Metso breakfast meeting in London October 27, 2006 at 8:30. Jorma Eloranta, President and CEO, Metso Corporation

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1 Metso Metso breakfast meeting in London October 27, 26 at 8:3 Agenda Jorma Eloranta, President and CEO, Metso Corporation Matti Kähkönen, President, Metso Minerals Pasi Laine, President, Metso Automation Q&A Metso Corporation 26 1

2 Forward looking statements 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. 3 Metso Corporation Hightlights of the Q3 results Metso Corporation 26 2

3 Highlights of the third quarter Confident outlook for 27 Q3/6 Q3/5 Change % Orders received, EUR million Order backlog, EUR million Net sales, EUR million Operating profit, EUR million Operating profit -% EPS, EUR 1,321 3,22 1, ,59 1, Metso Corporation Operating environment in July September 26 Operating environment remained favorable. Construction, mining and energy industry markets good. Pulp and paper industry markets satisfactory. Demand for aftermarket services good in all customer industries. 6 Metso Corporation Metso Corporation 26 3

4 Orders received - rolling 12 months Million EUR 6, 5, 4, 3,989 4,17 4,42 4,135 4,745 5,93 5,28 5,685 3, 2, 1, 1-12/4 4/4-3/5 7/4-6/5 1/4-9/5 1-12/5 4/5-3/6 7/5-6/6 1/5-9/6 7 Metso Corporation Development of order backlog (continuing operations) Million EUR 3,5 3, 2,5 2, 1,5 1, , , , ,919 1, , , , , , ,22 8 Metso Corporation Metso Corporation 26 4

5 Metso Quarterly performance Million EUR % 1,4 14 1,2 1, ,45 1, Rolling 12 months performance Million EUR 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, , % 4, /5 4-6/5 7-9/5 1-12/5 1-3/6 4-6/6 7-9/6 1-12/4 4/4-7/4-1/4-1-12/5 4/5-7/5-1/5- Net sales Operating profit -% Q4/4 excl. Finnish TEL pension liability of EUR 75 million 9 Metso Corporation /5 6/5 9/5 3/6 6/6 9/6 Cost structure Gross margin -% and S,G&A -% (rolling 12 months) % /4 4/4-3/ /4-6/ /4-9/ /5 4/5-3/ /5-6/ /5-9/ Gross margin -% S, G & A -% 1 Metso Corporation Metso Corporation 26 5

6 Metso Paper Quarterly performance Rolling 12 months performance Million EUR % Million EUR % 1, ,8 9 1,662 1, , , , /5 4-6/5 7-9/5 1-12/5 1-3/6 4-6/6 7-9/6 1-12/4 4/4-7/4-1/4-1-12/5 4/5-7/5-1/5-3/5 Net sales Operating profit -% Q4/4 excl. Finnish TEL pension liability of EUR 4 million 6/5 9/5 3/6 6/6 9/6 11 Metso Corporation Metso Minerals Quarterly performance Million EUR Metso Corporation Rolling 12 months performance % Million EUR % 16 2, , , , , , , , /4 4/4-7/4-1/4-1-12/5 4/5-7/5-1/5-1-3/5 4-6/5 7-9/5 1-12/51-3/6 4-6/6 7-9/6 3/5 6/5 9/5 3/6 6/6 9/6 Net sales Operating profit -% Q4/4 excl. Finnish TEL pension liability of EUR 5 million Metso Corporation 26 6

7 Metso Automation Quarterly performance Rolling 12 months performance Million EUR % Metso Corporation /5 4-6/5 7-9/51-12/51-3/6 4-6/6 7-9/ Million EUR Net sales Operating profit -% Q4/4 excl. Finnish TEL pension liability of EUR 14 million /4 4/4-7/4-1/4-1-12/5 4/5-7/5-1/5-3/5 6/5 9/5 3/6 6/6 % 9/ Cash flow and gearing Million EUR Net cash generated by operating activities /5 1-9/6 7-9/5 7-9/6 % Gearing Metso Corporation Metso Corporation 26 7

8 Short-term market outlook No significant changes in Metso s market outlook. Favorable market situation expected to continue in the construction, mining and energy industries. The overall pulp and paper industry demand expected to remain satisfactory. 15 Metso Corporation Short-term financial outlook Based on the strong order backlog and the favorable market outlook, it is estimated that Metso's good financial performance will continue also for the rest of the year. Metso's net sales are estimated to grow by clearly more than 1 percent in 26. Continued favorable market situation, strong order backlog and ongoing internal development projects give a positive outlook for Metso's financial performance in 27. The estimates concerning net sales and operating profit do not include any changes resulting from acquisitions or divestitures. 16 Metso Corporation Metso Corporation 26 8

9 Metso s strategy and actions Metso is in good shape to grow Metso s financial performance has improved consistently. Profit improvements have been significant, but there is still further potential. Strong balance sheet to support growth. Profitable growth strategy intact - Exploiting the growth opportunities of the favorable markets in full - More emphasis on growing the aftermarket business - Building sustainable profitability over the business cycle 18 Metso Corporation Metso Corporation 26 9

10 Metso s updated financial targets Growth Average annual net sales growth of more than 1% Profitability Operating profit margin (EBIT-%) of more than 1% Capital structure Solid investment grade status Dividend policy: Annual dividend at least 5% of EPS 19 Metso Corporation Net sales growth -% vs. target % Target > 1% /25 1/25-9/26 2 Metso Corporation Metso Corporation 26 1

11 Operating profit -% vs. target % Target > 1% /25 1/25-9/26 21 Metso Corporation From restructuring to profitable growth Profitable growth Focus in Organic growth Complementary acquisitions Continuous improvement of competitiveness and profitability Focus in Clear profit improvement in core businesses Releasing capital from non-core operations Transformation from an equipment supplier to a life cycle service provider 22 Metso Corporation Metso Corporation 26 11

12 Delivering profitable growth Strategic initiatives Emerging markets Complementary acquisitions > 1% net sales growth/year Growing markets Aftermarket potential New business concepts, products and services Efficient, global business processes BRIC countries Increased sales & service presence Local sourcing Production & engineering Value enhancing Strategic fit Financial fit Feasibility 23 Metso Corporation Growth and earnings stability through aftermarket business Metso s large installed base offers great potential Further growth in aftermarket business: - more management focus, esp. in Europe and North America - developing new business and service concepts - broadening of consumables offering - complementary acquisitions Metso aftermarket net sales, (roll.12-mont.), EUR million Growth of 21% since (8%) Total EUR 1.7 billion 618 (37%) Metso s aftermarket personnel 6 Total 8,3 29 Metso aftermarket offering Smaller rebuilds and process improvement Training and maintenance services 911 (55%) 48 Consumables Wear and spare parts Metso Paper Metso Minerals Metso Automation 24 Metso Corporation Metso Corporation 26 12

13 Growth through acquisitions Metso Acquisition Process Texas Shredder, Inc. (August 25) Svensk Gruvteknik AB and Svensk Pappersteknik AB ((October 26) Shanghai-Chenming Paper Machinery Co. Ltd (September 26) Aker Kvaerner Pulping & Power (purchase agreement April 26, target to finalize by end- 26) Strategic Fit Financial Fit Feasibility Complement product/ service offering Stronger presence in emerging markets Aftermarket potential Closing geographical gaps Target business to be shortly earnings-enhancing Availability Anti-trust requirements Environmental liabilities Unusual risks 25 Metso Corporation Metso and profitable growth Consistently improving financial performance Strong order backlog Favorable outlook Metso Paper: continued profitability improvement and growth in aftermarket business Metso Minerals and Metso Automation fully exploiting the market growth while ensuring yearly improving profits 26 Metso Corporation Metso Corporation 26 13

14 Metso breakfast meeting in London October 27, 26 Matti Kähkönen, President, Metso Minerals Presentation content Market situation Management agenda Operations model Metso Corporation 26 14

15 Market situation Construction segment Quarries and crushing projects Contractors Engineering and consulting companies Mining segment Mining and industrial minerals companies Mining contractors Engineering and consulting companies Metal recycling segment Metal recycling industry Business environment Good demand Drivers: Active road network and infrastructure development boost aggregates prices and demand Customers are outsourcing services Trend towards mobile solutions Business environment Strong demand Drivers: Emerging economies and high metal prices drive extensive investments Customers are outsourcing services and consolidating. Trend towards larger equipment and projects Business environment Strong demand Drivers: High commodity demand accelerates scrap demand. Mining boom and high metal prices Customers are consolidating 29 Metso Corporation Metso Minerals Management Agenda Successful implementation of the new customer segment focused strategy and structure Development of new concepts and products for life cycle services Strengthening our presence in the emerging markets - India, China and Russia Continuous improvement of productivity for better profitability Further growth through acquisitions and developing our offering Smooth roll-out and implementation of SAP 3 Metso Corporation Metso Corporation 26 15

16 Operations model Structure optimized to serve Metso Minerals core customer segments: - Business lines to develop intensive customer relations, life cycle services, offering, and process knowhow within the customer segments. 31 Metso Corporation Summary Metso Minerals target markets are developing positively and the demand for customers end products varies from good to strong. Metso Minerals will adjust its operations model and strategy to better respond to the needs of its main customer segments. Further development of service business and product portfolio is essential. Metso Minerals targets growth also through stronger foothold on the emerging markets, improved productivity, and by complementary acquisitions. 32 Metso Corporation Metso Corporation 26 16

17 Metso breakfast meeting in London October 27, 26 Pasi Laine, President, Metso Automation Metso Automation Business Main products Markets Competitors Positioning Process Automation Systems Process automation systems Specialty analyzers Life cycle services Target market: EUR 4,8 billion MA Net Sales: EUR 257 million Market growth: 4.5% ABB Emerson Honeywell Invensys Siemens Yokogawa Results Flow Control Automated, control-, ESD and manual valves Solutions and intelligent condition monitoring Life cycle services Target market: EUR 6. billion MA Net Sales: EUR 325 million Market growth: 5.6 % Emerson Flowserve Dresser Samson Intelligent reliability Strong process automation market growth mainly due to high O&G prices and high demand for energy resulting in capital investments 34 Metso Corporation Metso Corporation 26 17

18 Excellent product offering for Energy & Process, Pulp & Paper and Energy and Hydrocarbon customers metsodna CR FieldCare DNAforesight Sensodec Neles PaperLab Process automation and information management Machine and Drive controls metsodna CR Jamesbury PaperIQ IQInsight 35 Metso Corporation Kajaani IQProfilers Management Agenda Implementation Secures Profitable Growth Sales Service Operations Key Account Management Strengthen market presence, Improve efficiency Grow service business Build up operations in growing markets Secure competitiveness in established markets Product Line RTD Expand product offering Implement productivity programs Secure long term competitiveness by well-managed product portfolio Grow business through acquisitions 36 Metso Corporation Metso Corporation 26 18

19 Metso breakfast meeting in London October 27, 26 Q&A Additional information Metso Corporation 26 19

20 Metso at a glance Sales by customer industry Other 6% Energy and Power 7% Construction 18% Mining & Recycling 26% Net sales of EUR 4.7 billion (rolling 12-moths) Pulp and Paper 43% Target markets by business area Energy & Power EUR 8 billion (Metso market share <5%) Mining & Construction EUR 12 billion (Metso market share 15-2%) Target markets total EUR 33 billion Pulp & Paper EUR 13 billion (Metso market share 15-2%) Geographical scope Other countries 5% Asia-Pacific 18% South and Central America 13% North America 22% Net sales by market area 1-9/26 Finland 7% Other Nordic countries 5% Other European countries 3% Personnel by area Other countries 6% Asia-Pacific 9% South and Central America 1% North America 15% Other European countries 13% Approx. 23, employees as of Sept. 3, 26 Finland 36% Other Nordic countries 11% Listed on the Helsinki (ME1V.HEX) and New York (MX.NYSE) Stock Exchanges Some 3, shareholders, 7% of shares in non-finnish ownership 39 Metso Corporation Operating through three business areas Metso Paper Net sales EUR 1,8 billion Metso Minerals Net sales EUR 2,1 billion Metso Automation Net sales EUR 6 million Customer offering Pulp and papermaking equipment, processes and services Rock and minerals processing equipment, processes and services Automation systems, valves and services Division of sales 75% Paper 25% Pulp 1/3 new equipment 1/3 rebuilds 1/3 aftermarket 5% Construction 4% Mining 1% Metals recycling 1/2 new equipment 1/2 aftermarket 5% Pulp and Paper 5% Energy 3/4 new equipment 1/4 aftermarket Market position # 1-2 in both Paper and Pulp Consolidated market Leading in selected segments Fragmented market Leader in pulp and paper Nich player in energy Fragmented market Business lines Fiber Paper and Board Finishing Tissue Service Crushing and Screening Minerals Processing Wear Protection and Conveying Recycling Process Automation Systems Flow Control Global 4 Metso Corporation Metso Corporation 26 2

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