HELSINKI, Finland, Feb. 8, 2006 (PRIMEZONE) -- A news conference will be held today on February 8, 2006 at 1:30 p.m. in Finnish and at 3:00 p.m. in English at Metso's (NYSE:MX) Corporate Office, Fabianinkatu 9 A, Helsinki, Finland.
The English-language news conference can be followed on the Internet at www.metso.com.
-- In 2005, Metso Corporation's net sales increased 17 percent and totaled EUR 4,221 million (EUR 3,602 million in 2004).
-- Metso Corporation's operating profit for 2005 was EUR 335.0 million, that is 7.9 percent of net sales (EUR 199.5 million and 5.5 percent in 2004).
-- New orders worth EUR 4,745 million were received during the year, i.e. 19 percent more than in the previous year (EUR 3,989 million in 2004).
-- The Corporation's order backlog from continuing operations grew by 38 percent from year-end 2004 and reached EUR 2,350 million at the end of December (EUR 1,705 million at year-end 2004).
-- Net cash generated by operating activities was EUR 164 million (EUR 261 million in 2004) and free cash flow was EUR 106 million (EUR 211 million).
-- Return on capital employed (ROCE) was 18.8 percent (10.7%) and return on equity (ROE) 20.9 percent (15.9%).
-- Earnings per share were EUR 1.69 (EUR 1.05). The Board proposes a dividend of EUR 1.40 per share. The dividend proposal consists of EUR 0.70 in line with the new dividend policy, and an extra dividend of EUR 0.70.
This review is prepared in accordance with the recognition and measurement principles of the IFRS. Metso adopted IFRS at the beginning of 2005.
The operating profit for 2004 is not fully comparable with the 2005 operating profit as it was improved by a nonrecurring reversal of pension liability of EUR 75.3 million due to amendments of the Finnish employee pension system (TEL) in December 2004. The corresponding reversal for 2005 was EUR 5.1 million.
"Metso's 2005 result was the best ever in Metso's history. The 7.9 percent operating profit clearly exceeded the 6 percent target we set in June 2004. And the ROCE of 18.8 percent distinctly exceeded the 12 percent target set for 2005," notes Jorma Eloranta, President and CEO, Metso Corporation. Metso Minerals and Metso Automation's good profitability improvements continued and they clearly exceeded the set financial targets. Also Metso Paper's profitability improved toward the end of the year and was in line with the target. Metso Ventures was the only business area that did not meet the profitability target set for it.
Metso's growth was strong also during the last quarter of the year: net sales for October-December, EUR 1,254 million, were 20 percent higher than the corresponding period of 2004 (EUR 1,043 million). New orders worth EUR 1,537 million were received, an increase of 66 percent over the comparison period (EUR 927 million in 10-12/2004). Operating profit for the fourth quarter was EUR 101.5 million, i.e. 8.1 percent of net sales (EUR 107.7 million and 10.3 percent in 10-12/2004 are not directly comparable as they included the nonrecurring pension liability reversal EUR 75.3 million.)
According to Eloranta, the positive profitability improvement and strong order backlog of Metso's business areas and the continued favorable market situation of many of Metso's customer industries create a good platform for Metso's profitable growth. "In 2005, our net sales grew 17 percent almost entirely organically. This, in turn, contributed to the improved operating profit. Metso's growth in profitability has been supported by long-term efforts in all our business areas to continuously improve our competitiveness, productivity and operational quality. I'm proud to say that Metso employees all over the world are committed to our targets of profitable growth and to continuing this work also in 2006."
Short-term outlook
The favorable market situation is expected to continue in the civil engineering, mining and power industry in 2006. Pulp and paper industry demand is expected to remain at least as satisfactory as in 2005.
Of Metso Paper's products, the market prospects for new paper machines are the strongest in Asia. In Europe, demand will be focused on rebuilds. The markets for both new tissue machines and tissue machine rebuilds are good. The markets for new fiber lines are expected to remain strong in South America and Asia.
The demand for Metso Minerals' equipment related to aggregates production is expected to remain good, particularly due to extensive road network development projects and other infrastructure investments. Due to the fact that prices of metals have remained high for a sustained period, mining industry demand is expected to remain strong. However, the shortage of experienced personnel and other resources may still to some extent limit the commencement of new mining projects and extend the delivery times for ongoing projects.
Metso Automation's market situation is expected to remain good in the energy, oil and gas industry and satisfactory in the pulp and paper industry.
Based on the strong order backlog and current favorable market outlook it is estimated that in 2006 Metso Corporation's net sales will grow by over 10 percent and operating profit will clearly surpass the operating profit in 2005.
Metso is a global engineering and technology corporation with 2005 net sales of approximately EUR 4.2 billion. Its 22,000 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries.
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.