Annual Report 2010 - Falck

28 Falck Annual Report 2010 | Management review
Financial review
Falck’s revenue grew by 11.1% in 2010 to DKK 8,367 million of
which organic growth accounted for 5.1%. The revenue growth
and organic growth met Management’s expectations. The
percentage of Group revenue generated outside Denmark rose
to 36.7% (2009: 34.6%), as the growth rate for markets outside
Denmark was 18.2%, of which organic growth accounted for
6.7%. The rate of organic growth in Denmark was 4.2%.
Operating profit before costs and amortisation from businees
combinations and exceptional items (EBITA) was DKK 839 million
(2009: DKK 721 million) and was on a level with Management’s
quidance. This brought EBITA growth to 16.3%, which
met Management’s expectations as the EBITA margin increased
to 10.0%. This was attributable to growth in the Emergency,
Healthcare and Training business areas. The Assistance business
experienced a substantial adverse impact from the long periods
of severe winter weather in January/February and November/
December, resulting in a major increase in the number of
responses.
Profit for the year rose by 9.8% to DKK 458 million (2009: DKK
417 million).
Falck generated a free cash flow of DKK 842 million in 2010
(2009: DKK 1,096 million), representing a cash conversion rate
of 100.4% (2009: 152.0%) in terms of conversion of EBITA into
cash.
The ratio of net debt to EBITDA dropped from 2.64x in 2009
to 2.48x in 2010, which was attributable to the increase in
earnings and the cash flow generated.
Change in accounting policies
A number of new financial reporting standards and interpretations
have been implemented with effect for the financial year
2010.
With the exception of the implementation of IFRS 3 Business
Combinations, and IAS 27 Consolidated and Separate Financial
Statements, the implementation of these financial reporting
standards, improvements and interpretations has not affected
recognition and measurement in 2010. The effect of IFRS 3 and
IAS 27 was a reduction of profit for the year by DKK 22 million,
a reduction of equity and the balance sheet (goodwill) by DKK
49 million and diluted earnings per share by DKK 0.2.
See note 1 to the consolidated financial statements for a
complete overview of new financial reporting standards and
interpretations implemented with effect for the financial year
2010.
Basis of presentation
The financial review is based on the financial highlights and key
ratios on page 6 and cannot be derived directly from the consolidated
financial statements.
Group performance in 2010
Consolidated income statement
Consolidated revenue for 2010 was DKK 8,367 million, equivalent
to a growth rate of 11.1%, of which organic growth accounted
for 5.1%. During the past five years, revenue has grown
by an average of 12.1%, of which organic growth accounted for
7.1%.
Other operating income amounted to DKK 70 million (2009:
DKK 41 million). The increase in 2010 was attributable to gains
on sales of properties in Denmark.
EBITA was DKK 839 million (2009: DKK 721 million), equivalent
to an EBITA margin of 10.0% (2009: 9.6%).
Revenue and Organic growth
DKK million %
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2006 2007 2008 2009 2010
Organic growth Revenue
10
9
8
7
6
5
4
3
2
1
0