Metso Corporation's Interim Review January 1 - June 30, 2012
Metso Corporation's stock exchange release on July 26, 2012 at 12:00 a.m. local time
Solid order intake, strong net sales growth, and good results development
Metso will hold a news conference for media, investors and analysts in Helsinki
on Thursday, July 26, 2012 at 03:00 pm Finnish time. The event will take place
at Metso Group Head Office, Fabianinkatu 9 A, Helsinki, Finland. The news
conference can also be followed through a live webcast at
www.metso.com/irwebcasts or through a simultaneously arranged conference call.
The news conference will be in English (details at the end of this release).
This is a summary of Metso's Q2/2012 Interim Review and the complete report is
attached as a pdf-file to this release and is also available on our website at
www.metso.com/investors.
Figures in brackets, unless otherwise stated, refer to the comparison period,
i.e. the same period last year.
Highlights of the second quarter of 2012
* New orders worth EUR 1,735 million were received in April-June (EUR 2,883
million). Excluding the exceptionally large orders booked during the
comparison period, underlying orders received increased in the Mining and
Construction segment and were somewhat down in the Pulp, Paper and Power
segment. Automation segment orders received were in line with the comparison
period. Orders received by the services business across all segments were
EUR 812 million, i.e. 48 percent of all orders received (EUR 866 million and
31%).
* Net sales increased 21 percent on the comparison period to EUR 1,897 million
(EUR 1,567 million). Our Services business net sales were up 15 percent and
totaled EUR 795 million, accounting for 43 percent of total net sales (EUR
691 million and 46%).
* Earnings before interest, tax, and amortization (EBITA), before non-
recurring items, increased 27 percent and were EUR 177.4 million, i.e. 9.4
percent of net sales (EUR 139.8 million and 8.9%).
* Earnings per share were EUR 0.70 (EUR 0.45).
* Free cash flow was EUR 46 million negative (EUR 49 million positive).
Our guidance for financial performance during 2012 remains unchanged
We estimate that our net sales for 2012 will grow compared to 2011 and that our
profit (EBITA before non-recurring items) will improve.
The estimates for our financial performance in 2012 are based on Metso's current
market outlook, strong order backlog for 2012 and current business scope, as
well as on foreign exchange rates remaining similar to those in June 2012.
Metso's President and CEO Matti Kähkönen comments on the second quarter:
"We booked new orders valued at EUR 1,735 million during the second quarter,
which is a good figure given that we were not awarded any exceptionally large
orders of the type booked last year. This clearly reflects our strong
competitiveness and customers' confidence in Metso. Net sales of both our
capital and services businesses developed well, providing a good basis for a
strong result for the quarter. Mining and Construction as well as Automation
performed well showing also good incremental margins, while Pulp, Paper and
Power was impacted by business mix factors and some weakness in the Paper
business. Overall, we are satisfied with the first half and will continue to
implement our strategy consistently to add value for our customers and
stakeholders as we go forward."
Metso's key figures
EUR million Q2/ Q2/ Change % Q1-Q2/ Q1-Q2/ Change % 2011
2012 2011 2012 2011
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Orders received 1,735 2,883 -40 3,655 4,730 -23 7,961
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Orders received of services 812 866 -6 1,693 1,714 -1 3,100
business
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% of orders received (*)) 48 31 48 37 40
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Order backlog at end of 5,290 5,593 -5 5,310
period
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Net sales 1,897 1,567 21 3,652 3,011 21 6,646
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Net sales of services 795 691 15 1,516 1,331 14 2,871
business
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% of net sales (*)) 43 46 43 46 45
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Earnings before interest,
tax and amortization (EBITA)
and non-recurring items 177.4 139.8 27 317.8 263.4 21 628.5
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% of net sales 9.4 8.9 8.7 8.7 9.5
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Operating profit 163.9 121.0 35 292.1 233.9 25 571.8
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% of net sales 8.6 7.7 8.0 7.8 8.6
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Earnings per share, EUR 0.70 0.45 56 1.26 0.94 34 2.38
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Free cash flow -46 49 n/a 70 117 -40 375
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Return on capital employed
(ROCE) before taxes, 19.6 15.3 18.4
annualized, %
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Equity to assets ratio at 39.6 37.4 39.8
end of period, %
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Gearing at end of period, % 22.6 23.9 12.2
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(*) )Excluding Valmet Automotive
Short-term outlook
Market development
Demand was healthy in most of our customer industries during the early part of
the year, with some variation between different customer industries and
geographic areas. Although we saw increased uncertainty in the global economy
during the spring and early summer, we anticipate that our operating environment
in emerging markets will continue to be good in most of our customer industries,
despite the slowdown seen in India and China. We anticipate that most of our
customer industries will continue to utilize their capacity at a good or
satisfactory level, thereby supporting our services business.
We expect underlying demand in the mining market to remain good. Due to expected
high utilization rates at mines, our large installed equipment base, and our
strengthened services presence, we expect demand for our mining services to
remain excellent.
Demand for construction equipment is projected to somewhat slow down and be
satisfactory in the Asia-Pacific region and Brazil. We anticipate that demand
for equipment used in aggregates processing by the construction industry in
Europe and North America will stay at current relatively low levels going
forward. Demand for our construction industry services is expected to remain
satisfactory.
Demand for our automation products and services is also expected to remain good,
although activity in the pulp and paper industry is anticipated to slow
somewhat.
The market for pulp mills is expected to remain satisfactory, with good demand
for rebuilds and services.
Demand for papermaking lines is expected to be weak. Capacity utilization rates
in the paper and board industry are expected to remain sufficient to keep demand
for our services at a good level.
Demand for power plants that use renewable energy sources is expected to remain
satisfactory, while that for power plant services is anticipated to be
satisfactory.
Metso is a global supplier of technology and services to customers in the
process industries, including mining, construction, pulp and paper, power, and
oil and gas. Our 30,000 professionals based in over 50 countries deliver
sustainability and profitability to customers worldwide. Expect results.
www.metso.com , www.twitter.com/metsogroup
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
Metso Corporation
Harri Nikunen
CFO
Juha Rouhiainen
VP, Investor Relations
Invitation to news conference
Metso will hold a news conference for media, investors and analysts in Helsinki
on Thursday, July 26, 2012 at 15:00 EEST / Helsinki (08:00 EST / New York,
13:00 BST / London, 14:00 CEST / Paris)
The event will take place at Metso Group Head Office, Fabianinkatu 9 A,
Helsinki, Finland. The news conference will be held in English.
The news conference can also be followed through a live webcast at
www.metso.com/IRwebcasts or through a simultaneously arranged conference call.
It will be possible to ask questions during the event through the conference
call.
Due to the live webcast, we are kindly asking those attending the news
conference to be present 5 minutes prior the start of the event.
Conference call details
Conference call participants are requested to dial in five minutes prior to the
start of the teleconference
* US: +1 877 491 0064
* other countries: +44 20 7162 0077
* access code: 910 754
A replay will be available for 14 days until August 9, 2012 on the following
phone numbers:
* US: +1 954 334 0342
* other countries: +44 20 7031 4064
* access code 910 754
An audio file (mp3) and a transcript of the event are available for downloading
at www.metso.com/IRwebcasts at the latest on Friday, July 27. The presentation
material will be available after the publishing of the Interim Review at
www.metso.com/Investors.
You are most welcome to participate.
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com