Investor presentation

October 2017

© Metso2

Forward looking statements

It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for customer industry profitability and investment willingness, expectations for company growth, development and profitability and the realization of synergy benefits and cost savings, and statements preceded by ”expects”, ”estimates”, ”forecasts” or similar expressions, are forward looking statements. These statements are based on current decisions and plans and currently known factors. They involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected by the company.

Such factors include, but are not limited to:

1) general economic conditions, including fluctuations in exchange rates and interest levels which influence the operating environment and profitability of customers and thereby the orders received by the company and their margins

2) the competitive situation, especially significant technological solutions developed by competitors

3) the company’s own operating conditions, such as the success of production, product development and project management and their continuous development and improvement

4) the success of pending and future acquisitions and restructuring.

© Metso

Metso as an investment

3

© Metso© Metso

Committed to create more shareholder value

4

Extensive services offering• Large installed base • Close to customers• Excellent supply chain and logistics network

Strong balance sheet and financial position• Steady cash generation• Investment-grade rating• Low gearing (currently 3.7 %)

Stable dividend • Average payout ratio above 70%

Strong market positions in core businesses• Market leader in mining and aggregates• Strong niche positions in Flow Control• Low investment needs

Strong global presence• Operational in over 50 countries • Over 80 service centers serving customers globally

TSR 48%

Total shareholder return 2011 - 2016Investor proposition

Dec 31, 2011 Dec 31, 2016

Demerger

Dividends

Market Cap

Market Cap

4.2 billion

4.1 billion

1.1 billion

1 billion

6.2 billion

© Metso5 *Q2/2016 – Q1/2017

Sales*: EUR 2,586 million

Orders received*:EUR 2,724 million

Our structure is streamlined and markets versatile

Flow Control______________

25% of sales Adjusted EBITA 15.1%

Pumps 4% Capital 25%

Minerals______________

75% of sales Adjusted EBITA 9.7%

Services 50%Valves 21%

Adjusted EBITAEUR 274 million or 10.6% of sales

Control valves and pumps, intelligent positioners and services to multiple industries such as oil & gas and pulp

& paper.

Full-scope minerals processing technology and services. Crushing and screening solutions with strong service capabilities.

Other MiningOil & gas including petrochemical and

chemicalAggregates

24% of sales of which 45% services

47% of salesof which 75% services

Pulp & paper

24% of salesof which 50% services

© Metso© Metso

Systems

Solid strategy and ambitious financial targets

Products

Services

Minerals

A leading flow control provider with offerings for oil & gas, mining

and process industries

The leading technology and

services provider for end-to-end

minerals processing

Flow Control

6

Financial targets Q3/2017

Sales growth exceeding market growth On par with the market

Adjusted EBITA >15% 11.3% ( for running business excl. EUR 33.3m charges)

Return on capital employed (ROCE), before taxes >30% 9.8%

© Metso

35%

65%

Equipment 35%

Services 65%

10%

37%

25%

5%

8%

Mining Equipment 10% Mining Services 37%Aggregates 25% Oil & Gas 5%Chemical 8% Recycling 4%Pulp and paper 4% Pumps 4%Other process industries 3%

High services proportion, good geographical split

Sales* by industry

7

Sales* type

*Q2/2016 – Q1/2017

Sales* by region

• Leading technology and services provider for end-to-end minerals processing

• Leading flow control provider for oil & gas, mining and process industries

11,000 committed employees worldwide

22%

20%

23%

25%

9%

North America 22%South America 20%Europe 23%Asia-Pacific 25%Africa and Middle East 9%

© Metso© Metso

Stable dividend and capital allocation that supports growth

8

Organic growth based on the existing strategy

Mergers & acquisitions to support strategy implementation

Return excess cashto shareholders

1.00 1.05 1.05 1.05

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2013 2014 2015 ** 2016 *

EUR

EPS (Earnings per share) DPS (Dividend per share)

We will maintain a capital structure and liquidity position that secure:• Ability to execute our dividend policy (>50% of EPS)• Investment-grade credit rating

© Metso© Metso

Sustainability targets and achievements

“Our services- and product-focused business model with project and systems capabilities supports our target for higher profitability and lower volatility. We work closely with our customers to solve their challenges, and we bring sustainable solutions to help them improve their performance. Our capability to provide our customers with leading technologies is the bedrock for sustainable growth. Finding ways to address sustainability challenges gives rise to new business opportunities and as we aim to help in solving global social and environmental challenges we will create value and well-being for all stakeholders.”

Sustainability for investors

© Metso© Metso

Current financials

10

© Metso Q3/2017 Interim Financial Review11

Q3/2017 in brief

Healthy market activity and strong order growth

Sales increased, profitability was unsatisfactory

Extraordinary EUR 33.3 million charges related to mining projects in the backlog

New operating model to support profitable growth strategy was announced

© Metso

0

2

4

6

8

10

12

14

16

18

0

100

200

300

400

500

600

700

800

900

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17

Orders received, EUR million Sales, EUR million Adjusted EBITA %

Group quarterly financials

12 Figures in brackets refer to corresponding period of 2016Q3/2017 Interim Financial Review

Orders increased 30% to EUR 817 million

Sales grew 5% to EUR 673 million

Adjusted EBITA was EUR 43.0 million or 6.4%, including EUR 33.3 million charges

Adjusted EBITA of the running business was EUR 76.3 million or 11.3%

Earnings per share were EUR 0.13 (EUR 0.24)

Free cash flow totaled EUR 58 million (EUR 106 million)

Orders, sales and profitability

© Metso

0

2

4

6

8

10

12

14

0

100

200

300

400

500

600

700

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17

Orders received, EUR million Sales, EUR million Adjusted EBITA %

Minerals quarterly financials

13 Q3/2017 Interim Financial Review

Orders increased 31%- Strong mining equipment with one large order - Double-digit growth also in aggregates equipment - Services up 15%- Book-to-bill was 1.25

Sales grew 9%- Equipment up 11%- Services up 7%

Adjusted EBITA margin 4.1% - Including EUR 33.3 million charges related to mining

projects in the backlog

Adjusted EBITA margin for running business 10.5% - Unfavorable mix and margin pressure in wear parts

Orders, sales and profitability

© Metso

Flow Control quarterly financials

14 Q3/2017 Interim Financial Review

Orders increased 26%- Strong double-digit growth for valves and pumps- Services up 13%- Book-to-bill was 1.1

Sales declined 4%- Good day-to-day and services business- Lower valve project deliveries

Solid operational performance with adjusted EBITA margin of 16.3%

Orders, sales and profitability

0

4

8

12

16

20

0

40

80

120

160

200

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17

Orders received, EUR million Sales, EUR million Adjusted EBITA %

© Metso

Income statement

EUR million Q3/2017 Q3/2016 Change %Q1-Q3/2017

Q1-Q3/2016 Change %

Last 12 months

Orders received 817 628 30% 2,298 2,052 12% 2,971

Orders received, services business 486 422 15% 1,462 1,299 13% 1,903

Sales 673 638 5% 1,996 1,910 5% 2,672

Sales, services business 440 413 7% 1,308 1,261 4% 1,750

Adjusted EBITA 43.0 77.2 -44% 179.4 210.2 -15% 243.2

% of sales 6.4 12.1 9.0 11.0 9.1

Operating profit 39.4 62.9 -37% 158.6 182.6 -13% 203.1

% of sales 5.9 9.9 7.9 9.6 7.6

Profit for the period 19 36 -47% 90 105 -14% 114

Earnings per share, EUR 0.13 0.24 -46% 0.60 0.70 -14% 0.77

Return on capital employed before taxes, %, annualized 9.8 11.2 10.6

15 Q3/2017 Interim Financial Review

© Metso

Balance sheet

EUR millionSept 30,

2017 % of totalSept 30,

2016% of total

Dec 31, 2016 % of total

Intangible assets 520 16.2% 537 17.2% 538 16.6%

Tangible assets 285 8.9% 310 9.9% 315 9.7%

Financial and other assets 141 4.4% 156 5.0% 157 4.9%

Inventories 736 22.9% 709 22.7% 709 21.9%

Receivables 599 18.7% 607 19.4% 605 18.7%

Current financial assets 276 8.6% 186 6.0% 214 6.6%

Cash and cash equivalents 643 20.0% 620 19.8% 698 21.6%

TOTAL ASSETS 3,200 3,125 3,236

Total equity 1,341 42.4% 1,394 44.6% 1,439 44.5%

Interest-bearing liabilities 853 26.6% 803 25.7% 794 24.5%

Non-interest-bearing liabilities 1,006 31.4% 928 29.7% 1,003 31.0%

TOTAL EQUITY AND LIABILITIES 3,200 3,125 3,236

16 Q3/2017 Interim Financial Review

© Metso

Cash flow

17 Q3/2017 Interim Financial Review

EUR million Q3/2017 Q3/2016Q1-Q3/2017

Q1-Q3/2016

Last 12 months

Profit 20 36 90 105 115

Adjustments 40 34 129 123 177

Change in net working capital 19 33 -37 37 18

Financial items, paid -1 -2 -14 -14 -25

Taxes paid -12 -10 -49 -13 -57

Net cash provided by operating activities 66 91 120 238 228

Capital expenditure on fixed assets -11 -6 -26 -21 -36

Other -2 2 -2 2 -4

Net cash from investments -12 16 -25 3 -38

Free cash flow 58 106 101 242 198

© Metso

Financial position

18 Q3/2017 Interim Financial Review

Sept 30, 2017 Dec 31, 2016

Return on equity (ROE), annualized, % 8.6 9.0

Gearing at the end of the period, % 3.8 -1.8

Cash conversion, % 112 261

Equity-to-assets ratio at the end of the period, % 45.3 48.0

Debt to capital, % 38.9 35.6

Net debt / EBITDA 0.2 -0.1

Interest cover (EBITDA) 7.5 7.4

Cash assets 643 698

© Metso Q3/2017 Interim Financial Review19

Market outlook

Remain stable for Minerals equipment and services

Remain stable for Flow Control equipment and services

© Metso

Our businesses

20

© Metso

35%

50%

15%

Mining 35%

Aggregates 50%

Recycling 15%

Sales* by segment

Sales by offering

21

84%

16%

74%

26%

MCA Equipment 84%

MCA Systems 16%

MNG Equipment 74%

MNG Systems 26%

17%

10%

4%4%

50%

15%

Copper 17%Others 10%Iron ore 4%Gold 4%Aggregates 50%Recycling 15%

Sales* by commodity

*Q2/2016 – Q1/2017

Sales* by offering

86%

14%

Standard sales 86%

Systems sales 14%

23%

51%

26%

Standard sales 23%Complex sales 51%Systems sales 26%

Mining Aggregates

Sales* by region

31%

26%16%

15%

12%

Europe 31%Asia-Pacific 26%North America 16%South America 15%Africa and Middle East 12%

Sales*: EUR 730 million

Personnel: ~2,600

Orders received*:EUR 854 million

Minerals Capital serves mining, aggregates and recycling customers globally

© Metso

We are the leader in comminution

Exploration Development Extraction Materials handling Comminution Separation RefiningExploration for mineral resources• Remote sensing• Geophysical

/geochemical tests• SamplesFeasibility studies

Drilling and modeling of the ore bodySelection of appropriate mining techniqueCapital investment in mine infrastructure

Mining of the ore bodyRock breakingSurface miningUnderground mining

Mined minerals transported to processing siteUse of loaders, trucks, trains, at the face mining systems and conveyors

Materials are crushed and ground to achieve finer particles Particles sized for optimum recovery of minerals specie

Flotation, leaching, sedimentation, and filtration are used to increase mineral content to an economic level

Refining to increase mineral concentration e.g. through pyro-metallurgy and electro-winning

One SteelSigdo-Coppers

SandvikEpiroc (Atlas Copco)Boart Longyear

FurukawaKomatsuJoy GlobalCaterpillar

Weir

FLSmidthMetso

OutotecCitic Heavy Industries Citic Heavy IndustriesTerex

Market value > EUR 14 billion

22

© Metso

77%

23%

Mining 77%

Aggregates 23%

30%

23%19%

18%

10%

South America 30%Asia-Pacific 23%Europe 19%North America 18%Africa and Middle East 10%

16%

17%

18%23%

26%

Gold 16%Others 17%Iron ore 18%Aggregates 23%Copper 26%

Minerals Services’ playing field is broad and well-balanced

Sales* by segment

23

Sales* by commodity

*Q2/2016 – Q1/2017

Sales* by region

Sales*: EUR 1,262 million

Personnel: ~5,400

Orders received*:EUR 1,327 million

© Metso

• Mill linings and trommels• Grinding media• Crusher wear parts• Screening media• Wear lining• Conveyor wear parts • Slurry pump wear parts• Chamber optimization• Training

• Spare parts for crushers, screens, feeders, conveyors, grinding mills, pyro processing equipment, bulk handling equipment, slurry pumps, process equipment, VPA filter cloths

• Training

• Supervision, maintenance and repairs

• Diagnostic and planning• Shutdown services• Emergency services• Audit and inspection• Installation & Commissioning• Training

• Rebuilds• Refurbishments• Upgrades • Training

• Scheduled inspections • Shutdown and wear parts

optimization• Shutdown and process

optimization• Maintenance and process

optimization• Process and Control Optimization

Services

Economic performance as key buying factor 2

We have a full-scope services offering

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Maintenance deficit and restocking1

Process and mine-to-mill optimization3

Expert services to optimize performance of operationsProduction essentials to ensure availability and quality of operations

Wear parts~35% of sales

Spare parts~25% of sales

Field service and repairs~10% of sales

Refurbishments and upgrades ~15% of sales

Life cycle services and other ~15% of sales

© Metso

Overview: Minerals production volumes

Sources: Worldsteel , International Copper Study Group, World Gold Council

2,745 2,846 2,917 3,076 3,155 3,233 3,236

1,683 1,667 1,684 1,263 1,191 1,117 1,309

01,0002,0003,0004,0005,000

4.5%

2012

4 346

2015

4 544

2014

4 350

2013 2016

4 3394 602

2011

4 513

2011

4 428

Global Copper mine production (kt)

25

Short term developmentLong term development

15,903 16,036 16,056 16,687 18,185 18,431 19,132 20,216

05,000

10,00015,00020,00025,000

20102009 2011

5.7%

201520142012 20162013

Global Gold supply (t)

Mine productionRecycled gold

100

200

0

150

50

145

5.6%

Mar 2017

1,646

1,0001,2001,4001,6001,800

+4.2%

Jan 2017

Updated: May 22, 2017

773 801 850 811 764

363 343 353 250 283

0

500

1,000

1,500-8%

Q1/17

1 047

Q4/16

1 144

Q2/16

1 061

Q1/16

1 136

Q3/16

1 203

ChinaRest of world

*Global Crude steel production (Mt)

1 000

1 500

0

500

2 000

822

1 629

2012

817

1 615

823 799

2013

1 560

820847

2016

+1%

1 650

2011

6391 239

2010

836

1 538

662

2009

828795

702577

829

731

2015

808

2014

1 6701 433

© Metso

61%39%

Services Capital

Sales* industry

26

Valve product mix

*Q2/2016 – Q1/2017

Sales* by offering Sales* by region

Flow Control has a favorable business mix with a large service share

Sales*: EUR 642 million

Personnel: ~2,600

Orders received*:EUR 613 million

29%

22%18%

18%

13%

Oil & gas (mid and downstream) 29%

Petrochemical and chemical 22%

Pulp & paper 18%

33%

31%

15%

8%

7%6%

North America 33%Europe 31%Other Asia Pacific 15%Africa and Middle East 8%South America 7%

Capital valves

Aftermarket valves

Spare parts and maintenance

Valve controls

© Metso

We have a full control valve offering

Valve Actuator Automated On/Off valve Positioner Control valve

Segment Butterfly

+ = + =Ball

Actuator is the motor to operate the valve and is fairly simple standardized unit.

Automated On/Off valves consist of a valve and an actuator and some simple measurement.

Positionergives flow controlling signal to the actuator.

Control valve consists of a valve, an actuator and a positioner.

Valves are controlling and closing the liquid and gas flows in the pipes and can be fairly complex units depending on pressure, temperature and flow media.

27

© Metso

Global refinery capacity2

0

20

40

60

80

100

120

We have built a flow control platform with a strong position in a number of niches

28

Global base chemicals demand3

Global O&G CAPEX1 Global pulp and paper capacity4

1. Morgan Stanley, Rystad2. GlobalData3. IHS4. Pöyry5. Metso analysis

Global mining CAPEX5

0

100

200

300

400

500

600

Paper

Pulp

Million t/aUSD billion CDU bbd

0

200

400

600

800

1000

0

100

200

300

400

500

600

Mmt

0

50

100

150

200

250

USD billion

© Metso

New operating model and organization 2018

29

© Metso© Metso

Targeting profitable growth and enhanced accountability

Lean, agile and customer-focused

Our strategic fundamentals remain unchanged

New operating model

Q3/2017 Interim Financial Review30

© Metso© Metso

Seven dedicated business areas with clear accountabilities

President and CEONico Delvaux

Digital DevelopmentJani Puroranta

CFO’s OfficeEeva Sipilä

Human ResourcesMerja Kamppari

Strategy and Business DevelopmentOlli-Pekka Oksanen

Valves

John Quinlivan

Pumps

JohnQuinlivan

Mining Equipment

Victor Tapia

Minerals Consu-mables

Sami Takaluoma

MineralsServices

Mikko Keto

Aggregates Equipment

Markku Simula

Recycling

Uffe Hansen

Businesses are built around similar customer, competitive and business dynamics.

More focused and agile organizations

Current reporting segments, Minerals* and Flow Control**, remain unchanged

* Minerals segment consisting of Mining, Aggregates, Minerals Services, MInerals Consumables and Recycling

** Flow Control segment consisting of Valves and Pumps .Q3/2017 Interim Financial Review31

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