Guinness European Equity Income Fund on Metso Corporation
Thesis
Metso's recent earnings were better than expected and management indicated that mining end markets are improving as customers gain confidence and increase capital expenditure. New business wins support the fund's confidence in the company's aftermarket services business, which accounts for close to 60% of revenue and provides recurring revenue across different market conditions. The company also has significant exposure to copper, iron ore and gold through its Minerals segment, positioning it to benefit from stronger commodity investment.
“New business wins reinforce confidence in Metso's ability to drive aftermarket services”
Key risks
- Dependence on mining customer confidence and capital expenditure
- Exposure to commodity-linked end markets including copper, iron ore and gold