Metso Outotec Oyj

Investor Presentation • Mar 28, 2018

OUTOTEC OYJ

IMPLEMENTATION OF IFRS 15 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Minor impact of IFRS 15 on Outotec's 2017 figures

Outotec has adopted the IFRS 15 standard, Revenue from Contracts with Customers, as of January 1, 2018. As a result, Outotec restated the figures for 2017 using the full retrospective method. The main impacts of the restatement are:

• EUR 4.2 million negative cumulative restatement in retained earnings as of January 1, 2017, which represents the cumulative change in net result for previous periods
• EUR 4.6 million increase in revenue in the income statement for 2017
• EUR 1.4 million increase in EBIT and adjusted EBIT in the income statement for 2017
• EUR 1.0 million increase in the result of the period in the income statement for 2017
• EUR 11.1 million increase in the total assets, of which EUR 9.8 million relates to current assets and EUR 1.3 million to non-current assets as of December 31, 2017
• EUR 14.3 million increase in the current liabilities as of December 31, 2017
• EUR 17.2 million increase in order backlog as of December 31, 2017; the restated order backlog is EUR 1,005.4 million as of December 31, 2017

The impact of IFRS 15 on the quarterly Statements of comprehensive income, Statements of financial position and Segments' sales and EBIT for 2017 is disclosed below. The restated financial information is unaudited.

The restatement has no impact on Outotec's financial guidance given for year 2018.

Background

The new standard aims to establish principles for reporting useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity's contracts with its customers. It replaced the IAS 18 and IAS 11 standards and related interpretations.

Under IFRS 15, Outotec recognizes revenue when control of the good or service is transferred to the customer. The standard's accounting principles are divided into five steps: (1) Identify the contract(s) with a customer, (2) Identify the performance obligations in the contract, (3) Determine the transaction price, (4) Allocate the transaction price to the performance obligations in the contract and (5) Recognize revenue.

Impact analysis

Outotec's business constitutes of two segments: Minerals Processing and Metals, Energy & Water. Outotec offers mineral processing solutions from pre-feasibility studies to complete plants and life-cycle services, and solutions for metals processing, renewable energy production and industrial water treatment.

When applying the new standard, Outotec focused in its analysis especially on the need to combine contracts for revenue recognition purposes, identification of performance obligations, estimation of variable considerations and revenue recognition over time or at a point in time.

Outotec performed an analysis of on-going projects to assess the impacts of IFRS 15 on its project business. Focus in the analysis was in identifying distinct performance obligations and assessing if the criteria for recognizing revenue over time is met in Outotec's customer contracts.

Outotec delivers customized solutions, including plants and equipment, for its customers. Thus a project delivery at Outotec is typically considered as one performance obligation under IFRS 15. Based on the analysis of Outotec's on-going projects, the criteria for recognizing revenue over time is typically met in Outotec's project deliveries. Typically Outotec's performance creates an asset with no alternative use, and Outotec has an enforceable right to payment for the performance completed to date. Previously Outotec used cost-to-cost method to measure progress under the percentage of completion method. According to the management's assessment, cost-to-cost method will be used also going forward to measure the stage of completion for the contracts for which revenue is recognized over time.

The management assessed that certain customer contracts, previously recognized as revenue over time, would be recognized as revenue at a point in time. Combining contracts and definition of performance obligations impact the revenue recognition process.

In addition, Outotec continues to recognize revenue for standard equipment and spare part deliveries at a point in time based on delivery terms. Revenue for services is recognized when benefits have been rendered to the customer. There were no changes in transition to IFRS 15 in respect of standard equipment, spare part deliveries or services.

All figures in the tables have been rounded to the nearest whole number and consequently the sum of individual figures may deviate from the sum presented. Key figures have been calculated using exact figures.

Co l ida d s f c he ive te tat t o ns o em en om p re ns inc om e EU R mi llio n	Re d ort p e Q 1 20 17	Re d ort p e Q 2 20 17	Re d ort p e Q 3 20 17	Re d ort p e Q 4 20 17	Re d te p or Q 1- Q 4 20 17	Re d sta te Q 1 20 17	Re d sta te Q 2 20 17	Re d sta te Q 3 20 17	Re d sta te Q 4 20 17	Re d sta te Q 1- Q 4 20 17
Sa les	26 7.7	27 2.2	27 0.4	32 8.9	1, 13 9. 2	26 3.3	26 5.8	27 3.9	34 0.8	1, 14 3. 8
Co of les st sa	-20 4.9	-2 11 .3	-20 5.5	-24 8.7	-87 0. 5	-20 0.9	-20 7.0	-20 7.4	-25 8.3	-87 3. 6
Gr rof it os s p	62 .8	61 .0	64 .8	80 .2	26 8. 8	62 .4	58 .8	66 .5	82 .5	27 0. 2
Ot he r in co me	3.4	3.2	4.2	0.2	10 .1	3.4	3.2	4.2	0.2	10 .1
Se llin nd rke tin g a ma g e xp en se s	-32 .5	-2 8.9	-2 8.2	-3 0.0	-11 9. 6	-32 .5	-2 8.9	-2 8.2	-3 0.0	-11 9. 6
Ad mi nis tive tra ex pe nse s	-19 .5	-2 0.6	-1 6.4	-1 9.4	-75 .9	-19 .5	-2 0.6	-1 6.4	-1 9.4	-75 .9
Re h a nd de lop nt se arc ve me ex pe nse s	-13 .6	-13 .8	-12 .9	-15 .2	-5 5. 6	-13 .6	-13 .8	-12 .9	-15 .2	-5 5. 6
Ot he r e xp en ses	-1. 2	-0 .2	-0 .9	-1 .8	-3. 2	-1. 2	-0 .2	-0 .9	-1 .8	-3. 2
Sh of lts of iate d c nie are re su ass oc om pa s	-0. 1	0. 1	0.0	-0 .0	0. 0	-0. 1	0. 1	0.0	-0 .0	0. 0
EB IT	-0. 8	0.8	10 .6	14 .0	24 .6	-1 .2	-1. 4	12 .3	16 .2	26 .0
Fin inc nd an ce om e a ex pe nse s
I t in d e nte res co me an xp en se s	-1. 0	-0 .7	-0 .7	-1 .0	-3. 4	-1. 0	-0 .7	-0 .7	-1 .0	-3. 4
M ark ice ins d l et pr ga an oss es	-0. 6	-0. 8	-1. 0	-0. 2	-2. 6	-0. 6	-0. 8	-1. 0	-0. 2	-2. 6
O the r fi in d e na nce co me an xp en se s	-0. 7	-0 .8	-1 .5	-1 .1	-4. 0	-0. 7	-0 .8	-1 .5	-1 .1	-4. 0
Ne t fi in na nce co me or ex pe nse	-2. 3	-2. 3	-3. 2	-2. 2	-10 .0	-2. 3	-2. 3	-3. 2	-2. 2	-10 .0
Re lt b efo inc e t su re om ax es	-3. 1	-1. 5	7.4	11 .8	14 .5	-3 .5	-3. 7	9.1	14 .0	16 .0
Inc e t om axe s	0.5	0.1	-1. 3	-1 1.9	-12 .6	0.6	0.7	-1. 8	-12 .5	-13 .1
Re lt f the rio d su or pe	-2. 6	-1 .5	6. 1	-0 .1	1.9	-2. 9	-3 .0	7.3	1.5	2.9

Co l ida d s f c he ive te tat t o ns o em en om p re ns	Re d ort p e	Re d ort p e	Re d ort p e	Re d ort p e	Re d te p or	Re d sta te	Re d sta te	Re d sta te	Re d sta te	Re d sta te
inc om e	Q 1	Q 2	Q 3	Q 4	Q 1- Q 4	Q 1	Q 2	Q 3	Q 4	Q 1- Q 4
EU R mi llio n	20 17	20 17	20 17	20 17	20 17	20 17	20 17	20 17	20 17	20 17
Ot he he ive in r c om pre ns co me
Ite th wil l no t b las sifi ed ofit lo at to ms e r ec pr or ss
of fin fit R ts de ed be ob liga tio em ea su rem en ne ns	-2. 9	1.8	-0 .9	-1 .7	-3. 7	-2. 9	1.8	-0 .9	-1 .7	-3. 7
I ela tin item ha ill n be las sifi ed ta to s t t w ot to nco me x r g rec rof it o r lo p ss	0.8	-0. 6	0.3	0.5	1.1	0.8	-0. 6	0.3	0.5	1.1
Ite th be bse tly las sifi ed ofit lo at to ms ma y su qu en rec pr or ss
E xch di ffe lati for eig ion tra rat an ge ren ces on ns ng n o pe s	2.7	-18 .3	.4 -5	-2 .0	-23 .0	2.7	-1 8.3	.4 -5	-2 .0	-23 .0
C h f low he dg as es	3.7	3.4	-1. 6	-1. 1	4.3	3.7	3.4	-1. 6	-1. 1	4.3
A ilab le f le f ina ial set va or sa nc as s	0.0	0.0	-0 .0	-0 .0	-0. 1	0.0	0.0	-0 .0	-0 .0	-0. 1
I ela tin ite th be cla ssi fie d t ta to at nco me x r g ms ma re o y
rof it o r lo p ss	-1. 0	-0. 6	0.4	0.3	-0. 9	-1. 0	-0 .6	0.4	0.3	-0. 9
Ot he he ive in fo r th eri od r c om pre ns co me e p	3.2	-14 .2	-7. 2	-4. 0	-22 .3	3.2	-14 .2	-7. 2	-4. 0	-22 .3
To tal reh siv e i e f the rio d co mp en nc om or pe	0.6	-15 .7	-1 .1	-4 .2	-20 .4	0.4	-1 7.2	0. 1	-2 .6	-19 .4
Re lt f the rio d a ibu tab le ttr to: su or pe
Eq uity ho lde of the t c rs pa ren om pa ny	-2. 6	-1. 4	6.2	-0. 2	2.0	-2. 9	-2. 9	7.4	1.4	3. 0
No llin inte tro t n-c on g res	0.1	-0. 1	-0 .1	0.0	-0. 1	0.1	-0 .1	-0 .1	0.0	-0. 1
siv e i e f rio ibu To tal reh the d a ttr tab le co mp en nc om or pe to:
Eq uity ho lde of the t c rs pa ren om pa ny	0.6	-15 .6	-1 .0	-4 .3	-20 .3	0.3	-1 7.1	0.2	-2 .7	-19 .3
No llin inte tro t n-c on g res	0.1	-0. 1	-0. 1	0.1	-0. 1	0.1	-0. 1	-0. 1	0.1	-0. 1
Ea rni sh fo lt a ttr ibu tab le t o t he uit ng s p er are r re su eq y
of ho lde the t c rs pa ren om pa ny :
Ba sic rni sh EU R ea ng s p er are ,	-0. 03	-0. 02	0.0 2	-0. 01	-0. 0 4	-0. 03	-0. 03	0.0 3	-0. 00	-0. 0 3
Dil d e ing sh EU R ute arn s p er are ,	-0. 03	-0. 02	0.0 2	-0 .01	-0. 0 4	-0. 03	-0 .03	0.0 3	-0 .00	-0. 0 3

Co nd d c l ida d s te tat t en se on so em en f f ina ia l p it ion o nc os	Re d ort p e Ma h rc 31 ,	Re d ort p e Ju ne 30 ,	Re d ort p e Se be tem p r 30 ,	Re d te p or De mb ce er 3 1,	Re d sta te Ma h rc 31 ,	Re d sta te Ju ne 30 ,	Re d sta te Se be tem p r 30 ,	Re d sta te De mb ce er 3 1,
EU R mi llio n	20 17	20 17	20 17	20 17	20 17	20 17	20 17	20 17
A S S ET S
No nt ts n-c ur re as se
Int ib le ts an g as se	38 4.5	37 2.4	36 5.2	3 5 9. 1	38 4.5	37 2.4	36 5.2	3 5 9. 1
Pr lan nd ip ert t a nt op y, p eq u me	62 .3	58 .8	57 .0	5 6. 0	62 .3	58 .8	57 .0	5 6. 0
De fer d t t re ax as se	10 0.0	10 2.7	10 7.1	8 9. 6	10 1.8	10 5.1	10 9.1	9 0. 9
No f ina ia l a nt ets n-c ur re nc ss
I be ing nte t- res ar	3.9	3.8	3.8	3. 8	3.9	3.8	3.8	3. 8
N -in be ing ter t- on es ar	7.4	7.3	7.2	7.2	7.4	7.3	7.2	7.2
To l n ta nt ts on -cu rre as se	55 8.0	54 5.1	54 0.3	5 15 .7	55 9.9	54 7.5	54 2.3	5 17 .0
Cu nt ts rre as se
1 Inv ies tor en	22 7.6	21 9.1	21 2.6	18 5. 8	24 6.4	23 9.3	23 1.7	19 5. 9
Cu f ina ia l a nt ets rre nc ss
I be ing nte t- res ar	0.1	0.1	0.1	0. 1	0.1	0.1	0.1	0. 1
N -in ter t- be ing on es ar	44 0.3	40 3.4	40 9.0	41 3. 9	43 3.9	39 5.7	40 3.4	41 3. 6
Ca h a nd h e iva len ts s ca s q u	19 5.5	19 3.0	20 8.0	23 0. 2	19 5.5	19 3.0	20 8.0	23 0. 2
To ta l c nt ts ur re as se	86 3.5	81 5.6	82 9.8	8 3 0. 0	87 5.9	82 8.1	84 3.2	8 3 9. 8
TO TA L A S S ET S	1, 42 1.5	1, 36 0.7	1, 37 0.1	1, 3 45 .7	1, 43 5.7	1, 37 5.7	1, 38 5.5	1, 3 5 6. 8
1 o f w for hic h a dva id in tor ies nc es pa ven	56 .8	43 .1	39 .4	33 .3	63 .9	50 .2	41 .8	36 .5

Co nd d c l ida d s te tat t en se on so em en	Re d ort p e Ma h rc	Re d ort p e Ju ne	Re d ort p e Se be tem p r	Re d te p or De mb ce er	Re d sta te Ma h rc	Re d sta te Ju ne	Re d sta te Se be tem p r	Re d sta te De mb ce er
f f ina ia l p it ion o nc os	31 ,	30 ,	30 ,	3 1,	31 ,	30 ,	30 ,	3 1,
EU R mi llio n	20 17	20 17	20 17	20 17	20 17	20 17	20 17	20 17
S E Q U ITY A ND L IA BI LIT IE
Eq ity u
S ha ita l re ca p	17 .2	17 .2	17 .2	17 .2	17 .2	17 .2	17 .2	17 .2
R ine d e ing eta arn s	22 5.8	22 3.2	22 9.6	22 9. 8	22 1.4	21 7.2	22 4.8	22 6. 6
H br id bo nd y	15 0.0	15 0.0	15 0.0	15 0. 0	15 0.0	15 0.0	15 0.0	15 0. 0
Ot he f e ity ts r c om p on en o q u	93 .8	81 .3	74 .1	70 .0	93 .8	81 .3	74 .1	70 .0
Eq ity ibu b le he ity at tr ta to t eq u u ho lde f t he t c rs o p ar en om p an y	48 6.8	47 1.7	47 0.8	46 7.0	48 2.3	46 5.7	46 6.1	46 3. 8
No llin int tro st n-c on g ere	3.3	3.2	3. 1	3. 2	3.3	3.2	3. 1	3. 2
To l e ity ta q u	49 0.1	47 4.9	47 3.9	47 0. 1	48 5.6	46 8.9	46 9.1	46 6. 9
No l ia b il it ies nt n-c ur re 3 Int be ing st- ere ar	18 8.5	18 8.2	18 3.9	18 3. 5	18 8.5	18 8.2	18 3.9	18 3. 5
fer De d t lia b ilit ies re ax	36 .8	40 .9	43 .9	3 9.7	36 .8	40 .9	43 .9	3 9.7
3 Ot he -in be ing ter t- r n on es ar	65 .0	63 .2	64 .5	6 6.7	65 .0	63 .2	64 .5	6 6.7
ia il it ies To ta l n nt l b on -cu rre	29 0.3	29 2.3	29 2.3	28 9. 9	29 0.3	29 2.3	29 2.3	28 9. 9
Cu l ia b il it ies nt rre
Int be ing st- ere ar	55 .0	65 .6	64 .8	45 .0	55 .0	65 .6	64 .8	45 .0
No n-i be ing nte t- res ar
2 A dv ive d an ce s r ec e	17 8.3	17 0.8	18 0.3	20 3. 4	19 8.1	19 5.6	20 3.7	22 0. 2
Ot he -in be ing ter t- r n on es ar	40 7.8	35 7.2	35 8.9	3 37 .2	40 6.7	35 3.3	35 5.6	3 3 4.6
ia il it ies To ta l c nt l b ur re	64 1.1	59 3.5	60 3.9	5 8 5. 6	65 9.8	61 4.5	62 4.0	5 9 9. 9
To l l ia b il it ies ta	93 1.4	88 5.8	89 6.2	87 5. 6	95 0.1	90 6.8	91 6.3	8 8 9. 8
S TO TA L E Q U ITY A ND L IA BI LIT IE	1, 42 1.5	1, 36 0.7	1, 37 0.1	1, 3 45 .7	1, 43 5.7	1, 37 5.7	1, 38 5.5	1, 3 5 6. 8
2 g dva eiv ed be for ros s a nc es rec e r ev en ue rec og	nit ion tim e ( ov er pe 1, 44 5.2	of nta rce ge co 1, 44 2.6	let ion ) mp 1, 52 8.3	1, 49 0.4	1, 44 5.2	1, 44 2.6	1, 52 8.3	1, 49 0.4

Reported numbers have been reclassified by transferring a bond revaluation item in Non-current liabilities from Other non-interest-bearing to Interest-bearing.

Segments' sales and EBIT by quarters

EU R mi llio n	Re d ort p e Q 1 20 17	Re d ort p e Q 2 20 17	Re d ort p e Q 3 20 17	Re d ort p e Q 4 20 17	Re d te p or Q Q 1- 4 20 17	Re d sta te Q 1 20 17	Re d sta te Q 2 20 17	Re d sta te Q 3 20 17	Re d sta te Q 4 20 17	Re sta te d Q Q 1- 4 20 17
Sa les
Mi ls Pr ing ne ra oc es s	15 3.4	16 9.4	14 8.9	18 9.2	6 6 0. 8	15 1.7	16 7.7	14 7.8	20 1.2	6 6 8. 4
Me ls, En & W ta ate erg y r	11 4.3	10 2.8	12 1.5	13 9.8	47 8. 5	11 1.6	98 .1	12 6.1	13 9.7	47 5. 4
1 a Un llo d ite nd te a ca ms int les ra- g rou p sa	0.0	0.0	0.0	-0. 1	-0. 0	0.0	0.0	0.0	-0. 1	-0. 0
To l ta	26 7.7	27 2.2	27 0.4	32 8.9	1, 13 9. 2	26 3.3	26 5.8	27 3.9	34 0.8	1, 14 3. 8
EB IT
Mi ls Pr ing ne ra oc es s	10 .3	14 .4	14 .7	18 .5	57 .8	10 .4	14 .2	14 .3	21 .1	6 0. 0
Me ls, En & W ta ate erg y r	-9. 6	-1 1.6	-2 .7	-2 .4	-26 .4	-10 .2	-13 .6	-0 .6	-2 .9	-27 .2
2 a Un llo d nd in ite te tra a ca -g rou p ms	-1. 4	-2. 0	-1. 4	-2. 0	-6. 8	-1. 4	-2. 0	-1. 4	-2. 0	-6. 8
To l ta	-0. 8	0.8	10 .6	14 .0	24 .6	-1. 2	-1. 4	12 .3	16 .2	26 .0

1 Unallocateditems primarily include invoicing of group management and administrative services

2Unallocated items primarily include group management and administrative services

Outotec provides leading technologies and services for the sustainable use of Earth's natural resources. As the global leader in minerals and metals processing technology, we have developed many breakthrough technologies over the decades for our customers in the metals and mining industry. We also provide innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry. Outotec shares are listed on NASDAQ Helsinki. www.outotec.com.