View
212
Download
0
Category
Preview:
Citation preview
© Metso © Metso
Content
1. Value creation: Strong track record
2. Strategy: Strong portfolio 3. Financial targets: Roadmap 4. Our investment proposition
© Metso Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen 2
© Metso © Metso
3
5
7
9
11
13
15
50
100
150
200
250
300
350
400
450
Safety is our top priority Continuous focus on our LTIF target of less than 1 leads to results
* LTIF in September 2014 3
Actions leading to improvement • Active and visible
management support, follow up and action plans
• Health, safety and environment mindset development and self audits
• Learning from every incident
• Full compliance with minimum safety standards
• Continuous development of professional ability
Lost time incident frequency (LTIF)
Total number of lost time incidents (LTI)
Lost Time Incident Frequency Number of LTI's
LTIF 3.3*
LTIF and number of LTI’s development 2010 through September 2014
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
This is Metso
4
16,000 employees in 270
locations in more than 50 countries
Net sales: EUR 3,658 million
• 53% of sales from services • 56% of sales from growth
markets
Net sales by customer industry
Net sales by geographic area Orders received:
EUR 3,493 million
EBITA**: EUR 469 million
12.8% of net sales 23%
31% 20%
13%
9% 4% Mining, capital 23%
Mining, services 31%
Aggregates, 20%
Oil and Gas, 13%
Pulp and Paper, 9%
Other, 4%
27%
19% 22%
23%
9% Europe, 27%
North America, 19%
South and Central America, 22%
Asia-Pasific, 23%
Africa and Middle East, 9%
*Net Sales, Orders received and EBITA 10/2013 – 9/2014 **Before non-recurring items
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen © Metso
© Metso © Metso
Added value for shareholders: - Higher profitability - Reduced volatility
Our value creation roadmap Strong execution to continue
6
Metso recognized as best in class in value creation
2011-2012 Metso was a diversified company with several business models and broad management agenda
2011-12
2013 Demerger implemented on Dec 31st, 2013 and Valmet listed as of Jan 2nd, 2014
Future 2013
2014 New strategy designed to deliver greater shareholder value 2014-2017 New financial targets: • Net sales growth exceeding
market growth • EBITA margin before non-
recurring items >15% • Return on capital employed
(ROCE) before taxes >30%
2014 2015 -2017
Added value for shareholders: - Annual dividend of more than 50% of annual EPS - Significant value unlocked by the demerger
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Our business mix is strong and balanced Mining capital represents around 20% of net sales
7
Share of total net sales
21% 21% 23%
28% 25%
19%
24% 24% 21% 19% 20%
22%
22% 25% 26% 26% 28%
29%
26% 24% 24% 23% 25% 27%
7% 6% 6% 5% 3% 3%
2009 2010 2011 2012 2013 1-9/2014
Mining Services
Aggregates
Flow Control
Others
Mining Capital
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Successful (mining) downturn management Group net sales and EBITA%, rolling 12 months
8
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32009 2010 2011 2012 2013 2014
%EUR Million
Services net sales, rolling 12 months Capital net sales, rolling 12 months EBITA* %, rolling 12 mths
• Cost efficiency actions started early 2013
• Global procurement initiatives
• Mix improvement thanks to growth of Services and Flow Control
• Demerger had no impact on the daily business
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Proven resilience to the mining downturn Minerals segment EBITA margin shows stability against peer group
9
*Indexed operating margin adjusted for non-recurring items Peers include: Atlas Copco Mining and Rock Excavation Technique and Construction Technique, FLSmidth Minerals Processing & Customer Services, Outotec Minerals Processing, Sandvik Mining and Construction, Weir Minerals
Peer group average operating margin ~ - 20% Metso Minerals segment EBITA ~ + 20%
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
0%
20%
40%
60%
80%
100%
120%
140%
160%
Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014
Peers operating margin average, %* Metso Minerals index operating margin, %*
© Metso © Metso
Minerals segment profitability not largely affected by lower volumes
10 Note: Published figures including currency impact * Before non recurring items
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
0%
2%
4%
6%
8%
10%
12%
14%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32009 2010 2011 2012 2013 2014
%EUR million
Services net sales, rolling 12 months Capital net sales, mining, rolling 12 months Capital net sales, aggregates, rolling 12 months EBITA* %, rolling 12kk
© Metso © Metso
Flow Control profitability is strong due to good margins and lower costs
11 Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
100
200
300
400
500
600
700
800
900
1,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32009 2010 2011 2012 2013 2014
%EUR Million
Services net sales, rolling 12 months Capital net sales, rolling 12 months EBITA* %, rolling 12 mths
Note: Published figures including currency impact * Before non recurring items
© Metso © Metso
Our global presence has strengthened More personnel close to customers
12
48 %
20 %
8 %
15 %
9 %
June 2004 Total ~12,500
June 2014 Total ~16,000
39 %
16 %
20 %
18 %
7 %
Europe, CIS and North America: 68% 55% APAC, South America, Africa and Middle East: 32% 45%
Europe and CIS South and Central America Asia-Pacific
North America Africa and Middle East
Europe and CIS South and Central America Asia-Pacific
North America Africa and Middle East
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Global megatrends are driving our future All Metso’s businesses are supported by long-term trends
14
Challenges and opportunities affecting our customers • Declining ore grades in mining • Infrastructure investments • Growth in energy consumption •Shift to unconventional sources in Oil & Gas • Increasing need for energy and
water-efficient technologies and solutions
• Increasing performance, cost and capital efficiency awareness
© Metso © Metso
Our products and services yield concrete benefits to our customers • Improved process efficiency and performance • Less shutdowns, more up-time • Better reliability and safety • More proficient use of energy, water and other valuable resources
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
- Maintain leadership in Pulp & Paper valves
- Evaluation of strategic options for Process Automation Systems
Our customer industries provide attractive opportunities
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen 15
- Continuous growth of services - Improved resilience through operational efficiency
- Product renewal
-Tap into the growth of aggregate production
- Opportunities in the mid-market - Operational efficiency
- Organic and acquired growth in the current target market
- Expansion to new market segments - Potential to grow in pumps
Mining
Aggregates
Oil & Gas
Other process industries
54% of net sales
20% of net sales
13% of net sales
13% of net sales
6-8%
Long-term market growth, p.a.
Long-term market growth, p.a.
Long-term market growth, p.a.
4-6%
5-8%
© Metso © Metso
• We have established strong global market position in all our customer industries
• They all offer attractive long-term growth opportunities
• Growth is supported by industry trends and global megatrends
• The mining equipment business faces currently lower demand, but remains attractive in the mid- and long-term
We are well-positioned in all our core industries
16
#1 in mining
crushers and grinding mills #1
in aggregates crushing and
screening #1
services provider with leading
services center network and capabilities #5
in oil and gas control valves
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Competitive position built on customer experience
17
Delivered by highly competent and committed industry professionals
all over the world
Customer intimacy
Market-leading process and application knowledge
Full-scope services offering and
delivery capability
Reliable, leading technologies and
competitive offering
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Highly skilled and experienced people
Good reputation and references
Excellent process know-how
Excellent technical support
Leading technology
Realiable equipment and solutions
What do our customers like about us Metso global customer survey, May 2014, 981 respondents
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen 18
Good reputation and references
Excellent process know-how
Excellent technical support
Leading technology
Reliable equipment and solutions
The most important attributes customers associate with Metso
© Metso © Metso
Products
Our way of taking Metso to the next level
Business model offering higher profitability and lower volatility
A leader in flow control within oil & gas and mining
The leading technology and
services provider for end-to-end
minerals processing
Services
Systems
•Broad Oil & Gas and Mining platform, covering valves and pumps •Global sales and service channels
•Strong process knowledge • Leading equipment technologies across the value chain • Leading intelligent solutions •Global sales and service channels
19
Our businesses and strategic objectives
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Leveraging our new integrated operating model External reporting segments: Flow Control and Minerals
20
Services
Minerals
Flow Control
Performance services
Market area organizations
Market area organizations
Aggregates equipment
Mining equipment
Spare and
wear parts
Oil and gas
Aggregates
Mining
Valves
(equipment and services)
Pumps (equipment and
services)
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Achieving profitable growth with strong returns Profitability target to be reached within three years
22
Delivering greater shareholder value
Target Q1-Q3/2014
Net sales growth exceeding market growth
In line with target
EBITA margin before non-recurring items >15%
12.2%
Return on capital employed (ROCE), before taxes >30%
15.5% (18.2% without non-recurring items)
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Growth inititatives in our business areas In light of megatrends and market outlook
23
Minerals Services Flow Control
• Product renewal • Strengthening of sales
and delivery capabilities in key markets
• Opportunities in China
mid-market
• Grow market share in own installed base
• Expansion of service
center network
• Easy-to-sell productized services offering
• Performance services
• Cross-leverage Oil & Gas and Mining capabilities
• Targeted acquisitions to
expand addressable markets
• Acceleration of
operational efficiency improvements
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Recent M&A and future opportunities
24
Future opportunities: • Flow Control
- expansion of valve and pump offering
• Minerals and Services - product offering - local presence
Recent acquisitions: • Shaorui Heavy Industries,
China - mid-market crushing and screening equipment
• SABO, Spain - grinding media to strengthen our full-scope comminution services offering
• JX Foundry, China - metallic mill lining, crusher wear parts
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
- New operating model and footprint rationalization
- Simplification of the Group’s legal structure (40-50% reduction of legal units) - Asset efficiency - Product renewal
- Enhanced customer focus
- Headcount
- Procurement savings of 2-3% p.a. of the total spend
- Continuous cost awareness and leaner operating models
Roadmap to our 15% EBITA target Profitability target to be reached within three years
25
Cost reduction Improving competitive
position Developing the business mix
>15%
- Growth and initiatives in the services and product businesses
- Refocused systems business
- Product renewal (intelligent offering, valve controls, etc.)
2 1
3 2013:12.8%
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Profitability improvement
Net working capital efficiency (inventories, receivables)
Promoting asset-light business models (divestment of assets, outsourcing)
Strict capital expenditure policy
Redefined cash policy
Reaching ROCE of more than 30% Driving balance sheet management culture across the Group
26
ROCE >30%
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Our capital allocation policy supports growth and shareholder returns
-------------------- Use of available capital -----------------------
1. Organic growth 2. M&A 3. Return excess cash to shareholders
As a top priority, we will maintain a capital structure and liquidity position that secure: • Ability to execute our dividend policy (>50% of EPS) • Investment-grade credit rating
27 Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
1.50
3.00
0.70 0.70
1.551.70
1.85
1,00
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
2006 2007 2008 2009 2010 2011 2012 2013
EUR
DPS (Dividend per share) Dividend policy ( at lest 50% of EPS)
Dividend payout has exceeded our policy Targeting stable and predictable payout
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen 28
Demerger
© Metso © Metso Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
Market outlook remains unchanged
29
55% of net sales of which 55% services Current demand: • Weak for the equipment and
project business • Services good
20% of net sales of which 40% services Current demand: • Satisfactory for equipment and
services
22% of net sales of which 45% services Current demand: • Good in oil and gas; satisfactory in
pulp and paper • Services good
3-6 months market outlook
Equipment Services
Equipment Services
Equipment Services
Mining Aggregates Flow Control
© Metso © Metso 30
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 around 12%
Guidance for 2014 Original guidance from February 6 intact
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
© Metso © Metso
Strong financial position and competitive shareholder returns
Solid strategy to drive
growth and profitability
Strong established
market positions in attractive industries
Our investment proposition
31
Why to invest in Metso
Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen
Good track record of efficiency
improvements and value creation
Recommended