This is a summary of
Reporting period in brief: Good profitability and strong cash flow - Pulp and Paper projects continued at a good level; Chemicals and Oil & Gas projects were at a satisfactory level, but down from the good level in the first half of the year
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Market activity improved in the Services business, but overall, the Services and Maintenance, Repairs and Operations-driven (MRO) businesses remained at a weak level compared to 2019 due to postponements of large maintenance shutdowns and customers' tight cash management
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Supported by cost saving actions, a solid adjusted EBITA margin continued in the fourth quarter despite still challenging Covid-19 pandemic situation
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Strong free cash flow due to active management of net working capital
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Board of Directors dividend proposal:
EUR 0.18 per share
The partial demerger of
In this report, in addition to IFRS financial information, a comparable balance sheet and a cash flow statement are disclosed. Figures in parentheses refer to the corresponding period in 2019 unless otherwise stated.
Summary of key figures
Operative key figures, EUR million | 10-12/20 | 10-12/19 | Change, % | 1-12/20 | 1-12/19 | Change, % |
Orders received1 | 134 | 154 | -13 | 590 | 681 | -13 |
Order backlog at end of period | 270 | 280 | -3 | 270 | 280 | -4 |
Sales1 | 155 | 166 | -7 | 576 | 660 | -13 |
Service sales 2 | 36 | 44 | -18 | 129 | 152 | -15 |
% of sales | 23 | 26 | 22 | 23 | ||
Adjusted EBITA, continuing operations | 23 | 18 | 28 | 85 | 97 | -12 |
% of sales | 14.6 | 10.9 | 14.8 | 14.7 | ||
Adjustment items 3 | 3 | - | 11 | - | ||
Operating profit | 19 | 17 | 12 | 70 | 93 | -25 |
% of sales | 12.0 | 10.4 | 12.2 | 14.0 | ||
Earnings per share, continuing operations, EUR | 0.08 | 0.08 | - | 0.32 | 0.46 | -30 |
Free cash flow | 37 | -14 | - | 69 | 34 | 103 |
Balance sheet key figures, IFRS | 12/20 | Metso 12/19 |
Return on capital employed (ROCE) before taxes, % | 15.6 | 19.2 |
Balance sheet total | 644 | 3,887 |
Net debt | 81 | 798 |
Equity to assets ratio, % | 42.6 | 42.3 |
Net debt / EBITDA, rolling 12 months | 0.9 | - |
Gearing, % | 30.9 | 52.3 |
Personnel at end of period, continuing operations | 2,840 | 15,821 |
1 Orders received in comparable currencies declined by 9% in 1-12/2020, and 6% in 10-12/2020. Sales in comparable currencies declined by 9% in 1-12/2020 and increased by 1% in 10-12/2020.
2 Services sales include the sales volume from the Services business
3 Adjustment items amounted to
3
Creation of Neles on June 30 th
Metso's Extraordinary General Meeting on
Public tender offer by Alfa Laval and stake building by Valmet
On
President and CEO Olli Isotalo :
As anticipated, the market conditions changed little during the fourth quarter. There were several positive developments in our Services business. Service orders received grew quarter-on-quarter, although there were big differences between geographical markets. We won some major orders for our digital service concepts relating to advanced installed base management and process monitoring. Despite the positive trends in Services, the overall Services and MRO-driven businesses remained at a weak level due to customers' tight cash management, and postponements of large service and upgrade projects due to the Covid-19 pandemic.
In 2020, project business developed well. We received many orders particularly during the first half of the year and second half orders were also at a good level. Project sales increased quarter by quarter, peaking in the fourth quarter. The share of the Services and MRO-driven businesses was slightly over 60% of total orders received in 2020, compared to a bit less than 70% in 2019. We continue to see a healthy project funnel in Pulp and Paper for 2021. We are also seeing activity in Chemicals and Oil & Gas projects, but at a lower level than a year ago and with uncertainties around the timing of orders.
We continued tight cost management to keep our profitability at a good level, despite the low sales volume. We will also continue many cost saving measures at the beginning of 2021. We completed personnel negotiations for temporary layoffs at our
We completed our annual customer satisfaction survey, and the results were very pleasing. Customer satisfaction, measured by a net promoter score, improved from 29 in 2019 to an all-time high of 38 in 2020. I feel this is strong testimony to the great commitment of
Market outlook
We expect the market activity in Pulp and Paper projects to continue at a good level.
Market activity in Chemicals and Oil & Gas projects is expected to continue at a satisfactory level, as it did during the second half of 2020. Postponements of projects and global uncertainties continue to reduce visibility in the Chemicals and Oil & Gas project businesses.
Market activity for the Services and the customer Maintenance, Repair and Operations-driven (MRO) businesses is expected to gradually improve during the second quarter of 2021 from the weak levels of the second half of 2020. Large shutdowns are still being postponed due to the Covid-19 pandemic and customers' tight cash management.
The ongoing Covid-19 pandemic continues to create uncertainties and risks of abrupt changes in all markets important for
Market outlook reflects management's expectation for the next six months unless otherwise stated.
Covid-19 pandemic update
The Covid-19 pandemic continues to present significant short-term risks and uncertainties for the markets. It continues to be difficult to predict the pandemic's spread and severity. Abrupt measures taken by various national and local governments to restrict the spread of the virus have increased the unpredictability of the demand for
The business situation did not change significantly from the third to the fourth quarter. Customers have returned to more normal operations than in the second quarter, but large maintenance projects remain largely postponed due to mobility restrictions and customers' tight cash management. The situation has caused a slowdown in the Services and MRO-driven businesses. The company's supply chains have been operational, and the delays in delivery times reported in the third quarter have eased. Thus far,
Since the second quarter, management has taken proactive measures to ensure the safety of employees, control costs and preserve cash flow to protect
There is an increased risk that global economic growth will significantly deteriorate because of the pandemic, which, with uncertain political and trade-related developments, could affect
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