Sustainable use of Earth’s natural resources - Outotec use of Earth’s natural resources CFO Jari...
Transcript of Sustainable use of Earth’s natural resources - Outotec use of Earth’s natural resources CFO Jari...
Sustainable use ofEarth’s natural resources
CFO Jari Ålgars
Navigating the Nordics Seminar 2017, Stockholm, Danske Bank
© Outotec – All rights reserved
Safety performance
Navigating the Nordics Seminar2017
• Lost Time Incidents per millionworking hours (LTIR) includesOutotec employees andcontractors working underOutotec supervision.
• Since 2015, Outotec has hadless working hours than in2013-14 when there wherelarge projects withextraordinary safetyperformance compared toglobal peers.
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Outotec at a glance
2017 Navigating the Nordics Seminar
Key figures
Financial performance
Geographic coverage
Business overview
*) Combined basis2010 onwards aEBIT, excl. restructuring and acquisition-relatedcosts as well as purchase price allocation amortizations.
MEUR %
FY 2016 FY 2015
Net Sales, MEUR 1,058 1,201
Share of services in sales, % 42 43
Gross Margin, % 22 28
Adjusted EBIT, % -2 5Gearing, % -1 10
Equity ratio, % 40 31Balance sheet total, MEUR 1,427 1,531
• Outotec is a global leader in minerals and metals processingtechnology, deliveries to more than 80 countries
• Outotec designs and delivers tailored solutions for minerals andmetals processing, water treatment, and waste-to-energy
• Delivers solutions which minimize the plant’s lifetime cost bymaximising recovery and utilizing less energy and water.
• HQ in Finland, some 4,200 employees (2016) in 34 countries
Outotec R&D, sales and service centersOutotec manufacturing/assembly
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Portfolio of world-class technologies and services
2017 Navigating the Nordics Seminar
RESOURCE EXTRACTION PRIMARY PRODUCTION RECYCLING
Green color shows Outotec`s expertise
MANUFACTURING USERS
FERTILIZERPRODUCTION
AGRICULTURE ENERGYPRODUCTION
PHOSPHORUS
SULFURIC ACIDPHOSPHORUSLandfill
BackfillEnergyrecovery
INDUSTRIALMINERALS
METALSSALTS
CHEMICALSSLAG
RECYCLE REMANUFACTURE
EffluentTreatment
AirborneemissionWater
management
Airborneemission
CO2CO2 CO2 CO2
MINING
Equipmentreuse
Reuse
Urbanmine
POWER PRODUCTION
NATURALRESOURCES
ORESMINERALS
WATER
BIOMASS
SERVICES ANDSOLUTIONS
COMBUSTIBLEWASTE
MUNICIPAL SLUDGE
MINERALPROCESSING
METALPROCESSING
Constructionmaterials
CONCENTRATES
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Increasing demand for sustainable technologies
2017 Navigating the Nordics Seminar
We have a deep knowledge of minerals andmetals processing technologies for low-gradeand complex ores.
We provide the most energy-efficient processtechnologies in the industry.
Adoption of our best practice technologiesworldwide could save 40-70 million tonnes ofCO2 in non-ferrous metals production alone.
Our solutions provide significant reduction infresh water consumption and water loss byrecycling process water.
We enable environmentally sustainable use ofwaste-to-energy as well as sludge incinerationand waste as alternative energy sources.
We provide technologies for metals recyclingand waste to energy solutions.
Ore grades are declining and ores arebecoming more complex.
Cleaner solutions must be developed toreduce CO2 and other emissions.
Water availability and pollution arecritical issues.
Alternative energy sources are needed.
More recycling is needed.
Ore grades
Emissions
Water
Energy
Recycling
EnergyMaking metals is energy intensive.
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Minerals Processing segment’s offering
A complete portfolio of leading process solutions and services with full plant delivery capability
WaterTechnology
FLSmidth, CITIC,Metso,ThyssenKrupp
FLSmidth, Metso,BGRIMM, Tenova,Woodgrove
FLSmidth, Tenova-Delcor, WesTech
Aqseptence-Diemme, Metso,Andritz, FLSmidth
Thermo Fisher,BGRIMM, Blue Cube
APC: Metso,Woodgrove, SGSMinerals
DCS: Major DCSsuppliers
FLSmidth, Golder,GR Engineering,AMC
Customers ownmaintenance,Major tech.suppliers, Localcompanies
Thickening AnalyzersGrinding Flotation AutomationFiltering ServicesTailings management
1,100 grindingmills delivered,strong in S/Msize mills andprocesstechnology
10,000 flotationunits deliveredsince 1960s,bigcell technologyreferences,automation
1,800 thickenersdelivered, globalprojectexecutioncapability,feedwell design
Full analyserportfolio, lowestmin detectionlimits, only Xrayused
Uniquecombination ofautomation &analysers,important for riskmanagement
Full processand equipmentportfolio,effluenttreatment andbackfill plants
Prop equipmentand totalprocessknowhow,global servicenetwork
3,500 filtersdelivered, mostefficientconcentratefiltering, provenperformance
Competition fragmented, a number of players competing in part of the portfolio
2017 Navigating the Nordics Seminar
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2017 Navigating the Nordics Seminar
Industry-leading technologies, process solutions and services
Metals, Energy & Water segment’s offering
Ferrous metals Sulfuric acid/Off-gas/Roasting
Fives, FLSmidth,Metso,Aqseptence-Diemme
Kobelco, Metso,Primetals, Jemeco
SMS Siemag,Tenova, Jemeco
GEA Bischoff,MECS
Alumina,Aluminum Base metals (Cu, Ni,
Zn, Au, Ag, PGM)Ferroalloys
GlencoreTechnology, Tenova
Strong in CFBAluminiumCalcination andHOT TubeDigestion
Over 60% of theworld’s pellets aremade withOutotec’stravelling gratetechnology
650 acid plantsand 270 non-ferrous roastingplants
Strong in Cusmelting, anodecasting, SX and Znleaching, strong inNi smelting andEW
Energy Water
Alumina calciner,Green anode plants,
Rod Shop
Sintering, Pelletizing,Direct Smelting
Sulfuric acid plant,Roasting
Smelting, Converting,Leaching, SX/EW,
electrorefining
Smelting,Preheating, Steel
Belt Sintering
Waste-to-energy,Sludge incineration
Industrial watertreatment, municipal
water systems
Competition fragmented, a number of players competing in part of the portfolio
Services
Advisory, maintenance,operations & remoteservices, upgrades
Valmet, Andritz,Babcock&Wilcox
Veolia, GE Water,Suez
FLSmidth, Metso,major tech suppliers,locals and customers
Strong in FerroChrome, 20pelletizing andsinter plants and9 smelters forferroalloys
Versatile waste-to-energysolution, over250 materialsused
Effluenttreatment plants,backfill plants,water recycling
Shutdownservices, bestsuited to provideservices for owntechnologies
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The best ROI with least ecological impact
With Outotec’s tailored solutions andservices our customers will get:• Performance guarantees• Optimized processes• Fast and reliable ramp-up• High material recovery• Efficient use of raw materials,
energy and water• Low lifetime operating cost
2017 Navigating the Nordics Seminar
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Long-term customer relationships
2017 Navigating the Nordics Seminar
In history, top ten customers have accounted for some 35% of sales.
Major global mining companies Local mining and metallurgicalcompanies in emerging regionsIntermediate sized companies
Selected reference customers of Outotec
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26343545
Offering industry’s most sustainable processing technologies
2017 Navigating the Nordics Seminar
5,870
2015
5,469
2014
5,067
2013
5,400
2016
Our handprint is bigger than our footprintThousands of tons of CO2-equivalent
Footprint: Outotec’s greenhouse gas emissions
Handprint: Greenhouse gas emissions avoidedthrough use of Outotec’s technologies
The 90thmost
sustainablecompany in the
world (2017)
EnvironmentalGoods and
Services equals
to 90% oforders (2014-16)
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MEW’sprofitability weak,
cost savingscontinue
Goodperformance in
MP
Improved orderintake:
equipment,plant and serviceorders increased
Fixed costsavings andhigher sales
improvedprofitability
Low level ofadvance
payments andmature order
backlog impactedcash flow
Q1 in a nutshell
2017 Navigating the Nordics Seminar
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Seasonality in MP orders, MEW showing signs of recovery
2017 Navigating the Nordics Seminar
MEUR MEUR
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Improved order intake YoY, book to bill rate above one
2017 Navigating the Nordics Seminar
MEUR
RoughlyMEUR 680 to bedelivered in 2017
MEUR 1,051,
some 21%
services
Iranian projectsnot in backlog:
MEUR 192 (220)
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Sales reflecting increased equipment orders in 2016
2017 Navigating the Nordics Seminar
MEUR Q12017
Q12016
Change,%
Incomparable
currenciesSales 268 240 12% 7%Service sales 99 114 -13% -18%Share of services in sales, % 37 48Gross margin, % 23 24Adjusted EBIT* 1 -5Adjusted EBIT*, % 0 -2- Restructuring and acquisition-related costs -0 -6- PPA amortization -2 -2EBIT -1 -12EBIT, % -0 -5Result for the period -3 -12Unrealized and realized gains related to valuationof FX forward agreements 2 1* Excl. restructuring and acquisition-related costs and PPA amortizations.
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Minerals Processing - further improved performance
2017 Navigating the Nordics Seminar
Sales and adjusted EBIT development, quarter
• Equipment orders increased, orderintake up 40%
• Sales increased 36%• Profitability improved
Minerals ProcessingMEUR
Q12017
Q12016
Change,%
In compcurrency, %
Order intake 146 104 40 35
Sales 153 113 36 31
Service sales 68 64 6 -0
Adjusted EBIT*) 11 5
Adjusted EBIT*), % 7 4
Unrealized and realizedgains/losses related to valuationof FX forward agreements -0 2
* Excl. restructuring and acquisition-related costs and PPA amortizations
MEUR
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Metals, Energy & Water – order intake improved but resultstill negative• 161% increase in order intake• Sales declined 10% due to low opening order
backlog• Profitability weak, savings actions continue
2017 Navigating the Nordics Seminar
Metals, Energy & WaterMEUR
Q12017
Q12016
Change,%
In compcurrency, %
Order intake 172 66 161 160
Sales 114 127 -10 -12
Service sales 30 50 -39 -40
Adjusted EBIT*) -9 -9
Adjusted EBIT*), % -8 -7
Unrealized and realizedgains/losses related to valuationof FX forward agreements 3 -1* Excl. restructuring and acquisition-related costs and PPA amortizations
Sales and adjusted EBIT development, quarter
MEUR
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Mature order backlog, timing, and low level of advancepayments impacted cash flow
2017 Navigating the Nordics Seminar
MEUR Q12017
Q12016
Result for the period -3 -12Adjustments- Depreciation & amortization 10 10- Other adjustments 3 7Change in working capital -42 -37Interest -1 0Taxes -2 -2NET CASH FROM OPERATING ACTIVITIES -34 -34NET CASH USED IN INVESTING ACTIVITIES (incl. Capex and acquisitions) -4 -3Repayments & borrowings of non-current debt -0 -60Hybrid bond - 150Interest paid on hybrid bond -11 -Other financing activities 11 -0
NET CASH FROM FINANCING ACTIVITIES -1 90NET CHANGE IN CASH AND CASH EQUIVALENTS -39 53Foreign exchange rate effect on cash and cash equivalents 2 -2Cash and cash equivalents at March 31 195 352
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Liquidity and equity remained solid
2017 Navigating the Nordics Seminar
Q12017
Q12016
Net interest-bearing debt*, MEUR 44 -69
Gearing*, % 9 -13
Equity-to-assets ratio*, % 39 41
Return on investment, %, LTM -8 -2
Return on equity, %, LTM -12 -6
Working capital at the end of the period, MEUR 18 -58
Advances received, MEUR 178 229
Equity, MEUR 490 538
Balance sheet total, MEUR 1,422 1,556* If the hybrid bond were treated as a liability the net interest-bearing debt MEUR 194.1, gearing 57.1% and equity-to-assetsratio would be 27.4% (March 31, 2016: MEUR 80.5, 20.7% and 29.3% respectively).
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Market outlook
2017 Navigating the Nordics Seminar
MEW technologyportfolio providesopportunities in a
number of endmarkets
Gold and copperprojects most
active, improvedactivity also in
other base metalsprojects
MP opportunities inprocess
improvements,smaller equipment
deliveries andservices
Timing of largeorders remains
difficult to foresee
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Reiterated guidance: The guidance for 2017 is based onthe current order backlog and market outlook, as well asachieved cost savings
2017 Navigating the Nordics Seminar
From backlog~MEUR 680, or 65%
From new orders~MEUR 100 – 200+=2017 expected sales
~ MEUR 1,050 – 1,150
Adjusted EBIT*
is expected to be approximately 3-5%* Excluding restructuring and acquisition-related costs as well as purchase price allocation amortizations.
Q1 salesMEUR 268 +
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Our focus areas for 2017 - towards profitable growth!
2017 Navigating the Nordics Seminar
• Continue to win orders in a competitivemarket
• Continue cost savings to reach stability inthe Metals, Energy & Water
• Strong focus on service business, newServices business unit since April 1
• Improve competitiveness of products
• Strengthen customer centricity
• Strategy workStability
Profitability
Growth