FLSmidth shares fall 2% as Q2 revenue drops despite in-line results

Published 20/08/2025, 08:24
© Reuters.

Investing.com -- Shares of FLSmidth (CSE:FLS) fell more than 2% on Wednesday after the Danish mining equipment maker posted second-quarter results that matched its earlier guidance but showed a sharp revenue decline and continued losses in its Products division.

“The degree to which Product is loss-making we believe will have surprised the market,” said analysts at Jefferies in a note. 

The company reported an order intake of DKK 3.5 billion in the quarter, up 3% from a year earlier. Revenue came in at DKK 3.4 billion, down 12% from the same period in 2024 and 8% below consensus expectations.

The group posted an EBITA margin of 15.2%, resulting in adjusted EBITA of DKK 513 million, which was 1% above consensus. Operating cash flow was DKK 527 million, leaving net debt at 0.6 times EBITDA.

FLSmidth reorganized its reporting following the sale of its cement and air pollution control businesses, introducing three divisions: Services, Products and Pumps, Cyclones & Valves (PC&V).

In Services, order intake was DKK 2.1 billion, down 8% from a year earlier, with revenue of DKK 2.1 billion, a 3% decline. 

The EBITA margin was 19.6%, down 30 basis points. The Products division recorded orders of DKK 681 million, up 44% from a year earlier, while revenue fell 43% to DKK 607 million. 

“Getting Products to break-even would add c200bps of EBITA margin, and thus could provide the underpin for FLS moving towards a c17% Group Margin,” Jefferies said.

The EBITA margin for Products was negative at 9.7%, down 120 basis points. PC&V orders rose 7% to DKK 768 million, with revenue of DKK 708 million, up 17%, and an EBITA margin of 23.7%, down 30 basis points.

The company confirmed its full-year 2025 guidance, keeping the outlook unchanged from its Aug. 14 update.

Revenue is expected to be between DKK 14.5 billion and DKK 15 billion, with adjusted EBITA margins in the range of 15% to 15.5%.

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