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FLS Industries A/S

FLS Industries A/S. Year 2000. 8 March 2001 Peter Assam, CEO, and Birgitte Nielsen,CFO. AGENDA FOR 8 MARCH 2001. 2000 - a landmark year Ratio for merging FLS with APH DEF 1994 4 Core businesses Group financials 2001 and onwards. YEAR 2000 - A LANDMARK YEAR.

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FLS Industries A/S

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  1. FLS Industries A/S Year 2000 8 March 2001 Peter Assam, CEO, and Birgitte Nielsen,CFO

  2. AGENDA FOR 8 MARCH 2001 • 2000 - a landmark year • Ratio for merging FLS with APH • DEF 1994 • 4 Core businesses • Group financials • 2001 and onwards

  3. YEAR 2000 - A LANDMARK YEAR • New strategy - actively focussing, restructuring and streamlining the Group • - Selling RMIG • - Transferring Johannes Möller • - New FLSmidth • - Purchase of 50% of Aalborg Portland A/S • Announcing FLS-APH merger aligning Group structure with stock market requirements • - concentrating operating assets in one company • Disappointing EBIT of DKK - 458mill. • CFFO was DKK -26mill. • Result reflects a year with restructuring costs and major one off costs

  4. STABLE MARKET CAPS OF FLS & APH OPERATING UNITS Merger is announced 21/11-2000

  5. SHARP HIKE IN MARKET CAP OF APH OPERATING UNITS Return since 20 Nov 2000 FLS -18% KFX -3% Ind. Comp. -7% MSCI Build Mat +9% APH +15% APH ex. NKT +116%

  6. THE MARKET SETS THE RATIO - FLS : APH OPERATING UNITS Ratio 1,2 (DKK) 21.02-06.03 Today APH: 308 295 - dividend: 5 5 - 0,1* NKT: 172 155 APH ex NKT and div.: 131 135 FLS: 115 115 - dividend: 3 3 FLS ex dividend: 112 112 Ratio: 1.17 1.20

  7. TRANSFERRING BUILDING MATERIAL OPERATIONS TO FLS INDUSTRIES FLS Industries pays with 6,713,115 new B shares + 38,115 old B shares Share capital increases to DKK 1,064 mill with 7,200,000 A shares and 46,000,000 B shares

  8. OWNERSHIP STRUCTURE - POST MERGER IN MAY

  9. DEF94 – DEVELOPMENTAL DEFECTS CASE Why an explanation of the course of events? - The decision to apply for a suspension of payments order for DEF 1994 should be viewed in the full context of the developmental defect case - The Group’s employees, shareholders and other stakeholders should know the full course of events

  10. DEF94 – DEVELOPMENTAL DEFECTS CASE • The reasons behind the DEF 1994 suspension of payments: • The High Court judgement in June 2000 extends liability for damages – impossible to estimate financial consequences • Pending arbitration case abroad will result in further claims being raised against DEF 1994 • - High Court judgement appealed to the Supreme Court • Why suspension of payments? • Freeze DEF 1994 funds until the Supreme Court passes judgement (October 2001) • - all creditors on an equal footing

  11. DKKm 1998 1999 2000 • Net turnover 6,738 6,671 7,456 • Gross profit 1,493 1,365 1,117 • EBIT 267 83 -269 • Result for the year 221 57 -333 • Capital Employed, average 2,977 3,223 3,341 • Cash flows from operating activities -135 512 -37 • Cash flows from operating an investing activities -380 408 -105 • Turnover Order intake* Order Backlog* • 2000 2000 2000 • Cement 75% 73% 82% • Mineral processing 12% 16% 10% • Pyroprocessing 3% 3% 2% • Chemical and petrochemical 2% 3% 1% • Power generation 3% 2% 3% • Other 5% 3% 2% • Sales 7,456 7,012 6,205 • *sales prices

  12. - NET SALES Asia America 15% 41% Africa 24% Europe Denmark 19% 1%

  13. Order Intake 1990-2000 Major and Basic orders, Sales DKK Mill.

  14. US joint ventures • 1 handed over to customer • 1 running tests according to plan After-market sales of DKK 2bn with growth Order intake on budget with satisfactory order backlog Good prospects for new order Integration as planned Key account management established

  15. DKKm 1998 1999 2000 • Net turnover 2,324 4,621 5,621 • Gross profit 1,007 2,059 2,377 • EBIT 384 461 429 • Result for the year 495 1,119 1,638 • Capital Employed, average 3,545 5,871 7,681 • Cash flows from operating activities 473 741 673 • Cash flows from operating and investing activities -700 42 -1,313

  16. - NET SALES Europe 34% America 25% Asia 1% Africa 1% Denmark 39%

  17. Aalborg Portland • White strategy progressing in Sinai, Malaysia and Aalborg • -Sinai on target/before schedule • -Malaysia on target • Sale of grey cement at full capacity • Unicon Group • Unicon’s turnaround in the US - progress according to plan • Unprofitable Philippine r-m-c operation closed • Exit loss making Spanish concrete product activities • Best result ever in Scandinavia

  18. Dansk Eternit Holding • Polish acquisition in a bolt-on European expansion • New capacity successfully on steam in Czech Republic and Denmark • New cross-border organisation cuts costs • Densit • New off-shore orders - wind turbines and oil platforms • Joint venture in UK to strengthen market presence • All time high order backlog

  19. DKKm 1998 1999 2000 • Net turnover 1,688 2,962 3,282 • Gross profit 531 750 301 • EBIT -39 -146 -375 • Result for the year -134 -212 -562 • Capital Employed, average 1,677 2,486 2,808 • Cash flows from operating activities -3 -216 -423 • Cash flows from operating and investing activities -588 -826 -764 Profit in Q4, EBIT DKK 50 mill., EBT DKK 5 mill. Formula 1 gathers pace across the organisation Better prices for improved products and services at less costs

  20. - NET SALES America 11% Asia 1% Africa 2% Denmark Europe 6% 80%

  21. DKKm 1998 1999 2000 • Net turnover 1,891 1,958 1,533 • Gross profit 337 367 179 • EBIT 14 15 -193 • Result for the year -6 11 -207 • Capital Employed, average 439 426 496 • Cash flows from operating activities -86 -119 -228 • Cash flows from operating and investing activities -105 -164 -260 • Turnover Order intake* Order Backlog* • 2000 2000 2000 • Power stations, biomass 15% 4% 6% • Power stations, fossil fuel 45% 46% 62% • Waste incineration 4% 2% 1% • Industrial 27% 38% 13% • Operation and maintenance 9% 10% 18% • Sales 1,533 1,236 2,147 • *sales prices

  22. - NET SALES America Asia 18% 11% Africa 2% Denmark 18% Europe 51%

  23. New management focussing on key skills • Leverage technological edge via international partners • Restructuring of business units and outsourcing continues unabated to improve efficiency • Present order backlog is weak but several large scale projects may materialise

  24. PROFIT & LOSS ACCOUNT • DKKm 1998 1999 2000 • Net Sales 22,238 20,993 19,205 • EBITDA 1,636 1,394 545 • EBIT 858 475 -458 • EBT 1,147 2,756 729 • Profit for the year 794 2,540 843

  25. FLS GROUP - NET SALES FLSmidth Other 39% 7% FLS Aerospace 17% FLS miljø 8% APH 29%

  26. FLS GROUP - NET SALES America 27% Europe 40% Asia 7% Africa 10% Denmark 16%

  27. CASH FLOW • DKKm 1998 1999 2000 • Cash flow from operations 602 794 -26 • Cash flow from investments -2,174 321 -2,500 • Cash flow from financing 1,399 -948 2,175 • Change in cash funds -173 167 -351 • Operations: Lack of orders, poor results • Investments: NKT share buy-back, large acquisitions in APH • Financing: Dividend, increase in NIBD and reduction in cash funds

  28. CAPITAL EXPENDITURES DKK/mill.F.L.Smidth FLS miljø APH Aerospace Intangible 7 - 51 - Tangible Land & Building - 2 85 20 Plant & Machinery 41 1 250 21 Other fixtures 36 8 130 57 Rotables - - - 292 Other 6 - 1 - Acquisitions 52 - 2.063 - Total 142 11 2.580 390

  29. BALANCE SHEET - ASSETS • DKKm 1998 1999 2000 • Intangible fixed assets 351 151 1.308 • Tangible fixed assets 7.141 7,337 8,028 • Fixed assets investments 2.370 2,878 4,284 • Stocks 1,890 2,868 2,989 • Debtors 5,691 5,111 4,931 • Cash, bonds and other securities 861 1,049 651 • Total assets 18,304 19,394 22,191

  30. BALANCE SHEET - LIABILLITIES • DKKm 1998 1999 2000 • Equity (incl. minority interests´ share) 5,791 8.083 7,966 • Provisions 1,413 1,373 1,467 • Long term liabilities 3,804 2,432 5,180 • Short term liabilities 7,296 7,506 7,578 • Total liabilities 18,304 19,394 22,191

  31. 2001 AND ONWARDS • Distributing NKT-shares and DKK +1bn in dividends while merging FLS Industries with APH • Very sound order book in FLSmidth with service etc. growing at +10% annually • Synergies and optimising on three centres will improve financial performance • White cement capacity doubles in 18 months to 1½ mill tonnes and to 3 mill tonnes in 2005 • Unicon US is being turned around through 2001 and 2002 • DEH benefits from upgraded plants hiking productivity and quality • Densit grows internationally according to strategy • FLS Aerospace ensures strategic value in a consolidating industry by normalising profitability by end of 2001 • New CEO in FLS miljø continues to reshape and focus the company looking for partners to leverage technological edge OUTLOOK FOR 2001 EBIT DKK 0.7bn PBT DKK 0.5bn Sales DKK 21bn

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