Annual Report (ESEF) • May 5, 2021
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Download Source FileUntitled INTERIM REPORT Q1 2021 1 January – 31 March 2021 (Company announcement no. 6) FLSmidth & Co. A/S Vigerslev Allé 77 DK-2500 Valby CVR No. 58180912 WE DISCOVER POTENTIAL FLSmidth Interim Report Q1 2021 2 Management Review Management Review Financial Statements Notes Statements CONTENTS Towards zero emissions in mining and cement Read more on page 5 FLSmidth Interim Report Q1 2021 3 Management Review Highlights Q1 2021 Solid order intake, however below the ex- ceptionally strong Q1 2020. Order intake increased 6% compared to Q4 2020 and service orders increased 19% As expected, revenue decreased 13% or- ganically, comprising a 7% decrease in Mining and a 23% decline in Cement com- pared to Q1 2020 EBITA margin increased slightly to 5.1%, positively impacted by a higher share from service Positive effects from implemented busi- ness improvement activities, but contin- ued costs of reshaping Cement, i.e. simpli- fying the business, adjusting the cost structure and repositioning Cement to benefit from the green transition Free cash flow increased to DKK 234m from DKK -144m in Q1 2020, driven by the fourth consecutive quarter of decreased net working capital Net debt to EBITDA ratio improved from 1.6x at the end of 2020 to 1.4x in Q1 2021 We recently received approval for our de- carbonisation targets from the Science Based Targets initiatives Mining Mining order intake decreased 27% or- ganically compared to an exceptionally strong Q1 2020, but increased 37% com- pared to Q4 2020. Despite lower revenue and gross profit in the quarter, EBITA increased by 6% in Q1 2021 as a result of cost efficiency im- provements. The corresponding EBITA margin increased to 8.8% from 7.3% in Q1 2020. The negotiations concerning an acquisi- tion of ThyssenKrupp's mining business are progressing at a non-binding stage. Accordingly, there can be no assurances as to whether and when a transaction will transpire. Cement The organic Cement order intake in- creased by 14% compared to Q1 2020. Revenue decreased by 23% organically, due to the continued impact of the pan- demic and a lower backlog entering the year. Consequently, the EBITA margin was -1.7% compared to 1.8% in Q1 2020. Business reshaping activities to improve profitability in Cement are ongoing. Guidance 2021 FLSmidth maintains its guidance for group revenue of DKK 15.5-17.0bn and a group EBITA margin of 5-6%. The guidance is based on expected different develop- ments in the two individual businesses, Mining and Cement, and continued impact from the pandemic in Q2 2021, where business activity is expected to remain low. In parts of the world, the pandemic impact is likely to last beyond H1 2021. The outlook for the mining industry re- mains positive. For 2021, the Mining busi- ness revenue and EBITA are expected to grow in the second half of the year. EBITA margin for Mining is expected to be high- single digit for the full-year. The outlook for the cement industry re- mains impacted by overcapacity and slow recovery. The Cement business revenue is expected to decline further in 2021, and initiatives to reshape the Cement business are ongoing. The Cement business is not expected to be EBITA positive in 2021 due to continued Cement reshaping costs and low capacity utilisation in the service business until the pandemic eases. 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 or- ders 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 custom- ers sustain production and improve operational efficiency. There is a strong correlation between the pandemic and business activ- ity. The global vaccination programmes provide hope of easing re- strictions and a gradual improvement in business sentiment in the sec- ond half of the year. Surging infection rates in parts of the world could however slow down the pace of recovery. - Thomas Schulz, Group CEO HIGHLIGHTS Guidance 2021 Q1 2021 Guidance Highlights FLSmidth Interim Report Q1 2021 4 Management Review FINANCIAL HIGHLIGHTS Order intake DKKm Revenue DKKm EBITA & EBITA margin DKKm - % Cash flow from operating activities DKKm 285 DKKm 320 GROUP 4,985 24% 3,713 18% 190 5.1% 17% Earnings per share DKK 1.0 50% Net working capital ratio 10.7% 2.8%-point NIBD/EBITDA 1.4x unchanged Order intake DKKm Revenue DKKm EBITA & EBITA margin DKKm - % Revenue split by service & capital % MINING 3,585 31% 2,412 12% 213 8.8% 6% Order intake DKKm Revenue DKKm EBITA & EBITA margin DKKm - % Revenue split by service & capital % CEMENT 1,400 7% 1,301 27% (23) -1.7% 172% 6,526 4,985 Q1 2020 Q1 2021 4,525 3,713 Q1 2020 Q1 2021 228 190 Q1 2020 Q1 2021 5,214 3,585 Q1 2020 Q1 2021 2,735 2,412 Q1 2020 Q1 2021 201 213 Q1 2020 Q1 2021 67% (Q1 2020: 61%) 33% (Q1 2020: 39%) Service Capital 1,312 1,400 Q1 2020 Q1 2021 1,790 1,301 Q1 2020 Q1 2021 32 -23 Q1 2020 Q1 2021 61% (Q1 2020: 52%) 39% (Q1 2020: 48%) Service Capital FLSmidth Interim Report Q1 2021 5 Management Review MissionZero developments Through our sustainability pro- gramme MissionZero, we de- velop and deliver solutions to en- able our customers to operate with zero emissions by 2030. During Q1 we launched a number of upgrades to our flagship technologies and received sev- eral sustainability-related orders. To help drive progress, sustainability-related KPIs have been long-term incentive plan and embedded in re- gional sales targets. Digital solutions to accelerate energy savings Digitalisation presents strong opportunities for the cement industry to deliver energy savings, higher fuel substitution rates and maintenance planning. In a new contract signed earlier this year, the Chinese construction company CBMI Construction Co. ordered the supply and engineering of three complete control ECS software systems for two existing and one new cement line at Kirene in Senegal. With a complete and integrated control system across all three lines, CBMI Construction Co. has now established the digital foundation for its own customers to make data-driven decisions on process optimisation. Upgrading our flagship technologies Driven by our MissionZero R&D focus, we re- cently launched a significant improvement AFP2525 Automatic Filter Press. By employing a filter press to remove the water from tailings waste, the AFP2525 eliminates the need for wet tailings dams, while the reuse of process water minimises environmental risks and supports the social license to operate of miners. With in- creased water recovery rates and reduced downtime it meets the growing customer de- mand for dewatering equipment that reduces the need for fresh water intake and cuts costs for the mine site. Operational sustainability We have recently received approval for our de- carbonisation targets by the Science Based Tar- gets initiative. These targets commit us to being carbon neutral in our own operations by 2030 and to improving our economic intensity by 7% per annum by selling more sustainability-related solutions to our customers. The approval of the targets provides us with a strong framework to measure the success of our MissionZero pro- gramme and builds further credibility towards key stakeholders, customers and investors. In April, FLSmidth joined the Copper Mark, an in- ternational framework established to demon- the United Nations Sustainable Development Goals (SDGs). By joining the Copper Mark, we further advance our MissionZero ambition by supporting our mining customers in their ambi- tions to minimise their environmental footprint by 2030. SUSTAINABILITY HIGHLIGHTS Safety (TRIR) Total Recordable Injury Rate/ million working hours Women managers % 1.0 Target: zero harm (10% y-o-y reduction until 2030) 13.3 2021 Target: 14.3% Strong safety performance in Q1 following continuous im- provement plans and top management focus. Numbers continue to be impacted by COVID-19 pandemic. Continued progress on gender diversity in Q1 in line with long-term target. Improvements driven by regional actions focused on diversity in recruitment and employer attrac- tiveness. Water withdrawal m 3 Greenhouse gas emissions (CO 2 emissions) tonnes 40,069 2021 Target: 187,479 10,267 2021 Target: 38,685 Solid progress against our 2021 target driven by local im- provement initiatives. - greenhouse gas (GHG) scope 2 emissions rather than previously used -- based reporting will more accurately reflect the impact from our targeted initiatives to reduce scope 2 GHG emis- sions by purchasing more renewable electricity. 1.0 1.0 2020 Q1 2021 13.1% 13.3% 2020 Q1 2021 197,346 40,069 2020 Q1 2021 41,155 10,267 2020 Q1 2021 FLSmidth Interim Report Q1 2021 6 Management Review KEY FIGURES DKKm Q1 2021 Q1 2020 2020 INCOME STATEMENT ORDERS EARNING RATIOS CASH FLOW BALANCE SHEET DKKm Q1 2021 Q1 2020 2020 FINANCIAL RATIOS SHARE RATIOS SUSTAINABILITY KEY FIGURES Use of alternative performance measures FLSmidth Interim Report Q1 2021 7 Management Review GROWTH Group order intake increased for the third consecutive quarter and increased 6% sequentially driven by Mining. Group revenue de- clined 13% organically year-on- year, attributable to both Mining and Cement. Order intake Order intake in Q1 decreased 24% to DKK 4,985m (Q1 2020: DKK 6,526m) and declined 19% organically, due to a strong comparison quarter. Q1 2020 included three large Mining or- ders with a combined value of around DKK 2.4bn, whereas Q1 2021 included one large Min- ing order valued at approximately DKK 200m. Order intake increased for the third consecutive quarter, and compared to Q4 2020, order intake increased 6% driven by Mining, and service or- ders increased 19%, accounting for 55% of the to- tal order intake in Q1 2021. Order backlog and maturity The order backlog increased 9% on the previous quarter to DKK 16,251m (Q4 2020: DKK 14,874m), based on a book-to-bill of 134% in Q1 2021, partly offset by the termination of an Indian coal order of around DKK 160m. The project has been cial situation. 53% of the backlog is expected to be converted to revenue in 2021, 36% in 2022, and 11% in 2023 and beyond. Backlog maturity Mining Cement FLSmidth Group Revenue Following a slow start to the year, revenue did pick up in March. Still, revenue declined 18% to DKK 3,713m in Q1 2021 (Q1 2020: DKK 4,525m) and 13% organically, comprising a 7% decrease in Mining and a 23% decline in Cement. The de- cline in revenue was due to a low Cement back- log entering the year and restricted access to customer sites because of the pandemic. The pandemic impact on revenue in Q1 2020 was very limited. Service revenue accounted for 65% of the total revenue in the quarter (Q1 2020: 58%). With a continued impact from the pandemic and surging infection rates in parts of the world, the activity level is expected to remain low in Q2 2021. As the pandemic eases, revenue should start to grow. There is, however, an average time lag from order intake to revenue of around one year, depending on the business mix. FLSmidth Interim Report Q1 2021 QUARTERLY FINANCIAL PERFORMANCE Order intake DKKm 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Mining Cement Growth in order intake in Q1 2021 (vs. Q1 2020) Mining Cement FLSmidth Group Total growth -31% 7% -24% Growth in revenue in Q1 2021 (vs. Q1 2020) Mining Cement FLSmidth Group Total growth -12% -27% -18% Group – continued activities (DKKm) Q1 2021 Q1 2020 Change (%) Order intake (gross) 4,985 6,526 -24% Order backlog 16,251 15,591 4% Revenue 3,713 4,525 -18% Gross profit 935 1,047 -11% SG&A cost (648) (728) -11% EBITA 190 228 -17% EBIT 101 146 -31% FLSmidth Interim Report Q1 2021 8 Management Review PROFIT Gross margin improved 2.1%-points due to business improvement ac- tivities and a higher share from ser- vice during the quarter. EBITA de- clined by 17% due to lower revenue entirely attributable to Ce- ment. Owing to a 1.5%-points higher EBITA margin year-on-year in Mining, the Group EBITA margin increased slightly to 5.1%. Gross profit and margin Gross profit declined 11% to DKK 935m (Q1 2020: DKK 1,047m), explained by the decline in reve- nue. Gross margin improved to 25.2% (Q1 2020: 23.1%) due to the successful implementation of business improvement activities and a higher share from service in both Mining and Cement. In Q1 2021, total research and development costs (R&D) amounted to DKK 52m (Q1 2020: DKK 66m), representing 1.4% of revenue (Q1 2020: 1.5%). R&D costs (DKKm) Q1 2021 Q1 2020 R&D costs in Q1 related especially to new sus- tainable cement technologies, mining products and digital solutions. In addition to the reported R&D, products and solutions are being devel- oped on-site in cooperation with customers as part of the ordinary business. SG&A costs Sales, general and administrative costs (SG&A) and other operating items decreased 11% to DKK 648m (Q1 2020: DKK 728m), due to savings from business improvement activities and low travel costs. Despite the reduction in SG&A, costs as a percentage of revenue increased to 17.5% (Q1 2020: 16.1%). SG&A costs are expected to in- crease somewhat in the coming quarters as the activity level expectedly picks up. EBITA and EBITA margin EBITA decreased by 17% to DKK 190m compared to the same quarter last year (Q1 2020: DKK 228m) as a result of the decline in revenue which could not be fully offset by the higher gross mar- gin and lower SG&A costs. The decline in EBITA was attributable to Cement, whereas Mining EBITA increased by 6% compared to Q1 2020. Owing to a high share from service and a 1.5%- points higher EBITA margin in Mining, the Group EBITA margin increased to 5.1% (Q1 2020: 5.0%). Cement was loss-making due to the sharp reve- nue decline and costs of reshaping the Cement business. Amortisation of intangible assets amounted to DKK 89m (Q1 2020: DKK 82m). The effect of pur- chase price allocations amounted to DKK 22m (Q1 2020: DKK 24m) and other amortisation DKK 67m (Q1 2020: DKK 58m). Earnings before interest and tax (EBIT) de- creased 31% to DKK 101m (Q1 2020: DKK 146m), mainly due to the lower revenue as explained above. Financial items Net financial items amounted to DKK -10m (Q1 2020: DKK 3m), of which foreign exchange and fair value adjustments amounted to DKK 4m (Q1 2020: DKK 22m) and net interest amounted to DKK -14m (Q1 2020: DKK -19m). Tax Tax for Q1 2021 totalled DKK -35m (Q1 2020: DKK -44m), corresponding to an effective tax rate of 38% (Q1 2020: 29%). Reduced tax credits es- pecially in Denmark, and an increase in the profit before tax derived from countries with a higher base corporate tax rate caused the increase in the effective tax rate in Q1. Profit for the period Mainly due to the lower EBIT, profit for the period decreased to DKK 54m (Q1 2020: DKK 101m), equivalent to DKK 1.0 per share (diluted) (Q1 2020: DKK 2.0). Return on capital employed ROCE decreased to 4.8% (Q1 2020: 10.2%) as a Employees The number of employees decreased by 450 to 10,189 at the end of Q1 2021 (end of 2020: 10,639). The decrease related to a phase-out of a Cement operations & maintenance contract and ongoing activities to reshape the Cement busi- ness, including a workforce reduction in coun- tries where local labour restrictions related to COVID-19 have prohibited us from right-sizing the organisation earlier. Backlog DKKm Revenue & EBITA margin DKKm EBITA% EBITA DKKm 0 3,000 6,000 9,000 12,000 15,000 18,000 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Mining Cement 0% 2% 4% 6% 8% 10% 12% 14% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Revenue EBITA margin (100) 0 100 200 300 400 500 600 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Mining Cement FLSmidth Interim Report Q1 2021 9 Management Review CAPITAL Free cash flow increased to DKK 234m. The net debt to EBITDA ra- tio decreased from 1.6 at the end of 2020 to 1.4 in Q1. Net working capital Net working capital has declined DKK 1.1bn since Q1 2020 and decreased to DKK 1,678m at the end of Q1 2021 (end of Q4 2020: DKK 1,752m). The reduction related mainly to milestone pay- ments on mining projects and a decline in trade receivables, partly offset by an increase in trade payables and inventories. The net working capi- tal ratio was unchanged compared to Q4 2020 at 10.7% of 12-months trailing revenue. Utilisation of supply chain financing decreased in Q1 driven by a lower level of activity and, in particular, by a lower share of Cement business relative to Mining. Utilisation of the programme is expected to increase in Q2 2021. Cash flow from operating activities Cash flow from operating activities (CFFO) in- creased to DKK 285m (Q1 2020: DKK -35m). The main positive contributor to CFFO was the net working capital inflow of DKK 149m as compared to a net working capital outflow of DKK 197m in Q1 2020. Cash flow from operating activities related to dis- continued activities amounted to DKK -9m in Q1 2021 (Q1 2020: DKK 1m). Cash flow from investing activities Cash flow from investing activities amounted to DKK -51m (Q1 2020: DKK -109m). The lower in- vestment level year-on-year related primarily to the acquisition of a service centre in North Amer- ica in Q1 2020, amounting to DKK -41m. Free cash flow Free cash flow (cash flow from operating and in- vesting activities) amounted to DKK 234m in Q1 2021 (Q1 2020: DKK -144m). Dividend At the Annual General Meeting in March, it was approved to pay a dividend of DKK 2 per share corresponding to a dividend yield of 0.9% and a pay-out ratio of 50%, in line with our tar- geted pay-out ratio. A total dividend of DKK 83m was paid in Q1 2021. Net interest-bearing debt Due to the positive free cash flow, net interest- bearing debt (NIBD) decreased to DKK 1,577m (end of Q4 2020: DKK 1,808m), and financial gearing decreased to 1.4x (end of 2020: 1.6x). Gearing remains below our capital structure tar- get of maximum two times NIBD to EBITDA through-the-cycle. Financial position By the end of Q1 2021, FLSmidth had DKK 6.8bn of available committed credit facilities of which DKK 4.4bn was undrawn. The committed credit facilities have a weighted average time to ma- turity of 4.2 years. DKK 1.6bn of credit facilities will mature in 2023 and the majority, DKK 5.0bn, will mature in 2026. The remaining DKK 0.2bn matures in later years. Equity ratio Equity at the end of Q1 2021 increased to DKK 8,451m (end of 2020: DKK 8,130m) based on the profit for the period and due in particular to a positive effect from currency adjustments regard- ing translation of entities in the quarter. The eq- uity ratio was 40.2% (end of 2020: 39.7%), above our capital structure target of minimum 30% through-the-cycle. Acquisitions and divestments On 15 January 2021, FLSmidth announced that it was in negotiations with ThyssenKrupp concern- ing an acquisition of ThyssenKrupp's mining busi- ness. The negotiations are progressing at a non- binding stage. Accordingly, there can be no as- surances as to whether or when a transaction will transpire. Cash flow DKKm Net interest-bearing debt DKKm Net working capital DKKm NWC% (100) 0 100 200 300 400 500 600 700 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Cash flow from operating activities 0 500 1,000 1,500 2,000 2,500 3,000 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Net interest bearing debt (NIBD) 0.0% 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 0 500 1,000 1,500 2,000 2,500 3,000 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Net working capital Net working capital ratio, end FLSmidth Interim Report Q1 2021 10 Management Review Overall, the pandemic is disrupting the mining industry to a lesser degree than many other industries. During the first quarter of the year, copper prices increased to their highest level in a decade, driven by expectations of a post- pandemic economic recovery and increased demand for the commodities that are required to enable the green transition. Miners are generating good cash flows and they are well capitalised to invest, especially given the low level of capex spent in recent years. Although we have seen improved site access for local service teams in some regions, travel restrictions and limited site access continue to impact demand for on-site technical services. Many customers are still enforcing safety protocols and restricting site access to external service providers in order to protect employees and safeguard production, which impacts their equipment and service spend. Refurbishment and maintenance has been postponed, which is expected to translate into new opportunities when the market normalises. The timing of converting these opportunities to orders remains uncertain and with infection cases still surging in many parts of the world, it is difficult to predict the shape of the recovery curve. We have seen some recovery in demand from our customers in North America and high production rates in other parts of the world given near record pricing for some commodities, such as in Australia where iron ore and gold production remain strong. However, lockdowns and closed borders in many South American countries continue to reduce activity, where high infection rates have curbed mine activity and development projects. India, where FLSmidth has more than 20% of its employees, is currently fighting record high infection rates which have overwhelmed the countryAcross most regions, it is expected that the pandemic will continue to impact the industry in the first half of 2021, and in parts of the world, the pandemic impact is likely to last beyond H1 2021. Still, we have a very healthy pipeline of both large and small opportunities, and the outlook for investments in mining remains positive. MINING MARKET DEVELOPMENTS Lockdowns and restricted site access continue to limit activity in many regions, but the outlook for the mining industry is positive with strong commodity prices and good industry fundamentals. In the longer term, the switch to green energy will require a massive increase in infrastructure and the mining industry will need to scale up investments in copper, battery metals and other minerals to meet this growing demand. FLSmidth Interim Report Q1 2021 Mining order intake split per Region % Mining order intake split by commodity % 24% 27% 12% 20% 3% 14% North America South America Europe, North Africa, Russia Sub-Saharan Africa, Middle East & South Asia Asia Australia 31% 14% 14% 1% 17% 23% Copper Gold Coal Fertilizer Iron ore Other FLSmidth Interim Report Q1 2021 11 Management Review Q1 2021 Mining order intake decreased 27% organically compared to Q1 2020. Including currency effects, the order intake in Q1 2021 decreased by 31% to DKK 3,585m (Q1 2020: DKK 5,214m), comprising a 6% decrease in service orders and a 48% de- crease in capital orders. The decrease in capital orders was due to an exceptionally strong capital order intake in the comparative quarter, which in- cluded three large orders with a combined value of around DKK 2.4bn. Q1 2021 included one large order valued at approximately DKK 200m. Ad- justed for these large orders, total Mining order intake increased by 20% compared to Q1 2020. In the quarter, service orders and capital orders represented 54% and 46% of Mining order intake respectively. Compared to Q4 2020, Mining order intake in- creased 37% related to the timing of medium- sized capital orders and improved site access for local service teams. Travel restrictions continue to limit on-site technical services and projects, and new lockdowns are being imposed in parts of the world due to surging COVID-19 infection rates. Revenue decreased by 7% organically and by 12% including the effects of currency, to DKK 2,412m in Q1 2021 (Q1 2020: DKK 2,735m). Capi- tal revenue decreased by 24% as a result of the lumpiness of the capital business with fluctuating revenue recognition, and due to continued re- stricted site access which has impacted progress on projects. Service revenue decreased by 4%, also due to restricted access to mine sites. Ser- vice accounted for 67% of Mining revenue in Q1 2021 (Q1 2020: 61%). Gross profit, before allocation of shared cost, de- creased by 5% to DKK 648m (Q1 2020: DKK 680m). The corresponding gross margin in- creased to 26.9% (Q1 2020: 24.9%), due to a larger share of service business with higher mar- gins as well as a positive effect from the business improvement programme. Despite the lower revenue and gross profit in the quarter, EBITA increased by 6% to DKK 213m (Q1 2020: DKK 201m) as a result of cost efficiencies. The corresponding EBITA margin increased to 8.8% from 7.3% in Q1 2020. MINING FINANCIAL PERFORMANCE Growth in order intake in Q1 2021 (vs. Q1 2020) Order intake Revenue Total growth -31% -12% Service and capital order intake Q1 2021 % Revenue and EBITA margin DKKm EBITA % 54% 46% Service Capital 0% 2% 4% 6% 8% 10% 12% 14% 16% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Service revenue Capital revenue EBITA margin Mining (DKKm) Q1 2021 Q1 2020 Change (%) Order intake (gross) 3,585 5,214 -31% Order backlog 10,275 9,621 7% Revenue 2,412 2,735 -12% Gross profit before allocation of shared cost 648 680 -5% EBITA before allocation of shared cost 403 414 -3% EBITA 213 201 6% EBIT 152 143 6% FLSmidth Interim Report Q1 2021 12 Management Review While we have seen a few regions with improved site access for local service teams, the cement market as a whole continues to be impacted by the pandemic. Plants are running at reduced capacity and remain difficult to access due to restrictions and preventative measurements taken by authorities and plant operators, which has affected service activity and curbed investments. Cement consumption continues to be impacted by the high market uncertainty and most large investments have been suspended pending an improvement in the business outlook. Given the low activity level, our efforts have been refocused on sustainability and digitalisation in order to be well positioned for future infrastructure projects that are expected to result from the government stimulus programmes that are planned or underway in various countries. However, macroeconomic conditions currently vary between countries and the timing and extent of an overall rebound in the cement market remain uncertain. In North America, the successful vaccination programme and improvement in business sentiment have helped remove some of the uncertainty that has held back investments, and we have started to see pockets of increased interest in spare parts as well as upgrades and retrofits. On the other hand, market activity in Africa and the Middle East remains hampered by lockdowns and high infection rates continue to reduce activity at cement plants across South America. While market activity improved in India during Q1, the country imposed another national lockdown in April which is likely to hit business sentiment and investment levels in the second quarter. At the same time, most of our cement customers in Europe, North-Africa and Russia will need to see improved cash generation before they ramp up investments. CEMENT MARKET DEVELOPMENTS The cement industry remains impacted by overcapacity, a situation which has been accelerated by the pandemic. Recovery is expected mid-term as large economic stimulus programmes, combined with an increasing focus on lower-carbon cement, are likely to create good opportunities.The timing and extent of an overall rebound in the cement market, however, remain uncertain. FLSmidth Interim Report Q1 2021 Cement order intake split per Region % Cement share of Group order intake % 23% 6% 30% 21% 19% 1% North America South America Europe, North Africa, Russia Sub-Saharan Africa, Middle East & South Asia Asia Australia 28% Cement FLSmidth Interim Report Q1 2021 13 Management Review Q1 2021 The organic order intake in Q1 2021 increased by 14% compared to Q1 2020. Including currency ef- fects, the order intake in Q1 2021 increased by 7% to DKK 1,400m (Q1 2020: DKK 1,312m), com- prising 5% decrease in service orders and a 29% increase in capital orders. In the quarter, service orders and capital orders represented 57% and 43% of cement order intake, respectively. The improvement in capital order intake was based on a couple of sustainability related me- dium-sized product orders. Compared to Q4 2020, Cement service order intake increased slightly due to improved site access for local ser- vice teams in parts of the world. In other regions new lockdowns are being imposed. Cross-border travel restrictions and quarantine rules remain a key challenge for our global service technicians. In Q1 2021, revenue decreased by 27% to DKK 1,301m due to the continued impact of the pan- demic and a lower backlog entering the year. Ce- ment service revenue decreased by 15% while capital revenue declined by 41%. Currency ef- fects had a 4% negative impact on revenue, which meant the organic decrease in revenue was 23%. Service accounted for 61% of Cement revenue in Q1 2021 (Q1 2020: 52%). Gross profit, before allocation of shared cost, de- creased by 22% to DKK 306m (Q1 2020: DKK 391m), but the gross margin increased to 23.5% (Q1 2020: 21.8%) due to a higher share from ser- vice. Cement profitability is, however, still af- fected by the large decline in revenue, and in- creased costs related to the pandemic and ongoing reshaping. Consequently, EBITA amounted to DKK -23m (Q1 2020: DKK 32m) and the corresponding EBITA margin was -1.7% (Q1 2020: 1.8%). CEMENT FINANCIAL PERFORMANCE Growth in order intake in Q1 2021 (vs. Q1 2020) Order intake Revenue Total growth 7% -27% Service and capital order intake Q1 2021 % Revenue and EBITA margin DKKm EBITA % 57% 43% Service Capital -7% -5% -3% -1% 1% 3% 5% 7% 9% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Service revenue Capital revenue EBITA margin Cement (DKKm) Q1 2021 Q1 2020 Change (%) Order intake (gross) 1,400 1,312 7% Order backlog 5,976 5,970 0% Revenue 1,301 1,790 -27% Gross profit before allocation of shared cost 306 391 -22% EBITA before allocation of shared cost 107 197 -46% EBITA (23) 32 -172% EBIT (51) 8 -738% FLSmidth Interim Report Q1 2021 14 Management Review QUARTERLY KEY FIGURES DKKm 2019 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 INCOME STATEMENT Gross profit 1,081 1,315 1,126 1,327 1,047 912 884 1,022 935 EBITDA before special non-recurring items 395 574 459 580 319 223 255 337 287 EBITA 312 487 377 487 228 131 177 235 190 EBIT 218 381 294 393 146 46 91 145 101 EBT 215 349 284 323 150 (7) 89 149 92 Profit/loss on continuing activities for the period 145 234 190 229 106 (12) 48 84 57 Profit/loss for the period 136 223 190 227 101 (17) 43 78 54 Gross margin 24.5% 24.0% 23.8% 22.0% 23.1% 23.7% 23.1% 24.1% 25.2% EBITDA margin before special non-recurring items 8.9% 10.5% 9.7% 9.6% 7.0% 5.8% 6.7% 8.0% 7.7% EBITA margin 7.1% 8.9% 8.0% 8.1% 5.0% 3.4% 4.6% 5.5% 5.1% EBIT margin 4.9% 6.9% 6.2% 6.5% 3.2% 1.2% 2.4% 3.4% 2.7% FLSmidth Interim Report Q1 2021 15 Management Review DKKm 2019 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 SEGMENT REPORTING Mining Gross margin before allocation of shared costs 26.7% 26.1% 25.2% 23.4% 24.9% 26.4% 25.0% 25.1% 26.9% EBITA margin before allocation of shared costs 17.1% 16.8% 16.3% 14.9% 15.1% 16.0% 16.8% 16.4% 16.7% EBITA margin 9.5% 10.4% 9.2% 9.1% 7.3% 7.8% 9.0% 9.3% 8.8% EBIT margin 7.0% 8.5% 6.9% 7.2% 5.2% 5.4% 6.8% 7.2% 6.3% Cement Gross margin before allocation of shared costs 22.2% 22.0% 22.8% 21.9% 21.8% 21.0% 19.5% 23.3% 23.5% EBITA margin before allocation of shared costs 12.8% 14.1% 13.8% 13.3% 11.0% 6.9% 6.7% 9.7% 8.2% EBITA margin 3.7% 6.3% 5.8% 6.6% 1.8% -4.9% -4.8% -1.9% -1.7% EBIT margin 2.2% 4.4% 4.9% 5.5% 0.4% -6.7% -7.1% -4.1% -3.9% FLSmidth Interim Report Q1 2021 16 Financial Statements Notes DKKm Q1 2021 Q1 2020 3,713 4,525 (2,778) (3,478) Gross profit 935 1,047 (315) (378) (338) (362) 5 12 EBITDA before special non-recurring items 287 319 (15) 0 (82) (91) EBITA 190 228 (89) (82) EBIT 101 146 1 1 298 439 (308) (436) EBT 92 150 (35) (44) Profit for the period, continuing activities 57 106 (3) (5) Profit for the period 54 101 53 98 1 3 54 101 1.0 2.0 1.0 2.0 1.1 2.1 1.1 2.1 Notes DKKm Q1 2021 Q1 2020 Profit for the period 54 101 Items that will not be reclassified to profit or loss: 7 0 Items that are or may be reclassified subsequently to profit or loss: 358 (336) (13) (31) (8) (1) 2 0 Other comprehensive income for the period after tax 346 (368) Comprehensive income for the period 400 (267) 399 (269) 1 2 400 (267) INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME Financial performance FLSmidth Interim Report Q1 2021 17 Financial Statements CASH FLOW STATEMENT Notes DKKm Q1 2021 Q1 2020 287 319 (3) (2) EBITDA 284 317 (14) 10 Adjusted EBITDA 270 327 (13) (58) 149 (197) Cash flow from operating activities before financial items and tax 406 72 (19) (18) (102) (89) Cash flow from operating activities 285 (35) 0 (41) (32) (35) (19) (32) (3) (3) 2 0 1 2 Cash flow from investing activities (51) (109) (83) 0 1 0 (33) (30) 129 23 Cash flow from financing activities 14 (7) Change in cash and cash equivalents 248 (151) 976 1,001 32 (39) Cash and cash equivalents at 31 March 1,256 811 The cash flow statement cannot be inferred from the published financial information only Free cash flow DKKm Q1 2021 Q1 2020 234 (144) 232 (103) Cash and cash equivalents at beginning of period DKKm Q1 2021 Q1 2020 946 1,001 30 0 Cash and cash equivalents at beginning of period 976 1,001 FLSmidth Interim Report Q1 2021 18 Financial Statements Notes DKKm 31/03 2021 31/12 2020 31/03 2020 ASSETS 4,315 4,194 4,309 857 875 945 458 466 564 157 172 92 210 234 235 332 299 343 Intangible assets 6,329 6,240 6,488 1,475 1,414 1,524 366 369 409 84 89 96 126 137 90 Property, plant and equipment 2,051 2,009 2,119 Lease assets 293 312 282 1,272 1,248 1,149 166 159 147 47 43 44 Other non-current assets 1,485 1,450 1,340 Non-current assets 10,158 10,011 10,229 2,476 2,368 2,726 3,282 3,453 4,452 2,276 2,175 2,440 485 333 540 308 178 193 783 868 914 1,256 946 811 Current assets 10,866 10,321 12,076 0 124 0 Total assets 21,024 20,456 22,305 Notes DKKm 31/03 2021 31/12 2020 31/03 2020 EQUITY AND LIABILITIES 1,025 1,025 1,025 (773) (1,131) (635) (25) (4) (60) 8,229 8,246 8,191 Shareholders in FLSmidth & Co. A/S 8,456 8,136 8,521 (5) (6) 16 Equity 8,451 8,130 8,537 211 200 234 377 375 362 411 426 455 201 209 182 2,498 2,250 3,095 272 240 192 141 139 0 129 125 100 Non-current liabilities 4,240 3,964 4,620 3 3 3 612 589 489 102 113 108 33 183 91 1,443 1,026 1,301 1,833 1,834 1,595 2,800 3,055 3,934 219 162 340 1,288 1,306 1,287 Current liabilities 8,333 8,271 9,148 0 91 0 Total liabilities 12,573 12,326 13,768 Total equity and liabilities 21,024 20,456 22,305 BALANCE SHEET FLSmidth Interim Report Q1 2021 19 Financial Statements EQUITY STATEMENT Q1 2021 Q1 2020 DKKm Share capital Curren- cy adjust- ments Cash flow hedging Retained earnings Share-holders in FLSmidth & Co A/S Minority interests Total Share capital Curren- cy adjust- ments Cash flow hedging Retained earnings Share-holders in FLSmidth & Co A/S Minority interests Total Equity at 1 January 1,025 (1,131) (4) 8,246 8,136 (6) 8,130 1,025 (300) (28) 8,082 8,779 14 8,793 Comprehensive income for the period 53 53 1 54 98 98 3 101 Other comprehensive income 7 7 7 0 0 0 358 358 358 (335) (335) (1) (336) (13) (13) (13) (31) (31) (31) (8) (8) (8) (1) (1) (1) 2 2 2 0 0 0 Other comprehensive income total 0 358 (21) 9 346 0 346 0 (335) (32) 0 (367) (1) (368) Comprehensive income for the period 0 358 (21) 62 399 1 400 0 (335) (32) 98 (269) 2 (267) (83) (83) (83) 0 0 0 3 3 3 11 11 11 1 1 1 0 0 0 Equity at 31 March 1,025 (773) (25) 8,229 8,456 (5) 8,451 1,025 (635) (60) 8,191 8,521 16 8,537 FLSmidth Interim Report Q1 2021 20 Notes 1. KEY ACCOUNTING ESTIMATES AND JUDGEMENTS When preparing the financial statements, we are required to make several estimates and judge- ments. The estimates and judgements that can have a significant impact on the financial state- ments are categorised as key accounting esti- mates and judgements. Key accounting esti- mates and judgements are regularly assessed to adapt to the market conditions and changes in political and economic factors. Similarly to what was disclosed in the Annual Re- port 2020 the COVID-19 pandemic has imposed uncertainty to the interim financial statements. For further details, reference is made to The An- nual Report 2020, Key accounting estimates and judgements, pages 63-64 and to specific notes. As of 31 March 2021, we have included updated estimates to assess the recoverability of our as- set base, including intangible assets, deferred tax assets and trade receivables. The uncertain market and liquidity conditions still prevail glob- ally, which continue to be reflected in our ex- pected credit losses (ECL). We have reassessed our projects to reflect estimated implications on project financials, including cost forecasts due to the severity of restrictions. By nature, the up- dated key accounting estimates contains a de- gree of uncertainty and the effects are recog- nised in the relevant period. 2. INCOME STATEMENT BY FUNCTION It is our policy to prepare the income statement based on an adjusted classification of the cost by function in order to show the earnings before special non-recurring items, depreciation, amorti- sation and impairment (EBITDA). Depreciation, amortisation and impairment are therefore sepa- rated from the individual functions and presented in separated lines. The income statement classified by function in- cludes allocation of depreciation, amortisation and impairment. Interim Report Q1 2021 Income statement by function DKKm Q1 2021 Q1 2020 Gross profit 852 957 EBIT 101 146 (171) (173) (171) (173) FLSmidth Interim Report Q1 2021 21 Notes 3. SEGMENT INFORMATION Q1 2021 Q1 2020 DKKm Mining Cement Shared costs¹⁾ Other com- panies ²⁾ Continuing activities Discon- tinued activities ³⁾ FLSmidth Group Mining Cement Shared costs¹⁾ Other com- panies ²⁾ Continuing activities Discon- tinued activities ³⁾ FLSmidth Group Revenue 2,412 1,301 - 0 3,713 0 3,713 2,735 1,790 - 0 4,525 0 4,525 Gross profit 648 306 (19) 0 935 0 935 680 391 (24) 0 1,047 0 1,047 EBITDA before special non-recurring items 442 135 (290) 0 287 (3) 284 449 221 (347) (4) 319 (2) 317 EBITA before allocation of shared costs 403 107 (320) 0 190 (3) 187 414 197 (379) (4) 228 (2) 226 EBITA 213 (23) 0 0 190 (3) 187 201 32 0 (5) 228 (2) 226 EBIT 152 (51) - 0 101 (3) 98 143 8 - (5) 146 (2) 144 Gross margin 26.9% 23.5% 25.2% 25.2% 24.9% 21.8% 23.1% 23.1% EBITDA margin before special non-recurring items 18.3% 10.4% 7.7% 7.6% 16.4% 12.3% 7.0% 7.0% EBITA margin before allocation of shared costs 16.7% 8.2% - - 15.1% 11.0% - - EBITA margin 8.8% -1.7% 5.1% 5.0% 7.3% 1.8% 5.0% 5.0% EBIT margin 6.3% -3.9% 2.7% 2.6% 5.2% 0.4% 3.2% 3.2% Number of employees at 31 March 5,163 3,653 1,373 10,189 0 10,189 5,682 4,784 1,533 11,999 2 12,001 Reconciliation of profit for the period EBT 92 (3) 89 150 (2) 148 1) Shared costs consist of costs that are managed on Region or Group level and subsequently allocated to the divisions. Cost include administration, procurement, logistic and digital. 2) Other companies consist of companies with no activity, real estate companies, eliminations and the parent company. 3) Discontinued activities mainly consist of bulk material handling. FLSmidth Interim Report Q1 2021 22 Notes 4. REVENUE Revenue arises from sale of life cycle offerings to our customers. We sell a broad range of goods and services within the Mining and Cement In- dustries split into the main categories projects, products and services. Six Regions support the sales within the Mining and Cement Industries. Revenue is presented in the Regions in which delivery takes place. In the first quarter of 2021, South America represented a 5%-point lower share of Group revenue than the same period last year. Asia and Australia picked up a higher share of the Group revenue in the first quarter of 2021 compared to same pe- riod in 2020. Backlog The order backlog at 31 March 2021 amounts to DKK 16,251m (2020: DKK 15,591m) and repre- sents the value of outstanding performance obli- gations on current contracts, combined of con- tracts where we will transfer control at a future point in time and the remaining performance ob- ligations on contracts where we transfer control over time. Based on the order backlog maturity profile, the majority, 53% (Q1 2020: 56%) of the order back- log is expected to be converted into revenue in 2021, while 47% (Q1 2020: 44%) is expected to be converted to revenue in subsequent years. Revenue split by Regions Q1 2021 % Revenue split by Regions Q1 2020 % Backlog DKKm 22% 22% 17% 17% 10% 12% North America South America Europe, North Africa, Russia Sub-Saharan Africa, Middle East & South Asia Asia Australia 22% 27% 17% 19% 7% 8% North America South America Europe, North Africa, Russia Sub-Saharan Africa, Middle East & South Asia Asia Australia 56% 53% 23% 36% 21% 11% 0 3,000 6,000 9,000 12,000 15,000 18,000 Q1 2020 Q1 2021 Within current year Within next year Subsequent years Revenue split by industry and category Q1 2021 Q1 2020 DKKm Mining Cement Group Mining Cement Group Capital business 804 508 1,312 1,062 857 1,919 Service business 1,608 793 2,401 1,673 933 2,606 Total revenue 2,412 1,301 3,713 2,735 1,790 4,525 Revenue split by recognition principle Q1 2021 Q1 2020 DKKm Mining Cement Group Mining Cement Group Total revenue 2,412 1,301 3,713 2,735 1,790 4,525 FLSmidth Interim Report Q1 2021 23 Notes 5. PROVISIONS Additions to provisions amounted to DKK 108m in Q1 2021, compared to DKK 72m in Q1 2020, due to continued restructuring measures and marginal changes to provision estimates for loss- making projects as well as disputes and lawsuits. Of the total used provisions of DKK 78m in Q1 2021, DKK 3m related to discontinued activities, both amounts in line with Q1 2020 levels. See note 8 for provision details related to discontin- ued activities. For a description of the main provision catego- ries see note 2.7 in the 2020 Annual Report. 6. CONTRACTUAL OBLIGATIONS AND CONTINGENT LIABILITIES FLSmidth has entered into a conditional agree- ment to sell all and lease back part of its head- quarters in Valby, Denmark. As described in the Annual Report 2020 it has been decided to re- visit the plans for the headquarter and options are being explored. More certainty of the out- come is expected during Q2 or Q3 of 2021. Contingent liabilities at 31 March 2021 amounted to DKK 2.9bn (31 December 2020: DKK 2.6bn), which primarily include performance bonds, pay- ment guarantees and bid bonds at DKK 2.5bn (31 December 2020: DKK 2.4bn) issued to cover project-related risks. Except from the above mentioned no other sig- nificant changes have occurred to the nature and extent of our contractual obligations and contin- gent assets and liabilities compared to what was disclosed in note 2.9 in the 2020 Annual Report. 7. DISPOSAL OF ENTERPRISES On 23 December 2020, FLSmidth announced the sale of advanced fabric filter technology fective as of 1 March 2021. The gain from the transaction was DKK 2m in Q1 2021. The transac- tion price was DKK 3m and the transaction costs amounted to DKK 1m. On 29 December 2020, FLSmidth announced the sale of Möller pneumatic conveying systems business to REEL. The sale of Möller pneumatic conveying systems business was closed 1 Janu- ary 2021. The disposal has no income statement effect in Q1 2021. The assets related to the disposals were in- cluded in assets classified as held for sale as of 31 December 2020. Following the two disposals being effective in the first quarter of 2021 there are no remaining assets classified as held for sale. Provisions DKKm 31/03 2021 31/12 2020 31/03 2020 Provisions 1,023 1,015 944 1,023 1,015 944 1,023 1,015 944 Provisions related to continued activities DKKm 31/03 2021 31/12 2020 31/03 2020 Provisions 844 833 737 FLSmidth Interim Report Q1 2021 24 Notes 8. DISCONTINUED ACTIVITIES Loss for the period from discontinued activities amounted to DKK -3m (Q1 2020: DKK -5m), pri- marily consisting of SG&A cost, refer to note 3. Cash flow from discontinued operating activities totalled DKK -9m. The cash outflow was due to a combination of use of provisions of DKK 3m and change in net working capital. Cash flow from net working capital from discon- tinued activities amounted to DKK -3m (Q1 2020: 10m), as net working capital related to discontin- ued business decreased from DKK 220m at the end of 2020 to DKK 219m as of 31 March 2021. 9. NET WORKING CAPITAL Net working capital as at 31 March 2021 de- creased due to a significant increase in prepay- ments from customers and a reduction in trade receivables, partly offset by a lower level of trade payables and an increase in inventories. Utilisation of supply chain financing decreased in Q1 driven by a lower level of activity and, in particular, by a lower share of Cement business relative to Mining. Utilisation of the programme is expected to increase in Q2 2021. Net working capital DKKm 31/03 2021 31/12 2020 31/03 2020 Net working capital 1,678 1,752 2,792 Cash flow effect from change in net working capital 149 706 (197) Discontinued activities effect on cash flow from operating activities DKKm Q1 2021 2020 Q1 2020 Cash flow from operating activities before financial items and tax (9) (48) 3 Cash flow from operating activities (9) (52) 1 Discontinued activities share of Group provisions DKKm 31/03 2021 31/12 2020 31/03 2020 Provisions 179 182 207 FLSmidth Interim Report Q1 2021 25 Notes 10. FAIR VALUE MEASUREMENT Financial instruments measured at fair value are measured on a recurring basis and categorised into the following levels of the fair value hierar- chy: Level 1: Observable market prices for identical instruments Level 2: Valuation techniques primarily based on observable prices or traded prices for com- parable instruments Level 3: Valuation techniques primarily based on unobservable prices Securities and investments measured at fair value through profit/loss are either measured at quoted prices in an active market for the same type of instrument (level 1) or at fair value based on available data (level 3). Hedging instruments are not traded in an active market based on quoted prices. They are meas- ured instead using a valuation technique, where all significant inputs are based on observable market data; such as exchange rates, interest rates, credit risk and volatilities (level 2). There have been no significant transfers be- tween the levels in the first quarter of 2021 and 2020. 11. EVENTS AFTER THE BALANCE SHEET DATE We are not aware of any subsequent matters that fi- nancial position at 31 March 2021. 12. ACCOUNTING POLICIES The condensed interim report of the Group for the first quarter of 2021 is presented in accord- ance with IAS 34, Interim Financial Reporting, as approved by the EU and additional Danish dis- closure requirements regarding interim reporting by listed companies. Apart from the below mentioned changes, the accounting policies are unchanged from those applied in the 2020 Annual Report. Reference is made to note 7.5, Accounting policies, note 7.6, Impact from new IFRS, note 7.7, New IFRS not yet adopted and to specific notes in the 2020 An- nual Report for further details. Alternative Performance Measures (APM) are un- changed from those applied in the 2020 Annual Report, refer to note 7.4 in the 2020 Annual Re- port for a description of used APM. Changes in accounting policies As of 31 March 2021, the FLSmidth Group has im- plemented all new or amended accounting standards and interpretations as adopted by the EU and applicable for the 2021 financial year, in- cluding the following, which is the most relevant for FLSmidth: Interest Rate Benchmark Reform Phase 2 (amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) (issued 2020) The implementation has not had and is not ex- pected to have significant impact on the consoli- dated financial statements. Financial instruments Q1 2021 DKKm Level 1 Level 2 Level 3 Total 9 12 38 59 Q1 2020 DKKm Level 1 Level 2 Level 3 Total 6 7 38 51 FLSmidth Interim Report Q1 2021 26 Statements The Board of Directors and Executive Manage- ment have today considered and approved the consolidated condensed interim financial state- ments for the period 1 January 31 March 2021. The consolidated condensed interim financial statements are presented in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU and Danish disclosure requirements for interim reports of listed companies. The consoli- dated condensed interim financial statements have not been audited or reviewed by the In our opinion, the consolidated condensed in- terim financial statements give a true and fair 1 March 2021 as well as of the results of its operations and cash flows for the period 1 January 31 March 2021. In our opinion, the management review gives a tivity and financial matters, results of operations, cash flows and financial position as well as a de- scription of the principal risks and uncertainties that the Group faces. In our opinion, the interim report for the financial year 1 January - 31 March 2021 with the file name 213800G7EG4156NNPG91-2021-03-31_en.zip is prepared, in all material respects, in compliance with the ESEF Regulation. Valby, 5 May 2021 Executive management Thomas Schulz Group CEO Roland M. Andersen Group CFO Board of directors Vagn Ove Sørensen Chairman Tom Knutzen Vice chairman Gillian Dawn Winckler Thrasyvoulos Moraitis Richard Robinson Smith Anne Louise Eberhard Carsten Hansen Leif Gundtoft Claus Østergaard STATEMENT BY MANAGEMENT FLSmidth Interim Report Q1 2021 27 Statements the form of annual reports or interim reports, filed with the Danish Business Authority and/or an- NASDAQ Copenhagen, as well as any presenta- tions based on such financial reports, and any other written information released, or oral state- ments made, to the public based on this report or in the future on behalf of FLSmidth & Co. A/S, may contain forward looking statements. other words and terms of similar meaning in con- nection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to: Statements of plans, objectives or goals for fu- ture operations, including those related to FLS- search and product development. Statements containing projections of or targets for revenues, profit (or loss), CAPEX, dividends, capital structure or other net financial items. Statements regarding future economic perfor- mance, future actions and outcome of contin- gencies such as legal proceedings and state- ments regarding the underlying assumptions or relating to such statements. Statements regarding potential merger & acquisition activities. These forward-looking statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which may be outside FLSmidth & Co fect such forward-looking statements. FLSmidth & Co. A/S cautions that a number of im- portant factors, including those described in this report, could cause actual results to differ materi- ally from those contemplated in any forward- looking statements. Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and exchange rate fluctuations, delays or faults in project execution, fluctuations in raw material prices, delays in research and/or development of new products or service concepts, interruptions of supplies and production, unexpected breach or termination of contracts, market-driven price reductions for FLSm and/or services, introduction of competing prod- ucts, reliance on information technology, current and new products, exposure to product liability and legal proceedings and investigations, changes in legislation or regulation and interpre- tation thereof, intellectual property protection, perceived or actual failure to adhere to ethical marketing practices, investments in and divesti- tures of domestic and foreign enterprises, unex- pected growth in costs and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance. Unless re- quired by law FLSmidth & Co. A/S is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this report. FORWARD LOOKING STATEMENTS Forward looking statement MAIN CONCLUSIONS – continued 5 Interim report Q3 2017 FLSMIDTH Interim Report 1 January – 31 March 2021 FLSmidth & Co. A/S Vigerslev Allé 77 DK-2500 Valby Denmark Tel.: +45 36 18 18 00 Fax: +45 36 44 11 46 corppr@smidth.com www.smidth.com CVR No. 58180912 213800G7EG4156NNPG912021-01-012021-03-31213800G7EG4156NNPG912021-01-012021-03-31cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-311cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-312cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-311cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-312cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-313cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-314cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-315cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-316cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-317cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-318cmn:ConsolidatedMember213800G7EG4156NNPG912021-01-012021-03-319cmn:ConsolidatedMember213800G7EG4156NNPG912020-01-012020-03-31213800G7EG4156NNPG912020-12-31213800G7EG4156NNPG912021-03-31213800G7EG4156NNPG912019-12-31213800G7EG4156NNPG912020-03-31213800G7EG4156NNPG912020-12-31ifrs-full:IssuedCapitalMember213800G7EG4156NNPG912021-01-012021-03-31ifrs-full:IssuedCapitalMember213800G7EG4156NNPG912021-03-31ifrs-full:IssuedCapitalMember213800G7EG4156NNPG912020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800G7EG4156NNPG912021-01-012021-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800G7EG4156NNPG912021-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800G7EG4156NNPG912020-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800G7EG4156NNPG912021-01-012021-03-31ifrs-full:ReserveOfCashFlowHedgesMember213800G7EG4156NNPG912021-03-31ifrs-full:ReserveOfCashFlowHedgesMember213800G7EG4156NNPG912020-12-31ifrs-full:RetainedEarningsMember213800G7EG4156NNPG912021-01-012021-03-31ifrs-full:RetainedEarningsMember213800G7EG4156NNPG912021-03-31ifrs-full:RetainedEarningsMember213800G7EG4156NNPG912020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800G7EG4156NNPG912021-01-012021-03-31ifrs-full:EquityAttributableToOwnersOfParentMember213800G7EG4156NNPG912021-03-31ifrs-full:EquityAttributableToOwnersOfParentMember213800G7EG4156NNPG912020-12-31ifrs-full:NoncontrollingInterestsMember213800G7EG4156NNPG912021-01-012021-03-31ifrs-full:NoncontrollingInterestsMember213800G7EG4156NNPG912021-03-31ifrs-full:NoncontrollingInterestsMember213800G7EG4156NNPG912019-12-31ifrs-full:IssuedCapitalMember213800G7EG4156NNPG912020-01-012020-03-31ifrs-full:IssuedCapitalMember213800G7EG4156NNPG912020-03-31ifrs-full:IssuedCapitalMember213800G7EG4156NNPG912019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800G7EG4156NNPG912020-01-012020-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800G7EG4156NNPG912020-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800G7EG4156NNPG912019-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800G7EG4156NNPG912020-01-012020-03-31ifrs-full:ReserveOfCashFlowHedgesMember213800G7EG4156NNPG912020-03-31ifrs-full:ReserveOfCashFlowHedgesMember213800G7EG4156NNPG912019-12-31ifrs-full:RetainedEarningsMember213800G7EG4156NNPG912020-01-012020-03-31ifrs-full:RetainedEarningsMember213800G7EG4156NNPG912020-03-31ifrs-full:RetainedEarningsMember213800G7EG4156NNPG912019-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800G7EG4156NNPG912020-01-012020-03-31ifrs-full:EquityAttributableToOwnersOfParentMember213800G7EG4156NNPG912020-03-31ifrs-full:EquityAttributableToOwnersOfParentMember213800G7EG4156NNPG912019-12-31ifrs-full:NoncontrollingInterestsMember213800G7EG4156NNPG912020-01-012020-03-31ifrs-full:NoncontrollingInterestsMember213800G7EG4156NNPG912020-03-31ifrs-full:NoncontrollingInterestsMemberiso4217:DKKiso4217:DKKxbrli:sharesFLSmidth & Co. A/SDenmarkA/SDenmarkVigerslev Allé 77, 2500 ValbyDenmarkFLSmidth is a leading provider of engineering, equipment and service solutions to the global mining and cement industries.FLSmidth & Co. A/SFLSmidth & Co. A/SN/AInterim report (other than 6 months)No audit assistanceParsePort XBRL Converter2021-01-012021-03-312020-01-012020-03-31213800G7EG4156NNPG91FLSmidth & Co. A/SReporting class D58180912Vigerslev Allé772500ValbyValby2021-05-05Thomas SchulzGroup CEORoland M. AndersenGroup CFOVagn Ove SørensenChairmanTom KnutzenVice chairmanGillian Dawn WincklerThrasyvoulos MoraitisRichard Robinson SmithAnne Louise EberhardMette DobelSøren Dickow QuistgaardClaus Østergaard213800G7EG4156NNPG9158180912FLSmidth & Co. A/SVigerslev Allé 772500 Valby
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