Business News
Metsos Annual General Meeting, March 31, 2009: President and CEO Jorma Elorantas review
Tuesday 31. March 2009 - At Metso Corporations Annual General Meeting starting at 3:00 p.m. today, President and CEO Jorma Eloranta reports that Metsos operating environment and business at the beginning of the year have been as anticipated: "Our January-February net sales and profit development support this years financial performance estimate we gave in conjunction with the publication of our financial statements."
In its financial statements release of February 4, 2009, Metso estimated that its 2009 total net sales will exceed EUR 5 billion, and profitability is expected to be satisfactory in 2009. Free cash flow is expected to improve considerably on 2008.
“Metsos order intake in October-December 2008 dropped to a clearly lower level than before. There havent been significant changes in the markets during the first few months of this year. It is positive to note that during the beginning of the year there were only minor cancellations or postponements of projects in the order backlog.”
“The market for new equipment is slow. January-February net sales in the services business have remained nearly at the previous years level. The market situation is most difficult in the pulp and paper industry, in construction and in metal recycling. In the power plant sector, there are active sales negotiations under way for new projects, but the decision making process is slower than before,” Eloranta notes. “It is still too early to say when and how the stimulus packages of different countries will affect e.g. the demand for our construction products and energy solutions.”
In response to the changes in the market situation, Metso has initiated measures to adjust capacity in several countries. “We have reduced the use of temporary labor and subcontractors in all of our units. We have also conducted reorganizations of our operations. Unfortunately, we have not been able to avoid permanent and temporary employee reductions. With these actions and strict cost control, we have aimed to swiftly bring our costs in line with the drop in demand,” Eloranta says.
In his review, Eloranta underscores that today Metso is more flexible and operationally diverse than in the previous economic downturn: “We are following market developments very closely, and we are prepared to take quick actions if the situation so requires. Our goal is for Metso to come out of this recession stronger than our competitors.”
Eloranta says that one of Metsos main goals this year is to improve cash flow: “We have initiated specific measures to release working capital. Early-year developments have been encouraging, and I believe that in our first-quarter financial review at the end of April we will be able to report positive performance in this area.”