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 ------------------------------------------------------------------------------- Orders received 1,735 2,883 -40 3,655 4,730 -23 7,961 ------------------------------------------------------------------------------- Orders received of services 812 866 -6 1,693 1,714 -1 3,100 business ------------------------------------------------------------------------------- % of orders received (*)) 48 31 48 37 40 ------------------------------------------------------------------------------- Order backlog at end of 5,290 5,593 -5 5,310 period ------------------------------------------------------------------------------- Net sales 1,897 1,567 21 3,652 3,011 21 6,646 ------------------------------------------------------------------------------- Net sales of services 795 691 15 1,516 1,331 14 2,871 business ------------------------------------------------------------------------------- % of net sales (*)) 43 46 43 46 45 ------------------------------------------------------------------------------- Earnings before interest, tax and amortization (EBITA) and non-recurring items 177.4 139.8 27 317.8 263.4 21 628.5 ------------------------------------------------------------------------------- % of net sales 9.4 8.9 8.7 8.7 9.5 ------------------------------------------------------------------------------- Operating profit 163.9 121.0 35 292.1 233.9 25 571.8 ------------------------------------------------------------------------------- % of net sales 8.6 7.7 8.0 7.8 8.6 ------------------------------------------------------------------------------- Earnings per share, EUR 0.70 0.45 56 1.26 0.94 34 2.38 ------------------------------------------------------------------------------- Free cash flow -46 49 n/a 70 117 -40 375 ------------------------------------------------------------------------------- Return on capital employed (ROCE) before taxes, 19.6 15.3 18.4 annualized, % ------------------------------------------------------------------------------- Equity to assets ratio at 39.6 37.4 39.8 end of period, % ------------------------------------------------------------------------------- Gearing at end of period, % 22.6 23.9 12.2 ------------------------------------------------------------------------------- (*) )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