The Board of Directors of FLS Industries A/S has today reviewed and adopted the report and accounts for the first nine months of 2002. The accounts are unaudited.
The full report is accessible via the Internet at
http://www.flsindustries.com/investor/fls_reports.htm
The main conclusions are as follows:
Focus on core business
The FLS Group has made a substantial provision for future project processing in FLS miljø, thus enabling it from now on to focus on the two core businesses of F.L.Smidth Group and FLS Building Materials in line with the overall FLS Group strategy.
Financial reporting will in future be divided into core activities and other activities. The purpose of doing so is to improve transparency in describing the fulfilment of the strategic goals.
Core activities:
- The core activities within the FLS Group, F.L.Smidth Group and FLS Building Materials, achieved total earnings before interest and tax (EBIT) at DKK 305m, which is a DKK 89m improvement on the same period last year.
- Core activity turnover amounted to DKK 7.9bn
- F.L.Smidth Group's turnover accounted for DKK 5.0bn, and the order intake totalled DKK 6.7bn.
- F.L.Smidth Group and FLS Building Materials recorded a positive cash flow from operating activities amounting to DKK 536m, a DKK 817m improvement on the same period last year.
Prospects for 2002, core activities:
- FLS Building Materials maintains its projection of higher EBIT compared with last year (DKK 307m).
- F.L.Smidth Group lowers the forecast level of EBIT to a total in the order of DKK 100m, reflecting lower turnover and unsatisfactory operating losses incurred by two of its product companies.
Prospects for 2003, core activities:
- The markets served by the Group's core businesses are not likely to offer better conditions for a financially satisfactory result in 2003. EBIT from the core business of F.L.Smidth Group and FLS Building Materials is expected to be around DKK 0.5bn in 2003.
Other activities:
- The Group has made a provision of DKK 350m in order to hedge the future project processing risks of FLS miljø.
- FLS miljø's financial result for the first nine months of 2002 therefore amounted to DKK -595m
- FLS Aerospace's financial result for the first nine months of 2002 amounted to DKK -96m, which is unsatisfactory, albeit in line with our projections for the period under review.
Prospects for 2002, other activities:
- FLS miljø expects the year's result to be on a par with that for 3rd quarter.
- FLS Aerospace downgrades its EBIT forecast to a slightly lower loss than last year's DKK -116m, reflecting mainly lower capacity utilisation and provisions for pensions.
FLS Group as a whole:
- The DKK 350m provision for losses in connection with the completion of current FLS miljø projects had a serious impact on the consolidated financial result of the FLS Group amounting to DKK -534m.
- Cash flow from operating activities (net of extraordinary dividend) amounted to DKK 940m, up nearly DKK 1.1bn on last year.
- The consolidated net interest-bearing debt amounts to DKK 3.3bn (2001: DKK 5.4bn) and is being reduced as planned.
Prospects for 2002, FLS Group as a whole:
- The overall forecast for the FLS Group in 2002 is an EBIT level of DKK -0.5bn - -0.6bn and earnings before tax at DKK -0.4bn - -0.5bn, including the divestments anticipated at present such as the sale of shares in FLSHH (Secil).
- The FLS Group expects its net debt to be around DKK 2.0bn, including the proceeds from divestments anticipated at present such as the sale of shares in FLSHH (Secil).
Management
Ms Birgitte Nielsen wishes to resign from her position as Chief Financial Officer in view of the revised structure of the company. It is agreed that Ms Birgitte Nielsen will leave the Corporate Management as from 30 November 2002, whilst continuing to work for the company for a period, reporting to the Corporate Management. It is expected that a new Chief Financial Officer for FLS Industries A/S will be appointed.
FLS Industries A/S
Corporate Public Relations