18 August 2005
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Transcript of 18 August 2005
18 August 2005
Interim Report Q2 2005
Agenda
1. Main conclusions Q2 2005
2. Highlights • Financial• Cement• Minerals• Other activities
3. Guidance 2005
4. Strategy update
Main conclusions Q2 2005
■Continuing activities H1 2005
Turnover DKK 4.7bn (H1 2004: DKK 4.9bn)
EBIT DKK 151m (H1 2004: DKK -63m)
EBT DKK 238m (H1 2004: DKK -103m)
CFFO DKK 607m (H1 2004: DKK -226m)
Order intake DKK 6.5bn (H1 2004: DKK 4.9bn)
■New global cement kiln capacity in 2005 (excl. China)
Now expected at 55-60 mty (previously 50-55mty)
■Guidance for 2005
Turnover DKK 10.5bn (previously DKK 10bn)
EBIT DKK 250-300m (previously DKK170-220m)
EBT DKK 320-380m (previously DKK 220-280m)
Highlights year to date
■ High market activity within all business areas
■ Order intake up 34% in H1 vs. last year - Order intake from aftermarket up 15%
■ Order backlog record high
■ Turnaround in FLSmidth Airtech, MAAG Gear and Dansk Eternit Holding progressing as planned
■ No major negative project deviations so far this year
Order intake
0
500
1,000
1,500
2,000
2,500
3,000
Q32003
Q42003
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Order intake on a quarterly basis (DKKm)
Cement Minerals Other
Order backlog
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q32003
Q42003
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Order backlog on a quarterly basis (DKKm)
Cement Minerals Other
Financial highlights Q2 2005 Continuing activitiesDKKm (YTD) Q2 2004 Q2 2005 H1 2004 H1 2005 Change H1
Net turnover 2,781 2,474 4,893 4,683 -210
EBITDA (27) 167 22 232 +210
EBIT (70) 126 (63) 151 +214
EBT (93) 188 (103) 238 +341
Tax 18 (21) 19 (32) -51
Earnings (75) 167 (84) 206 +290
CFFO (96) 483 (226) 607 +833
CFFI (13) (32) (11) (88) -99
Turnover: 4% decrease in turnover vs. last year (H1 2004 was positively impacted by processing of on one large order)
EBIT/EBITDA: positive operational earnings in all business units in Q2 and
positive development vs. last year in all business units (except in Pfister where sales and earnings were exceptionally high in H1 04)
EBT: positively impacted by revaluation of shares in cement companies (DKK +27m) and by sale of shares in Denerco Oil
(DKK +36m)
CFFO: positive development in CFFO in Q2, particularly in FLSmidth due to an increase in prepayments from customers and reduction in work-in-progress
Financial highlights 2nd quarter 2005
(DKKm)EBIT Q2 EBIT H1
2004*) 2005 change 2004*) 2005 change
FLSmidth (14) 44 +58 (6) 59 +65
FLSmidth Airtech (36) 2 +38 (57) 3 +60
Pfister 16 9 -7 26 13 -13
Ventomatic 3 16 +13 9 25 +16
MAAG Gear (14) 3 +17 (9) (3) +6
Cement (45) 75 +120 (37) 97 +134
Minerals (3) 27 +30 5 28 +23
Dansk Eternit Holding 7 26 +19 11 39 +28
Densit 1 1 0 (2) (1) +1
Other (elim. + parent + etc.) (30) (3) +27 (40) (12) +28
Continuing activities (70) 126 +196 (63) 151 +214
FLS miljø (8) 1 +9 (10) 1 +11
Other (sold companies, etc.) 156 (2) -158 217 (2) -219
Total 78 125 +47 144 150 +6
*) Restated according to IFRS
Turnover
0
500
1,000
1,500
2,000
2,500
3,000
Q32003
Q42003
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Turnover on a quarterly basis (DKKm)
Cement Minerals DEH
-200-150
-100-50
050
100150
200
Q32003
Q42003
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
EBIT on a quarterly basis (DKKm)
Cement Minerals DEH
EBIT
-402
Balance sheet
DKKm Q2 2004 Q2 2005 End 2004
Intangible assets 193 215 197
Tangible assets 1,287 1,202 1,147
Financial fixed assets 335 394 385
Current assets 9,682 6,088 6,463
Total assets 11,497 7,899 8,192
Equity 2,603 2,394 2,629
Liabilities 8,894 5,505 5,563
Total liabilities 11,497 7,899 8,192
Solvency 23% 30% 32%
SOLGT
SOLGT
FLSmidth & Co.
Cement Minerals
FLSmidth
FLSmidth Airtech
FLSmidth Materials Handling
FLSmidth Customer Services
Pfister (feeders)
Ventomatic (packers)
MAAG Gear (gears)
FFE Minerals
Business areas
FLSmidth AutomationOther activities
FLS miljø being closed down
Dansk Eternit Holding (fibre cement products)
Densit (ultra-high strength cement-based products)
Cement
FLSmidth supplies complete plants, equipment, single machine units, spare parts, know-how, services and maintenance to the global cement industry.
Specialised parts and ma-chinery for cement plants are supplied by FLSmidth divisions and product companies.
Cement
Cement
FLSmidth
FLSmidth Airtech
FLSmidth Materials Handling
FLSmidth Customer Services
Pfister (feeders)
Ventomatic (packers)
MAAG Gear (gears)
FLSmidth Automation
FLSmidth & Co.
Cement
Highlights H1 2005
Improved earnings vs. last year Significant improvement in cash-flow
vs. last year High level of activity and order intake New global cement kiln capacity excl.
China expected to reach 55-60mty in 2005
Focus / Actions
Off-shoring to India Procurement from low cost
countries Optimising project execution Increased investments in R&D New products and services
H1 20053,264
97117
H1 20043,741
(37)(51)
DKKm YTDNet turnoverEBITEBT
New global contracted cement kiln capacity on a yearly basis 1980-2006
010203040506070
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Est
200
5
Est
200
6
Million tonnes
Average 1980 – 2004; 26m tonnes per year
Positive trends in demand for new kiln capacity continue => 55-60 mty in 2005 excl. China Revival of old, and arrival of new market participants – especially from China Increased level of activity in India, Middle East and USA
New global contracted cement kiln capacity excl. China
Minerals
FLSmidth & Co.
Minerals
FFE Minerals
Minerals
Projects and services to the global minerals industries are provided and marketed under the name of FFE Minerals.
FFE Minerals is a global supplier of machinery and engineered process systems as well as operating and maintenance services to the mining and minerals industries as well as to the pulp & paper industries
Minerals
Highlights H1 2005
Substantial growth in order intake Order backlog record high Market very active in India and within
Materials Handling One of two problem projects has been
closed, whereas final settlement is outstanding on the second
Focus / Actions
Controlled organic growth Transformation from supplier of
single equipment to supplier of engineered solutions
Growth opportunities
H1 2005803
2831
H1 2004705
52
DKKm YTDNet turnoverEBITEBT
Other activities
FLSmidth & Co.
Other activities
Dansk Eternit Holding (fibre cement products)
Densit (ultra-high strength cement-based products)
Other activities
For a transitional period of some years, the Group will be the owner of the two building material
companies Dansk Eternit Holding and Densit.
Dansk Eternit Holding and Densit are pursuing individual restructuring strategies. Once these initiatives have resulted in a stable and satisfying track record of results, a sales process will be initiated.
The restructuring is progressing as planned and is supported by positive markets.
Dansk Eternit Holding
Highlights H1 2005
Stormy weather in Scandinavia considerably increased demand for corrugated sheets in Q1 and Q2=> increase in turnover and earnings
Expects a positive result in H2, but no further impact from the storms
Focus / Actions
Optimisation of production and distribution platform
H1 2005566
3938
H1 2004483
112
DKKm YTDNet turnoverEBITEBT
Fives Lille(FCB, Pillard, Solios)
702
ThyssenKrupp(Polysius)
Outokumpu(Technology)
39,342
7,136
3,976
67.7
Metso(Minerals)
MFC (KHD)
446
49.2
423
39.1
49.0
FLSmidth
1,979
1,343
Suppliers of equipment and services to the global cement & minerals businesses
Total sales
Sales to cement and minerals
(All figures in million EUR in 2004)
1,312 178 127
The global competition in value
409
Sinoma
423
Guidance 2005
Upward revision of turnover and
earnings forecasts
■ Turnover DKK 10.5bn (previously DKK 10bn)
■ EBIT DKK 250-300m (previously DKK 170-220m)
■ EBT DKK 320-380m (previously DKK 220-280m)
Business area guidance 2005
■ CementTurnover 2005 ~ DKK 7.5bnEBIT 2005 > EBIT 2004=DKK 139m (restated)
■ MineralsTurnover 2005 ~ DKK 2bnEBIT 2005 >>EBIT 2004=DKK 23m (restated)
■ Dansk Eternit HoldingTurnover 2005 ~ DKK 1bnEBIT 2005 > EBIT H1 2005=DKK 39m
■ OverheadsEBIT 2005 ~ DKK -15m
Strategy update
■ Ahead of plans to reach 5%-EBT target in 2007
■ Management will continue to focus on optimising business operations and will, in addition, increase its focus on investments in new products and services within Cement and Minerals.
Questions
Interim Report Q2 2005