Metso Ventures Metso Capital Markets Day Tampere, December 10, 2002 Sakari Tamminen, Executive Vice President and CFO
Metso Ventures role Metso Ventures contains businesses that - serve the needs of Metso s other businesses - are under strategic development - are potential future businesses The evaluation criteria for new business potential include - synergies and technological compatibility with Metso s core businesses - compatibility with Metso s strategy and the Metso Future Care concept - earnings and organic growth potential - environmental soundness The business area comprises Metso Panelboard, Metso Drives, Metso Powdermet and Valmet Automotive 2
Metso Panelboard Metso Panelboard is one of the leading suppliers of engineering know-how and technology for complete lines to produce MDF, particleboard and OSB MDF (Medium Density Fiberboard) is mainly used in furniture industry Particleboard is mainly used in furniture and construction industries OSB (Oriented Strand Board) is mainly used in construction industry MDF plant in Placas do Paraná, Brazil, delivered by Metso Panelboard 3
Metso Panelboard business environment (1/2) Europe Asia - MDF industry recovering - The European board producers are starting to plan new particleboard investments to Russia - Signs of improvement - The interest for OSB is increasing - The outlook for MDF in China is still continuing promising Americas - North America: industry in strong consolidation process, new investments foreseen to improve earliest in 2004. - South America: a lot of new capacity has been started up, few plant investments foreseen 4
Metso Panelboard business environment (2/2) After-sales services - The market is as big as the new investment market - Especially the rebuilt and modernization market is growing - Metso s wide machine base in different market areas gives a good basis for future growth The panelboard market seems to be recovering and during 2003 more new investment projects are expected 5
Panelboard s on-going projects Sichuan Guodong Construction Co., China: start up phase for a wheat straw particleboard line Sunway, China: under delivery a MDF plant, start up in 2003 Swedspan (part of Ikea group), Sweden: modern particleboard line, start up in early summer 2003 Kronospan Group, Germany: front-end parts for Mende MDF line to Szceczinek plant in Poland IP Nevamar's particleboard plant in Franklin, USA: new ClassiFormer forming stations Metro, Thailand: panelhandling equipment to new particleboard line. 6
Panelboard improving profitability Operational Excellence - Re-structuring of the organization by simplifying the structure into 3 different Product Divisions as well as a Sales and Service Division - Profitability improved by increasing productivity and by cutting costs. During the re-structuring process, the number of personnel has been reduced by 35%. Future Care - Strong focus to improve aftermarket services. New servicetype products developed for maintenance and aftermarket services as well as for Engineered Rebuild and Improvement (ERI) business. - The development work for service packages continues 7
Metso Drives Metso Drives focuses on mechanical power transmission for energy and process industries Develops, manufactures and supplies paper machine drives, wind turbine gears, other industrial gears and the related maintenance services The largest single product group is the fast-growing wind turbine gears 8
Valmet Automotive Valmet Automotive is an independent contract manufacturer of specialty cars Manufactures Saab 9-3 convertibles and the Saab 9-3 Viggen for Saab Automobile AB from Sweden (part of GM) Agreement to manufacture Porsche Boxsters for Porsche AG from Germany at least until 2008 with an option of continuing until 2011 Valmet Automotive produced 30,271 cars in January- September, 2002 (31,923 cars in 1-9/01) Defined as a non-core business: ThyssenKrupp s option to acquire the remaining 90% of the business runs until the end of 2003 9