In its interim report for 1 January-30 September 2017,
The group says that improved sentiment led to higher order intake in the minerals business by reduced activity in the cement business caused a decline in service orders.
“Equipment orders are beginning to materialise thanks to the improved sentiment in the mining industry. We expect to see some recovery in large minerals projects in 2018, although we do not expect high growth rates next year,” says Thomas Schulz, group CEO.
“In addition, the cement industry is showing less strength than in recent quarters, and we do not expect to see a recovery in 2018, but our relentless efforts to achieve our long-term financial targets will continue.
“We have positioned ourselves to pursue growth through productivity for our customers and for FLSmidth. Our unique combination of products, projects and service expertise sets us apart in the market. This powerful combination is a driver for how FLSmidth delivers sustainable productivity enhancement as a trusted adviser and partner our customers want to do business with.”
The order intake grew 4% organically, driven by stronger demand in minerals but revenue was down 10% organically, primarily due to the low order intake by the two capital divisions in the second half of 2016.
Service related order intake was also lower in the quarter, but it remains at a healthy level for the year to date.
Low revenue in the quarter resulted in a slightly lower EBITA at DKK 336 million (about €45 million), whereas the EBITA margin increased to 8.2% due to a higher gross margin and a significantly lower cost base.
The guidance for 2017 is unchanged, and FLSmidth expects revenue of DKK 17-19 billion (€2.3-2.55 billion) and an EBITA margin of 7-9%.
