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 14 May 2025
Copenhagen, DenmarkToday, the Board of Directors of FLSmidth have approved the Q1 2025 Interim Financial Report.
Highlights in Q1 2025:
14% increase in Mining Service revenue driven by effective backlog management and order execution
Mining Adjusted EBITA margin of 15.1% reflecting continued profitability improvements
Negative growth in Cement order intake and revenue continue to reflect de-risking and impact from divestments
Cement Adjusted EBITA margin of 9.5% reflecting good strategic execution, with reduced SG&A costs and effective de-risking
FLSmidth has entered exclusive negotiations for the potential divestment of the Cement business
The financial guidance for the full year 2025 was raised on 14 May 2025 (ref. Company Announcement no. 7-2025)
Continued progression on all our science-based sustainability targets
FLSmidth Group CEO, Mikko Keto, comments: 'The year has started better than anticipated, with strong financial results and a solid commercial performance driving an upgraded financial guidance. This robust performance was achieved in a quarter with increased uncertainty and turbulence from US tariff measures. Amid this market backdrop, it was encouraging to see growth in orders within our consumables and pumps, cyclones and valves businesses. Further, effective backlog management and order execution resulted in a 14% growth in Mining Service revenue. Combined with the continued implementation of our corporate model, this was the primary driver behind the realisation of an Adjusted EBITA margin of 15.1% for the quarter. In Cement, we continue to see improvements in financial performance with an Adjusted EBITA margin of 9.5% in the first quarter of the year. We have made further progress towards the potential sale of the Cement business and have entered exclusive negotiations with Pacific Avenue Capital Partners. All in all, we are very pleased with the results delivered in the first quarter, and we are well positioned to deliver our updated targets for the full year.Implications from US tariff measures
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.Results in Q1 2025
Commercial performance
Mining 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).
Cement 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).
Group 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).Financial performance
Mining 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.
Cement 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.
Group 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.Other business
Updates on new Mining business line Presidents
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.
Update on potential divestment of the Cement business
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.Financial guidance for the full year 2025
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.
Mining
Cement
Consolidated Group
Revenue (DKKbn)~15.0(DKK 3.7bn)
Revenue (DKKbn)~4.0(DKK 1.0bn)
Revenue (DKKbn)~19.0(DKK 4.7bn)
Adj. EBITA margin14.0-14.5%(15.1%)
Adj. EBITA margin9.0-9.5%(9.5%)
Adj. EBITA margin13.0-13.5%(13.9%)
EBITA margin11.5-12.0%(12.6%)
Note: Numbers in brackets represent actual year-to-date financial results as of Q1 2025.
Mining
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.
Cement
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.
Group
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.Earnings call details
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.
Live audio-webcast
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.
Presentation slides
The presentation slides will be made available shortly before the scheduled start of the webcast at https://fls.com/en/investors/financial-downloads.Consolidated key figures for Q1 2025
DKK million, unless otherwise stated
Q1 2025
Q1 2024
Change (%)
2024
Order intake
4,629
5,248
-12%
19,133
- Hereof service order intake
3,351
3,505
-4%
13,933
- Hereof products order intake
1,278
1,743
-27%
5,200
Order backlog
14,762
17,482
-16%
15,214
Revenue
4,729
4,839
-2%
20,187
- Hereof service revenue
3,464
3,130
11%
12,997
- Hereof products revenue
1,265
1,709
-26%
7,190
Gross profit
1,629
1,384
18%
6,465
Gross margin
34.4%
28.6%
5.8%p
32.0%
Adjusted EBITA
656
443
48%
2,230
Adjusted EBITA margin
13.9%
9.2%
4.7%p
11.0%
EBITA
596
365
63%
1,969
EBITA margin
12.6%
7.5%
5.1%p
9.8%
Profit for the period
351
194
81%
1,030
CFFO
-12
-352
n.m.
640
Free cash flow
-122
-306
n.m.
132
Net working capital
2,415
1,935
25%
2,107
Net interest-bearing debt (NIBD)
1,043
830
26%
847
NIBD/EBITDA ratio
0.4x
0.5x
n.m.
0.4xContacts:
Investor Relations
Andreas Holkjær, +45 24 85 03 84, andh@flsmidth.comJannick Denholt, +45 21 69 66 57, jli@flsmidth.com
Media
Jannick Denholt, +45 21 69 66 57, jli@flsmidth.comAbout FLSmidth
FLSmidth is a full flowsheet technology and service supplier to the global mining and cement industries. We enable our customers to improve performance, lower operating costs and reduce environmental impact. MissionZero is our sustainability ambition towards zero emissions in mining and cement by 2030. We work within fully validated Science-Based Targets, have a clear commitment to improving the sustainability performance of the global mining and cement industries and aim to become carbon neutral in our own operations by 2030. www.fls.com
Attachments
FLSmidth Company Announcement no. 8-2025
FLSmidth_Q1-2025
213800MXXDGQ3ITPXI41-2025-03-31-en
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SíO PAULO, June 10, 2025 /PRNewswire/ -- FS Luxembourg S.à r.l. (the "Issuer", "we", "us" or "our"), a wholly-owned finance subsidiary of FS Indústria de Biocombustíveis Ltda. ("FS Ltda."), announces that it has commenced a cash tender offer (the "Tender Offer") for up to US$200.0 million in aggregate principal amount (subject to increase by the Issuer, in its sole discretion, the "Maximum Tender Amount") of its 8.875% senior notes due 2031 (the "Notes"). The Notes are fully, unconditionally and irrevocably guaranteed by FS Ltda. and FS I Indústria de Etanol S.A. (together with FS Ltda., the "Guarantors"). The Tender Offer is being made upon the terms and subject to the conditions set forth in an offer to purchase, dated June 10, 2025 (the "Offer to Purchase"). Any capitalized term used but not defined in this press release has the respective meaning set forth in the Offer to Purchase. The following table sets forth certain information regarding the Notes and the terms of the Tender Offer, including price information: Title of Security CUSIP / ISIN Principal AmountOutstanding Tender OfferConsideration(1) Early TenderPremium(2) Total Consideration(3) 8.875% Senior Notes due2031 Rule 144A: 30315X AC8 /US30315XAC83 Regulation S: L40756 AE5/ USL40756AE57 US$600,000,000 US$997.50 US$30.00 US$1,027.50 __________________ (1) The amount to be paid for each US$1,000 principal amount of Notes validly tendered after the Early Tender Date but at or prior to the Expiration Date and accepted for purchase. In addition, Accrued Interest will be paid. (2) Per US$1,000 principal amount of Notes validly tendered at or prior to the Early Tender Date and accepted for purchase. (3) The amount to be paid for each US$1,000 principal amount of Notes validly tendered at or prior to the Early Tender Date and accepted for purchase. The Total Consideration includes the Early Tender Premium. In addition, Accrued Interest will be paid. The Tender Offer will expire at 5:00 p.m. (New York City time) on July 10, 2025 (such time and date, as it may be extended by the Issuer, the "Expiration Date"). Holders of Notes that are validly tendered (and not validly withdrawn) at or prior to 5:00 p.m. (New York City time) on June 24, 2025 (such time and date, as it may be extended by the Issuer, the "Early Tender Date") and that are accepted for purchase will be eligible to receive the Total Consideration, which includes the Early Tender Premium, in each case as set forth in the table above, plus Accrued Interest. Holders of Notes that are validly tendered after the Early Tender Date and at or prior to the Expiration Date will only be eligible to receive the Tender Offer Consideration, which equals the Total Consideration less the Early Tender Premium, as set forth in the table above, plus Accrued Interest. Notes that have been validly tendered pursuant to the Tender Offer may be validly withdrawn at or prior to 5:00 p.m. (New York City time) on June 24, 2025, but not thereafter except as may be required by applicable law (as determined by the Issuer). Settlement Assuming our acceptance of Notes tendered pursuant to the Tender Offer, Holders that have validly tendered and not validly withdrawn Notes at or prior to the Early Tender Date and whose Notes are accepted for purchase will, if we so elect, receive payment one business day following the Early Tender Date but before the Expiration Date (the "Early Settlement Date"). If we do not, in our sole discretion, elect to pay for such tendered Notes prior to the Expiration Date, then the Early Settlement Date will be the same as the Final Settlement Date. 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If the Tender Offer is not oversubscribed at the Early Tender Date and the purchase of all Notes validly tendered after the Early Tender Date but at or prior to the Expiration Date (when combined with all Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date) would cause us to accept for purchase an aggregate principal amount of Notes that exceeds the Maximum Tender Amount, then the Tender Offer will be oversubscribed at the Expiration Date and, assuming satisfaction or waiver of the conditions to the Tender Offer, we will purchase on the Final Settlement Date Notes validly tendered at or prior to the Expiration Date and accepted for purchase, as follows: first, to the extent there was no Early Settlement Date, all Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date; and second, all Notes validly tendered after the Early Tender Date but at or prior to the Expiration Date, on a prorated basis according to the principal amount of such Notes, such that we purchase an aggregate principal amount of Notes that does not exceed the Maximum Tender Amount. All tendered Notes not accepted will be promptly credited to the Holder's account with DTC or otherwise returned to the Holder without cost. In the event that the amount of Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date would result in an aggregate principal amount that exceeds the Maximum Tender Amount and we elect to have an Early Settlement Date, then, subject to the terms and conditions of the Tender Offer, Notes tendered after the Early Tender Date will not be eligible for purchase, unless the Maximum Tender Amount is increased. We reserve the right, but are under no obligation, to increase the Maximum Tender Amount at any time, subject to compliance with applicable law. Conditions to the Tender Offer Our obligation to purchase Notes in the Tender Offer is subject to the satisfaction or waiver of a number of conditions, including the receipt by us of proceeds from a proposed debt financing on terms reasonably satisfactory to us, in our sole discretion and subject to applicable law, generating net proceeds in an amount that is sufficient to effect the repurchase of the Notes validly tendered and accepted for purchase pursuant to the Tender Offer, including the payment of any premiums, Accrued Interest and costs and expenses incurred in connection therewith. The Tender Offer is not conditioned upon the tender of any minimum principal amount of Notes. However, the Tender Offer is subject to the Maximum Tender Amount. Other Information The Issuer has engaged Morgan Stanley & Co. LLC to act as dealer manager (the "Dealer Manager") in connection with the Tender Offer. In such capacity, the Dealer Manager may contact Holders regarding the Tender Offer and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Offer to Purchase and related materials to beneficial owners of Notes. The Dealer Manager can be contacted at its telephone numbers set forth on the back cover page of the Offer to Purchase with questions regarding the Tender Offer. Copies of the Offer to Purchase are available to Holders from D.F. King & Co., Inc., the tender agent and the information agent for the Tender Offer (the "Tender and Information Agent"). Requests for copies of the Offer to Purchase should be directed to D.F. King at +1 (888) 280-6942 (toll-free) or +1 (212) 256-9086 (collect). 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Important Notice regarding Forward-Looking Statements This press release contains forward-looking statements. Forward-looking statements are information of a non-historical nature or that relate to future events and are subject to risks and uncertainties. No assurance can be given that the transactions described in this press release will be consummated or as to the ultimate terms of any such transactions. Neither the Issuer nor the Guarantors undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Disclaimer This press release must be read in conjunction with the Offer to Purchase. This press release and the Offer to Purchase contain important information that must be read carefully before any decision is made with respect to the Tender Offer. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own legal, tax, accounting and financial advice, including as to any tax consequences, from its attorney, accountant or other independent financial or legal adviser. None of the Issuer, the Guarantors, the Dealer Manager, the Tender and Information Agent or any affiliate of such persons expresses any opinion as to whether the terms of the Tender Offer are fair to any Holder. Holders must make their own decision as to whether to tender any Notes and, if so, the principal amount of Notes to tender. View original content: SOURCE FS Luxembourg S.à r.l.
