Metso Outotec Corp

Good afternoon, good morning everyone. This is Juha from Metsos Investor Relations and I want to welcome you all to this conference call where we discuss our fourth quarter 25 and full year results which were published earlier this morning. Results will be presented by our president and CEO Sami Takalooma and CFO Pasi Kykling. And after the presentation, we'll have normally Q&A. And please note that we have reserved one hour for this call. And also a reminder of the forward-looking statements that will be used in this presentation. With these words, we are ready to start, and I'll hand over to Sami. Please go ahead.

Thank you, Juha, and good afternoon also. From my behalf, I'm happy to talk through the highlights of the last quarter of 2025. We saw the market activity to be very much in line with our expectations. That also resulted then for our orders to grow in a healthy way, including also then at the end of the year being able to finalize the two larger orders from the minerals capital side. Sales growth was good and that also drove then the increase in our adjusted EBITDA euros. And worthwhile mentioning here in this page definitely is the strong gas generation that the businesses did in the Q4. Looking from the figures point of view, orders received 1.5 billion for the quarter. growth by 2% compared to the comparison, and worthwhile also here mentioning that the currencies did have an impact, so organic growth higher. And sales was 1.4 billion, growth from the period 11%, and exactly same growth percent for our adjusted EBITDA euros. And from the relative EBITDA perspective, same delivery as year before, so 16.1. Earnings per share was 0.14 improvement from the year before. And then, as mentioned, the cash was strong compared to the comparison period. Looking at our segments, aggregates have been performing throughout the year and in the last quarter, strong orders and performance was recorded. Orders received growth was to 307 million from the 294. This is a double digit growth in the constant currencies. Growth was driven mainly by the European market, which has been showing the big up throughout the whole year already. Equipment orders growth was 7% and the aftermarket was 1%. Sales side also growth, so 330 million for the period. Year before it was 290. Equipment growth in the sales was significant, 23, and the aftermarket was reflecting the previous period, so that declined by three. Aftermarket share now from the sales perspective is 30% compared to the 35 a year before. And then the adjusted EBITDA for the aggregate segment, 53 million growth from the 46 year before, and the margin also improved from 16.0 to 16.2. Strong sales growth was supported both adjusted EBITDA and the profitability development. On the minerals side, orders 1.194 billion, growth from the year before and that's reflecting 5% growth in the constant currencies. Aftermarket orders grew by five and if taken the currency into account, that was a strong single digit growth in the aftermarket for the quarter. And as mentioned and as published, there was two major equipment orders, copper smelter and also then the gold processing plant. Sales for the period 1,113,000,000 million and that was also growth from the previous period. Aftermarket in this was flat and the equipment had a very good period finishing the projects and creating also from our perspective the capacity for the new orders and deliveries. Aftermarket share of the sales 57% for the period. Adjusted EBITDA euros 190 million growth from the 173 year before and margin point of view same 17.1 as year before. Adjusted EBITDA was driven by the higher sales and equipment heavy mix kept margin still flat for the comparison period year before. And looking then at the dividends part as the year is in that point. So the board proposes an increase in the dividend paid by METSO. Proposed dividend is now 69% of the EPS from the continuing operations calculation standard way as we have been doing that in the past year. So two payments, one in May and one in October. Total payout will be with this proposal 331 million euro. Then I let Pasi to walk through the numbers a little bit more in the detail.

Thank you Sami and good day everyone also on my behalf. Let's start with our profit and loss statement where the Q4 sales increased 11% to 1,443,000,000 and this was driven by successful progression of several mineral equipment projects as well as good equipment delivery in our aggregate segment during Q4. Equipment share was exceptionally high in the revenue mix and represented 49% of turnover, while aftermarket was 51%. On a full year basis, we increased the sales by 4% to 5,240,000,000. And then thereafter, market represented 54% and equipment 46% of sales. Adjusted EBITDA was up 22 million in the quarter to 232 million, and the margin was flat at 16.1%. On full year basis, our EBITDA margin was 15.8%. In Q4, the equipment business profitability was at good level, both in aggregates and minerals supported by high volumes, whereas aftermarket profitability was at normal level. In Q4, we also recorded 27 million of adjustment items and the makeup is basically three main components. First, we accounted provisions related to our minerals restructuring that was announced earlier in 2025. Then we incurred HEKPLUM divestment related losses during the quarter. And additionally, we had costs regarding one legacy project that we have still in our pipeline and which we are looking to complete during the year 2026. Additionally, in the discontinued operations where we presented our first business, we accounted the final losses from that divestiture. And it's worth noting that early 2026, both the Ferros divestment as well as the Hägglund divestment have been completed. Income tax rate for the year was 24%, quite normal for our profit mix. In Q4, the tax rate was low at 21% due to the country result mix that we had during this quarter. EPS from continued operations was 14 euro cents, which is one euro cent up from comparison period. Let's then look at our financial position and balance sheet where the overall position remains very healthy. Net debt end of the period was 1.1 billion and net debt to EBITDA KPI at 1.2 times well below our one and a half time target. And the evidence of the healthy situation is that Moody's in December changed our outlook from stable to positive while maintaining the BAA2 long-term credit rating that we have. Let me then close my part by brief look at our cash flow. And cash flow, like Sami already said, was certainly one of the highlights of our quarter. During Q4, we delivered strong cash flow from operations of 365 million. And this was supported by working capital release of 130 million during the quarter. Looking at the full year 2025, we delivered 974 million cash flow from operations. And if I think this from the free cash flow basis, deducting capex and acquisitions from the operating cash flow and comparing that to revenue, we delivered 13% free cash flow margin, which is something we are happy with. With that, I would like to hand over back to Sami to talk about our strategy execution and outlook.

Thank you, Pasi. From the strategy point of view, We Go Beyond strategy was launched in the Q4 and I'm happy to report that the execution has started well. one good indication is also that we measure our own employee satisfaction and one question there is about the strategy and we did see very high engagement level overall and also very high improvement in in the strategy question meaning that we have a full energized organization to deliver and certain things are already moving according to the strategy From the acquisition point of view, it happened after the Q4, but closing of MRA Automation, it's multi-skilled resources Australia company. This was a very good addition to the strategy. roadmap that we have built. Company is a leading provider of automation and software solution for the ports and terminals worldwide. And now proudly employees are and we are working for the synergies and growth through this acquisition. And then, as mentioned, divestment side, making the portfolio ready for the future. So we have completed the Ferros business divestment and also the loading and hauling business, meaning Hekblom. Investment side, one thing to report here is that we are building a new rubber products plant in China to be a relevant player for this very, very fastly growing business inside China. And then also good to report the new sustainability targets that we got in the very early days of the year approved by the SBTI. And they are good ambitious targets and the most ambitious ones in the industry. So we continue in that sense as well as promised in our strategy. Then looking at the market outlook, we are expecting that the market activity in both minerals and aggregates will remain at the current level for the next two quarters. Reminder that the tariff related turbulences could potentially affect the global economic growth and especially the certainty level of that one can have an impact on the market activity. And in our previously published outlook, the expectation was that it also remains the same level. So we are expecting to see similar kind of activity from the markets as we did see for the Q4.

Thank you, Sami. Thank you, Pasi, for the presentation. And operator, we can now open lines for questions and answers.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Chitri Dasinha from JP Morgan. Please go ahead.

Chitriti Sinha, your line is now unmuted. Please go ahead. The next question comes from Christian Hinderich from Goldman Sachs.

Please go ahead.

Good morning, everyone, and thanks for your time. I want to start with the minerals OE development. I appreciate the two big orders in the books for the quarter, which is nice to see. But if we strip those out, I get to 220 million of OE in terms of order intake. That's down 22% Q on Q and 30% year on year. And I've got to go back quite some quarters to get to that low level. I'm just curious what's behind that. Is there a specific commodity weakness? Is it a timing effect, as maybe you've alluded to on page seven of the release? It seems a little bit at odds with the strong commodity price unlocking permitting process and broader confidence in the turn you've had in recent months. I'll start there.

Thank you. Relevant question and there is no real link for the commodity prices as such throughout the 2025 when it comes to the minerals capital side so we have been receiving a good amount of small replacement orders and smaller projects as well. And this is no change in that. They do fluctuate based on the month and also the quarterly in question had the lower amount of these ones coming in. But there is no real change in the actual demand of that and looking at the pipeline and also looking at the start of the year. They are having the normal volume, but there were less of these in the Q4, as you also pointed out.

And Christian, just complementing when we look more in detail where the delta comes from, it comes from the sort of medium size orders in our order intake, the sort of a base business, smaller orders that is at very normal level, but in the sort of medium size of orders, we see this decline that you pointed out.

Thank you both. Maybe turning to the working capital dynamic, I think customer advances have been about 10% of revenue, at least in the first three quarters. How do we think that working capital item evolves? You've seen a step up in large orders. Do you require a larger level of advance payments on those large orders versus the mid-sized ones?

No, thanks for that one. And indeed on those two large orders that we have announced, we have also during the quarter received the prepayments and the prepayment size is sort of similar to other orders. So it's not larger than in other orders. And yes, it has a positive impact of some tens of millions in our fourth quarter cash flow, but not more than that.

Thank you. And then maybe just finally, in the service business, again, within minerals, were there any revenue gaps in the year as a whole, either as a result of customers moving to carry maintenance, say, in the nickel market, or perhaps due to site-specific issues? We know there's been a lot of productivity challenges, so I just wonder if there's any gaps during the year.

Nothing significant that would have affected Metso service numbers as such. Of course, these are never good ones when there has been a lot of challenges in certain customers, but we have not had that kind of stake of service business that would have been creating any real impact for our situation.

The two main incidents at customer side, you know, Crosbury and Coprede Banama, you know, those are there, but they are nothing new. They have been there already for some time.

Very clear. Thank you.

The next question comes from Edward Hussey from UBS. Please go ahead.

Hi, Sami, Hussey, and Juha. Thanks for taking my questions. So just the first one, the drop through of 17% in the minerals business, which given only equipment revenues grew, it implied that this is the drop through on equipment revenues. Is this the sort of normalized drop through we should think about going forwards? or maybe put it another way, is 17% roughly what the equipment gross margins are.

Yeah, maybe I can take that, Edward. Thanks. And when we look at the numbers, we see the higher revenue impacting positively the capital margins. And if you think about our margins in minerals capital overall at drop-through level, they are higher than 17%. So sales margins are greater than that.

Okay, that's helpful, thanks. And then just maybe just one further question, just on the, within the release, you talk about mining FIDs being slow. I mean, is the implication that the pipeline remains very strong, and is there any sense that these FIDs might accelerate into 2026?

Yes, we have seen already the change, like coming to the end of the 25, that there is more activity remains high but there's more closer to the final kind of situation in the negotiation and also from the customer side readiness to to start to move and place the orders and and we see no change in this when when looking now q1 and then the rest of the 26 at this moment yeah that's great thank you very much

The next question comes from Chitri Dasinha from JP Morgan. Please go ahead. Yeah, hi, sir. Can you hear me?

Yes, we can.

Amazing. Good afternoon. Thank you for taking my questions. I have two, please. Maybe if I could just follow up on the minerals margin. I mean, here clearly the equipment mix was negative in the quarter. But, I mean, going forward, how should we think about the path towards your 20% margin target should mix continue to be a negative?

Yeah, I mean, thanks for the question and great that you got also to draw the line. We have obviously in our strategy to target to grow the share of aftermarket and I think you can appreciate based on the numbers and looking at the history that we were extremely successful in Q4 in terms of recognizing revenue from those OE projects, which resulted to unusual profit mix. What I take as encouragement is that despite that mix, we were able to deliver um okay numbers in minerals and and that's a proof point that the system works but but of course going forward we are not looking looking to have um over time this kind of a mix but rather higher share of aftermarket in line with strategy and then with that also you know journey towards the 20 minerals margin by by 2028. very clear thank you and then maybe if i could just ask on the aggregate margin

I mean, here the margin improved quite nicely in the quarter, and you were saying that you were bringing back temporary workers, I think, back into Q2. Do you think you'll need more people capacity if demand continues to be strong in H1? How should we think about this?

I think that is very positive problem if that comes because that means that the main markets are active and the orders are coming in and definitely we have capability for that and that's not going to be a challenge for us in that sense. Right now we are in a good situation, we have a good capacity in the factories and the work is happening and people are working for the current level of business. But as said, we of course have all the readiness for also increasing the production.

And if you look at what happened in aggregates during 2025, a lot of equipment was delivered from inventory. So the finished goods inventory during the year went quite a bit down in aggregates, which was of course a positive news. But then the consequence is that to deliver for example the same amount of equipment in in 2026 we need to manufacture significantly more which is positive we need uh we need all of our people to uh to do that and the teams are now now back in work since the springtime okay thank you the next question comes from klaus bergland from city please go ahead

Thank you. Hi, Sami and Pasi. So first I want to come back to larger orders versus underlying. I think you said before, Sami, that we can't have both larger orders and underlying orders improving at the same time. One of the reasons why underlying orders were solid from mid-24 was because of relatively slow decision making on the larger side. Now we see the large orders coming through in a big way. but small and medium sites are down year over year. So should we then assume that the current level of underlying of some 200 million around 800 million annualized is the right level right now and then add new larger orders on top? I'm just interested in your thoughts on the dynamic there. Thank you.

Hi Claes. I don't fully recall that what quote you are referring to because these two are not really fully aligned in that sense that the let's say underlying small medium-sized projects they live their own life and they have their own drivers and then these larger ones they have different dynamics and approval process and so on. So they are not connected in that sense. And what I was now in this call saying is that there is a fluctuation. It's not constant month by month when it comes to these smaller ones, which are very important for us. And in Q4, we had two months with the lower amount. That's not so much to do with the large orders coming in it was more about those two months had less orders coming in and already reflected that the beginning of the year seems to have a normal level if I called something normal.

Got it, we had a discussion in November when we met but yeah all good. Then my second question coming back to the mix in minerals if I had back the warranty cost of 5 million from last year the modern minerals is down from 16.5 to 16.1 percent and during the cmd i think the message was that mix shouldn't be an issue for you to get to at least 20 margin so obviously as you said policy it's a pretty extreme quarter but when you look at other peers particularly upstream think about sandvik here they have very strong equipment deliveries no mix issue so two questions on on this topic do you expect the equipment margin to improve already next couple of quarters and when do you look to see your modernization orders with higher margin sort of going through the backlog and then boosting the mix, just to understand the dynamic when this mix can sort of start to improve. Thank you.

Maybe Klaas, and thanks for that, starting from the upgrades and modernizations, which are aftermarket business for us. So, you know, the dynamic changed during 2025 when we started to receive those orders. and have a good amount of those in the pipeline to be delivered now during 2026. And the expectation is that we continue to see some of those orders coming in during 2026, and that is simply based on the customer fleet that is out there and from a timing point of view requires those activities. Then when it comes to the drop-through, my take on Q4 is that it's encouragement that the capital business is healthy and can deliver. And like I already said, and you also reported or said as part of your question, it's not the normal mix. And we should not expect that we have this kind of a mix on rolling basis going forward. continue to see the steady growth in our aftermarket business, and then that will be complemented by healthy capital business.

Okay, my final question is on free cash flow. You're now at the all-in free cash model, not operating, but all-in free cash model, around 12% for the year. So I just want to zoom in on the underlying working capital, extra prepayments, receivables are up two percentage points to sales, inventories are down by around the same amount, but payables and other liabilities, are going up and creating, it looks like you're creating a boost. I'm trying to understand if this is sustainable. Are you better payment terms with your suppliers and what's going on? They're looking at other liabilities. I appreciate that. That was a very low level last year, but just to understand that dynamic on working capital passive would be very, very good. Thank you.

Yeah, thank you. And if I quickly talk through all the three or four main components starting from the prepayments, which we already discussed here. So yes, the prepayments from those two larger orders had an impact on our forward quarter cash flow and the impact was you know some tens of millions so you know of course significant but I mean that's not sort of on its own behind the strong cash flow that we created and on those projects we continue to operate so that we run them on cash positive basis throughout the project execution. Then if you look at inventories, that has been a focus area for us for some time. Now when you look at Q4 inventory numbers, just want to highlight that the MCP business back to continuing operations has impact on inventories as well. we talk about you know some 50 million worth of inventory and if you do the comparison for example to the balance sheet end of 2024 so there is just something to be to be noted when it comes to payables you are indeed right that you know we have gained some traction there I wouldn't think that this is one of activities rather thanks to the work that our procurement people are doing to work with our suppliers and bring the payment times up in the discussions, agreements that we have with our supplier partners. And then finally, receivables, I mean, nothing extraordinary there, continues to be a focus area to sort of make sure that our customers pay on time and in line with the terms that we have agreed with them. No material issues there to report, which is, of course, a good position to be.

All right, thank you.

The next question comes from Auntie Kansanen from Seb. Please go ahead.

Hi guys, it's Antti from SCB. A couple of questions for me as well and coming back to the minerals sales mix discussion. I mean, if we look at kind of the equipment orders in minerals in the past couple of years have been 1.5, 1.6 billion and that's the level of sales that you also delivered in 21 and the service book to build is obviously better. So I just wanted to maybe understand better, how do you expect that equipment backlog to convert into sales during this year 26? Is the backlog longer, shorter than what it has been? And is there still kind of a contribution from early orders that could drive that top line into growth in latter parts of this year on equipment specifically in minerals?

Thanks Antti for that and if we start from the backlog number point of view, the backlog in equipment is in substance the same as it was when we started year 2025. And where the backlog improvement is coming from is from our aftermarket business, which is good because now we have a significantly more solid starting point for 26 compared to the starting point we had for 2025. Then if we think about the projects in Minerals Capital side that we will recognize during 2026, it's of course first the bread and butter business, the small ones which turn as they come. And then, I mean, none of the bigger projects that we announced in late 2024 are fully complete. Yes, we have started to recognize the revenue, but they will contribute to 26 still. In some cases, it will go up to 2027. And if we think then about the new ones, I mean the smelter project and then the the Mården Artum Gold Plant. So there, the revenue recognition will start potentially something H1 this year, but then towards the end of the year, when we get the underlying works with our teams, with suppliers, with customer moving. So that's a little bit the dynamics. And I think it's quite typical with these larger ones that it takes six, eight, 10 quarters to deliver those. They are big projects. And when we do POC accounting on them, this is the outcome from revenue point of view.

And I guess you're seeing fairly stable outlook for, let's say, the smaller ones. So the ones that you would book this year and would still contribute in a meaningful manner on revenues so one would assume that the sales mix improves actually year over year driven by kind of service growth and lattice equipment or is that a bit of a stretch?

That's good thinking Antti and as stated so we see a good amount in our pipeline of those small medium-sized ones and 2025 showed that we are winning also a lot of those opportunities.

Okay. And then the second one was on the aggregate side. And I mean, it's a good order growth end of 25. I guess a positive indication now that we're heading into the summer season. Do you want to talk anything about how you think kind of the European demand trending early this year? I mean, you talked about that kind of there's a sentiment improvement throughout 25, but maybe not much happening on the utilization rates or the workforce. situation for your end customers. So are you seeing kind of an improvement on that front? And are you seeing kind of a volume pickup that would, let's say, compensate or more than compensate on the increased cost base that you have on the European production setup?

Yeah, from the European market first. Yes, 2025 was already the year of the pickup. And it came from, let's say, Eastern European countries, if I put it this way. At the same time, we also had low hours coming to the machines located in other countries. So kind of like not creating the aftermarket potential, but from the new equipment point of view, There was a clear pickup and we see that the pickup is to stay. So there is a continuous request for quotes and also then winning the orders from the European countries.

If you look at the distributor inventories, that continues to be an encouraging data for us. The decline started spring 2025 and continues to be at sort of a level where we expect it to be supportive for our business in the short-term outlook.

Is it too early to comment anything on the potential summer season of the bigger Central European regions that have been historically big markets for you, the Germanys and the Francys and countries like that?

Yeah, I think that the Germany, which was somehow maybe impacting also the pickup of the Europe last year the Germany stimulus package which maybe have not created so much of business coming from the actual Germany yet so that is a little bit positive upside potential that when that governmental money actually is flowing down for the provinces and for the actual infrastructure projects. So that could be creating that normal seasonality in that sense, but no real signs of that yet.

All right. Thank you very much.

The next question comes from Vlad Sergievski from Barclays. Please go ahead.

Gentlemen, good afternoon. Thanks very much for taking my two questions. I'll start with commodity mixed list. Can you talk about the difference in demand levels between gold customers and industrial metal customers? Is there a notable difference in urgency to take investment decisions for those group of customers? Also, could you provide an update of what your exposure to gold customers was in 2025 and whether it could grow in 2026?

Hi Vlad, good to hear you. Yes, the gold customers have had much faster decision-making process than the so-called traditional commodity metal customers. And of course it has been driven by the very, very high record high prices of the gold and not waiting to get the orders in and also the execution of the delivery projects moving forward. So that has been one area that we did see already 25 and seems to continue at the moment.

Excellent. Sami, if I can ask you about one specific project as well. It's a Recodeek project. which obviously you won some nice orders previously. What's the security situation over there right now? Because as you probably have seen, Barik has put this project under review given the security concerns. I think it was last week. Would you give us some idea what's your backlog exposed to this project and what's your view actually from the METSO perspective on what's going on?

So let's start for the very important one which is the security of the people and that has been on a very high security level from the beginning and that was also something that we worked on together with the Barrick to ensure that their people and our people have the maximum security all the time so there has been no real issues or incidents or anything like that. And then from the perspective of Baric making the moves, we have, of course, taken a lot of these things into account between the contract, between Baric and Metso. And in that sense, there is no real issues for Metso at this point. Backlog situation, I don't remember the numbers myself.

So if we start from the orders that we have reported, so second half of 2024 we recorded roughly 150 million worth of recording orders and certainly back to earlier discussion that we have here, some of those have been delivered or are in delivery as we speak. But I guess we will not go to sort of exact details of how much has been delivered and how much is still in the backlog. But as a starting point, you know, from age to 24, we have that 150 million-ish order intake from Recodec.

Excellent. And just to clarify, you continue to work on this project as normal? There is no, like, schedule adjustments or anything like that?

As per today, we act normally together with Parik.

Thank you so much, Antuna.

The next question comes from Alex Jones from BOFA. Please go ahead.

Great, good afternoon. Thanks for taking my question. Just one following up on the question earlier about aggregates demand in Europe. Could you expand a little bit what you're seeing in other regions of the world and whether you've seen any changes in any of those into 2026?

Thank you.

Let's start by... three baskets we normally talk about, so US, Europe and then the rest of the world. And maybe this time I can start from the rest of the world. And there we have seen quite a good activity level last few months. Obviously, this third basket is the smallest of these three. But nevertheless, we are happy that our truly global exposure also for the aggregate business uh is yielding results so we have a good good growth numbers coming from from many many countries um in that basket and europe we discussed and then the u.s which normalized uh quite a well during 2025 to the normal levels so there we have also this uh positive signal to our direction what was he was saying that that we do see that the distributor inventories have been developing positively from our perspective that distributors have been able to move the machines to the customers and that gives a good normal situation for us for the beginning of 2026 situation.

Great, thank you.

The next question comes from Andreas Koski from BNP Paribas. Please go ahead.

Thank you and good afternoon Joar, Sami and Pasi. First if I can come back to the order intake in minerals. It's been a lot of discussions about the large orders versus small and mid-sized orders and in Q4 as you pointed out you have had two large orders and on top of that you had the Al-Malik order as well. I understand that the pipeline remains strong but To repeat this kind of order level 1.1, 1.2 billion euros in the mineral segment, do you think that we need to see large orders coming through also in the coming quarters or is it possible that we could expect a bounce in the small and mid-sized orders? Thank you.

Yeah, thanks Andreas. As said, we do see that the activity for the smaller midsize stays in a good level and then it's about the timing question that when they actually come as a PO. But for your question, so obviously it helps when we get the larger ones and as our market outlook statement also says we expect to remain on the same level as in the Q4 when we did see that these larger ones started to come and we do know that we are having discussions with the customers with the so-called final stage so the expectation is about the same that we had during the Q4 that expecting the larger ones to come q1 h1 so so there is nothing at the moment saying that that wouldn't happen and to get those quarterly or order intake numbers together it is the mix of the larger ones the mid ones and then then good strongly single digit development in the aftermarket understood thank you very clear and then secondly on aggregates maybe a bit short term but

In Q4, you had very strong deliveries. Usually, we see somewhat stronger deliveries in Q1 than in Q4. Is that what we sort of should expect also going into 2026?

Yeah, I think you spotted nicely that one. So we did have a good amount of deliveries in the Q4 and that is making us to think that then the normal situation as you were referring that, you know, stronger in Q1 than Q4 maybe is not the case in this quarter now. So it's going to be good delivery, but not maybe stronger than Q4.

Understood. And then lastly, if I looked at the P&L, the admin cost line increased a lot. Is that more or less only related to the one-offs or capacity adjustment charges that you took in the quarter or is it something else? Thank you.

Thank you, Anders. It's primarily those items impacting there. We have also some other variations, typical year and stuff, but nothing material there. The bigger change is those one-off type items. Understood.

Thank you very much.

The next question comes from William Mackey from Kepler Shoebrew. Please go ahead.

Good morning, thanks for taking the question. A couple, please. First of all, with regard to the Americas or North America, could you comment a little on any impact potentially from your customers on Section 232 and how the situation sits between your Canadian operations and selling into the USA? And then on a regional basis, the question is more around minerals. When I look at the regional sales, I know there's a lot of FX effects in there, but South America seems to have come down a little and North America flat. I wonder if you'd comment on how the order versus revenue development has been in the Americas, South and North, and what your outlook is, particularly in South America. Thank you.

Yeah, maybe William, I start from the section 232. So when it comes to the minerals, this has been in place since it was introduced. Don't remember the exact month, but during the autumn, August 2025, or if August is wrong, apologies for that, but that timeframe anyway. and our approach like with other tariffs has been that we price this into our customer deliveries and then that has been successful. It looks that this is the approach the industry has also taken. Then when it comes to aggregates, the situation is a bit different, so you may, William, remember that this steel and aluminium derivatives discussion has been ongoing for some time, and when it comes to crushers and screens, the primary aggregate equipment, they are still excluded from section 232. and there was speculation that this would change already late last year. We haven't seen that and let's see if they continue to be excluded for good or if there is a change in this regard.

And then for your second question, Pasi can maybe comment about the effects, that's of course living its own life, but when it comes to the Americas, both North and South, so for obvious reasons, they are the two largest regions that we do business in, and looking at the pipeline, so that is strong in both. we are truly global company and and so is especially the minerals business but obviously we have quite a lot of current opportunities in both of both of these continents and that then has the impact for the effects later on or not it depends on how the world is at that moment

And then, you know, William, when it comes to currencies, so I think we have seen throughout 2025 sort of appreciation of Euro against most currencies that are relevant for us. And that impact is then similar in the orders and in revenue. So, you know, that shouldn't... The FX, of course, impacts the sort of total levels, pushing Euro levels slightly down, but the impact is similar to orders and revenue.

Thank you. A short follow-up, if I might, with regard to your strategy execution. Great cash inflow, strengthened balance sheet recognized by the agencies. You clearly have more flexibility on capital allocation. You've made a couple of disposals, are there more? But more importantly, what is the environment like for M&A additions? And what should we expect with regard to your acquisition-based strategy this year?

Thank you for that question. As we stated in the Capital Market Day, this is a growth strategy. We know that by focusing, we are able to grow organically, but an integral part of the success of the strategy is also the inorganic part. And we are having quite a good amount of interesting targets, if we put it this way. How is the environment? Environment is quite normal in many sentences. Obviously, we are looking for those kind of targets that are clearly supporting our strategy and filling in either the technology gaps that we have or creating our synergies to really accelerate our growth initiative. So we are active in that front as well as you saw that we just closed one in Australia.

to the other side of the portfolio divestiture. So Tiferros heat transfer business and loading hauling just completed. We don't have anything else ongoing in that site. So I'm looking for growth for now.

Thank you very much.

The next question comes from Edward Hussey from UBS. Please go ahead.

Thanks for taking one more question from me. I just wanted to ask about clearly strong minerals equipment sales growth in the quarter. I'm just trying to work out how this is going to translate to aftermarket in the coming quarters. Do you mind just giving us a sense of what the usual lag is between equipment installation and when it comes to an aftermarket and also sort of what kind of level of aftermarket to pick up can we expect? I mean, what's the sort of aftermarket intensity on these sort of large projects that you're installing? Thank you.

Thank you very much. That is always good when we get the new installed base out there and in operation. The business that starts immediately is a consumables business and then also the expert services in the field. When it comes to the spare part business, that typically takes a few years before there starts to be a significant amount of that type of business coming out of the newly installed base. But all in all, It starts immediately with the consumables side and then the big kind of like upgrade potentials typically then come some equipment at the year five and most of them at the year 10. So this is like a long-term game in that sense to create a large install base for the future aftermarket growth.

Yeah, that's very clear. Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

All right. Thanks very much for your participation and for questions and discussions. We conclude this conference call here. We'll be back on April 22nd for first quarter results. And before that, we are looking ahead for quite an active conference and road showing season. So looking forward to see many of you in the next coming weeks face to face. But this concludes this call. Thanks again and goodbye. Thank you. Thank you.