Metso's Interim Review January 1 - September 30, 2014
Metso Corporation's stock exchange release on October 23, 2014 at 12:00 noon
We will arrange an audiocast on Metso's January-September 2014 Interim Review at
15:00 EEST (8:00 EDT, 13:00 BST, 14:00 CEST). The audiocast is viewable at
www.metso.com/IRwebcasts. A simultaneous conference call is arranged which
allows participants to ask questions. Details of the event can be found at the
end of this release.
This is a summary of Metso's January-September 2014 Interim Review. The complete
report is attached to this release as a pdf-file and is also available at
Figures in brackets refer to the comparison period, i.e. the same period last
year and all figures relate to Metso's continuing operations, unless otherwise
Third quarter 2014 in brief
* Metso launched its new strategy targeting focused growth and higher
* Market conditions remained largely unchanged compared to the previous
* Services business continued to develop well
* Orders received: EUR 786 million (EUR 825 million), of which EUR 493 million
(EUR 470 million) were services orders
* Net sales: EUR 861 million (EUR 937 million), of which EUR 490 million
services (EUR 495 million)
* EBITA before non-recurring items: EUR 104 million or 12.1 percent of net
sales (EUR 129 million, 13.7%). Non-recurring items totaled EUR -27 million
(EUR 0 million), majority of which was related to the impairment loss of a
long-term loan to Northland Resources.
Financial guidance for 2014
Our guidance for 2014 (originally published on February 6, 2014) remains
unchanged. We estimate that our net sales in 2014 will be somewhat below 2013
and that our EBITA margin before non-recurring items for 2014 will be around 12
percent of net sales.
This guidance is based on our current market outlook, the order backlog for
2014, and cost efficiency actions, as well as foreign exchange rates remaining
similar to those in September 2014.
President and CEO Matti Kähkönen:
"The most important highlight for us in the third quarter was the launch of
Metso's new strategy. Under this, we will continue our transformation into a
more focused and more integrated company with higher profitability. Metso is in
a good position to leverage its core competencies and assets to strengthen its
leadership in minerals processing, as well as gain ground in flow control. Going
forward, we will scale up our efforts aimed at reaching our operational and
financial targets and delivering greater value for our shareholders.
Operationally, there were two aspects to our third quarter. Positive
developments were seen in the Services business and in Flow Control, both of
which reported increased orders and higher profitability year-on-year.
Challenges in the mining equipment market, which we have seen for a number of
quarters, continued, however. Demand remained weak, at roughly the same level of
the two previous quarters this year. A smaller order backlog puts pressure on
net sales for this business, and this has had a negative impact on our quarterly
result. I must say, however, that I'm pleased to see that these challenges are
largely volume-driven, and that our personnel have worked hard to maintain
stable gross margins in these difficult circumstances."
EUR million Q1-Q3/ 2014 Q1-Q3/ 2013
Q3/ Q3/ Change % Change % 2013
Orders received 786 825 -5 2,608 2,824 -8 3,709
Orders received by 493 470 5 1,572 1,581 -1 2,038
% of orders 63 57 60 56 55
Order backlog at the 1,872 2,117 -12 1,927
end of the period
Net sales 861 937 -8 2,640 2,840 -7 3,858
Net sales of the 490 495 -1 1,435 1,468 -2 1,976
% of net sales 57 53 54 52 51
Earnings before 104 129 -19 323 349 -8 496
interests, tax and
% of net sales 12.1 13.7 12.2 12.3 12.8
Operating profit 72 124 -42 250 315 -21 423
% of net sales 8.4 13.3 9.5 11.1 11.0
Earnings per share, 0.26 0.52 0.89 1.24 1.59
Free cash flow 46 104 -56 141 186 -24 251
Return on capital 15.5 18.5 18.6
Equity-to-asset 38.9 36.1 36.9
ratio at the end of
the period, %
Net gearing at the 4 46 49.6 40.4 41.6
end of the period, %
For illustrative purposes, the balance sheet key figures for the comparison
period have been restated to represent continuing operations.
Short-term market outlook
We expect demand for mining equipment and projects to remain weak but stable.
Due to our large installed equipment base and our stronger services presence, we
expect demand for our mining services to remain good.
Demand for aggregates equipment and related services is expected to be
Demand for products and services for our valves and pumps businesses is expected
to remain good, whereas demand for our process automation systems business is
expected to remain satisfactory.
Metso is a leading process performance provider, with customers in the mining,
oil and gas, and aggregates industries. Metso's cutting-edge services and
solutions improve availability and reliability in minerals processing and flow
control, providing sustainable process and profit improvements. Metso is listed
on the NASDAQ OMX Helsinki, Finland. In 2013, Metso's net sales totaled EUR 3.8
billion. Metso employs approximately 16,000 industry experts in 50 countries.
Further information, please contact:
Matti Kähkönen, President and CEO, Metso Corporation, tel. +358 20 484 3001
Harri Nikunen, CFO, Metso Corporation, tel. +358 20 484 3010
Juha Rouhiainen, VP, Investor Relations, Metso Corporation, tel +358 20 484 3253
Metso will arrange an audiocast today at 15:00 EEST (8:00 EDT, 13:00 BST, 14:00
CEST). The audiocast is viewable at www.metso.com/IRwebcasts. A simultaneous
conference call is arranged which allows participants to ask questions.
Recording of the event is available at same location www.metso.com/IRwebcasts
after the event has finished and a transcript will be available on Tuesday,
October 28, 2014 at the latest.
Conference call details
Conference call participants are requested to dial in five minutes before the
scheduled time on:
United States: +1 855 269 2605
other countries: +44 20 3194 0550
Metso will not arrange a separate event at its headquarters for investors,
analysts or media.
VP, Investor Relations
NASDAQ OMX Helsinki Ltd