Stock Exchange release November 10, 1999 10:00:00 AM CET

Metso's strategic intent: HEALTHY GROWTH THROUGH INNOVATIONS AND NEW CUSTOMER SERVICE CONCEPT

Metso Corporation's strategic goal is rapid healthy growth. The strategy of organic growth supported by acquisitions is designed to counterbalance the cyclicality of business operations and to increase Metso's earning power. Metso's long term financial targets are to achieve an average EBIT margin of 9 percent and ROCE of 20 percent.

According to the President and CEO Heikki Hakala, Metso will not seek growth and improved profitability through acquisitions only. There is a strong belief in own know-how. "All the Metso business areas are know for innovations. For instance, nearly 1 400 people work at our 20 research and development centers around the world," Hakala states. "When Metso's know-how fields are brought together, they produce an innovation potential that we will harness as an engine of growth. This strategy will shift the focus within Metso to the development of technology and expertise."

In accordance with its new strategy, Metso focuses on its customers' core processes, processes that are of crucial importance for the success of the customer. Another goal of the strategy is to balance Metso's structure. "In the fiber and paper technology business, the main goal will be a radical improvement of profitability," Heikki Hakala says. "The rock and mineral processing technology business, which is of less cyclical character, will be expanded and it will become a second profitable growth platform. Automation and control technology know-how will for its turn play a key role in the development of the new customer service concept, creating a unique opportunity of internal growth for the automation and control technology business. Process automation has a key role in searching for new growth."

The new customer service concept Future Care will be another engine of growth, with Metso intent on taking an increased share of the service and upgrading market, which is growing faster than the investment market for new machinery and plants. "The model we have named Future Care is aimed at securing the competitive edge of our customers in a changing business environment," says Sakari Tamminen, Metso Senior Vice-President, CFO.

The Future Care approach ties together all the Metso service know-how from project planning all the way to maintenance and upgrading. "Combining automation and process know-how will open a new window on service. For instance, a paper machine operating in France can be controlled from Tampere, Finland," Tamminen elaborates. "Metso's maintenance and upgrading business owes its sharpest competitive edge to its market share. Metso's core businesses are market leaders in their own fields and their current installed base provides a platform for organic growth of the maintenance and upgrading business. This combination will create significant outlook for the development of fiber and paper technology, for instance."