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Donaldson Co Inc, USA
COMPANY WATCH
Donaldson Co Inc, USA
FLSmidth & Co, Denmark
Key Figures (US$ million) Third quarter ended 30.4 2011
2010
Net Sales
594.6
497.6
Cost of Sales
385.4
320.2
Gross Margin
209.2
Operating Expenses
Key Figures (DKK million) First quarter ended 31.3 2011
2010
4385
4490
177.4
Revenue Of Which: Cement Minerals
1935 2199
2426 1836
125.8
105.3
Cost of Goods Sold
3279
3381
Operating Income
83.3
72.1
Gross Profit
1106
1109
Earnings before Income Taxes
81.8
70.1
Sales and Distribution Costs
335
306
Net Earnings
61.8
49.5
Administrative Costs
399
354
EBITDA
427
462
305
359
162 158
237 147
173
233
Nine months ended 30.4 2011
2010
Net Sales
1668.6
1361.8
Cost of Sales
1081.8
890.1
EBIT Of Which: Cement Minerals
Gross Margin
586.8
471.7
Net Income
Operating Expenses
361.5
308.1
Operating Income
225.3
163.6
Earnings before Income Taxes
221.8
157.6
Net Earnings
159.5
115.0
COMMENT COMMENT Donaldson has enjoyed a strong third quarter of fiscal 2011 with sales up 19% on a year earlier at US$594.6 million and net earnings increasing 25% to US$61.8 million. Donaldson’s chair, president and CEO, Bill Cook, said the sales figure was a record for a third quarter. “Sales in our Engine and Industrial Products’ segments increased 25% and 11% over the prior year, respectively,” he said. “Business levels continued to expand in many of our regions with notable performances in the Americas, where local currency sales grew 26%, and in Europe, which grew 15%.” Bucking the trend, however, was Asia where sales were flat, which Cook said was a combination of two different stories. “Our Gas Turbine and
June 2011
Special Applications Products were down from the prior year, however, they were offset by our Engine and Industrial Filtration Solutions Products, which grew 18% and 20%, respectively, driven primarily by their rapid growth in China,” he said. Donaldson recorded a gross margin of 35.2% for the quarter compared to the prior year’s 35.6%, with the decrease resulting from increases in purchased raw material costs and a change in the company’s sales mix, partially offset by better fixed cost absorption and productivity improvements. The operating margin for the period was 14% for the quarter, the company’s highest for the year. Donaldson is forecasting sales of more than US$600 million in its final quarter. ■ www.donaldson.com
FLSmidth, the Denmark-based provider of equipment and services for the cement and mineral industries, has seen its financial performance dip in the first quarter of fiscal 2011. Revenue for the quarter totalled DKK4385 million, down 2% on a year earlier. The decline reflected a 20% drop in the revenues of its Cement segment to DKK1935 million, which the company said primarily reflected timing variations with contracts in North Africa that it expected would smooth out during the remainder of the year. In contrast, sales were up 20% year-on-year in its Minerals division to DKK2199 million and 16% to DKK290 million in its Cembrit sector that produces and distributes fibre cement products. Order intake for the quarter was DKK4964 million, down 4% on the 2010 comparator. The decrease was again related to a downturn for the Cement segment that had benefited
in the year earlier from the award of a major DKK1.1 billion operation and maintenance contract. In contrast, order intake in the Minerals division was up 42% to DKK3375 million. The company’s order backlog totalled DKK24 033 million at the end of the first quarter, up 1% since the turn of the year. Net profit for the quarter was DKK173 million, down 26% from the year earlier’s DKK233 million. During the quarter, FLSmidth took control of ESSA Australia Ltd, a company specialising in design, manufacture and servicing of sampling equipment for the mineral and mining industries. The acquisition is expected to contribute annual revenues of around DKK17 million. For the full year, FLSmidth is forecasting revenues of DKK21 billion–22 billion compared with the DKK20.2 billion posted in fiscal 2011. ■ www.flsmidth.com
Filtration Industry Analyst
9
Donaldson Co Inc, USA
FLSmidth & Co, Denmark
Key Figures (US$ million) Third quarter ended 30.4 2011
2010
Net Sales
594.6
497.6
Cost of Sales
385.4
320.2
Gross Margin
209.2
Operating Expenses
Key Figures (DKK million) First quarter ended 31.3 2011
2010
4385
4490
177.4
Revenue Of Which: Cement Minerals
1935 2199
2426 1836
125.8
105.3
Cost of Goods Sold
3279
3381
Operating Income
83.3
72.1
Gross Profit
1106
1109
Earnings before Income Taxes
81.8
70.1
Sales and Distribution Costs
335
306
Net Earnings
61.8
49.5
Administrative Costs
399
354
EBITDA
427
462
305
359
162 158
237 147
173
233
Nine months ended 30.4 2011
2010
Net Sales
1668.6
1361.8
Cost of Sales
1081.8
890.1
EBIT Of Which: Cement Minerals
Gross Margin
586.8
471.7
Net Income
Operating Expenses
361.5
308.1
Operating Income
225.3
163.6
Earnings before Income Taxes
221.8
157.6
Net Earnings
159.5
115.0
COMMENT COMMENT Donaldson has enjoyed a strong third quarter of fiscal 2011 with sales up 19% on a year earlier at US$594.6 million and net earnings increasing 25% to US$61.8 million. Donaldson’s chair, president and CEO, Bill Cook, said the sales figure was a record for a third quarter. “Sales in our Engine and Industrial Products’ segments increased 25% and 11% over the prior year, respectively,” he said. “Business levels continued to expand in many of our regions with notable performances in the Americas, where local currency sales grew 26%, and in Europe, which grew 15%.” Bucking the trend, however, was Asia where sales were flat, which Cook said was a combination of two different stories. “Our Gas Turbine and
June 2011
Special Applications Products were down from the prior year, however, they were offset by our Engine and Industrial Filtration Solutions Products, which grew 18% and 20%, respectively, driven primarily by their rapid growth in China,” he said. Donaldson recorded a gross margin of 35.2% for the quarter compared to the prior year’s 35.6%, with the decrease resulting from increases in purchased raw material costs and a change in the company’s sales mix, partially offset by better fixed cost absorption and productivity improvements. The operating margin for the period was 14% for the quarter, the company’s highest for the year. Donaldson is forecasting sales of more than US$600 million in its final quarter. ■ www.donaldson.com
FLSmidth, the Denmark-based provider of equipment and services for the cement and mineral industries, has seen its financial performance dip in the first quarter of fiscal 2011. Revenue for the quarter totalled DKK4385 million, down 2% on a year earlier. The decline reflected a 20% drop in the revenues of its Cement segment to DKK1935 million, which the company said primarily reflected timing variations with contracts in North Africa that it expected would smooth out during the remainder of the year. In contrast, sales were up 20% year-on-year in its Minerals division to DKK2199 million and 16% to DKK290 million in its Cembrit sector that produces and distributes fibre cement products. Order intake for the quarter was DKK4964 million, down 4% on the 2010 comparator. The decrease was again related to a downturn for the Cement segment that had benefited
in the year earlier from the award of a major DKK1.1 billion operation and maintenance contract. In contrast, order intake in the Minerals division was up 42% to DKK3375 million. The company’s order backlog totalled DKK24 033 million at the end of the first quarter, up 1% since the turn of the year. Net profit for the quarter was DKK173 million, down 26% from the year earlier’s DKK233 million. During the quarter, FLSmidth took control of ESSA Australia Ltd, a company specialising in design, manufacture and servicing of sampling equipment for the mineral and mining industries. The acquisition is expected to contribute annual revenues of around DKK17 million. For the full year, FLSmidth is forecasting revenues of DKK21 billion–22 billion compared with the DKK20.2 billion posted in fiscal 2011. ■ www.flsmidth.com
Filtration Industry Analyst
9