The financial statements release is unaudited
CONSOLIDATED STATEMENTS OF INCOME
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Net sales 1,896 1,538 6,250 4,955
Cost of goods sold (1,453) (1,179) (4,702) (3,659)
Gross profit 443 359 1,548 1,296
Selling, general and
administrative expenses (256) (235) (972) (846)
Other operating income and
expenses, net (8) 0 1 6
Share in profits of
associated companies 1 1 3 1
Operating profit 180 125 580 457
% of net sales 9.5% 8.1% 9.3% 9.2%
Financial income and
expenses, net (8) (8) (33) (36)
Profit before taxes 172 117 547 421
Income taxes (49) 5 (163) (11)
Profit 123 122 384 410
Profit attributable to
minority interests 3 0 3 1
Profit attributable to
equity shareholders 120 122 381 409
Profit 123 122 384 410
Earnings per share, EUR 0.85 0.86 2.69 2.89
Adjusted earnings per
share, EUR 1) 0.85 0.65 2.69 2.28
1) In 2006, Metso recognized nonrecurring deferred tax assets
totaling EUR 87 million, which improved the earnings per share by EUR
0.61. Of the deferred tax asset, EUR 57 million was recognized in the
second quarter of 2006 (impact to EPS EUR 0.40) and EUR 30 million in
the last quarter of 2006 (impact to EPS EUR 0.21).
CONSOLIDATED STATEMENT OF RECOGNIZED
INCOME AND EXPENSE
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Cash flow hedges, net of
tax (3) 4 (2) 16
Available-for-sale equity
investments, net of tax (3) 0 22 1
Share-based payments, net
of tax - - 1 0
Currency translation on
subsidiary net investments (16) (18) (29) (59)
Net investment hedge gains
(losses), net of tax (2) 8 (2) 22
Defined benefit plan
actuarial gains (losses),
net of tax (1) 3 (1) 3
Other 1 2 2 2
Net income (expense)
recognized directly in
equity (24) (1) (9) (15)
Profit 123 122 384 410
Total recognized income
(expense) for the year 99 121 375 395
Total recognized income
(expense) attributable to
minority interests 3 0 3 1
Total recognized income
(expense) attributable to
equity shareholders 96 121 372 394
Total recognized income
(expense) for the year 99 121 375 395
ASSETS
EUR million Dec 31, 2007 Dec 31, 2006
Non-current assets
Intangible assets
Goodwill 772 768
Other intangible assets 251 274
1,023 1,042
Property, plant and equipment
Land and water areas 54 57
Buildings and structures 216 221
Machinery and equipment 315 318
Assets under construction 49 19
634 615
Financial and other assets
Investments in associated companies 19 19
Available-for-sale equity investments 45 15
Loan and other interest bearing receivables 5 6
Available-for-sale financial investments 5 5
Deferred tax asset 144 238
Other non-current assets 22 33
240 316
Total non-current assets 1,897 1,973
Current assets
Inventories 1,410 1,112
Receivables
Trade and other receivables 1,274 1,218
Cost and earnings of projects under
construction in excess of advance billings 374 284
Loan and other interest bearing receivables 2 2
Available-for-sale financial assets 0 10
Tax receivables 30 16
1,680 1,530
Cash and cash equivalents 267 353
Total current assets 3,357 2,995
Assets held for sale - -
TOTAL ASSETS 5,254 4,968
SHAREHOLDERS' EQUITY AND LIABILITIES
EUR million Dec 31, 2007 Dec 31, 2006
Equity
Share capital 241 241
Share premium reserve 77 77
Cumulative translation differences (76) (45)
Fair value and other reserves 456 432
Retained earnings 910 739
Equity attributable to shareholders 1,608 1,444
Minority interests 7 6
Total equity 1,615 1,450
Liabilities
Non-current liabilities
Long-term debt 700 605
Post employment benefit obligations 177 191
Deferred tax liability 41 57
Provisions 37 53
Other long-term liabilities 2 2
Total non-current liabilities 957 908
Current liabilities
Current portion of long-term debt 22 93
Short-term debt 97 132
Trade and other payables 1,307 1,238
Provisions 222 213
Advances received 637 655
Billings in excess of cost and earnings of
projects under construction 331 222
Tax liabilities 66 57
Total current liabilities 2,682 2,610
Liabilities held for sale - -
Total liabilities 3,639 3,518
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 5,254 4,968
NET INTEREST BEARING LIABILITIES
Long-term interest bearing debt 700 605
Short-term interest bearing debt 119 225
Cash and cash equivalents (267) (353)
Other interest bearing assets (12) (23)
Total 540 454
CONDENSED CONSOLIDATED CASH
FLOW STATEMENT
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Cash flows from operating
activities:
Profit 123 122 384 410
Adjustments to reconcile
profit
to net cash provided by
operating activities
Depreciation 38 27 148 105
Interests and dividend
income 6 4 32 26
Income taxes 49 (5) 163 11
Other (8) (2) (4) -
Change in net working
capital (123) (34) (286) (18)
Cash flows from operations 85 112 437 534
Interest paid and dividends
received (17) (21) (29) (24)
Income taxes paid (34) (17) (114) (68)
Net cash provided by (used
in) operating activities 34 74 294 442
Cash flows from investing
activities:
Capital expenditures on
fixed assets (49) (41) (159) (129)
Proceeds from sale of fixed
assets 3 3 16 14
Business acquisitions, net
of cash acquired (8) (268) (55) (277)
Proceeds from sale of
businesses, net of cash
sold - 13 9 13
(Investments in) proceeds
from sale of financial
assets 0 41 13 154
Other - (1) - (2)
Net cash provided by (used
in) investing activities (54) (253) (176) (227)
Cash flows from financing
activities:
Share options exercised - 1 0 1
Redemption of own shares - (11) - (11)
Dividends paid - - (212) (198)
Net funding 29 49 (5) 35
Other - - 15 (6)
Net cash provided by (used
in) financing activities 29 39 (202) (179)
Net increase (decrease) in
cash and cash equivalents 9 (140) (84) 36
Effect from changes in
exchange rates (3) - (2) (6)
Cash and cash equivalents
at beginning of period 261 493 353 323
Cash and cash equivalents
at end of period 267 353 267 353
Free cash flow
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Net cash provided by
operating activities 34 74 294 442
Capital expenditures on
maintenance investments (37) (23) (112) (92)
Proceeds from sale of fixed
assets 3 3 16 14
Free cash flow 0 54 198 364
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
Cumu- Fair Equity
Share lative value attri-
pre- trans- and Re- butable Mi-
mium lation other tained to nority Total
Share re- adjust- re- earn- share- inter- e-
EUR million capital serve ments serves ings holders ests quity
Balance at Jan 1,
2006 241 76 (9) 424 526 1,258 7 1,265
Cash flow hedges,
net of tax - - - 16 - 16 - 16
Available-for-sale
equity
investments, net
of tax - - - 1 - 1 - 1
Share-based
payments, net of
tax - - - 0 - 0 - 0
Currency
translation on
subsidiary net
investments - - (59) - - (59) - (59)
Net investment
hedge gains
(losses), net of
tax - - 22 - - 22 - 22
Defined benefit
plan actuarial
gains (losses),
net of tax - - - - 3 3 - 3
Other - - 1 1 - 2 - 2
Net income
(expense)
recognized
directly in equity - - (36) 18 3 (15) - (15)
Profit - - - - 409 409 1 410
Total recognized
income (expense)
for 2006 - - (36) 18 412 394 1 395
Dividends - - - - (198) (198) - (198)
Share options
exercised - 1 - - - 1 - 1
Redemption of own
shares - - - (11) - (11) - (11)
Other - - - 1 (1) - (2) (2)
Balance at Dec 31,
2006 241 77 (45) 432 739 1,444 6 1,450
Cash flow hedges,
net of tax - - - (2) - (2) - (2)
Available-for-sale
equity
investments, net
of tax - - - 22 - 22 - 22
Share-based
payments, net of
tax - - - 1 - 1 - 1
Currency
translation on
subsidiary net
investments - - (29) - - (29) - (29)
Net investment
hedge gains
(losses), net of
tax - - (2) - - (2) - (2)
Defined benefit
plan actuarial
gains (losses),
net of tax - - - - (1) (1) - (1)
Other - 2 2 - 2
Net income
(expense)
recognized
directly in equity - - (31) 21 1 (9) - (9)
Profit - - - - 381 381 3 384
Total recognized
income (expense)
for 2007 - - (31) 21 382 372 3 375
Dividends - - - - (212) (212) - (212)
Share options
exercised 0 0 - - - 0 - 0
Redemption of own
shares - - - - - - - -
Other - - - 3 1 4 (2) 2
Balance at Dec 31,
2007 241 77 (76) 456 910 1,608 7 1,615
ACQUISITIONS
Acquisitions in 2007
Metso Minerals acquired North American metal recycling provider, Bulk
Equipment Systems and Technologies Inc (B.E.S.T. Inc), on March 30,
2007. The acquisition price was approximately EUR 9 million. Excess
purchase price of EUR 3 million was allocated to intangible assets,
representing the fair values of the acquired customer base, brands,
technology and order backlog. The remaining excess purchase price of
EUR 7 million represents goodwill associated to Metso's improved
position in the North American metal recycling market.
On June 27, 2007, Metso Paper acquired Mecanique et Dépannage
Industries s.a.r.l. (MDI), a French company supplying maintenance
services to the paper industry. The purchase price was less than EUR
1 million.
Metso Paper acquired on July 18, 2007 a UK based service provider
Bender Holdings Limited with its subsidiaries. The purchase price was
EUR 16 million, net of cash acquired. Excess purchase price of EUR 10
million was allocated to intangible assets, representing the fair
values of acquired technology, customer base and existing long-term
contracts. The remaining excess purchase price of EUR 6 million is
goodwill related to Metso's improved position in the worldwide market
for services to pulp and paper industry.
Metso Minerals strengthened its metal recycling business by acquiring
Mueller Engineering Inc. in the USA on October 31, 2007. Mueller
Engineering is a shredder plant service provider specializing in
servicing the drive motors and related equipment critical to the
functioning of the shredder. The purchase price was EUR 6 million.
Excess purchase price of EUR 3 million was allocated to intangible
assets representing the fair values of acquired customer base,
technology and order backlog and the remaining EUR 4 million
represents goodwill arising from the leading market position gained
on metal recycling plant services in North America.
Had these acquisitions taken place on January 1, 2007, Metso's net
sales and net profit would have increased by EUR 26 million and EUR 3
million, respectively.
Summary information on acquisitions made in 2007:
Fair value
EUR million Carrying amount allocations Fair value
Intangible assets 0 16 16
Property, plant and
equipment 2 - 2
Inventories 2 - 2
Trade and other
receivables 8 - 8
Deferred tax
liabilities (1) (5) (6)
Other liabilities
assumed (7) - (7)
Non-interest bearing
net assets 4 11 15
Cash and cash
equivalents acquired 4 - 4
Debt assumed (1) - (1)
Purchase price (36) - (36)
Goodwill 29 (11) 18
Purchase price settled in cash (36)
Cash and cash equivalents acquired 4
Cash outflow on acquisitions (32)
Acquisition of Pulping
and Power businesses in
2006
Metso acquired the Pulping and Power businesses from Aker Kvaerner on
December 29, 2006. The final asset values of the businesses were
agreed upon in July 2007 and the revised purchase price amounted to
EUR 336 million including EUR 6 million in expenses related to the
acquisition and EUR 53 million of net cash. The resulting purchase
price adjustment of EUR 23 million was settled in July.
The total excess purchase price amounted to EUR 379 million, whereof
EUR 154 million was allocated to intangible assets, representing the
fair values of acquired customer base, technology and order backlog.
The related deferred tax liability was EUR 41 million. The remaining
excess purchase price of EUR 266 million represents goodwill, which
reflects the value of assembled workforce, significant synergy
benefits and widened business portfolio offering Metso potential to
expand its operations into new markets and customer segments.
Details of the acquired net assets and goodwill are as follows:
Fair value
EUR million Carrying amount allocations Fair value
Intangible assets 5 154 159
Property, plant and
equipment 25 - 25
Inventories 52 - 52
Trade and other
receivables 186 - 186
Other assets 29 - 29
Minority interests - - -
Advances received (214) - (214)
Deferred tax liabilities (4) (41) (45)
Other liabilities
assumed (175) - (175)
Non-interest bearing net
assets (96) 113 17
Cash and cash
equivalents 248 - 248
Debt assumed (195) - (195)
Purchase price (330) - (330)
Costs related to
acquisition (6) - (6)
Goodwill 379 (113) 266
Purchase price settled
in cash (307)
Settlement of acquired
debt (195)
Costs related to
acquisition (6)
Cash and cash
equivalents acquired 248
Cash outflow on
acquisition for 2006 (260)
Purchase price
adjustment paid in July
2007 (23)
Total cash outflow on
acquisition (283)
Other acquisitions in
2006
In August 2006, Metso acquired a Chinese paper machine manufacturer
Shanghai-Chenming Paper Machinery Co. Ltd. at a cash consideration of
EUR 12 million and debt assumed of EUR 19 million. The company was
consolidated into Metso Paper from September 2006 onwards.
Additionally, Metso acquired minor service related businesses in
Sweden for a purchase consideration of EUR 4 million and the
remaining minority interest of 35% in Metso-SHI Co. Ltd. in Japan at
a price of EUR 2 million.
ASSETS PLEDGED AND CONTINGENT LIABILITIES
EUR million Dec 31, 2007 Dec 31, 2006
Mortgages on corporate debt 9 14
Other pledges and contingencies
Mortgages 2 2
Pledged assets 0 0
Guarantees on behalf of associated company
obligations - -
Other guarantees 11 6
Repurchase and other commitments 8 10
Lease commitments 142 166
NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS
EUR million Dec 31, 2007 Dec 31, 2006
Forward exchange rate contracts 1,387 1,357
Interest rate and currency swaps 0 1
Currency swaps - 1
Interest rate swaps 143 143
Option agreements
Bought - 7
Sold - 6
The notional amount of electricity forwards was 356 GWh as
of Dec 31, 2007 and 475 GWh as of Dec 31, 2006.
The notional amount of nickel forwards to hedge stainless steel
prices was 396 tons as of Dec 31, 2007. In the comparison period
Metso had not entered into nickel forwards.
The notional amounts indicate the volumes in the use of
derivatives, but do not indicate the exposure to risk.
KEY RATIOS
1-12/2007 1-12/2006
Earnings per share, EUR 2.69 2.89
Adjusted earnings per
share, EUR 1) 2.69 2.28
Equity/share at end of
period, EUR 11.36 10.21
Return on equity (ROE), %
(annualized) 25.4 30.9
Return on capital employed
(ROCE), % (annualized) 26.1 22.5
Equity to assets ratio at
end of period, % 37.7 35.4
Gearing at end of period, % 33.4 31.3
Free cash flow 198 364
Free cash flow/share 1.40 2.57
Gross capital expenditure
(excl. business
acquisitions) 159 131
Business acquisitions, net
of cash acquired 55 277
Depreciation and
amortization 148 105
Number of outstanding
shares at end of period
(thousands) 141,487 141,359
Average number of shares
(thousands) 141,460 141,581
Average number of diluted
shares (thousands) 141,460 141, 600
1) In 2006, Metso recognized nonrecurring deferred tax
assets totaling EUR 87 million, which improved the
earnings per share by EUR 0.61. Of the deferred tax
asset, EUR 57 million was recognized in the second
quarter of 2006 (impact to EPS EUR 0.40) and EUR 30
million in the last quarter of 2006 (impact to EPS EUR
0.21).
EXCHANGE RATES USED
1-12/2007 1-12/2006 Dec 31, 2007 Dec 31, 2006
USD (US dollar) 1.3797 1.2630 1.4721 1.3170
SEK (Swedish krona) 9.2647 9.2533 9.4415 9.0404
GBP (Pound sterling) 0.6873 0.6819 0.7334 0.6715
CAD (Canadian dollar) 1.4663 1.4267 1.4449 1.5281
BRL (Brazilian real) 2.6623 2.7375 2.5949 2.8105
BUSINESS AREA
INFORMATION
Metso Ventures Business Area was dismantled as of January 1, 2007.
Two of Metso's three foundries were transferred to Metso Paper and
one to Metso Minerals. Metso Panelboard became part of Metso Paper.
Valmet Automotive is reported as part of Corporate Office and others
group. Comparative segment information for 2006 is presented
according to the new organization structure.
Aker Kvaerner's Pulping and Power businesses were acquired as of
December 29, 2006 and the acquired balance sheet was consolidated to
Metso as of December 31, 2006. The acquired businesses had no effect
to Metso's income statement for 2006 and are therefore not included
in the comparative segment information except for capital employed,
order backlog and personnel as at December 31, 2006.
NET SALES
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006 Change, %
Metso Paper 909 717 2,925 2,092 40
Metso Minerals 770 630 2,607 2,199 19
Metso Automation 213 193 698 613 14
Valmet Automotive 21 28 85 109 (22)
Corporate office
and other - 3 - 10 (100)
Corporate office
and others total 21 31 85 119 (29)
Intra Metso net
sales (17) (33) (65) (68)
Metso total 1,896 1,538 6,250 4,955 26
OTHER OPERATING INCOME (+)
AND EXPENSES (-), NET
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Metso Paper (14.3) (10.4) (11.5) (11.0)
Metso Minerals 4.3 10.7 7.7 16.1
Metso Automation 2.1 0.4 2.4 0.3
Valmet Automotive 0.0 0.0 0.0 0.0
Corporate office and other 0.0 (1.1) 2.5 0.4
Corporate office and others
total 0.0 (1.1) 2.5 0.4
Metso total (7.9) (0.4) 1.1 5.8
SHARE IN PROFITS OF ASSOCIATED COMPANIES
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Metso Paper 0.6 0.7 1.1 1.7
Metso Minerals 0.3 0.0 0.3 0.1
Metso Automation 0.1 0.2 1.4 0.8
Valmet Automotive - - - -
Corporate office and other - (0.4) - (1.7)
Corporate office and others
total - (0.4) - (1.7)
Metso total 1.0 0.5 2.8 0.9
OPERATING PROFIT
(LOSS)
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006 Change, %
Metso Paper 39.6 13.2 136.9 89.8 52
Metso Minerals 113.9 90.0 362.6 297.7 22
Metso Automation 34.2 31.8 98.8 86.7 14
Valmet Automotive 0.9 1.0 8.0 11.7 (32)
Corporate office
and other (8.9) (11.0) (26.5) (28.7) (8)
Corporate office
and others total (8.0) (10.0) (18.5) (17.0) 9
Metso total 179.7 125.0 579.8 457.2 27
OPERATING PROFIT
(LOSS), % OF NET
SALES
% 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Metso Paper 4.4 1.8 4.7 4.3
Metso Minerals 14.8 14.3 13.9 13.5
Metso Automation 16.1 16.5 14.2 14.1
Valmet Automotive 4.3 3.6 9.4 10.7
Corporate office
and other n/a n/a n/a n/a
Corporate office
and others total n/a n/a n/a n/a
Metso total 9.5 8.1 9.3 9.2
EBITA
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006 Change, %
Metso Paper 51.5 22.1 184.5 105.6 75
Metso Minerals 115.2 91.1 367.1 302.1 22
Metso Automation 34.7 32.2 100.4 88.3 14
Valmet Automotive 1.0 1.0 8.1 11.7 (31)
Corporate office
and other (8.5) (10.3) (24.7) (26.6) (7)
Corporate office
and others total (7.5) (9.3) (16.6) (14.9) 11
Metso total 193.9 136.1 635.4 481.1 32
EBITA, % OF NET
SALES
% 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Metso Paper 5.7 3.1 6.3 5.0
Metso Minerals 15.0 14.5 14.1 13.7
Metso Automation 16.3 16.7 14.4 14.4
Valmet Automotive 4.8 3.6 9.5 10.7
Corporate office
and other n/a n/a n/a n/a
Corporate office
and others total n/a n/a n/a n/a
Metso total 10.2 8.8 10.2 9.7
ORDERS RECEIVED
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006 Change, %
Metso Paper 838 677 3,109 2,276 37
Metso Minerals 761 705 3,075 2,655 16
Metso Automation 165 162 763 717 6
Valmet Automotive 21 28 85 109 (22)
Corporate office
and other - 4 - 15 (100)
Corporate office
and others total 21 32 85 124 (31)
Intra Metso
orders received (14) (19) (67) (67)
Metso total 1,771 1,557 6,965 5,705 22
QUARTERLY INFORMATION
NET SALES
EUR million 10-12/2006 1-3/2007 4-6/2007 7-9/2007 10-12/2007
Metso Paper 717 666 708 642 909
Metso Minerals 630 540 648 649 770
Metso Automation 193 146 174 165 213
Valmet Automotive 28 28 19 17 21
Corporate office
and other 3 - - - -
Corporate office and
others total 31 28 19 17 21
Intra Metso net
sales (33) (14) (13) (21) (17)
Metso total 1,538 1,366 1,536 1,452 1,896
OTHER OPERATING
INCOME (+) AND
EXPENSES (-), NET
EUR million 10-12/2006 1-3/2007 4-6/2007 7-9/2007 10-12/2007
Metso Paper (10.4) 1.9 (3.3) 4.2 (14.3)
Metso Minerals 10.7 1.2 0.2 2.0 4.3
Metso Automation 0.4 0.5 (0.4) 0.2 2.1
Valmet Automotive 0.0 0.0 0.0 0.0 0.0
Corporate office
and other (1.1) 2.2 0.4 (0.1) 0.0
Corporate office and
others total (1.1) 2.2 0.4 (0.1) 0.0
Metso total (0.4) 5.8 (3.1) 6.3 (7.9)
OPERATING PROFIT
(LOSS)
EUR million 10-12/2006 1-3/2007 4-6/2007 7-9/2007 10-12/2007
Metso Paper 13.2 25.4 35.7 36.2 39.6
Metso Minerals 90.0 67.8 95.7 85.2 113.9
Metso Automation 31.8 15.5 23.3 25.8 34.2
Valmet Automotive 1.0 4.4 1.0 1.7 0.9
Corporate office
and other (11.0) (4.7) (7.4) (5.5) (8.9)
Corporate office and
others total (10.0) (0.3) (6.4) (3.8) (8.0)
Metso total 125.0 108.4 148.3 143.4 179.7
EBITA
EUR million 10-12/2006 1-3/2007 4-6/2007 7-9/2007 10-12/2007
Metso Paper 22.1 37.1 47.7 48.2 51.5
Metso Minerals 91.1 68.7 96.9 86.3 115.2
Metso Automation 32.2 15.9 23.6 26.2 34.7
Valmet Automotive 1.0 4.4 1.0 1.7 1.0
Corporate office
and other (10.3) (4.2) (6.9) (5.1) (8.5)
Corporate office and
others total (9.3) 0.2 (5.9) (3.4) (7.5)
Metso total 136.1 121.9 162.3 157.3 193.9
CAPITAL EMPLOYED
Dec 31, Mar 31, June 30, Sep 30, Dec 31,
EUR million 2006 2007 2007 2007 2007
Metso Paper 616 558 637 593 674
Metso Minerals 949 965 1,030 1,045 1,106
Metso Automation 149 155 189 201 214
Valmet Automotive 23 23 23 29 21
Corporate office and
other 543 564 419 444 419
Corporate office and
others total 566 587 442 473 440
Metso total 2,280 2,265 2,298 2,312 2,434
ORDERS RECEIVED
EUR million 10-12/2006 1-3/2007 4-6/2007 7-9/2007 10-12/2007
Metso Paper 677 653 1,103 515 838
Metso Minerals 705 771 798 745 761
Metso Automation 162 228 185 185 165
Valmet Automotive 28 28 19 17 21
Corporate office
and other 4 - - - -
Corporate office and
others total 32 28 19 17 21
Intra Metso orders
received (19) (16) (15) (22) (14)
Metso total 1,557 1,664 2,090 1,440 1,771
ORDER BACKLOG
Dec 31, Mar 31, June 30, Sep 30, Dec 31,
EUR million 2006 2007 2007 2007 2007
Metso Paper 2,225 2,190 2,584 2,455 2,363
Metso Minerals 1,277 1,497 1,673 1,728 1,690
Metso Automation 276 356 365 382 332
Valmet Automotive - - - - -
Corporate office and other - - - - -
Corporate office and others
total - - - - -
Intra Metso order backlog (41) (44) (48) (46) (44)
Metso total 3,737 3,999 4,574 4,519 4,341
Dec 31, Mar 31, June 30, Sep 30, Dec 31,
PERSONNEL 2006 2007 2007 2007 2007
Metso Paper 11,558 11,469 11,954 11,774 11,694
Metso Minerals 9,433 9,545 9,967 10,194 10,446
Metso Automation 3,352 3,379 3,564 3,523 3,564
Valmet Automotive 1,013 899 782 777 789
Corporate office and other 322 324 342 335 344
Corporate office and others
total 1,335 1,223 1,124 1,112 1,133
Metso total 25,678 25,616 26,609 26,603 26,837
Notes to the Financial Statements Release
This Financial Statements Release has been prepared in accordance
with IAS 34 'Interim Financial Reporting'. The same accounting
policies have been applied as in the annual financial statements.
Tax losses carried forward and related deferred tax assets as at
December 31 stated by the most significant countries are as follows:
Tax losses Deferred tax
carried Deferred tax asset in
EUR million forward asset Not recorded balance sheet
2006
Finland 164 43 0 43
USA 77 32 0 32
Germany 51 19 0 19
Other 92 27 10 17
Total 384 121 10 111
Tax losses Deferred tax
carried Deferred tax asset in
EUR million forward asset Not recorded balance sheet
2007
Finland 64 17 0 17
USA *) 43 4 0 4
Germany 33 9 0 9
Other 61 16 5 11
Total 201 46 5 41
*) Main part of the remaining losses
concern state taxes.
Changes in accounting policies and new accounting standards
Prior to 2007 Metso had applied the corridor method in recognizing
the actuarial gains and losses related to its defined post-employment
schemes. Under the corridor method, the accumulated actuarial gains
and losses are expensed over the expected average remaining working
lives of employees in the plan.
At the beginning of 2007, Metso adopted the amendment to IAS19
'Employee benefits', which permits the recognition of all actuarial
gains and losses in the period in which they occur outside the income
statement directly in shareholders' equity. This policy was adopted
to improve the transparency of Metso's financial statements. The
comparative figures are also presented correspondingly. The change in
accounting policy decreased the shareholders' equity, net of tax, by
EUR 24 million in 2006 (EUR 27 million in 2005) and increased the
pension liability by EUR 34 million at December 31, 2006 (EUR 40
million at December 31, 2005).
IFRS 8
In November 2006, IASB issued IFRS 8 'Operating Segments', which
requires the company to adopt the 'management approach' to reporting
on the financial performance of its operating segments. Thus, the
information to be reported would be what management uses internally
for evaluating segment performance. Metso is currently evaluating the
effects to its financial statements, however, it expects the standard
not to impact its current segment structure.
IFRS 8 is effective for annual financial statements for periods
beginning on or after January 1, 2009. Earlier adoption is permitted.
Metso will apply the standard for the financial year beginning on
January 1, 2009.
IFRIC 14
IASB has published IFRIC 14, 'IAS 19 - The Limit on a Defined Benefit
Asset, Minimum Funding Requirements and their Interaction'. The
interpretation is applied to post-employment defined benefit plans
and other long-term defined benefit plans under IAS 19, if the plan
includes minimum funding requirements. The interpretation also
clarifies the criteria for recognition of an asset on future refunds
or reductions in future contributions. Metso does not expect the new
requirements to have a material impact to its financial statements.
IFRIC 14 is effective for annual financial statements for periods
beginning on or after January 1, 2008. The interpretation is still
subject to endorsement by the European Union.
Pending on endorsement by the European Union, Metso should apply the
standard for the financial year beginning on January 1, 2008.
IAS 1 (Revised)
IASB has published IAS 1 (Revised) 'Presentation of Financial
Statements'. The revised standard is aimed at improving users'
ability to analyse and compare the information given in financial
statements by separating changes in equity of an entity arising from
transactions with owners from other changes in equity.
IAS 1 (Revised) is effective for annual financial statements for
periods beginning on or after January 1, 2009. The standard is still
subject to endorsement by the European Union.
Provided the standard is endorsed by the Europen Union before the end
of 2008, Metso will apply the standard for the financial year
beginning on January 1, 2009.
IFRS 3 (Revised)
IASB has published IFRS 3 (Revised), 'Business combinations'. The
revised standard continues to apply the acquisition method to
business combinations, with some significant changes, such as
expensing of transaction costs. In addition, all payments to purchase
a business are to be recorded at fair value at the acquisition date,
with some contingent payments subsequently remeasured at fair value
through income. Goodwill may be calculated based on the parent's
share of net assets or it may include goodwill related to the
minority interest. Metso is currently evaluating the effects to its
financial statements.
IFRS 3 (Revised) is effective for annual financial statements for
periods beginning on or after July 1, 2009. The standard is still
subject to endorsement by the European Union.
Provided the revision receives the endorsement by the European Union,
Metso will apply the standard for the financial year beginning on
January 1, 2010.
IAS 23 (Amended)
IASB has published Amendment to IAS 23 'Borrowing Costs', which
requires an entity to capitalize borrowing costs directly
attributable to the acquisition, construction or production of
qualifying asset as part of the cost of that asset. A qualifying
asset can be intended for its own use (self-constructed asset) or for
sale. The option of immediately expensing those borrowing costs will
be removed. The amendment does not change the accounting policy
applied by the group to self-constructed assets and therefore, should
not have material impact on the group's financial statements, however
the implementation of the amendment to qualifying assets for sale is
under review and its effects are being evaluated by Metso.
The amendment is effective for annual periods beginning on or after
January 1, 2009. The standard is still subject to endorsement by the
European Union.
Provided the amendment receives the endorsement by the European
Union, Metso will apply the standard for the financial year beginning
on January 1, 2009.
IAS 27 (Revised)
IASB has published IAS 27 (Revised), 'Consolidated and separate
financial statements'. The revised standard requires the effects of
all transactions with non-controlling interests to be recorded in
equity if there is no change in control. They will no longer result
in goodwill or gains and losses. The standard also specifies the
accounting when control is lost. Any remaining interest in the entity
is remeasured to fair value and a gain or loss is expensed. Metso is
currently evaluating the effects to its financial statements.
IAS 27 (Revised) is effective for annual financial statements for
periods beginning on or after July 1, 2009. The standard is still
subject to endorsement by the European Union.
Provided the revision receives the endorsement by the European Union,
Metso will apply the standard for the financial year beginning on
January 1, 2010.
Shares traded on the Helsinki and New York Stock Exchanges
The number of Metso Corporation shares traded on the OMX Nordic
Exchange Helsinki during 2007 was 350 million shares, equivalent to a
turnover of EUR 14,508 million. The share price on December 31, 2007
was EUR 37.33, and the average trading price for the year was EUR
41.43. The highest quotation during the review period was EUR 49.95
and the lowest EUR 34.06.
The trading of Metso ADSs (American Depositary Shares) on the New
York Stock Exchange was terminated on September 14, by which time
approximately 6 million Metso ADSs, equivalent to a turnover of USD
344 million, had been traded since the beginning of 2007. The highest
price of Metso's ADS in the United States in 2007 was USD 70.62, and
the lowest USD 46.18. At the end of the year, the price of an ADS was
USD 53.70. Each ADS represents one share.
Disclosures of changes in holdings
Only one disclosure of a change in holdings was received during the
year. J.P. Morgan Chase & Co. announced that the funds they managed
held 6,996,732 Metso shares/ADSs on February 12, 2007 corresponding
to 4.94 percent of the paid up share capital of Metso.
Metso Corporation
Olli Vaartimo Kati Renvall
Executive Vice President and CFO Vice President,
Corporate Communications
Distribution:
OMX Nordic Exchange Helsinki
The media
www.metso.com
For further information, please contact:
Jorma Eloranta, President and CEO, Metso Corporation, tel. +358
(0)204 84 3000
Olli Vaartimo, Executive Vice President and CFO, Metso Corporation,
tel. +358 (0)204 84 3010
Johanna Sintonen, Vice President, Investor Relations, Metso
Corporation, tel. +358 (0)204 84 3253
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.
Metso is a global engineering and technology corporation with 2006
net sales of approximately EUR 5 billion. Its more than 26,000
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.
www.metso.com
