Business News
Metsos Annual General Meeting, March 30, 2010: President and CEO Jorma Elorantas review
Wednesday 31. March 2010 - At Metso Corporations Annual General Meeting starting today at 3:00 pm, President and CEO Jorma Eloranta reports that the development of Metsos operating environment during the first three months of the year is consistent with the companys expectations.
“In conjunction with the publication of the financial statements on February 8, 2010, we estimated that our operating environment would remain demanding in the first half of the year but would gradually recover. The market development during the first months of the year supports this view: The stronger demand in the mining industry and in power production during the fourth quarter of 2009 has continued to develop favorably. Also in the oil, gas and petrochemical industry – important for our automation business – and in the recycling industry, our customers confidence in the development of the markets appears to have strengthened. Our customers are starting to invest again.”
“In the construction industry and in the pulp and paper industry the outlook has not really changed, although the positive price development in pulp during recent weeks creates a foundation for the gradual start up of investments also in the pulp industry.”
“All in all, positive tone in the markets has increased during the first months,” Eloranta summarizes the market situation. According to Eloranta, the early-year development supports the full-year financial outlook presented in conjunction with the publication of the financial statements. In its financial statements press release on February 8, 2010, Metso estimated its net sales to remain at about the same EUR 5 billion level as in 2009 and profitability to remain satisfactory in 2010.
“As we have previously told, there have been price pressures in the markets since last summer,” Eloranta notes. “This is typical when demand is lower than normal. We have been able to transfer some of the price pressures to our component and raw materials suppliers, but not in full. We estimate the price pressures to gradually ease as the market situation improves. We are improving our profitability also by continuously developing our own operations.”
“Winning new, profitable orders is the top priority in all our businesses this year,” Eloranta emphasizes. He points out that global megatrends – globalizing economy, the rise of emerging economies, changing demographics and sustainability – support the long-term profitable growth of Metso and its customers: “The downswing in the global economy doesnt seem to have changed their momentum.”
Metso sees significant growth opportunities, especially in technology related to bioenergy production. “We are already a leading global supplier of bioenergy technology, and we have very extensive know-how in the entire process – from the handling of biofuel and solid waste to boiler technology, environmental systems and process automation. We are also developing next-generation solutions for e.g. gasification, pyrolysis and heat-treatment of biomass. We are talking about long-term development work that, according to our estimates, will yield significant business for Metso in the years ahead.”
At the beginning of the meeting, Metsos Board of Directors Chairman Jukka Viinanen talked briefly about the succession issues at Metsos top management. “As you can read from the Annual Report, Metsos Board has discussed successors to Metsos top management because, in fact, within the next 12 months half of the companys Executive Team members, Jorma Eloranta, Olli Vaartimo and Bertel Langenskiöld, will turn 60 years old – the age of retirement in accordance with their executive contracts. Jorma Eloranta will retire at the end of February 2011, unless otherwise agreed upon. It has been agreed with Olli Vaartimo and Bertel Langenskiöld that they will be available until the end of June 2011. So the management renewal process is very much under deliberation, and progress in the matter will be communicated as new decisions are made. The goal is to ensure as flexible transition as possible,” Viinanen notes.