FLSmidth & Co, Denmark

COMPANY WATCH

FLSmidth & Co, Denmark

Pentair Ltd, UK/Ireland

Key Figures (DKK million) Fourth quarter ended 31.12 2015

Key Figures (US$ million) Fourth quarter ended 31.12 2015

2014

Order Intake

3691

3734

Revenue

5297

5627

Cost of Goods Sold

4042

4362

Gross Profit

1255

1265

EBITDA

463

493

EBIT

279

274

64

186

Net Income Year ended 31.12

2015

2014

Order Intake

18 490

17 267

Revenue

19 682

20 499

Cost of Goods Sold

14 736

15 374

Gross Profit

4946

5125

EBITDA

1878

2106

EBIT

1141

1416

603

881

Net Income

2014

Net Sales Of Which: Flow & Filtration Solutions

1760.7

1802.5

354.2

383.4

Cost of Goods Sold

1191.4

1174.6

569.3

627.9

Gross Profit

30.9

29.1

Operating Income Of Which: Flow & Filtration Solutions

R&D Costs

162.8

176.0

40.1

41.9

Income before Taxes

125.8

158.8

92.2

120.8

2015

2014

Net Income Year ended 31.12 Net Sales Of Which: Flow & Filtration Solutions

6449.0

7039.0

1441.6

1603.1

Cost of Goods Sold

4263.2

4576.0

Gross Profit

2185.8

2463.0

R&D Costs

119.6

117.3

Operating Income Of Which: Flow & Filtration Solutions

731.9

851.9

185.1

199.5

Income before Taxes

628.8

784.3

Net Income

469.1

214.9

COMMENT FLSmidth endured a difficult finish to fiscal 2015 with orders, revenue and net profit all decreasing on the year earlier. Order intake was 1.1% lower at DKK3691 million, which the company said reflected customers’ focus on cash preservation at year-end. Revenue fell further, down 5.9% to DKK5297 million. Net profit plunged 66.1% to DKK64 million, with earnings particularly volatile in oil exporting countries. Earnings were impacted by one-off costs of DKK89 million in the quarter, including DKK48 million related to costs and provisions to an operating and maintenance contract. For the corresponding full 8

Pump Industry Analyst

year order intake was up 7.0% at DKK18 490 million, supported by currency developments, while revenue was down 4.0% at DKK19 682 million and net profit by 31.6% to DKK603 million. FLSmidth CEO Thomas Schulz said that overall the full year results indicated that the company was managing the cyclical downturn well. “Despite a very challenging market situation our performance is solid, and our products and services provide a stable and profitable business,” he said. “The financial result is in line with our guidance, our order intake is up, and we have a positive free cash flow.” ■ www.flsmidth.com

COMMENT Pentair has posted fourth quarter fiscal 2015 sales of US$1.8 billion, a decrease of 2.3% on a year earlier, while net income fell 23.7% to US$92.2 million. Fourth quarter sales in the Flow & Filtration Solutions segment fell 7.6% on the 2014 figure to US$354.2 million, with core sales declining approximately two percentage points and negative currency impacts accounting for the remainder. Segment income for the period fell 4.3% to US$40.1 million, although margins increased 40 basis points to 11.3%. For the year, sales fell 8.4%

to US$6.4 billion, while net income rose 118.3% to US$469.1 million. “We delivered on our fourth quarter commitments despite the challenges our businesses serving the Energy and Industrial markets continue to face,” Randall Hogan, Pentair’s chair and CEO, said. “We continue to believe in the longterm prospects of all of our businesses and we expect our proven track record around operational rigor and cash flow will help us manage our way through this uncertain economic environment.” ■ www.pentair.com

March 2016