Interim Report
H1 2024
1 January –
30 June 2024
Company announcement no. 10
FLSmidth & Co. A/S
Vigerslev Allé 77
DK-2500 Valby
CVR No. 58180912
FLSmidth
■
Interim Report H1 2024 2
Management review
Highlights Q2 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 Q2
2024 14
Consolidated financial performance H1
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. Financial costs 28
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
12. Events after the balance sheet date 30
13. Accounting policies 30
Statements
Statement by Management 32
Forward looking statements 33
Contents
In t rodu ct i o n H i g hl ig ht s B usine ss Mi ning b usine s s C e me nt b usine ss N o n-C o re Activ it ie s Fi na nc i a l p e r f o rm a nc e G o v e rn a nc e Fina nc ia l sta te me nts
FL S m i dt h
■
In te ri m Re p o rt H 1 20 24 3
Management
review
Highlights Q2 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 Q2 2024 14
Consolidated financial performance H1 2024 17
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 4
Our performance in the first half of the year is a testament to our continued
strong progression across all of our core transformation activities, with additional
improvements in profitability for both Mining and Cement.
In Mining, we delivered an Adjusted EBITA margin of 13.1% in the second quarter
of the year - the highest level in many years. This was driven by strong margin
execution and a continued robust performance by our Service business. We con-
tinue to see a stable and healthy service market, whereas the products market
remains soft due to persisting hesitation by some customers on larger investment
decisions.
Our Cement business achieved an Adjusted EBITA margin of 9.6% in the second
quarter of the year, demonstrating our successful efforts in simplifying its operat-
ing model and driving Service growth in our core market clusters. The largely sta-
ble cement market continues to provide good opportunities for the Service busi-
ness, whereas we continue to de-risk the Products business to preserve
profitability.
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.
Looking ahead, the resilience of our service-oriented business model, our contin-
ued focus on business simplification to ensure a cost-efficient operating model
and our dedicated focus on strategy execution gives us great confidence that we
are well on track to meet our long-term financial ambitions for both Mining and
Cement.
Mikko Keto, Group CEO
Mining
Cement
■
7% growth in Service order in-
take, whereas the significant de-
cline in Products orders reflects
market softness
■
Revenue decline of 13% primar-
ily reflects timing of the execu-
tion of certain Products orders
■
Strong gross margin driven by
mix and good backlog execution
■
Continued profitability progress
with adj. EBITA margin of 13.1%
■
Service order intake growth in
core market clusters partly off-
sets impacts from de-risking and
divestments
■
Revenue declined by 32% as a
result of portfolio pruning and di-
vestments
■
Adj. EBITA margin of 9.6% re-
flecting strong margin execution
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 end of 2023 but remains be-
hind our 2024 target
■
First commercial REFLUX™ flota-
tion cell order, supporting our
MissionZero programme
■
Continued business simplification
with >2,000 less FTEs vs. Q2’23
■
Dedicated focus on implementing
a cost-efficient operating model
and corporate structure over the
next 12-18 months
■
Financial guidance for 2024, as
set out on 7 August 2024, is
maintained
Highlights Q2 2024
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 5
Financial performance highlights
Mining
Cement
Non-Core Activities
Group
Order intake (DKKm)
▼ -18.8%
3,423
Order intake (DKKm)
▼ -21.2%
1,006
Order intake (DKKm)
▼ -78.1%
7
Order intake (DKKm)
▼ -19.7%
4,436
Revenue (DKKm)
▼ -13.1%
3,783
Revenue (DKKm)
▼ -32.3%
1,131
Revenue (DKKm)
▼ -88.4%
44
Revenue (DKKm)
▼ -22.5%
4,958
EBITA & EBITA margin (DKKm - %)
▲ 16.7%
434 11.5% (adj. 13.1%)
EBITA & EBITA margin (DKKm - %)
▲ 31.5%
96 8.5% (adj. 9.6%)
EBITA & EBITA margin (DKKm - %)
▲ 13.3%
(99) -225.0%
EBITA & EBITA margin (DKKm - %)
▲ 29.8%
431 8.7% (adj. 10.2%)
Revenue split by Service & Products (%)
Revenue split by Service & Products (%)
Revenue split by Service & Products (%)
Cash flow from operating activities
DKK 14m ▼ from DKK 372m in Q2 2023
Earnings per share
DKK 3.2 ▲ from DKK 2.0 in Q2 2023
Net working capital ratio
9.4% ▼ from 10.1% end of Q2 2023
NIBD/EBITDA
0.7x ▼ from 1.0x end of Q2 2023
4,215
3,423
Q2 2023
Q2 2024
1,276
1,006
Q2 2023
Q2 2024
32
7
Q2 2023
Q2 2024
11,155
9,684
5,523
4,436
H1 2023
H1 2024
Q2 2023
Q2 2024
4,351
3,783
Q2 2023
Q2 2024
1,670
1,131
Q2 2023
Q2 2024
378
44
Q2 2023
Q2 2024
12,415
9,797
6,399
4,958
H1 2023
H1 2024
Q2 2023
Q2 2024
372
434
Q2 2023
Q2 2024
73
96
Q2 2023
Q2 2024
(113)
(99)
Q2 2023
Q2 2024
567
796
332
431
H1 2023
H1 2024
Q2 2023
Q2 2024
68%
(Q2 2023: 65%)
32%
(Q2 2023: 35%)
Service
Products
57%
(Q2 2023: 52%)
43%
(Q2 2023: 48%)
Service
Products
55%
(Q2 2023: 34%)
45%
(Q2 2023: 66%)
Service
Products
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 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 sci-
ence-based targets
%
MissionZero developments
Through our MissionZero
programme, we enable our
customers to drive their green
transition by providing innovative
technologies and solutions across
the full flowsheet.
First REFLUX™ flotation cell order
Included in order intake for the quarter, FLSmidth re-
ceived its first commercial order for our REFLUX™ flotation
cell (RFC) with a US based customer. The RFC delivers
fast and high-efficiency flotation, which raises the stand-
ard when it comes to concentrate grade and recovery.
The RFC significantly shifts the grade and recovery curve,
whilst at the same time reducing energy consumption and
significantly increasing throughput.
Solar panel car park installation at FLS-
midth manufacturing site
FLSmidth recently completed the installation of 914 solar
panels over our parking structure in Tucson, Arizona. The
solar panel system will generate enough electricity to
cover 35% of the annual power consumption of the facility
and, when combined with certified renewable energy cer-
tificates from local utilities, the project is expected to off-
set 100% of our electrical consumption and reduce our
carbon footprint by approximately 600t CO
2
per annum.
The project has been designed to also provide a shaded
parking area for more than 100 cars, enhancing safety in
a city that sees temperatures often above 38 C.
16,817
Target: 39,445 in 2024
14.8% improvement
3,050
Target: 4,065 by 2030
43.8% improvement
19.2
Target: 15% in 2024
6.6%-points improvement
Scope 1 and 2 CO
2
emissions declined by 14.8% com-
pared to H1 2023. Consolidation of Mining Technolo-
gies sites during 2023 and the sale of MAAG in Q1
2024 continue to be supportive in reducing emissions.
Further emissions reduction initiatives, such as the Tuc-
son solar panel project completed during Q2 2024, will
further contribute to our emissions target for 2024.
Scope 3 economic intensity for H1 2024 declined by
43.8% compared to 2023. The significant reduction is
driven by the order mix, with Mining orders represent-
ing a greater share of order intake relative to Cement
orders year-to-date. Cement Product orders within pyro
systems remain subdued and is a key driver to our eco-
nomic intensity. We expect quarterly volatility with this
KPI relating to order mix.
Spend with suppliers with science-based targets in-
creased by 6.6%-points compared to 2023. Perfor-
mance for the first half of the year was supported by a
greater share of our large suppliers committing to the
Science Based Targets initiative. The improvement re-
flects our ongoing engagement with suppliers to pro-
mote environmentally responsible practices.
Water withdrawal
m
3
Women managers
%
Safety (Total recordable injury rate)
Total recordable injury rate/million working hours
71,828
Target: 192,738 in 2024
4.7% improvement
15.0
Target: 18.4% in 2024
1.3%-points reduction
2.5
Target: 1.1 in 2024
0.5 improvement
Water withdrawal was reduced by 4.7% compared to
H1 2023. Consolidation of Mining Technologies sites
during 2023 and the sale of MAAG were supportive
for the performance year-to-date. However, with-
drawal has trended upwards during Q2 2024 due to
seasonal impacts. Performance remains on track to
meet our annual target.
The percentage of women managers decreased during
the first half of 2024. Further delayering within the or-
ganisation resulted in several managers moving to an
individual contributor role. These changes largely im-
pacted parts of the organisation with a higher repre-
sentation of our female workforce. We will continue
with our initiatives to progress toward our targets de-
spite short term swings.
Safety performance has improved compared to H1
2023 but we remain behind our target for the full year.
To support improvement, we implemented several initi-
atives towards the end of 2023. This has improved per-
formance and stabilised the incident rate, and we will
continue our efforts toward our long-term target of
‘Zero Harm’.
19,742
16,817
H1 2023
H1 2024
5,430
3,050
2023
H1 2024
12.6%
19.2%
2023
H1 2024
75,382
71,828
H1 2023
H1 2024
16.3%
15.0%
2023
H1 2024
3.0
2.5
H1 2023
H1 2024
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 7
Key figures
DKKm, unless otherwise stated
Q2
2024
Q2
2023
H1
2024
H1
2023
2023
Income statement
Revenue
4,958
6,399
9,797
12,415
24,106
Gross profit
1,579
1,497
2,993
2,894
6,087
EBITDA
501
415
943
737
1,761
EBITA
431
332
796
567
1,438
Adjusted EBITA*
506
429
949
791
1,919
EBIT
372
267
677
444
1,200
Financial items, net
(80)
(73)
(82)
(89)
(146)
EBT
292
194
595
355
1,054
Profit for the period, continuing activities
187
123
381
226
672
Loss for the period, discontinued activities**
0
(5)
0
(24)
(181)
Profit for the period
187
118
381
202
491
Orders
Order intake
4,436
5,523
9,684
11,155
21,376
Order backlog
16,518
20,544
17,593
Earning ratios
Gross margin
31.8%
23.4%
30.6%
23.3%
25.3%
EBITDA margin
10.1%
6.5%
9.6%
5.9%
7.3%
EBITA margin
8.7%
5.2%
8.1%
4.6%
6.0%
Adjusted EBITA margin*
10.2%
6.7%
9.7%
6.4%
8.0%
EBIT margin
7.5%
4.2%
6.9%
3.6%
5.0%
EBT margin
5.9%
3.0%
6.1%
2.9%
4.4%
Cash flow
Cash flow from operating activities (CFFO)
14
372
(338)
(32)
623
Acquisitions of property, plant and equipment
(80)
(34)
(138)
(58)
(176)
Cash flow from investing activities (CFFI)
(103)
(154)
(57)
(178)
(257)
Free cash flow
(89)
218
(395)
(210)
366
Free cash flow adjusted for acquisitions and
disposals of enterprises and activities
(89)
260
(543)
(168)
201
Balance sheet
Net working capital
2,021
2,542
1,382
Net interest-bearing debt (NIBD)
(1,227)
(1,214)
(639)
Total assets
28,086
29,217
27,011
CAPEX
293
215
604
Equity
11,112
10,715
10,828
Dividend to shareholders, paid
227
170
227
170
170
DKKm, unless otherwise stated
Q2
2024
Q2
2023
H1
2024
H1
2023
2023
Financial ratios
Book-to-bill
89.5%
86.3%
98.8%
89.9%
88.7%
Order backlog / Revenue
76.9%
83.7%
73.0%
Return on equity
6.1%
3.8%
4.5%
Equity ratio, end
39.6%
36.7%
40.1%
ROCE, average
8.3%
5.0%
8.2%
Net working capital ratio, end
9.4%
10.1%
5.7%
NIBD / EBITDA
0.7.x
1.0x
0.4x
Capital employed
18,211
18,041
17,552
Number of employees
8,225
10,234
9,377
Share ratios
Cash flow per share (CFPS), (diluted), (DKK)
0.2
6.5
(5.9)
(0.6)
10.9
Earnings per share (EPS), (diluted), (DKK)
3.2
2.0
6.5
3.6
8.7
Share price, (DKK)
346.2
330.2
287.2
Number of shares (1,000), end
57,650
57,650
57,650
Market capitalisation, end
19,958
19,036
16,557
Sustainability key figures
Scope 1 & 2 GHG emissions (tCO2e) market-based
16,817
19,742
38,022
Scope 3 Economic intensity***
3,050
5,430
Spend with suppliers with science-based targets
19.2%
10.5%
12.6%
Water withdrawal (m3)
71,828
75,382
167,610
Women managers
15.0%
16.1%
16.3%
Safety, TRIR Total Recordable Injury Rate (including
contractors)
2.5
3.0
2.7
Other key figures
Quality, DIFOT Delivery In Full On Time
84.1%
83.0%
81.9%
Use of alternative performance measures
Throughout the report, we present financial measures which are not defined according to IFRS. We refer to note 7.4, Alternative
performance measures, and note 7.8, Definition of terms, in 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 ongoin g
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 year to date number.
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 8
2024 financial guidance
Financial guidance for 2024, as set out in Company Announcement no. 9-2024 on 7 August 2024, is maintained. The guidance reflects the ongoing busi-
ness 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
May 2024
Guidance
August 2024
Guidance
May 2024
Guidance
August 2024
Guidance
May 2024
Guidance
August 2024
Guidance
May 2024
Guidance
August 2024
Revenue
(DKKbn)
16.0-17.0
∼ 15.5
(7.4)
Revenue
(DKKbn)
4.0-4.5
4.0-4.5
(2.3)
Revenue
(DKKm)
250-350
200-300
(94)
Revenue
(DKKbn)
20.0-21.5
∼ 20.0
(9.8)
Adj. EBITA
margin
11.5-12.5%
12.5-13.0%
(12.3%)
Adj. EBITA
margin
5.5-6.5%
8.0-9.0%
(8.6%)
Adj. EBITA
margin
9.0-10.0%
10.0-11.0%
(9.7%)
EBITA
(DKKm)
Loss of 200-300
Loss of 200-300
(Loss of 161)
EBITA
margin
7.5-8.5%
8.5-9.5%
(8.1%)
The numbers in brackets represent H1 2024 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 posi-
tive outlook for minerals crucial to continued
global economic development and a successful
green energy transition.
The guidance for the adjusted EBITA margin in-
cludes an adjustment for transformation and sep-
aration costs of around DKK 200m for the full
year 2024. The adjusted EBITA margin is im-
pacted by the realisation of the full cost syner-
gies from the Mining Technologies acquisition,
cost base inflation and re-investment of parts of
the synergies into key commercial areas to sup-
port 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 simplifi-
cation and product portfolio pruning, including
the completed sale of the MAAG business in Q1
2024. Further, the guidance for adjusted EBITA
margin includes an adjustment for transformation
and separation costs of around DKK 100m for the
full year 2024.
The guidance for revenue reflects continued exe-
cution of the order backlog and contract negotia-
tions aimed at reducing the scope of the remain-
ing Non-Core Activities order backlog. The EBITA
margin guidance reflects the operational loss-
making nature of the business as well as costs re-
lated to finalising the exit of the business seg-
ment by end of 2024.
The Consolidated Group guidance reflects the
sum of the guidance for the three business seg-
ments.
The guidance for 2024 is subject to uncertainties
stemming from the current macroeconomic and
geopolitical environment.
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 9
The mining service market
remains stable with increased
customer appetite for upgrading
and rebuilding equipment to
extend equipment life and
improve operational efficiency as
well as continued interest in
smaller capex opportunities to
increase production.
We have continued to observe a stable mining
service market, with customers continuously look-
ing to service providers for ways of enhancing
their operational efficiency and extending equip-
ment life through upgrades and rebuilds. Further,
we continue to see good interest in services which
enable increased mineral throughput and recov-
ery rates as well as lower energy usage, which in
combination will not only lead to enhanced opera-
tional efficiency but will also greatly improve cus-
tomers’ sustainability performance.
We have seen interest in smaller capex opportuni-
ties to increase production and improve process
performance, although larger project awards con-
tinue to be delayed due to persisting hesitation by
some customers on larger investment decisions.
However, activity within gold project is somewhat
of an exception with a slight positive development
in the quarter.
Despite continued volatility in commodity prices,
optimism on the longer-term demand outlook per-
sists, bolstered by encouraging indicators from
major economies and growing needs from the en-
ergy transition.
Order intake development in Q2 2024
Mining order intake decreased by 19% compared
to Q2 2023, due to lower Products order intake.
Excluding currency effects, the order intake de-
creased by 17%.
Service order intake increased by 7% compared to
Q2 2023, mainly driven by consumables and up-
grades & retrofits. In the quarter, a leading Chil-
ean iron ore miner awarded FLSmidth with a multi-
year contract to service its five high-pressure
grinding rolls (HPGRs) across three of its mines in
Chile. Key focus for the customer has been to en-
hance productivity and extend the lifetime of its
HPGRs.
Products order intake decreased by 61% com-
pared to Q2 2023 as a result of our general de-
risking approach as well as continued customer
hesitation to approve larger brownfield and green-
field expansions. In addition, no large orders were
signed in the quarter compared to two large, an-
nounced Products orders with a combined value
of around DKK 785m signed in Q2 2023.
During the quarter, Service and Products orders
accounted for 82% and 18% of the total order in-
take, respectively, compared to 62% and 38% in
Q2 2023.
Order intake development in H1 2024
H1 2024 order intake, compared to H1 2023, de-
creased by 9% to DKK 7,599m. Excluding currency
effects order intake decreased by 7%.
Service order intake increased by 1% in H1 2024,
reflecting stable and healthy market conditions for
mining service activities.
Products order intake decreased by 30% as cus-
tomers continue to hesitate on large capital in-
vestments, combined with an ongoing environ-
ment of political uncertainties and permitting
issues. Two large Products orders with a com-
bined value of DKK 680m were announced in H1
2024 compared to three large orders with a com-
bined value of DKK 1.1bn announced in H1 2023.
During the first half of the year, Service and Prod-
ucts order intake represented 73% and 27% of
Mining order intake, respectively, compared to
66% and 34% in H1 2023.
Mining financial performance
Order intake split by
region, Q2 2024
Order intake split by
Service and Products, Q2 2024
Order intake split by
commodity, Q2 2024
12%
19%
11%
31%
27%
ECANA
APAC
SSAMESA
SAMER
NAMER
82%
(Q2 2023: 62%)
18%
(Q2 2023: 38%)
Service
Products
53%
13%
3%
1%
9%
21%
Copper
Gold
Coal
Fertilizer
Iron ore
Other
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 10
Revenue development in Q2 2024
Revenue decreased by 13% compared to Q2
2023. Excluding currency effects, revenue de-
creased by 12%.
Service revenue decreased by 10% compared to
Q2 2023 to DKK 2,557m. The year-on-year de-
crease was primarily due to lower revenue within
spare parts and professional services driven by
timing of order execution in South America as well
as Q2 2023 included order execution from two
major orders. The decline was partly offset by rel-
atively higher revenue within consumables.
Products revenue decreased by 19% compared to
Q2 2023 driven by our de-risking strategy and
timing of the execution of certain larger Products
orders.
Service and Products revenue comprised 68% and
32% of total Mining revenue in Q2 2024.
Gross profit development in Q2 2024
Gross profit increased by 14% to DKK 1,263m, from
DKK 1,107m in Q2 2023. The corresponding gross
margin increased from 25.4% in Q2 2023 to 33.4%
in Q2 2024. The strong gross margin was a result
of good execution on higher-margin orders follow-
ing our de-risking strategy.
EBITA development in Q2 2024
The Adjusted EBITA margin was 13.1% when ex-
cluding transformation and separation costs of
DKK 63m related to our ongoing separation of the
Mining and Cement businesses as well as the on-
going business simplification. The higher Adjusted
EBITA margin was driven by the improvement in
gross profit partly offset by an increase in SG&A
costs due to new hirings in key commercial areas.
The EBITA margin increased to 11.5% from 8.6% in
Q2 2023.
Revenue development in H1 2024
Mining revenue decreased by 14% compared to H1
2023. Excluding currency effects, revenue de-
creased by 12%. Service revenue decreased by
10% compared to H1 2023 primarily as a result of
lower revenue within spare parts as well as the
ongoing exit from basic labour services. Products
revenue decreased by 20% as a result of our de-
risking strategy and timing of the execution of cer-
tain larger Products orders.
Gross profit development in H1 2024
Gross profit increased by 12% to DKK 2,443m in H1
2024. The corresponding gross margin of 33.2%
was driven by good execution on higher-margin
orders and lower cost of production resulted from
the realised synergies from the business simplifi-
cation.
EBITA development in H1 2024
EBITA increased by 24% in H1 2024 with a corre-
sponding EBITA margin of 10.9%, reflecting good
execution on higher-margin orders, partly offset
by relatively higher SG&A costs due to new hir-
ings in key commercial areas. Excluding transfor-
mation and separation costs of DKK 104m, the ad-
justed EBITA margin was 12.3%.
Employees
The number of employees in Mining has been re-
duced by 632 since the end of Q2 2023. This re-
duction reflects the synergy takeout related to the
integration of Mining Technologies and the busi-
ness simplification, partly offset by new hirings in
key commercial areas to fuel our long-term
growth ambitions to support our CORE’26 strat-
egy.
Mining financial performance
Growth in order intake and
revenue in Q2 2024 (vs. Q2 2023)
Revenue and EBITA margin
DKKm EBITA margin %
Revenue split by
Service and Products, Q2 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
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Products Service
EBITA margin % Adj. EBITA margin %
68%
(Q2 2023: 65%)
32%
(Q2 2023: 35%)
Service
Products
Order
intake
Revenue
Organic
-17%
-12%
Currency
-2%
-1%
Total growth
-19%
-13%
Mining
(DKKm)
Q2 2024
Q2 2023
Change (%)
H1 2024
H1 2023
Change (%)
Order intake
3,423
4,215
-19%
7,599
8,392
-9%
- Hereof service order intake
2,794
2,615
7%
5,578
5,517
1%
- Hereof products order intake
629
1,600
-61%
2,021
2,875
-30%
Order backlog
11,852
13,472
-12%
11,852
13,472
-12%
Revenue
3,783
4,351
-13%
7,364
8,536
-14%
- Hereof service revenue
2,557
2,833
-10%
4,961
5,533
-10%
- Hereof products revenue
1,226
1,518
-19%
2,403
3,003
-20%
Gross profit
1,263
1,107
14%
2,443
2,172
12%
Gross margin
33.4%
25.4%
33.2%
25.4%
Adjusted EBITA
497
469
6%
908
869
4%
Adjusted EBITA margin
13.1%
10.8%
12.3%
10.2%
EBITA
434
372
17%
804
646
24%
EBITA margin
11.5%
8.6%
10.9%
7.6%
Number of employees
6,110
6,742
-9%
6,110
6,742
-9%
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 11
Q2 2024 has shown promising
signs for the Cement business,
continuing the positive trend that
began earlier in the year. While
global cement demand is
relatively unchanged, regional
outlooks vary widely, with
pockets of high demand in parts
of the world.
Q2 2024 has shown tight competition among ce-
ment producers in mature markets, such as Eu-
rope and the US, and rising input prices are driv-
ing investments in optimisation, efficiency, and
cost optimisation efforts. Meanwhile, in some re-
gional markets, especially in India, growing infra-
structure investments are driving a demand in-
crease driven by housing and commercial
construction as well as infrastructure development
projects by the government. We anticipate these
trends will support a prolonged appetite for ce-
ment plant equipment and services.
In the longer term, there will be a growing and sig-
nificant need for solutions and services that sup-
port decarbonisation, such as calcined clay, alter-
native fuel solutions, energy efficient technologies
and digital offerings. We are already seeing ce-
ment producers in countries such as Turkey and
Egypt making investments in green solutions,
driven by rising primary fuel costs as well as the
anticipation of the EU Carbon Border Adjustment
Mechanism (CBAM) and possible equivalents in
other developed markets. Finally, despite a slow
cement demand and overcapacity in China, ce-
ment producers are also implementing technolo-
gies to minimise their environmental footprint in
line with the government’s strict requirements.
Order intake development in Q2 2024
Cement order intake decreased by 21% in Q2
2024 compared to Q2 2023, as a result of lower
Products order intake and due to the divestment
of the AFT and MAAG businesses. Excluding di-
vestments and currency effects of 5%, the organic
order intake decreased by 16%.
Service order intake increased by 1% compared to
Q2 2023, despite the AFT divestment in Q3 2023
and the sale of the MAAG business in Q1 2024.
We have seen continued strong growth in orders
for spare parts and professional services within
our core market clusters, partly offset by lower or-
ders for upgrades & retrofits.
Product order intake decreased by 53% compared
to Q2 2023, driven in part by the continued prun-
ing of our product portfolio, following our de-risk-
ing strategy and the impact of divestments.
Service and Products comprised 75% and 25% of
the total Cement order intake in Q2 2024, respec-
tively, compared to 59% and 41% in Q2 2023.
Order intake development in H1 2024
Cement order intake in H1 2024 declined by 22%.
This was mainly due to a 46% decrease in Prod-
ucts order intake compared to H1 2023, driven by
the same factors as in Q2 2024. Excluding divest-
ments and currency effects of 4%, the order intake
decreased organically by 18%.
Service order intake decreased by 6% compared
to H1 2023 mainly driven by lower orders related
to upgrades and retrofits. The decrease was
partly offset by an increase in orders for our core
offerings, spare parts and professional services,
as a result of stable market conditions and our
ability to offset the impact of the recent divest-
ments of AFT and MAAG with growth in share of
wallet in our installed customer base.
Order intake split by
cluster in Q2 2024
*For more information on clusters, please refer to page 31 in
the 2023 Annual Report
Order intake split by
Service and Products, Q2 2024
Cement financial performance
23%
5%
14%
5%
1%
33%
3%
16%
India
Turkey
Denmark
China
Indonesia
Export cluster
Brazil
US
75%
(Q2 2023: 59%)
25%
(Q2 2023: 41%)
Service
Products
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 12
Revenue development in Q2 2024
Revenue decreased by 32% compared to Q2
2023. Excluding the effect from divestments and
currency of 8%, revenue decreased organically by
24%.
Service revenue decreased by 26% compared to
Q2 2023 due to the divestments of the AFT and
MAAG businesses in Q3 2023 and Q1 2024, re-
spectively. Products revenue decreased by 40%
compared to Q2 2023 driven in part by the contin-
ued pruning of our product portfolio, following our
de-risking strategy and the impact of divestments.
Service and Products comprised 57% and 43% of
total Cement revenue in Q2 2024, respectively,
compared to 52% and 48% in Q2 2023.
Gross profit development in Q2 2024
Gross profit decreased by 16% compared to Q2
2023 as a result of the lower revenue, partly off-
set by good execution on higher-margin orders.
However, the corresponding gross margin in-
creased by 6.1%-points to 31% in Q2 2024 com-
pared to Q2 2023, which represents the highest
gross margin achieved in several years.
EBITA development in Q2 2024
The Adjusted EBITA margin was 9.6% when ex-
cluding transformation and separation costs of
DKK 12m related to the ongoing separation of the
Mining and Cement businesses as well as our on-
going business simplification. The higher Adjusted
EBITA margin was driven by the improvement in
gross profit and a reduction in SG&A costs. EBITA
increased by 32% to DKK 96m compared to DKK
73m in Q2 2023. The corresponding EBITA margin
improved by 4.2%-points to 8.5% in Q2 2024.
Employees
The number of employees in Cement was reduced
by 966 compared to end Q2 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 di-
vestments of the AFT and MAAG businesses.
Revenue development in H1 2024
Cement revenue decreased by 28% to DKK
2,339m in H1 2024. Service and Products revenue
decreased by 22% and 35%, respectively, due to
both the divestments and the continued pruning of
our product portfolio as part of our de-risking strat-
egy. Excluding divestments and currency effects
of 7%, revenue decreased organically by 21%.
Gross profit development in H1 2024
Gross profit de creased by 20% to DKK 627m in H1
2024 driven by the lower revenue. The corre-
sponding gross margin of 26.8% was 2.6%-points
higher than in H1 2023, driven by good execution
on higher-margin orders.
EBITA development in H1 2024
EBITA increased by 9% in H1 2024 with a corre-
sponding EBITA margin of 6.6%, reflecting good
execution on higher-margin orders and lower
SG&A cost. Excluding transformation and separa-
tion costs of DKK 49m, the Adjusted EBITA margin
was 8.6%. Excluding the net gain of around DKK
30m from the sale of the MAAG business in Q1
2024, the EBITA margin was 5.3% and the Ad-
justed EBITA margin was 7.4%.
Cement financial performance
Growth in order intake and
revenue in Q2 2024 (vs. Q2 2023)
Revenue and EBITA margin
DKKm and EBITA margin
Revenue split by
Service and Products, Q2 2024
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0
500
1,000
1,500
2,000
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Products
Service
EBITA margin %
Adjusted EBITA margin
57%
(Q2 2023: 52%)
43%
(Q2 2023: 48%)
Service
Products
Order intake
Revenue
Organic
-16%
-24%
Divestments
-5%
-8%
Currency
0%
0%
Total growth
-21%
-32%
Cement
(DKKm)
Q2 2024
Q2 2023
Change (%)
H1 2024
H1 2023
Change (%)
Order intake
1,006
1,276
-21%
2,048
2,620
-22%
- Hereof service order intake
758
752
1%
1,478
1,565
-6%
- Hereof products order intake
248
524
-53%
570
1,055
-46%
Order backlog
4,231
5,658
-25%
4,231
5,658
-25%
Revenue
1,131
1,670
-32%
2,339
3,252
-28%
- Hereof service revenue
648
870
-26%
1,368
1,760
-22%
- Hereof products revenue
483
800
-40%
971
1,492
-35%
Gross profit
351
416
-16%
627
788
-20%
Gross margin
31.0%
24.9%
26.8%
24.2%
Adjusted EBITA
108
73
48%
202
141
43%
Adjusted EBITA margin
9.6%
4.3%
8.6%
4.3%
EBITA
96
73
32%
153
141
9%
EBITA margin
8.5%
4.3%
6.6%
4.3%
Number of employees
2,087
3,053
-32%
2,087
3,053
-32%
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 13
Order intake development in Q2 2024
Order intake for Non-Core Activities (NCA) of DKK
7m related to contractual obligations and orders
of parts already in stock.
Order backlog development in Q2
2024
The order backlog amounted to DKK 435m by the
end of Q2 2024 representing a decrease of DKK
44m compared to Q1 2024 and a decrease of
around DKK 0.1bn compared to Q4 2023. The de-
crease reflected execution of the order backlog as
well as continued re-scoping and contract termi-
nations. 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 Q2 2024
Revenue amounted to DKK 44m in Q2 2024. Ser-
vice and Products accounted for 55% and 45% of
total NCA revenue, respectively.
Gross profit development in Q2 2024
Gross profit was negative by DKK 35m reflecting
the general volatility and operationally loss-mak-
ing nature of the NCA segment.
EBITA development in Q2 2024
EBITA for NCA amounted to DKK -99m driven by
the negative gross profit and costs related to the
ongoing exit of the activities in the segment.
Order intake development in H1 2024
Order intake for NCA amounted to DKK 37m in H1
2024. Service and Products orders represented
11% and 89%, respectively.
Revenue development in H1 2024
NCA revenue amounted to DKK 94 m in H1 2024.
Service and Products revenue represented 32%
and 68%, respectively.
Gross profit development in H1 2024
Gross profit amounted DKK -77m in H1 2024 with a
corresponding gross margin of -81.9%.
EBITA development in H1 2024
EBITA in H1 2024 amounted to DKK -161m with a
corresponding EBITA margin of -171.3% 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 exited by end-2024.
Non-Core Activities financial performance
Non-Core Activities
(DKKm)
Q2 2024
Q2 2023
Change (%)
H1 2024
H1 2023
Change (%)
Order intake
7
32
-78%
37
143
-74%
- Hereof service order intake
4
21
-81%
4
101
-96%
- Hereof products order intake
3
11
-73%
33
42
-21%
Order backlog
435
1,414
-69%
435
1,414
-69%
Revenue
44
378
-88%
94
627
-85%
- Hereof service revenue
24
130
-82%
30
222
-86%
- Hereof products revenue
20
248
-92%
64
405
-84%
Gross profit
(35)
(26)
-35%
(77)
(66)
-17%
Gross margin
-79.5%
-6.9%
-81.9%
-10.5%
EBITA
(99)
(113)
12%
(161)
(220)
27%
EBITA margin
-225.0%
-29.9%
-171.3%
-35.1%
Number of employees
28
439
-94%
28
439
-94%
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 14
Order intake
Order intake decreased by 20% in Q2 2024 to DKK
4,436m compared to DKK 5,523m in Q2 2023. Ex-
cluding divestments in Cement and currency ef-
fects of 2%, order intake decreased organically by
18%.
Service order intake increased by 5% compared
to Q2 2023, driven by higher order intake for the
Mining business and a stable service order intake
in the Cement business. Products order intake de-
creased by 59% compared to Q2 2023 driven by
lower order intake for both the Mining and Ce-
ment businesses.
Service and Products represented 80% and 20%
of total order intake, respectively, compared to
61% and 39% in Q2 2023.
Order backlog and maturity
The order backlog decreased by 6% to DKK
16,518m compared to the prior quarter (Q1 2024:
DKK 17,482m) as the order intake in Q2 2024 was
more than offset by the de-risking strategy, con-
tinued wind-down of the NCA segment and the
ongoing execution of the order backlog.
Outstanding order backlog related to Russian and
Belarusian contracts was unchanged and
amounted to DKK 0.1bn at the end of Q2 2024.
The remaining orders are suspended by FLS-
midth, and potential termination options are being
investigated. Due to the uncertain nature of these
contracts, they have been included in the backlog
maturity for ‘Within 3 years and beyond’.
Backlog
maturity
Mining
Cement
Non-Core
Activities
FLSmidth
Group
2024
33%
25%
36%
31%
2025
54%
51%
0%
52%
2026 and
beyond
13%
24%
64%
17%
At the end of Q2 2024, outstanding backlog for the NCA segment
amounted to DKK 435m. 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 23% to DKK 4,958 in Q2
2024, compared to Q2 2023, driven by lower rev-
enue in both the Mining and Cement businesses.
Excluding the effect of 3% from divestments in Ce-
ment and currency, revenue decreased organi-
cally by 20% compared to Q2 2023.
The decrease in Service revenue by 16% com-
pared to Q2 2023 was driven by both the Mining
and Cement businesses. For Mining, the decrease
was due to timing of order execution. For Cement,
the development reflects the divestments.
Products revenue decreased by 33% compared to
Q2 2023. For Mining, the decrease was driven by
our de-risking strategy and timing of the execu-
tion of certain larger Products orders. For Cement,
the decrease was driven by our de-risking strat-
egy and divestments.
Service and Products revenue accounted for 65%
and 35% of total revenue in Q2 2024, respec-
tively, compared to 60% and 40%, respectively, in
Q2 2023.
Consolidated financial performance Q2 2024
Order intake split by
Service and Products Q2 2024
DKK m
(1,000)
1,000
3,000
5,000
7,000
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Service order intake Products order intake
Growth in order intake in Q2 2024
(vs. Q2 2023)
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-17%
-16%
-80%
-18%
Divestments
0%
-5%
0%
-1%
Currency
-2%
0%
2%
-1%
Total
growth
-19%
-21%
-78%
-20%
Growth in revenue in Q2 2024
(vs. Q2 2023)
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-12%
-24%
-88%
-20%
Divestments
0%
-8%
0%
-2%
Currency
-1%
0%
0%
-1%
Total
growth
-13%
-32%
-88%
-23%
Group
(DKKm)
Q2 2024
Q2 2023
Change (%)
H1 2024
H1 2023
Change (%)
Order intake
4,436
5,523
-20%
9,684
11,155
-13%
- Hereof service order intake
3,556
3,388
5%
7,060
7,183
-2%
- Hereof products order intake
880
2,135
-59%
2,624
3,972
-34%
Order backlog
16,518
20,544
-20%
16,518
20,544
-20%
Revenue
4,958
6,399
-23%
9,797
12,415
-21%
- Hereof service revenue
3,229
3,833
-16%
6,359
7,515
-15%
- Hereof products revenue
1,729
2,566
-33%
3,438
4,900
-30%
Gross profit
1,579
1,497
5%
2,993
2,894
3%
Gross margin
31.8%
23.4%
30.6%
23.3%
*SG&A cost
(1,078)
(1,095)
-2%
(2,086)
(2,195)
-5%
SG&A ratio
21.7%
17.1%
21.3%
17.7%
Adjusted EBITA
506
429
18%
949
791
20%
Adjusted EBITA margin
10.2%
6.7%
9.7%
6.4%
EBITA
431
332
30%
796
567
40%
EBITA margin
8.7%
5.2%
8.1%
4.6%
Number of employees
8,225
10,234
-20%
8,225
10,234
-20%
*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 H1 2024 15
Profit in Q2 2024
Gross profit and margin
Gross profit increased by 5% to DKK 1,579m in Q2
2024, compared to DKK 1,497m in Q2 2023. The
corresponding gross margin increased to 31.8% in
Q2 2024 compared to 23.4% in Q2 2023. The
gross margin reflects good execution of higher-
margin orders following our de-risking strategy
partly offset by lower revenue in the quarter. Fur-
ther, the level represents the highest gross margin
achieved in several years which applies to both
the Mining and Cement segments.
Research & development costs
In Q2 2024, total research and development
costs (R&D) amounted to DKK 69m, representing
1.4% of revenue (Q2 2023: 1.5%).
(DKKm)
Q2 2024
Q2 2023
Expensed
26
37
Capitalised
43
59
Total R&D
69
96
SG&A costs
Sales, general and administrative costs (SG&A)
decreased by 2% to DKK 1,078m compared to Q2
2023, reflecting positive effects from our ongoing
transformation efforts and the realised synergies
from the acquisition of Mining Technologies partly
offset by transformation and separation costs.
Further, currencies had a favourable impact on
SG&A of DKK 9m in the quarter.
SG&A costs as a percentage of revenue in-
creased to 21.7% in Q2 2024 compared to 17.1% in
Q2 2023 due to the lower revenue.
EBITA and margin
Excluding transformation and separation costs of
DKK 75m, the Adjusted Group EBITA margin was
10.2% in Q2 2024 compared to 6.7% in Q2 2023.
Including these costs, the EBITA margin was 8.7%
in Q2 2024 compared to 5.2% in Q2 2023.
Amortisation of intangible assets
Amortisation of intangible assets amounted to
DKK 59m (Q2 2023: DKK 65m). The effect of pur-
chase price allocations amounted to DKK 11m (Q2
2023: DKK 11m) and other amortisation to DKK
48m (Q2 2023: DKK 54m).
Financial items
Net financial items amounted to DKK -80m (Q2
2023: DKK -73m), of which net interest amounted
to DKK -39m (Q2 2023: DKK -20m) and foreign
exchange and fair value adjustments amounted
to DKK -2m (Q2 2023: DKK -53m). Financial items
also included a loss from associates of DKK -39m
(Q2 2023: DKK -12m) due to an impairment loss
on the investment following a downward revision
of expected future performance.
Tax
Tax in Q2 2024 totalled DKK -105m (Q2 2023:
-71m), corresponding to an effective tax rate of
36.0% (Q2 2023: 36.6%). This includes impact
from withholding tax in both periods.
Profit for the period
Profit in Q2 2024 was DKK 187m (Q2 2023: DKK
118m) driven by the improved profitability partly
offset by an impairment loss of associates.
Return on capital employed
Return on capital employed (ROCE) increased to
8.3% (Q2 2023: 5.0%) due to higher earnings and
a decrease in net working capital compared to
Q2 2023.
Employees
The number of employees decreased by 544 to
8,225 at the end of Q2 2024, compared to 8,769
at the end of Q1 2024. The decrease was driven
by workforce reductions across all business seg-
ments 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
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
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
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Revenue
EBITA margin %
Adj. EBITA margin %
(400)
(200)
0
200
400
600
800
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Mining Mining adj. Cement Cement adj. NCA
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 16
Capital in Q2 2024
Cash flow from operating activities
Cash flow from operating activities (CFFO)
amounted to DKK 14m in Q2 2024 (Q2 2023: DKK
372m). The CFFO was negatively impacted by
DKK 86m from an increase in net working capital
and by DKK 190m from changes in provisions. In
Q2 2023, the CFFO was positively impacted by
changes in net working capital and provisions.
Cash flow from investing activities
Cash flow from investing activities amounted to
DKK -103m (Q2 2023: DKK -154m) and was posi-
tively impacted by DKK 60m from the sale of
property, plant and equipment.
Cash flow from financing activities
Cash flow from financing activities amounted to
DKK 42m (Q2 2023: DKK -180m) as paid dividend
of DKK 227m was funded by interest-bearing
debt.
Free cash flow
Free cash flow (the sum of cash flow from operat-
ing and investing activities) amounted to DKK
-89m in the quarter (Q2 2023: DKK 218m). Free
cash flow adjusted for business acquisitions and
disposals amounted to DKK -89m in Q2 2024 (Q2
2023: DKK 260m).
Net working capital
Net working capital increased by DKK 86m to
DKK 2,021m at the end of Q2 2024 (end of Q1
2024: DKK 1,935m). The increase is primarily
driven by the increase in amounts due from cus-
tomers for work performed (i.e., net of trade re-
ceivables, work-in-progress and prepayments for
customers).
The corresponding net working capital ratio in-
creased from 8.4% of revenue in Q1 2024 to 9.4%
in Q2 2024 in line with expectations.
Utilisation of supply chain financing increased to
DKK 504m in Q2 2024 (Q1 2024: 456m).
Net interest-bearing debt
Net interest-bearing debt (NIBD) at 30 June 2024
increased to DKK 1,227m (Q1 2024: DKK 830m).
The financial gearing end of Q2 2024 amounted
to 0.7x (Q1 2024: 0.5x) and remains comfortably
below our target level of less than 2.0x.
Financial position
By the end of Q2 2024, FLSmidth had DKK 6.3bn
of available committed credit facilities of which
DKK 3.9bn remained undrawn. The committed
credit facilities have a weighted average time to
maturity of 3.8 years.
Credit facilities of DKK 5.0bn and DKK 1.1bn will
mature in 2027 and 2030, respectively. The re-
maining DKK 0.2bn mature in later years. Addi-
tionally, FLSmidth has DKK 0.8bn of uncommitted
credit facilities available.
Equity ratio
Equity at the end of Q2 2024 increased to DKK
11,112m (end of Q1 2024: DKK 11,085m), driven pri-
marily by currency adjustments, profit for the pe-
riod and dividend paid out of DKK 227m. The eq-
uity ratio was 39.6% at the end of Q2 2024 (end
of Q1 2024: 41.2%).
Treasury shares
The holding of treasury shares as of 30 June
2024 has increased from Q1 2024 and amounts
to 813,219 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. The increase reflects pur-
chase of shares for hedging the incentive pro-
grammes.
Cash flow
DKKm
Net interest-bearing debt
DKKm
Net working capital
DKKm NWC%
(500)
0
500
1,000
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Cash flow from operating activities
(1,000)
0
1,000
2,000
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Net interest-bearing debt (NIBD)
0%
2%
4%
6%
8%
10%
12%
0
500
1,000
1,500
2,000
2,500
3,000
Q2
2022
Q3 Q4 Q1
2023
Q2 Q3 Q4 Q1
2024
Q2
Net working capital
Net working capital ratio, end
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 17
Order intake
Order intake decreased by 13% to DKK 9,684m
and by 11% excluding divestments and currency
effects. Services order intake decreased by 2%
driven by Cement. Products order intake de-
creased by 34%, driven by both Mining and Ce-
ment.
Mining Service orders increased by 1% in H1 2024
reflecting stable and healthy market conditions
for mining service activities. Mining Products or-
ders decreased by 30% as customers continue to
hesitate larger capital investments combined with
an ongoing environment of permitting delays as
well as our de-risking approach. H1 2023 included
three large Mining Products orders with a com-
bined value of around DKK 1.1bn compared to two
large Mining Products orders announced in H1
2024 with a combined value of around DKK
680m. Excluding currency effects, Mining order in-
take decreased 7% in H1 2024 compared to H1
2023.
Cement order intake decreased by 22% primarily
due to a 46% decrease in Products order intake
compared to H1 2023 driven by the continued
pruning of our product portfolio, exit from larger
projects and divestments. Cement Service order
intake decreased 6% compared to H1 2023 driven
by the AFT and MAAG divestments.
Order backlog
The order backlog decreased by 20% to DKK
16,518m by end of Q2 2024. The lower backlog is
related to both Mining and Cement, which de-
creased by 12% and 25%, respectively.
Revenue
Revenue decreased by 21% to DKK 9,797m in H1
2024 comprising a 14% decrease in Mining and a
28% decrease in Cement. Excluding divestments
and currency effects revenue decreased by 18%
compared to H1 2023. In line with expectations,
H1 2024 included DKK 94m in revenue from Non-
Core Activities.
Mining revenue comprised a decrease of 10% in
Service revenue and a 20% in Products revenue
due to our de-risking strategy and timing of the
execution of certain orders. In the first half year of
2024, Cement showed a decrease of 22% and
35% in Service and Products revenue, respec-
tively due to the divestments and continued prun-
ing of the product portfolio following our de-risk-
ing strategy.
Profit in H1 2024
Gross profit and margin
Gross profit in the first half year of 2024 in-
creased by 3% to DKK 2,993m. The correspond-
ing gross margin increased by 7.3%-points to
30.6%. 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 Ac-
tivities segment.
Research and Development costs were DKK 140m
(H1 2023: 178m), of which DKK 69m were capital-
ised (H1 2023: 89m).
EBITA and margin
Adjusted EBITA of DKK 949m exclude transfor-
mation and separation costs of DKK 153m. The
corresponding adjusted Group EBITA margin was
9.7% in H1 2024. Including transformation and
separation cost, EBITA was DKK 796m with an
EBITA margin of 8.1% in H1 2024 compared to
4.6% in H1 2023.
Excluding the net gain of around DKK 30m from
the sale of the MAAG business, the EBITA margin
was 7.8% and the Adjusted EBITA margin was
9.4%.
Financial items
Net financial items amounted to DKK -82m (H1
2023: DKK -89m), of which foreign exchange and
fair value adjustments amounted to DKK 30m (H1
2023: DKK -52m). Net interest amounted to DKK
-72m (H1 2023: DKK -37m). Financial items also in-
clude a loss from associates of -40m (H1 2023:
DKK -12m) due to an impairment loss on the in-
vestment following a downward revision of ex-
pected future performance.
Tax
Tax for H1 2024 totalled DKK -214m (H1 2023:
DKK -129m), corresponding to an effective tax rate
of 36.0% (H1 2023: 36.3%).
Profit for the period
Profit for the period was a gain of DKK 381m com-
pared to a DKK 202m gain in the first half year of
2023.
Earnings per share
Earnings per share (diluted) increased to DKK 6.5
from DKK 3.6 in the first half year of 2023.
Consolidated financial performance H1 2024
Growth in order intake in H1 2024
(vs. H1 2023)
Growth in revenue in H1 2024 (vs.
H1 2023)
EBITA split by segment
DKKm
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-12%
-21%
-85%
-18%
Divestments
0%
-7%
0%
-1%
Currency
-2%
0%
0%
-2%
Total
growth
-14%
-28%
-85%
-21%
Mining
Cement
Non-Core
Activities
FLSmidth
Group
Organic
-7%
-18%
-73%
-11%
Divestments
0%
-4%
0%
0%
Currency
-2%
0%
-1%
-2%
Total
growth
-9%
-22%
-74%
-13%
(200)
300
800
1,300
H1 2023 H1 2024
Mining Mining adj. Cement Cement adj. NCA
Management review Consolidated Condensed Interim Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 18
Capital in H1 2024
Net working capital
Net working capital increased in H1 2024 to DKK
2,021m (end of 2023: DKK 1,382m). The corre-
sponding net working capital ratio was 9.4% 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 prepayments as the increased
cash collection from customers in Q1 2024 was
offset by increases in Q2 2024 in amounts due
from customers for work performed.
Cash flow from operating activities
Cash flow from operating activities decreased to
DKK -338m (H1 2023: DKK -32m). CFFO was neg-
atively impacted by DKK 736m from the increase
in working capital and by DKK 70m from changes
in provisions. In H1 2023, changes in provisions
impacted CFFO positively.
Cash flow from investing activities
Cash flow used for investments was DKK -57m
compared to DKK -178m in the first half year of
2023.
Cash flow from financing activities
Cash flow from financing activities amounted to
DKK 555m as the negative cash flow from opera-
tions of DKK 338m and paid dividend of DKK
227m was funded by interest-bearing debt.
Free cash flow
Free cash flow (the sum of cash flow from operat-
ing and investing activities) amounted to DKK
-395m (H1 2023: DKK -210m). Free cash adjusted
for business acquisitions and disposals amounted
to DKK -543m in H1 2024 (H1 2023: DKK -168m).
Balance sheet
Total assets increased to DKK 28,086m by 30
June 2024 (end of 2023: DKK 27,011), primarily re-
lated to increased net working capital assets and
cash.
Net interest-bearing debt
Net interest-bearing debt (NIBD) by 30 June 2024
increased to DKK 1,227m (end of 2023: DKK
639m). The increase in debt was primarily due to
the increase in working capital in the first half of
2024. The Group’s financial gearing in H1 2024
increased to 0.7x (end of 2023: 0.4x) following the
increase in NIBD.
Equity
Equity at end H1 2024 increased to DKK 11,112m
(end of 2023: DKK 10,828m). The increase was
driven by currency adjustments, profit for the pe-
riod and dividend paid out amounting to DKK
227m.
Treasury shares
The holding of treasury shares as of 30 June
2024 has decreased from year end 2023 and
amounts to 813,219 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
(200)
(100)
0
100
H1 2023 H1 2024
Cash flow from operating activities
(200)
(100)
0
100
H1 2023 H1 2024
Cash flow from investing activities
(600)
(500)
(400)
(300)
(200)
(100)
0
100
H1 2023 H1 2024
Free cash flow
Free cash flow adjusted for net business acquisitons
M an agem en t r evi ew C o nsol id a te d C o n d e nse d In te ri m Fin a nc ia l St a te me nts N o te s St a te me n ts
FL S m i dt h
■
In te ri m Re p o rt H 1 20 24 19
Consolidated
Condensed Interim
Financial statements
Income statement 20
Statement of comprehensive income 20
Cash flow statement 21
Balance sheet 22
Equity statement 23
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 20
Income statement
Statement of comprehensive income
Notes
DKKm
Q2
2024
Q2
2023
H1
2024
H1
2023
3, 4
Revenue
4,958
6,399
9,797
12,415
Production costs
(3,379)
(4,902)
(6,804)
(9,521)
Gross profit
1,579
1,497
2,993
2,894
Sales costs
(446)
(425)
(862)
(858)
Administrative costs
(632)
(670)
(1,224)
(1,337)
10
Other operating net income
0
13
36
38
EBITDA
501
415
943
737
Depreciation and impairment of property,
plant and equipment and lease assets
(70)
(83)
(147)
(170)
EBITA
431
332
796
567
Amortisation and impairment
of intangible assets
(59)
(65)
(119)
(123)
EBIT
372
267
677
444
Financial income
183
367
407
791
Financial costs
(263)
(440)
(489)
(880)
EBT
292
194
595
355
Tax for the period
(105)
(71)
(214)
(129)
Profit for the period, continuing activities
187
123
381
226
3, 7
Profit (loss) for the period, discontinued activities
0
(5)
0
(24)
Profit for the period
187
118
381
202
Attributable to:
Shareholders in FLSmidth & Co. A/S
181
117
375
203
Minority interests
6
1
6
(1)
187
118
381
202
Earnings per share (EPS):
Continuing and discontinued activities per share (DKK)
3.2
2.0
6.6
3.6
Continuing and discontinued activities per share, diluted
(DKK)
3.2
2.0
6.5
3.6
Continuing activities per share (DKK)
3.2
2.1
6.6
4.0
Continuing activities per share, diluted (DKK)
3.2
2.1
6.5
4.0
Notes
DKKm
Q2
2024
Q2
2023
H1
2024
H1
2023
Profit for the period
187
118
381
202
Items that will not be reclassified to profit or loss:
Actuarial gains on defined benefit plans
0
4
5
9
Items that are or may be reclassified
subsequently to profit or loss:
Currency adjustments regarding translation of entities
83
(25)
148
(152)
Reclassification of currency adjustments on disposal
(18)
0
(18)
0
Cash flow hedging:
- Value adjustments for the period
(10)
1
(15)
29
- Value adjustments transferred to work in progress
(1)
4
2
9
Tax of total other comprehensive income
2
(2)
1
(13)
Other comprehensive income for the period after tax
56
(18)
123
(118)
Comprehensive income for the period
243
100
504
84
Attributable to:
Shareholders in FLSmidth & Co. A/S
239
96
499
80
Minority interests
4
4
5
4
243
100
504
84
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 21
Cash flow statement
Notes
DKKm
Q2
2024
Q2
2023
H1
2024
H1
2023
EBITDA
501
415
943
737
Adjustment for gain on sale of property, plant and
equipment and other non-cash items
23
19
6
8
Change in provisions, pension and employee benefits
(190)
174
(70)
347
8
Change in net working capital
(86)
62
(736)
(632)
Cash flow from operating activities before financial items
and tax
248
666
143
447
Financial items received and paid
(38)
(20)
(72)
(38)
Taxes paid
(196)
(274)
(409)
(441)
Cash flow from operating activities
14
372
(338)
(32)
9
Acquisition of enterprises and activities
0
(42)
(93)
(42)
Acquisition of intangible assets
(83)
(77)
(124)
(120)
Acquisition of property, plant and equipment
(80)
(34)
(138)
(58)
Acquisition of financial assets
0
(2)
(3)
(2)
10
Disposal of enterprises and activities
0
0
241
0
Disposal of property, plant and equipment
60
1
60
34
Disposal of financial assets
0
0
0
1
Dividend from associates
0
0
0
9
Cash flow from investing activities
(103)
(154)
(57)
(178)
Dividend paid
(227)
(170)
(227)
(170)
Buyout of minority interests
0
(13)
0
(13)
Acquisition of treasury shares
(19)
0
(19)
0
Repayment of lease liabilities
(21)
(38)
(49)
(67)
Change in interest bearing debt
309
41
850
151
Cash flow from financing activities
42
(180)
555
(99)
Change in cash and cash equivalents
(47)
38
160
(309)
Cash and cash equivalents at beginning of period
1,560
1,757
1,352
2,130
Foreign exchange adjustment, cash and cash equivalents
(1)
(41)
0
(67)
Cash and cash equivalents at 30 June
1,512
1,754
1,512
1,754
The cash flow statement cannot be inferred from the published financial information only.
Free cash flow
DKKm
Q2
2024
Q2
2023
H1
2024
H1
2023
Free cash flow
(89)
218
(395)
(210)
Free cash flow, adjusted for acquisitions and disposals of
enterprises and activities
(89)
260
(543)
(168)
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 22
Balance sheet
Notes
DKKm
30/06 2024
31/12 2023
30/06 2023
Assets
Goodwill
6,560
6,448
6,356
Patents and rights
653
688
731
Customer relations
311
331
359
Other intangible assets
116
143
131
Completed development projects
137
174
174
Intangible assets under development
776
653
527
Intangible assets
8,553
8,437
8,278
Land and buildings
1,640
1,777
1,908
Plant and machinery
342
391
461
Operating equipment, fixtures and fittings
98
117
120
Tangible assets in course of construction
210
104
67
Property, plant and equipment
2,290
2,389
2,556
Deferred tax assets
2,206
2,314
1,941
5
Investments in associates
41
81
130
Other securities and investments
56
56
56
Other non-current assets
2,303
2,451
2,127
Non-current assets
13,146
13,277
12,961
Inventories
3,544
3,450
3,978
Trade receivables
4,658
4,516
4,821
Work in progress
3,018
2,769
3,279
Prepayments
516
423
717
Income tax receivables
602
229
526
Other receivables
1,090
995
1,181
Cash and cash equivalents
1,512
1,352
1,754
Current assets
14,940
13,734
16,256
Total assets
28,086
27,011
29,217
Notes
DKKm
30/06 2024
31/12 2023
30/06 2023
Equity and liabilities
Share capital
1,153
1,153
1,153
Foreign exchange adjustments
(748)
(879)
(674)
Cash flow hedging
(45)
(32)
(32)
11
Retained earnings
10,776
10,615
10,290
Shareholders in FLSmidth & Co. A/S
11,136
10,857
10,737
Minority interests
(24)
(29)
(22)
Equity
11,112
10,828
10,715
Deferred tax liabilities
210
207
236
Pension obligations
337
363
404
5
Provisions
675
660
856
Lease liabilities
87
132
187
Bank loans and mortgage debt
2,350
1,633
2,646
Prepayments from customers
190
338
532
Income tax liabilities
110
110
103
Other liabilities
41
53
90
Non-current liabilities
4,000
3,496
5,054
Pension obligations
2
2
2
5
Provisions
1,574
1,635
1,967
Lease liabilities
83
101
101
Bank loans and mortgage debt
144
54
46
Prepayments from customers
1,994
1,595
1,713
Work in progress
3,417
3,025
3,505
Trade payables
3,523
4,024
4,166
Income tax payables
359
277
336
Other liabilities
1,878
1,974
1,612
Current liabilities
12,974
12,687
13,448
Total liabilities
16,974
16,183
18,502
Total equity and liabilities
28,086
27,011
29,217
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 23
Equity statement
H1 2024
H1 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
1,153
(879)
(32)
10,615
10,857
(29)
10,828
1,153
(517)
(70)
10,247
10,813
(26)
10,787
Comprehensive income for the period
Profit/loss for the period
375
375
6
381
203
203
(1)
202
Other comprehensive income
Actuarial gains/(losses) on
defined benefit plans
5
5
5
9
9
9
Currency adjustments regarding
translation of entities
149
149
(1)
148
(157)
(157)
5
(152)
Reclassification of currency adjustments on disposal
(18)
(18)
(18)
0
0
Cash flow hedging:
- Value adjustments for the period
(15)
(15)
(15)
29
29
29
- Value adjustments transferred to work in progress
2
2
2
9
9
9
Tax on other comprehensive income
1
1
1
(13)
(13)
(13)
Other comprehensive income total
0
131
(13)
6
124
(1)
123
0
(157)
38
(4)
(123)
5
(118)
Comprehensive income for the period
0
131
(13)
381
499
5
504
0
(157)
38
199
80
4
84
Transactions with owners:
Dividend paid
(227)
(227)
(227)
(170)
(170)
(170)
Share-based payment
26
26
26
27
27
27
Buyout of minority interests
0
0
(13)
(13)
(13)
Acquisition of treasury shares
(19)
(19)
(19)
Equity at 30 June
1,153
(748)
(45)
10,776
11,136
(24)
11,112
1,153
(674)
(32)
10,290
10,737
(22)
10,715
Ma na g e me nt re v ie w C o n s o l i da t ed C o n den s ed Fi n an ci al S t at e m en t s No te s S ta te me nts
FL S m i dt h
■
In te ri m Re p o rt H 1 20 24 24
Notes
1. Key accounting estimates and judgements 25
2. Income statement by function 25
3. Segment information 26
4. Revenue 27
5. Financial costs 28
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
12. Events after the balance sheet date 30
13. Accounting policies 30
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 25
1. Key accounting estimates
and judgements
When preparing the consolidated condensed in-
terim financial statements, we are required to
make several estimates and judgements. The esti-
mates and judgements that can have a significant
impact on the consolidated condensed interim fi-
nancial statements are categorised as key ac-
counting estimates and judgements. Key account-
ing 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 re-
port 2023, however, with no significant business
acquisition made during the period. Therefore, key
accounting judgements are made in relation to the
accounting of revenue when determining the
recognition method, while key accounting esti-
mates relate to the estimation of warranty provi-
sions and the valuation of inventories, trade re-
ceivables, 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 de-
preciation, amortisation and impairment. Depreci-
ation, amortisation, and impairment are therefore
separated from the individual functions and pre-
sented in separate lines.
The income statement prepared on the basis of
cost by function is shown below:
Income Statement by function
DKKm
Q2
2024
Q2
2023
H1
2024
H1
2023
Revenue
4,958
6,399
9,797
12,415
Production costs
(3,447)
(4,976)
(6,944)
(9,665)
Gross profit
1,511
1,423
2,853
2,750
Sales costs, including depreciation and amortisation
(452)
(433)
(873)
(871)
Administrative costs, including depreciation and amortisation
(687)
(736)
(1,339)
(1,473)
Other operating net income
0
13
36
38
EBIT
372
267
677
444
Depreciation, amortisation
and impairment consist of:
Depreciation and impairment of property, plant and equipment and
lease assets
(70)
(83)
(147)
(170)
Amortisation and impairment of intangible assets
(59)
(65)
(119)
(123)
(129)
(148)
(266)
(293)
Depreciation, amortisation
and impairment are divided into:
Production costs
(68)
(74)
(140)
(144)
Sales costs
(6)
(8)
(11)
(13)
Administrative costs
(55)
(66)
(115)
(136)
(129)
(148)
(266)
(293)
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 26
3. Segment information
H1 2024
H1 2023
FLSmidth Group
DKKm
Mining
Cement
Non-Core
Activities
Total
Mining
Cement
Non-Core
Activities
Continuing
activities
Discontinue
d activities¹
Revenue
7,364
2,339
94
9,797
8,536
3,252
627
12,415
0
Production costs
(4,921)
(1,712)
(171)
(6,804)
(6,364)
(2,464)
(693)
(9,521)
(8)
Gross profit
2,443
627
(77)
2,993
2,172
788
(66)
2,894
(8)
SG&A cost
(1,540)
(485)
(61)
(2,086)
(1,427)
(628)
(140)
(2,195)
(5)
Other operating net income
22
31
(17)
36
18
25
(5)
38
0
EBITDA
925
173
(155)
943
763
185
(211)
737
(13)
Depreciation and impairment of property, plant and equipment
and lease assets
(121)
(20)
(6)
(147)
(117)
(44)
(9)
(170)
0
EBITA
804
153
(161)
796
646
141
(220)
567
(13)
Amortisation and impairment of intangible assets
(105)
(14)
0
(119)
(85)
(37)
(1)
(123)
0
EBIT
699
139
(161)
677
561
104
(221)
444
(13)
Order intake
7,599
2,048
37
9,684
8,392
2,620
143
11,155
0
Order backlog
11,852
4,231
435
16,518
13,472
5,658
1,414
20,544
0
Gross margin
33.2%
26.8%
-81.9%
30.6%
25.4%
24.2%
-10.5%
23.3%
EBITDA margin
12.6%
7.4%
-164.9%
9.6%
8.9%
5.7%
-33.7%
5.9%
EBITA margin
10.9%
6.6%
-171.3%
8.1%
7.6%
4.3%
-35.1%
4.6%
EBIT margin
9.5%
6.0%
-171.3%
6.9%
6.6%
3.2%
-35.2%
3.6%
Number of employees at 30 June
6,110
2,087
28
8,225
6,742
3,053
439
10,234
0
Reconciliation of profit before tax for the period
EBIT
677
444
(13)
Financial income
407
791
2
Financial costs
(489)
(880)
(13)
EBT
595
355
(24)
1) From 1 January 2024, the remaining responsibilities to finalise legacy projects related to the non-mining bulk material handling sold in 2019 is included in Non-Core Activities. In 2023, it was presented as discontinued activities.
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 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 seg-
ments split into the main businesses Products and
Services. Revenue within the NCA segment re-
flects execution of the backlog and sale of parts
already in stock.
In the graphs on the right, revenue is split by re-
gions in which delivery takes place.
Revenue is recognised either at a point in time
where the control over the goods and/or services
is transferred to the customer or over time to re-
flect the percentage of completion of the perfor-
mance obligations in the contracts. Percentage of
completion covers a wide range of different types
of contracts, from contracts where the customer
consumes the services over time, such as fixed
price service contracts, to more complex product
bundles with engineering subject to the enhanced
risk governance structure under the Risk Manage-
ment Board and to risk quotas. More information
on when and how the two recognition principles
are applied can be found in note 1.4 in the Annual
report 2023.
Backlog
The order backlog at 30 June 2024 amounted to
DKK 16,518m (end of H1 2023: DKK 20,544m).
The backlog represents the value of outstanding
performance obligations on current contracts. The
value of outstanding performance obligations on
current contracts is a combination of value from
contracts where we will transfer control at a future
point in time and the value of the remaining per-
formance obligations on contracts where we
transfer control over time.
Revenue split by Regions H1 2024
%
Revenue split by Regions H1 2023
%
Backlog
DKKm
27%
26%
14%
14%
19%
NAMER
SAMER
ECANA
SSAMESA
APAC
24%
26%
19%
13%
18%
NAMER
SAMER
ECANA
SSAMESA
APAC
2,290
2,808
11,964
8,589
6,290
5,121
0
5,000
10,000
15,000
20,000
25,000
H1 2023 H1 2024
2026 and beyond 2025 2024
Revenue split on timing of revenue recognition principle
H1 2024
H1 2023
DKKm
Mining
Cement
Non-Core
Activities
Group
Mining
Cement
Non-Core
Activities
Group
Point in time*
4,306
1,119
30
5,455
4,995
1,423
260
6,678
Percentage of completion
- Service, single machines and product bundles*
2,455
1,094
3,549
3,040
1,635
0
4,675
- Product bundles with engineering under enhanced risk
governance
603
126
64
793
501
194
367
1,062
Total revenue
7,364
2,339
94
9,797
8,536
3,252
627
12,415
* Mining revenue in Q1 2024 of DKK 0.4bn is reclassified from Point in time to Percentage of completion (Service, single machines and product bundles).
Revenue split on segment and category
H1 2024
H1 2023
DKKm
Mining
Cement
Non-Core
Activities
Group
Mining
Cement
Non-Core
Activities
Group
Products business
2,403
971
64
3,438
3,003
1,492
405
4,900
Service business
4,961
1,368
30
6,359
5,533
1,760
222
7,515
Total revenue
7,364
2,339
94
9,797
8,536
3,252
627
12,415
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 28
5. Financial costs
Financial costs include an impairment loss of DKK
39m on the investment in the associate Intertek
Robotics Laboratories Pty Ltd, Australia following
a downward revision of expected future perfor-
mance.
6. Provisions
Provisions decreased by DKK 46m compared to 31
December 2023. The decrease reflects primarily
the use of restructuring provisions following exe-
cution on the transformation strategy that was
partly offset by increase in other provisions.
For a description of the main provision categories
see note 2.7 in the 2023 Annual Report.
7. Contractual Commitments
and contingent liabilities
Contingent liabilities at Q2 2024 amounted to
DKK 2,550m (31 December 2023: DKK 2,638m).
Contingent liabilities primarily relate to customary
performance and payment guarantees. The vol-
ume of such guarantees amounted to DKK
2,266m (31 December 2023: DKK 2,272m). It is
customary market practice to issue guarantees to
customers, which serve as a security that we will
deliver as promised in terms of performance, qual-
ity, and timing. The volume of the guarantees var-
ies with the activity level and reflects the out-
standing backlog, finalised projects and deliveries
that are covered by warranties etc. Only a minor
share of such guarantees is expected to material-
ise into losses. In the event a guarantee is
expected to materialise, a provision is recognised
to cover the risk. Information on provisions is in-
cluded in note 6.
Other contingent liabilities of DKK 284m (31 De-
cember 2023 DKK 366m) relate to our involve-
ment in legal disputes, which are already pending
with courts or other authorities and other disputes
which may or may not lead to formal legal pro-
ceedings being initiated against us.
In 2021, a customer initiated arbitration against
FLSmidth and certain partners for alleged contrac-
tual breaches (‘the Tunisia contract’). In Q2 2024,
the case was settled.
No significant changes have occurred to the na-
ture and extent of our contractual commitments
and contingent liabilities compared to what was
disclosed in note 2.9 in the 2023 Annual Report.
8. Discontinued activities
Discontinued activities related to the remaining re-
sponsibilities to finalise legacy projects, handling
of claims, etc. retained on the sale of the non-min-
ing bulk material handling business in 2019. In 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 un-
substantiated cash withdrawal on a performance
bond in 2021.
From 1 January 2024, the activities are included
within the Non-Core Activities segment for full
wind-down. This includes the remaining net asset
of DKK 67m consisting of net working capital of
DKK 132m and provisions of DKK 65m. We do not
expect any material future financial impact from
the full wind-down of the activities.
Provisions
DKKm
30/06 2024
31/12 2023
30/06 2023
Provisions at 1 January
2,295
2,507
2,507
Foreign exchange adjustments
10
(19)
(22)
Acquisition and disposal of Group enterprises
(12)
14
2
Additions
645
1,598
874
Used
(493)
(1,399)
(400)
Reversals
(196)
(406)
(138)
Provisions
2,249
2,295
2,823
The split of provisions is as follows:
Warranties
872
883
1,009
Restructuring
123
360
516
Other provisions
1,254
1,052
1,298
2,249
2,295
2,823
The maturity of provisions is specified as follows:
Current liabilities
1,574
1,635
1,967
Non-current liabilities
675
660
856
2,249
2,295
2,823
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 29
9. Net working capital
Net working capital at 30 June 2024 has in-
creased by DKK 0.6bn compared to 31 December
2023. The increase is primarily driven by pay-
ments to suppliers leading to a reduction in trade
payables and increase in prepayments.
Utilisation of supply chain financing is at the same
level as December 2023 and amounting to DKK
504m in H1 2024 (31 December 2023: 504m).
10. Business Acquisitions
On 4 March 2024, FLSmidth acquired the Cana-
dian mill engineering, supply and services pro-
vider, Farnell-Thompson Applied Technologies
Inc. Its offerings is integrated into FLSmidth’s core
Mining business. The acquisition is aligned with
our Mining CORE’26 strategy, which includes tar-
geting service growth through strategic invest-
ments and prioritisation.
Farnell-Thompson is a global supplier of engi-
neering services, parts and mills to the mining in-
dustry. Prior to the acquisition Farnell-Thompson
has been a consulting partner providing these ser-
vices to FLSmidth for many years. Consequently,
a seamless integration of the new business and
staff is anticipated.
The purchase price net of cash acquired is DKK
102m with DKK 9m falling due over the next three
years. The acquisition increased working capital
assets and liabilities by DKK 23m and DKK 18m.
The excess of the purchase price over the net as-
sets is recognised as goodwill of DKK 96m in the
preliminary allocation of the purchase price.
Goodwill represents primarily the value of the as-
sembled workforce. The initial accounting will be
retrospectively adjusted to reflect new information
obtained in subsequent periods within a maximum
period of 12 months after the acquisition date.
The impact on net profit is insignificant.
11. 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 and presented under
Other operating net income.
In Q3 2023, the transaction on the sale of material
handling technology to KOCH Solutions was com-
pleted. The final purchase price adjustments are
currently being determined. It is now 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 under Other oper-
ating net income.
Net working capital
DKKm
30/06 2024
31/12 2023
30/06 2023
Inventories
3,544
3,450
3,978
Trade receivables
4,658
4,516
4,821
Work in progress, assets
3,018
2,769
3,279
Prepayments
516
423
717
Other receivables
965
855
1,077
Derivative financial instruments
63
37
44
Prepayments from customers
(2,184)
(1,933)
(2,245)
Trade payables
(3,523)
(4,024)
(4,166)
Work in progress, liability
(3,417)
(3,025)
(3,505)
Other liabilities
(1,569)
(1,637)
(1,417)
Derivative financial instruments
(50)
(49)
(41)
Net working capital
2,021
1,382
2,542
Change in net working capital
(639)
511
(649)
Acquisitions/disposal of activities, financial instruments and foreign
exchange effect on cash flow
(97)
(213)
17
Cash flow effect from change in net working capital
(736)
298
(632)
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 30
12. Events after the balance
sheet date
We are not aware of any subsequent matters that
could be of material importance to the Group’s fi-
nancial position at 30 June 2024.
13. Accounting policies
The condensed interim report of the Group for the
first six months of 2024 is presented in accord-
ance with IAS 34, Interim Financial Reporting, as
approved by the EU and additional Danish disclo-
sure requirements regarding interim reporting by
listed companies.
Apart from the below mentioned changes, the ac-
counting policies are unchanged from those ap-
plied in the 2023 Annual Report. Reference is
made to note 7.5, Accounting policies, note 7.6,
Impact from new IFRS, note 7.7, New IFRS not yet
adopted and to specific notes in the 2023 Annual
Report for further details.
In addition to the changes mentioned in note 7.7 in
Annual Report 2023, IASB has issued IFRS 18,
Presentation and Disclosure in Financial State-
ments with effective date 1 January 2027. The
Standard replaces IAS 1, Presentation of Financial
Statements, and includes requirements on presen-
tation in the primary financial statements together
with the disclosure of information in the notes. It is
not expected that the implementation will have a
significant impact on the presentation and disclo-
sure.
Changes in accounting policies
As of 1 January 2024, FLSmidth Group has imple-
mented all new or amended accounting standards
and interpretations as adopted by the EU and ap-
plicable for the 2024 financial year. This includes
the changes to:
• IAS 1 (Classification of Liabilities as Current or
Non-current) and
• IAS 7 and IFRS 7 (Supplier Finance Arrange-
ments) and
• IFRS 16 (Lease Liability in a Sale and Lease-
back)
The implementation has not had and is not ex-
pected to have significant impact on the consoli-
dated condensed interim financial statements.
Ma na g e me nt re v ie w C o ns o l id a te d Co nd e nse d Fin a nc ia l St a te me nts N o t es St a te me nts
FL S m i dt h
■
In te ri m Re p o rt H 1 20 24 31
Statements
Statement by Management 32
Forward looking statements 33
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 2024 32
The Board of Directors and the Executive Board
have today considered and approved the interim
report for the period 1 January – 30 June 2024.
The consolidated condensed interim financial
statements are presented in accordance with IAS
34, Interim Financial Reporting, as adopted by the
EU and Danish disclosure requirements for interim
reports of listed companies. The consoli-dated
condensed interim financial statements have not
been audited or reviewed by the Group’s inde-
pendent auditors.
In our opinion, the consolidated condensed inter-
im financial statements give a true and fair view of
the Group’s financial position at 30 June 2024 as
well as of the results of its operations and cash
flows for the period 1 January – 30 June 2024.
In our opinion, the management’s review gives a
fair review of the development in the Group’s ac-
tivity and financial matters, results of opera-tions,
cash flows and financial position as well as a de-
scription of the principal risks and uncertain-ties
that the Group faces.
Valby, 15 August 2024
Executive management
Mikko Juhani Keto
Group CEO
Roland M. Andersen
Group CFO
Board of directors
Tom Knutzen
Chair
Mads Nipper
Vice chair
Anne Louise Eberhard
Thrasyvoulos Moraitis
Daniel Reimann
Anna Kristiina Hyvönen
Claus Østergaard
Carsten Hansen
Leif Gundtoft
Statement by Management
Management review Consolidated Condensed Financial Statements Notes Statements
FLSmidth
■
Interim Report H1 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 an-
nounced via the company’s website and/or
NASDAQ Copenhagen, as well as any presenta-
tions based on such financial reports, and any
other written information released, or oral state-
ments made, to the public based on this report or
in the future on behalf of FLSmidth & Co. A/S, may
contain forward-looking statements.
Words such as ‘believe’, ‘expect’, ‘may’, ‘will’,
‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’,
‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and
other words and terms of similar meaning in con-
nection with any discussion of future operating or
financial performance identify forward-looking
statements. Examples of such forward-looking
statements include, but are not limited to:
■
Statements of plans, objectives or goals for fu-
ture operations, including those related to
FLSmidth & Co. A/S’ markets, products, product
research and product development.
■
Statements containing projections of or targets
for revenues, profit (or loss), CAPEX, dividends,
capital structure or other net financial items.
■
Statements regarding future economic perfor-
mance, future actions and outcome of contin-
gencies such as legal proceedings and state-
ments regarding the underlying assumptions or
relating to such statements.
■
Statements regarding potential merger &
acquisition activities.
These forward-looking statements are based on
current plans, estimates and projections. By their
very nature, forward-looking statements involve
inherent risks and uncertainties, both general and
specific, which may be outside FLSmidth & Co.
A/S’ influence, and which could materially affect
such forward-looking statements.
FLSmidth & Co. A/S cautions that a number of im-
portant factors, including those described in this
report, could cause actual results to differ materi-
ally from those contemplated in any forward-look-
ing statements.
Factors that may affect future results include, but
are not limited to, global as well as local political
and economic conditions, including interest rate
and exchange rate fluctuations, delays or faults in
project execution, fluctuations in raw material
prices, delays in research and/or development of
new products or service concepts, interruptions of
supplies and production, unexpected breach or
termination of contracts, market-driven price re-
ductions for FLSmidth & Co. A/S’ products and/or
services, introduction of competing products, reli-
ance on information technology, FLSmidth & Co.
A/S’ ability to successfully market current and
new products, exposure to product liability and le-
gal proceedings and investigations, changes in
legislation or regulation and interpretation thereof,
intellectual property protection, perceived or ac-
tual failure to adhere to ethical marketing prac-
tices, investments in and divestitures of domestic
and foreign enterprises,
unexpected growth in costs and expenses, failure
to recruit and retain the right employees and fail-
ure to maintain a culture of compliance. Unless re-
quired by law FLSmidth & Co. A/S is under no duty
and undertakes no obligation to update or revise
any forward-looking statement after the distribu-
tion of this report.
Forward looking statements
Ma na g e me nt re v ie w C o ns o l id a te d Co nd e nse d Fin a nc ia l St a te me nts No te s S t at e m en t s
FL S m i dt h
■
In te ri m Re p o rt H 1 20 24 34
Interim Report
1 January – 30 June 2024
FLSmidth & Co. A/S
Vigerslev Allé 77
2500 Valby
Denmark
Tel.: +45 36 18 18 00
corppr@flsmidth.com
www.flsmidth.com
CVR No. 58180912
Interim report (6 months)No audit assistance ParsePort XBRL Converter 2024-01-01 2024-06-30 2023-01-01 2023-06-30 213800G7EG4156NNPG91 Reporting class D Denmark DK+4536181800+4536441146 www.flsmidth.com corppr@flsmidth.com 213800G7EG4156NNPG91 3 2 7 4 3 2 7 4 3 2 7 4 3 2 7 4 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 213800G7EG4156NNPG91 2024-04-01 2024-06-30 213800G7EG4156NNPG91 2023-04-01 2023-06-30 213800G7EG4156NNPG91 2024-01-01 2024-06-30 213800G7EG4156NNPG91 2023-01-01 2023-06-30 213800G7EG4156NNPG91 2024-03-31 213800G7EG4156NNPG91 2024-06-30 213800G7EG4156NNPG91 2023-03-31 213800G7EG4156NNPG91 2023-06-30 213800G7EG4156NNPG91 2023-12-31 213800G7EG4156NNPG91 2022-12-31 213800G7EG4156NNPG91 2023-12-31 ifrs-full:IssuedCapitalMember 213800G7EG4156NNPG91 2024-01-01 2024-06-30 ifrs-full:IssuedCapitalMember 213800G7EG4156NNPG91 2024-06-30 ifrs-full:IssuedCapitalMember 213800G7EG4156NNPG91 2023-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800G7EG4156NNPG91 2024-01-01 2024-06-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800G7EG4156NNPG91 2024-06-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800G7EG4156NNPG91 2023-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 213800G7EG4156NNPG91 2024-01-01 2024-06-30 ifrs-full:ReserveOfCashFlowHedgesMember 213800G7EG4156NNPG91 2024-06-30 ifrs-full:ReserveOfCashFlowHedgesMember 213800G7EG4156NNPG91 2023-12-31 ifrs-full:RetainedEarningsMember 213800G7EG4156NNPG91 2024-01-01 2024-06-30 ifrs-full:RetainedEarningsMember 213800G7EG4156NNPG91 2024-06-30 ifrs-full:RetainedEarningsMember 213800G7EG4156NNPG91 2023-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 213800G7EG4156NNPG91 2024-01-01 2024-06-30 ifrs-full:EquityAttributableToOwnersOfParentMember 213800G7EG4156NNPG91 2024-06-30 ifrs-full:EquityAttributableToOwnersOfParentMember 213800G7EG4156NNPG91 2023-12-31 ifrs-full:NoncontrollingInterestsMember 213800G7EG4156NNPG91 2024-01-01 2024-06-30 ifrs-full:NoncontrollingInterestsMember 213800G7EG4156NNPG91 2024-06-30 ifrs-full:NoncontrollingInterestsMember 213800G7EG4156NNPG91 2022-12-31 ifrs-full:IssuedCapitalMember 213800G7EG4156NNPG91 2023-01-01 2023-06-30 ifrs-full:IssuedCapitalMember 213800G7EG4156NNPG91 2023-06-30 ifrs-full:IssuedCapitalMember 213800G7EG4156NNPG91 2022-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800G7EG4156NNPG91 2023-01-01 2023-06-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800G7EG4156NNPG91 2023-06-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800G7EG4156NNPG91 2022-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 213800G7EG4156NNPG91 2023-01-01 2023-06-30 ifrs-full:ReserveOfCashFlowHedgesMember 213800G7EG4156NNPG91 2023-06-30 ifrs-full:ReserveOfCashFlowHedgesMember 213800G7EG4156NNPG91 2022-12-31 ifrs-full:RetainedEarningsMember 213800G7EG4156NNPG91 2023-01-01 2023-06-30 ifrs-full:RetainedEarningsMember 213800G7EG4156NNPG91 2023-06-30 ifrs-full:RetainedEarningsMember 213800G7EG4156NNPG91 2022-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 213800G7EG4156NNPG91 2023-01-01 2023-06-30 ifrs-full:EquityAttributableToOwnersOfParentMember 213800G7EG4156NNPG91 2023-06-30 ifrs-full:EquityAttributableToOwnersOfParentMember 213800G7EG4156NNPG91 2022-12-31 ifrs-full:NoncontrollingInterestsMember 213800G7EG4156NNPG91 2023-01-01 2023-06-30 ifrs-full:NoncontrollingInterestsMember 213800G7EG4156NNPG91 2023-06-30 ifrs-full:NoncontrollingInterestsMember 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 1 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 2 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 1 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 2 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 3 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 4 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 5 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 6 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 7 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 8 213800G7EG4156NNPG91 2024-01-01 2024-06-30 cmn:ConsolidatedMember 9 iso4217:DKK iso4217:DKK xbrli:shares