Metso Outotec Oyj : Business overview 2023

2023

BUSINESS OVERVIEW

Metso's Annual report 2023 consists of five sections:

BUSINESS OVERVIEW

FINANCIAL REVIEW

GRI SUPPLEMENT

2023		2023		2023
BUSINESS		FINANCIAL		GRI SUPPLEMENT
OVERVIEW		REVIEW
Strategy, value creation and sustainability	Board of Directors' report, financial	Externally assured sustainability
		statements and investor information	information compliant with the
				GRI standards

CORPORATE GOVERNANCE	REMUNERATION	METSO CHANNELS
STATEMENT	REPORT	› metso.com
				› x.com/MetsoOfficial
				› facebook.com/MetsoGlobal
				› youtube.com/@MetsoOfficial
				› instagram.com/metsoofficial
2023		2023
CORPORATE		REMUNERATION
GOVERNANCE STATEMENT		REPORT
Corporate governance, internal control	Remuneration of the Board of Directors
and risk management systems	and the CEO

OUR YEAR 2023

VALUE CREATION & STRATEGY

SUSTAINABILITY

All Annual report sections are available in English and in Finnish.

They are downloadable on our Annual report website at www.metso.com/annualreport. In this Annual report, we apply ­integrated reporting elements.

Business overview 2023

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We are the partner for

positive change

OUR YEAR 2023

VALUE CREATION & STRATEGY

SUSTAINABILITY

This is the Business overview, including Metso's strategy, value creation and sustainability.

OUR YEAR 2023
Metso in brief	5
From the CEO	6

VALUE CREATION & STRATEGY

Our businesses . . . . . . . . . . . . . . . . . . . . 9

Strategy . . . . . . . . . . . . . . . . . . . . . . . . . 13

SUSTAINABILITY
Towards net zero and
decarbonization of our industries	21
Planet Positive offering and
innovations for customers	26
Our people and culture	39
Aiming for a smaller
environmental footprint	47
Sustainable cooperation with the
supply chain	50

Business conduct and human rights . . . . . . 51

Business overview 2023

3

OUR YEAR 2023

VALUE CREATION & STRATEGY

SUSTAINABILITY

Enabling sustainable modern life

Business overview 2023

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OUR YEAR 2023	VALUE CREATION & STRATEGY	SUSTAINABILITY

Metso in brief

Orders received, EUR million	Sales, EUR million
5,252	5,390
2022 | 5,623	2022 | 4,970
Sales, share of services	Adjusted EBITA, EUR million
54%	887
2022 | 51%	2022 | 715
Adjusted EBITA %	Earnings per share,
continuing operations, EUR
16.5%	0.65
2022 | 14.4%	2022 | 0.39

1,225	1,447

2022 2023

Planet Positive sales,

EUR million

Metso is a frontrunner in sustainable technologies, end-to- end solutions and services for the aggregates, minerals processing and metals refining industries globally. We improve our customers' energy and water efficiency, increase their productivity, and reduce environmental risks with our product and process expertise. We are the partner for positive change.

Nationalities

100+

Countries

~50

Employees

17k+

Business overview 2023

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From the CEO

Year 2023 presented many opportunities for Metso and for our customers. The transformation of our industries towards more sustainable practices took many strides, and we are proud to be at the forefront in driving the change with many of our innovations and a wide portfolio of Planet Positive solutions. I am very satisfied with Metso's performance and want to express my heartfelt gratitude to the whole Metso personnel for their commitment, resilience and strong contribution during 2023.

We follow the implementation of our strategy through four top priorities - financial performance, sustainability, performance culture and customer success

• and I would like to take this opportunity to reflect on the past year and on how we performed in each of them.

Solid financial performance with further improved profitability

Our performance was strong throughout the year. Our sales reached EUR 5,4 billion and our profitability was at a record high level. The continued strong development of our adjusted EBITA margin is truly remarkable. We have improved the margin from 11.5% in 2020 to 16.5% in 2023 and this improvement trend demonstrates our unwavering dedication to improving our profitability.

OUR YEAR 2023	VALUE CREATION & STRATEGY	SUSTAINABILITY

Our sales reached EUR 5,4 billion and our profitability was at a record high level.

Business overview 2023

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OUR YEAR 2023

VALUE CREATION & STRATEGY

SUSTAINABILITY

Strong performance culture steering our diverse workforce

We have over 17,000 employees globally and it is very important that they feel engaged and committed. I believe that high employee engagement leads to improved customer satisfaction which in turn leads to better business results. We strive to create a strong performance culture where our people, guided by our values and leadership principles, thrive in their work and are offered opportunities to grow and develop while performing at their best.

To measure how our people feel, we conduct an employee engagement survey, Our Voice, four times a year. Throughout the past couple of years, we have made commendable progress in this measurement. Our latest eNPS result is 54, which means that over half of our employees are willing to recommend us as a place to work. In a benchmark comparison, we are now among the highest performing top 10% of companies. In the areas of inclusion, health and well-being and growth, our result takes us to the top 5%. These results clearly demonstrate the value of the effort we have put into developing our culture.

Metso has a diverse workforce of over 100 nationalities, and we are committed to becoming a workplace where diversity and inclusion are fostered, promoted, and embedded in our company culture. Diversity and inclusion

Offering solutions that advance the green transition is at our innovative core.

have been among our cultural focus areas in 2023. We have increased awareness of the topic and arranged training for all employees and for managers relating to non-discriminating recruitment practices.

Sustainability as a key industry driver

Sustainability is not only vital for Metso, but for the industries we operate in. By far the biggest impact of our sustainability actions materialize in our customers' opera- tions. Metso is committed to the 1.5-degree climate target and our goal is that our Planet Positive sales - offering that has proven sustainability benefits - grow faster than our overall sales. In 2023, our Planet Positive sales grew by 18%.

We measure the CO2 emissions of our own operations, and our target is to become net-zero by 2030. Last year, we reached a 73% reduction level in our own emissions, when compared to the baseline of 2019. Similarly, we aim to reduce our logistics CO2 emissions by 20% by 2025, and at the end of 2023 the result was -7%. We have also set a target that our spend from direct suppliers that have set science-based emissions targets reaches 30% by 2025, and at the end of 2023 the share was just over 26%.

Offering solutions that advance the green transition is at our innovative core. We drive responsible processing of battery minerals such as lithium and nickel to meet the increased need from electric vehicles and appliances.

In addition, the world also needs efficient recycling of secondary sources like black mass from electric vehicle batteries. Metso offers sustainable end-to-end solutions for the processing of battery minerals and for their recycling. We launched an advanced sustainable battery black mass recycling process in 2023, complementing our extensive

battery minerals technology offering, which ranges from concentration and hydrometallurgical processing to all related services. This innovation aims at extending the life cycle of valuable battery materials through efficient recycling.

Customers' success is our success

For us, customer success means designing our business so that we can excel in solving our customers' challenges and offer them opportunities to create more value. We have also made steady progress in this area. Metso's 2023 Net Promoter Score (NPS), which measures the engagement and loyalty of our customers, is on a healthy level.

Based on our customers' feedback, they value Metso's strong safety culture, high quality equipment and the technical expertise of our employees. We continue to focus on improving our responsiveness and on-time delivery capabilities.

Metso has comprehensive skills to understand our customers' operations, ranging from research, testing and extensive process knowledge to field services. We are able to address the needs of a modern quarry or mining process from end to end with our solutions, enabling the most sustainable and profitable performance in terms of recovery, throughput, energy and water efficiency and tailings management.

I am extremely pleased to see that our strategy is yielding excellent results. This is a good opportunity to thank our shareholders, customers and all business partners for their continued trust in Metso. I'm also confident that we will provide excellent service to our customers and create value for all our stakeholders in 2024.

Business overview 2023

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OUR YEAR 2023

VALUE CREATION & STRATEGY

SUSTAINABILITY

Strong platform for growth and higher profitability

Business overview 2023

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OUR YEAR 2023

VALUE CREATION & STRATEGY

SUSTAINABILITY

Our businesses

We offer a broad range of products and services for our customers in the aggregates, minerals processing and metals refining industries.

Metso's extensive equipment and aftermarket offering covers a wide range of equipment, parts and services to effectively meet the needs of our customers all over the world. We have two customer and financial reporting segments:

• Aggregates, serving quarry and contractor customers by offering crushing and screening equipment to produce aggregates needed in construction and infrastructure projects.
• Minerals, serving mining industry customers by providing equipment, process islands and plants for minerals processing, and hydrometallurgical and pyrometallurgical solutions for the recovery of metals.

Within these segments Metso operates through business and market areas. The Minerals and Metals business areas offer capital equipment for mining and metals refining as part of the Minerals segment. The Aggregates

Business overview 2023

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business area offers capital equipment to its respective segment. Metso has two aftermarket business areas serving both segments: Services, providing spare parts, refurbish- ments, repairs and professional services; and Consumables, providing a comprehensive offering of wear parts.

The business areas are accountable for their own perfor-

OUR YEAR 2023	VALUE CREATION & STRATEGY	SUSTAINABILITY

Our customer industries

AggregatesMinerals

mance in terms of orders and sales, operating profit and capital employed, and they contribute to the company's strategy through their business-specific initiatives.

In 2023, Metso expanded its offering portfolio through acquisitions. For example, mining truck bodies and buckets, wear parts, and truck body and bucket refurbishments and field services were added to the portfolio. Metso also strengthened its digital and automation capabilities in the aggregates business through an acquisition.

Sales by segment

Minerals

75%

Aggregates

25%

Customers in the aggregates markets need reliable crushing and screening equipment to produce or recycle aggregates for infrastructure or construction businesses. The global market consists of large international companies and numerous smaller, more regional or local ones, typically running quarry operations or operating as contractors. Metso's offering for aggregates customers includes crushers, screens, feeders, fixed and mobile crushing and screening plants, track-mounted equipment, spare and wear parts, and a wide array of services.

Metso's mining customers include large global miners, major and mid-sized regional operators and junior miners. Our unique offering and process expertise for mining customers covers the entire end-to-end process. It starts from professional testing and piloting support at the early stages of the projects and encompasses a complete solutions-offering for the whole process, from crushing and grinding to separation and filtration solutions, including also advanced tailings management. In addition, our offering includes material handling equipment and slurry pumps as well as an extensive selection of spare and wear parts and services. We also have comprehensive solutions and services for maintaining and optimizing processes and equipment performance with advanced digital solutions, intelligent automation and control systems.

For the quickly growing battery industry value chain, Metso is in a unique position to provide sustainable technology and equipment

covering, for example, lithium, nickel and cobalt production from the mine to battery materials and black mass recycling with project scopes ranging from equipment packages to plant deliveries.

For metals refining, Metso offers modern smelting solutions that cover all types of oxidizing, reducing and fuming processes for the treating of primary and secondary raw materials. Metso's sustainable flash smelting process is currently the most used copper smelting method in the world, resulting in a high recovery of metals with lowest total cost of ownership.

Business overview 2023

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