Highest revenue in six years and improved cash flow


FLSmidth & Co. Group Annual Report for 2019
Company Announcement No. 2-2020, 11 February 2020

Highlights in 2019

• Revenue increased by 10%
• EBITA increased by 5%
• EBITA margin declined to 8.1%
• Increased service order intake, but lower capital order intake
• CFFO increased significantly to DKK 948m

Order intake decreased by 10% to DKK 19,554m in 2019, explained by a lower level of large capital orders due to the increased market uncertainty and delay in customer decisions. However, the service business maintained a good momentum with an increase in service order intake of 3%, underpinned by record high service order intake in Cement in the fourth quarter.

The order backlog declined by 12% to DKK 14,192m in 2019 (2018: DKK 16,218m) as a consequence of the lower level of capital order intake during the year. Timing of large orders has a significant impact on the backlog development, and FLSmidth has announced large orders of approximately DKK 2.0bn in the first quarter of 2020.


Financial performance

Revenue increased 10% to DKK 20,646m, explained by a 15% growth in Mining and a 3% growth in Cement.

FLSmidth Group CEO, Thomas Schulz, commented: “2019 has been a year of challenges but also successes. We maintained a stable growth in revenue and the service business gained momentum over the year. We see rising demand for our solutions to help customers obtain a more sustainable production, and good progress was made on our digital and sustainable innovations. During the year, we however experienced an unfavourable development in business mix and a weakening business environment. The latter led to delayed customer decisions and postponement of capital orders, and some mining projects delivered lower profit than anticipated. While this was disappointing, we were pleased to see that the financial performance of our Cement business showed a positive development despite challenging market conditions.”

EBITA increased by 5%, while the EBITA margin declined to an unsatisfactory 8.1% due to the lower than expected profitability in mining. The EBITA margin in Cement improved following internal efficiency measures and a more selective approach to large projects.

Cash flow from operating activities increased significantly to DKK 948m and the free cash flow adjusted for acquisitions and disposals increased to DKK 574m, compared to DKK -15m in 2018.

Average capital employed increased to DKK 15,251m, mainly as a result of an increase in working capital and lease assets. Consequently, ROCE decreased from 11.0% to 10.9%.

Thomas Schulz, continues: “In the context of market developments and financial performance during the year, we have accelerated business improvement initiatives and we are confident that the actions we are taking will create a strong foundation to deliver sustainable profitable growth and shareholder value. Sustainability and digitalization will be key differentiators in the years to come and help expand the gap to the mid-market. We are well-positioned in both areas and have made step-changing progress in 2019. Our launch of ‘MissionZero’ truly demonstrates our leadership within sustainable productivity and sends a strong message to customers that we are determined to provide zero emissions technology to the mining and cement industries by 2030.”


Highlights in Q4 2019

• Highest revenue in six years
• EBITA decreased 5% and the EBITA margin declined to 8.1%
• Service order intake increased 8%
• Capital order intake declined 18%
• Cash flow from operating activities increased significantly to DKK 327m

As anticipated, earnings in Mining were affected by lower profitability on projects and costs related to business improvements.

The higher revenue, combined with internal efficiency improvements, drove operating leverage and improved profitability in Cement.


Guidance 2020

FLSmidth guides for revenue of DKK 18.5-20.5bn (2019: DKK 20.6bn) and an EBITA margin of 8-9% (2019: 8.1%). The return on capital employed (ROCE) is expected to be 9-12% (2019: 10.9%).

Revenue is expected to have a phasing with a seasonally low level of activity at the beginning of the year and a seasonally high level of activity towards year-end.

Read the full Annual report 2019 here.



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Rasmus Windfeld, +45 40 44 60 60,

Investor Relations
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Key figures 2019

(DKKm) Q4 2019   Q4 2018 Change (%) 2019

Change (%)
Order intake (gross) 4,389 4,503 -3% 19,554 21,741 -10%
- of which service order intake 2,890 2,680 8% 11,250 10,907 3%
Service order intake share 66% 60%   58% 53%  
Order backlog 14,192 16,218 -12% 14,192 16,218 -12%
Revenue 6,022 5,450 10% 20,646 18,750 10%
- of which service revenue 2,866 2,613 10% 10,777 10,208 6%
Service revenue share 48% 48%   52% 54%  
Gross profit 1,327 1,312 1% 4,849 4,693 3%
Gross profit margin 22.0% 24.1%   23.5% 25.0%  
before special non-recurring items
580 582 0% 2,008 1,826 10%
EBITA 487 511 -5% 1,663 1,585 5%
EBITA margin 8.1% 9.4%   8.1% 8.5%  
EBIT 393 419 -6% 1,286 1,220 5%
EBIT margin 6.5% 7.7%   6.2% 6.5%  
Profit 227 169 34% 776 635 22%
CFFO 327 97   948 385  
Free cash flow adjusted for acquisitions and disposals 217 46   574 (15)  
Net working capital 2,739 2,200 25% 2,739 2,200 25%
Net interest-bearing debt 2,492 1,922 30% 2,492 1,922 30%


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FLSmidth delivers sustainable productivity to the global mining and cement industries. We deliver market-leading engineering, equipment and service solutions to our customers enabling them to improve performance, drive down costs and reduce environmental impact. Our operations span the globe and our ~11,800 employees are present in more than 60 countries. In 2019, FLSmidth generated a revenue of DKK 20.6 billion.


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