CEO's message - Confident and excited about the future
Our customers clearly have a more positive market outlook than a year ago. Recovery started in the second half of 2016 and continued throughout 2017. As demand for metals grows, new greenfield investments will start taking place, in addition to brownfield projects on existing sites. For example, the electric car market and renewable energy generation and storage increase the demand for lithium, nickel and cobalt as well as copper. The need for aluminum grows and the zinc market is active. Stainless steel use supports the production of ferrochrome.
Customers seek resource efficiency
I met dozens of our customers during the year. The availability and cost of energy, water as a critical resource and digitalization are crucial for them. Elimination of harmful substances and cutting emissions are also high on the agenda. Customers strive to extract all valuable minerals from mined ores. The same applies to materials already extracted. This is sustainability in action: getting the best possible result with the smallest environmental impact.
The feedback Outotec receives is consistent; customers highly appreciate Outotec’s leading technologies and expertise in minerals and metals processing. The more demanding the mineral, the more likely that we are involved, lithium being one example of many. Where we need to improve is in customer dialogue, in which a more proactive approach is sought. It is up to us to take initiative in going through processes together and suggesting improvements for customers.
New strategy shows direction for 2018–2020
Outotec aims to provide customers with leading technologies, superior customer service and excellent execution. Our new strategy builds on our mission, ‘Sustainable use of Earth’s natural resources’. Our business focuses on the entire value chain, from ore to metals, throughout the customers’ plant life cycle. The equipment and plant business is strongly complemented by an increasing share of services, which brings stability to our business.
We have ambitious profitability and growth targets for delivering value to investors, who have shown patience during the recent difficult years. Global megatrends provide business opportunities, as Outotec has solutions for improving process efficiency and helps customers to choose the best, sustainable technology. We provide solutions that support water management as well as circular economy.
Refining data fuels digitalization
As digitalization advances, the significance of collecting and analyzing data becomes more and more evident. Virtual models are increasingly developed and applied to process optimization and fault detection. The Outotec virtual plant is a model or simulation that can be used to simulate the behavior of a real plant. The main goals of simulation-based digital products are increased productivity and availability, reduced energy consumption and sufficient product quality.
Digitalization of smelting processes improves recovery while enhancing sustainability and safety. When high risk manual tasks are eliminated in a smelter and decisions are based on reliable data, process stability improves and emissions decrease.
In November, the Junction 2017, Europe’s biggest hackathon took place in Espoo, Finland. It gave young developers, designers and entrepreneurs a chance to show their innovation skills. Outotec was one of the partners of the event, with two challenges: a sustainability challenge and a service challenge.
The benefits of digitalization are highlighted in the case stories of this report.
Great leap taken in employee engagement
We want to offer our own employees an inspiring work environment. Our 2017 employee survey showed 18%-points improvement of the engagement index from 2016 and we are well on track towards our long-term targets. Based on the results, senior leadership has succeeded in communicating a motivating future vision. People are proud to work for the company and they feel that their job is challenging and interesting. The link between one’s own work and Outotec’s objectives is clearer, as are roles and responsibilities.
Good results have been reached through collaboration. People provided extremely valuable input for the whole strategy process. We paid special attention on clarity of roles and on communicating our strategy to all employees in cross-functional workshops. We completed a global leadership program for 100 leaders in 2017. In addition, local leadership programs were developed in each market area. Sales leadership, value selling and services trainings were also developed to enhance our competences in the customer interface.
On the other hand, we have not yet reached our diversity goals. Those goals include, for example, increasing the share of women in management positions. In safety, we have an ambitious ultimate target of zero accidents. The key indicator, lost time injury rate, improved slightly in 2017.
UN’s goals integrated into our Sustainability Agenda
We have defined our most significant impacts with regard to the UN Sustainable Development Goals and integrated the SDGs into our Sustainability Agenda. The five most important SDGs to Outotec’s operations and sustainability work are: Good health and well-being; Climate action; Decent work and economic growth; Responsible consumption and production; Quality education.
Outotec is committed to supporting and implementing the principles of the UN Global Compact concerning human rights, working life, environmental affairs, and anti-corruption. Likewise, we respect The Universal Declaration of Human Rights. In 2017 Outotec carried out a human rights assessment. We did not find any significant risks or negative impacts of our business.
Inspiring and fruitful collaboration
Outotec achieved the EcoVadis Gold certification for its corporate responsibility practices in August 2017. The company ranked in the top 5% suppliers in its field. The Gold certification indicates a strong commitment to responsible sourcing practices. At the beginning of 2018, Outotec was ranked 5th in the Global 100 Index of the most sustainable companies in the world. Being included in the Index for six consecutive years is a great recognition to our work.
These acknowledgements and the feedback from our personnel, investors, customers and partners tell us that we are moving in the right direction. Thank you so much for the inspiring and fruitful collaboration. Together, we continue developing resource-efficient solutions for the sustainable use of natural resources.