Metso's Financial Statements Review January 1 - December 31, 2015
Metso's Financial Statements Review January 1 - December 31, 2015
Metso's Financial Statements Review January 1 - December 31, 2015
Metso Corporation's stock exchange release on February 4, 2016 at 09:00 a.m. local time
Metso will arrange a results audiocast today at 13:00 EET (6:00 EST, 11:00 UTC, 12:00 CET). The audiocast is viewable at www.metso.com/latestreports. A simultaneous conference call will be arranged, allowing participants to ask questions. A recording of the event is available at the earliest after the event has finished and a transcript will be available for downloading.
This is a summary of Metso's January-December 2016 Financial Statements Review. Complete report is attached to this release as a pdf-file and is also available at www.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 not included in the Flow Control segment's figures for April-December 2015. Figures for 2014 and all comparison periods prior to the divestment include PAS. Like-for-like comparisons are made with a separate note.
Fourth-quarter 2015 in brief
- Orders received EUR 758 million (EUR 801 million, or EUR 721 million excluding PAS), of which EUR 440 million (EUR 481 million, or EUR 446 million excluding PAS) were services orders.
- Net sales EUR 754 million (EUR 1,018 million, or EUR 921 million excluding PAS), of which EUR 481 million services (EUR 572 million, or EUR 525 million excluding PAS).
- EBITA before non-recurring items EUR 91 million and 12.0% of net sales (EUR 138 million and 13.5%, or EUR 120 million and 13.0% excluding PAS).
Full-year 2015 in brief
- Weak economic growth in emerging markets and low commodity prices had a negative impact on the demand for capital equipment in the mining and oil & gas industries.
- Orders received EUR 3,027 million (EUR 3,409 million), or EUR 2,965 million (EUR 3,074 million) excluding PAS. Services orders totaled EUR 1,913 million (EUR 2,052 million), or EUR 1,879 million (EUR 1,910 million) excluding PAS.
- Net sales EUR 2,977 million (EUR 3,658 million), or EUR 2,923 million (EUR 3,363 million) excluding PAS. Services net sales totaled EUR 1,869 million (EUR 2,007 million) or EUR 1,840 million (EUR 1,869 million) excluding PAS.
- EBITA before non-recurring items EUR 347 million and 11.7 percent of net sales (EUR 460 million and 12.6%), or EUR 356 million and 12.2 percent (EUR 426 million and 12.7%) excluding PAS.
- Strong free cash flow of EUR 341 million (EUR 204 million).
- Divestment of the Process Automation Systems business resulted in a gain of EUR 252 million.
- Earnings per share EUR 2.95 (EUR 1.25).
- Strong balance sheet with gearing of 10.6 percent (45.6%).
- The Board will propose to the AGM a dividend of EUR 1.05 (EUR 1.05 and extra dividend of EUR 0.40).
Outlook for 2016
Metso has changed its guidance policy and will discontinue publishing financial guidance as of the beginning of 2016. Instead of numerical financial guidance on the development of our net sales and profitability, we will share our views on the overall trading conditions, expected demand development in our end markets, as well as some financial information, such as expected capital expenditure and restructuring costs during the current financial year.
Metso's overall trading conditions are expected to weaken somewhat in 2016 compared to 2015. Demand for our products and services is expected to develop as follows:
- remain weak for mining equipment and satisfactory for mining services
- remain satisfactory for aggregates equipment and services
- remain satisfactory for Flow Control products related to customers' new investments and good for Flow Control services
We expect to invoice EUR 1.1 billion from our year-end 2015 backlog during 2016. Internal efficiency actions will continue to improve competitiveness and mitigate price pressure that can be seen in the markets that are facing weak or satisfactory demand. Restructuring costs are expected to be lower than in 2015. Capital expenditure without acquisitions and net financial costs are expected to be on the same level as in 2015.
President and CEO Matti Kähkönen:
Last year we achieved fairly good results overall, despite a weakening demand in many of our end markets. Our profitability (EBITA margin before non-recurring items) remained on a good level, 12.2 percent compared to 12.7 percent in 2014, while orders and net sales declined. These figures do not include the divested PAS business. The gain from the PAS divestment increased our operating profit (EBIT) to EUR 555 million and earnings per share to EUR 2.95. I would also want to highlight the substantial progress in Metso's safety culture, seen in the decreasing number of work-related incidents. The number of recorded incidents decreased by 28 percent from the previous year, and the incident frequency rate was 2.6 compared to 3.9 in 2014.
We also continued to make good progress in making Metso an increasingly better and more competitive company. We have renewed our product and services offering to meet our customers' changing needs, and we have implemented new business models so that our organizations are structurally lighter, responsibilities are clear in all areas, and we are generally more flexible in reacting to changes in the business environment.
This report features our renewed guidance policy, which follows industry practice. Metso is today a product and services-focused company, with less internal volatility than before. From this perspective this change is a natural step for us and independent of prevailing market conditions. Our renewed market outlook statement will provide the capital markets with sufficient information to form a justified opinion on Metso's future development.
Thanks to our motivated personnel, competitive services, product offering, flexible operating models, strong balance sheet and financial position, I am confident that we will continue to do well in 2016 and beyond.
Key figures
| EUR million | Q4/ 2015 | Q4/ 2014 | Change % | 2015 | 2014 | Change % | |||
| Orders received | 758 | 801 | -5 | 3,027 | 3,409 | -11 | |||
| Services orders | 440 | 481 | -9 | 1,913 | 2,052 | -7 | |||
| % of orders received | 58 | 60 | 63 | 60 | |||||
| Order backlog at the end of the year | 1,268 | 1,575 | -19 | ||||||
| Net sales | 754 | 1,018 | -26 | 2,977 | 3,658 | -19 | |||
| Services net sales | 481 | 572 | -16 | 1,869 | 2,007 | -7 | |||
| % of net sales | 64 | 56 | 63 | 55 | |||||
| Earnings before interest, tax and amortization (EBITA) and non-recurring items | 91 | 138 | -34 | 347 | 460 | -25 | |||
| % of net sales | 12.0 | 13.5 | 11.7 | 12.6 | |||||
| Operating profit* | 67 | 101 | -33 | 555 | 351 | 58 | |||
| % of net sales | 8.9 | 9.9 | 18.7 | 9.6 | |||||
| Earnings per share, EUR | 0.35 | 0.36 | -3 | 2.95 | 1.25 | 136 | |||
| Free cash flow | 59 | 63 | -6 | 341 | 204 | 67 | |||
| Return on capital employed (ROCE) before taxes, %** | 25.7 | 16.4 | |||||||
| Equity-to-asset ratio at the end of the year, % | 48.3 | 40.5 | |||||||
| Net gearing at the end of the year, % | 10.6 | 45.6 | |||||||
| Personnel at the end of the year | 12,375 | 15,644 | -21 | ||||||
Figures for full-year 2015, Q4/2014 and full-year 2014 include Process Automation Systems.
*Operating profit for full-year 2015 includes the gain on the disposal of the PAS business.
** ROCE for full-year 2015 includes the gain on the disposal of the PAS business.
Key Figures excluding PAS
| EUR million | Q4/ 2015 | Q4/ 2014 | Change % | 2015 | 2014 | Change % |
| Orders received | 758 | 721 | 5 | 2,965 | 3,074 | -4 |
| Services orders | 440 | 446 | -1 | 1,879 | 1,910 | -2 |
| Net sales | 754 | 921 | -18 | 2,923 | 3,363 | -13 |
| Services net sales | 481 | 525 | -9 | 1,840 | 1,869 | -2 |
| Earnings before interest, tax and amortization (EBITA) and non-recurring items | 91 | 120 | -24 | 356 | 426 | -16 |
| % of net sales | 12.0 | 13.0 | 12.2 | 12.7 | ||
| Return on capital employed (ROCE) before taxes, % | 16.1 | - | ||||
| Personnel at the end of the year | 12,375 | 14,072 | -12 |
Metso is a world leading industrial company serving the mining, aggregates, recycling, oil, gas, pulp, paper and process industries. We help our customers improve their operational efficiency, reduce risks and increase profitability by using our unique knowledge, experienced people and innovative solutions to build new, sustainable ways of growing together.
Our products range from mining and aggregates processing equipment and systems to industrial valves and controls. Our customers are supported by a broad scope of services and a global network of over 80 service centers and about 6,400 services professionals. Metso has an uncompromising attitude towards safety.
Metso is listed on the NASDAQ OMX Helsinki, Finland, and had net sales of about EUR 2.9 billion in 2015. Metso employs over 12,000 persons in more than 50 countries. Expect results.
www.metso.com, twitter.com/metsogroup
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
Metso Corporation
Harri Nikunen
CFO
Juha Rouhiainen
VP, Investor Relations
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com
Conference call details
Conference call participants are requested to dial in five minutes before the scheduled time on:
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other countries: +44 (0)20 3427 1911
The confirmation code for joining the conference call is 3735943
A 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.
