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Management Side
Technical Side
Metso's Interim Review
Print
Helsinki, Finland, 27 April 2007 -- Metso announces the following highlights of its first quarter of 2007:

New orders worth EUR 1,664 million were received in January-March, i.e. 16% more than in the corresponding period last year (EUR 1437 million in Q1/06).

The order backlog grew by 7% from the end of 2006 and was EUR 3999 million at the end of March (EUR 3737 million on 31 December 2006).

Net sales increased by 27% and totaled EUR 1366 million (EUR 1078 million in Q1/06).

Earnings before interest, taxes, and amortization (EBITA) were EUR 121.9 million, i.e. 8.9% of net sales (EUR 99.9 million and 9.3% in Q1/06).

Operating profit (EBIT) was EUR 108.4 million, i.e. 7.9% of net sales (EUR 95.4 million and 8.8% in Q1/06).

Earnings per share were EUR 0.50 (EUR 0.47 in Q1/06).

Free cash flow was EUR 97 million (EUR 152 million in Q1/06).

Return on capital employed (ROCE) was 20.7% (20.2% in Q1/06).

"Metso's January–March order intake was strong, and our order backlog has further strengthened from the record-high year-end figures. This, together with the continuing favorable market outlook, gives us confidence about the rest of the year and beyond," says Jorma Eloranta, president and CEO, Metso Corporation.

Eloranta notes that Metso's financial performance was solid despite seasonal factors that are typical for the first quarter. "Our net sales grew significantly over the same period in 2006. Much of the growth is due to our expanded business scope, i.e. the acquisition of the Pulping and Power businesses, but even organically we delivered some 10% growth. Also, our operating profit improved on the first quarter of 2006."

Eloranta says that Metso's outlook for 2007 continues to be favorable. "The financial performance for the rest of the year is expected to be stronger than in the first quarter of 2007. Furthermore, we repeat our estimate that our net sales will grow by more than 20% on 2006 and that the operating profit will clearly improve."

Short-term outlook

The favorable market outlook for Metso's products and services is expected to continue for the rest of 2007.

Metso Paper's market situation is estimated to continue much the same as in the year's first quarter. The demand for paper, board, and tissue machines and for fiber lines is expected to be satisfactory. The demand for power plants is estimated to be good. Also, the demand for Metso Paper's aftermarket services is expected to remain satisfactory.

Metso Minerals' favorable market outlook is expected to continue. The demand is anticipated to remain at the first quarter's excellent level in the mining and metals recycling industries, and at a good level in the construction industry. The demand for aftermarket services is expected to remain excellent.

Metso Automation's market outlook in the pulp and paper customer segment is estimated to be good. In the power, oil, and gas industries, the demand is expected to be good in process automation systems and excellent in flow control systems.

It is estimated that Metso's financial performance for the rest of the year will be stronger than in the first quarter. Metso's net sales in 2007 are estimated to grow by more than 20% on 2006, thanks to the strong order backlog, continuing favorable market situation, and the expanded business scope. The operating profit in 2007 is estimated to clearly improve. It is estimated that the operating profit margin in 2007 will be slightly below Metso's target, which is over 10%. This is primarily due to the high first-year amortization of intangible assets, integration costs, and only partially materializing synergy benefits related to the acquisition of the Pulping and Power businesses.

The estimates concerning financial performance are based on Metso's current structure, order backlog, and market outlook.

Metso's Interim Review for January–June will be published on 26 July 2007,and the Interim Review for January–September will be published 25 October 2007.

Metso is a global engineering and technology corporation with 2006 net sales of approximately EUR 5 billion. Its 25,500 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry, and selected other industries.

For more information, visit www.metso.com.



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