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© Metso
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 willingness, expectations for company growth, development and profitability and the realization of synergy
benefits and cost savings, and statements preceded by ”expects”, ”estimates”, ”forecasts” or similar expressions, are
forward looking statements. These statements are based on current decisions and plans and currently known factors. They
involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected by
the company.
Such factors include, but are not limited to:
1) general economic conditions, including fluctuations in exchange rates and interest levels which influence the operating
environment and profitability of customers and thereby the orders received by the company and their margins
2) the competitive situation, especially significant technological solutions developed by competitors
3) the company’s own operating conditions, such as the success of production, product development and project
management and their continuous development and improvement
4) the success of pending and future acquisitions and restructuring.
2
© Metso
50
100
150
200
250
300
350
400
0
2
4
6
8
10
12
14
Lost time incident frequency (LTIF)
Total number of lost time incidents
* LTIF December 2016
Safety is an important driver for successImproved safety performance supports productivity
2016 achievements
• Safety conversations by managers rolled
out corporate wide
• Stronger focus on corrective actions on risk
observations, audit findings, and accidents
• Improved work methods for critical tasks
2017 focus areas
• Extending safety leadership training
• Increasing effectiveness of corrective
actions through improved root cause
analysis
• Monthly inspection program for newly
identified hazards
LTIF
2.4 *
Demand from customers: license to operate
Safety is included in employees’ target setting
3
© Metso
2016 in brief
• Challenging mining and oil & gas markets
• Internally good progress in organic growth and development actions
• Restructuring continued to adapt to the market situation
• Orders exceeded sales
• Profitability declined due to lower sales
• Strong cash flow generation
• Balance sheet strengthened
• Board proposes a dividend of EUR 1.05 (1.05)
Figures in brackets refer to the corresponding period in 2015, unless otherwise stated.
Orders received:
EUR 672 million, -11%
Sales:
EUR 676 million, -10%
Adjusted EBITA margin:
9.4% (12.0%)
Orders received:
EUR 2,724 million, -8%
Sales:
EUR 2,586 million, -12%
Adjusted EBITA margin:
10.6% (12.2%)
Net gearing:
-1.8% (10.6%)
Fourth quarter 2016
Full year 2016
4
© Metso
Strategic achievements in 2016
New Minerals business model was implemented
Standardization and process harmonization was executed
Procurement efficiency was improved and planned actions were achieved
Distribution channels were developed and market was expanded
New products were launched (MHC™ Hydrocyclones, UltraFine™ Screens, Life Cycle Services (LCS) package for the
aggregates industry, N Series recycling equipment product range, Metso Metrics, NelesValvGuard, MD Series mill discharge pump)
Successor planning and competence mapping progressed
5
Digitalization: As part of our offering and in our business models
© Metso
• Mining (orders -11%):- Services +1%, thanks to wears and spares- No large equipment orders- Underlying demand for smaller equipment orders
picked up slightly
• Aggregates (orders +20%):- Overall demand clearly improved - Equipment +37%- Services flat
• Flow Control (orders -21%):- Sequentially flat orders - Valve orders declined in oil & gas y-o-y- Pump orders flat y-o-y
Markets in Q4/16Orders received totaled EUR 672 million, -11%
343
241
9875
346
190
95
42
0
50
100
150
200
250
300
350
400
450
500
MineralsServices
Minerals Capital Flow ControlServices
Flow ControlCapital
Q4/2015 Q4/2016
+1%
-21%
-3%
-44%
EUR million
6
© Metso
Financial highlights in Q4/16
• Sales development- Minerals declined 9% due to mining- Flow Control declined 14% due to oil & gas
• Healthy services margins
• The lower adjusted EBITA resulted from- lower volumes, - project cost overruns and warranty costs in Minerals
and- non-operative items in the Group head office
• Operating profit was negatively impacted by restructuring costs
Adjusted EBITA margin 2016: 10.6%
7
721758
672
921754
676
13.0
12.0
9.4
0
2
4
6
8
10
12
14
0
200
400
600
800
1,000
1,200
1,400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016
Orders received Sales Adjusted EBITA %
EUR million %
© Metso * Board’s proposal for the AGM
** EUR 0.40 additional dividend was paid in August 2015
Board’s dividend proposal EUR 1.05
• The proposed dividend totals EUR 157 million
• 121% of earnings per share for 2017
8
1.00 1.05 1.05 1.05
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2013 2014 2015 ** 2016 *
EUR
EPS (Earnings per share) DPS (Dividend per share)
Eeva Sipilä
CFO
Financial performance
© Metso
Minerals quarterly performance
• Aggregates and recycling sales stabilized
• Mining sales declined still
• Profitability weakened due to- lower volumes and- project cost overruns and warranty costs of
EUR 6 million.
• Operating profit negatively impacted by EUR 13 million restructuring costs
Adjusted EBITA margin 2016: 9.7%
544585
536
743
574522
13.5
12.1
9.1
0
2
4
6
8
10
12
14
16
0
100
200
300
400
500
600
700
800
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016
EUR million
Minerals orders received Minerals sales
Minerals adjusted EBITA %
%
10
© Metso
Flow Control quarterly performance
• Sales declined due to lower deliveries to oil & gas and pulp & paper customers
• Adjusted EBITA and adjusted EBITA margin increased
• No notable restructuring costs booked for the quarter
Adjusted EBITA margin 2016: 15.1%
178
173
136
173 180155
14.213.1
16.6
0
5
10
15
20
25
0
50
100
150
200
250
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016
EUR million
Flow Control orders received Flow Control salesFlow Control adjusted EBITA %
%
11
© Metso
Volume decline biggest driver in profitability
Note: Graph is illustrative: Volume, margin and SG&A changes have been calculated with constant currencies.
Currency impact is included in ’FX rates & Others’.
356274
0
50
100
150
200
250
300
350
400
FY 2015 adjusted EBITA Volume Margin SG&A FX rates & Others FY 2016 adjusted EBITA
EUR million
12
© Metso
211
252 240261
222 235 224 220
176196
181 184
27.9 28.430.0
28.330.3 31.2
32.9
29.2 29.2 29.2 28.4 27.2
0
5
10
15
20
25
30
35
0
50
100
150
200
250
300
350
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016
Gross profit Gross margin
EUR million %
139151 142
167147 147
126150
126 130 125135
18.417.0 17.7 18.1
20.1 19.4 18.619.8
20.919.4 19.6 20.0
0
5
10
15
20
25
0
50
100
150
200
250
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016
EUR million
SGA SGA %
%
Q4 gross margin affected by adjustments and Minerals’ overruns and warranties
• Achieved procurement savings the key positive contributor but
- high restructuring spend and cost overruns and warranty
costs in Minerals had negative impact in the gross margin
• COGS headcount reduced by 700 persons in 2016
• Efficiency measures reduced SG&A headcount
by 380 persons in 2016
• No significant credit losses
13
© Metso
Healthy cash flow and solid financial position
EUR million Q4/2016 Q4/2015 Change % 2016 2015 Change %
Operating profit 44 67 -34 227 555* -59
Earnings per share, EUR 0.17 0.35 -53 0.87 2.95* -71
Free cash flow 97 59 64 339 341 -1
* Including capital gain from divestment of PAS
Dec 31, 2016 Dec 31, 2015
Return on equity (ROE), % 9.0 33.1*
Return on capital employed (ROCE) before taxes, % 10.4 25.7*
Gearing at the end of the period, % -1.8 10.6
Cash conversion, % 261 180
Equity to assets ratio at the end of the period, % 48.0 48.3
14
© Metso
784 752 715 726 728 709 709
577486 482 450 476 459 464
-313 -279 -249 -234 -255 -241 -274
-157 -155 -128 -133 -152 -173 -174
-246-212 -222 -200 -209 -204 -238
645592 598 609 588 550
487
-1,000
-500
0
500
1,000
1,500
Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016
EUR million
Net working capital and capital employed
Net working capital
Cash
Intangible assets
Tangible assets
Other
Net working capital
Inventories
Trade payables
Advances + POC
Other
Trade receivables
• Net working capital declined • Tangible assets 10% lower y-o-y
645 592 598 609 588 550 487
542537 590 626
511 620 698
557552
550 542
541537 538
373345
343 330
331310 315
206160
186 185193 180 195
2,3232,186
2,267 2,2922,164 2,197 2,233
0
500
1,000
1,500
2,000
2,500
Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016
EUR Million
15
Matti Kähkönen
President and CEO
Outlook and backlog
© Metso
1,780 1,735 1,672
1,402 1,445 1,4111,290 1,268 1,300
1,3991,305 1,320
0
500
1,000
1,500
2,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016
EUR Million
Order backlog
Flow ControlMinerals, services
• Our backlog for 2017 totaled approximately EUR 1.2 billion
• Market uncertainties causing some delays in deliveries
Minerals, capital
Deliveries in 2017
Deliveries after 2017
Deliveries in 2016
Deliveries after 2016
0
200
400
600
800
1,000
1,200
1,400
Order backlog Dec 31, 2015 Order backlog Dec 31, 2016
EUR million
17
© Metso
25% of net sales of which 60% services*
• Some positive signs seen in the oil & gas market in the beginning of 2017
*Based on sales in 2016
Short-term market outlook for 2017
45% of net sales of which 80% services*
• Activity in engineered services is soft and miners’ cost actions continue
• Order pipeline consists of small and midsize orders
25% of net sales of which 45% services*
• The Nordics, US and India remain positive
Mining Aggregates Flow Control
weak satisfactory good good satisfactory satisfactory
Equipment Equipment Equipment ServicesServicesServices
Previously:
satisfactory
Previously:
satisfactory
18
© Metso
Outlook for 2017
Metso’s overall trading conditions are expected to be slightly better compared to 2016. Demand for our products and
services is expected to develop as follows:
• Remain weak for mining equipment and satisfactory for mining services,
• Improve to good for aggregates equipment and services (previously: satisfactory both for equipment and services)
• Remain satisfactory for Flow Control products related to customers’ new investments and satisfactory for Flow Control
services, with some positive signs seen in the oil & gas markets in the beginning of the year.
At the end of December 2016, our backlog for 2017 totaled approximately EUR 1.2 billion. In the current market conditions,
we continue to expect some postponements to planned delivery timetables.
Negative adjustment items from restructuring programs initiated in 2016 are expected to be EUR 10-15 million.
Capital expenditure excluding acquisitions is expected to increase compared to 2016 but remain below depreciation and
amortization.
19
© Metso
Save the date
Metso Capital Markets DayThursday, June 1, 2017 at Hilton Helsinki Airport
Programme to includePresentations from CEO and CFO
Business updates by business heads
Breakout sessions with topical teams including extensive Q&A
We will start with lunch and finish by 18:00 to allow fly in and out during the day
Mark the date in your calendars. Formal invitation will follow.
20
company/metso metsogroup metsoworldmetsoworld metsogroup
www.metso.com
Appendix
© Metso
Sales by market area
Sales in 2015
Sales in 2016
644569
0
200
400
600
800
NorthAmerica
EUR mill ion673 643
0
200
400
600
800
Europe
EUR mill ion
667608
0
200
400
600
800
Asia-Pasific
EUR mill ion
339246
0
200
400
600
800
Africa andMiddle East
EUR mill ion
598521
0
200
400
600
800
South andCentralAmerica
EUR mill ion
23
© Metso
Orders by market area
670 701
0
200
400
600
800
Europe
EUR mill ion
641556
0
200
400
600
800
NorthAmerica
EUR mill ion
607 580
0
200
400
600
800
South andCentralAmerica
EUR mill ion
278 264
0
200
400
600
800
Africa andMiddle East
EUR mill ion
767
622
0
200
400
600
800
Asia-Pasific
EUR mill ion
24
Orders in 2015
Orders in 2016
© Metso
Key figures
* Including capital gain on disposal of PAS-business
EUR million Q4/2016 Q4/2015 Change % 2016 2015 Change %
Orders received 672 758 -11 2,724 2,965 -8
Without currency effect -12 -6
Orders received, services business 442 441 0 1,741 1,879 -7
Without currency effect -1 -5
Sales 676 754 -10 2,586 2,923 -12
Without currency effect -11 -10
Sales, services business 442 481 -8 1,703 1,840 -7
Without currency effect -9 -5
Adjusted EBITA 64 91 -30 274 356 -23
% of net sales 9.4 12.0 10.6 12.2
Operating profit, EBIT 44 67 -34 227 555* -59
Earnings per share, EPS, EUR 0.17 0.35 -53 0.87 2.95* -71
Return on capital employed (ROCE), before
taxes, % 10.4 25.7*
Free cash flow 97 59 64 339 341 -1
25