Company Announcement to the Danish Financial Supervisory Authority
No. 2-2009, 26 February 2009
The Board of Directors of FLSmidth & Co. A/S has today reviewed and
adopted the Annual Report and accounts for 2008. The Report is
presented in accordance with International Reporting Standards, which
is approved by the EU, and additional Danish disclosure requirements
for annual reports of listed companies.
The Interim Report is accessible at FLSmidth's website:
http://www.flsmidth.com/reports
The main conclusions of the Annual Report 2008:
Financial performance
- In 2008, FLSmidth posted record-high order intake, revenue and
earnings and the fourth quarter alone was the best quarter ever
achieved, measured in terms of revenue and earnings
- Revenue increased 27% in 2008 to DKK 25,285m (2007: DKK 19,967m)
- Earnings before special non-recurring items, depreciation and
amortisation (EBITDA) increased 39% to DKK 2,911m in 2008 (2007: DKK
2,100m)
- Earnings before interest and tax (EBIT) increased 32% in 2008 to
DKK 2,409m (2007: DKK 1,824m), corresponding to an EBIT ratio of 9.5%
(2007: 9.1%)
- Earnings before tax (EBT) increased 13% in 2008 to DKK 2,123m
(2007: DKK 1,877m)
- Cash flow from operating activities increased 56% in 2008 to DKK
2,324m (2007: DKK 1,493m)
- The order intake increased 25% (gross) in 2008 to DKK 30,176m
(2007: DKK 24,061m)
- The order backlog increased 20% to DKK 30,460m at the end of 2008
(end of 2007: DKK 25,312m).
The market situation
Throughout most of 2008, the level of activity and the order intake
were historically high in Cement and Minerals. However, there was a
marked slowdown in the willingness to invest among customers during
the 4th quarter of 2008.
- Cement: The global market for new contracted cement kiln capacity
(excl. of China) amounted to 123m tonnes per year in 2008 (2007: 125m
tonnes per year), FLSmidth's share of the market being 32% (2007:
29%)
- Minerals: 2008 saw a historically high level of investments in the
minerals industry, due to insufficient investments in the preceding
years combined with a growing demand for minerals, especially from
China and other developing countries.
Prospects for 2009
- The level of investments both in the cement and minerals industries
is expected to fall in 2009. This will, all things being equal,
result in a declining order intake in both Cement and Minerals
- In 2009, the global market for new contracted cement kiln capacity
(excl. of China) is expected to amount to 25-50m tonnes per year
- In 2009, FLSmidth expects a consolidated revenue of DKK 20-25bn and
satisfactory earnings
The prospects of the individual business areas in 2009 are as
follows:
Cement - Slight decline in revenue compared to 2008 and satisfactory
earnings
Minerals - Slight decline in revenue compared to 2008 and
satisfactory earnings
Cembrit - Slight decline in revenue compared to 2008 and modest
positive earnings
Long-term growth and earnings prospects
In the longer term, it is still expected that the structural market
conditions will remain intact and that particularly urbanisation and
industrialisation in developing countries will generate increasing
demand for cement and minerals.
Earnings from Minerals and Customer Services are expected in the
coming years to account for a larger share of the Group's total
earnings, which will reduce the effect of cyclical market
fluctuations in Cement. Against this background, the Group expects
its EBIT ratio to be 10-12% in periods of high activity and slightly
below that level (8-9%) in periods of low activity. Adjusted for
purchase price allocations, the Group's EBIT ratio was 9.9% in 2007
and 10.6% in 2008.
Moving forward, the annual investments (excl. of acquisitions) are
expected to be DKK 300-400m.
The long-term average sustainable level for addition of new global
cement kiln capacity (excl. of China) is expected to be 60-75m tonnes
per year.
FLSmidth's interactive electronic interim report
Via the website both figures and tables can be downloaded in Excel
spreadsheet and via the seach engine it is possible to make a global
search in the accounts for both figures and text.
Direct link: http://reports.flsmidth.com/flsmidth.php?mid=wpdpds
Please address any questions to this announcement to Mr Jørgen Huno
Rasmussen, Group CEO, telephone +45 36 18 18 00.
An Investor meeting and telephone conference regarding the Annual
Report will be held today at 11:00 hours CET. For further details,
please visit www.flsmidth.com
Yours faithfully
Pernille Friis Andersen
Corporate Communications & Investor Relations
