Metso Corporation`s stock exchange release on July 23, 2015 at 12:00 noon local time
Metso will arrange a results audiocast todayat 15:00 EEST (8:00 EDT, 13:00 BST, 14:00 CEST). The audiocast is viewable at www.metso.com/latestreports. A simultaneous conference call will be arranged, allowing participants to ask questions. You can also send your written questions during the audiocast via chat function.
Recording of the event is available at the earliest after the event has finished and a transcript will be available for downloading.
This is a summary of Metso`s January-June 2015 Interim Review. Complete report is attached to this release as a pdf-file and is also available at www.metso.com/latestreports.
Figures in brackets refer to the corresponding period in 2014, unless otherwise stated. The Process Automation Systems (PAS) business was divested on April 1, 2015, and is not included in the Flow Control segment`s figures for April-June 2015. Figures for January-June 2015 and all comparison periods prior to the divestment include PAS. Like-for-like comparisons are made with a separate note.
Second quarter 2015 in brief
Demand related to customers` capital investment projects continues to be soft, while services demand remains stable.
Orders received EUR 823 million (EUR 947 million, or EUR 833 million excluding PAS), of which EUR 495 million (EUR 534 million, or EUR 500 million excluding PAS) were services orders.
Net sales EUR 756 million (EUR 962 million, or EUR 884 million excluding PAS), of which EUR 483 million services (EUR 507 million, or EUR 477 million excluding PAS).
EBITA before non-recurring items EUR 94 million and 12.4% of net sales (EUR 131 million and 13.6%, or EUR 121 million and 13.7% excluding PAS).
An initial gain on disposal of about EUR 258 million was booked from the sale of PAS, resulting in operating profit of EUR 347 million for the quarter (EUR 102 million).
Updated financial guidance for 2015 Our guidance for 2015 (originally published on February 5, 2015) has been updated. We estimate that our net sales, excluding the Process Automation Systems business, in 2015 will be between EUR 3,000 million and EUR 3,200 million (previously between 3,000 and 3,300) and that our EBITA margin before non-recurring items will be around 12.5 percent (12.0-13.0%), previously around 13 percent (12.5-13.5%).
The updated guidance for 2015 is based on the current market activity in our customer industries, our current backlog and the current exchange rates.
President and CEO Matti Kähkönen: The demand and outlook in our customer industries remained unchanged in the second quarter compared to the first months of the year. Our like-for-like order intake in the second quarter was one percent behind the comparison period, even though the situation in our end markets is more challenging. This was thanks to the few large mining equipment orders we booked during the quarter. While we are happy having received these it should not be read as a sign of recovery.
The softening of the oil & gas market has had only slight impact on our valve business, , primarily due to our position in specialized areas in mid and downstream markets. In addition, the demand for pulp & paper valves and mining pumps was good in the second quarter, which helped to mitigate the softness seen in the oil industry.
In terms of results, Flow Control continues to perform well and shows good margin development resulting from sales growth and cost control. Minerals still suffers from rapidly declining volumes in the equipment business, and our right-sizing efforts will continue there. The services business continues to prove its resilience but we are taking more action to grow the business towards the end of the year and beyond.
Key figures
EUR million
Q2/ 2015
Q2/ 2014
Change %
Q1-Q2/ 2015
Q1-Q2/ 2014
Change %
2014
Orders received
823
947
-13
1,622
1,822
-11
3,409
Orders received by the services business
495
534
-7
1,037
1,079
-4
2,052
% of orders received
60
56
64
59
60
Order backlog at the end of the period
1,411
1,938
-27
1,575
Net sales
756
962
-21
1,543
1,779
-13
3,658
Net sales of the services business
483
507
-5
953
945
1
2,007
% of net sales
64
53
62
53
55
Earnings before interest, tax and amortization (EBITA) and non-recurring items
94
131
-28
164
219
-25
460
% of net sales
12.4
13.6
10.6
12.3
12.6
Operating profit*
347
102
241
412
178
131
351
% of net sales
45.9
10.6
26.7
10.0
9.6
Earnings per share, EUR
2.06
0.35
489
2.31
0.63
267
1.25
Free cash flow
78
47
66
165
95
74
204
Return on capital employed (ROCE) before taxes, annualized, %**
26.2
16.6
16.4
Equity-to-asset ratio at the end of the period, %
46.0
37.3
40.5
Net gearing at the end of the period, %
16.6
53.4
45.6
Personnel at the end of the period
13,324
16,248
-18
15,644
Figures for Q1-Q2/2015, Q2/2014, Q1-Q2/2014, and full-year 2014 include Process Automation Systems. *Operating profit for Q2/2015 includes an initial gain on disposal of the PAS business. ** Roce for Q1 - Q2/2015 includes the initial gain on disposal of the PAS business, which is not annualized
Key Figures excluding PAS
EUR million
Q2/ 2015
Q2/ 2014
Change %
Q1-Q2/ 2015
Q1-Q2/ 2014
Change %
2014
Orders received
823
833
-1
1,560
1,625
-4
3,074
Services orders, % of total
60
60
64
62
62
Net sales
756
884
-15
1,489
1,644
-9
3,363
Services net sales, % of total
64
54
62
54
56
Earnings before interest, tax and amortization (EBITA) and non-recurring items
94
121
-22
172
206
-17
426
% of net sales
12.4
13.7
11.6
12.6
12.7
Return on capital employed (ROCE) before taxes, annualized, %
17.1
-
Personnel at the end of the period
13,324
14,591
-9
14,072
Market development We expect the demand for mining equipment, products and projects to remain weak. We expect the demand for our mining services to remain good, despite being impacted by customers` cost savings initiatives. The demand for both aggregates equipment and services is expected to be satisfactory. The demand for Flow Control products related to customers` new investments is expected to be satisfactory. The demand for Flow Control services is expected to be good.
Metso is the world`s leading industrial company in the mining and aggregates industries and in the flow control business. Our knowledge, people and solutions help drive sustainable improvements in performance and profitability in our customers` businesses.
Metso has an uncompromising attitude towards safety. Our products range from mining and construction equipment and systems to industrial valves and controls. Our solutions are delivered and supported by decades of process knowledge and a broad scope of services backed by a global footprint of over 90 service centers, thousands of service employees, and an extensive logistics network.
Metso is listed on the NASDAQ OMX Helsinki, Finland. In 2014, Metso`s net sales totaled EUR 3.7 billion. Metso employs approximately 14,000 industry experts in more than 50 countries. Expect results.
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
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 at:
United States: +1 646 254 3366 other countries: +44 20 3427 1903 The confirmation code for joining the conference call is 6107586.
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.
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Metso Corporation via GlobeNewswire HUG#1940771
