john quinlivan president, flow control business area · pdf filejohn quinlivan president, flow...

© Metso© Metso

Performance and growth opportunities

Metso Capital Markets DayJune 1, 2017

John Quinlivan President, Flow Control business area

© Metso© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area2

Solid performanceWe reacted to the market and secured profitability

More opportunitiesOur markets are attractive with manyopportunities emerging

A time for growthOur strategic initiatives willbroaden our base for sustained growth

© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area3

Metso is a leading flow control solutions provider in many industries

1) Q2/2016-Q1/20172) March 31, 2017

We help our customers improve

operational efficiency, increase

profitability and reduce risks

Sales¹: EUR 642 million

Personnel²: ~2,600

~24%of sales

~22%of personnel

~22%of orders received

Orders received¹:EUR 613 million

Valves 84% and pumps 16% of the business area’s sales

40+ Service centers 400+ Field service experts

© Metso

Flow Control valve business rolling 12-month EBIT-% development vs. peers*

Valve business rolling 12-month EBIT-% development vs. peers

Flow Control valve business rolling 12-month sales development vs. peers*

Valve peers

Metso valves

Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area

Our performance has been resilient in a challenging market

4

Pumps business

Metso shows signs of improvement in sales along with a highly profitable business compared to peers

90

100

110

120

130

140

150

160

Metso valves

Valve peers

Indexed (Q1/2011 = 100)

Valve business rolling 12-month sales development vs. peers

Peers include Emerson (estimated Valves, Actuators & Regulators, excl. Pentair Valves & Controls), Flowserve (Flow Control), Crane (Fluid Handling) and Velan.


Growth results in a very strong bottom line within our operational model

We have tightly managed our operative costs and capital expenditure

Flow Control rolling 12-month sales and adjusted EBITA %

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

100

200

300

400

500

600

700

800

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2011 2012 2013 2014 2015 2016 2017

Services sales Equipment sales Adjusted EBITA, %

EUR million

Sustained level of high performance

© Metso© Metso

29%

22%18%

18%

13%

Oil & gas (mid and downstream) 29%Petrochemical and chemical 22%Pulp & paper 18%Mining 18%Power and other process industries 13%

Diversified sales mix with large share of services is our strength

6

Sales¹ by region Sales¹ by industry

33%

31%

15%

8%

7%6%

North America 33%Europe 31%Other Asia Pacific 15%Africa and Middle East 8%South America 7%China 6%

1. Q2/2016-Q1/2017In the revised split oil & gas includes oil & gas production, LNG, transportation, refining, as well as industrial gas. In 2016 annual report combined total oil & gas was 51%.Power and other industries includes among others power, geothermal, bioenergy, water and waste water and food processing

Sales¹ by type

61%39%

Services Capital


Markets we serve are showing signs of recovery

Quotation activity on oil and gas projects has gradually improved

Higher investments in pulp and paper projects

Customers have clearly increased their MRO* spending both in valves and pumps

Global market drivers Recent development

Our strategy is to capture new industries with new growth drivers

Flow control end markets have strong long-term growth potential

Oil and gas midstream and downstream investments

Chemicals and petrochemicals investments

Pulp and paper investments

Mining investments

*MRO=Maintenance, repair and operations

© Metso8

Our target is to grow faster than the overall flow control industry

We create new opportunities in attractive industries

We are well positioned to capture MRO* business

We have a strong platform that can scale up to deliver profitable growth

We build on our extensive knowledge and presence in services

We grow through many channels to market

We renew our product portfolio

We further enhance our operational excellence

We improve customer experience and service level

*MRO=Maintenance, repair and operations Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area

© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area

We grow through many channels to market

9

We complement our strong existing sales network and accelerate sales footprint expansion

Our strategy is to:

1. Grow through multi-tier channels2. Grow the OEM customer base3. Develop the industry-specific partner network 4. Expand the pump sales network

Our portfolio is attractive to new channel partners

We collaborate with our customers and partners to further develop our product portfolio

We improve our customer presence and service levels

We expand our portfolio


We have extensive knowledge and presence in services

10

Optimized service footprint

• We utilize our installed base information to assist customers in optimizing their flow control assets over the life cycle

• We provide value-adding, performance-improving solutions for our customers

New service models

More insight from installed base data

• We take full advantage of our 40+ service center network with over 400 field service experts available globally

• We developed new tools and processes for plant shutdowns. • In 2016 we managed 100+ shutdowns

and turnarounds globally• Digitalization: We are implementing global field service

management systems in 2017


Continuing to renew our product portfolio

11

Neles BWX ® butterfly valve customization

Neles NDX® valve controller releases

Jamesbury ® ball valve renewal

Neles ® globe valve expansion

Metso slurry pump expansion and renewal

We improve our competitiveness with engineering to value, improved time-to-market and agile processes

© Metso

We are developing our tools and processes to better serve our customers and partners

Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area12

By utilizing well-organized front-end processes and toolsBy upgrading the sales network and implementing customer satisfaction programs

By improving our valve selection and configuration capability By optimizing order execution through the entire supply chain

By improving our processes and developing new digital tools for EPC project business

We improve customer experience and service level

We expand our capabilities through digitalization

We manage complexity and reduce lead-times

© Metso

We are well positioned through our global operation footprint to optimize cost and service


Continuous HSE development

Strong gross profit throughout the cycle

• Utilize and flex capacity in all valve and pump plants globally

• Share knowledge in engineering and manufacturing execution

• Enhance project execution to improve profitability

• Confirm strong safety culture in all functions and organization levels

• Capacity adjustment to market demand

• Lean model in all sites • Global order management

development to support growth

• Risk observations, safety conversations, HSE audits

Defending our product margins

• Continue cost management• Partner with key suppliers in India and China• Expand our operating footprint in India and China

• Continued procurement savings• Global procurement model

implemented• Supplier quality development

2015-2016 achievements Current priorities

© Metso© Metso Metso Capital Markets Day 2017 | John Quinlivan | President | Flow Control business area14

We expand our growth opportunities

Solid performanceWe have a track record of delivering profitability and we are well positioned for growth

MoreopportunitiesOur markets are attractive with many opportunities emerging

A time forgrowthOur strategic initiatives will broaden our base for sustained growth

Appendix

© Metso

Global refinery capacity2

0

20

40

60

80

100

120

There are more opportunities in process industries horizontally - We have built a flow control platform with a strong position in a number of niches


Global base chemicals demand3

Global O&G CAPEX1 Global pulp and paper capacity4

1. Morgan Stanley, Rystad2. GlobalData3. IHS4. Pöyry5. Metso analysis

Global mining CAPEX5

0

100

200

300

400

500

600

Paper

Pulp

Million t/aUSD billion CDU bbd

0

200

400

600

800

1000

0

100

200

300

400

500

600

Mmt

0

50

100

150

200

250

USD billion


Our operations footprint is modern and geographically well-spread

Slurry pump assembly

Valve technology center / supply center

Sorocaba, Brazil

Vereeniging, South Africa

Vadodara, India

Helsinki, Finland

Horgau, Germany

Shanghai, China

Chung-ju, South KoreaMetso Park, Alwar, Rajasthan, India

Sala, Sweden

company/metso metsogroup metsoworldmetsoworld metsogroup

www.metso.com

john quinlivan president, flow control business area · pdf filejohn quinlivan president, flow...

Documents