Tag Archives: McCloskey

Metso Minerals orders hold up in face of COVID-19 impacts

Metso’s orders and sales held up in the March quarter in the face of the onset of COVID-19, with the company saying activity in its mining equipment business continued in line with expectations.

The company posted a 5% year-on-year increase in orders received to €1.07 billion ($1.15 billion), while its sales were unchanged at €832 million. Its operating profit dropped to €73 million, from €100 million a year earlier, but it was still able to generate free cash flow of €78 million during the three-month period.

Metso said the measures taken to prevent the spread of COVID-19 started to have a material impact on its businesses and financial performance only towards the end of the March quarter. It was around this time that the company outlined its COVID-19 strategy.

“In February, the businesses and operations in China were affected but this impact was offset later, thanks to a fast ramp-up in March,” it said. “Quarterly orders from China were higher year-on-year, while the drop in sales will take longer to catch up.”

Lockdowns were introduced in mid-March in other countries, with the restrictions in India having had the biggest impact on Metso, it noted. There was some positive news, with, as of mid-April, operations in India and South Africa being permitted to ramp up.

In terms of customer demand, Metso said, from mid-March, the biggest COVID-19-related impact came from its aggregates equipment business, where customers and distributors significantly reduced their investments.

The mining equipment business, however, continued in line with expectations.

“The importance of the mining operations for many countries has been visible in the continued healthy demand for spare and wear parts,” Metso said, while noting that restrictions relating to travel and workforce mobility have had an impact on mining services by limiting service work carried out at customers’ mines.

Its Minerals business saw a 6% year-on-year jump in orders received in the March quarter, while services orders rose 5%. Growth of 8% in equipment orders was supported by the acquisition of McCloskey, it said, noting that mining equipment orders increased slightly against a high comparison period, “highlighting the healthy market activity.”

Metso reaffirmed that its partial demerger and the transaction to create Metso Outotec and Neles continue to progress according to plan, with closing currently expected to take place on June 30, 2020, subject to regulatory approvals.

Metso breaks records as it looks forward to more growth

It was a record year in terms of profitability for Metso in 2019; a year that saw the minerals processing company make several strategic decisions to fundamentally change its group structure.

Orders received across the group increased 5% to €3.7 billion ($4.1 billion), with sales growing 15% to €3.635 billion. Adjusted EBITA rose from €369 million in 2018 to €474 million (13% of sales) in 2019, while operating profit jumped to €418 million from €351 million.

Metso President and CEO, Pekka Vauramo, said 2019 was in many ways historical and transformational for the company.

“It also marked a record in our financial performance, as our sales increased in both segments and our profitability was higher than ever in the company’s history,” he said.

The company also launched some major new products – including the Metso Truck Body and the VPX filter – in addition to publishing the Metso Climate Program, which aims for notable reductions in emissions.

The year will be remembered for two major strategic decisions from Metso.

“The first was the acquisition of McCloskey, a Canadian supplier of mobile aggregates crushers and screens,” Vauramo said. “After the closing of the acquisition in October, Metso’s offering strengthened in the mobile aggregates equipment market, which is estimated to see the industry’s fastest-growing demand.”

“The second and truly transformative step was the decision related to the partial demerger of Metso, after which Metso’s Minerals business will be combined with Outotec to create Metso Outotec, a unique company in the minerals, metals and aggregates industries,” Vauramo said.

At the same time as this, the company took the decision to allow its valves business to continue as an independent listed company named Neles.

Vauramo said: “We are confident that, as a result of this transaction, both companies will be well-positioned to grow and create value for our customers and other stakeholders.”

Shareholders of both Metso and Outotec approved the transaction in October at respective meetings and internal preparations have proceeded according to plan, Vauramo said.

The completion of the transaction still requires approvals from the competition authorities in various markets, but according to the company’s estimate, closing should take place on June 30, 2020.

McCloskey becomes part of Metso

Metso says it has completed the acquisition of McCloskey International, a Canadian mobile crushing and screening equipment manufacturer with market share in the aggregates sector, as well as customers in the frac sand and industrial minerals segments.

The deal was announced back in June, with Metso, at that time, saying the acquisition would allow the company to “better take part in the attractive growth of mobile products within the aggregates industry”.

“This acquisition is an excellent strategic fit for Metso, because it strengthens our aggregates business and balances our traditionally mining-focused Minerals portfolio. With McCloskey as part of Metso, we are also able to better take part in the attractive, long-term growth of the mobile equipment market within the aggregates industry,” says Pekka Vauramo, Metso’s President and CEO.

Markku Simula, President of the Aggregates Equipment business area of Metso, said: “This acquisition expands our offering to new customer segments and application areas. McCloskey’s capabilities and technical solutions strengthen our ability to address diverse customer needs through complementary channels and offerings. We are confident that McCloskey will align well with Metso, and we are excited to welcome new colleagues to the Metso family.”

McCloskey will be reported in Metso’s Minerals segment as of the December quarter.

Metso to add mobile crushing and screening specialist to group

Metso has signed an agreement to acquire McCloskey International, a Canada-based mobile crushing and screening equipment manufacturer with market share in the aggregates sector, as well as customers in the frac sand and industrial minerals segments.

“The mobile aggregate equipment market is expected to grow by 4-6% annually during 2019-2023, driven by the underlying road construction spend,” Metso said. “With this acquisition, Metso will be able to better take part in the attractive growth of mobile products within the aggregates industry.”

The enterprise value of the transaction is C$420 million payable at closing with an additional profitability-based earn-out consideration of up to C$35 million for the two-year period after closing, Metso said.

The deal comes on top of Metso’s recent acquisitions of Chile-based HighService Service and UK-based Kiln Flames Systems.

Pekka Vauramo, Metso’s President and CEO, said the McCloskey acquisition was in line with Metso’s profitable growth strategy.

“It strengthens our aggregates business in key growth areas. The different cycles of aggregates balance our previously more mining-focused Minerals portfolio well,” he said.

Markku Simula, President of the Aggregates Equipment business area in Metso, said customers in aggregates and construction have varying business needs, with this acquisition supporting the company’s expansion plans to “approach customers through multiple complementary channels and offerings to meet their diverse needs”.

He added: “Going forward, Metso plans to continue developing the McCloskey brands and distribution channels independent of the Metso channel. Synergies are, apart from sourcing, mainly revenue-related, resulting from the wider offering available to both channels as well as additional crusher equipment, service and consumable sales.”

In the 12-month period ending September 30, 2018, McCloskey had pro-forma sales of C$464 million ($344 million) and a pro-forma EBITDA margin of 10.3%, with the company’s sales in the fiscal year ending September 30, 2019, expected to exceed C$500 million, according to Metso.

McCloskey has around 900 employees in Canada, the US and Northern Ireland.

Paschal McCloskey, Founder, President and CEO of McCloskey, said: “We are proud of the growth achieved in a competitive market. I know that joining Metso is the right move for all our customers, employees, dealers and business partners. The combination of our unique focus on products and people and Metso’s global resources will help create even better solutions for our customers.”

Metso said the transaction is expected to be positive for Metso’s earnings per share in 2020. McCloskey will be reported in Metso’s Minerals segment following the acquisition, which is expected to closing during the December quarter of this year.