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Half-Year Report H1/2021

Metso Outotec Half-Year Report for January-June 2021

Metso Outotec has prepared both illustrative and IFRS-based historical segment information for January-June 2020, prior to the merger of Metso Minerals and Outotec. The illustrative combined historical information is presented as a combination of Metso Minerals carve-out information and Outotec information, according to the Metso Outotec structure.

Figures in brackets refer to the corresponding period in 2020, unless otherwise stated.

Second quarter 2021 in brief, IFRS (comparison period illustrative combined)

  • Strong market activity in all segments
  • Orders received grew by 43 percent to EUR 1,360 million (EUR 953 million)
  • Sales EUR 1,010 million (EUR 1,016 million)
  • Adjusted EBITA EUR 131 million, or 12.9% of sales (EUR 139 million, or 13.7%)
  • Operating profit EUR 97 million, or 9.6% of sales (EUR 89 million, or 8.8%)

January-June 2021 in brief, IFRS (comparison period illustrative combined)

  • Orders received grew by 21 percent to EUR 2,462 million (EUR 2,037 million)
  • Sales EUR 1,935 million (EUR 1,963 million)
  • Adjusted EBITA EUR 245 million, or 12.7% of sales (EUR 234 million, or 11.9%)
  • Operating profit EUR 188 million, or 9.7% of sales (EUR 158 million, or 8.0%)
  • Earnings per share EUR 0.15
  • Cash flow from operations EUR 272 million
  • EUR 105 million annual run rate of the Metso Outotec cost synergies achieved by the end of June

President and CEO Pekka Vauramo:

During the second quarter, we saw continued positive market development as well as good progress in our integration and sustainability actions. Market activity, which started to improve in late 2020, was strong in all our segments and translated into an order growth of 43% in the second quarter. The Aggregates business has enjoyed a robust recovery of infrastructure investments in Europe and in the US, and quarterly orders were even higher than in the first quarter. The Minerals and Metals segments had a steady flow of small and mid-size orders, and in addition, received a few larger orders. Importantly, we have won many of these orders thanks to our Planet Positive portfolio, which is designed to help our customers to improve the sustainability and productivity of their operations. The pandemic continues to limit the opportunities in the services business, as restrictions to site access are in place in some markets. On the other hand, in those markets, where the situation has eased, activity related to on-site service work is increasing.

The Metso Outotec integration has proceeded ahead of plan, and as of the end of June we had achieved a run-rate of EUR 105 million in cost synergies. This compares to our target of EUR 120 million run-rate at the end of 2021, which we are confident to meet. Revenue synergies are also materializing, and our backlog related to revenue synergies stood at EUR 91 million at the end of June. In addition to the integration, we are making progress on our portfolio streamlining with the divestments of the Aluminium business and most recently the Waste Recycling business.

Our quarterly sales were flat year-on-year, despite the strong growth in the Aggregates segment. The Minerals and Metals segments are, as expected, impacted by timing of deliveries in our backlog being weighted to the second half of the year. The rapid economic recovery has put pressure on global supply chains and logistics, and as this has coincided with the implementation of our internal footprint and warehouse consolidation, it resulted in delivery delays in our Minerals business. We have implemented corrective actions and will be able to deliver more efficient and sustainable logistics to our customers. Lower sales affected Minerals’ profitability, while Aggregates achieved a stronger adjusted EBITA margin than ever before. The profitability of the Metals segment turned to positive, thanks to the successful turnaround actions.

Looking forward to the second half of the year, we expect to see further recovery from the pandemic and our customers being active in their ongoing operations and future investments. Sustainability is becoming one of the top priorities for consumers and industries and it is a strategic priority for us as well. Thanks to this approach, we are confident that we are well-positioned and have the most comprehensive offering to help our customers to meet their sustainability and productivity targets.   

Covid-19 market update

The Covid-19 pandemic continued to affect Metso Outotec’s end markets and customer operations during January-June 2021. Restrictions on workforce mobility and limited access to customer sites were still effective in the second quarter in several countries, while in some other markets, such as North America and Australia, domestic travel has recovered enabling an increase in customer activity related to on-site work. Metso Outotec’s own operations have continued to run with additional health and safety measures and without major disruptions.

Market outlook

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.

Metso Outotec expects the market activity to remain at the current strong level, subject to the development of the Covid-19 pandemic.

Key figures (Q2/2021 IFRS, other periods illustrative combined)

EUR million

IFRS Q2/2021

Restated* Q2/2020

 

Change %

Q1-Q2/2021

Restated Q1-Q2/2020

 

Change %

 

2020

Orders received

1,360

953

43

2,462

2,037

21

4,150

Orders received by services business

577

531

9

1,136

1,092

4

2,071

% of orders received

42

56

-

46

54

-

50

Order backlog

-

-

-

2,876

-

-

2,366

Sales

1,010

1,016

-1

1,935

1,963

-1

3,897

Sales by services business

511

513

0

993

1,012

-2

2,017

% of sales

51

51

-

51

52

 

52

Adjusted EBITA

131

139

-6

245

234

5

448

% of sales

12.9

13.7

-

12.7

11.9

 

11.5

Operating profit

97

89

9

188

158

19

253

% of sales

9.6

8.8

-

9.7

8.0

-

6.5

Earnings per share, continuing operations, EUR (IFRS)

0.07

-

-

0.15

-

-

0.20

Cash flow from operations (IFRS)

107

-

-

272

-

-

587

Gearing, % (IFRS)

-

-

-

33.5

45.6

-

39.2

Personnel at end of period

15,681

-

-

-

-

-

15,466

*Excluding Recycling business, which is classified as discontinued operations

Audiocast and conference call details

Metso Outotec’s President and CEO Pekka Vauramo and CFO Eeva Sipilä will present the results in an audiocast and a conference call for analysts and investors on the same day at 1:00 p.m. EEST.  

The audiocast can be followedat https://metso-outotec.videosync.fi/2021-q2-results

A recording and a transcript will be available on this webpage after the event has finished.  
  
Conference call participants are requested to dial in five minutes before the event on:  
United States: +1 631 913 1422  
other countries: +44 333 300 0804  

The confirmation code for joining the conference call is 92149959#

Further information, please contact: 
 
Juha Rouhiainen, Vice President, Investor Relations, Metso Outotec Corporation, tel. +358 20 484 3253, email: juha.rouhiainen(a)mogroup.com