The main conclusions of the report are that the outlook for the global mining industry has deteriorated in recent weeks, which has had an adverse impact on management's assessment of business risks and earnings in 2015, and as a consequence the full-year EBITA (earnings before amortisation and impairment of intangible assets) margin guidance is lowered to 7-8% (previously 9-10%).
The adjusted EBITA margin in Q2 was 9.2% (reported 7.3%).
Group CEO Thomas Schulz, says of the Q2 report: “Despite a deteriorating market situation in the minerals business and oil exporting countries, we see a solid development in three out of our four divisions, especially in regards to the total service revenue which increased 24%. And with the revised guidance for 2015 and the efficiency improvements already implemented, we will manage this prolonged cyclical downturn and continue to prepare for the upturn.”
The company says that the order intake and revenue showed solid growth in the second quarter of 2015 supported by currency developments.
Other financial results for Q2 show that revenue increased 4% to DKK 5,381 million/approximately €721 million (Q2 2014: DKK 5,167 million) while EBITA decreased 14% to DKK 395 million (Q2 2014: DKK 457 million), corresponding to an EBITA margin of 7.3% (Q2 2014: 8.8%).
Earnings before interest and tax (EBIT) decreased 25% to DKK 276 million (Q2 2014: DKK 368 million) and net profit amounted to DKK 214 million (Q2 2014: DKK 237 million).
The order intake in Q2 increased 13% to DKK 5,259 million (Q2 2014: DKK 4,643 million).
Based on the deteriorating outlook for the mining industry and a pre-emptive management assessment of associated business risks, the guidance for 2015 has been updated.
FLSmidth & Co maintains expectations to the consolidated revenue of DKK 19-21 billion but it is now believed that the revenue will be at the upper end of the guided range due to currency developments.
The expected EBITA margin is lowered to 7-8% (previously 9-10%) based on the changed management assessment of business risks.
The return on capital employed is now expected to be 9-11% in 2015 (previously 12-14%).
