Metso Oyj (HEL:METSO)

CMD 2020

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Nov 11, 2020

Hello, and welcome to Metso Autotech's 1st ever Capital Markets Day. I'm Juha Rauvejarend from Metso Autotech's IR. And with me here in Helsinki are members of our top management team, and we are excited to introduce you to Metsoe AutoTech. We are now some 4.5 months into the merger, and it has been a really fast start for the company In terms of getting to know new colleagues, setting up targets and strategies, putting organizations together, serving our customers with new combined unique offering and so on and so on. And we have done everything Under COVID Related Limitations and Restrictions. We think that we have prepared An interesting and exciting program for you today. So let's check out our agenda. We will start momentarily with presentations by President and CEO, Pekka Vauramo and CFO, Eeva Cipila. Those will take together some 60 minutes, after which we will have Q and A for them both. Then we'll take a break for 10 minutes, after which we start our deep dive into our industries. 1st will be aggregates presentation, which takes some 60 minutes as well, after which we will have questions. Then another break, And we will close with Minerals presentation followed by Q and A. And then about 4 p. M. Finish time, we are ready to wrap up and close. And our presenters today are here. So President and CEO, Pekka Vorma CFO, Eeva Sipila And the industry presentations, we will do in such a way that we'll have people who are Responsible for both equipment and aftermarket side. So Marco Simula, aggregates equipment. He will discuss Aggregates with Sami Takaluama from Consumables and Marco Teras Vazara of Services and then Stefan Kirsch We'll talk about Minerals together with Marco and Sami. This is how we'll run the industry presentations. As this is a fully virtual event, questions can be asked through the webcast. So whenever you wish, please type in your question. I'll collect them and present them to speakers at Q and A. And a reminder, we will be making forward looking statements during this presentation. With these opening remarks, I think we are ready to start. Once again, thanks for joining us today. We appreciate your time. We hope that you find our story interesting and compelling. And what a better way to start than start from the top. So it's my pleasure to introduce President and CEO, Pekka Vauramo. Good morning, and welcome to our Capital Markets Day. Really pleasure to be here and Talk about our strategy. We are 4 months now, 5th month now into new company, Metsoe Auto Tech. And day 1, we started to work On a new strategy for a new company. We started, of course, from very basics Since we are a new company, this is not Metso, this is not Autotech, this is Metso Autotech. And we started from the purpose. Our businesses are driven very much by the megatrends. And therefore, we felt that this statement, enabling sustainable modern life, suits very well in where we are. This is an exciting purpose statement for ourselves in the company. I think it tells very well to the external world as well, why do we exist and makes us an interesting company. We, of course, worked on our vision as well, and we have envisioned 2 parts. We want to be customers' number one choice for sustainable use of natural resources. So this is something that is very important. When we move on in this presentation, we talk about customers, we talk about sustainability as one of the business drivers for and main drivers for our business in future. In the second part, we wanted to highlight that we shall deliver. We shall deliver to our stakeholders, all our stakeholders, and we do it in a safely manner. It's important for everyone, of course, safety, but it's important within the industries That we serve. So these are the really the basic things that we went through as a management team to get the strategy work going and set the scene for ourselves. On a one pager, Our strategy is to deliver a Tier 1 company. That's what we are committed to. The megatrends, they are supporting They are the growth drivers and will guide our developments. We have defined top 1 Tier 1 priorities, top priorities, as we call them. And they very much suit in the environment where we operate. They are a good match with the megatrends. And they are also addressing is, of course, important part of our sort of medium term actions and activities, and we have had a good start in that one. The financial performance with the targets that we'll review shortly. Integration synergies, both revenue and cost synergies, will take us great deal towards Tier 1 financial performance. But there's more things that are required for that one. Customer centricity, we feel that there is more potential in becoming more customer focused and more knowledgeable of what our customers truly want from us And how do we perform with our customers when we provide our services and deliver our offerings. Sustainability. We know that climate change And global warming emissions, they are the topic of the society. It's getting to the point that global warming is threatening the existence of life on this Earth unless we take action. And we commit ourselves to take strong actions and leadership in that area in our industry. We are already A great deal into that direction, but we shall do more. We are forming a new company. New company needs a new culture, culture which is not metso culture nor Autotech culture. It needs to be metso Autotech culture. We call that performance culture or Tier 1 culture. It will be the way how we work in a company. The values that are stated here on the bottom of the slide, they guide us in building the culture. And the culture Buildup has been started already. We will do it bottoms up. We will ask from people a question from our own people a question. What kind of company we shall be in order to achieve our ambitious targets? And the strategic targets are here. We communicated this about 3 weeks ago already. An adjusted EBITDA margin of more than 15% over the cycle. This means that on top of a cycle, we shall be Performing better than 15%. And at the bottom, we shall be more recession proof than neither of the companies have been in the past. And integration synergies, both cost and revenue synergies, will help us to get there. But like I said, we need to also develop our businesses in other areas. We also want to distribute more than 50% of our earnings per share As dividends to our shareholders, this is important to those stakeholders. We want to maintain our investment grade rating, and this is, of course, important and required for our future development, be it then growth actions for M and A in future. Last but not least, we are committing ourselves to maximum 1.5 degree global warming. And this is a commitment that we are serious about it. We have already Approved science based targets by external organization for ourselves, and we start to follow those things And have already started, in fact, actions along those lines. Tier 1 priorities will be guiding our work. Many of these will be, in fact, implemented With and through our business areas. That's the way how we drive our business. We are not acting centrally. We are acting decentralized way. And you will see later on today, when my colleagues are presenting the businesses, these things will be reflected in the actions and activities as they go through their businesses. But culture truly is something that we will be driving from the group. This is something that unites us and makes us to act as one. We have already started to work. We have taken the first actions to integrate the company. But the first actions, as you might understand, they are fairly mechanical by nature. The true integration only starts when we start to act as 1 and when we act as 1 in a way that takes us towards achieving our ambitious goals. We start All this work from position of strength, and we have many of them. We with the combination, we have a wide Fereng. We are covering the value chains that are relevant for us very well. We have offering for every stage of and we have process knowledge, and we have technologies that are required to further develop our offerings in this area. We are also focused now with all the changes that we have made. Our customer base and our closeness to our customers in world markets makes us a strong service provider for the industry. And services will be one of the areas that we will highlight in our actions and activities and development in future. Our technology and R and D investments, about 100,000,000 euros a year, they are probably the biggest ones in this industry as they relate to that those value chains where we are involved. And we have the scale and also the financial position to take those steps and actions. We have a new organization in place. Organization is very much focused. It's a decentralized Organization, we drive our business through business areas. They have the profit and loss responsibility from supply chain towards the end customers. There's nothing that goes across them. They are in charge of offering go to market models, if they decide not to use our market areas for that one, they are free to do so for good reasons. And they're responsible for R and D and those developments, also the investments relating to them. Market areas, on the other hand, have an important role, and we have 8 of them altogether in the group. Previously, Metso had 13 percent, Autotech 10 percent, so now we are down to 8 market areas. And this is, of course, one source of the synergies that we will realize. Customer service, customer relationship is, of course, natural Responsibility of market areas and sales management and providing the administration for local operations and subsidiary companies in about 50 or so countries where we operate directly. Global functions have a role where we can create scale benefits. And these are primarily either strategic, Capital allocation issues or really areas where we can provide clear benefits of scale. We share best practices through them. We provide tools and, of course, make sure that we operate efficiently wherever we are. And we have 4 of those global functions altogether, and heads of them are represented in the management team. Our portfolio is very much characterized with strong aftermarket, both presence but also It's a different opportunity in different businesses. In aggregates, 35% to 45 percent is the potential that we have in aftermarket. We are not there today. Exactly in aggregates, the minerals, 60% to 70% potential of the sales and then in Metals, 30% to 40%. And we are not there either in Metals. But after sales and service opportunities is something that we always keep in mind, for example, when we develop our company into the future when we consider acquisitions or other development actions. That is the number one thing that we look Into Cosit provides us the profitability and resilience over the cycles. Maybe some commentary here on the numbers because the ones in the bottom differ quite much. We have the biggest potential in our Minerals Business, 60% to 70%. And then secondly, in Aggregates. But aggregates is somewhat limited towards for us because half of our business we do through distributors And service and aftermarket is primarily the business of the one who has the end customer relationship, and that's normally with distributors In many cases, with distributors in aggregates. Therefore, our volume exposure is limited, but we are getting really the interesting part of the potential, which means spare parts and consumable parts out of it. Metals, It's a lower aftermarket, but there's development potential. And sustainability is one of those areas that will provide Through modifications and upgrades, potential in future for Metals aftermarket. As said already, we'll emphasize services and products in our future. We want to do this one because we shall reduce the risk exposure that We have had in the past on projects. So therefore, these two things are will have a priority there. It doesn't mean that we walk away from projects completely, but we want to deliver more standardized products into the projects Which we participate. And this will guide our product development, our R and D. For that one, we do need the solid basis in technology so that we can implement those things that are required. In services, We will reinforce our presence in service intensive businesses. I think it's important for us and our resilience future. And we will grow, of course, services in our own installed base, but we will go beyond as we have already started to do so. Here a picture, by the way, it's a picture of a locker track. A locker track that this size of a locker track has been designed so that it fits in a container. And that, in my opinion, captures what the product can be or and what it should be. It is something that we have thought through that how do we deliver it to the customer. And as it fits in a container, it arrives safely also in Same condition and shape that it left the factory. But the product, since it's been pre engineered, it does have also pre thought supply chain And it does have the aftermarket side. The spare part selection is available. The product catalogs and manuals are available. The training packages are available. So this is the product model towards which we shall walk in all of our businesses in future. We have taken actions because of the performance in the Q3 in our Metals and Recycling business, we then ended up delivering loss in the Q3. And therefore, I mean, with the targets that we have, it's evident that we will not continue with metals as it is today. Therefore, we said that we will initiate immediately turnaround program, which we are currently Planning, and we will be then later on communicating about the actions and activities as we move on. We are clearly focusing on turning around the different businesses inside the metals. And target in the metals Overall, it's to achieve 10% adjusted EBITDA level in those businesses that we then continue to develop. But that activity is currently being planned, And we will, of course, communicate about further actions then once we're ready with that one. We are also told that we are looking To divest our recycling business. Recycling business, which has been part of Metso's portfolio for a number of years, But when we looked at the business and the growth potential and also the synergies with the rest, we noticed that there's not too many synergies. And on the other hand, to pick up global scale within the current Metso Autotech, it would be challenging. And there's certainly a better home that we can find for recycling business. So that is something which is work in progress as we speak currently. The core industries where we are, they have a solid growth outlook. This data is based on externals. This is WoodMac Projects data evaluation where these numbers are coming from. And we have more or less similar growth picture in all of our businesses during the next 4 or 5 years, 3% to 6%, 4% to 6%, depending on business that we talk about, and this is now on the capital equipment site. So this provides the basis. Our industries are of course, they are cyclic industries, and we will see ups and downs on the road, but that should be the average growth rate based on this data source. We are exposed in a very balanced way with different metals and minerals as well. However, the 4 biggest ones, they represent for 80% of our sales. They are not growing exactly in the same way. Really, the traditional the major metals, coppers, iron, gold, they tend to grow sort of at somewhat lower rate. But there are interesting dynamics happening inside of these metals. I mean, copper, we know more copper is required for electrification. Therefore, I mean, the supply balance will, of course, swing between oversupply and shortage. And currently, the shortage is expected somewhere by 2023. And that is, of course, something which is even a shorter term potential for us because that capacity need to be built before we hit that time point. In iron ore, the overall growth is not that great, but interesting dynamics inside The steel industry is changing the way how they produce steel, and demand for pellets is, in fact, increasing in short- and medium term Done fairly rapidly, and that is, of course, something that is at the core of our Metals business. Gold, more balanced outlook, but we, of course, know that gold demand, especially with the peaks as we are currently experiencing. 1 of those peaks, the demand and investments into gold is very active. But then there are these emerging battery metals, and I'm sure we will see more metals coming into this picture because battery technologies are changing. And here, the growth figures are totally different from that one. And to add to this one, at one point Closer to 2023, the current generation of, for example, electric vehicle batteries, They need to be recycled. And when that recycling comes in, we have and we will maintain, despite of divesting our recycling business, We still have in our metals business relevant technologies to recover these metals and recycle these metals. So that is an opportunity that we do see sort of medium- to long term in addition to prime production from the mines. Sustainability. Two parts in sustainability, the way how we look at. We have a footprint. Footprint is what do we cause in our own operations in our own supply chain and in logistics that we do, including our business travel. So that is the footprint part. Handprint, on the other hand, is the one what we deliver to our customers and what do they mean in terms of improvement on either energy usage or emission or water efficiency or recyclability, circularity or safety. And already today, our handprint is bigger than our footprint. And we, of course, want to develop and go far beyond where we are today. Our footprint. We'll continue to reduce our footprint, including supply chain, including our suppliers. We will introduce incentives already beginning of next year for management on our footprint side of it. This area is sort of very rapidly developing area. Therefore, we were not able to come up with sort of a handprint Incentives at this moment. But these targets that we have set ourselves, they are science based targets, And they have been accepted, approved by an external organization, and those are the ones that we will be measuring ourselves against. So this is a commitment that we'll make, and there's not so many companies that have given this 1.5 degree commitment. There are further opportunities. We know that digitalization hasn't gone away. The need for it hasn't gone away. In fact, the recent or current pandemic has shown that and probably proven also the business case for many of our customers, for digital solutions to monitor the equipment, operate it remotely, To provide technical services back up in digital manner because sometimes visiting customers is restricted as it is still in some of the mines. We will continue through our business areas to implement these digital solutions. We don't anymore have a digital development taking place in the group. We feel that the businesses, they know what the business model needs to be and what needs to be developed. But they will, of course, BP then fully responsible for the results, but also responsible for investments going into this area. You will see this digitalization coming through in my colleagues' presentations. Summarizing my part of the presentation, this opening speech really, I Feel that we have a strong strategy, solid strategy, unique offering, and we will and we shall become customer focused. That's important for our services. We are exposed and continue to develop our exposure in growing industries with very focused portfolio. We are in sort of aggregates value chain and metals production value chain, 2 value chains that we cover, Two value chains that are synergistic with each other. That's important. That's how we want to stay, and that's what we want to further develop. We emphasize services. We emphasize products. They are important. We will not abandon projects, but we will deliver more standardized products into these projects rather than engineering everything and tailor make everything for the projects. Sustainability, one of the key drivers from the megatrend side, and we are really In the middle of that one, when we look at both aggregates value chain and metals production value chain. And we are committed to delivering strong financial performance. So with these words, welcome again to our Capital Markets Day, and I will hand over to Eeva Sipyla. Eeva will Go through then the financials. Thank you, Pekka. And as we mentioned, Eeva will be next, so we'll stay in the group level discussing financials. And a reminder, you can ask questions by typing in to the webcast screen, and we'll take questions to Pekka and Eva after Eva's presentation. But here she is, CFO, Eeva Sippel. Good morning or good afternoon on my behalf as well. I have three topics I want to discuss with you today. Firstly, our immediate priorities prior and post the closing. Secondly, I want to discuss our financial targets a bit more in detail. And thirdly, I thought I would open up a bit our thinking on portfolio and how we want to create shareholder value. So moving to the first section on what We have been busy with before and immediately after the closing. So obviously, liquidity and the funding has been One of the first things. And we worked on liquidity already well before closing in order to be ready. And hence, we've sort of had a very good and stable situation now in the past months. Basically, at the end of September, we had roughly EUR 500,000,000 of liquid assets on our balance sheet and, in addition, an access to available liquid funds of almost EUR 1,300,000,000. With liquidity in a strong position, we've also then, during Q3, after closing, move to cost savings also in the area of funding. We called back the hybrid that Outotec had launched some years back immediately in July. In September, we repaid a bond issued by Outotec earlier. Both of those products had an interest cost that was way above what Mettolotec is paying. And the debt that we have today, The average interest rate cost is just a bit higher than 1%. As we now then move forward, we obviously when you look at the maturity profile picture on the right hand side, We do want to extend and lengthen maturities in the coming months and quarters. But overall, I think we're very satisfied with the level of the KPIs of our balance sheet that you see on the lower part of this slide. Another key topic for us, obviously, immediately after closing has been around integration and getting a swift start to the integration In order to be able to then also realize quickly the first synergies has been very important. As you may remember, 1 month into the closing early August, we came out with tougher targets on our synergies. Basically, we from the original €100,000,000 of cost synergies, we raised the target to €120,000,000 And not only that, from the original time line of 3 years, we went down to 1.5 years. Basically, we expect to deliver €120,000,000 of cost synergies as a run rate by the end of next year. And just a couple of weeks back, when we came out with our Q3 earnings, we were able to announce that the run rate achieved by the end of September was €31,000,000 And we are on track to deliver €50,000,000 run rate by the end of this year. So we are very well on track with the cost synergies. On the revenue synergies side, we've kept the original €150,000,000 of additional sales target. Obviously, in the current pandemic environment, we will need to see a bit on how the market develops to comment more on that. But this is a number that we are comfortable with and will work sort of with the platform that we have built. A third key topic for us throughout The integration has obviously been around the business specific improvement projects. Those of you who followed Metso remember very well that we've been talking for the past couple of years already on quite a long list of actions really to sort of fundamentally improve the profitability levels of our business. And my colleagues, the business area presidents, will come back to concrete Examples on their businesses in this. But on a group level, I would perhaps want to sort of highlight and group them into Three headlines. Firstly, supply footprint. It's been an important part Of our work so far, only one roughly 1 week ago did you see our public announcement on Finding a conclusion at and South Africa with our Ferengen operations. And we've had many announcements earlier on, all with the intention to improve the productivity and efficiency of the footprint that we have. And I think our global footprint has really Well made through the sort of tough test the pandemic has put us all in this year. We have been able to deliver in very difficult circumstances, thanks to our global and efficient network. Obviously, the better our network, better our supply footprint, the more efficient we are also net working capital, something that's important to contribute to our financial targets. The second headline of our business specific actions is really around customer centricity. Obviously, it's all around availability, better on time performance. That makes our customers happier, but it also makes our balance sheet leaner because, again, we are reusing demands of working capital required. And thirdly, R and D and Engineering. There is a lot of efficiency we can gain by product standardization, standardization. But at the same time, as we know, as MetsoToTech, are the biggest spender in R and D in our industry, It's not only important to follow the amount of money, it's actually also to follow how well we spend it. And I think over the past couple of years, we've built a very solid model of roadmaps and gates, where we really sort of do our utmost to ensure that all the money spent is spent in a way that does deliver true value to our customers. We're very happy with that toolkit and way of working. And obviously, it will support very well also the metals So these three things is something that really has been high on our priority. And obviously, we've had businesses which are less impacted by the integration. Our Aggregates, Consumables businesses have really truly focused on the business specific improvement actions throughout this year. Then again, areas that have also been part of integration. They also have areas that fall into this bucket and have been really part of continuing activities around sustainably improving our profitability. Moving then to the second section of my presentation on the financial targets. So our President The CEO already mentioned them. They were also published a few weeks back. Pekka talked more in detail about sustainability 1. I assume the dividend 1 is pretty self explanatory. So I'll focus my comments today on the 2 first ones on the adjusted EBITA target as well as then the investment grade rating target. And as you see from the graph on the right hand side, so I've tried to illustrate that using our pro form a last your starting point prior to the merger and then sort of calculating the actions we have on top. I think this bridge illustrates very well why we are comfortable with the 15% target. We think we can deliver over 15% margins over the cycle with the actions that we have not only planned, But to a large extent, we have already ongoing. Now the biggest step, obviously, is the cost synergies, the €120,000,000 I just discussed, where we are sort of €31,000,000 run rate on behind us. That will really take us a big leap towards the 15%. But in addition, the business Specific improvement actions are very important. They are the second big step that we need to take. And as said, those actions have been practiced have been sort of worked on for quite some time. And as we're Every step we're able to take, obviously, enables certain new actions to follow. And We're comfortable on that journey that we have set ourselves in earlier. Then clearly, revenue synergies are a part here. Now due to the pandemic situation I've used as a base just the same volume that we had in 2019. The EUR 4,200,000,000 makes the illustration a bit more simple, but I think also is probably a realistic base on where we sort of come out of after the pandemic, hopefully, in the coming couple of months. The revenue synergies will certainly contribute, especially as their mix is a good mix, very aftermarket Focused mix, obviously, leveraging the installed base of OTOTEC in there. But many sort of interesting opportunities that will be discussed later today. And then finally, on the portfolio side, The announcement of recycling does contribute to us reaching the 15% target in a sense that cycling has been clearly on a lower level as we have published from the numbers, so around 6% adjusted EBITDA last year. So with that, I hope I've been able to sort of open up a bit more in detail what takes us to 15 And above and really, as I said, it's the 2 big steps that are worthwhile remembering, the cost synergies and then the sort of group of business specific actions. Moving on to maintaining investment grade rating. So obviously, you know very well that this is very much in with the profitability targets. We were thinking about a specific balance sheet target originally, But then felt that maybe an umbrella expression like this, which actually encompasses all the key ingredients we want to work quiz is actually a better way to in a simple and efficient way communicate to you all what we want to achieve. So obviously, we want to improve the profitability. We want to ensure that we make cash out of it. So it's all about net working capital efficiency in our case. And then thirdly, we want to ensure that the level of debt is at a reasonable level and allows further development of our company. Now it's good to note that we have sort of Been quite busy on the capital expenditure side in the past couple of years in Matso due to sort of expanding our footprint in across the globe. And those investments, be it in India or elsewhere in especially in consumables, are pretty much sort of behind us. And now we're more in the phase of leveraging and taking the benefits out of the investments made. And of course, that then supports for the cash flow generation going forward. And I think just to name a few of the key KPIs that we will be monitoring and measuring ourselves on Under this topic, it's really liquidity, our overall debt to EBITDA, but then also our free cash flow generation visavis Our debt levels. So this, as I said, closes the second section on the financial targets of my presentation. And I would now like to move forward to open up a bit our thinking on portfolio and shareholder value creation. Now when looking at portfolio, we've sort of I would We have this sort of rather simple matrix, but it encompasses pretty much all the elements that we look at. And we've used this to analyze what's the sort of best future for our recycling business. And we'll also sort of continue to use this as we sort of analyze the metals business and what's the sort of best fit and best portfolio for Mazzo Othetec going forward. Obviously, it's about the addressable market. We are in a growth business, and we want to be there also in the future. So we want to see that there is an addressable market that enables growth for us. We want to be honest to ourselves, look ourselves in the mirror and say that, do we have the capability to win in this market? And then thirdly, Of course, there are markets and markets. There has to be a fundamental opportunity to deliver profitable growth in the market for us to be interested. I mean, you've seen our financial targets. They are ambitious, and we do need to sort of make sure that our portfolio decisions are coherent with those targets. Now an important additional consideration is obviously synergy. We have created a company that is very focused around its core industries that are truly synergistic amongst each other. And this was one of the sort of one of the key criteria is why we felt that Recycling will have a better owner outside of Metsoe Auto Tech going forward, that we really can't generate enough synergy from that business visavisour Aggregates and Minerals Processing businesses. And then, of course, so the synergies are we can measure them in various ways. It's not always about the same customer. It's about the sort of the technologies, the platforms and that we share. But as I said, there has to be sufficient synergy that will enable us also then to keep focus in what we do. When we look at shareholder value, I think we're Very excited about the fact that we can work on several levers in the coming years. Obviously, it's about growth. We see this as a growing industry, and we certainly think that we can grow in this industry. Obvious priority at the same time is the delivery of the synergies. We know you will be measuring us on our performance on that delivery. Improving profitability, yes, that's why we have the ambitious targets so that we can measure ourselves against them, and we know you will be measuring us against them as well. At the same time, reduction of volatility. Whilst we are in a cyclical business and we will continue to be so, it is important that whatever we do with the decisions that we can impact on our portfolio, on our offering and how we do business that they reduce the volatility. And again, there will be some more concrete discussions on this topic later today. We want to be, from a balance sheet point of view, a company that has a solid strong balance sheet because that enables the further development of the business. And at the same time, that enables us to offer a competitive yield to our shareholders. So these six things are the levers that we believe are all relevant and all viable to us at Metso Auto Tech today and in the future. And coming to the end of my presentation, really, to summarize, we are I'm very excited about the platform that we have created with Amazso Autotech. This is an industry that is transforming through consolidation, digitalization and an increased focus on sustainability. And we have a platform that we can deliver results and value to our owners. So thank you on my behalf. Thank you, Eeva. And now we are ready to kick off the first Q and A session. And there's been many questions sent through the webcast, And I'll be throwing them 1 by 1. I'll start with ones from Klas Bergelind. Klas is asking about portfolio. So question about synergies and potential divestments. What do you think is really core in metals? And could there be further divestments on top of the recycling and the ones that have been announced already. Yes. We are, of course, now working on turnaround plan, and I would say that And what I mentioned about that the target for Metals Businesses in a turnaround is to show that they have potential to improve the profitability to 10% EBITDA level. And that is, of course, one criteria that we look into. Then, of course, another area is really the synergies with the rest of the group. We do have certain internal synergies in house that we need to critically look at before we decide anything like that in future. Another part is, of course, that what are the synergies that are visible and that we can realize when working with customers. And some of the metals Deliverables, they are at the same site where our Minerals business is currently present, And they, of course, are the most synergistic ones. But at this moment, I don't want to sort of be more specific. Like I said, I mean, We are currently looking into that one. We do have profitability as a main target for any future sort of consideration and the portfolio review synergy is then coming as the second one. Then Klas continues in terms of integration synergies. What kind of role Does the metals business play in that? Metals is, of course, I mean, it's a business That biggest, that peak has been about €500,000,000 over the past couple of years at about €350,000,000 in sales. And that business, by nature, is global, but the volumes in local markets are fairly small. For that kind of business to operate globally, it requires sort of bigger umbrella where it is. So metals can enjoy certain synergies from the rest of the group because of the presence. Then on R and D side, we are sharing certain facilities, certain resources, and those are, of course, The issues that we need to look into when we restructure the group and especially when we take further portfolio decisions then. All right. Thank you. Then we go to a question by Artem Tokarenko of Credit Suisse. And this is about culture. You talked about culture quite a bit in your presentation. How are the company's cultures different at the moment? And where do you see the major improvement potential? Yes. We've made several surveys on this cultural topic. And while we are a great deal similar companies, but there are differences. And this difference truly lies, I would say in sort of an autotec culture, more coming from targeting projects, Gearing up all the activities on projects, developing engineering into the project things, While Metso has been more on the growth of developing products and related services and selling them. And I think those do reflect in the cultures as well. And this is something that we will be working now when we developed the new culture. I know that it represents a certain change, but this is what integration is. Mean, true integration takes place only when we start to work jointly and together towards goals that are common and have the shared values in the company. So this is a change process, but I've been part of it before, And I know that it's a very fruitful once we've gone through that one. Good stuff. Aarthen continues. Could you please elaborate on the pathway of growing aftermarket share of sales in aggregates and metals towards your targeted levels? Why don't we Leave the aggregates part to the aggregates presentation, but maybe about metals aftermarket and growing that. Yes. I would also say here that currently, the turnaround program is more important than really focusing on just the aftermarket alone. But we need to understand fully what the business is within Metals, including those specific businesses, with their aftermarket is. And this is where we will drill down during the coming weeks now. And maybe to add to that, Pekka. So there is a sort of element of specialty modernization and upgrade work in this in these businesses that we need to sort of look into, but obviously very similar to what we do on the Minerals Processing side, Maybe perhaps more that type of work than perhaps spares and wears. It's a different type of a process, obviously. But as said, sort of there are clearly some similarities where we can sort of enjoy some scale. All right. Thank you. We take next question from Markus Almerud. What The revenue assumptions behind your EBITA margin target? Well, as I tried to illustrate in Through the graph, so we really haven't sort of started to speculate on when the market recovers Post the pandemic, we've really sort of made a sort of very hard effort to make that these are things that are in our control, in our hands. And as I said, I sort of used the reference of the 4.2 billion in sales that we had in 2019 as a sort of, I think, a pretty good sort of normal year indicator pre COVID, but not the sort of not at the top of the cycle, not at the bottom of the cycle kind of where we are. And again, obviously, sort of Our portfolio decisions have some impact onto that number as well. But I think that's a good ballpark. And as sort of we believe we can deliver 15% with those volumes. Additional volumes would, of course be great. Obviously, they can sort of make some actions easier. Then again, typically, in a sort of at the height of the cycle, There is perhaps more businesses that where the average margin is a bit lower. So it's not sort of 1 or the other. It's always a mix Of elements impacting. Okay. Next one comes from Maddy Singh of Bank of America. Continue with the EBITA Margin target. Your graph implies it can be well above 15%, Even close to 16%, why is the target at 15%? Well, actually, the target is exceeding 15%. So I think we should all be worried if it wasn't sort of if the graph didn't show us being clearly above 15%. That's really above 15% over the cycle. So That does mean that we should sort of be sort of without giving a specific number, but I'd say A head of 15. Thank you. Manu Rimpela continues on the margin target. Can you comment On the timing of the business specific actions to be fully achieved and how much of these have already been achieved during 2020? Well, I think there will be more insight into these in the later presentation. So maybe Juha, we can sort of pick up on this. It's still needed Later in the day. But as I said in my presentation, so many of these activities, especially in the supply footprint, are well advanced, and we have been working on them for a couple of years already. Then there are some areas on the customer interface side which are newer, but again, where actions are ongoing and have been ongoing throughout this year. So this is Sort of a progress that is there is supporting what we see already today, but we'll continue to Support where we want to sort of take the businesses. And continuing on the business specific actions, Victor Kogbury asks that, as you mentioned, Many of these topics were already discussed in standalone Metso. Are these new actions based on a new review of the whole portfolio? And as a result, have you seen more potential now than you did before the merger? In fact, the anything that's relating to the new portfolio, that's what we call synergies. Then We do have the business improvement actions in place in all of our businesses. They are separate to that one. And those were Also visible there on Eeva's EBITA bridge, those items. Then Anssi Roussy from OP Markets asks about 1.5 degree Celsius target. Is this more about your own operations? Or do you see significant changes coming in product portfolio or something like that? It includes both, definitely both. I mean currently, we are already net positive In what we do, we have some great technologies and offerings that we are able to reduce the emissions. And this reduction already on annual level is greater than our own footprint. But we will be working on both. I mean, working on our footprint, and we will first incentivize our organization to work on a footprint. And then, of course, we will move on towards the handprint side of it and into our offering. But like I said, this area is very rapidly moving at this moment. The measurements are developing. The standards are developing, and therefore, we wanted to put our foot on something that is a bit better in our control at this moment, I. E, our On footprint. Next one goes to Eeva and discusses net working capital and CapEx. You mentioned your ambition to gradually reduce working capital and CapEx. Do you have any sort of mid- or long term targets in relation to sales in mind? Well, I think when we looked at the sort of CapEx for the coming couple of years, we're more looking at it in absolute numbers. So I would sort of roughly guide on a sort of €80,000,000 or so level. And this really is Not so that we're sort of actively cutting on CapEx, but as I said, it's just a phase where we've sort of come to after a period of perhaps with more intensive growth investments on our footprint. And then when it comes to our net working capital, so There, as discussed earlier, I think we're sort of pretty comfortable on how we manage AR and AP. But really, the sort of inventory part has been already on the Metze side, a clear burden on our returns. And that really sort of resulting from the sort of rather complex supply footprint that we have also on the logistics side. So what we wanted to do is obviously impact the real root cause rather than try to sort of fix something on the financials part, but really impact The footprint and the logistics network and how we sort of move, transfer relatively sort of physically big things at the end of the day in many cases. And this will then all support in sort of enabling us to reduce Safety stocks, safety buffers, because, of course, we cannot compromise availability towards our customers. But as we are more confident in how we run our operations and we have shorter lead times within our sort of own end to end that will enable a sort of positive development on that inventory. And that really follows, but it's not sort of it's nothing that comes overnight, but it's just a sort of a lot of hard work going in many fronts. And so that's something that we're sort of mostly focusing our efforts on. And then as I said, because of the sort of current challenges, maybe you can speculate on estimate on The sales sort of market recovery, I wouldn't maybe want to give a percentage of sales. But as I said in absolute terms, We are working to improve the efficiency of our inventory. Thank you. Another one for Eeva from Erki Bessela. What would happen to your financing costs if you fell below investment grade rating? Well, I think the quick answer is that it would increase. And obviously, that's not something where We want to spend money because we feel that we have all the elements in place to be an investment grade company. Just the fact that we've done 2 rather significant transactions in a short term short time, acquisition of McCloskey into our aggregates business and then Mazzo Autotech. So obviously, as a follow-up of those two transactions, We have a bit more debt than we would like to have and hence the sort of focus now on sort of getting back to a level where we are comfortable and that hopefully the rating agencies will be comfortable as well. Next question is about acquisitions from Markus Almerud. What are your thoughts on Acquisitions, which areas are you keen to grow? Do you have any obvious gaps in your portfolio at the moment? I don't see us having really gaps, and that shouldn't be really driving our M and A But then, of course, strengthening our aftermarket capabilities and offerings is clearly an area where we want to be active in future. I think we have shown over the past few years Good steady development, not only on volume front, but also in margin side in our aftermarket. And that is very encouraging to see and that, of course, speaks for that there could be more opportunities for us in that area. There are, of course, some individual pieces of equipment that might be of interest. And always, relevant technologies that we could integrate into our products But I would say, 1st and foremost, aftermarket. Thank you. Next one from Antti Suttelin. It appears that the weakness in metals came as a surprise. What was the cause of this surprise? We have to admit that it was a surprise. The surprise was probably caused mostly by the COVID situation and the delay in project decisions. That is something which is truly beyond the control that we had. And as if we go back, I mean, the COVID started to affect the business end of March, April this year. So that was like 2nd quarter, and it looked like that business would continue On metal side as well, fairly resilient at that moment. But Q3, it became evident that because Any bigger project decisions, they tend to take longer time or new ones are not being prepared at the pace they would at normal times. And that is really the root cause of current situation where we are. Then of course, fact of life is that we are involved in metals in so many different technologies and type of deliveries. And at most time of the cycles, we cannot sort of see steady volume for all of these businesses. And this, of course, sets tough requirements for flexibility within our organization, And I don't feel we have all that flexibility in place. And therefore, we are now working on turnaround to see that which businesses truly have the potential to be part of the group and reach the target that I set. Next one comes from Magnus Kruber, And it's about 15% margin target. What kind of margin levels do you have in mind for your 3 different segments In order to reach the 15% at the group level. We are internally, I mean, we are working with sort of 15%, twenty%, 10%. Aggregates towards 15%, minerals towards 20% and metals, like I already said a few times, towards the 10%. So this is the mix of businesses that we have. And if you recall, I mean, our Aggregates business is about 25% of the sales. Minerals about 63% and remaining less than 10% is metals. So the 15% overall group target or exceeding 15%, it's a mix of these volumes and these targets. We see that there are actions in place in aggregates. There are actions in place in Minerals, and we are working on actions For Metals to get to that 10% level with businesses that we will then continue with. All right. Next up is Damian Diekrig. How much integrated are you on the production side of different businesses? There is integration, of course, Mainly in the old Metso site, crushers, screens, and that site is integrated. We are in our Minerals business. Elsewhere, we are mostly outsourced. So therefore, synergies are not sort of in house synergies, but of course, in our synergy targets, we do have targets set for our suppliers and supply chain. And that's, of course, when we merge our purchase volumes towards fewer suppliers in future. We will get those benefits. But there's not really other than crushers, I would say, where we are integrated. Then of course, if we take a wider view on that one, we have logistics, which is important part of important backbone to run the business. It's primarily our service issue, the logistics that we have in the company. Of course, we supply our capital equipment also through our logistics system. But that's where we have a lot of synergies. We have synergies also in our warehousing, warehousing of the parts That we are also restructuring at this moment, reducing number of stocking locations and that where we have most of the synergies. And then, of course, service workforce is being used with some limitations, but they are being widely used to serve our customers. So yes, we have integration points here and there, but not so much really in the factory level. Thank you. Next question is from Tomi Reilok. A little bit bigger picture question. Apart from the COVID-nineteen we are struggling at the moment, what are the biggest risks overall in developing the new company and reaching the targets? Well, I think an integration of this magnitude is always a challenge. As said, whilst we think we are well prepared and we have the actions in place, I think, obviously, for any sort of Risk question, one would have to answer that we need to execute, and we need to ensure that we build one joint team that can work in a harmonized way. So I would probably raised that topic. Pekka, anything you want to add? Yes. I would have spoken about the integration as well. I mean, Yes, we are taking the sort of performance culture very serious. It is really the strength that we will develop and for this company, this is something that we need. And it really means that only through culture, we will be able to act as one organization in a coordinated manner and deliver those things that we have committed to deliver. Yes, external world is full of risks, but I don't think I want to speculate with the next pandemic or anything like that Whilst we're still dealing with the first one. Okay. We take another one from Klas Bergelind. When you're working towards standardizing the equipment, I would assume this is easier in the product side of the business. But what kind of implication does it have to the project side of the business? And would it be much more difficult there? I think the opportunity lies in the project side of the business. If you look at what we deliver Into our projects. We are working very much in with customers to develop the flow sheet, to develop the process, the production process that customers do. Through product development, We can develop key pieces of equipment that go into this flow sheet. And this shall be our focus, really to understand that what are the market needs and customer needs and then develop product ranges of those key pieces of equipment that will then build the approach. And that's how we want to act. And the product, it means that it does it's pre engineered. It does have a supply chain. It does have the aftermarket offering along with it. And we can build the projects based on these ones. In future, we don't want to be involved in supplying steel and concrete, And that refers to EPC. We won't be fully able to avoid that in all of the cases, but we will be very restrictive what kind of EPC we target. Already today, most of the projects that we talked, they are, in fact, EPS type whereas refers to supervision type of activity. We want to concentrate on really those key pieces is where we can add most value to our customers. Next up is Robert Davies from Morgan Stanley. You mentioned the recent headwinds in Recycling and Metals, but What's the key driver behind putting these businesses in the Methode portfolio to start with? And has the recent disruptions really changed your view on the long term potential of these businesses? Or was the inclusion of those Discussed at all at the time when merger was planned. I think this was merger of 2 companies as they existed, and It was not sort of discussion of pick and choose at that moment. We looked at the bigger picture, of course, At that moment, the issues with recycling, I think I went them through. I mean, We looked at the synergies, and there were not that many. They had their own distribution. The customer industry is different, even though, yes, They are part of the metals value chain, but the connections were very few, very thin synergies in sort of a supply Saad. And then it leaves for a business like recycling only the admin part. And I don't think it's in today's World enough if the admin is the only synergy area. Then in the Metals, the headwinds are really, I So brought with the COVID. COVID, and that has, of course, highlighted the issues that there are inside the and we are currently working on that one and will conclude it very soon what the course of action there is. Maybe to finalize to Eeva's question about gross margins. Can you give Some kind of direction or level of the gross margin across the different segments, please. Well, it obviously varies quite a bit because our mix is really quite large. I mean, obviously, gross margin in a project which consists of €100,000,000 of equipment and various other services To spare parts is huge. And I think sort of what we've worked on very much is really to sort of work on the granular level, go to sort of what is The ability of this business to generate margin. And obviously, so the gross margin is Super important. Everything we've done in the supply footprint, for instance, supports that. So we measure it very closely. But rather than sort of giving a lame average that kind of doesn't sort of hit home to anybody, it's really about managing the businesses to their own optimal and then the sort of accepting the fact that what's good and even ambitious to 1 is kind of a sort of elementary for another business. But that's at the heart of what we want to provide to our customers. It's really an end to end offering that we have that all. So that's the sort of complexity we happily manage. Then Tomi Reiloh asks about services profitability. Can you give any ideas about that? And what kind of role does Services business and its profitability play in the 15% margin target to be achieved. Well, I don't think we want to go to sort of Other than the segment reporting level that we have, and I think that sort of customer focus in our segments is a sort of Good indicator for you really to sort of measure our performance. And obviously, aftermarket is hugely important. It is very important in Minerals, but also a significant opportunity in Aggregates. And I think when we sort of come to those Presentations later today, you will kind of hopefully get a bit of sense on what sort of what we are driving towards. But absolutely, Sort of on the group level, the fact that half of our sales come from services is very important for profitability, but perhaps even more on stability of earnings and reducing the volatility that we would otherwise space in the industries where we operate in. Yes. We had a slide there earlier on where we had the aftermarket potential. And even though we are not exactly in those percentages today as we speak, but they reflect also where we are in relationship to each other. And we can see that Minerals, we have Biggest aftermarket business at this moment in terms of in relative terms and then secondly, aggregates and thirdly, in metals. And of course, this is reflected also in segment numbers that we have reported. We, of course, it's not enough for us that we are profitable in service. We also need to be profitable in developing our CapEx part of the business. And this is something which is truly, I mean, when we when our aim is to deliver Tier 1 company, Tier 1 companies, they do have profitable CapEx business, equipment business, product business and very profitable service business. So that is the combination that shall go into Tier 1. All right. Thank you. We'll conclude our first section here, And that was the group level presentation. We'll take a break of about 10 minutes. So we'll continue half past the hour, and then we'll take a deep dive into our industries, starting with aggregates. See you in 10 minutes. Welcome back from break, and we'll start our deep dive into our key industries. We'll begin with aggregates, which will be discussed by Marco Simula, Head of Aggregates Equipment Samitaka Loama, Head of Consumables and Marco Teras Vazara, Head of Services. And a couple of words about these three gentlemen. Marco Simula joined Metso almost 30 years ago, and he has several Management positions in many of our businesses. He started to run or head the aggregates equipment 4 years ago. Samit Atalwama joined Metso 23 years ago, and he has also worked across our businesses and market areas. And he was appointed Head of Consumables 3 years ago. And Markku Terasvasara previously served as President and CEO of Autotech from 2016. And before that, he worked 20 years in Atlas Copco's mining business. So here they are, Hello. Good afternoon. My name is Marco Simula, and I'm really excited to be here together with my colleagues, Marco Terasvasara and Samitakaluama, Presenting today, the aggregates business. The picture you see right there is actually a Good description of aggregates business or one part of the aggregates business. It's a big quarry in Brazil, and it's very close to my heart actually. That's one of the First quarries that I have visited when I started to head the aggregates business. You may see also the on the top corner, the crushing and screening plant, which is then the core of our business. We are delivering together with my colleagues, we are delivering the equipment to crush the rock and then spare parts and wear parts in order to keep the plant running. Then I'll start with a little bit of view on where we are and what do we want to be. So we are the global leader in aggregates, crushing and screening solutions. Our we have been growing during the last years from 'sixteen to 'nineteen, our growth has been really solid. Our Aggregates segment has been growing total 14%. And of course, during these years, we have made some acquisitions. We have acquired Nielsen and Sohne, and we have acquired also McCloskey. And if you exclude those acquisitions, our organic growth within the period has been 9%, so solid good growth with this segment. Our aim is that we grow faster than our competitors, and we grow faster than the market. And We are predicting that the market growth long term growth of market is 4% to 6%, So we continuously want to grow faster than that. Profitability. We have today, we are not quite Where we need to be on profitability level, what Pekka was saying, we are aiming towards 15% EBITDA, adjusted EBITDA. Today, our situation is as Aggregates segment is 12% adjusted EBITA. Then if we look at our market position, where we are, we are number 1 globally, and we are number 1 in some of the main market areas. We are number 1 in North America. We are number 1 in Europe. But actually, we are number 2 in India and number 2 in China. And then in the rest of the world, we are number 1. Our aim is to be number 1 in all the main market areas and main markets. In products point of view product point of view, we are number 1 in most of our main product categories, not quite all of them, but most of them. We are number 1 in crushers. We are number 1 in mobile crushers as well as we are number 1 in the unit crushers. We are number 1 in mobile screens. We are not quite number 1 in the unit screens. We are number 1 in the Crusser Wares, and we are number 1 in Crusser Spares. So in most of the product categories, we are already number 1, and we aim to continue so and we aim to even improve our position there. And then we also want to be number 1 in customer satisfaction. We are measuring our NPS levels. And today, our gross NPS level is 42,000,000, so we are on a fairly good level. However, our target is actually on higher levels, so we are aiming to improve from there. Then Looking at our customers. So we have 2 customer categories. We have quarry customers and contractor customers. The quarry customers, we offer our unit machines, unit crushers, unit screens, also some systems and, of course, all the related for a very long time. So the investments are long investments, 20 year periods, 30 year period investments for our customers. Important drivers for the customers is cost per tonne. And the product that they are producing is high quality aggregates with high yield from high efficiency of the site. The customers are typically midsized customers or they might be very, very large customers having multiple quarries across the globe or across any continent in there. Then contractor customers. Typical contractor customers are actually a bit smaller customers. We typically sell more truck mounted equipment, mobile equipment and, of course, Related aftermarket services and consumables and wearables to our contractor customers. The contractor customers are Based or their work is based on projects. So their machines move a lot. They tend to have a project crush for a few weeks couple of months in single place or one place and then move to the next place to crush some more. So for them, mobility is really important. Cost Per tonne is really important. And many of our contracted customers are in the kind of a cold climate, Northern Hemisphere, cold areas and there, the seasonality effect is really significant. Then if we take a look at A little bit, the processes or the process crushing process, how it goes and a very, very brief look at what the products are that we provide to our customers. So the process you can see in the middle. We are our portion In our customers, process starts from design. So we are we have a lot of capable engineers, a lot of capabilities to help our customers to design good crushing and screening processes for themselves. Then we are in feeding, we make feeders. We are primary we make Primary crushers, secondary crushers, tertiary crushers, one way screens and washing systems. Then after how customer then has created or made the aggregates and maybe later on, there is need for recycling. And again, in the recycling of aggregates, we are we have some products for recycling applications as well. So our offering is complete offering for stationary crushing and screening solution as well as mobile Portable Crushing and Screening Solutions. And then maybe a few words about the services related. Yes. When we look at from service point of view, what we already learned is 2 main customer types. On one hand, we have the big quarries or the quarry customers, stationary operation, actually very similar from support point of view compared to mines. And then we have our contractors, often very mobile, going from one place to another. We also have 2 different means of supporting them. Quarry Quaffton typically would be supported directly from our own service team, while contractors, in many cases, are supported by our distributors. So there are different type of customers. There are different service approach. But what is still common for all of them is that service basics never go out of fashion. So our customers, Regardless of where they are, they need information. They need parts. And then it supports either in terms of Someone visiting site or as we have learned lately because of the COVID that we also have to be able to support them remotely. And that is a capability we have developed during the recent years, and I will tell a bit more about that coming forward. So I think we have a good installed base. We have good opportunities to grow. And actually, the means for us to grow is that digitalization is not only helping us to support customers When we have when we cannot visit them, but they actually enable a much improved support To install base and particularly install base that is not directly supported by us. Because of the remote monitoring, we actually have good knowledge of where they are and how they perform and how we can support them better. So In these words, I think I will more as I said, I will a little bit later develop this remote support a bit further. Then still one part of the introductory is going through our offering for different customer needs. So we have actually several different product brands in our portfolio. We have our Mezza products, which is then, let's say, the core of the offering, which is crushing and screening solutions with life cycle services. Then in addition to that, about a year ago or almost exactly a year ago, we added into our offering also the McCloskey acquisition. And McCloskey acquisition brought actually 2 brands for us, McCloskey brand as well as the Lippmann brand. And we are running those businesses as a separate entities and kind of a True different channel, true different offering, reaching different customer needs. So with McCloskey, we have mobile and Screening and Recycling Solutions. And with Liquon, we have heavy duty crushing and screening solutions. Then Jundson, an acquisition that we made in mid of 2018. There, we have heavy duty electric crushing and screening solutions for our customers. And then Sao Roy with the acronym of SRH, that's our mid market offering in China. So that's an acquisition weight. Originally, 75% of Saru acquired in 2013. And now in Fall of 2019, we acquired the remaining 25 percent of SAAR Roy. And that's fit for purpose crushing and screening solutions for our mid market offering. Additional to that, we also have a range of products that we are offering for as an OEM products for other manufacturers, And there is various different products that we are offering there. But the important here is that we have actually multiple different channels and multiple different offerings towards our customers' Different needs. Then I'll start to talk a little bit about growth friends for the future. And we'll start with China. The picture you see here is A highway built between Macau and Hong Kong. This highway is partly on land, partly On bridges over the sea and partly actually undersea in tunnels. But however, why is this important for This topic, really, highways are actually driving big part of the demand for aggregates. So they are driving actually the aggregates need, our customers' aggregate needs. So it also drives our equipment as well as our services and consumables Going forward. Now in China, the amount of Road, what is in China, our amount of expressways in China is about 150,000 kilometres, Which is a lot more than in, for example, in Germany. If we take the example of German Autobahn, That's about 13,000 kilometers. So China actually has more than 10x more expressways than Autobahn's in Germany. But what's actually even more important is that in Germany, the total amount is 13,000 kilometers. But in China, every 18 months, Chinese built more as much more expressways into China. So the amount of increasing expressways is similar AltoBans in China in Germany. So really, really driving the growth in there. And now if we look at the our growth trends in our aggregates, there are Several of them. I'll start with 3, and then a colleague will continue with a couple others. One important growth trend is mid market. So when China is growing, when India is growing, a lot of the growth is actually happening with the local made so called mid market crushing and screening solutions. And we do see that going forward, mid market is an important area where we want to be also. So mid market actually consists of the mobile equipment for mid market as well as the stationary crushers for mid market. And by far, The fastest growing segment in the whole aggregates business is actually the mobile machines for mid market. So that's Really important focus for us. Then if we look at China overall. China, not only mid market in China, but There are actually a couple important trends in China. 1 is the mobile machines, like mentioned, in the mid market side. But then the other one is actually mega quarries, really, really big quarries in China. China is actually today building bigger quarries than any other country in the world. And then India. India has been a growth potential for us for several years, and we do see that The need in India for aggregates is growing, and the need for aggregate equipment as well as services is really growing going forward. Our position is already fairly strong in both in China and India, and we have also a position in mid market. But going forward, we do see that all these 3 are really, really significant growth drivers. We have a fantastic factory in India, which We are growing. We have a fantastic couple 2 factories in China, which we are growing, and we have a factory mid market factory in China, which We are growing as well. And we do see that our customer needs here are significantly growing. And then maybe You continue. Yes. A few more of these trends that are growing in the aggregates industry. First of all, clearly, digital. That's where the aggregates industry is going as well. And as we have explained, The aggregates customers do vary. They have different kind of needs and so do they have different kind of needs for their digital solutions. So it can start from all the way from creating the process. So process designing tools, having helped there designing their own processes without experts close by. And then you can go further in that route. Having connectivity in the machines gives the possibility for remote monitoring. And in cases also that it's required remote control of the machines. And then of course, we have capabilities to the digital offering and the connectivity to create A lot of synergies for together with us and the customer working with the same supply chain. And of course, E commerce is an area which is growing in the aggregates industry as well. Digital is linked to the aftermarket, Especially now we saw that very clearly during the COVID-nineteen area. Customers operating and then having need For support and not being able to travel, so the digital applications and tools have been really helpful, connecting the expertise of Metro and the customers having need for support. And the aftermarket, as such, that is the growing trend in the aggregates. Same applies again. We have different kind of customers, and they have different kind of needs. So the aftermarket support and solutions, First of all, just to have the availability, good reliable availability of the spares and wares and the service and support. But then more and more, there is demand also for engineered services, creating special wear parts for the specific needs that the customers have at that moment. And also important to remember that the customer needs, they do change. They are not always the same. Same customer, depending on the contract situation or aggregate demand situation, they have different needs. And we are ready to respond to those growing needs. And then last one in this slide from the growing trends, Sustainability. That's ever increasing at the moment and has been already a good time. If I take few from that long list that belongs under the sustainability. So safety, that is, of course, The common mutual target that we have as a supplier for the aggregate customers to ensure that our Machine equipment, they are designed to be operated safely. They are designed to be serviced safely. And then our aftermarket product as well. They are designed for safety and easy installation. Then we have aggregates Production is happening sometimes very close to the residential areas. So dust and noise is critical element in the sustainability And again, there's solutions available for those needs when customers are operating very close for people living and working. And then we have, of course, world going electric, and that also applies then for Our aggregate equipment that we are having electrification as a team going forward to be able to help our customers in their needs regarding the sustainability. And one area that we see really excited about this is the mid market, as Marco was explaining, the importance of that in the aggregates industry going forward. And then finding the right aftermarket portfolio for that segment is our focus at the moment. We have already started by utilizing our expertise and skillful engineers in the teams. So for example, in the consumables side, we have created a product, a new product, which is positioning itself between the so called premium segment and the mid market segment. So this is a product available for the customers who are in between of these two segments, and that's also a growing area of market where the customers are located. And main point here is that understanding the customer needs. In mid markets, the needs are different than they are in the premium segment. But sometimes, you might be surprised that sometimes they are more advanced, the needs. There is even more need for digital solutions in the mid market. And that is interesting opportunity for us to move to that direction as well. But of course, it is question is about the right products for the right market. So that is the product portfolio issue that we have spare parts, wear parts available for the mid market needs with a good on time delivery capability To have them there. And so is the go to market model. They are usually very different than the so called traditional premium segment market. And finding the best possible channel to reach the customers the best sustainable way is the target there. And it goes back to our overall target in our aggregates business, where the distribution management, We have actually done a step change there, changed the approach, and the same approach can be taken in use here and will be taken using here in the mid market segment when going forward. Pekka, in his presentation, already mentioned our group Tier 1 priorities And explain them more in details. Here, we will have a bit closer look at 2 of them, Sustainability and customer centricity from the aggregates business point of view. Improving service levels. We this merger of the 2 companies Gave us a good opportunity to also review our organization and the way you're working in areas that are not directly or were not directly impacted by the merger, and aggregates was one of them. But of course, we used the opportunity to look How are we organized and how do we want to work in the future to make sure that we can improve our customer service levels and at the same time, improve our own performance. And it is about, of course, making sure that we can respond to request faster than we were able to do in the past, regardless of if the request comes by the phone or by the e mail Or by the customer portal. We need to be able to respond faster. But we also have spent it was mentioned also in I think in both Pekka's and Eeva's presentation We have spent a lot of time in optimizing our logistic footprint and warehousing to make sure that the parts availability for our customers And the lead times to deliver them are shorter. And at the same time, of course, that gives benefits from our side. So the customer KPIs, important KPIs, availability, reliability and total cost of ownership has been addressed and improved service levels and also commercial excellence to some degree. And digitalization has played important role in that, as already discussed. When we have better knowledge on equipment, How they are used when they need service next time through our remote monitoring, it also helps us to be more proactive and supporting our customers. And that is one of the key drivers for service growth in aggregates going forward. Of course, together with improved service levels, as mentioned, and then also productization. So new service products that will address either scheduled or predictive maintenance needs or in particularly in quarry applications, even life cycle services approach. And sustainability, as mentioned already, very important. Safety always comes first. So we need to Have our safe operating procedures, training well done for our customers, for our own people, for our distributors to make sure that service work can be executed safely. But also, we have learned That we need to develop equipment that are more sustainable. But also our aftermarket in terms of helping our customers to recycle The spare parts and wear parts is important going forward, and that is something that we can do better today. And of course, as mentioned, digitalization support, we will discuss a bit later. Good. Our services, they do provide the best value over the life cycle of the equipment. And we have a very wide portfolio of the services and products in that segment available. And the key really, again, is to understand that what is the customer need. So the customer KPIs, Marco was explaining in the previous slide, They are one of the drivers when we are selecting the portfolio that best suits for a customer need. And by doing that, we combine from our offering the best and most suitable product combination from the services portfolio to be able to achieve what are the customer targets. And this is what we call life cycle service contract. And this is an excellent win win tool in many ways because these contracts, they are long term, and they allow us also understanding better the customer process, the bottlenecks, The possible issues where we can still add more value and, of course, making sure that we deliver our promise regarding this contract. These contracts, we have more than 200, 230 of these globally in aggregates industry already. They are also very important from the sustainability point of view. Recycling back to our manufacturing units, For example, the wear parts in the consumables area, it's really important. We remove that problem from the customer side, and then we also help the whole sustainability targets to be achieved in the whole globe. One interesting fact maybe To share here, out of these 230 Life Cycle Services contracts we have globally, 100 of them we have in India. Mark was already explaining the importance of India going forward and also how important India has been for us until this point. And these 100 contracts in India, it's really Almost like a market standard in a very large installed base in India, where customers are getting the best availability of the plants through these contracts. There's spare parts, there's spare parts, there's inspection service and support for the operational issues as well. And one interesting fact more was that during the COVID, when it was most harsh in India, there was a complete lockdown. All the sites were closed, including the aggregate sites. And when that lockdown was lifted, the first Sites up and running in India. They were the sites where they customer had a life cycle contract with us We had also people available to come to the place and restaff again the empty quarry, more or less. And also great achievements from those Indian contracts have been able to do. 1 of our customers, through more efficiency in own operations, have been actually gaining much more contracts, winning contracts because The competitiveness has been improved. So this is just one country, and a lot of these contracts are an example, but this is Really adding value to the customer operations, which is our strategic goal. Then we move towards product development. So a few areas where our Product development is specifically serving the sustainability drivers. The 3 or the 2 on the bottom, they are more of The customer processes or customers' way of operating. And the 3 on the top is how do we do it. We'll start with the safety. Safety is obviously very important for us in our own operations, but it's really, really important for our customers in their operations. And the products that we are delivering to our customers, the new products that we are developing, we are paying specific attention on safety aspects, Safety of the machine itself, how to run the machine safely, how to repair the machine safely, how to change the wear part safely, etcetera. So we We are paying specific attention in there. Energy efficiency. That's probably the biggest driver on the R and D right now or the biggest money spent on R and D right now. We are developing significant amount of e versions of our mobile machines today. And going forward, there will be a lot of e versions of our products launched. We already have an extensive offering for eversions, but we are even building more. Energy efficiency is also very important for the traditional diesel machines. So for example, a machine delivered 10 years ago or a machine delivered today, it's roughly one half of the emissions that are coming from the machine today compared to the one 10 years ago. Then dust and noise emissions. Our customers, as already explained earlier, our customers are often operating in an environment which is close to Habibund. And then it's really, really important for permissions, also for kind of environmental, kind of Good feeling of the people around the dust and noise emissions. And we are continuously developing new models, new ways of making dust and noise Reduced potassium noise emissions. Manufactured sand. This is an interesting trend in many countries. Our customers many of our customers in the past tens of years or decades or 100 of years have been using riverside. And in many places, river sand is today getting banned. And instead of using river sand, our customers are actually Crusting rock and making sand, manufactured sand, as it's called. And we are making machines to make manufactured sand. We are making efficient machines to make manufactured [SPEAKER CARLOS GOMES DA SILVA:] And then recycled aggregates. I explained already before, but once the road is built, 10 years later, it will be Turned down or the building will be turned down and demolished, and the aggregates will be recycled. And we have many machines for recycling the aggregates as well. Maybe I add a little bit for the energy efficiency. Actually, on top of those actions that Marco was mentioning, The crusher ware part design plays an important role as well, how much the energy is consumed. So same lifetime, same capacity through, but with the correct design, the energy required to do the crushing is less. This is also one of the sustainability drivers in the product development. Shushon. Then we'll go towards digitalization. Very good. Thank you. Since already some time, All the METSO mobile crushing equipment has been equipped with remote monitoring capability. And today, we have some 1200 machines monitored continuously. And of course, the number is increasing as we deliver new equipment. And this is giving us very good insight on how the equipment is used and how they are performing, if there are alarms coming which needs attention or when is the right time to do a next service visit and what parts and consumables will be needed. So from service planning point of view, an important tool and definitely something that will help us to grow our aftermarket business. The other thing is that we have a customer portal where our customers can see the equipment, can see the, let's say, parts catalogs, service manuals, And there you can also place orders for parts available for 20 fourseven regardless of where you are, as long as you have an Internet connection. And then what we have adding on top of that during the Q4 is we will have and that is something that, of course, COVID brought very strongly, is that we will have a 20 fourseven support from our side. Remember that information is good to have available, but someone actually sometimes you need support and someone you need a person to tell you what is needed. And that we will roll out global tool and global processes for that during Q4 to make sure that we can Help our customers in all conditions. And this is definitely an area which help us to keep track on what's going on, but also will be a growth generator going forward. Thank you. Then from growth drivers, we move to profitability drivers. So As has been already discussed in Pekka's and Eva's presentation and in many of the questions, actually, one of the big topics is that How are we actually going to make the profit improvement? And we are actually in the process of making a significant profitability improvement in the aggregates business. Some topics listed here, what we'll go through briefly. First, on product costs. As I already mentioned, we have a tremendous focus on Eastern markets. And We already have several factories in China and India, and we have plenty of possibilities of moving products from Our higher cost areas to lower cost areas in order to serve the customers, which we are going to serve in the East. So production shift is happening, and it's actually very significant. We have a significant part of our production, which is moving towards East. Sourcing initiatives. Also discussed earlier a little bit, we have a lot of possibilities of combining our offering. For example, today, we have our McCloskey offering and we have our Metso product offering, and we are manufacturing similar type of machines into 2 different offerings. And there are many, many parts that are fairly similar, like engines, for example, or the crusher itself. There are many parts that are very similar. And we are we can utilize that purchasing power and in order to get better agreements with our suppliers and get the cost drive the cost down. Then we are also utilizing technologies across the brands and utilizing the economies of scale. So for example, crushers. When McCloskey earlier was using different crushers, today, they are using Metsocrusher. And that's actually bringing us a lot of bottom line. And similarly, many other products, We have been using cross utilizing the products, cross utilizing the technologies from brand to another. Then on sales and distribution. There, it's partly about cost management, but it's also a lot about the driving the revenues, driving the price. On the first, we have a significant refocus on distribution management ongoing. So from day 1, we have actually implemented a new market area organization. And at the same time, we have significantly changed also our distribution focus. And we are driving with our equipment as well as our services, Our spare parts and wear parts are looking really how to drive growth through our distribution network, utilizing the digital tools, as my colleague just was explaining. Then we also have been streamlining our sales channels. So when Pekka explained how our we used to have quite a few market areas in Metso and some Maybe not quite as many, but many in Autotech as well. And today, we have less than that. And at the same time, we have also been streamlining the cost of our sales channel. Then commercial excellence, there is many topics there, but one of the important things is actually price and analyzing, understanding how do we price in different places and how to get the value that we provide to our customer priced into the machine, but even more importantly, into the spare parts and into the wear parts that we are providing to our customers. Then 3rd area, fixed costs at main locations. As was already explained, there is a Drive towards fewer locations in our whole organization. Are streamlining support organizations, logistic organization, administration organization. But then as an addition, maybe something that I'd like to point out that When we are driving towards East, we are not driving only our sales and factories towards East, but we are also driving our engineering towards East In order to have more local development of new products. But at the same time, we are actually saving costs. So what we are doing is that we are reducing our external engineering that we are using in Europe, and we are employing more engineers in India And in China, we've been doing that already for the last few years, but we will even ramp up the speed going forward. So the aim is that actually Our engineering hours will significantly increase, but at the same time, the cost of engineering will go down. So we get more hours, but with a less lower total cost. And our aim is actually that we are looking to have half of our own engineering in India and China in the next couple of years. Then maybe you continue. Yes. I think a good list already, but maybe elaborate a few more from the aftermarket side. So of course, the product cost, That's already heavily in our focus and by engineering capabilities to design The consumable products, for example, so that we can reduce the costs. And In the consumables, we have also in house manufacturing. We have our foundries and the factories for the screening media. So working relentlessly with the programs to improve The efficiency in our own locations is driving down the product costs going forward. And then More volume, the better position you have to discuss with your suppliers. And procurement actions are, of course, ongoing in all fronts of the company as we speak. And then from the sales point of view, Marco described the distribution is A potential for us for the growth and then also from the SG and A or cost point of view as well, that is the new thing now implemented from the summer onwards. Marco, something more to add. Yes. Maybe from my side to highlight the logistics improvement that we are doing And consolidating our supplier base. It has been mentioned a few times, but when we have been looking our material stream, Where are the suppliers? Where are the customers? How do we route our parts, let it be spare parts or wear parts From supplier to customer, we see that we sometimes use very complicated route, and we also have More handovers than needed. And that optimization includes significant improvement potential. And adding the beauty Oh, it is that it benefits customer in terms of shorter lead times and improved availability, but it also improves our performance In terms of better supply chain efficiency, lead time, of course, is equal to working capital. And you have lower transportation cost, lower level of obsolescence and slow moving inventory. And not the least, but it, of course, as you transport less, it also offers significant environmental impact or positive impact? So from as a summary, We are continuing our profitable growth. We have a long list of growth actions ongoing. We have trends that we are following. We have trends that are supporting our growth, and I think we are really well capturing all of those main trends. We want to utilize our multichannel approach, our multibrand approach to gain all the different customer segments and gain growth in all the different customer segments. We are growing in our mid market equipment, and we are finding new ways of growing in the aftermarket of mid market. We are driving towards East. We have an internal acronym that we are using, Go East, which well describes that we are looking for the growth in East, we are looking for the footprint in East, but we are also looking for capabilities engineering capabilities in East. We discussed already in several slides about digital offering and the potential that is there. We are driving towards digital tools going forward, and we want to provide sustainable solutions to all our customer segments. Then on profitability improvements, we have a very solid plan for our profitability improvement. I have no doubt that we are going to make the improvements that we are targeting. We have a solid follow-up continued solid follow-up of all the actions that are there. And the list of actions is actually very long. What we saw on the previous slide was only kind of showing the flavor What is in there, but it's actually a very long list of actions that we are doing in order to improve our profitability. But the terms or the areas that we are working are the product costs, optimizing sales and distribution, streamlining fixed cost and improving efficiency in logistics. And then, of course, in the graph on the side, you can see that Our growth has been very, very solid, and our profitability has been on an improving trend. However, On the during this year, especially the aggregates capital equipment has been suffering from COVID. And there, you can see a A little bit of a decline in the profitability. But going forward, we have our actions in place in order to go for higher levels. All right, Marcuti, Marcos, Sami. Thanks for your presentation. We have received a long list of questions, and I'll be Throwing them at you right now. We'll start with a question from Magnus Kruber, Marco S. What assumptions are behind your 4% to 6% market growth figure? We are looking that's a long term growth figure, 4% to 6%. So of course, this year, what happens at or has been happening at the market this year is that the market has been actually going down rather significantly. But then if we look at the history, history has proven that every time there is a rapid significant drop In our market, in the construction market or our crushing and screening market, every time the bounce back has been fairly rapid as well. And then very quickly after that, we are back in the kind of similar growth rates. So what's behind with the percentage Self is looking at the kind of how the TDP is developing and then how the urbanization is developing and then drawing the conclusions out of that and then also looking at how the construction industry overall is developing and making the conclusions out of that. There is no exact way of predicting our growth rate, but we are that's our estimate, 4% to 6%. Okay. Continuing from the growth and profitability targets, question from Johan Sipolla. Can you give some insight on what role acquisitions do play in you meeting those targets? Our growth target is to grow faster than the competitors and grow faster than the market. And We've proven in the past that we have been growing faster than the competitors and faster than the market, and we aim to continue. So We've done it organically, and we've done it even more so when adding to acquisitions on top of that. So I'm sure that if there are Good potential opportunities going forward. We will take a close look at those as well going forward. Maybe continuing from Magnus' question about the market growth, this It's from Artem Tokarenko. What has caused the market slowdown over the last 6 months other than COVID? Are there other reasons behind it? The market actually started to slow down a little bit already before COVID. So in the kind of late 2019, early 2020, we did see that this market or the growth started to slow down A little bit already at that time. And I guess there was many drivers related to that, but general Construction industry drivers were behind that, but that did start already before COVID. Then when the COVID hit towards the end of March. We did see a very, very rapid drop in our orders, especially in the capital equipment. Our services and consumables actually were not effective quite as much as the capital equipment or not nearly as much as the capital equipment. Okay. Thank you. Artem continues about McCloskey and service revenue. McCloskey has quite Low level of services at the moment. What is the reason behind this? And what are the opportunities in growing McCloskey Services? There are several reasons behind that. First of all, Traditionally, the way that we are looking at our service opportunity, the biggest service opportunity is on crushers. So the more crushers you sell, the more service opportunities you will have. And if you look at the historical installed base of McCloskey, which has been actually developing quite rapidly. So the old installed base is actually fairly small. So having a small old installed base kind of has smaller potential for service revenues. But then the other part is that the older installed base actually doesn't have any crushers. McCloskey was more in mobile screens in base actually doesn't have any crushers. McCloskey was more in mobile screens in their earlier history. And so the old crusher installed base is not there. Now today, McCloskey is more and more getting into crusher sales as well, mobile crusher sales and, of course, now utilizing our Metso Autotech crushers. And with those crushers, we are creating a new installed base, which will create us also new opportunities for services going forward. But of course, it will take some time before that installed base actually builds up. Thank you. Next one from Klas Bergland. Continuing on the Services in Aggregates, so maybe to Adam Markku and Sami. You highlight material Upside potential in services in aggregates through increased connectivity, focusing more on total cost of ownership, etcetera. But typically, quarries and contractors spend less money on services than mining companies, and they may have lower margins. Are they ready to pay up for this New offering you have? I think, of course, the offering, first one, is to be competitive. So We are doing a lot of effort to improve our service levels and also improve the efficiency. But even for them, it boils down to availability, which keeps the equipment running. It boils down to total cost of operation, and that is the level where we want to help them to perform with. And I think in the past, Of course, one part is coming from not really having full knowledge on exactly all the equipment that we have developed where they are and how they are used, which you can then proactively use to even give them an opportunity or give our service an opportunity to improve. So it will bring up bring Opportunities and also help us to build it gradually. But of course, at the end of the day, customer will only choose off if they see that there is added value to use Metso Autodeck and that we are committed to deliver. Good stuff. A question from Anssi Roussip of OP Markets. This is about China. What is the share of China in aggregate sales? And how the share has developed in recent years? And maybe you can elaborate from both equipment and services side. The share of China has been increasing over the years. And this year, it's actually exceptionally high because if we look at the developments during the COVID crisis in many parts of the world, the business has been struggling, but actually China is one of the few areas where the Aggregates demand has been increasing during this time. The share of China today It's significant for us, and I believe that it will be growing going forward. In the aftermarket side, I think the opportunities are Great. That we have already communicated. And currently, the share It's one thing, but the growth rate, what we have seen in our business in China, that is really good. So we have a good progress already ongoing in the China when it comes to the aftermarket of the aggregates. And these things discussed today Very much geared up for continuing that for the next years to come. Okay. I combined here a couple of questions, and these are about competitive landscape and margin and differences between different markets. So How do competition and margins differ in Europe and U. S. Compared to India and China? That's a big question. Many questions actually there. Competition first, maybe the maybe I'll start with the equipment, and then the colleagues can maybe add on the service side. But On equipment, the competition in North America, there we have, let's say, the Traditional competitors, Western competitors that are present in North America. Recently, with the acquisition of McCloskey, I think we have Just significantly increased our market share in North America, and we are clearly number 1 in North America right now. The competitors are however, they are good competitors, and we are fiercely competing continuously in North America. Our price levels in North America tend to be fairly good. So the I mean, it's not that fiercely maybe in that sense that The price levels in North America tend to be fairly good. If we then look at the European situation. The competition in Europe is actually we have more competitors in Europe. There is a lot of smaller companies that are competing with us in Europe. And the, let's say, the margin levels or price levels in Europe tend to be a bit lower than they are in Northern America. Then in China, China is actually a much more complex area. We have first of all, we have our premium offering there, and we have our mid market offering. If I look at the whole situation in China, I would say that there is really a lot of competitors. However, In the end, when a single deal is on the table, there isn't that many players around that specific deal. So even though there is really a lot of competitors in a specific deal, there is actually fairly limited amount of competitors. And we tend to have reasonably good margin levels also in China. Then India, Our 4th kind of a main market, India, there is local competitors as well as international competitors. And the competitive situation in India is actually fairly tough. So in terms of Margin levels, it tends to be tougher in India than it is in most of the other market areas. However, then of course, our cost level in India is also very, very low, and we have a tremendous operation in India where we are very cost competitively also producing equipment. In the aftermarket, there are not many truly global competitors Like Metsoe Auto Tech is, and that means that the competition coming in different regions, it's more regional. And Same kind of pattern we can see if I compare to U. S. And Europe. So The margins are slightly better in the U. S. And then the interesting part is that, Especially in the consumables, quite a lot also in the spare parts, even the competitors might be regional in U. S. Or in Europe. The sourcing is coming from the Asia. So putting that into the picture then, and when I look our margins, Aftermarket margins coming from the China and India and compare them to the Europe and U. S. So there is nothing wrong. That's why we are investing for the growth in China and India because we are already in a good path when it comes to the margins in these areas as well. Coming from many, many factors, of course, then the logistic cost is different, and even the price point might be lower in some cases. And maybe add to that From my side, of course, the customers are not the same even in the markets that we talk about or what there is a big quarry consolidation ongoing in, for example, in China. And the quarries are getting really big and having the same KPIs that you would expect, For example, a big quarry in Europass. And then also a little bit touch on what I already said before, that we Of course, the first requirement was to be successful is that we are present. Customers, particularly small contractors, Their cash flow requires that they get the part when they need it, and you need to be there. And at least you need to be able to anticipate when they need it to get the chance to quote. And you can say that, yes, in China, maybe customers are more resourceful, and they might have more authorities. All right. Thank you. SCB's Antti Kaanzenen has a couple of questions about mid market. First, how does the growth of mid market impact your profitability? So I Assume that the assumption behind the question is that the profitability of the mid market would be lower than the profitability of our premium products, but Actually, that's not quite the case. So today, our mid market profitability is On equal level or actually, today, right now, in the middle of COVID situation, we actually have even better profitability on the mid market side than we have on our premium. So it's improving. Then the follow-up. Do you currently have full scope of relevant offering with the right price point to address the market? Or would M and A make sense in the mid market? Yes. On mid market, Mid market is really, really wide, and there is so many different kind of subset segments of mid market. If we look at the China mid market and exports out from China, there are there is 100 of players there. And even within China, our mid market position is actually fairly strong in the southern parts of China, And China is a really big country. And many of the players actually have fairly local presence. So I could imagine that There might be potential that we could do in there going forward, but we'll see. Then a completely other story is actually India and looking at the India situation. And There are the competitive situation is maybe not quite as widespread as it is in China. But then Our current position in India mid market is actually very low, almost nothing. So that's another potential opportunity. And then the exports of mid markets, that is definitely a focus today already, but that could be a Kind of add on focus for going forward to gain more growth. 3rd question from Antti. It's about McCloskey. The acquisition was closed about a year ago, and pretty quickly after that, COVID Heath asked, what kind of implications that has had on the synergy work in McCloskey and how you see it going forward? We were in the McCloskey acquisition, we were lucky enough to have all the main synergy streams on good in speed before the COVID hit. So actually, we were already in good speed on the integration of McCloskey. We are actually not making a full integration into our Metsoldertek organization. We have a limited integration, which is also helping in this COVID situation. And I guess the biggest impact really has been more on the top line and then the kind of temporary cost reductions that we've been doing because of that rather than on the integration side. Then a question from Antti Suttelin from Danske Bank. Aggregates profitability improvement We'll be less impacted from merger synergies since OdoTec didn't have aggregates. Why has Metso's aggregates margin been below Sandvik and Terex Materials Processing Margins and how the catch up would happen. There, that's a difficult question again. If you look at the history of our margin development and Especially, let's say that on the Services side, the margin has been on a very good level already for quite a long time. But if you look at the capital margin development, when 4 or almost 5 years ago, actually, when I started in this aggregates area. The margin level was actually on a very, very, very low level on capital side. And we've been improving that year over year all the way to kind of current levels. And then This year, COVID has been hitting our capital margins quite a bit. But going forward, we have a solid action plan in order to improve or continue the improvement of our capital equipment margins that we've been doing already for quite some time. Okay. We have a question from Devashis Chan from Societe Generale. What is the sales split between the 2 customer bases, quarries and contractors? I don't have the exact number for that, but the contracted part is significantly bigger than the quarry part. And in which part do you see the most significant growth opportunity? The if you look at the Quarry part, In Quarry area, Quarry part, the growth opportunities are primarily in China, really. The let's say, the Western world and quarry industry in the Western world is not really investing that heavily. So The quarry investments are really happening in China. And as mentioned, there are those really, really big quarries that are being invested. So there is Quarry potential for growth is really there. Then on the contractors, we see that our contractor business is a long term growth in With development, so on contractor business, I see more opportunities than in quarries overall, but China being a specific case on quarries. Then a third one. Is there a profitability difference between mobile and stationary crushers? Yes, there is a difference. The stationary crushers tend to be a little bit more profitable, and There is also the element of the services and consumables side. So the stationary crushers consume They utilize quite a lot of spare parts and wear parts and which then adds on to total profitability. All right. Then a question from John Buckland of Waverton. Please can you give more details Reduction in energy intensity that you can offer your customers so that they can deliver reductions on CO2 per tonne and report Lower levels under EU taxonomy. Any practical examples? We have some customers That are going after significant reductions in CO2, and we are working together with them in order to find solutions to help them to do that. So in the end, it really depends on the selection of the process, refining the process, like my colleague was saying already, utilizing different wear parts and kind of optimizing the performance of the processes. So that's work that we are doing with many customers today. Then we are a little bit running out of time, but I'll take the last one from Tomi Raiola of DNB. Do you see any stimulus talk helping your business right now? Any signs or more activity around stimulus in the market? That's a good question. Over the years, I've noticed that Any kind of governmental actions tend to be fairly slow to come into the actual business. So I actually do believe that the bounce back will be just driven on the kind of normal load. And then on top of that, there might be some stimulus packages impacting in some regions and some areas, But they tend to be a bit slow to slow in our order books. All right. Maybe then the final one from John Buckland. Is there an opportunity in the cement of concrete operations from mobile equipment? Yes, there is opportunity. I guess there is probably a bit more opportunity on the stationary equipment. So because The cement or the concrete manufacturing requires a lot of sand. And nowadays, many of our customers are actually utilizing more and more of this manufactured sand, and we are providing those type of machines to create the manufactured sand in order to make the concrete, Make the cement. But the opportunity is probably more on the stationary side than on the mobile side. All right. Thank you, gentlemen, for the presentation and answering the questions. We'll take 10 minute break right now, and we'll be back 10 minutes to hour to discuss Minerals. See you then. Welcome back from the break. We have our final presentation. It discusses Minerals Business, And it will be presented by 3 gentlemen, Samitakaloma and Markku Tera Svalcara will Be with us in this presentation as well, and we'll introduce Stefan Kirsch, Head of our Minerals Equipment business. Stefan joined Metsoch 2018. He has a long and strong experience in Mining and Metals, Mining and Minerals Businesses from Hoffman Engineering and Fusen Group, for example. Stefan is Australian German in this otherwise Finnish team. He's been living in Australia for more than 15 years and make a big move This fall, I moved to Helsinki. So we are trying to make him Australian German Finn in the next months years. But let's welcome Stefan Kirsch, Samitaka Voma and Marco Terasvasara. Good morning and good afternoon from Helsinki. My name is Stefan Kirsch, and thank you for the introduction. Together with my peers, Marco from Services And Sami from Consumables. We would like to take you through Our Minerals business. Where do we play? Where do we grow? How do we grow and how do we deliver our growth? That are the key questions. Let's start with our baseline. We are in a positive market sentiment. The Minerals Industry is Still rolling quite well. And in the new combined Metsoe AutoTech Company, we see a very high interest from our customers. That's also documented through still high levels of inquiry rates for our offering. We will actually Also, leverage further on, on industry leading our strong industry leading installed base with our high value services. And last but not least, Today, we have a very strong offering in terms of sustainability and digitalization products, which we will show you in the next few slides. Now let's talk about growth. In the last three years, We have reduced the CAGR of 12%, which was quite strong, and our ambition is to grow even faster and outperform our markets. Profitability. Our adjusted EBITA Today, it's 14%. But as heard earlier from our CEO and our CFO, We are aiming as a segment towards 20%. And how do we do this? Well, first of all, we look at our at the implementation of our integration targets. Synergies, cost and revenue synergies, they are very important. Then we continue working on standardization and improving the competitiveness of our products. We actually leverage With our service business, we leverage on the much larger industry leading installed base. And as said earlier, we have already some strong offering in sustainability. Just to give you two numbers here, 25% of our revenue today is actually driven by products into sustainability. And when it comes to our R and D pipeline, 80% of our R and D projects are actually having sustainability targets. And obviously, our ambition is to grow this to full coverage, I. E, to 100%. And on digitalization, Well, we use digitalization as an enabler. It's a tool for us. We have a lot of offering there. We will come to this Further in the presentation, as an enabler for our business to grow our business. Now when we build our plan, our strategy going forward for the midterm, Each of our 3 business areas, we were looking at our ambitions. So what are we actually aiming for? What is our ambition? And as outlined earlier from in Pekka's presentation, We are number 1 in some of our product groups and offerings already. In some, we are not. So it is for us, the capital equipment, clearly our ambition to be the market and the technology leader, the trendsetter for technology in the industry. So Marco, how about services? Yes. We talked about the aggregates and not so much impacted by the merger. Here, we have an area in Minerals where we combined 2 teams that actually were complementing each other In a very good way, I'm very excited about the unique strength that we have through Strong maintenance presence and capabilities and also a presence globally, together with good process expertise. And this is, in my view, a very strong asset and Difficult to combine or find from any other companies. So of course, from this platform, the ambition is to be the preferred service provider to our industry. Sami, in consumables, we are really striving for being the best Sustainable choice for our customers, especially when it comes to value driven solutions that we are providing. And I think that this is a really strong three elements we have on the table here, and this is the unique Metso Autotech offering that we have available for our customers in the Minerals segment, and that's also one of the areas that differentiate us from the others. And we have others other points as well, like sustainability end to end sustainability and our digital solutions that We are now developing and providing making this really strong trio for our customers out there. And if we talk about the customers, So that's center of our ideology all the time. And again, understanding the customer needs Is the key to success and then tailoring and developing your own portfolio around that. And if we look our customers again, they are very different, but there are certain commonalities that we can find. We are there for our customers. They have a customer journey with us from the ore body to the metal, And there is many touch points there where we can add value, their operations, the customer operations. And if I take one from here now, Energy Efficiency. It's a really big topic for the whole industry. We know how much of the global electricity is consumed in the mining sector. And together, finding solutions for that is a target that we have. And in consumables, we can do our small part for that, like horizontal grinding mills and the middle lining design that we can create, optimizing or minimizing the energy consumption while still getting the same throughput and capacity. That's one example. Safety is another big topic for the whole industry, and we are definitely on that journey together with our customers. Again, I take one example from my own responsibility area. Consumable products, they are actually getting heavier and heavier. They are bigger and bigger. So we need to take care that our own operations stay safe so that we don't have any issues regarding the safety topic there. And then they are transported to the customer site, and they need to be installed. And that's the next safety touch point that we are thinking. And I think, Marco, you can elaborate a little bit that, that when we help customers installing the parts, that's how we do it safely. Yes. And that is definitely an area with where automation and good procedures and work tools help to automate an area. And I think safety is, as discussed many times, it's a given thing. Together with nowadays when we talk with the customers, they all mentioned sustainability. They all mentioned energy consumption, recycling process water and emitting less. But safety is a no compromise for anyone. So that is definitely area we need to improve. And then the process performance. So our operational KPIs are still there. So total cost of operation and availability, reliability, definitely something that we can continue to work on. And we compete often, not only within in this segment. We often The customer, when they choose an OEM, they choose that as an alternative for their own service crew or a local part supplier. And for us to be selected there, again, we need to be able to excel in these areas to be selected. And CO2, I think Stefan will develop that a bit further from a technology point of view. Yes. In terms of CO2 and energy consumption from the capital point of view, we can add and we do add quite a lot. Just one example. Quite a couple of years ago, we developed some Hi, sophisticated grinding technology. And we need to know that grinding is the most energy consuming part of mineral processing. It consumes the majority of all the power going into a mineral processing plant. So we have developed this high pressure grinding technology. Our product name is HRC. And just recently, we even improved it, that this technology actually reduces energy consumption for Standard grinding processes by 25% to 30% in an area where the most of the energy is consumed in a mineral processing plant. So this is significant, and it contributes for our customer to a lower CO2 footprint. Another one from a capital perspective, which I would like to share, It's water efficiency. We probably all know about water scarcity in many regions In the world where mining is operating. And in some of these regions, for example, in South America, we have seen civil unrests. We have seen people going on the road. We have seen farmers and miners fighting because of water. So this is something, of course, which cannot leave us untouched. So we have thought about it. We have invented solutions and processes and equipment, which we use to recycle process water to use it instead of fresh water, to replace it not by fresh water. So those are examples where we believe in Metso Autotech, We have very strong offering to contribute to the industry, but also to do this To our benefit, to increase our offering and our market share. Yes. Customer performance and how to optimize that, When we look at our BAs, and we have a dedicated BA structure in the company Equipment Services and Consumables for a reason that we actually with that structure, we are able to maximize The focus on those specific areas. But when we talk with our customers, We want to see it as a life cycle approach where, on one hand, you are, of course, equipment deliveries and process developments, deliveries. But then there you have a long period of life of that plant and aftermarket support that is required. So there again, the life cycle cost in terms of total cost of ownership and produce performance comes very important. And we do not only see that as we have talked about productization many times, and that is another area where this holistic approach is needed. Aftermarket benefits from standardization and scale. So whatever we can do it in a similar way should be done in a similar way to have efficiency. And there, we with our equipment colleagues, often of course, the given thing is that you optimize that equipment for process and performance and functionality. But we also today look very much on serviceability and life cycle service opportunity to make sure that even past delivery, We can take good care of that in a very efficient way. Now let's turn to our sales synergies, which we have. I mentioned that earlier, And we would like to give you some examples from the equipment side. As you probably know, in Metso, we have been very strong with our crusher offering. And going forward, because of this merger, we have lots of Cross business line synergies, which we can use. And through our Plant Solutions Business lines, for example, we can use crushers as a means to also bring more Screens into the field. Where there is a crusher need for a crusher, there is a need for a screen. So this is a synergy which can easily be used. And the same probably applies for pumps. If we think of processing islands, processing plants, For example, filtration plants and or flotation plants, pumps are needed. And in the past, 3rd party equipment was used, and this now can be replaced by our world class and high technology metso pumps. So we have those synergies actually to grow our market share and grow our volumes. And the same applies for mills, Our grinding technology, together with hydrocyclones, pumps, mill discharge pumps Or other equipment. From a service perspective Yes. Now combined, we have a very wide installed base to support and improved presence at sites. So now it's really Taking the opportunity and utilizing our resources and competencies as wide as we Ken. And there are, of course, 2 maybe 2 areas to look at apart from digitalization is to basically Look, the installed base and where we are present and then grow through that installed base by simply doing more of what we have done in the past because of stronger presence and gross utilization of resources. The other area is, of course, expand our addressable market, meaning that then Also, when we now have improved presence, we can look at the whole flowchart and see what parts There are that we are not yet serving and also capture that opportunity in a more clear way. So definitely, the presence improved presence gives us benefits and synergies And help us also in terms of upgrades and amortizations in all plans. Maybe I'll lift one Mill linings, that is our core product in the consumables business. And now when Not only Metso, but there's also OTOTEC grinding mills in our installed base. So this is a significant safe synergy opportunity going forward. And then We have the concept life cycle service contract. And actually, that's the vehicle that's the tool to combine all of these now discussed topics together So we are able to offer to the customer the product in a standard good contract way. So that's a typical example for an end to end solution. Okay. Now let me share one more example, how we can maximize value and also volume. And this photo is actually Quite characteristic for it. It's a modularized and standardized crushing and screening plant, which was developed together with an Australian customer. And I must say, it was Delivered built and delivered within 6 months only from the factory, from start of manufacturing to start of production in an Australian iron ore mine. So what's the maximization of value and volume. If you look at this photo, the white part, you see a screen and you see that yellow white part on the left hand side, which is a crusher, a jaw crusher. This was traditionally the equipment which we contributed to such plant. But now we have started a standardized design For this kind of plants, so they will not be redesigned every time. There is one standard, which we use for certain product rates. But all of this blue part, auxiliary equipment, which is probably a little bit hidden, apron feeders, Hoppers, surge bins, the structural steel, all of this is added, and it actually adds value to our offering, and it maximizes our offering, our market share. So the Idea here is to have not just a modularized plant, but also a standardized plant. So solution and value or standardization is no contradiction. That actually can work together, And this is an excellent example for it. And we have similar examples for process islands. This, as I said, is a crushing and screening plant, but the same could be there for a flotation plant or a filtration plant, which we have on our drawing boards Yes, well. So about the potential in the minerals industry, after the merger, we clearly have the biggest installed base to serve. And we have spent a Good piece of time to understand, let's say, combining the 2 CRM customer relationship management systems that we had in both companies To really gather all customer information in one place, we have also looked at from a free installed base point of view to really see the full potential and where the opportunities are to have a proactive approach going forward. And of course, then Having that information available, and then you can start prioritizing your efforts and see where the resources should be put to give the best reward. Already mentioned standardization and scale. Very, very important. And still as the installed base grows even further and there, I think, as mentioned already, The productized offering and creating that together with our capital colleagues is an important area to work on. And then regarding the installed base, yes, we have now the industry's largest installed base, but That's not where we are actually limited to. We are all the time developing more and more offering available for the 3rd party. And that's today already available for quite many equipment, and It comes from the customer demand and customer solution, really. We are having customer in the center, and that means that The customer process need to be served with spare parts and wear parts and services. And at that moment, we are not Looking at what is the trademark, really, we are looking at what can we do for the customer to improve the situation in the operations. And talking of that, let's go for the very important topics In our company, in our segment, in our businesses, so Tier 1 company is our goal. And now we will talk about 2 topics on this list, customer centricity and the sustainability. So the customer centricity, it's end to end Customer engagement is in the core of this topic in our lives. This means that we are Organizing ourselves so that we are reflecting the best possible, say, the customer organization as well. So we are having CEO level discussion available from our organization, and then we go downwards in the customer organization model, It's reflecting it in our own way of contacting and having contact in the customer. And customer is in the center of all of our Activities and strategies, that's what really is. Service level improvement is one of the areas where we can truly add value to our customers. And that means all touch points where the customer is in contact with the Metso Autotech Company, from the on time delivery to how easy it is to do first touch to us to Start the project and so forth and so forth. And we are having a lot of actions ongoing in each of these sub areas regarding the service level improvement. Then comes, of course, the commercial excellence. That is important part of communication with us and the customers in center. And it also means that the added value that we are able to provide by our expertise, knowledge and capabilities that there is a correct price tag for products and services and contracts accordingly. It's really win win what we are targeting here, but we need to keep Our focus on the commercial excellence part very much going forward. And then we are using feedback. We are using feedback to improve ourselves. So we are doing regular customer satisfaction surveys, even more in the future. We will add different points there And really using this data to look back for those people in our organizations who are in the position to do the improvements immediately. This is what we have seen, very powerful way of getting the improvements done quickly And staying lit instead of having all the time corporate actions ongoing regarding these topics. So that's what Adding value through customer centricity means to us. And Marco will now go Through one of the elements in this area. Yes. We already mentioned the unique combination of Combining process performance with maintenance capabilities and strong global presence. And of course, from that platform, we want to improve our we want to focus on improving our customers' performance. We have different service products and tools to use that. But maybe here, Addressing the main KPIs again, DCO, availability, reliability, safety and so on. I would like to highlight that the LCS agreements. Today, we have roughly 170 LCS agreements in mining area. They are less in numbers than in aggregates, but they are significantly bigger in size because from the value point of view, they represent 90% of those contracts. And that is definitely an area where we can combine all the skills that we have in the company For the benefit of the customer and at the same time also grow our own business and business. I'm more than happy to present to you now one of these contracts that we have. The customer in question is Buliden, And mine in question is Aitik mine in northern part of Sweden, actually world's most efficient open pit copper mine. Production rates are already way above 40,000,000 tonnes per year. And we have just recently renewed our life cycle service contract with Bulid and Aitik mine regarding the grinding Mills, the supply of the wear parts and installation of the shutdown services. And all this started as it should from the customer need. And in This case, no maybe big surprises, but you don't gain this kind of position to be the most efficient open pit copper mine in the world without putting a lot of focus on this. So Boliden has been focusing this a lot and demanding also a lot from the supplier. So to achieve the efficiency, as long as possible, well life for the wear parts is was needed so that the amount of the shutdowns when you need to completely stop the production is less. The second point was that these maintenance times used when the shutdown is ongoing needs to be shorter and shorter. So these were the drivers together that we started to work on. And of course, while doing this work, you keep 2 very important Topics in your mind in both parties, sustainability and safety. They need to be all the time compliant 100% when these kind of contracts are Ongoing. So shortly, what it is, it's a performance based cost per tonne agreement, which means that there's a mutual KPIs for the both parties, both for the Bulid and both for the Mesozootech. And achieving those is then triggering the payment pattern as well. And really happy that Bulid and Trusts in Aitik for the innovative Megaliner concept, Which is allowing this contract to help them to achieve their own targets. And as a new element, now we are bringing in the Recycling part from the sustainability portfolio. So helping the customer to recycle and dispose the worn out liners after They are taken out from the mill. And now this is 5 year contract signed this year. And actually, The first contract like this, of course, the scope was maybe a little bit different than those days, is already 10 years ago. So this has been really Long relationship between Boliden and Metso Autotech going forward. Okay. We talked about sustainability quite a little bit before, But let's do a little bit of a deep dive here from an equipment perspective. As I said earlier, we are doing already quite a bit and 25%, as mentioned, of our revenues are today even coming from sustainable products. And I would like to give you a few more examples here what is important. We talked about tailings management. And on the slide, you can see on the left hand side, you see one of these modularized Filtration plants, which are important for recovery of tailings and then to bring that to dry sticking solutions, but also for the recovery of process water. Another aspect, Which is absolutely becoming more and more important in the industry is resource efficiency. Why is this so? We all know that head grades of minerals are becoming lower and getting lower and lower. So in order to recover minerals from the rock, we have to put even more energy into the rock to grind it finer. But the fine particles, this is actually more and more difficult to separate the ore from the hosting rock. And in the past, a lot of these minerals, these ores actually went into tailings, which at the end of the day delivered a lower recovery. Now Metso Autotech, and this started in Autotech couple of years ago, but now we are in the process. Actually, in Q4 this year, we will actually launch a new separation or an optimized separation technology, and our brand name for this is CONCORD. It's the CONCORD flotation. And this actually targets fine particle separation in order to raise the level of recoveries. So This is an active contribution to the environment to more efficiently use resources, And actually, it helps us as well to grow our business and market share. The next one, energy efficiency, the image you see Right from Concorde Flotation. I've talked about already the high pressure grinding rolls, which is the new way of replacing conventional technology and saving up to 25% or 30% apple with apple comparison In Power. And we have a few other projects in the pipeline. For example, our in pit crushing and conveying systems, in this sense, what we do is actually we bring The crusher and the entire crushing station, as you can see in the middle bottom slide, we bring this into the mine, where actually the ore is mined and crush it there and convey with Electrically driven conveyors, the ore to the mineral processing plant. So why does that have an impact on the environment? Well, it's simple. We reduce the truck fleet. We reduce the fuel use of the trucks because we do everything where it happens. And then by electricity driven conveyor belts, We bring it to the processing plant. So just a few examples, and we could go on and on. But I think to make clear just those few examples. Staying on the sustainability topic, and I take the safety part here. We are manufacturing a lot of the Products consumables products in our own foundries and factories. And safety is a very important Agenda point for us and starting point when I started in this job 3 years ago It was not really good. We had way too many accidents happening, and We have been working with the whole organization to create the awareness and improve the situation and actually also achieved Improvement trend, very significant. So this is something that we are also then bringing with us to our customers and together making the best practices out of the operations. Sorry. Yes. So I think Pekka already mentioned Handprint and footprint in terms of CO2. And Metsoe Odotec is widely known from having a large handprint, which is a good thing, and that's actually many times bigger than our footprint. And that is how much CO2 our customers can avoid by using our technologies. So that the company is known for, but that doesn't mean that we don't work and focus on our footprint. That also needs to be smaller. And one example, which you will give in some data later on, is definitely logistics, where we transport a lot of heavy things. And we see that by rerouting those transports and by organizing our supply chain smarter than we have today, We can actually tremendously reduce our footprint as well. Supply chain capability is core of the strategy in consumables, and we are Having the most efficient manufacturing methods in use in our factories and foundries. We do make or buy decisions, And majority of the products are today still in house manufactured, and that's also chosen way forward. But we are then looking all the time the footprint of this supply chains To understand what is the demand, what is the change in the product mix and what is our best capable optimum Footprint going forward for strategies. And you have seen already a couple of announcements regarding these things. Same time, when we are doing the footprint, we are also investing heavily for our own in house capabilities of manufacturing. So processes and way of working and getting the flow and bringing the digitalization also into our factories and foundries It's in the core of the strategy going forward here. All in all, we want to have competitive supply chain. That's what it is. And now the recycling is in the key role. So in our foundries, we have already Decades, we have used the worn out liners as a raw material for the new liners. And now we are coming to the Same kind of capability when it comes to our rubber and polymet wear products. And this will add a lot of benefit for our customers going forward when we talk about the sustainability issues. And this is also then decreasing the emissions is what we do in our own Operations. We do maintenance CapEx decisions based on where can we save energy, where can we make the operations even more green and better. And this is continuous work what we have ongoing, and now we have a full program for the future regarding this topic. And then I come back for the My story from the last slide, our aim is that in our own operations, we have 0 Harm. 0 defects, and nobody gets hurt working in our operations. Nothing More or less than that can be the target that we have. Now a bit more information on that emission reduction through logistics. Already before the merger, Metso started working on the logistic footprint. And of course, now with the combination, it is even more relevant. We see that we can optimize our supply base And we can optimize our warehouse, not only the location, but we also can significantly reduce the number of warehouses that we have and yet offer our customers better supply and better delivery security. And looking at simply where we are coming from, because of the way you're working and maybe Also a bit less structured supply chain. We, in the past and like you have the score in the middle there, In the past, we had basically 2.5 stops in average for our deliveries from supplier to the customer. And of course, the target is only to have 1. So we still have a lot of improvement to do, which will benefit all of us and not the least, reduce CO2. Improvement is there. So we are at 2.28, but still a lot to go To one, I think what is also comforting that already today, we see that roughly 30% of the volume goes actually directly from suppliers to end customers, so not even stopping once with in our premises. So I think This is definitely an area where we still see significant improvement, and that will improve our performance in many, many ways. Okay. Let's move to digitalization. That cannot be missing in such a presentation, of course. And We've listed here from a capital perspective, we've listed a couple of products, a couple of offerings where we use digitalization to a large extent. And as I mentioned earlier, digitalization is for us an enabler to improve our products, not to make our products working harder, but making them working smarter. And I would like to share with you one example, and that is the Smartcrushers. You'll find that on the left top hand side. And what is a smart crusher? Well, we are selling crushers for a couple of decades quite successfully. So we are really on top of the market with our crushers. But a smart crusher is different. And what we have been doing in the last couple of years and introducing now to the markets is A crusher, which is a combination with another product, which we have been running for quite a while, and that's a camera, which is called Visiorock. So how does that work? The crusher the performance of the crusher Differentiates or differs with differing feet, and then you get a different discharge from this crusher. And it's very important that the discharge, the product of the crusher is always consistent leaf feeding to the downstream process to keep the mineral processing process most Efficient. Now this Visiorock camera now captures the information of the product. It measures the product size and knows exactly what the optimal size is. These data, they are captured, They are stored in the cloud, and they are analyzed by algorithms, which we developed. And then the crusher is actually linked with the outcome from these algorithms And we'll tell the crusher to readjust the crushing chamber to always produce, no matter what the feed is, no matter what the wear is in the crushing chamber, to always produce the same discharge, the same product to downstream. So this is a smart crusher, and this will actually help us growing our strong position in crushing technology, So growing value for us a lot. And there is others, as you can see from this slide, but in essence of time, I will not Touch on all of this but move on. I share one example from the wear part world. Digital Aware Management, that is hot for the industry at the moment. And it's really all about maximizing again the uptime, lifting up the productivity of the customer side. In the picture in the middle, you can see the left side is showing how things were done in the past. So when checking that how much life there is left for the mill lining, you needed to stop the mill, Go in with the people, make the measurements, come back and start the mill again and then analyze in your office that you know what is the situation and how many Wix and Wix are still woah. Today, we are already digital. So 3 d scanning, our patented Technology is still unfortunately requiring that you need to stop the mill, but you don't need to have a crew of men going Saad. You just need to have your equipment installed. And very quickly, the laser scanning is giving you the bare measurement. And then you can start the mill again and then analyze the data. Now the future will be online wear measurement. We don't need to stop the mill For just checking that what is the situation of the wear life left in the liners. And this is what we are bringing to the market now as a now as a very unique opportunity for productivity increase in many ways. And also Do remember that this is very much safety issue. It's not the safest place to be inside the mill even if it's stopped. Another example is remote support. When COVID hit, This actually, the importance of this became much greater. Fortunately, I should say, mine sites are normally Very remotely located. So what customers did quickly is that they basically isolated the sites. They didn't let people to visit, and they didn't change the crews just to keep the operations going. But of course, the complication was that even our service Could not visit those locations. And we had a number of requests from customers And discussions on quickly setting up remote connectivity and support to help to maintain and also run their equipment on Optimum performance. This picture on the left side is from one of the remote support centers or performance centers, as we call them, from Santiago. And they are already quite well Equipped. In remote support, you can maybe split that into 3 different levers. 11 is simple remote monitoring when you actually can monitor performance and utilization of a large installed base. But then if you take to the next level, then of course, you add Hundreds of measurement points on equipment operations to really see how the performance is at any given time and also can support customer to improve the performance or alert them when something goes wrong. But there is a third dimension as well, and that is when you start optimizing the performance based on the data That comes from these hundreds of measurement points. And with the help of artificial intelligence and machine learning, you can actually optimize the process. And let's also take today and can offer the whole variety of those 3 different support levels. And like we mentioned in aggregate here as well, we are already Up and running with our 20 fourseven support in many areas. But what will happen here in Miederla's segment as well is that we will Standardize that support with the same tool and same way you're working globally during the Q4 Because simply, the customer request is there. And then maybe also That is one connectivity. And the other area we look at is also, just to mention very quickly, is to digitalize our field expertise and service so that they are fully connected wherever they are to have access to information, to have access to help and also can help customer to place orders and so on. So there's a lot of development that has been done in this area. And I think because of this pandemic, the developments is only accelerating. Okay. Now to finalize our business Minerals business Discussion here. How do we deliver? And how do we continue profitable growth For Minerals. Well, first of all, we deliver our integration targets, Our costs and revenue synergies, and that includes our procurement, savings from procurement, which are significant. We will as we heard from the consumables side, we will streamline our manufacturing footprint and logistics, as Marco laid out. And we continue to grow on our strong, even stronger installed base, our aftermarket business. We, equipment side, in particular, Continue to work on our standardized offering, modularized plants and product competitiveness, also by harmonizing products from the ex Metso and the ex Autotech side. And all of the above actually will strengthen our commercial excellence. Well, from my perspective, I think the 3 of us, Sami, Marco and myself, we are very excited to deliver these results based on what we have presented to you just now. Thank you. Thank you, gentlemen, for your presentation. And let's take Questions from the audience. I'll start with SEB's Antti Kansanen who asks that now after the merger, you have an end to end offering. What is the biggest benefit? Which type of customers prefer it versus buying various products from other suppliers? Well, I can take that question from the equipment perspective. We have quite a very Hi. Feedback from various angles. We have EPC companies who are contacting us. Just last night, I was on a call with 1 of the major EPC companies who want for 3 projects package proposals from us. But at the same time, we have end customers, mining companies also contacting us, looking For Dialog in terms of framework agreements, how can we work closer together because you have the full offering now, Metso Autotech. And it's not just the offering of the equipment. It's the expertise, the people behind it to actually help deliver and expedite the implementation of projects. And maybe from just to add from service side, of course, it's basically no benefit for any customer to have multiple service crews at site. So if you have one stronger team that can support bigger part of the flow sheet, that is definitely a benefit. All right. What about the benefits of the end to end offering from sustainability perspective? Or Are the sustainability benefits mainly achieved by product specific R and D and other development efforts? Well, from equipment perspective, I think part of this question was or is answered by our presentation When we talked about tailings management solutions, for example, so it is both. We have our standardized products, Filters, pumps, thickeners as part of a process water recycling plant or tailings management plant, but it's also the standardized solution. So the effect in terms of sustainability comes from both ends. Ben Anpik continues with a specific question about pumps offering. What's the ambition here you have? Well, pumps is a really Attractive business for ourselves. It's not just the equipment, the pump itself. It's in particular the aftermarket potential there. There's parts, there's services around it. And overall, it's quite an interesting business, which creates a lot of value for us. So naturally, as a business person, you want to grow this, And that's what we do. And then about the aftermarket question from Karl Bucharest. What is the service penetration currently of your combined installed base? And what attachment rate do you have on new sales? Those are, of course, areas. First of all, I think when looking at the complete installed base, I think No exact number is not even possible. I would like to say so that we don't even though we have better presents we will capture more of that. We are not yet close to a level where we cannot grow more through our existing installed base by serving them better than we have done in the past. And also the other quote there, guys, is, as mentioned already earlier, expanding our addressable market From the sites and taking bigger part of the flow sheets that we are having at the moment. So rather than saying exactly the number which is not even known, I can only say that there is opportunities to grow, Significant opportunities to grow. And I can add maybe that comment that I already made in the presentation that especially from the consumables point of view, and it's not coming from us. It's also how the business is and other competitors. So The installed base out there is actually all installed base that we are looking after. So no limitations for the growth. That's the message. All right. Good stuff. Next one comes from Artem Tokarenko of Credit Suisse. Could you discuss the Metso and Odotec service locations globally? What kind of overlap there has been and how you combine those capabilities? Naturally, we have had some overlap. We have been presenting at same sites. And there will be some consolidation, But there is this complementary as well as Metso had locations where Autotech was not present And Autotech had locations where Metso was not present. So there's definitely synergies from Increased customer base. The next one from Andreas Amorim, about electric vehicles. How do you see the impact of expected growth in EVs And demand for raw materials in your growth in the future? Well, battery metals is definitely something which helps us driving our business, helps us improving our business. We've seen The last couple of years already strong growth in lithium. I mean, in earlier days, lithium was not even on the agenda. So all of a sudden, we generated top line and value out of this business, And we expect this to continue. Battery metal prices have been a little bit Under pressure recently, especially lithium, copper obviously is not the case. Copper is really flying high at the moment, Which is very good news for the market. But generally speaking, midterm, We expect that battery metals will help us continuing our growth strategy. All right. Then a couple of questions about the products that you showed in the slides. First from Artem Tokarenko. Dry stack tailings, market need seems to be high, But there hasn't been any commercial orders, at least published, I think. Why and when this could be changing? There is a big need and trend in terms of tailings management. But we need to also realize that this has been politically driven Recently and in the past. So always as always, it's difficult if something is not driven by business and economical reasons, but by political reasons. So that actually led to the point that we haven't seen So many orders from this end. But what we see and Every week, I'm talking to end customers. And just recently, when we talked to one of the big Mainz here in Europe. We talked to the CEO, and he made it very, very clear when it came to tailings and other sustainability technologies that this is a key decision making factor going forward. So we will continue our journey with sustainability offerings For two reasons. 1, we are personally convinced this is the right way to do for our environment and 2, it suits our business. And next question from Andreas Amorin about the new Concorde product. Is it applicable to lithium mining? Well, this offering is to do with the particle size of any rock. So it's nothing to do with the all the lithology. So which type of rock you have, it is if you are in fine particle size separation, If you apply flotation, you can use, Concorde flotation for it. So the question is yes. The answer is yes, sorry. And then John Buckland continues with the Concorde. Can it be used to reprocess old tailings? And how big opportunity that could be? It can, provided the particle size is right. So it must be fine particles. It cannot go to the medium size or to the coarse where typical flotation has been used in the past. And then John has another question about the visual rock camera. Is that And adjustable crushing chamber unique? And does such a system make screens obsolete? I'm not 100% sure what all of our competitors are doing. And honestly speaking, I focus on our business. So but maybe after this presentation, others will start that journey as well, looking into smart crushes. But I think we I can say for certain we are having a leading edge here. So we're definitely a trendsetter in this regard. And the what was the second part of the question, sorry? Does it make screens obsolete? No. It does not make screens obsolete because you still need to bring the different particles and different fractions. All right. Next question from Klas Bergelind. You want to grow the aftermarket Outside your own installed base, what is the opportunity here? And can you mention any examples? Yes, I think the opportunity is really to first of all, it comes from possibility to add value to customer operation. And In certain products, that is something that we have been doing already a good few years. Partly, for example, there was a time when a customer was buying grinding mill from Ottotec at that time. But at the same time, he was asking Metso to supply the first installation liners for that mill. So that has been happening already in certain products. And the opportunity is really in that sense that it increases the potential market out there. That's what it is. All right. Next up is Thomas Skogman. Your CEO has said that the sales funnel is very healthy. Are now talking about mining equipment. Do you expect things start moving? Or is the 2nd wave of corona postponing all big decisions to 'twenty one? I mean, as mentioned earlier, we have a very healthy and still strong inquiry rate. So we get inquiries from companies, from EPCs, from mining customers. The only impact or the significant impact which we have, which we see at the moment from corona is that to realize this project takes longer. So there is some delay, but the projects are not getting at least a significant amount of these projects, they are not getting canceled. So the pipeline and Pekka was writing saying that the pipeline is still strong. It takes a little bit longer, and that's why we have Seeing somewhat lower results in Q3. Then going back to the aftermarket and a question by Charles Glass, talking about replacement cycle in installed base. Could you elaborate that Term, in your specific installed base, how does the replacement cycle work? And is it now kind of visible as we speak? That is, of course, partly also related to capital equipment because sometimes you replace the complete equipment. But with the variety of portfolio, that time span can be long. Some equipment like analyzers, You replace and refurbish regularly. And then you have other products in, let's say, Softer conditions where the life length can be tens of years. So there is No simple answer on that. But what we definitely do in service is that When we productize our aftermarket offering, we now try to predict those major overhaul points where every equipment at some point, They need major overhaul. And once you know how they are utilized, how many hours they have behind, you can proactively then start picking those bigger overhaul opportunities to extend the lifestyle equipment but also capture bigger part of that opportunity. Okay. Robert Davies of Morgan Stanley asks, How do you think about selectivity when it comes to project orders? How much growth are you willing to pass up to ensure that you are getting higher margins. Obviously, we need to be selective. We are such high thought after by our customers, we have such high inquiry rates that we have always been choosing picking and choosing. We are not able to work on all of the inquiries which we have. And the Criteria to select are quite obvious. I mean, profitability is one of those, but then there are also strategic reasons why you would choose one inquiry above another inquiry. So that's not new to us. We have Being selective in the past, and we will do so going forward. Then a follow-up from Robert. Thinking Thinking about delivery of your 20% margin in Minerals, how big impact the mix has on that? And could you elaborate, maybe not going into specifics about margin differences between different product segments, both OE and Aftermarket. I can start, but then please, Marc, and Samuel, you can chip in. I mean, We have been improving on our capital equipment margins significantly in the past. We are on a good level. We are definitely not as equipment the driver for 20%. But At the end of the day, and that's why we stand the 3 of us stand here, we work as a team. So it's important that we have a strong installed base. It's important that we show expertise and have a good reputation in the market. And then it is important To provide this end to end service to the customer, it's not just the equipment and the expertise. It's then The aftermarket business, field services, maintenance services and then spare and wear parts. So at the end of the day, when we want to achieve 20%, and we will, this is a joint effort, and this is a segment result. I think maybe to add that, of course, from business performance, it is important to know the profitability of different operations. But looking at some outside and from customer point of view, of course, the segment profitability is the number to look at because internally, we can actually decide to split our internal cost in a different way, which impacts the profitability of individual businesses, but the total profitability will not change. And for us to get up to 20%, that We'll actually require improvement from all of us. Exactly. Probably to add, when we look at inquiries, When we look at profitability, we do not just look at it from a purely equipment. This is what we see in the beginning perspective. We look at the full picture. So we look at the life cycle opportunity here, and it may well be that We would actually accept an equipment order, which is not highly attractive, but In the full picture, with aftermarket services, it is highly attractive. So we work as a team. Then a couple of questions about the standardized and modular offering, first from Magnus Kruber. How big proportion of your offering today is standardizedmodularized? That's a difficult question. And honestly, I cannot give you a percentage number. When it comes to our Our products, being at grinding mills, being at crushers, being at filters, flotation, pumps, Screens, they are highly standardized, and we can do better. We are working on improvements. They're highly Standardized. And as I said earlier, our solutions, we are already standardizing the solutions as well. I showed you the modularized Plant, with the crushing and screening plant for iron ore in Australia, I showed the example of the filtration Plants or process islands, and we have the same for flotation equipment. So, again, I'm missing the number. I think we've never run the statistics, but It's quite significant, and it will increase. It has to. I think what Stefan already mentioned, of course, depends on some products like pumps and analyzers. We are 100% productized already. And then we have other areas where we cannot achieve that. But even there, take maybe an example from Minerals area, Flotation cells. It is very difficult from the process point of view to standardize the size of the flotation cell, But you can use standardized components when you are building up 1. So I think the level can improve. In some areas, we are already at good level. In some areas, there is room for improvement. John Buckland continues with the modular and standardized team. Can this type of equipment be retrofitted into old existing plants when they need to be modernized? And have you seen demand for such Orders already. Should I take that, Peter, please? Yes. Of course. I mean, we have retrofits For various offerings and part of the equipment various equipments, we do, yes. I think I mentioned flotation last in my previous comment. I think there is a typical example of this float force that we can actually retrofits to existing older flotation cells to improve the performance. That is typical, an upgrade or improvement project that you can do to standardize but also significantly improve performance. Another example is car dumpers For the coal or iron ore industry, where we also do a lot of retrofits. All right. Thank you. We are some minutes past the hour, so I think we need to stop here. I'll make one more comment because there's been questions About recycling, and term recycling has been discussed in both Aggregates and Minerals presentations, But let's make it clear that this is different type of recycling than what our specific recycling business that we have decided to divest is doing. So that is Certain type of metal recycling and waste recycling, what aggregates does in recycling or minerals, It is that industry and business specific, so there's no such overlaps and divestment of recycling is result of different type of drivers than what we have discussed here in the industry presentations. But as I mentioned, we have now used our time and going through the presentations. So we thank you for participation and sending questions. We couldn't go through them all, given the time We couldn't go through them all given the time limits, but we do thank you for your interest. This was a virtual event due to the circumstances today. We would have loved to see your smiles in front of us, But we'll wait for next time when we can arrange CMD and the next time we see you all in other events. But with these words, I'll give the final words to Pekka. So thank you for listening for us for the past 4 hours. As you see, I mean, We have been working on a strategy. We have a clear strategy now for the company, And we are focusing very much on 2 value chains, aggregates and the Metals Minerals and Metals value chain. We have emphasized several times during throughout the presentations and today, the role of services in our business and role of products. That is a journey that we have started, and we will follow the roadmaps that we have. The financial targets that we have set ourselves, They are ambitious targets. We are committed to delivering them. And the integration work that is ongoing has started well. We committed to take that all the way to the end, and that will deliver a great deal of the financial performance that we need in a Tier 1 company. We've seen that aggregates and Minerals are already delivering improved profitability, but there's more room to go. The Metals business, There is a turnaround program that we will initiate very, very soon, currently putting that program together. And recycling, we announced that we will divest the recycling that we currently do. There's other recycling opportunities, as Juha Was here at the end mentioning. The businesses will continue to differentiate their offerings. Sustainability will be one of the drivers to further differentiate. We are already a sort of a net positive in terms of emissions. We'll continue to reduce our footprint. We continue to improve and increase our handprint, and that will keep us net positive and growingly net positive in the future as well. Culture. Two companies getting together like we've done. We need a new culture. We need new Metso Autotech culture. We've established a set of values that are aligned very much with our top priorities, Values that are very much in line with our ambitious targets, and we are in process now building it bottom up with the guidance of our values. That will make a difference, and that will make this organization to perform. Last but not least, this is the team that will deliver. This is the management team. The team is supported by 15,000 professionals of Metsoe Auto Tech in different parts of the world. We are a leading company in this business. We have seen that one through the presentation. We are we have globally number 1 position in all three businesses That we have. And we have a great deal of improvement potential and business targets and a very well motivated, enthusiastic team and entire personnel at Metso Autotech. Please keep us keep following us. There will be interesting future ahead of Thank you.

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