Metso's Interim Review January 1 - March 31, 2017

Metso's Interim Review January 1 - March 31, 2017
Metso Corporation, Stock exchange release, April 25, 2017 at 09:00 a.m. EEST
 
Metso will arrange a results audiocast today at 1:00 p.m. EEST. The audiocast is viewable at www.metso.com/latestreports. A simultaneous conference call will be arranged, allowing participants to ask questions.

This is a summary of Metso's January-March 2017 Interim Review. The complete report is attached to this release and is also available at www.metso.com/latestreports.

Figures in brackets refer to the corresponding period in 2016, unless otherwise stated.

First-quarter 2017 in brief (compared to the first quarter of 2016)

Metso's overall trading conditions are expected to be better than in 2016 (previously: slightly better). Demand for our products and services in 2017 is expected to develop as follows:              

      ·  Market activity increased, especially in the services businesses

      ·  Orders received increased 11 percent and totaled EUR 733 million (EUR 663 million). Services orders increased 15 percent to EUR 496 million (EUR 433 million)

      ·  Sales grew 8 percent to EUR 648 million (EUR 601 million). Services sales increased 3 percent and totaled EUR 423 million (EUR 409 million)

      ·  Adjusted EBITA improved to EUR 66.4 million, or 10.2 percent of sales (EUR 55.7 million, or 9.3%)

      ·  Free cash flow was EUR 39 million (EUR 62 million)

      ·  Balance sheet remains strong with net gearing at -4.7 percent (-1.8% at the end of 2016)

       

Outlook for 2017 (changes in brackets)

Metso's overall trading conditions are expected to be better than in 2016 (previously: slightly better). Demand for our products and services in 2017 is expected to develop as follows:              

      ·  Remain weak for mining equipment, while improving to good for mining services
(previously: weak for mining equipment and satisfactory for mining services)

      ·  Remain good for aggregates equipment and services

      ·  Improve to good for Flow Control products related to customers' new investments and services (previously: both were satisfactory)

At the end of March 2017, our backlog for 2017 totaled approximately EUR 1.2 billion. In the current market conditions, we continue to expect some postponements to planned delivery timetables. Negative adjustment items from restructuring programs initiated in 2016 are expected to be EUR 10-15 million. Capital expenditure excluding acquisitions is expected to increase compared to 2016, but to remain below depreciation and amortization.

President and CEO Matti Kähkönen:

We were pleased to see the market activity in our customer industries improving in the first quarter. This could be seen in an increased order intake for both Minerals and Flow Control compared to the first quarter of last year as well as quarter-on-quarter. In aggregates, we continued to see good activity in the United States and Europe, and other markets recovered from the low levels seen in the previous years. Flow Control services saw increased activity in both oil & gas and pulp & paper. The mining market has recovered gradually and we saw a better activity in the services business during the quarter. The somewhat brighter outlook in the mining industry is less visible in the equipment business, even though there is some optimism in discussions with customers.

Our sales grew 8 percent during the quarter, which resulted largely from the equipment business in the Minerals segment. Higher services orders will support sales during the next quarters. Profitability of the Minerals segment improved, but was somewhat diluted by sales mix and increased raw material prices. Flow Control's performance was good and this is expected to continue going forward.        

This year's big themes for Metso are growth and digitalization. All of our businesses have robust plans to accelerate organic growth and our financial position also enables us to actively explore acquisition opportunities. During the first quarter, we launched the Metso Digital Program, which is designed to take us to a new level in the digital capabilities required to succeed and grow in our businesses. We focus on digitalization in very practical ways, for instance, using the Internet-of-Things (IoT) and analytics-based tools to help our customers make the most of their assets and improve performance.

Key figures

EUR million	Q1/2017	Q1/2016	Change %	2016
Orders received	733	663	11	2,724
Orders received by the services business	496	433	15	1,741
% of orders received	68	65		64
Order backlog at the end of the period	1,396	1,300	7	1,320
Sales	648	601	8	2,586
Sales of the services business	423	409	3	1,703
% of sales	65	68		66
Earnings before interest, tax and amortization (EBITA), adjusted	66.4	55.7	19	274.0
% of sales	10.2	9.3		10.6
Operating profit	59.4	50.4	18	227.1
% of sales	9.2	8.4		8.8
Earnings per share, EUR	0.23	0.18	28	0.87
Free cash flow	39	62	-37	339
Return on capital employed (ROCE) before tax, annualized, %	11.1	9.4		10.4
Equity-to-asset ratio at the end of the period, %	43.7	43.9		48.0
Net gearing at the end of the period, %	-4.7	6.9		-1.8
Personnel at the end of the period	11,453	12,386	-8	11,542

Metso is a world leading industrial company serving the mining, aggregates, recycling, oil, gas, pulp, paper and process industries. We help our customers improve their operational efficiency, reduce risks and increase profitability by using our unique knowledge, experienced people and innovative solutions to build new, sustainable ways of growing together.

Our products range from mining and aggregates processing equipment and systems to industrial valves and controls. Our customers are supported by a broad scope of services and a global network of over 80 service centers and about 6,000 services professionals. Metso has an uncompromising attitude towards safety.

Metso is listed on the NASDAQ OMX Helsinki, Finland, and had sales of about EUR 2.6 billion in 2016. Metso employs over 11,000 persons in more than 50 countries. Expect results.

www.metso.com, twitter.com/metsogroup

For further information, please contact:
Matti Kähkönen, President and CEO, Metso Corporation, tel. +358 20 484 3000
Eeva Sipilä, CFO, Metso Corporation, tel. +358 20 484 3010
Juha Rouhiainen, VP, Investor Relations, Metso Corporation, tel. +358 20 484 3253                 
                                  
Metso Corporation
Eeva Sipilä
CFO

Juha Rouhiainen
VP, Investor Relations

Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com

Conference call details
Conference call participants are requested to dial in five minutes before the scheduled time on:
United States: +1 719 325 2385
other countries: +44 330 336 9105

The confirmation code for joining the conference call is 8897870.

A recording of the event is available at www.metso.com/latestreports at the earliest after the event has finished and a transcript of the event will be available.