Metso Corporation Press release on September 2, 2008 at 8.15 a.m.
Metso is arranging a Capital Markets Day (CMD) event for analysts and
investors in Helsinki and Tampere, Finland on September 2 and 3,
2008. The event focuses on Metso's profitable growth strategy for
2008-2012. In addition to updates of Metso businesses, the
construction business will be discussed in more detail.
All Capital Markets Day presentations are available on the Internet
at www.metso.com. Today's seminar program will be available at
www.metso.com and all the presentations can be followed live through
a webcast at the same site."We continue to focus on sustainable profitable growth through 2012.
Many global megatrends are supporting this and we continue to see a
lot of improvement potential in all our business," says Jorma
Eloranta, President and CEO of Metso Corporation. "At the CMD we
concentrate on giving longer-term view on Metso, our business
environment and opportunities in line with our strategy's four-year
perspective. Despite the current uncertainties in world economy we
are ready to raise our ambition level. We continue our efforts to
make our business and earnings sustainable and less vulnerable to
business cycles. In a more near-term perspective and based on the
recent large orders, we expect the order backlog at the end of the
third quarter to be strong, and thus providing solid outlook for
2009," says Eloranta.
In explaining the new, long-term financial targets for 2009-2012
Metso's CFO Olli Vaartimo comments: "We are targeting growth of over
10% growth in our mining and construction businesses as well as in
the energy and environment businesses. The growth in our paper and
fiber businesses is expected to come mainly from the services, and to
be below 10%. We expect growth of services to be an important driver
in all businesses. We estimate services eventually to represent about
40% of our net sales compared to 35% currently. Emerging markets are
also an important growth driver for us representing in the future
about 50% of our new orders. The new EBITA margin target of >12%
means about 1.5 percentage points upgrade on the previous >10% EBIT
margin target. All our businesses are expected to contribute to the
profitability improvement. In Mining and Construction Technology
reporting segment as well as in Energy and Environment Technology
profitability is expected to be primarily linked to volume leverage
and increased share of the services business. In Paper and Fiber
Technology we continue to target overall profitability improvement;
coming both from capital equipment business and from increased share
of the services business," says Vaartimo.
The following presents the historical pro forma financials of Metso's
new reporting segments Mining and Construction Technology, Energy and
Environment Technology and Paper and Fiber Technology.
Preliminary pro forma key ratios of new reporting segments
Mining and Construction Technology
EUR million 2006 2007 1-6/2007 1-6/2008
Orders received 2,374 2,773 1,407 1,621
Orders received growth, % 17% 15%
Net sales 1,934 2,326 1,075 1,198
Net sales growth, % 20% 11%
Earnings before interest, tax and
amortization (EBITA) 265 320 149 171
% of net sales 13.7% 13.7% 13.8% 14.3%
Capital employed 908 1,022 1,091 1,253
Return on capital employed (ROCE), % 23.1% 32.9% 30.7% 30.2%
Order backlog 1,088 1,512 1,448 1,849
Personnel 8,790 9,825 9,308 10,487
Energy and Environment Technology
EUR million 2006 2007 1-6/2007 1-6/2008
Orders received 976 1,887 1,148 744
Orders received growth, % 9% -35%
Net sales 873 1,545 697 849
Net sales growth, % 12% 22%
Earnings before interest, tax and
amortization (EBITA) 125 177 71 84
% of net sales 14.3% 11.5% 10.2% 9.9%
Capital employed 369 512 435 528
Return on capital employed (ROCE), % 33.9% 30.2% 25.8% 26.3%
Order backlog 1,189 1,374 1,465 1,248
Personnel 5,532 5,883 5,814 6,327
Paper and Fiber Technology
EUR million 2006 2007 1-6/2007 1-6/2008
Orders received 2,276 2,290 1,183 872
Orders received growth, % 1% -26%
Net sales 2,092 2,360 1,109 975
Net sales growth, % 13% -12%
Earnings before interest, tax and
amortization (EBITA) 106 150 68 56
% of net sales 4.7% 6.6% 5.8% 6.4%
Capital employed 416 439 468 591
Return on capital employed (ROCE), % 38.6% 34.0% 28.5% 19.0%
Order backlog 1,498 1,529 1,709 1,438
Personnel 10,027 10,094 10,361 10,089
The presentation of Metso CFO Olli Vaartimo includes previously
undisclosed historical information of certain Metso businesses, which
is summarized in the following.
Profitability (EBITA% and ROCE %)
2006 2007
EBITA % ROCE % EBITA% ROCE%
Recycling 14.6% 56.9% 15.2% 58.6%
Power N/A N/A 6.2% 2.9%
Automation 14.2% 78.4% 14.2% 54.4%
Paper and Board 6.8% 39.7% 7.7% 42.1%
Fiber 3.0% 16.4% 4.8% 18.7%
The presentation of Olli Vaartimo also includes previously
undisclosed historical free cash flow information by the Metso's
current business areas, which is summarized in the following.
1-6/2008
CO &
Minerals Paper Auto-mation Auto-motive other Metso
Net sales 1,321 1,349 352 42 -31 3,033
Operating profit 183 60 43 2 -14 275
% of net sales 13.9% 4.5% 12.2% 4.5% n/a 9.1%
Amortization 3 21 1 0 1 25
Earnings before
interest, tax and
amortization
(EBITA) 186 81 44 2 -13 300
% of net sales 14.1% 6.0% 12.5% 4.5% n/a 9.9%
Depreciation and
other adjustments 20 20 4 4 7 55
Change in net
working capital -132 -104 -14 -4 0 -254
Investment
activities -20 -27 -7 -1 -2 -57
Interest paid and
dividend received
x) -10 -10
Income tax paid x) -74 -74
FREE CASH FLOW 54 -29 28 1 -93 -40
Financing items and taxes are reported under Corporate
x) Office without allocating them to the business areas.
1-12/2007
CO &
Minerals Paper Auto-mation Auto-motive other Metso
Net sales 2,607 2,925 698 85 -65 6,250
Operating profit 363 137 99 8 -27 580
% of net sales 13.9% 4.7% 14.2% 9.4% n/a 9.3%Amortization 5 48 1 0 2 56
Earnings before
interest, tax and
amortization
(EBITA) 367 185 100 8 -25 635
% of net sales 14.1% 6.3% 14.4% 9.5% n/a 10.2%
Depreciation and
other adjustments 33 49 6 9 -9 88
Change of net
working capital -143 -76 -62 -4 -1 -286
Investment
activities -28 -50 -10 -4 -4 -95
Interest paid and
dividend received
x) -29 -29
Income tax paid x) -114 -114
FREE CASH FLOW 229 108 34 9 -182 198
Financing items and taxes are reported under Corporate
x) Office without allocating them to the business areas.
Metso is a global engineering and technology corporation with 2007
net sales of over EUR 6 billion. Its over 27,000 employees in
approximately 50 countries serve customers in the pulp and paper
industry, rock and minerals processing, the energy industry and
selected other industries.
www.metso.com
For more information, please contact:
Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 204
84 3000
Olli Vaartimo, Executive Vice President and CFO, Metso Corporation,
tel. +358 204 84 3010
Further information for investors, please contact:
Johanna Sintonen, Vice President, Investor Relations, Metso
Corporation, tel. +358 20 484 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 Corporation
Olli Vaartimo
Executive Vice President and CFO
Kati Renvall
Vice President, Corporate Communications
Distribution:
OMX Nordic Exchange in Helsinki
Media
www.metso.com