DEN NYE STRATEGI FLS INDUSTRIES A/S Q3-REPORT Presented by Peter Assam, CEO 21 November, 2001
DEN NYE STRATEGI FLS INDUSTRIES A/S Q3-REPORT Presented by Peter Assam, CEO 21 November, 2001.
Dec 21, 2015
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DEN NYE STRATEGI
FLS INDUSTRIES A/S
Q3-REPORT
Presented by Peter Assam, CEO 21 November, 2001
Restructuring for Growth and Profit 2
FLS’ Three Business Areas
The F.L.Smidth Group offers service, machines and entire production lines to the cement and minerals processing industries world wide.
FLS miljø supplies biomass and desulphurisation equipment, high-tech boilers and air filters for power plants and process industry.
FLS Building Materials’ products are based on cement with global production of white cement and densit and regional activities in grey cement, concrete and fibre cement.
FLS Aerospace offers nose-to-tail aircraft maintenance with lease and repair of components.
Restructuring for Growth and Profit 3
Agenda
Spring 2000 to Fall 2001 improving earnings platform and transparency
Business Areas mixed market conditions and outlook
Group Figures operational earnings and CFFO improve in Q3
2001 and onwards Focus, rightsizing and cutting debt
Down revision of EBIT 2001 – Forecast Adjusting to collapse in demand and no/low
growth scenario
Restructuring for Growth and Profit 4
Improving Earnings Platform and Transparency
Focus and Transparency buy back of 50% of Aalborg Portland merger of Aalborg Portland Holding and FLS Industries sale of RMIG Sale of property, CPH
Improved Earnings Platform
Engineering integration of F.L.Smidth & Co. and Fuller Company FLS miljø’s new CEO continues rightsizing FLS miljø Bulk Handling to FFE Bulk Handling ”Waste to Energy” closed acquisitions broaden F.L.Smidth Group’s product range and
strengthen turnkey skills reorganising FLS miljø’s APC into one global business unit
Restructuring for Growth and Profit 5
Improving Earnings Platform and Transparency
Focus and Transparency buy back of 50% of Aalborg Portland merger of Aalborg Portland Holding and FLS Industries sale of RMIG Sale of property, CPH
Improved Earnings Platform
Building Materials investing in new white cement capacity in Sinai and Malaysia new management to turn around US concrete operation Phillippine ready mix operation closed exit concrete products in US and Spain Unicon’s Norwegian acquisitions fortifie lead position in
Scandinavia DEH reorganises from country set up to functions Unicon focusses on ready mix concrete
Restructuring for Growth and Profit 6
Improving Earnings Platform and Transparency
Focus and Transparency buy back of 50% of Aalborg Portland merger of Aalborg Portland Holding and FLS Industries sale of RMIG Sale of property, CPH
Improved Earnings Platform
Aerospace new international management team Formula One programme reduces turntimes and cuts
man hours per check less investments improve efficiency in Rotables falling overheads and pay roll Restructuring to post 11 September demand
Restructuring for Growth and Profit 7
F.L.Smidth Group
DKKm Turnover
4,256
699
147
22
114
61
5,299
Order Intake* Order backlog*
5,148
511
435
7
135
353
6,590
Cement 4,764Mining 584Pyro processing 454Chemical and petrochemical
14
Power generation 163Other 183Total
*sales prices
6,145
Q3 2000 Q3 2001
5,299
942
(24)
(661)
(735)
Net turnover 5,381
Gross profit 702
EBIT (301)
Cash flows from operating activities (133)
Cash flows from operating and investing activities
(137)
Restructuring for Growth and Profit 8
F.L.Smidth Group
DKKm Turnover
4,256
699
147
22
114
61
5,299
Order Intake* Order backlog*
5,148
511
435
7
135
353
6,590
Cement 4,764Mining 584Pyro processing 454Chemical and petrochemical
14
Power generation 163Other 183Total
*sales prices
6,145
Q3 2000 Q3 2001
5,299
942
(24)
(661)
(735)
Net turnover 5,381
Gross profit 702
EBIT (301)
Cash flows from operating activities (133)
Cash flows from operating and investing activities
(137)
Restructuring for Growth and Profit 9
FLS miljø
DKKm Turnover Order Intake* Order backlog*
Biomass power generation 83 9 435Fossil power generation 399 751 1,343APC 698 667 591Total
*sales prices
1,180 1,427 2,369
Q3 2000 Q3 2001
Net turnover 1,134 1,180
Gross profit 128 107
EBIT (157) (99)
Cash flows from operating activities
(104) 150
Cash flows from operating and investing activities
(127) 134
Restructuring for Growth and Profit 10
FLS miljø
DKKm Turnover Order Intake* Order backlog*
Biomass power generation 83 9 435Fossil power generation 399 751 1,343APC 698 667 591Total
*sales prices
1,180 1,427 2,369
Q3 2000 Q3 2001
Net turnover 1,134 1,180
Gross profit 128 107
EBIT (157) (99)
Cash flows from operating activities
(104) 150
Cash flows from operating and investing activities
(127) 134
Restructuring for Growth and Profit 11
FLS Building Materials
DKKm APH Q3 2000
FLS Building
Materials Q3 2001
Net turnover 4,136 4,322
Gross profit 1,823 1,825
EBITDA 738 660
EBIT 353 240
EBT 1,864 202
CFFO 551 380
CFFI (1,864) (305)
Restructuring for Growth and Profit 12
FLS Building Materials
DKKm Aalborg Portland
Aalborg Portland
Unicon Group
Unicon Group
Dansk Eternit
Holding
Dansk Eternit
Holding
Densit Densit
Q3 2000
Q3 2001
Q3 2000
Q3 2001
Q3 2000
Q3 2001
Q3 2000
Q3 2001
Net turnover
1,267 1,212 2,069 2,358 870 725 86 103
Gross profit
681 634 857 966 237 162 45 50
EBITDA 331 340 303 289 110 23 6 10
EBIT 225 240 97 46 52 (45) 4 8
Restructuring for Growth and Profit 13
FLS Aerospace
Q3 2000 Q3 2001
Net turnover 2,403 2,478
Gross profit 65 541
EBIT (427) 164
Cash flows from operating activities
(264) 1
Cash flows from operating and investing activities
(577) (149)
Restructuring for Growth and Profit 14
Reasons for Q1-Q3-Figures - Earnings and Cash Flow
F.L.Smidth Group Deficit from Weak US-Market and Higher Execution Costs time lag between slow demand from US-market
and reaction hereto Q2:
order intake, back log and target intact despite US slow down
largest order in European market acquisitions broaden product range and
strengthen turnkey skills FFE Minerals’ high performance reflects
restructuring after-market sales maintain growth target
Q3: satisfactory order intake despite weak markets
Restructuring for Growth and Profit 15
Reasons for Q1-Q3-Figures - Earnings and Cash Flow
FLS miljø’s Order Backlog End 2000 Was Poor order intake Q1 was below expectations cost base matches order potential in next months
Q2: order intake and outlook improves in US and
Europe business tracks new management’s plan
Q3: slowing order intake order execution off track on UK project
Restructuring for Growth and Profit 16
Reasons for Q1-Q3-Figures - Earnings and Cash Flow
FLS Building Materials Usually Posts Deficit in Q1 Dansk Eternit suffers from DEF 1994’s
receivership Sales reflect normalised weather conditions
Q2: Dansk Eternit’s sales slip further in Denmark US slowdown dampens Unicon’s profit in
turnaround Cement export offsets lower demand in
Denmark International price pressure on white cement Down revision of earnings forecast
Q3: US and Polish stand still fuels down revision
Restructuring for Growth and Profit 17
Reasons for Q1-Q3-Figures - Earnings and Cash Flow
FLS Aerospace Improves Performance in High Season
Q2 Third consecutive quarter with EBIT in black Strong USD hikes costs in Component
Management Higher productivity and renegotiated contracts
increase earnings expectations
Q3 Continuous improvement untill 11 September
Restructuring for Growth and Profit 18
FLS Group Profit and Loss Account
DKKm
Q1 2000
H1 2000
Q3 2000
Year 2000
Q1 2001
H1 2001
Q3 2001
Net turnover
4,295 9,169 13,980 19,205 4,195 9,014 13,812
Gross profit 1,020 1,893 3,056 4,471 1,090 2,287 3,546
EBIT (80) (420) (569) (458) (76) 6 197
Net result 1,528 1,117 808 843 (125) (143) 25
CFFO (731) (621) (243) (26) (522) 662 815
CFFI 308 (288) (2,291) (2,500) 131 (10) (274)
Restructuring for Growth and Profit 19
2001 and onwards
Optimise across F.L.Smidth Group speed up after-market sales - spares and service improve turnkey and civil engineering skills focus on cement and minerals segments
FLS miljø Grows Three Segments marketing technologies via international partnerships use core knowhow in new businesses on ad hoc basis
Harvest Synergies between Engineering Companies
Grow Key Product Areas in FLS Building Materials expand global production capacity in white cement consolidate industry and specialise fibre cement plants
- expand product range transfer “best practise” in Unicon’s One Company
programme - turnaround US concrete operation
leverage Densit’s off-shore orders
Optimise Strategic Value of FLS Aerospace
Divest Non-Core Assets, Prune Balance Sheet and Cut Debt
Restructuring for Growth and Profit 20
2001 and onwards
Optimise across F.L.Smidth Group speed up after-market sales - spares and service improve turnkey and civil engineering skills focus on cement and minerals segments
FLS miljø Grows Three Segments marketing technologies via international partnerships use core knowhow in new businesses on ad hoc basis
Harvest Synergies between Engineering Companies
Grow Key Product Areas in FLS Building Materials expand global production capacity in white cement consolidate industry and specialise fibre cement plants
- expand product range transfer “best practise” in Unicon’s One Company
programme - turnaround US concrete operation
leverage Densit’s off-shore orders
Optimise Strategic Value of FLS Aerospace
Divest Non-Core Assets, Prune Balance Sheet and Cut Debt
Restructuring for Growth and Profit 21
Down Revision of EBIT 2001 – Forecast
Forecast is lowered to DKK 200mill:
FLS Aerospace’s earnings fall DKK 400mill from lower revenue and restructuring to subdued volume
FLS Building Materials suffers from US slump and Polish stand still
FLS miljø increases deficit due to higher execution costs and slowing order intake
F.L.Smidth Group’s order back log and intake is intact with order execution now on track
Unspecified DKK 100mill mirrows significant uncertainty and risks on wide range of items
Board recommends a dividend of DKK 0 for 2001
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