պֲ Corporate պֲ for investors Financials Financial Statements Review 2023

Financial Statements Review 2023

պֲ revised its segment reporting as of September 30, 2023, by transitioning from three segments to two: Aggregates and Minerals. The Smelting business, previously reported under the Metals segment, was moved to the Minerals segment, and the Metals & Chemical Processing and Ferrous & Heat Transfer businesses from the Metals segment were transferred to discontinued operations. All income statement, order intake and order backlog figures presented in this report pertain to continuing operations, and the financial information for the comparison periods has been restated accordingly.

Figures in brackets refer to the corresponding period in 2022, unless otherwise stated.

Fourth quarter 2023 in brief

  • Customers' decision-making slower year-on-year; sequentially stable market activity
  • Orders received declined 14% to EUR 1,232 million (EUR 1,437 million), services orders increased 4%
  • Sales EUR 1,342 million (EUR 1,356 million), services sales increased 8%
  • Adjusted EBITA increased 7% to EUR 225 million, or 16.8% of sales (EUR 210 million, or 15.5%)
  • Operating profit increased to EUR 200 million, or 14.9% of sales (EUR 183 million, or 13.5%)
  • Cash flow from operations was EUR 216 million (EUR 212 million)

2023 in brief

  • Orders received declined 7% to EUR 5,252 million (EUR 5,623 million)
  • Sales grew 8% to EUR 5,390 million (EUR 4,970 million)
  • Adjusted EBITA increased 24% to EUR 887 million, or 16.5% of sales (EUR 715 million, or 14.4%)
  • Operating profit increased to EUR 805 million, or 14.9% of sales (EUR 490 million, or 9.9%)
  • Earnings per share were EUR 0.66 (EUR 0.36) and for continuing operations EUR 0.65 (EUR 0.39)
  • Cash flow from operations was EUR 550 million (EUR 322 million)
  • The Board of Directors will propose a dividend of EUR 0.36 for 2023 (EUR 0.30), to be paid in two equal installments

President and CEO Pekka Vauramo:

Our performance remained strong in the fourth quarter, despite sales declining slightly year-on-year within a mixed market environment. We improved our adjusted EBITA by 7% to EUR 225 million and adjusted EBITA margin to 16.8%, compared to 15.5% in the last quarter of 2022. This demonstrates our unwavering dedication to improving our profitability and to reaching our updated profitability goal of over 17% adjusted EBITA margin.

Demand in the mining market remained stable during the latter part of the year. Steady customer production levels contributed to the favorable increase in services orders within the Minerals segment. Whilst Minerals equipment orders for the quarter declined, as a result of a tough year-on-year comparison, we continue to see a healthy order proposal pipeline. As anticipated, the aggregates market continued to be weaker compared to the previous year. This was evident in the lower order intake in the fourth quarter, although there was a sequential increase due to seasonal demand.

Quarterly sales increased in Minerals, but the decline in Aggregates sales, in addition to a negative currency impact, resulted in the Group's sales being 1% lower year-on-year. The profitability of Minerals improved, and the profitability of Aggregates was at the comparison period's level, despite the decline in sales. Overall, our profitability development reflects improved gross margins through cost management, as well as other actions implemented to strengthen our resilience to market fluctuations.

For the full year, orders received decreased slightly, mainly due to the weaker Aggregates market. Sales increased by 8%, and adjusted EBITA increased by 24% to EUR 887 million, or 16.5% of revenue. Our cash flow from operations also improved towards the end of the year, reaching EUR 550 million compared to EUR 322 million in 2022. Overall, we can be very satisfied with our performance, and I would like to express my gratitude to the whole պֲ personnel for their strong contribution during 2023.

We made significant strides in our strategic focus areas, with sales of our Planet Positive products growing by 18% year-on-year to EUR 1,447 million, accounting for 27% of our total sales. The demand for Planet Positive products remains robust, and new Planet Positive orders include battery minerals processing plants, such as a lithium hydroxide refinery, and a full-scope sustainable comminution flow sheet concept. During the year, we also introduced several new Planet Positive products, to e.g., battery minerals processes, recycling, and process optimization and availability.

Throughout 2023, we continued to refine our business portfolio: we announced a plan to divest two businesses that were previously part of our Metals segment. These businesses have been reported as discontinued businesses since the third quarter, and the divestment process is ongoing. Additionally, we pursued inorganic growth opportunities and made three small acquisitions last year. In 2024, we will continue to seek further opportunities to strengthen our market position and expand our sustainable and digital offerings. We also remain committed to annual productivity improvements and cost control.

We expect that the ongoing demand for infrastructure and minerals, driven by the global energy transformation, will sustain our end markets. However, customer decision-making may be influenced by economic and geopolitical developments. We are confident that our strong position will enable us to continue providing excellent service to our customers and creating value for all our stakeholders in 2024.

Market outlook

According to the company's disclosure policy, պֲ’s market outlook describes the expected sequential development of market activity during the following six-month period using three categories: improve, remain at the current level, or decline.

պֲ expects that the market activity in Minerals will remain at the current level, while the activity in Aggregates is expected to improve.

In its previously published outlook, պֲ expected the overall market activity to remain at the current level in both Minerals and Aggregates.

Key figures

EUR million

Q4/2023

Q4/2022

Change %

2023

2022

Change %

Orders received

1,232

1,437

-14

5,252

5,623

-7

Orders received by services business

681

656

4

2,955

2,833

4

% of orders received

55

46

56

50

Order backlog

 

 

 

2,951

3,303

-11

Sales

1,342

1,356

-1

5,390

4,970

8

Sales by services business

758

703

8

2,891

2,558

13

% of sales

57

52

54

51

Adjusted EBITA

225

210

7

887

715

24

% of sales

16.8

15.5

16.5

14.4

Operating profit*

200

183

9

805

490

64

% of sales

14.9

13.5

14.9

9.9

Earnings per share, continuing operations, EUR*

0.16

0.15

7

0.65

0.39

67

Cash flow from operations

216

212

2

550

322

71

Gearing, %

 

 

 

33.8

29.1

Personnel at end of period

 

 

 

17,134

16,705

3


*Full-year 2022 includes a EUR 150 million non-recurring charge related to the wind-down of business in Russia.

Audiocast and conference call details

President and CEO Pekka Vauramo and CFO Eeva Sipilä will present the results in an audiocast and a conference call for analysts and investors on February 16,2023, at 1:00 p.m. EET.? 

The?audiocast can be followed?at

A recording and a transcript will be available on this webpage after the event has finished.? ? 

Conference call participants are requested to register on the link below. 

Further information, please contact:??

Juha Rouhiainen,?Vice President, Investor Relations, պֲ?Corporation, tel.?+358 20?484 3253, email:?juha.rouhiainen(a)պֲ.com?? 

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