Metso Corporation Unsponsored ADR

Rita Uotila - Investor Relations Markku Teräsvasara - President and Chief Executive Officer Jari Ålgars - Chief Financial Office

Alexander Virgo - Bank of America Merrill Lynch Antti Suttelin - Danske Bank Jonathan Hanks - Goldman Sachs Erkki Vesola - Inderes Magnus Kruber - UBS Andrew Wilson - JP Morgan Manu Rimpelä - Nordea Pia Rosqvist-Heinsalmi - SEB Olof Cederholm - ABG Sundal Collier Manu Rimpelä - Nordea

Welcome to Outotec's Q3 briefing. Welcome also Facebook viewers and listeners online.

We will first hear a presentation from our CEO, Markku Teräsvasara; and CFO, Jari Ålgars, followed by a Q&A session. So please, Markku, go ahead.

Thank you, Rita, and good afternoon from my side as well. And this is for the January-September results release.

I know that many of you are very interested about the newest that was released last week, and we will, of course, come to that later, towards the end of this presentation. And I'm happy to tell you and share with you all the possible information that we can tell, and is available at the moment.

But first, about our Q3 result. I think what can be said is that there were improvement programs and activities that start to pay off.

Well, we have improvement in all the major areas when it comes to order intake, when it comes to sales, profitability, and also good to have a solid cash flow as well. When it comes to market, specifically, as I mentioned, the improvements in order intake and sales is basically solid throughout the business.

So we have a good improvement in memory segment, mineral processing segment, in Metals, Energy & Water Segment, and as well as in service. Market is still very much dominated by the brownfield investments.

So we talk about appraise and modernization before connecting the incremental CapEx increases and so on. And of course, services.

Yet, there is not much greenfield investment encouragement. When it comes to Metals and regions, we see that there is a good activity in most of the Metals and in most of the regions, and also growth opportunities both for CapEx and service.

However, this uncertainty and the lower metal prices are causing hesitation at our customers so bigger investments are progressing slowly. Programs and projects are there, but the systems are progressing slowly.

Maybe as a new opportunity, we have not received so many orders in our energy business during the past couple of years. However, as you remember, in the previous quarter, we received a biomass energy project, and there is a number of cases in the pipeline.

So from an energy point of view, there is of course, opportunities on waste-to-energy side, specifically for those in continuation with service we need to take good care of. This is the standard chart that we are showing on the upper left corner, we have mineral processing segment.

So the CapEx and service combined, and it continues good development that we have had since second half of 2016 and reference it with what we have during the so-called boom years, when there was a lot of [indiscernible] that's up and running. We are already almost at the same level, and this is predominantly coming from brownfields and service opportunity.

When it comes to Metals, Energy & Water, we have said that 2017 was the turning points, the pocket year. There we have also some order intake improving, but of course, in this area, particularly in some of the segments, we like to have more orders.

For service, there is good development in order intake and that is particularly true in Mineral Processing site when it comes to sales, with the gray colored line there, we have indicated before that we have had some supply chain concerns until we get the orders, going into order backlog but had not been able to deliver them as quick as we hoped. We have put a lot of effort on that together with our suppliers just to improve the situation and towards the end of the quarter 3, we see a clear improvement.

And then also what we see going forward that the supply situation, finally, that's improving for us. When it comes to service order intake, with maybe the column for the order intake for the quarter was low, but if you look at the recurring type of our service revenue, when it comes to spare parts, wear parts, and technical services, it remained on a very healthy level, with the only thing that fluctuates between the quarters is how much bigger modifications and shut down projects we have.

And this is particularly true in Metals, Energy & Water business, which is -- where those businesses are -- have a bigger portion. During quarter three, one order which was bigger than €10 million, it came from South America, and it is related to the [indiscernible] the closest technology, I mean, our process technology from a big international customer.

And that was, of course, very good. And quarter-on-quarter, we already [indiscernible].

CapEx, a good improvement. Service, a little bit timing issue between this, particularly obviously in bigger modifications in MEW side and shutdown services.

And now key finances from Jari Ålgars.

Thank you, Markku. So as Markku already pointed out, the numbers improved.

Our levels did improve productive this part [indiscernible] we can see that the sales for the quarter increased to €320 million, when it was €274 million a year ago EBIT for the first three quarters, the sales was €939 million, compared to €803 million a year ago, which is a change of 17%. On Service sales side, again, on the quarter, the sales was €121 million, when it was €125 million a year ago.

And then, €333 million, then it was €324 million a year ago -- or sorry, €333 million, then it was €334 million a year ago and where EBIT was 12%. And as Markku pointed out, we had both in modernizations and upgrades, as well as shutdown services in Metals, Energy & Water side, we have a reduction.

So this is the main impact, where the first number are lower. But then also, we have other impacts below the supply chain.

Share of service thereby went down to 38% of the sales when it was 46% a year ago, and for the first three quarters, 36%, then it was 42% a year ago. When we look at the gross margin, it was 23%, then it was 24% a year ago for the quarter, but for the first three quarters, it's on the same level, 23%.

Adjusted EBIT thereby improved, jumped 14 million for the third quarter a year ago to 18 million now, or some 5% to 6%. And for the first three quarters, the result has more than doubled from 15 million to 33 million, all from 2% to 4%.

If you then look at the cost below the adjusted EBIT, we have restructuring costs of 10 million for the first three quarters, and we did not have any a year ago. The amortizations have come down slightly, from 6 million to 5 million, and thereby our EBIT is 18 million compared to 10 million a year ago for the first three quarters.

And the percentage is 2% compared to 1% a year ago. And the result for the period is 7 million, when it was 1 million a year ago.

The result was affected a year ago by exchange rate impact 9 million when this year it's flat zero. If we look at direct impacts on the adjusted EBIT compared to a year ago, the adjusted EBIT was 15 million a year ago.

We, obviously, have a higher volume now, which has increased, improved the results, but we still have challenges with gross margin erosion and some high-impact projects. And then, also the sales mix, mainly due that we had lower relative service share has also impacted the results.

The fixed cost, we have continued to keep in touch, and thereby, we have our result improvement come down, sending up to the 33 million what we saw on the previous page. If we then go into the different businesses, with the segments, we have minerals processing, which have had quite a nice improvement.

Order intake has increased by 10% from 487 million to 585 million and the sales have increased by 16% from 467 million to 540 million. And the service sales has increased from 9% from 214 million to 234 million, so very good numbers on all levels.

And the adjusted EBIT improved thereby from 41 million or 9% to 55 million and 10%. And again, here, we can see that we have exchange rate impact last year, same period, we had 6 million, when we have a flat zero this year.

If we again look at metal Synergy, what are their picture is a little bit different. Yes, we have strong order intake from -- with 19% from 351 million to 417 million, sales also same 19% from 336 million to 398 million, so we can clearly see we are on the improvement -- improving how volume is increasing.

And the service sales, we have challenges with big closers, was pointed out already. We have quite large modernizations and upgrades, and shutdown services a year ago.

Not this time, and this has impacted that the services is down by 18% for 120 million to 99 million this year. The adjusted EBIT has improved, but still is negative from minus 21 million to minus 17 million of -- from minus 6% to minus 4%.

The impact from the exchange rate was 3 million a year ago when it is flat now. So still our result in the Metals, Energy & Water segment is clearly negative.

Obviously, the biggest impact we have is on the provision increases or gross margin and under high-impact targets. This is the single biggest impact to the result.

If we go to the financial situation, it's stable, and we have a rather solid cash flow, which starts with the cash flow, the net cash from operating activities was 88 million. Last time, it was minus 7 million a year ago, so a very good cash flow.

Net interest-bearing debt has also improved from 37 million to minus 64 million now, driven by, obviously, the additional cash we got them, but also that we have lower debt interest-bearing debts. Gearing has thereby improved from 8% to minus 14%.

Equity-to-assets ratio is more or less the same, from 40% to 39%. If you go to the networking capital, which is the strongest driver of the cash, it's improved from 16 million to minus 65 million, hereby advanced on progress payments, we've also been able to collect receivables, and then we have higher payables.

Those are the 3 main drivers for the improved net working capital. And on the line below, you can see that the advances received have improved.

I leave over to Markku for outlook and guidance.

Thank you, Jari. The first thing is to give a quick update on our simplification program, it's ongoing.

As you remember from last time, we ran a simplification program in the company, with a main objective to improve efficiency in the company, internally, but also to our customer work that included two parts: one, was streamlining the organization, which was done and concluded to -- by the end of the second quarter and what we are working on now is to work with the selective processes to simplify them, and making sure that we can improve efficiencies in these processes. We also look at some nonprofitable operations that we decided to discontinue.

So just to refresh the targets, of this program of savings of roughly 25 million and a restructuring costs up to 12 million, of which 10 million will come this year. This program is progressing as planned.

Market outlook. We discussed that already briefly, but there is a good demand on the market.

And then, of course, what is challenging for the industry, but has been positive growth effect is that Metals, and particularly minerals, the rates are getting lower. There is a critical worker situation in many areas.

We have energy as a challenge, and of course, like you have high efficiency and productivity from the curve processes by automating them and increasing analytics and utilization. All that is good for Outotec because it's an area where we have been performing.

It will involve some new technologies, and of course, partly, that would make sure that the tailings have been placed and water recycled in a very efficient way. Good opportunities for Outotec.

Services, we have said it's still a good growth area for Outotec. There we have focused on 2 specific activities, where we do so-called asset works or audits, where we, together with our customer, we make an assessment on the process, on the process equipment, and based on that, make an improvement or modification plan.

Sometimes, only related to share reactivities to keep them up to the maximum availability and productivity. With that being very useful and very appreciated by our customers.

The other thing is, of course, the service experts or expertise, can make sure that our customers are running their plants and their equipment in the best possible way. And investing the capacity that is installed in those processes.

We talked about metals, Metal markets. Most of the metals are active, somewhat heavy facing, and this is in license because of the lower metal prices and uncertainties in the global economy.

But overall, the demand and supply picture is good from our point of view. And then, of course, as discussed this waste-to-energy and biomass opportunity is there.

A little bit in our coming business, [indiscernible] in many areas. There's batteries and related infrastructure, where we consume a lot of copper, lithium, cobalt and nickel, and these are also supporting Outotec business.

Copper has traditionally been about one third of our revenue, so whenever copper is doing well, it is good for Outotec, and also although there is rarely no lithium case in the world where we are not involved one way or the other, and that is also positive. If you remember, at the end of last year and this year, we announced a quite significant order in cobalt sales.

So we are clearly there and quite reasonably as well, and nickel. So I think the selective recycle provided the growth is continuous in a good way.

It's a positive thing all the way. Financial guidance.

Sales was reiterated, and it is between €1.2 billion and €1.3 billion, and adjusted EBIT finance was from 5% to 7%, to 5% to 6%. And this is excluding possible material cost, additional cost, related to the ilmenite projects, which will be soon, I'll talk about more.

And as discussed earlier, we have had this much since we had the program since the release of the newest adjective, about one year ago, and there has been a good development, and the growth then starts paying off, in terms of order intake result improvements and so on. If there's very good foundation and platform for further improvement.

There is still five areas. I'm not going to go through all the -- all the detail, things that has happened during -- during area -- during the quarter.

I just want to recap, as we will soon talk about this case in the ilmenite case, that one program -- this project, excellence, is very much focused and we're making sure that we have a good control over this investment on the projects. What we are doing, where we are doing, and how we are doing.

And then also, making sure that people that are working with the projects are trained in a sufficient manner. So a lot of efforts for the last two years has been put in place, a lot of 1 year has been put in place to make sure that we have a good project excellence in our company.

So now a little bit more about this ilmenite smelted project. I'm happy, and as I said, I'm happy to tell you everything that is possible to be told at this phase.

And perhaps, maybe, a bit about the project as such. The communication -- it is a growth exert ilmenite project that was sold 2012, including 2 large electric furnaces, and I think the discussion lately has been evolving a lot around these furnaces.

But of course, this product, a subsequent banks, are much more than just the current. Furnace is important part of the plan, but of course, there is a lot of other significant plans related to materials handling, of gas treatments.

Although, there is a water treatment plant, the iron treatment organized and select formulation. And of course, all the related infrastructure is built in the very remote location so the project included a lot of infrastructure that needed to be put in place.

So yes, a lot of discussion lately about furnaces. But we are just part of the total investments the customer was using.

We have dated that it's the first of its kind, and maybe that also requires more clarification. It is, for Outotec, the first of its kind, for ilmenite application, which means that we have delivered similar furnaces to other applications, about [indiscernible] before, and they are running well without any disturbances.

We are also, it is not the first electric furnace that has been delivered in ilmenite application. There is a number of cases around the world where ilmenite is treated in a similar way.

So even -- this is the first, if successful, of its kind, for Outotec in that particular application. But we have experienced of that -- the electric furnace design before, and of course, that is also used by other companies in the industry.

It's also we talked about large electric furnaces, but this is not the largest electric furnace that we have made of that part. We have made furnaces that are 50% free-working capacity, so also that being said in scale.

Of course, what happened then that the process was not starting as planned, and the furnace was shut down safely. So of course, safety is very important, so it was discontinued in a safe manner.

And what happens then now is that there will be a detailed investigation, together with our customer and also using the industry experts to first find out what happens as we don't know about that yet. And also then, consequently, who is responsible of that, if that can be identified here.

And then, if it's supposed to be the case or it is under Outotec's responsibility yet, then it would have a negative impact on our discussion within EBIT. One of the reasons for that is it's been identified and agreed and then furnace needs to be rebuilt and that rebuilt will take CapEx one year.

And of course, potential material cost to be booked in -- in quarter four that the cash flow impact will come later. What is important also that we have agreed with the customer that we continue the project together, and as I said, starts by identifying the root causes at this time, and then, agreeing on how to correctly proceed with the load.

So I think this is what I can say at this stage. But of course, at the question-and-answer session, we can try to answer whatever initial questions you might have, if we have an answer for that.

Thank you, Markku and Jari. Now it's time to close the Facebook Live.

Thank you for participating and we will move to the Q&A session. So operator, we can open the Q&A.

I guess, to ask the one question then. When you look at this smelter and the furnace, I think you rebuilt the furnace once already.

And I think you took a provision for that rebuild project I suppose, for €40 million. I wonder, could you just talk a little bit about how that was spent?

Whether you used the whole provision? And whether that's a fair number for us to think about for this one, if we take that as a worst case?

That 40 million was not related to the rebuild of the furnace, it was related to that project had challenges in the start of previous time and the project was prolonged, so it's for additional cost for being on the project. And then, there were also some potential customer receivables what we are provisioned for.

So this is -- this was not for that particular part.

So that's not a relevant benchmark?

No.

This is me, Antti from Danske. I would have two really, really important questions.

So if you would mind to answer them. How much is the value of the furnaces?

The two furnaces that you have at the plant, what is there? Should I come in as a client and want to buy these furnaces, how much would they cost?

I think our competitors would love to hear the number, but we are not able to disclose that.

But can you give me a percent of the total value? We all know what project this is.

We know the project value. Can you indicate what share of the total value are the furnaces?

No, I cannot indicate further than what I already mentioned. I think, one, is a part of the bigger plant.

There is a lot of other expensive components and process equipment included as well. And not to forget that the infrastructure, and we built something in a very remote location that comes with the course.

Can the furnaces be more than 50% of the total value?

We do not comment at that at this moment.

Then, my second question. Is there any risk of both of them having decompensate lost production?

It has been three years now idle plant. Is there any such risk?

We have, as a policy, that we do not accept consequential damages in our contract.

So you would say it's basically only that you repair it. Nothing additional can be expected as a cost for Outotec?

I think, obviously, we said that there might be some technical things. There might be some redesigning more, but to be bare and redesign.

These are the main things we are talking about here.

Maybe I -- it sounds like we're not going to maybe get a number on the furnace impact, but maybe just asked more broadly. I just want to know how much further cost cutting do you think you can do in Metals, Energy & Water?

And is it feasible that this division has kind of acceptable margins if volumes don't improve?

I think what must be discussed in a number of occasions before. Of course, we do think and also work towards the situation that all our businesses are profitable.

So we are prepared to do what is required in Metals, Energy & Water case as well. But however, we have also said that we see that the demand situation for Metals, Energy & Water segments are improving, and we are expecting to get further orders.

And orders are expected to come in early as well. We had a lower work load, so we are continuously balancing this and the situation as we see.

So no cost cutting can be excluded, but it is something that you has to -- continues to the Board if you want to do.

And just very quickly, can you help us in terms of thinking when the gross margin pressure, which is presumably in that business, will kind of trough if you like?

I think that, of course, that is not only depending on what we do on the market. But again, coming back to this initiative that we have started in our company, the work on a product cost, product competitiveness and project excellence, they will have a positive -- or they have, and they will have, a positive impact on margin.

Regarding the Sandvik [Outotec] projects, how do you assess the reputational risk regarding the project? If you see any?

And obviously, the risks to your future order intake in the guidance in the projects?

What we see and hear at the moment, we do not see additional risks affecting the rest of the business in that sense.

Not at all?

No, that is our belief.

Magnus from UBS here. On this project, again, do you have a project professional indemnity insurance on this project?

And was that utilized the last time you went through the trouble with the two verticals and is that insurance in that case still valid?

We do not disclose individual insurance policies we have on the project and who has arranged it. So we can only say that only we have insurance, this is normal part of our business.

Apologies, I guess another question regarding this shutdown problem. Just so I'm clear and might be modeled in the front end but is there any change to provisions required for anything else on this project as a result of the issue with the furnaces?

So i.e. would we expect anything additional to the furnaces and it would need to be provided to us as a result of the problems?

Yes. Generally, obviously, the delay time always costs money so that would have an impact obviously as well on top of that.

And obviously, depending on the end result and our policy obviously, also the customer might want to discuss some price issues but these are just speculations at this point obviously. So the main thing we are focusing on at the moment, what is the problem and what are the things we need to do in order to fix the problem.

And maybe I could expand that a little bit. Of course, now there are -- the shut downs and the issues that we are facing relating with the furnace.

So the rest of the plan has been working in a normal way.

It's Manu Rimpelä from Nordea Markets here. Could you talk a bit about how do you see the Metals, Energy & Water division and especially this metal space as in the kind of longer run.

I think you've done almost €100 million of cost over-runs so far since 2012. Without including the latest one, we're looking at the average annual EBIT, including all of these costs over-runs as something like below €20 million and then let's see what the last one ends up being.

So it this really a business that makes sense to have given the big risk that you are taking in this project. Would it not, maybe after this, make sense to kind of close it down or license it outside of Outotec.

How do you think about the kind of future of this business in the light of the latest adversaries?

I think if you look back on the history of the company, this technology has been an important part of Outotec for many, many years and delivering good results and good profits. And for the last couple of years because of this cyclicality nature and lack of investments have been done.

Of course, as mentioned earlier, we have to continuously monitor our businesses and what we -- in so many cases during the [indiscernible] causes but the expectation is that overall businesses are profitable.

But you don't see a risk that your customers are starting to question your viability in this area and also kind of your balance sheet. I guess you -- they have -- this big project that they have given you big prepayments on, are you seeing any risk for that?

I did not -- if I understood the question is [indiscernible] and I'm [indiscernible] done but at least to have a [indiscernible] performing plant and a process. And in that respect [indiscernible] in many areas that we're involved in.

We are -- you have to remember, we are delivering lots of plants every year, which are quite successful and the customers are happy. And here we are talking about the number of high impact projects which have been there for a while, and we just have to make sure we don't get this going forever.

Maybe we'll move from Saudi for a second. I wonder if you could talk just a little bit about a service development because obviously, some of the momentum seems to leak out a little bit.

I just wondered if you could give us a little bit more color around that, maybe prognosis for the quarter? Obviously, your backlog for delivery in the rest of this year does underpin the guidance pretty well already, so just wondering what you can give us in terms of service momentum into the back-end of the year and into next year?

I think service momentum remains solid. We have had throughout the year, we have a good development in our order intake.

Consequently, we have been building up order backlog when it comes to spare parts and work parts in the service side. And now when we see that we get the deliveries improves and under control which we already was witnessing towards the end of the quarter three.

I think we have a good expectation for quarter four.

And just as a quick follow up if you mind me asking, the 330 of backlog for delivering in Q4, how much of that would actually be serviced?

We do not guide for that service.

And I'll take you back to Saudi Arabia. Did the issues you have there point to more widespread design flaw that might need to be addressed in the second furnace of this smelter as well or in other smelter projects complete?

Or even in the early delivery?

No, I think it's too early to answer the question. I think it's good to reflect back also what maybe -- why the question is coming from one -- these furnaces were shut down and rebuilt after the initial start-up during 2015 or '16, but at that time, it was due to operational issues.

And now we have -- after rebuilding it, we are starting up it again, and I think it's too early to say what are the root causes in this case.

Couple of questions on your covenants. You annual report suggests you've have gotten some adjusted equity and liquidity, how do you define those two metrics?

We have not guided for these. So they are just two metrics, and we are not guided for how they're calculated or how or what number they are.

And it would be useful to know but okay, and then away from Saudi Arabia...

Maybe to add to that, when we talk about financials are stable, it includes also that we improve.

Okay, got it. And the headwinds you had in [Indiscernible] provision talked about in this quarter, could you give us some color on that?

Besides...

Yes, the projects we mainly in [Indiscernible] Metals, Energy & Water side, and we talked about mid-single digits on the net effect.

Olof Cederholm from ABG. Just very quickly back on Saudi Arabia.

You say that this just the furnaces that are troublesome, the other things are working. But aren't the furnaces an integrated parts of the plant?

Can they still produce things in the plant, the only thing so far?

Of course, you need more oil depots and functions in the plant to work so that you can produce.

So wouldn't that mean that the risk sort of the monetary risk that you're running is broader than simply the furnace technology?

Yes, as already mentioned earlier is that our policy in contracts and agreements do not accept the consequential damages. And also what I mentioned previously that we have absolutely, after this incident had a meeting with customer where we agreed that we will work together -- continue to work together in this and the first objective is to find out what happened.

My follow-up question would be, if you guys just shed some more light on the way you think about your guidance for this year, I mean excluding any provisions? Do you still guiding for a very significant fourth quarter results even higher than you've done year-to-date so far, if you take the higher end of the range.

I was just curious to understand that where -- how do you kind of think around the metal synergy? What is the profitability?

Because I would imagine that, that is obviously the biggest single factor driving this [fee again.] If you look at the Q3 sales and profit of that division, it actually didn't really improve at all compared to what it did Q3 '17, even though you had 10 million of higher sales.

So why should we expect such a sudden jump in the fourth quarter, in the profitability of the work?

We have quite good order intake in the service side and sales has not being followed. This means that we have been building up quite a lot of backlog in the service side and quite many of those orders actually supposed to be delivered in Q4.

So we should see a improved rate of service [fare] and also out of that big part of it would be in spare parts. So that is one of the drivers -- one of the key drivers obviously.

Can you also comment on how do you see the services -- [provide color of] kind of pent-up backlog being -- do you see that the both divisions have that kind of a very strong services Q4 coming up? Or is it more in one part of the business, because we don't know how your services orders are split between the two divisions?

For spare parts, yes, it's for both quite significant. And on the Metals, Energy & Water side, we definitely would need more orders in that [factory] modernization as well as in the [shop] services.

Obviously, got - that could not be significant, say, adequate this year, but it could improve again in absorption on the [indiscernible] situation.

So you think that Metals, Energy & Water will reach breakeven in Q4 or positive results?

Disciplined. We do not quote for separate business segments.

I just have two follow-ups. One follow-up on Alex's question earlier on the development of the services business.

You mentioned large modernizations were down year-on-year and that contributes to the overall number. Am I right in thinking that these are just large pieces of service work, which inherently will be lumpy and therefore, that's not a comment on the market, that's just the timing of the individual orders?

On the Metals, Energy & Water side, yes, clearly there is a bigger impact on this on there. The last quarters, the growth was quite nice, and it contemplates the market development.

Maybe the service -- however service been somewhat impacted there as well on the delivery constraints, but in general, its developing well.

So that's not any change to sort of underlying market development? It's just the timing of certain orders.

Yes. In Metals, Energy & Water, there is big impact coming from modernization, [some of this] and shutdown service.

And maybe just follow up with one. Just on the more general comment you make around the kind of a mining activity in Ma'aden.

You actually said a couple of things which has impacted in terms of the performance of overall business and also some source of financing for small mines. I'm not sure if I -- this changed in terms of the specific wording from from Q2.

I mean, is that a change that you saw Q3 versus Q2 in terms of, I'm guessing it's kind of general macro uncertainty, having increased and not having an impact in terms of customer order patterns. Is that the right interpretation of the Q3 sort of market commentary?

I think it's, in a way, right. If I understood you right, you're on the right track.

We saw that hesitation from coming in 2003 regarding bigger projects. Not that these projects have disappeared.

They are there, but the system has been postponed because of this uncertainty and because of metal prices has come down somewhat.

Not sure if this was asked already but did you say how much did you book additional provisions in the third quarter?

The net impact of the provisions which were in the Metals, Energy & Water side was mid-single number.

And I mean, I think if you add that on top of what you've been talking so far, so we're running maybe something like 10 million to 15 million of issuance in the year-to-date figures. So how much more do you think that you will have to book excluding, again, this big project?

And what is it that is causing this? Because I guess you always mark-to-market is probably saying that it is what we expect the cost to be and then every quarter, you find out that it's going to cost you more.

Yes. I think we have permit that in -- with this handful of high impact cases, it's been a hard job to get -- to finalize and we have been surprised with the amount of cost that has been there.

It's been higher than we have initially expected.

And can you remind how many projects are we talking about? And how many -- and what the kind of completion timetable for them?

As we said earlier, in most of them, we were expecting they would be finalized by end of this year. They have -- the progress not been slow.

Thereby, also, you see cost increases because as I said, the longer we need to have people on site and the longer we need to work, it increases the cost. As such, the other ones are, obviously, significantly smaller in terms of this one that we are working it out today, even at plant.

So there is not more, I would say, normal but challenging, and we are going in the right direction. We believe we will be able to close them, but I think at this point learning from previous, maybe I should stop guiding when they are ready.

It should be sometime soon but it's been out.

I'm sorry, how many projects are we talking about?

Handful of projects. I think we have used this handful quite some time, and we also announced that one of them is closed.

So you can figure it out.

Again, just moving back to this start-up project. Again, and if we just took the value from the line related to the issue earlier today.

If you look at the pure repair cost and the cost it will take you to get these up and running, I think you mentioned the cost of €40 million was not a valid comparison. Could you sort of try to explain those in a little bit more in detail of how we should think about this -- for this repair?

What's related to equipment cost? What's related to man hours?

And sort of in any sense for this businesses?

As Mark already pointed out, I think the best way you do is we'll say that of this whole project is a CTC project. Also it includes was construction, which includes infrastructure, roads, buildings, groundworks, electrification et cetera, which you don't have to build a second time even if you redesign a -- redesigned something, then obviously we have a number of different codes of silence, which are roughly six in a month, yes.

The furnaces are a significant part of this project of the island but still there are other important process parts as well. And then based on the -- I think you can assume that redesigning, rebuilding then this is despite we don't know what this required.

This is -- this can be somehow assumed. As I said, there are many things affecting this.

So we still have the -- some way to go.

It's been early days, but of course, we will together with the customer build the best team going forward and use, of course, third-party expertise where needed and when needed. And I'm confident that we can, we're going to correct the issues…

You said that this is not the largest furnace you have delivered in the past. So what is the value of your largest furnace that you have delivered over time?

I think -- even if I had the number in my head, probably that would be confidential information for the same competition reason that I mentioned before.

Can any furnace cost more than €100 million?

I think we will decline to answer that. It would -- let's stick to what we have.

Thank you, operator, and thank you everyone for participating and asking Q&A and thank you for our presenters, Markku and Jari.