FLSmidth reports 6% rise in cement revenue in 1Q23

In the 1Q23 FLSmidth’s cement revenue increased by six per cent excluding currency effects, and by nine per cent excluding Russia, when compared to the 1Q22. Cement EBITA continued the positive trend and increased by 28 per cent compared to the equivalent period in 2022. The corresponding Cement EBITA margin was 4.3 per cent in the 1Q23.

Consolidated group revenue increased by 27 per cent excluding currency effects, and by 39 per cent excluding Russia, compared to the 1Q22. When adjusting for Russia and Mining Technologies the underlying revenue growth in the quarter was approximately 20 per cent. In line with expectations, the quarter included DKK249m (US$36.5m) in revenue from non-core activities. The adjusted EBITA margin for the group was six per cent in the 1Q23. Including integration costs, the group EBITA margin was 3.9 per cent in the 1Q23.

Cement order intake in the 1Q23 declined by 29 per cent excluding currency effects. This development mainly reflects a 42 per cent decrease in products order intake compared to the 1Q22, which included several sizeable orders, as well as FLSmidth’s de-risking strategy. 

Group CEO, Mikko Keto, commented: “We have had a good start to the year. The key transformation efforts, which we initiated last year, positively impacted our performance in the first quarter of 2023. Our mining business saw good underlying development in both revenue and profitability, reflecting our increased focus on the Service business and our continued de-risking approach. Our cement business’ profitability has continued to benefit from our operating model simplification efforts and our increased focus on key markets. We are pleased with how our transformation journey has progressed during the first quarter of 2023, including the accelerated pace of the synergy takeout from the Mining Technologies integration and the non-core activities exit, as successful execution of these is essential in our journey to improve our long-term profitability.”

Mining revenue increased by 28 per cent excluding currency effects in the 1Q23. Adjusting for the company's exit of Russia, the establishment of the non-core Activities segment and the acquisition of Mining Technologies, the underlying mining revenue growth in the quarter was approximately 29 per cent. 

Order intake for non-core activities amounted to DKK111m. Mining order intake declined by 20 per cent excluding currency effects. When adjusting for Russia, non-core activities and Mining Technologies, the underlying mining order intake in the quarter declined approximately 23 per cent.