Metso publishes carve-out and pro forma figures for Valmet

Metso Corporation's stock exchange release on November 12, 2013 at 2:00 p.m. local time Metso's Extraordinary General Meeting approved a demerger plan on October 1, 2013, pursuant to which Metso's Pulp, Paper and Power businesses will transfer, without liquidation, from Metso to Valmet Corporation. The completion of the partial demerger is expected to be registered in the Finnish Trade Register on or about December 31, 2013. The trading of Valmet's shares on NASDAQ OMX Helsinki is expected to commence on or about January 2, 2014. Carve-out and pro forma key figures and essential accounting principles for Valmet are shown below. More extensive information can be found in the attachment. Valmet's Carve-out Financial Information The interim carve-out financial information for the nine month period ended September 30, 2013 has been prepared by combining the income statements, comprehensive income statements, balance sheets, and cash flows of the legal entities and operating units attributable to the Pulp, Paper and Power businesses in Metso's historical consolidated financial statements and that will be carved out from Metso to form the Valmet Group. This includes the income, expenses, assets, liabilities, and cash flows of certain overseas holding companies owned by the Parent Company and Metso that will either be transferred to Valmet or that have been allocated to Valmet for the purpose of preparing the carve-out financial statements and interim carve-out financial information. As the Valmet Group does not comprise a group of entities under the control of a parent as defined by IAS 27, "Consolidated and Separate Financial Statements", consolidated financial statements for the businesses have not been prepared historically for internal or external reporting purposes. The interim carve-out financial information for the nine month period ended September 30, 2013 has been prepared in compliance with the recording and valuation principles of the IFRS standards as adopted by the European Union and take account of, the accounting basis and accounting principles used in preparing the carve-out financial statements for the years ended December 31, 2012, December 31, 2011, and December 31, 2010 and the carve-out financial information for the six month period ended June 30, 2013. The interim carve-out financial information is unaudited and should be read together with the audited carve-out financial statements for the years ended December 31, 2012, 2011, and 2010 together with the unaudited carve-out financial information for the six month period ended June 30, 2013 included in the demerger prospectus dated September 20, 2013 and released on September 23, 2013. As at and for the As at and for the As at and for the nine months ended nine months ended year ended KEY CARVE-OUT DATA September 30, 2013 September 30, 2012 December 31, 2012   (EUR in millions) Net sales   1,946 2,089 3,014 EBITA before non- 78.8 138.8 192.0 recurring items % of net sales        4.1 6.6 6.4 Operating profit         7.0 116.4 138.3 % of net sales        0.4 5.6 4.6 Non-recurring items: Capacity adjustment expenses in cost of goods sold   -21.9 - -8.5 in selling, general and -9.2 - -2.1 administrative expenses in other operating -15.1 -  -13.1 income and expenses, net Cost related to demerger process in selling, general and    -5.6        -        - administrative expenses Total non-recurring -51.8 - -23.7 items Amortization   -20.0 -22.4 -30.0 Depreciation   -43.0 -44.1 -59.5 Gross capital -44 -41 -64 expenditure (including acquisitions) Non-cash write-downs   -27 -4 -17 Capital employed   1,155 1,324 1,290 Orders received   1,754 1,767 2,445 Order backlog at end of 1,658 2,534 2,249 period Valmet's Pro Forma Financial Information Basis of Compilation of Unaudited Pro Forma Financial Information The following unaudited pro forma financial information is presented to illustrate the financial impacts of the demerger and certain transactions related to the formation of Valmet on Valmet's results of operations and financial position had the demerger taken place at an earlier point in time. This unaudited pro forma financial information is presented for illustrative purposes only. Because of its nature, this unaudited financial information illustrates what the hypothetical impact would have been if the demerger and certain transactions related to the formation of Valmet had taken place at the dates assumed in the pro forma financial information and does not represent Valmet's actual results of operations or financial position. This financial information is not intended to project Valmet's results of operations or financial position for any future period or as at any future date and does not represent the results of operations or financial position had Valmet been an independent publicly traded company during the periods presented. In addition, it should be noted that the corporate headquarter costs allocated to Valmet for historical carve-out purposes may not necessarily represent what these costs would have been if Valmet had operated as an independent legal entity. Additional costs may be incurred by Valmet following the effective date to enable it to operate as an independent listed company and as a result of reorganizing its administrative and headquarter functions. The pro forma adjustments are based upon available information and assumptions, which are described in the accompanying unaudited pro forma notes. There can be no assurance that the assumptions used in the preparation of the unaudited pro forma financial information will prove correct. The pro forma adjustments that have been made to reflect the effects of the demerger and certain transactions related to the formation of Valmet are based on Valmet's unaudited interim carve-out financial information as at and for the nine months ended September 30, 2013, unaudited carve-out financial information as at and for the year ended December 31, 2012, and management's estimate of the transactions that have been completed or are to be completed to effect the demerger and form Valmet in accordance with the demerger plan. The final amounts of assets and liabilities transferred to Valmet in the demerger may materially differ from those presented in the pro forma financial information, as such balances will be determined on the effective date. This could result in a significant variation from the results of operations and financial position presented for Valmet in the pro forma financial information. Pro Forma Periods The pro forma statement of income and pro forma statement of comprehensive income for the year ended December 31, 2012 and for the nine months ended September 30, 2013 have been compiled assuming that the demerger and certain transactions related to formation of Valmet had been completed on January 1, 2012, while the pro forma balance sheet as at September 30, 2013 has been compiled assuming that the demerger and certain transactions related to the formation of Valmet had been completed on September 30, 2013. The pro forma financial information presented here should be read in conjunction with the unaudited carve-out financial information for the nine month period ended September 30, 2013, the historical carve-out financial information for Valmet, and other information included in the demerger prospectus mentioned above.   As at and for the nine As at and for the year months ended September ended December 30, 2013 31, 2012 KEY PRO FORMA DATA (unaudited)   (EUR in millions, unless otherwise indicated) Net sales        1,946 3,014 Operating profit   13 122 Profit before taxes   8 118 Amortization         -20 -30 Depreciation   -43 -60 Non-recurring items: Capacity adjustment expenses   -46 -24 Costs related to the demerger        0 -16 EBITA((1))        33 152 EBITA before non-recurring items((2))        79 192 % of net sales        4.1 6.4 Earnings per share,((3)) EUR        0.04 0.52 Shares (outstanding shares of Metso as at September 30, 2013)         149,864,206 149,756,034 Balance sheet total   2,427 n/a Equity   824 n/a Interest-bearing liabilities   207 n/a Net debt   4 n/a Net gearing,((4)) %        0.5 n/a ROCE before taxes,((5)) %     2.5 n/a ROCE after taxes,((6)) %     2.2 n/a Equity to asset ratio,((7)) %        40.8 n/a ___________ (1)   EBITA = operating profit + amortization (2)   EBITA before non-recurring items = operating profit + amortization + non- recurring items Profit (3) Earnings per share =------------------------------------- Number of outstanding shares in Metso Net interest-bearing liabilities (4) Net gearing =-------------------------------------x 100 Total equity Profit before taxes + interest and Return on capital employed other financial expenses (5) (ROCE) before taxes =-------------------------------------x 100 Balance sheet total - non-interest- bearing liabilities Profit + interest and other Return on capital employed financial expenses (6) (ROCE) after taxes =-------------------------------------x 100 Balance sheet total - non-interest- bearing liabilities Total equity (7) Equity to asset ratio =-------------------------------------x 100 Balance sheet total - advances received Disclaimer This release does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction. In particular, no securities are being offered or sold, directly or indirectly, in or into the United States pursuant to this release and no shares or other securities of Valmet have been, or will be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state of the United States and, accordingly, may not be offered or sold, directly or indirectly, in or into the United States, unless registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable state securities laws of the United States. The distribution of this release may, in certain jurisdictions, be restricted by law. This release may not be sent to any jurisdiction in which it would not be permissible to do so. This release includes forward-looking statements within the meaning of the securities laws of certain applicable jurisdictions. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this release, including, without limitation, those regarding the demerger plan and its execution. By their nature, forward looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Metso cautions you that forward-looking statements are not guarantees of future performance and are based on numerous assumptions and that Valmet's actual results of operations, including its financial condition and liquidity and the development of the industries in which Valmet and the members of its group operate, may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this release. Metso's pulp, paper and power professionals specialize in processes, machinery, equipment, services, paper machine clothing and filter fabrics. Our offering and experience cover the entire process life cycle, including new production lines, rebuilds, and services. As of January 2014, Metso's Pulp, Paper and Power business will serve its customers with an even more focused and competitive approach as an independent, listed company, Valmet Corporation. Metso is a global supplier of technology and services to customers in the process industries, including mining, construction, pulp and paper, power, and oil and gas. Our 30,000 professionals based in over 50 countries contribute to sustainability and deliver profitability to customers worldwide. Metso's shares are listed on the NASDAQ OMX Helsinki Ltd. www.metso.com, www.twitter.com/metsogroup Further information, please contact: Markku Honkasalo, CFO, Future Valmet Corporation, tel +358 20 484 100 Metso Corporation Harri Nikunen CFO Juha Rouhiainen VP, Investor Relations Distribution: NASDAQ OMX Helsinki Ltd Media www.metso.com [HUG#1742423]