Flsmidth & Co. A/s · OMXCOP:FLS
Flsmidth & Co. A/s — Flsmidth & Co A/S B Shs — Q1 2024 Earnings Presentation
24 slides from Flsmidth & Co. A/s's earnings presentation, May 15, 2024
Slide 1: Interim Report Q1 2024
15 May 2024 Investor presentation Interim Report Q1 2024
Slide 2: Agenda
Agenda Today’s speakers Highlights for Q1 2024 Sustainability highlights Mining performance Cement performance Roland M. Andersen Mikko Keto NCA performance Group CEO Group CFO Financial review 2024 financial outlook Forward-looking statements This presentation contains forward-looking statements. Q
Slide 3: Key highlights for Q1 2024
Key highlights for Q1 2024 MINING BUSINESS CEMENT BUSINESS Organic order intake growth of 3% reflecting stable Service 11% decrease in Service order intake reflects divestments, market and large Products order wins partly offset by positive developments in core markets Organic revenue decline of 11%
Slide 4: Sustainability performance highlights for Q1 2024
Sustainability performance highlights for Q1 2024 Scope 1 and 2 greenhouse Scope 3: Economic intensity Spend with suppliers with gas emissions (use of sold products) science-based targets Year-to-date (tCO2e (market-based)) Year to date (tCO2e / DKKm order intake) Q1 2024 (%) 38,022 39,445 5,461 5,4
Slide 5: Mining Service orders at stable levels while Products supported by large orders
Q1’24 Mining Service orders at stable levels while Products supported by large orders Q1’24 HIGHLIGHTS 3% Organic order intake growth MINING ORDER INTAKE (DKKm) 6,000 MINING ORDER INTAKE (DKKm) 4,177 4,176 0% 5,000 0% 1,275 +9% 1,392 4,000 Reported order intake growth 1,275 1,392 3,000 1,039 67% Ser
Slide 6: Decline in Mining revenue primarily reflects timing of order execution
Decline in Mining revenue primarily reflects timing of order execution Q1’24 HIGHLIGHTS -11% Organic revenue growth MINING REVENUE (DKKm) DKKm 5,000 MINING REVENUE (DKKm) -14% 4,185 -14% Reported revenue growth 1,485 -21% 3,581 4,000 1,485 1,972 1,177 3,000 1,177 67% Service share of revenue 2,700 2
Slide 7: Continued improvement in underlying Mining profitability
Continued improvement in underlying Mining profitability MINING EBITA DKKm Margin ADJ. EBITA MARGIN Q1 2024 600 14% 11.5% 11.8% 11.5% 12% 138 10.3% 450 9.6% 10% 42 Excluding DKK 42m of transformation cost 127 8% 300 8.7% 6.5% 6% 390 370 REPORTED EBITA MARGIN 4% 150 274 2% 6.5% 10.3% 0 0% Q1 2023 Q1
Slide 8: Decline in Cement order intake reflects continued de-risking and divestments
Decline in Cement order intake reflects continued de-risking and recently completed divestments Q1’24 HIGHLIGHTS -22% Organic order intake growth CEMENT ORDER INTAKE (DKKm) 2,000 CEMENT ORDER INTAKE (DKKm) 1,344 -22% -22% Reported order intake growth 531 -40% 1,042 1,500 321 531 1,000 69% Service sh
Slide 9: Continued de-risking and divestments drive lower Cement revenue in Q1'24
Continued de-risking and recent divestments drive relatively lower Cement revenue in Q1’24 Q1’24 HIGHLIGHTS -23% Organic revenue growth CEMENT REVENUE (DKKm) 2,000 CEMENT REVENUE (DKKm) 1,582 -24% -24% Reported revenue growth 692 1,208 1,500 692 -30% 487 628 1,000 60% 487 Service share of revenue in
Slide 10: Improved Cement profitability supported by business simplification and Service focus
Improved Cement profitability supported by business simplification and Service focus CEMENT EBITA DKKm Margin 200 14% ADJ. EBITA MARGIN Q1 2024 7.7% 12% 150 10% 7.7% 7.4% 8% 100 Excluding DKK 36m of transformation cost 4.3% 6% ~30 4.7% 4% 50 103 REPORTED EBITA MARGIN 36 68 2% 0 Q1 2022 Q2 2022 Q3 20
Slide 11: NCA exit on track with expected completion by end of 2024
NCA exit on track with expected completion by end of 2024 Q1’24 HIGHLIGHTS (DKK) 30 Order intake m Non-Core Activities (NCA) order backlog (DKKbn) Key comments • Initial order backlog of ~DKK 3.6bn -87% when NCA was established end Q3 2022. 50 Revenue m • • 88 employees remain (127 at end Q4 2023).
Slide 12: Consolidated financial performance in Q1 2024
Consolidated financial performance in Q1 2024 (DKKm) Q1 2024 Q1 2023 Change COMMENTS Order intake 5,248 5,632 -7% ▪ Q1 2024 revenue decreased by 20% compared to Q1 2023 and Revenue 4,839 6,016 -20% by 17% if excluding currency effects. Gross margin 29.2% 23.2% 6.0%p ▪ Adjusted EBITA margin of 9.2% i
Slide 13: Gross margin showing continued good progression driven by Mining
Gross margin showing continued good progression driven by strong margin execution in Mining GROSS PROFIT GROSS MARGIN BY SEGMENT +1% growth vs. Q1 2023 Q1 2024 vs. Q1 2023 DKKm Gross margin 29.2% 2,000 30% 26.1% Mining Cement NCA 23.2% 1,500 20% 1,000 32.9% 1,557 25.4% 23.5% 22.8% 1,397 1,415 10% 50
Slide 14: Ongoing transformation positively impacts SG&A costs, but ratio increases
Ongoing transformation positively impacts SG&A costs, but ratio increases due to lower revenue SG&A COSTS COMMENTS SG&A ratio up by 2.6%p vs. Q1 2023 ▪ SG&A costs decreased by 8% to DKK 1,008m in Q1 2024 from DKKm SG&A ratio DKK 1,100m in Q1 2023. 1,200 25% ▪ The decrease was partly offset by transf
Slide 15: Q1'24 Group EBITA margin positively impacted by strong gross margin and lower SG&A
Q1’24 Group EBITA margin positively impacted by strong gross margin and relatively lower SG&A GROUP EBITA GROUP EBITA MARGIN BRIDGE Continued improvement in underlying profitability Q1 2024 vs. Q1 2023 Approx. %p development DKKm EBITA margin 600 12% 9.2% 9.2% 9.2% 10% 0.5% 450 -1.5% 7.5% 2.0% 8% 6.
Slide 16: Net working capital increased mainly due to lower trade payables
Net working capital increased mainly due to lower trade payables, leading to NWC ratio of 8.4% in Q1’24 NET WORKING CAPITAL NET WORKING CAPITAL DEVELOPMENT IN Q1 2024 DKKm NWC ratio (DKKm) Q1 2024 Q4 2023 Change 3,000 12% 10.6% Inventories 3,447 3,450 -3 2,500 8.4% Trade receivables 4,156 4,516 -360
Slide 17: Negative cash flow in line with expectations, driven by change in NWC
Negative cash flow in line with expectations and driven primarily by change in NWC GROUP (DKKm) Q1 2024 Q1 2023 GROUP CASH FLOW EBITDA, continuing adjusted 425 311 DKKm EBITDA, discontinued - -9 1,000 Change in provisions 120 173 800 Change in NWC -650 -694 600 Financial payments -34 -18 400 Taxes p
Slide 18: Financial gearing remains well-below our capital structure target
Financial gearing remains well-below our capital structure target LEVERAGE AS OF END NIBD Q1 2024 DKKm NIBD/EBITDA RATIO REMAINS LOW AT 0.5x NIBD/EBITDA 0.5x 2,000 2.5 2.0 1.5 1,000 Net interest-bearing debt / EBITDA ratio 1.0 0.5x 0.5 CAPITAL STRUCTURE TARGET 0 0.0 2.0x -0.5 < -1,000 Q1 2022 Q2 202
Slide 19: Financial guidance for 2024 maintained
Financial guidance for 2024 maintained Mining Cement Non-Core Activities Group Revenue (DKKbn) Revenue (DKKbn) Revenue (DKKm) Revenue (DKKbn) 16.0-17.0 4.0-4.5 250-350 20.0-21.5 (DKK 3.6bn) (DKK 1.2bn) (DKK 50m) (DKK 4.8bn) Adj. EBITA margin Adj. EBITA margin Adj. EBITA margin 11.5-12.5% 5.5-6.5% 9.
Slide 20: Transformation progressing according to plan
Transformation progressing according to plan Ambition Progress Key comments and developments • Implementation of principal company model on track Simplification and operating model • Mining organisation reduced by ~270 FTEs since end-Q1 2023 Commercial investments to enhance and • Strengthening PCV
Slide 21: Mission: Towards zero emissions by 2030
IOP peeenenss til Mission @ Towards zero emissions by 2030
Slide 22: Invitation to FLSmidth Meet the Management Investor Event
Invitation to FLSmidth “Meet the Management” Investor Event 22 to 23 September 2024 FLSmidth is pleased to invite institutional investors, equity analysts and financial media to visit our Salt Lake City premises for presentations by FLSmidth Executive and Senior Management, a tour of our Mining rese
Slide 23: Investor information
Investor information INVESTOR CALENDAR INVESTOR RELATIONS CONTACTS 15 August 2024 H1’24 interim report Jannick Lindegaard Denholt 23 September 2024 Investor Event VP, Head of Investor Relations 12 November 2024 9M’24 interim report +45 2169 6657 jli@flsmidth.com SHARE INFORMATION Market Nasdaq Copen
Slide 24: FLSmidth A/S contact details
FLSmidth A/S Vigerslev Allé 77 2500 Valby, Copenhagen Denmark Phone: +45 3618 1000 Email: info@FLSmidth.com www.flsmidth.com CVR: 58180912
Flsmidth & Co A/S B Shs — Q1 2024 Earnings Presentation on 6ix