Metso - Pioneer in aggregate processing

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Here is Aapeli’s company preview report, as Metso releases its Q4 results on Thursday. :slight_smile:

We have raised our forecasts for Minerals for the coming years, reflecting recent order announcements, and we estimate that the positive momentum will continue, driven by the current strong state of the metals market. We also expect this to support the company’s longer-term growth and margin potential through the growth of the service business. With the strong earnings growth outlook for the coming years, we are ready to place more weight on the longer-term potential in our assessment; reflecting this, we are raising our target price to EUR 16.0 (prev. EUR 12.5). However, given the sharp rise in the share price and valuation, we see the expected return for the coming years relying on a dividend yield that has fallen to a rather low level, which is why we reiterate our Reduce recommendation.

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A good and pretty much expected result. Good to continue from here :slight_smile:

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Aapeli has written a company report on Metso following Q4. :slight_smile:

Metso’s Q4 result was in line with both our and consensus expectations. The result was supported by revenue development that exceeded forecasts, while the margin relative to expectations was weighed down by a rather equipment-heavy sales mix. In contrast, the company’s order intake fell short of our high expectations. The company made no changes to its outlook, and we believe the demand situation can be expected to remain good. Based on the report, we made only minor revisions to our forecasts. Consequently, we see the return expectation for the coming years still relying too heavily on a moderate dividend yield. Thus, we reiterate our Reduce recommendation for the share and our target price of 16 euros.

Quoted from the report:

..In our assessment, the most significant drivers in Minerals continue to be gold and copper projects in particular. Development has also been positive in Aggregates regarding equipment orders, driven especially by the normalization of the situation in North America and a pick-up in European demand, although demand on the services side is still more moderate.

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Metso will supply several Vertimill® 4500 grinding mills for a direct reduction (DR) grade iron ore production plant. The value of the order is over EUR 10 million, and it has been booked in the Minerals segment’s first-quarter 2026 orders received.

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Metso and Loesche GmbH have entered into a partnership agreement to bring the revolutionary Metso Loesche VRM dry grinding technology for minerals processing to the market. The partnership combines Metso’s expertise in comprehensive and sustainable minerals processing and service solutions with Loesche’s Vertical Roller Mill technology. This innovative technology, based on a new type of process, improves the efficiency of minerals processing.

Detailed information about Metso Loesche VRM dry grinding technology

Metso Loesche VRM dry grinding technology is part of the Metso Plus product portfolio. At its best, it can replace and simplify traditional primary and secondary grinding. VRM technology is also suitable for the particle size range required in tertiary grinding. Dry grinding simplifies the comminution circuit and brings savings in energy consumption and operating costs. The technology can also be combined with coarse particle flotation or magnetic separation, which reduces or even eliminates water consumption entirely, if a completely dry process is feasible at the site.

The wear parts for the Metso Loesche VRM are manufactured from advanced materials that resist wear and ensure high availability. Integrated process control ensures optimal operation with easy start-up and shut-down functions and a fast transition to production.

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Metso is launching a revamped portfolio of digital services for its aggregates customers, bringing together digital solutions into one integrated whole. The new offering improves machine uptime, boosts production performance, and eases the daily work of both customers and distributors.

The unified digital portfolio is designed to solve customers’ operational challenges and consists of three components: AI-powered Predictive Maintenance, Production Performance, and the MyMetso service. Together, they enable real-time data to support decision-making, remote machine monitoring, and data-driven recommendations that support safer, more resource-efficient, and more productive aggregates operations.

AI-powered predictive maintenance reduces unplanned downtime

The new AI-powered predictive maintenance service helps customers avoid unplanned downtime by identifying early signs of equipment failure before they cause disruptions.

Key benefits:

  • Higher uptime: Early detection of anomalies and prevention of unexpected stops.

  • Avoiding major failures: Reducing the risk of long periods of downtime.

  • Right parts available at the right time: Advance information on the parts that will be needed.

  • Predictive maintenance: Moving from reactive to planned maintenance actions.

The service analyzes real-time data from the machines and combines it with Metso’s strong equipment expertise and aggregates knowledge, providing reliable recommendations directly through the MyMetso service. Predictive recommendations are immediately available for all new machines connected to the Metso Metrics service. Retrofit kits are available for connecting older machines.

Production performance enhancement increases output and improves visibility into the production process

Metso’s new subscription-based production performance service optimizes production volumes and improves the machine operator’s visibility into the crushing process at all its stages. Production performance services aimed at contractors are part of the Metso Plus offering.

Key benefits:

  • Higher production volume: Adaptive Feed Control (AFC) minimizes idling and keeps crushers at an optimal load in multi-unit mobile crushing processes.

  • Improved visibility for the machine operator: Load and level data for the entire plant can be seen directly in the cabin of the excavator or wheel loader.

  • Lower safety risks: Remote management, wireless interlocks, and camera views.

  • Lower fuel consumption and CO2 emissions per ton: Lower idling and more stable operation reduce energy consumption.

According to field measurement results, adaptive feed control improves productivity by up to 5–15% depending on the application. Metso’s patented control software continuously optimizes the process throughout the entire crushing chain.

MyMetso service enables easy and flexible business interactions

The MyMetso service provides Metso’s aggregates distributors and customers with a centralized view of digital services, equipment data, and support services. The service’s functionalities are tailored according to user roles, so users see the information relevant to their daily work.

Key features:

  • Everything in one place: Part information, machine data, maintenance recommendations, fleet tracking, and support tools.

  • Right parts faster: Metso’s own equipment documentation guarantees accuracy.

  • Available 24/7 on any device.

  • Faster troubleshooting: Direct access to machine data and maintenance instructions.

The MyMetso service improves the smoothness of business interactions and supports the growth of customer and distributor businesses through improved visibility, faster quoting, and proactive customer support.

Metso will supply crushing and grinding equipment for Artemis Gold’s Blackwater gold mine expansion project in British Columbia, Canada. The value of the orders is over 39 million euros. Of this, approximately 16 million euros has been booked in the Minerals segment’s orders received for the second half of 2025, and approximately 23 million euros will be booked in the first quarter of 2026.

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Sijoituskästi has made a video of just over 2.5 minutes about Metso. :slight_smile:

https://x.com/STNXfi/status/2029995871123767503

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Link for those without X:
https://twitter-thread.com/t/2029995871123767503

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The innovative Life Cycle Services (LCS) solution for pump availability launched by Metso in the fall of 2025 has received a positive reception from customers. Since the launch of the new service concept, Metso has signed several small and medium-sized multi-year service agreements in key market areas in Europe, Asia-Pacific, and the Americas. In February, Metso signed two five-year agreements covering maintenance services for over 100 slurry pumps for mining industry customers.

Metso’s performance-based life cycle service improves pump availability, extends the service life of wear parts, increases safety, and reduces the cost of ownership through long-term partnership.

The value of the combined orders is not disclosed. Service agreements can be worth several million euros depending on the scope and duration of the contract.

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An advertisement video on the AI company Palantir’s channel about the company’s cooperation with Metso. Duration 3 min.

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Metso has signed a significant agreement with Southern Peru Copper Corporation to supply copper solvent extraction and electrowinning (SX-EW) technology for their Tia Maria project in Cocachacra, Islay Province, Arequipa Region, Peru. Southern Peru Copper Corporation is one of the world’s largest copper producers. The new plant will produce approximately 120,000 tonnes of LME Grade A copper cathodes annually. The order, valued at 100 million euros, has been booked in the Minerals segment’s Q1 2026 orders received.

Metso’s delivery includes the main process equipment for the VSF® solvent extraction plant and electrowinning, including Dual Media filters, a robotic cathode stripping machine, and an acid mist collection system to minimize environmental impact. Metso has been responsible for the basic engineering of the project. The delivery also includes installation and commissioning supervision and related spare parts.

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Here’s Aapeli’s comments on Metso’s order from Peru :slight_smile:

Metso announced on Monday that it had received a significant contract worth EUR 100 million to supply copper processing technology to Peru. This order is a continuation of the large orders realized in recent months and strengthens our confidence in the order development of the company’s Minerals segment. The announcement does not create an immediate need for forecast changes, as our forecasts already include assumptions about the realization of larger project orders.

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Metso to supply advanced filtration technology for three iron ore concentrate filtration plants to Lloyds Metals & Energy Limited in Maharashtra, India. The value of the order, which is not disclosed, has been booked in the Minerals segment’s first quarter 2026 orders received.

Lloyds Metals & Energy is a mining and metals company with integrated operations covering mining, sponge iron (DRI) production and steel manufacturing. The company has a significant sponge iron and steel production facility in Chandrapur. The company is expanding its production facilities in various locations, while simultaneously implementing ten fully automatic Metso Larox® FFP 3512 filters.

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Metso is expanding its global material handling solutions network by opening a new regional Center of Excellence in Cape Town, South Africa, on April 15, 2026. The new center will offer customers Metso’s engineering expertise as well as advanced automation and digitalization solutions for material handling and port solution needs across Africa.

The establishment of the Center of Excellence is another milestone in Metso’s long-term strategy of investing in material handling solutions expertise in key market areas.

The Cape Town center strengthens Metso’s leading position and close customer relationships in Southern Africa, where Metso has a strong and growing installed equipment base. Thanks to a fully operational organization working in the same time zone, customers will benefit from faster technical support and more efficient problem-solving close to their operational needs.

Enabling market growth and developing industry expertise

Metso has partnered with Transnet for several decades. Transnet is a South African logistics infrastructure company that manages the country’s port, rail, and pipeline networks.
A team of approximately 60 people provides customers across Africa with comprehensive support in lifecycle services, modernizations, and technical support. In addition to creating jobs, Metso generates significant added value for the local economy by utilizing the services of consultants, suppliers, and contractors. The center thus promotes the development of industrial expertise in the region, particularly among young people. The investment strengthens the operating environment for port solutions in South Africa and across the wider African region.

Comprehensive lifecycle support for material handling solutions

With over a hundred years of experience and more than 8,000 global deliveries, Metso is one of the leading players in material handling solutions. The opening of the Cape Town center expands Metso’s global presence and dedicated development work in this business area.

Metso has recently made strategic investments by acquiring MRA Automation, thereby strengthening its expertise in advanced automation and digitalization. These capabilities are now also being utilized in Africa, where the adoption of digital tools enables customers to achieve better reliability and optimize material handling performance. Metso has also expanded its presence in North America by establishing a material handling solutions engineering center of excellence in Pittsburgh, USA.

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Here is the company report from Aapeli following Metso’s Q1 results :slight_smile:

Metso’s Q1 results fell short of both our and consensus expectations, even though they improved year-on-year. In contrast, order growth in the early part of the year was well in line with our expectations. The company reiterated its outlook but highlighted the potential impact of the geopolitical situation on market activity. So far, we believe the impact has been minimal, and we expect the demand situation to remain strong. Reflecting the overall picture, we made no material changes to our forecasts for the coming years. Accordingly, we reiterate our target price of EUR 16.00, but upgrade our recommendation to Accumulate (previously Reduce), as the expected return has risen to a sufficient level following the share price decline.

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Metso is strengthening its presence in Argentina by opening new local operations. These investments reinforce Metso’s long-term commitment to developing the Argentine mining industry and strengthening the skills of the local workforce.

Metso is now entering a new growth phase in San Juan, a mining hub known particularly for copper and gold production. In the second quarter of the year, Metso will open a new office in San Juan, which will lead to closer, more agile, and more strategic collaboration with customers.

In the next phase, Metso will invest in a robust infrastructure built for services and technical support. The goal is to ensure service availability and faster customer support.

San Juan is located in a strategically important position for mining operations. The new location of Metso’s operations will shorten distances to customers, speed up service, and help anticipate customers’ operational needs. In this way, Metso responds directly to the evolving requirements of the mining industry, such as improving efficiency, providing timely support, developing local expertise, and offering increasingly integrated solutions.

Metso is also evaluating other projects in the region to increase capacity as part of its long-term commitment to the development of the Argentine mining industry.

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Hi!

I haven’t received the answers yet, though I have sent a couple of follow-up messages. :slight_smile:

But luckily we have @Karo_Hamalainen, who interviewed Metso’s CEO Sami Takaluoma :slight_smile:

Topics:

0:00 Intro 04:17 Revenue recognition practices and risk management 09:30 Aftermarket 15:20 Minerals business 18:26 Copper 32:20 Critical minerals 47:37 Aggregates business 1:01:07 Mustard 1:03:31 Verdict

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Sami said in Karo’s interview exactly what I believe as well. Currently, the share of circular economy in copper is around one percent, but for example, the share of recycled aluminum was the same 20 years ago. Now, recycled aluminum already accounts for a third. To me, it is exceptionally clear that the megatrends of electrification and AI will increase the demand for copper so much that the recycling rate will rise significantly. Sami clearly stated that he is convinced this will happen.

Metso has a copper recycling process that enables copper to be recycled, and products have already been sold—meaning it is commercially proven. So yes, there is a very clear circular economy option in Metso. But as in many other industries, the circular economy business is an elephant in the room that doesn’t spark much discussion until, for example, a sharp price increase in virgin raw materials occurs, which boosts the competitive advantage of circular economy-capable companies to an unpredictable value almost overnight. Let’s get back to this when it happens :wink:

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Hi!

I received good answers to my questions from the company today, and I will publish them tomorrow. :slight_smile: Of course, Karo’s excellent interview already covered a lot of ground regarding Metso, including these copper-related things etc.

Have a great Thursday, everyone!

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And behind this link, you can find Metso’s answers to these questions :slight_smile: :backhand_index_pointing_down:

Metso IR responds: Copper and other questions on investors’ minds

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Thanks for this, it’s great to see an in-depth dialogue where the company also provides its perspective.

It is surprising how little the Finnish investment scene discusses the material enablers of the AI and data economy, of which copper is one of the most central. This is especially noteworthy considering that one of the leading players, Metso, is Finnish. In recent years, geopolitics has also become intertwined with this; we seem to have lost sight of where the materials for the AI economy come from, how dependent and simultaneously vulnerable we are regarding these materials, and who actually controls these value chains. Metso undoubtedly plays a very interesting role in both aspects.

Investors often overlook the true nature of the copper value chain in relation to geopolitics. Only about 3% of the world’s copper reserves are in Chinese soil, yet they have gradually managed to capture about half of the world’s copper smelting capacity (the most demanding stage). This means that even if the mining takes place in, for example, Chile or Congo, the copper concentrate often travels to China for smelting before it becomes material suitable for applications like electrification.
This is where Metso enters the picture. China’s dominance does not revolve around their own technology; it has been built precisely with Finnish flash smelting, which Metso’s IR also referred to in their response to the “Rookie’s” (Alokas) set of questions. Metso sells the “picks and shovels” without which it is impossible for China (or anyone else) to produce pure copper energy-efficiently, let alone while meeting environmental standards.

From an investment perspective, Metso is a near-perfect stock for this geopolitical struggle. Personally, I believe that as Western countries look to reduce their dependence on China and build their own smelters in Europe or the United States, they will essentially have to queue at Metso’s door to order the equipment. Thus, Metso wins either way (although there is always a risk with China that they have quietly learned and copied the best expertise). For now, however, Metso’s technological lead and massive patent portfolio have kept the moat intact. When you add Metso’s service business, which runs for decades after the equipment is installed, Metso is, in my opinion, one of the best long-term papers on our exchange.

I strongly believe that in the very near future, we will see a significant phase shift where the importance of materials will be emphasized. Materials and their value chains are dangerously concentrated.

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