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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
[August 31, 2005]
Metso Corporation
(Translation of registrants name into English)
Fabianinkatu 9 A,
PO Box 1220
FIN-00101
Helsinki, Finland
Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F
Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g-32(b):82-
TABLE OF CONTENTS
SIGNATURES
Date
August 31, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.
Name:
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Olli Vaartimo
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Harri Luoto |
Executive Vice President and CFO
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Senior Vice President, |
Metso Corporation
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General Counsel |
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Metso Corporation |
Metsos strategic focus on profitable growth; New financial targets set; Corporate structure
to be further reviewed
(Helsinki, Finland, August 31, 2005) Metso Corporation (NYSE: MX; OMX: MEO)
Conference call for media representatives today, Wednesday, August 31, 2005 in English at
10.00 a.m. and in Finnish at 12.55 p.m.
Metso Corporations Board of Directors has accepted Metsos Management Agendas and financial
targets for 2006-2008 following the annual strategic review, which started in February 2005. Over
the past 18 months Metso has made significant progress on restructuring the business and improving
profitability. The strategic focus is now gradually shifting towards profitable growth, which will
be attained through improved customer satisfaction and operational excellence.
In 2006-2008 Metso aims to deliver:
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Annual net sales growth of some 10 percent. |
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Consistently more than 15 percent return on capital employed (ROCE-%). |
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An operating profit margin (EBIT-%) of 9 percent towards the end of the strategy period. |
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An annual dividend of at least 40% of earnings per share. |
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A solid investment grade company status in credit rating. |
Our recent track record demonstrates that we have ability to improve the efficiency and
productivity of our operations. This together with the continuing good market situation will form a
solid bases for profitable growth and further creation of shareholder value, says Jorma Eloranta,
President and CEO of Metso Corporation. The new medium-term targets set for our Business Areas are
clearly tougher than the 2005 targets but they are realistic. We have concrete action plans and
several programs in place to meet these targets.
As a part of the 2005 strategy process, Metso has also considered various alternative corporate
structures, including a separate listing of Metso Minerals. The implementation of our ongoing shift
towards profitable growth will require strong commitment and focus from the management, so, just at
this point in time, the benefits of the current structure overweigh the alternatives. There are,
however, valid arguments for alternative corporate configurations, and therefore the Metso Board
has decided to commission a more detailed feasibility study to assess these alternatives. The
financial adviser in this study is Goldman Sachs, and it is estimated to be completed by the end of
the first quarter in 2006, Eloranta says.
Metsos Management Agenda 2006-2008
In 2006-2008 Metso will be targeting some 10 percent growth annually to support the sustainable
profit development and to strengthen its market leadership position. The growth will be attained
both organically and through complementary acquisitions.
All Metso Business Areas will continue their efforts to improve profitability, productivity and
quality and enhance customer satisfaction.
Metso will complement its life cycle offering both through its own development and through
acquisitions. Metso is also planning to enhance its sales, customer service, sourcing and
production close to the customers, especially in emerging markets such as China, India and South
America.
Financial targets 2006-2008
Metsos target is to reach ROCE-% of more than 15 percent regardless of the business cycle.
Another key target will be an operating profit margin (EBIT-%) of 9 percent. The Business
Area-specific EBIT-% targets are: over 8 percent for Metso Paper, over 11 percent for Metso
Minerals and over 12 percent for Metso Automation. The companies belonging to Metso Ventures are
dissimilar in nature and operate in different markets, so no medium-term EBIT-% target has been set
for Metso Ventures.
Reaching the corporate-level EBIT-% target of 9 percent will require that Metsos Business Areas
successfully complete the ongoing development programs and that the market demand is at least at
the current level. Metso is continuing measures to decrease the negative impact of cyclicality on
its financial performance.
Financial targets for 2006
Metso estimates that the favorable market situation in civil construction and in the mining and
energy segments will continue in 2006, while the pulp and paper industry demand is expected to be
on par with 2005. Based on this estimate on market environment and taking into consideration
Metsos development phase, the operating profit margin target for Metso Corporation in 2006 is to
exceed 7 percent.
While no major improvements in the pulp and paper market situation are expected in 2006, Metso
Paper will continue its efforts to improve its operational excellence. Consequently, the business
areas EBIT-% target is 6 percent in 2006. It is estimated that Metso Paper will be able to achieve
the over 8 percent target toward the end of the strategy period.
Due to the good progress achieved to date in operational excellence together with the continuing
high demand in the civil construction and mining industries, the EBIT-% target for Metso Minerals
is 10 percent in 2006.
The market situation for Metso Automation is expected to continue to be good in the energy, oil and
gas industry and satisfactory in the pulp and paper industry. Metso Automation will scale up its
investments in growth, and the EBIT-% target for Metso Automation for 2006 is 11 percent.
Metso Ventures EBIT-% target for 2006 is 6 percent.
Metsos capital structure target is to be a solid investment grade company.
New dividend policy
The Board has established a new dividend policy according to which Metso distributes an annual
dividend of at least 40 percent of earnings per share to its shareholders.
More information about Metsos Management Agendas as well as purpose and vision statements,
strategic goals, values and ethical principles can be found on www.metso.com.
Metso is a global technology corporation serving customers in the pulp and paper industry,
rock and minerals processing, the energy industry and selected other industries. In 2004, the net
sales of Metso Corporation were approx. EUR 4 billion, and it has some 22,000 employees in more
than 50 countries. Metsos shares are listed on the Helsinki and New York Stock Exchanges.
For further information, please contact at Metso Corporation:
Jorma Eloranta, President and CEO, tel. +358 204 84 3000
Olli Vaartimo, Executive Vice President and CFO, tel. +358 204 84 3010
or
USA: Mike Phillips, Senior Vice President, Finance and Administration, Metso USA, Inc., tel. +1 770
246 7237.
It should be noted that certain statements herein which are not historical facts, including,
without limitation, those regarding expectations for general economic development and the market
situation, expectations for customer industry profitability and investment willingness,
expectations for company growth, development and profitability and the realization of synergy
benefits and cost savings, and statements preceded by expects, estimates, forecasts or
similar expressions, are forward-looking statements. These statements are based on current
decisions and plans and currently known factors. They involve risks and uncertainties which may
cause the actual results to materially differ from the results currently expected by the company.
Such factors include, but are not limited to: general economic conditions, including fluctuations
in exchange rates and interest levels which influence the operating environment and profitability
of customers and thereby the orders received by the company and their margins; the competitive
situation, especially significant technological solutions developed by competitors; the companys
own operating conditions, such as the success of production, product development and project
management and their continuous development and improvement; the success of pending and future
acquisitions and restructuring.
Conference call for the press:
Metsos management will attend Capital Markets Day for investors and analysts being held in UK on
Wednesday, August 31, 2005. Jorma Eloranta, President and CEO, will briefly talk with media
representatives about Metsos strategy and will answer questions in conference calls, which will be
held
- in English on Wednesday, August 31, at
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10:00-10:20 a.m. Finnish time |
To participate in the English conference call, dial +358 20 365 955 (in Finland 020 365 955) a few
minutes prior to the start of Jorma Elorantas presentation.
- in Finnish on Wednesday, August 31, at
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10:55-11:15 a.m. UK time |
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12:55-1:15 p.m. Finnish time |
To participate in the Finnish conference call, dial +358 800 12032 (in Finland 0800 12032) a few
minutes prior to the start of Jorma Elorantas presentation.
The CMD presentations will be available at 11:00 a.m. Finnish time on the Internet at
www.metso.com.