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2019-01-31 12:07 CET
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Annual Report 2018 for FLSmidth & Co.

Company Announcement No. 2-2018, 31 January 2019

Solid operating results and modestly positive outlook for 2019

Strongest order intake in six years

2018 highlights

·       Strong order intake

·       Revenue growth resumed

·       Strong performance in Mining

·       Steps taken to improve profitability in Cement

·       Low free cash flow

 

"The high order intake in 2018 is due to an improving mining market, but it also reflects the performance of our organisation, our position and strong lifecycle solutions. This combination lays a good foundation for future growth," commented Group CEO Thomas Schulz.

Revenue grew by 4% in 2018. The 13% growth in the order intake was attributable to Mining delivering 24% growth, especially driven by copper, while Cement was unchanged. The strong order intake bodes well for revenue growth in 2019.

EBITA was up by 5% in line with revenue, and the EBITA margin increased slightly to 8.5% from 8.4%.

The cash flow from operating activities was impacted by significant negative developments in discontinued activities, and the free cash flow amounted to only DKK 100m.

The return on capital employed rose to 11.0% from 10.4% in 2017 as a result of the higher EBITA and lower capital employed.

The proposed dividend is DKK 9 per share (2018: DKK 8).

Guidance for 2019
FLSmidth guides for revenue of DKK 19-21bn (2018: DKK 18.8bn) and an EBITA margin of 9-10% (2018: 8.5%). The return on capital employed (ROCE) is expected to be 12-14% (2018: 11.0%).

The positive trend in the mining industry is expected to continue in 2019 modestly, while cement market conditions are expected to be stable with global macroeconomic uncertainties for both industries.

Group CEO Thomas Schulz commented: "Both our cement and mining customers are constantly pursuing productivity improvements. As Productivity Provider #1, we are in the right spot to support their agenda and by taking innovation and digitalization to the next level, we will be an even stronger business partner going forward. Additional factors that will strengthen our competitiveness are our ongoing efforts to standardise our product offering and leverage our unique customer insight," said Thomas Schulz.

Contacts

Investors
Nicolai Mauritzen, tel +45 36 18 18 51, nicm@flsmidth.com

Media
Sofie Karen Lindberg, tel +45 30 93 18 77, skl@flsmidth.com


Key figures 2018

(DKKm) Q4 2018 Q4 2017 Change (%) 2018 2017 Change (%)
Order intake (gross) 4,503 4,836 -7% 21,741 19,170 13%
- of which service order intake 2,680 2,693 0% 10,907 10,710 2%
Service order intake share 60% 56%   50% 56%  
Order backlog 16,218 13,654 19% 16,218 13,654 19%
Revenue 5,450 4,943 10% 18,750 18,000 4%
- of which service revenue 2,613 2,583 1% 10,208 10,473 -3%
Service revenue share 48% 52%   54% 58%  
Gross profit 1,312 1,234 6% 4,693 4,597 2%
Gross margin 24.1% 25.0%   25.0% 25.5%  
EBITDA before special non-recurring items 582 493 18% 1,826 1,732 5%
EBITA 511 465 10% 1,585 1,515 5%
EBITA margin 9.4% 9.4%   8.5% 8.4%  
EBIT 419 372 13% 1,220 1,115 9%
EBIT margin 7.7% 7.5%   6.5% 6.2%  
Profit 169 (185)   635 74 758%
CFFO 97 546 -82% 385 1,065 -64%
Free cash flow 46 602 -92% 100 952 -89%
Net working capital 2,200 1,833 +20% 2,200 1,833 +20%
Net interest-bearing debt (1,922) (1,545) +24% (1,922) (1,545) +24%

 

For additional information, go to the Investors at www.flsmidth.com

 

FLSmidth delivers sustainable productivity to the global mining and cement industries. We deliver market-leading engineering, equipment and service solutions to our customers enabling them to improve performance, drive down costs and reduce environmental impact. Our operations span the globe and our 11,400 employees are present in more than 60 countries. In 2018, FLSmidth generated a revenue of DKK 18.8 billion. www.flsmidth.com

  

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