John Quinlivan President, Flow Control Business Area Metso Capital .
Performance and growth opportunities John Quinlivan President, Flow Control business area Metso Capital Markets Day June 1, 2017 Metso
Solid performance More opportunities We reacted to the Our markets are market and secured attractive with many profitability opportunities emerging 2 Metso Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area A time for growth Our strategic initiatives will broaden our base for sustained growth
Metso is a leading flow control solutions provider in many industries Valves 84% and pumps 16% of the business area’s sales We help our customers improve operational efficiency, increase profitability and reduce risks Sales¹: EUR 642 million Orders received¹: EUR 613 million Personnel²: 2,600 24% 22% 22% of sales of orders received of personnel 40 Service centers 400 Field service experts 3 Metso Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area 1) Q2/2016-Q1/2017 2) March 31, 2017
Our performance has been resilient in a challenging market Flow Control valve business rolling 12Valve business rolling 12-month sales monthdevelopment sales development vs. peers* vs. peers Flow business Control valve business rolling 12Valve rolling 12-month EBIT-% month EBIT-% development vs. peers* development vs. peers Pumps business Indexed 160 (Q1/2011 100) Valve peers Metso valves 150 140 Metso valves 130 Valve peers 120 110 100 90 Peers include Emerson (estimated Valves, Actuators & Regulators, excl. Pentair Valves & Controls), Flowserve (Flow Control), Crane (Fluid Handling) and Velan. 4 Metso Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area Metso shows signs of improvement in sales along with a highly profitable business compared to peers
Sustained level of high performance Flow Control rolling 12-month sales and adjusted EBITA % EUR million 800 18% 700 16% 14% 600 12% 500 10% Growth results in a very strong bottom line within our operational model 400 8% 300 6% 200 4% 100 0 2% Q1 Q2 Q3 2011 Q4 Q1 Q2 Q3 2012 Q4 Q1 Q2 Q3 2013 Services sales 5 Metso Q4 Q1 Q2 Q3 Q4 2014 Equipment sales Q1 Q2 Q3 Q4 Q1 2015 Adjusted EBITA, % Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area Q2 Q3 2016 Q4 Q1 2017 0% We have tightly managed our operative costs and capital expenditure
Diversified sales mix with large share of services is our strength Sales¹ by region 7% 6% 13% 29% 33% 8% Sales¹ by type Sales¹ by industry 39% 18% 61% 15% 18% 22% 31% North America 33% Europe 31% Other Asia Pacific 15% Africa and Middle East 8% South America 7% China 6% 6 Metso Oil & gas (mid and downstream) 29% Petrochemical and chemical 22% Pulp & paper 18% Mining 18% Power and other process industries 13% Services 1. Q2/2016-Q1/2017 In the revised split oil & gas includes oil & gas production, LNG, transportation, refining, as well as industrial gas. In 2016 annual report combined total oil & gas was 51%. Power and other industries includes among others power, geothermal, bioenergy, water and waste water and food processing Capital
Markets we serve are showing signs of recovery Global market drivers Oil and gas midstream and downstream investments Chemicals and petrochemicals investments Pulp and paper investments Recent development Quotation activity on oil and gas projects has gradually improved Higher investments in pulp and paper projects Customers have clearly increased their MRO* spending both in valves and pumps Mining investments Flow control end markets have strong long-term growth potential 7 Metso Our strategy is to capture new industries with new growth drivers Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area *MRO Maintenance, repair and operations
Our target is to grow faster than the overall flow control industry We create new opportunities in attractive industries We are well positioned to capture MRO* business We have a strong platform that can scale up to deliver profitable growth 8 Metso We grow through many channels to market We build on our extensive knowledge and presence in services We renew our product portfolio We improve customer experience and service level We further enhance our operational excellence Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area *MRO Maintenance, repair and operations
We grow through many channels to market We complement our strong existing sales network and accelerate sales footprint expansion We improve our customer presence and service levels We expand our portfolio 9 Metso Our strategy is to: 1. 2. 3. 4. Grow through multi-tier channels Grow the OEM customer base Develop the industry-specific partner network Expand the pump sales network Our portfolio is attractive to new channel partners We collaborate with our customers and partners to further develop our product portfolio Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area
We have extensive knowledge and presence in services We developed new tools and processes for plant shutdowns. New service models More insight from installed base data Optimized service footprint 10 Metso In 2016 we managed 100 shutdowns and turnarounds globally Digitalization: We are implementing global field service management systems in 2017 We utilize our installed base information to assist customers in optimizing their flow control assets over the life cycle We provide value-adding, performance-improving solutions for our customers We take full advantage of our 40 service center network with over 400 field service experts available globally Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area
Continuing to renew our product portfolio Neles BWX butterfly valve customization Neles NDX valve controller releases Jamesbury ball valve renewal Neles globe valve expansion We improve our competitiveness with engineering to value, improved time-to-market and agile processes 11 Metso Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area Metso slurry pump expansion and renewal
We are developing our tools and processes to better serve our customers and partners We improve customer experience and service level We expand our capabilities through digitalization We manage complexity and reduce lead-times 12 Metso Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area By utilizing well-organized front-end processes and tools By upgrading the sales network and implementing customer satisfaction programs By improving our processes and developing new digital tools for EPC project business By improving our valve selection and configuration capability By optimizing order execution through the entire supply chain
We are well positioned through our global operation footprint to optimize cost and service Defending our product margins 2015-2016 achievements Current priorities Continued procurement savings Global procurement model implemented Supplier quality development Continue cost management Partner with key suppliers in India and China Expand our operating footprint in India and China Capacity adjustment to market demand Lean model in all sites Global order management development to support growth Utilize and flex capacity in all valve and pump plants globally Share knowledge in engineering and manufacturing execution Enhance project execution to improve profitability Strong gross profit throughout the cycle Continuous HSE development 13 Metso Risk observations, safety conversations, HSE audits Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area Confirm strong safety culture in all functions and organization levels
We expand our growth opportunities 14 Solid performance More opportunities A time for growth We have a track record of delivering profitability and we are well positioned for growth Our markets are attractive with many opportunities emerging Our strategic initiatives will broaden our base for sustained growth Metso Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area
Appendix
There are more opportunities in process industries horizontally - We have built a flow control platform with a strong position in a number of niches Global refinery capacity2 Global O&G CAPEX1 USD billion CDU bbd Global mining CAPEX5 Global pulp and paper capacity4 Global base chemicals demand3 Mmt Million t/a USD billion 600 600 250 500 1000 120 800 100 500 80 400 60 300 40 200 Paper 200 400 600 150 300 400 100 200 Pulp 200 0 16 Metso 20 100 0 0 Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area 100 50 0 0 1. Morgan Stanley, Rystad 2. GlobalData 3. IHS 4. Pöyry 5. Metso analysis
Our operations footprint is modern and geographically well-spread Sala, Sweden Helsinki, Finland Horgau, Germany Metso Park, Alwar, Rajasthan, India Vadodara, India Sorocaba, Brazil Vereeniging, South Africa Valve technology center / supply center 17 Metso Metso Capital Markets Day 2017 John Quinlivan President Flow Control business area Slurry pump assembly Chung-ju, South Korea Shanghai, China
www.metso.com company/metso metsoworld metsogroup metsoworld metsogroup
Metso is a leading flow control solutions provider in many industries . 1) Q2/2016-Q1/2017. 2) March 31, 2017. We help our customers improve operational . Flow Control valve business rolling 12-month sales development vs. peers * Valve peers. Metso valves. Metso Capital Markets Day 2017 .
This product provides a local flow indication and automatically signals the operator or PLC if flow is too high or too low. Uses of the Flow-Alert flow meter include: bearing lubrication, case drain verification, gun drill cooling, pump flow confirmation, etc. FLOW-ALERT FLOW SWITCH 6000 PSI / 414 BARS MAX GPM LPM OIL FIGURE 1- Flow-AlERt Flow .
Edgerton (Sierra College Accountant). Finally, thank you to Chancellor Eloy Ortiz Oakley and Emeritus Executive Vice Chancellor of Workforce and Economic Development Van Ton-Quinlivan at the California Community College Chancellor's Office, and to Sierra College Superintendent and President Willy Duncan for their leadership in educational
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3. Quick Reference Tables PROPERTIES OF ISENTROPIC FLOW, PRANDTL-MEYER FLOW, AND NORMAL SHOCKS ames Solves the equations for isentropic flow, Prandtl-Meyer flow, and normal shocks to obtain flow properties. amesplt Plots the properties for isentropic flow, Prandtl-Meyer flow, and the normal shocks as a function of Mach number.
Open Channel Flow I - The Manning Equation and Uniform Flow . Harlan H. Bengtson, PhD, P.E. COURSE CONTENT 1. Introduction . Flow of a liquid may take place either as open channel flow or pressure flow. Pressure flow takes place in a closed conduit such as a pipe, and pressure is the primary driving force for the flow.
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