Financial review

2021

We are the partner

for positive change.

All Annual report sections are available in English and in Finnish. They are

downloadable on our Annual report website at www.mogroup.com/annualreport.

In this Annual report, we apply integrated reporting elements.

Business overview

Strategy, value creation,

and sustainability

Financial review

Board of Directors’

report, financial

statements, and investor

information

Corporate governance

statement

Corporate governance,

internal control and risk

management systems

Metso Outotec’s Annual report 2021 consists of five sections:

Business overview, Financial review, Corporate governance statement,

Remuneration report and GRI supplement.

Remuneration report

Remuneration of the

Board of Directors and

the CEO

GRI supplement

Externally assured

sustainability information

compliant with the GRI

standards

Business overview

2021

Financial review

2021

Corporate governance statement

2021

Remuneration report

2021

GRI supplement

2021

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Metso Outotec

Annual report 2021

consists of five

sections. This is the

Financial review.

Board of Directors’ report...................................................... 

Financial year 2021 ........................................................... 

Corporate governance statement ............................................. 

Statement of non-ﬁnancial information ........................................ 

Shares and shareholders ..................................................... 

Key ﬁgures .................................................................. 

Board of Directors’ proposal on the use of proﬁt ............................... 

Consolidated ﬁnancial statements, IFRS ....................................... 

Consolidated statementof income ............................................ 

Consolidated statement of comprehensive income .............................. 

Consolidated balance sheet ................................................... 

Consolidated statement of changes in shareholders’ equity ...................... 

Consolidated statement of cash ﬂows ......................................... 

Notes to the consolidated ﬁnancial statements.................................. 

Contents

Signatures of the Board of Directors’ report and ﬁnancial statements ........ 

Auditor’s Report ............................................................... 

Independent Auditor’s Report on

Metso Outotec Oyj’s ESEF Consolidated Financial Statements ................ 

Investor information ........................................................... 

Financial statements of the Parent company, FAS ............................. 

INVESTOR INFORMATIONFINANCIAL STATEMENTSBOARD OF DIRECTORS’ REPORT

1. Group performance ........................... 

Reporting segments ......................... 

Sales ..................................... 

Selling general and administrative expenses .... 

Other operating income and expenses ......... 

Personnel expenses and number of personnel ... 

Sharebased payments ...................... 

Financial income and expenses................ 

Income taxes .............................. 

Earnings per share .......................... 

2. Operational assets and liabilities .............. 

Net working capital and capital employed ....... 

Trade receivables ........................... 

Other receivables ........................... 

Inventory .................................. 

Trade and other payables .................... 

Provisions ................................. 

Postemployment obligations ................. 

3. Intangible assets and property, plant, and

equipment .................................. 

Goodwill and other intangible assets .......... 

Property plant and equipment................ 

Rightofuse assets ......................... 

Depreciation and amortization ................ 

4. Capital structure and ﬁnancial instruments .... 

Financial risk management ................... 

Financial assets and liabilities by category ....... 

Liquid funds ............................... 

Equity .................................... 

Borrowings and lease liabilities ................ 

Interestbearing net debt reconciliation . . . . . . . . . 

Contingent liabilities and other commitments .... 

Derivative instruments ....................... 

5. Consolidation ............................... 

Principles of consolidation .................... 

Subsidiaries ................................ 

Associated companies joint ventures and

related party transactions .................... 

Acquisitions and business disposals ............ 

Discontinued operations ..................... 

New accounting standards ................... 

Exchange rates used ........................ 

6. Other notes.................................. 

Audit fees ................................. 

Lawsuits and claims ......................... 

Events after the ﬁnancial year ................. 

Table of contents, notes to the consolidated financial statements

Board of Directors’ report

Financial year 2021

Figures for the comparison period are based on illustrative combined information for period

January–June 2020.

Operating environment and Covid-19

The activity in Metso Outotec’s customer industries increased during 2021 compared to the

previous year. Improvement was seen especially in the demand for new equipment in all

three segments, whereas Covid-19-related restriction measures continued to limit the demand

for service work at customer sites. This was seen particularly during the ﬁrst half of the year,

whereas the demand for services started to recover during the second half.

Local and regional restrictions and lockdowns continued to limit access to customer sites

and in certain countries, also to our own premises. Despite gradual easing of restrictions,

challenges related mainly to international travel remained. These are apt to slow down

decision-making and overall cooperation with customers. While the Omicron variant has

appeared less serious, its rapid spread has been a challenge especially to the manufacturing

and warehousing operations, where a higher number of sick leaves has resulted in temporary

shortages of employees. Metso Outotec’s own operations, however, have run without any

signiﬁcant disruptions, thanks to various measures such as replanned work and increased

utilization of temporary workforce.

Key figures

EUR million   Change %

Orders received   

Orders received by services business   

% of orders received   

Order backlog   

Sales   

Sales by services business   

% of sales   

Adjusted EBITA   

% of sales   

Operating proﬁt   

% of sales   

Earnings per share, EUR (IFRS)   

Earnings per share, total, EUR   

Cash ﬂow from operations (IFRS)   

Gearing, % (IFRS)   

Personnel at end of year   

Financial performance

The Group’s annual orders received grew 31% and totaled EUR 5,421million (EUR 4,150million).

The growth was driven by an almost 50% growth in equipment orders. The majority of the

order intake consisted of small and mid-sized product and services orders, while a few large

orders were booked in the Metals and Minerals segments. Increased demand was also seen

for Planet Positive products. Annual sales increased 9% to EUR 4,236million (EUR 3,897million),

with the strongest growth seen in the Aggregates and Metals segments. The growth

accelerated during the second half, thanks to an increase in deliveries from the backlog and a

strong increase in services sales in the fourth quarter. The order backlog of EUR 3,536 million

at the end of December was almost 50% higher than a year before.

Adjusted EBITA increased to EUR 547million (EUR 448million), and adjusted EBITA margin

improved to 12.9% (11.5%). Operating proﬁt totaled EUR 425million, or 10.0% of sales (EUR

253million and 6.5%). Operating proﬁt included negative adjustments of EUR 50 million (EUR

97 million negative), the majority of which were related to the Metso Outotec integration. Proﬁt

before taxes was EUR 385 million (EUR 209 million). The eective tax rate was 24% (26%).

The lower tax rate resulted from certain tax-exempt one-o-items. Earnings per share for

continuing operations were EUR 0.35 (EUR 0.20).

Impacts from currency and structural changes on orders received

EUR million, % Aggregates Minerals Metals Total

2020    

Organic growth in constant currencies, %    

Impact of changes in exchange rates, %    

Structural changes, %    

Total change, %    

2021    

Impacts from currency and structural changes on sales

EUR million, % Aggregates Minerals Metals Total

2020    

Organic growth in constant currencies, %    

Impact of changes in exchange rates, %    

Structural changes, %    

Total change, %    

2021    

Financial review 2021|Board of Directors’ report 6

Financial position

The Group’s net interest-bearing liabilities were EUR 470million at the end of December

(Dec31, 2020: EUR 799 million), gearing decreased to 20.9% (Dec31, 2020: 39.2%) and the

debt-to-capital ratio to 26.7% (Dec31, 2020: 37.2%). The equity-to-assets ratio was 43.2% (Dec31,

2020: 39.5%).

The Group’s liquidity position is strong, supported by its healthy operative cash ﬂow,

maturity structure of its funding, and available back-up credit facilities. Liquid funds, consisting

of cash and cash equivalents, amounted to EUR 473million (Dec31, 2020: EUR 537 million), and

there were no deposits or securities with a maturity more than three months (Dec 31, 2020:

EUR 0 million).

In addition, Metso Outotec has a committed syndicated revolving credit facility of EUR 600

million with a maturity in 2026. At the end of the period the facility was undrawn. The company

also has a EUR 600 million Finnish commercial paper program, which was fully unutilized at the

end of the period.

Metso Outotec has a Euro Medium Term Note Program (EMTN) of EUR 2 billion, under

which EUR 687 million at carrying value was outstanding at the end of December (Dec 31,

2020: EUR 689 million). EUR 587 million (Dec 31, 2020: EUR 589) of the outstanding amount was

public bonds and EUR 100 million (Dec 31, 2020: EUR 100 million) private placements.

The average interest rate of total loans and derivatives was 1.38%, on December31, 2021.

The duration of medium- and long-term interest-bearing debt was 2.2 years and the average

maturity 3.3 years.

Metso Outotec made several early repayments to bank loans using its liquid funds in 2021.

During the ﬁrst quarter, the company made an early repayment of a EUR 100 million term

loan, which would have matured in 2022. During the second quarter, the company cancelled

two bilateral revolving credit facilities totaling EUR 90 million, which would have matured in

2022. A term loan of EUR 150 million, which would have matured in 2022, was repaid in three

EUR 50 million lots in the second, third and fourth quarters. Another loan of EUR 150 million,

which would have matured in July 2022, was repaid with early repayments of EUR 100 million in

December and remaining EUR 50 million after the reporting period in January 2022.

As part of its strategic commitment to sustainability, Metso Outotec initiated ﬁnancing linked

to its sustainability targets during 2021. Sustainability targets relating to the Group’s own CO

emissions, emissions from its logistics and its suppliers having Science-Based emission targets

were incorporated in its EUR 600 million Syndicated Revolving Credit Facility, and the cost of

the facility will depend on the achievement of these targets.

The same sustainability targets were included in a new loan agreement with Nordic

Investment Bank for EUR 100 million with a maturity of eight years. The loan was committed

and undrawn at the end of 2021.

Metso Outotec has 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.

Metso Outotec integration and synergies

Metso Outotec exceeded clearly its cost synergy target of reaching an annual run-rate of EUR

120 million by achieving a run-rate of EUR 142 million at the end of the year. The majority of

the realized synergies resulted from the restructuring of the organization and the rest came

from procurement, facilities, and IT.

As of the end of 2021, revenue synergies realized as sales totaled EUR 110 million and an

additional EUR 115 million was recognized in the order backlog, resulting in the annual run-rate

revenue synergy target of EUR 150 million to be well exceeded ahead of the scheduled end

of 2022. Due to the successful execution of both the cost and revenue synergies, Metso

Outotec will close the integration period and discontinue the reporting of synergies. As of the

beginning of 2022, the company will focus on implementing its growth strategy and achieving

its earlier set ﬁnancial targets.

One-o, pre-tax costs of EUR 81 million materialized from the actions taken to achieve the

cost and revenue synergies during the integration period. This is slightly higher than the earlier

estimated EUR 75 million.

Reporting segments: Aggregates

Key ﬁgures (IFRS)

EUR million   Change %

Orders received   

Orders received by services business   

% of orders received   

Order backlog   

Sales   

Sales by services business   

% of sales   

Adjusted EBITA   

% of sales   

Operating proﬁt   

% of sales   

Orders received increased 24% to EUR 1,374 million, thanks to the strong customer activity

especially in the European and North American markets. Sales grew 21% year-on-year, with

both equipment and services sales increasing. Adjusted EBITA improved to EUR 161 million

(EUR 107 million), corresponding to a margin of 13.4% (10.8%). The improvement in EBITA

and proﬁtability was driven by higher sales volumes, healthy sales margins, and operational

performance.

Financial review 2021|Board of Directors’ report 7

Reporting segments: Minerals

Key ﬁgures

EUR million   Change %

Orders received   

Orders received by services business   

% of orders received   

Order backlog   

Sales   

Sales by services business   

% of sales   

Adjusted EBITA   

% of sales   

Operating proﬁt   

% of sales   

Orders received increased 20% to EUR 3,127 million (2,601 million), driven by the equipment

business. Sales were ﬂat year-on-year, due to the timing of revenue recognition in the

equipment business as well as logistics and supply chain constraints in services. Implemented

cost synergies and other improvement actions had a positive impact on adjusted EBITA of EUR

368 million and adjusted EBITA margin of 14.6% (EUR 365 million and 14.5%).

Reporting segments: Metals

Key ﬁgures

EUR million   Change %

Orders received   

Orders received by services business   

% of orders received   

Order backlog   

Sales   

Sales by services business   

% of sales   

Adjusted EBITA   

% of sales   

Operating proﬁt   

% of sales   

Customer demand strengthened signiﬁcantly compared to 2020 and was reﬂected in an

increase in proposals and quotations as well as awarded orders. Orders received more than

doubled to EUR 919 million (443 million), including a signiﬁcant smelter order and a few other

large orders. Deliveries from the backlog started to accelerate during the second half of the

year and resulted in sales growth of 33% compared to the previous year. Adjusted EBITA

improved to 27 million (2 million) and adjusted EBITA margin increased to 5.3% (0.6%).

This improvement was driven by higher volumes and cost savings implemented as part the

segment’s turnaround program.

Capital expenditure and investments

Gross capital expenditure excluding business acquisitions was EUR 91 million in 2021. The

investments were largely made in foundry operations and other services operations globally.

Research and development

R&D expenses including investments in 2021 were EUR 70 million, or 1.6% of sales.

Inventions and patents

Pieces  

Invention disclosures  

Priority patent applications  

Individual granted patents in force, as of December 31  

Inventions protected by patents, as of December 31  

Code of Conduct

All Metso Outotec employees are required to complete Code of Conduct training annually. In

2021, 97% of all employees completed the training. Code of Conduct training is a mandatory

part of onboarding for all new employees. In addition, all sales third parties are required to

complete a speciﬁc anti-corruption training to ensure a common understanding of Metso

Outotec’s zero-tolerance for corruption and bribery. Also, suppliers are expected to comply

with Metso Outotec’s Supplier Code of Conduct.

Compliance management

Metso Outotec has an audit framework in place to support risk management by assessing

compliance and driving continuous development. In total, 34 internal audits were performed in

2021.

In addition, 28 reports of suspected ﬁnancial misconduct and 32 reports of suspected

non-ﬁnancial misconduct were received by Internal Audit and Compliance. The cases of

suspected misconduct were reviewed by the Audit and Risk Committee in line with Metso

Financial review 2021|Board of Directors’ report 8

Outotec’s guidelines on reporting misconduct. None of the cases had a signiﬁcant impact on

Metso Outotec’s ﬁnancial results.

Regarding data privacy, the focus was on the development of international data transfer

requirements as well as reviewing its related processes.

Corporate governance and remuneration

Metso Outotec Annual General Meeting 2021

Metso Outotec Corporation’s Annual General Meeting (AGM) was held on April 23, 2021, in

Helsinki through exceptional procedures in accordance with temporary legislative act, which

entered into force on October 3, 2020, to limit the spread of the Covid-19 pandemic. The AGM

adopted the ﬁnancial statements and discharged the members of the Board of Directors and

the President & CEOs from liability for the ﬁnancial year 2020 and adopted the company’s

remuneration report for governing bodies through an advisory resolution.

The AGM resolved to approve the Board of Directors’ proposal to pay a dividend of EUR

0.20 per share from the ﬁnancial year 2020 in two installments. The ﬁrst dividend installment of

EUR 0.10 per share was paid on May 4, 2021, and the second installment of EUR 0.10 per share

was paid on November 10, 2021.

Metso Outotec’s Board composition and remuneration

The AGM resolved to elect seven members to the Board of Directors. The AGM resolved to

re-elect the following members of the Board of Directors: Kari Stadigh was elected as the

Chair, Klaus Cawén as the Vice Chair, and Christer Gardell, Antti Mäkinen, Ian W. Pearce,

Emanuela Speranza, and Arja Talma as members of the Board. The term of oce of the Board

will expire at the end of Metso Outotec’s next Annual General Meeting.

The AGM resolved that the members of the Board of Directors will be paid the same ﬁxed

annual remuneration as in the previous term as follows:

• Chair: EUR 150,000

• Vice Chair: EUR 80,000

• Other members: EUR 65,000 each

and the additional remuneration to be paid for the members of the Board of Directors that

are elected as members of the committees of the Board will be also unchanged as follows:

• EUR 23,000 for the Chair of the Audit Committee

• EUR 10,000 each for the other members of the Audit Committee

• EUR 12,000 for the Chair of the Remuneration and HR Committee

• EUR 5,000 each for the other members of the Remuneration and HR Committee.

As a condition for the annual remuneration, the Board members are obliged, directly based

on the AGM’s decision, to use 20 or 40 percent of their ﬁxed total annual remuneration for

purchasing Metso Outotec shares from the market at a price formed in public trading. These

purchases were carried out on April 27, 2021.

The AGM also resolved to approve the following meeting fees, unchanged from the

previous term: for each Board and committee meeting: a fee of EUR 900 to be paid to the

members residing in the Nordic countries, a fee of EUR 1,800 to be paid to the members

residing in other European countries and a fee of EUR 2,700 to be paid to the members

residing outside Europe. In addition, members of the Board of Directors are to be compen-

sated for direct expenses arising from Board work.

Authorized public accounting ﬁrm Ernst & Young Oy was re-elected as Auditor for a term

ending at the closing of the Annual General Meeting 2022. Ernst & Young Oy has appointed

Mikko Järventausta, APA, as the principally responsible auditor. The remuneration to the Auditor

was decided to be paid against the Auditor’s reasonable invoice approved by the company.

The AGM approved the Board’s proposals, which related to authorizing the Board to

decide on the repurchase of an aggregate maximum of 82,000,000 of Metso Outotec’s own

shares (corresponding to approximately 9.9 percent of all shares) and authorizing the Board to

decide on the issuance of shares and the issuance of special rights entitling to shares.

Metso Outotec Executive Team

Metso Outotec’s Executive Team consists of the following members:

Pekka Vauramo, President and CEO

Eeva Sipilä, CFO, Deputy CEO

Markku Simula, President, Aggregates

Markku Teräsvasara, President, Minerals, Deputy CEO

Jari Ålgars, President, Metals

Sami Takaluoma, President, Services

Heikki Metsälä, President, Consumables

Nina Kiviranta, General Counsel

Piia Karhu, Senior Vice President, Business Development

Carita Himberg, Senior Vice President, Human Resources

Personnel

Metso Outotec had 15,630 employees at the end of December 2021.

Personnel by area

Share, % 

Europe 

North America and Central America 

South America 

Asia Paciﬁc 

Africa and Middle East 

Total 

Financial review 2021|Board of Directors’ report 9

Shares and share trading

The total number of Metso Outotec shares was 828,972,440 and its share capital was EUR

107,186,442.52. Treasury shares totaled 925,021 on December 31, 2021.

Metso Outotec share performance on Nasdaq Helsinki

EUR 

Closing price 

Highest share price 

Lowest share price 

Volume-weighted average trading price 

Other main events in 2021

Conveyance of own shares based on the long-term incentive plans

On February 19, 2021, a total of 68,217 of Metso Outotec’s treasury shares were conveyed

without consideration in accordance with the terms and conditions of the Restricted Share Plan

2018-2020 (RSP 2018–2020) and Matching Share Plan to the President and CEO. The directed

share issue is based on an authorization given by the Annual General Meeting held on March

11, 2020.

Divestment of the Aluminium business

On April 6, 2021, Metso Outotec completed the divestment of its Aluminium business to REEL

International. The divested business comprises equipment and plant solutions to green anode

plants, anode rod shops, and cast houses used in aluminium smelters, as well as the related

services. Metso Outotec will continue to serve its customers in certain other parts of the

aluminium value chain, such as alumina reﬁnery and petroleum coke calcination technologies.

Changes in the Metso Outotec Executive Team

On April 12, 2021, the following changes were made in the Metso Outotec Executive Team

with immediate eect. Markku Teräsvasara was nominated President, Minerals business area,

following the departure of Stephan Kirsch from the company. Markku Teräsvasara served

previously as President, Services business area. He also continues as Deputy CEO of the

company. Sami Takaluoma was nominated as the new President, Services business area. He

was previously President, Consumables business area. Heikki Metsälä was appointed President,

Consumables business area. Previously he served as SVP, Mill & Chute lining business line in

the Consumables business area management team.

Shareholders’ Nomination Board’s proposals regarding the composition and remuneration of

the Board of Directors of Metso Outotec

On November 2, 2021, Metso Outotec’s Shareholders’ Nomination Board published its

proposals to the Annual General Meeting, planned to be held on April 21, 2022. The Nomi-

nation Board proposes that the Board of Directors would have nine members and that Klaus

Cawén, Christer Gardell, Antti Mäkinen, Ian W. Pearce, Emanuela Speranza, Kari Stadigh, and

Arja Talma would be re-elected as Board members.

The Nomination Board will propose that Brian Beamish and Terhi Koipijärvi would be

elected as new Board members.

Furthermore, the Nomination Board will propose that Kari Stadigh would be re-elected

Chair of the Board and Klaus Cawén Vice Chair.

All the Board member candidates have given their consent to be elected and have been

assessed to be independent of the company and its signiﬁcant shareholders, except for Antti

Mäkinen, who has been assessed to be independent of the company but not independent of

its signiﬁcant shareholder.

The Nomination Board will propose ﬁxed annual remuneration to the Board members as

follows (current remuneration in brackets):

• Chair EUR 156,000 (EUR 150,000)

• Vice Chair EUR 82,500 (EUR 80,000)

• Other members EUR 67,000 (EUR 65,000)

An additional remuneration will be proposed to be paid to the Board members that are

elected as members of the Audit & Risk Committee and the Remuneration and HR Committee

as follows (current remuneration in brackets):

• Chair of the Audit & Risk Committee EUR 23,800 (EUR 23,000)

• Members of the Audit & Risk Committee EUR 10,300 (EUR 10,000)

• Chair of the Remuneration and HR Committee EUR 12,400 (EUR 12,000)

• Member of the Remuneration and HR Committee EUR 5,150 (EUR 5,000)

The Nomination Board will propose that, as a condition for the annual remuneration, the

Board members should be obliged, directly based on the Annual General Meeting’s decision,

to use 20% or 40% of their ﬁxed total annual remuneration for purchasing Metso Outotec

shares from the market at a price formed in public trading, and that the purchase will be

carried out within two weeks from the publication of the interim report for January 1 – March

31, 2022.

The Nomination Board will propose the following meeting fees to be paid for attending the

meetings of the Board and its committees:

• EUR 900 for meetings requiring travel within the Nordic countries

• EUR 1,800 for meetings requiring travel within a continent

• EUR 3,000 for meetings requiring intercontinental travel

• EUR 900 for meetings with remote attendance

Financial review 2021|Board of Directors’ report 10

Metso Outotec’s Board of Directors will include all the above-mentioned proposals in the

notice of the Annual General Meeting of 2022.

Metso Outotec’s Shareholders’ Nomination Board consists of:

• Annareetta Lumme-Timonen (Investment Director, Solidium Oy) as Chair

• Niko Pakalén (Partner, Cevian Capital Partners Ltd.)

• Risto Murto (President and CEO, Varma Mutual Pension Insurance Company)

• Mikko Mursula (Deputy CEO, Ilmarinen Mutual Pension Insurance Company)

• Kari Stadigh (Chair of Metso Outotec’s Board of Directors)

The Shareholders’ Nomination Board consists of the representatives of the four largest

registered shareholders of the company based on the ownership situation as of August 15

annually, as well as the Chair of Metso Outotec’s Board of Directors.

Kari Stadigh did not participate in the decision-making concerning the remuneration of the

Board members.

Divestment of the Waste Recycling business

On December 1, 2021, Metso Outotec completed the divestment of its Waste Recycling

business to Ahlström Capital. The Waste Recycling business continues its operations under M&J

Recycling, and its headquarters is in Horsens, Denmark.

Divestment of the Metal Recycling business

On December 31, 2021, Metso Outotec signed an agreement to divest its Metals Recycling

business line to an aliate of Mimir, an investment company based in Stockholm, Sweden. The

closing of the transaction is expected to take place during the ﬁrst half of 2022.

Events after the reporting period

On January 17, 2022, Metso Outotec announced that it will take the next structural development

steps in its business portfolio, following the completed integration of its Minerals business and

the successful turnaround of its Metals business. The company plans to change its business

area structure and related reporting segments by transferring the Hydrometallurgy business

from Metals to Minerals. The objective of the change is to accelerate Metso Outotec’s prof-

itable growth in the minerals processing industry by more eciently leveraging the oppor-

tunities and synergies in the minerals and hydrometallurgical processes. A strategic review

will be conducted in the remaining Metals business area, consisting of the Smelting, Metals

& Chemical Processing and the Ferrous & Heat Transfer business lines, as well as related

aftermarket services. The review will focus on evaluating the best environment for developing

the Metals business and its strategic ﬁt in Metso Outotec’s business portfolio.

Short-term business risks and market uncertainties

The global development of the Covid-19 pandemic continues to pose short-term risks and

uncertainties to Metso Outotec’s markets and operations. While the current Omicron variant

seems to pose less severe health risks possible abrupt measures taken by various national and

local governments to restrict the spread may continue to have an impact on Metso Outotec’s

own and its customers’ operations. This could restrict the ability to provide services at customer

sites and to run manufacturing sites. To protect its personnel, the company may also need

to take abrupt measures that are likely to aect the eciency of its operations and customer

deliveries.

Global supply chains continue to be very tight, which is visible in inﬂation and challenges

in availability of components, and these may further increase and risk the company’s ability

to deliver on-time and on-budget. Recently, the volatile price of energy has emerged as an

additional risk for the company’s cost base. Trade imbalances caused by the pandemic and

port congestion continue to have a negative impact on the availability of containers globally

and risk further aecting the availability and cost of logistics and hence supply chain eciency.

The heightened political tension and risk for further sanctions impacting trade with

Russia may impact project execution and delivery of order backlog to Russia and Russian

counterparties. Taris or other trade barriers could pose challenges to our supply chain and

price management, impacting our capability to secure customer deliveries and margins. There

are also other market and customer-related risks that could cause on-going projects to be

postponed, delayed, or discontinued.

Uncertain market conditions could adversely aect our customers’ payment behavior and

increase the risk of lawsuits, claims, and disputes taken against Metso Outotec in various

countries related to, among other things, Metso Outotec’s products, projects, and other

operations.

Exchange rate ﬂuctuations and changes in commodity prices could aect our orders

received, sales, and ﬁnancial position. Metso Outotec hedges currency exposure linked to ﬁrm

delivery and purchase agreements.

Information security and cyber threats could disturb or disrupt Metso Outotec’s businesses

and operations.

Metso Outotec has identiﬁed a signiﬁcant risk related to its ilmenite smelter project in

Saudi Arabia, in line with earlier disclosures. Provisions have been made against this risk. The

contractual position and other factual circumstances will ultimately determine the eventual

liability and ﬁnancial impact.

Disputes related to project execution and resulting in extra costs and/or penalties are a

risk for Metso Outotec. In the contracts related to the delivery of major projects, the liquidated

damages attributable to, for instance, delayed delivery or non-performance may be signiﬁcant.

Even though provisions are provided for, in accordance with accounting principles, there is no

certainty that additional liabilities would not materialize.

Metso Outotec is involved in a few disputes that may lead to arbitration and court

proceedings. Diering interpretations of international contracts and laws may cause uncer-

tainties in estimating the outcome of these disputes. The enforceability of contracts in certain

market areas may be challenging or dicult to foresee.

Financial review 2021|Board of Directors’ report 11

Market outlook

According to its disclosure policy, Metso Outotec’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.

Metso Outotec expects the market activity to remain at the current strong level, subject to

the development of the Covid-19 pandemic.

Corporate governance statement

Metso Outotec has published a separate Corporate governance statement for 2021 that

complies with the recommendations of the Finnish Corporate Governance Code for listed

companies and covers other central areas of corporate governance. The statement is available

on our website, separately from the Board of Directors’ report.

Financial review 2021|Board of Directors’ report 12

Metso Outotec, headquartered in Finland, has a presence globally in over 50 countries. The

company is a leader in the development of sustainable products, end-to-end solutions and

aftermarket services for the aggregates, minerals processing, and metals reﬁning industries.

Metso Outotec has deﬁned sustainability as a strategic priority, and in particular has committed

to contribute to limiting the global average temperature increase to 1.5 °C through its

sustainability agenda.

Metso Outotec’s sustainability agenda comprises of two focus areas: Sustainable oering

and innovations and being a Responsible and trusted partner. In order to be a trusted

partner, Metso Outotec focuses on the continuous development of Environmental eciency

in operations, People, Health and safety, and Responsible procurement, which in addition to

Sustainable oering and innovations are identiﬁed as the most material sustainability topics.

Metso Outotec reports its economic, social, and environmental performance annually in

accordance with the Global Reporting Initiative (GRI) Standards: Core option.

This statement of non-ﬁnancial information contains a description of Metso Outotec’s

business model as well as risks, key performance indicators and other details related to

Environmental responsibility, Social responsibility and employees, Human rights and Anti-

corruption and bribery as required by the Finnish Accounting Act. This includes an overview of

the targets and key performance indicators for all Metso Outotec’s material topics that steer its

sustainability activities.

Business model and value creation

Metso Outotec’s extensive oering for aggregates, minerals, and metals reﬁning customers,

from equipment to a broad range of services and consumables, helps them maintain and

increase production, improve productivity and lower operating costs and risks. Metso Outotec

continuously develops its oering to meet its customers’ growing needs for energy and

emissions reduction, water resources management, resource eciency, circularity, and safety.

The basis for creating value are Metso Outotec’s established manufacturing and operations

footprint and product oering, as well as its ability to continuously innovate. Innovation is

driven by the deep know-how of Metso Outotec’s 15,630 employees, and several locations

with research and development capabilities, as demonstrated by 6,810 national technology

patents. Long-term customer and supplier relationships are also essential for creating value for

stakeholders. In 2021, Metso Outotec paid EUR 166 million in dividends.

Metso Outotec generates employment and wealth in local communities as an employer

and a buyer of goods and services. The company also contributes to local communities

through cooperation with universities and other research institutes. In 2021 Metso Outotec paid

EUR 64 million in taxes.

Risks, risk management system and policies

The non-ﬁnancial risks in this statement have been identiﬁed in accordance with the Finnish

Accounting Act, separately from the ﬁnancial risks identiﬁed in the ﬁnancial review on page 63.

The principal risks related to Metso Outotec’s sustainability performance are associated with

health and safety, product quality, environment, compliance, brand and reputation, as well as

human and labor rights, especially in the supply chain.

Climate change aects many aspects of Metso Outotec’s business. The company therefore

regularly analyses climate change-related risks and opportunities and their potential impact

on the business. Among the signiﬁcant opportunities and risks identiﬁed for Metso Outotec

are the ability to create environmentally ecient and safe products to meet future customer

needs and the ability to operate in a changing business and natural environment. Additionally,

environmental legislation, customer energy supply, the global regulatory environment, and

political and social unrest are factors that are considered. As part of the sustainability content

presented in the Business overview, Metso Outotec reports on transitional and physical risks as

well as opportunities caused by climate change, in accordance with the recommendations of

the Task Force on Climate-Related Financial Disclosures (TCFD).

Operating in a sustainable way throughout the value chain is a high priority for Metso

Outotec, as environmental, social or governance misconduct can aect the company’s

reputation and have long-term ﬁnancial and other consequences, including business

interruptions and lost work hours.

The Board of Directors oversees the appropriate governance of the overall enterprise risk

management. Under the direction of the Board, Metso Outotec takes a systematic approach

to managing non-ﬁnancial matters, including implementing appropriate policies, due diligence

processes, governance and organization.

Metso Outotec’s Code of Conduct, approved by the Board of Directors, sets out the

company’s expectations for business conduct. The Code of Conduct, Supplier Code of

Conduct, HR policies and Donation & Sponsorship Policy, as well as Quality and Environment,

Health and Safety (EHS) Policies, all deﬁne the basic requirements for achieving Metso

Outotec’s environmental, social and economic responsibility.

Internal control practices are aligned with Metso Outotec’s risk management process

as approved by the Board of Directors. An audit framework is in place to support risk

management by ensuring compliance and continuous business development.

Metso Outotec’s integrated management system complies with the requirements of inter-

national standards for management systems. The majority of Metso Outotec’s major units are

certiﬁed to ISO9001 (quality), and the main operational units also have ISO14001 (environment),

ISO45001 or OHSAS18001 (safety) standards as a framework.

Statement of non-financial information

Financial review 2021|Board of Directors’ report 13

Environmental responsibility

Across Metso Outotec’s value chain, ensuring the safety of our equipment, quality in the supply

chain, and minimizing the environmental impact of our own operations are critical. Metso

Outotec continuously develops its product oering and the management of its supply chain

to address these matters. Suppliers are regularly trained and audited. Furthermore, Metso

Outotec oers training and other services to customers to help them ensure safe and ecient

operations.

Metso Outotec’s most signiﬁcant environmental impacts are through the use of its products

and processes delivered to customers. As presented in more detail below, Metso Outotec’s

sustainable product oering, and innovations are an important element in managing environ-

mental impacts.

Sustainable oering and innovations

Metso Outotec’s products, processes and services are designed to help customers operate

safely, achieve higher productivity, and reduce their resource intensity. The mining and

aggregates industries face increasing demands to reduce the use of energy and water

resources, reduce dust and noise, as well as generally more stringent environmental legislation.

Developing innovative solutions that are more energy ecient is one of the key priorities for

the mining industry where the comminution process, including crushing and grinding, is the

most energy-intensive stage of minerals production. Given the decreasing grade of orebodies,

which requires even more processing to achieve the same volume of ore, improving eciency

is key. Improvements in comminution eciency can therefore result in signiﬁcant energy

savings, reduce plant operating costs, increase resource eciency, and reduce greenhouse

gas emissions.

Key for Metso Outotec is to support customers’ long-term success by oering energy

saving, electric equipment, water eciency processes and equipment, as well as circular and

safety solutions. Metso Outotec oers solutions that consume less energy and water when

compared to conventional solutions by increasing process eciency, recycling and the

reprocessing of tailings and waste over the life cycle of the customers’ process. The minerals

industry oering is mainly electric, allowing customers to choose renewable energy sources.

Our oering in aggregates is around 50% electric and also includes dual power source

products.

Metso Outotec’s Planet Positive oering, launched in 2021, is central to Metso Outotec’s

sustainability agenda and 1.5 °C journey. Metso Outotec’s Planet Positive portfolio includes

solutions that oer signiﬁcant improvements in reducing energy and carbon intensity, water

use, pollution and embedded carbon compared to the industry baseline or alternative

technology. Metso Outotec started measuring its Planet Positive sales for capital equipment

and consumables in 2021. The Planet Positive sales in 2021 were EUR 592 million

, which

Planet positive sales in the Service business are under review and Metso Outotec expects to report this in 2022.

represents 20% of capital equipment and consumables’ total sales. Metso Outotec aims to

grow its Planet Positive sales over 10% annually. In the longer term, Metso Outotec aims to

have a Planet Positive product in every part of the customer value chain where Metso Outotec

operates. To achieve this, Metso Outotec aims to have 100% of R&D projects’ spend on

projects with annual energy eciency, emissions, circularity, water, or safety target.

To illustrate the potential impact of the Planet Positive portfolio, Metso Outotec calculates

the amount of CO emissions avoided annually by using twenty technologies compared

to industry baselines or alternative technology. These technologies are included in Metso

Outotec’s CO handprint, which demonstrates how the company can help reduce the global

mining industry’s CO and other emissions by delivering technically more advanced solutions.

In 2021, Metso Outotec’s CO handprint was 10.3million tonnes less of CO equivalents across

twenty technology areas.

EU Taxonomy

The EU Taxonomy is a classiﬁcation system that translates the EU’s climate and environmental

objectives into criteria for assessing economic activities for investment purposes. Large

ﬁnancial and non-ﬁnancial companies that fall under the scope of the Non-Financial Reporting

Directive have to disclose to what extent their activities meet the criteria set out in the EU

Taxonomy.

The EU Taxonomy includes six environmental objectives: climate change mitigation, climate

change adaptation, sustainable use and protection of water and marine resources, transition

to a circular economy, pollution prevention and control, and protection and restoration of

biodiversity and ecosystems. Economic activities that make a substantial contribution to at least

one of the Taxonomy’s environmental objectives are recognized as green, or ’environmentally

sustainable’, as long as they do not signiﬁcantly harm any of the other environmental objec-

tives and they meet minimum social safeguards.

In June 2021, the criteria that deﬁne which activities substantially contribute to the ﬁrst

two (out of the six) environmental objectives, climate change mitigation and climate change

adaptation, were published. The criteria for the remaining four environmental objectives are

yet to be established. For the 2021 reporting period, the share of taxonomy-eligible activities

(revenue, capex and opex) and qualitative information have to be disclosed.

Metso Outotec has assessed which of its activities are included in the EU Taxonomy and

have the potential to contribute to either the climate change mitigation or climate change

adaptation objective. Metso Outotec, as a technology company serving the aggregates,

minerals processing and metals reﬁning industries, aims to support customers’ energy

transition towards net zero and decarbonization of the industries. Metso Outotec’s products

mainly fall under the Taxonomy activity ’3.6 Manufacture of other low carbon technologies’.

However, some services provided by Metso Outotec, whilst enabling process optimizations and

lifetime extensions through modernizations and upgrades, fall outside the scope of activities

included in the EU Taxonomy and are therefore classiﬁed as non-eligible. When Metso Outotec

Financial review 2021|Board of Directors’ report 14

sells parts purchased from a subcontractor without altering or modifying them in any way or

without owning the design of those parts, the parts also fall outside of the scope of the EU

Taxonomy. In 2021, 87% of Metso Outotec’s products and services in terms of revenue were

assessed as taxonomy-eligible activities under the EU Taxonomy.

Metso Outotec Taxonomy eligibility for the climate change mitigation objective of the EU

Taxonomy in 2021

KPI Total EUR million



Proportion of Taxonomy

eligible economic

activities %

Proportion of Taxonomy

noneligible economic

activities %

Sales  





Capital expenditure  





Operating expenditure  





Figures reported are in line with Metso Outotec’s consolidated ﬁnancial statements 2021 and have been prepared in

accordance with International Financial Reporting Standards.

Includes products where Metso Outotec owns the design of the products, although the product might be

manufactured by a subcontractor.

Capital expenditure (capex) includes investment in intangible assets and property, plant and equipment (EUR 91

million), as well as in right-of-use assets (EUR 38 million) less non-operative investments (EUR 24 million), which

are mainly related to oce buildings and company cars. For eligibility assessment the capital expenditure of each

Business Area is allocated according to the eligible % sales of that Business Area.

Operating expenditure (opex) is deﬁned as expenses related to research and development, short-term and

low-value leases as well as to expenses related to buildings, vehicles, machinery and equipment, which are included

in Cost of Goods Sold. For eligibility assessment the operating expenditure of each Business Area is allocated

according to the eligible % sales of that Business Area.

Many of Metso Outotec’s products have the potential to substantially contribute to the climate

change mitigation objective of the EU taxonomy. These products, which are included in the

Planet Positive portfolio, are considered to be enabling activities as they enable GHG emission

reductions in other sectors of the economy (mining sector). The next step in 2022 is to assess

whether Metso Outotec’s eligible products meet the taxonomy criteria regarding ’substantial

contribution’, the ’do no signiﬁcant harm’ (DNSH), and minimum social safeguards.

Environmental eciency in operations

The combined CO emissions of Metso Outotec’s footprint, including own operations, logistics,

and suppliers was 672,216 tCO tonnes in 2021.

Metso Outotec continuously aims to reduce the impacts of its operations and has set

science-based CO emission reduction targets. This includes aiming to halve the emissions

of its own production by 2030, reduce emissions from logistics by 20% by 2025, increase

emissions avoided by customers using its products by 20% by 2025 and work with suppliers

and encourage them to set their own science-based CO emission targets. The Science Based

Targets Initiative has validated Metso Outotec’s climate targets. In 2021 Metso Outotec further

strengthened its commitment by setting a new net zero target, aiming to reach net zero CO

emissions by 2030 and reducing its CO emissions by 50% by 2024 in its own operations.

Social responsibility and employees

Metso Outotec’s Code of Conduct is the cornerstone of how it conducts business. It deﬁnes

the basic principles of behavior of all Metso Outotec employees. Fair and equal treatment

towards every person in the company is expected from all employees. The Code also extends

to contractors, vendors, customers, and Metso Outotec´s other business partners.

Metso Outotec recognizes that a diverse workforce is a strength, which also impacts

business results and aims to create and sustain a work environment that values diversity and

provides equal opportunities. Metso Outotec has an Equal Opportunity and Diversity Policy

that extends the general principles of Metso Outotec’s Code of Conduct. The underlying

principle of this policy is Metso Outotec’s commitment to promoting equal opportunities and

fair treatment for all employees regardless of gender, age, race, religion or beliefs, ethnic or

national origins, marital/civil partnership status, sexual orientation or disability. Employees are

selected based on merit and experience.

Eorts to harmonize employment practices in all Metso Outotec locations to ensure equal

treatment of all employees in each country continued in 2021.

During 2021, Covid-19 impacted the ways of working, with the majority of white-collar

workers working from home. The pandemic aected the well-being of employees, which was

also visible in the employee engagement survey. Metso Outotec has put a lot of eort into

solving those issues, mainly through actions taken at individual sites to deal with the speciﬁc

challenges in each location.

Metso Outotec has started preparations for a post-pandemic world, and a global working

arrangement guideline was approved to instruct the preparation of local guidelines in each

country. The guideline states that a hybrid work model that suits each team’s work, achieve the

objectives, and balance work-life wellbeing, is the preferred approach at Metso Outotec.

People

Culture building was a priority for Metso Outotec in 2021, and Performance Culture was

deﬁned as one of the four Tier-1 priorities for Metso Outotec’s new strategy period.

Driving Metso Outotec towards achieving its ambition to be a Tier-1 company means

building a strong culture deﬁned by high performance, employee engagement, values that

guide behavior and ways of working, strong leadership, as well as attracting, developing, and

retaining top talent.

In 2021, the Metso Outotec Leadership Principles were launched. The Leadership Principles

are guidelines for creating an inclusive environment where everyone can do their best and

reach their full potential. The principles were introduced to managers as part of the Metso

Outotec strategy communication, online training was provided, and team discussions were

Financial review 2021|Board of Directors’ report 15

organized. Implementation of leadership development programs has started globally and

regionally.

Metso Outotec is committed to developing a workplace where diversity and inclusion

are embedded in the culture, fostered and promoted. This commitment was shared with

employees, and in 2021 training sessions were organized, both globally and locally, to

raise awareness of diversity, inclusion, and psychological safety. Going forward, there will

be emphasis on increasing diversity across the business, removing barriers and bias from

processes, and further building psychological safety in the organization.

In 2021, Metso Outotec conducted four engagement surveys: two full surveys for all

employees, and two shorter pulse surveys for white-collar workers. The Employee Net Promoter

Score (eNPS) is one of the key indicators used to track employee engagement and the result

in December 2021 was 37, which is in the top 25% industry benchmark. Metso Outotec also

started following the Inclusion score with a target to be among the top 10% of the industry

benchmark by the end of 2024; it achieved middle range in December 2021.

Health and safety

Metso Outotec continuously and actively mitigates the occupational health and safety risks

in its operations - Metso Outotec targets zero harm. The most common risks in operations

are related to lifting, working at heights, machinery, hot work, and road travel. These risks

are mitigated through a variety of means, including safety equipment and tools, working

procedures, continuous training, and leadership involvement.

Metso Outotec has an uncompromising approach to health and safety for all employees,

partners, customers and other stakeholders and it has ambitious targets to ensure a safe

workplace. To enable the achievement of these targets, Metso Outotec implemented 20 health

and safety directives that are built on the Modus Operandi behavior program, implemented a

hand safety program called LEGIT, further integrated contractor safety to align all contractors

with the Metso Outotec way of working, and commenced a safety leadership program.

Despite these best eorts, a fatal incident took place at a customer site in the Netherlands

in 2021. Everyone in Metso Outotec was deeply saddened by this tragic accident, and Metso

Outotec has thoroughly investigated the root causes and is implementing ﬁndings to minimize

the chances of incidents like this taking place.

2021 continued to pose challenges, as the COVID-19 pandemic prevailed globally.

Throughout the pandemic Metso Outotec’s ﬁrst priority has been ensuring the health and

safety of its employees, customers, and partners by doing its best to control the virus from

spreading. The company had to adapt to changes quickly and to support its employees in

staying safe by either working remotely or by introducing additional safety procedures at sites.

Employee safety, risk observations, safety conversations and safety training hours are

continuously measured. Metso Outotec’s key indicators for safety are lost-time injuries per

million working hours (LTIFR), which was 1.1 in 2021, and total recordable injury frequency rate

(TRIFR), which was 3.1 in 2021. The scope of LTIFR and TRIFR reporting covers Metso Outotec’s

premises, employees and contractors working under Metso Outotec’s direct supervision, as

well as project sites. All serious accidents are reviewed by the top management to ensure

proper investigations and corrective actions. All employees and contractors not only have the

right but also the obligation to refuse and report any unsafe work.

Another important safety priority is making sure that products and services are safe to

use and maintain; thus, the safety of services is considered in the early phase of product

development. The Product Compliance Management process ensures that products designed

and supplied by Metso Outotec worldwide meet all applicable safety requirements during the

product life cycle.

Metso Outotec manages incidents, hazards and development initiatives through its QEHS

management and product compliance management systems, as well as through customer

feedback collected after each major delivery and through customer surveys.

Human rights

Metso Outotec respects human rights and is committed to the United Nations (UN) Guiding

Principles on Business and Human Rights. Metso Outotec is also committed to the UN Global

Compact Initiative and its principles, as well as to the principles of the Universal Declaration

of Human Rights, and the International Labor Organization’s Declaration of Fundamental

Principles and Rights at Work. These commitments are incorporated in Metso Outotec’s Code

of Conduct and Supplier Code of Conduct, and in the HR, Quality and EHS policies. In

addition, the Metso Outotec Modern Slavery and Human Tracking Statement sets out the

practices and actions to mitigate any risk of modern slavery or human tracking in Metso

Outotec’s own business and in its supply chain. Any form of compulsory, forced, or child labor

is unacceptable.

All employees are entitled to be treated with respect, and we have zero tolerance

for discrimination, harassment, or illegal threats. Applicable national laws and regulations

regarding working hours and employee compensation are respected. Metso Outotec requires

that suppliers, business partners, and other stakeholders also follow similar standards. A range

of internal controls are in place, such as an anonymous whistleblower channel that is available

to employees and external parties.

Human rights-related topics, including safety and labor rights, are reviewed regularly in

Metso Outotec’s own operations and in its supply chain.

Responsible procurement

Due to the cyclical nature of Metso Outotec’s customer industries, Metso Outotec outsources

a signiﬁcant proportion of its manufacturing. Metso Outotec expects its suppliers to follow the

Supplier Code of Conduct, which is based on Metso Outotec’s Code of Conduct, as well as

established international best practices.

Risk mapping within the existing supplier base enables a focus on the suppliers with the

highest potential risks in their operations. Supplier sustainability audits are conducted in higher

Financial review 2021|Board of Directors’ report 16

risk countries. Based on supplier assessments for existing and new suppliers, the need for

third-party or internal supplier sustainability audits as well as any further actions are deﬁned.

New supplier assessments form part of Metso Outotec’s procurement function’s ongoing

processes, the aim is to evaluate all new direct suppliers in high-risk countries against Metso

Outotec’s sustainability criteria.

Human and labor rights, environmental and safety practices, compliance with laws and

regulations, and anti-bribery are covered by third-party supplier audits, supplier self-as-

sessments as well as Metso Outotec’s internal supplier sustainability audits. Key supplier

requirements are also incorporated into contract obligations, and a contract breach can lead

to consequences, including termination of a supplier relationship.

After an audit has been performed, corrective action plans are agreed upon and suppliers

are asked to provide Metso Outotec with evidence that these actions have been implemented

and they are subject to possible re-audits. In 2021, 152 supplier sustainability audits were

conducted that included human rights topics. In addition, an e-learning course about human

rights was launched that informs suppliers about human rights-related topics and their impor-

tance in conducting business with Metso Outotec. One key action in 2021 was engaging with

suppliers with regard to setting a science-based target (SBT) for CO emissions reductions. 10.1

percent of the procurement spend in 2021 was with suppliers that have set SBTs.

Processes are in place to continuously develop a shared understanding with suppliers in the

areas of innovation, cost eciency, quality, and sustainability in order to manage risks related

to outsourcing.

Anti-corruption and bribery

Metso Outotec endorses responsible business practices and complies with national and

international laws and regulations. The company has zero tolerance for corruption. Metso

Outotec works against corruption in all its forms and requires its suppliers and business

partners to follow the same principles and to fully comply with all applicable anti-corruption

laws. Metso Outotec’s Code of Conduct, Supplier Code of Conduct, and Anti-Corruption Policy

are the key policies that deﬁne the anti-corruption measures required from Metso Outotec’s

employees, customers, agents, suppliers, distributors, and other business partners.

To mitigate risks and to ensure compliance with the company’s Code of Conduct, a training

program was launched in late 2021. Going forward employees will be required to complete

similar training every year. 96.9% of Metso Outotec employees completed the training by the

end of 2021. The Code of Conduct training is also a part of the induction program for new

employees.

Metso Outotec conducts compliance checks on customers, suppliers, and other business

partners through third-party screening tools, data portals that are linked to Metso Outotec’s

customer relationship management systems, and supplier data management systems. All sales

agents are further required to conﬁrm their compliance with the company’s Code of Conduct

requirements.

All Metso Outotec employees have a responsibility for ensuring compliance with anti-cor-

ruption and anti-bribery measures. A range of internal controls are in place, and employees

are strongly encouraged to report any suspected wrongdoing or misconduct to their super-

visors, to management, or to Compliance or Internal Audit, e.g. using Metso Outotec’s internally

and externally available whistleblower channel. All reports are treated as conﬁdential and

anonymous, and Metso Outotec commits to ensuring that there are no negative repercussions

for the reporting person.

The VP, Compliance and Risk Management regularly reports on compliance cases and

actions taken to the Audit and Risk Committee of Metso Outotec’s Board of Directors.

Financial review 2021|Board of Directors’ report 17

Key non-ﬁnancial performance indicators

Non-ﬁnancial topic Target for 2021 Key performance indicators 2021 2020

Environmental responsibility

CO emissions: Production (scope 1 & 2

(market based)

Decrease CO emissions by 8% compared to 2019 baseline CO emission of own production 52,216 tCO (58%

compared to 2019)

44,913 tCO

CO emissions: Logistics Decrease CO emissions by 20% compared to 2019 baseline CO emissions from logistics 97,000 tCO (18%

compared to 2019)

86,000 tCO

Suppliers with CO targets 7% of procurement by spend is with suppliers that have an

SBT CO emission target

% of suppliers with an SBT target 10.1% 2.5%

Total footprint – CO emissions See targets above for production, logistics, and suppliers CO emissions of production, logistics and purchased

goods and services

672,216 tCO 492,913 tCO

Planet Positive portfolio Grow our Planet Positive sales over 10% annually Planet Positive sales (MEUR) (including capital equipment

and consumables’ sales)

EUR 592 million New target

Social responsibility and employees

Health and safety Continuous improvement in lost-time injuries frequency rate Lost-time injuries per million work hours (LTIFR)

1.1 1.4

Continuous improvement in total recordable injury

frequency rate

Total recordable injury frequency per million hours worked

(TRIFR)

3.1 3.7

People Employee Net Promoter Score (eNPS) to be in top 10% of

the industry benchmark

eNPS benchmark score range % Top 25 Top 25

Human rights

Responsible procurement 100 supplier sustainability audits per year conducted in

higher-risk areas

Number of supplier sustainability audits conducted 152 142

Anti-corruption and bribery

Code of Conduct training All active employees, including blue-collar workers, trained

on Code of Conduct, external workforce excluded

Code of Conduct training participation rate (%) 96.9% 96.1%

Includes employees and contractors.

Further information

In addition, as required by the Finnish Accounting Act and set forth in EU Directive 2014/95/

EU (rules on disclosure of non-ﬁnancial and diversity information by large companies),

information related to non-ﬁnancial matters is also available at:

• Business overview 2021, Metso Outotec’s strategy and business model

• Business overview 2021, Metso Outotec’s value creation model

• Corporate governance 2021, Risk management at Metso Outotec

• Corporate governance 2021, Metso Outotec’s risk map

Financial review 2021|Board of Directors’ report 18

Metso Outotec has one share series, and each share entitles

its holder to one vote at a General Meeting and to an equal

amount of dividend. Metso Outotec’s shares are registered in

the Finnish book-entry system maintained by Euroclear.

Basic share information

Listed on Nasdaq Helsinki

Trading code MOCORP

ISIN code FI0009014575

Industry Industrials

Number of shares on December 31, 2021 828,972,440

Share capital on December 31, 2021 EUR 107,186,442.52

Market value on December 31, 2021 EUR 7,751 million

Listing date July 1, 2020

Metso shares are also traded on alternative marketplaces like

BATS CXE and BATS BXE.

Metso Outotec’s share and shareholders in 2021

On December 31, 2021, Metso Outotec’s share capital was

EUR 107,186,442.52 and the total number of shares was

828,972,440. More information on the past share capital

changes is available on the Metso Outotec website.

At the end of 2021, Metso had approximately 83,875

shareholders in the book-entry system. The largest share-

holder was Solidium with 123,477,168 shares, equaling 14.9

percent of the Company’s shares. A total of 456,105,740 Metso

Outotec shares were traded on the Nasdaq Helsinki during

2021, equivalent to a turnover of EUR 7,751 million.

At the year-end, the members of Metso Outotec’s Board

of Directors and President and CEO Pekka Vauramo held

a total of 293,143 Metso Outotec shares, corresponding to

0.04 percent of the total number of shares and votes. More

information about management holdings is available in note

1.5.

Shares and shareholders

Share key ﬁgures

 

Share capital, at the end of year, EUR million  

Number of shares, at the end of year

Number of outstanding shares  

Own shares held by the Parent company  

Total number of shares  

Average number of outstanding shares  

Average number of diluted shares  

Earnings / share, basic, EUR  

Earnings / share, diluted, EUR  

Earnings / share, basic, based on outstanding shares on Dec 31, 2020, EUR 

Net cash ﬂow from operating activities / share, EUR  

Dividend/share

, EUR  

Dividend / share

, EUR  

Dividend / earnings

, %  

Eective dividend yield

, %  

P/E ratio

 

Equity / share

, EUR  

The amounts for year 2021 are Board of Directors’ proposal to the AGM.

Comparison year is calculated based on the number of outstanding shares.

Financial review 2021|Board of Directors’ report 19

Share performance and trading on Nasdaq Helsinki





Closing price, December 31, EUR  

Market capitalization, December 31, EUR million  

Trading volume, NASDAQ OMX Helsinki Ltd, shares  

% of shares

% %

Trading volume, NASDAQ OMX Helsinki Ltd, EUR million  

Average daily trading volume, pieces  

Relative turnover, % % %

Share performance, % % %

Highest share price, EUR  

Lowest share price, EUR  

Average share price, EUR  

Of the total amount of shares for public trading.

Largest shareholders on December 31, 2021

Owner Shares and votes

% of total shares and

voting rights

1 Solidium Oy  

2 Varma Mutual Pension Insurance Company  

3 Ilmarinen Mutual Pension Insurance Company  

4 Elo Mutual Pension Insurance Company  

5 Nordea Funds  

Nordea Pro Finland Fund  

Nordea Fennia Fund  

Nordea Finnish Index Fund  

Nordea Life Assurance Finland Ltd.  

Nordea Bank ABP  

Sijoitusrahasto Nordea Premium Varainhoito Maltti  

Sijoitusrahasto Nordea Premium Varainhoito Tasapaino  

Nordea Säästö 50  

Sijoitusrahasto Nordea Säästö 25  

Nordea Säästö 75  

6 OP-Finland Funds  

OP Life Assurance Company Ltd  

OP-Finland Fund  

OP-Finland Index Fund  

7 The State Pension Fund  

8 Aktia Funds  

Sijoitusrahasto Aktia Capital  

Aktia Secura Fund  

Sijoitusrahasto Aktia Nordic Small Cap  

Investment fund Aktia Nordic  

Aktia Euro Fund  

9 Mandatum Life Insurance Company Limited  

10 Svenska litteratursällskapet i Finland r.f.  

11 Veritas Pension Insurance Company Ltd.  

12 Sigrid Jusélius Foundation  

13 Danske Invest Finnish Equity Fund  

14 Säästöpankki Kotimaa  

15 Oy Etra Invest Ab  

16 The Finnish Cultural Foundation  

17 The Social Insurance Institution of Finland, KELA  

18 OMX Helsinki 25 Exchange Traded Fund  

19 Evli Finland Select Fund  

20 Samfundet folkhälsan i Svenska Finland rf  

20 largest owner groups in total  

Nominee-registered holders  

Other shareholders  

In the joint book-entry account  

Total

 

Financial review 2021|Board of Directors’ report 20

Breakdown of share ownership on December 31, 2021

Number of shares Shareholders

% of

shareholders

Total number

of shares and

votes

% of total

shares and

voting rights

1–100    

101–1,000    

1,001–10,000    

10,001–100,000    

100,001–1,000,000    

1,000,001 and above    

Tota l    

Nominee-registered shares    

In the joint book-entry account    

Number of shares issued  

Breakdown by shareholder category on December 31, 2021

Share, %  

Nominee-registered and non-Finnish holders % %

Solidium Oy % %

Private investors % %

Finnish institutions, companies, and foundations % %

Total

%

Flaggings

Under the provisions of the Finnish Securities Markets Act, shareholders of listed companies

have an obligation to notify both the Finnish Financial Supervision Authority and the company

of changes when their holdings reach, exceed or fall below a certain threshold. Metso Outotec

is not aware of any shareholders’ agreements regarding Metso Outotec shares or voting rights.

All ﬂagging notiﬁcations have been released as a stock exchange release are available on the

Metso Outotec website.

Incentive plans

Metso Outotec’s share ownership plans are part of the management remuneration program.

For further information, see on the Metso Outotec website and notes 1.5 and 1.6. Any shares to

be potentially rewarded are acquired through public trading, and therefore the incentive plans

have no diluting eect on the share value.

Financial review 2021|Board of Directors’ report 21

    

Sales     

Operating proﬁt (EBIT)     

% of sales % % % % %

Proﬁt before taxes     

% of sales % % % % %

Proﬁt for the period for continuing operations     

% of sales % % % % %

Proﬁt for the period for discontinued operations     

Proﬁt for the period     

% of sales % % % % %

Proﬁt attributable to shareholders of the company     

Amortization of intangible assets     

Depreciation of tangible assets     

Depreciations of right-of-use assets     

Depreciation and amortization, total     

% of sales % % % % %

EBITA     

% of sales % % % % %

EBITDA     

% of sales % % % % %

Finance income and expenses, net     

% of sales % % % % %

Interest expenses     

% of sales % % % % %

Interest cover (EBITDA) × × ×

Gross capital expenditure   

% of sales % % %

Net capital expenditure   

% of sales % % %

Net cash ﬂow from operating activities before

ﬁnancial items and taxes     

Cash conversion, % % % %

Research and development   

% of sales % % %

Key figures

    

Balance sheet total     

Equity attributable to shareholders     

Total equity     

Interest bearing liabilities     

Net working capital (NWC)     

% of sales % % % % %

Capital employed     

Return on equity (ROE), % % % % % %

Return on capital employed (ROCE) before taxes, % % % % % %

Return on capital employed (ROCE) after taxes, % % % % % %

Net debt     

Gearing, % % % % % %

Equity to asset ratio, % %  % % %

Debt to capital, % % % % % %

Debt to equity, % % % % % %

Orders received     

Order backlog, December 31     

Personnel at end of year     

Key ﬁgures for 2021 and 2020 are calculated based on IFRS data. All comparable key ﬁgures

are based on Metso Minerals carve-out data.

Balance sheet for 2020 has been restated due to adjustments in the fair values of Outotec

at the acquisition date. The adjustments have an eect to goodwill, non-current deferred tax

assets and liabilities, income tax liabilities, other current liabilities and liabilities held for sale.

Financial review 2021|Board of Directors’ report 22

Earnings before ﬁnancial expenses, net, taxes and amortization, adjusted (adjusted EBITA)

Operating proﬁt + adjustment items + amortization

Earnings per share, basic

Proﬁt attributable to shareholders

Average number of outstanding shares during the period

Earnings per share, diluted

Proﬁt attributable to shareholders

Average number of diluted shares during the period

Interest cover (EBITDA)

EBITDA

Finance income and expenses, net

Cash conversion, %

Net cash ﬂow from operating activities before ﬁnancial

× 100

EBITDA

Return on equity (ROE), %

Proﬁt for the period

× 100

Total equity (average for the period)

Return on capital employed (ROCE) before taxes, %

Proﬁt before tax + ﬁnancial expenses

× 100

Capital employed (average for the period)

Return on capital employed (ROCE) after taxes, %

Proﬁt for the period + ﬁnancial expenses

× 100

Capital employed (average for the period)

Gearing, %

Net interest-bearing liabilities

× 100

Total equity

Equity-to-assets ratio, %

Total equity

× 100

Balance sheet total – advances received

Debt to capital, %

Interest-bearing liabilities – lease liabilities

× 100

Total equity + interest-bearing liabilities – lease liabilities

Debt to equity, %

Interest-bearing liabilities – lease liabilities

× 100

Total equity

Interest-bearing liabilities

Interest-bearing liabilities, non-current and current + lease liabilities, non-current and current

Net interest-bearing liabilities

Interest-bearing liabilities – Non-current ﬁnancial assets – loan and other interest-bearing

receivables (current and non-current) – liquid funds

Net working capital (NWC)

Inventories + trade receivables + other non-interest-bearing receivables + customer contract

assets and liabilities, net – trade payables – advances received – other non-interest-bearing

liabilities

Capital employed

Net working capital + intangible assets and tangible assets + right-of-use assets + non-current

investments + interest-bearing receivables + liquid funds + tax receivables, net + interest

payables, net

Net cash ﬂow from operating activities / share, EUR

Net cash ﬂow from operating activities

Outstanding shares at end of period

Eective dividend yield, %

Dividend per share

× 100

Trading price at the end of the year

Price / earnings ratio (P/E)

Trading price at the end of the year

Earnings per share

Equity/share

Equity attributable to shareholders

Number of outstanding shares at the end of the period

Formulas for the key figures

Financial review 2021|Board of Directors’ report 23

On December 31, 2021, the distributable equity of Metso Outotec Corporation was:

Invested non-restricted equity fund EUR 

Own shares EUR 

Retained earnings EUR 

Net proﬁt for the year EUR 

Distributable equity, total EUR 

The Board of Directors proposes that a dividend of EUR 0.24 per share be paid based on the

balance sheet to be adopted for the ﬁnancial year, which ended December 31, 2021. Insofar

as the dividend to be paid exceeds the net proﬁt for the year ended December 31, 2021, the

remaining amount will be paid from retained earnings from previous years.

Dividend payment EUR 

Distributable equity after dividend payment EUR 

These ﬁnancial statements were authorized for issue by the Board of Directors on February 9,

2022, after which, in accordance with Finnish Company Law, the ﬁnancial statements are either

approved, amended, or rejected in the Annual General Meeting.

Board of Directors’ proposal on the use of profit

Financial review 2021|Board of Directors’ report 24

Consolidated financial statements, IFRS

Consolidated statementof income

EUR million Note  

Sales   4,236 3,319

Cost of sales   -3,058 -2,429

Gross proﬁt

1,178

889

Selling and marketing expenses    -348 -283

Administrative expenses    -321 -303

Research and development expenses    -66 -53

Other operating income and expenses, net  -18 -10

Share of results of associated companies  -1 0

Operating proﬁt

425

239

Finance income  4 5

Foreign exchange gains/losses  -4 0

Finance expenses  -40 -44

Finance income and expenses, net

-39

-38

Proﬁt before taxes

385

201

Income taxes  -92 -52

Proﬁt for the year for continuing operations

294

149

Proﬁt from discontinued operations  48 -11

Proﬁt for the year

342

138

Proﬁt attributable to

Shareholders of the Parent company 342 138

Non-controlling interests 0 0

Proﬁt from continuing operations attributable to

Shareholders of the Parent company 294 149

Non-controlling interests 0 0

Earnings per share, EUR

 0.41 0.19

Earnings per share for continuing operations EUR

 0.35 0.20

More information under Key ﬁgures

Consolidated statement of comprehensive income

EUR million Note  

Proﬁt for the year 342 138

Other comprehensive income

Cash ﬂow hedges, net of tax    -13 9

Currency translation on subsidiary net investment   46 -58

Items that may be reclassiﬁed to proﬁt or loss in

subsequent periods

-49

Deﬁned beneﬁt plan actuarial gains and losses, net

of tax   5 -6

Items that will not be reclassiﬁed to proﬁt or loss

-6

Other comprehensive income total

-56

Total comprehensive income

380

Attributable to

Shareholders of Parent company 380 83

Non-controlling interests 0 0

The IFRS-based comparison period January–June 2020 includes only Metso Minerals carve-out

data, and the comparison period July–December includes Metso Outotec Group ﬁnancial data.

Financial review 2021|Consolidated ﬁnancial statements 25

Consolidated balance sheet

EUR million Note  Restated 

Non-current assets

Intangible assets  

Goodwill 1,124 1,118

Other intangible assets 878 942

Total intangible assets

2,002

2,060

Property, plant, and equipment  

Land and water areas 35 42

Buildings and structures 121 116

Machinery and equipment 174 157

Assets under construction 43 41

Total property, plant, and equipment

373

356

Right-of-use assets   127 132

Other non-current assets

Investments in associated companies  7 10

Non-current ﬁnancial assets  4 4

Loan receivables  6 6

Derivative ﬁnancial instruments  2 3

Deferred tax assets  178 149

Other non-current receivables   38 43

Total other non-current assets

234

215

Total non-current assets

2,737

2,764

Current assets

Inventories  1,269 1,038

Trade receivables  668 556

Customer contract assets  324 298

Loan receivables  3 2

Derivative ﬁnancial instruments  46 43

Income tax receivables  36 36

Other current receivables  210 147

Liquid funds  473 537

Total current assets

3,028

2,658

Assets held for sale  65 145

TOTAL ASSETS

5,830

5,567

EUR million Note  Restated 

Equity 

Share capital 107 107

Share premium fund 20 20

Cumulative translation adjustments -164 -210

Fair value and other reserves 1,130 1,136

Retained earnings 1,156 983

Equity attributable to shareholders

2,250

2,037

Non-controlling interests 1 3

Total equity

2,251

2,040

Liabilities

Non-current liabilities

Borrowings   627 1,129

Lease liabilities   104 106

Post-employment beneﬁt obligations  124 102

Provisions  45 73

Derivative ﬁnancial instruments  6 2

Deferred tax liabilities  209 223

Other non-current liabilities  2 4

Total non-current liabilities

1,117

1,639

Current liabilities

Borrowings   192 78

Lease liabilities  30 32

Trade payables  692 539

Provisions  178 122

Advances received  235 161

Customer contract liabilities  388 236

Derivative ﬁnancial instruments  52 29

Income tax liabilities  76 42

Other current liabilities  585 453

Total current liabilities

2,428

1,690

Total non-current and current liabilities

3,544

3,329

Liabilities held for sale  35 198

TOTAL EQUITY AND LIABILITIES

5,830

5,567

Consolidated balance sheetAssets Consolidated balance sheetEquity and liabilities

Balance sheet for year 2020 has been restated due to adjustments in the fair values of Outotec at the acquisition date. The adjustments have an eect to goodwill, non-current deferred tax assets and liabilities, income tax liabilities, other

current liabilities and liabilities held for sale.

Financial review 2021|Consolidated ﬁnancial statements 26

Consolidated statement of changes in shareholders’ equity

EUR million

capital

Share premium

fund

Cumulative

translation

adjustments

Fair value and

other reserves

Retained

earnings

Equity

attributable to

shareholders

Noncontrolling

interests Total equity

January 1, 2021 107 20 -210 1,136 983 2,037 3

2,040

Proﬁt for the year - - - - 342 342 0 342

Other comprehensive income

Cash ﬂow hedges, net of tax - - - -13 - -13 - -13

Currency translation on subsidiary net investments - - 46 - - 46 0 46

Deﬁned beneﬁt plan actuarial gains (+) / losses (), net of tax - - - - 5 5 - 5

Total comprehensive income

- - 46 -13 347 380 0 380

Dividends - - - - -166 -166 - -166

Share-based payments, net of tax - - - 7 -3 4 -

Other items - - - - 2 2 0 2

Changes in non-controlling interests - - - - -7 -7 -2 -10

December 31, 2021

107 20 -164 1,130 1,156 2,250 1 2,251

EUR million Share capital

Share premium

fund

Cumulative

translation

adjustments

Fair value and

other reserves

Retained

earnings

Equity attributable

to shareholders

Noncontrolling

interests Total equity

January 1, 2020 - - -151 0 1,403 1,252 3 1,254

Proﬁt for the year - - - - 138 138 0 138

Other comprehensive income

Cash ﬂow hedges, net of tax - - - 9 - 9 - 9

Currency translation on subsidiary net investments - - -58 - - -58 0 -58

Deﬁned beneﬁt plan actuarial gains (+) / losses (), net of tax - - - - -6 -6 -

-6

Total comprehensive income - - -58 9 132 83 0 82

Dividends - - - - -177 -177 0 -177

Dividends to related party - - - - -2 -2 - -2

Share-based payments, net of tax - - - 2 -4 -2 - -2

Changes in invested equity - - - - -19 -19 - -19

Demerger eect 90 - - 265 -355 - -

Reverse acquisition 17 20 - 860 - 898 1 898

Other items - - - - 6 6 0 6

December 31, 2020 107 20 -210 1,136 983 2,037 3 2,040

Financial review 2021|Consolidated ﬁnancial statements 27

Consolidated statement of cash flows

EUR million Note  

Operating activities

Proﬁt for the period, continuing operations 294 149

Proﬁt for the period, discontinued operations 48 -11

Adjustments

Depreciation and amortization  167 160

Finance expenses, net  39 38

Income taxes  92 58

Other items -2 0

Change in net working capital -31 193

Net cash ﬂow from operating activities before ﬁnancial items and taxes

608

587

Interests paid -22 -29

Interests received 1 5

Other ﬁnancing items, net -14 -11

Finance income and expenses paid, net -35 -35

Income taxes paid  -64 -62

Net cash ﬂow from operating activities

508

491

Investing activities

Capital expenditures on intangible assets and property,

plant, and equipment   -91 -88

Proceeds from sale of intangible assets and property,

plant, and equipment   22 3

Proceeds from sale of intangible assets and property,

plant, and equipment, Metso Group - 6

Proceeds from and investments in ﬁnancial assets, net  - 0

Business acquisitions, net of cash acquired  - 209

Business acquisitions, net of cash acquired, Metso Group - -6

Proceeds from sale of businesses, net of cash sold  74 -

Proceeds from sale of businesses, net of cash sold, Metso Group - 87

Proceeds from sale of associated companies  1 -

Net cash ﬂow from investing activities

211

EUR million Note  

Financing activities

Dividends paid -166 -177

Dividends paid, Metso group - -2

Increase in loan receivables  -1 -1

Decrease in loan receivables  1 -

Proceeds from increases in non-current debt  - 836

Repayment of non-current debt  -350 -400

Proceeds from and repayment of current debt, net  -37 -395

Proceeds from and repayment of debt, net, Metso Group  - -139

Repayment of lease liabilities  -38 -31

Net cash ﬂow from ﬁnancing activities

-591

-309

Net change in liquid funds

-78

393

Eect from changes in exchange rates 14 -6

Cash classiﬁed as assets held for sale 0 -6

Liquid funds equivalents at beginning of year   537 156

Liquid funds at end of year  

473

537

Financial review 2021|Consolidated ﬁnancial statements 28

Basic information

Metso Outotec Corporation (the “Parent company”) with its subsidiaries (“Metso Outotec” or

the “Group”) is a leading global supplier of sustainable technologies, end-to-end solutions and

services for the minerals processing, aggregates, and metals reﬁning industries. The Group

has three reporting segments, Aggregates, Minerals, and Metals. More information about the

segments is presented in note 1.1.

Metso Outotec Corporation is a publicly quoted company with its shares listed on Nasdaq

Helsinki under the trading symbol MOCORP. Metso Outotec Corporation is domiciled in

Finland, and the address of the Group Head Oce is Töölönlahdenkatu2, 00100 Helsinki,

Finland.

Metso Outotec’s consolidated ﬁnancial statements were authorized for issue by Metso

Outotec Corporation’s Board of Directors on February 9, 2022, after which, in accordance with

Finnish Companies Act, the ﬁnancial statements are either approved, amended or rejected at

the next Annual General Meeting.

Basis of preparation

The consolidated ﬁnancial statements have been prepared in accordance with International

Financial Reporting Standards (IFRS) and IFRIC Interpretations as adopted by the European

Union. The consolidated ﬁnancial statements have been prepared on a historical cost basis,

except for ﬁnancial assets and liabilities classiﬁed as at fair value through proﬁt and loss

accounts.

The partial demerger of Metso Corporation and the combination of Metso’s Minerals

business and Outotec was completed on June 30, 2020. In the transaction, the legal acquirer

Outotec issued new shares to Metso shareholders and received all assets, rights, debts,

and liabilities related to Metso’s Minerals business. In the consolidated ﬁnancial statements,

according to IFRS, this transaction is treated as a reverse acquisition, where Metso Minerals

is the accounting acquirer and Outotec the accounting acquiree. The historical IFRS-based

statement of income and cash ﬂow for the comparison period January–June 2020 includes

only Metso Minerals carve-out data. The July–December 2020 consolidated statement of

income and cash ﬂows includes Metso Outotec Group ﬁnancial data.

Outotec’s net assets were identiﬁed and recognized at fair value as of the acquisition date

on June 30, 2020. The comparative balance sheet for year 2020 has been restated due to

adjustments in the fair values of Outotec at the acquisition date. The acquisitions are disclosed

in the Note 5.4 Acquisitions and business disposals.

Metso Outotec has classiﬁed certain businesses to be as held for sale. The assets and

liabilities related to these businesses are presented on separate lines in the balance sheet, and

also the income statement items are presented on a separate line from continuing operations.

For more information can be found from the Note 5.5. Discontinued operations.

Notes to the consolidated financial statements

The ﬁnancial statements are presented in euros, which is the Parent company’s functional

currency and Metso Outotec’s presentation currency. The ﬁgures presented have been

rounded; consequently, the sum of individual ﬁgures might dier from the presented total

ﬁgure.

The detailed Metso Outotec’s accounting policies are disclosed under each relevant note of

the consolidated ﬁnancial statements.

Critical accounting estimates and judgments by Management

The preparation of ﬁnancial statements, in conformity with the IFRS, requires management to

make estimates and assumptions and to exercise its judgment in the process of applying the

Group’s accounting policies. These aect the reported amounts of balance sheet items, the

presentation of contingent assets and liabilities, and the income and expenses for the ﬁnancial

year. Actual results may dier from the estimates made. The assets and liabilities involving a

higher degree of judgment or complexity, or areas where the assumptions and estimates are

signiﬁcant to Metso Outotec’s consolidated ﬁnancial statements, are disclosed in the following

notes:

Note 1.2 Sales Note 2.6 Provisions

Note 1.6 Share-based payments Note 2.7 Post-employment obligations

Note 1.8 Income taxes Note 3.1 Goodwill and other intangible assets

Note 2.2 Trade receivables Note 3.2 Property, plant, and equipment

Note 2.3 Other receivables Note 3.3 Right-of-use assets

Note 2.4 Inventory Note 5.4 Acquisitions and business disposals

Due to the Covid-19 pandemic, Metso Outotec has reviewed the estimates and assumptions

used in the preparation of the consolidated ﬁnancial statements. The possible impact of the

Covid-19 pandemic on the relevant factors in estimates and assumptions has been considered.

The estimates and assumptions used reﬂect management’s best judgment on the possible

impacts of the pandemic.

Financial review 2021|Notes to the consolidated ﬁnancial statements 29

Abbreviations used in the financial statements

AGM Annual General Meeting

EGM Extraordinary General Meeting

CGU Cash generating unit

EBIT Earnings before ﬁnancial expenses, net and taxes (operating proﬁt)

EBITA Earnings before ﬁnancial expenses net, taxes and amortization

EBITDA Earnings before ﬁnancial expenses net, taxes, amortization, and depreciation

EMTN Euro Medium Term Note program

EPS Earnings per share

FAS Finnish accounting standards

HSE Health, safety, and environment

IFRIC Interpretations of International ﬁnancial reporting standards

IFRS/IAS International ﬁnancial reporting standards

KPI Key performance indicator

LTIF Lost-time incident frequency

NWC Net working capital

OCI Other comprehensive income

OTC Over the counter

P/E Price/earnings ratio

PPE Property, plant, and equipment

PSP Performance share incentive plan

R&D Research and development

RFR Relief from royalty method

ROCE Return on capital employed

ROE Return on equity

RSP Restricted share incentive plan

TSR Total shareholder return

WACC Weighted average cost of capital

Financial review 2021|Notes to the consolidated ﬁnancial statements 30

Group performance

Financial review 2021|Notes to the consolidated ﬁnancial statements 31

Reporting segments ............................... 

Sales ........................................... 

Selling general and administrative expenses .......... 

Other operating income and expenses ............... 

Personnel expenses and number of personnel ......... 

Sharebased payments ............................ 

Financial income and expenses ..................... 

Income taxes .................................... 

Earnings per share ................................ 

Reporting segments

ACCOUNTING POLICYReportable segments of Metso Outotec are based on end customer

groups, which are dierentiated by both oering and business model: Aggregates, Minerals

and Metals. The segments are reported in a manner consistent with the internal reporting

provided to the Board of Directors, Metso Outotec’s chief operating decision-maker

responsible for allocating resources and assessing the performance of the segments, deciding

on strategy, selecting key employees, as well as deciding on major development projects,

business acquisitions, investments, organizational structure and ﬁnancing. The accounting

principles applied to segment reporting are the same as those used in preparing the consoli-

dated ﬁnancial statements.

Segment performance is measured with operating proﬁt/loss (EBIT). In addition, Metso

Outotec uses alternative performance measures to reﬂect the underlying business performance

and to improve comparability between ﬁnancial periods: Earnings before interest, tax and

amortization (EBITA), adjusted and net working capital. Adjustment items comprise capacity

adjustment costs, acquisition costs, gains and losses on business transactions as well as Metso

Outotec transaction and integration costs. Their nature and net eect on cost of goods

sold, selling, general and administrative expenses, as well as other income and expenses are

presented in the segment information. Alternative performance measures, however, should not

be considered as a substitute for measures of performance in accordance with the IFRS.

Corporate structure

Metso Outotec Group is a global supplier of sustainable technologies, end-to-end solutions

and services for the minerals processing, aggregates, and metals reﬁning industries. Metso

Outotec has a broad oering in terms of equipment, solutions, and aftermarket services.

Reportable segments of Metso Outotec are based on end customer groups, which are

dierentiated by both oering and business model: Aggregates, Minerals, and Metals.

Aggregates oers a wide range of equipment, aftermarket parts and services for quarries,

aggregates contractors and construction companies.

Minerals supplies a wide portfolio of process solutions, equipment and aftermarket services

for mining operations.

Metals provides sustainable solutions for processing virtually all types of ores and concen-

trates to reﬁned metals.

Group Head Oce and other is comprised of the Parent company with centralized group

functions, such as treasury and tax, as well as the global business services and holding

companies.

Financial income and expenses as well as income taxes are not allocated to segments but

included in the income statement of Group Head Oce and other. The treasury activities of

Metso Outotec are centralized into the Group Treasury to beneﬁt from cost eciency obtained

from pooling arrangements, ﬁnancial risk management, bargaining power, cash management,

and other measures. Metso Outotec has a centralized Group tax management function. The

objective of Group tax management is to ensure tax compliance and an optimized and

predictable overall tax cost for Metso Outotec.

Segment net working capital assets comprises inventories and non-interest-bearing

operating assets and receivables. Segment net working capital liabilities comprise non- interest-

bearing operating liabilities.

Non-cash write-downs include write-os made to the value of receivables and inventories,

and impairment and other write-os recognized to reduce the value of intangible assets or

property, plant, and equipment and other assets.

Gross capital expenditure comprises investments in intangible assets and property, plant,

and equipment, associated companies, and joint ventures.

Intra-group transactions are made on an arm’s length basis.

Financial review 2021|Notes to the consolidated ﬁnancial statements 32

Segment information

2021

EUR million Aggregates Minerals Metals

Group Head

Oce and

other Total

Sales, external     

Sales, intra-group     

Sales, total

    

Earnings before interest, tax, and

amortization (EBITA)     

% of sales    

Adjusted EBITA     

% of sales    

Operating proﬁt (loss)     

% of sales    

Adjustment items and amortization of

intangible assets

Adjusted EBITA     

Adjustment items, total     

Amortization of other intangible

assets total     

Operating proﬁt (loss)

    

Inventories     

Trade receivables     

Other non-interest-bearing

receivables     

Customer contract assets and

liabilities, net     

Trade payables     

Advances received     

Other non-interest-bearing

liabilities     

Net working capital

    

Segment information

2020

EUR million Aggregates Minerals Metals

Group Head

Oce and

other Total

Sales, external     

Sales, intra-group     

Sales, total     

Earnings before interest, tax, and

amortization (EBITA)     

% of sales    

Adjusted EBITA     

% of sales    

Operating proﬁt (loss)     

% of sales    

Adjustment items and amortization of

intangible assets

Adjusted EBITA     

Adjustment items, total     

Amortization of other intangible

assets total     

Operating proﬁt (loss)     

Inventories     

Trade receivables     

Other non-interest-bearing

receivables     

Customer contract assets and

liabilities, net     

Trade payables     

Advances received     

Other non-interest-bearing

liabilities     

Net working capital     

Financial review 2021|Notes to the consolidated ﬁnancial statements 33

Adjustment items by category

EUR million  

Capacity adjustment costs  

Acquisition costs

 

Proﬁts on disposals, net  

Metso Outotec integration costs  

Metso Outotec transaction costs  

Adjustments items, total





Including accrued acquisition costs adjustments.

Geographical information

ACCOUNTING POLICYMetso Outotec presents the geographical distribution of the segments’

sales by location of customers. Non-current assets and gross capital expenditure are presented

by location of assets.

Metso Outotec’s businesses are present in more than 50 countries, providing strong

diversiﬁcation. The main market areas are Asia-Paciﬁc, Europe and North and Central America,

accounting for approximately 69 percent of sales. Metso Outotec has a global network of

production units located in key continents.

Sales to unaliated customers by destination

EUR million  

Finland  

Europe  

North and Central America  

South America  

APAC  

Africa, Middle East, and India  

Sales, total





Metso Outotec’s exports from Finland by destination, including intra-group sales

EUR million  

Europe  

North and Central America  

South America  

APAC  

Africa, Middle East, and India  

Exports from Finland, total





Non-current assets by location

EUR million  

Finland  

Europe  

North and Central America  

South America  

APAC  

Africa, Middle East, and India  

Non-allocated  

Non-current assets, total





Financial review 2021|Notes to the consolidated ﬁnancial statements 34

Non-current assets presented in the previous table comprise intangible assets and property,

plant and equipment, investments in associated companies, joint ventures, equity investments

and other non-interest bearing non-current assets. Non-allocated assets include mainly

goodwill and other assets arising from business acquisitions that have not been pushed down

to the subsidiaries’ books.

Gross capital expenditure by location

EUR million  

Finland  

Europe  

North and Central America  

South America  

APAC  

Africa, Middle East, and India  

Gross capital expenditure, total





Gross capital expenditure comprises investments in intangible assets and property, plant, and

equipment, associated companies, and joint ventures. Right-of-use assets are not included in

the gross capital expenditure calculation.

Sales

ACCOUNTING POLICYMetso Outotec applies IFRS 15 standard Revenue from Contracts with

Customers. The principle is that sales are recognized at an amount that reﬂects the consider-

ation which Metso Outotec expects to receive in exchange for transferring goods or services

to a customer. Sales are recognized when the control of goods or services is transferred to a

customer. Control is transferred either at a point in time or over time.

When Metso Outotec provides standardized equipment and wear or spare parts to

customers, sales are recognized at a point in time when control for the goods is transferred,

typically at the delivery of the goods or after commissioning. Sales to distributors are recog-

nized at delivery, when the distributor is not acting as an agent. If the distributor is acting as

an agent, sales are recognized only when delivered to an ultimate client.

When Metso Outotec provides customized engineered system deliveries, where the asset

produced does not have alternative use and Metso Outotec has enforceable right to payment

for the performance completed, sales are recognized over time. Sales recognition is based on

estimated sales, costs and proﬁt. Metso Outotec measures the progress using the cost-to-cost

method, where sales and proﬁts are recorded after considering the ratio of accumulated

costs to estimated total costs to complete each contract. This method is considered to best

reﬂect the satisfaction of the performance obligation. The estimated sales, costs and proﬁt,

together with the planned delivery schedule of the contract are subject to regular revisions as

the contract progresses to completion. Revisions in proﬁt estimates as well as any projected

potential loss on contract are charged through the proﬁt and loss account in the period in

which they become known.

Sales from providing services are recognized when the performance obligation is satisﬁed.

For long-term ﬁxed price service contracts, sales are recognized over time, because the

customer receives the performance obligation simultaneously when the service is rendered.

The measure of the progress is based on costs of actual services provided as a proportion of

the costs of total services to be rendered. The estimated sales, costs and proﬁt, together with

the planned delivery schedule of the contract are subject to regular revisions as the contract

progresses to completion. Revisions in contract estimates as well as any projected potential

loss on contract are charged through the proﬁt and loss account in the period in which they

become known.

For short-term service contracts with hourly fee based on valid price list, sales are

recognized to the extent Metso Outotec has the right to invoice the customer, and for service

contracts with ﬁxed hourly fee agreed in the contract, sales are recognized based on invoicing.

Client contracts may include promises such as volume-based rebates, late delivery penalties

or right to return delivered parts. The impact of these promises on the ﬁnal consideration will

be estimated when recognition is started and systematically during the contract period. Sales

will be recognized to the extent that Metso Outotec is entitled to the consideration. Also,

creditworthiness of the client and collectability of the consideration is assessed throughout the

contract period. Extended warranties are treated as a separate performance obligation and an

appropriate transaction price is allocated to them and recognized in sales when occurred.

Metso Outotec often requires advance payments from clients. Applying IFRS 15, advances

received do not include a ﬁnancing component, because the payment schedule of them

follows closely the timing of performance obligations to be satisﬁed.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTSales recognized at a point in time may require

judgement on facts and circumstances when the control is considered to have passed to the

client, aecting on timing of sales to be recognized. Transfer of the control is assessed mainly

based on terms of delivery in the contract and local legislation. Customer contracts including

clauses on rebates, late delivery penalties, right to return promises or extended warranties

requires management judgement on the probability of such clauses to have an eect on

contracts sales. Judgements are based on earlier experience and market practice when

available.

Sales recognized over time is based on cost-to-cost method, which requires management

to be able to estimate total sales, costs, margin, and cash ﬂow to complete the project. The

assessment of the progress and margin to be recognized as well as the total costs estimated

to complete the contracts requires judgments by management throughout the contract period.

The most critical judgments are needed in case of a loss-making contract when estimating the

performance needed to be able to satisfy the contract. Changes in general market conditions

and the possible impact on the contracts needs to be predicted as well. The credit worthiness

of the customer is veriﬁed, and collectability of the consideration assessed before entering a

contract. However, a risk of non-payment might arise afterwards, and it requires management

judgement on the impact on ﬁnal sales recognition.

Financial review 2021|Notes to the consolidated ﬁnancial statements 35

Hedging of foreign currency denominated ﬁrm commitments

Metso Outotec hedging policy requires business units to hedge their foreign currency risk

when they become engaged in a ﬁrm commitment denominated in a currency other than their

functional currency. When a ﬁrm commitment qualiﬁes for over time recognition, the business

unit applies hedge accounting and recognizes the eect of the hedging instruments in other

comprehensive income (OCI) until the commitment is recognized. Though Metso Outotec has

deﬁned the characteristics triggering a ﬁrm commitment, the ﬁnal realization of the unrecog-

nized commitment depends also on factors beyond management control, which cannot be

foreseen when initiating the hedging relationship. Such factors can be a change in the market

environment causing the other party to postpone or cancel the commitment. To the extent

possible, management strives to include clauses in its contracts that reduce the impact of such

adverse events on its results.

Disaggregation of sales

Sales by segments

EUR million  

Aggregates  

Minerals  

Metals  

Sales, total





External sales by category

EUR million  

Sales of services  

Aggregates  

Minerals  

Metals  

Sales of projects, equipment, and goods  

Aggregates  

Minerals  

Metals  

Sales, total





External sales by timing of sales recognition

EUR million  

At a point in time  

Over time  

Sales, total





External sales by destination

EUR million  

Finland  

Europe  

North and Central America  

South America  

APAC  

Africa, Middle East & India  

Sales, total





Contract balances

EUR million  

Trade receivables  

Customer contract assets  

Customer contract liabilities  

Advances received  

Customer contract liabilities and advances received are annually recognized as sales mainly

during the following year.

When providing standardized equipment such as pumps and wear or spare parts, invoicing

takes place in general at the delivery or after commissioning. In engineered system deliveries,

and long-term service contracts invoicing is based on the client contracts. Short-term service

contracts are invoiced when service is rendered.

Trade receivables are based on the invoicing to customers and are generally on terms of

30–90 days. Information about provision for expected credit losses on trade receivables is

presented in note 2.2.

Engineered system, and long-term service contracts are mainly ﬁxed priced contracts,

where customers are invoiced with ﬁxed amounts based on contract schedule. In case the

performance obligation satisﬁed exceeds the invoiced payment from the customer, a contracts

asset is recognized. In case the invoiced payment from the customer exceeds the performance

obligation satisﬁed, a contract liability is recognized.

Advances received is the amount paid in advance to Metso Outotec by customers. Typically,

Metso Outotec receives advance payments in customized large scale engineered system and

equipment delivery projects.

Changes in receivables from customers or liabilities to customers and advances received is

typically the result of changes in business volume in the current year compared to the previous

year.

Financial review 2021|Notes to the consolidated ﬁnancial statements 36

Unsatisfied performance obligations

The order backlog, amounting to EUR 3,536 million on December 31, 2021, corresponds to the

aggregate amount of the transaction price allocated to the performance obligations that are

fully or partly unsatisﬁed at the end of the reporting period. These performance obligations

are expected to be materially satisﬁed in two years.

Performance obligations

Metso Outotec’s sales consist of the sale of standardized equipment deliveries and services

with wear or spare parts, customized large-scale engineered system and/or equipment

deliveries. Metso Outotec’s performance obligations are as follows:

Equipment and wear or spare parts deliveries

When Metso Outotec provides standardized equipment and wear or spare parts to customers,

revenue will be recognized at a point in time, when control of the goods is transferred,

typically at the delivery of the goods or after commissioning. These contracts may include

promises, such as volume-based rebates, late delivery penalties, or the right to return delivered

parts. The impact of these promises on the ﬁnal consideration will be estimated and sales will

be recognized to the extent that Metso Outotec is entitled. Extended warranties are treated as

a separate performance obligation, and an appropriate transaction price is allocated to them

and recognized in sales when occurred.

Metso Outotec cooperates with distributors especially in the aggregates business. Based on

the current distributor contracts, Metso Outotec recognizes sales at the delivery to a distributor.

Promises on volume-based rebates and the right to return goods are assessed and sales will

be recognized to the extent that Metso Outotec is entitled.

Engineered system and equipment deliveries

With customized large-scale engineered system and equipment deliveries, where assets

produced do not have an alternative use for another client, and Metso Outotec has the right

to payment for the performance completed, revenue will be recognized over time. Each

large-scale engineered system and equipment delivery contract is assessed separately. These

contracts usually have a customer-speciﬁc, one total performance obligation agreed with the

client.

These contracts may include promises, such as late delivery penalties, performance

guarantees, and extended warranties. The impact of these promises on the ﬁnal consideration

will be estimated and sales will be recognized to the extent that Metso Outotec is entitled.

Metso Outotec typically requires advance payments from clients, which in general, do not

include a ﬁnancing component, because the payment schedule of advances follows closely

the timing of performance obligations to be satisﬁed.

Service contracts

Sales from providing services are recognized when the services are rendered. For long-term-

ﬁxed price contracts, sales are recognized over time. The measure of the progress is based

on the costs of actual services provided as a proportion of the costs of total services to

be rendered. For short-term service contracts with an hourly fee based on a valid price list,

revenue is recognized to the extent Metso Outotec has right to invoice the customer, and for

service contracts with a ﬁxed hourly fee agreed in the contract, revenue is recognized based

on invoicing. Typical promises in service contacts are late delivery penalties, performance

guarantees, or right to return promises; the impact of these promises are assessed, and sales

recognized to the extent that Metso Outotec is entitled.

Major customers

In 2021 and 2020, Metso Outotec did not have any single customer whose sales would have

exceeded 10 percent of consolidated sales.

Selling general and administrative expenses

EUR million  

Marketing and selling expenses  

Research and development expenses, net  

Administrative expenses  

Selling, general, and administrative expenses, total





ACCOUNTING POLICYResearch and development expenses comprise salaries, administration

costs, digital investments, and depreciation and amortization of property, plant, and equipment

and intangible assets and are mainly recognized as incurred. When material development

costs meet certain capitalization criteria under IAS 38, they are capitalized and amortized over

the expected useful life of the underlying technology.

Research and development expenses

EUR million  

Research and development expenses, total  

Capital expenditure  

Grants received  

Depreciation and amortization  

Research and development expenses, net





Financial review 2021|Notes to the consolidated ﬁnancial statements 37

Other operating income and expenses

ACCOUNTING POLICYOther operating income and expenses comprise income and expenses

that do not directly relate to the operating activity of businesses within Metso Outotec, or

which arise from unrealized and realized changes in fair value of foreign currency denom-

inated ﬁnancial instruments related to operations, including forward exchange contracts.

Such items include costs related to signiﬁcant restructuring programs, gains and losses on

disposal of assets, and foreign exchange gains and losses, excluding those qualifying for

hedge accounting and those, which are reported under ﬁnancial income and expenses,

net. Additionally, non-recoverable foreign taxes, which are not based on taxable proﬁts, are

reported in other operating income and expenses, net. In particular, these include foreign

taxes and such like payments not based on Double Taxation Treaties in force.

EUR million  

Other operating income

Gain on sale of intangible assets and property, plant, and equipment  

Rental income  

Foreign exchange gains

 

Other income  

Other operating income total





Other operating expenses

Loss on sale of intangible assets and property, plant, and equipment  

Impairment of intangible assets and property, plant, and equipment  

Foreign exchange losses

 

Other expenses  

Other operating expenses total





Other operating income and expenses, net





Includes foreign exchange gains and losses resulting from trade receivables and payables and related derivatives.

Personnel expenses and number of personnel

Personnel expenses

EUR million  

Salaries and wages  

Pension costs, deﬁned contribution plans  

Pension costs, deﬁned beneﬁt plans

 

Other post-employment beneﬁts

 

Share-based payments

 

Other indirect employee costs  

Personnel expenses, total





For more information on pension costs, see note 2.7.

For more information on share-based payments, see note 1.6.

Number of personnel at end of year and average number of personnel during the year

Persons  

Personnel at end of the year  

Average number of personnel during the year  

Board remuneration

EUR thousand  

Serving Board members December 31, 2021

Kari Stadigh  

Klaus Cawén  

Christer Gardell  

Antti Mäkinen  

Ian W. Pearce  

Emanuela Speranza  

Arja Talma  

Former Board members

Mikael Lilius

 

Matti Alahuhta

 

Hanne de Mora

 

Raimo Brand

 

Peter Carlsson

 

Lars Josefsson

 

Board remuneration, total





Metso Outotec Board member until April 23, 2021.

Attended meetings as a personnel representative, without voting rights until June 30, 2020.

Metso Board member until June 16, 2020.

Metso Board member until June 30, 2020.

Financial review 2021|Notes to the consolidated ﬁnancial statements 38

According to the resolution of the 2021 Annual General Meeting, the ﬁxed annual fees paid

to the Board members is as in the previous term as follows: Chair of the Board EUR 150,000,

Vice Chair of the Board EUR 80,000, and other Board members EUR 65,000. An additional

annual remuneration is paid to the member of the Board elected in the position of Chair of

the Audit Committee EUR 23,000, members of the Audit Committee EUR 10,000, Chair of the

Remuneration and HR Committee EUR 12,000, and members of the Remuneration and HR

Committee EUR 5,000.

In addition, the Annual General Meeting resolved that meeting fees for attendance at

each Board and Committee meeting be paid to members of the Board of Metso Outotec will

also be unchanged as follows: EUR 900 to each member of the Board residing in the Nordic

countries, EUR 1,800 for members of the Board residing in other European countries and EUR

2,700 to each member of the Board residing outside Europe. In addition, Board members shall

be reimbursed for direct costs arising from Board work.

Remuneration paid to Chief Executive Ocer and other Executive Team members

2021

EUR Salary

Fringe

beneﬁts

Performance

bonus paid

Sharebased

payment Total

President and CEO

Pekka Vauramo     

Other Executive

Team members     

Remuneration, total

    

2020

EUR Salary

Fringe

beneﬁts

Performance

bonus paid

Sharebased

payment Total

President and CEO

Pekka Vauramo     

Other Executive

Team members     

Remuneration, total     

Remuneration paid to President and CEO Pekka Vauramo in 2021 is presented in the table

above. Mr. Vauramo participates in the remuneration programs according to the respective

terms and conditions decided by the Board. For more information on share-based payments,

see note 1.6.

It has been agreed that Mr. Pekka Vauramo will continue as the President and CEO of

Metso Outotec until the end of 2023. The President and CEO is entitled to participate in a

supplementary deﬁned contribution pension plan. The supplementary pension contribution is

equivalent to 25% of the annual salary. For years ended December 31, 2021, and December 31,

2020, these pension premium payments for the supplementary deﬁned contribution pension

plan totaled approximately EUR 211 thousand and EUR 206 thousand respectively. The notice

period for both parties is six months. Severance pay is full monthly salary multiplied by twelve

(12) if the agreement is terminated by the company.

Metso Outotec has a subscribed supplementary pension plan for other Metso Outotec

Executive Team members in Finland. For the years ended December 31, 2021, and December

31, 2020, these pension premium payments totaled EUR 561 thousand and EUR 369 thousand,

respectively.

Board share ownership in Metso Outotec

Shares (pcs) 

Kari Stadigh 

Klaus Cawén 

Christer Gardell 

Antti Mäkinen 

Ian W. Pearce 

Emanuela Speranza 

Arja Talma 

Share ownership, total



Executive Team share ownership in Metso Outotec

Shares (pcs) 

Pekka Vauramo 

Markku Simula 

Heikki Metsälä 

Jari Ålgars 

Markku Teräsvasara 

Sami Takaluoma 

Eeva Sipilä 

Nina Kiviranta 

Piia Karhu 

Carita Himberg 

Share ownership, total



Sharebased payments

ACCOUNTING POLICYMetso Outotec has share-based incentive plans for its key personnel.

The equity-settled share awards are valued based on the market price of the Metso

Outotec share on the grant date and recognized as an employee beneﬁt expense over

the vesting period with a corresponding entry in other reserves of the equity. The historical

development of the Metso Outotec shares, and the expected dividends have been taken into

account when calculating the fair value. The entire share incentive, including the cash-for-taxes

portion, is recognized in equity. Also the value of the cash portion is based on the grant date

value. As a market condition, total shareholder return of the Performance Share Plans will

be taken into account when determining the fair value at grant, and it will not be changed

Financial review 2021|Notes to the consolidated ﬁnancial statements 39

during the plan. The fair value of the cost estimate of the Performance Share Plans will only be

changed when service or non-market conditions are concerned.

At each balance sheet date, Metso Outotec revises its estimates on the amount of share-

based payments that are expected to vest. The impact of a revision to a previous estimate is

accrued as an employee beneﬁt expense with a corresponding entry to equity. The historical

development of Metso Outotec share price and the expected dividends have been taken into

account when calculating the fair value.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTAt each balance sheet date, management reviews

its estimates for the number of shares that are expected to vest. As part of this evaluation,

Metso Outotec takes into account changes in the forecasted performance of the Group and its

reporting segments, expected turnover of the personnel beneﬁting from the incentive plan, and

other pertinent information impacting the number of shares to be vested.

Metso Outotec Performance and Restricted Share Plans

In June 2020, Metso Outotec’s Board decided on long-term share-based incentive plans:

Performance Share Plan (PSP) and Restricted Share Plan (RSP). The commencement of each

new PSP and RSP and the earnings criteria for each new PSP plan will be subject to a separate

decision by the Board. The PSP consists of an annually commencing plan, each with a three-year

earning period, and the complementary RSP consists of an annually commencing plan, each

with a three-year vesting period. The possible rewards are paid partly in Metso Outotec’s shares

and partly in cash.

If the participant’s employment or service ends for reasons relating to the participant before

the reward payment, no reward will be paid from the long-term incentive plans.

Performance Share Plan 2021–2023

The earning criteria for the PSP 2021–2023 is based on the total shareholder return of Metso

Outotec’s share, earnings per share and an ESG measure linked to sustainable development. At

the end of 2021, there were 174 participants in the plan, and the potential reward corresponds to

a maximum of 2,531,060 Metso Outotec shares, out of which the Metso Outotec Executive Team

can receive a maximum reward of 802,800 shares. The potential reward will be paid in 2024.

Performance Share Plan 2020–2022

The earning criteria for the PSP 2020–2022 is based on the total shareholder return of Metso

Outotec’s share and the achievement of the synergy targets set in connection with the combi-

nation of the businesses. At the end of 2021, there were 9 participants in the plan, and the

potential reward corresponds to a maximum of 893,900 Metso Outotec shares, out of which the

Metso Outotec Executive Team can receive a maximum reward of 893,900 shares. The potential

reward will be paid in 2023.

Metso Outotec Deferred Share Plan

In July 2020, Metso Outotec’s Board of Directors decided to establish a new long-term incentive

plan for senior managers and key employees. The Deferred Share Plan (DSP) is a long-term

incentive plan that aligns and rewards the employee’s performance and Metso Outotec share value

development during a performance period. Metso Outotec Executive Team members aren’t eligible

to participate in the DSP. No new plan periods will be started from Deferred Share Plan.

If the participant’s employment or service ends for reasons relating to the participant before

the reward payment, no reward will be paid from the long-term incentive plans.

Deferred Share Plan 2020–2022

At the end of 2021, there were 149 participants in the DSP 2020–2022 plan, and the potential

reward corresponds to 875,866 Metso Outotec shares. The potential reward will be paid in 2023.

Metso Performance and Restricted Share Plans 2015–2019

In December 2014, Metso’s Board decided on long-term share-based incentive plans: the Perfor-

mance Share Plan (PSP) and Restricted Share Plan (RSP). The commencement of each new PSP and

RSP and the earnings criteria for each new PSP plan will be subject to a separate decision by the

Board. The PSP consists of an annually commencing plan, each with a three-year earning period,

and the complementary RSP consists of an annually commencing plan, each with a three-year

vesting period. The possible outstanding rewards are paid partly in Metso Outotec’s shares and

partly in cash.

If the participant’s employment or service ends for reasons relating to the participant before

the reward payment, no reward will be paid from the long-term incentive plans.

Performance Share Plan 2017–2019

The earning criteria for the PSP 2017–2019 and the potential reward are based on the total

shareholder return (TSR) of Metso’s share during 2017–2019. A total of 120,551 Metso treasury shares

were used to pay rewards to 80 participants in February 2020.

Restricted Share Plan 2017–2019

A total of 1,176 Metso treasury shares were used to pay rewards to two participants in February 2020.

Performance Share Plan 2018–2020

The earning criteria for the PSP 2018–2020 and the potential reward are based on the total

shareholder return (TSR) of Metso’s share during 2018–2020. The plan was evaluated in June 2020

and the earning criteria were not met; there were no payout from the PSP 2018–2020 plan in 2021.

Restricted Share Plan 2018–2020

A total of 47,475 Metso Outotec treasury shares were used to pay rewards to one participant in

February 2021.

Performance Share Plan 2019–2021

The earning criteria for the PSP 2019–2021 was based on total shareholder return of Metso’s share

during 2019–2021. Plan performance was evaluated in June 2020. A total of 593,568 Metso Outotec

shares are to be paid to 7 participants, out of which Metso Outotec Executive Team members can

receive a reward of 536,346 shares. The potential reward will be paid in 2022.

Financial review 2021|Notes to the consolidated ﬁnancial statements 40

Restricted Share Plan 2019–2021

At the end of 2021, there were two participants in the RSP plan; the potential reward

corresponds to 124,880 Metso Outotec shares, out of which Metso Outotec Executive Team

members can receive a reward of 124,880 shares. The potential reward will be paid in 2022.

Deferred Share Unit Plan

In December 2017, Metso’s Board of Directors decided to establish a new long-term incentive

plan for senior managers and key employees. The Deferred Share Unit Plan (DSUP) is a long-

term share value-based incentive plan that aligns and rewards the employee’s performance

and Metso share value development during a performance period. Metso Outotec Executive

Team members aren’t eligible to participate in the DSUP. The possible rewards are paid in cash.

If the participant’s employment or service ends for reasons relating to the participant

before the reward payment, no reward will be paid from the long-term incentive plans.

Deferred Share Unit plan 2018–2020.

DSUP 2018–2020 plan was paid in cash to 83 employees in July 2021.

Deferred Share Unit Plan 2019–2021

At the end of 2021, there were 86 participants in the DSUP plan. The potential cash reward will

be paid in 2022.

Outotec Performance Share Plan 2019–2021

Outotec’s Board of Directors decided on December 11, 2018, to adopt a Share-based Incentive

Program 2019–2021 for the company’s key personnel.

If the participant’s employment or service ends for reasons relating to the participant

before the reward payment, no reward will be paid from the long-term incentive plans.

The earning criteria for the Outotec Performance Share Plan 2019–2021 were based on

operating result (EBIT) and free cash ﬂow. A total of 263,031 Metso Outotec shares are to be

paid to 54 participants, out of which Metso Outotec Executive Team members can receive a

reward of 58,482 shares. The potential reward will be paid in 2022.

Matching Share Plan 2018–2022

Metso Outotec has one active Matching Share Plan for President and CEO Pekka Vauramo. The

plan requires personal investment in Metso Outotec shares. The potential reward corresponds

to a maximum of 117,075 gross Metso Outotec shares and will be delivered in three installments

which are subject to fulﬁlling the performance criterion of adjusted EBITA for each installment.

The possible reward is paid partly in Metso Outotec’s shares and partly in cash.

If the participant’s service relation ends for reasons relating to the participant before the

reward payment, no reward will be paid from the long-term incentive plan.

A total of 20,742 Metso Outotec treasury shares were used to pay reward for fulﬁlling the

performance criterion for ﬁrst installment in February 2021. The potential reward for second

and third installments will be paid in 2022.

Beneﬁciaries of and granted shares under the share ownership plan

December 31, 2021

Beneﬁciaries

total

Plan 2018–2020

Granted 2021  

Plan DSUP 2018–2020

Granted 2021 

Plan PSP 2019–2021

Granted 2021 

Cash payment.

Costs recognized for the share ownership plans

EUR thousand  

Plan PSP 2017–2019  

Plan PSP and DSUP 2018–2020  

Plan PSP and DSUP 2019–2021  

Plan PSP and DSUP 2020–2022  

Plan Outotec LTIP 2019  

Plan PSP 2021–2023  

Costs, total





Financial income and expenses

EUR million  

Finance income

Dividends received  

Interest income  

Other ﬁnance income  

Finance income total





Foreign exchange gains/losses  

Finance expenses

Interest expenses from ﬁnancial liabilities at amortized cost  

Interest expenses on lease liabilities  

Other ﬁnance expenses  

Finance expenses total





Finance income and expenses, net





Financial review 2021|Notes to the consolidated ﬁnancial statements 41

Income taxes

ACCOUNTING POLICYIncome taxes in the consolidated income statement includes taxes of

subsidiaries based on taxable income for the current period, tax adjustments for previous

periods, and the changes in deferred taxes. The other comprehensive income statement (OCI)

includes taxes on items presented in the OCI. Deferred taxes are determined for temporary

dierences arising between the tax base of assets and liabilities and their ﬁnancial statement

carrying amounts, measured using substantially enacted tax rates.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTMetso Outotec is subject to income tax in its

operating countries. Metso Outotec’s management is required to make certain assumptions

and estimates in preparing the annual tax calculations for which the ultimate tax consequence

is uncertain. Annually, Metso Outotec has tax audits ongoing in several subsidiaries and

recognizes tax liabilities for anticipated tax audit issues based on an estimate of whether

additional taxes will be due. Where the ﬁnal outcome of these issues is dierent from the

estimated amounts, the dierence will impact the income tax in the period in which such

determination is made.

The components of income taxes

EUR million  

Income taxes for current year  

Income taxes for prior years  

Change in deferred tax asset and liability  

Income taxes





Dierences between income tax expense computed at the Finnish statutory rate and

income tax expense provided on earnings

EUR million  

Proﬁt before taxes  

Income tax at Finnish statutory tax rate of 20.0%  

Eect of dierent tax rates in foreign subsidiaries  

Non-deductible expenses  

Tax-exempt income or tax incentives  

Foreign non-creditable withholding taxes  

Deferred tax assets not booked on current year loss  

Deferred tax liability on undistributed earnings  

Eect of enacted change in tax rates  

Income tax for prior years  

Other  

Income taxes





Tax eects of components in other comprehensive income

 

EUR million

Before

taxes Tax

After

taxes

Before

taxes Tax

After

taxes

Cash ﬂow hedges      

Deﬁned beneﬁt plan actuarial gains (+) / losses ()      

Currency translation on subsidiary net investments      

Total comprehensive income (+) / expense ()



 

  

Current year tax  

Deferred tax  

Total





ACCOUNTING POLICYThe deferred tax asset or liability is determined for temporary dierences

arising between the tax bases of assets and liabilities and their ﬁnancial statement carrying

amounts using the substantially enacted tax rates expected to apply in future years. Typical

temporary dierences arise from provisions, depreciation and amortization expense, inter-

company inventory margins, deﬁned beneﬁt plans, and tax loss carry-forwards. Deferred tax

liabilities are recognized in the balance sheet in full, and the deferred tax assets are only

recognized if it is probable there will be taxable income in the future against which deferred

tax can be used. Deferred tax assets are oset against deferred tax liabilities if they relate to

taxes levied by the same taxation authority.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTIn determining deferred tax assets and liabilities,

Metso Outotec is required to make certain assumptions and estimates on, in particular, future

operating performance and the taxable income of subsidiaries, recoverability of tax loss

carry-forwards and potential changes in tax laws in jurisdictions where Metso Outotec operates.

A deferred tax liability based on foreign subsidiaries’ undistributed earnings has been provided

only where Metso Outotec’s management has elected to distribute such earnings in the

coming years and the distribution is subject to taxation. Because tax consequences are dicult

to predict, deferred tax assets and liabilities may need to be adjusted in future ﬁnancial years,

which may have an impact in the period in which such determination is made.

Financial review 2021|Notes to the consolidated ﬁnancial statements 42

Reconciliation of deferred tax balances

2021

EUR million Jan 

Charged

to income

statement

Charged to

share

holders’

equity

Acquisi

tions and

disposals

Translation

dierences

and Group

items

Dec 

Deferred tax assets

Tax losses carried forward      

Intangible assets and property, plant,

and equipment      

Inventory      

Provisions      

Accruals      

Pension related items      

Other      

Total deferred tax assets      

Oset against deferred tax liabilities      

Net deferred tax assets      

Deferred tax liabilities

Purchase price allocations      

Intangible assets and property, plant,

and equipment      

Other      

Total deferred tax liabilities

     

Oset against deferred tax assets      

Net deferred tax liabilities      

Deferred tax assets (+) / liabilities (),

net      

Deferred tax liability on undistributed retained earnings in subsidiaries will be recognized when

the dividend distribution is probable in the near future, and it will cause a tax impact. At the

end of year 2021 and 2020 there were no substantial undistributed earnings in subsidiaries

from which a deferred tax liability is not booked.

Reconciliation of deferred tax balances, comparison period

2020

EUR million Jan 

Charged

to income

statement

Charged to

share

holders’

equity

Acquisi

tions and

disposals

Translation

dierences

and Group

items

Dec 

Deferred tax assets

Tax losses carried forward      

Intangible assets and property, plant,

and equipment      

Inventory      

Provisions      

Accruals      

Pension related items      

Other      

Adjustment related to the Outotec

acquisition

     

Total deferred tax assets      

Oset against deferred tax liabilities      

Net deferred tax assets      

Deferred tax liabilities

Purchase price allocations      

Intangible assets and property, plant,

and equipment      

Other      

Total deferred tax liabilities      

Oset against deferred tax assets      

Net deferred tax liabilities      

Deferred tax assets (+) / liabilities (),

net      

Deferred tax assets for year 2020 has been restated due to adjustments in the fair values of Outotec at the

acquisition date.

Financial review 2021|Notes to the consolidated ﬁnancial statements 43

Basic

In 2020, when Metso Minerals and Outotec were combined, a total of 645,851 thousand new

shares were issued as demerger consideration to Metso’s shareholders. After the share issue,

the number of Metso Outotec shares totals 828,972 thousand.

Basic earnings per share is calculated by dividing the proﬁt attributable to shareholders of

the company by the weighted average number of shares issued and outstanding for the year,

excluding own shares held by the Parent company.

In year 2020 the average number of shares consists of 645,851 thousand shares addressed

to Metso’s shareholders for January–June and the total number of shares for July–December.

Earnings per share

 

Proﬁt attributable to shareholders of the company, EUR million  

Weighted average number of shares issued and outstanding

(inthousands)  

Earnings per share, EUR  

Earnings per share, continuing operations

 

Proﬁt attributable to shareholders of the company, EUR million  

Weighted average number of shares issued and outstanding

(inthousands)  

Earnings per share, continuing operations, EUR  

Diluted

The shares to be potentially issued in the future are treated as outstanding shares when

calculating the diluted earnings per share if they have a dilutive eect. The own shares held

by Metso Outotec are reissued within the terms of the share ownership plan to the key

personnel, if the targets deﬁned in the plan are met. Diluted earnings per share are calculated

by increasing the weighted average number of outstanding shares by the number of shares

that, would be distributed to the beneﬁciaries based on the results achieved, if the conditional

earnings period ended at the end of the ﬁnancial period in question. On December 31,

2021, Metso Outotec held 925,021 own shares to be used as consideration under the share

ownership plans.

Earnings per share, diluted

 

Proﬁt attributable to shareholders of the company, EUR million  

Weighted average number of shares issued and outstanding (in

thousands)  

Adjustment for potential shares distributed (in thousands)  

Weighted average number of diluted shares issued and outstanding

(in thousands)  

Earnings per share, diluted, EUR  

Earnings per share

Financial review 2021|Notes to the consolidated ﬁnancial statements 44

Operational assets

and liabilities

Financial review 2021|Notes to the consolidated ﬁnancial statements 45

Net working capital and capital employed ............. 

Trade receivables ................................. 

Other receivables ................................. 

Inventory ........................................ 

Trade and other payables .......................... 

Provisions........................................ 

Postemployment obligations........................ 

Net working capital and capital employed

Net working capital, balance sheet value

EUR million  

Inventories  

Trade receivables  

Other non-interest-bearing receivables  

Customer contract assets and liabilities., net  

Trade payables  

Advances received  

Other non-interest-bearing liabilities  

Net working capital





Capital employed

EUR million  

Net working capital  

Intangible assets  

Property, plant, and equipment  

Right-of-use assets  

Non-current investments  

Interest-bearing receivables  

Liquid funds  

Tax payables and receivables, net  

Interest payables, net  

Capital employed





Trade receivables

ACCOUNTING POLICYTrade receivables are invoiced receivables from customers related to

Metso Outotec’s ordinary business transactions. General payment terms are typically from 30

days to 90 days, and they are non-interest-bearing receivables. Trade receivables are initially

recognized at recoverable value and subsequently valued at amortized cost. If, exceptionally an

over 360- day payment term was oered to a client, the invoiced amount is discounted to its

fair value.

Metso Outotec may enter into an agreement to sell trade receivables. Trade receivables will

be derecognized when payment has been received and there is certainty that the credit risk

and other risks and rewards have been transferred to a third party.

In measuring expected credit losses, Metso Outotec applies the IFRS 9 simpliﬁed approach,

which uses a lifetime expected loss allowance to be assessed and recognized regularly. Credit

loss risk related to customer contract assets is covered mainly by the advance payments

received from the clients.

Based on an analysis of the previous year’s credit losses by ageing category and nature,

as well as a macroeconomic outlook in the near future, Metso Outotec recognizes a credit

loss allowance from 0.1% to 5% on trade receivables undue or less than 180 days overdue. For

trade receivables more than 180 days overdue, the impairment is assessed individually, but

without any credit guarantee, collateral, or similar assurance on the recoverability, a minimum

credit loss provision of 25% (over 180 days overdue) and 100% (over 360 days overdue) will

be recognized. Trade receivables are written o when there is no reasonable expectation

of recovery. Probability of bankruptcy, other ﬁnancial reorganization, or a similar situation

indicating insolvency of the client triggers a ﬁnal write o.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTEstimates on expected credit losses and credit

loss provisions to be recognized are based on management’s best judgment. The judgment

is based on experience with past years’ credit losses, current economic outlook and client

segment, and location information. Trade receivables are collected actively, and possible

impairment analyzed regularly by the businesses and Metso Outotec legal units, and the

necessary actions to secure receivables are made by management. When a credit loss

provision of a trade receivable is assessed individually, collateral, credit guarantees, ﬁnancial

position of the client, and earlier payment behavior are taken into consideration.

Financial review 2021|Notes to the consolidated ﬁnancial statements 46

EUR million  

Trade receivables  

Trade receivables for sale  

Trade receivables total





Trade receivables classiﬁed as held for sale  

Total





Provision on trade receivables by ageing category

 

EUR million

Trade

receivables

gross

of which

provided

Trade

receivables

gross

of which

provided

Undue    

overdue 1–30 days    

overdue 31–180 days    

overdue 181–360 days    

overdue more than 360 days    

Total, gross

 

 

Total, net  

Realized write-os amounted to EUR 5 million in 2021 (EUR 3 million in 2020).

Provision for impairment of trade receivables

EUR million  

Accumulated provision at beginning of year  

Impact of exchange rates  

Acquisitions  

Impact in income statement  

Other changes  

Accumulated provision at end of year





Other receivables

ACCOUNTING POLICYOther non-interest-bearing receivables are recognized in the balance

sheet at fair value which can be subsequently written down due to impairment. The impairment

is expensed under selling, general and administrative expenses.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTThe group policy is to calculate an impairment

loss based on the best estimate of the amounts that are potentially uncollectable at the

balance sheet date. Metso Outotec management actively monitors the amount of receivables

past due globally and initiates action as necessary.

Non-interest-bearing receivables

 

EUR million

Non

current Current Total

Non

current



Current Total

Derivative ﬁnancial instruments      

Deferred tax assets      

Income tax receivables      

Other receivables

Prepaid expenses and accrued

income      

VAT, payroll tax, and social

charge receivables      

Pension assets      

Other receivables      

Other receivables total

  

  

Non-interest-bearing receivables

total

  

  

Balance sheet for year 2020 has been restated due to adjustments in the fair values of Outotec at the acquisition

date. The adjustments had an eect to non-current deferred tax assets.

Other non-interest-bearing receivables included EUR 14 million in 2021 (EUR 11 million in 2020)

Brazilian tax credits arising from delivery of goods and transfer of services (ICMS) recognized

by local subsidiaries. Of that amount in EUR 2 million in 2021 (EUR 2 million in 2020) was

classiﬁed as long-term.

Financial review 2021|Notes to the consolidated ﬁnancial statements 47

Inventory

ACCOUNTING POLICYInventories are valued at the lower of historical cost calculated or net

realizable value. Costs are measured on a weighted average cost basis and include purchase

costs as well as transportation and processing costs. The costs of ﬁnished goods include direct

materials, wages, and salaries plus employer social contributions, subcontracting and other

direct costs, as well as a portion of production and project administration overheads. Net

realizable value is the estimated amount that can be realized from the sale of the asset in the

normal course of business less costs to sell.

Inventories are shown net of a provision for obsolete and slow-moving inventories. Metso

Outotec’s policy is to maintain a provision for slow-moving and obsolete inventory based on

the best estimate of such amounts at the balance sheet date. An obsolescence provision is

charged to income statement in the period in which the obsolescence is determined. Estimates

are based on a systematic, on-going review and evaluation of inventory balance.

Trade-in equipment received is recorded as inventory at the lower of cost or net realizable

value.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTInventory valuation requires management to make

estimates and judgments particularly relating to obsolescence and expected selling prices in

dierent market conditions. It also entails management’s assessment of the general market

trends in global markets.

EUR million  

Materials and supplies  

Work in progress  

Finished products  

Inventories





For continuing operations, the cost of inventories recognized as expense amounted to EUR

2,974 million in 2021 (EUR 2,331 million in 2020).

Changes in provision for inventory obsolescence

EUR million  

Balance at beginning of year  

Impact of exchange rates  

Additions charged to expense  

Acquisitions  

Used reserve  

Deductions / other additions  

Classiﬁcation as held for sale  

Balance at end of year





Trade and other payables

ACCOUNTING POLICYThe fair values and carrying amounts of trade and other payables are

considered to be the same, due to the short-term maturities. The maturities of the current

non-interest-bearing liabilities rarely exceed six months. The maturities of trade payables are

largely determined by trade practices and individual agreements between Metso Outotec and

its suppliers.

Accrued personnel costs, including holiday pay, are settled in accordance with local laws

and regulations.

 

EUR million

Non

current Current Total

Non

current Current Total

Trade payables      

Derivative ﬁnancial instruments      

Other payables

Accrued interests      

Accrued personnel costs      

Accrued project costs      

VAT, payroll tax, and social

charge payables      

Other payables      

Other payables total

  

  

Balance sheet for year 2020 has been restated due to adjustments in the fair values of Outotec

at the acquisition date. The adjustments have an eect to income tax liabilities, accrued project

costs and VAT, payroll, and social charge payables.

Financial review 2021|Notes to the consolidated ﬁnancial statements 48

Provisions

ACCOUNTING POLICYProvisions are recognized when the Group has a legal or constructive

obligation as a result of a past event, and it is probable that ﬁnancial beneﬁts will be required

to settle the obligation and a reliable estimate of the amount of the obligation can be made.

Provisions, for which settlement is expected to occur more than one year after the initial

recognition, are discounted to their present value and adjusted in subsequent closings for the

time eect.

Warranty and guarantee provisions

Metso Outotec issues various types of contractual product warranties under which it generally

guarantees the performance levels agreed in the sales contract, the performance of products

delivered during an agreed warranty period and services rendered for a certain period or

term. The provision for estimated warranty costs is based on historical realized warranty costs

for deliveries of standard products and services in the past. The typical warranty period is 12

months from the accepted delivery. The adequacy of provisions is assessed periodically on a

case by case basis.

Restructuring and capacity adjustment costs

A provision for restructuring and capacity adjustment costs is recognized only after

management has approved, committed to and started to implement a formal plan. Employee

termination beneﬁts are recognized after the representatives of employees or individual

employees have been informed of the intended measures in detail and the related compen-

sation packages can be reliably measured. The costs included in a provision for capacity

adjustment are those costs that are either incremental or incurred as a direct result of the plan

or as the result of a continuing contractual obligation with no continuing economic beneﬁt

to Metso Outotec or a penalty incurred to cancel the contractual obligation. Restructuring

and capacity adjustment expenses are recognized in either cost of goods sold or in selling,

general and administrative expenses depending on the nature of the restructuring expenses.

Restructuring costs can also include other costs, which are recorded under other operating

income and expenses, net, incurred as a result of the plan, such as asset write-downs.

Environmental remediation costs

Metso Outotec recognizes provisions associated with environmental remediation obligations

when there is a present obligation as a result of past events, an outﬂow of resources is

considered probable, and the obligation can be estimated reliably. Such provisions are

adjusted as further information develops or circumstances change. Recoveries of environ-

mental remediation costs from other parties are recorded as assets when their receipt is

deemed virtually certain.

Provision for loss making projects

A provision for loss making projects is booked when the costs needed to settle the perfor-

mance obligations of the contract exceed the consideration to be received. Such a provision

for the unrecognized portion of the loss is recognized immediately when these conditions

have been met and is revised according to the progress of the project.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTProvisions booked require management to

estimate the future costs needed to settle the obligations and to estimate the possible

outcomes of claims or lawsuits. The outcome depends on future development and events,

so the ﬁnal costs needed and the timing to settle the obligation may dier from the initial

provision estimated.

For larger and long-term delivery projects and sales involving new technology, additional

warranty provisions can be established on a case by case basis to take into account the

potentially increased risk.

Provisions

 

EUR million

Non

current Current Total

Non

current Current Total

Warranty and guarantee provision      

Project loss provision      

Restructuring provision      

Environmental remedial provision      

Other provisions

     

Provisions, total

  

  

Include provisions related to lawsuits and personnel liabilities.

Changes in provisions

2021

EUR million

Warranty

and

guarantee

provisions

Project loss

provisions

Restruc

turing

provisions

Environ

mental

remediation

provisions Total

Carrying value at beginning of year     

Impact of exchange rates     

Addition charged to expense     

Used reserve     

Reversal of reserve / other changes     

Classiﬁcation as held for sale

    

Carrying value at end of year

    

At the time of the Outotec acquisition, balance sheet of Outotec included assets held for sale. In year 2021

the treatment of these assets been speciﬁed, and a signiﬁcant portion of these assets has been transferred to

continuing operations.

Financial review 2021|Notes to the consolidated ﬁnancial statements 49

Postemployment obligations

ACCOUNTING POLICYMetso Outotec has several dierent pension schemes in accordance with

local regulations and practices in countries where it operates. In certain countries, the pension

schemes are deﬁned beneﬁt plans with retirement, disability, death, and other post-retirement

beneﬁts, such as health services, and termination income beneﬁts. The retirement beneﬁts are

usually based on the number of service years and the salary levels of the ﬁnal service years.

Metso Outotec has both deﬁned contribution and deﬁned beneﬁt schemes. The schemes are

generally funded through payments to insurance companies or to trustee-administered funds.

Other arrangements are unfunded with beneﬁts being paid directly by Metso Outotec as

they fall due. All arrangements are subject to local tax and legal restrictions in their respective

jurisdictions.

In the case of deﬁned beneﬁt plans, the liability recognized from the plan is the present

value of the deﬁned beneﬁt obligation as of the balance sheet date less the fair value of

the plan assets. Independent actuaries calculate the deﬁned beneﬁt obligation by applying

the projected unit credit method under. The present value of the deﬁned beneﬁt obligation

is determined by discounting the estimated future cash ﬂows using the interest rates of

high-quality corporate bonds that are denominated in the currency in which the beneﬁts will

be paid and having maturity approximating to the terms of the related pension obligation. The

cost of providing retirement and other post-retirement beneﬁts to personnel is charged to

proﬁt and loss concurrently with the service rendered by personnel. Net interest is recorded

through ﬁnancial income and expenses in the income statement. Actuarial gains and losses

arising from experience adjustments and changes in actuarial assumptions are recognized

through OCI in shareholders’ equity in the period in which they arise. Past service costs, gains

and losses on curtailments or settlements are recognized immediately in the income statement.

The contributions to deﬁned contribution plans and multi-employer and insured plans are

charged to proﬁt and loss concurrently with the payment obligations.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTThe present value of the pension obligations is

based on annual actuarial calculations, which use several assumptions such as the discount

rate and expected return on assets, salary and pension increases and other actuarial factors.

As a result, the liability recorded on Metso Outotec’s balance sheet and cash contributions to

funded arrangements are sensitive to changes. Where the actuarial experience diers from

those assumptions gains and losses result, which are recognized in OCI. Sensitivity analyses

on the present value of the deﬁned beneﬁt obligation have been presented in the tables.

Assets of Metso Outotec’s funded arrangements are managed by external fund managers. The

allocation of assets is reviewed regularly by those responsible for managing Metso Outotec’s

arrangements based on local legislation, professional advice and consultation with Metso

Outotec, based on acceptable risk tolerances.

Metso Outotec’s pension and other post-employment plans

The pension arrangements in Germany, the US, the UK and Canada together represent 85% of

Metso Outotec’s deﬁned beneﬁt obligation and 80% of its pension assets. These arrangements

provide income in retirement which is substantially based on salary and service at or near

retirement.

The German plans are unfunded with beneﬁts paid direct by the company as they fall due.

In the US and Canada, annual valuations are carried out to determine whether cash funding

contributions are required in accordance with local legislation. In the UK, Metso Outotec’s

deﬁned beneﬁt pension arrangement is closed to the future accrual. Plan assets are held by

a separate pension fund and are administered by a board of trustees. Cash contributions are

determined on a triennial basis in accordance with local funding legislation, with the level of

cash payments being agreed between the trustees and Metso Outotec.

Assets of Metso Outotec’s funded arrangements are managed by external fund managers.

The allocation of assets is reviewed regularly by those responsible for managing Metso

Outotec’s arrangements based on local legislation, professional advice and consultation with

Metso Outotec, based on acceptable risk tolerances.

The expected contributions to plans in 2022 are EUR 4 million. Metso Outotec paid

contributions of EUR 8 million to deﬁned beneﬁt plans in 2021.

Amounts recognized in the balance sheet as of December 31

 

EUR million

Pension

beneﬁts

Other post

employment

beneﬁts Total

Pension

beneﬁts

Other post

employment

beneﬁts Total

Present value of funded

obligations      

Fair value of plan assets      

Total

  

  

Present value of

unfunded obligations      

Unrecognized assets      

Total

  

  

Amounts in the balance

sheet

Liabilities      

Assets      

Liabilities classiﬁed as

held for sale      

Net liability

  

  

Financial review 2021|Notes to the consolidated ﬁnancial statements 50

Movements in net liability recognized in the balance sheet (total)

EUR million  

Net liability at beginning of year  

Adjustments due to business combinations  

Reclassiﬁcation  

Net expense recognized in the income statement  

Employer contributions  

Gain () / loss (+) recognized through OCI  

Translation dierences  

Net liability at end of year





Amounts recognized in the income statement

 

EUR million

Pension

beneﬁts

Other post

employment

beneﬁts Total

Pension

beneﬁts

Other post

employment

beneﬁts Total

Employer’s current

service cost      

Net interest on net

surplus (+) / deﬁcit ()      

Settlements      

Gain () / loss (+)

recognized in the

income statement      

Recognition of past

service cost (+) / credit

()      

Administration costs

paid by the scheme      

Expense (+) / income

() recognized in the

income statement

  

  

Amounts recognized through OCI

 

EUR million

Pension

beneﬁts

Other post

employment

beneﬁts Total

Pension

beneﬁts

Other post

employment

beneﬁts Total

Return on plan assets,

excluding amounts

included in interest

expense (+) / income

()      

Actuarial gain () / loss

(+) on liabilities due

to change in ﬁnancial

assumptions      

Actuarial gain () / loss

(+) on liabilities due to

change in demographic

assumptions      

Actuarial gain () / loss

(+) on liabilities due to

experience      

Gain () / loss (+) as

result of asset ceiling      

Total gain () / loss (+)

recognized through OCI

  

  

Financial review 2021|Notes to the consolidated ﬁnancial statements 51

Changes in the value of the deﬁned beneﬁt obligation

 

EUR million

Pension

beneﬁts

Other post

employment

beneﬁts Total

Pension

beneﬁts

Other post

employment

beneﬁts Total

Deﬁned beneﬁt

obligation at beginning

of year      

Other adjustment to

present value      

Employer’s current

service cost      

Interest cost      

Business combinations      

Plan participant

contributions      

Past service cost (+) /

credit ()      

Actuarial gain () / loss

(+) due to change in

ﬁnancial assumptions      

Actuarial gain () / loss

(+) on liabilities due to

change in demographic

assumptions      

Actuarial gain () / loss

(+) due to experience      

Settlements      

Beneﬁts paid from the

arrangement      

Beneﬁts paid direct by

employer      

Translation dierences      

Deﬁned beneﬁt

obligation at end of

year

  

  

Changes in the fair value of the plan assets during the year

 

EUR million

Pension and other

postemployment

beneﬁts total

Fair value of assets at beginning of year  

Interest income on assets  

Return on plan assets, excluding interest income  

Assets distributed on settlements  

Business combinations  

Employer contributions  

Plan participant contributions  

Beneﬁts paid from the arrangements  

Beneﬁts paid direct by employer  

Administration expenses paid from the scheme  

Translation dierences  

Fair value of assets at end of year





Major categories of plan assets as a percentage of total plan assets on December 31

 

Quoted Unquoted Total Quoted Unquoted Total

Equity securities % % % % % %

Bonds % % % % % %

Property % % % % % %

Cash % % % % % %

Insurance contracts % % % % % %

Other % % % % % %

Total

% % %

% % %

As at December 31, 2021, there were no plan assets invested in aliated or property occupied

by aliated companies.

Financial review 2021|Notes to the consolidated ﬁnancial statements 52

Principal actuarial assumptions on December 31, expressed as weighted averages

%  

Beneﬁt obligation

Discount rate % %

Rate of salary increase % %

Rate of pension increase % %

Expense in income statement

Discount rate % %

Rate of salary increase % %

Rate of pension increase % %

The calculated life expectancy of persons covered by deﬁned beneﬁt plans is based on

regularly updated local mortality tables. These are shown in the table below.

Weighted average life expectancy used for the major deﬁned beneﬁt plans

 

Life expectancy at

age of 65 for a male

member, who is currently aged  currently aged  currently aged  currently aged 

Germany    

United States    

United Kingdom    

Canada    

Life expectancy is allowed for in the assessment of the deﬁned beneﬁt obligation using

mortality tables which are generally based on experience within the country in which the

arrangement is located with (in many cases) an allowance made for anticipated future

improvements in longevity.

Sensitivity analyses on present value of deﬁned beneﬁt obligation in the next table presents

the present value of the deﬁned beneﬁt obligation when major assumptions are changed

while others held constant.

Sensitivity analyses

 

% Pension Other Tota l Pension Other Total

Discount rate

Increase of 0.25%      

Decrease of 0.25%      

Salary increase rate

Increase of 0.25%      

Decrease of 0.25%      

Pension increase rate

Increase of 0.25%      

Decrease of 0.25%      

Medical cost trend

Increase of 0.25%      

Decrease of 0.25%      

Life expectancy

Increase of one year      

Decrease of one year      

Weighted average duration of deﬁned beneﬁt obligation

 

In years Pension Other Total Pension Other Tota l

On December 31      

Financial review 2021|Notes to the consolidated ﬁnancial statements 53

Intangible assets

and property plant

and equipment

Financial review 2021|Notes to the consolidated ﬁnancial statements 54

Goodwill and other intangible assets ................. 

Property plant and equipment ...................... 

Rightofuse assets ............................... 

Depreciation and amortization ....................... 

ACCOUNTING POLICY

Goodwill and other intangible assets with an indeﬁnite useful life

Goodwill represents the excess of acquisition costs over the fair value of net identiﬁed

assets acquired and liabilities assumed and the fair values of previously owned interests and

non-controlling interests. Goodwill is allocated to cash generating units (CGUs), which are

the reportable segments Aggregates, Minerals, and Metals. If Metso Outotec reorganizes its

reporting structure, goodwill is reallocated to the cash generating units aected based on their

relative fair values at the time of the reorganization. The carrying value of goodwill is tested

with the CGU’s value in use or the CGU’s fair value less costs of disposal, when appropriate.

Previously recognized impairment losses on goodwill are not reversed.

Other intangible assets with an indeﬁnite useful life, such as brand values, are not

amortized. Currently, such assets are tested for impairment annually as part of the appropriate

CGU tested for impairment. Previous losses on impairment are only reversed to the extent that

the new carrying amount of the assets does not exceed the carrying amount the asset would

have had, if the asset had not been impaired.

Other intangible assets

Other intangible assets with a deﬁnite useful life, mainly trademarks, patents, licenses, IT

software, or acquired order backlog are measured at costs less accumulated amortizations and

impairment losses.

Amortization of intangible assets

Amortization of intangible assets with a deﬁnite useful life is calculated on a straight-line basis

over the useful life of the assets as follows:

Patents and licenses 5–10 years

Computer software 3–5 years

Technology 3–20 years

Customer relationships 3–20 years

Other intangible assets < 1–20 years

The probable useful lives of assets are reviewed annually. If material deviations from

previous estimates arise, the useful lives are reassessed. The carrying value of intangible

assets subject to amortization is reviewed for impairment whenever events or circumstances

indicate that the carrying amount of an asset may not be recoverable. A previously recognized

impairment loss may be reversed if there is a signiﬁcant improvement of the circumstances

having initially caused the impairment, but not to a higher value than the carrying amount, that

would have been recorded had there been no impairment in prior years.

Research and development expenses comprise salaries, administration costs, depreciation,

and amortization of property, plant, and equipment and intangible assets, and they are

mainly recognized as incurred. When material development costs meet certain capitalization

criteria under IAS 38, they are capitalized and amortized during the expected useful life of the

underlying technology.

Goodwill and other intangible assets

2021

EUR million Goodwill

Patents and

licenses

Capitalized

software

Other

intangible

assets

Intangible

assets total

Acquisition cost at beginning of

year     

Translation dierences     

Business disposals     

Capital expenditure     

Reclassiﬁcations     

Other changes     

Acquisition cost at end of year

    

Accumulated depreciation at

beginning of year     

Translation dierences     

Business disposals     

Other changes     

Impairment losses     

Amortization charges for the year,

continuing operations     

Amortization charges for the year,

discontinued operations     

Accumulated depreciation at end of

year

    

Reclassiﬁed to held for sale     

Business disposals, discontinued

operations     

Net book value at end of year

    

Goodwill and other intangible assets

Financial review 2021|Notes to the consolidated ﬁnancial statements 55

2020

EUR million Goodwill

Patents and

licences

Capitalized

software

Other

intangible

assets

Intangible

assets total

Acquisition cost at beginning of

year     

Translation dierences     

Business acquisitions     

Business disposals     

Capital expenditure     

Reclassiﬁcations     

Other changes     

Acquisition cost at end of year     

Accumulated depreciation at

beginning of year     

Translation dierences     

Business acquisitions     

Business disposals     

Other changes     

Impairment losses     

Amortization charges for the year,

continuing operations     

Amortization charges for the year,

discontinued operations     

Accumulated depreciation at end of

year     

Reclassiﬁed to held for sale     

Adjustment     

Net book value at end of year     

Impairment testing

ACCOUNTING POLICYGoodwill and other intangible assets with an indeﬁnite useful life are

tested for impairment annually. The testing of goodwill and other intangible assets with an

indeﬁnite useful life is performed at the cash generating unit level. If the carrying value of

goodwill exceeds the recoverable value, an impairment is recognized in the income statement

under depreciations and amortizations. Impairment losses on goodwill are not reversed.

Currently, Metso Outotec’s management has deﬁned three separate CGUs, Aggregates,

Minerals and Metals, to which goodwill has been allocated.

The recoverable amounts of CGUs are based on value in use calculations, where the

estimated future cash ﬂows of CGUs are discounted to their present value. The cash ﬂows

are derived from the current year’s last-quarter estimate, the following year’s budget, and the

approved strategy for the next four years, beyond which cash ﬂows are calculated using the

terminal value method. The terminal growth rate used is based on management’s judgment

regarding the average long-term growth. Cash ﬂows include only normal maintenance

investments and exclude any potential investments that enhance the CGU’s performance and

acquisitions.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTValue in use calculations are inherently

judgmental and highly susceptible to change from period to period because they require

management to make assumptions about future supply and demand related to its individual

business units, future sales prices, proﬁt margins, and achievable eciency savings over time.

The value of beneﬁts and savings expected from the eciency improvement programs are

inherently subjective. Metso Outotec management estimates sales growth rate and EBITDA

development for the testing period as well as the discount factor used. The present value

of the cash generating units is discounted using the CGU’s weighted average cost of capital

(WACC) calculated by Metso Outotec. WACC calculations include judgments regarding, among

other things, relevant beta factors, peer companies, and capital structure to use.

Metso Outotec performs impairment testing annually, or whenever there is an indication

of impairment. Typical triggering events are material and permanent deterioration in the

global economy or political environment, observed signiﬁcant under-performance relative

to projected future performance, and signiﬁcant changes in Metso Outotec’s strategic

orientations.

Expected useful lives and remaining amortization periods for other intangible assets are

reviewed annually by management. Acquisitions, disposals, and restructuring actions typically

generate a need for the reassessment of the recoverable amounts and remaining useful

lives of the assets. When the other intangible assets are measured at fair value, less costs

of disposal, the selling price, incremental costs, and selling costs need to be estimated by

management.

Upon initial acquisition, Metso Outotec uses readily available market values to determine

the fair values of acquired net assets to be allocated. However, when this is not possible, the

valuation is based on past performance of such an asset and expected future cash generating

capacity, which requires management to make estimates and assumptions of the future

performance and use of these assets. Any change in Metso Outotec’s future business priorities

may aect the recoverable amounts.

Goodwill allocation to cash generating units

EUR million  

Balance at beginning of year  

Translation dierences  

Allocation to discontinued operations  

Acquisitions and disposals  

Adjustment  

Balance at end of year





Outotec’s preliminary acquisition calculation has been adjusted to ﬁnal. Due to adjustments in

the fair values of Outotec at the acquisition date the goodwill increased EUR 67 million in year

Financial review 2021|Notes to the consolidated ﬁnancial statements 56

2021. The balance sheet for year 2020 has been restated. Due to the divestment of Outotec

Turula Oy, the amount of goodwill decreased by EUR 2 million. For more information, please

see note 5.4.

The goodwill from the reverse acquisition of Outotec Group, amounted EUR 584 million,

has been allocated to the Minerals and Metals segments. According to the value in use

calculation, EUR 497 million of goodwill is allocated to the Minerals segment and EUR 85

million to the Metals segment.

The value of other intangible assets with indeﬁnite useful life totaled EUR 8 million (EUR 8

million in 2020), which comprises the brand values in the Minerals segment.

EUR million Minerals Aggregates Metals Tota l

Balance at end of year    

Annual impairment test in 2021

As at December 31, 2021, goodwill totaled EUR 1,124 million. In accordance with the Metso

Outotec reporting structure, goodwill is allocated to the reportable segments, Aggregates,

Minerals, and Metals. The goodwill related to the reverse acquisition of Outotec Group was

allocated to the Minerals and Metals segments. The cost of centralized Group services was

allocated to the CGUs based on their proportional share of sales volume.

Given that the recoverable amounts of each CGU signiﬁcantly exceeded the carrying value

of goodwill and other tested assets, no indication of impairment was found in 2021. The value

in use calculations were derived from estimates, budgets, and strategy ﬁgures reviewed by

Metso Outotec’s management and approved by the Board of Directors.

The key assumptions used in assessing the recoverable amount are the proﬁtability and

growth rate in the estimate period, long-term average growth in the terminal period and

discount rate. The key values used were the following:

% Minerals Aggregates Metals

Sales growth in four-year estimate period % % %

EBITDA % range in four-year estimate period %–% %–% %–%

Growth rate in the terminal period % % %

WACC after tax % % %

WACC before tax % % %

Values assigned to key assumptions reﬂect past experience and the management’s expecta-

tions on the future sales and production volumes, which are based on the current structure

and production capacity of each CGU. The seasonality and current market situation of each

cash generating unit have been considered separately. In addition, data on growth, demand,

and price development, provided by various research institutions, have been utilized. The

growth rate of 2.0% for the terminal period is based on the long-term expectations on the

growth in the Metso Outotec’s market environments, considering the current low interest rate

environment and overall ﬁnancial market situation.

WACC before tax is used as a discount factor in the calculations. It takes into account

the expected return on both debt and equity and has been derived from the WACC on

comparable peer industry betas, capital structure, and tax rates. CGU WACCs are evaluated

annually for testing, and CGU-speciﬁc risk is incorporated through individual beta factors from

the market data of the segment’s peer companies.

Sensitivity analysis

The sensitivity to impairment of the calculations of each cash generating unit was tested in the

following scenarios:

• Scenario 1: increasing WACC by 2.0 percentage points

• Scenario 2: reducing the terminal growth rate from 2.0% to 1.5%

Impact to the value in use of the CGUs in the sensitivity analysis

% WACC increase by  pp Terminal growth from % to %

Minerals % %

Aggregates % %

Metals % %

The sensitivity analysis also includes several cash projections on break-even levels of EBITDA

%, WACC, and sales growth, based on a reasonable change in the future performance of

the CGU. However, the impact on the present value obtained is limited, as long as there is

no permanent weakening expected for the business, which would aect the terminal value.

Based on these sensitivity analyses, the management believes that no reasonably possible

change of the key assumptions used would cause the carrying value of any CGU to exceed its

recoverable amount. In 2021, the sensitivity analysis did not indicate risks of impairment.

Financial review 2021|Notes to the consolidated ﬁnancial statements 57

Property plant and equipment

ACCOUNTING POLICYProperty, plant, and equipment (PPE) are stated at historical cost, less

accumulated depreciation, and write-downs, if any. The property, plant, and equipment of

acquired subsidiaries are measured at their fair value at the acquisition date.

Depreciation is calculated on a straight-line basis over the expected useful lives of the

assets as follows:

Buildings and structures 15–40 years

Machinery and equipment 3–20 years

Land and water areas are not depreciated.

Expected useful lives are reviewed at each balance sheet date and, if they dier signiﬁ-

cantly from previous estimates, the remaining depreciation periods are adjusted accordingly.

Subsequent improvement costs related to an asset are included in the carrying value of

such asset or recognized as a separate asset, as appropriate, only when the future economic

beneﬁts associated with the costs are probable and the related costs can be separated from

normal maintenance costs.

Metso Outotec reviews tangible assets to be held and used by the company for impairment

whenever events and changes in circumstances indicate that the carrying amount of an asset

may not be recoverable. Gains and losses on the disposal of property, plant, and equipment

and possible impairments are recognized in operating income and expenses. A previously

recognized impairment loss may be reversed if there is a signiﬁcant improvement in the

circumstances having initially caused the impairment, however not to a higher value than the

carrying amount that, would have been recorded had there been no impairment in prior years.

Capitalized interests

The interest expenses of self-constructed property, plant, and equipment are capitalized in

Metso Outotec’s ﬁnancial statements. The capitalized interest expense is amortized over the

estimated useful life of the underlying asset.

Government grants

Government grants relating to additions to property, plant, and equipment are deducted from

the acquisition cost of the asset and they reduce the depreciation charge of the related asset.

Other government grants are deferred and recognized as proﬁt concurrently with the costs

they compensate.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTAcquisitions, disposals and restructuring actions

typically generate a need for reassessment of the recoverable values and remaining useful

lives of assets. When property, plant, and equipment are valued at fair value less costs of

disposal, the selling price, incremental costs and selling costs need to be estimated by

management.

Property, plant, and equipment

2021

EUR million

Land and

water areas

Buildings

and

structures

Machinery

and

equipment

Assets

under

construc

tion PPE total

Acquisition cost at beginning of

year     

Translation dierences     

Business disposals     

Capital expenditure     

Reclassiﬁcations     

Divestments and other changes     

Acquisition cost at end of year

    

Accumulated depreciation at

beginning of year     

Translation dierences     

Business disposals     

Divestments and other changes     

Write-downs     

Depreciation charges for the year     

Accumulated depreciation at end of

year

    

Classiﬁcation as held for sale     

Business disposals, discontinued

operations     

Net book value at end of year

    

Financial review 2021|Notes to the consolidated ﬁnancial statements 58

2020

EUR million

Land and

water areas

Buildings

and

structures

Machinery

and

equipment

Assets under

construction PPE total

Acquisition cost at beginning of

year     

Translation dierences     

Business acquisitions     

Capital expenditure     

Reclassiﬁcations     

Other changes     

Acquisition cost at end of year     

Accumulated depreciation at

beginning of year     

Translation dierences     

Business acquisitions     

Other changes     

Impairment losses     

Depreciation charges for the year,

continuing operations     

Depreciation charges for the year,

discontinued operations     

Accumulated depreciation at end of

year     

Classiﬁcation as held for sale     

Net book value at end of year     

Rightofuse assets

ACCOUNTING POLICYMetso Outotec recognizes a right-of-use asset in the balance sheet for

lease agreements which give the right to use the asset during the lease period and the lease

liability based on the lease payment obligation. The right-of-use assets and corresponding

lease liabilities are recognized at present value. Lease liabilities include the following payments:

• ﬁxed payments, less any lease incentives provided by the lessor;

• variable payments that depend on an index or a rate;

• expected payments under residual value guarantees;

• the exercise price of purchase options when exercise is estimated to be reasonably certain;

and

• penalties for terminating the lease if the lease term reﬂects the exercise of a termination

option.

Lease payments are discounted by using the implicit interest rate in the lease to the extent

it can be readily determined. Otherwise the currency speciﬁc incremental borrowing rate is

used as the discount rate. Interest expenses are recognized in the income statement as ﬁnance

expense.

Right-of-use assets are measured at cost. The cost comprises the following:

• lease liability;

• lease payments made at or before the commencement of the lease, less lease incentives

received;

• initial direct costs; and

• estimated dismantling and restoration costs.

Subsequently, right-of-use assets are measured at cost and depreciated over the shorter of

estimated useful life and the lease term. Metso Outotec’s right-of-use assets consist primarily

of operative and oce premises in the category of Buildings, and cars, operative machinery,

and equipment in the category of Machinery and equipment. The depreciations of right-

of-use assets are recognized in the in the income statement in cost of sales and selling and

administrative expenses.

Metso Outotec uses practical expedients provided for leases. Lease payments for leases

of low value assets and short-term leases (shorter than twelve months) are expensed on a

straight-line basis. Low value assets comprise IT equipment and other small oce items.

The lease payments are presented in the cash ﬂow from ﬁnancing activities, and the

interest related to leases are presented in the cash ﬂow from operating activities. Lease

payments related to short-term leases and low-value assets are presented in the cash ﬂow

from operating activities.

Modiﬁcations to lease agreements may result in adjustments to existing right-of-use assets

and lease liabilities. A gain or loss arising from a modiﬁcation, or a termination of a lease

agreement is recognized as other operating income or other operating expenses in the

income statement.

A number of lease contracts include extension and termination options. Such options

have been taken into account when determining the lease term. A period covered by Metso

Financial review 2021|Notes to the consolidated ﬁnancial statements 59

Outotec’s option to extend the lease is included in the lease term if such option is suciently

likely to be exercised. Further, a period covered by Metso Outotec’s option to terminate

the lease is included in the lease term if it is reasonably certain that such option will not be

exercised.

ESTIMATES AND ASSESSMENTS BY MANAGEMENTThe most signiﬁcant management judgment

relates to lease agreements that include extension or early termination options for Metso

Outotec. For these contracts, management needs to assess the probability of exercising such

option, which may signiﬁcantly aect the estimated length of the lease term, and consequently,

the amounts of right-of-use asset and lease liability, as well as the related depreciation and

interest expense. Management judgment is also applied in deﬁning the incremental borrowing

rate used to calculate the present value of the future lease payments.

Amounts recognized in balance sheet

2021

EUR million

Land and

water areas Buildings

Machinery and

equipment

Rightofuse

assets total

Acquisition cost at beginning of year    

Translation dierences    

Business disposals    

Additions    

Derecognition    

Other changes    

Acquisition cost at end of year

   

Accumulated depreciation at beginning of

year    

Translation dierences    

Business disposals    

Accumulated depreciations for derecognized

contracts    

Depreciation charges for the year    

Other changes    

Accumulated depreciation at end of year

   

Classiﬁcation as held for sale    

Business disposals, discontinued operations    

Net book value at end of year

   

2020

EUR million

Land and

water areas Buildings

Machinery

and

equipment

Right

ofuse

assets total

Acquisition cost at beginning of year    

Translation dierences    

Acquisitions    

Additions    

Derecognition    

Acquisition cost at end of year    

Accumulated depreciation at beginning of year    

Translation dierences    

Accumulated depreciations for derecognized

contracts    

Depreciation charges for the year, continuing

operations    

Depreciation charges for the year, discontinued

operations    

Accumulated depreciation at end of year    

Classiﬁcation as held for sale    

Net book value at end of year    

Amounts recognized in proﬁt and loss

EUR million  

Operating proﬁt

Depreciation expense on right-of-use assets  

Rental expense relating to leases of low-value assets  

Rental expense relating to leases of short-term assets  

Finance expenses

Interest expense on lease liabilities  

Total amount recognized in proﬁt and loss





The total cash outﬂow for leases including short-term leases and leases of low-value assets in

2021 was EUR 48 million (EUR 42 million in 2020).

A maturity analysis of lease liabilities is presented in note 4.5.

Financial review 2021|Notes to the consolidated ﬁnancial statements 60

Depreciation and amortization

Depreciation and amortization by asset class

EUR million  

Intangible assets

Intangible assets from acquisitions  

Other intangible assets  

Property, plant, and equipment

Buildings and structures  

Machinery and equipment  

Right-of-use assets

Land areas  

Buildings and structures  

Machinery and equipment  

Total





Depreciation and amortization by function

EUR million  

Cost of goods sold  

Selling, general, and administrative expenses  

Total





The depreciation and amortizations of discontinued operations was totaled EUR 5 million in

year 2021 (EUR 2 million in 2020).

Financial review 2021|Notes to the consolidated ﬁnancial statements 61

Capital structure and

financial instruments

Financial review 2021|Notes to the consolidated ﬁnancial statements 62

Financial risk management .......................... 

Financial assets and liabilities by category ............. 

Liquid funds ..................................... 

Equity ........................................... 

Borrowings and lease liabilities ...................... 

Interestbearing net debt reconciliation ............... 

Contingent liabilities and other commitments ........... 

Derivative instruments .............................. 

Financial risk management

As a global company, Metso Outotec is exposed to a variety of business and ﬁnancial risks.

Financial risks are managed centrally by the Group Treasury under annually reviewed written

policies approved by the Board of Directors. Treasury operations are monitored by the

Treasury Management Team chaired by the CFO. Group Treasury identiﬁes, evaluates, and

hedges ﬁnancial risks in close cooperation with the operating units. Group Treasury functions

as counterparty to the operating units, manages centrally external funding, and is responsible

for the management of ﬁnancial assets and appropriate hedging measures. The objective of

ﬁnancial risk management is to minimize potential adverse eects on Metso Outotec’s ﬁnancial

performance.

Sensitivity analysis

Sensitivity analysis ﬁgures presented in connection with dierent ﬁnancial risks are based

on the risk exposures at the balance sheet date. The sensitivity is calculated by assuming

a change in one of the risk factors of a ﬁnancial instrument, such as interest or currency. It

is not likely that the future volatility of a risk factor will develop in accordance with the test

assumptions and that only one factor would be impacted.

When calculating the sensitivity, Metso Outotec has chosen to use market conventions in

assuming a one percentage point (100 basis points) variation in interest rates, and a 10 percent

change in foreign exchange rates because this provides better comparability from one period

to another and information on the volatility to users of ﬁnancial statements. Metso Outotec is

aware that such assumptions may not be realistic when compared to past volatility and they

are not intended to reﬂect the future. Metso Outotec has chosen not to use past volatility as

this could mislead the users of ﬁnancial statements to assume the analysis reﬂects manage-

ment’s view on future volatility of the ﬁnancial instruments.

Liquidity and refinancing risk and capital structure management

Liquidity or reﬁnancing risk arises when a company is not able to arrange funding at terms

and conditions corresponding to its creditworthiness. Sucient cash, short-term investments,

and committed and uncommitted credit facilities are maintained to protect short-term liquidity.

Diversiﬁcation of funding among dierent markets and an adequate number of ﬁnancial

institutions is used to safeguard the availability of liquidity at all times. Group Treasury monitors

bank account structures, cash balances and forecasts of the operating units, and manages the

utilization of the consolidated cash resources.

The liquidity position of Metso Outotec remained good supported by the healthy operative

cash ﬂow, maturity structure of the funding, and available back up credit facilities. Liquid funds,

consisting of cash and cash equivalents, amounted to EUR 473million (EUR 537 million in 2020),

and there were no deposits or securities with a maturity more than three months

(EUR 0million in 2020).

In addition, Metso Outotec has a committed and undrawn syndicated EUR 600 million

revolving credit facility with a maturity in 2026. At the end of the period the facility was

undrawn. The company also has a EUR 600 million Finnish commercial paper program, which

was fully unutilized at the end of the period.

Metso Outotec made several early repayments to bank loans using its liquid funds in 2021.

During the ﬁrst quarter, the company made an early repayment of a EUR 100 million term loan,

which would have matured in 2022. During the second quarter, the company cancelled two

bilateral revolving credit facilities totaling EUR 90 million, which would have matured in 2022. A

term loan of EUR 150 million, which would have matured in 2022, was repaid in three EUR 50

million lots in the second, third and fourth quarters. In December the company made an early

repayment of EUR 100 million of the EUR 150 million loan, which will mature in July 2022.

After the reporting period in January 2022, the company made an early repayment of the

remaining EUR 50 million of the originally EUR 150 million loan, which would have matured in

July 2022.

During 2021 sustainability targets were incorporated in Metso Outotec’s EUR 600 million

Syndicated Revolving Credit Facility. The sustainability targets are related to the Group’s own

CO emissions, emissions from its logistics and its suppliers having Science-Based emission

targets. The development of these targets will be measured annually, and the cost of the

facility will depend on the achievement of these targets.

In December Metso Outotec signed a sustainability linked loan agreement with Nordic

Investment Bank for EUR 100 million with a maturity of 8 years. The loan is committed and

remained undrawn at the end of the period. The loan includes the same sustainability targets

as the Syndicated Revolving Credit Facility.

Metso Outotec’s reﬁnancing risk is managed by balancing the proportion of short-term and

long-term debt as well as the average remaining maturity of long-term debt. The tables below

analyze the repayments and interests on Metso Outotec’s liabilities by the remaining maturities

from the balance sheet date to the contractual maturity date. The net interest payments of

interest-rate swaps hedging long-term loans are included in the long-term debt repayment

ﬁgures.

Maturities of debts

Dec   Dec  

EUR million < year – years > years < year – years > years

Long-term debt

Repayments      

Interests      

Other liabilities      

Short-term debt

Repayments      

Interests      

Trade payables      

Other liabilities      

Debts, total

  

  

Financial review 2021|Notes to the consolidated ﬁnancial statements 63

Detailed information on balance sheet items is presented in other notes to the consolidated

ﬁnancial statements. Capital structure is assessed regularly by the Board of Directors and

managed operationally by Group Treasury.

Capital structure management in Metso Outotec comprises both equity and interest-

bearing debt. As of December 31, 2021, the equity attributable to shareholders was EUR

2,250 million (EUR 2,037 million in 2020), and the amount of interest-bearing debt excluding

lease liabilities was EUR 819 million (EUR 1,206 million in 2020). Metso Outotec has a target to

maintain an investment-grade credit rating.

Moody’s Investor Service has assigned a ’Baa2’ long-term issuer rating with stable outlook

and S&P Global Ratings a ’BBB’ long-term issuer credit rating with stable outlook to Metso

Outotec.

There are no prepayment covenants in Metso Outotec’s ﬁnancial contracts that would be

triggered by changes in the credit rating. Covenants included in some ﬁnancing agreements

refer to a combination of a certain credit rating level and Metso Outotec’s capital structure.

Metso Outotec is in compliance with all covenants and other terms of its debt instruments.

Interest rate risk

Interest rate risk arises when changes in market interest rates and interest margins inﬂuence

ﬁnance costs, returns on ﬁnancial investments and valuation of interest-bearing balance sheet

items. Interest rate risks are managed by balancing the ratio between ﬁxed and ﬂoating

interest rates and by managing the duration of debt and investment portfolios. Additionally,

Metso Outotec may use derivative instruments, such as forward rate agreements, swaps,

options, and futures contracts, to mitigate the risks arising from interest-bearing assets

and liabilities. The interest rate risk is managed and controlled by the Group Treasury and

measured using sensitivity analysis and duration of long-term debt. The duration of long-term

debt was 2.2 years as of December 31, 2021 (2.1 years in 2020).

At the end of 2021, the balance sheet items exposed to interest rate risk were

interest-bearing assets of EUR 482 million (EUR 544 million in 2020), and interest-bearing debt

excluding lease liabilities amounted to EUR 819 million (EUR 1,206 million in 2020).

The basis for the interest rate sensitivity analysis is an aggregate group-level interest

exposure, composed of interest-bearing assets, interest-bearing debt, and ﬁnancial derivatives,

such as interest rate swaps and options, which are used to hedge the underlying exposures.

For all interest-bearing current debt and assets to be ﬁxed during the next 12 months, a one

percentage point move upwards or downwards in interest rates with all other variables held

constant would have an eect on Metso Outotec’s net interest expenses, net of taxes, of

EUR –/+1.0 million (EUR –/+1.0 million in 2020).

For ﬁnancial assets valued at fair value, a one percentage point change upwards or

downwards in all interest rates with all other variables held constant would have the following

eects, net of taxes, in the income statement and equity:

EUR million  

Eect in income statement + + 

Eect in equity + + 

The eect in the income statement comprises the changes in the fair value on the ﬁnancial

instruments, which are measured at fair value through proﬁt and loss. The eect in equity is

comprised of the changes in the fair value on the ﬁnancial instruments, which are measured at

fair value through other comprehensive income, such as derivatives under hedge accounting.

Foreign exchange risk

Metso Outotec operates globally and is exposed to foreign exchange risk in several currencies,

although the geographical diversity of operations decreases the signiﬁcance of any individual

currency. About 80 percent of Metso Outotec’s sales originate from outside the euro zone;

the main currencies being euro, US dollar, Australian dollar, Chilean peso, Chinese yuan and

Canadian dollar.

Transaction exposure

Foreign exchange transaction exposure arises when an operating unit has commercial or

ﬁnancial transactions and payments in other than its own functional currency and when related

cash inﬂow and outﬂow amounts are not equal or concurrent.

In accordance with the Metso Outotec Treasury Policy, operating units are required to

hedge in full the foreign currency exposures on balance sheet and other ﬁrm commitments.

Future cash ﬂows denominated in a currency other than the functional currency of the unit

are hedged with internal foreign exchange contracts with the Group Treasury for periods that

usually do not exceed two years. Operating units also do some hedging directly with banks

in countries where regulation does not allow group internal cross-border foreign exchange

hedging contracts.

Group Treasury monitors the net position of each currency and decides to what extent a

currency position is to be closed. Group Treasury is, however, responsible for entering into

an external forward transaction whenever an operating unit applies hedge accounting. Metso

Outotec Treasury Policy deﬁnes upper limits on the open currency exposures managed by the

Group Treasury; limits have been calculated on the basis of their potential proﬁt impact. To

manage the foreign currency exposure, Group Treasury may use forward exchange contracts

and foreign exchange options.

Total amount of foreign currency exposures

EUR million Dec   Dec  

Operational items  

Financial items  

Hedges  

Total exposure





This aggregate group-level currency exposure is the basis for the sensitivity analysis of foreign

exchange risk. This exposure, net of respective hedges, is composed of all assets and liabilities

denominated in foreign currencies, projected cash ﬂows for unrecognized ﬁrm commitments,

both short- and long-term sales and purchase contracts, and anticipated operational cash

ﬂows to the extent their realization has been deemed highly probable and therefore hedged.

Financial review 2021|Notes to the consolidated ﬁnancial statements 64

This analysis excludes net foreign currency investments in subsidiaries together with instruments

hedging these investments.

If the euro were to appreciate or depreciate ten percent against all other currencies, the

impact on cash ﬂows, net of taxes, derived from the year-end net exposure as deﬁned above,

would be EUR +/1.1 million (EUR /+2.3 million in 2020). Transaction exposure is spread to

about 50 currencies and as of December 31, 2021, the biggest open exposures were in the

United Arab Emirates dirham and Mexican peso (approximately 30 percent).

A sensitivity analysis of ﬁnancial instruments as required by IFRS 7, excludes the following

items: projected cash ﬂows for unrecognized ﬁrm commitments, advance payments, both short-

and long-term purchase contracts, and anticipated operational cash ﬂows. The next table

presents the eects, net of taxes, of a /+10 percent change in EUR foreign exchange rates:

 

EUR million USD CNH Other Total Total

Eects in

Income statement + + + + +

Equity + + + + +

The eect in equity is the fair value change in derivatives contracts qualifying as cash ﬂow

hedges for unrecognized ﬁrm commitments. The eect in the income statement is the fair

value change for all other ﬁnancial instruments exposed to foreign exchange risk including

derivatives, which qualify as cash ﬂow hedges, to the extent the underlying sales transaction,

recognized over time, has been recognized as revenue.

Translation or equity exposure

Foreign exchange translation exposure arises when the equity of a subsidiary is denominated

in currency other than the functional currency of the Parent company. The major translation

exposures are in US dollar, Canadian dollar, Chinese yuan, Swedish krona and Australian

dollar, which altogether comprise approximately 63 percent of the total equity exposure. Metso

Outotec is currently not hedging any equity exposure.

Credit and counterparty risk

Credit or counterparty risk is deﬁned as the possibility of a customer or a ﬁnancial coun-

terparty not fulﬁlling its commitments towards Metso Outotec. The operating units of Metso

Outotec are primarily responsible for credit risks pertaining to sales and procurement activities.

The units assess the credit quality of their customers, by taking into account their ﬁnancial

position, past experience, and other relevant factors. When appropriate, advance payments,

letters of credit, and third-party guarantees, or credit insurance are used to mitigate credit

risks. Group Treasury provides centralized services related to customer ﬁnancing and seeks

to ensure that the principles of the Treasury Policy are adhered to with respect to terms of

payment and required collateral. Metso Outotec has no signiﬁcant concentrations of credit

risks.

The maximum credit risk equals the carrying value of trade and loan receivables. The credit

quality is evaluated both on the basis of aging of the trade receivables and on the basis of

customer speciﬁc analysis. The aging structure of trade receivables is presented in note 2.2.

Counterparty risk arises also from ﬁnancial transactions agreed upon with banks, ﬁnancial

institutions, and corporates. The risk is managed by careful selection of banks and other

counterparties, by counterparty-speciﬁc limits determined in the Treasury Policy, and netting

agreements, such as ISDA (Master agreement of International Swaps and Derivatives Associ-

ation). The compliance with counterparty limits is regularly monitored.

Credit risk exposure relates to the carrying value of ﬁnancial assets valued at amortized cost,

such as trade receivables, interest-bearing receivables, other receivables, deposits and security

investments, and cash and cash equivalents, and customer contract assets.

Impairment on cash on hand, bank accounts, deposits, and interest-bearing investments

is assessed regularly, but deemed minor because of their high investment grade and short

duration. Group Treasury makes a ﬁnancial analysis of corporate counterparties regularly. In

addition, the investments are constantly monitored by Group Treasury, and Metso Outotec

does not expect any future credit losses from these investments.

For trade receivables and customer contract assets, Metso Outotec applies the IFRS 9

simpliﬁed approach to measuring expected credit losses, which uses a lifetime expected loss

allowance to be assessed and recognized regularly, see note 2.2.

Fair value estimation

For those ﬁnancial assets and liabilities that have been recognized at fair value in the balance

sheet, the following measurement hierarchy and valuation methods have been applied:

Level 1 Unadjusted quoted prices in active markets at the balance sheet date. The market

prices are readily and regularly available from an exchange, dealer, broker, market

information service system, pricing service, or regulatory agency. The quoted market

price used for ﬁnancial assets is the current bid price. Level 1 ﬁnancial instruments

include fund investments classiﬁed as fair value through proﬁt and loss.

Level 2 The fair value of ﬁnancial instruments in Level 2 is determined using valuation

techniques. These techniques utilize observable market data readily and regularly

available from an exchange, dealer, broker, market information service system, pricing

service, or regulatory agency. Level 2 ﬁnancial instruments include:

• Over-the-counter derivatives classiﬁed as ﬁnancial assets/liabilities at fair value

through proﬁt and loss or qualiﬁed for hedge accounting

• Debt securities classiﬁed as ﬁnancial instruments at fair value through proﬁt and

loss

• Fixed-rate debt under fair value hedge accounting

Level 3 A ﬁnancial instrument is categorized into Level 3 if the calculation of the fair value

cannot be based on observable market data. Metso Outotec had no such instruments

in 2021 or in 2020.

Financial review 2021|Notes to the consolidated ﬁnancial statements 65

Metso Outotec’s ﬁnancial assets and liabilities measured at fair value

Dec   Dec  

EUR million Level Level Level Level Level Level

Assets

Financial assets at fair value through proﬁt and loss

Derivatives not under hedge accounting      

Financial assets at fair value through other

comprehensive income

Derivatives under hedge accounting      

Total

  

  

Liabilities

Financial liabilities at fair value through proﬁt and loss

Derivatives not under hedge accounting      

Financial liabilities at fair value through other

comprehensive income

Derivatives under hedge accounting      

Total

  

  

Financial assets and liabilities by category

ACCOUNTING POLICYUnder IFRS 9, Metso Outotec classiﬁes ﬁnancial assets and liabilities in

measurement categories according to contractual terms of the cash ﬂows and Metso Outotec’s

business model to manage the investment at the inception. Reclassiﬁcation of the categories

will be made only if the business model for managing those assets changes. Financial assets

and liabilities are classiﬁed as non-current items when the remaining maturity exceeds 12

months and as current items when the remaining maturity is 12 months or less. Financial assets

and liabilities are classiﬁed as follows:

At amortized cost

Financial assets

Financial assets valued at amortized cost are investments in debt instruments or receivables,

that are held to maturity and for the collection of contractual cash ﬂows, where those cash

ﬂows are solely payments of principal and/or interest. These are recognized at fair value, less

transaction costs, and subsequently measured at amortized cost using the eective interest

method. Interest income is recognized in ﬁnancial income in the income statement. Financial

assets at amortized cost include deposits, commercial papers, interest-bearing loans and

receivables, trade receivables, and non-interest-bearing receivables. Impairment is assessed

regularly, and when the carrying value exceeds the recoverable value of discounted cash ﬂows,

the appropriate impairment is recognized in the income statement.

For trade receivables, Metso Outotec applies the IFRS 9 simpliﬁed method, which requires

expected lifetime losses to be recognized from the initial recognition of the receivables. See

more in Note 2.2 Trade receivables.

Financial liabilities

Issued bonds and withdrawn loan facilities from ﬁnancial institutions as well as trade and

other liabilities are valued at fair value, net transaction costs, and subsequently measured at

amortized cost using the eective interest method. Trade and other receivables are

non-interest-bearing short-term unpaid debts.

The dierence between the debt amount, net transaction costs of bonds and loans from

ﬁnancial institutions and the redemption amount is recognized in the income statement as an

interest expense over the period of the borrowings using the eective interest method. Fees

paid on the establishment of loan facilities are recognized in the income statement as other

ﬁnance expenses over the period of the facility, or, if withdrawal of the loan is probable, as

part of the transaction cost.

At fair value through other comprehensive income (FVOCI)

Financial assets

Financial assets valued at fair value through other comprehensive income are debt instruments

or receivables, which are held for collection of contractual cash ﬂows or held for selling the

assets, and where contractual cash ﬂows are solely payments of principal and/or interest.

Interest income is recognized in the income statement using the eective interest method.

Change in fair value is recognized in other comprehensive income (OCI). At derecognition,

the cumulative previously booked gains and losses in OCI are released from equity to the

income statement. Metso Outotec includes in this measurement category derivatives under

hedge accounting, trade receivables for sale, and security investments with a maturity of less

than three months. Impairment is assessed regularly, and when the carrying value exceeds

the recoverable value of discounted cash ﬂows, the appropriate impairment is recognized in

income statement.

At fair value through proﬁt and loss (FVPL)

Financial assets

Financial assets valued at fair value through proﬁt and loss are equity investments, investments

in funds, and derivatives not under hedge accounting. Change in fair value and gain or loss

at derecognition will be recognized in the income statement. The change in fair value includes

the valuation of impairment risk as well.

The fair value of listed equity shares or investments in funds is the quoted market price on

the balance sheet date. Unlisted shares are valued at cost less impairment, if any.

Financial liabilities

Fixed-rate debts covered by fair value hedge accounting and derivatives not under hedge

accounting are included in this measurement category. Change in fair value and gains or

losses at derecognition are recognized in the income statement.

Financial review 2021|Notes to the consolidated ﬁnancial statements 66

2021

EUR million

At fair value

through

proﬁt and

loss

At fair value

through

other

compre

hensive

income

amortized

cost

Carrying

value Fair value

Non-current ﬁnancial assets

Equity investments     

Loan receivables     

Derivative ﬁnancial instruments     

Other receivables     

Total

    

Current ﬁnancial assets

Trade receivables     

Trade receivables, for sale     

Loan receivables     

Derivative ﬁnancial instruments     

Deposits and securities, maturity

three months or less     

Cash on hand and in bank accounts     

Total

    

Non-current liabilities

Bonds

    

Lease liabilities     

Other non-current debt     

Derivative ﬁnancial instruments     

Other liabilities     

Total

    

Current liabilities

Current portion of non-current debt     

Lease liabilities     

Loans from ﬁnancial institutions     

Commercial papers     

Trade payables     

Derivative ﬁnancial instruments     

Total

    

The bonds have been measured at amortized cost, adjusted by the fair value to the extent of the hedged risk.

2020

EUR million

At fair value

through

proﬁt and

loss

At fair value

through

other

compre

hensive

income

amortized

cost

Carrying

value Fair value

Non-current ﬁnancial assets

Equity investments     

Loan receivables     

Derivative ﬁnancial instruments     

Other receivables     

Total     

Current ﬁnancial assets

Trade receivables     

Trade receivables, for sale     

Loan receivables     

Derivative ﬁnancial instruments     

Deposits and securities, maturity

three months or less     

Cash on hand and in bank accounts     

Total     

Non-current liabilities

Bonds

    

Lease liabilities     

Other non-current debt     

Derivative ﬁnancial instruments     

Other liabilities     

Total     

Current liabilities

Current portion of non-current debt     

Lease liabilities     

Loans from ﬁnancial institutions     

Commercial papers     

Trade payables     

Derivative ﬁnancial instruments     

Total     

For more information on derivative ﬁnancial instruments, see note 4.8.

Financial assets and liabilities by category

Financial review 2021|Notes to the consolidated ﬁnancial statements 67

ACCOUNTING POLICYCash and cash equivalents consist of cash on hand and bank accounts,

deposits, and interest-bearing investments, that can be easily converted into a known amount

of cash within a period of three months or less, as well as bond fund investments, with the

same risk proﬁle.

Cash on hand, bank accounts, deposits, and interest-bearing investments are measured at

amortized cost. The bond fund investments are measured at fair value through proﬁt and loss

accounts.

Impairment on cash on hand, bank accounts, deposits, and interest-bearing investments

is assessed regularly, but deemed minor because of their high investment grade and short

duration. Impairment risk of bond fund investments is included in the change in fair value of

them.

EUR million  

Deposits and securities, maturity more than three months  

Cash and cash equivalents

Deposits and securities, maturity three months or less  

Cash on hand and bank accounts  

Cash and cash equivalents total





Liquid funds total





Average returns for deposits and securities

%  

With maturity three months or less % %

Equity

ACCOUNTING POLICY

Issue of new shares and own shares

Transaction costs directly attributable to the issue of new shares or options are shown net of

their tax eect in equity as a deduction from the proceeds.

Own shares held by the Parent company valued at the historical acquisition price are deducted

from equity. Should such shares be subsequently sold or reissued, the consideration received, net

of any directly attributable transaction costs and related income tax, is recorded in equity.

Translation dierences

The translation dierences arising from subsidiary net investments and non-current subsidiary

loans without agreed settlement dates are recognized through Other Comprehensive Income

Liquid funds

(OCI) to cumulative translation adjustments under equity. When Metso Outotec hedges the net

investment of its foreign subsidiaries with foreign currency loans and with ﬁnancial derivatives,

the translation dierence is adjusted by the currency eect of the hedging instruments which

has been recorded, net of taxes, through OCI in equity. When a foreign entity is disposed of,

the respective accumulated translation dierence, including the eect from qualifying hedging

instruments, is reversed through OCI and recognized in the consolidated statements of income

as part of the gain or loss on the sale. If the equity of a subsidiary denominated in a foreign

currency is reduced by a return of capital, the translation dierence relating to the reduction is

reversed through OCI and recognized in the consolidated statements of income.

Dividends

Dividends proposed by the Board of Directors are not recognized in the ﬁnancial statements

until they have been approved by the shareholders in the Annual General Meeting.

Share capital and number of shares

The partial demerger of Metso Corporation and the combination of Metso’s Minerals business

and Outotec was completed on June 30, 2020. Metso shareholders received 4.3 newly

issued shares in Outotec for each share owned in Metso on the record date. Thus, a total of

645,850,948 new Outotec shares were issued as demerger consideration to Metso’s share-

holders based on their shareholdings in Metso on June 30, 2020. After the transaction was

completed, the total number of Metso Outotec shares was 828,972,440 and its share capital

was EUR 107,186,442.52.

Metso Outotec Corporation’s registered share capital, which is fully paid, was

EUR 107,186,442.52 as of December 31, 2021, and December 31, 2020.

 

Number of outstanding shares at beginning of year  

Shares granted from share ownership plans  

New shares related to the reverse acquisition  

Number of outstanding shares at end of year





Own shares held by the Parent company  

Total number of shares at end of year



As of December 31, 2021, the acquisition price of 925,021 own shares held by the Parent

company was EUR 8,832,733.61 and was recognized in treasury stock.

Dividends

The Board of Directors proposes that a dividend of EUR 0.24 per share be paid based on the

balance sheet to be adopted for the ﬁnancial year, which ended December 31, 2021. Insofar

as the dividend to be paid exceeds the net proﬁt for the year ended December 31, 2021, the

remaining amount will be paid from retained earnings from previous years. These ﬁnancial

statements do not reﬂect this dividend payable of EUR 199 million.

Financial review 2021|Notes to the consolidated ﬁnancial statements 68

Fair value and other reserves

The hedge reserve includes the fair value movements of derivative ﬁnancial instruments which

qualify as cash ﬂow hedges.

The fair value reserve includes the change in fair values of trade receivables for sale.

Share-based payments are presented within the fair value reserve.

The legal reserve consists of restricted equity, which has been transferred from

distributable funds under the Articles of Association, local company act, or by a decision of

the shareholders.

The other reserves consist of the distributable fund and the invested non-restricted equity

fund held by the Parent company.

Changes in fair value and other reserves

2021

EUR million

Treasury

stock

Hedge

reserve

Fair

value

reserve

Legal

reserve

Other

reserves Total

At beginning of year      

Cash ﬂow hedges

Fair value gains (+) / losses (), net of tax      

Transferred to proﬁt and loss, net of tax

Sales      

Cost of goods sold / administrative

expenses      

Share-based payments, net of tax      

At end of year

     

2020

EUR million

Treasury

stock

Hedge

reserve

Fair value

reserve

Legal

reserve

Other

reserves Total

At beginning of year      

Cash ﬂow hedges

Fair value gains (+) / losses (), net of tax      

Transferred to proﬁt and loss, net of tax

Sales      

Interest income / expenses      

Share-based payments, net of tax      

Demerger      

Reverse acquisition      

At end of year      

Cumulative translation adjustments included in shareholders’ equity

EUR million  

Cumulative translation adjustment at beginning of year  

Currency translation, change  

Cumulative translation adjustment at end of year





Borrowings and lease liabilities

ACCOUNTING POLICYLong-term debt is initially recognized at fair value, net of transaction

costs incurred, and subsequently measured at amortized cost using the eective interest

method. The dierence between the debt amount recognized and the redemption amount is

recognized in the income statement as an interest expense over the period of the borrowings.

The fair value changes in borrowings covered by fair value hedge are, in respect of hedged

risk, recognized through proﬁt and loss. A portion of long-term debt is classiﬁed as short-term

debt when the settlement of the liability is due within 12 months from the balance sheet date.

Borrowings are derecognized only if the contractual obligation is discharged, cancelled, or

expired.

Fees paid on the establishment of loan facilities are recognized in the income statement as

other ﬁnance expenses over the period of the facility, or, if withdrawal of the loan is probable,

as part of the transaction cost. Transaction costs arising from modiﬁcation to debt instruments

are included in the carrying value of the debt and amortized using the eective interest

method over the remaining period of the modiﬁed liability, provided that the new conditions

obtained through the modiﬁcation do not substantially dier from those of the original debt.

Modiﬁcation gains or losses are recognized in the income statement at the time of

non-substantial modiﬁcation.

 

EUR million

Carrying

values Fair values

Carrying

values Fair values

Long-term interest-bearing debt

Bonds    

Loans from ﬁnancial institutions    

Total borrowings

 

 

Lease liabilities    

Total long-term interest-bearing debt

 

 

Short-term borrowings

Bonds, current portion    

Loans from ﬁnancial institutions, current

portion    

Loans from ﬁnancial institutions    

Commercial papers    

Total short-term borrowings

 

 

Lease liabilities    

Total short-term interest-bearing debt

 

 

Total interest-bearing debt

 

 

Financial review 2021|Notes to the consolidated ﬁnancial statements 69

Bonds

2021

EUR million

Nominal

interest rate

Eective

interest rate

Outstanding

original loan

amount

Outstanding

carrying

value

Public bond 2017–2024 % %  

Public bond 2020–2028 % %  

Private placements 2022 % %  

Bonds, total

 

2020

EUR million

Nominal

interest rate

Eective

interest rate

Outstanding

original loan

amount

Outstanding

carrying

value

Public bond 2017–2024 % %  

Public bond 2020–2028 % %  

Private placements 2022 % %  

Bonds, total  

Metso Outotec has a Euro Medium Term Note Program (EMTN) of EUR 2 billion, under which

EUR 687 million at carrying value was outstanding at the end of 2021 (EUR 689 million in 2020).

EUR 587 million (EUR 589 million) of the outstanding amount was public bonds and EUR 100

million (EUR 100 million) private placements.

The average interest rate of total loans and derivatives was 1.38% (1.21%) on December 31,

2021. The duration of medium and long-term interest-bearing debt was 2.2 years (2.1 years) and

the average maturity 3.3 years (3.7 years) on December 31, 2021.

Short-term loans from ﬁnancial institutions consist of bank loans withdrawn by Metso

Outotec subsidiaries to fund local operations. The subsidiary loans are Indian rupee denom-

inated. In addition, there were no commercial papers at the end of 2021 (60 million euros in

2020). The weighted average interest rate applicable to the short-term borrowing on December

31, 2021, was 4.58% (0.8% in 2020). In 2022, interest amounting to EUR 0.4 million is expected to

be paid concurrently with respective principals on the short-term debt presented above.

Metso Outotec had committed and undrawn syndicated EUR 600 million revolving credit

facility with a maturity in 2026. Metso Outotec also has a EUR 600 million Finnish commercial

paper program, which was fully unutilized at the end of the period.

Contractual maturities of interest-bearing debt

2021

EUR million Borrowings Repayments Interest

Lease



liabilities

2022    

2023    

2024    

2025    

2026    

Later    

Total

   

Future lease payments at nominal value.

2020

EUR million Borrowings Repayments Interest

Lease



liabilities

2021    

2022    

2023    

2024    

2025    

Later    

Total    

Future lease payments at nominal value.

The maturities of derivative ﬁnancial instruments are presented in note 4.8.

Financial review 2021|Notes to the consolidated ﬁnancial statements 70

Interestbearing net debt reconciliation

Net interest-bearing liabilities

EUR million  

Borrowings, non-current

 

Lease liabilities  

Borrowings, current  

Loan receivables  

Liquid funds  

Net interest-bearing liabilities





Including current portion of non-current liabilities EUR 150 million in 2021 (EUR 0 million in 2020).

Changes in net interest-bearing liabilities

2021

EUR million

Balance at

beginning

of year

Cash

ﬂows Disposals

Trans

lation

dier

ences

Other

noncash

move

ments

Classiﬁ

cation as

held for

sale

Balance

at end of

year

Borrowings,

non-current       

Lease liabilities       

Borrowings, current       

Loan receivables       

Liquid funds       

Net interest-bearing

liabilities

      

2020

EUR million

Balance at

beginning

of year

Cash

ﬂows

Acquisi

tions

Trans lation

dier ences

Other

noncash

move

ments

Classiﬁ

cation as

held for

sale

Balance

at end of

year

Borrowings,

non-current       

Lease liabilities       

Borrowings, current       

Loan receivables       

Liquid funds       

Net interest-bearing

liabilities       

Contingent liabilities and other commitments

ACCOUNTING POLICYGuarantees have been given for obligations arising in the ordinary

course of business of Metso Outotec Group companies. Guarantees have been given by

ﬁnancial institutions or by Metso Outotec Corporation on behalf of Group companies. These

guarantees have typically been given to secure a customer’s advance payments or to secure

commercial contractual obligations, or given as counter guarantees to banks, that have given

commercial guarantees to a Group company.

The repurchase commitments represent engagements whereby Metso Outotec agrees to

purchase back equipment sold to customer. The conditions triggering the buy-back obligation

are speciﬁc to each sales contract.

EUR million  

Guarantees

External guarantees given by Parent and Group companies  

Other commitments

Repurchase commitments  

Other contingencies  

Total





Financial review 2021|Notes to the consolidated ﬁnancial statements 71

ACCOUNTING POLICYDerivatives are initially recognized in the balance sheet at fair value

and subsequently measured at their fair value at each balance sheet date. Derivatives are

designated at inception either as hedges of ﬁrm commitments or forecasted transactions (cash

ﬂow hedge) or as hedges of ﬁxed-rate debt (fair value hedge), or as hedges of net investment

in a foreign operation (net investment hedge), or as derivatives at fair value through proﬁt and

loss that do not meet the hedge accounting criteria.

In hedge accounting, Metso Outotec documents at inception the relationship between the

hedging instruments and the hedged items in accordance with its risk management strategy

and objectives. Metso Outotec also tests the eectiveness of the hedge relationships at hedge

inception, and quarterly, both prospectively and retrospectively.

Derivatives are classiﬁed as non-current assets or liabilities when the remaining maturities

exceed 12 months and as current assets or liabilities when the remaining maturities are less

than 12 months.

Cash ﬂow hedge

Metso Outotec applies cash ﬂow hedge accounting to certain interest rate swaps, foreign

currency forward contracts and to electricity forwards.

Metso Outotec designates only the currency component of the foreign currency forward

contracts as the hedging instrument to hedge foreign currency-denominated ﬁrm commit-

ments. The interest component is recognized under other operating income and expenses,

net. The gain or loss relating to the eective portion of the currency forward contracts is

recognized in the income statement concurrently with the underlying in the same line item.

The eective portion of foreign currency forwards hedging sales and purchases is recognized

in the sales and the cost of goods sold, respectively. The gain or loss relating to the eective

portion of interest rate swaps hedging variable rate borrowings is reversed from the hedge

reserve through other comprehensive income (OCI) to the income statement within ﬁnancial

items concurrently with the recognition of the underlying liability. Both at hedge inception and

at each balance sheet date, an assessment is performed to ensure the continued eectiveness

of the designated component of the derivatives in osetting changes in the fair values of the

cash ﬂows of hedged items.

The eective portion of the derivatives is recognized through OCI in the hedge reserve

under equity and reversed through OCI to be recorded through proﬁt and loss concurrently

with the underlying transaction being hedged. The gain or loss relating to the ineective

portion of the derivatives is reported under other operating income or expenses, net or

under ﬁnancial items when contracted to hedge variable rate borrowings. Should a hedged

transaction no longer be expected to occur, any cumulative gain or loss previously recognized

under equity is reversed through OCI to proﬁt and loss.

Fair value hedge

Metso Outotec applies fair value hedge accounting to certain ﬁxed-rate loans. The change

in fair value of the interest rate swap hedging the loan is recognized through proﬁt and loss

concurrently with the change in value of the underlying. Both at inception and quarterly, the

eectiveness of the derivatives is tested by comparing their change in fair value against those

of the underlying instruments.

Derivatives at fair value through proﬁt and loss

Certain derivative instruments do not qualify for hedge accounting. These instruments, which

have been contracted to mitigate risks arising from operating and ﬁnancing activities, comprise

foreign exchange forward contracts, currency and interest rate options and interest rate swaps.

Changes in the fair value of interest rate swaps are recognized in interest expenses.

Changes in the fair value of foreign exchange forward contracts are mainly recognized in other

operating income and expenses. However, when the foreign exchange forwards have been

contracted to mitigate the exchange rate risks arising from foreign currency-denominated cash

and from ﬁnancial instruments used for cash management, the changes in fair value of the

derivatives are recognized in ﬁnancial income and expenses. Changes in the fair value of other

derivative instruments, such as commodity instruments, are recognized in other operating

income and expenses.

Fair value estimation of derivative instruments

The fair value of the foreign currency forward contracts is determined using forward exchange

market rates at the balance sheet date. The fair value of the interest rate swaps is calculated as

the present value of the estimated future cash ﬂows based on observable yield curves. The fair

value of options is determined using the Black-Scholes valuation model.

Notional amounts and fair values of derivative ﬁnancial instruments on December 31

2021

EUR million

Notional

amount

Fair value

assets

Fair value

liabilities

Fair value

net

Forward exchange contracts

   

Interest rate swaps    

Total    

2020

EUR million

Notional

amount

Fair value

assets

Fair value

liabilities

Fair value

net

Forward exchange contracts

   

Interest rate swaps    

Total    

Some 39 percent and 32 percent of the notional amount at the end of 2021 and 2021, respectively, qualiﬁed for

cash ﬂow hedge accounting.

The notional amounts indicate the volumes in the use of derivatives, but do not indicate the

exposure to risk.

Derivative instruments

Financial review 2021|Notes to the consolidated ﬁnancial statements 72

Derivative ﬁnancial instruments recognized in the balance sheet at the end of year

 

EUR million Assets Liabilities Assets Liabilities

Interest rate swaps – fair value hedges    

Interest rate swaps – non-qualifying hedges    

Interest rate swaps total

 

 

Forward exchange contracts – cash ﬂow

hedges    

Forward exchange contracts –

non-qualifying hedges    

Forward exchange contracts total

 

 

Derivatives total

 

 

In 2021 and 2020, there was no ineectiveness related to the cash ﬂow hedges. As at

December 31, 2021, the ﬁxed interest rates of swaps varied from -0.55 percent to 1.01 percent.

Maturities of ﬁnancial derivatives on (expressed as notional amounts)

December 31, 2021

EUR million    



and later

Forward exchange contracts     

Interest rate swaps     

Notional and carrying amounts of ﬁnancial derivatives applying hedge accounting at end

of year

2021

EUR million

Notional

amount

Fair value

assets

Fair value

liabilities

Fair value

net

Forward exchange contracts    

Interest rate swaps    

Total

   

2020

EUR million

Notional

amount

Fair value

assets

Fair value

liabilities

Fair value

net

Forward exchange contracts    

Interest rate swaps    

Total    

Forward exchange contracts hedge commercial cash ﬂows of projects applying hedge

accounting. The hedge ratio is 1:1. 86% of hedged cash ﬂows mature in year 2022, 14% in year

2023.

Impact of cash ﬂow hedge in the statement of ﬁnancial position

2021

EUR million Notional amount

Hedging gain  loss

recognized in OCI

net of tax

Amount reclassiﬁed

from OCI to PL

Cost of hedging

recognized in OCI

   

Metso Outotec applies fair value hedge accounting to the bonds maturing in 2024 and 2028.

The hedge accounted total notional value is EUR 250 million (EUR 250 million in 2020). The

terms of the interest rate swap match the terms of the ﬁxed rate bonds (maturity date, interest

ﬁxing and payments dates). Fair values of cash ﬂows of interest rate swap and bond are

compared when measuring hedge accounting eectiveness. Credit margin is added to the

discount curve of the bond.

Bonds applying fair value hedge accounting as at December 31, 2021

Notional

amount of

loan EUR

million Hedge ratio

Maturity date

of loan

Fair value of

loan EUR

million

Notional

amount of

interest rate

swap

Maturity date

of interest rate

swap

Fair value of

interest rate

swap EUR

million

 % June     June   

 % May     May   

Financial review 2021|Notes to the consolidated ﬁnancial statements 73

Consolidation

Financial review 2021|Notes to the consolidated ﬁnancial statements 74

Principles of consolidation .......................... 

Subsidiaries ...................................... 

Associated companies joint ventures and

related party transactions .......................... 

Acquisitions and business disposals .................. 

Discontinued operations ............................ 

New accounting standards .......................... 

Exchange rates used ............................... 

Principles of consolidation

Subsidiaries

The consolidated ﬁnancial statements include the ﬁnancial statements of the Parent company

and each of those companies over which Metso Outotec exercises control. Control is achieved

when Metso Outotec is exposed, or has rights, to variable returns from the investee and has

the ability to aect those returns through its power over the investee. The companies acquired

during the ﬁnancial period have been consolidated from the date Metso Outotec acquired

control. Subsidiaries sold or distributed to the owners have been included up to their date of

disposal.

All intercompany transactions, balances, and gains or losses on transactions between

subsidiaries are eliminated as part of the consolidation process. Non-controlling interests are

presented in the consolidated balance sheet within equity, separate from equity attributable to

shareholders. Non-controlling interests are separately disclosed in the consolidated statement

of income.

Acquisitions of businesses are accounted for using the acquisition method. The purchase

consideration of an acquisition is measured at fair value over the assets given up, shares

issued, or liabilities incurred or assumed at the date of acquisition. For each acquisition, the

non-controlling interest in the acquiree, if any, can be recognized either at fair value or at

the non-controlling interest’s proportionate share of the acquiree’s net assets. The excess

acquisition price over the fair value of net assets acquired is recognized as goodwill (see also

intangible assets). If the purchase consideration is less than the fair value of the Group’s share

of the net assets acquired, the dierence is recognized directly through proﬁt and loss.

When Metso Outotec ceases to have control, any retained interest in equity is re-measured

to its fair value at the date when control is lost, with the change in carrying amount recognized

in proﬁt or loss. The fair value is the initial carrying amount for the purposes of subsequently

accounting for the retained interest as an associate, joint venture, or ﬁnancial asset. In addition,

any amounts previously recognized in other comprehensive income in respect of that entity is

accounted for as if the Group had directly disposed of the related assets or liabilities.

Non-controlling interest

Transactions with non-controlling interests are regarded as transactions with equity owners. In

the case of purchases from non-controlling interests, the dierence between any consideration

paid and the relevant share of the carrying value of net assets acquired in the subsidiary is

recorded in shareholders’ equity. Gains or losses on disposal to non-controlling interests are

also recorded directly in shareholders’ equity.

Non-current assets or disposal group held-for-sale

Metso Outotec classiﬁes a non-current asset or disposal group as held for sale if its carrying

amount will be recovered principally through a sale transaction rather than through continuing

use. These assets are valued at the lower of its carrying value and fair value, less costs to sell,

and assets subject to depreciation or amortization are no longer amortized. Assets related

to non-current assets, or a disposal group classiﬁed as held-for-sale are disclosed separately

from other assets, but ﬁnancial statements for prior periods are not reclassiﬁed.

Foreign currency translation

The ﬁnancial statements are presented in euros, which is the Parent company’s functional

currency and Metso Outotec’s presentation currency.

Transactions in foreign currencies are recorded at the rates of exchange prevailing at

the date of the transaction. At the end of the reporting period, unsettled foreign currency

transaction balances are valued at the rates of exchange prevailing at the balance sheet date.

Trade-related foreign currency exchange gains and losses are recorded in other operating

income and expenses, unless the foreign currency-denominated transactions are subject to

hedge accounting, in which case the related exchange gains and losses are recorded in the

same line item as the hedged transaction. Foreign exchange gains and losses associated with

ﬁnancing are entered as a net amount under ﬁnancial income and expenses.

The statement of income of a subsidiary with a functional currency dierent from the

presentation currency is translated into euros at the average month end exchange rate for

the ﬁnancial year, and the balance sheet is translated at the exchange rate in eect on the

balance sheet date. This exchange rate dierence is recorded through other comprehensive

income (OCI) within cumulative translation adjustments under equity.

The translation dierences arising from subsidiary net investments and long-term subsidiary

loans without agreed settlement dates are recognized through OCI within cumulative

translation adjustments under equity. When Metso Outotec hedges the net investment of

its foreign subsidiaries with foreign currency loans and ﬁnancial derivatives, the translation

dierence is adjusted by the currency eect of hedging instruments that has been recorded,

net of taxes, through OCI under equity. When a foreign entity is disposed of, the respective

accumulated translation dierence, including the eect from qualifying hedging instruments, is

reversed through OCI and recognized in the consolidated statement of income as part of the

gain or loss on the sale. If the equity of a foreign currency-denominated subsidiary is reduced

by reimbursement of invested funds, the translation dierence relating to the reduction is

reversed through OCI and recognized in the consolidated statement of income.

Net investment hedge

Metso Outotec may hedge its net foreign investments in certain currencies to reduce the eect

of exchange rate ﬂuctuations. The hedging instruments are mainly foreign currency loans and

foreign currency forward contracts. Both realized and unrealized exchange gains and losses

measured on these instruments are recorded, net of taxes, through OCI in a separate compo-

nent of equity against the translation dierences arising from consolidation to the extent these

hedges are eective. The interest portion of derivatives qualifying as hedges of net investment

is recognized under ﬁnancial income and expenses.

Financial review 2021|Notes to the consolidated ﬁnancial statements 75

Country Company name

Ownership

December 



Algeria Metso Algerie EURL %

Argentina Metso Outotec Argentina SA %

Australia Brian Investments Pty Ltd %

Metso Outotec Australia Ltd %

Outotec Ausmelt Pty Ltd %

Outotec Pty. Ltd. %

Scanalyse Holding Pty Ltd %

Austria Metso Outotec Austria GmbH %

Brazil Metso Outotec Brazil Indústria e Comércio Ltda %

Outotec Tecnologia Brazil Ltda %

Bulgaria Metso Outotec Bulgaria EOOD %

Canada Metso Outotec Canada Inc. %

McCloskey International Limited %

Chile Metso Outotec Industrial Services SpA %

Metso Outotec Chile SpA %

Outotec Servicios Industriales Ltda. %

China Metso Outotec New Material Technology (Shanghai) Co. Ltd %

Metso Outotec Heavy Industries (Quzhou) Co. Ltd %

Metso Outotec Heavy Industries (Tianjin) Co. Ltd %

Metso Outotec International Trade (Tianjin) Co. Ltd %

Metso Outotec Machinery Heavy Industries (Suzhou) Co. Ltd %

Shaoguan City Shaorui Heavy Industries Co. Ltd %

SISUPER Machinery Heavy Industry (Suzhou) Co Ltd %

Czech Republic Metso Outotec Czech Republic s.r.o. %

Ecuador Metso Outotec-Technology (Ecuador) S.A. %

Egypt Metso Outotec Egypt Company LLC %

Finland International Project Services Ltd. Oy %

Metso Outotec Finland Oy %

Metso Outotec (Ceramics) Oy %

Outotec International Holdings Oy %

Rauma Oy %

France Metso Outotec France SAS %

Germany Metso Outotec Germany GmbH %

Outotec Deutschland GmbH %

Outotec GmbH & Co KG %

Outotec Holding GmbH %

Ghana Metso Outotec Ghana Ltd %

Outotec (Ghana) Limited %

India Metso Outotec India Private Ltd %

Outotec India Private Ltd. %

Country Company name

Ownership

December 



Indonesia PT Metso Outotec Indonesia

%

PT. Outotec Technology Solutions %

Iran Outotec Iranian Minerals and Metals Processing %

Italy Metso Outotec Italy Srl %

Japan Metso Japan Co. Ltd %

Kazakhstan Metso (Kazakhstan) LLP %

Metso Outotec (Kazakhstan) LLP %

Lithuania Metso Outotec Global Business Services UAB %

Metso Outotec Lithuania UAB %

Macedonia Metso Outotec Dooel Skopje %

Malaysia Metso Outotec Malaysia Sdn Bhd %

Marocco Metso Outotec Morocco LLC %

Mexico Metso Outotec Mexico SA de CV %

Mongolia Metso Outotec Mongolia LLC %

Namibia Outotec Namibia (Pty.) Ltd %

New Caledonia Outotec (New Caledonia), Sarl %

Netherlands Metsotec NL BV %

Metso Outotec (Netherlands) B.V. %

Metso Outotec B.V. %

Norway Metso Outotec Norway A/S %

Panama Metso Central America SA %

Outotec (Panama) S.A. %

Papua New Guinea Metso PNG Limited %

Peru Metso Outotec Perú SA %

Poland Metso Outotec Poland Sp. z o.o. %

Portugal Metso Outotec Portugal, Lda %

Qatar Outotec Trading & Contracting WLL %

Russia Lindemann LLC %

OOO Metso Outotec %

Romania Metso Outotec Romania S.R.L. %

Saudi Arabia Metso Outotec Saudi Arabia LLC %

Outotec Technology Saudi LLC %

Serbia Metso Outotec d.o.o. Beograd %

Singapore Metso Outotec Asia Paciﬁc Pte Ltd %

South Africa Metso Outotec South Africa Pty Ltd %

Metso South Africa Sales Pty Ltd %

Outotec Africa Holdings (Pty) Ltd %

Outotec Biomin (Pty) Ltd %

Spain Metso Outotec Espana SA %

Outotec (Spain) S.L. %

Subsidiaries

Has been 100% consolidated

Financial review 2021|Notes to the consolidated ﬁnancial statements 76

Country Company name

Ownership

December 



Sweden AB P. J. Jonsson och Söner %

Larox AB %

Metso Outotec Sweden AB %

Thailand Metso Outotec (Thailand) Limited %

Turkey Metso Outotec Maden Teknolojileri Anonim Sirketi %

United Arab Emirates Metso Outotec DMCC %

Outotec Engineering RAK LLC

%

Outotec Middle East Industrial Projects Consultancy LLC

%

United Kingdom McCloskey International Ltd %

Metso Outotec Captive Insurance Limited %

Metso Outotec UK Ltd %

Outotec (UK) Limited %

United States Metso McCloskey USA LLC %

Metso Outotec USA Inc. %

Outotec USA Inc. %

Vietnam Metso Vietnam Co. Ltd %

Zambia Metso Zambia Ltd %

Outotec (Zambia) Limited %

Has been 100% consolidated

Associated companies joint ventures

and related party transactions

ACCOUNTING POLICYThe equity method of accounting is used for investments in associated

companies in which the investment provides Metso Outotec the ability to exercise signiﬁcant

inﬂuence over the operating and ﬁnancial policies of the investee company. Such inﬂuence

is presumed to exist for investments in companies in which Metso Outotec’s direct or indirect

shareholding is between 20 and 50 percent of the voting rights or if Metso Outotec is able to

exercise signiﬁcant inﬂuence. Investments in associated companies are initially recognized at

cost after which Metso Outotec’s share of their post-acquisition retained proﬁts and losses is

included as part of investments in associated companies in the consolidated balance sheets.

Under the equity method, the share of proﬁts and losses of associated companies and

joint ventures is presented separately in the consolidated statements of income.

A joint arrangement is an arrangement in which two or more parties have joint control.

Within Metso Outotec, all the joint arrangements are joint ventures. Investments in joint

ventures in which Metso Outotec has the power to jointly govern the ﬁnancial and operating

activities of the investee company are accounted for using the equity method. Investments in

joint ventures in which Metso Outotec has control over the ﬁnancial and operating activities of

the investee company are fully consolidated and a non-controlling interest is recognized.

Associated companies and joint ventures

 

EUR million Ownership

Carrying

value Ownership

Carrying

value

Liugong Metso Construction Equipment (Shanghai)

Co. Ltd %  % 

Sefate Capital (Pty) Limited   % 

Eneﬁt Outotec Technology Oü %  % 

GreenExergy AB   % 

Sidvin Outotec Engineering Private Ltd %  % 

Total





Financial review 2021|Notes to the consolidated ﬁnancial statements 77

Movements in the carrying value of investments in associated companies and joint ventures

EUR million  

Investments in associated companies and joint ventures

Acquisition cost at beginning of year  

New subsidiaries  

Divestments  

Acquisition cost at end of year





Equity adjustments in investments in associated companies and joint

ventures

Equity adjustments at beginning of year  

New subsidiaries  

Share of results  

Translation dierences  

Equity adjustments at end of year





Carrying value at end of year





Metso Outotec’s share of the assets and liabilities, sales and proﬁt of associated companies

and joint ventures, that have been accounted for using the equity method

EUR million  

Assets  

Liabilities  

Sales  

Proﬁt  

Related party transactions

Transactions carried out and related balances with associated companies and joint ventures

EUR million  

Sales  

Purchases  

Receivables  

Payables  

Acquisitions and business disposals

Acquisitions in 2021

Metso Outotec made no business acquisitions in 2021.

Acquisitions in 2020

The completion of Metso’s partial demerger was registered with the Finnish Trade Register

on June 30, 2020, and the name of the combined company was changed to Metso Outotec

Corporation. The Extraordinary General Meetings of Metso and Outotec approved the

demerger and combination on October 29, 2019. All regulatory approvals for the combination

were received by June 18, 2020. It was originally announced on July 4, 2019, that Metso’s

Minerals business and Outotec will be combined through a partial demerger of Metso

Corporation.

Metso shareholders received 4.3 newly issued shares in Outotec for each share owned

in Metso on the record date. Thus, a total of 645,850,948 new Outotec shares were issued as

demerger consideration to Metso’s shareholders based on their shareholdings in Metso on

June 30, 2020. After the transaction was completed, the total number of Metso Outotec shares

was 828,972,440 and its share capital was EUR 107,186,442.52.

Metso Outotec expected to achieve material cost and revenue synergies. The cost synergies

were expected to be realized from operations, with the balance from optimization of supply

chain and procurement savings. The highly complementary product and service portfolio and

the combined global footprint are expected to generate multiple cross-selling opportunities,

leading to revenue synergies.

The partial demerger of Metso Corporation and combination of Metso’s Minerals business

and Outotec was completed on June 30, 2020. In the consolidated ﬁnancial statements

according to IFRS this transaction was treated as a reverse acquisition, where Metso Minerals

was the accounting acquirer and Outotec the accounting acquiree. The acquisition of Outotec

has been accounted for in the consolidated ﬁnancial statements as a business combination

using the acquisition method. Outotec has been consolidated from the acquisition date June

30, 2020, onwards to Metso Minerals.

Consideration transferred

The consideration transferred amounted to EUR 899 million and was measured using the

market price of the Outotec share (EUR 4.91) as of June 30, 2020, and the number of Outotec

shares outstanding (183.1 million) before the completion of the transaction.

Recognized amounts of identiﬁable assets acquired and liabilities assumed

Outotec’s net assets were identiﬁed and recognized at fair value as of the acquisition date

on June 30, 2020. Based on new information about facts and circumstances at the acquisition

date measurement period adjustments have been made on deferred tax assets on prior year

timing dierences EUR 16 million, other liabilities 13 million, right-of-use assets EUR 3 million,

current liabilities EUR 6 million, increases in provisions related to discontinued operations EUR

Financial review 2021|Notes to the consolidated ﬁnancial statements 78

61 million compared to the original fair value calculation, and other minor items. Due to the

adjustments in far values of Outotec at acquisition date, the value of goodwill increased EUR

89 million of which EUR 67 million in year 2021. The following table summarizes the fair values

of assets and liabilities assumed.

Final assets and liabilities recognized as a result of the acquisition

EUR million Fair value

Intangible assets 

Property, plant, and equipment 

Right-of-use assets 

Deferred tax assets 

Other non-current assets 

Inventory 

Trade receivables 

Customer contract assets 

Income tax receivables 

Other receivables 

Liquid funds 

Assets 

Non-current interest-bearing liabilities 

Deferred tax liability 

Other non-current liabilities 

Current interest bearing liabilities 

Trade payables 

Customer contract liabilities 

Accrued income taxes 

Other liabilities 

Liabilities 

Net liabilities, held for sale 

Net identiﬁable assets acquired at fair value 

Goodwill 

Purchase consideration 

The acquired Outotec business was consolidated into the Minerals and Metals segments and

contributed sales of EUR 534 million to Metso Outotec for the period from July 1, 2020, to

December 31, 2020. The company’s sales in the ﬁscal year that ended on December 31, 2019,

were EUR 1,210 million. The company employed 3,877 people.

The identiﬁed intangible assets relate to technology, customer relationships, Outotec’s

trademark, and order backlog. Fair values for the intangible assets have been determined

using appropriate valuation methods including multi-period excess earnings method (MEEM)

for customer relationships and order backlog, and Relief from royalty method (Rfr) for

technology and Outotec’s trademark. The amortization period for these assets varies from 0.5

years to 20 years. Goodwill is attributable to market share, future products and technologies,

geographical presence synergies, and workforce. Goodwill will not be deductible for tax

purposes. The fair value adjustments of acquired Outotec assets and liabilities as well the

goodwill have been allocated to the Minerals and Metals segments.

Fair value adjustments of the identiﬁable assets

Fair value

adjustments

Amortization  depreciation

EUR million Periods – 

Customer-related intangible assets  years   

Marketing-related intangible assets  years   

Technology-related intangible assets  years   

Order backlog  year   

Total intangible assets   

Property, plant, and equipment  years   

Fair value adjustments total   

The amount of the non-controlling interest in Outotec recognized at the acquisition date

was EUR 1 million and was measured based on a proportionate share of the value of net

identiﬁable assets acquired.

IFRS-based acquisition costs of EUR 26 million recognized by Metso Outotec and Metso

Minerals during 2020 (EUR 12 million during the ﬁnancial year of 2019) are expensed and

included in administrative expenses in the income statement and in operating cash ﬂow in the

statement of cash ﬂows. Outotec recognized EUR 33 million of transaction costs before the

date of business combination June 30, 2020.

According to pro forma ﬁnancial information on the combination, Group sales would have

been EUR 3,896 million and operating proﬁt EUR 253 million, if the combination had taken

place at the beginning of the year.

Other acquisitions in 2020

On August 3, 2020, Metso Outotec acquired a 100% share of the Australian company Brian

Investments Pty Ltd, a fastener and wear monitoring technology provider. The acquisition

extends Metso Outotec’s wear lining portfolio and capabilities. The acquired business was

consolidated into the Minerals segment and contributed sales of EUR 5 million to Metso

Outotec for the period from August 3, 2020, to December 31, 2020. The company’s ﬁscal year

sales are about EUR 10 million. The company employed about 30 people.

Financial review 2021|Notes to the consolidated ﬁnancial statements 79

Assets and liabilities recognized as a result of the acquisitions

EUR million Brian Investments Pty Ltd

Fixed assets 

Inventory 

Receivables 

Liquid funds 

Liabilities 

Net identiﬁable assets acquired at fair value 

Goodwill 

Purchase consideration 

Goodwill is attributable to personnel knowhow and synergies. Goodwill is not deductible for

tax purposes. The initial calculation of goodwill generated is based on the result of acquired

companies, adjusted by changes in accounting principles and eects from the fair value

adjustment of acquired assets and related tax adjustments.

Net cash ﬂow impact of the acquisitions

EUR million

Brian Investments

Pty Ltd

McCloskey

International Ltd Total 

Cash consideration paid   

Cash and cash equivalents acquired   

Net cash ﬂow for the year   

Contingent consideration   

Cash considerations, total   

Acquisition costs of EUR 0.2 million related to the acquisition of Brian Investments Pty Ltd are

expensed and included in administrative expenses in the income statement and in operating

cash ﬂow in the statement of cash ﬂows.

Contingent consideration of the McCloskey acquisition was revaluated and EUR 4 million of

the purchase price debt was recognized as other income.

Business disposals in 2021

On October 1, 2021, Metso Outotec completed the divestment of Outotec Turula Oy to the

Lithuanian company UAB Arginta Engineering. The divested business is a manufacturer of

equipment and components used in mineral processing and metals reﬁning industries. As

part of the transaction approximately 120 employees transferred from Metso Outotec to UAB

Arginta Engineering. The transaction did not have impact on Metso Outotec’s ﬁnancial result.

Net cash ﬂow impact of the disposal

EUR million 

Assets 

Liabilities 

Net assets of disposed business 

Consideration received in cash 

Net assets of disposed business 

Result on disposal 

Consideration received in cash 

Cash and cash equivalents sold 

Net cash inﬂow on disposal 

Discontinued operations

ACCOUNTING POLICYDiscontinued operations is a component of an entity that either has been

disposed of or is classiﬁed as held for sale, and represents a separate major line of business

or geographical area of operations, is part of a single coordinated plan to dispose of a

separate major line of business or geographical area of operations, or is a subsidiary acquired

exclusively with a view to resale. The result from discontinued operations is shown separately in

the consolidated statement of income, and the comparative ﬁgures are restated accordingly.

Non-current assets and assets and liabilities related to discontinued operations are

classiﬁed as held for sale if their carrying amounts are expected to be recovered primarily

through sale rather than through continuing use. Classiﬁcation as held for sale requires that

the following criteria are met: the sale is highly probable, the asset is available for immediate

sale in its present condition – subject to usual and customary terms, the management is

committed to the sale, and the sale is expected to be completed within one year from the

date of classiﬁcation.

Prior to classiﬁcation as held for sale, the assets or assets and liabilities related to a

disposal group in question are measured according to the respective IFRS standards. From

the date of classiﬁcation, non-current assets held for sale are measured at the lower of the

carrying amount and the fair value, less costs to sell, and the recognition of depreciation and

amortization is discontinued. Non-current assets held for sale are presented in the statement

of ﬁnancial position separately from other items. The comparative ﬁgures for statement of

ﬁnancial position are not restated.

Financial review 2021|Notes to the consolidated ﬁnancial statements 80

Recycling business

On October 28, 2020, Metso Outotec announced its decision to divest its Recycling business.

The Recycling business sells products and services for metal and waste recycling. The

business has around 300 employees and its main locations are Horsens, Denmark; Düsseldorf,

Germany; and San Antonio, Texas.

The business to be divested has been classiﬁed as discontinued operations, including the

transfer of assets held for sale and liabilities directly attributable to them on separate lines

in the balance sheet. The ﬁgures in the income statement have been adjusted to show the

discontinued operations separately from continuing operations.

On December 1, 2021, Metso Outotec completed the divestment of its waste recycling

business to Ahlström Capital.

On December 31, 2021, Metso Outotec signed an agreement to divest its Metal Recycling

business line to an aliate of Mimir, an investment company based in Stockholm, Sweden. The

closing of the transaction is expected to take place during the ﬁrst half of 2022.

Aluminium and Waste-to-energy business

At the date of the Outotec acquisition, June 30, 2020, the Aluminium and Waste-to-energy

businesses were disclosed as discontinued operations, as they are also in the balance sheet

of Metso Outotec on December 31, 2020. The ﬁgures in the income statement have been

adjusted to show the discontinued operations separately from continuing operations.

The Aluminium business to be divested includes green anode plants, rod shops and certain

casthouse technologies as well as related service operations. On April 6, 2021, Metso Outotec

completed the divested of its aluminium business to REEL International.

The Waste-to-energy business to be divested comprises of biomass, wood waste and

various other fuel plants, including the related service operations. This divestment is estimated

to be implemented during 2022.

Result of the discontinued operations

EUR million  

Sales  

Cost of goods sold  

Sales, general and administrative expenses  

Other income and expenses, net  

Operating proﬁt (loss)





Finance income and expenses, net  

Income taxes  

Result for the period





Gain from business disposals  

Total result of period, discontinued operations





Business disposals, Waste Recycling and Aluminium

EUR million 

Goodwill 

Other non-current assets 

Inventory 

Trade and other receivables 

Liquid funds 

Interest-bearing liabilities 

Non-interest-bearing liabilities 

Accrued income taxes 

Net assets of disposed businesses



Consideration received in cash 

Net assets of disposed businesses 

Gain on disposed businesses



Cost of disposals 

Gain on disposed businesses, net 

Consideration received in cash 

Cash and cash equivalents sold 

Net cash inﬂow on disposal



Balance sheet of the discontinued operations

EUR million  

Non-current assets  

Inventories  

Trade and other receivables  

Cash and cash equivalents  

Total assets





Non-current liabilities  

Current liabilities  

Total liabilities





The balance sheet items of discontinued operations are presented in fair value. The balance

sheet in 2021 includes Metal Recycling and Waste-to-energy businesses. The ﬁgures for the

comparison period also include the balance sheet items of the divested businesses.

Financial review 2021|Notes to the consolidated ﬁnancial statements 81

New accounting standards

New and amended standards effective in 2021

The following new or revised IFRSs have been adopted from January 1, 2021, in these consoli-

dated ﬁnancial statements. Their adoption has not had any material impact on the disclosures

or on the amounts reported in these ﬁnancial statements.

Interest Rate Benchmark Reform – Phase 2

On August 2020, the IASB published Interest rate Benchmark Reform – Phase 2 (Amendments

to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16). Phase 2 amendments relate to issues that might

aect ﬁnancial reporting after the reform of an interest rate benchmark, including its replace-

ment with alternative benchmark rate.

Amendments to IFRS 16 Leases – Covid-19-Related Rent Concession beyond June 30, 2021

In March 2021, the Board amended the conditions of the practical expedient in IFRS 16 that

provides relief to lessees from applying the IFRS 16 guidance on lease modiﬁcations to rent

concessions arising as a direct consequence of the Covid-19 pandemic.

IASB’s Agenda decision – Conﬁguration or Customization Costs in a Cloud Computing

Arrangement (IAS 38 Intangible Assets)

In March 2021 IASB published its conclusion on how customer accounts for costs of conﬁg-

uring or customizing the supplier’s application software in a Software as a Service arrangement.

This standard conclusion did not aect to the ﬁnancial statements of Metso Outotec for year

2021.

New and amended standards to be applied

Metso Outotec has not applied the following new and revised IFRS Standards that have been

issued but are not yet eective and (in some cases) had not yet been adopted by the EU

(marked with *):

• Amendments to IAS 1 Classiﬁcation of liabilities as current or non-current *

• Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies *

• Amendments to IAS 8 – Deﬁnition of Accounting Estimates *

• Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single

Transaction *

• Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 –

Comparative Information (issued on December 9, 2021)

• IFRS 17 Insurance Contracts; including Amendments to IFRS 17 (issued on June 25, 2020)

• Annual Improvements to IFRS Standards 2018–2020 Cycle Amendments to IFRS 1, IFRS 9, IFRS

16 and IAS 41

• Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and

Its Associate or Joint Venture *

• Amendments to IFRS 4 Insurance Contracts – alignment with the eective date of IFRS 17

Insurance Contracts (January 1, 2023): Metso Outotec have evaluated that IFRS 17 Insurance

Contracts is not aecting Metso Outotec.

Amendments to and Annual Improvements 2018–2020 (All issued May 14, 2020) to the below:

• Amendments to IFRS 3 Business Combinations – Reference to the Conceptual Framework

• Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use;

• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous

Contracts – Costs of Fulﬁlling a Contract

The directors do not expect that the adoption of the Standards listed above will have a

material impact on the ﬁnancial statements of Metso Outotec in future periods.

Exchange rates used

Average rates Yearend rates

   

USD (US dollar)    

SEK (Swedish krona)    

GBP (Pound sterling)    

CAD (Canadian dollar)    

BRL (Brazilian real)    

CNY (Chinese yuan)    

AUD (Australian dollar)    

Financial review 2021|Notes to the consolidated ﬁnancial statements 82

Audit fees

EUR million  

Audit services  

Tax services  

Other services  

Total





The above table discloses fees to Metso Outotec’s auditor EY. The disclosed fees for compar-

ison year 2020 include also the fees for Metso Minerals audits in the period before EY was

appointed as the auditor of Metso Outotec. In addition, fees paid to Outotec’s auditor PwC

during January 1–June 30, 2020, totaled EUR 1.0 million and were allocated as follows: audit

services EUR 0.4 million, tax services EUR 0.3 million, and other services EUR 0.3 million.

Lawsuits and claims

Several lawsuits, legal claims and disputes based on various grounds are pending against

Metso Outotec in various countries related, among other things, to Metso Outotec’s products,

projects, other operations, and customer receivables. Metso Outotec’s management assesses,

however, to the best of its present understanding that the outcome of these lawsuits, claims,

and legal disputes would not have a material adverse eect on Metso Outotec in view of the

grounds presented for them, provisions made, insurance coverage in force, and the extent

of Metso Outotec’s total business activities. It should be noted, however, that outcomes

of pending lawsuits, legal claims, and disputes are beyond the direct inﬂuence of Metso

Outotec’s management and may, therefore, materially deviate from management’s current

assessment.

Events after the financial year

On December 31, 2021, Metso Outotec announced that it has signed an agreement to divest

its Metal Recycling business line to an aliate of Mimir, an investment company based in

Stockholm, Sweden. The closing of the transaction is expected to take place during the ﬁrst

half of 2022. The divestment will not have a material impact on Metso Outotec’s ﬁnancial

results. Since October 2020, Metal Recycling has been reported as part of discontinued

operations in Metso Outotec’s ﬁnancial statements.

On January 17, 2022, Metso Outotec announced that it will take the next structural

development steps in its business portfolio, following the completed integration of its Minerals

business and the successful turnaround of its Metals business. The company plans to change

its business area structure and related reporting segments by transferring the Hydrometallurgy

business from Metals to Minerals. The objective of the change is to accelerate Metso Outotec’s

proﬁtable growth in the minerals processing industry by more eciently leveraging the

opportunities and synergies in the minerals and hydrometallurgical processes. A strategic

review will be conducted in the remaining Metals business area, consisting of the Smelting,

Metals & Chemical Processing and the Ferrous & Heat Transfer business lines, as well as

related aftermarket services. The review will focus on evaluating the best environment for

developing the Metals business and its strategic ﬁt in Metso Outotec’s business portfolio.

 Other notes

Financial review 2021|Notes to the consolidated ﬁnancial statements 83

Financial statements of the Parent company, FAS

Financial review 2021|Financial statements of the Parent company, FAS 84

Statement of income of the Parent company

EUR Note  

Sales  

Other operating income   

Personnel expenses   

Depreciation and amortization   

Other operating expenses   

Operating proﬁt (loss)





Finance income and expenses, net   

Proﬁt before appropriations and taxes





Appropriations   

Proﬁt before taxes





Income taxes 

Current tax expense  

Change in deferred taxes  

Proﬁt





Balance sheet of the Parent company

Assets

EUR Note  

Non-current assets

Intangible assets   

Tangible assets   

Investments 

Shares in Group companies  

Other investments  

Total non-current assets





Current assets

Long-term receivables

    

Short-term receivables   

Bank and cash  

Total current assets





Total assets





Shareholders’ equity and liabilities

EUR Note  

Shareholders’ equity 

Share capital  

Share premium fund  

Treasury shares  

Invested non-restricted equity fund  

Reserve for cash hedges  

Retained earnings  

Proﬁt for the year

 

Total shareholders’ equity





Liabilities

Long-term liabilities   

Current liabilities   

Total liabilities





Total shareholders’ equity and liabilities





Comparison period restated due to accounting principle change in deferred tax assets and liabilities, details in

note13.

EUR thousand  

Cash ﬂows from operating activities

Proﬁt for the year  

Adjustments to operating proﬁt (loss)

Depreciation and amortization  

Impairment  

Unrealized exchange gains / losses  

Finance income and expenses, net  

Gains/losses on sale, net  

Group contributions  

Taxes  

Other non-cash items  

Total adjustments to operating proﬁt (loss)





Increase / decrease in short-term non-interest-bearing trade

receivables  

Increase / decrease in short-term non-interest-bearing debt  

Change in working capital





Interest paid  

Other ﬁnancial expenses paid  

Dividends received  

Interest received  

Income taxes paid  

Net cash provided by operating activities





EUR thousand  

Cash ﬂows from investing activities

Investments in tangible and intangible assets  

Decrease in subsidiary shares  

Long-term loans granted  

Repayments of long-term loans  

Short-term loans granted  

Repayments of short-term loans  

Interest received from investments  

Business acquisitions, transferred assets and liabilities from Metso

Minerals carve-out  

Net cash used in investing activities





Cash ﬂows from ﬁnancing activities

Decrease in treasury shares  

Invested non-restricted equity fund  

Sales from treasury shares to subsidiaries  

Changes of short-term loans, net  

Withdrawal of long-term loans  

Repayments of long-term loans  

Dividends paid  

Change in Group pool accounts  

Group contributions  

Net cash provided by / used in ﬁnancing activities





Net increase / decrease in bank and cash





Bank and cash at beginning of year  

Bank and cash at end of year  

Cash flow statement of the Parent company

Financial review 2021|Financial statements of the Parent company, FAS 85

Accounting principles

The Parent company ﬁnancial statements have been prepared in accordance with the Finnish

Generally Accepted Accounting Principles throughout the year from January 1 to December 31,

2021. The ﬁnancial statements are presented in euros.

Foreign currency translations

Transactions in foreign currencies are recorded at the rates of exchange prevailing at the date

of the transaction. At the end of the accounting period, monetary items are valued at the rate

of exchange prevailing at the end of period.

Tangible and intangible assets

Tangible and intangible assets are valued at historical cost, less accumulated depreciation

according to plan. Land and water areas are not depreciated.

Depreciation and amortization is calculated on a straight-line basis over the expected

useful lives of the assets as follows:

Computer software 3–5 years

Other intangibles 10 years

Buildings and structures 20–25 years

Machinery and equipment 3–5 years

Other tangible assets 20 years

Financial Instruments

Metso Outotec’s ﬁnancial risk management is carried out by a central treasury department

(Group Treasury) under the policies approved by the Board of Directors. Group Treasury

functions in cooperation with the operating units to minimize ﬁnancial risks in both the Parent

company and the Group. Long-term debt is initially recognized at fair value, net of transaction

costs incurred. In subsequent periods, they are valued at amortized cost using the eective

interest rate method. Debts, which are hedged with a fair value hedge, are recognized at fair

value through proﬁt and loss, and unrealized adjustment is presented in the hedge reserve.

Transaction costs arising from the issuance of bonds are recognized over the life of the bond

using the eective yield method. The unrecognized portion as of the balance sheet date is

presented as a decrease in liabilities. Derivatives outside hedge accounting are valued at fair

value through proﬁt and loss. Forward exchange contracts are measured at fair value. The

change in fair value is recognized as income or expense in the income statement. The fair

value of forward exchange contracts is determined using forward exchange market rates at the

balance sheet date. Bank and cash – as well as securities – consist of cash in bank accounts

and investments of liquid funds in interest-bearing instruments. Financial assets are measured

at historical cost, less possible impairment loss.

Provisions

Provisions are unrealized costs, for which the company is committed, and which will not

provide any income in the future, and which are likely to occur. Provision changes are included

in proﬁt and loss.

Leases

Leases of assets, where the lessor retains all the risks and beneﬁts of ownership, are classiﬁed

as operating leases. Payments made under operating lease agreements are expensed on a

straight-line basis over the lease periods. Leases of property, plant, and equipment, where

the lessee has substantially all the rewards and risks of ownership of an asset, are classiﬁed as

ﬁnance leases.

Income taxes

Income tax expense includes taxes calculated for the ﬁnancial year, adjustments to prior year

taxes, and changes in the deferred taxes. Deferred tax liability or asset has been determined

for all temporary dierences in between the tax bases of assets and liabilities and their

amounts in ﬁnancial reporting, using the enacted tax rates eective for the future years.

Deferred tax liabilities are recognized in the balance sheet in full, and deferred tax assets are

recognized when it’s probable that there will be sucient taxable proﬁt against which the

asset can be utilized. The comparative period 2020 has been restated in Shareholder’s equity.

More details of the change enclosed in note 13 and the impact in equity detailed in note 14.

Acquisitions

In the comparative period the partial demerger of Metso Corporation and combination

of Metso’s Minerals business and Outotec was completed on June 30, 2020. Outotec Oyj

continues as the Parent company changing its name to Metso Outotec Oyj. In this combination,

Metso Outotec Oyj received assets and liabilities from the former Metso Minerals on June 30,

2020. The received assets and liabilities were recorded in book values. The published demerger

plan agreed on July 4, 2019, lists details of the transferred assets and liabilities.

Notes to the financial statements of the Parent company

Financial review 2021|Financial statements of the Parent company, FAS 86

Other operating income

EUR thousand  

Gain on disposal of subsidiary shares  

Foreign exchange gains  

Other  

Total





Personnel expenses

EUR thousand  

Salaries and wages  

Pension costs  

Other indirect employee costs  

Total





Remuneration paid to Executive Team

   

EUR thousand Total Total

Metso Outotec

Oyj Outotec Oyj

Chief Executive Ocer    

Board members

   

Total









Board remuneration is presented in note 1.5 of the consolidated ﬁnancial statements.

In the comparative period the ﬁrst half-year includes the remuneration ﬁgures to Outotec Oyj

Executive team until June 2020, whereas the second half-year ﬁgures correspond to Metso

Outotec Oyj since July 2020.

Number of personnel

 

Personnel at end of year  

Average number of personnel during the year  

Depreciation and amortization

Depreciation and amortization expenses consist of the following:

EUR thousand  

Patents and licenses  

Capitalized software  

Other intangible assets  

Machinery and equipment  

Total





Other operating expenses

EUR thousand  

Impairment of intangible assets  

Write down of tangible assets  

Foreign exchange losses  

Other  

Total





Audit fees

   

EUR thousand EY Total EY PWC

Audit    

Tax consulting    

Other services    

Total



  

In the comparative period company auditor of ﬁrst half-year 2020 was PwC in Outotec while

EY was chosen as company auditor for Metso Outotec in the second half-year 2020. The

above table discloses fees to Metso Outotec Oyj’s auditor EY for the full year 2020, as well as

the fees to Outotec Oyj’s auditor PwC for the period January 1–June 30, 2020.

Financial review 2021|Financial statements of the Parent company, FAS 87

Finance income and expenses

EUR thousand  

Dividends received from

Group companies  

Total





Interest income from investments from

Group companies  

Others  

Total





Other interest and ﬁnance income from

Group companies  

Others  

Fair value change in derivatives  

Exchange rate dierences  

Interest and ﬁnance income, total





Interest expenses to

Group companies  

Others  

Other ﬁnance expenses

Exchange rate dierences  

Others  

Interest and other ﬁnance expenses, total





Finance income and expenses, net





Appropriations

EUR thousand  

Group contributions received  

Income taxes

EUR thousand  

Income taxes on operating activities  

Income taxes for prior years  

Change in deferred taxes  

Total





Financial review 2021|Financial statements of the Parent company, FAS 88

Fixed assets

2021

EUR thousand

Patents and

licenses

Capitalized

software

Other

intangible

assets

Intangible

assets total Land areas

Buildings and

structures

Machinery and

equipment

Tangible assets

total Total

Acquisition cost at beginning of year         

Additions         

Decreases          

Acquisition cost at end of year

        

Accumulated depreciation at beginning of year           

Accumulated depreciation of decreases         

Depreciation for the period             

Accumulated depreciation at end of year

        

Net carrying value at end of year

        

2020

EUR thousand

Patents and

licenses

Capitalized

software

Other

intangible

assets

Intangible

assets total Land areas

Buildings and

structures

Machinery and

equipment

Tangible assets

total Total

Acquisition cost at beginning of year         

Additions         

Additions coming from the combination         

Decreases         

Acquisition cost at end of year         

Accumulated depreciation at beginning of year         

Accumulated depreciation of decreases         

Accumulated depreciation of the combination           

Depreciation for the year          

Accumulated depreciation at end of year         

Net carrying value at end of year         

Financial review 2021|Financial statements of the Parent company, FAS 89

Investments

2021

EUR thousand

Shares in Group

companies Other shares

Receivables

from Group

companies

Receivables

from other

companies

Other

investments

total

Acquisition cost at beginning of year     

Additions     

Decreases     

Acquisition cost at end of year

    

2020

EUR thousand

Shares in Group

companies Other shares

Receivables

from Group

companies

Receivables

from other

companies

Other

investments

total

Acquisition cost at beginning of year     

Additions     

Additions coming from the combination     

Decreases     

Acquisition cost at end of year     

Shareholdings

Subsidiaries on December 31, 2021

Subsidiary Domicile Ownership %

International Project Services Ltd. Oy Finland 

Metso Outotec Canada Inc. Canada 

Metso Outotec Finland Oy Finland 

Metso Outotec Captive Insurance Limited Great Britain 

Metso Outotec France SAS France 

Metso Outotec USA Inc. United States 

Outotec Tecnologia Brazil Ltda Brazil 

Metso Outotec Chile SpA Chile 

Metso Outotec Mexico SA de CV Mexico 

Metso Outotec Perú SA Peru 

Metso Outotec Poland Sp. z o.o. Poland 

Metso Outotec South Africa Pty Ltd South Africa 

Metso Outotec New Material Technology (Shanghai) Co., Ltd. China 

Outotec (Spain) S.L. Spain 

Outotec Africa Holdings (Pty) Ltd South Africa 

Outotec Holding GmbH Germany 

Outotec International Holdings Oy Finland 

Metso Outotec Morocco LLC Morocco 

Outotec Pty. Ltd. Australia 

Metso Outotec-Technology (Ecuador) S.A. Ecuador 

Rauma Oy Finland 

Financial review 2021|Financial statements of the Parent company, FAS 90

Specification of receivables

Long-term receivables

EUR thousand  

Deferred tax assets

 

Derivative ﬁnancial instruments  

Long-term receivables total





In the comparative period the transferred assets from Metso Minerals on June 30, 2020, impact

in Deferred tax asset

50thousand euros and in Derivatives 3,054 thousand euros.

Accounting principles for deferred tax have been changed so that deferred tax assets and liabilities are recognized

in the ﬁnancial statements. An adjustment has been done into retained earnings for the comparative period in the

balance sheet, but the income statement has not been restated. Above tables discloses the detail of deferred taxes

for the comparative period.

Short-term receivables

EUR thousand  

Trade receivables from

Group companies  

Others  

Total





Loan receivables from

Group companies  

Others  

Total





Prepaid expenses and accrued income from

Group companies  

Others  

Total





Other receivables

VAT receivable  

Other receivables  

Total





Short-term receivables total





Derivatives were presented in Other receivables in 2020 ﬁnancial statements, but now they

have been moved to accrued income for both years in the table 2021 and in comparative

period.

In the comparative period the transferred assets from Metso Minerals on June 30, 2020, impact in:

Trade receivables from Group companies 6,559 thousand euros and from others -61 thousand euros

Loan receivables from Group companies 354,544 thousand euros

Prepaid expenses and accrued income from Group companies 6,173 thousand euros and from others

15,508 thousand euros

Other receivables 27,088 thousand euros

Speciﬁcation of prepaid expenses and accrued income

EUR thousand  

Prepaid expenses and accrued income from Group companies

Group contribution receivables  

Accrued interest income  

Accrued derivatives  

Other accrued items  

Total





Prepaid expenses and accrued income from others

Accrued interest income  

Accrued derivatives  

Other accrued items  

Total





In the comparative period the transferred assets from Metso Minerals on June 30, 2020, impact in:

Accrued interest income from group companies 6,111 thousand euros and other accrued items from Group

companies 62 thousand euros.

Other accrued items from others 15,508 thousand euros.

Financial review 2021|Financial statements of the Parent company, FAS 91

Statement of changes in shareholders’ equity

EUR thousand  

Restated 



Share capital at beginning of year   

Change from the combination   

Share capital at end of year



 

Share premium fund at beginning of year   

Share premium fund at end of year



 

Treasury shares at beginning of year   

Change   

Treasury shares at end of year



 

Invested non-restricted equity fund at beginning of year   

Change   

Change from the combination   

Invested non-restricted equity fund at end of year



 

Reserve for cash hedges at beginning of year   

Change   

Reserve for cash hedges at end of year



 

Retained earnings at beginning of year   

Dividend distribution   

Other change   

Change from the combination   

Retained earnings at end of year



 

Proﬁt for the year   

Total shareholders’ equity at end of year



 

Statement of distributable funds on December 31

EUR thousand  

Restated 



Invested non-restricted equity fund   

Treasury shares   

Retained earnings   

Proﬁt for the year   

Total distributable funds



 

Comparison period restated due to accounting principle change in deferred tax assets and liabilities, details in note

13.

At the end of the year 2021, Metso Outotec Oyj held 925,021 own shares, whereas at the end

of the year 2020 the number of own shares was 993,238.

Longterm liabilities

EUR thousand  

Bonds from

Others  

Loans from ﬁnancial institutions  

Derivatives  

Total





Speciﬁcation of bonds and fair values in note 4.5 for consolidated ﬁnancial statements. In the comparative period

transferred liabilities from Metso Minerals on June 30, impact in bonds from other EUR 402,308 thousand. Loans

from ﬁnancial institutions EUR 439,393 thousand and in Deferred tax liability EUR 2,525 thousand.

Debt maturing after more than in ﬁve years

EUR thousand  

Bonds  

Presented at nominal value.

Financial review 2021|Financial statements of the Parent company, FAS 92

Shortterm liabilities

EUR thousand  

Current portion of long-term liabilities

Bonds  

Total





Short-term interest-bearing debt

Loans from ﬁnancial institutions  

Group pool accounts  

Total





Trade payables to

Group companies  

Others  

Total





Accrued expenses and deferred income to

Group companies  

Others  

Total





Provisions

Provision for restructuring  

Total





Other short-term non-interest-bearing debt to

Group companies  

Others  

Total





Short-term liabilities total





Short-term liabilities to Group companies total  

Derivatives were presented in Other debt in 2020 ﬁnancial statements, but now they have

been moved to accrued expenses for both years in the table 2021 and 2020.

In the comparative period the transferred assets from Metso Minerals on June 30, 2020, impact in:

Group pool accounts 39,859 thousand euros.

Trade payables to others 1,956 thousand euros.

Accrued expenses and deferred income to Group companies 42 thousand euros and to others 12,852 thousand

euros.

Provisions for restructuring 200 thousand euros.

Other short-term non-interest-bearing debt to Group companies 50,916 thousand euros and to others 269

thousand euros.

Speciﬁcation of accrued expenses and deferred income

EUR thousand  

Accrued expenses and deferred income to Group companies

Accrued interest expenses  

Accrued derivatives  

Other accrued items  

Total





Accrued expenses and deferred income to others

Accrued interest expenses  

Accrued derivatives  

Accrued salaries, wages and social costs  

Other accrued items  

Total





In the comparative period the transferred assets from Metso Minerals on June 30, 2020, impact in:

Accrued interest expenses to Group companies 42 thousand euros.

Accrued interest expenses to others 953 thousand euros, accrued salaries, wages, and social costs 2,270 thousand

euros and other accrued items 9,630 thousand euros.

Financial review 2021|Financial statements of the Parent company, FAS 93

Other contingencies

Guarantees and mortgages

EUR thousand  

Guarantees on behalf of Group companies  

Total





In the comparative period the portion from Metso Minerals on June 30, 2020, was

179,299 thousand euros.

Lease commitments

EUR thousand  

Payments in the following year  

Payments later  

Total





Derivative instruments

EUR thousand  

Net fair values

Contracts made with ﬁnancial institutions

Foreign exchange forward contracts  

Interest rate swaps  

Contracts made with subsidiaries

Foreign exchange forward contracts  

Total





Nominal values

Contracts made with ﬁnancial institutions

Foreign exchange forward contracts  

Interest rate swaps  

Contracts made with subsidiaries

Foreign exchange forward contracts  

Total





In the comparative period the portion from Metso Minerals related to Derivative instruments

on June 30, 2020, in total for Net fair values 9,743 thousand euros and 2,503,875 thousand

euros for nominal values.

Financial review 2021|Financial statements of the Parent company, FAS 94

Signatures of the Board of Directors’

report and financial statements 2021

Helsinki, February 9, 2022

Kari Stadigh Klaus Cawén

Chair of the Board Vice Chair of the Board

Christer Gardell Antti Mäkinen Ian W. Pearce

Member of the Board Member of the Board Member of the Board

Emanuela Speranza Arja Talma

Member of the Board Member of the Board

Pekka Vauramo

President and CEO

Auditor’s note

Our auditor’s report has been issued today.

Helsinki, February 9, 2022

Ernst & Young Oy

Authorized Public Accountant Firm

Mikko Järventausta

APA

Financial review 2021|Signatures of the Board of Directors' report and ﬁnancial statements 95

Auditor’s Report

(Translation of the Finnish original)

To the Annual General Meeting of Metso Outotec Corporation

Report on the Audit of Financial Statements

Opinion

We have audited the ﬁnancial statements of Metso Outotec Corporation (business identity

code 0828105-4) for the year ended 31 December, 2021. The ﬁnancial statements comprise the

consolidated balance sheet, income statement, statement of comprehensive income, statement

of changes in equity, statement of cash ﬂows and notes, including summaries of signiﬁcant

accounting policies, as well as the parent company’s balance sheet, income statement,

statement of cash ﬂows and notes.

In our opinion

• the consolidated ﬁnancial statements give a true and fair view of the group’s ﬁnancial

position as well as its ﬁnancial performance and its cash ﬂows in accordance with

International Financial Reporting Standards (IFRS) as adopted by the EU.

• the ﬁnancial statements give a true and fair view of the parent company’s ﬁnancial

performance and ﬁnancial position in accordance with the laws and regulations governing

the preparation of ﬁnancial statements in Finland and comply with statutory requirements.

Our opinion is consistent with the additional report submitted to the Audit and Risk Committee.

Basis for Opinion

We conducted our audit in accordance with good auditing practice in Finland. Our

responsibilities under good auditing practice are further described in the Auditor’s

Responsibilities for the Audit of Financial Statements section of our report.

We are independent of the parent company and of the group companies in accordance

with the ethical requirements that are applicable in Finland and are relevant to our audit, and

we have fulﬁlled our other ethical responsibilities in accordance with these requirements.

In our best knowledge and understanding, the non-audit services that we have provided

to the parent company and group companies are in compliance with laws and regulations

applicable in Finland regarding these services, and we have not provided any prohibited

non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services

that we have provided have been disclosed in note 6.1 to the consolidated ﬁnancial statements.

We believe that the audit evidence we have obtained is sucient and appropriate to

provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most

signiﬁcance in our audit of the ﬁnancial statements of the current period. These matters were

addressed in the context of our audit of the ﬁnancial statements as a whole, and in forming

our opinion thereon, and we do not provide a separate opinion on these matters.

We have fulﬁlled the responsibilities described in the Auditor’s responsibilities for the

audit of the ﬁnancial statements section of our report, including in relation to these matters.

Accordingly, our audit included the performance of procedures designed to respond to our

assessment of the risks of material misstatement of the ﬁnancial statements. The results of our

audit procedures, including the procedures performed to address the matters below, provide

the basis for our audit opinion on the accompanying ﬁnancial statements.

We have also addressed the risk of management override of internal controls. This includes

consideration of whether there was evidence of management bias that represented a risk of

material misstatement due to fraud.

Financial review 2021|Auditor’s Report 96

Key Audit Matter How our audit addressed the Key Audit Matter

Revenue recognition over time, including valuation of project receivables and

projectlossprovisions

The accounting principles and disclosures about revenue, project receivables and project loss

provisions are included in Note 1.2, Note 2.2 and Note 2.6.

Metso Outotec delivers to its customers customized engineered solutions, where the

signing of a delivery contract and the ﬁnal acceptance of a delivery by the customer may take

place in dierent ﬁnancial periods. In accordance with Metso Outotec’s accounting principles,

revenue from such projects is recognized over time.

The recognition of revenue and the estimation of the outcome of a project require

signiﬁcant management judgment, in particular with respect to estimating the stage of

completion and cost to complete. Signiﬁcant judgment is also required to assess the

recoverability of project receivables and particularly to determine the project loss provision

when it is expected that the total costs will exceed the total revenues from the delivery

contract. Based on above, revenue recognition over time, including valuation of project

receivables and project loss provisions, was a key audit matter.

This matter was also a signiﬁcant risk of material misstatement referred to in EU Regulation

No 537/2014, point (c) of Article 10(2).

Our audit procedures to address the risk of material misstatement in respect of the revenue

recognition over time, including valuation of project receivables and project loss provisions,

included, among others:

• Assessment of the Group’s accounting policies over revenue recognition over time and

valuation of project receivables and project loss provisions.

• Inspection of the project documentation such as contracts, legal opinions and other written

communication.

• Evaluation of ﬁnancial development and current status of projects by

– analyzing the changes in assumptions relating to estimated revenues and costs, receipts of

project payments and loss provisions, and

– discussions with the dierent levels of organization including project management and

group management.

• Evaluation of the appropriateness of the Group’s disclosures in respect of revenue

recognition over time and valuation of projects receivables and project loss provisions.

Valuation of goodwill

The accounting principles and disclosures about goodwill are included in Note 3.1.

As of balance sheet date December 31, 2021, the value of goodwill in continuing operations

amounted to 1 124 million euros representing 19% of the total assets and 50% of the total

equity.

The annual impairment testing of goodwill was based on the management’s estimate

about the value-in-use of the cash generating units. There are a number of assumptions

used to determine the value-in-use of the cash generating units, including revenue growth,

margins and the discount rate applied on net cash-ﬂows. The estimated value-in-use may vary

signiﬁcantly when underlying assumptions are changed and the changes in above-mentioned

individual assumptions may result in an impairment of goodwill.

The valuation of goodwill was a key audit matter because the annual impairment testing

included management judgment with respect to the key assumptions used and because of

the signiﬁcance of goodwill to the ﬁnancial statements.

Our audit procedures in respect of valuation of goodwill included, among others:

• Evaluation of the determination of cash generating units and the goodwill allocated to those

units.

• Involvement of our valuation specialists to assist us in evaluating the key assumptions used in

impairment testing by comparing the management’s assumptions to externally derived data

and to our independently calculated industry averages, in particular those relating to

– the forecasted revenue growth,

– the forecasted margin and

– the weighted average cost of capital used to discount the net cash-ﬂows.

• Testing of the accuracy of the impairment calculations prepared by the management

and comparison of the sum of discounted cash ﬂows against Metso Outotec’s market

capitalization.

• Evaluation of the adequacy of the disclosures of the impairment testing results.

Financial review 2021|Auditor’s Report 97

Responsibilities of the Board of Directors and the Managing Director for the

Financial Statements

The Board of Directors and the Managing Director are responsible for the preparation of

consolidated ﬁnancial statements that give a true and fair view in accordance with International

Financial Reporting Standards (IFRS) as adopted by the EU, and of ﬁnancial statements that

give a true and fair view in accordance with the laws and regulations governing the

preparation of ﬁnancial statements in Finland and comply with statutory requirements. The

Board of Directors and the Managing Director are also responsible for such internal control

as they determine is necessary to enable the preparation of ﬁnancial statements that are free

from material misstatement, whether due to fraud or error.

In preparing the ﬁnancial statements, the Board of Directors and the Managing Director are

responsible for assessing the parent company’s and the group’s ability to continue as going

concern, disclosing, as applicable, matters relating to going concern and using the going

concern basis of accounting. The ﬁnancial statements are prepared using the going concern

basis of accounting unless there is an intention to liquidate the parent company or the group

or cease operations, or there is no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance on whether the ﬁnancial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with good auditing practice

will always detect a material misstatement when it exists. Misstatements can arise from fraud

or error and are considered material if, individually or in aggregate, they could reasonably

be expected to inﬂuence the economic decisions of users taken on the basis of the ﬁnancial

statements.

As part of an audit in accordance with good auditing practice, we exercise professional

judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the ﬁnancial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sucient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the eectiveness of the parent company’s or the group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s

use of the going concern basis of accounting and based on the audit evidence obtained,

whether a material uncertainty exists related to events or conditions that may cast signiﬁcant

doubt on the parent company’s or the group’s ability to continue as a going concern. If

we conclude that a material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures

are inadequate, to modify our opinion. Our conclusions are based on the audit evidence

obtained up to the date of our auditor’s report. However, future events or conditions may

cause the parent company or the group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the ﬁnancial statements, including

the disclosures, and whether the ﬁnancial statements represent the underlying transactions

and events so that the ﬁnancial statements give a true and fair view.

• Obtain sucient appropriate audit evidence regarding the ﬁnancial information of the

entities or business activities within the group to express an opinion on the consolidated

ﬁnancial statements. We are responsible for the direction, supervision and performance of

the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and signiﬁcant audit ﬁndings, including any signiﬁcant

deﬁciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied

with relevant ethical requirements regarding independence, and communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those

matters that were of most signiﬁcance in the audit of the ﬁnancial statements of the current

period and are therefore the key audit matters. We describe these matters in our auditor’s

report unless law or regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, we determine that a matter should not be communicated in

our report because the adverse consequences of doing so would reasonably be expected to

outweigh the public interest beneﬁts of such communication.

Financial review 2021|Auditor’s Report 98

Other Reporting Requirements

Information on our audit engagement

We were ﬁrst appointed as auditors by the Annual General Meeting on 30 June 2020 and our

appointment represents a total period of uninterrupted engagement of two years.

Other information

The Board of Directors and the Managing Director are responsible for the other information.

The other information comprises the report of the Board of Directors and the information

included in the Annual Report, but does not include the ﬁnancial statements and our auditor’s

report thereon. We have obtained the report of the Board of Directors prior to the date of this

auditor’s report, and the Annual Report is expected to be made available to us after that date.

Our opinion on the ﬁnancial statements does not cover the other information.

In connection with our audit of the ﬁnancial statements, our responsibility is to read the

other information identiﬁed above and, in doing so, consider whether the other information is

materially inconsistent with the ﬁnancial statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. With respect to report of the Board of Directors,

our responsibility also includes considering whether the report of the Board of Directors has

been prepared in accordance with the applicable laws and regulations.

In our opinion, the information in the report of the Board of Directors is consistent with

the information in the ﬁnancial statements and the report of the Board of Directors has been

prepared in accordance with the applicable laws and regulations.

If, based on the work we have performed on the other information that we obtained prior

to the date of this auditor’s report, we conclude that there is a material misstatement of this

other information, we are required to report that fact. We have nothing to report in this regard.

Helsinki, February 9, 2022

Ernst & Young Oy

Authorized Public Accountant Firm

Mikko Järventausta

Authorized Public Accountant

Financial review 2021|Auditor’s Report 99

To the Board of Directors of Metso Outotec Oyj

We have performed a reasonable assurance engagement on the iXBRL tagging of the

consolidated ﬁnancial statements included in the digital ﬁles MOCORP-2021-12-31-ﬁ.zip of

Metso Outotec Oyj for the ﬁnancial year 1.1.–31.12.2021 to ensure that the ﬁnancial statements

are tagged with iXBRL mark ups in accordance with the requirements of Article 4 of EU

Commission Delegated Regulation (EU) 2018/815 (ESEF RTS).

Responsibilities of the Board of Directors and Managing Director

The Board of Directors and Managing Director are responsible for the preparation of the

Report of Board of Directors and ﬁnancial statements (ESEF ﬁnancial statements) that comply

with the ESEF RTS. This responsibility includes:

• preparation of ESEF ﬁnancial statements in accordance with Article 3 of ESEF RTS

• Tagging the consolidated ﬁnancial statements included within the ESEF ﬁnancial statements

by using the iXBRL mark ups in accordance with Article 4 of ESEF RTS

• Ensuring consistency between ESEF ﬁnancial statements and audited ﬁnancial statements

The Board of Directors and Managing Director are also responsible for such internal control

as they determine is necessary to enable the preparation of ESEF ﬁnancial statements in

accordance the requirements of ESEF RTS.

Auditor’s Independence and Quality Control

We are independent of the company in accordance with the ethical requirements that are

applicable in Finland and are relevant to the engagement we have performed, and we have

fulﬁlled our other ethical responsibilities in accordance with these requirements.

The auditor applies International Standard on Quality Control (ISQC) 1 and therefore

maintains a comprehensive quality control system including documented policies and

procedures regarding compliance with ethical requirements, professional standards and

applicable legal and regulatory requirements.

Auditor’s Responsibilities

In accordance with the Engagement Letter we will express an opinion on whether the

electronic tagging of the consolidated ﬁnancial statements complies in all material respects

with the Article 4 of ESEF RTS. We have conducted a reasonable assurance engagement in

accordance with International Standard on Assurance Engagements ISAE 3000.

The engagement includes procedures to obtain evidence on:

• whether the tagging of the primary ﬁnancial statements in the consolidated ﬁnancial

statements complies in all material respects with Article 4 of the ESEF RTS

• whether the ESEF ﬁnancial statements are consistent with the audited ﬁnancial statements

The nature, timing and extent of the procedures selected depend on the auditor’s judgement

including the assessment of risk of material departures from requirements sets out in the ESEF

RTS, whether due to fraud or error.

We believe that the evidence we have obtained is sucient and appropriate to provide a

basis for our statement.

Opinion

In our opinion the tagging of the consolidated ﬁnancial statement included in the ESEF

ﬁnancial statements of Metso Outotec Oyj for the year ended 31.12.2021 complies in all

material respects with the requirements of ESEF RTS.

Our audit opinion on the consolidated ﬁnancial statements of Metso Outotec Oyj for the

year ended 31.12.2021 is included in our Independent Auditor’s Report dated 9.2.2022. In

this report, we do not express an audit opinion or any other assurance on the consolidated

ﬁnancial statements.

Helsinki 14.3.2022

Ernst & Young Oy

Authorized Public Accountant Firm

Mikko Järventausta

Authorized Public Accountant

Independent Auditor’s Report on

Metso Outotec Oyj’s ESEF Consolidated Financial Statements

(Translation of the Finnish original)

Financial review 2021|Auditor’s Report 100

Investor Relations function and policies

The main task of Investor Relations is to support the correct valuation of Metso Outotec’s share

by providing up-to-date information on matters concerning our operations, operating

environment, strategy, objectives, ﬁnancial performance, and market outlook. Our goal is

to provide correct, adequate, and current information regularly and impartially to all market

participants. In our work, we aim for promptness, transparency, agility, and excellent service.

Investor Relations is responsible for all investor communications, including contacts

with representatives of the capital markets. All investor meeting requests are processed by

Investor Relations. In addition to ﬁnancial reports and actively updated webpages our investor

communications include investor meetings as well as conferences seminars in which corporate

executives actively participate. We also arrange Capital Markets Day events. In addition,

we regularly gather and analyze market information and investor feedback for the top

management and the Board of Directors.

During the 21-day period prior to publication of the annual, half-year or interim ﬁnancial

results, we are not in contact with capital market representatives. At other times, we are happy

to answer inquiries of analysts and investors by phone, email or at arranged investor meetings.

Contact details are available on the following page.

Market estimates and analyst reports

We actively monitor market expectations and will review, if requested so by an analyst, their

model against publicly available information. However, we do not comment on or take any

responsibility for estimates or forecasts published by capital market representatives, and we do

not comment on the company’s valuation or share price development, give preference to one

particular analyst, or distribute analyst reports to the investment community.

We maintain a list of the analysts following Metso Outotec on a regular basis on the

Metso Outotec website.

Market outlook

Metso Outotec’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.

Current market outlook, published on February 10, 2022

Metso Outotec expects the market activity to remain at the current strong level, subject to the

development of the Covid-19 pandemic.

Guidance on our financial communications

The principle of equality in our investor communications means giving all market participants

simultaneous and timely access to the information they need to be able to determine the

value of the Metso Outotec share in an informed manner. We follow the rules and

recommendations of:

• Finnish Corporate Governance Code 2020

• Finnish Companies Act

• Accounting Act

• Finnish Securities Markets Act

• Market Abuse Regulation ((EU) N:o 596/2014 (“MAR”))

• Rules, regulations and guidelines of Nasdaq Helsinki and the Finnish Financial Supervisory

Authority

Our disclosure policy has been approved by the Board of Directors and it describes

the main principles and practices of our stock exchange communications as well as other

important disclosure practices we follow. The purpose of the policy is to promote reliable and

consistent disclosure of information and to describe the decision-making procedures relevant

to disclosing market-relevant information. More information and our Disclosure Policy are

available on the Metso Outotec website.

Our releases are divided into three categories: stock exchange releases, corporate press

releases and trade press releases. The category of a release is based on MAR demands, on

the materiality and relevance of the information as well as on internal guidelines.

Stock exchange releases are used for releasing inside information according to the MAR

and other matters required by the rules of the stock exchange. Corporate press releases are

used for communicating about business events that do not include inside information but are

estimated to be newsworthy or of general interest to stakeholders. Trade press releases are

used for discussing our products and technology and other topics that are of interest to our

customer industries and the trade media.

Our ﬁnancial reviews and our releases, as well as their email subscription, are available in

Finnish and English on the Metso Outotec website. We disclose information about our ﬁnancial

performance according to a schedule announced in advance. Financial information and key

ﬁgures are disclosed on the Metso Outotec and segment level.

Financial reporting schedule 2022

Annual report 2022 Week commencing March 14, 2022

Interim report for January–March 2022 April 21, 2022

Half-year ﬁnancial report 2022 July 22, 2022

Interim report for January–September 2022 October 28, 2022

Investor information

Financial review 2021|Investor information 101

Shareholder’s change of address

Shareholders are kindly asked to notify of changes in their address to the bank, brokerage ﬁrm

or other account operator with which they have a book-entry account.

Annual General Meeting 2022

Metso Outotec’s Annual General Meeting 2022 will be held on Thursday, April 21, 2022, at 2.00

p.m. (EEST) at Sanomatalo at the address Töölönlahdenkatu 2, FI-00100 Helsinki, Finland. In

order to ensure the health and safety of the shareholders, employees and other stakeholders

of the Company, the General Meeting will be organized without shareholders’ and their proxy

representatives’ presence at the General Meeting venue.

Shareholders can participate in the General Meeting and use their shareholder rights in

connection with the General Meeting by voting in advance (either personally or through a

proxy representative), by submitting counterproposals in advance and by asking questions in

advance in the manner described below. Proxy representatives must also vote in advance in

the manner described below.

Notice of the meeting including all meeting proposals was published as a stock exchange

release on February 10, 2022, and is also available on the Metso Outotec website.

Important dates related to AGM 2022

Deadline for presenting questions in advances March 3, 2022, at 10:00 a.m. (EET)

Record date of AGM April 7, 2022

Registration period ends April 14, 2022, at 10:00 a.m. (EEST)

Annual General Meeting April 21, 2022

Record date of dividend payment, 1st installment April 25, 2022

Date of dividend payment, 1st installment May 2, 2022

Minutes of the meeting available May 5, 2022, at the latest

Dividend payment 2nd installment Board of Directors to resolve on

October 27, 2022

Registration and proxies

A shareholder whose shares are registered on the shareholder’s Finnish book-entry account

can register and vote in advance on certain matters on the agenda of the General Meeting

from March 8, 2022, at 4.00 p.m. (EET) until April 14, 2022, at 10.00 a.m. (EEST) by the following

means:

a) through the Metso Outotec website. The Finnish personal identity code or business ID as

well as strong identiﬁcation with Finnish banking codes or mobile ID is needed for electronic

registration and advance voting;

b) by sending the advance voting form available on the Company’s website or

corresponding information to Innovatics Ltd to the address Innovatics Oy, AGM/

MetsoOutotec Corporation, Ratamestarinkatu 13 A, 00520 Helsinki by letter or by email at

agm@innovatics.ﬁ.

Proxy and voting instruction templates will be available on the Metso Outotec website no

later than as from March 8, 2022, onwards. Possible proxy documents shall be delivered

primarily as an attachment in connection with the electronic registration and advance voting

or alternatively by email to agm@innovatics.ﬁ or as originals by regular mail to the address

Innovatics Oy, AGM/Metso Outotec Corporation, Ratamestarinkatu 13 A, 00520 Helsinki before

the end of the registration and advance voting period, i.e. before April 14, 2022, at 10.00 a.m.

(EEST), by which time the proxy documents must have been received.

Nominee registered shares

A holder of nominee-registered shares has the right to participate in the General Meeting

by virtue of such shares, based on which the shareholder on the record date of the General

Meeting, on April 7, 2022, would be entitled to be registered in the Company’s shareholders’

Further information will be available on the Metso Outotec website.

Resolutions of the AGM

Resolutions of the AGM will be published as a stock exchange release without delay after the

meeting has ﬁnished.

More information about the Annual General Meeting and the meeting proposals are

available on the Metso Outotec website.

IR contacts

Juha Rouhiainen

Vice President, Investor Relations

Tel. +358 20 484 3253

juha.rouhiainen@mogroup.com

Financial review 2021|Investor information 102

Metso Outotec Corporation

Postal address

Metso Outotec Corporation, PO Box 1220, 00101 Helsinki, Finland.

Visiting address

Metso Outotec Corporation, Töölönlahdenkatu 2, 00100 Helsinki, Finland.

Telephone

+35820484100