However, the robust annual orders and sales figures could not halt a sharp 40% drop in operating profit in the full-year 2020 (€253mn compared to €423mn in 2019) and by 58% in the fourth quarter (€44mn compared to €103mn in Q4 2019).
The Helsinki, Finland-headquartered global quarrying and mining equipment and linked technology solutions giant’s 1 January to 31 December sales stood were valued at €3,897mn (€4,030mn in 2019), with orders received at €4,150mn (€4,370mn), and adjusted EBITDA (earnings before interest, taxes, depreciation, & amortisation) was €448mn, or 11% of sales (€509mn, or 12.6%).
In Q4 2020, Metso Outotec sales were worth €977mn (€1,087mn), orders received valued at €1,304mn (€1,045mn), and adjusted EBITDA was €103mn, or 10.6% of sales (€138mn, or 12.7%).
Commenting on Metso Outotec’s full-year 2020 and Q4 trading performance, company president and CEO Pekka Vauramo said: “Our overall performance in 2020 was good in a market environment affected by the Covid-19 pandemic. Our annual orders and sales were organically, only 5% and 4% lower compared to 2019, despite restrictions and limitations impacting our customer industries. The profitability of the Aggregates and Minerals segments was healthy, whereas the Metals segment, where volumes were severely impacted by the pandemic, reported a loss. This is being addressed in the ongoing turnaround program with results to be seen during 2021.
“In the fourth quarter, we saw an uptick in orders received in both the Minerals and Metals segments and customer activity improved in the Aggregates segment. The strong order intake at the end of the year provides good support for early 2021, and we hope to be able to gradually return to normal with the easing of Covid-19 and related restrictions.”
After its outbreak during the first months of the year, Vauramo said that the Covid-19 pandemic continued to affect Metso Outotec’s end markets and customer operations throughout 2020. He said that the most severe impact was seen during the second quarter, after which the situation stabilised and remained largely unchanged for the rest of the year. He emphasised that the most significant impacts resulted from restrictions on workforce mobility and limited access to customer sites. Vauramo said that Metso Outotec’s operations were running with additional health and safety measures and without major disruptions since early June.
Metso Outotec’s president and CEO continued: “The aggregates business, which faced the most rapid and negative impacts during the second quarter, saw market activity normalising towards the end of the year. In the minerals and metals markets, decision-making, as well as commissioning related to bigger investments, was hampered by mobility restrictions. However, positive news around Covid-19 vaccine development and high metal prices activated decision-making in the fourth quarter and resulted in a strong order intake for Metso Outotec. The services business continued to be affected by limited access to planning, preparing, and carrying out maintenance and modernisation work at customer sites. The demand for spare parts and consumables continued to be good, supported by healthy utilisation rates at mines thanks to high metal prices.”
Vauramo said that after the Metso Outotec merger was completed on 30 June 2020, much work had gone into carrying out the integration, realising the synergies, and laying out the future direction of the new company. “We proceeded swiftly and efficiently on all these fronts during the second half , and the initial results were visible already at the end of the year. The organisational restructuring is almost complete, and we reached a run rate of €65 million cost synergies by the end of December. In addition, the first revenue synergies have been achieved and booked in the order intake of 2020. Several actions are still ongoing and will be finalised during 2021.”
Vauramo stressed that an important milestone for the new Metso Outotec company was the launch of its strategy and financial targets in October 2020. He continued: “Metso Outotec’s purpose is to enable sustainable modern life. Our aim is to be a top-tier supplier of products, technologies, and services in the aggregates and minerals industries and a top financial performer. The strategy is being implemented through four priorities: integration and financial performance, customer-centricity, sustainability, and performance culture.
“These priorities will lead all of us in our everyday work and will generate value for all our stakeholders. I am confident that we have the right people, the best knowledge, and a value-adding service and product offering to achieve the position we are aiming for. The recognition of Metso Outotec ranking 8th on the list of the world’s most sustainable companies proves that we have a strong basis for future development. I want to thank our entire personnel for their efforts in completing the merger and together building the new company in 2020.”