Stock Exchange release July 29, 2010 11:00:00 AM CET

Metso Corporation's Interim Review, January 1- June 30, 2010

Metso Corporation's stock exchange release on July 29, 2010 at 12:00 p.m.

Metso's positive development continued

Highlights of the second quarter of 2010

  • New orders worth EUR 1,671 million were received in April-June, i.e. 64 percent more than in the comparison period (EUR 1,020 million in Q2/2009).

  • At the end of June, the order backlog was up by 22 percent on the end of December 2009, and totaled EUR 4,176 million (EUR 3,415 million at December 31, 2009).

  • Net sales increased by 10 percent on the comparison period, and were EUR 1,370 million (EUR 1,247 million in Q2/2009).

  • Earnings before interest, tax and amortization (EBITA) were EUR 154.2 million, i.e. 11.3 percent of net sales (EUR 74.7 million and 6.0% in Q2/2009).

  • Operating profit (EBIT) was EUR 140.0 million, i.e. 10.2 percent of net sales (EUR 65.9 million and 5.3% in Q2/2009).

  • From Q2/2010 onwards, Metso will replace EBITA with EBITA before non-recurring items in order to improve comparability and to give a better view of the underlying operational performance. EBITA before non-recurring items in the second quarter was EUR 125.0 million, i.e. 9.1 percent of net sales (EUR 84.9 million and 6.8% in Q2/2009).

  • EBITA and EBIT include as a whole EUR 29.2 million of positive non-recurring items (EUR 10.2 million negative non-recurring items in Q2/2009).

  • Earnings per share were EUR 0.56 (EUR 0.26 in Q2/2009).

  • Free cash flow was EUR 164 million (EUR 80 million in Q2/2009).

  • Return on capital employed (ROCE) before taxes was 12.6 percent (9.3% in Q2/2009).

"As we have previously estimated Metso's positive development continued in the second quarter. The overall positive tone in the global economy and the recovery of demand remains in most of our customer industries, especially in the emerging economies", says Metso's President and CEO Jorma Eloranta.

"I am happy that all our key figures improved, not only compared to the second quarter of 2009 but also from the first quarter of this year. The improvement was thanks to steadily recovering demand, our improved competitiveness and continuously strengthening global presence. I am particularly pleased with the significant profitability improvement in our Paper and Fiber Technology segment.

We estimate that the overall positive mood in the global markets will continue despite some restlessness in the European financial markets. We are closely monitoring the situation and have so far not seen material impact on our global trading environment as evidenced by our strong order intake during the second quarter.

We have revised our net sales guidance based on positive developments, such as our increased order backlog and the expectation that the recovery of the global economy will continue. We now estimate that our net sales in 2010 will grow about 10 percent from the EUR 5 billion level of 2009. Our profitability guidance is intact: we expect our profitability to be satisfactory."

Metso's key figures

EUR million Q2/10 Q2/09 Change

%
Q1-Q2/

10
Q1-Q2/

09
Change

%
2009
Net sales 1,370 1,247 10 2,540 2,467 3 5,016
Net sales of services business 612 535 14 1,123 1,054 7 2,102
% of net sales 45 43
45 43
42
Earnings before interest, tax and

amortization (EBITA) and non-

recurring items *)






125.0






84.9






47






212.6






176.7






20






399.0
% of net sales 9.1 6.8
8.4 7.2
8.0



EBITA



154.2



74.7



106



238.0



143.5



66



334.3
% of net sales 11.3 6.0
9.4 5.8
6.7
Operating profit 140.0 65.9 112 209.5 124.5 68 293.6
% of net sales 10.2 5.3
8.2 5.0
5.9
Earnings per share, EUR 0.56 0.26 115 0.76 0.44 73 1.06
Orders received 1,671 1,020 64 3,037 1,962 55 4,358
Order backlog at end of period


4,176 3,512 19 3,415
Free cash flow 164 80 105 199 200 -1 717
Return on capital employed (ROCE)

before taxes, annualized, %






12.6



9.3




10.0
Equity to assets ratio at end of

period,%






35.6



31.7




35.7
Gearing at end of period, %


28.5 70.2
32.5

*) From the second quarter 2010 onwards, Metso will in its financial reporting replace earnings before interest, tax and amortization (EBITA) with EBITA before non-recurring items as a financial indicator in order to improve comparability and to give a better view of the underlying operational performance.

As we define it at Metso, non-recurring items typically consist of material one-time items related to the business operations. These items can include, but are not limited to, capital gains and losses related to sale of business assets, one-time restructuring expenses and other items Metso management has deemed as material non-recurring items. Historical comparison figures can be found in the tables presented in this Interim Review and quarterly comparison data from Q1/2009 onwards at www.metso.com/investors.

Metso's second quarter 2010 review



Operating environment and demand for products in April-June

The overall positive tone in the global economy and the recovery of demand continued in most of our customer industries. The growing budget deficits of several European countries created uncertainties in the financial markets overshadowing the upswing in the markets. However, we did not see any material impact from this on overall demand for our products and services in the second quarter.

Thanks to continuing growth of the emerging economies, the confidence of mining companies in the long-term positive demand and price development for minerals has strengthened. As a consequence, mining companies have clearly increased their capacity expansion plans and new orders for mining equipment have started growing strongly. Due to the increased production volumes of minerals demand for our mining equipment services also improved further.

In the construction industry, demand for equipment used in aggregates production has recovered somewhat from the very low levels of last year but remained weak in Europe and North America. Continued economic growth in the Asia-Pacific region and the Brazilian markets led to major infrastructure projects and maintained good demand for construction equipment there. Demand for our services business for the construction industry improved and was good.

Demand for power plants utilizing renewable fuels was at a good level in Europe and North America. Several countries have published targets to increase the use of renewable energy supporting demand for our power plant solutions fuelled by biomass and waste. The uncertainty of the financial markets during the first half of the year has, however, delayed final decision making in several new projects. Demand for our power plant services was satisfactory.

Demand for our automation solutions continued to strengthen as investments by the oil, gas and petrochemical industries increased as a result of the rising trend in the price of and demand for energy. Also demand by the pulp and paper customer industry for process and flow control solutions developed favorably during the second quarter. Demand for our services business for automation solutions improved and was good.

Demand for metals recycling equipment was satisfactory thanks to the increased production volumes in the global steel industry. Demand for solid-waste recycling equipment was also satisfactory. Demand for our services business for recycling equipment improved as the utilization rates of our customers' plants and equipment are increasing.

The trading environment overall was satisfactory for new fiber, paper, board and tissue lines and rebuilds. Customers' capacity utilization rates continued to increase which had a clearly positive impact on our services business.



Orders received in April-June

We received new orders worth EUR 1,671 million in April-June. Orders received increased by 64 percent on the comparison period. The share of emerging markets in our orders received was 60 percent. Orders received increased on the weak comparison period in all reporting segments and in all geographical areas.

Orders received by Mining and Construction Technology in April-June amounted to EUR 604 million, which was 52 percent more than in the comparison period. Orders from mining customers were up 69 percent and from construction customers up 22 percent. Services business orders were up 17 percent and the growth is coming primarily from mining customers. Among the most significant orders in the Equipment and Systems business was a delivery of mining equipment for TISCO's iron ore processing plant in Shanxi Province, China.

Orders received by Energy and Environmental Technology increased 38 percent on the comparison period and totaled EUR 384 million. Orders received increased 23 percent in the Power business and by one third in the Automation business. In the Recycling business, orders received grew by almost 150 percent as the comparison period was exceptionally weak. Several automation orders for managing power plants, paper, board and tissue lines as well as oil and gas projects were received. We also received several sizable metal recycling shredder orders. In the Power business, we received some sizable services and project orders.

Orders received by Paper and Fiber Technology doubled on the comparison period and totaled EUR 682 million in April-June. The improvement came especially from the Fiber business which had an exceptionally weak comparison period and which, in addition to several smaller orders also received a large fiber line order for Ilim Group's new kraft pulp mill in Bratsk, Russia. Among other significant orders were two tissue lines for Shanghai Orient Champion Paper Co., Ltd. in Shanghai, and a fine paper line for APRIL Fine Paper (Guangdong) Co. Ltd, both to China.



Financial performance in April-June

Our net sales in April-June totaled EUR 1,370 million, which is 10 percent more than a year earlier (EUR 1,247 million in Q2/2009). The services business net sales increased 14 percent on the comparison period, and accounted for 45 percent of total net sales (43% in Q2/2009).

In the second quarter, our earnings before interest, tax and amortization and non-recurring items (EBITA before non-recurring items) were EUR 125.0 million, i.e. 9.1 percent of net sales (EUR 84.9 million and 6.8% in Q2/2009). Improved capacity utilization rates contributed positively to gross profit margins. On the other hand, earnings were somewhat negatively affected as the selling, general and administrative expenses have increased reflecting the increased demand and strengthening of our sales, marketing and other resources.

Earnings before interest, tax and amortization (EBITA) improved on the comparison period and were EUR 154.2 million, i.e. 11.3 percent of net sales (EUR 74.7 million and 6.0% in Q2/2009).

Metso's operating profit (EBIT) improved clearly and was EUR 140.0 million, or 10.2 percent of net sales (EUR 65.9 million and 5.3% in Q2/2009).

Our EBITA and EBIT for April-June include the following non-recurring items (see table), which had a total positive impact of EUR 29.2 million on our second-quarter financial performance.

Non-recurring items in April-June

Q2/2010




EUR million
Mining and

Construction

Technology
Energy and

Environmental

Technology
Paper and

Fiber

Technology
Metso

Group
EBITA 97.2 27.7 34.4 154.2
Capacity adjustment expenses - 1.6 1.6 3.2
Gain on sale of Talvivaara

shares
-1.1 - - -1.1
Gain on Intellectual Property

settlements in the United States

and in Australia
-32.1 - - -32.1
Gain on business disposal -2.5 - - -2.5
Provision for prior years' ICMS

(VAT) tax credits in Brazil
3.3 - - 3.3
EBITA before non-recurring items 64.8 29.3 36.0 125.0
% of net sales 12.0 8.8 7.3 9.1

Amortization of intangible assets during the reporting period was EUR 14.2 million of which EUR 8.3 million was related to fair value allocations of acquired businesses.

Q2/2009




EUR million
Mining and

Construction

Technology
Energy and

Environmental

Technology
Paper and

Fiber

Technology
Metso

Group
EBITA 46.9 34.1 1.4 74.7
Capacity adjustment expenses 1.6 1.4 1.3 4.3
Gain on sale of Talvivaara

shares
-6.2 - - -6.2
Hedging reversal due to a

cancelled customer order
- - 9.0 9.0
Credit loss reserve related to

two paper machine customers
- - 3.1 3.1
EBITA before non-recurring

items
42.3 35.5 14.8 84.9
% of net sales 8.0 9.9 4.1 6.8

Amortization of intangible assets during the comparison period was EUR 8.8 million of which EUR 4.6 million was related to fair value allocations of acquired businesses.

Metso's January-June 2010 Interim Review

Orders received and order backlog

Orders received in January-June totaled EUR 3,037 million, an increase of 55 percent on the comparison period. Excluding the effect from exchange rate translation, the growth would have been 46 percent. The strengthening in demand was greatest in the Paper and Fiber Technology segment, and also other reporting segments recorded clear growth in new orders. Our customers' improved capacity utilization rates led to 34 percent growth in our services orders compared to the same period a year earlier.

The three countries with highest value of orders received were China, the United States and Brazil. The share of emerging markets in our orders received was 52 percent (49% in Q1-Q2/2009).

At the end of June, our order backlog was EUR 4,176 million, which is 22 percent stronger than at the end of 2009 (EUR 3,415 million). About EUR 2.4 billion of the deliveries in our order backlog are expected to be completed in 2010, and about EUR 900 million of these are services business orders. Uncertainties in the order backlog have continued to diminish and at the end of June our order backlog included some EUR 395 million (EUR 430 million in Q1/2010) worth of orders for projects with uncertain delivery schedules and which will, according to present estimates, be delivered after 2010. The pulp mill project for Fibria, Brazil, is included in these projects.

Orders received by reporting segments


Q1-Q2/2010 Q1-Q2/2009

EUR

million
% of orders

received
EUR

million
% of orders

received
Mining and Construction

Technology



1,163



38



783



40
Energy and Environmental

Technology



740



24



543



27
Paper and Fiber Technology 1,143 37 614 31
Valmet Automotive 28 1 35 2
Intra-Metso orders received -37
-13
Total 3,037 100 1,962 100

Orders received by market area


Q1-Q2/2010 Q1-Q2/2009

EUR

million
% of orders

received
EUR

million
% of orders

received
Europe 1,163 38 746 39
North America 436 14 320 16
South and Central America 392 13 237 12
Asia-Pacific 901 30 535 27
Africa and Middle East 145 5 124 6
Total 3,037 100 1,962 100

Net sales

Our net sales for the first half of the year increased by 3 percent on the comparison period and were EUR 2,540 million (EUR 2,467 million in Q1-Q2/2009). Excluding the effect from exchange rate translation, the decline would have been 3 percent. The growth came from Paper and Fiber Technology, which recorded growth of 33 percent on the comparison period. Net sales for Mining and Construction Technology were at around the same level as in the comparison period and net sales for Energy and Environmental Technology declined 12 percent. Net sales for our services business increased 7 percent (when excluding the impact of the acquired Fabrics business i.e. former Tamfelt, on par with the comparison period) and its share of the total net sales increased to 45 percent (43% in Q1-Q2/2009).

Measured by net sales, the largest countries were China, the United States and Brazil, which together accounted for about 34 percent of our total net sales. The share of emerging markets in our net sales was 48 percent (42% in Q1-Q2/2009).

Net sales by reporting segments


Q1-Q2/2010 Q1-Q2/2009

EUR

million
% of

net sales
EUR

million
% of

net sales
Mining and Construction

Technology



1,013



40



1,059



43
Energy and Environmental

Technology



666



26



754



30
Paper and Fiber Technology 858 33 646 26
Valmet Automotive 28 1 35 1
Intra-Metso net sales -25
-27
Total 2,540 100 2,467 100

Net sales by market area


Q1-Q2/2010 Q1-Q2/2009

EUR

million
% of

net sales
EUR

million
% of

net sales
Europe 953 37 1,064 43
North America 432 17 404 16
South and Central America 333 13 315 13
Asia-Pacific 681 27 481 20
Africa and Middle East 141 6 203 8
Total 2,540 100 2,467 100

Financial result

In January-June, our EBITA before non-recurring items was EUR 212.6 million, i.e. 8.4 percent of net sales (EUR 176.7 million and 7.2% in Q1-Q2/2009). Improved capacity utilization rates contributed positively to gross profit margins. On the other hand, earnings were somewhat negatively affected as the selling, general and administrative expenses have increased reflecting the increased demand and strengthening of our sales, marketing and other resources.

In the first half of the year, our EBITA improved clearly on the comparison period and was EUR 238.0 million, i.e. 9.4 percent of net sales (EUR 143.5 million and 5.8% in Q1-Q2/2009).

Our operating profit for January-June was EUR 209.5 million, or 8.2 percent of net sales (EUR 124.5 million and 5.0% in Q1-Q2/2009).

EBITA and EBIT for January-June include EUR 25.4 million of non-recurring items, which have a positive impact, as specified in the following table.

Non-recurring items

Q1-Q2/2010




EUR million
Mining and

Construction

Technology
Energy and

Environmental

Technology
Paper and

Fiber

Technology
Metso

Group
EBITA 136.7 56.1 52.9 238.0
Capacity adjustment expenses - 5.0 2.9 7.9
Gain on sale of Talvivaara

shares
-1.1 - - -1.1
Gain on Intellectual Property

settlements in the United States

and in Australia
-32.1 - - -32.1
Gain on business disposal -2.5 - - -2.5
Provision for prior years' ICMS (VAT) tax credits in Brazil 3.3 - - 3.3
Credit loss reserve related to

two paper machine customers


-0,9 -0,9
EBITA before non-recurring

items
104.3 61.1 54.9 212.6
% of net sales 10.3 9.2 6.4 8.4



Amortization of intangible assets during the reporting period was EUR 28.5 million of which EUR 16.6 million was related to fair value allocations of acquired businesses.



Q1-Q2/2009




EUR million
Mining and

Construction

Technology
Energy and

Environmental

Technology
Paper and

Fiber

Technology
Metso

Group
EBITA 102.5 66.4 -12.6 143.5
Capacity adjustment expenses 5.4 2.8 18.1 26.3
Gain on sale of Talvivaara

shares
-6.2 - - -6.2
Hedging reversal due to a

cancelled customer order
- - 9.0 9.0
Credit loss reserve related to

two paper machine customers
- - 4.1 4.1
EBITA before non-recurring

items
101.7 69.2 18.6 176.7
% of net sales 9.6 9.2 2.9 7.2

Amortization of intangible assets during the comparison period was EUR 19.0 million of which EUR 9.3 million was related to fair value allocations of acquired businesses.



2009




EUR million
Mining and

Construction

Technology
Energy and

Environmental

Technology
Paper and

Fiber

Technology
Metso

Group
EBITA 202.8 136.3 16.5 334.3
Capacity adjustment expenses 21.9 11.1 41.7 74.7
Gain on sale of Talvivaara

shares
-23.1 - - -23.1
Hedging reversal due to a

cancelled customer order
- - 9.0 9.0
Credit loss reserve related to

two paper machine customers
- - 4.1 4.1
EBITA before non-recurring

items
201.6 147.4 71.3 399.0
% of net sales 9.7 9.7 5.1 8.0

Amortization of intangible assets during the year 2009 was EUR 40.7 million of which EUR 18.5 million was related to fair value allocations of acquired businesses.

Group Head Office's operating profit in the first half of 2010 includes foreign exchange gains of EUR 12 million from foreign exchange hedge contracts done by reporting segments with Group Treasury (EUR 2 million gain in Q1-Q2/2009). Corresponding foreign exchange losses are included in the operating results of reporting segments.

Our net financing expenses in January-June were EUR 45 million (EUR 36 million in Q1-Q2/2009). Interest expenses were EUR 35 million (EUR 36 million in Q1-Q2/2009). Net financing expenses include EUR 12 million in foreign exchange losses related to the above-mentioned Group Head Office's foreign exchange gain.

Our profit before taxes was EUR 165 million (EUR 89 million) and we estimate our tax rate for 2010 to be 30 percent (32% in 2009).

The profit attributable to shareholders was EUR 114 million in the first half of the year (EUR 63 million in Q1-Q2/2009), corresponding to earnings per share (EPS) of EUR 0.76 (EUR 0.44/share).

The return on capital employed (ROCE), before taxes, in January-June was 12.6 percent (9.3%) and return on equity (ROE) was 13.6 percent (8.7%).



Cash flow and financing

Net cash generated by operating activities for January-June was EUR 230 million (EUR 228 million in Q1-Q2/2009).

Net working capital decreased in January-June by EUR 7 million.

Free cash flow in the first half of the year was EUR 199 million (EUR 200 million in Q1-Q2/2009).

Net interest-bearing liabilities totaled EUR 538 million at the end of June (EUR 583 million at December 31, 2009).

Our total cash assets at the end of June were EUR 906 million, EUR 338 million of which has been invested in financial instruments with an initial maturity exceeding three months. The remaining EUR 568 million has been accounted for as cash and cash equivalents. The syndicated EUR 500 million revolving loan facility is available until late 2011, and it is currently undrawn. Metso's liquidity position is good.

At the end of June, our gearing was 28.5 percent (70.2%) and our equity-to-assets ratio was 35.6 percent (31.7%). In April, following the Annual General Meeting, we paid EUR 105 million in dividends for 2009.



Capital expenditure and R&D

Our gross capital expenditure in January-June, excluding business acquisitions, was EUR 58 million (EUR 55 million in Q1-Q2/2009). The share of maintenance investments was 60 percent, i.e. EUR 35 million. We estimate new capital expenditure in 2010 to somewhat exceed the 2009 level (EUR 117 million in 2009).

The first phase of Metso's largest single investment so far in India, Metso Park, was completed in March and the investment's second phase has been initiated. A technology center specializing in automation solutions was opened in May in Shanghai, China. In York, Pennsylvania, USA, Mining and Construction Technology took up new purpose-built office premises in May.

In June, construction work was started in Vantaa for a new factory for the production of valves for demanding applications. Metso's industrial valve production in Finland and the company's Automation and Power employees in the Helsinki area, around 800, will be moving to the new factory and the renovated office building in early 2011. This investment will be accounted as operating lease. In Araucaria, Parana state, Brazil, construction work on a new facility for our pulping and power operations has been started. The facility is estimated to be completed in late 2011 and will accommodate approximately 180 pulping and power employees who currently work in leased facilities in Curitiba, just 10 km from the new site.

In Jyväskylä, Finland, we completed an upgrade of a pilot machine at the Paper Technology Center. In Zibo, we are establishing our third service center in China for the pulp and paper industry. Investment projects in global enterprise resource planning systems are underway in Mining and Construction Technology and in the Automation business.

Metso's research and development expenses in January-June totaled EUR 52 million, representing 2.0 percent of Metso's net sales (EUR 61 million and 2.5% in Q1-Q2/2009).



Acquisitions, divestments and joint ventures

In April, Metso acquired the paper machine web inspection and web break system business from Viconsys. The acquired business and personnel of around 30 joined Metso's Energy and Environmental Technology segment.

In April, we sold the Flexowell conveyor belt operations in Germany to ContiTech Transportbandsysteme GmbH. Flexowell was part of Metso's Mining and Construction Technology segment.

In November 2009, we concluded a combination agreement with Tamfelt, one of the world's leading suppliers of technical textiles. The exchange offer was carried out in November-December of 2009 and successfully completed on December 23, 2009. The remaining 2 percent of Tamfelt's shares were redeemed in accordance with the Finnish Companies Act, and in May Metso gained title to all the shares in Tamfelt. The redemption price determined in the Arbitral Tribunal was EUR 7.17 per share. Metso shall pay the redemption price (about EUR 4.3 million) and the interest accrued thereon to the minority shareholders of Tamfelt who were party to the redemption proceedings within one month after the arbitral award has become legally binding.

Since the acquisition, Tamfelt has been a functional and administrative part of our Paper and Fiber Technology segment and has been established as the segment's Fabrics business line.



Personnel

At the end of June, we had 27,665 employees, which was 499 more than at the end of 2009 (27,166 employees at December 31, 2009) and 1,490 employees less than year ago when eliminating the impact of the acquired and divested businesses. Excluding the effects of the about 650 seasonal workers at the end of June, the comparable decline in the number of employees since the start of the year was 151 employees. The number of employees decreased somewhat in Mining and Construction Technology and stayed about the same in Energy and Environmental Technology and in Paper and Fiber Technology. During January-June, we had an average of 27,260 employees.

Personnel by area


June

30,
2010
% of total

personnel
June

30, 2009
% of total

personnel
Change

%
Dec 31,

2009
Finland 9,286 34 8,813 32 5 8,746
Other Nordic countries 2,857 10 3,073 11 -7 2,995
Rest of Europe 3,424 12 3,588 13 -5 3,678
North America 3,393 12 3,606 13 -6 3,428
South and Central America 2,890 11 2,743 10 5 2,618
Asia-Pacific 4,444 16 4,332 16 3 4,316
Africa and Middle East 1,371 5 1,453 5 -6 1,385
Total 27,665 100 27,608 100 0 27,166

REPORTING SEGMENTS

Mining and Construction Technology

EUR million Q2/10 Q2/09 Change

%
Q1-Q2/

10
Q1-Q2/

09
Change

%
2009
Net sales 541 531 2 1,013 1,059 -4 2,075
Net sales of services business 293 263 11 535 518 3 1,017
% of net sales 54 50
53 49
49
Earnings before interest, tax and

amortization (EBITA) and non-recurring

items






64.8






42.3






53






104.3






101.7






3






201.6
% of net sales 12.0 8.0
10.3 9.6
9.7
EBITA 97.2 46.9 107 136.7 102.5 33 202.8
% of net sales 18.0 8.8
13.5 9.7
9.8
Operating profit 95.7 46.0 108 133.8 100.9 33 198.8
% of net sales 17.7 8.7
13.2 9.5
9.6
Orders received 604 398 52 1,163 783 49 1,660
Order backlog at end of period


1,310 1,196 10 1,041
Personnel at end of period


9,787 10,344 -5 9,541

The net sales of Mining and Construction Technology decreased by 4 percent on the comparison period of January-June, and were EUR 1,013 million. In the mining business, net sales were on par with the comparison period while, in the construction business net sales were down by approximately 10 percent. The services business net sales were slightly up from the comparison period, and accounted for 53 percent of the segment's net sales (49% in Q1-Q2/2009).

Mining and Construction Technology's EBITA before non-recurring items was EUR 104.3 million (non-recurring items analyzed in the 'Financial result' section), i.e. 10.3 percent of net sales in January-June (EUR 101.7 million and 9.6% in Q1-Q2/2009).

EBITA was EUR 136.7 million, i.e. 13.5 percent of net sales (EUR 102.5 million and 9.7% in Q1-Q2/2009).

EBITA includes positive non-recurring items of EUR 32.4 million net whereas non-recurring items in the comparison period improved the EBITA by EUR 0.8 million. The largest positive non-recurring items in the second quarter related to gains from intellectual property rights settlements in the United States and in Australia amounting to EUR 32.1 million. The underlying operational profitability stayed roughly on par with the comparison period both in the Services business as well as in the Equipment and Systems business.

Orders received by Mining and Construction Technology in January-June amounted to EUR 1,163 million, which was 49 percent more than in the comparison period. Orders received from mining customers increased by more than 60 percent and from construction customers by about 27 percent. New orders increased in all regions except in Western Europe, where there was a slight decline. The share of orders received from emerging markets was 59 percent (49% in Q1-Q2/2009). Among the biggest orders in January-June were grinding equipment deliveries for the Kinross Gold goldmine in Brazil and for the Newcrest goldmine in Australia and mining equipment for Tisco's iron ore processing plant in China.

The order backlog strengthened by 26 percent from the end of 2009 and totaled EUR 1,310 million at the end of June (EUR 1,041 million at December 31, 2009). Uncertainties in the order backlog decreased during the first half of the year by approximately EUR 70 million as customers restarted previously suspended projects. At the end of June, our order backlog included mining equipment orders, which are subject to uncertainties primarily related to delivery schedules, of around EUR 75 million.

Energy and Environmental Technology

EUR million Q2/10 Q2/09 Change

%
Q1-Q2/

10
Q1-Q2/

09
Change

%
2009
Net sales 334 357 -6 666 754 -12 1,523
Net sales of services business 133 130 2 243 262 -7 516
% of net sales 41 37
38 35
35
Earnings before interest, tax and

amortization (EBITA) and non-

recurring items






29.3






35.5






-17






61.1






69.2






-12






147.4
% of net sales 8.8 9.9
9.2 9.2
9.7
EBITA 27.7 34.1 -19 56.1 66.4 -16 136.3
% of net sales 8.3 9.6
8.4 8.8
8.9
Operating profit 22.7 29.7 -24 46.2 57.4 -20 118.1
% of net sales 6.8 8.3
6.9 7.6
7.8
Orders received 384 278 38 740 543 36 1,297
Order backlog at end of period


1,159 1,035 12 1,032
Personnel at end of period


6,114 6,349 -4 6,060

The net sales of Energy and Environmental Technology declined by 12 percent on the comparison period, and were EUR 666 million. The decrease in net sales was single digit in the Power business but over 10 percent both in Automation and Recycling businesses. The net sales of the services business decreased by 7 percent on the comparison period and accounted for 38 percent of the segment's net sales (35% in Q1-Q2/2009). The decrease in the services business was primarily due to the strong comparison period in the Power business with some sizable refurbishment projects delivered at that time.

Energy and Environmental Technology's EBITA before non-recurring items was EUR 61.1 million, i.e. 9.2 percent of net sales (EUR 69.2 million and 9.2% in Q1-Q2/2009). The EBITA for the reporting period included EUR 5.0 million non-recurring expenses primarily related to capacity adjustment actions (non-recurring items are analyzed in the 'Financial result' section) in the Recycling and Automation businesses (non-recurring expenses EUR 2.8 million in Q1-Q2/2009).

EBITA was EUR 56.1 million, i.e. 8.4 percent of net sales (EUR 66.4 million and 8.8% in Q1-Q2/2009). EBITA improved on the comparison period clearly in the Power business due to successful project execution and weakened in the Automation and Recycling businesses, mainly as a result of significantly lower delivery volumes.

Orders received increased by 36 percent on the comparison period and totaled EUR 740 million. Orders received increased in all businesses, especially in the Recycling business, where new orders doubled on the exceptionally weak comparison period. Orders received by the Power business increased by 34 percent and those of the Automation business by 23 percent. Major orders received include biomass boilers for RWE npower renewables in the UK and for 4Ham Cogen SA in Belgium. In addition, several automation orders for managing power plants, paper, board and tissue lines as well as oil and gas projects were received. In the Recycling business, several sizable metal recycling shredder orders were received.

The order backlog at the end of June, EUR 1,159 million, was 12 percent higher than at the end of 2009. The order backlog includes projects worth approximately EUR 80 million with uncertain delivery schedules. The uncertainty is mostly related to the deliveries of power boiler and automation technology for Fibria's pulp mill project in Brazil.

Paper and Fiber Technology

EUR million Q2/

10
Q2/

09
Change

%
Q1-Q2/

10
Q1-Q2/

09
Change

%
2009
Net sales 494 359 38 858 646 33 1,408
Net sales of services business 186 143 30 345 275 25 569
% of net sales 38 40
40 43
41
Earnings before interest, tax and

amortization (EBITA) and non-

recurring items






36.0






14.8






143






54.9






18.6






195






71.3
% of net sales 7.3 4.1
6.4 2.9
5.1
EBITA 34.4 1.4 n/a 52.9 -12.6 n/a 16.5
% of net sales 7.0 0.4
6.2 -2.0
1.2
Operating profit 27.0 -1.6 n/a 38.3 -19.8 n/a 0.8
% of net sales 5.5 -0.4
4.5 -3.1
0.1
Orders received 682 335 104 1,143 614 86 1,384
Order backlog at end of period


1,759 1,304 35 1,380
Personnel at end of period


10,526 9,858 7 10,459

Net sales of Paper and Fiber Technology grew by 33 percent in January-June, and were EUR 858 million. The increase in net sales resulted almost equally from each of the segments' businesses. The comparable net sales growth excluding the impact of Fabrics business was 22 percent.

The net sales of the services business increased by 25 percent and accounted for 40 percent of the segment's net sales (43% in Q1-Q2/2009). The growth came from the acquired Fabrics business, while the net sales of the rest of the services were on par with the comparison period.

Paper and Fiber Technology's EBITA before non-recurring items was EUR 54.9 million, i.e. 6.4 percent of net sales (EUR 18.6 million and 2.9% in Q1-Q2/2009). The EBITA for the reporting period includes non-recurring items (non-recurring items are analyzed in the 'Financial result' section), which weaken the EBITA by a total of EUR 2.0 million (non-recurring items in the comparison period weakened the EBITA by EUR 31.2 million). Clear improvement in the profitability resulted both from strong volume growth and more streamlined cost structure. Profitability improvement was visible especially in the Paper and Fiber businesses.

EBITA was EUR 52.9 million positive, i.e. 6.2 percent of net sales (EUR 12.6 million negative in Q1-Q2/2009).

New orders from paper and board customers increased by 21 percent and orders from the pulp industry were up by 257 percent from the comparison period. Orders from tissue customers more than doubled. Overall, the value of orders received by Paper and Fiber Technology increased by 86 percent and was EUR 1,143 million. The increase in services orders was 57 percent (27 percent without the Fabrics business). Among the orders received in January-June were board-making technology and machinery for Cheng Loong Corporation in Taiwan, Containerboard machines to Saica in the UK as well as for Zhejiang Ji'An in China, a fine paper line for APRIL Fine Paper (Guangdong) Co. Ltd. in China and an order for pulping equipment for the Ilim Group's new kraft pulp mill in Bratsk, Russia.

The order backlog at the end of June was EUR 1,759 million. Around EUR 240 million relates to the pulp mill project for Fibria in Brazil, the delivery schedule for which is still open.



Valmet Automotive

Valmet Automotive's net sales in January-June totaled EUR 28 million (EUR 35 million in Q1-Q2/2009). The operating loss was EUR 8.5 million (EUR 2.9 million loss in Q1-Q2/2009). After heavy loss in the first quarter due to low volumes Valmet Automotive reported a small loss during the second quarter. Profitability is expected to improve during the last two quarters of the year when delivery volumes will be improving based on the existing contracts. At the end of June, Valmet Automotive employed 723 people (679 employees on December 31, 2009).

Valmet Automotive manufactures THINK City electric cars for the Norwegian company THINK Global AS, and electric golf cars for the Danish company Garia A/S. Additionally, Valmet Automotive has an assembly contract with Porsche AG which is expected to continue until 2012.

Valmet Automotive also has an agreement with the U.S. company Fisker Automotive Inc. for the manufacturing and engineering of Fisker Karma plug-in hybrid cars. The aim is to deliver the first cars towards the end of this year. The annual production is projected to reach 15,000 cars at full capacity.

Events after the review period

Metso acquired Wyesco of Louisiana L.L.C. service business in the USA

In July, Metso acquired the service business of Wyesco of Louisiana L.L.C., in Louisiana, USA. The acquired business, employing 30 people, was affiliated to Metso's Paper and Fiber Technology segment as of July 19, 2010. The acquisition complements Metso's current services, technology and product offering to the pulp industry in North America, and is in line with Metso's strategy to grow its services business.

The United States Department of Justice has closed its investigations related to 2006 subpoena received by Metso

On July 2, Metso was informed by the Antitrust Division of the United States Department of Justice that it has closed its investigation of the rock crushing and screening equipment industry. Metso Minerals Industries, Inc., which is part of Metso Corporation's Mining and Construction Technology, received a subpoena from the Antitrust Division of the United States late 2006. The subpoena called for Metso Minerals Industries, Inc. to produce certain documents related to an investigation of potential antitrust violations in the rock crushing and screening equipment industry. We co-operated fully with the Department of Justice during the investigation. No further action has been brought against any party.



Short-term risks of business operations

We estimate that our business environment will continue to develop favorably during 2010. The growing budget deficits in many European countries may, however, increase the uncertainty especially in the financial markets and slow down the recovery. We estimate that the high share of our net sales from the services business and the emerging markets will diminish possible negative effects that market uncertainties may have on our business environment.

If the recovery in the global economy is interrupted, it might have adverse effects on new projects under negotiation or projects in our order backlog. Some projects may be postponed or they may be suspended or canceled. Less than 10 percent of orders in the order backlog at the moment are subject to uncertainties relating to delivery schedules. In long-term delivery projects the customer advance payment is typically 10-30 percent of the value of the project, in addition to which the customer makes progress payments during the project execution, which significantly decreases our risk and financing requirements related to these projects. We continually assess our customers' creditworthiness and ability to meet their obligations. As a rule, we do not finance customer projects.

We have adjusted our capacity and cost structure in order to maintain our competitiveness. Also our suppliers have strongly adjusted their capacity during the past two years and it is possible that now when the demand is picking up again, suppliers' ability to supply raw materials, components and subcontracting services may have weakened, which may result in delivery problems. If the recovery of the global economy is interrupted, the markets for our products may contract, which may lead to tightening price competition.

Securing the continuity of our operations requires that sufficient funding is available under all circumstances. We estimate that our cash assets totaling EUR 906 million and available credit facilities are sufficient to secure short-term liquidity. Committed credit facilities available for withdrawal amounted to EUR 500 million. The average repayment period for our long-term debt is 3.2 years. More than half of our long-term debt will mature after 2011. There are no prepayment covenants in our debt facilities that would be triggered by changes in credit ratings. Some of our debt facilities include financial covenants related to capital structure. We fully meet the covenants and other terms related to our financing agreements.

The levels of net working capital and capital expenditure have a fundamental effect on the adequacy of financing. We have developed our practices and the supporting information systems relating to managing net working capital and we expect that these will improve our capacity to control changes in our net working capital as delivery volumes experience an upswing. We estimate that we are well positioned to keep our capital expenditure at a moderate level in the coming years.

We have EUR 881 million of goodwill on our balance sheet which is mainly related to business acquisitions made over the last 10 years. We have conducted impairment testing reviews in every quarter since September 2008, and have not found any impairment necessary. The quarterly testing reviews have been conducted with the same principles as the annual tests and the discount rates have been adjusted when appropriate. The principles of the impairment testing are presented in our Annual Report.

Changes in the prices of raw materials and components could affect our profitability. On the other hand, some of our customers are raw material producers, whose ability to operate and invest may be enhanced by strengthening raw material prices and hampered by declining raw material prices.

Currency exchange rate risks are among the most substantial financial risks. Exchange rate changes can affect our business, although the wide geographical scope of our operations decreases the impact of any individual currency. In general uncertainty in the economy is likely to increase exchange rate fluctuations. We hedge the currency exposures that arise from firm delivery and purchase agreements.



Short-term outlook

We anticipate that the recovery will continue in most of our customer industries. The uncertainty in the financial markets caused by the growing budget deficits in many European countries may, however, slow down the recovery in the markets. The improving capacity utilization rates are supporting our services business, and most of our customers are gradually regaining their confidence to increase the level of their investments in new and existing capacity.

The number of quotations for equipment and projects from mining companies has strongly increased since the beginning of this year. This has had a clearly positive impact on our orders and we expect this to continue during the rest of 2010, contributing to a good trading environment. Due to the strengthening demand for minerals and our large installed equipment base, we expect demand for our mining services to further improve.

We anticipate that demand for equipment used in aggregates production by the construction industry will continue to be weak in Europe and in North America during the year. In the Asia-Pacific region and Brazil, infrastructure construction projects are maintaining good demand thanks to economic growth. We estimate that demand for our services business for the construction industry will remain satisfactory.

Demand for power plants that utilize renewable energy sources is expected to be good in Europe and North America in 2010. Several European countries and the United States have published targets to increase the use of renewable energy and this is expected to support demand for our power plant solutions fuelled by biomass and waste. The uncertainty in the financial markets may, however, delay final decisions on some of these projects. Demand for the power plant services business is expected to be satisfactory.

We estimate that demand for our automation products will continue to get stronger during this year, as the oil, gas and petrochemical industries increase their investments due to the improvement in energy prices and demand. Also business prospects in the pulp and paper customer industry for our automation solutions are expected to develop favorably. Demand for our services business for automation is expected to be satisfactory.

We expect the demand for metal recycling equipment to continue to improve due to the increasing production volumes of steel. The demand for solid-waste recycling equipment is estimated to be satisfactory. Demand for recycling equipment services is expected to improve in 2010 as the capacity utilization rates of our customers' plants and equipment improve.

Demand for new fiber lines, rebuilds and pulp mill services has clearly recovered from the low levels of 2008 and 2009 and we expect the fiber line equipment market to continue to be active during the year. Demand for paper, board and tissue lines is expected to be satisfactory. We expect the improved capacity utilization rates of the paper and board industry to boost the demand of our services business.

We estimate that our net sales in 2010 will grow about 10 percent from the EUR 5 billion level of 2009, and that our profitability will be satisfactory. Our estimate is based on our order backlog at the end of June, which contains about EUR 2.4 billion worth of deliveries for 2010, and on the expectation that the recovery of the global economy will continue.

The net sales and profitability estimates are based on Metso's current market outlook and business scope as well as foreign exchange rates similar to the first half of 2009.



Previous guidance (from January-March 2010 Interim Review, published on April 29, 2010):

"We estimate that our net sales in 2010 will exceed the EUR 5 billion level of 2009, and that our profitability will be satisfactory. Our estimate is based on our order backlog, which contains about EUR 2.6 billion worth of deliveries for 2010, and on the expectation that the recovery of the global economy will continue."

Helsinki, July 29, 2010

Metso Corporation's Board of Directors

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.






The Interim Review is unaudited



CONSOLIDATED STATEMENT OF INCOME










EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
1-12/

2009
Net sales 1,370 1,247 2,540 2,467 5,016
Cost of goods sold -1,009 -942 -1,888 -1,867 -3,808
Gross profit 361 305 652 600 1,208
Selling, general and administrative expenses -260 -239 -493 -478 -938
Other operating income and expenses, net 39 -1 51 2 24
Share in profits of associated companies 0 1 0 1 0
Operating profit 140 66 210 125 294
% of net sales 10.2% 5.3% 8.2% 5.0% 5.9%
Financial income and expenses, net -18 -14 -45 -36 -72
Profit before taxes 122 52 165 89 222
Income taxes -37 -15 -50 -26 -71
Profit 85 37 115 63 151






Attributable to:




Shareholders of the company 84 37 114 63 150
Minority interests 1 0 1 0 1
Profit 85 37 115 63 151












Earnings per share, EUR 0.56 0.26 0.76 0.44 1.06
Diluted earnings per share, EUR 0.56 0.26 0.76 0.44 1.06














CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME









EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
1-12/

2009
Profit 85 37 115 63 151






Cash flow hedges, net of tax -14 15 -20 10 14
Available-for-sale equity investments, net of tax -1 4 0 10 -1
Currency translation on subsidiary net investments 77 10 139 48 74
Net investment hedge gains (+) / losses (-), net of tax -16 11 -27 2 0
Defined benefit plan actuarial gains (+) / losses (-), net of tax 0 - 0 - -2
Other comprehensive income (+) / expense (-) 46 40 92 70 85
 




Total comprehensive income (+) / expense (-) 131 77 207 133 236






Attributable to:




Shareholders of the company 130 77 206 133 235
Minority interests 1 0 1 0 1
Total comprehensive income (+) / expense (-) 131 77 207 133 236



CONSOLIDATED BALANCE SHEET










ASSETS










EUR million June 30,

2010
June 30,

2009
Dec 31,

2009
Non-current assets


Intangible assets


Goodwill 881 787 863
Other intangible assets 299 250 312

1,180 1,037 1,175
Property, plant and equipment


Land and water areas 64 59 62
Buildings and structures 281 239 261
Machinery and equipment 474 370 449
Assets under construction 37 55 47

856 723 819
Financial and other assets
 
Investments in associated companies 13 14 13
Available-for-sale equity investments 15 31 15
Loan and other interest bearing receivables 6 9 9
Available-for-sale financial investments 228 5 130
Financial instruments held for trading 45 0 40
Derivative financial instruments 0 0 0
Deferred tax asset 195 178 171
Other non-current assets 29 29 44

531 266 422




Total non-current assets 2,567 2,026 2,416




Current assets


Inventories 1,310 1,466 1,172




Receivables


Trade and other receivables 1,164 1,088 938
Cost and earnings of projects under

construction in excess of advance billings
315 246 312
Loan and other interest bearing receivables 7 8 8
Available-for-sale financial assets 65 10 79
Derivative financial instruments 24 30 21
Income tax receivables 39 29 42

1,614 1,411 1,400




Cash and cash equivalents 568 605 727




Total current assets 3,492 3,482 3,299




TOTAL ASSETS 6,059 5,508 5,715

SHAREHOLDERS' EQUITY AND LIABILITIES








EUR million June 30,

2010
June 30,

2009
Dec 31,

2009

Equity



Share capital 241 241 241
Cumulative translation adjustments 50 -86 -62
Fair value and other reserves 684 508 710
Retained earnings 902 811 894  
Equity attributable to shareholders 1,877 1,474 1,783





Minority interests 11 9 9





Total equity 1,888 1,483 1,792  





Liabilities



Non-current liabilities



Long-term debt 1,266 1,322 1,334
Post employment benefit obligations 198 191 190
Provisions 57 43 52
Derivative financial instruments 5 8 5
Deferred tax liability 52 47 56
Other long-term liabilities 8 3 4  
Total non-current liabilities 1,586 1,614 1,641





Current liabilities



Current portion of long-term debt 144 156 173
Short-term debt 47 201 69
Trade and other payables 1,286 952 1,065
Provisions 217 233 235
Advances received 456 489 363
Billings in excess of cost and earnings of

projects under construction
300 339 330
Derivative financial instruments 101 35 21
Income tax liabilities 34 6 26  
Total current liabilities 2,585 2,411 2,282

     
Total liabilities 4,171 4,025 3,923  

     
TOTAL SHAREHOLDERS' EQUITY AND

LIABILITIES
6,059 5,508 5,715  












NET INTEREST BEARING LIABILITIES



 EUR million June 30,

2010
June 30,

2009
Dec 31,

2009

Long-term interest bearing debt 1,266 1,322 1,334
Short-term interest bearing debt 191 357 242
Cash and cash equivalents -568 -605 -727
Other interest bearing assets -351 -32 -266  
Total 538 1,042 583  

CONDENSED CONSOLIDATED CASH FLOW STATEMENT










EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
1-12/

2009
Cash flows from operating activities:




Profit 85 37 115 63 151
Adjustments to reconcile profit to net cash provided

by operating activities





Depreciation and amortization 44 34 87 70 143
Interests and dividend income 14 14 27 30 58
Income taxes 37 15 50 26 71
Other 17 1 27 10 18
Change in net working capital 44 41 7 135 518
Cash flows from operations 241 142 313 334 959
Interest paid and dividends received -29 -14 -35 -25 -51
Income taxes paid -33 -36 -48 -81 -138
Net cash provided by operating activities 179 92 230 228 770
Cash flows from investing activities:




Capital expenditures on fixed assets -30 -25 -58 -55 -116
Proceeds from sale of fixed assets 3 1 4 3 8
Business acquisitions, net of cash acquired -2 - -5 -3 -1
Proceeds from sale of businesses, net of cash

sold
10 0 10 2 2
Investments in (-) / proceeds from (+) financial assets 19 -3 -90 -3 -221
Other 1 1 4 1 1
Net cash provided by (+) / used in (-) investing activities 1 -26 -135 -55 -327
Cash flows from financing activities:




Redemption of own shares - - -7 -2 -2
Dividends paid -105 -99 -105 -99 -99
Net funding -62 201 -177 214 59
Other -1 -6 -1 -6 -6
Net cash provided by (+) / used in (-) financing activities -168 96 -290 107 -48
Net increase (+) / decrease (-) in cash and cash

equivalents
12 162 -195 280 395
Effect from changes in exchange rates 21 7 36 11 18
Cash and cash equivalents at beginning of period 535 436 727 314 314
Cash and cash equivalents at end of period 568 605 568 605 727


















FREE CASH FLOW
















EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
1-12/

2009
Net cash provided by operating activities 179 92 230 228 770
Capital expenditures on maintenance investments -18 -13 -35 -31 -61
Proceeds from sale of fixed assets 3 1 4 3 8
Free cash flow 164 80 199 200 717



CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY




















EUR million Share

capi-

tal
Cu-

mu-

la-

tive

trans-

la-

tion
ad-

just-

ments
Fair

value

and

other

re-

ser-

ves
Re-

tain-

ed
earn-

ings
Eq-

uity
at-

tri-

but-

able

to

share-

hold-

ers
Mi-

nor-

ity

in-

ter-

ests
To-

tal

eq-

uity
Balance at Jan 1, 2009 241 -136 490 849 1,444 9 1,453








Profit - - - 63 63 - 63








Other comprehensive income (+) /

expense (-)







Cash flow hedges, net of tax - - 10 - 10 - 10
Available-for-sale equity

investments, net of tax
- - 10 - 10 - 10
Currency translation on subsidiary

net investments
- 48 - - 48 - 48
Net investment hedge gains

(losses), net of tax
- 2 - - 2 - 2
Total comprehensive income (+) /

expense (-)
- 50 20 63 133 - 133








Dividends - - - -99 -99 - -99
Redemption of own shares - - -3 - -3 - -3
Share-based payments, net of tax - - 1 - 1 - 1
Other - - - -2 -2 - -2
Balance at June 30, 2009 241 -86 508 811 1,474 9 1,483








Balance at Jan 1, 2010 241 -62 710 894 1,783 9 1,792








Profit - - - 114 114 1 115








Other comprehensive income (+) /

expense (-)







Cash flow hedges, net of tax - - -20 - -20 - -20
Available-for-sale equity

investments, net of tax
- - 0 - 0 - 0
Currency translation on subsidiary

net investments
- 139 - - 139 - 139
Net investment hedge gains

(losses), net of tax
- -27 - - -27 - -27
Total comprehensive income (+) /

expense (-)
- 112 -20 114 206 1 207








Dividends - - - -105 -105 - -105
Redemption of own shares - - -7 - -7 - -7
Share-based payments, net of tax - - 1 - 1 - 1
Other - - - -1 -1 1 0
Balance at June 30, 2010 241 50 684 902 1,877 11 1,888

ACQUISITIONS










Acquisitions in 2010






In April Metso acquired the paper machine web inspection and web break system business from Viconsys in Finland. The purchase price was less than EUR 2 million and the business was combined into Metso's Energy and Environmental Technology segment from April 15, 2010 onwards.





Acquisition of Tamfelt in 2009






Metso acquired Tamfelt Corporation, a Finnish corporation listed in the NASDAQ OMX Helsinki exchange, through a public share exchange offer that was completed at the end of December 2009. The total transaction value was EUR 215 million whereof EUR 206 million was compensated by offering 8,593,642 new Metso shares representing 95.2% of Tamfelt's shares and votes. Prior to the transaction, Metso held Tamfelt shares worth EUR 4 million i.e. 2.8% of Tamfelt's shares and votes. The remaining 2.0% of Tamfelt's shares, amounting to EUR 4 million, were redeemed in accordance with the Finnish Companies Act and Metso estimates to pay the redemption price and the interest accrued thereon during the third quarter of 2010. The transaction value includes EUR 5 million in expenses and transfer taxes related to the acquisition.




The transaction value, together with the shares already held, exceeded the net assets of Tamfelt by EUR 117 million, whereof EUR 50 million was allocated to intangible assets, representing the fair values of acquired customer base, order backlog and technology. Furthermore, EUR 10 million was allocated to the property, plant and equipment, to reflect their appraisal to fair values. The deferred tax liability resulting from these allocations was EUR 16 million. The remaining EUR 73 million represents goodwill, which reflects the value of assembled workforce, significant synergy benefits and widened business portfolio offering Metso potential to expand its operations into new markets and customer segments.




Had the acquisition occurred on January 1, 2009, Metso's net sales would have increased by EUR 130 million. The calculation of pro forma net income of the acquired business would be impracticable considering the effects of the acquisition cost.




Preliminary details of the acquired net assets and goodwill are as follows:








EUR million Carrying

amount
Fair value

allocations
Fair

value
Intangible assets 4 50 54
Property, plant and equipment 87 10 97
Inventories 30 - 30
Trade and other receivables 30 - 30
Deferred tax liabilities, net -9 -16 -25
Other liabilities assumed -23 - -23
Non-interest bearing net assets 119 44 163




Cash and cash equivalents acquired

19
Debt assumed

-36
Transaction value

-215
Pre-acquisition holding of Tamfelt shares

-4
Goodwill     73




Transaction value settled in cash

-5
Cash and cash equivalents acquired

19
Total cash inflow on acquisition in 2009     14




Amounts settled in 2010

-3
Total cash inflow on Tamfelt acquisition     11

ASSETS PLEDGED AND CONTINGENT LIABILITIES













EUR million June 30,

2010
June 30,

2009
Dec 31,

2009

Mortgages on corporate debt 3 3 20
Other pledges and contingencies



Mortgages 1 1 1
Pledged assets - 0 -
Guarantees on behalf of associated company obligations - - -
Other guarantees 4 6 7





Repurchase and other commitments 6 6 6
Lease commitments 238 151 226








NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS

















EUR million June 30,

2010
June 30,

2009
Dec 31,

2009

Forward exchange rate contracts 1,949 1,334 1,390
Interest rate swaps 178 123 128
Option agreements



Bought 2 - 13
Sold 10 - 6





The notional amount of electricity forwards was 662 GWh as of June 30, 2010 and 569 GWh as of June 30, 2009.
The notional amount of nickel forwards to hedge stainless steel prices was 360 tons as of June 30, 2010 and 246 tons as of June 30, 2009.



The notional amounts indicate the volumes in the use of derivatives, but do not indicate the exposure to risk.

KEY RATIOS






  1-6/

2010
1-6/

2009
1-12/

2009
Earnings per share, EUR 0.76 0.44 1.06
Diluted earnings per share, EUR 0.76 0.44 1.06




Equity/share at end of period, EUR 12.54 10.43 11.89
Return on equity (ROE), % (annualized) 13.6 8.7 9.8
Return on capital employed (ROCE) before tax, % (annualized) 12.6 9.3 10.0
Return on capital employed (ROCE) after tax, % (annualized) 9.6 7.4 7.7
Equity to assets ratio at end of period, % 35.6 31.7 35.7
Gearing at end of period, % 28.5 70.2 32.5




Free cash flow, EUR million 199 200 717
Free cash flow/share, EUR 1.33 1.41 5.07
Cash conversion, % 173 317 475




Gross capital expenditure (excl. business acquisitions), EUR million 58 55 117
Business acquisitions, net of cash acquired, EUR million 5 3 1
Depreciation and amortization, EUR million 87 70 143




Number of outstanding shares at end of period (thousands) 149,631 141,349 149,939
Average number of shares (thousands) 149,735 141,420 141,477
Average number of diluted shares (thousands) 149,838 141,420 141,526



EXCHANGE RATES USED















1-6/

2010
1-6/

2009
1-12/

2009
June 30,

2010
June 30,

2009
Dec 31,

2009
USD (US dollar) 1.3331 1.3579 1.3960 1.2271 1.4134 1.4406
SEK (Swedish krona) 9.8144 10.8806 10.6092 9.5259 10.8125 10.2520
GBP (Pound sterling) 0.8677 0.8931 0.8948 0.8175 0.8521 0.8881
CAD (Canadian dollar) 1.3894 1.6231 1.5910 1.2890 1.6275 1.5128
BRL (Brazilian real) 2.3895 2.9426 2.7994 2.2082 2.7469 2.5113
CNY (Chinese renminbi) 9.0922 9.2767 9.5338 8.3215 9.6545 9.8350
AUD (Australian dollar) 1.4986 1.8841 1.7858 1.4403 1.7359 1.6008

FORMULAS FOR CALCULATION OF INDICATORS












EBITA before non-recurring items:

Operating profit + amortization + goodwill impairment + non-recurring items










Earnings/share:














Profit attributable to shareholders of the company



Average number of shares during period




















Equity/share:














Equity attributable to shareholders





Number of shares at end of period





















Return on equity (ROE), %:













Profit   x 100




Total equity (average for period)




















Return on capital employed (ROCE) before tax, %:










Profit before tax + interest and other financial expenses   x 100

Balance sheet total - non-interest bearing liabilities

(average for period)

















Return on capital employed (ROCE) after tax, %:










Profit + interest and other financial

expenses
    x 100

Balance sheet total - non-interest bearing liabilities

(average for period)

















Gearing, %:














Net interest bearing liabilities x 100




Total equity





















Equity to assets ratio, %:













Total equity     x 100



Balance sheet total - advances

received




















Free cash flow:














Operating cash flow






- capital expenditures on maintenance

investments




+ proceeds from sale of fixed assets  



= Free cash flow














Cash conversion, %:













Free cash flow x 100





Profit














SEGMENT INFORMATION


























NET SALES





EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 541 531 1,013 1,059 2,029 2,075
Energy and Environmental Technology 334 357 666 754 1,435 1,523
Paper and Fiber Technology 494 359 858 646 1,620 1,408
Valmet Automotive 17 14 28 35 49 56
Group Head Office and other - - - - - -
Group Head Office and others total 17 14 28 35 49 56
Intra Metso net sales -16 -14 -25 -27 -44 -46
Metso total 1,370 1,247 2,540 2,467 5,089 5,016







NON-RECURRING ITEMS





EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 32.4 4.6 32.4 0.8 32.8 1.2
Energy and Environmental Technology -1.6 -1.4 -5.0 -2.8 -13.3 -11.1
Paper and Fiber Technology -1.6 -13.4 -2.0 -31.2 -25.6 -54.8
Valmet Automotive - - - - - -
Group Head Office and other - - - - - -
Group Head Office and others total - - - - - -
Metso total 29.2 -10.2 25.4 -33.2 -6.1 -64.7







EBITA BEFORE NON-RECURRING ITEMS





EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 64.8 42.3 104.3 101.7 204.2 201.6
Energy and Environmental Technology 29.3 35.5 61.1 69.2 139.3 147.4
Paper and Fiber Technology 36.0 14.8 54.9 18.6 107.6 71.3
Valmet Automotive -1.4 -2.6 -8.5 -2.9 -13.7 -8.1
Group Head Office and other -3.7 -5.1 0.8 -9.9 -2.5 -13.2
Group Head Office and others total -5.1 -7.7 -7.7 -12.8 -16.2 -21.3
Metso total 125.0 84.9 212.6 176.7 434.9 399.0







EBITA BEFORE NON-RECURRING ITEMS, % OF NET SALES




% 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 12.0 8.0 10.3 9.6 10.1 9.7
Energy and Environmental Technology 8.8 9.9 9.2 9.2 9.7 9.7
Paper and Fiber Technology 7.3 4.1 6.4 2.9 6.6 5.1
Valmet Automotive -8.2 -18.6 -30.4 -8.3 -28.0 -14.5
Group Head Office and other n/a n/a n/a n/a n/a n/a
Group Head Office and others total n/a n/a n/a n/a n/a n/a
Metso total 9.1 6.8 8.4 7.2 8.5 8.0









EBITA





EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 97.2 46.9 136.7 102.5 237.0 202.8
Energy and Environmental Technology 27.7 34.1 56.1 66.4 126.0 136.3
Paper and Fiber Technology 34.4 1.4 52.9 -12.6 82.0 16.5
Valmet Automotive -1.4 -2.6 -8.5 -2.9 -13.7 -8.1
Group Head Office and other -3.7 -5.1 0.8 -9.9 -2.5 -13.2
Group Head Office and others total -5.1 -7.7 -7.7 -12.8 -16.2 -21.3
Metso total 154.2 74.7 238.0 143.5 428.8 334.3









EBITA, % OF NET SALES





% 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 18.0 8.8 13.5 9.7 11.7 9.8
Energy and Environmental Technology 8.3 9.6 8.4 8.8 8.8 8.9
Paper and Fiber Technology 7.0 0.4 6.2 -2.0 5.1 1.2
Valmet Automotive -8.2 -18.6 -30.4 -8.3 -28.0 -14.5
Group Head Office and other n/a n/a n/a n/a n/a n/a
Group Head Office and others total n/a n/a n/a n/a n/a n/a
Metso total 11.3 6.0 9.4 5.8 8.4 6.7
























OPERATING PROFIT (LOSS)





EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 95.7 46.0 133.8 100.9 231.7 198.8
Energy and Environmental Technology 22.7 29.7 46.2 57.4 106.9 118.1
Paper and Fiber Technology 27.0 -1.6 38.3 -19.8 58.9 0.8
Valmet Automotive -1.4 -2.6 -8.5 -2.9 -13.8 -8.2
Group Head Office and other -4.0 -5.6 -0.3 -11.1 -5.1 -15.9
Group Head Office and others total -5.4 -8.2 -8.8 -14.0 -18.9 -24.1
Metso total 140.0 65.9 209.5 124.5 378.6 293.6









OPERATING PROFIT (LOSS), % OF NET SALES





% 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 17.7 8.7 13.2 9.5 11.4 9.6
Energy and Environmental Technology 6.8 8.3 6.9 7.6 7.4 7.8
Paper and Fiber Technology 5.5 -0.4 4.5 -3.1 3.6 0.1
Valmet Automotive -8.2 -18.6 -30.4 -8.3 -28.2 -14.6
Group Head Office and other n/a n/a n/a n/a n/a n/a
Group Head Office and others total n/a n/a n/a n/a n/a n/a
Metso total 10.2 5.3 8.2 5.0 7.4 5.9









ORDERS RECEIVED





EUR million 4-6/

2010
4-6/

2009
1-6/

2010
1-6/

2009
7/2009-

6/2010
1-12/

2009
Mining and Construction Technology 604 398 1,163 783 2,040 1,660
Energy and Environmental Technology 384 278 740 543 1,494 1,297
Paper and Fiber Technology 682 335 1,143 614 1,913 1,384
Valmet Automotive 17 14 28 35 49 56
Group Head Office and other - - - - - -
Group Head Office and others total 17 14 28 35 49 56
Intra Metso orders received -16 -5 -37 -13 -63 -39
Metso total 1,671 1,020 3,037 1,962 5,433 4,358

QUARTERLY INFORMATION






















NET SALES




EUR million 4-6/

2009
7-9/

2009
10-12/

2009
1-3/

2010
4-6/

2010
Mining and Construction Technology 531 492 524 472 541
Energy and Environmental Technology 357 350 419 332 334
Paper and Fiber Technology 359 356 406 364 494
Valmet Automotive 14 7 14 11 17
Group Head Office and other - - - - -
Group Head Office and others total 14 7 14 11 17
Intra Metso net sales -14 -9 -10 -9 -16
Metso total 1,247 1,196 1,353 1,170 1,370












NON-RECURRING ITEMS




EUR million 4-6/

2009
7-9/

2009
10-12/

2009
1-3/

2010
4-6/

2010
Mining and Construction Technology 4.6 -3.0 3.4 - 32.4
Energy and Environmental Technology -1.4 -3.2 -5.1 -3.4 -1.6
Paper and Fiber Technology -13.4 -3.5 -20.1 -0.4 -1.6
Valmet Automotive - - - - -
Group Head Office and other - - - - -
Group Head Office and others total - - - - -
Metso total -10.2 -9.7 -21.8 -3.8 29.2








EBITA BEFORE NON-RECURRING ITEMS




EUR million 4-6/

2009
7-9/

2009
10-12/

2009
1-3/

2010
4-6/

2010
Mining and Construction Technology 42.3 57.7 42.2 39.5 64.8
Energy and Environmental Technology 35.5 40.3 37.9 31.8 29.3
Paper and Fiber Technology 14.8 35.9 16.8 18.9 36.0
Valmet Automotive -2.6 -5.5 0.3 -7.1 -1.4
Group Head Office and other -5.1 5.9 -9.2 4.5 -3.7
Group Head Office and others total -7.7 0.4 -8.9 -2.6 -5.1
Metso total 84.9 134.3 88.0 87.6 125.0






EBITA




EUR million 4-6/

2009
7-9/

2009
10-12/

2009
1-3/

2010
4-6/

2010
Mining and Construction Technology 46.9 54.7 45.6 39.5 97.2
Energy and Environmental Technology 34.1 37.1 32.8 28.4 27.7
Paper and Fiber Technology 1.4 32.4 -3.3 18.5 34.4
Valmet Automotive -2.6 -5.5 0.3 -7.1 -1.4
Group Head Office and other -5.1 5.9 -9.2 4.5 -3.7
Group Head Office and others total -7.7 0.4 -8.9 -2.6 -5.1
Metso total 74.7 124.6 66.2 83.8 154.2








OPERATING PROFIT (LOSS)




EUR million 4-6/

2009
7-9/

2009
10-12/

2009
1-3/

2010
4-6/

2010
Mining and Construction Technology 46.0 53.7 44.2 38.1 95.7
Energy and Environmental Technology 29.7 32.9 27.8 23.5 22.7
Paper and Fiber Technology -1.6 27.6 -7.0 11.3 27.0
Valmet Automotive -2.6 -5.5 0.2 -7.1 -1.4
Group Head Office and other -5.6 5.4 -10.2 3.7 -4.0
Group Head Office and others total -8.2 -0.1 -10.0 -3.4 -5.4
Metso total 65.9 114.1 55.0 69.5 140.0








CAPITAL EMPLOYED




EUR million June 30,

2009
Sep 30,

2009
Dec 31,

2009
Mar 31,

2010
June 30,

2010
Mining and Construction Technology 1,191 1,111 1,072 1,109 1,098
Energy and Environmental Technology 659 626 524 512 499
Paper and Fiber Technology 475 427 636 675 664
Valmet Automotive 20 27 28 26 22
Group Head Office and other 816 956 1,108 921 1,061
Group Head Office and others total 836 983 1,136 947 1,083
Metso total 3,161 3,147 3,368 3,243 3,344








ORDERS RECEIVED




EUR million 4-6/

2009
7-9/

2009
10-12/

2009
1-3/

2010
4-6/

2010
Mining and Construction Technology 398 420 457 559 604
Energy and Environmental Technology 278 250 504 356 384
Paper and Fiber Technology 335 369 401 461 682
Valmet Automotive 14 7 14 11 17
Group Head Office and other - - - - -
Group Head Office and others total 14 7 14 11 17
Intra Metso orders received -5 -15 -11 -21 -16
Metso total 1,020 1,031 1,365 1,366 1,671








ORDER BACKLOG




EUR million June 30,

2009
Sep 30,

2009
Dec 31,

2009
Mar 31,

2010
June 30,

2010
Mining and Construction Technology 1,196 1,103 1,041 1,182 1,310
Energy and Environmental Technology 1,035 939 1,032 1,073 1,159
Paper and Fiber Technology 1,304 1,330 1,380 1,516 1,759
Valmet Automotive - - - - -
Group Head Office and other - - - - -
Group Head Office and others total - - - - -
Intra Metso order backlog -23 -32 -38 -51 -52
Metso total 3,512 3,340 3,415 3,720 4,176






PERSONNEL June 30,

2009
Sep 30,

2009
Dec 31,

2009
Mar 31,

2010
June 30,

2010
Mining and Construction Technology 10,344 10,014 9,541 9,550 9,787
Energy and Environmental Technology 6,349 6,119 6,060 5,873 6,114
Paper and Fiber Technology 9,858 9,475 10,459 10,326 10,526
Valmet Automotive 636 636 679 705 723
Group Head Office and other 421 419 427 494 515
Group Head Office and others total 1,057 1,055 1,106 1,199 1,238
Metso total 27,608 26,663 27,166 26,948 27,665

Notes to the Interim Review



We have prepared this Interim Review in accordance with IAS 34 'Interim Financial Reporting'. The same accounting policies have been applied as in the annual financial statements. This Interim Review is unaudited.

New accounting standards

IFRS 9

IASB has published a new standard IFRS 9 'Financial instruments: Recognition and measurement'. The standard represents the first milestone in the IASB's planned replacement of IAS 39. It addresses classification and measurement of financial assets. The next steps involve reconsideration and re-exposure of the classification and measurement requirements for financial liabilities, impairment testing methods for financial assets, and development of enhanced guidance on hedge accounting. We are currently evaluating the effects on our financial statements, and expect the standard to have major impacts on the accounting of financial instruments.

IFRS 9 becomes effective for the financial statements or periods beginning after January 1, 2013. It is still subject to endorsement by the European Union, and the endorsement process has been postponed.

Provided that the standard has received endorsement by the European Union, we will apply the standard for the financial year beginning on January 1, 2013.



Decisions of the Annual General Meeting

Our Annual General Meeting (AGM) on March 30, 2010 approved the Financial Statements for 2009 and decided to discharge the members of the Board of Directors and the President and CEO from liability for the financial year 2009. The AGM approved the proposals of the Board to authorize the Board to resolve on a repurchase of Metso's own shares, on share issue and granting of special rights and on donations to universities. The AGM also approved the proposal to amend Article 8 (notice convening a meeting) of the Articles of Association. On the basis of the decision made by the AGM, Metso granted a donation of EUR 1.9 million to Aalto University Foundation in June.

The AGM decided that a dividend of EUR 0.70 per share will be paid for 2009. The dividend was paid on April 13, 2010.

The AGM elected Jukka Viinanen Chairman of the Board and Maija-Liisa Friman Vice Chairman of the Board. Erkki Pehu-Lehtonen and Mikael von Frenckell were elected as new members of the Board. The Board members re-elected were Christer Gardell, Yrjö Neuvo and Pia Rudengren. The term of office of Board members lasts until the end of the next Annual General Meeting.

The AGM decided that the annual remunerations for Board members would be EUR 92,000 for the Chairman, EUR 56,000 for the Vice Chairman and EUR 45,000 for the members and that they be paid EUR 600 for each meeting they attend, including committee meetings. The AGM decided that 40 percent of the fixed annual remuneration be paid in Metso Corporation shares purchased from the market and that the shares will be purchased directly on behalf of the Board members within two weeks of the release of the Interim Review January 1-March 31, 2010. Accordingly, a total of 5,580 shares were purchased in the beginning of May 2010.

The auditing company, Authorized Public Accountants PricewaterhouseCoopers Oy, was re-elected as our Auditor until the end of the next AGM.

The AGM decided to establish a Nomination Committee of the AGM to prepare proposals for the following AGM regarding the composition of the Board and director remuneration. Representatives of the four biggest shareholders will be elected to the Nomination Committee on November 1, and the Chairman of the Board shall be an expert member of the committee.



Members of Metso Board Committees and personnel representatives

Our Board elected members from among the Board for the Audit Committee and Remuneration and HR Committee at its assembly meeting on March 30, 2010. The Board's Audit Committee consists of Pia Rudengren (Chairman), Maija-Liisa Friman and Erkki Pehu-Lehtonen. The Board's Remuneration and HR Committee consists of Jukka Viinanen (Chairman), Mikael von Frenckell, Christer Gardell and Yrjö Neuvo.

Metso's personnel groups in Finland have elected Jukka Leppänen as the personnel representative. He participates in the meetings of our Board of Directors as an invited external expert, and his term of office is the same as the Board members' term.



Shares and share capital

At the end of June 2010, our share capital was EUR 240,982,843.80 and the number of shares was 150,348,256. The number of shares includes 716,904 Metso shares held by the parent company, which represent 0.5 percent of all the shares and votes. The average number of shares outstanding in the first half of 2010, excluding Metso shares held by the Parent Company, was 149,735,400 and the average number of diluted shares was 149,838,466.

During February-March 2010, we executed a repurchase of 300,000 of our own shares relating to our share-based management incentive program decided on in October 2009 (Metso Share Ownership Plan 2010-2012). The average purchase price of the shares was EUR 23.47 and the total amount EUR 7,040,303.60.

During the first half of the year, 7,287 shares were returned from Metso Share Ownership Plan participants to the Parent Company due to employment terminations.

Our market capitalization, excluding Metso shares held by the Parent Company, was EUR 3,968 million on June 30, 2010.

Metso is not aware of any valid shareholders' agreements regarding the ownership of Metso shares or voting rights.



Share-based incentive plans

Metso's share ownership plans are part of the remuneration and commitment program for the management of the Group and the businesses. For further information, see www.metso.com/investors

Share ownership plan (SOP) for 2009-2011

In October 2008, the Board of Directors approved a new share ownership plan for the years 2009-2011. The SOP includes one three-year earnings period and required participants' personal investment in Metso shares at the beginning of the program. Any possible reward from the plan requires continued employment with Metso and reaching the financial targets set for the plan. The SOP has about 90 participants and the rewards paid correspond to a maximum of around 370,000 Metso shares. The plan will not have a diluting effect on the share value. Members of the Executive Team may receive a maximum of 77,400 shares as share rewards.

Share ownership plan (SOP) for 2010-2012

In October 2009, the Board of Directors approved a similar kind of share ownership plan for the years 2010-2012. The plan includes one three-year earnings period and required participants' personal investment in Metso shares. Any possible reward from the plan required continued employment with Metso and reaching the financial targets set for the plan. The program has about 90 participants and the rewards paid correspond to a maximum of around 340,000 Metso shares. The plan will not have a diluting effect on the share value. Members of the Executive Team may receive a maximum of 77,400 shares as share rewards.



Trading of Metso shares

The number of Metso Corporation shares traded on the NASDAQ OMX Helsinki Exchange during January-June was 127,765,419 shares, equivalent to a turnover of EUR 3,239 million. The price of the Metso share on June 30, 2010 was EUR 26.52 and the average trading price for the period was EUR 25.35. The highest quotation during the review period was EUR 30.00 and the lowest EUR 20.91.

Metso's ADSs (American Depositary Shares) are traded in the United States on the OTC market. On June 30, 2010, the closing price of an ADS was USD 32.31. Each ADS represents one share.



Disclosures of changes in holdings

There were no notifications on changes in holdings in Metso shares during January-June 2010.

On July 15, 2010, Marathon Asset Management LLP announced that on July 12, 2010 the Marathon Asset Management LLP holding in shares of Metso fell below the 5 percent threshold. The holding amounted to 7,437,730 shares, which corresponds to 4.95 percent of the total amount of shares and votes in Metso Corporation. Out of this holding, Marathon Asset Management LLP was in possession of 5,573,661 shares to which they had voting rights. This represents 3.71 percent of the total voting rights in Metso.

BlackRock Investment Management (UK) Limited announced that on February 24, 2010 the BlackRock, Inc. holding in shares of Metso amounted to 7,563,054 shares, which corresponds to 5.03 percent of the total amount of shares and votes in Metso Corporation.

BlackRock Investment Management (UK) Limited announced that on March 19, 2010 the BlackRock, Inc. holding in shares of Metso Corporation fell below the 5 per cent threshold. The holding amounted to 7,298,453 shares, which corresponds to 4.85 percent of the total amount of shares and votes in Metso Corporation.



Credit ratings

There were no changes in Metso's credit ratings during the first half of 2010 and they have remained unchanged since February 2009.

Moody's Investor's Service confirmed our Baa2 long-term credit rating with negative outlook in November 2009. Standard and Poor's Rating Services confirmed our BBB long-term credit rating with negative outlook as well as our A-3 short-term rating in June 2010.



Metso's financial reporting during the rest of 2010 and in 2011

The Interim Review for January-September 2010 will be published on October 28, 2010.

Metso's Financial Statement Review for 2010 will be published on February 3, 2011. The Annual Report will be published in the week starting on March 7, 2011 (week 10). The Interim Review for January - March 2011 will be published on April 29, 2011, the Interim Review for January - June 2011 on July 28, 2011 and the Interim Review for January - September 2011 on October 27, 2011 respectively.



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 about 27,000 employees in more than 50 countries. www.metso.com

Further information, please contact:

Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 (0)204 84 3000

Olli Vaartimo, Executive Vice President and CFO, Metso Corporation, tel. +358 (0)204 84 3010

Johanna Henttonen, Vice President, Investor Relations, Metso Corporation, tel. +358 (0)204 84 3253

Metso Corporation

Olli Vaartimo
Executive Vice President and CFO

Johanna Henttonen
Vice President, Investor Relations

Distribution:

NASDAQ OMX Helsinki Ltd

Media
www.metso.com