Metso's Interim Review January 1 - March 31, 2015
Metso Corporation's stock exchange release on April 23, 2015 at 12:00 noon local time
Metso will arrange a results audiocast on the day at 15:00 EEST (8:00 EDT, 13:00 BST, 14:00 CEST). The audiocast is viewable at www.metso.com/latestreports. A simultaneous conference call will be arranged, allowing participants to ask questions. You can also send your written questions during the audiocast via chat function.
Recording of the event is available at the earliest after the event has finished and a transcript will be available for downloading on Tuesday, April 28, 2015, the latest.
This is a summary of Metso's January-March 2015 Interim Review. Complete report is attached to this release as a pdf-file and is also available at metso.com/latestreports
Figures in brackets refer to the corresponding period in 2014, unless otherwise stated. The Process Automation Systems (PAS) business was divested on April 1, 2015, and is included in the Flow Control segment in this report. This report also contains pro forma information for periods of January-March 2015 and January-March 2014, which represents the Metso Group excluding the PAS business.
First quarter 2015 in brief
- Services net sales increased 7%
- Challenging market conditions affected equipment, project and product orders
- Divestment of the Process Automation Systems (PAS) business to Valmet was agreed on January 15, 2015 and closed on April 1, 2015
- Orders received EUR 799 million (EUR 875 million), of which EUR 542 million (EUR 545 million) were services orders.
- Net sales EUR 787 million (EUR 817 million), of which EUR 470 million services (EUR 438 million).
- EBITA before non-recurring items EUR 70 million, or 8.9% of net sales (EUR 88 million, 10.7%).
- Pro forma information (excluding PAS): orders received EUR 737 million (791 million), net sales EUR 732 million (756 million), EBITA before non-recurring items EUR 78 million, 10.6% of net sales (EUR 85 million and 11.3%)
Financial guidance for 2015
Our guidance for 2015 (originally published on February 5, 2015) remains unchanged. We estimate that our net sales, excluding the Process Automation Systems business, in 2015 will be between EUR 3,000 million and EUR 3,300 million and that our EBITA margin before non-recurring items will be around 13 percent.
The guidance for 2015 is based on the current market activity in our customer industries, our current backlog and the current exchange rates.
President and CEO Matti Kähkönen:
The mining equipment market weakened further in the beginning of this year, and revised investment plans in the oil & gas market have resulted in softening project market for our valve business. The services business, however, grew in the first quarter and is helping to offset the headwind from the equipment and project business. Overall, we were successful in maintaining our gross margins healthy and our performance was fairly stable in our core businesses. This gives us confidence in meeting our full-year guidance for 2015.
During the quarter we also continued implementing our strategy by signing an agreement to sell our Process Automation business (PAS) to Valmet for an enterprise value of EUR 340 million. The divestment was closed on April 1, 2015, and, as a result, major strategic repositioning of Metso has now been completed.
|EUR million|| Q1/ |
| Q1/ |
|Orders received by the services business||542||545||-1||2,052|
|% of orders received||68||62||60|
|Order backlog at the end of the period||1,631||1,944||-16||1,575|
|Net sales of the services business||470||438||7||2,007|
|% of net sales||60||54||55|
|Earnings before interest, tax and amortization (EBITA) and non-recurring items||70||88||-20||460|
|% of net sales||8.9||10.7||12.6|
|% of net sales||8.3||9.3||9.6|
|Earnings per share, EUR||0.25||0.28||-11||1.25|
|Free cash flow||87||48||81||204|
|Return on capital employed (ROCE) before taxes, annualized, %||12.9||14.3||16.4|
|Equity-to-asset ratio at the end of the period, %||36.6||33.6||40.5|
|Net gearing at the end of the period, %||41.4||42.8||45.6|
|Personnel at the end of the period||15,350||16,198||-5||15,644|
We expect the demand for mining equipment, products and projects to remain weak. Due to our large installed equipment base and our stronger services presence, we expect the demand for our mining services to remain good.
The demand for aggregates equipment is expected to be satisfactory, while the demand for related services is expected to be good.
The demand for Flow Control products related to customers' new investments is expected to be satisfactory. The demand for Flow Control services is expected to be good.
Metso is the world's leading industrial company in the mining and aggregates industries and in the flow control business. Our knowledge, people and solutions help drive sustainable improvements in performance and profitability in our customers' businesses.
Metso has an uncompromising attitude towards safety. Our products range from mining and construction equipment and systems to industrial valves and controls. Our solutions are delivered and supported by decades of process knowledge and a broad scope of services backed by a global footprint of over 90 service centers, thousands of service employees, and an extensive logistics network.
Metso is listed on the NASDAQ OMX Helsinki, Finland. In 2014, Metso's net sales totaled EUR 3.7 billion. Metso employs approximately 14,000 industry experts in more than 50 countries. Expect results.
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
NASDAQ OMX Helsinki Ltd
Conference call details
Conference call participants are requested to dial in five minutes before the scheduled time at:
United States: +1 646 254 3366
other countries: +44 20 3427 1903
The confirmation code for joining the conference call is 6107586.
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 for downloading on Tuesday, April 28, 2015 the latest.