Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Metso Corp (OUKPF, Financial) reported a robust adjusted EBITA margin of 16.9%, consistent with the previous quarter.
- The company saw a 3% increase in order intake at the group level, indicating positive market activity.
- Metso Corp (OUKPF) announced several strategic acquisitions to enhance its product offerings and market position.
- The company is making progress towards sustainability goals, with some plants achieving net zero emissions.
- Metso Corp (OUKPF) has a strong proposal pipeline, particularly in the copper sector, indicating potential future growth.
Negative Points
- Sales continued to decline due to lower order intakes in previous quarters, impacting overall revenue.
- Cash flow from operations was negative, influenced by the termination of the Waste-to-energy business.
- The Aggregates segment experienced a decline in orders and sales, reflecting seasonal and market challenges.
- Currency fluctuations had a 4% negative impact on sales, affecting financial performance.
- Inventory levels remain high, with challenges in reducing them as planned, impacting working capital.
Q & A Highlights
Q: Sami, regarding the service orders in Minerals, there was mention of a timing issue last quarter. Are there any pushouts in decision-making affecting service orders into the fourth quarter?
A: Eeva Sipilae, Deputy CEO and CFO, explained that there is some hesitancy and delay in decision-making for larger service orders, but the underlying activity remains strong. The dialogue with customers is active, and they are still interested in placing orders.
Q: On the margin, was there an incremental price increase that contributed to the results, or was it mainly cost actions?
A: Pekka Vauramo, CEO, noted that the mix, particularly the resilience of services, contributed to the margin. Continuous productivity improvements and restructuring in Minerals also supported the improved margins.
Q: Regarding copper, is there an increase in order pipeline and discussions compared to last quarter?
A: Pekka Vauramo confirmed that the proposal pipeline is at a higher level, particularly for copper projects. There is also some activity in gold, but copper remains the primary focus.
Q: On aftermarket orders, is the slow decision-making around rebuilds in Minerals temporary, or is it a normalization from previous strength?
A: Sami Takaluoma, President and CEO, stated that the hesitancy is more about timing rather than a drop in demand. Customers are still interested in upgrades and are expected to place orders in the coming months.
Q: Can you provide more details on the inventory reduction efforts and challenges faced?
A: Eeva Sipilae explained that the main challenge is aligning global efforts without suboptimizing. The focus is on finished goods, and the process involves granular efforts across the value chain. The goal is to responsibly reduce inventory while maintaining margins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
