Leveraging our market leadership. Pasi Laine, President Pulp, Paper and Power Capital Markets Day December 11, 2012 Vantaa, Finland

Transcription

1 Leveraging our market leadership Pasi Laine, President Pulp, Paper and Power Capital Markets Day December 11, 2012 Vantaa, Finland

2 Content 1. Our leading position 2. Market update 3. Achievements and future agenda 4. Our strategic focus 2

3 Our leading position

4 Extensive offering in biorefining technologies translates into strategic partnerships We enable our customers to increase their use of renewable raw materials We work closely with our customers to continuously bring new and fit-for-purpose products and processes to the market We have the widest offering and most extensive experience in pulp, paper, bioenergy, and new biotechnology solutions 1-9/2012 Net sales EUR 2,089 million EBITA before NRE EUR million Orders received EUR 1,767 million Pulp, capital Power, capital 31% Orders received by area, EUR million, 2011 North America South America 28% ,098 14% % Paper, capital Services business 855 EMEA China Asia- Pacific 4

5 We are based close to our customers Over 100 locations in 26 countries Lapua,Kiuruvesi Sävsjö Juankoski,Varkaus Västra Frölunda Sundsvall Jyväskylä,Jämsänkoski Örnsköldsvik Husum Tampere,Valkeakoski Thunder Bay Gävle Hagfors St. Petersburg Federal Way Appleton, Montreal Biddeford Borlänge Pori,Kauttua,Järvenpää Neenah Winthrop Karlstad Raisio,Kerava,Helsinki Darwen Beloit Stoughton Solna Clackamas Haslingden Gothenburg Tallinn Clarks Summit Fairmont Williamsport Partington Steti Moscow Florence Chicopee Lodz Charlotte Pasly Plattling Warsaw Aiken Frydek-Mistek Columbus Lancaster Atlanta Cernay Como Pfungstadt Baton Rouge Bordeaux Vienna Ovar Gorizia Zaragoza St. Germain en Laye Lisbon Over 100 service locations 51 sales offices 30 production units 14 technology centers 12,500 employees Gurgaon Hyderabad Chennai Beijing Tianjin Jinan Zibo Seoul Xi an Tokyo Daejeon Wuxi Okayama Shanghai:Jiading,Waigaoqiao Guangzhou Laem Chabang Ho Chi Minh City Singapore Jakarta Santiago Concepción Belo Horizonte Sorocaba Araucária Durban Botany Bay Melbourne Auckland 5

6 We continuously invest in R&D Contribution and resourcing Annual spend of EUR 70 million Over 600 R&D specialists Pilot and research facilities Pulp Chemical, mechanical and recycled fiber pulping Bleaching Air systems Paper Paper and board machines Tissue machines Coating, calendering and winding Air systems Printing in cooperation with the Forest Pilot Center Power Power generation 6

7 Our strong offering is expanding Pulp & paper customers Power generation customers Examples of recently launched products and concepts: Gasification OptiConcept M technology Pyrolysis Metal belt technology Lignin extraction New coating technology Prehydrolysis Over 100 new service products 7

8 Market update

9 Services Good opportunities for growth Changes in the market environment - Demand for support and services stable - Customers focusing on core competencies and outsourcing maintenance and services Services will grow - Demand is growing in China, South America, and Asia-Pacific - Market share can be increased through combining process and technology expertise Implications for Metso - We can increase our market share in the outsourcing market due to our large portfolio and extensive know-how base - We can create growth in the service market even in the markets that are seeing declining paper volumes 9

10 Pulp Virgin wood pulp consumption is forecast to grow 1-2% per year Demand for pulp continues good New capacity will be built to - replace production that has been shut down - supply new paper and board capacity Metso is one of the two full-scope global suppliers for the pulp-making industry Case Suzano Maranhão, Brazil - Complete 1.5 Mt/a pulp mill - Engineering, procurement and construction (EPC) delivery - Metso selected because of its strong local presence with proven experience in turnkey deliveries - Start-up in the second half of 2013 Source: Pöyry (Oct 2011) 10

11 Paper Board and tissue consumption is continuing to grow Metso is well-positioned through focusing on - services, rebuilds and the bio business - production in cost-competitive countries - board- and tissue-making processes - fit-for-purpose products Case Fujian Liansheng Paper PM 6, China - New OptiConcept M technology - Will produce fluting in the range of g/m 2 - Wire width 7.25 m, design speed 1,200 m/min - Start-up in early December 2012 Source: Pöyry (Oct 2011) 11

12 Bioenergy Market on a growth path, but policies will affect pace of realization Europe is the biggest market, but the financial crisis has affected decision-making and subsidies policies North American biopower market has slowed down, due to low gas prices and political uncertainties In Asia, subsidy systems to support biomass utilization are being developed; China has the largest market potential Case Keuruun Lämpövoima, Finland - Biomass boiler plant for combined heat and power production - Bubbling fluidized bed (BFB) technology - Main fuels: forest chips and milled peat - Generates15 MW of district heat and 5 MW of electricity Biomass and waste energy boiler market E ( B) Asia South America North America Europe Source: Ecoprog, Frost & Sullivan CAGR % 12% 9% 5% 12

13 New biotechnologies Range of new technologies are being implemented Gasification - Gasification of wood chips or agricultural waste and co-firing the gas in PC boilers Case Vaskiluodon Voima Oy, Finland - Gasifier solution for an existing power plant % of coal can be replaced with renewable energy - Wide range of fuels and coal co-combustion provide flexibility - 100% coal capability maintained - Existing assets utilized and power plant life-time extended Pyrolysis - Flash-heating biomass in a fluidized bed boiler without oxygen, resulting in bio-oil that can replace heavy fuel oil Case Fortum Oyj, Joensuu, Finland - Demonstration plant to produce bio-oil by pyrolysis from forest residue and other biomass - Bio-oil can be used instead of heavy fuel oil - Annual production will be 50,000 tons from 225,000 m 3 of forest residue and sawdust - Helps reduce CO 2 emissions by 59,000 tons per annum - Turnkey delivery, start-up in autumn

14 New biotechnologies Range of new technologies are being implemented Chemical and bio-chemical conversion - Second-generation ethanol to be used as transportation fuel Case Clariant, Straubing, Germany - Prehydrolysis stage installed in a demonstration plant to produce second generation bioethanol - Production of 1,000 tons per annum climate-friendly cellulosic ethanol from around 4,500 tons of agricultural waste Lignin extraction - Debottlenecking recovery boilers to replace fossil fuel - Potential in refining value-added products Case LignoBoost, Domtar, Plymouth, North Carolina, USA - World s first commercial LignoBoost plant will come on-stream in early 2013 as an integrated solution at an existing pulp mill 14

15 New biotechnologies Range of new technologies are being implemented New paper and board grades - Light-weighting through metal belt calendering and pressing - Improving surface properties through new coating methods Case Ji an Group, Jiaxing City PM 3, China - Allows use of brown base sheet instead of conventional structure with g/m 2 of bleached pulp - No compromise results in terms of printing and physical properties can be achieved with lower production costs 15

16 Our achievements and future agenda

17 Main achievements and future agenda Main achievements in 2012 Agenda for 2013 Profitability on a satisfactory level Return on capital employed remained healthy Footprint development in the paper capital business Commercialization of new biotechnologies, e.g. gasification, pyrolysis and LignoBoost Technology leadership in paper- and boardmaking boosted through new capital and service products Long-term contract based on service and successful combination of service contracts with capital deliveries Winning new pulp mill orders Completing the Suzano Maranhão project New products and service offering with focus on the mid-market segment Services growth through contract-based activities and local presence Moving forward in commercializing and developing biotechnology Improving cost competitiveness and productivity Increased purchases, engineering, and manufacturing in cost-competitive countries Strengthening our presence in Asia-Pacific and South American growth markets 17

18 Pulp, Paper and Power in the target range EUR million 3,500 3,000 2,500 2,000 1,500 1, Target EBITA 6%-9% EBITA% * target range % Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Services net sales, rolling 12 months Capital net sales, rolling 12 months EBITA% *, rolling 12 months 0 *) before non-recurring items 18

19 Our strategic focus

20 Our vision Working as one to be number one in biorefining technologies Customers Life-cycle services close to the customer New Bioenergy Pulp Paper biotechnologies Leading know-how for biorefining: Transforming renewable raw materials into recyclable products and renewable energy 20

21 Biorefining technologies Transforming renewable raw materials into recyclable products and renewable energy Customer industries Endproducts Power generation Biofuel refining Pulp & Paper Biogas Biofuels Nanocellulose New paper grades Heat Electricity Chem pulp Diss pulp Mech pulp Paper Board Tissue Metso services and customer support Metso technologies and solutions Power generation Gasification Pyrolysis Pulping recovery Paper, board and tissue making Raw materials Raw materials Waste Agro Wood Recycled paper 21

22 Implementing the strategy 1. Services Improve our services market share and profitability with new service offerings and increased market penetration. 2. Growth in areas Strengthen our area organization capabilities to drive growth by working closely with our customers. 3. Technology Maintain our leadership position with new products and increase our focus on fit-for-purpose and service solutions. 4. Global operating Improve our competitiveness by reducing costs and increasing our processes cost-competitive country presence. 5. People Build capabilities and competencies close to our customers. 6. New biotechnology Develop and commercialize new biotechnologies. business 22

23 Aiming to be number one in biorefining technologies Strategic objectives Maintain our leading position in the marketplace Keeping profitability at target range Services and the bioenergy business offer the biggest growth potential Growth markets: South America, China and Asia-Pacific We will improve our competitiveness by increasing productivity and our presence in cost-competitive countries and by developing solutions for changing demand 23

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