Slide 1: Q1 2016 Interim Review
Matti Kähkönen, President and CEO Harri Nikunen, CFO April 22, 2016 1
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 an important driver for success
Safety is an important driver for success Continuous focus on safety leads to results 14 400 • Safe working environment for all employees Lost time incident frequency (LTIF) • Improved safety performance supports 12 350 Total number of lost time incidents productivity 10 300 • Demand from customers:
Slide 4: The first quarter 2016 in brief
The first quarter 2016 in brief • Challenging market environment continued; aggregates Order intake: market was slightly positive EUR 663 million, -10% Net sales: • Orders were higher than net sales with book-to-bill of 1.1 EUR 601 million, -18% Adjusted EBITA margin: • Both orders and net sales imp
Slide 5: Markets in Q1/16
Markets in Q1/16 Orders received totaled EUR 663 million, -10% • Mining (orders -17%): EUR million - Equipment orders close to Q1/15 level 500 - Services orders declined 19%, mainly due to 450 -17% capex driven services 406 400 • Aggregates (orders -1%): 350 335 - Equipment orders increased 11% 300
Slide 6: Orders received by market area
Orders received by market area Q1/16 compared to Q1/15 Europe North America Q1 EUR 146 million, -18% Q1 EUR 172 million, -20% China Q1 EUR 45 million, -13% Africa and Middle East South and Central America Q1 EUR 68 million, -10% Q1 EUR 121 million, -27% Asia-Pacific Q1 EUR 111 million, -1% 50% from
Slide 7: Financial highlights
Financial highlights Quarterly orders received, net sales and EBITA*% • Satisfactory adjusted EBITA margin EUR million 13.7 13.6 % 1,400 13.0 14 12.4 • Services profitability improved in both segments 1,200 11.4 12.4 12.0 12 10.6 • Lower net sales in the equipment businesses 1,000 885 921 9.3 10 791
Slide 8: Services development
Services development Services orders and net sales • Our offering and competitiveness remain strong; EUR million internal actions help keeping margins healthy 600 525 500 500 507 495 • Mining 500 476 464 458446 483 436 481 - Customers’ cost-cutting has intensified 441 435 441 433 410 409 - Demand fo
Slide 9: Financial performance
Financial performance Harri Nikunen CFO
Slide 10: Group key figures
Group key figures EUR million Q1/2016 Q1/2015* Change % 2015* Orders received 663 737 -10 2,965 without currency impact -6 Service orders received 433 507 -15 1,879 without currency impact -9 Net sales 601 733 -18 2,923 without currency impact -14 Services net sales 409 441 -7 1,840 without currency
Slide 11: Margins holding up and cost savings continue
Margins holding up and cost savings continue Illustrative EUR million 90 80 70 60 50 78 56 40 30 20 10 0 Q1/2015 Volume Margin S, G & A FX rates & Others Q1/2016 Adjusted EBITA Adjusted EBITA Note: Volume, margin and SG&A changes calculated with constant currencies. Currency impact is included in ’F
Slide 12: Gross margins at a healthy level
Gross margins at a healthy level EUR million % 350 30.3 31.2 32.9 35 • Product and services businesses maintained 30.0 29.2 29.2 300 27.9 28.4 28.3 30 good margins 250 25 • Equipment margins were negatively affected by 261 252 240 235 low volume 200 222 224 220 20 211 • COGS personnel was reduced by
Slide 13: Actions to reduce SG&A continue
Actions to reduce SG&A continue EUR million % 250 25 • SG&A headcount was reduced by 168 persons 20.1 20.9 19.4 19.8 during 1Q (FY 2015: 595) 200 18.4 18.1 18.6 20 17.7 17.0 • The SG&A spend was significantly reduced 15 150 151 167 147 147 150 • No significant credit losses 139 142 126 126 10 100 50
Slide 14: Minerals quarterly performance
Minerals quarterly performance EUR million % 800 16 13.6 • EBITA margin negatively impacted by a 13.5 700 14 11.9 12.1 11.3 11.2 slowdown of equipment deliveries 600 10.8 12 9.9 500 10 8.1 400 706 8 • Services net sales declined slightly, whereas 300 608 662 597 619 743 563 642 501 585 574 494 6 558
Slide 15: Flow Control quarterly performance
Flow Control quarterly performance EUR million % 250 25 • Good order intake 20.2 20.7 • Product and gross margins holding up, SG&A 200 18.6 20 17.3 16.7 in good control 150 14.2 14.2 13.1 12.8 15 • EBITA decline driven by volume 194 100 194 185 179 180 10 • Services profitability improved 177 172 14
Slide 16: Solid balance sheet and financial position
Solid balance sheet and financial position EUR million March 31, 2016 December 31, 2015 Return on equity (ROE), % * 7.8 33.1 Return on capital employed (ROCE) before taxes, %* 9.4 16.1** Gearing at the end of the period, % 6.9 10.6 Cash conversion, % 230 180 Debt to capital, % 38.6 36.3 Net debt / E
Slide 17: Good cash generation continued
Good cash generation continued EUR million Q1/2016 Q1/2015 2015 Comments EBITDA 65 84 624 Adjustments 5 4 -232 Change in net working capital -11 36 64 Financial items and taxes, paid 8 -33 -96 NET CASH FROM OPERATIONS 67 91 360 Capex on fixed assets -6 -12 -46 Low investment needs Proceeds from sale
Slide 18: Capital employed and net working capital
Capital employed and net working capital Larger cash position increased capital employed Customer-related NWC declined EUR million Mar 31, Dec 31, Change EUR million Mar 31, Dec 31, Change 2016 2015 2016 2015 Net working capital 609 598 11 Inventories 726 715 11 Tangible assets 330 343 -13 Trade rec
Slide 19: Outlook and backlog
Outlook and backlog Matti Kähkönen President and CEO
Slide 20: No changes in the short-term market outlook
No changes in the short-term market outlook Mining Aggregates Flow Control 48% of net sales of which 75% services 23% of net sales of which 45% services 25% of net sales of which 55% services Outlook: Outlook: Outlook: • Weakness to continue in the • US, India, and Europe show positive • Oil & gas c
Slide 21: Order backlog
Order backlog EUR million EUR Mi l l i on 2,000 1,600 1,780 1,735 1,672 1,400 Deliveries after 2015 1,445 Deliveries 1,500 1,402 1,411 1,200 after 2016 1,290 1,268 1,300 1,000 1,000 800 Deliveries in Deliveries in 600 2015 2016 500 400 200 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0 2014 2014 2014 2014 2015 2015
Slide 22: Outlook for 2016
Outlook for 2016 Metso’s overall trading conditions will be somewhat weaker in 2016 compared to 2015. Demand for our products and services is expected to develop as follows: • remain weak for mining equipment and satisfactory for mining services • remain satisfactory for aggregates equipment and ser
Slide 23: www.metso.com
www.metso.com company/metso metsoworld metsogroup metsoworld metsogroup