TEXT-S&P summary: Metso Corp.

Fri Dec 28, 2012 5:39am EST

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(The following statement was released by the rating agency)

Dec 28 -

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Summary analysis -- Metso Corp. ----------------------------------- 28-Dec-2012

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CREDIT RATING: BBB/Positive/A-2 Country: Finland

Primary SIC: Industrial

machinery, nec

Mult. CUSIP6: 920232

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Credit Rating History:

Local currency Foreign currency

12-Aug-2010 BBB/A-2 BBB/A-2

13-Feb-2009 BBB/A-3 BBB/A-3

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Rationale

The ratings on Finnish capital goods producer Metso Corp. reflect Standard & Poor's Ratings Services' view of its business risk profile as "satisfactory" and its financial risk profile as "modest." We consider the satisfactory business risk profile to be supported by Metso's leading market positions in rock and mineral processing and pulp and paper machinery, its geographically diverse earnings base, and its high share of the less cyclical aftermarket business. Balancing these strengths are Metso's exposure to cyclical demand, price competition in its core businesses, and its high cost base for some operations. The modest financial risk profile reflects what we see as the group's good ability to generate free operating cash flow (FOCF), moderate debt leverage, and strong liquidity. This is somewhat offset by the group's relatively shareholder-friendly dividend policy.

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