Stock Exchange release April 27, 2007 11:00:56 AM CET
Metso's Interim Review, January 1 - March 31, 2007
A news conference will be held today on April 27, 2007 at 1:30 p.m. in Finnish and at 3:00 p.m. in English at Metso's Corporate Office, Fabianinkatu 9 A, Helsinki, Finland. The English-language news conference can be followed on the Internet at www.metso.com.
Metso's Interim Review, January 1 - March 31, 2007
Profitable growth continued
Highlights of the first quarter
New orders worth EUR 1,664 million were received in January-March, i.e. 16 percent more than in the corresponding period last year (EUR 1,437 million in Q1/06).
The order backlog grew by 7 percent from the end of 2006 and was EUR 3,999 million at the end of March (EUR 3,737 million on Dec. 31, 2006).
Net sales increased by 27 percent and totaled EUR 1,366 million (EUR 1,078 million in Q1/06).
Earnings before interest, tax and amortization (EBITA) were EUR 121.9 million, i.e. 8.9 percent of net sales (EUR 99.9 million and 9.3% in Q1/06).
Operating profit (EBIT) was EUR 108.4 million, i.e. 7.9 percent of net sales (EUR 95.4 million and 8.8% in Q1/06).
Earnings per share were EUR 0.50 (EUR 0.47 in Q1/06).
Free cash flow was EUR 97 million (EUR 152 million in Q1/06).
Return on capital employed (ROCE) was 20.7 percent (20.2% in Q1/06).
"Metso's January - March order intake was strong, and our order backlog has further strengthened from the record-high year-end figures. This, together with the continuing favorable market outlook, gives us confidence about the rest of the year and beyond," says Jorma Eloranta, President and CEO, Metso Corporation.
Eloranta notes that Metso's financial performance was solid despite seasonal factors that are typical for the first quarter. "Our net sales grew significantly over the same period in 2006. Much of the growth is due to our expanded business scope, i.e. the acquisition of the Pulping and Power businesses, but even organically we delivered some 10 percent growth. Also our operating profit improved on the first quarter of 2006."
Eloranta says that Metso's outlook for 2007 continues to be favorable. "The financial performance for the rest of the year is expected to be stronger than in the first quarter of 2007. Furthermore, we repeat our estimate that our net sales will grow by more than 20 percent on 2006 and that the operating profit will clearly improve."
The favorable market outlook for Metso's products and services is expected to continue for the rest of 2007.
Metso Paper's market situation is estimated to continue much the same as in the year's first quarter. The demand for paper, board and tissue machines and for fiber lines is expected to be satisfactory. The demand for power plants is estimated to be good. Also the demand for Metso Paper's aftermarket services is expected to remain satisfactory.
Metso Minerals' favorable market outlook is expected to continue. The demand is anticipated to remain at the first quarter's excellent level in the mining and metals recycling industries, and at a good level in the construction industry. The demand for aftermarket services is expected to remain excellent.
Metso Automation's market outlook in the pulp and paper customer segment is estimated to be good. In the power, oil and gas industries, the demand is expected to be good in process automation systems and excellent in flow control systems.
It is estimated that Metso's financial performance for the rest of the year will be stronger than in the first quarter. Metso's net sales in 2007 are estimated to grow by more than 20 percent on 2006, thanks to the strong order backlog, continuing favorable market situation and the expanded business scope. The operating profit in 2007 is estimated to clearly improve. It is estimated that the operating profit margin in 2007 will be slightly below Metso's target, which is over 10 percent. This is primarily due to the high first-year amortization of intangible assets, integration costs and only partially materializing synergy benefits related to the acquisition of the Pulping and Power businesses.
The estimates concerning financial performance are based on Metso's current structure, order backlog and market outlook.
Publication dates for Metso's Interim Reviews in 2007
Metso's Interim Review for January - June will be published on July 26, 2007,
Interim Review for January - September on October 25, 2007.
Metso is a global engineering and technology corporation with 2006 net sales of approximately EUR 5 billion. Its 25,500 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries.
For further 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
Johanna Sintonen, Vice President, Investor Relations, Metso Corporation, tel. +358 204 84 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.