Delivering greater shareholder value - CEO Matti Kähkönen

© Metso © Metso

Delivering greater shareholder value

Matti Kähkönen President & CEO

© Metso © Metso

Content

1. Value creation: Strong track record

2. Strategy: Strong portfolio 3. Financial targets: Roadmap 4. Our investment proposition

© Metso Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen 2

© Metso © Metso

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Safety is our top priority Continuous focus on our LTIF target of less than 1 leads to results

* LTIF in September 2014 3

Actions leading to improvement • Active and visible

management support, follow up and action plans

• Health, safety and environment mindset development and self audits

• Learning from every incident

• Full compliance with minimum safety standards

• Continuous development of professional ability

Lost time incident frequency (LTIF)

Total number of lost time incidents (LTI)

Lost Time Incident Frequency Number of LTI's

LTIF 3.3*

LTIF and number of LTI’s development 2010 through September 2014

Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen

© Metso © Metso

This is Metso

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16,000 employees in 270

locations in more than 50 countries

Net sales: EUR 3,658 million

• 53% of sales from services • 56% of sales from growth

markets

Net sales by customer industry

Net sales by geographic area Orders received:

EUR 3,493 million

EBITA**: EUR 469 million

12.8% of net sales 23%

31% 20%

13%

9% 4% Mining, capital 23%

Mining, services 31%

Aggregates, 20%

Oil and Gas, 13%

Pulp and Paper, 9%

Other, 4%

27%

19% 22%

23%

9% Europe, 27%

North America, 19%

South and Central America, 22%

Asia-Pasific, 23%

Africa and Middle East, 9%

*Net Sales, Orders received and EBITA 10/2013 – 9/2014 **Before non-recurring items

Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen © Metso

Value creation Strong track record

© Metso © Metso

Added value for shareholders: - Higher profitability - Reduced volatility

Our value creation roadmap Strong execution to continue

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Metso recognized as best in class in value creation

2011-2012 Metso was a diversified company with several business models and broad management agenda

2011-12

2013 Demerger implemented on Dec 31st, 2013 and Valmet listed as of Jan 2nd, 2014

Future 2013

2014 New strategy designed to deliver greater shareholder value 2014-2017 New financial targets: • Net sales growth exceeding

market growth • EBITA margin before non-

recurring items >15% • Return on capital employed

(ROCE) before taxes >30%

2014 2015 -2017

Added value for shareholders: - Annual dividend of more than 50% of annual EPS - Significant value unlocked by the demerger


© Metso © Metso

Our business mix is strong and balanced Mining capital represents around 20% of net sales

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Share of total net sales

21% 21% 23%

28% 25%

19%

24% 24% 21% 19% 20%

22%

22% 25% 26% 26% 28%

29%

26% 24% 24% 23% 25% 27%

7% 6% 6% 5% 3% 3%

2009 2010 2011 2012 2013 1-9/2014

Mining Services

Aggregates

Flow Control

Others

Mining Capital


© Metso © Metso

Successful (mining) downturn management Group net sales and EBITA%, rolling 12 months

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0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

500

1 000

1 500

2 000

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4 500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32009 2010 2011 2012 2013 2014

%EUR Million

Services net sales, rolling 12 months Capital net sales, rolling 12 months EBITA* %, rolling 12 mths

• Cost efficiency actions started early 2013

• Global procurement initiatives

• Mix improvement thanks to growth of Services and Flow Control

• Demerger had no impact on the daily business


© Metso © Metso

Proven resilience to the mining downturn Minerals segment EBITA margin shows stability against peer group

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*Indexed operating margin adjusted for non-recurring items Peers include: Atlas Copco Mining and Rock Excavation Technique and Construction Technique, FLSmidth Minerals Processing & Customer Services, Outotec Minerals Processing, Sandvik Mining and Construction, Weir Minerals

Peer group average operating margin ~ - 20% Metso Minerals segment EBITA ~ + 20%


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60%

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100%

120%

140%

160%

Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014

Peers operating margin average, %* Metso Minerals index operating margin, %*

© Metso © Metso

Minerals segment profitability not largely affected by lower volumes

10 Note: Published figures including currency impact * Before non recurring items


0%

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%EUR million

Services net sales, rolling 12 months Capital net sales, mining, rolling 12 months Capital net sales, aggregates, rolling 12 months EBITA* %, rolling 12kk

© Metso © Metso

Flow Control profitability is strong due to good margins and lower costs

11 Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen

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%EUR Million

Services net sales, rolling 12 months Capital net sales, rolling 12 months EBITA* %, rolling 12 mths

Note: Published figures including currency impact * Before non recurring items

© Metso © Metso

Our global presence has strengthened More personnel close to customers

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48 %

20 %

8 %

15 %

9 %

June 2004 Total ~12,500

June 2014 Total ~16,000

39 %

16 %

20 %

18 %

7 %

Europe, CIS and North America: 68% 55% APAC, South America, Africa and Middle East: 32% 45%

Europe and CIS South and Central America Asia-Pacific

North America Africa and Middle East

Europe and CIS South and Central America Asia-Pacific

North America Africa and Middle East


Strategy Strong portfolio

© Metso © Metso

Global megatrends are driving our future All Metso’s businesses are supported by long-term trends

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Challenges and opportunities affecting our customers • Declining ore grades in mining • Infrastructure investments • Growth in energy consumption •Shift to unconventional sources in Oil & Gas • Increasing need for energy and

water-efficient technologies and solutions

• Increasing performance, cost and capital efficiency awareness

© Metso © Metso

Our products and services yield concrete benefits to our customers • Improved process efficiency and performance • Less shutdowns, more up-time • Better reliability and safety • More proficient use of energy, water and other valuable resources


© Metso © Metso

- Maintain leadership in Pulp & Paper valves

- Evaluation of strategic options for Process Automation Systems

Our customer industries provide attractive opportunities

Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen 15

- Continuous growth of services - Improved resilience through operational efficiency

- Product renewal

-Tap into the growth of aggregate production

- Opportunities in the mid-market - Operational efficiency

- Organic and acquired growth in the current target market

- Expansion to new market segments - Potential to grow in pumps

Mining

Aggregates

Oil & Gas

Other process industries

54% of net sales

20% of net sales

13% of net sales

13% of net sales

6-8%

Long-term market growth, p.a.



4-6%

5-8%

© Metso © Metso

• We have established strong global market position in all our customer industries

• They all offer attractive long-term growth opportunities

• Growth is supported by industry trends and global megatrends

• The mining equipment business faces currently lower demand, but remains attractive in the mid- and long-term

We are well-positioned in all our core industries

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#1 in mining

crushers and grinding mills #1

in aggregates crushing and

screening #1

services provider with leading

services center network and capabilities #5

in oil and gas control valves


© Metso © Metso

Competitive position built on customer experience

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Delivered by highly competent and committed industry professionals

all over the world

Customer intimacy

Market-leading process and application knowledge

Full-scope services offering and

delivery capability

Reliable, leading technologies and

competitive offering


© Metso © Metso

Highly skilled and experienced people

Good reputation and references

Excellent process know-how

Excellent technical support

Leading technology

Realiable equipment and solutions

What do our customers like about us Metso global customer survey, May 2014, 981 respondents


Good reputation and references

Excellent process know-how

Excellent technical support

Leading technology

Reliable equipment and solutions

The most important attributes customers associate with Metso

© Metso © Metso

Products

Our way of taking Metso to the next level

Business model offering higher profitability and lower volatility

A leader in flow control within oil & gas and mining

The leading technology and

services provider for end-to-end

minerals processing

Services

Systems

•Broad Oil & Gas and Mining platform, covering valves and pumps •Global sales and service channels

•Strong process knowledge • Leading equipment technologies across the value chain • Leading intelligent solutions •Global sales and service channels

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Our businesses and strategic objectives


© Metso © Metso

Leveraging our new integrated operating model External reporting segments: Flow Control and Minerals

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Services

Minerals

Flow Control

Performance services

Market area organizations

Market area organizations

Aggregates equipment

Mining equipment

Spare and

wear parts

Oil and gas

Aggregates

Mining

Valves

(equipment and services)

Pumps (equipment and

services)


Financial targets Roadmap

© Metso © Metso

Achieving profitable growth with strong returns Profitability target to be reached within three years

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Delivering greater shareholder value

Target Q1-Q3/2014

Net sales growth exceeding market growth

In line with target

EBITA margin before non-recurring items >15%

12.2%

Return on capital employed (ROCE), before taxes >30%

15.5% (18.2% without non-recurring items)


© Metso © Metso

Growth inititatives in our business areas In light of megatrends and market outlook

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Minerals Services Flow Control

• Product renewal • Strengthening of sales

and delivery capabilities in key markets

• Opportunities in China

mid-market

• Grow market share in own installed base

• Expansion of service

center network

• Easy-to-sell productized services offering

• Performance services

• Cross-leverage Oil & Gas and Mining capabilities

• Targeted acquisitions to

expand addressable markets

• Acceleration of

operational efficiency improvements


© Metso © Metso

Recent M&A and future opportunities

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Future opportunities: • Flow Control

- expansion of valve and pump offering

• Minerals and Services - product offering - local presence

Recent acquisitions: • Shaorui Heavy Industries,

China - mid-market crushing and screening equipment

• SABO, Spain - grinding media to strengthen our full-scope comminution services offering

• JX Foundry, China - metallic mill lining, crusher wear parts


© Metso © Metso

- New operating model and footprint rationalization

- Simplification of the Group’s legal structure (40-50% reduction of legal units) - Asset efficiency - Product renewal

- Enhanced customer focus

- Headcount

- Procurement savings of 2-3% p.a. of the total spend

- Continuous cost awareness and leaner operating models

Roadmap to our 15% EBITA target Profitability target to be reached within three years

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Cost reduction Improving competitive

position Developing the business mix

>15%

- Growth and initiatives in the services and product businesses

- Refocused systems business

- Product renewal (intelligent offering, valve controls, etc.)

2 1

3 2013:12.8%


© Metso © Metso

Profitability improvement

Net working capital efficiency (inventories, receivables)

Promoting asset-light business models (divestment of assets, outsourcing)

Strict capital expenditure policy

Redefined cash policy

Reaching ROCE of more than 30% Driving balance sheet management culture across the Group

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ROCE >30%


© Metso © Metso

Our capital allocation policy supports growth and shareholder returns

-------------------- Use of available capital -----------------------

1. Organic growth 2. M&A 3. Return excess cash to shareholders

As a top priority, we will maintain a capital structure and liquidity position that secure: • Ability to execute our dividend policy (>50% of EPS) • Investment-grade credit rating

27 Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen

© Metso © Metso

1.50

3.00

0.70 0.70

1.551.70

1.85

1,00

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2006 2007 2008 2009 2010 2011 2012 2013

EUR

DPS (Dividend per share) Dividend policy ( at lest 50% of EPS)

Dividend payout has exceeded our policy Targeting stable and predictable payout


Demerger

© Metso © Metso Metso Capital Markets Day 2014: CEO's opening by Matti Kähkönen

Market outlook remains unchanged

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55% of net sales of which 55% services Current demand: • Weak for the equipment and

project business • Services good

20% of net sales of which 40% services Current demand: • Satisfactory for equipment and

services

22% of net sales of which 45% services Current demand: • Good in oil and gas; satisfactory in

pulp and paper • Services good

3-6 months market outlook

Equipment Services

Equipment Services

Equipment Services

Mining Aggregates Flow Control

© Metso © Metso 30

Based on our market outlook, backlog for 2014, current exchange rates and ongoing cost-efficiency actions, we estimate that

• Our net sales in 2014 will be somewhat below 2013 and • EBITA margin before non recurring

items for 2014 will be around 12%

Guidance for 2014 Original guidance from February 6 intact


© Metso © Metso

Strong financial position and competitive shareholder returns

Solid strategy to drive

growth and profitability

Strong established

market positions in attractive industries

Our investment proposition

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Why to invest in Metso


Good track record of efficiency

improvements and value creation

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