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Metso Corporation (HEL:MEO1V) Metso Corporation Press release on September 2, 2008 at 8.15 a.m.
Metso is arranging a Capital Markets Day (CMD) event for analysts and investors in Helsinki and Tampere, Finland on September 2 and 3, 2008. The event focuses on Metso's profitable growth strategy for 2008-2012. In addition to updates of Metso businesses, the construction business will be discussed in more detail.
All Capital Markets Day presentations are available on the Internet at www.metso.com. Today's seminar program will be available at www.metso.com and all the presentations can be followed live through a webcast at the same site.
"We continue to focus on sustainable profitable growth through 2012. Many global megatrends are supporting this and we continue to see a lot of improvement potential in all our business," says Jorma Eloranta, President and CEO of Metso Corporation. "At the CMD we concentrate on giving longer-term view on Metso, our business environment and opportunities in line with our strategy's four-year perspective. Despite the current uncertainties in world economy we are ready to raise our ambition level. We continue our efforts to make our business and earnings sustainable and less vulnerable to business cycles. In a more near-term perspective and based on the recent large orders, we expect the order backlog at the end of the third quarter to be strong, and thus providing solid outlook for 2009," says Eloranta.
In explaining the new, long-term financial targets for 2009-2012 Metso's CFO Olli Vaartimo comments: "We are targeting growth of over 10% growth in our mining and construction businesses as well as in the energy and environment businesses. The growth in our paper and fiber businesses is expected to come mainly from the services, and to be below 10%. We expect growth of services to be an important driver in all businesses. We estimate services eventually to represent about 40% of our net sales compared to 35% currently. Emerging markets are also an important growth driver for us representing in the future about 50% of our new orders. The new EBITA margin target of >12% means about 1.5 percentage points upgrade on the previous >10% EBIT margin target. All our businesses are expected to contribute to the profitability improvement. In Mining and Construction Technology reporting segment as well as in Energy and Environment Technology profitability is expected to be primarily linked to volume leverage and increased share of the services business. In Paper and Fiber Technology we continue to target overall profitability improvement; coming both from capital equipment business and from increased share of the services business," says Vaartimo.
The following presents the historical pro forma financials of Metso's new reporting segments Mining and Construction Technology, Energy and Environment Technology and Paper and Fiber Technology.
Preliminary pro forma key ratios of new reporting segments Mining and Construction Technology EUR million 2006 2007 1-6/2007 1-6/2008 Orders received 2,374 2,773 1,407 1,621 Orders received growth, % 17% 15% Net sales 1,934 2,326 1,075 1,198 Net sales growth, % 20% 11% Earnings before interest, tax and amortization (EBITA) 265 320 149 171 % of net sales 13.7% 13.7% 13.8% 14.3% Capital employed 908 1,022 1,091 1,253 Return on capital employed (ROCE), % 23.1% 32.9% 30.7% 30.2% Order backlog 1,088 1,512 1,448 1,849 Personnel 8,790 9,825 9,308 10,487 Energy and Environment Technology EUR million 2006 2007 1-6/2007 1-6/2008 Orders received 976 1,887 1,148 744 Orders received growth, % 9% -35% Net sales 873 1,545 697 849 Net sales growth, % 12% 22% Earnings before interest, tax and amortization (EBITA) 125 177 71 84 % of net sales 14.3% 11.5% 10.2% 9.9% Capital employed 369 512 435 528 Return on capital employed (ROCE), % 33.9% 30.2% 25.8% 26.3% Order backlog 1,189 1,374 1,465 1,248 Personnel 5,532 5,883 5,814 6,327 Paper and Fiber Technology EUR million 2006 2007 1-6/2007 1-6/2008 Orders received 2,276 2,290 1,183 872 Orders received growth, % 1% -26% Net sales 2,092 2,360 1,109 975 Net sales growth, % 13% -12% Earnings before interest, tax and amortization (EBITA) 106 150 68 56 % of net sales 4.7% 6.6% 5.8% 6.4% Capital employed 416 439 468 591 Return on capital employed (ROCE), % 38.6% 34.0% 28.5% 19.0% Order backlog 1,498 1,529 1,709 1,438 Personnel 10,027 10,094 10,361 10,089
The presentation of Metso CFO Olli Vaartimo includes previously undisclosed historical information of certain Metso businesses, which is summarized in the following.
Profitability (EBITA% and ROCE %) 2006 2007 EBITA % ROCE % EBITA% ROCE% Recycling 14.6% 56.9% 15.2% 58.6% Power N/A N/A 6.2% 2.9% Automation 14.2% 78.4% 14.2% 54.4% Paper and Board 6.8% 39.7% 7.7% 42.1% Fiber 3.0% 16.4% 4.8% 18.7%
The presentation of Olli Vaartimo also includes previously undisclosed historical free cash flow information by the Metso's current business areas, which is summarized in the following.
1-6/2008 CO & Minerals Paper Auto-mation Auto-motive other Metso Net sales 1,321 1,349 352 42 -31 3,033 Operating profit 183 60 43 2 -14 275 % of net sales 13.9% 4.5% 12.2% 4.5% n/a 9.1% Amortization 3 21 1 0 1 25 Earnings before interest, tax and amortization (EBITA) 186 81 44 2 -13 300 % of net sales 14.1% 6.0% 12.5% 4.5% n/a 9.9% Depreciation and other adjustments 20 20 4 4 7 55 Change in net working capital -132 -104 -14 -4 0 -254 Investment activities -20 -27 -7 -1 -2 -57 Interest paid and dividend received x) -10 -10 Income tax paid x) -74 -74 FREE CASH FLOW 54 -29 28 1 -93 -40 Financing items and taxes are reported under Corporate x) Office without allocating them to the business areas.
1-12/2007 CO & Minerals Paper Auto-mation Auto-motive other Metso Net sales 2,607 2,925 698 85 -65 6,250 Operating profit 363 137 99 8 -27 580 % of net sales 13.9% 4.7% 14.2% 9.4% n/a 9.3% Amortization 5 48 1 0 2 56 Earnings before interest, tax and amortization (EBITA) 367 185 100 8 -25 635 % of net sales 14.1% 6.3% 14.4% 9.5% n/a 10.2% Depreciation and other adjustments 33 49 6 9 -9 88 Change of net working capital -143 -76 -62 -4 -1 -286 Investment activities -28 -50 -10 -4 -4 -95 Interest paid and dividend received x) -29 -29 Income tax paid x) -114 -114 FREE CASH FLOW 229 108 34 9 -182 198 Financing items and taxes are reported under Corporate x) Office without allocating them to the business areas.
Metso is a global engineering and technology corporation with 2007 net sales of over EUR 6 billion. Its over 27,000 employees in approximately 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. www.metso.com
For more information, please contact: Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 204 84 3000 Olli Vaartimo, Executive Vice President and CFO, Metso Corporation, tel. +358 204 84 3010
Further information for investors, please contact: Johanna Sintonen, Vice President, Investor Relations, Metso Corporation, tel. +358 20 484 3253
It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for customer industry profitability and investment willingness, expectations for company growth, development and profitability and the realization of synergy benefits and cost savings, and statements preceded by "expects", "estimates", "forecasts" or similar expressions, are forward-looking statements. These statements are based on current decisions and plans and currently known factors. They involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected by the company.
Such factors include, but are not limited to: (1) general economic conditions, including fluctuations in exchange rates and interest levels which influence the operating environment and profitability of customers and thereby the orders received by the company and their margins (2) the competitive situation, especially significant technological solutions developed by competitors (3) the company's own operating conditions, such as the success of production, product development and project management and their continuous development and improvement (4) the success of pending and future acquisitions and restructuring.
Metso Corporation
Olli Vaartimo Executive Vice President and CFO
Kati Renvall Vice President, Corporate Communications
Distribution: OMX Nordic Exchange in Helsinki Media www.metso.com
