Stock Exchange release July 25, 2019 08:00:00 AM CET
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Metso’s Half-Year Review January 1 – June 30, 2019

Metso’s Half-Year Review January 1 – June 30, 2019

Metso Corporation, Stock Exchange Release, July 25, 2019 at 9:00 a.m. EEST

This is a summary of Metso’s January 1 – June 30, 2019 Half-Year Review. 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 2018, unless otherwise stated.

April-June 2019 in brief

  • Healthy market activity in both segments
  • Orders received increased 2% to EUR 869 million (855 million)
  • Sales grew 16%, totaling EUR 903 million (776 million)
  • EBITA improved to EUR 119 million, or 13.1% of sales (91 million, or 11.7%)
  • Operating profit improved to EUR 114 million, or 12.6% of sales (86 million, or 11.1%)
  • Earnings per share were EUR 0.59 (0.38)
  • Free cash flow was EUR 28 million negative (21 million positive)
  • Agreement to acquire McCloskey International, a Canadian mobile crushing and screening equipment manufacturer, was signed. The acquisition of a Chilean mining services business was completed.

January-June 2019 in brief

  • Orders received increased 10% to EUR 1,883 million (1,714 million)
  • Sales grew 17%, totaling EUR 1,739 million (1,490 million)
  • EBITA was EUR 222 million, or 12.8% of sales (176 million, or 11.8%)
  • Operating profit was EUR 214 million, or 12.3% of sales (167 million, or 11.2%)
  • Earnings per share were EUR 1.02 (0.71)
  • Free cash flow was EUR 10 million (23 million)

Key figures

EUR million Q2/2019 Q2/2018 Change % H1/2019 H1/2018 Change % 2018
Orders received 869 855 2 1,883 1,714 10 3,499
Orders received by services business 507 463 10 1,025 954 7 1,913
  % of orders received 58 54   54 56   55
Order backlog at the end of period     1,850 1,601 16 1,686
Sales 903 776 16 1,739 1,490 17 3,173
Sales by services business 472 442 7 934 864 8 1,773
  % of sales 52 57   54 58   56
EBITA 119 91 31 222 176 26 369
  % of sales 13.1 11.7   12.8 11.8   11.6
Operating profit 114 86 33 214 167 28 351
  % of sales 12.6 11.1   12.3 11.2   11.1
Earnings per share, EUR 0.59 0.38 55 1.02 0.71 44 1.53
Free cash flow -28 21   10 23 -57 146
Return on capital employed (ROCE) before taxes, %, annualized 20.9 16.8   16.9
Equity to assets ratio, %     43.4 47.0   47.7
Net gearing, %     28.7 13.7   11.7
Personnel at end of period     14,676 12,708 15 13,150

Combination of Metso Minerals and Outotec – Flow Control to become an independent company

On July 4, Metso announced a combination agreement between Metso Minerals business and the Outotec Group. Flow Control will become an independent listed company to be renamed Neles. The transaction is expected to be completed in the second quarter of 2020.

Market outlook

  • Market activity in both segments, Minerals and Flow Control, is expected to remain at the current high level in both the equipment and services business.


Metso’s market outlook describes the expected sequential development of market activity during the following six-month period using three categories: improve, remain at the current level, or decline.

President and CEO Pekka Vauramo:

We continued to perform well and made good progress during the second quarter. Activity in our end markets remained healthy and is shown in the good order intake for both Minerals and Flow Control. The pipeline for mining equipment orders continues to be good even though there were no large bookings during the quarter due to timing. Sales grew at a healthy double-digit rate in both segments. In addition to volume growth, we continue to show higher operational leverage with improving profitability in both segments. This proves that the internal work done across the businesses is generating the targeted results.

During the quarter we closed a mining services-related acquisition in Chile and signed an agreement to buy an aggregates equipment business in Canada. The acquired service business expands our services offering in the important mining markets in Chile and neighboring countries. It also strengthens our services capabilities to help customers to improve their productivity and performance. The McCloskey acquisition in Canada, which we expect to close in the fourth quarter, will expand our offering of mobile crushing and screening equipment and enable us to better meet the demands of a diverse customer base in the aggregates industry. Both acquisitions are logical steps in our profitable growth strategy.

In addition, on July 4, we announced an agreement to combine Metso Minerals with Outotec and to create an independent valve company, Neles. We are excited about the unique opportunities that this transaction will create. The Metso Outotec combination will enable us to drive sustainable growth together with our complementary offering of high-quality technology, in equipment and services, and leverage our extensive global presence, strong services network and large installed base. On the other hand, Neles will be able to capitalize on both organic and inorganic growth opportunities, thanks to its strong product portfolio and service offering as well as best-in-class profitability.

Audiocast and conference call details

Metso’s President and CEO Pekka Vauramo and CFO Eeva Sipilä will present the results in an audiocast and a conference call for analysts and investors today at 1:00 p.m. EEST. The audiocast can be followed at www.metso.com/latestreports. A recording and a transcript will be available at the same webpage after the event has finished.

Conference call participants are requested to dial in five minutes before the event on:
United States: +1 631 913 14 22
other countries: +44 333 300 08 04

The confirmation code for joining the conference call is 42030091#.

For further information:
Juha Rouhiainen, VP, Investor Relations, Metso Corporation, tel. +358 20 484 3253                
                                  
Metso Corporation

Eeva Sipilä
CFO

Juha Rouhiainen
VP, Investor Relations

Distribution:
Nasdaq Helsinki
Media
www.metso.com

Metso is a world-leading industrial company offering equipment and services for the sustainable processing and flow of natural resources in the mining, aggregates, recycling and process industries. With our unique knowledge and innovative solutions, we help our customers improve their operational efficiency, reduce risks and increase profitability. Metso is listed on the Nasdaq Helsinki in Finland and had sales of about EUR 3.2 billion in 2018. Metso employs over 14,000 people in more than 50 countries.

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

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