FLSmidth orders up 15% while EBITDA rises 9% in 2012

In its newly-released 2012 annual report, Denmark-based cement plant maker FLSmidth & Co A/S announced a 15 per cent increase in its order intake, bringing the figure to DKK27.727bn (US$4.98bn) in 2012. Its revenues increased by over a fifth from DKK27.136bn to DKK29.451bn. The company also reported an EBITDA rise of nine per cent to DKK2.759bn, giving an EBITDA margin of 11.1 per cent, slight lower than the previous year’s figure of 12.3 per cent.

The cement division operated in a market where fundamentals remained largely unchanged compared to 2011. Capacity utilisation outside China continued to be around 75 per cent, relatively subdued, as macroeconomic uncertainty and slow growth affect the market. While cement consumption increases do occur in some areas, the decision-making process to build new plants appears to be more prolonged. “Plant operators’ stronger focus on minimising cost of operations (versus focusing primarily on the initial investment) favours FLSmidth’s lower ‘total cost of ownership’ approach, and the industry’s increased focus on environmental issues creates opportunities for eco-friendly solutions offering apparent competitive advantages to FLSmidth,” says the company.

For 2013, FLSmidth expects consolidated revenues of DKK27-30bn (2011: DKK25bn) and an EBITA margin of 8-10 per cent (2012: 10.1 per cent). The company forecasts 2013 to be “a trough year in terms of EBITA margin, whereas both cash flow from operating activities and order intake are expected to be satisfactory in 2013.”

In terms of its four divisions, Cement is forecast to bring in DK5-7bn, Minerals Processing DKK10-12bn, Customer Services DKK8-10bn and Material Handling DKK4-6bn. Expected EBITA margin levels for the divisions are 6-8, 8-10, 13-15 and >0 per cent, respectively.

To sum up: In 2012 focus was on transformation and expansion. In 2013, the theme will be to deliver on our strategies through consolidation and focus on profit and capital efficiency, ” added the firm.

"The year will also see a change of CEO as on 1 May Thomas Schulz will take over from Jørgen Huno Rasmussen, who retires 10 years after he joined the company.