FLSmidth reports 55% increase in 1Q EBITA

FLSmidth posted a 1Q24 total revenue of DKK4839m, down 19.6 per cent YoY from DKK6016m. Total order intake was down 6.8 per cent YoY to DKK5248m from DKK5632m. However, EBITA increased by 55.3 per cent to DKK365m in the 1Q24 from DKK235m. The EBITA margin stood at 7.5 per cent.

Cement
Cement order intake was down 22.5 per cent YoY to DKK1042m in the 1Q24 from DKK1344m in the 1Q23. Product order intake fell by 40 per cent YoY, partly due to the continued reduction in its portfolio and exit of larger projects with a significant risk profile and lower margins as well as divested businesses. The service order intake declined by 11 per cent YoY, due to the divestments of the AFT business in the 3Q23, the sale of the MAAG business on 1 March 2024 and exit from selected markets. In terms of geographical distribution, 28 per cent of order originated in the USA, 20 per cent were exports, 14 per cent from Turkey, 13 per cent from Denmark and 11 per cent from Brazil. Orders in India, Indonesia and China accounted for minor shares of seven, four and two per cent, respectively.

The company reported a 23.6 per cent drop in cement business revenue to DKK1208m in the 1Q24 from DK1582m in the year-ago period. Of this total 60 per cent was attributed to Products, up from 56 per cent in the equivalent period of the previous year. Cement EBITA declined 16.2 per cent YoY to DKK57m in the 1Q24 from DKK68m in the 1Q23. The EBITA margin was 4.7 per cent.

The number of employees in Cement was reduced by 896 compared with the 1Q23, a reflection of its continued optimisation of the company’s global footprint, simplification of the operating model to improve operations and long-term profitability as part of the separation of the Mining and Cement businesses as well as the divestments of the AFT business completed in Q3 2023 and the MAAG business completed on 1 March 2024, said the company.

Mining
In its mining business revenue was down 14.4 per cent YoY to DKK3581m in the 1Q24 from DKK4185m in the 1Q23 while order intake remained stable at DKK4176m. Mining products account for 67 per cent of revenue and services 33 per cent. EBITA increased 35 per cent YoY to DKK370m in the 1Q24 from DKK274m in the year-ago period with the EBITA margin at 10.3 per cent.

Outlook
FLSmidth maintains its financial guidance for 2024 with group revenue forecast at DKK20.0-21.5bn. The company’s EBITA is expected to be between 7.5-8.5 per cent (adjusted: 9-10 per cent).

Cement revenue is expected to reach DKK4-4.5bn while mining revenue is forecast at DKK16-17bn. Adjusted EBITA margins for cement and mining are expected to reach 5.5-6.5 and 11.5-12.5 per cent, respectively.