FLS Industries A/S Annual Accounts 2002 2002 Annual Report 2002.
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Transcript of FLS Industries A/S Annual Accounts 2002 2002 Annual Report 2002.
FLS Industries A/SAnnual Accounts 2002
2002
Annual Report 2002
FLS Industries A/SAnnual Accounts 2002
Agenda
• Main conclusions• Annual Accounts • Core activities
– F.L.Smidth Group– FLS Building Materials
• Non-strategic activities– FLS Aerospace– FLS miljø– Other
• Prospects for 2003• Conclusion• Questions
FLS Industries A/SAnnual Accounts 2002
Main conclusions
FLS Group
• Turnover DKK 16,444m (DKK 18,930m in 2001).
• Earnings before interest and tax (EBIT) DKK –647m (DKK
195m in 2001) – on a par with expectations.
• Earnings before tax (EBT) DKK –1,347m (DKK –12m in
2001) – on a par with expectations.
• Net interest-bearing debt DKK 2,953m (DKK 4,990m in
2001).
• Cash flows from operating activities DKK 714m (DKK
345m in 2001 adjusted for NKT dividend).
FLS Industries A/SAnnual Accounts 2002
Financial highlights for Group
DKKm Turn. EBIT EBT
F.L.Smidth Group 7,217 105 103
FLS Building Materials 4,899 318 368
FLS miljø 1,392 (659) (779)
FLS Aerospace 2,730 (202) (289)
Other 206 (209) (750)
Total 16,444 (647) (1,347)
Financial highlights for the activities of the Group
FLS Industries A/SAnnual Accounts 2002
Focusing
DKKbn 2001 2002
Unicon activities 0.6
NKT shares 0.6
Other 0.2
RMIG and Unicon paving stone products 0.5
Total 0.5 1.4
Disposal of non-strategic activities
FLS Industries A/SAnnual Accounts 2002
Cash flows
DKKm 2001 2002
Operating activities 345* 714
Operating investments (1,016) (701)
Net from operations (671) 13
Cash flows
*Adjusted for NKT Holding dividend in 2001
FLS Industries A/SAnnual Accounts 2002
Balance sheet
DKKm 2001 2002
Total assets 18,828 15,636
Shareholders’ equity 6,869 5,729
Net interest-bearing debt 4,990 2,953
Solvency ratio 36% 37%
Balance sheet
FLS Industries A/SAnnual Accounts 2002
Main conclusions
• Order intake higher than anticipated
• Net turnover lower than last year and lower than anticipated
• EBIT and EBT on a par with 3rd quarter estimate
• Highly improved cash flows from operating activities
• Order backlog increased DKK 1.1bn to DKK 7.6bn
• Significant orders in Algeria, South Africa, China, Libya, USA and UK
• Sales of services and spare parts fell in 2002
• Market for new kiln capacity still under pressure
F.L.Smidth GroupAnnual Accounts 2002
FLS Industries A/SAnnual Accounts 2002
Financial highlights
F.L.Smidth GruppenAnnual Accounts 2002
F.L.Smidth Group
DKKm 2001 2002
Net turnover 7,982 7,217
EBITDA 352 250
Earnings before interest and tax (EBIT) 194 105
Earnings before tax (EBT) 219 103
Cash flows from operating activities (384) 234
Cash flows from operating and investing activ. (541) 165
Net interest-bearing debt (balances) (66) (534)
FLS Industries A/SAnnual Accounts 2002
Global cement consumption
F.L.Smidth GroupAnnual Accounts 2002
F.L.Smidth Group
FLS Industries A/SAnnual Accounts 2002
Yearly contracted cement kiln capacity
F.L.Smidth GroupAnnual Accounts 2002
F.L.Smidth Group
*exclusive of China
FLS Industries A/SAnnual Accounts 2002
Order intake 1991-2002
F.L.Smidth GroupAnnual Accounts 2002
F.L.Smidth Group
FLS Industries A/SAnnual Accounts 2002
Order backlog in sales prices
F.L.Smidth GroupAnnual Accounts 2002
F.L.Smidth Group
FLS Industries A/SAnnual Accounts 2002
Geographical distribution of orders
F.L.Smidth GroupAnnual accounts 2002
F.L.Smidth Group
FLS Industries A/SAnnual Accounts 2002
Prospects
F.L.Smidth GroupAnnual Accounts 2002
F.L.Smidth Group
• Total order backlog DKK 7,619m• Majority to be processed in 2003-2004
• Same level of activity in 2003 as in 2002
• Earnings before tax (EBT) expected to be slightly above 2002
• At the end of the year projects in progress were, as a whole, in accordance with the latest plans and budgets
FLS Industries A/SAnnual Accounts 2002
Main conclusions
FLS Building MaterialsAnnual Accounts 2002
• EBIT DKK 318m, better than 2001 (DKK 294m) as expected
• EBIT from core activities DKK 334m (DKK 324m)
• Market share generally maintained
• Investments kept at a low level
• Undertakings and activities sold at DKK 1.0bn
• Net cash flow DKK 1.3bn (DKK 0.3bn)
• NIBD reduced to DKK 1.4bn (DKK 2.7bn)
• ROCE 8.0% (5.4%) and ROCE in core activities 9.6% (7.6%)
FLS Industries A/SAnnual Accounts 2002
Financial highlights
FLS Building MaterialsAnnual Accounts 2002
FLS Building Materials – core activities
DKKm 2001 2002
Net turnover 3,873 3,925
EBITDA 680 726
Earnings before interest and tax (EBIT) 324 334
Earnings before tax (EBT) 355 422
Cash flows from operating activities 512 539
Cash flows from operating and investing activ. 81 500
Return on capital employed (ROCE) 7.6% 9.6%
FLS Industries A/SAnnual Accounts 2002
Focusing
FLS Building MaterialsAnnual Accounts 2002
FLS Building Materials
• 2002 was a busy year focusing on divestments:
•Aalborg Portland: Ships
•Unicon: Paving stone activities in Poland, DK and
US All US activities (RMC and Pumping)
•DEH: Højslev Teglværk and office building
• Divestment targets achieved in 2002
• In 2003 the last non-core activities will be sold
FLS Industries A/SAnnual Accounts 2002
Market
FLS Building MaterialsAnnual Accounts 2002
Aalborg Portland:
• White cement plants in Egypt and Malaysia on stream
• Conversion of grey kiln in Aalborg to white cement production
• Market share in grey cement maintained
Unicon:
• Strategy to focus on ready-mix concrete implemented
• Focus on ready-mix concrete in Northern Europe
• Keener competition
Dansk Eternit Holding:
• Focus on fibre cement
• Increases sales in Danmark
Densit:
• Recession in industrial flooring
FLS Building Materials
FLS Industries A/SAnnual Accounts 2002
Prospects for 2003
FLS Building MaterialsAnnual Accounts 2002
FLS Building Materials
• No support from market in Scandinavia
• Improved earnings from global sales of white cement
• Cost reductions and higher efficiency
• EBIT in 2003 on a par with 2002
FLS Industries A/SAnnual Accounts 2002
Main conclusions
Non-strategic business areasAnnual Accounts 2002
• Restructuring and capacity adjustments announced in 2001 are
implemented
• From 2.3m to 1.6m man-hours
• Write-downs on stocks and buildings at about DKK 100m
• Higher pensions commitments during 2002
• Order backlog exceeds DKK 9bn
• Long-term contracts account for 60% of capacity in 2003
• Positive cash flow from operating activities
• 4th quarter earnings lower than anticipated – primarily due to
sluggish order intake in Component Management
FLS Aerospace
FLS Industries A/SAnnual Accounts 2002
Financial highlights
Non-strategic business areasAnnual Accounts 2002
DKKm 2001 2002
Net turnover 3,049 2,730
EBITDA 115 54
Earnings before interest and tax (EBIT) (116) (202)
Earnings before tax (EBT) (270) (289)
Cash flows from operating activities (43) 23
Cash flows from operating and investing activ. (245) (149)
Net interest-bearing debt (NIBD) 1,341 1,426
FLS Aerospace
FLS Industries A/SAnnual Accounts 2002
Prospects
Non-strategic business areasAnnual Accounts 2002
• Prospects for the aviation industry subject to great uncertainty – but key customers likely to continue to grow
• Due to cost reductions FLS Aerospace expects to significantly improve earnings in 2003.
• FLS Industries is studying opportunities for partnership / buyers of the company
•FLS Industries expects a settlement by end of 2003
FLS Aerospace
FLS Industries A/SAnnual Accounts 2002
Main conclusions
Annual Accounts 2002 Non-strategic business areas
• Restructuring and divestment of biomass and boiler activities implemented
• Air Pollution Control sold to F.L.Smidth Group at 1 July 2002
• Focus on processing orders in hand
- primarily desulphurisation plants
• Year’s net result mainly reflects difficult UK desulphurisation contract landed in 1999
•Total additional project processing costs at DKK 500m
•Legal action against British steel and erection contractor under preparation
•Caught up with large part of the delay
•Critical erection phase expected finished in 2nd quarter 2003
FLS miljø
FLS Industries A/SAnnual Accounts 2002
Financial highlights
Annual Accounts 2002 Non-strategic business areas
DKKm 2001 2002
Net turnover 1,632 1,392
EBITDA (150) (641)
Earnings before interest and tax(EBIT) (183) (659)
Earnings before tax(EBT) (195) (779)
Cash flows from operating activities 164 (345)
Cash flows from operating and investing activ. 139 (435)
Net interest-bearing debt (balances) (131) (402)
FLS miljø
FLS Industries A/SAnnual Accounts 2002
Prospects
Annual Accounts 2002 Non-strategic business areas
• Continued focus on order processing and handling of related risks
• Biomass – operating and maintenance contracts to be sold
• FLS miljø projects negative earnings before interest and tax (EBIT) in 2003
• There still remain projects that entail risks during the completion phase
FLS miljø
FLS Industries A/SAnnual Accounts 2002
Main conclusions and prospects
Annual Accounts 2002 Non-strategic business areas
• FLS Industries has adjusted its activities and capacity in 4th quarter
• Pedershaab faced a sluggish market in 2002
•Capacity adjustments introduced in 4th quarter
•Pedershaab to be sold in 2003
• Dansk Træemballage sold at 1 October to the company’s management
• Sale of Secil shares expected to take place as expected – by the end of March at the latest
• A number of properties, sites and investments are to be sold by
the end of 2003
Other activities
FLS Industries A/SAnnual Accounts 2002
Prospects for 2003
2003 expected to be a challenging year due to difficult market conditions
FLS Group expects
• A turnover slightly above DKK 15bn
• Earnings before interest and tax (EBIT) between DKK 300m and DKK 400m
• Earnings before tax (EBT) between DKK 250m and DKK 350m before disposals that may have a significant effect, either
positive or negative, on the financial results.
FLS Industries A/SAnnual Accounts 2002
Conclusion
• F.L.Smidth strongly placed as world’s number one in equipment for cement production, etc.
• Strongly placed in cement-related building materials in Northern Europe
• Improvement of core undertaking earnings
• Disposal of non-core undertakings
• Focus on improving cash flow from operating activities
FLS Industries A/SAnnual Accounts 2002
2002
Questions