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© Metso
Building sustainable, profitable growth
Metso Capital Markets DayJune 1, 2017
Victor TapiaPresident, Minerals Capital business area
© Metso2
Agile modelRight company to operate in all market situations
GrowthRight initiatives in place to grow our market share
Best portfolioBest technology and portfolio to serve our customers
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area
© Metso Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area3
Metso is a lean, efficient technology leader
Sales*: EUR 730 million
Personnel**: ~2,600
~28%of sales
~22%of personnel
~31%of orders received
Orders received*:EUR 854 million
We grow by being the leading technology
provider for end-to-end minerals processing
* Q2/2016 – Q1/2017** March 31, 2017
© Metso© Metso
35%
50%
15%
Mining 35%Aggregates 50%Recycling 15%
31%
26%16%
15%
12%
Europe 31%Asia-Pacific 26%North America 16%South America 15%Africa and Middle East 12%
We serve mining, aggregates and recycling customers globally
Sales* by segment Sales by offering Sales* by region
4
84%
16%
74%
26%
MCA Equipment 84%
MCA Systems 16%
MNG Equipment 74%
MNG Systems 26%
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area
17%
10%
4%4%
50%
15%
Copper 17%Others 10%Iron ore 4%Gold 4%Aggregates 50%Recycling 15%
Sales* by commodity
*Q2/2016 – Q1/2017
© Metso© Metso
86%
14%
Standard sales 86%
Systems sales 14%
There is a great opportunity in capitalizing on replacement & upgrade sales
5
Sales* by offering
AggregatesMining
23%
51%
26%
Standard sales 23%Complex sales 51%Systems sales 26%
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area *Q2/2016 – Q1/2017
© Metso© Metso
Volume and margins moving in the right direction
Margins maintained despite lower volumes...
0
25
50
75
100
125
0
500
1,000
1,500
2,000
2,500
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
17Q1
Capital sales, recycling, rolling 12 monthsCapital sales, mining, rolling 12 monthsCapital sales, aggregates, rolling 12 monthsGross profit, Indexed (Q1/2012 = 100)
...after major restructuring
• Initiatives to maintain margins
- More sales-oriented operative model
- Sales mix: more aggregates and less systems business
- Global pricing management
- Global procurement
- Consolidation to streamline our operations
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area6
EUR million
© Metso
1,413 1,240 1,191 1,103 926 826 779
3,4753,120 2,725
2,3392,104 1,975 1,802
4,8884,360
3,9173,442
3,030 2,801 2,581
0
1,000
2,000
3,000
4,000
5,000
6,000
2013 Dec 2014 Jun 2014 Dec 2015 Jun 2015 Dec 2016 Jun 2016 Dec 2017 Mar
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area7
We’ve cut costs while retaining customer, sales and engineering expertise
Minerals Capital employees
SGA COGS
2,619
1,826
793
© Metso
Capital equipment market in mining is cyclical
8
Maintenance capex has been more stable We aim to increase market share
• We have reached the bottom and the long-term outlook is positive
• We will increase replacement and upgrade sales related to maintenance capex
• Strong outlook for gold driven by smaller mines that are getting complex and costlier to mine
• We are diversifying to get new revenue streams outside top commodities
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area
41
71
109124
76
115
156
192178
141121 117
0
50
100
150
200
250
2003 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Exploration Maintenance capex Project
Capital expenditure of global mining companies (bn USD)
Source: McKinsey Basic materials Institute; Minex
© Metso
We expect global construction aggregates market to start growing againMetso is growing faster than the market in aggregates Market is less cyclical
• Market is regional or even local, no actual global market exists
• Market correlates with overall economic growth
• No significant change seen in customer behavior or in competitive landscape unlike in mining
262 238 234 238 215 221 231
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 2017e 2018e
9
3.6%-4.8%
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area
Largest construction equipment manufacturers’ sales development (bn EUR)
Includes largest publicly listed construction equipment manufacturers, 2017e & 2018e are analyst consensus estimates
© Metso
Our strategy for sustainable, profitable growth
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area10
Growth
Stability
Profitability• Strong player in the market with leading brand• Superior core technology• Design for cost• Competence to market our solutions globally
• Innovation and vitality of product portfolio• Digitalization• Market share increase through replacement sales focus
• Agile and resilient operations• Standardization• Supply chain optimization• Quality and safety priority
© Metso
Growing in mining through replacement & upgrade sales
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area11
• Currently we have an installed base of ~ 70,000 units of equipment in the market
• For example ~ 6,000 Symons crushers that are in average 30 years old
• From reactive to proactive approach in sales
• Primary focus on products with best potential –inefficient, old, unsafe and non-environmental
• Close cooperation with our service teams
Our large installed base generates more replacement and upgrade opportunities
© Metso© Metso
Adding value to customer operations at a mine in Peru through upgrade sales
Added value analysis done to reduce overall OPEX on whole comminution circuit by upgrading existing crusher
MP800’s unique ability to produce a finer feed to grinding, reducing overall OPEX in comminution circuit
Further potential in spares, wears and life cycle services sales in next years
Full-scope services to support the
replacement.
Capacity increased to
20,000 tons-per-day (previously
18,000)
Estimated production value increase USD 15 million per year.
12
Short lead time for MP800 resulted in lowest possible impact on plant operation
Simulation techniques used to optimize selection of most suitable crusher to replace & upgrade Symons
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area
New generation Metso MP800 crusher selected
© Metso
Continuous product innovation ensures lower total cost of ownership for customers
13
Digital solutions for higher performance & smarter operations
New Urban™ Series for sustainable, community-friendly crushing
Industry-changing MX™ cone crusher range for higher uptime
Screensand feedersNew UltraFine Screen range offering extra capacity
New Hydrocyclone range for improved ease of maintenance
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area
Our development principle is to produce more efficient products and disruptive technologies
Lighter and safer designs; focus on modularity, mobility and energy efficiency
© Metso14
Agile modelRight company to operate in all market situations
GrowthRight initiatives in place to grow our market share
Best portfolioBest technology and portfolio to serve our customers
Metso Capital Markets Day 2017 | Victor Tapia | President | Minerals Capital business area
company/metso metsogroup metsoworldmetsoworld metsogroup
www.metso.com