Metso Publishes A Demerger Prospectus For Valmet Corporation

HELSINKI, Finland, Sept. 23, 2013 (GLOBE NEWSWIRE) --
Metso Corporation's stock exchange release on September 23, 2013 at 12:40  p.m.local timeMetso Corporation will publish a demerger prospectus today that has beenprepared on behalf of Valmet Corporation in order to carry out the partialdemerger of Metso and to apply for the listing of Valmet's shares on theofficial list of NASDAQ OMX Helsinki Ltd.Metso's Board of Directors unanimously approved a demerger plan on May 31, 2013under which all the assets, debts, and liabilities relating to Metso's Pulp,Paper and Power businesses will transfer, without liquidation, from Metso toValmet. On August 15, 2013, the Board unanimously decided to propose theapproval of the partial demerger and the demerger plan to the ExtraordinaryGeneral Meeting of Metso shareholders scheduled for October 1, 2013. Thecompletion of the partial demerger is expected to be registered in the FinnishTrade Register on or about December 31, 2013.Metso's Board of Directors approved the strategy and financial targets forValmet Corporation on September 3, 2013.Publication of the Demerger ProspectusThe Finnish demerger prospectus approved by the Finnish Financial SupervisoryAuthority, together with an unofficial English translation, are available onMetso's website, www.metso.com/demerger, as of today.This release also contains certain other previously unpublished informationdescribed in the demerger prospectus. This information includes the short-termoutlook for Valmet and the carve-out and pro forma historical financialinformation for Valmet. The terms used below are explained in detail in thedemerger prospectus.Valmet's StrategyValmet will focus on delivering technology and services globally to industriesthat use bio-based raw materials. Valmet's vision is to become the globalchampion in serving its customers, and its mission is to convert renewableresources into sustainable results.Valmet's main customer industries are pulp, paper, and energy. All of these aremajor global industries that offer growth potential for the future. Valmet willcomplement its core business by applying its technology and know-how toindustries beyond biomass, particularly in the energy sector.Valmet's product and service portfolio consists of productivity-enhancingservices, plant upgrades and rebuilds, new cost-efficient equipment andsolutions for optimizing energy and raw material usage, and technologies forincreasing the value of its customers' end-products.Financial TargetsMetso's Board of Directors has set the following financial targets for Valmet:  * Net sales growth to exceed market growth;  * EBITA margin before non-recurring items: 6 to 9 percent;  * Return on capital employed ("ROCE") (pre-tax): minimum of 15 percent; and  * Dividend payout of at least 40% of net profit.Valmet's Must-Win Initiatives to Achieve its Strategic TargetsValmet will seek to achieve its strategic goals by pursuing the following Must-Win initiatives:1)   Customer excellenceStrengthen key account management to enhance customer    growthDrive service growth through long-term agreements and an expanded customer base2)   Leader in technology and innovationDevelop more cost-competitive and less capital-intensive productsCreate new revenue from biotechnology solutions and a new offering3)   Excellence in processesImprove health and safetyReduce quality costsIncrease savings from procurement initiatives4)  Winning teamStrengthen high-performance cultureContinue further globalization of our capabilities to be closer to customersValmet Short-term OutlookIn the Pulp and Energy business line, management expects the demand for pulpmills and rebuilds to remain satisfactory while demand for power plants based onrenewable energy sources is expected by management to remain weak. In the Paperbusiness line, management believes that structural changes in the paper industryare likely to continue and expects demand for papermaking lines to remain weak.In the Services business line, management expects demand to be satisfactory. Aglobal cost efficiency program is being implemented to improve Valmet'scompetitiveness.Valmet Carve-out Financial InformationThe demerger prospectus includes Valmet's (i) audited carve-out financialstatements as at and for the years ended December 31, 2012, 2011, and 2010,together with (ii) unaudited interim carve-out financial information as at andfor the six months ended June 30, 2013, including unaudited comparative interimcarve-out financial information as at and for the six months ended June30, 2012.The carve-out financial information for Valmet has been derived from Metso'saudited consolidated financial statements as at and for the years ended December31, 2012, 2011, and 2010 and unaudited consolidated interim reports as at andfor the six months ended June 30, 2013 and 2012. The audited carve-out financialstatements for Valmet as at and for the years ended December 31, 2012, 2011, and2010 have been prepared in accordance with International Financial ReportingStandards ("IFRS") as adopted by the European Union in respect of the principlesfor determining which assets and liabilities, income, and expenses, as well ascash flows, are to be assigned to Valmet as described in the notes to the carve-out financial statements. The unaudited interim carve-out financial informationfor Valmet as at and for the six months ended June 30, 2013, including unauditedcomparative interim carve-out financial information as at and for the six monthsended June 30, 2012, has been prepared in accordance with "IAS 34 - InterimFinancial Reporting" under the same considerations as described above.As Valmet does not comprise a group of entities under the control of a parent asdefined by "IAS 27 - Consolidated and Separate Financial Statements", it has nothistorically prepared consolidated financial information for internal orexternal reporting purposes. The carve-out financial information for Valmetincluded in the demerger prospectus has been prepared by combining thestatements of income, statements of comprehensive income, balance sheets, andcash flows of the legal entities and operating units attributable to the Pulp,Paper and Power businesses in Metso's historical consolidated financialstatements and that will be carved out from Metso to form Valmet, includingcertain of Metso Corporation's and Metso's foreign holding companies' income andexpenses, assets and liabilities, and cash flows that will either be transferredto Valmet or that have been allocated to Valmet for the purpose of thepreparation of the carve-out financial information. As a result, the carve-outfinancial information for Valmet does not necessarily reflect what Valmet'sfinancial status or operational result would have been had Valmet operated as anindependent company and had it presented stand-alone financial informationduring the periods concerned. The carve-out financial information for Valmetalso does not take into account any transactions that have been made or will bemade in connection with the demerger or otherwise, to the extent that suchtransactions have been entered into after the periods covered in the carve-outfinancial information. Moreover, the carve-out financial information for Valmetmay not be indicative of Valmet's future operational result, financial status,or cash flows.The following table details certain carve-out information for Valmet derivedfrom the demerger prospectus:              As at and for the six   As at and for              months ended             the year ended              June 30,                 December 31,              2013  2012              2012              2012       2011  2010                                                              (not                      (restated)((1))   (restated)((1))  restated)                                                               (audited, unless                          (unaudited)       (unaudited)    otherwise indicated)                        (EUR in millions, unless otherwise indicated)                                     | Net sales,                          | total        1,345 1,453            |3,014             3,014      2,703 2,453                                     | Operating                           | profit       24.0  79.7             |138.3             134.7      174.2 106.5                                     | Profit       14    46               |76                77         109   47                                     | EBITA before                        | non-                                | recurring                           | items((2))                          | (unaudited)  48.2  94.2             |192.0             188.4      204.5 159.3                                     | percent of                          | net sales    3.6   6.5              |6.4               6.3        7.6   6.5                                     | Orders                              | received                            | (unaudited)  1,372 1,263            |n/a               2,445      3,225 2,584                                     | Order                               | backlog                             | (unaudited)  1,883 2,663            |n/a               2,249      2,863 2,347______________________(1)   Restated due to the adoption of the revised "IAS 19 - Employee Benefits"on January 1, 2013. The restatement did not have an impact to the combinedbalance sheet or the combined cash flow statement.(2)   EBITA before non-recurring items = operating profit + amortization + non-recurring itemsValmet Pro forma Financial InformationThe demerger prospectus includes unaudited pro forma financial informationillustrating the effects of the demerger and certain transactions related to theformation of Valmet on Valmet's operational result and financial position. Thepro forma financial information has been presented as if the demerger and thetransactions related to the formation of Valmet had been executed on (i) January1, 2012, for the pro forma statements of income and pro forma statements ofcomprehensive income and (ii) June 30, 2013, for the pro forma balance sheet.The unaudited pro forma financial information has been prepared for illustrativepurposes only, and, because of its nature, addresses a hypothetical situation.The unaudited pro forma financial information illustrates what the hypotheticalimpact would have been if the demerger and certain transactions related to theformation of Valmet had been consummated at the dates assumed in the pro formafinancial information and, therefore, does not represent the actual results ofValmet's operations or financial position. The unaudited pro forma financialinformation is not intended to provide a projection of Valmet's operationalresults or financial position for any future period or as at any future date.The pro forma financial information has been compiled on a basis consistent withthe IFRS standards applied by Valmet in the audited carve-out financialstatements as at and for the years ended December 31, 2012, 2011, and 2010, andthe unaudited carve-out financial information as at and for the six months endedJune 30, 2013. The pro forma financial information is based on Valmet'sunaudited carve-out financial information as at and for the six months endedJune 30, 2013, and the audited carve-out financial statements as at and for theyear ended December 31, 2012, restated to take account of the effect of therevised "IAS 19 - Employee Benefits" standard adopted on January 1, 2013.Furthermore, certain adjustments related to the demerger and the formation ofValmet have been made to the pro forma financial information as described inmore detail in "Pro Forma Financial Information" in the demerger prospectus. Thepro forma adjustments are based on available information and assumptions, andtheir factual effects may differ from what has been presented in the demergerprospectus. As a result, the operational results and/or financial statuspresented in the unaudited pro forma financial information may differ fromValmet's actual operational result and/or financial status. In addition, itshould be noted that the corporate headquarters costs allocated to Valmet forthe purpose of presenting the historical carve-out financial information may notnecessarily represent what these costs would have been if Valmet had operated asan independent legal entity. Additional costs may be incurred by Valmetfollowing the effective date in order for it to operate as an independent listedcompany, as well as from reorganizing administrative and headquarter functions.The pro forma adjustments made to reflect the effects of the demerger andcertain transactions related to the formation of Valmet are based on Valmet'sunaudited interim carve-out financial information as at and for the six monthsended June 30, 2013 and unaudited carve-out financial information as at and forthe year ended December 31, 2012 and Management's estimate of the transactionsthat have been completed or are to be completed to effect the demerger and formValmet in accordance with the Demerger Plan. The final amounts of assets andliabilities transferred to Valmet in the demerger may materially differ fromthose presented in the pro forma financial information, as such balances will bedetermined on the effective date. This could result in a significant variationcompared to the operational results and financial status of Valmet presented inthe pro forma financial information.The unaudited pro forma financial information does not include all of theinformation required for financial statements under IFRS, and should be read inconjunction with Valmet's historical carve-out financial statements and interimcarve-out financial information included in the demerger prospectus.The following table details certain pro forma financial information for Valmetderived from the demerger prospectus:                                  As at and for the six As at and for the year                                  months ended June 30, ended December                                  2013                  31, 2012                                  (unaudited)                                  (EUR in millions, unless otherwise indicated) Net sales, total                 1,345                 3,014 Operating profit                 27                    128 Income before taxes              26                    124 Amortization of intangible assets                           (14)                  (30) Depreciation of tangible assets  (28)                  (60) Non-recurring items: Capacity adjustment expenses     (8)                   (24) Costs related to the Demerger    0                     (11) EBITA before non-recurring items((1))                       48                    192 percent of net sales             3.6                   6.4 Earnings per share,((2)) EUR     0.12                  0.55 Profit                           18                    82 Shares (outstanding shares in Metso as at June 30, 2013)                149,864,206           149,864,206 Balance sheet total              2,493                 n/a Equity                           847                   n/a Interest-bearing liabilities     215                   n/a Net debt                         (15)                  n/a Gearing,((3)) percent            (1.7)                 n/a ROCE before taxes,((4)) percent  6.5                   n/a ROCE after taxes,((5)) percent   4.9                   n/a Equity to asset ratio,((6)) percent                          37.0                  n/a(1)        EBITA before non-recurring items = operating profit + amortization +non-recurring items                                       Profit (2) Earnings per share              =------------------------------------                                       Number of outstanding shares in                                       Metso                                       Net interest-bearing liabilities (3) Gearing                         =------------------------------------x 100                                       Total equity                                       Profit before taxes + interest and     Return on capital employed        other financial expenses (4) (ROCE) before taxes             =------------------------------------x 100                                       Balance sheet total - non-                                       interest-bearing liabilities                                       Profit + interest and other     Return on capital employed        financial expenses (5) (ROCE) after taxes              =------------------------------------x 100                                       Balance sheet total - non-                                       interest-bearing liabilities                                       Total equity (6) Equity to asset ratio           =------------------------------------x 100                                       Balance sheet total - advances                                       receivedDisclaimerThis release does not constitute an offer to sell or a solicitation of an offerto buy any securities in any jurisdiction. In particular, no securities arebeing offered or sold, directly or indirectly, in or into the United Statespursuant 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 UnitedStates and, accordingly, may not be offered or sold, directly or indirectly, inor into the United States, unless registered under the Securities Act orpursuant to an exemption from the registration requirements of the SecuritiesAct and in compliance with any applicable state securities laws of the UnitedStates.The distribution of this release may, in certain jurisdictions, be restricted bylaw. This release may not be sent to any jurisdiction in which it would not bepermissible to do so.This release includes forward-looking statements within the meaning of thesecurities laws of certain applicable jurisdictions. These forward-lookingstatements include, but are not limited to, all statements other than statementsof historical facts contained in this release, including, without limitation,those regarding the demerger plan and its execution. By their nature, forwardlooking statements involve known and unknown risks, uncertainties and otherfactors because they relate to events and depend on circumstances that may ormay not occur in the future. Metso cautions you that forward-looking statementsare not guarantees of future performance and are based on numerous assumptionsand that Valmet's actual results of operations, including its financialcondition and liquidity and the development of the industries in which Valmetand the members of its group operate, may differ materially from (and be morenegative than) those made in, or suggested by, the forward-looking statementscontained in this release.Metso's pulp, paper and power professionals specialize in processes, machinery,equipment, services, paper machine clothing and filter fabrics. Our offering andexperience 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 itscustomers with an even more focused and competitive approach as an independent,listed company, Valmet Corporation.**Pending the approval of the Metso EGM to be held on October 1, 2013, andregistration of the demerger.www.metso.com/pulpandpaper, www.metso.com/energywww.twitter.com/metsopulppaper, www.twitter.com/metsoenergyMetso is a global supplier of technology and services to customers in theprocess industries, including mining, construction, pulp and paper, power, andoil and gas. Our 30,000 professionals based in over 50 countries contribute tosustainability and deliver profitability to customers worldwide. Metso's sharesare listed on the NASDAQ OMX Helsinki Ltd.www.metso.com, www.twitter.com/metsogroupFurther information, please contact:Pasi Laine, President and CEO, Valmet Coporation*, tel. +358 20 484 3200Harri Nikunen, CFO, Metso Corporation, tel. +358 20 484 3010Metso CorporationHarri NikunenCFOJuha RouhiainenVP, Investor RelationsDistribution:NASDAQ OMX Helsinki LtdMediawww.metso.comValmet prospectus: http://hugin.info/3017/R/1730717/578452.pdf[HUG#1730717]