Q3 2025 FLSmidth & Co A/S Earnings Call Transcript
Key Points
- FLSmidth & Co AS (FLIDF) has successfully completed a major transformation, focusing 80% of its business on high-margin, low-risk recurring services and PCV, which have significant growth potential.
- Service orders increased organically by 10%, with positive market momentum expected to continue into the next quarter.
- The company has closed its cement sale, marking a significant milestone in its transformation strategy.
- FLSmidth & Co AS (FLIDF) sold the largest filter tailing system in the world during the quarter, aligning with its strategy to lead in core products for large mines.
- The company maintains a strong position in the copper market, with 70% of the world's copper passing through its gyratory crushers, positioning it well for future market recovery.
- The company is at the low end of its revenue guidance for the year, indicating potential challenges in meeting higher revenue targets.
- Service profitability is slightly low due to lower revenue months, with a baseline EBITDA around 20%, subject to volume variations.
- Product market activity is currently slow, with a significant focus on critical minerals like copper, which are not expected to recover until the end of 2026.
- FLSmidth & Co AS (FLIDF) has undertaken significant cost-cutting measures, including reducing its workforce by 250 to 300 people, which may impact operations.
- There are ongoing challenges in order execution and internal processes, which have caused some delays in service revenue recognition.
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Good morning from Copenhagen and welcome to the FLS quarter 3 earnings call. I'm extremely upbeat about the IFRS result and where we are at the moment. And if we really reflect where we are coming from, we are fairly close to completing the major transformation of the company.
And I'm especially happy about service and PCV performance, which are now at a good level, 80% of the business. 80% of the business is high margin, low risk recurring with a fantastic growth potential. Also another major milestone has been closing of the cement sale. So that is a major milestone for the FLS.
For the quarter, we are extremely proud about the service development. Service orders increased organically 10% and the positive market momentum will continue. And we're also looking at this positive development would continue in quarter 4. And then also that we will highlight our growth ambitions in service in our Capital Market Day in quarter 1. When we look at the product business, we've done lots of portfolio
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