Speaking about the first quarter of 2019 figures, FL Smidth Group CEO Thomas Schulz said: "Our order intake and order backlog demonstrate our competitive strength. Each new order is the result of a customer's careful selection of us to deliver and install mission critical equipment or to provide important services to enhance their productivity. The strong order intake paves the way for further advances in both revenue and profitability in 2019 and onwards."
FL Smidth quarterly revenue came in at DKK 4.4bn (€589.03bn) against DKK 4.2bn (€562.51mn) in the same quarter of last year. The gross margin was adversely affected by business mix, particularly in Cement, and fell to 24.5% from 25.4% in Q1 2018. As a consequence, the EBITA margin was 7.1%, down from 8.1% in Q1 last year.
The group's return on capital employed (ROCE) advanced to 10.8%, up from 10.4% in Q1 last year. The equity ratio stood at 35.7% at the end of the first quarter, comfortably above the 30% target, and the financial gearing (NIBD/EBITDA) was 1.1.
Management's guidance for the full year is unchanged. Thus, expectations for revenue in 2019 remains at DKK 19-21bn (€2.54bn-€2.81bn) (2018: DKK 18.8bn - €2.51bn), and the EBITA margin is expected to be 9-10%, up from 8.5% in 2018. The return on capital employed is expected to be 12-14% against 11% for 2018. Revenue and earnings are expected to pick up in the remainder of 2019, driven by higher revenue, particularly in Mining, and improved profitability in Cement.
Commenting on the outlook, Schulz said: "The positive sentiment in Mining continues, while the Cement market remains competitive. We continue to pursue a range of attractive business opportunities fuelled by our determined efforts in digitalisation and sustainability. This enables us to continuously innovate our services and products, while advancing our in-house efficiency. Our role is to support our customers in their constant pursuit of enhancing productivity."
