Company Announcement No. 10-2017, 09 August 2017
FLSmidth advanced further in first half of 2017
Growth in revenue (+11%) and EBITA (+25%) driven by the continued strong momentum in service activities
Highlights
- Strong momentum in orders from service activities continued
- Increase in revenue as expected
- Higher operating profit despite one-off costs
- ROCE continued its upward trend
- The mining capital business remained soft while equipment sentiment and order pipeline improved
- Guidance for 2017 confirmed
"We are pleased to report solid progress towards our KPI targets. The Group's service activities continue to benefit from the firming global growth and improvement in confidence. With Q2 marking the fourth consecutive quarter of strong aftermarket momentum, especially in mining, the service business is stabilising at a higher level," commented Group CEO Thomas Schulz.
"By constantly improving our offerings, based on knowledge from our rich global spectrum of projects, products and services, we support our customers' pursuit of productivity, while at the same time enhancing our competitive edge," said Thomas Schulz.
The consolidated order intake grew by 5% in Q2 while revenue was up 11%. The growth was attributable to all divisions but Minerals, as mining capital investments remained soft despite a firmer sentiment and an improved order pipeline.
Operating profit (EBITA) amounted to DKK 342m in Q2, up 25% from the corresponding quarter of last year. EBITA included one-off costs of DKK -92m related to corrective actions announced last year and the demobilisation of an operation and maintenance contract. The EBITA margin was 9.5% adjusted for one-off costs.
The quarter also saw an improvement in the Group's capital efficiency. The return on capital employed advanced to 9.8% from 8.0% in Q2 of last year as a result of lower capital employed and higher EBITA.
Guidance for 2017
The guidance for 2017 is confirmed. Revenue is expected to be DKK 17-19bn and the EBITA margin 7-9%. The return on capital employed (ROCE) is expected to be 8-10%.
The EBITA guidance includes one-off costs of DKK -150m related to corrective actions launched in 2016 (previous expectation DKK -200m) as well as other one-off costs of DKK -62m recognised in Q2.
Contacts
Investors
Pernille Friis Andersen, tel +45 36 18 18 87, pefa@flsmidth.com
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 Q2 2017
| DKKm | Q2 2017 | Q2 2016 | Change | Q1-Q2 2017 | Q1-Q2 2016 | Change | Year 2016 |
For additional information, go to the 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 FLSmidth and its 12,000 employees. The company generated revenue of DKK 18 billion in 2016. Read more on www.flsmidth.com