WE DISCOVER POTENTIAL
CVR No. 58180912
INTERIM
REPORT
9M 2021
1 January –
30 Spetember 2021
Company announcement no. 17
FLSmidth
Interim Report 9M 2021 2
Management Review
Management Review
3
6
7
10
12
14
16
Consolidated Condensed
Interim Financial
Statements
18
18
19
20
21
Notes
22
22
23
24
25
25
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27
27
28
28
28
Statements
29
CONTENTS
Towards zero emissions
in mining and cement
Read more on page 5
FLSmidth
Interim Report 9M 2021 3
Management Review
Highlights Q3 2021
Order intake increased 14% organically year-
on-year, driven by both Mining and Cement.
Service orders increased 26%
Revenue increased 21% organically, attributa-
ble to both Mining and Cement and driven by
an increase in capital revenue
EBITA was up by 72% and the EBITA margin in-
creased from 4.6% to 6.5%, driven by both Min-
ing and Cement
Q3 included costs in Mining of DKK 30m re-
lated to the acquisition of TK Mining
The net working capital ratio increased to
10.4% in Q3, which is slightly below the level
seen at the beginning of the year. Free cash
flow was negative at DKK -253m
Successful issue of new shares, raising pro-
ceeds of DKK 1.4bn, leaving the financial gear-
ing at 0.0x
Mining
Mining order intake increased 13% organi-
cally, mainly driven by a 19% increase in ser-
vice orders, which accounted for 62% of
Mining order intake.
Revenue increased by 20% organically. The
EBITA margin increased to 9.5% from 9.0%
in Q3 2020. Adjusted for acquisition costs,
the EBITA margin was 10.4%.
Cement
Cement order intake increased 17% organi-
cally, with a 44% increase in service orders.
Service orders accounted for 71% of Ce-
ment order intake.
Revenue increased by 22% organically and
EBITA was positive for the first time since
Q1 2020. EBITA margin was 0.2% com-
pared to -4.8% in Q3 2020, supported by
higher revenue and lower costs related to
reshaping activities. The EBITA margin im-
proved despite a significantly lower share
from service revenue compared to Q3
2020.
Highlights 9M 2021
Order intake increased 5% organically, driven
by Cement and increased base orders in Min-
ing, whereas 9M 2020 included a higher level
of large Mining orders. Service orders in-
creased 12%
Revenue increased 4% organically, comprising
an 8% increase in Mining and a 4% decline in
Cement compared to 9M 2020
EBITA margin increased to 5.6% from 4.4% in
9M 2020, positively impacted by business im-
provement activities. Adjusted for acquisition
costs, the EBITA margin was 6.1% in Q3 2021.
Guidance 2021
FLSmidth maintains its guidance for group
revenue of DKK 16.0-17.0bn and a group
EBITA margin of 5-6%. The guidance in-
cludes costs related to the acquisition of
at around DKK 100m for the full year. Mining
revenue is expected to grow in 2021 and
the EBITA margin for Mining is expected to
be high-single digit for the full year. Cement
revenue is expected to decline for the full
year. The Cement business is not expected
to be EBITA positive in 2021 due to reshap-
ing costs and low-capacity utilisation in the
service business, particularly related to the
impact of the pandemic in H1. The guidance
is subject to uncertainty due to the pan-
demic.
Group CEO succession
Effective 1 January 2022, Mikko Keto has
been appointed new Group CEO (see com-
pany announcement 16-2021).
Third quarter saw strong momentum in order intake. In particular for ser-
vice orders, as activity in the mining industry continues to gather pace
with pandemic restrictions easing globally. The cement industry is like-
wise emerging from the pandemic with improved service activity and
growing demand for greener solutions. Revenue grew strongly as well
and EBITA increased by 72% with an improved EBITA margin in both Min-
ing and Cement. Our Cement reshaping activities have progressed well
and EBITA in Cement was positive for the first time since Q1 2020.
Following five consecutive quarters of improvement, the net working
capital increased in Q3 as expected, driven primarily by a high activity
level towards the end of the quarter. We successfully completed a di-
rected issue of new shares, raising proceeds of DKK 1.4bn to fund the ac-
quisition of TK Mining
1
, in combination with debt facilities. This was an im-
portant milestone in creating one of the world’s largest, strongest and
most sustainable suppliers to the mining industry.
- Thomas Schulz, Group CEO
1
Closing of the transaction is expected in H2 2022 and is subject to customary approvals from relevant authorities.
HIGHLIGHTS
Guidance 2021
9M
2021
Guidance
2021
Highlights Highlights
FLSmidth
Interim Report 9M 2021 4
Management Review
FINANCIAL HIGHLIGHTS
Order intake
DKKm
Revenue
DKKm
EBITA & EBITA margin
DKKm - %
Cash flow from operating activities
DKKm (192) from DKKm 594 in Q3 2020
GROUP
4,549
15%
4,660
22%
305 6.5%
72%
Earnings per share
DKK 1.8 from DKK 0.8 in Q3 2020
Net working capital ratio
10.4% from 10.9% end of Q3 2020
NIBD/EBITDA
0.0x from 1.4x end of Q3 2020
Order intake
DKKm
Revenue
DKKm
EBITA & EBITA margin
DKKm - %
Revenue split by service & capital
%
MINING
3,152
14%
3,180
22%
302 9.5%
29%
Order intake
DKKm
Revenue
DKKm
EBITA & EBITA margin
DKKm - %
Revenue split by service & capital
%
CEMENT
1,397
17%
1,480
22%
3 0.2%
105%
13,829
14,149
3,955
4,549
9M
2020
9M
2021
Q3
2020
Q3
2021
12,205
12,446
3,834
4,660
9M
2020
9M
2021
Q3
2020
Q3
2021
536
692
177
305
9M
2020
9M
2021
Q3
2020
Q3
2021
2,766
3,152
Q3
2020
Q3
2021
2,616
3,180
Q3
2020
Q3
2021
235
302
Q3
2020
Q3
2021
55%
Q3 2020:
64%
45%
Q3 2020:
36%
Service
Capital
1,189
1,397
Q3
2020
Q3
2021
1,218
1,480
Q3
2020
Q3
2021
(57)
3
Q3
2020
Q3
2021
47%
Q3 2020:
60%
53%
Q3 2020:
40%
Service
Capital
FLSmidth
Interim Report 9M 2021 5
Management Review
MissionZero developments
Through our sustainability pro-
gramme MissionZero, we de-
velop and deliver solutions that
enable our customers to operate
with zero emissions by 2030.
With both governments and our customers set-
ting more ambitious sustainability targets, we
are also accelerating our efforts to bring new
technologies to the markets, both through our
R&D organization and in partnership with oth-
ers.
During Q3, we successfully launched the first
commercial offering for carbon capture in col-
laboration with Carbon8 Systems. Also in Q3,
we entered a second partnership joining
forces with American, Chart Industries, Inc. to
Cryogenic
Carbon Capture
TM
(CCC) for our cement cus-
tomers.
MissionZero Mine concept
At the recent MINExpo Conference in Las Ve-
gas, FLSmidth introduced the concept of the
MissionZero Mine. We aim, through solutions
and technology, to help miners produce more
with less resource use and a smaller footprint.
The MissionZero Mine concept supports our
customer engagement within sustainability,
modelling the potential impact of replacing a
traditional wet milling circuit, standard flotation
cells and cyclone sand tailings dam with the
MissionZero Mine flowsheet.
Mining operation benefits from automated lab
Key factors in unlocking sustainable resource
use in mining include data optimisation, digitali-
sation and automation. They allow miners to un-
cover efficiencies throughout their operations,
from rejecting non-ore carrying material early in
the process to minimising waste, freshwater re-
quirements and energy use.
A customer developing a new mine in Western
Australia opted for end-to-end automation to
achieve higher levels of productivity in its labora-
tory. Rapid, accurate, high-quality and reliable
analysis of samples onsite eliminated the need to
transport samples to Perth, more than 1500 km
away. This reduced safety hazards in the labora-
tory, as well as cutting the carbon footprint and
enabling processes to be optimised through ac-
curate material sampling. For the overall mining
operations, this results in lower production costs,
less waste, increased efficiency, reduced trans-
portation, and a minimised environmental foot-
print.
New greenfield project in India includes Mis-
sionZero flagship equipment
An increased demand for sustainable productiv-
ity and emissions control is reflected in a recent
contract by one of India's top three cement pro-
ducers, Shree Cement. The scope includes an
OK
TM
Cement mill, boasting around five to ten
percent less power consumption compared with
other cement vertical roller mills, and a JETFLEX®
Burner, which offers the lowest NOx emissions.
The new line in Rajasthan will include a state-of-
the-art pyro system and grinding sections both
part of our MissionZero offerings.
SUSTAINABILITY HIGHLIGHTS
Safety (TRIR)
Total Recordable Injury Rate/
million working hours
Women managers
%
1.8
Target: zero harm (10% y-o-y reduction through 2030)
14.1
2021 Target: 14.3%
Several actions and events held in September to reinforce
performance on safety. Good trend in implementing ac-
tions related to near-miss and safety observations.
Q3 results demonstrate our continued focus on attracting
more female applicants and ensuring a safe and inclusive
workplace.
Water withdrawal
m
3
Greenhouse gas emissions
(CO
2
emissions)
Tonnes
144,126
2021 Target: 187,479
24,728
2021 Target: 38,685
Water withdrawal increased during Q3 mostly related to
increased operational activities including testing work and
organised maintenance events.
Both scope 1 and scope 2 emissions increased due to in-
creased operational activities across in our main produc-
tion sites. Fuel consumption increased, especially in North
American sites.
1.0
1.8
2020
9M
2021
13.1%
14.1%
2020
9M
2021
197,346
144,126
2020
9M
2021
41,155
24,728
2020
9M
2021
FLSmidth
Interim Report 9M 2021 6
Management Review
KEY FIGURES
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
2020
INCOME STATEMENT
ORDERS
EARNING RATIOS
CASH FLOW
BALANCE SHEET
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
2020
FINANCIAL RATIOS
SHARE RATIOS
SUSTAINABILITY KEY FIGURES
Use of alternative performance measures
FLSmidth
Interim Report 9M 2021 7
Management Review
GROWTH
Group order intake increased 14%
organically year-on-year, driven by
both Mining and Cement. Service
orders increased by 26% as a re-
sult of improved access to cus-
tomer sites and our strong local
presence. Group revenue in-
creased 21% organically, attributa-
ble to both Mining and Cement.
Order intake
Order intake in Q3 increased 15% to DKK 4,549m
(Q3 2020: DKK 3,955m) and by 14% organically,
related to both Mining and Cement. Based on im-
proved site access and our strong local pres-
ence, service orders increased by 26% and ac-
counted for 65% of the total order intake in Q3
2021. Capital order intake decreased by 1% in Q3
2021 and included a large lithium order valued
around DKK 200m (Q3 2020: No large orders).
In Q4 2021, FLSmidth has received a large order
for a gold project valued at approximately DKK
350m.
Order backlog and maturity
The order backlog at the end of Q3 2021 was
12% above the level at the end of Q3 2020, but
was down 1% on the previous quarter to DKK
16,548m (Q2 2021: DKK 16,677m), based on a
book-to-bill of 98% in the quarter. It is expected
that 23% of the backlog will be converted to rev-
enue in 2021, 57% in 2022, and 20% in 2023 and
beyond.
Backlog maturity
Mining
Cement
FLSmidth
Group
Revenue
Revenue increased 22% to DKK 4,660m in Q3
2021 (Q3 2020: DKK 3,834m), driven primarily by
an increase in capital revenue. Service revenue
accounted for 52% of the total revenue during
the quarter (Q3 2020: 62%).
Organically, revenue increased 21%, related to
both Mining and Cement. The increase was a re-
sult of a higher order backlog, the easing pan-
demic, improved site access and our ability to
deliver in a challenging environment.
The impact from capacity constraints in global
transportation was low in the third quarter based
on
partnerships with our suppliers. We have the flex-
ibility to switch between suppliers, and we have
focused on more localised sourcing. We are still
able to get orders shipped, however, we see in-
creasing delays and instability on some routes.
We are mitigating this through further monitoring
and planning, including the use of artificial intelli-
gence to track the best routes.
FLSmidth
Interim Report 9M 2021
QUARTERLY FINANCIAL PERFORMANCE
Order intake
DKKm
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Mining Cement
Growth in order intake in Q3 2021
(vs. Q3 2020)
Mining
Cement
FLSmidth
Group
Total growth
14%
17%
15%
Growth in revenue in Q3 2021
(vs. Q3 2020)
Mining
Cement
FLSmidth
Group
Total growth
22%
22%
22%
Group – continued activities
(DKKm)
Q3 2021
Q3 2020
Change (%)
9M 2021
9M 2020
Change (%)
Order intake (gross)
4,549
3,955
15%
14,149
13,829
2%
Order backlog
16,548
14,839
12%
16,548
14,839
12%
Revenue
4,660
3,834
22%
12,446
12,205
2%
Gross profit
1,074
884
21%
3,029
2,843
7%
SG&A cost
(682)
(629)
8%
(2,065)
(2,046)
1%
EBITA
305
177
72%
692
536
29%
EBIT
219
91
141%
429
283
52%
FLSmidth
Interim Report 9M 2021 8
Management Review
PROFIT
Gross profit increased by 21% and
EBITA increased by 72% as a result
of higher revenue and operating
leverage. The EBITA margin im-
proved to 6.5%, driven by both
Mining and Cement. EBITA in Ce-
ment was positive for the first time
since Q1 2020.
Gross profit and margin
Gross profit increased 21% to DKK 1,074m (Q3
2020: DKK 884m), due to higher revenue. Sup-
ported by Cement reshaping activities, the gross
margin was largely maintained at 23.0%, despite
headwinds from a 10%-points higher share from
capital revenue.
In Q3 2021, total research and development
costs (R&D) amounted to DKK 78m (Q3 2020:
DKK 52m), representing 1.7% of revenue (Q3
2020: 1.4%).
R&D costs (DKKm)
Q3 2021
Q3 2020
R&D costs in Q3 were largely related to new and
improved sustainable and digital cement and
mining technologies as well as a range of new
mining products and upgrades to improve
productivity and safety. In addition to the re-
ported R&D, products and solutions are being
developed on-site in cooperation with customers
in the ordinary course of business.
SG&A costs
Sales, general and administrative costs (SG&A)
and other operating items declined 7% compared
to Q2 2021 but increased 8% year-on-year to
DKK 682m (Q3 2020: DKK 629m), explained by
slightly higher sales costs, costs related to the
acquisition of TK Mining of DKK 30m and modest
costs related to Cement reshaping activities in
the quarter. SG&A costs as a percentage of reve-
nue declined to 14.6% (Q3 2020: 16.4%).
EBITA and EBITA margin
EBITA increased by 72% to DKK 305m (Q3 2020:
DKK 177m) as a result of the higher revenue and
operating leverage. The Group EBITA margin in-
creased to 6.5% (Q3 2020: 4.6%), related to both
Mining and Cement. EBITA in Cement was posi-
tive for the first time since Q1 2020, driven by
high revenue in the quarter, lower costs related
to the reshaping of Cement as well as improve-
ments from already executed reshaping activi-
ties. Mining EBITA was impacted by costs related
to the acquisition of TK Mining, as described
above. Q3 2020 included costs related to the im-
plementation of business improvement initiatives
of DKK 25m for the Group.
Amortisation of intangible assets was unchanged
at DKK 86m (Q3 2020: DKK 86m). The effect of
purchase price allocations amounted to DKK
23m (Q3 2020: DKK 24m) and other amortisation
to DKK 63m (Q3 2020: DKK 62m).
Earnings before interest and tax (EBIT) increased
141% to DKK 219m (Q3 2020: DKK 91m), due to
the growth in revenue and operating leverage,
and despite the 10%-points higher share from
capital revenue.
Financial items
Net financial items amounted to DKK -41m (Q3
2020: DKK -1m), of which foreign exchange and
fair value adjustments amounted to DKK -9m (Q3
2020: DKK 15m) and net interest amounted to
DKK -32m (Q3 2020: DKK -16m). Net interest in-
cluded fees to secure credit facilities for the fund-
ing of TK Mining.
Tax
Tax for Q3 2021 totalled DKK -69m (Q3 2020:
DKK -41m), corresponding to an effective tax rate
of 39% (Q3 2020: 46%). Reduced tax credits on
withholding taxes and an increase in the profit
before tax derived from countries with a higher
base corporate tax rate causes the effective tax
rate to be relatively high in a historic context.
Profit for the period
Profit for the period increased to DKK 95m (Q3
2020: DKK 43m), equivalent to DKK 1.8 per share
(Q3 2020: DKK 0.8). The increase resulted from
the significantly higher EBIT, partly offset by
higher net financial costs and higher tax.
Return on capital employed
Despite the higher EBITA in the quarter and
lower average capital employed as compared to
Q3 2020, ROCE decreased to 6.3% (Q3 2020:
Employees
The number of employees increased by 46 to
10,135 at the end of Q3 2021 (end of Q2 2021:
10,089). The increase related to service jobs in
South America.
Backlog
DKKm
Revenue & EBITA margin
DKKm EBITA%
EBITA
DKKm
0
3,000
6,000
9,000
12,000
15,000
18,000
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Mining Cement
0%
2%
4%
6%
8%
10%
12%
14%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Revenue EBITA margin
(100)
0
100
200
300
400
500
600
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Mining Cement
FLSmidth
Interim Report 9M 2021 9
Management Review
CAPITAL
The net working capital ratio in-
creased from Q2 to 10.4% in Q3,
driven primarily by a high activity
level towards the end of the quar-
ter. FLSmidth successfully com-
pleted a directed issue of new
shares, raising proceeds of DKK 1.4
billion to fund the acquisition of TK
Mining, in combination with debt
facilities.
Net working capital
Following five consecutive quarters of improve-
ment, net working capital increased as expected
to DKK 1,735m at the end of Q3 2021 (end of Q2
2021: DKK 1,305m). The increase related primar-
ily to an increase in trade receivables due to high
project and invoicing activity towards the end of
the quarter. Also, net working capital from dis-
continued activities increased by DKK 117m in Q3
(see note 8). Other liabilities decreased due to an
extraordinary payment to the Danish Holiday Al-
lowance Fund of DKK 68m. Utilisation of supply
chain financing increased in Q3. The net working
capital ratio increased to 10.4% of 12-months trail-
ing revenue (Q2 2021: 8.2%) and ended the quar-
ter slightly below the level at the beginning of the
year.
Cash flow from operating activities
Despite the higher EBITDA, cash flow from oper-
ating activities (CFFO) declined significantly to
DKK -192m in Q3 2021 (Q3 2020: DKK 594m),
mainly due to the net working capital increase of
DKK 494m, as compared to a net working capital
decrease of DKK 311m in Q3 2020. In addition, fi-
nancial items and taxes paid increased com-
pared to Q3 2020.
Cash flow from investing activities
Cash flow from investing activities declined to
DKK -61m (Q3 2020: DKK -105m). Q3 2020 in-
cluded investments in new production facilities in
North America and a new service centre in East-
ern Europe.
Free cash flow
Free cash flow (cash flow from operating and in-
vesting activities) adjusted for business acquisi-
tions and disposals amounted to DKK -253m in
Q3 2021 (Q3 2020: DKK 489).
Net interest-bearing debt
As a result of the completed issue of new shares,
raising proceeds of approximately DKK 1.4bn, net
interest-bearing debt (NIBD) decreased to a small
positive net cash position of DKK 16m (end of Q2
2021: DKK -1,159 m), and financial gearing was
0.0x (end of Q2 2021: 1.0x). Excluding proceeds
from the capital increase, the financial gearing
was 1.1x at the end of Q3 2021.
Financial position
By the end of Q3 2021, FLSmidth had DKK 6.8bn
of available committed credit facilities of which
DKK 6bn was undrawn. The committed credit fa-
cilities have a weighted average time to maturity
of 3.8 years. DKK 1.6bn of credit facilities will ma-
ture in 2023 and DKK 5.0bn will mature in 2026.
The remaining DKK 0.2bn matures in later years.
In addition, FLSmidth has a credit facility commit-
ment specifically for the purpose of funding TK
Mining, in combination with the proceeds from
the completed issue of new shares.
Equity ratio
Equity at the end of Q3 2021 increased to DKK
9,983m (end of Q2 2021: DKK 8,369 m), mainly
related to the issue of new shares, but also due
to the positive profit for the period. Conse-
quently, the equity ratio increased to 45.6% (end
of Q2 2021: 39.7%). Adjusted for the issue of new
shares, the equity ratio was 39%.
Acquisition of TK Mining
On 29 July, FLSmidth and thyssenkrupp Indus-
trial Solutions AG reached an agreement that
business (TK Mining). Closing of the transaction is
expected in H2 2022 and is subject to customary
approvals from relevant authorities.
On 6 September, it was announced that
activities in India are ex-
cluded from the final transaction. Consequently,
the total consideration (enterprise value) for TK
Mining will be reduced by EUR 45 million (ap-
proximately DKK 335 million) to EUR 280 million
(approximately DKK 2.1 billion). FLSmidth already
has a strong presence in India and the TK Mining
activities in India are not strategically important
for the transaction. The exclusion of the TK Min-
ing activities in India will not affect the transfer of
FLSmidth
as part of the overall transaction. In 2020, the TK
Mining activities in India delivered revenue of
~EUR 100 million. TK Mining (excl. TK Mining ac-
tivities in India) delivered revenue of ~EUR 680
million (~DKK 5.1 billion). The exclusion of the TK
Mining activities in India has no impact on the ex-
pected synergies and integration costs.
The acquisition of TK Mining is a transformational
largest and strongest suppliers to the mining in-
dustry. Funding of the acquisition has been se-
cured through a combination of debt facilities
and proceeds from the issue of new shares
which was completed on 10 September 2021.
Cash flow
DKKm
Net interest-bearing debt
DKKm
Net working capital
DKKm NWC%
(400)
(200)
0
200
400
600
800
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Cash flow from operating activities
(3,000)
(2,500)
(2,000)
(1,500)
(1,000)
(500)
0
500
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Net interest bearing debt (NIBD)
0%
3%
6%
9%
12%
15%
18%
0
500
1,000
1,500
2,000
2,500
3,000
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Net working capital
Net working capital ratio, end
FLSmidth
Interim Report 9M 2021 10
Management Review
GROWTH
Order intake
Order intake increased 5% organically, driven by
Cement and a higher level of base orders in Min-
ing. Including currency effects, order intake in the
first nine months of 2021 increased 2% to DKK
14,149m (9M 2020: DKK 13,829m). Service order
intake for the Group rose by 12% from the com-
parison period driven by both Mining and Ce-
ment.
Mining service orders increased by 7%, whereas
capital orders decreased due to a reduction in
the value of large projects. Three large Mining or-
ders with a combined value of DKK 600m were
announced in 9M 2021 (9M 2020: three large
Mining orders with a combined value of DKK
2.4bn). As a result, Mining order intake de-
creased 3% organically for the first nine months.
This decrease was offset by Cement which, in
addition to a 24% increase in service orders,
booked a series of sustainability-related orders,
including two medium-sized product orders in
Q1, the flash calciner order for VICAT in Q2 and
strong demand for alternative fuels solutions in
Q3. As a result, Cement order intake increased
by 28% organically.
Order backlog
Order backlog increased 12% to DKK 16,548m by
30 September 2021 (30 September 2020: DKK
14,839m). The increase came from both Cement
and Mining which saw 14% and 10% increases re-
spectively.
Revenue
Organically, revenue increased by 4%, compris-
ing an 8% increase in Mining and a 4% decline in
Cement. Including currency effects, revenue in-
creased 2% to DKK 12,446m in the first nine
months of 2021.
Growth in Mining revenue comprised a 4% in-
crease in service revenue and a 12% increase in
capital revenue.
In the first half of the year, Cement was severely
impacted by the pandemic and a low backlog en-
tering the year. Despite strong revenue growth in
the third quarter, service and capital revenue de-
creased by 9% and 3% respectively in the first
nine months of the year.
PROFIT
Gross profit and margin
Gross profit in the first nine months of 2021 in-
creased by 7% to DKK 3,029m. Gross margin
rose by 1%-point to 24.3%, positively impacted by
effects from business improvement activities.
In the first nine months of 2021, research and de-
velopment costs were DKK 211m (9M 2020:
195m), of which DKK 102m were capitalised (9M
2020: 83m) and the balance reported as pro-
duction costs.
EBITA and margin
EBITA increased 29% to DKK 692m, based on
the slightly higher revenue and improved gross
margin. The EBITA margin was 5.6% up from
4.4% in the first nine months of 2020. The im-
provement was despite the impact from costs re-
lated to the acquisition of TK Mining of DKK 70m
in Q2-Q3 2021.
Profit for the period
Profit for the period increased by 54% to DKK
196m. Continuing activities improved to DKK
214m from DKK 142m. Discontinued activities re-
ported a DKK 18m loss, compared to a DKK 15m
loss in the first nine months of 2020.
Earnings per share
Earnings per share (diluted) increased to DKK 3.9
from DKK 2.5 in the first nine months of 2020.
FINANCIAL PERFORMANCE IN 9M 2021
EBITA split by segment
DKKm
(200)
0
200
400
600
800
9M 2020 9M 2021
Mining Cement
Growth in order intake in 9M 2021
(vs. 9M 2020)
Mining
Cement
FLSmidth
Group
Total growth
-5%
24%
2%
Growth in revenue in 9M 2021
(vs. 9M 2020)
Mining
Cement
FLSmidth
Group
Total growth
7%
-7%
2%
FLSmidth
Interim Report 9M 2021 11
Management Review
CAPITAL
Net working capital
Following a strong improvement in the past five
quarters, net working capital increased in Q3.
Consequently, net working capital decreased to
DKK 1,735m (end of 2020: DKK 1,752m), and the
corresponding net working capital ratio was
10.4% of 12-months trailing revenue, compared to
10.7% at the end of 2020.
The main developments in net working capital
comprised an increase in prepayments from cus-
tomers, largely offset by increased trade receiva-
bles, reduced trade payables and higher invento-
ries to support our growth agenda for
standardised products and parts services.
Cash flow from operating activities
Cash flow from operating activities decreased to
DKK 600m (9M 2020: DKK 1,092m), mainly due
to the large cash inflow from working capital in
the comparable period 9M 2020 and increased
tax payments in 9M 2021.
Cash flow from investing activities
Cash flow used for investments decreased to
DKK -176m from DKK -279m in the first nine
months of 2020.
Cash flow from financing activities
Cash flow from financing activities amounted to
DKK -272m primarily spent on reducing net inter-
est-bearing debt.
A dividend was paid out in the first half of 2021
amounting to DKK 101m whereas no dividend
was paid in the same period last year.
Free cash flow
Free cash flow adjusted for business acquisitions
and disposals was DKK 430m in 9M 2021 (9M
2020: DKK 862m).
Balance sheet
Total assets increased to DKK 21,916m by 30
September 2021 (end of 2020: DKK 20,456), pri-
marily related to increased net working capital
assets and foreign exchange effects.
Net interest-bearing debt
Net interest-bearing debt (NIBD) by 30 Septem-
ber 2021 decreased to a positive net cash posi-
tion of DKK 16m (end of 2020: DKK -1,808m), due
to DKK 1.4bn proceeds from the issue of new
shares and the positive free cashflow. The
1.6x).
Equity
Equity at 30 September 2021 increased to DKK
9,983m (end of 2020: DKK 8,130m). The in-
crease related to proceeds from the issue of new
shares, profit for the period and currency adjust-
ments regarding translation of entities, less divi-
dend paid.
Treasury shares
The holding of treasury shares amounted to
1,093,928 shares at 30 September 2021 (2020:
1,097,718 shares), representing 1.9% of the total
share capital (2020: 2.1%). Treasury shares are
used to hedge our share-based incentive pro-
grammes.
Cash flow from operating activities
DKKm
Cash flow from investing activities
DKKm
Free cash flow
DKKm
0
200
400
600
800
1,000
1,200
9M 2020 9M 2021
(500)
(400)
(300)
(200)
(100)
0
9M 2020 9M 2021
0
200
400
600
800
1,000
9M 2020 9M 2021
Free cash flow
Free cash flow adjusted for business acquisitons and
disposals
FLSmidth
Interim Report 9M 2021 12
Management Review
Overall, the mining industry continued to benefit
from the post-pandemic recovery with high pro-
duction levels as pandemic restrictions eased
further in Q3. Our year-to-date order intake indi-
cates that the mining market has recovered to
the 2019 pre-pandemic activity level.
Events in China had significant impacts on com-
modities markets during the quarter. The fallout
from the crisis at property developer China Ever-
grande Group, along with efforts by the Chinese
government to limit steel production to 2020 lev-
els, saw iron ore prices fall in September
though these remain at highly profitable levels
for producers. Prices for most other metals, in-
cluding copper and gold which are important to
FLSmidth, remain high. Also, limited thermal coal
supply and fear of an energy crisis saw coal
prices surge.
In North America, Europe and Australia, miners
are increasingly replacing equipment as they
catch up on maintenance that was postponed
during the pandemic. A number of lithium plants
are starting to come online in Australia which is
an important region for battery metals.
Activity in South America, Asia (ex-China), Africa
and India has been significantly impacted by the
pandemic but is gradually returning to more nor-
malised pre-pandemic levels.
Across all markets, the post-pandemic surge in
demand and subsequent bottlenecks in global
supply chains has caused challenges. We have
been able to mitigate these through close moni-
toring and thorough planning, but we are seeing
increasing delays on certain routes.
Miners remain well capitalised and have seen a
boost to cashflow from higher global demand
and prices.
invest, we continue to see them taking a disci-
plined approach to investment.
The long-term outlook remains strong for metals
required for the green energy transition with cop-
per expected to move into a 279,000-tonne defi-
cit by 2025, according to S&P Capital IQ. Growth
in renewable energy is a key driver with the lat-
calling for investments to triple by 2030 in order
to put the world on a path towards net zero emis-
sions by 2050.
Overall, we maintain a healthy pipeline as the
mining industry recovery gains further momen-
tum.
MINING MARKET DEVELOPMENTS
Activity in the mining industry continues to gather pace with pandemic
restrictions and infection rates easing globally. Commodity prices and
the global recovery in industrial activity support positive market
sentiment despite some volatility. The long-term outlook remains strong
for metals required for the green energy transition.
Mining order intake
split per Region Q3 2021
%
Mining order intake
split by commodity Q3 2021
%
20%
38%
14%
11%
4%
13%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
36%
14%
9%
2%
16%
23%
Copper
Gold
Coal
Fertilizer
Iron ore
Other
FLSmidth
Interim Report 9M 2021 13
Management Review
Q3 2021
Mining order intake increased 13% organically
compared to Q3 2020. Including currency ef-
fects, the order intake in Q3 2021 increased by
14% to DKK 3,152m (Q3 2020: DKK 2,766m),
comprising a 19% increase in service orders and
an 6% increase in capital orders. The increase in
order intake related to continuing improvement
in activity levels and positive market sentiment
compared to Q3 2020, which was more severely
impacted by the pandemic. Q3 2021 included a
large announced lithium order valued around
DKK 200m (Q3 2020: No announced orders).
During the quarter, service orders and capital or-
ders represented 62% and 38% of Mining order
intake respectively.
Revenue increased by 20% organically and by
22% including currency effects, to DKK 3,180m in
Q3 2021 (Q3 2020: DKK 2,616m), driven mostly
by capital revenue. Capital revenue increased by
52% driven by the higher backlog and improved
site access supporting order execution as Covid-
19 restrictions ease globally. Service revenue in-
creased by 4%, also supported by easing Covid-
19 restrictions. Service accounted for 55% of Min-
ing revenue in Q3 2021 (Q3 2020: 64%).
Gross profit, before allocation of shared cost,
increased by 21% to DKK 787m (Q3 2020: DKK
653m). The corresponding gross margin de-
creased to 24.7% (Q3 2020: 25.0%), due to the
higher share of capital revenue. EBITA increased
by 29% to DKK 302m in Q3 2021 (Q3 2020: DKK
235m) as a result of the higher revenue and
operating leverage, and despite the lower share
of service revenue in the quarter. The correspon-
ding EBITA margin increased to 9.5% from 9.0%
in Q3 2020. EBITA was impacted by costs
related to the acquisition of TK Mining of DKK
30m. The EBITA margin adjusted for these costs
was 10.4%. Acquisition related costs are esti-
mated at around DKK 30m for Q4 2021.
9M 2021
Despite a stronger level of base orders and a 7%
increase in service order intake Mining order in-
take in 9M 2021 decreased by 5% to DKK
9,670m (9M 2020: DKK 10,203m). This was a re-
sult of exceptionally strong capital order intake in
the comparable period in Q1 2020, related to
three large capital orders with a combined value
of around DKK 2.4bn. Based on a book-to-bill of
115%, Mining order backlog in 9M 2021 increased
10% to DKK 10,248 (9M 2020: DKK 9,298m)
Mining revenue increased by 7% to DKK 8,394m
(9M 2020: DKK 7,871m) with service revenue and
capital revenue increasing by 4% and 12% re-
spectively. EBITA increased by 18% to DKK 746m
(9M 2020: DKK 632m) and the corresponding
EBITA margin increased to 8.9% from 8.0% in 9M
2020, owing to an improved gross margin and
operating leverage from the increase in revenue.
MINING FINANCIAL PERFORMANCE
Growth in Mining in Q3 2021
(vs. Q3 2020)
Order intake
Revenue
Total growth
14%
22%
Service and capital
order intake Q3 2021
%
Revenue and EBITA margin
DKKm EBITA %
62%
38%
Service
Capital
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Capital revenue Service revenue
EBITA margin
Mining
(DKKm)
Q3 2021
Q3 2020
Change
(%)
9M 2021
9M 2020
Change
(%)
Order intake (gross)
3,152
2,766
14%
9,670
10,203
-5%
Order backlog
10,248
9,298
10%
10,248
9,298
10%
Revenue
3,180
2,616
22%
8,394
7,871
7%
Gross profit before allocation of shared cost
787
653
21%
2,203
1,999
10%
EBITA before allocation of shared cost
491
440
12%
1,319
1,258
5%
EBITA
302
235
29%
746
632
18%
EBIT
242
178
36%
564
456
24%
FLSmidth
Interim Report 9M 2021 14
Management Review
The green shoots of growth emerging in the ce-
ment industry are at risk from the supply shock
experienced by the construction sector in those
regions in which economic activity has surged
ahead. This is translating into labour and materi-
als shortages, delays, and cost inflation. Energy
costs are surging on global shortages of gas and
coal with potential energy crises ahead in Europe
and China. Whilst these threaten to derail the
emerging recovery for cement, they also rein-
force the need for increasing use of greener so-
lutions, including alternative fuels and carbon
capture.
In Q3, growth in construction activity continued
to drive positive sentiment in North America and
a growing number of opportunities tied to our
Digital and Mission Zero products.
In Europe, customers are investing in technology
that supports their sustainability journey but also
technology to increase capacity in certain Euro-
pean markets. We have a healthy pipeline for up-
grade projects driven by ongoing conversion to
launch of stimulus packages and a doubling of
Emission Trading System in 2021 are driving fac-
tors.
Mechanism is expected to drive this agenda to
countries exporting cement to the EU. The
(GCCA) recent launch of a road map to achieve
net zero emissions in the sector is also expected
to support decarbonisation efforts. GCCA mem-
bers account for 80% of the global cement indus-
try volume outside of China and include several
large Chinese manufacturers.
China continues to be the main driver in Asia but
saw a temporary slowdown that was caused by a
combination of pandemic-related shutdowns and
supply-chain disruptions. Elsewhere in the re-
gion, some countries remain challenged while
other posted improvements by the end of Q3.
Cement despatches in South Asia bounced back
in Q3 after the severe pandemic situation in Q2.
Higher levels of plant utilisation are reflecting
positively in demand for spare parts but travel re-
strictions in the region are still hampering our
business, especially for service jobs.
Overall, demand for new capacity remains sub-
dued, whilst we continue to see increased de-
mand for solutions that decarbonise and de-bot-
tleneck cement plants.
CEMENT MARKET DEVELOPMENTS
The cement industry is emerging from the pandemic with improved
service activity but significant regional differences and inflation
headwinds triggered by construction supply chain challenges and higher
energy costs. Significant overcapacity remains and a recovery is not
expected until the mid-term. Demand is growing for green solutions.
Cement order intake
split per Region Q3 2021
%
Cement revenue
split by categories Q3 2021
%
29%
5%
26%
25%
14%
1%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
29%
24%
47%
Projects
Products
Service
FLSmidth
Interim Report 9M 2021 15
Management Review
Q3 2021
Cement order intake in Q3 2021 increased 17% to
DKK 1,397m (Q3 2020: DKK 1,189m), comprising
a 44% increase in service orders and a 18% de-
crease in capital orders. Currency had no signifi-
cant impact in the quarter. Service order intake
continued strongly on the back off a strong Q2
2021, underpinned by the easing pandemic, in-
creased site access and some pent-up demand,
including a sizable upgrade order. No large capi-
tal orders were booked in Q3. Service orders
and capital orders represented 71% and 29% of
cement order intake, respectively.
Revenue increased by 22% to DKK 1,480m in Q3
2021 (Q3 2020: DKK 1,218m), and currency had
no significant impact in the quarter. Cement ser-
vice revenue decreased by 5% while capital rev-
enue improved strongly by 61%, driven by im-
proved site access supporting order execution
as Covid-19 restrictions ease globally. Service ac-
counted for 47% of Cement revenue in Q3 2021
(Q3 2020: 60%).
Gross profit, before allocation of shared cost, in-
creased 32% to DKK 313m (Q3 2020: DKK
238m), and gross margin increased to 21.1% (Q3
2020: 19.5%), attributable to implemented re-
shaping activities. EBITA in Cement was positive
for the first time since Q1 2020, driven by high
revenue in the quarter, a lower level of Cement
reshaping costs as well as improvements from al-
ready executed reshaping activities. EBITA
amounted to DKK 3m (Q3 2020: DKK -57m), and
the corresponding EBITA margin was 0.2% (Q3
2020: -4.8%).
9M 2021
Cement order intake in 9M 2021 increased by
24% to DKK 4,479m (9M 2020: DKK 3,626m),
driven by both service and capital order growth.
This was a strong development considering the
challenging market environment and was not
least due to a series of MissionZero aligned or-
ders, including two medium-sized product orders
in Q1, the clay flash calciner order for VICAT in
Q2 and strong demand for alternative fuels solu-
tions in Q3 - all supporting our customers to cut
CO
2
emissions front their cement production.
Cement revenue decreased by 7% to DKK
4,052m in 9M 2021 (9M 2020: DKK 4,334m). Ser-
vice and capital revenue declined by 9% and 3%
respectively. Despite a strong quarter perfor-
mance in Q3 2021, the 9M 2021 revenue was
dragged down by a low backlog at the start of
the year and site restrictions which impacted per-
formance in H1.
EBITA improved but remained negative at DKK
-54m (9M 2020: DKK -90m), due to the revenue
decline and costs related to Cement reshaping
activities. The corresponding EBITA margin was
-1.3% (9M 2020: -2.1%).
CEMENT FINANCIAL PERFORMANCE
Growth in Cement in Q3 2021
(vs. Q3 2020)
Order intake
Revenue
Total growth
17%
22%
Service and capital
order intake Q3 2021
%
Revenue and EBITA margin
DKKm EBITA %
71%
29%
Service
Capital
-7%
-5%
-3%
-1%
1%
3%
5%
7%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q3
2019
Q4 Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3
Service revenue Capital revenue
EBITA margin
Cement
(DKKm)
Q3 2021
Q3 2020
Change
(%)
9M 2021
9M 2020
Change
(%)
Order intake (gross)
1,397
1,189
17%
4,479
3,626
24%
Order backlog
6,300
5,541
14%
6,300
5,541
14%
Revenue
1,480
1,218
22%
4,052
4,334
-7%
Gross profit before allocation of shared cost
313
238
32%
898
908
-1%
EBITA before allocation of shared cost
121
83
46%
314
371
-15%
EBITA
3
(57)
(54)
(90)
EBIT
(23)
(86)
(135)
(167)
FLSmidth
Interim Report 9M 2021 16
Management Review
QUARTERLY KEY FIGURES
DKKm
2019
2020
2021
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
INCOME STATEMENT
Gross profit
1,126
1,327
1,047
912
884
1,022
935
1,020
1,074
EBITDA before special non-recurring items
459
580
319
223
255
337
287
285
392
EBITA
377
487
228
131
177
235
190
197
305
EBIT
294
393
146
46
91
145
101
109
219
EBT
284
323
150
(7)
89
149
92
82
176
Profit/loss on continuing activities for the period
190
229
106
(12)
48
84
57
50
107
Profit/loss for the period
190
227
101
(17)
43
78
54
47
95
Gross margin
23.8%
22.0%
23.1%
23.7%
23.1%
24.1%
25.2%
25.0%
23.0%
EBITDA margin before special non-recurring items
9.7%
9.6%
7.0%
5.8%
6.7%
8.0%
7.7%
7.0%
8.4%
EBITA margin
8.0%
8.1%
5.0%
3.4%
4.6%
5.5%
5.1%
4.8%
6.5%
EBIT margin
6.2%
6.5%
3.2%
1.2%
2.4%
3.4%
2.7%
2.7%
4.7%
FLSmidth
Interim Report 9M 2021 17
Management Review
DKKm
2019
2020
2021
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
SEGMENT REPORTING
Mining
Gross margin before allocation of shared costs
25.2%
23.4%
24.9%
26.4%
25.0%
25.1%
26.9%
27.4%
24.7%
EBITA margin before allocation of shared costs
16.3%
14.9%
15.1%
16.0%
16.8%
16.4%
16.7%
15.2%
15.4%
EBITA margin
9.2%
9.1%
7.3%
7.8%
9.0%
9.3%
8.8%
8.2%
9.5%
EBIT margin
6.9%
7.2%
5.2%
5.4%
6.8%
7.2%
6.3%
6.1%
7.6%
Cement
Gross margin before allocation of shared costs
22.8%
21.9%
21.8%
21.0%
19.5%
23.3%
23.5%
22.0%
21.1%
EBITA margin before allocation of shared costs
13.8%
13.3%
11.0%
6.9%
6.7%
9.7%
8.2%
6.8%
8.2%
EBITA margin
5.8%
6.6%
1.8%
-4.9%
-4.8%
-1.9%
-1.7%
-2.7%
0.2%
EBIT margin
4.9%
5.5%
0.4%
-6.7%
-7.1%
-4.1%
-3.9%
-4.8%
-1.6%
FLSmidth
Interim Report 9M 2021 18
Financial Statements
Notes
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
3, 4
Revenue
Production costs
(3,586 )
(2,950 )
(9,417 )
(9,362 )
Gross profit
Sales costs
(330 )
(320 )
(982 )
(1,050 )
Administrative costs
(352 )
(317 )
(1,094 )
(1,018 )
Other operating items
EBITDA before special non-recurring items
Special non-recurring items
(14 )
(33 )
(13 )
Depreciation and impairment of property,
plant and equipment and lease assets
(73 )
(78 )
(239 )
(248 )
EBITA
Amortisation and impairment
of intangible assets
(86 )
(86 )
(263 )
(253 )
EBIT
Income from associates
(2 )
(1 )
(1 )
Financial income
Financial costs
(135 )
(203 )
(702 )
(800 )
EBT
Tax for the period
(69 )
(41 )
(136 )
(90 )
Profit for the period, continuing activities
3, 8
Loss for the period, discontinued activities
(12 )
(5 )
(18 )
(15 )
Profit for the period
Attributable to:
Shareholders in FLSmidth & Co. A/S
Minority interests
Earnings per share (EPS):
Continuing and discontinued activities per share
Continuing and discontinued activities per share, diluted
Continuing activities per share
Continuing activities per share, diluted
Notes
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
Profit for the period
Items that will not be reclassified
to profit or loss:
Actuarial gains/(losses) on
defined benefit plans
(22 )
(43 )
Items that are or may be reclassified
subsequently to profit or loss:
Currency adjustments regarding
translation of entities
(302 )
(689 )
Cash flow hedging:
- Value adjustments for the period
(18 )
(30 )
(8 )
- Value adjustments transferred
to work in progress
(9 )
(23 )
Tax of other comprehensive income
Other comprehensive income
for the period after tax
(291 )
(716 )
Comprehensive income for the period
(248 )
(589 )
Attributable to:
Shareholders in FLSmidth & Co. A/S
(251 )
(591 )
Minority interests
(248 )
(589 )
CONSOLIDATED CONDENSED INTERIM
FINANCIAL STATEMENTS
INCOME STATEMENT
STATEMENT OF COMPREHENSIVE INCOME
Financial performance
FLSmidth
Interim Report 9M 2021 19
Financial Statements
CASH FLOW STATEMENT
Notes
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
EBITDA before special non-recurring items
3
EBITDA, discontinued activities
(12 )
(5 )
(18 )
(11 )
Adjustment for gain on sale of property, plant and
equipment and other non-cash items
(7 )
(22 )
Adjusted EBITDA
Change in provisions, pension and employee benefits
(3 )
9
Change in net working capital
(494 )
(25 )
Cash flow from operating activities before financial
items and tax
(62 )
Financial items received and paid
(37 )
(3 )
(66 )
(50 )
Taxes paid
(93 )
(48 )
(320 )
(220 )
Cash flow from operating activities
(192 )
7
Acquisition of enterprises and activities
(8 )
(49 )
Acquisition of intangible assets
(41 )
(43 )
(120 )
(106 )
Acquisition of property, plant and equipment
(28 )
(62 )
(56 )
(128 )
Acquisition of financial assets
(1 )
(2 )
(5 )
(8 )
7
Disposal of enterprises and activities
Disposal of property, plant and equipment
Disposal of financial assets
Dividend from associates
Cash flow from investing activities
(61 )
(105 )
(176 )
(279 )
Dividend
(101 )
11
Issue of shares, net of costs
Capital injection, minority interests
Exercise of share options
Repayment of lease liabilities
(29 )
(29 )
(93 )
(86 )
Change in net interest bearing debt
(1,339 )
(223 )
(1,516 )
(724 )
Cash flow from financing activities
(252 )
(272 )
(810 )
Change in cash and cash equivalents
(187 )
Cash and cash equivalents at beginning of period
Foreign exchange adjustment, cash and cash
equivalents
(38 )
(102 )
Cash and cash equivalents at 30 September
The cash flow statement cannot be inferred from the published financial information only
Free cash flow
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
Free cash flow
(253 )
Free cash flow, adjusted for acquisitions and disposals of enterprises
and activities
(253 )
Cash and cash equivalents at beginning of period
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
Cash and cash equivalents
Cash and cash equivalents included in assets held for sale
Cash and cash equivalents at beginning of period
FLSmidth
Interim Report 9M 2021 20
Financial Statements
Notes
DKKm
30/09 2021
31/12 2020
30/09 2020
ASSETS
Goodwill
Patents and rights
Customer relations
Other intangible assets
Completed development projects
Intangible assets under development
Intangible assets
Land and buildings
Plant and machinery
Operating equipment, fixtures and fittings
Tangible assets in course of construction
Property, plant and equipment
Lease assets
Deferred tax assets
Investments in associates
10
Other securities and investments
Other non-current assets
Non-current assets
Inventories
Trade receivables
Work in progress
Prepayments
Income tax receivables
Other receivables
Cash and cash equivalents
Current assets
Assets classified as held for sale
Total assets
Notes
DKKm
30/09 2021
31/12 2020
30/09 2020
EQUITY AND LIABILITIES
11
Share capital
Foreign exchange adjustments
(814 )
(1,131 )
(988 )
Cash flow hedging
(57 )
(4 )
(24 )
11
Retained earnings
Shareholders in FLSmidth & Co. A/S
Minority interests
(3 )
(6 )
Equity
Deferred tax liabilities
Pension obligations
5
Provisions
Lease liabilities
Bank loans and mortgage debt
Prepayments from customers
Income tax liabilities
Other liabilities
Non-current liabilities
Pension obligations
5
Provisions
Lease liabilities
Bank loans and mortgage debt
Prepayments from customers
Work in progress
Trade payables
Income tax liabilities
Other liabilities
Current liabilities
Liabilities associated with assets
classified as held for sale
Total liabilities
Total equity and liabilities
BALANCE SHEET
FLSmidth
Interim Report 9M 2021 21
Financial Statements
EQUITY STATEMENT
9M 2021
9M 2020
DKKm
Share
capital
Currency
adjust-
ments
Cash flow
hedging
Retained
earnings
Share-
holders in
FLSmidth &
Co A/S
Minority
interests
Total
Share
capital
Currency
adjust-
ments
Cash flow
hedging
Retained
earnings
Share-
holders in
FLSmidth &
Co A/S
Minority
interests
Total
Equity at 1 January
(1,131 )
(4 )
(6 )
(300 )
(28 )
Comprehensive income for the period
Profit/loss for the period
Other comprehensive income
Actuarial gains/(losses) on
defined benefit plans
(43 )
(43 )
(43 )
Currency adjustments regarding
translation of entities
(688 )
(688 )
(1 )
(689 )
Cash flow hedging:
- Value adjustments for the period
(30 )
(30 )
(30 )
(8 )
(8 )
(8 )
- Value adjustments transferred to work in
progress
(23 )
(23 )
(23 )
Tax on other comprehensive income
Other comprehensive income total
(53 )
(688 )
(31 )
(715 )
(1 )
(716 )
Comprehensive income for the period
(53 )
(688 )
(591 )
(589 )
Transactions with owners:
Dividend paid
(101 )
(101 )
(101 )
Issue of shares, net of costs
Share-based payment
Exercise of share options
Capital injection, minority interests
Equity at 30 September
(814 )
(57 )
(3 )
(988 )
(24 )
FLSmidth
Interim Report 9M 2021 22
Notes
1. KEY ACCOUNTING
ESTIMATES AND
JUDGEMENTS
When preparing the financial statements, we are
required to make several estimates and judge-
ments. The estimates and judgements that can
have a significant impact on the financial state-
ments are categorised as key accounting esti-
mates and judgements. Key accounting esti-
mates and judgements are regularly assessed to
adapt to market conditions and changes in politi-
cal and economic factors. In general, key ac-
counting judgements are made in relation to the
accounting of revenue when determining the
performance obligations and the recognition
method, while key accounting estimates relate to
the estimation of warranty provisions, valuation
of inventories, trade receivables, work in pro-
gress and deferred tax. For further details, refer-
ence is made to The Annual Report 2020, Key
accounting estimates and judgements, pages 63-
64 and to specific notes.
During the third quarter of 2021, the impact from
the COVID-19 pandemic has eased and the mar-
ket conditions have gradually improved, how-
ever, with some short-term uncertainty emerging
from bottlenecks in global supply chains.
As of 30 September 2021, no significant unusual
uncertainties remain in relation to the updated
estimates to assess the recoverability of our as-
set base, including inventories, work in progress,
trade receivables, intangible assets and deferred
tax assets. Considering the uncertainty related to
the supply chain, we have reassessed our pro-
jects to reflect estimated implications on project
financials, including cost forecasts due to the risk
of transportation delays and resulting cost in-
creases. By nature, the updated key accounting
estimates contain uncertainties, and it is possible
that the outcomes in the next financial period can
differ from
mates are based.
2. INCOME STATEMENT
BY FUNCTION
It is our policy to prepare the income statement
based on an adjusted classification of the cost by
function in order to show the earnings before
special non-recurring items, depreciation, amorti-
sation and impairment (EBITDA). Depreciation,
amortisation and impairment are therefore sepa-
rated from the individual functions and presented
in separated lines.
The income statement classified by function in-
cludes allocation of depreciation, amortisation
and impairment.
Interim Report 9M 2021
Income Statement by function
DKKm
Q3
2021
Q3
2020
9M
2021
9M
2020
Gross profit
995
799
2,778
2,590
EBIT
219
91
429
283
(159)
(164)
(502)
(501)
(159)
(164)
(502)
(501)
FLSmidth
Interim Report 9M 2021 23
Notes
3. SEGMENT INFORMATION
9M 2021
9M 2020
FLSmidth Group
FLSmidth Group
DKKm
Mining
Cement
Shared
costs¹⁾
Other
com-
panies ²⁾
Continuing
activities
Discon-
tinued
activities³⁾
Mining
Cement
Shared
costs¹⁾
Other
com-
panies ²⁾
Continuing
activities
Discon-
tinued
activities³⁾
Revenue
8,394
4,052
-
0
12,446
0
7,871
4,334
-
0
12,205
0
Gross profit
2,203
898
(72)
0
3,029
0
1,999
908
(64)
0
2,843
0
EBITDA before special non-recurring items
1,420
395
(853)
2
964
(18)
1,365
437
(1,002)
(3)
797
(11)
EBITA before allocation of shared costs
1,319
314
(943)
2
692
(18)
1,258
371
(1,090)
(3)
536
(11)
EBITA
746
(54)
0
0
692
(18)
632
(90)
0
(6)
536
(11)
EBIT
564
(135)
-
0
429
(18)
456
(167)
-
(6)
283
(11)
Gross margin
26.2%
22.2%
24.3%
25.4%
20.9%
23.3%
EBITDA margin before special non-recurring items
16.9%
9.7%
7.7%
17.3%
10.1%
6.5%
EBITA margin before allocation of shared costs
15.7%
7.7%
-
16.0%
8.6%
-
EBITA margin
8.9%
-1.3%
5.6%
8.0%
-2.1%
4.4%
EBIT margin
6.7%
-3.3%
3.4%
5.8%
-3.9%
2.3%
Number of employees at 30 September
5,352
3,418
1,365
10,135
0
5,209
4,366
1,371
10,946
0
Reconciliation of profit for the period
EBT
350
(18)
232
(13)
1) Shared costs consist of costs that are managed on Region or Group level and subsequently allocated to the divisions. Cost include administration, procurement, logistic and digital.
2) Other companies consist of companies with no activity, real estate companies, eliminations and the parent company.
3) Discontinued activities mainly consist of non-mining bulk material handling.
FLSmidth
Interim Report 9M 2021 24
Notes
4. REVENUE
Revenue arises from sale of life cycle offerings to
our customers. We sell a broad range of goods
and services within the Mining and Cement In-
dustries split into the main categories projects,
products and services.
Six Regions support the sales within the Mining
and Cement Industries. Revenue is presented in
the Regions in which delivery takes place. In the
first nine months of 2021, South America repre-
sented a 3%-point lower share of Group revenue
than the same period last year. Asia and Australia
picked up a higher share of the Group revenue in
the first nine months of 2021 compared to same
period in 2020.
Backlog
The order backlog at 30 September 2021
amounts to DKK 16,548m (9M 2020: DKK
14,839m) and represents the value of outstand-
ing performance obligations on current contracts.
The value of outstanding performance obliga-
tions on current contracts is combination of value
from contracts where we will transfer control at a
future point in time and the value of the remain-
ing performance obligations on contracts where
we transfer control over time.
Based on the order backlog maturity profile 23%
(9M 2020: 21%) of the order backlog is expected
to be converted into revenue in 2021, while 77%
(9M 2020: 79%) is expected to be converted to
revenue in subsequent years.
Revenue split by Regions 9M 2021
%
Revenue split by Regions 9M 2020
%
Backlog
DKKm
22%
22%
17%
17%
11%
11%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
21%
25%
19%
18%
8%
9%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
21%
23%
54%
57%
25%
20%
0
3,000
6,000
9,000
12,000
15,000
18,000
9M 2020 9M 2021
Within current year Within next year Subsequent years
Revenue split by industry and category
9M 2021
9M 2020
DKKm
Mining
Cement
Group
Mining
Cement
Group
Capital business
3,271
1,877
5,148
2,929
1,944
4,873
Service business
5,123
2,175
7,298
4,942
2,390
7,332
Total revenue
8,394
4,052
12,446
7,871
4,334
12,205
Revenue split by recognition principle
9M 2021
9M 2020
DKKm
Mining
Cement
Group
Mining
Cement
Group
Total revenue
8,394
4,052
12,446
7,871
4,334
12,205
FLSmidth
Interim Report 9M 2021 25
Notes
5. PROVISIONS
Additions to provisions amounted to DKK 412m in
9M 2021, compared to DKK 436m in 9M 2020.
Additions to continued restructuring measures
with sites closed in US, Germany and Egypt has
increased, whereas changes to provision esti-
mates for warranties, loss-making projects as
well as disputes and lawsuits have resulted in
less additions compared to 9M 2020.
Of the total used provisions of DKK 242m in 9M
2021, restructuring provision used had a higher
share in 9M 2021 compared to 9M 2020. DKK
17m related to discontinued activities represents
a minor increase compared to 9M 2020. See
note 8 for provision details related to discontin-
ued activities.
For a description of the main provision catego-
ries see note 2.7 in the 2020 Annual Report.
6. CONTRACTUAL
OBLIGATIONS AND
CONTINGENT LIABILITIES
Contingent liabilities at 30 September 2021
amounted to DKK 3.3bn (31 December 2020:
DKK 2.7bn). Contingent liabilities primarily relate
to performance and payment guarantees issued
to cover project-related risks, such as perfor-
mance, payment, quality, and delay. The volume
of such guarantees amounted to DKK 2.5bn (31
December 2020: DKK 2.4bn). In the event a
guarantee is expected to materialise, a provision
is recognized to cover the risk. The remaining
contingent liabilities relate to our involvement in
legal disputes, which are already pending with
courts or other authorities and other disputes
which may or may not lead to formal legal pro-
ceedings being initiated against us.
On 22 July 2021, a customer informed that it in-
tends to initiate arbitration against FLSmidth and
certain partners for an amount of EUR 28 million,
for alleged contractual breaches. The case was
our 2020
annual general meeting. FLSmidth will reject a
potential claim.
Except from the above mentioned no other sig-
nificant changes have occurred to the nature and
extent of our contractual obligations and contin-
gent liabilities compared to what was disclosed
in note 2.9 in the 2020 Annual Report.
FLSmidth has entered into a conditional agree-
ment to sell all and lease back part of its head-
quarters in Valby, Denmark. As described in the
Annual Report 2020 it has been decided to re-
visit the plans for the headquarter and options
are being explored. More certainty of the out-
come is expected in the first half of 2022.
Provisions
DKKm
30/09 2021
31/12 2020
30/09 2020
Provisions
1,117
1,015
973
1,117
1,015
973
1,117
1,015
973
Provisions related to continued activities
DKKm
30/09 2021
31/12 2020
30/09 2020
Provisions
952
833
772
FLSmidth
Interim Report 9M 2021 26
Notes
7. DISPOSAL AND
ACQUISITION OF
ENTERPRISES
On 23 December 2020, FLSmidth announced
the sale of advanced fabric filter technology
fective as of 1 March 2021. The gain from the
transaction was DKK 2m.
On 29 December 2020, FLSmidth announced
the sale of Möller pneumatic conveying systems
business to REEL. The sale of Möller pneumatic
conveying systems business was closed 1 Janu-
ary 2021. The disposal has no material income
statement effect in 9M 2021.
The assets related to the disposals were in-
cluded in assets classified as held for sale as of
31 December 2020. Following the two disposals
being effective in the first quarter of 2021 there
are no remaining assets classified as held for
sale.
On 1 June 2019, FLSmidth acquired the IMP Au-
tomation Group that was integrated into the Min-
ing segment. In relation to the acquisition FLS-
midth paid DKK 8m in 9M 2021 related to a
deferred payment from the acquisition.
8. DISCONTINUED
ACTIVITIES
Discontinued activities include the remaining re-
sponsibilities to finalise legacy projects, handling
of claims, etc. retained on the sale of the non-
mining bulk material handling business in 2019.
Progress on projects has been delayed, amongst
others, due to the COVID-19 pandemic. For fur-
ther information on discontinued activities,
please refer to note 2.11 of Annual report 2020.
In addition to provisions of DKK 165m shown in
the table below, discontinued activities include
DKK 339m (31 December 2020: DKK 220m) of
.
The increase is due to a cash with-
drawal of DKK 130m on a performance guaran-
tee. We have rejected the claim and recognised
the cash withdrawal as a receivable as of 30
September 2021.
Loss for the period from discontinued activities
amounted to DKK -18m (9M 2020: DKK -15m), pri-
marily consisting of SG&A cost, refer to note 3.
Cash flow from discontinued operating activities
totalled DKK -160m (9M 2020: DKK -20m). The
cash outflow was due to a combination of the
loss from the period, used provisions of DKK
-17m (9M 2020: DKK -10m) and cash flow from
net working capital of DKK -125m (9M 2020: DKK
3m).
Discontinued activities effect on cash flow from operating activities
DKKm
9M
2021
2020
9M
2020
Cash flow from operating activities before financial items and tax
(160)
(48)
(18)
Cash flow from operating activities
(160)
(52)
(20)
Discontinued activities share of Group provisions disclosed in note 5
DKKm
30/09 2021
31/12 2020
30/09 2020
Provisions
165
182
201
FLSmidth
Interim Report 9M 2021 27
Notes
9. NET WORKING CAPITAL
Net working capital as at 30 September 2021 is
largely unchanged compared to 31 December
2020. A higher level of trade receivables as well
as prepayments and inventories were offset by a
significant change in prepayments from custom-
ers.
Utilisation of supply chain financing increased in
the first nine months of 2021.
10. FAIR VALUE
MEASUREMENT
Financial instruments measured at fair value are
measured on a recurring basis and categorised
into the following levels of the fair value hierar-
chy:
Level 1: Observable market prices for identical
instruments
Level 2: Valuation techniques primarily based
on observable prices or traded prices for com-
parable instruments
Level 3: Valuation techniques primarily based
on unobservable prices
Securities and investments measured at fair
value through profit/loss are either measured at
quoted prices in an active market for the same
type of instrument (level 1) or at fair value based
on available data (level 3).
Hedging instruments are not traded in an active
market based on quoted prices. They are meas-
ured instead using a valuation technique, where
all significant inputs are based on observable
market data; such as exchange rates, interest
rates, credit risk and volatilities (level 2).
There have been no significant transfers be-
tween the levels in the first nine months of 2021
or during 2020.
Net working capital
DKKm
30/09 2021
31/12 2020
30/09 2020
Net working capital
1,735
1,752
1,981
Cash flow effect from change in net working capital
(25)
706
545
Financial instruments
30/09 2021
DKKm
Level 1
Level 2
Level 3
Total
7
(9)
40
38
31/12 2020
DKKm
Level 1
Level 2
Level 3
Total
9
30
34
73
FLSmidth
Interim Report 9M 2021 28
Notes
11. SHARE CAPITAL
On 10 September 2021, an issue of 6,400,000
new shares of DKK 20 each at a price of DKK
228 per share was completed. Hereafter, share
capital is DKK 1,153m (31 December 2020: DKK
1,025m) and the total number of authorised and
issued shares is 57,650,000 (2020: 51,250,000).
Each share entitles the holder to 20 votes and no
shares have special rights attached to it. The is-
ceeds received net of transaction costs of DKK
25m.
12. EVENTS AFTER THE
BALANCE SHEET DATE
We are not aware of any subsequent matters that
nancial position at 30 September 2021.
13. ACCOUNTING POLICIES
The condensed interim report of the Group for
the first nine months of 2021 is presented in ac-
cordance with IAS 34, Interim Financial Report-
ing, as approved by the EU and additional Danish
disclosure requirements regarding interim report-
ing by listed companies.
Apart from the below mentioned changes, the
accounting policies are unchanged from those
applied in the 2020 Annual Report. Reference is
made to note 7.5, Accounting policies, note 7.6,
Impact from new IFRS, note 7.7, New IFRS not yet
adopted and to specific notes in the 2020 An-
nual Report for further details.
Alternative Performance Measures (APM) are un-
changed from those applied in the 2020 Annual
Report, refer to note 7.4 in the 2020 Annual Re-
port for a description of used APM.
Changes in accounting policies
As of 1
st
January 2021, the FLSmidth Group has
implemented all new or amended accounting
standards and interpretations as adopted by the
EU and applicable for the 2021 financial year, in-
cluding the following, which is the most relevant
for FLSmidth:
Interest Rate Benchmark Reform Phase 2
(amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16) (issued 2020)
The implementation has not had and is not ex-
pected to have significant impact on the consoli-
dated financial statements.
FLSmidth
Interim Report 9M 2021 29
Statements
Executive management
Board of directors
STATEMENT BY MANAGEMENT
FLSmidth
Interim Report 9M 2021 30
Statements
the form of annual reports or interim reports, filed
with the Danish Business Authority and/or an-
NASDAQ Copenhagen, as well as any presenta-
tions based on such financial reports, and any
other written information released, or oral state-
ments made, to the public based on this report or
in the future on behalf of FLSmidth & Co. A/S,
may contain forward looking statements.
other words and terms of similar meaning in con-
nection with any discussion of future operating or
financial performance identify forward-looking
statements. Examples of such forward-looking
statements include, but are not limited to:
Statements of plans, objectives or goals for fu-
ture operations, including those related to FLS-
search and product development.
Statements containing projections of or targets
for revenues, profit (or loss), CAPEX, dividends,
capital structure or other net financial items.
Statements regarding future economic perfor-
mance, future actions and outcome of contin-
gencies such as legal proceedings and state-
ments regarding the underlying assumptions or
relating to such statements.
Statements regarding potential merger &
acquisition activities.
These forward-looking statements are based on
current plans, estimates and projections. By their
very nature, forward-looking statements involve
inherent risks and uncertainties, both general
and specific, which may be outside FLSmidth &
, and which could materially af-
fect such forward-looking statements.
FLSmidth & Co. A/S cautions that a number of im-
portant factors, including those described in this
report, could cause actual results to differ materi-
ally from those contemplated in any forward-
looking statements.
Factors that may affect future results include, but
are not limited to, global as well as local political
and economic conditions, including the impact
from the COVID-19 pandemic, interest rate and
exchange rate fluctuations, delays or faults in
project execution, fluctuations in raw material
prices, delays in research and/or development of
new products or service concepts, interruptions
of supplies and production, unexpected breach
or termination of contracts, market-driven price
and/or services, introduction of competing prod-
ucts, reliance on information technology,
current and new products, exposure to product
liability and legal proceedings and investigations,
changes in legislation or regulation and interpre-
tation thereof, intellectual property protection,
perceived or actual failure to adhere to ethical
marketing practices, investments in and divesti-
tures of domestic and foreign enterprises, unex-
pected growth in costs and expenses, failure to
recruit and retain the right employees and failure
to maintain a culture of compliance. Unless re-
quired by law FLSmidth & Co. A/S is under no
duty and undertakes no obligation to update or
revise any forward-looking statement after the
distribution of this report.
FORWARD LOOKING STATEMENTS
Forward looking statement
MAIN CONCLUSIONS
– continued
5
Interim report Q3 2017
FLSMIDTH
DK-2500 Valby
Tel.: +45 36 18 18 00
Fax: +45 36 44 11 46
CVR No. 58180912
Interim Report
1 January – 30
September
2021