FLSmidth reports 39% increase in net profit
In its consolidated results of 2023, Denmark-based FLSmidth reported a 10 per cent increase in revenue to DKK24,106m from DKK21,849m in 2022. The company’s gross profit increased by 20 per cent YoY to DKK6087m from DKK5076m in 2022, resulting in an improved profit margin of 25.3 per cent in 2023 from 23.2 per cent in the previous year.
EBITA increased from DKK943m in 2022 to DKK1438m in 2023 while net profit increased by 39 per cent YoY to DKK491m from DKK352m.
Mining order intake decreased five per cent YoY organically in 2023, reflecting the company’s ongoing transformation efforts and market conditions, according to the company. However, mining service order intake increased by three per cent in 2023 as a result of stable market conditions with healthy activity levels and demand for especially spare parts and consumables.
Cement order intake was down 26 per cent in 2023, mainly due to Products, which saw a 40 per cent YoY drop in 2023, as FLSmidth implemented its GREEN’26 Cement strategy, which includes derisking and product portfolio pruning, as well as adverse effects from market conditions. Cement service order intake decreased 16 per cent YoY due to lower orders for consumables as well as upgrades and retrofits. Organically, cement order intake fell by 24 per cent YoY in 2023.
Non-Core Activities order backlog amounted to DKK 0.5bn by the end of 2023, representing a decrease of DKK 3.1bn since the establishment of the NCA segment as of Q4 2022. The decrease reflects the divestment to KOCH Solutions, execution of the order backlog as well as continued re-scoping and contract terminations.
Group CEO, Mikko Keto, commented: “2023 has been yet another dynamic year for FLSmidth where we have continued to deliver on our key transformation activities. Driven by the hard work of all our dedicated employees, we have continued to improve our business performance amidst an everchanging business environment. Since the launch of our pure play strategies for Mining and Cement in early 2023, we have maintained a relentless focus on ensuring a strong integration of Mining Technologies, simplifying our business, optimising our operations and improving our profitability.”
2024 outlook
For 2024 the group expects a consolidated group revenue of DKK20-21.5bn, which includes DKK16-17bn in its mining business and DKK4-4.5bn in its cement business. Its EBITA margin is expected to be between 7.5-8.5 per cent, while its adjusted EBITA margin is forecast to range between nine and 10 per cent. This takes into account an adjusted EBITA margin of 11.5-12.5 per cent for its mining business and 5.5-6.5 per cent for the cement business. Non-core activities are expected to return a loss of DKK200-300m.
