Metso: The Nordic Mining Equipment Powerhouse

From Finnish War Reparations to Global Sustainability Leadership

The waters of the Baltic Sea in September 1952 held a peculiar kind of triumph. On a crisp autumn day, the last train carrying Finnish war reparations crossed the border into the Soviet Union at Vainikkala station—340,000 railway wagonloads delivered over eight grueling years. What few observers realized at the time was that this final payment marked not the end of something, but the beginning. The factories that had manufactured ships, locomotives, and machinery under Soviet duress would transform Finland from an agrarian backwater into an industrial powerhouse. Approximately 340,000 railway wagonloads were needed to deliver all reparations.

Among those factories were the predecessors of today's Metso Corporation—a Finnish company that traces its lineage through shipyards, paper mills, and copper mines spanning over 270 years of industrial history. Headquartered in Espoo, Finland, at the end of 2024 Metso had close to 17,000 employees in around 50 countries, and sales in 2024 were about EUR 4.8 billion.

The central question animating this deep dive: How did a company born from Finnish war reparations and shipyards become the world's leading sustainable mining technology provider?

The answer lies in four transformational M&A cycles, a willingness to split apart when it served shareholders, and an understanding that in capital-intensive industries, services can be more valuable than the equipment itself. Today, Metso is a frontrunner in sustainable technologies, end-to-end solutions and services for the aggregates, minerals processing and metals refining industries globally.

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I. Deep Roots: The Finnish Industrial Context (1750s–1940s)

🏗️ The Shipyard in the Fortress

On the rocky islands of Viapori, just offshore from Helsinki, Swedish engineers in the 1750s established something modest: a small shipyard to construct and repair vessels for the fortress guarding the approaches to the Finnish capital. A small shipyard was established in the Viapori (Suomenlinna) fortress on the islands outside Helsinki started operating in 1750s. That fortress—today a UNESCO World Heritage site called Suomenlinna—would become the unlikely birthplace of what eventually evolved into Valmet, one of Metso's two founding entities.

This wasn't just a shipyard. It was an early example of state-directed industrial capability, built to serve military and commercial needs amid the geopolitical tensions of 18th-century Scandinavia. This shipyard, operational from the 1750s, focused on constructing and repairing vessels for military and commercial purposes, laying the groundwork for Finland's state-supported maritime industrial capabilities that would later influence heavy machinery development. The facility represented an initial state initiative to bolster naval infrastructure amid geopolitical tensions.

By the early 20th century, this shipyard had passed into Finnish state ownership. But the transformation from maritime workshop to industrial conglomerate awaited a more dramatic catalyst.

The Rauma Lineage: Sawmills to Shipbuilders

Further up Finland's west coast, the town of Rauma had its own maritime traditions stretching back to the 16th century. The history of Rauma Corporation began in 1942 with the founding of Rauma-Raahe Oy from a combination of several sawmills and timber companies. In 1945 Rauma-Raahe entered the shipbuilding arena with the purchase of a shipyard in the town of Rauma, located on Finland's west coast, where ships had been built since at least the 16th century.

Rauma-Raahe was involved in the first large merger in Finnish business history, when Repola-Viipuri Oy and Lahti Oy merged with the company in 1951 to form Rauma-Repola. The new firm continued its involvement in the timber processing and shipbuilding industries, but also expanded during the 1950s into the manufacture of pulp industry and metallurgical machinery. In 1970 Rauma-Repola diversified further through the acquisition of Lokomo Oy, a firm founded in 1915 and headquartered in Tampere, Finland.

The Lokomo acquisition proved fateful. This purchase broadened Rauma-Repola's array of industrial machinery to include crushers, excavators, road graders, cranes, and forest machines. Here, for the first time, a precursor company gained expertise in rock crushing—the capability that would define Metso's future.

The Outokumpu Origins: A "Strange Hill" in Eastern Finland

In a remote corner of Eastern Finland, local farmers had long noticed something odd about a particular hill. Unusual thunderstorms seemed to gather around it with alarming frequency. When prospectors finally investigated in 1910, they discovered one of the richest copper deposits in European history. The hill was called Outokumpu—literally, "strange hill"—and a company was established in 1914 to exploit it.

The Outokumpu mining company would face a crisis in the 1940s that inadvertently spawned a technological revolution. The go-ahead for construction of the pilot plant at Harjavalta was given in 1946 and the first experiments were undertaken in February 1947. The encouraging results led to the owner, at that time Outokumpu, initiating the design and construction of the flash smelting furnace. This small – yet nationally very important – metals producer was under pressure to decrease its dependency on electricity, since a third of the total grid capacity had been lost to Russia during the winter and continuation wars.

The process was developed by Outokumpu in Finland and first applied at the Harjavalta plant in 1949 for smelting copper ore. This flash smelting technology—born from necessity during a national crisis—would prove revolutionary. Currently, more than 50% of the world's primary copper is produced by flash smelting technology, and Outotec Flash Smelting is the dominant copper production technology.

Finland's unique position as a small nation industrializing through necessity—turning constraints into innovation—would become a recurring theme in Metso's story.

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II. Post-War Transformation: War Reparations to Industrial Giants (1944–1990s)

⚙️ Turning Defeat into Destiny

War reparations of Finland to the Soviet Union were originally worth US$300,000,000 at 1938 prices. Finland agreed to pay the reparations in the Moscow Armistice signed on 19 September 1944.

To understand how punishing this was: From 1944 to 1952, largely agrarian Finland had to export, on average, 4% of its yearly GDP in industrial products to the Soviet Union as war reparations. A nation with 60% of its labor force in agriculture was suddenly required to produce sophisticated industrial goods it had never manufactured before.

The Soviet Union placed most of the reparations burden on relatively advanced heavy industry items, such as ships, locomotives, cables, and engines—sectors in which Finland had little previous production experience.

The Finnish response was extraordinary. The reparations called for a significant adjustment of our industrial production. In the long-run, however, the Finnish companies benefited from the situation. While expertise improved as new products were manufactured, the reparation schedules forced the concentration and streamlining of deliveries.

The Birth of Valmet

In 1946, several metal workshops owned by the Finnish state were merged to form the Valtion Metallitehtaat, abbreviated as ValMet. The new company came to include various metalworks that manufactured war reparation products for the Soviet Union in different parts of Finland. In the year of its establishment, the company had some 6,200 employees. At the beginning of 1951, the Valtion Metallitehtaat group was renamed Valmet Oy.

The various factories, which had previously manufactured warships, aircraft and artillery pieces, spent years finding their new purposes. The conversion of an artillery works into a paper machine manufacturer was a success, but import restrictions created serious obstacles in its route to Western markets.

Valmet began manufacturing paper machines at the former Rautpohja artillery works in Jyväskylä, Finland in the early 1950s and delivered its first paper machine in 1953. Valmet became a paper machine supplier of international importance in the mid-1960s, when it delivered several machines to the world's leading paper industry countries.

The transformation was complete: weapons factories had become paper machine pioneers.

Rauma-Repola's Diversification

Meanwhile, Modern shipbuilding was launched in 1945 as F.W. Hollming and Rauma-Repola started building ships for Soviet Union as war reparations.

Throughout the following decades, Rauma-Repola pursued aggressive diversification. The acquisition of U.S.-based Jamesbury in 1988 built upon the previously acquired Neles of Finland; the two firms were merged as Neles-Jamesbury, a leading maker of industrial valves and control systems. Also purchased in the late 1980s were Nordberg Inc. of the United States and France's Bergeaud, which combined under the Nordberg name to comprise a global power in the rock crushing equipment for the mining and construction industries. Timberjack Corporation, a leading North American producer of timber harvesting machinery, was added in 1989 in a deal worth about US$120 million.

The Nordberg acquisition deserves particular attention. This American company, founded in the 19th century, had developed advanced crushing technology for mining applications. Its addition gave Rauma-Repola a global footprint in rock processing—a capability that would prove central to Metso's future identity.

The Outotec Genesis

Many new smelting plants all over the world adopted this new method. The company turned its technology expertise into a new business, which eventually led to the listing of Outokumpu Technology in 2006 and to the birth of Outotec.

By the 1990s, Finnish industrial consolidation was accelerating. Valmet and Rauma, once sprawling conglomerates touching everything from ships to forest machines, were trimming back to core competencies. The stage was set for transformation.

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III. Inflection Point #1: The 1999 Merger Creates Metso

🔄 A Marriage of Paper and Rock

Metso was created through the merger of Valmet and Rauma Oy in 1999.

In 1999, Valmet merged with Rauma Corporation to form Metso Corporation, combining Valmet's paper and board machine technology with Rauma's fiber technology and rock crushing equipment. This merger created a global supplier of process industry machinery and systems.

The strategic rationale was compelling on paper: unite Valmet's dominance in paper machinery with Rauma's strengths in fiber processing, rock crushing, and flow control. The combined entity would be the world's largest supplier of equipment for the pulp and paper industry, with substantial positions in minerals processing and industrial automation.

The numbers told an impressive story. According to contemporary reports, the combined company had 1998 pro forma sales of approximately US$4.33 billion and a workforce of around 23,000 employees. Management promised FMK 400 million in annual cost synergies and planned to reduce headcount by approximately 2,000 jobs between 1999 and 2000.

But there was a strategic challenge lurking within this impressive edifice: Metso remained heavily weighted toward paper machinery, an industry entering secular decline as digital media disrupted print publishing worldwide.

Early Years: Hunting for Balance

In its early years, Metso's revenue streams derived primarily from process industries, particularly pulp and paper equipment. The rock crushing and minerals businesses inherited from Rauma—though promising—remained secondary. Management recognized the problem: they needed to rebalance toward growth markets.

The solution would come from Sweden—and it would nearly destroy the company before ultimately transforming it.

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IV. Inflection Point #2: The Svedala Acquisition (2001) – Betting Big on Mining

⚒️ The Transformative Gamble

In June 2000, Metso announced a bold play: a cash offer to acquire Svedala Industri AB, a Swedish manufacturer of rock and minerals processing equipment. A pivotal move was the 2001 acquisition of Swedish firm Svedala Industri AB for approximately SEK 9.1 billion, which integrated Svedala's rock crushing and screening technologies with Metso's existing Nordberg crushers, establishing Metso as a world leader in rock and mineral processing.

The combination of Metso Minerals with Svedala creates a clear world leader in rock and mineral processing technology. The acquisition will increase Metso's net sales to approximately EUR 5,500 million and the amount of personnel to 32,000.

But the path to completion was treacherous. ON 7 September, one year and three months after launching their recommended £695 million cash offer, Metso Corp. finally received approval from the US Federal Trade Commission for their takeover of Svedala Industri AB.

Regulatory Gauntlet

The Commission has, after its second phase investigation, approved the acquisition of Svedala Industri AB by Metso Corporation. The Commission has, however, expressed concern related to the creation of a dominant position on certain product areas of rock crushing equipment and required certain remedies.

These businesses with annual net sales of approximately EUR 140 - 150 million relate to the development, manufacture, distribution and service of fixed and mobile rock crushing solutions for the global aggregates market. The entire divestiture will include current Svedala's product ranges of jaw crushers (Jawmaster), cone crushers (Hydrocone/thousand series, Eurocone) and horizontal shaft impact crushers.

Sandvik is acquiring assets valued at SEK 550 M. The regulatory-mandated divestitures to Sandvik were painful, but Metso believed the strategic logic remained compelling.

The Near-Disaster

Then came the integration nightmare. By 2002, Metso announced it would miss profit targets for two consecutive years, recording a loss exceeding EUR 300 million in just the third quarter. The culprit was Svedala integration. In 2003, losses exceeded EUR 200 million. The CEO was forced to resign.

Distribution organizations will be integrated within 12 months, with over 200 sales locations being reduced to 130–140 units, and a number of factories will also be closed or sold as part of the integration process. Restructuring costs are estimated at £38–44 million, however Metso expect synergies of around £44 million in the first 12 months after completion.

The optimistic projections had collided with reality. Integrating two global distribution networks, harmonizing manufacturing operations across multiple countries, and merging competing product lines proved far more complex than anticipated.

The Turnaround Artist

In March 2004, Metso brought in a new CEO: Jorma Eloranta, who had previously led Kværner Masa-Yards, Finland's largest shipbuilder. Eloranta brought a shipbuilder's discipline to the chaotic integration. Under his leadership, Metso systematically worked through the operational challenges, rationalizing factories, consolidating sales forces, and focusing resources on the most promising product lines.

Metso continues to estimate synergies at EUR 70 million, principally from elimination of overlapping administration costs and integration of distribution networks and manufacturing operations. These are expected to be realized in full in 2003, with roughly 50% being achieved in 2002.

The Svedala acquisition offers a masterclass in why mergers fail—and how determined management can eventually make them work. The lesson: in industrial combinations, cultural integration and operational execution matter more than strategic logic.

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V. The Turnaround and China/India Expansion (2004–2012)

🌏 Rising from the Ashes

By the mid-2000s, Metso's recovery was gaining momentum, aided by favorable tailwinds in commodity markets. The mining supercycle—driven by China's voracious appetite for raw materials—was transforming the fortunes of equipment suppliers worldwide.

By 2008, Metso had become Finland's ninth largest company and the number of Metso shareholders had increased from 25,000 to 42,000. Metso strengthened its market position and service capacity in growing markets, particularly in India and China. During 2008, the expansions to the Ahmedabad foundry and the Bawal factory in India were completed.

By 2008, the company's net sales had surged to approximately €6.4 billion, reflecting strong order intake in minerals and automation amid favorable conditions in mining and construction.

The Emerging Markets Pivot

By 2009, half of Metso's orders received in 2009 came from emerging markets, compared to less than one fifth in 1999.

This geographic transformation was profound. A company that had been predominantly European and North American in its customer base was now deriving half its orders from emerging economies. China, India, Brazil, Russia—the BRICs were driving demand for infrastructure and commodity extraction, and Metso was well-positioned to serve them.

The Services Revelation

Perhaps more important than geographic diversification was the growing recognition of services as a profit engine. By 2011, despite global economic uncertainty, Metso's profitability grew steadily. The services business, with a value of over three billion euros, accounted for about 40 percent of orders received.

The logic was simple but powerful: every crusher, every grinding mill, every piece of processing equipment Metso sold created a decades-long stream of aftermarket revenue. Spare parts, maintenance services, performance optimization—these activities commanded higher margins than original equipment sales and provided recession-resistant recurring revenue.

The Paper Problem Returns

Yet even as the minerals business flourished, Metso's paper machinery division faced accelerating structural decline. Digital disruption was crushing demand for printing and writing papers. In the Paper business line, management believes that structural changes in the paper industry are likely to continue and expects demand for papermaking lines to remain weak.

Management faced a strategic dilemma: the company's two major businesses—paper machinery and minerals processing—operated on fundamentally different trajectories. One was declining; the other growing. One required investment to defend market share; the other offered attractive returns on expansion capital.

The answer would be radical: break the company apart.

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VI. Inflection Point #3: The 2013 Demerger – Splitting to Win

✂️ The Courage to Divide

Metso's Board has today approved a demerger plan to transfer all the assets, debts and liabilities of Metso's Pulp, Paper and Power businesses to a newly-formed company that will be named Valmet Corporation. An application will be made to list the shares of Valmet on the NASDAQ OMX Helsinki stock exchange.

Metso Corporation's Extraordinary General Meeting on October 1, 2013 decided to demerge Metso Corporation in to two separate listed companies. After the demerger, Metso's Pulp, paper and power business formed a new company, Valmet Oyj.

The completion of the demerger was registered in the Finnish Trade Register on December 31, 2013, which also was the date when the incorporation of Valmet became effective. Metso's shareholders received as demerger consideration one (1) share in Valmet for each share owned in Metso.

The Strategic Logic

Following the demerger, Metso's current Mining and Construction and Automation businesses would remain in the current company, which would continue to operate under the Metso name. Valmet would initially have the same ownership structure as Metso and would be totally independent without any cross-ownership between Metso and Valmet.

On 1 October 2013, the Extraordinary General Meeting approved the demerger of Metso into two companies. At the start of 2014, Metso Corporation's Mining and Construction business and Automation business formed the new Metso Corporation and Metso's Pulp, Paper and Power business formed a new independent company under the name Valmet Corporation.

The demerger thesis was straightforward: conglomerates sometimes create more value by breaking apart than by staying together. Paper machinery required a different capital allocation approach, different management focus, and different investor appeal than minerals processing equipment. Separating them would allow each business to optimize for its own industry dynamics.

Further Refinement

In 2015, Metso divested its Process Automation Systems (PAS) business to Valmet, focusing on their mining and aggregates industries operations and on the flow control systems manufacturing business.

The PAS divestment further sharpened Metso's focus, removing automation activities that overlapped with Valmet's paper mill expertise. A key post-demerger move came in 2015, when Metso sold its Process Automation Systems business to Valmet for an enterprise value of EUR 340 million.

Vindication

Both Valmet and Metso thrived as independent companies. Valmet successfully navigated the paper industry's restructuring, finding growth in pulp production, tissue machines, and energy solutions. Metso focused resources on minerals processing and flow control, positioning itself for the next industry cycle.

The demerger stands as validation of a counterintuitive principle: in industrial conglomerates, addition by subtraction can create shareholder value. When businesses require different strategies, management attention, and capital allocation approaches, separating them often proves superior to maintaining an unwieldy combination.

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VII. The Outotec Story: From Outokumpu to Independent Technology Champion

🔬 Flash Smelting's Legacy

Outotec Oyj (Outokumpu Technology prior to 24 April 2007) was a Finnish company, headquartered in Espoo, aimed at providing technologies and services for the metal and mineral processing industries.

Outotec was previously a wholly owned business area of Outokumpu, having been established in the late 1940s, but it was spun off as a separate entity in June 2006 when the parent company decided to concentrate on its primary concern.

The unit's foundational innovation was the flash smelting technology, developed by Outokumpu engineers in the 1940s to enable efficient, low-energy sulfide ore smelting by injecting finely ground ore and oxygen-enriched air directly into a reaction shaft. This process was first implemented industrially on April 20, 1949, at Outokumpu's Harjavalta copper smelter in Finland, marking a significant advancement in copper production that reduced fuel consumption by up to 60% compared to traditional methods.

After the spin-off of Outokumpu Technology from Outokumpu Group in 2006 and the name change of the company to Outotec in April 2007, the Flash Smelting Process became part of a wide range of proprietary technologies owned and marketed by Outotec.

The Independent Era

Tapani Järvinen served as the inaugural President and CEO from the company's listing on October 25, 2006, until his retirement at the end of 2009, overseeing the initial transition from Outokumpu Technology to an independent entity focused on mineral processing technologies. Pertti Korhonen succeeded him, joining as COO in October 2009 and assuming the CEO role on January 1, 2010, until June 2016; under his leadership, Outotec pursued aggressive growth through strategic acquisitions, including Ausmelt Ltd. in 2010 to enhance smelting technologies.

Markku Teräsvasara was appointed CEO on November 1, 2016, following an agreement with Korhonen, and led the company until the 2020 merger, emphasizing operational efficiency and positioning Outotec for integration with Metso Minerals amid evolving market demands in sustainable processing.

Outotec developed a technology-first, services-heavy business model that would prove complementary to Metso's equipment strength. Where Metso excelled in crushing, screening, and grinding hardware, Outotec brought expertise in hydrometallurgical and pyrometallurgical processing—the downstream technologies that extracted pure metals from mineral concentrates.

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VIII. Inflection Point #4: The 2020 Metso-Outotec Merger

🤝 Combining Complementary Champions

Metso Minerals and Outotec have agreed to merge to create "Metso Outotec" a company that will deliver process technology and equipment to the minerals, metals and aggregates industries. The new combined company, which excludes Metso Flow Control, has a combined sales total of €3.9 billion in 2018.

The combination of Metso and Outotec is a unique opportunity to deliver significant value for our shareholders with a broad presence across minerals, metals and aggregates value chains and an even stronger platform for growth and innovation.

Deal Architecture

The transaction structure was elegant: a partial demerger of Metso, with Metso's Minerals business merging with Outotec while Metso's Flow Control business would become an independent entity named Neles.

Metso shareholders will receive as demerger consideration 4.3 new shares in Outotec for each share owned in Metso. Upon completion of the transaction, Metso and Outotec shareholders would own approximately 78.0% and approximately 22.0%, respectively, of the shares and votes of Metso Outotec.

Outotec Oyj and Metso Corporation have on May 13, 2020, received unconditional merger control clearance from the European Commission for the combination of Metso's Minerals business with Outotec through a partial demerger of Metso.

The official formation date was July 1, 2020.

Synergy Realization

The timetable and scope of the cost synergies are confirmed to be more positive than originally estimated. The target is therefore raised to EUR 120 million of annual pre-tax run-rate cost synergies and the implementation will be accelerated so that the run-rate of the synergies is expected to be realized by the end of 2021.

About EUR 50 million of annual run-rate of the cost synergies is expected to be achieved already by the end of 2020. Procurement is estimated to represent about 25% of the total cost synergies and the rest would be brought about from personnel, functional and other cost synergies.

The acceleration of synergies beyond initial targets suggested that the combination was genuinely complementary rather than merely additive.

Brand Consolidation

The formation of Metso Outotec in June 2020 marked a significant milestone, merging Metso Minerals and Outotec to create a larger entity focused on the minerals and aggregates sector. This strategic combination aimed to unlock cost savings and revenue synergies, with the company subsequently rebranding to Metso in 2023.

The name simplification to "Metso" in May 2023 marked the completion of post-merger integration, signaling to customers and investors that two distinct organizations had become one.

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IX. Today's Metso: The Business Model Deep Dive

📊 The Two-Segment Structure

Today's Metso operates through two primary segments: Aggregates and Minerals. The company operates in three segments: Aggregates, Minerals, and Metals. It offers a range of equipment, parts, and services for quarries, aggregates contractors, and construction companies, as well as demolition and recycling applications; and a portfolio of process solutions, equipment, and aftermarket services, as well as plant delivery capability for mining operations.

The Aggregates segment serves quarry and contractor customers, providing crushing and screening equipment for construction and infrastructure projects. The Minerals segment caters to the mining industry, offering equipment, process islands, and plants for minerals processing, as well as hydrometallurgical and pyrometallurgical solutions for metal recovery. The majority of Metso's revenue is generated from its Minerals segment.

The Services Flywheel

The most important strategic insight underpinning Metso's business model is the relationship between equipment sales and services revenue. Every piece of capital equipment sold creates a multi-decade stream of aftermarket opportunity: spare parts, wear components, maintenance services, performance optimization, and eventually, equipment rebuilds and upgrades.

Metso achieved total business sales valued at €4.9 billion in 2024, including €1.3 billion Metso Plus sales.

In 2024, Metso secured over 100 new LCS contracts with global and regional mining companies, large quarries and aggregate contractors. The average duration of a contract is three years but can range from 12 months to multiple years of partnership. The orders are booked on a phased basis, depending on the length and type of the agreement.

Metso has been offering innovative Life Cycle Services for over 15 years. Takaluoma notes that Metso Aggregates' business segment customers now account for around a third of the over 550 active Metso LCS contracts.

Financial Performance

Orders received EUR million 5,140; Adjusted EBITA EUR million 804; Adjusted EBITA 16.5%.

The Group's sales decreased by 5 percent, which was a result of the lower order intake during the previous quarters. Our adjusted EBITA was EUR 203 million, and the adjusted EBITA margin was healthy at 16.0 percent.

Maintaining high profitability has been our key financial goal, and our EBITA remained at the high level of 16%.

As of 30-Jun-2025 the stock price of Metso is $12.88. The current market capitalization of Metso is $10.7B.

Geographic Diversification

The company has a broad customer base, with no single customer accounting for more than 10% of sales—a crucial risk mitigation factor given the cyclicality of mining investment.

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X. Sustainability as Strategy: Planet Positive to Metso Plus

🌍 More Than Marketing

In 2021, Metso launched its Planet Positive approach as a concrete answer to tackling the sustainability challenges of its customer industries. Ever since, the products and services included in Metso's sustainable portfolio have been important to differentiate the company. To date, Metso has over 100 products in its portfolio of sustainable products.

These products are demonstrably more energy or water efficient than the industry benchmark or Metso's previous generation products. They provide added benefits to the customers, helping them cut their CO2 emissions, reduce pollution to land, air and soil, increase circularity and safety, and improve productivity.

To comply with the proposed changing EU legislation and to emphasize our focus on supporting our customers with their key challenges, Metso is renaming its Planet Positive offering to Metso Plus.

Why Sustainability Isn't Greenwashing in Mining Equipment

The mining industry is one of the world's largest energy consumers. Comminution—the grinding and crushing of rock to liberate valuable minerals—alone accounts for approximately 3-5% of global electricity consumption. For mining companies, energy is often their largest operating cost after labor.

This creates a genuine commercial opportunity for equipment suppliers who can deliver energy savings. A crusher that reduces power consumption by 15% doesn't just help the customer meet sustainability targets—it directly improves operating margins. A water recycling system doesn't just demonstrate environmental responsibility—it enables mining operations in water-stressed regions that would otherwise be impossible.

On May 16, 2024, Metso launched the first diesel-electric Lokotrack EC range units. Metso's Lokotrack® EC range brings a new diesel-electric power line to the aggregates market. All the process functions of the range are electric, significantly reducing the use of hydraulic oil needed in crushing operations.

Emissions Reduction Progress

Additionally, Metso aims to continue being an industry frontrunner in sustainability, targeting net zero emissions in its own operations by 2030. We will further strengthen our existing Science-Based climate targets throughout the value chain from suppliers to customers.

Sustainability KPIs in Metso's sustainability-linked bond issued in 2023 are scope 1 and 2 emissions. In 2024, scope 1 and 2 emissions were 33,799 tCO2e, a decrease of 31% from the original bond baseline.

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XI. Recent Developments & Leadership Transition (2024–Present)

👔 A Services Leader Takes the Helm

Metso's Board of Directors has appointed Sami Takaluoma (born 1973, M.Sc. (Eng.)) as Metso's new President and CEO. He will assume his duties on November 1, 2024.

Sami Takaluoma has been with Metso since 1997 and has led Metso's Services business area since 2021. He has been a member of Metso's Leadership Team since 2017.

Under his leadership, Metso's services and consumables businesses have grown and created significant value, especially after the merger of Metso and Outotec. The board is convinced that Sami is the right choice to lead Metso into its next phase.

After having worked in the company for 27 years and heading its Services business for the past four years, I started as Metso's CEO.

Takaluoma's background in services is strategically significant. The services business represents Metso's highest-margin, most stable revenue stream—exactly the area where management believes future value creation lies.

The "We Go Beyond" Strategy

The Board of Directors of Metso has approved an updated strategy for the period 2026–2030. The Board also decided on new financial targets to be achieved by the end of 2028. Metso's new strategy, 'We go beyond.', focuses on business growth and improved profitability, customer-centricity, market leadership, and increasing the share of aftermarket.

There are four strategic objectives: the best customer experience, a higher share of aftermarket in sales, leadership in sustainability and safety, and financial excellence.

New Financial Targets

Annual sales growth (CAGR) of at least 7% (new target) Adjusted EBITA margin over 18% (previously over 17% over the cycle) Net debt to EBITDA ratio below 1.5 (new target replacing 'maintain investment grade rating' target) Annual dividend of at least 50% of earnings per share (no change).

"As a result, we now have a powerful strategy that plays to our strengths and enables us to set the industry benchmark," says Metso's President and CEO Sami Takaluoma. "The new financial targets demonstrate our ambition to elevate Metso to new heights."

Q3 2025 Performance

Orders received increased 2% to EUR 1,264 million; Aggregates +8% and Minerals +1% Sales grew 10% to EUR 1,328 million; Aggregates +9% and Minerals +10% Adjusted EBITA was EUR 222 million, or 16.7% of sales.

In September, we launched our new 'We go beyond.' strategy, which places customers at the heart of everything we do and unlocks Metso's full potential for growth and profitability. By focusing on customer experience, sustainability and safety leadership, and financial excellence, we are setting new benchmarks for our industry. In Aggregates, we are reinforcing our leadership in aftermarket and recycling, while in Minerals, we are driving growth in energy transition minerals through technology and customer closeness.

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XII. Competitive Landscape and Bull/Bear Analysis

🏆 Market Position

Metso Outotec's primary competitors include FLSmidth, Sandvik, and Weir Group. These companies offer similar products and services within the mining and minerals processing industries.

Sandvik AB, Metso Outotec Corp, Terex Corp, ThyssenKrupp Industrial Solutions AG, and FLSmidth & Co AS are the top 5 processing plant suppliers in the world in 2021 by revenue.

The Mineral Processing Equipment Market is expected to reach USD 24.62 billion in 2025 and grow at a CAGR of 5.35% to reach USD 31.95 billion by 2030.

Porter's Five Forces Analysis

Force	Assessment	Implications
Supplier Power	Moderate	Metso sources specialized components but has scale to negotiate; vertical integration in some areas
Buyer Power	Moderate-High	Large mining companies have negotiating leverage, but Metso's installed base creates switching costs
Threat of New Entrants	Low	High capital requirements, engineering expertise, and service network create significant barriers
Threat of Substitutes	Low	Mining and aggregates production requires specialized equipment; few alternatives exist
Competitive Rivalry	High	Global competition from FLSmidth, Sandvik, Weir; regional players in Asia gaining share

Hamilton Helmer's 7 Powers Framework

Power	Applicability	Strength
Scale Economies	✓ Strong	R&D, global service network, procurement advantages
Network Effects	✓ Moderate	Installed base creates training/expertise ecosystem
Counter-Positioning	✓ Moderate	Services-led model harder for equipment-focused competitors to replicate
Switching Costs	✓ Strong	Proprietary parts, integrated systems, service relationships
Branding	✓ Moderate	Strong OEM reputation in reliability; Metso Plus for sustainability
Cornered Resource	✓ Strong	Flash smelting technology, proprietary processes, deep application expertise
Process Power	✓ Moderate	Decades of operational refinement in manufacturing and service delivery

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XIII. Bull Case

📈 The Case for Metso

1. Energy Transition Tailwinds The electrification of transportation and expansion of renewable energy require massive increases in copper, lithium, nickel, and rare earth production. Electric vehicles contain 4-6x more copper than internal combustion vehicles. This demand must be met through both new mines and increased productivity at existing operations—both favorable for equipment suppliers.

In the Minerals segment, copper production, in particular, is expected to grow driven by electrification and the increase in data centers and renewable energy. In addition to the forecasted market growth, Metso's growth targets are based on the segments' choices to allocate resources to those solutions and customer segments that drive profitable growth the fastest.

2. Services Flywheel Services now represent the majority of sales and command higher margins than equipment. The installed base continues to grow, creating decades of aftermarket opportunity. Mining companies increasingly prefer life-cycle contracts that guarantee availability and performance.

3. Sustainability Leadership As environmental regulations tighten globally, Metso's energy-efficient technologies become not merely nice-to-have but essential for permits and social license to operate. The Metso Plus portfolio positions the company to capture growing customer demand for sustainable solutions.

4. Strong Balance Sheet At the end of December, Metso had a 'BBB' long-term issuer credit rating with stable outlook from S&P Global Ratings and a 'Baa2' long-term issuer rating with stable outlook from Moody's Investor Service.

Investment-grade ratings provide financial flexibility for opportunistic acquisitions and returns of capital.

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XIV. Bear Case

📉 The Risks

1. Mining Capex Cyclicality Mining capital expenditure is notoriously volatile, driven by commodity prices and industry sentiment. A prolonged downturn in copper, gold, or iron ore prices would pressure equipment orders. While services provide some cushion, a severe mining downturn affects both segments.

2. Competitive Pressure FLSmidth's acquisition strategy has strengthened its position. Sandvik continues investing in digitalization. Chinese manufacturers are expanding internationally with competitive pricing. Maintaining technology leadership requires continuous R&D investment.

3. Execution Risk on New Strategy The "We Go Beyond" strategy targets aggressive growth (7%+ CAGR) and margin expansion (18%+ EBITA). Achieving both simultaneously in a cyclical industry is challenging. Management transitions carry inherent uncertainty despite Takaluoma's long tenure.

4. Geopolitical and Supply Chain Risks Mining operations are concentrated in jurisdictions with varying political stability. Supply chains for specialized components can be disrupted by trade tensions or logistics bottlenecks. Currency fluctuations affect reported results given global operations.

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XV. Key Performance Indicators to Watch

📊 What Matters Most

For long-term fundamental investors following Metso, three KPIs deserve particular attention:

1. Services Share of Revenue (Target: >60%) The proportion of sales from services versus original equipment indicates business model resilience and margin quality. Higher services mix suggests stronger recurring revenue, better margins, and reduced cyclical exposure. Management targets continuing growth in this metric.

2. Adjusted EBITA Margin (Target: >18%) Profitability discipline through mining cycles demonstrates pricing power and operational efficiency. The upgraded target of 18%+ (from 17%) signals management confidence but also creates accountability. Watch margin progression through commodity price fluctuations.

3. Orders Received Growth (Target: 7% CAGR) Leading indicator of future revenue. Particularly important to track equipment orders versus services orders—equipment orders reflect mining capex sentiment; services orders indicate installed base monetization. Divergence between segments provides insight into cycle positioning.

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XVI. Conclusion: The Long View

Looking back over 270 years of industrial history—from an 18th-century fortress shipyard through war reparations, paper machines, rock crushers, and flash smelters—Metso's story is ultimately about adaptation. Finnish necessity mothered invention repeatedly: when electricity was scarce, engineers invented flash smelting; when Soviet reparations demanded ships and locomotives, artillery factories became paper machine manufacturers; when paper declined, strategic demergers unlocked value.

Today's Metso inherits this adaptability while facing its own generational challenge: enabling sustainable resource extraction as the world electrifies. The company's strategic positioning—combining equipment expertise with services dominance and sustainability leadership—seems well-suited to this moment.

Whether Metso achieves its ambitious targets will depend on execution through inevitable mining cycles, competitive battles with global rivals, and continued innovation in energy-efficient technologies. But for investors willing to look beyond quarterly noise to multi-decade trends in urbanization, electrification, and resource demand, the Finnish powerhouse that survived war reparations, integration disasters, and strategic demergers offers a compelling case study in industrial resilience.

The strange hill in Eastern Finland that gave Outokumpu its name still yields its secrets. And the Nordic engineering tradition that turned constraints into advantages continues to drive innovation at the company where that tradition endures.

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Myth vs. Reality: The Services Business

Myth: Mining equipment companies are pure cyclical plays, rising and falling with commodity prices.

Reality: Metso generates over 58% of revenue from services—spare parts, maintenance, optimization—creating a substantial base of recurring, higher-margin revenue that moderates cyclical exposure. The installed base only grows over time.

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Myth vs. Reality: Sustainability as Marketing

Myth: "Planet Positive" and "Metso Plus" are marketing exercises with no economic substance.

Reality: Energy represents 30-40% of mining operating costs. Equipment that reduces power consumption by 15-20% delivers immediate ROI for customers—sustainability and profitability align in this industry. The rebrand to Metso Plus actually reflects stricter EU regulations on environmental claims, requiring substantiation.