Metso Corporation · OMXHEX:METSO

Metso — Outotec — FY2018 Earnings Presentation

19 slides from Metso's earnings presentation, Feb 8, 2019

1. Slide 1: Significant improvement in performance excluding ilmenite smelter project provision

   Significant improvement in performance excluding ilmenite smelter project provision Financial Statements Review 2018 Sustainable use of Earth’s natural resources

2. Slide 2: Current status of the ilmenite smelter project

   Current status of the ilmenite smelter project • EUR 350 million EPC order received in May 2012 • Start-up of the furnace was safely discontinued in October 2018 • Agreement with the customer to find out the root causes October 2018 • Investigation was started in December 2018 • EUR 110 million prov

3. Slide 3: Market development

   Market development CEO Markku Teräsvasara 3 February 8 Financial Statements Review 2018 © Outotec – All rights reserved

4. Slide 4: Minerals and metals market continued to advance in H1, in H2 larger investments delayed

   Minerals and metals market continued to advance in H1, in H2 larger investments delayed Demand Growth - Services In both Larger - Brownfield investments Capex & investments - Modernizations Services - Delays in decision making Metals+ - Copper, gold - Battery metals - Iron ore pelletizing - Sulfuric

5. Slide 5: Order intake growth from MEW plant & equipment, spare parts and modernizations

   Order intake growth from MEW plant & equipment, spare parts and modernizations MEUR MEUR MEUR MEUR 5 February 8 Financial Statements Review 2018 © Outotec – All rights reserved

6. Slide 6: Sales distribution

   Sales distribution Sales by region Sales by end product Lithium Other materials Nickel 3% 7% APAC 4% 19 % Energy and environmental Copper 6% 35 % Other metals 8% EMEA 54 % Aluminum Americas 8% 27 % Iron Precious 12 % metals 17 % 6 February 8 Financial Statements Review 2018 © Outotec – All rights re

7. Slide 7: Fewer large equipment orders in Minerals Processing in Q4, good development in services

   Fewer large equipment orders in Minerals Processing in Q4, good development in services Americas 30 (30) % EMEA 48 (51) % APAC 22 (19) % Feasibility study for a copper Battery chemicals technology to smelter in Indonesia ~10 M€ Finland ~34 M€ BATTERY COPPER CHEMICALS Process equipment to silver conc

8. Slide 8: Key financials

   Key financials CFO Jari Ålgars 8 February 8 Financial Statements Review 2018 © Outotec – All rights reserved

9. Slide 9: Significant improvement in performance excluding ilmenite smelter project provision

   Significant improvement in performance excluding ilmenite smelter project provision Q4 Q4 Q1-Q4 Q1-Q4 Change, Change in EUR million 2018 2017 2018 2017 comparable % currency, % Sales 338 341 1,276 1,144 12 16 Service sales 163 146 497 480 3 9 Share of services in sales, % 48 43 39 42 Gross margin, %

10. Slide 10: aEBIT was impacted by ilmenite smelter project provision

    aEBIT was impacted by ilmenite smelter project provision 34 -46 aEBIT Q1-Q4/2017 Volume Margin & FX Ilmenite smelter Fixed costs aEBIT Q1-Q4/2018 project provision 10 February 8 Financial Statements Review 2018 © Outotec – All rights reserved

11. Slide 11: Good progress in Minerals Processing – service sales improved profitability

    Good progress in Minerals Processing – service sales improved profitability Change in Minerals Processing Q1-Q4 Q1-Q4 Change, comp. EUR million 2018 2017 % currency, % Order intake 719 727 -1 4 Sales 758 668 13 19 MP sales and adjusted EBIT development Service sales 344 306 13 20 by quarter 350 20%

12. Slide 12: Solid order intake and sales development, ilmenite smelter project provision impacted profitability in Metals, Energy & Water

    Solid order intake and sales development, ilmenite smelter project provision impacted profitability in Metals, Energy & Water Change in Metals, Energy & Water Q1-Q4 Q1-Q4 Change, comp. EUR million 2018 2017 % currency, % Order intake 532 478 11 15 Sales 519 475 9 12 MEW sales and adjusted EBIT devel

13. Slide 13: Financial position stable

    Financial position stable Q4 Q4 2018 2017 Net cash from operation activities 70 40 Net interest-bearing debt*, EUR million -38 -6 Gearing*, % -10 -1 Equity-to-assets ratio*, % 33 41 Return on investment, %, LTM -11 3 Return on equity, %, LTM -16 1 Net working capital at the end of the period, EUR mi

14. Slide 14: Market outlook and guidance

    Market outlook and guidance CEO Markku Teräsvasara 14 February 8 Financial Statements Review 2018 © Outotec – All rights reserved

15. Slide 15: Simplifying our organization and way of working – progressed as planned

    Simplifying our organization and way of working – progressed as planned • Simplified structure and streamlined global functions (July 1) • Reduction of 200 persons • Simplifying selected business processes continue • Some non-profitable operations discontinued • EUR 25 million savings, full impact e

16. Slide 16: Market outlook solid

    Market outlook solid New uses such as EVs support long-term view - Copper - Cobalt - Nickel - Lithium Solid market - complex ores and process challenges offer attractive opportunities - New energy efficient Prospects in technology several metals - Digital solutions - Copper, gold, - Tailings reproce

17. Slide 17: Financial guidance for 2019

    Financial guidance for 2019 Based on the current market outlook, we expect our sales to increase, and our aEBIT* to increase significantly from the 2018 aEBIT (EUR 63.8 million) without the provision for the ilmenite smelter project. *Excluding restructuring- and acquisition-related items, as well a

18. Slide 18: Achievements in our focus areas in 2018

    Achievements in our focus areas in 2018 Product Customer focus Service business Project excellence Our people competitiveness - Significant - Productization - Supply costs ‐ New partnerships for ‐ >300 service people improvement in advanced decreased for several large EPC deliveries trained and cert

19. Slide 19: OUtToOtec jf reese coe

    OUtToOtec jf reese coe

Outotec — FY2018 Earnings Presentation on 6ix