Flsmidth & Co. A/s · OMXCOP:FLS
Flsmidth & Co. A/s — Flsmidth & Co A/S B Shs — Q3 2024 Earnings Presentation
45 slides from Flsmidth & Co. A/s's earnings presentation, Nov 12, 2024
Slide 1: Investor Presentation
Investor Presentation 12 November 2024
Slide 2: Forward-looking statements
Forward-looking statements This pre Such sta Content 01 02 03 04 Highlights for Q3 2024 Sustainability highlights Mining performance Cement performance 05 06 07 08 NCA performance Financial review 2024 financial outlook Appendix
Slide 3: Key highlights for Q3 2024
Key highlights for O03 2024 MINING BUSINESS The Mining Service market remains stable while the Mining Products market continues to be relatively more soft Good execution of PCV-related Products orders partly offsets 2% decline in Mining revenue Strategic cooperation agreement in Uzbekistan signed in
Slide 4: Sustainability performance highlights for 2024
Sustainability performance highlights for 03 2024 vson QD) tov rose 200 »\ SCIENCE BASED TARGETS Scope 1and 2 greenhouse gas emissions Year-to-date (tCO,e (market-based)) 38,022 30,445 28,281 i T ores HI23 ows Fv23 oma! ! Fy2q target 18.3% Improvement compared to 9M 2023 due to divestments in Cement
Slide 5: Mining order intake in line with expectations
Service order intake in line with expectations while decline in Products order intake reflects large orders in Q3 2023 MINING ORDER INTAKE MINING ORDER INTAKE (DKKm) (DKKm) 5,000 Q3 2024 HIGHLIGHTS 4,000 @e8%) ed 1,075 3,000 ~14% 2 Reported order intake growth ~~ C0%). _ 2,826 2,7949.649 -11% Organi
Slide 6: Strong Products revenue driven by execution of PCV orders
Strong Products revenue driven by execution of PCV orders partly offsets lower Service revenue MINING REVENUE MINING REVENUE (OKKm) (KKm) 5,000 03 2024 HIGHLIGHTS : ae 4,000 9 0% [ 3,000 Organic revenue growth 2,000 -2% Reported revenue growth -- “C%> > 2,643 2,557 2,513 1,000 % 263% Service share o
Slide 7: Continued margin expansion with Adjusted EBITA margin of 13.3%
Continued margin expansion with Adjusted EBITA margin of 13.3% pkKm Marain 750 131% 133% = 14% 11.5% 12% 114% 600 12.4% 8.2% 10% 450 | 3% 300 0% 434 4% 150 2% ° 0% Q32022 042022 012023 022023 032023 042023 12024 022024 032024 MEESITA One-off items EBITA margin Adjusted EBITA margin Notes: One-off it
Slide 8: Cement order intake reflects de-risking and divestments
Order intake reflects major changes versus comparative quarter due to de-risking and two recent divestments CEMENT ORDER INTAKE CEMENT ORDER INTAKE (DKKm) (DKKm) 2,000 Q3 2024 HIGHLIGHTS -24% Organic order intake growth “ "e00 Reported order intake growth — 500 78% (°) Service share of order in ie)
Slide 9: De-risking and divestments drive lower Cement revenue
9 Continued de-risking and recent divestments are the main drivers of the lower Cement revenue versus last year Q3 2024 HIGHLIGHTS -21%% Organic revenue growth -27% Reported revenue growth 359% Service share of revenue (51% in Q: 1/2024 032024 Investor Presentation CEMENT REVENUE CEMENT REVENUE (DkK
Slide 10: Improved profitability due to good margin execution and lower SG&A
Improved profitability due to good margin execution and lower SG&A CEMENT EBITA (DKKm and pct.) DKKm Margin 200 lees 12% /\ a, 10% 150 je \\ \ 8% / / a 100 1 @Y 6% / _ 52? S==fP 4% - 50 2% C) 0% Q32022 042022 012023 022023 032023 042023 12024 022024 032024 HEEBTA fl One-offitems YZ Divestment gain —
Slide 11: NCA exit remains well on track
NCA exit remains well on track with close-down of segment stillexpected by the end of the year NCA ORDER BACKLOG (DKKm) f -89% Q3 2024 HIGHLIGHTS 3.6 22 - Order intake (DKKm) 24 36 14 Revenue (DKKm) -8 26 05 O65 o4 EBITA (DKKm) ar'23 aQt24 Q2'24 Q3'22 04'22 Q2'23 Q3'23 04'23 1 12/11/2024 03 2024 Inv
Slide 12: Consolidated financial performance in Q3 2024
Consolidated financial performance in Q3 2024 CONSOLIDATED FINANCIALS (DKKm) Order intake Revenue Gross profit margin SG&A Adjusted EBITA Adjusted EBITA margin EBITA EBITA margin Financial cost net Tax Profit/loss, continuing activities Profit/loss, discontinuing activities Profit/loss for the Group
Slide 13: Gross margin reflects good margin execution
Gross margin reflects good margin execution as well as completion of legacy projects in Cement GROSS PROFIT +2% growth in 03 2024 vs. 03 2023 DKKm Gross margin 2,000 319% 331% 35% 30% 25% 20% 15% 10% 5% 0% Q3 a4 Qi Q2 Q3 a4 Qi Q2 Q3 2022 2022 2023 2023 2023 2023 2024 2024 2024 Wl Gross profit Gross
Slide 14: SG&A costs reduced by 10% year-on-year
SG&A costs reduced by 10% year-on-year with ratio impacted by relatively lower revenue 900 600 300 4 Q3 2022 12/1/2024 SG&A COSTS SG&A ratio up by 0.4%p vs. 03 2023 SG&A ratio 25% 20% 15% 10% 5% 0% a4 Qi Q2 Q3 a4 Qi Q2 Q3 2022 2023 2023 2023 2023 2024 2024 2024 SG&A cost — SG&A ratio 03 2024 Investo
Slide 15: Group EBITA margin positively impacted by strong gross margin
Group EBITA margin positively impacted by the strong gross margin, partly offset by relatively lower revenue GROUP EBITA Continued improvement in profitability DkKm EBITA margin 800 pox “% 12% 600 10.1% 102% 1.4% : 10% 8% 400 6% 4% 200 2% ie} 03 2022 04 2022 Oi 2023 O2 2023 03 2023 04 2023 012024 02
Slide 16: Increase in net working capital
Increase in net working capital primarily driven by increase in net WIP assets and prepayments from customers NET WORKING CAPITAL DKKm NWC ratio 3,000 NA% 12% . 10.6% 9.4%, 9% 6% 3% 0% Q3 a4 Qi Q2 Q3 a4 Qi Q2 Q3 2022 2022 2023 2023 2023 2023 2024 2024 2024 HB Net Working Capital Net Working Capital
Slide 17: Cash flow from operations positively impacted by higher earnings
Cash flow from operations positively impacted by higher earnings GROUP CASH FLOW GROUP (DKKm) Q32024 032023 EBITDA adjusted 662 451 EBITDA, discontinued - cal DkKm Change in provisions, pensions and employee benefits 205 -97 1,200 Change in NWC. -347 -442 4000 Financial payments -32 -29 Taxes paid 1
Slide 18: Financial gearing remains well-below capital structure target
Financial gearing remains well-below our capital structure target LEVERAGE AT END-Q3 2023 0.6x Net inter ot / EBITDA ratio CAPITAL STRUCTURE TARGET <2.0x Net interest-bearing debt / EBITDA ratio 18 12/1/2024 03 2024 Investor Presentation DKKm 2,000 1,500. 1,000 500 ie) NET INTEREST-BEARING DEBT Rati
Slide 19: Financial guidance for full year 2024 is revised
The financial guidance for the full year 2024 is revised {Loss of 200-300) Cement Non-Core Activities Group ed 9M'24 Revenue (DKKbn) ed 9M'24 Revenue DKKbn) sé 4 Revenue (DKKm) sé 4 Revenue (DKKbn) DKK 11.4bn ~15.5 DKK 3.4n 4.0-4.5 DKK 130m ~200 DKK 14.9bn ~20.0 (unchanged) (unchanged) (200-300) (un
Slide 20: Our transformation remains well on track
Our transformation remains well on track 20 12/1/2024 Ambition Progress Key comments and developments + Mining organisation reduced by ~700 FTEs since end-03 2023 Simplification and operating model o ) + On track for the implementation of a more cost-efficient operating model, including a leaner cor
Slide 21: Investor Relations contacts
Head of Investor Relations Phone: +45 2485 0384 Email: andh@flsmidth.com SVP, Head of Corporate Affairs & IR Phone: +45 2169 6657 Email: jli@flsmidth.com ai 12/1/2024 032024 investor Presentation FLS
Slide 22: Appendix
Appendix 1. Our equity story ina nutshell 2.03 2024 financial appendix ES rs 22 ram2oza 032024 Investor Presentation FLS
Slide 23: 1. Our equity story
in anu 1. Our equity story
Slide 24: Our value proposition
Our value proposition Our pure play Key market strategies drivers Green transition Mining Middle class growth CORE’26 Industry challenges 24 1/2024 032024 Investor Presentation Our value creation drivers Full flowsheet coverage Large installed base Service centricity Sustainability & technology Indu
Slide 25: FLSmidth at a glance
FLSmidth at a glance We are a full flowsheet technology and service supplier to the global mining and cement industries. We enable our customers to improve performance, lower operating, costs and reduce environmental impact. We work within fully validated science-based targets, have a clear commitme
Slide 26: FLSmidth in the world
FLSmidth in the world South America SAMER NorthAmerica NAMER 25. .20. 20: 23. 5x 19% me yowth Shareotrevenue —seyende growth Snare of SERS 2022:24% Europe, Central Asia & North AfricaECAN 18, 8. 24 Asia & Australia APAC 20. 1k 20: 26 12/11/2024 032024 Investor Presentation FLS
Slide 27: Our organisation and culture is evolving with business transformation
Our organisation and culture is evolving with our ongoing business transformation core a mone Core transformat Core values Transition to pure play (from 04 2022) { 4 | Cement We have changed from regional P&L. Region’ Region? Region © Region « Region ‘to global business lines P&L Accountability Coll
Slide 28: Simplifying our operating model to realise efficiencies
Simplifying our operating model to realise efficiencies, ensure stronger execution and improve profitability Transition to pure play Simplification Reduce risk exposure > risk quotas introduced I | | Descope > focus on core Products, improved terms & conditions NCA to be exited towards end of 2024 G
Slide 29: Our CORE'26 pure play mining strategy
Our CORE’26 pure play mining strategy 29 12/1/2024 Sustainability Building a better future f and th 03 2024 Investor Presentation Delivering solutions for tomorrow's mine Bron Mission FLS
Slide 30: Sustainability
SI aim 30 ray12024 032024 investor Presentation FLS
Slide 31: We are digitalising the entire flowsheet
We are digitalising the entire fTlowsheet Pumps, Product Cyclones& Beneficiation Tailings digitalisation level Extraction Conveying Comminution Valves andRecovery Thickening Filtration © Management “> Sensors e@ e@ C ) e e Gap Product Control e@ e@ e@ e@ e e e Insights e e e e e e e e eHealth e@ e e
Slide 32: How we will achieve our sustainability ambitions
How we will achieve our sustainability ambitions Enabling profitable sustainability 32 Improving our ESG performance rayn/2024 03 2024 Investor Presentation oo oS e a SS \ os 4 Life cycle / services £ Partin efieney f at |= Throughput optimisation / “Recovery emancement Zy \ / J SN \ / = \ / Innovat
Slide 33: Key benefits delivered by a MissionZero Mine
Key benefits delivered by a MissionZero Mine eee Conveying Eco. Beneficiation Neil i : , 48S gee 45% reduction | coarsealR™ : 5 in flotation : i : energy per = bs ” REFLUX" 30% overall f P : > - Flotation kWh/t car energy Opetoy CT consumption Crusher j reduction [ ll Lupowici* Vibrating Concentrate
Slide 34: 2. Q3 2024 financial appendix
2. Q3 2024 financial appe J
Slide 35: Mining performance
Mining performance (DKKm) Order intake - Service order intake - Products order intake Order backlog Revenue - Service revenue - Products revenue Gross profit Gross profit margin Adjusted EBITA margin EBITA EBITA margin 35 12/1/2024 032024 3,724 2,649 1,075 11,299 4,006 2,513 1,493 1,305 32.6% 13.3%
Slide 36: Mining order intake by commodity
Mining order intake by commodity Other Mining 36% ron ore Fertilizer T% Gold Coal 2/1/2024 032024 Investor Presentation FLS
Slide 37: Cement performance
Cement performance (DKKm) Order intake - Service order intake - Products order intake Order backlog Revenue - Service revenue - Products revenue Gross profit Gross profit margin Adjusted EBITA margin EBITA EBITA margin 37 12/1/2024 032024 843 654 189 3,976 1,017 598 419 388 38.1% 10.8% ic) 8.9% 03 2
Slide 38: Revenue and EBITA margin for Mining and Cement
Revenue and EBITA margin for Mining and Cement MINING CEMENT DKKm Margin DKKm Margin 5,000 14% 2,500 14% 12% 12% 4,000 2,000 10% 10% 3,000 8% 1,500 8% 2,000 6% 1,000 6% 2,643 2557 2619 ** a% 1,000 500 2% 77 648 bon 2% ie) 0% ie) 0% Q3'22 04'22 O23 O2'23 O3'23 04'23 ATI'24 Q2'24 03'24 Q3'22 04'22 O23
Slide 39: Order intake and revenue growth
Order intake and revenue growth Order intake growth Mining Cement NCA Group Revenue growth Mining Cement NCA Group Q3 2024 vs.03 2023 Q3 2024 vs. 03 2023 Organic ~11% -24% 61% 14% Organic 0% -21% ~85% -8% Divestments 0% 6% 0% 1% Divestments 0% -5% 0% A% Currency -3% 1% 0% -3% Currency -2% A% 1% -3%
Slide 40: Order backlog and conversion to revenue
Order backlog and conversion to revenue Order backlog / LTM revenue at 75.3% in 03 2024 ORDER BACKLOG EXPECTED BACKLOG CONVERSION TO REVENUE -21% vs.Q3 2023 * 16% during 2024 DKKm Order backlog/Revenue + §8% during 2025 140% * 26% during 2026 and beyond 120% Outstanding order backlog related to Russ
Slide 41: Regional revenue split
Regional revenue split REVENUE 9M 2024 Hl North America {i Europe, Central Asia and North Africa ll South America ‘Sub-Saharan Africa, Middle East and South Asia 4 12/11/2024 03 2024 Investor Presentation REVENUE 9M 2023 i Asia and Australia FLS
Slide 42: Consolidated performance
Consolidated performance (DKKm) Order intake - Service order intake - Products order intake Order backlog Revenue - Service revenue - Products revenue Gross profit Gross profit margin EBITA EBITA margin EBIT EBIT margin Financial cost net Tax Profit/loss, continuing activities Profit/loss, discontin
Slide 43: Consolidated cash flow
Consolidated cash flow GROUP (DKKm) Q3 2024 Q3 2023 Change EBITDA, adjusted 662 451 au Change in provisions, pensions and employee benefits 205 -97 302 Change in NWC -347 -442 96 Financial items received and paid -32 -29 -3 Taxes paid -131 -158 27 CFFO (Group) 357 -276 632 CFFI excl. acquisitions an
Slide 44: Net working capital components
Net working capital components Net working capital increased to DKK 2,208m at the end of Q3 2024 NET WORKING CAPITAL 2,208 03 04 Gt G2 03 04 OF G2 a3 2022 2022 2023 2023 2023 2023 2024 2024 2024 NET WORK-IN-PROGRESS ASSETS DkKm 200 -400 -600 03 04 Qt a2 03 04 OF G2 a3 2022 2022 2023 2023 2023 2023 2
Slide 45: Follow us here
Follow us here @) OOO® FLSmidth & Co. A/S Vigerslev Allé 77 2500 Valby, Copenhagen Denmark Phone: +45 3618 1000 Email: info@FLSmidthcom www.flsmidth.com CVR; 58180912
Flsmidth & Co A/S B Shs — Q3 2024 Earnings Presentation on 6ix