FLSmidth Minor model adjustments
We have updated our estimates, owing to recent peer reports and slightly lower than expected pre-announced orders for Q2. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our DKK370 target price. Estimate changes. We have lowered our 2019–2021e EPS by an average of 2%. The changes relate to the Mining and Cement divisions. Q2 results due at 8:00 CET on 8 August. Our Q2 order intake, sales and EBITA estimates are in line with consensus (company-compiled). FLS guides for DKK19bn–21bn of sales, 9–10% EBITA margin and ROCE of 12–14% for 2019. The outlook is for good demand for mining equipment and projects, a healthy level of mid-sized cement order opportunities, and only a few tenders for large orders, where margins remain low. An investor call will be held at 11:00 CET on 8 August. To access, dial 1.FLSmidth & Co. is a supplier of equipment and services to the global cement and minerals industries with a local presence in 50 countries including project and technology centers in Denmark, India, USA and Germany. Co. supplies everything from single machinery to complete cement plants and minerals processing solutions including services before, during and after the construction. Co.'s in-house resources are primarily engineers who develop, plan, design, install and service equipment, with most of the manufacturing being outsourced to subcontractors.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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