Metso Corporation's Interim Review January 1 - September 30, 2012
Metso Corporation's stock exchange release on October 25, 2012 at 12:00 a.m. local time
Stable performance and strong service orders
www.metso.com/irwebcasts or through a simultaneously arranged conference call. The news conference will be held in English (details at the end of this release).
Metso will hold a news conference for media, investors and analysts in Helsinki on Thursday, October 25, 2012 at 3:00 pm Finnish time. The event will take place at Metso Group Head Office, Fabianinkatu 9 A, Helsinki, Finland. The news conference can also be followed through a live webcast at
This is a summary of Metso's Q3/2012 Interim Review. Complete report is attached to this release as a pdf-file and is also available at www.metso.com/investors.
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period last year.
Highlights of the third quarter of 2012
New orders worth EUR 1,511 million were received in July-September (EUR 1,918 million). Orders declined, mainly in the Pulp, Paper and Power segment. Orders received by the services business across all segments increased strongly to EUR 830 million and represented 57 percent of all orders received (EUR 717 million and 39%).
Net sales increased 12 percent compared to the same period last year and were EUR 1,754 million (EUR 1,561 million). Services business net sales were up 11 percent and totaled EUR 788 million, accounting for 46 percent of total net sales (EUR 711 million and 48%).
Earnings before interest, tax, and amortization (EBITA), before non-recurring items, increased 5 percent and were EUR 171 million, i.e. 9.7 percent of net sales (EUR 163 million and 10.4%).
Earnings per share were EUR 0.74 (EUR 0.63).
Free cash flow was EUR 118 million (EUR 213 million).
Our guidance for financial performance during 2012 remains unchanged
We estimate that our net sales for 2012 will grow compared to 2011 and that our profit (EBITA before non-recurring items) will improve.
The estimates for our financial performance in 2012 are based on Metso's current market outlook, strong order backlog for 2012, and current business scope, as well as on foreign exchange rates remaining similar to those in September 2012.
Metso's President and CEO Matti Kähkönen comments on the third quarter:
Demand was very much in line with our expectations. We experienced some softening in mining projects towards the end of the quarter, although demand remained at a historically good level. Quarterly orders were satisfactory, considering that we did not receive any large project orders. I am pleased with the growth of our services orders, in particular, and this will support good net sales development in services going forward. Group net sales and EBITA both increased and were on a healthy level.
In September, we took the decision to restructure our paper machine business in Finland as a result of the permanent changes that have been experienced in the industry. By implementing these necessary changes, we can ensure that we will be able to maintain our competitiveness and leading position in a rapidly changing business environment.
Metso's key figures
|EUR million|| Q3/|
|Change %|| Q1-Q3/|
|Orders received of services business||830||717||16||2,523||2,431||4||3,100|
|% of orders received *)||57||39||51||38||40|
|Order backlog at end of period||5,031||5,926||-15||5,310|
|Net sales of services business||788||711||11||2,304||2,042||13||2,871|
|% of net sales *)||46||48||44||47||45|
|Earnings before interest, tax and amortization (EBITA) and non-recurring items||170.6||163.0||5||488.4||426.4||15||628.5|
|% of net sales||9.7||10.4||9.0||9.3||9.5|
|% of net sales||8.9||9.6||8.3||8.4||8.6|
|Earnings per share, EUR||0.74||0.63||17||2.00||1.57||27||2.38|
|Free cash flow||118||213||-45||188||330||-43||375|
|Return on capital employed (ROCE) before taxes, annualized, %||20.1||16.6||18.4|
|Equity to assets ratio at end of period, %||41.8||38.4||39.8|
|Gearing at end of period, %||16.7||13.8||12.2|
*) Excluding Valmet Automotive
Demand has been healthy in most of our customer industries during the year, with some variation between different customer industries and geographical areas. Increased uncertainty was experienced in the global economy, mainly due to a slowdown in India and China. However, we anticipate that the operating environment in emerging markets will remain good in most of our customer industries. We anticipate that most of our customer industries will continue to utilize their capacity at a good or satisfactory level, thereby supporting our services business.
We expect underlying demand in the mining market to remain on a historically good level. It is possible, however, that demand for capital equipment might be slightly lower during the next couple of quarters. Due to the high utilization rates expected at mines, our large installed equipment base, and our stronger services presence, we expect demand for our mining services to remain excellent. Demand for construction equipment is projected to stay flat and to be satisfactory in the Asia-Pacific region and Brazil. We anticipate that demand for equipment used in aggregates processing by the construction industry in Europe and North America will stay at current relatively low levels going forward. Demand for our construction industry services is expected to remain satisfactory.
Demand for process automation systems and flow control products and services is also expected to remain good. The strength of the oil and gas industry is expected to offset the anticipated slowdown in pulp and paper industry.
The market for pulp mills is expected to remain satisfactory, with good demand for rebuilds and services. Demand for papermaking lines is expected to remain weak. Capacity utilization rates in the paper and board industry might decline somewhat, although the outlook for services is good. Demand for power plants that use renewable energy sources, together with that for power plant services, is expected to remain satisfactory.
Metso is a global supplier of technology and services to customers in the process industries, including mining, construction, pulp and paper, power, and oil and gas. Our 30,000 professionals based in over 50 countries deliver sustainability and profitability to customers worldwide. Expect results.
www.metso.com , www.twitter.com/metsogroup
For further information, please contact:
Matti Kähkönen, President and CEO, Metso Corporation, tel. +358 20 484 3000
Harri Nikunen, CFO, Metso Corporation, tel. +358 20 484 3010
Juha Rouhiainen, VP, Investor Relations, Metso Corporation, tel. +358 20 484 3253
VP, Investor Relations
Invitation to news conference
Metso will arrange a news conference in Helsinki on Thursday, October 25, 2012 at 3:00 pm EEST / Helsinki (08:00 EDT / New York, 13:00 GMT / London, 14:00 CEST / Paris)
The event will take place at Metso Group Head Office, Fabianinkatu 9 A, Helsinki, Finland. The news conference will be held in English.
The conference can also be followed through a live webcast at www.metso.com/IRwebcasts and a simultaneously arranged conference call at 3:00 pm EEST. It will be possible to ask questions during the event through the conference call.
Due to the live webcast, we kindly ask those attending to be present 5 minutes prior to the start of the event.
Conference call details
Conference call participants are requested to dial in five minutes before the scheduled time at:
US: +1 877 491 0064
other countries: +44 20 7162 0077
access code: 910 755
A replay of the call will be available until November 8, 2012 on the following phone numbers:
US: +1 954 334 0342
other countries: +44 20 7031 4064
access code 910 755
An audio file (mp3) and a transcript of the event will be made available for downloading at www.metso.com/IRwebcasts on Friday, October 26, 2012 the latest.
The presentation material for the event will be accessible after the interim review publication on October 25, 2012 at www.metso.com/Investors at approximately 12 noon EEST.
You are most welcome to participate.
NASDAQ OMX Helsinki Ltd