Like the global and local health and government authorities, we focus on securing the health and safety of our employees, customers and partners by doing our best to control the virus from spreading. As the situation has developed, we have implemented additional health and safety measures to be able to continue our operations and support our customers around the world.
To support the decisions and guidance given to our businesses and market areas, we established a global COVID-19 task force team working under the supervision of the Metso Executive Team. The task force team, together with our market areas and businesses is actively working to maintain our local operations around the world to ensure maximum flexibility and continued customer service in different types of scenarios.
Should you have questions or concerns related to your orders or deliveries and the services and support we are offering in this rapidly changing situation, please reach out to your local Metso team.
“During these past couple of weeks and days, we have witnessed how the COVID-19 outbreak is rapidly impacting our operating environment. Our focus is on securing the health and safety of our employees, customers and partners. In this unprecedented situation, we are doing our best to support our customers through these exceptional times.”
Pekka Vauramo, President & CEO
Topical IR issues
The latest Stock exchange release relating to Covid-19 impact was issued on March 31, 2020:
Since our last IR update on March 19, the COVID-19 situation has escalated and is now expected to have an impact on Metso’s operations.
During this week so far, governments have imposed closures of operations in Peru, India and South Africa, and all of these will affect Metso’s businesses. Restrictions of workforce mobility are also expanding, having impact on Metso and its customers.
Under these circumstances, we continue to focus on leveraging our global operations in order to provide flexibility and, together with our customers, to ensure continuation of their business. Simultaneously, we continue to prepare actions to adapt to short-term challenges in various locations and focus on cost control and cash flow.
This situation is developing fast and we will provide updates when new material information becomes available.
Annual General Meeting 2020
Like we announced on Tuesday, March 17, 2020, we had to postpone our AGM, which was planned to convene on Friday, March 20. This was due to the measures imposed by the Finnish governments, including the prohibition of public gatherings of over 10 people. The Board of Directors will issue a notice to AGM as soon as we know a new date.
Due to the postponement, there will be no dividend payment on March 31, 2020, because the payment requires an approval from shareholders. The Board’s dividend proposal of EUR 1.47 per share is still valid and will be on the AGM agenda, along with other previously published proposals, when we are able to publish a new invitation to convene the meeting.
We have monitored the outbreak development closely since January 2020 and have worked in accordance with the guidance and regulations set by the WHO, local governments and public health authorities. Our first priority is to secure the health and safety of our employees. At the same time, we do our utmost to support our customers to continue their business.
Metso’s business has been running so far without major disruptions. Most of the Metso office employees are now working remotely. In our production facilities, operations continue mostly as usual, but with tightened health and safety measures. As of now, we have not experienced significant raw material or component shortages and our inventories help to buffer the impact. Sales in China were lower than expected in February but we have been catching up in March after restarting operations in the country. We have also seen our suppliers regaining operations and logistics functioning in China. Metso’s sales in China were 6% of total and supplies from China represented around 10% of total in 2019.
In other parts of the world, we are following closely the functioning of logistics, as well as how people are allowed to travel to customers’ mines and other production sites. We are preparing ourselves to adapt to short-term challenges across our global operations. Our global manufacturing and supplier network helps us mitigate local or regional disruptions.
We have implemented a strong cost control already earlier, due to the upcoming Metso Outotec and Neles transaction and our liquidity position is solid. We continue to monitor our cash flow forecast closely.
We continue to monitor the development of the market activity and demand closely. The market outlook statement published in early February is still valid and we will update it if needed.
Metso Outotec and Neles transaction
We are proceeding with the Metso Outotec and future Neles preparations as planned. The closing is currently expected to take place on June 30, 2020, as earlier disclosed. Internal readiness for closing is good and the process with competition authorities continues in line with expectations.
Below you will find answers to the most common questions. This section is updated regularly as the situation develops.
How does the COVID-19 pandemic impact Metso’s ability to serve its customers?
- Our focus is on securing the health and safety of our employees, customers and partners. In this very difficult situation, we are doing our best to support our customers.
- As a global player, we have a good position with a healthy business, strong customer relations, good liquidity, committed people and global footprint, which we can leverage to mitigate the impacts.
- We have a comprehensive distribution center network for standardized parts, and we are able to produce customized parts flexibly.
- Since the COVID-19 situation is changing on a day-to-day basis and it is varying country by country, we recommend our customers to consider predictive actions relating to critical goods, like spare or wear parts or potential future service needs.
- We have several long-term service contracts with our customers and we do our best to fulfill our service commitments. The increasing travel restrictions can however impact our service ability.
Will the quotation you have given me earlier be honored as the outbreak spreads?
- Metso is taking actions to minimize the risk of delayed deliveries to our customers in this exceptional situation. We will proactively communicate with our customers should there be changes in their orders.
Do you estimate abrupt changes or major impact on your supply chain capabilities and service level?
- The situation is changing very rapidly. Our advantage is our supply chain with several operative units globally. We are carefully monitoring our supplier network and logistics to maintain the operational and customer service capacity.
- We are also closely monitoring the actions taken and restrictions implemented by the authorities. These have a significant impact on international and domestic logistics.
What is your strategy or mitigation plan to maintain customer service?
- We actively manage our global network to identify possible country-specific issues and strive to mitigate them to the extent we can.
- We are actively monitoring the situation within Metso and with our supplier network to react to changes in our operative countries.
- We will proactively communicate with our customers should there be changes in their orders.