Net sales increased

Metso’s net sales increased by 12 percent on the comparison year and totaled EUR 4,343 million. The main reasons were the acquisition of Svedala and increased deliveries.

Result continued to improve

Metso’s income before extraordinary items and income taxes improved by 23 percent from 2000 and was EUR 222 million. Earnings per share improved by 21 percent, totaling EUR 1.09. The improvement in result was influenced by the growing share of service operations, the synergy benefits arising from the merger that created Metso and cost savings.

The net amount of nonrecurring income and expenses was EUR 4 million. The nonrecurring expenses derived from business restructuring totaled EUR 39 million and other nonrecurring expenses EUR 4 million. Nonrecurring income included a EUR 47 million gain on the sale of listed and other shares.

Orders were focused on rebuilds

The orders Metso received in 2001 were focused increasingly on papermaking line rebuilds and on crushing systems for the construction and civil engineering industry. Orders for new paper machines were received mainly from China and Europe.

Metso acquired Svedala

In September, Metso acquired Svedala, a Swedish manufacturer of rock and mineral processing equipment. The acquisition made Metso a global market leader in rock and mineral processing systems. It also provided Metso with a second strong business alongside fiber and paper technology. The integration of Svedala into Metso Minerals began immediately after the closing of the acquisition. The Svedala acquisition is expected to improve Metso’s earnings per share one year after the closing of the deal.

Gearing increased

The Corporation’s net interest-bearing liabilities totaled EUR 1,251 million. The acquisition of Svedala in September 2001 increased net interest-bearing liabilities by EUR 1,371 million. Gearing, i.e. the ratio of net interestbearing liabilities to shareholders’ equity, was 84.8 percent. Metso’s objective is to return the gearing ratio to less than 50 percent by the end of the first quarter of 2003, by disposing of non-core assets and businesses and by releasing especially Metso Minerals’ working capital tied up in inventories and accounts receivable.

Four focal areas for Metso Future Care

In 2001 Metso chose four areas, closely related to the needs of customers, as the focal areas for the Metso Future Care business concept. Firstly, development of maintenance and aftermarket service concepts for the primary needs of customers. Secondly, development of maintenance solutions and process upgrading with the aid of new methods based on remote diagnostics. Thirdly, development of knowledge-based services related to the preparation and implementation of customer investments. Fourthly, development of customer-specific services so that customers gain a consistent picture of Metso as a total service provider.

Service operations were significantly strengthened

Metso opened service technology centers in Wuxi, China and in Beloit, USA and made a decision to set up two new service technology centers at Järvenpää and Oulu, Finland. The strengthening of the service network is part of the Corporation’s strategic Metso Future Care business concept. The contribution of service operations to net sales grew significantly with the acquisition of Svedala.

The management of core business areas was strengthened

In order to promote Metso’s strategic transition into a knowledge-based company and to support development in line with the Metso Future Care business concept, Metso appointed Executive Vice Presidents for its two biggest business areas. Arto Aaltonen, formerly President of Metso Automation, was appointed Executive Vice President of Metso Paper, and Vesa Kainu, formerly President of Metso Paper Service, was appointed Executive Vice President of Metso Minerals. Matti Kähkönen was appointed the new President of Metso Automation.

10 percent of Valmet Automotive was sold to ThyssenKrupp

Metso sold 10 percent of the shares of Valmet Automotive, a contract manufacturer of specialty cars, to ThyssenKrupp Automotive AG, one of the world’s biggest automotive systems suppliers. ThyssenKrupp Automotive has an option to acquire the total stock of Valmet Automotive during the next two years.

Inaugural euro bond offering launched

In November, Metso launched an inaugural EUR 500 million bond offering at a 6.25 percent nominal rate, to mature on December 11, 2006. The offering is documented under Metso’s EMTN Program and is intended for refunding the bank loans raised for the Svedala acquisition.

Metso was selected for the Dow Jones Sustainability Index

Metso was accepted for the Dow Jones Sustainability Index for the third successive time. This means that Metso has been included in the index every year since its establishment in 1999. The Dow Jones Sustainability Index evaluates how well the world’s biggest companies take the principles of sustainable development into consideration in their operation.