Metso's Mining Momentum: Aftermarket Strength, Order Boom, and the Backlog Enigma

Metso Oyj's second-quarter results (period 20263) delivered a decisive break from the cautious tone of prior calls. Orders surged 18% (16% organic in constant currencies), sales rose 6%, and adjusted EBITA climbed to EUR 221 million with a margin of 16.6%. The driver was unmistakably the Minerals segment, where equipment orders jumped 50% and aftermarket orders grew 13%. As CEO Sami Takaluoma put it in his opening remarks:

The key message today is that the second quarter was a strong quarter for Metso. Orders, sales, profitability all improved year-on-year, and our cash generation also strengthened.

A Broad-Based Mining Surge

The order growth was not a one-off large project but a Orders increased across the board, with crushing and grinding solutions leading the way. CFO Pasi Kyckling noted, “In Minerals, equipment orders increased by 50%, driven specifically by grinding and crushing solutions. North America performed strongly from a market area point of view.” — Pasi Kyckling, CFO · 2026-07-24 The company also highlighted a strong “base business” of orders below EUR 5 million, which contributed to the broad-based strength. This aligns with the global theme of a robust mining capex cycle, with peers like Sandvik also reporting strong aftermarket and equipment demand.

Aftermarket Engine and Margin Expansion

Minerals aftermarket sales grew 14% and now represent 68% of segment sales, a mix shift that underpinned the segment margin improvement to 18.3% (up nearly 200 basis points year-on-year). The cash conversion rate hit 98% on a rolling 12-month basis, and operating cash flow strengthened to EUR 206 million. Management attributes the margin gains to higher volumes, favorable mix, and disciplined execution, while emphasizing that this is a normalization rather than an outlier. As Pasi explained, “We are not thinking that this mix was extraordinarily good, but rather sort of normal. And the other thing that impacted is simply volumes… our facilities are running full, and that is good for our cost performance.” — Pasi Kyckling, CFO · 2026-07-24

The Backlog Puzzle

Despite the strong order intake, analysts flagged a discrepancy between the reported backlog increase and the implied conversion of orders to revenue. Klas Bergelind from Citi pressed the team on why backlog grew only EUR 100 million since December, despite EUR 300 million more in orders versus revenue over the same period. Management's response was candid: “We need to get back to you on this backlog development because there is clearly a discontinuation… we'll come back to you.” — Pasi Kyckling, CFO · 2026-07-24 They confirmed there were no major cancellations, only one customer bankruptcy case affecting a few tens of millions. This transparency is reassuring, but the unexplained gap remains a legitimate concern for investors trying to model future revenue.

Investing for the Future, Staying Cautious on Outlook

Metso is investing in capacity and service centers in regions with high growth potential, such as Argentina, Arizona, and Western Canada. These moves are clearly tied to anticipated large copper and gold projects. CEO Sami Takaluoma said, “Obviously, we wouldn't be doing investments in this scale if we wouldn't be knowing that there's going to be a good usage of those resources and facilities in the future.” — Sami Takaluoma, CEO · 2026-07-24 However, the Market outlook remains unchanged, with management expecting activity to stay at current levels for the next six months. When asked why they didn't raise the outlook, Sami replied, “We are not in a position to see that there would be a significant ramp-up from the good level that we are kind of like already been seeing.” — Sami Takaluoma, CEO · 2026-07-24

Prior calls had already set the tone for careful optimism. In April, management highlighted the aftermarket backlog build-up: “So we do see that we have this good backlog that has been built up and the deliveries are starting from the Q2 onwards then.” — Sami Takaluoma, President and CEO · 2026-04-22 And regarding tariff mitigation, they maintained a net-neutral stance: “So again, we are not making money out of those, but we are not suffering from those either.” — Pasi Kyckling, CFO · 2026-04-22

The quarter solidifies Metso's position as a key beneficiary of the mining upturn, with aftermarket growth and margin expansion confirming the structural thesis. The unresolved backlog question and the cautious outlook temper the enthusiasm, but the underlying demand and the company's strategic positioning remain compelling.