Metso (METSO) Q2 2024 earnings summary

Executive summary

• Orders and sales declined 14% and 13% year-over-year, mainly due to lower volumes and delayed customer decision-making, especially in Minerals and Aggregates segments.

• Adjusted EBITA margin remained resilient at 16.9% despite lower volumes, supported by cost management and a higher share of services.

• Cash flow from operations improved significantly to EUR 152 million in Q2, though still below target, with ongoing efforts to reduce inventories and improve cash conversion.

• Sustainability targets are mostly on track, with Planet Positive sales growing faster than overall sales, but logistics-related CO2 reductions lag due to global shipping disruptions.

• Market activity remained stable sequentially, but customer decision-making was slow, especially in Minerals.

Financial highlights

• Orders received were EUR 1,162 million, down 14% year-over-year; sales were EUR 1,214 million, down 13%.

• Adjusted EBITA was EUR 205 million (16.9% margin), down from EUR 238 million; operating profit was EUR 195 million, aided by provision releases.

• Earnings per share for the quarter was EUR 0.16, and for H1 was EUR 0.31, both down from previous periods.

• Cash flow from operations improved to EUR 152 million in Q2 and EUR 309 million for H1 2024.

• Order backlog at end of June was EUR 3,091 million, down 7% year-over-year.

Outlook and guidance

• Market activity in both Minerals and Aggregates is expected to remain at current levels for the next six months, with no significant improvement anticipated.

• Minerals may see improved customer decision-making in H2, supported by favorable copper prices; Aggregates activity expected to stay lower year-over-year.