Metso Corporation´s Interim Review, January 1- June 30, 2010
Metso Corporation's stock exchange release on July 29, 2010 at 12:00 p.m.
Metso's positive development continued
Highlights of the second quarter of 2010
* New orders worth EUR 1,671 million were received in April-June, i.e.
64 percent more than in the comparison period (EUR 1,020 million in
Q2/2009).
* At the end of June, the order backlog was up by 22 percent on the end
of December 2009, and totaled EUR 4,176 million (EUR 3,415 million at
December 31, 2009).
* Net sales increased by 10 percent on the comparison period, and were
EUR 1,370 million (EUR 1,247 million in Q2/2009).
* Earnings before interest, tax and amortization (EBITA) were EUR 154.2
million, i.e. 11.3 percent of net sales (EUR 74.7 million and 6.0% in
Q2/2009).
* Operating profit (EBIT) was EUR 140.0 million, i.e. 10.2 percent of
net sales (EUR 65.9 million and 5.3% in Q2/2009).
* From Q2/2010 onwards, Metso will replace EBITA with EBITA before
non-recurring items in order to improve comparability and to give a better
view of the underlying operational performance. EBITA before non-recurring
items in the second quarter was EUR 125.0 million, i.e. 9.1 percent of net
sales (EUR 84.9 million and 6.8% in Q2/2009).
* EBITA and EBIT include as a whole EUR 29.2 million of positive
non-recurring items (EUR 10.2 million negative non-recurring items in
Q2/2009).
* Earnings per share were EUR 0.56 (EUR 0.26 in Q2/2009).
* Free cash flow was EUR 164 million (EUR 80 million in Q2/2009).
* Return on capital employed (ROCE) before taxes was 12.6 percent (9.3%
in Q2/2009).
"As we have previously estimated Metso's positive development continued in the
second quarter. The overall positive tone in the global economy and the recovery
of demand remains in most of our customer industries, especially in the emerging
economies", says Metso's President and CEO Jorma Eloranta.
"I am happy that all our key figures improved, not only compared to the second
quarter of 2009 but also from the first quarter of this year. The improvement
was thanks to steadily recovering demand, our improved competitiveness and
continuously strengthening global presence. I am particularly pleased with the
significant profitability improvement in our Paper and Fiber Technology segment.
We estimate that the overall positive mood in the global markets will continue
despite some restlessness in the European financial markets. We are closely
monitoring the situation and have so far not seen material impact on our global
trading environment as evidenced by our strong order intake during the second
quarter.
We have revised our net sales guidance based on positive developments, such as
our increased order backlog and the expectation that the recovery of the global
economy will continue. We now estimate that our net sales in 2010 will grow
about 10 percent from the EUR 5 billion level of 2009. Our profitability
guidance is intact: we expect our profitability to be satisfactory."
Metso's key figures
+--------------------------------+-----+-----+------+------+------+------+-----+
|EUR million |Q2/10|Q2/09|Change|Q1-Q2/|Q1-Q2/|Change| 2009|
| | | | %| 10| 09| %| |
+--------------------------------+-----+-----+------+------+------+------+-----+
|Net sales |1,370|1,247| 10| 2,540| 2,467| 3|5,016|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Net sales of services business | 612| 535| 14| 1,123| 1,054| 7|2,102|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 45| 43| | 45| 43| | 42|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Earnings before interest, tax | | | | | | | |
|and | | | | | | | |
|amortization (EBITA) and non- |125.0| 84.9| 47| 212.6| 176.7| 20|399.0|
|recurring items (*)) | | | | | | | |
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 9.1| 6.8| | 8.4| 7.2| | 8.0|
+--------------------------------+-----+-----+------+------+------+------+-----+
| | | | | | | | |
|EBITA |154.2| 74.7| 106| 238.0| 143.5| 66|334.3|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 11.3| 6.0| | 9.4| 5.8| | 6.7|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Operating profit |140.0| 65.9| 112| 209.5| 124.5| 68|293.6|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 10.2| 5.3| | 8.2| 5.0| | 5.9|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Earnings per share, EUR | 0.56| 0.26| 115| 0.76| 0.44| 73| 1.06|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Orders received |1,671|1,020| 64| 3,037| 1,962| 55|4,358|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Order backlog at end of period | | | | 4,176| 3,512| 19|3,415|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Free cash flow | 164| 80| 105| 199| 200| -1| 717|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Return on capital employed | | | | | | | |
|(ROCE) | | | | 12.6| 9.3| | 10.0|
|before taxes, annualized, % | | | | | | | |
+--------------------------------+-----+-----+------+------+------+------+-----+
|Equity to assets ratio at end of| | | | | | | |
|period,% | | | | 35.6| 31.7| | 35.7|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Gearing at end of period, % | | | | 28.5| 70.2| | 32.5|
+--------------------------------+-----+-----+------+------+------+------+-----+
(*)) From the second quarter 2010 onwards, Metso will in its financial reporting
replace earnings before interest, tax and amortization (EBITA) with EBITA before
non-recurring items as a financial indicator in order to improve comparability
and to give a better view of the underlying operational performance.
As we define it at Metso, non-recurring items typically consist of material
one-time items related to the business operations. These items can include, but
are not limited to, capital gains and losses related to sale of business assets,
one-time restructuring expenses and other items Metso management has deemed as
material non-recurring items. Historical comparison figures can be found in the
tables presented in this Interim Review and quarterly comparison data from
Q1/2009 onwards at www.metso.com/investors.
Metso's second quarter 2010 review
Operating environment and demand for products in April-June
The overall positive tone in the global economy and the recovery of demand
continued in most of our customer industries. The growing budget deficits of
several European countries created uncertainties in the financial markets
overshadowing the upswing in the markets. However, we did not see any material
impact from this on overall demand for our products and services in the second
quarter.
Thanks to continuing growth of the emerging economies, the confidence of mining
companies in the long-term positive demand and price development for minerals
has strengthened. As a consequence, mining companies have clearly increased
their capacity expansion plans and new orders for mining equipment have started
growing strongly. Due to the increased production volumes of minerals demand for
our mining equipment services also improved further.
In the construction industry, demand for equipment used in aggregates production
has recovered somewhat from the very low levels of last year but remained weak
in Europe and North America. Continued economic growth in the Asia-Pacific
region and the Brazilian markets led to major infrastructure projects and
maintained good demand for construction equipment there. Demand for our services
business for the construction industry improved and was good.
Demand for power plants utilizing renewable fuels was at a good level in Europe
and North America. Several countries have published targets to increase the use
of renewable energy supporting demand for our power plant solutions fuelled by
biomass and waste. The uncertainty of the financial markets during the first
half of the year has, however, delayed final decision making in several new
projects. Demand for our power plant services was satisfactory.
Demand for our automation solutions continued to strengthen as investments by
the oil, gas and petrochemical industries increased as a result of the rising
trend in the price of and demand for energy. Also demand by the pulp and paper
customer industry for process and flow control solutions developed favorably
during the second quarter. Demand for our services business for automation
solutions improved and was good.
Demand for metals recycling equipment was satisfactory thanks to the increased
production volumes in the global steel industry. Demand for solid-waste
recycling equipment was also satisfactory. Demand for our services business for
recycling equipment improved as the utilization rates of our customers' plants
and equipment are increasing.
The trading environment overall was satisfactory for new fiber, paper, board and
tissue lines and rebuilds. Customers' capacity utilization rates continued to
increase which had a clearly positive impact on our services business.
Orders received in April-June
We received new orders worth EUR 1,671 million in April-June. Orders received
increased by 64 percent on the comparison period. The share of emerging markets
in our orders received was 60 percent. Orders received increased on the weak
comparison period in all reporting segments and in all geographical areas.
Orders received by Mining and Construction Technology in April-June amounted to
EUR 604 million, which was 52 percent more than in the comparison period. Orders
from mining customers were up 69 percent and from construction customers up 22
percent. Services business orders were up 17 percent and the growth is coming
primarily from mining customers. Among the most significant orders in the
Equipment and Systems business was a delivery of mining equipment for TISCO's
iron ore processing plant in Shanxi Province, China.
Orders received by Energy and Environmental Technology increased 38 percent on
the comparison period and totaled EUR 384 million. Orders received increased 23
percent in the Power business and by one third in the Automation business. In
the Recycling business, orders received grew by almost 150 percent as the
comparison period was exceptionally weak. Several automation orders for managing
power plants, paper, board and tissue lines as well as oil and gas projects were
received. We also received several sizable metal recycling shredder orders. In
the Power business, we received some sizable services and project orders.
Orders received by Paper and Fiber Technology doubled on the comparison period
and totaled EUR 682 million in April-June. The improvement came especially from
the Fiber business which had an exceptionally weak comparison period and which,
in addition to several smaller orders also received a large fiber line order for
Ilim Group's new kraft pulp mill in Bratsk, Russia. Among other significant
orders were two tissue lines for Shanghai Orient Champion Paper Co., Ltd. in
Shanghai, and a fine paper line for APRIL Fine Paper (Guangdong) Co. Ltd, both
to China.
Financial performance in April-June
Our net sales in April-June totaled EUR 1,370 million, which is 10 percent more
than a year earlier (EUR 1,247 million in Q2/2009). The services business net
sales increased 14 percent on the comparison period, and accounted for 45
percent of total net sales (43% in Q2/2009).
In the second quarter, our earnings before interest, tax and amortization and
non-recurring items (EBITA before non-recurring items) were EUR 125.0 million,
i.e. 9.1 percent of net sales (EUR 84.9 million and 6.8% in Q2/2009). Improved
capacity utilization rates contributed positively to gross profit margins. On
the other hand, earnings were somewhat negatively affected as the selling,
general and administrative expenses have increased reflecting the increased
demand and strengthening of our sales, marketing and other resources.
Earnings before interest, tax and amortization (EBITA) improved on the
comparison period and were EUR 154.2 million, i.e. 11.3 percent of net sales
(EUR 74.7 million and 6.0% in Q2/2009).
Metso's operating profit (EBIT) improved clearly and was EUR 140.0 million, or
10.2 percent of net sales (EUR 65.9 million and 5.3% in Q2/2009).
Our EBITA and EBIT for April-June include the following non-recurring items (see
table), which had a total positive impact of EUR 29.2 million on our
second-quarter financial performance.
Non-recurring items in April-June
+--------------------------------+------------+-------------+----------+-----+
|Q2/2010 | Mining and| Energy and| Paper and|Metso|
| |Construction|Environmental| Fiber|Group|
|EUR million | Technology| Technology|Technology| |
+--------------------------------+------------+-------------+----------+-----+
|EBITA | 97.2| 27.7| 34.4|154.2|
+--------------------------------+------------+-------------+----------+-----+
|Capacity adjustment expenses | -| 1.6| 1.6| 3.2|
+--------------------------------+------------+-------------+----------+-----+
|Gain on sale of Talvivaara | -1.1| -| -| -1.1|
|shares | | | | |
+--------------------------------+------------+-------------+----------+-----+
|Gain on Intellectual Property | | | | |
|settlements in the United States| -32.1| -| -|-32.1|
|and in Australia | | | | |
+--------------------------------+------------+-------------+----------+-----+
|Gain on business disposal | -2.5| -| -| -2.5|
+--------------------------------+------------+-------------+----------+-----+
|Provision for prior years' ICMS | 3.3| -| -| 3.3|
|(VAT) tax credits in Brazil | | | | |
+--------------------------------+------------+-------------+----------+-----+
|EBITA before non-recurring items| 64.8| 29.3| 36.0|125.0|
+--------------------------------+------------+-------------+----------+-----+
|% of net sales | 12.0| 8.8| 7.3| 9.1|
+--------------------------------+------------+-------------+----------+-----+
Amortization of intangible assets during the reporting period was EUR 14.2
million of which EUR 8.3 million was related to fair value allocations of
acquired businesses.
+------------------------------+------------+-------------+----------+-----+
|Q2/2009 | Mining and| Energy and| Paper and|Metso|
| |Construction|Environmental| Fiber|Group|
|EUR million | Technology| Technology|Technology| |
+------------------------------+------------+-------------+----------+-----+
|EBITA | 46.9| 34.1| 1.4| 74.7|
+------------------------------+------------+-------------+----------+-----+
|Capacity adjustment expenses | 1.6| 1.4| 1.3| 4.3|
+------------------------------+------------+-------------+----------+-----+
|Gain on sale of Talvivaara | -6.2| -| -| -6.2|
|shares | | | | |
+------------------------------+------------+-------------+----------+-----+
|Hedging reversal due to a | -| -| 9.0| 9.0|
|cancelled customer order | | | | |
+------------------------------+------------+-------------+----------+-----+
|Credit loss reserve related to| -| -| 3.1| 3.1|
|two paper machine customers | | | | |
+------------------------------+------------+-------------+----------+-----+
|EBITA before non-recurring | 42.3| 35.5| 14.8| 84.9|
|items | | | | |
+------------------------------+------------+-------------+----------+-----+
|% of net sales | 8.0| 9.9| 4.1| 6.8|
+------------------------------+------------+-------------+----------+-----+
Amortization of intangible assets during the comparison period was EUR 8.8
million of which EUR 4.6 million was related to fair value allocations of
acquired businesses.
Metso's January-June 2010 Interim Review
Orders received and order backlog
Orders received in January-June totaled EUR 3,037 million, an increase of 55
percent on the comparison period. Excluding the effect from exchange rate
translation, the growth would have been 46 percent. The strengthening in demand
was greatest in the Paper and Fiber Technology segment, and also other reporting
segments recorded clear growth in new orders. Our customers' improved capacity
utilization rates led to 34 percent growth in our services orders compared to
the same period a year earlier.
The three countries with highest value of orders received were China, the United
States and Brazil. The share of emerging markets in our orders received was 52
percent (49% in Q1-Q2/2009).
At the end of June, our order backlog was EUR 4,176 million, which is 22 percent
stronger than at the end of 2009 (EUR 3,415 million). About EUR 2.4 billion of
the deliveries in our order backlog are expected to be completed in 2010, and
about EUR 900 million of these are services business orders. Uncertainties in
the order backlog have continued to diminish and at the end of June our order
backlog included some EUR 395 million (EUR 430 million in Q1/2010) worth of
orders for projects with uncertain delivery schedules and which will, according
to present estimates, be delivered after 2010. The pulp mill project for Fibria,
Brazil, is included in these projects.
Orders received by reporting segments
+---------------------------+-------------------+-------------------+
| | Q1-Q2/2010 | Q1-Q2/2009 |
+---------------------------+-------+-----------+-------+-----------+
| | EUR|% of orders| EUR|% of orders|
| |million| received|million| received|
+---------------------------+-------+-----------+-------+-----------+
|Mining and Construction | | | | |
|Technology | 1,163| 38| 783| 40|
+---------------------------+-------+-----------+-------+-----------+
|Energy and Environmental | | | | |
|Technology | 740| 24| 543| 27|
+---------------------------+-------+-----------+-------+-----------+
|Paper and Fiber Technology | 1,143| 37| 614| 31|
+---------------------------+-------+-----------+-------+-----------+
|Valmet Automotive | 28| 1| 35| 2|
+---------------------------+-------+-----------+-------+-----------+
|Intra-Metso orders received| -37| | -13| |
+---------------------------+-------+-----------+-------+-----------+
|Total | 3,037| 100| 1,962| 100|
+---------------------------+-------+-----------+-------+-----------+
Orders received by market area
+-------------------------+-------------------+-------------------+
| | Q1-Q2/2010 | Q1-Q2/2009 |
+-------------------------+-------+-----------+-------+-----------+
| | EUR|% of orders| EUR|% of orders|
| |million| received|million| received|
+-------------------------+-------+-----------+-------+-----------+
|Europe | 1,163| 38| 746| 39|
+-------------------------+-------+-----------+-------+-----------+
|North America | 436| 14| 320| 16|
+-------------------------+-------+-----------+-------+-----------+
|South and Central America| 392| 13| 237| 12|
+-------------------------+-------+-----------+-------+-----------+
|Asia-Pacific | 901| 30| 535| 27|
+-------------------------+-------+-----------+-------+-----------+
|Africa and Middle East | 145| 5| 124| 6|
+-------------------------+-------+-----------+-------+-----------+
|Total | 3,037| 100| 1,962| 100|
+-------------------------+-------+-----------+-------+-----------+
Net sales
Our net sales for the first half of the year increased by 3 percent on the
comparison period and were EUR 2,540 million (EUR 2,467 million in Q1-Q2/2009).
Excluding the effect from exchange rate translation, the decline would have been
3 percent. The growth came from Paper and Fiber Technology, which recorded
growth of 33 percent on the comparison period. Net sales for Mining and
Construction Technology were at around the same level as in the comparison
period and net sales for Energy and Environmental Technology declined 12
percent. Net sales for our services business increased 7 percent (when excluding
the impact of the acquired Fabrics business i.e. former Tamfelt, on par with the
comparison period) and its share of the total net sales increased to 45 percent
(43% in Q1-Q2/2009).
Measured by net sales, the largest countries were China, the United States and
Brazil, which together accounted for about 34 percent of our total net sales.
The share of emerging markets in our net sales was 48 percent (42% in
Q1-Q2/2009).
Net sales by reporting segments
+--------------------------+-----------------+-----------------+
| | Q1-Q2/2010 | Q1-Q2/2009 |
+--------------------------+-------+---------+-------+---------+
| | EUR| % of| EUR| % of|
| |million|net sales|million|net sales|
+--------------------------+-------+---------+-------+---------+
|Mining and Construction | | | | |
|Technology | 1,013| 40| 1,059| 43|
+--------------------------+-------+---------+-------+---------+
|Energy and Environmental | | | | |
|Technology | 666| 26| 754| 30|
+--------------------------+-------+---------+-------+---------+
|Paper and Fiber Technology| 858| 33| 646| 26|
+--------------------------+-------+---------+-------+---------+
|Valmet Automotive | 28| 1| 35| 1|
+--------------------------+-------+---------+-------+---------+
|Intra-Metso net sales | -25| | -27| |
+--------------------------+-------+---------+-------+---------+
|Total | 2,540| 100| 2,467| 100|
+--------------------------+-------+---------+-------+---------+
Net sales by market area
+-------------------------+-----------------+-----------------+
| | Q1-Q2/2010 | Q1-Q2/2009 |
+-------------------------+-------+---------+-------+---------+
| | EUR| % of| EUR| % of|
| |million|net sales|million|net sales|
+-------------------------+-------+---------+-------+---------+
|Europe | 953| 37| 1,064| 43|
+-------------------------+-------+---------+-------+---------+
|North America | 432| 17| 404| 16|
+-------------------------+-------+---------+-------+---------+
|South and Central America| 333| 13| 315| 13|
+-------------------------+-------+---------+-------+---------+
|Asia-Pacific | 681| 27| 481| 20|
+-------------------------+-------+---------+-------+---------+
|Africa and Middle East | 141| 6| 203| 8|
+-------------------------+-------+---------+-------+---------+
|Total | 2,540| 100| 2,467| 100|
+-------------------------+-------+---------+-------+---------+
Financial result
In January-June, our EBITA before non-recurring items was EUR 212.6 million,
i.e. 8.4 percent of net sales (EUR 176.7 million and 7.2% in Q1-Q2/2009).
Improved capacity utilization rates contributed positively to gross profit
margins. On the other hand, earnings were somewhat negatively affected as the
selling, general and administrative expenses have increased reflecting the
increased demand and strengthening of our sales, marketing and other resources.
In the first half of the year, our EBITA improved clearly on the comparison
period and was EUR 238.0 million, i.e. 9.4 percent of net sales (EUR 143.5
million and 5.8% in Q1-Q2/2009).
Our operating profit for January-June was EUR 209.5 million, or 8.2 percent of
net sales (EUR 124.5 million and 5.0% in Q1-Q2/2009).
EBITA and EBIT for January-June include EUR 25.4 million of non-recurring items,
which have a positive impact, as specified in the following table.
Non-recurring items
+----------------------------------+------------+-------------+----------+-----+
|Q1-Q2/2010 | Mining and| Energy and| Paper and|Metso|
| |Construction|Environmental| Fiber|Group|
|EUR million | Technology| Technology|Technology| |
+----------------------------------+------------+-------------+----------+-----+
|EBITA | 136.7| 56.1| 52.9|238.0|
+----------------------------------+------------+-------------+----------+-----+
|Capacity adjustment expenses | -| 5.0| 2.9| 7.9|
+----------------------------------+------------+-------------+----------+-----+
|Gain on sale of Talvivaara | -1.1| -| -| -1.1|
|shares | | | | |
+----------------------------------+------------+-------------+----------+-----+
|Gain on Intellectual Property | | | | |
|settlements in the United States | -32.1| -| -|-32.1|
|and in Australia | | | | |
+----------------------------------+------------+-------------+----------+-----+
|Gain on business disposal | -2.5| -| -| -2.5|
+----------------------------------+------------+-------------+----------+-----+
|Provision for prior years' ICMS | 3.3| -| -| 3.3|
|(VAT) tax credits in Brazil | | | | |
+----------------------------------+------------+-------------+----------+-----+
|Credit loss reserve related to | | | -0,9| -0,9|
|two paper machine customers | | | | |
+----------------------------------+------------+-------------+----------+-----+
|EBITA before non-recurring | 104.3| 61.1| 54.9|212.6|
|items | | | | |
+----------------------------------+------------+-------------+----------+-----+
|% of net sales | 10.3| 9.2| 6.4| 8.4|
+----------------------------------+------------+-------------+----------+-----+
Amortization of intangible assets during the reporting period was EUR 28.5
million of which EUR 16.6 million was related to fair value allocations of
acquired businesses.
+------------------------------+------------+-------------+----------+-----+
|Q1-Q2/2009 | Mining and| Energy and| Paper and|Metso|
| |Construction|Environmental| Fiber|Group|
|EUR million | Technology| Technology|Technology| |
+------------------------------+------------+-------------+----------+-----+
|EBITA | 102.5| 66.4| -12.6|143.5|
+------------------------------+------------+-------------+----------+-----+
|Capacity adjustment expenses | 5.4| 2.8| 18.1| 26.3|
+------------------------------+------------+-------------+----------+-----+
|Gain on sale of Talvivaara | -6.2| -| -| -6.2|
|shares | | | | |
+------------------------------+------------+-------------+----------+-----+
|Hedging reversal due to a | -| -| 9.0| 9.0|
|cancelled customer order | | | | |
+------------------------------+------------+-------------+----------+-----+
|Credit loss reserve related to| -| -| 4.1| 4.1|
|two paper machine customers | | | | |
+------------------------------+------------+-------------+----------+-----+
|EBITA before non-recurring | 101.7| 69.2| 18.6|176.7|
|items | | | | |
+------------------------------+------------+-------------+----------+-----+
|% of net sales | 9.6| 9.2| 2.9| 7.2|
+------------------------------+------------+-------------+----------+-----+
Amortization of intangible assets during the comparison period was EUR 19.0
million of which EUR 9.3 million was related to fair value allocations of
acquired businesses.
+------------------------------+------------+-------------+----------+-----+
|2009 | Mining and| Energy and| Paper and|Metso|
| |Construction|Environmental| Fiber|Group|
|EUR million | Technology| Technology|Technology| |
+------------------------------+------------+-------------+----------+-----+
|EBITA | 202.8| 136.3| 16.5|334.3|
+------------------------------+------------+-------------+----------+-----+
|Capacity adjustment expenses | 21.9| 11.1| 41.7| 74.7|
+------------------------------+------------+-------------+----------+-----+
|Gain on sale of Talvivaara | -23.1| -| -|-23.1|
|shares | | | | |
+------------------------------+------------+-------------+----------+-----+
|Hedging reversal due to a | -| -| 9.0| 9.0|
|cancelled customer order | | | | |
+------------------------------+------------+-------------+----------+-----+
|Credit loss reserve related to| -| -| 4.1| 4.1|
|two paper machine customers | | | | |
+------------------------------+------------+-------------+----------+-----+
|EBITA before non-recurring | 201.6| 147.4| 71.3|399.0|
|items | | | | |
+------------------------------+------------+-------------+----------+-----+
|% of net sales | 9.7| 9.7| 5.1| 8.0|
+------------------------------+------------+-------------+----------+-----+
Amortization of intangible assets during the year 2009 was EUR 40.7 million of
which EUR 18.5 million was related to fair value allocations of acquired
businesses.
Group Head Office's operating profit in the first half of 2010 includes foreign
exchange gains of EUR 12 million from foreign exchange hedge contracts done by
reporting segments with Group Treasury (EUR 2 million gain in Q1-Q2/2009).
Corresponding foreign exchange losses are included in the operating results of
reporting segments.
Our net financing expenses in January-June were EUR 45 million (EUR 36 million
in Q1-Q2/2009). Interest expenses were EUR 35 million (EUR 36 million in
Q1-Q2/2009). Net financing expenses include EUR 12 million in foreign exchange
losses related to the above-mentioned Group Head Office's foreign exchange gain.
Our profit before taxes was EUR 165 million (EUR 89 million) and we estimate our
tax rate for 2010 to be 30 percent (32% in 2009).
The profit attributable to shareholders was EUR 114 million in the first half of
the year (EUR 63 million in Q1-Q2/2009), corresponding to earnings per share
(EPS) of EUR 0.76 (EUR 0.44/share).
The return on capital employed (ROCE), before taxes, in January-June was 12.6
percent (9.3%) and return on equity (ROE) was 13.6 percent (8.7%).
Cash flow and financing
Net cash generated by operating activities for January-June was EUR 230 million
(EUR 228 million in Q1-Q2/2009).
Net working capital decreased in January-June by EUR 7 million.
Free cash flow in the first half of the year was EUR 199 million (EUR 200
million in Q1-Q2/2009).
Net interest-bearing liabilities totaled EUR 538 million at the end of June (EUR
583 million at December 31, 2009).
Our total cash assets at the end of June were EUR 906 million, EUR 338 million
of which has been invested in financial instruments with an initial maturity
exceeding three months. The remaining EUR 568 million has been accounted for as
cash and cash equivalents. The syndicated EUR 500 million revolving loan
facility is available until late 2011, and it is currently undrawn. Metso's
liquidity position is good.
At the end of June, our gearing was 28.5 percent (70.2%) and our
equity-to-assets ratio was 35.6 percent (31.7%). In April, following the Annual
General Meeting, we paid EUR 105 million in dividends for 2009.
Capital expenditure and R&D
Our gross capital expenditure in January-June, excluding business acquisitions,
was EUR 58 million (EUR 55 million in Q1-Q2/2009). The share of maintenance
investments was 60 percent, i.e. EUR 35 million. We estimate new capital
expenditure in 2010 to somewhat exceed the 2009 level (EUR 117 million in 2009).
The first phase of Metso's largest single investment so far in India, Metso
Park, was completed in March and the investment's second phase has been
initiated. A technology center specializing in automation solutions was opened
in May in Shanghai, China. In York, Pennsylvania, USA, Mining and Construction
Technology took up new purpose-built office premises in May.
In June, construction work was started in Vantaa for a new factory for the
production of valves for demanding applications. Metso's industrial valve
production in Finland and the company's Automation and Power employees in the
Helsinki area, around 800, will be moving to the new factory and the renovated
office building in early 2011. This investment will be accounted as operating
lease. In Araucaria, Parana state, Brazil, construction work on a new facility
for our pulping and power operations has been started. The facility is estimated
to be completed in late 2011 and will accommodate approximately 180 pulping and
power employees who currently work in leased facilities in Curitiba, just 10 km
from the new site.
In Jyväskylä, Finland, we completed an upgrade of a pilot machine at the Paper
Technology Center. In Zibo, we are establishing our third service center in
China for the pulp and paper industry. Investment projects in global enterprise
resource planning systems are underway in Mining and Construction Technology and
in the Automation business.
Metso's research and development expenses in January-June totaled EUR 52
million, representing 2.0 percent of Metso's net sales (EUR 61 million and 2.5%
in Q1-Q2/2009).
Acquisitions, divestments and joint ventures
In April, Metso acquired the paper machine web inspection and web break system
business from Viconsys. The acquired business and personnel of around 30 joined
Metso's Energy and Environmental Technology segment.
In April, we sold the Flexowell conveyor belt operations in Germany to ContiTech
Transportbandsysteme GmbH. Flexowell was part of Metso's Mining and Construction
Technology segment.
In November 2009, we concluded a combination agreement with Tamfelt, one of the
world's leading suppliers of technical textiles. The exchange offer was carried
out in November-December of 2009 and successfully completed on December
23, 2009. The remaining 2 percent of Tamfelt's shares were redeemed in
accordance with the Finnish Companies Act, and in May Metso gained title to all
the shares in Tamfelt. The redemption price determined in the Arbitral Tribunal
was EUR 7.17 per share. Metso shall pay the redemption price (about EUR 4.3
million) and the interest accrued thereon to the minority shareholders of
Tamfelt who were party to the redemption proceedings within one month after the
arbitral award has become legally binding.
Since the acquisition, Tamfelt has been a functional and administrative part of
our Paper and Fiber Technology segment and has been established as the segment's
Fabrics business line.
Personnel
At the end of June, we had 27,665 employees, which was 499 more than at the end
of 2009 (27,166 employees at December 31, 2009) and 1,490 employees less than
year ago when eliminating the impact of the acquired and divested businesses.
Excluding the effects of the about 650 seasonal workers at the end of June, the
comparable decline in the number of employees since the start of the year was
151 employees. The number of employees decreased somewhat in Mining and
Construction Technology and stayed about the same in Energy and Environmental
Technology and in Paper and Fiber Technology. During January-June, we had an
average of 27,260 employees.
Personnel by area
+-------------------------+------+----------+--------+----------+------+-------+
| | June|% of total| June|% of total|Change|Dec 31,|
| | 30,| personnel|30, 2009| personnel| %| 2009|
| | 2010| | | | | |
+-------------------------+------+----------+--------+----------+------+-------+
|Finland | 9,286| 34| 8,813| 32| 5| 8,746|
+-------------------------+------+----------+--------+----------+------+-------+
|Other Nordic countries | 2,857| 10| 3,073| 11| -7| 2,995|
+-------------------------+------+----------+--------+----------+------+-------+
|Rest of Europe | 3,424| 12| 3,588| 13| -5| 3,678|
+-------------------------+------+----------+--------+----------+------+-------+
|North America | 3,393| 12| 3,606| 13| -6| 3,428|
+-------------------------+------+----------+--------+----------+------+-------+
|South and Central America| 2,890| 11| 2,743| 10| 5| 2,618|
+-------------------------+------+----------+--------+----------+------+-------+
|Asia-Pacific | 4,444| 16| 4,332| 16| 3| 4,316|
+-------------------------+------+----------+--------+----------+------+-------+
|Africa and Middle East | 1,371| 5| 1,453| 5| -6| 1,385|
+-------------------------+------+----------+--------+----------+------+-------+
|Total |27,665| 100| 27,608| 100| 0| 27,166|
+-------------------------+------+----------+--------+----------+------+-------+
REPORTING SEGMENTS
Mining and Construction Technology
+--------------------------------+-----+-----+------+------+------+------+-----+
|EUR million |Q2/10|Q2/09|Change|Q1-Q2/|Q1-Q2/|Change| 2009|
| | | | %| 10| 09| %| |
+--------------------------------+-----+-----+------+------+------+------+-----+
|Net sales | 541| 531| 2| 1,013| 1,059| -4|2,075|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Net sales of services business | 293| 263| 11| 535| 518| 3|1,017|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 54| 50| | 53| 49| | 49|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Earnings before interest, tax | | | | | | | |
|and | | | | | | | |
|amortization (EBITA) and | | | | | | | |
|non-recurring | 64.8| 42.3| 53| 104.3| 101.7| 3|201.6|
|items | | | | | | | |
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 12.0| 8.0| | 10.3| 9.6| | 9.7|
+--------------------------------+-----+-----+------+------+------+------+-----+
|EBITA | 97.2| 46.9| 107| 136.7| 102.5| 33|202.8|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 18.0| 8.8| | 13.5| 9.7| | 9.8|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Operating profit | 95.7| 46.0| 108| 133.8| 100.9| 33|198.8|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 17.7| 8.7| | 13.2| 9.5| | 9.6|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Orders received | 604| 398| 52| 1,163| 783| 49|1,660|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Order backlog at end of period | | | | 1,310| 1,196| 10|1,041|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Personnel at end of period | | | | 9,787|10,344| -5|9,541|
+--------------------------------+-----+-----+------+------+------+------+-----+
The net sales of Mining and Construction Technology decreased by 4 percent on
the comparison period of January-June, and were EUR 1,013 million. In the mining
business, net sales were on par with the comparison period while, in the
construction business net sales were down by approximately 10 percent. The
services business net sales were slightly up from the comparison period, and
accounted for 53 percent of the segment's net sales (49% in Q1-Q2/2009).
Mining and Construction Technology's EBITA before non-recurring items was EUR
104.3 million (non-recurring items analyzed in the 'Financial result' section),
i.e. 10.3 percent of net sales in January-June (EUR 101.7 million and 9.6% in
Q1-Q2/2009).
EBITA was EUR 136.7 million, i.e. 13.5 percent of net sales (EUR 102.5 million
and 9.7% in Q1-Q2/2009).
EBITA includes positive non-recurring items of EUR 32.4 million net whereas
non-recurring items in the comparison period improved the EBITA by EUR 0.8
million. The largest positive non-recurring items in the second quarter related
to gains from intellectual property rights settlements in the United States and
in Australia amounting to EUR 32.1 million. The underlying operational
profitability stayed roughly on par with the comparison period both in the
Services business as well as in the Equipment and Systems business.
Orders received by Mining and Construction Technology in January-June amounted
to EUR 1,163 million, which was 49 percent more than in the comparison period.
Orders received from mining customers increased by more than 60 percent and from
construction customers by about 27 percent. New orders increased in all regions
except in Western Europe, where there was a slight decline. The share of orders
received from emerging markets was 59 percent (49% in Q1-Q2/2009). Among the
biggest orders in January-June were grinding equipment deliveries for the
Kinross Gold goldmine in Brazil and for the Newcrest goldmine in Australia and
mining equipment for Tisco's iron ore processing plant in China.
The order backlog strengthened by 26 percent from the end of 2009 and totaled
EUR 1,310 million at the end of June (EUR 1,041 million at December 31, 2009).
Uncertainties in the order backlog decreased during the first half of the year
by approximately EUR 70 million as customers restarted previously suspended
projects. At the end of June, our order backlog included mining equipment
orders, which are subject to uncertainties primarily related to delivery
schedules, of around EUR 75 million.
Energy and Environmental Technology
+--------------------------------+-----+-----+------+------+------+------+-----+
|EUR million |Q2/10|Q2/09|Change|Q1-Q2/|Q1-Q2/|Change| 2009|
| | | | %| 10| 09| %| |
+--------------------------------+-----+-----+------+------+------+------+-----+
|Net sales | 334| 357| -6| 666| 754| -12|1,523|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Net sales of services business | 133| 130| 2| 243| 262| -7| 516|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 41| 37| | 38| 35| | 35|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Earnings before interest, tax | | | | | | | |
|and | | | | | | | |
|amortization (EBITA) and non- | 29.3| 35.5| -17| 61.1| 69.2| -12|147.4|
|recurring items | | | | | | | |
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 8.8| 9.9| | 9.2| 9.2| | 9.7|
+--------------------------------+-----+-----+------+------+------+------+-----+
|EBITA | 27.7| 34.1| -19| 56.1| 66.4| -16|136.3|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 8.3| 9.6| | 8.4| 8.8| | 8.9|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Operating profit | 22.7| 29.7| -24| 46.2| 57.4| -20|118.1|
+--------------------------------+-----+-----+------+------+------+------+-----+
|% of net sales | 6.8| 8.3| | 6.9| 7.6| | 7.8|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Orders received | 384| 278| 38| 740| 543| 36|1,297|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Order backlog at end of period | | | | 1,159| 1,035| 12|1,032|
+--------------------------------+-----+-----+------+------+------+------+-----+
|Personnel at end of period | | | | 6,114| 6,349| -4|6,060|
+--------------------------------+-----+-----+------+------+------+------+-----+
The net sales of Energy and Environmental Technology declined by 12 percent on
the comparison period, and were EUR 666 million. The decrease in net sales was
single digit in the Power business but over 10 percent both in Automation and
Recycling businesses. The net sales of the services business decreased by 7
percent on the comparison period and accounted for 38 percent of the segment's
net sales (35% in Q1-Q2/2009). The decrease in the services business was
primarily due to the strong comparison period in the Power business with some
sizable refurbishment projects delivered at that time.
Energy and Environmental Technology's EBITA before non-recurring items was EUR
61.1 million, i.e. 9.2 percent of net sales (EUR 69.2 million and 9.2% in
Q1-Q2/2009). The EBITA for the reporting period included EUR 5.0 million
non-recurring expenses primarily related to capacity adjustment actions
(non-recurring items are analyzed in the 'Financial result' section) in the
Recycling and Automation businesses (non-recurring expenses EUR 2.8 million in
Q1-Q2/2009).
EBITA was EUR 56.1 million, i.e. 8.4 percent of net sales (EUR 66.4 million and
8.8% in Q1-Q2/2009). EBITA improved on the comparison period clearly in the
Power business due to successful project execution and weakened in the
Automation and Recycling businesses, mainly as a result of significantly lower
delivery volumes.
Orders received increased by 36 percent on the comparison period and totaled EUR
740 million. Orders received increased in all businesses, especially in the
Recycling business, where new orders doubled on the exceptionally weak
comparison period. Orders received by the Power business increased by 34 percent
and those of the Automation business by 23 percent. Major orders received
include biomass boilers for RWE npower renewables in the UK and for 4Ham Cogen
SA in Belgium. In addition, several automation orders for managing power plants,
paper, board and tissue lines as well as oil and gas projects were received. In
the Recycling business, several sizable metal recycling shredder orders were
received.
The order backlog at the end of June, EUR 1,159 million, was 12 percent higher
than at the end of 2009. The order backlog includes projects worth approximately
EUR 80 million with uncertain delivery schedules. The uncertainty is mostly
related to the deliveries of power boiler and automation technology for Fibria's
pulp mill project in Brazil.
Paper and Fiber Technology
+---------------------------------+----+----+------+------+------+------+------+
|EUR million | Q2/| Q2/|Change|Q1-Q2/|Q1-Q2/|Change| 2009|
| | 10| 09| %| 10| 09| %| |
+---------------------------------+----+----+------+------+------+------+------+
|Net sales | 494| 359| 38| 858| 646| 33| 1,408|
+---------------------------------+----+----+------+------+------+------+------+
|Net sales of services business | 186| 143| 30| 345| 275| 25| 569|
+---------------------------------+----+----+------+------+------+------+------+
|% of net sales | 38| 40| | 40| 43| | 41|
+---------------------------------+----+----+------+------+------+------+------+
|Earnings before interest, tax and| | | | | | | |
|amortization (EBITA) and non- | | | | | | | |
|recurring items |36.0|14.8| 143| 54.9| 18.6| 195| 71.3|
+---------------------------------+----+----+------+------+------+------+------+
|% of net sales | 7.3| 4.1| | 6.4| 2.9| | 5.1|
+---------------------------------+----+----+------+------+------+------+------+
|EBITA |34.4| 1.4| n/a| 52.9| -12.6| n/a| 16.5|
+---------------------------------+----+----+------+------+------+------+------+
|% of net sales | 7.0| 0.4| | 6.2| -2.0| | 1.2|
+---------------------------------+----+----+------+------+------+------+------+
|Operating profit |27.0|-1.6| n/a| 38.3| -19.8| n/a| 0.8|
+---------------------------------+----+----+------+------+------+------+------+
|% of net sales | 5.5|-0.4| | 4.5| -3.1| | 0.1|
+---------------------------------+----+----+------+------+------+------+------+
|Orders received | 682| 335| 104| 1,143| 614| 86| 1,384|
+---------------------------------+----+----+------+------+------+------+------+
|Order backlog at end of period | | | | 1,759| 1,304| 35| 1,380|
+---------------------------------+----+----+------+------+------+------+------+
|Personnel at end of period | | | |10,526| 9,858| 7|10,459|
+---------------------------------+----+----+------+------+------+------+------+
Net sales of Paper and Fiber Technology grew by 33 percent in January-June, and
were EUR 858 million. The increase in net sales resulted almost equally from
each of the segments' businesses. The comparable net sales growth excluding the
impact of Fabrics business was 22 percent.
The net sales of the services business increased by 25 percent and accounted for
40 percent of the segment's net sales (43% in Q1-Q2/2009). The growth came from
the acquired Fabrics business, while the net sales of the rest of the services
were on par with the comparison period.
Paper and Fiber Technology's EBITA before non-recurring items was EUR 54.9
million, i.e. 6.4 percent of net sales (EUR 18.6 million and 2.9% in
Q1-Q2/2009). The EBITA for the reporting period includes non-recurring items
(non-recurring items are analyzed in the 'Financial result' section), which
weaken the EBITA by a total of EUR 2.0 million (non-recurring items in the
comparison period weakened the EBITA by EUR 31.2 million). Clear improvement in
the profitability resulted both from strong volume growth and more streamlined
cost structure. Profitability improvement was visible especially in the Paper
and Fiber businesses.
EBITA was EUR 52.9 million positive, i.e. 6.2 percent of net sales (EUR 12.6
million negative in Q1-Q2/2009).
New orders from paper and board customers increased by 21 percent and orders
from the pulp industry were up by 257 percent from the comparison period. Orders
from tissue customers more than doubled. Overall, the value of orders received
by Paper and Fiber Technology increased by 86 percent and was EUR 1,143 million.
The increase in services orders was 57 percent (27 percent without the Fabrics
business). Among the orders received in January-June were board-making
technology and machinery for Cheng Loong Corporation in Taiwan, Containerboard
machines to Saica in the UK as well as for Zhejiang Ji'An in China, a fine paper
line for APRIL Fine Paper (Guangdong) Co. Ltd. in China and an order for pulping
equipment for the Ilim Group's new kraft pulp mill in Bratsk, Russia.
The order backlog at the end of June was EUR 1,759 million. Around EUR 240
million relates to the pulp mill project for Fibria in Brazil, the delivery
schedule for which is still open.
Valmet Automotive
Valmet Automotive's net sales in January-June totaled EUR 28 million (EUR 35
million in Q1-Q2/2009). The operating loss was EUR 8.5 million (EUR 2.9 million
loss in Q1-Q2/2009). After heavy loss in the first quarter due to low volumes
Valmet Automotive reported a small loss during the second quarter. Profitability
is expected to improve during the last two quarters of the year when delivery
volumes will be improving based on the existing contracts. At the end of June,
Valmet Automotive employed 723 people (679 employees on December 31, 2009).
Valmet Automotive manufactures THINK City electric cars for the Norwegian
company THINK Global AS, and electric golf cars for the Danish company Garia
A/S. Additionally, Valmet Automotive has an assembly contract with Porsche AG
which is expected to continue until 2012.
Valmet Automotive also has an agreement with the U.S. company Fisker Automotive
Inc. for the manufacturing and engineering of Fisker Karma plug-in hybrid cars.
The aim is to deliver the first cars towards the end of this year. The annual
production is projected to reach 15,000 cars at full capacity.
Events after the review period
Metso acquired Wyesco of Louisiana L.L.C. service business in the USA
In July, Metso acquired the service business of Wyesco of Louisiana L.L.C., in
Louisiana, USA. The acquired business, employing 30 people, was affiliated to
Metso's Paper and Fiber Technology segment as of July 19, 2010. The acquisition
complements Metso's current services, technology and product offering to the
pulp industry in North America, and is in line with Metso's strategy to grow its
services business.
The United States Department of Justice has closed its investigations related to
2006 subpoena received by Metso
On July 2, Metso was informed by the Antitrust Division of the United States
Department of Justice that it has closed its investigation of the rock crushing
and screening equipment industry. Metso Minerals Industries, Inc., which is part
of Metso Corporation's Mining and Construction Technology, received a subpoena
from the Antitrust Division of the United States late 2006. The subpoena called
for Metso Minerals Industries, Inc. to produce certain documents related to an
investigation of potential antitrust violations in the rock crushing and
screening equipment industry. We co-operated fully with the Department of
Justice during the investigation. No further action has been brought against any
party.
Short-term risks of business operations
We estimate that our business environment will continue to develop favorably
during 2010. The growing budget deficits in many European countries may,
however, increase the uncertainty especially in the financial markets and slow
down the recovery. We estimate that the high share of our net sales from the
services business and the emerging markets will diminish possible negative
effects that market uncertainties may have on our business environment.
If the recovery in the global economy is interrupted, it might have adverse
effects on new projects under negotiation or projects in our order backlog. Some
projects may be postponed or they may be suspended or canceled. Less than 10
percent of orders in the order backlog at the moment are subject to
uncertainties relating to delivery schedules. In long-term delivery projects the
customer advance payment is typically 10-30 percent of the value of the project,
in addition to which the customer makes progress payments during the project
execution, which significantly decreases our risk and financing requirements
related to these projects. We continually assess our customers' creditworthiness
and ability to meet their obligations. As a rule, we do not finance customer
projects.
We have adjusted our capacity and cost structure in order to maintain our
competitiveness. Also our suppliers have strongly adjusted their capacity during
the past two years and it is possible that now when the demand is picking up
again, suppliers' ability to supply raw materials, components and subcontracting
services may have weakened, which may result in delivery problems. If the
recovery of the global economy is interrupted, the markets for our products may
contract, which may lead to tightening price competition.
Securing the continuity of our operations requires that sufficient funding is
available under all circumstances. We estimate that our cash assets totaling EUR
906 million and available credit facilities are sufficient to secure short-term
liquidity. Committed credit facilities available for withdrawal amounted to EUR
500 million. The average repayment period for our long-term debt is 3.2 years.
More than half of our long-term debt will mature after 2011. There are no
prepayment covenants in our debt facilities that would be triggered by changes
in credit ratings. Some of our debt facilities include financial covenants
related to capital structure. We fully meet the covenants and other terms
related to our financing agreements.
The levels of net working capital and capital expenditure have a fundamental
effect on the adequacy of financing. We have developed our practices and the
supporting information systems relating to managing net working capital and we
expect that these will improve our capacity to control changes in our net
working capital as delivery volumes experience an upswing. We estimate that we
are well positioned to keep our capital expenditure at a moderate level in the
coming years.
We have EUR 881 million of goodwill on our balance sheet which is mainly related
to business acquisitions made over the last 10 years. We have conducted
impairment testing reviews in every quarter since September 2008, and have not
found any impairment necessary. The quarterly testing reviews have been
conducted with the same principles as the annual tests and the discount rates
have been adjusted when appropriate. The principles of the impairment testing
are presented in our Annual Report.
Changes in the prices of raw materials and components could affect our
profitability. On the other hand, some of our customers are raw material
producers, whose ability to operate and invest may be enhanced by strengthening
raw material prices and hampered by declining raw material prices.
Currency exchange rate risks are among the most substantial financial risks.
Exchange rate changes can affect our business, although the wide geographical
scope of our operations decreases the impact of any individual currency. In
general uncertainty in the economy is likely to increase exchange rate
fluctuations. We hedge the currency exposures that arise from firm delivery and
purchase agreements.
Short-term outlook
We anticipate that the recovery will continue in most of our customer
industries. The uncertainty in the financial markets caused by the growing
budget deficits in many European countries may, however, slow down the recovery
in the markets. The improving capacity utilization rates are supporting our
services business, and most of our customers are gradually regaining their
confidence to increase the level of their investments in new and existing
capacity.
The number of quotations for equipment and projects from mining companies has
strongly increased since the beginning of this year. This has had a clearly
positive impact on our orders and we expect this to continue during the rest of
2010, contributing to a good trading environment. Due to the strengthening
demand for minerals and our large installed equipment base, we expect demand for
our mining services to further improve.
We anticipate that demand for equipment used in aggregates production by the
construction industry will continue to be weak in Europe and in North America
during the year. In the Asia-Pacific region and Brazil, infrastructure
construction projects are maintaining good demand thanks to economic growth. We
estimate that demand for our services business for the construction industry
will remain satisfactory.
Demand for power plants that utilize renewable energy sources is expected to be
good in Europe and North America in 2010. Several European countries and the
United States have published targets to increase the use of renewable energy and
this is expected to support demand for our power plant solutions fuelled by
biomass and waste. The uncertainty in the financial markets may, however, delay
final decisions on some of these projects. Demand for the power plant services
business is expected to be satisfactory.
We estimate that demand for our automation products will continue to get
stronger during this year, as the oil, gas and petrochemical industries increase
their investments due to the improvement in energy prices and demand. Also
business prospects in the pulp and paper customer industry for our automation
solutions are expected to develop favorably. Demand for our services business
for automation is expected to be satisfactory.
We expect the demand for metal recycling equipment to continue to improve due to
the increasing production volumes of steel. The demand for solid-waste recycling
equipment is estimated to be satisfactory. Demand for recycling equipment
services is expected to improve in 2010 as the capacity utilization rates of our
customers' plants and equipment improve.
Demand for new fiber lines, rebuilds and pulp mill services has clearly
recovered from the low levels of 2008 and 2009 and we expect the fiber line
equipment market to continue to be active during the year. Demand for paper,
board and tissue lines is expected to be satisfactory. We expect the improved
capacity utilization rates of the paper and board industry to boost the demand
of our services business.
We estimate that our net sales in 2010 will grow about 10 percent from the EUR
5 billion level of 2009, and that our profitability will be satisfactory. Our
estimate is based on our order backlog at the end of June, which contains about
EUR 2.4 billion worth of deliveries for 2010, and on the expectation that the
recovery of the global economy will continue.
The net sales and profitability estimates are based on Metso's current market
outlook and business scope as well as foreign exchange rates similar to the
first half of 2009.
Previous guidance (from January-March 2010 Interim Review, published on April
29, 2010):
"We estimate that our net sales in 2010 will exceed the EUR 5 billion level of
2009, and that our profitability will be satisfactory. Our estimate is based on
our order backlog, which contains about EUR 2.6 billion worth of deliveries for
2010, and on the expectation that the recovery of the global economy will
continue."
Helsinki, July 29, 2010
Metso Corporation's Board of Directors
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.
The Interim Review is unaudited
+--------------------------------------------+------+-----+------+------+------+
|CONSOLIDATED STATEMENT OF INCOME | | | | | |
+--------------------------------------------+------+-----+------+------+------+
+--------------------------------------------+------+-----+------+------+------+
|EUR million | 4-6/| 4-6/| 1-6/| 1-6/| 1-12/|
| | 2010| 2009| 2010| 2009| 2009|
+--------------------------------------------+------+-----+------+------+------+
|Net sales | 1,370|1,247| 2,540| 2,467| 5,016|
+--------------------------------------------+------+-----+------+------+------+
|Cost of goods sold |-1,009| -942|-1,888|-1,867|-3,808|
+--------------------------------------------+------+-----+------+------+------+
|Gross profit | 361| 305| 652| 600| 1,208|
+--------------------------------------------+------+-----+------+------+------+
|Selling, general and administrative expenses| -260| -239| -493| -478| -938|
+--------------------------------------------+------+-----+------+------+------+
|Other operating income and expenses, net | 39| -1| 51| 2| 24|
+--------------------------------------------+------+-----+------+------+------+
|Share in profits of associated companies | 0| 1| 0| 1| 0|
+--------------------------------------------+------+-----+------+------+------+
|Operating profit | 140| 66| 210| 125| 294|
+--------------------------------------------+------+-----+------+------+------+
|% of net sales | 10.2%| 5.3%| 8.2%| 5.0%| 5.9%|
+--------------------------------------------+------+-----+------+------+------+
|Financial income and expenses, net | -18| -14| -45| -36| -72|
+--------------------------------------------+------+-----+------+------+------+
|Profit before taxes | 122| 52| 165| 89| 222|
+--------------------------------------------+------+-----+------+------+------+
|Income taxes | -37| -15| -50| -26| -71|
+--------------------------------------------+------+-----+------+------+------+
|Profit | 85| 37| 115| 63| 151|
+--------------------------------------------+------+-----+------+------+------+
+--------------------------------------------+------+-----+------+------+------+
|Attributable to: | | | | | |
+--------------------------------------------+------+-----+------+------+------+
|Shareholders of the company | 84| 37| 114| 63| 150|
+--------------------------------------------+------+-----+------+------+------+
|Minority interests | 1| 0| 1| 0| 1|
+--------------------------------------------+------+-----+------+------+------+
|Profit | 85| 37| 115| 63| 151|
+--------------------------------------------+------+-----+------+------+------+
+--------------------------------------------+------+-----+------+------+------+
+--------------------------------------------+------+-----+------+------+------+
|Earnings per share, EUR | 0.56| 0.26| 0.76| 0.44| 1.06|
+--------------------------------------------+------+-----+------+------+------+
|Diluted earnings per share, EUR | 0.56| 0.26| 0.76| 0.44| 1.06|
+--------------------------------------------+------+-----+------+------+------+
+--------------------------------------------+------+-----+------+------+------+
+--------------------------------------------+------+-----+------+------+------+
+--------------------------------------------------------+-----+----+----+-----+
|CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | | | | |
+----------------------------------------------------+---+-----+----+----+-----+
+----------------------------------------------------+---++----+----+----+-----+
|EUR million |4-6/|4-6/|1-6/|1-6/|1-12/|
| |2010|2009|2010|2009| 2009|
+----------------------------------------------------+---++----+----+----+-----+
|Profit | 85| 37| 115| 63| 151|
+----------------------------------------------------+---+-----+----+----+-----+
+----------------------------------------------------+---+-----+----+----+-----+
|Cash flow hedges, net of tax |-14| 15| -20| 10| 14|
+----------------------------------------------------+---+-----+----+----+-----+
|Available-for-sale equity investments, net of tax | -1| 4| 0| 10| -1|
+----------------------------------------------------+---+-----+----+----+-----+
|Currency translation on subsidiary net investments | 77| 10| 139| 48| 74|
+----------------------------------------------------+---+-----+----+----+-----+
|Net investment hedge gains (+) / losses (-), net of |-16| 11| -27| 2| 0|
|tax | | | | | |
+----------------------------------------------------+---+-----+----+----+-----+
|Defined benefit plan actuarial gains (+) / losses | 0| -| 0| -| -2|
|(-), net of tax | | | | | |
+----------------------------------------------------+---+-----+----+----+-----+
|Other comprehensive income (+) / expense (-) | 46| 40| 92| 70| 85|
+----------------------------------------------------+---+-----+----+----+-----+
| | | | | | |
+----------------------------------------------------+---+-----+----+----+-----+
|Total comprehensive income (+) / expense (-) |131| 77| 207| 133| 236|
+----------------------------------------------------+---+-----+----+----+-----+
+----------------------------------------------------+---+-----+----+----+-----+
|Attributable to: | | | | | |
+----------------------------------------------------+---+-----+----+----+-----+
|Shareholders of the company |130| 77| 206| 133| 235|
+----------------------------------------------------+---+-----+----+----+-----+
|Minority interests | 1| 0| 1| 0| 1|
+----------------------------------------------------+---+-----+----+----+-----+
|Total comprehensive income (+) / expense (-) |131| 77| 207| 133| 236|
+----------------------------------------------------+---+-----+----+----+-----+
+-------------------------------------------+--------+--------+-------+
|CONSOLIDATED BALANCE SHEET | | | |
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|ASSETS | | | |
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|EUR million |June 30,|June 30,|Dec 31,|
| | 2010| 2009| 2009|
+-------------------------------------------+--------+--------+-------+
|Non-current assets | | | |
+-------------------------------------------+--------+--------+-------+
|Intangible assets | | | |
+-------------------------------------------+--------+--------+-------+
|Goodwill | 881| 787| 863|
+-------------------------------------------+--------+--------+-------+
|Other intangible assets | 299| 250| 312|
+-------------------------------------------+--------+--------+-------+
| | 1,180| 1,037| 1,175|
+-------------------------------------------+--------+--------+-------+
|Property, plant and equipment | | | |
+-------------------------------------------+--------+--------+-------+
|Land and water areas | 64| 59| 62|
+-------------------------------------------+--------+--------+-------+
|Buildings and structures | 281| 239| 261|
+-------------------------------------------+--------+--------+-------+
|Machinery and equipment | 474| 370| 449|
+-------------------------------------------+--------+--------+-------+
|Assets under construction | 37| 55| 47|
+-------------------------------------------+--------+--------+-------+
| | 856| 723| 819|
+-------------------------------------------+--------+--------+-------+
|Financial and other assets | | | |
+-------------------------------------------+--------+--------+-------+
|Investments in associated companies | 13| 14| 13|
+-------------------------------------------+--------+--------+-------+
|Available-for-sale equity investments | 15| 31| 15|
+-------------------------------------------+--------+--------+-------+
|Loan and other interest bearing receivables| 6| 9| 9|
+-------------------------------------------+--------+--------+-------+
|Available-for-sale financial investments | 228| 5| 130|
+-------------------------------------------+--------+--------+-------+
|Financial instruments held for trading | 45| 0| 40|
+-------------------------------------------+--------+--------+-------+
|Derivative financial instruments | 0| 0| 0|
+-------------------------------------------+--------+--------+-------+
|Deferred tax asset | 195| 178| 171|
+-------------------------------------------+--------+--------+-------+
|Other non-current assets | 29| 29| 44|
+-------------------------------------------+--------+--------+-------+
| | 531| 266| 422|
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|Total non-current assets | 2,567| 2,026| 2,416|
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|Current assets | | | |
+-------------------------------------------+--------+--------+-------+
|Inventories | 1,310| 1,466| 1,172|
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|Receivables | | | |
+-------------------------------------------+--------+--------+-------+
|Trade and other receivables | 1,164| 1,088| 938|
+-------------------------------------------+--------+--------+-------+
|Cost and earnings of projects under | 315| 246| 312|
|construction in excess of advance billings | | | |
+-------------------------------------------+--------+--------+-------+
|Loan and other interest bearing receivables| 7| 8| 8|
+-------------------------------------------+--------+--------+-------+
|Available-for-sale financial assets | 65| 10| 79|
+-------------------------------------------+--------+--------+-------+
|Derivative financial instruments | 24| 30| 21|
+-------------------------------------------+--------+--------+-------+
|Income tax receivables | 39| 29| 42|
+-------------------------------------------+--------+--------+-------+
| | 1,614| 1,411| 1,400|
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|Cash and cash equivalents | 568| 605| 727|
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|Total current assets | 3,492| 3,482| 3,299|
+-------------------------------------------+--------+--------+-------+
+-------------------------------------------+--------+--------+-------+
|TOTAL ASSETS | 6,059| 5,508| 5,715|
+-------------------------------------------+--------+--------+-------+
SHAREHOLDERS' EQUITY AND LIABILITIES
+------------------------------------------+--------+--------+-------+-+
+------------------------------------------+--------+--------+-------+-+
|EUR million |June 30,|June 30,|Dec 31,| |
| | 2010| 2009| 2009| |
+------------------------------------------+--------+--------+-------+-+
|Equity | | | | |
+------------------------------------------+--------+--------+-------+-+
|Share capital | 241| 241| 241| |
+------------------------------------------+--------+--------+-------+-+
|Cumulative translation adjustments | 50| -86| -62| |
+------------------------------------------+--------+--------+-------+-+
|Fair value and other reserves | 684| 508| 710| |
+------------------------------------------+--------+--------+-------+-+
|Retained earnings | 902| 811| 894| |
+------------------------------------------+--------+--------+-------+-+
|Equity attributable to shareholders | 1,877| 1,474| 1,783| |
+------------------------------------------+--------+--------+-------+-+
+------------------------------------------+--------+--------+-------+-+
|Minority interests | 11| 9| 9| |
+------------------------------------------+--------+--------+-------+-+
+------------------------------------------+--------+--------+-------+-+
|Total equity | 1,888| 1,483| 1,792| |
+------------------------------------------+--------+--------+-------+-+
+------------------------------------------+--------+--------+-------+-+
|Liabilities | | | | |
+------------------------------------------+--------+--------+-------+-+
|Non-current liabilities | | | | |
+------------------------------------------+--------+--------+-------+-+
|Long-term debt | 1,266| 1,322| 1,334| |
+------------------------------------------+--------+--------+-------+-+
|Post employment benefit obligations | 198| 191| 190| |
+------------------------------------------+--------+--------+-------+-+
|Provisions | 57| 43| 52| |
+------------------------------------------+--------+--------+-------+-+
|Derivative financial instruments | 5| 8| 5| |
+------------------------------------------+--------+--------+-------+-+
|Deferred tax liability | 52| 47| 56| |
+------------------------------------------+--------+--------+-------+-+
|Other long-term liabilities | 8| 3| 4| |
+------------------------------------------+--------+--------+-------+-+
|Total non-current liabilities | 1,586| 1,614| 1,641| |
+------------------------------------------+--------+--------+-------+-+
+------------------------------------------+--------+--------+-------+-+
|Current liabilities | | | | |
+------------------------------------------+--------+--------+-------+-+
|Current portion of long-term debt | 144| 156| 173| |
+------------------------------------------+--------+--------+-------+-+
|Short-term debt | 47| 201| 69| |
+------------------------------------------+--------+--------+-------+-+
|Trade and other payables | 1,286| 952| 1,065| |
+------------------------------------------+--------+--------+-------+-+
|Provisions | 217| 233| 235| |
+------------------------------------------+--------+--------+-------+-+
|Advances received | 456| 489| 363| |
+------------------------------------------+--------+--------+-------+-+
|Billings in excess of cost and earnings of| 300| 339| 330| |
|projects under construction | | | | |
+------------------------------------------+--------+--------+-------+-+
|Derivative financial instruments | 101| 35| 21| |
+------------------------------------------+--------+--------+-------+-+
|Income tax liabilities | 34| 6| 26| |
+------------------------------------------+--------+--------+-------+-+
|Total current liabilities | 2,585| 2,411| 2,282| |
+------------------------------------------+--------+--------+-------+-+
| | | | | |
+------------------------------------------+--------+--------+-------+-+
|Total liabilities | 4,171| 4,025| 3,923| |
+------------------------------------------+--------+--------+-------+-+
| | | | | |
+------------------------------------------+--------+--------+-------+-+
|TOTAL SHAREHOLDERS' EQUITY AND | 6,059| 5,508| 5,715| |
|LIABILITIES | | | | |
+------------------------------------------+--------+--------+-------+-+
+------------------------------------------+--------+--------+-------+-+
+------------------------------------------+--------+--------+-------+-+
+--------------------------------+--------+--------+-------+-+
|NET INTEREST BEARING LIABILITIES| | | | |
+--------------------------------+--------+--------+-------+-+
| EUR million |June 30,|June 30,|Dec 31,| |
| | 2010| 2009| 2009| |
+--------------------------------+--------+--------+-------+-+
|Long-term interest bearing debt | 1,266| 1,322| 1,334| |
+--------------------------------+--------+--------+-------+-+
|Short-term interest bearing debt| 191| 357| 242| |
+--------------------------------+--------+--------+-------+-+
|Cash and cash equivalents | -568| -605| -727| |
+--------------------------------+--------+--------+-------+-+
|Other interest bearing assets | -351| -32| -266| |
+--------------------------------+--------+--------+-------+-+
|Total | 538| 1,042| 583| |
+--------------------------------+--------+--------+-------+-+
+----------------------------------------------------+----+----+----+----+-----+
|CONDENSED CONSOLIDATED CASH FLOW STATEMENT | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
+----------------------------------------------------+----+----+----+----+-----+
|EUR million |4-6/|4-6/|1-6/|1-6/|1-12/|
| |2010|2009|2010|2009| 2009|
+----------------------------------------------------+----+----+----+----+-----+
|Cash flows from operating activities: | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Profit | 85| 37| 115| 63| 151|
+----------------------------------------------------+----+----+----+----+-----+
|Adjustments to reconcile profit to net cash provided| | | | | |
|by operating activities | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Depreciation and amortization | 44| 34| 87| 70| 143|
+----------------------------------------------------+----+----+----+----+-----+
|Interests and dividend income | 14| 14| 27| 30| 58|
+----------------------------------------------------+----+----+----+----+-----+
|Income taxes | 37| 15| 50| 26| 71|
+----------------------------------------------------+----+----+----+----+-----+
|Other | 17| 1| 27| 10| 18|
+----------------------------------------------------+----+----+----+----+-----+
|Change in net working capital | 44| 41| 7| 135| 518|
+----------------------------------------------------+----+----+----+----+-----+
|Cash flows from operations | 241| 142| 313| 334| 959|
+----------------------------------------------------+----+----+----+----+-----+
|Interest paid and dividends received | -29| -14| -35| -25| -51|
+----------------------------------------------------+----+----+----+----+-----+
|Income taxes paid | -33| -36| -48| -81| -138|
+----------------------------------------------------+----+----+----+----+-----+
|Net cash provided by operating activities | 179| 92| 230| 228| 770|
+----------------------------------------------------+----+----+----+----+-----+
|Cash flows from investing activities: | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Capital expenditures on fixed assets | -30| -25| -58| -55| -116|
+----------------------------------------------------+----+----+----+----+-----+
|Proceeds from sale of fixed assets | 3| 1| 4| 3| 8|
+----------------------------------------------------+----+----+----+----+-----+
|Business acquisitions, net of cash acquired | -2| -| -5| -3| -1|
+----------------------------------------------------+----+----+----+----+-----+
|Proceeds from sale of businesses, net of cash | 10| 0| 10| 2| 2|
|sold | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Investments in (-) / proceeds from (+) financial | 19| -3| -90| -3| -221|
|assets | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Other | 1| 1| 4| 1| 1|
+----------------------------------------------------+----+----+----+----+-----+
|Net cash provided by (+) / used in (-) investing | 1| -26|-135| -55| -327|
|activities | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Cash flows from financing activities: | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Redemption of own shares | -| -| -7| -2| -2|
+----------------------------------------------------+----+----+----+----+-----+
|Dividends paid |-105| -99|-105| -99| -99|
+----------------------------------------------------+----+----+----+----+-----+
|Net funding | -62| 201|-177| 214| 59|
+----------------------------------------------------+----+----+----+----+-----+
|Other | -1| -6| -1| -6| -6|
+----------------------------------------------------+----+----+----+----+-----+
|Net cash provided by (+) / used in (-) financing |-168| 96|-290| 107| -48|
|activities | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Net increase (+) / decrease (-) in cash and cash | 12| 162|-195| 280| 395|
|equivalents | | | | | |
+----------------------------------------------------+----+----+----+----+-----+
|Effect from changes in exchange rates | 21| 7| 36| 11| 18|
+----------------------------------------------------+----+----+----+----+-----+
|Cash and cash equivalents at beginning of period | 535| 436| 727| 314| 314|
+----------------------------------------------------+----+----+----+----+-----+
|Cash and cash equivalents at end of period | 568| 605| 568| 605| 727|
+----------------------------------------------------+----+----+----+----+-----+
+----------------------------------------------------+----+----+----+----+-----+
+----------------------------------------------------+----+----+----+----+-----+
+----------------------------------------+----+------+----++---++---++---+-----+
|FREE CASH FLOW | | | | | |
+----------------------------------------+----+------------+----+----+---------+
+----------------------------------------+----+------------+----+----+---------+
+----------------------------------------+----+------------+----+----+---------+
|EUR million |4-6/| 4-6/|1-6/|1-6/| 1-12/|
| |2010| 2009|2010|2009| 2009|
+----------------------------------------+----+------------+----+----+---------+
|Net cash provided by operating | 179| 92| 230| 228| 770|
|activities | | | | | |
+----------------------------------------+----+------------+----+----+---------+
|Capital expenditures on maintenance | -18| -13| -35| -31| -61|
|investments | | | | | |
+----------------------------------------+----+------------+----+----+---------+
|Proceeds from sale of fixed assets | 3| 1| 4| 3| 8|
+----------------------------------------+----+------------+----+----+---------+
|Free cash flow | 164| 80| 199| 200| 717|
+----------------------------------------+----+------------+----+----+---------+
+------------------------------------------------+-----+-----+------+----+-----+
|CONSOLIDATED STATEMENT OF CHANGES IN | | | | | |
|SHAREHOLDERS' EQUITY | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
| | | Cu-| | | Eq-| | |
| | | mu-| Fair| | uity| | |
| | | la-|value| Re-| at-| Mi-| |
| |Share| tive| and|tain-| tri-|nor-| To-|
|EUR million |capi-| trans-|other| ed| but-| ity| tal|
| | tal| la-| re-|earn-| able| in-| eq-|
| | | tion| ser-| ings| to|ter-| uity|
| | | ad-| ves| |share-|ests| |
| | | just-| | | hold-| | |
| | | ments| | | ers| | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Balance at Jan 1, 2009 | 241| -136| 490| 849| 1,444| 9|1,453|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Profit | -| -| -| 63| 63| -| 63|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Other comprehensive income | | | | | | | |
|(+) / | | | | | | | |
|expense (-) | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Cash flow hedges, net of | -| -| 10| -| 10| -| 10|
|tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Available-for-sale equity | -| -| 10| -| 10| -| 10|
|investments, net of tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Currency translation on | | | | | | | |
|subsidiary | -| 48| -| -| 48| -| 48|
|net investments | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Net investment hedge gains | -| 2| -| -| 2| -| 2|
|(losses), net of tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Total comprehensive income | | | | | | | |
|(+) / | -| 50| 20| 63| 133| -| 133|
|expense (-) | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Dividends | -| -| -| -99| -99| -| -99|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Redemption of own shares | -| -| -3| -| -3| -| -3|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Share-based payments, net | -| -| 1| -| 1| -| 1|
|of tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Other | -| -| -| -2| -2| -| -2|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Balance at June 30, 2009 | 241| -86| 508| 811| 1,474| 9|1,483|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Balance at Jan 1, 2010 | 241| -62| 710| 894| 1,783| 9|1,792|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Profit | -| -| -| 114| 114| 1| 115|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Other comprehensive income | | | | | | | |
|(+) / | | | | | | | |
|expense (-) | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Cash flow hedges, net of | -| -| -20| -| -20| -| -20|
|tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Available-for-sale equity | -| -| 0| -| 0| -| 0|
|investments, net of tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Currency translation on | | | | | | | |
|subsidiary | -| 139| -| -| 139| -| 139|
|net investments | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Net investment hedge gains | -| -27| -| -| -27| -| -27|
|(losses), net of tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Total comprehensive income | | | | | | | |
|(+) / | -| 112| -20| 114| 206| 1| 207|
|expense (-) | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Dividends | -| -| -| -105| -105| -| -105|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Redemption of own shares | -| -| -7| -| -7| -| -7|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Share-based payments, net | -| -| 1| -| 1| -| 1|
|of tax | | | | | | | |
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Other | -| -| -| -1| -1| 1| 0|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
|Balance at June 30, 2010 | 241| 50| 684| 902| 1,877| 11|1,888|
+---------------------------+-----+--------------+-----+-----+------+----+-----+
+---------------------------------+--------+-----------+-----------------------+
|ACQUISITIONS | | | |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Acquisitions in 2010 | | | |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|In April Metso acquired the paper machine web inspection and web break system |
|business from Viconsys in Finland. The purchase price was less than EUR 2 |
|million and the business was combined into Metso's Energy and Environmental |
|Technology segment from April 15, 2010 onwards. |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Acquisition of Tamfelt in 2009 | | | |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Metso acquired Tamfelt Corporation, a Finnish corporation listed in the NASDAQ|
|OMX Helsinki exchange, through a public share exchange offer that was |
|completed at the end of December 2009. The total transaction value was EUR |
|215 million whereof EUR 206 million was compensated by offering 8,593,642 new |
|Metso shares representing 95.2% of Tamfelt's shares and votes. Prior to the |
|transaction, Metso held Tamfelt shares worth EUR 4 million i.e. 2.8% of |
|Tamfelt's shares and votes. The remaining 2.0% of Tamfelt's shares, amounting |
|to EUR 4 million, were redeemed in accordance with the Finnish Companies Act |
|and Metso estimates to pay the redemption price and the interest accrued |
|thereon during the third quarter of 2010. The transaction value includes EUR |
|5 million in expenses and transfer taxes related to the acquisition. |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|The transaction value, together with the shares already held, exceeded the net|
|assets of Tamfelt by EUR 117 million, whereof EUR 50 million was allocated to |
|intangible assets, representing the fair values of acquired customer base, |
|order backlog and technology. Furthermore, EUR 10 million was allocated to the|
|property, plant and equipment, to reflect their appraisal to fair values. The |
|deferred tax liability resulting from these allocations was EUR 16 million. |
|The remaining EUR 73 million represents goodwill, which reflects the value of |
|assembled workforce, significant synergy benefits and widened business |
|portfolio offering Metso potential to expand its operations into new markets |
|and customer segments. |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Had the acquisition occurred on January 1, 2009, Metso's net sales would have |
|increased by EUR 130 million. The calculation of pro forma net income of the |
|acquired business would be impracticable considering the effects of the |
|acquisition cost. |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Preliminary details of the acquired net assets and goodwill are as follows: |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|EUR million |Carrying| Fair value| Fair|
| | amount|allocations| value|
+---------------------------------+--------+-----------+-----------------------+
|Intangible assets | 4| 50| 54|
+---------------------------------+--------+-----------+-----------------------+
|Property, plant and equipment | 87| 10| 97|
+---------------------------------+--------+-----------+-----------------------+
|Inventories | 30| -| 30|
+---------------------------------+--------+-----------+-----------------------+
|Trade and other receivables | 30| -| 30|
+---------------------------------+--------+-----------+-----------------------+
|Deferred tax liabilities, net | -9| -16| -25|
+---------------------------------+--------+-----------+-----------------------+
|Other liabilities assumed | -23| -| -23|
+---------------------------------+--------+-----------+-----------------------+
|Non-interest bearing net assets | 119| 44| 163|
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Cash and cash equivalents | | | 19|
|acquired | | | |
+---------------------------------+--------+-----------+-----------------------+
|Debt assumed | | | -36|
+---------------------------------+--------+-----------+-----------------------+
|Transaction value | | | -215|
+---------------------------------+--------+-----------+-----------------------+
|Pre-acquisition holding of | | | -4|
|Tamfelt shares | | | |
+---------------------------------+--------+-----------+-----------------------+
|Goodwill | | | 73|
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Transaction value settled in cash| | | -5|
+---------------------------------+--------+-----------+-----------------------+
|Cash and cash equivalents | | | 19|
|acquired | | | |
+---------------------------------+--------+-----------+-----------------------+
|Total cash inflow on acquisition | | | 14|
|in 2009 | | | |
+---------------------------------+--------+-----------+-----------------------+
+---------------------------------+--------+-----------+-----------------------+
|Amounts settled in 2010 | | | -3|
+---------------------------------+--------+-----------+-----------------------+
|Total cash inflow on Tamfelt | | | 11|
|acquisition | | | |
+---------------------------------+--------+-----------+-----------------------+
+----------------------------------------+---------+----------+---------------++
|ASSETS PLEDGED AND CONTINGENT | | | ||
|LIABILITIES | | | ||
+---------------------------------------++--------++---------++---------------++
+---------------------------------------+---------+----------+----------------++
+---------------------------------------+---------+----------+----------------++
|EUR million | June 30,| June 30,| Dec 31,||
| | 2010| 2009| 2009||
+---------------------------------------+---------+----------+----------------++
|Mortgages on corporate debt | 3| 3| 20||
+---------------------------------------+---------+----------+----------------++
|Other pledges and contingencies | | | ||
+---------------------------------------+---------+----------+----------------++
|Mortgages | 1| 1| 1||
+---------------------------------------+---------+----------+----------------++
|Pledged assets | -| 0| -||
+---------------------------------------+---------+----------+----------------++
|Guarantees on behalf of associated | -| -| -||
|company obligations | | | ||
+---------------------------------------+---------+----------+----------------++
|Other guarantees | 4| 6| 7||
+---------------------------------------+---------+----------+----------------++
+---------------------------------------+---------+----------+----------------++
|Repurchase and other commitments | 6| 6| 6||
+---------------------------------------+---------+----------+----------------++
|Lease commitments | 238| 151| 226||
+---------------------------------------+---------+----------+----------------++
+---------------------------------------+---------+----------+----------------++
| | | ||
|NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL | | ||
|INSTRUMENTS | | ||
+---------------------------------------+---------+----------+----------------++
+-----------------------+---------------+--+------+---+------+----------------++
+-----------------------+------------------+----------+-----------------------++
+-----------------------+------------------+----------+-----------------------++
|EUR million | June 30,| June 30,| Dec 31,||
| | 2010| 2009| 2009||
+-----------------------+------------------+----------+-----------------------++
|Forward exchange rate | 1,949| 1,334| 1,390||
|contracts | | | ||
+-----------------------+------------------+----------+-----------------------++
|Interest rate swaps | 178| 123| 128||
+-----------------------+------------------+----------+-----------------------++
|Option agreements | | | ||
+-----------------------+------------------+----------+-----------------------++
|Bought | 2| -| 13||
+-----------------------+------------------+----------+-----------------------++
|Sold | 10| -| 6||
+-----------------------+------------------+----------+-----------------------++
+-----------------------+------------------+----------+-----------------------++
|The notional amount of electricity forwards was 662 GWh as of June 30, 2010 ||
|and 569 GWh as of June 30, 2009. ||
+-----------------------------------------------------------------------------++
|The notional amount of nickel forwards to hedge stainless steel prices was ||
|360 tons as of June 30, 2010 and 246 tons as of June 30, 2009. ||
+-----------------------------------------------------------------------------++
|The notional amounts indicate the volumes in the use of derivatives, but do ||
|not indicate the exposure to risk. ||
+-----------------------------------------------------------------------------++
+------------------------------------------------------+-------+-------+-------+
|KEY RATIOS | | | |
+------------------------------------------------------+-------+-------+-------+
+------------------------------------------------------+-------+-------+-------+
| | 1-6/| 1-6/| 1-12/|
| | 2010| 2009| 2009|
+------------------------------------------------------+-------+-------+-------+
|Earnings per share, EUR | 0.76| 0.44| 1.06|
+------------------------------------------------------+-------+-------+-------+
|Diluted earnings per share, EUR | 0.76| 0.44| 1.06|
+------------------------------------------------------+-------+-------+-------+
+------------------------------------------------------+-------+-------+-------+
|Equity/share at end of period, EUR | 12.54| 10.43| 11.89|
+------------------------------------------------------+-------+-------+-------+
|Return on equity (ROE), % (annualized) | 13.6| 8.7| 9.8|
+------------------------------------------------------+-------+-------+-------+
|Return on capital employed (ROCE) before tax, % | 12.6| 9.3| 10.0|
|(annualized) | | | |
+------------------------------------------------------+-------+-------+-------+
|Return on capital employed (ROCE) after tax, % | 9.6| 7.4| 7.7|
|(annualized) | | | |
+------------------------------------------------------+-------+-------+-------+
|Equity to assets ratio at end of period, % | 35.6| 31.7| 35.7|
+------------------------------------------------------+-------+-------+-------+
|Gearing at end of period, % | 28.5| 70.2| 32.5|
+------------------------------------------------------+-------+-------+-------+
+------------------------------------------------------+-------+-------+-------+
|Free cash flow, EUR million | 199| 200| 717|
+------------------------------------------------------+-------+-------+-------+
|Free cash flow/share, EUR | 1.33| 1.41| 5.07|
+------------------------------------------------------+-------+-------+-------+
|Cash conversion, % | 173| 317| 475|
+------------------------------------------------------+-------+-------+-------+
+------------------------------------------------------+-------+-------+-------+
|Gross capital expenditure (excl. business | 58| 55| 117|
|acquisitions), EUR million | | | |
+------------------------------------------------------+-------+-------+-------+
|Business acquisitions, net of cash acquired, EUR | 5| 3| 1|
|million | | | |
+------------------------------------------------------+-------+-------+-------+
|Depreciation and amortization, EUR million | 87| 70| 143|
+------------------------------------------------------+-------+-------+-------+
+------------------------------------------------------+-------+-------+-------+
|Number of outstanding shares at end of period |149,631|141,349|149,939|
|(thousands) | | | |
+------------------------------------------------------+-------+-------+-------+
|Average number of shares (thousands) |149,735|141,420|141,477|
+------------------------------------------------------+-------+-------+-------+
|Average number of diluted shares (thousands) |149,838|141,420|141,526|
+------------------------------------------------------+-------+-------+-------+
EXCHANGE RATES USED
+---+-------------------+------+-------+-------+--------+--------+-------+
| | | 1-6/| 1-6/| 1-12/|June 30,|June 30,|Dec 31,|
| | | 2010| 2009| 2009| 2010| 2009| 2009|
+---+-------------------+------+-------+-------+--------+--------+-------+
|USD|(US dollar) |1.3331| 1.3579| 1.3960| 1.2271| 1.4134| 1.4406|
+---+-------------------+------+-------+-------+--------+--------+-------+
|SEK|(Swedish krona) |9.8144|10.8806|10.6092| 9.5259| 10.8125|10.2520|
+---+-------------------+------+-------+-------+--------+--------+-------+
|GBP|(Pound sterling) |0.8677| 0.8931| 0.8948| 0.8175| 0.8521| 0.8881|
+---+-------------------+------+-------+-------+--------+--------+-------+
|CAD|(Canadian dollar) |1.3894| 1.6231| 1.5910| 1.2890| 1.6275| 1.5128|
+---+-------------------+------+-------+-------+--------+--------+-------+
|BRL|(Brazilian real) |2.3895| 2.9426| 2.7994| 2.2082| 2.7469| 2.5113|
+---+-------------------+------+-------+-------+--------+--------+-------+
|CNY|(Chinese renminbi) |9.0922| 9.2767| 9.5338| 8.3215| 9.6545| 9.8350|
+---+-------------------+------+-------+-------+--------+--------+-------+
|AUD|(Australian dollar)|1.4986| 1.8841| 1.7858| 1.4403| 1.7359| 1.6008|
+---+-------------------+------+-------+-------+--------+--------+-------+
FORMULAS FOR CALCULATION OF INDICATORS
EBITA before non-recurring items:
Operating profit + amortization + goodwill impairment + non-recurring items
++---------------++---------------------+-----------++++
++---------------++---------------------+-----------++++
||Earnings/share:|| | ||||
++---------------++---------------------+-----------++++
++---------------++---------------------+-----------++++
||Profit attributable to shareholders of the company||||
++--------------------------------------+-----------++++
||Average number of shares during period| ||||
++---------------++---------------------+-----------++++
++---------------++---------------------+-----------++++
++-------------+---------------------++++++
++-------------+---------------------++++++
||Equity/share:| ||||||
++-------------+---------------------++++++
++-------------+---------------------++++++
||Equity attributable to shareholders||||||
++-----------------------------------++++++
||Number of shares at end of period ||||||
++-----------------------------------++++++
++------+--------------------------+-----+++++
++------+--------------------------+-----+++++
++------+--------------------------+-----+++++
||Return on equity (ROE), %: | |||||
++------+--------------------------+-----+++++
++------+--------------------------+-----+++++
||Profit| | |||||
++------+--------------------------+x 100+++++
||Total equity (average for period)| |||||
++---------------------------------+-----+++++
++------------+-------------------++-----+-----------------+-+-----+
++------------+-------------------++-----+-----------------+-+-----+
++------------+-------------------++-----+-----------------+-+-----+
||Return on capital employed (ROCE) before tax, %: | | |
++------------+-------------------++-----+-----------------+-+-----+
++------------+-------------------++-----+-----------------+-+-----+
||Profit before tax + interest and other financial expenses| | |
++---------------------------------------------------------+-+x 100|
||Balance sheet total - non-interest bearing liabilities | |
||(average for period) | |
++------------+-------------------++-----+-----------------+-+-----+
++------------+-------------------++-----+-----------------+-+-----+
++------------+-------------------++-----+-----------------+-+-----+
||Return on capital employed (ROCE) after tax, %: | | |
++------------+-------------------++-----+-----------------+-+-----+
++------------+-------------------++-----+-----------------+-+-----+
||Profit + interest and other financial | | | |
||expenses | | | |
++---------------------------------------+-----------------+-+x 100|
||Balance sheet total - non-interest bearing liabilities | |
||(average for period) | |
++------------+-------------------++-----+-----------------+-+-----+
++------------+-------------------++----++-----------------+-+-----+
++------------+-------------------+-----++-----------------+-+-----+
||Gearing, %: | | || | | |
++------------+-------------------+-----++-----------------+-+-----+
++------------+-------------------+-----++-----------------+-+-----+
||Net interest bearing liabilities| || | | |
++------------+-------------------+x 100++-----------------+-+-----+
||Total equity| | || | | |
++------------+-------------------+-----++----+------------+-+-----+
++------------+-------------------+-----+-----+------------+-+-----+
++------------+-------------------+-----+-----+------------+-+-----+
||Equity to assets ratio, %: | | | | | |
++------------+-------------------+-----+-----+------------+-+-----+
++------------+-------------------+-----+-----+------------+-+-----+
||Total equity| | | | | | |
++------------+-------------------+-----+x 100+------------+-+-----+
||Balance sheet total - advances | | | | |
||received | | | | |
++------------+-------------------+-----+-----+------------+-+-----+
++------------+-------------------+-----+-----+------------+-+-----+
++-------------------+-----+----------+-++++
++-------------------+-----+----------+-++++
||Free cash flow: | | | ||||
++-------------------+-----+----------+-++++
++-------------------+-----+----------+-++++
||Operating cash flow| | | ||||
++-------------------+-----+----------+-++++
||- capital expenditures on maintenance ||||
||investments ||||
++------------------------------------+-++++
||+ proceeds from sale of fixed assets| ||||
++-------------------+-----+----------+-++++
||= Free cash flow | | | ||||
++-------------------+-----+----------+-++++
++-------------------+-----+----------+-++++
||Cash conversion, %: | | ||||
++-------------------+-----+----------+-++++
++-------------------+-----+----------+-++++
||Free cash flow | | | ||||
++-------------------+x 100+----------+-++++
||Profit | | | ||||
++-------------------+-----+----------+-++++
++-------------------+-----+----------+-++++
+---------------------------------+------------+-----+-----+-----+-------+-----+
|SEGMENT INFORMATION | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
+---------------------------------+------------+-----+-----+-----+-------+-----+
+---------------------------------+------------+-----+-----+-----+-------+-----+
+---------------------------------+------------+-----+-----+-----+-------+-----+
|NET SALES | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|EUR million | 4-6/| 4-6/| 1-6/| 1-6/|7/2009-|1-12/|
| | 2010| 2009| 2010| 2009| 6/2010| 2009|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Mining and Construction | 541| 531|1,013|1,059| 2,029|2,075|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Energy and Environmental | 334| 357| 666| 754| 1,435|1,523|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Paper and Fiber Technology | 494| 359| 858| 646| 1,620|1,408|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Valmet Automotive | 17| 14| 28| 35| 49| 56|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and other | -| -| -| -| -| -|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and others | 17| 14| 28| 35| 49| 56|
|total | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Intra Metso net sales | -16| -14| -25| -27| -44| -46|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Metso total | 1,370|1,247|2,540|2,467| 5,089|5,016|
+---------------------------------+------------+-----+-----+-----+-------+-----+
+---------------------------------+------------+-----+-----+-----+-------+-----+
|NON-RECURRING ITEMS | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|EUR million | 4-6/| 4-6/| 1-6/| 1-6/|7/2009-|1-12/|
| | 2010| 2009| 2010| 2009| 6/2010| 2009|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Mining and Construction | 32.4| 4.6| 32.4| 0.8| 32.8| 1.2|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Energy and Environmental | -1.6| -1.4| -5.0| -2.8| -13.3|-11.1|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Paper and Fiber Technology | -1.6|-13.4| -2.0|-31.2| -25.6|-54.8|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Valmet Automotive | -| -| -| -| -| -|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and other | -| -| -| -| -| -|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and others | -| -| -| -| -| -|
|total | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Metso total | 29.2|-10.2| 25.4|-33.2| -6.1|-64.7|
+---------------------------------+------------+-----+-----+-----+-------+-----+
+---------------------------------+------------+-----+-----+-----+-------+-----+
|EBITA BEFORE NON-RECURRING ITEMS | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|EUR million | 4-6/| 4-6/| 1-6/| 1-6/|7/2009-|1-12/|
| | 2010| 2009| 2010| 2009| 6/2010| 2009|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Mining and Construction | 64.8| 42.3|104.3|101.7| 204.2|201.6|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Energy and Environmental | 29.3| 35.5| 61.1| 69.2| 139.3|147.4|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Paper and Fiber Technology | 36.0| 14.8| 54.9| 18.6| 107.6| 71.3|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Valmet Automotive | -1.4| -2.6| -8.5| -2.9| -13.7| -8.1|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and other | -3.7| -5.1| 0.8| -9.9| -2.5|-13.2|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and others | -5.1| -7.7| -7.7|-12.8| -16.2|-21.3|
|total | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Metso total | 125.0| 84.9|212.6|176.7| 434.9|399.0|
+---------------------------------+------------+-----+-----+-----+-------+-----+
+---------------------------------+------------+-----+-----+-----+-------+-----+
|EBITA BEFORE NON-RECURRING ITEMS, % OF NET | | | | | |
|SALES | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|% | 4-6/| 4-6/| 1-6/| 1-6/|7/2009-|1-12/|
| | 2010| 2009| 2010| 2009| 6/2010| 2009|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Mining and Construction | 12.0| 8.0| 10.3| 9.6| 10.1| 9.7|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Energy and Environmental | 8.8| 9.9| 9.2| 9.2| 9.7| 9.7|
|Technology | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Paper and Fiber Technology | 7.3| 4.1| 6.4| 2.9| 6.6| 5.1|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Valmet Automotive | -8.2|-18.6|-30.4| -8.3| -28.0|-14.5|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and other | n/a| n/a| n/a| n/a| n/a| n/a|
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Group Head Office and others | n/a| n/a| n/a| n/a| n/a| n/a|
|total | | | | | | |
+---------------------------------+------------+-----+-----+-----+-------+-----+
|Metso total | 9.1| 6.8| 8.4| 7.2| 8.5| 8.0|
+---------------------------------+------------+-----+-----+-----+-------+-----+
+---------------------------------+------------+-----+-----+-----+-------+-----+
+-----------------------------------+-----+----+-----+-----+-------+-----+
|EBITA | | | | | | |
+-----------------------------------+-----+----+-----+-----+-------+-----+
|EUR million | 4-6/|4-6/| 1-6/| 1-6/|7/2009-|1-12/|
| | 2010|2009| 2010| 2009| 6/2010| 2009|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Mining and Construction Technology | 97.2|46.9|136.7|102.5| 237.0|202.8|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Energy and Environmental Technology| 27.7|34.1| 56.1| 66.4| 126.0|136.3|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Paper and Fiber Technology | 34.4| 1.4| 52.9|-12.6| 82.0| 16.5|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Valmet Automotive | -1.4|-2.6| -8.5| -2.9| -13.7| -8.1|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Group Head Office and other | -3.7|-5.1| 0.8| -9.9| -2.5|-13.2|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Group Head Office and others total | -5.1|-7.7| -7.7|-12.8| -16.2|-21.3|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Metso total |154.2|74.7|238.0|143.5| 428.8|334.3|
+-----------------------------------+-----+----+-----+-----+-------+-----+
+-----------------------------------+-----+----+-----+-----+-------+-----+
+-----------------------------------+----+-----+-----+----+-------+-----+
|EBITA, % OF NET SALES | | | | | | |
+-----------------------------------+----+-----+-----+----+-------+-----+
|% |4-6/| 4-6/| 1-6/|1-6/|7/2009-|1-12/|
| |2010| 2009| 2010|2009| 6/2010| 2009|
+-----------------------------------+----+-----+-----+----+-------+-----+
|Mining and Construction Technology |18.0| 8.8| 13.5| 9.7| 11.7| 9.8|
+-----------------------------------+----+-----+-----+----+-------+-----+
|Energy and Environmental Technology| 8.3| 9.6| 8.4| 8.8| 8.8| 8.9|
+-----------------------------------+----+-----+-----+----+-------+-----+
|Paper and Fiber Technology | 7.0| 0.4| 6.2|-2.0| 5.1| 1.2|
+-----------------------------------+----+-----+-----+----+-------+-----+
|Valmet Automotive |-8.2|-18.6|-30.4|-8.3| -28.0|-14.5|
+-----------------------------------+----+-----+-----+----+-------+-----+
|Group Head Office and other | n/a| n/a| n/a| n/a| n/a| n/a|
+-----------------------------------+----+-----+-----+----+-------+-----+
|Group Head Office and others total | n/a| n/a| n/a| n/a| n/a| n/a|
+-----------------------------------+----+-----+-----+----+-------+-----+
|Metso total |11.3| 6.0| 9.4| 5.8| 8.4| 6.7|
+-----------------------------------+----+-----+-----+----+-------+-----+
+-----------------------------------+----+-----+-----+----+-------+-----+
+-----------------------------------+-----+----+-----+-----+-------+-----+
|OPERATING PROFIT (LOSS) | | | | | | |
+-----------------------------------+-----+----+-----+-----+-------+-----+
|EUR million | 4-6/|4-6/| 1-6/| 1-6/|7/2009-|1-12/|
| | 2010|2009| 2010| 2009| 6/2010| 2009|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Mining and Construction Technology | 95.7|46.0|133.8|100.9| 231.7|198.8|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Energy and Environmental Technology| 22.7|29.7| 46.2| 57.4| 106.9|118.1|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Paper and Fiber Technology | 27.0|-1.6| 38.3|-19.8| 58.9| 0.8|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Valmet Automotive | -1.4|-2.6| -8.5| -2.9| -13.8| -8.2|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Group Head Office and other | -4.0|-5.6| -0.3|-11.1| -5.1|-15.9|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Group Head Office and others total | -5.4|-8.2| -8.8|-14.0| -18.9|-24.1|
+-----------------------------------+-----+----+-----+-----+-------+-----+
|Metso total |140.0|65.9|209.5|124.5| 378.6|293.6|
+-----------------------------------+-----+----+-----+-----+-------+-----+
+-----------------------------------+-----+----+-----+-----+-------+-----+
+---------------------------------------+----+-----+-----+----+-------+-----+
|OPERATING PROFIT (LOSS), % OF NET SALES| | | | | | |
+---------------------------------------+----+-----+-----+----+-------+-----+
|% |4-6/| 4-6/| 1-6/|1-6/|7/2009-|1-12/|
| |2010| 2009| 2010|2009| 6/2010| 2009|
+---------------------------------------+----+-----+-----+----+-------+-----+
|Mining and Construction Technology |17.7| 8.7| 13.2| 9.5| 11.4| 9.6|
+---------------------------------------+----+-----+-----+----+-------+-----+
|Energy and Environmental Technology | 6.8| 8.3| 6.9| 7.6| 7.4| 7.8|
+---------------------------------------+----+-----+-----+----+-------+-----+
|Paper and Fiber Technology | 5.5| -0.4| 4.5|-3.1| 3.6| 0.1|
+---------------------------------------+----+-----+-----+----+-------+-----+
|Valmet Automotive |-8.2|-18.6|-30.4|-8.3| -28.2|-14.6|
+---------------------------------------+----+-----+-----+----+-------+-----+
|Group Head Office and other | n/a| n/a| n/a| n/a| n/a| n/a|
+---------------------------------------+----+-----+-----+----+-------+-----+
|Group Head Office and others total | n/a| n/a| n/a| n/a| n/a| n/a|
+---------------------------------------+----+-----+-----+----+-------+-----+
|Metso total |10.2| 5.3| 8.2| 5.0| 7.4| 5.9|
+---------------------------------------+----+-----+-----+----+-------+-----+
+---------------------------------------+----+-----+-----+----+-------+-----+
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|ORDERS RECEIVED | | | | | | |
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|EUR million | 4-6/| 4-6/| 1-6/| 1-6/|7/2009-|1-12/|
| | 2010| 2009| 2010| 2009| 6/2010| 2009|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Mining and Construction Technology | 604| 398|1,163| 783| 2,040|1,660|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Energy and Environmental Technology| 384| 278| 740| 543| 1,494|1,297|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Paper and Fiber Technology | 682| 335|1,143| 614| 1,913|1,384|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Valmet Automotive | 17| 14| 28| 35| 49| 56|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Group Head Office and other | -| -| -| -| -| -|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Group Head Office and others total | 17| 14| 28| 35| 49| 56|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Intra Metso orders received | -16| -5| -37| -13| -63| -39|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
|Metso total |1,671|1,020|3,037|1,962| 5,433|4,358|
+-----------------------------------+-----+-----+-----+-----+-------+-----+
+---------------------+-------------------+-----+------+-----+-----+
|QUARTERLY INFORMATION| | | | | |
+---------------------+-------------------+-----+------+-----+-----+
+---------------------+-------------------+-----+------+-----+-----+
+---------------------+-------------------+-----+------+-----+-----+
+---------------------+-------------+-----+-----+------+-----+-----+
|NET SALES | | | | | |
+-----------------------------------+-----+-----+------+-----+-----+
|EUR million | 4-6/| 7-9/|10-12/| 1-3/| 4-6/|
| | 2009| 2009| 2009| 2010| 2010|
+-----------------------------------+-----+-----+------+-----+-----+
|Mining and Construction Technology | 531| 492| 524| 472| 541|
+-----------------------------------+-----+-----+------+-----+-----+
|Energy and Environmental Technology| 357| 350| 419| 332| 334|
+-----------------------------------+-----+-----+------+-----+-----+
|Paper and Fiber Technology | 359| 356| 406| 364| 494|
+-----------------------------------+-----+-----+------+-----+-----+
|Valmet Automotive | 14| 7| 14| 11| 17|
+-----------------------------------+-----+-----+------+-----+-----+
|Group Head Office and other | -| -| -| -| -|
+-----------------------------------+-----+-----+------+-----+-----+
|Group Head Office and others total | 14| 7| 14| 11| 17|
+-----------------------------------+-----+-----+------+-----+-----+
|Intra Metso net sales | -14| -9| -10| -9| -16|
+-----------------------------------+-----+-----+------+-----+-----+
|Metso total |1,247|1,196| 1,353|1,170|1,370|
+-----------------------------------+-----+-----+------+-----+-----+
+-----------------------------------+-----+-----+------+-----+-----+
+-----------------------------------+-----+----+------+----+----+
|NON-RECURRING ITEMS | | | | | |
+-----------------------------------+-----+----+------+----+----+
|EUR million | 4-6/|7-9/|10-12/|1-3/|4-6/|
| | 2009|2009| 2009|2010|2010|
+-----------------------------------+-----+----+------+----+----+
|Mining and Construction Technology | 4.6|-3.0| 3.4| -|32.4|
+-----------------------------------+-----+----+------+----+----+
|Energy and Environmental Technology| -1.4|-3.2| -5.1|-3.4|-1.6|
+-----------------------------------+-----+----+------+----+----+
|Paper and Fiber Technology |-13.4|-3.5| -20.1|-0.4|-1.6|
+-----------------------------------+-----+----+------+----+----+
|Valmet Automotive | -| -| -| -| -|
+-----------------------------------+-----+----+------+----+----+
|Group Head Office and other | -| -| -| -| -|
+-----------------------------------+-----+----+------+----+----+
|Group Head Office and others total | -| -| -| -| -|
+-----------------------------------+-----+----+------+----+----+
|Metso total |-10.2|-9.7| -21.8|-3.8|29.2|
+-----------------------------------+-----+----+------+----+----+
+-----------------------------------+-----+----+------+----+----+
+-----------------------------------+----+-----+------+----+-----+
|EBITA BEFORE NON-RECURRING ITEMS | | | | | |
+-----------------------------------+----+-----+------+----+-----+
|EUR million |4-6/| 7-9/|10-12/|1-3/| 4-6/|
| |2009| 2009| 2009|2010| 2010|
+-----------------------------------+----+-----+------+----+-----+
|Mining and Construction Technology |42.3| 57.7| 42.2|39.5| 64.8|
+-----------------------------------+----+-----+------+----+-----+
|Energy and Environmental Technology|35.5| 40.3| 37.9|31.8| 29.3|
+-----------------------------------+----+-----+------+----+-----+
|Paper and Fiber Technology |14.8| 35.9| 16.8|18.9| 36.0|
+-----------------------------------+----+-----+------+----+-----+
|Valmet Automotive |-2.6| -5.5| 0.3|-7.1| -1.4|
+-----------------------------------+----+-----+------+----+-----+
|Group Head Office and other |-5.1| 5.9| -9.2| 4.5| -3.7|
+-----------------------------------+----+-----+------+----+-----+
|Group Head Office and others total |-7.7| 0.4| -8.9|-2.6| -5.1|
+-----------------------------------+----+-----+------+----+-----+
|Metso total |84.9|134.3| 88.0|87.6|125.0|
+-----------------------------------+----+-----+------+----+-----+
+-----------------------------------+----+-----+------+----+-----+
+-----------------------------------+----+-----+------+----+-----+
|EBITA | | | | | |
+-----------------------------------+----+-----+------+----+-----+
|EUR million |4-6/| 7-9/|10-12/|1-3/| 4-6/|
| |2009| 2009| 2009|2010| 2010|
+-----------------------------------+----+-----+------+----+-----+
|Mining and Construction Technology |46.9| 54.7| 45.6|39.5| 97.2|
+-----------------------------------+----+-----+------+----+-----+
|Energy and Environmental Technology|34.1| 37.1| 32.8|28.4| 27.7|
+-----------------------------------+----+-----+------+----+-----+
|Paper and Fiber Technology | 1.4| 32.4| -3.3|18.5| 34.4|
+-----------------------------------+----+-----+------+----+-----+
|Valmet Automotive |-2.6| -5.5| 0.3|-7.1| -1.4|
+-----------------------------------+----+-----+------+----+-----+
|Group Head Office and other |-5.1| 5.9| -9.2| 4.5| -3.7|
+-----------------------------------+----+-----+------+----+-----+
|Group Head Office and others total |-7.7| 0.4| -8.9|-2.6| -5.1|
+-----------------------------------+----+-----+------+----+-----+
|Metso total |74.7|124.6| 66.2|83.8|154.2|
+-----------------------------------+----+-----+------+----+-----+
+-----------------------------------+----+-----+------+----+-----+
+-----------------------------------+----+-----+------+----+-----+
|OPERATING PROFIT (LOSS) | | | | | |
+-----------------------------------+----+-----+------+----+-----+
|EUR million |4-6/| 7-9/|10-12/|1-3/| 4-6/|
| |2009| 2009| 2009|2010| 2010|
+-----------------------------------+----+-----+------+----+-----+
|Mining and Construction Technology |46.0| 53.7| 44.2|38.1| 95.7|
+-----------------------------------+----+-----+------+----+-----+
|Energy and Environmental Technology|29.7| 32.9| 27.8|23.5| 22.7|
+-----------------------------------+----+-----+------+----+-----+
|Paper and Fiber Technology |-1.6| 27.6| -7.0|11.3| 27.0|
+-----------------------------------+----+-----+------+----+-----+
|Valmet Automotive |-2.6| -5.5| 0.2|-7.1| -1.4|
+-----------------------------------+----+-----+------+----+-----+
|Group Head Office and other |-5.6| 5.4| -10.2| 3.7| -4.0|
+-----------------------------------+----+-----+------+----+-----+
|Group Head Office and others total |-8.2| -0.1| -10.0|-3.4| -5.4|
+-----------------------------------+----+-----+------+----+-----+
|Metso total |65.9|114.1| 55.0|69.5|140.0|
+-----------------------------------+----+-----+------+----+-----+
+-----------------------------------+----+-----+------+----+-----+
+-----------------------------------+--------+-------+-------+-------+--------+
|CAPITAL EMPLOYED | | | | | |
+-----------------------------------+--------+-------+-------+-------+--------+
|EUR million |June 30,|Sep 30,|Dec 31,|Mar 31,|June 30,|
| | 2009| 2009| 2009| 2010| 2010|
+-----------------------------------+--------+-------+-------+-------+--------+
|Mining and Construction Technology | 1,191| 1,111| 1,072| 1,109| 1,098|
+-----------------------------------+--------+-------+-------+-------+--------+
|Energy and Environmental Technology| 659| 626| 524| 512| 499|
+-----------------------------------+--------+-------+-------+-------+--------+
|Paper and Fiber Technology | 475| 427| 636| 675| 664|
+-----------------------------------+--------+-------+-------+-------+--------+
|Valmet Automotive | 20| 27| 28| 26| 22|
+-----------------------------------+--------+-------+-------+-------+--------+
|Group Head Office and other | 816| 956| 1,108| 921| 1,061|
+-----------------------------------+--------+-------+-------+-------+--------+
|Group Head Office and others total | 836| 983| 1,136| 947| 1,083|
+-----------------------------------+--------+-------+-------+-------+--------+
|Metso total | 3,161| 3,147| 3,368| 3,243| 3,344|
+-----------------------------------+--------+-------+-------+-------+--------+
+-----------------------------------+--------+-------+-------+-------+--------+
+-----------------------------------+-----+-----+------+-----+-----+
|ORDERS RECEIVED | | | | | |
+-----------------------------------+-----+-----+------+-----+-----+
|EUR million | 4-6/| 7-9/|10-12/| 1-3/| 4-6/|
| | 2009| 2009| 2009| 2010| 2010|
+-----------------------------------+-----+-----+------+-----+-----+
|Mining and Construction Technology | 398| 420| 457| 559| 604|
+-----------------------------------+-----+-----+------+-----+-----+
|Energy and Environmental Technology| 278| 250| 504| 356| 384|
+-----------------------------------+-----+-----+------+-----+-----+
|Paper and Fiber Technology | 335| 369| 401| 461| 682|
+-----------------------------------+-----+-----+------+-----+-----+
|Valmet Automotive | 14| 7| 14| 11| 17|
+-----------------------------------+-----+-----+------+-----+-----+
|Group Head Office and other | -| -| -| -| -|
+-----------------------------------+-----+-----+------+-----+-----+
|Group Head Office and others total | 14| 7| 14| 11| 17|
+-----------------------------------+-----+-----+------+-----+-----+
|Intra Metso orders received | -5| -15| -11| -21| -16|
+-----------------------------------+-----+-----+------+-----+-----+
|Metso total |1,020|1,031| 1,365|1,366|1,671|
+-----------------------------------+-----+-----+------+-----+-----+
+-----------------------------------+-----+-----+------+-----+-----+
+-----------------------------------+--------+-------+-------+-------+--------+
|ORDER BACKLOG | | | | | |
+-----------------------------------+--------+-------+-------+-------+--------+
|EUR million |June 30,|Sep 30,|Dec 31,|Mar 31,|June 30,|
| | 2009| 2009| 2009| 2010| 2010|
+-----------------------------------+--------+-------+-------+-------+--------+
|Mining and Construction Technology | 1,196| 1,103| 1,041| 1,182| 1,310|
+-----------------------------------+--------+-------+-------+-------+--------+
|Energy and Environmental Technology| 1,035| 939| 1,032| 1,073| 1,159|
+-----------------------------------+--------+-------+-------+-------+--------+
|Paper and Fiber Technology | 1,304| 1,330| 1,380| 1,516| 1,759|
+-----------------------------------+--------+-------+-------+-------+--------+
|Valmet Automotive | -| -| -| -| -|
+-----------------------------------+--------+-------+-------+-------+--------+
|Group Head Office and other | -| -| -| -| -|
+-----------------------------------+--------+-------+-------+-------+--------+
|Group Head Office and others total | -| -| -| -| -|
+-----------------------------------+--------+-------+-------+-------+--------+
|Intra Metso order backlog | -23| -32| -38| -51| -52|
+-----------------------------------+--------+-------+-------+-------+--------+
|Metso total | 3,512| 3,340| 3,415| 3,720| 4,176|
+-----------------------------------+--------+-------+-------+-------+--------+
+-----------------------------------+--------+-------+-------+-------+--------+
+-----------------------------------+--------+-------+-------+-------+--------+
|PERSONNEL |June 30,|Sep 30,|Dec 31,|Mar 31,|June 30,|
| | 2009| 2009| 2009| 2010| 2010|
+-----------------------------------+--------+-------+-------+-------+--------+
|Mining and Construction Technology | 10,344| 10,014| 9,541| 9,550| 9,787|
+-----------------------------------+--------+-------+-------+-------+--------+
|Energy and Environmental Technology| 6,349| 6,119| 6,060| 5,873| 6,114|
+-----------------------------------+--------+-------+-------+-------+--------+
|Paper and Fiber Technology | 9,858| 9,475| 10,459| 10,326| 10,526|
+-----------------------------------+--------+-------+-------+-------+--------+
|Valmet Automotive | 636| 636| 679| 705| 723|
+-----------------------------------+--------+-------+-------+-------+--------+
|Group Head Office and other | 421| 419| 427| 494| 515|
+-----------------------------------+--------+-------+-------+-------+--------+
|Group Head Office and others total | 1,057| 1,055| 1,106| 1,199| 1,238|
+-----------------------------------+--------+-------+-------+-------+--------+
|Metso total | 27,608| 26,663| 27,166| 26,948| 27,665|
+-----------------------------------+--------+-------+-------+-------+--------+
Notes to the Interim Review
We have prepared this Interim Review in accordance with IAS 34 'Interim
Financial Reporting'. The same accounting policies have been applied as in the
annual financial statements. This Interim Review is unaudited.
New accounting standards
IFRS 9
IASB has published a new standard IFRS 9 'Financial instruments: Recognition and
measurement'. The standard represents the first milestone in the IASB's planned
replacement of IAS 39. It addresses classification and measurement of financial
assets. The next steps involve reconsideration and re-exposure of the
classification and measurement requirements for financial liabilities,
impairment testing methods for financial assets, and development of enhanced
guidance on hedge accounting. We are currently evaluating the effects on our
financial statements, and expect the standard to have major impacts on the
accounting of financial instruments.
IFRS 9 becomes effective for the financial statements or periods beginning after
January 1, 2013. It is still subject to endorsement by the European Union, and
the endorsement process has been postponed.
Provided that the standard has received endorsement by the European Union, we
will apply the standard for the financial year beginning on January 1, 2013.
Decisions of the Annual General Meeting
Our Annual General Meeting (AGM) on March 30, 2010 approved the Financial
Statements for 2009 and decided to discharge the members of the Board of
Directors and the President and CEO from liability for the financial year 2009.
The AGM approved the proposals of the Board to authorize the Board to resolve on
a repurchase of Metso's own shares, on share issue and granting of special
rights and on donations to universities. The AGM also approved the proposal to
amend Article 8 (notice convening a meeting) of the Articles of Association. On
the basis of the decision made by the AGM, Metso granted a donation of EUR 1.9
million to Aalto University Foundation in June.
The AGM decided that a dividend of EUR 0.70 per share will be paid for 2009. The
dividend was paid on April 13, 2010.
The AGM elected Jukka Viinanen Chairman of the Board and Maija-Liisa Friman Vice
Chairman of the Board. Erkki Pehu-Lehtonen and Mikael von Frenckell were elected
as new members of the Board. The Board members re-elected were Christer Gardell,
Yrjö Neuvo and Pia Rudengren. The term of office of Board members lasts until
the end of the next Annual General Meeting.
The AGM decided that the annual remunerations for Board members would be EUR
92,000 for the Chairman, EUR 56,000 for the Vice Chairman and EUR 45,000 for the
members and that they be paid EUR 600 for each meeting they attend, including
committee meetings. The AGM decided that 40 percent of the fixed annual
remuneration be paid in Metso Corporation shares purchased from the market and
that the shares will be purchased directly on behalf of the Board members within
two weeks of the release of the Interim Review January 1-March 31, 2010.
Accordingly, a total of 5,580 shares were purchased in the beginning of May
2010.
The auditing company, Authorized Public Accountants PricewaterhouseCoopers Oy,
was re-elected as our Auditor until the end of the next AGM.
The AGM decided to establish a Nomination Committee of the AGM to prepare
proposals for the following AGM regarding the composition of the Board and
director remuneration. Representatives of the four biggest shareholders will be
elected to the Nomination Committee on November 1, and the Chairman of the Board
shall be an expert member of the committee.
Members of Metso Board Committees and personnel representatives
Our Board elected members from among the Board for the Audit Committee and
Remuneration and HR Committee at its assembly meeting on March 30, 2010. The
Board's Audit Committee consists of Pia Rudengren (Chairman), Maija-Liisa Friman
and Erkki Pehu-Lehtonen. The Board's Remuneration and HR Committee consists of
Jukka Viinanen (Chairman), Mikael von Frenckell, Christer Gardell and Yrjö
Neuvo.
Metso's personnel groups in Finland have elected Jukka Leppänen as the personnel
representative. He participates in the meetings of our Board of Directors as an
invited external expert, and his term of office is the same as the Board
members' term.
Shares and share capital
At the end of June 2010, our share capital was EUR 240,982,843.80 and the number
of shares was 150,348,256. The number of shares includes 716,904 Metso shares
held by the parent company, which represent 0.5 percent of all the shares and
votes. The average number of shares outstanding in the first half of 2010,
excluding Metso shares held by the Parent Company, was 149,735,400 and the
average number of diluted shares was 149,838,466.
During February-March 2010, we executed a repurchase of 300,000 of our own
shares relating to our share-based management incentive program decided on in
October 2009 (Metso Share Ownership Plan 2010-2012). The average purchase price
of the shares was EUR 23.47 and the total amount EUR 7,040,303.60.
During the first half of the year, 7,287 shares were returned from Metso Share
Ownership Plan participants to the Parent Company due to employment
terminations.
Our market capitalization, excluding Metso shares held by the Parent Company,
was EUR 3,968 million on June 30, 2010.
Metso is not aware of any valid shareholders' agreements regarding the ownership
of Metso shares or voting rights.
Share-based incentive plans
Metso's share ownership plans are part of the remuneration and commitment
program for the management of the Group and the businesses. For further
information, see www.metso.com/investors
Share ownership plan (SOP) for 2009-2011
In October 2008, the Board of Directors approved a new share ownership plan for
the years 2009-2011. The SOP includes one three-year earnings period and
required participants' personal investment in Metso shares at the beginning of
the program. Any possible reward from the plan requires continued employment
with Metso and reaching the financial targets set for the plan. The SOP has
about 90 participants and the rewards paid correspond to a maximum of around
370,000 Metso shares. The plan will not have a diluting effect on the share
value. Members of the Executive Team may receive a maximum of 77,400 shares as
share rewards.
Share ownership plan (SOP) for 2010-2012
In October 2009, the Board of Directors approved a similar kind of share
ownership plan for the years 2010-2012. The plan includes one three-year
earnings period and required participants' personal investment in Metso shares.
Any possible reward from the plan required continued employment with Metso and
reaching the financial targets set for the plan. The program has about 90
participants and the rewards paid correspond to a maximum of around 340,000
Metso shares. The plan will not have a diluting effect on the share value.
Members of the Executive Team may receive a maximum of 77,400 shares as share
rewards.
Trading of Metso shares
The number of Metso Corporation shares traded on the NASDAQ OMX Helsinki
Exchange during January-June was 127,765,419 shares, equivalent to a turnover of
EUR 3,239 million. The price of the Metso share on June 30, 2010 was EUR 26.52
and the average trading price for the period was EUR 25.35. The highest
quotation during the review period was EUR 30.00 and the lowest EUR 20.91.
Metso's ADSs (American Depositary Shares) are traded in the United States on the
OTC market. On June 30, 2010, the closing price of an ADS was USD 32.31. Each
ADS represents one share.
Disclosures of changes in holdings
There were no notifications on changes in holdings in Metso shares during
January-June 2010.
On July 15, 2010, Marathon Asset Management LLP announced that on July 12, 2010
the Marathon Asset Management LLP holding in shares of Metso fell below the 5
percent threshold. The holding amounted to 7,437,730 shares, which corresponds
to 4.95 percent of the total amount of shares and votes in Metso Corporation.
Out of this holding, Marathon Asset Management LLP was in possession of
5,573,661 shares to which they had voting rights. This represents 3.71 percent
of the total voting rights in Metso.
BlackRock Investment Management (UK) Limited announced that on February
24, 2010 the BlackRock, Inc. holding in shares of Metso amounted to 7,563,054
shares, which corresponds to 5.03 percent of the total amount of shares and
votes in Metso Corporation.
BlackRock Investment Management (UK) Limited announced that on March 19, 2010
the BlackRock, Inc. holding in shares of Metso Corporation fell below the 5 per
cent threshold. The holding amounted to 7,298,453 shares, which corresponds to
4.85 percent of the total amount of shares and votes in Metso Corporation.
Credit ratings
There were no changes in Metso's credit ratings during the first half of 2010
and they have remained unchanged since February 2009.
Moody's Investor's Service confirmed our Baa2 long-term credit rating with
negative outlook in November 2009. Standard and Poor's Rating Services confirmed
our BBB long-term credit rating with negative outlook as well as our A-3
short-term rating in June 2010.
Metso's financial reporting during the rest of 2010 and in 2011
The Interim Review for January-September 2010 will be published on October
28, 2010.
Metso's Financial Statement Review for 2010 will be published on February
3, 2011. The Annual Report will be published in the week starting on March
7, 2011 (week 10). The Interim Review for January - March 2011 will be published
on April 29, 2011, the Interim Review for January - June 2011 on July 28, 2011
and the Interim Review for January - September 2011 on October 27, 2011
respectively.
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 27,000 employees in more than 50 countries.
www.metso.com
Further information, please contact:
Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 (0)204 84 3000
Olli Vaartimo, Executive Vice President and CFO, Metso Corporation, tel. +358
(0)204 84 3010
Johanna Henttonen, Vice President, Investor Relations, Metso Corporation, tel.
+358 (0)204 84 3253
Metso Corporation
Olli Vaartimo
Executive Vice President and CFO
Johanna Henttonen
Vice President, Investor Relations
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com