Outotec strategy 2013-2020 - wms.magneetto.comwms.magneetto.com/webcasts/hd1/ot/2013_1204_cmd_01... · Outotec strategy review CEO Pertti Korhonen ... Outotec sales by destination

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Outotec strategy review

CEO Pertti Korhonen

Outotec CMD 2013

December 4, London


2 CMD 2013

Strategy and long-term financial targets unchanged


CMD 2013 3

Global megatrends create opportunities for Outotec

Advanced solutions for emission reduction,

water treatment and recycling, efficient use of

biomass and waste

Health, safety and social responsibility for employees,

customers and the local community; emerging

economies take actions to secure resource access

Growing demand for minerals and metals

Digitalization, automation and systems

integration offer new possibilities to capture

value on Outotec’s unique process technologies

Diversifying business portfolio, scalable

and adaptive operating model

Maximized recovery through advanced

processing technologies, recycling and

processing of tailings and waste


Strategic programs to implement strategy

CMD 2013 4

Customer centricity and delivery excellence

Strengthening earnings logic to capture more value on Outotec’s unique technologies

Increased product competitiveness

Competitive supply base

Efficiency improvement program

Common business processes and

tools

Creating leading technologies to

ensure leadership

Professional growth and global

presence


Strategic intent and focus in the value chain

CMD 2013 5

Sustainable end-to-end

solutions from feasibility

studies to complete plants

and life cycle services for

virtually all ore types

Extensive range of

sustainable process

solutions for virtually all

types of ores and

concentrates and sulfuric

acid, turn-key delivery and

life cycle services

Industrial

water

treatment Refining Energy Minerals processing

Solutions to produce

water that meets

environmental

discharge standards,

maximize water

recycling and reduce

water and energy

consumption

Innovative solutions for

biomass, coal, sludge,

agricultural and

industrial by-products,

sorted waste, as well as

oil winning from oil

shale and phosphorus

recycling from sewage

sludge ashes

The leading provider of sustainable

minerals and metals processing

solutions...

... and an innovative provider

of sustainable energy and

water processing solutions

Leadership in technology


Long-term customer relationships with the industry’s top companies

6

Major global mining companies

Local mining and metallurgical

companies in emerging regions

Intermediate sized companies

Selected reference customers of Outotec

In 2012, top ten customers accounted for 35% (2011: 30%) of sales.

Companies building their first plant/process accounted for less than 5% of the backlog.

CMD 2013

http://www.first-quantum.com/Home/default.aspx

http://www.maaden.com.sa/en


Outotec is seeking to grow in three dimensions

CMD 2013 7

EMEA Americas APAC

Current metals

and minerals

IWT Energy

Project

delivery

System

integration

Services

Proprietary

equipments

Technology

Str

ength

enin

g

earn

ing

s logic

on

leadin

g

technolo

gy

Strengthening

geographic

presence

CORE:

Process

technology

leadership

Service

Proprietary

equipment

Delivery

Systems

integration

Technology

A life cycle solution

partner for our

customers

More Opex

Larg

er

sco

pes


Market outlook for minerals and metals industries poses short-term challenges

CMD 2013 8

Capex including Outotec’s addressable market for iron ore, copper, gold, alumina,

aluminum, nickel, lead and zinc. OPEX includes spares, wears and labor.

Sources: Wood Mackenzie , McKinsey , Outotec analysis

EUR bn

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Outotec addressable OPEX

Outotec addressable CAPEX

Bull case

Bear case


Increasing value capture of the industry CAPEX and OPEX by strengthening our earnings logic

CMD 2013 9

Service

Proprietary

equipment

Delivery

Systems

integration

Technology

Value capture by

▪ Offering our industry

benchmark process and

plant solutions

▪ Leveraging our unique

capability to give process

guarantees and deliver

turnkey solutions with

predictable performance,

time and total cost

▪ Growing service business

through further penetration

to installed base and

expanding service offerings

A life cycle solution

partner for our

customers

More Opex

La

rge

r s

co

pe

s

Best ROI

with minimized

ecological impact


Strengthening geographical presence: global mining projects pipeline is strong

CMD 2013 10

Americas

EMEA

APAC

Source: Raw Materials Group, 2013 134 118

384 103

381 450

1 495

193

Conceptual 410

Construction 76 87

Feasibility 46 249

Prefeasibility 107

Brownfield

Greenfield

bUSD Projects


Mining projects in Americas

CMD 2013 11

South America EUR 544.7 million*)

North America EUR 201.3 million*)

*) Outotec sales by destination in 2012

• Top commodities in Outotec’s sales

funnel: Cu, Fe, Au

• North Americas offers opportunities to

increase market share

36% of sales*)

37% of prospects

Source: Raw materials Group, 2013 81 31

190 51

388 91

863 266

Iron Ore 28 89

Copper 38 128

Gold 21 132

All commodities 100 411

Brownfield

Greenfield

bUSD Projects


Mining projects in EMEA

CMD 2013 12

Sub-Saharan Africa EUR 256.6 million*)

Europe (incl. CIS), Middle East, North Africa EUR 694.5 million*)

*) Outotec sales by destination in 2012

• Top commodities in Outotec’s sales

funnel: Fe, Cu, Ni

• Large installed base offers service

opportunities

45% of sales*)

41% of prospects

Source: Raw materials Group, 2013

44

34

251 802

105 350

137

109

Gold

All commodities 66

9

13

29

Iron Ore

Copper

284

82

53

90 Brownfield

Greenfield

bUSD Projects


Mining projects in APAC

CMD 2013 13

Australia and Oceania EUR 234.5 million*)

• Top commodities in

Outotec’s sales funnel:

Fe, Cu, Ni

• South East Asia is an

important growth area Asia EUR 155.9 million*)

*) Outotec sales by destination in 2012 Source: Raw materials Group, 2013

19% of sales*)

22% of prospects

26 145

27 98

98 295

194 729

42 18

Gold 61 16

All commodities

Copper

21 71 Iron Ore

244 63

Greenfield

Brownfield

bUSD Projects


Expanding to Energy and Water

CMD 2013 14

Other 108

(95%)

Outotec’s focus area

6

(5%)

Renewable energy investments

2012, EUR bn

Source: Bloomberg/UNEP

Other 29

(88%)

Outotec’s focus area

4

(12%)

Industrial water treatment

CAPEX market 2012, EUR bn

Source: McKinsey

Focus area includes: Mining, metals and chemicals Focus area includes: Biomass and waste-to-energy

Energy and environmental solutions (incl. water, sulfuric acid and

off-gas) accounted for 14% of sales in 2012 (2011: 11%).


Outotec’s new operating model is driving growth

CMD 2013 15

Customers

MINERALS PROCESSING*)

Concentrators

Comminution

Flotation

Dewatering

Services

Operation &

maintenance

Regions drive growth in

geographical dimension

Business areas drive

growth through life cycle

offerings and expanding

business portfolio to new

areas

EMEA Americas APAC

METALS, ENERGY & WATER*)

Non-ferrous metals Ferrous metals and ferroalloys Light metals Renewable & alternative energy Water treatment Services Operation & maintenance

*)IFRS 8 Reporting segments starting July 1, 2013


Growth and profitability levers going forward

CMD 2013 16

Current

revenues

Process

islands

and plant

solutions

Service Target

Value pricing

Improved product mix

Cost inflation

Pricing pressure

R&D investment

Design-to-Cost

Supply savings

Energy

& IWT

Profitability drivers Growth drivers


Service sales growth through increasing the share of O&M and expert services

CMD 2013 17

O&M

Shutdown

services

Technical services

Modernizations

Spare parts Spare parts

Technical

services

Modernizations Shutdown services

O&M

Service sales target EUR 1bn by 2017

Growth from all service offerings

Personnel estimated to increase in line with service sales growth as the share of more

labor-intensive services will grow

Current split in services Target split in services


Acquisitions – boosting organic growth

CMD 2013 18

Strategic fit;

service,

technology,

energy, IWT

Size; mainly

bolt-on, private

companies

Returns; sales

synergies,

accelerated

time-to-market

Pipeline; good

M&A

opportunities in

all target areas

Track record;

14 acquisitions

since 2008

Valuation;

creditive to

long-term

financial targets


Summary

CMD 2013 19

Key dimensions of growth are:

• Strengthening earnings logic on

leading technology

• Expanding to Energy and Water

• Strengthening geographical

presence

2014 guidance will be provided when

reporting 2013 results on Feb 7.

2014 will be a

challenging year due to

the contraction of the

mining Capex market

Market drivers provide

good mid-to-long term

growth opportunities for

Outotec as a leading

process technology

company


Q&A

Documents

Outotec strategy 2013-2020 - wms.magneetto.comwms.magneetto.com/webcasts/hd1/ot/2013_1204_cmd_01... · Outotec strategy review CEO Pertti Korhonen ... Outotec sales by destination