A merger between FLS Industries and Aalborg Portland Holding is proposed at 1 APH A/B share to 1.2 FLS B shares. Holders of new FLS B shares are entitled to dividend from the 2001 financial year.
The Board proposes a dividend for 2000 at DKK 3 per share.
The merger will reduce Potagua's share of FLS capital to about 47% and its share of the vote to 63%.
RM Industrial Group has been sold for DKK 350m in line with the focused strategy. The divestiture has little earnings impact.
The year's EBIT at DKK -458m (1999: DKK 475m) was unsatisfac-tory. Cash flow from operating activities amounted to DKK -26m (DKK 787m). Shareholders' equity at 31 December 2000 was DKK 7,966m (DKK 8,033m). Net interest-bearing debt amounted to DKK 5.7bn at 31 December 2000 (DKK 2.5bn). ROCE amounted to 6%. Adjusted for NKT Holding ROCE was -4%.
The poor results for 2000 are due to restructuring, lack of orders and operating losses, notably from two projects in the US. The sig-nificant buy-back of 50% of Aalborg Portland for nearly DKK 1.5bn explains most of the increase in debt.
FLS Aerospace became profitable in the 4th quarter and expects a normalised level of earnings by the end of 2001 due to improved efficiency and higher contract prices.
F.L.Smidth received DKK 2bn worth of orders in the strategically important after market. This improvement combined with a number of major contracts was reflected in a satisfactory order backlog of DKK 6.2bn at the start of 2001 with EBIT forecast at DKK 0.2bn.
APH posted EBIT at DKK 429m despite rising goodwill amortisa-tion, higher energy costs and losses in the USA and Spain. EBIT for 2001 is forecast on a par with 2000, with Danish construction slow-ing and US earnings improving.
FLS miljø's order book remains unsatisfactory. The company fore-casts higher EBIT earnings in 2001, while continuing its programme of adjustments.
Prospects for 2001
FLS Industries estimates EBIT at DKK 0.7bn and earnings be-fore tax
at DKK 0.5bn on sales close to DKK 21bn.
1:1.2 exchange ratio
The Boards of Directors have based the exchange ratio on volume-weighted share prices from 21 Feb to 6 March 2001. Prices are adjusted for pro-posed allotment of shares and cash dividends of DKK 3 per FLS share and DKK 55 plus ½ NKT share per APH share.
Based on independent valua-tions of the undertakings, ArosMaizels and Danske Secu-rities have each submitted a fairness opinion on the agreed exchange ratio to the respective FLS and APH boards of direc-tors, both concluding that the exchange ratio is financially fair to the FLS and APH sharehold-ers. KPMG C. Jespersen, the appointed valuer, agrees.
Briefing
A briefing for financial analysts, investors and the press will be held at the company's office on 8 March 15.00 hours.
Please address any questions regarding this message to Group President and CEO Peter Assam, telephone +45 36 18 18 00, from 13.30 hours. The presentation will be available at www.flsindustries.com/Investor Relations after the meeting.
The English version of the Annual report and the merger plan will be available shortly at the FLS Industries' website.
FLS Industries A/S
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