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FLSmidth Annual Report 2021: Solid performance despite challenging market conditions

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World Cement,

Order intake grew 5% organically in 2021, as a result of an easing pandemic impact and improved site access compared to 2020. Including currency effects, order intake increased by 4% to DKK 19 233 m. Mining and Cement contributed equally to the order intake growth. Service order intake increased by 14%, whereas capital orders decreased by 7%.

FLSmidth Group CEO, Mikko Keto, commented: “FLSmidth delivered a solid performance in 2021. Despite the challenges presented by the pandemic and the global supply chain constraints, order intake, revenue and EBITA increased substantially over 2020 and cash flow performance was strong. Key drivers behind the 2021 performance are continued good momentum in Mining, and improvements in our Cement business. Further, we have announced one of the biggest acquisitions in our history, namely the acquisition of thyssenkrupp’s Mining business. This will position FLSmidth as one of the strongest suppliers to the mining industry with complete pit-to-plant flowsheet solutions driving sustainable productivity.”

Financial performance

By leveraging our flexible supply chain coupled with easing pandemic restrictions during the second half of 2021, full year 2021 organic revenue increased by 8%. Including currency effects, Group revenue increased by 7% to DKK 17 581 m, primarily driven by the Capital business.

Gross profit increased by 8% and EBITA increased by 34% as a result of higher revenue and operating leverage. The EBITA margin improved to 5.9% with improvements in both Mining and Cement. Adjusted for the costs related to the acquisition of thyssenkrupp’s Mining business the EBITA margin was 6.5%. We have secured six large orders in 2021 and a book-to-bill of 109% for the year. Cash remains a core focus, and with a net working capital ratio of 6.0% at end 2021, we delivered a cash flow from operating activities of DKK 1.4 billion in 2021.

Highlights in Q4 2021

  • Order intake increased by 6% organically.
  • Revenue of DKK 5.1 bn driven 19% organic revenue growth.
  • EBITA increased by 44% and corresponding EBITA margin increased to 6.6%.
  • Strong cash flow and improvement in net working capital.

Group order intake increased by 8% to DKK 5084 m, which is the highest fourth quarter level in several years. The growth in order intake was entirely driven by Mining, which increased by 35% organically and represented 71% of total order intake. Group service orders increased 20% driven by the positive sentiment in the mining industry.

Group revenue increased 19% organically, attributable to both Mining and Cement as well as both capital and service business. Including currency effects, revenue increased by 21% to DKK 5 135 m.

Gross profit increased as a result of the higher level of revenue. Gross margin declined due to an increased share of capital revenue. Group EBITA increased by 44% compared to Q4 2020. The corresponding EBITA margin increased to 6.6%, the highest quarterly EBITA margin since 2019. Adjusted for the costs related to the acquisition of thyssenkrupp’s Mining business the EBITA margin was 7.3%.

The Q4 2021 and full year 2021 results include costs related to the thyssenkrupp Mining business acquisition of DKK 37 m and DKK 107 m, respectively. Subject to regulatory approval, closing of the transaction is still expected in the second half of 2022.

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