mining and construction - leading global full solution ...€¦ · throughout plant life cycle ......

Metso Capital Markets Day 2011 1

Mining and Construction- Leading global full

solution providerAndrew Benko, PresidentMining and Construction

Capital Markets DayNovember 22, 2011

London

© Metso Metso Capital Markets Day, November 22, 2011, London

Contents

• In brief• Our markets• Our strategic focus

2


In brief


70%

30%

Net sales in 1-9/2011EUR 1,902 million

Mining and Construction

• Long and deep exposure to the fast growing industry

• Strong position in the crushing and screening niche ofthe construction industry

• Extensive global footprint with local service support,and supply of equipment and systems

• Long history of building manufacturing capability andservice business in emerging markets

• Long and deep commitment to supporting ourinstalled equipment base in North America andEurope

MiningConstruction

Services as a %of net sales53%

Overview

Appr. 11,000employees

4



We concentrate on integratedsolutions which help our customersto fulfill their environmentalresponsibilities

5

Our solutions:• Engineering, process design,

optimization and automation• Optimized spare and wear parts

throughout plant life cycle• Services

The right equipment for the job:• Grinding mills, crushers, screens

and conveyors• Separation equipment• Slurry-handling equipment• Pyro processing solutions• Bulk materials handling equipment• Wear products and mill linings

Metso’s scope in miningWe support our customers all the way from mine to port

5


Some of our key customers and delivery types

Customer groups• Mines and mineral processing plants• Engineering houses• Energy and metal industryTypical deliveries• Complete grinding circuits with installation and

commissioning services. Leading provider ofsemiautogenous and autogenous grinding mills andvertimills

• Crushers as a system delivery (cone, jaw, primarycrushers)

• Pyro processing solutions such as rotary or grate kilnsand iron ore pelletizing plants

• Rotary railcar dumpers and overland conveying systems• Process optimization services• Complete service contracts over several years including

site staff and parts supply

Mining

Major references

6



High quality processes which help ourcustomers to fulfill their environmentalresponsibilities

7

Our solutions:• Plant engineering• Process optimization• Maintenance• Repairs and inspections• Customer training• ServicesThe right equipment:• Jaw, cone and impact crushers• Feeders, screens and scalpers• Conveyors• Mobile screens• Complete plants• Wear products and spare parts

Metso’s scope in constructionOur solutions cover the entire aggregates production process

7


Some of our key customers and delivery types

Customer groups• Quarries• Contract crushing operations

Typical deliveries• Mobile crushing and screening plants for a multi-stage

rock processing system• Complete quarry systems• Unit crushers, screens and conveyors• Performance-based services agreements including

process simulation and optimization services• Customer training packages• Preventive and predictive maintenance services

Customer groups

Major references

8



Our people and locations

Mining and Construction locationResearch and Technology CentersDistribution CentersMining and Construction manufacturing plants

South andCentralAmerica2,773(25%)

NorthAmerica1,642(15% )

Europe3,643(33%)

Asia-Pacific1,815(17%)

Africa andMiddle East1,089(10%)

BrazilPacific

Rim

Mexico

NorthAmerica

SouthAfrica

India

China

Australia

NorthernEurope

SouthernEurope

Russia& CIS

Turkey

Mining and Constructionservices HUB

9


Strong local presence in the emerging marketsExpand and strengthen our position

• Leader in high-end crushing market, success in grinding and bulk materialhandling

• Develop organization, supply chain and distribution, increase constructionmarket share

• Leader in crushing and screening and in iron ore beneficiation• Proven results of mid-market solutions, Metso Park• Strengthen services organization

• The leading Western equipment provider• Improve project capabilities, sales and services coverage

• Strong and stable position• Opportunities in new infrastructure projects

Brazil

Russia

India

China

10


Our markets


Strong position in the global markets

Mining• Market size

- Total global market: EUR 106 billion- Market for current offering: EUR 11 billion

• Market share 15%

• Market position- Grinding mills # 1- Mining crushers # 1

Construction• Market size

- Total global market: EUR 83 billion- Market for current offering: EUR 8

billion

• Market share 10%

• Market position- Crushing and screening # 1-2- A strong position in selected niches

12



Fundamentals for growth very favorable

Mining

• Overall market environment is verygood

• Good demand for equipment andproject businesses, pipeline of projects

• Services excellent

Construction

• Good demand in Asia-Pacific and Brazil

• Satisfactory demand in Europe andNorth-America

• Services demand satisfactory

• Emerging markets growth andurbanization will boost demand forminerals

• South America, Africa, Australia arekey mining markets, driven byinfrastructure building andconsumption growth in China andIndia

• Infrastructure maintenance indeveloped countries and continuedexpansion in emerging areas

Short-term Longer-term

13


Mining CAPEX continues to grow

5 12 15 9 15 18 22 22 22 22 23 23 237 1016 20 21

23 27 31 35 40 43 47 52 56

1523

2836

2834

3839 42 45 47 49

54 54

17

43

5652

21

5456

53 49 4650

5456 57

2003 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Exploration Repairs/Closures Clean-up Replacement Growth

Capital expenditure estimates forglobal mining (incl. exploration)USD Billions, real terms (2010)

5%p.a.

31%p.a.

High growth rate due tocrisis recovery (extremelylow Capex levels in 2009)

High growth rate due tocrisis recovery (extremelylow Capex levels in 2009)

Bottlenecks on equipment supplyside expected to constraingrowth in 2012-2013

Bottlenecks on equipment supplyside expected to constraingrowth in 2012-2013

14

Source: McKinsey & Company (Nov. 2011)



The construction equipment market is estimated togrow at 6% per annumConstruction equipment marketUSDbn, World — per segment

Construction equipment marketUSDbn, World — per region

11 17 2534

4511

1723

32

43

8

12

19

26

34

10

13

16

21

27

6

9

13

18

23

6

9

12

16

20

10

14

19

25

33

2000 2005 2010 2015 2020

21 26 27 32 4118

26 2735

44

19

33

65

95

128

4

6

7

9

13

2000 2005 2010 2015 2020

Cranes &draglines

Loaders

Off-highwayTrucks and tractors

Mixers, pavers andrelated equip

* Graders,rollers andrelated equip.

* Graders,rollers andrelated equip.

Parts andattachments

Excavators

Asia-Pacific

NorthAmerica

WesternEurope

Others5.6%

5.9%

6.5%

CAGR2010–2020

5.5%

5.8%

6.2%

6.3%

7.0%

6.5%

5.1%

4.4%

CAGR2010–2020

125

91

62

171

225

125

91

225

171

62

6%

7%

6%

7%

* Including crushers and screens* Including crushers and screens

15Source: Freedonia “World Construction Machinery” (Aug 2011)

Our strategic focus



Mining and Construction strategy themesExpand and strengthen current position

Mining marketboom• Resource expansion

and competencycenters in thegrowth markets

• Exploring acquisitionopportunities

• Continue to expandservices offering anddevelop globalservice hubs

Construction

• Expand andstrengthen ourcurrent position incrushing andscreening niche

• Explore possibilitiesto enter intocomplementaryproduct areas

Mining

• Focus on being a fullsolution provider

• Grow processtechnology capacity

• Recruit and retainpersonnel

• Win againstemerging marketcompetitors

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Our strategy is executed through must-wins

Sustainability is criticalWater and energy conservationEnergy and raw materials efficiency

Health, safety and environment continued focusMove towards a globally functional organization and global businesstools

Increase local presence in the BRICs by strengthening theorganization and supply capabilities

Recruit, retain and develop people to address business needs

Re-engineering processes to get fast growth with reliable deliveries

Best in class deliveriesServices

Growthcountries

Technology

People

Gro

up c

omm

on

Services offering – focus on growth through value proposition andengineered services solutionsProduct offering expansionGrow via exploitation of installed base

Operatingmodel

18



EBITA target of 10-15%

Full commitment to the new profitability targetNet sales and EBITA % before NRE, rolling 12 months

19

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

0

500

1,000

1,500

2,000

2,500

3,00012

/07

03/0

8

06/0

8

09/0

8

12/0

8

03/0

9

06/0

9

09/0

9

12/0

9

03/1

0

06/1

0

09/1

0

12/1

0

03/1

1

06/1

1

09/1

1

%EUR million

Services Capital equipment EBITA-% bef. NRE


Strong development of our order bookOrders received, rolling 12 months

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

12/0

7

03/0

8

06/0

8

09/0

8

12/0

8

03/0

9

06/0

9

09/0

9

12/0

9

03/1

0

06/1

0

09/1

0

12/1

0

03/1

1

06/1

1

09/1

1

EUR million

Services Capital equipment

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Conclusions

We are fully committed to deliverthe targeted performance by:

• capitalizing on the mining boomby leveraging our strong globalposition

• Continuing global/local servicesgrowth by ”owning” our newinstalled equipment servicebusiness and by exploiting ourexisting installed base

• Expanding our presence andoffering organically and viaacquisitions

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mining and construction - leading global full solution ...€¦ · throughout plant life cycle ......

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