We have a clear path to growth John Quinlivan President, Flow Control

Transcription

1 We have a clear path to growth John Quinlivan President, Flow Control Metso

2 Flow Control will continue as a high performer - and will aggressively seek growth Our performance has continued to be strong We have been resilient to market drop We have a lot of growth opportunities to tap into We will grow by Expanding our channels to market Expanding our market presence horizontally Continuing to improve our service capabilities and network Developing our portfolio to support growth Continuing to build and strengthen our operational excellence Making acquisitions in flow control 2

3 Where are we today? We have a strong platform in valves and pumps Valves 85% of business area net sales Strong niche position in oil & gas downstream, process industries and leader in pulp & paper Net sales EUR 723 million¹ Personnel ~2,700² Pumps 15% of business area net sales Serving a wide range of slurry applications with pumps, hoses, and slurry valves, predominantly in mining industry 3 1 Q3/2014 Q2/2015, rolling 12 months without Process Automation Systems 2 Personnel figure based on the most up-to-date information

4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 Where are we today? We continue to deliver strong results Net sales, EUR million % 16% 14% 12% 10% 8% 6% 4% 2% 0% Valve business strong performance continues - development has outpaced the market and the leading competitors. Pumps has high profitability with a main focus on highwear applications. Capital Services EBITA% Note: Figures include valves and pumps, excluding Process Automation Systems * Before non-recurring items 4

5 Where are we today? The markets have been challenging Oil price 1 Brent crude oil price USD/barrel EPC order trend 2 Rolling 12-month order intake (FX=Dec 2014) EUR billion Mining equipment providers order trend 3 (Rolling 12-month order intake, FX=Dec 2014) EUR billion Pulp & Paper equipment providers order trend 4 Rolling 12-month order intake EUR billion Source: Thomson Datastream 2. Selected EPC companies include: Technip, JGC, Chiyoda, Tecnimont, KBR, Linde Engineering, Fluor, CB&I, Saipem, Jacobs Engineering, Samsung Engineering and GS Engineering & Construction 3. Selected mining equipment providers include Atlas Copco (segment), Metso (Mining Capital), Sandvik (segment) and Weir (segment) 4. Selected Pulp & Paper equipment providers include: Andritz (segment), and Valmet (corporate level) 5

6 Where are we today? Our valve business has been resilient to market decline, while competitors have suffered Flow Control valve business rolling 12- month net sales development vs. peers * Indexed (Q1/11 =100) Flow Control valve business rolling 12-month EBIT % development vs. peers* Metso valves Valve peers Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Valve peers Metso valves Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 *Including Emerson Process Management, Flowserve Flow Control Division, Cameron Valves & Measurement, Pentair Control & Valves and Velan 6

7 Where are we today? We have a favorable business mix with a large service share Well-balanced geographical presence Net sales split 1 Limited exposure to most affected oil and gas segments Net sales by industry 1 Most of the sales are service driven Net sales split services / capital equipment 1 24 % 6 % 27 % 15% 14% 10% 41% 6 % 36 % 15% 46% 59% Europe 27% North America 36% South America 6% Asia Pacific 24% Middle-East and Africa 6% Oil & Gas midstream 10% Oil & Gas downstream² 46% Pulp & Paper 15% Mining 15% Other³ 14% Capital 41% Services 59% 1. Percentage shares are for valves and pumps only excluding Process Automation Systems, based on rolling 12 month ending Q Oil & Gas industry includes Oil & Gas production, transportation, refining, energy & process, bioenergy, petrochemicals as well as industrial gas 3. Other industries includes among others chemicals, food processing, agriculture, pharma 7

8 Where are we today? Despite the market turmoil, we remain positive on the midterm development of Flow Control end markets Oil price 1 Brent price (USD/barrel) O&G CAPEX & OPEX 2 USD Billion Forecasts in 2014 Refinery capacity 3 Total Refinery capacity (CDU mmbd) Chemicals CAPEX growth Average forecast 2,100 1,800 1,500 1, % Forecasts in % 6% % 20% 15% 10% 5% % -5% 1. Forecasts from Citi, Deutsche bank, Morgan Stanley, EIA, Economist Intelligence Unit, OECD 2. Morgan Stanley forecasts 3. Global Data forecasts 4. IHS forecasts 8

9 Flow Control will continue as a high performer - and will aggressively seek growth Our performance has continued to be strong We have been resilient to market drop We have a lot of growth opportunities to tap into We will grow by Expanding our channels to market Expanding our market presence horizontally Continuing to improve our service capabilities and network Developing our portfolio to support growth Continuing to build and strengthen our operational excellence Making acquisitions in flow control 9

10 What will we do? We are expanding our channels to market We are developing additional channels to market globally - Stocking distributors serving our customers in their day-to-day needs - Partnering with existing flow control channel partners that are expanding their global footprint - Growing our OEM customer base - Expanding our industry-specific partners network We have the portfolio to be attractive to additional channels to market and we will further expand the portfolio 10

11 What will we do? We are expanding our market presence horizontally Strengthening our position in core industries of oil and gas, mining and process while enhancing our product portfolio to grow our presence horizontally Entering into other industries with our slurry pumps portfolio - expanding beyond mining Acquisitions of businesses to expand our horizontal position 11

12 What will we do? We continue to expand our service capabilities and network Large installed base creating a lot of opportunities Continue developing our strong local presence - 5 new service centers in 2015 further expanding our network Installed base information management providing our customers with more efficient use of their flow control assets Introducing new service capabilities increasing our customers productivity Improving service processes and tools Most of the sales are service driven Net sales split services / capital equipment* 59% 41% Capital 41% Services 59% * Percentage shares are for valves and pumps only excluding process automation systems, based on rolling 12 month ending Q

13 What will we do? We continue to build and strengthen our operational excellence to support growth Productivity improvements since 2012 in all hubs Order engineering and management revamped between Productivity improved from 77% to 89% globally Efficiency improved by over 6% Global procurement cost-saving model, KPIs and tools implemented 2012/13 Continuous footprint and capacity optimization Annual savings achieved: 4% of direct material spend Product transfers to cost competitive countries, New facility investments Continuous HSE development LTIF improved from 6.2 to 3.2 in three years 13

14 What will we do? Major initiatives to develop front-end processes and tools leading to commercial excellence We focus strongly on commercial excellence and creating best-in-class front-end processes and tools globally - Sales process development - Product configurator - Implementing Salesforce.com - Pricing 14

15 What will we do? Portfolio development to support growth Developing control valve offering Launching new Neles NDX positioner Expanding mining pumps range Increasing service solution portfolio Coal Neles globe valve expansion globally Target to boost OEM business Channel partners development Competitive Mill Discharge Pump for mining Expanded global sales network Introducing new service solutions and products 15

16 Flow Control will continue as a high performer - and will aggressively seek growth Our performance has continued to be strong We have been resilient to market drop We have a lot of growth opportunities to tap into We will grow by Expanding our channels to market Expanding our market presence horizontally Continuing to improve our service capabilities and network Developing our portfolio to support growth Continuing to build and strengthen our operational excellence Making acquisitions in flow control 16

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