Metso Corporation Unsponsored ADR

Hi, everyone. It's Juha from Metso's Investor Relations, and I want to welcome you all to this conference call where we discuss our second quarter and half year 2025 results, which were published earlier this morning.

Our President and CEO, Sami Takaluoma and CFO, Pasi Kyckling will walk you through the results. And after that, we will have time for your questions.

During this call, we will be making forward-looking statements, and that's why we have the disclaimer in the first page of the presentation. And a reminder that this call will last approximately 60 minutes.

So please keep that in mind when asking your question so that we can accommodate as many questions and people as we can during this hour. With these remarks, I'll hand over to Sami.

Please go ahead.

Thank you, Juha, and welcome also from my behalf. Agenda is pretty much unchanged.

So we will continue with that one. First, about the results.

Second quarter of 2025 market activity in both of our segments. They were very much in line with our expectations.

And that also then resulted healthy order growth in a period. We were able to make a 6% growth in the order books in reporting currencies and noteworthy is that in constant currencies, that is representing 10% growth from the currencies, especially the U.S.

dollar does -- did have an impact on that direction in the second quarter. Then obviously, very low profitability compared to the previous quarters, and that is due to 2 things: temporary higher costs and they are very much linked for our ERP implementation in the Phase III which went live in the second quarter.

That represented 60% of the business inside the company. And as such, implementation has been a success, and we are happy to get the benefits of the new ERP in the coming quarters.

But the impact was that in order to ensure the success of this go-live, there was an additional costs tied in for the preparation work in a very close for the go-live work, and that caused this temporary cost for the second quarter. On top of that, in the second quarter, we had unfavorable sales mix.

So there was a decline in the services sales, so the capital versus aftermarket sales mix was unfavorable for the profitability point of view. And also inside the aftermarket, the mix was towards the less profitable services and products.

So these 2 things in the second quarter did cause that our profitability was not in line with the previous quarters and the levels that we have been delivering. Fourth element in the slide, the cash flow, we continue to deliver EUR 147 million was the cash flow from the second quarter.

It's more or less in line with the comparison period from '24, but then when looking at the Q1 and Q2 combined as a first half, so there's an improvement of double digit in the cash flow generation. From the key figures point of view, as a little bit already opened up.

So orders received was increasing by 6% constant currencies, double digit. Sales was flat compared to the '24 2nd quarter, 2% increase in the constant currencies.

And adjusted EBITA as mentioned, EUR 171 million, clearly below the normal levels due to those 2 temporary deliverables that happened in the second quarter. Earnings per share was now with these numbers, EUR 0.12 compared to EUR 0.16 a year ago.

And as I said, cash flow very close to the last year numbers, EUR 147 million compared to EUR 152 million a year before. Let's take a look at the segments.

Aggregates segment was having the order growth, EUR 331 million was booked orders now in the second quarter compared to EUR 314 million a year before. We have 2 strong areas, North America and Europe, and both of them did perform as expected during the period.

And we then also had acquisitions that we completed end of last year, supporting the order growth. Noteworthy here is that it was on the side of equipment orders.

Services was below last year, and that's coming mainly from the Europe where simply the utilization of the machines is clearly below previous years. And thus, the need for the services that this period was lower.

Sales was EUR 320 million compared to EUR 331 million a year before. Equipment, minus 1%, services minus 7%.

And with these numbers, the services share did decline to 31% of the total segment numbers. And in adjusted EBITA, EUR 45 million compared to the EUR 55 million.

So lower margin than we have been showing in the aggregate segment in the last 8 quarters. And the reasons here are the sales mix, as you can see.

And then also the higher costs that are coming both from the ERP work but also from the positive order intake for the capital side in the beginning of the year. And that means that we have been able to call back our employees from the temporary layoffs to manufacture the machines and the sales of this work will then come into Q3.

And then for the Minerals segment, where orders did grow from EUR 847 million to EUR 903 million. Similar way as in the Q1 of this year.

In the capital side, it comes mainly from the small equipment and small projects. and then the growth in the services orders.

Noteworthy here, again, that services growth is 5%. In constant currencies, it's a double-digit 10%.

From the commodities, copper and cold pipeline remains very strong, including the activity levels and the fastest ones moving in the pipeline, they are currently the gold customers with their projects and their needs. Sales for the segment minerals, EUR 892 million compared to EUR 883 million last year.

So growth there, which was coming mainly from the equipment side. Services did decline because of the lower order intake, especially at the end of 2024, which is now materializing then as a sales.

And that also created for this period that the services share of the sales declined 2 percent points to 64%. Adjusted EBITA EUR 143 million, EUR 9 million less than a year before, created a margin of 16%, which is also low and -- and here, the sales mix did have an impact for this period and also the higher temporary costs where ERP work was heavily on this side of the segment.

And then I give microphone to Pasi to go a little bit more in detail.

Thanks, Sami, and good day, everyone. Let's go over financials through more in detail.

Our second quarter sales was flat at EUR 1.213 billion. And with constant currencies, the organic growth was 2%.

Services sales declined 3% year-on-year and services represented 55% of our total sales. Our adjusted EBITA margin was 14% -- 14.1% and EUR 171 million.

That represents a decline of 16% year-on-year. That's a disappointing level.

And our Q2 earnings were burdened by adverse sales mix and ERP rollout, as Sami explained. The impact of sales mix was approximately EUR 50 million negative in the quarter, and the extra costs from ERP projects were approximately EUR 10 million in the quarter.

Our net financial expenses increased year-on-year due to higher gross debt and then costs related to our tender offer, which we did during the second quarter. Effective tax rate for the quarter was 24% and EPS for continuing operations, EUR 0.12, which is down EUR 0.04 from the year before.

Let's then move to financial position. During second quarter, we did a couple of important funding transactions.

We renewed our RCF and upsized it from EUR 600 million to EUR 700 million. Additionally, we issued a new 7-year bond for EUR 300 million and tendered 130 million worth of our outstanding 2027 notes.

Our net debt has increased by approximately EUR 240 million year-on-year, primarily due to base to energy settlement that we did during second half of '24. We continue to have BBB flat and Baa2 ratings from S&P and Moody's, both with stable outlook.

Then when it comes to our cash flow, we have been able to improve our cash generation in H1 2025. Cash flow from operations was EUR 343 million, which is 11% improvement year-on-year.

We have also successfully completed our inventory reduction program where the starting point was end of second quarter last year and we have brought the inventories down by approximately EUR 200 million in 12 months period. And the level where we are end of second quarter this year is EUR 1.830 billion, and that includes some tens of millions from the acquisitions that we have completed during this 12-month period.

Work to optimize cash flow continues to be our focus area, and that includes also inventory levels going forward. With that, I would like to hand the word back to you, Sami.

Thank you, Pasi, and a few commentary about investing for the future and then the sustainability work and also then our outlook for the future. We have been working for making sure that the future is bright for Metso and the acquisitions that we have been closing during the period Swiss Tower Mills in Switzerland, a very important acquisition for Minerals segment.

And will ensure our position in the energy efficient grinding going forward. Screening business that we acquired is located in China offers technological advantage for the large mining screens and successfully completed the full process.

And smaller but important TL Solution acquisition was happening in Europe, in Finland, it's recycling technology for the mill liners, and this emphasizes our commitment to take care of the -- from the raw material all the way until the waste of the products and the value chain. Likewise, during the Q2, we were able to close the divestment process for the Ferrous business to SMS group from Germany is the new owner, and we are, as we speak, working with the closing procedures.

So of course, very important, especially from the perspective that the management time can be then focused for the continued businesses. Other investments that we did during this period, they are at the service center in the Western Canada to strengthen our aftermarket position in the very important mining region.

And then Romania, in Europe acquisition to acquire facilities for our new screen manufacturing center located in a very good location from a logistics point of view also to serve the high-demand Central East Asia countries in the mining perspective. From the sustainability KPIs, we have our Metso Plus offering.

We have a target there to increase the sales to grow faster than overall sales. Now the flattish sales for overall and the Metso Plus sales was actually declining by 16%, follows the cycle in terms of lithium projects that had -- they are all in Metso Plus offering and those ones have not been under delivery for the first half of this year.

Then our own operations, we have the net zero target for 2030, and investments continue to happen for manufacturing to reach this goal. And where we are now is that we have reached the level of 70% down from the start of the KPI calculation in target fully, and we have 10 energy-saving projects completed during this quarter.

Logistics target is minus 20% down from the start of the calculation by end of this year. We are now hitting soon the 10% level, and it's very clear that we are most likely not able to reach the target that we set to ourselves.

We are developing there, but this is very much depending on our logistic partners in terms of having availability for the green transition lines and that one has been slower progress from the partners than expected. Then the last one is very important.

It is measuring how many of our suppliers are having the same alignment in the targets as we have. Our target has been to reach at the end of this year the level of 30% of the supplier spend having the same targets as us.

Success here is clear. We are already now after first half of '25 in the number 36.2%.

And we will continue this work as we do see this one as very important competitive advantage in the future when we have full value chain from Metso side secured from the sustainability perspective. And our view for the market outlook, we expect that the market activity in both Minerals and aggregates will remain at the current level.

We are aware of the tariff-related turbulences that potentially could affect global economic growth and market activity and this is the statement for that. And as a reminder, we have announced earlier, we are going to organize a Capital Markets Day this year, the date is October 2, and the location is Helsinki, Finland, hotel very much near the airport, making it very convenient for the people to arrive and participate.

So welcoming all of you to our Capital Markets Day and registration will open very soon at our web page and invitations.

All right, gentlemen. Thanks for the presentation.

And operator, we can now open the Q&A lines.

The first one would be on the Minerals business, if I may. What would be required for margins to reach a range of 17% to 18%.

I am thinking about what would be required in terms of large orders and pipeline conversion. And then if I may also ask about the impact of the destocking on your margins.

In other words, as you continue to reduce inventory, will this result in a negative impact on your margins or not?

Thank you for the questions. I can start with the first one.

So in the Minerals segment to read that beyond 17% where we have been and go all the way then to the 20%. So maybe summarizing this way that the volume is one of the levers to get the leverage out of that one.

The second one is very clear that the share of services within the segment needs to be favorable for higher profitability, meaning that share of services needs to be higher than that. And then I raise also the third element that there is possibilities for self-help inside the company and inside the Minerals segment that completing and moving forward with the results of these will be the needed element to reach the higher profitability levels.

And then, Michael, when it comes to your inventory and margins question, I mean, we are not selling inventories with discounts to reach the inventory targets that we reached during this quarter nor going forward. So it does not have any meaningful sort of a threat or impact when it comes to margins.

I have 3 please. So firstly, on the Minerals margin, can you please provide more color on the EUR 25 million of adjustment items in the quarter?

And more broadly, why the ERP costs were not adjusted for if they were one-off in nature?

Yes, I can start with that. Thanks for the question.

And ERP side, if I may provide you a bit more color on what we've been going through. So to start with ERP project is a multiyear activity you start from planning, designing, building and now during second quarter, we went to a significant go-live implementation close to 60% of our business went live.

Most of that was in the transaction side. So aftermarket side of the -- or service side of the business, and that has been the journey.

This is also the last important step to complete the Metso and Outotec merger. And with that, I mean that until now, we've been running with legacy Outotec ERP and then legacy Metso ERP.

And now going forward, we have on Metso ERP, which is modern and unfit for purpose for coming years and decades to come. Then on your question, I mean, why we are not adjusting it as one-off, we consider that implementing ERP is very much part of business, companies do it and it would be unfair.

It would not be the right thing based on our policy to adjust it away from our disclosed adjusted EBIT. So that was actually -- it was not even a discussion for us.

Of course, we've been considering that, but it was not a serious option. Then when it comes to the mix part of -- sales mix part of things, that impact was roughly EUR 15 million.

The ERP was roughly EUR 10 million. And here, like we have said, it is a combination of services share, which declined during the quarter from our total portfolio but then also what kind of -- especially within services, but what kind of businesses we have within that.

And on that one, we consider that based on the order intake that we have had during the second -- during the first half of the year, we have actually increased our service order book by EUR 160 million, which is all in the Minerals side. So that gives us a solid foundation to start the second quarter where we held the order book.

That was very clear. My second question was actually on the mix headwind, I guess, within service.

For the service deliveries to come in H2, will there be a negative mix that we should expect for the Services business?

No. That's now temporary for this quarter that we have reported and the background is there in the Q3, Q4 order intake when, as you might remember, we did not receive the upgrades and modernizations and that part was close to 0 now in the sales numbers.

And that -- looking at that backlog that has been created now as Pasi was saying, EUR 160 million higher booking than billing in the first half of the aftermarket and looking at that mix. So this mix that caused Q2 disappointment in the profitability, it's not visible for the second half.

Chitrita, if I may get back to your first question, still, you were asking also about the minerals adjustment. And the number that we have for the quarter includes an adjustment item related to our Swiss Tower Mill acquisition.

And there as a background, we owned 15% of the Swiss Tower Mills already prior to this step that was now completed during the quarter, and we have valued up that share 15%, and that's a EUR 27 million positive item in the quarter, and that is visible in minerals, so the adjustment item -- and it's also visible in our face of P&L in other operating income and expense line where you see sort of a EUR 30-plus million positive impact, but that includes EUR 27 million, which is adjustment item, and we have considered as one-off.

Perfect. And finally, on the small-to-midsized equipment orders, which were once again quite solid.

Can you please provide color on the large orders that maybe you see in the pipeline into H2?

The pipeline stays strong. And if I try to give you the color a little bit from the perspective that are those decisions like fading away further in the future.

That's not what we feel at the moment. That means that in the second half of this year, the expectation is that some of these ones that we are working very actively with the customers are turning to the orders already.

And then majority of them will be then the 2026 orders. But they are not like fading, they have same status as before and expectation from our side is that release of orders start to come in the second half of this year.

I guess just sticking to this theme of the internal mix effect within services, within minerals. So overall, you've had a EUR 15 million headwind from mix in total, and I calculate roughly EUR 4 million to EUR 5 million from the split between service and equipment.

So I guess, can I just confirm, was it roughly a EUR 10 million headwind in the quarter?

Yes, Edward. So from mix -- sales mix point of view, it's a EUR 15 million headwind and then the ERP-related costs that we discussed, that's roughly a EUR 10 million item.

Sorry, just trying to split the EUR 15 million between the service equipment mix and the internal service mix. So my estimate would be it'd be about a EUR 10 million headwind just within services, the internal mix in services.

Is that a fair number to think about?

Edward, I think we don't really comment on that. It's a EUR 15 million item overall.

And you are using the triangulation points that we offer in the report, which are indeed the share of services and then maybe also you could look at some of the margins that we have reported in the comparative periods to sort of do the math. But overall, including those 2 elements within services and then service capital mix, it's a EUR 15 million headwind for us.

Okay, that's helpful. And I'm sorry, I slightly missed a comment on the Swiss Tower Mill acquisition and the EUR 27 million revaluation effect.

Did you say that came through this quarter?

That's correct because we closed the acquisition early this -- it was in April and second quarter. And then we indeed revalued our existing 15% stake which resulted in a EUR 27 million one-off positive credit in the P&L and it has been reported in Minerals segment.

It's visible there. And then from a P&L point of view, it is visible in the other income and expenses where you see a slightly larger credit this quarter.

And then just a final question, just in terms of the -- sticking to the mix theme, just in terms of the mix between services and equipment in H2, I mean, clearly, you've had pretty strong book-to-bill on the service side but also on the equipment side. I'm just trying to think about the evolution into H2.

Is it sort of going to be -- is your expectation for it to remain roughly where it is, sorry, was in Q2?

I mean that's Edward, maybe something where we don't really provide guidance, as you know, but those book-to-bills that we've been able to create during the H1, they provide a starting point for us to improve on this for the second half.

I would have 2 questions on the -- rather on the aggregate side. Starting with you speaking about orders are picking up in Europe, but also at the same time, the services demand slowed due to low utilization.

So maybe how should we square this? The utilization is still low, but still your customers are coming back to buy new equipment.

So I'll take the second question afterwards, but maybe some light on this.

Yes. Thank you.

Very good question. So this aggregate business is very much especially the equipment business, it's about confidence for the situation today and especially the short-term future.

So customers investing now for the new technology equipment in Europe, it's coming from the fact that they are preparing for the for the better season coming in a few months' time. And these 2 are kind of not fully in linked that at the same time, there is not enough job for all the machines.

But these customers in question now they have a strong confidence for their own future and the demand that will be picking up even further in Europe.

Okay, now this makes sense. And then just my second question would be the higher cost in aggregates.

So I understood correctly. You have been ramping up the production already.

You've been getting back your temporarily laid off workers to the production facilities, which drove up the costs in aggregates? And would you expect this then to turn around from an, on the 1 side, revenue but then also margin level this effect in Q3 already?

Or is this something where you will -- where we will see the revenue bookings a little bit later in the year or next year?

Yes. Typically, it takes some time for the machines to be manufactured and then transported and then turned to invoices and revenue.

So from that perspective, it will start to normalize and stabilize the situation throughout these months now that we are back to so-called normal way of operating when the people are back in the factories to operate.

Okay. So basically, within Q3 already a turnaround here in this profitability headwind that we've seen before round about mid-Q3, okay.

I also wanted to ask about the mix effect because I can understand that the mix effect can have a negative impact on margins, but I don't really understand how a negative mix effect can have a negative impact on absolute earnings. So are you saying that you experienced invoicing delays in your service business or did the quarter develop in line with your expectations, even though the book-to-bill was above 1.

Thanks, Andreas, for that question. I mean, when you look at our share of service business, so we have declined year-on-year.

And obviously, the decline there translates also to absolute numbers. So that's part of the mix equation here.

So did it develop in line with your expectations or did the service part of the business not come in, in line with your expectations?

Well, obviously, we are not satisfied with decline there. We look to grow especially that part of our business.

And because we have not really communicated what our expectations were. So maybe I'm a bit hesitant to communicate that whether it developed in line or not.

But I mean, the fact is that it declined, and that's not satisfactory.

Andreas, if I may -- Andreas, I will continue. As I already said in my presentation part.

So in that sense, it did represent our expectation that at the end of 2024, we did not receive the orders in the Services for the upgrades and modernizations. And typically, they have that lead time of 6 to 9 months to be delivered.

So they were missing from this Q2 invoicing and sales.

Yes. And on that.

So are you now saying that the Services revenue will grow faster than equipment in the coming quarters and that the test mix within Services, they will normalize in Q3 and onwards and that we will not see this kind of effect also in Q3 and Q4?

Yes. As said, we have been booking a good amount of Services orders now in the first half of the year, and they will be turned as a revenue in the second half.

And from that perspective, that backlog looks normal as Metso backlog has been in the previous quarters outside of this Q2.

Understood. And then on the balance sheet, inventory to sales is now at 38%.

You have been able to reduce the inventory level to EUR 1.8 billion, but how to think about the inventory to sales evolution over the coming 12 to 24 months? Will you be able to lower that rate through even further?

I mean thanks, Andreas, a good and valid question. And if I start from broader working capital point of view.

So we do see potential to release gas from there and that includes also inventories. I mean now we are happy that we have reached the target that we set a year ago to reduce inventories.

But I mean this is continuous focus area, and we continue to work with all the 3 main components of working capital, including inventories. But then because we are a bit hesitant to sort of quantify how much and so forth.

But we do see potential and then we'll report going forward how we perform there.

I want to start with that inventory point, if I may. Obviously, 38% of sales today and an improvement year-on-year, which is positive.

But if I look back to 2019, and sort of the 5-year period prior to that, you had an average level at 28% of your revenue. I appreciate there's been a lot of portfolio changes, McCloskey, Outotec, the sale of the 2 metals assets and a number of other changes more recently.

I guess just objectively, how should we think about that inventory to sales ratio as we grow your respective minerals and aggregates businesses? In other words, is the 38% today consistent across the segments?

Is there any particular subsegment mix dynamic we need to think about? I'm just curious about mix contribution given all the changes in the portfolio.

Thank you. Excellent question.

I try to answer to that. So this EUR 1.8 billion level that we have now reached, thanks to this normalization program that we run, that was a level that we calculated with the business leaders that we are not going to jeopardize any capability to serve the customers, meaning that receiving new orders and sales from that perspective.

Then second viewpoint you refer to 2019. I personally remember very well beginning of 2021 when our inventory levels were down to EUR 1.2 billion, EUR 1.3 billion, a little bit lower sales volumes at that time, most likely, yes.

But that level was critically too low from the aftermarket service capability point of view. And now where we are, we are happy that we have been successfully completed this program and now starts the next phase to really look at the inventory from the perspective that how does the good look like, and further working with that, it does help that we have a new ERP system, giving us much more capabilities to understand and see the transparency and that's where we are at the moment.

So sorry, we cannot give you exact numbers from the share of the sales point of view, but stays in the management agenda.

Christian, I would like to complement it a bit because, I mean, it's not just one type of a business that we manage, but we have at least sort of 4 main type of businesses from an inventory point of view that we need to manage. And the first one is our Minerals capital business where customers typically prepay us and then we operate throughout the delivery with positive cash so that customers have always paid us more than what we tie into inventories and other components.

Then the second part is aggregates capital where we have own manufacturing, own assembly, totally different business from an inventory point of view. And there are, of course, a lot of components come also from external, but what we do most of the manufacturing.

Then a third component is our service business where we have own manufacturing. So again, own manufacturing and inventories related to that and then supply chain from our own manufacturing facilities towards customers.

And then the fourth area is our Services business where we use third-party manufacturing. And there, again, the dynamics are different.

We have different kind of products. They are -- some of them we stock, some of them we manufacture only against the order, et cetera.

So this is just to provide you a bit of a color of the dynamics that we are managing when talking about the inventory. And this is just sort of a main categorization, then underneath, there is different kind of dynamics in all those 4 categories.

But it is just to provide you a bit of a color that what inventory means for us, it's not just a one lump, but at least 4 sort of main and different business dynamics that we need to manage.

I really appreciate that color. So just in simple terms, if Minerals OE large orders accelerate, we should expect that to be favorable or else equal to the inventory position?

That's correct because we run it with customer repayments and then us working with sort of a cash-positive situation, if you will, throughout the delivery.

Great. My second one then is on the ERP upgrade.

I appreciate these are complex projects, and obviously, it relates to a big proportion of your business. I just wonder, you mentioned 60% of the revenue now covered and that this was Phase 3.

Is there a fourth phase? How do we think about the remaining 40%?

And should we be accommodating any similar sort of project effects in the second half. Yes, anything you can help with any future guidance there would be useful.

Sure, Christian. So I mean 60% was the scope where we went live now.

We have actually gone live with 20% already earlier late last year. And that was the primarily the legacy Outotec part of the business.

So we have a give or take 20% still to go live. And that goal will happen towards end of this year.

And while it obviously requires dedication and focus and diligent execution, 80% of the business live now gives us also confidence that we are able to run this remaining piece in a successful way and then start harvesting gradually all the opportunities that a modern tool brings for us.

Understood. And maybe, sorry, just a third one that came to mind.

You're upgrading your Tampere facilities in aggregates, is there any near-term cost effect that was an issue in aggregate for this quarter related to that?

No, not really, Christian. I mean that's a construction project.

Basically, I mean, on the site, we have that the buildings start to look like buildings and then we gradually work -- start to work with all the assemblies inside the buildings and this project is on schedule and on budget, and it has no cost implications for second quarter or we don't expect those also prior we start then ramping up the facility in due course.

Two question areas really. The first one, going back to Minerals.

I'd just like to understand, on a number of occasions, you mentioned that within the service business, the margin declined due to the type of service that you were executing and so my question is perhaps more qualitatively, can you describe how the business mix shifted either geographically or by the type of activity within service that caused the dilution? And I hear the positive growth in the order growth in service that you've described.

But when we look forward, how do you see the mix of the various types of businesses that were dilutive in Q2 evolving in Q3 and Q4? That's the first question.

Yes. Thank you.

So a little bit opening up that within the aftermarket services, we have a different type of products. Some of them are very high captivity products, and that typically reflects higher margins -- highest margins, I would like to say.

And then there are more commodity type of products, which are having less margin and some of them are then linked together as well that the package is including both. So now in the second quarter, the mix within the Services was more towards temporary now for the lower profitability.

As said already earlier, in the response that looking to the existing backlog and the realization of the backlog going forward, that looks like normal what we have been delivering in the Services Q1 and before that.

I mean building on that, have you seen in the first half of the year, any interesting evolution on a geographic basis given your global operations?

Certain evolution happens, but not in a significant nature. So we have a strong minerals segment.

For example, we have strong areas where we are very much present and continue to get good amount of aftermarket services business like South America and so forth. So no significant change in the geographical shift.

And then, I mean, in an earlier question, you were asked about the margin trajectory for minerals and describe the number of levers. I just want to touch on the last lever, which was self-help and cost saving measures.

I mean when we think about the ERP program, the costs up loading upfront or a simplification process that must provide drop-through in benefits as you go into late '25, '26, but as you stand today with the time you've had at the driving seat, what are the sort of scope and range of other self-help measures that you see going into the next 12, 24 months?

Excellent question, and I'm more than happy to share that more in detail, second of October, that is -- it's part of our strategic work and I personally enjoy being in charge of the company that has been able to identify throughout the work themselves, these potential self-help pockets. They are not maybe like one silver bullet.

They are more like understanding that they do exist and then having a good plan to go after them. But I'm more than happy to open up this much more than when we have the Capital Market Day.

Maybe a supplementary follow-on then, please. With regard to the Minerals structure, you've successfully divested the Ferrous business, but you've retained a number of other activities, smelting comes to mind.

To what extent are those also dilutive within the margin that we've seen in the first half in Minerals? And is that something we should factor in when thinking about the rest of the year and next year?

Yes. They are not diluting.

So we have decided to develop further these businesses in Metso, and that typically comes in line with our strategic targets being then profitability or growth and -- or both. So from that perspective, we are very, very happy of having these businesses and continue to do good business with these technologies.

It's Antti from SEB. Just one question remaining from me, and it's relating to the aggregates profitability on the very near term.

I mean you mentioned that you have now kind of we called the temporary laid off workers in Europe, which has resulted in higher costs. But very rarely, your top line kind of increases anymore from the Q2 level in the second half.

So I'm just thinking that is this kind of a new normalized profitability that we should expect going forward as Europe is kind of coming back and kind of the strong margins that are even stronger margins that we saw a couple of years back were mainly related on mix with North America being on a high level and Europe on a very poor level?

Yes. Thank you.

And you are right with the seasonality within the aggregate business. On the other hand, having people working and manufacturing the ready products for the customers.

If we look at the 2-year period when the profitability has been staying quite stable. So there has been those elements as well.

So North America is a very important success factor for Metso to deliver good numbers in the aggregate segment. That is a fact.

The Europe is equally important from the volume perspective. So Q3 typically is the most challenging quarter for the aggregate regarding the seasonality.

So you were right in that one.

Yes, because I wanted to come back on something that you said on kind of the sentiment and the confidence around the European clients that they're preparing for a better season coming in a few months' time, but this is still very much like a summer business in Europe, right? So in terms of your, let's say, equipment orders and deliveries in Europe, in general, there's still the normal seasonality that we should expect for this year?

It's a difficult one to really give any strong opinion because there is also the backlog of noninvestment quite a long time in the European side. So what is the impact of that?

What we see at the moment, of course, now we are in the summer months, it's that the European pickup that started to happen at the very end of the Q1, seems to be staying there. So the activity level from the customer side is requesting for quotations and seriously, seriously considering buying the equipment seems to be quite strong at the moment in the Europe.

It's Vlad from Barclays. Let me ask on the cost side, short.

You mentioned this ERP implementation cost. Can you let us know what those costs actually are?

Are they cost payments for external contracts, other payments to people? What are those costs?

Then second question, there was a quite significant sequential increase in noncurrent provisions of about EUR 20 million. Did it impact the P&L in any way?

And what was this increase related to? And maybe lastly on costs.

Is this EUR 33 million of other costs, will we be able to help us break them down on what those actually were?

Sorry, Vlad, can you repeat the third question? I did not get that one.

Yes, the third one, absolutely. So it was related to the other cost line in the P&L of EUR 30-plus million this quarter.

Would you be able to break down those lines and tell us what those EUR 30 million plus included in terms of costs?

Yes. Thanks, Vlad.

And let me start from the last one. So EUR 27 million out of that is the Swiss Tower Mill 15% ownership stake revaluation, noncash gain that we recorded during the quarter and then the rest in that line is FX.

Then when your first question when it comes to ERP type costs, this is a mixed bag, but a lot of that is externals when we run this kind of a project, we have a lot of internal dedication but then also external support to get everything prepared, get it done, get it implemented and then go live in a successful way. So we have had a fair bit of third parties helping with us.

And then it's also some sort of internal related costs we have had good amount of colleagues co-locating for extended amount of periods to support the go-live and so forth. So it's this kind of items what we saw in this extra ERP-related costs.

And then you had a question on noncurrent provisions. So unfortunately, I'm not able to answer that.

But let us check and come back to you with an answer on that.

Absolutely. If I can do a quick 2 follow-ups.

One is on the mix going into the second half. I remember you were quite successful in booking a couple of big projects in Central Asia in the second half of last year, which I thought would start contributing meaningfully to revenue in the second half of this year.

Will those contribution be margin neutral, margin accretive, margin dilutive? And then the second -- my final question is on working capital dynamics.

Obviously, a great job in terms of reducing inventory in line with what you have targeted and promised. Working capital as a whole, still was some sort of a headwind to cash flow in the first half.

How do you expect working capital as a whole to develop for the rest of the year?

Yes. Maybe I start from the working capital question.

So we discussed this already in the call. So indeed, we are happy to achieve what we promised to deliver earlier.

And then work continues. You are right that even in second quarter, we tied some tens of millions further cash into working capital.

And obviously, that's a trend that we want to change. And when we are addressing this, we are addressing inventories which we have discussed in length, but then also accounts receivables and accounts payables that are the 2 other main working capital components.

And we will report back during the coming quarters that how the work progress is. Then Vlad, you had also a question on the -- on some of the orders that we received during second half of last year.

So indeed, from delivery time point of view, they start to impact revenues during second half of this year. But I mean, we are not really commenting case by case what are the margins on those.

So I mean, you should not expect any significant deviations from those, but we can't really give project level guidance on the margins.

So just on the aggregates business, we talked a bit about Europe. It seems that things are improving in Europe.

What about the U.S. market?

I think listening to you guys 1 month ago or so 1, 2 months, you signed a fairly upbeat on this business, both with the European market improving and the U.S. actually sentiments remaining quite strong despite the fact that we have tariff discussions, inventory distributors coming down in the U.S.

as well. So based on that, one could even assume that you would have seen a better outlook for aggregates into the second half.

Just wondering if you could talk a bit about the U.S. market here, if anything has changed here in the past few weeks?

Thank you for the question. So the U.S.

market had these dynamics that clearly, it was important for market to get confirmation that who will be the President and after that one, the pickup started in the U.S. market in the beginning of this year, creating the normalization of the market conditions, I would call it like that.

And that has been continuing. Tariff discussion is not coming through in the discussion with the U.S.-based customers.

But obviously, we, as a company, do acknowledge that if the result of tariff decisions are something that will significantly increase the pricing, including the surcharges that we are using that will slow down most likely the demand in the U.S. market in that kind of situation.

And on the service part of this business, and you talked about the utilization rates and the weak order intake in the second quarter here. How do you think about that in the second half?

I mean do you expect that to still improve from a growth perspective? Or how do you think about the aggregate aftermarket business?

Yes. Typically, the Northern Hemisphere, these months right now are the very active months when a lot of work is conducted by the customers.

And then typically, that is increasing the demand of the spares and wears.

Just a very quick one. It's obviously been a very disruptive period from your customers given what's going on in the U.S.

and tariffs, et cetera. I was wondering if you could give us a sense of how the order intake shaped up through the quarter.

Did you exit the period, i.e., June on a positive trajectory? Any color you could give on that would be greatly appreciated.

Yes. For the order intake during the quarter, so the months were more or less progressing as the estimates were for us.

So we didn't see any kind of impact from that one coming in the order intake.

All right. We have gone through all of your questions.

Thanks for those. Thanks for participating in the call.

We wrap up here. And like Sami said, next event for us would be the Capital Markets Day on October 2 and after that third quarter results, October 23.

But in terms of CMD, more information coming soon. At this time, we thank you for this call and enjoy your summer.

Bye-bye.