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26 February 2018

Metso pursuing sustainability and profitable growth vision

First publishedon www.AggBusiness.com
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Metso's new, faster assembly line for track-mounted crushing plants at its state-of-the-art Tampere, Finland, production facility is an example of what interim company CEO, Eeva Sipilä, describes as the business's pursuit of sustainability and profitable growth

Metso, the Finnish global quarrying and mining equipment manufacturing giant, is prioritising sustainability and profitable growth in 2018 and beyond, according to Eeva Sipilä, the company’s interim president and CEO.

The company’s 2017 Annual Report, published on Friday 23 February, revealed that Metso’s annual sales rose 5% to €2.706 billion, with 2017 orders received up 9% to € 2.982 billion. However, Metso’s operating profit was down 4% to €218 million from €227 million in 2016.

In a wide-ranging statement contained in the Annual Report, Eeva Sipilä noted the “positive turnaround” in the mining sector, and improving demand across all the company’s other customer industries. “Metso’s priority for 2018 is to grow profitably. This organic growth target will be complemented by acquisitions where feasible.”

Sipilä also used her Annual Report statement to outline the company’s recent significant changes to the way it was implementing its growth strategy. “Compared to the previous structure with three business areas, Metso now has seven dedicated business areas: Mining Equipment, Aggregates Equipment, Minerals Services, Minerals Consumables, Valves, Pumps, and Recycling. Each of the seven business areas has clear priorities and action plans to drive growth and improve financial performance in their distinctive businesses. The new operating model further strengthens the accountability of our businesses and speeds up decision making to enable both the implementation of our growth plans and an agile response to market changes.”

Metso is said by Metso’s interim CEO to be in a good position – both financially and in terms of organisational capability – to capitalise on the favourable market environment.

A breakdown of Metso’s €2.706bn global sales in 2017 contained in the Annual Report reveal that European sales accounted for €685mn (25% of overall global sales - same as 2016); Asia-Pacific sales brought in €672mn (25% - up 2% on 2016); North America sales were worth €554mn (20% - down from 22% in 2016); and Africa & Middle East trading was worth €259mn (10% - same as 2016).

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Metso faster assembly line

Global quarrying and mining equipment market analysts were surprised by the recent departure of Nico Delvaux, just a few months after the Belgian national had taken over as Metso CEO and president, following Matti Kähkönen’s six-and-a-half-year stint in the top roles. Delvaux left in early February 2018 to take up a “once in a lifetime” opportunity as CEO and president of ASSA ABLOY AB, the largest global supplier of intelligent lock and security solutions.

In her 2017 Annual Report statement, Sipilä also stressed how Metso will continue to increase the use of digital technologies and data to create value for its customers through better productivity. “Metso’s digital program is targeting to find real solutions that will help our customers succeed. In mining, we will help our customers improve their comminution assets and processes. In the aggregates business, we will revamp our online capabilities and provide an engaging digital customer journey for the entire equipment lifecycle. In flow control, we will build new digital tools to better respond to and deliver on the changing customer requirements in our project business. The digital initiatives go hand-in-hand with our increased efforts in R&D, and we will invest more in innovation.”

Sipilä said that Metso is also convinced it has a role in tackling the opportunities and challenges of a circular economy, urbanisation and climate change. “Through the products and services that we innovate and offer to our customers, we can have a noticeable impact in process efficiency, lowering energy and water consumption, and noise and dust levels. For example, our solutions for manufactured sand or the recycling of aggregates can help preserve natural resources or recycle construction waste more efficiently.

“Sustainability remains at the heart of Metso’s operations, with safety among the key components. We meticulously track LTIF (long term incident frequency). Our firm view is that our own or our customers' safety must not be compromised under any circumstances.

“We updated our Code of Conduct last year and implemented a companywide learning program to ensure global compliance. In less than three months, we managed to get an astonishing 99.8% of our employees to sign their agreement to the updated code, signalling extremely strong commitment.”

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