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FLSmidth Company Announcements

Annual Report for FLSmidth & Co. A/S 1 January - 31 December 2008

26.02.2009
Company Announcement to the Danish Financial Supervisory Authority No. 2-2009, 26 February 2009

The Board of Directors of FLSmidth & Co. A/S has today reviewed and adopted the Annual Report and accounts for 2008. The Report is presented in accordance with International Reporting Standards, which is approved by the EU, and additional Danish disclosure requirements for annual reports of listed companies.

The Interim Report is accessible at FLSmidth's website:


The main conclusions of the Annual Report 2008:
 
Financial performance
- In 2008, FLSmidth posted record-high order intake, revenue and earnings and the fourth quarter alone was the best quarter ever achieved, measured in terms of revenue and earnings
 
- Revenue increased 27% in 2008 to DKK 25,285m (2007: DKK 19,967m)
 
- Earnings before special non-recurring items, depreciation and amortisation (EBITDA) increased 39% to DKK 2,911m in 2008 (2007: DKK 2,100m)
 
- Earnings before interest and tax (EBIT) increased 32% in 2008 to DKK 2,409m (2007: DKK 1,824m), corresponding to an EBIT ratio of 9.5% (2007: 9.1%)
 
- Earnings before tax (EBT) increased 13% in 2008 to DKK 2,123m (2007: DKK 1,877m)
 
- Cash flow from operating activities increased 56% in 2008 to DKK 2,324m (2007: DKK 1,493m)
 
- The order intake increased 25% (gross) in 2008 to DKK 30,176m (2007: DKK 24,061m)
 
- The order backlog increased 20% to DKK 30,460m at the end of 2008 (end of 2007: DKK 25,312m).
 
The market situation
Throughout most of 2008, the level of activity and the order intake were historically high in Cement and Minerals. However, there was a marked slowdown in the willingness to invest among customers during the 4th quarter of 2008.
 
- Cement: The global market for new contracted cement kiln capacity (excl. of China) amounted to 123m tonnes per year in 2008 (2007: 125m tonnes per year), FLSmidth's share of the market being 32% (2007: 29%)
 
- Minerals: 2008 saw a historically high level of investments in the minerals industry, due to insufficient investments in the preceding years combined with a growing demand for minerals, especially from China and other developing countries.
 
Prospects for 2009
- The level of investments both in the cement and minerals industries is expected to fall in 2009. This will, all things being equal, result in a declining order intake in both Cement and Minerals
 
- In 2009, the global market for new contracted cement kiln capacity (excl. of China) is expected to amount to 25-50m tonnes per year
 
- In 2009, FLSmidth expects a consolidated revenue of DKK 20-25bn and satisfactory earnings
 
The prospects of the individual business areas in 2009 are as follows:
 
Cement - Slight decline in revenue compared to 2008 and satisfactory earnings
 
Minerals - Slight decline in revenue compared to 2008 and satisfactory earnings
 
Cembrit - Slight decline in revenue compared to 2008 and modest positive earnings
 
Long-term growth and earnings prospects
In the longer term, it is still expected that the structural market conditions will remain intact and that particularly urbanisation and industrialisation in developing countries will generate increasing demand for cement and minerals.
 
Earnings from Minerals and Customer Services are expected in the coming years to account for a larger share of the Group's total earnings, which will reduce the effect of cyclical market fluctuations in Cement. Against this background, the Group expects its EBIT ratio to be 10-12% in periods of high activity and slightly below that level (8-9%) in periods of low activity. Adjusted for purchase price allocations, the Group's EBIT ratio was 9.9% in 2007 and 10.6% in 2008.
 
Moving forward, the annual investments (excl. of acquisitions) are expected to be DKK 300-400m.
 
The long-term average sustainable level for addition of new global cement kiln capacity (excl. of China) is expected to be 60-75m tonnes per year.
 
FLSmidth's interactive electronic interim report
Via the website both figures and tables can be downloaded in Excel spreadsheet and via the seach engine it is possible to make a global search in the accounts for both figures and text.   
 
 
 
Please address any questions to this announcement to Mr Jørgen Huno Rasmussen, Group CEO, telephone +45 36 18 18 00.
 
An Investor meeting and telephone conference regarding the Annual Report will be held today at 11:00 hours CET. For further details, please visit www.flsmidth.com 
 
 
Yours faithfully
 
Pernille Friis Andersen
Corporate Communications & Investor Relations