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INTERIM
REPORT
Q1 2022
1 January –
31 March 2022
Company announcement no. 9
DK-2500 Valby
CVR No. 58180912
WE DISCOVER POTENTIAL
FLSmidth
Interim Report Q1 2022 2
Management Review
Management Review
3
4
7
8
10
12
Consolidated Condensed
Interim Financial
Statements
15
15
16
17
18
Notes
19
19
20
22
23
23
24
24
25
25
25
25
Statements
26
CONTENTS
FLSmidth
Interim Report Q1 2022 3
Management Review
Mining highlights Q1 2022
Mining order intake increased 38% organically in
Q1 2022 compared to Q1 2021. Capital order in-
take increased 60% and service order intake in-
creased 30%.
The increase in capital orders was mainly related
to the four large announced product orders re-
ceived in the quarter, with a combined value of
around DKK 1.4bn.
Mining revenue grew 30% organically, mainly
driven by capital revenue. The increase in capital
revenue was driven by the higher backlog and
improved market conditions compared to Q1
2021, partly offset by negative impact from the
war.
Service revenue increased by 13% driven by im-
proved market conditions compared to Q1 2021.
The gross margin decreased to 23.5% due to the
higher share of capital revenue, inflationary pres-
sure and supply chain challenges. EBITA in-
creased by 17% while the corresponding EBITA
margin decreased to 7.7%.
EBITA was impacted by costs related to the ac-
quis
DKK 37m. Adjusted for these costs, the EBITA
margin was 8.8%.
Cement highlights Q1 2022
Cement order intake increased 28% organically.
Capital order intake increased 53% and service
order intake increased 18%.
The increase in order intake in Cement was a re-
sult of improved service activity and market con-
ditions compared to Q1 2021.
Cement revenue grew 10% organically. Capital
revenue increased 25% and service revenue in-
creased 6% compared to Q1 2021. Driven by the
reshaping activities in 2021, gross margin in-
creased to 23.6%.
Cement EBITA continued the positive trend seen
in Q4 2021, driven by higher revenue in the quar-
ter and improvements from the executed reshap-
ing activities. EBITA margin increased to 3.6% in
Q1 2022 compared to -1.7% in Q1 2021. Adjusted
for the gain of DKK 23m from a sale of a prop-
erty, the EBITA margin was 2.0%.
Group highlights Q1 2022
Group order intake increased 35% organically,
driven by both Mining and Cement. Capital or-
ders increased by 59% and service orders in-
creased 26%.
Due to increased order intake from large orders,
the order backlog increased to DKK 19.4bn, of
which outstanding order backlog related to Rus-
sian and Belarusian contracts amounted to
around DKK 2.6bn at the end of Q1 2022.
Organic revenue increased 23%. Gross profit in-
creased by 18%. The corresponding gross margin
decreased from 25.2% to 23.5% due to a higher
share of capital revenue, inflationary pressure
and supply chain challenges. EBITA increased by
59% and the EBITA margin increased to 6.4%
from 5.1%.
Cash flow from operating activities and free cash
flow were negative in the quarter. As expected,
this was due to an increase in net working capital
driven by an increase in inventories and net work
in progress.
Financial guidance 2022
FLSmidth maintains its financial guidance for
2022. Due to the war in Ukraine, the Mining
EBITA margin is expected to be in the low end of
the guidance range.
Please see page 4 for detailed guidance for Min-
ing, Cement and the Group, including the impact
from the war in Ukraine.
The first quarter of 2022 saw a strong momentum in order intake driven
by both Mining and Cement. Despite the tragic war in Ukraine, activity
and sentiment in the mining industry remains positive supported by high
commodity prices and strong demand for minerals. Integration planning
of the thyssenkrupp Mining business acquisition is progressing according
to plan and important regulatory clearances have been received during
the quarter. Our Cement business has continued its positive develop-
ment on improving profitability, despite the cement market remains sta-
ble with overcapacity in many regions.
Strong organic revenue growth of 23%, mainly driven by Mining. Group
EBITA increased by 59% compared to first quarter in 2021 despite in-
creased inflationary pressure, supply chain challenges and negative im-
pact from the war in Ukraine. Our key priority in this challenging time of
war has been on the safety and well-being of our employees. We closely
follow this tragic situation to ensure we take the right responsible deci-
sions from a humanitarian, legal, and financial point of view.
- Mikko Keto, Group CEO
HIGHLIGHTS
Highlights
FLSmidth
Interim Report Q1 2022 4
Management Review
Mining
The outlook for the mining industry remains posi-
tive driven by global economic development and
increased demand for minerals required for the
green transition. For 2022, the Mining business
revenue and EBITA is expected to grow.
Mining EBITA margin is expected to be impacted
by a higher share of capital revenue, higher lo-
gistics costs and inflation. Guidance includes
around DKK 110m in integration costs until clos-
ing of the thyssenkrupp Mining business transac-
tion. The transaction is expected to close in the
second half of 2022.
Due to the war in Ukraine, Mining revenue is ex-
pected to be negatively impacted by lower reve-
nue in Russia, partly offset by mitigating actions.
Due to costs related to wind down of activities in
Russia and mitigating actions, the Mining EBITA
margin is expected to be in the low end of the
guidance range.
Cement
The short-term outlook for the cement industry
remains impacted by overcapacity and slow re-
covery. Following a year of reshaping, we expect
the Cement business to return to positive EBITA
in 2022. Cement EBITA margin is expected to be
impacted by higher logistics costs and inflation.
Mid-term recovery is expected in the cement in-
dustry driven by increased demand for sustaina-
bility solutions.
The war in Ukraine is expected to have an insig-
nificant impact on Cement.
Group
The financial guidance for 2022 is for the
FLSmidth Group standalone and excludes the
Mining business. Guidance includes around
DKK 110m in integration costs until closing of the
thyssenkrupp Mining business transaction. We
will publish a new financial guidance after the
transaction closes. The transaction is expected to
close in the second half of 2022.
Guidance for 2022 is subject to increased uncer-
tainty due to the pandemic, global supply chain
situation and geopolitical turmoil.
FINANCIAL GUIDANCE 2022
FLSmidth maintains its financial guidance for 2022. Due to the war in Ukraine, the Mining EBITA margin
is expected to be in the low end of the guidance range.
Mining
Q1
2022
Guidance
2022
Highlights
Cement
Q1
2022
Guidance
2022
Group
Q1
2022
Guidance
2022
Russia status
Exposure prior to 24 February 2022
4 sales offices with +80 employees
No production assets
Expected revenue of around
DKK 1.5bn in Russia in 2022
Exposure at end Q1 2022
Realised revenue of around
DKK 380m in Q1 2022
Outstanding order backlog from
Russian and Belarusian activities of
around DKK 2.6bn
Actions taken by FLSmidth
New business in Russia and
Belarus suspended
Wind down activities in Russia in
a responsible manner
Working on mitigating actions and
efforts
We are obliged to fulfil legal obliga-
tions with regards to ongoing activi-
ties to the extent possible
Any net profit generated in 2022
from activities in Russia and Bela-
rus will be donated to humanitarian
purposes
Donation of DKK 2m to Ukrainian
conflict relief efforts
FLSmidth
Interim Report Q1 2022 5
Management Review
FINANCIAL HIGHLIGHTS
Order intake
DKKm
Revenue
DKKm
EBITA & EBITA margin
DKKm - %
Cash flow from operating activities
DKKm (70) from DKKm 285 in Q1 2021
GROUP
7,018
41%
4,706
27%
302 6.4%
59%
Earnings per share
DKK 2.3 from DKK 1.0 in Q1 2021
Net working capital ratio
7.3% from 10.7% end of Q1 2021
NIBD/EBITDA
-0.6x from 1.4x end of Q1 2021
Order intake
DKKm
Revenue
DKKm
EBITA & EBITA margin
DKKm - %
Revenue split by capital & service
%
MINING
5,157
44%
3,233
34%
249 7.7%
17%
Order intake
DKKm
Revenue
DKKm
EBITA & EBITA margin
DKKm - %
Revenue split by capital & service
%
CEMENT
1,861
33%
1,473
13%
53 3.6%
330%
4,985
7,018
Q1
2021
Q1
2022
3,713
4,706
Q1
2021
Q1
2022
190
302
Q1
2021
Q1
2022
3,585
5,157
Q1
2021
Q1
2022
2,412
3,233
Q1
2021
Q1
2022
213
249
Q1
2021
Q1
2022
44%
(Q1 2021: 33%)
56%
(Q1 2021: 67%)
Capital
Service
1,400
1,861
Q1
2021
Q1
2022
1,301
1,473
Q1
2021
Q1
2022
(23)
53
Q1 2021
Q1 2022
43%
(Q1 2021: 39%)
57%
(Q1 2021: 61%)
Capital
Service
FLSmidth
Interim Report Q1 2022 6
Management Review
MissionZero developments
Throughout 2022, we continue
to integrate MissionZero into our
core functions, accelerate cus-
tomer partnerships and further
translate environmental objec-
tives into product development.
Q1 2022 highlights the increased
demand for MissionZero solu-
tions and showed good execu-
tion on our partnership strategy.
Sustainable mining goes digital
We have entered into an agreement with Mi-
crosoft aimed at accelerating our digital jour-
ney, co-innovating and improving existing of-
ferings, advancing our MissionZero sustaina-
bility ambition. The collaboration also seeks to
increase our ability to demonstrate technologi-
cal leadership in mining and cement in support
goals.
Together with AVEVA, a global leader in indus-
trial software driving digital transformation and
sustainability, we have signed a global partner-
ship to deliver cutting-edge digitally enabled
solutions and services to the mining industry.
Providing the mining industry with water and
energy efficiency solutions FLSmidth was cho-
sen as the supplier of the rotary kiln and rotary
dryer for the Araguaia Niquel Metais Ltda ferro-
nickel mine in the state of Pará in the Northern
region of Brazil. This will boost the supply of
nickel to meet the growing demand from the
electric vehicle market. We have already worked
with Araguaia Niquel Metais Ltda to identify a
pathway to further reduce carbon emissions in
the future.
We will supply the mills and three CCD thicken-
ers, two tailings thickeners and one filtrate thick-
ener to a copper mine in Southeast Asia. The use
of thickeners will also ensure greater water use
efficiency at the site by decreasing the amount of
fresh water needed by approximately 25%.
Driving leadership on clay calcination and
fighting plastic waste
In late Q1 2022, the Cement Business an-
nounced the second record-breaking clay calci-
nation order in a year in Ghana and one that is
set to become the worlds largest clay calcination
installation. The new installation in Ghana will cut
up to 20% of CO
2
emissions compared to current
tion outside of Accra.
In Q1 2022, we entered into a new MissionZero
partnership to tackle the growing challenge of
non-recyclable plastic waste in Vietnam. To-
gether with the waste handling start-up
TONTOTON, we will act and as technical consult-
ant and assist local cement producers in replac-
ing fossil fuels with plastic waste.
SUSTAINABILITY HIGHLIGHTS
Safety (TRIR)
Total Recordable Incident Rate/
million working hours
Women managers
%
1.1
Target: zero harm; 2022 Target: <1.3
14.6
2022 Target: 15.7%
The year started with a significant reduction in TRIR com-
pared to end of 2021 and closely reflects our position in
the comparison period last year. Reporting of safety re-
mains high, ensuring awareness and mitigation of risk are
continuously being improved.
Our 2030 target is to have 25% of woman managers. Due
to our active recruitment and career development strat-
egy, we have seen a positive trend in the share of women
managers that has continued into the first quarter of 2022.
Water withdrawal
m
3
Scope 1 & 2 GHG
Emissions
tCO
2
e (market-based)
34,127
10,747
Target: carbon neutral; 2022 Target: 43,622 tCO
2
e
A good start to the year with lower water withdrawal com-
pared to the same quarter last year and on track to im-
prove versus last year’s performance. This reflects our
continued efforts in reducing freshwater consumption
from our operations.
CO
2
e emissions for the quarter is on track to meet annual
targets. An increase in emissions compared to the same
period last year reflects that in Q1 2021 many sites were
closed temporarily due to the pandemic. In 2022 most
sites are at full capacity for work and operations resulting
in higher energy consumption.
1.9
1.1
2021
Q1
2022
14.3%
14.6%
2021
Q1
2022
201,997
34,127
2021
Q1
2022
34,737
10,747
2021
Q1
2022
FLSmidth
Interim Report Q1 2022 7
Management Review
KEY FIGURES
DKKm
Q1
2022
Q1
2021
2021
INCOME STATEMENT
ORDERS
EARNING RATIOS
CASH FLOW
BALANCE SHEET
DKKm
Q1
2022
Q1
2021
2021
FINANCIAL RATIOS
SHARE RATIOS
SUSTAINABILITY KEY FIGURES
Use of alternative performance measures
FLSmidth
Interim Report Q1 2022 8
Management Review
In the first quarter of 2022, metals and energy
markets were shaken by the tragic war in
Ukraine. Many commodities are trading close to
all-time highs and prices for most of the key Rus-
sian export metals have soared during March.
Russia is a top ten producer of almost all major
base metals, and the disruptions caused by the
war have further squeezed the global supply of
among other palladium, nickel, aluminium and
cobalt. Inventories of some of the most important
industrial metals traded on the London Metal Ex-
change have dropped by around 70% over the
past year and supplies of most commodities
have reached critically low levels.
Inflationary pressure increased during the first
quarter driven by record high energy prices. This
has been further inflated by the war in Ukraine.
Bottlenecks in global supply chains continue to
cause challenges across regions and newly im-
posed pandemic lockdowns in China have put
additional pressure on already fragile supply
chains in Asia.
In North America, we have seen significant sup-
ply chain disruptions and input cost inflation, spe-
cifically on inbound freight costs, as the region is
particularly dependent upon imports from Asia.
Market activity in South America has been strong
in the first quarter of 2022, despite political un-
certainty in Peru, Chile and Brazil in relation to
the elections. The high copper price leads miners
to continuously focus on securing a high produc-
tion up-time. This drives demand for operational
improvement opportunities to increase the min-
Despite supply chain challenges, market activity
has been strong in Australia - especially in the af-
termarket. New greenfield opportunities in Aus-
tralia are primarily within gold and battery metals,
while brownfield expansions mainly are in iron
ore, gold and nickel.
Customers in Africa, Middle East and India are
seeking to accelerate production via optimisation
and debottlenecking projects to take advantage
of the high commodity prices. This trend is seen
across all commodities and across the region.
We see good activity and a healthy pipeline in
Europe. Customers in the region remain optimis-
tic, though with concerns around securing the
supply chain due to cost volatility and increased
uncertainty to lead times.
FLSmidth
Interim Report Q1 2022
MINING MARKET DEVELOPMENTS
Aside from the tragic war in Ukraine, activity and sentiment in the mining
market continues to be positive. The long-term outlook for minerals
required to meet global economic development and drive the green
transition remains positive.
Mining order intake
split per Region Q1 2022
%
Mining order intake
split by commodity Q1 2022
%
18%
40%
9%
9%
12%
12%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
44%
9%
7%
2%
9%
29%
Copper
Gold
Coal
Fertilizer
Iron ore
Other
FLSmidth
Interim Report Q1 2022 9
Management Review
Q1 2022
The mining industry has continued to benefit
from high commodity prices and high production
rates driven by global economic recovery and in-
creasing demand for minerals, despite increased
inflationary pressure and supply chain chal-
lenges.
Mining order intake increased 38% organically in
Q1 2022 compared to Q1 2021. Including cur-
rency effects, order intake increased by 44% to
DKK 5,157m, comprising a 30% increase in ser-
vice orders and a 60% increase in capital orders.
The increase in capital orders was mainly related
to the four large announced product orders
received in the quarter, with a combined value of
around DKK 1.4bn. The comparison quarter in
2021 included one large order of DKK 200m. The
increase in service order intake was a result of
higher post-pandemic demand compared to Q1
2021.
During the quarter, service orders and capital or-
ders represented 49% and 51% of Mining order
intake respectively (Q1 2021: 54% and 46% re-
spectively).
Revenue increased organically by 30% and by
34% including currency effects to DKK 3,233m.
Growth was mainly driven by a 76% increase in
capital revenue, partly offset by negative impact
from the war.
The increase in capital revenue was driven by
the higher backlog and improved market condi-
tions compared to Q1 2021.
Service revenue increased by 13% driven by
improved market conditions compared to Q1
2021. Service accounted for 56% of Mining
revenue in Q1 2022 compared to 67% in Q1
2021, whereas capital accounted for 44% of
Mining revenue in Q1 2022 compared to 33% in
Q1 2021.
Gross profit increased by 20% to DKK 760m,
from DKK 635m in Q1 2021. The corresponding
gross margin decreased to 23.5% due to the
higher share of capital revenue, increased
inflationary pressure and supply chain
challenges.
EBITA increased by 17% to DKK 249m in Q1 2022
as a result of the higher revenue. The correspon-
ding EBITA margin decreased to 7.7% from 8.8%
in Q1 2021. EBITA in Q1 2022 was impacted by
costs related to the acquisition of thyssen
Mining business of DKK 37m. Adjusted for these
costs, the EBITA margin was 8.8%.
MINING FINANCIAL PERFORMANCE
Growth in Mining in Q1 2022
(vs. Q1 2021)
Order intake
Revenue
Total growth
44%
34%
Order intake Q1 2022
split by capital & service
%
Revenue and EBITA margin
DKKm EBITA %
51%
(Q1 2021: 46%)
49%
(Q1 2021: 54%)
Capital
Service
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
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Service Capital
EBITA % Adjust. for tk costs
Mining
(DKKm)
Q1 2022
Q1 2021
Change (%)
Order intake (gross)
5,157
3,585
44%
Order backlog
12,911
10,275
26%
Revenue
3,233
2,412
34%
Gross profit
760
635
20%
EBITA
249
213
17%
EBIT
192
152
26%
Industry and therefore included in the
relevant lines of gross profit and EBITA. The comparison quarter Q1 2021 has been restated accordingly.
FLSmidth
Interim Report Q1 2022 10
Management Review
Sanctions imposed on Russia during the first
quarter of 2022 have exacerbated the
inflationary pressure on energy costs and freight
rates, creating additional challenges for many
cement producers. Normally exports can provide
a buffer for cement producers to unload excess
supply and maximise capacity utilisation, but this
has become increasingly difficult in many regions
given supply chain challenges and recent hikes
in freight costs.
The surge in energy prices represents both a risk
and an opportunity. It has forced some cement
producers to temporarily shut down production
of older and inefficient cement plants. On the
other hand, it has created increased interest in
productivity enhancement solutions both within
products and advanced services.
In North America, cement demand remains high
and high production rates and production
bottlenecks create good aftermarket activity.
This includes continued interest in retrofits and
upgrades. The challenging supply chain and
increase in fuel costs is however a concern to
many North American cement producers.
Demand for cement in many parts of Western
Europe remains good. Increasing focus on
emission regulations combined with high energy
prices are driving increased interest in
sustainability solutions. While a high utilisation in
Europe is driving aftermarket activity, supply
chain challenges are causing some delays.
The green transition is visible in many parts of
the world, including in Asia, Africa and India as
cement producers increasingly are looking for
more environmentally friendly processes
including alternative fuel substitutions.
Across regions, overall demand for new capacity
remains low, but the growing interest in
productivity and sustainability solutions creates
good opportunities in the medium term.
CEMENT MARKET DEVELOPMENTS
The cement market remains stable with continued overcapacity in many
regions, however service activity is gradually improving. The soaring cost
inflation and supply chain challenges create a difficult environment for
many cement producers. At the same time, it drives increased interest for
productivity and sustainability solutions.
Cement order intake
split per Region Q1 2022
%
38%
5%
18%
26%
12%
1%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
FLSmidth
Interim Report Q1 2022 11
Management Review
Q1 2022
Cement order intake increased 28% organically
compared to Q1 2021. Including currency effects,
the order intake in Q1 2022 increased by 33% to
DKK 1,861m, comprising an 18% increase in ser-
vice orders and a 53% increase in capital orders.
The increase in order intake in Cement was a re-
sult of improved service activity and market con-
ditions compared to Q1 2021, where order intake
was impacted by subdued investment appetite
and travel restrictions limited on-site technical
services.
No large orders were announced during the
quarter, however several MissionZero related
orders were received. These include an order for
system in Ghana and orders for alternative fuel
firing products.
Service orders and capital orders represented
51% and 49% of cement order intake, respec-
tively (Q1 2021: 57% and 43% respectively).
Revenue increased 10% organically compared to
Q1 2021. Including currency effects, revenue in-
creased by 13% to DKK 1,473m in Q1 2022. Im-
pact from the war has been insignificant.
Cement service revenue increased by 6% and
capital revenue increased by 25%. Service ac-
counted for 57% of Cement revenue in Q1 2022,
compared to 61% in Q1 2021.
Gross profit increased 16% to DKK 347m, com-
pared to DKK 300m in Q1 2021. The correspond-
ing gross margin increased to 23.6% as a result
of the successful implementation of reshaping
activities in 2021.
Cement EBITA continued the positive trend seen
in Q4 2021, driven by higher revenue in the quar-
ter and improvements from the executed reshap-
ing activities in 2021. EBITA amounted to DKK
53m in Q1 2022 compared to DKK -23m in Q1
2021. The corresponding EBITA margin was posi-
tive at 3.6%, compared to -1.7% in Q1 2021. Ad-
justed for a gain of DKK 23m from a sale of a
property related to the Cement business, the
EBITA margin was 2.0%.
CEMENT FINANCIAL PERFORMANCE
Growth in Cement in Q1 2022
(vs. Q1 2021)
Order intake
Revenue
Total growth
33%
13%
Order intake Q1 2022
split by capital & service
%
Revenue and EBITA margin
DKKm EBITA %
49%
(Q1 2021: 43%)
51%
(Q1 2021: 57%)
Capital
Service
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
0
300
600
900
1,200
1,500
1,800
2,100
2,400
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Capital revenue Service revenue
EBITA margin
Cement
(DKKm)
Q1 2022
Q1 2021
Change (%)
Order intake (gross)
1,861
1,400
33%
Order backlog
6,447
5,976
8%
Revenue
1,473
1,301
13%
Gross profit
347
300
16%
EBITA
53
(23)
330%
EBIT
30
(51)
159%
Industry and therefore included in the
relevant lines of gross profit and EBITA. The comparison quarter Q1 2021 has been restated accordingly.
FLSmidth
Interim Report Q1 2022 12
Management Review
GROWTH
Group order intake increased 35%
organically, driven by both Mining
and Cement. Capital orders in-
creased by 59%. Strong organic
revenue growth of 23%, mainly
driven by Mining. Capital revenue
and service revenue grew 56%
and 11%, respectively.
Order intake
Order intake in Q1 increased 41% to DKK 7,018m
and by 35% organically, the highest order intake
level since Q3 2018. Q1 2022 order intake in-
cluded four large orders with a combined value
of around DKK 1.4bn, whereas the comparison
quarter in 2021 included one large order of DKK
200m.
Following a period of lower investments and ser-
vice activity, demand has significantly increased
as a result of post-pandemic recovery and im-
proved market conditions. Capital orders in-
creased by 59% and service orders increased
26% in Q1 2022 compared to Q1 2021.
Order backlog and maturity
Due to the increased order intake from large or-
ders, the order backlog increased to DKK 19.4bn.
The order backlog at the end of Q1 2022 was
19% above the level at the end of Q1 2021. 42%
of the backlog is expected to be converted to
revenue in the remainder of 2022. Outstanding
order backlog related to Russian and Belarusian
contracts amounted to around DKK 2.6bn at the
end of Q1 2022 and is due to uncertainty in-
cluded in maturity.
Backlog maturity
Mining
Cement
FLSmidth
Group
Revenue
Revenue increased 27% to DKK 4,706m in Q1
2022, driven primarily by a 56% increase in capi-
tal revenue. Service revenue accounted for 56%
of the total revenue during the quarter, com-
pared to 65% in Q1 2021.
Organic revenue increased 23% driven primarily
by a 30% organic growth in Mining, partly offset
by negative impact from the war. The increase
was a result of a higher order backlog going into
Q1 2022 compared to Q1 2021 and improved
pandemic conditions compared to Q1 2021. Dur-
ing the quarter inflationary pressure and global
supply chain have become more challenging. We
have been able to partly mitigate the supply
chain pressure due to our flexibility to switch be-
tween suppliers and use regional sourcing.
GROUP FINANCIAL PERFORMANCE
Order intake
DKKm
0
2,000
4,000
6,000
8,000
10,000
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Mining Cement
Growth in order intake in Q1 2022
(vs. Q1 2021)
Mining
Cement
FLSmidth
Group
Total growth
44%
33%
41%
Growth in revenue in Q1 2022
(vs. Q1 2021)
Mining
Cement
FLSmidth
Group
Total growth
34%
13%
27%
Group – continued activities
(DKKm)
Q1 2022
Q1 2021
Change (%)
Order intake (gross)
7,018
4,985
41%
Order backlog
19,358
16,251
19%
Revenue
4,706
3,713
27%
Gross profit
1,107
935
18%
SG&A cost
(725)
(648)
12%
EBITA
302
190
59%
EBIT
222
101
120%
FLSmidth
Interim Report Q1 2022 13
Management Review
PROFIT
Gross profit increased by 18% and
EBITA increased by 59% com-
pared to first quarter in 2021 as a
result of higher revenue. The
EBITA margin improved to 6.4%.
Gross profit and margin
Gross profit increased by 18% to DKK 1,107m, due
to higher revenue. The gross margin decreased
from 25.2% to 23.5% as a result of a higher capi-
tal revenue share in the quarter, increased infla-
tionary pressure and supply chain challenges.
In Q1 2022, total research and development
costs (R&D) amounted to DKK 65m, representing
1.4% of revenue (Q1 2021: 1.4%).
R&D costs (DKKm)
Q1 2022
Q1 2021
R&D costs in Q1 2022 amounted to DKK 65m
compared to DKK 52m in Q1 2021. The increase
in R&D costs mainly related to the development
of new mining, cement and digital products to
improve productivity, sustainability and safety. In
addition, products and solutions continue to be
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 increased 2% com-
pared to Q4 2021. Compared to Q1 2021 SG&A
increased 12% due to wage inflation and higher
travel costs, as well as administration costs re-
business of DKK 37m. Other operating income in-
clude a gain of DKK 23m from a sale of a prop-
erty related to the Cement business.
SG&A costs as a percentage of revenue declined
to 15.4% in Q1 2022 compared to 17.5% in Q1
2021.
EBITA and EBITA margin
EBITA increased by 59% to DKK 302m, as a re-
sult of the higher revenue. The EBITA margin in-
creased to 6.4% from 5.1% in Q1 2021, due to im-
provements from the executed reshaping
activities in Cement in 2021. Adjusted for the
costs related to the acquisition
Mining business and the gain of DKK 23m from a
sale of property, the EBITA margin was 6.7%.
Amortisations in Q1 2022 was DKK 80m (Q1
2021: DKK 89m) of which the effect of purchase
price allocations amounted to DKK 14m (Q1 2021:
DKK 22m) and other amortisation to DKK 66m
(Q1 2021: DKK 67m).
Earnings before interest and tax (EBIT) increased
120% to DKK 222m.
Financial items
Net financial items amounted to DKK -29m (Q1
2021: DKK -9m), of which foreign exchange and
fair value adjustments amounted to DKK -12m (Q1
2021: DKK 4m). Termination of hedging Russian
Rubles had a negative impact of DKK 36m on for-
eign exchange adjustments. Net interest
amounted to DKK -17m (Q1 2021: DKK -13m).
Tax
Tax for Q1 2022 totalled DKK -70m (Q1 2021:
DKK -35m), corresponding to an effective tax rate
of 36% (Q1 2021: 38%).
Profit for the period
Profit for the period increased to DKK 123m (Q1
2021: DKK 54m), equivalent to DKK 2.3 per share
(Q1 2021: DKK 1.0). The increase resulted from
the significantly higher EBIT, partly offset by
higher net financial costs and higher tax.
Return on capital employed
As a result of the higher EBITA in the quarter and
lower average capital employed compared to Q1
2021, ROCE increased to 7.8% (Q1 2021: 4.8%).
Employees
The number of employees decreased to 10,039
at the end of Q1 2022, compared to 10,117 at the
end of Q4 2021.
Backlog
DKKm
Revenue & EBITA margin
DKKm EBITA%
EBITA
DKKm
0
4,000
8,000
12,000
16,000
20,000
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Mining Cement
0%
2%
4%
6%
8%
10%
12%
0
1,000
2,000
3,000
4,000
5,000
6,000
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Revenue EBITA margin
(100)
0
100
200
300
400
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Mining Cement
FLSmidth
Interim Report Q1 2022 14
Management Review
CAPITAL
Net working capital increased to
DKK 1,354m, driven by an increase
in inventories and net work in pro-
gress. The net working capital ratio
increased from 6.0% in Q4 2021 to
7.3% in Q1 2022.
Net working capital
Net working capital increased to DKK 1,354m at
the end of Q1 2022 (end of Q4 2021: DKK
1,058m). The increase related primarily to an ex-
pected increase in inventories to mitigate the
supply chain challenges and an increase in net
work in progress driven by the increase in execu-
tion of capital orders. The increase was partially
offset by lower trade receivables. The net work-
ing capital ratio increased to 7.3% of 12-months
trailing revenue (year end 2021: 6.0%).
Utilisation of supply chain financing increased
slightly in the first quarter of 2022 to DKK 547m
(year end 2021: DKK 490m).
Cash flow from operating activities
Despite the higher EBITDA, cash flow from oper-
ating activities (CFFO) declined in line with ex-
pectations to DKK -70m in Q1 2022 (Q1 2021:
DKK 285m).
As expected, the main contributor to the nega-
tive CFFO was the net working capital outflow of
DKK 219m as compared to a net working capital
inflow of DKK 149m in Q1 2021. In addition, taxes
paid increased compared to Q1 2021.
Cash flow from investing activities
Cash flow from investing activities resulted in a
net cash inflow of DKK 35m in Q1 2022. The net
cash inflow was caused by the proceeds from a
property sale of DKK 91m.
Free cash flow
Free cash flow (cash flow from operating and in-
vesting activities) adjusted for business acquisi-
tions and disposals amounted to DKK -35m in Q1
2022 (Q1 2021: DKK 232).
Net interest-bearing debt
As a result of the completed issue of new shares,
raising proceeds of approximately DKK 1.4bn in
2021, the net interest-bearing debt (NIBD) re-
mains at a net cash position. The net cash posi-
tion was DKK 864m at the end of Q1 2022 (year
end 2021: DKK 889 m) and corresponds to an
unchanged financial gearing of -0.6x.
Financial position
By the end of Q1 2022, FLSmidth had DKK 6.8bn
of available committed credit facilities of which
DKK 6.0bn was undrawn. The committed credit
facilities have a weighted average time to ma-
turity of 4.2 years. DKK 1.6bn of credit facilities
will mature in 2023 and DKK 5.0bn will mature in
2027. The remaining DKK 0.2bn matures in later
years. In addition, FLSmidth has a credit facility
commitment specifically for the purpose of fund-
ness, in combination with the proceeds from the
completed issue of new shares.
Equity ratio
Equity at the end of Q1 2022 increased to DKK
10,679m (year end 2021: DKK 10,368m), due to
the positive profit for the period and the transla-
tion effect from foreign currencies. The equity ra-
tio was largely stable at 44.7% (year end 2021:
45.0%).
At the Annual General Meeting held in March
2022, it was approved to pay a dividend of DKK
3 per share. Consequently, the corresponding
pay out of DKK 170m was transferred from equity
to other liabilities.
Acquisition of TK Mining
The announced agreement to acquire
according to plan.
During Q1 2022 FLSmidth has received regula-
tory clearances from the Australian, South Afri-
can, Peruvian and Chilean authorities. This is in
addition to approvals already received, including,
but not limited to Canada and Morocco. All clear-
ances to date have been without imposition of
any competition related remedies.
Pending the remaining authority approvals and
satisfaction of conditions in the sale and pur-
chase agreement with thyssenkrupp, the transac-
tion is expected to close during the second half
of 2022.
Cash flow
DKKm
Net interest-bearing debt
DKKm
Net working capital
DKKm NWC%
(400)
(200)
0
200
400
600
800
1,000
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Cash flow from operating activities
(4,000)
(3,000)
(2,000)
(1,000)
0
1,000
2,000
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Net interest bearing debt (NIBD)
0%
3%
6%
9%
12%
15%
18%
0
500
1,000
1,500
2,000
2,500
3,000
Q1
2020
Q2 Q3 Q4 Q1
2021
Q2 Q3 Q4 Q1
2022
Net working capital
Net working capital ratio, end
FLSmidth
Interim Report Q1 2022 15
Financial Statements
Notes
DKKm
Q1
2022
Q1
2021
3, 4
Revenue
Production costs
(3,599 )
(2,778 )
Gross profit
Sales costs
(342 )
(315 )
Administrative costs
(411 )
(338 )
Other operating items
EBITDA before special non-recurring items
Special non-recurring items
(15 )
Depreciation and impairment of property,
plant and equipment and lease assets
(80 )
(82 )
EBITA
Amortisation and impairment
of intangible assets
(80 )
(89 )
EBIT
Financial income
Financial costs
(366 )
(308 )
EBT
Tax for the period
(70 )
(35 )
Profit for the period, continuing activities
3, 7
Loss for the period, discontinued activities
(3 )
Profit for the period
Attributable to:
Shareholders in FLSmidth & Co. A/S
Minority interests
(7 )
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
Q1
2022
Q1
2021
Profit for the period
Items that will not be reclassified to profit or loss:
Actuarial gains on defined benefit plans
Items that are or may be reclassified
subsequently to profit or loss:
Currency adjustments regarding translation of entities
Cash flow hedging:
- Value adjustments for the period
(13 )
- Value adjustments transferred to work in progress
(8 )
Tax of total other comprehensive income
(5 )
Other comprehensive income for the period after tax
Comprehensive income for the period
Attributable to:
Shareholders in FLSmidth & Co. A/S
Minority interests
(9 )
CONSOLIDATED CONDENSED INTERIM
FINANCIAL STATEMENTS
INCOME STATEMENT
STATEMENT OF COMPREHENSIVE INCOME
Financial performance
FLSmidth
Interim Report Q1 2022 16
Financial Statements
CASH FLOW STATEMENT
Notes
DKKm
Q1
2022
Q1
2021
EBITDA before special non-recurring items
3
EBITDA, discontinued activities
(1 )
(3 )
Adjustment for gain on sale of property, plant and equipment and
other non-cash items
(16 )
(14 )
Adjusted EBITDA
Change in provisions, pension and employee benefits
(32 )
(13 )
8
Change in net working capital
(219 )
Cash flow from operating activities before financial items and tax
Financial items received and paid
(18 )
(19 )
Taxes paid
(166 )
(102 )
Cash flow from operating activities
(70 )
Acquisition of intangible assets
(36 )
(32 )
Acquisition of property, plant and equipment
(15 )
(19 )
Acquisition of financial assets
(5 )
(3 )
Disposal of enterprises and activities
Disposal of property, plant and equipment
Cash flow from investing activities
(51 )
Dividend paid
(83 )
Exercise of share options
Repayment of lease liabilities
(29 )
(33 )
Change in net interest bearing debt
Cash flow from financing activities
Change in cash and cash equivalents
(13 )
Cash and cash equivalents at beginning of period
Foreign exchange adjustment, cash and cash equivalents
Cash and cash equivalents at 31 March
The cash flow statement cannot be inferred from the published financial information only
Free cash flow
DKKm
Q1
2022
Q1
2021
Free cash flow
(35 )
Free cash flow, adjusted for acquisitions and disposals of
enterprises and activities
(35 )
FLSmidth
Interim Report Q1 2022 17
Financial Statements
Notes
DKKm
31/03 2022
31/12 2021
31/03 2021
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
Deferred tax assets
Investments in associates
9
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
Total assets
Notes
DKKm
31/03 2022
31/12 2021
31/03 2021
EQUITY AND LIABILITIES
10
Share capital
Foreign exchange adjustments
(348 )
(665 )
(773 )
Cash flow hedging
(40 )
(54 )
(25 )
10
Retained earnings
Shareholders in FLSmidth & Co. A/S
Minority interests
(12 )
(3 )
(5 )
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
10
Other liabilities
Current liabilities
Total liabilities
Total equity and liabilities
BALANCE SHEET
FLSmidth
Interim Report Q1 2022 18
Financial Statements
EQUITY STATEMENT
Q1 2022
Q1 2021
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
(665 )
(54 )
(3 )
(1,131 )
(4 )
(6 )
Comprehensive income for the period
Profit/loss for the period
(7 )
Other comprehensive income
Actuarial gains/(losses) on
defined benefit plans
Currency adjustments regarding
translation of entities
(2 )
Cash flow hedging:
- Value adjustments for the period
(13 )
(13 )
(13 )
- Value adjustments transferred to work in
progress
(8 )
(8 )
(8 )
Tax on other comprehensive income
(5 )
(5 )
(5 )
Other comprehensive income total
(2 )
(21 )
Comprehensive income for the period
(9 )
(21 )
Transactions with owners:
Dividend paid
(83 )
(83 )
(83 )
Dividend transferred to other liabilities
(170 )
(170 )
(170 )
Share-based payment
Exercise of share options
Equity at 31 March
(348 )
(40 )
(12 )
(773 )
(25 )
(5 )
FLSmidth
Interim Report Q1 2022 19
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 2021, Key ac-
counting estimates and judgements, pages 57-
58 and to specific notes.
In the first quarter of 2022, the geopolitical situa-
tion was on top of the agenda following the war
in Ukraine. Sanctions are continuously being im-
posed on Russian and Belarusian entities and in-
dividuals resulting in restrictions on imports and
exports. We are closely monitoring the impact
from the war and the sanctions imposed by EU,
US and other western countries. Although the
mining and cement industries are not subject to
sanctions, we have suspended new business in
Russia and Belarus and will in a responsible
manner - wind down our activities in Russia.
We are, however, obliged to fulfil our legal obli-
gations with regards to ongoing activities to the
extent possible.
Besides the direct impact from the sanctions, the
war has also intensified bottlenecks in the global
supply chains that were already current at the
end of 2021. It has also led to further increases in
energy prices, contributed to rising inflation and
fluctuations in foreign exchange rates. Further,
the COVID-19 pandemic and government-im-
posed restrictions continue to pose challenges in
some parts of the world.
The resulting uncertainties have impacted our
key accounting estimates as described below.
We have reassessed our projects to reflect the
expected implications on project financials. This
includes updating of project costs to ensure that
significant expected cost increases are reflected
in the total cost to complete. In cases where cus-
tomers are severely impacted by the war, we as-
sess the likelihood that the customer will be able
to pay the agreed consideration for goods or ser-
vices provided by us. The assessment reflects
the risk of any potential additional expected
credit losses (ECL) on trade receivables against
Russian and Belarussian customers. The assess-
ments also consider the need for write-down of
inventory and other assets.
The change in estimates had no material impact
on the financial statements in the first quarter of
2022. By nature, the updated key accounting es-
timates contain uncertainties, and it is possible
that the outcomes in the next financial period can
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). Special non-re-
curring items, depreciation, amortisation and im-
pairment are therefore separated from the
individual functions and presented in separated
lines.
The income statement classified by function in-
cludes allocation of special non-recurring items,
depreciation, amortisation and impairment.
Interim Report Q1 2022
Income Statement by function
DKKm
Q1
2022
Q1
2021
Gross profit
1,024
852
EBIT
222
101
Special non-recurring items, depreciation, amortisation
and impairment consist of:
(160)
(186)
Special non-recurring items, depreciation, amortisation
and impairment are divided into:
(160)
(186)
FLSmidth
Interim Report Q1 2022 20
Notes
3. SEGMENT INFORMATION
Q1 2022
Q1 2021
FLSmidth Group
FLSmidth Group
DKKm
Mining
Cement
Continuing
activities
Discontinued
activities
2
⁾
Mining
1
⁾
Cement
1
⁾
Continuing
activities
Discontinued
activities
2
⁾
Revenue
3,233
1,473
4,706
0
2,412
1,301
3,713
0
Gross profit
760
347
1,107
0
635
300
935
0
EBITDA before special non-recurring items
303
79
382
(1)
275
12
287
(3)
EBITA
249
53
302
(1)
213
(23)
190
(3)
EBIT
192
30
222
(1)
152
(51)
101
(3)
Gross margin
23.5%
23.6%
23.5%
26.3%
23.1%
25.2%
EBITDA margin before special non-recurring items
9.4%
5.4%
8.1%
11.4%
0.9%
7.7%
EBITA margin
7.7%
3.6%
6.4%
8.8%
-1.7%
5.1%
EBIT margin
5.9%
2.0%
4.7%
6.3%
-3.9%
2.7%
Number of employees at 31 March
6,305
3,734
10,039
0
6,006
4,183
10,189
0
Reconciliation of profit for the period
EBT
193
(1)
92
(3)
1) Starting from 1 January 2022, shared costs are directly attributed to the industries based on consumption and therefore included in the relevant line items. Previously, the costs were allocated to the industries after the The numbers have been restated to
include shared costs in the cost line items for the industries. See next page for further explanation.
2) Discontinued activities mainly consist of non-mining bulk material handling.
FLSmidth
Interim Report Q1 2022 21
Notes
3. SEGMENT INFORMATION
CONTINUED
Starting from 1 January 2022, shared costs are
directly attributed to the industries based on con-
sumption. Therefore, the costs are now included
in the relevant line items, being production costs,
SG&A costs and depreciation and impairment of
property, plant and equipment. Previously, the
costs were allocated to the industries and in-
For 2021, the information has been restated to
reflect the change.
The table below shows the impact on the line
items and margins in the segment information in
Q1 2021 for the two industries.
Restated segment information for Q1 2021, shared costs
DKKm
Mining
Cement
Shared costs
Gross profit
(190)
(130)
320
Gross margin
-0.5%
-0.5%
EBITDA margin before special non-recurring items
-6.9%
-9.5%
EBITA margin before allocation of shared costs
-7.9%
-10.0%
EBITA margin
0.0%
0.0%
EBIT margin
0.0%
0.0%
Number of employees at 31 March
843
530
1,373
FLSmidth
Interim Report Q1 2022 22
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.
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 quarter of 2022, both North America and Eu-
rope, North Africa and Russia regions picked up
a higher share of the Group revenue than the
same period last year. South America and Aus-
tralia regions each represented a 3%-point lower
share of Group revenue in the first quarter of
2022 compared to same period in 2021.
Backlog
The order backlog at 31 March 2022 amounts to
DKK 19,358m (Q1 2021: DKK 16,251m) and repre-
sents the value of outstanding performance obli-
gations on current contracts. The value of out-
standing performance obligations on current
contracts is a combination of value from con-
tracts where we will transfer control at a future
point in time and the value of the remaining per-
formance obligations on contracts where we
transfer control over time.
42% of the backlog is expected to be converted
to revenue in the remainder of 2022. Outstand-
ing backlog related to Russian and Belarusian
contracts amounted to around DKK 2.6bn at the
end of Q1 2022 and is due to uncertainty in-
Revenue split by Regions Q1 2022
%
Revenue split by Regions Q1 2021
%
Backlog
DKKm
26%
19%
22%
15%
9%
9%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
22%
22%
17%
17%
10%
12%
North America
South America
Europe, North Africa, Russia
Sub-Saharan Africa, Middle East & South Asia
Asia
Australia
53%
42%
36%
37%
11%
21%
0
4,000
8,000
12,000
16,000
20,000
Q1 2021 Q1 2022
Within current year Within next year
Subsequent years
Revenue split by recognition principle
Q1 2022
Q1 2021
DKKm
Mining
Cement
Group
Mining
Cement
Group
Total revenue
3,233
1,473
4,706
2,412
1,301
3,713
Revenue split by industry and category
Q1 2022
Q1 2021
DKKm
Mining
Cement
Group
Mining
Cement
Group
Capital business
1,413
635
2,048
804
508
1,312
Service business
1,820
838
2,658
1,608
793
2,401
Total revenue
3,233
1,473
4,706
2,412
1,301
3,713
FLSmidth
Interim Report Q1 2022 23
Notes
5. PROVISIONS
Additions to provisions amounted to DKK 114m in
Q1 2022, compared to DKK 108m in Q1 2021. The
minor increase in additions arise from warranty
provisions and follows the level of activity.
Used provisions amounted to DKK 117m in Q1
2022, compared to DKK 78m in Q1 2021. The pri-
mary driver for this increase is the use of provi-
sions related to discontinued activities and to the
cancellation of the conditional agreement to sell
and lease back parts of the current headquarter
in Valby.
For a description of the main provision catego-
ries see note 2.7 in the 2021 Annual Report.
6. CONTRACTUAL
COMMITMENTS AND
CONTINGENT LIABILITIES
Contingent liabilities at 31 March 2022 amounted
to DKK 3.2bn (31 December 2021: DKK 3.1bn).
Contingent liabilities primarily relate to perfor-
mance and payment guarantees issued to cover
project-related risks, such as performance, pay-
ment, quality, and delay. The volume of such
guarantees amounted to DKK 2.4bn (31 Decem-
ber 2021: DKK 2.3bn). In the event a guarantee is
expected to materialise, a provision is recog-
nized to cover the risk. The remaining contingent
liabilities relate to our involvement in legal dis-
putes, which are already pending with courts or
other authorities and other disputes which may
or may not lead to formal legal proceedings be-
ing initiated against us.
No significant changes have occurred to the na-
ture and extent of our contractual commitments
and contingent liabilities compared to what was
disclosed in note 2.9 in the 2021 Annual Report.
Provisions
DKKm
31/03 2022
31/12 2021
31/03 2021
Provisions
1,124
1,147
1,023
1,124
1,147
1,023
1,124
1,147
1,023
Provisions related to continued activities
DKKm
31/03 2022
31/12 2021
31/03 2021
Provisions
985
999
844
FLSmidth
Interim Report Q1 2022 24
Notes
7. 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 and most
recently with the war in Ukraine. For further infor-
mation on discontinued activities, please refer to
note 2.11 of Annual report 2021.
In addition to provisions of DKK 139m shown in
the table below, discontinued activities accounts
for DKK 357m (31 December 2021: DKK 350m) of
8.
8. NET WORKING CAPITAL
Net working capital as at 31 March 2022 has in-
creased DKK 0.3bn compared to 31 December
2021. The reduction of trade receivables only
partially offset the increase in inventories and net
work in progress at 31 March 2022.
Impact from currencies accounted for 40% of the
increase compared to 31 December 2021.
Utilisation of supply chain financing increased
slightly in the first quarter of 2022 to DKK 547m
(31 December 2021: DKK 490m).
Net working capital
DKKm
31/03 2022
31/12 2021
31/03 2021
Net working capital
1,354
1,058
1,678
Cash flow effect from change in net working capital
(219)
706
149
Discontinued activities effect on cash flow from operating activities
DKKm
Q1
2022
2021
Q1
2021
Cash flow from operating activities before financial items and tax
(15)
(187)
(9)
Cash flow from operating activities
(15)
(188)
(9)
Discontinued activities share of Group provisions disclosed in note 5
DKKm
31/03 2022
31/12 2021
31/03 2021
Provisions
139
148
179
FLSmidth
Interim Report Q1 2022 25
Notes
9. 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 quarter of 2022 or
during 2021.
10. SHAREHOLDERS’ EQUITY
At the Annual General Meeting 30 March 2022,
a dividend of DKK 3 per share was declared. The
dividend is paid out in April and is included at an
amount equal to DKK 170m in Other liabilities in
the balance sheet 31 March 2022.
In September 2021, an issue of 6,400,000 new
shares of DKK 20 each at a price of DKK 228 per
share was completed. The proceeds received
net of transaction costs of DKK 25m increased
equity in 2021.
11. EVENTS AFTER THE
BALANCE SHEET DATE
We are not aware of any subsequent matters that
nancial position at 31 March 2022.
12. ACCOUNTING POLICIES
The condensed interim report of the Group for
the first quarter of 2022 is presented in accord-
ance with IAS 34, Interim Financial Reporting, as
approved by the EU and additional Danish dis-
closure requirements regarding interim reporting
by listed companies.
Apart from the below mentioned changes, the
accounting policies are unchanged from those
applied in the 2021 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 2021 Annual
Report for further details.
Alternative Performance Measures (APM) are un-
changed from those applied in the 2021 Annual
Report, refer to note 7.4 in the 2021 Annual Re-
port for a description of used APM.
Changes in accounting policies
As of 1st January 2022, the FLSmidth Group has
implemented all new or amended accounting
standards and interpretations as adopted by the
EU and applicable for the 2022 financial year.
This includes the changes to IFRS 3 Business
Combinations, IAS 16 Property, Plant and Equip-
ment, IAS 37 Provisions, Contingent Liabilities
and Contingent Assets and Annual Improvement
2018-2020. The latter includes changes to IFRS
9 Financial Instruments and IFRS 16 Leases.
The implementation has not had and is not ex-
pected to have significant impact on the consoli-
dated financial statements.
Financial instruments
Q1 2022
DKKm
Level 1
Level 2
Level 3
Total
6
(28)
47
25
2021
DKKm
Level 1
Level 2
Level 3
Total
6
(2)
43
47
FLSmidth
Interim Report Q1 2022 26
Statements
Executive management
Board of directors
STATEMENT BY MANAGEMENT
FLSmidth
Interim Report Q1 2022 27
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 &
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,
essfully market
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
Interim Report
1 January –
3
1 March 2022
Tel.: +45 36 18 18 00
Fax: +45 36 44 11 46
CVR No. 58180912