Metso Outotec Oyj : Sijoittajaesitys, tammikuu 2021 (englanniksi)

Investor presentation

January 2021

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.

Metso Outotec in brief

Metso Outotec is a frontrunner in sustainable technologies, end-to- end solutions and services for the aggregates, minerals processing, and metals refining industries globally.

By improving our customers' energy and water efficiency, increasing their productivity and reducing environmental risks with our process

and product expertise, we are the partner for positive change.

* Illustrative combined in 2019.

4.2	50+
billion euro	countries with
sales*	presence

16,000+	150 years of
employees, 80+	expertise in mining
nationalities	and metal

Metso Outotec key financials - illustrative 2019 combined

Sales

EUR million

4,186

Services share of sales

56%

Adjusted EBITA2

EUR million / %

525 / 12.5%

1. Illustrative combined figures of Metso Minerals business carve-out and Outotec continuing operations' sales for 2019
2. Combined Metso Minerals business carve-out adjusted EBITA and Outotec continuing operations' adjusted EBITA for 2019

Sales by industry1

13%

26%

61%

Aggregates

Mining

Metals and recycling

Sales by geography1

23%

42%

35%

EMEA

Americas

APAC

Our purpose

Enabling sustainable modern life

Our vision

To be customers' number-one choice for sustainable use of earth's natural resources.

Together we deliver service, reliability, innovation and results - safely.

Our strategy

Strategy will be implemented via

TOP Priorities

Performance	Integration and
culture	financial performance

Tier-1

company

Sustainability

Customer centricity

Target to be industry leading company with strong financial performance

Adjusted EBITA margin of

>15%

over the cycle

Dividend payout of at least

50%

of earnings per share

Maintaining investment grade credit rating

Progress in sustainability in alignment with the

1.5°C

commitment

Our key strengths provide a strong base…

Widest offering	Leading services	Customer base	Strong technology	Scale & financial
and capabilities	expertise	and strong brand	and R&D power	position

...which is supported by focused organization with clear roles and responsibilities

Business areas

• P&L responsibility
• Offering
• Go-to-marketmodels
• R&D

Global functions

5

• Scale benefits
• Best practices
• Global tools
• Cost efficiency

Market	8
areas
• Customer service
• Sales & account
management
• Local operations

4

Our strong portfolio with aftermarket opportunities

Aggregates		Minerals processing		Metals
25% of sales		63% of sales		8% of sales
Global #1		Global #1		Global #1

Aftermarket potential	Aftermarket potential	Aftermarket potential
~35-45%	~60-70%	~30-40%

Note: sales split year-to-date 2020, excluding Recycling 4%

Emphasizing services and product development

CONTINUOUSLY

GROW SERVICES

• Reinforce presence in

service-intensive businesses

• Profitability and

stability over cycles

• Grow coverage of own installed base and grow beyond that

FOCUS ON PRODUCT DEVELOPMENT

• Building on our end-to- end process knowledge
• Standardized and pre- engineered products
• Securing service business potential via design to service
• Reducing dependency on big projects

We are on track in delivering the integration synergies

Synergies at announcement of transaction (July 4, 2019):

• EUR 100 million cost synergies
• EUR 150 million revenue synergies
• In three years

Synergies confirmed after merger (August 4, 2020):

• EUR 120 million cost synergies by end of 2021
• EUR 50 million run-rate by end of 2020
• EUR 150 million revenue synergies by end of 2022

Current update at Q3/2020:

• EUR 31 million run-rate in cost synergies achieved
• EUR 50 million run-rate to be delivered by end of 2020

November 11, 2020

14

Business specific profitability improvement actions continue

Earlier initiated actions continue uninterrupted in Minerals and Aggregates, Metals restructuring and turnaround actions ongoing

Supply footprint

• Ensuring scale and competitiveness
• Focusing on reducing internal logistics and complexity
• Improving lead times to reduce working capital

Customer centricity	R&D
•	Improving on-time delivery	•	Ensuring consistent roadmap and
•	Ensuring availability and reliability		gate structure
		•	Focusing on productization,
			serviceability and sustainability

Strategy execution will result in measurable financial improvement

Building blocks of adj. EBITA % improvement

Financial targets

Adjusted EBITA >15% over the cycle

11.2

Maintaining an 'investment- grade' credit rating

Dividend pay-out of at least 50% of earnings per share

Progress in sustainability in alignment with the 1.5 °C commitment

• Pro forma as published for continuing operations
• Recycling divestment considered, Metals turnaround tbc (work-in-progress)

Action taken in Metals & Recycling

• Metals' performance has been unsatisfactory
• Restructuring and turnaround ongoing
• Aluminium business was divested in December 2020
• Business scope and cost structure to be addressed
• Recycling business to be divested as a result of portfolio assessment
• Target to find a new owner to leverage the full potential of the business

Our core industries have a solid growth outlook…

AGGREGATES

• equipment market growth

EUR billion

~6

6

	5
	CAGR
4	19-23F
4-6%

2

0

2019E2023F

MINERALS PROCESSING

• equipment market growth

EUR billion

10

	~8-10
8	~7
	CAGR
6	19E-23F

3-6%

4

2

0

2019E

2023F

METAL REFINING

• equipment market growth

EUR billion

4

	~3
~2-3	CAGR
	19E-23F
2	3-6%

0

2019E2023F

Source: Woodmac; projects data evaluation

…and our exposure is balanced…

~80% of sales spread across 4 major applications

9%

10%	30%
			Copper
			Aggregates
			Iron
			Gold
13%			Battery metals
		Other metals

14%	24%

Excluding recycling and other industries

…between three major growing metals…

MINING CAPEX

M:O addressable market, EUR billion

~8-10

~7

PRODUCTION 2019-2023

COPPER (total committed)

21	24
Mt	+4%
2019	2023

Current market balance

Slight oversupply

Deficit expected >2023

Share of M:O sales

30%

	CAGR
	3-6%
2019	2023

IRON ORE

2.423	2.534
Mt
	+1%
2019	2023

Slight oversupply

Strong demand from	14%
China continues

Pelletizing driving growth

Source: Woodmac, S&P Global Market intelligence

GOLD
120	132
Moz		Balanced	13%
	+2% p.a.
2019	2023

…and a good position in fast-emerging battery metal processing and recycling markets

GLOBAL LI-ION BATTERY CELL DEMAND GWh

+26% p.a.

2,501

241

20202030

Source: S&P Global Market Inteligence

DEMAND 2019-30, Mt	Current market	Future market
NICKEL			balance	balance
+23% p.a.
(battery-grade /
HPAL route)	1.19		Slight oversupply	Shortage of battery-grade
						is expected after 2025
0.12
2019	2030
LITHIUM	+18% p.a.	Oversupply expected to	Shortage after 2026
			last until 2026
			1.90
0.32
2019	2030
COBALT	+7% p.a.	Balanced market	Shortage
			0.33		2010-17, no major	Magnitude dependent on
				disruptions
				intensity in batteries is
0.15				expected to decline
2019	2030

Our commitment to the 1.5 °C journey

Handprint: Sustainable offering and innovations

Energy	Water	Offering in	Safe
efficiency and	efficiency	circularity	operations
emissions

Footprint: Responsible and trusted partner

Environmental	Responsible	Engaged	Health and
efficiency in	procurement	and diverse	safety
operations		experts

Our business areas

Aggregates		Minerals		Metals		Services		Consumables

Crushing and	Equipment and	Processing	Spare parts,	Comprehensive
screening	full plant	solutions and	refurbishments	offering of wear
equipment for	solutions for	equipment for	and	parts for mining
the production	minerals	metals refining	professional	and aggregates
of aggregates	processing	and chemical	services for	processes​
		processing	mining, metals
			and aggregates
			customers

Our full offering from ore to metal

Minerals processing

Metallurgy

Aggregates processing

From ore

Prospecting, exploration,

Comminution: Comminution:

Separation:

Separation:

Metals refining

To

development, extraction

dry

wet

beneficiation

dewatering

body

metal

Classification / Materials handling / Slurry handling

L e a d i n g M e t s o O u t o t e c o f f e r i n g - e q u i p m e n t , s y s t e m s , l i f e c y c l e s e r v i c e s

Minerals processing offering

Metals refining offering

•

Crushing

•

Grinding

•

Dewatering

•

Pyro- and hydrometallurgy

•

Screening

•

Flotation

•

Tailings systems

•

Ferrous metals, ferroalloys

•

Bulk materials handling

•

Slurry handling

•

Concentrator plants

•

Base, precious, battery metals

•

Leaching

•

Acid and off-gas treatment

•

Effluent treatment

Not in Metso Outotec scope

In Metso Outotec scope

Industry-leading service expertise and global network

• Comprehensive service portfolio from spares

and wears to advanced lifecycle services

• World-class team of experts

• Efficient service processes to enable our experts to get it right - fast

• Deep understanding of customer process, product design and technology

~5,000	~140	3
Service	Service	Performance
experts	locations	Centers

Service locations Repair Centers

Sustainable technologies to help customers

Examples of technologies with higher energy, water, emissions and resource efficiency

25-35%

65%

Lower energy consumption with Vertimills® in grinding

Lower water consumption at copper concentrator with Pretium Water Advisor & Process Water Recycling Plant

6.6	Less CO2 emissions thanks to our leading metals
Mt / y	refining technologies1

Up to

60%

Lower crushing noise distance from Lokotrack® Urban™ Series unique noise encapsulation features

1. Ferrochrome process, copper flash smelting, alumina calcination, ceramic filters, TankCell 300 and coated titanium anodes

Strong innovation

and R&D power

15+	New series of
innovative products
	launched each year
100	Investment in research and
million euros	development annually
30	R&D centers, co-creating
with and customizing
	solutions to customers
8,200+	Patents

Metso Outotec R&D and operations footprint

Country

with direct presence

HQ

Factory

Research center

Test center and lab

Note: Excluding service locations

Uncompromising safety in offering and operations

Safe products and services

•	Products designed for safety
•	Safe and professional
	service teams

# of injuries per million hours of work

Safe and responsible supply chain

• Rigorous supplier screening
• Supplier code of conduct

8

6

4

Total Recordable Injury Frequency (TRIF)2

Health and safety of people

• Safe and secure workplace
• Proactive attitude towards zero harm

		Lost Time Incident
2		Frequency (LTIF)1

0
2017	2018	2019	2020Q1

1. Number of injuries resulting in absence of at least one workday per million hours of work (own employees and contractors)
2. Number of injuries per million hours worked (own employees and contractors)

Metso Outotec global team of professionals

Our 16,000+ people by geography

11%

14%36%

13%

26%

Europe

South America

Asia-Pacific

North and Central America

Africa, ME and India

Metso Outotec leadership team
		Extended Metso Outotec Executive Team
		Metso Outotec Executive Team
			CEO
		Pekka Vauramo
		CFO	Legal & Compliance
	Eeva Sipilä	Nina Kiviranta
		HR	Business development
	Carita Himberg *
	Piia Karhu
	Interim Hannele Järvistö
Aggregates	Minerals	Metals	Recycling	Services	Consumables
Markku
Markku Simula	Stephan Kirsch	Jari Ålgars	Uffe Hansen	Sami Takaluoma
Teräsvasara
			Market Areas

* Starting latest by the end of the year.

Metso Outotec for aggregates industry

Our customers

Large international companies as well as numerous smaller and local ones in aggregates industry

Our offering

• Crushers, screens and feeders
• Mobile and portable machines and plants
• Stationary crushing and screening plant systems
• Spares, upgrades, and wear parts
• Professional services: Installation, inspections, plant audit, maintenance, shutdowns, optimization
• Life cycle services and performance solutions

Customer benefits

• Best cost, best availability, easy-to- buy, and easy-to-own solutions
• Range of brands and solutions that cover needs from essential to high- performance: Metso, McCloskey, Jonsson & Söner, Shaorui, Liugong Metso
• Environmentally friendly and low- noise, low-dust solutions for urban environments
• Timely and reliable expert service and parts near customers through our own and distributors' networks

Aggregates: unparalleled offering for crushing and screening

Lokotrack ®

Urban™ series

Community-friendly crushing plants with advanced noise and dust protection - incl electric and hybrid

Simulation tools

Tools that help simulate performance for a wide range of rocks and applications - and find the optimal solutions

Cone and jaw crushers

World-leading offering in crushing

Life Cycle Services and financing services

Service models that make leasing and investing simple and optimize total cost of ownership

my.metso.com

E-commerce platform

to order original Metso spare and wear parts easily

Metso Outotec for minerals processing

Our customers

Large global miners, major and mid- sized regional operators and junior miners

Our offering

• Equipment for comminution, beneficiation, dewatering, classification, material handling, and slurry handling
• Plant solutions and systems incl in- pit crushing systems, concentrator plants, tailings management systems and bulk material handling
• Spares, upgrades and wear parts
• Professional services: Installation, inspections, maintenance, shutdowns and optimization
• Life cycle services and performance solutions

Customer benefits

• Most technologically advanced equipment and solutions with
• • Highest recovery rate and throughput
  • Lowest total cost of ownership
  • Best energy and water efficiency
• Broad portfolio of equipment as a basis to always crafting the optimal solution for any application
• World-classservice expertise close to customers
• Secure parts availability with optimal performance

Minerals: full offering from ore to concentrate

Vertimill®	HIGmill®
Industry benchmark in stirred	Advanced and energy-efficient fine
milling technology	and ultra-fine grinding solution
HRC™	Nordberg MP Series™ cone
High pressure grinding rolls for	crushers
efficient size reduction in mining	Maximum performance from high
and aggregates	crushing force and availability
TankCell® e300	Larox® PF pressure filters
The best selling flotation cell in the	Fully automatic recessed-plate
world in its size range	diaphragm filters
MD series mill discharge pumps	Life Cycle Services and
Heavy duty solutions for slurry	Performance Solutions
pumping applications	Customizable packages delivering
	performance outcomes

Metso Outotec for metals refining

Our customers

Large and mid-sized mining companies, as well as local mining and metallurgical companies in emerging markets

Our offering

• Pre-engineeredproducts and solutions for process islands and full plants
• Tailored EP, EPS and EPC plant deliveries
• Delivery, construction, commissioning, training, ramp-up of plant solutions incl financing
• Operate & maintain, access & optimize, guaranteed production
• Remote services, R&D centers, pilot plants
• Spares and upgrades
• Professional services: Installation, inspections, maintenance, shutdowns, optimization

Customer benefits

• Full solutions for processing almost any ore or concentrate to refined metal, incl sulfuric acid production
• In-housetest work and world-class R&D provide our customers with the optimum solution
• Technologies with low emissions, high energy efficiency
• Strong technological expertise and close support throughout the project

Metals: advanced solutions from ore or concentrate to metal

Iron Ore Agglomeration

World leader with more than 400 Sinter Plants and more than 100

-incl. the world's biggest-Pellet Plants

supplied globally

Acid plant process solutions Over 650 completed acid plant

deliveries to date

Light Metals

Over 70 delivered Alumina Calcination and Tube Digestion Plants

Fluid Bed Technology

More than 300 Fluid Bed Roasting installation incl. largest partial Roasting plant

World-class smelting technologies

Operated by world's largest

copper, nickel and ferrochrome operations and widely used in various secondary smelters. World leader in anode casting

Hydrometallurgy solutions and equipment for Base Metals, Gold and Battery Metals

VSF® SX equipment used extensively in copper solvent extraction worldwide

Q3/2020 results

Q3/2020 highlights

• Market activity largely unchanged compared to the end of Q2
• Orders and sales affected by Covid-19
• Performance of the Aggregates and Minerals segments healthy
• Integration has started quickly with good progress
• EUR 31 million annual run rate of cost synergies achieved
• Metals to focus on restructuring and turnaround during the next 12 months
• Recycling to be divested

Group highlights in Q3, IFRS (comparison period illustrative combined)

• Orders received EUR 836 million (EUR 1,169 million)
• Sales EUR 985 million (EUR 1,073 million)
• Adjusted EBITA EUR 109 million, or 11.1% of sales (EUR 153 million or 14.3%)
• EBIT EUR 47 million, or 4.8% of sales (EUR 126 million or 11.7%)
• Earnings per share EUR 0.03
• Net debt EUR 943 million
• Gearing 47%

Covid-19 impacts in Q3

• Negative impact continued due to lockdowns affecting operations and widespread restrictions limiting travel and workforce mobility
• Own operations have been running with additional health and safety measures without major disruptions since early June
• Aggregates demand stabilized to about 75-80% of normal, with growth in China
• Decision-makingrelated to bigger investment projects continues to be slow in minerals and metals markets
• Services business continues to be affected by limited access to plan, prepare and carry out maintenance and modernization work at customer sites. The demand for spare parts and consumables has been good, thanks to healthy utilization rates at mines.

Aggregates highlights

• Orders received EUR 232 million (EUR 211 million)

1. Strong development in China

• 1. Organic growth -14% due to Covid-19
  1. McCloskey impact on growth +29%
• Sales EUR 244 million (EUR 217 million)
• 1. Organic growth -12%

• 1. McCloskey impact on growth +30%
• Adjusted EBITA EUR 26 million (EUR 28 million)
• 1. Margin of 10.7% (12.7%)

1. Impact of sales mix offset by successful execution of cost savings

EUR million

350

300

250

200

150

100

50

0

Orders received, EUR million		Sales, EUR million

Adjusted EBITA, % of sales

%

16

14

12

10

8

6

4

2

0

Minerals highlights

• Orders EUR 516 million (EUR 781 million)

• 1. Major project orders in the comparison period
  1. Project pipeline active but decision making slow
  1. Upgrades and modernization services orders low
  1. Currency impact -8%
• Sales EUR 634 million (EUR 704 million)
• 1. Organically in constant currencies -1%

1. Currency impact -9%

• 1. Services share 65% (63%)
• Adjusted EBITA EUR 97 million (EUR 100 million)
• 1. Margin of 15.3% (14.3%)

1. Good mix

1. Strong performance in Consumables

EUR million	%
900							18
800							16
700							14
600							12
500							10
400							8
300							6
200							4
100							2
0							0
				Orders received, EUR million		Sales, EUR million
				Adjusted EBITA, % of sales

Metals & Recycling highlights

• Orders received EUR 88 million (EUR 176 million)

1. Slow decision-making on projects and modernization services, pipeline unchanged

• 1. Large orders in the comparison period
• Sales EUR 107 million (EUR 152 million)
• 1. Low order backlog from previous quarters
• Adjusted EBITA EUR -10 million (EUR 29 million)
• 1. Too high fixed-cost structure compared to sales

1. Comparison period included positive one-off items

EUR million

250

200

150

100

50

0

%

25

20

15

10

5

0

-5

-10

-15

Orders received, EUR million		Sales, EUR million		Adjusted EBITA, % of sales

IFRS Income Statement

EUR million	Q3/2020	1-9/2020	1-9/2019	1-12/2019
Sales	985	2,432	2,179	2,976
Gross profit	243	676	644	858
Adj. EBITA	109	293	278	377
Adj. EBITA, %	11.1	12.0	12.8	12.7
Operating profit	47	193	247	325
Operating profit, %	4.8	7.9	11.3	10.9
Net financial expenses	-9	-20	-23	-34
Profit before taxes	38	173	224	292
Income taxes	-15	-51	-51	-69
Profit for the period	24	123	173	223
Earnings per share, EUR	0.03	0.17*	-	-

* based on average number of outstanding shares (707,228 thousand)

Income Statement (illustrative combined)

EUR million	Q3/2020	Q3/2019	1-9/2020	1-9/2019
Sales	985	1,073	3,011	3,054
Adjusted EBITA	109	153	344	378
% of sales	11.1	14.3	11.4	12.4
Operating profit	47	126	206	327
% of sales	4.8	11.7	6.9	10.7
Earnings per share*, EUR	-	-	0.15	-

* based on the number of outstanding shares at the end of period (827,979 thousand)

IFRS Balance Sheet

EUR million	September 30, 2020	June 30, 2020	December 31, 2019
Intangible assets	2,027	2,062	723
Total property, plant and equipment	353	357	315
Right-of-use assets	126	138	89
Other non-current assets	237	251	282
Inventories	1,098	1,106	975
Receivables (trade and other)	1,157	1,094	916
Liquid funds	477	528	156
Assets held for sale	37	39	-
TOTAL ASSETS	5,511	5,575	3,457
Total equity	2,003	2,009	1,254
Interest bearing liabilities	1,427	1,449	915
Non-interest-bearing liabilities	2,019	2,040	1,288
Liabilities held for sale	62	78	-
TOTAL EQUITY AND LIABILITIES	5,511	5,575	3,457

Analysis of Cash Flow

EUR million	1-9/2020	1-12/2019
Profit for the period	123	223
Adjustments	175	166
Change in net working capital	112	-216
Financial income and expenses paid, net	-21	-31
Income taxes paid	-72	-100
Net cash flow from operating activities	317	43
Capital expenditure on fixed assets	-74	-87

Proceeds from and investments in financial assets, net

Business acquisitions, net of cash

Proceeds from sale of businesses, net of cash sold

Other

Net cash flow from investing activities

-31

203-214

8858

75

224-207

Net working capital per September 30, 2020

EUR million

Financial position

• Committed and undrawn revolving credit facilities totaled EUR 790 million at the end of September
• Outotec's EUR 150
  million hybrid bond was repaid on July 31, refinanced by a bank term loan
• Outotec's EUR 150 million bond maturing in September
  2020 was refinanced with a bank term loan

EUR million

Liquid funds

Net debt

Gearing, %

Equity-to-assets ratio, %

Debt to capital, %

Equity/share, EUR

September 30, 2020

477

943

47.0

39.4

39.3

2.42

Integration proceeding fast

• Large majority of the nominations to the new organization had been made at the end of Q3
• Realization of the cost synergies is proceeding according to plan
• At the end of Q3, an annual run rate of EUR 31 million had been reached
• The main source of the synergies has been the restructuring of the organization

Market outlook

Metso Outotec expects the market activity to remain at the current level, subject to a possible worsening of the Covid-19 pandemic.

According to its disclosure policy, Metso Outotec's market outlook describes the expected sequential development of

market activity during the following six-month period using three categories: improve, remain at the current level, or decline.

We will deliver shareholder value through various means

Growth	Delivery of synergies

Reduction of volatility				Improving profitability

Offering competitive	Strengthening of
dividend	balance sheet

Metso Outotec investment highlights

Industry Leader	Comprehensive	Strong Aftermarket	Industry leader in
Offering	Presence &	technology and
		Capability	R&D

We have created a stronger platform in an industry that is transforming through

consolidation, digitalization and an increased focus on sustainability

Attractive	Sustainability	Significant	Track record
industry growth	at the Core of	of improving
synergies
outlook	Operations	profitability

mogroup.com