Industrial machinery company Metso released its 2023 financial report, highlighting record sales and progress on sustainability initiatives. The company achieved its highest-ever sales figure of €5.4 billion {US$5.8 billion), accompanied by an increase in profitability. Metso's adjusted EBITA margin reached 16.5% in 2023, up from 14.4% the previous year.
Metso also emphasized its commitment to environmental responsibility. The company reported an 18% growth in sales of "Planet Positive" products, designed with sustainability benefits. Additionally, Metso has set a target of achieving net-zero emissions by 2030.
"The transformation of our industries towards more sustainable practices took many strides [in 2023], and we are proud to be at the forefront in driving the change with many of our innovations", said chief executive Pekka Vauramo.
"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."
He added that Metso is further contributing to sustainable practices by offering solutions for processing and recycling battery minerals, key components in electric vehicle technology.
Eventful year
An early important development for the company was in May 2023, when Metso Outotec's Annual General Meeting approved a name change to Metso Corporation. The company said the decision reflects the successful integration of Metso and Outotec, solidifying a unified company and brand.
The new name retains the established "Metso" recognition while emphasizing a clear focus on sustainability and industry transformation. This strategic shift is supported by a strong company culture. Notably, Outotec remains a valuable product brand, retaining its important legacy within the company. "With a streamlined structure and a sharpened focus, Metso Corporation is positioned for continued growth and leadership in the years to come."
The newly named Metso's operations continued to be impacted by the war in Ukraine. Following the military offensive in 2022, the company had almost instantly halted new orders for deliveries to Russia and ensured compliance with all relevant sanctions. Metso completed the wind-down of pre-war orders during the first quarter of 2023, incurring a non-recurring charge of €150 million in the second quarter of 2022 to cover associated costs. As of the end of 2023, a portion of this charge remains available for potential final expenses. Metso maintains its commitment to full compliance with all applicable sanctions.
The annual report noted that the company is positioning itself as a key player in the battery minerals industry, anticipating a surge in demand for these critical materials. Their strategy focuses on providing a comprehensive suite of technologies and solutions across the entire production chain, from mining and processing to recycling. This ensures support for producers in emerging growth locations and helps address potential future supply shortages.
The company already offers sustainable equipment for lithium, nickel, and cobalt production. They're actively involved in various battery mineral projects, including a collaboration with Zinnwald Lithium to develop a new lithium hydroxide production process. Additionally, Metso is modernizing its research facilities to expand testing capabilities for battery chemicals.
Lithium, a vital component in battery production, is a particular area of focus. Metso offers an environmentally friendly, acid-free process for extracting lithium from spodumene concentrates. Recognizing the importance of other critical minerals like copper, nickel, and cobalt, they also provide sustainable processing solutions for these elements.
Possible headwinds
Despite the strong sales figures and while inflation is easing, Metso noted that broader economic concerns persist. These could pose challenges for both Metso's customers and suppliers. Rising financing costs could dampen customer investment plans, potentially delaying or canceling projects. Additionally, ongoing geopolitical tensions could disrupt global supply chains and impact delivery timelines or budgets.
Metso also highlighted potential risks from its suppliers. Increased financial strain due to working capital needs or higher funding costs could affect suppliers' ability to deliver on time. This could lead to contractual penalties or delays if alternative sources can't be secured quickly. Unstable market conditions could also impact customer payment behavior, raising the risk of legal disputes related to Metso's products, projects, or operations.
Currency fluctuations, despite hedging measures, could still affect Metso's financial position. The company also faces information security threats and potential disruptions from cyberattacks. Legacy liabilities from the discontinued waste-to-energy projects in the UK remain a risk. Metso maintains its ability to defend against these claims, but the possibility of additional costs cannot be ruled out.
In addition, the company cautioned that disputes arising from project deliveries, particularly major projects, could result in significant penalties for delays or non-performance. While provisions are made, the potential for additional liabilities exists. Metso is currently involved in ongoing legal disputes, and differing interpretations of international contracts and laws could create uncertainties in their outcomes.
