Interim report for the period 1 January

Company Announcement no. 10-2016, 18 May 2016

FLSmidth's revenue and EBITA marked by postponed projects

Increased order intake underlines competitive strength. Full-year guidance maintained.

Group CEO Thomas Schulz comments on the Q1 report: "With the 1^st quarter report published today, we showed that, despite a very challenging market situation we increased the order intake. This underlines the strength of FLSmidth. The exceptional revenue shortfall is mainly due to postponed projects. Based on the present order backlog and market situation, Group Executive Management expects a higher activity level in the remainder of 2016 and we maintain our full-year guidance".

The main conclusions of the Interim Report are:

Q1 is typically seasonally weak, which was particularly true in 2016. Thus, revenue declined 20% due to very low activity in January, which could not be compensated for by a pickup in February and March. Divisional gross margins were generally holding up, whereas EBITA margins were negatively impacted by low operational leverage caused by the revenue shortfall. Both net working capital and net interest bearing debt decreased in the quarter. Order intake increased 19% due to receipt of a large cement order. Full-year guidance is maintained.

Financial result for Q1 2016

The order intake increased 19% to DKK 5,281m (Q1 2015: DKK 4,440m).
The order backlog increased 6% to DKK 15,792m (end 2015: DKK14,858m).
Revenue decreased 20% to DKK 3,758m (Q1 2015: DKK 4,683m).
The gross profit decreased 13% to DKK 1,038m (Q1 2015: DKK 1,190m), corresponding to a gross margin of 27.6% (Q1 2015: 25.4%).
Earnings before amortisation and impairment of intangible assets (EBITA) decreased 39% to DKK 246m (Q1 2015: DKK 400m), corresponding to an EBITA margin of 6.5% (Q1 2015: 8.5%).
Earnings before interest and tax (EBIT) decreased 48% to DKK 153m (Q1 2015: DKK 296m), corresponding to an EBIT margin of 4.1% (Q1 2015: 6.3%).
Net profit decreased 73% to DKK 73m (Q1 2015: DKK 272m), of which DKK -6m were related to discontinued activities (Q1 2015: DKK 76m).
Cash flow from operating activities amounted to DKK -60m (Q1 2015: DKK -45m) of which DKK 95m were related to continuing activities (Q1 2015: DKK 211m).
Net interest-bearing debt decreased to DKK -3,567m (end 2015: DKK -3,674m).
Net working capital decreased to DKK 2,410m (end 2015: DKK 2,583m).
Return on Capital Employed (ROCE) decreased to 9% (Q1 2015: 12%).

Developments in total service activities

Order intake related to total service activities decreased 8% (vs. Q1 2015), but increased 3% sequentially (vs. Q4 2015), accounting for 44% of Group order intake (Q1 2015: 58%).
Revenue related to total service activities decreased 9%, accounting for 62% of Group revenue (Q1 2015: 55%).

For further details, please visit: www.flsmidth.com

A telephone conference regarding the Interim Report will be held today at 14:00 hours CET.

Join the conference at: www.flsmidth.com/en-US/News+and+Press/News/2016/Webcast+-+presentation+of+1st+quarter+2016+interim+report

Contact Investor Relations:
Pernille Friis Andersen, +45 36 18 18 87, pefa@flsmidth.com
Nicolai Mauritzen, +45 36 18 18 51, nicm@flsmidth.com

Contact Media Relations:
Sofie Karen Lindberg, +45 30 93 18 77, skl@flsmidth.com

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