Metso Corporation - Half Year financial report

Metso's Half-Year Report for January-June 2024

Metso Corporation's stock exchange release on July 24, 2024, at 09:00 a.m. EEST

Figures in brackets refer to the corresponding period in 2023, unless otherwise
stated.

Second quarter 2024 in brief

  · Customer activity remained at the previous quarter's level with continued
delayed decision-making
  · Orders received declined 14% to EUR 1,162 million (EUR 1,344 million),
equipment
-23% and services -6%
  · Sales declined 13% to EUR 1,214 million (EUR 1,396 million), equipment -21%
and services -6%
  · Adjusted EBITA was EUR 205 million, or 16.9% of sales (EUR 238 million, or
17.1%)
  · Operating profit was EUR 195 million, or 16.1% of sales (EUR 222 million, or
15.9%)
  · Cash flow from operations improved to EUR 152 million (EUR 62 million)

January-June 2024 in brief

  · Orders received declined 11% to EUR 2,523 million (EUR 2,829 million)
  · Sales declined 11% to EUR 2,431 million (EUR 2,729 million)
  · Adjusted EBITA declined 10% to EUR 405 million, or 16.7% of sales (EUR 449
million, or 16.5%)
  · Operating profit declined to EUR 383 million, or 15.8% of sales (EUR 416
million, or 15.2%)
  · Earnings per share were EUR 0.30 (EUR 0.34) and for continuing operations
EUR 0.31 (EUR 0.34)
  · Cash flow from operations improved to EUR 309 million (EUR 173 million)

President and CEO Pekka Vauramo:

We maintained robust profitability during the second quarter, thanks to our
focused actions. However, market dynamics evolved as anticipated: customer
decision-making remained slow in Minerals, and Aggregates faced challenges in
the North American mobile equipment market. Consequently, our total order intake
declined by 14% year-on-year, primarily due to a decrease in equipment orders.
Although the services businesses remained more stable, the aforementioned issues
led to a slight decline in services orders, which were further affected by
exchange rates.

Our income statement for the quarter closely resembles that of the first
quarter. Lower equipment backlogs and the timing of deliveries led to reduced
sales compared to the same period last year, but the Group's sales were
sequentially at the same level. Thanks to a healthy gross margin, supported by
ongoing cost management and a higher proportion of services in the sales mix, we
achieved an adjusted EBITA margin of 16.9% for the quarter. This confirms that
we are making progress in fortifying our financial performance against
cyclicality. Another positive development was in the cash flow from operations,
which improved to EUR 152 million.

The Aggregates segment sales declined 14% compared to the previous year,
primarily due to reduced orders in the preceding quarters. Despite this decrease
in volume, the segment achieved a solid adjusted EBITA margin of 16.6%,
underscoring the effectiveness of efforts made to enhance business resilience.
In May, we launched the Lokotrack EC range, bringing a new diesel-electric power
line to the aggregates market. Designed with modularity in mind, these units can
adapt to customers' future requirements and run on interruptible renewable
energy. Furthermore, the process functions in these mobile units operate
entirely on electricity, significantly reducing the use of hydraulic oil in
crushing operations. Additionally, in June, we committed to investing EUR 150
million in a state-of-the-art aggregates technology center in Tampere, Finland.
The production of track-mounted Lokotrack crushing plants is scheduled to
commence at the new site in the third quarter of 2027, with plans to eventually
relocate all our existing Tampere operations to this modern facility.

Minerals experienced a 13% decline in sales, primarily due to reduced equipment
backlog and delivery timing. However, the segment demonstrated increased
resilience, reporting an adjusted EBITA margin of 17.3%. This positive
performance can be attributed to the favorable impact of effective cost
management and sales mix on the gross margin. Notably, during the quarter, we
received a substantial order from India for recycling electronic waste. Our e
-scrap solutions offer compelling opportunities for customers by enabling the
recovery of valuable metals from waste.

We anticipate that customer decision-making in Minerals will gain momentum
during the second half of the year, driven by favorable copper prices.
Additionally, Minerals services are poised for sustained demand, thanks to
robust mine production volumes. However, in Aggregates, activity is expected to
continue at a lower level year-on-year. This can be attributed to the surplus of
distributor inventories in the North American mobile equipment market.

Internally, we have successfully maintained strong profitability, and our focus
remains on cost control and cash flow, while delivering value-added products and
services to our customers.

Market outlook

Metso expects that the market activity in both Minerals and Aggregates will
remain at the current level.

In its previously published outlook, Metso expected that the market activity in
both Minerals and Aggregates will remain at the current level.

According to the company's disclosure policy, Metso's market outlook describes
the expected sequential development of market activity, adjusting for
seasonality, during the following six-month period using three categories:
improve, remain at the current level, or decline.

Key figures

EUR million             Q2/202  Q2/202  Change  Q1-Q2/2  Q1-Q2/2  Change    2023
                             4       3       %      024      023       %
Orders received          1,162   1,344     -14    2,523    2,829     -11   5,252
Orders received by         701     742      -6    1,516    1,597      -5   2,955
services business
% of orders received        60      55       -       60       56       -      56
Order backlog                                     3,091    3,311      -7   2,951
Sales                    1,214   1,396     -13    2,431    2,729     -11   5,390
Sales by services          690     734      -6    1,417    1,423       0   2,891
business
% of sales                  57      53       -       58       52       -      54
Adjusted EBITA             205     238     -14      405      449     -10     887
% of sales                16.9    17.1       -     16.7     16.5       -    16.5
Operating profit           195     222     -12      383      416      -8     805
% of sales                16.1    15.9       -     15.8     15.2       -    14.9
Earnings per share,       0.16    0.18     -11     0.31     0.34      -9    0.65
continuing operations,
EUR
Cash flow from             152      62     143      309      173      79     550
operations
Gearing, %                40.6    35.5       -     40.6     35.5       -    33.8
Personnel at end of                              17,105   16,836       2  17,134
period

Audiocast and conference call details

An audiocast and a conference call for analysts and investors will be arranged
today at 1:00 p.m. EEST.

The audiocast can be followedat
the company's website (https://www.metso.com/corporate/investors/financials/inter
im-review/). A recording and a transcript will be available at the same webpage
after the event has finished.
The teleconference can be accessed by registering on the link below.

https://palvelu.flik.fi/teleconference/?id=50048707 (https://eur01.safelinks.prot
ection.outlook.com/?url=https%3A%2F%2Fpalvelu.flik.fi%2Fteleconference%2F%3Fid%3D
50048707&data=05%7C02%7Celena.ranta%40metso.com%7C4b059fd242a442ab9f4a08dc7649151
5%7C5c5456f4c40240c5a73de78777e7bf9e%7C0%7C0%7C638515303486817054%7CUnknown%7CTWF
pbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7
C%7C%7C&sdata=VcC8ObdECzwGzePDA9z9DZE5Wy7qEJaoGjQgB6ro9sA%3D&reserved=0)

The complete Half-Year Report for January-June 2024 is available as an
attachment to this release.
Further information, please contact:
Juha Rouhiainen, Vice President, Investor Relations, Metso Corporation,
tel. +358 20 484 3253,
email: juha.rouhiainen(a)metso.com (juha.rouhiainen@metso.com)

Distribution:

Nasdaq Helsinki Ltd

Main media

www.metso.com

Metso is a frontrunner in sustainable technologies, end-to-end solutions and
services for the aggregates, minerals processing and metals refining industries
globally. We improve our customers' energy and water efficiency, increase their
productivity, and reduce environmental risks with our product and process
expertise. We are the partner for positive change.

Headquartered in Espoo, Finland, Metso employs over 17,000 people in close to 50
countries and sales for 2023 were about EUR 5.4 billion. The company is listed
on the Nasdaq Helsinki. metso.com, x.com/metsoofficial

Attachments:

Metso Half-Year Report H1 2024.pdf