Company Announcement to the Danish Financial Supervisory Authority No. 15-2015, 25 August 2015
The Board of Directors and the Group Management of FLSmidth & Co. A/S have today reviewed and approved the Interim Report for 1 January to 30 June 2015.
The Interim Report has been presented in accordance with IFRS as adopted by the EU and additional Danish information requirements regarding interim reporting of listed companies.
No review or auditing of the interim report has taken place.
The Interim Report is accessible at FLSmidth's website:
http://www.flsmidth.com/reports
Group CEO Thomas Schulz comments on the Q2 report: "Despite a deteriorating market situation in the minerals business and oil exporting countries, we see a solid development in three out of our four divisions; especially in regards to the total service revenue which increased 24%. And with the revised guidance for 2015 and the efficiency improvements already implemented, we will manage this prolonged cyclical downturn and continue to prepare for the upturn."
The main conclusions of the Interim Report are:
The outlook for the global mining industry has deteriorated in recent weeks, which has had an adverse impact on management's assessment of business risks and earnings in 2015. As a consequence, the full-year EBITA margin guidance is lowered to 7-8%.
The adjusted EBITA margin in Q2 was 9.2% (reported 7.3%).
Order intake and revenue showed solid growth in Q2 supported by currency developments.
Financial results in Q2 2015
The order intake increased 13% to DKK 5,259m (Q2 2014: DKK 4,643m)
The order backlog decreased 17% to DKK 18,105m (Q2 2014: DKK 21,713m)
Revenue increased 4% to DKK 5,381m (Q2 2014: DKK 5,167m)
Earnings before amortisation and impairment of intangible assets (EBITA) decreased 14% to DKK 395m (Q2 2014: DKK 457m), corresponding to an EBITA margin of 7.3% (Q2 2014: 8.8%)
Earnings before interest and tax (EBIT) decreased 25% to DKK 276m (Q2 2014: DKK 368m)
Net profit amounted to DKK 214m (Q2 2014: DKK 237m)
Cash flow from operating activities amounted to DKK -61m (Q2 2014: DKK 224m)
Net working capital amounted to DKK 3,207m (Q2 2014: DKK 2,726m)
Return on Capital Employed (ROCE) increased to 10% (Q2 2014: 9%)
Guidance for 2015 (updated)
Based on a deteriorating outlook for the mining industry and a preemptive management assessment of associated business risks, the guidance for 2015 has been updated.
FLSmidth & Co. A/S maintains expectations to the consolidated revenue of DKK 19-21bn but it is now believed that the revenue will be at the upper end of the guided range due to currency developments.
The expected EBITA margin is lowered to 7-8% (previously 9-10%) based on the changed management assessment of business risks.
The return on capital employed is now expected to be 9-11% in 2015 (previously 12-14%).
The effective tax rate is expected to be 31-33% and cash flow from investments is expected to be around DKK -0.4bn excluding acquisitions and divestments.
Please address any questions to this announcement to Mr Thomas Schulz, Group CEO, telephone +45 36 18 18 00.
An investor & press meeting and telephone conference regarding the Interim Report will be held today at 14:00 hours CET at the company's headquarters.
For further details please visit http://www.flsmidth.com/en-US/News+and+Press/News/2015/Q2+2015+Invitation+to+investor+meeting
FLSmidth & Co. A/S
Group Communications & Investor Relations