Interim Report
Q1 2024
1 January –
31 March 2024
Company announcement no. 8
CVR No. 58180912
FLSmidth
■
Interim Report Q1 2024 2
Management review
Highlights Q1 2024 4
Financial performance highlights Q1 2024 5
Sustainability performance highlights Q1
2024 6
Key figures 7
2024 financial guidance 8
Mining financial performance 9
Cement financial performance 11
Non-Core Activities financial performance 13
Consolidated Quarterly financial
performance 14
Consolidated
Condensed Financial
statements
Income statement 18
Statement of comprehensive income 18
Cash flow statement 19
Balance sheet 20
Equity statement 21
Notes
1.Key accounting estimates and
judgements 23
2. Income statement by function 23
3. Segment information 24
4. Revenue 25
5. Provisions 26
6. Contractual commitments and contingent
liabilities 26
7. Discontinued activities 26
8. Net working capital 27
9. Business acquisitions 27
10. Disposal of activities 27
11. Shareholders’ equity 28
12. Events after the balance sheet date 28
13. Accounting policies 28
Statements
Statement by Management 30
Forward looking statements 31
Contents
Introduction Highlights Business Mining business Cement business Non-Core Activities Financial performance Governance Financial statements
FLSmidth
■
Interim Report Q1 2024 3
Management
review
Highlights Q1 2024 4
Financial performance highlights Q1 2024 5
Sustainability performance highlights Q1 2024 6
Key figures 7
2024 financial guidance 8
Mining financial performance 9
Cement financial performance 11
Non-Core Activities financial performance 13
Consolidated Quarterly financial performance 14
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 4
We have had a good start to the year, where we have not only progressed on all
our core transformation activities, but also seen further improvements in profita-
bility in both Mining and Cement as well as shown good progression on all our
Science Based Targets.
The market dynamics in the mining industry remain unchanged compared to
prior quarter. Consequently, we continue to see a stable and healthy service
market, whereas the products market – despite the recent increases in key com-
modity prices such as copper and gold – remains softer due to persisting hesita-
tion by some customers on larger investment decisions as well as continued per-
mitting issues in many countries. Meanwhile, we remain focused on simplifying
our Mining operations and continue to invest into key commercial areas and in-
novation, all of which with the aim of boosting our long-term growth opportunities
in the Service business.
The largely stable cement market provides good opportunities for our Service
business in our core market clusters, whereas further de-risking of our Products
business to preserve profitability is ongoing.
Finally, we are progressing on our exit from Non-Core Activities, and we
remain confident that by end of 2024, we will have fully exited this segment.
The good start to the year makes us confident that we can achieve both our am-
bitions for 2024 as well as our long-term targets.
Mikko Keto, Group CEO
Mining
Cement
■
3% organic order intake growth
reflecting a stable Service market
and large Products order wins
■
Organic revenue decline of 11%
reflecting timing of both Service-
and Products order execution
■
Strong gross margin driven by
mix and backlog execution
■
Continued profitability progress
with adj. EBITA margin of 11.5%
■
22% decrease in order intake re-
flecting unchanged market condi-
tions and continued de-risking
■
Revenue decline of 24% due to
portfolio pruning and divestments
■
Adj. EBITA margin of 7.7% re-
flecting good execution
■
Divestment of MAAG business
completed on 1 March 2024
Sustainability
Performance and other
■
Good progress on all our Science
Based Targets
■
Safety performance improved
from end of 2023 but remains be-
hind our 2024 target
■
Separation of Mining and Cement
progressing according to plan
■
Continued business simplification
with >1,500 fewer FTEs vs. Q1’23
■
Financial guidance for FY2024
maintained
Highlights Q1 2024
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 5
Financial performance highlights Q1 2024
Mining
Cement
Non-Core Activities
Group
Order intake (DKKm)
0.0%
4,176
Order intake (DKKm)
▼ -22.5%
1,042
Order intake (DKKm)
▼ -73.0 %
30
Order intake (DKKm)
▼ -6.8 %
5,248
Revenue (DKKm)
▼ -14.4 %
3,581
Revenue (DKKm)
▼ -23.6 %
1,208
Revenue (DKKm)
▼ -79.9 %
50
Revenue (DKKm)
▼ -19.6 %
4,839
EBITA & EBITA margin (DKKm - %)
▲ 35.0 %
370 10.3% (adj. 11.5%)
EBITA & EBITA margin (DKKm - %)
▼ -16.2 %
57 4.7% (adj. 7.7%)
EBITA & EBITA margin (DKKm - %)
▲ 42.1 %
(62) -124.0%
EBITA & EBITA margin (DKKm - %)
▲ 55.3 %
365 7.5% (adj. 9.2%)
Revenue split by Service & Products (%)
Revenue split by Service & Products (%)
Revenue split by Service & Products (%)
Cash flow from operating activities
DKK (352)m ▲ from DKK (404)m in Q1 2023
Earnings per share
DKK 3.4 ▲ from DKK 1.5 in Q1 2023
Net working capital ratio
8.4% ▼ from 10.6% end of Q1 2023
NIBD/EBITDA
0.5x ▼ from 1.0x end of Q1 2023
4,177
4,176
Q1 2023
Q1 2024
1,344
1,042
Q1 2023
Q1 2024
111
30
Q1 2023
Q1 2024
5,632
5,248
Q1 2023
Q1 2024
4,185
3,581
Q1 2023
Q1 2024
1,582
1,208
Q1 2023
Q1 2024
249
50
Q1 2023
Q1 2024
6,016
4,839
Q1 2023
Q1 2024
274
370
Q1 2023
Q1 2024
68
57
Q1 2023
Q1 2024
(107)
(62)
Q1 2023
Q1 2024
235
365
Q1 2023
Q1 2024
67%
(Q1 2023: 65%)
33%
(Q1 2023: 35%)
Service
Products
60%
(Q1 2023: 56%)
40%
(Q1 2023: 44%)
Service
Products
10%
(Q1 2023: 37%)
90%
(Q1 2023: 63%)
Service
Products
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 6
Sustainability performance highlights Q1 2024
Scope 1 and 2 greenhouse
gas emissions
tCO
2
e (market-based)
Scope 3: Economic intensity
(use of sold products)
tCO
2
e/DKKm order intake
Spend with suppliers with
science-based targets
%
In Q1 2024, we progressed
positively in all our KPIs linked to
the Science Based Targets
initiative. Whilst our safety
numbers have improved since
last year’s deterioration,
performance remains behind
target. The number of women
managers decreased during the
first quarter from ongoing
restructuring.
FLSmidth receives large HGPRs orders
During the quarter FLSmidth received two separate High-
Pressure Grinding Rolls (HGPR) orders – one in South
America and one in the Asia Pacific region – for a total of
five HPGRs. Our HGPR technology is well known to be
among the most energy-efficient comminution technolo-
gies available, lowering power consumption, while provid-
ing a more stable grinding operation and eliminating the
need for grinding media.
FLSmidth wins three Technology and Inno-
vation awards
Our REFLUX™ Concentrating Classifier (RCC™), REFLUX™
Flotation Cell (RFC™) and HPGR Pro all won awards in
technology and Innovation in 2023: two presented from
Mining Technology’s Excellence Awards and the other
from Mining Magazine. The RCC™ offers improved perfor-
mance efficiency to drive mineral recovery from ores with
declining grades; whilst the RFC™ combines several tech-
nologies, resulting in superior flotation performance. Our
HPGR Pro enhances operational efficiency and sustaina-
bility, by increasing throughput by up to 20% and reduc-
ing energy consumption by up to 15% relative to the
standard HPGR.
8,947
Target: 39,445 in 2024
18.0% improvement
2,530
Target: 4,065 by 2030
53.4% improvement
19.0
Target: 15% in 2024
6.4%-points improvement
Scope 1 and 2 CO
2
emissions were reduced by 18.0%
compared to Q1 2023. Consolidation of Mining Tech-
nologies sites during 2023 and the recent sale of
MAAG has supported a reduction in emissions. To sup-
port further emissions reductions, we are running en-
ergy efficiency programmes in manufacturing sites to
reduce energy use.
Scope 3 economic intensity for the first quarter im-
proved from the end of last year by 53.4%. The signifi-
cant reduction was driven by the order mix, with Mining
orders representing an increased share of order intake
relative to Cement orders during the quarter. This was
driven by a decline in Cement Products orders, includ-
ing pyro systems. We expect quarterly volatility with
this KPI relating to order mix.
Spend with suppliers with science-based targets has in-
creased by 6.4%-points compared to 2023, represent-
ing a positive start towards meeting our full year 2024
target. This was primarily driven by a greater share of
our large suppliers committing to the Science Based
Targets initiative. The improvement reflects our ongo-
ing engagement with suppliers to promote environmen-
tally responsible practices.
Water withdrawal
m
3
Women managers
%
Safety (Total recordable injury rate)
Total recordable injury rate/million working
hours
30,523
Target: 192,738 in 2024
19.7% improvement
15.5
Target: 18.4% in 2024
0.8%-points reduction
2.3
Target: 1.1 in 2024
0.3 improvement
Water withdrawal was reduced by 19.7% compared to
Q1 2023. Consolidation of Mining Technologies sites
during 2023 and the recent sale of MAAG has sup-
ported a drop in water use. Exposure to water-
stressed areas increased with acquired Minng Tech-
nologies sites and as regions experienced increasing
water stress. We will launch a water conservation
plan during 2024.
The percentage of women managers decreased in the
first quarter of 2024. The overall number of managers
was reduced during the quarter. A large portion were
from parts of the organisation with a larger representa-
tion of our female workforce. Continued efforts are
needed to regain our progress towards our targets de-
spite short term swings, in recruiting as well as growing
internal successors.
Safety performance has improved by 0.3 compared to
Q1 2023 but remains behind our target for the full year
2024. To support improvement in safety, we have in-
creased focus on safety initiatives towards the end of
2023. This includes our ‘GoLookSee’ programme en-
gaging all shop floor operators in identifying and re-
porting safety risks through our safety walks and focus
on improving our machine safety standards.
10,913
8,947
Q1 2023
Q1 2024
5,430
2,530
2023
Q1 2024
12.6%
19.0%
2023
Q1
2024
38,030
30,523
Q1 2023
Q1 2024
16.3%
15.5%
2023
Q1 2024
2.6
2.3
Q1 2023
Q1 2024
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 7
Key figures
DKKm, unless otherwise stated
Q1
2024
Q1
2023
2023
Income statement
Revenue
4,839
6,016
24,106
Gross profit
1,415
1,397
6,087
EBITDA
442
322
1,761
EBITA
365
235
1,438
Adjusted EBITA*
443
362
1,919
EBIT
305
177
1,200
Financial items, net
(2)
(16)
(146)
EBT
303
161
1,054
Profit for the period, continuing activities
194
103
672
Loss for the period, discontinued activities**
-
(19)
(181)
Profit for the period
194
84
491
Orders
Order intake
5,248
5,632
21,376
Order backlog
17,482
22,027
17,593
Earning ratios
Gross margin
29.2%
23.2%
25.3%
EBITDA margin
9.1%
5.4%
7.3%
EBITA margin
7.5%
3.9%
6.0%
Adjusted EBITA margin*
9.2%
6.0%
8.0%
EBIT margin
6.3%
2.9%
5.0%
EBT margin
6.3%
2.7%
4.4%
Cash flow
Cash flow from operating activities (CFFO)
(352)
(404)
623
Acquisitions of property, plant and equipment
(58)
(24)
(176)
Cash flow from investing activities (CFFI)
46
(24)
(257)
Free cash flow
(306)
(428)
366
Free cash flow adjusted for acquisitions and
disposals of enterprises and activities
(454)
(428)
201
Balance sheet
Net working capital
1,935
2,613
1,382
Net interest-bearing debt (NIBD)
(830)
(1,187)
(639)
Total assets
26,904
29,643
27,011
CAPEX
109
79
604
Equity
11,085
10,611
10,828
Dividend to shareholders, paid
-
-
231
DKKm, unless otherwise stated
Q1
2024
Q1
2023
2023
Financial ratios
Book-to-bill
108.5%
93.6%
88.7%
Order backlog / Revenue
76.2%
95.1%
73.0%
Return on equity
7.1%
3.1%
4.5%
Equity ratio
41.2%
35.8%
40.1%
ROCE, average
7.8%
5.1%
8.2%
Net working capital ratio, end
8.4%
10.6%
5.7%
NIBD / EBITDA
0.5.x
1.0x
0.4x
Capital employed, average
18,078
17,034
17,552
Number of employees
8,769
10,345
9,377
Share ratios
Cash flow per share (CFPS), (diluted), (DKK)
(6.2)
(7.1)
10.9
Earnings per share (EPS), (diluted), (DKK)
3.4
1.5
8.7
Share price, (DKK)
344.0
262.2
287.2
Number of shares (1,000), end
57,650
57,650
57,650
Market capitalisation, end
19,832
15,116
16,557
Sustainability key figures
Scope 1 & 2 GHG emissions (tCO2e) market-based
8,947
10,913
38,022
Scope 3 Economic intensity***
2,530
5,430
Spend with suppliers with science-based targets
19.0%
10.8%
12.6%
Water withdrawal (m3)
30,523
38,030
167,610
Women managers
15.5%
14.9%
16.3%
Safety, TRIR Total Recordable Injury Rate (including contractors)
2.3
2.6
2.7
Other key figures
Quality, DIFOT Delivery In Full On Time
83.2%
83.0%
81.9%
Use of alternative performance measures
Throughout the report, we present financial measures which are not defined according to IFRS. We refer to note 7.4, alternative performance
measures, and note 7.8, Definition of terms in Annual Report 2023 for further information.
The financial ratios have been computed in accordance with the guidelines of the Danish Finance Society. Refer to note 7.8 in Annual
Report 2023 for definitions of terms.
*To reflect the underlying business performance, we present an adjusted EBITA margin by excluding costs related to our ongoing
transformation activities and the separation of Mining and Cement of DKK 78m. In 2023, adjustments were made for integration costs
related to the integration of Mining Technologies.
**From 1 January 2024, the remaining responsibilities to finalise legacy projects within discontinued activities are included in Non-Core
Activities.
***From 2024, we measure Scope 3 Economic intensity on a quarterly basis.
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 8
2024 financial guidance
Financial guidance for 2024 is maintained. The guidance reflects the ongoing business simplification and transformation efforts, continued
improvement in the core Mining business, realisation of the full cost synergies from the Mining Technologies acquisition, continued profitability
progress in the underlying Cement business and the ongoing exit from the Non-Core Activities segment.
Mining
Cement
Non-Core Activities
Group
Revenue (DKKbn)
16.0-17.0
(DKK 3.6bn)
Revenue (DKKbn)
4.0-4.5
(DKK 1.2bn)
Revenue (DKKm)
250-350
(DKK 50m)
Revenue (DKKbn)
20.0-21.5
(DKK 4.8bn)
Adj. EBITA margin
11.5-12.5%
(11.5%)
Adj. EBITA margin
5.5-6.5%
(7.7%)
Adj. EBITA margin
9.0-10.0%
(9.2%)
EBITA (DKKm)
Loss of 200-300
(Loss of DKK 62m)
EBITA margin
7.5-8.5%
(7.5%)
Note: The numbers in brackets represent Q1 2024 results.
Compared to 2023, we expect market demand to
be softer in 2024, mainly driven by the Products
business due to some customers delaying larger
investment decisions. However, the mining indus-
try continues to benefit from a positive long-term
outlook for minerals crucial to global economic
development and the green transition.
The guidance for adjusted EBITA margin includes
adjustment for transformation and separation
costs of around DKK 200m for the full year 2024.
The adjusted EBITA margin is impacted by the re-
alisation of the full cost synergies from the Mining
Technologies acquisition, cost base inflation and
re-investment of parts of the synergies into key
commercial areas to support our CORE’26 strat-
egy and to fuel our long-term growth ambitions.
We expect the short-term outlook for the cement
industry to remain impacted by macroeconomic
uncertainty.
The guidance for revenue and adjusted EBITA
margin reflects the ongoing execution of the
‘GREEN’26’ strategy, continued business simplifi-
cation and product portfolio pruning, including the
completed sale of the MAAG business in Q1 2024.
Further, the guidance for adjusted EBITA margin
includes adjustment for transformation and sepa-
ration costs of around DKK 100m for the full year
2024.
The guidance for revenue reflects continued exe-
cution of the order backlog and contract negotia-
tions aimed at reducing the scope of the remain-
ing Non-Core Activities order backlog. The EBITA
guidance reflects the operational loss-making na-
ture of the business as well as costs related to fi-
nalise the exit of the business segment by end of
2024.
The Consolidated Group guidance reflects the
sum of the guidance for the three business seg-
ments.
The guidance for 2024 is subject to uncertainty
due macroeconomic uncertainty and geopolitical
turmoil.
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 9
We continue to observe a stable
service market, while softness in
the products market persists. The
long-term industry outlook
remains positive, supported by
economic development and a
growing demand for minerals
crucial for the green transition.
Throughout Q1 2024, the global mining markets
have remained active within major commodities.
This especially applies to the global copper and
gold markets. Despite recent increases in key
commodity prices, such as for copper and gold,
we continue to see customer hesitations on large
capital investment decisions, permitting chal-
lenges in many countries and prevailing macroe-
conomic and geopolitical uncertainty.
Looking further into 2024, the service market is
expected to remain stable and active, and we
continue to see a steady inflow of customer ser-
vice enquiries from miners aimed at improving
their operating performance through continued in-
vestments in productivity and sustainability solu-
tions.
The products market is inherently more volatile,
and demand currently remains soft, albeit with a
prevailing demand for products offering high-effi-
ciency and sustainability solutions.
Order intake development in Q1 2024
Mining order intake was on par with the level from
Q1 2023. Excluding currency effects, the order in-
take increased by 3% driven by a higher Products
order intake compared to Q1 2023.
Service order intake decreased by 4% compared
to Q1 2023, mainly explained by currency effects
and very high order intake in the comparative
quarter of 2023. Overall, market conditions for
Service remain stable and at healthy levels.
The 9% increase in Products order intake was
mainly a result of two large Products orders an-
nounced in Q1 2024 with a total value of DKK
680m compared to one large order valued at DKK
350m in Q1 2023. The large orders announced in
Q1 2024 comprised comminution technologies to
a leading copper miner in South America, includ-
ing ball mills and HPGRs, as well as, among other
things, the delivery of two HPGRs to a copper con-
centrator in the Asia Pacific region.
During the quarter, Service and Products orders
accounted for 67% and 33% of the total order in-
take, respectively, compared to 70% and 30% in
Q1 2023, respectively.
Mining financial performance
Order intake split by
region, Q1 2024
Order intake split by
Service and Products, Q1 2024
Order intake split by
commodity, Q1 2024
7%
22%
12%
35%
24%
ECANA
APAC
SSAMESA
SAMER
NAMER
67%
(Q1 2023: 70%)
33%
(Q1 2023: 30%)
Service
Products
49%
11%
6%
1%
8%
25%
Copper
Gold
Coal
Fertilizer
Iron ore
Other
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 10
Revenue development in Q1 2024
Q1 2024 revenue decreased by 14%. Excluding
currency effects, revenue decreased organically
by 11%.
Service revenue decreased by 11% compared to
Q1 2023 to DKK 2,404m. The year-on-year de-
crease was primarily due to lower revenue within
spare parts and consumables driven by timing of
order execution with revenue from a number of
contracts in South America being realised in early
2023 as well as the ongoing exit from basic la-
bour services. The decline was partly offset by rel-
atively higher revenue within upgrades & retrofits.
Products revenue decreased by 21% compared to
Q1 2023. The decrease was driven by our de-risk-
ing portfolio strategy and timing of the execution
of certain larger Products orders.
Service and Products revenue comprised 67% and
33% of total Mining revenue in Q1 2024,
respectively, compared to 65% and 35% in Q1
2023, respectively.
Gross profit development in Q1 2024
Gross profit increased by 11% to DKK 1,180m, from
DKK 1,065m in Q1 2023. The corresponding gross
margin increased from 25.4% in Q1 2023 to 32.9%
in Q1 2024. This represents the highest gross mar-
gin achieved for our Mining business in several
years, and was a result of good margin execution,
mix and our de-risking strategy.
EBITA development in Q1 2024
The Adjusted EBITA margin was 11.5% when ex-
cluding transformation and separation costs of
DKK 42m, which relates to our ongoing pure play
separation of the Mining and Cement businesses
as well as our ongoing business simplification.
The improvement in Adjusted EBITA margin was
driven by continued strong execution and realised
synergies from the acquisition of Mining Technolo-
gies. The EBITA margin increased to 10.3% from
6.5% in Q1 2023.
Employees
The number of employees in Mining has been re-
duced by 268 since the end of Q1 2023. This re-
duction reflects the synergy takeout related to the
integration of Mining Technologies, partly offset
by new hirings in key commercial areas to fuel our
long-term growth ambitions to support our
CORE’26 strategy.
Mining financial performance
Growth in order intake and revenue
in Q1 2024 (vs. Q1 2023)
Revenue and EBITA margin
DKKm EBITA margin %
Revenue split by
Service and Products, Q1 2024
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
4,500
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Products Service
EBITA margin % Adj. EBITA margin %
67%
(Q1 2023: 65%)
33%
(Q1 2023: 35%)
Service
Products
Order
intake
Revenue
Organic
3%
-11%
Currency
-3%
-3%
Total growth
0%
-14%
Mining
(DKKm)
Q1 2024
Q1 2023
Change (%)
Order intake
4,176
4,177
0%
- Hereof service order intake
2,784
2,902
-4%
- Hereof products order intake
1,392
1,275
9%
Order backlog
12,581
13,876
-9%
Revenue
3,581
4,185
-14%
- Hereof service revenue
2,404
2,700
-11%
- Hereof products revenue
1,177
1,485
-21%
Gross profit
1,180
1,065
11%
Gross margin
32.9%
25.4%
Adjusted EBITA
412
400
3%
Adjusted EBITA margin
11.5%
9.6%
EBITA
370
274
35%
EBITA margin
10.3%
6.5%
Number of employees
6,553
6,821
-4%
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 11
Following a mixed year for the
cement industry in 2023, Q1
2024 has shown some promise,
as cement demand grows
alongside infrastructure
investments in Asia, the Americas
and the Middle East. While global
geopolitical and macroeconomic
uncertainties remain, the cement
industry’s continued focus on
sustainability will drive long-term
demand for our services and
solutions.
In 2023, global cement demand declined by ap-
proximately 2% driven primarily by a challenging
industry cycle in China, which accounts for over
half of global cement capacity. However, growing
infrastructure investments across Asia, the
Americas, and the Middle East are driving im-
provements in global cement demand.
In addition to market demand, the impact of regu-
latory and commercial pressure to deliver a net-
zero future forms another significant long-term
growth driver. Across the world, cement plants are
focused on optimisation projects, seeking to de-
carbonise in the first instance through clinker sub-
stitution, fossil fuels replacement and reduced en-
ergy consumption, while keeping an eye on
developing carbon capture and storage technolo-
gies.
We are well-positioned to support the industry
with services and solutions that enable progress
towards their sustainability goals.
Order intake development in Q1 2024
Cement organic order intake decreased by 22% in
Q1 2024 compared to Q1 2023.
Service order intake decreased by 11% compared
to Q1 2023, reflecting the divestments of
the AFT business in Q3 2023, the sale of the
MAAG business on 1 March 2024 and exit from se-
lected markets. However, during the quarter, we
have seen underlying growth in orders for spare
parts and professional services within our core
market clusters, partly offset by lower orders for
upgrades & retrofits.
Products order intake decreased by 40% com-
pared to Q1 2023 driven in part by the continued
pruning of our product portfolio, exit of larger pro-
jects with a significant risk profile and lower mar-
gins as well as the impact from the divested busi-
nesses.
Service and Products comprised 69% and 31% of
the total Cement order intake in Q1 2024, respec-
tively, compared to 60% and 40% in Q1 2023, re-
spectively.
Order intake split by
cluster in Q1 2024
*For more information on clusters, please refer to page 31 in
the 2023 Annual Report
Order intake split by
Service and Products, Q1 2024
Cement financial performance
7%
14%
13%
2%
4%
20%
11%
28%
India
Turkey
Denmark
China
Indonesia
Export cluster
Brazil
US
69%
(Q1 2023: 60%)
31%
(Q1 2023: 40%)
Service
Products
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 12
Revenue development in Q1 2024
Revenue decreased by 24% compared to Q1
2023. Excluding currency effects, revenue de-
creased organically by 23%.
Service revenue decreased by 19% compared to
Q1 2023 due to the divestment of the AFT busi-
ness completed in Q3 2023 and the MAAG busi-
ness divestment on 1 March 2024.
Products revenue decreased by 30% compared to
Q1 2023 driven in part by the continued pruning of
our product portfolio, exit of larger projects with a
significant risk profile and lower margins as well
as the impact from the divested businesses.
Service and Products comprised 60% and 40% of
total Cement revenue in Q1 2024, respectively,
compared to 56% and 44% in Q1 2023, respec-
tively.
Gross profit development in Q1 2024
Gross profit decreased by 26% in Q1 2024 com-
pared to Q1 2023 as a result of the lower revenue,
inventory write downs as well as costs related to
the separation of the Mining and Cement busi-
ness, partly offset by good margin execution. The
corresponding gross margin decreased by 0.7%-
points to 22.8% in Q1 2024.
EBITA development in Q1 2024
The Adjusted EBITA margin was 7.7% when ex-
cluding transformation and separation costs of
DKK 36m. EBITA decreased by 16% in Q1 2024 to
DKK 57m compared to DKK 68m in Q1 2023. The
decrease was primarily a result of relatively
higher SG&A costs due to the ongoing separation
of the Mining and Cement businesses, partly off-
set by the net gain from the divestment of the
MAAG business. The corresponding EBITA margin
improved by 0.4%-points to 4.7% in Q1 2024.
Excluding the net gain of around DKK 30m from
the sale of the MAAG business, the EBITA margin
was 2.2% and the Adjusted EBITA margin was
5.2%.
Employees
The number of employees in Cement was reduced
by 896 compared to end Q1 2023. The reduction
reflects continued optimisation of our global foot-
print, simplification of the operating model to im-
prove operations and long-term profitability as
part of the separation of the Mining and Cement
businesses as well as the divestments of the AFT
business completed in Q3 2023 and the MAAG
business completed on 1 March 2024.
Cement financial performance
Growth in order intake and revenue
in Q1 2024 (vs. Q1 2023)
Revenue and EBITA margin
DKKm EBITA marginn
Revenue split by
Service and Products, Q1 2024
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0
500
1,000
1,500
2,000
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Products Service
EBITA margin % Adjusted EBITA margin
60%
(Q1 2023: 56%)
40%
(Q1 2023: 44%)
Service
Products
Order intake
Revenue
Organic
-22%
-23%
Currency
0%
-1%
Total growth
-22%
-24%
Cement
(DKKm)
Q1 2024
Q1 2023
Change (%)
Order intake
1,042
1,344
-22%
- Hereof service order intake
721
813
-11%
- Hereof products order intake
321
531
-40%
Order backlog
4,422
6,066
-27%
Revenue
1,208
1,582
-24%
- Hereof service revenue
721
890
-19%
- Hereof products revenue
487
692
-30%
Gross profit
275
372
-26%
Gross margin
22.8%
23.5%
Adjusted EBITA
93
68
37%
Adjusted EBITA margin
7.7%
4.3%
EBITA
57
68
-16%
EBITA margin
4.7%
4.3%
Number of employees
2,128
3,024
-30%
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 13
Order intake development in Q1 2024
Order intake for Non-Core Activities (NCA)
amounted to DKK 30m, all of which related to
Products order intake. The order intake was re-
lated to contractual obligations and parts already
in stock.
Order backlog development in Q1
2024
Order backlog amounted to DKK 479m by end of
Q1 2024 representing a decrease of around DKK
0.1bn compared to Q4 2023 and a decrease of
around DKK 2.4bn since the establishment of the
NCA segment as of Q4 2022. The decrease re-
flected the divestment to KOCH Solutions and ex-
ecution of the order backlog as well as continued
re-scoping and contract terminations. The majority
of the remaining executable order backlog is to be
executed in countries within the Asia Pacific and
the Europe, Central Asia and Northern Africa re-
gions.
Revenue development in Q1 2024
Revenue amounted to DKK 50m in Q1 2024. Ser-
vice and Products accounted for 10% and 90% of
total NCA revenue, respectively.
Gross profit development in Q1 2024
Gross profit was negative and amounted to
DKK -40m. The corresponding gross margin
amounted to -80.1% reflecting the general volatil-
ity and operationally loss-making nature of the
NCA segment.
EBITA development in Q1 2024
EBITA for NCA amounted to DKK -62m, corre-
sponding to a EBITA margin of -124% driven by the
negative gross profit and costs related to the on-
going exit of the activities in the segment.
Non-Core Activities financial performance
Non-Core Activities
(DKKm)
Q1 2024
Q1 2023
Change (%)
Order intake
30
111
-73%
- Hereof service order intake
-
80
-100%
- Hereof products order intake
30
31
-3%
Order backlog
479
2,085
-77%
Revenue
50
249
-80%
- Hereof service revenue
5
92
-95%
- Hereof products revenue
45
157
-71%
Gross profit
(40)
(40)
0%
Gross margin
-80.1%
-16.1%
EBITA
(62)
(107)
42%
EBITA margin
-124.0%
-43.0%
Number of employees
88
500
-82%
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 14
Order intake in Q1 2024
Order intake decreased by 7% in Q1 2024 to DKK
5,248m compared to DKK 5,632m in Q1 2023. Ex-
cluding currency effects, order intake decreased
organically by 4%.
Service order intake decreased by 8% compared
to Q1 2023, driven by relatively lower order in-
take for both the Mining and Cement businesses.
Products order intake decreased by 5% com-
pared to Q1 2023 driven by lower Cement Prod-
ucts orders.
Service and Products represented 67% and 33%
of total order intake, respectively, which was un-
changed compared to Q1 2023.
Order backlog and maturity in Q1
2024
The order backlog decreased by 1% to DKK
17,482m compared to the prior quarter (Q4 2023:
DKK 17,593m) as the order intake in Q1 2024 was
more than offset by the divestment of MAAG busi-
ness, the continued wind-down of the NCA seg-
ment and the ongoing execution of the order
backlog.
Outstanding order backlog related to Russian and
Belarusian contracts was unchanged and
amounted to DKK 0.1bn at the end of Q1 2024.
The remaining orders are suspended by FLS-
midth, and potential termination options are being
investigated. Due to the uncertain nature of these
contracts, they have been included in the backlog
maturity for ‘Within 3 years and beyond’.
Revenue in Q1 2024
Revenue decreased by 20% to DKK 4,839m in Q1
2024, compared to Q1 2023, driven by lower rev-
enue in both the Mining and Cement business. Or-
ganically, revenue decreased by 17% compared
to Q1 2023.
The decrease in Service revenue by 15% com-
pared to Q1 2023 was driven by both the Mining
and Cement businesses. For Mining, the decrease
was due to timing of order execution as well as
the exit from basic labour services. For Cement,
the development reflects the divestments.
Products revenue decreased by 27% compared to
Q1 2023. For Mining, the decrease was driven by
our de-risking portfolio strategy and timing of the
execution of certain larger Products orders. For
Cement, the decrease was driven by our de-risk-
ing strategy, exit from larger projects as well as
divestments.
Service and Products revenue accounted for 65%
and 35% of total revenue in Q1 2024, respec-
tively, compared to 61% and 39%, respectively, in
Q1 2023.
Consolidated Quarterly financial performance
Order intake split by
Service and Products Q1 2024
DKKm
0
2,000
4,000
6,000
8,000
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Service order intake Products order intake
Growth in order intake in Q1 2024
(vs. Q1 2023)
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
3%
-22%
-71%
-4%
Currency
-3%
0%
-2%
-3%
Total growth
0%
-22%
-73%
-7%
Growth in revenue in Q1 2024
(vs. Q1 2023)
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-11%
-23%
-79%
-17%
Currency
-3%
-1%
-1%
-3%
Total growth
-14%
-24%
-80%
-20%
Backlog
maturity
Mining
Cement
Non-Core
Activities
FLSmidth
Group
2024
59%
45%
52%
56%
2025
32%
33%
0%
31%
2026 and
beyond
9%
22%
48%
13%
At the end of Q1 2024, outstanding backlog for the NCA segment
amounted to DKK 479m. As a portion of the backlog is expected to
be terminated, this has been included in the backlog maturity for
'2026 and beyond'. It remains the expectation that the NCA
segment will be fully exited by end-2024.
Group
(DKKm)
Q1 2024
Q1 2023
Change (%)
Order intake
5,248
5,632
-7%
- Hereof service order intake
3,505
3,795
-8%
- Hereof products order intake
1,743
1,837
-5%
Order backlog
17,482
22,027
-21%
Revenue
4,839
6,016
-20%
- Hereof service revenue
3,130
3,682
-15%
- Hereof products revenue
1,709
2,334
-27%
Gross profit
1,415
1,397
1%
Gross margin
29.2%
23.2%
SG&A cost*
(1,008)
(1,100)
-8%
SG&A ratio
20.8%
18.3%
Adjusted EBITA
443
362
22%
Adjusted EBITA margin
9.2%
6.0%
EBITA
365
235
55%
EBITA margin
7.5%
3.9%
Number of employees
8,769
10,345
-15%
*SG&A cost has now been presented without Other operating net income. Comparative information has been restated.
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 15
Profit in Q1 2024
Gross profit and margin
Gross profit increased by 1% to DKK 1,415m in Q1
2024, compared to DKK 1,397m in Q1 2023, re-
flecting the good margin execution, mix effects
and our de-risking strategy, partly offset by lower
revenue in the quarter as well as costs related to
our ongoing transformation activities and the pure
play separation of the Mining and Cement busi-
nesses. The corresponding gross margin in-
creased to 29.2% in Q1 2024 compared to 23.2%
in Q1 2023. This represents the highest gross mar-
gin achieved in several years.
Research & development costs
In Q1 2024, total research and development costs
(R&D) amounted to DKK 71m, representing 1.5% of
revenue (Q1 2023: 1.4%).
(DKKm)
Q1 2024
Q1 2023
Production costs
45
52
Capitalised
26
30
Total R&D
71
82
SG&A costs
Sales, general and administrative costs (SG&A)
decreased by 8% to DKK 1,008m compared to Q1
2023, reflecting positive effects from our ongoing
transformation efforts and the realised synergies
from the acquisition of Mining Technologies partly
offset by transformation and separation costs.
Further, currencies had a favourable impact on
SG&A of DKK 18m in the quarter.
SG&A costs as a percentage of revenue in-
creased to 20.8% in Q1 2024 compared to 18.3%
in Q1 2023 due to the lower revenue.
EBITA and margin
Excluding transformation and separation costs of
DKK 78m, the Adjusted Group EBITA margin was
9.2% in Q1 2024 compared to 6.0% in Q1 2023. In-
cluding these costs, the EBITA margin was 7.5% in
Q1 2024 compared to 3.9% in Q1 2023, which was
adversely impacted by costs related to the inte-
gration of Mining Technologies.
Excluding the net gain of around DKK 30m from
the sale of the MAAG business, the EBITA margin
was 6.9% and the Adjusted EBITA margin was
8.5%
Amortisation of intangible assets
Amortisation of intangible assets amounted to
DKK 60m (Q1 2023: DKK 58m). The effect of pur-
chase price allocations amounted to DKK 10m (Q1
2023: DKK 11m) and other amortisation to DKK
50m (Q1 2023: DKK 47m).
Financial items
Net financial items amounted to DKK -2m (Q1
2023: DKK -16m), of which net interest amounted
to DKK -34m (Q1 2023: DKK -17m), foreign
exchange and fair value adjustments amounted
to DKK 32m (Q1 2023: DKK 1m). The latter in-
cludes the reclassification of DKK 18m in accumu-
lated currency adjustments from other compre-
hensive income due to the sale of the MAAG
business in Q1 2024.
Tax
Tax in Q1 2024 totalled DKK -109m (Q1 2023: -
58m), corresponding to an effective tax rate of
36.0% (Q1 2023: 36.0%). This includes impact from
withholding tax in both periods.
Profit for the period
Profit in Q1 2024 was DKK 194m (Q1 2023: DKK
84m) driven by the improved profitability as well
as supported by the net gain of around DKK 30m
from the sale of the MAAG business.
Return on capital employed
Return on capital employed (ROCE) increased to
7.8% (Q1 2023: 5.1%) due to higher earnings and a
decrease in net working capital compared to Q1
2023.
Employees
The number of employees decreased by 608 to
8,769 at the end of Q1 2024, compared to 9,377
at the end of Q4 2023. The decrease was driven
by workforce reductions across all business seg-
ments relating to footprint optimisation, the divest-
ment of the MAAG business and the continued
rightsizing of the Cement organisation.
Backlog
DKKm
Revenue & EBITA margin
DKKm EBITA margin %
EBITA
DKKm
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Mining Cement NCA
0%
2%
4%
6%
8%
10%
12%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Revenue EBITA margin %
Adj. EBITA margin %
(400)
(200)
0
200
400
600
800
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Mining Mining adj. Cement Cement adj. NCA
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 16
Capital in Q1 2024
Cash flow from operating activities
Cash flow from operating activities (CFFO)
amounted to DKK -352m in Q1 2024 (Q1 2023:
DKK -404m). This was driven by an increase in net
working capital, negatively impacting CFFO by
DKK 650m, partly offset by changes in provisions,
which impacted CFFO positively by DKK 120m.
Cash flow from investing activities
Cash flow from investing activities amounted to
DKK 46m (Q1 2023: DKK -24m). The positive cash
flow is primarily related to the sale of the MAAG
business partly offset by the payment for the re-
cent acquisition of Farnell-Thompson.
Cash flow from financing activities
Cash flow from financing activities amounted to
DKK 513m (Q1 2023: DKK 81m) driven by the in-
crease in interest-bearing debt. The development
reflects the negative cash flow from operating ac-
tivities during Q1 2024 and an increase in cash.
Free cash flow
Free cash flow (the sum of cash flow from operat-
ing and investing activities) amounted to DKK -
306m in the quarter (Q1 2023: DKK -428m). Free
cash flow adjusted for business acquisitions and
disposals amounted to DKK -454m in Q1 2024 (Q1
2023: DKK -428m).
Net working capital
Net working capital increased by DKK 553m to
DKK 1,935m at the end of Q1 2024 (end of Q4
2023: DKK 1,382m). The increase is primarily
driven by payments to suppliers leading to a re-
duction in trade payables and an increase in pre-
payments, partly offset by a reduction in trade re-
ceivables from increased cash collection.
The corresponding net working capital ratio in-
creased from 5.7% of revenue in Q4 2023 to 8.4%
in Q1 2024.
Utilisation of supply chain financing decreased to
DKK 456m in Q1 2024 (Q4 2023: 504m).
Net interest-bearing debt
Net interest-bearing debt (NIBD) at 31 March 2024
increased to DKK 830m (Q4 2023: DKK 639m).
The financial gearing end of Q1 2024 amounted
to 0.5x (Q4 2023: 0.4x) and remains comfortably
below our target level of less than 2.0x.
Financial position
By the end of Q1 2024, FLSmidth had DKK 6.3bn
of available committed credit facilities of which
DKK 4.7bn remained undrawn. The committed
credit facilities have a weighted average time to
maturity of 4.0 years.
Credit facilities of DKK 5.0bn and DKK 1.1bn will
mature in 2027 and 2030, respectively. The re-
maining DKK 0.2bn mature in later years. Addi-
tionally, FLSmidth has DKK 0.8bn of uncommitted
credit facilities available.
Equity ratio
Equity at the end of Q1 2024 increased to DKK
11,085m (end of Q4 2023: DKK 10,828m), driven
primarily by currency adjustments and profit for
the period. The equity ratio was 41.2% at the end
of Q1 2024 (end of Q4 2023: 40.1%).
Treasury shares
The holding of treasury shares as of 31 March
2024 has decreased from year end 2023 and
amounts to 764,785 shares, representing 1.33% of
the total share capital. Treasury shares are used
to cover our obligations under the company’s
share-based incentive programmes. The de-
crease reflects the vesting of the long-term incen-
tive program granted in 2021.
Cash flow
DKKm
Net interest-bearing debt
DKKm
Net working capital
DKKm NWC%
(500)
(300)
(100)
100
300
500
700
900
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Cash flow from operating activities
(1,000)
(500)
0
500
1,000
1,500
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Net interest-bearing debt (NIBD)
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
18.0%
0
1,000
2,000
3,000
Q1
2022
Q2 Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Net working capital
Net working capital ratio, end
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 18
Income statement
Statement of comprehensive income
Notes
DKKm
Q1
2024
Q1
2023
3, 4
Revenue
Production costs
(3,424 )
(4,619 )
Gross profit
Sales costs
(416 )
(433 )
Administrative costs
(592 )
(667 )
10
Other operating net income
EBITDA
Depreciation and impairment of property,
plant and equipment and lease assets
(77 )
(87 )
EBITA
Amortisation and impairment
of intangible assets
(60 )
(58 )
EBIT
Financial income
Financial costs
(226 )
(440 )
EBT
Tax for the period
(109 )
(58 )
Profit for the period, continuing activities
3, 7
Profit (loss) for the period, discontinued activities
(19 )
Profit for the period
Attributable to:
Shareholders in FLSmidth & Co. A/S
Minority interests
-
(2 )
Earnings per share (EPS):
Continuing and discontinued activities per share (DKK)
Continuing and discontinued activities per share, diluted (DKK)
Continuing activities per share (DKK)
Continuing activities per share, diluted (DKK)
Notes
DKKm
Q1
2024
Q1
2023
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
(127 )
Reclassification of currency adjustments on disposal
(18 )
Cash flow hedging:
- Value adjustments for the period
(5 )
- Value adjustments transferred to work in progress
Tax of total other comprehensive income
(1 )
(11 )
Other comprehensive income for the period after tax
(100 )
Comprehensive income for the period
(16 )
Attributable to:
Shareholders in FLSmidth & Co. A/S
(16 )
Minority interests
(16 )
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 19
Cash flow statement
Notes
DKKm
Q1
2024
Q1
2023
EBITDA
3
EBITDA, discontinued activities
(9 )
Adjustment for gain on sale of property, plant and equipment and other non-cash
items
(17 )
(11 )
Change in provisions, pension and employee benefits
8
Change in net working capital
(650 )
(694 )
Cash flow from operating activities before financial items and tax
(105 )
(219 )
Financial items received and paid
(34 )
(18 )
Taxes paid
(213 )
(167 )
Cash flow from operating activities
(352 )
(404 )
9
Acquisition of enterprises and activities
(93 )
Acquisition of intangible assets
(42 )
(43 )
Acquisition of property, plant and equipment
(58 )
(24 )
Acquisition of financial assets
(2 )
10
Disposal of enterprises and activities
Disposal of property, plant and equipment
Disposal of financial assets
Dividend from associates
Cash flow from investing activities
(24 )
Repayment of lease liabilities
(28 )
(29 )
Change in interest bearing debt
Cash flow from financing activities
Change in cash and cash equivalents
(347 )
Cash and cash equivalents at beginning of period
Foreign exchange adjustment, cash and cash equivalents
(26 )
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
2024
Q1
2023
Free cash flow
(306 )
(428 )
Free cash flow, adjusted for acquisitions and disposals of
enterprises and activities
(454 )
(428 )
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 20
Balance sheet
Notes
DKKm
31/03 2024
31/12 2023
31/03 2023
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
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 2024
31/12 2023
31/03 2023
Equity and liabilities
Share capital
Foreign exchange adjustments
(833 )
(879 )
(646 )
Cash flow hedging
(34 )
(32 )
(37 )
11
Retained earnings
Shareholders in FLSmidth & Co. A/S
Minority interests
(28 )
(29 )
(26 )
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 payables
Other liabilities
Current liabilities
Total liabilities
Total equity and liabilities
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 21
Equity statement
Q1 2024
Q1
2023
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
(879 )
(32 )
(29 )
(517 )
(70 )
(26 )
Comprehensive income for the period
Profit/loss for the period
(2 )
Other comprehensive income
Actuarial gains/(losses) on
defined benefit plans
Currency adjustments regarding
translation of entities
(129 )
(129 )
(127 )
Reclassification of currency adjustments on disposal
(18 )
(18 )
(18 )
Cash flow hedging:
- Value adjustments for the period
(5 )
(5 )
(5 )
- Value adjustments transferred to work in progress
Tax on other comprehensive income
(1 )
(1 )
(1 )
(11 )
(11 )
(11 )
Other comprehensive income total
(2 )
(129 )
(6 )
(102 )
(100 )
Comprehensive income for the period
(2 )
(129 )
(16 )
(16 )
Transactions with owners:
Dividend transferred to other liabilities
(170 )
(170 )
(170 )
Share-based payment
Equity at 31 March
(833 )
(34 )
(28 )
(646 )
(37 )
(26 )
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 22
Notes
1. Key accounting estimates and judgements 23
2. Income statement by function 23
3. Segment information 24
4. Revenue 25
5. Provisions 26
6. Contractual commitments and contingent
liabilities 26
7. Discontinued activities 26
8. Net working capital 27
9. Business acquisitions 27
10. Disposal of activities 27
11. Shareholders’ equity 28
12. Events after the balance sheet date 28
13. Accounting policies 28
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 23
1. Key accounting estimates
and judgements
When preparing the consolidated condensed fi-
nancial statements, we are required to make sev-
eral estimates and judgements. The estimates and
judgements that can have a significant impact on
the consolidated condensed financial statements
are categorised as key accounting estimates and
judgements. Key accounting estimates and judge-
ments are regularly assessed to adapt to the mar-
ket conditions and changes in political and eco-
nomic factors.
Areas affected by key accounting estimates and
judgements are unchanged from the Annual re-
port 2023, however, with no significant business
acquisition made during the period. Therefore, key
accounting judgements are made in relation to the
accounting of revenue when determining the
recognition method, while key accounting esti-
mates relate to the estimation of warranty provi-
sions, valuation of inventories, trade receivables,
work in progress and deferred tax.
For further details, reference is made to Annual
Report 2023, Key accounting estimates and
judgements, page 69 and to specific notes.
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 de-
preciation, amortisation and impairment. Depreci-
ation, amortisation, and impairment are therefore
separated from the individual functions and pre-
sented in separate lines.
The income statement prepared on the basis of
cost by function is shown below:
Income Statement by function
DKKm
Q1
2024
Q1
2023
Revenue
4,839
6,016
Production costs
(3,496)
(4,689)
Gross profit
1,343
1,327
Sales costs, including depreciation and amortisation
(421)
(438)
Administrative costs, including depreciation and amortisation
(652)
(737)
Other operating net income
35
25
EBIT
305
177
Depreciation, amortisation
and impairment consist of:
Depreciation and impairment of property, plant and equipment and lease assets
(77)
(87)
Amortisation and impairment of intangible assets
(60)
(58)
(137)
(145)
Depreciation, amortisation
and impairment are divided into:
Production costs
(72)
(70)
Sales costs
(5)
(5)
Administrative costs
(60)
(70)
(137)
(145)
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 24
3. Segment information
Q1 2024
Q1 2023
FLSmidth Group
DKKm
Mining
Cement
Non-Core
Activities
Total
Mining
Cement
Non-Core
Activities
Continuing
activities
Discontinue
d activities¹
Revenue
3,581
1,208
50
4,839
4,185
1,582
249
6,016
0
Production costs
(2,401)
(933)
(90)
(3,424)
(3,120)
(1,210)
(289)
(4,619)
(2)
Gross profit
1,180
275
(40)
1,415
1,065
372
(40)
1,397
(2)
SG&A cost
(748)
(240)
(20)
(1,008)
(743)
(294)
(63)
(1,100)
(7)
Other operating net income
1
34
0
35
12
13
0
25
(9)
EBITDA
433
69
(60)
442
334
91
(103)
322
(9)
Depreciation and impairment of property, plant and equipment
and lease assets
(63)
(12)
(2)
(77)
(60)
(23)
(4)
(87)
0
EBITA
370
57
(62)
365
274
68
(107)
235
(9)
Amortisation and impairment of intangible assets
(52)
(8)
0
(60)
(40)
(18)
0
(58)
0
EBIT
318
49
(62)
305
234
50
(107)
177
(9)
Order intake
4,176
1,042
30
5,248
4,177
1,344
111
5,632
0
Order backlog
12,581
4,422
479
17,482
13,876
6,066
2,085
22,027
0
Gross margin
32.9%
22.8%
-80.1%
29.2%
25.4%
23.5%
-16.1%
23.2%
EBITDA margin
12.1%
5.7%
-120.0%
9.1%
8.0%
5.8%
-41.4%
5.4%
EBITA margin
10.3%
4.7%
-124.0%
7.5%
6.5%
4.3%
-43.0%
3.9%
EBIT margin
8.9%
4.1%
-124.0%
6.3%
5.6%
3.2%
-43.0%
2.9%
Number of employees at 31 marts
6,553
2,128
88
8,769
6,821
3,024
500
10,345
0
Reconciliation of profit for the period
EBIT
305
177
(9)
Financial income
224
424
2
Financial costs
(226)
(440)
(13)
EBT
303
161
(20)
1) From 1 January 2024, the remaining responsibilities to finalise legacy projects related to the non-mining bulk material handling sold in 2019 is included in Non-Core Activities. In 2023, it was presented as discontinued activities.
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 25
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 seg-
ments split into the main businesses Products and
Services. Revenue within the NCA segment re-
flects execution of the backlog and sale of parts
already in stock.
In the graphs on the right, revenue is split by re-
gions in which delivery takes place.
Revenue is recognised either at a point in time
where the control over the goods and/or services
is transferred to the customer or over time to re-
flect the percentage of completion of the perfor-
mance obligations in the contracts. Percentage of
completion covers a wide range of different types
of contracts, from contracts where the customer
consumes the services over time, such as fixed
price service contracts, to more complex product
bundles with engineering subject to the enhanced
risk governance structure under the Risk Manage-
ment Board and to risk quotas. More information
on when and how the two recognition principles
are applied can be found in note 1.4 in the Annual
report 2023.
Backlog
The order backlog at 31 March 2024 amounted to
DKK 17,482m (end of 2023: DKK 17,593m).
The backlog represents the value of outstanding
performance obligations on current contracts. The
value of outstanding performance obligations on
current contracts is a combination of value from
contracts 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.
Revenue split by Regions Q1 2024
%
Revenue split by Regions Q1 2023
%
Backlog
DKKm
25%
27%
16%
14%
18%
NAMER
SAMER
ECANA
SSAMESA
APAC
24%
26%
19%
13%
18%
NAMER
SAMER
ECANA
SSAMESA
APAC
11,425
9,720
8,258
5,485
2,344
2,277
0
4,000
8,000
12,000
16,000
20,000
24,000
Q1 2023 Q1 2024
2024 2025 2026 and beyond
Revenue split on timing of revenue recognition principle
Q1 2024
Q1 2023
DKKm
Mining
Cement
Non-Core
Activities
Group
Mining
Cement
Non-Core
Activities
Group
Point in time
2,684
619
5
3,308
2,350
740
112
3,202
Percentage of completion
- Service, single machines and product bundles
606
546
0
1,152
1,549
741
0
2,290
- Product bundles with engineering under enhanced risk
governance
291
43
45
379
286
101
137
524
Total revenue
3,581
1,208
50
4,839
4,185
1,582
249
6,016
Revenue split on industry and category
Q1 2024
Q1 2023
DKKm
Mining
Cement
Non-Core
Activities
Group
Mining
Cement
Non-Core
Activities
Group
Products business
1,177
487
45
1,709
1,485
692
157
2,334
Service business
2,404
721
5
3,130
2,700
890
92
3,682
Total revenue
3,581
1,208
50
4,839
4,185
1,582
249
6,016
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 26
5. Provisions
Provisions increased by DKK 124m compared to 31
December 2023. The increase relates primarily to
increases in other provisions that were partly off-
set by the use of restructuring provisions following
execution on the transformation strategy.
For a description of the main provision categories
see note 2.7 in the 2023 Annual Report.
6. Contractual Commitments
and contingent liabilities
Contingent liabilities at Q1 2024 amounted to DKK
2,722m (31 December 2023: DKK 2,638m).
Contingent liabilities primarily relate to customary
performance and payment guarantees. The vol-
ume of such guarantees amounted to DKK
2,360m (31 December 2023: DKK 2,272m). It is
customary market practice to issue guarantees to
customers, which serve as a security that we will
deliver as promised in terms of performance, qual-
ity, and timing. The volume of the guarantees var-
ies with the activity level and reflects the
outstanding backlog, finalised projects and deliv-
eries that are covered by warranties etc. Only a
minor share of such guarantees is expected to
materialise into losses. In the event a guarantee is
expected to materialise, a provision is recognised
to cover the risk. Information on provisions is in-
cluded in note 5.
Other contingent liabilities of DKK 362m (31 De-
cember 2023 DKK 366m) relate to our involve-
ment 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.
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 2023 Annual Report.
7. Discontinued activities
Discontinued activities related to the remaining re-
sponsibilities to finalise legacy projects, handling
of claims, etc. retained on the sale of the non-min-
ing bulk material handling business in 2019. In
2023, we made a write down of DKK 149m as we
foresee a high risk of not being able to collect
amounts due from a customer that made an un-
substantiated cash withdrawal on a performance
bond in 2021.
From 1 January 2024, the activities are included
within the Non-Core Activities segment for full
wind-down. This includes the remaining net asset
of DKK 67m consisting of net working capital of
DKK 132m and provisions of DKK 65m. We do not
expect any material future financial impact from
the full wind-down of the activities.
Provisions
DKKm
31/03 2024
31/12 2023
31/03 2023
Provisions at 1 January
2,295
2,507
2,507
Foreign exchange adjustments
3
(19)
(10)
Acquisition and disposal of Group enterprises
(11)
14
0
Additions
395
1,598
386
Used
(201)
(1,399)
(164)
Reversals
(62)
(406)
(65)
Provisions
2,419
2,295
2,654
The split of provisions is as follows:
Warranties
913
883
994
Restructuring
269
360
462
Other provisions
1,237
1,052
1,198
2,419
2,295
2,654
The maturity of provisions is specified as follows:
Current liabilities
1,723
1,635
1,729
Non-current liabilities
696
660
925
2,419
2,295
2,654
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 27
8. Net working capital
Net working capital at 31 March 2024 has in-
creased by DKK 0.6bn compared to 31 December
2023. The increase relates primarily to payments
to suppliers leading to reduction in trade payables
and increase in prepayments partly offset by a re-
duction in trade receivables from increased cash
collection.
Utilisation of supply chain financing decreased in
the first three months of 2024 to DKK 456m (31
December 2023: 504m).
9. Business Acquisitions
On 4 March 2024, FLSmidth acquired the Cana-
dian mill engineering, supply and services pro-
vider, Farnell-Thompson Applied Technologies
Inc. Its offerings is integrated into FLSmidth’s core
Mining business. The acquisition is aligned with
our Mining CORE’26 strategy, which includes tar-
geting service growth through strategic invest-
ments and prioritisation.
Farnell-Thompson is a global supplier of engi-
neering services, parts and mills to the mining in-
dustry. Prior to the acquisition Farnell-Thompson
has been a consulting partner providing these ser-
vices to FLSmidth for many years. Consequently,
a seamless integration of the new business and
staff is anticipated.
The purchase price net of cash acquired is DKK
102m subject to final purchase price adjustments
and with DKK 9m falling due over the next three
years. The acquisition increased working capital
assets and liabilities by DKK 23m and DKK 18m.
The excess of the purchase price over the net as-
sets is recognised as goodwill of DKK 96m in the
preliminary allocation of the purchase price.
Goodwill represents primarily the value of the as-
sembled workforce. The initial accounting will be
retrospectively adjusted to reflect new information
obtained in subsequent periods within a maximum
period of 12 months after the acquisition date.
The impact on net profit is insignificant.
10. Disposal of activities
On 22 January 2024, FLSmidth Cement entered
into an agreement to sell the MAAG gears and
drives business to Solix Group AB. The transaction
closed on 1 March 2024 and includes all related
assets, including intellectual property, technology,
employees and customer contracts.
Total assets and liabilities related to the activities
of DKK 460m and DKK 262m, respectively, were
derecognised. The assets include goodwill of DKK
72m, other non-current assets of DKK 124m and
current assets of DKK 264m (primarily working
capital). The liabilities include lease liabilities of
DKK 54m, provisions of DKK 12m, working capital
and other liabilities of DKK 195m. The transaction
led to a gain of around DKK 30m, subject to final
purchase price adjustments.
Net working capital
DKKm
31/03 2024
31/12 2023
31/03 2023
Inventories
3,447
3,450
4,059
Trade receivables
4,156
4,516
5,022
Work in progress, assets
2,785
2,769
3,518
Prepayments
502
423
820
Other receivables
860
855
1,034
Derivative financial instruments
40
37
42
Prepayments from customers
(2,084)
(1,933)
(2,702)
Trade payables
(3,369)
(4,024)
(4,062)
Work in progress, liability
(2,849)
(3,025)
(3,599)
Other liabilities
(1,532)
(1,637)
(1,469)
Derivative financial instruments
(21)
(49)
(50)
Net working capital
1,935
1,382
2,613
Change in net working capital
(553)
511
(720)
Acquisitions/disposal of activities, financial instruments and foreign
exchange effect on cash flow
(97)
(213)
26
Cash flow effect from change in net working capital
(650)
298
(694)
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 28
11. Shareholders’ equity
At the Annual General Meeting 10 April 2024, a
dividend of DKK 4 per share was declared. The to-
tal dividend amounting to DKK 227m, excluding
the proportion related to FLSmidth’s holding of
treasury shares, was paid out in April 2024.
In 2023, the Annual General Meeting was held in
March and the total dividend of DKK 170m was in-
cluded in Other liabilities in the balance sheet 31
March 2023.
12. Events after the balance
sheet date
We are not aware of any subsequent matters that
could be of material importance to the Group’s fi-
nancial position at 31 March 2024.
13. Accounting policies
The condensed interim report of the Group for the
first three months of 2024 is presented in accord-
ance with IAS 34, Interim Financial Reporting, as
approved by the EU and additional Danish disclo-
sure requirements regarding interim reporting by
listed companies.
Apart from the below mentioned changes, the ac-
counting policies are unchanged from those ap-
plied in the 2023 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 2023 Annual
Report for further details.
In addition to the changes mentioned in note 7.7 in
Annual Report 2023, IASB has issued IFRS 18,
Presentation and Disclosure in Financial State-
ments with effective date 1 January 2027. The
Standard replaces IAS 1, Presentation of Financial
Statements, and includes requirements on presen-
tation in the primary financial statements together
with the disclosure of information in the notes. It is
not expected that the implementation will have a
significant impact on the presentation and disclo-
sure.
Changes in accounting policies
As of 1 January 2024, FLSmidth Group has imple-
mented all new or amended accounting standards
and interpretations as adopted by the EU and ap-
plicable for the 2024 financial year. This includes
the changes to:
• IAS 1 (Classification of Liabilities as Current or
Non-current) and
• IFRS 16 (Lease Liability in a Sale and Lease-
back)
The implementation has not had and is not ex-
pected to have significant impact on the consoli-
dated condensed financial statements.
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 30
Executive management
Board of directors
Statement by Management
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report Q1 2024 31
FLSmidth & Co. A/S’ financial reports, whether in
the form of annual reports or interim reports, filed
with the Danish Business Authority and/or an-
nounced via the company’s website and/or
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.
Words such as ‘believe’, ‘expect’, ‘may’, ‘will’,
‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’,
‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and
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
FLSmidth & Co. A/S’ markets, products, product
research 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 & Co.
A/S’ influence, and which could materially affect
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-look-
ing statements.
Factors that may affect future results include, but
are not limited to, global as well as local political
and economic conditions, including 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 re-
ductions for FLSmidth & Co. A/S’ products and/or
services, introduction of competing products, reli-
ance on information technology, FLSmidth & Co.
A/S’ ability to successfully market current and
new products, exposure to product liability and le-
gal proceedings and investigations, changes in
legislation or regulation and interpretation thereof,
intellectual property protection, perceived or ac-
tual failure to adhere to ethical marketing prac-
tices, investments in and divestitures of domestic
and foreign enterprises,
unexpected growth in costs and expenses, failure
to recruit and retain the right employees and fail-
ure 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 distribu-
tion of this report.
Forward looking statements
