Metso Corporation : Metso's Financial Statements Review January 1 - December 31, 2011: Record high orders and strong performance in 2011
Metso Corporation's stock exchange release on February 9, 2012 at 12:00 p.m. local time
Metso will hold two news conferences in Helsinki today, on Thursday, February
9, 2012. Metso will arrange two news conferences in Helsinki on Thursday,
February 9, 2012. A press conference in Finnish for media will be arranged at
1:30 p.m. - 2:15 p.m. Finnish time. A news conference in English with live
webcast and conference call for investors and analysts will be arranged at
03:00 p.m. EET (Helsinki). Both events will take place at Metso's Head Office,
Fabianinkatu 9 A, Helsinki, Finland (details at the end of this release).
This is a summary of Metso's Financial Statements Review 2011 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 in the previous year.
Figures in brackets, unless otherwise stated, refer to the comparison period,
i.e. the same period in the previous year.
Highlights of 2011
* New orders and net sales were at a record high level.
* Orders received increased to EUR 7,961 million, i.e. 34 percent more than in
the previous year (EUR 5,944 million). Orders received by the services
business increased 18 percent and were EUR 3,100 million, i.e. 40 percent of
all orders received (EUR 2,637 million and 45%).
* Net sales increased 20 percent from the previous year and were EUR 6,646
million (EUR 5,552 million). Services business net sales increased 17
percent and totaled EUR 2,871 million, i.e. 45 percent of total net sales
(EUR 2,453 million and 45%).
* Earnings before interest, tax and amortization (EBITA), before non-recurring
items, increased 28 percent and were EUR 628.5 million, i.e. 9.5 percent of
net sales (EUR 491.0 million and 8.8%).
* Earnings per share were EUR 2.38 (EUR 1.71).
* Free cash flow was EUR 375 million (EUR 435 million).
* The Board proposes a dividend of EUR 1.70 per share, i.e. 71 percent of
earnings per share (EUR 1.55 and 91% of earnings per share). The Board will
consider later in 2012, if the financial situation of the company favors it,
to make a proposal to an Extra General Meeting for an dividend in addition
to the dividend to be decided by the AGM in March.
Highlights of the last quarter of 2011
* Strong closing quarter with high net sales and steady profitability.
* New orders totaled EUR 1,313 million in October-December, i.e. 12 percent
less than in the comparison period (EUR 1,498 million) mainly due to
decrease in Pulp, Paper and Power. Orders received by the services business
increased 5 percent and were EUR 669 million, i.e. 54 percent of all orders
received (EUR 637 million and 44%).
* Net sales increased 23 percent on the comparison period and were EUR 2,074
million (EUR 1,687 million). Our services business net sales increased 16
percent and totaled EUR 829 million, i.e. 41 percent of total net sales (EUR
715 million and 43%).
* Earnings before interest, tax and amortization (EBITA), before non-recurring
items, increased 35 percent and were EUR 202.1 million, i.e. 9.7 percent of
net sales (EUR 149.8 million and 8.9%).
* Earnings per share were EUR 0.81 (EUR 0.50).
* Free cash flow was EUR 45 million (EUR 114 million).
Metso's President and CEO Matti Kähkönen comments on last year:
Last year was successful for us in many ways. We made good progress in a number
of strategically important areas, such as growing our services business and our
business in emerging markets as well as increasing our delivery capacity. I am
particularly pleased with our all-time high order intake, which highlights our
deep relationships with our customers and our ability to help them to perform
better.
Looking at our customer industries it seems that mining continues to be very
active and demand for both equipment and services is expected to stay good. We
may not, however, see those exceptionally large orders in 2012 as we saw in
2011. Investments in the oil and gas industry continue to support our Flow
Control business and the demand in power generation continues to be good.
Construction market has remained unchanged. Demand in the pulp, paper and board
industry slowed down towards the end of 2011 and has stabilized since then. We
do not anticipate significant changes for that demand during 2012, although
better availability of financing could help that market recover.
Our order backlog for 2012 is strong at around EUR 4 billion, which gives us
confidence that we will report higher net sales and profit (EBITA before non-
recurring items) for 2012 compared to 2011. Overall, Metso is fit for the future
and we will continue to implement our strategy in order to add value for our
customers and other stakeholders.
Metso's key figures
Q4/ Q4/
EUR million Change % Change %
2011 2010 2011 2010
Net sales 2,074 1,687 23 6,646 5,552 20
Net sales of services business 829 715 16 2,871 2,453 17
% of net sales (*)) 41 43 45 45
Earnings before interest, tax and
amortization (EBITA) and non-recurring
items 202.1 149.8 35 628.5 491.0 28
% of net sales 9.7 8.9 9.5 8.8
Operating profit 188.5 132.2 43 571.8 445.2 28
% of net sales 9.1 7.8 8.6 8.0
Earnings per share, EUR 0.81 0.50 62 2.38 1.71 39
Orders received 1,313 1,498 -12 7,961 5,944 34
Orders received of services business 669 637 5 3,100 2,637 18
% of orders received (*)) 54 44 40 45
Order backlog at end of period 5,310 4,023 32
Free cash flow 45 114 -61 375 435 -14
Return on capital employed (ROCE) 18.4 13.5
before taxes, %
Equity to assets ratio at end of 39.8 38.1
period, %
Gearing at end of period, % 12.2 15.0
(*) )Calculated out of external net sales / orders received excluding Valmet
Automotive, which does not have services business.
As of December 1, 2011, Metso's operating structure was organized into the
following three reporting segments: Mining and Construction; Automation; and
Pulp, Paper and Power. Recycling and Valmet Automotive are reported as separate
entities. The segment information has been disclosed according to the new
operating structure.
Short-term outlook
Market development
In recent months, demand has been healthy in most of our customer industries
with some variation by customer industry and geographic area. We estimate that
in the emerging markets the operating environment will continue to be good. We
anticipate that most of our customer industries will continue to utilize their
capacity at a good or satisfactory level supporting our services business. The
financial uncertainty in the euro zone, the budget deficit in the US, the
availability of financing and fluctuations in the exchange rates may, however,
influence market activity in the early part of 2012.
Metal prices still remain relatively high. The activity level for quotations for
equipment and projects from mining companies has been good. We expect the
underlying demand in the mining market to remain good in the early part of
2012, although we do not anticipate the same amount of large capital orders we
received last year. However, a potential further tightening in the availability
of financing and a continued decline in metal prices may have a negative impact
on the demand for new equipment. Due to the expected high utilization rates of
mines and our large installed equipment base, we expect demand for our mining
services to remain good.
In the Asia-Pacific region and Brazil, economic growth continues and
infrastructure projects are maintaining demand for construction equipment at a
good level. We anticipate that the demand for equipment used in aggregates
processing by the construction industry in Europe and in North America will stay
at the current relatively low level going forward. We estimate that the demand
for our services for the construction industry will remain satisfactory.
We estimate that the demand for our automation products will continue to be good
in early 2012. We anticipate the activity from the pulp and paper industry to
somewhat slow down. We expect the demand for our automation solution services to
continue to be excellent.
We expect the market for pulp mills to remain satisfactory after recent large
project orders. The demand for rebuilds and services is expected to remain good,
even though lower pulp prices and lower capacity utilization rates may stabilize
the demand.
Demand for paper and board lines is expected to be weak and for tissue lines
satisfactory in the early part of 2012. Capacity utilization rates in the paper
and board industry may fall somewhat, yet keep the demand for our services at a
good level.
Demand for power plants that use renewable energy sources is expected to
continue to be good in the early part of 2012. There is continuous need to
replace old energy sources and build new capacity. Demand for the power plant
services business is expected to be good.
Financial development
In line with our earlier statement and assuming that the current demand in our
customer industries does not clearly weaken due to the European economic
situation or some other similar factor, 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, order backlog for 2012 and business scope as well as on foreign
exchange rates similar to those of December 2011.
Helsinki, February 9, 2012
Metso Corporation's Board of Directors
Metso is a global supplier of sustainable technology and services for mining,
construction, power generation, automation, recycling and the pulp and paper
industries. We have about 29,000 employees in more than 50 countries.
www.metso.com
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 conferences
Metso will arrange two news conferences in Helsinki on Thursday, February
9, 2012:
- A press conference in Finnish for media will be arranged at 1:30 p.m. - 2:15
p.m. Finnish time
- A news conference in English with live webcast and conference call for
investors and analysts will be arranged at 03:00 p.m. EET (Helsinki) / 01:00
p.m. GMT (London) / 02:00 p.m. CET (Paris) / 08:00 a.m. EST (New York)
Both events will take place at Metso's Head Office, Fabianinkatu 9 A, Helsinki,
Finland.
The news conference in English can also be followed through a live webcast at
www.metso.com/investors or through a conference call. Due to the live webcast,
we are kindly asking those attending the news conference to be present 5 minutes
prior to its start.
Conference call details
Conference call participants are requested to dial in a few minutes prior to the
start of the conference on:
· US: +1 334 323 6201
· other countries: +44 20 7162 0077
· access code: 910 748
A replay will be available for 14 days until February 23, 2012 on:
· US: +1 954 334 0342
· other countries: +44 20 7031 4064
· access code: 910 748
An audio file (mp3) will be available at www.metso.com/investors after the
conference call and a transcript of the event will be available on Monday,
February 13, 2012 at the latest.
Presentation material will be available after the publishing of the Financial
Statements at www.metso.com/Investors.
You are most welcome to participate in these events.
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com
Metso is a global supplier of sustainable technology and services for mining,
construction, power generation, automation, recycling and the pulp and paper
industries. We have about 29,000 employees in more than 50 countries.
www.metso.com
Metso Corporation
Harri Nikunen
CFO
Juha Rouhiainen
VP, Investor Relations
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com