Sustainable use of Earth's natural resources - Q1 2017 IR presentation - Outotec
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Sustainable use of
Earth’s natural resources
IR presentation
Q1 2017
Safety performance
Outotec global safety statistic • Lost Time Incidents per million
12-months running average
working hours (LTIR) includes
14
Outotec employees and
12
Lost Time Incident contractors working under
Rate per million hours
10 Total Recordable Incident Outotec supervision.
8 • Since 2015, Outotec has had
6
less working hours than in
2013-14 when there where
4
large projects with
2 extraordinary safety
0 performance compared to
global peers.
2 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reserved
Outotec at a glance
Business overview Financial performance
EUR million Sales Operating profit margin %
• Outotec is a global leader in minerals and metals processing 2400
2,087
12
10
technology, deliveries to more than 80 countries 2000
1,912
8
• Outotec designs and delivers tailored solutions for minerals and 1600
1,218
1,386 1,403
1,201
6
metals processing, water treatment, and waste-to-energy 1200 1,000
878
970
1,058 4
740 2
800
• Delivers solutions which minimize the plant’s lifetime cost by 0
maximising recovery and utilizing less energy and water. 400
-2
0 -4
• HQ in Finland, some 4,200 employees (2016) in 34 countries 2006 *) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
*) Combined basis 2010 onwards aEBIT, excl. restructuring and acquisition-related
costs as well as purchase price allocation amortizations.
Key figures Geographic coverage
FY 2016 FY 2015
Net Sales, EUR million 1,058 1,201
Share of services in sales, % 42 43
Gross Margin, % 22 28
Adjusted EBIT, % (excl. one-time items) -2 5
Gearing, % -1 10
Equity ratio, % 40 31
Balance sheet total, EUR million Outotec R&D, sales and service centers
1,427 1,531 Outotec manufacturing/assembly
3 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reserved
A century of accumulated expertise 1/2
4 Q1 2017 OUTOTEC
OUTOTEC IRIRpresentation
presentation
© Outotec – All rights reserved
A century of accumulated expertise 2/2
5 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reserved
Minerals Processing segment’s offering
A complete portfolio of leading process solutions and services with full plant delivery capability
Grinding Flotation Thickening Filtering Analyzers Automation Tailings management Services
Water
Technology
1,100 grinding 10,000 flotation 1,800 thickeners 3,500 filters Full analyser Unique Full process Prop equipment
mills delivered, units delivered delivered, global delivered, most portfolio, lowest combination of and equipment and total
strong in S/M since 1960s,big project efficient min detection automation & portfolio, process
size mills and cell technology execution concentrate limits, only Xray analysers, effluent knowhow,
process references, capability, filtering, proven used important for risk treatment and global service
technology automation feedwell design performance management backfill plants network
Competition fragmented, a number of players competing in part of the portfolio
FLSmidth, CITIC, FLSmidth, Metso, FLSmidth, Tenova- Aqseptence- Thermo Fisher, APC: Metso, FLSmidth, Golder, Customers own
Metso, BGRIMM, Tenova, Delcor, WesTech Diemme, Metso, BGRIMM, Blue Cube Woodgrove, SGS GR Engineering, maintenance,
ThyssenKrupp Woodgrove Andritz, FLSmidth Minerals AMC Major tech.
suppliers, Local
DCS: Major DCS
companies
suppliers
6 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reserved
Metals, Energy & Water segment’s offering
Industry-leading technologies, process solutions and services
Alumina, Sulfuric acid/Off- Energy
Ferrous metals Ferroalloys Base metals (Cu, Ni, Water Services
Aluminum gas/Roasting Zn, Au, Ag, PGM)
Alumina calciner, Sintering, Pelletizing, Smelting, Sulfuric acid plant, Smelting, Converting, Waste-to-energy, Industrial water Advisory, maintenance,
Green anode plants, Direct Smelting Preheating, Steel Roasting Leaching, SX/EW, Sludge incineration, treatment, municipal operations & remote
Rod Shop Belt Sintering electrorefining Oil shale processing water systems services, upgrades
Strong in CFB Over 60% of the Strong in Ferro 650 acid plants Strong in Cu Versatile waste- Effluent Shutdown
Aluminium world’s pellets are Chrome, 20 and 270 non- smelting, anode to-energy treatment plants, services, best
Calcination and made with pelletizing and ferrous roasting casting, SX and Zn solution, over backfill plants, suited to provide
HOT Tube Outotec’s sinter plants and plants leaching, strong in 250 materials water recycling services for own
Digestion travelling grate 9 smelters for Ni smelting and used technologies
technology ferroalloys EW
Competition fragmented, a number of players competing in part of the portfolio
Fives, FLSmidth, Kobelco, Metso, SMS Siemag, GEA Bischoff, Glencore Valmet, Andritz, Veolia, GE Water, FLSmidth, Metso,
Metso, Primetals, Jemeco Tenova, Jemeco MECS Technology, Tenova Babcock&Wilcox Suez major tech suppliers,
Aqseptence- locals and customers
Diemme
7 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reserved
Long-term customer relationships with the industry’s top
companies
Selected reference customers of Outotec
Local mining and metallurgical
Major global mining companies Intermediate sized companies
companies in emerging regions
In history, top ten customers have accounted for some 35% of sales.
8 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reserved
Offering industry’s most sustainable processing technologies
Our handprint is bigger than our footprint
Thousands of tons of CO2-equivalent
5,870
The90th
most
sustainable
5,469 Environmental
5,400 company in the
Goods and
world (2017)
Services equals
5,067
to90% of
orders (2014-16)
45 35 34 26
2013 2014 2015 2016
Handprint: Greenhouse gas emissions avoided
through use of Outotec’s technologies
Footprint: Outotec’s greenhouse gas emissions
9 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reserved
Metals demand is forecasted to grow 2-4%
SUPPLY DEMAND
Share of Outotec sales by 2016F 2016F CAGR% Increase,
end product Production, Mt Consumption, Mt 2015-25E Kt/a
Aluminium 57,8 57,6 2,7 % 1692
Copper 22,5 22,3 1,8 % 419
Zinc 14,0 14,5 2,4 % 367
Nickel 2,0 1,9 1,4 % 29
Copper 28%
Iron 11%
Nickel 5%
Aluminium
11%
Zinc
2%
Precious Metals
12%
Energy and environmental
solutions* 12%
Ferroalloys 3%
Other Metals 0%
Others 16%
2016
* Incl. water, sulfuric acid and off-gas
Source: Wood Mackenzie, Morgan Stanley, Outotec analysis
10 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedDeep downcycle expected to turn into a decent growth
Total Capex per type, MUSD +8%
-51%
150 000
140 000
130 000
120 000
110 000
100 000
Project visibility gap
90 000
80 000
70 000
60 000
50 000
Including greenfield
and brownfield expansion
40 000
30 000 30 000
20 000
10 000 Sustaining capex
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Woodmac, June 2016
11 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMaintenance Capex to remain flat, expansion Capex
expected to grow esp. in copper, gold, zinc and nickel
Sustaining capex Expansion capex
per metal per metal +14%
0%
-25%
40 000 110 000 -63%
105 000
100 000
35 000 95 000
90 000
Lead 85 000
30 000
Alumina 80 000
Project visibility gap
75 000
Aluminium
25 000 70 000
Zinc
65 000
Nickel 60 000
20 000 Iron Ore 55 000 Lead
50 000 Alumina
45 000
Zinc
15 000 40 000
Nickel
Gold 35 000
30 000
Aluminium
10 000
25 000 Iron Ore
20 000 Gold
5 000 15 000
Copper 10 000 Copper
5 000
0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Woodmac, June 2016
12 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMining and metals production country ranking – Cu, Zn, Ni
13 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMining and metals production country ranking – Al, Au, Fe
14 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedLong-term financial targets - Road map to 2020
Best aEBIT*
R&D,
Current cost Efficiency 10%
aEBIT* Services Design-to-
country 2020
cost
sourcing
Annual average
service sales growth
5-15% (incl. M&A)
Gearing at max 50%
* Excluding restructuring and acquisition-related costs as well as purchase price allocation amortizations.
15 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedService sales target
Average growth 5-15%
(June 7, 2016)
Split in services, 2016
Grow performance services
O&M (incl. spare parts) Spare parts
Shutdown services
Grow spare & wear parts business
42% of
Modernizations sales*
Strengthen service capabilities and intensity
Technical services
Customers need services that improve productivity and reduce opex
* Target: 40%+ over the cycle
16 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedQ1 2017 financial information
17 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedQ1 in a nutshell
Low level of
advance
payments and
mature order
backlog impacted
Improved order Fixed cost cash flow
intake: savings and
equipment, higher sales
plant and service improved
orders increased profitability
Good
performance in
MP
MEW’s
profitability weak,
cost savings
continue
18 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedImproved order intake, markets in EMEA and Americas most
active
Americas 35 (29) % EMEA 53 (46) % APAC 12 (25) %
Filtration plant to copper Aluminium technology to
concentrator expansion in Peru Bahrain N/D
>15 M€
EUR million
COPPER Aluminium 400
300
115 Service orders
Zinc plant technology to Mexico
Approx. 24 M€ 200
Capex orders
102
ZINC 100 203
68
MP MEW
order order 0
Q1/2016 Q1/2017
19 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedSeasonality in MP orders, MEW showing signs of recovery
MEUR Minerals Processing MEUR Metals, Energy & Water
1100 1700
1000 1500
900 1300
800 1100
700 900
600 700
500 500
400 300
Order intake 6 months rolling, annualized Sales 6 months rolling, annualized Order intake 6 months rolling, annualized Sales 6 months rolling, annualized
20 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedSpare part orders increased, fewer shutdown service
contracts
• Service orders increased 13% Services
650
• Sales declined 13% due to 600
550
fewer shutdown service 500
450
contracts in MEW 400
350
• Services represent 37 (48)% of
sales Order intake 6 months rolling, annualized Sales 6 months rolling, annualized
Split in service order intake
Recurring services Shut-downs and modernizations
21 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedImproved order intake YoY, book to bill rate above one
EUR million
2 400
Roughly 2 200
EUR 680 million 2 000 EUR 1,051
to be delivered in 1 800 million, some
2017
1 600 21% services
1 400
1 200
1 000
803
800 736
600 493
532
475 452 471 491
418 419 425 426 395
371 384 350 366 318
400 299
357 344
327
380
322 268 267 281 274 283
240 235 260 269 230 266 260
202 210
200 168 139
120 106 111
170
0
Q2/2006
Q3/2006
Q4/2006
Q1/2007
Q2/2007
Q3/2007
Q4/2007
Q1/2008
Q2/2008
Q3/2008
Q4/2008
Q1/2009
Q2/2009
Q3/2009
Q4/2009
Q1/2010
Q2/2010
Q3/2010
Q4/2010
Q1/2011
Q2/2011
Q3/2011
Q4/2011
Q1/2012
Q2/2012
Q3/2012
Q4/2012
Q1/2013
Q2/2013
Q3/2013
Q4/2013
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
Q2/2015
Q3/2015
Q4/2015
Q1/2016
Q2/2016
Q3/2016
Q4/2016
Q1/2017
Order backlog at the end of the period Share of unannounced orders Order intake by quarter
22 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedSales reflecting increased equipment orders in 2016
In
Q1 Q1 Change,
EUR million 2017 2016
comparable
% currencies
Sales 268 240 12% 7%
Service sales 99 114 -13% -18%
Share of services in sales, % 37 48
Gross margin, % 23 24
*
Adjusted EBIT 1 -5
*
Adjusted EBIT , % 0 -2
- Restructuring and acquisition-related costs -0 -6
- PPA amortization -2 -2
EBIT -1 -12
EBIT, % -0 -5
Result for the period -3 -12
Unrealized and realized gains related to valuation
of FX forward agreements 2 1
* Excl. restructuring and acquisition-related costs and PPA amortizations.
23 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMinerals Processing - further improved performance
• Equipment orders increased, order
intake up 40%
• Sales increased 36%
• Profitability improved
Minerals Processing Q1 Q1 Change, In comp Sales and adjusted EBIT development, quarter
EUR million 2017 2016 % currency, % 350 20%
Sales aEBIT*, % 18%
300
Order intake 146 104 40 35 16%
250 14%
Sales 153 113 36 31 200 12%
10%
Service sales 68 64 6 -0 150 8%
*) 100 6%
Adjusted EBIT 11 5 4%
50
Adjusted EBIT*), % 7 4 2%
0 0%
Unrealized and realized
Q1/2012
Q2/2012
Q3/2012
Q4/2012
Q1/2013
Q2/2013
Q3/2013
Q4/2013
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
Q2/2015
Q3/2015
Q4/2015
Q1/2016
Q2/2016
Q3/2016
Q4/2016
Q1/2017
gains/losses related to valuation
of FX forward agreements -0 2
* Excl. restructuring and acquisition-related costs and PPA amortizations
24 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMetals, Energy & Water – order intake improved but result
still negative
• 161% increase in order intake
• Sales declined 10% due to low opening
order backlog
• Profitability weak, savings actions
continue
Metals, Energy & Water Q1 Q1 Change, In comp Sales and adjusted EBIT development, quarter
EUR million 2017 2016 % currency, % 400 20%
Sales aEBIT*, %
Order intake 172 66 161 160 350
10%
300
Sales 114 127 -10 -12 0%
250
Service sales 30 50 -39 -40 200 -10%
Adjusted EBIT *) 150
-9 -9 -20%
100
Adjusted EBIT*), % -8 -7 50
-30%
Unrealized and realized 0 -40%
Q1/2012
Q2/2012
Q3/2012
Q4/2012
Q1/2013
Q2/2013
Q3/2013
Q4/2013
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
Q2/2015
Q3/2015
Q4/2015
Q1/2016
Q2/2016
Q3/2016
Q4/2016
Q1/2017
gains/losses related to valuation
of FX forward agreements 3 -1
* Excl. restructuring and acquisition-related costs and PPA amortizations
25 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMature order backlog, timing, and low level of advance
payments impacted cash flow
Q1 Q1
EUR million
2017 2016
Result for the period -3 -12
Adjustments
- Depreciation & amortization 10 10
- Other adjustments 3 7
Change in working capital -42 -37
Interest -1 0
Taxes -2 -2
NET CASH FROM OPERATING ACTIVITIES -34 -34
NET CASH USED IN INVESTING ACTIVITIES (incl. Capex and acquisitions) -4 -3
Repayments & borrowings of non-current debt -0 -60
Hybrid bond - 150
Interest paid on hybrid bond -11 -
Other financing activities 11 -0
NET CASH FROM FINANCING ACTIVITIES -1 90
NET CHANGE IN CASH AND CASH EQUIVALENTS -39 53
Foreign exchange rate effect on cash and cash equivalents 2 -2
Cash and cash equivalents at March 31 195 352
26 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedLiquidity and equity remained solid
Q1 Q1
2017 2016
Net interest-bearing debt*, EUR million 44 -69
Gearing*, % 9 -13
Equity-to-assets ratio*, % 39 41
Return on investment, %, LTM -8 -2
Return on equity, %, LTM -12 -6
Working capital at the end of the period, EUR million 18 -58
Advances received 178 229
Equity, EUR million 490 538
Balance sheet total, EUR million 1,422 1,556
* If
the hybrid bond were treated as a liability the net interest-bearing debt EUR 194.1 million, gearing 57.1% and equity-to-
assets ratio would be 27.4% (March 31, 2016: EUR 80.5 million, 20.7% and 29.3% respectively).
27 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMarket outlook
MP opportunities in
process
Timing of large
improvements,
orders remains
smaller equipment
difficult to foresee
deliveries and
services Gold and copper
projects most
active, improved
activity also in
other base metals
projects
MEW technology
portfolio provides
opportunities in a
number of end
markets
28 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedReiterated guidance: The guidance for 2017 is based on
the current order backlog and market outlook, as well as
achieved cost savings
Expected sales
From backlog From new orders
in 2017 Q1 sales
~ EUR 1,050 – 1,150 = EUR 268 million + ~EUR 680
million, or 65%
+ ~EUR 100 – 200
million
million
Adjusted EBIT*
is expected to be approximately 3-5%
* Excluding restructuring and acquisition-related costs as well as purchase price allocation amortizations.
29 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedOur focus areas for 2017 - towards profitable growth!
• Continue to win orders in a competitive
market
• Continue cost savings to reach stability in
Growth the Metals, Energy & Water
• Strong focus on service business, new
Services business unit since April 1
• Improve competitiveness of products
Profitability
• Strengthen customer centricity
Stability • Strategy work
30 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedInterest bearing loans and hybrid bond, repayment profile
MEUR
400
350
300
250 Hybrid bond
EIB R&D loan
200
NIB R&D loan
150 Senior unsecured bond
Other IB debt
100
50
0
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
31 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedMature backlog ties up capital
EUR million %
300 1,60
1,40
200
1,20
100
1,00
0 0,80
0,60
-100
0,40
-200
0,20
-300 0,00
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2017
Working Capital CAPEX Free cash flow Book-to-bill (Order intake / Sales)
32 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedPOC and cash flow profile example
Timing of large project completions affects quarterly earnings
MEUR
120
0% 100%
Percentage of Completion, %
Timing of large project
100 completions, and
Total order backlog possible release of
structure in 2015 provisions, affects
quarterly earnings.
80
Total order backlog
60 structure in 2012
Advance
40 payment
~10-30%
20
0
Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
POC Cumulative cashflow
NOTE: The figures are illustrative and vary project by project
33 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedEquity to assets ratio, gearing and liquidity at healthy
levels
Equity to assets ratio Gearing
50,0 20,0
45,0 0,0
40,0
- 20,0
35,0
- 40,0
30,0
- 60,0
25,0
- 80,0
20,0
- 100,0
15,0
- 120,0
10,0
5,0 - 140,0
0,0 - 160,0
Dec 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2017
Cash at hand 171 291 318 258 280 403 359 324 282 301 233 195
34 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedCustomer solutions
35 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedLaiva Gold mine in Finland
Customer case, ore sorting
Customer challenge
• Mine is closed because of low head
grade ore
• Study completed around Outotec ore
sorting solution considering reopening
the mine
Outotec solution
• Outotec sensor-based ore
sorting solution removing Study indicates that the Outotec ore sorting solution
waste rock and improving the enables reopening the mine:
head grade. “The economic assessment for the Laiva Gold Mine
• When waste rock is removed indicated the potential for restarting the site, which
there is less ore feed to the can be operated on a long-term basis at a broad
crushing and grinding circuit, range of commodity prices. Base-case net present
reducing energy and water value of €77 million, producing 529,000 troy ounces
consumption of gold over a seven-year mine life.”
36 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedReducing mill downtime at a gold mine
Customer case, comminution
Customer challenge
• Excessive grinding mill downtime during the year Customer benefits
leading to decreased yearly production • 50% less downtime due to mill
• Unplanned mill downtime due to liner failure maintenance
• Inadequate tooling • In total a reduction of 170 hours
• Limited reline shutdown planning of reline incurred downtime
• Coordination between different maintenance • Safer, less labor intensive relines
vendors • Circa 12-14 million USD in
• In total of over 340 hours downtime additional production revenue
due to mill maintenance
Outotec solution
• Pre shutdown planning
• Liner redesign – to reduce the number of pieces
• Tooling improvements – liner handler, skid steers & hand tooling
• Changes to liner fixtures & fittings
• Continuous Improvement Program
• Optimizing liner life time through Outotec patented MillMapper™ software
37 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedHIGmillTM fine grinding for FQM Kevitsa
Customer case, comminution
Customer challenges Outotec solution
• Fine valuable minerals • Mineral analysis showed very fine grind < 20 micron required for
and difficult to recover copper & nickel liberation
• 12% copper not • Outotec conducted laboratory HIGmill fine grinding and mineral
recovered in copper recovery (flotation) tests
circuit due to poor • HIGmill chosen as most energy efficient and smallest footprint
liberation technology on market today which would improve mineral recovery
• If liberation poor, and grade
copper-nickel • Installation & commissioning only 2 weeks in Feb 2015
separation insufficient • Outotec provided ramp-up and operation support
• Existing plant in arctic
circle with limited
footprints Customer benefits
• HIGmill improved overall plant performance
• Copper loss to nickel circuit improved from 12% to 8%
• Overall copper recovery increased by up to 1.5%
• 1.5% increase represents around $1million increase in final
copper value, after smelting and refining to produce LME grade
copper
• Improved concentrate grades
• Less nickel in final copper concentrate
• Less copper in final nickel concentrate
• Installed & commissioned without effecting production
• HIGmill allowed coarser primary grind and hence higher plant
throughput
• More metal out of same ton of ore < 2 year payback
38 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedTurn-key flotation retrofit with fast turnaround
Customer case, flotation
Customer challenge
• Poor flotation performance in terms of copper and gold recovery Customer benefits
• Flotation circuit had poor availability • Greater stability and control of flotation cells
• Substantial maintenance requirements • Significantly decreased energy consumption
• Limited time available for shutdown with Outotec cells (40%)
• Minimized production losses during
installation and commissioning
• Increased flotation circuit availability, leading
to increased production
• Improved recovery of coarse particles
Outotec solution
• In-depth metallurgical assessment identified large improvement potential in the
flotation plant
• Retrofit of 10 x 160 m 3 flotation cells
• A full turn-key delivery
• Advanced operator training with Outotec´s Virtual Experience training
39 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedDigitalization creating new growth and opportunities -
managing water balance and quality at mine sites
Solution: Intelligent digital solution for monitoring and managing data
on the mine site’s water balance and quality.
Alternative Mitigation
water of risks
sources
License
Stable to
Access
process operate
to water
Online Digital Modeling & Predictability
monitoring platform simulation & reliability
Value: Sustainable balance of water supply and consumption,
while stabilizing production and reducing business risks.
40 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedHolistic process water management reduces
operational risks, OPEX and effluents
* Example of 20 Mt/a Cu concentrator water balance
in Chilean climate using paste tailings, price of raw
water 4 USD / m3.
With higher closure rate
• Reducing raw water need
• Reducing process variations to improve yield
• Process water doesn’t need to be potable water grade
• At full closure basically no effluents
• Less socio-political risk related to fresh water
41 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedHolistic tailings management can bring significant cost
savings and reduces safety risks
• Holistic tailings management covers both
surface and underground operations. Footprint
= 100%
OPEX Footprint
• Paste and dry stacking technologies = 72%
= 100% Footprint
combined with closed water loops are OPEX
= 53%
= 75% Footprint
the best available technologies for OPEX
= 12%
= 58%
conserving water within the concentrator OPEX
= 37%
environment.
• The short and long term risks can be
significantly reduced by reducing the WET THICKENED PASTE DRY
TAILINGS TAILINGS STACKING
amount of water in the surface tailings PASTE
BACKFILL
storage facility.
42 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedCodelco Ministro Hales 1/2
Customer case, full solution
•Codelco and Outotec Customer challenges
start working together
on solving the • Ore with very high content of impurities, primarily
1991 challenges arsenic causing challenge in processing
• Commercial terms for the concentrate not
favourable for selling
•Investment decision
made
2010
•Commissioning
Outotec solution
completed • Several studies and test campaigns over the years to identify
2014
best metallurgical solution
• Complete, integrated process which is based on patented
Outotec solutions and technologies and proven Outotec
•Official inauguration proprietary equipment
2016
• Arsenic levels of the concentrate lowered without loosing sulphur
• Sustainable water and effluent treatment in challenging
environment
43 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedCodelco Ministro Hales 2/2
Customer case, full solution
Outotec delivers a complete, integrated solution from a broad portfolio of patented and
proprietary solutions, and a long history of process technology
Partial roasting
• Patented Outotec solution which
removes over 90% of the arsenic in
the ore concentrate
• Exceeding 605,000 tpa concentrate
(110%)
Gas Cleaning
• Outotec’s proprietary gas cleaning Effluent Treatment
and sulfuric acid production • Outotec’s proprietary effluent treatment technology cleans the process
technology eliminates over 99.9% of effluents and recirculates clean water back to the process.
the gaseous emission of the facility.
44 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedNorilsk Nickel, Nadezhda Flash Smelting Furnace No.1
modernization
Customer case, modernization
Customer challenge
• Changing raw material base requires dealing with low-heat value
and more complex concentrates
• Very tight implementation schedule
• Supplier responsible for providing Russian Safety Approvals
which is normally out of scope
Outotec solution
• Higher capacity feeder and concentrate burner and new furnace
cooling elements and cooling monitoring system based on Outotec
proprietary technologies
• Pre-planning and experienced personnel
• Extensive performance guarantees combined with a long-term service
contract
• Using internal and external resources to obtain Russian Safety
Approvals
• Short implementation and down time and fast ramp up after start up
45 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedPelletizing Segregation Solution
Customer case, profitability improvement
Customer challenge Outotec solution
Customer had a profitability challenge in an iron-ore • Assess to identify improvement potential
pelletizing plant in Brazil • Plant Performance Assessment
• CFD Study
• Pot Grate Tests
• Design a tailored solution
• 3D area scanning
Productivity • Double Deck Roller Screen basic design
Product • Shutdown planning
Quality • Deliver a holistic, safe & efficient implementation
• Detail design for modernization
• Retrofit new Outotec Double Deck Roller Screen
Fuel • Shutdown execution
Consumption • Verify & support performance results
• Segregation verification test
• Energy efficiency test
Delivered Value*
10.5% fuel savings
Improved productivity
2,8 M€ annual OPEX savings*
6 month payback*
*Value Assumptions: Natural Gas: € 0.37/Nm3, Antracite: € 0.12/kg
Only estimates based on pot grate tests.
46 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedERZ Zürich, sludge incineration plant
Customer case, waste to energy
Customer challenge
• Sustainable solution required to treat sewage sludge from the entire canton of Zürich,
Switzerland covering over 70 waste water treatment plants!
• March 2013 – public must approve such an investment in a referendum. 96% vote in favor,
project goes ahead
• Summer 2015 – commissioning complete and plant goes into operation. October 2015 –
official inauguration.
• Limitations for sewage sludge disposal in landfill and as fertilizer
• High transport and logistics costs for sludge containing > 70% water
• Strict emissions limits with plant location in the heart of Zürich
Outotec solution
• Self-sustaining thermal treatment of sewage sludge without additional fuel.
• Thermal incineration of sewage sludge using Outotec fluidized bed technology
• Thermal dryer using heat from the process.
• State-of-the-art flue gas cleaning system
• Phosphorus recovery possible from ash
47 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedUK moving to a new renewable energy subsidy scheme
Ending of the previous subsidy
scheme resulted in record high
order intake for Outotec Waste 6 plants &
to Energy solutions for Advanced 4 O&M (12-years)
staged gasification using
renewable fuels
1 plant,
New subsidy scheme continued to next CFD auction
be good for Outotec Waste to
Energy technologies
expected late
2016
48 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedLevenseat Renewable ltd
Customer case, waste to energy
Customer challenge Outotec solution
• UK is exporting high amounts of RDF • Waste to Energy plant in UK
to be incinerated in Europe • Gasification of waste is an environmentally friendly way of
• High landfill cost in the UK efficiently converting waste to energy
• Reliable and tested solution based on the Outotec Fluidized
bed technology with over 100 references
• 2015 Contract signing, 2017 expected start up
49 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedPerformance services
Improved equipment Improved
Improved health and Decreased Improved capital
and process environmental
safety operating cost efficiency
efficiency efficiency
Our solutions
target to
address
customer
challenges
and improve
their
performance
and efficiency
Service offering
building blocks
Advisory Maintenance Operations Remote Spare and Training
Upgrades
Services Services Services Services Wear Parts Services
50 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedShareholder information, April 30
% of shares
Shares and votes Change +/- Change %
1 Solidium Oy 27,265,232 14.89 0 0
2 Varma Mutual Pension Insurance Company 12,778,363 6.98 0 0
3 Ilmarinen Mutual Pension Insurance Company 11,234,530 6.14 0 0
4 Tamares Nordic Investments B.V. 10,192,356 5.57 0 0
5 The State Pension Fund 4,000,000 2.18 0 0
6 Keva 2,425,120 1.32 0 0
7 Outotec Oyj 1,804,401 0.99 0 0
8 Nordea Nordic Small Cap Fund 1,747,612 0.95 688,311 64.98
9 Holding Manutas Oy 1,600,000 0.87 0 0
10 Sijoitusrahasto Aktia Capital 1,000,751 0.55 0 0
11 Mandatum Life Insurance Company Limited 898,993 0.49 0 0
12 Danske Invest Finnish Institutional Equity Fund 760,000 0.42 125,000 19.69
13 Etera Mutual Pension Insurance Company 717,000 0.39 0 0
14 Security Trading Oy 625,000 0.34 0 0
15 Etola Erkki 600,000 0.33 0 0
16 Kaleva Mutual Insurance Company 550,000 0.30 0 0
17 OP Life Assurance Company Ltd 414,143 0.23 -10,000 -2.36
18 Danske Invest Finnish Equity Fund 390,000 0.21 80,000 25.81
19 Danske Invest Finland Opportunities 338,302 0.18 30,000 9.73
20 Veikko Laine Oy 330,000 0.18
51 Q1 2017 OUTOTEC IR presentation
© Outotec – All rights reservedBalance sheet reflects a stable financial position
Net debt & Gearing Equity ratio
Net debt MEUR
Gearing, % %
100 40 50
50 20 45
0 0 40
-50 -20 35
-100 -40 30
-150 -60 25
-200 -80 20
-250 -100 15
-300 -120 10
-350 -140 5
-400 -160 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Net debt, actual Gearing
53 Q1 2017 OUTOTEC IR presentation
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