Metso Oyj - Company Announcement

Metso to accelerate its profitable growth strategy execution; announces new operating structure and upgrades financial targets

Metso Corporation Company release on August 22, 2008 at 9.30 a.m.

Conference call with CEO Jorma Eloranta and CFO Olli Vaartimo today
at 11 am EEST

Metso's strategic focus in 2008-2012 continues to be on sustainable
profitable growth. To accelerate the strategy execution, Metso's
businesses will be reorganized as of January 1, 2009 with energy and
environment technology introduced as a new platform for growth. Metso
is also upgrading its financial targets and initiating a study with
Goldman Sachs as adviser to assess further value-enhancing
opportunities, including structural options."Metso's profitable growth strategy was launched in August 2005. Our
progress has been strong, and we are reaching the financial targets
set in October 2006 one year earlier than we estimated at the time,"
says Jorma Eloranta, President and CEO of Metso Corporation. "Now it
is time to accelerate the strategy execution by introducing a new
operating structure and more ambitious financial targets."

As of January 1, 2009, Metso's businesses will be reorganized into
three reporting segments:

Mining and Construction Technology, consisting of the current Mining
and Construction businesses. The reporting segment will be headed by
Matti Kähkönen, currently President of Metso Minerals.

Energy and Environment Technology, consisting of the current Metso
Automation and the Power and Recycling businesses, with Metso
Automation's current President Pasi Laine on lead.

Paper and Fiber Technology, consisting of the current Paper and
Board, Tissue and Fiber businesses, will be headed by Bertel
Langenskiöld, currently President of Metso Paper.

In 2008-2012, Metso's mining and construction businesses will
continue to focus on fully exploiting the strong market demand. In
the paper and fiber businesses the focus will be on enhancing Metso's
presence close to its growing customer base in emerging markets and
on a strong transformation to services business. The energy and
environment businesses offer interesting new growth opportunities
based on Metso's current know-how and technologies in the power,
recycling and automation businesses, complemented by value-enhancing
acquisitions."Simultaneously with enhancing our focus on the energy and
environment segment, Automation and Power businesses will naturally
continue to work in close cooperation with Paper and Fiber segment to
develop our product and service offering towards the pulp and paper
industry," Eloranta notes.

Preliminary pro forma figures for the new reporting segments will be
published in conjunction with Metso's Capital Markets Day on
September 2, 2008.

New financial targets
Metso is upgrading its long-term financial targets for 2009-2012. The
following new financial targets replace the previous targets set in
October 2006:

Growth: An average annual net sales growth of more than 10 percent.
The growth will be attained both organically and through
complementary add-on acquisitions. Should Metso make major
acquisitions with a significant impact on its business scope, these
come on top of the 10 percent growth target.

Profitability: Metso's new target is to improve EBITA annually and to
exceed a 12-percent EBITA-margin during 2009-2012.
Return on capital employed (ROCE-%) before tax is introduced as a new
target and it should exceed 25 percent during 2009-2012.
Metso will continue striving to improve its profitability through
operational excellence programs. Metso will also continue its actions
to maintain strong profitability over the business cycle and to
reduce earnings volatility with increased flexibility in its
operating model and by maintaining a good balance between project,
product and services business.

Cash flow: In order to secure a strong operating cash flow, Metso is
establishing a new target for annual cash conversion. The target is
measured by Free Cash Flow/ Net Income. The ratio should be on
average 100 percent during 2009-2012 (excluding the NWC impact of
acquisitions).
Efficient use of capital continues to be an important long-term value
driver for Metso. Operating cash flows in 2009-2012 are expected to
be strong, thus enabling further growth through complimentary
acquisitions while maintaining an active dividend policy.

Capital structure: Metso's target is that its key financial
indicators, capital structure and cash flows support a solid
investment grade in credit rating.

Dividend policy: Metso's target is to distribute at least 50% of
annual earnings per share as a dividend or in the other forms of
repatriation of capital (share buybacks, redemptions, etc)."The decision to accelerate the strategy execution and to introduce
more ambitious financial target setting shows that there is a lot of
further value-creation potential in Metso. In addition, Metso's Board
of Directors and management have decided to seek other
value-enhancing opportunities, including structural options, with
assistance from Goldman Sachs," says Jorma Eloranta.

Metso is a global engineering and technology corporation with 2007
net sales of over EUR 6 billion. Its over 27,000 employees in
approximately 50 countries serve customers in the pulp and paper
industry, rock and minerals processing, the energy industry and
selected other industries.
www.metso.com

For more information, please contact:
Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 204
84 3000
Olli Vaartimo, Executive Vice President and CFO, Metso Corporation,
tel. +358 204 84 3010
Further information for investors, please contact:
Johanna Sintonen, Vice President, Investor Relations, Metso
Corporation, tel. +358 20 484 3253

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.

Invitation to a Conference Call

Metso's conference call will be held today. Jorma Eloranta, President
and CEO, and Olli Vaartimo Executive Vice President and CFO, will
give a short presentation and answer questions regarding Metso's
strategy and new financial targets.

The conference call will be held in English on Friday, August 22, at
- 9.00 - 10.00 am BST (London)
- 10.00 - 11.00 am CEST (Paris)
- 11.00 - 12.00 am EEST (Helsinki)

To participate in the conference call, please dial a few minutes
prior to the start of the teleconference in
- US: +1 334 323 6201
- Other countries: +44 20 7162 0025.

A replay of the conference call will be available from August 22
until September 1, 2008 in
- US: +1 954 334 0342
- Other countries: +44 20 7031 4064
- Access code: 807 782.



Metso Corporation


Olli Vaartimo
Executive Vice President and CFO


Kati Renvall
Vice President, Corporate Communications

Distribution:
OMX Nordic Exchange in Helsinki
Media
www.metso.com