FLSmidth & Co Group reports declining revenue in its 2Q24 interim report

In the 2Q24 FLSmidth's group revenue decreased by 23 per cent (-20 per cent if excluding currency effects and effects from divestments). Gross profit increased by five per cent to DKK1579m (US$233m), compared to DKK1497m in the 2Q23, corresponding to a gross margin of 31.8 per cent.

The gross margin reflects good execution of higher-margin orders as a result of FLSmidth's de-risking strategy, partly offset by the lower revenue, says teh company. Excluding transformation and separation costs of DKK75m, the adjusted EBITA margin was 10.2 per cent in the 2Q24. Including these items, the EBITA margin was 8.7 per cent compared to 5.2 per cent in the 2Q23. Cash flow from operating activities (CFFO) amounted to DKK14m.

Cement performance
FLSmidth announced that its cement revenue decreased by 32 per cent in the 2Q24 compared to the 2Q23 (-24 per cent if excluding currency effects and effects from divestments). Service revenue decreased by 26 per cent due to effects from divestments. 

In the 2Q24 FLSmidth's cement order intake decreased by 21 per cent compared to 2Q23 (-16 per cent if excluding currency effects and effects from divestments). Service order intake increased by one per cent driven by spare parts and professional services within the company's core market clusters partly offset by upgrades and retrofits.

FLSmidth reported that in the 2Q24 cement service order intake growth in core market clusters partly offset the impacts from de-risking and divestments. Cement adjusted EBITA margin of 9.6 per cent reflected strong margin execution.

Other divisions
Mining revenue decreased by 13 per cent compared to the 2Q23 (-12 per cent if excluding currency effects). 

Non core activities (NCA) revenue amounted to DKK44m. Gross profit was negative and amounted to DKK-35m, reflecting the general volatility and operationally loss-making nature of the segment. EBITA amounted to DKK-99m.

Group CEO, Mikko Keto, commented: “Looking ahead, the resilience of our service-oriented business model, our continued focus on business simplification to ensure a cost-efficient operating model and our dedicated focus on strategy execution gives us great confidence that we are well on track to meet our long-term financial ambitions for both mining and cement.”