FLSmidth sees strong improvements in earnings and cash flow from operations

The Board of Directors and the Group Management of FLSmidth & Co. A/S have reviewed and approved the Interim Report for 1 January to 30 September 2014. The company recorded strong improvements in earnings and cash flow from operations, a reduction in net working capital, and low order intake as a result of continued low level of mining investments and increased market uncertainty. Full-year revenue and margin guidance have been maintained.

3Q14 financial highlights

• Order intake decreased by 3% to DKK4.502 billion (3Q13: DKK4.642 billion).
• Order backlog decreased by 13% to DKK21.416 billion (3Q13: DKK24.595 billion).
• Revenue decreased by 18% to DKK5.526 billion (3Q13: DKK6.730 billion).
• Earnings before amortisation and impairment of intangible assets (EBITA) increased by 104% to DKK499 million (3Q14: DKK245 million), corresponding to an EBITA margin of 9.0% (3Q13: 3.6%).
• Earnings before interest and tax (EBIT) amounted to DKK410 million (3Q13: DKK-727 million) corresponding to an EBIT margin of 7.4% (3Q13: -10.8%).
• Profit amounted to DKK215 million (3Q13: DKK-783 million).
• Cash flow from operating activities increased by 213% to DKK887 million (3Q13: DKK283 million).
• Net interest-bearing debt amounted to DKK-4.881 billion (end of 2013: DKK-4.718 billion).
• Net working capital amounted to DKK2.761 billion (end of 2013: DKK2.382 billion).
• Return on capital employed (ROCE) was unchanged at 10% (3Q13: 10%).

January – September financial highlights

• Order intake decreased by 9% to DKK13.986 billion (January – September 2013: DKK15.295 billion).
• Order backlog decreased by 4% to DKK21.416 billion (end of 2013: DKK22.312 billion).
• Revenue decreased by 16% to DKK16.400 billion (January – September 2013: DKK19.503 billion).
• Earnings before amortisation and impairment of intangible assets (EBITA) increased by 76% to DKK1.298 billion (January – September 2013: DKK755 million), corresponding to an EBITA margin of 7.9% (January – September 2013: 3.9%).
• Earnings before interest and tax (EBIT) amounted to DKK1.030 billion (January – September 2013: DKK-399 million) corresponding to an EBIT margin of 6.3% (January – September 2013: -2.0%).
• Profit amounted to DKK567 million (January – September 2013: DKK-605).
• Cash flow from operating activities amounted to DKK559 million (January – September 2013: DKK-234 million).

Guidance for 2014

In 2014, FLSmidth & Co. A/S expects to see the following developments:

• Revenue DKK21 – 24 billion (2014 YTD Actual: DKK16.4 billion).
• EBITA margin 7 – 9% (2014 YTD Actual: 7.9%).
• Return on capital employed 11 – 13% (2014 YTD Actual: 10%).
• Cash flow from investments (excl. acquisitions) ~DKK -0.5 billion (previously ~ DKK-0.4 billion) (2014 YTD Actual: DKK-0.2billion).
• Effective tax rate 33 – 35% (2014 YTD Actual: 34%).
• Cost associated with the efficiency programme is expected to amount to approximately DKK-72 million in 2014, which is included in the guidance.

Read FLSmidth’s Interim Report (1 January – 30 September 2014) in full here.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldcement.com/europe-cis/10112014/flsmidth-sees-strong-improvements-in-earnings-and-cash-flow-from-operations-821/