549300R0VN9C371W0E07-2022-12-31-en

Contents


Board of Directors’ Report ...............................................................................................................................................................	3
Financial year 2022 ...........................................................................................................................................................................	3
Corporate Governance Statement ..................................................................................................................................................	12
Statement of non-financial information ..........................................................................................................................................	12
Shares and shareholders .................................................................................................................................................................	22
Key figures ..........................................................................................................................................................................................	26
Board of Directors’ proposal on the use of profit ..........................................................................................................................	29
Consolidated financial statements, IFRS ......................................................................................................................................	30
Consolidated statement of income .................................................................................................................................................	30
Consolidated statement of comprehensive income .....................................................................................................................	31
Consolidated balance sheet ............................................................................................................................................................	32
Consolidated statement of changes in shareholders’ equity ......................................................................................................	34
Consolidated statement of cash flows ...........................................................................................................................................	36
Notes to the consolidated financial statements ............................................................................................................................	37
1.Group performance ..............................................................................................................................................	39
1.1.Reporting segments .............................................................................................................................................	39
1.2.Sales .......................................................................................................................................................................	43
1.3.Selling, general, and administrative expenses ................................................................................................	47
1.4.Other operating income and expenses .............................................................................................................	47
1.5.Personnel expenses and number of personnel ...............................................................................................	48
1.6.Share-based payments .......................................................................................................................................	50
1.7.Finance income and expenses ..........................................................................................................................	53
1.8.Income taxes .........................................................................................................................................................	54
1.9.Earnings per share ...............................................................................................................................................	56
2.Operational assets and liabilities .......................................................................................................................	58
2.1.Net working capital and capital employed ........................................................................................................	58
2.2.Trade receivables .................................................................................................................................................	59
2.3.Other receivables .................................................................................................................................................	60
2.4.Inventory ................................................................................................................................................................	61
2.5.Trade and other payables ...................................................................................................................................	62
2.6.Provisions ..............................................................................................................................................................	62
2.7.Post-employment obligations .............................................................................................................................	64
3.Intangible assets and property, plant, and equipment ....................................................................................	69
3.1.Goodwill and intangible assets ...........................................................................................................................	69
3.2.Property, plant, and equipment ..........................................................................................................................	73
3.3.Right-of-use assets ..............................................................................................................................................	75
3.4.Depreciation and amortization ............................................................................................................................	77
4.Capital structure and financial instruments ......................................................................................................	78
4.1.Financial risk management .................................................................................................................................	78
4.2.Financial assets and liabilities by category ......................................................................................................	83
4.3.Liquid funds ...........................................................................................................................................................	86
4.4.Equity......................................................................................................................................................................	86
4.5.Borrowings and lease liabilities ..........................................................................................................................	89
4.6.Interest-bearing net debt reconciliation .............................................................................................................	91
4.7.Contingent liabilities and other commitments ..................................................................................................	92
4.8.Derivative instruments .........................................................................................................................................	92
5.Consolidation ........................................................................................................................................................	95
5.1.Principles of consolidation ..................................................................................................................................	95
5.2.Subsidiaries ...........................................................................................................................................................	97
5.3.Associated companies, joint ventures, and related party transactions ........................................................	99
5.4.Acquisitions and business disposals .................................................................................................................	100
5.5.Discontinued operations ......................................................................................................................................	102
5.6.New accounting standards ..................................................................................................................................	104
5.7.Exchange rates used ...........................................................................................................................................	105
6.Other notes ............................................................................................................................................................	106
6.1.Audit fees ...............................................................................................................................................................	106
6.2.Lawsuits and claims .............................................................................................................................................	106
Financial Statements of the Parent Company, FAS ....................................................................................................................	107
Signatures of the Board of Directors’ Report and Financial Statements 2022 ........................................................................

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 2

Board of Directors’ report

Financial year 2022

Figures in brackets refer to the corresponding period in 2021, unless otherwise stated.

Segment information for 2021 has been restated to reflect the segment structure changes that were announced in January

2022.

Operating environment

The market activity in Metso Outotec customer industries was high the whole year, especially among the mining and metals

customers. This was reflected in the demand for new equipment throughout the year and in the demand for services, which

improved during the year, supported by metal prices and higher demand for process improvements and modernizations.

Russia started its military offensive against Ukraine in February, causing significant impacts on the operating environment. As

a result, Metso Outotec decided to exit the Russian markets, discontinue taking new orders from Russia and commence a

wind-down process relating to delivery contracts with non-sanctioned customers. After the Russian markets closed, a

significant increase of activity was seen in many other mining markets, such as North America, Australia, and Central Asia.

The demand in the mining markets was resulting from the forecast increase of the use of metals, which is supported by

megatrends related to the fight against climate change and electrification.

In the aggregates market, the year started with strong overall activity but the Russian military offensive against Ukraine and

inflation had a negative impact on the European market since the spring. Activity in Europe help up, however, at a fairly good

level, while the demand in the North American market remained at almost record-high level during the whole year.

Key figures


EUR million	2022	2021	Change %
Orders received	6,024	5,421	11
Orders received by services business	2,860	2,393	20
% of orders received	47	44	–
Order backlog	3,825	3,536	8
Sales	5,295	4,236	25
Sales by services business	2,574	2,126	21
% of sales	49	50	–
Adjusted EBITA	731	547	34
% of sales	13.8	12.9	–
Operating profit	504	425	19
% of sales	9.5	10.0	–
Earnings per share, continuing operations, EUR	0.40	0.35	14
Earnings per share, total, EUR	0.36	0.41	-12
Cash flow from operations	322	608	-47
Gearing, %	29.1	20.9	–
Personnel at end of period	16,705	15,630	7

Financial performance

The Group's annual orders received grew 11% and totaled EUR 6,024 million (EUR 5,421 million). Annual sales increased

25% to EUR 5,295 million (EUR 4,236 million), with a strong contribution by all segments. The order backlog was EUR 3,825

million (3,536 million) at the end of December.

Adjusted EBITA increased to EUR 731 million (EUR 547 million), and adjusted EBITA margin improved to 13.8% (12.9%).

Negative adjustments of EUR 162 million (EUR 50 million negative) had an impact on the operating profit (EBIT), of which

EUR 150 million was related to the wind-down of the business in Russia. Operating profit totaled EUR 504 million, or 9.5% of

sales (EUR 425 million and 10.0%). Profit before taxes was EUR 441 million (EUR 385 million). The effective tax rate was

25% (24%). Earnings per share for continuing operations were EUR 0.40 (EUR 0.35). Cash flow from operations was EUR

322 million (EUR 608 million) affected by an increase in net working capital. Especially inventories increased due to supply

chain challenges and inflation.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 3

Impacts from currency and structural changes on orders received


EUR million, %	Aggregates	Minerals	Metals	Total
2021	1,374	3,437	610	5,421
Organic growth in constant currencies, %	3	13	-11	8
Impact of changes in exchange rates, %	2	3	2	3
Structural changes, %	2	0	–	1
Total change, %	8	16	-10	11
2022	1,481	3,993	551	6,024

Impacts from currency and structural changes on sales


EUR million, %	Aggregates	Minerals	Metals	Total
2021	1,202	2,724	310	4,236
Organic growth in constant currencies, %	16	20	56	21
Impact of changes in exchange rates, %	3	4	2	3
Structural changes, %	2	0	–	1
Total change, %	20	23	58	25
2022	1,446	3,359	489	5,295

Financial position

The Group’s net interest-bearing liabilities were EUR 684 million at the end of December (Dec 31, 2021: EUR 470 million),

gearing increased to 29.1% (Dec 31, 2021: 20.9%) and the debt-to-capital ratio to 33.3% (Dec 31, 2021: 26.7%). The equity-

to-assets ratio was 39.2% (Dec 31, 2021: 43.2%).

The Group's liquidity position is strong. Liquid funds, consisting of cash and cash equivalents, amounted to EUR 601 million

(Dec 31, 2021: EUR 473 million), and there were no deposits or securities with a maturity of more than three months (Dec 31,

2021: EUR 0 million).

Metso Outotec has a committed syndicated revolving credit facility of EUR 600 million with a maturity in 2026. The facility

includes sustainability performance targets impacting the cost of borrowing. At the end of the year, the facility was undrawn.

The company also has a EUR 600 million Finnish commercial paper program, of which EUR 80 million was utilized at the end

of the year. In addition, Metso Outotec has a EUR 100 million loan from Nordic Investment Bank with a final maturity in 2029

and which includes sustainability performance targets impacting the cost of borrowing. Metso Outotec also has a Euro

Medium Term Note Program (EMTN) of EUR 2 billion, under which EUR 758 million at carrying value was outstanding at the

end of December (Dec 31, 2021: EUR 687 million).

During 2022, Metso Outotec made several funding transactions:

•Early repayment of EUR 50 million to a EUR 150 million bank term loan with maturity in June 2022.

•Repayment of matured EUR 100 million private placements.

•A EUR 100 million term loan agreement for two years with one of its relationship banks.

•A EUR 50 million research, development, and innovation (RDI) loan with European Investment Bank.

The loan has a 7-year maturity, and it was undrawn at the end of the period.

•The company structured its maturity profile by purchasing EUR 103 million of the outstanding bonds maturing in 2024

through a voluntary tender offer. At the same time the company issued new bonds for EUR 300 million with a coupon

of 4.875% and maturity in 2027.

In June 2022, Metso Outotec published its Sustainability-Linked Finance Framework, which can be utilized when issuing

bonds or agreeing on loans or other financing agreements that include sustainability performance targets.

The average interest rate of total loans and derivatives was 3.19%, on December 31, 2022. The duration of medium- and

long-term interest-bearing debt was 2.0 years and the average maturity 3.9 years.

Metso Outotec has a ‘BBB-’ long-term issuer credit rating with positive outlook from S&P Global Ratings and a ‘Baa2’ long-

term issuer rating with stable outlook from Moody’s Investor Service.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 4

Reporting segments: Aggregates

Key figures (IFRS)


EUR million	2022	2021	Change %
Orders received	1,481	1,374	8
Orders received by services business	469	429	9
% of orders received	32	31	–
Order backlog	561	545	3
Sales	1,446	1,202	20
Sales by services business	477	396	20
% of sales	33	33	–
Adjusted EBITA	213	161	33
% of sales	14.8	13.4	–
Operating profit	195	148	32
% of sales	13.5	12.3	–

Orders received increased 8% to EUR 1,481 million. Sales grew 20% year-on-year, thanks to a successful execution of the

backlog. Driven by volume growth and strong overall operational performance, adjusted EBITA improved to EUR 213 million

(EUR 161 million), corresponding to a margin of 14.8% (13.4%).

Reporting segments: Minerals

Key figures


EUR million	2022	2021	Change %
Orders received	3,993	3,437	16
Orders received by services business	2,303	1,914	20
% of orders received	58	56	–
Order backlog	2,589	2,330	11
Sales	3,359	2,724	23
Sales by services business	2,030	1,689	20
% of sales	60	62	–
Adjusted EBITA	502	371	35
% of sales	15.0	13.6	–
Operating profit	372	311	19
% of sales	11.1	11.4	–

Orders received increased 16% to EUR 3,993 million (3,437 million). Sales increased 23% to EUR 3,359 million. Adjusted

EBITA was EUR 502 million and adjusted EBITA margin was 15.0% (EUR 371 million and 13.6%), supported by volumes, final

synergies coming through and successful mitigation of increased input costs.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 5

Reporting segments: Metals

Key figures


EUR million	2022	2021	Change %
Orders received	551	610	-10
Orders received by services business	88	50	77
% of orders received	15.9	8.1	–
Order backlog	674	662	2
Sales	489	310	58
Sales by services business	67	41	66
% of sales	14	13	–
Adjusted EBITA	52	24	119
% of sales	10.7	7.7	–
Operating profit	49	13	275
% of sales	10.0	4.2	–

The decline in orders received of 10% to EUR 551 million (610 million) was due to an exceptionally large order in August

2021. Sales grew 58% compared to the previous year, thanks to increased deliveries form the backlog. Volume growth and an

improved cost structure supported the increase of adjusted EBITA to 52 million (24 million), which corresponds to a margin of

10.7% (7.7%).

Capital expenditure and investments

Gross capital expenditure excluding business acquisitions was EUR 114 million in 2022. This consisted of various small

investments in the company's foundries and manufacturing sites.

Research and development

R&D expenses including investments were EUR 69 million, or 1.3% of sales.

Inventions and patents


Pieces	2022	2021
Invention disclosures	125	185
Patent applications (including utility models)	1,935	2,057
Individual granted patents in force, as of December 31	7,405	6,810
Inventions protected by patents, as of December 31	1,082	1,052

Code of Conduct

Metso Outotec Code of Conduct training is carried out every year and our latest training was launched in early November

2022.  Within the given timeframe, 97.8% (2021: 96.9%) of employees completed the training. Code of Conduct training is a

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

specific anti-corruption training to ensure a common understanding of Metso Outotec’s zero-tolerance for corruption and

bribery. We expect our suppliers to make every effort to comply with our Supplier Code of Conduct. In 2022, the specific focus

was on know-your-customer (KYC) procedures in high-risk countries and regions.

Compliance management

Metso Outotec has an audit framework in place to support risk management by assessing compliance and driving continuous

development. In total, 20 internal audits were performed in 2022.

In addition, 29 reports of suspected financial misconduct and 34 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 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 execution of requirements related to international data transfers, including

updating relevant safeguard mechanisms.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 6

Corporate governance and remuneration

Metso Outotec Annual General Meeting 2022

Metso Outotec Corporation’s Annual General Meeting (AGM) was held on April 21, 2022, 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 2021 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 0.24 per share from the financial year

2021 in two installments. The first dividend installment of EUR 0.12 per share was paid on May 2, 2022, and the second

installment of EUR 0.12 per share was paid on November 7, 2022.

Metso Outotec’s Board composition and remuneration

The AGM resolved to elect nine 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. Brian Beamish and Terhi Koipijärvi

were elected as new Board members. The term of office 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 156,000

•Vice Chair: EUR 82,500

•Other members: EUR 67,000 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 23,800 for the Chair of the Audit & Risk Committee

•EUR 10,300 each for the other members of the Audit & Risk Committee

•EUR 12,400 for the Chair of the Remuneration and HR Committee

•EUR 5,150 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 22, 2022.

The AGM also resolved to approve the following meeting fees, unchanged from the previous term: 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, and EUR 900 for meetings with remote attendance.

Authorized public accounting firm Ernst & Young Oy was re-elected as Auditor for a term ending at the closing of the Annual

General Meeting 2023. 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 Oyj – Board of Directors’ report and financial statements 2022 7

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

Piia Karhu, President, Metals

Sami Takaluoma, President, Services

Heikki Metsälä, President, Consumables

Nina Kiviranta, General Counsel

Carita Himberg, Chief People Officer, Human Resources

Personnel

Metso Outotec had 16,705 employees (15,630 employees) at the end of December 2022.

Personnel by area


Share, %	2022
Europe	32
North and Central America	14
South America	29
Asia Pacific and Greater China	12
Africa, Middle East, and India	13
Total	100

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. After the

company repurchased 3,036,000 of its own shares in August, treasury shares totaled 3,336,505 on December 31, 2022.

Metso Outotec share performance on Nasdaq Helsinki


EUR	2022
Closing price	9.61
Highest share price	10.59
Lowest share price	5.92
Volume-weighted average trading price	8.09

Other main events in 2022

Development of the Metals business

On January 17, 2022, Metso Outotec announced that it will transfer its Hydrometallurgy business from the Metals segment to

the Minerals segment and commence a strategic review in the remaining Metals business area. The target of the review is to

evaluate the best environment for developing the Metals business and its strategic fit in Metso Outotec’s business portfolio.

Restated segment information for 2021 was published on April 6.

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

On February 9, 2022, the Board of Directors decided to convey a total of 606,847 Metso Outotec’s treasury shares without

consideration to 60 key persons and executives in accordance with the terms and conditions of the Performance Share Plans

2019–2021 (PSP 2019–2021), Restricted Share Plan 2019–2021 (RSP 2019–2021) and Matching Share Plan directed to the

President and CEO (MSP 2018–2021). The directed share issue was based on an authorization given by the Annual General

Meeting held on April 23, 2021.

On June 30, 2022, a total of 17,669 of Metso Outotec's treasury shares were conveyed without consideration to the President

and CEO in the third and final matching share tranche of the Matching Share Plan originally decided by the Board of Metso

Corporation in 2018. The continuation of the plan in Metso Outotec was announced on July 1, 2020.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 8

Changes in the Metso Outotec Executive Team

On March 29, 2022, the following changes were made in the Metso Outotec Executive Team with immediate effect. Piia Karhu

was nominated President, Metals business area. Her previous role in the Executive Team was Senior Vice President,

Business Development. The previous President of the Metals business area, Jari Ålgars, resigned from Metso Outotec.

Acquisition of Tesab Engineering Ltd

On April 11, 2022, Metso Outotec signed an agreement to acquire Tesab Engineering Ltd, a Northern Ireland-based company

offering mobile crushing equipment for aggregates applications, including quarrying, recycling, asphalt and concrete. Tesab's

turnover in 2021 was approx. EUR 30 million, and it has more than 60 employees primarily in Europe. The acquisition was

completed in May.

Divestment of Metal Recycling business

On June 2, 2022, Metso Outotec announced the completion of the divestment of its metal recycling business line to Mimir, an

investment company based in Stockholm, Sweden.

Repurchase of own shares

Between August 9 and August 22, 2022, Metso Outotec repurchased a total of 3,036,000 own shares for an average price of

EUR 8.25 per share. The shares were repurchased on the basis of the authorization given by the Annual General Meeting and

will be used as a part of the company’s share-based incentive plans.

Acquisition of Global Physical Asset Management

On September 1, 2022, Metso Outotec closed the acquisition of Global Physical Asset Management, a technology provider

based in North America. The acquisition strengthened Metso Outotec’s capabilities in digital field service inspections for

grinding.

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

Directors of Metso Outotec

On December 9, 2022, Metso Outotec’s Shareholders’ Nomination Board published its proposals to the Annual General

Meeting, planned to be held on May 3, 2023. The Nomination Board proposes that the Board of Directors would have nine

members and that Brian Beamish, Klaus Cawén, Terhi Koipijärvi, Ian W. Pearce, Emanuela Speranza, Kari Stadigh, and Arja

Talma would be re-elected as Board members.

Christer Gardell and Antti Mäkinen have informed that they will not be available for re-election. Therefore, the Nomination

Board will propose that Niko Pakalén and Reima Rytsölä 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 Reima Rytsölä, who has been assessed to be independent of the

company but not independent of its significant shareholders.

The Nomination Board will propose fixed annual remuneration to the Board members as follows (current remuneration in

brackets):

•Chair EUR 164,000 (EUR 156,000)

•Vice Chair EUR 85,000 (EUR 82,500)

•Other members EUR 69,000 (EUR 67,000)

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 24,500 (EUR 23,800)

•Members of the Audit & Risk Committee EUR 10,500 (EUR 10,300)

•Chair of the Remuneration and HR Committee EUR 12,650 (EUR 12,400)

•Member of the Remuneration and HR Committee EUR 5,250 (EUR 5,150)

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 to

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 9

purchase Metso Outotec shares from the market at a price formed in public trading and that the purchase be carried out within

two weeks from the publication of the interim report for January 1 – March 31, 2023.

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

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

of 2023.

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 and Niko Pakalén did not participate in the decision-making concerning the remuneration of the Board members.

Commencement of new plan periods in long-term incentive plans targeted to Metso Outotec management and

key employees

On December 19, 2022, the Board of Directors approved the commencement of a new plan period 2023-2025 in the

company's following share-based long-term incentive programs: The Performance Share Plan (PSP) and the Restricted Share

Plan (RSP).

The establishment of the PSP and the RSP structure was originally published on July 1, 2020.

Russia business update

Metso Outotec condemns Russia’s military offensive against Ukraine and is deeply saddened by the humanitarian crisis it has

caused. Metso Outotec is not taking any new orders for deliveries to Russia and continued to wind-down its Russian business

operations and non-sanctioned customer contracts through final deliveries or termination agreements during the fourth

quarter, in line with its earlier disclosures.

In the second quarter, Metso Outotec booked a provision totaling EUR 150 million for wind-down and restructuring, which is

expected to cover the remaining exposure in Russia. Wind-down related final deliveries to non-sanctioned customers during

the last three quarters of the year amounted to EUR 124 million. Wind-down-related provisions totaled EUR 65 million at the

end of December.

Short-term business risks and market uncertainties

The current uncertainty in the global markets may affect Metso Outotec's market environment. Inflation has risen sharply and

is increasing production costs. The tightening of monetary policy by central banks to tackle inflation has led to higher financing

costs for investments. Whilst higher prices for minerals and metals typically have a positive impact on demand for Metso

Outotec's products and services, volatility is challenging both for customers and suppliers. Rising cost inflation and financing

costs as well as high foreign exchange rate volatility could have a negative impact on customers' capex decision-making.

Even though hedging of currency exposure is linked to firm delivery and purchase agreements, exchange rate fluctuations

may impact the company's financial position. There are also other market and customer-related risks that could cause on-

going projects to be postponed, delayed, discontinued or terminated.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 10

Global supply chains continue to face uncertainty, challenged by inflation and the availability of materials, components and

logistics. These challenges may be further exacerbated and affect the company’s ability to deliver on-time and/or on-budget.

The financial position of suppliers may be at risk and could also lead to challenges with on-time deliveries. If suppliers are

unable to deliver and the company is unable to find alternative sources in the time required, it may lead to contractual

penalties and/or obligations.

Uncertain market conditions could adversely affect 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.

Whilst Metso Outotec has made a provision for the wind-down of its customer contracts and operations in Russia, the extent

to which the wind-down can be finalized is still a risk and can lead to an increased risk of claims, disputes or lawsuits.

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. In discontinued operations, the company has identified a risk related to the UK waste-to-energy projects from

2015, where, in addition to delayed delivery and non-performance claims, the customer is claiming fraudulent

misrepresentation and deliberate breach in its claims and lawsuits. Metso Outotec has assessed it can protect itself against

these claims and lawsuits. Even though provisions have been made against these risks, the possibility of additional liabilities

materializing cannot be excluded.

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. Differing interpretations of

international contracts and laws may cause uncertainties in estimating the outcome of these disputes. The enforceability of

contracts in certain market areas may be challenging or difficult to foresee.

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 has changed its outlook and expects the overall market activity to remain at the current level in both the mining

and aggregates markets.

In its previously published outlook Metso Outotec expected the overall market activity to remain at the current level, with the

mining market remaining strong and the aggregates market declining due to the expected softening of the European market.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 11

Corporate governance statement

Metso Outotec has published a separate Corporate governance statement for 2022 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.

Statement of non-financial information

Metso Outotec, headquartered in Finland, has a presence globally in close to 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 it 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: Planet Positive offering and innovations and being a

Responsible and trusted partner. To be a responsible and trusted partner, Metso Outotec focuses on the continuous

development of Environmental efficiency in operations, Our people and culture, Health and safety, and Responsible

procurement, which in addition to Planet Positive offering 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. In addition, the reporting includes the industry-specific indicators (SASB Index) identified in the

Sustainability Accounting Standards Board’s (SASB) Industrial Machinery & Goods Standard. The Annual report 2022, which

includes a GRI supplement, will be published in March 2023.

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 the material topics that steer Metso Outotec’s sustainability activities. In addition, this

Statement of non-financial information includes information about the extent to which Metso Outotec activities are eligible and

aligned with the EU Taxonomy as required by the EU Taxonomy Regulation and the Finnish Accounting Act.

Business model and value creation

Metso Outotec’s extensive offering 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 portfolio to meet its customers’ growing needs for energy and emissions

reduction, water resources management, resource efficiency, circularity, and safety.

The basis for creating value are Metso Outotec’s established manufacturing and operations footprint and product offering, as

well as its ability to continuously innovate. Innovation is driven by the deep know-how of Metso Outotec’s 16,705 employees,

and several locations with research and development capabilities, as demonstrated by 7,405 national technology patents.

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

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, and in

2022 it paid EUR 112 million in taxes. In 2022, Metso Outotec paid EUR 199 million in dividends to its shareholders.

Risks, risk management system and policies

The non-financial risks in this statement have been identified in accordance with the Finnish Accounting Act and are separate

from the financial risks identified in note 4.1 of the Consolidated financial statements.

The principal risks related to Metso Outotec’s sustainability performance include health and safety, product quality,

environment, compliance, brand and reputation, as well as human rights, especially in its supply chain.

Climate change affects many aspects of Metso Outotec’s business. The company therefore regularly analyzes climate

change-related risks and opportunities and their potential impact on the business. Additionally, environmental legislation,

energy supply, global regulatory environment, and political and social unrest are factors that are considered. Among the

significant opportunities and risks identified for Metso Outotec are the ability to create environmentally efficient and safe

products to meet the future needs of customers and the ability to operate in a changing business environment. As part of the

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 12

sustainability content presented in the Annual report, Business overview, Metso Outotec reports on transitional and physical

risks as well as opportunities resulting from climate change, in accordance with the recommendations of the Task Force on

Climate-Related Financial Disclosures (TCFD).

Operating in a sustainable way and promoting sustainability throughout the value chain is a high priority for Metso Outotec, as

environmental, social or governance misconduct can affect 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 overall enterprise risk management. Under the direction of the Board of Directors, Metso

Outotec takes a systematic approach to managing non-financial matters, including implementing appropriate policies, risk

management, 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, define the basic requirements for meeting Metso Outotec’s

environmental, social and economic responsibilities.

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 international standards. Key units of Metso

Outotec are certified to ISO 9001 (quality), ISO 14001 (environment), and ISO 45001 (safety) standards.

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 offering and the

management of its supply chain to address these matters. Suppliers are regularly trained and audited. Furthermore, Metso

Outotec offers training and other services to customers to help ensure that they operate safely and efficiently.

Metso Outotec’s most significant environmental impacts result from the use of its products and processes by customers. As

presented in more detail below, Metso Outotec’s sustainable product offering and innovations are an important element in

managing these environmental impacts.

Planet Positive offering 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, dust and noise, impact on biodiversity as well as to comply with increasingly stringent

environmental legislation. In particular, developing innovative solutions that are more energy efficient 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 of ore to

achieve the same volume of metal, improving efficiency is key. Improvements in comminution efficiency can therefore result in

significant energy savings, reduce plant operating costs, increase resource efficiency, and reduce greenhouse gas emissions.

Metso Outotec’s Planet Positive offering, launched in 2021, is central to Metso Outotec’s sustainability agenda and the 1.5 °C

journey. Metso Outotec’s Planet Positive portfolio includes solutions that offer significant improvements in reducing energy and

carbon intensity, water use, pollution, and embedded carbon compared to an industry baseline or benchmark technology. In

addition, a Planet Positive product is required to perform at the same or preferably higher level than the industry benchmark in

terms of health and safety, pollution, and biodiversity impact. Electric solutions are an important part of the Planet Positive

portfolio and Metso Outotec’s offering for the minerals industry mainly uses electricity, allowing customers to choose

renewable energy sources. Our offering in aggregates is around 50% electric and also includes dual power source products.

Planet Positive sales in 2022 were EUR 1,338 million, which represents 25% of total sales. Metso Outotec aims to grow its

Planet Positive sales faster than overall sales. In the longer term (and to enable this growth), 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 targets 100% of its R&D project spend on projects with sustainability targets for energy efficiency, emissions

reductions, water efficiency, circularity, or safety improvements.

Several orders during 2022 included a significant proportion of Planet Positive technology serving future sales growth. These

included multiple orders for battery minerals processing plants supporting the global energy transition and electrification,

several tailings and dry stacking solutions for improved water efficiency and safety as well as orders for smelting, next

generation pelletizing and sulfuric acid plants driving decarbonization. During 2022, close to 30 Planet Positive products were

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 13

launched including new technologies, adapting to existing offering for new customer segments as well as updating existing

product families.

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. Companies that fall under the scope of the Non-Financial Reporting

Directive must 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 objectives and they meet minimum social safeguards.

In June 2021, 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 2022 reporting period, the share of taxonomy-eligible and

taxonomy-aligned activities (revenue, capex and opex) as well as qualitative information is disclosed for the climate-related

environmental objectives.

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 their industries in line with the overall Taxonomy

objectives. More specifically, 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 objectives.

For the eligibility assessment, Metso Outotec’s products mainly fall under the Taxonomy activities ‘3.6 Manufacture of other

low carbon technologies’, ‘3.9 Manufacture of iron and steel’, ‘8.2 Data-driven solutions for GHG emissions reductions’ and

‘9.1 Close to market research, development and innovation’. However, some services provided by Metso Outotec, whilst

enabling process optimization 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 sells parts purchased

from a subcontractor without altering or modifying them in any way or without owning the design of those parts, these parts

also fall outside of the scope of the EU Taxonomy.

In 2022, Metso Outotec assessed whether its eligible products meet the taxonomy alignment criteria regarding ‘substantial

contribution’, ‘do no significant harm’ (DNSH), and minimum social safeguards. Many of Metso Outotec’s products have the

potential to substantially contribute to the climate change mitigation objective of the EU taxonomy. These products are

considered to be enabling activities as they enable GHG emission reductions in other sectors of the economy (mining sector).

The alignment assessment of eligible products in activity ‘3.6 Manufacture of other low carbon technologies’, which requires a

life-cycle calculation of GHG emission savings, was completed for several Planet Positive products and will be extended in

2023 to the rest of the portfolio. The results of this assessment are shown in the tables below. In 2022, 22% of Metso

Outotec’s products and services in terms of revenue were assessed as taxonomy-aligned activities under the EU Taxonomy.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 14

Proportion of turnover from products and services associated with Taxonomy-aligned economic activities in 20221)

Substantial

contribution criteria

DNSH criteria (’Does

Not Significantly

Harm’) 4)

Economic activities

Code(s)

Absolute turnover (EUR million)

Proportion of turnover (%)

Climate change mitigation (%)

Climate change adaptation (%)

Water and marine resources (%)

Circular economy (%)

Pollution (%)

Biodiversity and ecosystems (%)

Climate change mitigation (Y/N)

Climate change adaptation (Y/N)

Water and marine resources (Y/N)

Circular economy (Y/N)

Pollution (Y/N)

Biodiversity and ecosystems (Y/N)

Minimum safeguards (Y/N)

Taxonomy

Aligned

proportion

of turnover,

2022 (%)

Cate-

gory

(enab-

ling

activity)

(E)

Category

(transitio-

nal

activity)

(T)

A. TAXONOMY-ELIGIBLE ACTIVITIES 2)

A.1 Environmentally sustainable activities (Taxonomy-aligned)

Manufacture of other low

carbon technologies

3.6

330.8

100

Manufacture of iron and

steel 3)

3.9

506.8

100

Close to market research,

development and

innovation

9.1

321.8

100

Turnover of

environmentally

sustainable activi-

ties (Taxonomy-aligned

(A.1)

1,159.5

100

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

Manufacture of other low

carbon technologies

3.6

3,524.1

Manufacture of iron and

steel 3)

3.9

26.3

0.5

Close to market research,

development and

innovation

9.1

28.5

0.5

Turnover of Taxonomy-

eligible but not environ-

mentally sustainable

activities (not Taxonomy-

aligned activities) (A.2)

3,579.0

Total (A.1 + A.2)

4,738.4

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-

non-eligible activities (B)

556.2

Total (A+B)

5,294.6

100

1) Figures reported are in line with Metso Outotec’s Consolidated financial statements 2022 and have been prepared in accordance with

International Financial Reporting Standards.

2) Includes products where Metso Outotec owns the design of the products, although the product might be manufactured by a subcontractor.

3) In its alignment assessment of the products allocated to Taxonomy activity 3.9, Metso Outotec included products where steel was

manufactured in electric arc furnaces or in induction furnaces which is a more energy efficient technology than an electric arc furnace and

where the steel scrap input relative to product output is not lower than 70% to produce high alloy steel.

4) ‘Do no significant harm’ was assessed for other environmental objectives: 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. Compliance with the criteria was justified where it was possible to demonstrate ‘do no significant harm’ based on internal

expert views, meeting local legislation requirements, and ISO standards.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 15

Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities in 20221) 4)

Substantial

contribution criteria

DNSH criteria (’Does

Not Significantly

Harm’)

Economic activities

Code(s)

Absolute CapEx (EUR million)

Proportion of CapEx (%)

Climate change mitigation (%)

Climate change adaptation (%)

Water and marine resources (%)

Circular economy (%)

Pollution (%)

Biodiversity and ecosystems (%)

Climate change mitigation (Y/N)

Climate change adaptation (Y/N)

Water and marine resources (Y/N)

Circular economy (Y/N)

Pollution (Y/N)

Biodiversity and ecosystems (Y/N)

Minimum safeguards (Y/N)

Taxonomy

aligned

proportion

of CapEx,

2022 (%)

Cate-

gory

(enab-

ling

activity)

(E)

Category

(transitio-

nal activity)

(T)

A. TAXONOMY-ELIGIBLE ACTIVITIES 2)

A.1 Environmentally sustainable activities (Taxonomy-aligned)

Manufacture of other low

carbon technologies

3.6

100

Manufacture of iron and

steel 3)

3.9

19.8

100

Close to market research,

development and

innovation

9.1

2.9

100

CapEx of environ-

mentally sustainable

activities (Taxonomy-

aligned) (A.1)

26.2

100

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

Manufacture of other low

carbon technologies

3.6

77.2

Manufacture of iron and

steel 3)

3.9

1.0

Close to market research,

development and

innovation

9.1

0.3

0.0

CapEx of Taxonomy-

eligible but not

environmentally

sustainable activities (not

Taxonomy-aligned

activities) (A.2)

78.5

Total (A.1 + A.2)

104.7

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-

eligible activities (B)

6.1

Total (A+B)

110.7

100

1) Figures reported are in line with Metso Outotec’s Consolidated financial statements 2022 and are based on the data prepared in accordance

with International Financial Reporting Standards.

2) Includes products where Metso Outotec owns the design of the products, although the product might be manufactured by a subcontractor.

3) In its alignment assessment of the products allocated to Taxonomy activity 3.9, Metso Outotec included products where steel was

manufactured in electric arc furnaces or in induction furnaces which is a more energy efficient technology than an electric arc furnace and

where the steel scrap input relative to product output is not lower than 70% to produce high alloy steel.

4) Capital expenditure (capex) includes investment in intangible assets and property, plant and equipment (EUR 114 million), as well as in

right-of-use assets (EUR 40 million) less non-operative investments (EUR -43 million), which are mainly related to office 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. In addition, for alignment assessment, the capital expenditure of each business area is allocated according to the aligned %

sales of that business area.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 16

Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities year 20221) 4)

Substantial contribution

criteria

DNSH criteria (’Does

Not Significantly

Harm’) 4)

Economic

activities

Code(s)

Absolute OpEx (EUR million)

Proportion of OpEx (%)

Climate change mitigation (%)

Climate change adaptation (%)

Water and marine resources (%)

Circular economy (%)

Pollution (%)

Biodiversity and ecosystems (%)

Climate change mitigation (Y/N)

Climate change adaptation (Y/N)

Water and marine resources (Y/N)

Circular economy (Y/N)

Pollution (Y/N)

Biodiversity and ecosystems (Y/N)

Minimum safeguards (Y/N)

Taxonomy-

aligned

proportion

of OpEx,

2022 (%)

Cate-

gory

(enab-

ling

activity)

(E)

Category

(transitio-

nal activity)

(T)

A. TAXONOMY-ELIGIBLE ACTIVITIES 2)

A.1 Environmentally sustainable activities (Taxonomy-aligned)

Manufacture of other low

carbon technologies

3.6

48.2

100

Manufacture of iron and

steel 3)

3.9

10.1

100

Close to market

research, development

and innovation

9.1

17.1

100

OpEx of

environmentally

sustainable activities

(Taxonomy-aligned)

(A.1)

75.4

100

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

Manufacture of other low

carbon technologies

3.6

65.1

Manufacture of iron and

steel 3)

3.9

0.4

0.0

Close to market

research, development

and innovation

9.1

0.9

1.0

OpEx of Taxonomy-

eligible but not

environmentally

sustainable activities

(not Taxonomy-aligned

activities) (A.2)

66.4

Total (A.1 + A.2)

141.8

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-

eligible activities (B)

7.7

Total (A+B)

149.4

100

1) Figures reported are in line with Metso Outotec’s Consolidated financial statements 2022 and are based on the data prepared in accordance

with International Financial Reporting Standards.

2) Includes products where Metso Outotec owns the design of the products, although the product might be manufactured by a subcontractor.

3) In its alignment assessment of the products allocated to Taxonomy activity 3.9, Metso Outotec included products where steel was

manufactured in electric arc furnaces or in induction furnaces which is a more energy efficient technology than an electric arc furnace and

where the steel scrap input relative to product output is not lower than 70% to produce high alloy steel.

4) Operating expenditure (opex) is defined as expenses related to research and development, building renovation measures, short-term lease,

maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment as

well as right-of-use assets, that are necessary to ensure the continued and effective functioning of such assets. Compared to the previous

year 2021, the definition has been revised, and all indirect costs such as oil, electricity, real estate tax, etc. have been excluded from the

amount. For the eligibility assessment, the operating expenditure of each Business Area is allocated according to the eligible % sales of that

Business Area. In addition, for the alignment assessment, the operating expenditure of each Business Area is allocated according to the

aligned % sales of that Business Area.

In addition to the activities listed in the tables above, Metso Outotec also has products in Taxonomy activity ‘8.2 Data-driven

solutions for GHG emissions reductions’. These products are often sold as part of another product and their sales are

therefore not recorded or reported separately.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 17

Environmental efficiency in operations

The combined CO2 emissions of Metso Outotec’s footprint, including its own operations, logistics, and suppliers was

1 044 944 tCO2 in 2022.

Metso Outotec aims to continuously reduce the impacts of its operations and has set science-based CO2 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 to work with suppliers to encourage

them to set their own science-based CO2 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 target to reach net

zero CO2 emissions in its own operations by 2030.

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 of every person in the company is expected from all employees. The

Code also applies to contractors, suppliers, customers, and Metso Outotec’s other business partners.

Metso Outotec recognizes that a diverse workforce is a strength that also impacts business results and aims to create and

sustain a work environment that values diversity and inclusion as well as 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 and promoted based on merit and experience.

Metso Outotec initiated a global fair pay analysis with an external partner in 2021 with a technical data analysis, followed by a

thorough review of the findings in 2022. In the analysis, various aspects related to pay were evaluated. The findings indicated

that Metso Outotec employees’ salary development is typically unbiased during their careers in the company. However, the

global fair pay analysis identified individual cases where unexplained gender-related pay gaps existed. These salary

differences could mostly be traced back to decisions made when employees were first hired.

In 2022, Metso Outotec made a one-time investment of EUR 2.2 million to correct these identified individual and unexplained

gender-related pay gaps. Salary increases were made for around 500 employees in some 20 countries. Metso Outotec

continues to strengthen its recruitment process to ensure unbiased salary decisions are made for all people joining the

company across the globe.

Our people and culture

Building a strong performance culture is defined as one of the four Tier-1 priorities for Metso Outotec, and the People and

Culture agenda is embedded into the company’s overall business strategy. The focus areas in this agenda are leadership

development, growth of all employees, building the right organizational capabilities, and attracting, developing and engaging

current and future employees. Central to the agenda are also promoting the wellbeing of employees, enabling a great

employee experience, continuously developing teams and ways of working, as well as focusing on inclusion.

The well-being of employees is a priority at Metso Outotec, and many global and local activities were initiated in 2022. On a

global level, the company offers training and webinars in various well-being areas, such as remote leadership, and physical

and mental well-being. However, most concrete actions happen at a local level. There has been a significant improvement in

the well-being results in Metso Outotec’s employee engagement survey. In December 2022, the result was in the top 5% of

the external benchmark for health & wellbeing and mental wellbeing.

Metso Outotec is committed to developing a workplace where diversity and inclusion are embedded in the culture, fostered

and promoted. The key diversity and inclusion actions in 2022 included a fair pay analysis and corrective actions, building

inclusive talent acquisition practices, continuing the psychological safety training across the organization, as well as launching

the Conscious inclusion training and Women’s mentoring program.

During 2022 there was a significant improvement in the inclusion score measured in the employee engagement surveys. We

are now in the top 25% of the industry benchmark cohort. In the long term, we aim to be in the top 10%.

In 2022, more than 1,100 line managers participated in Metso Outotec’s key global leadership program,

Leaders4PositiveChange. In addition, a tailor-made program for our leaders was launched and the first 40 Metso Outotec

leaders completed the program in 2022.

Metso Outotec conducted four employee engagement surveys in 2022: 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 2022 was 51, which is in the top 10% of the industry benchmark.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 18

Health and safety

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. Metso Outotec continuously and actively mitigates the

occupational health and safety risks in its operations; Metso Outotec targets zero harm.

The key focus of Metso Outotec’s health and safety approach is the fatality prevention program. It includes high-level safety

directives that set out detailed health and safety requirements for all businesses. The program is focused on the 10 most

common risks that could cause severe injuries: chemicals, confined spaces, forklifts, hand tools, hazardous energy, lifting,

machine safety, road travel, working at heights and working at customer sites. These risks are mitigated in a range of ways,

including safety equipment and tools, working procedures, continuous training, and leadership involvement.

In addition, 10 Life-Saving Rules and actions that set out the requirements to prevent fatalities, especially in high-potential risk

environments, were launched in 2022. These rules are non-negotiable and a breach of these can result in serious

consequences not only for the employee or contractor involved but also for the supervisor and manager of the persons

involved. The Life-Saving Rules are focused on improving safety for operational employees and are complementary to Metso

Outotec’s Modus Operandi program, which sets out the expected behaviors for everyone working for Metso Outotec.

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 2022, and the total

recordable injury frequency rate (TRIFR), which was 2.8 in 2022. 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 top management to ensure proper investigations and corrective actions are completed. 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

operation and maintenance is considered in the early phases 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 is committed to respecting human rights and 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 its Human Rights, HR, Quality and EHS policies. In addition, the Metso Outotec Modern

Slavery Statement sets out practices and actions to mitigate any risk of modern slavery or human trafficking in Metso

Outotec’s own business and in its supply chain. Metso Outotec also supports and operates according to the principles

described in the OECD Guidelines for Multinational Enterprises. 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. We follow all applicable national laws and regulations regarding working hours and employee compensation. In

addition, Metso Outotec has assessed its human rights due diligence processes and is committed to regularly reviewing its

due diligence practices and human rights policies and procedures. 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 19

Responsible procurement

Due to the cyclical nature of its customer industries, Metso Outotec outsources a significant proportion of its manufacturing.

Metso Outotec expects its suppliers to follow its Supplier Code of Conduct, which is based on Metso Outotec’s Code of

Conduct, as well as established international best practices.

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 provisions

are covered by third-party supplier audits, supplier self-assessments and Metso Outotec’s internal supplier sustainability

audits. Key supplier requirements are also incorporated into contract obligations, and a contract breach can result in

consequences, including potential termination of a supplier relationship.

After an audit has been performed, suppliers are provided with audit findings and are subject to possible re-audits. In 2022,

131 supplier sustainability audits were conducted that included human rights topics. To further support our suppliers’

sustainability actions, we educate and advise our suppliers regarding their performance on sustainability. We have created

several supplier e-learning courses about our expectations for supplier sustainability, human rights, safety as well as the

Science Based Target (SBT) setting methodology for CO2 emissions reduction and how our suppliers can contribute to

reducing CO2 emissions in the supply chain. One key action in 2022 was engaging with suppliers regarding setting a science-

based target (SBT) for CO2 emissions reductions. 19.6 percent of procurement spend in 2022 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

efficiency, 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.

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, distributors and other representatives 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-corruption 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 supervisors, 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.

To mitigate risks and to ensure compliance with the company’s Code of Conduct, a training program was launched. The latest

training was launched in early November 2022; by the end of the year, 97.8% of employees had completed the training.

Employees are required to complete similar training every year. The Code of Conduct training is also a mandatory part of the

induction program for new employees.

The VP, Compliance and Risk Management regularly reports to the General Counsel and to the Audit and Risk Committee of

Metso Outotec’s Board of Directors regarding compliance cases and actions taken.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 20

Key non-financial performance indicators


Non-financial topic	Target for 2022	Key performance indicator	2022	2021
Environmental responsibility
CO2 emissions: Production (scope 1 & 2 (market based))	Decrease CO2 emissions by 64% compared to 2019 baseline	CO2 emission of own production	48,944 tCO2 (-60% compared to 2019)	52,390 tCO2 (-57% compared to 2019)
CO2 emissions: Logistics	Decrease CO2 emissions by 20% compared to 2019 baseline	CO2 emissions from logistics	153,000 tCO2 (-12% compared to 2019)	143,000 tCO21) (-18% compared to 2019)
Suppliers with CO2 targets	15% of procurement spend is with suppliers that have an SBT CO2 emission target	% of suppliers with an SBT target	19.6%	10.1%
Planet Positive portfolio	Grow Planet Positive sales by 3% faster than overall sales growth	Planet Positive sales (EUR million)	1,338	886 2)
Social responsibility and employees
Health and safety	Continuous improvement in lost-time injuries frequency rate	Lost-time injuries per million work hours (LTIFR)3)	1.1	1.1
	Continuous improvement in total recordable injury frequency rate	Total recordable injury frequency per million hours worked (TRIFR)3)	2.8	3.3
Our people and culture	Employee Net Promoter Score (eNPS) to be in top 10% of the industry benchmark	eNPS benchmark score range %	Top 10%	Top 25%
Human rights
Responsible procurement	100 supplier sustainability audits per year conducted in higher-risk areas	Number of supplier sustainability audits conducted	131	152
Anti-corruption and bribery
Code of Conduct training	All active employees, including blue-collar workers, trained on Code of Conduct. External workforce not included	Code of Conduct training participation rate (%)	97.8%	96.9%

1) During 2022, we updated the 2019 logistics CO2 emissions baseline to account for additional logistics emissions from US deliveries that

were previously excluded from the calculation. We also improved our logistics calculation methodology and updated the historical figures for

the period 2019-2021 to ensure consistency.

2) The Planet Positive sales figure (EUR 592 million) reported in the Annual report 2021 included only equipment and consumables sales and

excluded services which is now included in the figure.

3) 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 2022, Metso Outotec’s strategy and business model

•Business overview 2022, Metso Outotec’s value creation model

•Corporate governance 2022, Risk management at Metso Outotec

•Corporate governance 2022, Metso Outotec’s risk map

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 21

Shares and shareholders

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, 2022	828,972,440
Share capital on December 31, 2022	EUR 107,186,442.52
Market value on December 31, 2022	EUR 7,936.0 million
Listing date	July 1, 2020

Metso Outotec shares are also traded on alternative marketplaces like BATS CXE and BATS BXE.

Metso Outotec’s share and shareholders in 2022

On December 31, 2022, 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 at www.mogroup.com/corporate/investors/

shares.

At the end of 2022, Metso had approximately 84,175 shareholders in the book-entry system. The largest shareholder was

Solidium with 123,477,168 shares, equaling 14.9 percent of the Company’s shares. A total of 504,693,506 Metso Outotec

shares were traded on the Nasdaq Helsinki during 2022, equivalent to a turnover of EUR 4,080.4 million.

At the year-end, the members of Metso Outotec’s Board of Directors and President and CEO Pekka Vauramo held a total of

474,087 Metso Outotec shares, corresponding to 0.06 percent of the total number of shares and votes. More information

about management holdings is available in note 1.5.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 22

Share key figures


	2022	2021
Share capital, at the end of year, EUR million	107	107
Number of shares, at the end of year, pcs
Number of outstanding shares, pcs	825,635,935	828,047,419
Own shares held by the Parent Company, pcs	3,336,505	925,021
Total number of shares, pcs	828,972,440	828,972,440
Average number of outstanding shares, pcs	827,414,162	828,038,074
Average number of diluted shares, pcs	828,073,068	828,286,851
Earnings/share, basic, EUR	0.36	0.41
Earnings/share, diluted, EUR	0.36	0.41
Net operative cash flow/share, EUR	0.15	0.61
Dividend/share 1), EUR	0.30	0.24
Dividend 1), EUR million	248	199
Dividend/earnings 1), %	82	58
Effective dividend yield 1), %	3.1	2.6
P/E ratio	26.4	22.8
Equity/share, EUR	2.84	2.72

1) The amount for year 2022 is Board of Directors' proposal to the Annual General Meeting.

Share performance and trading on Nasdaq Helsinki


	2022	2021
Closing price, December 31, EUR	9.61	9.35
Market capitalization, December 31, EUR million	7,936.0	7,750.9
Trading volume, NASDAQ OMX Helsinki Ltd, shares	504,693,506	456,105,740
% of shares 1)	60.88%	55.02%
Trading volume, NASDAQ OMX Helsinki Ltd, EUR million	4,080.4	4,148.0
Average daily trading volume, pieces	1,994,836	1,809,943
Relative turnover, %	0.2%	0.2%
Share performance, %	2.8%	36.0%
Highest share price, EUR	10.59	10.29
Lowest share price, EUR	5.92	7.55
Average share price, EUR	8.09	9.14

1) Of the total amount of shares for public trading.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 23

Largest shareholders on December 31, 2022


	Owner	Shares and votes	% of total shares and voting rights
1	Solidium Oy	123,477,168	14.90
2	Ilmarinen Mutual Pension Insurance Company	24,502,343	2.96
3	Varma Mutual Pension Insurance Company	22,732,359	2.74
4	Elo Mutual Pension Insurance Company	11,167,000	1.35
5	Nordea Funds	9,606,726	1.16
	Nordea Pro Finland Fund	2,733,117	0.33
	Nordea Finnish Stars Fund	1,782,744	0.22
	Nordea Nordic Fund	990,128	0.12
	Nordea Finnish Index Fund	970,563	0.12
	Nordea Premium Asset Management Balanced Fund	549,411	0.07
	Nordea Life Assurance Finland Ltd.	536,371	0.06
	Nordea Premium Asset Management Moderate Fund	530,160	0.06
	Nordea Bank ABP	483,506	0.06
	Nordea Savings 50 Fund	337,687	0.04
	Nordea Säästö 25 Fund	237,760	0.03
	Nordea Premium Varainhoito Kasvu Fund	233,639	0.03
	Nordea Savings 75 Fund	221,640	0.03
6	The State Pension Fund	7,600,000	0.92
7	OP-Finland Funds	7,078,881	0.85
	OP-Finland Fund	4,336,713	0.52
	OP Life Assurance Company Ltd	1,778,948	0.21
	OP-Finland Index Fund	963,220	0.12
8	Mandatum Life Insurance Company Limited	4,333,356	0.52
9	Aktia Funds	4,310,000	0.52
	Aktia Capital	2,560,000	0.31
	Aktia Nordic	550,000	0.07
	Aktia Nordic Small Cap	400,000	0.05
	Aktia Secura	400,000	0.05
	Aktia Euro	400,000	0.05
10	Svenska litteratursällskapet i Finland r.f.	3,693,246	0.45
11	Metso Outotec Corporation	3,336,505	0.40
12	Veritas Pension Insurance Company Ltd.	3,250,000	0.39
13	Sigrid Jusélius Foundation	2,738,598	0.33
14	Danske Invest Finnish Equity Fund	2,662,950	0.32
15	Säästöpankki Kotimaa Fund	2,283,248	0.28
16	Samfundet folkhälsan i Svenska Finland rf	2,143,764	0.26
17	Evli Finland Select Fund	2,030,000	0.24
18	Oy Etra Invest Ab	2,000,000	0.24
19	The Finnish Cultural Foundation	1,971,228	0.24
20	OMX Helsinki 25 Exchange Traded Fund	1,740,706	0.21
	20 largest owner groups in total	242,658,078	29.27

	Nominee-registered holders	429,692,022	51.83
	Other shareholders	156,588,026	18.89
	In the joint book-entry account	34,314	0.00
	Total	828,972,440	100.00

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 24

Breakdown of share ownership on December 31, 2022


Number of shares	Shareholders	% of shareholders	Total number of shares and votes	% of total shares and voting rights
1–100	20,702	24.60	973,219	0.12
101–1,000	41,340	49.12	17,538,020	2.12
1,001–10,000	20,028	23.80	56,720,661	6.84
10,001–100,000	1,919	2.28	46,477,927	5.61
100,001–1,000,000	135	0.16	41,047,385	4.95
1,000,001 and above	30	0.04	236,488,978	28.53
Total	84,154	100.00	399,246,190	48.16

Nominee-registered shares	12	0.00	429,692,022	51.83
In the joint book-entry account	0	0.00	34,228	0.00
Number of shares issued			828,972,440	100.00

Breakdown by shareholder category on December 31, 2022


Share, %	2022	2021
Nominee-registered and non-Finnish holders	57%	57%
Solidium Oy	15%	15%
Private investors	13%	13%
Finnish institutions, companies, and foundations	15%	15%
Total	100%	100%

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 at www.mogroup.com/

corporate/media/news.

Incentive plans

Metso Outotec’s share ownership plans are part of the management remuneration program. For further information, see at

www.mogroup.com/corporate/investors/governance/remuneration 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 effect on the share value.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 25

Key figures


EUR million	2022	2021	2020	2019	2018
Sales	5,295	4,236	3,319	2,819	2,581
Operating profit (EBIT)	504	425	239	316	268
% of sales	9.5%	10.0%	7.2%	11.2%	10.4%
Profit before taxes	441	386	201	282	242
% of sales	8.3%	9.1%	6.1%	10.0%	9.4%
Profit for the period for continuing operations	329	294	149	217	169
% of sales	6.2%	6.9%	4.5%	7.7%	6.5%
Profit for the period for discontinued operations	-28	48	-11	7	–
Profit for the period	301	342	138	223	169
% of sales	5.7%	8.1%	4.2%	7.9%	6.5%
Profit attributable to shareholders of the company	301	342	138	224	170

Amortization of intangible assets	66	72	85	16	16
Depreciation of tangible assets	52	51	41	31	30
Depreciation of right-of-use assets	38	38	30	22	—
Depreciation and amortization, total	156	161	157	69	46
% of sales	2.9%	3.8%	4.7%	2.4%	1.8%

EBITA	570	498	324	332	283
% of sales	10.8%	11.7%	9.8%	11.8%	11.0%
EBITDA	660	587	396	385	314
% of sales	12.5%	13.8%	11.9%	13.6%	12.2%

Finance income and expenses, net	63	39	38	33	26
% of sales	1.2%	0.9%	1.2%	1.2%	1.0%
Interest expenses	44	23	30	32	26
% of sales	0.8%	0.6%	0.9%	1.1%	1.0%
Interest cover	10.4x	14.9x	10.4x	11.5x

Gross capital expenditure	114	91	86	90
% of sales	2.1%	2.1%	2.6%	3.2%
Net capital expenditure	105	69	83	82
% of sales	2.0%	1.6%	2.5%	2.9%
Net cash flow from operating activities before financial items and taxes	322	608	587	173	207
Cash conversion, %	49%	104%	148%	45%

Research and development	64	66	56	39
% of sales	1.2%	1.6%	1.7%	1.4%

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 26


EUR million	2022	2021	2020	2019	2018
Balance sheet total	6,754	5,830	5,567	3,457	2,979
Equity attributable to shareholders	2,342	2,250	2,037	1,252	1,173
Total equity	2,350	2,251	2,040	1,254	1,183
Interest-bearing liabilities	1,293	952	1,345	1,001	673
Net working capital (NWC)	596	254	413	853	629
% of sales	11.3%	6.0%	12.5%	30.3%	24.4%
Capital employed	3,643	3,173	3,437	2,255	1,863
Return on equity (ROE), %	13.7%	16.0%	8.3%	18.4%	15.1%
Return on capital employed (ROCE) before taxes, %	14.2%	14.1%	8.6%	16.2%	14.2%
Return on capital employed (ROCE) after taxes, %	10.9%	11.7%	6.5%	12.9%	10.5%
Net debt	684	470	799	772	239
Gearing, %	29.1%	20.9%	39.2%	61.5%	20.2%
Equity to asset ratio, %	39.2%	43.2%	39.5%	39.1%	44.0%
Debt to capital, %	33.3%	26.7%	37.2%	42.1%	36.3%
Debt to equity, %	50.0%	36.4%	59.1%	72.6%	56.9%

Orders received	6,096	5,605	4,340	3,009	2,871
Order backlog, December 31	3,902	3,990	2,233	1,408	1,411

Personnel at end of year	16,705	15,630	15,466	12,894	10,367

Key figures for 2019 and 2018 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 effect to goodwill, non-current deferred tax assets and liabilities, income tax liabilities, other current

liabilities and liabilities held for sale.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 27

Formulas for the key figures


Earnings before finance expenses, net, taxes and amortization, adjusted (adjusted EBITA)	=	Operating profit + adjustment items + amortization
	=	Operating profit + adjustment items + amortization

Earnings per share, basic	=	Profit attributable to shareholders
Earnings per share, basic	=	Average number of outstanding shares during the year

Earnings per share, diluted	=	Profit attributable to shareholders
Earnings per share, diluted	=	Average number of diluted shares during the year

Interest cover	=	EBITDA
Interest cover	=	Finance income and expenses, net

Cash conversion, %	=	Net cash flow from operating activities before financial items and taxes	x 100
Cash conversion, %	=	EBITDA	x 100

Return on equity (ROE), %	=	Profit for the year	x 100
Return on equity (ROE), %	=	Total equity (average for the period)	x 100

Return on capital employed (ROCE) before taxes, %	=	Profit before tax + finance expenses	x 100
Return on capital employed (ROCE) before taxes, %	=	Capital employed (average for the period)	x 100

Return on capital employed (ROCE) after taxes, %	=	Profit for the period + finance expenses	x 100
Return on capital employed (ROCE) after taxes, %	=	Capital employed (average for the period)	x 100

Gearing, %	=	Net interest-bearing liabilities	x 100
Gearing, %	=	Total equity	x 100

Equity to assets ratio, %	=	Total equity	x 100
Equity to assets ratio, %	=	Balance sheet total - advances received	x 100

Debt to capital, %	=	Interest-bearing liabilities – lease liabilities	x 100
Debt to capital, %	=	Total equity + interest-bearing liabilities – lease liabilities	x 100

Debt to equity, %	=	Interest-bearing liabilities – lease liabilities	x 100
Debt to equity, %	=	Total equity	x 100

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

Gross capital expenditure	=	Investments in intangible assets and property, plant, and equipment, associated companies, and joint ventures

Net capital expenditure	=	Gross capital expenditure less divestment of intangible assets and property, plant, and equipment, associated companies, and joint ventures

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	=	Net income + depreciation and amortization and other non-cash items - change in net working capital - interests and other financial items paid (net) - taxes paid

Net cash flow from operating activities / share, EUR	=	Net cash flow from operating activities
Net cash flow from operating activities / share, EUR	=	Outstanding shares at end of period

Effective dividend yield, %	=	Dividend per share	x 100
Effective dividend yield, %	=	Trading price at the end of the year	x 100

Price / earnings ratio (P/E)	=	Trading price at the end of the year
Price / earnings ratio (P/E)	=	Earnings per share

Equity / share	=	Equity attributable to shareholders
Equity / share	=	Number of outstanding shares at the end of the period

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 28

Board of Directors’ proposal on the use of profit

On December 31, 2022, the distributable equity of Metso Outotec Corporation was:


Invested non-restricted equity fund	EUR	433,376,746.22
Own shares	EUR	-27,935,122.14
Retained earnings	EUR	348,530,708.09
Net profit for the year	EUR	280,625,023.24
Distributable equity, total	EUR	1,034,597,355.41

The Board of Directors proposes that a dividend of EUR 0.30 per share be paid based on the balance sheet to be adopted for

the financial year, which ended December 31, 2022, and the remaining portion of the profit be retained and carried forward in

the Company’s unrestricted equity.


Dividend payment	EUR	247,690,780.50
Distributable equity after dividend payment	EUR	786,906,574.91

These financial statements were authorized for issue by the Board of Directors on February 16, 2023, after which, in

accordance with Finnish Company Law, the financial statements are either approved, amended, or rejected in the Annual

General Meeting.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 29

Consolidated financial statements, IFRS

Consolidated statement of income


EUR million	Note	2022	2021
Sales	1.1, 1.2	5,295	4,236
Cost of sales	1.5, 3.4	-3,909	-3,058
Gross profit		1,386	1,178

Selling and marketing expenses	1.3, 1.5, 3.4	-445	-348
Administrative expenses	1.3, 1.5, 3.4	-331	-321
Research and development expenses	1.3, 1.5, 3.4	-64	-66
Other operating income	1.4	178	108
Other operating expenses	1.4	-219	-125
Share of results of associated companies	5.3	-1	-1
Operating profit		504	425

Finance income	1.7	14	4
Foreign exchange gains/losses	1.7	-14	-4
Finance expenses	1.7	-63	-40
Finance income and expenses, net		-63	-39

Profit before taxes		441	385

Income taxes	1.8	-112	-92
Profit for the year for continuing operations		329	294

Profit from discontinued operations	5.5	-28	48
Profit for the year		301	342

Profit attributable to
Shareholders of the Parent company		301	342
Non-controlling interests		0	0

Profit from continuing operations attributable to
Shareholders of the Parent company		329	294
Non-controlling interests		0	0

Earnings per share, EUR 1)	1.9	0.36	0.41
Earnings per share for continuing operations, EUR 1)	1.9	0.40	0.35

1) Basic and diluted.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 30

Consolidated statement of comprehensive income


EUR million	Note	2022	2021
Profit for the year		301	342

Other comprehensive income
Cash flow hedges, net of tax	1.8, 4.4, 4.8	3	-13
Currency translation on subsidiary net investment	1.8, 4.4	13	46
Items that may be reclassified to profit or loss in subsequent periods		17	33

Defined benefit plan actuarial gains and losses, net of tax	1.8, 2.7	2	5
Items that will not be reclassified to profit or loss		2	5

Other comprehensive income total		18	38

Total comprehensive income		319	380

Attributable to
Shareholders of Parent company		319	380
Non-controlling interests		0	0

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 31

Consolidated balance sheet – Assets


EUR million	Note	2022	2021
Non-current assets
Goodwill and intangible assets	3.1, 3.4
Goodwill		1,128	1,124
Intangible assets		844	878
Total goodwill and intangible assets		1,972	2,002

Property, plant and equipment	3.2, 3.4
Land and water areas		40	35
Buildings and structures		117	121
Machinery and equipment		193	174
Assets under construction		57	43
Total property, plant and equipment		407	373

Right-of-use assets	3.3, 3.4	115	127

Other non-current assets
Investments in associated companies	5.3	6	7
Non-current financial assets	4.2	2	4
Loan receivables	4.2	5	6
Derivative financial instruments	4.8	3	2
Deferred tax assets	1.8	225	178
Other non-current receivables	2.3, 4.2	20	38
Total other non-current assets		262	234

Total non-current assets		2,756	2,737

Current assets
Inventories	2.4	1,846	1,269
Trade receivables	2.2	799	668
Customer contract assets	1.2	354	324
Loan receivables	4.2	3	3
Derivative financial instruments	4.8	86	46
Income tax receivables	1.8	48	36
Other current receivables	2.3	263	210
Liquid funds	4.3	601	473
Total current assets		3,998	3,028

Assets held for sale	5.5	–	65

TOTAL ASSETS		6,754	5,830

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 32

Consolidated balance sheet – Equity and liabilities


EUR million	Note	2022	2021
Equity	4.4
Share capital		107	107
Share premium fund		20	20
Cumulative translation adjustments		-150	-164
Fair value and other reserves		1,122	1,130
Retained earnings		1,243	1,156
Equity attributable to shareholders		2,342	2,250

Non-controlling interests		7	1

Total equity		2,350	2,251

Liabilities
Non-current liabilities
Borrowings	4.2, 4.5	998	627
Lease liabilities	4.2, 4.5	87	104
Post-employment benefit obligations	2.7	96	124
Provisions	2.6	59	45
Derivative financial instruments	4.8	33	6
Deferred tax liabilities	1.8	193	209
Other non-current liabilities	2.5	2	2
Total non-current liabilities		1,470	1,117

Current liabilities
Borrowings	4.2, 4.5	176	192
Lease liabilities	4.2	31	30
Trade payables	2.5	787	692
Provisions	2.6	248	178
Advances received	1.2	281	235
Customer contract liabilities	1.2	474	388
Derivative financial instruments	4.8	47	52
Income tax liabilities	1.8	138	76
Other current liabilities	2.5	752	585
Total current liabilities		2,934	2,428

Total non-current and current liabilities		4,404	3,544

Liabilities held for sale	5.5	–	35

TOTAL EQUITY AND LIABILITIES		6,754	5,830

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 33

Consolidated statement of changes in shareholders’ equity


EUR million	Share capital	Share premium fund	Cumulative translation adjustments	Fair value and other reserves	Retained earnings	Equity attributable to share- holders	Non- controlling interests	Total equity
Jan 1, 2022	107	20	-164	1,130	1,156	2,250	1	2,251

Profit for the period	–	–	–	–	301	301	0	301

Other comprehensive income
Cash flow hedges, net of tax	–	–	–	3	–	3	–	3
Currency translation on subsidiary net investments	–	–	13	–	–	13	0	13
Defined benefit plan actuarial gains (+) / losses (-), net of tax	–	–	–	–	2	2	–	2
Total comprehensive income	–	–	13	3	303	319	0	319

Dividends	–	–	–	–	-199	-199	–	-199
Redemption of own shares	–	–	–	-25	–	-25	–	-25
Share-based payments, net of tax	–	–	–	14	-3	11	–	11
Other items	–	–	–	0	-6	-6	–	-6
Changes in non- controlling interests	–	–	–	–	-9	-9	7	-2
Dec 31, 2022	107	20	-150	1,122	1,243	2,342	7	2,350

For more information, please see note 4.4 Equity.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 34


EUR million	Share capital	Share premium fund	Cumulative translation adjustments	Fair value and other reserves	Retained earnings	Equity attributable to share- holders	Non- controlling interests	Total equity
Jan 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	–	4
Other items	–	–	–	–	2	2	0	2
Changes in non- controlling interests	–	–	–	–	-7	-7	-2	-10
Dec 31, 2021	107	20	-164	1,130	1,156	2,250	1	2,251

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 35

Consolidated statement of cash flows


EUR million	Note	2022	2021
Operating activities
Profit for the period, continuing operations		329	294
Profit for the period, discontinued operations		-28	48
Adjustments
Depreciation and amortization	3.4	156	167
Finance expenses, net	1.7	63	39
Income taxes	1.8	113	92
Other items		65	-2
Change in net working capital	2.1	-377	-31
Net cash flow from operating activities before financial items and taxes		322	608
Interests paid		-27	-22
Interests received		3	1
Other financing items, net		-49	-14
Finance income and expenses paid, net		-73	-35
Income taxes paid	1.8	-121	-64
Net cash flow from operating activities		127	508

Investing activities
Capital expenditures on intangible assets and property, plant, and equipment	3.1, 3.2	-114	-91
Proceeds from sale of intangible assets and property, plant, and equipment	3.1, 3.2	10	22
Proceeds from and investments in financial assets, net	4.6	2	–
Business acquisitions, net of cash acquired	5.4	-21	–
Proceeds from sale of businesses, net of cash sold	5.4, 5.5	-9	74
Proceeds from sale of associated companies	5.3	–	1
Increase in loan receivables	4.6	0	-1
Decrease in loan receivables	4.6	1	1
Net cash flow from investing activities		-132	6

Financing activities
Dividends paid		-198	-166
Proceeds from increases in non-current debt	4.6	499	–
Repayment of non-current debt	4.6	-253	-350
Proceeds from and repayment of current debt, net	4.6	140	-37
Repayment of lease liabilities	4.6	-35	-38
Purchase of treasury shares	4.4	-25	–
Net cash flow from financing activities		127	-591

Net change in liquid funds		122	-78
Effect from changes in exchange rates		5	14
Cash classified as assets held for sale		–	0
Liquid funds equivalents at beginning of year	4.3, 4.6	473	537
Liquid funds at end of year	4.3, 4.6	601	473

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 36

Notes to the Consolidated financial statements

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 Office 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 16, 2023, 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

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.

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.

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 differ

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 affect 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 differ 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 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

Metso Outotec has reviewed the estimates and assumptions used in the preparation of the Consolidated financial statements

for the possible impact of the Covid-19 pandemic. The estimates and assumptions used reflect management’s best judgment

on the possible impacts of the pandemic.

Metso Outotec has reviewed the estimates and assumptions used in the preparation of the Consolidated financial statements

for the possible impacts of climate change. These have been reviewed not to have any immediate impact to the Consolidated

financial statements.

Metso Outotec has reviewed estimates and assumptions used in the preparation of the Consolidated financial statements

due to the impact of Russia’s military offensive against Ukraine. The company booked a EUR 150 million provision in year

2022 for wind-down of customer projects in Russia. This reflects management’s best judgment on the possible remaining

exposure. The bookings related to the wind-down of the business in Russia have affected the following items in the

Consolidated financial statements: revenue recognition and expenses, provisions, inventories and trade receivables.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 37

Abbreviations used in the Board of Directors' report and financial statements

AGMAnnual General Meeting

EGMExtraordinary General Meeting

Capex Capital expenditure

CGUCash generating unit

DNSH Does not significantly harm

EBITEarnings before finance expenses, net and taxes (operating profit)

EBITAEarnings before finance expenses net, taxes and amortization

EBITDAEarnings before finance expenses net, taxes, amortization, and depreciation

EMTN Euro Medium Term Note program

eNPS Employee net promoter score

EPS Earnings per share

FASFinnish accounting standards

GHG Greenhouse gases

GRI Global reporting initiative

HSEHealth, safety, and environment

IFRICInterpretations of International financial reporting standards

IFRS/IASInternational financial reporting standards

KPIKey performance indicator

LTIFLost-time incident frequency

NWCNet working capital

OCIOther comprehensive income

OpEx Operating expenditure

OTCOver the counter

P/EPrice/earnings ratio

PPEProperty, plant, and equipment

PSPPerformance share incentive plan

QEHS Quality, environmental, health, and safety

R&DResearch and development

RFRRelief from royalty method

ROCE Return on capital employed

ROEReturn on equity

RSPRestricted share incentive plan

SASB Sustainability Accounting Standards Board

SBT Science-based target

TCFD Task Force on Climate-related Financial Disclosures

TRIFR Total recordable injury frequency

TSR Total shareholder return

WACCWeighted average cost of capital

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 38

1. Group performance

1.1. Reporting segments

Accounting policy

Reportable segments of Metso Outotec are based on end customer groups, which are differentiated by both offering 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 Consolidated 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 effect 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 is a front-runner in sustainable technologies, end-to-end solutions and services for the aggregates, minerals

processing and metals refining industries globally. We improve our customers’ energy and water efficiency, increase their

productivity, and reduce environmental risks with our product and process expertise.

Reportable segments of Metso Outotec are based on end customer groups, which are differentiated by both offering and

business model: Aggregates, Minerals, and Metals.

Aggregates offers 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 concentrates to refined metals.

Group Head Office and other is comprised of the Parent company with centralized group functions, such as treasury, tax,

legal and compliance, as well as the global business services and holding companies.

Finance income and expenses as well as income taxes are not allocated to segments but included in the income statement of

Group Head Office and other. The treasury activities of Metso Outotec are centralized into the Group Treasury to benefit from

cost efficiency 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-offs made to the value of receivables and inventories, and impairment and other write-offs

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.

Metso Outotec’s segment structure changed as of January 1, 2022. The Hydrometallurgy business in the Metals segment was

transferred to the Minerals segment. In addition to changes in the Minerals and Metals segments, small changes were made

in the Aggregates segment that relate to the McCloskey and P.J. Jonsson och Söner businesses; business that had previously

been reported under the equipment business was reclassified and reported as services. Due to the segment structure change

of January 1, 2022, Metso Outotec’s comparison figures for 2021 have been restated according to the new segment structure.

The restatement had no impact on the Group’s total figures.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 39

Segment information


2022
EUR million	Aggregates	Minerals	Metals	Group Head Office and Other	Total
Sales, external	1,446	3,359	489	0	5,295
Sales, intra-group	–	–	–	–	–
Sales, total	1,446	3,359	489	0	5,295

Earnings before interest, tax and amortization (EBITA)	211	415	53	-109	570
% of sales	14.6	12.4	10.9		10.8

Adjusted EBITA	213	502	52	-37	731
% of sales	14.8	15.0	10.7		13.8

Adjustment items and amortization of intangible assets
Adjustment items total	-2	-88	1	-73	-162
Amortization of other intangible assets total	-16	-43	-5	-2	-66

Operating profit / loss	195	372	49	-112	504
% of sales	13.5	11.1	10.0		9.5

Finance income and expenses, total	–	–	–	-63	-63

Income before taxes	195	372	49	-175	441

Inventories	652	1,109	85	0	1,846
Trade receivables	238	516	29	16	799
Other non-interest-bearing receivables	52	135	35	149	371
Customer contract assets and liabilities, net	3	-189	65	0	-121
Trade payables	-242	-464	-55	-26	-787
Advances received	-76	-202	-3	0	-281
Other non-interest-bearing liabilities	-153	-590	-257	-231	-1,231
Net working capital	473	315	-101	-91	596

Adjustment items by category


EUR million	2022	2021
Capacity adjustment costs	-12	-59
Acquisition costs	0	6
Profits on disposals, net	0	3
Wind down of Russian business	-150	–
Adjustments items, total	-162	-50

Because of the Russia’s military offensive against Ukraine, Metso Outotec is not taking any new orders for deliveries to Russia

and continued to wind-down its Russian business operations and non-sanctioned customer contracts. Metso Outotec booked

a provision totaling EUR 150 million for wind-down and restructuring, which is expected to cover the remaining exposure in

Russia. Wind-down is mostly related to Minerals segment.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 40

Segment information


2021
EUR million	Aggregates	Minerals	Metals	Group Head Office and Other	Total
Sales, external	1,202	2,724	310	0	4,236
Sales, intra-group	–	–	–	–	–
Sales, total	1,202	2,724	310	0	4,236

Earnings before interest, tax and amortization (EBITA)	162	360	20	-44	498
% of sales	13.5	13.2	6.4		11.8

Adjusted EBITA	161	371	24	-8	547
% of sales	13.4	13.6	7.7		12.9

Adjustment items and amortization of intangible assets
Adjustment items total	1	-11	-4	-36	-50
Amortization of other intangible assets total	-14	-49	-7	-3	-73

Operating profit / loss	148	311	13	-47	425
% of sales	12.3	11.4	4.2		10.0

Finance income and expenses, total	–	–	–	-39	-39

Income before taxes	148	311	13	-86	385

Inventories	463	738	83	-15	1,269
Trade receivables	190	451	21	5	668
Other non-interest-bearing receivables	52	183	42	17	294
Customer contract assets and liabilities, net	-1	-10	-57	4	-64
Trade payables	-197	-404	-66	-25	-692
Advances received	-66	-164	-5	0	-235
Other non-interest-bearing liabilities	-155	-488	-317	-26	-986
Net working capital	285	306	-299	-38	254

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 41

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 Europe, North and Central America as well as Asia-Pacific, accounting for approximately 68 percent of sales. Metso

Outotec has a global network of production units located in key continents.

Sales to unaffiliated customers by destination


EUR million	2022	2021
Finland	80	97
Europe	1,114	1,102
North and Central America	1,211	861
South America	915	677
APAC	1,185	878
Africa, Middle East & India	790	622
Sales	5,295	4,236

During year 2022 Metso Outotec has been winding down its business in Russia due to the military offensive against Ukraine.

Sales in Russia during 2022 totaled EUR 238 million (EUR 437 million in 2021).

Metso Outotec's exports from Finland by destination, including intra-group sales


EUR million	2022	2021
Europe	444	228
North and Central America	394	209
South America	162	118
APAC	559	273
Africa, Middle East & India	333	246
Total	1,891	1,074

Non-current assets by location


EUR million	2022	2021
Finland	173	182
Europe	123	144
North and Central America	113	95
South America	79	70
APAC	104	107
Africa, Middle East & India	192	181
Non-allocated	1,740	1,773
Total	2,523	2,552

During year 2022 Metso Outotec has been winding down its business in Russia due to the military offensive against Ukraine.

The amount of non-current assets in Russia were EUR 0 million in 2022 (EUR 2 million in 2021). The amount of liquid funds in

Russia was EUR 14 million on December 31, 2022.

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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 42

Gross capital expenditure by location


EUR million	2022	2021
Finland	29	14
Europe	18	18
North and Central America	21	12
South America	18	20
APAC	10	12
Africa, Middle East & India	18	14
Total	114	91

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.

1.2. Sales

Accounting policy

Metso Outotec applies IFRS 15 Revenue from Contracts with Customers. The principle is that sales are recognized at an

amount that reflects the consideration 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 recognized 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 to date, 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 simultaneously receives and consumes the services

provided by Metso Outotec. 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.

Customer 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 customers. 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 43

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, affecting 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 effect 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.

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. Treasury Policy specifies certain currencies

and certain legal units, where the open exposures are left unhedged. Similarly open exposures below certain euro nominated

amount are left unhedged. When a firm commitment qualifies for over time recognition, the business unit applies hedge

accounting and recognizes the effect 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

unrecognized 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.

Metso Outotec’s segment structure changed as of January 1, 2022. Comparison figures for 2021 have been restated

according to the new segment structure. The restatement had no impact on the Group’s total figures. More information in note

1.1 Reporting segments.

Disaggregation of sales

External sales by category


2022
EUR million	Aggregates	Minerals	Metals	Total
Sales of services	477	2,030	67	2,574
Sales of projects, equipment and goods	970	1,329	422	2,721
Sales total	1,446	3,359	489	5,295

2021
EUR million	Aggregates	Minerals	Metals	Total
Sales of services	396	1,689	41	2,126
Sales of projects, equipment and goods	806	1,035	270	2,111
Sales total	1,202	2,724	310	4,236

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 44

External sales by timing of sales recognition


2022
EUR million	Aggregates	Minerals	Metals	Total
At a point in time	1,425	2,252	63	3,740
Over time	21	1,106	426	1,554
Sales total	1,446	3,359	489	5,295

2021
EUR million	Aggregates	Minerals	Metals	Total
At a point in time	1,183	1,990	42	3,215
Over time	18	735	268	1,021
Sales total	1,202	2,724	310	4,236

External sales by destination


2022
EUR million	Aggregates	Minerals	Metals	Total
Finland	31	36	13	80
Europe	446	543	125	1,114
North and Central America	597	585	29	1,211
South America	66	843	6	915
APAC	164	849	171	1,185
Africa, Middle East & India	142	503	145	790
Sales total	1,446	3,359	489	5,295

2021
EUR million	Aggregates	Minerals	Metals	Total
Finland	39	44	15	97
Europe	424	570	107	1,101
North and Central America	428	424	10	861
South America	46	624	7	677
APAC	146	632	100	878
Africa, Middle East & India	120	431	72	622
Sales total	1,202	2,724	310	4,236

Contract balances


EUR million	2022	2021
Trade receivables	799	668
Customer contract assets	354	324
Customer contract liabilities	474	388
Advances received	281	235

Customer contract liabilities and advances received are annually recognized as sales mainly during the following year.

When providing standardized equipment as well as wear and 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 45

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 contract 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.

Unsatisfied performance obligations

The order backlog, amounting to EUR 3,825 million on December 31, 2022, 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, wear and 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 2022 and 2021, Metso Outotec did not have any single customer whose sales would have exceeded 10 percent of

consolidated sales.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 46

1.3. Selling, general, and administrative expenses


EUR million	2022	2021
Marketing and selling expenses	-445	-348
Research and development expenses, net	-64	-66
Administrative expenses	-331	-321
Selling, general and administrative expenses	-840	-734

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	2022	2021
Research and development expenses, total	-54	-61
Capital expenditure	5	4
Grants received	4	2
Depreciation and amortization	-19	-10
Research and development expenses, net	-64	-66

1.4. 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

denominated 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 finance 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	2022	2021
Other operating income
Gain on sale of intangible and tangible assets	5	8
Rental income	1	1
Foreign exchange gains 1)	150	86
Other income	22	13
Other operating income total	178	108

Other operating expenses
Loss on disposed businesses	-2	–
Loss on sale of intangible and tangible assets	-1	-9
Impairment of intangible and tangible assets	-2	-13
Foreign exchange losses 1)	-197	-101
Other expenses	-17	-3
Other operating expenses total	-219	-125

Other operating income and expenses, net	-41	-18

1) Includes foreign exchange gains and losses resulting from trade receivables and payables and related derivatives.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 47

1.5. Personnel expenses and number of personnel

Personnel expenses


EUR million	2022	2021
Salaries and wages	-880	-774
Pension costs, defined contribution plans	-40	-54
Pension costs, defined benefit plans 1)	-6	-9
Other post-employment benefits 1)	-1	-1
Share-based payments 2)	-11	-8
Other indirect employee costs	-118	-96
Total	-1,056	-941

1) For more information on pension costs, see note 2.7.

2) For more information on share-based payments, see note 1.6.

Number of personnel


	2022	2021
Personnel at end of the year	16,705	15,630
Average number of personnel during the year	16,079	15,600

Board remuneration


EUR thousand	2022	2021
Serving Board members December 31, 2022:
Kari Stadigh	-182	-182
Klaus Cawén	-107	-107
Brian Beamish 2)	-87	–
Christer Gardell	-87	-84
Terhi Koipijärvi 2)	-88	–
Antti Mäkinen	-94	-93
Ian W. Pearce	-109	-118
Emanuela Speranza	-99	-104
Arja Talma	-106	-105

Former Board members
Mikael Lilius 1)	–	-3
Matti Alahuhta 1)	–	-3
Hanne de Mora 1)	–	-7
Total	-959	-806

1) Metso Outotec Board member until April 23, 2021.

2) Metso Outotec Board member since April 21, 2022.

According to the resolution of the 2022 Annual General Meeting, the fixed annual fees paid to the Board members is as

follows: Chair of the Board EUR 156,000, Vice Chair of the Board EUR 82,500, and other Board members EUR 67,000. An

additional annual remuneration is paid to the member of the Board elected in the position of Chair of the Audit and Risk

Committee EUR 23,800, members of the Audit and Risk Committee EUR 10,300, Chair of the Remuneration and HR

Committee EUR 12,400, and members of the Remuneration and HR Committee EUR 5,150.

In addition, the Annual General Meeting resolved to approve the following meeting fees for each Board and committee

meeting: 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, and EUR 900 for meetings with remote attendance.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 48

Remuneration paid to Chief Executive Officer and other Executive Team members


2022
EUR	Salary	Fringe benefits	Performance bonus paid	Share-based payment	Total
President and CEO Pekka Vauramo	858,768	3,135	791,484	2,499,528	4,152,915
Other Executive Team members	2,613,926	68,736	1,211,736	4,307,306	8,201,704
Total	3,472,694	71,871	2,003,220	6,806,834	12,354,619


2021
EUR	Salary	Fringe benefits	Performance bonus paid	Share-based payment	Total
President and CEO Pekka Vauramo	815,216	29,438	1,344,255	349,387	2,538,296
Other Executive Team members	2,955,061	82,180	1,920,632	891,281	5,849,154
Total	3,770,277	111,618	3,264,887	1,240,668	8,387,450

Remuneration paid to President and CEO Pekka Vauramo in 2022 is presented in the table above. Mr. Vauramo participates in

remuneration programs according to 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 2024.

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, 2022, and December 31, 2021,

these pension premium payments for the supplementary defined contribution pension plan totaled approximately EUR 215

thousand and EUR 211 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, 2022, and December 31, 2021, these pension premium payments totaled

EUR 581 thousand and EUR 561 thousand, respectively.

Board share ownership in Metso Outotec


Shares (pcs)	2022
Kari Stadigh	68,325
Klaus Cawén	37,685
Brian Beamish	1,738
Christer Gardell	44,063
Terhi Koipijärvi	3,725
Antti Mäkinen	18,806
Ian W. Pearce	26,500
Emanuela Speranza	5,200
Arja Talma	30,426
Total	236,468

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 49

Executive Team share ownership in Metso Outotec


Shares (pcs)	2022
Pekka Vauramo	237,619
Markku Simula	66,851
Heikki Metsälä	1,314
Markku Teräsvasara	72,863
Sami Takaluoma	79,636
Eeva Sipilä	175,254
Nina Kiviranta	31,016
Piia Karhu	915
Carita Himberg	–
Total	665,468

1.6. 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

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 2022–2024

The earning criteria for the PSP 2022–2024 is based on the total shareholder return of Metso Outotec's share, earnings per

share and an ESG measure linked to sales growth of Planet Positive portfolio. At the end of 2022, there were 185 participants

in the plan, and the potential reward corresponds to a maximum of 1,692,200 Metso Outotec shares, out of which the Metso

Outotec Executive Team can receive a maximum reward of 490,000 shares. The potential reward will be paid in 2025.

Restricted Share Plan 2022–2024

At the end of 2022, there were 21 participants in the RSP plan, and the potential reward corresponds to a 87,900 Metso

Outotec shares. The potential reward will be paid in 2025.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 50

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 2022, there were 170 participants in the plan,

and the potential reward corresponds to a maximum of 2,455,904 Metso Outotec shares, out of which the Metso Outotec

Executive Team can receive a maximum reward of 756,100 shares. The potential reward will be paid in 2024.

Restricted Share Plan 2021–2023

At the end of 2022, there were 22 participants in the RSP plan, and the potential reward corresponds to a 121,000 Metso

Outotec 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 combination of the businesses. At the end of 2022, there were 8

participants in the plan, and the potential reward corresponds to a maximum of 837,800 Metso Outotec shares, out of which

the Metso Outotec Executive Team can receive a maximum reward of 837,800 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. No new plan periods will be started

from the 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 2022, there were 135 participants in the DSP plan, and the potential reward corresponds to 852,118 Metso

Outotec shares, out of which a Metso Outotec Executive Team member can receive a potential reward of 6,550. The potential

reward will be paid in 2023.

Metso Performance and Restricted Share Plans

In December 2014, Metso's Board decided on long-term share-based incentive plans: the 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 would 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. No new plan

periods will be started from Metso's Performance or Restricted Share Plans.

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 2018–2020

The earning criteria for the PSP 2018–2020 and the potential reward was 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 was 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 belonging to Metso Outotec

Executive Team 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. For 7 participants a total of 272,089 Metso Outotec treasury shares were paid, out

of which Metso Outotec Executive Team members received a net reward of 242,834 shares. The reward was paid in February

2022.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 51

Restricted Share Plan 2019–2021

A total of 56,542 Metso Outotec treasury shares were used to pay reward to two participants belonging to Metso Outotec

Executive Team in February 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

DSUP 2019-2021 plan was paid in cash to 84 employees in June 2022.

Outotec Performance Share Plan

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. No new plan periods will be started from Outotec's Performance Share Plans.

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 was based on operating result (EBIT) and free cash

flow. A total of 260,547 Metso Outotec treasury shares were paid to 58 participants, out of which Metso Outotec Executive

Team members received a net reward of 58,484 shares. The reward was paid in February 2022.

Matching Share Plan

Metso Outotec had one active Matching Share Plan for President and CEO Pekka Vauramo. The plan required a personal

investment in Metso Outotec shares. The potential reward corresponded to a maximum of 117,075 gross Metso Outotec

shares to be delivered in three installments 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.

For the first installment, net amount of 20,742 Metso Outotec treasury shares were used to pay reward in February 2021. For

the second and third installments, net amount of 17,669 each, were paid respectively in February 2022 and June 2022. There

are no undue payments from the CEO's Matching Share Plan.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 52

Beneficiaries of and granted shares under the share ownership plan


December 31, 2022	Beneficiaries total	Shares total
Matching Share Plan 2018–2022
Granted 2022	1	35,338

Outotec LTIP 2019
Granted 2022	58	260,547

Plan DSUP 2019–2021 1)
Granted 2022	84

Plan PSP 2019–2021
Granted 2022	7	272,089

Plan RSP 2019–2021
Granted 2022	2	56,542

1) Cash payment.

Costs recognized for the share ownership plans


EUR thousand	2022	2021
Plan PSP and DSUP 2018–2020	–	-2,257
Plan PSP, DSUP and RSP 2019–2021	-201	-3,696
Plan PSP and DSUP 2020–2022	-3,926	-3,186
Outotec LTIP 2019	-286	-1,195
Plan PSP and RSP 2021–2023	-4,472	-3,350
Plan PSP and RSP 2022-2024	-1,628	0
Total	-10,513	-13,684

1.7. Finance income and expenses


EUR million	2022	2021
Finance income
Dividends received	0	0
Interest income	3	1
Other finance income	11	2
Finance income	14	4

Foreign exchange gains/losses	-14	-4

Finance expenses
Interest expenses from financial liabilities at amortized cost	-39	-18
Interest expenses on lease liabilities	-5	-5
Other finance expenses	-19	-17
Finance expenses	-63	-40

Finance income and expenses, net	-63	-39

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 53

1.8. Income taxes

Accounting policy

Income taxes in the consolidated income statement includes taxes of subsidiaries and the parent company 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 differences 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 different

from the estimated amounts, the difference will impact the income tax in the period in which such determination is made.

Components of income taxes


EUR million	2022	2021
Income taxes for current year	-182	-131
Income taxes for prior years	6	6
Change in deferred tax asset and liability	65	34
Income taxes	-112	-92

Differences between income tax expense computed at the Finnish statutory rate and income tax expense provided on

earnings


EUR million	2022	2021
Profit before taxes	441	385

Income tax at Finnish statutory tax rate of 20.0%	-88	-77
Effect of different tax rates in foreign subsidiaries	-24	-14
Non-deductible expenses	-14	-12
Tax exempt income or tax incentives	8	20
Foreign non-creditable withholding taxes	-7	-4
Deferred tax liability on undistributed earnings	2	5
Income tax for prior years	4	1
Other	7	-10
Income taxes	-112	-92

Tax effects of components in other comprehensive income


	2022			2021
EUR million	Before taxes	Tax	After taxes	Before taxes	Tax	After taxes
Cash flow hedges	3	1	3	-16	3	-13
Defined benefit plan actuarial gains (+) / losses (-)	9	-7	2	6	-1	5
Currency translation on subsidiary net investments	13	–	13	46	–	46
Total comprehensive income	25	-7	18	36	2	38

Current year tax		–			–
Deferred tax		-7			2
Total		-7			2

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 54

Accounting policy

The deferred tax asset or liability is determined for temporary differences 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 differences 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 assets can be used. Deferred tax assets are offset 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 difficult 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.

Deferred tax assets are recognized for unused tax losses to the extent that it is probable to be utilized against the future

taxable profit. Significant management judgement is required to determine the amount of deferred tax assets that can be

recognized, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.

In certain cases, the losses are related to subsidiaries that have losses which may neither expire nor may be used to offset

taxable income elsewhere in the Group. The subsidiaries neither have any taxable temporary difference nor any tax planning

opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, in certain

jurisdictions the Group has determined that it cannot recognize deferred tax assets on the tax losses carried forward.

Deferred tax liability on undistributed retained earnings in subsidiaries will be recognized when the dividend distribution is

probable in the future, and it will cause a tax impact. At the end of year 2022 and 2021 there were no substantial undistributed

earnings in subsidiaries from which a deferred tax liability is not booked.

Reconciliation of deferred tax balances


2022
EUR million	Jan 1	Charged to income statement	Charged to shareholders’ equity	Acquisitions and disposals	Translation differences and Group items	Dec 31
Deferred tax assets
Tax losses carried forward	–	2	–	1	0	2
Intangible assets and property, plant and equipment	37	-6	–	0	1	31
Inventory	60	19	–	–	0	79
Provisions	31	30	–	–	1	61
Accruals	23	9	0	–	0	32
Pension related items	8	4	-7	–	0	6
Other	49	-22	0	–	5	31
Total deferred tax assets	209	35	-7	1	6	244
Offset against deferred tax liabilities	-31	–	–	–	12	-19
Net deferred tax assets	178	35	-7	1	19	225

Deferred tax liabilities
Purchase price allocations	178	-14	–	1	–	166
Intangible assets and property, plant and equipment	12	4	–	–	0	15
Other	51	-20	1	–	0	31
Total deferred tax liabilities	240	-30	1	1	0	212
Offset against deferred tax assets	-31	–	–	–	12	-19
Net deferred tax liabilities	209	-30	1	1	12	193

Deferred tax assets (+) / liabilities (-), net	-32	65	-8	0	6	31

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 55

Reconciliation of deferred tax balances, comparison period


2021
EUR million	Jan 1	Charged to income statement	Charged to shareholders’ equity	Acquisitions and disposals	Translation differences and Group items	Dec 31
Deferred tax assets
Tax losses carried forward	13	-13	–	–	–	–
Intangible assets and property, plant and equipment	30	8	–	-1	0	37
Inventory	47	13	–	–	0	60
Provisions	32	-1	–	–	0	31
Accruals	15	7	–	–	1	23
Pension related items	10	-3	1	–	0	8
Other	25	12	2	0	9	49
Total deferred tax assets	173	23	3	-1	11	209
Offset against deferred tax liabilities	-24	–	–	–	-7	-31
Net deferred tax assets	149	23	3	-1	3	178

Deferred tax liabilities
Purchase price allocations	188	-11	–	–	2	178
Intangible assets and property, plant and equipment	14	-3	–	–	0	12
Other	45	3	1	–	1	51
Total deferred tax liabilities	247	-11	1	–	4	240
Offset against deferred tax assets	-24	–	–	–	-7	-31
Net deferred tax liabilities	223	-11	1	–	-4	209

Deferred tax assets (+) / liabilities (-), net	-74	34	2	-1	7	-32

1.9. Earnings per share

Basic

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.

Earnings per share


	2022	2021
Profit attributable to shareholders of the company, EUR million	301	342
Weighted average number of shares issued and outstanding (in thousands)	827,414	828,038
Earnings per share, basic, EUR	0.36	0.41

Earnings per share, continuing operations


	2022	2021
Profit attributable to shareholders of the company, continuing operations, EUR million	329	294
Weighted average number of shares issued and outstanding (in thousands)	827,414	828,038
Earnings per share, basic, EUR	0.40	0.35

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 56

Diluted

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 effect. Own shares held by Metso Outotec are reissued within the terms of the share ownership plans to

key personnel, if the targets defined in the plans 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,

2022, Metso Outotec held 3,336,505 own shares to be used as consideration under share ownership plans.

Earnings per share, diluted


	2022	2021
Profit attributable to shareholders of the company, EUR million	301	342
Weighted average number of shares issued and outstanding (in thousands)	827,414	828,038
Adjustment for potential shares distributed (in thousands)	659	249
Weighted average number of diluted shares issued and outstanding (in thousands)	828,073	828,287
Earnings per share, basic, diluted, EUR	0.36	0.41

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 57

2. Operational assets and liabilities

2.1. Net working capital and capital employed

Net working capital


	Balance sheet value		Cash flow effect
EUR million	2022	2021	2022	2021
Inventories	1,846	1,269	-600	-212
Trade receivables	799	668	-126	-121
Other non-interest-bearing receivables	372	294	-18	0
Customer contract assets and liabilities, net	-121	-64	73	122
Trade payables	-787	-692	85	142
Advances received	-281	-235	32	80
Other non-interest-bearing liabilities	-1,231	-986	178	-43
Net working capital	596	254	-377	-31

Capital employed


EUR million	2022	2021
Net working capital	596	254
Intangible assets	1,972	2,002
Property, plant and equipment	407	373
Right-of-use assets	115	127
Non-current investments	8	11
Interest-bearing receivables	8	9
Liquid funds	601	473
Tax payables and receivables, net	-59	-72
Interest payables, net	-5	-6
Capital employed	3,643	3,173

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 58

2.2. 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 offered 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 the 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 off 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 off.

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.


EUR million	2022	2021
Trade receivables	796	665
Trade receivables for sale	2	3
Total	799	668

Trade receivables classified as held for sale	–	15
Total	799	683

Provision on trade receivables by aging category


	2022		2021
EUR million	Trade receivables, gross	of which provided	Trade receivables, gross	of which provided
Undue	566	1	496	1
overdue 1–30 days	96	0	42	0
overdue 31–180 days	113	4	127	2
overdue 181–360 days	24	6	21	3
overdue over 360 days	99	88	87	84
Total, gross	898	100	773	90
Total, net	799		683

Realized write-offs amounted to EUR 2 million in 2022 (EUR 5 million in 2021).

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 59

Provision for impairment of trade receivables


EUR million	2022	2021
Accumulated provision, January 1	90	85
Impact of exchange rates	0	1
Acquisitions	–	–
Impact in income statement	9	9
Other change	0	-5
Accumulated provision, December 31	100	90

2.3. Other receivables

Accounting policy

Other non-interest-bearing receivables are recognized in the balance sheet at original 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


	2022			2021
EUR million	Non- current	Current	Total	Non- current	Current	Total
Derivative instruments	3	86	88	2	46	47
Deferred tax assets	225	–	225	178	–	178
Income tax receivables	–	48	48	–	36	36

Other receivables
Prepaid expenses and accrued income	–	69	69	–	45	45
VAT, payroll tax and social charge receivables	–	152	152	–	125	125
Pension assets	2	–	2	18	–	18
Other receivables	19	42	61	20	40	60
Other receivables total	20	263	283	38	210	247

Non-interest-bearing receivables total	248	396	644	217	291	508

Other non-interest-bearing receivables included EUR 17 million in 2022 (EUR 14 million in 2021) of Brazilian tax credits

arising from delivery of goods and transfer of services (ICMS) recognized by local subsidiaries. Of that amount EUR 2 million

in 2022 (EUR 2 million in 2021) was classified as long-term.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 60

2.4. 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 and sales costs in different market conditions. It also entails management's assessment of the

general market trends in global markets.


EUR million	2022	2021
Materials and supplies	288	199
Work in process	600	439
Finished products	958	631
Inventories	1,846	1,269

For continuing operations, the cost of inventories recognized as expense amounted to EUR 3,822 million in 2022 (EUR 2,974

million in 2021).

Changes in provision for inventory obsolescence


EUR million	2022	2021
Balance at beginning of year	55	41
Impact of exchange rates	4	4
Additions charged to expense	61	25
Used reserve	0	0
Deductions / other additions	-21	-14
Classification as held for sale	–	-2
Balance at end of year	99	55

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 61

2.5. 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.


	2022			2021
EUR million	Non-current	Current	Total	Non-current	Current	Total
Trade payables	–	787	787	–	692	692

Derivative instruments	33	47	80	6	52	58

Other payables
Accrued interests	–	6	6	–	6	6
Accrued personnel costs	–	203	203	–	165	165
Accrued project costs	–	358	358	–	252	252
VAT, payroll tax and social charge payables	–	64	64	–	78	78
Other payables	2	121	123	2	84	86
Other payables	2	752	754	2	585	587

2.6. 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 effect.

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 compensation 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 62

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 environmental

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 performance 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 differ 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.

Metso Outotec has reviewed estimates and assumptions used in the preparation of the Consolidated financial statements

due to the impact of Russia’s military offensive against Ukraine. Metso Outotec booked a provision totaling EUR 150 million

for wind-down and restructuring, which is expected to cover the remaining exposure in Russia. Wind-down related provisions

totaled EUR 65 million at year-end.

Provisions


	2022			2021
EUR million	Non-current	Current	Total	Non-current	Current	Total
Warranty and guarantee provision	0	90	90	0	74	74
Project loss provisions	27	84	112	15	79	94
Restructuring provision	1	3	4	1	7	8
Environmental remedial provision	0	1	1	0	0	1
Other provisions 1)	31	70	101	28	18	45
Total	59	248	307	45	178	223

1) Includes provisions related to Russia wind-down, lawsuits and personnel liabilities.

Changes in provisions


2022
EUR million	Warranty and guarantee provision	Project loss provisions	Restructuring provision	Environmental remediation provision	Total
Carrying value at beginning of year	74	94	8	1	177
Impact of exchange rates	1	0	0	0	1
Business disposals	0	–	0	–	0
Addition charged to expense	39	37	2	1	78
Used reserve	-16	-4	-2	0	-22
Reversal of reserve / other changes	-9	-15	-4	0	-28
Carrying value at end of year	90	112	4	1	206

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 63

2.7. Post-employment obligations

Accounting policy

Metso Outotec has several different 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 finance 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 differs 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

Pension arrangements in Germany, the US, the UK and Canada together represent 82% of Metso Outotec’s defined benefit

obligation and 74% 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 directly 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 for 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 2023 are EUR 7 million. Metso Outotec paid contributions of EUR 11 million to defined

benefit plans in 2022.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 64

Amounts recognized as of December 31 in the balance sheet


	2022			2021
EUR million	Pension benefits	Other post- employment benefits	Total	Pension benefits	Other post- employment benefits	Total
Present value of funded obligations	88	–	88	125	–	125
Fair value of plan assets	-89	–	-89	-143	–	-143
Total	-1	–	-1	-18	–	-18

Present value of unfunded obligations	66	29	95	89	35	123
Unrecognized asset	1	–	1	1	0	1
Total	67	29	96	72	35	107

Amounts in the balance sheet
Liabilities	67	29	97	90	35	124
Assets	-1	–	-1	-18	0	-18
Liabilities classified as held for sale	–	–	–	0	–	0
Net liability	67	29	96	72	35	107

Movements in the net liability recognized in the balance sheet (total)


EUR million	2022	2021
Net liability at beginning of year	107	112
Adjustments due to business combinations	–	-1
Reclassification	1	5
Net expense recognized in the income statement	6	7
Employer contributions	-11	-8
Gain (+) / loss (-) recognized through OCI	-9	-9
Translation differences	2	1
Net liability at end of year	96	107

Amounts recognized through the income statement


		2022			2021
EUR million	Pension benefits	Other post- employment benefits	Total	Pension benefits	Other post- employment benefits	Total
Employer's current service cost	2	2	3	2	1	3
Net interest on net surplus (+) / deficit (-)	0	1	2	0	1	1
Settlements	0	–	0	2	0	2
Gain (-) / loss (+) recognized in income statement	0	0	0	0	0	0
Recognition of past service cost (+) / credit (-)	–	–	–	0	0	0
Administration costs paid by the scheme	1	–	1	1	0	1
Expense (+) / income (-) recognized in income statement	3	3	6	5	1	7

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 65

Amounts recognized through OCI


		2022			2021
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 (-)	43	–	43	-1	–	-1
Actuarial gain (-) / loss (+) on liabilities due to change in financial assumptions	-58	-5	-63	-9	-2	-11
Actuarial gain (-) / loss (+) on liabilities due to change in demographic assumptions	0	0	0	0	0	0
Actuarial gain (-) / loss (+) on liabilities due to experience	9	2	11	0	1	1
Gain (-) / loss (+) as result of asset ceiling	0	–	0	1	–	1
Total gain (-) / loss (+) recognized through OCI	-5	-4	-9	-8	-1	-9

Changes in the value of the defined benefit obligation


		2022			2021
EUR million	Pension benefits	Other post- employment benefits	Total	Pension benefits	Other post- employment benefits	Total
Defined benefit obligation at beginning of year	214	35	249	242	29	271
Other adjustment to present value	1	–	1	-1	6	5
Employer's current service cost	2	2	3	2	1	3
Interest cost	3	1	4	3	1	3
Business combinations	-1	0	-1	0	0	-1
Plan participant contributions	–	–	–	0	0	0
Past service cost (+) / credit (-)	–	0	0	0	0	0
Actuarial gain (-) / loss (+) due to change in financial assumptions	-58	-5	-63	-9	-2	-11
Actuarial gain (-) / loss (+) on liabilities due to change in demographic assumptions	0	0	0	0	0	0
Actuarial gain (-) / loss (+) due to experience	9	1	10	0	1	2
Settlements	-2	–	-2	-19	0	-19
Benefits paid from the arrangement	-6	–	-6	-7	0	-7
Benefits paid direct by employer	-4	-5	-9	-4	-3	-7
Translation differences	-5	2	-4	8	2	10
Defined benefit obligation at end of year	154	30	183	214	35	249

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 66

Changes in the fair value of the plan assets during the year


	2022	2021
EUR million	Pension and other post-employment benefits total
Fair value of assets at beginning of year	143	159
Interest income on assets	3	2
Return on plan assets excluding interest income	-43	1
Assets distributed on settlements	-2	-21
Business combinations	-1	0
Employer contributions	5	8
Plan participant contributions	–	0
Benefits paid from the arrangements	-6	-7
Benefits paid direct by employer	-4	-7
Administration expenses paid from the scheme	-1	-1
Translation differences	-6	9
Fair value of assets at end of year	89	143

Major categories of plan assets as a percentage of total plan assets as of December 31


		2022			2021
	Quoted	Unquoted	Total	Quoted	Unquoted	Total
Equity securities	6%	0%	6%	10%	0%	10%
Bonds	2%	0%	2%	3%	0%	3%
Cash	6%	0%	6%	5%	0%	5%
Insurance contracts	0%	63%	63%	0%	19%	19%
Other	8%	14%	22%	21%	43%	63%
Total	23%	77%	100%	38%	62%	100%

As of December 31, 2022, there were no plan assets invested in affiliated or property occupied by affiliated companies.

Principal actuarial assumptions on December 31 expressed as weighted averages


%	2022	2021
Benefit obligation:
Discount rate	4.15%	1.63%
Rate of salary increase	3.18%	2.79%
Rate of pension increase	2.58%	2.37%
Expense in income statement:
Discount rate	1.63%	1.16%
Rate of salary increase	2.79%	2.63%
Rate of pension increase	2.37%	2.01%

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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 67

Weighted average life expectancy used for the major defined benefit plans


	2022		2021
Life expectancy at age of 65 for a male member, who is	currently aged 65	currently aged 45	currently aged 65	currently aged 45
Germany	20.6	23.4	20.5	23.2
United States	20.7	22.2	20.6	22.1
United Kingdom	21.8	22.4	22.1	22.7
Canada	22.0	23.0	22.0	23.0

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


	2022			2021
%	Pension	Other	Total	Pension	Other	Total
Discount rate
Increase of 0.25%	-4.3	-0.6	-4.9	-7.7	-0.9	-8.6
Decrease of 0.25%	4.5	0.7	5.2	8.2	0.9	9.1

Salary increase rate
Increase of 0.25%	–	0.2	0.2	0.0	0.2	0.2
Decrease of 0.25%	–	-0.2	-0.2	0.0	-0.2	-0.2

Pension increase rate
Increase of 0.25%	1.4	n/a	1.4	2.9	–	2.9
Decrease of 0.25%	-1.3	n/a	-1.3	-2.7	–	-2.7

Medical cost trend
Increase of 0.25%	n/a	1.0	1.0	–	1.3	1.3
Decrease of 0.25%	n/a	-0.9	-0.9	–	-1.2	-1.2

Life expectancy
Increase of one year	6.9	0.9	7.8	11.1	1.3	12.4
Decrease of one year	-6.6	-0.9	-7.5	-10.6	-1.2	-11.8

Weighted average duration of defined benefit obligation expressed in years


	2022			2021
In years	Pension	Other	Total	Pension	Other	Total
On December 31	11.8	9.4	11.5	15.0	10.2	14.4

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 68

3. Intangible and tangible assets

3.1. Goodwill and intangible assets

Accounting policy

Goodwill and 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 affected 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.

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.

Intangible assets

Intangible assets with a definite useful life, mainly trademarks, patents, licenses, IT software, or acquired order backlog are

measured at costs less accumulated amortization 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 69

Goodwill and intangible assets


2022
EUR million	Goodwill	Patents and licenses	Capitalized software	Other intangible assets	Goodwill and intangible assets total
Acquisition cost at beginning of year	1,124	102	20	1,057	2,321
Translation differences	-1	2	0	3	4
Business acquisitions	5	1	–	7	13
Capital expenditure	–	5	1	15	21
Reclassifications	–	0	0	0	0
Other changes	–	-9	-6	-1	-16
Acquisition cost at end of year	1,128	102	16	1,079	2,326

Accumulated depreciation at beginning of year	–	-80	-17	-203	-300
Translation differences	–	-2	0	-1	-4
Business acquisitions	–	0	–	–	0
Other changes	–	7	6	3	16
Amortization charges for the year, continuing operations	–	-4	-2	-60	-66
Accumulated depreciation at end of year	–	-79	-13	-261	-353

Net book value at end of year	1,128	24	3	818	1,972

2021 EUR million	Goodwill	Patents and licenses	Capitalized software	Other intangible assets	Goodwill and intangible assets total
Acquisition cost at beginning of year	1,136	120	102	1,036	2,396
Translation differences	8	3	1	3	16
Business disposals	-2	–	0	0	-2
Capital expenditure	–	3	0	12	15
Reclassifications	–	0	0	0	0
Other changes	–	-24	-83	3	-104
Acquisition cost at end of year	1,142	102	20	1,057	2,321

Accumulated depreciation at beginning of year	–	-91	-83	-136	-310
Translation differences	–	-3	-1	-1	-5
Business disposals	–	–	–	0	0
Other changes	–	27	83	3	113
Impairment losses	–	-5	-12	-9	-26
Amortization charges for the year, continuing operations	–	-8	-4	-60	-72
Accumulated depreciation at end of year	–	-80	-17	-203	-300

Reclassed to held for sale	–	–	0	-1	-1
Restatement	-18	–	–	-1	-19

Net book value at end of year	1,124	23	3	852	2,002

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 70

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 depreciation and

amortization. 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 of 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 efficiency savings over time. The value of benefits and savings expected from

the efficiency 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 deterioration in the global economy or political environment, observed significant under-performance

relative to projected future performance, and significant changes in Metso Outotec’s strategy.

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 reassessment of recoverable amounts and

remaining useful lives of assets. When 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. Metso Outotec assesses the effects of the

climate change to the future cash flows while performing the impairment calculations

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 affect the recoverable

amounts.

Goodwill allocation to cash generating units


EUR million	2022	2021
Balance at the beginning of year	1,124	1,118
Translation differences	-1	8
Acquisitions and disposals	5	-2
Balance at the end of year	1,128	1,124


EUR million	Minerals	Aggregates	Metals	Total
Balance at the end of year	839	204	85	1,128

Annual impairment test in 2022

On December 31, 2022, goodwill totaled EUR 1,128 million. In accordance with the Metso Outotec reporting structure,

goodwill is allocated to the reportable segments, Aggregates, Minerals, and Metals. 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 2022. 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 71

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 years estimate period	6.9%	6.0%	8.9%
EBITDA % range in four years estimate period	15.6%–19.5%	14.7%–17.5%	9.9%–12.5%
Growth rate in the terminal period	2.0%	2.0%	2.0%
WACC after tax	9.2%	9.2%	9.2%
WACC before tax	11.6%	11.7%	11.6%

Values assigned to key assumptions reflect past experience and the management’s expectations 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 Metso Outotec’s market environment, considering the current

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 2 p.p.	Terminal growth from 2% to 1.5%
Minerals	-22%	-5%
Aggregates	-24%	-6%
Metals	-25%	-6%

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 affect the terminal value. Based

on these sensitivity analyses, 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 2022, the sensitivity analysis did not indicate risks

of impairment.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 72

3.2. 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 equipment3–20 years

Land and water areas are not depreciated.

Expected useful lives are reviewed at each balance sheet date and, if they differ significantly 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 other 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.

Metso Outotec reviews the climate change related matters which may affect the estimated residual value, expected useful

lives of assets and the possible reflected changes in the recognized amount of depreciation or amortization.

Capitalized interests

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

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

and presented as a net of expenses 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 73

Property, plant, and equipment


2022
EUR million	Land and water areas	Buildings and structures	Machinery and equipment	Assets under construction	PPE total
Acquisition cost at beginning of year	35	235	586	43	899
Translation differences	0	0	5	0	5
Business acquisitions	–	2	3	–	5
Business disposals	0	0	-5	0	-5
Capital expenditure	8	4	38	42	93
Reclassifications	1	2	23	-27	0
Divestments and other changes	-3	-11	-27	-1	-42
Acquisition cost at end of year	40	233	624	57	954

Accumulated depreciation at beginning of year	–	-113	-410	–	-523
Translation differences	–	0	-5	–	-5
Business acquisitions	–	-1	-1	–	-2
Business disposals	–	0	5	–	5
Divestments and other changes	–	7	25	–	32
Write-downs	–	0	-1	–	-1
Depreciation charges for the year	–	-9	-43	–	-52
Accumulated depreciation at end of year	–	-116	-431	–	-547

Net book value at end of year	40	117	193	57	407

2021
Acquisition cost at beginning of year	43	236	576	41	895
Translation differences	1	8	13	2	24
Business disposals	–	-6	-11	–	-18
Capital expenditure	–	5	34	37	76
Reclassifications	–	8	29	-37	–
Divestments and other changes	-10	-14	-55	–	-79
Acquisition cost at end of year	35	235	586	43	899

Accumulated depreciation at beginning of year	–	-118	-417	–	-535
Translation differences	–	-3	-8	–	-11
Business disposals	–	3	9	–	13
Divestments and other changes	–	13	50	–	63
Write-downs	–	–	-1	–	-1
Depreciation charges for the year	–	-9	-43	–	-51
Accumulated depreciation at end of year	–	-113	-410	–	-523

Classification as held for sale	–	–	-2	–	-2

Net book value at end of year	35	121	174	43	373

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 74

3.3. 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 office premises in the category of

Buildings, and cars, operative machinery, and equipment in the category of Machinery and equipment. The depreciation 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 office 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 Outotec’s option to extend the lease is included in the lease term if

such option is sufficiently 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 affect 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 75

Amounts recognized in balance sheet


2022
EUR million	Land and water areas	Buildings	Machinery and equipment	Right-of- Use assets total
Acquisition cost at beginning of year	1	171	29	202
Translation differences	–	-1	-1	-2
Business disposals	–	-6	-1	-6
Additions	5	25	10	40
Derecognition	-2	-23	-10	-35
Acquisition cost at end of year	5	167	27	199

Accumulated depreciation at beginning of year	–	-55	-15	-70
Translation differences	–	-2	–	-2
Business disposals	–	5	1	5
Accumulated depreciation for derecognized contracts	–	12	8	21
Depreciation charges for the year	–	-29	-8	-38
Other changes	–	–	–	–
Accumulated depreciation at end of year	–	-70	-14	-84

Net book value at end of year	5	97	13	115


2021
EUR million	Land and water areas	Buildings	Machinery and equipment	Right-of- Use assets total
Acquisition cost at beginning of year	–	155	26	181
Translation differences	–	3	–	3
Business disposals	–	–	–	–
Additions	–	29	9	38
Derecognition	–	-15	-6	-21
Other changes	1	–	–	2
Acquisition cost at end of year	1	171	29	202

Accumulated depreciation at beginning of year	–	-33	-12	-45
Translation differences	–	-1	–	-1
Business disposals	–	–	–	–
Accumulated depreciation for derecognized contracts	–	7	6	13
Depreciation charges for the year	–	-29	-9	-38
Other changes	–	–	–	–
Accumulated depreciation at end of year	–	-55	-15	-70

Classification as held for sale	–	-3	-1	-4
Business disposals, discontinued operations	–	–	0	0

Net book value at end of year	1	113	13	127

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 76

Amounts recognized in profit and loss


EUR million	2022	2021
Operating profit
Depreciation expense on right-of-use assets	-38	-38
Rental expense relating to leases of low-value assets	-1	-1
Rental expense relating to leases of short-term assets	-3	-3
Finance expenses
Interest expense on lease liabilities	-5	-5
Total amount recognized in profit and loss	-47	-47

The total cash outflow for leases including short-term leases and leases of low-value assets in 2022 was EUR 44 million

(EUR 48 million in 2021). A maturity analysis of lease liabilities is presented in note 4.5.

3.4. Depreciation and amortization

Depreciation and amortization by asset class


EUR million	2022	2021
Intangible assets
Intangible assets from acquisitions	-52	-51
Other intangible assets	-14	-21
Tangible assets
Buildings and structures	-9	-9
Machinery and equipment	-43	-43
Right-of-use assets
Land areas	0	0
Buildings and structures	-29	-29
Machinery and equipment	-8	-9
Total	-156	-161

Depreciation and amortization by function


EUR million	2022	2021
Cost of goods sold	-86	-84
Selling, general and administrative expenses	-69	-78
Total	-156	-161

The depreciation and amortization of discontinued operations was totaled EUR 1 million in year 2022 (EUR 5 million in 2021).

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 77

4. Capital structure and financial instruments

4.1. 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 effects on Metso Outotec’s financial

performance.

Sensitivity analysis

Sensitivity analysis figures presented in connection with different 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 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 management’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. Sufficient cash, short-term investments, and committed and uncommitted credit facilities are maintained to

protect short-term liquidity. Diversification of funding among different 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 601 million (EUR 473 million in 2021), and there were no deposits or securities with a maturity more than three months

(EUR 0 million in 2021).

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, of which EUR 80 million was utilized at the end of the period.

During the third quarter, Metso Outotec signed a EUR 100 million term loan agreement for two years with one of its

relationship banks.

During the fourth quarter, the company signed an EUR 50 million research, development, and innovation (RDI) loan with

European Investment Bank. At the end of the year, the loan remained undrawn.

During the fourth quarter, the company purchased through a voluntary tender offer EUR 103 million of outstanding bonds

maturing in 2024. At the same time the company issued new bonds for EUR 300 million with a coupon of 4.875% and maturity

in 2027.

Metso Outotec has a Euro Medium Term Note Program (EMTN) of EUR 2 billion, under which EUR 758 million at carrying

value was outstanding at the end of December (Dec 31, 2021: EUR 687 million).

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 78

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 31, 2022			Dec 31, 2021
EUR million	<1 year	1–5 years	> 5 years	<1 year	1–5 years	> 5 years
Long-term debt
Repayments	–	700	336	150	334	293
Interests	–	99	6	9	19	3
Other liabilities	–	–	–	–	2	–
Short-term debt
Repayments	176	–	–	42	–	–
Interests	33	–	–	–	–	–
Trade payables	772	–	–	692	–	–
Other liabilities	–	–	–	16	–	–
Total	981	799	342	909	355	296

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, 2022,

the equity attributable to shareholders was EUR 2,342 million (EUR 2,250 million in 2021), and the amount of interest-bearing

debt excluding lease liabilities was EUR 1,174 million (EUR 819 million in 2021).

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 positive 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 would only become valid, if Metso Outotec's credit rating was below

Investment Grade, and the covenants would be related to 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

2.0 years as of December 31, 2022 (2.2 years in 2021).

At the end of 2022, the balance sheet items exposed to interest rate risk were interest-bearing assets of EUR 609 million

(EUR 482 million in 2021), and interest-bearing debt excluding lease liabilities amounted to EUR 1.174 million (EUR 819

million in 2021).

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 effect on Metso

Outotec’s net interest expenses, net of taxes, of EUR -/+0.1 million (EUR -/+1.0 million in 2021).

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 effects, net of taxes, in the income statement and equity:

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 79


EUR million	2022	2021
Effects in
Income statement	+/-3.2	+/-1.3
Equity	+/-0.0	+/-0.0

The effect 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 effect 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 75 percent of Metso Outotec’s sales

originate from outside the euro zone; the main currencies being euro, US dollar, Australian dollar, Chilean peso and Chinese

yuan.

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. Treasury Policy specifies certain currencies and certain legal units,

where the open exposures are left unhedged. Similarly open exposures below certain euro nominated amount are left

unhedged. 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	2022	2021
Operational items	639	443
Financial items	761	486
Hedges	-1,386	-932
Total exposure	14	-4

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. 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 +/-1.3 million (EUR -/+1.1 million in 2021).

Transaction exposure is spread to about 45 currencies and as of December 31, 2022, the biggest open exposures were in the

Swedish Krona and Kazakhstani Tenge (approximately 20 percent).

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 80

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 effects, net of taxes, of a -/+10 percent change in EUR foreign exchange

rates:


				2022	2021
EUR million	USD	CNH	Other	Total	Total
Effects in
Income statement	+/-25.7	+/-4.5	+/-4.5	+/-25.6	+-20.8
Equity	+/-11.2	+/-4.6	+/-0.6	+/-7.2	+/-0.6

The effect in equity is the fair value change in derivatives contracts qualifying as cash flow hedges for unrecognized firm

commitments. The effect 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, Chinese yuan, Canadian dollar,

Brazilian real and Indian rupee, which altogether comprise approximately 62 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 counterparty 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

Association). 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 81

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 1Unadjusted 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 2The 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 3A 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 2022 nor in 2021.

Financial assets and liabilities measured at fair value


	Dec 31, 2022			Dec 31, 2021
EUR million	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit and loss
Derivatives not under hedge accounting	–	68	–	–	24	–
Financial assets at fair value through other comprehensive income
Derivatives under hedge accounting	–	21	–	–	24	–
Total	–	88	–	–	48	–

Liabilities
Financial liabilities at fair value through profit and loss
Derivatives not under hedge accounting	–	29	–	–	29	–
Financial liabilities at fair value through other comprehensive income
Derivatives under hedge accounting	–	51	–	–	29	–
Total	–	80	–	–	58	–

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 82

4.2. 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 effective interest

method. Interest income is recognized in finance 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 effective interest method. Trade and

other receivables are non-interest-bearing short-term unpaid debts.

The difference 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

effective 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 effective 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 83

Financial assets and liabilities by category


2022	At fair value through profit and loss	At fair value through other comprehensive income	At amortized cost	Carrying value	Fair value
EUR million	At fair value through profit and loss	At fair value through other comprehensive income	At amortized cost	Carrying value	Fair value
Non-current financial assets
Equity investments	2	–	–	2	2
Loan receivables	–	–	5	5	5
Derivatives financial instruments	3	–	–	3	3
Other receivables	–	–	19	19	19
Total	5	–	24	29	29

Current financial assets
Trade receivables	–	–	796	796	796
Trade receivables, for sale	–	2	–	2	2
Loan receivables	–	–	3	3	3
Derivatives financial instruments	65	21	–	86	86
Deposits and securities, maturity three months or less	–	–	104	104	104
Cash on hand and in bank accounts	–	–	497	497	497
Total	65	23	1,400	1,488	1,488

Non-current liabilities
Bonds 1)	–	–	758	758	734
Loans from financial institutions	–	–	240	240	240
Lease liabilities	–	–	87	87	87
Derivatives financial instruments	–	33	–	33	33
Other liabilities	–	–	2	2	2
Total	–	33	1,088	1,121	1,097

Current liabilities
Loans from financial institutions	–	–	96	96	96
Commercial papers	–	–	80	80	80
Lease liabilities	–	–	31	31	31
Trade payables	–	–	787	787	787
Derivatives financial instruments	29	18	–	47	47
Total	29	18	994	1,040	1,040

1) The bonds have been measured at amortized cost, adjusted by the fair value to the extent of the hedged risk.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 84


2021	At fair value through profit and loss	At fair value through other comprehensive income	At amortized cost	Carrying value	Fair value
EUR million	At fair value through profit and loss	At fair value through other comprehensive income	At amortized cost	Carrying value	Fair value
Non-current financial assets
Equity investments	4	–	–	4	4
Loan receivables	–	–	6	6	6
Derivatives financial instruments	–	2	–	2	2
Other receivables	–	–	20	20	20
Total	4	2	26	31	31

Current financial assets
Trade receivables	–	–	665	665	665
Trade receivables, for sale	–	3	–	3	3
Loan receivables	–	–	3	3	3
Derivatives financial instruments	24	22	–	46	46
Deposits and securities, maturity three months or less	–	–	81	81	81
Cash on hand and in bank accounts	–	–	393	393	393
Total	24	25	1,141	1,190	1,190

Non-current liabilities
Bonds 1)	–	–	587	587	597
Loans from financial institutions	–	–	40	40	40
Lease liabilities	–	–	104	104	104
Derivatives financial instruments	1	5	–	6	6
Other liabilities	–	–	2	2	2
Total	1	5	732	738	749

Current liabilities
Current portion of non-current debt	–	–	150	150	151
Loans from financial institutions	–	–	42	42	42
Lease liabilities	–	–	30	30	30
Trade payables	–	–	692	692	692
Derivatives financial instruments	28	24	–	52	52
Total	28	24	914	966	967

For more information on derivative financial instruments, see note 4.8.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 85

4.3. Liquid funds

Accounting policy

Cash and cash equivalents consist of cash on hand and bank accounts, deposits, and interest-bearing investments, which

can be easily converted into a known amount of cash within a period of three months or less.

Cash on hand, bank accounts, deposits, and interest-bearing investments are measured at amortized cost. 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.


EUR million	2022	2021
Cash and cash equivalents
Deposits and securities, maturity three months or less	104	81
Cash on hand and bank accounts	497	393
Cash and cash equivalents total	601	473

Liquid funds total	601	473

Average returns for deposits and securities


%	2022	2021
With maturity three months or less	4.16%	3.59%

4.4. 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 effect 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 differences

The translation differences arising from subsidiary net investments and non-current subsidiary loans without agreed

settlement dates are recognized through Other Comprehensive Income (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 difference is adjusted by the currency effect 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

difference, including the effect 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 difference 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

Metso Outotec Corporation's registered share capital, which is fully paid, was EUR 107,186,442.52 on December 31, 2022,

and December 31, 2021. Metso Outotec's shares have no nominal value.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 86


	2022	2021
Number of outstanding shares at beginning of year	828,047,419	827,979,202
Shares granted from share ownership plans	624,516	68,217
Redemption of own shares	-3,036,000	–
Number of outstanding shares at end of year	825,635,935	828,047,419
Own shares held by the Parent Company	3,336,505	925,021
Total number of shares at end of year	828,972,440	828,972,440

As of December 31, 2022, the acquisition price of 3,336,505 own shares held by the Parent company was EUR 27,935,122.14

and was recognized in treasury shares.

Dividend proposals

The Board of Directors proposes that a dividend of EUR 0.30 per share be paid based on the balance sheet to be adopted for

the financial year, which ended December 31, 2022. Insofar as the dividend to be paid exceeds the net profit for the year

ended December 31, 2022, the remaining amount will be paid from retained earnings from previous years. These financial

statements do not reflect this dividend payable of EUR 248 million.

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


EUR million	Treasury shares	Hedge reserve	Fair value reserve	Legal reserve	Other reserves	Total
January 1, 2022	-9	-4	9	0	1,134	1,130
Cash flow hedges
Fair value gains (+) / losses (-), net of tax	–	-27	–	–	–	-27
Transferred to profit and loss, net of tax
Sales	–	3	–	–	–	3
Cost of goods sold / Administrative expenses	–	27	–	–	–	27
Instruments at fair value and share-based rewards
Transferred to profit and loss, net of tax	–	–	-1	–	–	-1
Redemption of own shares	-25	–	–	–	–	-25
Share-based payments, net of tax	6	–	10	–	–	16
Other	–	–	–	0	-1	-1
December 31, 2022	-28	-1	18	0	1,133	1,122

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 87


EUR million	Treasury shares	Hedge reserve	Fair value reserve	Legal reserve	Other reserves	Total
January 1, 2021	-9	9	2	0	1,134	1,136
Cash flow hedges
Fair value gains (+) / losses (-), net of tax	–	-8	–	–	–	-8
Transferred to profit and loss, net of tax
Sales	–	-10	–	–	–	-10
Cost of goods sold / Administrative expenses	–	5	–	–	–	5
Share-based payments, net of tax	0	–	7	–	–	7
December 31, 2021	-9	-4	9	0	1,134	1,130

Cumulative translation adjustments included in shareholders’ equity


EUR million	2022	2021
Cumulative translation adjustment at beginning of year	-164	-210
Currency translation, change	13	46
Cumulative translation adjustment at end of year	-150	-164

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 88

4.5. 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 effective interest method. The difference 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 effective interest

method over the remaining period of the modified liability, provided that the new conditions obtained through the modification

do not substantially differ from those of the original debt. Modification gains or losses are recognized in the income statement

at the time of non-substantial modification.


	2022		2021
EUR million	Carrying values	Fair values	Carrying values	Fair values
Long-term interest-bearing debt
Bonds	758	734	587	597
Loans from financial institutions	240	240	40	40
Other long-term debt	0	–	–	–
Total long-term borrowings	998	974	627	634

Lease liabilities	87	87	104	104
Total long-term interest-bearing debt	1,086	1,061	730	738

Short-term borrowings
Bonds, current portion	–	–	100	101
Loans from financial institutions, current portion	–	–	50	50
Loans from financial institutions	96	96	42	42
Commercial papers	80	80	–	–
Total short-term borrowings	176	176	192	193

Lease liabilities	31	31	30	30
Total short-term interest-bearing debt	207	207	222	223

Total interest-bearing debt	1,293	1,268	952	961

Bonds


2022
EUR million	Nominal interest rate	Effective interest rate	Outstanding original loan amount	Outstanding carrying value
Public bond 2017–2024	1.125%	1.92%	197	190
Public bond 2020–2028	0.875%	1.04%	300	273
Public bond 2022–2027	4.875%	4.96%	300	296
Bonds total			797	758

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 89


2021
EUR million	Nominal interest rate	Effective interest rate	Outstanding original loan amount	Outstanding carrying value
Public bond 2017–2024	1.125%	1.22%	300	294
Public bond 2020–2028	0.875%	1.04%	300	293
Private placements 2022	3.800%	3.80%	100	100
Bonds total			700	687

Metso Outotec has a Euro Medium Term Note Program (EMTN) of EUR 2 billion, under which EUR 758 million at carrying

value was outstanding at the end of 2022 (EUR 687 million in 2021). EUR 100 million private placements outstanding at the

end of 2021 were repaid in 2022.

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, from which EUR 80 million was utilized at the end of

the period.

The average interest rate of total loans and derivatives was 3.19% (1.38%) on December 31, 2022. The duration of long-term

interest-bearing debt was 2.0 years (2.2 years) and the average maturity 3.9 years (3.3 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 denominated. The weighted average interest rate applicable to the short-

term borrowing on December 31, 2022, was 3.76% (4.58% in 2021). In 2023, interest amounting to EUR 1.6 million is

expected to be paid concurrently with respective principals on the short-term debt presented above.

Maturities of interest-bearing debt at nominal value


2022
EUR million	Borrowings	Repayments	Interests	Lease liabilities 1)
2023	209	176	33	39
2024	336	306	30	29
2025	82	58	24	22
2026	41	18	23	18
2027	341	318	22	15
Later	342	336	6	40
Total	1,351	1,213	138	162


2021
EUR million	Borrowings	Repayments 2)	Interests	Lease liabilities 1)
2022	202	192	10	33
2023	5	–	5	27
2024	305	300	5	21
2025	43	40	3	16
2026	3	–	3	12
Later	305	300	5	40
Total	863	832	31	148

1) Future lease payments at nominal value.

2) Maturities for comparison year 2021 has been revised.

The maturities of derivative financial instruments are presented in note 4.8.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 90

4.6. Interest-bearing net debt reconciliation

Net interest-bearing liabilities


EUR million	2022	2021
Borrowings, non-current 1)	998	777
Lease liabilities	118	133
Borrowings, current	176	42
Loan receivables	-8	-9
Liquid funds	-601	-473
Net interest-bearing liabilities	684	470

1) Comparison year 2021 includes also the current portion of the non-current borrowings EUR 150 million.

Changes in net interest-bearing liabilities


2022					Other non- cash movements
EUR million	Balance at beginning of year	Cash flows	Acquisitio ns and disposals	Translation differences	Other non- cash movements	Classificati on as held for sale	Balance at end of year
Borrowings, non- current	777	246	2	0	-26	–	998
Lease liabilities	133	-35	-2	0	22	–	118
Borrowings, current	42	140	–	-6	–	–	176
Loan receivables	-9	1	0	0	–	–	-8
Liquid funds	-473	-113	-10	-5	–	–	-601
Net interest-bearing liabilities	470	239	-10	-10	-4	–	684


2021					Other non- cash movements
EUR million	Balance at beginning of year	Cash flows	Disposals	Translation differences	Other non- cash movements	Classification as held for sale	Balance at end of year
Borrowings, non- current	1,129	-350	-1	–	-2	–	777
Lease liabilities	138	-38	0	2	31	–	133
Borrowings, current	77	-37	–	2	–	–	42
Loan receivables	-8	1	–	-1	0	–	-9
Liquid funds	-537	81	-2	-14	–	0	-473
Net interest-bearing liabilities	799	-344	-3	-11	29	0	470

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 91

4.7. 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, which 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	2022	2021
Guarantees
External guarantees given by parent and group companies	1,546	1,575
Other commitments
Repurchase commitments	–	0
Other contingencies	1	1
Total	1,547	1,577

More information about lawsuits and claims is presented in note 6.2.

4.8. Derivative instruments

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 effectiveness 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

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 commitments. The interest component is recognized under other operating

income and expenses, net. The gain or loss relating to the effective portion of the currency forward contracts is recognized in

the income statement concurrently with the underlying in the same line item. The effective 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 effective 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 effectiveness of the designated component of the derivatives in offsetting changes in the fair values of the cash

flows of hedged items.

The effective 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 ineffective 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 92

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 effectiveness 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 finance 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


2022 EUR million	Notional amount	Fair value, assets	Fair value, liabilities	Fair value, net
Forward exchange contracts 1)	3,540	86	47	39
Interest rate swaps	425	3	33	-31
Total	3,965	88	80	8

2021 EUR million	Notional amount	Fair value, assets	Fair value, liabilities	Fair value, net
Forward exchange contracts 1)	2,456	46	52	-6
Interest rate swaps	275	2	6	-4
Total	2,731	48	58	-10

1) Some 34 percent and 39 percent of the notional amount at the end of 2022 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 financial instruments recognized in the balance sheet at the end of year


	2022		2021
EUR million	Assets	Liabilities	Assets	Liabilities
Interest rate swaps - fair value hedges	–	33	2	5
Interest rate swaps - non-qualifying hedges	3	–	–	1
Interest rate swaps total	3	33	2	6

Forward exchange contracts - cash flow hedges	21	18	22	22
Forward exchange contracts - non-qualifying hedges	65	29	24	28
Forward exchange contracts total	86	47	46	52

Derivatives total	88	80	48	58

In 2022 and 2021, there was no ineffectiveness related to the cash flow hedges. As of December 31, 2022, the fixed interest

rates of swaps varied from -0.38 percent to 2.71 percent.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 93

Maturities of financial derivatives on (expressed as notional amounts)


December 31, 2022
EUR million	2023	2024	2025	2026	2027 and later
Forward exchange contracts	3,472	68	–	–	–
Interest rate swaps	–	100	–	–	325

Notional and carrying amounts of financial derivatives applying hedge accounting at end of year


2022 EUR million	Notional amount	Fair value, assets	Fair value, liabilities	Fair value, net
Forward exchange contracts	1,189	21	18	3
Interest rate swaps	400	–	33	-33
Total	1,589	21	51	-30

2021 EUR million	Notional amount	Fair value, assets	Fair value, liabilities	Fair value, net
Forward exchange contracts	946	22	24	-2
Interest rate swaps	250	2	5	-3
Total	1,196	24	29	-5

Forward exchange contracts hedge commercial cash flows of projects applying hedge accounting. The hedge ratio is 1:1. 98%

of hedged cash flows mature in year 2023, 2% in year 2024.

Impact of cash flow hedge in the statement of financial position


2022 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
	1,189	4	-3	0

Metso Outotec applies fair value hedge accounting to the bonds maturing in 2024, 2027 and 2028. The hedge accounted total

notional value is EUR 400 million (EUR 250 million in 2021). 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 effectiveness. Credit margin is added to the discount curve of the bond.

Bonds applying fair value hedge accounting at end of year


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
197	51%	June 13, 2024	4	100	June 13, 2024	-4
300	50%	December 7, 2027	3	150	December 7, 2027	-3
300	50%	May 26, 2028	25	150	May 26, 2028	-26

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 94

5. Consolidation

5.1. 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 affect 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 difference 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 difference 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 finance income and expenses.

The statement of income of a subsidiary with a functional currency different 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 effect on the balance sheet date. This exchange rate difference is recorded through other comprehensive income (OCI)

within cumulative translation adjustments under equity.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 95

The translation differences 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 difference is

adjusted by the currency effect 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 difference, including the effect 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 difference relating to the reduction is reversed through OCI and recognized in the consolidated statement of

income.

Net investment hedge

The equity of subsidiaries reporting in certain currencies can be hedged mainly by 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 component of equity against the translation differences arising from consolidation to the

extent these hedges are effective. The interest portion of derivatives qualifying as hedges of net investment is recognized

under finance income and expenses.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 96

5.2. Subsidiaries


		Ownership
Country	Company name	Dec, 31 2022
Algeria	Metso Algerie EURL	100.0%
Argentina	Metso Outotec Argentina SA	100.0%
Australia	Brian Investments Pty Ltd	100.0%
	Metso Outotec Australia Ltd	100.0%
	Outotec Ausmelt Pty Ltd	100.0%
	Outotec Pty. Ltd.	100.0%
Austria	Metso Outotec Austria GmbH	100.0%
Brazil	Metso Brazil Indústria e Comércio Ltda	100.0%
	Outotec Tecnologia Brazil Ltda	100.0%
Bulgaria	Metso Outotec Bulgaria EOOD	100.0%
Canada	Metso Outotec Canada Inc.	100.0%
	McCloskey International Limited	100.0%
	Global Physical Asset Management Inc.	100.0%
Chile	Metso Outotec Industrial Services SpA	100.0%
	Metso Outotec Chile SpA	100.0%
	Outotec Servicios Industriales Ltda.	100.0%
China	Metso Outotec New Material Technology (Shanghai) Co., Ltd.	100.0%
	Metso Outotec Heavy Industries (Quzhou) Co. Ltd	100.0%
	Metso Outotec Heavy Industries (Tianjin) Co. Ltd	100.0%
	Metso Outotec International Trade (Tianjin) Co. Ltd	100.0%
	Metso Outotec Machinery Heavy Industries (Suzhou) Co.,Ltd.	100.0%
	Shaoguan City Shaorui Heavy Industries Co. Ltd	100.0%
	SISUPER Machinery Heavy Industry (Suzhou) Co Ltd	100.0%
Czech Republic	Metso Outotec Czech Republic s.r.o.	100.0%
Ecuador	Metso Outotec-Technology (Ecuador) S.A.	100.0%
Egypt	Metso Outotec Egypt Company LLC	100.0%
Finland	International Project Services Ltd. Oy	100.0%
	Metso Outotec Finland Oy	100.0%
	Metso Outotec (Ceramics) Oy	100.0%
	Outotec International Holdings Oy	100.0%
	Rauma Oy	100.0%
France	Metso Outotec France SAS	100.0%
Germany	Metso Outotec Germany GmbH	100.0%
	Outotec Deutschland GmbH	100.0%
	Outotec GmbH & Co KG	100.0%
	Outotec Holding GmbH	100.0%
Ghana	Metso Outotec Ghana Ltd	100.0%
	Outotec (Ghana) Limited	100.0%
Greece	Metso Outotec Greece IKE	100.0%
India	Metso Outotec India Private Ltd	100.0%
	Outotec India Private Ltd.	100.0%
Indonesia	PT Metso Outotec Indonesia 1)	99.9%
	PT. Outotec Technology Solutions	100.0%
Iran	Outotec Iranian Minerals and Metals Processing	100.0%
Italy	Metso Outotec Italy Srl	100.0%
Lithuania	Metso Outotec Global Business Services UAB	100.0%
	Metso Outotec Lithuania UAB	100.0%
Macedonia	Metso Outotec Dooel Skopje	100.0%
Malaysia	Metso Outotec Malaysia Sdn Bhd	100.0%

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 97


		Ownership
Country	Company name	Dec, 31 2022
Morocco	Metso Outotec Morocco LLC	100.0%
Mexico	Metso Outotec Mexico SA de CV	100.0%
Mongolia	Metso Outotec Mongolia LLC	100.0%
Namibia	Outotec Namibia (Pty.) Ltd	100.0%
New Caledonia	Outotec (New Caledonia), SAS	100.0%
Netherlands	Metso Outotec (Netherlands) B.V.	100.0%
	Metso Outotec B.V.	100.0%
Norway	Metso Outotec Norway A/S	100.0%
Panama	Metso Outotec Central America SA	100.0%
	Outotec (Panama) S.A.	100.0%
Papua New Guinea	Metso PNG Limited	100.0%
Peru	Metso Outotec Perú SA	100.0%
Poland	Metso Outotec Poland Sp. z o.o.	100.0%
Portugal	Metso Outotec Portugal, Lda	100.0%
Qatar	Outotec Trading & Contracting WLL 3)	49.0%
Russia	OOO Metso Outotec	100.0%
Romania	Metso Outotec Romania S.R.L.	100.0%
Saudi Arabia	Metso Outotec Saudi Arabia LLC	100.0%
	Outotec Technology Saudi LLC	100.0%
Serbia	Metso Outotec d.o.o. Beograd	100.0%
Singapore	Metso Outotec Asia Pacific Pte Ltd	100.0%
South Africa	Metso Outotec South Africa Pty Ltd	74.9%
	Outotec Africa Holdings (Pty) Ltd	100.0%
Spain	Metso Outotec Espana SA	100.0%
	Outotec (Spain) S.L.	100.0%
Sweden	AB P. J. Jonsson och Söner	100.0%
	Larox AB	100.0%
	Metso Outotec Sweden AB	100.0%
	Ersmark Industrifastigheter AB	100.0%
Thailand	Metso Outotec (Thailand) Limited	100.0%
Turkey	Metso Outotec Maden Teknolojileri Anonim Sirketi	100.0%
United Arab Emirates	Metso Outotec DMCC	100.0%
	Outotec Engineering RAK LLC 1)	48.0%
	Outotec Middle East Industrial Projects Consultancy LLC 2)	49.0%
United Kingdom	McCloskey International Ltd	100.0%
	Metso Outotec Captive Insurance Limited	100.0%
	Metso Outotec UK Ltd	100.0%
	Outotec (UK) Limited	100.0%
	Tesab Engineering Ltd	100.0%
United States	Metso McCloskey USA LLC	100.0%
	Metso Outotec USA Inc.	100.0%
	Outotec USA Inc.	100.0%
	Global Physical Asset Management, Inc.	100.0%
Vietnam	Metso Vietnam Co. Ltd	100.0%
Zambia	Metso Zambia Ltd	100.0%
	Outotec (Zambia) Limited	100.0%

1) Has been 100% consolidated due to the control established.

2) Has been 90% consolidated due to the control established.

3) Has been 70% consolidated due to the control established.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 98

5.3. 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


	2022		2021
Company	Ownership	Carrying value	Ownership	Carrying value
Liugong Metso Construction Equipment (Shanghai) Co. Ltd	50.0%	4	50.0%	6
Enefit Outotec Technology Oü	40.0%	1	40.0%	1
Sidvin Outotec Engineering Private Ltd	25.1%	0	25.1%	0
Total		6		7

Liugong Metso Construction Equipment (Shanghai) Co. Ltd is in the process of being liquidated, which is expected to be

completed in year 2023.

Movements in the carrying value of investments in associated companies and joint ventures


EUR million	2022	2021
Investments in associated companies and joint ventures
Acquisition cost as of January 1	10	11
Divestments	–	-1
Acquisition cost as of December 31	10	10

Equity adjustments in investments in associated companies and joint ventures
Equity adjustments as of January 1	-2	-1
Share of results	-1	-2
Translation differences	0	0
Equity adjustments as of December 31	-3	-2

Carrying value as of December 31	6	7

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 99

Metso Outotec's share of the assets and liabilities, sales and results of the associated companies and joint ventures, which

have been accounted for using the equity method


EUR million	2022	2021
Assets	8	9
Liabilities	1	2
Sales	6	4
Profit	-1	-1

Related party transactions

Transactions carried out and related balances with associated companies and joint ventures


EUR million	2022	2021
Sales	0	1
Purchases	0	-1
Receivables	–	1
Payables	0	0

Information on remuneration of the Board as well as Chief Executive Officer and other Executive Team members can be found

in note 1.5.

5.4. Acquisitions and business disposals

Acquisitions in 2022

Metso Outotec acquired a 100% share of Tesab Engineering Ltd on May 3, 2022. Tesab is a Northern Ireland-based company

specializing mostly in mobile crushing equipment for aggregates applications, including quarrying, recycling, asphalt and

concrete. The acquired business was consolidated into the Aggregates segment. Tesab's turnover in 2021 was approx. EUR

30 million and it employed about 60 people.

On September 1, 2022, Metso Outotec acquired 100% share of Global Physical Asset Management Inc, a technology provider

based in North America. The acquisition will further strengthen Metso Outotec’s capabilities in digital field service inspections

for grinding. The company has offices in Kelowna, British Columbia, Canada and in Wisconsin, USA. The acquired business

was consolidated into the Minerals segment. In 2021 the sales of Global Physical Asset Management were approximately

EUR 5 million and it employed about 20 people.

Assets and liabilities recognized as a result of the acquisitions


EUR million	Total 2022
Fixed assets	11
Inventory	7
Receivables	8
Liquid funds	0
Liabilities	-10
Net identifiable assets acquired at fair value	16
Goodwill	5
Purchase consideration	21

Goodwill is mainly attributable to synergies. The goodwill is not deductible for tax purposes. The initial calculation of goodwill

generated is based on the result of the acquired company, adjusted by changes in accounting principles and effects from the

fair value adjustment of acquired assets and related tax adjustments.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 100

Net cash flow impact of the acquisitions


EUR million	Total 2022
Cash consideration paid	-21
Cash and cash equivalents acquired	0
Net cash flow for the year	-21
Contingent consideration	–
Cash considerations, total	-21

Acquisition costs of EUR 0.4 million related to the acquisition of Tesab Engineering Ltd and Global Physical Asset

Management Inc were expensed and included in administrative expenses in the income statement and in operating cash flow

in the statement of cash flows.

Acquisitions in 2021

Metso Outotec made no business acquisitions in 2021.

Business disposals in 2022

Information related to the divestment of Metal Recycling business line is presented in note 5.5. Discontinued operations.

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	2021
Assets	21
Liabilities	-17
Net assets of disposed business	4

Consideration received in cash	4
Net assets of disposed business	-4
Result on disposal	0

Consideration received in cash	4
Cash and cash equivalents disposed of	-2
Net cash inflow on disposal	2

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 101

5.5. 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.

Recycling business

On October 28, 2020, Metso Outotec announced its decision to divest its Recycling business. The business was classified as

discontinued operations, including the transfer of assets held for sale and liabilities directly attributable 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. The Recycling business consisted of two business lines, one selling products and services for metal

recycling and another selling products and services to waste recycling. The business had around 300 employees and its main

locations were Horsens, Denmark; Düsseldorf, Germany; and San Antonio, Texas.

On December 1, 2021, Metso Outotec completed the divestment of the waste recycling business to Ahlström Capital.

On June 2, 2022, Metso Outotec announced the completion of the divestment of the Metal Recycling business line to Mimir, a

Swedish investment company. The sold Metal Recycling business included the brands Lindemann and Texas Shredder. Its

approximately 160 employees have been transferred to the new company.

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

International. The Aluminium business included green anode plants, rod shops and certain casthouse technologies as well as

related service operations.

The Waste-to-energy business to be divested comprise of biomass, wood waste and various other fuel plants, including the

related service operations. The balance sheet classification of Waste-to-energy business was changed in year 2022 due to

prolonged divestment process, and the assets and liabilities directly attributable classified as part of continuing operations.

Due to the change in classification, depreciation of fixed assets and right-of-use assets continues, and the cumulative effect of

depreciation from years 2020–2021 has been recorded in the balance sheet of continuing operations through the income

statement. All the income statement items related to the Waste-to-energy business continue to be adjusted to show the

discontinued operations separately from continuing operations.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 102

Result from the discontinued operations


EUR million	2022	2021
Sales	67	153
Cost of sales	-70	-120
Sales, general and administrative expenses	-11	-36
Other income and expenses, net	-2	-4
Operating result	-16	-7

Finance income and expenses, net	0	0
Income taxes	-1	14
Result for the period	-17	7

Gain / loss from business disposals	-12	41
Total result of period, discontinued operations	-28	48

Balance sheet of the discontinued operations


EUR million	2022	2021
Non-current assets	–	19
Inventories	–	25
Trade and other receivables	–	21
Cash and cash equivalents	–	0
Total assets	–	65

Non-current liabilities	–	0
Current liabilities	–	34
Total liabilities	–	34

Business disposals

Metal Recycling was disposed in year 2022, Waste Recycling and Aluminium in year 2021.


EUR million	2022	2021
Goodwill	–	18
Other non-current and current assets	42	30
Cash and cash equivalents	10	4
Liabilities	-35	-22
Net assets of disposed business	17	30

Cash consideration	5	75
Net assets of disposed business	-17	-30
Result on disposal	-12	44

Cost of disposals	-2	-3
Gain on disposed business	-13	41

Consideration received in cash	2	75
Cash and cash equivalents sold	-10	-4
Net cash inflow on disposal	-7	71

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 103

5.6. New accounting standards

New and amended standards effective in 2022

The following new or revised IFRSs have been adopted from January 1, 2022, in these Consolidated financial statements.

Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Reference to the Conceptual Framework – Amendments to IFRS 3

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The

amendments adds an exception to the recognition principle of IFRS 3 by requiring entities to apply the criteria in IAS 37 or

IFRIC 21, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the

acquisition date. The amendments also adds a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for

recognition at the acquisition date.

Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16

The amendment prohibits entities from deducting from the cost of an item of property, plant and equipment (PP&E), any

proceeds of the sale of items produced while bringing that asset to the location and condition necessary for it to be capable of

operating in the manner intended by management. Instead, the proceeds from selling such items are recognized and the cost

of producing those items are recognized in profit or loss.

Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37

In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing

whether a contract is onerous or loss-making.

AIP IFRS 9 Financial Instruments

The annual improvement clarifies the fees in the ’10 per cent’ test, which clarifies whether the terms of the new or amended

financing meets the derecognition of financial liabilities from the balance sheet. These fees include only the fees between the

borrower and lender.

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 effective

[and (in some cases) had not yet been adopted by the EU (marked with *)]:

•Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies

•Amendments to IAS 1 - Classification of Liabilities as Current or Non-current *

•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 16 Lease Liability in a Sale and Leaseback

•Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and Its Associate or Joint

Venture *

•IFRS 17 Insurance Contracts (January 1, 2023): Metso Outotec have evaluated that IFRS 17 Insurance Contracts is

not affecting Metso Outotec.

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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 104

5.7. Exchange rates used


		Average rates		Year-end rates
		2022	2021	2022	2021
USD	(US dollar)	1.0563	1.1851	1.0666	1.1326
SEK	(Swedish krona)	10.6258	10.1469	11.1218	10.2503
GBP	(Pound sterling)	0.8537	0.8615	0.8869	0.8403
CAD	(Canadian dollar)	1.3757	1.4868	1.4440	1.4393
BRL	(Brazilian real)	5.4748	6.3782	5.6386	6.3101
CNY	(Chinese yuan)	7.0836	7.6388	7.3582	7.1947
AUD	(Australian dollar)	1.5189	1.5792	1.5693	1.5615

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 105

6. Other notes

6.1. Audit fees


EUR million	2022	2021
Audit services	-3.0	-2.8
Tax services	-0.1	-0.1
Other services	-0.1	-0.1
Total	-3.2	-3.0

The above table discloses fees to Metso Outotec’s auditor Ernst & Young Oy.

6.2. 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 effect 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.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 106

Financial statements of the Parent company, FAS

Statement of income of the Parent company


EUR	Note	2022	2021
Sales		20,611,681.12	26,027,787.33
Other operating income	2	1,233,215.11	5,476,655.94
Personnel expenses	3	-24,823,466.91	-21,653,779.87
Depreciation and amortization	4	-390,638.27	-3,194,205.94
Other operating expenses	5	-24,475,623.85	-29,432,759.54
Operating profit / loss		-27,844,832.80	-22,776,302.08

Financial income and expenses, net	7	142,473,505.19	133,484,447.23
Profit before appropriations and taxes		114,628,672.39	110,708,145.15

Appropriations	8	200,000,000.00	100,000,000.00
Profit before taxes		314,628,672.39	210,708,145.15

Income taxes	9
Current tax expense		-33,702,968.75	-14,146,863.83
Change in deferred taxes		-300,680.40	-2,884,132.86
Profit for the year		280,625,023.24	193,677,148.46

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 107

Balance sheet of the Parent company


Assets

EUR	Note	2022	2021
Non-current assets
Intangible assets	10	757,622.23	829,481.67
Tangible assets	10	261,218.50	579,997.33
Investments	11
Shares in Group companies		1,244,704,584.34	1,363,525,778.02
Other investments		347,172,377.82	279,365,663.15
Total non-current assets		1,592,895,802.89	1,644,300,920.17

Current assets
Long-term receivables	13	3,093,865.81	2,275,705.33
Short-term receivables	13	897,800,275.98	621,646,675.13
Securities		50,000,000.00	–
Bank and cash		306,992,681.25	195,948,681.23
Total current assets		1,257,886,823.04	819,871,061.69

Total assets		2,850,782,625.93	2,464,171,981.86

Shareholders' equity and liabilities

EUR	Note	2022	2021
Shareholders' equity	14
Share capital		107,186,442.52	107,186,442.52
Share premium fund		20,180,000.00	20,180,000.00
Treasury shares		-27,935,122.14	-8,832,733.61
Invested non-restricted equity fund		433,376,746.22	434,499,801.35
Retained earnings		348,530,708.09	353,730,583.47
Profit for the year		280,625,023.24	193,677,148.46
Total shareholders' equity		1,161,963,797.93	1,100,441,242.19

Liabilities
Long-term liabilities	15	1,034,734,095.00	640,083,385.00
Current liabilities	16	654,084,733.00	723,647,354.67
Total liabilities		1,688,818,828.00	1,363,730,739.67

Total shareholders' equity and liabilities		2,850,782,625.93	2,464,171,981.86

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 108

Cash flow statement of the Parent company


EUR thousand	2022	2021
Cash flows from operating activities
Profit for the year	280,625	193,677
Depreciation and amortization	391	3,194
Impairment	–	10,945
Financial income and expenses, net	-142,474	-133,484
Gains/losses on sale, net	-62	-1,679
Group contributions	-200,000	-100,000
Taxes	34,004	17,031
Other non-cash items	–	493
Total adjustments to profit for the year	-308,141	-203,500

Increase / decrease in short-term non-interest-bearing trade receivables	-31,610	-45,937
Increase / decrease in short-term non-interest-bearing debt	137,471	116,756
Change in working capital	105,861	70,820

Interest paid	-36,762	-16,598
Other financial expenses paid	-50,296	-7,689
Dividends received	294,017	134,897
Interest received	11,230	5,418
Income taxes paid	-19,784	-15,727
Net cash provided by operating activities	276,749	161,297

Cash flows from investing activities
Divestments in tangible and intangible assets	–	3,765
Investments in subsidiary shares	-14,807	–
Decrease in subsidiary shares	–	13,025
Long-term loans granted	-570,102	-136,112
Repayments of long-term loans	500,358	244,186
Short-term loans granted	-342,609	-227,959
Repayments of short-term loans	277,014	385,465
Purchase of other investments	-50,000	–
Divestments in other investments	2,000	–
Interest received from investments	23,167	20,954
Net cash used in investing activities	-174,979	303,324

Cash flows from financing activities
Purchase of treasury shares	-25,104	–
Decrease in treasury shares	6,001	660
Invested non-restricted equity fund	-1,123	-2,102
Sales from treasury shares to subsidiaries	3,039	–
Changes of short term loans, net	79,643	-59,931
Withdrawal of long-term loans	499,583	–
Repayments of long-term loans	-252,692	-349,365
Dividends paid	-198,389	-165,605
Change in Group pool accounts	-201,684	5,037
Group contributions	100,000	62,900
Net cash provided by / used in financing activities	9,274	-508,406

Net increase / decrease in bank and cash	111,044	-43,785
Bank and cash on January 1	195,949	239,734
Bank and cash on December 31	306,993	195,949

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 109

Notes to the financial statements of the Parent company

1Accounting principles

The Parent Company Financial Statements have been prepared in accordance with the Finnish Generally Accepted

Accounting Principles. 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 software3–5 years

Other intangibles10 years

Buildings and structures20–25 years

Machinery and equipment3–5 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 effective 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 issuance of bonds are recognized over the life of the bond using the

effective 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 differences in between the tax bases of

assets and liabilities and their amounts in financial reporting, using the enacted tax rates effective 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 sufficient taxable profit against which the asset can be utilized.

Metso Outotec Oyj – Board of Directors’ report and financial statements 2022 110


2022
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 Jan 1	1,539	2,374	1,150	5,063	156	733	974	1,863	6,926
Acquisition cost Dec 31	1,539	2,374	1,150	5,063	156	733	974	1,863	6,926

Accumulated depreciation Jan 1	-1,539	-1,593	-826	-3,959	–	-733	-825	-1,558	-5,517
Depreciation for the period	–	-187	-160	-347	–	–	-44	-44	-391
Accumulated depreciation Dec 31	-1,539	-1,780	-986	-4,305	–	-733	-869	-1,602	-5,908

Net carrying value Dec 31	–	594	164	758	156	–	106	261	1,019


2022
EUR thousand	Shares in Group companies	Other shares	Receivables from Group companies	Receivables from other companies	Other investments total
Acquisition cost on Jan 1	1,363,526	2,532	276,584	250	279,366
Additions	14,807	–	569,602	–	569,602
Decreases	-133,628	-1,938	-499,608	-250	-501,796
Acquisition cost on Dec 31	1,244,705	594	346,578	0	347,172

Net carrying value on Dec 31	1,244,705	594	346,578	0	347,172

2021
EUR thousand	Shares in Group companies	Other shares	Receivables from Group companies	Receivables from other companies	Other investments total
Acquisition cost on Jan 1	1,374,871	2,657	412,081	750	415,488
Additions	–	–	136,112	–	136,112
Decreases	-11,345	-125	-271,609	-500	-272,234
Acquisition cost on Dec 31	1,363,526	2,532	276,584	250	279,366

Net carrying value on Dec 31	1,363,526	2,532	276,584	250	279,366


Subsidiary	Domicile	Ownership, %
International Project Services Ltd. Oy	Finland	44.50
Metso Outotec Canada Inc.	Canada	100.00
Metso Outotec Finland Oy	Finland	100.00
Metso Outotec Captive Insurance Limited	Great Britain	100.00
Metso Outotec France SAS	France	100.00
Metso Outotec USA Inc	United States	100.00
Outotec Tecnologia Brazil Ltda	Brazil	57.28
Metso Outotec Chile S.A.	Chile	24.75
Metso Outotec Mexico SA de CV	Mexico	5.52
Metso Outotec Perú SA	Peru	10.18
Metso Outotec Poland Sp. z o.o.	Poland	46.30
Outotec (RSA) Pty Ltd	South-Africa	15.30
Metso Outotec New Material Technology (Shanghai) Co., Ltd.	China	100.00
Outotec (Spain) S.L.	Spain	100.00
Outotec Africa Holdings	South-Africa	100.00
Outotec Holding GmbH	Germany	100.00
Outotec International Holding Oy	Finland	100.00
Metso Outotec Morocco LLC	Morocco	100.00
Outotec Pty. Ltd.	Australia	100.00
Metso Outotec-Technology (Ecuador) S.A.	Ecuador	99.90
Rauma Oy	Finland	100.00


Statement of distributable funds on December 31
EUR thousand	2022	2021
Fair value reserve
Invested non-restricted equity fund	433,377	434,500
Treasury shares	-27,935	-8,833
Retained earnings	348,531	353,731
Profit for the year	280,625	193,677
Total distributable funds	1,034,597	973,075


Account book	Voucher class	Archiving
General journal and general ledger		in electronic format
Specifications of accounts receivable and payable		in electronic format
Bank vouchers	16,26,43	in electronic format
Sales invoices	RV,10,11,17	in electronic format
Purchase invoices	KR,20,27,69	in electronic format
Payroll accounting with vouchers	33	in electronic format
Journal entries	01,02,03,04,05,10,21,22,23,30,32,39,54,55,60,64,76,79	in electronic format
Journal entries	34,35	in electronic format
Notes vouchers		in electronic format