FLSmidth (FLS) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered strong financial results, surpassing expectations with higher-than-expected revenue and profitability, especially in service revenue, despite a 2% year-over-year revenue decline and market uncertainty from US tariffs and macroeconomic headwinds.

• Adjusted EBITA margin improved to 13.9% (from 9.2%), driven by strong Mining service revenue and margin execution.

• Group profit rose 81% to DKK 351m, and the number of employees was reduced by 12% year-over-year.

• Entered exclusive negotiations to divest the Cement business to Pacific Avenue Capital Partners; Non-Core Activities ceased as planned, with remaining contracts moved to Mining.

• Advanced ESG and sustainability KPIs ahead of plan, including significant reductions in greenhouse gas emissions and the launch of new recycling and flotation technologies.

Financial highlights

• Group revenue was DKK 4,729m in Q1, down 2% year-over-year; order intake declined 12% to DKK 4,629m.

• Gross profit increased 18% to DKK 1,629m, with gross margin up to 34.4% (from 28.6%).

• Adjusted EBITA margin was 13.9% (from 9.2%), reported EBITA margin 12.6% (from 7.5%).

• Net profit for the group was DKK 351m; EPS increased to DKK 6.1 from DKK 3.4.

• Free cash flow after M&A was -DKK 120m to -DKK 122m; leverage ratio (NIBD/EBITDA) at 0.4x, well below target.

Outlook and guidance

• Full-year 2025 guidance raised: Group revenue ~DKK 19bn, Adjusted EBITA margin 13.0–13.5% (up from 12.5–13.0%), reported EBITA margin 11.5–12.0%.

• Mining division guidance increased to Adjusted EBITA margin 14.0–14.5%; Cement guidance at 9.0–9.5%.

• Service order intake expected to remain stable, typically DKK 2.6–2.8bn per quarter.

• Transformation and separation costs for 2025 expected at DKK 200m (Group) and DKK 50m (Cement); guidance excludes these costs.

• Outlook subject to macroeconomic and geopolitical uncertainties, especially tariffs and global demand.