Short-term outlook

This is the short-term outlook from Metso's 2008 January-September interim report published on October 28, 2008.

Metso’s profit estimate for 2008 remains unchanged on the basis of the order backlog and profit development during January-September. At comparable exchange rates, Metso’s net sales in 2008 are expected to grow by 5-10 percent compared with 2007, and the operating profit margin is estimated to be about 10 percent.

The uncertainty regarding the financial markets and the development of the global economy is expected to affect the demand for Metso’s products and services during the coming months.

Mining companies are expected to continue with capacity expansion projects despite the growing concern about the global economy, but demand is expected to level off. In the construction industry, the demand for equipment relating to aggregates production is estimated to be good in the emerging markets but to slow down in the developed markets. In the mining and construction industry, the demand for the services business is expected to remain good owing to the rapid growth of the equipment base installed over the past few years.

The demand for paper and board lines is expected to be weak in 2009. The demand for fiber lines is also expected to slow down. The delivery schedules of large paper and board machine and fiber line projects in the order backlog may be prolonged. In the pulp and paper industry, lower capacity utilization rates are expected to weaken the demand for Metso’s services business in North America and Europe.

The demand for power plants using renewable energy sources is expected to be satisfactory in Europe and North America. The demand for Metso’s automation products is expected to be satisfactory in the pulp and paper industry and good in the power, oil and gas industry. The demand for metals recycling equipment is expected to be good.

Metso’s customers operate in different industrial sectors. Metso’s operations have a wide geographical spread, and Metso has a strong market position in many products. The services business, subcontracting and emerging markets have rapidly become more important for Metso over the past few years. Metso’s management estimates that the measures carried out in recent years have placed Metso in a better position to weather storms in the global economy. In the past few weeks Metso has launched new measures to adapt to its rapidly-changing operating environment. Metso’s priorities are to secure new orders, continue strict cost control and to secure healthy cash flows. All potential investments and M&A activities will be critically evaluated. The company is quickly adjusting its capacity to meet demand.

As there is a lot of uncertainty associated with the development of the global economy and Metso’s operating environment, Metso will, before publishing 2008 financial statements, refrain from establishing a guidance for its net sales and profitability in 2009.

Metso’s Financial Statements for 2008 will be published on February 4, 2009.