Q2 2025 FLSmidth & Co A/S Earnings Call Transcript
Key Points
- FLSmidth & Co AS (FLIDF) reported a strong gross profit margin of over 35%, driven by a favorable revenue mix.
- The company achieved a significant reduction in SG&A costs, contributing to an improved EBITA margin of 15.2%, up from 10.3% in the previous year.
- The Pumps, Cyclones & Valves (PCV) business line showed impressive growth and profitability, serving as an internal benchmark for high performance.
- FLSmidth & Co AS (FLIDF) maintained a strong cash flow from operating activities, amounting to DKK527 million for the quarter.
- The company successfully executed a share buyback program and paid out substantial dividends, maintaining a leverage ratio comfortably below the target.
- The product business line experienced a negative EBITA due to low volumes, impacting overall profitability.
- Order intake in North America was weak, particularly in the area of retrofits and upgrades, leading to a decline in organic service order intake.
- The market for heavy capital equipment remains soft, with expectations for recovery pushed to the latter part of 2026.
- The company faces challenges in improving safety standards, which are not yet at a satisfactory level.
- FLSmidth & Co AS (FLIDF) is undergoing restructuring in the product business line to address high fixed costs and scalability issues.
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I would like to welcome everybody to FLS's earnings call for quarter two and first half of the year. Its 20th of August, and I'm in the studio of celebrating my birthday with Roland, and we are going through the numbers.
There has been a lot of changes in how we are reporting. And the reason for that is that Cement is now a discontinued business. So what we decided to do, we are actually opening up as requested by you and the market to give a little bit more visibility for the performance of different businesses. And the split is service business line, products and Pumps, Cyclones & Valves. Pumps, Cyclones & Valves includes both capital business and service business. In typical steady state is 25-75. It's very simple, if you think about our business model, we sell products to sell spare parts and wear parts. We focus on excellent lifetime service to our customers, and we want to be a technology leader in our products.
And if you look at the peak of the Pumps, Cyclones & Valves,
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