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\u2019s functional currency and Metso Outotec\u2019s 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\u2019s accounting policies are disclosed under each relevant note of the Consolidated financial statements. |
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\u2019s 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\u2019s Consolidated financial statements, are disclosed in the following notes: Note 1.2\u00a0 Sales\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.6\u00a0 Provisions\u00a0 \u00a0 \u00a0 \u00a0 Note 1.6\u00a0 Share-based payments\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.7\u00a0 Post-employment obligations Note 1.8\u00a0 Income taxes\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.1\u00a0 Goodwill and intangible assets Note 2.2\u00a0 Trade receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.2\u00a0 Property, plant, and equipment Note 2.3\u00a0 Other receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.3\u00a0 Right-of-use assets Note 2.4\u00a0 Inventory\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 5.4\u00a0 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\u2019s 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\u2019s 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\u2019s 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. |
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\u2019s 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. |
2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EUR million | Aggregates | Minerals | Metals | Group Head Office and Other | Total |
Sales, external | 1,446 | 3,359 | 489 | 0 | 5,295 |
Sales, intra-group | \u2013 | \u2013 | \u2013 | \u2013 | \u2013 |
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 | \u2013 | \u2013 | \u2013 | -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 |
EUR million | 2022 | 2021 |
Capacity adjustment\u00a0costs | -12 | -59 |
Acquisition costs | 0 | 6 |
Profits on disposals, net | 0 | 3 |
Wind down of Russian business | -150 | \u2013 |
Adjustments items, total | -162 | -50 |
2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EUR million | Aggregates | Minerals | Metals | Group Head Office and Other | Total |
Sales, external | 1,202 | 2,724 | 310 | 0 | 4,236 |
Sales, intra-group | \u2013 | \u2013 | \u2013 | \u2013 | \u2013 |
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 | \u2013 | \u2013 | \u2013 | -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 presents the geographical distribution of the segments\u2019 sales by location of customers. Non-current assets and gross capital expenditure are presented by location of assets. |
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 |
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 |
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 |
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 |
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\u00a0needs 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. |
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 |
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 |
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 |
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 |
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 |
\u00a0 | \u00a0 | |
Other operating expenses | ||
Loss on disposed businesses | -2 | \u2013 |
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 |
\u00a0 | \u00a0 | |
Other operating income and expenses, net | -41 | -18 |
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 |
Shares (pcs) | 2022 |
Kari Stadigh | 68,325 |
Klaus Caw\u00e9n | 37,685 |
Brian Beamish | 1,738 |
Christer Gardell | 44,063 |
Terhi Koipij\u00e4rvi | 3,725 |
Antti M\u00e4kinen | 18,806 |
Ian W. Pearce | 26,500 |
Emanuela Speranza | 5,200 |
Arja Talma | 30,426 |
Total | 236,468 |
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. |
December 31, 2022 | Beneficiaries total | Shares total |
Matching Share Plan 2018\u20132022 | ||
Granted 2022 | 1 | 35,338 |
Outotec LTIP 2019 | ||
Granted 2022 | 58 | 260,547 |
Plan DSUP 2019\u20132021 1) | ||
Granted 2022 | 84 | |
Plan PSP 2019\u20132021 | ||
Granted 2022 | 7 | 272,089 |
Plan RSP 2019\u20132021 | ||
Granted 2022 | 2 | 56,542 |
EUR thousand | 2022 | 2021 |
Plan PSP and DSUP 2018\u20132020 | \u2013 | -2,257 |
Plan PSP, DSUP and RSP 2019\u20132021 | -201 | -3,696 |
Plan PSP and DSUP 2020\u20132022 | -3,926 | -3,186 |
Outotec LTIP 2019 | -286 | -1,195 |
Plan PSP and RSP 2021\u20132023 | -4,472 | -3,350 |
Plan PSP and RSP 2022-2024 | -1,628 | 0 |
Total | -10,513 | -13,684 |
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. |
Metso Outotec is subject to income tax in its operating countries. Metso Outotec\u2019s 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. |
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 |
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 | \u2013 | 13 | 46 | \u2013 | 46 |
Total comprehensive income | 25 | -7 | 18 | 36 | 2 | 38 |
Current year tax | \u2013 | \u2013 | ||||
Deferred tax | -7 | 2 | ||||
Total | -7 | 2 |
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. |
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\u2019 undistributed earnings has been provided only where Metso Outotec\u2019s 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. |
2022 | ||||||
EUR million | Jan 1 | Charged to income statement | Charged to shareholders\u2019 equity | Acquisitions and disposals | Translation differences and Group items | Dec 31 |
Deferred tax assets | ||||||
Tax losses carried forward | \u2013 | 2 | \u2013 | 1 | 0 | 2 |
Intangible assets and property, plant and equipment | 37 | -6 | \u2013 | 0 | 1 | 31 |
Inventory | 60 | 19 | \u2013 | \u2013 | 0 | 79 |
Provisions | 31 | 30 | \u2013 | \u2013 | 1 | 61 |
Accruals | 23 | 9 | 0 | \u2013 | 0 | 32 |
Pension related items | 8 | 4 | -7 | \u2013 | 0 | 6 |
Other | 49 | -22 | 0 | \u2013 | 5 | 31 |
Total deferred tax assets | 209 | 35 | -7 | 1 | 6 | 244 |
Offset against deferred tax liabilities\u00a0 | -31 | \u2013 | \u2013 | \u2013 | 12 | -19 |
Net deferred tax assets | 178 | 35 | -7 | 1 | 19 | 225 |
Deferred tax liabilities | ||||||
Purchase price allocations | 178 | -14 | \u2013 | 1 | \u2013 | 166 |
Intangible assets and property, plant and equipment | 12 | 4 | \u2013 | \u2013 | 0 | 15 |
Other | 51 | -20 | 1 | \u2013 | 0 | 31 |
Total deferred tax liabilities | 240 | -30 | 1 | 1 | 0 | 212 |
Offset against deferred tax assets\u00a0 | -31 | \u2013 | \u2013 | \u2013 | 12 | -19 |
Net deferred tax liabilities | 209 | -30 | 1 | 1 | 12 | 193 |
Deferred tax assets (+) / liabilities (-), net | -32 | 65 | -8 | 0 | 6 | 31 |
2021 | ||||||
EUR million | Jan 1 | Charged to income statement | Charged to shareholders\u2019 equity | Acquisitions and disposals | Translation differences and Group items | Dec 31 |
Deferred tax assets | ||||||
Tax losses carried forward | 13 | -13 | \u2013 | \u2013 | \u2013 | \u2013 |
Intangible assets and property, plant and equipment | 30 | 8 | \u2013 | -1 | 0 | 37 |
Inventory | 47 | 13 | \u2013 | \u2013 | 0 | 60 |
Provisions | 32 | -1 | \u2013 | \u2013 | 0 | 31 |
Accruals | 15 | 7 | \u2013 | \u2013 | 1 | 23 |
Pension related items | 10 | -3 | 1 | \u2013 | 0 | 8 |
Other | 25 | 12 | 2 | 0 | 9 | 49 |
Total deferred tax assets | 173 | 23 | 3 | -1 | 11 | 209 |
Offset against deferred tax liabilities\u00a0 | -24 | \u2013 | \u2013 | \u2013 | -7 | -31 |
Net deferred tax assets | 149 | 23 | 3 | -1 | 3 | 178 |
Deferred tax liabilities | ||||||
Purchase price allocations | 188 | -11 | \u2013 | \u2013 | 2 | 178 |
Intangible assets and property, plant and equipment | 14 | -3 | \u2013 | \u2013 | 0 | 12 |
Other | 45 | 3 | 1 | \u2013 | 1 | 51 |
Total deferred tax liabilities | 247 | -11 | 1 | \u2013 | 4 | 240 |
Offset against deferred tax assets\u00a0 | -24 | \u2013 | \u2013 | \u2013 | -7 | -31 |
Net deferred tax liabilities | 223 | -11 | 1 | \u2013 | -4 | 209 |
Deferred tax assets (+) / liabilities (-), net | -74 | 34 | 2 | -1 | 7 | -32 |
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 |
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 |
Estimates on expected credit losses and credit loss provisions to be recognized are based on management\u2019s best judgment. The judgment is based on experience with past years\u2019 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 | \u2013 | 15 |
Total | 799 | 683 |
2022 | 2021 | |||
EUR million | Trade receivables, gross | of which provided | Trade receivables, gross | of which provided |
Undue | 566 | 1 | 496 | 1 |
overdue 1\u201330 days | 96 | 0 | 42 | 0 |
overdue 31\u2013180 days | 113 | 4 | 127 | 2 |
overdue 181\u2013360 days | 24 | 6 | 21 | 3 |
overdue over 360 days | 99 | 88 | 87 | 84 |
Total, gross | 898 | 100 | 773 | 90 |
Total, net | 799 | 683 |
EUR million | 2022 | 2021 |
Accumulated provision, January 1 | 90 | 85 |
Impact of exchange rates | 0 | 1 |
Acquisitions | \u2013 | \u2013 |
Impact in income statement | 9 | 9 |
Other change | 0 | -5 |
Accumulated provision, December 31 | 100 | 90 |
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. |
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. |
2022 | 2021 | |||||
EUR million | Non- current | Current | Total | Non- current | Current | Total |
Derivative instruments | 3 | 86 | 88 | 2 | 46 | 47 |
Deferred tax assets | 225 | \u2013 | 225 | 178 | \u2013 | 178 |
Income tax receivables | \u2013 | 48 | 48 | \u2013 | 36 | 36 |
Other receivables | ||||||
Prepaid expenses and accrued income | \u2013 | 69 | 69 | \u2013 | 45 | 45 |
VAT, payroll tax and social charge receivables | \u2013 | 152 | 152 | \u2013 | 125 | 125 |
Pension assets | 2 | \u2013 | 2 | 18 | \u2013 | 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 |
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. |
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.\u00a0 \u00a0 |
EUR million | 2022 | 2021 |
Materials and supplies | 288 | 199 |
Work in process | 600 | 439 |
Finished products | 958 | 631 |
Inventories | 1,846 | 1,269 |
2022 | 2021 | |||||
EUR million | Non-current | Current | Total | Non-current | Current | Total |
Trade payables | \u2013 | 787 | 787 | \u2013 | 692 | 692 |
Derivative instruments | 33 | 47 | 80 | 6 | 52 | 58 |
Other payables | ||||||
Accrued interests | \u2013 | 6 | 6 | \u2013 | 6 | 6 |
Accrued personnel costs | \u2013 | 203 | 203 | \u2013 | 165 | 165 |
Accrued project costs | \u2013 | 358 | 358 | \u2013 | 252 | 252 |
VAT, payroll tax and social charge payables | \u2013 | 64 | 64 | \u2013 | 78 | 78 |
Other payables | 2 | 121 | 123 | 2 | 84 | 86 |
Other payables | 2 | 752 | 754 | 2 | 585 | 587 |
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. |
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. |
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\u2019s 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. |
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 |
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 | \u2013 | 0 | \u2013 | 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 |
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\u2019s arrangements based on local legislation, professional advice and consultation with Metso Outotec, based on acceptable risk tolerances. |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension benefits | Other post- employment benefits | Total |
Present value of funded obligations | 88 | \u2013 | 88 | 125 | \u2013 | 125 |
Fair value of plan assets | -89 | \u2013 | -89 | -143 | \u2013 | -143 |
Total | -1 | \u2013 | -1 | -18 | \u2013 | -18 |
Present value of unfunded obligations | 66 | 29 | 95 | 89 | 35 | 123 |
Unrecognized asset | 1 | \u2013 | 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 | \u2013 | -1 | -18 | 0 | -18 |
Liabilities classified as held for sale | \u2013 | \u2013 | \u2013 | 0 | \u2013 | 0 |
Net liability | 67 | 29 | 96 | 72 | 35 | 107 |
EUR million | 2022 | 2021 |
Net liability at beginning of year | 107 | 112 |
Adjustments due to business combinations | \u2013 | -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 |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension 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 | \u2013 | 0 | 2 | 0 | 2 |
Gain (-) / loss (+) recognized in income statement | 0 | 0 | 0 | 0 | 0 | 0 |
Recognition of past service cost (+) / credit (-) | \u2013 | \u2013 | \u2013 | 0 | 0 | 0 |
Administration costs paid by the scheme | 1 | \u2013 | 1 | 1 | 0 | 1 |
Expense (+) / income (-) recognized in income statement | 3 | 3 | 6 | 5 | 1 | 7 |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension benefits | Other post- employment benefits | Total |
Return on plan assets, excluding amounts included in interest expense (+) / income (-) | 43 | \u2013 | 43 | -1 | \u2013 | -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 | \u2013 | 0 | 1 | \u2013 | 1 |
Total gain (-) / loss (+) recognized through OCI | -5 | -4 | -9 | -8 | -1 | -9 |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension 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 | \u2013 | 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 | \u2013 | \u2013 | \u2013 | 0 | 0 | 0 |
Past service cost (+) / credit (-) | \u2013 | 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 | \u2013 | -2 | -19 | 0 | -19 |
Benefits paid from the arrangement | -6 | \u2013 | -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 |
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 | \u2013 | 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 |
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% |
% | 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% |
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 |
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% | \u2013 | 0.2 | 0.2 | 0.0 | 0.2 | 0.2 |
Decrease of 0.25% | \u2013 | -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 | \u2013 | 2.9 |
Decrease of 0.25% | -1.3 | n/a | -1.3 | -2.7 | \u2013 | -2.7 |
Medical cost trend | ||||||
Increase of 0.25% | n/a | 1.0 | 1.0 | \u2013 | 1.3 | 1.3 |
Decrease of 0.25% | n/a | -0.9 | -0.9 | \u2013 | -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 |
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\u2019s value in use or the CGU\u2019s 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\u201310 years Computer software 3\u20135 years Technology 3\u201320 years Customer relationships 3\u201320 years Other intangible assets < 1\u201320 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. |
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 | \u2013 | 7 | 13 |
Capital expenditure | \u2013 | 5 | 1 | 15 | 21 |
Reclassifications | \u2013 | 0 | 0 | 0 | 0 |
Other changes | \u2013 | -9 | -6 | -1 | -16 |
Acquisition cost at end of year | 1,128 | 102 | 16 | 1,079 | 2,326 |
Accumulated depreciation at beginning of year | \u2013 | -80 | -17 | -203 | -300 |
Translation differences | \u2013 | -2 | 0 | -1 | -4 |
Business acquisitions | \u2013 | 0 | \u2013 | \u2013 | 0 |
Other changes | \u2013 | 7 | 6 | 3 | 16 |
Amortization charges for the year, continuing\u00a0 operations | \u2013 | -4 | -2 | -60 | -66 |
Accumulated depreciation at end of year | \u2013 | -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 | \u2013 | 0 | 0 | -2 |
Capital expenditure | \u2013 | 3 | 0 | 12 | 15 |
Reclassifications | \u2013 | 0 | 0 | 0 | 0 |
Other changes | \u2013 | -24 | -83 | 3 | -104 |
Acquisition cost at end of year | 1,142 | 102 | 20 | 1,057 | 2,321 |
Accumulated depreciation at beginning of year | \u2013 | -91 | -83 | -136 | -310 |
Translation differences | \u2013 | -3 | -1 | -1 | -5 |
Business disposals | \u2013 | \u2013 | \u2013 | 0 | 0 |
Other changes | \u2013 | 27 | 83 | 3 | 113 |
Impairment losses | \u2013 | -5 | -12 | -9 | -26 |
Amortization charges for the year, continuing operations | \u2013 | -8 | -4 | -60 | -72 |
Accumulated depreciation at end of year | \u2013 | -80 | -17 | -203 | -300 |
Reclassed to held for sale | \u2013 | \u2013 | 0 | -1 | -1 |
Restatement | -18 | \u2013 | \u2013 | -1 | -19 |
Net book value at end of year | 1,124 | 23 | 3 | 852 | 2,002 |
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\u2019s 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\u2019s 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\u2019s future business priorities may affect the recoverable amounts. |
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 |
% | WACC increase by 2 p.p. | Terminal growth from 2% to 1.5% |
Minerals | -22% | -5% |
Aggregates | -24% | -6% |
Metals | -25% | -6% |
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\u201340 years Machinery and equipment3\u201320 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. |
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. |
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 | \u2013 | 2 | 3 | \u2013 | 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 | \u2013 | -113 | -410 | \u2013 | -523 |
Translation differences | \u2013 | 0 | -5 | \u2013 | -5 |
Business acquisitions | \u2013 | -1 | -1 | \u2013 | -2 |
Business disposals | \u2013 | 0 | 5 | \u2013 | 5 |
Divestments and other changes | \u2013 | 7 | 25 | \u2013 | 32 |
Write-downs | \u2013 | 0 | -1 | \u2013 | -1 |
Depreciation charges for the year | \u2013 | -9 | -43 | \u2013 | -52 |
Accumulated depreciation at end of year | \u2013 | -116 | -431 | \u2013 | -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 | \u2013 | -6 | -11 | \u2013 | -18 |
Capital expenditure | \u2013 | 5 | 34 | 37 | 76 |
Reclassifications | \u2013 | 8 | 29 | -37 | \u2013 |
Divestments and other changes | -10 | -14 | -55 | \u2013 | -79 |
Acquisition cost at end of year | 35 | 235 | 586 | 43 | 899 |
Accumulated depreciation at beginning of year | \u2013 | -118 | -417 | \u2013 | -535 |
Translation differences | \u2013 | -3 | -8 | \u2013 | -11 |
Business disposals | \u2013 | 3 | 9 | \u2013 | 13 |
Divestments and other changes | \u2013 | 13 | 50 | \u2013 | 63 |
Write-downs | \u2013 | \u2013 | -1 | \u2013 | -1 |
Depreciation charges for the year | \u2013 | -9 | -43 | \u2013 | -51 |
Accumulated depreciation at end of year | \u2013 | -113 | -410 | \u2013 | -523 |
Classification as held for sale | \u2013 | \u2013 | -2 | \u2013 | -2 |
Net book value at end of year | 35 | 121 | 174 | 43 | 373 |
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. |
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 | \u2013 | -1 | -1 | -2 |
Business disposals | \u2013 | -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 | \u2013 | -55 | -15 | -70 |
Translation differences | \u2013 | -2 | \u2013 | -2 |
Business disposals | \u2013 | 5 | 1 | 5 |
Accumulated depreciation for derecognized contracts | \u2013 | 12 | 8 | 21 |
Depreciation charges for the year | \u2013 | -29 | -8 | -38 |
Other changes | \u2013 | \u2013 | \u2013 | \u2013 |
Accumulated depreciation at end of year | \u2013 | -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 | \u2013 | 155 | 26 | 181 |
Translation differences | \u2013 | 3 | \u2013 | 3 |
Business disposals | \u2013 | \u2013 | \u2013 | \u2013 |
Additions | \u2013 | 29 | 9 | 38 |
Derecognition | \u2013 | -15 | -6 | -21 |
Other changes | 1 | \u2013 | \u2013 | 2 |
Acquisition cost at end of year | 1 | 171 | 29 | 202 |
Accumulated depreciation at beginning of year | \u2013 | -33 | -12 | -45 |
Translation differences | \u2013 | -1 | \u2013 | -1 |
Business disposals | \u2013 | \u2013 | \u2013 | \u2013 |
Accumulated depreciation for derecognized contracts | \u2013 | 7 | 6 | 13 |
Depreciation charges for the year | \u2013 | -29 | -9 | -38 |
Other changes | \u2013 | \u2013 | \u2013 | \u2013 |
Accumulated depreciation at end of year | \u2013 | -55 | -15 | -70 |
Classification as held for sale | \u2013 | -3 | -1 | -4 |
Business disposals, discontinued operations | \u2013 | \u2013 | 0 | 0 |
Net book value at end of year | 1 | 113 | 13 | 127 |
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 |
EUR million | 2022 | 2021 |
Cost of goods sold | -86 | -84 |
Selling, general and administrative expenses | -69 | -78 |
Total | -156 | -161 |
EUR million | 2022 | 2021 |
Effects in | ||
Income statement | +/-3.2 | +/-1.3 |
Equity | +/-0.0 | +/-0.0 |
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 | \u2013 | 68 | \u2013 | \u2013 | 24 | \u2013 |
Financial assets at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 21 | \u2013 | \u2013 | 24 | \u2013 |
Total | \u2013 | 88 | \u2013 | \u2013 | 48 | \u2013 |
Liabilities | ||||||
Financial liabilities at fair value through profit and loss | ||||||
Derivatives not under hedge accounting | \u2013 | 29 | \u2013 | \u2013 | 29 | \u2013 |
Financial liabilities at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 51 | \u2013 | \u2013 | 29 | \u2013 |
Total | \u2013 | 80 | \u2013 | \u2013 | 58 | \u2013 |
Under IFRS 9, Metso Outotec classifies financial assets and liabilities in measurement categories according to contractual terms of the cash flows and Metso Outotec\u2019s 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.\u00a0 \u00a0 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.\u00a0 \u00a0 |
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.\u00a0 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. |
2022 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 2 | \u2013 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 5 | 5 | 5 |
Derivatives financial instruments | 3 | \u2013 | \u2013 | 3 | 3 |
Other receivables | \u2013 | \u2013 | 19 | 19 | 19 |
Total | 5 | \u2013 | 24 | 29 | 29 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 796 | 796 | 796 |
Trade receivables, for sale | \u2013 | 2 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 65 | 21 | \u2013 | 86 | 86 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 104 | 104 | 104 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 497 | 497 | 497 |
Total | 65 | 23 | 1,400 | 1,488 | 1,488 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 758 | 758 | 734 |
Loans from financial institutions | \u2013 | \u2013 | 240 | 240 | 240 |
Lease liabilities | \u2013 | \u2013 | 87 | 87 | 87 |
Derivatives financial instruments | \u2013 | 33 | \u2013 | 33 | 33 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | \u2013 | 33 | 1,088 | 1,121 | 1,097 |
Current liabilities | |||||
Loans from financial institutions | \u2013 | \u2013 | 96 | 96 | 96 |
Commercial papers | \u2013 | \u2013 | 80 | 80 | 80 |
Lease liabilities | \u2013 | \u2013 | 31 | 31 | 31 |
Trade payables | \u2013 | \u2013 | 787 | 787 | 787 |
Derivatives financial instruments | 29 | 18 | \u2013 | 47 | 47 |
Total | 29 | 18 | 994 | 1,040 | 1,040 |
2021 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 4 | \u2013 | \u2013 | 4 | 4 |
Loan receivables | \u2013 | \u2013 | 6 | 6 | 6 |
Derivatives financial instruments | \u2013 | 2 | \u2013 | 2 | 2 |
Other receivables | \u2013 | \u2013 | 20 | 20 | 20 |
Total | 4 | 2 | 26 | 31 | 31 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 665 | 665 | 665 |
Trade receivables, for sale | \u2013 | 3 | \u2013 | 3 | 3 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 24 | 22 | \u2013 | 46 | 46 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 81 | 81 | 81 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 393 | 393 | 393 |
Total | 24 | 25 | 1,141 | 1,190 | 1,190 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 587 | 587 | 597 |
Loans from financial institutions | \u2013 | \u2013 | 40 | 40 | 40 |
Lease liabilities | \u2013 | \u2013 | 104 | 104 | 104 |
Derivatives financial instruments | 1 | 5 | \u2013 | 6 | 6 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | 1 | 5 | 732 | 738 | 749 |
Current liabilities | |||||
Current portion of non-current debt | \u2013 | \u2013 | 150 | 150 | 151 |
Loans from financial institutions | \u2013 | \u2013 | 42 | 42 | 42 |
Lease liabilities | \u2013 | \u2013 | 30 | 30 | 30 |
Trade payables | \u2013 | \u2013 | 692 | 692 | 692 |
Derivatives financial instruments | 28 | 24 | \u2013 | 52 | 52 |
Total | 28 | 24 | 914 | 966 | 967 |
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 |
% | 2022 | 2021 |
With maturity three months or less | 4.16% | 3.59% |
\u00a0 | 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 | \u2013 |
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 |
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 | \u2013 | -27 | \u2013 | \u2013 | \u2013 | -27 |
Transferred to profit and loss, net of tax | ||||||
Sales | \u2013 | 3 | \u2013 | \u2013 | \u2013 | 3 |
Cost of goods sold / Administrative expenses | \u2013 | 27 | \u2013 | \u2013 | \u2013 | 27 |
Instruments at fair value and share-based rewards | ||||||
Transferred to profit and loss, net of tax | \u2013 | \u2013 | -1 | \u2013 | \u2013 | -1 |
Redemption of own shares | -25 | \u2013 | \u2013 | \u2013 | \u2013 | -25 |
Share-based payments, net of tax | 6 | \u2013 | 10 | \u2013 | \u2013 | 16 |
Other | \u2013 | \u2013 | \u2013 | 0 | -1 | -1 |
December 31, 2022 | -28 | -1 | 18 | 0 | 1,133 | 1,122 |
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 | \u2013 | -8 | \u2013 | \u2013 | \u2013 | -8 |
Transferred to profit and loss, net of tax | ||||||
Sales | \u2013 | -10 | \u2013 | \u2013 | \u2013 | -10 |
Cost of goods sold / Administrative expenses | \u2013 | 5 | \u2013 | \u2013 | \u2013 | 5 |
Share-based payments, net of tax | 0 | \u2013 | 7 | \u2013 | \u2013 | 7 |
December 31, 2021 | -9 | -4 | 9 | 0 | 1,134 | 1,130 |
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 |
2022 | 2021 | |||
EUR million | Carrying values | Fair values | Carrying values | Fair values |
Long-term interest-bearing debt | ||||
\u00a0 Bonds | 758 | 734 | 587 | 597 |
\u00a0 Loans from financial institutions | 240 | 240 | 40 | 40 |
\u00a0 Other long-term debt | 0 | \u2013 | \u2013 | \u2013 |
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 | ||||
\u00a0 Bonds, current portion | \u2013 | \u2013 | 100 | 101 |
\u00a0 Loans from financial institutions, current portion | \u2013 | \u2013 | 50 | 50 |
\u00a0 Loans from financial institutions | 96 | 96 | 42 | 42 |
\u00a0 Commercial papers | 80 | 80 | \u2013 | \u2013 |
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 |
2021 | ||||
EUR million | Borrowings | Repayments 2) | Interests | Lease liabilities 1) |
2022 | 202 | 192 | 10 | 33 |
2023 | 5 | \u2013 | 5 | 27 |
2024 | 305 | 300 | 5 | 21 |
2025 | 43 | 40 | 3 | 16 |
2026 | 3 | \u2013 | 3 | 12 |
Later | 305 | 300 | 5 | 40 |
Total | 863 | 832 | 31 | 148 |
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 |
2021 | Other non- cash movements | ||||||
EUR million | Balance at beginning of year | Cash flows | Disposals | Translation differences | Classification as held for sale | Balance at end of year | |
Borrowings, non- current | 1,129 | -350 | -1 | \u2013 | -2 | \u2013 | 777 |
Lease liabilities | 138 | -38 | 0 | 2 | 31 | \u2013 | 133 |
Borrowings, current | 77 | -37 | \u2013 | 2 | \u2013 | \u2013 | 42 |
Loan receivables | -8 | 1 | \u2013 | -1 | 0 | \u2013 | -9 |
Liquid funds | -537 | 81 | -2 | -14 | \u2013 | 0 | -473 |
Net interest-bearing liabilities | 799 | -344 | -3 | -11 | 29 | 0 | 470 |
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\u2019s 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 | \u2013 | 0 |
Other contingencies | 1 | 1 |
Total | 1,547 | 1,577 |
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. |
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. |
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 |
2022 | 2021 | |||
EUR million | Assets | Liabilities | Assets | Liabilities |
Interest rate swaps - fair value hedges | \u2013 | 33 | 2 | 5 |
Interest rate swaps - non-qualifying hedges | 3 | \u2013 | \u2013 | 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 |
December 31, 2022 | |||||
EUR million | 2023 | 2024 | 2025 | 2026 | 2027 and later |
Forward exchange contracts | 3,472 | 68 | \u2013 | \u2013 | \u2013 |
Interest rate swaps | \u2013 | 100 | \u2013 | \u2013 | 325 |
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 |
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 Ind\u00fastria e Com\u00e9rcio 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% |
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 Per\u00fa 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 S\u00f6ner | 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% |
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\u2019s 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\u2019s 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. |
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 O\u00fc | 40.0% | 1 | 40.0% | 1 |
Sidvin Outotec Engineering Private Ltd | 25.1% | 0 | 25.1% | 0 |
Total | 6 | 7 |
EUR million | 2022 | 2021 |
Investments in associated companies and joint ventures | ||
Acquisition cost as of January 1 | 10 | 11 |
Divestments | \u2013 | -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 |
EUR million | 2022 | 2021 |
Assets | 8 | 9 |
Liabilities | 1 | 2 |
Sales | 6 | 4 |
Profit | -1 | -1 |
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 |
EUR million | Total 2022 |
Cash consideration paid | -21 |
Cash and cash equivalents acquired | 0 |
Net cash flow for the year | -21 |
Contingent consideration | \u2013 |
Cash considerations, total | -21 |
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 |
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 \u2013 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. |
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 |
EUR million | 2022 | 2021 |
Non-current assets | \u2013 | 19 |
Inventories | \u2013 | 25 |
Trade and other receivables | \u2013 | 21 |
Cash and cash equivalents | \u2013 | 0 |
Total assets | \u2013 | 65 |
Non-current liabilities | \u2013 | 0 |
Current liabilities | \u2013 | 34 |
Total liabilities | \u2013 | 34 |
EUR million | 2022 | 2021 |
Goodwill | \u2013 | 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 |
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 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\u2019s 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\u2019s Consolidated financial statements, are disclosed in the following notes: Note 1.2\u00a0 Sales\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.6\u00a0 Provisions\u00a0 \u00a0 \u00a0 \u00a0 Note 1.6\u00a0 Share-based payments\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.7\u00a0 Post-employment obligations Note 1.8\u00a0 Income taxes\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.1\u00a0 Goodwill and intangible assets Note 2.2\u00a0 Trade receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.2\u00a0 Property, plant, and equipment Note 2.3\u00a0 Other receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.3\u00a0 Right-of-use assets Note 2.4\u00a0 Inventory\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 5.4\u00a0 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\u2019s 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\u2019s 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\u2019s 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. |
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\u2019s 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\u2019s Consolidated financial statements, are disclosed in the following notes: Note 1.2\u00a0 Sales\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.6\u00a0 Provisions\u00a0 \u00a0 \u00a0 \u00a0 Note 1.6\u00a0 Share-based payments\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.7\u00a0 Post-employment obligations Note 1.8\u00a0 Income taxes\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.1\u00a0 Goodwill and intangible assets Note 2.2\u00a0 Trade receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.2\u00a0 Property, plant, and equipment Note 2.3\u00a0 Other receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.3\u00a0 Right-of-use assets Note 2.4\u00a0 Inventory\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 5.4\u00a0 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\u2019s 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\u2019s 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\u2019s 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. |
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\u00a0needs 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. |
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 is subject to income tax in its operating countries. Metso Outotec\u2019s 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. |
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\u2019 undistributed earnings has been provided only where Metso Outotec\u2019s 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. |
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. |
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.\u00a0 \u00a0 |
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\u2019s arrangements based on local legislation, professional advice and consultation with Metso Outotec, based on acceptable risk tolerances. |
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\u2019s 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\u2019s Consolidated financial statements, are disclosed in the following notes: Note 1.2\u00a0 Sales\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.6\u00a0 Provisions\u00a0 \u00a0 \u00a0 \u00a0 Note 1.6\u00a0 Share-based payments\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 2.7\u00a0 Post-employment obligations Note 1.8\u00a0 Income taxes\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.1\u00a0 Goodwill and intangible assets Note 2.2\u00a0 Trade receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.2\u00a0 Property, plant, and equipment Note 2.3\u00a0 Other receivables\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 3.3\u00a0 Right-of-use assets Note 2.4\u00a0 Inventory\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Note 5.4\u00a0 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\u2019s 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\u2019s 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\u2019s 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. |
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\u2019s 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. |
2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EUR million | Aggregates | Minerals | Metals | Group Head Office and Other | Total |
Sales, external | 1,446 | 3,359 | 489 | 0 | 5,295 |
Sales, intra-group | \u2013 | \u2013 | \u2013 | \u2013 | \u2013 |
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 | \u2013 | \u2013 | \u2013 | -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 |
EUR million | 2022 | 2021 |
Capacity adjustment\u00a0costs | -12 | -59 |
Acquisition costs | 0 | 6 |
Profits on disposals, net | 0 | 3 |
Wind down of Russian business | -150 | \u2013 |
Adjustments items, total | -162 | -50 |
2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
EUR million | Aggregates | Minerals | Metals | Group Head Office and Other | Total |
Sales, external | 1,202 | 2,724 | 310 | 0 | 4,236 |
Sales, intra-group | \u2013 | \u2013 | \u2013 | \u2013 | \u2013 |
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 | \u2013 | \u2013 | \u2013 | -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 presents the geographical distribution of the segments\u2019 sales by location of customers. Non-current assets and gross capital expenditure are presented by location of assets. |
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 |
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 |
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 |
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 |
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. |
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\u00a0needs 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. |
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 |
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 |
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 |
EUR million | 2022 | 2021 |
Trade receivables | 799 | 668 |
Customer contract assets | 354 | 324 |
Customer contract liabilities | 474 | 388 |
Advances received | 281 | 235 |
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 |
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 |
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 |
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 |
\u00a0 | \u00a0 | |
Other operating expenses | ||
Loss on disposed businesses | -2 | \u2013 |
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 |
\u00a0 | \u00a0 | |
Other operating income and expenses, net | -41 | -18 |
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 |
Shares (pcs) | 2022 |
Kari Stadigh | 68,325 |
Klaus Caw\u00e9n | 37,685 |
Brian Beamish | 1,738 |
Christer Gardell | 44,063 |
Terhi Koipij\u00e4rvi | 3,725 |
Antti M\u00e4kinen | 18,806 |
Ian W. Pearce | 26,500 |
Emanuela Speranza | 5,200 |
Arja Talma | 30,426 |
Total | 236,468 |
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 |
Shares (pcs) | 2022 |
Kari Stadigh | 68,325 |
Klaus Caw\u00e9n | 37,685 |
Brian Beamish | 1,738 |
Christer Gardell | 44,063 |
Terhi Koipij\u00e4rvi | 3,725 |
Antti M\u00e4kinen | 18,806 |
Ian W. Pearce | 26,500 |
Emanuela Speranza | 5,200 |
Arja Talma | 30,426 |
Total | 236,468 |
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. |
December 31, 2022 | Beneficiaries total | Shares total |
Matching Share Plan 2018\u20132022 | ||
Granted 2022 | 1 | 35,338 |
Outotec LTIP 2019 | ||
Granted 2022 | 58 | 260,547 |
Plan DSUP 2019\u20132021 1) | ||
Granted 2022 | 84 | |
Plan PSP 2019\u20132021 | ||
Granted 2022 | 7 | 272,089 |
Plan RSP 2019\u20132021 | ||
Granted 2022 | 2 | 56,542 |
EUR thousand | 2022 | 2021 |
Plan PSP and DSUP 2018\u20132020 | \u2013 | -2,257 |
Plan PSP, DSUP and RSP 2019\u20132021 | -201 | -3,696 |
Plan PSP and DSUP 2020\u20132022 | -3,926 | -3,186 |
Outotec LTIP 2019 | -286 | -1,195 |
Plan PSP and RSP 2021\u20132023 | -4,472 | -3,350 |
Plan PSP and RSP 2022-2024 | -1,628 | 0 |
Total | -10,513 | -13,684 |
EUR million | 2022 | 2021 |
Finance income\u00a0 | ||
Dividends received | 0 | 0 |
Interest income | 3 | 1 |
Other finance income | 11 | 2 |
Finance income\u00a0 | 14 | 4 |
Foreign exchange gains/losses | -14 | -4 |
Finance expenses\u00a0 | ||
Interest expenses from financial liabilities at amortized cost | -39 | -18 |
Interest expenses on lease liabilities | -5 | -5 |
Other finance expenses | -19 | -17 |
Finance expenses\u00a0 | -63 | -40 |
Finance income and expenses, net | -63 | -39 |
EUR million | 2022 | 2021 |
Finance income\u00a0 | ||
Dividends received | 0 | 0 |
Interest income | 3 | 1 |
Other finance income | 11 | 2 |
Finance income\u00a0 | 14 | 4 |
Foreign exchange gains/losses | -14 | -4 |
Finance expenses\u00a0 | ||
Interest expenses from financial liabilities at amortized cost | -39 | -18 |
Interest expenses on lease liabilities | -5 | -5 |
Other finance expenses | -19 | -17 |
Finance expenses\u00a0 | -63 | -40 |
Finance income and expenses, net | -63 | -39 |
EUR million | 2022 | 2021 |
Finance income\u00a0 | ||
Dividends received | 0 | 0 |
Interest income | 3 | 1 |
Other finance income | 11 | 2 |
Finance income\u00a0 | 14 | 4 |
Foreign exchange gains/losses | -14 | -4 |
Finance expenses\u00a0 | ||
Interest expenses from financial liabilities at amortized cost | -39 | -18 |
Interest expenses on lease liabilities | -5 | -5 |
Other finance expenses | -19 | -17 |
Finance expenses\u00a0 | -63 | -40 |
Finance income and expenses, net | -63 | -39 |
EUR million | 2022 | 2021 |
Finance income\u00a0 | ||
Dividends received | 0 | 0 |
Interest income | 3 | 1 |
Other finance income | 11 | 2 |
Finance income\u00a0 | 14 | 4 |
Foreign exchange gains/losses | -14 | -4 |
Finance expenses\u00a0 | ||
Interest expenses from financial liabilities at amortized cost | -39 | -18 |
Interest expenses on lease liabilities | -5 | -5 |
Other finance expenses | -19 | -17 |
Finance expenses\u00a0 | -63 | -40 |
Finance income and expenses, net | -63 | -39 |
EUR million | 2022 | 2021 |
Finance income\u00a0 | ||
Dividends received | 0 | 0 |
Interest income | 3 | 1 |
Other finance income | 11 | 2 |
Finance income\u00a0 | 14 | 4 |
Foreign exchange gains/losses | -14 | -4 |
Finance expenses\u00a0 | ||
Interest expenses from financial liabilities at amortized cost | -39 | -18 |
Interest expenses on lease liabilities | -5 | -5 |
Other finance expenses | -19 | -17 |
Finance expenses\u00a0 | -63 | -40 |
Finance income and expenses, net | -63 | -39 |
EUR million | 2022 | 2021 |
Finance income\u00a0 | ||
Dividends received | 0 | 0 |
Interest income | 3 | 1 |
Other finance income | 11 | 2 |
Finance income\u00a0 | 14 | 4 |
Foreign exchange gains/losses | -14 | -4 |
Finance expenses\u00a0 | ||
Interest expenses from financial liabilities at amortized cost | -39 | -18 |
Interest expenses on lease liabilities | -5 | -5 |
Other finance expenses | -19 | -17 |
Finance expenses\u00a0 | -63 | -40 |
Finance income and expenses, net | -63 | -39 |
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. |
Metso Outotec is subject to income tax in its operating countries. Metso Outotec\u2019s 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. |
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 |
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 | \u2013 | 13 | 46 | \u2013 | 46 |
Total comprehensive income | 25 | -7 | 18 | 36 | 2 | 38 |
Current year tax | \u2013 | \u2013 | ||||
Deferred tax | -7 | 2 | ||||
Total | -7 | 2 |
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. |
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\u2019 undistributed earnings has been provided only where Metso Outotec\u2019s 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. |
2022 | ||||||
EUR million | Jan 1 | Charged to income statement | Charged to shareholders\u2019 equity | Acquisitions and disposals | Translation differences and Group items | Dec 31 |
Deferred tax assets | ||||||
Tax losses carried forward | \u2013 | 2 | \u2013 | 1 | 0 | 2 |
Intangible assets and property, plant and equipment | 37 | -6 | \u2013 | 0 | 1 | 31 |
Inventory | 60 | 19 | \u2013 | \u2013 | 0 | 79 |
Provisions | 31 | 30 | \u2013 | \u2013 | 1 | 61 |
Accruals | 23 | 9 | 0 | \u2013 | 0 | 32 |
Pension related items | 8 | 4 | -7 | \u2013 | 0 | 6 |
Other | 49 | -22 | 0 | \u2013 | 5 | 31 |
Total deferred tax assets | 209 | 35 | -7 | 1 | 6 | 244 |
Offset against deferred tax liabilities\u00a0 | -31 | \u2013 | \u2013 | \u2013 | 12 | -19 |
Net deferred tax assets | 178 | 35 | -7 | 1 | 19 | 225 |
Deferred tax liabilities | ||||||
Purchase price allocations | 178 | -14 | \u2013 | 1 | \u2013 | 166 |
Intangible assets and property, plant and equipment | 12 | 4 | \u2013 | \u2013 | 0 | 15 |
Other | 51 | -20 | 1 | \u2013 | 0 | 31 |
Total deferred tax liabilities | 240 | -30 | 1 | 1 | 0 | 212 |
Offset against deferred tax assets\u00a0 | -31 | \u2013 | \u2013 | \u2013 | 12 | -19 |
Net deferred tax liabilities | 209 | -30 | 1 | 1 | 12 | 193 |
Deferred tax assets (+) / liabilities (-), net | -32 | 65 | -8 | 0 | 6 | 31 |
2021 | ||||||
EUR million | Jan 1 | Charged to income statement | Charged to shareholders\u2019 equity | Acquisitions and disposals | Translation differences and Group items | Dec 31 |
Deferred tax assets | ||||||
Tax losses carried forward | 13 | -13 | \u2013 | \u2013 | \u2013 | \u2013 |
Intangible assets and property, plant and equipment | 30 | 8 | \u2013 | -1 | 0 | 37 |
Inventory | 47 | 13 | \u2013 | \u2013 | 0 | 60 |
Provisions | 32 | -1 | \u2013 | \u2013 | 0 | 31 |
Accruals | 15 | 7 | \u2013 | \u2013 | 1 | 23 |
Pension related items | 10 | -3 | 1 | \u2013 | 0 | 8 |
Other | 25 | 12 | 2 | 0 | 9 | 49 |
Total deferred tax assets | 173 | 23 | 3 | -1 | 11 | 209 |
Offset against deferred tax liabilities\u00a0 | -24 | \u2013 | \u2013 | \u2013 | -7 | -31 |
Net deferred tax assets | 149 | 23 | 3 | -1 | 3 | 178 |
Deferred tax liabilities | ||||||
Purchase price allocations | 188 | -11 | \u2013 | \u2013 | 2 | 178 |
Intangible assets and property, plant and equipment | 14 | -3 | \u2013 | \u2013 | 0 | 12 |
Other | 45 | 3 | 1 | \u2013 | 1 | 51 |
Total deferred tax liabilities | 247 | -11 | 1 | \u2013 | 4 | 240 |
Offset against deferred tax assets\u00a0 | -24 | \u2013 | \u2013 | \u2013 | -7 | -31 |
Net deferred tax liabilities | 223 | -11 | 1 | \u2013 | -4 | 209 |
Deferred tax assets (+) / liabilities (-), net | -74 | 34 | 2 | -1 | 7 | -32 |
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 |
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. |
2022 | ||||||
EUR million | Jan 1 | Charged to income statement | Charged to shareholders\u2019 equity | Acquisitions and disposals | Translation differences and Group items | Dec 31 |
Deferred tax assets | ||||||
Tax losses carried forward | \u2013 | 2 | \u2013 | 1 | 0 | 2 |
Intangible assets and property, plant and equipment | 37 | -6 | \u2013 | 0 | 1 | 31 |
Inventory | 60 | 19 | \u2013 | \u2013 | 0 | 79 |
Provisions | 31 | 30 | \u2013 | \u2013 | 1 | 61 |
Accruals | 23 | 9 | 0 | \u2013 | 0 | 32 |
Pension related items | 8 | 4 | -7 | \u2013 | 0 | 6 |
Other | 49 | -22 | 0 | \u2013 | 5 | 31 |
Total deferred tax assets | 209 | 35 | -7 | 1 | 6 | 244 |
Offset against deferred tax liabilities\u00a0 | -31 | \u2013 | \u2013 | \u2013 | 12 | -19 |
Net deferred tax assets | 178 | 35 | -7 | 1 | 19 | 225 |
Deferred tax liabilities | ||||||
Purchase price allocations | 178 | -14 | \u2013 | 1 | \u2013 | 166 |
Intangible assets and property, plant and equipment | 12 | 4 | \u2013 | \u2013 | 0 | 15 |
Other | 51 | -20 | 1 | \u2013 | 0 | 31 |
Total deferred tax liabilities | 240 | -30 | 1 | 1 | 0 | 212 |
Offset against deferred tax assets\u00a0 | -31 | \u2013 | \u2013 | \u2013 | 12 | -19 |
Net deferred tax liabilities | 209 | -30 | 1 | 1 | 12 | 193 |
Deferred tax assets (+) / liabilities (-), net | -32 | 65 | -8 | 0 | 6 | 31 |
2021 | ||||||
EUR million | Jan 1 | Charged to income statement | Charged to shareholders\u2019 equity | Acquisitions and disposals | Translation differences and Group items | Dec 31 |
Deferred tax assets | ||||||
Tax losses carried forward | 13 | -13 | \u2013 | \u2013 | \u2013 | \u2013 |
Intangible assets and property, plant and equipment | 30 | 8 | \u2013 | -1 | 0 | 37 |
Inventory | 47 | 13 | \u2013 | \u2013 | 0 | 60 |
Provisions | 32 | -1 | \u2013 | \u2013 | 0 | 31 |
Accruals | 15 | 7 | \u2013 | \u2013 | 1 | 23 |
Pension related items | 10 | -3 | 1 | \u2013 | 0 | 8 |
Other | 25 | 12 | 2 | 0 | 9 | 49 |
Total deferred tax assets | 173 | 23 | 3 | -1 | 11 | 209 |
Offset against deferred tax liabilities\u00a0 | -24 | \u2013 | \u2013 | \u2013 | -7 | -31 |
Net deferred tax assets | 149 | 23 | 3 | -1 | 3 | 178 |
Deferred tax liabilities | ||||||
Purchase price allocations | 188 | -11 | \u2013 | \u2013 | 2 | 178 |
Intangible assets and property, plant and equipment | 14 | -3 | \u2013 | \u2013 | 0 | 12 |
Other | 45 | 3 | 1 | \u2013 | 1 | 51 |
Total deferred tax liabilities | 247 | -11 | 1 | \u2013 | 4 | 240 |
Offset against deferred tax assets\u00a0 | -24 | \u2013 | \u2013 | \u2013 | -7 | -31 |
Net deferred tax liabilities | 223 | -11 | 1 | \u2013 | -4 | 209 |
Deferred tax assets (+) / liabilities (-), net | -74 | 34 | 2 | -1 | 7 | -32 |
Trade receivables are invoiced receivables from customers related to Metso Outotec\u2019s 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\u2019s 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 on expected credit losses and credit loss provisions to be recognized are based on management\u2019s best judgment. The judgment is based on experience with past years\u2019 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 | \u2013 | 15 |
Total | 799 | 683 |
2022 | 2021 | |||
EUR million | Trade receivables, gross | of which provided | Trade receivables, gross | of which provided |
Undue | 566 | 1 | 496 | 1 |
overdue 1\u201330 days | 96 | 0 | 42 | 0 |
overdue 31\u2013180 days | 113 | 4 | 127 | 2 |
overdue 181\u2013360 days | 24 | 6 | 21 | 3 |
overdue over 360 days | 99 | 88 | 87 | 84 |
Total, gross | 898 | 100 | 773 | 90 |
Total, net | 799 | 683 |
EUR million | 2022 | 2021 |
Accumulated provision, January 1 | 90 | 85 |
Impact of exchange rates | 0 | 1 |
Acquisitions | \u2013 | \u2013 |
Impact in income statement | 9 | 9 |
Other change | 0 | -5 |
Accumulated provision, December 31 | 100 | 90 |
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. |
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. |
2022 | 2021 | |||||
EUR million | Non- current | Current | Total | Non- current | Current | Total |
Derivative instruments | 3 | 86 | 88 | 2 | 46 | 47 |
Deferred tax assets | 225 | \u2013 | 225 | 178 | \u2013 | 178 |
Income tax receivables | \u2013 | 48 | 48 | \u2013 | 36 | 36 |
Other receivables | ||||||
Prepaid expenses and accrued income | \u2013 | 69 | 69 | \u2013 | 45 | 45 |
VAT, payroll tax and social charge receivables | \u2013 | 152 | 152 | \u2013 | 125 | 125 |
Pension assets | 2 | \u2013 | 2 | 18 | \u2013 | 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 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. |
2022 | 2021 | |||
EUR million | Trade receivables, gross | of which provided | Trade receivables, gross | of which provided |
Undue | 566 | 1 | 496 | 1 |
overdue 1\u201330 days | 96 | 0 | 42 | 0 |
overdue 31\u2013180 days | 113 | 4 | 127 | 2 |
overdue 181\u2013360 days | 24 | 6 | 21 | 3 |
overdue over 360 days | 99 | 88 | 87 | 84 |
Total, gross | 898 | 100 | 773 | 90 |
Total, net | 799 | 683 |
EUR million | 2022 | 2021 |
Accumulated provision, January 1 | 90 | 85 |
Impact of exchange rates | 0 | 1 |
Acquisitions | \u2013 | \u2013 |
Impact in income statement | 9 | 9 |
Other change | 0 | -5 |
Accumulated provision, December 31 | 100 | 90 |
2022 | 2021 | |||||
EUR million | Non- current | Current | Total | Non- current | Current | Total |
Derivative instruments | 3 | 86 | 88 | 2 | 46 | 47 |
Deferred tax assets | 225 | \u2013 | 225 | 178 | \u2013 | 178 |
Income tax receivables | \u2013 | 48 | 48 | \u2013 | 36 | 36 |
Other receivables | ||||||
Prepaid expenses and accrued income | \u2013 | 69 | 69 | \u2013 | 45 | 45 |
VAT, payroll tax and social charge receivables | \u2013 | 152 | 152 | \u2013 | 125 | 125 |
Pension assets | 2 | \u2013 | 2 | 18 | \u2013 | 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 |
2022 | 2021 | |||||
EUR million | Non- current | Current | Total | Non- current | Current | Total |
Derivative instruments | 3 | 86 | 88 | 2 | 46 | 47 |
Deferred tax assets | 225 | \u2013 | 225 | 178 | \u2013 | 178 |
Income tax receivables | \u2013 | 48 | 48 | \u2013 | 36 | 36 |
Other receivables | ||||||
Prepaid expenses and accrued income | \u2013 | 69 | 69 | \u2013 | 45 | 45 |
VAT, payroll tax and social charge receivables | \u2013 | 152 | 152 | \u2013 | 125 | 125 |
Pension assets | 2 | \u2013 | 2 | 18 | \u2013 | 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 |
2022 | 2021 | |||||
EUR million | Non- current | Current | Total | Non- current | Current | Total |
Derivative instruments | 3 | 86 | 88 | 2 | 46 | 47 |
Deferred tax assets | 225 | \u2013 | 225 | 178 | \u2013 | 178 |
Income tax receivables | \u2013 | 48 | 48 | \u2013 | 36 | 36 |
Other receivables | ||||||
Prepaid expenses and accrued income | \u2013 | 69 | 69 | \u2013 | 45 | 45 |
VAT, payroll tax and social charge receivables | \u2013 | 152 | 152 | \u2013 | 125 | 125 |
Pension assets | 2 | \u2013 | 2 | 18 | \u2013 | 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 |
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. |
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.\u00a0 \u00a0 |
EUR million | 2022 | 2021 |
Materials and supplies | 288 | 199 |
Work in process | 600 | 439 |
Finished products | 958 | 631 |
Inventories | 1,846 | 1,269 |
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 | \u2013 | 787 | 787 | \u2013 | 692 | 692 |
Derivative instruments | 33 | 47 | 80 | 6 | 52 | 58 |
Other payables | ||||||
Accrued interests | \u2013 | 6 | 6 | \u2013 | 6 | 6 |
Accrued personnel costs | \u2013 | 203 | 203 | \u2013 | 165 | 165 |
Accrued project costs | \u2013 | 358 | 358 | \u2013 | 252 | 252 |
VAT, payroll tax and social charge payables | \u2013 | 64 | 64 | \u2013 | 78 | 78 |
Other payables | 2 | 121 | 123 | 2 | 84 | 86 |
Other payables | 2 | 752 | 754 | 2 | 585 | 587 |
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 | \u2013 | 787 | 787 | \u2013 | 692 | 692 |
Derivative instruments | 33 | 47 | 80 | 6 | 52 | 58 |
Other payables | ||||||
Accrued interests | \u2013 | 6 | 6 | \u2013 | 6 | 6 |
Accrued personnel costs | \u2013 | 203 | 203 | \u2013 | 165 | 165 |
Accrued project costs | \u2013 | 358 | 358 | \u2013 | 252 | 252 |
VAT, payroll tax and social charge payables | \u2013 | 64 | 64 | \u2013 | 78 | 78 |
Other payables | 2 | 121 | 123 | 2 | 84 | 86 |
Other payables | 2 | 752 | 754 | 2 | 585 | 587 |
2022 | 2021 | |||||
EUR million | Non-current | Current | Total | Non-current | Current | Total |
Trade payables | \u2013 | 787 | 787 | \u2013 | 692 | 692 |
Derivative instruments | 33 | 47 | 80 | 6 | 52 | 58 |
Other payables | ||||||
Accrued interests | \u2013 | 6 | 6 | \u2013 | 6 | 6 |
Accrued personnel costs | \u2013 | 203 | 203 | \u2013 | 165 | 165 |
Accrued project costs | \u2013 | 358 | 358 | \u2013 | 252 | 252 |
VAT, payroll tax and social charge payables | \u2013 | 64 | 64 | \u2013 | 78 | 78 |
Other payables | 2 | 121 | 123 | 2 | 84 | 86 |
Other payables | 2 | 752 | 754 | 2 | 585 | 587 |
2022 | 2021 | |||||
EUR million | Non-current | Current | Total | Non-current | Current | Total |
Trade payables | \u2013 | 787 | 787 | \u2013 | 692 | 692 |
Derivative instruments | 33 | 47 | 80 | 6 | 52 | 58 |
Other payables | ||||||
Accrued interests | \u2013 | 6 | 6 | \u2013 | 6 | 6 |
Accrued personnel costs | \u2013 | 203 | 203 | \u2013 | 165 | 165 |
Accrued project costs | \u2013 | 358 | 358 | \u2013 | 252 | 252 |
VAT, payroll tax and social charge payables | \u2013 | 64 | 64 | \u2013 | 78 | 78 |
Other payables | 2 | 121 | 123 | 2 | 84 | 86 |
Other payables | 2 | 752 | 754 | 2 | 585 | 587 |
2022 | 2021 | |||||
EUR million | Non-current | Current | Total | Non-current | Current | Total |
Trade payables | \u2013 | 787 | 787 | \u2013 | 692 | 692 |
Derivative instruments | 33 | 47 | 80 | 6 | 52 | 58 |
Other payables | ||||||
Accrued interests | \u2013 | 6 | 6 | \u2013 | 6 | 6 |
Accrued personnel costs | \u2013 | 203 | 203 | \u2013 | 165 | 165 |
Accrued project costs | \u2013 | 358 | 358 | \u2013 | 252 | 252 |
VAT, payroll tax and social charge payables | \u2013 | 64 | 64 | \u2013 | 78 | 78 |
Other payables | 2 | 121 | 123 | 2 | 84 | 86 |
Other payables | 2 | 752 | 754 | 2 | 585 | 587 |
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. |
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. |
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\u2019s 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. |
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 |
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 | \u2013 | 0 | \u2013 | 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 |
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\u2019s arrangements based on local legislation, professional advice and consultation with Metso Outotec, based on acceptable risk tolerances. |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension benefits | Other post- employment benefits | Total |
Present value of funded obligations | 88 | \u2013 | 88 | 125 | \u2013 | 125 |
Fair value of plan assets | -89 | \u2013 | -89 | -143 | \u2013 | -143 |
Total | -1 | \u2013 | -1 | -18 | \u2013 | -18 |
Present value of unfunded obligations | 66 | 29 | 95 | 89 | 35 | 123 |
Unrecognized asset | 1 | \u2013 | 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 | \u2013 | -1 | -18 | 0 | -18 |
Liabilities classified as held for sale | \u2013 | \u2013 | \u2013 | 0 | \u2013 | 0 |
Net liability | 67 | 29 | 96 | 72 | 35 | 107 |
EUR million | 2022 | 2021 |
Net liability at beginning of year | 107 | 112 |
Adjustments due to business combinations | \u2013 | -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 |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension 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 | \u2013 | 0 | 2 | 0 | 2 |
Gain (-) / loss (+) recognized in income statement | 0 | 0 | 0 | 0 | 0 | 0 |
Recognition of past service cost (+) / credit (-) | \u2013 | \u2013 | \u2013 | 0 | 0 | 0 |
Administration costs paid by the scheme | 1 | \u2013 | 1 | 1 | 0 | 1 |
Expense (+) / income (-) recognized in income statement | 3 | 3 | 6 | 5 | 1 | 7 |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension benefits | Other post- employment benefits | Total |
Return on plan assets, excluding amounts included in interest expense (+) / income (-) | 43 | \u2013 | 43 | -1 | \u2013 | -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 | \u2013 | 0 | 1 | \u2013 | 1 |
Total gain (-) / loss (+) recognized through OCI | -5 | -4 | -9 | -8 | -1 | -9 |
2022 | 2021 | |||||
EUR million | \u00a0Pension benefits | Other post- employment benefits | Total | \u00a0Pension 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 | \u2013 | 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 | \u2013 | \u2013 | \u2013 | 0 | 0 | 0 |
Past service cost (+) / credit (-) | \u2013 | 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 | \u2013 | -2 | -19 | 0 | -19 |
Benefits paid from the arrangement | -6 | \u2013 | -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 |
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 | \u2013 | 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 |
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% |
% | 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% |
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 |
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% | \u2013 | 0.2 | 0.2 | 0.0 | 0.2 | 0.2 |
Decrease of 0.25% | \u2013 | -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 | \u2013 | 2.9 |
Decrease of 0.25% | -1.3 | n/a | -1.3 | -2.7 | \u2013 | -2.7 |
Medical cost trend | ||||||
Increase of 0.25% | n/a | 1.0 | 1.0 | \u2013 | 1.3 | 1.3 |
Decrease of 0.25% | n/a | -0.9 | -0.9 | \u2013 | -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 |
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. |
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\u2019s value in use or the CGU\u2019s 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\u201310 years Computer software 3\u20135 years Technology 3\u201320 years Customer relationships 3\u201320 years Other intangible assets < 1\u201320 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. |
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 | \u2013 | 7 | 13 |
Capital expenditure | \u2013 | 5 | 1 | 15 | 21 |
Reclassifications | \u2013 | 0 | 0 | 0 | 0 |
Other changes | \u2013 | -9 | -6 | -1 | -16 |
Acquisition cost at end of year | 1,128 | 102 | 16 | 1,079 | 2,326 |
Accumulated depreciation at beginning of year | \u2013 | -80 | -17 | -203 | -300 |
Translation differences | \u2013 | -2 | 0 | -1 | -4 |
Business acquisitions | \u2013 | 0 | \u2013 | \u2013 | 0 |
Other changes | \u2013 | 7 | 6 | 3 | 16 |
Amortization charges for the year, continuing\u00a0 operations | \u2013 | -4 | -2 | -60 | -66 |
Accumulated depreciation at end of year | \u2013 | -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 | \u2013 | 0 | 0 | -2 |
Capital expenditure | \u2013 | 3 | 0 | 12 | 15 |
Reclassifications | \u2013 | 0 | 0 | 0 | 0 |
Other changes | \u2013 | -24 | -83 | 3 | -104 |
Acquisition cost at end of year | 1,142 | 102 | 20 | 1,057 | 2,321 |
Accumulated depreciation at beginning of year | \u2013 | -91 | -83 | -136 | -310 |
Translation differences | \u2013 | -3 | -1 | -1 | -5 |
Business disposals | \u2013 | \u2013 | \u2013 | 0 | 0 |
Other changes | \u2013 | 27 | 83 | 3 | 113 |
Impairment losses | \u2013 | -5 | -12 | -9 | -26 |
Amortization charges for the year, continuing operations | \u2013 | -8 | -4 | -60 | -72 |
Accumulated depreciation at end of year | \u2013 | -80 | -17 | -203 | -300 |
Reclassed to held for sale | \u2013 | \u2013 | 0 | -1 | -1 |
Restatement | -18 | \u2013 | \u2013 | -1 | -19 |
Net book value at end of year | 1,124 | 23 | 3 | 852 | 2,002 |
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\u2019s 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\u2019s 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\u2019s future business priorities may affect the recoverable amounts. |
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 |
% | WACC increase by 2 p.p. | Terminal growth from 2% to 1.5% |
Minerals | -22% | -5% |
Aggregates | -24% | -6% |
Metals | -25% | -6% |
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\u2019s value in use or the CGU\u2019s 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\u201310 years Computer software 3\u20135 years Technology 3\u201320 years Customer relationships 3\u201320 years Other intangible assets < 1\u201320 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. |
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 | \u2013 | 7 | 13 |
Capital expenditure | \u2013 | 5 | 1 | 15 | 21 |
Reclassifications | \u2013 | 0 | 0 | 0 | 0 |
Other changes | \u2013 | -9 | -6 | -1 | -16 |
Acquisition cost at end of year | 1,128 | 102 | 16 | 1,079 | 2,326 |
Accumulated depreciation at beginning of year | \u2013 | -80 | -17 | -203 | -300 |
Translation differences | \u2013 | -2 | 0 | -1 | -4 |
Business acquisitions | \u2013 | 0 | \u2013 | \u2013 | 0 |
Other changes | \u2013 | 7 | 6 | 3 | 16 |
Amortization charges for the year, continuing\u00a0 operations | \u2013 | -4 | -2 | -60 | -66 |
Accumulated depreciation at end of year | \u2013 | -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 | \u2013 | 0 | 0 | -2 |
Capital expenditure | \u2013 | 3 | 0 | 12 | 15 |
Reclassifications | \u2013 | 0 | 0 | 0 | 0 |
Other changes | \u2013 | -24 | -83 | 3 | -104 |
Acquisition cost at end of year | 1,142 | 102 | 20 | 1,057 | 2,321 |
Accumulated depreciation at beginning of year | \u2013 | -91 | -83 | -136 | -310 |
Translation differences | \u2013 | -3 | -1 | -1 | -5 |
Business disposals | \u2013 | \u2013 | \u2013 | 0 | 0 |
Other changes | \u2013 | 27 | 83 | 3 | 113 |
Impairment losses | \u2013 | -5 | -12 | -9 | -26 |
Amortization charges for the year, continuing operations | \u2013 | -8 | -4 | -60 | -72 |
Accumulated depreciation at end of year | \u2013 | -80 | -17 | -203 | -300 |
Reclassed to held for sale | \u2013 | \u2013 | 0 | -1 | -1 |
Restatement | -18 | \u2013 | \u2013 | -1 | -19 |
Net book value at end of year | 1,124 | 23 | 3 | 852 | 2,002 |
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\u2019s 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\u2019s 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\u2019s future business priorities may affect the recoverable amounts. |
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 |
% | WACC increase by 2 p.p. | Terminal growth from 2% to 1.5% |
Minerals | -22% | -5% |
Aggregates | -24% | -6% |
Metals | -25% | -6% |
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\u201340 years Machinery and equipment3\u201320 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. |
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. |
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 | \u2013 | 2 | 3 | \u2013 | 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 | \u2013 | -113 | -410 | \u2013 | -523 |
Translation differences | \u2013 | 0 | -5 | \u2013 | -5 |
Business acquisitions | \u2013 | -1 | -1 | \u2013 | -2 |
Business disposals | \u2013 | 0 | 5 | \u2013 | 5 |
Divestments and other changes | \u2013 | 7 | 25 | \u2013 | 32 |
Write-downs | \u2013 | 0 | -1 | \u2013 | -1 |
Depreciation charges for the year | \u2013 | -9 | -43 | \u2013 | -52 |
Accumulated depreciation at end of year | \u2013 | -116 | -431 | \u2013 | -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 | \u2013 | -6 | -11 | \u2013 | -18 |
Capital expenditure | \u2013 | 5 | 34 | 37 | 76 |
Reclassifications | \u2013 | 8 | 29 | -37 | \u2013 |
Divestments and other changes | -10 | -14 | -55 | \u2013 | -79 |
Acquisition cost at end of year | 35 | 235 | 586 | 43 | 899 |
Accumulated depreciation at beginning of year | \u2013 | -118 | -417 | \u2013 | -535 |
Translation differences | \u2013 | -3 | -8 | \u2013 | -11 |
Business disposals | \u2013 | 3 | 9 | \u2013 | 13 |
Divestments and other changes | \u2013 | 13 | 50 | \u2013 | 63 |
Write-downs | \u2013 | \u2013 | -1 | \u2013 | -1 |
Depreciation charges for the year | \u2013 | -9 | -43 | \u2013 | -51 |
Accumulated depreciation at end of year | \u2013 | -113 | -410 | \u2013 | -523 |
Classification as held for sale | \u2013 | \u2013 | -2 | \u2013 | -2 |
Net book value at end of year | 35 | 121 | 174 | 43 | 373 |
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: \u2022 fixed payments, less any lease incentives provided by the lessor; \u2022 variable payments that depend on an index or a rate; \u2022 expected payments under residual value guarantees; \u2022 the exercise price of purchase options when exercise is estimated to be reasonably certain; and \u2022 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: \u2022 lease liability; \u2022 lease payments made at or before the commencement of the lease, less lease incentives received; \u2022 initial direct costs; and \u2022 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\u2019s 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\u2019s 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\u2019s option to terminate the lease is included in the lease term if it is reasonably certain that such option will not be exercised. |
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. |
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 | \u2013 | -1 | -1 | -2 |
Business disposals | \u2013 | -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 | \u2013 | -55 | -15 | -70 |
Translation differences | \u2013 | -2 | \u2013 | -2 |
Business disposals | \u2013 | 5 | 1 | 5 |
Accumulated depreciation for derecognized contracts | \u2013 | 12 | 8 | 21 |
Depreciation charges for the year | \u2013 | -29 | -8 | -38 |
Other changes | \u2013 | \u2013 | \u2013 | \u2013 |
Accumulated depreciation at end of year | \u2013 | -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 | \u2013 | 155 | 26 | 181 |
Translation differences | \u2013 | 3 | \u2013 | 3 |
Business disposals | \u2013 | \u2013 | \u2013 | \u2013 |
Additions | \u2013 | 29 | 9 | 38 |
Derecognition | \u2013 | -15 | -6 | -21 |
Other changes | 1 | \u2013 | \u2013 | 2 |
Acquisition cost at end of year | 1 | 171 | 29 | 202 |
Accumulated depreciation at beginning of year | \u2013 | -33 | -12 | -45 |
Translation differences | \u2013 | -1 | \u2013 | -1 |
Business disposals | \u2013 | \u2013 | \u2013 | \u2013 |
Accumulated depreciation for derecognized contracts | \u2013 | 7 | 6 | 13 |
Depreciation charges for the year | \u2013 | -29 | -9 | -38 |
Other changes | \u2013 | \u2013 | \u2013 | \u2013 |
Accumulated depreciation at end of year | \u2013 | -55 | -15 | -70 |
Classification as held for sale | \u2013 | -3 | -1 | -4 |
Business disposals, discontinued operations | \u2013 | \u2013 | 0 | 0 |
Net book value at end of year | 1 | 113 | 13 | 127 |
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 |
EUR million | 2022 | 2021 |
Cost of goods sold | -86 | -84 |
Selling, general and administrative expenses | -69 | -78 |
Total | -156 | -161 |
EUR million | 2022 | 2021 |
Effects in | ||
Income statement | +/-3.2 | +/-1.3 |
Equity | +/-0.0 | +/-0.0 |
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 | \u2013 | 68 | \u2013 | \u2013 | 24 | \u2013 |
Financial assets at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 21 | \u2013 | \u2013 | 24 | \u2013 |
Total | \u2013 | 88 | \u2013 | \u2013 | 48 | \u2013 |
Liabilities | ||||||
Financial liabilities at fair value through profit and loss | ||||||
Derivatives not under hedge accounting | \u2013 | 29 | \u2013 | \u2013 | 29 | \u2013 |
Financial liabilities at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 51 | \u2013 | \u2013 | 29 | \u2013 |
Total | \u2013 | 80 | \u2013 | \u2013 | 58 | \u2013 |
Dec 31, 2022 | Dec 31, 2021 | |||||
EUR million | <1 year | 1\u20135 years | > 5 years | <1 year | 1\u20135 years | > 5 years |
Long-term debt | ||||||
Repayments | \u2013 | 700 | 336 | 150 | 334 | 293 |
Interests | \u2013 | 99 | 6 | 9 | 19 | 3 |
Other liabilities | \u2013 | \u2013 | \u2013 | \u2013 | 2 | \u2013 |
Short-term debt | ||||||
Repayments | 176 | \u2013 | \u2013 | 42 | \u2013 | \u2013 |
Interests | 33 | \u2013 | \u2013 | \u2013 | \u2013 | \u2013 |
Trade payables | 772 | \u2013 | \u2013 | 692 | \u2013 | \u2013 |
Other liabilities | \u2013 | \u2013 | \u2013 | 16 | \u2013 | \u2013 |
Total | 981 | 799 | 342 | 909 | 355 | 296 |
EUR million | 2022 | 2021 |
Effects in | ||
Income statement | +/-3.2 | +/-1.3 |
Equity | +/-0.0 | +/-0.0 |
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 | \u2013 | 68 | \u2013 | \u2013 | 24 | \u2013 |
Financial assets at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 21 | \u2013 | \u2013 | 24 | \u2013 |
Total | \u2013 | 88 | \u2013 | \u2013 | 48 | \u2013 |
Liabilities | ||||||
Financial liabilities at fair value through profit and loss | ||||||
Derivatives not under hedge accounting | \u2013 | 29 | \u2013 | \u2013 | 29 | \u2013 |
Financial liabilities at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 51 | \u2013 | \u2013 | 29 | \u2013 |
Total | \u2013 | 80 | \u2013 | \u2013 | 58 | \u2013 |
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 | \u2013 | 68 | \u2013 | \u2013 | 24 | \u2013 |
Financial assets at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 21 | \u2013 | \u2013 | 24 | \u2013 |
Total | \u2013 | 88 | \u2013 | \u2013 | 48 | \u2013 |
Liabilities | ||||||
Financial liabilities at fair value through profit and loss | ||||||
Derivatives not under hedge accounting | \u2013 | 29 | \u2013 | \u2013 | 29 | \u2013 |
Financial liabilities at fair value through other comprehensive income | ||||||
Derivatives under hedge accounting | \u2013 | 51 | \u2013 | \u2013 | 29 | \u2013 |
Total | \u2013 | 80 | \u2013 | \u2013 | 58 | \u2013 |
Under IFRS 9, Metso Outotec classifies financial assets and liabilities in measurement categories according to contractual terms of the cash flows and Metso Outotec\u2019s 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.\u00a0 \u00a0 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.\u00a0 \u00a0 |
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.\u00a0 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. |
2022 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 2 | \u2013 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 5 | 5 | 5 |
Derivatives financial instruments | 3 | \u2013 | \u2013 | 3 | 3 |
Other receivables | \u2013 | \u2013 | 19 | 19 | 19 |
Total | 5 | \u2013 | 24 | 29 | 29 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 796 | 796 | 796 |
Trade receivables, for sale | \u2013 | 2 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 65 | 21 | \u2013 | 86 | 86 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 104 | 104 | 104 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 497 | 497 | 497 |
Total | 65 | 23 | 1,400 | 1,488 | 1,488 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 758 | 758 | 734 |
Loans from financial institutions | \u2013 | \u2013 | 240 | 240 | 240 |
Lease liabilities | \u2013 | \u2013 | 87 | 87 | 87 |
Derivatives financial instruments | \u2013 | 33 | \u2013 | 33 | 33 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | \u2013 | 33 | 1,088 | 1,121 | 1,097 |
Current liabilities | |||||
Loans from financial institutions | \u2013 | \u2013 | 96 | 96 | 96 |
Commercial papers | \u2013 | \u2013 | 80 | 80 | 80 |
Lease liabilities | \u2013 | \u2013 | 31 | 31 | 31 |
Trade payables | \u2013 | \u2013 | 787 | 787 | 787 |
Derivatives financial instruments | 29 | 18 | \u2013 | 47 | 47 |
Total | 29 | 18 | 994 | 1,040 | 1,040 |
2021 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 4 | \u2013 | \u2013 | 4 | 4 |
Loan receivables | \u2013 | \u2013 | 6 | 6 | 6 |
Derivatives financial instruments | \u2013 | 2 | \u2013 | 2 | 2 |
Other receivables | \u2013 | \u2013 | 20 | 20 | 20 |
Total | 4 | 2 | 26 | 31 | 31 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 665 | 665 | 665 |
Trade receivables, for sale | \u2013 | 3 | \u2013 | 3 | 3 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 24 | 22 | \u2013 | 46 | 46 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 81 | 81 | 81 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 393 | 393 | 393 |
Total | 24 | 25 | 1,141 | 1,190 | 1,190 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 587 | 587 | 597 |
Loans from financial institutions | \u2013 | \u2013 | 40 | 40 | 40 |
Lease liabilities | \u2013 | \u2013 | 104 | 104 | 104 |
Derivatives financial instruments | 1 | 5 | \u2013 | 6 | 6 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | 1 | 5 | 732 | 738 | 749 |
Current liabilities | |||||
Current portion of non-current debt | \u2013 | \u2013 | 150 | 150 | 151 |
Loans from financial institutions | \u2013 | \u2013 | 42 | 42 | 42 |
Lease liabilities | \u2013 | \u2013 | 30 | 30 | 30 |
Trade payables | \u2013 | \u2013 | 692 | 692 | 692 |
Derivatives financial instruments | 28 | 24 | \u2013 | 52 | 52 |
Total | 28 | 24 | 914 | 966 | 967 |
Under IFRS 9, Metso Outotec classifies financial assets and liabilities in measurement categories according to contractual terms of the cash flows and Metso Outotec\u2019s 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.\u00a0 \u00a0 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.\u00a0 \u00a0 |
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.\u00a0 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. |
Under IFRS 9, Metso Outotec classifies financial assets and liabilities in measurement categories according to contractual terms of the cash flows and Metso Outotec\u2019s 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.\u00a0 \u00a0 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.\u00a0 \u00a0 |
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.\u00a0 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. |
Under IFRS 9, Metso Outotec classifies financial assets and liabilities in measurement categories according to contractual terms of the cash flows and Metso Outotec\u2019s 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.\u00a0 \u00a0 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.\u00a0 \u00a0 |
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.\u00a0 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. |
2022 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 2 | \u2013 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 5 | 5 | 5 |
Derivatives financial instruments | 3 | \u2013 | \u2013 | 3 | 3 |
Other receivables | \u2013 | \u2013 | 19 | 19 | 19 |
Total | 5 | \u2013 | 24 | 29 | 29 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 796 | 796 | 796 |
Trade receivables, for sale | \u2013 | 2 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 65 | 21 | \u2013 | 86 | 86 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 104 | 104 | 104 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 497 | 497 | 497 |
Total | 65 | 23 | 1,400 | 1,488 | 1,488 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 758 | 758 | 734 |
Loans from financial institutions | \u2013 | \u2013 | 240 | 240 | 240 |
Lease liabilities | \u2013 | \u2013 | 87 | 87 | 87 |
Derivatives financial instruments | \u2013 | 33 | \u2013 | 33 | 33 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | \u2013 | 33 | 1,088 | 1,121 | 1,097 |
Current liabilities | |||||
Loans from financial institutions | \u2013 | \u2013 | 96 | 96 | 96 |
Commercial papers | \u2013 | \u2013 | 80 | 80 | 80 |
Lease liabilities | \u2013 | \u2013 | 31 | 31 | 31 |
Trade payables | \u2013 | \u2013 | 787 | 787 | 787 |
Derivatives financial instruments | 29 | 18 | \u2013 | 47 | 47 |
Total | 29 | 18 | 994 | 1,040 | 1,040 |
2021 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 4 | \u2013 | \u2013 | 4 | 4 |
Loan receivables | \u2013 | \u2013 | 6 | 6 | 6 |
Derivatives financial instruments | \u2013 | 2 | \u2013 | 2 | 2 |
Other receivables | \u2013 | \u2013 | 20 | 20 | 20 |
Total | 4 | 2 | 26 | 31 | 31 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 665 | 665 | 665 |
Trade receivables, for sale | \u2013 | 3 | \u2013 | 3 | 3 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 24 | 22 | \u2013 | 46 | 46 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 81 | 81 | 81 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 393 | 393 | 393 |
Total | 24 | 25 | 1,141 | 1,190 | 1,190 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 587 | 587 | 597 |
Loans from financial institutions | \u2013 | \u2013 | 40 | 40 | 40 |
Lease liabilities | \u2013 | \u2013 | 104 | 104 | 104 |
Derivatives financial instruments | 1 | 5 | \u2013 | 6 | 6 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | 1 | 5 | 732 | 738 | 749 |
Current liabilities | |||||
Current portion of non-current debt | \u2013 | \u2013 | 150 | 150 | 151 |
Loans from financial institutions | \u2013 | \u2013 | 42 | 42 | 42 |
Lease liabilities | \u2013 | \u2013 | 30 | 30 | 30 |
Trade payables | \u2013 | \u2013 | 692 | 692 | 692 |
Derivatives financial instruments | 28 | 24 | \u2013 | 52 | 52 |
Total | 28 | 24 | 914 | 966 | 967 |
2022 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 2 | \u2013 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 5 | 5 | 5 |
Derivatives financial instruments | 3 | \u2013 | \u2013 | 3 | 3 |
Other receivables | \u2013 | \u2013 | 19 | 19 | 19 |
Total | 5 | \u2013 | 24 | 29 | 29 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 796 | 796 | 796 |
Trade receivables, for sale | \u2013 | 2 | \u2013 | 2 | 2 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 65 | 21 | \u2013 | 86 | 86 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 104 | 104 | 104 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 497 | 497 | 497 |
Total | 65 | 23 | 1,400 | 1,488 | 1,488 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 758 | 758 | 734 |
Loans from financial institutions | \u2013 | \u2013 | 240 | 240 | 240 |
Lease liabilities | \u2013 | \u2013 | 87 | 87 | 87 |
Derivatives financial instruments | \u2013 | 33 | \u2013 | 33 | 33 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | \u2013 | 33 | 1,088 | 1,121 | 1,097 |
Current liabilities | |||||
Loans from financial institutions | \u2013 | \u2013 | 96 | 96 | 96 |
Commercial papers | \u2013 | \u2013 | 80 | 80 | 80 |
Lease liabilities | \u2013 | \u2013 | 31 | 31 | 31 |
Trade payables | \u2013 | \u2013 | 787 | 787 | 787 |
Derivatives financial instruments | 29 | 18 | \u2013 | 47 | 47 |
Total | 29 | 18 | 994 | 1,040 | 1,040 |
2021 | At fair value through profit and loss | At fair value through other comprehensive income | At amortized cost | Carrying value | Fair value |
EUR million | |||||
Non-current financial assets | |||||
Equity investments | 4 | \u2013 | \u2013 | 4 | 4 |
Loan receivables | \u2013 | \u2013 | 6 | 6 | 6 |
Derivatives financial instruments | \u2013 | 2 | \u2013 | 2 | 2 |
Other receivables | \u2013 | \u2013 | 20 | 20 | 20 |
Total | 4 | 2 | 26 | 31 | 31 |
Current financial assets | |||||
Trade receivables | \u2013 | \u2013 | 665 | 665 | 665 |
Trade receivables, for sale | \u2013 | 3 | \u2013 | 3 | 3 |
Loan receivables | \u2013 | \u2013 | 3 | 3 | 3 |
Derivatives financial instruments | 24 | 22 | \u2013 | 46 | 46 |
Deposits and securities, maturity three months or less | \u2013 | \u2013 | 81 | 81 | 81 |
Cash on hand and in bank accounts | \u2013 | \u2013 | 393 | 393 | 393 |
Total | 24 | 25 | 1,141 | 1,190 | 1,190 |
Non-current liabilities | |||||
Bonds 1) | \u2013 | \u2013 | 587 | 587 | 597 |
Loans from financial institutions | \u2013 | \u2013 | 40 | 40 | 40 |
Lease liabilities | \u2013 | \u2013 | 104 | 104 | 104 |
Derivatives financial instruments | 1 | 5 | \u2013 | 6 | 6 |
Other liabilities | \u2013 | \u2013 | 2 | 2 | 2 |
Total | 1 | 5 | 732 | 738 | 749 |
Current liabilities | |||||
Current portion of non-current debt | \u2013 | \u2013 | 150 | 150 | 151 |
Loans from financial institutions | \u2013 | \u2013 | 42 | 42 | 42 |
Lease liabilities | \u2013 | \u2013 | 30 | 30 | 30 |
Trade payables | \u2013 | \u2013 | 692 | 692 | 692 |
Derivatives financial instruments | 28 | 24 | \u2013 | 52 | 52 |
Total | 28 | 24 | 914 | 966 | 967 |
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.\u00a0 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 |
% | 2022 | 2021 |
With maturity three months or less | 4.16% | 3.59% |
\u00a0 | 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 | \u2013 |
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 |
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 | \u2013 | -27 | \u2013 | \u2013 | \u2013 | -27 |
Transferred to profit and loss, net of tax | ||||||
Sales | \u2013 | 3 | \u2013 | \u2013 | \u2013 | 3 |
Cost of goods sold / Administrative expenses | \u2013 | 27 | \u2013 | \u2013 | \u2013 | 27 |
Instruments at fair value and share-based rewards | ||||||
Transferred to profit and loss, net of tax | \u2013 | \u2013 | -1 | \u2013 | \u2013 | -1 |
Redemption of own shares | -25 | \u2013 | \u2013 | \u2013 | \u2013 | -25 |
Share-based payments, net of tax | 6 | \u2013 | 10 | \u2013 | \u2013 | 16 |
Other | \u2013 | \u2013 | \u2013 | 0 | -1 | -1 |
December 31, 2022 | -28 | -1 | 18 | 0 | 1,133 | 1,122 |
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 | \u2013 | -8 | \u2013 | \u2013 | \u2013 | -8 |
Transferred to profit and loss, net of tax | ||||||
Sales | \u2013 | -10 | \u2013 | \u2013 | \u2013 | -10 |
Cost of goods sold / Administrative expenses | \u2013 | 5 | \u2013 | \u2013 | \u2013 | 5 |
Share-based payments, net of tax | 0 | \u2013 | 7 | \u2013 | \u2013 | 7 |
December 31, 2021 | -9 | -4 | 9 | 0 | 1,134 | 1,130 |
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 |
\u00a0 | 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 | \u2013 |
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 |
\u00a0 | 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 | \u2013 |
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 |
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 | \u2013 | -27 | \u2013 | \u2013 | \u2013 | -27 |
Transferred to profit and loss, net of tax | ||||||
Sales | \u2013 | 3 | \u2013 | \u2013 | \u2013 | 3 |
Cost of goods sold / Administrative expenses | \u2013 | 27 | \u2013 | \u2013 | \u2013 | 27 |
Instruments at fair value and share-based rewards | ||||||
Transferred to profit and loss, net of tax | \u2013 | \u2013 | -1 | \u2013 | \u2013 | -1 |
Redemption of own shares | -25 | \u2013 | \u2013 | \u2013 | \u2013 | -25 |
Share-based payments, net of tax | 6 | \u2013 | 10 | \u2013 | \u2013 | 16 |
Other | \u2013 | \u2013 | \u2013 | 0 | -1 | -1 |
December 31, 2022 | -28 | -1 | 18 | 0 | 1,133 | 1,122 |
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 | \u2013 | -8 | \u2013 | \u2013 | \u2013 | -8 |
Transferred to profit and loss, net of tax | ||||||
Sales | \u2013 | -10 | \u2013 | \u2013 | \u2013 | -10 |
Cost of goods sold / Administrative expenses | \u2013 | 5 | \u2013 | \u2013 | \u2013 | 5 |
Share-based payments, net of tax | 0 | \u2013 | 7 | \u2013 | \u2013 | 7 |
December 31, 2021 | -9 | -4 | 9 | 0 | 1,134 | 1,130 |
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 |
2022 | 2021 | |||
EUR million | Carrying values | Fair values | Carrying values | Fair values |
Long-term interest-bearing debt | ||||
\u00a0 Bonds | 758 | 734 | 587 | 597 |
\u00a0 Loans from financial institutions | 240 | 240 | 40 | 40 |
\u00a0 Other long-term debt | 0 | \u2013 | \u2013 | \u2013 |
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 | ||||
\u00a0 Bonds, current portion | \u2013 | \u2013 | 100 | 101 |
\u00a0 Loans from financial institutions, current portion | \u2013 | \u2013 | 50 | 50 |
\u00a0 Loans from financial institutions | 96 | 96 | 42 | 42 |
\u00a0 Commercial papers | 80 | 80 | \u2013 | \u2013 |
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 |
2021 | ||||
EUR million | Borrowings | Repayments 2) | Interests | Lease liabilities 1) |
2022 | 202 | 192 | 10 | 33 |
2023 | 5 | \u2013 | 5 | 27 |
2024 | 305 | 300 | 5 | 21 |
2025 | 43 | 40 | 3 | 16 |
2026 | 3 | \u2013 | 3 | 12 |
Later | 305 | 300 | 5 | 40 |
Total | 863 | 832 | 31 | 148 |
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 |
2021 | Other non- cash movements | ||||||
EUR million | Balance at beginning of year | Cash flows | Disposals | Translation differences | Classification as held for sale | Balance at end of year | |
Borrowings, non- current | 1,129 | -350 | -1 | \u2013 | -2 | \u2013 | 777 |
Lease liabilities | 138 | -38 | 0 | 2 | 31 | \u2013 | 133 |
Borrowings, current | 77 | -37 | \u2013 | 2 | \u2013 | \u2013 | 42 |
Loan receivables | -8 | 1 | \u2013 | -1 | 0 | \u2013 | -9 |
Liquid funds | -537 | 81 | -2 | -14 | \u2013 | 0 | -473 |
Net interest-bearing liabilities | 799 | -344 | -3 | -11 | 29 | 0 | 470 |
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 |
EUR million | 2022 | 2021 |
Guarantees | ||
External guarantees given by parent and group companies | 1,546 | 1,575 |
Other commitments | ||
Repurchase commitments | \u2013 | 0 |
Other contingencies | 1 | 1 |
Total | 1,547 | 1,577 |
EUR million | 2022 | 2021 |
Guarantees | ||
External guarantees given by parent and group companies | 1,546 | 1,575 |
Other commitments | ||
Repurchase commitments | \u2013 | 0 |
Other contingencies | 1 | 1 |
Total | 1,547 | 1,577 |
EUR million | 2022 | 2021 |
Guarantees | ||
External guarantees given by parent and group companies | 1,546 | 1,575 |
Other commitments | ||
Repurchase commitments | \u2013 | 0 |
Other contingencies | 1 | 1 |
Total | 1,547 | 1,577 |
EUR million | 2022 | 2021 |
Guarantees | ||
External guarantees given by parent and group companies | 1,546 | 1,575 |
Other commitments | ||
Repurchase commitments | \u2013 | 0 |
Other contingencies | 1 | 1 |
Total | 1,547 | 1,577 |
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. |
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. |
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 |
2022 | 2021 | |||
EUR million | Assets | Liabilities | Assets | Liabilities |
Interest rate swaps - fair value hedges | \u2013 | 33 | 2 | 5 |
Interest rate swaps - non-qualifying hedges | 3 | \u2013 | \u2013 | 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 |
December 31, 2022 | |||||
EUR million | 2023 | 2024 | 2025 | 2026 | 2027 and later |
Forward exchange contracts | 3,472 | 68 | \u2013 | \u2013 | \u2013 |
Interest rate swaps | \u2013 | 100 | \u2013 | \u2013 | 325 |
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 |
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 \u2013 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. |
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 Ind\u00fastria e Com\u00e9rcio 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% |
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 Per\u00fa 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 S\u00f6ner | 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% |
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\u2019s 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\u2019s 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. |
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 O\u00fc | 40.0% | 1 | 40.0% | 1 |
Sidvin Outotec Engineering Private Ltd | 25.1% | 0 | 25.1% | 0 |
Total | 6 | 7 |
EUR million | 2022 | 2021 |
Investments in associated companies and joint ventures | ||
Acquisition cost as of January 1 | 10 | 11 |
Divestments | \u2013 | -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 |
EUR million | 2022 | 2021 |
Assets | 8 | 9 |
Liabilities | 1 | 2 |
Sales | 6 | 4 |
Profit | -1 | -1 |
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 O\u00fc | 40.0% | 1 | 40.0% | 1 |
Sidvin Outotec Engineering Private Ltd | 25.1% | 0 | 25.1% | 0 |
Total | 6 | 7 |
EUR million | 2022 | 2021 |
Investments in associated companies and joint ventures | ||
Acquisition cost as of January 1 | 10 | 11 |
Divestments | \u2013 | -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 |
EUR million | 2022 | 2021 |
Assets | 8 | 9 |
Liabilities | 1 | 2 |
Sales | 6 | 4 |
Profit | -1 | -1 |
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\u2019s 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\u2019s 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. |
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\u2019s 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\u2019s 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. |
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 O\u00fc | 40.0% | 1 | 40.0% | 1 |
Sidvin Outotec Engineering Private Ltd | 25.1% | 0 | 25.1% | 0 |
Total | 6 | 7 |
EUR million | 2022 | 2021 |
Investments in associated companies and joint ventures | ||
Acquisition cost as of January 1 | 10 | 11 |
Divestments | \u2013 | -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 |
EUR million | 2022 | 2021 |
Assets | 8 | 9 |
Liabilities | 1 | 2 |
Sales | 6 | 4 |
Profit | -1 | -1 |
EUR million | 2022 | 2021 |
Investments in associated companies and joint ventures | ||
Acquisition cost as of January 1 | 10 | 11 |
Divestments | \u2013 | -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 |
EUR million | 2022 | 2021 |
Assets | 8 | 9 |
Liabilities | 1 | 2 |
Sales | 6 | 4 |
Profit | -1 | -1 |
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 |
EUR million | Total 2022 |
Cash consideration paid | -21 |
Cash and cash equivalents acquired | 0 |
Net cash flow for the year | -21 |
Contingent consideration | \u2013 |
Cash considerations, total | -21 |
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 |
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 \u2013 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. |
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 |
EUR million | 2022 | 2021 |
Non-current assets | \u2013 | 19 |
Inventories | \u2013 | 25 |
Trade and other receivables | \u2013 | 21 |
Cash and cash equivalents | \u2013 | 0 |
Total assets | \u2013 | 65 |
Non-current liabilities | \u2013 | 0 |
Current liabilities | \u2013 | 34 |
Total liabilities | \u2013 | 34 |
EUR million | 2022 | 2021 |
Goodwill | \u2013 | 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 |
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 |
EUR million | 2022 | 2021 |
Non-current assets | \u2013 | 19 |
Inventories | \u2013 | 25 |
Trade and other receivables | \u2013 | 21 |
Cash and cash equivalents | \u2013 | 0 |
Total assets | \u2013 | 65 |
Non-current liabilities | \u2013 | 0 |
Current liabilities | \u2013 | 34 |
Total liabilities | \u2013 | 34 |
EUR million | 2022 | 2021 |
Goodwill | \u2013 | 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 |
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 |
EUR million | 2022 | 2021 |
Non-current assets | \u2013 | 19 |
Inventories | \u2013 | 25 |
Trade and other receivables | \u2013 | 21 |
Cash and cash equivalents | \u2013 | 0 |
Total assets | \u2013 | 65 |
Non-current liabilities | \u2013 | 0 |
Current liabilities | \u2013 | 34 |
Total liabilities | \u2013 | 34 |
EUR million | 2022 | 2021 |
Goodwill | \u2013 | 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 |
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 |
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 |