FLSmidth: Interim Report for FLSmidth & Co. A/S for 1 July-30 September 2016. FLSmidth is growing its service activities
(Thomson Reuters ONE) -
Company Announcement no. 18-2016, 09 November 2016
Main conclusions:
* Strong cash flow generation led to significant debt reduction
* Highest order intake from service activities since early 2014
* Sequential improvement in revenue is as expected.
* Corrective actions are being implemented to adjust cost base to lower level
of activity
* Guidance for 2016 unchanged
Group CEO Thomas Schulz says, "Our results for the third quarter are as
expected, with strong activity in the service business as well as continued
pressure on capital orders, especially in minerals. As announced in the second
quarter, we have implemented corrective actions worldwide to adjust our cost
base and to invest in the future."
"The market for mining capex is at a volatile low, and we expect to see the
start of a slow recovery from the end of 2017. Our strength here is our
stronghold in gold and copper processing, where we see good prospects for
brownfield activities and a solid mid-term outlook. The market for new cement
capacity continues to be characterised by pricing pressure. That said, the
pipeline of potential projects is encouraging, and current tendering activity
gives reason to be cautiously optimistic about the mid-term outlook," continues
Thomas Schulz.
Corrective actions
As a consequence of continued low market activity, it was announced in August
2016 that corrective actions would be implemented to compensate for declining
revenue and earnings. The corrective actions include further business right-
sizing, more site closures, management delayering as well as supply chain
optimisation and procurement savings. At the same time it was announced that
investments would be made in value engineering, new sales offices in 'white
spots' and more sales people.
In total, it is anticipated that the corrective actions will result in an EBITA
improvement of DKK 500m in 2017 and lead to one-off costs of DKK 350m. The EBITA
improvement is expected to be largely offset by lower level of activity and
lower margin orders in the backlog. As part of the corrective actions, 600
employees were given notice in September and October 2016.
Guidance for 2016
It is still expected that revenue will be DKK 17-18bn and that the EBITA margin
will be 7-8%, however the EBITA margin is expected to end up at the lower end.
The return on capital employed is expected to be 8-9%. The effective tax rate is
expected to be 29-31% (2015: 32%) and cash flow from investments is expected to
be around DKK -0.3bn excluding acquisitions and divestments. The full year
guidance is based on the assumption that execution of the order backlog will not
be negatively impacted by further market-driven delays.
Key Figures third quarter 2016
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DKKm Q3 2016 Q3 2015 Change Q1-Q3 2016 Q1-Q3 2015 Change
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Order intake 4,133 5,151 -20% 13,759 14,799 -7%
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Hereof service order 2,647 2,279 16% 7,419 7,388 0%
intake
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Service share 64% 44% 54% 50%
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Order backlog 15,174 16,666 -9% 15,174 16,666 -9%
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Revenue 4,774 4,609 4% 12,667 14,385 -12%
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Hereof service revenue 2,601 2,677 -3% 7,373 8,094 -9%
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Service share 54% 58% 58% 56%
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Gross profit 1,164 1,174 -1% 3,280 3,691 -11%
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Gross margin 24.4% 25.5% 25.9% 25.7%
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EBITDA 421 431 -2% 1,073 1,415 -24%
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EBITA 344 358 -4% 863 1,198 -27%
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EBITA margin 7.2% 7.8% 6.8% 8.3%
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EBIT 243 245 -1% 573 862 -32%
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EBIT margin 5.1% 5.3% 4.5% 6.0%
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Profit for the period 170 (84) 340 402 -15%
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CFFO 744 496 50% 839 390 115%
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Free cash flow 701 510 37% 689 1,120 -38%
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Net working capital 2,251 2,626 -14% 2,251 2,626 -14%
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Net interest-bearing (3,150) (3,746) -16% (3,150) (3,746) -16%
debt
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For additional information, please see Investor Room at www.flsmidth.com.
Contacts
Investors
Pernille Friis Andersen, phone +45 36 18 18 87, pefa(at)flsmidth.com
Nicolai Mauritzen, phone +45 36 18 18 51, nicm(at)flsmidth.com
Media
Sofie Karen Lindberg, phone +45 30 93 18 77, skl(at)flsmidth.com
3rd Quarter Report 2016:
http://hugin.info/2106/R/2055593/769797.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: FLSmidth via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 09.11.2016 - 12:05 Uhr
Sprache: Deutsch
News-ID 505907
Anzahl Zeichen: 7458
contact information:
Town:
Valby
Kategorie:
Business News
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"FLSmidth: Interim Report for FLSmidth & Co. A/S for 1 July-30 September 2016. FLSmidth is growing its service activities"
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