Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Metso Capital markets day 2015: CFO Harri Nikunen

365 views

Published on

Metso Capital markets day 2015: CFO Harri Nikunen. For more information, please visit our website www.metso.com/cmd.

Published in: Investor Relations
  • Be the first to comment

  • Be the first to like this

Metso Capital markets day 2015: CFO Harri Nikunen

  1. 1. © Metso© Metso Capital Markets Day 2015 Strong financial position to act Harri Nikunen CFO, EVP
  2. 2. © Metso© Metso Capital Markets Day 2015 • Solid cash generation supported by: • Steady EBITDAs due to high services share • Low capital expenditure needs in near term • Strong net working capital management • Healthy maturity structure of gross debt • Funding readily available from multiple sources • Investment-grade rating from S&P (BBB; stable outlook) Funds available for growth and shareholder remuneration Strong balance sheet and solid funding position 2 Financial update by Harri Nikunen
  3. 3. © Metso© Metso Capital Markets Day 2015 0% 20% 40% 60% 80% 100% 120% 140% 0 10 20 30 40 50 60 70 80 90 100 A2009 A2010 A2011 A2012 A2013 A2014 Q2 A2015 Gross capex Capex acquisitions Gross capex / depreciation and amortization -% EUR Million Assets in good shape – limited capex requirements Capex in 2015 appr. 40-50 million 3 Financial update by Harri Nikunen
  4. 4. © Metso© Metso Capital Markets Day 2015 We are generating a healthy cash flow EUR million Q1-Q2/15 Q1-Q2/14 EBITDA 447 215 Adjustments (255) 19 Change in net working capital 52 (14) Financial items and taxes, paid (69) (110) NET CASH FROM OPERATIONS (CFFO) 175 110 Capex on fixed assets (23) (25) Acquisitions and divestments 242 (14) NET CASH FROM INVESTING ACTIVITIES (CFFI) 219 (39) CFFO + CFFI 394 71 4 Financial update by Harri Nikunen
  5. 5. © Metso© Metso Capital Markets Day 2015 Growth and resilience supported by the balance sheet and high EBITDA business model EUR million June 30, 2015 June 30, 2014 Dec 31, 2014 Return on equity (ROE), % * 32.5 16.4 15.7 Return on capital employed (ROCE) before taxes, %* 26.2/17.1** 16.6 16.4 Gearing at the end of the period, % 16.6 53.4 45.6 Cash conversion, % 186 100 108 Debt to capital, % 36.4 45.6 41.2 Net debt / EBITDA * 0.5 2.8 1.3 Interest cover (EBITDA) * 22.8 5.8 6.2 Tähän joku pyöristettyreunainen kuva *Annualized * *Excluding initial gain on PAS 5 Financial update by Harri Nikunen
  6. 6. © Metso© Metso Capital Markets Day 2015 Strong liquidity position 6 Financial update by Harri Nikunen 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 08/13 11/13 02/14 05/14 08/14 11/14 02/15 05/15 Committed undrawn facilities Cash assets Financial investments EUR million
  7. 7. © Metso© Metso Capital Markets Day 2015 Maturity profile: no short-term refinancing needs 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 01/2014 9/2014 06/2015 03/2016 12/2016 09/2017 06/2018 03/2019 12/2019 09/2020 YTD Monthly Maturities monthly > June 2015 Euro Bond 2019 Euro Bond 2014 Private Placements Other long-term Debt Short-term Debt Undrawn Committed Facilities 7 Financial update by Harri Nikunen Syndicated Term Loan EUR million
  8. 8. © Metso© Metso Capital Markets Day 2015 • EUR 1.5 billion EMTN program - EUR 400 million 2.75% bond due in 2019 - EUR 170 million private placements due in 2018 – 2022 • Syndicated long-term loan: EUR 215 million • Committed EUR 500 million 5-year syndicated revolving credit facility available until 2020 with an extension option for one year - currently undrawn • EUR 500 million domestic CP program • Uncommitted lines of credit • Stable credit outlook and rating maintained: - Standard & Poor’s: BBB Funding is well in place Corporate level funding facilities 8 Financial update by Harri Nikunen
  9. 9. © Metso© Metso Capital Markets Day 2015 Successful implementation of capital efficiency culture • Capital efficiency program was started in Q1/2014 with the following targets: • Strengthen the balance sheet management culture • Support strategic ROCE target (increase turns to >2) • Support the move to asset-light operating model in cyclical businesses • Program moved to the execution phase in late Q3/2014 and has yielded visible results: • Significant capital release from net working capital and fixed assets. However reaching turnover target of 2 requires further improvement and also top-line growth • Process and operational improvements supporting also the EBITA improvement • Capital efficiency is embedded in: • Management and reporting systems • Management agendas at all levels • Incentive systems at all levels 9 Financial update by Harri Nikunen
  10. 10. © Metso© Metso Capital Markets Day 2015 Implementation of capital efficiency culture 2014 – 2015 (examples) 10  Culture  Visibility through communication Capital efficiency reporting and reviews at business reviews at all levels  Capital efficiency included extensively in incentive programs  Clarified responsibility for the different capital employed items  Capital efficiency as an integrated part of Metso’s training programs  New improved processes / roles / guidelines / inventory  New global inventory planned role (PRIME)  PRIME tool and process  Sales & operations planning  Sales office inventory review process  Factory acceptance testing process review  Finished goods inventory review  Global excess inventory activation  New improved processes / roles / guidelines / Accounts receivable  AR accountability defined  Country AR coordinator role defined and nominations done  Payment term guidelines defined and implemented  Credit management guidelines defined and implemented  Global collection process defined and implemented  Global dispute management process defined and the implementation is ongoing  New SAP functionalities taken into use Financial update by Harri Nikunen
  11. 11. © Metso© Metso Capital Markets Day 2015 EUR million 2013 2014 Q2/2015 Change % Inventories 910 797 756 -16.9% Project net -225 -116 -147 -35.0% Trade receivables 642 577 555 -13.5% Trade payables -342 -309 -304 -11.2% OPERATIONAL NWC 984 950 861 -12.5% Non-operational NWC -350 -285 -244 -30.2% NET WORKING CAPITAL 634 665 617 -2.8% Total NWC -% of rolling 12 months net sales 17.2% 18.8% 19.0% Operational NWC -% of rolling 12 months net sales 27.6% 28.2% 26.5% Intangible assets 569 559 557 -2.1% Tangible assets 400 375 358 -10.4% Financial assets 224 187 190 -15.2% FIXED AND FINANCIAL ASSETS 1,193 1,121 1,105 -7.4% CASH & OTHER 465 277 281 -39.5% TOTAL CAPITAL EMPLOYED 2,292 2,063 2,003 -12.6% Capital employed turnover 1.61 1.71 1.62 Net sales 3,561 3,365 3,210 -10.0% Visible results in capital efficiency Excluding PAS 11 Financial update by Harri Nikunen
  12. 12. © Metso© Metso Capital Markets Day 2015 Key cost actions in 2013 - 2016 • Cost cutting and structural action to support strategic targets 2013 • Streamlining after demerger • Adaptation to lower mining capital demand 2014 • Radical restructuring to increase flexibility and lower break-even point in mining capital • Cost action also in Services and Flow Control to maintain competitiveness 2015 • Finalize mining capital structure and continue to streamline the overall cost structure to support the target setting 2016 12 Financial update by Harri Nikunen
  13. 13. © Metso© Metso Capital Markets Day 2015 TarkistettavaHarrilta Key cost actions in 2013 - 2016 Headcount reduced by ~2,100 persons since the end of 2013. Further reductions expected both 2015 and 2016. Significant number of large locations closed and non-core low margin businesses sold; further action expected in 2016. The number of legal entities will be reduced by 40% by 1Q 2016 (100->60). Support function headcount reduced by >20%. The structural action will continue in 2016. Purchasing savings around EUR 30 million a year and the hunt for low material and component costs will continue All discretionary spending under very close control GP 2013 29.0% GP 2014 28.6% GP 2015 30.7% 13 Financial update by Harri Nikunen
  14. 14. © Metso© Metso Capital Markets Day 2015 Headcount (Dec 31, 2013) Note: Over the months we have approx. 180-200 trainees and seasonal workers. Headcount reduced by more than 2,000* Headcount (Dec 31, 2012) 14,947 14,774 Reduction in developed markets -1,733 Increase in emerging markets -250 Headcount (Dec 31, 2014) 14,072 Headcount (Aug 31, 2015) 12,864 -173 -702 -1,208 Reduction of 2,083 persons corresponds with an annual personnel cost reduction of EUR 130 – 140 million (gross). *Excluding PAS14 Financial update by Harri Nikunen
  15. 15. © Metso© Metso Capital Markets Day 2015 Strong financial position to act 15 • Financial capacity for strategy implementation • Strong balance sheet • Adequate funding available • No major refinancing needs • High focus on cost and capital efficiency management actions to support cash flows and EBITDA’s • Major ongoing cost action in all business areas and in all support functions • Capital management culture successfully launched and key capital employed items under rigorous management Financial update by Harri Nikunen
  16. 16. © Metso© Metso Capital Markets Day 2015

×