Stock Exchange release October 20, 2017 08:00:00 AM CET
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Metso's Interim Review January 1 - September 30, 2017

Metso's Interim Review January 1 - September 30, 2017

Metso Corporation, Stock exchange release, October 20, 2017 at 09:00 a.m. EEST
 
Metso will arrange a results audio cast today at 1:00 p.m. EEST. The audio cast is viewable at www.metso.com/latestreports. The event will feature a simultaneous conference call allowing participants to ask questions. Details of the call are available at the end of this release.

This is a summary of Metso's Interim Review January 1 -September 30, 2017. The complete report is attached to this release and is also available at www.metso.com/latestreports.

Figures in brackets refer to the corresponding period in 2016, unless otherwise stated.

Third-quarter 2017 in brief (compared to the third quarter of 2016)

  • Market activity remained healthy
  • Orders received increased 30 percent and totaled EUR 817 million (EUR 628 million). Services orders increased 15 percent to EUR 486 million (EUR 422 million)
  • Sales increased 5 percent to EUR 673 million (EUR 638 million). Services sales increased 7 percent and totaled EUR 440 million (EUR 413 million)
  • Adjusted EBITA was EUR 43.0 million, or 6.4 percent of sales (EUR 77.2 million, or 12.1%), including EUR 33.3 million charges related to mining projects in the backlog
  • Adjusted EBITA excluding EUR 33.3 million charges was EUR 76.3 million or 11.3 percent of sales
  • Operating profit (EBIT) totaled EUR 39.4 million (EUR 62.9 million)
  • Earnings per share totaled EUR 0.13 (EUR 0.24)
  • Free cash flow was EUR 58 million (EUR 106 million)

January-September 2017 in brief (compared to corresponding period of 2016)

  • Orders received increased 12 percent and totaled EUR 2,298 million (EUR 2,052 million). Services orders increased 13 percent to EUR 1,462 million (EUR 1,299 million)
  • Sales increased 5 percent to EUR 1,996 million (EUR 1,910 million). Services sales increased 4 percent and totaled EUR 1,308 million (EUR 1,261 million)
  • Adjusted EBITA was EUR 179.4 million, or 9.0 percent of sales (EUR 210.2 million, or 11.0%)
  • Adjusted EBITA excluding EUR 33.3 million charges booked in the third quarter was EUR 212.7 million or 10.7 percent of sales
  • Operating profit (EBIT) totaled EUR 158.6 million (EUR 182.6 million)
  • Earnings per share totaled EUR 0.60 (EUR 0.70)
  • Free cash flow was EUR 101 million (EUR 242 million)
Market outlook

Metso has changed the way it comments on its market outlook. Going forward, our commentary will focus on the expected sequential market development with a rolling six months' view on the segment level (Minerals and Flow Control).

Our market conditions are expected to develop as follows:

  • Remain stable for Minerals equipment and services
  • Remain stable for Flow Control equipment and services

President and CEO Nico Delvaux
Our order intake was good in the third quarter, growing 30 percent year-on-year. Even when excluding the large mining equipment order booked during the quarter, we saw a healthy order increase across our businesses, which is reflective of the current market situation. However, our performance during the quarter was clearly not satisfactory. Especially disappointing was that we needed to book 33 million euros for cost overruns and write-downs related to mining projects in the backlog. Going forward, we will need to focus on our delivery capability and improve our operational excellence.

Since I took over as President and CEO in the beginning of August, we have been making some changes to our organization and to the way we operate. Our aim is to improve the accountability of our businesses and to speed up decision-making, the implementation of our growth plans, and our response to market changes. I am convinced that these changes will help us to get the most out of the improved market conditions and deliver profitable growth going forward.

Key figures

EUR million Q3/2017 Q3/2016 Change % Q1-Q3/
2017
Q1-Q3/
2016
Change % 2016
Orders received 817 628 30 2,298 2,052 12 2,724
Orders received by the services business 486 422 15 1,462 1,299 13 1,741
  % of orders received 59 67   64 63   64
Order backlog at the end of the period       1,491 1,305 14 1,320
Sales 673 638 5 1,996 1,910 5 2,586
Sales of the services business 440 413 7 1,308 1,261 4 1,703
  % of sales 65 65   66 66   66
Earnings before interest, tax and amortization
(EBITA), adjusted
43.0 77.2 -44 179.4 210.2 -15 274.0
  % of sales 6.4 12.1   9.0 11.0   10.6
Operating profit (EBIT) 39.4 62.9 -37 158.6 182.6 -13 227.1
  % of sales 5.9 9.9   7.9 9.6   8.8
Earnings per share, EUR 0.13 0.24 -46 0.60 0.70 -14 0.87
Free cash flow 58 106 -45 101 242 -58 339
Return on capital employed (ROCE) before tax, annualized, %       9.8 11.2   10.4
Equity-to-assets ratio at the end of the period, %       45.3 48.1   48.0
Net gearing at the end of the period, %       3.8 5.1   -1.8
Personnel at the end of the period       11,698 11,647   11,542

Conference call details
Conference call participants are requested to dial in five minutes before the event begins on:
United States: +1 719 457 1036
other countries: +44 330 336 9105

The confirmation code for joining the conference call is 2236457.

A recording of the event is available at www.metso.com/latestreports at the earliest after the event has finished and a transcript of the event will be available on Monday, October 23 at the latest.

For further information, please contact:
Nico Delvaux, President and CEO, Metso Corporation, tel. +358 20 484 3000
Eeva Sipilä, CFO, Metso Corporation, tel. +358 20 484 3010
Juha Rouhiainen, VP, Investor Relations, Metso Corporation, tel. +358 20 484 3253                 
                                  
Metso Corporation
Eeva Sipilä
CFO

Juha Rouhiainen
VP, Investor Relations

Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com

Metso is a world leading industrial company serving the mining, aggregates, recycling, oil, gas, pulp, paper and process industries. We help our customers improve their operational efficiency, reduce risks and increase profitability by using our unique knowledge, experienced people and innovative solutions to build new, sustainable ways of growing together.

Our products range from mining and aggregates processing equipment and systems to industrial valves and controls. Our customers are supported by a broad scope of services and a global network of over 80 service centers and about 6,000 services professionals. Metso has an uncompromising attitude towards safety.

Metso is listed on the NASDAQ OMX Helsinki, Finland, and had sales of about EUR 2.6 billion in 2016. Metso employs over 11,000 people in more than 50 countries. Expect results.

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