Highlights of the first quarter of 2012
• Solid development in all our strategic priority areas; services, emerging markets and mining.
• New orders worth EUR 1,920 million were received in January–March, i.e. 4 percent more than in the comparison period (EUR 1,847 million). Orders received by the services business increased 4 percent and were EUR 881 million, i.e. 48 percent of all orders received (EUR 848 million and 48%).
• Net sales increased 22 percent on the comparison period and were EUR 1,755 million (EUR 1,444 million). Our services business net sales were up 13 percent, totaling EUR 721 million and accounting for 43 percent of total net sales (EUR 640 million and 46%).
• Earnings before interest, tax and amortization (EBITA), before non-recurring items, increased 14 percent and were EUR 140.4 million, i.e. 8.0 percent of net sales (EUR 123.6 million and 8.6%).
• Earnings per share were EUR 0.56 (EUR 0.49).
• Free cash flow was EUR 116 million (EUR 68 million).
Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period in the previous year.
Metso’s President and CEO Matti Kähkönen comments on the first quarter:
“We continued to see good demand in most of our customer industries during the first quarter, which translated into a strong order intake of EUR 1.9 billion. All of our strategic priority areas –services, emerging markets and mining – recorded strong development. Organic growth in net sales continued to be strong, at more than 20 percent compared to the first quarter of 2011. Our EBITA before non-recurring items rose to EUR 140 million. This was despite temporarily lower profitability in the Automation segment in January and February. Going forward, the market for paper and board machines is expected to remain weak due to low demand in China, whereas our other businesses expect better demand broadly in line with the first quarter. Our strong order backlog puts us in a good position to meet our guidance for 2012.”
Demand has been healthy in most of our customer industries in recent months, with some variation between different customer industries and geographic areas. We estimate that the operating environment in emerging markets will continue to be good in most of our customer industries. We anticipate that most of our customer industries will continue to utilize their capacity at a good or satisfactory level, thereby supporting our services business.
We expect underlying demand in the mining market to remain good. Due to expected high utilization rates at mines and our large installed equipment base, we expect demand for our mining services to remain excellent.
Demand for construction equipment is projected to remain good in the Asia-Pacific region and Brazil. We anticipate that demand for equipment used in aggregates processing by the construction industry in Europe and in North America will stay at the current relatively low level going forward. We estimate that demand for our construction industry services will remain satisfactory.
We estimate that demand for our automation products will continue to be good, although activity in the pulp and paper industry is anticipated to slow somewhat. We expect demand for our automation solution services to remain good.
We expect the market for pulp mills to remain satisfactory, with demand for rebuilds and services remaining good.
Demand for papermaking lines is expected to be weak. Capacity utilization rates in the paper and board industry are expected to remain sufficient to keep demand for our services at a good level.
Demand for power plants that use renewable energy sources is expected to remain satisfactory, while demand for power plant services is anticipated to be good.
In line with our earlier statement and assuming that current demand in our customer industries does not clearly weaken due to the European economic situation or other similar factors, we estimate that our net sales for 2012 will grow compared to 2011 and that our profit (EBITA before non-recurring items) will improve.
The estimates for our financial performance in 2012 are based on Metso’s current market outlook, strong order backlog for 2012 and business scope, as well as on foreign exchange rates remaining similar to those in March 2012.
Matti Kähkönen, President and CEO, Metso Corporation, T: +358 20 484 3000
Harri Nikunen, CFO, Metso Corporation, T: +358 20 484 3010
Juha Rouhiainen, VP, Investor Relations, Metso Corporation, T: +358 20 484 3253
Invitation to news conferences
Metso (metso.com) will hold a news conference for media, investors and analysts in Helsinki on Thursday, April 26, 2012 at 15:00 EEST / Helsinki, 08:00 EST / New York, 13:00 BST / London, 14:00 CEST / Paris. The event will take place at Metso Group Head Office, Fabianinkatu 9 A, Helsinki, Finland. The news conference will be in English.
The news conference can also be followed through a live webcast at metso.com/irwebcasts or through a simultaneously arranged conference call. It will be possible to ask questions during the event through a conference call lines.
Due to the live webcast, we are kindly asking those attending the news conference to be present 5 minutes prior the start of the event.
Conference call details
Conference call participants are requested to dial in a few minutes prior to the start of the teleconference
US: +1 334 323 6201
other countries: +44 20 7162 0077
access code: 910 752
A replay will be available for 14 days until May 10, 2012 on the following phone numbers:
US: +1 954 334 0342
other countries: +44 20 7031 4064
access code 910 752
After the news conference there will be an audio file (mp3) available for downloading and at the latest on Friday, April 27, a transcript of the event at metso.com/Investors. The presentation material will be available at metso.com/Investors.