Metso successful in new orders
Metso Corporation's stock exchange release on July 28, 2011 at 12:00
A news conference will be held today, on July 28, 2011 at 3:00 p.m. at Metso
Group Head Office, Fabianinkatu 9 A, Helsinki, Finland. The news conference can
be followed through a live webcast at www.metso.com/webcasts or through a
simultaneously arranged conference call (details at the end of this release).
This is a summary of Metso's January-June 2011 Interim Review and the complete
report is attached as a pdf-file to this release and is also available on our
website at www.metso.com/investors.
Figures in brackets, unless otherwise stated, refer to the comparison period,
i.e. the same period in the previous year.
Highlights of the second quarter of 2011
· All-time-high quarter in order intake due to strong demand in all our segments
in both capital equipment and in the services business.
· New orders worth EUR 2,883 million were received in April-June, i.e. 73
percent more than in the comparison period (EUR 1,671 million). Orders received
from the services business increased and were EUR 866 million, i.e. 31 percent
of all orders received (EUR 680 million and 41%).
· Net sales increased 14 percent on the comparison period, and were EUR 1,567
million (EUR 1,370 million). Our services business net sales totaled EUR 691
million and accounted for 46 percent of total net sales (EUR 612 million and
· Earnings before interest, tax and amortization (EBITA), before non-recurring
items increased 12 percent and were EUR 139.8 million, i.e. 8.9 percent of net
sales (EUR 125.0 million and 9.1%).
· Earnings per share were EUR 0.45 (EUR 0.56).
· Free cash flow was EUR 49 million (EUR 164 million).
Metso's President and CEO Matti Kähkönen comments on the second quarter:
"Metso continued to make strong progress in the second quarter; we received more
new orders in April-June than ever before. Demand in all of our customer
industries was at a good or satisfactory level, both in capital equipment and in
the services business. Emerging markets continued to account for an impressive
share of orders received, at 60 percent. However, in spite of healthy demand,
there is increased uncertainty in the global economy.
Our comparable EBITA increased by 12 percent. The higher delivery volumes
improved our capacity utilization and increased our net sales giving a positive
impact on our profitability development. As a result of clearly higher business
activity we have recruited about 700 new employees since the beginning of the
year in order to respond to strong order intake and increased delivery volumes.
This has to some extent hit our good profitability in the short-term.
Furthermore the pricing environment was challenging in some product categories.
We have a very solid base for the future, and we will now further increase our
focus on successful and cost-effective delivery, while continuing to win
profitable orders. We expect the level of good business activity in our customer
industries to continue for the rest of 2011 despite the economic and financial
Thanks to the favorable market development and strong order backlog, the outlook
for the rest of the year is good. As a result, our guidance for the current year
remains unchanged. It is estimated that our net sales for 2011 will grow by
approximately 15 percent compared to 2010 and profitability (EBITA margin before
non-recurring items) will improve."
Metso's key figures
EUR million Q2/2011 Q2/2010 Change % Q1-Q2/2011 Q1- Change % 2010
Net sales 1,567 1,370 14 3,011 2,540 19 5,552
Net sales of
services 691 612 13 1,331 1,123 19 2,453
% of net sales 46 45 46 45 45
amortization 139.8 125.0 12 263.4 212.6 24 491.0
% of net sales 8.9 9.1 8.7 8.4 8.8
Operating 121.0 140.0 -14 233.9 209.5 12 445.2
% of net sales 7.7 10.2 7.8 8.2 8.0
Earnings per 0.45 0.56 -20 0.94 0.76 24 1.71
Orders received 2,883 1,671 73 4,730 3,037 56 5,944
of services 866 680 27 1,714 1,328 29 2,637
at end of 5,593 4,176 34 4,023
Free cash flow 49 164 -70 117 199 -41 435
employed (ROCE) 15.3 12.6 13.5
assets ratio at 37.4 35.6 38.1
end of period,
Gearing at end 23.9 28.5 15.0
of period, %
Demand in most of our customer industries is healthy with some variability by
customer industry and geographic area. We estimate, in the emerging markets the
operating environment will continue strong and the outlook in the mining
business is excellent. The uncertainty in the euro zone, the budget deficit in
the United States, the availability of financing and fluctuations in the
exchange rates may, however, slow down market activity. Political unrest in
recent months in the Middle East and North Africa, as well as the natural
disaster in Japan, have also contributed to the overall uncertainty. However, we
anticipate that our customer industries will continue to utilize their capacity
at a good level supporting our services business. Furthermore most of our
customers are expected to invest in existing and new capacity.
Metal prices have been at a high level primarily due to strong demand in China
and India and to the momentum in the global economy. At the same time, copper
and iron ore production has fallen short of demand. The activity for quotations
for equipment and projects from mining companies has stayed at a good level.
This has had a clearly positive impact on our orders received and we expect the
mining market to stay at the current high level for the remainder of the year.
Since several mining companies have confirmed significant capital investment
programs for the coming years, we expect good quoting activity in larger
projects this year. Due to the strengthening demand for minerals and our large
installed equipment base, we expect demand for our mining services to be
In the Asia-Pacific region and Brazil, economic growth continues and
infrastructure construction projects are maintaining demand for construction
equipment at a good level. We anticipate that demand for equipment used in
aggregates processing by the construction industry in Europe and in North
America will stay at the current satisfactory level during the second half of
2011. We estimate that demand for our services for the construction industry
will remain satisfactory.
Demand for power plants that utilize renewable energy sources is expected to
continue satisfactory in 2011. Several European countries and the United States
have published targets to increase the use of renewable energy and this is
expected to support demand for our power plant solutions fuelled by biomass and
recycled waste. However, the pending policies over subsidy mechanisms for
renewable energy are estimated to have a key impact on investment decisions.
Demand for the power plant services business is expected to be good.
We estimate that demand for our automation products will continue good this
year, as the oil, gas and petrochemical industries continue investing due to the
improvement in energy prices and demand. Demand for automation products in the
pulp and paper industry is also expected to be good and for automation solutions
We expect the demand for metal and solid waste recycling equipment to be good.
Demand for recycling equipment services is expected to continue improving over
the coming quarters as the capacity utilization rates of our customers' plants
and equipment improve.
Demand for paper, board and tissue lines is expected to be satisfactory in
2011. We expect the high capacity utilization rates of the paper and board
industry to keep the demand for our services at a good level.
Demand for new pulp mills, rebuilds and services continues to be good. However,
we expect the market for pulp mills to slow down after recent large project
orders and the market for pulp mill services and rebuilds to continue to be
As earlier, we estimate that our net sales in 2011 will grow by around 15
percent and that our profitability (EBITA margin before non-recurring items)
will improve, both compared to 2010. Our estimate is based on Metso's
development in January-June and on our order backlog, which contains orders
worth about EUR 2.7 billion for delivery in 2011.
The estimates for our financial performance in 2011 are based on Metso's current
market outlook and business scope, as well as on foreign exchange rates similar
to the first half of this year.
Helsinki, July 28, 2011
Metso Corporation's Board of Directors
Metso is a global supplier of sustainable technology and services for mining,
construction, power generation, automation, recycling and the pulp and paper
industries. We have about 29,000 employees in more than 50 countries.
Further information, please contact:
Matti Kähkönen, President and CEO, Metso Corporation, tel. +358 20 484 3000
Harri Nikunen, CFO, Metso Corporation, tel. +358 20 484 3010
Marja Mäkinen, Investor Relations Manager, Metso Corporation, tel.
+358 20 484 3211
Invitation to news conference
Metso will hold a news conference for media, investors and analysts in Helsinki
today, on Thursday, July 28, 2011 at
8:00 EST / New York
13:00 BST / London
14:00 CEST / Paris
15:00 EEST / Helsinki
The event will take place at Metso Group Head office, Fabianinkatu 9 A,
Helsinki, Finland. The news conference will be in English.
The news conference can also be followed through a live webcast at
www.metso.com/webcasts or through simultaneously arranged conference call. It is
possible to ask questions during the event both by through webcast and by
Due to the live webcast, we are kindly asking those attending the news
conference to be present 5 minutes prior to the start of the event.
Conference call details:
Conference call participants are requested to dial in a few minutes prior to the
start of the teleconference
* US: +1 334 323 6201
* Other countries: +44 20 7162 0025 or +44 20 7162 0077
* Access code: 885 198
A replay will be available for 14 days until August 11, 2011 on the following
* US: +1 954 334 0342
* Other countries: +44 20 7031 4064
* Access code: 885 198
After the news conference there will be an audio file (mp3) available for
downloading and at the latest on Friday July 29, a transcript of the event at
www.metso.com/webcasts. The presentation material will be available after the
publishing of the interim review at www.metso.com/investors.
You are most welcome to participate in the event!
Metso's Financial Reporting in 2011
The Interim Review for January-September 2011 will be published on October
It should be noted that certain statements herein which are not historical
facts, including, without limitation, those regarding expectations for general
economic development and the market situation, expectations for customer
industry profitability and investment willingness, expectations for company
growth, development and profitability and the realization of synergy benefits
and cost savings, and statements preceded by "expects", "estimates", "forecasts"
or similar expressions, are forward-looking statements. These statements are
based on current decisions and plans and currently known factors. They involve
risks and uncertainties which may cause the actual results to materially differ
from the results currently expected by the company.
Such factors include, but are not limited to:
1) general economic conditions, including fluctuations in exchange rates and
interest levels, which influence the operating environment and profitability of
customers and thereby the orders received by the company and their margins
(2) the competitive situation, especially significant technological solutions
developed by competitors
(3) the company's own operating conditions, such as the success of production,
product development and project management and their continuous development and
(4) the success of pending and future acquisitions and restructuring.
Harri Nikunen, CFO
Marja Mäkinen, Investor Relations Manager
Nasdaq OMX Helsinki Ltd