Metso's Interim Review for January 1 - September 30, 2013
Metso Corporation's stock exchange release on October 24, 2013 at 12:00 p.m. local time
We will arrange a news conference on Metso's January-September 2013 Interim Review for the media, investors and analysts, in Helsinki today. The event takes place at Metso Group Head Office, Fabianinkatu 9 A, Helsinki, Finland. A News conference in English will be arranged at 15:00 EEST / Helsinki time (08:00 EDT / New York, 13:00 BST / London, 14:00 CEST / Paris). The news conference can also be followed through a live webcast at www.metso.com/irwebcasts and through a conference call. Questions are accepted via conference call. Details of the event can be found at the end of this release.
This is a summary of Metso's January-September 2013 Interim Review. Complete report is attached to this release as a pdf-file and is also available at www.metso.com/investors.
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period last year.
Highlights of the third quarter 2013:
- Order intake totaled EUR 1,249 million (EUR 1,511 million), which was 17 percent, or 11 percent using comparable exchange rates, lower than in the comparison period. Orders received by the services business were down 15 percent, or 8 percent using comparable exchange rates, on the comparison period, and totaled EUR 709 million, i.e. 59 percent of all orders received (EUR 830 million and 57%).
- Net sales totaled EUR 1 579 million (EUR 1 754 million), down by 10 percent, or 4 percent using comparable exchange rates. Services net sales were 3 percent down, and 4 percent up using comparable exchange rates, compared to those booked during the same quarter last year. Services sales totaled EUR 762 million and accounted for 50 percent of total net sales (EUR 788 million and 46%).
- Earnings before interest, tax and amortization (EBITA), before non-recurring items, were EUR 143 million, i.e. 9.1 percent of net sales (EUR 171 million and 9.8%) The decline was mainly due to lower profitability at Valmet Automotive.
- Earnings per share were EUR 0.39 (EUR 0.73).
- Free cash flow was EUR 95 million (EUR 118 million).
Our guidance for Metso's 2013 financial performance
We repeat our guidance for 2013 financial performance, which was published on October 17, 2013 and at the time lowered from previous guidance given in our January-June Interim Review on July 25, 2013. Lowering was primarily resulting from lower profitability at the separate business entity Valmet Automotive during the second half of the year.
Our guidance for 2013:
We estimate that our net sales and EBITA before non-recurring items in 2013 will be significantly lower than those in 2012.
The previous guidance, published on July 25, 2013:
We estimate that our net sales and EBITA before non-recurring items in 2013 will be somewhat lower than those in 2012.
Both statements above are related to Metso's current segment reporting and are based on the economic situation, market outlook, order backlog for 2013, and foreign exchange rates remaining similar to those at the time of publishing.
In addition to the updated guidance for the group, we published the following additional segment information for 2013:
- Mining and Construction segment: Net sales are expected to be somewhat lower and EBITA before non-recurring items at around the same level compared to 2012
- Automation segment: Net sales are expected to be at around the same level and EBITA before non-recurring items is expected to improve significantly compared to 2012
- Pulp Paper and Power segment (businesses to be demerged from Metso): Both net sales and EBITA before non-recurring items are expected to be significantly lower compared to 2012. Net sales and EBITA before non-recurring items during the second half are expected to be at about the first half's level.
- Valmet Automotive is expected to book a substantial loss for 2013.
Metso plans to publish separate guidance statements for its continuing operations and Valmet Corporation during the fourth quarter.
Metso's President and CEO Matti Kähkönen comments on the third quarter:
The third quarter was somewhat mixed. We were able to improve the profitability of the Mining and Construction and Automation segments, despite continued soft demand for larger equipment and project orders, thanks to improved productivity and a resilient services business, which also supported a favorable delivery mix. Pulp, Paper and Power booked satisfactory quarterly EBITA. However, work continues to improve its profitability. Significant negative development was seen at Valmet Automotive and corrective actions have been taken.
The demerger project has progressed according to plan and shareholders approved the demerger of the Pulp, Paper and Power businesses to the new Valmet Corporation in the Extraordinary General Meeting in October.
Metso's key figures
| EUR million | Q3/ 2013 | Q3/ 2012 | Change % | Q1-Q3/ 2013 | Q1-Q3/ 2012 | Change % | 2012 |
| Orders received | 1,249 | 1,511 | -17 | 4,716 | 5 166 | -9 | 6,865 |
| Orders received of services business | 709 | 830 | -15 | 2,388 | 2 523 | -5 | 3,264 |
| % of orders received * | 59 | 57 | 52 | 51 | 49 | ||
| Order backlog at end of period | 3,736 | 5 031 | -26 | 4,515 | |||
| Net sales | 1,579 | 1,754 | -10 | 4,925 | 5 406 | -9 | 7,504 |
| Net sales of services business | 762 | 788 | -3 | 2,268 | 2,304 | -2 | 3,174 |
| % of net sales * | 50 | 46 | 47 | 44 | 44 | ||
| Earnings before interests, tax and amortization (EBITA) and non-recurring items | 142.9 | 171.4 | -17 | 416.6 | 490.8 | -15 | 687.5 |
| % of net sales | 9.1 | 9.8 | 8.5 | 9.1 | 9.2 | ||
| Operating profit | 90.2 | 157.7 | -43 | 306.3 | 451.4 | -32 | 601.7 |
| % of net sales | 5.7 | 9.0 | 6.2 | 8.3 | 8.0 | ||
| Earnings per share, EUR | 0.39 | 0.73 | -47 | 1.21 | 1.98 | -39 | 2.46 |
| Free cash flow | 95 | 118 | -19 | 149 | 188 | -21 | 257 |
| Return on capital employed (ROCE) before taxes, annualized % | 12.8 | 20.2 | 19.7 | ||||
| Equity to asset ratio at end of period, % | 38.7 | 41.8 | 40.5 | ||||
| Net gearing at end of period, % | 24.0 | 16.7 | 14.2 | ||||
| *Excluding Valmet Automotive |
Short-term outlook
Market development
Many of our customer industries continue to be characterized by a weaker investment appetite compared to previous year. Although some initial positive signs have been seen at the macro economic level, these have not had a material impact on our businesses.
Mining and Construction and Automation segments:
We expect demand for mining equipment to remain satisfactory. Due to our large installed equipment base and our stronger services presence, we expect demand for our mining services to remain good.
Demand for construction equipment and related services is projected to remain satisfactory.
Demand for our process automation systems is expected to remain satisfactory, whereas demand for flow control products and related services is expected to remain good.
Pulp, Paper and Power segment (businesses to be separated in the demerger):
In the Services business, demand is expected to remain satisfactory.
In the Pulp and Energy business, demand for pulp mills and rebuilds is expected to remain satisfactory, while that for power plants based on renewable energy sources is expected to remain weak.
In the paper business, structural change in the paper industry is likely to continue and demand for papermaking lines is expected to remain weak.
Metso is a global supplier of technology and services to customers in the process industries, including mining, construction, pulp and paper, power, and oil and gas. Our 30,000 professionals based in over 50 countries contribute to sustainability and deliver profitability to customers worldwide. Metso's shares are listed on the NASDAQ OMX Helsinki Ltd.
www.metso.com, www.twitter.com/metsogroup
For further information, please contact:
Matti Kähkönen, President and CEO, Metso Corporation, tel. +358 20 484 3000
Harri Nikunen, CFO, Metso Corporation, tel. +358 20 484 3010
Juha Rouhiainen, VP, Investor Relations, Metso Corporation, tel. +358 20 484 3253
Metso Corporation
Harri Nikunen
CFO
Juha Rouhiainen
VP, Investor Relations
Invitation to news conference for investors, analysts and media
Metso will arrange a news conference for media, investors and analysts in Helsinki on Thursday, October 24, 2013 at:
08:00 EDT / New York
13:00 BST / London
14:00 CEST / Paris
15:00 EEST / Helsinki
The event will take place at Metso Group Head Office, Fabianinkatu 9 A, Helsinki, Finland.
This conference can also be followed through a live webcast at www.metso.com/IRwebcasts and a conference call from 3:00 p.m. local time onwards. Questions are accepted during the event via conference call.
Due to live webcast, we kindly ask those attending to be present 5 minutes prior to the start of the event.
Conference call details
Conference call participants are requested to dial in five minutes before the scheduled time at:
- US: +1 877 491 0064
- other countries: +44 20 7162 0077
- access code: 927 192
A replay of the call will be available for two weeks until November 7, 2013 on the following phone numbers:
- US: +1 954 334 0342
- other countries: +44 20 7031 4064
- access code 927 192
An audio file (mp3) and a transcript of the event will be made available for downloading at www.metso.com/IRwebcasts on Monday, October 28, 2013 the latest.
The presentation material will be available after the publication of the Interim Review on October 24, 2013 at www.metso.com/investors at approximately 12.00 noon local time (EEST).
Welcome!
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com