The Copenhagen, Denmark-headquartered Group’s order intake increased 6% compared to Q4 2020, but organic order intake decreased 19% compared to what it says was an ‘exceptionally strong’ Q1 2020.
FLSmidth’s revenue declined 18% to DKK 3,713mn (€499.27mn) in Q1 2021 (Q1 2020: DKK 4,525mn - €608.46mn) and 13% organically, comprising a 7% decrease in Mining and a 23% decline in Cement. The Group’s EBITA margin increased slightly to 5.1%, with FLSmidth also reporting a positive cash flow and reduction in net debt.
FLSmidth Group CEO Thomas Schulz said: “In light of the ongoing pandemic, FLSmidth delivered a solid Q1 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.
“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. However, surging infection rates in parts of the world could slow down the pace of recovery.”
FLSmidth says the outlook for the mining industry remains positive. For 2021, Group Mining business revenue and EBITA are expected to grow in the second half of the year, and the EBITA margin is expected to be high-single-digit for the full year.
The outlook for the cement industry is said by FLSmidth to remain impacted by overcapacity and slow recovery. The Group expects its Cement business revenue to decline further in 2021, and initiatives to reshape the Cement business are ongoing. FLSmidth does not expect its Cement business to be EBITA positive in 2021 due to continued reshaping costs and low capacity utilisation in the service business until the pandemic eases.
