FLSmidth records higher order intake in 2018
FLSmidth released its 2018 annual report which records strong order intake, revenue growth and steps taken to improve profitability in cement. Order intake grew to DKK21.741bn (US$3.33bn) in 2018 from DKK19.170bn in 2017, but was down seven per cent in 4Q18 to DKK4503m from DKK4836m in 4Q17.
"The high order intake in 2018 is due to an improving mining market, but it also reflects the performance of our organisation, our position and strong lifecycle solutions. This combination lays a good foundation for future growth," commented Group CEO, Thomas Schulz.
Revenue grew by four per cent in 2018 to DKK5450m from DKK4943 in 2017. The 13 per cent growth in the order intake was attributable to mining delivering 24 per cent growth, especially driven by copper, while cement was unchanged. The strong order intake bodes well for revenue growth in 2019. Gross profit rose to DKK 1312m in 4Q18from DKK1234m in 4Q17 and to DKK18.750m in 2018 from DKK18,000m in 2017
EBITA rose by five per cent in line with revenue to DKK1312m in 4Q18 and DKK4693m in 2018, while the EBITA margin in 2018 increased slightly by 8.5 per cent from 8.4 per cent in 2017. The cash flow from operating activities was impacted by significant negative developments in discontinued activities, and the free cash flow amounted to only DKK100m (US$15.3m).
Meanehile, the return on capital employed rose to 11 per cent from 10.4 per cent in 2017 as a result of the higher EBITA and lower capital employed.
FLSmidth says the positive trend in the mining industry is expected to continue in 2019 modestly, while cement market conditions are expected to be stable with global macroeconomic uncertainties for both industries.
Mr Schulz commented: "Both our cement and mining customers are constantly pursuing productivity improvements. As Productivity Provider No 1, we are in the right spot to support their agenda and by taking innovation and digitalisation to the next level, we will be an even stronger business partner going forward. Additional factors that will strengthen our competitiveness are our ongoing efforts to standardise our product offering and leverage our unique customer insight."
