FLSmidth & Co, Denmark
Transcript of FLSmidth & Co, Denmark
COMPANY WATCH
June 2013 Pump Industry Analyst9
FLSmidth & Co, Denmark
Key Figures (DKK million)First quarter ended 31.3
2013 2012
Order Intake 5027 6421Of Which:Minerals Processing 1345 2445
Revenue 5651 4829Of Which:Minerals Processing 2010 1722
Cost of Goods Sold 4415 3628
Gross Profit 1236 1201
EBITDA 327 456Of Which:Minerals Processing 151 147
EBIT 166 341Of Which:Minerals Processing 88 94
Net Income (Continuing Activities) 85 252
Net Income 34 241
COMMENTFLSmidth, the Denmark-based provider of equipment and services for the cement and mineral industries, has seen its revenue for the first quarter of fiscal 2013 increase 17.0% to DKK5651 million, while its net income fell 85.9% to DKK34 million.
Sales were up in three of the company’s four segments, with Customer Services leading the way with 32% growth to DKK1809 million. The Cement division saw an 18% lift to DKK1016 million, while the Mineral Processing business unit recorded a 17% increase in revenues to DKK2010 million. In the Materials Handing segment, sales were essentially flat at DKK1055 million.
Excluding the DKK400 million contribution from 2012 acquisitions, and adjusting for currency effects, organic revenue growth for the period was 11%.
While sales were up, order intake was down 21.7% year on year at DKK5027 million, primarily due to a lack of large orders in the Cement and
Mineral Processing divisions. Consequently, the order backlog fell 3% during the quarter to DKK28 583 million.
Gross profit rose 2.9% year-on-year to DKK1236 million, although the corresponding margin fell from 24.9% to 21.9% due to the performance of the Cement and Materials Handling divisions. Profit for the period fell 85.9% to DKK34 million including a DKK51 million charge for discontinued activities related to the planned disposal of Cembrit.
“It is obvious that in the last few quarters business sentiment has been trending downwards which calls for caution and necessary adjustments,” Thomas Schulz, FLSmidth’s new CEO, said. “Both the cement and minerals industries are cyclical by nature and they always will be. Fortunately, FLSmidth has grown its service business remarkably in recent years, which will enable us to maintain a healthy business level.” ■www.flsmidth.com
SPX Corp, USA
Key Figures (US$ million)First quarter ended
30.3.2013 31.3.2012
Revenues 1133.7 1153.5Of Which:Flow Technology 613.0 628.1
Cost of Products Sold 832.5 853.6
Gross Profit 301.2 299.9
Segment Income 82.4 83.0Of Which:Flow Technology 55.0 46.4
Operating Profit 22.6 17.3
Income (Continuing Operations) before Tax 6.8 21.4
Net Income 3.6 12.8
COMMENTSPX has posted first quarter revenues for fiscal 2013 of US$1.13 billion, down 1.7% on a year ago. Organic revenues were flat, while acquisitions increased revenues by 0.3% and currency fluctuations decreased them by 2.0%.
In the company’s Flow Technology segment revenues for the quarter were US$613.0 million, a decrease of 2.4% on the prior year. Organic sales decreased 1.7%, while acquisitions and currency fluctuations decreased revenues by 0.7%. Increased supply of components was offset by lower systems-based revenues, with SPX reporting that the year-ago quarter benefited from two large projects that were substantially completed in 2012.
SPX’s segment income edged down on the year earlier from US$83.0 million to US$82.4 million. In the Flow Technology division, segment income was US$55.0 million, equivalent to 9.0% of revenues, compared to the year earlier’s US$46.4 million (7.4% of revenues). The increase in income and margin was attributed to improved execution in the company’s European and US operations.
“Our first quarter performance was largely comparable with the prior year, but lower than we anticipated,” Christopher Kearney, SPX’s chair, president and CEO, said. “While the performance across most of SPX was fundamentally in line with our expectations, we were disproportionally impacted in a few discrete areas, particularly in our Thermal Segment.”
Kearney added that the company was taking actions to address the areas of poor performance identified in the quarter, including the acceleration of restructuring plans to address its cost structure in some of its European operations.
Looking forward, Kearney expects 2013 to be a testing year with SPX forecasting that revenues will be down 2–3% on the US$5.10 billion posted in fiscal 2012, although segment income margins are predicted to expand between 40 and 80 basis points.
Kearney added that capital allocation plans for the year included US$200 million of share repurchases and a US$250 million voluntary pension contribution, with the latter already completed. ■www.spx.com