Stock Exchange release September 23, 2013 02:10:00 PM CET

Metso publishes illustrative financial information for its continuing operations

Metso Corporation's stock exchange release on September 23, 2013 at 3:10 p.m. local time


In parallel with the demerger prospectus published today for Valmet Corporation, which will be incorporated in connection of the partial demerger of Metso Corporation, Metso is also publishing illustrative financial information for Metso's continuing operations for the 2012 financial year and the first half of 2013.

Metso's Board of Directors unanimously approved a demerger plan on May 31, 2013 under which all the assets, debts, and liabilities relating to Metso's Pulp, Paper and Power businesses will transfer, without liquidation, from Metso to Valmet. Valmet will be incorporated as part of the demerger and an application will be made to list its shares on NASDAQ OMX Helsinki Ltd. Metso's Mining and Construction segment and Automation segment will form the continuing operations of Metso.

On August 15, 2013, the Board unanimously decided to propose the approval of the demerger and the demerger plan to the Extraordinary General Meeting of Metso shareholders scheduled for October 1, 2013. The completion of the partial demerger is expected to be registered in the Finnish Trade Register on or about December 31, 2013. The prospectus relating to Valmet was published today and is available on Metso's website (www.metso.com).

Basis of preparation of unaudited illustrative financial information

The following unaudited illustrative financial information is presented to illustrate the results of operations and financial position for Metso's continuing operations had the partial demerger taken place on January 1, 2012. The information is based on financial data derived from Metso's audited consolidated financial statements as of and for the year ended December 31, 2012, restated for the impact of the adoption of the revised IAS 19 "Employee Benefits" standard and from Metso's unaudited consolidated interim report as of and for the six month period ended June 30, 2013.

This information is presented for illustrative purposes only. Because of its nature, it addresses a hypothetical situation and does not represent the actual results of operations or the financial position of Metso had the demerger been completed on January 1, 2012; nor is it intended to project the results of operations or the financial position of Metso as of any future date.

Management believes that the illustrative information presented in this release provides a relevant basis to present the result of operations and financial position of the continuing Metso Group. The adjustments made in preparing the illustrative information are based on available information and assumptions. There is no certainty that these assumptions will prove correct.

The following significant assumptions and adjustments to historical information have been made in the preparation of the illustrative financial information for Metso's continuing operations:

  • All the revenues and expenses, as well as assets and liabilities relating to the Valmet business, have been excluded from Metso's reported consolidated financial information.
  • Due account has been taken of the effects of certain intra-group arrangements that have been or will be undertaken by Metso prior to the demerger in order to achieve the planned legal group structures of both Metso and Valmet and the effects of certain refinancing measures, including a settlement of intra-group items between Metso and Valmet. The net settlement of intra-group balances has been treated as an adjustment to the cash and cash equivalents for illustrative balance sheet purposes (a reduction of EUR 102 million as of December 31, 2012 and an increase of EUR 40 million as of June 30, 2013), reflecting the cash amount to be paid by Metso to Valmet or vice versa to settle the balances.
     

  • The total amount of equity adjusted from the historical Metso's equity balance in the illustrative consolidated balance sheets represents the amount of net assets attributable to the Valmet business. The adjustments made to equity reflect Valmet Croup's contemplated equity structure.

Accounting treatment of the demerger

The demerger will be accounted for as a disposal in accordance with IFRIC 17, Distributions of non-cash assets to owners. Once the demerger has taken place, the difference between the fair value of the Valmet business and its book value in Metso's consolidated balance sheet will be recorded as a gain on distribution. The Valmet business to be spun off through the demerger will be presented as discontinued operations in Metso's financial reporting after shareholders have approved the demerger.

KEY FIGURES FOR METSO GROUP AFTER THE DEMERGER
As of and for
the six months ended
June 30,
As of and for
the year ended
December 31,
EUR million 2013 2012
Net sales, total 2,007 4,499
Operating profit 192 463
Profit before taxes 158 404
Amortization of intangible assets -10 -20
Depreciation of tangible assets -30 -57
Non-recurring items
Capacity adjustment expenses 0 -12
Cost related to demerger process -1 0
Other NRE -21 0
EBITA, before non-recurring items 224 495
EBITA, % before NRE 11.2 % 11.0 %
EBITDA 232 540
Earnings per share, EUR   0.71 1.82
Shares (outstanding shares, period average) 149,787,111 149,715,383
Balance sheet total 3,830 4,000
Equity 1,177 1,359
Interest-bearing liabilities 1,105 1,094
Net debt 565 385
Gearing 48.0 % 28.3 %
ROCE before taxes 16.9% 19.2%
ROCE after taxes 12.4% 13.8%
Orders received, external 2,103 4,432
Order backlog 2,262 2,269
Personnel, at the end of period 18,033 17,665

EBITA, before non-recurring items: Operating profit + amortization + non-recurring items
EBITDA Operating profit + depreciation and amortization
Earnings per share, EUR   Profit
Number of outstanding shares of Metso, average
Gearing, % Net interest bearing liabilities x 100
Total equity
Return on capital employed (ROCE)  before taxes, % Profit before taxes + interest and other financial expenses x 100
Balance sheet total - non-interest bearing liabilities
Return on capital employed (ROCE)  after taxes, % Profit + interest and other financial expenses x 100
Balance sheet total - non-interest bearing liabilities


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 contribute to sustainability and deliver profitability to customers worldwide. Metso's shares are listed on the NASDAQ OMX Helsinki Ltd.

www.metso.com, www.twitter.com/metsogroup

Further information, please contact:

Juha Rouhiainen, VP, Investor Relations, Metso Corporation, tel +358 20 484 3253

Metso Corporation

Harri Nikunen

CFO

Juha Rouhiainen

VP, Investor Relations

Distribution:

NASDAQ OMX Helsinki Ltd

Media

www.metso.com