In its annual report for 2017
“2017 probably marked the trough of the business cycle, and based on our good positioning and strong life-cycle solutions, we expect our business to start growing again in the coming years,” says Thomas Schulz, group CEO.
“Our order intake increased and the momentum in the mining industry continues in 2018, while cement market conditions are expected to remain unchanged.”
The order intake grew 6% in 2017, in particular driven by stronger demand in the Minerals division in the second half of 2017, but also by total service activities. Revenue declined 1% in 2017.
EBITA increased by 18% and the EBITA margin increased to 8.4% from 7.1% due to a slightly higher gross margin and lower administrative costs. Adjusted for one-off impacts, the EBITA margin was 8.7% (2016: 8%). Financial items, taxes and discontinued activities had a considerable negative impact on profits in 2017.
The return on capital employed increased to 10.4% from 8.5% in 2016. Driven by lower net working capital and a positive free cash flow of DKK 952 million (€128 million), net interest-bearing debt declined to DKK 1.5 billion (€200 million) and the financial gearing (NIBD/EBITDA) decreased to 0.9, the lowest level since 2011.
In its guidance for 2018, FLSmidth guides for revenue of DKK 18-20 billion (2017: 18 billion) and an EBITA margin of 8-10% (2017: 8.4%). The ROCE is expected to be 10-12% (2017: 10.4%).
“Our customers' constant pursuit of productivity entails a growing interest in digital solutions. As Productivity Provider #1, we will take digitalisation to the next level,” says Schulz.
“Combined with this we see significant growth opportunities in wear parts and products and implementing ongoing improvements of procurement. These offerings will enable us to capture the future growth.”
