HELSINKI, Finland, Oct. 26, 2005 (PRIMEZONE) -- A news conference in Finnish will be held at 1 p.m. and in English at 3 p.m. (GMT + 3 hours) today, Wednesday, October 26, 2005 in Metso's Corporate Office, Fabianinkatu 9 A, Helsinki. The English news conference can be followed live on the Internet at www.metso.com.
GOOD PROGRESS IN PROFITABILITY AND NET SALES
- Metso Corporation's operating profit for the third quarter
in 2005 was EUR 95.5 million, or 9.1% of net sales.
- The net sales in January-September increased by 16 percent
on the corresponding period last year and totaled EUR 2,967 million
(1-9/2004: EUR 2,559 million). The operating profit was EUR 233.5
million, or 7.9 percent of net sales (EUR 91.8 million and 3.6%).
- Earnings per share were EUR 1.22 (EUR 0.53).
- The order backlog from continuing operations increased by
21 percent from the year end, and was EUR 2,059 million at the end
of September (Dec. 31, 2004: EUR 1,705 million). New orders worth
EUR 3,208 million were received (EUR 3,062 million in 1-9/04).
- Net cash generated by operating activities was EUR 145 million.
Return on capital employed (ROCE) was 18.3 percent (6.6%)
and return on equity (ROE) 21.4 percent (11.0%).
- Gearing was 25.3 percent at the end of September (Dec. 31,
2004: 49.7%).
This interim review is prepared in accordance with the recognition and measurement principles of the IFRS. Metso adopted IFRS at the beginning of 2005.
"Metso Automation's and Metso Minerals' profitability improvement has previously resulted mainly from internal programs, such as streamlined cost structure and business concept renewals. Now the net sales growth, as well, contributes to their profitability. I am also pleased with the profitability improvement in Metso Paper, which is now starting to see the benefits of the efficiency programs undertaken in the past two years," says Jorma Eloranta, President and CEO of Metso Corporation. "All and all, the third quarter was the best ever in Metso's history. We also estimate that 2005 will be the best year so far for Metso - but there is still a lot of development potential in all our businesses."
Eloranta notes that the current performance level forms a good basis for the implementation of the new strategy, which targets profitable growth. "We have significantly enhanced our operational efficiency. For example, our productivity has improved substantially. At the same time, we have developed our supply chain to make the most of the strong demand in the rock and minerals processing sector as well as in the gas and energy industries," Eloranta continues. In 2006-2008 Metso will seek annual increase in net sales of some 10 percent through organic growth and complementary acquisitions.
The growth prospects are supported by good demand for Metso's products and services. "In August, when we introduced our new strategy and the financial targets for 2006, we estimated that the favorable market situation will continue also next year. Our view of the market development remains positive and we look confidently into 2006," Eloranta says.
Short-term outlook
No material changes are expected in the market situation for Metso during the last quarter of 2005.
In Metso Paper's markets, the demand for rebuilds and aftermarket services is expected to continue to be good. In the markets for new machinery, there are several tissue machine investments and a few paper machine and pulping line projects under consideration, but hardly any board machine investments.
The demand for Metso Minerals' equipment related to aggregates production is expected to remain good, especially due to comprehensive road network development projects and other infrastructure investments. The demand in the mining industry is estimated to remain strong, though the shortage of experienced management and other resources continues to somewhat hold back the implementation of new investment projects.
Metso Automation's market situation is expected to be good in the energy, oil and gas industry and satisfactory in the pulp and paper industry.
Metso Minerals and Metso Automation are expected to clearly surpass the operating profit targets set for 2005. Metso Paper's result will be burdened by the weak profitability of the Tissue business and restructuring costs, but the positive performance in the third quarter gives an improved basis for attaining the operating margin target set for 2005. It is estimated that Metso Ventures' operating margin will be lower than its target because of structural changes and the weak profitability of Metso Panelboard.
The financial targets set for Metso Corporation in 2005 are an operating margin of 6 percent and ROCE of 12 percent. It is estimated that these financial targets will be clearly exceeded. Metso's management expects that the Corporation's net sales for 2005 will increase to approximately EUR 4.1 billion and that the operating profit margin will exceed 7 percent. The improved competitiveness of all of Metso's business areas combined with a mostly positive market outlook support a continuation of favorable development.
Metso is a global technology corporation serving customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. In 2004, the net sales of Metso Corporation were approx. EUR 4 billion, and it has some 22,000 employees in more than 50 countries. Metso's shares are listed on the Helsinki and New York Stock Exchanges.
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 improvement (4) the success of pending and future acquisitions and restructuring.
The full report can be downloaded from the enclosed link. http://hugin.info/3017/R/1017956/159665.pdf