Metso Outotec Oyj

Quarterly Report • May 7, 2020

METSO MINERALS - SELECTED UNAUDITED INTERIM CARVE-OUT FINANCIAL INFORMATION AS AT AND FOR THE THREE MONTHS ENDED MARCH 31, 2020

KEY FIGURES

EUR million, percent	1-3/2020	1–3/2019	1–12/2019
Orders received(1)	874	823	3,009
Orders received(1) by service business	498	474	1,907
share of orders received, percent	57.0	57.6	63.4
Order backlog(2)	1,427	1,545	1,408
Sales	696	681	2,976
Sales by services business	439	429	1,815
share of sales, percent	63.1	63.0	61.0
Adjusted EBITDA(3)	89	95	432
share of sales, percent	12.8	14.0	14.5
Adjusted EBITA(4)	74	83	377
share of sales, percent	10.7	12.1	12.7
Operating profit	59	78	325
share of sales, percent	8.4	11.5	10.9
Profit for the period	43	49	223
Net cash flow from operating activities	103	21	43
Net working capital(5)	793	664	853
Net debt(6)	665	271	772
Gearing(7), percent	52.0	21.7	61.5
Equity to assets ratio(8), percent	39.9	43.8	39.1
Total assets	3,464	3,131	3,457
Personnel at the end of period	12,664	10,648	12,894

Formulas for key figures

(1)	Orders received	=	Orders received during the period
(2)	Order backlog	=	Undelivered orders at the end of the reporting period
(3)	Adjusted EBITDA	=	Adjusted EBITA + depreciation
(4)	Adjusted EBITA	=	Operating profit (EBIT) + restructuring and acquisition-related costs + amortization
(5)	Net working capital	=	Inventories + trade receivables + other non-interest bearing receivables + customer contract assets and liabilities, net - trade payables - advances received - other non-interest bearing liabilities
(6)	Net debt	=	Borrowings - non-current financial assets - loan and other interest bearing receivables (current and non-current) - liquid funds
(7)	Gearing	=	Net debt Total equity	× 100
(8)	Equity to assets ratio	=	Total equity Balance sheet total - advances received	× 100

COMBINED STATEMENT OF INCOME

EUR million	1-3/2020	1-3/2019	1-12/2019
Sales ------------------------------------------------------------------------------------------------------------------------------------------------------------------------	રતેર	681	2,976
Sales, Metso Group	0	0	0
Sales, total	રતુર	681	2,976
Cost of goods sold()	(489)	(481)	(2,117)
Gross profit()	207	200	858
Selling and marketing expenses (1)	(୧୪)	(રત)	(266)
Administrative expenses	(60)	(49)	(212)
Research and development expenses	(8)	(8)	(30)
Other operating income and expenses, net	(12)	(6)	(25)
Share in profits of associated companies	0	0	l
Operating profit(1)	ਵੇਰੇ	78	325
Finance income	3		4
Finance income, Metso Group	1	1	3
Foreign exchange rate gains/losses	6	(1)	1
Finance expenses(1)	(10)	(d)	(42)
Finance expenses, Metso Group	0	0	0
Finance income and expenses, net	(1)	(8)	(34)
Profit before taxes	58	70	292
Income taxes	(14)	(21)	(69)
Profit for the period	43	49	223
Attributable to:
Equity holders of Metso Minerals	43	49	224
Non-controlling interests	0	0	(1)

COMBINED STATEMENT OF COMPREHENSIVE INCOME

EUR million	1-3/2020	1-3/2019	1-12/2019
Profit for the period	43	49	223
Other comprehensive income:
Cash flow hedges, net of tax	0	0	3
Currency translation on subsidiary net investments	(48)	12	2
Items that may be reclassified to profit or loss in subsequent periods	(48)	12	ব
Defined benefit plan actuarial gains and losses, net of tax	0	0	(3)
Items that will not be reclassified to profit or loss	0	0	(3)
Other comprehensive income	(48)	12	1
Total comprehensive income	(2)	61	224
Attributable to:
Equity holders of Metso Minerals	(5)	61	225
Non-controlling interests	0	0	(1)

COMBINED BALANCE SHEET – ASSETS

EUR million	Mar 31, 2020	Mar 31, 2019	Dec 31, 2019
Non-current assets
Intangible assets
Goodwill	547	460	556
Other intangible assets	158	59	167
Total intangible assets	704	519	723
Property, plant and equipment
Land and water areas	42	35	43
Buildings and structures	92	76	98
Machinery and equipment	127	107	128
Assets under construction	52	38	46
Total property, plant and equipment	313	256	315
Right-of-use assets(¹)	81	67	89
Other non-current assets
Investments in associated companies	8	5	8
Non-current financial assets	3	3	3
Loan receivables	5	6	6
Loan receivables, Metso Group	0	25	25
Derivative financial instruments	3	4	2
Deferred tax asset	100	85	108
Other non-current receivables	38	39	42
Other non-current receivables, Metso Group	81	140	88
Total other non-current assets	237	306	282
Total non-current assets	1,336	1,148	1,409
Current assets
Inventories	965	819	975
Trade receivables	540	491	577
Trade receivables, Metso Group	9	8	10
Customer contract assets	73	100	87
Loan receivables	1	1	1
Loan receivables, Metso Group	26	29	25
Cash pool receivables, Metso Group	24	29	17
Derivative financial instruments	48	10	16
Income tax receivables	42	26	44
Other current receivables	109	100	139
Other current receivables, Metso Group Deposits and securities, maturity more than three months	1 0	1 50	1 -
Cash and cash equivalents	292	319	156
Liquid funds	292	369	156
Total current assets	2,128	1,983	2,048
	3,464	3,131	3,457
TOTAL ASSETS

COMBINED BALANCE SHEET – EQUITY AND LIABILITIES

EUR million	Mar 31, 2020	Mar 31, 2019	Dec 31, 2019
Equity
Cumulative translation adjustments	(199)	(141)	(151)
Hedge reserve	0	(3)	0
Invested equity and retained earnings	1,475	1,379	1,402
Equity attributable to Metso Minerals shareholders	1,276	1,235	1,252
Non-controlling interests	2	11	3
Total equity	1,279	1,246	1,254
Liabilities
Non-current liabilities
Borrowings	729	385	801
Lease liabilities(¹)	64	54	69
Post-employment benefit obligations	62	58	61
Provisions	27	27	33
Derivative financial instruments	3	3	2
Deferred tax liability	63	30	66
Other non-current liabilities	2	2	2
Other non-current liabilities, Metso Group	6	6	6
Total non-current liabilities	955	564	1,040
Current liabilities
Borrowings	134	203	24
Cash pool liabilities, Metso Group	67	69	86
Lease liabilities(¹)	19	21	21
Trade payables	382	372	385
Trade payables, Metso Group	1	2	1
Provisions	69	57	71
Advances received	191	209	189
Customer contract liabilities	68	80	63
Derivative financial instruments	24	21	13
Income tax liabilities	34	72	47
Other current liabilities	239	216	251
Other current liabilities, Metso Group	2	0	11
Total current liabilities	1,231	1,321	1,163
Total liabilities	2,185	1,885	2,202
TOTAL EQUITY AND LIABILITIES	3,464	3,131	3,457

NET INTEREST-BEARING LIABILITIES

EUR million	Mar 31, 2020	Mar 31, 2019	Dec 31, 2019
Borrowings	862	588	825
Lease liabilities	83	74	90
Cash pool liabilities and receivables, net liability	67	69	86
Liquid funds	(292)	(369)	(156)
Loan receivables	(55)	(91)	(73)
Net interest-bearing liabilities	665	271	772

COMBINED CONDENSED STATEMENT OF CASH FLOWS

1–3/2020 EUR million		1–3/2019	1–12/2019
Operating activities
Profit for the period	43	49	223
Adjustments:
Depreciation and amortization	21	16	71
Financial expenses, net	1	8	34
Income taxes	14	21	69
Other items	1	0	(7)
Change in net working capital	45	(56)	(216)
Net cash flow from operating activities before financial items and taxes	126	38	173
Interest income and expenses paid, net	(3)	(4)	(31)
Income taxes paid	(19)	(13)	(100)
Net cash flow from operating activities	103	21	43
Investing activities
Capital expenditures on intangible assets and property, plant and equipment	(26)	(18)	(87)
Proceeds from sale of intangible assets and property, plant and equipment	1	1	8
Proceeds from and investments in financial assets, net	-	31	31
Business acquisitions, net of cash acquired	1	-	(214)
Business acquisitions, net of cash, acquired, Metso Group	0	-	-
Proceeds from sale of businesses, net of cash sold	-	9	9
Proceeds from sale of businesses, net of cash sold, Metso Group	(5)	-	50
Other items	-	-	(3)
Net cash flow from investing activities	(29)	22	(207)
Financing activities
Dividends paid	-	-	(144)
Dividends paid, Metso Group	(2)	-	(4)
Transactions with non-controlling interests	-	-	(13)
Proceeds from and repayment of debt, net	150	-	148
Repayment of lease liabilities	(5)	(4)	(24)
Net borrowings (+), payments (-), Metso Group	(88)	29	46
Net change in invested equity, Metso Group	41	(3)	(8)
Cash pool funding, Metso Group	(28)	(23)	(7)
Net cash flow from financing activities	68	0	(5)
Net change in liquid funds	142	43	(169)
Effect from changes in exchange rates	(7)	1	0
Liquid funds at beginning of period	156	325	325
Liquid funds at end of period	292	369	156

Reconciliation of certain alternative performance measures

EBITDA, EBITA, OPERATING PROFIT

EUR million, %	1–3/2020	1–3/2019	1–12/2019
Metso Minerals total
EBITDA, adjusted	89	95	432
% of sales	12.8	14.0	14.5
Depreciation	(15)	(13)	(55)
EBITA, adjusted	74	83	377
% of sales	10.7	12.1	12.7
Amortization of intangible assets	(6)	(3)	(16)
Adjustments	(10)	(2)	(36)
Operating profit	59	78	325
% of sales	8.4	11.5	10.9

Exchange Rates

Currency		1–3/2020	1–3/2019	1-12/2019	Mar 31, 2020	Mar 31, 2019	Dec 31, 2019
USD	(US dollar)	1.1055	1.1397	1.1214	1.0956	1.1235	1.1234
SEK	(Swedish krona)	10.7147	10.3776	10.5572	11.0613	10.3980	10.4468
GBP	(Pound sterling)	0.8580	0.8717	0.8773	0.8864	0.8583	0.8508
CAD	(Canadian dollar)	1.4900	1.5189	1.4882	1.5617	1.5000	1.4598
BRL	(Brazilian real)	4.9637	4.3259	4.4195	5.7001	4.3865	4.5157
CNY	(Chinese yuan)	7.7329	7.6867	7.7353	7.7784	7.5397	7.8205
AUD	(Australian dollar)	1.6833	1.5954	1.6090	1.7967	1.5821	1.5995