The Board of Directors of FLS Industries A/S has today reviewed and adopted the report and accounts for January to September of 2003. The accounts are unaudited and presented in accordance with the same accounting policies as the 2002 Annual Report.
The full report is accessible via the Internet at
The FLS Group's balance sheet total was greatly reduced and the net interest-bearing debt amounted to DKK 2.2bn at the end of the 3rd quarter of 2003 (at the end of the 3rd quarter of 2002: DKK 3.3bn).
Earnings before tax (EBT) for the first nine months of the year amounted to DKK -122m as against DKK -1,160m for the same period last year. The figure for 2003 includes additional provisions for a loss of DKK 300m in FLS miljø.
The FLS Group's total earnings before interest and tax (EBIT) for the first nine months of the year amounted to DKK -615m as against DKK -534m for the same period last year.
The core companies' earnings before interest and tax (EBIT) were DKK 148m in the 3rd quarter 2003 as against DKK 115m for the same period last year, corresponding to an increase of 29%.
Cash flows from operating activities for the first nine months of the year were DKK -124m as against DKK 940m for the same period last year. Cash flows, excluding FLS miljø, were DKK 671m as against DKK 969m last year.
The strategic plans announced on 29 August 2002 are being followed. The transition period is expected to run until around New Year 2003.
Core activities
Earnings before interest and tax (EBIT) for FLS Building Materials amounted to DKK 262m for the first nine months of the year. Net of one-off items the EBIT result was an improvement on the same period last year. Turnover was DKK 2.8bn (DKK 3.0bn), and cash flows from operating activities were DKK 488m.
The F.L.Smidth Group recorded an EBIT loss of DKK 111m, down DKK 125m on the same period last year. The order intake was DKK 6.6bn and is on a par with the same period last year. Cash flows from operating activities were DKK 93m in the red.
Total EBIT for the FLS Group's core activities amounted to DKK 151m (DKK 305m by the end of the 3rd quarter 2002). The core activities recorded positive cash flows from operating activities of DKK 395m as against DKK 570m for the same period last year.
Other activities
FLS Aerospace posted negative earnings before interest and tax of DKK 90m in the first nine months of the year, which is on a par with the same period last year (DKK -96m).
FLS miljø is proceeding with the completion of desulphurisation projects in the UK. Increasing costs and provisions for project completion resulted in a total operating loss of DKK 627m (DKK -595m).
Prospects for the FLS Group in 2003
The FLS Group maintains its expectations for a group turnover in excess of DKK 15bn, provided its main currencies USD and GBP remain at the current exchange rate level.
The FLS Group now expects earnings before interest and tax (EBIT) around the level of DKK -400m to DKK -500m, as against the previous expectation of DKK -50m to DKK -100m.
Earnings before tax (EBT) are now expected to be around DKK -600m to DKK -700 m exclusive of the effect of acquisition and disposal of undertakings as against the previously anticipated DKK -200m to DKK -250m.
Prospects for the individual activities in 2003
The core activities of the F.L.Smidth Group and FLS Building Materials expect to see earnings before interest and tax around DKK 0.35bn to DKK 0.4bn. Prospects for the whole year are an EBIT result of about DKK 200m in the 4th quarter of 2003, as against DKK 134m for the same period last year.
FLS Aerospace expects an EBIT result around DKK -100m, whereas FLS miljø downgrades its expectations for the EBIT result to be on a par with 2002 (DKK -659m). These activities combined with the parent company and other companies are expected to have a DKK 0.85bn adverse effect on the EBIT result. Profits earned from corporate divestments during the first nine months of 2003 amounted to DKK 650m.
The earnings forecast is still subject to uncertainty with regard to the prospects of the non-strategic activities. The Group's focusing effort includes a number of corporate divestments. The results, the sequence and the timing of these divestments may significantly influence the prospects, negatively and positively, and have not been included in the above figures.
FLS Industries A/S
Corporate Public Relations