Short-term outlook
This short-term outlook was published in accordance of Metso's Financial Statement Review 2009 on February 8, 2010.
In the fourth quarter of 2009 we began to see the fi rst signs of gradual recovery in the global economy and in the demand of some of our customer industries. Nevertheless, we estimate that our operating environment will continue to be demanding at least in the fi rst half of 2010.
Our customers are still cautious in their investment decisions, which will affect our equipment and project businesses in particular. We estimate that our customers’ capacity utilization rates will slowly improve, assuming that the general positive development of the global economy continues. We expect this to have a gradual positive effect on our services business.
There have been signs of improvement in mining companies’ demand for equipment and projects. We expect that this will gradually have a positive impact on orders in 2010. Due to our strong product and services offering, as well as our large installed equipment base, we expect the demand for our mining equipment spare and wear parts as well as related services to gradually improve from the current level.
We anticipate that demand for equipment used in aggregates production by the construction industry will continue to be weak, with the exception of the Asia-Pacific and Brazilian markets, where infrastructure construction projects are maintaining demand. Many countries have introduced stimulus measures relating to infrastructure development. Though these measures have not yet had any significant effect, we expect them to positively affect the demand in the long-term. We estimate that demand for our services business for the construction industry will remain satisfactory.
Demand for power plants that utilize renewable energy sources is expected to strengthen in Europe and North America and to be good as the availability of financing improves. Several countries have published targets to increase the use of renewable energy. This is expected to support demand for our
power plant solutions fuelled by biomass and waste. Demand for services business is expected to be satisfactory.
We estimate that demand for our automation products will gradually increase in 2010, as the oil, gas and petrochemical industries increase their investments due to the improvement in energy prices and demand. Demand for our services business for automation solutions is expected to be satisfactory.
We expect the demand for metal recycling equipment to be weak due to the low production volumes of steel, and demand for solid-waste recycling equipment to be satisfactory. Demand for services in metal recycling is expected to remain weak in 2010.
We estimate that demand for new fiber lines will continue to be weak, but demand for rebuilds and services will strengthen during the year. Demand for paper, board and tissue lines is expected to be satisfactory. We expect the capacity utilization rates of the paper and board industry to improve during the year, which should gradually increase the demand for our services business.
We estimate our net sales in 2010 to remain at about the same EUR 5 billion level as in 2009, and profitability to remain satisfactory. Our estimate is based on our order backlog, which contains about EUR 2.7 billion worth of deliveries for 2010, and on the expectation of continued gradual recovery of global economy.
The net sales and profitability estimates are based on Metso’s current market outlook and business scope.
Last updated: Feb 08, 2010
