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FLSmidth & Co. A/S: Better-than-expected Q1 2025, with a strong financial performance in Mining driving an upgraded full-year guidance
COMPANY ANNOUNCEMENT NO. 8-2025
FLSmidth & Co. A/S
1 4 May 2025
Copenhagen, Denmar
FLSmidth Group CEO, Mikko Keto, comments: “
The US accounted for approximately 20% of our sales in 2024, with approximately half of our sales to the US being imports. Our flexible supply chains and proactive tariff mitigation measures – reducing China-US supply flows, potentially passing on tariff costs to customers and optimising our supply chain efficiency – will help mitigate the associated risks, and we currently see limited direct impacts on our operations.
However, we recognise that continued tariff-related uncertainty may further delay larger investment decisions and impact the overall market sentiment if prolonged.
order intake decreased by 10% compared to Q1 2024 (currencies had no impact on Mining order intake in Q1 2025). Service order intake decreased by 2% driven by the exit from basic labour contracts, partly offset by higher order intake within consumables. Products order intake decreased by 25% compared to Q1 2024. No large Products orders were announced in Q1 2025, whereas two large Products orders with a combined value of DKK 680m were announced in Q1 2024. Service and Products comprised 72% and 28% of the total Mining order intake in the quarter, respectively (67% and 33% in Q1 2024, respectively).
order intake decreased by 18% compared to Q1 2024 (decrease of 12% if excluding currency effects and effects from divestments). Service order intake decreased by 14% primarily reflecting the divestment of the MAAG business in Q1 2024. Products order intake decreased by 27% driven in part by the divestment of the MAAG business as well as continued portfolio pruning. Service and Products comprised 73% and 27% of the total Cement order intake in the quarter, respectively (69% and 31% in Q1 2024, respectively).
order intake decreased by 12% compared to Q1 2024 (decrease of 11% if excluding currency effects and effects from divestments). Service order intake decreased by 4% driven by relatively lower order intake in both the Mining and Cement businesses. Products order intake decreased by 27% driven by lower Products orders in both the Mining and Cement businesses. Service and Products comprised 72% and 28% of the total order intake in Q1 2025, respectively (67% and 33% in Q1 2024, respectively).
revenue increased by 4% compared to Q1 2024 (currencies had no impact on Mining order intake in Q1 2025). Service revenue increased by 14% as a result of higher revenue from consumables, spare parts and upgrades & retrofits, driven by effective backlog management and enhanced order execution. Products revenue decreased by 18% primarily reflecting the de-risking of our products portfolio and the timing of the execution of certain large-scale Products orders. Gross profit increased by 13% to DKK 1,304m (DKK 1,153m in Q1 2024) corresponding to a gross margin of 35.2% (32.2% in Q1 2024). Excluding transformation and separation costs of DKK 51m, the Adjusted EBITA margin was 15.1% in Q1 2025. Including these items, the EBITA margin was 13.7% compared to 10.3% in Q1 2024.
revenue decreased by 15% compared to Q1 2024 (decrease of 11% if excluding currency effects and effects from divestments). Service revenue decreased by 1% due to the divestment of the MAAG business in Q1 2024. Products revenue decreased by 37% driven by continued portfolio pruning and the divestment of the MAAG business. Gross profit increased by 20% to DKK 325m (DKK 271m in Q1 2024) corresponding to a gross margin of 31.8% (22.4% in Q1 2024). Excluding transformation and separation costs of DKK 9m, the Adjusted EBITA margin was 9.5% in Q1 2025. Including these items, the EBITA margin was 8.6% compared to 4.7% in Q1 2024.
revenue decreased by 2% compared to Q1 2024 (decrease of 1% if excluding currency effects and effects from divestments). Service revenue increased by 11% driven by higher Service revenue in the Mining business. Products revenue decreased by 26% driven by lower Products revenue in both the Mining and the Cement businesses. Gross profit increased by 18% to DKK 1,629m (DKK 1,384m in Q1 2024) corresponding to a gross margin of 34.4% (28.6% in Q1 2024). Excluding transformation and separation costs of DKK 60m, the Adjusted EBITA margin was 13.9% in Q1 2025. Including these items, the EBITA margin was 12.6% compared to 7.5% in Q1 2024.
With reference to the press release issued on 18 February 2025, Julian Soles formally joined FLSmidth on 1 May 2025 as President, Mining Products Business Line. Further, Toni Laaksonen, who has been appointed as new President, Mining Service Business Line, is expected to join FLSmidth soon.
In the first quarter of 2025, FLSmidth has made further progress towards the potential divestment of the Cement business. To this end, we have entered into exclusive negotiations with Pacific Avenue Capital Partners, a global investment fund specialised in industrial carve-outs. There is no certainty that any transaction will transpire. Any further announcements will be made as and when appropriate.
The financial guidance for the full year 2025, that was upgraded on 14 May 2025 (ref. Company Announcement no. 7-2025), is maintained. The financial guidance reflects the ongoing business simplification and transformation efforts, continued improvement in the core Mining business and the effects from the strategic initiatives implemented in the Cement business.
Compared to 2024, we expect market demand in the Mining Service business to remain stable and active, whereas market demand in the Mining Products business is expected to remain soft.
The guidance for the Adjusted EBITA margin excludes transformation and separation costs of around DKK 200m for the full year 2025. Further, the Adjusted EBITA margin is expected to be positively impacted by additional business simplification initiatives, organisational restructuring and enhanced commercial execution.
We expect the short-term outlook for the cement industry to remain impacted by macroeconomic uncertainty. The guidance for revenue reflects the divestment of the MAAG business completed in 2024.
The guidance for the Adjusted EBITA margin excludes transformation and separation costs of around DKK 50m for the full year 2025.
The Consolidated Group guidance reflects the sum of the guidance for the two business segments. The guidance for 2025 is subject to uncertainty from macroeconomic and geopolitical turmoil.
A presentation of the Q1 2025 Interim Financial Report is scheduled for Wednesday 14 May 2025 at 11:00 a.m. CEST. During the presentation, Group CEO, Mikko Keto, and Group CFO, Roland M. Andersen, will comment on the report and developments in the Group. The presentation will be followed by a Q&A session.
The presentation can be followed live or as a replay via the internet here.
If you wish to ask questions during the Q&A session, please sign up here. After registration, you will receive phone numbers, pin codes and a calendar invite. Please note that you will receive two codes (a pass code and a PIN code), both of which are needed when dialling into the webcast.
The presentation slides will be made available shortly before the scheduled start of the webcast at https://fls.com/en/investors/financial-downloads.
Andreas Holkjær, +45 24 85 03 84, andh@flsmidth.com
Jannick Denholt, +45 21 69 66 57, jli@flsmidth.com
Jannick Denholt, +45 21 69 66 57, jli@flsmidth.com
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