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FLSmidth & Co. Interim / Quarterly Report 2017
3364_rns_2017-05-09_cb4052e4-9471-4f87-9159-6238348f1d82.pdf
Interim / Quarterly Report
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1 JANUARY - 31 MARCH 2017 (COMPANY ANNOUNCEMENT NO. 7-2017)
FL SMIDTH
Interim Report Q1 2017
| ROCE | EBITA margin | CFFO
(DKKm) | Order intake
(DKKbn) |
| --- | --- | --- | --- |
| 9.4% | 8.5% | 149 | 5.6 |
| Up from 9.2% | Up from 6.5% | Up from DKK -60 | Up from DKK 5.3 |
FLSMIDTH AT A GLANCE
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MAIN CONCLUSIONS
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. Guidance for 2017 unchanged.
GROWTH EFFICIENCY
Revenue increased 16% owing to a weak comparison period and steadily growing service activities. The strong momentum in total service activities seen in the latter part of 2016 continued into Q1, particularly in mining. Order intake increased 5%, attributable to all divisions but Cement. The Cement Division booked three large orders amounting to DKK 1.2bn, but nonetheless fell short of the record high order intake in first quarter last year.
PROFIT EFFICIENCY
The EBITA margin increased to 8.5% in Q1 due to an improved cost structure combined with higher revenue and operational leverage. The corrective actions implemented in late 2016 partly mitigated the negative impacts from low volumes in Minerals and a low gross margin in Cement. Similar to last year, the first quarter result did not include any notable one-off costs.
CAPITAL EFFICIENCY
Net interest bearing debt decreased to DKK 2.3bn due to positive free cash flow and the financial gearing (NIBD/EBITDA) declined to 1.4. The equity ratio increased to 36% as the balance sheet total contracted. ROCE increased to 9.4% as a result of lower capital employed.
KEY PERFORMANCE INDICATORS 2017
(part of management's short- and long-term incentive programmes)
| Q1 2017 | Q1 2016 | |
|---|---|---|
| Financial | ||
| Order intake | DKK 5.6bn | DKK 5.3bn |
| ROCE | 9.4% | 9.2% |
| Net Working Capital% (end) | 11.6% | 12.8% |
| EBITA margin | 8.5% | 6.5% |
| Non-financial | ||
| Safety (LTIFR)¹⁾ | 1.3 | 1.5 |
| Quality (DIFOT)²⁾ | 88 | 84 |
¹⁾ LTIFR = Lost time injury frequency rate
²⁾ DIFOT = Delivery in full on time
LONG-TERM FINANCIAL TARGETS
Long-term financial targets for FLSmidth subject to normalised market conditions:
| Annual growth in revenue | Above market average |
|---|---|
| EBITA margin | 10-13% |
| ROCE¹⁾ | >20% |
| Financial gearing | (NIBD/EBITDA) <2 |
| Equity ratio | >30% |
| Pay-out ratio | 30-50% of the profit for the year |
*) ROCE: Return on Capital Employed calculated on a before-tax basis as EBITA divided by average Capital Employed including goodwill.
GUIDANCE FOR 2017
| DeK Realised Q1 2017 | Guidance 2017 | |
|---|---|---|
| Revenue | DKK 4.4bn | DKK 17-19bn |
| EBITA margin | 8.5% | 7-9% |
| ROCE | 9.4% | 8-10% |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
FLSMIDTH AT A GLANCE
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FINANCIAL RESULT Q1 2017
REVENUE SPLIT BETWEEN
CEMENT AND MINERALS BUSINESS
| Cement business 47% | Minerals business 53% | Cement business 61% |
|---|---|---|
| EBITA margin 5.7% | EBITA margin 10.2% |
REVENUE SPLIT BETWEEN
SERVICE AND CAPITAL BUSINESS
| Capital business 39% | Service business 61% |
|---|---|
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
FLSMIDTH Q1 2017 IN NUMBERS
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FLSMIDTH Q1 2017 IN NUMBERS
VS. Q1 2016
| ROCE
9.4%
Up from 9.2% | REVENUE
(DKKm)
4,371
Up from 3,758 | EBITA
(DKKm)
372
Up from 246 |
| --- | --- | --- |
| EBITA MARGIN
8.5%
Up from 6.5% | CFFO
(DKKm)
149
Up from -60 | ORDER INTAKE
(DKKm)
5,561
Up from 5,281 |
VS. Q4 2016
| ORDER BACKLOG
(DKKm)
14,998
Up from 13,887 | NET INTEREST-BEARING DEBT
(DKKm)
2,333
Down from 2,525 | NET WORKING CAPITAL
(DKKm)
2,182
Up from 2,099 |
| --- | --- | --- |
FLSMIDTH: 1 JANUARY – 31 MARCH 2017 INTERIM REPORT
GROUP FINANCIAL HIGHLIGHTS
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GROUP FINANCIAL HIGHLIGHTS
| DKKm | Q1 2017 | Q1 2016 | Year 2016 |
|---|---|---|---|
| INCOME STATEMENT | |||
| Revenue | 4,371 | 3,758 | 18,192 |
| Gross profit | 1,134 | 1,038 | 4,581 |
| EBITDA | 436 | 312 | 1,588 |
| EBITA | 372 | 246 | 1,289 |
| EBIT | 272 | 153 | 881 |
| Earnings from financial items, net | (34) | (38) | (54) |
| EBT | 238 | 115 | 827 |
| Profit/(loss) for the period, continuing activities | 178 | 79 | 590 |
| Profit/(loss) for the period, discontinued activities | (17) | (6) | (68) |
| Profit/(loss) for the period | 161 | 73 | 522 |
| CASH FLOW | |||
| CFFO | 149 | (60) | 1,447 |
| Acquisition of tangible assets | (22) | (19) | (203) |
| CFFI | (35) | (12) | (194) |
| Free cash flow | 114 | (72) | 1,253 |
| Free cash flow adjusted for acquisitions and disposals of enterprises and activities | 114 | (72) | 1,253 |
| Net working capital | 2,182 | 2,410 | 2,099 |
| Net interest-bearing debt | 2,333 | 3,567 | 2,525 |
| ORDERS | |||
| Order intake (gross), continuing activities | 5,561 | 5,281 | 18,303 |
| Order backlog, continuing activities | 14,998 | 15,792 | 13,887 |
| BALANCE SHEET | |||
| Total assets | 23,572 | 23,188 | 24,112 |
| Equity | 8,496 | 7,938 | 8,462 |
| Dividend to shareholders, paid | - | - | 205 |
| FINANCIAL RATIOS | |||
| Gross margin | 25.9% | 27.6% | 25.2% |
| EBITDA margin | 10.0% | 8.3% | 8.7% |
| EBITA margin | 8.5% | 6.5% | 7.1% |
| EBIT margin | 6.2% | 4.1% | 4.8% |
| EBT margin | 5.4% | 3.1% | 4.5% |
| CFFO / Revenue | 3.4% | -1.6% | 8.0% |
| Cash conversion | 41.9% | -47.1% | 142.2% |
| Book-to-bill (order intake/revenue) | 127.2% | 140.5% | 100.6% |
| Order backlog / Revenue | 79.8% | 84.2% | 76.3% |
| Return on equity | 7.4% | 2.8% | 6.2% |
| Equity ratio | 36% | 34% | 35% |
| ROCE (return on capital employed), average | 9.4% | 9.2% | 8.5% |
| Net working capital ratio, end | 11.6% | 12.8% | 11.5% |
| Financial gearing | 1.4 | 2.1 | 1.6 |
| Capital employed, average | 14,993 | 15,587 | 15,157 |
| Number of employees at 31 March, Group | 11,869 | 12,723 | 12,187 |
| SHARE RATIOS | |||
| CFPS (cash flow per share), (diluted) | 2.9 | (1.2) | 29.5 |
| EPS (earnings per share), (diluted) | 3.2 | 1.5 | 10.6 |
| BVPS (Book value per share) | 170.6 | 161.5 | 172.0 |
| FLSmidth & Co. A/S' share price | 373.0 | 274.5 | 293.0 |
| Number of shares (1,000), 31 March | 51,250 | 51,250 | 51,250 |
| Market capitalisation | 19,116 | 14,068 | 15,016 |
The financial ratios have been computed in accordance with the guidelines of the Danish Society of Financial Analysts from 2015. Please refer to note 10 for definitions of terms.
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
MANAGEMENT'S REVIEW
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MANAGEMENT'S REVIEW
MARKET TRENDS
A growing momentum in global economy appears to be filtering through to FLSmidth's service business, while demand for equipment and projects remains largely unaffected at this point.
Global economy gained speed in the fourth quarter of 2016 and is expected to grow further in 2017 – with a cyclical recovery in manufacturing and trade underway (IMF, World Economic Outlook, April 2017). Similarly, FLSmidth's aftermarket business gained momentum in the second half of 2016 and showed a continued positive development in the first quarter of 2017.
Elevated commodity prices have eased the strains on commodity exporters and improved the financial situation of miners in general, which has led to increased demand for minerals related services across most regions. Mining customers focus, in particular, on improving asset productivity and reliability, and they are increasingly looking for businesses partnering to help them reach production targets.
While mining companies are releasing more operational expenditures to maintain equipment, they remain reluctant to invest in new equipment, and except from evidence of some increased upstream (not FLSmidth scope) replacement activity and intensifying dialogue on future projects, there are no signs yet of a mining equipment recovery. However, acknowledging that prevailing political uncertainties could have material and immediate market impact, the current macro-economic scene is set to support the beginning of a recovery in mining capital expenditures by 2018.
The Chinese economy showed strength in the first quarter of 2017, not least thanks to national investments in infrastructure, which supports the likelihood of a more sustained recovery in most commodity prices – also, taking into consideration that IMF sees activity picking up in the USA as well as several emerging markets. IMF's Commodity Metals Price Index rose 9 points in the quarter.
GROUP (continuing activities)
| DKKm | Q1 2017 | Q1 2016 | Change (%) |
|---|---|---|---|
| Order intake (gross) | 5,561 | 5,281 | 5% |
| - hereof service order intake | 2,868 | 2,341 | 23% |
| Order backlog | 14,998 | 15,792 | -5% |
| Revenue | 4,371 | 3,758 | 16% |
| - hereof service revenue | 2,675 | 2,328 | 15% |
| Gross profit | 1,134 | 1,038 | 9% |
| Gross margin | 25.9% | 27.6% | |
| SG&A costs | (698) | (726) | 4% |
| SG&A ratio | 16.0% | 19.3% | |
| EBITDA | 436 | 312 | 40% |
| EBITDA margin | 10.0% | 8.3% | |
| EBITA | 372 | 246 | 51% |
| EBITA margin | 8.5% | 6.5% | |
| EBITA margin adjusted for one-off costs | 8.6% | 6.6% | |
| EBIT | 272 | 153 | 78% |
| EBIT margin | 6.2% | 4.1% | |
| Number of employees | 11,717 | 12,570 | -7% |
FLSMIDTH: 1 JANUARY – 31 MARCH 2017 INTERIM REPORT
MANAGEMENT'S REVIEW
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Gold futures increased 6%, and the copper price increased 3% and is now 30% above the bottom in January 2016. The Iron ore price grew 10% and is now 112% above trough levels in December 2015, despite continued ample supply of iron ore. Thermal coal prices declined 7% but remain more than 60% above the bottom in January 2016.
Over time, an improving world economy should support the cement market too, but although FLSmidth saw good activity related to new cement capacity in the first quarter, there are no signs of a sustainable structural recovery in the short term. Mid-term expectations remain cautiously optimistic.
The cement aftermarket has been remarkably stable for a long time and continued the solid developments in Q1, with some customers showing increased interest for rebuilds, retrofits and larger parts orders.
FINANCIAL DEVELOPMENTS IN Q1 2017
Growth efficiency
Revenue increased 16% owing to a weak comparison period and steadily growing service activities. The strong momentum in total service activities seen in the latter part of 2016 continued into Q1, particularly in mining. Order intake increased 5%, attributable to all divisions but Cement. The Cement Division booked three large orders amounting to DKK 1.2bn, but nonetheless fell short of the record high order intake in the first quarter last year.
Developments in total service activities
Total service activities in FLSmidth embrace the entire Customer Services Division, Operation & Maintenance (part of the Cement Division), and all of the service and aftermarket part of the Product Companies Division.
Order intake related to total service activities increased 23% to DKK 2,868m in Q1 (Q1 2016: DKK 2,341m), equivalent to 52% of the total order intake (Q1 2016: 44%). Revenue related to total service activities increased 15% to DKK 2,675m in Q1 (Q1 2016: DKK 2,328m), equivalent to 61% of the total revenue (Q1 2016: 62%).
Order intake and order backlog
The order intake increased 5% to DKK 5,561m (Q1 2016: DKK 5,281m). Foreign exchange translation effects had a positive impact of 2%. Organic growth was 3%, attributable to all divisions but Cement, where order intake growth was negative due to a tough comparison period.
Order intake developments in Q1 2017
| Order intake (vs. Q1 2016) | Customer Services | Product Companies | Minerals | Cement | FLSmidth Group |
|---|---|---|---|---|---|
| Organic | 14% | 10% | 65% | -16% | 3% |
| Currency | 5% | 4% | 3% | -1% | 2% |
| Total growth | 19% | 14% | 68% | -17% | 5% |
The order backlog for the Group increased 8% in Q1 to DKK 14,998m (end of Q4 2016: DKK 13,887m). 53% of the backlog is expected to be converted to revenue in the remainder of 2017, 32% in 2018, and 15% in 2019 and beyond.
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
MANAGEMENT'S REVIEW
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Revenue
Revenue increased 16% to DKK 4,371m in Q1 2017 (Q1 2016: DKK 3,758m). Foreign exchange translation effects had a 2% positive impact on revenue in Q1. Organic growth was 14%, primarily related to the Cement division, but also Customer Services and Product Companies.
Revenue developments in Q1 2017
| Revenue (vs. Q1 2016) | Customer Services | Product Companies | Minerals | Cement | FLSmidth Group |
|---|---|---|---|---|---|
| Organic | 6% | 13% | -19% | 83% | 14% |
| Currency | 4% | 5% | 3% | -12% | 2% |
| Total growth | 10% | 18% | -16% | 71% | 16% |
PROFIT EFFICIENCY
The EBITA margin increased to 8.5% in Q1 due to an improved cost structure combined with higher revenue and operational leverage. The corrective actions implemented in late 2016 partly mitigated the negative impacts from low volumes in Minerals and a low gross margin in Cement. Similar to last year, the Q1 result did not include any notable one-off costs.
The gross profit in Q1 increased to DKK 1,134m (Q1 2016: DKK 1,038m), corresponding to a gross margin of 25.9% (Q1 2016: 27.6%). The gross margins in the two project divisions have declined as a result of low volumes and pricing pressure in the past couple of years, whereas high demand for parts and services support the margins in Customer Services and Product Companies.
Q1 2017 saw total research and development expenses of DKK 40m (Q1 2016: DKK 55m), representing 0.9% of revenue (Q1 2016: 1.5%), of which DKK 7m was capitalised (Q1 2016: DKK 1m) and the balance reported as production costs. In addition, project-financed developments are taking place in cooperation with customers. An increasing share of the total research and development expenses are related to the Customer Services and Product Companies divisions.
Sales, general and administrative costs and other operating items amounted to DKK 698m in Q1 2017 (Q1 2016: DKK 726m), which represents a cost percentage of 16.0% of revenue (Q1 2016: 19.0%). Sales costs increased by DKK 14m, while administrative costs decreased by DKK 40m. One-off costs were negligible in the quarter similar to same quarter last year.
Amortisation of intangible assets amounted to DKK -100m (Q1 2016: DKK -93m). The effect of purchase price allocations amounted to DKK -55m (Q1 2016: DKK -60m) and other amortisations to DKK -45m (Q1 2016: DKK -34m). Consequently, earnings before interest and tax (EBIT) increased to DKK 272m (Q1 2016: 153m).
Net financial items amounted to DKK -34m (Q1 2016: DKK -38m), of which foreign exchange and fair value adjustments amounted to DKK -29m (Q1 2016: DKK -18m). Net interest costs amounted to DKK -5m (Q1 2016: DKK -20m).
Tax for the period amounted to DKK -60m (Q1 2016: DKK -36m), corresponding to an effective tax rate of 25% (Q1 2016: 32%).
REVENUE AND EBITA MARGIN
ORDER INTAKE
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
MANAGEMENTS REVIEW
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Profit from continuing activities increased to DKK 178m (Q1 2016: DKK 79m).
Profit/loss from discontinued activities amounted to DKK -17m (Q1 2016: DKK -6m) and is mainly related to the bulk material handling activities that were announced for sale in connection with the third quarter interim report in 2015. The sales process and dialogue with potential acquirers are currently ongoing.
Profit for the period increased to DKK 161m (Q1 2016: DKK 73m), equivalent to DKK 3.2 per share (diluted) (Q1 2016: DKK 1.5).
CAPITAL EFFICIENCY
Capital employed and ROCE
Average Capital employed decreased to DKK 15.0bn in Q1 2017 (Q1 2016: DKK 15.6bn), and 12-months trailing EBITA decreased to DKK 1,415m (Q1 2016: DKK 1,428m). As a consequence, ROCE increased to 9.4% (Q1 2016: 9.2%).
Total capital employed amounted to DKK 15.1bn at the end of Q1 2017 and consists primarily of intangible assets amounting to DKK 10.4bn, which is mostly historical goodwill as well as patents and rights, and customer relations. Tangible assets amounted to DKK 2.5bn and net working capital to DKK 2.2bn at the end of Q1.
Cash flow and working capital
Cash flow from operating activities amounted to DKK 149m in Q1 2017 (Q1 2016: DKK -60m). The increase is due to the improved operating result.
Net working capital increased to DKK 2,182m at the end of Q1 2017 (end of 2016: DKK 2,099m), representing 11.6% of 12-months trailing revenue (end of 2016: 11.5% of revenue). The increase in net working capital in Q1 is primarily explained by lower trade payables that were only partly off-set by lower trade receivables.
Cash flow from investing activities amounted to DKK -35m (Q1 2016: DKK -12m).
The free cash flow (cash flow from operating and investing activities) in Q1 amounted to DKK 114m (Q1 2016: DKK -72m).
Balance sheet and capital structure
Equity at the end of Q1 2017 increased to DKK 8,496m (end of 2016: DKK 8,462m). The equity ratio amounted to 36% (end of 2016: 35%), which is above the long-term target of minimum 30%.
Net interest-bearing debt by the end of Q1 2017 decreased to DKK 2,333m (end of 2016: DKK 2,525m). As a result, the Group's financial gearing was 1.4 at the end of Q1 2017 (end of 2016: 1.6), well within the NIBD long term target of maximum 2xEBITDA. At the end of Q1 2017, the Group's capital resources consisted of committed credit facilities of DKK 7.6bn (including mortgage) with a weighted average time to maturity of 4.1 years.
NET WORKING CAPITAL
CASH FLOW FROM OPERATING ACTIVITIES
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
MANAGEMENTS REVIEW
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Treasury shares
FLSmidth's treasury shares amounted to 2,068,014 shares at the end of Q1 2017 (end of 2016: 2,276,278 shares), representing 4.0% of the total share capital (end of 2016: 4.4%). The holding of treasury shares is used to hedge FLSmidth's long-term incentive plans.
Long term incentive plans (LTIP)
Share option plans (being phased out)
At the end of Q1 2017, there was a total of 2,376,888 unexercised share options under FLSmidth's incentive plan and their fair value was DKK 256m. The fair value is calculated based on the Black & Scholes model, applying a current share price of 373, a volatility of 30.30% and future annual dividend of DKK 6 per share. The effect of the plan on the income statement for Q1 2017 was DKK 6m (Q1 2016: DKK 8m).
Performance shares (replacing Share option programme)
At the end of Q1 2017, FLSmidth had granted a maximum of 302,813 performance share units to 140 key employees. Full vesting after three years will depend on achievement of stretched financial targets related to the EBITA margin and the net working capital ratio. The effect of the plan on the income statement for Q1 2017 was DKK 4m (Q1 2016: DKK 1m).
Employees
The total number of employees amounted to 11,869 at the end of Q1 2017 (Q1 2016: 12,723) including discontinued activities, employing 152 people. The decline since last year is a function of the reductions in workforce that were implemented in late 2016 to adjust the cost base to the anticipated lower level of activity in 2017.
Guidance for 2017
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 the corrective actions programme launched in 2016.
Annual General Meeting 2017
On Thursday 30 March at 16.00 hours, FLSmidth & Co. A/S held its Annual General Meeting, where 46.45% of the votes were represented.
The Annual General Meeting adopted the Board of Director's review, approved the Annual Report 2016 and approved the Board of Directors' fees including the final fees for 2016, and the preliminary fee determined for 2017. The Board's proposal to pay out a dividend of DKK 6 per share was adopted. Dividend was paid out on 4 April 2017, amounting to DKK 307m in total.
The Annual General Meeting re-elected Mr Vagn Ove Sørensen, Mr Tom Knutzen, Ms Caroline Grégoire Sainte Marie, Mr Marius Jacques Kloppers and Mr Richard Robinson Smith (Rob Smith) as members of the Board of Directors. The Annual General Meeting also elected as new member of the Board of Directors Ms Anne Louise Eberhard. At the subsequent initial Board meeting, Mr Vagn Sørensen was re-elected as Chairman, and Mr Tom Knutzen was elected as Vice Chairman.
Ernst & Young was appointed as company auditor.
Finally, the Annual General Meeting adopted the four additional proposals submitted by the Board of Directors:
- Amendment of the Articles of Association – company announcements in English
- Amendment of the Articles of Association – introduction of electronic communication
- Authorisation to acquire treasury shares
- Approval of updated guidelines for incentive pay
Financial calendar 2017
| 21 June 2017 | Capital Market Day |
|---|---|
| 9 August 2017 | Half-year Interim Report 2017 |
| 9 November 2017 | 1st - 3rd Quarter Interim Report 2017 |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT / 10
MANAGEMENTS REVIEW
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FORWARD‐LOOKING STATEMENTS
FLSmidth & Co. A/S' financial reports, whether in the form of annual reports or interim reports, filed with the Danish Business Authority and/or announced via the company's website and/or NASDAQ Copenhagen, as well as any presentations based on such financial reports, and any other written information released, or oral statements made, to the public based on this report or in the future on behalf of FLSmidth & Co. A/S, may contain forward‐looking statements.
Words such as 'believe', 'expect', 'may', 'will', 'plan', 'strategy', 'prospect', 'foresee', 'estimate', 'project', 'anticipate', 'can', 'intend', 'target' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward‐looking statements. Examples of such forward‐looking statements include, but are not limited to:
- Statements of plans, objectives or goals for future operations, including those related to FLSmidth & Co. A/S' markets, products, product research and product development.
- Statements containing projections of or targets for revenues, profit (or loss), capital expenditures, dividends, capital structure or other net financial items.
- Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings and statements regarding the underlying assumptions or relating to such statements.
- Statements regarding potential merger & acquisition activities.
These forward‐looking statements are based on current plans, estimates and projections. By their very nature, forward‐looking statements involve inherent risks and uncertainties, both general and specific, which may be outside FLSmidth & Co. A/S' influence, and which could materially affect such forward‐looking statements.
FLSmidth & Co. A/S cautions that a number of important factors, including those described in this report, could cause actual results to differ materially from those contemplated in any forward‐looking statements.
Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and exchange rate fluctuations, delays or faults in project execution, fluctuations in raw material prices, delays in research and/or development of new products or service concepts, interruptions of supplies and production, unexpected breach or termination of contracts, market‐driven price reductions for FLSmidth & Co. A/S' products and/or services, introduction of competing products, reliance on information technology, FLSmidth & Co. A/S' ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in legislation or regulation and interpretation thereof, intellectual property protection, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign enterprises, unexpected growth in costs and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance. Unless required by law FLSmidth & Co. A/S is under no duty and undertakes no obligation to update or revise any forward‐looking statement after the distribution of this report.
FLSMIDTH: 1 JANUARY – 31 MARCH 2017 INTERIM REPORT / 11
DIVISIONAL PERFORMANCE
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CUSTOMER SERVICES
MARKET DEVELOPMENTS IN Q1 2017
In Q1, the market for customer Services continued to show good momentum on the back of improved sentiment for minerals related services in the second half of 2016. The market for cement related services was largely unchanged but saw good demand from mature markets in particular. Miners' increasing focus on asset management was reflected in the demand for minerals related services showing a continued good demand for spare parts and increased demand for other services and upgrade projects which could be an indication that the mining recovery is initially materialising through increased service spending.
Gross profit, before allocation of shared cost increased to DKK 554m (Q1 2016: DKK 507m), and the corresponding gross margin was largely stable at 32.1% (Q1 2016: 32.3%).
EBITA increased 27% to DKK 251m (Q1 2016: DKK 197m) and the EBITA margin increased to 14.6% (Q1 2016: 12.6%), owing to slightly reduced SG&A costs and significantly improved operating leverage. There were no significant one-off costs, neither in Q1 2017, nor in the comparison quarter.
FINANCIAL PERFORMANCE IN Q1 2017
Order intake in Q1 2017 increased 19% to DKK 1,861m (Q1 2016: DKK 1,566m) which is the strongest quarterly order intake in three years. The order intake was positively impacted by foreign exchange effects and increased 14% adjusted for currency. Higher demand for minerals related services was the key growth driver, but cement related order intake grew as well.
Revenue increased 10% to DKK 1,724m in Q1 2017 (Q1 2016: DKK 1,568m) and increased 6% adjusted for currency effects, supported by strong order intake in the past few quarters.
REVENUE AND EBITA MARGIN
CUSTOMER SERVICES
| DKKm | Q1 2017 | Q1 2016 | Change (%) |
|---|---|---|---|
| Order intake (gross) | 1,861 | 1,566 | 19% |
| Order backlog | 2,506 | 2,399 | 4% |
| Revenue | 1,724 | 1,568 | 10% |
| Gross profit before allocation of shared cost | 554 | 507 | 9% |
| Gross margin before allocation of shared cost | 32.1% | 32.3% | |
| EBITA before allocation of shared cost | 391 | 343 | 13% |
| EBITA margin before allocation of shared cost | 22.7% | 21.9% | |
| EBITA | 251 | 197 | 27% |
| EBITA margin | 14.6% | 12.6% | |
| EBIT | 209 | 161 | 30% |
| EBIT margin | 12.1% | 10.3% | |
| Number of employees | 3,900 | 4,059 | -4% |
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DIVISIONAL PERFORMANCE
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PRODUCT COMPANIES
MARKET DEVELOPMENTS IN Q1 2017
The market for Product Companies showed an overall positive development in Q1, driven by strong demand for parts, services and a few larger project related orders. Leaving out the latter, demand for equipment, in general, remained soft but stable, while aftermarket related spending showed a strong momentum, accounting for more than half of the divisional business. The level of inquiries increased slightly in the quarter, with customers showing increased interest for expert systems and solutions to improve productivity, especially in cement and adjacent industries but also in mining.
FINANCIAL PERFORMANCE IN Q1 2017
Order intake in Q1 2017 increased 14% to DKK 1,597 (Q1 2016: DKK 1,406m) which was the highest quarterly order intake since Q1 2012. Adjusted for currency effects, the order intake increased 10%, driven by strong aftermarket demand and orders for air pollution control systems.
Revenue increased 18% to DKK 1,275m (Q1 2016: DKK 1,078m) and increased 13% adjusted for currency compared to an exceptionally weak Q1 last year.
Gross profit, before allocation of shared costs increased to DKK 406m (Q1 2016: DKK 356m), and the corresponding gross margin declined to 31.8% (Q1 2016: 33.0%) due to business mix.
EBITA in Q1 2017 increased 44% to DKK 157m (Q1 2016: DKK 109m). SG&A was largely unaffected by the increase in revenue vs. Q1 last year. Consequently, EBITA increased in line with the increase in gross profit, and the EBITA margin increased to 12.3% (Q1 2016: 10.1%). There were no significant one-off costs, neither in Q1 2017, nor in the comparison quarter.
PRODUCT COMPANIES
| DKKm | Q1 2017 | Q1 2016 | Change (%) |
|---|---|---|---|
| Order intake (gross) | 1,597 | 1,406 | 14% |
| Order backlog | 3,124 | 2,823 | 11% |
| Revenue | 1,275 | 1,078 | 18% |
| Gross profit before allocation of shared cost | 406 | 356 | 14% |
| Gross margin before allocation of shared cost | 31.8% | 33.0% | |
| EBITA before allocation of shared cost | 272 | 228 | 19% |
| EBITA margin before allocation of shared cost | 21.3% | 21.2% | |
| EBITA | 157 | 109 | 44% |
| EBITA margin | 12.3% | 10.1% | |
| EBIT | 132 | 86 | 53% |
| EBIT margin | 10.4% | 7.9% | |
| Number of employees | 2,744 | 2,850 | -4% |
FLSMIDTH: 1 JANUARY – 31 MARCH 2017 INTERIM REPORT / 13
DIVISIONAL PERFORMANCE
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MINERALS
MARKET DEVELOPMENTS IN Q1 2017
The market for mining capital expenditures was overall unchanged in Q1. Mining companies are still holding back on capital investments, but intensifying the dialogue on potential future projects. With a stable level of inquiries, an unchanged pipeline of opportunities and miners' budgets largely fixed for the year, market activity is not expected to pick-up before the end of 2017 at the earliest. The most active regions in Q1 were India, North America and South America with gold, coal, copper, fertilisers and lithium leading the activity.
FINANCIAL PERFORMANCE IN Q1 2017
Order intake in Q1 2017 increased 68% to DKK 744m (Q1 2016: DKK 443m), although compared to a weak Q1 last year.
Revenue decreased 16% to DKK 586m (Q1 2016: DKK 698m) as expected due to a lower order backlog entering the year. About one third of the Minerals Division's backlog remains very slow moving based on customer request.
Gross profit, before allocation of shared cost amounted to DKK 101m (Q1 2016: DKK 132m), and the corresponding gross margin was 17.3% which was below Q1 last year (Q1 2016: 18.9%) but above the gross margin for the full year 2016 of 16.6%.
EBITA amounted to DKK -37m which was in line with Q1 last year (Q1 2016: DKK -35m), despite significantly lower revenue and gross profit which is an evidence of the efforts undertaken to reduce SG&A costs directly in the division and across the Group. Nonetheless, as a consequence of the lower revenue, the EBITA margin declined to -6.3% (Q1 2016: -5.0%). There were no significant one-off costs, neither in Q1 2017, nor in the comparison quarter.
MINERALS
| DKKm | Q1 2017 | Q1 2016 | Change (%) |
|---|---|---|---|
| Order intake (gross) | 744 | 443 | 68% |
| Order backlog | 4,108 | 4,229 | -3% |
| Revenue | 586 | 698 | -16% |
| Gross profit before allocation of shared cost | 101 | 132 | -23% |
| Gross margin before allocation of shared cost | 17.3% | 18.9% | |
| EBITA before allocation of shared cost | 27 | 48 | -44% |
| EBITA margin before allocation of shared cost | 4.7% | 6.9% | |
| EBITA | (37) | (35) | n/a |
| EBITA margin | -6.3% | -5.0% | |
| EBIT | (62) | (62) | n/a |
| EBIT margin | -10.5% | -8.8% | |
| Number of employees | 1,027 | 1,276 | -20% |
FLSMIDTH: 1 JANUARY – 31 MARCH 2017 INTERIM REPORT
DIVISIONAL PERFORMANCE
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CEMENT
MARKET DEVELOPMENTS IN Q1 2017
FLSmidth saw good cement activity in Q1, but overall, the market for new cement capacity remains unchanged with no clear signs of sustained recovery. In terms of new inquiries, South- and South East Asia led the activity, followed by North Africa and the USA. Expectations for the mid-term remain cautiously optimistic.
FINANCIAL PERFORMANCE IN Q1 2017
Despite three large orders in Colombia, Pakistan and Egypt respectively, the order intake in Q1 2017 decreased 17% to DKK 1,719m against a strong comparison quarter (Q1 2016: DKK 2,082m). Q1 last year included a very large EPC contract of more than EUR 200m.
Revenue increased 71% to DKK 961m, however against a weak first quarter last year (Q1 2016: DKK 562m).
Gross profit, before allocation of shared costs amounted to DKK 103m (Q1 2016: DKK 104m), and the corresponding gross margin declined to 10.7% (Q1 2016: 18.3%). The development reflects increased execution of lower margin orders in the backlog, as communicated in past interim reports, but also a somewhat unfavourable project mix in the quarter.
EBITA amounted to DKK -18m (Q1 2016: DKK -21m), negatively impacted by pricing pressure, as mentioned above. The EBITA margin increased to -1.9% (Q1 2016: -3.7%). There were no significant one-offs in Q1 2017 neither in Q1 2017 nor in the comparison quarter.
REVENUE AND EBITA MARGIN
CEMENT
| DKKm | Q1 2017 | Q1 2016 | Change (%) |
|---|---|---|---|
| Order intake (gross) | 1,719 | 2,082 | -17% |
| Order backlog | 6,085 | 7,016 | -13% |
| Revenue | 961 | 562 | 71% |
| Gross profit before allocation of shared cost | 103 | 104 | -1% |
| Gross margin before allocation of shared cost | 10.7% | 18.5% | |
| EBITA before allocation of shared cost | 50 | 45 | 11% |
| EBITA margin before allocation of shared cost | 5.2% | 7.9% | |
| EBITA | (18) | (21) | n/a |
| EBITA margin | -1.9% | -3.7% | |
| EBIT | (26) | (28) | n/a |
| EBIT margin | -2.7% | -5.0% | |
| Number of employees | 2,662 | 2,708 | -3% |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT / 15
STATEMENT BY MANAGEMENT
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STATEMENT BY MANAGEMENT
The Board of Directors and Executive Management have today considered and approved the interim report of FLSmidth & Co. A/S for the period 1 January - 31 March 2017.
In our opinion, the interim report gives a true and fair view of the Group's financial position at 31 March 2017 as well as of its financial performance and its cash flow for the period 1 January - 31 March 2017.
The interim report is prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU and Danish disclosure requirements for interim reports of listed companies. The interim report has not been audited or reviewed by the Group's independent auditors.
We believe that the management commentary contains a fair review of the development of the Group's business and financial affairs, the result for the period and the financial position of the Group, together with a description of the principal risks and uncertainties that the Group faces.
Copenhagen 9 May 2017
EXECUTIVE MANAGEMENT
Thomas Schulz
Group CEO
Lars Vestergaard
Group Executive Vice President and CFO
BOARD OF DIRECTORS
Vagn Sørensen
Chairman
Tom Knutzen
Vice Chairman
Marius Jacques Kloppers
Caroline Grégoire Sainte Marie
Richard Robinson Smith
Anne Louise Eberhard
Mette Dobel
Søren Quistgaard Larsen
Claus Østergaard
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT / 16
QUARTERLY KEY FIGURES
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QUARTERLY KEY FIGURES
Quarterly key figures
| DKKm | 2015 | 2016 | 2017 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | |
| INCOME STATEMENT | |||||||||
| Revenue | 4,683 | 5,093 | 4,609 | 5,297 | 3,758 | 4,135 | 4,774 | 5,525 | 4,371 |
| Gross profit | 1,190 | 1,327 | 1,174 | 1,255 | 1,038 | 1,078 | 1,164 | 1,301 | 1,134 |
| SG&A | (718) | (815) | (743) | (792) | (726) | (738) | (743) | (786) | (698) |
| EBITDA | 472 | 512 | 431 | 463 | 312 | 340 | 421 | 515 | 436 |
| Special non-recurring items | 0 | 2 | (1) | (6) | 0 | 0 | (9) | (21) | 0 |
| Depreciation and impairment of tangible assets | (72) | (74) | (72) | (73) | (66) | (67) | (68) | (68) | (64) |
| EBITA | 400 | 440 | 358 | 384 | 246 | 273 | 344 | 426 | 372 |
| Amortisation and impairment of intangible assets | (104) | (119) | (113) | (105) | (93) | (96) | (101) | (118) | (100) |
| EBIT | 296 | 321 | 245 | 279 | 153 | 177 | 243 | 308 | 272 |
| Financial income/costs, net | (18) | 30 | (93) | (175) | (38) | (32) | 14 | 2 | (34) |
| EBT | 278 | 351 | 152 | 104 | 115 | 145 | 257 | 310 | 238 |
| Tax for the period | (82) | (113) | (47) | (40) | (36) | (45) | (70) | (86) | (60) |
| Profit/(loss) on continuing activities for the period | 196 | 238 | 105 | 64 | 79 | 100 | 187 | 224 | 178 |
| Profit/loss on discontinued activities for the period | 76 | (24) | (189) | (41) | (6) | (3) | (17) | (42) | (17) |
| Profit/(loss) for the period | 272 | 214 | (84) | 23 | 73 | 97 | 170 | 182 | 161 |
| Effect of purchase price allocations | (71) | (71) | (71) | (71) | (60) | (60) | (60) | (60) | (55) |
| Gross margin | 25.4% | 26.1% | 25.5% | 23.7% | 27.6% | 26.1% | 24.4% | 23.5% | 25.9% |
| EBITDA margin | 10.1% | 10.1% | 9.4% | 8.7% | 8.3% | 8.2% | 8.8% | 9.3% | 10.0% |
| EBITA margin | 8.5% | 8.6% | 7.8% | 7.2% | 6.5% | 6.6% | 7.2% | 7.7% | 8.5% |
| EBIT margin | 6.3% | 6.3% | 5.3% | 5.3% | 4.1% | 4.3% | 5.1% | 5.6% | 6.2% |
| Cash flow | |||||||||
| CFFO | (45) | (61) | 496 | 148 | (60) | 155 | 744 | 608 | 149 |
| CFFI | 760 | (44) | 14 | 20 | (12) | (95) | (43) | (44) | (35) |
| Orders | |||||||||
| Order intake (gross), continuing activities | 4,440 | 5,208 | 5,151 | 3,691 | 5,281 | 4,345 | 4,133 | 4,544 | 5,561 |
| Order backlog, continuing activities | 17,562 | 16,932 | 16,666 | 14,858 | 15,792 | 15,914 | 15,174 | 13,887 | 14,998 |
| SEGMENT REPORTING | |||||||||
| Customer Services | |||||||||
| Revenue | 1,768 | 1,813 | 1,793 | 1,920 | 1,568 | 1,531 | 1,670 | 1,786 | 1,724 |
| Gross profit before allocation of shared cost | 472 | 582 | 539 | 611 | 507 | 506 | 500 | 557 | 554 |
| EBITA before allocation of shared cost | 310 | 407 | 356 | 445 | 343 | 343 | 335 | 354 | 391 |
| EBITA | 173 | 266 | 233 | 279 | 197 | 205 | 191 | 223 | 251 |
| EBIT | 135 | 223 | 192 | 240 | 161 | 169 | 150 | 167 | 209 |
| Gross margin before allocation of shared cost | 26.7% | 32.1% | 30.1% | 31.8% | 32.3% | 33.1% | 29.9% | 31.2% | 32.1% |
| EBITA margin before allocation of shared cost | 17.5% | 22.4% | 19.9% | 23.1% | 21.9% | 22.4% | 20.1% | 19.8% | 22.7% |
| EBITA margin | 9.8% | 14.7% | 13.0% | 14.5% | 12.6% | 13.4% | 11.4% | 12.5% | 14.6% |
| EBIT margin | 7.6% | 12.3% | 10.7% | 12.5% | 10.3% | 11.0% | 9.0% | 9.4% | 12.1% |
| Order intake (gross) | 1,796 | 1,733 | 1,526 | 1,655 | 1,566 | 1,597 | 1,820 | 1,616 | 1,861 |
| Order backlog | 2,783 | 3,003 | 2,725 | 2,469 | 2,399 | 2,405 | 2,483 | 2,388 | 2,506 |
| Product Companies | |||||||||
| Revenue | 1,371 | 1,531 | 1,336 | 1,473 | 1,078 | 1,268 | 1,354 | 1,315 | 1,275 |
| Gross profit before allocation of shared cost | 440 | 461 | 407 | 451 | 356 | 395 | 417 | 440 | 406 |
| EBITA before allocation of shared cost | 313 | 331 | 278 | 322 | 228 | 252 | 261 | 286 | 272 |
| EBITA | 200 | 211 | 161 | 184 | 109 | 139 | 161 | 151 | 157 |
| EBIT | 182 | 198 | 143 | 166 | 86 | 103 | 146 | 125 | 132 |
| Gross margin before allocation of shared cost | 32.1% | 30.1% | 30.5% | 30.6% | 33.0% | 31.1% | 30.8% | 33.4% | 31.8% |
| EBITA margin before allocation of shared cost | 22.8% | 21.6% | 20.8% | 21.9% | 21.2% | 19.9% | 19.3% | 21.8% | 21.3% |
| EBITA margin | 14.6% | 13.8% | 12.0% | 12.5% | 10.1% | 11.0% | 11.9% | 11.5% | 12.3% |
| EBIT margin | 13.3% | 12.9% | 10.7% | 11.3% | 7.9% | 8.1% | 10.7% | 9.5% | 10.4% |
| Order intake (gross) | 1,580 | 1,431 | 1,479 | 1,252 | 1,406 | 1,165 | 1,317 | 1,438 | 1,597 |
| Order backlog | 3,291 | 2,887 | 2,864 | 2,536 | 2,823 | 2,729 | 2,681 | 2,807 | 3,124 |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
QUARTERLY KEY FIGURES
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QUARTERLY KEY FIGURES
Quarterly key figures
| DKKm | 2015 | 2016 | 2017 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | |
| Minerals | |||||||||
| Revenue | 822 | 812 | 816 | 1,126 | 698 | 680 | 727 | 1,080 | 586 |
| Gross profit before allocation of shared cost | 151 | 144 | 148 | 184 | 132 | 91 | 128 | 179 | 101 |
| EBITA before allocation of shared cost | 62 | (19) | 44 | 59 | 48 | (9) | 42 | 114 | 27 |
| EBITA | (39) | (127) | (60) | (32) | (35) | (92) | (37) | 29 | (37) |
| EBIT | (78) | (174) | (102) | (70) | (62) | (108) | (75) | 2 | (62) |
| Gross margin before allocation of shared cost | 18.4% | 17.7% | 18.2% | 16.4% | 18.9% | 13.5% | 17.6% | 16.6% | 17.3% |
| EBITA margin before allocation of shared cost | 7.5% | -2.3% | 5.4% | 5.2% | 6.9% | -1.3% | 5.8% | 10.5% | 4.7% |
| EBITA margin | -4.7% | -15.6% | -7.4% | -2.8% | -5.0% | -13.4% | -5.3% | 2.7% | -6.3% |
| EBIT margin | -9.5% | -21.4% | -12.5% | -6.3% | -8.8% | -15.8% | -10.4% | 0.2% | -10.5% |
| Order intake (gross) | 851 | 1,057 | 1,574 | 630 | 443 | 972 | 579 | 685 | 744 |
| Order backlog | 4,746 | 4,806 | 5,138 | 4,614 | 4,229 | 4,478 | 4,244 | 3,988 | 4,108 |
| Cement | |||||||||
| Revenue | 951 | 1,183 | 792 | 985 | 562 | 916 | 1,269 | 1,539 | 961 |
| Gross profit before allocation of shared cost | 181 | 209 | 135 | 106 | 104 | 142 | 169 | 175 | 103 |
| EBITA before allocation of shared cost | 132 | 165 | 83 | 29 | 45 | 81 | 93 | 77 | 50 |
| EBITA | 47 | 79 | 2 | (29) | (21) | 15 | 27 | 7 | (18) |
| EBIT | 38 | 63 | (10) | (39) | (28) | 7 | 20 | (2) | (26) |
| Gross margin before allocation of shared cost | 19.0% | 17.7% | 17.1% | 10.7% | 18.5% | 15.5% | 13.3% | 11.4% | 10.7% |
| EBITA margin before allocation of shared cost | 13.9% | 13.9% | 10.5% | 2.8% | 7.9% | 8.8% | 7.2% | 5.0% | 5.2% |
| EBITA margin | 4.9% | 6.7% | 0.3% | -3.0% | -3.7% | 1.5% | 2.1% | 0.4% | -1.9% |
| EBIT margin | 4.0% | 5.3% | -1.3% | -3.9% | -5.0% | 0.7% | 1.6% | -0.2% | -2.7% |
| Order intake (gross) | 438 | 1,289 | 680 | 396 | 2,082 | 805 | 663 | 1,026 | 1,719 |
| Order backlog | 7,331 | 6,883 | 6,529 | 5,852 | 7,016 | 6,962 | 6,382 | 5,349 | 6,085 |
Calculations of margins are based on non-rounded figures.
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED INCOME STATEMENT
| DKKm | Q1 2017 | Q1 2016 |
|---|---|---|
| Notes | ||
| Revenue | 4,371 | 3,758 |
| Production costs | (3,237) | (2,720) |
| Gross profit | 1,134 | 1,038 |
| Sales costs | (364) | (350) |
| Administrative costs | (343) | (383) |
| Other operating items | 9 | 7 |
| EBITDA | 436 | 312 |
| Special non-recurring items | - | - |
| Depreciations of tangible assets | (64) | (66) |
| EBITA | 372 | 246 |
| Amortisations of intangible assets | (100) | (93) |
| EBIT | 272 | 153 |
| Financial income | 373 | 548 |
| Financial costs | (407) | (586) |
| EBT | 238 | 115 |
| Tax for the period | (60) | (36) |
| Profit/(loss) for the period, continuing activities | 178 | 79 |
| Profit/(loss) for the period, discontinued activities | (17) | (6) |
| Profit/(loss) for the period | 161 | 73 |
| To be distributed as follows: | ||
| FLSmidth & Co. A/S' shareholders' share of profit/(loss) for the period | 160 | 73 |
| Minority shareholders' share of profit/(loss) for the period | 1 | 0 |
| 161 | 73 | |
| 7 Earnings per share (EPS): | ||
| Continuing and discontinued activities per share | 3.3 | 1.5 |
| Continuing and discontinued activities, diluted, per share | 3.2 | 1.5 |
| Continuing activities per share | 3.6 | 1.6 |
| Continuing activities, diluted, per share | 3.6 | 1.6 |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT / 19
CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| DKKm | Q1 2017 | Q1 2016 |
|---|---|---|
| Notes | ||
| Profit/(loss) for the period | 161 | 73 |
| Other comprehensive income for the period | ||
| Items that will not be reclassified to profit or loss | ||
| Actuarial gains/(losses) on defined benefit plans | - | - |
| Tax hereof | - | - |
| Items that are or may be reclassified subsequently to profit or loss | ||
| Foreign exchange adjustments regarding enterprises abroad | 72 | (153) |
| Foreign exchange adjustments of loans classified as equity in enterprises abroad | ||
| Value adjustments for hedging instruments: | ||
| Value adjustments for the period | 19 | 122 |
| Value adjustments transferred to work-in-progress | (92) | |
| Value adjustments transferred to production costs | - | - |
| Value adjustments transferred to financial income and costs | (1) | - |
| Value adjustments transferred to other operating items | - | - |
| Tax on other comprehensive income | 3 | (5) |
| Other comprehensive income for the period after tax | 93 | (128) |
| Comprehensive income for the period | 254 | (55) |
| Comprehensive income for the period attributable to: | ||
| FLSmidth & Co. A/S' shareholders' share of comprehensive income for the period | 252 | (55) |
| Minority shareholders' share of comprehensive income for the period | 2 | - |
| 254 | (55) |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT / 20
CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED CASH FLOW STATEMENT
| DKKm | Q1 2017 | Q1 2016 |
|---|---|---|
| Notes | ||
| EBITDA, continuing activities | 436 | 312 |
| EBITDA, discontinued activities | (24) | (11) |
| EBITDA | 412 | 301 |
| Adjustment for gain/(losses) on sale of tangible and intangible assets and special non-recurring items etc. | 11 | 10 |
| Adjusted EBITDA | 423 | 311 |
| Change in provisions | 19 | (110) |
| Change in net working capital | (160) | (104) |
| Cash flow from operating activities before financial items and tax | 282 | 97 |
| Financial items received and paid | (5) | (10) |
| Taxes paid | (128) | (147) |
| CFFO | 149 | (60) |
| Acquisition of intangible assets | (15) | (9) |
| Acquisition of tangible assets | (22) | (19) |
| Disposal of tangible assets | 2 | 16 |
| CFFI | (35) | (12) |
| Addition of minority shares | 5 | - |
| Disposal of treasury shares | 59 | - |
| Change in net interest-bearing debt | (385) | 127 |
| CFFF | (321) | 127 |
| Change in cash and cash equivalents | (207) | 55 |
| Cash and cash equivalents at 1 January | 1,513 | 1,157 |
| Foreign exchange adjustment, cash and cash equivalents | 22 | (36) |
| Cash and cash equivalents at 31 March | 1,328 | 1,176 |
| Cash and cash equivalents included in assets held for sale | 48 | 52 |
| Cash and cash equivalents | 1,280 | 1,124 |
| Cash and cash equivalents at 31 March | 1,328 | 1,176 |
The cash flow statement cannot be inferred from the published financial information only.
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT
CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED BALANCE SHEET
Assets
| DKKm | End of Q1 2017 | End of 2016 |
|---|---|---|
| Notes | ||
| Goodwill | 4,486 | 4,493 |
| Patents and rights | 1,197 | 1,226 |
| Customer relations | 975 | 1,007 |
| Other intangible assets | 56 | 63 |
| Completed development projects | 170 | 201 |
| Intangible assets under development | 342 | 325 |
| Intangible assets | 7,226 | 7,315 |
| Land and buildings | 1,818 | 1,823 |
| Plant and machinery | 546 | 566 |
| Operating equipment, fixtures and fittings | 118 | 133 |
| Tangible assets in course of construction | 37 | 29 |
| Tangible assets | 2,519 | 2,551 |
| Other securities and investments | 170 | 170 |
| Deferred tax assets | 1,117 | 1,117 |
| Financial assets | 1,287 | 1,287 |
| Total non-current assets | 11,032 | 11,153 |
| Inventories | 2,387 | 2,355 |
| Trade receivables | 4,210 | 4,533 |
| 5 Work-in-progress for third parties | 2,445 | 2,426 |
| Prepayments to subcontractors | 459 | 544 |
| Other receivables | 1,368 | 1,191 |
| Receivables | 8,482 | 8,694 |
| Cash and cash equivalents | 1,280 | 1,448 |
| Assets classified as held for sale | 391 | 462 |
| Total current assets | 12,540 | 12,959 |
| TOTAL ASSETS | 23,572 | 24,112 |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT / 22
CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED BALANCE SHEET
Equity and liabilities
| DKKm | End of Q1 2017 | End of 2016 |
|---|---|---|
| Notes | ||
| Share capital | 1,025 | 1,025 |
| Foreign exchange adjustments | 183 | 112 |
| Value adjustments of hedging transactions | (94) | (112) |
| Retained earnings | 7,334 | 7,089 |
| Proposed dividend | 0 | 307 |
| FLSmidth & Co. A/S' shareholders' share of equity | 8,448 | 8,421 |
| Minority shareholders' share of equity | 48 | 41 |
| Total equity | 8,496 | 8,462 |
| Deferred tax liabilities | 392 | 379 |
| Pension liabilities | 296 | 296 |
| 3 Other provisions | 352 | 349 |
| Bank loans and mortgage debt | 2,643 | 3,930 |
| Prepayments from customers | 125 | 90 |
| Other liabilities | 82 | 140 |
| Long-term liabilities | 3,890 | 5,184 |
| Pension liabilities | 9 | 9 |
| 3 Other provisions | 1,090 | 1,101 |
| Bank loans | 970 | 20 |
| Prepayments from customers | 1,449 | 1,424 |
| 5 Work-in-progress for third parties | 2,043 | 2,093 |
| Trade payables | 2,574 | 3,037 |
| Current tax liabilities | 391 | 351 |
| Other liabilities | 1,958 | 1,828 |
| Short-term liabilities | 10,484 | 9,863 |
| Liabilities directly associated with assets classified as held for sale | 702 | 603 |
| Total liabilities | 15,076 | 15,650 |
| TOTAL EQUITY AND LIABILITIES | 23,572 | 24,112 |
FLSMIDTH: 1 JANUARY - 31 MARCH 2017 INTERIM REPORT / 23
CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED EQUITY
| DKKm | Share capital | Foreign exchange adjustments | Value adjustments of hedging transactions | Retained earnings | Proposed dividend | FLSmidth & Co. A/S' shareholders' share of equity | Minority shareholders' share of equity | Total |
|---|---|---|---|---|---|---|---|---|
| Equity at 1 January 2017 | 1,025 | 112 | (112) | 7,089 | 307 | 8,421 | 41 | 8,462 |
| Comprehensive income for the period | ||||||||
| Profit/(loss) for the period | 160 | 160 | 1 | 161 | ||||
| Other comprehensive income | ||||||||
| Actuarial gains/losses on defined benefit plans | ||||||||
| Foreign exchange adjustments regarding enterprises abroad | 71 | 71 | 1 | 72 | ||||
| Value adjustments of hedging instruments: | ||||||||
| Value adjustments for the period | 19 | 19 | 19 | |||||
| Value adjustments transferred to work- in-progress | ||||||||
| Value adjustments transferred to financial income and costs | (1) | (1) | (1) | |||||
| Tax on other comprehensive income | 3 | 3 | 3 | |||||
| Other comprehensive income total | 0 | 71 | 18 | 3 | 0 | 92 | 1 | 93 |
| Comprehensive income for the period | 0 | 71 | 18 | 163 | 0 | 252 | 2 | 254 |
| Dividend transferred to other liabilities | 12 | (307) | (295) | 0 | (295) | |||
| Share-based payment, share options | 11 | 11 | 11 | |||||
| Disposal of treasury shares | 59 | 59 | 59 | |||||
| Acquisition of minority interests | 0 | 5 | 5 | |||||
| Equity at 31 March 2017 | 1,025 | 183 | (94) | 7,334 | 0 | 8,448 | 48 | 8,496 |
| The period's movements in holding of treasury shares (1,000) | Q1 2017 | Q1 2016 | ||||||
| --- | --- | --- | ||||||
| Treasury shares at 1 January | 2,276 | 2,328 | ||||||
| Acquisition of treasury shares | 3 | 1 | ||||||
| Share options settled | (211) | 0 | ||||||
| Treasury shares at 31 March | 2,068 | 2,329 |
Representing 4.0% in Q1 2017 (Q1 2016: 4.5%) of the share capital
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CONSOLIDATED FINANCIAL STATEMENTS
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CONSOLIDATED EQUITY
| DKKm | Share capital | Foreign exchange adjustments | Value adjustments of hedging transactions | Retained earnings | Proposed dividend | FLSmidth & Co. A/S' shareholders' share of equity | Minority shareholders' share of equity | Total |
|---|---|---|---|---|---|---|---|---|
| Equity at 1 January 2016 | 1,025 | (50) | (106) | 6,873 | 205 | 7,947 | 35 | 7,982 |
| Comprehensive income for the period | ||||||||
| Profit/(loss) for the period | 73 | 73 | 0 | 73 | ||||
| Other comprehensive income | ||||||||
| Actuarial gains/losses on defined benefit plans | ||||||||
| Foreign exchange adjustments regarding enterprises abroad | (153) | (153) | (153) | |||||
| Value adjustments of hedging instruments: | ||||||||
| Value adjustments for the period | 122 | 122 | 122 | |||||
| Value adjustments transferred to work- in-progress | (92) | (92) | (92) | |||||
| Tax on other comprehensive income | (5) | (5) | (5) | |||||
| Other comprehensive income total | 0 | (153) | 30 | (5) | 0 | (128) | 0 | (128) |
| Comprehensive income for the period | 0 | (153) | 30 | 68 | 0 | (55) | 0 | (55) |
| Share-based payment, share options | 11 | 11 | 11 | |||||
| Equity at 31 March 2016 | 1,025 | (203) | (76) | 6,952 | 205 | 7,903 | 35 | 7,938 |
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NOTES TO THE INTERIM REPORT
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AT A GLANCE
EBITA – BRIDGE
NET WORKING CAPITAL – BRIDGE
Development from Q4 2016 to Q1 2017
ROCE BREAKDOWN
- Cost consist of SG&A, depreciations and special non-recurring items.
** Average values, please refer to definitions of terms, see note 11.
1) Measured at cost value
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NOTES TO THE INTERIM REPORT
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LIST OF NOTES AND NOTES TO THE INTERIM REPORT
- Breakdown of the Group by segments
- Income statement classified by function
- Other provisions
- Fair value hierarchy of financial instruments
-
Work-in-progress for third parties
-
Development in contingent liabilities
- Earnings per share
- Management estimates and assessments
- Accounting policies
- Definitions of terms
1. Breakdown of the Group by segments for 2017
Q1 2017
| DKKm | Customer Services | Product Companies | Minerals | Cement | Shared costs¹⁾ | Other companies etc.²⁾ | Continuing activities | Discontinued activities³⁾ | FLSmidth Group |
|---|---|---|---|---|---|---|---|---|---|
| INCOME STATEMENT | |||||||||
| External revenue | 1,707 | 1,127 | 582 | 955 | - | 4,371 | 189 | 4,560 | |
| Internal revenue | 17 | 148 | 4 | 6 | (175) | - | - | - | |
| Total revenue | 1,724 | 1,275 | 586 | 961 | (175) | 4,371 | 189 | 4,560 | |
| Production costs | (1,170) | (869) | (485) | (858) | (43) | 188 | (3,237) | (196) | (3,433) |
| Gross profit | 554 | 406 | 101 | 103 | (43) | 13 | 1,134 | (7) | 1,127 |
| SG&A costs | (144) | (116) | (69) | (51) | (323) | 5 | (698) | (17) | (715) |
| EBITDA | 410 | 290 | 32 | 52 | (366) | 18 | 436 | (24) | 412 |
| Special non-recurring items | - | - | - | - | - | - | - | - | |
| Depreciations of tangible assets | (19) | (18) | (5) | (2) | (20) | - | (64) | - | (64) |
| EBITA before allocation of shared costs | 391 | 272 | 27 | 50 | |||||
| Allocation of shared costs | (140) | (115) | (64) | (68) | 386 | 1 | |||
| EBITA | 251 | 157 | (37) | (18) | 19 | 372 | (24) | 348 | |
| Amortisations of intangible assets | (42) | (25) | (25) | (8) | - | (100) | - | (100) | |
| EBIT | 209 | 132 | (62) | (26) | 19 | 272 | (24) | 248 | |
| ORDER INTAKE (GROSS) | 1,861 | 1,597 | 744 | 1,719 | (360) | 5,561 | 42 | 5,603 | |
| ORDER BACKLOG | 2,506 | 3,124 | 4,108 | 6,085 | (825) | 14,998 | 1,344 | 16,342 | |
| FINANCIAL RATIOS | |||||||||
| Gross margin | 32.1% | 31.8% | 17.3% | 10.7% | N/A | 25.9% | N/A | 24.7% | |
| EBITDA margin | 23.8% | 22.7% | 5.6% | 5.4% | N/A | 10.0% | N/A | 9.0% | |
| EBITA margin before allocation of shared costs | 22.7% | 21.3% | 4.7% | 5.2% | N/A | N/A | N/A | N/A | |
| EBITA margin | 14.6% | 12.3% | -6.3% | -1.9% | N/A | 8.5% | N/A | 7.6% | |
| EBIT margin | 12.1% | 10.4% | -10.5% | -2.7% | N/A | 6.2% | N/A | 5.4% | |
| Number of employees at 31 March | 3,900 | 2,744 | 1,027 | 2,662 | 1,384 | - | 11,717 | 152 | 11,869 |
Reconciliation of Profit/(loss) for the period before tax
Segment earnings before interest and tax (EBIT) of reportable segments
Financial income
Financial costs
EBT
272 (24)
373 1
(407)
238 (23)
¹⁾ Other companies etc. consist of companies with no activity, real estate companies, eliminations and the parent company.
²⁾ Discontinued activities mainly consist of bulk material handling.
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NOTES TO THE INTERIM REPORT
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1. Breakdown of the Group by segments for 2016
Q1 2016
| DKKm | Customer Services | Product Companies | Minerals | Cement | Shared costs^{1)} | Other companies etc.^{1)} | Continuing activities | Dis-continued activities^{2)} | FLSmidth Group |
|---|---|---|---|---|---|---|---|---|---|
| External revenue | 1,552 | 951 | 693 | 562 | - | - | 3,758 | 163 | 3,921 |
| Internal revenue | 16 | 127 | 5 | - | - | (148) | - | - | - |
| Total revenue | 1,568 | 1,078 | 698 | 562 | (148) | 3,758 | 163 | 3,921 | |
| Production costs | (1,061) | (722) | (566) | (458) | (61) | 148 | (2,720) | (162) | (2,882) |
| Gross profit | 507 | 356 | 132 | 104 | (61) | - | 1,038 | 1 | 1,039 |
| SG&A costs | (144) | (109) | (80) | (57) | (337) | 1 | (726) | (12) | (738) |
| EBITDA | 363 | 247 | 52 | 47 | (398) | - | 312 | (11) | 301 |
| Special non-recurring items | - | - | - | - | - | 1 | - | - | - |
| Depreciations of tangible assets | (20) | (19) | (4) | (2) | (19) | (2) | (66) | - | (66) |
| EBITA before allocation of shared costs | 343 | 228 | 48 | 45 | |||||
| Allocation of shared costs | (146) | (119) | (83) | (66) | 417 | (3) | |||
| EBITA | 197 | 109 | (35) | (21) | (4) | 246 | (11) | 235 | |
| Amortisations of intangible assets | (36) | (23) | (27) | (7) | - | (93) | - | (93) | |
| EBIT | 161 | 86 | (62) | (28) | (4) | 153 | (11) | 142 | |
| ORDER INTAKE (GROSS) | 1,566 | 1,406 | 443 | 2,082 | (216) | 5,281 | 27 | 5,308 | |
| ORDER BACKLOG | 2,399 | 2,823 | 4,229 | 7,016 | (675) | 15,792 | 779 | 16,571 | |
| Gross margin | 32.3% | 33.0% | 18.9% | 18.5% | N/A | 27.6% | N/A | 26.5% | |
| EBITDA margin | 23.2% | 22.9% | 7.6% | 8.4% | N/A | 8.3% | N/A | 7.7% | |
| EBITA margin before allocation of shared costs | 21.9% | 21.2% | 6.9% | 7.9% | N/A | N/A | N/A | N/A | |
| EBITA margin | 12.6% | 10.1% | -5.0% | -3.7% | N/A | 6.5% | N/A | 6.1% | |
| EBIT margin | 10.3% | 7.9% | -8.8% | -5.0% | N/A | 4.1% | N/A | 3.6% | |
| Number of employees at 31 March | 4,059 | 2,850 | 1,276 | 2,708 | 1,677 | - | 12,570 | 153 | 12,723 |
Reconciliation of Profit/(loss) for the period before tax
Segment earnings before interest and tax (EBIT) of reportable segments
Financial income
Financial costs
EBT
153 (11)
548 2
(586) -
115 (9)
1) Other companies etc. consist of companies with no activity, real estate companies, eliminations and the parent company.
Discontinued activities mainly consist of bulk material handling.
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NOTES TO THE INTERIM REPORT
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2. Income statement classified by function
The Group presents the Income Statement for continuing business based on a classification of the costs by function in order to show the earnings before special non-recurring items, depreciation and amortisation (EBITDA). Depreciation, amortisation and impairment of tangible and intangible assets are therefore separated from the individual functions, presented on separate lines.
| DKKm | Q1 2017 | Q1 2016 |
|---|---|---|
| Revenue | 4,371 | 3,758 |
| Production costs, including depreciations and amortisations | (3,305) | (2,776) |
| Gross profit | 1,066 | 982 |
| Sales costs, including depreciations and amortisations | (379) | (357) |
| Administrative costs, including depreciations and amortisations | (424) | (479) |
| Other operating items | 9 | 7 |
| EBIT | 272 | 153 |
| Depreciation and amortisation consist of: | ||
| Amortisations of intangible assets | (100) | (93) |
| Depreciations of tangible assets | (64) | (66) |
| (164) | (159) | |
| Depreciation and amortisation are divided into: | ||
| Production costs | (68) | (56) |
| Sales costs | (15) | (7) |
| Administrative costs | (81) | (96) |
| (164) | (159) |
3. Other provisions
| DKKm | Q1 2017 | Q1 2016 | End of 2016 |
|---|---|---|---|
| Provisions at 1 January | 1,450 | 1,556 | 1,556 |
| Foreign exchange adjustments | 1 | (28) | 13 |
| Additions | 149 | 95 | 800 |
| Used | (119) | (55) | (356) |
| Reversals | (59) | (84) | (511) |
| Reclassification to/from other liabilities | 20 | (34) | (52) |
| Provisions at 31 March | 1,442 | 1,450 | 1,450 |
| The maturity of provisions is specified as follows: | |||
| Short-term liabilities | 1,090 | 965 | 1,101 |
| Long-term liabilities | 352 | 485 | 349 |
| 1,442 | 1,450 | 1,450 |
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NOTES TO THE INTERIM REPORT
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4. Fair value hierarchy of financial instruments
| DKKm | Q1 2017 | Q1 2016 | End of 2016 |
|---|---|---|---|
| Financial assets available for sale | 162 | 116 | 163 |
| Financial assets measured at fair value through the income statement | 91 | 108 | 103 |
| Financial liabilities measured at fair value through the income statement | 104 | 164 | 135 |
The fair value of financial assets and liabilities measured at fair value through the Income Statement is measured at quoted prices in an active market for similar assets or liabilities or other valuation methods, where all significant inputs are based on observable market data (level 2).
Of financial assets available for sale, DKK 141m (Q1 2016: DKK 92m) are measured at quoted prices in an active market for the same type of instruments (level 1). The remaining financial assets available for sale are measured using valuation methods, where all significant inputs are based on observable market data (level 2).
There have been no significant transfers between level 1 and level 2 in 2017 or 2016.
The carrying amount is equal to the fair value except for the financial liabilities measured at amortised cost.
5. Work-in-progress for third parties
| DKKm | Q1 2017 | Q1 2016 | End of 2016 |
|---|---|---|---|
| Costs incurred | 33,357 | 36,817 | 34,116 |
| Profit recognised as income, net | 4,878 | 6,235 | 5,447 |
| Work-in-progress for third parties | 38,235 | 43,052 | 39,563 |
| Invoicing on account to customers | (37,833) | (42,920) | (39,230) |
| 402 | 132 | 333 | |
| Of which work-in-progress for third parties is stated under assets and under liabilities | 2,445 | 2,410 | 2,426 |
| (2,043) | (2,278) | (2,093) | |
| Net work-in-progress for third parties | 402 | 132 | 333 |
Work-in-progress for third parties consists of all open projects per end of the period.
6. Development in contingent liabilities
Contingent liabilities at 31 March 2017 amount to 5.4bn (Q1 2016: DKK 4.7bn), which include performance bonds and payment guarantees at DKK 5.0bn (Q1 2016: DKK 4.3bn). See note 7.3 in the 2016 Annual Report for a general description of the nature of the Group's contingent liabilities.
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NOTES TO THE INTERIM REPORT
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7. Earnings per share (EPS)
| DKKm | Q1 2017 | Q1 2016 |
|---|---|---|
| Earnings | ||
| FLSmidth & Co. A/S' shareholders' share of profit/(loss) for the period | 160 | 73 |
| FLSmidth & Co. A/S' profit/(loss) from discontinued activities | (17) | (6) |
| Number of shares, average (1,000) | ||
| Number of shares issued | 51,250 | 51,250 |
| Adjustment for treasury shares | (2,172) | (2,344) |
| Share options in-the-money | 438 | - |
| Average number of shares | 49,516 | 48,906 |
| Earnings per share (1,000) | ||
| Continuing and discontinued activities per share | 3.3 | 1.5 |
| Continuing and discontinued activities, diluted, per share | 3.2 | 1.5 |
| Continuing activities per share | 3.6 | 1.6 |
| Continuing activities, diluted, per share | 3.6 | 1.6 |
Non-diluted earnings per share in respect of discontinued activities amount to DKK -0,4 (Q1 2016: DKK -0,1) and diluted earnings per share in respect of discontinued activities amount to DKK -0,3 (Q1 2016: DKK -0,1).
As of 31 March 2017 number of share options in-the-money amounted to 2,377 thousands (Q1 2016: 1,373 thousands).
8. Management estimates and assessments
When preparing the interim report in accordance with the Group's accounting policies, it is necessary that Management makes estimates and lays down assumptions that affect the recognised assets and liabilities, including the disclosures made regarding contingent assets and liabilities.
Management bases its estimates on historical experience and other assumptions considered relevant at the time in question. These estimates and assumptions form the basis of the recognised carrying amounts of assets and liabilities and the derived effects on the income statement. The actual results may deviate over time. Reference is made to chapter 1, Significant accounting estimates page 79 and to specific notes in the 2016 Annual Report for further details.
9. Accounting policy
The interim report of the Group for the first quarter 2017 is presented in accordance with IAS 34, Presentation of financial statements, as approved by the EU and additional Danish disclosure requirements regarding interim reporting by listed companies.
Apart from the below mentioned changes, the accounting policies are unchanged from those adopted in the 2016 Annual Report. Reference is made to note 7.13, Accounting policy, in page 134 and to specific notes in the 2016 Annual Report for further details.
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NOTES TO THE INTERIM REPORT
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10. Definitions of terms
Book-to-bill
Order intake as a percentage of revenue.
BVPS
Book value per share.
Capital employed, average
(Capital employed, end of period + capital employed end of same period last year)/2
Capital employed, end of period
Intangible assets (cost) + Tangible assets (carrying amount) + Net working capital.
Capital expenditure (CAPEX)
Investment in tangible assets.
Cash conversion
Free cash flow adjusted for acquisitions and disposals as a percentage of EBIT.
CFFI
Cash flow from investing activities.
CFFO
Cash flow from operating activities.
CFFF
Cash flow from financing activities.
CFPS (cash flow per share), (diluted)
CFFO as a percentage of average number of shares (diluted).
DIFOT
Delivery in full on time.
EBITDA
Earnings before special non-recurring items, interest, tax, depreciation and amortisation.
EBITDA margin
EBITDA as a percentage of revenue.
EBIT
Earnings before interest and tax.
EBIT margin
EBIT as a percentage of revenue.
EBITA
Earnings before, interest, tax and amortisation.
EBITA margin
EBITA as a percentage of revenue.
EBT
Earnings before tax.
EBT margin
EBT as a percentage of revenue.
Effective tax rate
Income taxes as a percentage of EBT.
EPC projects
Engineering, procurement and construction.
EPS projects
Engineering, procurement and supervision.
EPS (earning per share)
Net profit/(loss) divided by the average number of shares outstanding.
EPS (earnings per share), (diluted)
Net profit/(loss) divided by the average number of shares outstanding, adjusted for treasury shares less share options in-the-money.
Equity ratio
Equity as a percentage of total asset.
Financial gearing
Net interest-bearing debt (NIBD) divided by last 12 months' EBITDA.
Free cash flow
CFFO + CFFI.
Free cash flow adjusted for acquisition and disposals of enterprises
CFFO + CFFI ± acquisition and disposals of enterprises.
Free cash flow yield
(Free cash flow adjusted for acquisitions and disposals of enterprises/per share)/share price).
Gross margin
Gross profit as a percentage of revenue.
LITFR
Lost time injury frequency rate.
Market capitalisation
The share price multiplied by the number of shares outstanding end of period.
Net interest-bearing debt
Interest-bearing debt less interest-bearing assets and bank balances.
Net working capital, average
(Net working capital, end of period + net working capital, end of the period last period)/2
Net working capital, end
Inventories + Trade receivables + work-in-progress for third parties, net + prepayments, net + financial instruments, net + other receivables – other liabilities – trade payables.
Net working capital ratio, average
Net working capital, average as a percentage of last 12 months revenue.
Net working capital ratio, end
Net working capital as a percentage of last 12 months' revenue.
Number of shares outstanding
The total number of shares, excluding FLSmidth's holding of treasury shares.
Operational expenditure (OPEX)
External costs, personal cost and other income and costs.
Order backlog
The value of future contracts end of period. On O&M contracts, the order backlog includes the next 12 months' expected revenue.
Order backlog / Revenue
Order backlog as a percentage of last 12 months' revenue.
Order intake
Orders are included as order intake when an order becomes effective, meaning when the contract becomes binding for both parties dependent on the specific conditions of the contract.
Other comprehensive income
All items recognised in equity other than those related to transactions with owners of the company.
Pay-out ratio
The total dividends for the period as a percentage of profit/(loss) excluding minority. Shareholder's share of profit/(loss) for the period.
Return on equity
Profit/(loss) for the last 12 months' as a percentage of equity (average).
ROCE (return on capital employed)
EBITA as a percentage of capital employed.
Sales, General & Administrative costs (SG&A costs)
Sales cost + Administrative cost ± other operating items.
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FLSmidth & Co. A/S
Vigerslev Allé 77
DK-2500 Valby
Denmark
Tel.: +45 36 18 18 00
Fax: +45 36 44 11 46
[email protected]
www.flsmidth.com
CVR No. 58180912
FLSMIDTH
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