Post on 06-Feb-2018
© Metso© Metso
Performance and growth opportunities
Metso Capital Markets DayJune 1, 2017
John Quinlivan President, Flow Control business area
© Metso© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area2
Solid performanceWe reacted to the market and secured profitability
More opportunitiesOur markets are attractive with manyopportunities emerging
A time for growthOur strategic initiatives willbroaden our base for sustained growth
© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area3
Metso is a leading flow control solutions provider in many industries
1) Q2/2016-Q1/20172) March 31, 2017
We help our customers improve
operational efficiency, increase
profitability and reduce risks
Sales¹: EUR 642 million
Personnel²: ~2,600
~24%of sales
~22%of personnel
~22%of orders received
Orders received¹:EUR 613 million
Valves 84% and pumps 16% of the business area’s sales
40+ Service centers 400+ Field service experts
© Metso
Flow Control valve business rolling 12-month EBIT-% development vs. peers*
Valve business rolling 12-month EBIT-% development vs. peers
Flow Control valve business rolling 12-month sales development vs. peers*
Valve peers
Metso valves
Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area
Our performance has been resilient in a challenging market
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Pumps business
Metso shows signs of improvement in sales along with a highly profitable business compared to peers
90
100
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150
160
Metso valves
Valve peers
Indexed (Q1/2011 = 100)
Valve business rolling 12-month sales development vs. peers
Peers include Emerson (estimated Valves, Actuators & Regulators, excl. Pentair Valves & Controls), Flowserve (Flow Control), Crane (Fluid Handling) and Velan.
© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area5
Growth results in a very strong bottom line within our operational model
We have tightly managed our operative costs and capital expenditure
Flow Control rolling 12-month sales and adjusted EBITA %
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2011 2012 2013 2014 2015 2016 2017
Services sales Equipment sales Adjusted EBITA, %
EUR million
Sustained level of high performance
© Metso© Metso
29%
22%18%
18%
13%
Oil & gas (mid and downstream) 29%Petrochemical and chemical 22%Pulp & paper 18%Mining 18%Power and other process industries 13%
Diversified sales mix with large share of services is our strength
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Sales¹ by region Sales¹ by industry
33%
31%
15%
8%
7%6%
North America 33%Europe 31%Other Asia Pacific 15%Africa and Middle East 8%South America 7%China 6%
1. Q2/2016-Q1/2017In the revised split oil & gas includes oil & gas production, LNG, transportation, refining, as well as industrial gas. In 2016 annual report combined total oil & gas was 51%.Power and other industries includes among others power, geothermal, bioenergy, water and waste water and food processing
Sales¹ by type
61%39%
Services Capital
© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area7
Markets we serve are showing signs of recovery
Quotation activity on oil and gas projects has gradually improved
Higher investments in pulp and paper projects
Customers have clearly increased their MRO* spending both in valves and pumps
Global market drivers Recent development
Our strategy is to capture new industries with new growth drivers
Flow control end markets have strong long-term growth potential
Oil and gas midstream and downstream investments
Chemicals and petrochemicals investments
Pulp and paper investments
Mining investments
*MRO=Maintenance, repair and operations
© Metso8
Our target is to grow faster than the overall flow control industry
We create new opportunities in attractive industries
We are well positioned to capture MRO* business
We have a strong platform that can scale up to deliver profitable growth
We build on our extensive knowledge and presence in services
We grow through many channels to market
We renew our product portfolio
We further enhance our operational excellence
We improve customer experience and service level
*MRO=Maintenance, repair and operations Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area
© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area
We grow through many channels to market
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We complement our strong existing sales network and accelerate sales footprint expansion
Our strategy is to:
1. Grow through multi-tier channels2. Grow the OEM customer base3. Develop the industry-specific partner network 4. Expand the pump sales network
Our portfolio is attractive to new channel partners
We collaborate with our customers and partners to further develop our product portfolio
We improve our customer presence and service levels
We expand our portfolio
© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area
We have extensive knowledge and presence in services
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Optimized service footprint
• We utilize our installed base information to assist customers in optimizing their flow control assets over the life cycle
• We provide value-adding, performance-improving solutions for our customers
New service models
More insight from installed base data
• We take full advantage of our 40+ service center network with over 400 field service experts available globally
• We developed new tools and processes for plant shutdowns. • In 2016 we managed 100+ shutdowns
and turnarounds globally• Digitalization: We are implementing global field service
management systems in 2017
© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area
Continuing to renew our product portfolio
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Neles BWX ® butterfly valve customization
Neles NDX® valve controller releases
Jamesbury ® ball valve renewal
Neles ® globe valve expansion
Metso slurry pump expansion and renewal
We improve our competitiveness with engineering to value, improved time-to-market and agile processes
© Metso
We are developing our tools and processes to better serve our customers and partners
Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area12
By utilizing well-organized front-end processes and toolsBy upgrading the sales network and implementing customer satisfaction programs
By improving our valve selection and configuration capability By optimizing order execution through the entire supply chain
By improving our processes and developing new digital tools for EPC project business
We improve customer experience and service level
We expand our capabilities through digitalization
We manage complexity and reduce lead-times
© Metso
We are well positioned through our global operation footprint to optimize cost and service
Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area13
Continuous HSE development
Strong gross profit throughout the cycle
• Utilize and flex capacity in all valve and pump plants globally
• Share knowledge in engineering and manufacturing execution
• Enhance project execution to improve profitability
• Confirm strong safety culture in all functions and organization levels
• Capacity adjustment to market demand
• Lean model in all sites • Global order management
development to support growth
• Risk observations, safety conversations, HSE audits
Defending our product margins
• Continue cost management• Partner with key suppliers in India and China• Expand our operating footprint in India and China
• Continued procurement savings• Global procurement model
implemented• Supplier quality development
2015-2016 achievements Current priorities
© Metso© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area14
We expand our growth opportunities
Solid performanceWe have a track record of delivering profitability and we are well positioned for growth
MoreopportunitiesOur markets are attractive with many opportunities emerging
A time forgrowthOur strategic initiatives will broaden our base for sustained growth
© Metso
Global refinery capacity2
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There are more opportunities in process industries horizontally - We have built a flow control platform with a strong position in a number of niches
Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area16
Global base chemicals demand3
Global O&G CAPEX1 Global pulp and paper capacity4
1. Morgan Stanley, Rystad2. GlobalData3. IHS4. Pöyry5. Metso analysis
Global mining CAPEX5
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Paper
Pulp
Million t/aUSD billion CDU bbd
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Mmt
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USD billion
© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area17
Our operations footprint is modern and geographically well-spread
Slurry pump assembly
Valve technology center / supply center
Sorocaba, Brazil
Vereeniging, South Africa
Vadodara, India
Helsinki, Finland
Horgau, Germany
Shanghai, China
Chung-ju, South KoreaMetso Park, Alwar, Rajasthan, India
Sala, Sweden