Interim Report
9M 2024
1 January –
30 September 2024
Company announcement no. 11-2024
CVR No. 58180912
FLSmidth
■
Interim Report 9M 2024 2
Management review
Highlights Q3 2024 4
Financial performance highlights 5
Sustainability performance highlights 6
Key figures 7
2024 financial guidance 8
Mining financial performance 9
Cement financial performance 11
Non-Core Activities financial performance 13
Consolidated financial performance Q3
2024 14
Consolidated financial performance 9M
2024 17
Consolidated
Condensed Interim
Financial statements
Income statement 20
Statement of comprehensive income 20
Cash flow statement 21
Balance sheet 22
Equity statement 23
Notes
1.Key accounting estimates and
judgements 25
2. Income statement by function 25
3. Segment information 26
4. Revenue 27
5. Provisions 28
6. Contractual commitments and contingent
liabilities 28
7. Discontinued activities 28
8. Net working capital 29
9. Business acquisitions 29
10. Disposal of activities 29
11. Events after the balance sheet date 30
12. Accounting policies 30
Statements
Statement by Management 32
Forward looking statements 33
Contents
Introduction Highlights Business Mining business Cement business Non-Core Activities Financial performance Governance Financial statements
FLSmidth
■
Interim Report 9M 2024 3
Management
review
Highlights Q3 2024 4
Financial performance highlights 5
Sustainability performance highlights 6
Key figures 7
2024 financial guidance 8
Mining financial performance 9
Cement financial performance 11
Non-Core Activities financial performance 13
Consolidated financial performance Q3 2024 14
Consolidated financial performance 9M 2024 17
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 4
In the third quarter of 2024, we continued to see a stable and healthy Mining service
market and a relatively softer Mining products market, and we expect these
conditions to continue into next year. The Mining business delivered an Adjusted
EBITA margin of 13.3%, and we continue to progress towards our 2026 financial
target. The long-term market outlook remains encouraging, among other things
exemplified by the recently signed strategic cooperation agreement for a new
copper concentrator production line in Uzbekistan – a clear testament to the strength
of our full flowsheet offerings and to our proven global execution capabilities. We are
exploring opportunities for enhancing our technology, sustainability and service
offerings to our mining customers, exemplified by the recent acquisition of the small
technology company, Tipco.
For Cement, the stable market conditions continue to provide good opportunities
for the Service business, whereas we continue to de-risk the Products business to
preserve profitability. In the third quarter of 2024, the Cement business achieved
an Adjusted EBITA margin of 10.8%, demonstrating continued strong execution of
higher-margin orders as well as release of provisions related to the completion of
legacy projects. The process for the divestment of the Cement business is
progressing according to plan, and it remains our expectation that a potential
transaction can take place at the earliest by the end of 2024.
We remain well on track to exit Non-Core Activities and is still the expectation that
the segment will be closed down by the end of the year.
FLSmidth in undergoing a tremendous transformation with significant changes to
both the business and to our employees. I want to thank the organisation for their
continued dedication and efforts.
Overall, the third quarter showed continued progression on our transformation
activities leading to additional improvements in profitability. We have continued our
dedicated efforts to implement a cost-efficient operating model and corporate
structure. We believe that we are well on track to end the year in line with our plans
as well as ensuring a good outset for the coming year.
Mikko Keto, Group CEO
Mining
Cement
■
Stable Service market and a
relatively softer Products market
■
Good execution of PCV-related
Products orders partly offsets 2%
decline in Mining revenue
■
Adjusted EBITA margin of 13.3%
reflecting continued profitability
improvements
■
Strategic cooperation agreement
in Uzbekistan in October 2024
■
Pockets of market growth partly
offsets slow demand in Western
Europe and China
■
Cement financials impacted by
recent divestments and
continued de-risking
■
Adj. EBITA margin of 10.8%
reflecting high gross margin and
lower SG&A costs
■
Divestment process proceeding
according to plan
Sustainability
Performance and other
■
Continued good progression on
all our Science Based Targets
■
Safety performance improved
from prior quarter, but remains
behind our 2024 target
■
Completion of the installation of
solar panels in our Delmas
Service Centre in South Africa
■
Continued investments in the
commercial front end
■
Continued business simplification,
including focus on implementing
a more cost-efficient operating
model
■
Positive cash flow development
■
Financial guidance for 2024 is
revised
Highlights Q3 2024
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
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Interim Report 9M 2024 5
Financial performance highlights
Mining
Cement
Non-Core Activities
Group
Order intake (DKKm)
▼ -13.8%
3,724
Order intake (DKKm)
▼ -31.2%
843
Order intake (DKKm)
▼ -61.4%
22
Order intake (DKKm)
▼ -18.1%
4,589
Revenue (DKKm)
▼ -2.1%
4,006
Revenue (DKKm)
▼ -27.3%
1,017
Revenue (DKKm)
▼ -84.3%
36
Revenue (DKKm)
▼ -11.6%
5,059
EBITA & EBITA margin (DKKm - %)
▲ 47.2%
496 12.4% (adj. 13.3%)
EBITA & EBITA margin (DKKm - %)
▼ -44.5%
91 8.9% (adj. 10.8%)
EBITA & EBITA margin (DKKm - %)
▲ 81.0%
(8) -22.2%
EBITA & EBITA margin (DKKm - %)
▲ 25.9%
579 11.4% (adj. 12.6%)
Revenue split by Service & Products (%)
Revenue split by Service & Products (%)
Revenue split by Service & Products (%)
Cash flow from operating activities
DKK 357m ▲ from DKK -276m in Q3 2023
Earnings per share
DKK 5.0 ▲ from DKK 4.8 in Q3 2023
Net working capital ratio
10.6% ▼ from 11.4% end of Q3 2023
NIBD/EBITDA
0.6x ▼ from 1.0x end of Q3 2023
4,320
3,724
Q3 2023
Q3 2024
1,225
843
Q3 2023
Q3 2024
57
22
Q3 2023
Q3 2024
16,756
14,272
5,601
4,589
9M 2023
9M 2024
Q3 2023
Q3 2024
4,094
4,006
Q3 2023
Q3 2024
1,399
1,017
Q3 2023
Q3 2024
230
36
Q3 2023
Q3 2024
18,138
14,856
5,723
5,059
9M 2023
9M 2024
Q3 2023
Q3 2024
337
496
Q3 2023
Q3 2024
164
91
Q3 2023
Q3 2024
(42)
(8)
Q3 2023
Q3 2024
1,026
1,375
460
579
9M 2023
9M 2024
Q3 2023
Q3 2024
63%
(Q3 2023: 65%)
37%
(Q3 2023: 35%)
Service
Products
59%
(Q3 2023: 51%)
41%
(Q3 2023: 49%)
Service
Products
0%
(Q3 2023: 34%)
100%
(Q3 2023: 66%)
Service
Products
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
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Interim Report 9M 2024 6
Sustainability performance highlights
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
%
Sustainability developments
At FLSmidth, we strive to reduce our
environmental impact as well as
support our customers’ green
transition by providing innovative
product solutions through our
MissionZero programme.
Solar panel installation at our Delmas
Service Centre in South Africa
FLSmidth recently completed the installation of solar
panels in our Delmas facility in South Africa. An installed
capacity of 300kWh is expected to generate over
400MWh of clean electricity each year. The installation
covers close to 40% of electricity use at the site and is
expected to reduce over 400 tCO
2
e of emissions
annually. The impact is particularly high in South Africa,
as most grid electricity is generated from burning coal.
The project will positively support emissions reduction in
the final quarter of 2024.
FLS to deliver concentrate and tailing filters
to reduce water consumption
During Q3 2024, FLSmidth received an order to deliver
five AFP2500 concentrate and tailings filters for a project
based in the Patagonia mountains of southern Arizona,
U.S. This new order will contribute to an increased supply
of critical minerals such as zinc and manganese, which
support society's continued electrification.
The mine operation is designed to minimise its
environmental impact, and the equipment we will deliver
plays a critical role in supporting this. The project’s design
is expected to result in ~75% less water consumption
compared to other mines in the region, and our filter
tailings technology will be a key enabler of this.
23,195
Target: 39,445 in 2024
18.3% improvement
2,867
Target: 4,065 by 2030
47.2% improvement
22.1
Target: 15% in 2024
9.5%-points improvement
Scope 1 and 2 CO
2
emissions decreased by 18.3%
compared to Q3 2023. Consolidation of sites
throughout 2024 supported reducing emissions. The
completion of a solar panel project in Q2 2024 in the
US also positively supported emissions reduction
during the current quarter as we produced more
renewable electricity for our onsite consumption.
Scope 3, Economic Intensity decreased by 47.2%
compared to the end of last year. The decrease was
driven by order mix with a lower share of order intake
in high economic intensity product groups such as pyro
systems and our mills range combined with a higher
share of order intake from lower intensity products
such as our pumps range.
Spend with suppliers with science-based targets
increased by 9.5%-points compared to the full year
2023. Spend during the quarter was supported by an
increasing share of suppliers setting targets to the
Science Based Targets initiative as well as an
increased allocation of spend to suppliers with targets
already set.
Water withdrawal
m
3
Women managers
%
Safety (Total recordable injury rate)
Total recordable injury rate/million working hours
117,095
Target: 192,738 in 2024
6.5% improvement
15.6
Target: 18.4% in 2024
0.7%-points reduction
2.0
Target: 1.1 in 2024
1.1 improvement
Water withdrawal was reduced by 6.5% compared to
Q3 2023. Consolidation of sites throughout 2024 has
supported performance year-to-date. However, a
leak on a US site detracted slightly from the period’s
performance. Performance remains on track to meet
our full-year target.
The percentage of women managers saw an
improvement in the third quarter of 2024 compared
with the previous quarter but remains below our full-
year target. Delayering within the organisation
continues to impact the performance with short-term
swings, with continued efforts needed to regain our
progress towards our full-year target.
Safety performance has improved by 1.1 compared to
Q3 2023 but we remain behind our target for the full
year. The incident rate has continued to decline across
the period, as we continue our efforts to regain
progress to achieve our long-term target of ‘Zero
Harm’. This includes more active reporting of near-
misses and safety concerns to support more pro-active
health and safety management.
28,381
23,195
9M 2023
9M 2024
5,430
2,867
2023
9M 2024
12.6%
22.1%
2023
9M 2024
125,262
117,095
9M 2023
9M 2024
16.3%
15.6%
2023
9M 2024
3.1
2.0
9M
2023
9M
2024
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 7
Key figures
DKKm, unless otherwise stated
Q3
2024
Q3
2023
9M
2024
9M
2023
2023
Income statement
Revenue
5,059
5,723
14,856
18,138
24,106
Gross profit
1,672
1,636
4,665
4,530
6,087
EBITDA
644
538
1,587
1,275
1,761
EBITA
579
460
1,375
1,026
1,438
Adjusted EBITA*
636
579
1,585
1,369
1,919
EBIT
519
404
1,196
848
1,200
Financial items, net
(67)
31
(149)
(57)
(146)
EBT
452
435
1,047
791
1,054
Profit for the period, continuing activities
289
274
670
500
672
Loss for the period, discontinued activities**
0
(2)
0
(26)
(181)
Profit for the period
289
272
670
474
491
Orders
Order intake
4,589
5,601
14,272
16,756
21,376
Order backlog
15,678
19,933
17,593
Earning ratios
Gross margin
33.1%
28.6%
31.4%
25.0%
25.3%
EBITDA margin
12.7%
9.4%
10.7%
7.0%
7.3%
EBITA margin
11.4%
8.0%
9.3%
5.7%
6.0%
Adjusted EBITA margin*
12.6%
10.1%
10.7%
7.5%
8.0%
EBIT margin
10.3%
7.1%
8.1%
4.7%
5.0%
EBT margin
8.9%
7.6%
7.0%
4.4%
4.4%
Cash flow
Cash flow from operating activities (CFFO)
357
(276)
19
(308)
623
Acquisitions of property, plant and equipment
(125)
(76)
(263)
(134)
(176)
Cash flow from investing activities (CFFI)
(229)
125
(286)
(53)
(257)
Free cash flow
128
(151)
(267)
(361)
366
Free cash flow adjusted for acquisitions and
disposals of enterprises and activities
129
(436)
(415)
(604)
201
Balance sheet
Net working capital
2,208
2,796
1,382
Net interest-bearing debt (NIBD)
(1,180)
(1,325)
(639)
Total assets
27,619
29,236
27,011
CAPEX
550
431
604
Equity
11,094
11,131
10,828
Dividend to shareholders, paid
227
170
170
DKKm, unless otherwise stated
Q3
2024
Q3
2023
9M
2024
9M
2023
2023
Financial ratios
Book-to-bill
90.7%
97.9%
96.1%
92.4%
88.7%
Order backlog / Revenue
75.3%
80.9%
73.0%
Return on equity
6.2%
5.8%
4.5%
Equity ratio, end
40.2%
38.1%
40.1%
ROCE, average
8.8%
5.6%
8.2%
Net working capital ratio, end
10.6%
11.4%
5.7%
NIBD / EBITDA
0.6x
1.0x
0.4x
Capital employed
18,525
18,710
17,552
Number of employees
7,875
9,674
9,377
Share ratios
Cash flow per share (CFPS), (diluted), (DKK)
6.2
(4.8)
0.3
(5.4)
10.9
Earnings per share (EPS), (diluted), (DKK)
5.0
4.8
11.5
8.3
8.7
Share price, (DKK)
379.4
319.2
287.2
Number of shares (1,000), end
57,650
57,650
57,650
Market capitalisation, end
21,872
18,402
16,557
Sustainability key figures
Scope 1 & 2 GHG emissions (tCO2e) market-based
23,195
28,381
38,022
Scope 3 Economic intensity***
2,867
5,430
Spend with suppliers with science-based targets
22.1%
11.8%
12.6%
Water withdrawal (m3)
117,095
125,262
167,610
Women managers
15.6%
16.5%
16.3%
Safety, TRIR Total Recordable Injury Rate (including
contractors)
2.0
3.1
2.7
Other key figures
Quality, DIFOT Delivery In Full On Time
84.3%
82.3%
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 the 2023 Annual Report 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 the 2023
Annual Report 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. 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 quarterly as a year-to-date figure.
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
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Interim Report 9M 2024 8
2024 financial guidance
The financial guidance for the full year 2024, as set out in Company Announcement no. 9-2024 on 7 August 2024, is revised. 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 Cement business and the ongoing exit from the Non-Core Activities segment.
Mining
Cement
Non-Core Activities
Group
Guidance
Aug. 2024
Guidance
Nov. 2024
Guidance
Aug. 2024
Guidance
Nov. 2024
Guidance
Aug. 2024
Guidance
Nov. 2024
Guidance
Aug. 2024
Guidance
Nov. 2024
Revenue
(DKKbn)
~15.5
∼ 15.5
(DKK 11.4bn)
Revenue
(DKKbn)
4.0-4.5
4.0-4.5
(DKK 3.4bn)
Revenue
(DKKm)
200-300
~200
(DKK 130m)
Revenue
(DKKbn)
~20.0
∼ 20.0
(DKK 14.9bn)
Adj. EBITA
margin
12.5-13.0%
~13.0%
(12.7%)
Adj. EBITA
margin
8.0-9.0%
~9.0%
(9.3%)
Adj. EBITA
margin
10.0-11.0%
~11.0%
(10.7%)
EBITA
(DKKm)
Loss of 200-300
Loss of 200-250
(Loss of DKK 169m)
EBITA
margin
8.5-9.5%
~9.5%
(9.3%)
The numbers in brackets represent realised 9M results.
We expect the mining service market to remain
stable, whereas the products market remains
soft due to persistent hesitation by some
customers on larger investment decisions.
Longer term, the mining industry continues to
benefit from a positive outlook for minerals
crucial to continued global economic
development and a successful green energy
transition. The guidance for the adjusted EBITA
margin includes an adjustment for
transformation and separation costs of around
DKK 200m for the full year 2024. The adjusted
EBITA margin is impacted by the realisation 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
strategy 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
simplification and product portfolio pruning,
including the completed sale of the MAAG
business in Q1 2024. Further, the guidance for
adjusted EBITA margin includes an adjustment
for transformation and separation costs of
around DKK 100m for the full year 2024.
The guidance for revenue reflects continued
execution of the order backlog and contract
negotiations aimed at reducing the scope of
the remaining Non-Core Activities order
backlog. The EBITA margin guidance reflects
the operational loss-making nature of the
business as well as costs related to finalising
the exit of the business segment by end of
2024.
The Consolidated Group guidance reflects the
sum of the guidance for the three business
segments.
The guidance for 2024 is subject to
uncertainties stemming from the current
macroeconomic and geopolitical environment.
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 9
The mining service market
remained stable and active, while
we continue to observe persistent
softness in the mining products
market.
In line with our expectations, the mining service
market remains stable and active, underpinned by
steady production volumes and metal prices
comfortably above cost of production for most
mines. Customers are continuously looking to
service providers for ways of enhancing their
operational efficiency and extending equipment
life through upgrades & retrofits. In addition,
customers show interest in services and smaller
capex opportunities to lower their cost of
operation and enhancing operational efficiency
through increased mineral throughput and
recovery rates as well as reduced energy usage,
which will also greatly improve their sustainability
performance.
We still see interest in smaller equipment
packages to increase production and improve
process performance, whereas demand for larger
projects remains soft amid persisting hesitation by
some customers to allocate capital expenditures
for larger brownfield and greenfield projects.
Optimism on the longer-term demand outlook
persists, with metals prices (e.g., for copper and
gold) remaining relatively high and indications
from engineering, procurement and construction
managers (EPCMs) that larger projects may
progress over the next couple of years, albeit with
uncertain timing. This is illustrated by the strategic
cooperation agreement that we recently signed
for the delivery of core mineral processing
equipment for a new copper concentrator
production line at Almalyk MMC in Uzbekistan.
Order intake development in Q3 2024
Mining order intake decreased by 14% compared
to Q3 2023, mainly due to lower Products order
intake. Excluding currency effects, the order
intake decreased by 11%.
Service order intake decreased by 6% compared
to Q3 2023, driven by lower order intake within
upgrades & retrofits and professional services as
well as our ongoing exit from basic labour
services. The decline was partly offset by
relatively higher order intake for consumables,
including a multi-year contract for the supply of
mill liners to a customer in Australia, representing
the largest single order for mill liners that
FLSmidth has signed to date.
Products order intake decreased by 28% com-
pared to Q3 2023 reflecting the continued
softness in the mining products market and the
continued de-risking of our order backlog. One
large lithium order valued at approximately DKK
340m was booked in the quarter compared to two
large, announced Products orders with a
combined value of DKK 730m booked in Q3 2023.
During the quarter, Service and Products orders
accounted for 71% and 29% of the total order
intake, respectively, compared to 65% and 35% in
Q3 2023.
Order intake development in 9M 2024
9M 2024 order intake, compared to 9M 2023,
decreased by 11% to DKK 11,323m. Excluding
currency effects order intake decreased by 9%.
Service order intake decreased by 1% in 9M 2024,
reflecting stable market conditions for mining
service activities. The year-on-year decrease was
driven by lower order intake within spare parts
and upgrades and retrofits but was offset by
relatively higher order intake within consumables
and professional services.
Products order intake decreased by 29%
reflecting the ongoing softness in the mining
products market that has persisted through the
year as well as the continued de-risking of our
order backlog. Three large Products orders with a
combined value of approximately DKK 1.0bn were
announced in 9M 2024 compared to five large
orders with a combined value of approximately
DKK 1.9bn announced in 9M 2023.
Service and Products order intake represented
73% and 27% of Mining order intake in 9M 2024,
respectively, compared to 66% and 34% in 9M
2023.
Mining financial performance
Order intake split by
region, Q3 2024
Order intake split by
Service and Products, Q3 2024
Order intake split by
commodity, Q3 2024
8%
19%
12%
25%
36%
ECANA
APAC
SSAMESA
SAMER
NAMER
71%
(Q3 2023: 65%)
29%
(Q3 2023: 35%)
Service
Products
33%
16%
7%
3%
5%
36%
Copper
Gold
Coal
Fertilizer
Iron ore
Other
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 10
Revenue development in Q3 2024
Revenue decreased by 2% compared to Q3 2023.
Excluding currency effects, revenue remained at
the same level as in Q3 2023. Service revenue
decreased by 5% compared to Q3 2023 to DKK
2,513m. The decrease was primarily driven by
lower revenue within professional services and
spare parts as well as the execution of two major
orders positively impacting Service revenue in Q3
2023. The decline was partly offset by relatively
higher revenue within consumables.
Products revenue increased by 3% compared to
Q3 2023 driven primarily by good execution of
PCV Products orders as well as orders related to
conveying, crushing and screening. Service and
Products revenue comprised 63% and 37% of total
Mining revenue in Q3 2024, respectively,
compared to 65% and 35% in Q3 2023.
Gross profit development in Q3 2024
Gross profit increased by 5% to DKK 1,305m, from
DKK 1,242m in Q3 2023. The corresponding gross
margin increased from 30.3% in Q3 2023 to 32.6%
in Q3 2024. The strong gross margin was a result
of good execution on higher-margin orders
following our de-risking strategy.
EBITA development in Q3 2024
The Adjusted EBITA margin was 13.3% when
excluding transformation and separation costs of
DKK 38m related to our ongoing separation of the
Mining and Cement businesses as well as the
ongoing business simplification. The higher
Adjusted EBITA margin was driven by the
improvement in gross profit and a relatively lower
level of SG&A costs in the quarter, reflecting the
positive effects from our ongoing transformation
efforts and the realised synergies from the
acquisition of Mining Technologies partly offset by
hirings in key commercial areas. The EBITA
margin increased to 12.4% from 8.2% in Q3 2023.
Revenue development in 9M 2024
Mining revenue decreased by 10% compared to
9M 2023. Excluding currency effects, revenue
decreased by 8%. Service revenue decreased by
9% compared to 9M 2023 primarily as a result of
lower revenue within spare parts and professional
services. Products revenue decreased by 13% as a
result of our de-risking strategy and timing of the
execution of certain larger Products orders.
Gross profit development in 9M 2024
Gross profit increased by 10% compared to 9M
2023 to DKK 3,748m in 9M 2024. The
corresponding gross margin of 33.0% was driven
by good execution on higher-margin orders and
lower cost of production resulting from the
ongoing business simplification activities.
EBITA development in 9M 2024
EBITA increased by 32% in 9M 2024 with a
corresponding EBITA margin of 11.4%, reflecting
good execution on higher-margin orders and
lower production costs, partly offset by relatively
higher SG&A costs due to new hirings in key
commercial areas. Excluding transformation and
separation costs of DKK 142m, the adjusted EBITA
margin was 12.7%.
Employees
The number of employees in Mining has been
reduced by 694 since the end of Q3 2023,
reflecting synergies from the integration of Mining
Technologies in 2023 and the ongoing business
simplification activities, partly offset by new
hirings in key commercial areas.
Mining financial performance
Growth in order intake and
revenue in Q3 2024 (vs. Q3 2023)
Revenue and EBITA margin
DKKm EBITA margin %
Revenue split by
Service and Products, Q3 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
Q3
2022
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Products
Service
EBITA margin %
Adj. EBITA margin %
63%
(Q3 2024: 65%)
37%
(Q3 2024: 35%)
Service
Products
Order
intake
Revenue
Organic
-11%
0%
Currency
-3%
-2%
Total growth
-14%
-2%
Mining
(DKKm)
Q3 2024
Q3 2023
Change (%)
9M 2024
9M 2023
Change (%)
Order intake
3,724
4,320
-14%
11,323
12,712
-11%
- Hereof service order intake
2,649
2,826
-6%
8,227
8,342
-1%
- Hereof products order intake
1,075
1,494
-28%
3,096
4,370
-29%
Order backlog
11,299
13,859
-18%
11,299
13,859
-18%
Revenue
4,006
4,094
-2%
11,370
12,630
-10%
- Hereof service revenue
2,513
2,643
-5%
7,475
8,176
-9%
- Hereof products revenue
1,493
1,451
3%
3,895
4,454
-13%
Gross profit
1,305
1,242
5%
3,748
3,414
10%
Gross margin
32.6%
30.3%
33.0%
27.0%
Adjusted EBITA
534
456
17%
1,442
1,328
9%
Adjusted EBITA margin
13.3%
11.1%
12.7%
10.5%
EBITA
496
337
47%
1,300
985
32%
EBITA margin
12.4%
8.2%
11.4%
7.8%
Number of employees
5,894
6,588
-11%
5,894
6,588
-11%
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 11
Global cement demand was
mixed in Q3 2024 with general
slowness in Western Europe, a
continued decline in China and
slower growth in emerging
markets, partly offset by pockets
of growth in certain other
countries such as India, Poland,
Turkey, Mexico and Nigeria.
During Q3 2024, a number of key indicators
deteriorated in Western European markets as
continued high interest rates and national debt
ratios adversely impacted construction and
infrastructure investment levels. In contrast,
demand in India remains high, driven by
residential and commercial construction and
government infrastructure spending.
Outside India, expected clinker capacity
expansion towards 2030 is overwhelmingly driven
by other emerging markets. Solid growth is seen
in parts of Africa, where Nigeria is expected to
continue to lead the way, Pakistan and Central
Asia, with relatively more moderate growth in
Southeast Asia and Latin America. Carbon
regulations are expected to constrain capacity
growth in mature markets, where capital
investments are likely focused on import
terminals, grinding stations, and supplementary
cementitious materials such as calcined clay.
The long-term outlook sees global investment in
solutions and services supporting
decarbonisation, such as improved energy
efficiency, digitalisation, calcined clay, alternative
fuels and carbon capture. These investments are
expected to reach beyond traditional markets for
such technologies, and we are already witnessing
export producers investing in green solutions in
preparation for the EU Carbon Border Adjustment
Mechanism (CBAM) and equivalents in other
markets. The Chinese cement market is also
actively pursuing more sustainable technologies
driven by government-set targets for carbon
emissions reductions.
Order intake development in Q3 2024
Cement order intake decreased by 31% in Q3
2024 compared to Q3 2023. Excluding
divestments and currency effects of 7%, the
organic order intake decreased by 24%.
Service order intake decreased by 20% compared
to Q3 2023, in large parts due to the AFT
divestment in Q3 2023 and the MAAG divestment
in Q1 2024. Adjusting for these divestments,
Service order intake showed a single-digit decline.
The year-on-year decline was driven by less
favourable market conditions in especially
Western Europe as well as the timing of the
booking of certain larger service orders.
Products order intake decreased by 53%
compared to Q3 2023. The year-on-year decline
was in large parts driven by the impact of
divestments, continued pruning of our product
portfolio as well as our exit from project-oriented
business with significant risk profiles and lower
margins.
Service and Products comprised 78% and 22% of
the total Cement order intake in Q3 2024,
respectively, compared to 67% and 33% in Q3
2023.
Order intake development in 9M 2024
Cement order intake in the first nine months of
2024 declined by 25% compared to the same
period in 2023. Excluding divestments and
currency effects of 5%, the organic order intake
decreased by 20%.
Service order intake decreased by 11% compared
to the first three quarters of 2023, mainly due to
the AFT divestment in Q3 2023 and the MAAG
divestment in Q1 2024. This was partly offset by
an increase in orders for our core service
offerings, spare parts and professional services,
as a result of the overall heightened focus on
aftermarket sales and the ability to grow the
share of wallet in our installed customer base.
Products order intake decreased by 48%
compared to 9M 2023 driven in large parts by the
impact of divestments, continued pruning of our
product portfolio and our exit from project-
oriented business with significant risk profiles and
lower margins.
Service and Products comprised 74% and 26% of
the total Cement order intake in 9M 2024,
respectively, compared to 62% and 38% in 9M
2023.
Order intake split by
cluster in Q3 2024
*For more information on clusters, please refer to page 31 in
the 2023 Annual Report
Order intake split by
Service and Products, Q3 2024
Cement financial performance
Cement financial performance
Cement financial performance
30%
11%
15%
1%
6%
11%
5%
21%
India
Turkey
Denmark
China
Indonesia
Export cluster
Brazil
US
78%
(Q3 2023: 67%)
22%
(Q3 2023: 33%)
Service
Products
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 12
Revenue development in Q3 2024
Revenue decreased by 27% compared to Q3
2023. Excluding the effect from divestments and
currency of 6%, revenue decreased organically by
21%. Service revenue decreased by 17% compared
to Q3 2023 mainly due to the AFT divestment in
Q3 2023 and the MAAG divestment in Q1 2024.
Products revenue decreased by 39% compared to
Q3 2023 driven by the impact of divestments as
well as continued pruning of our product portfolio
following our de-risking strategy. Service and
Products comprised 59% and 41% of total Cement
revenue in Q3 2024, respectively, compared to
51% and 49% in Q3 2023.
Gross profit development in Q3 2024
Gross profit increased by 1% compared to Q3
2023 as a result of continued good execution of
higher-margin orders as well as release of
provisions related to the completion of legacy
projects. The corresponding gross margin
increased by 10.6%-points to 38.1% in Q3 2024
compared to Q3 2023.
EBITA development in Q3 2024
The Adjusted EBITA margin was 10.8% when
excluding transformation and separation costs of
DKK 19m. The higher adjusted EBITA margin
compared to Q3 2023 was driven by the higher
gross profit and a reduction in SG&A costs. EBITA
decreased by 45% to DKK 91m compared to DKK
164m in Q3 2023. The corresponding EBITA
margin decreased by 2.8%-points to 8.9% in Q3
2024. Excluding the net gain of around DKK 100m
from the sale of the AFT business, the EBITA
margin would have been 4.7% in Q3 2023.
Employees
The number of employees in Cement was reduced
by 905 compared to end Q3 2023. The reduction
reflects the continued optimisation of our global
footprint, simplification of the operating model to
improve long-term profitability as well as the
divestments of the AFT and MAAG businesses.
Revenue development in 9M 2024
Cement revenue decreased by 28% to DKK
3,356m in 9M 2024. Service and Products
revenue decreased by 21% and 36%, respectively,
due to both divestments and continued portfolio
pruning. Excluding divestments and currency
effects of 7%, revenue decreased organically by
21%.
Gross profit development in 9M 2024
Gross profit decreased by 14% to DKK 1,014m in
9M 2024 driven by the lower revenue. The
corresponding gross margin of 30.2% was 5%-
points higher than in 9M 2023, driven by good
execution on higher-margin orders throughout the
period.
EBITA development in 9M 2024
EBITA decreased by 20% in 9M 2024 with a
corresponding EBITA margin of 7.3% compared to
6.5% in 9M 2023. The relatively higher EBITA margin
reflected good execution on higher-margin orders
and lower SG&A cost. Excluding transformation and
separation costs of DKK 68m, the Adjusted EBITA
margin was 9.3%. Excluding the net gain of around
DKK 100m from the sale of the AFT business in Q3
2023 and DKK 30m from the MAAG sale in Q1 2024,
the EBITA margin improved by 2%-points from 9M
2023 (4.4%) to 9M 2024 (6.4%).
Cement financial performance
Growth in order intake and
revenue in Q3 2024 (vs. Q3 2023)
Revenue and EBITA margin
DKKm and EBITA margin
Revenue split by
Service and Products, Q3 2024
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0
500
1,000
1,500
2,000
Q3
2022
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Products
Service
EBITA margin %
Adjusted EBITA margin
59%
(Q3 2023: 51%)
41%
(Q3 2023: 49%)
Service
Products
Order intake
Revenue
Organic
-24%
-21%
Divestments
-6%
-5%
Currency
-1%
-1%
Total growth
-31%
-27%
Cement
(DKKm)
Q3 2024
Q3 2023
Change (%)
9M 2024
9M 2023
Change (%)
Order intake
843
1,225
-31%
2,891
3,844
-25%
- Hereof service order intake
654
820
-20%
2,133
2,385
-11%
- Hereof products order intake
189
405
-53%
758
1,459
-48%
Order backlog
3,976
5,438
-27%
3,976
5,438
-27%
Revenue
1,017
1,399
-27%
3,356
4,651
-28%
- Hereof service revenue
598
717
-17%
1,967
2,477
-21%
- Hereof products revenue
419
682
-39%
1,389
2,174
-36%
Gross profit
388
385
1%
1,014
1,173
-14%
Gross margin
38.1%
27.5%
30.2%
25.2%
Adjusted EBITA
110
312
Adjusted EBITA margin
10.8%
9.3%
EBITA
91
164
-45%
244
304
-20%
EBITA margin
8.9%
11.7%
7.3%
6.5%
Number of employees
1,964
2,869
-32%
1,964
2,869
-32%
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 13
Order intake development in Q3 2024
The order intake for Non-Core Activities (NCA) of
DKK 22m in Q3 2024 related to contractual
obligations and orders of parts already in stock.
Order backlog development in Q3
2024
The order backlog amounted to DKK 403m by the
end of Q3 2024 representing a decrease of DKK
32m compared to Q2 2024 and a decrease of
DKK 128m compared to end of 2023. The
decrease reflected execution 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 Europe,
Central Asia and Northern Africa regions.
Revenue development in Q3 2024
Revenue amounted to DKK 36m in Q3 2024, all of
which related to NCA Products.
Gross profit development in Q3 2024
Gross profit was negative by DKK 21m reflecting
the general volatility and operationally loss-
making nature of the NCA segment.
EBITA development in Q3 2024
NCA's EBITA amounted to DKK -8m, driven by
negative gross profit, costs related to the ongoing
exit of the segment's activities, partly offset by
settlement of legacy projects.
Order intake development in 9M 2024
The order intake for NCA amounted to DKK 58m
in 9M 2024 and is related to contractual
obligations and orders on parts already in stock.
Revenue development in 9M 2024
NCA revenue amounted to DKK 130m in 9M 2024.
Service and Products revenue represented 32%
and 68%, respectively.
Gross profit development in 9M 2024
Gross profit amounted DKK -97m in 9M 2024 with
a corresponding gross margin of -74.6%.
EBITA development in 9M 2024
EBITA in 9M 2024 amounted to DKK -169m with a
corresponding EBITA margin of -130.0% reflecting
the operationally loss-making nature of the NCA
segment and costs related to the exit.
It remains the expectation that the NCA segment
will be fully closed down by end-2024.
Non-Core Activities financial performance
Non-Core Activities
(DKKm)
Q3 2024
Q3 2023
Change (%)
9M 2024
9M 2023
Change (%)
Order intake
22
57
-61%
58
200
-71%
- Hereof service order intake
1
48
-98%
5
149
-97%
- Hereof products order intake
21
9
133%
53
51
4%
Order backlog
403
636
-37%
403
636
-37%
Revenue
36
230
-84%
130
857
-85%
- Hereof service revenue
0
79
-100%
28
300
-91%
- Hereof products revenue
36
151
-76%
102
557
-82%
Gross profit
(21)
9
333%
(97)
(57)
-70%
Gross margin
-58.3%
3.9%
-74.6%
-6.7%
EBITA
(8)
(42)
81%
(169)
(263)
36%
EBITA margin
-22.2%
-18.3%
-130.0%
-30.7%
Number of employees
17
217
-92%
17
217
-92%
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 14
Order intake
Order intake decreased by 18% in Q3 2024 to DKK
4,589m compared to DKK 5,601m in Q3 2023.
Excluding divestments in Cement and currency
effects of 4%, order intake decreased organically
by 14%.
Service order intake decreased by 11% compared
to Q3 2023, driven by a decrease in the Cement
business of 20% and in the Mining business of 6%.
Products order intake decreased by 33%
compared to Q3 2023 driven by lower order
intake for both the Mining and Cement
businesses.
Service and Products represented 72% and 28%
of total order intake, respectively, compared to
66% and 34% in Q3 2023.
Order backlog and maturity
The order backlog decreased by 5% to DKK
15,678m compared to the prior quarter (Q2 2024:
DKK 16,518m) as the order intake in Q3 2024 was
more than offset by the de-risking strategy, the
ongoing execution of the order backlog and
current market conditions.
Outstanding order backlog related to Russian and
Belarusian contracts was unchanged and
amounted to DKK 0.1bn at the end of Q3 2024. All
of the remaining backlog is suspended by
FLSmidth, and potential termination options are
being investigated. Due to the uncertain nature of
these contracts, they have been included in the
backlog maturity for ‘2026 and beyond.
Backlog
maturity
Mining
Cement
Non-Core
Activities
FLSmidth
Group
2024
17%
12%
17%
16%
2025
61%
57%
0%
58%
2026 and
beyond
22%
31%
83%
26%
At the end of Q3 2024, outstanding backlog for the NCA segment
amounted to DKK 403m. As a portion of the backlog is expected to
be terminated, this has consequently been included in the backlog
maturity for '2026 and beyond'.
Revenue
Revenue decreased by 12% to DKK 5,059m in Q3
2024, compared to Q3 2023, driven by lower
revenue in both the Mining and Cement
businesses. Excluding the effect of 4% from
divestments in Cement and currency, revenue
decreased organically by 8% compared to Q3
2023.
The decrease in Service revenue by 10%
compared to Q3 2023 was driven by both the
Mining and Cement businesses. For Mining, the
decrease was due to lower revenue in
professional services. For Cement, the
development reflects primarily the divestments.
Products revenue decreased by 15% compared to
Q3 2023 driven by the Cement business as a
result of our de-risking strategy and divestments.
The decline was partly offset by relatively higher
Mining Products revenue.
Service and Products revenue accounted for 61%
and 39% of total revenue in Q3 2024,
respectively, compared to 60% and 40%,
respectively, in Q3 2023.
Consolidated financial performance Q3 2024
Order intake split by
Service and Products Q3 2024
DKKm
(1,000)
1,000
3,000
5,000
7,000
Q3
2022
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Service order intake Products order intake
Growth in order intake in Q3 2024
(vs. Q3 2023)
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-11%
-24%
-61%
-14%
Divestments
0%
-6%
0%
-1%
Currency
-3%
-1%
0%
-3%
Total
growth
-14%
-31%
-61%
-18%
Growth in revenue in Q3 2024
(vs. Q3 2023)
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
0%
-21%
-85%
-8%
Divestments
0%
-5%
0%
-1%
Currency
-2%
-1%
1%
-3%
Total
growth
-2%
-27%
-84%
-12%
Group
(DKKm)
Q3 2024
Q3 2023
Change (%)
9M 2024
9M 2023
Change (%)
Order intake
4,589
5,601
-18%
14,272
16,756
-15%
- Hereof service order intake
3,304
3,694
-11%
10,365
10,876
-5%
- Hereof products order intake
1,285
1,907
-33%
3,907
5,880
-34%
Order backlog
15,678
19,933
-21%
15,678
19,933
-21%
Revenue
5,059
5,723
-12%
14,856
18,138
-18%
- Hereof service revenue
3,111
3,439
-10%
9,470
10,953
-14%
- Hereof products revenue
1,948
2,284
-15%
5,386
7,185
-25%
Gross profit
1,672
1,636
2%
4,665
4,530
3%
Gross margin
33.1%
28.6%
31.4%
25.0%
SG&A cost
(1,068)
(1,186)
-10%
(3,153)
(3,381)
-7%
SG&A ratio
21.1%
20.7%
21.2%
18.6%
Adjusted EBITA
636
579
10%
1,585
1,369
16%
Adjusted EBITA margin
12.6%
10.1%
10.7%
7.5%
EBITA
579
460
26%
1,375
1,026
34%
EBITA margin
11.4%
8.0%
9.3%
5.7%
Number of employees
7,875
9,674
-19%
7,875
9,674
-19%
*SG&A cost has now been presented without Other operating net income. Comparative information has been restated.
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 15
Profit in Q3 2024
Gross profit and margin
Gross profit increased by 2% to DKK 1,672m in Q3
2024, compared to DKK 1,636m in Q3 2023. The
corresponding gross margin increased to 33.1% in
Q3 2024 compared to 28.6% in Q3 2023. The
gross margin reflects good execution of higher-
margin orders following our de-risking strategy
partly offset by lower revenue in the quarter. The
gross margin level represents the highest gross
margin achieved in several years.
Research & development costs
In Q3 2024, total research and development
costs (R&D) amounted to DKK 83m, representing
1.6% of revenue (Q3 2023: 1.7%).
(DKKm)
Q3 2024
Q3 2023
Expensed
26
34
Capitalised
57
62
Total R&D
83
96
SG&A costs
Sales, general and administrative costs (SG&A)
decreased by 10% to DKK 1,068m compared to
Q3 2023, reflecting the positive effects from our
ongoing transformation efforts and the realised
synergies from the acquisition of Mining
Technologies. Further, the decrease reflected that
one-off costs related to the integration of Mining
Technologies incurred in Q3 2023 exceeded the
transformation and separation costs incurred in
Q3 2024. Currencies had a favourable impact on
SG&A of DKK 14m in the quarter.
SG&A costs as a percentage of revenue
increased to 21.1% in Q3 2024 compared to 20.7%
in Q3 2023 due to the lower revenue.
EBITA and margin
Excluding transformation and separation costs of
DKK 57m, the Adjusted Group EBITA margin was
12.6% in Q3 2024 compared to 10.1% in Q3 2023.
Including these costs, the EBITA margin was 11.4%
in Q3 2024 compared to 8.0% in Q3 2023.
Excluding the net gain of around DKK 100m from
the sale of the AFT business, the EBITA margin
would have been 6.3% in Q3 2023.
Amortisation of intangible assets
Amortisation of intangible assets amounted to
DKK 60m (Q3 2023: DKK 56m). The effect of
purchase price allocations amounted to DKK 10m
(Q3 2023: DKK 11m) and other amortisation to DKK
50m (Q3 2023: DKK 45m).
Financial items
Net financial items amounted to DKK -67m (Q3
2023: DKK 31m), of which net interest amounted
to DKK -27m (Q3 2023: DKK -29m) and foreign
exchange and fair value adjustments amounted
to DKK -42m (Q3 2023: DKK 50m).
Tax
Tax in Q3 2024 totalled DKK -163m (Q3 2023:
-161m), corresponding to an effective tax rate of
36.0% (Q3 2023: 37.0%). This includes impact
from withholding tax in both periods.
Profit for the period
Profit in Q3 2024 was DKK 289m (Q3 2023: DKK
272m) driven by the improved profitability partly
offset by an increase in financial costs.
Return on capital employed
Return on capital employed (ROCE) increased to
8.8% (Q3 2023: 5.6%) due to higher earnings and
a decrease in net working capital compared to Q3
2023.
Employees
The number of employees decreased by 350 to
7,875 at the end of Q3 2024, compared to 8,225
at the end of Q2 2024. The decrease was driven
by workforce reductions across all business
segments relating to footprint optimisation and
the continued rightsizing of the 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
Q3
2022
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
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
Q3
2022
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Revenue
EBITA margin %
Adj. EBITA margin %
(400)
(200)
0
200
400
600
800
Q3
2022
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Mining Mining adj. Cement Cement adj. NCA
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 16
Capital in Q3 2024
Cash flow from operating activities
Cash flow from operating activities (CFFO)
amounted to DKK 357m in Q3 2024 (Q3 2023:
DKK -276m). The CFFO was positively impacted
by DKK 205m from changes in the carrying
amount of provisions, pension and employee
benefits but negatively impacted by changes in
net working capital. In Q3 2023, changes in both
net working capital and provisions impacted
CFFO negatively.
Cash flow from investing activities
Cash flow from investing activities amounted to
DKK -229m (Q3 2023: DKK 125m) due to R&D and
investments in production and warehousing
capacity.
Cash flow from financing activities
Cash flow from financing activities amounted to
DKK -189m (Q3 2023: DKK -113m) as a result of
cash positions being utilised to pay parts of the
external loans.
Free cash flow
Free cash flow (the sum of cash flow from
operating and investing activities) amounted to
DKK 128m in the quarter (Q3 2023: DKK -151m).
Free cash flow adjusted for business acquisitions
and disposals amounted to DKK 129m in Q3 2024
(Q3 2023: DKK -436m).
Net working capital
Net working capital increased by DKK 187m to
DKK 2,208m at the end of Q3 2024 (end of Q2
2024: DKK 2,021m). The increase was primarily
driven by an increase in net work-in-progress due
to the commencement of the execution of certain
orders for which milestone payments from
customers are yet to be received.
The corresponding net working capital ratio
increased from 9.4% of revenue in Q2 2024 to
10.6% in Q3 2024 in line with expectations.
Utilisation of supply chain financing decreased
slightly to DKK 496m in Q3 2024 (Q2 2024:
504m).
Net interest-bearing debt
Net interest-bearing debt (NIBD) at 30 September
2024 decreased to DKK 1,180m (Q2 2024: DKK
1,227m). The financial gearing end of Q3 2024
amounted to 0.6x (Q2 2024: 0.7x) and remains
comfortably below our target level of less than
2.0x.
Financial position
By the end of Q3 2024, FLSmidth had DKK 6.3bn
of available committed credit facilities of which
DKK 4.2bn remained undrawn. The committed
credit facilities have a weighted average time to
maturity of 2.8 years.
Credit facilities of DKK 5.0bn and DKK 1.1bn will
mature in 2027 and 2030, respectively. The
remaining DKK 0.2bn mature in later years.
Additionally, FLSmidth has DKK 0.8bn of un-
committed credit facilities available.
Equity ratio
Equity at the end of Q3 2024 decreased to DKK
11,094m (end of Q2 2024: DKK 11,112m), driven
primarily by currency adjustments. The equity
ratio was 40.2% at the end of Q3 2024 (end of Q2
2024: 39.6%).
Treasury shares
The holding of treasury shares as of 30
September 2024 has decreased from Q2 2024
and amounts to 813,075 shares, representing
1.41% of the total share capital. Treasury shares
are used to cover our obligations under the
company’s share-based incentive programmes.
Other business
In November 2024, FLSmidth announced that
Chris Reinbold, Mining Products Business Line
President, is to step down from his role and will
leave FLSmidth by the end of November 2024.
FLSmidth has initiated the process of identifying a
replacement and expects the process to be
concluded in the near future.
Cash flow
DKKm
Net interest-bearing debt
DKKm
Net working capital
DKKm NWC%
(500)
0
500
1,000
Q3
2023
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Cash flow from operating activities
(1,000)
0
1,000
2,000
Q3
2023
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Net interest-bearing debt (NIBD)
0%
2%
4%
6%
8%
10%
12%
0
500
1,000
1,500
2,000
2,500
3,000
Q3
2022
Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2 Q3
Net working capital
Net working capital ratio, end
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 17
Order intake
Order intake decreased by 15% to DKK 14,272m.
Excluding divestments and currency effects, order
intake decreased by 12%. Service order intake
decreased by 5% driven primarily by the
divestments in Cement. Products order intake
decreased by 34%, driven by both Mining and
Cement.
Mining Service orders decreased by 1% in 9M
2024 reflecting stable and healthy market
conditions. Mining Products orders decreased by
29% due to our general de-risking strategy as
well as customer hesitation on larger capital
investments. Mining Products order intake in 9M
2024 included three large, announced orders
with a combined value of approximately DKK
1.0bn compared to five large, announced orders
with a combined value of approximately DKK
1.9bn in 9M 2023.
Cement order intake decreased by 25% primarily
due to a 48% decrease in Products order intake
compared to 9M 2023 driven by the continued
pruning of our product portfolio, exit from larger
projects, our strategic focus on profitability and
divestments. Cement Service order intake
decreased 11% compared to 9M 2023 driven by
strategic choices to reduce upgrades and retrofits
order intake.
Order backlog
The order backlog decreased by 21% to DKK
15,678m by end of Q3 2024. The lower backlog is
related to both Mining and Cement, which
decreased by 18% and 27%, respectively.
Revenue
Revenue decreased by 18% to DKK 14,856m in 9M
2024 comprising a decrease of 10% in Mining and
28% in Cement. Excluding divestments and
currency effects revenue decreased by 15%
compared to 9M 2023. In line with expectations,
9M 2024 included DKK 130m in revenue from
Non-Core Activities. Mining revenue comprised a
decrease of 9% in Service revenue and a 13%
decrease in Products revenue due to our de-
risking strategy and timing of the execution of
certain orders. In the first nine months of 2024,
Cement showed a decrease of 21% and 36% in
Service and Products revenue, respectively due
to the completed divestments and the continued
pruning of the product portfolio following our de-
risking strategy.
Profit in 9M 2024
Gross profit and margin
Gross profit in the first nine months of 2024
increased by 3% to DKK 4,665m. The
corresponding gross margin increased by 6.4%-
points to 31.4%. The strong gross margin was
driven by good execution on higher-margin orders
and lower cost of production partly offset by the
cost related to the ongoing exit from our Non-
Core Activities segment.
Research and Development costs were DKK 251m
(9M 2023: DKK 274m), of which DKK 137m were
capitalised (9M 2023: DKK 151m).
EBITA and margin
Adjusted EBITA of DKK 1,585m exclude
transformation and separation costs of DKK 210m.
The corresponding adjusted Group EBITA margin
was 10.7% in 9M 2024. Including transformation
and separation cost, EBITA was DKK 1,375m with
an EBITA margin of 9.3% in 9M 2024 compared to
5.7% in 9M 2023 (5.1% if excluding the net gain of
around DKK 100m from the sale of the AFT
business).
Excluding the net gain of around DKK 30m from
the sale of the MAAG business, the EBITA margin
was 9.1% and the Adjusted EBITA margin was
10.5%.
Financial items
Net financial items amounted to DKK -149m (9M
2023: DKK -57m), of which foreign exchange and
fair value adjustments amounted to DKK -12m (9M
2023: DKK 9m). Net interest amounted to DKK -
98m (9M 2023: DKK -66m). Financial items also
include a loss from associates of -39m (9M 2023:
DKK 0m) due to an impairment loss on the
investment following a downward revision of
expected future performance.
Tax
Tax for 9M 2024 totalled DKK -377m (9M 2023:
DKK -291m), corresponding to an effective tax rate
of 36.0% (9M 2023: 36.8%).
Profit for the period
Profit for the period was a gain of DKK 670m
compared to a DKK 474m gain in the first nine
months of 2023.
Earnings per share
Earnings per share (diluted) increased to DKK 11.5
from DKK 8.3 in the first nine months of 2023.
Consolidated financial performance 9M 2024
Growth in order intake in 9M 2024
(vs. 9M 2023)
Growth in revenue in 9M 2024 (vs.
9M 2023)
EBITA split by segment
DKKm
(200)
300
800
1,300
1,800
9M 2023 9M 2024
Mining Mining adj. Cement
Cement adj. NCA
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-8%
-21%
-85%
-15%
Divestments
0%
-6%
0%
-2%
Currency
-2%
-1%
0%
-1%
Total
growth
-10%
-28%
-85%
-18%
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-9%
-20%
-71%
-12%
Divestments
0%
-4%
0%
-1%
Currency
-2%
-1%
0%
-2%
Total
growth
-11%
-25%
-71%
-15%
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 18
Capital in 9M 2024
Net working capital
Net working capital increased in 9M 2024 to DKK
2,208m (end of 2023: DKK 1,382m). The
corresponding net working capital ratio was 10.6%
of 12-months trailing revenue, compared to 5.7%
at the end of 2023.
The increase was primarily driven by payments to
suppliers leading to a reduction in trade payables
and increases in amounts due from customers for
work performed as the execution of the backlog
during 9M 2024 exceeded milestone invoicing to
customers.
Cash flow from operating activities
Cash flow from operating activities increased to
DKK 19m (9M 2023: DKK -308m). CFFO was
positively impacted by higher earnings and by
DKK 135m from changes in the carrying amount of
provisions, pension and employee benefits partly
offset by the change in net working capital of DKK
1,082m.
Cash flow from investing activities
Cash flow used for investments was DKK -286m
compared to DKK -53m in the first nine months of
2023. The cash flow was positively impacted by
the sale of the MAAG business and negatively
impacted by the payment for the acquisition of
Farnell-Thompson in Q1 2024.
Cash flow from financing activities
Cash flow from financing activities amounted to
DKK 367m as the negative cash flow from
investing activities of DKK 286m and paid
dividends of DKK 228m were funded by interest-
bearing debt.
Free cash flow
Free cash flow (the sum of cash flow from
operating and investing activities) amounted to
DKK -267m (9M 2023: DKK -361m). Free cash
adjusted for business acquisitions and disposals
amounted to DKK -415m in 9M 2024 (9M 2023:
DKK -604m).
Balance sheet
Total assets increased to DKK 27,619m by 30
September 2024 (end of 2023: DKK 27,011),
primarily related to increased net working capital
assets.
Net interest-bearing debt
Net interest-bearing debt (NIBD) by 30 September
2024 increased to DKK 1,180m (end of 2023: DKK
639m). The increase in debt was primarily due to
the increase in working capital in the first nine
months of 2024. The Group’s financial gearing in
9M 2024 increased to 0.6x (end of 2023: 0.4x)
following the increase in NIBD.
Equity
Equity at end of 9M 2024 increased to DKK
11,094m (end of 2023: DKK 10,828m). The
increase was driven by currency adjustments,
profit for the period and dividend paid out
amounting to DKK 228m.
Treasury shares
The holding of treasury shares as of 30
September 2024 has increased from year end
2023 and totals 813,075 shares, representing
1.41% of the total share capital. Treasury shares
are used to hedge our share-based incentive
programmes.
Cash flow from operating activities
DKKm
Cash flow from investing activities
DKKm
Free cash flow
DKKm
(350)
(250)
(150)
(50)
50
9M 2023 9M 2024
Cash flow from operating activities
(350)
(250)
(150)
(50)
50
9M 2023 9M 2024
Cash flow from investing activities
(700)
(600)
(500)
(400)
(300)
(200)
(100)
0
100
9M 2023 9M 2024
Free cash flow
Free cash flow adjusted for net business acquisitons
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 20
Income statement
Statement of comprehensive income
Notes
DKKm
Q3
2024
Q3
2023
9M
2024
9M
2023
3, 4
Revenue
Production costs
(3,387 )
(4,087 )
(10,191 )
(13,608 )
Gross profit
Sales costs
(419 )
(407 )
(1,280 )
(1,265 )
Administrative costs
(649 )
(779 )
(1,873 )
(2,116 )
10
Other operating net income
EBITDA
Depreciation and impairment of property,
plant and equipment and lease assets
(65 )
(78 )
(212 )
(249 )
EBITA
Amortisation and impairment
of intangible assets
(60 )
(56 )
(179 )
(178 )
EBIT
Financial income
Financial costs
(226 )
(272 )
(715 )
(1,152 )
EBT
Tax for the period
(163 )
(161 )
(377 )
(291 )
Profit for the period, continuing activities
3, 7
Profit (loss) for the period, discontinued activities
(2 )
(26 )
Profit for the period
Attributable to:
Shareholders in FLSmidth & Co. A/S
Minority interests
(2 )
(3 )
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
Q3
2024
Q3
2023
9M
2024
9M
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
(326 )
(178 )
(30 )
Reclassification of currency adjustments on disposal
(18 )
Cash flow hedging:
- Value adjustments for the period
(6 )
(15 )
(21 )
- Value adjustments transferred to work in progress
Tax of total other comprehensive income
(1 )
(3 )
(16 )
Other comprehensive income for the period after tax
(322 )
(199 )
Comprehensive income for the period
(33 )
Attributable to:
Shareholders in FLSmidth & Co. A/S
(34 )
Minority interests
(4 )
(33 )
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 21
Cash flow statement
Notes
DKKm
Q3
2024
Q3
2023
9M
2024
9M
2023
EBITDA
3
EBITDA, discontinued activities
(1 )
(14 )
Adjustment for gain on sale of property, plant and
equipment and other non-cash items
(87 )
(79 )
Change in provisions, pension and employee benefits
(97 )
8
Change in net working capital
(347 )
(442 )
(1,082 )
(1,074 )
Cash flow from operating activities before financial items
and tax
(89 )
Financial items received and paid
(32 )
(29 )
(104 )
(67 )
Taxes paid
(131 )
(158 )
(540 )
(599 )
Cash flow from operating activities
(276 )
(308 )
9
Acquisition of enterprises and activities
(93 )
(42 )
Acquisition of intangible assets
(102 )
(88 )
(227 )
(208 )
Acquisition of property, plant and equipment
(125 )
(76 )
(263 )
(134 )
Acquisition of financial assets
(1 )
(1 )
(4 )
(3 )
10
Disposal of enterprises and activities
(1 )
Disposal of property, plant and equipment
Disposal of financial assets
Dividend from associates
Cash flow from investing activities
(229 )
(286 )
(53 )
Dividend paid
(227 )
(170 )
Buyout of minority interests
(13 )
Acquisition of treasury shares
(1 )
(19 )
(1 )
Repayment of lease liabilities
(23 )
(29 )
(71 )
(96 )
Change in interest bearing debt
(166 )
(83 )
Cash flow from financing activities
(189 )
(113 )
(212 )
Change in cash and cash equivalents
(61 )
(264 )
(573 )
Cash and cash equivalents at beginning of period
Foreign exchange adjustment, cash and cash equivalents
(24 )
(25 )
(47 )
Cash and cash equivalents at 30 September
The cash flow statement cannot be inferred from the published financial information only.
Free cash flow
DKKm
Q3
2024
Q3
2023
9M
2024
9M
2023
Free cash flow
(151 )
(267 )
(361 )
Free cash flow, adjusted for acquisitions and disposals of
enterprises and activities
(436 )
(415 )
(604 )
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 22
Balance sheet
Notes
DKKm
30/09 2024
31/12 2023
30/09 2023
Equity and liabilities
Share capital
Foreign exchange adjustments
(1,073 )
(879 )
(550 )
Cash flow hedging
(45 )
(32 )
(46 )
Retained earnings
Shareholders in FLSmidth & Co. A/S
Minority interests
(23 )
(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
Notes
DKKm
30/09 2024
31/12 2023
30/09 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
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 23
Equity statement
9M
2024
9M
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
(3 )
Other comprehensive income
Actuarial gains/(losses) on
defined benefit plans
Currency adjustments regarding
translation of entities
(176 )
(176 )
(2 )
(178 )
(33 )
(33 )
(30 )
Reclassification of currency adjustments on disposal
(18 )
(18 )
(18 )
Cash flow hedging:
- Value adjustments for the period
(21 )
(21 )
(21 )
- Value adjustments transferred to work in progress
Tax on other comprehensive income
(16 )
(16 )
(16 )
Other comprehensive income total
(194 )
(13 )
(197 )
(2 )
(199 )
(33 )
Comprehensive income for the period
(194 )
(13 )
(33 )
Transactions with owners:
Dividend paid
(227 )
(227 )
(227 )
(170 )
(170 )
(170 )
Share-based payment
Buyout of minority interests
(13 )
(13 )
(13 )
Acquisition of treasury shares
(19 )
(19 )
(19 )
(1 )
(1 )
(1 )
Equity at 30 September
(1,073 )
(45 )
(23 )
(550 )
(46 )
(26 )
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 24
Notes
1. Key accounting estimates and judgements 25
2. Income statement by function 25
3. Segment information 26
4. Revenue 27
5. Provisions 28
6. Contractual commitments and contingent liabilities 28
7. Discontinued activities 28
8. Net working capital 29
9. Business acquisitions 29
10. Disposal of activities 29
11. Events after the balance sheet date 30
12. Accounting policies 30
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 25
1. Key accounting estimates
and judgements
When preparing the consolidated condensed
interim financial statements, we are required to
make several estimates and judgements. The
estimates and judgements that can have a
significant impact on the consolidated condensed
interim financial statements are categorised as
key accounting estimates and judgements. Key
accounting estimates and judgements are
regularly assessed to adapt to the market
conditions and changes in political and economic
factors.
Areas affected by key accounting estimates and
judgements are unchanged from the Annual
report 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
estimates relate to the estimation of warranty
provisions and the valuation of inventories, trade
receivables, work in progress and deferred tax
assets.
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
depreciation, amortisation and impairment.
Depreciation, amortisation, and impairment are
therefore separated from the individual functions
and presented in separate lines.
The income statement prepared on the basis of
cost by function is shown below:
Income Statement by function
DKKm
Q3
2024
Q3
2023
9M
2024
9M
2023
Revenue
5,059
5,723
14,856
18,138
Production costs
(3,455)
(4,144)
(10,399)
(13,809)
Gross profit
1,604
1,579
4,457
4,329
Sales costs, including depreciation and amortisation
(425)
(412)
(1,297)
(1,283)
Administrative costs, including depreciation and amortisation
(700)
(851)
(2,039)
(2,324)
Other operating net income
40
88
75
126
EBIT
519
404
1,196
848
Depreciation, amortisation
and impairment consist of:
Depreciation and impairment of property, plant and equipment and
lease assets
(65)
(78)
(212)
(249)
Amortisation and impairment of intangible assets
(60)
(56)
(179)
(178)
(125)
(134)
(391)
(427)
Depreciation, amortisation
and impairment are divided into:
Production costs
(68)
(57)
(208)
(201)
Sales costs
(6)
(5)
(17)
(18)
Administrative costs
(51)
(72)
(166)
(208)
(125)
(134)
(391)
(427)
Income Statement by function
DKKm
Q3
2024
Q3
2023
9M
2024
9M
2023
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 26
3. Segment information
9M 2024
9M 2023
FLSmidth Group
DKKm
Mining
Cement
Non-Core
Activities
Total
Mining
Cement
Non-Core
Activities
Continuing
activities
Discontinue
d activities¹
Revenue
11,370
3,356
130
14,856
12,630
4,651
857
18,138
0
Production costs
(7,622)
(2,342)
(227)
(10,191)
(9,216)
(3,478)
(914)
(13,608)
(9)
Gross profit
3,748
1,014
(97)
4,665
3,414
1,173
(57)
4,530
(9)
SG&A cost
(2,305)
(777)
(71)
(3,153)
(2,261)
(929)
(191)
(3,381)
(5)
Other operating net income
41
33
1
75
2
124
0
126
0
EBITDA
1,484
270
(167)
1,587
1,155
368
(248)
1,275
(14)
Depreciation and impairment of property, plant and equipment
and lease assets
(184)
(26)
(2)
(212)
(170)
(64)
(15)
(249)
0
EBITA
1,300
244
(169)
1,375
985
304
(263)
1,026
(14)
Amortisation and impairment of intangible assets
(158)
(21)
0
(179)
(127)
(51)
0
(178)
0
EBIT
1,142
223
(169)
1,196
858
253
(263)
848
(14)
Order intake
11,323
2,891
58
14,272
12,712
3,844
200
16,756
0
Order backlog
11,299
3,976
403
15,678
13,859
5,438
636
19,933
0
Gross margin
33.0%
30.2%
-74.6%
31.4%
27.0%
25.2%
-6.7%
25.0%
EBITDA margin
13.1%
8.0%
-128.5%
10.7%
9.1%
7.9%
-28.9%
7.0%
EBITA margin
11.4%
7.3%
-130.0%
9.3%
7.8%
6.5%
-30.7%
5.7%
EBIT margin
10.0%
6.6%
-130.0%
8.1%
6.8%
5.4%
-30.7%
4.7%
Number of employees at 30 September
5,894
1,964
17
7,875
6,588
2,869
217
9,674
0
Reconciliation of profit before tax for the period
EBIT
1,196
848
(14)
Financial income
566
1,095
3
Financial costs
(715)
(1,152)
(15)
EBT
1,047
791
(26)
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
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Interim Report 9M 2024 27
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
segments split into the main businesses Products
and Services. Revenue within the NCA segment
reflects execution of the backlog and sale of parts
already in stock.
In the graphs on the right, revenue is split by
regions 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
reflect the percentage of completion of the
performance 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
Management 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 30 September 2024
amounted to DKK 15,678m (end of 9M 2023: DKK
19,933m).
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
performance obligations on contracts where we
transfer control over time.
Revenue split by Regions 9M 2024
%
Revenue split by Regions 9M 2023
%
Backlog
DKKm
26%
26%
12%
15%
21%
NAMER
SAMER
ECANA
SSAMESA
APAC
23%
26%
18%
14%
19%
NAMER
SAMER
ECANA
SSAMESA
APAC
2,929
4,076
11,111
9,093
5,893
2,508
0
5,000
10,000
15,000
20,000
25,000
9M 2023 9M 2024
2026 and beyond 2025 2024
Revenue split on timing of revenue recognition principle
9M 2024
9M 2023
DKKm
Mining
Cement
Non-Core
Activities
Group
Mining
Cement
Non-Core
Activities
Group
Point in time
6,552
1,578
28
8,158
7,344
2,015
356
9,715
Percentage of completion
- Service, single machines and product bundles
4,025
1,633
5,658
4,438
2,313
0
6,751
- Product bundles with engineering under enhanced risk
governance
793
145
102
1,040
848
323
501
1,672
Total revenue
11,370
3,356
130
14,856
12,630
4,651
857
18,138
Revenue split on segment and category
9M 2024
9M 2023
DKKm
Mining
Cement
Non-Core
Activities
Group
Mining
Cement
Non-Core
Activities
Group
Products business
3,895
1,389
102
5,386
4,454
2,174
557
7,185
Service business
7,475
1,967
28
9,470
8,176
2,477
300
10,953
Total revenue
11,370
3,356
130
14,856
12,630
4,651
857
18,138
Revenue split on timing of revenue recognition principle
9M 2024
9M 2023
DKKm
Mining
Cement
Non-Core
Activities
Group
Mining
Cement
Non-Core
Activities
Group
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
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Interim Report 9M 2024 28
5. Provisions
Provisions was in line with the level at 31
December 2023. The use of restructuring
provisions following execution on the
transformation strategy and decline in warranty
provisions were offset by increase in other
provisions.
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 Q3 2024 amounted to
DKK 2,202m (31 December 2023: DKK 2,638m).
Contingent liabilities primarily relate to customary
performance and payment guarantees. The
volume of such guarantees amounted to DKK
1,911m (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,
quality, and timing. The volume of the guarantees
varies with the activity level and reflects the
outstanding backlog, finalised projects and
deliveries 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 included in note 5.
Other contingent liabilities of DKK 291m (31
December 2023 DKK 366m) relate to our
involvement in legal disputes, which are already
pending with courts or other authorities and other
disputes which may or may not lead to formal
legal proceedings being initiated against us.
In 2021, a customer initiated arbitration against
FLSmidth and certain partners for alleged
contractual breaches (‘the Tunisia contract’). In Q2
2024, the case was settled.
No significant changes have occurred to the
nature 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
responsibilities to finalise legacy projects,
handling of claims, etc. retained on the sale of the
non-mining bulk material handling business in
2019. In Q4 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 unsubstantiated 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
30/09 2024
31/12 2023
30/09 2023
Provisions at 1 January
2,295
2,507
2,507
Foreign exchange adjustments
(16)
(19)
3
Acquisition and disposal of Group enterprises
(12)
14
15
Additions
1,020
1,598
1,141
Used
(717)
(1,399)
(721)
Reversals
(261)
(406)
(171)
Provisions
2,309
2,295
2,774
The split of provisions is as follows:
Warranties
824
883
926
Restructuring
210
360
521
Other provisions
1,275
1,052
1,327
2,309
2,295
2,774
The maturity of provisions is specified as follows:
Current liabilities
1,643
1,635
1,882
Non-current liabilities
666
660
892
2,309
2,295
2,774
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
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Interim Report 9M 2024 29
8. Net working capital
Net working capital at 30 September 2024 has
increased by DKK 0.8bn compared to 31
December 2023. The increase is primarily driven
by payments to suppliers leading to a reduction in
trade payables but also increase in work in
progress, net assets and trade receivables
contributed to the increase.
Utilisation of supply chain financing decreased
slightly in the 9 months of 2024 to DKK 496m (31
December 2023: 504m).
9. Business Acquisitions
On 4 March 2024, FLSmidth acquired the
Canadian mill engineering, supply and services
provider, 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
targeting service growth through strategic
investments and prioritisation.
Farnell-Thompson is a global supplier of
engineering services, parts and mills to the mining
industry. Prior to the acquisition Farnell-Thompson
has been a consulting partner providing these
services 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 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
assets is recognised as goodwill of DKK 96m in
the preliminary allocation of the purchase price.
Goodwill represents primarily the value of the
assembled 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.
In Q3 2023, the transaction on the sale of material
handling technology to KOCH Solutions was
completed. The final purchase price adjustments
are currently being determined. It is expected that
the outcome will be a loss from the sale of around
DKK 20m that has been included in Q2 2024
within Non-core activities.
Q3 2023 included the preliminary gain of around
DKK 100m from the sale of the Advanced Filtration
Technology (AFT) business to Micronics. The gain
is included within the Cement segment.
Gains and losses from disposal of activities are
included in the line item ‘Other operating net
income’.
Net working capital
DKKm
30/09 2024
31/12 2023
30/09 2023
Inventories
3,416
3,450
3,847
Trade receivables
4,639
4,516
4,855
Work in progress, assets
2,915
2,769
3,450
Prepayments
486
423
548
Other receivables
865
855
1,030
Derivative financial instruments
29
37
32
Prepayments from customers
(1,958)
(1,933)
(2,180)
Trade payables
(3,440)
(4,024)
(3,719)
Work in progress, liability
(2,914)
(3,025)
(3,512)
Other liabilities
(1,794)
(1,637)
(1,513)
Derivative financial instruments
(36)
(49)
(42)
Net working capital
2,208
1,382
2,796
Change in net working capital
(826)
511
(903)
Acquisitions/disposal of activities, financial instruments and foreign
exchange effect on cash flow
(256)
(213)
(171)
Cash flow effect from change in net working capital
(1,082)
298
(1,074)
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
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Interim Report 9M 2024 30
11. Events after the balance
sheet date
As announced on 19 September 2024, FLSmidth
has signed an agreement to acquire TIPCO
Tudeshki Industrial Process Control GmbH (Tip-
co). The transaction closed on 8 October 2024.
Tipco is the developer of sensor technology that
can measure the particle size distribution of
different mass flows, which offers strong
applications across FLSmidth’s Mining portfolio.
The acquisition will be incorporated into the cash
generating unit Mining. The acquisition will not
have a significant impact on the financial
statements.
We are not aware of any subsequent matters that
could be of material importance to the Group’s
financial position at 30 September 2024.
12. Accounting policies
The condensed interim report of the Group for the
first nine months of 2024 is presented in
accordance with IAS 34, Interim Financial
Reporting, as approved by the EU and additional
Danish disclosure requirements regarding interim
reporting by listed companies.
Apart from the below mentioned changes, the
accounting policies are unchanged from those
applied 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
Statements with effective date 1 January 2027.
The Standard replaces IAS 1, Presentation of
Financial Statements, and includes requirements
on presentation in the primary financial
statements together with the disclosure of
information in the notes. We are currently
assessing the impact of IFRS 18 and foresee some
changes to the presentation in the income and
cash flow statements and to the disclosures in the
notes to the financial statements.
Changes in accounting policies
As of 1 January 2024, FLSmidth Group has
implemented all new or amended accounting
standards and interpretations as adopted by the
EU and applicable for the 2024 financial year.
This includes the changes to:
• IAS 1 (Classification of Liabilities as Current or
Non-current) and
• IAS 7 and IFRS 7 (Supplier Finance
Arrangements) and
• IFRS 16 (Lease Liability in a Sale and
Leaseback)
The implementation has not had and is not
expected to have significant impact on the
consolidated condensed interim financial
statements.
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 32
Executive management
Board of directors
Statement by Management
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report 9M 2024 33
FLSmidth & Co. A/S’ financial reports, whether in
the form of annual reports or interim reports, filed
with the Danish Business Authority and/or
announced via the company’s website and/or
NASDAQ Copenhagen, as well as any
presentations based on such financial reports, and
any other written information released, or oral
statements 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
connection 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
future 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
performance, future actions and outcome of
contingencies such as legal proceedings and
statements 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
important factors, including those described in this
report, could cause actual results to differ
materially 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 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
reductions for FLSmidth & Co. A/S’ products
and/or services, introduction of competing
products, reliance on information technology,
FLSmidth & Co. A/S’ ability to successfully market
current and new products, exposure to product
liability and legal proceedings and investigations,
changes in legislation or regulation and
interpretation thereof, intellectual property
protection, perceived or actual failure to adhere to
ethical marketing practices, investments in and
divestitures of domestic and foreign enterprises,
unexpected growth in costs and expenses, failure
to recruit and retain the right employees and
failure to maintain a culture of compliance. Unless
required 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
