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Metso global website News 2009 Metso's Interim Review, January 1-June 30, 2009
Stock Exchange release July 24, 2009 11:00:00 AM CET
Metso's Interim Review, January 1-June 30, 2009
Metso's Company Release on July 24, 2009 at 12.00 p.m. local time
Profitability satisfactory. Guidance for 2009 intact.
Highlights of the second quarter of 2009
New orders worth EUR 1,020 million were received in April-June, i.e. 41 percent less than in the previous year (EUR 1,740 million in Q2/08).
At the end of June, the order backlog was 14 percent lower than at the end of December 2008, amounting to EUR 3,512 million (EUR 4,088 million at December 31, 2008).
Net sales decreased by 24 percent, standing at EUR 1,247 million (EUR 1,633 million in Q2/08).
Earnings before interest, tax and amortization (EBITA) were EUR 74.7 million, i.e. 6.0 percent of net sales (EUR 166.5 million and 10.2% in Q2/08).
Operating profit (EBIT) was EUR 65.9 million, i.e. 5.3 percent of net sales (EUR 155.2 million and 9.5% in Q2/08).
Earnings before interest, tax and amortization (EBITA) and operating profit (EBIT) in April-June, include some EUR 4 million in non-recurring expenses relating to capacity adjustment measures.
Earnings per share were EUR 0.26 (EUR 0.72 in Q2/08).
Free cash flow was EUR 80 million (EUR 59 million in Q2/08).
Return on capital employed (ROCE) before taxes was 9.3 percent (23.4% in Q2/08).
"The overall cautious market sentiment in our customer industries has continued - with the positive exception of the paper and board industry in Asia, where we have seen improvement in the past few months. The recovery in China is partly due to the implemented stimulus measures. So far it has resulted in several sizable orders for us, one of which has been included in our second quarter orders received and the rest are to be included later this year," says Jorma Eloranta, President and CEO of Metso Corporation.
"The order intake for our equipment and project business in the first half of the year was low, while the services demand remained reasonably stable and satisfactory. Our profitability also remained satisfactory. Our overall financial development for January-June as well as our updated estimates for the second half of the year support our earlier guidance for this year. Our financial position is also solid."
Eloranta notes that the overall market visibility for 2010 is weak. "We are prepared to take additional capacity adjustment measures when needed. Our Board has today decided not to pay any additional dividend for 2008. This is mainly due to the continuing general uncertainty on the markets. Our financial performance and financial position are stable and have developed according to our expectations. The importance of strong balance sheet increases in an uncertain economic climate."
Metso's key figures
EUR million
Q2/
Q1-Q2/
Net sales of services business
% of net sales
EBITA before non-recurring capacity adjustment expenses
Earnings before interest, tax and amortization (EBITA)
Earnings per share, EUR
Orders received
Order backlog at end of period
Return on capital employed (ROCE) before taxes, annualized, %
Equity to assets ratio at end of period, %
Gearing at end of period, %
Metso's second-quarter 2009 review
Operating environment and demand for products in April-June
Due to the decline of the global economy and the uncertainty in the financial markets, our operating environment continued to be demanding. Our customers were still cautious in their investment decisions, which particularly affected our equipment and project businesses.
The majority of mining companies have significantly cut their investment plans compared with the peak investment levels of previous years and continued to limit their production during the second quarter of the year. The positive development in mineral and metal prices over the first half of 2009 has so far failed to improve the demand. Due to our strong product and services offering and the significant increase in our installed equipment base, demand for our mining equipment and related services continued on a satisfactory level. In the construction industry, demand for equipment relating to aggregates production continued on a weak level. Many countries have introduced economic stimulus packages relating to infrastructure development. According to our estimates, these measures will improve the demand for construction industry products only in the longer term as much of the new capacity installed during recent years is currently under-utilized. Demand for our construction industry services business was satisfactory.
Demand for power plants utilizing renewable energy sources was satisfactory in Europe and North America. The demand for power plants utilizing biomass and waste is expected to improve during the year due to measures to stimulate the use of renewable energy sources. However, limited availability of financing tends to delay the decision making in these projects. Demand for automation and flow control solutions decreased during the second quarter of the year. Demand for metals recycling equipment continued on a weak level due to the low price of scrap metal, customers' focus on inventory reduction and curtailments in steel production. The demand for the services business in our Energy and Environmental Technology segment was satisfactory.
Demand for paper and board lines picked up in China during the second quarter of the year. The recovery in the Chinese market was supported by the economic stimulus measures which have been implemented there. Fiber producers continue to postpone investment decisions due to low capacity utilization rates and uncertainty related to demand development. We have agreed to extend the schedules in a few additional smaller and medium size projects but in general the pressure to renegotiate the schedules has diminished. Demand for our services business in the pulp and paper industry continued to be weak particularly in North America and Europe due to low capacity utilization rates and capital spending restrictions.
Orders received in April-June
We received new orders worth EUR 1,020 million in April-June. The value of the orders was down by 41 percent from the comparison period. Orders received decreased in all of the reporting segments from the comparison period. Previously received orders equaling some EUR 228 million were cancelled from the order backlog, of which the majority is related to Zhanjiang Chenming pulp mill order cancellation. The agreements reported under the section "Events after the review period", are not included in the orders received nor in the order backlog at the end of June.
Orders received by Mining and Construction Technology in April-June equaled EUR 398 million, which was 57 percent less than the year before. The Mining business line's orders received decreased by over 60 percent on the exceptionally high comparison period. New orders consisted mainly of replacement, refurbishing and services business orders; no large orders for projects were received. Orders received by the Construction business line declined 50 percent from the comparison period.
Orders received by the Energy and Environmental Technology segment during the second quarter totaled EUR 278 million, down 24 percent on the comparison period. Orders received more than doubled in our Power business line from the weak second quarter order intake the year before. Orders received decreased by over one third in the Automation business line. This was mainly due to the heavy investment budget cuts in the paper and pulp and energy industries. Orders received by the Recycling business line decreased by over 75 percent due to customers' low capacity utilization rates. During the second quarter of the year, we received orders for a biofuel power boiler including an automation and information management system for PGE Zespól Elektrowni Dolna Odra S.A.'s heat and electricity co-generation plant in Poland, a recovery boiler for Phoenix Pulp & Paper Public Company Ltd's pulp and paper mill in Thailand, as well as automation systems for two energy-from-waste plants in England.
Orders received by our Paper and Fiber Technology segment in April-June fell by 24 percent from the comparison period and totaled EUR 335 million. Paper business line was awarded a large coated fine paper production line order to Shandong Huatai Paper Co. Ltd in China. Fiber and Tissue business lines received very few new orders. Also orders for the services business remained at an exceptionally low level.
Financial performance in April-June
In April-June our net sales equaled EUR 1,247 million, which was 24 percent less than during the comparison period one year earlier (EUR 1,633 million in Q2/08). The services business net sales decreased by 14 percent on the comparison period, and accounted for 42 percent (38% in Q2/08) of Metso's second quarter net sales.
Earnings before interest, tax and amortization (EBITA) for the second quarter of the year were EUR 74.7 million, i.e. 6.0 percent of net sales (EUR 166.5 million and 10.2% in Q2/08). Metso's operating profit decreased and was EUR 65.9 million, or 5.3 percent of net sales (EUR 155.2 million and 9.5% in Q2/08). The result for the second quarter includes some EUR 4 million in non-recurring expenses resulting from capacity adjustment measures. The cancellation of the Zhanjiang Chenming pulp mill order resulted in one-time expenses of about EUR 10 million mainly deriving from the dissolving of the hedging arrangements we had entered into. The result also includes EUR 6 million in capital gains from reducing our holding in Talvivaara Mining Company Plc's shares. The weakening of the operating result on the comparison period resulted mainly from the notable 24 percent decrease in net sales and related underabsorption of fixed costs in a number of manufacturing and engineering units.
The profit attributable to shareholders was EUR 37 million (EUR 102 million in Q2/08) in the second quarter, corresponding to earnings per share (EPS) of EUR 0.26 (EUR 0.72 in Q2/08).
Free cash flow remained strong during the second quarter and was EUR 80 million. The positive cash flow development was supported by a continued strong EUR 108 million decrease of inventories in the Mining and Construction Technology segment which was partly offset by a strong decrease in advances received as well as in accounts payable due to lower procurement volumes.
Metso's January-June 2009 Interim Review
Orders received and order backlog
Orders received in January-June totaled EUR 1,962 million, down 40 percent from the comparison period. Previously received orders equaling some EUR 260 million were cancelled in January-June. These order cancellations were booked off directly from the end-June 2009 order backlog and had no impact on reported new orders. Almost EUR 200 million of the cancellations relate to the cancellation of the Zhanjiang Chenming pulp mill order received in August 2008. Cancelled orders worth approximately EUR 34 million were related to our Construction business line and about EUR 20 million to our Recycling business line.
The three countries generating the largest total value of orders received were China, the United States, and Finland. The share of emerging markets in orders received was 49 percent (45% in Q1-Q2/08). All of our business segments reported decrease in orders received as our customers hesitated to make new investment decisions in the face of the continuing uncertainty in the global markets and poor availability of financing.
At the end of June, our order backlog was EUR 3,512 million, which is 14 percent less than at the end of 2008. Close to 60 percent of our June order backlog deliveries are expected to be completed during 2009. The order backlog includes around EUR 800 million in projects with somewhat uncertain delivery schedules and which will be delivered after 2009. These orders include, among others, the pulp mill project for Aracruz in Brazil.
Agreements reported under the section "Events after the review period", are not included in the orders received nor in the order backlog at the end of June.
Orders received by reporting segments
Q1-Q2/2009
% of orders received
Mining and Construction Technology
Energy and Environmental Technology
Paper and Fiber Technology
Valmet Automotive
Intra-Metso orders received
Orders received by market area
Our net sales for January-June decreased by 19 percent on the comparison period and equaled EUR 2,467 million (EUR 3,033 million in Q1-Q2/08). Net sales decreased in all reporting segments: in Mining and Construction Technology by 12 percent, in Energy and Environmental Technology by 11 percent and in Paper and Fiber Technology by 34 percent. The net sales of our services business decreased by 7 percent and its share of total net sales was 42 percent (37% in Q1-Q2/08).
Measured by net sales, the largest countries were the United States, China and Germany, which together accounted for about 29 percent of our total net sales.
Net sales by reporting segments
Intra-Metso net sales
Net sales by market area
Financial result
Our earnings before interest, tax and amortization (EBITA) for January-June weakened significantly from the comparison period and equaled EUR 143.5 million, or 5.8 percent of net sales (EUR 300.2 million and 9.9% in Q1-Q2/08). Our result includes non-recurring expenses of EUR 26 million due to capacity adjustment measures, of which EUR 18 million are related to Paper and Fiber Technology, EUR 5 million to Mining and Construction Technology and EUR 3 million to Energy and Environmental Technology.
The EBITA of the Paper and Fiber Technology weakened markedly and was EUR 12.6 million negative. The main causes for the weakened profitability were the high non-recurring expenses related to the capacity adjustment measures, the low utilization rates in several units and the cancellation costs of the Zhanjiang Chenming pulp mill order, which resulted in one-time expenses of about EUR 10 million mainly deriving from dissolving the hedging arrangements we had entered into.
The result for Mining and Construction Technology weakened clearly from the previous year as a result of the lower delivery volumes in the Construction business line and low capacity utilization rates in all manufacturing units. On the other hand the result includes EUR 6 million in capital gains from reducing our holding in Talvivaara Mining Company Plc.
The result of the Energy and Environmental Technology segment also decreased from the previous year mainly due to significantly reduced volumes in the Recycling business line and timing of project deliveries in the Power business line.
During the first half of the year our operating profit was EUR 124.5 million, or 5.0 percent of net sales (EUR 274.8 million and 9.1% in Q1-Q2/08). Operating profit before non-recurring expenses related to capacity adjustment actions was EUR 150.8 million or 6.1% of net sales.
Our net financing expenses in January-June were EUR 36 million (EUR 19 million). Due to the higher debt level compared to last year, our interest expenses increased by EUR 5 million and were EUR 36 million (EUR 31 million in Q1-Q2/08). Other financial expenses include a EUR 4 million reversal of translation adjustments resulting from two subsidiaries liquidated in the first quarter.
Our profit before tax was EUR 89 million (EUR 256 million) and our tax rate for 2009 is estimated to be about 30 percent (30% in 2008).
The profit attributable to shareholders was EUR 63 million (EUR 180 million) in January-June, corresponding to earnings per share (EPS) of EUR 0.44 (EUR 1.27 per share).
In January-June, the annualized return on capital employed (ROCE) before taxes was 9.3 percent (23.4%) and return on equity (ROE) was 8.7 percent (23.9%).
Cash flow and financing
Net cash generated by operating activities for January-June was EUR 228 million (EUR 17 million in Q1-Q2/08).
During January-June, EUR 135 million of net working capital was released. EUR 192 million of the release came from inventories and EUR 55 million from trade receivables. Simultaneously, trade payables decreased by EUR 197 million. Inventories in Mining and Construction Technology continued to decrease during the second quarter by EUR 108 million and the cumulative decrease from the beginning of the year is now EUR 180 million as a result of the ongoing special inventory reduction initiative.
Free cash flow was EUR 200 million positive in January-June (EUR 40 million negative in Q1-Q2/08).
Our net interest-bearing liabilities totaled EUR 1,042 million at the end of June (EUR 1,099 million on December 31, 2008).
The total amount of short-term debt maturing over the next 12 months equaled EUR 357 million at the end of June. EUR 118 million of the short-term debt consists of commercial papers issued in the Finnish markets, EUR 156 million is current portions of long-term debt and the remainder is local working capital financing of subsidiaries, primarily in Brazil. About EUR 48 million of existing long-term debt will mature during the two final quarters of 2010.
The amount of commercial paper financing in use during January-June fluctuated between EUR 110-160 million. During January-June, we obtained EUR 365 million in new long-term debt maturing in 4-5 years. The largest single transaction was a EUR 200 million five-year funding arrangement under the Euro medium term note (EMTN) program. New loans are primarily meant for the refinancing of our existing debt and for the extension of the maturity structure. The amount of this new long term debt exceeds the repayments of earlier loans from the beginning of 2009 to halfway through 2011. Metso's liquidity position is good. At the end of June, cash and cash equivalents totalled EUR 605 million. The syndicated EUR 500 million revolving credit facility is available until late 2011, and it is currently undrawn.
At the end of June, our gearing was 70.2 percent (79.5%) and the equity-to-assets ratio was 31.7 percent (28.9%). In April, following the Annual General Meeting, we paid EUR 99 million in dividends for 2008.
Our gross capital expenditure for January-June decreased by 51 percent on the comparison period and was EUR 55 million (EUR 112 million in Q1-Q2/08).
We expect our capital expenditure excluding business acquisitions to remain below EUR 150 million this year. Due to the changed global economic situation, we are significantly restricting the amount of new investments and extending the implementation schedules of ongoing investment projects when feasible.
We are constructing new plant and office premises for the Automation business line in Shanghai, China. The Metso Park industrial facility, designed especially to serve the mining and construction industry, is under construction in Rajasthan, India. In Finland, we are upgrading a pilot machine at the Paper Technology Center in Jyväskylä. We are establishing a third service center for the pulp and paper industry in China, in Zibo, Shandong province. Due to the changed market conditions, we have extended the implementation schedules for the Metso Park and Zibo service center investments. Investment projects in enterprise resource planning systems are underway in Mining and Construction Technology and in the Automation business line.
Metso's research and development expenses in January-June totaled EUR 61 million, representing 2.5 percent of Metso's net sales (EUR 66 million and 2.2% in Q1-Q2/08).
Acquisitions, divestments and joint ventures
In May, we sold the entire stock of Metso Paper Turku Works Oy to Stairon Oy. Metso Paper Turku Works Oy manufactured air systems for the pulp and paper industry. The sale had no significant impact on Metso's financial performance. The air system technology and the related business will remain in Metso's ownership. Metso Paper Turku Works Oy employed 91 people. In conjunction with the sale, Metso and Stairon have agreed on a long-term supply contract for the manufacture of certain key products.
In January, we sold our composites manufacturing business and related assets in Oulu, Finland, to xperion Oy. Annual net sales of the divested business have been less than EUR 5 million. The entire personnel of the business, 21 people, were transferred to xperion Oy. The divested business was part of our Paper business line.
MW Power Oy, a joint venture of Metso's heat and power business and Wärtsilä's biopower business, started its operations on January 1, 2009. We own 60 percent and Wärtsilä owns 40 percent of the joint venture. An order backlog of approximately EUR 116 million was transferred with Wärtsilä Biopower Oy to the joint venture. In 2008, the consolidated annual pro forma net sales of the company were approximately EUR 130 million and the number of employees about 200.
Adjusting capacity to demand
We began adjusting our capacity and cost structure to lower demand immediately when the market situation started to weaken in September 2008 and have continued these measures in 2009. The aim is to ensure the competitiveness of our operations.
Our first steps were to reduce the number of temporary personnel and the use of subcontractors. In addition we have initiated temporary lay-offs and permanent reductions at several of our units. In most cases, the temporary lay-offs concern all employee groups, and their duration varies, depending on the work load, from a few weeks to longer periods. The temporary lay-offs are mainly in use in Finland where local agreements allow for this type of flexibility. In other countries we have applied alternative options made possible by labor legislation, such as a shortened work week. Through the implementation of temporary lay-offs in Finland, we estimate that we will achieve some EUR 25-30 million savings in personnel costs over the course of this year. Furthermore, during the first half-year we have concluded employee negotiations to permanently reduce close to 1,900 employees. In January-June we recorded EUR 26 million in non-recurring expenses resulting from these personnel reductions and the closures of units connected with them. With these measures we estimate that we will achieve annual savings of about EUR 90 million, of which about EUR 40 million is estimated to be realized in 2009.
As a result of the above actions, our actual comparable personnel reduction from the end of June 2008 to the end of June 2009 has been about 2,650 employees. In addition, with the decisions already made during the first half of the year, our personnel is estimated to continue to go down during the second half of 2009 and first quarter of 2010 by another about 1,250 employees taking the total personnel reductions already decided to almost 4,000 employees. When calculating the comparable personnel reduction from the end of June 2008 to the end of June 2009 one has to take into considerations that some 1,800 employees have been added through acquisitions and some 300 employees have left the company through divestitures. In addition, we estimate the impact of temporary lay-offs in Finland in 2009 to equal to about 600 man-years in 2009.
The table below details the most significant capacity-adjustment measure decisions.
Implementati-on starting
Mining business line
Reduction of about 320 people, temporary lay-offs according to work load, unit closures.
Construction business line
Reduction of about 360 people, temporary lay-offs, unit closures.
Power business line
Reduction of 15 people, temporary lay-offs.
Q2/2009: Reduction of 81 people including temporary work force reduction and internal transfers etc.
Automation business line
Reduction of 87 people including closure of a unit and temporary lay-offs.
Recycling business line
Reduction of 24 people, temporary revoking of contracts, shortened working hours.
Paper business line
Reduction of about 750 people, temporary lay-offs, unit closures, transfers of personnel to other units.
Fiber business line
Reduction of about 250 people, temporary lay-offs, reduction of temporary personnel.
Tissue business line
Reduction of about 45 people.
At the end of June, we had 27,608 employees, which was 1,714 less than at the end of 2008 (29,322 people at December 31, 2008). Around 300 employees of these were seasonal workers. The number of employees fell especially in Finland and Sweden, as a result of capacity adjustment measures in our Paper and Fiber Technology segment. During January-June, we had an average of 28,414 employees.
Personnel by area
% of total personnel
Other Nordic countries
Changes in top management
In June, Perttu Louhiluoto was appointed Mining and Construction Technology's Senior Vice President, EMEA market area, as of July 1, 2009. He is responsible for sales and services delivery and mining and construction customer contacts in Europe, Middle East and Africa. Louhiluoto has worked as SVP, Operational Excellence at Group Head Office, Finland, since October 2008. Due to his new position Louhiluoto has renounced his membership of Metso Executive Team and Metso Executive Forum.
REPORTING SEGMENTS
Q2/09
Q1-
Earnings before interest, tax and
amortization (EBITA)
Personnel at end of period
Net sales of Mining and Construction Technology decreased by 12 percent on the comparison period, equaling EUR 1,059 million. The Mining business line's net sales decreased by about 5 percent, while the net sales of the Construction business line decreased over 20 percent. Net sales of the services business declined by 3 percent on the comparison period and accounted for 47 percent of the segment's net sales (43% in Q1-Q2/08).
Mining and Construction Technology's operating profit for the first half-year was EUR 100.9 million, i.e. 9.5 percent of net sales (EUR 169.2 million and 14.1% in Q1-Q2/08). The segment's operating profit was burdened by EUR 5 million in non-recurring expenses relating to the capacity adjustment measures. The operating profit includes EUR 6 million in capital gains relating to the reduction of our holding in Talvivaara Mining Company Plc. The profitability of the Mining business line weakened but continued to be good. Profitability of the Construction business line weakened clearly from the comparison period due to lower delivery volumes, low capacity utilization rates in the factories and one-time capacity adjustment measures.
The value of orders received declined 52 percent from the comparison period and was EUR 783 million in January-June (EUR 1,623 million in Q1-Q2/08). The amount of new orders decreased in both of the segment's business lines in all geographical areas. The relative share of orders received from emerging markets remained on par with the previous year, equaling 49 percent (50%). During January-June, around EUR 50 million in earlier received orders were cancelled.
The order backlog declined by 20 percent from the end of 2008 and totaled EUR 1,196 million at the end of June (EUR 1,492 million on December 31, 2008). Around EUR 200 million of the mining equipment orders in the order backlog have somewhat uncertain delivery schedules.
A decision was made in June 2009 to renew the Mining and Construction Technology segment's operating model. The aims of the new way to operate include developing the services business, enhancing operating efficiency and further strengthening of our position as a leading provider of mining and construction equipment and systems. As of July 1, 2009 the segment will be organized into two new business lines: All services-related business activities, including the spare and wear parts business, will be concentrated into the Services business line and all systems- and equipment-related business activities will be consolidated into the Equipment and Systems business line.
The net sales of Energy and Environmental Technology declined by 11 percent on the comparison period, equaling EUR 754 million. The Automation business line's net sales were on last year's level while the Power and Recycling business line's net sales declined clearly from the comparison period. The main reason for decline in the Power business line's net sales was the timing of the projects in the order backlog. The services business grew by 3 percent, and its share of the segment's net sales went up to 35 percent (31% in Q1-Q2/08).
The Energy and Environmental Technology segment's earnings before interest, tax and amortization (EBITA) weakened from the previous year and equaled EUR 66.4 million, or 8.8 percent of net sales (EUR 82.1 million and 9.7% in Q1-Q2/08). The EBITA margin improved slightly from the previous year's level in the Automation business line, weakened somewhat in the Power business line due to timing of deliveries and declined significantly in the Recycling business line due to low volumes and capacity utilization rates. The operating profit includes almost EUR 3 million in non-recurring expenses resulting from capacity adjustment measures.
The value of orders received fell by 28 percent from the comparison period and totaled EUR 543 million. The decrease came from the Automation and Recycling business lines. Approximately EUR 80 million of orders previously received by the Energy and Environmental Technology segment were cancelled, of which about EUR 60 million resulted from the cancelled Zhanjiang Chenming recovery boiler order. Larger orders came in particularly from the power production industry, for example a recovery boiler for Phoenix Pulp & Paper Public Company Limited's pulp and paper mill in Thailand, a power boiler including an automation and information management system for PGE Zespól Elektrowni Dolna Odra S.A.'s heat and electricity co-generation plant in Poland and automation systems for two energy-from-waste plants in the United Kingdom.
The order backlog at the end of June, EUR 1,035 million, was 14 percent lower than at the end of 2008. Projects accounting for slightly less than EUR 110 million of the order backlog's total value are subject to uncertainties relating to delivery schedules. These uncertain orders include, among others, the delivery of power boiler and automation technology for the pulp mill project of Aracruz in Brazil.
The net sales of Paper and Fiber Technology decreased by 34 percent in January-June, equaling EUR 646 million. The decrease was due to the overall slowdown of the markets and the timing of the deliveries in the order backlog. Net sales decreased clearly across all of the business lines. The services business net sales for January-June decreased by 20 percent but equaled 43 percent of segment's net sales due to low new equipment sales (35% in Q1-Q2/08).
Paper and Fiber Technology's EBITA for the first half-year was EUR 12.6 million negative (EUR 58.0 million positive in Q1-Q2/08). The result includes around EUR 18 million in non-recurring costs resulting from capacity adjustment measures. The cancellation of the Zhanjiang Chenming pulp mill order resulted in about EUR 10 million of one-time expenses mainly deriving from the dissolving of the hedging arrangements we had entered into. The underlying operational EBITA before the above mentioned non-recurring capacity adjustment and cancellation costs was EUR 15.0 million. The profitability of the first half of the year was also weakened by the low capacity utilization rate of our manufacturing and engineering units, capacity adjustment expenses and low volume.
The weak demand for the pulp industry's machinery and equipment continued. Demand for paper and board lines picked up in China in the second quarter partly due to the stimulus measures which have been implemented there. The value of orders received decreased 30 percent from the comparison period and was EUR 614 million.The largest order received was a coated fine paper production line to Shandong Huatai Paper Co. Ltd, in China. The order backlog at the end of June was EUR 1,304 million. Close to 40 percent of the projects in the order backlog are subject to uncertainties relating to delivery schedules. These include, for example, the Aracruz pulp equipment order. Agreements reported under the section "Events after the review period", are not included in orders received nor order backlog at the end of June.
Two of our North American customers, Smurfit-Stone Container Corporation and AbitibiBowater Inc., announced in the beginning of the year that they have filed a voluntary petition for reorganization under Chapter 11. For the first half of the year, we have recognized a EUR 4 million credit loss reserve to cover the risks related to these reorganizations.
Valmet Automotive's net sales in January-June totaled EUR 35 million (EUR 42 million in Q1-Q2/08). Operating loss was EUR 2.9 million (operating profit EUR 1.9 million in Q1-Q2/08). In January-June, Valmet Automotive produced an average of 71 vehicles (108 vehicles in Q1-Q2/08) per day. At the end of June, Valmet Automotive employed 636 people (783 people at December 31, 2008).
In January, Valmet Automotive signed an agreement with the Danish company Garia A/S for the engineering and manufacturing of an electric golf car. The production of this vehicle is planned to begin during the third quarter. The agreement spans several years and involves the production of a few thousand Garia golf cars annually. At the end of 2008, Valmet Automotive and the U.S. company Fisker Automotive Inc. signed a cooperation agreement on the engineering and manufacturing of Fisker Karma hybrid cars in Finland. The first cars are planned to be manufactured during the fourth quarter of this year. The agreement spans several years and annual production is projected to be 15,000 cars. Valmet Automotive's current assembly contract with Porsche will continue until 2012.
Events after the review period
Fine paper line to Zhanjiang Chenming in China, earlier received pulp mill order cancelled
In July, we signed a contract with the Chinese Zhanjiang Chenming Pulp & Paper Co., Ltd., for the supply of the world's largest fine paper production line to the company's greenfield pulp and paper mill in Zhanjiang, China. The total value of the order is approximately EUR 130 million. The new paper line order is included in Paper and Fiber Technology's third quarter orders received. Metso agreed with the customer that the pulp mill order which we were awarded in the third quarter of 2008 was cancelled and the cancelled order has been removed from June 2009 order backlog.
A letter of order for a paper making line with MCC Meili of China
In July, Metso and the Chinese MCC Meili Paper Industry Co. Ltd. signed a letter of order for the delivery of a lightweight-coated papermaking line to the customer's mill in Zhongwei city, Ningxia autonomous region in China. The start-up of the production line is scheduled for the first quarter of 2011. The total value of the order is approximately EUR 90 million. The deal is still subject to the parties coming to the final agreement of the project within a few months.
Metso decides not to distribute the additional dividend from 2008
On July 24, 2009, Metso's Board of Directors decided that Metso will not pay any additional dividend for 2008 in addition to the ordinary dividend of 0.70 euro per share that was distributed in April 2009. Metso's financial performance and financial position are stable and have developed according to management expectations, but the market visibility for 2010 continues to be weak. The importance of strong balance sheet increases in an uncertain economic climate.
The Annual General Meeting of March 30, 2009 authorized the Board to decide by the end of 2009, at its discretion and when the economic situation of Metso favors it, on the payment of an additional dividend for 2008 in the amount of no more than EUR 0.68 per share. With this Board decision no additional dividend will be distributed.
Short-term risks of business operations
Based on the uncertainty in the global economy and financial markets, our business environment for 2009 is continuing to be demanding.
The global economic recession and the financial crisis may have adverse effects on projects in our order backlog. Some projects may be postponed or they may be suspended or canceled. We estimate that over 20 percent of the projects currently in our order backlog are subject to uncertainties relating to delivery schedules. We apply the percentage of completion method to long-term delivery agreements, so we recognize long-term delivery agreements according the progress of the delivery. The customer advance payment is typically 10-30 percent, in addition to which the customer makes progress payments based on the milestones during the project execution, which significantly decreases risk related to projects. We assess continually our customers' creditworthiness and ability to fulfill their obligations. If a customer faces liquidity problems, we will discuss the possibility of changing project delivery schedules and terms of payment and any other measures needed. As a rule, we do not finance customer projects.
We have launched many measures to adjust to the rapidly changing operating environment. We are adjusting our capacity as well as cost and operational structure to correspond with the demand, in order to maintain our competitiveness. As a result of the global recession, the markets for our products are decreasing, leading to tightening cost competition.
Securing the continuity of our operations requires that sufficient funding is available under all circumstances. The financial crisis may have adverse effects on the availability of our debt financing and increase the costs relating to it. We estimate that our financial assets and available credit facilities are sufficient to secure short-term liquidity. At the end of June, cash and cash equivalents totaled EUR 605 million and credit facilities available for withdrawal amounted to EUR 500 million. The average repayment period for our long-term loan capital is 3.9 years. More than half of our long-term debt will mature after 2011. There are no prepayment covenants in our debt facilities that would be triggered by changes in credit ratings. Some of our debt facilities include financial covenants related to capital structure. Currently we fully meet the covenants and other terms related to our financing agreements. We consider our flexibility in relation to the covenants to be adequate.
The levels of net working capital and the level of capital expenditure have a fundamental effect on the adequacy of financing. Our aim is to decrease the level of our net working capital, and this could be difficult to achieve if the economic downturn is prolonged. We do not have any particularly large-scale investment projects underway, and we estimate that we are well positioned to keep our capital expenditure at a moderate level in the coming years.
We have EUR 787 million of goodwill on our balance sheet related to corporate acquisitions made over the last 10 years. We monitor our goodwill quarterly and carry out comprehensive impairment testing annually in September. Following the significant changes in our business environment, we have conducted additional impairment testing reviews at the end of every quarter since September 2008, and have not found any impairment necessary. The quarterly testing reviews have been conducted with the same principles as the annual tests and the discount rates have been adjusted when appropriate. The principles of the impairment testing are represented in the annual report.
Changes in the prices of raw materials and components could affect our profitability. On the one hand, the risk of increases in procurement costs typically diminishes during economic downturn. On the other hand, some of our customers are raw-material producers, whose ability to operate and invest may be hampered by declining raw material prices. Changes in raw material and component prices also affect the value of our inventories. Over the past few months, we have sold finished construction equipment from the inventory with a lower contribution margin than during the past few years.
Of the financial risks that affect our profitability, currency exchange rate risks are among the most substantial. Exchange rate changes can affect our business, although the geographical scope of our operations decreases the significance of any individual currency. The prevailing uncertainty in the financing markets is likely to increase exchange rate fluctuations.
Short-term outlook
Based on the global economic recession and uncertain financial markets, we estimate that our business environment will continue to be demanding during the rest of the year. Our customers are being cautious in their investment decisions, which particularly affects our equipment sales and project business. Our customers' capacity utilization rates have decreased which has had some negative impact on our services net sales, too.
Several mining companies are making substantial cuts in their investment plans compared with the recent years and are limiting their production. Due to our strong product and services offering, as well as our large installed equipment base, which has further grown significantly over the last few years, the demand for our mining equipment and services is expected to be satisfactory in 2009. In the construction industry, we estimate that the demand for equipment relating to aggregates production will be weak. Many countries have introduced stimulus measures relating to infrastructure development, which we expect to have a positive effect on the demand for our construction industry products in the long term. We estimate that the demand for our services offering in the construction industry will be satisfactory.
We estimate that the demand for power plants utilizing renewable energy sources will be satisfactory in Europe and North America in 2009. Many countries have initiated plans to increase the use of renewable energy sources. This is expected to support the demand for power plants utilizing biomass and waste. However, limited availability of financing may delay decision making in these projects. We estimate that the demand for our automation and flow control products will be satisfactory in 2009. The demand for metals recycling equipment is expected to be weak, owing to the low price of scrap metal and decline in steel production. We expect that the demand for the services offering of Energy and Environmental Technology will be satisfactory.
We estimate that the demand for fiber lines will be weak and for paper and board lines satisfactory in 2009. In the short-term, a number of paper and board machine projects in China are expected to materialize, partly thanks to the local stimulus measures. The delivery schedules of some of the major paper and board machine and fiber line projects in our order backlog have been prolonged. We estimate that the low capacity utilization rates in the pulp and paper industry will have a negative impact on the demand for our services business, particularly in North America and Europe.
We estimate that our net sales will exceed EUR 5 billion in 2009. Our order backlog stands at EUR 3.5 billion, of which EUR 2.0 billion consists of deliveries for 2009. We expect our services business to remain satisfactory in 2009.
We expect our profitability level to be satisfactory in 2009. We also expect our free cash flow to improve considerably on 2008 owing mainly to the measures aimed at releasing net working capital.
The net sales and profitability estimates are based on our current market outlook and business scope.
Helsinki, July 24, 2009
Metso Corporation's Board of Directors
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:
1) 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
(2) the competitive situation, especially significant technological solutions developed by competitors
(3) the company's own operating conditions, such as the success of production, product development and project management and their continuous development and improvement
(4) the success of pending and future acquisitions and restructuring.
The Interim Review is unaudited
Other operating income and expenses, net
Share in profits of associated companies
Financial income and expenses, net
Profit before taxes
Shareholders of the company
Minority interests
Cash flow hedges, net of tax
Available-for-sale equity investments, net of tax
Currency translation on subsidiary net investments
Net investment hedge gains (losses), net of tax
Defined benefit plan actuarial gains (losses), net of tax
Other comprehensive income (expense)
Total comprehensive income (expense)
Other intangible assets
Land and water areas
Assets under construction
Financial and other assets
Investments in associated companies
Available-for-sale equity investments
Loan and other interest bearing receivables
Available-for-sale financial investments
Deferred tax asset
Total non-current assets
Cost and earnings of projects under
construction in excess of advance billings
Income tax receivables
SHAREHOLDERS' EQUITY AND LIABILITIES
Share premium reserve
Cumulative translation adjustments
Fair value and other reserves
Equity attributable to shareholders
Post employment benefit obligations
Deferred tax liability
Total non-current liabilities
Current portion of long-term debt
Short-term debt
Advances received
Billings in excess of cost and earnings of projects
Income tax liabilities
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
NET INTEREST BEARING LIABILITIES
Long-term interest bearing debt
Short-term interest bearing debt
Other interest bearing assets
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Adjustments to reconcile profit
to net cash provided by operating activities
Interests and dividend income
Change in net working capital
Cash flows from operations
Interest paid and dividends received
Income taxes paid
Net cash provided by (used in) operating activities
Capital expenditures on fixed assets
Proceeds from sale of fixed assets
Business acquisitions, net of cash acquired
Proceeds from sale of businesses, net of cash
(Investments in) proceeds from sale of financial
Redemption of own shares
Net funding
Effect from changes in exchange rates
Capital expenditures on maintenance investments
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
capi-
mi-
Cu-
mu-
la-
trans-
ad-
just-
ments
tain-
earn-
Eq-
uity
at-
tri-
hold-
nor-
ity
in-
ter-
ests
Balance at Jan 1, 2008
Share-based payments, net of tax
Balance at June 30, 2008
Acquisitions in 2009
In January Metso and Wärtsilä finalized the combination of Metso's Heat & Power business with Wärtsilä's Biopower business into a new joint venture MW Power Oy. Metso owns 60% and Wärtsilä 40% of the new company. In this non-cash transaction Wärtsilä contributed its business into MW Power Oy in exchange of the shares in the company. In accordance with IFRS, the company is fully consolidated into Metso's Power business line.
In January Metso also acquired Oktokon Oy, a Finnish engineering company, into its Power business line.
The acquired businesses contributed net sales of EUR 45 million and net profit of EUR 2 million for the period from their acquisition to June 30, 2009.
Summary information on acquisitions made in January-June 2009 is as follows:
Minority interest
Other liabilities assumed
Non-interest bearing net assets
Cash and cash equivalents acquired
Debt assumed
Purchase price settled in cash
Deferred payments on prior year acquisitions
Net cash outflow on acquisitions
ASSETS PLEDGED AND CONTINGENT LIABILITIES
Mortgages on corporate debt
Other pledges and contingencies
Pledged assets
Guarantees on behalf of associated company obligations
Other guarantees
Repurchase and other commitments
Lease commitments
NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS
Forward exchange rate contracts
Interest rate swaps
Option agreements
The notional amount of electricity forwards was 569 GWh as of June 30, 2009 and 437 GWh as of June 30, 2008.
The notional amount of nickel forwards to hedge stainless steel prices was 246 tons as of June 30, 2009 and 354 tons as of June 30, 2008.
The notional amounts indicate the volumes in the use of derivatives, but do not indicate the exposure to risk.
Equity/share at end of period, EUR
Return on equity (ROE), % (annualized)
Return on capital employed (ROCE) before tax, % (annualized)
Return on capital employed (ROCE) after tax, % (annualized)
Free cash flow/share, EUR
Cash conversion, %
Gross capital expenditure (excl. business acquisitions)
Number of outstanding shares at end of period (thousands)
Average number of shares (thousands)
EXCHANGE RATES USED
1-6/
1-12/
Dec 31,
(Swedish krona)
(Brazilian real)
FORMULAS FOR CALCULATION OF INDICATORS
Earnings/share:
Average number of shares during period
Equity/share:
Number of shares at end of period
Return on equity (ROE), %:
Total equity (average for period)
Return on capital employed (ROCE) before tax, %:
Profit before tax + interest and other financial expenses
Balance sheet total - non-interest bearing liabilities (average for period)
Return on capital employed (ROCE) after tax, %:
Profit + interest and other financial expenses
Gearing, %:
Equity to assets ratio, %:
Balance sheet total - advances received
Free cash flow:
- capital expenditures on maintenance investments
+ proceeds from sale of fixed assets
= Free cash flow
Cash conversion:
SEGMENT INFORMATION
7/2008-
Group Head Office and other
Group Head Office and others total
Intra Metso net sales
Metso total
OTHER OPERATING INCOME (+) AND EXPENSES (-), NET
OPERATING PROFIT (LOSS)
OPERATING PROFIT (LOSS), % OF NET SALES
EBITA
EBITA, % OF NET SALES
Intra Metso orders received
QUARTERLY INFORMATION
10-12/
10-12/2008
ORDER BACKLOG
Intra Metso order backlog
Notes to the Interim Review
We have prepared this Interim Review in accordance with IAS 34 'Interim Financial Reporting'. The same accounting policies have been applied as in the annual financial statements. This Interim Review is unaudited.
New accounting standards
IFRS 3 (Revised)
IASB has published IFRS 3 (Revised), 'Business combinations', which maintains the requirement to apply the acquisition method to business combinations, but with some significant changes such as expensing of transaction costs. In addition, all payments to purchase a business are to be recorded at fair value on the acquisition date, with some contingent payments subsequently remeasured at fair value through income. Goodwill may be calculated based on the parent's share of net assets or it may include goodwill related to the minority interest. We are currently evaluating the effects on our financial statements but expect affect only future business combinations.
IFRS 3 (Revised) was endorsed by the European Union in June 2009 and it becomes effective for annual financial statements for periods beginning on or after July 1, 2009. We will apply the standard for the financial year beginning on January 1, 2010.
IAS 27 (Revised)
IASB has published IAS 27 (Revised), 'Consolidated and separate financial statements'. The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control. They will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value and a gain or loss is expensed. We do not expect the standard to affect our financial statements.
IAS 27 (Revised) was endorsed by the European Union in June 2009 and it is effective for annual financial statements for periods beginning on or after July 1, 2009. We will apply the standard for the financial year beginning on January 1, 2010.
Subpoena from the United States Department of Justice requiring Metso to produce documents
In November 2006, Metso Minerals Industries, Inc., which is our U.S. subsidiary, received a subpoena from the Antitrust Division of the United States Department of Justice calling for Metso Minerals Industries, Inc. to produce certain documents. The subpoena relates to an investigation of potential antitrust violations in the rock crushing and screening equipment industry. We are cooperating fully with the Department of Justice.
Decisions of our Annual General Meeting
Our Annual General Meeting on March 31, 2009 approved the accounts for 2008 and decided to discharge the members of the Board of Directors and the President and CEO from liability for the financial year 2008. In addition, the Annual General Meeting approved the proposals of the Board of Directors to authorize the Board of Directors to resolve of a repurchase of Metso's own shares, to issue new shares and to grant special rights.
The Annual General Meeting decided that a dividend of EUR 0.70 per share will be paid for the financial year which ended on December 31, 2008. The dividend was paid on April 15, 2009. In addition, the Annual General Meeting authorized the Board of Directors to decide, at its discretion and when the economic situation of Metso favors it, on the payment of a dividend of no more than EUR 0.68 per share in addition to the above mentioned dividend.
Jukka Viinanen was elected Chairman of the Board and Jaakko Rauramo was elected Vice Chairman of the Board. Pia Rudengren was elected a new member of the Board. The Board members re-elected were Maija-Liisa Friman, Christer Gardell, Arto Honkaniemi and Yrjö Neuvo. Our long-term chairman of the board, Matti Kavetvuo informed that he is not available for re-election. The term of office of Board members lasts until the end of the next Annual General Meeting.
The Annual General Meeting decided that the annual remunerations for Board members be EUR 92,000 for the Chairman, EUR 56,000 for the Vice Chairman and EUR 45,000 for the members and that the meeting fee including committee meetings be EUR 600 for each meeting they attend.
The auditing company, Authorized Public Accountant PricewaterhouseCoopers Oy was re-elected to act as the Auditor of Metso until the end of the next Annual General Meeting.
The Annual General Meeting decided to establish a Nomination Committee of the Annual General Meeting to prepare proposals for the following Annual General Meeting regarding the composition of the Board of Directors and director remuneration. Representatives of the four biggest shareholders are elected to the Nomination Committee; the Committee additionally comprises as expert members the Chairman of the Board of Directors as well as one member who is appointed by the Board of Directors from among its members who is independent of significant shareholders.
Members of Metso board committees and personnel representative
Our Board of Directors elected members from among the Board for the Audit Committee and Remuneration and HR Committee at its assembly meeting on March 31, 2009. The Board's Audit Committee consists of Maija-Liisa Friman (Chairman), Arto Honkaniemi and Pia Rudengren. The Board's Remuneration and HR Committee consists of Jukka Viinanen (Chairman), Christer Gardell, Yrjö Neuvo and Jaakko Rauramo.
Metso's personnel groups in Finland have elected Jukka Leppänen as the personnel representative. He participates in the meetings of our Board of Directors as an invited expert, and his term of office is the same as the Board members' term.
Shares, options and share capital
At the end of June, our share capital was EUR 240,982,843.80 and the number of shares was 141,754,614. The number of shares includes 360,841 Metso shares held by the parent company and 44,318 Metso shares held by a limited partnership consolidated in our consolidated financial statements. Together these represent 0.29 percent of all the shares and votes. The average number of shares outstanding in January-June of 2009, excluding Metso shares held by the company, was 141,420,062.
During February we executed a repurchase of 300,000 of our own shares relating to our incentive program announced in October 2008 (Metso Share Ownership Plan 2009-2011). We purchased our own shares with the distributable funds thus reducing distributable non-restricted equity. We purchased the shares at market price in public trading on the NASDAQ OMX in Helsinki Exchange. The average purchase price per share was EUR 8.28 and the total amount EUR 2,483,495.48.
Our market capitalization, excluding Metso shares held by the company, was EUR 1,880 million on June 30, 2009.
Share ownership plans
Share-based rewards for the 2008 share ownership plan were distributed in March 2009 based on the earnings criteria determined by our Board of Directors. The plan targeted around 100 of our executives, of which 60 met a certain part of the criteria, including the entire Executive Team. The number of shares distributed as rewards was 34,265, corresponding to approximately 0.02 percent of all Metso shares. Members of our Executive Team received 6,996 shares. The maximum reward from the plan was limited to each person's annual salary.
In October 2008, our Board approved a new, share-based incentive plan for the Metso Group management. The plan is called Metso Share Ownership Plan 2009-2011 (SOP 2009-2011). The plan includes one three-year earnings period and is initially targeted at about 100 key managers, out of which 90 decided to participate. The maximum number of shares to be allocated in the incentive plan is approximately 376,000 Metso shares obtained in public trading, therefore, the plan will have no diluting effect on the share value. More information on SOP 2009-2011 can be found in our Annual Report 2008.
Trading of Metso shares
The number of Metso Corporation shares traded on the NASDAQ OMX Helsinki Exchange in January-June 2009 was 196,227,978 shares, equivalent to a turnover of EUR 1,948 million. The share price on June 30, 2009 was EUR 13.30 and the average trading price for the period was EUR 9.93. The highest quotation during the review period was EUR 15.03 and the lowest EUR 7.03.
Metso's ADSs (American Depositary Shares) are traded in the United States on the OTC market. On June 30, 2009, the closing price of an ADS was USD 18.74. Each ADS represents one share.
Disclosures of changes in holdings
On March 24, 2009, UBS AG's group holding in Metso's shares exceeded the 5 percent threshold. The holding amounted to 7,541,753 shares, which corresponds to 5.32 percent of the paid up share capital and votes in Metso.
On March 27, 2009, UBS AG's group holding in Metso's shares fell below the 5 percent threshold. The holding amounted to 561,306 shares, which corresponds to 0.40 percent of the paid up share capital and votes in Metso.
There were no changes in holdings during the second quarter of the year.
In January, Moody's Investor Service confirmed Metso's Baa2 long-term credit rating and changed the outlook from stable to negative.
In February, Standard & Poor's confirmed Metso's BBB long term credit rating and changed the outlook from stable to negative. At the same time our short-term credit rating was lowered from A-2 to A-3.
There were no changes in credit ratings during the second quarter of the year.
Metso's Financial Reporting in 2009
The Interim Review for January-September 2009 will be published on October 29.
Metso is a global supplier of sustainable technology and services for mining, construction, power generation, automation, recycling and the pulp and paper industries. We have about 28,000 employees in more than 50 countries. www.metso.com
Further information, please contact:
Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 (0)204 84 3000
Olli Vaartimo, Executive Vice President and CFO, Metso Corporation, tel. +358 (0)204 84 3010
Johanna Henttonen, Vice President, Investor Relations, Metso Corporation, tel. +358 (0)204 84 3253
Metso Corporation
Olli Vaartimo
Executive Vice President and CFO
Kati Renvall
Vice President, Group Communications
NASDAQ OMX Helsinki Ltd
www.metso.com
Metso Interim Report Q2/2009 Download
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In the spirit of giving back to the community, a group of NEHA staff volunteered at a Habitat for Humanity build day! Habitat for Humanity is a non-governmental, nonprofit organization that builds affordable housing for hardworking families. If you're not familiar with the organization, you can learn more here: http://www.habitat.org/. We spent the Saturday before Thanksgiving with about 30 other volunteers, working on the interior and exterior of row homes, which will house five families by the beginning of December.
It was a fantastic opportunity to work with colleagues outside of our typical work setting, and meet others with similar community assistance based goals.
Having a home, whether it is a condo, townhome or single family dwelling is an important part of life. And making sure that home isn't making you or your family sick is even more important. In 1999, The U.S. Department of Housing and Urban Development (HUD) launched its Healthy Homes Initiative, a program in which children and families are protected from housing-related environmental health hazards, such as mold, lead, allergens, carbon monoxide, pesticides and radon. These hazards affect the air quality of homes and can ultimately lead to chronic illnesses such as asthma and damage of the central nervous system. Environmental health professionals have historically worked to eliminate these hazards, some of which were once widely accepted (i.e. lead in paint), and today continue to monitor and mitigate these hazards through a variety of interventions and educational efforts. We continue to monitor hazard levels in homes to reduce harm and protect public health, and ensure that the homes being built today are held to a standard that will ensure the highest quality of health for its residents.
This year, NEHA and HUD Healthy Homes are teaming up to host the Annual Education Conference (AEC), which will take place in San Antonio, Texas from June 13-16. The Conference provides environmental health professionals an opportunity to connect and continue their professional education in fields ranging from climate change to emergency preparedness among many, many others. The field of environmental health continues to grow and evolve and the AEC provides opportunities to build a professional network and learn about the latest developments. You can find more information here: http://www.neha.org/aec.


The eSuite is a desktop package of applets that includes email, word processing, and a spreadsheet, all running on any device that supports Java.
NEW YORK--Lotus Development joined a growing league of Java endorsers in unveiling its long-awaited Java-based business applets and tools package here today.
In a theater at the Millennium Broadway Hotel, Lotus president Jeff Papows introduced Lotus eSuite, a set of Java applets formerly code-named Kona.
Lotus, along with Oracle and Sun Microsystems, also used the occasion to launch a new architecture called the "Webtop specification," which the companies are describing as an open Internet standard for Java-based network computing.
The companies said the Webtop specification will allow developers to build applications to a single user interface for network computers (NCs), personal computers (PCs), and other devices. The full specification, which the companies plan to license, will be available "shortly," according to a press release issued today.
The eSuite product line features eSuite Workplace, a desktop package of applets including email, a word processor, spreadsheet, calendar, chart presentation graphics, and an address book. All run on any device that supports Java, including NCs and PCs.
The product line also includes eSuite DevPack, a variety of applets and tools that allows developers to create Internet applications. DevPack also includes LotusInfoBus, a JDK (Java Developer Kit) standard mechanism for data-sharing between applets jointly developed with Java kingpin Sun.
eSuite is an attempt by Lotus to give corporate network users a slimmed-down set of applications that provide only the functions absolutely necessary to a user's routine tasks. The applications are Java "beans," which means they adhere to the JavaBeans standard and can be "glued" together using Java development tools to make new applications. Each bean container can hold other beans, so a word processor document could host a spreadsheet component, for example.
Papows said WorkPlace is expected to be available in the first quarter of 1998, priced at $49 per user, while DevPack will be available the same quarter of 1998 for $1,495 per single processor. Broad beta testing for the WorkPlace applets for PCs and NCs will begin in December of this year.
Lotus's SmartSuite 97 is scheduled for an upgrade that will let it run eSuite applications as early as next year, according to Lotus executives.
During his speech, Papows also highlighted broad support from Sun, Oracle, Netscape Communications, America Online, and Novell, which all plan to use eSuite applets in some form in future products.
For instance, Sun plans to run eSuite WorkPlace on its JavaStation network computer. Oracle said it will offer eSuite applets as an option to its Web-based collaboration and database messaging package InterOffice, while its affiliate company, Network Computer Incorporated, will offer the Lotus suite as an option to customers who use its NC Desktop. And AOL will distribute its instant messaging service, Instant Messenger, with Lotus eSuite Workplace and SmartSuite and Notes as well.
Papows described the newest phase of computer development, led by Java, as the convergence of three technologies--email, groupware, and the Internet.
He insisted that his company is not leaving its flagship SmartSuite product line behind. A large part of the market "is browser-driven. For them we need to take a different approach," he said.
Dominated by Microsoft Office in the business application market, both Lotus and Corel turned to Java to try to pull disgruntled users and network administrators away from the Microsoft-Intel platform's ever-escalating processor and hard disk requirements.
Corel, however, has toned down its Java plans in the wake of larger than expected losses. Meanwhile, Lotus has shifted the focus of eSuite from end-user applications to the user interface and framework announced in conjunction with Sun and Oracle.
Admitted Mary Wardley, a research manager for International Data Corporation, "I didn't see that coming. The company shifted from the importance of the applet to the user interface. I have some concerns whether the commitment to the UI lessens the applet end of the product," she said.
Worse, Lotus may have fallen short on its graphical user interface (GUI) design. "I was expecting more of a Web-GUI look. The Web-like interface is becoming more prevalent in our life. I think they may be bucking the trend by introducing a new [NC]-type interface."
The company delayed the release of eSuite by two months to do some additional tweaking to the user interface.


The Epson C66 is a great printer for those everyday printing jobs. There'll come a time when your Epson C66 will run out of printer ink, and when that happens you'll know that fresh Epson C66 ink is generally quite pricey. But you have no need to get stressed about dishing out the steep costs you'll find on the high street because right here at InkQatar you can buy all the Epson C 66 cartridges you'll want at ultra competitive prices. Spend less cash on your ink by shopping with InkQatar!
It makes no sense to fork out so much for the C-66 original cartridge or C66 compatible ink down the high street when it is far easier to save a load of cash buying with InkQatar. You can have total confidence when ordering Stylus C66 ink cartridges from us because every single one is underwritten by a straight forward 30 day money back guarantee. Don't forget to take into consideration that every purchase also comes with free delivery, generally arriving at your address on the following day!
Aimed at home and office users, the Epson Stylus C66 is integrated with the company's best technologies to promise the best colour photo and document black-and-white printing. Output is downright impressive when it comes to text and acceptable for photos, but its overall efficiency for office applications remains questionable because of print speeds.
The Epson Stylus C66 inkjet printer resembles its predecessors in terms of appearance and specifications. The Stylus C66 stands out with its sleek and contemporary frame that measures 460.2 wide, 302.3mm tall, and 437.4mm deep (with the trays extended) It weighs 4.41kg. The minimalist control panel sits on top of the device in front of the paper input feed, while the output tray extends in the bottom front centre of the device.
DURABrite inks are integrated into the Epson Stylus C66 colour printer so output becomes water and fade-resistant as soon as it dries on any type of media. Text output is impressive for an inkjet printer, while photo quality is acceptable. The low initial price makes the Epson Stylus C-66 ideal for the budget-conscious. The bundled web-to-print and photo editing software is good for beginners.
Photo printing takes time with the Epson Stylus C66 colour inkjet printer and speeds are quite sub-par for black-and-white documents, too. Costs per page are significantly higher than the competition because of low-yield ink cartridges. Users inevitably find themselves spending more on inks despite the separate ink cartridge technology used by the C66. The Epson Stylus C66 printer is aimed at offices, too, but it lacks networking options, which may enhance productivity in that kind of setting.


Remember That Time Remy Ma Went To Jail For Shooting Her Friend?
Rapper spent six years in jail.
Everyone is talking about Remy Ma's lyrical assault on Nicki Minaj in "Shether." For some fans, the song may have come out of nowhere. But for aficionados of rap, Remy Ma has been an active part of the New York City scene since 2000. With appearances alongside the late Big Pun, Fat Joe and Eminem, the Bronx native had a promising career that was halted due to altercations with the law.
In July 2007, Remy Ma (born: Reminisce Smith) was arrested outside of New York City hot spot Pizza Bar surrounding the shooting of her friend. According to NY Daily News, Remy reportedly had a verbal altercation with 23-year-old Makeda Barnes-Joseph. A 911 call about gunfire brought authorities to the scene. There, Barnes-Joseph was found shot in her lower torso, sometime before 4 a.m.
The victim later said that the shooting was over money; Remy allegedly accused her of stealing about $3,000 and shot her twice. "What hurts me is that when she shot me she went over and dumped the bag," the victim said, per NY Daily News. "She didn't even say, 'Oh, my God, I just shot her.' That's what hurt me so much."
Remy pled not guilty to charges of attempted murder, first-degree assault and weapons charges. She was initially released with a $250,000 bond but later charged with witness tampering and gang assault. Prosecutors claim Remy's boyfriend had some people beat up, including the boyfriend and a friend of a witness.
According to the NY Times, Remy's team claimed that she fired the gun accidentally during a struggle with Barnes-Joseph. Prosecution claimed that Remy shot her friend on purpose and then drove away, only to abandon her car and get into a taxi.
On March 28, 2008, Remy was convicted of intentional assault. She was sentenced to eight years in prison (after facing 25). "I'm not a menace to society," the 26-year-old rapper and mother of one said in court per NY Daily News. "I'm not a thug." The judge did not find her repentant, calling her an "extremely angry woman" who "does not take any responsibility for her actions."
The day before sentencing, Remy and her man Papoose tried to tie the knot at Rikers Island. The jailhouse ceremony was called off when he allegedly tried to smuggle a key in with him. "The key that was found today easily opened handcuffs that we and other law enforcement officials use," an official said. Later, they did tie the knot.
On August 1, 2014, Remy was released from the Bedford Hills Correctional Facility for Women after serving over six years. Earlier this year, she told Fader that she is deeply affected by the experience. "I'm almost positive I have some type of PTSD. I really went through a traumatic experience. Almost a decade of my life was consumed by the prison system." She says that she's more grounded now. "Well, I would definitely say I'm not as reckless as I used to be...I'm a little bit smarter now, and more worried about my business."


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Paul Alam
Senior Property Manager, Belle Property St George
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It's time for contact centers to step out of the shadow of marketing. What contact centers need from marketing is information, not instruction.
Oh, no. Here we go again. The debate over control of the contact center flares anew. In an April report by analysts Elana Anderson and John Ragsdale, Forrester Research asserts "Why Marketing Should Own the Contact Center." This is neither a revolutionary concept nor an original one. The last time marketing was given responsibility for contact center transactions was in the period between 1996 and 1999, when the Web first became hot. Marketing departments owned Web sites and wanted to handle customer inquiries that came from this channel.
This idea sounded logical at the time. But it wasn't. It was painful for companies and their customers. Marketing departments weren't prepared for or equipped to handle the deluge of e-mail and Web-based inquiries – the primary reason contact centers were built. After receiving many complaints about customer service on their Web sites, marketing departments quietly passed responsibility for these inquires to their contact centers, where they belonged.
Forrester's conclusion and action item are wrong. The mission of marketing is to analyze and spot trends in customer data to create revenue opportunities, not to respond to customer inquiries. Marketing departments should not "own" contact centers, as they're not prepared or even interested in dealing directly with large numbers of customers.
Contact centers have more meaningful interactions with customers than any other area of a company. A company that can optimize these interactions will achieve three essential goals: providing outstanding customer experiences, increasing revenue and retaining customers.
Putting marketing in charge of contact centers won't bring about these objectives. Instead, it places contact centers at risk of losing sight of their primary customer service mission. Without a strong focus on service, contact centers stand little chance of leveraging customer relationships for incremental revenue.
Forrester's report accurately pointed out the "declining effectiveness of traditional marketing tactics." Ironically, the report cited this trend as a reason to give marketing responsibility for managing contact centers. There are many reasons why marketing departments are less successful than in prior years. Federal Do-Not-Call legislation, passed last fall to limit outbound calling, is one possible explanation; anti-spam legislation is another. But marketing performance was already declining even before the introduction of these external regulations. The analysts' observations actually suggest another conclusion: rather than demanding control of contact centers and changing contact centers' missions from service to sales, marketing departments themselves should concentrate on becoming more effective. It doesn't make sense to reward marketing departments for poor performance by giving them new responsibilities they've already proven they can't handle.
It's time for contact centers to step out of the shadow of marketing, and instead establish parity. Companies must promote contact centers within their organizations so that they report to the same executives as sales and marketing departments. They should compensate contact center managers in the same pay range as their peers.
Executive management must empower contact centers by converting them from cost centers to profit centers, and giving them corporate revenue goals aligned with departmental objectives.
Contact centers have been eager to contribute to corporate revenue goals for years and welcome the opportunity to do so. They have great potential as sales channels because customers share their preferences and needs during service interactions. But contact center agents do not have access to the marketing information needed to sell in real time, at the point of customer-initiated contact. What contact centers need from marketing is information, not instruction.
That doesn't mean contact centers should get a free ride. They, too, must open up their resources and freely share customer information with all customer-facing departments on a timely basis. Marketing, after all, does need help and support from contact centers. Both marketing and sales teams are increasingly dependent upon real- or near-real time customer insights that are available in contact centers. If contact centers were better at sharing customer information, there wouldn't be as great a need to "own" them. But marketing does not want and is not prepared to handle the day-to-day responsibility of managing customer interactions. If you have any doubt, I suggest that all marketing staff be required to do a three-month rotation getting to know their customers by answering inquiries in contact centers. I've never seen this done, but I suspect that you would have a hard time filling marketing positions if you did. For marketing departments to be able to manage contact centers, they must be prepared to handle all aspects of customer interactions – from simple requests to irate callers.
Marketing departments that are out of touch with customer needs and that are decreasing in effectiveness should not be telling contact centers how to deliver customer service. What makes more sense is for companies to introduce shared revenue and profitability goals for sales teams, marketing departments and contact centers so that these three groups can put politics behind them and work together. Companies should implement performance management applications to measure adherence to common corporate goals. When these groups are on equal footing, they bring out the best in each other and provide the best customer experience.


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A hoppy saison, it's launch day, that's all the info I have.
Earned the Middle of the Road (Level 63) badge! Earned the Photogenic Brew (Level 15) badge! Earned the Brewery Pioneer (Level 32) badge! Earned the Tower of Beer (Level 6) badge!
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Surprised. Really not to my tastes.
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My favorite thing about blogging is posting my mediocre writings and then going to the blogs of those who "like" them and, on occasion, finding treasures of writing like I've found here at your blog. I am commenting on this particular post because it truly touched me after reading some of your other posts.
What is so beautiful about your writings is your honesty which expresses your natural human contrasts. Here in this post I experience your sincere depth of spirituality and in other writings I experience you being far to hard on yourself. To be honest, deep, sincere spirituality often comes with the contrast of being hard on ourselves, but it doesn't have to be that way. Even within some of the darkness and even sadness of your writings, I can see such a brilliant light shining through your words and your feelings.
Whether you see it or not. from what you express, I see such a beautiful heart within you. No matter what you write. No matter how angry and frustrated it may sound, there is no escaping the light and hope that shines brightly through your words coming directly from your heart.
Thank you so much for taking the time to write this out. I also enjoy finding treasures of writing, like ones that I've read on your blog as well.
I thought a lot about what you said – that I can be too hard on myself, but I also try to shine light through my words. I actually wrote my most recent post with those words in mind.
Thank you again for your encouraging comment. I hope to keep reading more amazing writing from you, and I hope you continue to read mine as well.
I don't often comment so I really didn't know how you would take what I wrote. I'm happy that you saw in it what I intended. You do have a way of perceiving spiritual depth, it is easy to see this in your writing.
When I first read you poetry and then saw the name of your blog, "Kira's Hymns" I thought, "These are truly personal hymns." Very beautiful hymns.
I'm not Judeo-Christian but I have studied the bible. There is one book in the bible that I truly enjoyed. It is Psalms. The reason I enjoy it is because of how personal it is. The spiritual expressions of a deeply spiritual man as he strives to reconcile with his God. He wrote from a great darkness yet there was always a great light of hope that came through his words.
Because of this, even though there was great suffering and darkness within his words, one can't help but see the beauty within his words. It reminds me of how we often neglect and even ignore the beauty that is within the darkness because we are trying so hard to always be in the light. Like running through a beautiful garden simply to get to the other side while missing all the beauty that was within the garden.
As I read your current post, "Free Fall" I thought of Psalms. In a sense, you are writing your Psalms. As I read your writings I can't help but feel many things. My first feeling is that of not wanting you to suffer or feel bad. Then I experience the beauty within the darkness that you express. Then I experience the powerful light that comes through your words. In the end, I can only sigh as I would in seeing a beautiful sunset or a garden filled the most delightful flowers, inhaling their scents until I nearly fall over from the purity that it brings to my heart.
Basically, in a long way, I am saying something that my Goddess once told me when I was feeling ugly, dirty and no good. She said, "Stop. If only you knew how beautiful your spirit is you would know why I love and care for you so much. I adore you. You are so beautiful and I can't understand how you could ever feel like you're not." it took me a little while for this to sink in but it changed me. It freed me. It allowed me to start viewing myself in universal or eternal terms rather than in the finite terms of this life.
Very passionate writing, well done!


The arrival of Windows 10 is the next big thing every Windows OS user is looking forward to. Of course, the latest Windows version has many distinctive features, but Microsoft's promise to provide free Windows 10 upgrade to everyone is another major cause of wait for users running pirated copies.Unexpectedly, Microsoft has pulled back its support for the non-genuine versions of Windows 7 and 8.1.
Microsoft responded to all customer queries regarding how this will work for genuine and non-genuine Windows. The hardware and software giant commented on its blog post stating that Genuine Windows 7 and Windows 8.1 customers will be upgraded to Windows 10 for free and will continue receiving ongoing Windows innovation and security updates for the supported lifetime of that device.
On the other hand, Non-Genuine users are suggested to purchase a licensed copy of the ubiquitous Windows to save their personal data from getting exposed publicly. Microsoft said that the Windows 10 update will not be free for Non-Genuine Windows devices and customers have to pay a certain cost depending on what the offer is. As per the company statement, some offers would be run by Microsoft to shift users from the pirated version to the original. The new version will be accessible on devices running pirated copies, but that will again be a non-genuine version. It will come with a watermark notifying its piracy.
Microsoft hasn't clarified the pricing scheme and has asked to stay tuned for further announcements. Windows 10 is scheduled to release this summer. It will release in 190 countries and will support 111 languages. The fresh Windows OS will bring major upgrades and innovative features like Cortana, Continuum and many more. Read more about the same here.


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"We're All So Proud And So Happy:" Mom Overjoyed As Her Son With Down Syndrome Marries Sweetheart Who Has The Same Condition
Down Syndrome affects a lot of people and in many cases, parents of children with this condition often worry when it comes time for the child to enter the dating world.
According to GlobalDownSyndrome, the important thing for any parent to remember at a time like this is that a positive attitude matters.
Parents should ensure the children have active social lives which gives them ample opportunity to meet potential partners. This can sometimes require the parents to be more involved in coordinating, planning, and transporting their child, at least initially. But in the end, a parent should be a good role model and be attentive to what the child needs.
Marcel Jancovic / Shutterstock.com
One mom celebrated the fact that her son, who was born with Down Syndrome, met and married the love of his life.
26-year-old Kieran Duffy and 21-year-old Emmie Houckham, who also had Down Syndrome, tied the knot in August 2019 which made their friends and loved ones very happy.
Kieran and Emmie met in 2013 at a camp for special needs people and things blossomed from there.
Kieran's mom Tessa opened up to Kent Online about how the couple's relationship was. She said that the two were very involved in planning their big day, from how the venue would be decorated to the songs that were played.
In Tessa's opinion, Kieran and Emmie were the perfect match.
Say if they go out to a restaurant they've not been to before, Kieran might struggle to read the menu, whereas Emmie would be able to do so fluently. But if they needed to ask for help, for example, Kieran has more confidence, so he wouldn't be afraid to do that.
Even though they were very happy together, Tessa said that, like any average couple, they had their ups and downs.
She said that Kieran loved his alone time whereas Emmie loved being around him all the time.
Sometimes he'll ring me up and say 'how do I get her to just go up to bed?' or 'how can I just get five minutes on my own?' But you could argue that's the case for an awful lot of couples.
Overall, the couple's family and friends were very happy about the union and they believed these two were the perfect fit.
We're all so proud and so happy.
Dating with Down Syndrome
According to SpecialBridge, one of the most important things about dating, when you have Down Syndrome, is to take things at your own pace.
You can lessen the pressure by going on more active dates or a double date so you don't get overwhelmed by constantly needing to talk. In addition, you may get rejected by some people but it's important to keep trying and stay open to possibilities.
A post shared by David Matthew Cowan (@davidcowan_1234) on Oct 29, 2019 at 7:37pm PDT
Love stories are beautiful to read. And in cases like this where two people have their own challenges to cope with, it can get complicated. But seeing how they have been able to maintain that love and closeness regardless of the odds, makes for a pretty powerful tale.
Relationships Down Syndrome Health
3 Useful Kitchen Hacks To Make Things Simpler


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IT services giant swoops for Hub Network Services in £1.45m deal
Multi award-winning SysGroup wants to become the leading provider of managed IT services to UK businesses
Tom HoughtonNorth West Business Editor
IT services giant SysGroup swoops for Hub Network Services in £1.45m deal
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North West IT services firm SysGroup has swooped for a fellow tech firm in a deal worth £1.45m.
SysGroup PLC today announced the acquisition of Bristol -based Hub Network Solutions (HNS) - and said the cash deal showed its "ambitious growth strategy" to become the UK's leading provider of managed IT businesses.
It's the Liverpool city centre firm's second acquisition of 2019, following its deal for Certus IT back in February.
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Adam Binks, CEO of SysGroup, said: "I am thrilled to have made our second acquisition of the year and look forward to working with the HNS team in due course.
"The acquisition of HNS further complements our existing managed services, enabling us to offer our customer base an even wider range of enterprise-grade managed connectivity services alongside our existing managed IT services portfolio."
HNS, established in 1997, is a managed connectivity and co-location solutions provider.
Matalan creating 200 jobs as discount retailer defies the high street downturn
Its customers include some of the UK's most well-known brands, including the Welsh Audit Office and Samaritans.
According to SysGroup, which is one of a small number of stock market-listed firms in Liverpool, the deal will see HNS' network infrastructure, supply agreements and experience in the industry help expand SysGroup's existing managed IT and cloud-hosting services.
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It's hoped that will enable SysGroup customers to benefit from an "enhanced portfolio of services and solutions" that help address the "increasingly complex IT landscape".
Mr Binks continued: "As SysGroup continues to grow, we're excited by the prospects that lie ahead on our journey to become the leading provider of managed IT services to businesses in the UK, and the addition of the HNS team to the group is a big step forward on that journey.
"Through this time of growth, we're committed to ensuring that our enlarged customer base continues to receive exceptional levels of service and support as well access to our best-of-breed solutions."
Liberal DemocratsMake all public transport in Wales free for under 25s say Liberal DemocratsIt said the move would reduce car polluting journeys and boost the job prospects of young people
BGF report record investment levels into Welsh firms
DealsLast year it invested more than £26m in two equity investment deals as well as seeing a profitable exit.
Exeter IFA Shipman Group acquires wealth management firm
DealsAcquisition of MHA Monahans Wealth Management follows that of Cathedral Financial Management in 2021
Government steps in to try and end financial rows which threaten very future of Derby County Football Club
Football League ChampionshipAlmost 55,000 fans have signed petition asking for sports minister to help club fight way out of administration
Unemployment continues to fall in the East Midlands, in line with national trends
EmploymentDWP says 84,000 registered as unemployed across region – down 59,000 on a year ago