Metso Oyj (METSO) Earnings Call Transcript & Summary

Hello, and welcome to Metso Outotec's first ever Capital Markets Day. I'm Juha Rouhiainen from Metso Outotec's IR. And with me here in Helsinki are members of our top management team, and we are excited to introduce you to Metso Outotec. We are now some 4.5 months into the merger. And it has been a really fast start for the company in terms of getting to know new colleagues, setting up targets and strategies, putting organizations together, serving our customers with new combined unique offering and so on and so on. And we have done everything under COVID-related limitations and restrictions. We think that we have prepared an interesting and exciting program for you today. So let's check out our agenda. We will start momentarily with presentations by President and CEO, Pekka Vauramo; and CFO, Eeva Sipilä. Those will take together some 60 minutes. After which we will have Q&A for them both. Then we'll take a break for 10 minutes. After which we start our deep dive into our industries. First will be aggregates presentation, which takes some 60 minutes as well, after which we will have questions. Then another break. And we will close with Mineral's presentation followed by Q&A. And then about 4:00 p.m. Finnish time, we are ready to wrap up and close. And our presenters today are here. So President and CEO, Pekka Vauramo; CFO, Eeva Sipilä. And the industry presentations, we will do in such a way that we'll have people who are responsible for both equipment and aftermarket side. So Markku Simula, Aggregates Equipment, he will discuss aggregates with Sami Takaluoma from Consumables; and Markku Teräsvasara of Services; and then Stephan Kirsch will talk about Minerals, together with Markku and Sami. This is how we'll run the industry presentations. As this is a fully virtual event, questions can be asked through the webcast. [Operator Instructions] And a reminder, we will be making forward-looking statements during this presentation. With these opening remarks, I think we are ready to start. Once again, thanks for joining us today. We appreciate your time. We hope that you find our story interesting and compelling. And what a better way to start than start from the top. So it's my pleasure to introduce President and CEO, Pekka Vauramo.

Good morning, and welcome to our Capital Markets Day, really pleasure to be here and talk about our strategy. We are 4 months now, fifth month now in the new company, Metso Outotec. And day 1, we started to work on a new strategy for a new company. We started, of course, from very basics. Since we are a new company. This is not Metso, this is not Outotec, this is Metso Outotec. And we started from the purpose. Our businesses are driven very much by the megatrends and, therefore, we felt that this statement enabling sustainable modern life, suits very well in where we are. This is an exciting purpose statement ourselves in the company. I think it tells very well to the external world as well, why do we exist and makes us an interesting company. We, of course, worked on our vision as well, and we have envisioned 2 parts. We want to be customers' #1 choice for sustainable use of natural resources. So this is something that is very important when we move on in this presentation. We talk about customers, we talk about sustainability as one of the business drivers for -- and main drivers for our business in future. In the second part, we wanted to highlight that we shall deliver. We shall deliver to our stakeholders, all our stakeholders, and we do it in a safely manner. It's important for everyone, of course, safety. But it's important within the industries that we serve. So these are the -- really the basic things that we went through as a management team to get the strategy work we're going and set the scene for ourselves. On a one-pager, our strategy is to deliver a Tier 1 company. That's what we are committed to. The megatrends, they are supporting us. They are the growth drivers and will guide our developments. We have defined top 1 -- Tier 1 priorities, top priorities, as we call them. And they very, very much suit in the environment where we operate. They are a good match with the megatrends. And they are also addressing the interests of all stakeholders in our company. We are merging 2 companies. Therefore, integration is, of course, important part of our sort of medium-term actions and activities. And we have had a good start in that one. The financial performance with the targets that we'll review shortly, integration synergies, both revenue and cost synergies will take us great deal towards Tier 1 financial performance. But there's more things that are required for that one. Customer centricity, we feel that there's more potential in becoming more customer-focused and more knowledgeable of what our customers truly want from us and how do we perform with our customers when we provide our services and deliver our offerings. Sustainability. We know that climate change and global warming emissions, they are the topic of the society. It's getting to the point that global warming is threatening the existence of life on this Earth, unless we take action. And we commit ourselves to take strong action and leadership in that area in our industry. We are already a great deal into that direction, but we shall do more. We are forming a new company. New company needs a new culture, culture, which is not Metso culture, nor Outotec culture, it needs to be Metso Outotec culture. We call that performance culture or Tier 1 culture. It will be the way how we work in the company. The values that are stated here on the bottom of the slide, they guide us in building and the culture buildup has been started already. We will do it bottoms up. We will ask from people a question from our own people, a question, what kind of company we shall be in order to achieve our ambitious targets. And the strategic targets are here. We communicated this about 3 weeks ago already. An adjusted EBITDA margin of more than 15% over the cycle. This means that on top of the cycle, we shall be performing better than 15%. And at the bottom, we shall be more recession-proof than neither of the companies have been in the past. And integration synergies, both cost and revenue synergies will help us to get there. But like I said, we need to also develop our businesses in other areas. We also want to distribute more than 50% of our earnings per share as dividends to our shareholders. This is important to those stakeholders. We want to maintain our investment-grade rating, and this is, of course, important and required for our future development, be it then growth actions or M&A in future. Last but not the least, we are committing ourselves to maximum 1.5-degree global warming. And this is a commitment that we are serious about it. We have already approved science-based targets by external organization for ourselves. And we start to follow those things and have already started, in fact, actions along those lines. Tier 1 priorities will be guiding our work. Many of these will be, in fact, implemented with and through our business that's the way how we drive our business. We are not acting centrally. We are acting decentralized way. And you will see later on today when my colleagues are presenting the businesses these things will be reflected in the actions and activities as they go through their businesses. But culture truly is something that we will be driving from the group. This is something that unites us and makes us to act as a one. We have already started to work. We have taken the first actions to integrate the company. But the first actions, as you might understand, they are fairly mechanical by nature. The true integration only starts when we start to act as one. And when we act as one, in a way that takes us towards achieving our ambitious goals. We start all this work from position of strength. And we have many of them. We -- with the combination, we have a wide offering. We are covering the value chains that are relevant for us very well. We have offering for every stage of -- and we have process knowledge. And we have technologies that are required to further develop our offerings in this area. We are also focused now with all the changes that we have made. Our customer base and our closeness to our customers in world markets makes us a strong service provider for the industry. And services will be one of the areas that we will highlight in our actions and activities and development in future. Our technology and R&D investments, about EUR 100 million a year, they are probably the biggest ones in this industry as they relate to that -- those value chains where we are involved. And we have the scale and also the financial position to take those steps and actions. We have a new organization in place. Organization is very much focused. It's a decentralized organization. We drive our business through business areas. They have the profit and loss responsibility from supply chain towards the end customers. There's nothing that goes across them. They are in charge of offering go-to-market models if they decide not to use our market areas for that one. They are free to do so for good reasons. And they're responsible for R&D and those developments, also the investments relating to them. Market areas, on the other hand, have an important role, and we have 8 of them altogether in the group. Previously, Metso had 13; Outotec, 10. So now we are down to 8 market areas. And this is, of course, one source of the synergies that we will realize. Customer service, customer relationship is, of course, natural responsibility of market areas and sales management and providing the administration for local operations and subsidiary companies in about 50 or so countries where we operate directly. Global functions have a role where we can create scale benefits. And these are primarily either strategic, capital allocation issues or really areas where we can provide clear benefits of scale. We share best practices through them. We provide tools and, of course, make sure that we operate efficiently wherever we are. And we have 4 of those global functions altogether, and the heads of them are represented in the management team. Our portfolio is very much characterized with strong aftermarket, both presence but also volume. It's a different opportunity in different businesses. In Aggregates, 35% to 45% is the potential that we have in aftermarket. We are not there today exactly in Aggregates. The Minerals, 60% to 70% potential of the sales. And then in Metals, 30% to 40%. And we are not there either in Metals. But after sales and service opportunities is something that we always keep in mind. For example, when we develop our company into the future when we consider acquisitions or other development actions, that is the #1 thing that we look into because it provides us the profitability and resilience over the cycles. Maybe some commentary here on the numbers, of course, the ones in the bottom differ quite a much. We have the biggest potential in our Minerals business, 60% to 70%. And then secondly, in the Aggregates, but aggregates is somewhat limited towards -- for us because half of our business, we do through distributors and service and aftermarket is primarily of the business of the one who has the end customer relationship. And that's normally with distributors in -- or in many cases, with distributors in aggregate. Therefore, our volume exposure is limited, but we are getting really the interesting part of the potential, which means spare parts and consumable parts out of it. Metals, it's a lower aftermarket, but there's development potential. And sustainability is one of those areas that will provide through modifications and upgrades potential in future for metals aftermarket. As said already, we'll emphasize services and products in our future. We want to do this one because we shall reduce the risk exposure that we have had in the past on projects. So therefore, these 2 things are -- will have a priority there. It doesn't mean that we walk away from projects completely. But we want to deliver more standardized products into the projects which we participate. And this will guide our product development, our R&D. For that one, we do need a solid basis in technology so that we can implement those things that are required. In services, we will reinforce our presence in service-intensive businesses. I think it's important for us and our resiliency in future. And we will grow, of course, services in our own installed base, but we will go beyond, as we have already started to do so. Here a picture, by the way, it's a picture of a Lokotrack. Lokotrack -- that this size of a Lokotrack has been designed so that it fits in a container. And that, in my opinion, captures what the product can be and what it should be. It is something that we have thought through that how do we deliver it to the customer. And as it fits in a container, it arrives safely also in same condition and shape that it left the factory. But the product, since it's been preengineered, it does have also pre thought supply chain, and it does have the aftermarket side, the spare parts selection is available the product catalogs and manuals are available. The training packages are available. So this is the product model towards which we shall walk in all of our businesses in the future. We have taken actions because of the performance in the third quarter in our Metals and Recycling business. We then ended up delivering loss in the third quarter. And therefore, I mean, with the targets that we have, it's evident that we will not continue with Metals as it is today. Therefore, we said that we will initiate immediately turnaround which we are currently planning, and we will be then later on communicating about the actions and activities as we move on. We are clearly focusing on turning around the different businesses inside the metals and target in the metals, overall is to achieve 10% adjusted EBITDA level in those businesses that we then continue to develop. But that activity is currently being planned, and we will, of course, communicate about further actions then once we're ready with that. We also told that we are looking to divest our Recycling business. Recycling business, which has been part of Metso's portfolio for a number of years. But when we looked at the business and the growth potential and also the synergies with the rest, we noticed that there's not too many synergies, and on the other hand, to pick up global scale within the current Metso Outotec, it would be challenging. And there's certainly a better home that we can find for Recycling business. So that is something which is work in progress as we speak, currently. The core industries where we are -- they have a solid growth outlook. This data is based on externals. This is Woodmac projects data evaluation, where these numbers are coming from. And we have more or less similar growth picture in all of our businesses during the next 4, 5 years, 3% to 6%, 4% to 6% depending on business that we talk about, and this is now on the capital equipment side. So this provides the basis. Our industries are, of course, they are cyclic industries, and we will see ups and downs on the road, but that should be the average growth rate based on this data source. We are exposed in a very balanced way with different Metals and Minerals as well. However, the 4 biggest ones they represent 80% of our sales. They're not growing exactly in the same way. Really, the traditional -- the major metals, copper, iron, gold, they tend to grow sort of at somewhat lower rate. But there are interesting dynamics happening inside of these metals. I mean copper, we know more copper is required for electrification. Therefore, I mean, the supply balance will, of course, swing between oversupply and shortage. And currently, the shortage is expected somewhere by 2023. And that is, of course, something which is even a shorter-term potential for us because that capacity need to be built before we hit that time point. In iron ore, the overall growth is not that great, but interesting dynamics insight. The steel industry is changing the way how they produce steel and demand for pellets is, in fact, increasing in short and medium-term turn fairly rapidly, and that is, of course, something that is at the core of our metals business. Gold, more balanced outlook, but we, of course, know that gold demand, especially with the peaks, as we are currently experiencing. One of those peaks, the demand and investments into gold is very active. But then there are these emerging battery metals. And I'm sure we will see more metals coming into this picture because battery technologies are changing. And here, the growth figures are totally different from that. And to add this one, at one point, closer to 2023, the current generation of, for example, electric vehicle batteries, they need to be recycled. And when that recycling comes in, we have and we will maintain. Despite of divesting our Recycling business, we still have in our Metals business, relevant technologies to recover these metals and recycle these metals. So that is an opportunity that we do see sort of medium to long term, in addition to prime production from the mines. Sustainability. 2 parts in sustainability, the way how we look at. We have a footprint. Footprint is what do we cause in our own operations, in our own supply chain and in logistics that we do, including our business travel. So that is the footprint part. Handprint, on the other hand, is the one what we deliver to our customers and what do they mean in terms of improvement on either energy usage or emission or water efficiency or recyclability, circularity or safety. And already today, our handprint is bigger than our footprint. And we, of course, want to develop and go far beyond where we are today. Footprint, we'll continue to reduce our footprint, including supply chain, including our suppliers. We will introduce incentives already beginning of next year for management on our footprint side of it. This area is sort of very rapidly developing area. Therefore, we were not able to come up with sort of a handprint incentives at this moment. But these targets that we have set ourselves, they are science-based targets, and they have been accepted, approved by an external organization. And those are the ones that we will be measuring ourselves against. So this is a commitment that we'll make, and there's not so many companies that have given this 1.5-degree commitment. There are further opportunities. We know that digitalization hasn't gone away. The need for it hasn't gone away. In fact, the recent pan -- or current pandemic has shown that -- and probably proven also the business case for many of our customers for digital solutions to monitor the equipment, operate it remotely to provide technical services back up in digital manner because sometimes visiting customers is restricted as it is still in some of the mines. We will continue through our business areas to implement these digital solutions. We don't anymore have a digital development taking place in the group. We feel that the businesses, they know what the business model needs to be and what needs to be developed. But they will, of course, be then fully responsible for the results, but also responsible for investments going into this area. You will see this digitalization coming through in my colleagues' presentations. Summarizing my part of the presentation, this opening speech really. I feel that we have a strong strategy, solid strategy. Unique offering, and we will and we shall become customer-focused. That's important for our services. We are exposed and continue to develop our exposure in growing industries with very focused portfolio. We are in sort of aggregates value chain and metals production value chain, two value chains that we cover, two value chains that are synergistic with each other. That's important. That's how we want to stay, and that's what we want to further develop. We emphasize services. We emphasize products. They are important. We will not abandon projects, but we will deliver more standardized products into these projects rather than engineering everything and tailor make everything for the projects. Sustainability. One of the key drivers from the megatrend side. And we are really in the middle of that one when we look at both aggregates, value chain and metals production value chain. And we are committed to delivering strong financial performance. So with these words, welcome again to our Capital Markets Day, and I will hand over to Eeva Sipilä. Eeva will go through then the financials.

Thank you, Pekka. And as you mentioned, Eeva will be next, so we could stay in the group level, discussing financials. [Operator Instructions] and we'll take questions to Pekka and Eeva after Eeva's presentation. But here she is CFO, Eeva Sipilä.

Good morning or good afternoon on my behalf as well. I have 3 topics I want to discuss with you today: firstly, our immediate priorities prior and opposed to closing; secondly, I want to discuss our financial targets a bit more in detail; and thirdly, I thought I would open up a bit our thinking on portfolio and how we want to create shareholder value. So moving to the first section on what we have been busy with before and immediately after the closing. So obviously, liquidity and the funding has been one of the first things. And we worked on liquidity already well before closing in order to be ready. And hence, we've sort of had a very good and stable situation now in the past months. Basically, at the end of September, we had roughly EUR 0.5 billion of liquid assets on our balance sheet. And in addition, and access to available liquid funds of almost EUR 1.3 billion. With liquidity in a strong position, we've also then during Q3 after closing, move to cost savings also in the area of funding. We called back the hybrid that Outotec had launched some years back immediately in July. In September, we repaid a bond issued by Outotec earlier. Both of those products had an interest cost that was way above what Metso Outotec is paying. And the debt that we have today, the average interest rate cost is just a bit higher than 1%. As we now then move forward, we obviously -- when you look at the maturity profile picture on the right-hand side, we do want to extend and lengthen the maturities in the coming months and quarters. But overall, I think we're very satisfied with the level of the KPIs of our balance sheet that you see on the lower part of this slide. Another key topic for us, obviously, immediately after closing has been around integration. And getting a swift start to the integration in order to be able to then also realize quickly, the first synergies has been very important. As you may remember, 1 month into the close in early August, we came out with tougher targets on our synergies. Basically, we -- from the original EUR 100 million of cost synergies, we raised the target to EUR 120 million. And not only that from the original time line of 3 years, we went down to 1.5 years. Basically, we expect to deliver EUR 120 million of cost synergies as a run rate by the end of next year. And just a couple of weeks back when we came out with our third quarter earnings, we were able to announce that the run rate achieved by the end of September, was EUR 31 million. And we are on track to deliver EUR 50 million run rate by the end of this year. So we are very well on track with the cost synergies. On the revenue synergy side, we've kept the original EUR 150 million of additional sales target. Obviously, in the current pandemic environment, we will need to see a bit on how the market develops to comment more on that. But this is a number that we are comfortable with and will work sort of with the platform that we have built. A third key topic for us throughout the integration is obviously been around the business-specific improvement projects. Those of you who followed Metso, remember very well that we've been talking for the past couple of years already on quite a long list of actions really to sort of fundamentally improve the profitability levels of our business. And my colleagues, the business area presidents will come back to concrete examples on their businesses in this. But on a group level, I would perhaps want to sort of highlight and group them into 3 headlines. Firstly, supply footprint, it's been an important part of our work so far, only 1 -- roughly 1 week ago, did you see our public announcement on finding a conclusion in South Africa with our Vereeniging operations. And we've had many announcements earlier on all with the intention to improve the productivity and efficiency of the footprint that we have. And I think our global footprint has really well made through the sort of tough test the pandemic has put us all in this year. We have been able to deliver in very difficult circumstances, thanks to our global and efficient network. Obviously, the better network, better our supply footprint, the more efficient we are also net working capital, something that's important to contribute to our financial targets. The second headline of our business-specific actions is really around customer centricity. Obviously, it's all around availability, better on-time performance, that makes our customers happier, but it also makes our balance sheet leaner because, again, we are reusing the amounts of working capital required. And thirdly, R&D and engineering. There is a lot of efficiency we can gain by productization, standardization. But at the same time, as we know, as Metso Outotec, are the biggest spender in R&D in our industry. It's not only important to follow the amount of money, it's actually also to follow how well we spend it. And I think over the past couple of years, we've built a very solid model of road maps and gates, where we really sort of do our utmost to ensure that all the money spent is spent in a way that does deliver true value to our customers. We're very happy with that toolkit and way of working. And obviously, it will support very well also the metals turnaround activities as we want to sort of make sure that we really focus on the development and that adds value to our customers. So these 3 things is something that really has been high on our priority. And obviously, we've had businesses, which are less impacted by the integration. Our Aggregates, Consumables businesses have really truly focused on the business-specific improvement actions throughout this year. Then again, areas that have also been part of integration. There are also various that fall into this bucket and have been really part of continuing activities around sustainably improving our profitability. Moving then to the second section of my presentation on the financial targets. So our President and CEO already mentioned them, they were also published a few weeks back. Pekka talked more in detail about the sustainability one. I assume the dividend one is pretty self-explanatory. So I'll focus my comments today on the 2 first ones, on the adjusted EBITDA target as well as then the investment-grade rating target. And as you see from the graph on the right-hand side, so I've tried to illustrate that using our pro forma last year starting point prior to the merger, and then sort of calculating the actions we have on top. I think this bridge illustrates very well why we are comfortable with the 15% target. We think we can deliver over 15% margins over the cycle, with the actions that we have not only planned, but to a large extent, we have already ongoing. Now the biggest step, obviously, is the cost synergies. The EUR 120 million I just discussed, where we are sort of a EUR 31 million run rate behind us. That will really take us a big leap towards the 15%. But in addition, the business-specific improvement actions are very important. They are the second big step that we need to take. And as I said, those actions have been practiced -- have been sort of worked on for quite some time. And as we're -- every step we're able to take, obviously enable certain new actions to follow. And we're comfortable on that journey that we have set ourselves in earlier. Then clearly, revenue synergies are apart here. Now due to pandemic situation, I've used as a base, just the same volume that we had in 2019. The EUR 4.2 billion makes the illustration a bit more simple. But I think also is probably a realistic base on where we sort of come out of after the pandemic, hopefully, in the coming couple of months. The revenue synergies will certainly contribute, especially as their mix is a good mix, very aftermarket. Focused mix, obviously, leveraging the installed base of Outotec in them. But many sort of interesting opportunities that will be discussed later today. And then finally, on the portfolio side, the announcement of recycling does contribute to us reaching the 15% target in a sense that recycling has been clearly on a lower level as we have published from the numbers, so around 6% adjusted EBITDA last year. So with that, I hope I've been able to sort of open up a bit more in detail. What takes us to 15% and above. And really, as I said, it's the 2 big steps that are worthwhile remembering, the cost synergies and then the sort of group of business-specific actions. Moving on to maintaining investment-grade rating. So obviously, you know very well that this is very much in line with the profitability target. We were thinking about a specific balance sheet target originally, but then felt that maybe an umbrella expression like this, which actually encompasses all the key ingredients we want to work with is actually a better way to -- in a simple and efficient way communicate to you all what we want to achieve. So obviously, we want to improve the profitability. We want to ensure that we make cash out of it. So it's all about net working capital efficiency in our case. And then thirdly, we want to ensure that the level of debt is at a reasonable level and allows further development of our company. Now it's good to note that we have sort of been quite busy on the capital expenditure side in the past couple of years in Metso due to sort of expanding our footprint in -- across the globe. And those investments, be it in India or elsewhere in -- especially in consumables, are pretty much sort of behind us. And now we're more in the phase of leveraging and taking the benefits out of the investments made. And of course, that then supports the cash flow generation going forward. And I think, just to name a few of the key KPIs that we will be monitoring and measuring ourselves on -- under this topic, it's really liquidity, our overall debt to EBITDA, but then also our free cash flow generation vis-à-vis, our debt levels. So this, as said, closes the second section on the financial targets of my presentation. And I would now like to move forward to open up a bit our thinking on portfolio and shareholder value creation. Now when looking at portfolio, we've sort of -- I would say, we have this sort of rather simple matrix, but it encompasses pretty much all the elements that we look at. And we've used this to analyze what's the sort of best future for our Recycling business. And we'll also sort of continue to use this as we sort of analyze the Metals business. And what's the sort of best fit and best portfolio for Metso Outotec going forward. Obviously, it's about the addressable market. We are in a growth business, and we want to be there also in the future. So we want to see that there is an addressable market that enables growth for us. We want to be honest to ourselves, look ourselves in the mirror and say that, do we have the capability to win in this market? And then thirdly, of course, they are markets and markets. There has to be a fundamental opportunity to deliver profitable growth in the market for us to be interested. I mean you've seen our financial targets, they are ambitious, and we do need to sort of make sure that our portfolio decisions are coherent with those targets. Now an important additional consideration is obviously synergy. We have created a company that is very focused around its core industries that are truly synergistic amongst each other. And this was one of sort of -- one of the key criterias why we felt that recycling will have a better owner outside of Metso Outotec going forward, that we really can't generate enough synergy from that business vis-à-vis our Aggregates and Minerals Processing businesses. And then, of course, the synergies are -- we can measure them in various ways. It's not always about the same customer, it's about the sort of the technologies, the platforms that we share. But there, as I said, there has to be sufficient synergy that will enable us also then to keep focus in what we do. When we look at shareholder value, I think we're very excited about the fact that we can work on several levers in the coming years. Obviously, it's about growth. We see this is a growing industry, and we certainly think that we can grow in this industry. Obvious priority at the same time is the delivery of the synergies. We know you will be measuring us on our performance on that delivery. Improving profitability. Yes. That's why we have the ambitious targets so that we can measure ourselves against them, and we know you will be measuring us against them as well. At the same time, reduction of volatility. Whilst we are in a cyclical business, and we will continue to be so, it is important that whatever we do with the decisions that we can impact on our portfolio, on our offering and how we do business that they reduce the volatility. And again, there will be some more concrete discussions on this topic later today. We want to be, from a balance sheet point of view, a company that has a solid, strong balance sheet because that enables the further development of the business. And at the same time, that enables us to offer a competitive yield to our shareholders. So these 6 things are the levers that we believe are all relevant and all viable to us at Metso Outotec today and in the future. And coming to the end of my presentation, really, to summarize, we are very excited about the platform that we have created with Metso Outotec. This is an industry that is transforming through consolidation, digitalization and an increased focus on sustainability. And we have a platform that we can deliver results and value to our owners. So thank you on my behalf.

Thank you, Eeva. And now we are ready to kick off the first Q&A session. And there's been many questions sent through the webcast, and I'll be throwing them one by one. I'll start with ones from Klas Bergelind. Klas is asking about portfolio. So question about synergies and potential divestments, what do you think is really core in Metals? And could there be further divestments on top of the recycling and the ones that have been announced already?

Yes. We are, of course, now working on turnaround plan. And I would say that -- and what I mentioned about that the target for Metals businesses in the turnaround is to show that they have potential to improve the profitability to 10% EBITDA level. And that is, of course, one criteria that we look into. Then, of course, another area is really the synergies with the rest of the group. We do have certain internal synergies in-house that we need to critically look at before we decide anything like that in future. Another part is, of course, that what are the synergies that are visible and that we can realize when working with customers. And some of the metals, deliverables, they are at the same-site where our Minerals business is currently present. And they, of course, are the most synergistic ones. But at this moment, I don't want to sort of be more specific. Like I said, I mean, we are currently looking into that when we do have profitability as a main target for any future sort of consideration and the portfolio review synergy is then coming as the second one.

Then Klas continues in terms of integration synergies, what kind of role does the Metals business playing in that?

Metals is, of course, I mean, it's a business that at biggest that peak has been about EUR 500 million over the past couple of years at about EUR 350 million in sales. And that business -- by nature, it's global, but the volumes in local markets are fairly small. For that kind of business to operate globally, it requires sort of bigger umbrella where it is. So Metals can enjoy certain synergies from the rest of the group because of the presence. Then on R&D side, we are sharing certain facilities, certain resources, and those are, of course, the issues that we need to look into when we restructure the group and especially, when we take further portfolio decisions then.

All right. Then we go to a question by Artem Tokarenko of Crédit Suisse. And this is about culture. You talked about culture quite a bit in your presentation. How are the company's cultures different at the moment? And where do you see the major improvement potential?

We've made several surveys on this cultural topic. And while we are a great deal, similar companies, but there are differences. And this difference truly lies, I would say, in sort of Outotec culture more coming from targeting projects, gearing up all the activities on projects, developing engineering into the project things, while Metso has been more on the road of developing products and related services and selling them. And I think those do reflect in the cultures as well. And this is something that we will be working now when we develop the new culture. I know that it represents a certain change, but this is what the integration is. I mean true integration takes place only when we start to work jointly and together towards goals that are common and have the shared values in the company. So this is a change process, but I've been part of it before, and I know that it's a very fruitful once we've gone through that one.

Good stuff. Artem continues. Could you please elaborate on the pathway of growing aftermarket share of sales in Aggregates and Metals towards your targeted levels? Why don't we leave the aggregates part to the Aggregates presentation, but maybe about the Metals aftermarket and growing that.

Yes. I would also say here that currently, the turnaround program is more important than really focusing on just the aftermarket alone. But we need to understand fully what the business is within Metals, including those specific businesses with their aftermarket is, and this is where we will drill down during the coming weeks now.

And maybe to add to that, Pekka. So there is a sort of element of especially modernization and upgrade work in these businesses that we need to sort of look into. But obviously, very similar to what we do on the Minerals Processing side. Maybe perhaps more that type of work than perhaps spares and wears, it's a different type of a process, obviously. But as I said, the sort of -- there are clearly some similarities where we can sort of enjoy some scale.

All right. We take next question from Markus Almerud. What are the revenue assumptions behind your EBITA margin target?

Well, as I tried to illustrate in -- through the graph. So we really haven't sort of started to speculate on when the market recovers. Post the pandemic, we really sort of made a sort of very hard effort to make sure that these are things that are in our control, in our hands. And as I said, I sort of use the reference of the EUR 4.2 billion in sales that we had in 2019, as a sort of, I think, a pretty good sort of normal year indicator pre-COVID. But not the sort of -- not at the top of the cycle, not at the bottom of the cycle, kind of where we are. And again, obviously, sort of our portfolio decisions have some impact on to that number as well. But I think that's a good ballpark. And as I said, sort of, we believe we can deliver 15% with the those volumes. Additional volumes would, of course, be great. Obviously, they can sort of make some actions easier. Then again, typically in a sort of -- at the height of cycle there is perhaps more businesses that -- where the average margin is a bit lower. So it's not sort of one or the other, it's always a mix of elements impacting.

Okay. Next one comes from [ Madi Singh ] of Bank of America, continue with the EBITA margin target. Your graph implies it can be well above 15%, even close to 16%. Why is the target at 15%?

Well, actually, the target is exceeding 15%. So I think we should all be worried if it wasn't sort of -- if the graph didn't show us being clearly above 15%. That's really above 15% over the cycle. So that does mean that we should sort of -- be sort of without giving a specific number, but as said, ahead of 15%.

Manu Rimpelä continues on the margin target. Can you comment on the timing of the business-specific actions to be fully achieved? And how much of these have already been achieved during 2020?

Well, I think there will be more insight into this in the later presentation. So maybe how we can sort of pick up on this if still needed later in the day. But as I said in my presentation, so many of these activities especially in the supply footprint are well advanced, and we have been working on them for a couple of years already. Then there are some areas on the customer interface which are newer. But again, where actions are ongoing and have been ongoing throughout this year. So this is a sort of a progress that is there -- is supporting what we see already today, but will continue to support where we want to sort of take the businesses.

And continuing on the business-specific actions, [ Viktor Cockberry ] asks that, as you mentioned, many of these topics were already discussed in stand-alone Metso. Are these new actions based on a new review of the whole portfolio? And as a result, having more potential now than you did before the merger?

In fact, the -- anything that's relating to the new portfolio, that's what we call synergies. Then we do have the business improvement actions in place in all of our businesses. They are separate to that one. And those were also visible there on as EBITDA bridge, those items.

Then Anssi Raussi from OP Markets asks about a 1.5 degree Celsius target. Is this more about your own operations? Or do you see significant changes coming in product portfolio or something like that?

It includes both, definitely both. I mean, currently, we are already net positive in what we do. We have some great technologies and offerings that we are able to reduce the emissions. And this reduction already on annual level is greater than our own footprint. But we will be working on both. Working on our footprint -- and we will first incentivize our organization to work on a footprint. And then, of course, we will move on towards the handprint side of it and into our offering. But like I said, this area is very rapidly moving at this moment. The measurements are developing. The standards are developing. And therefore, we wanted to put our foot on something that is a bit better in our control at this moment, i.e., our own footprint.

Next one goes to Eeva, and discusses net working capital and CapEx. You mentioned your ambition to gradually reduce working capital and CapEx. Do you have any sort of mid- or long-term targets in relation to sales in mind?

Well, I think when we looked at the sort of CapEx for the coming couple of years, we're more looking at it in absolute numbers. So I would sort of roughly guide on a sort of EUR 80 million or so level. And this really is not to say that we're sort of actively cutting on CapEx. But as I said, it's just a phase where we've sort of come to after a period of -- perhaps with more intensive growth investments on our footprint. And then when it comes to our net working capital. So there, as discussed earlier, I think we are sort of pretty comfortable on how we manage our AR and AP. But really, the sort of inventory part has been already on the Metso side, a clear burden on our returns. And that really sort of resulting from the sort of rather complex supply footprint that we have also on the logistics side. So what we wanted to do is obviously impact the real root cause rather than try to sort of fix something on the financials part that really impact the footprint and the logistics network and how we sort of move, transfer relatively sort of physically big things at the end of the day, in many cases. And this will then all support in sort of enabling us to reduce safety stock, safety buffers because, of course, we cannot compromise availability towards our customers. But as we are more confident in how we run our operations and we have shorter lead times within our sort of own end-to-end that will enable a sort of positive development on that inventory. And that really follows, but it's not sort of -- it's nothing that comes overnight, but it's just a sort of -- a lot of hard work going in many fronts. And so that's something that we're sort of mostly focusing our efforts on. And then I said, because of the sort of current challenges, maybe to speculate or estimate on the sales or the market recovery, I wouldn't maybe want to give a percentage of sales. But as said, in absolute terms, we are working to improve the efficiency of our inventory.

Thank you. Another one for Eeva from Erkki Vesola. What would happen to your financing costs if you fell below investment-grade rating?

Well, I think the quick answer is that it would increase. And then obviously, that's not something where we want to spend money because we feel that we have all the elements in place to be an investment-grade company. Just the fact that we've done 2 rather significant transactions in a short time, acquisition of McCloskey into our Aggregates business and then Metso Outotec. So obviously, as a follow-up of those 2 transactions, we have a bit more debt than we would like to have. And hence, the sort of focus now on sort of getting back to a level where we are comfortable and then that hopefully, the rating agencies will be comfortable as well.

Next question is about acquisitions from Markus Almerud. What are your thoughts on acquisitions? Which areas are you keen to grow? Do you have any obvious gaps in your portfolio at the moment?

I don't see us having really gaps, and that shouldn't be really driving our M&A activity. But then, of course, strengthening our aftermarket capabilities and offerings is clearly an area where we want to be active in future. I think we have shown over the past few years, good, steady development, not only on volume front, but also in margin side in our aftermarket. And that is very encouraging to see. And that, of course, speaks for that there could be more opportunities for us in that area. There are, of course, some individual pieces of equipment that might be of interest and always relevant technologies that we could integrate into our products could be the ones. But I would say, first and foremost, aftermarket.

Thank you. Next one from Antti Suttelin. It appears that the weakness in Metals came as a surprise. What was the cause of this surprise?

We have to admit that it was a surprise. The surprise was probably caused mostly by the COVID situation and the delay in project decisions. That is something which is truly beyond the control that we had and as if we go back, I mean, the COVID started to affect the business end of March, April this year. So that was like second quarter, and it looks like that business would continue on metal side as well, fairly resilient at that moment. But third quarter, it became evident that because any bigger project decisions, they tend to take longer time or new ones are not being prepared at the pace they would at normal times. And that is really the root cause of current situation, where we are. Then, of course, fact of life is that we are involved in Metals in so many different technologies and type of deliveries. And at most time of the cycles, we cannot sort of see steady volume for all of these businesses. And this, of course, sets tough requirements for flexibility within our organization. And I don't feel that we have all that flexibility in place. And therefore, we are now working on turnaround to see that which businesses truly have the potential to be part of the group and reach the target that I set.

Thank you. Next one comes from Magnus Kruber, and it's about 15% margin target. What kind of margin levels do you have in mind for your 3 different segments in order to reach the 15% at the group level?

We are -- internally, I mean, we are working with sort of 15%, 20%, 10%. Aggregates towards 15%, Minerals towards 20%, and Metals, like already said a few times, towards the 10%. So this is the mix of businesses that we have. And if you recall, our Aggregates business is about 25% of the sales, Minerals about, was it 63%, and remaining less than 10% is Metal. So the 15% overall group target or exceeding 15%, it's a mix these volumes and these targets. We see that there are actions in place in Aggregates. There are actions in place in Minerals, and we are working on actions for Metals to get to that 10% level with businesses that we will then continue with.

All right. Next up is [ Damian Decreek ]. How much integrated are you on the production side of different businesses?

There is integration, of course, mainly in the old Metso side, crushers, screens, and that side is integrated. We are in our Minerals business, elsewhere we are mostly outsourced. So therefore, the synergies are not sort of in-house synergies. But of course, in our synergy targets, we do have targets set for our suppliers and supply chain. And that's, of course, when we merge our purchase volumes towards fewer suppliers in future, we will get those benefits. But there's not really, other than crushers, I would say, where we are integrated. Then, of course, if we take a wider view on that one, we have logistics, which is an important part of -- important backbone to run the business. It's primarily our service issue, the logistics that we have in the company. Of course, we supply our capital equipment also through our logistics system. But that's where we have a lot of synergies. We have synergies also in our warehousing, warehousing of the parts that we are also restructuring at this moment, reducing number of stocking locations. And that part where we have most of the synergies. And then, of course, service workforce is being used, used with some limitations. But they are being widely used to serve our customers. So yes, we have integration points here and there, but not so much really in the factory level.

Thank you. Next question is from Tomi Railo, a little bit bigger picture question. Apart from the COVID-19 we are struggling at the moment, what are the biggest risks overall in developing the new company and reaching the targets?

Well, I think an integration of this magnitude is always a challenge. Said, whilst we think we are well prepared, and we have the actions in place, I think, obviously, for any sort of risk question we have to answer that we need to execute, and we need to ensure that we build 1 joint team that can work in a harmonized way. So I'd probably raise that topic. Pekka, anything you want to add?

Yes, I would have spoken about the integration as well. I mean yes, we are taking the sort of performance culture very serious. It is really the strength that we will develop -- and for this company. This is something that we need. And it really means that only through culture, we will be able to act as one organization in a coordinated manner and deliver those things that we have committed to deliver. Yes, external world is full of risks, but I don't think I want to speculate with the next pandemic or anything like that, whilst we're still dealing with the first one.

Okay. We take another one from Klas Bergelind. When you're working towards standardizing the equipment, I would assume this is easier in the product side of the business. But what kind of implication does it have to the project side of the business? And would it be much more difficult there?

I think the opportunity lies in the project side of the business. If you look at what we deliver into our projects, we are working very much with customers to develop the flow sheet, to develop the process, the production process that customers do. Through product development, we can develop key pieces of equipment that go into this flow sheet. And this shall be our focus really to understand that what are the market needs and customer needs and then develop product ranges, all those key pieces of equipment, that will then build the approach. And that's how we want to act. And the product, it means that it does -- it's pre-engineered. It does have a supply chain. It does have the aftermarket offering along with it, and we can build the projects based on these ones. In future, we don't want to be involved in supplying steel and concrete, and that refers to EPC. We won't be fully able to avoid that in all of the cases, but we will be very restrictive, what kind of EPC we target. Already today, most of the projects that we talked, they are, in fact, EPS-type whereas refers to supervision type of activity. We want to concentrate on really those key pieces where we can add most value to our customers.

Next up is Robert Davies from Morgan Stanley. You mentioned the recent headwinds in Recycling and Metals, but was the key driver behind building these businesses in the Metals portfolio to start with? And has the recent disruptions really changed your view on the long-term potential of these businesses or was the inclusion of those discussed at all at the time when merger was planned?

I think this was a merger of 2 companies as they existed and it was not sort of a discussion of pick and choose at that moment. We looked at the bigger picture, of course, at that moment. The issues with Recycling, I think I went them through. I mean, we looked at the synergies, and there were not that many. They had their own distribution, the customer industry is different. Even though, yes, they are part of the Metals value chain, but the connections were very few and very thin synergies in sort of a supply side. And then it leaves for a business like Recycling, only the admin part. And I don't think it's in today's world enough if the admin is the only synergy area. Then in the Metals, the headwinds are really, I mean, I would say, brought with the COVID. And that has, of course, highlighted the issues that there are inside the Metals. And we are currently working on that one, and we'll conclude it very soon what the cause of action there is.

Maybe to finalize to Eeva a question about gross margins. Can you give some kind of direction or level of the gross margin across the different segments, please?

Well, it obviously varies quite a bit because our mix is really quite large. I mean, obviously, gross margin in a project which consists of EUR 100 million of equipment and various other Services to spare part is huge. And I think sort of what we've worked on very much is really to sort of work on the granular level, go to sort of what is the ability of this business to generate margin. And obviously, so the gross margin is super important. Everything we've done in the supply footprint, for instance, supports that. So we're -- we measure it very closely. But rather than sort of giving a lame average that kind of doesn't sort of hit home to anybody. It's really about managing the businesses to their own optimal and then the sort of accepting the fact that what's good and even ambitious to one is kind of a sort of elementary for another business. But that's at the heart of what we want to provide to our customers, it's really an end-to-end offering that we have that all. So that's the sort of complexity we happily manage.

Then Tomi Railo asks about Services profitability. Can you give any ideas about that? And what kind of role does Services business and its profitability play in the 15% margin target to be achieved?

Well, I don't think we want to go to sort of other than the segment reporting level that we have. And I think that sort of customer focus in our segments is a sort of a good indicator for you really to sort of measure our performance. And obviously, aftermarket is hugely important. It is very important in Minerals, but also a significant opportunity in Aggregates. And I think when we sort to those presentations later today, you will kind of hopefully get a bit of sense on what sort of -- what we are driving towards. But absolutely, sort of on the group level, the fact that half of our sales come from Services is very important for profitability, but perhaps even more on stability of earnings and reducing the volatility that we would otherwise face in the industries where we operate in.

Yes. We had a slide there earlier on where we had the aftermarket potential. And even though we are not exactly in those percentages today, as we speak, but they reflect also where we are in relationship to each other. And we can see that Minerals, we have biggest aftermarket business at this moment in terms of -- in relative terms. And then secondly, Aggregates; and thirdly, in Metals. And of course, this is reflected also in segment numbers that we have reported. We, of course, it's not enough for us that we are profitable in service. We also need to be profitable in developing our CapEx part of the business. And this is something which is truly, I mean, when we -- when our aim is to deliver Tier 1 company, Tier 1 companies, they do have profitable CapEx business, equipment business, product business and very profitable service business. So that is the combination that shall go into Tier 1.

All right. Thank you. We'll conclude our first section here. And that was the group level presentation. We'll take a break about 10 minutes. So we'll continue half past the hour, and then we'll take a deep dive into our industries, starting with Aggregates. See you in 10 minutes. [Break]

Welcome back from break and our deep dive into our key industries. We'll begin with Aggregates which will be discussed by Markku Simula, head of Aggregates Equipment; Sami Takaluoma, head of Consumables and Markku Teräsvasara, head of Services. And a couple of words about these three gentlemen. Markku Simula joined Metso almost 30 years ago and he has several management positions in many of our businesses. He started to run or head the Aggregates Equipment 4 years ago. Sami Takaluoma joined Metso 23 years ago. He has also worked across businesses and market areas. And he was appointed head of Consumables 3 years ago. Markku Teräsvasara previously served as President at all the -- President and CEO of Outotec from 2016. And before that, he worked 20 years in Atlas Copco's mining business. So, here they are: Markku Simula, Sami Takaluoma and Markku Teräsvasara.

Hello. Good afternoon. My name is Markku Simula, and I'm really excited to be here together with my colleagues, Markku Teräsvasara and Sami Takaluoma presenting today the Aggregates business. The picture you see right there is actually a good description of Aggregates business, or 1 part of the Aggregates business. It's a big quarry in Brazil, and it's very close to my heart, actually. That's one of the first quarries that I have visited when I started to head the Aggregates business. You may see also the -- on the top corner, the crushing and screening plant, which is then the core of our business. We are delivering, together with my colleagues, we are delivering the equipment to crush the rock, and then spare parts and wear parts in order to keep the plant running. Then I'll start with a little bit of a view on where we are and what do we want to be. So we are the global leader in Aggregates crushing and screening solutions. Our -- we have been growing during the last few years. From '16 to '19, our growth has been really, really solid. Our Aggregate segment has been growing total 14%. And of course, during these years, we have made some acquisitions. We have acquired Jonsson and Cerner, and we have acquired also McCloskey. And if you exclude those acquisitions, our organic growth within the period has been 9%. So solid good growth with this segment. Our aim is that we grow faster than our competitors, and we grow faster than the market, and we are predicting that the market growth -- long-term growth of market is 4% to 6%. So we continuously want to grow faster than that. Profitability. We have -- today, we are not quite where we need to be on profitability level. What Pekka was saying, we are aiming towards 15% EBITDA -- adjusted EBITDA. Today, our situation is, as an aggregate segment is 12% adjusted EBITDA. Then if we look at our market position, where we are. We are #1 globally, and we are #1 in some of the main market areas. We are #1 in North America. We are #1 in Europe. But actually, we are #2 in India and #2 in China. And then in the rest of the world, we are #1. Our aim is to be #1 in all the main market areas and main markets. In products point of view, product point of view, we are #1 in most of our main product categories, not quite all of them, but most of them. We are #1 in crushers. We are #1 in mobile crushers as well as we are #1 in the unit crushers. We are #1 in mobile screens, we are not quite #1 in the unit screens. We are #1 in the crusher wears, and we are #1 in crusher spares. So in most of the product categories, we are already #1, and we aim to continue so, and we aim to even improve our position there. And then we also want to be #1 in customer satisfaction. We are measuring our NPS levels. And today, our gross NPS level is 42%, so there we are on a fairly good level. However, our target is actually on higher levels. So we are aiming to improve from there. Then looking at our customers. So we have 2 customer categories. We have quarry customers and contractor customers. The quarry customers, we offer our unit machines, unit crushers, unit screens, also some systems, and of course, all the related aftermarket Services as well as spare parts and wear parts. Our quarry customers are typically running their investment for a very long time. So the investments are long investments, 20-year periods, 30-year period investments for our customers. Important drivers for the customers is cost per ton. And the product that they are producing is high-quality Aggregates with high-yield from high-efficiency of the site. The customers are typically midsized customers or they might be very, very large customers having multiple quarries across the globe or across any continent in there. Then contractor customers. Typical contractor customers are actually a bit smaller customers. We typically sell more truck-mounted equipment, mobile equipment and, of course, related aftermarket Services and Consumables and wear parts to our contractor customers. The contractor customers are based -- or their work is based on projects. So their machines move a lot. They tend to have a project crush for a few weeks or a couple of months in a single place or one place and then move to the next place to crush some more. So for them, mobility is really important, cost per ton is really important. And many of our contractor customers are in the kind of a cold climate, Northern Hemisphere cold areas. And there the seasonality effect is really significant. Then if we take a look at a little bit the processes or the process, crushing process, how it goes. And very, very brief look at what the products are that we provide to our customers. So the process, you can see in the middle, we asked our portion in our customers' process starts from design. So we are -- we have a lot of capable engineers, a lot of capabilities to help our customers to design good crushing and screening processes for themselves. Then we are in feeding. We make feeders. We are primary -- we make primary crushers, secondary crushers, tertiary crushers, conveyors, screens and washing systems. Then after how customer then has created or made the Aggregates. And maybe later on, there is some need for recycling. And again, in the recycling of aggregates, we are -- we have some products for recycling applications as well. So our offering is complete offering for stationary crushing and screening solution as well as mobile and portable crushing and screening solutions. And then maybe a few words about the Services-related.

Yes. When we look at from a Service point of view, what we already learned is 2 main customer types. On one hand, we have the big quarries or the quarry customers' stationary operation. Actually very similar from a support point of view compared to mines. And then we have our contractors, often very mobile going from one place to another. We also have 2 different means of supporting them. Quarry often typically would be supported directly from our own service team, while contractors, in many cases, are supported by our distributors. So there are different type of customers. There are different service approach, but what is still common for all of them is that service basics never go out of fashion. So our customers, regardless of where they are, they need information. They need parts and they need support, either in terms of someone visiting site or as we have learned lately because of the COVID that we also have to be able to support them remotely. And that is a capability we have developed during the recent years. And I will tell a bit more about that coming forward. So I think we have a good installed base. We have good opportunities to grow. And actually, the means for us to grow is that digitalization is not only helping us to support customers when we have -- when we cannot visit them, but they actually enable much improved support through installed base and particularly in installed base that is not directly supported by us. Because of the remote monitoring, we actually have good knowledge of where they are and how they perform and how we can support them better. So in these words, I think I will more -- as I said, I will, a little bit later, develop this remote support a bit further. Then still one part of the introductory is going through our offering for different customer needs. So we have actually several different product brands in our portfolio. We have our Metso products, which is then, let's say, the core of the offering, which is crushing and screening solutions with life cycle Services. Then in addition to that, about a year ago, almost exactly a year ago, we added into our offering also the McCloskey acquisition. And McCloskey acquisition brought actually 2 brands for us, McCloskey brand as well as Lipmann brand. And we are running those businesses as a separate entities and kind of 2 different channel, 2 different offerings, reaching different customer needs. So with McCloskey, we have mobile crushing and screening and Recycling solutions. And with Lipmann, we have heavy-duty crushing and screening solutions. Then Jonsson, an acquisition that we made in mid of 2018, there, we have a heavy-duty electric crushing and screening solutions for our customers. And then Shaorui with the acronym of SRH, that's our mid-market offering in China. So that's an acquisition where it originally 75% of Shaorui acquired in 2013 and now in fall of 2019, we acquired the remaining 25% of Shaorui. And that's a fit-for-purpose, crushing and screening solutions for our mid-market offering. Addition to that, we also have a range of products that we are offering for -- as an OEM products for other manufacturers. And there is various different products that we offer in there but the important here is that we have actually multiple different channels and multiple different offerings towards our customers' different needs. Then I'll start to talk a little bit about growth trends for the future. And we'll start with China. The picture you see here is a highway built between Macau and Hong Kong. This highway is partly on land, partly on bridges over the sea and partly actually undersea in tunnels. But however, why is this important for this topic? Really highways are actually driving big part of the demand for Aggregates. So they are driving actually the Aggregates needs, our customers' aggregate needs. So it also drives our equipment as well as our Services and Consumables, going forward. Now in China, the amount of road, what is in China -- or amount of expressways in China is about 150,000 kilometers, which is a lot more than in -- for example, in Germany. If take the example of a German autobahns, that's about 13,000 kilometers. So China actually has more than 10x more expressways than autobahns in Germany. But what's actually even more important is that in Germany, the total amount is 13,000 kilometers. But in China, every 18 months, Chinese build more -- as much more expressways into China. So the amount of increasing expressways is similar to autobahns in China -- in Germany. So really, really driving the growth in there. And now if we look at the -- our growth trends in our Aggregates. There are several of them. I'll start with 3 and then a colleague will continue with a couple of others. One important growth trend is middle market. So when China is growing, when India is growing, a lot of the growth is actually happening with the local made, so-called mid-market crushing and screening solutions. And we do see that going forward, mid-market is an important area where we want work to be also. So mid-market actually consists of the mobile equipment for mid-market as well as the stationary crushers for mid-market. And by far, the fastest-growing segment in the whole Aggregates business is actually the mobile machines for mid market. So that's really important focus for us. Then if we look at China overall, China, not only mid-market in China, but there are actually a couple of important trends in China. One is mobile machines, like mentioned in the mid-market side. But then the other one is actually mega quarries, really, really big quarries in China. China is actually today building bigger quarries than any other country in the world. And then India. India has been a growth potential for us for several years, and we do see that the need in India for aggregate is growing and the need for aggregate equipment as well as Services is really growing going forward. Our position is already fairly strong in -- both in China and India, and we have also position in mid-market. But going forward, we do see that all these 3 are really, really significant growth drivers. We have a fantastic factory in India, which we are growing. We have a fantastic couple -- 2 factories in China, which we are growing. And we have a factory -- mid-market factory in China, which we are growing as well. And we do see that our customer needs here are significantly growing. And then, maybe you continue?

Yes, a few more of these trends that are growing in the Aggregates industry. First of all, clearly, digital. That's where the Aggregates industries is going as well. And as we have explained, the Aggregates customers do vary. They have different kind of needs, and so do they have different kind of needs for their digital solutions. So it can start from all the way from creating the process. So process designing tools having helped there, designing their own processes without experts close by. And then you can go further in that route, having connectivity in the machines gives the possibility for remote monitoring. And in cases also that it's required, remote control of the machines. And then, of course, we have capabilities through the digital offering and the connectivity to create a lot of synergies for -- together with us and the customer working with the same supply chain. And of course, e-commerce is an area which is growing in the Aggregates industry as well. Digital is linked to the aftermarket, especially now we saw that very clearly during the COVID-19 area, customers operating and then having need for support and not been able to travel. So the digital applications and tools have been really helpful, connecting the expertise of Metso Outotec and the customers having need for support. And the aftermarket, as such, that is the growing trend in the Aggregates. The same applies, again, we have different kind of customers, and they have different kind of needs. So the aftermarket support and solutions, first of all, just to have the availability, good, reliable availability of the spares and wears and the service and support. But then more and more, there is demand also for engineered Services, creating special wear parts for the specific need that the customers have at that moment. And also important to remember that the customer needs, they do change. They are not always the same. Same customer, depending on the contract situation or aggregate demand situation, they have different needs. And we are ready to respond to those growing needs. And then last one in this slide from the growing brands sustainability. That's ever-increasing at the moment and has been already a good time. If I take a few from that long list, that belongs under the sustainability. So safety that is, of course, the common mutual target that we have as a supplier for the aggregate customers to ensure that our machine equipment, they are designed to be operated safely. They are designed to be serviced safely. And then our aftermarket product as well, they are designed for safety and easy installation. Then we have aggregate production is happening sometimes very close to the residential areas. So dust and noise is critical element in the sustainability offering. And again, there's a solution available for those needs when customers are operating very close for people living and working. And then we have, of course, world going electric, and that also applies then for our Aggregates equipment that we are having electrification as a theme going forward to be able to help our customers in their needs regarding the sustainability. And one area that we see really excited about this is the mid-market, as Markku was explaining the importance of that in the Aggregates industry going forward. And then finding the right aftermarket portfolio for that segment is our focus at the moment. We have already started by utilizing our expertise and skillful engineers in the teams. So for example, in the Consumables side, we have created a product -- new product, which is positioning itself between the so-called premium segment and the mid-market segment so this is a product available for the customers who are in between of these 2 segments. And that's also a growing area of market where the customers are located. And main point here is that understanding the customer needs. In mid-market, the needs are different than they are in the premium segment. But sometimes, you might be surprised that sometimes they are more advanced, the needs. There is even more need for digital solutions in the mid-market. And that is an interesting opportunity for us to move to that direction as well. But of course, it is -- question is about the right products for the right market. So that is the product portfolio issue that we have spare parts, wear parts available for the mid-market needs with a good on time and delivery capability to have them there. And so is the go-to-market model. They are usually very different than the so-called traditional premium segment market. And finding the best possible channel to reach the customers the best sustainable way is the target there. And it goes back to our overall target in our Aggregates business, where the distribution management, we have actually done a step change there, changed the approach. And the same approach can be taken in use here and will be taken use in here in the mid-market segment when going forward.

Pekka, in his presentation, already mentioned our group Tier 1 priorities. And he explained them more in details. Here, we will have a bit closer look at 2 of them, sustainability and customer centricity from the Aggregates business point of view. Improving service levels. We -- this merger of the 2 companies gave us a good opportunity to also review our organization and the way you're working in areas that are not directly or were not directly impacted by the merger and Aggregates was one of them. But of course, we use the opportunity to look at how are we organized and how do we want to work in the future to make sure that we can improve our customer service levels. And at the same time, improve our own performance. And it is about, of course, making sure that we can respond to request faster than we were able to do in the past, regardless of the -- if the request comes by the phone or by the e-mail or by the customer portal. But we need to be able to respond faster but we also have spent -- it was mentioned also in -- I think in both Pekka's and Eeva's presentation, that we have spent a lot of time in optimizing our logistics footprint and warehousing to make sure that the parts availability for our customers and the lead times to deliver them are shorter. And at the same time, of course, that gives benefits from our side. So the customer KPIs. Important. KPIs, availability, reliability and total cost of ownership has been addressed and improved service levels and also commercial excellence to some degree. And digitalization has played an important role in that. As already discussed, when we have a better knowledge on equipment, how they are used when they need service next time through our remote monitoring, it also helps us to be more proactive and supporting our customers. And that is one of the key drivers for service growth in Aggregates going forward. Of course, together with improved service levels, as mentioned, and then also productization. So new service products that will address either scheduled or predictive maintenance needs or in particularly in quarry applications, even life cycle services approach. And sustainability, as mentioned already, very important. Safety always comes first. So we need to have our safe operating procedures, training, well done for our customers, for our people, for our distributors to make sure that service work can be executed safely. But also we have learned that we need to develop equipment that are more sustainable, but also our aftermarket in terms of helping our customers to recycle the spare parts and wear parts is important going forward, and that is something that we can do better today. And of course, as mentioned, digitalization support, we will discuss a bit later.

Good. Our Services, they do provide the best value over the life cycle of the equipment. And we have a very wide portfolio of the Services and products in that segment available. And the key really, again, is to understand that what is the customer need. So the customer KPIs, Markku was explaining in the previous slide, they are one of the drivers when we are selecting the portfolio that best suits for a customer need. And by doing that, we combine from our offering the best and most suitable product combination from the Services portfolio to be able to achieve what are the customer targets. And this is what we call life cycle service contract. And this is an excellent win-win tool in many ways because these contracts, they are long term, and they allow us also understanding better the customer process, the bottlenecks, the possible issues where we can still add more value and, of course, making sure that we deliver our promise regarding this contract. These contracts, we have more than 230 of these globally in Aggregates industry already. They are also very important from the sustainability point of view. Recycling back to our manufacturing units, for example, the wear parts in the Consumables area, it's really important we remove that problem from the customer side. And then we also help the whole sustainability targets to be achieved in the whole globe. One interesting fact maybe to share here, out of these 230 life cycle Services contracts we have globally, 100 of them we have in India. Markku was already explaining the importance of India going forward and also how important the India has been for us until this point. And these 100 contracts in India, it's really almost like a market standard in a very large installed base in India, where customers are getting the best availability of the plants through these contracts. There's spare parts, there's wear parts, there's inspection service and support for the operational issues as well. And one interesting fact more was that during the COVID when it was most harsh in India, there was a complete lockdown. All the sites were closed, including the aggregate sides. And when that lockdown was lifted the first sites up and running in India, they were the sites where they -- customer had a life cycle contract with us because we had also people available to come to the place and restaff again the empty quarry, more or less. And also, great achievements from those Indian contracts have been able to do. One of our customers through more efficiency in own operations have been actually gaining much more contracts, winning contracts because the competitiveness has been improved. So this is just one country, and a lot of these contracts are an example. But this is really adding value to the customer operations, which is our strategic goal.

Then we move towards product development. So a few areas where our product development is specifically serving the sustainability drivers. Two on the bottom, they are more of the customer processes or customers' way of operating. And the 3 on the top is, how do we do it? We'll start with the safety. Safety is obviously very important for us in our own operations, but it's really, really important for our customers in their operations. And the products that we are delivering to our customers, the new products that we are developing we are paying specific attention on safety aspects. Safety of the machine itself, how to run the machine safely, how to repair the machine safely change the wear part, safely, et cetera. So we are paying specific attention in there. Energy efficiency. That's probably the biggest driver on the R&D right now, the biggest money spent on R&D right now. We are developing significant amount of e-versions of our mobile machines today. And going forward, there will be a lot of lot of e-versions of our products loans. We already have an extensive offering for e-versions, but we are even building more. Energy efficiency is also very important for the traditional diesel machines. So for example, a machine delivered 10 years ago, or a machine delivered today, it's roughly 1/2 of the emissions that are coming from the machine today compared to the one 10 years ago. Then dust and noise emissions. Our customers, as already explained earlier, our customers are often operating in environment which is close to habitants. And then it's really, really important for permissions also for kind of environmental kind of good feeling of the people around the dust and noise emissions. And we are continuously developing new models, new ways of making dust and noise or reduce the dust and noise emissions. Manufactured sand. This is an interesting trend in many countries. Our customers -- many of our customers in the past, tens of years of -- or decades or hundreds of years have been using river sand. And in many places, river sand is today getting banned. And instead of using river sand, our customers are actually crushing rock and making sand, manufactured sand as it's called. And we are making machines to make manufactured sand. We are making efficient machines to make manufactured sand. And then recycled aggregates. I explained already before, but one -- once the road is built, 10 years later, it will be turned down or the building will be turned down and demolished and the aggregates will be recycled. And we have many machines for recycling the aggregates as well.

Maybe I add a little bit for the energy efficiency. Actually, on top of those actions that Markku was mentioning, the crusher wear part design plays an important role as well, how much the energy is consumed. So same lifetime, same capacity, true, but with the correct design, the energy required to do the crushing is less. So this is also one of the sustainability drivers in the product development.

[ True on. ] Then we'll go towards digitalization.

Very good. Thank you. Since already some time all the Metso mobile crushing equipment has been equipped with remote monitoring capability. And today, we have some 1,200 machines monitored continuously. And of course, the number is increasing as we deliver new equipment. And this is giving us very good insight on how the equipment is used and how they are performing if there are alarms coming which needs attention or when is the right time to do your next service visit and what parts and consumables will be needed. So from a service planning point of view, an important tool and definitely something that will help us to grow our aftermarket business. The other thing is that we have a customer portal where our customers can see the equipments, you can see the, let's say, parts catalogs, service manuals. And they can also place orders for parts available for 24/7 regardless of where you are as long as you have an internet connection. And then what we are adding on top of that during the fourth quarter is that we will have -- and that is something that, of course, COVID brought very strongly is that we will have a 24/7 support from our side. Remember that information is good to have available, but someone actually -- sometimes you need support and someone who need the person to tell you what is needed. And that we will roll out global tool and global processes for that during fourth quarter to make sure that we can help our customers in all conditions. And this is definitely an area which help us to keep track on what's going on, but also will be a growth generator going forward.

Thank you. Then from growth drivers, we move to profitability drivers. So as has been already discussed in Pekka's and Eeva's presentation and in many of the questions, actually, one of the big topics is that how are we actually going to make the profit improvement, and we are actually in process of making a significant profitability improvement in the Aggregates business. Some topics listed here for what we'll go through briefly. First, on product costs. As I already mentioned, we have a tremendous focus on eastern markets, and we already have several factories in China and India, and we have plenty of possibilities of moving products from our higher-cost areas to lower-cost areas in order to serve the customers, which we are going to serve in the East. So production shift is happening, and it's actually very significant. We have a significant part of our production which is moving towards East. Sourcing initiatives. Also discussed earlier, a little bit. We have a lot of possibilities of combining our offering. For example, today, we have our McCloskey offering and we have our Metso product offering. And we are manufacturing similar type of machines in 2 different offerings. And there are many, many parts that are fairly similar, like engines, for example, or the crusher itself. There are many parts that are very similar. And we are -- we can utilize that purchasing power and in order to get better agreements with our suppliers and get the cost -- drive the cost down. Then we are also utilizing technologies across the brands and utilizing the economies of scale. So for example, crushers, when McCloskey earlier was using different crushers. Today, they are using Metso crushers, and that's actually bringing us a lot of bottom line. And similarly, many other products, we were -- we have been using. Cross utilizing the products, cross utilizing the technologies from brand to another. Then on sales and distribution. There, it's partly about cost management, but it's also a lot about the -- driving the revenues, driving the price. On the first, we have a significant refocus on distribution management ongoing. So from day 1, we have actually implemented a new market area organization. And at the same time, we have significantly changed also our distribution focus, and we are driving with our equipment as well as our services, our spare parts and ware parts and looking really how to drive growth through our distribution network, utilizing the digital tools as my colleague just was explaining. Then we also have been streamlining our sales channels. So when Pekka explained how we used to have quite a few market areas in Metso and some -- maybe not quite as many -- but many in Outotec as well. And today, we have less than that. And at the same time, we have also been streamlining the cost of our sales channel. Then commercial excellence there. There is many topics there, but one of the important things is actually price and analyzing, understanding how do we price in different places, and how to get the value that we provide to our customer priced into the machine, but more -- and even more importantly, into the parts and into the ware parts that we are providing to our customers. Then a third area, fixed cost at main locations. As was already explained, there is a drive towards fewer locations in our whole organization. We are streamlining support organizations, logistic organization, administration organization. But then as an addition, maybe something that I'd like to point out that when we are driving towards East, we are not driving only our sales and factories towards East, but we are also driving our engineering towards East in order to have more local development of new products, but at the same time, we are actually saving cost. So what we are doing is that we are reducing our external engineering that we are using in Europe, and we are employing more engineers in India and in China. We've been doing that already for the last few years, but we will even ramp up the speed going forward. So the aim is that actually our engineering hours will significantly increase, but at the same time, the cost of engineering will go down. So we get more hours, but with a less, lower total cost, and our aim is actually that we are looking to have half of our own engineering in India and China in the next couple of years. Then maybe if you continue.

Yes. I think a good list already, but maybe elaborate a few more from the aftermarket side. So of course, the product cost, that's already heavily in our focus and by engineering capabilities to design the consumable products, for example, so that we can reduce the costs. And in the consumables, we have also in-house manufacturing. We have our foundries and the factories for the screening media. So working relentlessly with the programs to improve the efficiency in our own locations, is driving down the product costs going forward. And then more volume, the better position you have to discuss with your suppliers and the procurement actions are, of course, ongoing in all fronts of the company as we speak. And then from the sales point of view, Markku described, the distribution is a potential for us for the growth and then also from the SG&A or cost point of view as well, that is the new thing now implemented from the summer onwards. Markku, something more to add?

Yes, maybe from my side, to highlight the logistics improvement that we are doing and consolidating our supplier base. It has been mentioned a few times, but when we have been looking our material stream, where are the suppliers? Where are the customers? How do we route our parts, like the spare parts or ware parts, from supplier to customer? We see that we sometimes use very complicated route, and we also have more handovers than needed. And that optimization includes significant improvement potential. And I think the beauty of it is that it benefits customer in terms of shorter lead times and improved availability, but it also improves our performance in terms of better supply chain efficiency. Lead time, of course, is equal to working capital, and you have lower transportation costs, lower level of obsolescence and slow-moving inventory. And not the least, but it, of course, as you transport less, it also offers significant and environmental impact or positive impact.

So from -- as a summary, we are continuing our profitable growth. We have a long list of growth actions ongoing. We have trends that we are following. We have trends that are supporting our growth, and I think we are really well-capturing all of those main trends. We want to utilize our multichannel approach, multibrand approach to gain all the different customer segments and gain growth in all the different customer segments. We are growing in our mid-market equipment, and we are finding new ways of growing in the aftermarket of mid-market. We are driving towards East. We have an internal acronym that we are using, Go East, which well describes that we are looking for the growth in East, we are looking for the footprint in East, but we are also looking for capabilities, engineering capabilities in East. We discussed already in several slides about digital, digital offering and the potential that is there. We are driving towards digital tools going forward, and we want to provide sustainable solutions to all our customer segments. Then on profitability improvements, we have a very solid plan for our profitability improvement. I have no doubt that we are going to make the improvements that we are targeting. We have a solid follow-up -- continued solid follow-up of all the actions that are there and the list of actions is actually very long. What we saw on the previous slide was only kind of showing the flavor of what is in there, but it's actually a very long list of actions that we are doing in order to improve our profitability. But the terms or the areas that we are working are the product costs, optimizing sales and distribution, streamlining fixed cost and improving efficiency in logistics. And then, of course, in the graph on the side, you can see that our growth has been very, very solid, and our profitability has been on an improving trend. However, on the -- during this year, especially the aggregates capital equipment has been suffering from COVID. And there, you can see a little bit of a decline in the profitability. But going forward, we have our actions in place in order to go for higher levels. Thank you.

All right. Markku T., Markku S., Sami, thanks for your presentation. We have received a long list of questions, and I'll be throwing them at you right now. We'll start with a question from Magnus Kruber. Markku S., "What assumptions are behind your 4% to 6% market growth figure?"

We are looking -- that's a long-term growth figure, 4% to 6%. So of course, this year, what happens at the market or has been happening at the market this year is that the market has been actually going down rather significantly, but then if we look at the history, history has proven that every time there is a rapid significant drop in our market, in the construction market or our crushing and screening market, every time the bounce back has been fairly rapid as well. And then very quickly after that, we are back in the kind of similar growth rates. So what's behind with the percentage itself is looking at the -- kind of how the GDP is developing and then how the urbanization is developing and then drawing the conclusions out of that. And then also looking at how the construction industry overall is developing and making the conclusions out of that. There is no exact way of predicting our growth rate, but we are -- that's our estimate, 4% to 6%.

Okay. Continuing from the growth and profitability targets, a question from [ Johan Sipola ]. "Can you give some insight on what role acquisitions do play in you meeting those targets?"

The -- our growth target is to grow faster than the competitors and grow faster than the market. And we've proven in the past that we have been growing faster than the competitors and faster than the market. And we aim to continue. So we've done it organically, and we've done it even more so when adding to acquisitions on top of that. So I'm sure that if there are good potential opportunities going forward. We will take a close look at those as well going forward.

Maybe continuing from the -- Magnus' question about the market growth, this one is from Artem Tokarenko. "What has caused the market slowdown over the last 6 months other than COVID? Are there other reasons behind it?"

The market actually started to slow down a little bit already before COVID. So in the kind of late 2019, early 2020, we did see that this market -- or the growth started to slow down a little bit already at that time. And I guess there was many drivers related to that, but general construction industry drivers were behind that, but that did start already before COVID. Then when the COVID hit towards the end of March, we did see a very, very rapid drop in our orders, especially in the capital equipment. Our services and consumables actually were not affected quite as much as the capital equipment -- or not nearly as much as the capital equipment.

Okay. Thank you. Artem continues about McCloskey and service revenue. "McCloskey has quite a low level of services at the moment. What is the reason behind this? And what are the opportunities in growing McCloskey services?"

There are several reasons behind that. First of all, the -- traditionally, the way that we are looking at our service opportunity, the biggest service opportunity is on crushers. So the more crushers you sell, the more service opportunities you will have. And if you look at the historical installed base of McCloskey, which has been actually developing quite rapidly, so the old installed base is actually fairly small. So having a small old installed base kind of has smaller potential for service revenues, but then the other part is that the older installed base actually doesn't have any crushers. McCloskey was more in mobile screens in their earlier history. And so the old crusher installed base is not there. Now today, McCloskey is more and more getting into crusher sales as well, mobile crusher sales. And of course, now utilizing our Metso Outotec crushers. And the -- with those crushers, we are creating a new installed base, which will create us also new opportunities for services going forward. But of course, it will take some time before that installed base actually builds up.

Thank you. Next one from Klas Bergelind, continuing on the services in aggregate, so maybe to other Markku and Sami. "You highlight material upside potential in services in aggregates through increased connectivity, focusing more on total cost of ownership, et cetera. But typically, quarries and contractors spend less money on services than mining companies, and they may -- might have lower margins. Are they ready to pay up for this new offering you have?"

I think, of course, the offering, first of all, needs to be competitive. So we are doing a lot of effort to improve our service levels and also improve the efficiency. But even for them, it boils down to availability, which keeps the equipment running. It boils down to total cost of operation, and that is the level where we want to help them to perform with. And I think in the past, of course, one part is coming from not really having full knowledge on exactly all the equipment that we have developed, where they are and how they have used, which you can then proactively use to even give them an opportunity -- or give our service an opportunity to improve. So it will bring up -- bring opportunities and also help us to build it gradually. But of course, at the end of the day, customer will only choose if they see that there is added value to use Metso Outotec and that we are committed to deliver.

Good stuff. Question from [ Hans Rossi ] of OP Markets. This is about China. "What is the share of China in aggregate sales and how the share has developed in recent years? And maybe you can elaborate from both equipment and services side."

The share of China has been increasing over the years. And this year, it's actually exceptionally high because if we look at the development during the COVID prices in many parts of the world, the business has been struggling, but actually, China is one of the few areas where the aggregates demand has been increasing during this time. The share of China today is significant for us. And I believe that it will be growing going forward.

In the aftermarket side, the -- I think that the opportunities are great that we have already communicated. And currently, the share is one thing, but the growth rate, what we have seen in our business in China, that is really good. So we have a good progress already ongoing into China when it comes to the aftermarket of the aggregates. And these things discussed today are very much geared up for continuing that for the next years to come.

Okay. I'll combine here a couple of questions. And these are about competitive landscape and margin and differences between different markets. So how do competition and margins differ in Europe and U.S. compared to India and China?

That's a big question. Many, many questions actually there. Competition first, maybe the -- maybe I'll start with the equipment and then the colleagues can maybe add on the service side. But on equipment, the competition in North America, there we have, let's say, the traditional competitors, western competitors that are present in North America. Recently, with the acquisition of McCloskey, I think we have just significantly increased our market share in North America, and we are clearly #1 in North America right now. The competitors, however, they are good competitors, and we are fiercely competing continuously in North America. Our price levels in North America tend to be fairly good. So the -- I mean it's not that fiercely maybe, in that sense, but the price levels in North America tend to be fairly good. If we then look at the European situation. The competition in Europe is actually -- we have more competitors in Europe. There is a lot of smaller companies that are competing with us in Europe. And the, let's say, the margin levels or price levels in Europe tend to be a bit lower than they are in Northern America. Then in China, China is actually a much more complex area. We have -- first of all, we have our premium offering there, and we have our mid-market offering. If I look at the whole situation in China, I would say that there is really a lot of competitors. However, in the end, when a single deal is on the table, there isn't that many players around that specific deal. So even though there's really a lot of competitors in a specific deal, there is actually a fairly limited amount of competitors. And we tend to have a -- reasonably good margin levels also in China. Then India, our fourth kind of main market. India, there is local competitors as well as international competitors and the competitive situation in India is actually fairly tough. So in terms of margin levels, it tends to be tougher in India than it is in most of the other market areas. However, then, of course, our cost level in India is also very, very low, and we have a tremendous operation in India, where we are very cost competitively also producing equipment.

In the aftermarket, there are not many truly global competitors like Metso Outotec is. And that means that the competition coming in different regions. It's more regional and the same kind of pattern. We can see, if I compare to U.S. and Europe, so the margins are slightly better in the U.S. And then the interesting part is that -- especially in the consumables, quite a lot also in the spare parts, even the competitors might be regional in U.S. or in Europe. The sourcing is coming from the Asia. So putting that into the picture then and when I look -- our margins, aftermarket margins coming from the China and India and compare them to the Europe and U.S., so there is nothing wrong. That's why we are investing for the growth in China and India because we are already in a good path when it comes to the margins in these areas as well. Coming from many, many factors, of course, then the logistic cost is different and even the price point might be lower in some cases.

And maybe add to that from my side, of course, that the customers are not the same even in the markets that we talk about or what -- there is a big quarry consolidation ongoing in -- for example, in China. And quarries are getting really big and having the same KPIs that you would expect, for example, a big quarry in Europe has. And then also, a little bit touch on what I already said before that we -- of course, the first requirement was to be successful is that we are present. Customers, particularly small contractors, they -- the cash flow requires that they get the part when they need it, and you need to be there. And at least you need to be able to anticipate when they need it to get the chance to quote. And you can say that, yes, in China, maybe customers are more resourceful, and they might have more [ after this ]. But even there, the presence and having the right offering is definitely important.

All right. Thank you. SEB's Antti Kansanen has a couple of questions about mid-market. "First, how does the growth of mid-market impact your profitability?"

The -- so I assume that the assumption on -- behind the question is that the profitability of the mid-market would be lower than the profitability of our premium product. But actually, the -- that's not quite the case. So today, our mid-market profitability is on equal level -- or actually, today, right now, in the middle of COVID situation, we actually have even better profitability on the mid-market side than we have on our premium. So it's improving.

Then the follow-up, "Do you currently have full scope of relevant offering with the right price point to address the market? Or would M&A make sense in the mid-market?"

The -- on -- mid-market is really, really wide, and there is so many different kind of subsegments of mid-market. If we look at the China mid-market and the exports out from China, there are -- there is hundreds of players there and -- even within China, our mid-market position is actually fairly strong in the southern parts of China, and China is a really big country. And many of the players actually have fairly local presence, so I could imagine that there might be potential that we could do it in there going forward, but we'll see. Then on a completely other story is actually India. I'm looking at the India situation. And there, the competitive situation is maybe not quite as widespread as it is in China. But then our current position in India mid-market is actually very low, almost nothing, so that's another potential opportunity. And then the exports of mid-markets that is definitely a focus today already, but that could be a kind of add-on focus for -- going forward to gain more growth.

Third question from Antti is about McCloskey. "The acquisition was closed about a year ago and pretty quickly after that, COVID hit us. What kind of implications that has had on the synergy work in McCloskey and how you see it going forward?"

We were -- in McCloskey acquisition, we were lucky enough to have all the main synergy streams on -- good in speed before the COVID hit. So actually, we were already in good speed on the integration of McCloskey. We are actually not making a full integration into our Metso Outotec organization. We have a limited integration, which is also helping in this COVID situation. And I guess the biggest impact really has been more on the top line and then the kind of temporary cost reductions that we've been doing because of that, rather than on the integration side.

Then a question from Antti Suttelin from Danske Bank. "Aggregates' profitability improvement will be less impacted from merger synergies since Outotec didn't have aggregates. Why has Metso's Aggregates margin been below Sandvik's and Terex Materials Processing margins, and how the catch-up would happen?"