Stock Exchange release December 18, 2008 12:00:00 PM CET

Metso updates operating environment and demand outlook

Metso Corporation's Company release on December 18, 2008 at 1.00 p.m.
 
Metso is publishing a trading update due to further weakening in its operating environment and demand outlook since the publication of the third-quarter interim review in the end of October. Metso's order intake in October-November was clearly lower than a year ago and timing of some 20 percent of current order backlog can be considered uncertain. Metso's net sales and operating profit continued to develop in October-November in line with Metso's full year guidance. Metso's short-term and long-term liquidity and balance sheet structure continue to be satisfactory.
 
A majority of Metso's customers are currently hesitant to make new investment commitments due to the uncertain economic environment. Metso's order intake slowed down in October-November and orders received in the first eleven months of 2008 were EUR 6.1 billion, which is about 4 percent less than during the same period in 2007.
 
In October-November, Metso booked new orders worth EUR 735 million. At the same time, about EUR 100 million of orders were cancelled from the order backlog, so the net order intake for October-November was EUR 635 million. The decline in order intake was coming from all businesses and was strongest in pulp and paper orders.
 
At the end of November, Metso's order backlog was at EUR 4.8 billion. Timing of about 20 percent of the order backlog can be considered uncertain, meaning that some customers have initiated discussions with Metso about either extending the delivery times or putting the projects on hold.
 
Metso is taking actions to prepare for the possibility of prolonged weakening in demand by prioritizing profitability improvement and cash generation in the short term. Actions to adjust capacity to lower demand levels have started in early October and are continuing into 2009. Initially the capacity adjustments have focused on reducing the use of temporary work force and subcontractors. In some units, primarily in Finland and Sweden, Metso has also initiated temporary lay-offs of personnel or permanent reductions of personnel.
 
The recent weak order intake is not estimated to have material impact on the 2008 performance. In 2008, Metso's operating profit margin is estimated to be about 10 percent and net sales, at comparable exchange rates, are expected to grow by about 5 percent on 2007 (previously net sales growth of 5-10 percent).
 
Metso will publish its financial statements for 2008 on February 4, 2009.
 
 
Metso is a global supplier of sustainable technology and services for mining, construction, power generation, automation, recycling and the pulp and paper industries. We have over 28,000 employees in more than 50 countries. www.metso.com
 
Further information, please contact:
Mr. Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 20 484 3000
Mr. Olli Vaartimo, Executive Vice President, Metso Corporation, tel. + 358 20 484 3010
Ms. Johanna Sintonen, Vice President, Investor Relations, Metso Corporation, tel. +358 20 484 3253
 
 
Metso Corporation
 
Olli Vaartimo
Executive Vice President and CFO
 
Kati Renvall
Vice President, Corporate Communications
 
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com