Metso’s new football-loving CEO and president, Nico Delvaux, talks to Aggregates Business editor Guy Woodford about why more equipment innovation, more empowered customer distribution channels, and leaner and more agile business practices represent the perfect hat-trick for ensuring the Finnish aggregates and mining equipment giant’s long-term success – in our sister title Aggregates Business.
Nico Delvaux talks passionately about his days as a “fast, hard yet fair” defender during football matches with friends and work colleagues. A broken leg sustained during a works’ game six years ago may have ended his career on the pitch, but off it the 51-year-old Belgian national still loves to watch his beloved Anderlecht and other leading European teams with his long-time football pals.
Running has replaced football as the perfect way for Delvaux to unwind away from the demands of his highly successful career to date within the construction, aggregates and mining equipment sectors. It also enables him to think about how to approach his work. And Delvaux, a fluent French, Dutch, German, Italian and English speaker, is extremely clear on his immediate priorities as Metso CEO and president. “We will significantly increase our R&D spend. We definitely have the ambition to make the difference for our customers through innovation and new product development, and we will come to market more regularly with updates from all our product families.”
Delvaux, who took up his prized dual role in July 2017, says the CONEXPO/CON-AGG 2017 Las Vegas-launched MX cone crusher, based on patented Multi-Action crushing technology which combines the piston and rotating bowl into a single crusher, is the kind of innovation he wants Metso to be producing more frequently.
“It’s a quantum leap in technology within the crushing sector. It is at the core of what we do. It offers fantastic advantages for our customers when it comes to productivity, safety and ease of servicing.”
The up to 600tonnes/hour MX4 – the first MX series crusher launched onto the global market – is said to offer big profitability gains by cutting operational costs by 10% and enabling 10% more uptime compared to traditional cone crushers.
Nico Delvaux says Metso’s new Lokotrack Urban series mobile crushing plants are an example of how the company is contributing to a greener, more community-minded global construction sector
Delvaux confirms Metso will be launching one larger and one smaller model than the MX4 capacity MX series crusher in the next two years, as the company harvests the fruits of its ramped up R&D.
Another key element of Delvaux’s blueprint for Metso’s future success is reconfiguring Metso to operate under seven dedicated business areas, instead of three, from 1 January 2018. The heads of the business areas will report to Delvaux and are members of his executive team.
“Rather than a complex matrix structure that was rather vertically organised, we will have business areas with their own dedicated leadership and management teams covering Mining Equipment, Aggregates Equipment, Minerals Services, Minerals Consumables, Recycling, Pumps and Valves,” Delvaux explains. “This will ensure more focus, dedication, accountability and agility within each of these areas, which are all very different. Agility is very important today in global markets where we have tail winds. Our ambition should be not only to accelerate our growth, but, when the markets turn, to have the agility to react fast, whether it be within our Mining business, Aggregates business or another business area.
“All our new seven business areas cover businesses we want to be in for the long term, and we will be investing more, including in the Aggregates business area. The head of that business area, Markku Simula, and his management team have devised a nice new product development pipeline. Money is not a problem. We have it to spend as we have a strong balance sheet. We have projects that will give us a good return on investment.
“I also want to be putting decisions closer to the customer, empowering our distribution and sales centres. We believe the person closest to the customer’s problem is best placed to solving it.”
From his predecessor as Metso CEO and president, Matti Kähkönen, Delvaux has inherited a premium minerals and flow control solutions company that is hungry to embrace new commercial opportunities. A three-year global market downturn led to an essential cost-cutting programme, resulting in Metso losing 20% of its workforce.
“I thought I may come into something of a depressed atmosphere, but that’s not been the case at all. There are a lot of good people here who are proud to work for Metso and are really motivated and willing to go the extra mile. There are people with 20, 30, 40 years’ experience with Metso, and good young people joining the company with specific engineering and other knowledge from schools and universities. That mixture of experience and knowledge is important.”
Evidence of an improved global market in aggregates and mining can be seen in Metso’s latest trading figures for Q3 2017. The company saw its order intake increase by 30% year-on-year to total €817 million in Q3 2017. Metso saw its quarterly services’ orders also rise 15% to €486 million, while equipment sales increased 5% to €673 million, and services’ sales increased 7% to €440 million. Metso’s operating profit (EBIT) in Q3 2017 totalled €39.4 million.
Giving greater insight into his first few months as Metso CEO and president, Delvaux says: “I’ve been travelling intensively, visiting customers, distributors and our own people at our many global sites. I had a week in China, a week in India, a week in Peru, a week in Brazil, then I’ve visited all our facilities in Finland and in Sweden, and travelled to our base in Mâcon, France.
“I had a bit of an idea before of Metso and a lot of good things have been confirmed during my travels. Metso is definitely a very strong brand name not only in aggregates, but in mining, recycling and flow control equipment and services. We are recognised as one of the leaders in our markets and often for our technology leadership.”
Delvaux joined Metso this summer after 26 highly successful years at Atlas Copco, another major global market construction, mining and aggregates equipment manufacturer. His last senior executive role prior to joining Metso was three years as senior executive vice president for Atlas Copco AB and business area president for Compressor Technique in Antwerp, Belgium, responsible for the global compressed air business of the Atlas Copco Group. Prior to that, Delvaux spent three years as business area president for Construction Technique in Shanghai, China. His many years at Atlas Copco also included executive roles based in the U.S. (Houston), Canada (Montreal), and Italy (Vicenza).
“I had 23 years in the compressors side of Atlas Copco’s business, and three years creating and then heading the Construction Technique business in Shanghai. From my compressors work I had a lot of experience on the construction side, with generators and portable compressors.
“Living and working in Shanghai, Houston, Montreal, Vicenza and now, of course, in Helsinki, has given me a lot of experience of Asia, North America and Europe – three key global markets. In my previous work, I’ve sold both direct and via distributors. So I have thorough knowledge of channel management. I also created the first Service division at Atlas Copco, and I know how important service is to Metso too.”
Asked about his management style, Delvaux responds: “I think I have an inclusive style. I want to work with people and achieve things together. I want to be close to the operations. I don’t want to manage from Helsinki head office. I want to be with customers, dealers and suppliers. People say I’m fast, hard yet fair – just like how I was as a football player!”
Having established Metso’s seven new business areas, Delvaux is open to adding more expertise to the company, either through acquisition or strategic partnership. “Our first priority is to accelerate in a profitable way our organic growth across the seven business areas. There is still good room to strengthen our position across all markets and products. There are good potential acquisitions within the core or adjacent to the core areas of our businesses, on the equipment and service side.”
On 1 November 2017 Metso announced the acquisition of Australia-based wear lining solutions provider WEARX. Speaking at the time, Delvaux described the acquisition of the firm, whose client base includes many major mining companies, as a “good strategic fit for Metso, supporting our profitable growth strategy.”
A slow but consistent rise in the price of commodities will also help Metso’s mining business. “The biggest growth will be found here, as shown in our Q3 2017 results. However, the aggregates global business market is good all over. Europe and North America is good, and India is very good. Markets like India and China will continue to grow long-term due to their big infrastructure needs. Urbanisation will continue. The world will need roads and buildings, and it is looking to build these in a more environmentally friendly way: less noise, more onsite recycling, for example. This is good news for companies like Metso.”
Delvaux points to Metso’s new Lokotrack Urban series mobile crushing plants, offering significant noise protection and reduced dust emission, as an example of how the company is keen to support a greener and more community-minded global construction industry.
As he lays the foundations for Metso’s long-term success, how will Delvaux judge his own success as CEO and president? “I can say what I want but my bosses will judge me long-term on Metso’s share price evolution. However, saying that, I want, and Metso as a whole, wants the company to to be seen as an innovation leader, to have a greater percentage of business generated by new products. I also want our Service business to be seen as a differentiator in the market – so we are known for providing a complete customer solution over the lifetime of the equipment. If we achieve these things, our share price will go up anyway.”