Stock Exchange release March 31, 2009 02:00:00 PM CET
Metso's Annual General Meeting, March 31, 2009: President and CEO Jorma Eloranta's review
Metso Corporation's company release, March 31, 2009 at 3:00 p.m.
At Metso Corporation's Annual General Meeting starting at 3:00 p.m. today, President and CEO Jorma Eloranta reports that Metso's operating environment and business at the beginning of the year have been as anticipated: "Our January-February net sales and profit development support this year's financial performance estimate we gave in conjunction with the publication of our financial statements."
In its financial statements release of February 4, 2009, Metso estimated that its 2009 total net sales will exceed EUR 5 billion, and profitability is expected to be satisfactory in 2009. Free cash flow is expected to improve considerably on 2008.
"Metso's order intake in October-December 2008 dropped to a clearly lower level than before. There haven't been significant changes in the markets during the first few months of this year. It is positive to note that during the beginning of the year there were only minor cancellations or postponements of projects in the order backlog."
"The market for new equipment is slow. January-February net sales in the services business have remained nearly at the previous year's level. The market situation is most difficult in the pulp and paper industry, in construction and in metal recycling. In the power plant sector, there are active sales negotiations under way for new projects, but the decision making process is slower than before," Eloranta notes. "It is still too early to say when and how the stimulus packages of different countries will affect e.g. the demand for our construction products and energy solutions."
In response to the changes in the market situation, Metso has initiated measures to adjust capacity in several countries. "We have reduced the use of temporary labor and subcontractors in all of our units. We have also conducted reorganizations of our operations. Unfortunately, we have not been able to avoid permanent and temporary employee reductions. With these actions and strict cost control, we have aimed to swiftly bring our costs in line with the drop in demand," Eloranta says.
In his review, Eloranta underscores that today Metso is more flexible and operationally diverse than in the previous economic downturn: "We are following market developments very closely, and we are prepared to take quick actions if the situation so requires. Our goal is for Metso to come out of this recession stronger than our competitors."
Eloranta says that one of Metso's main goals this year is to improve cash flow: "We have initiated specific measures to release working capital. Early-year developments have been encouraging, and I believe that in our first-quarter financial review at the end of April we will be able to report positive performance in this area."
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 29,000 employees in more than 50 countries. www.metso.com
For further information, please contact:
Jorma Eloranta, President and CEO, Metso Group, tel. +358 20 484 3000
For further information for investors, please contact:
Johanna Sintonen, Vice President, Investor Relations, Metso Group, tel. +358 20 484 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.