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FLSmidth third quarter report for 2014 was released on 7 November 2014. Best viewed on a full screen mode, this Interim report for Q3 2014 informs the reader about the key highlights, market update, operational highlights, technology highlights, efficiency programme, Q3 financial performance, Net working capital and long term financial performance at FLSmidth.
Citation preview
7 November 2014 Interim Report Q3 2014 1
Presentation of Interim Report Q3 2014
Key highlights in Q3’14
Strong cash flow from operations Significant margin improvements Reduction in net working capital Great safety performance Weak order intake in line with industry
7 November 2014 Interim Report Q3 2014 2
Mining capex
Close to the trough Flattish or slightly declining in 2015 Slow growth expected in 2016 Impacted by market uncertainty and declining commodity prices Customer focus on productivity enhancing investments
Cement capex
Moving out of the trough Increasing utilisation rates to underpin growth Customer focus on new capacity, productivity and environment
Customer Services resilient and growing
Customer focus on optimised inventories and productivity Fewer bigger, but more smaller orders
Market trends unchanged but uncertainty has increased
Market update
7 November 2014 Interim Report Q3 2014 3
Strong safety performance
LTIFR*) decreased to 2.0 (Q2’14: 2.5)
‘Organising for growth’ on track
Organisational adjustments to be implemented by 1 Jan. 2015
Excellence award received in Brazil
Recognition of superior contributions and performance of suppliers based on e.g. delivery, quality, safety and reliability
New service center in Mexico
Operational highlights in Q3 2014
Operation highlights
7 November 2014 Interim Report Q3 2014 4
2.0
0
1
2
3
4
5LTIFR*
2014 Target
*) Lost time injury frequency rate (per 1 mill. working hours)
Sustainable technology highlights in Q3 2014
Technology highlights
7 November 2014 Interim Report Q3 2014 5
Compact dynamic ROKSH separator for Hydraulic Roller Press Cement systems
New innovative design enabling a more compact milling system resulting in lower CAPEX, OPEX and higher productivity
The new millMAX-e™ high efficiency centrifugal slurry pump successfully released
Sets new standard for slurry pumps
Utilizes the patented millMAX suction side sealing system.
Lean design and unmatched power saving reduce the total cost of ownership and increase the productivity
Efficiency programme on track
Efficiency Programme
7 November 2014 Interim Report Q3 2014 6
Efficiency programme Impact
Targeted full-year EBITA improvement in 2015 DKK +750m p.a.
Estimated total costs DKK -500m
Run-rate full-year EBITA improvement in 2015 DKK +692m p.a.
Estimated EBITA improvement* in Q3’14 DKK ~135m
One-off costs recognised in 2013-2014 DKK -493m
One-off costs recognised in Q3’14 DKK -8m
*) before one-off costs of DKK -8m
Order intake affected by decline in Mineral Processing
Revenue as expected
EBITA margin improved significantly due to efficiency programme and impact from one-off costs in Q3’13
Strong cash flow from operations
Financial performance in Q3 2014
Results Q3 2014
7 November 2014 7 Interim Report Q3 2014
FLSmidth & Co. A/S (DKKm)
Q3 2014
Q3 2013
Change Change in local
currencies
Order intake 4,502 4,642 -3% -4%
Order backlog 21,416 24,595 -13%
Revenue 5,526 6,730 -18% -18%
Gross profit 1,404 1,254 +12%
Gross margin 25.4% 18.6%
EBITA 499 245 +104%
EBITA margin 9.0% 3.6%
Net results 215 -783
CFFO 887 283 +213%
ROCE 10% 10%
41%
15% 4%
14%
8% 0%
18%
Declining order intake related to Mineral Processing
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 8
Q3 order intake by industry (quarterly)
Cement
Coal
Iron ore
Other
Copper Gold
0
2,000
4,000
6,000
8,000
10,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order intake*) (quarterly)
-3% vs. Q3 2013 DKKm
Announced O&M orders Announced capital orders Unannounced orders
Order intake decreased 4% in Q3’14 (currency adjusted)
Order intake decreased 5% in Q1-Q3’14 (currency adjusted)
*) Cembrit not included in order intake. Generates quarterly revenue of around DKK 350-400m
Fertilisers
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 9
Growth Customer Services
Material Handling
Mineral Processing
Cement Group
Growth (currency adj.)
-11% 68% -46% 44% -4%
Currency effect
0% 2% 0% 3% 1%
Total -11% 70% -46% 47% -3%
Order intake growth Q3’14 vs. Q3’13
Industry Country/ Region
Value DKK
Booked by (Division)
Coal Vietnam 302 Material Handling
Cement DRC 507 Cement
Total 809
Announced orders in Q3’14
DKKm Order intake Q3 2014
55% 45%
Service business Capital business
Q3 2013: 57%
Customer Services order intake up 10% excl. O&M
Book-to-bill ratio slightly improving
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 10
0.96
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order backlog (quarterly)
-13% vs. Q3 2013 DKKm Book-to-bill ratio*
*Order backlog divided by last 12 months revenue (excl. Cembrit)
Expected backlog conversion to revenue:
24% in 2014
56% in 2015
20% in 2016 and beyond
1,736
1,081
2,393
1,385
2,081
1,047 1,180 938
Revenue decline due to lack of large projects last year
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 11
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Revenue (quarterly)
-18% vs. Q3 2013 DKKm
Revenue Q3’14 vs. Q3’13 - by division
Material Handling
Mineral Processing
Cement
Q3’14 Q3’13 Q3’14 Q3’13 Q3’14 Q3’13 Q3’14 Q3’13
Customer Services
Revenue flat in Q3 vs. previous quarter
18.2% 15.1%
21.3%
11.6%
27.2%
17.9%
29.0%
19.1%
Gross margin increased for all divisions vs. Q3’13
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 12
Gross margin
26.0%
18.6% 25.4%
0%
10%
20%
30%
40%
0
500
1,000
1,500
2,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Gross profit (quarterly)
DKKm
Increase in gross margin attributable to all divisions and Cembrit
Benefits of the efficiency programme are continuously materialising
Comparison period Q3’13 was impacted by inventory write-down and EP one-off costs
Gross margin Q3’14 vs. Q3’13 - by division
Customer Services
Material Handling
Mineral Processing
Cement
Q3’14 Q3’13 Q3’14 Q3’13 Q3’14 Q3’13 Q3’14 Q3’13
SG&A ratio decreased sequentially
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 13
SG&A ratio*
14.7% 13.8% 14.6%
0%
3%
6%
9%
12%
15%
18%
0
200
400
600
800
1,000
1,200
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
SG&A costs (quarterly)
DKKm
*) SG&A ratio: SG&A costs (Sales, General and Administration) divided by revenue
SG&A included one-off costs of DKK 18m in Q3’14 (DKK 72m in Q3’13)
SG&A ratio declined 1.1%-point sequentially
Increase in EBITA margin due to better performance in Customer Services, Material Handling, Cement and Cembrit, and an estimated DKK 135m positive impact in Q3 from the efficiency programme
EBITA margin increased as expected
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 14
EBITA margin
EBITA (quarterly)
104% vs. Q3 2013 DKKm DKKm
EBITA bridge Q3’14 vs. Q3’13
9.8%
3.6%
9.0%
0%
3%
6%
9%
12%
15%
0
200
400
600
800
1,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
245
499
352 131 66
277
17
0
100
200
300
400
500
600
700
2,995 2,761
200
85 121
5 294
351
2,000
2,500
3,000
3,500
Working capital developments
Working capital reduced by DKK 234m vs. Q2’14 - reduced by DKK 460m in local currencies
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 15
Net working capital
DKKm End Q3 2014 vs. End Q2 2014 DKKm
2,930
2,285
2,761
0
500
1,000
1,500
2,000
2,500
3,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
34
-2,000
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
Net work-in-progress
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Net prepayments
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Inventories
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Trade payables
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Trade receivables
Work-in-progress improved further in Q3
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 16
Change in NWC had a DKK 267m positive impact on cashflow from operating activities
WIP improved by DKK 294m in Q3
Increase in inventories mainly due to currency effect
DKKm
DKKm DKKm DKKm
DKKm
Significant free cash flow in Q3 and now also positive free cash flow year to date
Acquisitions are currently on hold and other investments are managed closely
CFFI in Q3 included a deferred payment of DKK 94m related to the acquisition of MIE
Strong cash flow from operations in Q3 2014
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 17
CFFO (quarterly) DKKm
CFFI (quarterly)
DKK -152m in Q3 2014 DKKm DKK 887m in Q3 2014
(192) (152)
(300)
(200)
(100)
0
100
200
300
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
283
887
(1,000)
(500)
0
500
1,000
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Capital structure - still affected by special items booked in 2013
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 18
NIBD (quarterly) DKKm
-
1.0
2.0
3.0
4.0
5.0
6.0
0
1,000
2,000
3,000
4,000
5,000
6,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Gearing 2.6x EBITDA Gearing target (self-imposed)
0%
10%
20%
30%
40%
50%
0
2,000
4,000
6,000
8,000
10,000
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Equity (quarterly)
DKKm Equity ratio Equity ratio 28%
Equity ratio target (self-imposed)
Gearing significantly lower but remains outside target of maximum 2 times EBITDA - still impacted by one-off costs booked in Q4’13
Gearing expected to be close to target by the end of 2014
Acquistion of treasury shares had an adverse impact of DKK 144m on NIBD in Q3
NIBD / EBITDA
ROCE (calculated as a 12 months’ average) is still impacted by special items in Q4’13
Adjusted for special items registered in Q4’13, ROCE is 12% vs. reported 10%
Guidance for 2014: ROCE 11-13%
Return on capital employed increased to 10%
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 19
ROCE* (quarterly) Average capital employed
DKKm
0%
5%
10%
15%
20%
25%
30%
0
3,000
6,000
9,000
12,000
15,000
18,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
ROCE
10% in Q3 2014
*) ROCE: Return on capital employed calculated on a before tax basis, including goodwill and based on last 12 months’ EBITA and average capital employed
ROCE target
Guidance
7 November 2014 Interim Report Q3 2014 20
Group Guidance 2014 Actual YTD
Revenue DKK 21-24bn DKK 16.4bn
EBITA margin 7-9% 7.9%
CFFI (excl. acquisitions) ~DKK -0.5bn (previously DKK -0.4bn) DKK -0.2bn
ROCE 11-13% 10%
Group guidance 2014 (change to CFFI)
Divisional guidance 2014 Upgrade in Cembrit
Guidance
7 November 2014 Interim Report Q3 2014 21
Segments Guidance 2014
Revenue (DKK) 2014 YTD EBITA margin 2014 YTD
Customer Services 7.5-8.5bn 5.8bn 13-15% 14.1%
Material Handling 3.5-4.5bn 3.0bn 0-2% 1.2%
Mineral Processing 5.5-6.5bn 4.0bn 6-8% 5.2%
Cement 3.5-4.5bn 3.0bn 5-7% 6.3%
Cembrit ~1.5bn (~1.4bn) 1.2bn 3-5% (0-2%) 6.0%
Key highlights in Q3’14 Strong cash flow from operations Significant margin improvements Reduction in net working capital Great safety performance Weak order intake in line with industry
We manage the cyclical downturn… ….and prepare for the upturn
7 November 2014 Interim Report Q3 2014 22
Forward-looking statements
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 23
FLSmidth & Co. A/S’ financial reports, whether in the form of annual reports or interim reports, filed with the Danish Business Authority and/or announced via the company’s website and/or NASDAQ OMX Copenhagen, as well as any presentations based on such financial reports, and any other written information released, or oral statements made, to the public based on this interim report or in the future on behalf of FLSmidth & Co. A/S, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to: • statements of plans, objectives or goals for future operations, including those related to FLSmidth & Co. A/S markets, products, product research and product
development • statements containing projections of or targets for revenues, profit (or loss), capital expenditures, dividends, capital structure or other net financial items • statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings and statements regarding the underlying
assumptions or relating to such statements • statements regarding potential merger & acquisition activities. These forward-looking statements are based on current plans, estimates and projections. By their very
nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which may be outside FLSmidth & Co. A/S’s influence, and which could materially affect such forward-looking statements.
FLSmidth & Co. A/S cautions that a number of important factors, including those described in this presentation, could cause actual results to differ materially from those contemplated in any forward-looking statements. Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and exchange rate fluctuations, delays or faults in project execution, fluctuations in raw material prices, delays in research and/or development of new products or service concepts, interruptions of supplies and production, unexpected breach or termination of contracts, market-driven price reductions for FLSmidth & Co. A/S’ products and/or services, introduction of competing products, reliance on information technology, FLSmidth & Co. A/S’ ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in legislation or regulation and interpretation thereof, intellectual property protection, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign enterprises, unexpected growth in costs and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance. Unless required by law FLSmidth & Co. A/S is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this presentation.
Questions & Answers Next update: Capital Markets Day on 11 December 2014 Follow us on Twitter and LinkedIn
7 November 2014 Interim Report Q3 2014 24
Appendices - backup slides
7 November 2014 Interim Report Q3 2014 25
Customer Services
7 November 2014 Interim Report Q3 2014 26
Decrease in order intake related to operation and maintenance. All other activities increased 10%
O&M order booked and announced in Q3’13, but the value was not disclosed
Strong revenue and significant margin improvement
Customer Services
7 November 2014 Interim Report Q3 2014 27
0
1,000
2,000
3,000
4,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order intake (quarterly)
-11% vs. Q3 2013 DKKm
Announced O&M orders Announced capital orders Unannounced orders
Revenue (quarterly)
DKKm EBITA margin 20% vs. Q3 2013
0%
4%
8%
12%
16%
20%
0
500
1,000
1,500
2,000
2,500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Customer Services
Customer Services
7 November 2014 Interim Report Q3 2014 28
(DKKm) Q3
2014 Q3
2013 Change
Q1-Q3 2014
Q1-Q3 2013
Change
2013
Expected 2014
Order intake 1,880 2,109 -11% 5,747 5,973 -4% 8,005
Order backlog 7,977 8,325 -4% 7,977 8,325 -4% 8,046
Revenue 2,081 1,736 20% 5,805 5,565 4% 7,565 DKK 7.5-8.5bn
EBITDA 316 53 +496% 890 568 57% 768
EBITA 287 29 +893% 816 496 65% 691
EBITA margin 13.8% 1.7% 14.1% 8.9% 9.1% 13-15%
EBIT 256 -531 721 -1101) 411)
EBIT margin 12.3% -30.6% 12.4 -2.01) 0.5%1)
1) Including Ludowici impairment loss of DKK -539
Material Handling
7 November 2014 Interim Report Q3 2014 29
Stable unannounced orders and a large DKK 302m coal order in Vietnam
EBITA margin remains positive
Improved earnings and order intake
Material Handling
7 November 2014 Interim Report Q3 2014 30
0
500
1,000
1,500
2,000
2,500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order intake (quarterly)
70% vs. Q3 2013 DKKm
111111
Announced orders Unannounced orders
Revenue (quarterly)
DKKm EBITA margin -3% vs. Q3 2013
-50%-40%-30%-20%-10%0%10%20%30%40%50%
-2,500-2,000-1,500-1,000
-5000
5001,0001,5002,0002,500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Material Handling
Material Handling
7 November 2014 Interim Report Q3 2014 31
(DKKm) Q3
2014 Q3
2013 Change
Q1-Q3 2014
Q1-Q3 2013
Change
2013
Expected 2014
Order intake 1,082 638 70% 2,975 3,282 -9% 4,937
Order backlog 4,501 4,465 1% 4,501 4,465 1% 4,465
Revenue 1,047 1,081 -3% 3,047 3,080 -1% 4,552 DKK 3.5-4.5bn
EBITDA 47 -19 88 -440 -455
EBITA 26 -34 37 -482 -511
EBITA margin 2.5% -3.1% 1.2% -15.6% -11.2% 0-2%
EBIT 6 -46 -22 -531 -598
EBIT margin 0.6% -4.3% -0.7% -17.2% -13.1%
*) Q2’13 earnings included one-off costs of DKK 323m related to legacy order backlog
No new problematic projects identified
12 projects out of a total portfolio of 181 projects
in the Material Handling Business Unit are
currently regarded as risky (end of Q2 2014: 12 projects)
These projects accounted for DKK 251m or 6%
of the backlog at the end of Q2 (end of Q1 2014: DKK
284m or 7%)
The one-off costs of DKK 323m realised in Q2 2013 still expected to cover completion of the legacy projects
Status on legacy projects in Material Handling
Material Handling
7 November 2014 Interim Report Q3 2014 32
Mineral Processing
7 November 2014 Interim Report Q3 2014 33
Decline in unannounced orders reflects continued mining capex downturn
Stable EBITA margin despite significantly lower revenue
Revenue decreasing as a result of declining order intake in 2013-2014
Weak order intake but margin holding up
Mineral Processing
7 November 2014 Interim Report Q3 2014 34
Revenue (quarterly)
DKKm EBITA margin -51% vs. Q3 2013
0%
3%
6%
9%
12%
15%
18%
21%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
0
500
1,000
1,500
2,000
2,500
3,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order intake (quarterly)
-46% vs. Q3 2013 DKKm
Announced orders Unannounced orders
Mineral Processing
Mineral Processing
7 November 2014 Interim Report Q3 2014 35
(DKKm) Q3
2014 Q3
2013 Change
Q1-Q3 2014
Q1-Q3 2013
Change
2013
Expected 2014
Order intake 809 1,510 -46% 3,171 4,534 -30% 5,559
Order backlog 4,319 6,749 -36% 4,319 6,749 -36% 4,993
Revenue 1,180 2,393 -51% 3,951 6,880 -43% 9,256 DKK 5.5-6.5bn
EBITDA 99 233 -58% 269 676 -60% 850
EBITA 77 215 -64% 204 604 -66% 757
EBITA margin 6.4% 9.0% 5.2% 8.8% 8.2% 6-8%
EBIT 46 -177 112 123 -9% 2111)
EBIT margin 3.8% -7.4% 2.8% 1.8% 2.3%1)
1) Including Ludowici impairment loss of DKK -362
Cement
7 November 2014 Interim Report Q3 2014 36
0
500
1000
1500
2000
2500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order intake increased due to a DKK 507m greenfield contract in DR Congo
Revenue and EBITA margin as expected
Improved earnings and solid order intake
Cement
7 November 2014 Interim Report Q3 2014 37
Revenue (quarterly)
DKKm EBITA margin -32% vs. Q3 2013
-5%
0%
5%
10%
15%
20%
25%
-500
0
500
1000
1500
2000
2500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order intake (quarterly)
+47% vs. Q3 2013 DKKm
Announced orders Unannounced orders
Cement
Cement
7 November 2014 Interim Report Q3 2014 38
(DKKm) Q3
2014 Q3
2013 Change
Q1-Q3 2014
Q1-Q3 2013
Change
2013 Expected
2014
Order intake 916 624 47% 2,722 2,267 20% 3,417
Order backlog 5,234 5,706 -8% 5,234 5,706 -8% 5,389
Revenue 938 1,385 -32% 2,988 3,705 -19% 5,201 DKK 3.5-4.5bn
EBITDA 76 47 62% 214 196 9% 161
EBITA 67 38 76% 188 168 12% 124
EBITA margin 7.1% 2.7% 6.3% 4.5% 2.4% 5-7%
EBIT 61 31 97% 170 153 11% 95
EBIT margin 6.5% 2.2% 5.7% 4.1% 1.8%
Cembrit
7 November 2014 Interim Report Q3 2014 39
Cembrit is a leading distributor and manufacturer of fibre-cement products in Europe and the only remaining building materials company in FLSmidth
Cembrit is reported as continuing activities but developed as a non-core stand-alone business to be divested in 2-3 years
Cembrit improvement programme on track
Cembrit
7 November 2014 Interim Report Q3 2014 40
0
500
1000
1500
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
DKMM
DKMM
Revenue (quarterly) DKKm EBITA margin +6% vs. Q3 2013
-25%-20%-15%-10%-5%0%5%10%15%20%25%
-500-400-300-200-100
0100200300400500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
DKKm Q3 2014 Q3 2013 change
Revenue 424 401 +6%
EBITA 51 -7
EBITA margin 12.1% -1.7%
EBIT 49 -8
EBIT margin 11.8% -2.0%
Order intake growth by segment
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 41
Growth Customer Services
Material Handling
Mineral Processing
Cement Group
Growth (currency adj.)
-11% 67% -46% 44% -4%
Currency effect
0% 2% 0% 3% 1%
Total -11% 69% -46% 47% -3%
Order intake growth Q3’14 vs. Q3’13
Industry Country/ Region
Value DKK
Booked by (Division)
Coal Vietnam 302 Material Handling
Cement DR Congo 507 Cement
Total 809
Announced orders in Q3’14 0
2,000
4,000
6,000
8,000
10,000
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Order intake (quarterly)
-3% vs. Q3 2013 DKKm
Revenue growth by segment
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 42
Growth Customer Services
Material Handling
Mineral Processing
Cement Group
Growth (currency adj.)
21% -2% -50% -32% -18%
Currency effect
-1% -1% -1% 0% 0%
Total 20% -3% -51% -32% -18%
Revenue growth Q3’14 vs. Q3’13
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Revenue (quarterly)
-18% vs. Q3 2013 DKKm
Book-to-bill ratio slightly improving
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 43
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Order backlog (quarterly)
-13% vs. Q3 2013 DKKm Book-to-bill ratio*
*Order backlog divided by last 12 months revenue
Expected backlog conversion to revenue:
27% in 2014
53% in 2015
20% in 2016 and beyond.
O&M contracts accounted for DKK 4.8bn (22%) of the order backlog at the end of Q3
Revenue and order intake by segment
40%
23%
17%
20%
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 44
Order intake Q3 2014 – classified by segment
Customer Services
Material Handling
Cement
37%
18%
21%
17%
7%
Material Handling
Mineral Processing
Revenue Q3 2014 – classified by segment
Customer Services Cement
Mineral Processing
Cembrit
Currency effects on net working capital in Q3
Net working capital
7 November 2014 Interim Report Q3 2014 45
DKKm End Q3 2014
End Q2 2014
Change Change in local
currencies
Currency effect
Inventories 2,930 2,730 +200 +69 +131
Trade Receivables
5,164 5,169 -5 -218 +213
Trade Payables
2,478 2,599 -121 -205 +85
WIP net 34 -260 +294 +315 +21
Prepayments net 1,760 1,845 -85 -128 +43
NWC total 2,761 2,995 -234 -460 +226
Number of employees decreasing
Interim Report Q3 2014
7 November 2014 Interim Report Q3 2014 46
Number of employees Q3’14 vs. Q3’13 - by segment
5,916
3,413 2,994
2,331
6,513
2,928
2,257 2,083
Customer Services
Material Handling
Mineral Processing
Cement
Q3’14 Q3’13
Total number of employees Q3’14: 14,861
Number of employees decreased by 874 vs. Q3’13 and decreased by 91 vs. Q2’14
Decline explained by efficiency programme and business right-sizing
Increase in Customer Services primarily related to blue-collar workers on O&M contracts
Q3’14 Q3’13 Q3’14 Q3’13 Q3’14 Q3’13
Long term financial targets
Targets
7 November 2014 Interim Report Q3 2014 47
Financial targets
Annual revenue growth Above market average
EBITA margin 10-13%
ROCE* > 20%
Tax rate 32-34%
Equity ratio >30%
Financial gearing (NIBD/EBITDA) <2
Pay-out ratio 30-50%
*) ROCE: Return on capital employed calculated on a before tax basis as EBITA divided by average Capital Employed including goodwill
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