Company Announcement no. 7-2017, 09 May 2017
Strong momentum in service activities continued into Q1
Highlights
- Highest quarterly order intake from total service activities since 2012
- Increase in revenue and earnings as expected
- Further reduction in net interest bearing debt and financial gearing
- Mining companies still holding back on capital investments but intensifying dialogue on future projects s
- Guidance for 2017 unchanged
"The growing momentum in the global economy is filtering through to FLSmidth's service business, while demand for equipment and projects remains largely unaffected. Based on our extensive knowledge from projects, products, and services, we continue to improve our competitive edge and assist our customers in their pursuit of enhanced productivity," commented Group CEO Thomas Schulz.
"It was important that we delivered a substantial progress based on our corrective actions program. The solid momentum underpinning our service activities has continued into 2017 in both mining and cement and it is proof of a strong performance delivered by the organisation," said Thomas Schulz.
Order intake increased 5% and revenue was up 16%. Customer Services and Product Companies were supported by the strong momentum in the aftermarket, and order intake from total service activities grew 23%. While order intake in Minerals increased significantly, Cement fell short of the record-high order intake in Q1 2016, despite three large orders received in the quarter.
The EBITA margin increased to 8.5% due to the corrective actions program combined with higher revenue and operational leverage.
ROCE increased to 9.4% as a result of lower capital employed. Net interest bearing debt decreased to DKK 2.3bn due to positive free cash flow, causing a decrease in financial gearing (NIBD/EBITDA) to 1.4. The equity ratio increased to 36%.
Guidance for 2017
The guidance for 2017 is unchanged. It is still expected that revenue will be DKK 17-19bn and that the EBITA margin will be 7-9%. The return on capital employed is expected to be 8-10%. The EBITA guidance includes expected one-off costs of DKK -200m related to corrective actions launched in 2016.
Contacts
Investors
Pernille Friis Andersen, phone +45 36 18 18 87, pefa@flsmidth.com
Nicolai Mauritzen, phone +45 36 18 18 51, nicm@flsmidth.com
Media
Sofie Karen Lindberg, phone +45 30 93 18 77, skl@flsmidth.com
Key Figures Q1 2017
| DKKm | Q1 2017 | Q1 2016 | Change | Year 2016 |
| Order intake | 5,561 | 5,281 | 5% | 18,303 |
| - hereof service order intake | 2,868 | 2,341 | 23% | 10,029 |
| Service order intake share | 52% | 44% | 55% | |
| Order backlog | 14,998 | 15,792 | -5% | 13,887 |
| Revenue | 4,371 | 3,758 | 16% | 18,192 |
| - hereof service revenue | 2,675 | 2,328 | 15% | 10,262 |
| Service revenue share | 61% | 62% | 56% | |
| Gross profit | 1,134 | 1,038 | 9% | 4,581 |
| Gross margin | 25.9% | 27.6% | 25.2% | |
| EBITDA | 436 | 312 | 40% | 1,588 |
| EBITA | 372 | 246 | 51% | 1,289 |
| EBITA margin | 8.5% | 6.5% | 7.1% | |
| EBITA margin adj. for one-off costs | 8.6% | 6.6% | 8.0% | |
| EBIT | 272 | 153 | 78% | 881 |
| EBIT margin | 6.2% | 4.1% | 4.8% | |
| Profit | 161 | 73 | 121% | 522 |
| CFFO | 149 | (60) | 1,447 | |
| Free cash flow | 114 | (72) | 1,253 | |
| Net working capital | 2,182 | 2,410 | -9% | 2,099 |
| Net interest bearing debt | 2,333 | 3,567 | -35% | 2,525 |
For additional information, Investor Room at www.flsmidth.com.
FLSmidth is the market-leading supplier of productivity to the global mining and cement industries. Headquartered in Copenhagen, Denmark, and with offices in more than 50 countries, FLSmidth delivers engineering, equipment and service solutions to customers worldwide. Productivity, sustainability, and quality are focus areas for the 12,000 employees in FLSmidth. The company generates annual revenue of approximately DKK 18 billion. Read more on www.flsmidth.com