Half-Year Review January-June 2019





Metso’s Half Year Review for January-June 2019 was published on Thursday, July 25, 2019.

Metso’s President and CEO Pekka Vauramo and CFO Eeva Sipilä will presented the results in an audiocast which is viewable above.

April-June 2019 in brief

  • Healthy market activity in both segments
  • Orders received increased 2% to EUR 869 million (855 million)
  • Sales grew 16%, totaling EUR 903 million (776 million)
  • EBITA improved to EUR 119 million, or 13.1% of sales (91 million, or 11.7%)
  • Operating profit improved to EUR 114 million, or 12.6% of sales (86 million, or 11.1%)
  • Earnings per share were EUR 0.59 (0.38)
  • Free cash flow was EUR 28 million negative (21 million positive)
  • Agreement to acquire McCloskey International, a Canadian mobile crushing and screening equipment manufacturer, was signed. The acquisition of a Chilean mining services business was completed.

January-June 2019 in brief

  • Orders received increased 10% to EUR 1,883 million (1,714 million)
  • Sales grew 17%, totaling EUR 1,739 million (1,490 million)
  • EBITA was EUR 222 million, or 12.8% of sales (176 million, or 11.8%)
  • Operating profit was EUR 214 million, or 12.3% of sales (167 million, or 11.2%)
  • Earnings per share were EUR 1.02 (0.71)
  • Free cash flow was EUR 10 million (23 million)

Key figures

EUR million

Q2/2019

Q2/2018

Change %

H1/2019

H1/2018

Change %

2018

Orders received

869

855

2

1,883

1,714

10

3,499

Orders received by services business

507

463

10

1,025

954

7

1,913

    % of orders received

58

54

 

54

56

 

55

Order backlog at the end of period

     

1,850

1,601

16

1,686

Sales

903

776

16

1,739

1,490

17

3,173

Sales by services business

472

442

7

934

864

8

1,773

    % of sales

52

57

 

54

58

 

56

EBITA

119

91

31

222

176

26

369

    % of sales

13.1

11.7

 

12.8

11.8

 

11.6

Operating profit

114

86

33

214

167

28

351

    % of sales

12.6

11.1

 

12.3

11.2

 

11.1

Earnings per share, EUR

0.59

0.38

55

1.02

0.71

44

1.53

Free cash flow

-28

21

 

10

23

-57

146

Return on capital employed (ROCE) before taxes, %, annualized

20.9

16.8

 

16.9

Equity to assets ratio, %

     

43.4

47.0

 

47.7

Net gearing, %

     

28.7

13.7

 

11.7

Personnel at end of period

     

14,676

12,708

15

13,150

Combination of Metso Minerals and Outotec – Flow Control to become an independent company

On July 4, Metso announced a combination agreement between Metso Minerals business and the Outotec Group. Flow Control will become an independent listed company to be renamed Neles. The transaction is expected to be completed in the second quarter of 2020.

Market outlook

  • Market activity in both segments, Minerals and Flow Control, is expected to remain at the current high level in both the equipment and services business.


Metso’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.

President and CEO Pekka Vauramo:

We continued to perform well and made good progress during the second quarter. Activity in our end markets remained healthy and is shown in the good order intake for both Minerals and Flow Control. The pipeline for mining equipment orders continues to be good even though there were no large bookings during the quarter due to timing. Sales grew at a healthy double-digit rate in both segments. In addition to volume growth, we continue to show higher operational leverage with improving profitability in both segments. This proves that the internal work done across the businesses is generating the targeted results.

During the quarter we closed a mining services-related acquisition in Chile and signed an agreement to buy an aggregates equipment business in Canada. The acquired service business expands our services offering in the important mining markets in Chile and neighboring countries. It also strengthens our services capabilities to help customers to improve their productivity and performance. The McCloskey acquisition in Canada, which we expect to close in the fourth quarter, will expand our offering of mobile crushing and screening equipment and enable us to better meet the demands of a diverse customer base in the aggregates industry. Both acquisitions are logical steps in our profitable growth strategy.

In addition, on July 4, we announced an agreement to combine Metso Minerals with Outotec and to create an independent valve company, Neles. We are excited about the unique opportunities that this transaction will create. The Metso Outotec combination will enable us to drive sustainable growth together with our complementary offering of high-quality technology, in equipment and services, and leverage our extensive global presence, strong services network and large installed base. On the other hand, Neles will be able to capitalize on both organic and inorganic growth opportunities, thanks to its strong product portfolio and service offering as well as best-in-class profitability.