 © Metso
Slide 4: Safety is our top priority
Safety is our top priority • We are committed to taking personal responsibility for our own safety and for the safety of others • All incidents can be prevented • Our LTIF has been trending down 16 400 14 350 12 300 10 250 8 200 6 4 150 100 Target: LTIF less than 1 2 50 0 0 Long term occupational sa
Slide 5: Q1/2014 highlights
Q1/2014 highlights Matti Kähkönen President and CEO
Slide 6: Quarterly highlights
Quarterly highlights • Oil and gas demand remained strong; construction is recovering • Services business picked up sequentially • Demand for mining equipment and projects seems to be bottoming out • Profit improvement program proceeded according to plan • Fluctuation of currencies had a significant
Slide 7: Order intake
Order intake Metso Metso EUR million EUR million 1,600 1,466 5,000 4,466 1,400 4,215 1,168 4,000 3,709 1,200 1,117 1,100 1,055 1,031 3,281 965 982 968 1,000 885 875 3,000 826 850 838 828 825 767 2,307 800 637 558 550 563 2,000 600 400 1,000 200 0 0 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2
Slide 8: Order intake by country
Order intake by country % of all EUR million Q1/2014 Q4/2013 Change % orders USA 135 114 19 15 China 75 51 47 9 Brazil 70 94 -24 8 Canada 54 27 100 6 Australia 48 45 7 5 Finland 38 42 -11 4 Chile 37 135 -72 4 India 35 25 40 4 Russia 30 27 11 3 Sweden 27 23 17 3 • Orders from the US and Canada were s
Slide 9: Net sales
Net sales Metso Metso EUR million EUR million 1,600 5,000 4,282 1,400 3,858 1,156 4,000 3,672 1,200 1,116 1,132 1,075 988 1,018 3,018 959 915 937 2,902 1,000 898 871 901 3,000 817 800 735 746 685 736 726 748 744 647 2,000 600 400 1,000 200 0 0 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 S
Slide 10: EBITA* and EBITA* margin
EBITA* and EBITA* margin EUR million % % 200 18 600 12.8 14 16 11.4 14.4 10.9 10.9 12 13.7 500 13.0 12.9 14 10.1 150 12.2 12.0 12.2 11.6 11.9 11.9 11.9 10 11.2 12 400 10.8 10.7 10.2 9.4 9.1 8 8.7 8.7 8.7 10 100 8.0 300 8 6 486 496 149 147 136 129 138 129 6 200 399 118 328 4 50 107 107 103 292 89 86
Slide 11: Metso value creation
Metso value creation • Significant shareholder value has been created through the demerger • Both Metso and Valmet share prices have shown positive development • We will continue leveraging our • unrivaled services presence and capabilities • strong global market positions to capitalize on growth op
Slide 12: Our value creation platform
Our value creation platform Assets Strategy Targets Well-positioned to benefit from Services > Market long-term growth trends Sales growth growth Global footprint, with leading positions in all the markets we Technology serve offering > 10% Services p.a. sales Services-driven business model Gr
Slide 13: Financial performance
Financial performance Harri Nikunen, CFO
Slide 14: Group key figures
Group key figures EUR million Q1/2014 Q1/2013 Change % 2013 Orders received 875 1,031 -15 3,709 without currency impact -8 Services orders received 545 589 -7 2,038 without currency impact 2 Net sales 817 915 -11 3,858 without currency impact -3 Services net sales 438 466 -6 1,976 % of net sales 54
Slide 15: Stable margins and visible cost savings
Stable margins and visible cost savings EUR million 120 103 -36 100 17 -1 88 80 5 60 40 20 0 Q1/2013 Volume Margin S,G&A Others Q1/2014 EBITA* EBITA* * Before non-recurring items 15 © Metso
Slide 16: Balance sheet key figures
Balance sheet key figures Q1/2014 Q1/2013 2013 Return on equity (ROE), % 14.9 18.2 19.0 Return on capital employed (ROCE) before 14.3 17.0 18.6 taxes, % Gearing at the end of the period, % 42.8 32.7 41.6 Cash conversion, % 114 84 105 Debt to capital, % 48.9 49.4 47.0 Net debt / EBITDA 1.2 0.8 1.0 In
Slide 17: Indebtedness and net working capital
Indebtedness and net working capital Net debt and gearing Net working capital % EUR million % EUR million 600 60.0 800 20 765 702 700 491 651 652 500 50.0 458 18 600 18.0 400 377 42.8 40.0 17.1 370 41.6 16.9 500 16.4 16 32.7 300 30.0 400 28.4 14 300 200 20.0 200 12 100 10.0 100 0 0.0 0 10 2012 Q1/20
Slide 18: Mining and Construction key figures
Mining and Construction key figures EUR million Q1/2014 Q1/2013 Change % 2013 Orders received 624 786 -21 2,855 without currency impact -12 Services orders received 413 471 -12 1,616 Net sales 631 744 -15 3,070 without currency impact -7 Services net sales 347 383 -10 1,579 % of net sales 55 52 51 E
Slide 19: Mining and Construction
Mining and Construction Rolling 12-month net sales and EBITA%* % EUR million 4,000 16 3,500 14 3,000 12 2,500 10 2,000 8 1,500 6 1,000 4 500 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2
Slide 20: Automation key figures
Automation key figures EUR million Q1/2014 Q1/2013 Change % 2013 Orders received 252 254 -1 902 without currency impact 4 Services orders received 132 118 12 422 Net sales 186 184 1 854 without currency impact 6 Services net sales 91 83 10 398 % of net sales 49 45 47 EBITA * 20 16 22 116 % of net sa
Slide 21: Automation
Automation Rolling 12-month net sales and EBITA%* % EUR million 1,000 18 900 16 800 14 700 12 600 10 500 8 400 6 300 4 200 100 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 Servi
Slide 22: Profit improvement program proceeding according to plan
Profit improvement program proceeding according to plan • Program was announced in autumn 2013 • We are responding to the soft market environment in mining and adjusting to the new Group structure • The current scope encompasses headcount reduction of 1,300-1,400 • Targeted gross savings total EUR 1
Slide 23: Major structural changes in headcount during 2013 and Q1/2014
Major structural changes in headcount during 2013 and Q1/2014 Headcount December 31, 2012 16,612 Acquisitions + 623 Divestments - 326 Headcount after structural changes 16,909 Profit improvement program and other changes - 711 Headcount March 31, 2014 16,198 Reduction in Europe and North America ~ 9
Slide 24: Outlook and guidance
Outlook and guidance Matti Kähkönen President and CEO
Slide 25: Market outlook
Market outlook Mining Construction Automation 55% of net sales 20% of net sales 22% of net sales 55% service intensity 40% service intensity 45% service intensity Current demand: Current demand: Current demand: • Weak for the equipment and • Satisfactory for the equipment and • Good in oil and gas;
Slide 26: Order backlog
Order backlog EUR million EUR million 3,000 3,000 2,506 2,475 2,500 2,324 Deliveries after 2013 1,927 1,944 2,000 2,000 1,731 Deliveries after 2014 1,500 Deliveries in 1,000 1,000 2013 Deliveries in 2014 500 0 0 2010 2011 2012 Q1 2013 2013 Q1 2014 Order backlog Mar 31, 2013 Order backlog Mar 31, 201
Slide 27: Guidance for 2014
Guidance for 2014 Based on our market outlook, backlog for 2014, current exchange rates and ongoing cost-efficiency actions, we estimate that • our net sales in 2014 will be somewhat below 2013 • and EBITA margin before non recurring items for 2014 will be at around 12% 27 © Metso
Slide 28: www.metso.com
www.metso.com company/metso metsoworld metsogroup metsoworld metsogroup