Interim Report Q3/2022

Segment information for 2021 has been restated to reflect the segment structure changes that were announced in January 2022.

Figures in brackets refer to the corresponding period in 2021, unless otherwise stated.

Third-quarter 2022 in brief

  • Strong market activity continued
  • Orders received totaled EUR 1,401 million (EUR 1,649 million, including an exceptionally large order of EUR 360 million)
  • Sales grew 37% to EUR 1,402 million (EUR 1,023 million)
  • Adjusted EBITA increased to EUR 207 million, or 14.8% of sales (EUR 139 million, or 13.6%)
  • Operating profit increased to EUR 192 million, or 13.7% of sales (EUR 107 million, or 10.5%)
  • Cash flow from operations was EUR 21 million (EUR 172 million), affected by an increase in net working capital

January–September 2022 in brief

  • Orders received increased 8% to EUR 4,435 million (EUR 4,111 million)
  • Sales grew 31% to EUR 3,861 million (EUR 2,958 million)
  • Adjusted EBITA increased to EUR 519 million, or 13.4% of sales (EUR 384 million, or 13.0%)
  • Operating profit was EUR 319 million, or 8.3% of sales (EUR 295 million, or 10.0%), including a EUR 150 million non-recurring charge related to the wind-down of the business in Russia booked in the second quarter
  • Earnings per share were EUR 0.24 (EUR 0.24)
  • Cash flow from operations was EUR 110 million (EUR 444 million)

President and CEO Pekka Vauramo:

We delivered an overall strong third quarter, with orders at a healthy level, solid sales growth and the highest ever adjusted EBITA margins for the Group as well as for all three segments. Customer activity was in line with our expectations during the quarter, which was reflected in particular in strong services order growth. The total order intake was lower year-on-year, due to an exceptionally large smelter order booked in the third quarter last year. Adjusting for the one large order and the wind-down of the business in Russia, orders increased 27% year-on-year.  

The Group’s sales grew 37%, as we continued to deliver our backlog efficiently despite challenges that remain in the global supply chain. In addition to higher equipment deliveries, we continued to see strong services sales volumes, thanks to the services order growth during the previous quarters. Driven by volume growth and our successful price and cost management, the Group’s adjusted EBITA increased 49% to EUR 207 million in the third quarter. This corresponds to an adjusted EBITA margin of 14.8%, which is thus far the highest we have reported and very close to our 15% margin target. Our performance was strong across the portfolio and all three segments improved their results, despite a slightly negative impact from the continued strengthening of the US dollar.

We also continue to deliver well in terms of our sustainability agenda; particularly positive was the 45% growth in the Planet Positive sales compared to full-year 2021. The highlight of our Planet Positive orders was a multi-year Life Cycle Services contract for Boliden’s Kevitsa mine in Finland. In addition to the supply and optimization services of the Megaliner™ liners for four mills, the agreement also includes a novel Planet Positive mill lining recycling service for used liners. This is an attractive solution supporting the customer’s operative and sustainability targets and further increasing their liner wear-life. In addition to supporting our customers' sustainability efforts with Planet Positive products, we are tracking ahead of our target in supplier sustainability engagement and concluded several actions during the quarter to reduce CO2 emissions in our own footprint.

Looking ahead, we expect customer activity to remain strong in our main markets, except for the aggregates market in Europe, which is expected to be affected by the anticipated economic downturn in the region. While there are challenges in the global economy, which may have an impact on our business environment, we will continue to focus on implementing our strategy and internal actions designed to further improve our performance and resilience in changing conditions.  

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 overall market activity to remain at the current level, with the mining market remaining strong and the aggregates market declining due to the expected softening of the European market.

Key figures

EUR million

Q3/2022

Q3/2021

Change %

Q1–Q3/2022

Q1–Q3/2021

Change %

2021

Orders received

1,401

1,649

-15

4,435

4,111

8

5,421

Orders received by services business

730

590

24

2,193

1,757

25

2,393

% of orders received

52

36

49

43

44

Order backlog

 

 

 

3,757

3,496

7

3,536

Sales

1,402

1,023

37

3,861

2,958

31

4,236

Sales by services business

698

519

34

1,865

1,540

21

2,126

% of sales

50

51

48

52

50

Adjusted EBITA

207

139

49

519

384

35

547

% of sales

14.8

13.6

13.4

13.0

12.9

Operating profit*

192

107

80

319

295

8

425

% of sales

13.7

10.5

8.3

10.0

10.0

Earnings per share, continuing operations, EUR

0.16

0.09

78

0.24

0.24

0.35

Cash flow from operations

21

172

-88

110

444

-75

608

Gearing, %

 

 

 

30.1

26.5

20.9

Personnel at end of period

 

 

 

16,277

15,558

5

15,630

*In Q2/2022, a EUR 150 million non-recurring charge related to Russia was booked in Group Head Office and other.

Audiocast and conference call details

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 October, 28 at 1:00 p.m. EET.  

The audiocast can be followedat https://metso-outotec.videosync.fi/2022-q3

A recording and a transcript will be available on this webpage after the event has finished.    

Conference call participants are requested to register on the link below. 

https://call.vsy.io/access-9380


Further information, please contact: 

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