Prospects for 2011 (unchanged)
The expectations for the cement market in 2011 are 65m tonnes per year new contracted cement kiln capacity worldwide (exclusive of China)
In 2011, FLSmidth & Co. expects a consolidated revenue of DKK 21-22bn and an EBIT ratio of approximately 9-10%
For the individual business areas, the prospects for 2011 are as follows:
Revenue EBIT ratio
Cement DKK 9-10bn 9-10%
Minerals DKK 10-11bn 10-11%
Cembrit approx. DKK 1.4bn approx. 4%
The effect of purchase price allocations regarding GL&V Process is expected to amount to approximately DKK -90m in 2011 in the form of amortisation of intangible assets
In 2011, the effective tax rate is expected to be around 30%
Cash flow from investing activities (inclusive of acquisitions) is expected to be around DKK -900m in 2011
Long-term Financial Objectives (unchanged)
It is expected that particularly urbanisation and industrialisation in emerging markets will generate increasing demand for cement and minerals. In addition, there are a number of other structural conditions which are expected to result in increasing investments in the mining industry; they include underinvestment over a number of years, and the fact that the quality and accessibility of unexploited ore deposits are decreasing, thereby contributing to a higher demend for minerals handling and extraction equipment.
The long-term sustainable level for addition of new global cement kiln capacity (exclusive of China) is expected to be 60-75m tonnes per year on average.
Earnings from Customer Services in both Cement and Minerals over the coming years are expected to account for a rising proportion of the Group's total earnings. This also applies to the Minerals segment as a whole. In the light of these facts the Group stukk expects its EBIT ratio to be 10-12% in periods of high activity and 8-9% in periods of low activity, bearing in mind that FLSmidth's business is of a late cyclical nature.
The effect of purchase price allocations regarding GL&V Process is in future expected to be around DKK -100m per year.
In years to come, the annual investments (exclusive of acquisitions) are expected to be in the range of DKK 400-500m (previous expectation DKK 300-400m). In 2011, however, they are expected to amount to DKK 900m as a result of investmets in Service Super Centres and manufacturing facilities in China and India.