INTERIM REPORT Q1 2018

Transcription

1 FLSMIDTH MAIN CONCLUSIONS 1 January - 31 March 2018 (Company announcement no. 5) WE DISCOVER POTENTIAL continued INTERIM REPORT Q Interim report Q ROCE CFFO () 10.4% 343 Up from 9.4% Up from DKK 149 EBITA margin Order intake () 8.1% 5,018 Down from 8.5% Down from DKK 5,561

2 CONTENTS MANAGEMENT S REVIEW FLSmidth at a glance 3 Main conclusions 3 FLSmidth in numbers 4 Financial highlights 5 Organisational change 6 Financial developments 7 Divisional performance 12 Customer Services 12 Product Companies 13 Minerals 14 Cement 15 Quarterly key figures 16 Statement by Management 20 CONSOLIDATED FINANCIAL STATEMENTS Consolidated income statement 21 Consolidated statement of comprehensive income 22 Consolidated cash flow statement 23 Consolidated balance sheet 24 Consolidated equity 25 NOTES 1. Segment information Revenue Income statement classified by function Work-in-progress for third parties Provisions Fair value hierarchy of financial instruments Earnings per share (EPS) Contingent liabilities Acquisition of activities Significant accounting estimates Events after the balance sheet date Accounting policies 33 HOW TO NAVIGATE THE REPORT Back to contents Management review Financial statement 2 Interim report Q1 2018

3 FLSMIDTH AT A GLANCE MAIN CONCLUSIONS Currency effects had a markedly adverse impact on order intake, revenue and operating profit. First large mining order in three years. Cement market unchanged. Good aftermarket momentum. Further reduction in net working capital and net debt. Guidance for 2018 maintained. GROWTH The order intake decreased 3% organically as the booking of the first large minerals project since 2015 was insufficient to compensate for the lack of large cement projects. Revenue increased 3% organically, mainly driven by products. PROFIT Operating profit decreased as a result of foreign exchange effects, lower revenue and a lower gross margin. Consequently, the EBITA margin decreased to 8.1% in Q1. CAPITAL ROCE increased to 10.4% as a result of higher EBITA over the past 12 months and lower capital employed. Due to decreasing net working capital and a strong free cash flow, net interest bearing debt declined to DKK 1.2bn. The financial gearing (NIBD/EBITDA) decreased to 0.7, well within the long-term target. KEY PERFORMANCE INDICATORS 2018 (part of management s short- and long-term incentive plans) Financial Q Q Order intake () 5,018 5,561 ROCE 10.4% 9.4% Net working capital % (end) 8.9% 11.6% EBITA margin 8.1% 8.5% Non-financial YTD Safety (TRIFR)¹) Quality (DIFOT)²) 86% 88% 1) TRIFR = Total Recordable Injury Frequency Rate 2) DIFOT = Delivery in full on time GUIDANCE FOR 2018 DKK Realised Q Guidance 2018 Revenue (DKKbn) EBITA margin 8.1% 8-10% ROCE 10.4% 10-12% LONG-TERM FINANCIAL TARGETS Long-term financial targets for FLSmidth subject to normalised market conditions: Annual growth in revenue EBITA margin 10-13% ROCE¹) >20% Financial gearing (NIBD/EBITDA) <2 Equity ratio >30% Pay-out ratio Above market average 30-50% of the profit for the year 1) ROCE: Return on Capital Employed calculated on a before-tax basis as EBITA divided by average Capital Employed including goodwill 3 Interim report Q FLSmidth at a glance

4 FLSMIDTH AT A GLANCE FLSMIDTH IN NUMBERS FLSmidth Revenue 4,235 EBITA margin 8.1% Customer Services Product Companies Minerals Cement Revenue 1,612 Revenue 1,315 Revenue 592 Revenue 932 EBITA margin 13.3% EBITA margin 10.6% EBITA margin -2.7% EBITA margin 0.6% Mining industry Cement industry Revenue 2,255 (53%) Revenue 1,980 (47%) EBITA margin 9.5% EBITA margin 6.5% 4 Interim report Q1 2018

5 FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS Q Q Year 2017 INCOME STATEMENT Revenue 4,235 4,371 18,000 Gross profit 1,074 1,134 4,597 EBITDA before special non-recurring items ,732 EBITA ,515 EBIT ,115 Financial items, net (35) (34) (311) EBT Profit for the period, continuing activities Loss for the period, discontinued activities (11) (17) (343) Profit for the period ORDERS Order intake (gross), continuing activities 5,018 5,561 19,170 Order backlog, continuing activities 13,874 14,998 13,654 EARNING RATIOS Gross margin 25.4% 25.9% 25.5% EBITDA margin before special non-recurring items 9.4% 10.0% 9.6% EBITA margin 8.1% 8.5% 8.4% EBIT margin 5.9% 6.2% 6.2% EBT margin 5.0% 5.4% 4.4% CASH FLOW CFFO ,065 Acquisitions of tangible assets (56) (22) (174) CFFI (42) (35) (113) Free cash flow Free cash flow adjusted for acquisitions and disposals of enterprises and activities Q Q Year 2017 BALANCE SHEET Net working capital 1,590 2,182 1,833 Net interest-bearing debt (NIBD) (1,167) (2,333) (1,545) Total assets 21,349 23,572 22,364 Equity 8,058 8,496 8,038 Dividend to shareholders, paid FINANCIAL RATIOS CFFO / Revenue 8.1% 3.4% 5.9% Cash conversion 117.3% 41.9% 75.9% Book-to-bill 118.5% 127.2% 106.5% Order backlog / Revenue 77.7% 79.8% 75.9% Return on equity 0.6% 7.4% 0.9% Equity ratio 37.7% 36.0% 35.9% ROCE, average 10.4% 9.4% 10.4% Net working capital ratio, end 8.9% 11.6% 10.2% NIBD/EBITDA Capital employed, average 14,326 14,993 14,533 Number of employees 11,790 11,869 11,716 SHARE RATIOS CFPS (cash flow per share), (diluted) EPS (earnings per share), (diluted) Share price Number of shares (1,000), end 51,250 51,250 51,250 Market capitalisation 19,921 19,116 18,517 The financial ratios have been computed in accordance with the guidelines of the Danish Finance Society and financial definitions according to note 8.15 in the Annual Report Interim report Q Financial highlights

6 FINANCIAL HIGHLIGHTS ORGANISATIONAL CHANGE EFFECTIVE FROM 1 JULY 2018 FLSmidth's organisation will consist of two industries - Cement and Mining supported by a regional setup to strengthen customer focus and life-cycle solutions - combined with a new central digital organisation. FLSmidth will transition from four divisions into two industries, Cement and Mining, and from a country setup into an agile regional structure. Customer relations will be decentralised in seven regions, while technology ownership for the full life-cycle offering will be anchored in the two industries. This will create a productivity-driven organisation with a strong, unified digital approach and fewer touchpoints. At the same time, it will strengthen FLSmidth s local presence, customer-orientation, and life-cycle offering in order to capture growth. In short: The two industries; Cement and Mining will develop and drive the life-cycle offering and product portfolio. The two industries will be supported by seven regions: North America; South America; Europe, Russia & North Africa; Sub- Saharan Africa & Middle East; Asia; Subcontinental India; and Australia. The regions will drive customer relations, sales and service for both industries. A central digital organisation will drive a unified approach to digitalization. Changes to Group Executive Management and to the financial reporting As of 1 July 2018, Group Executive Management will consist of Thomas Schulz *) (Group CEO), Lars Vestergaard *) (Group CFO), Jan Kjaersgaard (Cement President), Manfred Schaffer (Mining President) and Mikael Lindholm (Chief Digital Officer). The financial reporting will be aligned with the organisational structure as from the Q Interim Report. The new reporting segments will be Cement and Mining. *) Registered with the Danish Business Authority 6 Interim report Q Financial highlights

7 FINANCIAL DEVELOPMENTS FINANCIAL DEVELOPMENTS MARKET TRENDS Foreign exchange Currency translation effects had a considerable negative impact on orders, revenue and earnings in Q1, amongst others driven by the weaker USD as compared to the same quarter last year. At prevailing FX rates, Q2 is also expected to show strong currency headwind, whilst the negative currency effects compared to last year should ease somewhat in the second half of GROUP (Continuing activities) Mining Momentum in the market for minerals processing equipment started building in the second half of 2017 and continued into Miners are, on average, projecting moderately higher capital expenditures in 2018 which is underpinned by the actual tendering activity. While Q1 included the first large minerals project order since 2015, the focal point of customer interest is single equipment or smaller islands of equipment. A few larger orders are being discussed and could potentially secure project financing although environmental approvals and business licenses are becoming increasingly difficult to obtain. After a strong start to the year, the copper price fell back to the end 2017 level in March, likely due to fear of a trade war between the world's two largest economies, which on the other hand drove up the gold price. A trade war could be damaging to commodity markets and investment sentiment but for now the mining recovery seems intact and, according to IMF, the prospects for global economic growth remain encouraging for 2018 and The US import tariffs on steel are not expected to have any significant direct impact on FLSmidth project costs due to our flexible and global sourcing platform. The mining aftermarket showed continued good momentum in Q1 with a healthy demand for parts and services across regions. () Q Q Change (%) Order intake (gross) 5,018 5,561-10% - Hereof service order intake 2,885 2,868 1% Order backlog 13,874 14,998-7% Revenue 4,235 4,371-3% - Hereof service revenue 2,507 2,675-6% Gross profit 1,074 1,134-5% Gross profit margin 25.4% 25.9% SG&A cost (678) (698) -3% SG&A ratio 16.0% 16.0% SG&A ratio adjusted for one-off cost 16.0% 16.0% EBITDA before special non-recurring items % EBITDA margin before special non-recurring items 9.4% 10.0% EBITA % EBITA margin 8.1% 8.5% EBITA margin adjusted for one-off cost 8.1% 8.6% EBIT % EBIT margin 5.9% 6.2% Number of employees 11,656 11,717-1% Cement The market for new cement capacity was largely unchanged in Q1 with some potential projects in the pipeline but an overall subdued level of tendering activity. On the positive side, momentum is building in India, which contributed positively to order intake in the first quarter. After picking back up to a normalised level in Q4 2017, the cement aftermarket saw a stable development in Q1 2018, however with some regional shifts in demand. Pricing in both the cement and the mining industry showed a stable development in the quarter. 7 Interim report Q Financial developments

8 FINANCIAL DEVELOPMENTS FINANCIAL DEVELOPMENTS IN Q GROWTH The order intake decreased 3% organically as the booking of the first large minerals project since 2015 was insufficient to compensate for the lack of large cement projects. Revenue increased 3% organically, mainly driven by products. Developments in total service activities Total service activities in FLSmidth embrace the entire Customer Services Division, Operation & Maintenance contracts (part of the Cement Division), and the whole service and aftermarket part of the Product Companies Division. Despite strong currency headwind of 9%, the order intake related to total service activities increased 1% to DKK 2,885m in Q1 (Q1 2017: DKK 2,868m), equivalent to 57% of the total order intake (Q1 2017: 52%). Revenue related to total service activities decreased 6% to DKK 2,507m in Q1 (Q1 2017: DKK 2,675m), equivalent to 59% of the total revenue (Q1 2017: 61%). Adjusted for currency effects, revenue from total service activities increased compared to Q Order intake and order backlog The order intake in Q1 included a large Minerals order of more than DKK 600m but still decreased 10% to DKK 5,018m (Q1 2017: DKK 5,561m) as the comparison quarter contained three large cement orders worth more than DKK 1,200m. Foreign exchange translation effects had a negative impact of 8% and the acquisition of part of Sandvik Mining Systems had a 1% positive impact. Organic growth was -3%. Customer Services showed strong organic order growth, supported by an increased wear parts business. Product Companies fell short of last year due to lack of larger orders but came out stronger than the second half of Order intake developments in Q Order intake (vs.q1 2017) Customer Product Services Companies Minerals Cement FLSmidth Group Organic 10% -3% 66% -54% -3% Acquisition 2% 0% 3% 0% 1% Currency -10% -6% -19% -3% -8% Total growth 2% -9% 50% -57% -10% The order backlog for the Group increased to DKK 13,874m (end of 2017: DKK 13,654m). 66% of the backlog is expected to be converted to revenue in the remainder of 2018, 22% in 2019, and 12% in 2020 and beyond. The order backlog was negatively impacted by foreign exchange adjustments of DKK 0.3bn in Q1. Revenue Revenue decreased 3% to DKK 4,235m in Q (Q1 2017: DKK 4,371m). Foreign exchange translation effects had an 8% negative impact and acquisitions a 2% positive impact on revenue. Organic growth was 3%, mainly driven by Product Companies. Revenue developments in Q Revenue (vs.q1 2017) Customer Product Services Companies Minerals Cement FLSmidth Group Organic 2% 10% 0% 2% 3% Acquisition 1% 0% 10% 0% 2% Currency -9% -7% -9% -5% -8% Total growth -6% 3% 1% -3% -3% ORDER INTAKE BY INDUSTRY (QTD) ORDER INTAKE BY DIVISION (QTD) REVENUE BY DIVISION (QTD) 22% 14% 22% 2% 1% 32% 36% 38% 6% 21% 14% 6% 31% Cement Copper Gold Coal Iron ore Fertiliser minerals Other Customer Services Minerals 28% Product Companies Cement Customer Services Minerals 27% Product Companies Cement 8 Interim report Q1 2018

9 FINANCIAL DEVELOPMENTS PROFIT Operating profit decreased as a result of foreign exchange effects, lower revenue and a lower gross margin. Consequently, the EBITA margin decreased to 8.1% in Q1. The gross profit in Q1 decreased 5% to DKK 1,074m (Q1 2017: DKK 1,134m), due to the lower revenue and a different business mix. The corresponding gross margin was 25.4% (Q1 2017: 25.9%). The gross margin increased in the two capital divisions and decreased in Customer Services and Product Companies. Q saw total research and development expenses of DKK 54m (Q1 2017: DKK 40m), representing 1.3% of revenue (Q1 2017: 0.9%), of which none was capitalised (Q1 2017: DKK 7m) and all was reported as production costs. In addition, projectfinanced developments are taking place in cooperation with customers. Sales, general and administrative costs and other operating items amounted to DKK 678m in Q (Q1 2017: DKK 698m), which represents a cost percentage of 16.0% of revenue (Q1 2017: 16.0%). EBITA in Q1 decreased 8% to DKK 343m (Q1 2017: DKK 372m) as a result of foreign exchange effects, lower revenue and lower gross margin. Consequently, the EBITA margin decreased to 8.1% (Q1 2017: 8.5%). Amortisation of intangible assets amounted to DKK -95m (Q1 2017: DKK -100m). The effect of purchase price allocations amounted to DKK -40m (Q1 2017: DKK -55m) and other amortisations to DKK -55m (Q1 2017: DKK -45m). Earnings before interest and tax (EBIT) decreased to DKK 248m (Q1 2017: 272m). Net financial items amounted to DKK -35m (Q1 2017: DKK -34m), of which foreign exchange adjustments amounted to DKK -29m (Q1 2017: DKK -29m) and net interest amounted to DKK -6m (Q1 2017: DKK -5m). Tax for the period amounted to DKK -66m (Q1 2017: DKK -60m), corresponding to an effective tax rate of 31% (Q1 2017: 25%). The USA passed a new tax legislation effective 1 January The full impact is still being analysed, but it is expected that the overall consequences for the Group s effective tax rate and tax payments in 2018 will be negative based on the current business model due to the new Base Erosion Anti-Abuse Tax (BEAT). Profit from continuing activities decreased to DKK 147m (Q1 2017: DKK 178m), reflecting the lower operating income. REVENUE SPLIT BETWEEN SERVICE AND CAPITAL BUSINESS ORDER INTAKE REVENUE AND EBITA MARGIN EBITA % 6,000 6,000 15% 59% 41% 5,000 4,000 3,000 2,000 1,000 0 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q ,000 4,000 3,000 2,000 1,000 0 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q % 9% 6% 3% 0% Capital business Service business Orders below DKK 200m Orders above DKK200m Revenue EBITA margin 9 Interim report Q1 2018

10 FINANCIAL DEVELOPMENTS Loss from discontinued activities amounted to DKK -11m (Q1 2017: DKK -17m). Discontinued activities are predominantly related to the bulk material handling activities that were announced for sale in connection with the third quarter interim report in The sales process and dialogue with potential acquirers is still ongoing, and a conclusion is expected in Q Profit for the period decreased to DKK 136m (Q1 2017: DKK 161m), equivalent to DKK 2.7 per share (diluted) (Q1 2017: DKK 3.2). CAPITAL Capital employed and ROCE Average capital employed decreased to DKK 14.3bn in Q (Q1 2017: DKK 15.0bn), and 12-months trailing EBITA increased to DKK 1,486m (Q1 2017: DKK 1,415m). As a consequence, ROCE increased to 10.4% (Q1 2017: 9.4%). Capital employed amounted to DKK 13.6bn at the end of Q and consists primarily of intangible assets amounting to DKK 9.8bn, which is mostly historical goodwill as well as patents and rights, and customer relations. Tangible assets amounted to DKK 2.2bn and net working capital to DKK 1.6bn at the end of Q1. The free cash flow (cash flow from operating and investing activities) in Q1 amounted to DKK 301m (Q1 2017: DKK 114m). Cash flow in Q will be negatively impacted by a cash payment of more than DKK 200m related to provisions made in 2017, as well as the dividend payment of DKK 410m. Balance sheet and capital structure The balance sheet total declined to DKK 21,349m at the end of Q (end of 2017: DKK 22,364m), mainly due to currency translation effects. Equity at the end of Q increased slightly to DKK 8,058m (end of 2017: DKK 8,038m), and the equity ratio was 37.7% (end of 2017: 35.9%), well above the long-term target of minimum 30%. Net interest-bearing debt by the end of Q decreased to DKK 1,167m (end of 2017: DKK 1,545m). As a result, the Group s financial gearing was 0.7 (end of 2017: 0.9), well within the NIBD long term target of maximum 2x EBITDA. At the end of Q1 2018, the Group s capital resources consisted of committed credit facilities of DKK 7.5bn (including mortgage) with a weighted average time to maturity of 3.2 years. TREASURY SHARES FLSmidth s treasury shares amounted to 1,598,101 shares at the end of Q (end of 2017: 1,729,337 shares), representing 3.1% of the total share capital (end of 2017: 3.4%). The holding of treasury shares is used to hedge FLSmidth s long-term incentive plans. LONG TERM INCENTIVE PLANS (LTIP) Share option plans (being phased out) At the end of Q1 2018, there was a total of 1,379,659 unexercised share options under FLSmidth s incentive plan and their fair value was DKK 176m. The fair value is calculated by means of a Black & Scholes model based on a current share price of DKK, a volatility of 26.8% and future annual dividend of DKK 8 per share. The effect of the plan on the income statement for Q was DKK -5m (Q1 2017: DKK -6m). Cash flow and working capital Cash flow from operating activities increased to DKK 343m in Q (Q1 2017: DKK 149m), explained by a substantial positive contribution from change in net working capital. Net working capital decreased to DKK 1,590m at the end of Q (end of 2017: DKK 1,833m) which is the lowest level since The corresponding net working capital ratio declined to 8.9% of 12-months trailing revenue (end of 2017: 10.2% of revenue), the lowest level since The reduction in net working capital was explained by a reduction in both trade receivables and net work-in-progress, mostly related to minerals projects, and partly offset by a decline in prepayments from cement projects. Cash flow from investing activities amounted to DKK -42m (Q1 2017: DKK -35m) (100) (200) CASH FLOW FROM OPERATING ACTIVITIES Q Q2 Q3 Q4 Q CFFO Q2 Q3 Q4 Q ,000 2,500 2,000 1,500 1, Q NET WORKING CAPITAL Q2 Q3 Q4 Q Net working capital Q2 Q3 Q4 Q Interim report Q1 2018

11 FINANCIAL DEVELOPMENTS Performance shares (replacing share option programme) At the end of Q1 2018, FLSmidth had granted a maximum of 409,048 performance share units (Q1 2017: 302,813) to 279 key employees. Full vesting after three years will depend on achievement of stretched financial targets related to the EBITA margin and the net working capital ratio. The effect of the plan on the income statement for Q was DKK -6m (Q1 2017: DKK -4m). EMPLOYEES The number of employees amounted to 11,790 at the end of Q (end of 2017: 11,716), including discontinued activities, employing 134 people. The increase of 74 employees is mainly related to maintenance work in South America and the transfer of people from Sandvik to FLSmidth in South Africa. ACQUISITION COMPLETE With the transfer of assets in South Africa now completed, the previously announced acquisition of the Sandvik Mining Systems projects business has been finalised. GUIDANCE FOR 2018 (UNCHANGED) Based on the results delivered in the first quarter of 2018 and the expected developments in the remainder of 2018, it is expected that revenue will be DKK 18-20bn and that the EBITA margin will be 8-10%. The return on capital employed is expected to be 10-12%. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE On 5 April 2018, FLSmidth & Co. A/S held its Annual General Meeting at the company's offices, Vigerslev Allé 77, DK-2500 Valby. A summary of the meeting is available on flsmidth.com. FINANCIAL CALENDAR Aug Half-year Interim Report Nov st-3rd Quarter Interim Report 2018 FORWARD-LOOKING STATEMENTS FLSmidth & Co. A/S financial reports, whether in the form of annual reports or interim reports, filed with the Danish Business Authority and/or announced via the company s website and/or NASDAQ Copenhagen, as well as any presentations based on such financial reports, and any other written information released, or oral statements made, to the public based on this report or in the future on behalf of FLSmidth & Co. A/S, may contain forward looking statements. Words such as believe, expect, may, will, plan, strategy, prospect, foresee, estimate, project, anticipate, can, intend, target and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to: Statements of plans, objectives or goals for future operations, including those related to FLSmidth & Co. A/S markets, products, product research and product development. Statements containing projections of or targets for revenues, profit (or loss), capital expenditures, dividends, capital structure or other net financial items. Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings and statements regarding the underlying assumptions or relating to such statements. Statements regarding potential merger & acquisition activities. These forward-looking statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which may be outside FLSmidth & Co. A/S influence, and which could materially affect such forwardlooking statements. FLSmidth & Co. A/S cautions that a number of important factors, including those described in this report, could cause actual results to differ materially from those contemplated in any forward-looking statements. Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and exchange rate fluctuations, delays or faults in project execution, fluctuations in raw material prices, delays in research and/or development of new products or service concepts, interruptions of supplies and production, unexpected breach or termination of contracts, market-driven price reductions for FLSmidth & Co. A/S products and/or services, introduction of competing products, reliance on information technology, FLSmidth & Co. A/S ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in legislation or regulation and interpretation thereof, intellectual property protection, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign enterprises, unexpected growth in costs and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance. Unless required by law FLSmidth & Co. A/S is under no duty and undertakes no obligation to update or revise any forwardlooking statement after the distribution of this report. 11 Interim report Q1 2018

12 DIVISIONAL PERFORMANCE CUSTOMER SERVICES MARKET DEVELOPMENTS The market for Customer Services saw an overall stable development in Q1, although momentum was stronger in the mining aftermarket than in the cement aftermarket. Demand for parts and services in mining remains healthy across regions and in general, the Americas show a positive development, especially related to gold in North America and copper in South America. Somewhat increased activity in iron ore and lithium as well. Customers show good interest in asset inspections, upgrades and wear products. The cement aftermarket saw some regional shift in demand, for example weakness in North America and strength in Western Europe. Few new plants coming online means limited CUSTOMER SERVICE opportunities for first time spares but good interest in retrofits to reduce the cost of production for existing plants. FINANCIAL PERFORMANCE IN Q Order intake in Q increased 2% to DKK 1,900m and increased 10% adjusted for currency and acquisitions, compared to a strong quarter last year (Q1 2017: DKK 1,861m). The increase was a result of continued good momentum in the mining aftermarket and receipt of some larger mill liner orders. Expansion of wear parts, including mill liners, is a strategic focus area for FLSmidth, and wear parts are expected to contribute increasingly to absolute earnings. They do, however, come with considerably lower margins than spare parts. Revenue decreased 6% to DKK 1,612m in Q (Q1 2017: DKK 1,724m) but increased 2% adjusted for currency effects and acquisitions. Revenue was relatively low in proportion to the order intake in the quarter, which was due to timing and reflected in the DKK 205m order backlog increase. Gross profit, before allocation of shared cost decreased 7% to DKK 513m (Q1 2017: DKK 554m), and the corresponding gross margin fell slightly to 31.8% (Q1 2017: 32.1%). EBITA decreased 15% to DKK 214m (Q1 2017: DKK 251m) and the EBITA margin decreased to 13.3%, (Q1 2017: 14.6%). REVENUE AND BY DIVISION EBITA MARGIN (YTD) () Q Q Change (%) EBITA % Order intake (gross) 1,900 1,861 2% Order backlog 2,465 2,506-2% Revenue 1,612 1,724-6% Gross profit before allocation of shared cost % Gross profit margin before allocation of shared cost 31.8% 32.1% EBITA before allocation of shared cost % EBITA margin before allocation of shared cost 22.9% 22.7% EBITA % EBITA margin 13.3% 14.6% EBIT % EBIT margin 10.7% 12.1% Number of employees 3,879 3,900-1% 2,000 1,800 1,600 1,400 1,200 1, Q Q2 Q3 Q4 Q Revenue Q2 Q3 Q4 Q EBITA margin 18% 15% 12% 9% 6% 3% 0% 12 Interim report Q Divisional performance

13 DIVISIONAL PERFORMANCE PRODUCT COMPANIES MARKET DEVELOPMENTS The market for Product Companies saw a stable development in Q1 for both mining and cement. The activity is still driven predominantly by the aftermarket and smaller equipment orders. The mining capital business continues to see moderately increased interest in upgrade projects but limited activity related to larger capital projects. FINANCIAL PERFORMANCE IN Q The order intake in Q decreased 9% to DKK 1,461m (Q1 2017: DKK 1,597m) and decreased 3% adjusted for currency, compared to a record strong Q1 last year. The first quarter last year included some larger air pollution control orders. Considering both currency effects and the fact that Q contained no large individual orders, the underlying order intake was very robust and a step-up compared to the second half of There has been no larger orders in the past three quarters. The pipeline includes a few potential medium to large orders but timing is uncertain. Revenue increased 3% to DKK 1,315m (Q1 2017: DKK 1,275m) and increased 10% adjusted for currency. Gross profit, before allocation of shared costs decreased 2% to DKK 398m (Q1 2017: DKK 406m), reflecting a different business mix and negative currency effects in the quarter. The corresponding gross margin was 30.3% (Q1 2017: 31.8%), EBITA in Q decreased 11% to DKK 139m (Q1 2017: DKK 157m), and the EBITA margin decreased to 10.6% (Q1 2017: 12.3%). PRODUCT COMPANIES REVENUE AND EBITA MARGIN () Q Q Change (%) Order intake (gross) 1,461 1,597-9% Order backlog 2,776 3,124-11% Revenue 1,315 1,275 3% Gross profit before allocation of shared cost % Gross profit margin before allocation of shared cost 30.3% 31.8% EBITA before allocation of shared cost % EBITA margin before allocation of shared cost 20.5% 21.3% EBITA % EBITA margin 10.6% 12.3% EBIT % EBIT margin 8.7% 10.4% Number of employees 2,734 2,744 0% 1,600 1,400 1,200 1, Q Q2 Q3 Q4 Q Revenue EBITA % Q2 Q3 Q4 Q EBITA margin 15% 12% 9% 6% 3% 0% 13 Interim report Q1 2018

14 DIVISIONAL PERFORMANCE MINERALS MARKET DEVELOPMENTS The recovery in mining capital expenditures continued to materialise in Q1. The activity level increased in the second half of 2017 and the inquiry level in Q1 remained at a higher level. Customers are cautiously looking into new investments, although some projects are delayed due to missing approvals by the authorities. The most active regions are North and South America, Australia, Asia and India. New opportunities in the pipeline relate to gold, copper, lithium and bauxite projects. FINANCIAL PERFORMANCE IN Q The order intake in Q increased 50% to DKK 1,117m, (Q1 2017: DKK 744m) and included the first large minerals order since The order is worth more than DKK 600m and includes key technologies for a fourth copper concentrator to KAZ Minerals in Kazakhstan. Currency effects had a 19% negative impact on order intake in Q1 and the acquisition of part of Sandvik Mining Systems had a 3% positive impact. Revenue in Q1 was impacted by the low order intake in 2016 and the first half of 2017 and increased just 1% to DKK 592m (Q1 2017: DKK 586m). Acquisitions had a 10% positive impact and currency effects a 9% negative impact on revenue in Q1. The recent quarters' strength in order intake did not yet support revenue growth, due to the time lag between order intake and execution. A considerable part of the Minerals backlog which has been on hold for an extended period could be reactivated and contribute to revenue towards the end of 2018 and Gross profit, before allocation of shared cost amounted to DKK 113m (Q1 2017: DKK 101m), and the corresponding gross margin improved to 19.1% (Q1 2017: 17.3%) due to business mix in the quarter. Earnings remained under pressure in Q1 as a result of the weak revenue, and EBITA amounted to DKK -16m (Q1 2017: DKK -37m). MINERALS REVENUE AND EBITA MARGIN () Q Q Change (%) Order intake (gross) 1, % Order backlog 4,447 4,108 8% Revenue % Gross profit before allocation of shared cost % Gross profit margin before allocation of shared cost 19.1% 17.3% EBITA before allocation of shared cost % EBITA margin before allocation of shared cost 9.0% 4.7% EBITA (16) (37) EBITA margin -2.7% -6.3% EBIT (37) (62) EBIT margin -6.2% -10.5% Number of employees 1,228 1,027 20% 1, Q Q2 Q3 Q4 Q Revenue EBITA % Q2 Q3 Q4 Q EBITA margin 5% 0% -5% -10% -15% 14 Interim report Q1 2018

15 DIVISIONAL PERFORMANCE CEMENT MARKET DEVELOPMENTS The market for new cement capacity showed a stable development in Q1. Tendering activity remains subdued with select opportunities in North and East Africa, parts of Asia, Latin America and the Middle East. India continues to show signs of improvement from a low level. With few tenders for large cement projects, FLSmidth is increasingly focusing on equipment sales and upgrades. FINANCIAL PERFORMANCE IN Q The order intake in Q1 declined 57% to DKK 737m (Q1 2017: DKK 1,719m). The comparison quarter included three large orders amounting to more than DKK 1,200m. Revenue decreased 3% to DKK 932m (Q1 2017: DKK 961m) but increased 2% adjusted for currency. Gross profit, before allocation of shared costs amounted to DKK 116m (Q1 2017: DKK 103m), and the corresponding gross margin was 12.5% (Q1 2017: 10.7%). The improvement was a result of good execution combined with our standardisation and procurement initiatives. As a result of the higher gross margin, EBITA increased to DKK 5m (Q1 2017: DKK -18m) and the corresponding EBITA margin was 0.6% (Q1 2017: -1.9%). CEMENT REVENUE AND EBITA MARGIN () Q Q Change (%) Order intake (gross) 737 1,719-57% Order backlog 4,796 6,085-21% Revenue % Gross profit before allocation of shared cost % Gross profit margin before allocation of shared cost 12.5% 10.7% EBITA before allocation of shared cost % EBITA margin before allocation of shared cost 7.4% 5.2% EBITA 5 (18) -128% EBITA margin 0.6% -1.9% EBIT (2) (26) EBIT margin -0.2% -2.7% Number of employees 2,370 2,662-11% 1,800 1,600 1,400 1,200 1, Q Q2 Q3 Q4 Q Revenue EBITA % Q2 Q3 Q4 Q EBITA margin 10% 5% 0% -5% -10% 15 Interim report Q1 2018

16 QUARTERLY KEY FIGURES QUARTERLY KEY FIGURES Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 INCOME STATEMENT Revenue 3,758 4,135 4,774 5,525 4,371 4,585 4,101 4,943 4,235 Gross profit 1,038 1,078 1,164 1,301 1,134 1,164 1,065 1,234 1,074 SG&A costs and other operating items (726) (738) (743) (786) (698) (759) (667) (741) (678) EBITDA before special non-recurring items Special non-recurring items 0 0 (9) (21) 0 0 (4) 55 3 Depreciations and write-downs of tangible assets (66) (67) (68) (68) (64) (63) (58) (83) (56) EBITA Amortisations of intangible assets (93) (96) (101) (118) (100) (105) (102) (93) (95) EBIT Financial income/costs, net (38) (32) 14 2 (34) (94) (101) (82) (35) EBT Tax for the period (36) (45) (70) (86) (60) (51) (38) (230) (66) Profit on continuing activities for the period Loss on discontinued activities for the period (6) (3) (17) (42) (17) (17) (72) (237) (11) Profit/loss for the period (185) 136 Effect of purchase price allocation (60) (60) (60) (60) (55) (55) (55) (55) (40) Gross margin 27.6% 26.1% 24.4% 23.5% 25.9% 25.4% 26.0% 25.0% 25.4% EBITDA margin before special non-recurring items 8.3% 8.2% 8.8% 9.3% 10.0% 8.8% 9.7% 10.0% 9.4% EBITA margin 6.5% 6.6% 7.2% 7.7% 8.5% 7.5% 8.2% 9.4% 8.1% EBIT margin 4.1% 4.3% 5.1% 5.6% 6.2% 5.2% 5.7% 7.5% 5.9% Cash flow Cash flow from operating activities (60) (44) Cash flow from investing activities (12) (95) (43) (44) (35) (65) (69) 56 (42) Order intake, continuing activities (gross) 5,281 4,345 4,133 4,544 5,561 4,580 4,193 4,836 5,018 Order backlog, continuing activities 15,792 15,914 15,174 13,887 14,998 14,115 13,799 13,654 13, Interim report Q Quarterly key figures

17 QUARTERLY KEY FIGURES Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 SEGMENT REPORTING Customer Services Revenue 1,568 1,531 1,670 1,786 1,724 1,709 1,614 1,785 1,612 Gross profit before allocation of shared costs EBITA before allocation of shared costs EBITA EBIT Gross margin before allocation of shared costs 32.3% 33.1% 29.9% 31.2% 32.1% 32.5% 31.8% 32.3% 31.8% EBITA margin before allocation of shared costs 21.9% 22.4% 20.1% 19.8% 22.7% 23.1% 22.0% 23.9% 22.9% EBITA margin 12.6% 13.4% 11.4% 12.5% 14.6% 15.4% 14.1% 14.6% 13.3% EBIT margin 10.3% 11.0% 9.0% 9.4% 12.1% 12.6% 11.3% 12.4% 10.7% Order intake (gross) 1,566 1,597 1,820 1,616 1,861 1,750 1,597 1,759 1,900 Order backlog 2,399 2,405 2,483 2,388 2,506 2,421 2,320 2,260 2,465 Product Companies Revenue 1,078 1,268 1,354 1,315 1,275 1,457 1,317 1,515 1,315 Gross profit before allocation of shared costs EBITA before allocation of shared costs EBITA EBIT Gross margin before allocation of shared costs 33.0% 31.1% 30.8% 33.4% 31.8% 29.6% 30.0% 29.0% 30.3% EBITA margin before allocation of shared costs 21.2% 19.9% 19.3% 21.8% 21.3% 19.4% 20.1% 20.8% 20.5% EBITA margin 10.1% 11.0% 11.9% 11.5% 12.3% 12.2% 10.8% 11.2% 10.6% EBIT margin 7.9% 8.1% 10.7% 9.5% 10.4% 10.3% 8.9% 9.2% 8.7% Order intake (gross) 1,406 1,165 1,317 1,438 1,597 1,554 1,224 1,248 1,461 Order backlog 2,823 2,729 2,681 2,807 3,124 3,128 2,968 2,687 2, Interim report Q1 2018

18 QUARTERLY KEY FIGURES Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 SEGMENT REPORTING (CONTINUED) Minerals Revenue , Gross profit before allocation of shared costs EBITA before allocation of shared costs 48 (9) EBITA (35) (92) (37) 29 (37) (28) (27) 16 (16) EBIT (62) (108) (75) 2 (62) (50) (50) (1) (37) Gross margin before allocation of shared costs 18.9% 13.5% 17.6% 16.6% 17.3% 18.0% 18.3% 18.1% 19.1% EBITA margin before allocation of shared costs 6.9% -1.3% 5.8% 10.5% 4.7% 6.1% 6.2% 11.5% 9.0% EBITA margin -5.0% -13.4% -5.3% 2.7% -6.3% -4.4% -4.9% 1.9% -2.7% EBIT margin -8.8% -15.8% -10.4% 0.2% -10.5% -7.9% -9.0% -0.1% -6.2% Order intake (gross) , ,117 Order backlog 4,229 4,478 4,244 3,988 4,108 3,728 4,013 4,160 4,447 Cement Revenue ,269 1, , , Gross profit before allocation of shared costs EBITA before allocation of shared costs EBITA (21) (18) (68) (3) 8 5 EBIT (28) 7 20 (2) (26) (75) (11) 1 (2) Gross margin before allocation of shared costs 18.5% 15.5% 13.3% 11.4% 10.7% 9.6% 11.8% 12.8% 12.5% EBITA margin before allocation of shared costs 7.9% 8.8% 7.2% 5.0% 5.2% 0.2% 6.5% 7.5% 7.4% EBITA margin -3.7% 1.5% 2.1% 0.4% -1.9% -6.7% -0.2% 0.7% 0.6% EBIT margin -5.0% 0.7% 1.6% -0.2% -2.7% -7.4% -1.1% 0.1% -0.2% Order intake (gross) 2, ,026 1,719 1, , Order backlog 7,016 6,962 6,382 5,349 6,085 5,672 5,274 5,193 4, Interim report Q1 2018

19 QUARTERLY KEY FIGURES RETURN ON CAPITAL EMPLOYED EBITA Q (38) Net currency effect EBITA BRIDGE Development from Q to Q (22) Gross Profit Gross Profit from revenue from Contribution (21) (8) Sales costs Administrative costs Other operating items Special nonrecurring items Depreciation of tangible assets 343 EBITA Q ,000 1,800 1,600 1,400 1,200 1, ,833 (60) 100 (335) NWC Q Net currency effect NET WORKING CAPITAL BRIDGE Development from Q to Q Inventory Work-in-progress, net (371) Trade receivables ,590 Prepayments, net Trade payables Other NWC Q ROCE BREAKDOWN Q (Q1 2017) ROCE 10.4% (9.4%) RETURN (EBITA) 1) 1,486 (1,415) CAPITAL EMPLOYED 3) 14,326 (14,993) REVENUE 1) 17,865 (18,805) GROSS MARGIN 1) 25.4% (24.9%) COST 1+2) -3,050 (-3,262) NWC 3) 1,886 (2,296) TANGIBLE ASSETS 3) 2,347 (2,508) INTANGIBLE ASSETS 3+4) 10,093 (10,189) 1) Last 12 months trailing 2) Cost consist of SG&A, depreciations and special non-recurring items 3) Average values 4) Measured at cost value 19 Interim report Q1 2018

20 STATEMENT BY MANAGEMENT STATEMENT BY MANAGEMENT The Board of Directors and Executive Management have today considered and approved the interim report of FLSmidth & Co. A/S for the period 1 January - 31 March The interim report is prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU and Danish disclosure requirements for interim reports of listed companies. The interim report has not been audited or reviewed by the Group s independent auditors. In our opinion, the interim report gives a true and fair view of the Group s financial position at 31 March 2018 as well as of its financial performance and its cash flow for the period 1 January - 31 March We believe that the management commentary contains a fair review of the development of the Group s business and financial affairs, the result for the period and the financial position of the Group, together with a description of the principal risks and uncertainties that the Group faces. EXECUTIVE MANAGEMENT Thomas Schulz Group CEO Lars Vestergaard Group Executive Vice President and CFO BOARD OF DIRECTORS Vagn Sørensen Chairman Tom Knutzen Vice Chairman Marius Jacques Kloppers Caroline Grégoire Sainte Marie Richard Robinson Smith Anne Louise Eberhard Mette Dobel Søren Quistgaard Larsen Claus Østergaard 20 Interim report Q Statement by Management

21 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT Notes Q Q , 2 Revenue 4,235 4,371 Production costs (3,161) (3,237) Gross profit 1,074 1,134 Sales costs (355) (364) Administrative costs (334) (343) Other operating items 11 9 EBITDA before special non-recurring items Special non-recurring items 3 0 Depreciations and write-downs of tangible assets (56) (64) EBITA Amortisations of intangible assets (95) (100) EBIT Financial income Financial costs (365) (407) EBT Tax for the period (66) (60) Profit for the period, continuing activities Loss for the period, discontinued activities (11) (17) Profit for the period To be distributed as follows: FLSmidth & Co. A/S shareholders' share of profit for the period Minority shareholders' share of profit for the period Earnings per share (EPS): Continuing and discontinued activities per share Continuing and discontinued activities per share, diluted Continuing activities per share Continuing activities per share, diluted Interim report Q Consolidated financial statements

22 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Notes Q Q Profit for the period Other comprehensive income for the period Items that will not be reclassified to profit or loss: Actuarial gains/(losses) on defined benefit plans (1) - Tax hereof 0 - Items that are or may be reclassified subsequently to profit or loss: Foreign exchange adjustments regarding enterprises abroad (195) 72 Value adjustments of hedging instruments: - Value adjustments for the period Value adjustments transferred to financial income and costs 0 (1) Tax hereof 11 3 Other comprehensive income for the period after tax (174) 93 Comprehensive income for the period (38) 254 Comprehensive income for the year attributable to: FLSmidth & Co. A/S shareholders' share of comprehensive income for the period (38) 252 Minority shareholders' share of comprehensive income for the period 0 2 (38) Interim report Q1 2018

23 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED CASH FLOW STATEMENT Q Q EBITDA, continuing activities EBITDA, discontinued activities (11) (24) EBITDA Adjustment for gain/(losses) on sale of tangible and intangible assets and special non-recurring items etc Adjusted EBITDA Change in provisions (85) 19 Change in net working capital 142 (160) Cash flow from operating activities before financial items and tax Financial items received and paid (4) (5) Taxes paid (101) (128) CFFO Acquisitions of enterprises and activities 10 0 Acquisitions of intangible assets (8) (15) Acquisitions of tangible assets (56) (22) Acquisitions of financial assets (19) 0 Disposal of financial assets 13 0 Disposal of tangible assets 18 2 CFFI (42) (35) Addition of minority shares 0 5 Exercise of share options Change in net interest-bearing debt (379) (385) CFFF (340) (321) Change in cash and cash equivalents (39) (207) Cash and cash equivalents at beginning of period 1,425 1,513 Foreign exchange adjustment, cash and cash equivalents (43) 22 Cash and cash equivalents at 31 March 1,343 1,328 Cash and cash equivalents included in assets held for sale Cash and cash equivalents 1,311 1,280 Cash and cash equivalents at 31 March 1,343 1,328 The cash flow statement cannot be inferred from the published financial information only 23 Interim report Q1 2018

24 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET Notes ASSETS End of Q End of 2017 Goodwill 4,116 4,218 Patents and rights 1,091 1,121 Customer relations Other intangible assets Completed development projects Intangible assets under development Intangible assets 6,416 6,633 Land and buildings 1,530 1,597 Plant and machinery Operating equipment, fixtures and fittings Tangible assets in course of construction Tangible assets 2,175 2,248 Other securities and investments Deferred tax assets 1,091 1,094 Financial assets 1,170 1,173 Total non-current assets 9,761 10,054 Inventories 2,375 2,332 Trade receivables 3,843 4,324 4 Work-in-progress for third parties 1,977 2,297 Prepayments to subcontractors Tax receivables Other receivables Receivables 7,451 8,173 Cash and cash equivalents 1,311 1,382 Assets classified as held for sale Total current assets 11,588 12,310 Notes EQUITY AND LIABILITIES End of Q End of 2017 Share capital 1,025 1,025 Foreign exchange adjustments (517) (322) Value adjustments of hedging transactions (22) (33) Retained earnings 7,124 6,920 Proposed dividend FLSmidth & Co. A/S shareholders' share of equity 8,020 8,000 Minority shareholders' share of equity Total equity 8,058 8,038 Deferred tax liabilities Pension liabilities Provisions Bank loans and mortgage debt 1,826 1,830 Prepayments from customers Other liabilities Total non-current liabilities 2,957 3,083 Pension liabilities Provisions 1,006 1,124 Bank loans and mortgage debt 699 1,120 Prepayments from customers 1,385 1,571 4 Work-in progress for third parties 1,743 1,730 Trade payables 2,845 2,916 Current tax liabilities Other liabilities 1,480 1,623 Total current liabilities 9,696 10,613 Liabilities directly associated with assets classified as held for sale Total liabilities 13,291 14,326 Total equity and liabilities 21,349 22,364 Total assets 21,349 22, Interim report Q1 2018

25 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED EQUITY Share capital Value Foreign adjustment of exchange hedging adjustments transactions Retained earnings Proposed dividend FLSmidth & Co A/S shareholders' share Equity at 1 January ,025 (322) (33) 6, , ,038 Minority interests' share Total Changes in accounting policies, IFRS Tax on changes in accounting policies, IFRS 15 (1) (1) (1) Comprehensive income for the period Profit for the period Other comprehensive income Actuarial gains/(losses) on defined benefit plans (1) (1) (1) Foreign exchange adjustment regarding enterprises abroad (195) (195) (195) Value adjustments of hedging instruments: - Value adjustments for the period Tax on other comprehensive income Other comprehensive income total 0 (195) (174) 0 (174) Comprehensive income for the period 0 (195) (38) 0 (38) Share-based payment Exercise of share options Equity at 31 March ,025 (517) (22) 7, , , Interim report Q1 2018

26 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED EQUITY - continued Share capital Value Foreign adjustment of exchange hedging adjustments transactions Retained earnings Proposed dividend FLSmidth & Co A/S shareholders' share Equity at 1 January , (112) 7, , ,462 Minority interests' share Total Comprehensive income for the period Profit for the period Other comprehensive income Foreign exchange adjustment regarding enterprises abroad Value adjustments of hedging instruments: - Value adjustments for the period Value adjustments transferred to financial income and costs (1) (1) (1) Tax on other comprehensive income Other comprehensive income total Comprehensive income for the period Dividend distributed 12 (307) (295) 0 (295) Share-based payment Exercise of share options Addition of minority shares Equity at 31 March , (94) 7, , , Interim report Q1 2018

27 NOTES TO THE INTERIM REPORT 1. SEGMENT INFORMATION FOR Q Customer Services Product Companies Minerals Cement Shared costs¹) Other companies etc.²) Continuing activities Discontinued activities³) External revenue 1,593 1, , ,323 Internal revenue (216) 0-0 Revenue 1,612 1, (216) 4, ,323 Production costs (1,099) (917) (479) (816) (68) 218 (3,161) (86) (3,247) Gross profit (68) 2 1, ,076 SG&A costs (126) (114) (58) (46) (310) (24) (678) (13) (691) EBITDA before special non-recurring items (378) (22) 396 (11) 385 Special non-recurring items Depreciations and write-downs of tangible assets (17) (15) (4) (1) (17) (2) (56) (56) EBITA before allocation of shared costs (395) (24) 343 (11) 332 Allocation of shared costs (156) (130) (70) (64) EBITA (16) (11) 332 Amortisations of intangible assets (42) (25) (21) (7) (95) - (95) EBIT (37) (2) (11) 237 FLSmidth Group Order intake (gross) 1,900 1,461 1, (197) 5, ,024 Order backlog 2,465 2,776 4,447 4,796 (610) 13, ,507 Gross margin 31.8% 30.3% 19.1% 12.5% N/A 25.4% N/A 24.9% EBITDA margin before special non-recurring items 24.0% 21.6% 9.3% 7.5% N/A 9.4% N/A 8.9% EBITA margin before allocation of shared costs 22.9% 20.5% 9.0% 7.4% N/A - N/A - EBITA margin 13.3% 10.6% -2.7% 0.6% N/A 8.1% N/A 7.7% EBIT margin 10.7% 8.7% -6.2% -0.2% N/A 5.9% N/A 5.5% Number of employees 3,879 2,734 1,228 2,370 1,445 11, ,790 Reconciliation of profit/(loss) for the period EBIT 248 (11) Financial income Financial costs (365) (1) EBT 213 (11) 1) Shared costs consists of costs that are managed on country or Group level and subsequently allocated to the divisions 2) Other companies etc. consist of companies with no activity, real estate companies, eliminations and the parent company. 3) Discontinued activity mainly consist of bulk material handling. 27 Interim report Q Notes to the Interim report