Metso Outotec Corp

All right, good morning, good afternoon, everybody. This is Juha from Metzos IR, and I want to welcome you all to this conference call where we discuss our third quarter 2024 results, which were published earlier this morning. Results will be presented by our president and CEO, Pekka Vauramo, and CFO, Eva Sipilä. And at this time, we are also joined by our new president and CEO, Sami Takaluoma, who will take over on November 1st. And Sami will say a few words after the results presentation, and then we'll open the lines for the Q&A. Before we start, a reminder of the forward-looking statements we will be making. And with this, I'll hand over to Juho.

Please go ahead. Okay, thank you, Juho. And welcome to this call from my side. A few comments on the quarter first. Market activity very much in line with what we said one quarter ago. No change in that regard. Of course, we are headed in aggregates to low season, and the third quarter was already the low season, strong seasonality, where the first half of the year is always more active than the second half. And as we said also in the previous quarter, Results call that we have a few larger projects in minerals side, which we think will progress during the rest of the year. And we saw some of them moving ahead as we have announced some of the new projects. new orders during the quarter, and also after the closing of the quarter, we have announced some additional orders. Margin performance, that was probably the highlight of the quarter, was a very robust 16.9% adjusted EBITDA. That is exactly the same margin that we reported in the second quarter. quarter. And cash generation has been an issue for us for several quarters. We had a good cash generation, especially if we exclude the discontinued operations where we announced separately a sort of cost relating to waste to energy, termination of waste to energy business during the third quarter. But then if we look at the numbers, orders, we see 3% increase on order line in group level. Sales continue to decline, and that is because of the lower order intakes during the previous quarters, three quarters, four quarters. We've been on declining trend already before this. Adjusted EBITDA, 196. That's 8% down from the previous, and that's because of the volume difference. But good margin, as I already said, improvement on a year before. And operating profit, 178 million, also following mainly the volume and slight uptick because of the margins. out there, 15.3% operating profit and the earnings per share, 15 cents, and cash flow from the operations here. We need to remember that there is the termination of waste-to-energy business, which makes the cash flow from operations negative. We'll see later on what it would have been without it. In the aggregates, when we look at the segments, a slight decline still in the orders, 10 million. below previous year. This is a low season. We earlier said that we might be fairly close to the previous year level, and this is what this one shows. Equipment order slightly down, more so in services, 8% down in aggregates segment. Sales continue to decline more, and that's, again, because of the order bookings development during the previous quarters, and services share continued at 35%. Adjusted EBITDA from the aggregates 45 million and a year ago we had 8 million more. Margin still very resilient at 16.1 and we continue to manage our costs well and that's what is supporting our margins at this moment rather than the market. Then to the mineral side, orders up as you see there. We have also booked some orders after closing of the quarter, as I said already, which will be then reported in the fourth quarter numbers. But the equipment orders grew 13 percent, services remained flat. Sales continue to decline for the same reason as in the aggregates, order bookings during the previous quarters are not supporting higher level. Services down 4% equipment, 26%. We do have in all of these numbers about 3% or 4% negative currency impact, so that should be also noted. I'm quite sure Eva will talk about that one a bit later on. Services share 66% along the lines as in the previous quarter, but up from a year before. EBITDA 161 versus 174. Margin went up to 18.3. So we are on our journey towards the 20%. But on this sort of volume levels where we are, it is tough to reach out. But once the cycle turns, we are in well position to head towards that one. strong execution all together and yes we are managing our costs and of course the services high share supports the margin development and at this moment I'll hand it over to Eva

Thank you, Pekka, and good morning, good afternoon to all of you on my behalf as well. Continuing from what Pekka already said, I would comment a few additional lines from our group income statement. So indeed, the currency impact on the sales line had a 4% negative impact on the group level. Then the graph on the right deserves a comment as the result from discontinued operations materially differs from the earnings for continuing operations. And as Pekka already reminded you, in early September, we announced that we had completed the termination of the waste-to-energy business and settled the related legal processes concerning these historical projects. The related one-time expense of 250 million euros pulls down the result of the discontinued operations in the third quarter. That's where it is booked in and hence explains the negative reported earnings per share as well. On the tax row, effective tax rate for the quarter was 24%, and year-to-date we're at 25%, which is what we have guided on for the full year as well, so well in line. Regarding our balance sheet, so total assets at 7 billion euros are up a few hundred million euros from the end of June, but slightly below where we started the year from. Inventories are finally down a notch from the previous quarter. And net debt is up by 100 million euros to 1.16 billion due to the funding raised to pay out the one-off cash charge from the termination of the waste to energy business. Group cash flow for the quarter is also, as already said, impacted by the one-off cash outflow in discontinued operations. Hence, we've separated the two rows for the profit for the period, so continuing operations and discontinued separately to help you then do your own math on what's truly operational. And if we exclude the cash outflow of 275 million in discontinued operations, our net cash flow from operating activities would have been 256 million euro positive. Cash flow remains supported by the healthy profitability and the strong margin, as Pekka referred to. Also, the change in net working capital was finally positive for the quarter. Clearly, obviously, a very small number, but we do expect a clearly bigger positive impact from working capital in the fourth quarter. And moving to my final slide on our financial position, so liquid with funds consisting of cash and cash equivalents amounted to 467 million at the end of September. During the third quarter, we drew one 250 million euro loan that we used for the payment of the one-off item, while another new smaller 50 million loan was undrawn at the end of September. Both our equity to assets and debt to capital at the end of the quarter stood at around 38%. And with that, I would hand it back to you, Pekka.