Stock Exchange release October 4, 2002 12:05:27 PM CET
METSO MINERALS' OPERATIONAL INTEGRATION CONCLUDED AS PLANNED
Metso reports that the timing of the integration of the Svedala businesses into Metso Minerals has proceeded as planned since their acquisition in September 2001, while results have been better than anticipated. At the beginning of the integration process it was estimated that the annual synergy benefits would amount to EUR 70 million, to be realized in full during 2003. During the integration process, the target has been revised upwards to in excess of EUR 90 million, of which half is expected to be realized already in 2002.
The synergy benefits have been revised upwards because of better than expected results in the restructuring of manufacturing capacity and the combining of the distribution organizations.
Metso Minerals has made decisions about selling or closing 12 production units, mainly in North America. Of these, 9 had already been sold or closed by the end of September 2002 and the rest will be concluded by the end of the year. The integration of distribution operations has been completed and as a result about 70 distribution and service units have been closed.
These decisions will reduce the number of personnel by about 1,800 from the beginning of integration to the end of 2002. At the end of June 2002, the amount of Metso Minerals' personnel was 11,040.
In addition, four non-core businesses – Robot Pumps, Kranlyft, Interconsult and Rolac - have been sold or shut down. The combined external net sales of the units totaled EUR 79 million in 2001.
One-time costs of the integration and restructuring, including related tax benefits, will be approx. EUR 70 million, as estimated in the beginning of the process.
Following the success of the operational integration, the integration process is now focusing on the further reduction of working capital. Metso set a target of releasing approx. EUR 350 million of capital employed during the first 18 months following the acquisition, by the end of March 2003. By the end of September 2002 more than half of this had been realized. It is planned that the rest of the target will be realized by reducing inventories and receivables. Metso Minerals will also sell several production and distribution facilities which have become surplus due to the completed restructuring measures.
Following the acquisition and integration, Metso Minerals is the clear global market leader in supplying solutions, equipment and aftermarket services for rock and mineral crushing processes. The main customer segments are civil engineering contractors, quarries and mines. The acquisition of Svedala strengthened Metso Minerals especially in the mining industry and in aftermarket operations. Consolidation among customers and their widening scope of activities increases demands on equipment suppliers to provide comprehensive solutions alongside individual products globally. Benefits of Metso Minerals’ enhanced market position are beginning to show e.g. through comprehensive service contracts with mining and quarrying customers. In addition, integration of automation know-how in Metso Minerals products enables the development of new generation automation systems in rock and mineral processing solutions which will strengthen Metso Minerals' market position.
Metso Corporation is a global supplier of process industry machinery and systems, as well as know-how and aftermarket services. The corporation's core businesses are fiber and paper technology (Metso Paper), rock and mineral processing (Metso Minerals) and automation and control technology (Metso Automation). In 2001, the net sales of Metso Corporation were EUR 4.3 billion and the personnel totaled approximately 30,000. Metso Corporation is listed on the Helsinki and New York Stock Exchanges.