FLSmidth sees order intake rise 6% QoQ

FLSmidth has seen its order intake increase for the third consecutive quarter in January-March 2021, rising six per cent QoQ, but the organic order intake decreased 19 per cent YoY against the exceptionally strong 1Q20. The order backlog increased nine per cent to DKK16,251m (US$2.62bn) from DKK14,874m in the 4Q20.

Revenue declined 18 per cent YoY to DKK3,713m from DKK4,525m in the first quarter of 2020, comprising a seven per cent decrease from the mining segment and a 23 per cent decline in cement. The Group EBITA margin increased slightly to 5.1 per cent.

"In light of the ongoing pandemic, FLSmidth delivered a solid 1Q21 with a good order intake and revenue as expected. The sequential increase in order intake was underpinned by a strong focus on service as well as orders for plant digitalisation and emissions reduction. The EBITA margin increased slightly and cash flow was strong. The organisation has done a tremendous job of managing safety protocols whilst helping our customers sustain production and improve operational efficiency," said Thomas Schulz, CEO.

FLSmidth maintains its guidance for group revenue of DKK15.5-17.0bn and a group EBITA margin of 5-6 per cent. The guidance is based on a continued impact from the pandemic in the 2Q21, where business activity is expected to remain low.

"There is a strong correlation between the pandemic and business activity. The global vaccination programmes provide hope of easing restrictions and a gradual improvement in business sentiment in the second half of the year. Surging infection rates in parts of the world could, however, slow down the pace of recovery," said the CEO.

The group’s cement business revenue is expected to decline further in 2021, while initiatives to reshape the cement business are ongoing. The segment is not expected to be EBITA positive in 2021, due to continued cement reshaping costs and low capacity utilisation in the service business until the pandemic eases.