Interim Report Q1/2023

Figures in brackets refer to the corresponding period in 2022, unless otherwise stated.

First-quarter 2023 in brief

• Strong activity in the mining industry globally and the aggregates market in North America
• Orders received increased 8% and totaled EUR 1,533 million (EUR 1,424 million)
• Sales grew 22% to EUR 1,418 million (EUR 1,164 million)
• Adjusted EBITA increased 37% to EUR 215 million, or 15.2% of sales (EUR 157 million, or 13.5%)
• Operating profit increased to EUR 197 million, or 13.9% of sales (EUR 139 million, or 12.0%)
• Cash flow from operations was EUR 110 million (EUR 74 million)
• Strategic review of the Metals businesses was completed.

President and CEO Pekka Vauramo:

I am pleased to report that we have had a strong start to the year with our overall performance continuing to improve. The Group's total orders increased 8%, driven primarily by 29% order growth in the Minerals services business. This reflects strong market activity in our customer industries, particularly in the mining services and equipment. Demand was also strong in the North American aggregates market, while the demand in Europe was sequentially stable but lower year-on-year.

All segments contributed to the sales growth of 22%, and Planet Positive sales grew 45% year-on-year to EUR 1,367 million (EUR 943 million) on a rolling 12-month basis. In addition to the growth in sales and orders, our profitability strengthened significantly compared to the first quarter of 2022. Adjusted EBITA amounted to EUR 215 million, which is 37% higher than in the first quarter of 2022. The adjusted EBITA margin of 15.2% was at our targeted level for the first time and shows continuous improvement, driven by our successful measures in managing inflation and cost control. Both the Aggregates and Minerals segments reported record-high margins, while the profitability of the Metals segment continued at a good level. This improvement in performance is an indication that our business strategy is delivering results and that we are well positioned to achieve our financial goals.

In March, we concluded the strategic review of our Metals businesses and the fit of the businesses within Metso Outotec's portfolio. The conclusion of the review was that the Smelting business complements our sustainable copper and non-ferrous metals market offering and therefore will continue to be developed as part of Metso Outotec. However, we have initiated preparations to divest the Metals & Chemical Processing and Ferrous & Heat Transfer businesses to an owner or owners that can offer both focus and scale to the businesses, and hence capitalize on their full potential. 

During the quarter we signed a full and final settlement related to the ilmenite furnace project in Saudi Arabia dating back to 2012. We are satisfied with having reached an agreement that mitigates the risks related to this project. The earlier booked provision is expected to be sufficient to cover the remaining work that we will carry out at the site.

Our success in the first quarter has given us a solid foundation to build on for the rest of the year. I am confident that our performance will continue to be strong, allowing us to meet the challenges and capitalize on the opportunities that lie ahead.

Market outlook

According to the company's 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, including the normal seasonality in the aggregates market.

In its previously published outlook Metso Outotec expected the overall market activity to remain at the current level in both the mining and aggregates markets.

Key figures

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 the same day at 12:30 p.m. EET.  

The audiocast can be followed at https://metso-outotec.videosync.fi/2023-q1

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://palvelu.flik.fi/teleconference/?id=10010589

Further information, please contact:  

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